IFRASIA INTERNATIONAL FINANCING REVIEW ASIA

October 7 2017 ISSUE 1012 www.ifrasia.com

Qudian quickly covered as buyers flock to China’s biggest US fintech IPO

India sets high target for GIC Re after cool trading debuts for local insurers

South Korean issuers court debt investors after missile tests trigger heavy selling

PLUS: Quarterly league tables

BONDS LOANS LOANS PEOPLE & MARKETS Samurai market NTPC breaks new SoftBank launches Chinese banks shrinks as swap ground in yen Asia’s largest retain top spots on costs deter high- market with first syndication to repay Asian investment rated issuers 10-year tenor acquisition debt banking fees 06 08 08 14

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www.loanpricing.com [email protected] Upfront OPINION INTERNATIONAL FINANCING REVIEW ASIA

Model of success Global banks have proven their value in 2017, and will be looking to build on their successes in 2018. The model lobal banks are doing a decent job of hanging on works, but it’s not clear for how long. to market share in Asian investment banking, at G least according to the 2017 league tables. The battle, however, isn’t going to get any easier. Still on hold Asia’s local banks have eaten away at margins and distorted economics in primary capital raising in recent f anyone thought that India’s overhaul of its insolvency years, but the hype has taken a back seat to reality in the code might speed up debt resolutions, this week’s lRSTûTHREEûQUARTERSûOFûTHEûYEARû&OURûOFûTHEûTOPûlVEûEQUITYû I developments at one of the country’s biggest companies UNDERWRITERSûINû!SIAû0ACIlCûAREûGLOBALûBANKS ûANDûTHEûTOPûû suggest otherwise. G3 bond houses include just one regional player, with Bank It had all started so well – the Reserve Bank of India put of China in seventh spot. pressure on banks to recognise the true scale of their bad 'RANTED ûTHEûCURBSûONû#HINESEûOUTmOWSûMAYûHAVEû loans, and then forced them to start insolvency proceedings temporarily distorted the tables in favour of international AGAINSTûSOMEûDELINQUENTûBORROWERSû%SSARû3TEEL ûWHICHû arrangers. But it’s also true that local competitors have not DEFAULTEDûBACKûINû ûQUICKLYûSOLDûAûPORTûASSETûTOûREPAYû yet managed to unseat their global rivals on block trades creditors. and high-yield bonds. Measures allowing creditors to take control of defaulters Unfortunately for the likes of Goldman Sachs, it’s only a THROUGHûEQUITYûCONVERSIONûWEREûALSOûDESIGNEDûTOûSHOCKû borrowers into staying current on their interest payments. Reliance Communications, though, is dragging its feet, and its lending banks share some of the responsibility. Local competitors have not In June the troubled telco entered a standstill yet managed to unseat their arrangement with its lenders, giving it until the end of the year to complete divestments it had already announced, and global rivals on block trades allowing it to reduce debt to a sustainable level. Last week, though, it called off a merger of its wireless and high-yield bonds. unit and said a sale of a stake in its tower business would be delayed. Buried in the middle of one of the announcements was a note that its debt standstill had been extended to the matter of time before that changes. end of 2018. !SIANûINVESTMENTûBANKINGûISûATûANûINmECTIONûPOINTû If banks really think that they will maximise value by Companies across the region are embracing the capital giving RCom more time and allowing it to negotiate new MARKETSûASûNEVERûBEFORE ûANDûRISINGûLOCALûPROlTSûMEANû sale terms, then that makes sense, but the casual nature of OVERSEASûACQUISITIONSûAREûNOWûONûTHEûTABLE the announcement raises concerns that lenders are again But Asia is still primarily about relationship banking, avoiding tough decisions. WHEREûlNANCEûANDûPRICEûOFTENûTRUMPûIDEASûANDûADVICEû!Sû RCom and its founder, Anil Ambani, are corporate royalty regional lenders expand into underwriting and advisory INû)NDIA ûWHEREûBANKSûAREûlNDINGûITûHARDûTOûBREAKûTHEIRûOLDû business, global banks will need to put their balance sheets bad habits. Lenders may even be hoping that his brother, to work to remain competitive. It’s perhaps notable that Mukesh, will ultimately bail out his sibling, even though Citigroup and HSBC rank highest among global banks by it was his upstart telco, Reliance Jio, that contributed to overall investment banking revenues so far this year. RCom’s predicament. The rise of the Asian investor, too, will challenge the This is exactly the kind of thinking that contributed to global model. It’s already clear that companies can issue THEûASSETûQUALITYûPROBLEMSûATûTHEûCOUNTRYSûBANKSû.OWû billions of US dollars in bonds without the help of a single that creditors no longer face decade-long court battles to 53ûORû%UROPEANûINVESTORû)FûTHEûEQUITYûBLOCKûTRADESûOFûTHEû collect on debts, they need to make sure they use their new future involve Chinese shareholders and Chinese buyers, RIGHTSûANDûTREATûALLûBORROWERSûEQUALLY ûREGARDLESSûOFûSIZEûANDû why go with a non-Chinese bank? INmUENCE

International Financing Review Asia October 7 2017 1 INTERNATIONAL FINANCING REVIEW ASIA CONTACTS

EDITOR EDITOR, IFR COMPANY INDEX Japan Retail Fund Investment Corp 29 Steve Garton Matthew Davies 21Vianet Group 23 JTEKT Corp 29 +852 2912 6670 +44 (0)20 7542 7504 [email protected] DESK EDITOR ACME Solar 26 Kepco 6 HEAD OF ASIAN CREDIT Vincent Baby Alliance Bank Malaysia 30 Kia Motors 6 Daniel Stanton SUB-EDITOR +65 6417 4548 Anyou Biotechnology Group 24 KK A-Wind Energy 29 Dharsan Singh ASIA EQUITIES EDITOR Apollo Tyres 27 Koh Brothers Group 33 Fiona Lau HEAD OF PRODUCTION AU Optronics Corp 9 +852 2912 6673 Victor Ng Lao People’s Democratic Republic 35 PRODUCTION ASSISTANT Auckland International Airport 21 DEPUTY HEAD OF ASIAN CREDIT Lemon Tree Hotels 27 Mike Tsui Frances Yoon Australian Office of Financial Macronix International 34 +852 2841 5783 HEAD OF GLOBAL ADVERTISING AND Management 10 DEPUTY EQUITIES EDITOR, ASIA SPONSORSHIP Malaysia Airports Holdings 30 S. Anuradha Shahid Hamid Bank of Qingdao 24 +65 6417 4547 +65 9755 5031 Maxi-Cash Financial Services Corp 33 Banque Federative du Credit Mutuel 30 SENIOR CREDIT CORRESPONDENT, ASIA IFR ASIA AWARDS MANAGER MotorCycle Holdings 22 BCPE Madison Cayman LP 29 Kit Yin Boey Paul Holliday Noble Group 34 +65 6417 4549 +44 (0)20 7542 8018 Beach Energy 22 NTPC 8 ASIA PACIFIC BUREAU CHIEF, LOANS GLOBAL ADVERTISING Bright Food (Group) 22 Prakash Chakravarti PRODUCTION MANAGER Power Finance Corp 25 +852 2912 6671 Gloria Balbastro Cairn India Holdings 26 PropertyGuru 34 SENIOR REPORTERS: HONG KONG +44 (0)20 7542 4348 China Aircraft Leasing Robert Hartley SUBSCRIPTION SALES ENQUIRIES Group Holdings 24 Province of Alberta 21 +852 2841 5768 China, Hong Kong, Taiwan, Korea, Japan Qudian 4 Thomas Blott Alan Wong China Citic Bank 23 +852 2841 5878 +852 2912 6606 China Tian Lun Gas Holdings 25 Queensland Treasury Corp 21 Carol Chan India, Singapore, Malaysia, Thailand, Citic Envirotech 32 Reliance Communications 10 +852 2912 6604 Indonesia and Australia CW Advanced Technologies 34 EQUITY RESEARCHER: BEIJING Samantha Harris Reliance Industries 26 Ken Wang +612 9373 1749 DONG Energy A/S 9 Reliance Jio Infocomm 26 +86 10 6627 1259 SUBSCRIPTION ACCOUNT MANAGER Dongfeng Nissan Auto Finance 23 Saka Energi Indonesia 27 SENIOR REPORTER: SYDNEY Pia Batuan John Weavers Emperor International Holdings 24 +65 6403 5542 Seven Islands Shipping 27 +61 2 9373 1655 Export-Import Bank of Korea 6 SIA Engineering 34 SENIOR ANALYST: TOKYO CLIENT SERVICES Ezion Holdings 32 Takahiro Okamoto [email protected] Singapore Airlines 33 +813 6441 1773 WEBSITE Frasers Centrepoint 33 SoftBank Group 8 ASIAN CREDIT CORRESPONDENT www.ifrasia.com Garuda Food Group 27 Krishna Merchant Spark Finance 21 EMAIL ADDRESSES +65 6417 4544 General Insurance Corp of India 4 [email protected] Standard Life Aberdeen 31 REPORTER: HONG KONG Genting Singapore 31 Ina Zhou Sumitomo Mitsui Financial Group 29 Global Cloud Xchange 10 +852 2912 6674 Taiwan-Japan Oxo Global Logistic Properties 23 Chemical Industries 9 Global Power Synergy 35

GSH 33 Toshiba Memory Corp 30

Heritage Bank 21 Union Bank of the Philippines 30 HONG KONG (HEAD OFFICE) SINGAPORE 16/F Cityplaza 3, 18 Science Park Drive, Hindustan Aeronautics 26 Uxin 24 14 Taikoo Wan Road, Singapore 118229, Singapore Taikoo Shing, +65 6775 5088 Indian Oil Corp 8, 25 Vedanta Resources 26 Hong Kong Invincible Investment 29 Winbond Electronics 9 +852 2843 6363 LONDON 30 South Colonnade, Canary Wharf, TOKYO London E14 5EP 30F Akasaka Biz Tower, +44 (0)20 7250 1122 5-3-1 Akasaka, NEW YORK Minato-ku, Tokyo, 3 Times Square, 18th Floor Japan 107-6330 make the most of New York, NY10036 +813 6441 1119 +1 646 223 4000 your success stories

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2 International Financing Review Asia October 7 2017

1012_02 Index.indd 2 06/10/2017 21:45:29 INTERNATIONAL FINANCING REVIEW ASIA Contents OCTOBER 7 2017 ISSUE 1012

COVER STORIES COUNTRY REPORT

EQUITIES 04 Qudian builds early momentum 21 AUSTRALIA 31 SINGAPORE Qudian has drawn strong early support for its NYSE Province of Alberta raised Genting Singapore mandated A$300m from the sale last SMBC Nikko last week for an listing as it looks to raise up to US$825m in the biggest Wednesday of two-tranche inaugural offering of three- US IPO from China’s financial technology sector. Kangaroo bonds via sole lead tranche Samurai bonds later manager RBC Capital Markets this month EQUITIES 04 GIC Re courts wary investors 22 CHINA 34 TAIWAN GIC Re is demanding a high valuation for its Rs113.7bn Bright Food (Group) will buy Macronix hired Bank of Taiwan back at par its remaining and Taiwan Cooperative Bank IPO, despite fears weak showings of listings from the US$500m of 3.00% 2018 notes as mandated lead arrangers insurance sector may deter individual investors. on completing a cash tender and bookrunners on a NT$7bn offer last week refinancing loan BONDS 06 Missiles rattle Korean issuers 24 HONG KONG 35 THAILAND Global investors are pushing back against offshore Emperor International Holdings The Lao People’s Democratic has bought back half of its Republic completed its largest bonds from South Korea, as North Korean missile tests HK$800m 4.70% due 2022 HK and longest bond issue, with a and threats from the US raise fears of a military clash. dollar bonds issued six months Bt14bn six-tranche offering in ago the Thai debt capital markets

NEWS 25 INDIA Power Finance Corp has sent 06 Samurai shrinks on swap costs out a request for proposals for a Japan’s Samurai bond market has shrunk by ¥490bn so US$200m five-year bullet loan far this year as overseas issuers turned to other markets on its second attempt this year for refinancing. to tap banks for financing

08 NTPC breaks new ground NTPC is breaking new ground for Indian 27 INDONESIA borrowers with the first 10-year unsecured yen loan. General syndication of Saka 08 Softbank aims for record loan SoftBank Group has launched a ¥2.6trn Energi Indonesia’s US$250m 16 mammoth financing, Asia’s largest syndicated loan. five-year loan has closed with 09 Taiwan lenders flock to capex loans Taiwanese companies with strong around seven to eight banks credit profiles are turning to syndicated loans to finance capital expenditure. participating

29 JAPAN PEOPLE & MARKETS Sumitomo Mitsui Financial Group priced on Wednesday 14 Chinese banks add to lead in IB fees €500m of seven-year senior Chinese banks consolidated their positions as the top unsecured Green bonds at mid- earners in Asian investment banking for the first three swaps plus 41bp quarters of 2017, taking the top three slots. 30 MALAYSIA 16 Who’s moving where Barclays has appointed Reid Marsh head of Alliance Bank Malaysia has banking for Europe, the Middle East and Asia-Pacific. registered with the Securities 17 In brief South Korea’s financial regulator issued a ban on initial coin Commission of Malaysia a offerings, following similar restrictions introduced in China. M$1bn AT1 issuance scheme 18 Interview Mohamed Nazri Omar of Danajamin Nasional talks about how on which AIB is principal the state-owned agency is pushing into new forms of guarantees. adviser 20 Comment Jonathan Rogers Globalisation alive and well in Asian banking 30 PHILIPPINES Union Bank of the Philippines said its board of directors had ASIA DATA approved the establishment of a euro MTN programme of up 36 This week’s figures to US$1bn

International Financing Review Asia October 7 2017 3 News Korea risk aversion 06 Shrinking Samurai 06 NTPC borrows long yen 08 Qudian builds early momentum

„ Equities Investors embrace biggest US listing from China’s fintech sector

BY FIONA LAU From recent IPOs, we can see of recently listed Chinese logistics company Best, which US investors actually have good biotech firm Zai Lab and pre- slashed its IPO size to US$450m Online microlender QUDIAN has appetite for Chinese listings if school education provider from US$932m after a poor drawn strong early support they are priced sensibly,” said a RYB Education were 50% and response during bookbuilding, for its NYSE listing as it looks banker on the deal. 59% above their IPO prices, closed at US$11.53 last Tuesday, to raise up to US$825m in the As of last Tuesday, shares respectively. Even Chinese 15% above its IPO price. biggest US IPO from China’s financial technology sector. Qudian, backed by Alibaba’s Ant Financial, started taking orders last Wednesday and covered the IPO within the first day of bookbuilding, according to people close to the deal. It is selling 37.5m American depositary shares (95% primary) at an indicative price range of US$19–$22 each. Bankers said Qudian launched the IPO with a competitive valuation to draw high-quality long-only funds. The price range represents a 2018 P/E of 10.9–12.6, in line with the 2018 forecast multiple of about 11.4 for smaller US-listed rival Yirendai. “We prefer to start off with a reasonable valuation and build momentum from there.

given GIC Re’s low profile GIC Re courts wary investors among retail investors and the unspectacular performances „ Equities Reinsurer launches biggest IPO since 2010 as SBI Life, ICICI Lombard weaken of ICICI Lombard and SBI Life, which went public in BY S ANURADHA industry average of 0.8–0.9 and Indian financial stocks September. GIC Re will be the above peers in other growth have always commanded a first reinsurer to list in India. State-owned reinsurer GENERAL markets. China Reinsurance premium on higher growth Arrangers were quick to INSURANCE CORP OF INDIA (GIC Re) defend the valuation. is demanding a high valuation “Yes, GIC Re may appear for its Rs113.7bn (US$1.74bn) expensive, but remember its IPO, despite fears that the weak return on equity is 16%–17%, performances of recent listings “All the government-owned investors will put compared with the global from the insurance sector may their might behind this IPO, but HNIs and retail peers’ 8%–10%,” said a banker deter individual investors. on the deal. India’s largest float since investors have their own minds.” The top of the range Coal India’s Rs155bn IPO in represents a P/E ratio of 24.97 2010 will open to investors this for the financial year to March week at a price of Rs855–Rs912 31 2017, a modest premium to a share. That implies price-to- 23.26 for the benchmark Nifty book multiples of 1.55–1.65 for Group, for example, trades at expectations, but bankers and 50 index. 2017 and 1.42–1.52 for 2018, a 0.96 times 2017 book value and market participants had been The Indian government, sizable premium to the global 0.9 times 2018. hoping for a bigger concession, which is selling most of the

4 International Financing Review Asia October 7 2017 For daily news stories visit www.ifrasia.com Taiwan capex loans 09 RCom plan in doubt 10 League tables 11

“Starting off with an deals of about Rmb38.2bn Ant Financial owns a backed by institutional funding, attractive valuation to lock in (US$5.7bn) for seven million 12.8% stake and also has a however, were not targeted. investors is a good strategy for active borrowers. As of June 30, strategic partnership with the Qudian listed the regulatory US IPOs as the leads can always the ratio of loans past due for microlender. Qudian engages uncertainty as a risk factor in push the price limits higher, 30 days was 1.14%. with the majority of its active its prospectus. later, on strong momentum The company’s rapid growth borrowers through the Alipay “If the PRC government and, eventually, price the deal and high margins have caught platform and also collaborates adopts a stringent regulatory above the range,” said a banker investors’ attention. It turned with Zhima Credit, an Ant framework for the online away from the transaction. consumer finance industry in the future, and subjects RAPID GROWTH market participants, such Established in April 2014, as our company, to specific Qudian uses big data-enabled “We prefer to start off with a reasonable valuation requirements (including technologies, such as artificial and build momentum from there. From recent without limitation, capital intelligence and machine IPOs, we can see US investors actually have good requirements, reserve learning, to target quality, appetite for Chinese listings if they are priced requirements and licensing albeit unserved or underserved, sensibly.” requirements), our business, consumers in China. Its website financial condition and allows college students and prospects would be materially young white-collar workers to and adversely affected.” buy laptops, smartphones and Books will close on October other consumer electronics on profitable two years after Financial-operated credit 17 and pricing is slated for the monthly instalments. inception, posting net income assessment service. same day after the US market Qudian mainly offers small of Rmb577m in 2016, according close. loans with short tenors. Its to a regulatory filing. For the POTENTIAL RISK The company will use cash credit products have an first six months of 2017, its One big unknown, though, is the proceeds for marketing average size of about Rmb920 revenue jumped 393% year regulatory risk. and borrower engagement (US$138) and weighted-average on year to Rmb1.83bn, while “Although we like Qudian, activities, strategic acquisitions term of around two months. its net income soared 695% to the unclear policies in China and general corporate purposes. Meanwhile, its merchandise Rmb974m. governing internet finance are Phoenix Entities, Kunlun credit products have an average “The growth of Qudian is still a potential risk,” said the Group, Source Code Accelerate size of about Rmb1,250 and impressive and it’s backed by investor. and Blue Run Entities are the weighted-average term of Ant Financial, which gives us China introduced rules at the selling shareholders. around eight months. more confidence over other beginning of the year to crack Credit Suisse, CICC, Citigroup, In the six months to June online microlenders,” said an down on unqualified peer-to- Morgan Stanley and UBS are joint 30, the company facilitated investor. peer lenders. Online lenders bookrunners on the IPO. „

shares in the GIC Re listing, categories. Bankers away from state-owned institutions and market gains for investment has priced the stock well below the deal said the GIC Re brand foreign investors. income for general insurance local insurers in a bid to draw recall with retail investors was “All the government-owned companies,” said Rana B support. low because, as a reinsurer, investors will put their might Gupta, managing director ICICI Lombard priced its IPO its operations are business to behind this IPO, but HNIs and (India equities) at Manulife at a P/B multiple of 8.1 for the business and not business to retail investors have their own Asset Management. “Also, the financial year to March 31. SBI consumer. minds,” a broker said. lower rate environment could Life was priced at 4.25 times “State Bank of India, with all Although insurance negatively impact investment its 2017 embedded value and its banking and mutual fund companies are expected to income.” higher than ICICI Prudential network, could not get enough benefit from the growth The GIC Re IPO will open for IPO valuation of 3 times. retail applications, then what potential in India, some market subscription on October 11-13. Last Thursday, SBI Life shares to say of GIC Re, which has participants are flagging The float will involve the closed at Rs694.56, below the virtually no retail presence,” concerns that expectations of sale of up to 124.7m shares, Rs700 IPO price, while ICICI the banker said. continued low interest rates or 14.2% of the capital. The Lombard was barely in the SBI Life’s IPO was 3.58 times may not work to the advantage government will sell 107.5m black at Rs666.20, versus an IPO subscribed on strong interest of general insurers. General shares and the company will price of Rs661. from institutional investors, but insurance companies invest make available 17.2m primary the portion reserved for retail close to 75% of their portfolios shares. RETAIL SUPPORT investors was only 0.85 times in bonds. Axis Capital, Citigroup, Deutsche Support from high-net- covered. “Interest rates are likely to Bank, HSBC and Kotak are the worth and retail investors is GIC Re’s institutional stay lower for a longer time bookrunners. All four, except important as 50% of the IPO portion is again expected to in India. As a result, we may for HSBC, also worked on the shares are reserved for the two sail through with support from have seen the peak of mark-to- SBI Life IPO. „

International Financing Review Asia October 7 2017 5 News Missiles rattle Korean issuers „„Bonds European and Asian funds review exposure as Won outflows increase

By FRANCES YOON bonds. from banks for a US dollar dispute, is also looking to issue Kexim is said to be eyeing bond. Kia Motors, which had to US dollar debt this month. The Global investors are showing a transaction this year, while delay a bond sale targeted for Korean carmaker will meet signs of pushing back against Kepco has invited proposals August due to a labour court investors in the US, Europe and offshore bonds from South Korea, as North Korean missile tests and threats from the US raise fears of a military clash. A top European asset manager and a Singaporean fund were said to be either selling Korean debt or not buying new issues until tensions subsided, following Pyongyang’s two intercontinental ballistic missile launches and its most powerful nuclear test on September 3. The current crisis sets a grim backdrop for prospective issuers, such as KIA MOTORS, EXPORT-IMPORT BANK OF KOREA and KEPCO, which are preparing to brief investors or looking for windows to issue US dollar

such as Nordea and Rabobank, Samurai shrinks on swap costs did not come back to the yen market even when large „„Bonds High-rated foreign issuers refinance yen debt elsewhere amounts of their bonds were maturing. JP Morgan saw By TAKAHIRO OKAMOTO requirements, like us, the to tap the Samurai market a total ¥210bn of Samurai Australians, Canadians, most in January to refinance. The bonds mature in February, Japan’s Samurai bond market Scandinavians.” former raised ¥114bn by as did BAML a total ¥140bn has shrunk by ¥490bn Cumulative volume from issuing seven and 10-year in June. Rabobank’s ¥96.3bn (US$4.3bn) so far this year as January to September was Samurai, versus the maturing and Nordea’s ¥90.2bn notes overseas issuers turned to other ¥1.086trn, up from ¥1.045trn ¥85bn, while the latter issued also matured in May and June, markets for refinancing. in the same three quarters last ¥100bn in the same two respectively, without being While Samurai bond sales year, but still only halfway to maturities, versus the maturing refinanced by yen bonds. in the first nine months were the ¥2trn threshold many yen ¥98bn. The comparatively tight up slightly on the same period bankers are aiming for every French bank BPCE, a well- credit spreads in dollars and last year, major redemptions year. known regular Samurai issuer euros have made the yen have dragged net issuance into According to data from with a focus on maintaining market much less attractive. negative territory. DealWatch, a Thomson relationship with Japanese “You would need to pay High-rated frequent issuers, Reuters publication, a total investors, did Samurai deals about 10bp–50bp extra if you the mainstay of the Samurai of ¥1.576trn of Samurai twice this year. It sold ¥142.7bn issue in yen, depending on market, have found it cheaper bonds matured in January to in January and ¥58.1bn in your credit ratings,” said a US to refinance their maturing yen September, and an additional June, both to institutional banker. bonds in their home currencies. ¥413bn come due before the investors, and even provided Korean names also steered “It is too expensive to issue end of this year. This means retail investors with ¥10bn of away from Japanese bond in yen and swap the proceeds that Samurai redemptions five-year senior non-preferred issues, though this is thought to to US dollars or euros,” said are outpacing new issues, Samurai in July. be for different reasons. Korea Kazuhide Tanaka, head of long shrinking the size of the But many others did not Development Bank and Kexim term funding at Rabobank market by ¥490bn this year. return. had ¥10.7bn and ¥53.4bn of Tokyo. “This is especially Australia and New Zealand US banks, such as JP Morgan bond redemptions, respectively, true for higher-rated issuers Banking Group and National and Bank of America Merrill so far this year. who have tighter spread Australia Bank were quick Lynch, and European banks, “Due to geopolitical tensions

6 International Financing Review Asia October 7 2017

1012_04 News.indd 6 06/10/2017 21:44:45 For daily news stories visit www.ifrasia.com

Asia starting from October 9. on September 28, the weakest at the end of last month raised with North Korea but that “This time, the North Korean since July. questions about whether the Pyongyang had shown no escalation feels different, The cost of protection North Korean risk could affect interest in dialogue, and because we have two mad men against a South Korean default the country’s ratings, which are President Donald Trump wrote firing away,” said a person at has risen to its highest since currently Aa2/AA+/AA–. on Twitter that Rex Tillerson, one of the abovementioned February 2016, with five- A finance ministry official his own Secretary of State, was issuers. “What worries me the year sovereign CDS trading told IFR he did not expect “wasting his time” talking to most is that the situation could at around 74bp, while CDS geopolitical tensions to affect Pyongyang. get worse, and countries like spreads for the country’s main the country’s rating. Earlier in In the meantime, South Japan and China might not state-owned banks such as September, Fitch wrote that Korean officials have also extend foreign currency swaps Export-Import Bank of Korea Korea’s positive economic warned that the North could with our country.” and Korea Development Bank momentum could be hurt by conduct more provocative acts Foreign investors have pulled have also jumped to similar disruptions to global trade and near the anniversary of the funds out of Korean domestic highs. international financial flows founding of its Communist debt in response to the political At the peak of the 2008 crisis, if a confrontation between party on October 10, or tensions, leaving government Korea’s CDS hit a record 709bp. the US and North Korea was possibly when China holds its officials on high alert and “We’re watching the triggered. Communist Party Congress on reviving painful memories of situation very closely,” said Moody’s wrote last Tuesday October 18. the foreign currency crisis the a Korean finance ministry that a military conflict on the South Korean media country faced at the height of official, who recalled working peninsula would have “a high reported on September 30 the Lehman fallout. on a Korean sovereign bond credit impact” on Korea, but did that several North Korean Foreigners were net sellers of deal that was postponed in not specify the potential impact missiles were recently spotted Korean government bonds in September 2008. on its rating. It also noted that being transported away August for the first time since “That was a very difficult the economies of Japan and from a missile research and January. Nomura estimates that time for our country.” Vietnam were vulnerable in the development facility. foreigners may have sold a net event of a Korean conflict. Even South Korean citizens, W3trn–4trn (US$2.6bn–$3.5bn) MOVING MISSILES However, signs of a solution who have appeared undisturbed in September, an increase from Amid heightened tensions, an to deal with North Korea’s about previous North Korean outflows of W2.1trn in August. annual meeting between Fitch nuclear weapons programme threats, now express more The South Korean Won also and South Korean finance and have yet to emerge. The US said concern, local media surveys weakened to 1,150 per dollar unification ministry officials it was directly communicating have shown. „

and the current political market because of a 2016 rule Tanaka. comparatively cheaper. differences, Samurai investors requiring Japanese investors to When asked what is needed Another banker pointed to haven’t been interested in file for US tax exemption when to revive Samurai issuance, a low yen rates as another reason buying Korea,” said a quasi- they buy Samurai bonds from banker at a European house for the shrinking market. sovereign issuer in Korea. American issuers. said euro yields would be a For high-rated issuers such “As for US issuers, they deciding factor. as Rabobank to match their SUPPLY SURGE cannot issue in the Samurai “If a change in the ECB’s euro funding costs in yen, they However, the yen market has market at present as a new law monetary policy prompts would need to sell bonds at a received a boost from a surge requires them to issue with European yields to rise, the coupon close to, or even below, in opportunistic deals in the US governing law, as opposed yen market landscape would zero, making the securities global and Eurobond markets, to Japanese governing law on improve,” he said, suggesting unattractive to Japanese especially from US corporates. all Samurais,” said Rabobank’s yen issuance would be investors. Public offerings in the global Indeed, Japanese investors and euroyen format so far this SHRINKING SAMURAIS bought Samurai bonds even year have reached more than GLOBAL YEN ISSUANCE OFFSETS DECLINE IN VOLUMES (¥BN) at single-digit spreads this ¥460bn. year. Credit Agricole’s senior Walmart brought a massive 600 preferred five-year was priced ¥170bn three-part Global in 400 at only 6bp over Libor, as was July, its first yen bond in seven BPCE’s five-year at 7bp over. years, followed by a ¥78bn 200 The coupons were 0.202% and three-part issue by Corning in 0.214%, respectively. 0 August, while Starbucks raised 123456789101112 The banker at a European ¥85bn in March – both debut house pointed out that Japanese –200 issues in yen. investors were comfortable All three, however, were –400 with 0.20% for the five-year seen as one-off issuers rather maturity and 0.15% for the than the regular visitors that –600 three-year. Japanese investors tend to Redemptions New issues “Good names may be able favour. Net cumulative Plus global/euroyen to issue at a 0.15% coupon, JP Morgan and BAML have but this would be the lowest been absent from the Samurai Source: DealWatch, IFR Asia possible,” he said. „

International Financing Review Asia October 7 2017 7 News NTPC breaks new yen ground „ Loans Indian power producer targets Japanese investors for longest Samurai facilty at 10 years

BY PRAKASH CHAKRAVARTI a request for proposals in loan in September 2014 – a borrowing. early August for a smaller US$250m seven-year facility The 10-year yen loan is the NTPC is breaking new ground for US$150m-equivalent loan with with a 6.25-year average life – minimum tenor at which Indian borrowers with the first a greenshoe option of up to paid an all-in of around 171bp, NTPC can raise funds through 10-year unsecured yen loan, US$150m. based on a margin of 125bp offshore debt, according to the which gives the state-owned Appetite for the long-term over dollar Libor. Reserve Bank of India’s external power producer access to a loan will be tested when it is Offshore loan pricing for commercial borrowing rules, new investor base and offers a launched to general syndication Indian companies has fallen which were revised in a major cheaper alternative to offshore in November and a strong since then. Earlier this month, overhaul in January last year. bonds. response would pave the way state-owned INDIAN OIL CORP (IOC) “Under Track II of the ECB NTPC has mandated Sumitomo for other Indian borrowers. It is launched a US$300m five-year rules, NTPC can raise funds Mitsui Banking Corp, Mitsubishi designed to appeal to Japanese bullet loan with the lowest from international debt UFJ Financial Group and Mizuho institutional investors, such as pricing for that tenor since the markets with average maturity Bank to arrange the US$350m- insurers and pension funds, 2008 global financial crisis. of 10 years or longer and for no equivalent Samurai loan, which which have recently started to IOC’s loan pays top-level all-in more than US$750m-equivalent will reduce its borrowing cost. target overseas assets in search pricing of 91bp, based on a under the automatic route in “Our average cost on overall of greater yields. margin of 70bp over Libor and a any financial year,” Biswal said. debt is 7.05%, while that on “We expect insurance remaining life of 4.75 years. In addition to the current international debt is around companies, fund managers NTPC’s Samurai loan US$350m-equivalent yen 4%. With the 10-year yen loan, and other commercial banks follows state-owned Power loan, NTPC could look to raise our average cost of borrowing to participate in the 10-year Finance Corp’s earlier attempt another US$400m from the is expected to come down,” average maturity yen loan as to raise a 10-year financing international debt markets in Kulamani Biswal, director of it offers better returns to the in euros. The company sent the first quarter of calendar finance at NTPC said in an investors and the opportunity out a RFP in March for a year 2018, he pointed out. interview. to lend to a top-rated credit US$100m-equivalent 10-year The company will explore The idea for the long-dated from India with a long track euro-denominated loan, but its options at that time, after yen loan came from SMBC, record in international debt failed to gain traction due to its breaking new ground with its which is taking US$150m- markets,” Biswal said. long tenor. recent fundraisings. equivalent, and the other The yen loan is mandated In January 2016, NTPC “We will continue to evaluate two Japanese mega banks, with a total all-in cost of 122bp cancelled plans to raise a seven- the options available for which are holding US$100m- and an interest margin of year loan of up to US$500m fundraising in the international equivalent each. 95bp over six-month yen Libor. after failing to get regulatory debt markets and tap the The company sent out NTPC’s last syndicated offshore approval for the offshore instrument that we feel is

ARM Holdings. SoftBank aims for loan record Mizuho had underwritten the ¥1trn acquisition loan on a sole „ Loans US$23bn financing would be Asia’s largest syndicated loan basis before syndicating it to 18 other lenders. That loan pays BY WAKAKO SATO Credit Agricole CIB, Mitsubishi over Tibor, respectively, based an interest margin of 125bp UFJ Financial Group and Sumitomo on SoftBank’s Ba1/BB (Moody’s/ over Tibor based on its Ba1/BB SOFTBANK GROUP has launched a Mitsui Banking Corp have S&P) ratings. (Moody’s/S&P) ratings then. The ¥2.6trn (US$23bn) mammoth joined original mandated lead More than 20 domestic and margin steps down to 100bp financing, Asia’s largest arranger and bookrunner international lenders have for ratings of Baa3/BBB- to Baa1/ syndicated loan, to refinance Mizuho Bank on a take-and-hold been invited to join at ticket BBB and to 80bp for A1/A or part of its existing debt, basis. levels ranging from ¥50bn to above. If the ratings fall to B1/B including a couple of large The deal is not fully ¥200bn in senior syndication. or below, the interest margin acquisition financings, sources underwritten, but the four Responses are due on October steps up to 150bp. said. banks are expected to hold over 25. Funds from the new loan The deal is larger than 50% of the financing. General syndication is will also refinance part of a the anticipated ¥2trn as The loan is split into four expected to be launched after ¥1.98trn financing completed it also includes a ¥250bn tranches: a ¥650bn three-year the close of senior syndication. in September 2013. That deal working capital facility and a term loan, a ¥600bn five-year Proceeds also refinance a was split into a ¥1.1trn five- refinancing of an acquisition term loan, a ¥1.1trn seven- ¥1trn two-year bridge loan year tranche and an ¥880bn financing that backed year term loan and a ¥250bn signed in September last seven-year portion and paid SoftBank’s US$1.26bn purchase seven-year working capital year that financed SoftBank’s interest margins below 130bp of a 57% stake in US cellphone facility, paying margins of £24.3bn (US$32bn then) and 150bp, respectively, on a distributor Brightstar in 2013. 80bp, 125bp, 160bp and 175bp purchase of UK chip designer ratings-based grid.

8 International Financing Review Asia October 7 2017 For daily news stories visit www.ifrasia.com

relevant, whether it is a loan or a bond. We will take into Taiwan lenders flock to capex loans account aspects such as pricing and investor diversification „ Loans Banks willing to bet on corporate expansion in search of higher returns when making such decisions,” said Biswal. BY EVELYNN LIN Capex loans are usually more have raised US$24.20bn of In January, NTPC sold €500m heavily drawn than revolving capex loans since early 2012 (US$538m) of 10-year bonds Taiwanese companies with credit facilities and, as such, are and lending peaked in 2013 in its maiden euro issue, strong credit profiles are usually reserved for companies at US$6.7bn, according to which was followed by Rs20bn turning to syndicated loans to viewed as low risk. Thomson Reuters LPC data. (US$311m) of five-year offshore finance capital expenditure In July, Taiwanese LCD maker Capex lending for the year rupee-denominated, or Masala, in an investment drive that and frequent loan borrower to date totals only US$1.4bn bonds in April after its Masala could help to boost the island’s AU OPTRONICS CORP increased a including AUO’s deal, which debut in August of last year. economy. five-year term loan to NT$23bn is the biggest capex loan this The 10-year 2.75% euro bonds Capex loans, typically from a NT$20bn target. The year. priced at mid-swaps plus 200bp, reserved for top companies, loan was heavily oversubscribed The biggest Taiwanese capex while the five-year Masala such as TAIWAN-JAPAN OXO CHEMICAL and attracted commitments of loan of the last five years was a bonds priced at 7.28%. INDUSTRIES, are proving popular up to NT$50bn. NT$83bn seven-year facility for NTPC saved Rs660m in with domestic lenders as a AUO is a flagbearer for Formosa Plastics Group, which interest costs for the financial chance to boost returns. Taiwan’s technology sector, was signed in August 2013 and year ending March 31 2017 and Taiwan-Japan Oxo Chemical’s and its oversubscription financed the expansion of the aims to save Rs2.60bn in the NT$10.3bn (US$340m) seven- reflects the strength of the group’s petrochemical complex current financial year. year capex facility in September company’s relationships with in Yunlin county in west For the current financial was its loan market debut and domestic and foreign banks, Taiwan. year to March 31 2018, NTPC raised commitments of about coming after it already raised Bankers expect capex lending has a funding requirement of NT$20bn from 10 banks. a NT10bn five-year loan last to pick up in the next few Rs280bn, of which Rs174bn “We have strong appetite for November. quarters as a more positive will be from domestic and Oxo Chemical’s loan as it is a Oxo Chemical’s strong outlook emerges on Taiwan’s international debt markets. rare capex borrowing in Taiwan shareholders are equally economy. Taiwan’s exports It has Rs1.05trn of debt this year amid a contraction in appealing. The petrochemical recorded 11 consecutive outstanding, of which Rs300bn the economy,” the loan banker product maker is a joint months of growth through is in foreign currency. The said. venture of Japan’s KH Neochem August on strong global remaining domestic currency Taiwan’s economy grew at (47%), state-owned petroleum demand for technology, debt comprises Rs320bn in 2.13% in the second quarter, company CPC Corp Taiwan according to data from the rupee bonds and Rs430bn in down from 2.66% in the (47%) and Mega International Ministry of Economic Affairs. rupee loans. „ preceding three months. Last Commercial Bank (6%). Semiconductor manufacturer (Additional reporting by Chien Mi month, the central bank left “Only those top-tier WINBOND ELECTRONICS, a frequent Wong and Wakako Sato) the interest rate steady at borrowers with bellwether loan market borrower, plans 1.375% for the fifth consecutive status have the potential to invest NT$335bn in a new quarterly meeting, with the for capex borrowings in a factory this year in southern The loan had refinanced a economy slightly bolstered lacklustre economy. Deals for Taiwan amid a surge in global ¥1.65trn one-year bridge loan on exports, while inflationary these borrowers have always demand for memory chips. from December 2012 that pressures remained subdued had a very good following,” said Taiwan’s wind-energy drive is backed SoftBank’s US$20.1bn amid sluggish consumer another Taipei-based senior also expected to provide more acquisition of US carrier Sprint spending and tensions with loan banker. capex via project financings, Nextel. key trading partner mainland Capex loans can take longer rather than corporate loans, as The new loan follows close China. to syndicate, however. Oxo offshore developers and lenders on the heels of the US$6.05bn- Capex loans offer higher Chemical’s loan was mandated join local companies and equivalent four-part bond interest margins and pay a in mid-April, launched in banks in the build-out phase of offering SoftBank completed premium of 40bp-50bp over late July and closed in late Taiwan’s offshore wind sector. last month to repay loans. similar plain vanilla loans, September after lenders sought Denmark’s DONG ENERGY A/S, The senior bond comprised a making the format attractive to assurances on the company’s the world’s biggest developer of US$2bn 10-year note priced Taiwanese banks. factory construction plan, offshore wind farms, is seeking at 5.125%, a US$1.35bn seven- “We see capex financings as which is under regulatory a loan of up to NT$60bn to year piece at 4.75%, a €1.5bn an opportunity to earn better review. invest in Taiwan, according to (US$1.8bn) eight-year tranche returns,” said a loan banker at a “Capex loans take more local media. at 3.125% and a €750m 12-year Taipei-based Tawanese bank. patience. The timetable for the The Taiwanese government portion at 4.00%. The loans stand out amid construction at Oxo Chemical has initiated an ambitious SoftBank’s most recent a slowdown in Taiwanese has not been finalised, Thousand Wind Turbines foray in the loan markets borrowing this year. At as the project is pending project, a block of 36 sites that was in early August when it US$16.6bn for the year to date, approval from the Kaohsiung have been identified as having rolled over a ¥178.5bn 364-day Taiwanese loan volume is 34% government,” said the second large offshore wind-power revolving credit, according to lower than US$25bn in the Taipei-based loan banker. potential suitable for private- Thomson Reuters LPC data. „ same period last year. Taiwanese companies sector development. „

International Financing Review Asia October 7 2017 9 News Australia readies record tender „„Bonds New five-year ACGB benchmark to open with a A$3.5bn tender offer

By JOHN WEAVERS which tend to appeal to a 20bp to pay, while the system price. broader investor base. often provides keener pricing In addition to jumbo-sized The AUSTRALIAN OFFICE OF FINANCIAL “Many foreign investors in as lower bids are rejected. five-year deals the tender MANAGEMENT is set for its largest particular are not fans of the This was highlighted on July system is also too shallow for Treasury bond tender with a tender system, which lacks 5 when the AOFM sold the new longer-term Treasury bond A$3.5bn (US$2.75bn) offer that transparency and certainty, entire A$800m tender of 3.25% sales. Tender-reluctant offshore will establish a new five-year regarding pricing, hedging and April 21 2029 ACGBs to a single investors often dominate these sovereign benchmark. allocations,” said a Sydney- investor, disappointing all the issues as they did with a 65.2% The auction of 2.25% based syndication manager. other 41 who had placed bids allocation for the A$7.6bn November 21 2022s will take “The timings of the market for a tap that was 4.47 times syndicated sale of March 2047s place on October 11 and is set are also awkward for overseas covered. in October 2016 - Australia’s to smash the A$2bn record as accounts given that tender Five-year tenders benefit first 30-year sovereign issue. the government’s largest debt results are published before from elevated domestic demand The AOFM began syndicated tender. midday Sydney time, before around the local sweet spot, but nominal bond sales in October The size and frequency of many Asian markets have even at this compelling tenor 2011 with a A$3.25bn 15- Treasury bond tenders has opened.” the AOFM took the syndicated year issue. It has now raised grown over the last 10 years The AOFM has usually market route when it launched A$80.45bn from 14 such trades. in line with the increase in employed the tender system to a jumbo five-year Treasury Gross Australian Treasury government borrowing since open five-year lines, including bond in January 2017. bond issuance in 2017-18 is the global financial crisis, the previous A$2bn size record The AOFM secured, under expected to be around A$80bn. before which Australia ran a for the issue of 1.75% November the syndicated system, a then With A$31bn maturing and fiscal surplus. 21 2020s in April 2015 that record A$9.3bn sale of 2.00% buybacks of around $15bn, But the AOFM has typically attracted A$6.3bn of demand. December 21 2021s, 70.6% net issuance is estimated to be preferred the deeper syndicated Tenders are cheaper for the of which was bought locally, around A$34bn. Issuance to market for jumbo-sized prints AOFM because there are no lead having attracted a A$15.3bn date this financial year totals and longer-dated offerings, manager fees of around 15bp- order book at the clearing A$20.1bn. 

negative, the development is RCom plan thrown into doubt actually positive to RCOMIN Notesholders, because the „„Restructuring Indian telco shelves wireless merger, delays tower spin-off merger, if successful, would have put their claims in a By DANIEL STANTON, Group. joint lenders’ forum for a debt- subordinated position,” wrote KRISHNA MERCHANT “This [Aircel] transaction was resolution plan. The standstill, Lucror Analytics in a research crucial to RCom’s delevering until the end of this year, was note. RELIANCE COMMUNICATIONS’ move plans. Absent this transaction, meant to give the company Moody’s kept its Ca rating, to cut US$3.8bn from its the company’s debt levels time to complete the Aircel and with a negative outlook, on US$7bn debt burden has been will remain high and its towers transactions. However, RCom unchanged after the thrown off course due to expected debt restructuring it has since been extended to cancellation of the Aircel the cancellation of two deals and corporate reorganisation December 31 2018, relieving merger. central to the plan, causing will be further delayed,” said the immediate pressure on the Nevertheless, Indian DCM a further sharp slide in its Annalisa DiChiara, a Moody’s group. bankers believe RCom will offshore bonds. vice president. Should the debt-reduction manage to avoid a forced debt- RCom’s US$300m 2020 efforts eventually fail, RCom’s to-equity conversion. notes sank seven points last ACTUALLY POSITIVE lenders could demand to “Even though the deal week to a cash price of 48.5 on However, RCom said it convert their debt into equity with Aircel did not go Friday, equivalent to a 35.2% would consider monetising under India’s strategic debt- through, RCom has promoter yield, after the Indian mobile its spectrum portfolio restructuring guidelines. The wealth, real-estate assets and telecommunications company through trading and sharing offshore dollar bonds, on transmission assets that have cancelled the planned merger arrangements and that it the other hand, are excluded intrinsic value, and they are of its wireless business with would refile its towers spin- from the standstill agreement, planning to list their general rival Aircel. On Wednesday, it off application later. It also leaving investors more exposed. insurance business,” said one. also withdrew an application reported progress in plans to With that in mind, some “It has enough assets to sail to spin off its telecom towers monetise prime real-estate analysts welcomed the collapse through to avert a default.” in an exercise that would have assets. of the merger as a positive, “RCom is just kicking the raised Rs110bn (US$1.7bn) On June 2, RCom agreed a since it will keep RCom’s assets debt can down the road. It is through the sale of a 51% stake standstill on its debt-servicing in place. just buying time,” said another to Brookfield Infrastructure obligations after forming a “In our view, while sounding banker. 

10 International Financing Review Asia October 7 2017

1012_04 News.indd 10 06/10/2017 21:44:46 For daily news stories League tables visit www.ifrasia.com Asian bonds smash annual record „„Bonds league tables G3 issuance already ahead of 2016 total

By DANIEL STANTON exchange trades, were first and was still at a 7% or 8% handle. higher. However, he said second in the high-yield league Issuers could be paying a issuance could tail off towards Asia has already beaten last table, with US$3.6bn and similar rate in the loan market the end of the year. year’s record for G3 bond US$3.2bn of credit, respectively. on a secured basis.” “Issuers who need financing issuance, with many banks “Asian Double B issuers can Chia noted that covenant have already done so in the first printing more deals in nine get away with a 4% handle and packages have also become half of this year so we expect months than they did in the Single Bs at 5% handle,” said lighter and more issuer- a slowdown in the second whole of 2016. half,” said Chia. “I suspect if In the first three quarters conditions remain as conducive of this year, issuers from Asia, HIGHER AND HIGHER as this year, you’ll see similar if excluding Australia and Japan, HIGH-YIELD ISSUANCE ALREADY AT AN ANNUAL RECORD not higher volumes next year.” sold US$245.3bn of G3 bonds, The burst in offshore high- 40,000 100 eclipsing the US$216.7bn sold yield issuance has been driven

in the whole of 2016. 80 mainly by Chinese issuers, and HSBC took the top arranger 30,000 might be related to a steep drop spot with US$21.3bn of deal in renminbi bond volumes after 60 volume, just shy of its 2016 regulators in late 2016 placed 20,000 total, while Citigroup was stricter controls on property 40 second with US$16.3bn and developers funding in the Standard Chartered gained two 10,000 domestic market. Renminbi 20 places to third, with US$13.3bn volumes dropped to Rmb6.2trn of volume, an increase of 60% (US$932bn) for the first three 0 0 from the same period a year quarters of the year, down 31% 2011 1997 2017 2013 2012 1999 1998 2015 2014 2016 2010 2001 2007 2003 2002 2005 2004 2006 2009 2008 earlier. 2000 from the same period a year Bank of China ended last year Proceeds (US$m) Number of Issues (right axis) ago. in sixth position with US$10.2bn Australian G3 issuance stood of league table credit, but has Source: Thomson Reuters SDC at US$54.7bn at the end of risen to fourth as things stand Q3, slightly behind the rate so far this year, comfortably needed to match last year’s beating last year’s total with Terence Chia, head of Asia friendly as investors chase risk total of US$76.4bn. In addition, US$12.4bn of deal volume. Pacific debt syndicate at Credit assets, adding that investors Australian bonds made up a Eight of the top 10 banks Suisse. “These are the sort of were deploying their funds in smaller part of the market this have already exceeded their yields you would see in the US primary offerings since it was year, accounting for 19% of the full-year 2016 totals. domestic high-yield market two hard to buy in the secondary year-to-date issuance in Asian “We hit our annual target or three years ago when Asia market without moving prices G3, down from 26% last year.  before summer,” said the Asia debt head at one bank. Top bookrunners of Asia Pacific Top bookrunners of Top bookrunners of Asian fixed- and HIGH-YIELD BURST Securitisations all Asian currencies floating-rate bonds for G3 currencies High-yield volumes have (ex-Japan and Australia) (excluding Japan and Australia) ex-Japan, inc-Australia jumped dramatically, helped (ex-A$ and CDOs) (inc-certificates of deposit) (inc-Samurais and Yankees) by jumbo exchange offerings 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 combined with new issues from Amount Amount Amount Chinese property developers Name Issues US$(m) % Name Issues US$(m) % Name Issues US$(m) % Kaisa Group Holdings and 1 Citic 9 1,612.1 20.6 1 CCB 728 76,257.0 6.6 1 HSBC 173 26,638.1 8.8 China Evergrande Group. At the 2 Standard Chartered 9 1,506.4 19.2 2 Bank of China 673 75,087.1 6.5 2 Citigroup 125 21,832.9 7.2 end of Q3, the total for Asia ex- 3 Bank of China 7 1,258.4 16.1 3 ICBC 638 70,556.2 6.1 3 JP Morgan 91 18,723.5 6.2 Japan and ex-Australia stood at 4 ICBC 3 765.6 9.8 4 BoCom 617 63,425.8 5.5 4 BAML 66 13,346.5 4.4 US$33.8bn, up around 53% from 5 MUFG 4 725.7 9.3 5 ABC 570 60,946.0 5.3 5 Standard Chartered 101 13,325.0 4.4 the same period a year earlier, 6 China Merchants Sec 3 521.8 6.7 6 Citic 376 48,306.8 4.2 6 Deutsche 72 12,807.0 4.2 and beating the record annual 7 Bank of Nanjing 2 282.9 3.6 7 Industrial Bank 417 36,664.6 3.2 7 Bank of China 105 12,360.0 4.1 issuance of US$28.8bn seen in 8 HSBC 2 280.1 3.6 8 CMB 321 27,426.6 2.4 8 Goldman Sachs 55 12,245.8 4.1 2014, according to Thomson 9 CIMB Group 2 222.0 2.8 9 CMBC 319 24,903.7 2.2 9 Morgan Stanley 63 11,602.9 3.8 Reuters data. Evergrande alone 10 CMB 1 145.7 1.9 10 CSC Financial 218 24,637.9 2.1 10 BNP Paribas 70 11,092.2 3.7 has sold US$6.3bn of new paper Total 21 7,829.9 Total 8,079 1,158,810.9 Total 458 302,666.2 this year. *Market volume Haitong Securities and Credit *Market volume *Market volume *Includes Asian Development Bank issuance. Suisse, which worked on both Proportional credit Proportional credit Proportional credit the Kaisa and Evergrande Source: Thomson Reuters SDC Code: AZ2 Source: Thomson Reuters SDC Code: AS1 Source: Thomson Reuters SDC Code: AR1

International Financing Review Asia October 7 2017 11

1012_04 News.indd 11 06/10/2017 21:44:46 League tables Asian lending hits five-year low „ Loans league tables Bond boom, China curbs hurt syndicated lending

BY PRAKASH CHAKRAVARTI, anticipation of a rise in interest PRICING PRESSURES a jumbo HK$28bn (US$3.6bn) CHIEN MI WONG rates following the US Federal Low dealflow and abundant leveraged buyout loan backing Reserve’s decision to start liquidity continued to put the privatisation of shoe Syndicated lending in Asia unwinding its quantitative pressure on Asian corporate retailer Belle International Pacific, excluding Japan, hit a easing programme. loan pricing, as highlighted Holdings that was the five-year low of US$292.47bn In contrast, China’s by Indian companies that territory’s largest buyout. for the first nine months of clampdown on outbound frequently tap the market. Another US$900m-equivalent 2017, 19.55% down on the mergers and acquisitions Indian Oil Corp mandated LBO backing the acquisition same period last year as more (M&A) and a weaker domestic Scotiabank to lead a US$300m of tycoon Li Ka-shing’s fixed- borrowers turned to the bond economy is starting to hit loan five-year loan in late August line phone unit, Hutchison market and China’s curbs on volume. Lending to China in with all-in pricing of 93bp, Global Communications, had a overseas acquisitions dented the first nine months is 36% undercutting the company’s positive reception from lenders. volume. lower at US$76.62bn compared last similar loan in June that Australia’s active buyout A third-quarter total of to a year earlier as the was priced at 95bp and closed financing market continues to US$72.49bn from 210 deals mainland suffered the sharpest after a poor response. drive developments with the is the lowest quarterly slowdown of any major country “The challenge with India arrival of unitranche structures. tally in Asia for seven years in the region. is that we have seen a lot of US alternative investment firm and is 37.31% lower than “M&A volume seems spread compression and that’s Highbridge Capital underwrote US$115.64bn at the same time to have dropped mainly because there are not enough a A$650m (US$516m) six-year last year. because of the impact of the new deals,” said Siong Ooi, co- unitranche financing backing “G3 bond market issuance regulatory restrictions on head of debt capital markets for the US$930m-equivalent buyout has increased this year from Chinese acquirers eyeing assets loans and bonds at Mitsubishi of iNova Pharmaceuticals Asia, due to low benchmark overseas,” said Benjamin Ng, UFJ Financial Group. (Australia). rates and search for yield by head of debt syndicate and Chinese companies are also “Institutional non-bank investors. On the other hand, acquisition financing, Asia able to access lower pricing. investors have started loan activity has seen a decline, Pacific, at Citigroup. State-owned Zhejiang Energy becoming more active in senior leading to a volume shift from Excluding Japan, China is International Ltd launched a LBO loans,” Sharma said. loans to bonds,” said Ashish Asia’s biggest market and still US$300m three-year debut loan Despite a steady flow of Sharma, head of Asia Pacific accounted for 26% of regional in July, which pays a top-level LBO loans, only US$27.68bn loan syndication for Credit loan volume in the first three all-in pricing of 100bp – a level of volume from 51 deals Suisse. quarters of 2017 despite the that is expected to find few backing Asian M&A activity Asian companies locked in drop. In the same period last takers, according to bankers. were completed in the first low borrowing costs in Asia’s year, China’s share of the Event-driven financing nine months, compared with bond markets, driving record regional lending activity was boosted Hong Kong’s volume US$55bn from 57 financings in issuance in G3 currencies, in 32%. in the third quarter, including the same period in 2016. „

SLOWER LOANS Top bookrunners of Asia Pacific Top bookrunners of Asia Pacific QUARTERLY VOLUME DIPS TO FIVE-YEAR LOW syndicated loans Int’l currencies, Rmb syndicated loans G3 currencies and NT$ (ex-Japan, inc-Australia) (ex-Japan, inc-Australia) 1/1/17 – 30/9/17 1/1/17 – 30/9/17 200 500 Amount Amount Name Deals US$(m) % Name Deals US$(m) % 400 150 1 Bank of China 189 42,209.6 21.2 1 Bank of China 19 9,234.5 11.3 2 ICBC 55 15,356.4 7.7 2 Standard Chartered 36 5,102.3 6.3 300 3 ANZ 54 10,082.6 5.1 3 HSBC 29 4,934.8 6.1 100 4 CDB 8 7,594.9 3.8 4 ANZ 26 3,857.9 4.7 200 5 HSBC 37 6,365.7 3.2 5 State Bank of India 11 3,418.6 4.2 50 6 Standard Chartered 45 6,286.2 3.2 6 CCB 9 3,367.8 4.1 100 7 CBA 31 5,638.4 2.8 7 DBS 24 3,208.8 3.9

0 0 8 NAB 24 4,906.9 2.5 8 MUFG 20 2,941.5 3.6 9 Westpac 31 4,821.6 2.4 9 Credit Suisse 15 2,762.4 3.4 1Q17 1Q13 1Q12 1Q15 1Q14 1Q16 3Q17 2Q17 3Q13 2Q13 3Q12 3Q15 4Q13 3Q14 3Q16 2Q12 2Q15 2Q14 4Q12 2Q16 4Q15 4Q14 4Q16 10 MUFG 32 4,638.0 2.3 10 Citigroup 11 2,140.2 2.6 Volume (US$bn) Deals (right axis) Total 636 141,663.7 Total 200 81,600.3 *Market volume *Market volume

Proportional credit Proportional credit Source: Thomson Reuters LPC Source: Thomson Reuters LPC Source: Thomson Reuters SDC Code: S3k

12 International Financing Review Asia October 7 2017 For daily news stories visit www.ifrasia.com ECM rebounds, despite China curbs „„Equities league tables Goldman Sachs leads Citic in Asian equity underwriting

By FIONA LAU, S ANURADHA 40 deals for US$8.9bn ahead equity league table with 10 online bookseller and publisher of Citic Securities with 52 deals deals for US$2.3bn, followed by of internet giant Tencent Equity and equity-linked for US$7.6bn. Morgan Stanley Citigroup and JM Financial. Holdings, also plans to launch offerings in Asia Pacific ex- ranked third with 36 deals for Two sizable IPOs were a US$600m–$800m IPO in the Japan rebounded in the third US$6.7bn. completed in the third quarter. fourth quarter. quarter, but still fell 13% short Apart from the SBI Life float, “Receptivity to the capital of last year in the first nine LESS CHINESE DOMINANCE general insurer ICICI Lombard markets has continued to months of 2017, at US$154bn, As usual, Chinese issuers also raised Rs57bn. General strengthen throughout the after China put the brakes on produced the largest number Insurance Corporation of India, region. Global investors have follow-on offerings. of deals, raising US$86bn in New India Assurance and HDFC once again been attracted to ECM volume in the third the first three quarters, or Standard Life are also expected the region and are allocating quarter rose 19% from the about 56% of the total raised in to complete IPOs totaling capital within the capital second quarter to US$57.5bn APAC ex-Japan. Citic topped the US$4.7bn before the end of the markets. Block activity with the completion of a China equity and equity-linked year. (excluding A-shares) in Asia number of jumbo deals such league table with 44 completed ex-Japan is up over 50% versus as the US$2.7bn placement deals to raise a combined ACTIVE Q4 the same period last year – of China Molybdenum, the US$7.1bn. ECM bankers reckon activity symbolic of the health of the US$2.5bn follow-on of Yancoal China was less dominant will rise further in the fourth markets and desire for liquidity, Australia, the US$1.7bn than last year, however, when quarter, with a long pipeline “said Arth. Singapore IPO of NetLink NBN it had accounted for 72% of the of Indian insurance IPOs and “Investors continue to want Trust, the US$1.5bn Hong Kong total deal volume over the same Chinese technology IPOs in growth with fintech and tech- IPO of Zhong An Online P&C period. Hong Kong and the US. related offerings remain in Insurance and the US$1.3bn “Geographic diversity of Chinese online microlender favour,” he said. Indian IPO of SBI Life Insurance. issuance has been a theme Qudian last week launched a For the first nine months, Follow-on offerings in the of 2017 with onshore China NYSE IPO of up to US$825m, South Korea was the third region fell 24.5% year on issuance comprising much while Singapore-based gaming busiest market after China and year in the first nine months less of the region’s volume,” and e-commerce group Sea India with 120 deals raising because of the tighter Chinese said Aaron Arth, head of the is premarketing a US$1bn US$13bn. Australia came fourth regulations, according to financing group for Asia ex- US IPO. China Literature, the with 444 deals for US$12bn.  Thomson Reuters data. Japan at Goldman Sachs. “India In February, China barred has seen a surge in activity. Top bookrunners of global common Top bookrunners of global convertible companies from launching Liquidity has also become stock Asia Pacific (ex-Japan) offering Asia Pacific (ex-Japan) follow-on stock offerings a theme in India with eight 1/1/17 – 30/9/17 1/1/17 – 30/9/17 within 18 months of their transactions year to date Amount Amount previous capital raising. In June, greater than US$700m in size.” Name Issues US$(m) % Name Issues US$(m) % regulators further restricted Total ECM volume in India 1 Goldman Sachs 37 7,795.2 5.6 1 Citic 3 2,001.4 14.8 sales of shares acquired in the first nine months was 2 Citigroup 44 6,286.6 4.5 2 Deutsche 4 1,243.0 9.2 through placements. US$17.2bn, up 139% from 3 Morgan Stanley 35 5,980.5 4.3 3 Goldman Sachs 3 1,139.4 8.4 Goldman Sachs led the Asia US$7.2bn a year earlier. Kotak 4 Citic 49 5,598.3 4.0 4 CICC 3 1,098.2 8.1 Pacific ECM league table with Mahindra Bank led the India 5 UBS 45 5,452.1 3.9 5 UBS 2 889.9 6.6 6 Guotai Junan Sec 41 4,882.7 3.5 6* Everbright Sec 1 723.3 5.3 FEWER FOLLOW-ONS 7 China Sec 27 4,153.9 3.0 6* Morgan Stanley 1 723.3 5.3 CURBS ON A-SHARE OFFERINGS WEIGH ON VOLUMES (US$M) 8 CICC 27 3,887.5 2.8 8* Essence Sec 1 514.8 3.8 9 Haitong Sec 48 3,385.6 2.4 8* Dongxing Sec 1 514.8 3.8 250,000 10 GF Sec 43 3,259.5 2.3 10 Bank of China 3 472.3 3.5 11 JP Morgan 21 3,037.3 2.2 11 Fubon Financial 3 360.1 2.7 200,000 12 BAML 20 3,018.5 2.2 12 KGI Financial 5 308.1 2.3 13 Essence Sec 22 2,838.5 2.0 13 Guotai Junan Sec 1 279.4 2.1 150,000 14 Guosen Sec 28 2,825.1 2.0 14 DBS 2 264.1 2.0 15 Credit Suisse 27 2,809.7 2.0 15 Yuanta Financial 5 258.1 1.9 100,000 16 Macquarie 19 2,765.5 2.0 16* China Merchants Sec 1 245.1 1.8 17 NH Inv & Sec 15 2,729.2 1.9 16* China Sec 1 245.1 1.8 50,000 18 Deutsche 27 2,726.8 1.9 18 Tianfeng Sec 1 225.1 1.7 19 Huatai Sec 23 2,477.2 1.8 19 Zheshang Sec 1 179.5 1.3 0 20 China Merchants Sec 28 2,431.9 1.7 20 Citigroup 2 167.3 1.2 2011 2017 2013

2012 Total 1,836 140,517.0 Total 73 13,551.9 2015 2014 2016 2010 2007 2005 2009 2006 2008 Market volume *Market volume Convertible Follow-on IPO Proportional credit Proportional credit Source: Thomson Reuters SDC Source: Thomson Reuters SDC Code: C4a2 Source: Thomson Reuters SDC Code: C9b1

International Financing Review Asia October 7 2017 13

1012_04 News.indd 13 06/10/2017 21:44:47 People &Markets

TOP STORY LEAGUE TABLES Chinese banks add to lead in IB fees Citigroup climbs to fourth as highest-ranked international bank

Chinese banks consolidated their positions FEES UP OVERALL #HINûATû5"3ûEXPECTSûMOREûTECHNOLOGYû as the top earners in Asian investment /VERALLû)"ûFEESûACROSSû!0!# ûEX *APAN û )0/SûINû(ONGû+ONGûAFTERûTHEûRECENTûLISTINGû BANKINGûFORûTHEûlRSTûTHREEûQUARTERSûOFû û ROSEûûTOû53BNûFORûTHEûlRSTûNINEû OFû:HONG!N ûWHICHûISûUPûMOREûTHANûû taking the top three slots in terms of fees MONTHSûTOû3EPTEMBERû ûWITHûGAINSûACROSSû FROMûITSû)0/ûPRICE EARNEDûINû!SIA ûEXCLUDINGû*APAN CAPITALûMARKETSûANDûLOANS “ZhongAn shows the market how a There were some positive signs for %#-ûFEESûWEREûUPûûYEARûONûYEARûTOû lNTECHûCOMPANYûCANûDOûWELLûINû(ONGû+ONGû INTERNATIONALûPLAYERS ûHOWEVER ûASûTHEû 53BNûASûSHAREûRALLIESûACROSSû!SIAûANDû WITHûAûSIGNIlCANTûINSTITUTIONALûOFFERING vû NUMBERûOFûGLOBALûBANKSûINûTHEûTOPûû THEûFASTERûPACEûOFûMAINLANDû#HINESEû)0/Sû HEûSAID ROSE ûUNDERSCOREDûBYûIMPRESSIVEûGAINSûFORû OFFSETûAûDISAPPOINTINGûYEARûINû(ONGû+ONGû h(ONGû+ONGûHASûMADEûHEADWAYûINûTAKINGû #ITIGROUP û(3"#ûANDû5"3 LISTINGS MARKETûSHAREûAWAYûFROMûTHEû53ûANDû)û "ANKûOFû#HINAûRANKEDûlRST ûGENERATINGû -ARKû3LAUGHTER ûHEADûOFûCORPORATEûANDû EXPECTûAûFEWûMOREûOFûTHESEûTYPESûOFûDEALSû 53MûFROMû-!ûADVISORY ûCAPITALû )"ûFORû!0!#ûATû#ITIGROUP ûCITEDûTHEûPICK UPû BEFOREûTHEûENDûOFûTHEûYEARv MARKETSûUNDERWRITINGûANDûLOANS ûFORûAû INûACTIVITYûOUTSIDEûOFû'REATERû#HINAûANDûAû THOMAS BLOTT ûMARKETûSHARE ûUPûFROMûûFORûTHEû RESURGENCEûINûBLOCKSûASûFACTORSûBEHINDûTHEû lRSTûNINEûMONTHSûOFû ûACCORDINGûTOû 53ûBANKSûGAINûINûMARKETûSHARE Asia Pacific IB Fees 4HOMSONû2EUTERSûDATA h4HEûKEYûTHINGûINû!SIAûISûTHATûYOUûHAVEûTOû 1/1/17 – 30/9/17 #ITICû3ECURITIESûWASûSECOND ûWITHûAû BEûINûEVERYûCOUNTRYûANDûCOVERûEVERYûSECTORû Values fees Share of ûSHAREûOFûWALLET ûWHILEû)NDUSTRIALûANDû )FûYOUûLOOKûATûTHEûWALLETûAVAILABLE û#HINAû Rank Row Labels in US$(m) wallet (%) #OMMERCIALû"ANKûOFû#HINA ûWHICHûTOPPEDû DOMINATES ûBUTû)NDIA û+OREAûANDû3INGAPOREû 1 Bank of China 926.75 6.05 THEûRANKINGSûFORûTHEûEQUIVALENTûPERIODûLASTû AREûIMPORTANT vûHEûSAID 2 CITIC 656.69 4.29 YEAR ûWASûTHIRD ûWITHûAûûMARKETûSHARE h7EVEûALSOûHADûAûVERYûSTRONGûYEARûINû 3 ICBC 520.46 3.40 #ITIGROUPûRANKEDûFOURTH ûTHEûHIGHESTû BLOCKSûANDûTHATûSTEMSûFROMûOURûLONG 4 Citigroup 372.22 2.43 AMONGûINTERNATIONALûPEERS ûJUMPINGûlVEû STANDINGûFOCUSûONûTHEûREALûESTATEûSECTORv 5 CCB 362.41 2.37 PLACESûINûTHEûLEAGUEûTABLEû(3"#ûCLIMBEDûTOû $#-ûFEESûEDGEDûUPûûTOû53BNû 6 HSBC 334.50 2.18 SIXTHûFROMûTHûLASTûYEAR ûWHILEû5"3ûMOVEDû ASûAûRECORDûYEARûFORû!SIANû'ûISSUANCEû 7 Morgan Stanley 324.24 2.12 UPûTWOûPLACESûTOûTH HELPEDûOFFSETûAûLIQUIDITYûCRUNCHûINû#HINAû 8 UBS 312.99 2.04 Chinese banks and brokers have made INûTHEûlRSTûHALF ûSTEMMINGûFROMûREGULATORYû 9 Haitong Sec 309.14 2.02 SIGNIlCANTûINROADSûINTOû!SIANû)"ûINûTHEûPASTû tightening and a scandal involving local 10 Goldman Sachs 287.27 1.88 FEWûYEARS ûLEVERAGINGûTHEIRûRELATIONSHIPSû BROKERAGEû3EALANDû3ECURITIESûLASTû$ECEMBER 11 Credit Suisse 280.65 1.83 with investors on the mainland and often &EESûFROMû'ûBONDûISSUESûINû!0!# ûEX 12 BoCom 272.61 1.78 UNDERCUTTINGûGLOBALûBANKSûONûFEES *APAN ûALMOSTûDOUBLEDûFORûTHEûlRSTûTHREEû 13 JP Morgan 263.68 1.72 )NTERNATIONALûBANKSûHAVEûRESPONDED ûINû QUARTERS ûRISINGûTOû53BNûFROMû53Mû 14 CICC 248.67 1.62 MANYûINSTANCES ûBYûSHRINKINGûHEADCOUNT û AûYEARûEARLIER 15 Guotai Junan Sec 247.21 1.61 ALTHOUGHûMANYûHAVEûDOUBLEDûDOWN ûBETTINGû ,OANûFEESûROSEûûTOû53BNûONûTHEû 16 Deutsche 247.19 1.61 that their links with global investors and BACKûOFûAûNUMBERûOFûBIGûDEALSûFROMû#HINESEû 17 ABC 246.88 1.61 STRENGTHûOUTSIDEû'REATERû#HINAûWILLûHELPû INTERNETûGIANTSû!LIBABAû'ROUPûANDû4ENCENTû 18 China Merchants Sec 233.78 1.53 THEMûREMAINûCOMPETITIVE (OLDINGS 19 GF Securities 222.17 1.45 h)NTERNATIONALûBANKSûSTILLûHAVEûAûBIGûROLEû -!ûFEESûDIPPEDûûTOû53BN ûDUEûTOû 20 BAML 195.92 1.28 TOûPLAY ûWHETHERûITSûGLOBALûDISTRIBUTIONûFORû capital controls from China and also in part 21 Standard Chartered 192.07 1.25 BONDSûANDûEQUITIESûORûCROSS BORDERû-!û BECAUSEûûWASûAûRECORDûYEARûFORû-!ûINû 22 Huatai Sec 190.03 1.24 ADVISORY vûSAIDû$AVIDû#HIN ûHEADûOFû!SIAû !0!# 23 ANZ 184.69 1.21 0ACIlCûCORPORATEûCLIENTûSOLUTIONSûATû5"3 "ANKERSûHAVEûSAIDûTHEYûEXPECTû$#-û 24 CMB 179.96 1.18 h4HESEûAREûOURûSTRENGTHSûANDûAREûHIGHû ISSUANCEûTOûDROPûOFFûINûTHEûlNALûQUARTERû 25 DBS 172.67 1.13 MARGINûPRODUCTSûSOû)MûHAPPYûTOûSURRENDERû ASûREGULATORYûAPPROVALSûFROMû#HINAûSLOWû Subtotal 7,784.84 50.85 some market share to the Chinese banks DOWN ûALTHOUGHû%#-ûISûEXPECTEDûTOûHAVEûAû ANDûFOCUSûONûTHEûMOREûPROlTABLEûWORKv STRONGûENDûTOûTHEûYEAR Source: Thomson Reuters

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14 International Financing Review Asia October 7 2017 Please send job moves to [email protected]

resolve the [non-performing assets]. That However, Kumar said he would not SBI boss to focus discussion, we will try to bring it to a chase growth at all costs and he dismissed conclusion very quickly, and you will see concerns the bank could be forced into on bad debts some changes,” he told reporters. some lending as the economy slowed. However, the bank is also considering Infrastructure lending, for example, has – and growth how to juggle the debt conundrum with been highly problematic for Indian banks. the need to grow, including infrastructure, The biggest chunk of bad loans were from Tackling bad debts will be the priority where Kumar has described lending the infrastructure and metals sectors, and for STATE BANK OF INDIA, newly appointed opportunities as “unlimited”. he said the bank would tread carefully. chairman Rajnish Kumar said last Thursday, As a whole, Asia has a huge “There is definitely a change in the but India’s largest lender will not shy away underwriting standards … We will be much from opportunities to grow, including in more cautious,” he said. infrastructure lending. “Sometimes, people equate it with SBI, which accounts for more than a “There is definitely a change risk aversion, but, let me tell you, it is fifth of India’s bank assets, had bad loans in the underwriting standards not risk aversion. We are still looking of US$35bn, or 12% of its loan portfolio, as for opportunities in financing good of end-June after it absorbed five subsidiary … We will be much more infrastructure projects.” banks earlier this year. cautious. Sometimes, people Last month, Fitch estimated Indian banks As a whole, Indian state-run banks have equate it with risk aversion, needed US$65bn to meet all of global Basel US$140bn in soured loans, a problem that but, let me tell you, it is not risk III banking rules by March 2019, well above has choked off new credit and dampened aversion. We are still looking the US$11bn that the government had economic growth. for opportunities in financing budgeted. Veteran banker Kumar, 59, whom However, Kumar said SBI was “well poised” investors and colleagues regard as an good infrastructure projects.” and did not expect to need more capital from astute operator, takes over from Arundhati the government before March 2019. Bhattacharya, who became one of India’s “At this juncture, a quick resolution of highest profile executives during her four the [non-performing assets] should be his years at the helm. infrastructure funding gap and India has a priority,” said Aalok Shah, analyst at Indian The new chairman also put soured loans chronic need to overhaul everything from brokerage firm Centrum Broking. at the top of his agenda, but said SBI had creaking railways to roads and overcrowded “The unfortunate thing for [state-run] tackled the debt issues that came as a result ports. banks has been frequent changes of senior of absorbing the smaller lenders. Asset Kumar said the bank would consider management teams. It’s comforting that he quality would “look much much better” in having separate senior executives dealing was a part of the senior management team future, he said. with stressed assets and loan growth to and a part of all the discussions. So, he’s “We are already in discussions on avoid having too many top managers not new to the system.” how we revive credit growth, how we focused only on bad debts. DEVIDUTTA TRIPATHY

a 2.5% capital conservation buffer and the requires an extra 1.0%–2.5%, depending Thais impose 1% D-SIB buffer. At the moment, the total on their profiles, while the Philippines minimum CET1 requirement for the five is imposed an extra 1.5%–2.5% and new D-SIB 5.75%. Singapore an extra 2%. However, chances of the five banks A Fitch note says the new rules do capital rules tapping the market for additional capital not change its view of the sovereign’s are small because all have CET1 ratios well propensity to support the banking system. Thailand has imposed new capital above the required minimums. “Importantly, Thailand has not requirements on five commercial lenders “We expect that the five banks will implemented specific resolution that deemed to be domestically systemically comfortably meet the additional capital reduces the likelihood of state funds important banks (D-SIBs). requirement because of their already-strong being used to support failing banks, as The five that Bank of Thailand named regulatory capita ratios and a general is recommended by the International D-SIBs are BANGKOK BANK, KRUNG THAI BANK, BANK slowdown in credit growth,” said Moody’s Financial Stability Board.” OF AYUDHYA, KASIKORNBANK and SIAM COMMERCIAL vice president Alka Anbarasu. Fitch analysts say they expect the BoT to BANK. The current CET1 ratios stand at 12.62% move in 2018 towards the implementation Under the new regulations, the banks for Bank of Ayudhya, 12.72% for KTB, of the net stable funding ratio as the have to maintain an additional 1% of 15.25% for Kasikornbank, 15.30% for SCB central bank moves towards adopting the Common Equity Tier 1 on top. The and 16.35% for BBL. Basel III rules. additional equity will be phased in, starting The central bank has said the higher However, the NSFR is unlikely to be with 0.5% in 2019 and rising to 1.0% in capital requirement will help banks absorb a major issue for commercial banks in 2020. losses better. Thailand as their average liquidity coverage As a result, the banks will need to have The 1% additional capital rule is lower ratio is 170%, reflecting their stable funding a CET1 ratio of 8% in 2020, made up of a than the levels central banks imposed and robust liquidity positions. 4.5% minimum Basel III CET1 requirement, in neighbouring countries. Indonesia KIT YIN BOEY

International Financing Review Asia October 7 2017 15

1012_05 People and Markets.indd 15 06/10/2017 21:44:12 People &Markets

SIZEDûBANKSû#ONSERVATIVELY ûWEûESTIMATEû INûTHEûSHORTûTERM vû:HOUû(AO ûAû3INGAPORE China tweaks 2MBBNûINûLIQUIDITYûCOULDûBEûFREEDûUP vû BASEDûANALYSTûATû#OMMERZBANK ûWROTEûINû ANALYSTSûATû,IANXUNû3ECURITIESûWROTEûINûAû AûNOTE RRR to boost NOTE 4HEû222ûWILLûBEûCUTûBPûFORûBANKSûWITHû !NALYSTSûSAIDûTHEûCUTûWASûDIFFERENTûFROMû LOANSûTOûTARGETEDûGROUPSûACCOUNTINGûFORû SME lending PREVIOUSûCHANGESûTOû222ûINûTHATûITûWASûAû ûOFûTHEIRûOUTSTANDINGûLOANûBALANCESûORû hDELAYEDvûREDUCTIONûTHATûWOULDûNOTûGOûINTOû THEIRûNEWLYûADDEDûLOANSûFORûTHEûPREVIOUSû #HINAûHASûCUTûTHEûRESERVEûREQUIREMENTûRATIOû EFFECTûUNTILûNEXTûYEAR YEAR FORûBANKSûFORûTHEûlRSTûTIMEûSINCEû&EBRUARYû !ûMUCHûHIGHERûBARûISûSETûFORûAûFURTHERû ûTOûENCOURAGEûMOREûLENDINGûTOû BPûCUTûûOFûLOANSûMUSTûBEûTOûTHEû STRUGGLINGûSMALLERûENTERPRISESûANDûENERGISEû DESIGNATEDûhINCLUSIVEûlNANCEvûGROUPS ûTHEû ITSûLACKLUSTREûPRIVATEûSECTOR “The size of the cut is big, it 0"O#ûHASûSAIDû"ANKSûTHATûMEETûTHEûû 4HEû0EOPLESû"ANKûOFû#HINAûSAIDûONûITSû covers all big banks, and 90% REQUIREMENTûWILLûSEEûTHEIRû222ûCUTûBP WEBSITEûONû3EPTEMBERûûTHATûITûWOULDûCUTû of small and mid-sized banks. 4HEû0"O#ûHASûSAIDûTHEûMOVEûHASûBEENû the ratio for some banks that meet certain Conservatively, we estimate MADEûTOûENCOURAGEûMOREûSMALLûLOANSû REQUIREMENTSûFORûLENDINGûTOûSMALLûBUSINESSû Rmb700bn in liquidity could be OFûUNDERû2MBMûTOûSMALLûlRMS ûLOANSû ANDûTHEûAGRICULTURALûSECTOR TOûINDIVIDUALûPROPRIETORSûANDûLENDINGû 4HEû0"O#ûSAIDûTHEûVASTûMAJORITYûOFû freed up.” THATûSUPPORTSûAGRICULTURALûPRODUCTION û #HINASûBANKSûWOULDûBEûELIGIBLEûFORûATûLEASTû INNOVATION ûTHEûPOORûANDûEDUCATION AûBPû222ûCUTûASûMOSTûMETûTHEûMINIMUMû 4HEû0"O#ûHASûSAIDûTHEûTARGETEDû222ûCUTû LEVELûTOûQUALIFY h#LEARLY ûTHEûMARKETûWILLûBEûDISAPPOINTEDû DOESûNOTûCONSTITUTEûAûCHANGEûTOûITSûPRUDENTû h4HEûSIZEûOFûTHEûCUTûISûBIG ûITûCOVERSû ASûTHISûCUTûWILLûNOTûHELPûEASEûTHEûLIQUIDITYû ANDûNEUTRALûMONETARYûPOLICY ALLûBIGûBANKS ûANDûûOFûSMALLûANDûMID conditions in the onshore banking system ELIAS GLENN

WHO’S MOVING WHERE... The three others are litigation practitioners Hao-Chin Jeng and Paul Quinn, as well as Yue „ BARCLAYS has appointed Reid Marsh head of services. Zhang, whose expertise spans investment banking for Europe, the Middle East and Asia- Marsh joined Barclays in 2010 as executive funds. Pacific. chairman of its industrials group, based in The six were among 97 new partners the US law Marsh previously co-headed the bank’s entire London. He relocated to Asia in 2014 to run firm named globally last week. APAC operations alongside Jaideep Khanna, who banking in the region. He was previously at will now take sole charge of the region. Citigroup as co-head of its European industrials „ NOMURA has hired Perry Tsea from Deutsche A Barclays spokesman said Marsh’s franchise. He joined Salomon Smith Barney Bank as head of its financial institutions group appointment is effective immediately, giving (later part of Citigroup) in 1995. for Greater China, effective October 3. him responsibility for all its banking activity Based in Hong Kong, he reports to James outside the Americas. „ KIRKLAND & ELLIS has promoted six of its Pearson, who joined last year from Standard He will split his time between London and lawyers to partnership in Hong Kong. Chartered as head for FIG for Asia ex-Japan. Hong Kong and report to Joe McGrath, global These include David Couper, who specialises in Tsea was head of Greater China FIG at Deutsche head of banking. Banking includes advisory, debt finance, and restructuring practitioners and, before that, had been with Bank of America capital markets and risk management Daniel Margulies and Robert Sandes. Merrill Lynch and UBS.

16 International Financing Review Asia October 7 2017 Please send job moves to [email protected]

„„Freddie Kwah has left FIRST ABU DHABI BANK as Tang joined Dagong last July as the Chinese his new job in November, the person said last regional head of syndications and distribution rating agency sought to expand its footprint Wednesday, declining to be identified pending a for Asia. overseas due to the increase in offshore bond public announcement. Based in Singapore, Kwah had been with the issues from mainland borrowers. Deutsche confirmed it had hired Prout to run its Middle Eastern bank for about four years. He was previously a director with S&P Global APAC AM business. It did not elaborate. Before FADB, Kwah was with DBS Bank’s Ratings, specialising in Greater China. He was Prior to joining Morgan Stanley in the US, Prout syndications team. Prior to that, he was with also China equity strategist at boutique Indian had worked at leading global fund managers, WestLB. investment bank Religare Capital Markets. including Invesco Asset Management and First Abu Dhabi Bank was formed in April as a Merrill Lynch Investment Managers in Hong result of the merger between First Gulf Bank „„Barbara Chapman will step down at Easter Kong and Tokyo. and National Bank of Abu Dhabi. next year as chief executive and managing director of ASB BANK, the New Zealand subsidiary „„Adrian Mowat has left as managing director „„US-headquartered investment manager of Commonwealth Bank of Australia. and chief Asian and emerging markets equity NORTHERN TRUST has hired Keishi Yamamoto Chapman, who has run ASB since 2011, says in strategist at JP MORGAN. to lead its asset-management business in a press release that, after almost seven years at Mowat joined the US investment bank in 2002 Japan. the helm, the time felt right to hand over. from Scottish investment manager Martin He is a replacement for Hidehiro Nakayama, The ASB board has initiated a search for a Currie. who is retiring later this year as president and successor. He oversaw a team of analysts, who fell foul of representative director. Chapman has been with the Commonwealth the Indonesian government for downgrading Yamamoto has spent the last 10 years as head Bank Group since 1994, having started her its recommendation on the country’s stocks of pensions at Wellington Management’s Japan career as chief manager marketing at ASB. Prior to “underweight” from “overweight” last subsidiary. to leading ASB, she served as group executive November. He previously ran his own hedge fund, known as in charge of human resources for the entire CBA Indonesia’s finance ministry cut some business Empower Investment. group. ties with JP Morgan afterwards. He reports to John McCareins, Asia Pacific In January, JP Morgan upgraded its managing director for Northern Trust Asset „„DEUTSCHE BANK has hired Alex Prout from recommendation on Indonesian stocks to Management. Morgan Stanley Investment Management as neutral from underweight, partially reversing new head of its Asia Pacific asset-management the November decision. „„Tony Tang has quit as managing director and business, based in Hong Kong, according to a There is no suggestion that Mowat’s departure head of ratings at DAGONG GLOBAL CREDIT RATING person with knowledge of the move. is related to the Indonesian episode. (HONG KONG), the overseas unit of rating agency Prout, who was chief operating officer for global JP Morgan did not immediately respond to a Dagong. sales and distribution at MSIM, would start request for comment.

IN BRIEF South Korea that had completed fundraisings to make Ban on raising money via ICOs arrangements to return funds. please Several regulators globally have been weighing contact us South Korea’s financial regulator issued on in on the debate over ICOs, with the US September 29 a ban on initial coin offerings, Securities and Exchange Commission stating if you have following similar restrictions introduced in in June that some tokens issued through ICOs information China. qualified as securities and fell within its purview. The FINANCIAL SERVICES COMMISSION said all kinds about job of ICOs were banned, explaining that trading of Japan virtual currencies should be tightly controlled Pair sets up US leveraged loan fund moves at and monitored. your firm or Fundraising through ICOs is “on the rise globally DEVELOPMENT BANK OF JAPAN and SUMITOMO MITSUI and our assessment is that ICOs are increasing BANKING CORP say, in a joint statement put out within the in South Korea, as well”, the regulator says in on Monday, they have set up a US$200m fund a statement after a meeting with the finance to invest in middle-market leveraged loans in market ministry, the Bank of Korea and the National Tax the US. Service. The banks plan to expand their businesses in It has warned that “stern penalties” would North America’s M&A market, where Japanese Call +852 2912 6670 be imposed on financial institutions and any companies have recently been making or email other parties involved in issuing ICOs without investments. [email protected] providing further details. The two will also consider collaborating with On September 4, the People’s Bank of China, other financial institutions. along with other regulators on the mainland, Overall, middle-market syndicated loan issues issued a statement declaring ICOs illegal in the third quarter of 2017 fell 14% year on year and requesting individuals and organisations to US$30.83bn from US$35.83bn.

International Financing Review Asia October 7 2017 17

1012_05 People and Markets.indd 17 06/10/2017 21:44:12 Interview

Danajamin looks to boost profile Malaysian state-owned agency pushes into new forms of guarantees

Malaysia’s credit transactions has slowed. A high rate which raised funds to acquire Ampang guarantee fund is of issuers’ early redemptions dented Point shopping mall in Kuala Lumpur looking to lift its the agency’s gross written premiums in November 2015. profile in the local and profitability for fiscal year 2016 It also sold its first “drop-off” capital markets and the first half of 2017. In the first guarantee in August, covering after a decline in half of 2017, net earned premiums Northern Gateway Infrastructure’s earnings in the amounted to M$38.6m, against M$340m bonds only during the project first half of the M$44.9m in the first half of 2016. phase. The guarantee, which will year. Malaysian rating agency RAM said expire once construction is completed, Fresh from its the business was running “below helped raise funds for an immigration, MOHAMED NAZRI own debut in potential”. It rates Danajamin AAA customs, quarantine and security OMAR, the ringgit bond on account of its state shareholders, project in Kedah. Chief executive market, DANAJAMIN the Ministry of Finance and Bank While Malaysian investors are familiar officer of Danajamin NASIONAL planned Negara Malaysia’s Credit Guarantee with construction risks and limited Nasional. to guarantee Corporation Malaysia. recourse project financings, the issuers M$600m–$800m are typically high-quality investment- (US$143m-$191m) DEBUT ISSUE grade credits. Danajamin’s drop-off of corporate Omar argues that Danajamin is a product prised open the door for bonds to be issued victim of its own success, as the investors to take construction risk in over the next guarantee programme has allowed lower-rated bonds. few months, chief executive officer issuers to Danajamin recently made headlines Mohamed Nazri Omar told IFR. refinance with maiden bonds of its own. It sold A pick-up in primary guarantees will through a M$500m 10-year non-call five Islamic bolster earnings and boost the state- “It is one of standalone bonds Tier 2 notes, priced at 4.8%. The issue owned bond insurer’s reputation as Danajamin’s or in the banking was well covered at 1.6x, showing a a catalyst for the development of the unique system. healthy appetite for the well-known Malaysian capital markets. However, it “It is one of credit. also poses a challenge for Danajamin, strategies to Danajamin’s Despite the strong demand, Danajamin which has a cautious attitude towards encourage unique strategies is unlikely to return to the market as credit risk and, so far, has not faced clients that to encourage a regular issuer simply because it does any claims under its guarantees. have achieved clients that not need the funds. The main goal of “Over the last two years, we have seen a better credit have achieved the issue was to diversify its sources an increase in credit applications from a better credit of regulatory capital beyond equity industries undergoing challenging profile to profile to migrate and retained profits, a move that will scenarios. In some instances, we migrate to to mainstream help meet new risk-based capital rules have had to turn down some of these mainstream financial aimed at limiting concentration risks applications in order to safeguard our financial institutions,” in capital raising. capital and balance sheet,” Omar said. institutions.” Omar said. “We have made a concerted effort to “In addition, we have also seen a few “This is a ensure that we reach out to a diverse of our transactions being deferred or testament to investor base through our townhall stretched much longer than usual to our assistance session and substantial engagements achieve issuance.” in guiding them with various investors in marketing Since its establishment in 2009, to improve their this subordinated debt issuance,” Danajamin has guaranteed both credit profiles such that they no longer Omar said. “As a result, we saw this conventional and Islamic bonds, need us, in some cases, even prior to first issuance well taken-up with a totalling M$16bn, from 31 Malaysian their scheduled maturity dates.” diverse mix of investors.” corporations across 12 different The insurance agency has also moved Danajamin priced the M$500m sukuk sectors, including 18 first-time issuers. beyond plain guarantee facilities into on September 26 at a profit rate It has helped finance M$5.2bn of real- more complex structures that allow of 4.8%. AmInvestment Bank and estate assets, Sabah’s first international investors to take greater exposure to a Maybank were joint lead managers hospital, and the restructuring of a specific project or asset. on the issue, as well as joint lead financing for a privately owned power For instance, Danajamin only arrangers on a M$2bn senior and producer at Kulim Hi-Tech Park. guaranteed a M$125m Class D junior subordinated sukuk murabahah Over the past two years, however, tranche of the M$450m 10-year asset- programme. the number of Danajamin-wrapped backed sukuk for Purple Boulevard, KIT YIN BOEY

18 International Financing Review Asia October 7 2017

1012_05 People and Markets.indd 18 06/10/2017 21:44:13 IFR Asia Awards 2017

e are delighted to announce the may contact shortlisted institutions for Final selection will be made by a senior IFR Asia Awards 2017. IFR Asia is further discussion, but responses are not editorial team in late November and the W looking for the most impressive guaranteed. award winners will be announced in the deals and the institutions that have best IFR Asia Review of the Year supplement, delivered on their chosen strategy across Please submit all material by email to: which will be published on December 15 Asia’s financing markets over the past 12 2017. months. [email protected] Below is a preliminary list of the awards To help us in the selection process, we Please note hard copies of any presentations that IFR Asia will consider for 2017. The invite advisers and issuers to submit brief are NOT required. final list of awards to be presented will be written presentations with supporting data at the editor’s discretion. by October 16. Please note consideration for Presentations should also include recent, an award will not be limited to institutions clearly identified photographs of senior Unless explicitly stated below, the IFR Asia that pitch in this way. All deals that executives and team members, as well awards take into account activity across the price in the 12-month period through to as brief, quotable comments that may be Asia Pacific region, including Australasia November 15 will qualify. included in articles about winning deals but excluding Japan. The Domestic Bank of or institutions. Presentations for house the Year must have its headquarters in the Presentations must be brief, including awards should also include contact details same region. short summaries of relevant transactions. (including phone number, email address Presentations for House awards should and postal address) of the executive who The awards will be presented at the IFR Asia answer the following: How did your would most likely collect the award in Awards Dinner in Hong Kong on February institution adapt to market trends over person at the Review of the Year Awards 27. For all booking enquiries, please contact the year? How did you stand out from the Dinner. the hotline at +800 8727 8326 or email cmp. competition? [email protected]. Presentations for deal awards should also Submissions should also include a clear include contact details (including phone Further details of the awards process and statement of the awards for which you number, email address and postal address) previous winners can be found at: would like to be considered. The IFR editors for the relevant borrower/issuer. www.ifrasiaawards.com

Awards categories

REGIONAL AWARDS Structured Finance Issue India Loan House

Bank of The Year Islamic Issue India Equity House

Asian Bank of the Year Frontier Markets Issue Indonesia Loan House

Issuer of The Year Restructuring Indonesia Capital Markets Deal Bond House Malaysia Bond House Investment-grade Bond COUNTRY AWARDS Malaysia Capital Markets Deal Domestic Bond Australia/NZ Bond House Philippines Capital Markets Deal SRI Bond Australia/NZ Loan House Singapore Bond House High-yield Bond House Australia/NZ Equity Issue Singapore Loan House High-yield Bond China Bond House Singapore Equity Issue Loan House China Equity House South Korea Capital Markets Deal Loan China Loan House Equity House Renminbi Bond Taiwan Loan House Equity Issue Hong Kong Loan House Taiwan Capital Markets Deal Mid-market Equity House Hong Kong Equity Issue Thailand Bond House Structured Equity Issue India Bond House Thailand Capital Markets Deal

1012_05 People and Markets.indd 19 06/10/2017 21:44:14 People &Markets

COMMENT Globalisation alive and well in Asian banking

HAS GLOBALISATION BITTEN the dust? of China’s GDP, a considerably lower multiple of domestic Signs of its demise are not hard to product than applies in emerging economies such as Russia uncover, from the recent independence and Brazil, where the figure is more than 300%. election in Catalonia, to Brexit, to By that measure, China’s expansion into markets overseas the widespread unpopularity of has a considerable way to go, and the asset side – the multilateral institutions, to the surge lending books of the country’s banks – will be leading in last month’s elections of the far- that charge. Together with the return of Japan’s banks to right AfD party in Germany and the lending, this Asian ebullience suggests an axiomatic shift is The expansion of imminent entry of the Freedom party underway in the global capital markets business. Chinese and Japanese in Austria. lenders is reshaping the Another symptom, if that’s the IT MAY SOUND bizarre, but, from the loan market point of capital markets, says right word, of the dampening of view, this balance sheet largesse on the part of Chinese and JONATHAN ROGERS globalisation has been the collapse of Japanese banks makes the job of the European bank loans cross-border capital flows, which have officer a little easier. plunged by around 65% over the past The big boys can make the big calls in loan underwriting decade. This is according to a recently and the regional players can enter a syndicate at lower published survey by McKinsey, which levels. Global banks get to earn some margin, a little bit of noted that much of that decline has league table credit and sleep more easily at night with less been the result of European banks retreating from cross- of the heavy lifting left on their own books. border lending and focusing instead on lending in their On the DCM side, the picture is less auspicious. home markets. Competing with Chinese banks with balance sheet to Europe’s rejection of globalisation is a rejection of the chuck around and a ready audience concept of a borderless zone, where loans are extended as if of institutional money back home the entire Eurozone were a single credit proposition. is starting to look like a walk up the That had been the goal immediately following the Competing down escalator. introduction of the euro at the end of the 1990s and held with Chinese There have been wry smiles on through the early years of the Global Financial Crisis. banks with syndicate desks at the big Western But the crisis changed all that. Rather, lending in Europe banks in recent years when looking at now involves something anchored on a map which balance the bloated bank syndicates on deals resembles the state of affairs prevailing in the inter-war sheet to led by Chinese bank subsidiaries in years. chuck around Asia. Italian banks lend to Italian companies, French banks is starting But it seems to me the default to French companies, Slovenian banks to Slovenian to look like position of condescension is going to companies, and so on. But that newly-discovered be replaced as this decade comes to a parochialism in Europe has been mirrored by the overseas a walk up close with a handing over of the baton expansion of Asian banks. the down to the boys with balance sheet at their escalator. disposal. CHINESE AND JAPANESE banks are certainly less concerned by As project finance becomes ever Brexit and EU politics. But it’s not just in that part of the more critical to the capital markets in world that Asian banks are extending their balance sheets. Asia, via vast infrastructure projects – In Japan’s case, the country’s banks have been spreading the Silk Road crafted by China being their wings in order to uncover opportunities in terms of the most conspicuous – deploying net interest margin which simply do not exist in Japan. balance sheet will become the only game in town. There In China, the banks’ overseas expansion can be viewed is the old expression “if you’ve got it, flaunt it.” That’s as part of the country’s grand plan which envisages, a fitting mantra for Asia’s debt capital markets as the philosophically at least, hegemony of the global financial Western banking stalwarts confront their homegrown system. peers. According to McKinsey, China last year ranked eighth And if globalisation is still alive and kicking as a mindset in terms of total foreign investment assets and liabilities, and an aspiration, it’s to be found in Asia more than up from 16th place in 2005. That equated to around 100% anywhere else.

20 International Financing Review Asia October 7 2017

1012_05 People and Markets.indd 20 06/10/2017 21:44:14 COUNTRY REPORT Australia 21 China 22 Hong Kong 24 India 25 Indonesia 27 Japan 29 Malaysia 30 Philippines 30 Singapore 31 Taiwan 34 Thailand 35

››AUCKLAND AIRPORT TAPS KANGAROO and A$1m Class Ds, all with 6.5-year WALs, is one-month BBSW plus 160bp–165bp AUSTRALIA AUCKLAND INTERNATIONAL AIRPORT, rated A– area, 210bp–215bp area, 295bp–300bp area (S&P), will hold an investor conference and 590bp–600bp area, respectively. call on Tuesday, with CBA and Westpac as The A1s, A2s and ABs are rated AAA/AAA DEBT CAPITAL MARKETS arrangers, for a tap of its A$150m 4.50% (S&P/Fitch). S&P alone sees the Bs as AA and September 23 2027 Kangaroo bonds issued the Cs as A+. ››ALBERTA KANGAROOS FETCH A$250M in March at asset swaps plus 145bp. Heritage Bank sold its last RMBS in Besides its only Kangaroo issue, the March 2014 with a A$400m securitisation PROVINCE OF ALBERTA, rated Aa1/A+ (Moody’s/ Kiwi airport has focused on domestic New of first-ranking mortgages through HBS S&P), raised A$300m (US$233m) from last Zealand retail and wholesale markets for its Trust 2014-1. Wednesday’s sale of two-tranche Kangaroo bond financing requirements. Australia’s largest mutual bank bonds through sole lead manager RBC previously issued RMBS in July 2011, Capital Markets. ››QUEENSLAND PLANS 2030 LINE the same year it changed its name from The Canadian province priced A$250m Heritage Building Society. of new 3.6% 10.5-year bonds at 99.502 for a QUEENSLAND TREASURY CORP, rated Aa1/AA+ yield of 3.6575%, 75bp wide of asset swaps (Moody’s/S&P), has mandated ANZ, Citigroup, and 81bp over the May 2028 ACGB. Deutsche Bank and Westpac for an offering of Alberta also tapped its 3.10% December new Australian dollar 144A eligible August Top lead managers of Australian dollar- 14 2026s for A$50m to lift the issue size to 21 2030 bonds. denominated domestic bonds, inc-Kangaroo bonds, A$250m. The reopening priced at 96.461 ex-self-funded transactions, ABS, MBS to yield 3.555%, 72bp and 84.25bp over 1/1/17 – 30/9/17 asset swaps and the April 2026 ACGB, STRUCTURED FINANCE Amount respectively. Name Issues A$(m) % ››HERITAGE SELLING US$388.6BN RMBS 1 ANZ 87 16,163.0 18.2 ››SPARK TARGETS FIRST KANGAROO 2 Westpac 48 11,708.7 13.2 HERITAGE BANK has released initial price talk 3 CBA 44 9,315.6 10.5 SPARK FINANCE, rated A– (S&P), has mandated for a proposed A$500m (US$388.6bn) issue 4 Deutsche 44 8,706.6 9.8 ANZ to arrange investor meetings in Sydney of HBS Trust 2017-1 Australian RMBS, 5 NAB 54 8,409.4 9.5 on Monday for a potential debut offering of expected to price this week. 6 UBS 26 7,211.3 8.1 Kangaroo bonds. NAB is arranger on the issue and joint 7 Citigroup 17 4,728.2 5.3 Spark Finance, the borrowing arm of lead manager with ANZ and Westpac. 8 TD Sec 64 4,583.9 5.2 Spark New Zealand, formerly Telecom New Price talk for the A$460m Class A1 and 9 Nomura 45 3,759.0 4.2 Zealand, raised NZ$125m (US$89.5m) from A$15m Class A2 notes, both with 3.3-year 10 RBC Capital 49 3,174.7 3.6 a local sale of 3.94% 10-year retail notes on weighted-average-lives, is one-month BBSW Total 281 89,028.8 August 31 last year. plus 110bp area and 130bp–135bp area, *Market volume and including Kangaroo bonds In December 2015, Spark issued respectively. Proportional credit NZ$100m of 4.51% 7.25-year (March 10 Guidance for the A$12.75m Class ABs, Source: Thomson Reuters SDC Code: AJ6 2023) retail notes. the A$7.25m Class Bs, the A$4m Class Cs

Top lead managers of Australian dollar- Top lead managers of all Australian debt, inc- Top lead managers of all Australian securitisation, denominated domestic securitisation, ABS, MBS (ex-self-funded transactions) inc-self-funded transactions ex-CDOs inc-self-funded transactions ex-CDOs 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues A$(m) % Name Issues A$(m) % Name Issues A$(m) % 1 ANZ 99 19,187.2 16.6 1 NAB 30 6,789.4 24.1 1 NAB 29 6,304.9 23.5 2 Westpac 72 17,102.7 14.8 2 Westpac 24 5,637.6 20.0 2 Westpac 24 5,394.0 20.1 3 NAB 83 14,714.3 12.7 3 Macquarie 15 3,891.6 13.8 3 Macquarie 15 3,891.6 14.5 4 CBA 55 12,099.9 10.5 4 ANZ 12 3,024.2 10.7 4 ANZ 12 3,024.2 11.3 5 Deutsche 54 11,366.6 9.8 5 CBA 11 2,930.4 10.4 5 CBA 11 2,784.3 10.4 6 UBS 26 7,211.3 6.2 6 Deutsche 10 2,740.6 9.7 6 Deutsche 10 2,660.0 9.9 7 Citigroup 18 4,883.2 4.2 7 Citigroup 3 558.9 2.0 7 BAML 2 500.0 1.9 8 TD Sec 64 4,583.9 4.0 8 BAML 2 500.0 1.8 8 JP Morgan 2 436.5 1.6 9 Macquarie 15 3,891.6 3.4 9 JP Morgan 2 436.5 1.6 9 Credit Suisse 2 365.8 1.4 10 Nomura 45 3,759.0 3.2 10 Credit Suisse 2 365.8 1.3 10 MUFG 1 325.0 1.2 Total 320 115,841.1 Total 40 28,171.0 Total 39 26,812.2

*Market volume and including Kangaroo bonds *Market volume and including Kangaroo bonds *Market volume and including Kangaroo bonds

Proportional credit Proportional credit Proportional credit Source: Thomson Reuters SDC Code: AJ3a Source: Thomson Reuters SDC Code: AJ4 Source: Thomson Reuters SDC Code: AJ5

International Financing Review Asia October 7 2017 21

1012_06 Country01.indd 21 06/10/2017 21:43:43 › BEACH SEALS INSTO RIGHTS OFFER

ANZ maintains lead BEACH ENERGY has completed the institutional portion of its A$301m rights issue, „ Bonds Australian major banks dominate local league table according to a statement from the oil-and- gas company. Australia and New Zealand Banking Group deals, is up almost 40% year on year at The 3-for-14 non-renounceable rights has maintained its year to date lead in A$142.2bn from A$103.4bn, with domestic issue was priced at A$0.75 per new share, the local 2017 bookrunner league table, corporate issues having already hit an annual or a 9.1% discount to the September 27 according to Thomson Reuters data. record, while asset-backed securities are close. Major shareholder Seven Group ANZ, the traditional frontrunner in recent about to reach post-global financial crisis committed to take up its entitlement years, had a 16.6% share of domestic currency peaks. of A$68m, which, combined with the transactions in the first three quarters of the A calmer market backdrop and tighter institutional leg of the offer, means year, including securitisations, but excluding margins led to a more than doubling in Beach had already raised A$201m. The self-led trades. The bank has participated in ABS from A$12.3bn to A$28.5bn. Domestic institutional leg had a take-up rate of 99 of the 320 year-to-date deals totalling corporations have printed A$12bn, almost around 97%, and a sub-underwriting A$115.8bn (US$90.8bn). four times the A$3.1bn issued in the same commitment from Seven. Westpac came in second with a 14.8% share, period in 2016. The A$100m retail offer, which runs on 72 trades, while National Australia Bank was Total government sales of A$38bn are well until October 16, is priced the same as the third with a 12.7% share from 83 transactions, up on the A$21.5bn for the first nine months institutional leg. 30 of them securitisations – a traditional strong of last year. SSA Kangaroos have raised The Australian company is using the suit. In fourth place is Commonwealth Bank A$18bn versus A$14.1bn a year ago, with non- rights issue to fund partly its acquisition of Australia with 10.5% from 55 transactions. SSA Kangaroo issuance growing to A$9.6bn of Lattice Energy for around A$1.5bn. The Deutsche Bank is the highest placed offshore from A$6.9bn. rest of the acquisition will be financed lead manager, having helped arrange 54 trades The big year-on-year loser has been the through senior secured syndicated debt for a 9.8% market share, and UBS is next with a traditionally dominant domestic banking facilities. 6.2% share from 26 transactions. sector. With lending growth slowing, Credit Suisse, Goldman Sachs and UBS are Making up the top 10 are Citigroup and Australian financials have raised A$36.1bn advising on the rights issue. SSA Kangaroo specialist TD Securities, ABS- from the domestic market this year, down heavy Macquarie Group and Nomura, with from A$45.5bn in the same period in 2016 respective market shares of 4.2%, 4.0%, 3.4% for a declining overall market share of 25.3%, and 3.2%. down from 44%. Overall Q1–Q3 supply, including self-led JOHN WEAVERS CHINA

DEBT CAPITAL MARKETS EQUITY CAPITAL MARKETS offer at A$3.85 per new share, or at a 6.3% discount to the theoretical ex-rights price. › BRIGHT FOOD READIES BUYBACK › MOTORCYCLE READIES RIGHTS OFFER Morgans has fully underwritten the offer. The acquisition of roughly A$123.2m BRIGHT FOOD (GROUP) will buy back at par its Australia’s MOTORCYCLE HOLDINGS is raising will be funded through a cash payment remaining US$500m of 3.00% 2018 notes on A$67m (US$52m) from a rights issue partly to of A$98.7m and A$24.5m in Motorcycle completing a cash tender offer last week. fund the acquisition of parts supplier Cassons. Holdings shares. Bright Food said it had bought back The motorcycle dealership operator The rights offer opens on Wednesday. priced the 11-for-24 renounceable rights Top bookrunners of Australian equity and Top bookrunners of Australian equity convertible offerings Top bookrunners of Australia syndicated loans 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues US$(m) % Name Issues US$(m) % Name Deals US$(m) % 1 Macquarie 15 3,204.1 20.8 1 Macquarie 3,204.1 20.8 1 CBA 26 4,849.4 15.4 2 UBS 20 2,835.1 18.4 2 UBS 2,835.1 18.4 2 ANZ 19 4,208.5 13.3 3 JP Morgan 5 1,217.8 7.9 3 JP Morgan 1,217.8 7.9 3 Westpac 21 3,990.0 12.6 4 Goldman Sachs 4 679.7 4.4 4 Goldman Sachs 679.7 4.4 4 NAB 17 3,284.2 10.4 5 Morgan Stanley 3 639.9 4.2 5 Morgan Stanley 639.9 4.2 5 HSBC 9 2,182.1 6.9 6 Bell Financial 38 600.5 3.9 6 Bell Financial 600.5 3.9 6 Bank of China 5 1,436.4 4.6 7 CICC 1 564.9 3.7 7 CICC 564.9 3.7 7 Credit Agricole 5 1,086.4 3.4 8 Citigroup 2 491.5 3.2 8 Citigroup 491.5 3.2 8 MUFG 8 1,082.1 3.4 9 Morgans Financial 27 420.8 2.7 9 Morgans Financial 420.8 2.7 9 Mizuho 5 739.2 2.3 10 Euroz Sec 15 379.1 2.5 10 Euroz Sec 379.1 2.5 10 BNP Paribas 4 724.9 2.3 Total 440 15,391.5 Total 15,407.7

Total 75 31,592.2 *Market volume *Market volume * Based on market of syndication and market total “Standard Exclusion not applicable” “Standard Exclusion not applicable” Proportional credit Proportional credit Proportional credit Source: Thomson Reuters SDC Code: S7 Source: Thomson Reuters SDC Code: AK2 Source: Thomson Reuters SDC Code: AK1

22 International Financing Review Asia October 7 2017 COUNTRY REPORT CHINA

US$361.584m of the notes through the year non-put two notes for US$100m at a senior executives from GLP, is in the tender offer and pointed out that it would cash price of 100.04. process of taking over the Singapore-listed exercise an early redemption option for the The reopening, stemming from reverse company for S$16bn. This ranks as Asia’s rest. anchor interest, was priced on September largest PE buyout. Property developer China The company had offered a tender price 29. Vanke is part of the group. of US$100.75 per US$100 principal before The original senior unsecured fixed-rate an early deadline of September 15 and bonds priced last month. The Reg S notes ››CHINA CITIC WORKS ON T2S at par on or before the final deadline of are unrated and have a letter of support September 22. The tender offer settled on from Tus-Holdings. CHINA CITIC BANK aims to raise up to Rmb50bn September 29. China Industrial Securities International and from the sale of Tier 2 notes in China’s The Shanghai-based state-owned Orient Securities (Hong Kong) were joint global interbank bond market. company will redeem the remaining coordinators, as well as bookrunners with The bank’s board has approved the US$138.416m of notes at par, with payment Barclays. proposal and it is now awaiting clearances on October 10. 21Vianet is a China-based provider of from shareholders and regulators. The senior unsecured notes were issued data-centre services. The Chinese lender is looking at tenors in the name of wholly owned subsidiary of 10 years non-call five or 15 years non-call Bright Food Hong Kong in 2013, with a ››GLP PLANS PANDA RETURN 10, according to its filing. guarantee from Bright Food (Group). HSBC was dealer manager on the offer. Asia’s biggest warehouse operator, GLOBAL LOGISTIC PROPERTIES (GLP), intends to sell its STRUCTURED FINANCE ››21VIANET REOPENS NOTES second batch of Panda bonds in China to raise Rm1bn (US$150m). ››DNAF READIES RMB3.5BN AUTO ABS 21VIANET GROUP tapped its US$200m 7% three- Books for the five-year offering in China’s interbank bond market will open on DONGFENG NISSAN AUTO FINANCE is set to sell October 12. Rmb3.5bn (US$1.35bn) of auto loan-backed Top bookrunners of Dim Sum bonds The bonds will be issued in the name securities for its third ABS print in China (Rmb issued and settled offshore bonds) of GLP subsidiary Iowa China Offshore this year. 1/1/17 – 30/9/17 Holdings (Hong Kong). The issue is split into a fixed-rated Class Amount The proceeds will be used in China to A1 tranche of Rmb1bn, a floating-rate Name Issues Rmb(m) % repay bank loans and replenish capital. Class A2 tranche of Rmb1.952bn and a 1 HSBC 29 10,096.5 24.6 Both the notes and the issuer have AAA subordinate piece of Rmb548m. 2 BoCom 4 8,400.0 20.5 ratings from China Chengxin and Shanghai The two senior tranches, expected to 3 Standard Chartered 19 4,774.2 11.7 Brilliance Credit Rating. mature on August 26 2018 and August 4 Credit Agricole 16 4,320.0 10.5 China Merchants Bank is sole lead on the 26 2019, respectively, are rated AAA/AAA 5 CSC Financial 2 2,625.0 6.4 offering. (China Chengxin/China Bond Rating), while 6 BNP Paribas 5 1,314.3 3.2 In July 2016, GLP launched debut the subordinated tranche is unrated. 7* ICBC 1 1,250.0 3.1 Rmb1.5bn Panda bonds on the Shanghai Books will open on October 12 in China’s 7* CMB 1 1,250.0 3.1 Stock Exchange. interbank bond market. The notes will also 7* Barclays 5 1,250.0 3.1 In a statement last Monday, GLP said be available under Bond Connect, which 10 Citigroup 4 1,105.0 2.7 it had agreed to buy European logistics gives international investors direct access to Total 104 40,991.9 platform Gazeley for about US$2.8bn in its China’s domestic market from Hong Kong. *Market volume first push into Europe and underscoring The collateral pool comprises 50,146 Proportional credit consolidation in the buoyant sector. loans to individuals with outstanding Source: Thomson Reuters SDC Code: AS24a Meanwhile, a leading Chinese private- equity consortium, with backing from Top bookrunners of China equity and Top bookrunners of all renminbi bonds, convertible offerings ex-self-funded transactions Top bookrunners of China syndicated loans 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues US$(m) % Name Issues Rmb(m) % Name Deals US$(m) % 1 Citic 44 7,102.5 8.3 1 CCB 726 517,376.5 8.3 1 Bank of China 159 35,904.5 53.4 2 Goldman Sachs 20 5,122.0 6.0 2 Bank of China 666 505,628.4 8.1 2 ICBC 37 11,819.7 17.6 3 Guotai Junan Sec 32 4,894.8 5.7 3 ICBC 636 479,627.5 7.7 3 CDB 7 7,482.4 11.1 4 CICC 26 4,411.0 5.2 4 BoCom 614 429,804.6 6.9 4 ABC 6 2,489.6 3.7 5 China Sec 27 4,380.9 5.1 5 ABC 570 414,345.0 6.6 5 Bank of Shanghai 2 1,920.9 2.9 6 Essence Sec 23 3,353.3 3.9 6 Citic 376 328,529.8 5.3 6 ADBC 1 1,296.0 1.9 7 GF Sec 40 3,235.5 3.8 7 Industrial Bank 417 249,116.1 4.0 7 Shanghai Pudong 10 1,080.8 1.6 8 Morgan Stanley 21 3,186.9 3.7 8 CMB 320 185,833.3 3.0 8 CCB 2 815.7 1.2 9 Guosen Sec 29 2,973.2 3.5 9 CMBC 319 169,522.9 2.7 9 BoCom 3 709.7 1.1 10 Haitong Sec 41 2,840.0 3.3 10 CSC Financial 218 166,836.7 2.7 10 Mizuho 3 631.2 0.9 Total 601 85,696.3

Total 3,201 6,248,863.3 Total 248 67,215.7 *Market volume *Market volume * Based on market of syndication and market total “Standard Exclusion not applicable” Proportional credit Proportional credit Proportional credit Source: Thomson Reuters SDC Code: AS24 Source: Thomson Reuters SDC Code: S8b Source: Thomson Reuters SDC Code: C1m

International Financing Review Asia October 7 2017 23

1012_06 Country01.indd 23 06/10/2017 21:43:43 principal of Rmb3.5bn. The weighted- Asset Management holds 28.7%, while and hedge fund Coatue invested US$170m average annual interest rate on the loans China Aerospace Investment Holdings is in Uxin. is 7.39%. the other main shareholder. China Merchants Securities is the lead For full allocations, see www.ifrasia.com. › BANK OF QINGDAO REFILES IPO underwriter and bookrunner on the issue, with Bank of Tokyo-Mitsubishi UFJ (China) BANK OF QINGDAO has asked regulators and Agricultural Bank of China as joint lead EQUITY CAPITAL MARKETS to resume a review of its A-share underwriters. IPO application after a change to its Dongfeng Nissan printed previous two › UXIN TO GO PUBLIC NEXT YEAR sponsor representative, according to an ABS – one in May and the other in July. announcement from the lender. UXIN, one of China’s biggest used-car sales According to the filing, Citic Securities, platforms, plans to go public next year in sponsor of the A-share float, named a SYNDICATED LOANS a deal that could raise around US$800m, new representative for the IPO due to according to people familiar with the other work commitments, triggering › ANYOU LAUNCHES MAIDEN LOAN situation. a halt in the regulatory process. BofQ The online auction house has invited described the change as a “routine Animal feed-maker ANYOU BIOTECHNOLOGY banks to pitch for the deal, which may matter” that would not have a material GROUP is making its debut with a US$100m come to market as early as the first half of impact on the deal. five-year loan, with Far Eastern International next year, according to the people. Hong Kong-listed BofQ has proposed a Bank as the mandated lead arranger and The private equity-backed company Shenzhen IPO of up to 1bn A-shares, or bookrunner. is considering listing in the US or Hong about 24.64% of its enlarged capital. The loan, launched last Tuesday, pays an Kong, but no decision has been made as Proceeds will be used to replenish the interest margin of 280bp over Libor and has yet. bank’s Core Tier I capital. an average life of 2.56 years. One of the sources said the size of the The IPO still needs approvals from Banks committing on or before deal could reach as much as US$1bn, shareholders and regulators. November 3 will earn a 5bp early-bird fee. depending on the company’s valuation and MLABs committing US$25m or more the size of the stake on offer. will obtain an all-in pricing of 311bp via a Founded in 2011, Uxin operates 75bp management fee, while MLAs joining Youxinpai, a business-to-business with US$20m–$24m will receive an all-in platform for second-hand car sales, and HONG KONG pricing of 305bp via a 60bp fee. Lead Uxin Ershouche, a business-to-consumer arrangers coming in with US$10m–$19m platform. It also operates Uxin Finance, will receive an all-in pricing of 293bp via which provides funds for used-car DEBT CAPITAL MARKETS a 30bp fee. The all-in pricing includes the transactions. early bird fee.The deadline for responses is Riding on booming interest in China’s › EMPEROR BUYS BACK HALF OF 2022S November 10. used-car market, Uxin has completed The borrower’s parent, Anyou Group several rounds of private financings. In EMPEROR INTERNATIONAL HOLDINGS has bought (China), and the parent company’s January this year, it has sealed a US$500m back half of its HK$800m (US$1.02m) chairman and vice president are the funding round, co-led by investors PE 4.70% due 2022 HK dollar bonds issued six guarantors. firm TPG, Jeneration Capital and China months ago. Funds are for capital expenditure, Vision Capital. Existing and new investors In a filing to the Stock Exchange refinancing and working capital purposes. Warburg Pincus, Tiger Global Management, of Hong Kong, Emperor says it has Hillhouse Capital and KKR also participated. repurchased HK$400m of the 2022s › CALG MORE THAN DOUBLES LOAN In March 2015, KKR, search engine Baidu from an independent third party and

CHINA AIRCRAFT LEASING GROUP HOLDINGS’ 4.5- year pre-delivery payment financing has Top bookrunners of Hong Kong dollar bonds, Top bookrunners of Hong Kong dollar bonds, been more than doubled to US$425m inc certificates of deposit, commercial paper ex-certificates of deposit, commercial paper from the original target of US$175m after 1/1/17 – 30/9/17 1/1/17 – 30/9/17 11 lenders joined in syndication. Amount Amount China Everbright Bank, Hong Kong Name Issues HK$(m) % Name Issues HK$(m) % branch,and Industrial and Commercial Bank 1 HSBC 120 39,703.7 32.7 1 HSBC 37 20,139.5 33.0 of China (Asia) were the mandated lead 2 Standard Chartered 53 23,288.9 19.2 2 Standard Chartered 17 9,236.9 15.1 arrangers, bookrunners and underwriters 3 Citigroup 20 6,950.0 5.7 3 DBS 5 3,750.0 6.1 on the facility, which pays a top-level 4 Credit Agricole 20 6,479.0 5.3 4 Citigroup 7 3,470.0 5.7 all-in pricing of 284bp, based on an 5 Bank of China 6 4,007.5 3.3 5 Bank of China 4 3,107.5 5.1 interest margin of 265bp over Libor and a 6 DBS 5 3,750.0 3.1 6 Credit Agricole 8 2,979.0 4.9 85.5bp fee. Everbright is also the facility 7 CBA 14 3,723.5 3.1 7 Mizuho 7 2,464.5 4.0 agent. 8 Mizuho 10 3,564.5 2.9 8 ANZ 5 1,857.5 3.0 The borrower is CALC PDP 3, a newly 9 OCBC 9 2,972.1 2.5 9 BoCom 3 1,607.5 2.6 created special-purpose vehicle in the 10 BAML 3 2,612.8 2.2 10 Barclays 4 1,576.0 2.6 British Virgin Islands. CALG is the Total 317 121,327.0 Total 110 61,104.8 guarantor. *Market volume *Market volume Hong Kong-listed China Everbright Proportional credit Proportional credit controls 32.3% of CALG. Friedmann Pacific Source: Thomson Reuters SDC Code: AS5a Source: Thomson Reuters SDC Code: AS6

24 International Financing Review Asia October 7 2017 COUNTRY REPORT INDIA

has cancelled them. The cancelled bonds New Energy and Upsky Holdings are the interest margin of 128bp over Libor and a represent 50% of the total principal guarantors. six-year average maturity. amount of the Reg S issue, cutting the Funds are for capital expenditure, outstanding to HK$400m. refinancing and working capital purposes. ››TIGHT PRICING FOR IOC BORROWING The Hong Kong-listed property and hotel The borrower last tapped the market in company said the purchase of the notes December 2015 for a US$250m three-year State-owned oil-and-gas company INDIAN would not materially impact its financial term loan. BoT Hong Kong, Chang Hwa OIL CORP has launched a US$300m five-year position as it had maintained “a healthy Hong Kong and Land Bank of Taiwan Hong term loan into general syndication at the level of working capital and cashflow”. Kong were the MLABs on that loan, which lowest all-in margin for that tenor from On March 23 this year, the company paid a top-level all-in pricing of 386.36bp India since the 2008 global financial crisis. priced US$300m-equivalent of bonds in two via a 100bp fee. Bank of Nova Scotia is the mandated lead currencies. In addition to the 4.70% 2022s China Tian Lun Gas and its units operate arranger and bookrunner on the loan, tranche, it also priced a US$200m of 5.00% gas pipelines. They are also involved in paying an interest margin of 70bp over US dollar notes due 2022. the transportation, distribution and sale of Libor with a remaining life of 4.75 years. gas and they build and operate gas filing Export Development Canada joined as MLAB stations. before the launch into syndication. SYNDICATED LOANS BNS won the mandate with a bid of 93bp all-in, the lowest margin for an Indian ››CTLG BACK FOR FIVE-YEAR FUNDS borrower since 2008. Lenders will receive a top-level all-in Hong Kong-listed CHINA TIAN LUN GAS HOLDINGS INDIA pricing of 91bp and the lead arranger title for has returned for a HK$1.25bn (US$160m) US$20m–$29m, via an upfront fee of 99.75bp, five-year loan after a two-year absence from or an all-in of 90bp and the arranger title for the market. SYNDICATED LOANS US$10m–$19m, via a fee of 95bp. Bank of Taiwan Hong Kong and Chang Hwa The deadline for commitments is Commercial Bank Hong Kong are mandated ››PFC ISSUES RFP FOR US$200M BULLET November 10. A bank presentation will be lead arrangers and bookrunners on the held in Singapore on October 13. loan, which has an unspecified greenshoe State-owned POWER FINANCE CORP has sent out Funds will be used to refinance part option. Chang Hwa is the facility agent and a request for proposals for a US$200m five- of IOC’s US$650m unsecured term loan coordinator. year bullet loan on its second attempt this completed in May 2014. ANZ, DBS Bank, The facility pays an interest margin of year to tap banks for financing. Deutsche Bank, HSBC, BNS, State Bank of 300bp over Hibor and carries an average The facility comes with a greenshoe India, SMBC, UOB and Westpac were the life of 3.575 years. option of up to US$100m. The deadline for MLABs on that loan, which attracted 27 MLAs joining with HK$160m and above responses is next week and funds will be other lenders in general syndication. The earn an upfront fee of 70bp for an all-in used for general corporate purposes. loan offered a top-level all-in of 200bp, pricing of 319.6bp, lead arrangers with PFC had sent out a RFP in March for a based on a margin of 180bp over Libor and HK$80m–159m get a 50bp upfront fee for US$100m-equivalent 10-year financing a 4.92-year remaining average life. an all-in pricing of 313bp and arrangers in euros. However, it failed to attract any In June, IOC closed a US$300m five-year with HK$40m–$79m get a 30bp fee for a interest for the loan due to the long tenor. bridge takeout, which funded its purchase 308.4bp all-in pricing. The borrower last raised foreign-currency of a stake in two Russian oilfields last year. A site visit to Zhengzhou, Henan debt in November 2015, when it signed a SMBC was the sole MLAB on the bullet province, is scheduled for October 11–13. US$360m-equivalent yen bilateral loan with facility, which attracted Bank of China The deadline for responses is November 3. State Bank of India. Hong Kong. The loan paid a top-level all-in The borrower’s chairman, Zhang In March 2015, it signed a US$450m of 95bp, via an interest margin of 68bp and Yingcen, and offshore units Tian Lun 6.5-year loan with four banks, paying an a remaining average life of 4.92 years. all-in pricing in the mid-160s, based on an

Top bookrunners of Hong Kong syndicated loans Top lead managers of Indian rupee bonds 1/1/17 – 30/9/17 Hong Kong global equity and equity-related 1/1/17 – 30/9/17 Amount 1/1/17 – 30/9/17 Amount Name Deals US$(m) % Amount Name Issues Rs(m) % 1 HSBC 19 3,598.3 9.0 Name Issues US$(m) % 1 Axis 157 713,576.4 24.9 2 Bank of China 15 3,484.3 8.7 1 Goldman Sachs 7 1,833.5 19.2 2 HDFC 124 401,552.0 14.0 3 Standard Chartered 19 3,030.5 7.6 2 Morgan Stanley 3 1,167.0 12.3 3 Trust Group 135 314,924.8 11.0 4 CMB 14 3,029.8 7.6 3 Kingston Sec 24 622.3 6.5 4 ICICI 111 235,722.4 8.2 5 CCB 5 1,998.9 5.0 4 Haitong Sec 6 534.0 5.6 5 Yes Bank 67 193,572.9 6.7 6 ANZ 7 1,964.6 4.9 5 UBS 4 470.4 4.9 6 AK Capital 63 136,025.2 4.7 7 Credit Suisse 9 1,750.8 4.4 6 Deutsche 1 387.7 4.1 7 Edelweiss Financial 59 124,505.2 4.3 8 ICBC 9 1,533.2 3.8 7 CCB 3 276.7 2.9 8 State Bank of India 40 110,242.4 3.8 9 DBS 6 1,497.3 3.7 8 Guotai Junan Sec 10 267.2 2.8 9 Standard Chartered 21 72,407.1 2.5 10 MUFG 3 1,385.1 3.5 9 SW Hongyuan (HK) 4 180.9 1.9 10 Tipsons 34 62,225.7 2.2 Total 78 40,151.4 10 China Everbright 4 173.5 1.8 Total 444 2,871,997.7

* Based on market of syndication and market total Total 225 9,528.3 *Market volume

Proportional credit Proportional credit Source: Thomson Reuters SDC Code: S9b Source: Thomson Reuters Source: Thomson Reuters SDC Code: AS23

International Financing Review Asia October 7 2017 25

1012_06 Country01.indd 25 06/10/2017 21:43:44 Vedanta is also currently in the market for a US$575m five-year amortising facility. Reliance seeks US$3bn refi Barclays, Credit Suisse, DBS, First Abu Dhabi Bank and StanChart are the MLABs on the „„Loans Indian conglomerate aims to rework borrowing raised in last three years loan, which pays a top-level all-in pricing of 345.46bp, based on an interest margin of Indian conglomerate RELIANCE INDUSTRIES is loan, including 15 MLABs. Tranche A paid 310bp over Libor and a remaining average seeking to refinance loans of up to US$3bn a top-level all-in of 155bp, based on an life of 4.23 years. raised in the last three years. interest margin of 135bp over Libor, while The borrower plans to refinance a tranche B offered a top-level all-in of 171bp, US$1.47bn dual-tranche facility it signed based on a margin of 151bp over Libor. The EQUITY CAPITAL MARKETS in November 2015, as well as a US$1.5bn average lives are 5.25 years and 6.5 years, dual-tranche borrowing raised for respectively. ››HAL FILES IPO PROSPECTUS subsidiary RELIANCE JIO INFOCOMM in November In March, Reliance Industries signed a 2014. The tenors of the new financing will US$1.75bn refinancing, which comprises a State-owned HINDUSTAN AERONAUTICS has filed match the residual lives of the loans being US$1bn facility A maturing on November a draft prospectus for its IPO of Rs30bn– refinanced. 13 2018; a US$200m facility B due on Rs40bn (US$458m–$610m), putting the Reliance Industries’ US$1.47bn loan September 12, 2018 and a US$550m facility long-awaited government sell-down on comprises a US$1.39bn tranche A and C expiring on April 27 2020. Only facilities A track to launch early next year. a ¥9.76bn (US$81m) tranche B. It has a and C were syndicated. In all, 16 banks were The prospectus shows the Indian door-to-door maturity of 43 months and an senior MLABs, while another four joined as government plans to sell 36.1m shares and average life of 3.3 years. MLABs. Facility A paid a top-level all-in of cut its 100% stake to 90%. A total of 31 banks participated in the 91bp, based on interest margins of 63.5bp The IPO has been in the works since loan, including 16 mandated lead arrangers over Libor, while facility C offered a top- at least 2012, when the government and bookrunners. Tranches A and B paid level all-in of 106bp, based on a margin of mandated four banks as arrangers. Of top-level all-in prices of 112bp and 82bp, 83.5bp. The tranches have remaining lives of those, only Axis and SBI Capital remain based on interest margins of 84.5bp 1.57 and 3.02 years, respectively. bookrunners, while Barclays and Goldman over Libor and 57.5bp over yen Libor, Reliance Industries is a Mumbai- Sachs are no longer involved. Barclays respectively. headquartered conglomerate with closed its equity underwriting business in Reliance Jio’s 2014 loan comprises a businesses across India engaged in energy, India last year. US$1bn 5.5-year portion (tranche A) and petrochemicals, textiles, natural resources, Hindustan Aeronautics, known as HAL a US$500m seven-year piece (tranche B). retail and telecommunications. for short, posted revenue of Rs179.5bn for A total of 26 banks participated in that PRAKASH CHAKRAVARTI, CHIEN MI WONG the financial year to March 31 2017 versus Rs167.6bn for FY2016. Its net profit grew to Rs26.2bn from Rs20bn. The aircraft and aeronautic equipment ››SEVEN FOREIGN BANKS FOR CAIRN INDIA The blended interest margin is 205bp and maker plans to list its shares on the BSE the blended remaining average life is 3.17 and National Stock Exchange. Seven banks have joined in general years. syndication the part of CAIRN INDIA HOLDINGS’ Cairn India’s loan follows its merger ››ACME SOLAR SETS IPO GOAL US$651m financing syndicated to foreign with London-listed VEDANTA RESOURCES and lenders. The US$651m financing comprises refinances all debt at the latter’s wholly ACME SOLAR plans an IPO of Rs22bn a US$155.125m three-year facility A, a owned subsidiary, Twin Star Holdings, sometime in January or February, with US$93m five-year facility B, a US$309.875m which had raised debt to fund the Citigroup, Deutsche Bank and ICICI Securities as five-year facility C and a US$93m five-year acquisition of Cairn India. bookrunners.. facility D. The company also intends to embark Barclays, Citigroup, Credit Suisse, First Abu Dhabi Bank and Standard Chartered were the Top bookrunners of India syndicated loans mandated lead arrangers and bookrunners 1/1/17 – 30/9/17 India equity and equity-related of facilities A and C, which were targeted Amount 1/1/17 – 30/9/17 solely at foreign lenders and ended up Name Deals US$(m) % Amount attracting seven other banks in general 1 State Bank of India 21 10,260.1 31.8 Name Issues US$(m) % syndication. 2 Axis 26 4,857.3 15.1 1 Kotak Mahindra 10 2,250.0 13.1 Interestingly, Barclays and Credit Suisse 3 ICICI 22 3,228.5 10.0 2 Citigroup 13 1,888.0 11.0 have ended up with zero final holds, 4 L&T Financial Services 31 2,050.5 6.4 3 JM Financial 9 1,186.2 6.9 which is quite rare for syndicated loans 5 Standard Chartered 14 1,567.8 4.9 4 IIFL Holdings 10 1,133.1 6.6 in Asia. 6 Yes Bank 22 1,530.4 4.8 5 BAML 5 1,124.8 6.5 Indian banks cannot participate in 7 Indusind Bank 28 991.7 3.1 6 ICICI 16 1,094.6 6.4 facilities A and C due to regulatory 8 MUFG 9 916.4 2.8 7 Deutsche 8 1,042.4 6.0 restrictions. Axis Bank and ICICI underwrote 9 HSBC 7 528.2 1.6 8 Axis 15 1,025.6 6.0 facilities B and D, which attracted Kotak 10 SMFG 3 508.4 1.6 9 Morgan Stanley 4 829.1 4.8 Mahindra Bank in syndication. Total 167 32,246.8 10 State Bank of India 18 716.6 4.2 Banks joining both facilities A and C * Based on market of syndication and market total Total 185 17,244.0 on a pro-rata basis as MLAs were offered a Proportional credit blended top-level all-in pricing of 233.4bp. Source: Thomson Reuters SDC Code: S10b Source: Thomson Reuters SDC Code: C1L

26 International Financing Review Asia October 7 2017

1012_06 Country01.indd 26 06/10/2017 21:43:44 COUNTRY REPORT INDONESIA

on a Rs5bn pre-IPO placement, which, if ››SEVEN ISLANDS FILES IPO DRAFT BNP, HSBC, Mizuho and SMBC were the successful, would result in a reduction in MLABs on that financing, offering a top- the IPO size. SEVEN ISLANDS SHIPPING has filed a draft level all-ins of 185bp for the offshore The renewable energy company had prospectus for its IPO of Rs4.5bn targeted piece and 210bp for the onshore portion, initially considered selling an infrastructure for early next year. based on margins of 160bp and 185bp investment trust (InvIT) IPO, but the weak The seaborne logistics company has said over Libor, respectively. The average life listing of the IRB InvIT Fund and India Grid it will sell primary shares for Rs2bn and is 3.85 years. Trust, the two listed InvITs, prompted it to secondary shares for Rs2.5bn. Shareholders In April, the borrower sold US$625m go for a regular IPO. Wayzata III Indian Ocean, Thomas Wilfred of seven-year bonds, IFRAsia reported. Acme registered a net profit of Rs7.18m Pinto and Leena Metylda Pinto are vendors Proceeds from the notes, priced at par to for the financial year to March 31 2017, a of the secondary shares. yield 4.45%, were used to refinance part of turnaround from a loss of Rs24.5m in 2016. The proceeds will be used to buy VLCC the March 2016 loan, as well as for capital (very large crude carrier) vessels. SIS expenditure. BNP, Citigroup and UBS were ››APOLLO TYRES SELLS 63M SHARES operates primarily along the Indian coast, the joint global coordinators. in the Arabian Gulf and South-East Asia. In May, S&P upgraded Saka Energi’s APOLLO TYRES has raised Rs15bn through the Edelweiss Financial is the bookrunner. credit rating to BB+ from BB, with a stable sale to institutions of 63.03m shares at outlook. Rs238 each, representing a 2.5% discount to The borrower is a unit of Perusahaan the pre-deal close of Rs244.15. Gas Negara, Indonesia’s largest natural gas The tyre-maker’s sale involved a base transportation and distribution company. deal of Rs12bn, or 50.42m shares, with an INDONESIA upsize option for Rs3bn, or 12.61m shares, which was exercised in full. EQUITY CAPITAL MARKETS Around 40 accounts participated in the SYNDICATED LOANS sale. Domestic institutions were allocated ››GARUDA FOOD WORKS ON IPO 40% of the shares and foreigners got the ››SAKA LOAN SYNDICATION CLOSES rest. JM Financial, Kotak and UBS were GARUDA FOOD GROUP plans a US$100m–$200m bookrunners. General syndication of SAKA ENERGI IPO next year and is in the process of hiring INDONESIA’s US$250m five-year loan has banks for it, a person with knowledge of ››LEMON TREE PREMARKETS IPO closed with around seven to eight banks the process has said. participating. Garuda Food’s businesses include making LEMON TREE HOTELS has started premarketing BNP Paribas, Citigroup, DBS Bank, HSBC, and distributing snacks and beverages, a Rs9.5bn–Rs13bn IPO and plans to open Mizuho Bank and Sumitomo Mitsui Banking but it has not taken a final decision on the books in early November. Corp were the mandated lead arrangers and assets to put under the IPO. The Indian hotel chain’s float will bookrunners on the loan, paying a top-level Formed in 1990, the food and beverage involve 196m secondary shares, or 24.9% all-in prices of 136.3bp and 151.3bp for the company sells peanuts under the Kacang of its enlarged equity capital. Shareholders offshore and onshore portions, based on Garuda brand, biscuits under the Gery Maplewood Investment, Ravi Kant Jaipuria, interest margins of 128bp and 143bp over brand, jelly products under the Okky and Citron, Swift Builders and Five Star Libor, respectively. The average life is three Keffy brands and Leo brand chips. Hospitality are among the vendors of the years. In 2011, it formed a subsidiary with the shares. The loan is in the documentation stage non-alcohol division of Japan’s Suntory Citic CLSA, JP Morgan and Kotak are joint and its size will not be increased. Beverage to develop its beverage business global coordinators and joint bookrunners The facility refinances part of the and, in 2012, it established Garuda Polyflex, on the IPO. Yes Securities is also a joint US$600m five-year debut loan the oil-and- a joint venture with Polyflex India to bookrunner. gas company obtained in March 2016. manufacture chocolate sticks.

Top bookrunners of Indonesian rupiah bonds Top bookrunners of Indonesia syndicated loans Indonesia global equity and equity-related 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues Rp(m) % Name Deals US$(m) % Name Issues US$(m) % 1 Bank Mandiri 36 16,357,696.7 12.9 1 MUFG 6 851.4 12.2 1 Bank Mandiri 5 219.2 15.1 2 Danareksa 32 15,572,370.4 12.3 2 Bank Mandiri 4 637.4 9.1 2 Credit Suisse 3 187.2 12.9 3 BCA Sekuritas 30 14,775,263.7 11.6 3 CCB 1 520.0 7.4 3 Citic 3 137.9 9.5 4 Bahana Sec 27 13,269,672.1 10.4 4 OCBC 4 399.7 5.7 4* Deutsche 2 125.0 8.6 5 Indo Premier Sec 34 10,442,242.5 8.2 5 Bank Negara Indonesia 2 376.8 5.4 4* BNP Paribas 2 125.0 8.6 6 DBS 26 10,002,710.8 7.9 6 Bank Central Asia 2 360.9 5.2 6* DBS 2 70.3 4.8 7 CIMB Group 24 9,997,208.3 7.9 7 Maybank 3 335.8 4.8 6* BCA Sekuritas 2 70.3 4.8 8 Bank Negara Indonesia 14 6,148,912.5 4.8 8 Credit Suisse 2 332.0 4.7 8 Trimegah Sec 3 67.8 4.7 9 RHB 12 4,977,858.3 3.9 9 CTBC Financial 4 328.0 4.7 9* Morgan Stanley 1 62.1 4.3 10 Trimegah Sec 12 4,779,234.6 3.8 10 Standard Chartered 4 317.9 4.5 9* UBS 1 62.1 4.3 Total 113 127,090,907.2 Total 23 7,004.4 9* Citigroup 1 62.1 4.3

*Market volume Based on market of syndication and market total Total 23 1,453.9

Proportional credit Proportional credit Source: Thomson Reuters SDC Code: AS9 Source: Thomson Reuters SDC Code: S11b Source: Thomson Reuters

International Financing Review Asia October 7 2017 27

1012_06 Country01.indd 27 06/10/2017 21:43:44 IFRAsia.com We’ve updated IFRAsia.com to make it easier to navigate and easier to access on the move.

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A THOMSON REUTERS SERVICE COUNTRY REPORT JAPAN

Sona Koyo Steering Systems. year to September 30 2020, the Tokyo Stock The JBIC said the auto-parts maker would Exchange-listed real estate investment trust JAPAN pay Rs8.405bn (US$129m) for the stake said last Friday. increase in the Indian steering systems Mitsubishi UFJ Financial Group arranged the maker with a two-step loan via Mitsubishi original loan in May 2016. Mitsubishi UFJ DEBT CAPITAL MARKETS UFJ Financial Group. Trust & Banking and Sumitomo Mitsui Trust The borrower last tapped the syndicated Bank joined that loan in syndication. › SMFG PRINTS GREEN EURO FIRST loan market on September 26 for a ¥43bn Tenors could range from one month to (US$380.4m) one-year revolving credit from five years when drawn. SUMITOMO MITSUI FINANCIAL GROUP priced on MUFG, Resona Bank, Sumitomo Mitsui Funds are for refinancing, as well as for Wednesday €500m (US$585m) of seven-year Banking Corp and Sumitomo Mitsui Trust acquisitions and real-estate maintenance senior unsecured Green bonds at mid-swaps Bank. projects. plus 41bp. Books peaked at close to €1.7bn for the › DUO BACKS BAIN'S ASATSU-DK LBO › AKITA RAISES WIND-POWER FUNDS first Green euro currency trade from a Japanese private-sector issuer. Two banks have agreed to provide a Akita Bank said on September 29 it arranged Initial price thoughts were mid-swaps ¥104.766bn loan for Bain Capital’s a ¥14bn loan for KK A-WIND ENERGY to develop plus 55bp-60bp, before guidance was ¥152.342bn leveraged buyout of Japanese 40-megawatt wind-power plants in Akita released at plus 45bp area. Final pricing advertising agency Asatsu-DK, according prefecture. came flat to the secondary curve, and the to a filing on Tuesday to the Tokyo Stock The Bank was arranger, as well as agent, offering was said to have drawn interest Exchange from the US private-equity while Sumitomo Mitsui Trust Bank came in as from Green and environmentally and firm’s special-purpose vehicle. joint arranger. Joining in syndication were socially responsible investors. Mitsubishi UFJ Financial Group and Mizuho 77 Bank, Akita Kenshin, Akita Shinkin Bank, The notes have expected ratings of A1/A– Bank are providing ¥52.383bn each in Aomori Bank, Bank of Iwate, Toho Bank, Ugo (Moody’s/S&P). three-year bullet term loans, while Bain is Shinkin Bank and Yamagata Bank. “Green bonds are nothing new in Japan, contributing ¥56.716bn in equity. The LBO, The borrower, which local companies but, this year, all of a sudden, they are including fees, costs ¥161.442bn. and financial institutions, including Akita really popular,” said a market source. On Tuesday, BCPE MADISON CAYMAN LP, Bain’s Bank, established, will build 17 wind “Public and private-sector issuers are SPV, launched an offer of ¥3,660 per share turbines in Akita prefecture’s Katagami city. looking at Green bonds.” to Asatsu-DK’s existing owners, including The project, costing an estimated Mizuho Financial Group has also WPP Group, the world’s largest advertising ¥15.6bn, is expected to start commercial mandated banks for proposed Green euro group, which agreed to sell its 24.96% stake. operations in December 2019. currency bonds. The offer ends on November 15. Bank of America Merrill Lynch was Green The buyout will be cancelled if Bain failed structuring agent for the SMFG trade. It was to buy a stake larger than 50.1%. The PE firm EQUITY CAPITAL MARKETS also joint bookrunner with Credit Agricole plans to delist Japan’s third-largest advertising and SMBC Nikko. agency on completion of the LBO. › INVINCIBLE INVESTMENT RAISES ¥41BN The buyout is Bain’s second in recent weeks. It leads a consortium raising loans of INVINCIBLE INVESTMENT has raised around SYNDICATED LOANS ¥600bn to fund partially the ¥2trn acquisition ¥41bn (US$363m) from an offering of of the memory-chip business of Toshiba Corp. units, priced at the top of the range, › JTEKT GETS FUNDS TO LIFT STAKE according to a statement from the › JRF EXTENDS COMMITMENT LINE Japanese REIT. Osaka-based JTEKT CORP signed a US$53.5m The offering comprised 887,959 new loan with Japan Bank for International JAPAN RETAIL FUND INVESTMENT CORP extended the units, plus a greenshoe of 44,398 secondary Cooperation on September 29 to increase tenor of a ¥50bn commitment line by one units, at a price of ¥44,118, or a 2.5% to 70.5% from 20.1% its stake in India’s

Japan bonds in Yen Japan global equity, equity-related Japan samurai bonds excluding ABS/MBS 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues ¥(m) % Name Issues US(m) % Name Issues ¥(m) % 1 Mizuho 530 4,233,526.1 24.4 1 Nomura 56 8,096.9 21.8 1 Mizuho 25 263,576.7 24.3 2 Morgan Stanley 425 3,144,727.7 18.2 2 Daiwa Sec Group 33 5,816.8 15.6 2 SMFG 28 257,576.7 23.7 3 SMFG 421 2,789,806.5 16.1 3 Morgan Stanley 24 4,831.7 13.0 3 Morgan Stanley 21 197,703.3 18.2 4 Nomura 396 2,720,615.1 15.7 4 Mizuho 35 4,811.3 12.9 4 Nomura 17 145,290.0 13.4 5 Daiwa Sec Group 384 2,385,881.3 13.8 5 SMFG 45 4,015.1 10.8 5 Daiwa Sec Group 18 123,576.7 11.4 6 Sumitomo Mitsui Trust 6 316,578.1 1.8 6 Goldman Sachs 9 3,983.4 10.7 6 Natixis 7 40,160.0 3.7 7 Goldman Sachs 39 280,049.8 1.6 7 BAML 7 1,526.8 4.1 7 Credit Agricole 5 33,983.3 3.1 8 MUFG 22 270,626.8 1.6 8 JP Morgan 5 1,209.3 3.3 8 Societe Generale 2 16,000.0 1.5 9 BAML 13 255,413.4 1.5 9 UBS 7 844.2 2.3 9 BNP Paribas 2 8,433.3 0.8 10 Tokai Tokyo Financial 41 135,838.7 0.8 10 Deutsche 2 258.5 0.7 Total 30 1,086,300.0 Total 913 17,329,105.2 Total 161 37,225.0

Source: Thomson Reuters SDC Code: AP1 Source: Thomson Reuters SDC Code: AP5 Source: Thomson Reuters SDC Code: C1e

International Financing Review Asia October 7 2017 29 BFCM issues its largest Samurai

„ Bonds French bank feeds Japanese investor demand for senior preferred bonds

BANQUE FEDERATIVE DU CREDIT MUTUEL sold guidance yet on the risk weighting of TLAC to sell ¥36.6bn of five-year, ¥70.3bn of seven- ¥127.1bn (US$1.13bn) of Samurai bonds last bonds. year and ¥14.3bn of 10-year notes. week, its largest issue since its market debut BFCM’s ¥26.3bn five-year piece priced This year, the 0.20% line was critical for in July 2011. with a 0.217% coupon to provide a spread of the five-year piece, as has been the case in BFCM chose maturities of five, seven and 6bp over yen-offer side swaps. The ¥81.6bn recent deals. BPCE and Credit Agricole, both 10 years, a familiar mix since 2014, and stuck seven-year paper carries a 0.384% coupon of which had priced five-year senior notes to the senior preferred format – in contrast to to provide a 17bp spread over swaps. The in June, had 0.214% and 0.202% coupons, other recent senior non-preferred deals from ¥19.2bn 10-year notes have a 0.51% coupon respectively. European lenders. to provide a 20bp spread over swaps. The main buyers of the five-year notes The leads said senior preferred bonds Marketing began officially last Monday were specialised banks, which could not buy had been in short supply in Japan, allowing at respective price guidance of 5bp–7bp, longer than five years or chose not to buy the French bank to draw ample demand, 15bp–20bp and 19bp–21bp over swaps, senior non-preferred paper. especially from risk-averse specialised banks and these narrowed to 6bp, 16bp–18bp and BFCM chose not to price the seven-year and regional investors. 20bp on the following day. The range on the paper at the tightest end of the initial More than half of the Samurai bonds seven-year piece narrowed further to 17bp on guidance, in order to attract top investors. sold by other French banks this year year Wednesday. Big domestic banks were the main buyers were senior non-preferred notes, which The issuer could have raised funds at much as a result, followed by asset managers count towards their total loss-absorbing cheaper levels in euros or dollars, taking and others. The 10-year drew demand from capacity (TLAC) requirements but carry swap costs into account, but paid extra to shinkin banks and life insurers. additional risk for investors. Some issue in yen, underlining its commitment to Daiwa, Mizuho Sec and Nomura were lead Japanese investors are concerned about issuing Samurai bonds every year. managers for the Aa3/A/A+ (Moody’s/S&P/ the risk-weight treatment of non-preferred BFCM has sold Samurai bonds every year Fitch) deal. notes since there has been no official since 2011 and last visited on October 7 2016 TAKAHIRO OKAMOTO

discount to the October 4 close. The subsidiary and prevent itself from being the sale of 58m shares, or a 3.5% stake, offeringl was marketed with an indicative delisted, Reuters said. in MALAYSIA AIRPORTS HOLDINGS at the bottom discount range of 2.5%–5%. of a MS$8.20–$8.52 range, according The international offering made up to two persons with knowledge of the 40% of the deal and the domestic portion transaction. represented 60%. There is a 90-day lock-up The final price represents a 3.8% discount on the issuer and entities involved in MALAYSIA to the pre-deal close of M$8.52. MAH shares the provision of secondary units for the closed 2.6% lower at M$8.30 last Wednesday greenshoe. on Bursa Malaysia. Proceeds will be used partly to finance DEBT CAPITAL MARKETS After the sale, Khazanah’s interest in the purchase of six hotels. MAH was reduced to 33.2%. Mizuho, SMBC Nikko and Nomura are joint › ALLIANCE BANK FILES FOR AT1S Around 30 accounts participated in the global coordinators. All three are also joint sale, which was well covered. The top five bookrunners and joint lead managers along ALLIANCE BANK MALAYSIA has registered with the investors, mostly local institutions, got 55% with Citigroup and Morgan Stanley. Securities Commission of Malaysia a M$1bn of the shares. (US$237m) Additional Tier 1 issuance Credit Suisse and Maybank were the › BAIN PLANS TO LIST TOSHIBA CHIP UNIT programme on which Alliance Investment bookrunners. Bank is principal adviser and lead arranger. Bain Capital plans a Tokyo Stock Exchange RAM assigned a BBB1 rating to the listing for Toshiba’s chip unit within a few proposed securities, which would absorb years, according to a Reuters report, citing losses in a non-viability event or if Alliance Bain. Bank’s Common Equity Tier 1 ratio fell PHILIPPINES The private-equity firm led a consortium below 5.125%. that acquired the chip business, named The bank reported a CET1 ratio of 11.1% TOSHIBA MEMORY CORP, for US$18bn and has as at end-June. DEBT CAPITAL MARKETS now outlined plans to float the business, which it will exit when it goes public. › UBP WORKS ON EMTN PROGRAMME Bain’s fellow consortium members include EQUITY CAPITAL MARKETS Apple, Dell Technologies Capital, Kingston UNION BANK OF THE PHILIPPINES said its board of Technology, Seagate and SK Hynix. › KHAZANAH SELLS MAH SHARES directors had approved the establishment Embattled Toshiba planned to use the of a euro MTN programme of up to US$1bn. funds raised from the sale to fill a balance State-owned investment firm Khazanah UBP, part of the Aboitiz group, made its sheet gap left by its bankrupt US nuclear Nasional raised M$476m (US$112m) from offshore debut in 2004 to sell US$200m

30 International Financing Review Asia October 7 2017 COUNTRY REPORT SINGAPORE

Top bookrunners of all Malaysian ringgit bonds Top bookrunners of Malaysia syndicated loans Malaysia global equity and equity-related 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues M$(m) % Name Deals US$(m) % Name Issues US$(m) % 1 CIMB Group 47 21,643.0 30.0 1 Standard Chartered 3 847.1 36.8 1 CIMB Group 7 574.4 17.8 2 Maybank 51 16,554.8 22.9 2 CIMB Group 1 281.9 12.2 2 Credit Suisse 3 556.0 17.2 3 AMMB 31 11,213.3 15.5 3* Deutsche 1 273.1 11.9 3 RHB 19 262.7 8.1 4 RHB 29 8,968.1 12.4 3* BNP Paribas 1 273.1 11.9 4 Maybank 6 254.9 7.9 5 Affin 10 3,743.8 5.2 5 OCBC 1 185.0 8.0 5 JP Morgan 2 225.8 7.0 6 Hong Leong Financial 11 3,253.5 4.5 6 DBS 1 162.1 7.0 6 Morgan Stanley 1 203.5 6.3 7 K&N Kenanga 17 1,651.8 2.3 7 Maybank 1 122.1 5.3 7* Nomura 1 159.2 4.9 8 Bank Islam Malaysia 2 1,164.3 1.6 8 AMMB 1 80.5 3.5 7* HSBC 1 159.2 4.9 9 OCBC 4 1,027.6 1.4 9 Mizuho 1 80.0 3.5 9 AMMB 3 151.8 4.7 10 HSBC 6 1,016.7 1.4 Total 8 2,304.8 10 Affin 5 105.9 3.3

Total 141 72,272.0 * Based on market of syndication and market total Total 111 3,228.1

*Market volume Proportional credit

Proportional credit Source: Thomson Reuters SDC Code: S14b Source: Thomson Reuters Source: Thomson Reuters SDC Code: AS8

Top bookrunners of all Philippine peso bonds Philippines global equity and equity-related Top bookrunners of New Zealand syndicated loans 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues Ps(m) % Name Issues US$(m) % Name Deals US$(m) % 1 BDO Unibank 7 25,782.1 17.3 1 UBS 2 389.4 26.6 1 ANZ 10 2,210.1 46.9 2 China Banking 7 21,323.8 14.3 2 BDO Unibank 3 215.0 14.7 2 NAB 6 1,470.2 31.2 3 BPI 8 20,964.5 14.0 3 Goldman Sachs 2 208.0 14.2 3 Westpac 6 418.9 8.9 4 Standard Chartered 4 18,871.8 12.6 4* Credit Suisse 1 133.5 9.1 4 CBA 2 364.3 7.7 5 ING 4 12,306.3 8.2 4* Citigroup 1 133.5 9.1 5 Citigroup 1 245.6 5.2 6 Security Bank 4 10,190.5 6.8 4* HSBC 1 133.5 9.1 Total 25 4,709.1 7 Philippine National 3 7,666.7 5.1 7 Metropolitan B&T 1 70.1 4.8 * Based on market of syndication and market total 8 RCBC 3 6,948.8 4.7 8* Philippine National 1 50.2 3.4 Proportional credit 9 Metropolitan B&T 3 6,333.3 4.2 8* China Banking 1 50.2 3.4 Source: Thomson Reuters SDC Code: S13b 10 Deutsche 1 5,900.0 4.0 8* Security Bank 1 50.2 3.4 Total 19 149,301.3 Total 7 1,462.7

*Market volume

of five-year senior bonds, but has nothing Proportional credit Source: Thomson Reuters outstanding. Source: Thomson Reuters SDC Code: AS10 Philippine peer BDO Unibank, rated Baa2 (Moody’s), has outstanding March 2023 time, for working capital and general bonds, which were quoted at Treasuries Top bookrunners of Philippines syndicated loans corporate purposes in Japan, Genting has plus 118bp on Monday. 1/1/17 – 30/9/17 said. Amount In addition to the casino-legalising bill, Name Deals US$(m) % additional rules are still needed, setting out 1* CTBC Financial 2 221.2 14.6 details on regulations and also dealing with 1* ANZ 2 221.2 14.6 gambling addiction. The legislation was SINGAPORE 3 Standard Chartered 2 182.9 12.1 scheduled to be on the agenda when the 4* CCB 1 142.9 9.4 extraordinary Diet session started. 4* SMFG 1 142.9 9.4 However, deliberation on the legislation DEBT CAPITAL MARKETS 4* Cathay Financial 1 142.9 9.4 has been put off for now after Prime Minister 4* Bank of China 1 142.9 9.4 Shinzo Abe dissolved the lower house late ››GENTING READIES SAMURAI DEBUT 8 Mizuho 2 136.0 9.0 last month to call a snap election. 9 Fubon Financial 1 78.3 5.2 In a press release, Genting Singapore, GENTING SINGAPORE mandated SMBC Nikko last 10 BDO Unibank 1 68.2 4.5 rated A3/A- (Moody’s/Fitch), says R&I is week for an inaugural offering of three- Total 6 1,515.2 expected to assign the bonds a rating of A. tranche Samurai bonds later this month. * Based on market of syndication and market total The strength of Japanese investor demand According to the document filed to the Proportional credit for casino bonds remains to be seen, but Kanto Local Finance Bureau last Monday, Source: Thomson Reuters SDC Code: S15b the credit ratings are expected to help. the operator of Singapore’s Resorts World This will mark Genting Singapore’s debut casino resort is looking at maturities of in the Samurai market. three, five and seven years. a bill legalising casinos and Genting However, depending on the demand, one Singapore is expected to be among those ››MERGED GROUP EYES DOLLAR T2 or two of the tranches may be dropped. The bidding for a licence. Last month, it bonds are expected to price around mid- established a branch office in Tokyo. STANDARD LIFE ABERDEEN, rated A3/A (Moody’s/ October. The Japan branch will use the bond S&P), has hired banks for a proposed Reg S In December, Japan’s parliament passed proceeds, when necessary from time to offering of US dollar benchmark 30.5-year

International Financing Review Asia October 7 2017 31

1012_07 Country02.indd 31 06/10/2017 21:43:11 Ezion proposes restructuring options

„ Restructuring Oil-rig and support-boat company talks about terming out debt by six to 10 years

EZION HOLDINGS is talking to a strategic investor holders of the series 003 to 007 and owning funding-backed notes due 2020. Ezion will about restructuring its debt of US$1.98bn, a perpetual notes in series 008. hold a second informal meeting on October key proposal of which is to term it out by six The former group comprises investors 19 with holders of those notes. The Securities to 10 years. holding S$110m of 4.7% 2019s, S$60m of Investors Association (Singapore) will Details of Ezion’s debt-restructuring 4.6% 2018s, S$50m of 4.85% 2019s, S$55m facilitate and moderate the meeting. plans were released at last Monday’s second of 5.1% 2020s and S$150m of 4.875% 2021s. Ezion emphasised that the options would informal bondholders’ meeting. The cash- Investors in this group have two options – not result in any haircut, but would reduce its strapped oil-rig and support-boat company convert the bonds into a Series A or Series B. debt to a sustainable level and give it room has US$1.3bn of secured debt, US$568m of Series A comprise seven-year bonds, carrying and flexibility to move out of a trough. unsecured debt, including senior bonds, and a coupon of 0.25%, with full redemption at The refinancing proposal will dilute US$116m of perpetual notes. maturity plus a redemption premium of 5%. existing shareholders by up to 47.5%. The unidentified strategic investor had Series B comprise six-year notes, carrying Shareholders, who took part in a S$137m indicated it would wait for the completion of a similar coupon of 0.25%, but allowing rights issue in July last year, will also be the debt restructuring before entering formal investors to convert them into shares during asked to support an offering of non-tradable talks, Ezion said. the first five years. warrants to raise more funds. Bank lenders have been asked for a There are also two options for holders The company said it was still viable, minimal fixed principal repayment schedule of the series 8 made up of $150m of 7% despite falling revenue due to reduced over the next six years, together with a subordinated perpetual notes. Series C will charter and utilisation rates in a protracted substantial drop in interest rates, which will see investors holding 10-year notes, with a downturn in the oil industry. save the company interest costs of up to 0.25% coupon, which will redeem in full with It generated revenue of US$136m in the US$30m. a redemption premium of 5%. Series D will first half of this year with cashflow from Ezion is also seeking an additional working feature undated notes, with a 0.25% coupon operations still positive. However, the capital facility of up to US$100m. Approval and a conversion option over the first three cashflow of US$170m is inadequate to meet from banks is conditional on its getting years. financial obligations and capital expenditure, majority consent from the bondholders. There is no mention of a proposal for resulting in a net outflow of US$207m. There are two separate options for holders of S$120m 3.65% DBS-committed KIT YIN BOEY

non-call 10.5 Tier 2 bonds. Baa1(hyb)/BBB+ (Moody’s/S&P). recognises the stronger business profile Bank of America Merrill Lynch, BNP Paribas, Moody’s on October 2 upgraded the of Standard Life Aberdeen through larger Citigroup, HSBC and Societe Generale are joint company’s long-term issuer rating to A3 scale, a broader product offering and lead managers. BAML and Citigroup are from Baa1 and its subordinated rating to enhanced distribution. structuring advisers. Baa1(hyb) from Baa2(hyb) following the The European asset management group merger of Standard Life and Aberdeen Asset › CITIC ENVIROTECH PLANS PERP held investor calls on October 5–6 and will Management. The outlook was changed to meet investors in London, Singapore and stable from rating under review. CITIC ENVIROTECH hired banks to arrange Hong Kong on Monday and Tuesday. The agency has said the upgrade investor meetings ahead of a proposed The bonds are expected to be rated

Top bookrunners of all Singapore dollar bonds Top bookrunners of all Singapore dollar Top bookrunners of all Singapore dollar bonds (non-domestic) bonds (domestic) 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues S$(m) % Name Issues S$(m) % Name Issues S$(m) % 1 DBS 50 5,784.1 32.4 1 HSBC 5 1,420.0 37.6 1 DBS 43 5,004.1 35.5 2 OCBC 34 3,916.1 21.9 2 DBS 7 780.0 20.7 2 OCBC 29 3,478.6 24.7 3 HSBC 15 3,066.7 17.2 3* Standard Chartered 4 437.5 11.6 3 HSBC 10 1,646.7 11.7 4 Standard Chartered 16 1,696.0 9.5 3* OCBC 5 437.5 11.6 4 UOB 12 1,260.7 9.0 5 UOB 16 1,564.7 8.8 5 UOB 4 304.0 8.1 5 Standard Chartered 12 1,258.5 8.9 6 RHB 2 370.0 2.1 6 BNP Paribas 2 137.5 3.6 6 RHB 2 370.0 2.6 7 Credit Suisse 3 329.2 1.8 7 Commerzbank 1 125.0 3.3 7 Credit Suisse 3 329.2 2.3 8 CIMB Group 5 300.0 1.7 8 LBBW 1 75.0 2.0 8 CIMB Group 4 255.0 1.8 9 ANZ 2 237.5 1.3 9 CIMB Group 1 45.0 1.2 9 ANZ 2 237.5 1.7 10 Bank of China 1 180.0 1.0 10 Goldman Sachs 1 14.0 0.4 10 Bank of China 1 180.0 1.3 Total 82 17,855.6 Total 15 3,775.5 Total 67 14,080.1 *Market volume *Market volume *Market volume

Proportional credit Proportional credit Proportional credit Source: Thomson Reuters SDC Code: AS12 Source: Thomson Reuters SDC Code: AS14 Source: Thomson Reuters SDC Code: AS15

32 International Financing Review Asia October 7 2017 COUNTRY REPORT SINGAPORE

Top bookrunners of Singapore syndicated loans Singapore global equity and equity-related › FCL GETS REDEMPTION CONSENT 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount FRASERS CENTREPOINT received overwhelming Name Deals US$(m) % Name Issues US$(m) % consent from holders of its bonds due 1 Maybank 5 1,719.8 14.5 1 DBS 10 832.5 24.6 in 2019 and 2022, worth a combined 2 DBS 7 999.4 8.4 2 HSBC 4 353.3 10.4 S$125m. 3 ANZ 7 669.0 5.6 3 UBS 2 317.8 9.4 The Singapore-listed property company 4 Bank of China 4 601.2 5.1 4 Citigroup 2 299.5 8.9 said it received sell-back offers for 5 HSBC 5 588.6 5.0 5 UOB 6 295.8 8.7 S$67.75m, or 90.33% of the S$75m 3.7% 6 ING 5 588.1 5.0 6 BAML 2 240.5 7.1 notes due 2019 (series 1), as well as for 7 ABN AMRO 4 582.0 4.9 7 OCBC 2 218.2 6.4 S$47.75m or 95.5% of the S$50m 3.8% notes 8 Rabobank 4 546.9 4.6 8 Morgan Stanley 1 212.0 6.3 due 2022 (series 2). 9 Societe Generale 4 447.0 3.8 9 BNP Paribas 1 158.5 4.7 It exercised a call option to redeem the 10 OCBC 3 417.1 3.5 10 Maybank 2 36.8 1.1 outstanding 2019 and 2020 bonds that were Total 29 11,883.4 Total 38 3,385.1 not tendered. * Based on market of syndication and market total The company launched the consent Proportional credit Source: Thomson Reuters solicitation and repurchase offer on Source: Thomson Reuters SDC Code: S16b September 18. It invited investors to sell for cash at 102.85, or S$257,125 for each lot of S$250,000 in principal amount of Top bookrunners of all South Korea Won bonds Top bookrunners of South Korea syndicated loans series 1, and at 104.60, or S$261,500 of 1/1/17 – 30/9/17 1/1/17 – 30/9/17 series 2. Amount Amount OCBC was dealer manager for the Name Issues Won(m) % Name Deals US$(m) % process. 1 KB Financial 453 21,754,968.0 17.2 1 KDB 12 2,114.7 78.3 2 Mirae Asset Daewoo 332 12,610,039.0 10.0 2 KB Financial 1 283.3 10.5 › GSH PRINTS THREE-YEAR 3 Kyobo Life 182 12,454,615.0 9.9 3 DBS 1 160.0 5.9 4 NH Inv & Sec 207 10,460,096.0 8.3 4* Samsung Sec 1 47.3 1.8 Property developer GSH priced on Thursday 5 Korea Investment 317 10,111,535.0 8.0 4* NH Inv & Sec 1 47.3 1.8 S$70m of three-year senior bonds at par to 6 Hana Financial 66 7,473,317.0 5.9 4* Mirae Asset Daewoo 1 47.3 1.8 yield 5.15%, versus initial guidance of 5.35% 7 Dongbu Sec 182 7,236,669.2 5.7 Total 14 2,699.9 area. 8 SK Sec 115 5,545,000.0 4.4 * Based on market of syndication and market total The notes will be issued off a S$800m 9 Samsung Sec 51 5,211,432.0 4.1 Proportional credit multi-currency MTN programme. 10 Hanwha Inv & Sec 157 3,195,378.0 2.5 Source: Thomson Reuters SDC Code: S17b DBS was sole bookrunner. Total 3,517 126,218,581.5 Proceeds will be used for general *Market volume corporate purposes, including refinancing Proportional credit Last week, Citic Envirotech doubled of borrowings, financing investments, Source: Thomson Reuters SDC Code: AS22 the size of its multicurrency perpetual general working capital and capital securities issuance programme to US$1.5bn expenditure. from US$750m. South Korea global equity and equity-related The Singapore-based water-treatment › VIBRANT ADDS TO 2020 LINE 1/1/17 – 30/9/17 company is part of China’s Citic Group. It Amount has US$355m of unrated perpetual bonds Vibrant Group reopened its 7.5% senior Name Issues US$(m) % callable on November 27 2018. unsecured 2020 notes for a S$36.5m tap, 1 NH Inv & Sec 15 2,729.2 20.4 priced at par and in line with earlier 2 Korea Investment 17 1,359.7 10.2 › SIA REOPENS 2026 LINE guidance. 3 Mirae Asset Daewoo 16 1,025.6 7.7 The unrated Reg S notes mature on 4 Goldman Sachs 4 910.2 6.8 SINGAPORE AIRLINES reopened last Friday October 3 2020. 5 JP Morgan 4 760.2 5.7 its S$300m (US$220m) 3.13% bonds The reopening brings the total 6 Samsung Sec 7 720.1 5.4 due November 17 2026, through sole outstanding to S$66m, of which parties 7 Citigroup 4 702.3 5.3 bookrunner DBS Bank. related to the issuer hold around 31%, 8 Shinhan Financial 8 601.4 4.5 Guidance was at a cash price of 101.5, according to Vibrant. 9 Morgan Stanley 2 535.3 4.0 implying a yield of 2.941%. The deal had not The reopening was said to be strongly 10 SK Sec 2 476.5 3.6 priced at time of going to press. anchored and there was a 25-cent rebate for Total 120 13,379.6 The issuer and the bonds are unrated. private-bank orders. DBS and UOB were joint bookrunners. Source: Thomson Reuters SDC Code: C1Q › KOH BROTHERS CHANGES ARRANGER Settlement is on Tuesday. Vibrant is a Singapore-listed freight- offering of Reg S senior perpetual securities KOH BROTHERS GROUP said DBS had replaced forwarding company. denominated in either US dollars or HSBC as arranger and dealer of its S$250m Singapore dollars. multi-currency MTN programme after the › MAXI-CASH ADDS S$20M TO 2020S DBS is sole global coordinator, as well as latter resigned. joint bookrunner with Barclays and CLSA. Last month, the Singapore construction MAXI-CASH FINANCIAL SERVICES CORP last Monday Investor meetings kicked off in Singapore company completed a tender offer for its priced a S$20m tap of its existing 5.5% and Hong Kong on October 6. 2018 bonds. bonds due 2020 at 100.7.

International Financing Review Asia October 7 2017 33 Top bookrunners of all Taiwan dollar bonds Top bookrunners of Taiwan syndicated loans Taiwan global equity and equity-related 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues NT$(m) % Name Deals US$(m) % Name Issues US$(m) % 1 Yuanta Financial 22 92,025.0 33.1 1 Bank of Taiwan 32 3,061.9 18.9 1 Fubon Financial 15 509.7 15.0 2 KGI Financial 16 54,525.0 19.6 2 Taiwan Cooperative 28 2,027.0 12.5 2 Citigroup 2 441.6 13.0 3 Masterlink Sec 13 38,425.0 13.8 3 Mega Financial 23 1,873.4 11.6 3 KGI Financial 18 435.1 12.8 4 Capital Sec 6 31,500.0 11.3 4 Land Bank of Taiwan 21 1,678.1 10.4 4 Yuanta Financial 8 357.0 10.5 5 Cathay Financial 3 21,975.0 7.9 5 Fubon Financial 17 1,657.4 10.2 5 Nomura 2 283.8 8.4 6 Sinopac Holdings 4 13,050.0 4.7 6 Taishin International 10 840.2 5.2 6 Sinopac Holdings 8 229.2 6.7 7 Taiwan Cooperative 9 6,810.0 2.5 7 Chang Hwa Commercial 11 835.6 5.2 7* DBS 2 215.9 6.4 8 Fubon Financial 2 6,800.0 2.5 8 CTBC Financial 8 624.2 3.9 7* UBS 2 215.9 6.4 9 Taiwan Financial 2 5,500.0 2.0 9 Taiwan Business Bank 15 590.6 3.6 9 Taishin Financial 13 122.1 3.6 10 First Taisec Sec 1 3,300.0 1.2 10 Hua Nan Financial 13 581.9 3.6 10 Grand Fortune Sec 7 64.6 1.9 Total 67 278,010.0 Total 103 16,217.1 Total 111 3,399.4

*Market volume * Based on market of syndication and market total

Proportional credit Proportional credit Source: Thomson Reuters Source: Thomson Reuters SDC Code: AS11 Source: Thomson Reuters SDC Code: S19b Around 15 investors participated in the The Singapore owner of a chain of 2017,” the Singapore-listed company said in sale and allocation was skewed towards a pawnshops had marketed the reopening at a statement last Monday. handful of long-only institutions. 100.5. The original bonds of S$50m, priced In September, chairman Paul Brough at par in April this year, were indicated at told shareholders that the company had › PROPERTYGURU SETS IPO SIGHTS around 101.00. received second-round bids for the business Settlement is on Monday. The additional and expected to announce a deal before the Property portal PROPERTYGURU is likely to bonds will be consolidated with the original end of the month. consider an IPO in two or three years’ ones to form a single series. Proceeds from The company did not give any reason for time, co-founder and vice chairman Steve the tap will be used for general corporate the delay in the sale. Melhuish has said on the sidelines of a purposes, including refinancing or Once Asia’s biggest commodities trading conference in Singapore. repayment of debt. house, Hong Kong-based Noble is slashing Melhuish has not indicated any listing Investors have a put option if a change- jobs and selling assets to shrink debt. venue or the likely size of the IPO. of-shareholding event occurs when major Noble flagged the sale of the capital- Founded in 2006, PropertyGuru is one of owners Koh Wee Seng, Ko Lee Meng and intensive oil liquids business in July after South-East Asia’s leading property portals Koh Lee Hwee cease to control an aggregate agreeing to sell its North American gas and with businesses in Singapore, Thailand, total of more than 50% of Maxi-Cash’s power business to rival Mercuria Group. Malaysia and Indonesia. Last year, it made a issued share capital. Last Monday, it said it had completed the strategic investment in Vietnam’s property DBS was sole lead manager and sale of the gas and power business. portal Batdongsan. bookrunner. Reuters had reported that Mercuria PropertyGuru last raised S$175m from Group, Vitol Group, US-based Castleton TPG, Emtek Group and Square Peg Capital › TEPID RESPONSE TO CW TENDER Commodities International and Freepoint in 2015. Commodities were among the interested Last month, APAC Realty, owner of CW ADVANCED TECHNOLOGIES said it had accepted parties for Noble’s oil business. Singapore’s largest property agency Era for repurchase just S$2.5m of its 2018 Noble previously said North American Realty Network, raised S$58m through a notes under a tender offer, well shy of the lenders to the company had extended the SGX IPO. targeted maximum of S$17m. deadline for a US$2bn credit facility by The Singapore-based industrial machinery three months to January 15. wholesaler paid S$237,500 per S$250,000 in principal amount of its 7% June 25 2018 notes, equivalent to 95% of face value. EQUITY CAPITAL MARKETS TAIWAN DBS was dealer manager for the offer. › JP MORGAN SELLS BLOCK IN SIA UNIT SYNDICATED LOANS RESTRUCTURING JP Morgan sold a block of 38.8m shares in SIA ENGINEERING at the bottom of an indicative › MACRONIX HIRES TWO FOR NT$7BN REFI › NOBLE SETS DISPOSAL DEADLINE range of S$3.11–$3.30, according to a person with knowledge of the transaction. Memory-chip maker MACRONIX INTERNATIONAL NOBLE GROUP expects to sell its oil liquids The US investment bank, which was the hired Bank of Taiwan and Taiwan Cooperative business before the end of December as sole bookrunner on the S$120m (US$88m) Bank as mandated lead arrangers and part of a plan to slim down drastically and trade, had bought the shares from an bookrunners on a NT$7bn (US$231m) focus on its core Asian coal trading business institutional investor. refinancing loan. after a crisis-riddled two years. The final price represented a 10.1% Taiwan Cooperative is also the facility “NGL continues to progress the sale of its discount to the pre-deal close of S$3.46 last agent on the loan, which will be launched global oil liquids business. NGL currently Tuesday. The shares sold represented 3.5% soon. expects the sale of the global oil liquids of the Singapore Airlines Group subsidiary’s The borrower last tapped the market for a business to complete by 31 December equity capital. NT$7.65bn three-year loan in June 2015. Bank

34 International Financing Review Asia October 7 2017 COUNTRY REPORT THAILAND

Top bookrunners of all Thai baht bonds Top bookrunners of Thailand syndicated loans Thailand global equity and equity-related 1/1/17 – 30/9/17 1/1/17 – 30/9/17 1/1/17 – 30/9/17 Amount Amount Amount Name Issues Bt(m) % Name Deals US$(m) % Name Issues US$(m) % 1 Bangkok Bank 40 98,870.8 16.3 1 Siam Commercial 1 724.7 66.1 1 Siam Commercial 5 576.3 22.8 2 Siam Commercial 38 97,776.6 16.1 2 Mizuho 1 160.0 14.6 2 TISCO 4 292.4 11.6 3 Kasikornbank 35 97,471.5 16.0 3 Rabobank 1 139.8 12.8 3 Maybank 4 234.1 9.3 4 Krung Thai 39 93,576.2 15.4 4* Taiwan Cooperative 1 20.4 1.9 4 Kasikornbank 3 227.1 9.0 5 MUFG 17 50,580.2 8.3 4* Taiwan Business Bank 1 20.4 1.9 5 CIMB Group 2 177.1 7.0 6 CIMB Group 23 43,493.3 7.2 4* First Financial 1 20.4 1.9 6 Bualuang Sec 2 162.9 6.5 7 Phatra Sec 11 24,300.0 4.0 7* Kasikornbank 1 5.5 0.5 7 Krung Thai 2 162.6 6.5 8 UOB 17 20,681.8 3.4 7* CTBC Financial 1 5.5 0.5 8 Phatra Sec 2 154.3 6.1 9 Asia Plus Sec 32 18,434.5 3.0 Total 5 1,096.6 9 Thanachart Capital 3 100.9 4.0

10 Globlex Sec 22 8,760.9 1.4 * Based on market of syndication and market total 10 Credit Suisse 1 90.0 3.6

Total 176 607,696.7 Proportional credit Total 25 2,523.0

*Market volume Source: Thomson Reuters SDC Code: S18b

Proportional credit Source: Thomson Reuters Source: Thomson Reuters SDC Code: AS7 Top bookrunners of all Vietnamese dong bonds of Taiwan, Chang Hwa Commercial Bank, 1/1/17 – 30/9/17 Vietnam global equity and equity-related Land Bank of Taiwan, Mega International Amount 1/1/17 – 30/9/17 Commercial Bank and Taiwan Cooperative Name Issues Vnd(m) % Amount were the MLABs of that loan, which offered 1 Techcombank 2 1,500,000.0 Name Issues US$(m) % an interest margin of between 100bp and Total 2 1,500,000.0 1* Deutsche 1 41.6 23.1 150bp over three-month Taibor, based on the *Market volume 1* JP Morgan 1 41.6 23.1 borrower’s pre-tax net profit margin. Proportional credit 1* VCSC 1 41.6 23.1 Source: Thomson Reuters SDC Code: AS25 1* BNP Paribas 1 41.6 23.1 5 Mega Financial 1 14.1 7.8 Part of the proceeds will be used to retire Total 2 180.5 Bt1.794bn of bonds maturing on October 10, THAILAND as well as other debts, while around half will Source: Thomson Reuters be used to invest in infrastructure projects. Laos’ Bt1.5bn of debut three-year bonds approved. DEBT CAPITAL MARKETS matured in May 2016, and a further Bt434m Bangkok Bank, Siam Commercial Bank and of notes were redeemed in December. Thanachart Bank were joint lead arrangers, ››LAOS EXTENDS SOVEREIGN CURVE Financial institutions bought 57.7% of the while Twin Pine Group was adviser. The deal issue, high net-worth investors took 27.8%, settled on October 5. The LAO PEOPLE’S DEMOCRATIC REPUBLIC successfully asset managers booked 13.9%, and others completed its largest and longest bond issue, bought 0.6%. ››GLOBAL POWER SELLS DUAL-TRANCHER with a Bt14bn (US$419m) six-tranche offering As the bonds have a BBB+ from Tris, they in the Thai debt capital markets. also mark the first time an issuer with that GLOBAL POWER SYNERGY sold Bt5bn of bonds on Not only did the sovereign offering beat rating had sold 15-year bonds in the Thai September 29 at tenors of four and seven the Bt12bn issue Laos completed in 2015, market. years, priced close to or at the tight ends of but it also pushed out its curve to 15 years The Ministry of Finance of the Lao the guidance ranges. from 12, and printed the largest its longest People’s Democratic Republic issued the It priced the Bt3.5bn four-year at 2.21% tenor, showing Thai investors’ positive bonds on behalf of the government. It and the Bt1.5bn seven-year at 2.82%, versus long-term view on the credit. received approval in mid-September to respective guidance ranges of 2.19%–2.31% The Bt2.7913bn three-year, Bt1.0198bn five- sell baht bonds and to convert part of the and 2.82%–2.94%. year, Bt340.9m seven-year, Bt2.967bn 10-year, proceeds into US dollars in the onshore The Thai electricity, steam and water Bt1.5055bn 12-year and Bt5.3755bn 15-year foreign currency market. producer has a A+ local rating from Fitch. tranches priced at par to yield 3.65%, 4.00%, The total issue size was capped at Bt14bn, Bank of Ayudhya and Siam Commercial Bank 4.60%, 5.20%, 5.40% and 6.05%, respectively. which Thailand’s Ministry of Finance had were sole lead managers.

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International Financing Review Asia October 7 2017 35

1012_07 Country02.indd 35 06/10/2017 21:43:12 ASIA DATA

ASIAN SYNDICATED LOAN PIPELINE UPDATES WEEK OF 3 OCTOBER Company Currency Size (m) Margin (All-in) Tenor (mths) Facility Arrangers Australia Beach Energy A$ 500 36 Term Loan Commonwealth Bank of Australia, ANZ, CS A$ 500 60 Term Loan ANZ, CS, Commonwealth Bank of Australia A$ 500 60 Revolver/Line >= 1 Yr. Commonwealth Bank of Australia, ANZ, CS A$ 75 36 Guarantee CS, Commonwealth Bank of Australia, ANZ China CAGR Gas (Hong Kong) US$ 120 120 36 Term Loan Far Eastern International Bank Ford Automotive Finance (China) Rmb 1,500 469.8 (494) 36 Revolver/Line >= 1 Yr. SCB, DBS, SMFG Hong Kong Cathay Pacific Airways US$ 350 95 (110) 36 Revolver/Line >= 1 Yr. BoC, BNP Kingboard Chemical Holdings HK$ 2,500 100 (123) 48 Term Loan Hang Seng Bank Ltd, SCB HK$ 2,500 100 (123) 48 Revolver/Line >= 1 Yr. SCB, Hang Seng Bank Ltd Ping An Leasing Hong Kong US$ 150 135 (162) 36 Term Loan DB US$ 150 135 (162) 36 Revolver/Line >= 1 Yr. DB India Twin Star Holdings US$ 575 310 (345) 60 Revolver/Term Loan CS, First Abu Dhabi Bank, DBS, Barclays, SCB Japan Bain Capital ¥ 600,000 Revolver/Term Loan 0 Financial Products Group ¥ 2,800 12 Revolver/Term Loan Chiba Bank Ltd ¥ 4,000 12 Revolver/Term Loan B of Yokohama SoftBank Group Corp ¥ 2,000,000 Revolver/Term Loan Mizuho Korea (South) Incheon Grand Bridge W 393,400 Term Loan 0 Pakistan Ministry of Finance of Pakistan US$ 200 12 Revolver/Term Loan CS Singapore Mercuria Energy Trading US$ 390 70 (110) 12 Revolver/Line >= 1 Yr. SG, BTMU, OCBC, ING , ICBC US$ 100 70 (110) 12 Revolver/Line >= 1 Yr. ING , OCBC, ANZ, DBS, ENBD US$ 260 36 Revolver/Line >= 1 Yr. OCBC, DBS, ANZ, Mizuho, SMFG Taiwan Chien Shun Steel NT$ 1,641 60 Term Loan First Financial Holding Co Ltd US$ 35 110 60 Term Loan First Financial Holding Co Ltd NT$ 1,055 60 Term Loan First Financial Holding Co Ltd US$ 18 110 60 Term Loan First Financial Holding Co Ltd Eastern Broadcasting US$ 165 200 60 Term Loan Cathay Financial Holdings Co Ltd, CTBC Fulltech Fiber Glass Corp NT$ 2,500 60 Term Loan B of Taiwan NT$ 500 60 Term Loan B of Taiwan Source: Thomson Reuters LPC

MERRILL LYNCH ASIAN DOLLAR INDEX Index Description Index level 1 week total return 1 month total return 3 months total return OAS ADIG Asian-dollar high-grade index 390.068 0.081 –0.346 1.418 118 ADHY Asian-dollar high-yield index 608.708 0.095 0.577 2.633 379 AGIG Asian-dollar government high-grade index 363.683 0.105 –0.360 1.561 106 AGHY Asian-dollar government high-yield index 724.516 0.343 0.408 3.417 289 ACIG Asian-dollar corporate high-grade index 415.343 0.073 –0.341 1.373 123 ACHY Asian-dollar corporate high-yield index 499.321 0.048 0.607 2.481 397 Source: Merrill Lynch

LAST WEEK’S ECM DEALS Stock Country Date Amount Price Deal type Bookrunner(s) Apollo Tyres India 03/10/17 Rs15bn Rs238 Follow-on (Primary) JM Financial, Kotak, UBS SIA Engineering Singapore 03/10/17 S$120m S$3.11 Follow-on (Secondary) JP Morgan Malaysia Airports Malaysia 03/10/17 M$476m M$8.20 Follow-on (Secondary) Credit Suisse, Maybank Source: IFR Asia

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2017 INTERNATIONALIZATION OF CAPITAL MARKETS IN EMERGING ASIAN ECONOMIES ROUNDTABLE Saturday October 14 2017 | 12:30 – 14:00 | Event Hall – HQ1-1-660 | IMF Meeting, Washington D.C.

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The IFR Internationalization of Capital Markets in Emerging Asian Economies Roundtable is taking place over lunch on Saturday October 14 at the 2017 Annual Meetings of the World Bank Group and the International Monetary Fund in Washington D.C.

Asia’s capital markets are opening up, offering an exciting alternative to the anaemic growth and political uncertainty confronting investors in much of the developed world. The liberalisation of China’s domestic bond market is the single most exciting development in global fixed income today, but Beijing is not alone in embracing global capital. India is also internationalising the rupee with the introduction of offshore Masala bonds, and early steps are under way to deepen capital markets across Southeast Asia. China’s Belt and Road initiative, the development of clean energy and green infrastructure in India and China, the arrival of new multilateral lenders, and the renminbi’s inclusion in the IMF’s basket of reserve currencies are also adding to the momentum.

The vast sums of money involved mean global investors can no longer afford to ignore Asia’s emerging capital markets – onshore renminbi bonds alone totalled US$6.4trn at the end of 2016. As index providers update their benchmarks, international fund managers will need to be aware of differences in market practices, including credit ratings, valuations and expectations of state support, when reassessing their allocations.

Moderated by IFR Asia Editor, Steve Garton, this 90-minute Roundtable discussion will bring together a panel of expert speakers to discuss these themes, assess the current state of play and provide an outlook for future developments. A buffet lunch will be provided for all attendees.

The event is free to attend to everyone attending the 2017 Annual Meetings of the World Bank Group and the International Monetary Fund in Washington D.C. – so please come to the Event Hall, HQ1-1-660 at 12:30 on Saturday October 14 2017.