NOVEMBER 7 2020 ISSUE 2358 www.ifre.com

Ant eaten: bankers left ‘shocked and confused’ as China stamps on US$34.4bn IPO

Pipeline fills up as markets across the world shrug off US election disputes

Red flags: bank watchdogs step up scrutiny of working-from-home risks

EQUITIES BONDS LOANS STRUCTURED EQUITY Ant agony for Forgiving investors Another ION Good in a crisis: banks but outlook get behind Waste bites the dust: stellar EQL year for China-to-US Management’s 53BNûRElû continues with IPOs brightens US$2.5bn return fails Cellnex return 04 06 08 10

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,)5[&RURQD6WRŴUHULQGG 03.07.20 09:11 Upfront „ OPINION INTERNATIONAL FINANCING REVIEW

Down to size disappointment. That is a valuable lesson – even if it had to be learned the hard way. ow many countries would kill a record-breaking IPO at Hthe last minute just to make a point? Certainly, the demise of Ant Group’s US$34bn-plus Hong Up to no good Kong and Shanghai listing last week sends a clear message that no deal is beyond the reach of China’s all-powerful regulators. HEû#OVID ûCRISISûANDûRESULTINGûLOCKDOWNSûAREû Chinese commentators have praised the regulators for Taccelerating change in how bankers and traders are rushing out reforms before the stock was listed, as changes supervised, just as they will have long-term implications for to consumer lending rules would have made for volatile where and how people work. trading in the shares. Supervisors were already using more data analysis to spot But are the Chinese authorities really so incompetent that THOSEûUPûTOûNOûGOOD ûREPLACINGûANûOVER RELIANCEûONûlNDINGû they didn’t realise the need to change the rules for consumer evidence of wrongdoing in chatrooms and text messages. lNANCEûUNTILûûDAYSûAFTERûTHEû)0/ûHADûBEENûPRICED Now, with staff working from their spare bedrooms or !NTSûROLEûINû#HINASûlNANCIALûSYSTEMûMAYûWELLûJUSTIFYû studies – where there are no cameras or colleagues to watch tighter regulation, but the company did not appear or put an early check on misbehaviour – more areas have overnight. If China’s regulators simply wanted to control gone dark for supervisors. So they need to speed up their systemic risks resulting from Ant’s growing dominance, they shift to data and model-based supervision. had ample opportunity to do so long before the listing was 3IGNIlCANTLY ûTHEû#OMMODITYû&UTURESû4RADINGû#OMMISSIONû launched. will next week merge its data and technology arm with its Instead, four of China’s regulatory bodies summoned Jack market oversight operations into a new Division of Data. The Ma and Ant’s other top executives to a meeting on Monday #&4#ûISûSMALLERûANDûMOREûNIMBLEûTHANûMANYûOTHERû and unveiled new rules for online micro-lending, one of the regulators, and it reckons enforcement action could now be most lucrative businesses on Ant’s platform. That prompted brought just by using trading analysis. the Shanghai Stock Exchange to halt the A-share listing on &ORûSUCHûAûSTRATEGYûTOûWORKûATûTHEû#&4#ûANDûMOREûWIDELYû Tuesday, less than 48 hours before the shares were due to will require improvement in data analysis tools, so they not begin trading. ONLYûHIGHLIGHTûPOSSIBLEûINSIDERûTRADING ûSPOOlNGûORûROGUEû The timing of that intervention can only have been TRADING ûBUTûALSOûnûCRUCIALLYûnûAVOIDûmAGGINGûUPûFALSEûPOSITIVESû determined to make a political point – to kill the chicken to That, the big data evangelists say, is all now possible. scare the monkey, as the Chinese saying goes. At least that is the theory. Where’s there’s money to be Ma’s comments at a Shanghai conference in late October made there will always be people trying to take advantage. appear to have triggered this regulatory response. In an No doubt such people are operating right now inside banks unusually blunt speech calling for the modernisation of China’s ANDûOTHERûlNANCIALûINSTITUTIONS ûCONlDENTûTHATûTHEûNEWû lNANCIALûSYSTEM û!NTSûFOUNDERûLIKENEDû#HINASûBIGGESTûBANKSûTOû conditions will allow them to hide any misbehaviour. unsophisticated pawnshops – a description that would not have The real test of the new model of compliance is whether they gone down well with the authorities. It seems clear that China’s do. And we won’t know that – if we ever do – for some time yet. most senior leaders think Ma has simply got too big for his boots and needed bringing down to size. This dressing down, however, comes at a steep cost. In Having a moment halting Ant’s listing, China has missed the opportunity to showcase the depth and competitiveness of its capital TRUCTUREDûEQUITYûISSUANCEûINûTHEû%-%!ûREGIONûINûûISû markets through a world-beating IPO. It makes the regulators SONûTRACKûTOûBEATûTHATûOFûûANDûûPUTûTOGETHERû/Fû look capricious and the country’s market-driven reforms course, volatility is a positive for the asset class so a pandemic disingenuous, and could make other promising Chinese that roils markets is a helpful, if unwelcome, event. issuers rethink the appeal of the Shanghai Star market. 4HEûMARKETûHASûALSOûMATUREDûINûûASûISSUANCEûHASûBEENû Chinese companies looking for certainty of funding may driven by both the desperate and the opportunistic. Deal now be more inclined to turn to the US, especially with the structures have been vanilla – a little boring even, considering prospects of a new US administration that is less erratic and the innovation of years past in the region. Pricing has been less hostile to Chinese companies. sensible with high premiums and low coupons for issuers and 4HEûREALûSIGNIlCANCEûOFûTHEûREGULATORYûINTERVENTIONûLIESûINû trading performance has been positive. THEûCONlRMATIONûTHATûTHEû#HINESEûAUTHORITIESûHAVEûNOTûGIVENû 4HEûMOSTûSIGNIlCANTûSIGNûOFûPROGRESSIONûISûISSUANCEûFROMû up their control over the capital markets or the IPO process. growth names, offering something like the excitement seen $ESPITEûAûSERIESûOFûMARKET BASEDûREFORMSûINûTHEûPASTûû in the US, albeit on a much smaller scale. months, anyone expecting China’s capital markets to follow Equity-linked is often a forgotten part of ECM, understood by international standards had set themselves up for surprisingly few bankers, but it is proving its worth this year.

International Financing Review November 7 2020 1

2 IFR Upfront 2358 p1.indd 1 06/11/2020 20:42:46 Top news China-to-US IPO outlook 04 Markets shrug off election woes 06 Investors support Waste 06 China stamps down on Ant IPO

„ Equities “Shocked and confused” bankers do not expect quick relaunch of deal

BY FIONA LAU had many chances during the holds a 33% stake in Ant, fell Huabei and Jiebei in a IPO process to stop the listing 8.1% in New York on Tuesday commentary in the 21st Century China’s last-minute cancellation without waiting until two days and underperformed its peers in Business Herald arguing that of the world’s biggest IPO has before the debut. the second half of the week as FinTech lenders should face handed bankers and investors a “We are shocked and investors took the move as an similar levels of scrutiny as painful reminder that the confused,” said one of the attack on Ma, founder of both traditional banks. country’s capital markets bankers working on the deal. Alibaba and Ant. Guo also said Huabei had remain exposed to enormous “The CSRC has approved Ant’s Many observers interpreted similarities to banks’ credit card political and regulatory risks. Star IPO and Hong Kong listing. the halt as being a result of Ma’s businesses but charged ANT GROUP was forced to pull They could have rejected Ant’s recent criticism of China’s consumers a much higher the plug on its US$34.4bn Hong listing if they felt the online lNANCIALûANDûREGULATORYûSYSTEMû management fee. Kong and Shanghai listing on micro-lending business needs At a conference attended by “Regulators should investigate Tuesday, less than 48 hours tighter scrutiny.” regulators on October 24, two whether the leading FinTech before its shares were due to The timing of the regulatory days before the Hong Kong leg of players have infringed begin trading, after China intervention has raised the IPO started bookbuilding, Ma consumers’ rights to choose and unveiled a surprise clampdown questions over China’s said that local and global enjoy fair terms as a result of on online lending. commitment to market-driven REGULATORSûWEREûSTImINGû their monopoly status,” he said. Regulators staged a dramatic reforms in its domestic capital innovation and should introduce intervention on Monday, markets, where the launch of reforms to allow the use of big DRESSING DOWN summoning founder Jack Ma and the tech-focused Star board had data in lending decisions instead 4HEûlRSTûSIGNûOFûTROUBLEûCAMEûONû Ant’s top executives for talks and introduced a disclosure-based of collateral. He also said Monday, when the China unveiling proposals that would IPO regime that is closer to the Chinese lenders still operated on Securities Regulatory limit Ant’s ability to connect US model. a “pawnshop model” and Commission said on its website borrowers and lenders on its fast- The deal’s cancellation also compared the Basel Accords to a that Ant’s top brass had been growing platform. The move came as a bitter blow to 1.5 club for the elderly. summoned to a meeting with a prompted the Shanghai Stock million retail investors in Hong Ma’s comments drew heavy group of senior regulators. Exchange to suspend the A-share Kong, many of whom had criticism in Chinese state media. The CSRC, People’s Bank of leg of the deal on Tuesday night, borrowed heavily to invest in the On Monday, Guo Wuping, head China, CBIRC and State with Ant calling off the Hong IPO, and to the underwriters of consumer protection at the Administration of Foreign +ONGûmOATûMINUTESûLATERû who had been expected to share China Banking and Insurance Exchange held regulatory talks The abrupt halt of Ant’s listing a payday approaching US$400m. Regulatory Commission, named with Ant founder Jack Ma, stunned bankers on the deal, Chinese e-commerce giant several consumer loan executive chairman Eric Jing and who reckon Chinese regulators Alibaba Group Holding, which companies, including Ant units chief executive Simon Hu. Ant delay hits listing reforms „ Equities Suspension shows China is still uncertain about giving up full control over IPO approvals

BY FIONA LAU, KAREN TIAN has quickly become an attractive said Dong Dengxin, director of Shanghai. It remains to be seen listing venue for Chinese the Institute of Financial whether the Ant incident will China’s shock decision to halt technology companies in part Securities at Wuhan University undermine the attractiveness of ANT GROUP’s IPO has revealed the because of its streamlined listing of Science and Technology. the market,” he said. limits of the Shanghai Star process. Dong warned that the The reforms introduced with market’s registration-based The Shanghai Stock simultaneous halt of the the launch of the Star board in listing regime at a time when Exchange’s decision to suspend Shanghai and Hong Kong July 2019 played a large part in regulators are looking to roll out the deal, however, shows China listings only 48 hours before the Ant’s decision to list in both the framework across the may not be ready to give up shares were due to begin trading Hong Kong and Shanghai. country. control over IPO approvals in would have a negative impact on “The innovative measures The planned Rmb114.9bn full. the reform of the registration implemented by the two (US$17.2bn) A-share IPO, the “From Ant’s suspension, we system as well as the exchanges exchanges have opened the largest in China, would have can see Chinese regulators are themselves. doors for leading-edge been the biggest endorsement to not yet accustomed to the “The Star market has been technology companies to have date for the 15-month-old complete tolerance and hoping to attract high-quality greater access to the capital Nasdaq-style Star market, which openness of market-based IPOs,” tech companies to list in markets,” Ant executive

2 International Financing Review November 7 2020

3 IFR Top news 2358 p2-10.indd 2 06/11/2020 19:30:40 For daily news stories @ visit www.ifre.com Watchdogs step up WFH scrutiny 08 Another ION bites the dust 08 Brightline postpones 09

The statement did not give business was Ant’s biggest as the company will have to doesn’t look like the regulators details of the talks, but the REVENUEûGENERATORûINûTHEûlRSTû restructure its business and are purely looking for more timing coincided with the half of 2020, accounting for apply for new licences to disclosure judging by the timing release of draft rules from 39.4% of revenues, up from comply with the new lending and magnitude of their China’s central banks and the 24.8% in 2017. Ant’s digital rules before going to the market intervention in the IPO,” said CBIRC targeting online micro- payment and merchant services again,” said a person with the person. “Investors will also lending, where Ant is a major contributed 35.9% of revenues knowledge of the matter. ask for more certainty this time. player. INûTHEûlRSTûHALFûOFû Ant said on Thursday it would They will want a guarantee that The draft rules set new capital Under the proposed new rules, fully evaluate its position before the company has cleared all thresholds for micro-lenders Ant would have to raise its capital deciding whether to relaunch regulatory hurdles to list on its and cap each loan at SIGNIlCANTLYûTOûSUPPORTûTHEû the IPO under the 12-month second attempt. Increased Rmb300,000 or one-third of a growth of its online micro-lending approval window granted by disclosure may not be enough.” borrower’s annual pay, business, eating into its margins. the CSRC in October. !NTSû(ONGû+ONGûmOATûWOULDû whichever is lower. “This could lead to a lower “Theoretically, Ant can have been the city’s largest since What could hit Ant the valuation for the company relaunch the IPO after 2010. It attracted HK$1.3trn hardest is a proposal that when it comes back to market,” disclosing the risks related to (US$168bn) of subscriptions from requires online micro-lenders to said Brian Freitas, an analyst the new rules. However, it over 1.5 million retail investors, fund at least 30% of each loan who publishes on Smartkarma. MAKINGûTHEûmOATûTHEûMOSTû

from their own resources, Ant’s IPO had valued the ALIBABA SHARES SLIP IN NEW YORK popular in the city’s history. threatening Ant’s partnership company at around US$312bn, CLOSING PRICE The Rmb114.9bn Shanghai model. more than China’s biggest lender US$ leg, which would have been According to Ant’s Industrial and Commercial Bank 320 China’s biggest ever A-share prospectus, as of June 30, about of China and more than the IPO, drew about Rmb19trn of 98% of the Rmb1.7trn consumer biggest US banks. Analysts at joint 310 subscriptions from 5.15 million and small and mid-size business global coordinator Credit Suisse retail investors. credit balances enabled through had forecast a 141% year-on-year CICC, Citigroup, JP Morgan and 300 its platform were underwritten jump in Ant’s 2020 full-year net Morgan Stanley were sponsors for BYûITSûPARTNERûlNANCIALû PROlTûTOû2MBBN ûRISINGû Ant’s Hong Kong IPO. The four institutions or securitised. another 30% to Rmb56bn in 2021 290 banks were global coordinators, “Our approach is not to use and 34% to Rmb75bn in 2022. and bookrunners with Credit

our own balance sheet or 280 Suisse and CCB International. provide guarantees,” it said in NEXT STEPS CICC and China Securities the IPO prospectus. The last-minute regulatory sponsored the Shanghai Star Ant charges technology intervention left Ant with no 270 listing, and were bookrunners service fees to the about 100 option but to refund investors with Citic Securities, Huatai United banks, as well as trust while it considers its next move. 260 Securities, Shenwan Hongyuan companies, that it partners “It will take a few months September October November Financing Services and BOC with. The so-called “CreditTech” before Ant can resume its listing Source: Refinitiv International (China). „

chairman Eric Jing said when leaves companies waiting years could have a major impact on ROLEûINû#HINASûlNANCIALûSYSTEMû the Chinese digital payments for a green light. Ant’s business structure and made regulatory oversight more giant announced the listing plan Following the success of the PROlTûMODELv important. in July. Star market, the Shenzhen But many investors hit out at h7EûCOULDûSEEûTHEûlNANCIALû As well as allowing a Stock Exchange adopted the the timing of the suspension, business of Ant Group is so broader range of companies, registration-based IPO system which was prompted by a complicated that it needs four the Star board offers a for its ChiNext board in June. change to online micro-lending regulators to hold talks at the registration-based system, in China is planning to roll out the rules announced on Monday – same time. This kind of which the Shanghai Stock regime across the entire stock after Ant had completed business complexity requires Exchange is responsible for market at an appropriate time. bookbuilding. clearer information disclosure,” vetting the information and “It is so embarrassing as the he said. risk disclosure in listing CSRC SUPPORT deal has already passed the IPO On Monday, the CSRC said, applications before the The CSRC, which had approved review and the IPO registration itself, the People’s Bank of China Securities Regulatory the dual listing less than with the Shanghai Stock China, the China Banking and Commission accepts the three weeks earlier, on Exchange and the CSRC. It has Insurance Regulatory registration. Wednesday defended the passed all legal procedures,” Commission and the State That is a big departure from SSE’s decision to suspend said one market observer. Administration of Foreign the traditional IPO process in Ant’s IPO, calling it “a Zhao Xijun, director of Exchange held regulatory talks China’s domestic market, where responsible move both for Institute of Finance and with Ant founder Jack Ma, the CSRC has full control over investors and markets as the Securities at the Renmin executive chairman Eric Jing and an opaque procedure that often recent regulatory changes University of China, said Ant’s chief executive Simon Hu. „

International Financing Review November 7 2020 3

3 IFR Top news 2358 p2-10.indd 3 06/11/2020 19:30:42 Top news Ant agony sees outlook for China-to-US IPOs brighten „ Equities Ant debacle may increase China-to-US deals, as banks miss major payday

BY THOMAS BLOTT Ant’s listing would increase the management platform that is base deal size. The fee was set to appeal of the US as a listing backed by Ping An Insurance, go up to US$198m if a 15% The derailing of ANT GROUP’s world- venue over China, although they raised US$2.36bn from a New greenshoe were to be exercised record IPO and the prospects of a cautioned that these decisions York Stock Exchange IPO. This in full. new US administration are likely usually depend on the type of surpassed KE Holdings’ Combined with the Shanghai to draw more Chinese companies issuer involved. US$2.1bn IPO in August to component, which was said to to the US stock market, market “The decision over Ant coupled become the biggest China-to-US pay a similar percentage, that observers said, as Democratic with the possibility of a new listing since the US$2.4bn means Ant’s bankers were in candidate Joe Biden closed in on administration in the US that .ASDAQûmOATûOFûVIDEO STREAMINGû line for a payday approaching victory in the US presidential may be more favourable to service iQiyi in March 2018. US$400m. election. Chinese companies generally will According to data from Bankers were left stunned be factors that issuers consider, 2ElNITIV ûTOTALûPROCEEDSûRAISEDû “Generally speaking, after the Shanghai bourse although usually there are very from China-to-US IPOs this year valuations and blocked Ant’s Rmb114.9bn SPECIlCûREASONSûWHENûITûCOMESûTOû currently stand at US$10.66bn, secondary market (US$17.31bn) A-share IPO on selecting where to list,” said one the best year on record since liquidity are still higher Tuesday, less than 48 hours Hong Kong-based banker. 2014 when total proceeds hit before the shares were due to “Generally speaking, US$29.01bn, which was largely in the US, although start trading, following proposed valuations and secondary skewed by Alibaba’s then world- sometimes there are rule changes around online market liquidity are still higher record US$25bn IPO. good reasons why micro-lending. Minutes later, in the US, although sometimes The damage caused by China’s you might want to list Ant announced that the there are good reasons why you delay of Ant Group’s IPO, elsewhere” concurrent HK$133.6bn might want to list elsewhere. In purportedly due to changes in (US$20.12bn) H-share offering Ant’s case, it would have made the regulatory environment would also be suspended. less sense to list in the US following new guidelines Although the exact split was The announcements set the because of some of the governing FinTech companies NOTûCONlRMED ûNORMALûPRACTICEû tone for an uncertain week in regulatory requirements around that were introduced on would have seen sponsors CICC, global capital markets as the their consumer payments Monday, could have more Citigroup, JP Morgan and Morgan results from the US presidential business.” consequences for where Chinese Stanley get the highest election slowly trickled in. companies choose to list than commissions and therefore Concerns about China’s CHINA-US TENSIONS the measures taken by the US. would have missed out the most GROWINGûINmUENCEûONûTHEûWORLDû Regardless of who wins the US The decision to introduce a from the deal being pulled. stage emerged as one of the few presidential election, the registration-based system for IPO The decision to suspend the bipartisan issues during Donald outlook for Chinese companies approvals on the Shanghai Stock deal will also likely have major 4RUMPSûlRSTûTERM ûALTHOUGHû listing in the US is unlikely to Exchange’s Star board has been implications in terms of league most analysts are expecting a improve drastically given a critical factor in the start-up table credit. Morgan Stanley reset in Sino-US relations if bipartisan support for tougher board’s success, market already occupies the top spot in Biden is elected as he has taken a measures towards Chinese observers said, and the decision proceeds from equity and equity- consistently less hawkish stance issuers. on Ant, which de facto hands LINKEDûDEALSûINû!SIA 0ACIlCû than Trump towards China in For example, in May, the US back control to the regulators on ex-Japan for the year-to-date at the build-up to the election. Senate passed legislation that the timing of IPOs, could deter US$23.31bn for a 7.6% market would force Chinese companies, other issuers. share. “The decision over including Alibaba Group CICC is currently third with Ant coupled with the Holding and Baidu to delist from AGONY ANT US$17.45bn in total proceeds for possibility of a new US bourses if they do not comply The decision to postpone Ant’s a 5.7% market share, one place administration in the with US regulatory and audit IPO will also have major behind Citic Securities. JP standards. implications for the banks Morgan and Citigroup could have US that may be more While more US-listed Chinese involved. Although the overall done with the credit in particular favourable to Chinese companies, including most fees at around 1% were lower from Ant as they currently rank companies generally notably Alibaba, JD.com and than what issuers have paid out seventh and eighth respectively. will be factors that NetEase, have been pursuing on other jumbo IPOs this year, 4HEûBIGGESTûBENElCIARIESûAREû issuers consider” secondary listings in Hong Kong the size of the deal means that those that missed out on the to hedge against the possibility banks will be missing out on a deal, including most notably of being delisted in the US, the major payday. Goldman Sachs, which currently Market observers said that a China-to-US IPO pipeline has The Chinese digital payments sits in fourth place in the ECM potential Biden presidency remained intact. giant was due to pay an league tables with a 5.6% market combined with the recent volte- At the end of last month, underwriting commission of up share after helping raise face by Chinese regulators over LUFAX, the Chinese online wealth to 1%, equal to US$172m at the US$17.03bn so far this year. „

4 International Financing Review November 7 2020

3 IFR Top news 2358 p2-10.indd 4 06/11/2020 19:30:46 ICO SOCIAL AND GREEN BONDS Supporting sustainable growth in Spain

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3 IFR Top news 2358 p2-10.indd 5 06/11/2020 19:30:50 Top news Pipeline fills up as markets shrug off US election disputes „ People & Markets Four issuers hit bond markets, as others plough ahead with listings

BY GARETH GORE books on its US$1bn Hong Kong “Everyone was expecting the are only three more full weeks listing, while in London markets to be shut with an before the end of the year, It took only a few hours for new reinsurer CONDUIT announced its unclear election result like this, making the window a short one. deals to return to the primary own plans for an IPO. so a lot of companies made sure markets, as investors reacted Meanwhile, AIRBNB is widely they had done the funding MARKET RESILIENCE calmly while votes were counted EXPECTEDûTOûlLEûTOûGOûPUBLICûASû needed to do ahead of the The resilience of markets in the – and tensions escalated – in the early as next week. event,” said Marco Baldini, head face of uncertainty has been the US presidential election, with The early return of deals of European bond syndicate at story of much of the year. The stocks and bonds seemingly comes after markets largely Barclays. pandemic has wrought human numbed by trillions of dollars of shrugged as it became clear that “Clearly, if this very strong and economic destruction across central bank support over recent Trump would contest a Joe Biden market tone holds then the planet, yet stock markets in months. victory. Stock markets actually companies will be tempted to the US and China – countries Chinese real estate developer rallied as the standoff played out come back into the market – but both heavily impacted by the JINGRUI HOLDINGS and Spanish on Twitter and television, while will take a few days for that to virus – are up in the year to-date. construction and airport yields on sovereign and happen,” he said, adding that a Central banks’ largesse is mainly company FERROVIAL WEREûTHEûlRSTû corporate bonds fell. shortened week with the to thank for that. Faced with to dip their toes into the bond Bankers had advised issuers to Veterans Day public holiday in recession, they have pumped market early on Thursday. At the steer clear of doing anything this the US might be a hurdle to trillions into markets. That looks US open, they were joined by week, for fear of possible issuance next week. set to continue: the Bank of two more issuers: WASTE turmoil in markets. But many Still, so long as current England unveiled another £150bn MANAGEMENT in the high-grade ditched that advice after seeing conditions continue to hold, of bond purchases on Thursday, space and high-yield credit the resilience of markets and bankers expect a rush of while more is coming from the ANTERO MIDSTREAM. advised those that could to bring issuance in the one remaining European Central Bank next In the equity world, issuers forward their issuance plans to full week before the month. also ploughed on regardless. take advantage of the Thanksgiving holiday at the end In Europe, a couple of big names SUNAC SERVICES said it would open conditions. of the month. After that, there are already set to print deals next Forgiving investors support Waste Management’s return „ Bonds Short-memory syndrome strikes again as investors let bygones be bygones

BY WILLIAM HOFFMAN to overcome the consternation when the bonds were trading as US$3bn revolving credit facility of investors who felt they were high as 110. ITûTOOKûOUTûTOûlLLûINûTHEûGAPûAFTERû WASTE MANAGEMENT overcame burned by the company earlier Despite annoying investors at redeeming the bonds in July. disgruntled investors and this year. the time, Waste Management is Investors lost a lot of money election volatility on Thursday to 7ASTEû-ANAGEMENTSûlRSTû ENJOYINGûSIGNIlCANTûCOST SAVINGSû because of the special price a US$2.5bn four-part bond attempt at funding the merger ONûTHEûNEWûlNANCINGûASûTHEû redemption of the bonds but any at exceptionally low spreads to came in May 2019 when it priced company was able to redeem hard feelings were overlooked fund its US$4.6bn acquisition of Aû53BNûlVE PARTûDEALû(OWEVER û coupons ranging from 2.95%–4% given the demand for new paper. Advanced Disposal. the close of the acquisition was and replace them with coupons “They got lucky, and if there The trash and recycling delayed and triggered a special ranging from 0.75%–2.5%. were more bonds than cash you collection company, rated mandatory redemption (SMR) “It says that people may not could bet there would be a lot Baa1/A–/BBB+, garnered as much clause in July this year. care as much around the SMR, more scrutiny on the company’s as US$20bn in the order book The company could have despite the arguments made in governance,” said David Knutson, BEFOREûPRICINGûAû53MûlVE renegotiated the SMR clause with July, and it says the market feels head of credit research at year at 45bp over Treasuries, a investors, but it became attractive really bullish after the election,” Schroders and vice-chairperson US$500m seven-year at 60bp over, to redeem the debt when Treasury said a lead banker on the trade. of the Credit Roundtable, which a US$1bn 10-year at 75bp over and rates fell to historic lows due to openly criticised the company’s a US$500m 30-year at 100bp over. the pandemic. FOOL ME ONCE actions earlier this year. Strong market conditions and In July, Waste Management With the delayed acquisition “There are some investors who scarcity value in a stable credit was able to redeem four series of completed on October 30, the will say, ‘fool me once shame on with the highest ratings in its notes totalling US$3bn at a company returned to the bond you, fool me twice shame on me,’ sector were more than enough dollar price of 101 at a time market on Thursday to repay a and so they might not engage

6 International Financing Review November 7 2020

3 IFR Top news 2358 p2-10.indd 6 06/11/2020 19:30:50 For daily news stories @ visit www.ifre.com

week – the European Financial are sitting on comfortable cash Stability Facility and European positions; there’s no pressure to Banks cheer status Union are both expected. There press the button.” has also been talk of a US dollar “A corporate treasurer, though, quo election result deal from Spain. Bankers say that could see another round of more opportunistic issuers could lockdowns, and with some „ People & Markets Chances of regulatory change falls join the pipeline. degree of conservatism will think “I’m optimistic we will see this is a chance to put more BY PHILIP SCIPIO “Even if Biden wins, the GOODûDEALûmOW vûSAIDû!TULû3ODHI û money in the bank,” he added. chances of sweeping regulatory global head of debt capital France, Italy, the UK and US bank executives are breathing changes have been reduced,” markets at Credit Agricole. “But Greece are among countries to easier after the predicted said Gardner. a lot of corporates have done impose new restrictions in Democratic wave in the 2020 US SIGNIlCANTûPRE FUNDINGûSOûTHEYû recent days. election failed to materialise. GRIDLOCK WORRY Some issuers might actually While polling and political More potentially negative for S&P 500 IS UP YTD lNDûTHATûTHEûLIKELYûELECTIONûRESULTû pundits predicted that Democrat Wall Street is that a Biden Justice CLOSING LEVEL – a Democrat president but with Joe Biden would unseat Donald Department could take a more Points Republicans retaining control of Trump and his party would seize aggressive look at mergers and 4,000 THEû3ENATEûnûMIGHTûBEûBENElCIALû control of both chambers of acquisitions. “M&A will receive to them. Energy and technology Congress in the November 3 heightened scrutiny if Biden companies worried about new election, as of Friday the opposing wins,” said Gardner.

3,500 onerous regulation under a Biden Republican party looked likely to That’s not the only cloud on the administration may now be retain control of the Senate. horizon. While gridlock may stop a breathing a sigh of relief. That means, should Biden Biden administration from One of the lesser-watched prevail in his race to take the enacting dramatic regulatory 3,000 votes to take place on Tuesday presidency, he will have a tougher changes that harm banks, that might also open the door to time enacting a legislative agenda same gridlock could keep Biden some new issuers hitting bond, VIEWEDûASûHOSTILEûTOûTHEûlNANCIALû from standing up an economy 2,500 loan and equity markets. industry – such as raising battered by the Covid-19 pandemic. Arizona, Mississippi, Montana, corporate taxes, strengthening “A Biden presidency with a New Jersey and South Dakota all bank regulations to boost capital Republican-led Senate likely voted to ease state laws on the requirements, or more aggressive MEANSûLESSûlSCALûSPENDING vûSAIDû 2,000 Jan Mar May Jul Sep Nov consumption of marijuana. measures like limiting the size of UBS Americas chief investment 2020 Additional reporting by Robert the biggest banks. There were OFlCERû3OLITAû-ARCELLI Source: Refinitiv Hogg in London „ fears he could push to break-up “The expected election outcome systemically important banks is mixed to slightly negative for US outright, as had been called for by lNANCIALS vû-ARCELLIûSAIDûINûAûNOTEû here, but there is an provided additional headwinds. Senator Elizabeth Warren. “The next stimulus package is overwhelming factor that there is Yes, secondary credit spreads But without taking control of likely to be lower than would have a lot of cash looking for a home.” have rallied following election the Senate, Biden would not been the case in a Blue Wave, One lead banker said they day, but the uncertainty of EVENûBEûABLEûTOûEASILYûlLLûCRITICALû weighing on interest rates.” Bank expected investor pushback but protests, prolonged litigation positions in his administration – stocks are highly correlated with were ultimately able to tighten and control of the Senate still like treasury secretary – without interest rates. SPREADSûmATûTOûINSIDEûTHEû hang over the market. negotiating approval from the And while Biden will be company’s existing credit curve “We had a couple corporates in opposing party. That would restrained from making radical with spreads moving 25bp–35bp the queue this morning, but most exclude most candidates not choices for his cabinet, he would tighter through price progression. were cautious given the Fed seen as mainstream. still name new regulatory Waste Management’s 4.15% July meeting Thursday and non-farm Shares of the largest US banks leadership that could interpret laws 2039 is its most recent outstanding payroll employment numbers on surged following the election, and regulations in a less industry- bond and is the one tranche from Friday,” one syndicate banker including JP MORGAN, CITIGROUP friendly way, Marcelli said. THEûORIGINALûlNANCINGûTHATûDIDûNOTû away from the deal said. and BANK OF AMERICA. And then there’s the so-called have an SMR clause. It was last seen Still, many investors had this “Progressives had their wings Bully Pulpit. Using the power of his trading at a G-spread of around deal lined up in their pipeline clipped and a Republican Senate OFlCEû"IDENûWILLûBEûABLEûTOûEXERTû 114bp, which is 14bp wide to after the acquisition closed on could be a check on overly considerable pressure on banks where the company’s new 30-year October 30 and Waste progressive nominees” said Stifel without making progressive note landed. Management had the market all political analyst Brian Gardner. appointments in his administration “Theoretically there is less to itself as the lone issuer on the h7EûAREûMOREûCONlDENTûTHANûWEû or the regulatory agencies. scarcity in the long bond, and yet day, the lead banker noted. already were that neither The low-hanging fruit could the new 30-year had the largest Barclays and Mizuho were lead Senators Elizabeth Warren nor be to pressure the Fed to extend book,” the lead banker said. billing and delivering Bernie Sanders will get cabinet its moratorium on banks buying bookrunners on all four tranches posts [if Biden wins],” he said. back their stock. ELECTION UNCERTAINTY with Bank of America, BNP Paribas, Self-described socialist senator “I think Biden will move to The decision to announce the Citigroup, Deutsche Bank, JP Morgan, Sanders challenged Biden for restrict stock buybacks,” said deal on Thursday morning MUFG, Scotia, SMBC and US Bank the Democratic nomination Odeon Capital bank analyst Dick before a winner was declared in acting as as lead bookrunners on from the left and was seen as a Bove. Bank dividends, however, the US presidential election various tranches. „ contender for a cabinet post. are expected to be safe. „

International Financing Review November 7 2020 7

3 IFR Top news 2358 p2-10.indd 7 06/11/2020 19:30:52 Top news Watchdogs step up WFH scrutiny „ People & Markets “If there was a set up that would encourage people to act badly, you would set it up to look like this”

BY STEVE SLATER to continue well into 2021 after by helping set up remote working virtual conference hosted by the new lockdown restrictions were practices for staff. Institute of International Finance. Banking watchdogs and supervisors imposed in Britain and other h4HERESûAûlNITEûRESOURCE vû “It will be a high priority for us, are stepping up scrutiny of European countries – have raised Hesketh said. “So there has both in our own practices and in technology and compliance regulators’ concerns about where probably been reduced capacity looking at the banks.” infrastructure for bankers working they may have blind spots to for oversight at a time when there “It requires the institutions … from home and are on the lookout potential misbehaviour. was increased risk of malfeasance. to now realise they have to have FORûREDûmAGSûnûSUCHûASûMOREûSTAFFû “I think it’s hard to overstate the That’s a bit of a double whammy.” both a technical and compliance trading on their own account or increase in risk,” said David Regulators say they are aware infrastructure that can do this using personal phones. Hesketh, co-founder and chairman that problems may have emerged for an extended period of time,” Banks, asset managers and OFûlNANCIALûTRADEûSURVEILLANCEû from the shift to working Quarles said. supervisors are also accelerating company TradingHub. remotely and some have signalled !UTHORITIESûANDûlRMSû the use of data and trading “If there was a set-up that they will intensify efforts to get on themselves have been pleased analytics to look for problems, would encourage people to act top of them. They recognise a with how the industry adapted making up for where badly, you would set it up to look HYBRIDûOFlCEHOMEûSET UPûCOULDû to working remotely. There were communications and surveillance like this. A lack of observation, become a permanent feature of early teething problems, tools of the past are less useful – people working from home, low the industry. industry sources said, but most and easily sidestepped – in a visibility on where they are at Randal Quarles, head of WEREûQUICKLYûlXEDûANDûSYSTEMSû remote working environment. what time, no access codes on supervision at the US Federal coped well – especially in light Indeed, next week the US doors, no coverage of telephones, Reserve and chair of the of record trading and capital Commodity Futures Trading no Faraday cages in people’s Financial Stability Board, last markets issuance. Commission will merge its data houses, end-to-end encryption month said supervisors were But some problems have and technology arm with its available – that is how you’d set it adapting practices and were on emerged, including a rise in market oversight operations up,” Hesketh told IFR. the lookout for problems in the personal account trading, said into a new Division of Data. The new environment. Julia Hoggett, director for agency has said data analytics DOUBLE WHAMMY “As we’re now moving into the market oversight at Britain’s are now advanced enough that it Banks have ramped up spending eighth month [since the Financial Conduct Authority. could bring enforcement action ANDûSTAFlNGûFORûCOMPLIANCEûINûTHEû pandemic forced many to work h4HEREûHASûBEENûAûSIGNIlCANTû using just trading analysis. PASTûDECADEûAFTERûBEINGûlNEDû at home], the weaknesses are also increase, particularly amongst This year’s shift to working billions of dollars for wrongdoing. now becoming apparent and it’s slightly younger generations, in from home practices across the But even those enlarged teams AûSIGNIlCANTûFOCUSûOFûOURû the opening of new personal lNANCEûINDUSTRYûnûWHICHûLOOKûSETû have been stretched since March supervisors,” Quarles said at a trading accounts over the course Another ION bites the dust

„ Loans Financial data firm suffers second leveraged loan blow after investors reject aggressive terms

BY AARON WEINMAN, CLAIRE RUCKIN November 2, yet the deal was put decent, but the credit agreements lower than what they wanted on on hold on November 3. It is set do contain a lot of Ebitda the deal and that the two banks ION ANALYTICS postponed its to be completed when markets adjustments and this is something were too aggressive on what 53BNûRElNANCINGûBLAMINGû are more stable and constructive. investors have to buy into so that they thought they could deliver. volatility from the US presidential Several market participants brings more risk to the table.” “The US elections are an elections, but its track record of disputed the claim that volatility excuse. They over-promised the DIFlCULTûSYNDICATIONSûLEFTûINVESTORSû was the real reason the deal was TIGHT TERMS level they could achieve in the questioning whether politics was put on hold, since other deals The seven-year covenant-lite loan loan market and they couldn’t the sole reason for the decision to were completed in the run up to comprised a US dollar-denominated deliver anywhere near that,” a withdraw the deal or if the the election. tranche and a euro-denominated syndicate head said. company’s aggressive Ebitda “Other deals got done and at tranche. Both tranches were guided )TûISûNOTûTHEûlRSTûTIMEû)/.û adjustments and chequered tighter spreads. ION’s adjustments at 425bp–450bp over Libor/Euribor. Group has faced a setback in the history in the leveraged loan to Ebitda were very aggressive and a The dollar tranche was offered with loan market. market played a part. lot of people declined on that basis. AûûmOORûANDûû/)$ ûWHILEûTHEû In April 2019, unit ION ION Analytics, a newly created With no primary in the loan euro tranche was offered with a 0% CORPORATES launched a unit of ION GROUP that combines market, people have been looking mOORûANDûû/)$ US$2.21bn loan to back the TWOûlNANCIALûDATAûBUSINESSESû for paper and despite some ebbs Credit Suisse was arranging the RElNANCINGûANDûCOMBINATIONûOFû Dealogic and Acuris, launched ANDûmOWS ûTHEûLOANûMARKETûHASûHELDû euro tranche, while UBS led the three software businesses – THEûlRST LIENûTERMûLOANûONû up very well,” a senior investor said. dollar tranche. UBS was agent. Openlink, TriplePoint and Wall October 22 and was supposed to A second investor added: “Both Investors pointed to the fact Street Systems – known wrap up the transaction by the company’s businesses are that pricing was 50bp–75bp collectively as ION Systems. The

8 International Financing Review November 7 2020

3 IFR Top news 2358 p2-10.indd 8 06/11/2020 19:30:52 For daily news stories @ visit www.ifre.com

of the pandemic,” Hoggett said remote working should be last month in a speech at a equivalent, and include how Brightline postpones virtual conference. personal devices are used. Many 3HEûSAIDûlRMSûNEEDûTOûBEû banks ban personal mobile green muni bond “alive” to the need to monitor PHONESûONûTRADINGûmOORS ûFORû this activity, but said the example, but that is not possible „ Bonds Gamble goes wrong for Sin City railway bond regulator was also watching. to monitor in remote working. “We can see activity down to the h7EûEXPECTûlRMSûTOûHAVEû BY PAUL KILBY market,” said a Brightline individual account level.” updated their policies, refreshed representative. “We will (OGGETTûWARNEDûlRMSûTOû their training and put in place Railway operator BRIGHTLINE continue this project, but shift monitor the greater threat of RIGOROUSûOVERSIGHTûREmECTINGûTHEû lNALLYûTHREWûINûTHEûTOWELûONûITSû our funding goals until the insider information being leaked new environment – particularly multi-billion US dollar market improves.” nûMAYBEûTOûPARTNERSûORûmATMATESû regarding the risk of use of municipal green bond issue last Investors had also questioned – and said they might need to re- privately owned devices,” week, saying that market THEûBUSINESSûMODELûANDûTRAFlCû assess who has access to Hoggett said. conditions prevented it from projections at a time when the information. “It is absolutely the pricing the deal before a Covid-19 pandemic had already case that this risk has always NEW SURVEILLANCE deadline set by the state of forced Brightline’s Florida line existed, but when the separation Hoggett said the manner of California. to close and raised questions between work and home life is monitoring staff must change The municipal bond offering, about customers willingness to perhaps harder for some people with the times, and others said WHICHûWASûSLATEDûTOûlNANCEûTHEû sit on crowded trains. to navigate, it may be all the more the use of data has become a far construction of a high-speed “[The amendments] were not important and acute,” Hoggett more crucial tool for regulators railway from Los Angeles to Las SIGNIlCANTûENOUGHûGIVENûTHATû said. “The importance of strong ANDûlRMSûnûRATHERûTHANûTHEIRû Vegas, had been touted as the they would need more money in wall-crossing arrangements is as past reliance on catching people largest ever tax-exempt green the future and much depends on great as ever.” via communications tools. bond issue. ridership feasibility studies, Working from home may TradingHub was set up in But leads ultimately failed to which are really uncertain,” said HAVEûALSOûREMOVEDûAûlRSTûLINEûOFû 2010 to assess the performance convince the buyside in Solender. “It is a challenge and it defence for compliance – such as of traders, and broadened its SUFlCIENTûNUMBERSûOFûTHEûMERITSû might not be the best way to if an employee sees or overhears scope after realising its data of the trade, despite multiple lNANCEû;THEûPROJECT=v something questionable which would also be useful for efforts to bolster demand and Nor were buyside accounts they would in the past have compliance and supervisory brandish its green credentials. entirely convinced of the project’s reported to compliance. teams. It analyses trading data “It is pretty clear at this point ability to satisfy expectations “There is … a risk of less self- and uses statistical analysis to they aren’t able to gather the about sustainability targets, which POLICINGûAMONGSTûFRONT OFlCEû mAGûTRADESûTHATûMAYûBEûAûCAUSEû orders to get it done,” said Dan were aligned with UN Sustainable staff,” Hoggett said. for concern – including insider Solender, head of municipal $EVELOPMENTû'OALSûnûSPECIlCALLYû She said surveillance and TRADING ûFRONT RUNNING ûSPOOlNGû debt at investment management those relating to infrastructure INFRASTRUCTUREûFORûOFlCEûANDû and auction manipulation. „ company Lord Abbett. and communities. Last month, the multi-tranche The bonds were being issued bond issue was downsized to through a California conduit loan was also due to fund a At the end of October, US$2.4bn from US$3.2bn in the COMPRISINGû53MûlVE YEAR û US$250m dividend payment. PETSMART withdrew a proposed face of investor pushback that US$500m seven-year, US$500m However, in May 2019 it US$2bn loan from the syndicated also forced the issuer to adjust 10-year and US$700m 30-year abandoned plans to take the market citing negative market terms and throw in a larger tranches, with price talk at 7%, dividend, reducing the loan conditions, while healthcare equity contribution. 7.125%, 7.25% and 7.50%, RElNANCINGûTOû53BN ûBEFOREû provider MULTIPLAN dropped plans In an effort to garner as much respectively. DROPPINGûTHEûRElNANCINGû to issue a new US$2.47bn term demand as possible, the company It had also planned to issue a altogether later that month after it loan as investors held out for approached investors across the 53MûlVE YEARûTRANCHEû struggled to get investors’ support. better terms, despite pricing a globe and even offered to buy through a Nevada conduit, with ION Corporates later returned US$1.3bn high-yield bond issue. back existing muni bonds – which price talk of 7.25%. to the market and wrapped up “The deals that have been were used to fund its Florida California had given the the deal in October with a pulled – PetSmart, MultiPlan and railway – at up to 14.5 points over company, which is owned by smaller size of US$1.75bn- ION – all have hair on them and secondary levels if holders PRIVATEûEQUITYûlRMû&ORTRESS ûAû equivalent, after switching that’s thematically different. You participated in the new deal. December 1 deadline to place banks to Credit Suisse, from UBS. can’t just blame the election and However, those efforts proved the bonds in the market but “ION does have its stigma. the timing. These credits all have TOûBEûINSUFlCIENTûTOûGETûWHATû now plans to use that bond There have been past deals that history,” the second investor said. was seen as an ambitiously large capacity for other uses such as haven’t gotten done or did not go The failed attempt will see municipal bond offering past closing the gap in the state’s well in syndication. At the best of ION Group continue to sit on THEûlNISHINGûPOSTûINûAûMARKETû HOUSINGûDElCIT TIMES û)/.ûHASû@mUBBEDû more expensive private debt it that had already seen a rush of “Unfortunately, there is not a syndications, so that sticks with secured to fund an acquisition supply ahead of an uncertain lot of liquidity in the market and investors,” the second investor of Acuris, which owns the presidential election. a lot of economic uncertainty at said. “It boils down to the sponsor Mergermarket and Debtwire “There was an opportunity to this moment,” said California and its chequered past, the Ebitda brands, in mid-July last year. do a deal, but we ultimately Treasurer Fiona Ma. “The project adjustment is a lot to stomach Additional reporting by Prudence decided to wait until more is postponed until market right now and then the election.” Ho „ favourable conditions in the liquidity improves.” „

International Financing Review November 7 2020 9

3 IFR Top news 2358 p2-10.indd 9 06/11/2020 19:30:52 Top news Stellar equity-linked year continues with Cellnex return

„ Structured Equity Good in a crisis: EMEA 2020 volumes on track to be highest since 2009

BY ROBERT VENES RECORD-BREAKING TECH SHIFT ESG names, with most of those The robust health of the market A run rate of 58 deals so far this deals trading up in the secondary As an asset class marketed was shown by repeat issuer year is well above the 41 for all of market. “It is also helpful that a around volatility, structured Cellnex producing the longest ûBUTûSIGNIlCANTLYûLESSûTHANû lot of these names are currently equity was always likely to dated convertibles seen in the 84 in 2013 and 79 in 2009, well known within the BENElTûFROMûTHEûHOWûTHEûEQUITYû Europe at 11 years. The launch evidence of a greater number of investment base, such as markets reacted to the of the deal came as the Spanish US$1bn-plus deals. Including last Delivery Hero,” said Zwick. coronavirus pandemic, US company is negotiating the week’s Cellnex fundraising, elections, ongoing concerns €10bn purchase of European there have been eight US$1bn- “It is also helpful around trade wars and Brexit. towers from CK Hutchison, plus CBs this year, with EDF’s that a lot of these Less expected was that 2020 owner of the Three network. €2.57bn 2024 CB in September names are currently would be the best year of The bond issue came on the biggest non-mandatory CB in issuance in EMEA since 2009. Thursday night when the Europe since 2003. well known within the outcome of the presidential More importantly, Europe not investment base” “There were a lot of election was becoming clearer, only witnessed a number of new new names coming to but far from certain. names make their equity-linked market this year and A banker on the deal said that DEBUTSûBUTûALSOûTHEûlRSTûYEARû that was significant the long maturity came from where tech companies made a matching a company that big dent. for the product’s operates on long-term contracts “There were a lot of new popularity especially with long-term funding. “We’ve names coming to market this That same investment base has in the tech space” been pushing on longer YEARûANDûTHATûWASûSIGNIlCANTûFORû seen the progression and growth maturities for some time the product’s popularity of those names in recent years. because of low rates that mean especially in the tech space,” “Delivery Hero and Zalando were you can get a high premium, said Pierre-Alexis Renaudin, great IPOs, raising just under and still offer a good delta head of EMEA equity-linked at €1bn [each],” said Renaudin. “The asset class has played to [equity sensitivity] and pay some Morgan Stanley. “In the past, in h%ACHûISûlVEûTIMESûBIGGERûNOW û its strengths during the yield,” he said. part because of a comparative with market capitalisations in coronavirus crisis, proving itself The company also exploited a dearth of tech companies, excess of €20bn. That’s just the on downside protection, premium redemption structure Europe has not been as big a CB type of European tech growth dropping less than other asset to keep the coupon cost low at market as the US. And with story that should be applauded, classes and recovering faster, 0.75%, while offering a yield to interest rates hovering around ASûITûWASûSCARCERûlVEûYEARSûAGOv with strong outperformance maturity of 1.375%. While 0%, there’s been little incentive Renaudin said that share prices during the recovery,” said pricing was the wide end of for industrial cyclical plays to up 50% or more in a short period Stephanie Zwick, head of launch terms the company tap the CB market in volume.” ahead of issuance – as with convertible bonds at Fisch Asset could not complain, having According to Petit, the names Cellnex – is attracting investors Management. lXEDûTHEûPREMIUMûATûûABOVEû that came to market matched rather than deterring them “even “At the trough of the crisis in a share price that has risen by investors’ expectations, which if the convertible bond comes the second part of March, the half this year. was largely more tech and more with an extra 50% of premium and asset class was down less than the deal is a billion or more. 10%, while the Stoxx Europe 600 VOLATILITY OF CB ISSUANCE Issuance of the CB product in index was down more than 30% ANNUAL EMEA STRUCTURED EQUITY ISSUANCE Europe is now more closely Proceeds US$bn and high-yield was down more resembling the US market, where than 15%,” said Thierry Petit, 40 although treated as debt, this is head of equity-linked for EMEA 35 very often used as growth capital.”

at BNP Paribas. 30 Zwick also pointed to rotation That has been borne out in going on between recovery 25 the volume numbers, with plays and winners like the work- EMEA issuance in 2020 20 from-home companies that

standing at US$30.1bn 15 HAVEûPROlTEDûFROMûLOCKDOWNSû following Thursday’s €1.5bn “We have seen issuance both 10 11-year CB from Spain’s from those who were CELLNEX, putting the market on 5 desperately in need of cash like track for its best year since 2009 0 airlines as well as those that when issuance reached 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 have taken opportunity of the US$36.3bn. Source: Refinitiv current environment.”„

10 International Financing Review November 7 2020

3 IFR Top news 2358 p2-10.indd 10 06/11/2020 19:30:54 People &Markets

Francesco Dutch bank The option  Dissera joins  ABN AMRO  to work from Spanish advisory firm is trying to offload the kitchen will be Alantra to lead its about 60 loans in open for Standard securitisation business Asia-Pacific as it winds Chartered staff, as it targets more down operations showing working European NPL sales outside Europe life is set to change permanently

„ FRONT STORY RESULTS Equities recovery aids French banks Repositioning in equities helps lift Q3 investment bank revenues

French banks’ equities trading units, which FROMûAûYEARûAGOûTOûõBNû4HEûBANKûSAIDû AûLOTûOFûACTIVITY ûSAIDû3EVERINû#ABANNES û HADûAûCALAMITOUSûlRSTûHALF ûRECOVEREDûLASTû THEREûWASûhAûSOLIDûLEVELûOFûCLIENTûACTIVITYûINû DEPUTYûCHIEFûEXECUTIVEûANDûHEADûOFûGLOBALû quarter to help European banks claw back RATESûANDûFOREXv ûANDûCOMMODITIESûANDûBONDû BANKINGûANDûINVESTORûSOLUTIONS SOMEûGROUNDûLOSTûTOû53ûRIVALS UNDERWRITINGûDIDûWELL h)Nû&)#û;lXEDûINCOMEûANDûCURRENCIES=ûOURû BNP PARIBAS, SOCIETE GENERALE and NATIXIS all The bank said corporates were using bond PRODUCTûMIX ûWHICHûISûSTRONGERûINûRATESûANDû saw their structured products business ANDûEQUITYûMARKETSûMOREûTHANûSYNDICATEDûLOANS û %UROPE ûMEANSûWEûLESSûBENElTEDûFROMûTHEû SUFFERûLOSSESûASûTHEûUNEXPECTEDûTURBULENCEû WHICHûHASûLONGûBEENûAûPOWERHOUSEûFORû".00û DYNAMICSûSEENûONûCREDIT ûCOMMODITIESûANDû STEMMINGûFROMûTHEûMEASURESûTAKENûTOû #ORPORATEûBANKINGûREVENUESûROSEûûTOûõBN û INûTHEû53 vûHEûTOLDû)&2 COMBATûCORONAVIRUSûSEVERELYûHITûTHEûACTIVITY BUTûTRADEûlNANCEûVOLUMESûWEREûWEAKER 3'ûSAIDûMARKETûCONDITIONSûHADûhNORMALISEDvû 7ORSTûAFFECTEDûWASû.ATIXIS ûWHICHûRACKEDû 3'ûDIDûNOTûDOûSOûWELLûINûlXEDûINCOMEûANDû OVERûTHEûQUARTERûBUTûITûSTILLûSAWûhHEALTHYûACTIVITYvû UPûõMûOFûLOSSESûINûEQUITIESûINûTHEûlRSTû UNDERPERFORMEDûPEERSûWITHûAûûRISEûINû FORûHEDGINGûFROMû%UROPEANûCORPORATEûCLIENTS HALFû3INCEûTHENûITûHASûEXITEDûMOREûCOMPLEXû REVENUESûINûTHEûTHIRDûQUARTERûTOûõM ûITSû PRODUCTSûANDûISûFOCUSINGûONûOFFERINGûLOWERû WEAKESTûQUARTERûTHISûYEAR STABLE FINANCING RISKûONESûTOûCLIENTSûINû%UROPEûANDû!SIA 0ACIlC 4HATûWASûSIGNIlCANTLYûBEHINDûNOTûONLYû "UTû%UROPEANûlRMSûLAGGEDûTHEIRû53ûRIVALSûINû 4HATûENABLEDûITûTOûREGISTERûPOSITIVEû ".00ûBUTûALSOû$EUTSCHEû"ANK ûWHICHûSAWûAû ADVISORYûANDûUNDERWRITINGûLASTûQUARTER ûWITHû REVENUESûOFûõMûINûTHEûTHIRDûQUARTERûFROMû ûJUMPû&)##ûREVENUESûACROSSûTHEûBIGGESTû REVENUESûATûTHEû53ûBANKSûUPûûONûAVERAGE û EQUITIES ûANûIMPROVEMENTûONûTHEûPREVIOUSû SEVENû%UROPEANûBANKSûWEREûUPûûFROMûAû COMPAREDûTOûAûûRISEûATû%UROPEANûlRMS TWOûQUARTERSûBUTûSTILLûûLOWERûTHANûTHEû YEARûAGO ûSLIGHTLYûBETTERûTHANûTHEûû 3'SûlNANCINGûANDûADVISORYûREVENUESûFELLû SAMEûPERIODûAûYEARûAGO INCREASEûATû53ûBANKS ûFROMûAûYEARûAGOûTOûõM ûDRAGGINGûITSû SG has also repositioned its equities 3'ûHASûLESSûOFûAûPRESENCEûINûCREDITûANDûISû GLOBALûBANKINGûANDûINVESTORûSOLUTIONSû BUSINESSû)TSûEQUITIESûREVENUESûWEREûõMûINû NOTûSOûACTIVEûINûTHEû53ûWHEREûTHEREûHASûBEENû REVENUESûTOûõBN ûUPûûFROMûAûYEARûAGOû THEûTHIRDûQUARTER ûUPûFROMûõMûGENERATEDû 3'ûSAIDûITûWASûHITûBYûAûSLOWDOWNûINûAIRCRAFTû INûTHEûlRSTûHALFûANDûUPûûFROMûAûYEARûEARLIER MIXED BAG: EUROPE IBS BETTER IN EQUITIES, ANDûPROPERTYûlNANCING ûANDûDEBTûCAPITALû ".0û0ARIBASûHASûALWAYSûHADûAûMOREûBALANCEDû WEAKER IN ADVISORY/UNDERWRITING; markets were slower than in the second BUSINESS ûOFFERINGûMOREûVANILLAûEQUITYû Q3 REVENUES % CHANGE FROM YEAR AGO QUARTER DERIVATIVESûPRODUCTSû)TSûEQUITYûANDûPRIMEû 50 3'ûSTARTEDûAûRESTRUCTURINGûOFûITSû SERVICESûUNITûREPORTEDûAûûYEAR ON YEARû INVESTMENTûBANKINGûBUSINESSûAûYEARûAGO û 40 INCREASEûINûREVENUESûTOûõMû".00ûISûSTILLûINû WHICHûHASûENABLEDûITûTOûCUTûEXPENSESûACROSSû THEûPROCESSûOFûINTEGRATINGû$EUTSCHEû"ANKSû 30 THEûAREAûBYûûTOûõBN ûENABLINGûAûû PRIMEûBROKERAGEûSYSTEMSûANDûPERSONNELûINTOûITSû RISEûINûOPERATINGûPROlTûTOûõM 20 OPERATIONS ûSUGGESTINGûREVENUESûCOULDûRISEû ".00SûCORPORATEûANDûINSTITUTIONALûBANKû FURTHERûONCEûTHATûISûCOMPLETE 10 REPORTEDûAûûRISEûINûPRE TAXûPROlTûFORûTHEû 4HATûHELPEDû%UROPEANûBANKSûOUTPERFORMû THIRDûQUARTERûTOûõM ûASûREVENUESûWEREûUPû 0 53ûRIVALSûINûEQUITIESûINûTHEûTHIRDûQUARTERû ûATûõBN %QUITIESûREVENUESûATû%UROPEANûBANKSûROSEû -10 4HEûBANKûISûMAKINGûSAVINGSûASûPROCESSESû

ûFROMûAûYEARûAGOûONûAVERAGE ûCOMPAREDû -20 AREûCARRIEDûOUTûELECTRONICALLY ûSAIDû0HILIPPEû CS SG

TOûAûûRISEûATûTHEûBIGûlVEû53ûBANKS UBS "ORDENAVE ûCHIEFûOPERATINGûOFlCER HSBC BNPP

Barclays hûOFûALLûOURûTRADINGûVOLUMESûINû&8 û Deutsche* MIXED FICC Europe avg BONDSûANDûEQUITIESûAREûPURELYûELECTRONICû US banks avg ,IKEû53ûANDûOTHERû%UROPEANûBANKS ûlXEDû 4HATûLOWERSûCOSTSûANDûISûEASIERûFORûCLIENTS vû FICC Equities Advisory/underwriting INCOMEûTRADINGûFORû".00ûWASûAûBRIGHTûSPOTû HEûTOLDû)&2 Source: Bank results, IFR estimates; some units may not be INûTHEûQUARTERûANDûITSûREVENUESûSURGEDûû directly comparable; *Deutsche has no equities unit Christopher Spink

International Financing Review November 7 2020 11

4 IFR PM 2358 p11-20.indd 11 06/11/2020 20:38:54 h4HEREûHASûPROBABLYûBEENûREDUCEDûCAPACITYûFORûOVERSIGHTûATûAûTIMEûWHENû THEREûWASûINCREASEDûRISKûOFûMALFEASANCEû4HATSûAûDOUBLEûWHAMMYv DAVID HESKETH, CHAIRMAN OF FINANCIAL TRADE SURVEILLANCE COMPANY TRADINGHUB, P8

Europe banks wary of provision rise as they face second lockdown

%UROPEANûBANKSûHAVEûBEENûSANGUINEûINû YEARûTOûõBNû#OMPAREDûWITHûAûYEARû ARISINGûFROMûTHEûCORONAVIRUSûCRISISûANDûFORû third-quarter results about how the EARLIERûTHEûPROPORTIONûOFûLOANSûRANKEDûASû THEûFURTHERûREALIGNMENTûOFûTHEûBANK vûSAIDû CORONAVIRUSûRESTRICTIONSûMIGHTûAFFECTûTHEIRû hDOUBTFULvûHASûINCREASEDûBYûBPûTOûû)Tû CHIEFûlNANCIALûOFlCERû"ETTINAû/RLOPP ASSETûQUALITY ûBUTûSOMEûEXECUTIVESûWARNEDû EXPECTSûCOSTûOFûRISKûTOûAMOUNTûTOûBPûOFûTHEû "UTûPROVISIONSûMADEûBYû&RENCHûANDû that new lockdowns in Europe this month BOOKûBYûTHEûYEAR END 'ERMANûBANKSûTHISûYEARûHAVEûRISENûFARûLESSû COULDûMEANûTHEYûHAVEûTOûINCREASEû DRAMATICALLYûTHANûATûBANKSûINûTHEû53 û"RITAINû PROVISIONS ANDûSOMEûOTHERûCOUNTRIESûnûPARTLYûDUEûTOû h3INCEûTHEûENDûOFû3EPTEMBERûLOCKDOWNû “Since the end of September REGULATORYûANDûACCOUNTINGûISSUESû!ûDOZENû MEASURESûAREûIMPACTINGûTHEûECONOMYûANDû lockdown measures are BIGû53ûBANKSûSETûASIDEûMOREûTHANû53BNû MAYûHAVEûANûIMPACTûONûOURûCREDITûPROlLE vû impacting the economy and INûTHEûlRSTûHALFûOFûTHEûYEAR ûlVEûTIMESûTHEIRû 0HILIPPEû"ORDENAVE ûCHIEFûOPERATINGûOFlCERû may have an impact on our AGGREGATEûPROVISIONûINûTHEûlRSTûHALFûOFû at BNP PARIBAS ûTOLDû)&2ûAFTERûREPORTINGûAû credit profile” SMALLERûRISEûINûCOSTûOFûRISKûINûTHEûTHIRDû BIG IS BETTER? QUARTERûTHANûTHEûPRECEDINGûONE 2EVENUESûINû#OMMERZBANKSûCORPORATEû ".0û0ARIBASûMADEûAûõBNûPROVISIONûFORû 3EVERALûOTHERû%UROPEANûBANKSûALSOû CLIENTSûBUSINESSûFELLûûTOûõMûLASTû BADûLOANSûINûTHEûTHIRDûQUARTER ûLIFTINGû REPORTEDûINCREASESûINûPROVISIONINGûLASTû QUARTER ûHAMPEREDûBYûSLOWERûACTIVITYûINû PROVISIONSûINûTHEûlRSTûNINEûMONTHSûOFûTHISû QUARTERûCOMMERZBANKûSETûASIDEûõM û TRADEûlNANCE ûANDûAûSECONDûWAVEûOFû YEARûTOûõBN ûUPûõBNûFROMûAûYEARûAGOû WHICHûCONTRIBUTEDûTOûAûõMûNETûLOSSûFROMûAû LOCKDOWNSûINûTHEûFOURTHûQUARTERûWILLûHAVEû )TSûPROVISIONûEQUATESûTOûBPûOFûTHEûLOANû õMûPROlTûAûYEARûEARLIERû)TSûNON ANûIMPACTûONûITSûBUSINESSû'ROUPû BOOK PERFORMINGûEXPOSURESûAREûONLYûûOFûITSû PROVISIONINGûFORûTHEûYEARûCOULDûREACHû SOCIETE GENERALEûMADEûõMûOFûNETû BOOK õBNnõBN ûPUSHINGûITûTOûAûLOSSûFORû PROVISIONSûINûTHEûQUARTER ûLIFTINGûITSûTOTALû h7EûHAVEûAûHEALTHYûRISKûPROlLEû4HISû 2OLANDû"OEKHOUT ûHEADûOFûCORPORATEû PROVISIONSûINûTHEûlRSTûNINEûMONTHSûOFûTHISû REPRESENTSûAûGOODûBASISûFORûFUTUREûIMPACTSû clients, said bigger companies had better

Greenhill ends earnings season on sour note ANALYSTSûEXPECTATIONSûINûTHEûQUARTERûMOSTLYû ONûTHEûSTRENGTHûOFûRESTRUCTURINGûREVENUEû "OUTIQUEûINVESTMENTûBANKûGREENHILL‘s !SûAûGROUP ûTHEûINDEPENDENTûINVESTMENTû 'REENHILLûHASûONLYûRECENTLYûBEGUNûTOûEXPANDû REVENUEûPLUNGEDûûTOû53MûINûTHEûTHIRDû BANKSûREVENUEûFROMûlNANCIALûADVISORYûROSEû ITSûGROUPûANDûMISSEDûEXPECTATIONS quarter as M&A transactions slowed and its ûINûTHEûQUARTERûFROMûAûYEARûEARLIERû2EVENUEû RESTRUCTURINGûBUSINESSûOFFEREDûLESSûOFûAû FROMûADVISORYûATûTHEûlVEûLARGESTû53ûBANKS û The firms beat expectations CUSHIONûTHANûITûDIDûFORûPEERS INCLUDINGû'OLDMANû3ACHS ûFELLûû4HEûKEYû in the quarter mostly on the 'REENHILLSûREVENUEûDECLINEûINûTHEûQUARTERû DIFFERENCEûFORûTHEûINDEPENDENTûBANKSûWASû WASûTHEûSTEEPESTûRELATIVEûTOûRIVALû REVENUEûFROMûRESTRUCTURINGûWORKûnûADVISINGû strength of restructuring INDEPENDENTûINVESTMENTûBANKSûLIKEû COMPANIESûANDûCREDITORSûASûTHEYûWORKûTOûKEEPû revenue %VERCORE ûWHICHûSAWûREVENUEûFALLûNEARLYû STRUGGLINGûENTERPRISESûAmOATûASûTHEû#OVID û  ûANDû-OELIS ûWHEREûREVENUEûFELLûû PANDEMICûROILEDûECONOMIESûAROUNDûTHEûGLOBE 4HEûBANKûREPORTEDûAûNETûLOSSûOFû53Mû ,AZARDSûREVENUEûROSEûûANDû0*4û0ARTNERSû 'REENHILLSûRIVALSûHAVEûWELLûESTABLISHEDû FORûTHEûTHIRDûQUARTERûTOûTHEûENDûOFû SAWûREVENUEûRISEûAûWHOPPINGû RESTRUCTURINGûGROUPS ûANDûTHEûlRMSûBEATû 3EPTEMBER ûCOMPAREDûWITHûNETûINCOMEûOFû Who’s moving where…

Lucy To has joined from Deutsche Bank, CREDIT SUISSE has after eight years at WELLS FARGO as a where she focused on appointed Khalid Morgan Stanley. He managing director healthcare investment Krim as head of previously worked for in its healthcare banking coverage investment-grade CS from May 2010 coverage group in of biopharma capital markets for until September 2011 the corporate and companies. She the EU, based in Paris. as head of European investment bank. previously worked in Krim will continue hybrid capital, and She will be based in business development as co-head of debt before that spent New York, reporting at Intercept capital markets for eight years at Barclays to John Fowler, head Pharmaceuticals EMEA alongside and three years at of CIB healthcare and in healthcare Scott Roose. Krim Deutsche Bank. coverage focused on investment banking at rejoined Credit Suisse biotech. To joined Citigroup and Cowen. in November 2018

12 International Financing Review November 7 2020

4 IFR PM 2358 p11-20.indd 12 06/11/2020 20:39:03 People &Markets

resources to see them through the second WAVEûTHANûSMALLERûONES Citi chief risk officer exits h-OSTûOFûOURûLARGERûCLIENTS ûEXCEPTûINû CITIGROUPûCHIEFûRISKûOFlCERû"RADû(UûHASû -ARKû-ASONûISûAûRELATIVEûNEWCOMERû(EûWASû SECTORSûSUCHûASûTOURISMûANDûTRAVEL ûAREû RESIGNEDûLESSûTHANûAûMONTHûAFTERûTHEûBANKû NAMEDûTOûHISûPOSTûINû&EBRUARYû û RELATIVELYûBULLISHûANDûAREûCONVINCEDûTHEYû WASûlNEDû53MûBYûREGULATORSûFORûWEAKû REPLACINGûLONGTIMEû#&/û*OHNû'ERSPACH WILLûGETûTHROUGHûTHISûCRISIS vûHEûTOLDû)&2û RISKûCONTROLSûANDûCITEDûFORûAûFAILUREûTOû #ITIûSAIDûITûWILLûBEGINûAûSEARCHûFORûAûNEWû “Smaller clients tend to be struggling REMEDYûLONG STANDINGûDElCIENCIESû CHIEFûRISKûOFlCER ûBUTû(U ûAû YEARû#ITIû MOREvû 4HEûRESIGNATIONûFOLLOWSûTHATûOFû#ITIû#%/û VETERAN ûWILLûSTAYûONûTHROUGHûTOûTHEûENDûOFû "ORDENAVEûSAIDûTHEûSECONDûWAVEûMAYûHAVEû Mike Corbat, who announced in September THEûYEAR AûLESSERûIMPACTûTHANûTHEûlRSTûh4HISûTIMEûISû THATûHEûWOULDûBEûLEAVING ûJUSTûBEFOREûAû DIFFERENTûFROMûSPRINGûWITHûMEASURESûLESSû STINGINGûREBUKEûFROMûTHEû&EDERALû2ESERVEû “We respect [Hu’s] decision to UNIFORMûANDûLESSûBRUTALû4HEREûISûZEROINGûINû ANDûTHEû/FlCEûOFûTHEû#OMPTROLLERûOFûTHEû align his own timing with the ONûWHEREûPEOPLEûMEETû7EûTENDûTOûBEû #URRENCYûOVERûTHEûBANKSûFAILUREûTOûENHANCEû UNDERWEIGHTûONûSECTORSûWHICHûAREûDIRECTLYû RISKûCONTROLSû#ORBATûWILLûLEAVEûINû&EBRUARY CEO transition and his desire for IMPACTEDv Last month, the Fed said its most recent the function to reset” 3EVERINû#ABANNES ûDEPUTYûCHIEFûEXECUTIVEû SUPERVISORYûASSESSMENTûOFû#ITIûhIDENTIlEDû ANDûHEADûOFûGLOBALûBANKINGûANDûINVESTORû SIGNIlCANTûONGOINGûDElCIENCIESvûINûITSûRISKû SOLUTIONSûATû3' ûAGREEDûh4HEûSECONDûWAVEûINû management and internal controls in While Citi’s troubles with risk controls &RANCEûWITHûSOFTERûLOCKDOWNûRULESûMAYûNOTû VARIOUSûAREAS ûINCLUDINGûREGULATORYû HAVEûSHAKENûTHEûBANK ûITSûNOTûTHEûONLYûBANKû PRODUCEûASûMUCHûECONOMICûIMPACT vûHEûSAIDû reporting, compliance risk management, INûTROUBLEûWITHûTHEû/##û h7EûHAVEûEXPERIENCEDûTHEûDISRUPTIONû CAPITALûPLANNING ûANDûLIQUIDITYûRISKû *0û-ORGANûHASûADMITTEDûTHATûITSû*0û-ORGANû ALREADYvû(EûSAIDûSOMEûCORPORATEûCLIENTSû MANAGEMENT #HASEû"ANKûUNITûISûFACINGûANû/##ûAû WEREûALREADYûREIMBURSINGûEMERGENCYûCREDITû !TûTHEûSAMEûTIME ûTHEû/##ûlNEDû#ITIûFORû REGULATORYûlNEûOVERûINTERNALûCONTROLSûFORû LINESûPROVIDEDûINûTHEûSECONDûQUARTER ITSûLONGSTANDINGûFAILUREûTOûESTABLISHûEFFECTIVEû HISTORICALûDElCIENCIESûAROUNDûhINTERNALû )NûADDITIONûGOVERNMENTûSUPPORTûSCHEMESû RISKûMANAGEMENTûANDûDATAûGOVERNANCEû CONTROLSûANDûINTERNALûAUDITûOVERûCERTAINû and central bank measures remained in PROGRAMMESûANDûINTERNALûCONTROLS ADVISORYûANDûOTHERûACTIVITIESv PLACEûIFûTHEûECONOMICûPROSPECTSûWORSENED û *0û-ORGAN ûHOWEVER ûHASûALREADYûTAKENû THEû&RENCHûBANKûEXECUTIVESûSAID STEPSûTOûADDRESSûTHEûDElCIENCIES Christopher Spink The Fed said its most recent supervisory assessment of NEW CONSUMER BOSS Citi “identified significant Citigroup also announced that Anand 53MûAûYEARûAGO ûWHENûREVENUESûHITû ongoing deficiencies” in its h3ELVAvû3ELVAKESARIûHASûBEENûTAPPEDûASûTHEû 53Mû4HATûEQUATEDûTOûûCENTSûAûSHAREû NEXTû#%/ûOFûITSûGLOBALûCONSUMERûBANKINGû LASTûQUARTERûANALYSTSûHADûEXPECTEDûAûLOSSûOFûû risk management and internal GROUPû3ELVAKESARIûISûSUCCEEDINGû&RASER ûWHOû CENTSûAûSHAREûONûREVENUEûOFû53M controls used to run the consumer bank and will step 3TILL û'REENHILLû#%/û3COTTû"OKûISûOPTIMISTICû INTOûTHEû#%/ûHOT SEATûINû&EBRUARY THATûAûSTRONGûFOURTHûQUARTERûWILLûHELPûTHEû )NûAûMEMO û#ORBATûANDû#ITISûNEXTû#%/û*ANEû 3ELVAKESARIûISûAû YEARû#ITIûVETERANûWHOû BANKûTOûAûSOLIDûFULLûYEAR &RASERûSAIDûh7EûRESPECTû;(US=ûDECISIONûTOû HASûSERVEDûASû#%/ûOFû#ITISû53ûCONSUMERû )NûAûCALLûWITHûANALYSTS û"OKûSAIDûBASEDûONû ALIGNûHISûOWNûTIMINGûWITHûTHEû#%/ûTRANSITIONû BANKINGûSINCEû THEûEXPECTEDûTIMINGûOFûVARIOUSû-!ûANDû ANDûHISûDESIREûFORûTHEûFUNCTIONûTOûRESETûASû )NûTHEûMEMO û#ORBATûANDû&RASERûCREDITEDû RESTRUCTURINGûPROJECTS û'REENHILLûEXPECTSûAû ;&RASER=ûLEADSûTHEûMANAGEMENTûTEAMûONûTHEû 3ELVAKESARIûWITHûUNIFYINGûTHEûBANKSû PARTICULARLYûSTRONGûFOURTHûQUARTER ûhRESULTINGû lRM WIDEûTRANSFORMATIONûTHATûLIESûAHEADv PRODUCTSûINTOûhONEûCLIENT CENTRICûBUSINESS vû INûAûRESPECTABLEûREVENUEûOUTCOMEûANDûAûNETû 4HEûDEPARTUREûCLEARSûTHEûDECKSûFORûTHEû ANDûDEPLOYINGûAûhDIGITAL lRSTvûSTRATEGYûTHATûISû PROlTûFORûTHEûFULLûYEARv NEWû#%/ûTOûPUTûHERûSTAMPûONûTHEûEXECUTIVEû ELEVATINGûGROWTHûINûTHEûBUSINESS Philip Scipio TEAMû4HEûBANKSûCHIEFûlNANCIALûOFlCERû Philip Scipio

Please contact us if you have information about job moves: [email protected]

Sam Whittaker has of Lazard’s restructuring BRITISH ARAB and Africa. Norton signed up with LAZARD practice for EMEA. COMMERCIAL BANK spent 14 years at for a third time, joining Whittaker first joined has appointed former HSBC, most recently its financial advisory Lazard in 2005, spent HSBC executive Eddie as head of capital business to help lead its a year at advisory Norton as interim strategic initiatives in UK restructuring team firm Hakluyt before chief executive. BACB its global banking and in London. He rejoined returning, until moving is based in London markets investment after five years at rival to PJT. He previously and specialises in bank arm. He was PJT Partners, most worked on London’s international trade previously European recently in its EMEA successful bid to host products for clients in head of HSBC’s global restructuring group. the 2012 Olympic developing markets, liquidity and cash He will work alongside Games. especially to and management division. David Burlison, co-head from the Middle East

International Financing Review November 7 2020 13

4 IFR PM 2358 p11-20.indd 13 06/11/2020 20:39:13 Bellwether Bellwether: n. From the practice of placing a bell around the surrounding its proposed thermal coal mine in Queensland, neck of a castrated ram so that it might lead its flock !USTRALIAû h7EûBELIEVEûITSûTAKENûAûLOTûOFûCOURAGEûANDûBRAVERYûFORûUSû '/,$-!.û3!#(3û(!3ûCLAWEDûBACKûMILLIONSûOFûDOLLARSûINû TO û)ûGUESS ûSTANDûUPûFORûWHATûWEûBELIEVEûINûANDûSTANDûUPûFORû BONUSESûFROMûPRESENTûANDûFORMERûEXECUTIVESûASûITûLOOKSûTOû OURûCOMMUNITY vû!DANIû-ININGû!USTRALIAû#%/û$AVIDû"OSHOFFû CLEANûUPûITSûACTûAFTERûTHEû-$"ûSCANDAL TOLDû!"#û.EWSûINû!USTRALIAûh@"RAVUSûWASûCHOSENûBECAUSEû )TSûANûACCEPTANCEûOFûRESPONSIBILITYûTHATûALSOûCOMESû ITûWASûTHEû,ATINûWORDûFORûBRAVE vûHEûADDEDû%XCEPTûITûISNTû WITHûITSûOWNûHANDBOOKûnûAûSEVEN PAGEûPUBLICATIONûCALLEDû 4HEû,ATINûWORDûFORûBRAVEûISûhFORTISv ûBUTûTHATSûALREADYûBEENû hCOMPLETEDûANDûONGOINGûENHANCEMENTSûSINCEûTHEû-$"û TAKENûBYû".0û0ARIBASû2"3ûHASûRECENTLYûBECOMEûAVAILABLE û TRANSACTIONSv ûAûTITLEûTHATûSOUNDSûLIKEûITûISûSTRAIGHTûOUTûOFûTHEû THOUGHûTHATûMIGHTûSTILLûBEûTOOûTOXICûFORû"OSHOFFû ESTATEûAGENTSûBOOKûOFûEUPHEMISMS 4HOSEûWHOûAREûHAVINGûBONUSESûCLAWEDûBACKûINCLUDEû#%/û 7/2+).'û/.û4(%ûBIGGESTû)0/ûINûTHEûWORLDûUSUALLYûCONFERSû $AVIDû3OLOMONûASûWELLûASûHISûPREDECESSORû,LOYDû"LANKFEIN û BRAGGINGûRIGHTSûANDûINûTHEûCASEûOFû!NT ûITSûNOûDIFFERENTû ANDûAûhVICEûCHAIRMANûANDûCO #%/ûOFû'OLDMANû3ACHSû 'OLDMANû3ACHSûANDû"ANKûOFû!MERICAûCANûCLAIMûWELL DESERVEDû )NTERNATIONALv ûTHOUGHTûTOûBEû-ICHAELûh7OODYvû3HERWOOD PLAUDITSûnûFORûNOTûWINNINGûAûROLEûONûTHEûCANCELLEDûLISTING 7OODYûHASûBEENûINûTHEûNEWSûRECENTLYûBECAUSEûHEûISû MENTIONEDûBYû3ASHAû3WIRE ûWIFEûOFûFORMERû4ORYû-0û(UGO û -%!.7(),% û5"33û.%7û#%/û2ALPHû(AMERSûLANDEDûLASTû INûHERûKISS AND TELLûBOOKûABOUTûTHEûRICHûANDûPOWERFULû WEEKûANDûPOSTEDûAûWELCOMEûVIDEOûTOûALLûSTAFFûh(Iû)Mû $ESCRIBINGûAûDINNERûATûWHICHû7OODYûWASûPRESENT û 2ALPHv ûHEûSAID ûPROJECTINGûHIMSELFûASûAûMANûOFûTHEûPEOPLEû 3WIREûSAIDûTHEû'OLDMANûMANûISûSAIDûTOûBEûhVERY ûVERYû 5NFORTUNATELY ûHEûHASûUNDERCUTûTHATûIMAGEûBYûBUYINGûAû UNCOMMUNICATIVEv ûSOMETHINGûTHATûANYûJOURNALISTûWHOûHASû HOUSEûINû:UG ûWHEREûTAXESûAREûLOWERûTHANûINû:URICH ûWHEREû HADûTHEûhPLEASUREvûOFûDININGûWITHûHIMûCANûONLYûAGREEûWITHû 5"3ûPREFERSûITSûBANKûEXECUTIVESûTOûLIVE 4HEûEDITORûOFûAûCERTAINûWEEKLYûlNANCIALûMARKETSûPUBLICATIONû /RûMAYBEûHEûJUSTûWANTEDûTOûAVOIDûLIVINGûINûPROXIMITYû RECALLSûAûLUNCHûATûWHICHûTHEûFORMERû'OLDMANûMANûSATûSILENTLYû TOû)QBALû+HAN û5"3SûHEADûOFûWEALTHûMANAGEMENT ûWHOû STABBINGûAûSALADûANDûREFUSINGûTOûSAYûANYTHINGû4HATSûANûHOURû FAMOUSLYûFELLûOUTûWITHûHISûFORMERûBOSSû4IDJANEû4HIAMûAFTERû OFûHISûLIFEûHEDûDEARLYûLIKEûTOûhCLAWûBACKv BUYINGûAûPROPERTYûNEXTûDOORûTOûHIMûANDûPLANTINGûSOMEû UNWANTEDûSHRUBS -).).'û#/-0!.9û!$!.)ûHASûCHANGEDûTHEûNAMEûOFûITSû !USTRALIANûOPERATIONûTOûh"RAVUSvûAû,ATINûWORDûTHATûMEANSû ,51-!.û!2./,$ û7(/ûWASûCHAIRMANûOFû5"3ûDURINGûTHEûLATEû hCROOKEDv ûhDEFORMEDv ûhMERCENARYûORûASSASSINv ûAFTERû S ûHASûBECOMEûTHEûLATESTûBANKERûTOûWRITEûAûBOOK MISTAKENLYûTHINKINGûITûMEANTûhBRAVEv 4HEûSUBJECTûISûBEHAVIOURALûECONOMICS ûALTHOUGHûHEû 0ROVINGûTHATûAûLITTLEûBITûOFûKNOWLEDGEûCANûBEûAûDANGEROUSû CONlDEDûINûANûINTERVIEWûWITHûlNEWSûTHATûWRITINGûISûAûTOUGHû THING ûTHEûCOMPANYûDENIEDûTHEûNAMEûCHANGEûISûBECAUSEû GIGûh)ûlNDûITûINCREDIBLYûHARDûTOûDOû)TSûMUCHûMOREûDIFlCULTû THEûBRANDûHASûBECOMEûTOXICûASûAûRESULTûOFûTHEûCONTROVERSYû THANûTHEûMERGERûBETWEENû5"33"'
vûû„ Who’s moving where…

„ Former Lazard chief executive of „ BP is hiring FIG „ WELLS FARGO has „ Sofia Lonnqvist has before moving to the technology banker investment company banker Niamh hired Kleber Santos to joined BNP PARIBAS investment bank in Patrick Sayer is Eurazeo for 16 years Staunton from head a newly created from Barclays for its 2017. Since January teaming up with until 2018. In March MORGAN STANLEY diverse segments, northern European 2019 she has been Jean-Marie Messier at 2018 Sayer set up as its group representation and FIG debt capital a director in its FIG the latter’s advisory investment vehicle treasurer, a source inclusion group. markets team, sources DCM team covering boutique. Sayer will AUGUSTA, where he said. Staunton was Santos joined from said. Lonnqvist the Nordics. Prior to become a senior is president. Augusta previously a managing Capital One Financial will be based in Barclays, Lonnqvist adviser to MESSIER already has a stake director in Morgan Corp., where he Stockholm. She has worked as an analyst & ASSOCIATES. in Messier’s business Stanley’s debt capital worked for 15 years worked at Barclays at UBS, Bank of He was at Lazard and will merge its markets department and was most recently since 2013, initially America Merrill Lynch from 1982 to 2002 activities with the covering European president of retail and in its debt investor and RBS. and left to become boutique. financial institutions. direct banking. relations department

14 International Financing Review November 7 2020

4 IFR PM 2358 p11-20.indd 14 06/11/2020 20:39:16 People &Markets Natixis appoints CIB heads NATIXIS appointed Anne-Christine Champion and 6INCENTûWILLûBEûINûCHARGEûOFûMANAGINGû 4HEûBANKûSAIDûITSûEQUITYûDERIVATIVESûARM û Mohamed KallalaûASûCO HEADSûOFûCORPORATEûANDû .ATIXISûRELATIONSHIPSûWITHûBOUTIQUESûITûHASû WHICHûSUFFEREDûLOSSESûINûTHEûlRSTûHALF ûWASû INVESTMENTûBANKING ûSUCCEEDINGûMarc Vincent INVESTEDûIN ûSUCHûASû0*û3OLOMONûINûTHEû53û NOWûMAKINGûMONEYûAGAINû.ATIXISû WHOûHASûBEENûSOLEûHEADûSINCEûûANDûISû ANDû&ENCHURCHû!DVISORYû0ARTNERSûINûTHEû5+ û ANTICIPATESûõMûINûNETûREVENUESûFROMûTHATû MOVINGûTOûHEADûGLOBALû-! AûSTRATEGYûHEûSETûUPûINûHISûCURRENTûROLE BUSINESSûANNUALLY #HAMPIONûISûHEADûOFûREALûASSETSûANDû .ATIXISûLASTûWEEKûREPORTEDûAûûFALLûINû h4HEûRESULTSûOFûOURûCORPORATEûANDû +ALLALAûISûHEADûOFûGLOBALûMARKETSûATûTHEû UNDERLYINGûREVENUESûTOûõBNûFORûTHEûTHIRDû INVESTMENTûBANKINGûBUSINESSûWILLûBECOMEû &RENCHûBANKû)Nû!UGUSTû.ICOLASû.AMIASûWASû QUARTERû)TûSAIDûITûWASûINûDISCUSSIONSûWITHû STEADIERûTHROUGHûTHEûADJUSTMENTûOFûOURû APPOINTEDûCHIEFûEXECUTIVEûOFû.ATIXIS û SUBSIDIARYû(û!SSETû-ANAGEMENTûABOUTûANû EQUITYûDERIVATIVESûPOSITIONINGûANDûTHROUGHû SUCCEEDINGû&RANCOISû2IAHIûWHOûLEFTûAFTERûTWOû hORDERLYûUNWINDINGvûOFûITSûPARTNERSHIPûWITHû THEûREDUCTIONûOFûOURûEXPOSUREûTOûTHEûOILûANDû YEARSûINûTHEûPOSTû.AMIASûWASûlNANCEû THEûINVESTMENTûMANAGER ûWHICHûHASûSUFFEREDû GASûSECTOR vûSAIDû.AMIAS DIRECTORûOFû.ATIXISûPARENTû'ROUPû"0#% OUTmOWSûRECENTLY Christopher Spink

Dissera hired to lead Alantra’s new securitisation team 3PANISHûBOUTIQUEûINVESTMENTûBANKûALANTRA !FRICA ûANDûLEADINGûITSû%-%!ûSECURITISATIONû h7EûBELIEVEûWEûALREADYûHAVEûAûVERYû hired Francesco DisseraûTOûLEADûAûNEWLYûCREATEDû TEAMû"EFOREûTHATûHEûSPENTûTHREEûYEARSûATû*0û unique skill set when it comes to modelling SECURITISATIONûBUSINESS ûFOCUSEDûONû -ORGANûINû,ONDONûANDû.EWû9ORK ASSETûPERFORMANCEûTHROUGHûTHEûCYCLEûANDû European corporates, banks and !LANTRAûSAIDû$ISSERAûWORKEDûONûMOREûTHANû ;$ISSERAS=ûKNOWLEDGEûONûTHEûLIABILITIESûSIDEû GOVERNMENTûASSETS ûASSET BACKEDûSECURITISATIONûTRANSACTIONSû WILLûHELPûUSûEXPANDûOURûEXPERTISEûANDû Alantra said the securitisation business INû%-%! ûWITHûAûFOCUSûONûlNANCIALû reputation in the securitisation business as would be based in London with more than INSTITUTIONS ûCORPORATEûANDûGOVERNMENT THEûGO TO ûINDEPENDENTûARRANGERûFORû ûPEOPLEûADVISINGûONûSECURITISATIONûANDû RELATEDûASSETS SECURITISATIONSûWHEREûTHEûTRANSFERûOFûRISKûISûAû SECUREDûlNANCINGûTRANSACTIONSûACROSSû KEYûDRIVERûFORûOURûCLIENT vûSAIDû.ICHOLASû %UROPEû$ISSERAûWILLûWORKûALONGSIDEû*AMESû “Knowledge on the liabilities Colman, managing partner at Alantra’s &ADEL ûWHOûLEADSû!LANTRASûSECUREDûFUNDINGû CREDITûPORTFOLIOûADVISORYûBUSINESS BUSINESS ûWHICHûFOCUSESûONû%UROPEANûBANKSû side will help us expand our !LANTRAûSAIDûITSû#0!ûTEAMûHADûADVISEDûONû ANDûNON BANKûLENDERS expertise and reputation in the MOREûTHANûûDEALSûINûDISTRESSEDûCREDITû $ISSERAûJOINEDûFROMû3ANTANDER ûWHEREûHEû securitisation business as the SITUATIONSûSINCEûûWITHûAûCOMBINEDûVALUEû led the Spanish bank’s Continental Europe go-to, independent arranger for OFûMOREûTHANûõBNû)TûWASûCO ARRANGERûANDû SECURITISATIONûBUSINESSû0RIORûTOûJOININGû securitisations” lNANCIALûLEADûADVISERûTOû%UROBANKûONûTHEû 3ANTANDERûINû*ULYû ûHEûWASûHEADûOFû lRSTû'REEKû.0,ûSECURITISATION ûWHICHûHADûAû STRUCTURINGûANDûADVISORYûATû3TORM(ARBOURû BOOKûVALUEûOFûõBN ûANDûTHENûWORKEDûONûITSû 3ECURITIESûFORûFOURûYEARSû$ISSERAûPREVIOUSLYû !LANTRAûADVISESûONûDISTRESSEDûCREDITû õBNû0ROJECTû#AIROû.0,ûSECURITIATION ûANDû SPENTûûYEARSûATû5"3ûFROMûûTOû û PORTFOLIOSûINû%UROPE ûANDûHASûWORKEDûONû HASûADVISEDû0IRAEUSû"ANKûANDû"ANKûOFû HELPINGûBUILDûITSûSECURITISATIONûANDûCOVEREDû MANYûOFûTHEûMAJORûNON PERFORMINGûLOANû #YPRUSûONûDEALS bond business across Europe, Middle East and TRANSACTIONSûINûRECENTûYEARS Steve Slater

Please contact us if you have information about job moves: [email protected]

„ ALVAREZ & London but work „ UNICREDIT has left in 2008 to head „ BLACKSTONE has „ LANSDOWNE MARSAL has hired across Europe. Before appointed Serenella internal audit at the hired Eric Duchon as PARTNERS has hired Tom Johannessen Deloitte, Johannessen De Candia as chief Mediolanum group. global head of real Brian Heyworth as as UK head of was deputy chief compliance officer. De De Candia will take estate ESG, a new co-managing partner financial industry financial officer and Candia is currently in over as CCO from role, to oversee its to lead strategic advisory services. group treasurer at charge of the internal Carlo Appetiti, who environmental, social development, Reuters Johannessen joined Nordea Bank. He audit function after is leaving to work on and governance reported. Heyworth from accountancy firm has also worked at rejoining UniCredit a project aimed at effort in real estate was previously head of Deloitte, where he was Barclays, Dresdner in 2011. She initially supporting the Italian investments. Duchon HSBC’s FIG group and a managing partner Kleinwort, Citigroup joined UniCredit in economy. Guglielmo was previously global has worked at Bank in financial services and DNB. 2000, after starting Zadra, head of head of sustainability of America and JP advisory. Johannessen her career in audit at regulatory affairs, will at LaSalle Investment Morgan. will be based in Arthur Andersen, but head internal audit. Management.

International Financing Review November 7 2020 15

4 IFR PM 2358 p11-20.indd 15 06/11/2020 20:39:16 h7EREûDElNITELYûSEEINGûAûHUGEû UPTICKûINû%3'ûINû!SIAv ELIZABETH STUART, SUSTAINABILITY RESEARCH ANALYST AT MORNINGSTAR, P19 Capital markets week ahead: Airbnb, European Union, Zambia

HOST WITH THE MOSTû!IRBNBûISûEXPECTEDûTOû SHOREûUPûITSûBADLYûHITûBALANCEûSHEETû4HEû PROVIDESûSERVICESûTOûFOSSILûFUELûlRMS ûISûEYEINGû MAKEûAûFORMALûREGISTRATIONûTOûGOûPUBLIC û COMPANY ûWHICHûOPERATESûûSHOPPINGû 2MûFROMûITSûLISTINGûTHEûSAMEûDAYû/Nû TEEINGûUPûTHEûHOMEûRENTALûPLATFORMSûLONG centres across Europe and the US, has 4UESDAY ûREALûESTATEûDEVELOPERû!LPHAVILLEûHOPESû AWAITEDû)0/ûBEFOREûTHEûENDûOFûTHEûYEARû4HEû ALREADYûSLASHEDûCOSTS ûCUTûITSûDIVIDENDûANDû TOûRAISEû2MûFROMûITSû3AOû0AULOûLISTING DEAL ûWHICHûCOULDûRAISEûASûMUCHûASû53BN û PUTûPROPERTIESûUPûFORûSALEûASûITûGRAPPLESûWITHû WILLûBEûTHEûSECOND LARGESTû53ûLISTINGûOFûTHEû AûCOLLAPSEûINûVISITORS ûANDûTENANTSûUNABLEûTOû COOKING WITH GASû)4-û0OWERûEXPECTSûTOû YEARûAFTERûDATAûWAREHOUSEû3NOWmAKEûRAISEDû PAYûRENTû COMPLETEûAûaMûSHAREûPLACINGûONû 53BNûFROMûITSû)0/ûINû3EPTEMBER ûANDû 7EDNESDAYû4HEû5+ûCOMPANY ûWHICHûMAKESû SAWûITSûSHARESûDOUBLEûONûTHEûlRSTûDAY ELECTROLYSERûSYSTEMSûTOûPRODUCEûHYDROGEN ûISû "UTûTHEûOUTLOOKûFORû!IRBNBûISûUNCERTAINû RAISINGûMONEYûTOûEXPANDûCAPACITYûAMIDûTHEû 4HEûPANDEMICûANDûRESTRICTIONSûONûTRAVELûHASû GROWINGûSHIFTûTOûCLEANûENERGYû4HEûPLACINGûWASû decimated its business, and it is unclear GIVENûAûBOOSTûLASTûMONTHûWHENû)TALIANûENERGYû WHENûNORMALITYûWILLûRETURNû0ROCEEDSûFROMû lRMû3NAMûSAIDûITûWOULDûBUYûANûADDITIONALû THEû)0/ûWILLûGIVEûITûSOMEûBREATHINGûSPACEû aMûANDûMAKEû)4-ûAûPREFERREDûSUPPLIER JUSTûMONTHSûAFTERûITûHADûTOûTAPûINVESTORSû INCLUDINGû3ILVERû,AKEûANDû3IXTHû3TREETû OUT ON BAIL The European Financial 0ARTNERSûFORûAû53BNûEMERGENCYûLOANû 3TABILITYû&ACILITYûISûSETûFORûITSûlNALûBONDûSALEû DURINGûTHEûlRSTûWAVEûOFûTHEûVIRUSûINû!PRILû OFûTHEûYEAR ûWITHûTHEûAGENCYûEXPECTEDûTOûGETû OUTûEARLYûTOûAVOIDûAûCLASHûWITHûTHEû%5û352%û DEALû4HEû%&3& ûWHICHûWASûSETûUPûINûûASûAû ROOM FOR RENT Chinese real estate TEMPORARYûMECHANISMûTOûFUNDûBAILOUTSûFORû DEVELOPERû*INKEûCOMPLETESûTHEûSPIN OFFûOFûITSû %UROPEANûCOUNTRIES ûHASûEXTENDEDûLOANSûTOû PROPERTYûMANAGEMENTûBUSINESSûONû4UESDAYû 'REECE û)RELANDûANDû0ORTUGALû)TûLASTûSOLDû )TûISûSELLINGûNEWûSHARESûASûPARTûOFûTHEû(ONGû õBNûOFûBONDSûINû/CTOBER +ONGûLISTING ûWHICHûCOULDûRAISEûASûMUCHûASû (+BNû53M ûWHICHûITûPLANSûTOûUSEûTOû CHANNEL HOPPING Canal+ Polska will price EXPANDûTHEûBUSINESSûnûANDûPOSSIBLYûBUYûRIVALSû THEûRETAILûTRANCHEûOFûITSû:BNû53M û 4ENûCORNERSTONEûINVESTORSûHAVEûALREADYû 7ARSAWûLISTINGûONû4UESDAYû$ISCOVERYûANDû OFFEREDûTOûBUYûALMOSTûHALFûTHEûSHARES ,IBERTYû'LOBAL ûWHICHûOWNûJUSTûUNDERûHALFûOFû THEû0OLISHûPAY 46ûOPERATOR ûAREûUSINGûTHEû)0/û FAN BASEû2OLLS 2OYCEûWRAPSûUPûAûaBNûRIGHTSû TOûSELLûOUTûOFûTHEûJOINTûVENTURE ûWHILEû ISSUEûONû7EDNESDAY ûSIXûWEEKSûAFTERûTHEûAEROû MAJORITYûOWNERû6IVENDIûHASûDECIDEDûTOûSTAYû TO BE SUREû4HEû%UROPEANû5NIONûISûSETûFORû engine maker announced plans to raise ONû4HEûINSTITUTIONALûTRANCHEûOPENSûONû THEûSECONDûSOCIALûBONDûSALEûUNDERûITSû352%û aBNûTOûSTRENGTHENûITSûlNANCES ûWHICHûHAVEû 7EDNESDAY ûWITHûALLOCATIONSûWEEKûLATER PROGRAMME ûJUSTûTHREEûWEEKSûAFTERûITûBROKEû BEENûBADLYûHITûBYûTHEûPANDEMICûANDûCOLLAPSEû RECORDSûWITHûITSûlRSTûDEALû4HEûSUPRANATIONALû INûAIRûTRAVELû4HEûRIGHTSûISSUEûISûTHEûlNALû FASTEN YOUR SEATBELTS *APANû!IRLINESû GOTûMOREûTHANûõBNûOFûORDERSûFORûITSû PIECEûITûHASûALREADYûSECUREDûaBNûOFûBANKû OPENSûBOOKSûONû4HURSDAYûONûAûcBNû õBNûDEBUT ûTHEûBIGGESTûORDERûBOOKûEVERû LOANS ûANDûAûHIGH YIELDûBONDûSOLDûLASTûMONTHû 53BN ûFOLLOW ONûSHAREûOFFERING ûTHEû SEENûFORûAûBONDûSALEû352% ûAûSCHEMEû RAISEDûDOUBLEûITSûORIGINALûTARGETû LATESTûAIRLINEûTOûRAISEûEMERGENCYûFUNDSû DESIGNEDûTOûSAVEûJOBSûATûRISKûFROMûTHEû Proceeds will be used to restructure the PANDEMIC ûISûONEûPIECEûOFûANûõBNûRESCUEû carrier to adapt to the pandemic, accelerate

PROGRAMME AûREDUCTIONûOFûITSû#/2ûEMISSIONS ûANDûREPAYû DEBT DEFAULT SETTINGû&RIDAYûISûTHEûDEADLINEûFORû :AMBIASûCREDITORSûTOûAGREEûORûREJECTûAû REQUESTûTOûDEFERûPAYMENTSûONû53BNûOFû LAST WEEK IN NUMBERS BONDSû4HEûCOUNTRY ûWHICHûWASûSTRUGGLINGû US$400m –û5NDERWRITINGûLOSTûAFTERû EVENûBEFOREûTHEûPANDEMICûAFTERûAûCOLLAPSEûINû regulators pulled the plug on Ant THEûPRICEûOFûCOPPER ûITSûMAINûEXPORT ûASKEDû 'ROUPSû53BNû)0/ FORûTHEûSTANDSTILLûINû3EPTEMBERûnûBUTûHASûSOû One – .UMBERûOFûCORPORATEûBONDûDEALSûINû FARûHADûNOûLUCKû7ITHOUTûAGREEMENTûBYû Europe, amid contested US presidential &RIDAY ûITûWILLûBEûOFlCIALLYûINûDEFAULT election THREE’S A CROWDû)TSûAûBUSYûWEEKûFORû)0/SûINû £150bn –û.EWûBONDûPURCHASESû COMING SOONû5NIBAIL 2ODAMCO 7ESTlELDû "RAZILû7INDûTURBINEûMANUFACTURERû!ERISûISû ANNOUNCEDûBYûTHEû"ANKûOFû%NGLAND ûINûITSû HOLDSûAûSHAREHOLDERûMEETINGûONû4UESDAYûTOû HOPINGûTOûCOLLECTû2BNû53M ûFROMûITSû lGHTûAGAINSTûRECESSION VOTEûONûITSûPLANSûFORûAûõBNûRIGHTSûISSUEûTOû LISTINGûONû-ONDAYû0ETROLEUMû/LEAûEû'AS ûWHICHû

16 International Financing Review November 7 2020

4 IFR PM 2358 p11-20.indd 16 06/11/2020 20:39:39 People &Markets ABN AMRO selling APAC loan portfolio

ABN AMRO BANK is approaching lenders to 4HEûRESTRUCTURINGûFOLLOWSûSEVERALû *APFA û)NDIASûAGROCHEMICALSûCOMPANYû50,û OFmOADûITSûLOANûPORTFOLIOûINû!SIA 0ACIlCûASû ATTEMPTSûTOûINCREASEûPROlTABILITYûANDûREDUCEû ANDû#/&#/û)NTERNATIONAL ûTHEûOVERSEASû THEû$UTCHûBANKûWINDSûDOWNûITSûOPERATIONSû RISKSûATû!".Sû#)"ûAFTERûDIFlCULTIESûINûTHEû AGRICULTUREûBUSINESSûPLATFORMûOFû#/&#/û OUTSIDEûNORTHWESTû%UROPE OFFSHOREûENERGYûMARKETSûSADDLEDûITûWITHû #ORP û#HINASûLARGESTûFOODûANDûAGRICULTUREû The bank is selling its corporate loan LOSSESûONûITSûLOANS COMPANY ûAMONGûOTHERS BOOKûINû!0!# ûANDûISûBUNDLINGûPROJECTû 7RITE OFFSûATû#)"ûHITûõBNûINûTHEûlRSTû lNANCEûLOANSûINûTHEûREGIONûINTOûPARCELSûBYû HALF ûUPûFROMûõMûAûYEARûBEFORE ûASûOILûANDû PIECEMEAL APPROACH COUNTRIES gas sector loans soured and Asian clients, !".ûISûNOTûTHEûlRSTûINû!SIAûTOûWINDûDOWNûITSû !".ûHASûAROUNDûûLOANSûTOû!SIANû INCLUDINGû#HINASû&ANGYUANû'ROUPûANDû LOANûPORTFOLIOû)TûISûSELLINGûTHEûCORPORATEû BORROWERSûTHATûMATUREûBETWEENûûANDû 3INGAPORE BASEDû(INû,EONGû4RADING ûGOTûINTOû LOANSûINDIVIDUALLY ûHOWEVER ûUNLIKEûTHEû  ûWITHû3INGAPOREûANDû!USTRALIAû TROUBLE BLOCKûSELL DOWNSûOTHERûBANKSûHAVEûENGAGEDû ACCOUNTINGûFORûûDEALSûCOMBINED ûACCORDINGû INûASûPARTûOFûTHEIRûPORTFOLIOûMANAGEMENTû TOû2ElNITIVû,0#ûDATA ACTIVITIESûORûRETREATûFROMûLENDINGûINûTHEû 4HEûPROPOSEDûSALEûOFûLOANSûFOLLOWSû!".Sû It is selling the corporate loans REGION ANNOUNCEMENTûINû!UGUSTûTHATûITûWILLûFOCUSû individually, unlike the block )Nû û#HINAû#ITICû"ANKû)NTERNATIONALSû on clients in northwest Europe and clearing sell-downs other banks have (ONGû+ONGûBANKINGûUNITûCIRCULATEDûANûAXEû GLOBALLYû4HEûBANKûSAIDûITûWOULDûENDûALLûTRADEû engaged in SHEETûOFûûLOANSûFORûSALEûTOTALLINGûMOREûTHANû ANDûCOMMODITYûlNANCINGûAFTERûAûSERIESûOFû 53BNûINûTHEûSECONDARYûMARKETû-OSTûOFû LOSSESûANDûTHATûITSûCORPORATEûBANKûWILLûEXITû the loans were to Chinese companies, THEû53 û!SIA û!USTRALIAûANDû"RAZIL DENOMINATEDûINû53ûANDû(ONGû+ONGûDOLLARSû !ûNON COREûUNITûFORûCORPORATEûANDû !".Sû!SIANûLOANSûPORTFOLIOûINCLUDESû ANDûMATURINGûBETWEENûûANDûû institutional banking will be set up, EXPOSURESûTOûOILûANDûGASûSUCHûASûTHEû)CHTHYSû )Nû û2OYALû"ANKûOFû3COTLANDûSOLDû COMPRISINGûABOUTûõBNû53BN ûOFûRISK ,.'ûPROJECT û/RIGINû%NERGYûANDû7OODSIDEû AROUNDû53BNûOFûITSû!SIANûLOANûPORTFOLIOûINû WEIGHTEDûASSETS ûORûûOFû#)"SûTOTALû4HEû 0ETROLEUMûINû!USTRALIAû)TûALSOûHASûEXPOSURESû ANûUNPRECEDENTEDûSERIESûOFûBLOCKûSALES û NON COREûARMûWILLûHAVEûABOUTûõBNûOFû TOû4REASURYû7INEû%STATESûANDûDATAûCENTREû WINDINGûDOWNûNEARLYûAûDECADE OLDûOPERATIONû CLIENTûLOANS OPERATORSû!IR4RUNKûANDû#ANBERRAû$ATAû INûTHEûREGIONû2"3ûHADûINHERITEDû!".SûLEGACYû !BOUTûûOFûTHEûNON COREûPORTFOLIOûWOULDû #ENTRES OPERATIONSûINû!SIAûINûLATEûûWHENûTHEû MATUREûBYûûTHROUGHûNATURALûRUN OFFSû %LSEWHEREûINû!SIA ûTHEû$UTCHûBANKûWASû British lender led a three-bank consortium to ANDû!".ûSAIDûITûWOULDûCONSIDERûOPTIONSûTOû LENDERûTOû3INGAPOREûAGRI FOODûANDû ACQUIREûTHEûORIGINALû!".û!-2/ ACCELERATEûTHEûWIND DOWN COMMODITYûlRMSû%COMû!GROINDUSTRIALûANDû Mariko Ishikawa Macquarie books first investment banking loss MACQUARIE GROUPûRECORDEDûITSûlRST EVERûLOSSûINû IMPACTûOFû#OVID  ûWHILEûITSûPERFORMANCEûINû YEARSûRESULTS ûBUTûLOWERûPERFORMANCEûFEES û ITSûINVESTMENTûBANKINGûANDûPRINCIPALû INVESTMENTûBANKINGûWASûMIXEDûASûLOWERû LOWERûINVESTMENT RELATEDûINCOMEûANDûLOWERû lNANCEûARMûASûPARTûOFûAûûDROPûINûPROlTû -!ûFEESûWEREûPARTIALLYûOFFSETûBYûHIGHERûFEESû INCOMEûFROMûAIRCRAFTûLEASINGûCONSPIREDûTOû FORûTHEûlRSTûHALFûOFûITSûûlSCALûYEAR FROMûEQUITYûCAPITALûMARKETS DRAGûEARNINGSûLOWER !USTRALIASûPRE EMINENTûINVESTMENTûBANKû 0ROlTûFROMû-ACQUARIESûMARKET FACINGû )NûBANKINGûANDûlNANCIALûSERVICES û ANDûINVESTMENTûMANAGERûSAIDûGROUPûPROlTû BUSINESSESûNOSEDIVEDûûTOû!MûASû Macquarie saw margin compression on FORûTHEûSIXûMONTHSûTOûTHEûENDûOFû3EPTEMBERû commodities and global markets, which deposits and increased credit impairment WASû!Mû53M ûDOWNûFROMû STRADDLESûBOTHûMARKET FACINGûANDûANNUITY CHARGES ûPARTIALLYûOFFSETûBYûLOANûANDûDEPOSITû !BNûAûYEARûEARLIER STYLEûBUSINESSES ûRECORDEDûAûûDIPûINû GROWTH 4HATûWASûBETTERûTHANûTHEûûDROPûINûlRST lRST HALFûPROlTûTOû!BNûASûWELL !NALYSTSûSAIDûTHEûBANKûWASûSTILLûSTRUGGLINGû HALFûPROlTûCHIEFûlNANCIALûOFlCERû!LEXû(ARVEYû -ACQUARIEûSAIDûAûBUMPERûlRSTûQUARTERûINû TOûREALISEûGAINSûONûTHEûSALEûOFûASSETSûDUEûTOû FORECASTûINû3EPTEMBER ûANDûWASûSETûAGAINSTûAû COMMODITIES ûWHICHûACCOUNTûFORûTHEûBULKûOFû THEûREQUIREMENTûFORûON THE GROUNDûDUEû RECORDûYEAR AGOûPERFORMANCE REVENUESûINûTHEûGLOBALûMARKETSûDIVISION ûWASû DILIGENCE ûPARTICULARLYûFORûHARDûASSETSûLIKEû 4HEûBANKSûRESULTSûWEREûDRAGGEDûDOWNûBYû NOTûREPEATEDûDURINGûTHEûSECONDûQUARTER INFRASTRUCTURE ûASûAûRESULTûOFû#OVID  ANû!MûLOSSûATû-ACQUARIEû#APITALû !NNUITY STYLEûBUSINESSESûRECORDEDûAûû -ACQUARIEûSLASHEDûITSûINTERIMûDIVIDENDûTOû FOLLOWINGûANûINCREASEûINûCREDITûANDûOTHERû DROPûINûPROlTûTOû!BNûASûPROlTûFROMûTHEû !ûPERûSHARE ûTHEûMAXIMUMûAUTHORISEDû IMPAIRMENTûCHARGES ûPARTLYûDUEûTOûAûSMALLû ASSETûMANAGEMENTûDIVISIONûFELLûûTOû BYûTHEûREGULATOR ûFROMû!ûAûYEARûAGOû)TSû NUMBERûOFûUNDERPERFORMINGûLOANûFACILITIES !BN ûWHILEûPROlTûFROMûBANKINGûANDû #OMMONû%QUITYû4IERûûRATIOûCAMEûINûATû 4HEûBANKûALSOûBOOKEDûLOWERûINVESTMENT lNANCIALûSERVICESûFELLûûTOû!M  ûCOMFORTABLYûAHEADûOFûTHEûMINIMUMû RELATEDûINCOMEûPREDOMINANTLYûDUEûTOûFEWERû -ACQUARIEûSAIDûBASEûFEESûINûASSETû ûREQUIREMENTûUNDERû!USTRALIASûRULES MATERIALûASSETûREALISATIONSûBECAUSEûOFûTHEû MANAGEMENTûWEREûBROADLYûINûLINEûWITHûLASTû Thomas Blott

International Financing Review November 7 2020 17

4 IFR PM 2358 p11-20.indd 17 06/11/2020 20:39:39 h0ROGRESSIVESûHADûTHEIRûWINGSûCLIPPEDûANDûAû2EPUBLICANû 3ENATEûCOULDûBEûAûCHECKûONûOVERLYûPROGRESSIVEûNOMINEESv STIFEL POLITICAL ANALYST BRIAN GARDNER, P7

Hybrid working here to stay at StanChart STANDARD CHARTEREDûHASûTOLDûSTAFFûTHEYûCANû #HARTEREDûOFlCE ûTHEIRûHOME ûORûANûOFlCEû ONEûOFûTHEûlRSTûlRMSûTOûSETûOUTûITSûPLANSû)Tû WORKûFROMûHOMEûORûADOPTûAûHYBRIDûOFlCE LOCATIONûNEARûWHEREûTHEYûLIVEû4HEûBANKûSAIDûITû REmECTSûTHEûSUCCESSûMOSTûBANKSûHAVEûHADûINû AND HOMEûSET UPûIFûTHEIRûJOBûALLOWSûIT û WASûPARTNERINGûWITHûAûTHIRDûPARTYûCOMPANYûTOû WORKINGûFROMûHOMEûARRANGEMENTSûTHISûYEAR û MAKINGûPERMANENTûTHEûmEXIBLEûWORKINGû PROVIDEûADDITIONALûhNEAR HOMEvûWORKSPACES THEûLIKELIHOODûTHATûSTAFFûWILLûWANTûTOûKEEPû arrangements put in place during the SOMEûmEXIBILITY ûANDûTHEûCHANCEûTOûCUTûCOSTSûBYû CORONAVIRUSûPANDEMIC REDUCINGûOFlCEûSPACE Standard Chartered, which is based in It reflects the success in working 3TANDARDû#HARTEREDûSAIDûITûEXPECTEDûMOSTû ,ONDONûBUTûOPERATESûMOSTLYûINû!SIA ûTHEû from home arrangements, the EMPLOYEESûTOûCHOOSEûAûHYBRIDûPATTERNûOFû -IDDLEû%ASTûANDû!FRICA ûSAIDûTHEû likelihood that staff will want to SOMEûDAYSûINûTHEûBANKSûOFlCESûANDûSOMEû ARRANGEMENTûISûBEINGûMADEûAVAILABLEûTOûSTAFFû keep some flexibility, and the ELSEWHERE ûBUTûTHEYûCOULDûCHOOSEûûINû INûNINEûOFûITSûMAJORûMARKETSûnûINCLUDINGûTHEû ONEûLOCATIONûIFûTHEIRûROLEûALLOWS 5+ û53 û(ONGû+ONGûANDû3INGAPOREûnûFROMû chance to cut costs )TûSAIDûTHEûlRSTûPHASEûCOVERSûûOFûSTAFF û EARLYûNEXTûYEAR ANDûITûPLANSûTOûOFFERûmEXIBLEûWORKINGûTOûû %MPLOYEESûWILLûHAVEûTHEûOPTIONûTOûSELECTûHOWû "ANKSûAROUNDûTHEûWORLDûAREûEXPECTEDûTOû OFûSTAFFûBYûTHEûENDûOFûûANDûûBYû û MANYûDAYSûAûWEEKûTHEYûWOULDûLIKEûINûPREFERREDû ADOPTûMOREûmEXIBLEûWORKINGûARRANGEMENTSûONû ORû ûSTAFFûINûûMARKETS LOCATIONSûnûWHICHûCOULDûBEûTHEIRû3TANDARDû a permanent basis, but Standard Chartered is Steve Slater

HSBC cuts 100 senior roles in UK retail restructuring

HSBC ISûRESTRUCTURINGûITSû5+ûRETAILûBANKINGû MANAGERSûANDûSALESûANDûSERVICEûMANAGERS û (3"#ûCHIEFûEXECUTIVEû.OELû1UINNûPLANSûTOû NETWORKûTOûSIMPLIFYûITSûOPERATIONSûANDû BEINGûPUTûATûRISKûORûMOVEDûTOûDIFFERENTû CUTûABOUTû ûJOBSûACROSSû(3"#ûINûTHEûNEXTû reduce costs, which will see the bank cut ROLES FEWûYEARSûASûPARTûOFûAûMAJORûOVERHAULû4HEûBANKû ABOUTûûSENIORûROLES h)NûLINEûWITHûTHEûGROUPûSTRATEGYû PAUSEDûJOBûCUTSûINû-ARCHûAFTERûTHEûCORONAVIRUSû (3"#ûTOLDûSTAFFûLASTûWEEKûITSû5+ûBUSINESSûISû ANNOUNCEDûINû&EBRUARY ûWEûCONTINUEûTOû pandemic emerged, but it has since resumed MOVINGûTOûAûNEWûSTRUCTUREûOFûûREGIONS û RESTRUCTUREûANDûREVIEWûTHEûROLESûREQUIREDûTOû them and said last week 6,000 had been cut this SUBDIVIDEDûINTOûûLOCALûMARKETS ûAIMEDûATû TRANSFORMûTHEûBANK vûANû(3"#ûSPOKESMANû YEARûANDûTHATûTHEûNUMBERûWASûLIKELYûTOûREACHû SIMPLIFYINGûSTRUCTUREûANDûALSOûHAVINGûTHEû SAIDû4HEûBANKûDIDûNOTûSPECIFYûHOWûMANYû  ûBYûTHEûENDûOFûTHEûYEAR RIGHTûNUMBERûOFûSENIORûLEADERSHIPûROLESû JOBSûWILLûGO ûBUTûITûISûEXPECTEDûTOûBEûABOUTû /THERûBANKSûAREûALSOûMAKINGûCUTSûTOû ACROSSûTHEûNETWORK ûSOURCESûTOLDû)&2û4HEû û#ONSULTATIONSûWITHûAFFECTEDûSTAFFûWILLû REDUCEûCOSTSû,LOYDSû"ANKINGû'ROUP û CHANGESûWILLûTAKEûEFFECTûINû&EBRUARY TAKEûPLACEûINûTHEûCOMINGûWEEKS Britain’s biggest domestic retail bank, last )TûWILLûRESULTûINûONEûLEVELûOFûSENIORûSTAFF û (3"#ûHASûABOUTûûBRANCHESûACROSSû WEEKûSAIDûITûWASûCUTTINGû ûJOBS including branch directors, retail branch THEû5+ Steve Slater

Morgan Stanley’s France primary dealer status restored

MORGAN STANLEY has been restored as a LIKELYûTOûOPERATEûASû364Sû-ORGANû3TANLEYû GOVERNMENTûBONDSûANDûEIGHTû"ELGIANûBONDSû PRIMARYûDEALERûINû&RANCESûSOVEREIGNûDEBTû %UROPEû3%ûANDû-ORGANû3TANLEYûû#Oû ONû*UNEûû ûANDûALSOûOFûANû/!4ûFUTURESû MARKET ûTHREEûMONTHSûAFTERûITûWASû )NTERNATIONALû0LC CONTRACT SUSPENDEDûBYû!GENCEû&RANCEû4RESOR. -ORGANû3TANLEYûWASûSUSPENDEDûRELATEDûTOû The bank has had to put in place internal !&4ûSAIDûITûHASûRESTOREDû-ORGANû3TANLEYSû *UNEûûûTRANSACTIONSûTHATûAFFECTEDûTHEû procedures to ensure compliance with the STATUSûOFû3PECIALISTûENû6ALEURSûDUû4RESORûASûAû LIQUIDITYûOFûTHEû&RENCHûSOVEREIGNûBONDû PRIMARYûDEALERûCHARTERûITûHASûCARRIEDûOUTûANû RESULTûOFûCOMPLIANCEûWITHûTHREEûREMEDIALû market, in contradiction with its obligations INDEPENDENTûAUDITûOFûITSû&RENCHûDEBTûSECURITIESû MEASURES ûJOINTLYûADOPTEDûWITHû!&4û4HEû ASûANû364 ûTHEû!&4ûSAIDû4HEûBANKûWASûlNEDû MARKET MAKINGûACTIVITIESûANDûITûHASûADOPTEDûAû decision reinstates the rights and õMûINû$ECEMBERûûBYû&RANCESû!-&ûFORû SPECIALûTRAININGûPROGRAMMEûFORûSTAFF OBLIGATIONSûOFûTHEûTWOû%UROPEANûENTITIESû MANIPULATINGûTHEûPRICEûOFûû&RENCHû David Cheetham

18 International Financing Review November 7 2020

4 IFR PM 2358 p11-20.indd 18 06/11/2020 20:39:39 People &Markets ESG inflows drive innovation and rebranding

'LOBALûINmOWSûINTOû%3'ûFUNDSûOFû53BNû 53BN ûANDû ûFUNDS ûWHILEûTHEû53û BLUEûFUNDSûAIMEDûATûTHEûOCEANûECONOMY û in the third quarter were more than double TOOKûû53BN ûANDûûFUNDS ûBUTû 0ARIS ALIGNEDûFUNDSûWITHûSTIFFERû THEû53BNûINûTHEûSAMEûQUARTERûLASTûYEARû ACTIVITYûISûCLIMBINGûINûTHEûRESTûOFûTHEûWORLD ENVIRONMENTALûTARGETSûDESIGNEDûTOûKEEPû ANDûSHOWEDûAûHEALTHYûûINCREASEûONûTHEû )NmOWSûOFû53BNûINû#ANADA û!USTRALIA û GLOBALûWARMINGûWITHINûnûDEGREES ûANDû SECONDûQUARTER ûACCORDINGûTOû-ORNINGSTAR .EWû:EALAND û*APANûANDû!SIAûREVERSEDû MOREûGREENûBONDûFUNDSûINûANTICIPATIONûOFû %3'ûFUNDûASSETSûREACHEDûAûRECORDû OUTmOWSûOFû53BNûINûTHEûSECONDûQUARTER û INCREASEDû%5ûISSUANCE 53TRNûATûTHEûENDûOFû3EPTEMBER ûWITHû ASûACTIVITYûROSEûINû*APANûANDûTHEûRESTûOFû!SIA “We will continue to see a strong %UROPEûPUSHINGûOVERû53TRNûFORûTHEûlRSTû h7EREûDElNITELYûSEEINGûAûHUGEûUPTICKûINû PROLIFERATIONûOFûTHEMATICûFUNDS ûWHICHûALSOû TIMEûINûTHEûTHIRDûQUARTERûASûSTRONGûINVESTORû %3'ûINû!SIA vû3TUARTûSAID PLAYûVERYûWELLûWITHûRETAILûINVESTORS vû3TUARTû INTERESTûCONTINUEDûTOûDRIVEûPRODUCTû SAID INNOVATIONûANDûMOREûCONVENTIONALûFUNDSû NEW ESG THEMES WEREûREBRANDEDûASû%3'ûVEHICLES !ûRECORDûûNEWûSUSTAINABLEûFUNDSûWEREû “The high level of product -ORNINGSTARûLOOKEDûATûGLOBALûFUNDûmOWSû LAUNCHEDûINûTHEûTHIRDûQUARTER ûUPûFROMûû development we’re seeing in OFû ûSUSTAINABLEûOPEN ENDûFUNDSûANDû INûTHEûSECONDûQUARTER ûINCLUDINGûûNEWû EXCHANGE TRADEDûFUNDSûINûTHEûTHIRDûQUARTERû FUNDûLAUNCHESûOUTSIDEû%UROPEûANDûTHEû53ûnû the European ESG space is THATûUSEû%3'ûCRITERIAûTOûSELECTûINVESTMENTSûASû DOUBLEûTHEûSECOND QUARTERûNUMBER unprecedented” the line continues to blur with managers %UROPEûACCOUNTEDûFORûûOFûTHOSEûASûNEWû WITHûWEAKERûCREDENTIALS products were designed to meet the 7ITHûONLYûûOFûGLOBALûASSETSûCURRENTLYû REGULATORYûDRIVEûTOûPUSHûCAPITALûTOWARDSû Asset managers also continued to take MANAGEDûSUSTAINABLY û-ORNINGSTARûEXPECTSû SUSTAINABLEûINVESTMENTûANDûTOûHELPûTHEû%5û SHAREûFROMûCONVENTIONALûEQUITYûFUNDSûBYû CONTINUEDûSTRONGûGROWTH MEETûITSûTARGETûOFûNETûZEROûCARBONûEMISSIONSû REBADGINGûnûORûGREENINGûnûPRODUCTSûWITHûANû h)ûWOULDûEXPECTûTOûSEEûAûSIMILARûTRAJECTORYû BYû %3'ûLABEL OVERûATûLEASTûTHEûNEXTûFOURûQUARTERSûASûWEVEû h4HEûHIGHûLEVELûOFûPRODUCTûDEVELOPMENTû )Nû%UROPE ûûFUNDSûWEREûCHANGEDûINûTHEû SEENûAûCOUPLEûOFûSTRONGûANDûSTABLEûQUARTERSû we’re seeing in the European ESG space is THIRDûQUARTER ûBRINGINGûTHEûTOTALûNUMBERûOFû AFTERû#OVIDûNOW vûSAIDû%LIZABETHû3TUART ûAû UNPRECEDENTED vûSAIDû(ORTENSEû"IOY û RELABELLEDûFUNDSûTOûûINûTHEûLASTûDECADE û SUSTAINABILITYûRESEARCHûANALYSTûATû DIRECTORûOFûSUSTAINABILITYûRESEARCHûFORû%-%!û INCLUDINGûûTHATûCHANGEDûTHEIRûNAMEû -ORNINGSTAR ANDû!0!#ûATû-ORNINGSTAR 2EPURPOSEDûFUNDSûNOWûACCOUNTûFORûûOFû %UROPEûATTRACTEDûTHEûLIONSûSHAREûOFû 4HISûINCLUDEDûûENVIRONMENT THEMEDû %UROPESûSUSTAINABLEûFUNDûUNIVERSE INmOWSûINûTHEûQUARTERûWITHûû social and green bond products, including Tessa Walsh Paris aligned ESG indices, funds proliferate 4HEûSEARCHûFORûMOREûAMBITIOUSû%3'ûTARGETSû Products based on the Paris Agreement are WEATHERûEVENTS ûWHILEûALSOûTARGETINGûLOWû ISûPROMPTINGûTHEûDEVELOPMENTûOFûNEWû SEENûASûTOUGHERûTHANûLOW CARBONûALTERNATIVES û emitting companies and those making INDICESûANDûFUNDSûALIGNEDûTOûTHEû0ARISû ASûFEWûCOMPANIESûAREûCURRENTLYûONûTRACKûTOû EFFORTSûTOûREDUCEûTHEIRûCARBONûFOOTPRINTû !GREEMENTûONûCLIMATEûCHANGEûASûINVESTORSû MEETûITSûTARGETûOFûKEEPINGûGLOBALûTEMPERATUREû WHILEûINVESTINGûINûGREENûTECHNOLOGY LOOKûBEYONDûREDUCINGûCARBONûINTENSITYûANDû RISEûTHISûCENTURYûTOûBELOWûûDEGREESûANDû h)TûTHEûINDEX ûWILLûTILTûTOWARDSûTHOSEû TARGETûGLOBALûSYSTEMICûCHANGE PURSUINGûEFFORTSûTOûLIMITûITûTOûûDEGREESû COMPANIESûTHATûHAVEûGREENûREVENUE ûITûWILLûTILTûTOû )NDEXûPROVIDERû-3#)Sû#LIMATEû0ARISû )NûORDERûTOûMEETûTHEû%5Sû0ARISû!LIGNEDû COMPANIESûTHATûHAVEûCARBONûREDUCTIONûTARGETS û !LIGNEDû)NDEXû3UITEûCONSISTSûOFûEIGHTûINDICESû "ENCHMARKûPRINCIPLES ûPRODUCTSûMUSTûINVESTû ANDûITûWILLûALSOûREDUCEûEXPOSUREûTOûCOMPANIESû THATûAREûAMONGûTHEûhGREENESTvûOFûTHEû  INûCOMPANIESûTHATûREDUCEûTHEIRûEMISSIONSûBYû THATûAREûATûRISKûFROMûAûPHYSICALûPERSPECTIVEûTOû PLUSû%3'ûEQUITYûANDûlXED INCOMEûINDICESû ANûAVERAGEûOFûûANNUALLY ûWHICHûISûTHEûPACEû EXTREMEûWEATHERûEVENTS vû-ENOUûSAID that it operates, and are designed to OFûPHASINGûOUTûOFûFOSSILûFUELSûSETûOUTûINûTHEû Creating more ambitious ESG products COMBINEûSEVERALûCLIMATEûCHANGEûTHEMES 0ARISû!GREEMENT ûANDûMUSTûHAVEûAûCARBONû and indices has been challenging due to a h)ûTHINKûTHISûISûONEûOFûOURûGREENESTûINDICES vû EMISSIONSûFOOTPRINTûûBELOWûTHEûBROADERû LACKûOFûDATA ûALTHOUGHûTHISûISûCHANGINGûWITHû SAIDû6ERONIQUEû-ENOU ûGLOBALûHEADûOFû%3'û MARKET IMPROVEDûDATAûONûCLIMATE ûINDIRECTûSCOPEûû INDEXûRESEARCHûANDûSTRATEGICûINITIATIVESûATû-3#)û -3#)SûINDICESûAIMûTOûHELPûINVESTORSû EMISSIONSûANDûGREENûREVENUESûTHATûNOWû h7EûWANTEDûTOûDEVELOPûANûINDEXûTHATûCAPTURESû TACKLEûCLIMATEûCHANGEûBYûLOOKINGûATûPHYSICALû MAKEû0ARIS ALIGNEDûPRODUCTSûVIABLE ALLûTHEûKEYûDIMENSIONSûOFûCLIMATEûCHANGEû and transition risk, as well as green h4HEûDATAûISSUE ûWASûAûCHALLENGEû&ORû BECAUSEûWEûHEARDûFROMûINVESTORSûTHATûTHEYû opportunities, while aligning with the EXAMPLE ûFOURûYEARSûAGOûWEûDIDNTûHAVEûAû WEREûLOOKINGûFORûONEûHOLISTICûCLIMATEûSOLUTIONv TOUGHERû DEGREEûWARMINGûSCENARIOû30û SCOPEûûESTIMATIONûMODEL ûWEûDIDNTûHAVEû !ûHANDFULûOFûNEWû0ARIS ALIGNEDûFUNDSûWEREû launched Paris-aligned indices in April and DATAûTOûASSESSûPHYSICALûRISK ûANDûWEûDIDNTû also launched in the third quarter, including ISûPLANNINGûTOûLAUNCHûMORE HAVEûALLûTHEûWORKûDONEûAROUNDûTHEûGREENû ,YXORû30ûû0ARIS !LIGNEDû#LIMATEû5#)43û TAXONOMYû.OWûWEûAREûATûAûSTAGEûWHEREûWEû %4& û&RANKLINû30ûû0ARISû!LIGNEDû#LIMATEû DATA CHALLENGE think that the data we’re using are robust %4&ûANDû3WEDBANKû2OBURû!CCESSû%DGEû !DDINGûPHYSICALûRISKûTOûTHEûINDEXûALLOWSû ENOUGH vû-ENOUûSAID %UROPE ûACCORDINGûTOûAû-ORNINGSTARûREPORT INVESTORSûTOûCURBûEXPOSUREûTOûEXTREMEû Tessa Walsh

International Financing Review November 7 2020 19

4 IFR PM 2358 p11-20.indd 19 06/11/2020 20:39:39 IFR’s ESG Financing Briefing

IFR’s ESG Financing Briefing is a subscription service offering daily news, data and analysis on green and ESG financing from across the Refinitiv Capital Markets Insight Team.

To subscribe or learn more, e-mail ifr.clientsupport@refinitiv.com

4 IFR PM 2358 p11-20.indd 20 06/11/2020 20:39:42 BONDS

SSAR 23 Corporates 26 FIG 27 High-Yield 30 Structured Finance 32

„ FRONT STORY SSAR Eppf enters UK council funding market Opens up alternative funding route to PWLB or UK MBA

The decision by the LONDON BOROUGH OF “In my view, there is a subtle but proposition than signing up to all the SUTTON to choose the EUROPEAN PRIVATE important difference between the Sutton architecture and documentation that PLACEMENT FACILITY as the issuance vehicle bond and bonds issued by UK MBA,” said goes with a bond issue, as they are a bit for its £100m of amortising notes due St. John. “What we have created here is a more used to borrowing from the Public November 2055 last Monday could prove route to market where each local Works Loan Board on very simple terms.” seminal, with its success potentially authority issuer is standalone and has its attracting interest from other UK local OWNûPROlLEûANDûCREDITûRATINGvû COMPETITOR OR ALTERNATIVE? authorities that may consider pursuing a While the cost of funding for Sutton was similar route. EPPF WINDOW undoubtedly cheaper than using the Given the relatively small funding While Sutton could have opted for a PWLB, the authority could have achieved needs of local authorities by public private placement given the deal size was an even lower cost had it used the UK market standards, borrowing through only £100m – it was placed as a £250m size MBA, according to Christian Wall, the Public Works Loan Board or private WITHûaMûRETAINEDûnûTHEREûWEREûBENElTSû director at PFM, the managed service placements had previously been to using eppf, according to St. John. provider to the UK MBA. favoured. “One of the key elements for investors “It issued outside the current pricing of More recently, however, the UK was that we wanted them to look straight the most recent Lancashire bond even Municipal Bonds Agency, which was set through eppf to Sutton as the underlying though it had a better rating,” he said last up in 2014, emerged as a potential credit,” he said. “In other words, we tried Tuesday. “Yesterday morning, the solution for councils wanting to come to make the issuing vehicle, eppf, as Lancashire bond, which we issued in together and sell bonds in benchmark transparent as possible, so to all intents August, was traded at a spread of around size through a system of cross and purposes I’d describe eppf as a pane 86bp, and adjusting for the different guarantees. Yet, its only two transactions of glass so that investors are looking maturity and yield curve, Sutton came to date have been on behalf of Lancashire straight through that to Sutton on the about 14bp wider than the 89bp bid price County Council. other side. Eppf is essentially a conduit despite a notionally higher credit rating.” “We believe this will be attractive to a between issuer and investor.” Eppf is an alternative issuer that has number of other local authorities As such, attaining a credit rating was a SPECIlCûCHARACTERISTICSûTHATûSUITEDûTHEû because it provides a swift and low-cost key step, with Moody’s assigning Sutton Sutton trade rather than a direct rival, route to market,” said Robert St. John, an Aa3 stable credit rating. according to Wall. PARTNERûATû#ENTRUS ûTHEûlNANCIALûSERVICESû The Sutton trade could serve as a “Eppf is not really a competitor as adviser that arranged the Sutton blueprint for other local authorities to such. I know some investors won’t be as transaction, which has a 30-year follow, potentially creating a far more keen on it because even though legally weighted average life. active public local authority market in you can segregate the bond issues, the “The Sutton bond, using eppf as the the UK, according to St. John. same way we can through the agency issuer and conduit, provides an “There really isn’t a local authority SPV, it would be very hard if you are an alternative to the UK MBA that will allow market in the same way the US has the AXA or a Legal & General to explain to quick and easy execution,” he said. municipality market – that doesn’t really your clients that you have got a company The PWLB hiked rates at the end of exist in the UK,” he said. “So this is an defaulting through the structure but it last year by 100bp, meaning that the opportunity to broaden it out and make doesn’t affect the bond that they own current cost of borrowing for Sutton it appealing to investors and local that has been issued through the same from the PWLB is Gilts plus 180bp, authorities.” structure, so I think there is a long way to substantially higher than the 95bp Tax considerations and simplicity were go on that,” he said. spread at which the trade via eppf also key factors behind Sutton’s decision “The main reason Sutton needed to go landed. to use eppf, according to Paul Deakins, down that route is that by itself it would “We were looking for a long-term PARTNERûATû#LIFFORDû#HANCE ûTHEûLAWûlRMû need a special purpose vehicle because of funding at the best rate possible, which on the deal. withholding tax. So they needed this option has clearly provided and locks “Effectively, if you look at it from something, and if you are only issuing in that value for the long-term,” said Sutton’s point of view, they simply got a £100m a special purpose vehicle is Richard Simpson, strategic director of loan from a Luxembourg entity which is essentially unaffordable, so that is why resources at Sutton. in a double tax jurisdiction with the UK, they have gone down that route, I With the UK MBA struggling to fully so it is quite straightforward from that believe. But I don’t think it is cheap and it capitalise on the increased PWLB costs, perspective,” he said. ISûUNLIKELYûBEûMOREûEFlCIENTûTHANûTHEû5+û the entry of eppf into the space signals an “From the authority’s point of view, MBA.” increase in competition. receiving a loan is a much simpler David Cheetham

International Financing Review November 7 2020 21

5 IFR Bonds 2358 p21-37.indd 21 06/11/2020 19:08:18 Will senior preferred replace SNP? WEEK IN NUMBERS Push for depositor preference could fire senior preferreds’ rise 1.485% A push to implement general depositor “Thus, [investors] cannot assess the risk of „ THE YIELD ON 30-YEAR TREASURIES preference across the EU could see banks incurring losses and accordingly cannot ON NOVEMBER 5, HAVING COLLAPSED increasingly use senior preferred bonds to price properly the issuance,” he said. FROM AN INTRADAY HIGH OF 1.757% THE build loss absorbing buffers which, market Harmonisation of insolvency rankings, DAY BEFORE AS MARKETS BECAME MUCH participants say, could even render the through the introduction of general MORE RELAXED ABOUT THE US ELECTION senior non-preferred asset class redundant. depositor preference, would therefore 1.70 Spain is the latest EU country to consider provide investors more clarity while also 1.65 introducing general depositor preference, aiding resolution authorities, he said. 1.60 whereby all wholesale deposits rank above “The introduction of a eurozone-broad 1.55 senior unsecured liabilities in a bank resolution. depositor preference would have the 1.50 1.45 Should Spain’s draft law succeed, it will advantage of instilling some clarity and 1.40 join the likes of Italy and Portugal, where consistency across different European 1.35 depositor preference is already in force. jurisdictions,” said Filippo Alloatti, senior 1.30 The idea of introducing depositor credit analyst at Federated Hermes. 1/9/20

preference across the EU has support in the “This would have negative credit 8/9/20 3/11/20 15/9/20 6/10/20 22/9/20 29/9/20 13/10/20 27/10/20 European Commission, which is reviewing consequences on preferred senior, increasing 20/10/20 the ranking of deposits in insolvency. Loss Given Default in resolution outcomes, but Bankers stressed it is unclear whether perhaps this is the price to pay to advance depositor preference will be implemented in towards a fully functioning banking union.” Spain, let alone across the EU, noting it In Spain, Fitch said depositor preference 1 would require a major effort to harmonise could result in banks favouring senior „ THE NUMBER OF CORPORATE ISSUERS national insolvency regimes. preferred issuance over SNP for their MREL IN THE EURO INVESTMENT-GRADE “Do we have political momentum? Yes. Do needs, in particular medium-sized banks. MARKET LAST WEEK, FERROVIAL WITH A we have the will? Yes. But we also have an Many European banks have already been €500m, EIGHT-YEAR BOND extremely full agenda,” said a DCM banker. ISSUINGûSENIORûPREFERREDûBONDSûTOûlLLû-2%,û The implications of EU-wide depositor buffers under an exemption. preference for bank issuance would be most The senior preferred market is easier and profound at the senior level. cheaper to access, with euro senior £150bn While ranked above the SNP asset class, preferreds trading 28bp tighter than SNPs. „ THE AMOUNT THAT THE BANK banks are allowed to count some of their senior EU-wide depositor preference would affect OF ENGLAND’S ASSET PURCHASE preferred bonds as part of their MREL buffer. the funding plans of all banks that do not PROGRAMME WILL BE INCREASED BY, However, market participants say have a holding company, bankers said. £50bn BIGGER THAN EXPECTED resolution authorities may hold back from “If you want to have a very extreme view, imposing losses on senior preferred because, the SNP market could become redundant,” in many countries, the bonds sit at the same said Cecile Bidet, head of DCM solutions and level as deposits in the creditor hierarchy. advisory at Credit Agricole. 26.77 Excluding deposits from bail-in but “Banks could meet even their subordination „ THE LEVEL THE VIX WAS AT ON including senior preferred bonds would risk requirement with senior preferred.” NOVEMBER 5, DOWN FROM OVER 40 IN legal challenges under the so-called No In this case, banks could replace SNP LATE OCTOBER, AS RISK-ASSET MARKETS Creditor Worse Off principle, which dictates bonds with senior preferred, with the two RECOVER THEIR POISE AGAIN AFTER A no creditor should suffer higher losses in INSTRUMENTSûlLLINGûTHEûSAMEûREGULATORYûROLEû RECENT SELL-OFF resolution than in insolvency. 4HEûlRSTûBANKERûSAIDûITûWOULDûREMAINûTOûBEû 45 Depositor preference thereby strengthens seen if senior preferred bonds would then trade 40 a resolution framework. In the case of Spain, differently, depending on their individual &ITCHûSAIDûITûWOULDûINCREASEûCONlDENCEûINû features, or converge. The impact would also 35 the effectiveness of senior debt bail-in, depend on a potential redesign of banks’ capital 30 enhancing the feasibility of a resolution. buffers below the senior level, he said. While bondholders would be put at a Bidet said that if banks replace maturing 25

higher risk of suffering losses, the risk SNP bonds with senior preferreds, the 20 would at least become easier to judge. spreads of the two could converge over time. 1/7/20 1/9/20 1/8/20

Nikos Maragopoulos, associate researcher at “But the convergence towards SNP may 1/11/20 1/10/20 the European Banking Institute, said that under NOTûBEûTOTAL ûlRSTLYûBECAUSEûTHEû3.0ûLAYERûSTILLû the existing regime it is in some cases impossible exists, which banks may not use but could for investors to fully analyse the likelihood of a still be used, and secondly because the bank’s senior preferred bonds being bailed-in. volumes [of outstanding bail-in-able senior European lenders – except for G-SIBs – are not bonds] would be bigger,” she said. €1.807bn currently required to disclose the amount of other Another important factor would be the „ THE AMOUNT OF CORPORATE BONDS THE liabilities that rank pari passu with the bonds. downgrade of senior preferred ratings, by ECB BOUGHT (NET) IN THE WEEK TO OCTOBER Such factors would affect the decision one to two notches, while banks’ funding 30 AS PART OF ITS CSPP COMPARED WITH over whether to exclude senior preferreds mix would also come into play, she said. €2.208bn THE WEEK EARLIER from bail-in, he said. Tom Revell In total, it has bought €69.715bn

22 International Financing Review November 7 2020

5 IFR Bonds 2358 p21-37.indd 22 06/11/2020 19:08:22 BONDS SSAR

participants is that the issuer will place a 30- amount of unmet demand, so I don’t think year tranche and a shorter one, either a you’ll see fatigue by the second trade,” the SSAR lVE YEARûORûAûSEVEN YEAR DCM banker said. “There’s also a general “It’s nothing complicated,” a syndicate lack of supply, which helps them too.” banker said. “They were very open last time EUROS around what they wanted, which was feedback LIQUID BENCHMARKS for a 10-year and 20-year dual-tranche deal. This With two large bonds now outstanding, EU GETS READY FOR SECOND SURE time, it’s the same, and basically what that investors have clear and liquid reference HELPING avoids is having lots of discussions among the points to establish relative value. The banks on what’s the best strategy etc. We all issuer’s €7bn 20-year that priced at 14bp The EUROPEAN UNION has sent out an RFP for know what they want their average maturity over was quoted just above 4bp last Monday, its second deal under its SURE programme, PROlLEûTOûLOOKûLIKE ûSOûTHATSûAûCLEARûGUIDEv according to Tradeweb, while its €10bn 10- a transaction that is expected to capitalise The EU has indicated that it will tap year was quoted at less 8.5bp from its 3bp on the strong performance of the inaugural maturities from three to 30 years and that over mid-swaps pricing. bonds and once again draw a large amount the maximum average maturity for its loans “The big move in spreads happened of investor demand. will be 15 years. within 24 hours of the deal pricing and The supranational made bond market Expectations are that the new trade, like spreads have stabilised since,” the syndicate history last month with its €17bn debut the SURE debut, will receive a strong market banker said. social transaction under the Support to reception. h7EûSAWûAûBITûOFûPROlT TAKINGûFROMûSOMEû mitigate Unemployment Risks in an “There will be huge demand for the next accounts but the ECB buying has been Emergency programme, a deal that was one, probably not quite as gargantuan as the supportive. With the supply that’s to come, remarkable in terms of size and order lRSTûONE ûBUTû)ûWOULDûEXPECTûTOûSEEûTHEûKINDû unless the ECB picks up its purchase pace books, with demand closing over €233bn. of response you’d get for a sovereign trade,” much, it’s hard to see how their spreads Expectations are that the deal will come a DCM banker said. would tighten much more given where EIB this week, given the previous pattern of Italy, for example, drew over €90bn of and KfW are trading, for example.” issuance whereby banks were given a week orders for a €8bn September 2051 deal last The 30-year part of the curve tends to be to submit their proposals. month, breaking its own record for appetite favoured more by sovereigns than European While the contents of the RFP are in that tenor set earlier in the year. agencies or supranationals, though EIB has a CONlDENTIAL ûSIMILARûTOûTHEûlRSTûONEûUNDERû “A huge amount of cash has been put 1.5% €3bn October 2048 that was quoted at SURE, the consensus among market aside for them and there’s still a huge 16.5bp over, according to Tradeweb.

ALL INTERNATIONAL GREEN BONDS ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues €(m) (%) 1 JP Morgan 58 11,442.64 7.7 1 JP Morgan 1597 409,157.15 8.8 1 BNP Paribas 483 124,231.20 8.5 2 Credit Agricole 41 9,716.98 6.6 2 Citigroup 1239 339,028.55 7.3 2 JP Morgan 385 103,030.83 7.1 3 BNP Paribas 49 9,083.20 6.1 3 Bank of America 1291 325,688.64 7.0 3 Deutsche Bank 343 91,530.27 6.3 4 Barclays 33 7,586.60 5.1 4 Barclays 1066 299,272.12 6.4 4 Credit Agricole 328 89,316.50 6.1 5 HSBC 53 7,242.01 4.9 5 Goldman Sachs 887 248,007.55 5.3 5 Barclays 328 86,967.63 6.0 6 Deutsche Bank 35 7,123.67 4.8 6 HSBC 1002 225,596.47 4.8 6 HSBC 362 85,054.31 5.8 7 SG 29 7,027.53 4.7 7 Deutsche Bank 886 221,098.97 4.8 7 UniCredit 320 77,004.47 5.3 8 Citigroup 35 6,840.31 4.6 8 BNP Paribas 866 216,811.74 4.7 8 SG 275 72,339.69 5.0 9 Bank of America 44 6,701.17 4.5 9 Morgan Stanley 731 199,096.85 4.3 9 Bank of America 260 66,138.16 4.5 10 ING 35 6,019.98 4.1 10 Credit Agricole 607 141,791.88 3.0 10 Citigroup 253 65,499.07 4.5 Total 256 148,153.87 Total 5,658 4,651,882.30 Total 1,777 1,460,678.38

Excludes social bonds and mixed use of proceeds. Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt, US Global ABS/MBS. US Global ABS/MBS. Source: Refinitiv SDC code: JG1 Source: Refinitiv SDC code: J1 Source: Refinitiv SDC code: N1

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING NOVEMBER 6 2020 Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover Nov 3 2020 Austria €600m 0.000 Oct 20 2040 -0.059 1.95 Nov 3 2020 UK £2.75bn 0.125 Jan 31 2028 0.116 2.67 Nov 3 2020 Germany (i) €380m 0.500 Apr 15 2030 1.690 -1.35 Nov 3 2020 UK £2bn 1.250 Oct 22 2041 0.771 2.42 Nov 4 2020 UK £3bn 0.125 Jan 30 2026 0.000 2.41 Nov 4 2020 Germany (green) €4.62075bn 0.000 Oct 10 2025 -0.850 1.29 Nov 4 2020 Finland €951m 0.000 Sep 15 2030 -0.474 1.53 Nov 5 2020 Spain (€i) €470m 0.150 Nov 30 2023 -0.995 2.37 Nov 5 2020 Spain €1.355bn 1.200 Oct 31 2040 0.602 2.01 Nov 5 2020 France €3.497bn 0.500 May 25 2029 -0.500 1.82 Nov 5 2020 France €3.498bn 0.000 Nov 25 2030 -0.380 2.36 Nov 5 2020 France €2.521bn 1.500 May 25 2050 0.270 1.61 Nov 5 2020 France €1.478bn 4.000 Apr 25 2055 0.320 1.77 Source: IFR

International Financing Review November 7 2020 23

5 IFR Bonds 2358 p21-37.indd 23 06/11/2020 19:08:22 Investors are now able to look at the federal state out of Germany,” said a “The 2050s are the most interesting again relationship between the two credits at the syndicate banker. to tap at the long end due to the relatively 10 and 20-year points. EIB’s €3bn September While the EU sent its RFP out last Monday, low cash price, but then the EU is expected 2030 was quoted at 12bp through mid-swaps the day before the EFSF, the latter is expected to do a 30-year,” said the banker. on Monday, according to Tradeweb. TOûCOMEûTOûMARKETûlRST ûTHEûBANKERûSAID “Politically, you don’t want to come ahead “You then need add a new-issue “I think the EFSF will look to come OFûTHEû%5ûANDûCAUSEûAûlGHTûBYûDOINGûAû premium,” the DCM banker said. “There’s Monday, intraday,” he said. “The EU is year and then the next day leave the rest for PROBABLYûAûBITûMOREûlNESSINGûTOûBEûDONEûINû expected to repeat the process of the them. You don’t do that.” the 30-year part of the curve, given that it’s inaugural SURE transaction, so announcing less liquid and there’s a narrower investor Monday for Tuesday, and it makes sense for LOWER AUSTRIA SUCCEEDS WITH EURO base, but you still have a good guide.” the EFSF to look to come before this.” PUBLIC DEBUT Further details of the EFSF trade remain EFSF SET TO CONCLUDE 2020 FUNDING unknown but the issuer only has €1bn LOWER AUSTRIA made its debut in the public remaining of its Q4 funding target following euro benchmark market last Friday with a The EUROPEAN FINANCIAL STABILITY FACILITY is set a €4bn dual-tranche offering at the start of deal that made the most of absent to wrap up its funding programme for 2020, October. competition from other SSA names, as the with an RFP sent out for a deal in the week The longer part of that deal was a no-grow uncertainty surrounding the outcome of the of November 9, the same week the €1bn tap of the 0.7% January 2050s, which US elections continued to affect markets. European Union is expected to return with printed at 26bp over swaps on books of “It is a very good transaction at the end of its second SURE outing. €11.1bn. The bonds were bid at 15bp on the day, I think they got everything right,” With all eyes on the US election, market Wednesday, according to Tradeweb data. said a syndicate banker. “I think they did not activity was subdued last week, with the Another long-dated tap of equal size is the want to go head to head with the EFSF on only euro trades a €500m 10-year from most likely route to be pursued this time, Monday, they wanted the market focused Hesse and a no-grow €500m 15-year from according to the banker. just on themselves, like they have managed Lower Austria. “I would question doing a new line for today.” “You still have some issuers that are just €1bn,” he said, suggesting that a repeat The no-grow €500m November 2035 note already preparing themselves for next of the prior increase appears the most landed at mid-swaps plus 11bp, 5bp tighter week, the heavyweight being the European suitable, although it would clash with the than guidance, through Erste Group, Hypo- Union again, also the EFSF and at least one EU’s expected plans. Bank Burgenland, Hypo Noe, RBI and UniCredit.

ALL US DOLLAR FIXED-RATE GLOBALS ALL INTERNATIONAL US$ BONDS ALL SOVEREIGN BONDS IN EUROS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues €(m) (%)

1 Citigroup 332 124,855.51 11.2 1 JP Morgan 1113 281,081.26 10.3 1 BNP Paribas 45 35,152.09 10.8 2 JP Morgan 384 124,698.41 11.2 2 Citigroup 950 251,358.90 9.2 2 JP Morgan 54 34,761.40 10.7 3 Bank of America 376 119,241.53 10.7 3 Bank of America 978 235,348.65 8.7 3 Citigroup 33 21,950.07 6.7 4 Goldman Sachs 211 79,677.51 7.1 4 Barclays 651 180,882.84 6.7 4 Credit Agricole 22 18,970.42 5.8 5 Morgan Stanley 202 70,114.84 6.3 5 Goldman Sachs 678 180,502.52 6.6 5 Deutsche Bank 28 18,769.10 5.8 6 Wells Fargo 247 64,967.76 5.8 6 Morgan Stanley 561 153,780.21 5.7 6 Barclays 36 18,300.33 5.6 7 Barclays 182 62,443.69 5.6 7 Wells Fargo 550 126,416.43 4.6 7 Goldman Sachs 26 17,329.68 5.3 8 Deutsche Bank 123 47,406.93 4.2 8 Deutsche Bank 509 108,021.10 4.0 8 HSBC 20 17,104.30 5.3 9 RBC 132 39,341.56 3.5 9 HSBC 479 105,867.57 3.9 9 Bank of America 39 17,029.01 5.2 10 TD Securities 108 37,380.22 3.3 10 Credit Suisse 459 80,408.96 3.0 10 UniCredit 15 15,803.64 4.9 Total 715 1,117,930.73 Total 2,889 2,719,776.27 Total 161 325,436.41

Excluding equity-related debt, ABS/MBS. Including Euro, foreign and global issues. Excluding equity-related debt, Excluding ABS/MBS. US Global ABS/MBS. Source: Refinitiv SDC code: O5 Source: Refinitiv SDC code: O1 Source: Refinitiv SDC code: N4

ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%)

1 HSBC 43 14,744.02 9.8 1 Deutsche Bank 17 9,502.51 9.9 1 UniCredit 67 16,983.85 15.3 2 JP Morgan 46 14,336.60 9.6 2 BNP Paribas 15 9,423.43 9.8 2 DGZ-DekaBank 53 7,709.82 6.9 3 Credit Agricole 40 13,078.93 8.7 3 UniCredit 11 8,820.02 9.2 3 JP Morgan 30 7,197.60 6.5 4 BNP Paribas 45 11,916.39 8.0 4 JP Morgan 16 8,332.25 8.7 4 Nord/LB 47 6,827.43 6.1 5 Commerzbank 34 9,686.57 6.5 5 Barclays 9 7,668.09 8.0 5 Deutsche Bank 40 6,476.63 5.8 6 Barclays 26 9,370.87 6.3 6 Credit Agricole 18 6,449.38 6.7 6 BayernLB 33 6,264.87 5.6 7 SG 28 8,620.90 5.8 7 Goldman Sachs 9 6,106.21 6.3 7 Barclays 32 6,189.46 5.6 8 Deutsche Bank 28 8,462.33 5.6 8 Bank of America 13 5,649.44 5.9 8 HSBC 42 5,799.59 5.2 9 Natixis 21 8,457.19 5.6 9 Nomura 6 5,537.81 5.8 9 LBBW 35 5,715.51 5.1 10 Bank of America 24 7,747.48 5.2 10 SG 11 5,020.81 5.2 10 NatWest Markets 20 3,922.71 3.5 Total 217 149,885.89 Total 57 96,301.83 Total 219 111,218.74

Excluding equity-related debt. Including publicly owned institutions. Excluding ABS/MBS. Excluding ABS/MBS. Source: Refinitiv SDC code: N6 Source: Refinitiv SDC code: N5 Source: Refinitiv SDC code: N7

24 International Financing Review November 7 2020

5 IFR Bonds 2358 p21-37.indd 24 06/11/2020 19:08:22 BONDS SSAR

The transaction was in demand, Hesse last issued a 10-year bond in May, It previously focused on buying ACGBs in BENElTINGûFROMûONLYûONEûOTHERûISSUEûINû with a €2.25bn 0.01% 2030. the belly of the curve to help meet its 0.25% EUROSûLASTûWEEK ûANDûATTRACTEDûAûlNALûORDERû The most recent LSA close to the 10-year three-year yield target, a strategy that book exceeding €2bn, excluding joint lead part of the curve came from Saxony, which resulted in a steeper sovereign curve than manager interest. A positive yield of 0.017% issued a €500m 0.01% November 2029 bond other offshore rates markets. at reoffer also contributed to the strong on October 28. Capital Economics noted that with 80% of interest. Both notes were quoted at less 3bp, projected bond purchases directed towards The issuer is the largest federal province ACCORDINGûTOû4RADEWEBûANDû2ElNITIV federal government bonds, the state in Austria by area and the second most Orders on the new Hesse reached €500m. government sector, which represents populous behind the federal capital of That led leads to price in line with guidance around one-third of outstanding Vienna. at less 1bp for a €500m size. government bonds, is under-represented. While this was the issuer’s debut in euros, A banker away from the trade said it was However, it expects the federal it has executed several syndicated deals in nothing to write home about. “It’s just a government’s share to surge as the Swiss francs, although the last of those came normal German state 10-year. Fair value was #OMMONWEALTHûlSCALûDElCITûBALLOONS in July 2017. around less 2bp/3bp,” he said. The RBA’s extended bond-buying news “Lower Austria is the most active 4HEûLEADûPOINTEDûOUTûTHATû(ESSEûCAMEûmATû paid immediate dividends as 10-year yields provincial issuer, with currently almost to the less 1bp spread where Berlin tapped fell 7bp, from 0.82% on November 2 to 0.75% €3bn-equivalent in outstanding bonds, of its 0.01% July 2030s in mid-October. on November 5. which approximately €1bn are Swiss franc- Another lead said he was happy to call the This could potentially dampen denominated,” wrote Ralf Burchert, analyst TRADEûAûSUCCESSûEVENûTHOUGHûITûWASûDElNITELYû international appetite for ACGBs as their at Erste Group. “As of the end of 2019, Lower not as rich as previous Laender trades have absolute yield advantage over alternative Austria had a budget of approximately been. overseas markets, notably the US Treasury €10bn, assets worth around €15bn and “In the end, it was subscribed with very market, declines. public debt of €5.1bn on the provincial good quality investors. There were no fast However, US 10-year yields actually fell a level.” money investors in the book. The issuer larger amount over the same period, from Due to the Covid-19 pandemic the would have got more demand had they been 0.85% to 0.74%, as investors scaled back their supplementary budgets for 2020 and 2021 PRESENT vûTHEûlRSTûLEADûSAID American stimulus bets following the US are projecting considerable revenue Bankers expect the Laender sector will elections. shortfalls as well as increased spending, remain one of the more active ones as the In any event, ACGB demand is according to Burchert. year end approaches. underpinned by the government’s relatively “They are very active normally in private “There is a benchmark in the works for low pre-coronavirus debt levels and well- placements . . . and now they have decided the week ahead. We may see something in SIGNALLEDûANDûTARGETEDûlSCALûSUPPORTû to bring a benchmark deal,” said the banker. the form of taps after the US election results policies, which have helped the country are announced, depending on how it goes”, maintain its Triple A rating from all three BIG WEEK AHEAD said the banker. main agencies. The pipeline for this week is growing, with Australia remains one of 10 countries the CITY OF BOCHUM announcing a mandate for currently rated Triple A by Moody’s, S&P and a transaction with a maturity of at least 10 NON-CORE CURRENCIES Fitch, alongside Canada, Denmark, years that will be joint managed by Germany, Luxembourg, the Netherlands, DekaBank, HSBC and UniCredit, as well as AUSTRALIA GETS EXTRA STIMULUS Norway, Singapore, Sweden and expected trades from the EFSF and the EU. Switzerland. “I was a bit surprised Bochum didn’t come The RESERVE BANK OF AUSTRALIA reopened its 4HEûFEDERALûGOVERNMENTûDElCITûINûTHEû this week,” said the banker. “They may need monetary stimulus toolbox last Tuesday to CURRENTûlSCALûYEARûISûPROJECTEDûTOûBEû to offer up a little bit at the beginning at deliver a further reduction in interest rates A$214bn, a record 11% of GDP, while net guidance in order to place it.” and extend its quantitative easing debt is forecast to rise to 44% of GDP in the “We still have the EFSF and European programme, with obvious implications for middle of 2024 from 25% on June 30 this Union to come. The EFSF will most probably the primary and secondary government year – though this is still low by do a 15-year or 20-year tap that will be for bond markets. international standards. sure an intraday transaction on Monday.” As widely expected, the RBA cut its 4HEû!USTRALIANû/FlCEûOFû&INANCIALû benchmark cash rate by 15bp to a record low Management forecasts Treasury bond supply HESSE LAUNCHES LACKLUSTRE 10-YEAR 0.1%, while governor Philip Lowe said the of about A$240bn for 2020/21, over half of nine-member board did not expect to increase which has already been raised with no HESSE tapped the market on Monday with a the cash rate for at least three years. indigestion or overcrowding problems so 10-year LSA that was just about subscribed The reserve bank similarly lowered its far. as the upcoming US election and more target rate for three-year Australian !USTRALIANûASSETSûALSOûBENElTûFROMûTHEû stringent lockdowns in parts of Europe sway Commonwealth government bond yields by country’s successful containment of the sentiment. 15bp to 0.1% and reduced the interest rate Covid-19 pandemic, in increasingly stark “Was it the biggest window? No but it was on Exchange Settlement balances from 0.1% contrast to soaring cases and still open. The mood is strange, it is not a to zero to support economic activity. hospitalisations in Europe and the US, and very liquid market today and fast money is The RBA also announced it would buy its relatively strong economic performance. out of the market,” one of the leads said. !BNû53BN ûOFûlVEûTOû YEARû Indeed, the RBA was able to raise its GDP Barclays, BNP Paribas, Commerzbank, DZ government bonds in the secondary market growth forecast last Tuesday, to 6% from 4%, BANK and Helaba set the ball rolling at mid- over the next six months, with the potential in the year to June 2021, and now expects swaps less 1bp for a November 2030 for larger purchases, to lower long-term the unemployment rate to peak at 8% rather benchmark. borrowing costs. than its previous 10% projection.

International Financing Review November 7 2020 25

5 IFR Bonds 2358 p21-37.indd 25 06/11/2020 19:08:22

election, but if the strong tone were to hold Spanish utility IBERDROLA on Thursday over the following days, then many could be outlined plans to invest €75bn in 2020–25, CORPORATES tempted to come back into the market. with BNP Paribas analysts saying that 75%– With the help of the books that were 81% of this will be aligned with the EU’s more than eight times subscribed, pricing taxonomy on sustainable objectives. EUROS was tightened by 40bp for a launch at 90bp. The aim is to fund this with €18bn of 4HEûRESULTûREmECTEDûAûHELPFULûBACKDROP additional debt and €7.5bn of hybrids, with FERROVIAL ENJOYS SOLO ROUND “We’re monitoring stocks and bond €3bn of the latter already issued this year. indices, there’s room for issuers to execute h3EVENTY lVEûBILLIONûEUROSûISûAûBIGû Spanish infrastructure group FERROVIAL trades. We will see more come,” said a number, but Iberdrola is a big company and broke the pause in European investment- second banker away. “Will [supply] be while net debt will increase, so will Ebitda grade corporate activity on Thursday, taking similar to November last year? Probably not, ANDûCASHmOW ûRESULTINGûINûBROADLYûSTABLEû advantage of a free run at the primary to as we are already well above year-to-date credit metrics commensurate with the print with a negative new-issue premium as volumes, and seeing another €45bn in current Baa1/BBB+ rating,” wrote other issuers stood aside with the US November might be a little too high.” CreditSights analysts. election still in contention. The return of supply will not be without “We like Iberdrola and believe it should Ferrovial’s solo run was rewarded with interruption given Veterans’ Day this week be a core hold in any euro utility portfolio, orders of over €4.2bn at guidance for its no- in the US and Armistice Day in Europe. But but its virtues are well recognised by the grow €500m November 2028. BANKERSûAREûCONlDENTûTHATûACTIVITYûWILLû market and it trades tight.” “Ferrovial is a good-quality name, and we nonetheless pick up swiftly. The BNPP team says that French energy felt the sentiment was positive this morning “There is a fairly decent line-up for the company EDF is also looking to take on more compared to yesterday. Also, given limited next few days and weeks, and I’m optimistic debt, with a €16bn increase of debt by 2028 supply, it felt a good window, and I’m not WEûWILLûSEEûGOODûDEALûmOW v said Sodhi. to €57bn. sure waiting a day or two would make a big h"UTûAûLOTûOFûCORPORATESûHAVEûDONEûSIGNIlCANTû “This is also before the estimated €47bn difference,” said Atul Sodhi, global head of pre-funding, so they are sitting on comfortable cost of six new nuclear reactors by 2044 if debt capital markets at Credit Agricole, one of cash positions, there’s no pressure to press the France wants to meet its energy transition the bookrunners. button. A corporate treasurer, though, could goals,” said BNPP. The other bookrunners were CaixaBank, see another round of lockdowns, and with “While this reinforces the need for EDF’s HSBC, NatWest Markets, RBC Capital Markets some degree of conservatism will think this is a broader restructuring which is the key and Santander. chance to put more money in the bank.” positive catalyst for EDF, this will not solve Ferrovial (BBB/BBB) put out IPTs of swaps Another lead banker also said on the fundamental problem of EDF’s ever- plus 130bp area for the eight-year. The Thursday that the market seemed set to increasing debt pile which will ultimately company last hit the market in May, when it return to business as usual. need to be funded by the bond markets.” sold a €650m May 2026 at 165bp. The 2026s “There’s still some wood to chop but the were bid on Thursday at 81bp, according to market is performing extremely strongly Tradeweb. today,” he said. “Issuers should feel encouraged, STERLING Bankers away put fair value for the new there are going to be opportunities to go to issue around 95bp–100bp. market before the end of the year to pre-fund. CLARION SCORES AGAIN WITH “Nothing else [in the market], CSPP- Also, underlying rates are in a very good SUSTAINABLE SEQUEL eligible, starting 30bp back and a €500m position, so there are very attractive outright no-grow. I wonder how many times funding costs to be locked in.” CLARION HOUSING GROUP returned with a fresh oversubscribed this will be!” said a banker 12-year senior secured sustainability away early on during execution, who added ENERGY TRANSITION HERALDS SUPPLY benchmark on Friday and, as with its debut the chatter had been to ask why the market in the format from less than a year has stayed so quiet. Energy transition is a theme that is expected beforehand, it found enough traction with He said that many companies had already to deliver a wave of issuance in the euro investors to increase the size of the trade. got their funding in place before the bond market over the coming years. ALL CORPORATE BONDS IN EUROS ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues €(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 BNP Paribas 238 40,777.86 9.3 1 JP Morgan 126 27,826.40 12.6 1 JP Morgan 699 213,662.04 12.4 2 Deutsche Bank 137 30,052.96 6.9 2 Morgan Stanley 75 24,427.93 11.0 2 Bank of America 656 204,942.80 11.9 3 HSBC 158 29,170.59 6.7 3 Bank of America 106 23,786.72 10.7 3 Citigroup 526 161,535.07 9.4 4 Barclays 114 25,268.45 5.8 4 Goldman Sachs 68 16,446.83 7.4 4 Morgan Stanley 416 134,135.23 7.8 5 Bank of America 116 24,508.02 5.6 5 Citigroup 65 14,386.04 6.5 5 Goldman Sachs 388 125,077.19 7.3 6 Citigroup 128 23,329.87 5.3 6 Wells Fargo 77 12,589.73 5.7 6 Wells Fargo 402 117,024.59 6.8 7 SG 138 23,205.86 5.3 7 Barclays 55 12,198.51 5.5 7 Barclays 264 77,246.99 4.5 8 JP Morgan 140 22,793.14 5.2 8 Mizuho 41 9,552.07 4.3 8 Mizuho 238 57,300.91 3.3 9 Credit Agricole 122 18,777.34 4.3 9 MUFG 39 7,605.56 3.4 9 HSBC 170 54,891.24 3.2 10 UniCredit 124 18,696.23 4.3 10 Deutsche Bank 185 54,865.13 3.2 10 RBC 39 6,075.33 2.7 Total 499 437,997.30 Total 246 221,283.80 Total 1,365 1,716,252.77 Excluding equity-related debt. FIGs, ABS/MBS. Excluding equity-related debt, ABS/MBS, all foreign issues, global issues

and non corporates. Source: Refinitiv SDC code: F6a Source: Refinitiv SDC code: F9 Source: Refinitiv SDC code: N8

26 International Financing Review November 7 2020

5 IFR Bonds 2358 p21-37.indd 26 06/11/2020 19:08:22 BONDS CORPORATES/FIG

The November 2032 deal, issued by November and into December and that Clarion generates approximately 80% of its #LARIONû&UNDING ûWASûlRSTûMARKETEDûATû'ILTSû primary bond market technicals have rental income from the Greater London plus 110bp–115bp for an expected £250m remained robust, even with the uncertainty region and the South East of England. size via HSBC, NatWest Markets and Santander. from the US elections, and that’s Clarion is also part of the working group A banker familiar with the matter said fair particularly the case for strong names,” said for new industry-driven Sustainability value was hard to gauge, but pointed to Arthur Krebbers, head of sustainable Reporting Standards expected to be launched Clarion’s sustainable January 2035s placed in lNANCE ûCORPORATESûATû.AT7ESTû-ARKETSû on November 10, which aim to help enhance January, which he spotted at 97bp. A banker Clarion (A3/A) was able to upsize by £50m, and align ESG reporting standards across the away, though, put fair value at around 100bp. launching £300m at 95bp with books last UK social housing sector. “Twelve years is not necessarily the usual seen around £700m. “Clarion is the largest name in a sector wheelhouse for the sector – longer usually tends “The sustainability label has added to the which will start to become more dominant to go better,” he said after IPTs were announced. pricing dynamics. We saw that with their in the UK sustainable market,” said “That said, I think there’s enough sterling lRSTûSUSTAINABILITYûBONDûATûTHEûSTARTûOFûTHEû Krebbers. “The UK housing association cash around that it should go well regardless year where it was drawing in non-UK sector is really starting to embrace this asset – they’re a good funding team. The most accounts and also bigger orders from ESG- class – this is already Clarion’s second foray recent trade from the sector was the London focused portfolios,” said Krebbers. “That’s – and we are working with multiple housing and Quadrant’s 2038s, though the tenor now a real theme of 2020 in the sterling associations that want to follow Clarion in means it’s tough to draw a direct market, the fact that the greenium is quite SETTINGûUPûAûSUSTAINABLEûlNANCEûFRAMEWORKvû comparison, given the different investor consistent and on average we are seeing that Away from Clarion but within the same mandates it would have been of interest to.” anywhere from 5bp to 10bp in sterling.” sector, PA HOUSING will be hosting an annual L&Q placed a £250m 18-year secured in The proceeds will be used for the investor update call on November 12. /CTOBERûATûBP ûWITHûBOOKSûlNISHINGûOVERû DEVELOPMENTûOFûNEWûBUILDûENERGY EFlCIENTû £840m. Although housing associations have affordable homes. raised funds through taps in the intervening Clarion has a target to build 4,000 new YEN PERIOD û#LARIONûWASûTHEûlRSTûTOûBRINGûAûNEWû homes each year, 80% of which will be benchmark. affordable. It is the country’s largest housing SEVEN & I HIRES BANKS FOR DOMESTIC “It’s well established that the sterling association, with around 125,000 properties BOND SALE market typically has good windows in providing homes to over 360,000 people. SEVEN & I HOLDINGS hired Nomura, SMBC Nikko, ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN STERLING Mitsubishi UFJ Morgan Stanley and Mizuho last BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE week for the sale of up to ¥400bn Managing No of Total Share Managing No of Total Share 53BN ûOFûTHREE ûlVEûANDûSEVEN YEARû bank or group issues €(m) (%) bank or group issues £(m) (%) domestic bonds in late November at the 1 BNP Paribas 367 105,696.59 8.4 1 Barclays 32 3,679.69 13.7 earliest. 2 JP Morgan 299 90,246.14 7.2 2 HSBC 33 3,143.94 11.7 The announcement came after the 3 Deutsche Bank 270 79,113.60 6.3 3 NatWest Markets 26 2,061.91 7.7 Japanese owner of 7-Eleven convenience 4 Credit Agricole 272 79,080.82 6.3 4 JP Morgan 13 2,049.10 7.6 stores in August approved a deal by its 5 HSBC 298 76,776.43 6.1 5 BNP Paribas 19 1,917.79 7.2 subsidiary to acquire Marathon Petroleum’s 6 Barclays 246 74,715.83 5.9 6 Lloyds Bank 17 1,713.78 6.4 Speedway stations for US$21bn. To help 7 UniCredit 264 69,877.97 5.5 7 RBC 15 1,537.67 5.7 lNANCEûTHEûDEAL û3EVENûûIû(OLDINGSûSAIDûATû 8 SG 230 64,568.65 5.1 8 Citigroup 12 1,195.97 4.5 the time it would make an US$8bn injection 9 Bank of America 205 56,182.21 4.5 9 Goldman Sachs 10 1,183.39 4.4 that would be funded by a corporate bond 10 Citigroup 178 54,170.66 4.3 10 Santander 12 1,133.15 4.2 offering and bank term loans. The bond Total 1,454 1,261,777.11 Total 68 26,790.17 issuance will be marketed under the pot

Excluding ABS/MBS, equity-related debt. method. Source: Refinitiv SDC code: N9 Source: Refinitiv SDC code: N8a Before this announcement the company lLEDûAûSHELFûREGISTRATIONûTOûTHEû+ANTOû,OCALû ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS INCLUDING &INANCEû"UREAUûOFûTHEû*APANESEûlNANCEû EXCLUDING SECURITISATIONS SECURITISATIONS ministry. The registration will be effective BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE for two years from November 10. Managing No of Total Share Managing No of Total Share bank or group issues £(m) (%) bank or group issues SFr(m) (%) 1 NatWest Markets 80 14,278.47 11.5 1 Credit Suisse 120 14,450.37 30.0 2 Barclays 86 13,663.08 11.0 2 UBS 96 10,222.80 21.2 FIG 3 HSBC 87 12,898.65 10.4 3 ZKB 65 8,035.87 16.7 4 RBC 47 11,157.51 9.0 4 Verband Schweiz 23 7,015.92 14.6 5 Lloyds Bank 39 8,715.08 7.0 5 Raiffeisen Schweiz 42 3,640.33 7.6 6 Bank of America 36 8,005.57 6.5 6 Deutsche Bank 12 1,671.12 3.5 EUROS 7 Citigroup 33 7,875.48 6.4 7 Basler KB 11 875.44 1.8 8 JP Morgan 30 6,388.93 5.2 8 Commerzbank 7 599.13 1.2 HSBC FIRES UP FIG SUPPLY AS ELECTION 9 BNP Paribas 31 5,464.02 4.4 9 BNP Paribas 7 504.01 1.0 COUNT DRAGS ON 10 Deutsche Bank 28 5,381.29 4.4 10 Luzerner Kantonalbank 2 281.33 0.6 Total 208 123,689.29 Total 211 48,199.74 HSBC HOLDINGS got FIG issuance back under

Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt. way on Friday with a €2bn dual-tranche Source: Refinitiv SDC code: K05a Source: Refinitiv SDC code: K06c senior offering that underlined the strong

International Financing Review November 7 2020 27

5 IFR Bonds 2358 p21-37.indd 27 06/11/2020 19:08:23 market conditions that bankers say could 4HEûõBNûSIX YEARûNON CALLûlVEûTRANCHEû PRE-FUNDING TEMPTATION tempt other banks to hit the market before was marketed with initial price thoughts of &URTHERûSUPPLYûISûEXPECTEDûFROMûlNANCIALû the end of the year. mid-swaps plus 105bp area, via sole institutions this week, subject to any 4HEûHOLDCOûSENIORûDEALûISûTHEûlRSTûMAJORû bookrunner HSBC. The bond was launched surprising headlines. currency benchmark from a European at 80bp on the back of more than €2.8bn of “I don’t necessarily think we’ll see an lNANCIALûINSTITUTIONûSINCEûPRIMARYûMARKETSû orders. avalanche, but a reasonable number of took a pause for the US election. The €1bn 11-year non-call 10 tranche was issuers were saying before the election that The UK-headquartered global bank did offered with IPTs of 130bp area. The spread was they have got a ‘nice to have trade’ rather not wait for the result to become clear, lXEDûATûBPûWITHûDEMANDûABOVEûõBNû than a ‘must have trade’,” said the banker. with the count continuing on Friday. But a Bankers said both tranches were priced “If these conditions persist, I think we’ll see banker close to the trade said it was close to fair value, while HSBC was also able a decent amount of those come through.” CONlDENTûTOûGOûAHEADûWITHûTHEûMARKETû to obtain a saving of up to 15bp versus what Many banks have already completed their feeling sanguine about the situation and would have been achievable with equivalent 2020 funding plans or else have little left to underpinned by highly supportive US dollar trades. print over the remainder of the year. technicals. The deal was further supported The deal was launched in conjunction But bankers say there is a compelling case by the relative rarity of HSBC in euros, the with a tender offer for three of HSBC’s euro- to be made for pre-funding 2021 issuance high quality of the issuer, and a concurrent denominated senior securities: its €2bn plans, with funding costs low and tender offer. 1.5% March 2022s; its €1.5bn FRN concerning fundamentals outweighed by “The market seems very relaxed that September 2022s; and its €1.5bn FRN supportive technicals – not least promises of the election is heading in Biden’s way, and October 2023s. further stimulus from the ECB and the Bank with increasing [investor] participation The bank said it was targeting the three of England and the expectation of further over the course of yesterday, it became note issues because they will lose their stimulus from the Fed once the dust has clear there was an opportunity,” the -2%,ûVALUEûASûTHEYûAPPROACHûTHEûlNALûYEARû settled in the US. banker said. to maturity. The total amount repurchased “I don’t think we’ve had a time where it’s Hitting the market on a Friday also meant is expected to be approximately the total felt cheaper or more prudent to pre-fund,” the issuer could get out ahead of any proceeds HSBC received from the issue of said a syndicate banker. potential unexpected headlines over the the new notes less €1bn, which will be used In addition, banks coming to the market weekend and any competing supply that to redeem all of its €1bn FRN due in will do so on the back of third-quarter could emerge this week, he said. December 2021. results that have, on the whole, been better than expected. In contrast, those that wait ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION until after fourth-quarter results are BOOKRUNNERS: 1/1/2020 TO DATE BONDS (ALL CURRENCIES) published may have to contend with the BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share impact of less positive numbers, given bank or group issues €(m) (%) Managing No of Total Share national lockdowns have been reinstated in 1 Credit Agricole 68 19,185.35 10.3 bank or group issues US$(m) (%) many countries, bankers said. 2 BNP Paribas 61 12,317.19 6.6 1 Citigroup 45 7,573.71 8.6 “With the market this good, it is 3 Deutsche Bank 57 12,100.12 6.5 2 JP Morgan 45 7,042.62 8.0 tempting,” said a DCM banker. “The market 4 SG 42 12,099.52 6.5 3 HSBC 39 6,188.85 7.1 is super-strong, we’ve retraced all the 5 JP Morgan 69 10,979.15 5.9 4 Credit Agricole 20 5,836.17 6.7 widening we had in the last week or two and 6 Natixis 37 10,166.55 5.4 5 Barclays 28 5,399.60 6.2 are now through, and investors realise 7 Barclays 53 10,004.65 5.4 6 Bank of America 33 5,246.50 6.0 supply will still be relatively muted.” 8 HSBC 55 8,657.80 4.6 7 Morgan Stanley 29 4,658.12 5.3 9 UniCredit 43 6,644.30 3.6 8 UBS 22 4,245.75 4.8 MPS TIER 2s IN FOCUS AMID MERGER 10 Goldman Sachs 38 5,490.94 2.9 9 Goldman Sachs 26 4,040.91 4.6 SPECULATION Total 343 186,839.88 10 Credit Suisse 16 3,856.31 4.4

Including banks, insurance companies and finance companies. Excluding Total 132 87,720.37 equity-related and covered bonds. Excluding publicly owned institutions. The recently issued subordinated bonds of Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a BANCA MONTE DEI PASCHI DI SIENA were marked at substantially lower yields last week amid ALL GLOBAL AND EUROMARKET YEN BONDS ALL INTERNATIONAL YEN BONDS press speculation of a capital boost and a BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE potential merger with UniCredit, though Managing No of Total Share Managing No of Total Share bankers said actual trading was limited. bank or group issues ¥(m) (%) bank or group issues ¥(m) (%) The long-troubled Italian lender has been 1 Mizuho 9 133,616.67 22.5 1 Sumitomo Mitsui 27 229,609.67 22.0 exploring options to increase its capital in 2 Sumitomo Mitsui 9 86,559.67 14.6 2 Mizuho 15 169,866.67 16.3 order to progress with a bad loan disposal 3 Goldman Sachs 3 76,275.00 12.8 3 Nomura 21 136,158.33 13.1 plan and cover increased provisions against 4 Mitsubishi UFJ MS 4 49,641.67 8.3 4 Daiwa Securities 19 117,683.33 11.3 legal risks. 5 JP Morgan 1 48,875.00 8.2 5 Mitsubishi UFJ MS 12 94,991.67 9.1 Local news reports have suggested the 6 Bank of America 1 48,875.00 8.2 6 Goldman Sachs 3 76,275.00 7.3 Italian government – which is the largest 7 Nomura 4 44,008.33 7.4 7 Bank of America 1 48,875.00 4.7 stakeholder in the bank, following its 2017 8 SG 2 24,508.33 4.1 8 JP Morgan 1 48,875.00 4.7 bailout – might be considering injecting up 9 Credit Agricole 5 14,053.00 2.4 9 Credit Agricole 8 34,403.00 3.3 to €2.5bn of capital into the bank, among 10 MUFG 1 12,500.00 2.1 10 SG 2 24,508.33 2.4 other measures to facilitate a merger with Total 22 594,846.00 Total 43 1,041,346.00 its larger rival UniCredit. However, the Excluding equity-related debt. Including preferreds. Including all Euro, foreign and global issues. Excluding equity-related treasury subsequently dismissed the reports debt. Source: Refinitiv SDC code: K10 Source: Refinitiv SDC code: K12 as groundless.

28 International Financing Review November 7 2020

5 IFR Bonds 2358 p21-37.indd 28 06/11/2020 19:08:23 BONDS FIG

Reuters reported last Monday afternoon is not much actual trading – there is some, cultural issues, have receded since new that discussions were continuing, while but it is not a very liquid market.” management took over the bank in 2018. Italy’s ruling coalition is divided over Paola Biraschi, senior analyst at This has led to the removal of one notch of STRATEGIESûONûHOWûTOûlLLûCAPITALûGAPSûTHATûTHEû CreditSights, said that should the rumoured negative “corporate behaviour” adjustment bank faces. capital increase take place, if the EU deemed to the bank’s ratings. The report says that the Treasury wants to it compliant with state aid rules, Monte’s The rater said Deutsche has made steady use state funds to support a merger of MPS Tier 2s could tighten from their current progress towards its medium-term targets, with another bank, while a majority in the levels. helping to improve its earnings stability, to 5-Star Movement in Italy’s ruling coalition is “However, the valuation outcome is very reduce capital and leverage exposure pushing for a share issue to keep the bank binary, as, should the EU impose compliance consumption and reliance on wholesale under state control in the near term and to with state-aid rules and burden sharing, funding, and to free up capital for fund a stand-alone business plan. The then the Tier 2 would have to be converted REINVESTMENTûANDûSELF lNANCINGûOFûITSû treasury is seeking to resist pressure to pour into equity,” she wrote. “Monte’s overhaul. more cash into the lender unless there is a outstanding Tier 2 bonds total €1.75bn, so “During execution to date, senior merger deal, according to Reuters’ sources. they would provide the majority of the management and staff have laid the Amid the speculation, the bank’s shares bank’s recapitalisation.” foundation for a sustainable turnaround of were automatically suspended on Monday Analysts at BNP Paribas said the outcome the underlying, recalibrated business morning after rising sharply. They were up for the Tier 2s will depend on the segments residing in its “Core Bank”. by more than 8% by mid-afternoon, NEGOTIATINGûANDûlNANCIALûENGINEERINGûSKILLSû Deutsche also succeeded in running off ACCORDINGûTOû2ElNITIVû%IKONûDATAû,ATERûINû of the Italian ministry of economy and MAJORûPARTSûOFûTHEûNON COREûASSETSûIDENTIlEDû the week, the bank said in a statement that lNANCE LASTûYEARûANDûVISIBLYûRECONlGUREDûITSûMOREû it is revising its capital plan. “In the previous mergers post resolution, volatile investment banking and capital 4HEûBANKSûBONDSûALSOûBENElTEDû-03Sû such as Banco Popular and Veneto banks, markets franchise,” said Moody’s. most recent deal is a €300m 10-year non-call sub debt credit investors suffered from h4HISûSUPPORTEDûAûSIGNIlCANTûANDû lVEû4IERûûPRICEDûATûûONû3EPTEMBERû û burden sharing,” they wrote. “One key sustainable reduction of the bank’s sold in order to meet one of the ECB’s differentiating element between those three operating cost base, putting Deutsche on requirements for its approval of MPS’s bad cases and Monte is the presence of the lRMERûGROUNDûINûTHEûCURRENTûHIGHLYû loan disposal plan. Italian republic as the main shareholder.” uncertain macroeconomic environment The yield on the bonds had risen caused by the coronavirus pandemic. As a consistently since launch, reaching a peak of DB OUTLOOK RAISED AS MOODY’S CITES result of the aforementioned factors, 14.10% last Thursday, according to Tradeweb PROGRESS Moody’s believes that Deutsche is solidly on lGURESû"UTûONû-ONDAY ûITûFELLûFROMûûTOû track to achieving full execution of its 12.10%. The bonds’ cash price rose from Moody’s has acknowledged the progress proposed plans, in particular with regard to 84.80 to a peak of 87.20. They remained made by DEUTSCHE BANK in its restructuring SUSTAININGûITSûREVENUEûBASEûINûITSûlXEDû close to those levels on Friday morning, with EFFORTSûWHILEûAFlRMINGûITSûRATINGSûONûTHEû income-related businesses; reducing the the yield at 12.20% and the cash price at 87. German lender and changing the ratings’ drag of the newly formed non-core asset MPS’s €400m 8% 10NC5 Tier 2s sold in outlook from negative to stable, saying the unit; as well as sustaining its corporate January were also marked at a lower yield, bank’s management has laid the banking franchise against stark falling from 13.5% to 12.5%. The bonds’ cash foundations for a sustainable turnaround. competition.” price rose from 83.10 to a high of 85.90. On Deutsche has this year been making However, Moody’s added that “continued Friday, the yield stood at 12.60% and the cash progress on a major strategic overhaul and relentless execution” is still required to price at 85.80. aimed at cutting costs, shedding jobs and achieve the bank’s medium-term goals and scaling back and refocusing its investment noted that the coronavirus pandemic will LIMITED TRADING bank – which registered a €957m pre-tax add to earnings strain stemming from Bankers said, however, that only limited PROlTûLASTûQUARTER ûMOREûTHANûTHEûBUSINESSû persistently low interest rates. trading was behind the moves. made in either the whole of 2018 or 2019. “We are talking about a few trades being On Tuesday, Moody’s pointed to able to move the market,” said one. “There $EUTSCHESûTRAJECTORYûASûITûAFlRMEDûTHEû NON-CORE CURRENCIES bank’s A3 rating and changed its outlook on ALL COVERED BONDS (ALL CURRENCIES) the ratings. WESTPAC LAUNCHES AT1 NOTE OFFER BOOKRUNNERS: 1/1/2020 TO DATE “More than 12 months into the Managing No of Total Share transformation, Moody’s believes that the WESTPAC has released guidance at three- bank or group issues US$(m) (%) more fundamental reassessment of DB’s month BBSW plus 340bp–360bp for an 1 Credit Suisse 20 8,590.96 6.6 capital markets aspirations has helped it Additional Tier 1 note offer, Westpac Capital 2 Barclays 40 8,578.69 6.6 move quickly towards achieving a more Notes 7, which includes a reinvestment offer 3 Credit Agricole 33 7,473.91 5.7 balanced and sustainable business model, for holders of Westpac Capital Notes 3, due 4 HSBC 33 6,905.21 5.3 that – coupled with the bank’s sustained to be called next March. 5 Natixis 33 6,438.38 4.9 solid capital and liquidity buffers – no longer The indicative issue size for the new 6 BNP Paribas 29 6,386.33 4.9 warrants a negative outlook at its current subordinated perpetual non-call March 22 7 Commerzbank 32 6,236.04 4.8 rating level,” said the agency. 2027s is A$750m (US$531m), though major 8 UniCredit 34 5,893.25 4.5 Moody’s said the change in outlook also bank AT1 retail notes offers tend to be 9 DZ Bank 30 4,670.60 3.6 REmECTSûITSûASSESSMENTûTHATûSHORTFALLSûINû ENLARGEDûQUITEûSIGNIlCANTLYû 10 Santander 18 4,254.93 3.3 Deutsche’s corporate governance and in its The margin is expected to be announced Total 159 130,400.36 execution of earlier restructuring plans, as on November 12 following the bookbuild, Source: Refinitiv SDC code: J15a well as in overcoming structural and with the offer due to close on November 30.

International Financing Review November 7 2020 29

5 IFR Bonds 2358 p21-37.indd 29 06/11/2020 19:08:23 Westpac is sole arranger and joint lead Antero’s bond offering resumed activity moving 28bp tighter to 479bp over manager with ANZ, Citigroup, CBA, E&P in what has been a record-breaking year for Treasuries, according to ICE BofA. Corporate Advisory, Morgans Financial, Ord the US high-yield bond primary market. Minnett and Shaw & Partners. Bell Potter is co- It came amid a rally in energy bonds, with CAPEX REDUCTION manager. lower expectations of restrictions on Moody’s said Antero Midstream’s ratings Regional lender BENDIGO AND ADELAIDE BANK fracking than had been expected in the WEREûSUPPORTEDûBYûITSûSCALE ûLOWûlNANCIALû completed its bookbuild last week for an event of a Democratic sweep of both leverage, adequate distribution coverage, upsized A$450m perpetual non-call long 6.5- Congress and the White House. fee-based revenue stream and good organic year (June 15 2027) AT1 note offer retail Some bonds issued by Occidental growth prospects. offer of new capital notes. This priced at the Petroleum were up over six points in Generally, midstream companies are seen tight end of three-month BBSW plus 380bp– secondary trading on Wednesday, according as being in better shape than other parts of 400bp guidance. to MarketAxess. The company’s 8.875% 2030 the energy sector, as they tend to have The offer follows an announcement by note climbed six points to 106.6, and its longer contracts and can adjust their capital !USTRALIASûlNANCIALûREGULATORûONû/CTOBERûû 3.00% 2027s were up 5.6 points to 82. expenditures and variable costs more easily that it had increased the minimum liquidity Bonds issued by Devon Energy, Cenovus than producers. requirement for Bendigo and Adelaide Bank Energy and PBF Energy also rallied around Antero reduced capex by 77% in the third until further notice after it failed to comply three points on the day. quarter compared with last year for its with liquidity standards in the past. More energy names could jump into the lowest quarterly spend since 2014 and this is Fellow Australian major lender National primary market on the back of the rally. expected to drop further in the fourth Australia Bank paid a spread of three-month “The secondary market is certainly better quarter, it said on October 28. This, as well BBSW plus 400bp for its delayed A$600m bid than a week ago so you may see a couple as an increased Ebitda forecast, led the SALEûOFûPERPETUALûNON CALLûlVEû!4ûNOTESûINû more issuers,” said a high-yield energy COMPANYûTOûPREDICTûFREEûCASHmOWûOFû53Mû July. banker. in 2020, a 7% increase from what was Four months earlier, NAB withdrew a Broadly, risk assets responded positively predicted in August. perpetual non-call 7.5-year (September 17 to a result that is not expected to lead to However, the main risk in the Antero deal 2027) AT1 retail note offer, NAB Capital extensive legislative changes and could is its heavy reliance on sister company, oil Notes 4, in response to market turmoil. RESULTûINûLOWERûlSCALûSTIMULUS ûWHICHû and gas producer Antero Resources. pushed Treasury yields down. Average high- Antero Resources has lower B2/B– ratings yield spreads dropped sharply on Tuesday and its bonds trade much wider – a 5% 2025

ALL US$ DENOMINATED HIGH-YIELD BONDS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS HIGH-YIELD BOOKRUNNERS – 1/1/2020 TO DATE 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues €(m) (%)

UNITED STATES 1 JP Morgan 323 41,410.74 10.7 1 BNP Paribas 56 6,097.22 8.8 2 Bank of America 320 36,383.08 9.4 2 JP Morgan 52 5,286.67 7.6 US JUNK BOND ISSUANCE RESUMES WITH 3 Goldman Sachs 230 27,414.05 7.1 3 Deutsche Bank 46 5,160.94 7.5 ANTERO MIDSTREAM DEAL 4 Citigroup 229 26,767.14 6.9 4 Goldman Sachs 42 4,009.87 5.8 5 Barclays 226 25,348.39 6.5 5 Barclays 38 4,006.50 5.8 High-yield corporate bond issuance resumed 6 Wells Fargo 189 21,609.63 5.6 6 Citigroup 40 3,867.48 5.6 on Thursday after credit markets responded 7 Morgan Stanley 165 21,268.42 5.5 7 HSBC 42 3,614.63 5.2 positively to the unfolding election results. 8 Deutsche Bank 199 18,577.20 4.8 8 Credit Suisse 32 3,302.41 4.8 After a two-day pause as investors braced 9 Credit Suisse 191 18,255.35 4.7 9 Credit Agricole 30 3,238.60 4.7 for and then digested the US election, 10 RBC 120 12,917.84 3.3 10 Bank of America 30 2,941.41 4.2 energy company ANTERO MIDSTREAM offered a Total 610 388,498.82 Total 128 69,226.69

healthy concession to reopen the primary as Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt. it looked to take out short-term bank debt Source: Refinitiv SDC code: B5 Source: Refinitiv SDC code: B6 with a longer-dated high-yield bond. The company (rated B3/B) priced a ALL ASIAN HIGH-YIELD ISSUERS ALL EUROPEAN HIGH-YIELD ISSUERS US$550m 5.5-year non-call 2.5 year senior 1/1/2020 TO DATE 1/1/2020 TO DATE unsecured note at 7.875%. The deal was Managing No of Total Share Managing No of Total Share upsized from an initial US$400m and priced bank or group issues US$(m) (%) bank or group issues US$(m) (%) in the mid-range of 7.75%–8% area price talk. 1 Credit Suisse 60 4,559.60 8.9 1 BNP Paribas 61 7,993.08 8.8 That was seen as offering a decent 2 UBS 57 3,321.00 6.5 2 Deutsche Bank 51 7,097.10 7.8 premium to its existing curve, given its 3 Haitong Secs 81 2,819.85 5.5 3 JP Morgan 56 6,661.10 7.3 5.375% notes due 2024 were trading at a 4 Citic 54 2,608.32 5.1 4 Citigroup 49 6,573.57 7.2 cash price of 94 for a yield of 7.20% on 5 Deutsche Bank 54 2,605.69 5.1 5 Barclays 44 5,918.62 6.5 Wednesday, before the announcement. 6 Guotai Junan Secs 69 2,579.53 5.0 6 Goldman Sachs 45 5,440.72 6.0 The bond will be used to pay down a 7 HSBC 45 2,527.01 4.9 7 HSBC 42 4,758.54 5.2 portion of its credit facility, a move that was 8 Bank of America 22 2,293.09 4.5 8 Credit Suisse 36 4,365.15 4.8 welcomed by one investor who owns Antero 9 Goldman Sachs 22 2,070.99 4.1 9 Bank of America 33 3,807.07 4.2 bonds. 10 Bank of China 33 1,739.78 3.4 10 Credit Agricole 28 3,590.47 3.9 h)TûTAKESûOUTûANYûRElNANCINGûUNCERTAINTYû Total 140 51,100.92 Total 130 91,246.57

for the company,” he said. “We are happy Excluding equity-related debt. Excluding equity-related debt. they are doing it.” Source: Refinitiv SDC code: B06d Source: Refinitiv SDC code: B06c

30 International Financing Review November 7 2020

5 IFR Bonds 2358 p21-37.indd 30 06/11/2020 19:08:23 BONDS HIGH-YIELD

note was trading at a cash price of 79 to yield currency bond and loan transactions,” said The facilities involved 23 banks offering 11.20% on Thursday, according to an investor presentation for Ineos more than US$9bn of commitments in MarketAxess. Styrolution’s third-quarter earnings, support of the acquisition, said the “We think Antero Resources does survive, released on Wednesday. The transaction company. Ineos Styrolution is targeting a Ba/ but it’s a rockier ride than the midstream STRUCTUREûHASûYETûTOûBEûlNALISED ""ûRATINGûPROlLE ûANDûPROûFORMAûNETûLEVERAGEû company,” said the investor. “Midstream has "ANKERSûINVOLVEDûINûTHEûlNANCINGûHADû is expected to be less than 3.5x for 2020. The good longer-term contracts to sell onwards told IFR in August that they were targeting COMPANYûISûOWNEDûBYû"RITISHûCHEMICALSûlRMû and they have hedged their price risk for THEûFOURTHûQUARTERûFORûTHEû-!ûlNANCINGû Ineos. two to three years, which helps get them “On the company earnings call it was through Covid.” mentioned that all key regulatory approvals MASMOVIL BRAVES QUIET MARKET WITH Bookrunners on the Antero deal were JP have been obtained but due to the timing it LBO BOND TAP Morgan, Barclays, Citigroup, Credit Agricole, takes to get a carve-out done they won’t be Truist and Wells Fargo. ready to go before January,” said a person Spanish telco MASMOVIL was the only FAMILIARûWITHûTHEûlNANCING borrower in the European high-yield market UBER BOND CLIMBS ON CONTRACTOR Ineos Styrolution’s acquisition of BP’s last week as companies chose to avoid a RULING business has now been cleared by all market roiled by volatility around the US relevant competition authorities, and the presidential election and the UK’s UBER high-yield bonds rallied on Wednesday two companies are now working to resolve impending lockdown. after voters in California passed Proposition business separation issues in preparation for Masmovil announced a €80m tap of its ûWHICHûALLOWSûTHEûRIDE SHARINGûlRMûTOû a smooth closing, according to the €720m 4% 2027 senior secured bond issue continue to treat its drivers as contractors, presentation. The closing date has not yet on November 2, with price talk coming out rather than employees. BEENûCONlRMEDûBETWEENûTHEûTWOûPARTIESû at 101.25–101.375. The tap was priced at Uber’s 8.00% 2026 note was one of the “The deal is not closed yet. Currently, we 101.375, for a 3.771% yield. most heavily traded bonds on Wednesday are working towards the closing of the Proceeds will be used for general morning, rising around 1.5 points to a cash ACQUISITIONû%XACTûTIMINGû;OFûTHEûlNANCING=û corporate purposes, including helping to price of 107.25, according to MarketAxess. will then depend on the actual closing of the pay off the bridge loan that funded The passage of Proposition 22 is seen as acquisition and the market conditions,” said Masmovil’s leveraged buyout by the private supportive for ride-sharing and delivery a spokesperson for Ineos Styrolution in an equity consortium of Cinven, KKR and companies such as Uber, Lyft and Doordash, email to IFR. Providence. as it means they can exclude drivers from The company said that the Covid-19 “The market is quiet ahead of the election EMPLOYEEûBENElTSûSUCHûASûHEALTHCAREû pandemic did not have any discernable as people want to see the result and impact coverage, paid sick leave and impact on its results in the third quarter. ONûTHEûlSCALûSTIMULUSûPACKAGE vûSAIDûAû unemployment insurance. Ineos Styrolution has one bond: a €600m banker familiar with the deal ahead of “It means they are less likely to have January 2027 euro note (Ba2/BB) with a 2.25% pricing. problems with California, so that’s good coupon, which priced at the beginning of “Masmovil’s tap is the last amount needed news for that company,” said Ken the year. This was seen bid on Thursday at TOûSORTûOUTûTHEûACQUISITIONûlNANCINGû Monaghan, co-director of high-yield at 3.3% and a bid price of 94.40, according to package.” Amundi Pioneer. Tradeweb. The original LBO bond issue was priced on The 8% 2026s were seen trading around Following its Q3 earnings call, Lucror September 25, with proceeds directed 107.75 for a yield of 5.70% on Thursday as Analytics analysts said the company believes towards paying down the company’s €800m the company reported third-quarter that the bonds are attractively priced and bridge facility. Following the bond and also a earnings. should remain in the structure, while the leveraged loan component, €80m remained Revenue dropped 18% year-on-year to TERMûLOANSûCOULDûBEûRElNANCED available for drawings under that facility, US$3.13bn, with a 53% drop in revenues Ineos Styrolution’s third-quarter results according to the tap’s offering from its core ride business and a 135% were “quite robust”, and the company has a memorandum. The new bonds will cancel increase in revenue from its food delivery fairly optimistic outlook, wrote analysts. all of the remaining commitments under business, Uber Eats. “The business is well-capitalised, with the bridge facility, terminating it. SUFlCIENTûLIQUIDITYûTOûTIDEûITûOVERûTHROUGHû The offering memorandum also revealed the crisis,” they wrote “The BP asset THATû-ASMOVILSûCHIEFûlNANCIALûOFlCERû*OS¶û EUROPE/MIDDLE EAST/ acquisition will keep leverage elevated and María del Corro, resigned from his position AFRICA COULDûPUTûSOMEûPRESSUREûONûCASHmOWûANDû for personal reasons with effect from earnings through the consolidation phase, October 30. Guillaume Humbert has INEOS STYROLUTION TARGETS 2021 FOR especially since its timing coincides with succeeded him as the new CFO. M&A TAKE-OUT various macro concerns.” Masmovil’s corporate ratings are B+/B1/ Ineos Styrolution signed its US$4.5bn B+, while the bond issue is rated B+/B1/BB. German styrenics supplier INEOS STYROLUTION multi-currency credit facility in August to Telecommunications companies such as is set to hit the capital markets in January fund the initial US$4bn purchase payment. Liberty Global and Masmovil have ûTOûlNANCEûITSû53BNûACQUISITIONûOFû The facility consisted of a US$3.5bn- performed well as the coronavirus crisis has BP’s aromatics and acetyls business. equivalent two-year bridge loan, continued because they are seen as credits The M&A deal will take out a US$3.5bn- alongside a Term Loan A and revolving that are fairly resilient to further lockdowns equivalent two-year bridge loan, which was credit facility. In a statement released at and volatility. Masmovil’s leveraged buyout signed in August as part of a US$4.5bn facility the time, the company said the bridge bonds were priced more than a month ago to fund the purchase price of the deal. LOANûWOULDûBEûRElNANCEDûWITHûAû and have been bid above par since then. “If markets permit, we will approach the “combination of debt sources in the Bankers are expecting volatility to capital markets in January 2021 with multi- coming months.” continue after the US election, but they’re

International Financing Review November 7 2020 31

5 IFR Bonds 2358 p21-37.indd 31 06/11/2020 19:08:23 hopeful that high-yield issuance will pick up )NVESTORSûAREûCONlDENTûTHATûCENTRALûBANKSû Private equity and real estate giant again once there’s certainty about the will step in if there is any real volatility, said "LACKSTONEûISûCLEARLYûNOTûAûNON PROlTû outcome of the highly-contested race. bankers. organisation, and its ownership of registered h4HEREûISûCONlDENCEûINûTHEûMARKETûONû “The reason the market is as strong as it housing provider Sage Housing Association both the sellside and the buyside,” said a is, is primarily the monetary support central INûûRUFmEDûFEATHERSûINûTHEûSECTORû!FTERû London-based high-yield banker. “Even if banks are providing – if they continue to do CRITICISMûFROMûNON PROlTûPLAYERSû3AGEû there is volatility, it is not going to be that, we will be able to continue to print dropped the word “Association” from its disastrous. I’m expecting the market to snap deals for issuers,” said Toomey. name in 2018. back into late December or January – the With economies throughout Europe 3OMEûOFûTHOSEûlRMSûALSOûFEAREDûBEINGû key point is that [investors] have cash to seeing fresh lockdowns, with the UK’s outbid on those properties developed as spare. New money supply has been kicking in on Thursday, some issuers are social housing and required to be sold only relatively light, yields are non-existent in facing a rocky road ahead. But the mini- to registered providers. investment-grade, and that’s the reason.” recovery seen over the summer, along with There were also concerns that the Morgan Stanley was B&D on Masmovil’s good Q3 results, has given the market some properties bought by Sage might be sold on bond tap. The bank was also a global evidence that demand will snap back when the private market once tenants move out. coordinator and bookrunner alongside restrictions are lifted. However, a source said that Sage, which is Barclays, BNP Paribas and Deutsche Bank. “A number of consumer-facing targeting 20,000 homes by 2022, was set up businesses, whose performance is impacted with the intention of owning its real estate HIGH-YIELD IN HOLDING PATTERN by lockdowns, have been able to forever. DEMONSTRATEûTHATûWHENûLOCKDOWNûlNISHESû But while Sage might be in it for the long Like much of the rest of the credit market, they quickly ramp back up to full business. haul, the same may not be true of its backer last week saw European high-yield issuance Those companies were already trading at a Blackstone. And one attraction for Blackstone in a holding pattern while investors waited wider yield than the rest of the market, so of using a CMBS to fund Sage instead of a to see some certainty over the outcome of many investors are comfortable getting secured bond could be that the latter often the US presidential election. compensated for that risk,” said Toomey. involve restrictions on change of control. After a small €80m tap from Spanish “The companies that didn’t ramp back up “Typically these deals would be funded by telecoms company MASMOVIL was priced on in the summer may struggle.” ;5+ûBANKS=ûLENDINGûCHEAP û YEARûlXEDûRATEû November 2, the high-yield euro bond loans. But a private equity owner won’t market shut for the rest of the week, with want to hold this for 30 years,” said one no further new issues. investor who looked at the deal. The market had expected a convincing “The CMBS is likely to give them more win from Democrat candidate Joe Biden. But STRUCTURED FINANCE mEXIBILITYûONûCOVENANTS ûANDûTHATûmEXIBILITYû the much-hyped “Blue Wave” did not would make it easier to change ownership materialise, and both investors and issuers at some point in the future.” are looking at a long wait for any resolution. EMEA MBS Additionally, those senior secured bonds “We’re in a bit of a holding pattern,” said are normally from Single A or Double Diarmuid Toomey, head of strategic capital BLACKSTONE CREATES ALTERNATIVE A-rated housing associations with a long markets at Deutsche Bank. SOCIAL HOUSING FUNDING ROUTE history and large stock of properties – Sage “One of the more consensus answers is has neither the ratings nor the sizeable that, in a downside, even if there is volatility BLACKSTONE‘s social housing CMBS, a hybrid portfolio. in November and December, we will go between a typical housing association The CMBS, called Sage AR Funding No.1, back to a market early next year where the secured bond and a securitisation that was is secured on a loan backed by a portfolio of new issue machine is going to be working priced via Deutsche Bank last month, could 1,609 properties throughout the UK. It JUSTûlNEû7EûWILLûPROBABLYûSEEûVOLATILEû OFFERûAûNEWûlNANCIALûMODELûFORûPRIVATEû issued £220m of notes, including an unrated periods throughout 2021 if we can’t get lRMSûENTERINGûAûSOCIALûHOUSINGûSECTORûSTILLû and retained £11m junior layer. Covid-19 solved, but ultimately companies DOMINATEDûBYûNOT FOR PROlTûHOUSINGû The marketing materials highlighted the will access the market – although they need associations. value of the portfolio based on its Market to access the right windows.” ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS Another high-yield banker said: “It’s very BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE much wait and see, but we are optimistic a pipeline will develop in the coming weeks. Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues €(m) (%) We certainly have issuers looking and we are running out of time before year-end.” 1 Bank of America 22 6,756.67 13.7 1 Bank of America 8 2,919.91 11.7 On Wednesday – the day after the election 2 BNP Paribas 19 4,294.29 8.7 2 SG 7 2,885.89 11.6 – the euro cash market had not moved by 3 Citigroup 18 3,502.02 7.1 3 BNP Paribas 12 2,607.68 10.4 4 SG 7 3,384.33 6.9 4 Credit Agricole 6 2,538.90 10.2 MUCH ûWITHûPRICESûREMAININGûlRMûOVERALLû 5 Lloyds Bank 15 3,342.73 6.8 5 Santander 5 1,895.28 7.6 and investors focused on third-quarter 6 Barclays 15 3,122.47 6.3 6 Deutsche Bank 3 1,357.82 5.4 results, which continue to be better than 7 Credit Agricole 6 2,903.26 5.9 7 Natixis 4 1,263.15 5.1 expected, said Spread Research analysts. 8 Santander 8 2,615.59 5.3 8 Commerzbank 3 1,146.28 4.6 #REDITûVOLUMESûWEREûmATûONûTHEûDAY û 9 Deutsche Bank 7 2,302.41 4.7 9 ING 3 1,092.67 4.4 according to MarketAxess data, with 10 Natixis 6 1,705.16 3.5 10 Citigroup 6 848.46 3.4 volumes of €1.55bn tracking lower than the Total 87 49,358.76 Total 42 24,956.77 30-day low of €1.85bn (on October 19) across Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, credit-linked notes (Euro, foreign, global and European credit, Treasuries and US credit domestics) and excludes CDOs. domestics) and excludes CDOs. sectors. Source: Refinitiv SDC code: B16n Source: Refinitiv SDC code: B16g

32 International Financing Review November 7 2020

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Value Subject to Tenancies – essentially, the That is the likeliest route, because if a where you’re having to sell at a value of the properties if they were bought regulated provider were to go bankrupt, a predetermined horrible price to a load of by a more commercially minded manager, special administrator would be appointed by housing associations,” the investor said. rather than a registered provider of social THEûGOVERNMENTûWITHûTHEûAIMûlRSTûOFûSELLINGû Also in October, one of the UK’s largest housing, though with existing tenants in the properties to another housing housing associations, London & Quadrant, place. That gives a sum of £308.4m, and association at the EUV, and second to ensure raised £250m through the traditional route therefore a moderate loan-to-value ratio of creditors were repaid. of a senior secured bond rated A3/A–/A. The 71%. “We are keen to keep as much social eighteen-year deal paid Gilts plus 140bp. But a second common way to value social housing as social housing and therefore The Sage CMBS pays more: the 5.1-year housing portfolios is on their Existing Use WITHINûTHEûSECTOR vûSAIDûANûOFlCIALûATûTHEû notes offered to investors pay an average of Value: the likely price they would fetch if Regulator of Social Housing. 256bp over Sonia. At the top of the stack the their use as social housing was expected to “And once you’ve got people on board in £89.1m Aaa/AAA Class A came at Sonia plus remain unchanged for the foreseeable those properties and they’re paying a 125bp, while the lowest-rated tranche, the future. DElNEDûRENTûTHENûTHEûONLYûWAYûYOUûCANûSELLû B3/B Class F, came at Sonia plus 700bp. And the EUV is much lower, at £239m, them is if they become void. Any money Distribution statistics were not made public, giving a 92% LTV, which is very high for a that has been invested by the government or but one syndicate banker away from the deal CMBS. Moody’s bases its ratings on the EUV, another board has to be repaid – so [these said the most interesting aspect appeared to be while DBRS, the other agency rating the portfolios] aren’t going to give you a the ESG money attracted to the trade. The deal CMBS, works off the MVSTT and applies a sparkling huge return – it’s a steady value was marketed as a social bond with Sage setting cap and a haircut. return.” up a social bond framework. The deal received “Because this is social housing, in an And it is low-risk steady income – rather a second-party opinion from Sustainalytics, enforcement scenario there are limitations than any expectations that properties will which said the affordable housing element on what potential buyers of the portfolio be sold off to make a quick buck – that meant the CMBS met the core components of could do,” Moody’s analyst Thomas Rahman appears to be the main attraction to the Social Bond Principles 2020. told IFR. investors in the sector. “There are mortgages over the individual “There’s a really low probability of default BOS IN THE MARKET WITH SYON properties, but in a default situation our on social housing because you have a SECURITIES base case expectation is that the portfolio backlog of tenants, and you’re covered by would be sold as social housing, to another rental increases, so you would have to go a BANK OF SCOTLAND is in the market with SYON social housing provider.” long way before you ever get to the point SECURITIES 2020-2 via Lloyds, its third synthetic

ALL INTL ISSUERS (EXCLUDING SELF-FUNDED) GLOBAL SECURITISATIONS IN STERLING SECURITISATIONS – ALL EUROPEAN RMBS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues £(m) (%) bank or group issues €(m) (%)

1 Credit Suisse 102 18,322.62 8.8 1 Bank of America 14 2,636.58 16.9 1 Bank of America 13 3,050.83 13.5 2 Barclays 100 18,258.53 8.8 2 Lloyds Bank 15 2,598.57 16.6 2 Barclays 12 2,486.69 11.0 3 Goldman Sachs 65 16,624.05 8.0 3 Citigroup 12 1,912.72 12.2 3 BNP Paribas 14 2,477.01 10.9 4 JP Morgan 81 16,573.49 8.0 4 Barclays 9 1,743.99 11.2 4 Lloyds Bank 10 2,139.51 9.5 5 Bank of America 75 16,328.45 7.9 5 BNP Paribas 7 977.10 6.3 5 Citigroup 12 2,131.53 9.4 6 Citigroup 80 15,142.84 7.3 6 Deutsche Bank 3 529.88 3.4 6 Credit Agricole 3 1,665.67 7.4 7 Deutsche Bank 76 13,633.15 6.6 7 NAB 4 490.31 3.1 7 JP Morgan 4 1,009.16 4.5 8 Wells Fargo 54 10,993.13 5.3 8 Morgan Stanley 2 475.45 3.0 8 Natixis 5 902.30 4.0 9 Morgan Stanley 42 9,059.73 4.4 9 Standard Chartered 3 439.37 2.8 9 Morgan Stanley 3 806.68 3.6 10 Nomura 52 8,404.18 4.0 10 NatWest Markets 4 437.95 2.8 10 HSBC 5 601.76 2.7 Total 435 207,801.16 Total 41 15,619.42 Total 44 22,631.28

Includes securitisations, PFI bonds and credit-linked notes. Excludes US Including Euro, foreign, global and domestics, excluding CDOs. Including Euro, foreign, global and domestics, excluding CDOs global ABS/MBS, CDOs and self funded issues. Source: Refinitiv SDC code: J10d Source: Refinitiv SDC code: B16i Source: Refinitiv SDC code: B10a

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 6/11/2020 Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type Citizen Irish Auto Receivables Trust 2020 DAC €149.57 2.31 1mE+82bp Deutsche Bank/Citigroup Aaa/AAA/NR ABS Citizen Irish Auto Receivables Trust 2020 DAC €9.37 4.17 1mE+185bp Deutsche Bank/Citigroup Aa1/AA-/NR ABS Citizen Irish Auto Receivables Trust 2020 DAC €6.01 4.44 1mE+275bp Deutsche Bank/Citigroup Aa3/A-/NR ABS Citizen Irish Auto Receivables Trust 2020 DAC €3.09 4.46 1mE+350bp Deutsche Bank/Citigroup A2/BBB/NR ABS FREMF 2020-KF91 US$540.175 9.53 1mUSL+33bp BofA/JP Morgan NR/NR/NR CMBS FREMF 2020-KF91 US$400 9.53 1mSOFR+38bp BofA/JP Morgan NR/NR/NR CMBS FREMF SPC Series K-1518 US$138.039 8.86 1.19 PNC/Morgan Stanley NR/NR/NR CMBS FREMF SPC Series K-1518 US$629.888 14.67 1.86 PNC/Morgan Stanley NR/NR/NR CMBS GCPAF 2020-1 US$265.7 4.18 3.208 MUFG/Deutsche Bank NR/NR/NR ABS GCPAF 2020-1 US$36.2 4.18 4.496 MUFG/Deutsche Bank NR/NR/NR ABS NAVSL 2020-H US$885.7 2.54 1.310 BofA/Barclays/JP Morgan/RBC CM NR/AAA/AAA ABS NAVSL 2020-H US$69.5 6.99 2.780 BofA/Barclays/JP Morgan/RBC CM NR/NR/NR ABS

International Financing Review November 7 2020 33

5 IFR Bonds 2358 p21-37.indd 33 06/11/2020 19:08:24 RMBS and its second this year. This is another 1.4 times subscribed. The last week of investors in the wake of the Covid-19 RISKûTRANSFERûDEAL ûWITHûHIGHû,46ûANDûHIGHûlRST /CTOBERûSAWûAROUNDûõBNûPRICEûACROSSûlVEû pandemic as bankers make a bid to revive time buyer proportions. While the deal is DEALSûANDûTHATûWASûREmECTEDûINûSOMEû demand with deals carrying lower leverage November’s business the exact timing is pressure on the mezz and junior tranches. and strong sponsorship. clearly dependent on the US presidential That trend continued with this deal’s B, C Last week a joint venture between election result not causing too much turmoil. and D tranches pricing at 185bp, 275bp and BROOKFIELD PROPERTIES and INSTITUTIONAL MALL Below the top of the capital structure, 350bp. The As came in line with guidance. A 5% INVESTORS raised US$319m from a deal which accounts for 85% of the transaction, layer at the bottom of the stack was retained. backed by their “super-regional” 2.2m the notes for sale include a BBB– rated Class Deutsche Bank was arranger and joint lead square feet Oakbrook suburb retail centre A, followed by a BB– Class B and an unrated alongside Citigroup. This was third deal from outside of Chicago, while SIMON PROPERTY Z note. the originator, which is the only active Irish cleared a US$355m bond secured by a 1.3m The collateral pool balance is £545.65m – auto ABS securitiser. The debut ABS in 2017 square feet outlet mall in Elizabeth, New a very similar ballpark to Syon 2020-1 where saw seniors print at 40bp, while the follow Jersey. £500m was issued. But one change from the up in December 2018 came at 70bp. These single asset, single borrower previous deals from the Syon shelf is that The securitised portfolio holds 13,335 transactions, whose proceeds are used to this one has a 15-month period where loans loans with a weighted-average IRR of 6.28%, RElNANCEûEXISTINGûMORTGAGES ûHITûTHEû can be added to the portfolio for as much as WA LTV of 76.4%, WA original term of 54 market as the health crisis continues to 70% of the total issuance. The static pool months and remaining term of 44 months. decimate revenues in a sector where includes BoS origination, through its Halifax A 0.34% portion is in arrears of more than PREIT and CBL Properties became the brand. Lloyds Bank originations can be one month. LATESTûMALLûOWNERSûTOûlLEûFORûBANKRUPTCYû added during the ramp-up period. However, two deals this month underscored that demand exists for well US MBS structured transactions backed by EMEA ABS stronger, better known names. REVAMPED US MALL CMBS LURE BUYERS “It’s showing you could get a mall deal IRISH AUTO ABS CIART HAS STAGE TO done,” a senior fund manager said, adding ITSELF The market for new bonds backed by investors were also drawn to these issues standalone US shopping mall loans is slowly BECAUSEûOFûTHEûlNANCIALûSTRENGTHûOFû FIRST CITIZEN FINANCE got decent execution showing signs of life after being shunned by "ROOKlELDûANDû3IMON when it priced CITIZEN IRISH AUTO RECEIVABLES GLOBAL STRUCTURED FINANCE IN US$ TRUST 2020, a €171m securitisation of Irish US ASSET-BACKED SECURITIES BOOKRUNNERS: 1/1/2020 TO DATE auto loans. Pricing was quite quick last BOOKRUNNERS: 1/1/2020 TO DATE 7EDNESDAY ûREmECTINGû#)!24SûABILITYûTOûGETû Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) investors’ full attention, notwithstanding bank or group issues US$(m) (%) 1 JP Morgan 197 93,284.96 13.8 the long drawn out wait for a result in the 1 JP Morgan 79 20,731.00 10.4 2 Wells Fargo 159 80,323.28 11.9 US presidential election. The paper is not 2 Barclays 78 18,447.34 9.2 3 Credit Suisse 179 73,757.86 10.9 eligible for ECB purchases nor does it carry 3 Citigroup 70 16,499.72 8.2 4 Citigroup 168 60,371.51 8.9 the STS label. 4 Wells Fargo 68 14,584.69 7.3 5 Morgan Stanley 105 56,506.17 8.4 There were four tranches, rated Aaa/AAA 5 Bank of America 60 13,760.21 6.9 6 Bank of America 147 55,209.13 8.2 (Moody’s/S&P), Aa1/AA–, Aa3/A– and A2/BBB. 6 RBC 57 13,483.48 6.7 7 Goldman Sachs 159 48,750.28 7.2 IPTs started out at one-month Euribor plus 7 Goldman Sachs 38 12,191.73 6.1 8 Barclays 134 31,555.96 4.7 high 70s/80 area, mid 100s, low 200s and 8 Deutsche Bank 58 10,508.56 5.2 9 Nomura 91 28,684.41 4.3 high 200s/300 area. 9 Credit Suisse 50 9,443.78 4.7 10 Deutsche Bank 111 20,778.66 3.1 There was no indication of the deal 10 Mizuho 34 9,097.63 4.5 Total 1,063 674,782.86 HAVINGûANYûPROTECTEDûORDERSûWHENûlRSTû Total 355 200,225.47 Including securitisations (Euro, foreign, global and domestics, excluding announced but one appeared at guidance – Excludes MBS. CDOs) and PFI bonds. plus 82bp – for the the top layer which was Source: Refinitiv SDC code: F14 Source: Refinitiv SDC code: B16b

STRUCTURED FINANCE – ALL INTL ISSUERS GLOBAL CDOs ALL EUROMARKET CDOs BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 JP Morgan 87 19,244.17 8.7 1 Citigroup 19 7,417.80 19.5 1 Citigroup 13 4,941.20 21.4 2 Barclays 102 18,891.46 8.5 2 Barclays 14 5,439.83 14.3 2 Barclays 10 3,621.66 15.7 3 Credit Suisse 104 18,666.84 8.4 3 JP Morgan 9 5,109.67 13.5 3 BNP Paribas 8 2,845.32 12.3 4 Goldman Sachs 71 18,257.74 8.2 4 BNP Paribas 10 3,430.60 9.0 4 Goldman Sachs 6 2,310.91 10.0 5 Bank of America 79 18,069.38 8.1 5 Goldman Sachs 8 3,121.31 8.2 5 Credit Suisse 6 1,895.00 8.2 6 Citigroup 82 15,481.55 7.0 6 Bank of America 9 2,888.66 7.6 6 JP Morgan 5 1,871.77 8.1 7 Deutsche Bank 80 14,084.14 6.3 7 Credit Suisse 8 2,759.60 7.3 7 Bank of America 6 1,680.61 7.3 8 Wells Fargo 56 11,498.80 5.2 8 Morgan Stanley 5 2,118.83 5.6 8 Jefferies 3 990.14 4.3 9 Morgan Stanley 43 9,214.22 4.1 9 Jefferies 5 1,522.14 4.0 9 Natixis 2 890.74 3.9 10 Nomura 53 8,475.92 3.8 10 Natixis 3 1,152.04 3.0 10 Morgan Stanley 2 743.26 3.2 Total 464 222,141.59 Total 97 37,974.42 Total 64 23,116.77 Includes securitisations, PFI bonds, self-funded issues and credit-linked Including Euro, foreign, global, US domestics. Excludes global and domestic. notes. Excludes US global ABS/MBS and CDOs. Source: Refinitiv SDC code: B12 Source: Refinitiv SDC code: J11 Source: Refinitiv SDC code: J10c

34 International Financing Review November 7 2020

5 IFR Bonds 2358 p21-37.indd 34 06/11/2020 19:08:24 STRUCTURED FINANCE

Not only are both names Single A rated BFLD 2020-OBRK’s senior note cleared transaction, which is expected to be and known by the broader market after at a spread of 205bp over one-month launched and priced this week. having tapped investment-grade Libor, which was 20bp inside its guidance, For the A$162.5m of Class A1-s and corporate bond buyers earlier this year, while the comparable tranche in the A$400m of Class A1-l notes, with but strong loan-to-value ratios raised BAMLL 2020-JGDN priced at 275bp over respective 0.5 and 3.0-year weighted comfort levels. Libor. average-lives, price talk is one-month “Financing is open for some operators, “It’s a very high quality mall. It will be BBSW plus 90bp area and 140bp–145bp but again, if you look at the Simon mall one that will be around in 10 years,” the area. deal, it had a good sponsor and very low fund manager said of the Chicago suburb Guidance for the A$93m of Class A2, leverage, “ said Alan Todd, head of CMBS mall. A$37.5m of Class B, A$24m of Class C, research at BofA Global Research. Lighter scheduled lease rollovers are A$13.5m of Class D and A$7.8m of Class The Simon deal, BAMLL 2020-JGDN, has also thought to have made a difference to E notes, with 3.0, 4.0, 4.0, 4.0 and 3.7- a loan-to-value ratio of 38.0%, while pricing for the Oakbrook mall, where year WALs, guidance is 175bp–180bp, THEû"ROOKlELD )NSTITUTIONALû-ALLûDEAL û according to Fitch only 20% of its net 210bp–220bp, 275bp–285bp, BFLD 2020-OBRK has a lower LTV rentable area is due to expire in the next 375p–385bp and 600bp–625bp over one- of 26.3%. three years compared with nearly 69% month BBSW. That is well below the 79.5% on a OVERûTHEûNEXTûlVEûYEARSûFORû3IMONSû Price talk has not been announced for 53Mû3!3"ûONûAû"ROOKlELD property. the A$4.2m of Class F notes or the Institutional “super-regional” mall north A$3.75m of Class G1 notes, while the of New York City, which was priced in A$3.75m of Class G2 notes have been February, according to Fitch. ASIA MBS retained. 4HEû"ROOKlELD )NSTITUTIONALû-ALLSû Respective credit support for the Class property does carry US$156m mezzanine PEPPER SETS PRS28 GUIDANCE A1 to F notes is 25%, 12.6%, 7.6%, 4.4%, debt, which adds to its overall leverage, 2.6%, 1.56% and 1.0%. but it is not enough to cause investor PEPPER GROUP has released guidance for the The non-bank lender, which is majority- concerns, according to a buyside analyst. A$750m (US$530m) no-grow, non- OWNEDûBYûGLOBALûINVESTMENTûlRMû++2 û Even so, Oakbrook, which has more conforming RMBS, PEPPER RESIDENTIAL previously sold non-conforming RMBS on long-term tenants and robust shopper SECURITIES TRUST NO. 28 (or PRS28). August 12, the upsized A$1bn Pepper TRAFlC ûWASûABLEûTOûGARNERûCHEAPERû NAB is arranger and joint lead manager Residential Securities Trust No. 27 (or lNANCINGûTHANûTHEûSMALLERû3IMONûMALLû with CBA, Macquarie and Westpac for the PS27).

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International Financing Review November 7 2020 35

5 IFR Bonds 2358 p21-37.indd 35 06/11/2020 19:08:29 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 6/11/2020 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) SSAR EUROS Nov 2 2020 Hessen €500m Nov 8 2030 0 102.8 MS-1 / B+34.8 -0.278

Nov 5 2020 Berlin €250m incr Sep 9 2050 0.35 105.8 - - (€1.25bn) Nov 6 2020 Lower Austria €500m Nov 16 2035 0 99.75 MS+11 / B+46.4 0.017

STERLING Nov 2 2020 LB Sutton £250m (£150m Nov 9 2055 (30yr WAL) 1.732 100 G+95 1.732 retained) SWISS FRANCS Nov 5 2020 Freiburger KB SFr35m incr Nov 1 2044 0.1 98.27 MS+34 / Eidg+55 0.174 (SFr225m) Nov 5 2020 BCV SFr100m incr Oct 5 2032 0.15 100.5 MS+38 / Eidg+59.3 0.107 (SFr225m) Nov 6 2020 Luzerner KB SFr300m Nov 25 2032 0.125 100.7 MS+34 / Eidg+52 0.067 NON CORE Nov 4 2020 Region Skane green SKr850m Nov 11 2027 0.278 100 - 0.278 Nov 5 2020 region Skane green SKr450m incr Nov 11 2027 0.278 99.97 - 0.283 (SKr1.3bn) Nov 6 2020 Dunedin NZ$60m Nov 16 2026 0.676 100 MS+47 0.676 CORPORATES US DOLLARS Nov 5 2020 Waste Management US$500m Nov 15 2025 0.75 99.83 T+45 0.785

Nov 5 2020 Waste Management US$500m Mar 15 2028 1.15 99.94 T+60 1.159

Nov 5 2020 Waste Management US$1bn Mar 15 2031 1.5 99.76 T+75 1.525

Nov 5 2020 Waste Management US$500m Nov 15 2050 2.5 99 T+100 2.548

EUROS Nov 5 2020 Ferrovial €500m Nov 12 2028 0.54 100 MS+90 / B+127.5 0.54

STERLING Nov 6 2020 Clarion Funding sustainable £300m Nov 13 1932 1.25 98.948 G+95 1.341

SWISS FRANCS Nov 6 2020 Swissgrid SFr130m Jun 30 2036 0.125 100.1 MS+30 / Eidg+51.4 0.12

FINANCIALS EUROS Nov 6 2020 HSBC Holdings €1bn Nov 13 2026 (Nov 2025) 0.309 100 MS+80 / B+112.5 0.309

Nov 6 2020 HSBC Holdings €1bn Nov 13 2031 (Nov 2030) 0.77 100 MS+105 / B+140.3 0.77

NON CORE Nov 4 2020 Bendigo and Adelaide Bank A$450m Perpetual (Jun 2027) 3mBBSW+380 100 3mBBSW+380 - AT1 SWISS FRANCS Oct 22 2020 Raiffeisen Schweiz SFr175m Nov 23 2034 (Nov 2033) 1.5 100 MS+173.25 / 1.5 Saron+179.75 HIGH YIELD US DOLLARS Nov 2 2020 Molina Healthcare US$650m Nov 15 2030 (Aug 2030) 3.875 100 T+318 3.875

Nov 2 2020 Specialty Building Products US$50m (inc Sep 30 2026 (Sep 2022) 6.375 100.8 T+573 6.22 Holdings US$600m) Nov 5 2020 Antero Midstream Partners / US$550m May 15 2026 (May 2023) 7.875 100 T+755 7.875 Antero midstream Finance EUROS Nov 2 2020 Lorca Telecom €80m incr Sep 18 2027 (Sep 2023) 4 101.4 B+455.5 3.771 (€800m) NON CORE Oct 30 2020 Beerenberg NKr750m Nov 13 2023 (May 2022) 3mN+800 98 - -

36 International Financing Review November 7 2020

5 IFR Bonds 2358 p21-37.indd 36 06/11/2020 19:08:29 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS-1 area - €500m, 28acs -/AA+ Barc / BNPP / CMZ / DZ / Helaba Ger 54%, Aus/Switz 11%, Benelux 18%, UK 6%, Nordics 5%, Other 6%. Bks 43%, FM 40%, CB/OI 14%, Other 3% - - - Aa1/-/AAA/AAA JPM - Scope MS+16 area - €2bn Aa1 Erste / HypoNOE / RBI / Uni / - HypoBurgen

G+100 area, - £165m Aa3 RBC - G+95/+100

- - - ZKB AA+ KBFri -

MS+38/+40, - - ZKB AA- ZKB -

- - - -/AA KBLuz -

- - - -/AA+/-/Cicero 2po Danske - - - - -/AA+/-/Cicero 2po Danske -

MS+47/+52 - - -/AA ANZ -

T+70/+75, T+50 -4 US$2.7bn Baa1/A-/BBB+ Barc / Miz / BofA / JPM / Scotia / - (+/-5) BNPP /Citi / DB / MUFG / SMBC / USB T+95 area, T+65 -4 US$3bn Baa1/A-/BBB+ Barc / Miz / BofA / JPM / Scotia / - (+/-5) BNPP /Citi / DB / MUFG / SMBC / USB T+115 area, T+80 -4 US$4bn Baa1/A-/BBB+ Barc / Miz / BofA / JPM / Scotia / - (+/-5) BNPP /Citi / DB / MUFG / SMBC / USB T+130/+135, T+105 -5 US$4.4bn Baa1/A-/BBB+ Barc / Miz / BofA / JPM / Scotia / - (+/-5) BNPP /Citi / DB / MUFG / SMBC / USB

MS+130 area, -10 €3.6bn -/BBB/BBB Caixa / CA-CIB / HSBC / NatWest / - MS+100 area RBC / Santan

G+110/+115, G+100 - ~£700m A3/A HSBC / NatWest / Santan - area

MS+30/+33 -4 27acs ZKB AA / Fedafin ZKB Switz 100%. AM 45%, PB 26%, Ins 23%, Aa+ PF 6%.

MS+105 area, - €2.8bn A2/A-/A+ HSBC - MS+80/+85 MS+130 area, - €2.9bn A2/A-/A+ HSBC - MS+105/+110

3mBBSW+380/+400 - - - WBC / NAB / OrdMin / UBS -

0 - - -/A-/- Raiff / UBS -

- - - Ba3/BB- BofA / Truist / Barc / DB / JPM / - MUMSS / WFS - - - B3/B- BofA -

7.75%/8% - - B3/B- JPM / Barc / Citi / CA-CIB / Truist - / WFS

101.25-101.375 - - B1/B+/BB MS / Barc / BNPP / DB / CA-CIB / - Miz / Santan

- - - - ABG / Danske

International Financing Review November 7 2020 37

5 IFR Bonds 2358 p21-37.indd 37 06/11/2020 19:08:30 GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (6/11/2020) Moody’s S&P Fitch Moody’s S&P Fitch Sovereign 1 2 3 4 5 6 Sovereign 1 2 3 4 5 6 Abu Dhabi Aa2 – AA AA+ AA AA+ Laos Caa2 n – – – CCC B– Albania B1 Ba2 B+ BB – – Latvia A3 Aaa A AAA A– AAA Andorra – Ba2 BBB AAA BBB+ A+ Lebanon Caa2 Caa1 D CC CC CCC Angola Caa1 B3 B– n B– CCC B Lesotho – – – – B B+ Argentina Caa2 Caa1 CCC+ CCC+ RD CCC Liechtenstein – Aaa AAA AAA – – Armenia Ba3 Ba1 – – B+ B– Lithuania A3 p Aaa A AAA A– p AAA Aruba – – BBB+ n BBB+ BBB– n BBB Luxembourg Aaa Aaa AAA AAA AAA AAA Australia Aaa Aaa AAA AAA AAA n AAA Macau Aa3 Aa2 – – AA nAAA Austria Aa1 Aaa AA+ AAA AA+ AAA Macedonia (FYR) – – BB– BB BB+ n BBB– Azerbaijan Ba2 Ba2 BB+ BB+ BB+ BB+ Malaysia A3 A1 A– n A+ A– A Bahamas Ba2 n Baa1 BB+ BBB– – – Maldives B2 n Ba3 – – CCC d B– d Bahrain B2 Ba3 B+ p BB– B+ BB+ Mali Caa1 n B1 – – – – Bangladesh Ba3 Ba2 BB– BB– BB– BB– Malta A2 Aaa A– p AAA A+ AAA Barbados Caa1 B2 B– B– – – Mauritius Baa1 A2 – – – – Belarus B3 B3 B n B B B Mexico Baa1 n A1 BBB+ n A+ BBB– BBB+ Belgium Aa3 Aaa AA AAA AA– AAA Moldova B3 B2 – – – – Belize Caa1 n B1 CC + CCC – – Mongolia B3 n B1 B B+ B B+ Bermuda A2 Aa3 A+ AA+ – – Montenegro B1 p Ba1 B+ n AAA – – Bolivia B2 B1 B+ B+ B B Montserrat – – BBB– BBB– – – Bosnia Herzegovina B3 B3 B BB– – – Morocco Ba1 Baa2 BBB– n BBB+ BBB– n BBB Botswana A2 n Aa3 BBB+n A – – Mozambique Caa2 Caa1 CCC+ CCC+ CCC B– Brazil Ba2 Ba1 BB– BB+ BB– n BB Namibia Ba2 n Baa3 – – BB BB+ Bulgaria Baa1 Up A1 BBB A BBB p A– Netherlands Aaa Aaa AAA AAA AAA AAA Cambodia B2 B1 – – – – New Zealand Aaa Aaa AA p AAA AA AAA Cameroon B2 Ba2 B n BBB– B n BB+ Nicaragua B2n B1 B– B– B– n B– Canada Aaa Aaa AAA AAA AA+ AAA Nigeria B2 n B1 B B+ B B Cape Verde – – B BB– B– B Norway Aaa Aaa AAA AAA AAA AAA Cayman Islands Aa3 Aa2 – – – – Oman Ba3 n Baa3 B+ BB– BB– n BB+ Chile A1 n Aa2 A+ AA A– A+ Pakistan B3 B2 B– B– B– B– China A1 Aa3 A+ A+ A+ A+ Panama Baa1 n A2 BBB+ n AAA BBB A Colombia Baa2 A3 BBB– BBB+ BBB nBBB+ Papua New Guinea B2 B1 B– B– – – Congo (DR) B3 n B3 CCC+ CCC+ – – Paraguay Ba1 Baa3 BB BB+ BB+ BB+ Congo (Rep) Caa2 n B2 CCC+ BBB– CCC B+ Peru A3 A1 BBB+ A BBB+ A– Cook Islands – – B+ AAA – – Philippines Baa2 A3 BBB+ A– BBB p BBB+ Costa Rica B2 n Ba2 B– n BB– B n B+ n Poland A2 Aa3 A– A A– AA– Cote d’Ivoire Ba3 Baa3 – – B+ p BBB– Portugal Baa3 p Aa3 BBB AAA BBB AA Croatia Ba2 p Baa3 BBB BBB+ BBB– p BBB+ Qatar Aa3 Aa3 AA– AA AA– AA Cuba Caa2 Caa2 – – – – Ras al–Khaimah A AA+ A AA+ Curacao – – BBB–n BBB– – – Romania Baa3 n A3 BBB– A– BBB– n BBB+ Cyprus Ba2 p A2 BBB– AAA BBB– p A Russia Baa3 Baa2 BBB– BBB BBB BBB Czech Rep Aa3 Aa1 AA– AA+ AA– AAA Rwanda B2 n B1 B+ n B B+ B+ Denmark Aaa Aaa AAA AAA AAA AAA St Vincent & Gren B3 Ba3 – – – – Dominican Rep Ba3 Ba1 BB– n BB+ BB– BB– San Marino – – – – BBB– n BBB+ Ecuador B3 n B2 B– B– B– B– Saudi Arabia A1 n A1 A– A A A+ Egypt B2 B1 B B B+ B+ Senegal Ba3 Baa1 B+ BBB– – – El Salvador B3 B1 B– AAA B– n B Serbia Ba3 Ba1 BB+ BBB– BB+ BBB– Estonia A1 Aaa AA– AAA AA– AAA Seychelles – – – – B+ BB Eswatini B3 B1 – – – – Singapore Aaa Aaa AAA AAA AAA AAA Ethiopia B2 B1 B B B n B Slovakia A2 Aaa A+ AAA A AAA Fiji Ba3 n Ba3 BB– BB– – – Slovenia A3 Aaa AA– AAA A AAA Finland Aa1 Aaa AA+ AAA AA+ pAAA Solomon Islands B3 B2 – – – – France Aa2 p Aaa AA AAA AA n AAA South Africa Baa3 n A3 BB– BB+ BB+ n BBB– Gabon Caa1 p B1 – – B BB+ South Korea Aa2 Aa1 AA AAA AA– AA+ Georgia Ba2 Baa3 BB BBB– BB n BBB– Spain Baa1 Aa1 A n AAA A– AAA Germany Aaa Aaa AAA AAA AAA AAA Sri Lanka Caa1 Ba3 B– B– B– n B– Ghana B3 n B1 B– B B B Suriname Caa3 n Ba3 SD CCC– C CCC Greece B1 Baa1 BB– AAA BB BBB+ Sweden Aaa Aaa AAA AAA AAA AAA Guatemala Ba1 Baa3 BB– BB+ BB n BB+ Switzerland Aaa Aaa AAA AAA AAA AAA Honduras B1 Ba2 BB– BB – – Tanzania B2 Ba3 – – – – Hong Kong Aa2 n Aaa AA+ AAA AA– AAA Taiwan Aa3 Aa2 AA– AA+ AA– AA+ Hungary Baa3 p Baa1 BBB A– BBB A Thailand Baa1 A2 BBB+ A BBB+ pA– Iceland A3 p A3 A A A n A+ Trinidad & Tobago Ba1 n Baa3 BBB BBB+ – – India Baa3 n Baa1 BBB– BBB+ BBB– BBB– Tunisia B2 n Ba3 – – B B+ Indonesia Baa2 A3 BBB n BBB+ BBB BBB Turkey B2 n B1 B+ BB– BB– n BB– Iraq Caa1 B3 B– AAA B– n B– Turks & Caicos – – BBB+ AAA – – Ireland A2 Aaa AA– AAA A+ AAA Uganda B2 Ba3 BB A– B+ n B+ Israel A1 Aa3 AA– AA+ A+ AA Ukraine B3 B3 B B B pB Italy Baa3 Aa3 BBB AAA BBB– AA– UAE Aa2 Aa2 – – – – Jamaica B2 Ba3 B+ n BB– B+ BB– UK Aa3 Aaa AA + AAA AA n AAA Japan A1 p Aaa A+ AA+ A AAA USA Aaa Aaa AA+ AAA AAA n AAA Jordan B1 Ba1 B+ BB BB– nBB Uruguay Baa2 A2 BBB A– BBB– n BBB+ Kazakhstan Baa3 p Baa2 BBB– BBB BBB BBB+ Uzbekistan – – BB– n BB– Kenya B2 n Ba3 B+ n BB– B+ BB– Venezuela C Ca SD CC – – Kuwait A1 Aa3 AA– n AA AA AA+ Vietnam Ba3 Ba1 BB BB BB pBB Kyrgyzstan B2 Ba3 – – – – Zambia Caa2 n B3 SD CCC+ CCC– CCC– 1 Moody’s Government Bonds 5 Fitch Government Bonds n Negative outlook/on watch * Taken off positive watch/ c Improvement in ratings, 2 Moody’s Country Ceilings 6 Fitch Country Ceilings for downgrade outlook outlook or watch status 3 S&P Government Bonds p Positive outlook/on watch N New rating ** Taken off negative watch/ d Deterioration in ratings, 4 S&P Transfer and for upgrade W Rating withdrawn outlook outlook or watch status Convertibility Assessments SD Selective default 38 International Financing Review November 7 2020

6 IFR Global Debt 2358 p38.indd 38 06/11/2020 18:26:52 EMERGING MARKETS China 40 India  Maldives  Egypt  Russia  Zambia  Suriname 

„ FRONT STORY CHINA Call risk rises on Chinese perps Recent decisions not to redeem onshore perpetuals have stirred the market

A tougher operating environment due to the THATûITûWOULDûCALLûTHEûPERPS ûWHICHûWEREû 4SINGHUAû5NIVERSITY BACKEDûCHIPMAKERû #OVID ûPANDEMICûHASûBROUGHTûCALLûOPTIONSû ISSUEDûINû TSINGHUA UNIGROUP also caught the market’s on China’s onshore corporate perpetual 4HEûûCOUPONûWILLûBEûRESETûTOûTHEûINITIALû ATTENTIONûWITHûAûSKIPPEDûCALLûONû/CTOBERû û BONDSûINTOûFOCUS ûWITHûMOREûISSUERSû SPREADûOFûBPûOVERûTHEûPREVAILINGûlVE YEARû following mounting liquidity concerns in expected to skip early redemptions as a #HINESEûGOVERNMENTûBONDûYIELDûPLUSûAûBPû the past few months. It said it would not spike in call dates looms. STEP UPû1INGHAIû3/!)-ûCITEDûTHEûNEGATIVEû REDEEMû2MBBNûûPRIVATELYûPLACEDû Recent decisions by two state-backed impact of the coronavirus pandemic as one of PERPETUALûNON CALLûlVEûNOTESûONûTHEûlRSTûCALLû issuers not to redeem their perpetual bonds the reasons it had changed its decision. An asset DATEûOFû/CTOBERû ûBUTûWOULDûPAYûTHEû have reminded investors of the duration MANAGEMENTûUNITûOFû1INGHAIûPROVINCIALû related interest. RISKSûATTACHEDûTOûBONDSûWITHûNOûlXEDû GOVERNMENT ûTHEûISSUERûHASûBUSINESSûINûMANYû 4HEûPERPSûHAVEûAûCOUPONûRESETûANDûBPû maturity. INDUSTRIES ûSUCHûASûCOAL ûSTEEL ûSALTûANDûCHEMICALSû STEP UPû4HEûNON CALLûEVENTûTRIGGEREDûAûSELL Some investors have tended to assume 2ATINGSûAGENCYû$AGONGûONû/CTOBERûûREVISEDû OFFûOFûITSûBONDS ûEVENûTHOUGHûTHEûCOMPANYû ISSUERSûWILLûCALLûTHEIRûPERPSûONûTHEûlRSTûCALLû the outlook on the AA+ issuer and bond ratings had redeemed two privately placed bonds DATE ûESPECIALLYûTHOSEûNOTESûWITHûAûCOUPONû TOûNEGATIVEûFROMûSTABLE ûSAYINGûTHEûNON CALLûEVENTû TOTALLINGû2MBBN RESETûANDûHIGHûSTEP UPûFEATUREû(OWEVER û WILLûINCREASEûlNANCINGûCOSTSûANDûHIGHLIGHTSû #HINAûSAWûITSûlRSTûCORPORATEûPERPûINû û investors found that they cannot take this liquidity pressure and operational risk. but the instrument only became popular in for granted even if the issuer has initially !TûAûBONDHOLDERûMEETINGûONû4HURSDAY ûAû LATEûû"EIJINGû#APITALû'ROUPûWASûTHEûlRSTû announced that it will exercise the call. GROUPûOFûCREDITORSûPROPOSEDûTHATû1INGHAIû TOûSKIPûAûCALLûOPTION ûINû ûBUTûTHEû QINGHAI STATE-OWNED ASSETS INVESTMENT AND 3/!)-ûREDEEMûTHEûPERPSûINûPHASES ûSTARTINGû number of issuers opting not to redeem MANAGEMENT ûWHICHûISûOWNEDûBYûTHEû1INGHAIû WITHûAû2MBMûPAYMENTûINûTHEûNEXTûû THEIRûBONDSûHASûJUMPEDûINûû PROVINCIALû3!3!# ûSURPRISEDûTHEûMARKETûONû DAYSûANDûFOLLOWEDûBYû2MBMûONû 4HISûYEARûALONE ûûPERPSûWITHûAûCOMBINEDû /CTOBERûûWITHûANûANNOUNCEMENTûTHATûITû .OVEMBERûû û2MBMûONû.OVEMBERû PRINCIPALûAMOUNTûOFû2MBBNûWEREûNOTû WOULDûNOTûCALLû2MBBNû53M ûOFû ûûANDû2MBMûONû.OVEMBERûûû CALLEDûASûATû*ULYû ûACCORDINGûTOû#)##û PERPSûONûTHEûlRSTûCALLûDATEûOFû.OVEMBERûû 4HEûRESULTûOFûTHEûMEETINGûWASûNOTûYETû research. 4HISûWASûDESPITEûSAYINGûONû3EPTEMBERûû announced at the time of writing. Carol Chan Evergrande’s dollar bonds gain on asset disposal Stake sale will help ease liquidity pressure but more action is needed to restore investor confidence

CHINA EVERGRANDE GROUP’s US dollar bonds rose 2ESEARCHûlRMû#REDIT3IGHTSûSAIDûTHEû 2MBBNûINû*ANUARY ûCOMPLETEDûAû about one point across the curve last Monday disposal could help alleviate the liquidity (+BNû53M ûSHAREûPLACEMENTûANDû on news of an asset disposal that market concerns that caused a sell-off in reported strong contracted sales. participants viewed as credit positive. Evergrande’s shares and bonds in late .OMURAûSAIDûTHEûDISPOSALûOFû'UANGHUIû )NûAûSTOCKûEXCHANGEûlLINGûONû.OVEMBERû û September. )NDUSTRIALSûSTAKEûISûhUNDOUBTEDLYûPOSITIVEv û the heavily indebted property developer said h/VERALL ûWEûVIEWûTHISûDISPOSALûASûCREDIT though to what extent it can “restore market it had entered an agreement to sell its entire POSITIVEûASûITûWOULDûGENERATEû2MBBNûINû CONlDENCEûANDûRESTARTûITSûlNANCINGûCHANNELSû 40.96% equity interest in Xinjiang Guanghui CASHûTOûADDRESSûNEAR TERMûDEBTûOBLIGATIONS û REMAINSûAûCONCERNvû)TûALSOûNOTEDûTHATû Industrial Investment (Group) to Shenergy especially those that cannot be rolled over. %VERGRANDESûlNANCINGûREMAINSûPRESSUREDûBYûITSû 'ROUPûFORû2MBBNû53BN û4HEûSALEû (OWEVER ûWEûNOTEûTHATûTHISûDISPOSALûALONEûISû inability to access the international bond markets. will not result in any material gain or loss. INSUFlCIENTûTOûREDUCEûITSûLEVERAGEû .OMURAûREITERATEDûITSûNEUTRALûSTANCEûONû %VERGRANDEûSAIDûTHEûDISPOSALûOFûTHEûSTAKE û SUBSTANTIALLY vû#REDIT3IGHTSûWROTEûINûAûNOTE Evergrande’s shorter-dated bonds and stayed BOUGHTûINû ûWILLûALLOWûITûTOûFOCUSûMOREû 4HEûSHARESûANDûBONDSûHADûDIVEDûAFTERûAû cautious on the longer-dated ones. on its core business and that it planned to DOCUMENTûCIRCULATINGûONûSOCIALûMEDIA ûWHICHû -EANWHILE ûINûAû.OVEMBERûûlLING û use the proceeds as general working capital. THEûCOMPANYûSAIDûWASûFAKE ûAPPEAREDûTOû Evergrande said it had contracted sales of Guanghui Industrial is the controlling show it pleading for government assistance 2MBBNûINûTHEû*ANUARYn/CTOBERû shareholder of Shanghai-listed China Grand TOûAVERTûAûLIQUIDITYûCRISISû3INCEûTHEN û PERIOD ûREPRESENTINGûûOFûITSûTARGETûFORû !UTOMOTIVEû3ERVICESû'ROUP û'UANGHUIû Evergrande has made progress on IPOs for its the full year. Its cash collections for the Energy and Guanghui Logistics and holds a property management and electric vehicle PERIODûREACHEDû2MBBN ûAGAINSTû major stake in Hong Kong-listed Grand UNITS ûPERSUADEDûAûGROUPûOFûINVESTORSûTOû 2MBBNûFORûALLûOFûLASTûYEAR Baoxin Auto Group. waive their right to repayments totalling Carol Chan

International Financing Review November 7 2020 39

7 IFR Emerging 2358 p39-44.indd 39 06/11/2020 18:29:46 ASIA-PACIFIC Indian issuers ramp up bonds „ INDIA Competitive yields and abundant liquidity fuel domestic issuance CHINA Indian companies are increasingly turning to measures which have ensured ample of liquidity INDUSTRIAL BANK HK SELLS ESG BONDS bonds as spreads over government benchmarks in the system, the risk premium on NBFC [non- have fallen below pre-Covid levels. banking financial company] papers started to INDUSTRIAL BANK HONG KONG BRANCH raised The average spread on 10-year AAA public decline,” said Dinesh Prajapati, head of accounts, AROUNDû53MûFROMûAûDUAL CURRENCYû sector corporate bonds has narrowed to 58bp treasury and corporate affairs at MAHINDRA Reg S senior unsecured bond to support from 95bp in early February, on the back of FINANCE. “Hence, we will gradually reduce the sustainable investments. liquidity infusions from the central bank since liquidity buffer on [our] balance sheet back to !û53MûûTHREE YEARûBLUEûBONDû the onset of the pandemic, according to Refinitiv normal levels from Rs85bn currently.” PRICEDûATûûTOûYIELDûûORû data. Three-year AAA rated PSU corporate bonds Mahindra Finance more than doubled its 4REASURIESûPLUSûBP ûWHILEûAû(+BNû now pay only 18bp over government securities, liquidity buffer in the past year in anticipation 53M ûTWO YEARû#OVID ûRESPONSEû half the pre-Covid levels. of widening spreads and funding challenges. BONDûPRICEDûATûPARûTOûYIELDûû4HEû The rally has also percolated into the private It raised Rs39bn from rupee bonds and nearly RESPECTIVEûINITIALûPRICEûGUIDANCEûWASûBPû sector with three-year AAA rated corporate bond Rs31bn from a rights issue between April and AREAûANDûTHEûûAREA spreads narrowing to 78bp from around 140bp October. Orders for the dollar tranche were in pre-Covid and over 200bp at the peak of the EXCESSûOFû53BNûWHENûTHEûlNALû funding crisis in May. REPO OPERATIONS GUIDANCEûWASûANNOUNCED ûINCLUDINGû Last week, ICICI PRUDENTIAL LIFE INSURANCE The Reserve Bank of India has announced 53BNûFROMûTHEûLEADSû/RDERSûFORûTHEû raised Rs12bn (US$161m) from 10-year non-call targeted long-term repo operations totalling Hong Kong dollar portion were over five subordinated bonds at 6.85%, adding to Rs2.5trn since April, which has allowed banks (+BN ûINCLUDINGû(+BNûFROMûTHEû a flurry of maiden issues in the domestic bond to access funds at the policy rate to invest in leads. market. A rare public sector issuer, MANGALORE corporate bonds. Proceeds from the US dollar blue bonds REFINERY AND PETROCHEMICALS, also said it had “The central bank has sent a message to the WILLûBEûUSEDûTOûlNANCEûANDORûRElNANCEû board approval to raise up to Rs50bn from financial system through TLTROs that there ELIGIBLEûMARINEûASSETS ûSUCHûASûCOASTALû bonds. will be enough liquidity available in the system POLLUTIONûPREVENTIONûPROJECTS ûSEWAGEû Indian companies are estimated to raise for stressed businesses,” said Vivek Karve, chief TREATMENTûANDûmOODûCONTROLû!ûSECONDû a record Rs8.2trn from bonds in FY21, which financial officer at Mahindra Finance. “This has opinion came from Sustainalytics. will end in March, up 25% from a year earlier, given comfort to investors to participate more 4HEûBLUEûBONDûISûONLYûTHEûSECONDûOFûITSû according to rating agency Icra. freely in the debt market and allowed corporates kind to be issued by a Chinese commercial to meet their near-term liabilities.” BANKû4HEûRELATIVELYûNEWûSUSTAINABILITYû CHEAP MONEY Surplus liquidity in the financial system instrument was previously adopted by Corporate bond yields are not only competitive has increased to well over Rs5.5trn or 2.7% of "ANKûOFû#HINA ûRATEDû!!! ûINû3EPTEMBERû with government bonds, they are more than GDP, according to ANZ, thanks in part to RBI WHENûITûPRICEDûTHEûWORLDSûlRSTûBLUEûBONDSû 100bp lower than bank lending rates. measures such as expanding its purchases FROMûAûCOMMERCIALûBANKûWITHûAû53M “The money available from the bond market of government bonds through open market equivalent dual-currency Reg S deal to is way too cheap,” said a DCM banker from a operations to include state government bonds SUPPORTûOCEANûCONSERVATIONû4HEû"/#ûDEALû foreign bank. The one-year marginal corporate for the first time, helping keep short-term yields WASûALSOûTHEûlRSTûSUCHûPUBLICûOFFERINGûINû lending rate of banks is above 7% while AAA low. Asia. rated companies can borrow in the range of 5% “The open market operations by RBI Proceeds from the Hong Kong dollar to 6% at the shorter end of the curve. for buying state-government and central #OVID ûRESPONSEûBONDSûWILLûBEûUSEDûFORû Competitive rates in the bond market have government bonds has allowed more churning also reduced the need for companies to maintain of portfolio by the trading and treasury desks, ALL INTL EMERGING MARKETS BONDS high on-balance sheet liquidity. enabling investors to participate in bonds of BOOKRUNNERS: 1/1/2020 TO DATE “Given the accommodative stance by the other industries,” Karve said. Asia-Pacific Reserve Bank of India and central government Krishna Merchant Managing No of Total Share bank or group issues US$(m) (%) 1 HSBC 252 26,775.97 7.8 loans with the purpose of improving Industrial Bank Hong Kong branch 2 Citigroup 153 20,324.76 5.9 RESILIENCEûAGAINSTûPANDEMICS ûSUCHûASûTHEû and Credit Agricole are joint 3 Standard Chartered 174 18,280.92 5.3 MANUFACTURINGûOFûPROTECTIVEûEQUIPMENT û structuring advisers for both 4 JP Morgan 118 14,747.82 4.3 medicines and ensuring essential supplies tranches. 5 Bank of China 194 14,730.50 4.3 TOûHARD HITûAREASû)TûISûTHEûlRSTûBONDûISSUEDû Industrial Bank Hong Kong branch û 6 UBS 136 13,063.51 3.8 UNDERûTHEû(ONGû+ONGû1UALITYû!SSURANCEû Agricultural Bank of China Hong Kong 7 Bank of America 84 12,899.63 3.8 !GENCYSûNEWû#OVID ûRESILIENCEûlNANCEû branch ûBank of China ûBank of 8 Goldman Sachs 70 12,577.52 3.7 CERTIlCATIONûSCHEMEû Communications ûChina Industrial Securities 9 BNP Paribas 105 10,200.48 3.0 Industrial Bank Hong Kong’s new notes International ûChina Minsheng Banking Corp 10 Credit Suisse 109 9,994.83 2.9 will be issued off the Chinese lender’s Hong Kong branch ûChiyu Banking Corp û Total 729 341,736.26 53BNû-4.ûPROGRAMMEû4HEûBONDSûHAVEû Citigroup ûCMB Wing Lung Bank and Credit

Excluding equity-related debt. ANûEXPECTEDû"AAûRATINGûBYû-OODYS ûONû Agricole were global coordinators for both Source: Refinitiv SDC code: L4 par with the issuer. tranches.

40 International Financing Review November 7 2020

7 IFR Emerging 2358 p39-44.indd 40 06/11/2020 18:29:46 EMERGING MARKETS ASIA-PACIFIC

no other foreign marketable debt falling due INDIA UNTILûTHATûMATURITY û&ITCHûSAIDûTHEû RUSSIA GOVERNMENTûHASû53MûOFûEXTERNALûDEBTû IRFC APPOINTS BANKS FOR DOLLAR SERVICEûOBLIGATIONSûFROMû1ûûTHROUGHû RUSSIAN RAILWAYS HITS MAXIMUM BONDS 1ûû!NûADDITIONALû53MûINû IN BUYBACK government-guaranteed debt will also need INDIAN RAILWAY FINANCE CORP appointed BNP to be serviced during the period. RUSSIAN RAILWAYS has accepted its maximum Paribas ûDBS Bank ûMUFG ûStandard Chartered û 4HEûDOWNGRADEûPROMPTEDûAûQUICKû target amount through a bond buyback of HSBC and SBI Capital Markets for a potential RESPONSEûFROMûTHEûSOVEREIGN ûWHICHû ITSûõBNûûNOTESûDUEû 53ûDOLLARûBONDûOFFERING ûACCORDINGûTOûAû UNDERLINEDûITSûWILLINGNESSûTOûFULlLûITSûDEBTû Holders had offered to give up around source close to the plans. OBLIGATIONSûANDûEXPRESSEDûCONlDENCEûOVERû õMûOFûNOTESû4HEûCOMPANYûACCEPTEDû 4HEûSTATE OWNEDûISSUER ûRATEDû"AA"""n THEûPACEûOFûRECOVERYûINûTOURISM ûWHICHû õM ûITSûTARGETûAMOUNT ûVIAûJP Morgan and """n ûISûLOOKINGûTOûRAISEûUPûTOû53BNûINû RESTARTEDûONû*ULYû VTB Capital. !ûFORMAT h4HOUGHûSLOWûBYûPRE PANDEMICûSTANDARDS û 4HEûPURCHASEûPRICEûWASû )Nû&EBRUARY û)2&#ûRAISEDû53BNûFROMûITSû the tourism number has been improving 4HEûCOMPANYûSAIDûTHEûBUYBACKûWASûDRIVENû DEBUTû9ANKEEûBONDû)TûPRICEDûAû53Mû MONTHûBYûMONTH vûSAIDûTHEû-ALDIVESû by its robust liquidity position and liability YEARûTRANCHEûATûPARûTOûYIELDûûANDûAû lNANCEûMINISTRYûh7EûAREûCONlDENTûTHATûTHISû management objectives. 53Mû YEARûTRANCHEûATûPARûTOûYIELDû momentum can be continued as we enter  OURûTRADITIONALûPEAKûSEASONûANDûBEYONDv 4HEûBONDSûWEREûISSUEDûOFFûAû53BNû-4.û 4HEûGOVERNMENTûSAIDûITûWOULDûHOLDûANû ZAMBIA programme. INVESTORûCALLûONû.OVEMBERû )2&#ûISûYETûTOûMAKEûANûOFlCIALû Fitch expects tourism in the Maldives to CREDITORS SET TO REJECT REQUEST FOR announcement on the planned bond sale. REMAINûSUBDUEDûTHROUGHûNEXTûYEAR ûWITHû EUROBOND PAYMENT DEFERRAL arrivals recovering to pre-pandemic levels ADANI GAS EYES US$400m FROM BONDS ONLYûBYûTHEûENDûOFûû4HEûRATINGSû Holders of ZAMBIA’s Eurobonds plan to reject agency forecasts the tourism-dependent a government request to defer payments on ADANI GAS received board approval to raise up ISLANDûNATIONSûECONOMYûTOûCONTRACTûBYûû ITSûSOVEREIGNûDOLLARûDEBT ûACCORDINGûTOûFOURû TOû53MûFROMû53ûDOLLARûBONDS û THISûYEAR ûEXCEEDINGûTHEûECONOMICû SOURCES ûPUSHINGûTHEûCOUNTRYûCLOSERûTOWARDSû ACCORDINGûTOûAûlLINGûONû"3% DOWNTURNSûSEENûAFTERûTHEûûGLOBALû a protracted debt overhaul and possible hard 4HEûBONDSûWILLûBEûISSUEDûINûONEûORûMOREû lNANCIALûCRISISûANDûTHEûûTSUNAMIû DEFAULT û2EUTERSûREPORTS tranches overseas and may be listed in India Government debt is expected to jump to :AMBIA ûWHICHûWASûSTRUGGLINGûWITHû or other stock exchanges. ûOFû'$0ûINûûFROMûûINû û mounting debts even before the coronavirus 4HEûNOTESûWILLûBEûPLACEDûPRIVATELYûANDû according to Fitch. pandemic as a result of the plunge in prices proceeds will be used to fund capex for the 7HILEûFOREIGNûCURRENCYûBUFFERSûAREû FORûCOPPER ûITSûMAINûEXPORT ûHASûTHREEûDOLLAR next two years. limited in light of drastically reduced denominated Eurobonds with a total face 4HEûCOMPANYûREPORTEDûûGROWTHûINû TOURISM RELATEDûINmOWS û&ITCHûSAIDûTHEû VALUEûOFû53BN PROlTûAFTERûTAXûTOû2SBNû53M ûINûTHEû authorities had managed to secure It asked in September to delay interest quarter ended September compared to SIGNIlCANTûMULTILATERALûANDûBILATERALûSUPPORTû payments until April but was forced to 2SBNûINûTHEûSAMEûPERIODûLASTûYEAR INûRECENTûMONTHS ûINCLUDINGûTHROUGHûTHEû extend the deadline for creditors to vote on 4HEûFORMATûANDûRATINGûOFûTHEûBONDSûAREû International Monetary Fund’s Rapid Credit THEûPAYMENTûDEFERRALûPLANûTOû.OVEMBERûû yet to be announced. Facility. after failing to secure a quorum of Moody’s in May downgraded the bondholders. Maldives’ long-term local and foreign .OVEMBERûûISûALSOûTHEûENDûOFûTHEû DAYû MALDIVES currency issuer as well as the foreign- GRACEûPERIODûFORûAû53MûCOUPONû CURRENCYûSENIORûUNSECUREDûRATINGSûTOû"û PAYMENTûTHATûWASûDUEûONû/CTOBERûû.ON FITCH DOWNGRADES THE REPUBLIC FROMû" ûWHILEûMAINTAININGûAûNEGATIVEû payment would push Zambia into default on TO CCC outlook. its Eurobonds.

Fitch has downgraded the long-term ALL INTL EMERGING MARKETS BONDS foreign-currency issuer default rating of the BOOKRUNNERS: 1/1/2020 TO DATE REPUBLIC OF MALDIVES ûTOû###ûFROMû" ûCITINGû Managing No of Total Share prolonged external liquidity pressures and a EUROPE/AFRICA bank or group issues US$(m) (%) sharp increase in the country’s debt burden 1 Citigroup 254 58,007.41 8.8 due to the coronavirus outbreak. 2 HSBC 334 49,504.34 7.5 4HEûRATINGSûAGENCYûSAIDûRISKSûSURROUNDINGû EGYPT 3 JP Morgan 238 49,121.09 7.5 the sovereign’s ability to meet its debt 4 Standard Chartered 236 36,823.25 5.6 SERVICEûOBLIGATIONSûHADûINCREASED ûWITHû CABINET APPROVES SUKUK LAW 5 Goldman Sachs 125 32,037.04 4.9 foreign currency buffers low and the 6 BNP Paribas 159 28,933.91 4.4 country heavily dependent on the EGYPT’s cabinet approved a new law on 7 Deutsche Bank 130 28,411.41 4.3 international community for support 7EDNESDAYûTOûISSUEûSOVEREIGNûSUKUKûANDû 8 Bank of America 142 27,796.26 4.2 THROUGHûBILATERALûANDûMULTILATERALûlNANCING WILLûSENDûITûTOûPARLIAMENTûFORûAûVOTE ûTHEû 9 Credit Agricole 126 17,613.75 2.7 4HEûGOVERNMENTûHASûAû53Mû2EGû3û lNANCEûMINISTERû-OHAMEDû-AAITûSAID 10 Barclays 106 16,150.29 2.5 BONDûDUEû*UNEû ûWHICHûISûBIDûATû û Once parliament and the president Total 1,078 656,586.19

DOWNûFROMûABOVEûûINûLATEû-ARCH û APPROVEûTHEûLAW ûTHEûCOUNTRYûWILLûISSUEûITSû Excluding equity-related debt. according to MarketAxess. Although there is lRSTûSOVEREIGNûSUKUK ûTHEûMINISTRYûSAID Source: Refinitiv SDC code: L1

International Financing Review November 7 2020 41

7 IFR Emerging 2358 p39-44.indd 41 06/11/2020 18:29:46 GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 6/11/2020 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) ASIA Nov 3 2020 Fujian Yango Group US$175m May 10 2023 11.875 99.74 - 12

Nov 4 2020 Heeton Holdings S$70.3m Nov 13 2023 6.8 100 - 6.8 Nov 5 2020 Xuzhou ETDZ State-owned US$400m Nov 12 2023 4.5 100 - 4.5 Assets Management

A person familiar with the thinking of Zambia’s debt-to-GDP ratio is expected week as the country continues to seek the Zambia External Bondholder TOûTOPûûTHISûYEAR ûHAVINGûBALLOONEDû payment deferrals on its debt. #OMMITTEEûnûAûLARGEûGROUPûOFûCREDITORSû FROMûJUSTûOVERûûINûû)TSûEXTERNALû 4HEûFORMATIONûOFûTHEûCOMMITTEEûnûWHICHû holding more than 40% across all Zambia’s PUBLICûDEBTûBURDENûISûSOMEû53BN ûWITHû comprises asset managers such as Franklin BONDSûANDûAûBLOCKINGûSTAKEûINûEACHûISSUEûnû 53BNûOFûBILATERALûDEBT û53BNûOFû 4EMPLETON û%ATONû6ANCE û'-/ûANDû'REYLOCKû said they were likely to reject the OTHERûCOMMERCIALûDEBTûANDû53BNûOWEDû #APITALûnûCOMESûAFTERûTHEûCOUNTRYûSAIDûTHATûITû government’s plan. TOûMULTILATERALSûASûWELLûASûTHEû53BNûOFû WOULDûENTERûTHEû DAYûGRACEûPERIODûFORûAû h4HISûTIMEûROUND ûINSTEADûOFûTAKINGûNOû %UROBONDSû)TûOWESûABOUTû53BNûTOû#HINAû COUPONûDUEû/CTOBERûûONûITSûûû ACTION ûTHEYûWILLûINûALLûLIKELIHOODûBEûOBLIGEDû Creditors said a lack of progress in talks bonds in an effort to talk to creditors about TOûVOTEûAGAINSTûITûASû.OVEMBERûûISûTHEûCUT with the International Monetary Fund was how to restore public debt sustainability. OFFûFORûTHEûGRACEûPERIOD vûTHEûSOURCEûSAID disheartening while a deal to defer debt Investors on the committee also hold “You can’t realistically begin a repayments due in October on a China ûS ûWHICHûHAVEûALREADYûGONEû constructive and open dialogue while $EVELOPMENTû"ANKûLOANûLACKEDûDETAILS û through a consent solicitation to defer SOMEONEûISûHOLDINGûAûGUNûTOûYOURûHEADv such as size or terms. 53MûOFûPRINCIPALûPAYMENTSûDUEûONû 4HEûGROUPûCOULDûALREADYûHAVEûKILLEDûOFFû h4HEû:AMBIANSûOFFERûUSûBASICALLYûTWOû *UNEûûONûTHEûS the process but had chosen to give Zambia options: either we don’t pay you now or 4HEûSûWEREûBEINGûQUOTEDûONû4HURSDAYû MOREûTIME ûTHEûSOURCEûADDED WEûDONTûPAYûYOUûLATER vûSAIDûANOTHERû ATûAûBID OFFERûSPREADûOFûnûFORûAûMIDû Zambia’s government declined to CREDITOR ûWHOûHADûALREADYûVOTEDûTOûREJECTû MARKETûYIELDûOFûAROUNDû ûACCORDINGûTOû comment. the proposal. a broker. It still has the option of paying the coupon Zambia’s dollar bonds are trading at 4HEûNEWLYûELECTEDûGOVERNMENTûSAYSûTHATû TOûAVOIDûDEFAULT ûWITHûITSûNEXTûCOUPONû nûOFûFACEûVALUE ûACCORDINGûTOû ATûTHOSEûLEVELS ûAûMARKET BASEDûRElNANCINGûISû PAYMENTûNOTûDUEûUNTILû*ANUARY 4RADEWEBûDATA NOTûANûOPTION ûADDINGûTHATûITûISûINHERITINGûAû Creditors said the government had not ballooning debt load brought on by poor contacted them ahead of launching the lSCALûMANAGEMENTûANDûEXACERBATEDûBYûTHEû consent solicitation and had so far not #OVID ûPANDEMICû presented a convincing plan to make its 4HOSEûCONDITIONS ûPLUSûAûRECENTû debt sustainable. AMERICAS DEVALUATIONûOFûTHEûCURRENCY ûISûPUSHINGû h7EûNEEDûTRANSPARENCY ûENGAGEMENTûANDû EXTERNALûDEBTûTOWARDûûOFû'$0ûTHISûYEAR û AûCREDIBLEûPROGRAMME vûSAIDû0OLINAû UPûFROMûûLASTûYEAR ûACCORDINGûTOûANû +URDYAVKO ûHEADûOFûEMERGINGûMARKETSûATû SURINAME INVESTORûPRESENTATIONû4OTALûDEBT û "LUE"AYû!SSETû-ANAGEMENT ûADDINGûSHEû MEANWHILE ûISûEXPECTEDûTOûREACHûûOFû would be surprised if investors consented BONDHOLDERS FORM CREDITOR GDP. without having those pieces of information. COMMITTEE 7HILEûRECENTûOILûDISCOVERIESûWILLûBRINGûINû h4HEREûHASûTOûBEûAûCREDIBLEûPLANûTHATûTHEû EXTRAûCASHûOVERûTHEûMEDIUMûTERM ûFOREIGNû DEBTûCANûBEûSUSTAINED ûWHICHûWEûDONTû Holders of SURINAME’s dollar-denominated RESERVESûAREûINSUFlCIENTûTOûSTAYûCURRENTû HAVEûATûTHEûMOMENTv bonds formed a creditor committee last over the short-term on the country’s FOREIGNûCURRENCYûDEBT ûWHICHûMAKESûUPû ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS MAKESûUPûûOFûTHEûCOUNTRYSû53BNû BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE DEBTûSTOCK ûACCORDINGûTOûTHEûPRESENTATION Europe/Africa Middle East 4HEûCOMMITTEEûSAIDûITûWELCOMEDûAû Managing No of Total Share Managing No of Total Share dialogue with the new administration and bank or group issues US$(m) (%) bank or group issues US$(m) (%) “acknowledges the initial actions that have 1 JP Morgan 50 17,103.61 16.6 1 Standard Chartered 53 16,388.65 14.4 been taken by the authorities in an effort 2 Citigroup 35 12,857.63 12.5 2 Citigroup 34 14,555.27 12.8 to counter the economic headwinds facing 3 BNP Paribas 27 9,198.37 8.9 3 HSBC 49 13,606.54 11.9 the country along with the impact of the 4 Deutsche Bank 13 5,079.25 4.9 4 Goldman Sachs 14 9,900.27 8.7 #OVID ûPANDEMICvû 5 SG 16 4,843.00 4.7 5 Deutsche Bank 12 6,887.07 6.0 4HEûGOVERNMENTûISûSEEKINGûlNANCIALû 6 UniCredit 14 4,429.19 4.3 6 First Abu Dhabi Bk 24 6,052.14 5.3 assistance from the International 7 Barclays 16 4,414.85 4.3 7 JP Morgan 20 5,569.86 4.9 -ONETARYû&UNDûANDûOTHERûlNANCIALû 8 HSBC 16 4,388.70 4.3 8 Credit Agricole 18 4,222.15 3.7 INSTITUTIONSûTOûUNDERPINûlSCALûANDû 9 Gazprombank 13 3,355.67 3.3 9 Bank of America 7 4,171.79 3.7 economic reforms. 10 ING 9 3,218.82 3.1 10 BNP Paribas 9 4,070.82 3.6 Lazard Freres is acting as the Total 104 103,060.17 Total 127 114,012.34 GOVERNMENTSûlNANCIALûADVISER ûWHILEûTHEû

Excluding equity-related debt. Excluding equity-related debt. credit committee has hired Newstate Source: Refinitiv SDC code: L2 Source: Refinitiv SDC code: L5 Partners as its adviser.

42 International Financing Review November 7 2020

7 IFR Emerging 2358 p39-44.indd 42 06/11/2020 18:29:47 EMERGING MARKETS AMERICAS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

12% (the #) - - -/B-/-/BB- (Lianhe UBS/Guotai Junan/Central/CRIC/ - Global) Haitong Intl 7% area (min 6.8%) - - - OCBC - 5% area - - - Zhongtai/Huatai/Industrial/CNCB HK - Zhongtai International (Singapore)

h4HEûTELECOMSûSECTORûHASûHELDûUPûFAIRLYû NOTE ûASûWELLûASû!MERICAû-OVILSû#OLOMBIANû REGIONAL well and there should be strong demand UNITû#OMCEL ûWHICHûHASûRECENTLYûBEENû should any companies decide to come to RENAMEDû#LARO#OLOMBIAûANDûHASûAûû LATAM’S TELECOMS SEEN AS FUNDING MARKETûAFTERûELECTIONS vûSAIDû3HAMAILAû+HAN û ûBOND ûSAYûANALYSTS CANDIDATES director of emerging market strategies at Analysts are also looking at possible AllianceBernstein. M&A funding on the back of Brazilian telco Seen as one of the stronger sectors in Latin All this bodes well for telcos wishing to Oi’s efforts to shed assets and emerge from !MERICA ûTELECOMSûCOMPANIESûHAVEûBEENûACTIVEû raise funding in the bond markets either for BANKRUPTCYû4HEûCOMPANYûHASûRECEIVEDû in the capital markets this year and are likely to liability management purposes or for ABOUTû53BNûEQUIVALENTûINûBIDSûFORûITSû CONTINUEûTOûTAPû53ûDOLLARûBONDSûFORûRElNANCINGû investments in expanding their footprint. MOBILEûASSETSûFROMû4ELECOMSûCOMPANIESû and even M&A over the coming year. “It stands to reason that carriers will not 4IMû0ARTICIPACOES û4ELEFONICAû"RASILûANDû 4HEûREGIONûHASûALREADYûSEENûAûSTRINGûOFû ONLYûLOOKûTOûRElNANCEûEXISTINGûDEBTûATû !MERICAû-OVILSû#LARO ûACCORDINGûTOû telecoms companies hit the dollar bond attractive rates but that they would also Reuters. MARKETûINû ûINCLUDINGû#OLOMBIASû NEEDûTOûFUNDûADDITIONALûINVESTMENTS vûSAIDû “It’s our expectation that there could be COLTEL ûREGIONALûCARRIERûMILLICOM and two 3ULû!HMAD ûAûTELECOMSûANALYSTûATû&ITCHû AûDEBTûCOMPONENTûTOûTHATûDEALûASûWELL vû SUCHûDEALSûFROMû#HILEûnûVTR and WOM. Ratings. SAIDû&ITCHSû!HMAD ûNOTINGûTHATûFUNDINGû All those deals have performed well and 0OTENTIALûRElNANCINGûCANDIDATESûINCLUDEû could either come through the local or have rallied multiple points since they were 4ELEFONICAû#HILE ûWHICHûHASûAûûû international markets. issued earlier this year. &ORûINSTANCE û#OL4ELSûûSûANDû ALL INTL EMERGING MARKETS BONDS INTERNATIONAL ISLAMIC FINANCE DEBT 642SûûSûWEREûTRADINGûLASTûWEEKû BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE ATûDOLLARûPRICESûOFûûANDûûFORû Latin America Managing No of Total Share YIELDSûOFûûANDû ûRESPECTIVELY û Managing No of Total Share bank or group issues US$(m) (%) according to MarketAxess data. bank or group issues US$(m) (%) !NDû-ILLICOMû)NTERNATIONAL ûWHICHûOFFERSû 1 Standard Chartered 24 3,776.12 16.0 1 JP Morgan 48 12,721.59 13.1 telecoms services in Latin American under 2 HSBC 21 3,345.16 14.2 2 Citigroup 30 9,956.25 10.3 THEû4IGOûBRAND ûHITûTHEûMARKETûINû/CTOBERû 3 Dubai Islamic Bank 14 1,841.06 7.8 3 Bank of America 39 8,121.16 8.4 4 First Abu Dhabi Bk 11 1,377.75 5.8 WITHûAû53MûûûBONDûTHATûPRICEDû 4 Goldman Sachs 31 7,807.15 8.0 5 Citigroup 9 1,073.73 4.6 ATûPARûONûTHEûBACKûOFûAû53BNûORDERûBOOKû 5 Deutsche Bank 11 7,215.88 7.4 6 JP Morgan 4 1,070.58 4.5 ANDûISûNOWûTRADINGûATûAROUNDû 6 Itau Unibanco 21 5,811.32 6.0 7 Emirates NBD 12 1,059.51 4.5 6OLATILITYûINûTHEûRUN UPûTOûTHEû53û 7 Scotiabank 19 5,184.04 5.3 8 Islamic Dev Bank 8 855.67 3.6 presidential election has put dampener on 8 BNP Paribas 16 5,155.32 5.3 TOTAL PLAY 9 Natixis 3 785.53 3.3 ISSUANCE ûFORCINGû-EXICANûTELCOû to 9 Santander 24 4,829.58 5.0 delay its debut bond despite considerable 10 Gulf Int Bank 5 596.27 2.5 10 HSBC 14 4,582.94 4.7 Total 29 23,554.91 interest in the credit. But the way may be Total 110 96,990.23

clear once uncertainty over the US political Excluding equity-related debt. Excluding equity-related debt. landscape dissipates. Source: Refinitiv SDC code: L3 Source: Refinitiv SDC code: J27

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International Financing Review November 7 2020 43

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7 IFR Emerging 2358 p39-44.indd 44 06/11/2020 18:29:53 LOANS

Australia 46 China 46 Hong Kong 46 Singapore  Belgium  Germany 49 Netherlands 49 Russia 50 Sweden 50 Turkey 50 UK 51 United States 51 Leveraged Loans 53 Restructuring 56

„ FRONT STORY AUSTRALIAN MARKET Regulatory cloud over Aussie loans Government increases scrutiny of foreign lenders on national security grounds New rules threaten to knock M&A activity from offshore

Australian loan market participants, already international peers to distribute risks in reduce the availability of credit at precisely grappling with disruptions linked to the syndication. the time when it is needed more than ever Covid-19 pandemic, could soon face “The proposed changes have wide- to help the economy recover from the global additional hurdles as the government looks reaching implications for foreign lenders, pandemic, according to Gourlay. to increase scrutiny over foreign investors. and may lead to some of them looking The country is also one of the top three Following the coronavirus outbreak, the beyond Australia and deploying their capital LOANûMARKETSûINû!SIAû0ACIlCûANDûAûMAJORû government is proposing a number of INûOTHERûOFFSHOREûlNANCIALûCENTRES vûSAIDû SOURCEûOFûEVENT DRIVENûlNANCINGSû!USTRALIAû reforms to the foreign investment Alastair Gourlay, partner at Baker & CLOCKEDûINû53BNûOFûSYNDICATEDûANDûCLUBû framework, including revoking a -C+ENZIEûINû3YDNEYûh"ORROWERSûWILLûNEEDûTOû LOANSûINûTHEûlRSTûTHREEûQUARTERSûTHISûYEAR ûOFû “moneylending” exemption available to factor the impact of proposed changes into WHICHû53BNûFUNDEDûMERGERSûANDû foreign lenders taking security over their transactions, particularly in terms of acquisitions. Although overall lending in Australian assets that are deemed of extra cost and approval times.” !USTRALIAûROSEûûYEARûONûYEAR ûTHEûTALLYûOFû national security interest for the purpose of 4HEû!0,-!ûSAIDûINûITSûSUBMISSIONûTOûTHEû -!ûLOANSûDECLINEDûû lNANCINGû government last month: “In competitive “National security interest” is given a bids and, indeed, new projects, the sponsors NATIONAL SECURITY ISSUES mEXIBLEûMEANINGûANDûCANûEXTENDûTOûAûBROADû DONTûHAVEûTIMEûTOûALLOWûTHEûlNANCIERSûTOû 4HEûNEWûRULESûTHREATENûTOûKNOCKû-!û range of industries such as transport, wait out the FIRB notice periods, or wait for activity from offshore, particularly from energy, water and telecommunications EXEMPTIONûCERTIlCATESû China in sectors deemed of national interest. infrastructure, as well as defence industries h4HEû!0,-!ûCOUNSELSûAGAINSTûAûRUSHEDû Under Australia’s foreign investment and some media and data businesses, process, and requests an extension as a large framework, the Treasury has the power to AMONGûOTHERSû/FFSHOREûlNANCIERS û NUMBERûOFûFOREIGNûlNANCIERSûWITHûNOû block or impose conditions on certain deals including bond investors, may be subject to operations in Australia would need time to on national security grounds. approvals from the Foreign Investment become familiar with the process,” it added. The Australian foreign investment Review Board (FIRB) or secured lending in watchdog has recommended blocking affected businesses from January, should the INFRASTRUCTURE NEEDS jumbo acquisitions in the past citing proposed changes come into effect. The federal government announced in the national security concerns. Both domestic and foreign lenders are BUDGETûAûRECORDû!BNû53BN ûINû )Nû!PRIL û#HINASû9IBINû4IANYIû,ITHIUMû worried that the new regulatory hurdles infrastructure spending over the next 10 Industry withdrew an application with the could delay or hamper dealmaking years to provide a much-needed boost to the &)2"ûFORûANûINVESTMENTûINû!6:û-INERALS ûAû processes and negatively affect the depth ECONOMY ûWHICHûSLIPPEDûINTOûITSûlRSTû SMALLû!38 LISTEDûCOMPANYûWITHûAûLITHIUMû and diversity of the loan market. recession in almost three decades this year project in Africa, based on negative feedback 4HEû!SIAû0ACIlCû,OANû-ARKETû!SSOCIATION û AMIDûTHEûGLOBALûHEALTHûCRISISû-ANYûOFûTHEû from the government. a trade body representing participants in PRIVATELYûlNANCEDûINFRASTRUCTUREûANDûOTHERû )Nû!UGUST û(ONGû+ONG LISTEDû#HINAû the region’s syndicated loan markets, large projects rely on syndicated and club -ENGNIUû$AIRYûPULLEDûOUTûOFûDEALûTOûBUYû,IONû expressed a “very serious concern” that the loans as primary source of funding. $AIRYûû$RINKSûFROMû*APANSû+IRINû(OLDINGSû proposed changes could impose “The changes risk driving many of those after Treasurer Josh Frydenburg said the “bureaucratic redtape” and have a lNANCIERSûAWAYûFROMûTHISûMARKET ûTHUSû purchase would be “contrary to the national “devastating” effect. resulting in unwarranted restrictions on the interest”. h4HEû!0,-!ûISûVERYûCONCERNEDûTHATû availability of credit for key nation-building )Nû*UNE ûAûSUBSIDIARYûOFû3HANGDONGû REQUIRINGûFOREIGNûlNANCIERSûAND ûINDEED û PROJECTS vûSAIDû-C$ERMOTT ûWHOûISûALSOûTHEû Goldsea Group dropped its bid for gold bond investors) to get FIRB approvals or head of loan syndications for Australia at MINERû!LTOû-ETALSûAFTERûTHEû&)2"ûSOUGHTû exemptions before participating in affected -IZUHOû"ANKûINû3YDNEY more time to review the deal. SECUREDûlNANCINGSûWOULDûBEûSERIOUSLYû Australia Inc is dependent on numerous 4HEûHIGHEST PROlLEûREJECTIONûINûRECENTûYEARSû disruptive of the syndication markets,” foreign lenders for funding. Non-Australian WASûAû#+û)NFRASTRUCTUREû(OLDINGS LEDû !NDREWû-C$ERMOTT ûTHEûCHAIRûOFû!USTRALIAû banks have been increasing their market consortium’s A$13bn bid for energy MANAGEMENTûCOMMITTEEûATûTHEû!0,-! û share. Their share in the mandated lead INFRASTRUCTUREûBUSINESSû!0!û'ROUPûINûû wrote to members in October. arranger league tables for syndicated and 4HATûFOLLOWEDûANûEARLIERûREBUFFûOFû(ONGû+ONG )TûISûNOTûONLYûFOREIGNûlNANCIERSûTHATûFACEû club loans rose to over 61% this year from BASEDû#+)ûANDû3TATEû'RIDû#ORPûOFû#HINAûINû higher costs and longer approval times for 46% in 2015. 2016 when the duo bid A$10bn for a stake in transactions, but the new rules could also There is a legitimate concern from market .EWû3OUTHû7ALESûELECTRICITYûNETWORKû!US'RID hurt domestic banks that rely on their participants the proposed changes will Mariko Ishikawa

International Financing Review November 7 2020 45

8 IFR Loans 2358 p45-56.indd 45 06/11/2020 18:32:48 53MûAFTERûATTRACTINGûTHREEûLENDERSûINû syndication. HONG KONG ASIA-PACIFIC Agricultural Bank of China, London branch, Bank of Communications, London branch, China HAITONG SEEKS SMALLER REFI Citic Bank, London branch, and Shanghai AUSTRALIA Pudong Development Bank were the Chinese brokerage house HAITONG mandated lead arrangers and bookrunners INTERNATIONAL SECURITIES GROUP is sounding MIRVAC MARKETS DEBUT SAMURAI OFûTHEûlNANCING EXISTINGûLENDERSûFORûAûPARTIALûRElNANCINGûOFûAû 4HEûFOURû-,!"SûSIGNEDûTHEûDEALûATû (+BNû53BN ûCLUBûLOANûDUEûINû Property group MIRVAC GROUP is making its 53MûPRIORûTOûTHEûLAUNCHûOFû -ARCHûû4HEûSIZEûOFûTHEûLATESTû debut in the Japanese syndicated loan market SYNDICATIONûINû3EPTEMBER transaction is likely to be half the amount of WITHûAûcBNû53M û3AMURAIûLOAN SPDB, Hong Kong branch, was green the maturing loan. Terms and pricing are yet SMBC is the sole mandated lead arranger lNANCEûSTRUCTURINGûADVISERûFORûTHEûLOANû to be determined. ANDûBOOKRUNNERûFORûTHEûlVE YEARûBULLETûTERMû and also sole active bookrunner for Haitong International signed the LOAN ûWHICHûISûSPLITûINTOûAûmOATINGûRATEû syndication of the increased portion. (+BNûTHREE YEARûBULLETûLOANûWITHûû 4RANCHEû!ûANDûAûlXED RATEû4RANCHEû" -ANDATEDûLEADûARRANGERûANDûBOOKRUNNERû BANKSûINû-ARCHûû Tranche A offers an interest margin of is MUFG. Participants are Nanyang 4HATûDEAL ûSPLITûINTOûAû(+BNûTERMû BPûOVERûYENû,IBOR ûWHILEû4RANCHEû"ûPAYSûAû Commercial Bank and Cathay United Bank. LOANûANDûAû(+BNûREVOLVINGûCREDITû lXEDûINTERESTûRATEûOFû The loan offered a top-level all-in facility, offered an all-in pricing of 150bp via -IRVACûISûCURRENTLYûRATEDû!!¦û-OODYS pricing of 125bp, based on an interest an interest margin of 120bp over Hibor. Fitch). MARGINûOFûBPûOVERû,IBORûANDûAûBPû (ONGû+ONG LISTEDû(AITONGû)NTERNATIONAL û 4HEûCOMPANYûHADû!BNû53BN ûOFû upfront fee. RATEDû"AA"""û-OODYS30 ûISûAûFREQUENTû loans and bonds outstanding as at June 30 Bank of Communications Financial borrower. Its previous visit to the market with an average borrowing cost, including ,EASING ûTHEûBORROWERSûPARENT ûISû WASûINû&EBRUARYûFORûAû(+BNûTHREE YEARû the margin and line fee, of 4.0%, according providing a keepwell agreement. revolving credit facility from 19 lenders. to its full year results released on August 20. 3EPARATELY û"O#OMû&INANCIALû,EASINGûISû The self-arranged loan was increased from -IRVACSûBALANCEûSHEETûGEARINGûWASûATû seeking an onshore loan of around ANûORIGINALû(+BNûTARGETûFOLLOWINGûAû ûATûTHEûENDûOFû*UNE 53MûFROMûRELATIONSHIPûBANKSû strong response, despite offering a tighter 3YDNEY BASEDû-IRVACûDESIGNS ûDEVELOPS û "O#OMû,EASINGû-ANAGEMENTû(ONGû+ONGû pricing below 150bp. owns and manages high quality Australian ISûRATEDû!¦!û30&ITCH ûWHILEû"O#OMû The parent company of Haitong PROPERTYûASSETSûSPANNINGûRESIDENTIAL ûOFlCEû &INANCIALû,EASINGûISûRATEDû!!¦! )NTERNATIONALûISû3HANGHAI LISTEDû(AITONGû and industrial, retail and build-to-rent sectors. 3ECURITIES NEW HOPE UNIT CLUBS LOAN PORT OF NEWCASTLE SAILS FOR REFI FORTUNE REIT UNIT RAISES CLUB 4HEû3INGAPORE BASEDûUNITûOFû3HENZHEN LISTEDû The owners of PORT OF NEWCASTLE are in talks agribusiness enterprise NEW HOPE LIUHE has !ûUNITûOFû(ONGû+ONG LISTEDû&ORTUNEû2EALû with potential lenders for a new loan for SIGNEDûAû53MûTHREE YEARûDUAL TRANCHEû Estate Investment Trust has obtained a RElNANCING loan. (+BNûDUAL TRANCHEûCLUBûLOANûFROMûlVEû Royal Bank of Canada is advising on the Bank of China, China Merchants Bank, China banks. exercise. Citic, Credit Agricole CIB, DBS Bank, Natixis, Bank of China (Hong Kong), Bank of PORT OF NEWCASTLE INVESTMENTS (FINANCING) is OCBC Bank and Shanghai Pudong Development Communications, Credit Industriel et Commercial, the borrower. Bank are the lenders of the deal, which Oversea-Chinese Banking Corp and SMBC were )Nû*ULYû û0ORTûOFû.EWCASTLEûSIGNEDûAû closed as a club. the lenders to the deal, which comprises a !MûCLUBûLOANûFROMûûBANKS ûACCORDINGû $"3ûWASûTHEûCOORDINATINGûBANKûFORûTHEû THREE YEARûPORTIONûANDûAûlVE YEARûPIECE TOû2ElNITIVû,0#ûDATA loan, which will fund general corporate &UNDSûAREûFORûRElNANCINGûANDûGENERALû ANZ, Bank of China, Bank of purposes. corporate purposes. Communications, Commonwealth Bank of NEW HOPE SINGAPORE is the borrower of the !USTRALIA û$"3û"ANK û)#"# û-5&' û-IZUHO û lNANCING ûWHICHûCOMPRISESûAû53Mû ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY National Australia Bank and RBC were lenders. TRANCHEûANDûAû3Mû53M ûPIECE SYNDICATED VOLUME (INCLUDING JAPAN) The borrowing comprises a A$15m )Nû-ARCH û.EWû(OPEû)NTERNATIONALû BOOKRUNNERS: 1/1/2020 TO DATE REVOLVERûANDûTERMûLOANSûOFû!MûANDû (ONGû+ONG ûTHEû(ONGû+ONGûUNITûOFûTHEû Managing No of Total Share A$515m – all with three-year tenors – and a GROUP ûRAISEDûAû53MûTHREE YEARûLOANû bank or group issues US$(m) (%) !MûlVE YEARûTERMûFACILITY after attracting 11 banks in general 1 Mizuho 400 93,880.18 21.6 0ROCEEDSûOFûTHATûLOANûRElNANCEDûFACILITIESû syndication. 2 MUFG 609 57,138.53 13.1 that partially funded the acquisition of the China Construction Bank (Asia) and 3 Bank of China 268 54,432.68 12.5 0ORTûOFû.EWCASTLEûFROMûTHEû.EWû3OUTHû (3"#ûWEREûTHEûMANDATEDûLEADûARRANGERSû 4 Sumitomo Mitsui 456 53,247.66 12.2 7ALESûSTATEûGOVERNMENTûINû and bookrunners of the bullet transaction, 5 ANZ 53 10,070.84 2.3 which offered a top-level all-in pricing of 6 Standard Chartered 61 8,497.00 2.0 165bp based on an interest margin of 7 HSBC 60 8,211.92 1.9 CHINA BPûOVERû,IBORû 8 China Construction 36 8,129.98 1.9 The group is engaged in milk 9 DBS Group 41 8,016.09 1.8 BOCOM LIFTS GREEN LOAN production, livestock breeding, meat 10 China Merchants Bk 22 7,867.02 1.8 processing, the manufacture of industrial Total 2,286 435,466.49

BOCOM LEASING MANAGEMENT HONG KONG has chemicals, real estate investment and Proportional credit increased a three-year green loan to lNANCIALûSERVICES Source: Refinitiv SDC code: S3a

46 International Financing Review November 7 2020

8 IFR Loans 2358 p45-56.indd 46 06/11/2020 18:32:48 LOANS ASIA-PACIFIC

FRT FINANCE (HK), a special purpose vehicle !LLOCATIONSûAREûBEINGûlNALISEDûANDû 3EPTEMBERûRAISINGûcBNûFROMûAûONE of Fortune REIT, is the borrower, while expected to be released in the coming year bullet term loan with a similar Fortune REIT is the guarantor. weeks. STRUCTUREûANDûZEROûINTERESTûRATE 3EPARATELY û&ORTUNEû2%)4ûRAISEDûAû(+BNû 4HEûTRANSACTIONûCOMPRISESûAû53BNû OUTSOURCINGûISûFUNDINGûITSûPLANNEDûõMû lVE YEARûSUSTAINABILITY LINKEDûLOANûFROMû$"3û TRANCHEû!ûANDûAûcBNû53M û acquisition of Irish recruitment company "ANKûINûLATEû/CTOBER ûTHEûlRSTûSUCHû tranche B. Cpl Resources with loans and cash on hand. borrowing for the company. Tranche A offered top-level all-in pricing 4HEûLOANSûINCLUDEûAûNEWûBRIDGEûlNANCINGû Fortune REIT would be eligible for of 216.11bp (offshore) and 231.11bp from Nomura Capital Investment and existing interest rate savings upon achieving pre- (onshore) based on interest margins of facilities with SMBCû.OMURAû3ECURITIESûISû determined environmental, social and 195bp (offshore) and 210bp (onshore) over THEûlNANCIALûADVISER governance targets with emphasis on ,IBOR The Japanese engineering outsourcing greenhouse gas emissions, energy Tranche B paid top-level all-ins of lRMûTAPPEDûTHEûSYNDICATEDûLOANûMARKETûINû consumption and waste management of the 156.11bp (offshore) and 166.11bp (onshore) 3EPTEMBERûWHENûITûRAISEDûAûcBNûONE YEARû 2%)4SûBUSINESSûINû(ONGû+ONGû based on margins of 135bp (offshore) and COMMITMENTûLINEû!OZORAû"ANKûANDû-5&'û &24û&INANCEû(+ ûPREVIOUSLYûTAPPEDûTHEû BPûONSHORE ûOVERûYENû,IBOR were the arrangers. LOANûMARKETûINû&EBRUARYûûFORûAû Both tranches have remaining average (+BNûlVE YEARûCLUBû)TûOFFEREDûAûTOPûLEVELû LIVESûOFûûYEARS all-in pricing of 110bp based on an interest On August 3, Indofood announced it had MALAYSIA MARGINûOFûBPûOVERû(IBORûANDûANûUPFRONTû obtained shareholder approval to acquire fee of 60bp. 0INEHILLûFORû53BN CCB LABUAN UNIT TAPS Under the terms of the proposed deal, POLY PROPERTY SIGNS RCF )NDOFOODûWILLûPAYû53BNûTOû0INEHILLû 4HEû,ABUANûBRANCHûOF CHINA CONSTRUCTION Corpora for its 51% stake in Pinehill and BANKûRAISEDûAû53MûTHREE YEARûLOANûFORû (ONGû+ONG LISTEDûPOLY PROPERTY GROUP signed 53BNûTOûINVESTMENTûFUNDû3TEELEû,AKEû general corporate purposes. a 364-day uncommitted revolving credit for its 49% shareholding. Mizuho Bank was the mandated lead FACILITYûOFûUPûTOû(+BN Pinehill, incorporated in the British Virgin arranger and bookrunner of the deal, which Industrial Bank Hong Kong branch is the Islands, has a licensing agreement with attracted six others in syndication. lender of the loan. Indofood under which it manufactures the Agricultural Bank of China, Bank of China and Throughout the life of the loan, Poly Indomie brand of instant noodles in eight China Everbright Bank joined as lead Property’s parent company, China Poly COUNTRIESûnû3AUDIû!RABIA û.IGERIA û'HANA û arrangers, while Cathay United Bank, Shanghai Group Corp, must remain as the single 4URKEY û%GYPT û+ENYA û-OROCCOûANDû3ERBIA Commercial & Savings Bank and Taishin largest shareholder of, and hold at least 40% 0UBLICLYûLISTEDû)NDOFOODû#"0û3UKSESû International Bank came in as arrangers. INûTHEû(ONGû+ONG LISTEDûBORROWER -AKMURûISûTHEûCONSUMERûBRANDûARMûOFûTHEû The last loan from a CCB entity was a 3TATE OWNEDûCONGLOMERATEû#HINAû0OLYû wider Indofood Group, which in turn is 53MûTHREE YEARûFACILITYûFORû##"û,EASINGû 'ROUPûCURRENTLYûOWNSûûOFû0OLYû MAJORITYûOWNEDûBYû(ONGû+ONG LISTEDû&IRSTû )NTERNATIONAL û#ORPû$!#ûINû*ULYû Property. 0ACIlC (3"# û-IZUHOûANDû3-"#ûWEREûTHEû-,!"Sû )Nû3EPTEMBER ûTHEûCOMPANYûEXTENDEDûBYûAû OFûTHEûlNANCING ûWHICHûPAIDûAûTOP LEVELûALL INû YEARûAûLOANûOFûAROUNDû(+BNûTHATû pricing of 113bp based on an interest backed a residential development in Hong JAPAN MARGINûOFûBPûOVERû,IBORûANDûATTRACTEDûFOURû +ONGSû4UENû-UNûDISTRICTû4HEûLENDERSûWEREû other banks in syndication. "ANKûOFû%ASTû!SIA û(ANGû3ENGû"ANKûANDû)#"# SBS TAPS FOR TOSHIBA LOGISTICS In August, Poly Property signed a two-year REVOLVINGûCREDITûFACILITYûOFûUPûTOû(+BNû SBS HOLDINGSûHASûRAISEDûAûcBNû SINGAPORE WITHû#HINAû%VERBRIGHTû"ANKû(ONGû+ONGû 53M ûONE YEARûBULLETûTERMûLOANûTOûBACKû branch. ITSûACQUISITIONûOFû4OSHIBAû,OGISTICS LOUIS DREYFUS EYES PRESENTATION MUFG provided the loan as a bilateral. ,ASTûMONTH ûLOGISTICSûCOMPANYû3"3û The Asian unit of Netherlands- INDONESIA competed the acquisition of a 66.6% stake in headquartered LOUIS DREYFUS will hold a 4OSHIBAû,OGISTICSûFROMû4OSHIBAûFORûcBN PRESENTATIONûFORûLENDERSûONû-ONDAYûFORûANû INDOFOOD’S PINEHILL BUY LOAN CLOSES 3"3ûLASTûTAPPEDûTHEûLOANûMARKETûINû*ULYû EXTENSIONûEXERCISEûONûAû53MûTHREE YEARû ûWHENûITûRAISEDûAûcBNûONE YEARûBULLETû REVOLVINGûCREDITûFACILITYûSIGNEDûINû 3YNDICATIONûHASûCLOSEDûFORûINSTANTûNOODLESû lNANCINGûFROMû-5&'ûTOûBACKûITSûACQUISITIONû "ORROWERû,OUISû$REYFUSû#Oû!SIAûISûLOOKINGû manufacturer INDOFOOD SUKSES MAKMUR‘s OFû2ICOHû,OGISTICSû3YSTEM ûWHICHûPAIDûANû at extending the facility for a further two 53BNûDUAL TRANCHEûlNANCING ûWHICHû interest margin of 110bp over Tibor. years. backs its proposed acquisition of its JAPAN OIL GAS & METALS NATIONAL CORP is 4HEûlNALûSIZEûOFûTHEûLOANûISûSUBJECTûTOûTHEû manufacturing partner Pinehill. returning to the loan market with a ¥55bn number of banks rejoining. Bank of China, BNP Paribas, Mizuho Bank, ONE YEARûBULLETûlNANCING ûITSûlFTHûDEALûOFûTHEû !GRICULTURALû"ANKûOFû#HINAû3INGAPORE û Natixis, OCBC Bank and Sumitomo Mitsui year. !.: û$"3û"ANK û5NITEDû/VERSEASû"ANKûANDû Banking Corp are the mandated lead The interest rate on the government- 7ESTPACûWEREûTHEûMANDATEDûLEADûARRANGERSû ARRANGERSûANDûBOOKRUNNERSûOFûTHEûlNANCING û guaranteed loan will be determined through ANDûBOOKRUNNERSûOFûTHEûûDEAL ûWHICHû which has attracted around 10 banks in a conventional auction with pricing bids due WASûINCREASEDûFROMûAû53MûTARGETûSIZE syndication. on November 20. 4HEû$UTCHûPARENTûCOMPANYûISûTHEû Participating banks have been scaled back Mizuho Bank is the agent. guarantor of the facility, which offered a heavily even as some lenders could not */'-%#ûHASûALREADYûTAPPEDûTHEûMARKETû TOP LEVELûALL INûPRICINGûOFûBPûBASEDûONûANû commit in time. four times this year with its last visit in INTERESTûMARGINûOFûBPûOVERû,IBOR

International Financing Review November 7 2020 47

8 IFR Loans 2358 p45-56.indd 47 06/11/2020 18:32:48 Banks will receive a utilisation fee of MUSIM MAS CLOSES €200m CLUB 7ATSONû&ARLEYûû7ILLIAMSûADVISEDû.ORDEAû 10bp if less than a third of funds are ONûTHEûlNANCING drawn, 20bp if 33%–66% of funds are Integrated palm oil business MUSIM MAS drawn, and 40bp if more than two-thirds HOLDINGS has raised €200m from a three- of funds are drawn. bank club loan. BURUNDI ,ASTû$ECEMBER û,OUISû$REYFUSûRENEWEDû HSBC, ING Bank and Rabobank were the TWOû53MûREVOLVERSûFORûITSûACTIVITIESûINû lenders on the one-year uncommitted TDB TAPS ASIAN LIQUIDITY %UROPE û-IDDLEû%ASTûANDû!FRICA ûLINKINGû borrowing base revolving credit facility, pricing on the facilities to environmental WHICHûISûANûAMENDMENTûOFûAûDEALûlRSTû EASTERN & SOUTHERN AFRICAN TRADE & DEVELOPMENT sustainability targets. signed in 2014. BANKûISûTAPPINGû!SIANûLENDERSûFORûAû53Mû 4HEûREVOLVERS ûWHICHûAREûFORû,OUISû$REYFUSû Natixis and Rabobank were the lenders on two-year loan. #Oû3UISSE ûHAVEûTWOûANDûTHREE YEARûTENORSû THATûõMû DAYûBORROWERûBASEûFACILITY ICBC, Mizuho Bank and Standard Chartered ANDûREPLACEûEXISTINGû%-%!ûREVOLVERSûAûYEARû are the mandated lead arrangers and ahead of their maturities. bookrunners of the bullet facility, which has ,OUISû$REYFUSûISûAûCOMMODITIESûTRADINGû a one-year extension option. and processing company with businesses in The deal pays a margin of 145bp over grains, oilseeds, sugar, coffee, cotton, juice, EUROPE/MIDDLE ,IBOR rice and logistics. EAST/AFRICA "ANKSûAREûBEINGûINVITEDûTOûJOINûASû-,!Sû WITHûCOMMITMENTSûOFû53MûORûMOREûFORû GLENCORE AGRICULTURE SEEKS RCF an upfront fee of 120bp, as lead arrangers BELGIUM WITHû53MnMûTICKETSûFORûAûBPûFEE û Commodities producer GLENCORE ORûASûARRANGERSûWITHû53MnMûTICKETSûFORû AGRICULTUREûHASûLAUNCHEDûAû53MûONE EURONAV EYES SLL REWARD a 100bp fee. year revolving credit facility into general In August, the borrower, formerly known syndication. Crude oil shipping company EURONAV will be ASû04!û"ANK ûSIGNEDûAû53MûCREDITûLINEû DBS Bank, MUFG, Mizuho Bank, Standard rewarded with a 5bp reduction of margin on WITHû!GENCEû&RANCAISEûDEû$EVELOPPEMENTûTOû Chartered and SMBC are the mandated lead ITSûAû53MûSUSTAINABILITY LINKEDûLOANûIFû lNANCEûCLIMATEûINFRASTRUCTUREûPROJECTSûINû ARRANGERSûANDûBOOKRUNNERSûOFûTHEûlNANCING û its meets certain sustainability targets in the Africa. which carries two one-year extension lRSTûûMONTHS 4$" ûRATEDû"AA"" û-OODYSû&ITCH ûISû options. 4HEûLOANûWASûSIGNEDûONû3EPTEMBERûûANDû THEûlNANCIALûARMûOFûTHEû#OMMONû-ARKETûFORû -5&'ûHASûBEENûAPPOINTEDûGLOBALû THEûlRSTûDRAWDOWNûWASûONû/CTOBERû %ASTERNûû3OUTHERNû!FRICA û!FRICASûLARGESTû coordinator and documentation agent, -ARGINSûONûTHEûLOANûAREûLINKEDûTOûFURTHERû regional economic organisation. WHILEû$"3ûISûFACILITYûAGENTû4HEûTWOûBANKSû )NTERNATIONALû-ARITIMEû/RGANISATIONû AREûALSOûACTIVEû-,!"S emission reduction targets over the duration Prior to launch into syndication, the leads OFûTHEûlNANCINGû#OMPLIANCEûWITHûTHEû DENMARK have anchored the facility with approved TARGETSûWILLûBEûINDEPENDENTLYûVERIlEDûANDû COMMITMENTSûTOTALLINGû53M measured. NOVO NORDISK TO TAP FOR EMISPHERE -,!SûCOMMITTINGû53MûORûMOREû 4HEû)-/ûISûAû5.ûAGENCYûTHATûAIMSûTOû receive a participation fee of 30bp, lead improving the safety and security of 0HARMACEUTICALSûlRMûNOVO NORDISK‘s ARRANGERSûWITHûTICKETSûOFû53MnMûWILLû international shipping and to prevent 53BNûACQUISITIONûOFû53 BASEDûDRUGû EARNûAûFEEûOFûBP ûWHILEûARRANGERSûWITHû marine pollution from ships. delivery company Emisphere Technologies 53MnMûRECEIVEûAûBPûFEE 4HEûLOANûRElNANCESû%URONAVSû53Mû WILLûBEûDEBT lNANCED Proceeds raised will be for working REVOLVINGûCREDITûFACILITYûANDûAû53MûTERMû Novo Nordisk is acquiring Emisphere for capital purposes. loan, converting them into a single facility. 53BNûINûCASHûANDûISûALSOû Glencore Agriculture is involved in 4HEûlRSTûDRAWDOWNûRElNANCEDûDEBTû simultaneously buying related royalty sourcing, handling, processing and related to nine very large crude carriers and STREAMûOBLIGATIONSûOWEDûTOû-(2û&UNDû marketing of agricultural commodities and THREEû3UEZMAXûVESSELS products. 3ECURITYûINCLUDESû"ELGIAN û'REEKûANDû EMEA LOANS BOOKRUNNERS – FULLY The company is a wholly owned French mortgages over the ships. SYNDICATED VOLUME SUBSIDIARYûOFû'LENCOREû!GRICULTUREû,TD û 4HEûlNANCINGûWILLûALSOûlNANCEûPARTûOFûTHEû BOOKRUNNERS: 1/1/2020 TO DATE WHOSEûSHAREHOLDERSûCOMPRISEû3WISSû ACQUISITIONûOFûFOURû6,##SûUNDERû Managing No of Total Share commodities trader Glencore International CONSTRUCTIONûATû$AEWOOû3HIPBUILDINGûû bank or group issues US$(m) (%) (49.99%), Canada Pension Plan Investment -ARINEû%NGINEERING ûANDûPROVIDEûGENERALû 1 BNP Paribas 150 65,553.79 13.2 Board (39.99%) and British Columbia corporate and working capital. 2 JP Morgan 66 35,905.71 7.3 )NVESTMENTû-ANAGEMENTû#ORPû  Nordea COORDINATEDûTHEûlNANCINGûWITHû 3 Credit Agricole 112 34,289.01 6.9 In August, the group announced a ABN AMRO, BNP Paribas, DNB, ING and KBC 4 Santander 98 26,165.96 5.3 rebranding under which as of November 30 Bank as mandated lead arrangers and 5 Citigroup 60 24,589.51 5.0 it will be renamed as Viterra and bookrunners. 6 HSBC 77 22,077.93 4.5 subsequently the borrowing entity for the CBA, Credit Agricole, Societe Generale and 7 UniCredit 110 21,774.50 4.4 proposed facility will be renamed Viterra Standard Chartered were lead arrangers while 8 SG 67 21,356.35 4.3 !GRICULTUREû3INGAPORE "ELlUSû"ANK, Danish Ship Finance, Deutsche Bank, 9 Deutsche Bank 79 20,549.99 4.2 )Nû$ECEMBER û'LENCORESû!USTRALIANû SEB and NAB were co-arrangers. 10 Sumitomo Mitsui 46 17,098.37 3.5 subsidiary, Glencore Agriculture, raised a Nordea was sustainability agent, facility Total 612 495,080.77

!Mû53MûTHEN ûONE YEARûREVOLVERû agent and security trustee and ING was swap Proportional credit from eight of its existing lenders. coordinator. Source: Refinitiv SDC code: R17

48 International Financing Review November 7 2020

8 IFR Loans 2358 p45-56.indd 48 06/11/2020 18:32:49 LOANS EMEA

Iberdrola keeps it in-house for Avangrid’s PNM buy

„ EUROPE/US Deal is latest example of firms providing acquisition funding to subsidiaries

Spain’s IBERDROLA is providing a commitment majority shareholding and access to the value In August, Germany’s SIEMENS arranged a letter to its US-listed subsidiary AVANGRID to streams.” €15.2bn bridge loan backing its healthcare cover its US$4.3bn cash offer for PNM RESOURCES technology unit SIEMENS HEALTHINEERS‘ as corporates continue to use their financial SOFTWARE BUY US$16.4bn acquisition of US cancer care muscle to provide subsidiaries with acquisition In October, French energy and automation technology provider VARIAN. funding. systems company SCHNEIDER ELECTRIC directly The loan, which was underwritten by The funding commitment will be negotiated provided a US$900m three-year term loan to its JP Morgan and UBS, will be replaced by a between Iberdrola and Avangrid on an arm’s UK-listed industrial software company Aveva to permanent financing, including new equity length basis. back its US$5bn acquisition of US-based real- raised by Healthineers and bonds issued The acquisition values PNM at US$8.3bn, time industrial data software firm OSIsoft. by Siemens, which will then be passed including US$4bn of debt, and will create the The term loan was originally underwritten on to Healthineers via loans at market third-largest US renewable energy operator with by JP Morgan, Barclays and BNP Paribas as conditions. a market value of more than US$20bn. part of a wider financing that also included a The bridge loan provides Siemens with Iberdrola expects to retain its 81.5% £250m three-year revolving credit facility, which increased transaction security and additional ownership in the combined company after the was subsequently syndicated to HSBC and flexibility on the bond issue and capital increase. completion of the acquisition, which is expected Santander. Healthineers raised €2.73bn from the in 2021. The directly provided term loan will pay lower issuance of new shares in early September to Iberdrola listed Avangrid in December 2015 interest margins at all leverage levels than part-finance the acquisition and reduce the after the merger of Iberdrola USA and UIL originally expected, and Aveva will not have to bridge loan from Siemens. Holdings. Avangrid has a US$500m credit pay lenders’ participation fees. The share issuance saw Siemens direct and facility from Iberdrola maturing in June 2023. The acquisition of OSIsoft will be funded indirect stake in Healthineers reduce to around “These types of transactions are mainly through a combination of US$600m of shares, a 79% from 85%. the by-product of spin-off processes through US$3.5bn rights issue and US$900m of cash on Siemens also provided Healthineers which companies look to unlock hidden value in balance sheet and new debt facilities. with an arm’s length acquisition term subsidiaries,” a senior banker said. Schneider Electric, which is an around 60% loan backing its US$1.1bn purchase of US “By providing this kind of holdco to opco shareholder in Aveva, has committed to fully robotic surgery company Corindus Vascular funding, the parent allows the subsidiary to subscribe to the proposed rights issue on a pro Robotics in 2019. operate autonomously while they retain their rata basis, or around US$2.2bn. Alasdair Reilly

-ANAGEMENT û%MISPHERESûLARGESTû The loan was arranged by bookrunner 4HEûTWO YEARûlNANCINGûISûBEINGûPROVIDEDû SHAREHOLDER ûFORû53M and coordinator BayernLB with DZ Bank and by Intesa Sanpaolo as original lender and The acquisition will not impact Novo Frankfurter Sparkasse as mandated lead sustainability coordinator. .ORDISKSûOPERATINGûPROlTûOUTLOOKûFORû arrangers. Interest on the loan is linked to Terna’s 2020 or its ongoing share buyback "AYERN,"ûISûFACILITYûAGENTûANDû PERFORMANCEûONû%3'ûINDICES programme. DOCUMENTATIONûAGENTûONûTHEûlNANCINGû 4ERNAûHASûALREADYûAGREEDûõMûOFû%3' Novo Nordisk has an existing €1.55bn 4AYLORû7ESSINGûADVISEDû"AYERN," linked loans this year - a €200m two-year undrawn revolving credit facility, which is The company has also placed a €130m loan from UniCredit and a €100m three-year due to mature in June 2024. 3CHULDSCHEINDARLEHENûCOMPRISINGûAûlVE LOANûFROMû-EDIOBANCAûINû!UGUST 4HEû2#&ûWASûARRANGEDûINû*UNEûûVIAû year tranche and a seven-year tranche. The 4HEûlNANCINGSûCAMEûAFTERû4ERNAûPLACEDûAû COORDINATORSû.ORDEAûANDû3%"ûALONGûWITHû 33$ûWASûARRANGEDûBYû"AYERN," û$:û"ANKûANDû €500m 12-year green bond in July and #ITIGROUP û$ANSKEû"ANKûANDû-5&'ûASû Helaba. agreed a €1.5bn revolving credit facility in bookrunning mandated lead arrangers. -ESSEû&RANKFURTûISûOWNEDûBYûTHEû#ITYûOFû April 2019, which also had a margin linked &RANKFURTû ûANDûTHEû3TATEûOFû(ESSEû û TOûTHEûCOMPANYSû%3'ûPERFORMANCE GERMANY The company employs just under 2,600 people in 29 locations. NETHERLANDS MESSE FRANKFURT GETS €280m ITALY SCHIPHOL LANDS €400m SLL International trade fair and events group MESSE FRANKFURTûHASûAGREEDûlNANCINGSû TERNA GETS ESG-LINKED LOAN Airport operator ROYAL SCHIPHOL GROUP has TOTALLINGûõM signed a €400m sustainability-linked loan, 4HEûlNANCINGûINCLUDESûAûõMû Power grid operator TERNA has signed a RElNANCINGûTHEûCOMPANYSûõMû2#&ûTHATû SYNDICATEDûLOANûCOMPRISINGûAûõMûlVE €200m bilateral term loan with a margin was due to mature in June 2022. year term loan and a €50m two-year linked to the company’s environmental, 4HEûlNANCINGûHASûAûlVE YEARûMATURITYû revolving credit facility. social and governance performance. with two one-year extension options.

International Financing Review November 7 2020 49

8 IFR Loans 2358 p45-56.indd 49 06/11/2020 18:32:49 -ARGINSûONûTHEûlNANCINGûAREûPARTLYûLINKEDû The company’s sustainability targets TOûTHEûPERFORMANCEûONûlVEûENVIRONMENTAL û include cutting greenhouse gas intensity SWEDEN social and governance key performance from its operations by 5% by 2023 against indicators. ûEMISSIONSûIMPROVINGûENERGYûEFlCIENCYû VATTENFALL SIGNS €2bn SLL ING coordinated the facility and is THROUGHûRENEWABLEûENERGYûWITHûAûTARGETûû sustainability coordinator alongside ABN SHAREûOFûRENEWABLEûENERGYûBYûûAûSWITCHû 3TATE OWNEDûUTILITYûVATTENFALL has signed a AMRO, BNP Paribas, NatWest, Rabobank and to dry storage of tailings with a 15% share by €2bn sustainability-linked revolving credit SMBC as bookrunning mandated lead ûREDUCINGûFRESHûWATERûUSAGEûFORûOREû facility, replacing an undrawn €2bn RCF arrangers. PROCESSINGûBYûûBYûûAGAINSTûûANDû signed in 2014. 3CHIPHOLSûPREVIOUSû2#&ûWASûARRANGEDûINû the annual recycling of at least 16% of waste The new multi-currency RCF has a three- June 2015 via coordinator ING. generated by 2023. year maturity with two one-year extension 4HEûGREENûlNANCINGûFRAMEWORKûISûALIGNEDû options and a margin linked to Vattenfall’s VTTI COMPLETES REFI WITHûTHEû,OANû-ARKETû!SSOCIATIONSû'REENû CO2 emissions intensity target. ,OANû0RINCIPLES Vattenfall’s 2030 emissions intensity Energy and chemical storage company VTTI #ICEROû3HADESûOFû'REENûHASûPROVIDEDûAû TARGETûCOVERSû3COPEûûEMISSIONS ûDIRECTû HASûCOMPLETEDûAû53MûCORPORATEû second-party opinion and has attributed the EMISSIONSûFROMûTHEûCOMPANYûANDû3COPEûû RElNANCINGûTOûPROVIDEûITûWITHûTHEûmEXIBILITYû framework “medium green” shading and emissions, indirect emissions from the to expand its terminal network for energy graded the governance procedures related to generation of purchased energy. and other products. GREENûlNANCINGûASûhGOODv A margin reduction will be applied if the

4HEûlNANCINGûINCLUDESû53MûANDû The green loan is in addition to CO2ûEMISSIONSûINTENSITYûISûBELOWûAûSPECIlEDû 53MûOFûREVOLVINGûCREDITûFACILITIESûFROMû 0OLYMETALSû53MûSUSTAINABILITY LINKEDû level and a margin premium will be applied CIBC, Intesa Sanpaolo, ING, KfW IPEX, Santander FROMû3OCIETEû'ENERALEûINû3EPTEMBERûû above a certain level. and BNP Paribas. ANDûAûCONVERTEDû53MûBILATERALû3,,ûWITHû The RCF is a committed bank loan facility 4HEREûISûALSOûANûAROUNDû53MûOFû ).'û"ANKûINû!UGUSTû that allows Vattenfall to borrow funds at private placements with staggered short notice if needed. MATURITIESûANDûDRAWINGûPROlLESûFROMû Societe Generale COORDINATEDûTHEûlNANCINGû !LLIANZûANDû"ARINGS SOUTH AFRICA along with Barclays, BNP Paribas, Citigroup, VTTI said it had secured investment-grade Danske Bank, Svenska Handelsbanken, Helaba, ratings to support the private placement. ANGLOGOLD CANCELS STANDBY BRIDGE ING, MUFG, NatWest, Nordea, Rabobank, Royal 4HEûRElNANCINGûWILLûSUPPORTû644)Sû Bank of Canada, SEB, and Swedbank as DIVERSIlCATIONûSTRATEGY ûWHICHûINCLUDESû -ININGûCOMPANYûANGLOGOLD ASHANTI has mandated lead arrangers and working towards storage and blending CANCELLEDûTHEû53BNûSYNDICATEDûSTANDBYû bookrunners. solutions for energy alternatives. credit facility that was put in place in April 3%"ûISûFACILITYûAGENTûANDûSUSTAINABILITYû VTTI’s facilities store energy and other to bolster the company’s liquidity and ADVISERû3OCIETEû'ENERALEûISûDOCUMENTATIONû PRODUCTS ûINCLUDINGûCHEMICALS û,0'ûANDû mitigate the impact of the Covid-19 crisis. agent. BIOFUELS ûANDûTHEûCOMPANYûAIMSûTOûADDû,.'û The move follows the issuance of a The bank group will comprise Vattenfall’s to its portfolio soon. 53Mûû YEARûBONDûATûTHEûENDûOFû core relationship bank group in future. 644)ûISûCO OWNEDûBYû6ITOLû'ROUP û)&-û the third quarter, which was used to repay )NVESTORSûANDû!$./# PARTûOFûTHEûCOMPANYSû53BNûMULTI currency revolving credit facility that was TURKEY fully drawn in response to the crisis. RUSSIA The RCF, which is expected to be a ISBANK SIGNS US$754m LOAN primary short-term funding facility, is POLYMETAL SIGNS GREEN LOAN 53MûUNDRAWN ISBANK HASûSIGNEDûAû53MûEQUIVALENTû 0ROCEEDSûOFû53MûRECEIVEDûFROMûTHEû  DAYûSYNDICATEDûLOAN ûITSûSECONDûTHISû Precious metals miner POLYMETAL has signed SALEûOFû3OUTHû!FRICANûPRODUCINGûASSETSûWEREû year. Aû53MûGREENûLOANûFROMûSociete Generale, used to further reduce net debt. 4HEûRElNANCINGûCOMPRISESûAûõMû THEûlRSTûINûTHEû2USSIANûMETALSûANDûMININGû AngloGold also cancelled a R2.5bn TRANCHEûANDûAû53MûTRANCHE ûPAYINGû industry. 53M û2#&ûINû/CTOBERû ûLEAVINGû BPûOVERû%URIBORûANDûBPûOVERû,IBOR û The loan has a six-year maturity, which 2BNûOFûITSûUNDRAWNû3OUTHû!FRICANû2#&SûINû respectively. CANûBEûEXTENDEDûTOûSEVENûYEARSûONûTHEûlRSTû place. 0ROCEEDSûWILLûBEûUSEDûFORûTHEûlNANCINGûOFû anniversary. There is a three-year grace AngloGold said it is committed to foreign trade. period. MAINTAININGûAûmEXIBLEûBALANCEûSHEETûWITHûAû 4HEûLOANûRElNANCESûAû53M Proceeds from the loan can only be used targeted net-debt-to-Ebitda ratio of 1.0 times EQUIVALENTûDUAL CURRENCYûRElNANCINGûWHICHû for eligible environmental, social and through the cycle. was signed in November 2019. governance projects under the company’s The bridge loan was arranged by That facility comprised a €545m tranche RECENTLYûADOPTEDûGREENûlNANCINGû $EUTSCHEû"ANK û*0û-ORGAN û"ANKûOFû!MERICA û which paid all-in pricing of 210bp over framework. "ANKûOFû-ONTREAL û"ARCLAYSû"ANK û".0û %URIBORûANDûAû53MûTRANCHEûPAYINGû Project categories include clean Paribas, CIBC, Citigroup, Royal Bank of BPûOVERû,IBOR transport, renewable energy, energy #ANADA û"ANKûOFû.OVAû3COTIAûANDû3TANDARDû )SBANKûWASûLASTûINûTHEûMARKETûINû-AYû EFlCIENCYûANDûSUSTAINABLEûWASTEûANDûWATERû Chartered as bookrunners and mandated WHENûITûSIGNEDûAû53M EQUIVALENTû management. LEADûARRANGERSû!.:ûANDû7ESTPACûWEREû day syndicated loan, comprising a €539m Polymetal intends to fully allocate the mandated lead arrangers. TRANCHEûANDûAû53MûTRANCHEûPAYINGûANû PROCEEDSûWITHINûûMONTHSûOFûTHEûlRSTû The loan had an initial 364-day maturity all-in cost of 200bp over Euribor and 225bp utilisation. with a six-month extension option. OVERû,IBOR ûRESPECTIVELY

50 International Financing Review November 7 2020

8 IFR Loans 2358 p45-56.indd 50 06/11/2020 18:32:49 LOANS EMEA

TEB NETS LOAN As part of the acquisition, Premier’s The amendment also allows PIP to 53BNûOFûDEBTûANDûCROSS CURRENCYûSWAPSû increase the RCF to £350m through TURK EKONOMI BANKASIûHASûSECUREDûAû53M will be repaid and cancelled. additional facilities. EQUIVALENTû DAYûSYNDICATEDûLOANûFROMûAû 0REMIERSû53MûLETTERSûOFûCREDITûWILLû Other terms remain materially the same. group of international banks. BEûRElNANCED 0)0ûEXPECTSûTOûCONTINUEûTOûlNANCEûITSûNEWû The loan comprises a €250m tranche and The combined group will have around investments and meet its unfunded Aû53MûTRANCHEûPAYINGûANûALLûINûPRICEûOFû 53BNûOFûNETûDEBTûONûCOMPLETIONûOFûTHEû commitments from internally generated BPûOVERû%URIBORûANDûBPûOVERû,IBOR û takeover. cash resources. respectively. Premier said it had received the required The trust had available cash balances of )TûRElNANCESûAû53M EQUIVALENTûLOANû level of support from its creditors for the AROUNDûaMûATûTHEûENDûOFû3EPTEMBER û which was signed on October 31 2019. deal, which is expected to complete by the which combined with the amended That facility comprised a €306m tranche ENDûOFûTHEûlRSTûQUARTER lNANCINGûGIVESû0)0ûLIQUIDûRESOURCESûOFû ANDûAû53MûTRANCHEûPAYINGûTOTALûCOSTSû #HRYSAORûISûTHEû5+ûOPERATINGûCOMPANYûOFû £424m-equivalent. OFûBPûOVERû%URIBORûANDûBPûOVERû,IBOR û global energy investor Harbour Energy, The RCF was increased to £300m from respectively. which was founded by EIG Global Energy aMûINû-AYûAFTERû3TATEû3TREETû"ANKû TEB is 55% owned by TEB Holding, 23.51% Partners to build a portfolio of energy COMMITTEDûaMûTOûTHEûlNANCING ûJOININGû and 21.23% owned by BNP Paribas Yatirimlar BUSINESSESûOUTSIDEûTHEû53 LENDERSû,LOYDSû"ANKûANDû.AT7EST Holding and BNP Paribas Fortis Yatirimlar Holding respectively. Other minor stakes ITHACA REDETERMINES RBL ASTRAZENECA EXTENDS FACILITIES AREûHELDûBYû".0û0ARIBASûANDû+OCAELIû4ICARETû Odasi. ITHACA ENERGY has completed the six-month !NGLO 3WEDISHûDRUGSûGROUPûASTRAZENECA has REDETERMINATIONûOFûITSû53BNûRESERVES EXTENDEDû53BNûOFûITSûCOMMITTEDûBANKû based lending facility, with availability facilities. UK under the facility determined to be around 53BNûOFûTHEûREVOLVINGûCREDITû 53BN ûUNCHANGEDûFROMû-AYSû facilities were extended by two years to PREMIER OIL TAKEOVER LOAN DETAILED redetermination. !PRILûûWHILEû53MûOFûFACILITIES ûOFû .ETûDEBTûUNDERûTHEû2",ûFACILITYûWASûUNDERû WHICHû53MûWEREûDUEûTOûMATUREûINû $ETAILSûHAVEûEMERGEDûONûTHEû53BNû 53MûATûTHEûENDûOFû/CTOBER .OVEMBERûûANDû53MûWEREûDUEûINû seven-year reserve-based lending facility )THACAûWILLûPAYûAû53MûDIVIDENDûTOû $ECEMBERû ûWEREûAMENDEDûANDû BACKINGû.ORTHû3EAûOILûANDûGASûCOMPANYû PARENTû$ELEKû'ROUPûINû.OVEMBER ûRETAININGû extended to November 2022. CHRYSAOR‘s takeover of PREMIER OIL. strong liquidity headroom of more than The RCFs are provided by nine The loan, which is an amendment and 53M relationship banks. INCREASEûOFû#HRYSAORSû53BNû2",ûFACILITY û 5NDERûTHEû2",ûFACILITY ûFURTHERûDIVIDENDSû !TûTHEûENDûOFû3EPTEMBER û!STRA:ENECAûHADû has been fully underwritten by mandated will be conditional on Brent crude prices 53BNûINûlNANCIALûRESOURCESûCOMPRISINGû lead arrangers and bookrunners Bank of RECOVERINGûTOûATûLEASTû53ûPERûBARREL 53BNûOFûCASHûANDûCASHûEQUIVALENTS û Montreal, BNP Paribas, DNB and Lloyds on an 4HEû2",ûFACILITY ûWHICHûMATURESûINû!PRILû AROUNDû53MûOFûLIQUIDûlXEDûINCOMEû equal basis. 2024, was agreed in 2019 to support Ithaca’s SECURITIESûANDûTHEû53BNûOFûUNDRAWNû $."ûANDû"ANKûOFû-ONTREALûAREû 53BNûACQUISITIONûOFû#HEVRONû.ORTHû3EA RCFs. SUSTAINABILITYûSTRUCTURINGûAGENTSû$."ûISû BNP Paribas underwrote the facility, also facility agent, security trustee and WHICHûWASûALSOûPROVIDEDûBYû$EUTSCHEû"ANK û account bank. ,LOYDS û.ATIXIS û2OYALû"ANKûOFû#ANADA û2OYALû The underwriters will look to reduce each "ANKûOFû3COTLAND û3%" û7ELLSû&ARGOû"ANK û of their participations in the facility to a "ANKûOFû-ONTREAL û!".û!-2/ û"ARCLAYSû NORTH AMERICA MAXIMUMûOFû53M "ANK û$."û"ANK û'OLDMANû3ACHSûANDû).' 4HEûlNANCING ûWHICHûHASûAûTWO YEARûGRACEû 53BNûOFûTHEûlVE YEARûlNANCINGûPAYSû PERIOD ûINCLUDESûUPûTOû53BNûOFûLETTERûOFû BPûOVERû,IBORûDURINGûTHEûlRSTûFOURûYEARS û UNITED STATES CREDITûSUBLIMITû4HEREûISûALSOûAû53Mû INCREASINGûTOûBPûINûTHEûlFTHûYEAR ACCORDIONûFACILITY ûALLOWINGûTHEûlNANCINGûTOû 4HEREûWASûALSOûAû53MûTRANCHEûTHATûISû MARVELL DETAILS LOAN BEûINCREASEDûTOû53BN expected to be an unused facility providing -ARGINSûONûTHEûlNANCING ûWHICHûAREû )THACAûWITHûCOLLATERALûFORû#.3,û $ETAILSûHAVEûEMERGEDûONûTHEû53BNû linked to carbon emission reductions, start abandonment obligations at the acquired bank debt that will support MARVELL ATûBPûOVERû,IBORûFORûTHEûlRSTûFOURûYEARS û assets. TECHNOLOGY@Sû53BNûACQUISITIONûOFû)NPHI stepping up to 350bp until maturity. If that facility is drawn it will pay 400bp in JP Morgan is lead arranger and There is also a ticking fee of 10% of the THEûlRSTûYEAR ûRISINGûTOûBPûINûTHEûlFTHû bookrunner. margin after 90 days from signing, rising to year. 4HEûFACILITIESûCOMPRISEûAû53BNû 20% of the margin after 120 days. DAYûBRIDGEûLOANûANDûAû53BNûTERMûLOANû 4HEûlRSTûANNUALû2",ûREDETERMINATIONûISû PANTHEON AMENDS AND EXTENDS that is split equally between a three-year scheduled for June 30 2021. BULLETûLOANûANDûlVE YEARûAMORTISINGûTRANCHE Redeterminations will be based on the Investment trust PANTHEON INTERNATIONAL !û53MûlVE YEARûREVOLVINGûCREDITû most recent P-50 recoverable resource PARTICIPATIONS has amended and extended its FACILITYûROUNDSûTHEûlNANCINGû4HEû2#&ûWILLûBEû PROlLESûONûPRODUCINGûASSETSûANDû0 û undrawn £300m revolving credit facility. implemented as either a new credit facility or recoverable resources for development 4HEûAMENDEDûlNANCINGûCOMPRISESûAû as an amendment, or amendment and assets. aMûTRANCHEûMATURINGûINû-AYûûANDûAû RESTATEMENT ûOFûANû2#&ûDATEDû*UNEûû The reverse takeover will also be backed aMûTRANCHEûMATURINGûONûTHEûORIGINALûDUEû Pricing for the bridge loan is tied to with Premier Oil cash. date of June 2022. RATINGSûANDûINCREASESûOVERûTIMEû&ORû"AA

International Financing Review November 7 2020 51

8 IFR Loans 2358 p45-56.indd 51 06/11/2020 18:32:49 """ """ ûORûHIGHERûTHEûMARGINûISû ûûTIMESûONûQUARTERSûENDINGû-ARCHû "AA"""ûITûISûBPûANDûBPûFORû"AA""" û BPûFORûTHEûlRSTûûDAYS ûBPûFORû ûûANDû*UNEûûûûTIMESûFORû ITûISûBPûANDûBPûANDûFORû"A"" ûORû DAYSû  ûBPûFORûDAYSû ûANDû QUARTERSûENDINGû3EPTEMBERûûûANDû lower it is 200bp and 32.5bp. BPûTHEREAFTERû4HEûUNDRAWNûFEEûISû $ECEMBERûûûûTIMESûFORûQUARTERSû Other lenders are PNC, Santander, TD Bank, BPû&ORû"AA""""""ûTHEûMARGINSûAREû ENDINGû-ARCHûûûANDû*UNEûûû US Bank, ANZ, NAB, NatWest, MUFG, Northern BP ûBP ûBPûANDûBPûWITHûANû ûTIMESûFORûQUARTERSûENDINGû3EPTEMBERû Trust, BMO Harris Bank, Bank of Montreal, UNDRAWNûFEEûOFûBPû&ORû"AA""" """ û ûûANDû$ECEMBERûûûANDûû Citizens Bank, Commerzbank, HSBC and First THEûMARGINSûAREûBP ûBP û TIMESûFORûFORûQUARTERSûENDINGû-ARCHûû Horizon Bank. BPûANDûBPûWITHûANûUNDRAWNûFEEû 2024 and thereafter. Financial covenants require Genuine Parts OFûBPû&ORû"A"" "" ûTHEûMARGINSû The bridge features the same leverage to ensure its maximum leverage ratio does AREûBP ûBP ûBPûANDûBPûWITHû ratio requirements until its termination. It is not exceed 4 times, stepping down to 3.5 ANûUNDRAWNûFEEûOFûBPû&ORû"A""""ûORû expected to be replaced by permanent TIMESûONû-ARCHû lower the margins are 200bp, 225bp, lNANCING The facility replaces a terminated RCF BPûANDûBPûWITHûANûUNDRAWNûFEEûOFû -ARVELLûISûRATEDû"AA""" ûBYû that featured Bank of America as the 35bp. -OODYS30û administrative agent. Genuine Parts had a The bridge loan also features duration TWICE AMENDEDû53BNû2#&ûTHATûWASûDUEû FEESûOFûBPûFORûTHEûlRSTûûDAYS ûBPûFORû CAMPBELL SOUP GETS RCF to mature in October 2022. the following 90 days, and 100bp thereafter. 'ENUINEû0ARTSûDEBTûISûRATEDû"AA"""ûBYû Pricing for the term loans is tied to CAMPBELL SOUPûHASûSIGNEDûAû53BNûTHREE -OODYS30û ratings. year unsecured revolving credit facility for /NûTHEûTHREE YEARûLOAN ûFORû"AA"""  working capital and general corporate RAISING CANE’S SEEKS US$1bn """ ûORûHIGHERûTHEûMARGINûISûBPûOVERû purposes. ,IBORûWITHûANûUNDRAWNûFEEûOFûBPûFORû 4HEûFACILITYûMAYûBEûINCREASEDûBYû53Mû ,OUISIANA BASEDûRESTAURANTûCHAINûRAISING "AA""""""ûITûISûBPûANDûBPûFORû and its maturity extended by up to two CANE’SûISûINûTHEûMARKETûWITHûAû53BNûlVE "AA""" """ ûITûISûBPûANDûBPûFORû"A years. YEARûSENIORûSECUREDûFACILITYûFORûRElNANCINGû "" "" ûITûISûBPûANDûBPûANDûFORû"A JP Morgan is the administrative agent. and expanding its business. """"ûORûLOWERûITûISûBPûANDûBP Barclays Bank, BNP Paribas and Bank of America 4HEûDEALûISûSPLITûBETWEENûAû53Mû /NûTHEûlVE YEARûLOAN ûFORû"AA""" """ û were lead arrangers and bookrunners. REVOLVINGûCREDITûFACILITYûANDûAû53Mû ORûHIGHERûTHEûMARGINûISûBPûOVERû,IBORû Pricing is based on Campbell’s long-term amortising term loan. WITHûANûUNDRAWNûFEEûOFûBPûFORû"AA""" DEBTûRATINGû&ORû!! ! ûORûHIGHERûTHEû Capital One Bank, Bank of America, Fifth Third """ûITûISûBPûANDûBPûFORû"AA""" """ û MARGINûISûBPûOVERû,IBORûWITHûAûBPû Bank, JP Morgan and Wells Fargo are lead ITûISûBPûANDûBPûFORû"A"" "" ûITûISû FACILITYûFEEûFORû"AA""" """ ûITûISûBPû arrangers. BPûANDûBPûANDûFORû"A""""ûORûLOWERû ANDûBPûFORû"AA""""""ûITûISûBPûANDû The margin is based on a leverage ratio it is 225bp and 40bp. BPûFORû"AA""" """ ûITûISûBPûANDû grid. Pricing for the RCF is also tied to ratings. BPûANDûFORûLOWERûTHANû"AA""" """ ûITûISû &ORû"AA""" """ ûORûHIGHERûTHEûMARGINûISû BPûANDûBP BPûOVERû,IBORûWITHûAûBPû *0û-ORGAN û"ARCLAYS û".0û0ARIBASûANDû CANADA COMMITMENTûFEEûFORû"AA""""""ûITûISû "ANKûOFû!MERICAûEACHûCOMMITTEDû53M û BPûANDûBPûFORû"AA""" """ ûITûISû Citigroup, Credit Suisse and Wells Fargo were INTACT LINES UP LOANS FOR RSA BPûANDûBPûFORû"A"" "" ûITûISû ALLOCATEDû53MûEACHûANDûCoBank, PNC BPûANDûBPûANDûFORû"A""""ûORûLOWERû Bank and US BankûCAMEûINûWITHû53Mû!Tû Insurance company INTACT FINANCIAL will back it is 225bp and 35bp. 53MûWEREûManufacturers and Traders Trust, ITSûPORTIONûOFûAûPROPOSEDûaBNûJOINTûBIDûFORû For the term loans and the RCF, SMBC, MUFG and Northern Trust. Rounding 5+ûINSURANCEûGROUPû23!ûWITHûANûUNSECUREDû lNANCIALûCOVENANTS ûTESTEDûQUARTERLY û out the bank group were BMO Harris Bank bridge and term loan. require the maximum leverage ratio to WITHû53MûANDûRabobank and KeyBank with The proposed offer is being made by NOTûEXCEEDûûTIMESûONû$ECEMBERûû 53MûEACH )NTACTûTHATûWILLûPAYûaBNûANDû$ENMARKSû Campbell’s consolidated interest coverage Tryg, which will pay £4.2bn. AMERICAS LOANS BOOKRUNNERS – FULLY ratio must not be less than 3.25 times. )NTACTSûlNANCINGûWILLûPROVIDEûCERTAINTYûOFû SYNDICATED VOLUME 4HEûCOMPANYSûDEBTûISûRATEDû"AA""" ûBYû funds for the proposed acquisition. The BOOKRUNNERS: 1/1/2020 TO DATE -OODYS30û company will eventually fund its part of the Managing No of Total Share transaction with an equity placement, three- bank or group issues US$(m) (%) GENUINE PARTS NETS US$1.5bn quarters of which will be provided by 1 Bank of America 773 189,369.88 12.8 cornerstone investors. 2 JP Morgan 666 180,773.59 12.2 Automotive and industrial parts company The funding structure will support GENUINE PARTS COMPANY 3 Citigroup 375 125,575.19 8.5 ûHASûSIGNEDûAû53BNû Intact’s current credit ratings. 4 Wells Fargo 466 105,768.89 7.1 lVE YEARûREVOLVINGûCREDITûFACILITYûTHATû 4RYGûWILLûlNANCEûITSûPORTIONûOFûTHEû 5 Goldman Sachs 219 50,311.44 3.4 replaces an existing RCF. transaction mostly though a rights issue in 6 Barclays 236 50,144.69 3.4 JP Morgan is the administrative agent. 2021 that will be underwritten on a standby 7 Morgan Stanley 131 43,270.23 2.9 Bank of America, PNC Bank, Truist Securities basis. 8 Credit Suisse 163 43,165.40 2.9 and Wells Fargo were lead arrangers and The proposed acquisition will see Intact 9 RBC 223 42,185.46 2.8 bookrunners. RETAINû23!Sû#ANADAûANDû5+ûû 10 MUFG 214 38,595.93 2.6 Pricing is based on the borrower’s debt international operations and Tryg retain Total 2,651 1,483,101.98 RATINGû&ORû!! ûORûBETTERûTHEûMARGINûISû 23!Sû3WEDENûANDû.ORWAYûOPERATIONSû

Proportional credit BPûOVERû,IBORûWITHûAûBPûCOMMITMENTû )NTACTûANDû4RYGûWILLûCO OWNû23!Sû Source: Refinitiv SDC code: R7 FEEûFORû"AA""" ûITûISûBPûANDûBPûFORû OPERATIONSûINû$ENMARK

52 International Financing Review November 7 2020

8 IFR Loans 2358 p45-56.indd 52 06/11/2020 18:32:49 LOANS LEVERAGED LOANS

DA6INCIû0AYMENTSûANDû.ORTHû,ANEûAREû The rating is restricted, however, by the merging and will be managed through company’s slow growth and high leverage, LATIN AMERICA DA6INCISûPARENTû3YNCAPAY -OODYSûSAID Existing investors, including Bain Capital 4RU'REENûISûBACKEDûBYû#LAYTON û$UBILIERûû 6ENTURESûANDû3ILVERSMITHû#APITALû0ARTNERS û Rice. CHILE are selling their majority stake and will Payment technology company NUVEI maintain a minority share in the business. TECHNOLOGIESûHASûREPRICEDûITSû53MûTERMû BLUMAR SIGNS US$300m DEAL .ORTHû,ANEûWASûFORMERLYûKNOWNûASû loan. 7IRECARDû.ORTHû!MERICA 4HEûlRST LIENûLOANûPRICEDûATûBPûOVERû BLUMAR SEAFOODSûHASûSIGNEDû53MûINû ,IBORûANDûNOû/)$ ûAFTERûLAUNCHINGûATûBP bank loan facilities that it will use to VEREGY WRAPS LBO LOAN 400bp. RElNANCEûDEBTûANDûFUNDûITSûEXPORTS !ûû,IBORûmOORûANDûûSOFTûCALLû 4HEûlNANCINGûCOMPRISESûAû53Mû Engineering services provider VEREGY has protection for six months are unchanged seven-year loan that will have a two-year lNALISEDûAû53MûLOANûTHATûWILLûSUPPORTû from launch. GRACEûPERIODûANDûAû53MûTHREE YEARûLINEû ITSûBUYOUTûBYûPRIVATEûINVESTORû#OURTû3QUAREû 4HEûlRST LIENûLOAN ûLEDûBYûBMO Capital of credit. Capital. Markets, will mature in 2025. Rabobank, Banco de Credito e Inversiones, The transaction, led by UBS and BNP #ORPORATEûANDûlRST LIENûRATINGSûAREû"A Santander Chile, Banco Security and DNB Bank Paribas, WASûLOWEREDûFROMû53MûAFTERû "  PROVIDEDûTHEûlNANCING THEûCOMPANYûWITHDREWûAû53MûDELAYED -OODYSûUPGRADEDû.UVEIûTOû"AûFROMû"û Blumar prepares seafood products for draw term loan from the deal. and lifted its credit facilities to Ba3 from B2 animal feed production. The company also 4ERMSûONûTHEûTHEûSEVEN YEARûlRST LIENûLOANû in October. EXPORTSûFRESHûANDûFROZENûSALMON WEREûAMENDEDûTOûBPûOVERû,IBORûFROMû )Nû3EPTEMBER û.UVEIûCOMPLETEDûANû)0/û BPûANDûTHEû/)$ûWASûWIDENEDûTOûûFROMû and used proceeds to repay a majority of its   DEBT ûLEAVINGûROUGHLYû53MûOUTSTANDINGû !ûû,IBORûmOORûANDûûSOFTûCALLû on its loan. protection for six months are unchanged. LEVERAGED LOANS 6EREGYûISûALSOûRAISINGûAû53MûlVE YEARû PETSMART SCRAPS REFI revolving credit facility. 6EREGYûANDûITSûlRST LIENûDEBTûISûRATEDû"ûBYû Retailer PETSMART has withdrawn a proposed UNITED STATES -OODYS 53BNûLOANûFROMûTHEûSYNDICATEDûMARKETû The credit rating is constrained by citing negative conditions. NIELSEN LINES UP LBO LOANS elevated leverage, a small scale of Investors, too, pushed back on the deal APPROXIMATELYû53MûINûNETûREVENUEûANDû DESPITEû0ET3MARTûOFFERINGûUPûAûSERIESûOFû Private equity investor Advent International a narrow operating focus within the changes. ISûBACKINGûITSû53BNûACQUISITIONûOFû53 COMPETITIVEûENERGYûSPACE û-OODYSûSAID $ESPITEûMOREûLENDER FRIENDLYû based NIELSEN‘s consumer goods data Pro forma, the adjusted debt-to-Ebitda documentation and a juiced up margin for services business Global Connect with RATIOûISûûTIMESûANDûISûEXPECTEDûTOûDROPûTOû THEûLATESTûlNANCING ûINVESTORSûWEREû 53BNûOFûLOANS ûTIMESûDURINGûTHEûNEXTû ûMONTHS ûTHEû CONCERNEDûWITHû0ET3MARTSûHISTORYûOFû 4HEûlNANCINGûCOMPRISESû53BNûOFû ratings agency said. stripping away valuable assets from lenders, TERMûLOANSûANDûAû53MûREVOLVINGûCREDITû ,ANDSCAPINGûSERVICESûPROVIDERûTRUGREEN and that hindered demand for the new deal, facility, arranged and provided by Bank of WRAPPEDûAû53BNûLOANûLEDûBYûJP Morgan. a source said. America, UBS, Barclays, Deutsche Bank, HSBC, 4HEûlRST LIENûSEVEN YEARûLOANûPRICEDûATû After private investors led by BC Partners RBC, MUFG and Wells Fargo. BPûOVERû,IBORûWITHûAûûmOORûANDûAûû ACQUIREDû0ET3MARTûINû ûTHEûSPONSOR The buyout is also backed by an up to /)$û)TûINCLUDESûûSOFTûCALLûPROTECTIONûFORû backed company tacked on more debt to 53MûEQUITYûCONTRIBUTIONûFROMû six months. fund its acquisition of online retailer Chewy. Advent. !û53MûSECOND LIENûEIGHT YEARûLOANû com, only to move a part of that business to Nielsen will use proceeds from the sale to PRICEDûATûBPûOVERû,IBORûAFTERûLAUNCHINGûATû an unrestricted subsidiary that was out of reduce debt and for general corporate BP BPû!ûûmOORûANDûAûû/)$ûAREû the reach of creditors. purposes. unchanged from launch. ,ENDERS ûITûSEEMS ûAREûSTILLûSMARTINGûFROMû Nielsen expects year-end 2020 net The second-lien loan is non-callable for that move. leverage to be under 4.0 times. THEûlRSTûYEAR ûANDûCALLABLEûATûûINûTHEû h3OûCLOSEûTOûANûELECTIONûANDûTHEûHISTORYû The acquisition is expected to close in the second year and 101 in the third. with Chewy was a bit too much,” the source second quarter. 0ROCEEDSûWILLûRElNANCEû53BNûINûlRST said. 4HREEûBANKSûWILLûARRANGEûAû53MûLOANû LIENûDEBTûANDû53MûINûSECOND LIENûDEBT û 0ET3MARTûALSOûCALLEDûOFFûAû53BNûBONDû lNANCINGûFORûPRIVATEûINVESTORû#ENTERBRIDGEû ANDûALSOûPAYûAû53MûDISTRIBUTIONûTOû sale. Partners to support its acquisition of shareholders. Proceeds from the bond and loan, PAYMENTûlRMSûDAVINCI PAYMENTS and NORTH #ORPORATEûRATINGSûAREû""ûANDûTHEûlRST ALONGSIDEû53BNûOFûEQUITYûFROMûTHEû LANE TECHNOLOGIES. LIENûDEBTûISûRATEDû"" SPONSORS ûWEREûSLATEDûTOûRElNANCEûTHEû BMO Capital Markets is lead-left The company is expected to operate with company’s capital structure. The deal would arranger on the transaction, while Fifth HIGHûLEVERAGE û-OODYSûSAIDû0ROûFORMA ûTHEû have also enabled BC Partners to own a Third Bank and Truist Bank are joint lead adjusted debt-to-Ebitda ratio is expected to greater stake in Chewy. arrangers. be at 6.6 times by the end of the year. JP Morgan, Apollo Global Management, Barclays, 4HEûlNANCINGûWILLûCOMPRISEûAû53Mû TruGreen’s credit rating is supported by Citigroup, Credit Suisse, Jefferies, MUFG, RBC, UBS TERMûLOANû"ûANDûAû53MûREVOLVINGûCREDITû high levels of recurring revenue, predictable and Wells Fargo were arranging the deal. facility. FREEûCASHmOWûANDûAûDIVERSEûCUSTOMERûBASEû #ORPORATEûRATINGSûAREû""

International Financing Review November 7 2020 53

8 IFR Loans 2358 p45-56.indd 53 06/11/2020 18:32:49 Lenders score big win in Precision Medicine LBO „ US Investors win battle over voting rights

Lenders supporting Blackstone’s buyout of protections as they chased higher returns. Such “Borrowers can control the voting and can get life sciences company PRECISION MEDICINE have moves have left them vulnerable to aggressive groups of lenders together.” scored a decisive victory in a fight to stop the tactics from sponsors, including debt priming, Morgan Stanley, Blackstone, Goldman Sachs private equity sponsor from limiting their voting which occurs when specific lenders’ repayments and Mizuho arranged the seven-year loan for rights. get pushed down the capital stack by new debt. Precision. Blackstone withdrew a clause from the credit Approximately 67% of institutional term loans agreement that would reduce the lenders’ voting raised in September were dubbed covenant-lite. SETTING PRECEDENT rights for a US$650m leveraged loan to support “If you look at these predatory deals, if a Precision’s timing, so close to the 2020 US the acquisition as lenders argued the provision handful of lenders get the majority, they can end presidential election, may have also impacted could weaken their spot in Precision’s capital up screwing other lenders. You’re essentially the sponsor’s decision to withdraw the provision stack. changing the waterfall [of payments] because from the credit agreement as investors pushed Blackstone finalised the term loan financing you’re the majority lender,” said one asset back on riskier transactions in the last week. on October 30, but not before trying to cap manager. Financial data company ION ANALYTICS pulled a lender’s voting rights to a maximum of The pushback by Precision Medicine’s lenders a transaction to refinance debt on November 3, 20%, even if it bought more than 20% of the comes on the heels of other recent cases where while healthcare provider MULTIPLAN and retailer loan, sources said. Typically, lenders receive a lenders have sought a fairer treatment when PETSMART withdrew loans from the institutional percentage of voting rights that matches the investing their money. market in the final week of October. size of their commitments. Under this provision, Last month, a group of lenders to surf apparel The outlook for such transactions might Blackstone could also select whom it would retailer BOARDRIDERS took a legal battle from the change once market conditions improve, and grant greater voting rights. courtroom to the US loan market’s trade body, more aggressive credit agreements could return. Concerned the tactic would place most the Loan Syndications and Trading Association, “If one sponsor attempts to get an aggressive voting rights with a few lenders, handpicked after a debt exchange displaced the group’s provision into a deal and the timing isn’t right, by Blackstone, investors balked at the terms. position in the company’s repayment order. then it’s just one bridge too far,” said Tricomi. They worried that such a move would enable Restaurant supplier TRIMARK and mattress “But months later, if there is enough demand the sponsor to renegotiate the debt without maker SERTA SIMMONS are other recent examples from investors, this could be fertile ground for informing lenders with less voting rights. As a of minority lenders not getting a chance to lenders accepting terms they otherwise wouldn’t result, the private equity sponsor withdrew the participate in debt exchanges or being notified because they have a compulsion to invest or provision from the credit agreement, the sources of the transactions until after they occurred. need to put dollars to work. I expect borrowers said. “This is not something lenders should just to continue using these tools much to the In recent years, investors have piled into sit still for,” said Charles Tricomi, the head of detriment of the lenders.” covenant-lite leveraged loans with few legal leveraged loan research at Xtract Research. Aaron Weinman

POTTERS EYES US$390m LOAN %XISTINGûCORPORATEûRATINGSûAREû"""n""nû !ûû,IBORûmOORûISûUNCHANGEDûFROMû ANDûTHEûlRST LIENûLOANûISûRATEDû"A""n""  launch. POTTERS INDUSTRIES has scheduled a lender call Goldman Sachs and Citigroup arranged the 4HEûAVAILABILITYûOFûTHEû$$4,ûWASûREDUCEDû FORû-ONDAYûTOûDISCUSSûAû53MûLOAN deal. to 12 months from two years. )NûADDITIONûTOûTHEû53MûSEVEN YEARû 0ROCEEDSûFROMûTHEû53BNû4ERMû,OANû 4ICKINGûFEESûWILLûKICKûINûONûTHEû$$4,ûATû lRST LIENûLOAN ûTHEûCOMPANYûWILLûALSOûRAISEûAû B, along with the €650m bond, will 50% of the margin from days 46 to 60 after 53MûREVOLVINGûCREDITûFACILITY RElNANCEûTHEûCOMPANYSûEXISTINGû53ûDOLLAR the deal closes, before increasing to 100% of Credit Suisse, Barclays, Antares, Keybank and denominated secured notes and the margin from day 61 onwards. MUFG are arranging the deal, which will euro-denominated secured notes. /NE$IGITALûMUSTûALSOûCONDUCTûQUARTERLYû support private investor The Jordan %MPLOYEEûBENElTSûINSURANCEûBROKERû calls with its lenders. Company’s acquisition of Potters. ONEDIGITAL widened the terms on a JP Morgan led the deal, which will also Potters manufactures engineered glass 53BNûLOANûTHATûWILLûSUPPORTûTHEû RElNANCEûCURRENTûDEBTûANDûPAYûFEESûANDû materials. company’s acquisition by private investor expenses related to the transaction. ,IFEûSCIENCESûCOMPANYûAVANTOR reduced Onex. #ORPORATEûANDûlRST LIENûRATINGSûAREû"" THEûSIZEûOFûAûTERMûLOANûBYû53MûTOû 4HEûlNANCINGûCOMPRISESûAû53BNû 53BNûAFTERûINCREASINGûAûBONDû lRST LIENû4ERMû,OANû"ûANDûAû53MûlRST transaction by €100m to €650m and lien delayed-draw term loan. EUROPE/MIDDLE EAST/ UPSIZINGûANûACCOUNTSûRECEIVABLEûFACILITYûBYû 4HEûSEVEN YEARûlRST LIENûDEBTûPRICEDûATû AFRICA 53M BPûOVERû,IBORûVERSUSûAûRANGEûOFûBPn 4HEûSEVEN YEARûlRST LIENûPRICEDûATûBPû 425bp at launch. CURIUM WRAPS LBO LOAN OVERû,IBORûWITHûAûûmOORûANDûAûû/)$û 4HEûlRST LIENûLOANûWASûQUOTEDûATûûTOû Pricing will step down by 25bp if the 99.5 cents on the dollar in the secondary CapVest’s French nuclear medicine company is upgraded to Ba3 from B1 by MARKETûONû&RIDAYûAFTERûTHEû/)$ûWASû provider CURIUMûHASûWRAPPEDûUPûAûlRSTûANDû -OODYS AMENDEDûTOûûFROMû SECOND LIENûCOVENANT LITEûLOANûlNANCINGûTOû 4HEûLOANûWASûQUOTEDûATûnû 3OFTûCALLûPROTECTIONûHASûBEENûEXTENDEDûTOû facilitate a secondary buyout by CapVest’s cents on the dollar in secondary on Friday. 101 for 12 months from six months. funds.

54 International Financing Review November 7 2020

8 IFR Loans 2358 p45-56.indd 54 06/11/2020 18:32:49 LOANS LEVERAGED LOANS

!û53MûSEVEN YEARûlRST LIENûLOANû on its €225m senior credit facilities and a lRST LIENûPORTIONûANDûAû YEARûSECOND PRICEDûATûBPûOVERû,IBOR ûTHEûWIDERûENDûOFû €50m add-on loan. lien piece. BP BPûGUIDANCEû!ûûmOORû 4HEûlRMûPUSHEDûTHEûMATURITYûONûAûõMû 4HEûlRST LIENûPORTIONûALSOûINCLUDESûAû REMAINEDûTHEûSAMEûANDû/)$ûlRMEDûINûLINEû term loan B by 2.5-years to July 2026. It also A$25m revolving credit facility. with guidance at 99. It includes a 25bp RESETûTHEûCOVENANTûPROlLEûANDûINCREASEDûTHEû 4HEûlRST LIENûPORTIONûOFFERSûANûINTERESTû MARGINûSTEPDOWNûIFûTHEûlRST LIENûNETû interest margin to 425bp over Euribor, with MARGINûOFûBPûOVERû""39 ûWHILEûTHEû leverage ratio is 3.5 times. AûûmOOR ûFROMûBP SECOND LIENûTRANCHEûOFFERSûBPnBPû !û53MûEIGHT YEARûSECOND LIENûLOANû As part of the amendment, it raised a over. PRICEDûATûBPûOVERû,IBOR ûTHEûTIGHTERûENDûOFû õMû4,"ûTOûREPAYûDRAWINGSûUSEDûPRIMARILYû )Nû3EPTEMBER û#ITADELûSAIDû0ACIlCû'ROUPû BP BPûGUIDANCE ûWITHûAûûmOORû for acquisitions under a revolving credit Bidco, a PEP-owned entity, had proposed to !Nû/)$ûlNALISEDûATû ûAFTERûBEINGûGUIDEDû facility. The add-on also priced at 425bp over buy the Canberra-based company for ATû  %URIBORûWITHûAûûmOOR !Mû 4HEûlRST LIENûLOANûWILLûAMORTISEûATûûPERû "OTHûTHEû4,"ûANDûADD ONûlRMEDûATûû/)$ û Citadel’s board of directors unanimously year and includes 101 soft call protection for TIGHTERûTHANû ûGUIDANCE recommended shareholders to vote in six months. The second-lien loan will be a )NûADDITION ûTHEûlRMûALSOûEXTENDEDûTHEû favour of the deal when they meet virtually bullet repayment and has call protection of maturity of the €50m RCF by three years to ONû$ECEMBERû ûINûTHEûABSENCEûOFûAûSUPERIORû 102, 101, par. January 2026. proposal. Apart from the term loan, the deal also The facilities will continue to have a Of the senior debt facilities Goldman has INCLUDEDûANûõMû YEARûMULTI CURRENCYû LEVERAGEûlNANCIALûCOVENANT COMMITTED û!MûISûAVAILABLEûTOûFUNDû revolving credit facility. Natixis led the process as sole coordinator, the acquisition, repay existing debt and pay Proceeds will be used to fund a secondary physical bookrunner and agent, alongside related costs and expenses, while an buyout from CapVest Fund III by CapVest Bank of Ireland, ING and SMBC as bookrunners. ADDITIONALû!MûWILLûlNANCEûGROWTHû &UNDû)6ûANDû#AP6ESTû3TRATEGICû/PPORTUNITIESû (AVEA ûPREVIOUSLYûCALLEDû0ONROYû3ANTE û capital expenditures, any future Fund II, a vehicle comprising independent LASTûTAPPEDûTHEûLOANûMARKETûINû!PRILûû acquisitions, working capital and general CAPITALûRAISEDûSPECIlCALLYûFORûTHEûTRANSACTION WHENûITûSECUREDûAûõMûADD ONûATûBPû corporate purposes. The transfer aims to extend the over Euribor. It also added €5m to its RCF to In February, Citadel announced it had INVESTMENTûHORIZONûINû#URIUMûANDûGIVESû bring the total to €50m, paying 350bp over AGREEDûTOûACQUIREû7ELLBEINGû3OFTWAREû CapVest capacity for follow-on investments Euribor. 'ROUP ûAû5+ BASEDûPROVIDERûOFûRADIOLOGYûANDû if Curium requires equity, sources said. Havea, which has been backed by 3i maternity software, for an enterprise value #ORPORATEûRATINGSûAREû""" û&ACILITYû 'ROUPûSINCEû ûMANUFACTURESûCONSUMERû of £103m. RATINGSûAREû"""" ûFORûTHEûlRST LIENûLOANû healthcare products through brands A dual-currency loan maturing in ANDû#AA### ### ûFORûTHEûSECOND LIENû including Vitavea, Aragan, Biolane, Nature -ARCHûûFUNDEDûTHEûPURCHASEû4HATû loan. -OI û$ERMOVITAMINAûANDû$ENSMORE lNANCINGûISûSPLITûINTOûTERMûLOANSûOFû JP Morgan was physical bookrunner, !M ûaM ûaMûANDû!M ûANDû alongside passive bookrunners Barclays, a A$10m revolver. Deutsche Bank and Nomuraû*0û-ORGANûANDû ASIA-PACIFIC ANZ and Royal Bank of Canada were the ,UCIDûWEREûADMINûAGENTSûFORûTHEûlRST LIENû -,!"SûOFûTHEûLOAN ûWHICHûATTRACTEDûFOURû loan and the second-lien loan, respectively. LBO LOAN FOR CITADEL GROUP other banks in syndication. CapVest postponed the sale of Curium in -ARCHûDUEûTOûMARKETûVOLATILITYûCAUSEDûBYûTHEû 0RIVATEûEQUITYûlRMûPACIFIC EQUITY PARTNERS is BARING WRAPS HEXAWARE LBO LOAN Covid-19 pandemic. SEEKINGûAû!Mû53M ûLOANûTOûFUNDû its proposed buyout of information Baring Private Equity Asia has closed HAVEA SEALS A&E, ADD-ON technology services provider CITADEL GROUP. SYNDICATIONûONûAû53MûlVE YEARûSECURED û Goldman Sachs is the sole mandated lead amortising loan for IT solutions provider French healthcare product manufacturer arranger, bookrunner and underwriter of HEXAWARE TECHNOLOGIES with 10 banks joining HAVEA has completed an amend and extend THEûLOAN ûWHICHûISûSPLITûINTOûAûlVE YEARû the deal.

US LEVERAGED LOANS EUROPEAN LEVERAGED LOANS EMEA SPONSORED LOAN BOOKRUNNERS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BY VOLUME: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Europe, Middle East, Africa bank or group issues US$(m) (%) bank or group issues US$(m) (%) Managing No of Total Share 1 Bank of America 466 75,624.89 12.1 1 BNP Paribas 49 8,088.50 8.2 bank or group issues US$(m) (%) 2 JP Morgan 367 58,004.25 9.3 2 JP Morgan 39 7,844.40 7.9 1 JP Morgan 22 4,297.01 8.5 3 Wells Fargo 265 47,602.80 7.6 3 Credit Agricole 37 6,364.27 6.4 2 BNP Paribas 28 4,200.13 8.3 4 Citigroup 173 35,184.62 5.6 4 HSBC 26 5,753.44 5.8 3 Deutsche Bank 24 3,294.37 6.5 5 Goldman Sachs 174 32,844.46 5.3 5 Deutsche Bank 38 5,714.17 5.8 4 Credit Agricole 22 3,111.09 6.2 6 Credit Suisse 133 30,999.77 5.0 6 Goldman Sachs 30 5,545.25 5.6 5 SG 14 2,816.32 5.6 7 Barclays 169 30,453.05 4.9 7 Barclays 25 5,474.86 5.5 6 Barclays 15 2,464.25 4.9 8 Morgan Stanley 101 23,702.01 3.8 8 Citigroup 19 5,085.50 5.1 7 HSBC 14 2,385.74 4.7 9 Deutsche Bank 128 21,420.66 3.4 9 Santander 27 4,054.31 4.1 8 Credit Suisse 21 2,248.15 4.5 10 RBC 103 17,741.49 2.8 10 UniCredit 20 3,472.59 3.5 9 UniCredit 12 2,214.16 4.4 Total 163 99,172.08 Total 1,360 625,569.08 10 Morgan Stanley 11 2,179.84 4.3

Excluding Project Finance. Excluding project finance. Western Europe only included. Total 86 50,390.97

Excluding project finance. Source: Refinitiv SDC code: P2 Source: Refinitiv SDC code: P10 Source: Refinitiv SDC code: P13

International Financing Review November 7 2020 55

8 IFR Loans 2358 p45-56.indd 55 06/11/2020 18:32:50 ANZ, Barclays, BNP Paribas, Citigroup, Credit GAW, HENGLI TO LIFT CITYPLAZA LOAN (ONGû+ONG BASEDû'AWûHASûAûFOCUSûONûREALû Agricole CIB, DBS Bank, Deutsche Bank, HSBC estate, while Hengli’s major businesses and Standard Chartered were the nine !ûCONSORTIUMûCOMPRISINGûPRIVATEûEQUITYûlRMû include textile, petrochemical, polyester original mandated lead arrangers and GAW CAPITAL PARTNERS and HENGLI GROUP is seeking products, and real estate development. bookrunners on the loan. TOûINCREASEûANû(+BNû53BN ûLOANû Bank SinoPac, E Sun Commercial Bank, and that backed the leveraged buyout of two Hong SMBC had joined before the launch into +ONGûOFlCEûTOWERSûLASTûYEAR general syndication in August. The consortium is looking to increase the Participants are Bank Sinopac, SMBC, E.Sun LOANûBYû(+BNûFOLLOWINGûAûRECENTû RESTRUCTURING Commercial Bank, Korea Investment & Securities REGULATORYûCHANGEûWHICHûEASESûlNANCINGû Co, KDB Asia, Korea Development Bank, MUFG, rules for commercial properties. Woori Bank, Taipei Fubon Commercial Bank, /Nû!UGUSTû ûTHEû(ONGû+ONGû-ONETARYû EUROPE/MIDDLE EAST/ Taishin International Bank and Far Eastern Authority relaxed the loan-to-value ratio caps for AFRICA International Bank. mortgage loans on non-residential properties Baring’s shareholding vehicle, HT GLOBAL IT from 40% to 50%, as a recession is weighing on SELECTA SEALS RESTRUCTURING SOLUTIONS, is the borrower on the loan and the city’s commercial property market. has pledged its shares as security. After the increase in loan amount, the 3WISSûVENDINGûMACHINEûBUSINESSûSELECTA has The loan pays an opening interest margin loan-to-value ratio will be below 50%. completed a debt restructuring with its OFûBPûOVERû,IBORûBASEDûONûANûOPENINGû Banks are now invited to join the additional creditors, including a €125m capital leverage of around 4.30x, and top-level all-in (+BNûTRANCHEûATûTHREEûLEVELSû-,!SûATû INJECTIONûFROMûMAJORITYûOWNERû++2 OFûBPû (+MûORûABOVEûWILLûEARNûAûTOP LEVELûALL INû 5NDERûTHEûTERMSûOFûTHEûDEAL û++2ûHASûPUTû The multitranche loan is split into a PRICINGûOFûBPûVIAûAûBPûFEE ûLEADûARRANGERSû €125m into the business, and written off a 53MûPORTIONûFORûRElNANCINGûBONDSûFORû GIVINGû(+MnMûWILLûEARNûANûALL INû õMûSUPERûSENIORûFACILITYûITûPROVIDEDûINû-ARCH the shareholding vehicle and another pricing of 156bp via a 35bp fee, while )NûRETURN ûTHEûMATURITYûOFû3ELECTASûõMû 53MûFORûAûGENERALûOFFERûITûANNOUNCEDûINû ARRANGERSûTAKINGû(+MnMûWILLûEARNû RCF will be extended to January 1 2026 from *UNEûFORûTHEûûSTAKEûITûDIDûNOTûALREADYû ANûALL INûPRICINGûOFûBPûVIAûAûBPûFEE !UGUSTûûANDûTHEûlNANCIALûCOVENANTû own in India-listed Hexaware. The loan offers an interest margin of draw stop with be replaced with new (4û'LOBALû)4û3OLUTIONSû53Mûû 130bp over Hibor and currently has a lNANCIALûMAINTENANCEûCOVENANTS senior secured notes were originally due in remaining life of about 1.34 years. The facility was provided by BNP Paribas, July 2021, but the borrower exercised a call 'AWûANDû(ENGLIûHADûRAISEDûTHEû(+BNû #REDITû!GRICOLE û#REDITû-UTUELû!RKEAû'ROUP û option. THREE YEARûLOANûINû-ARCHûûFORûTHEûACQUISITIONû #REDITû3UISSE û$EUTSCHEû"ANK û'OLDMANû )Nû3EPTEMBERû"ARINGûACCEPTEDû2SûPERû OFû#ITYPLAZAû4HREEûANDû&OURûINû(ONGû+ONGSû 3ACHS û)NTESAû3ANPAOLO û5NIONûDEû#REDITOSû EQUITYûSHAREûASûTHEûlNALûPRICEûFORû 4AIKOOûDISTRICTûFROMû3WIREû0ROPERTIES Inmobiliarios and ING as bookrunners and Hexaware’s delisting offer through its Standard Chartered and United Overseas Bank mandated arrangers, with UniCredit as AFlLIATEDûENTITIESû(4û'LOBALû(OLDINGSû"6ûTHEû were the mandated lead arrangers and mandated arranger, according to data from ACQUIRER ûANDû(4û'LOBALû)4û3OLUTIONS bookrunners of the deal, which attracted 10 2ElNITIVû,0# The acquirer agreed to purchase shares other lenders in syndication. 3ELECTASûBONDûDEBT ûWHICHûCOMPRISESû representing around 29% of Hexaware from 3EPARATELY û'AWûISûINûTALKSûWITHûBANKSûFORû õMûSENIORûSECUREDûNOTES ûõMûSENIORû public shareholders in the general offer, AûLOANûOFûAPPROXIMATELYû(+BNûTOûBACKûAû SECUREDûmOATING RATEûNOTESûANDû3&RMû increasing the combined ownership of POTENTIALû,"/ûOFû#ITYPLAZAû/NE ûAû STOREYû 53M ûSENIORûSECUREDûNOTESûALLûDUEûINû Baring controlled entities to approximately OFlCEûBUILDING ûALSOûFROMû3WIRE  ûWILLûBEûREPLACEDûWITHûlRSTûANDûSECOND 91%. -EANWHILE ûTHEûPRIVATEûEQUITYûlRMûISûALSOû lien notes maturing in April and July 2026, "ARINGûHADûOFFEREDû2SûPERûSHAREûINû PLANNINGûTOûRElNANCEûAû(+BNûLOANûITû respectively. *UNE ûBUTûTHEûlNALûPRICEûWASûDETERMINEDû OBTAINEDûINûûFORûTHEûACQUISITIONûOFûAû ++2ûACQUIREDû!LLIANZû#APITALû0ARTNERSû through a bookbuilding process. PORTFOLIOûOFûSHOPPINGûMALLSûFROMû,INKû2%)4 MAJORITYûSTAKEûINû3ELECTAûINû$ECEMBERû

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56 International Financing Review November 7 2020

8 IFR Loans 2358 p45-56.indd 56 06/11/2020 18:33:06 EQUITIES

China 58 India 60 Japan 60 Philippines 60 Singapore 60 Czech Republic 60 Netherlands 61 Russia 62 Sweden 62 UK 63 United States 64 Brazil 67 Structured Equity 68

„ FRONT STORY IPOs HK moves on from Ant IPO fiasco Listing hopefuls plough on in Hong Kong

Three Chinese property management UPCOMINGûmOATSû-OREûTHANûMû(ONGû candidate Joe Biden took a narrow lead in companies pressed ahead with Hong Kong Kong retail investors chipped in HK$1.3trn swing states in the US presidential election IPOs totalling US$3bn last week, betting of subscriptions, making it the most popular helped some of the new listings claw back that a market rally would convince investors IPO in the city’s history. lost ground. JW Therapeutics soared 19.3% to look beyond disappointing recent debuts “Ant’s delay will inevitably have a short-term on Thursday and closed above the IPO price and the cancellation of ANT GROUP‘s impact on the IPO market, especially when at HK$25.05. Hong Kong’s benchmark Hang mammoth US$34.4bn Hong Kong and recent listings did not do very well. It’s getting Seng Index jumped 3.25% on the day. Shanghai listing. close to year-end, too, and some investors may “Ant’s delay is a concern but Asian stock SUNAC SERVICES started bookbuilding on NOTûBEûTHATûEAGERûTOûINVEST vûSAIDûANû%#-ûBANKER markets are holding up well during the Friday for a Hong Kong IPO of up to Recent new listings from the healthcare election and this could help IPO sentiment,” US$1.2bn. HSBC and Morgan Stanley are the and property management sectors have had said a person close to the upcoming Sunac sponsors. JINKE SMART SERVICES GROUP, another disappointing debuts despite generating 3ERVICESûmOAT Chinese property management company, strong demand from cornerstone, “The Ant incident may have disappointed also opened books on Thursday for a Hong institutional and retail investors. some investors but the deal has attracted so Kong IPO of up to HK$6.3bn (US$816m). Shares in drugmaker SIMCERE many international investors to Hong Kong. CLSA and Huatai International are the PHARMACEUTICAL GROUP fell 20% on debut on I believe not all of them will leave the city sponsors. October 23 and continued to trade down to right away and some may look for other CHINA RESOURCES MIXC LIFESTYLE SERVICES also HK$9.36 on Wednesday, 32% below the IPO investment opportunities that are sought listing approval last week for a Hong price. Shares in Chinese biotech company JW reasonably valued,” said a person close to Kong IPO of about US$1bn. Pre-marketing (CAYMAN) THERAPEUTICS and Chinese property the Jinke deal. will start this week if approval is granted. management company KWG LIVING also fell Jinke is selling shares at a 2021 P/E of 21– Ant was due to raise HK$133.6bn 7.6% and 23% respectively on their debuts. 24. SHIMAO SERVICES last month sold shares at (US$17.2bn) from the largest listing in Hong a 2021 P/E of 27 for a HK$9.76bn IPO. As of Kong since insurance giant AIA’s US$20.5bn STRONG RUN-UP last Thursday, its shares have fallen 5.3% IPO in 2010, and bankers hoped that a However, a strong run-up in Asian stock since listing on October 30. strong debut would draw more investors to markets on Thursday after Democratic Candy Chan, Fiona Lau Ant returns billions of dollars to investors

A-share subscribers refunded with interest after last-minute cancellation

ANT GROUP ONû-ONDAYûWILLûCOMPLETEû Allocations for the Hong Kong offer were by Ant, and said that it had asked the refunding over US$185bn to investors who not completed before the deal was pulled, Shanghai Stock Exchange and the China had subscribed to its aborted US$34.4bn dual and institutional investors that had Securities Depository and Clearing to listing in Shanghai and Hong Kong. subscribed for the Hong Kong shares were support refunds. In China, where investors only pay for the not required to pay until November 5, when 4HEû#32#ûALSOûSUGGESTEDûTHATûlVEûMUTUALû shares they are allocated, the refund equals the shares were due to begin trading. fund managers, which are among the the Rmb114.9bn (US$17.2bn) Ant was Ant’s IPO was suspended by the Shanghai strategic investors for the deal, consider planning to raise from the A-share portion of Stock Exchange on November 3, less than 48 reasonable demands from investors that the deal, plus interest based on Chinese hours before its shares were due to begin have expressed their willingness to exit. Five banks’ deposit rate. For the A-share tranche, trading on November 5, in a dramatic move Chinese asset managers closed subscriptions strategic investors paid for their allotted prompted by China’s introduction of new in the beginning of October for new funds shares on October 23, while institutional and online lending rules. that had planned to invest a total of retail investors completed payment on Ant said it would fully evaluate its position Rmb60bn in the IPO. November 3. Refunds are to be completed by before deciding whether to relaunch CICC and China Securities sponsored the November 9. bookbuilding within the 12-month validity Shanghai Star listing, and were bookrunners In Hong Kong, the 1.55 million retail period of its IPO approval given by the China with Citic Securities, Huatai United Securities, investors who paid a combined HK$1.3trn Securities Regulatory Commission in Shenwan Hongyuan Financing Services and BOC (US$168bn) for their orders received refund October. International (China). Haitong Securities is the cheques in two batches on Wednesday and The CSRC said on Thursday night that it lNANCIALûADVISERûONûTHEûDEAL Friday, but were not entitled to interest. agreed with the refund arrangement made Fiona Lau, Karen Tian

International Financing Review November 7 2020 57

9 IFR Equities and SE 2358 p57-69.indd 57 06/11/2020 20:34:03 support from new investors, including 0RIVATEûEQUITYûlRMSû(ILLHOUSEû Hillhouse Capital and GIC. Existing Capital, Zhenfund Capital and Banyan ASIA-PACIFIC investors, including Qiming Venture Partners respectively hold 3%, 2.3% and Partners and Boyu Capital, also participated. 2% stakes. Founded in 2017, Antengene has six For the nine months to September 30, CHINA clinical-stage products for cancer treatment. Yatsen posted a net loss of Rmb1.16bn It posted a loss of Rmb538m (US$78m) for 53M ûCOMPAREDûTOûAûPROlTûOFû JD HEALTH TARGETS LISTING HEARING the six months ended June 30, more than Rmb29m a year earlier. It had an annual quadrupling from Rmb107m a year earlier. PROlTûOFû2MBMûINû JD HEALTH INTERNATIONAL is planning to seek It had an annual loss of Rmb324m in 2019. Goldman Sachs, Morgan Stanley, CICC and listing approval as early as this week for a Goldman Sachs and JP Morgan are the joint Tiger Brokers are the joint bookrunners on Hong Kong IPO that could raise about sponsors. the deal. US$3bn, people familiar with the situation said. SUNKWAN MARKETS HONG KONG IPO NEW ORIENTAL COMPLETES HK LISTING Bank of America, Haitong International and UBS are the sponsors. China Renaissance is Chinese property developer SUNKWAN NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP THEûlNANCIALûADVISER PROPERTIES GROUP is raising up to HK$1.25bn raised HK$10.1bn (US$1.3bn) from a Hong The company, the online healthcare unit (US$161m) from a Hong Kong IPO. Kong secondary listing at HK$1,190 per of US and Hong Kong-listed JD.com, is It is offering 500m primary shares, or 25% share. targeting a valuation of at least US$20bn, of the enlarged share capital, in an The price represents a discount of 4.9% said the people. indicative price range of HK$1.70–$2.50 TOûLASTû-ONDAYSûCLOSEûOFû53ûPERû JD Health, which was spun off from JD. each. share. COMûINû-AYûLASTûYEAR ûPROVIDESû There is an overallotment option of 15% Books were multiple times covered. pharmaceutical and healthcare products of the base size. The NYSE-listed Chinese private and internet healthcare services to Proceeds will be used to develop property education provider sold 8.51m primary customers. projects, repay borrowings and for general shares or about 5.04% of the enlarged share &ORûTHEûlRSTûHALFûOFû ûITSûREVENUEû working capital. capital. jumped 76% to Rmb8.78bn (US$1.29bn) The deal will price on November 10 and !BOUTûûOFûTHEûmOATûISûEARMARKEDûFORû from a year earlier. However, it posted a loss the shares are expected to list on November institutional investors and 6% for retail of Rmb5.4bn due mainly to the fair value 17. investors. changes of its convertible preferred shares, ABC International is the sole sponsor. Proceeds will be used for investments in COMPAREDûWITHûAûPROlTûOFû2MBMûINûTHEû technology, business growth and lRSTûHALFûOFû YATSEN PRE-MARKETS NYSE IPO geographic expansion, strategic JD.com owns an 81% stake in JD Health investments and acquisitions, and general while Hillhouse Capital owns 4.49%. Chinese cosmetics and skincare company corporate purposes. YATSEN HOLDING is pre-marketing a NYSE IPO Bank of America, Credit Suisse and UBS are ANTENGENE PRE-MARKETS HK IPO of at least US$500m, according to people sponsors. close to the deal. So far this year, US-listed NetEase, JD. Cancer drugs developer ANTENGENE started Founded in Guangzhou in 2016, the com, Yum China, Huazhu Group, Zai Lab, PRE MARKETINGûLASTû-ONDAYûFORûAû(ONGû+ONGû company has three cosmetics and skincare Baozun and GDS have sold shares in Hong IPO of at least US$300m, according to a brands – Perfect Diary, Little Ondine and Kong through secondary listings. person close to the deal. Abby’s Choice. In July, the biotech company, which It intends to use the proceeds to fund JINKE LAUNCHES HK IPO counts Celgene among its backers, business operations, potential strategic announced that it had completed a US$97m investments and acquisitions, develop data JINKE SMART SERVICES GROUP has opened the PRIVATEûlNANCINGûLEDûBYû&IDELITYû analytics technology and product books for a Hong Kong IPO of up to -ANAGEMENTûû2ESEARCHûWITHûADDITIONALû formulation, and store network expansion. HK6.3bn (US$816m). The property management unit of ASIA-PACIFIC EQUITIES ASIA-PACIFIC EQUITIES (EX-JAPAN) Shenzhen-listed Jinke Property Group is BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE selling 133m primary shares, or 21% of the Managing No of Total Share Managing No of Total Share enlarged share capital, in an indicative bank or group issues US$(m) (%) bank or group issues US$(m) (%) range of HK$41.80–$47.60 per share. The 1 Morgan Stanley 93 22,701.31 7.8 1 Morgan Stanley 83 20,465.27 7.7 range represents a 2021 P/E of 21–24. 2 Goldman Sachs 91 17,195.47 5.9 2 Citic 101 17,004.61 6.4 Ten cornerstone investors are investing 3 Citic 101 17,004.61 5.9 3 CICC 86 15,989.73 6.1 US$345m. 4 CICC 86 15,989.73 5.5 4 Goldman Sachs 86 15,118.50 5.7 The deal is scheduled to price on 5 UBS 87 13,734.96 4.7 5 UBS 85 13,303.69 5.0 November 10 and the shares will start 6 JP Morgan 62 12,578.82 4.3 6 JP Morgan 60 11,965.41 4.5 trading on November 17. 7 Citigroup 70 11,763.37 4.1 7 China Secs 47 11,397.75 4.3 CLSA and Huatai International are the joint 8 China Secs 47 11,397.75 3.9 8 Citigroup 65 10,652.91 4.0 sponsors. 9 Credit Suisse 67 10,105.30 3.5 9 Bank of America 53 9,118.63 3.5 Proceeds will be used to expand the size 10 Bank of America 57 9,614.11 3.3 10 Credit Suisse 64 8,336.16 3.2 of the business, acquire other property Total 2,360 289,978.61 Total 2,235 264,217.63 management companies, replenish

Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues working capital and for spending on IT Source: Refinitiv SDC code: C4a1 Source: Refinitiv SDC code: C4a2 services.

58 International Financing Review November 7 2020

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BANK OF JIANGSU’S RIGHTS ISSUE WALVAX PICKS BANKS REVEALINGûFORûTHEûlRSTûTIMEûITSûlNANCIALûANDû APPROVED operational numbers. Chinese vaccine maker WALVAX BIOTECHNOLOGY For the six months ended June, Kuaishou BANK OF JIANGSU has cleared a hearing at the has picked three banks to arrange a Hong had 302 million daily active users who on China Securities Regulatory Commission for Kong listing that could raise about US$1bn average spent more than 85 minutes on its an up to Rmb20bn (US$3bn) rights issue. next year, according to people close to the eponymous app, which they accessed more The regional commercial bank plans to deal. than 10 times a day. Over the same period, offer 3.46bn shares on a 3-for-10 basis. The Shenzhen-listed company, which is more than 1.1 billion average monthly short Proceeds will be used to replenish core developing a Covid-19 vaccine, is working videos were uploaded on the app. Tier 1 capital. As of the end of September, with CLSA, Haitong International and Jefferies Access to Kuaishou is free to users and the bank’s capital adequacy ratio and core ONûTHEûPLANNEDûmOATû revenue is drawn mainly through the sale of Tier 1 capital adequacy ratio were 13.87% As of last Thursday, Walvax’s A-shares virtual items, the provision of online and 8.45%, respectively. have risen 60% this year, giving it a market marketing services, and commissions from )TûPOSTEDûAûNETûPROlTûOFû2MBBNûONû capitalisation of Rmb80bn (US$12bn). The e-commerce sales. revenue of Rmb25bn in H1 2020. Hong Kong listing is expected to involve the Kuaishou posted revenues of Rmb25bn BOC International (China) and Huatai United sale of 10%–15% of its capital, said the 53BN ûFORûTHEûlRSTûHALFûOFû ûUPûû Securities are working on the deal. people. from a year earlier. It lost Rmb68bn, 4HEûCOMPANYûSTILLûNEEDSûlNALûWRITTENû To meet the company’s development COMPAREDûTOû2MBMûFORûTHEûlRSTûHALFûOFû approval from the CSRC. needs, Walvax said on October 20 that its 2019, mainly due to higher selling and board had approved a plan to list in Hong marketing expenses and changes in the fair REMEGEN PRICES IPO AT TOP OF RANGE Kong to boost its capital and value of convertible preferred shares. competitiveness. It did not mention the size The company reported an adjusted net REMEGEN has raised HK$3.99bn (US$514m) ANDûTIMINGûOFûTHEûPLANNEDûmOATû LOSSûOFû2MBBNûINûTHEûlRSTûHALFûOFû û after pricing its Hong Kong IPO at the top of Walvax announced its third-quarter COMPAREDûTOûANûADJUSTEDûNETûPROlTûOFû an indicative price range, according to a lNANCIALûRESULTSûALONGSIDEûTHEû(ONGû+ONGû 2MBBNûINûTHEûlRSTûHALFûOFû person close to the deal. LISTINGûPLANû)TûREPORTEDûAûNETûPROlTûOFû Kuaishou has a weighted-voting rights The Chinese biotech company is selling Rmb374m for June to September, up 955% structure which gives co-founders and 76.5m primary shares, or 16% of the year on year. controlling shareholders Su Hua and Cheng enlarged share capital, in an indicative Its A-shares hit an all-time high of Yixiao preferential voting rights. range of HK$50.30–$52.10 per share. 2MBûINû!UGUSTûWHENû-EXICOûSAIDûITû The heavily subscribed book closed a day aimed to conduct late-stage clinical trials for CR SERVICES SEEKS IPO APPROVAL earlier than planned on October 30. Covid-19 vaccines in development by US and Nineteen cornerstone investors invested Chinese companies, including Walvax and CHINA RESOURCES MIXC LIFESTYLE SERVICES sought US$227.5m. another Chinese vaccine developer, CanSino listing approval last week for a Hong Kong The shares will start trading on November 9. Biologics. IPO of about US$1bn, according to people Huatai International, JP Morgan and Morgan In June, Walvax sponsored trials of Covid- close to the deal. Stanley are the sponsors, and joint global ûVACCINESûWITHûTHEû!CADEMYûOFû-ILITARYû Pre-marketing will start this week if coordinators with UBS. 3CIENCE ûAûRESEARCHûINSTITUTEûAFlLIATEDûWITHû approval is granted. RemeGen has a pipeline of 10 drug the People’s Liberation Army in China. The property management unit of Hong candidates focusing on therapies for the Kong-listed China Resources Land is working treatment of autoimmune, oncology and KUAISHOU FILES FOR IPO with sponsors CCB International, CICC, ophthalmic diseases. Citigroup and Goldman Sachs on the It posted a loss of Rmb99.6m (US$14m) for Chinese online short video company transaction. THEûlRSTûQUARTERûOFû ûCOMPAREDûWITHûAû KUAISHOU TECHNOLOGY HASûlLEDûAûLISTINGû 4HEûCOMPANYûPOSTEDûAûNETûPROlTûOFû Rmb87.7m loss a year earlier. application for a Hong Kong IPO which 2MBMû53M ûFORûTHEûlRSTûHALFûOFû could raise up to US$5bn early next year,  ûUPûûFROMûTHEûlRSTûHALFûOFû SUNAC SERVICES LAUNCHES IPO moving ahead of rival ByteDance in the race to go public. CICC SURGES 31% ON SHANGHAI DEBUT SUNAC SERVICES has opened the books for a Kuaishou, a Tencent-backed start-up, is Hong Kon g IPO of up to HK$8.73bn targeting an IPO valuation of about CHINA INTERNATIONAL CAPITAL CORP‘s A-shares (US$1.23bn). US$50bn, almost double the US$28bn it surged 31% to Rmb37.70 in debut trading on The property management services unit of achieved in a funding round last year. -ONDAYûFROMûTHEûISSUEûPRICEûOFû2MB û Hong Kong-listed property developer Sunac TikTok owner ByteDance is currently following a Rmb13.2bn (US$1.97bn) China is selling 690m shares, or 23% of the raising about US$2bn from a private round Shanghai IPO. enlarged share capital, in an indicative range at a US$180bn valuation and is considering The IPO is China’s third-largest this year of HK$10.55-$12.65 per share. listing its two major businesses, short video behind those of Semiconductor The range represents a 2021 P/E of 22.2–26.8. app Douyin and news aggregator Jinri -ANUFACTURINGû)NTERNATIONALû2MBBN û Cornerstone investors are Tencent Toutiao, in a Hong Kong IPO possibly next and Yihai Kerry Arawana Holdings (US$150m), IDG (US$100m), Hillhouse year, according to people familiar with the (Rmb13.9bn). (US$60m) and Snow Lake (US$60m). SITUATIONû-AINLANDûMEDIAûALSOûREPORTEDûONû The issue price translates to a 2019 P/E of The deal is scheduled to price on Thursday that video-streaming app Xigua 33.89, against 33.90 for listed peers. The November 12 and the shares will start could also be among the assets to be listed. UNOFlCIALûVALUATIONûCAPûOFûûTIMESû trading on November 19. /Nû4HURSDAYû+UAISHOUûlLEDûAû(ONGû+ONGû historical earnings on A-share IPOs was HSBC and Morgan Stanley are the joint listing application with Bank of America, China dropped as part of China’s market-oriented sponsors. Renaissance and Morgan Stanley as sponsors, pricing reforms.

International Financing Review November 7 2020 59

9 IFR Equities and SE 2358 p57-69.indd 59 06/11/2020 20:34:04 The Hong Kong-listed brokerage sold Citigroup, Haitong Securities, Kotak and S$300m–$400m (US$219m–$291m) REIT IPO 459m A-shares, representing 9.5% of its Nomura are the banks on the transaction. on Singapore Exchange next year, according enlarged capital. It had more than trebled In 2017, SFPG bought a 74% stake in the to people with knowledge of the the number of shares on offer to 1.44bn company for US$1.1bn from KKR Floorline transaction. from 459m in July, before reverting to its Investment. The REIT, to be called CORE INCOME GLOBAL ORIGINALûTARGETûINûANû!UGUSTûlLING Gland Pharma manufactures injectable REIT, will comprise Australian commercial Oriental Securities and China Galaxy drugs and most of its revenue comes from properties owned by AIP. Securities were sponsors and joint Europe and the US. AIP has US$4.1bn of assets under bookrunners with Ping An Securities, management with four commercial Shenwan Hongyuan Financing Services, and properties in Australia. BOC International (China). JAPAN DBS and Nomura are working on the transaction. AI CHIP MAKER YITU FILES FOR CDR JAPAN AIRLINES PLANS FOLLOW-ON GHY CULTURE PLANS UP TO S$100m IPO AI chip maker YITU HASûlLEDûTOûTHEû JAPAN AIRLINES plans to launch a follow-on Shanghai Stock Exchange for a proposed this week to raise up to ¥155bn (US$1.5bn), Entertainment and content provider GHY Rmb7.51bn (US$1.1bn) offering of Chinese based on a minimum 3% discount to Friday’s CULTURE & MEDIA is planning a S$75m–$100m Depositary Receipts on the Shanghai Star close of ¥1,843. (US$54m–$73m) Singapore Exchange IPO market. It is offering 87m primary shares in an this year, people with knowledge of the The Cayman-registered company plans indicative discount range of 3%–6% to the transaction said. to offer CDRs representing up to 36.4m market close on the pricing day. There is a '(9ûPRODUCESûANDûDISTRIBUTESûlLMSûANDû Class A shares, or not less than 10% of its 13m-share greenshoe. dramas. It is also engaged in artist enlarged capital. There is a 15% greenshoe. Proceeds will be used to make changes to management, post-production and visual Eight CDRs represent one share. THEûAIRLINESûSTRUCTUREûTHROUGHû-ARCHûû effects services. The company’s founder is Proceeds will be used to fund three AI to prepare for the post Covid-19 era, #HINESEûlLMûDIRECTORû'UOû*INGYU

chip projects and intelligent human, accelerate the reduction of CO2 emissions, The company has around 200 employees object and speech recognition research accelerate initiatives for social issues and INû3INGAPORE û-ALAYSIA û#HINAûANDû!USTRALIA and development, and replenish working repay liabilities. BOC, DBS and UOB are the bookrunners. capital. About 30% of the deal will be earmarked The company posted a 2019 net loss of for international investors and the rest to Rmb3.64bn, widening from Rmb1.17bn in domestic buyers. 2018. Its net loss in H1 2020 was There is a 180-day lock-up. Rmb1.3bn. The books will open on November 12 and EUROPE/MIDDLE Founders Zhu Long and Lin Chenxi price on November 18 at the earliest. EAST/AFRICA indirectly hold 38.2% of the company’s Daiwa, Morgan Stanley and Mizuho are the Class B shares, but have combined voting joint global coordinators, and also joint RIGHTSûOFûû*ACKû-ASû9UNFENGû#APITALû bookrunners with Bank of America on the CZECH REPUBLIC and Sequoia Capital are also shareholders. international tranche. Daiwa, Mizuho and Guotai Junan Securities is the sponsor. Citic Mitsubishi UFJ Morgan Stanley are on the PARTIAL ‘SHOE AS CZG SHARES Securities aims to win a joint bookrunner domestic portion. CONTINUE TO MISFIRE role, according to people close the deal. Firearms maker CZGûONû-ONDAYûPARTIALLYû PHILIPPINES exercised a 10% secondary greenshoe on its INDIA otherwise all-primary IPO, with shares still VISTA LAND PLANS US$200m REIT IPO trading below water. GLAND PHARMA SETS IPO RANGE Having cut a secondary tranche in the IPO VISTA LAND AND LIFESCAPES is planning a targeting CZK587m–CZK750m (US$25m– GLAND PHARMA, a subsidiary of Shanghai US$150m–$200m REIT IPO in the second $32m), primary was slashed to just Fosun Pharmaceutical Group, has set the half of next year, people with knowledge of CZK812m on bottom-of-the-range CZK290 price range for a Rs64.7bn (US$868m) IPO the transaction said. pricing from CZK2bn–CZK2.6bn at launch. at Rs1,490-Rs1,500. CLSA, Credit Suisse and UBS are working on $ESPITEûTHAT ûTHEûSTOCKûCLOSEDûmATûONû Anchor books opened on Friday and the the IPO. debut, pushed up to CZK294 twice in the rest of the offer will be open from Vista Land through its subsidiary next few days, but was largely stuck around November 9–11. Vistamalls develops and operates malls and pricing until mid-October when it broke Up to Rs12.5bn will be raised through business process outsourcing commercial offer and fell to CZK286, pulling back to primary shares and 34.8m secondary centres. CZK290 on Friday October 30. shares are also on offer. Vista Land shares are down 56% this year. In total, 215,859 of a 280,000 secondary Shareholders Fosun Pharma Industrial, greenshoe was exercised to take the total Gland Celsus Bio Chemicals, Empower DEALûSIZEûTOû#:+MûANDûTHEûFREE mOATûTOû Discretionary Trust and Nilay SINGAPORE 9.2%. Discretionary Trust are the sellers. 4HEûSHARESûCLOSEDûATû#:+ûONû-ONDAY û The top of the price range implies a AIP, TOKYU LAND BACK SGX REIT IPO dropping to CZK286 by Thursday’s close. price to earnings multiple of 30.07 for Ceska Sporitelna, Komercni banka and Societe 2020 compared with 31.43 for the 3OUTHû+OREASû!)0û!SSETû-ANAGEMENTû#Oû Generale were global coordinators, and benchmark Nifty 50 index. and Japan’s Tokyu Land Corp are planning a bookrunners with Wood & Company.

60 International Financing Review November 7 2020

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Two people working on the capital raise DENMARK NETHERLANDS said that they believe that shareholders will still vote in favour of the company’s Reset SWIRE BEGINS PRE-MARKETING OSLO REBELS GATHER SUPPORT AGAINST plan and €3.5bn rights issue. One said that FLOAT OF CADELER €3.5bn URW RIGHTS ISSUE the rebels need to garner at least one-third of votes against to reject the rights issue. (ONGû+ONGûCONGLOMERATEû3WIREû0ACIlCûHASû UNIBAIL-RODAMCO-WESTFIELDûISûHOLDINGûANû%'-û URW shares closed down 2.33% at €34.40 begun pre-marketing for a US$100m-plus on Wednesday, asking shareholders to on Friday, and have lost more than three- mOATûOFûITSû$ANISHûWINDûTURBINESûBUSINESSû decide whether to proceed with a €3.5bn quarters of their value this year. CADELER in Norway. rights issue for the shopping centre landlord The unit, currently known as Swire Blue THATûSOMEûHIGHûPROlLEûSHAREHOLDERSûDOûNOTû Ocean, installs wind turbines and support. POLAND foundations for offshore wind farms, and The rights issue is part of URW’s €9bn provides maintenance to schemes in Reset plan, which also includes limiting CANAL+ POLSKA SEEKS Z2.65bn Northern Europe. It owns and operates two cash dividends, a reduction in non- VALUATION of the world’s largest jack-up vessels. essential capex and asset disposals. Bank of Scheduling is expected to be close to a America, BNP Paribas, Credit Agricole, Goldman Pay-TV provider CANAL+ POLSKA has set a price standard IPO timetable, with around two weeks Sachs, JP Morgan and Societe Generale have range of Z46–Z60 for its Z994m–Z1.29bn for pre-marketing and bookbuilding each, provided a volume underwrite for the (US$255m–$333m) all-secondary Warsaw putting the launch of bookbuilding around rights issue. IPO, with books open from November 4 to 9 November 19 and pricing around December 3. However, the deal has been criticised by and trading on a distant November 23. Swire said that the listing is still subject to a shareholder group called Refocus that Canal+ Polska, which had 2.7m approval from the Oslo Stock Exchange and includes former CEO and chairman of subscribers at of June 30, will have a market the Norwegian Financial Supervisory Unibail Leon Bressler and French CAPûOFûUPûTOû:BNûANDûAûFREE mOATûOFûUPûTOû Authority. technology entrepreneur Xavier Niel via 49%. There is no greenshoe. Swire previously said that it intends to his investment vehicle NJJ Holding. The The selling shareholders are Discovery’s REMAINûAûSIGNIlCANTûSHAREHOLDERûFOLLOWINGû group holds 5% of URW. 46.û-EDIAûANDû,IBERTYû'LOBALû6ENTURESû the spin-off. It has been granted a waiver Refocus has rejected the need for the Holding, with majority owner Vivendi not from distributing Cadeler shares to its own rights issue, suggesting that URW’s SELLINGûINûTHEûmOATû!BOUTûMûSHARESûAREû shareholders or giving them a preferred problems began with the acquisition of on offer, 14.1m from TVN and 7.5m from application in the IPO. 7ESTlELDûINûûASûITûhPOLLUTEDû527Sû Liberty. DNB and SpareBank 1 Markets are dominant position in Europe with a more A retail offer for up to 10% of the IPO runs bookrunners. marginal position in the US”, according to over the same period, with pricing on the Refocus campaign website. Refocus November 10. HUSCOMPAGNIET COVERED ON FIRST DAY said that it has been left more vulnerable The key peer is Cyfrowy Polsat, the OF BOOKBUILDING as a result after Covid-19. country’s largest pay-TV operator that trades Refocus said that URW’s €24bn debt pile at a 3.4% dividend yield versus the range for Homebuilder HUSCOMPAGNIET‘s IPO was is not a near-term liquidity issue and there Canal+ Polska of 5.6%–7.3% on consensus for covered on the full deal size including are substantial buffers, and the company is estimated 2021. greenshoe within two hours of books able to service its bonds, which have long #ANAL û0OLSKAûlRST HALFûREVENUESûWEREû opening on Friday for a DKr1.1bn– maturities. Targeting a higher credit rating Z1.19bn, up from Z1.11bn a year earlier, DKr1.25bn (US$175.3m–$199m) by raising cash is not seen as a strategy by WITHû%BITûOFû:MûVERSUSû:Mû!ûlRSTû ALL SECONDARYû.ASDAQû#OPENHAGENûmOATû itself and “does not justify the devastating dividend for full-year 2020 is targeted at 75% The base deal comprises 9.6m shares on consequences for shareholders of the OFûADJUSTEDûNETûPROlT offer at DKr112–DKr130 and there is a 15% rights issue”. Bank of America and JP Morgan are global greenshoe. Refocus proposes disposing of URW’s US coordinators, and bookrunners with Some anchor orders are already in the portfolio, with proceeds eliminating some Santander Bank Polska. book, a banker involved said. of the debt and giving time to address Pricing is 8.7 times to 9.7 times Ebita for liquidity issues without a rights issue. It EMEA EQUITIES 2021. also wants to add three new members to BOOKRUNNERS: 1/1/2020 TO DATE The seller is current owner EQT. In July the supervisory board to improve Managing No of Total Share 2015 the listed Nordic private equity house governance. The plan is expected to take bank or group issues US$(m) (%) bought the business for an undisclosed sum two to three years. 1 Morgan Stanley 53 12,729.93 8.9 from Denmark’s FSN Capital. California Public Employees’ Retirement 2 Goldman Sachs 61 11,470.66 8.0 The IPO will leave HusCompagniet with a System and Florida State Board of 3 JP Morgan 81 11,427.20 8.0 FREE mOATûOFû ûRISINGûTOûûINCLUDINGû Administration said on Wednesday that 4 Citigroup 59 10,608.83 7.4 the greenshoe. they will support the Refocus plan at the 5 Bank of America 53 10,341.87 7.2 !ûlNALûPRICEûISûEXPECTEDûONû.OVEMBERû û %'-ûONû.OVEMBERû 6 Credit Suisse 42 7,985.30 5.6 with trading due to begin on November 20. The rebel group had previously found 7 Barclays 46 6,757.05 4.7 Citigroup, Danske Bank and Nordea are support from proxy adviser ISS, which said 8 BNP Paribas 37 4,455.27 3.1 bookrunners. Rothschild is advising. there was no pressing need for the rights 9 UBS 26 4,372.45 3.1 HusCompagniet builds houses in issue and that shareholders should support 10 HSBC 30 4,240.59 3.0 Denmark and Sweden, with the geographies the Refocus nominations to the board, Total 906 143,336.26

accounting for about 94% and 6% of 2019 which could then reassess the company’s Including all domestic and international deals and rights issues revenues respectively. funding needs and options. Source: Refinitiv SDC code: C4cr

International Financing Review November 7 2020 61

9 IFR Equities and SE 2358 p57-69.indd 61 06/11/2020 20:34:04 Ozon began as an online bookseller in û3ISTEMAûANDû-43ûINVESTEDû53MûINû Attention turns to 2021 IPOs 2014 for a 20% stake. A further US$92m investment round followed in 2018 when „ EUROPE Pipeline for next year includes delays from 2020 and high-growth Ozon introduced an online marketplace. companies accelerating towards issues The number of merchants on the marketplace doubled in 2020, when the European equity capital markets were expectedly Logistics companies and last-mile warehouses company also launched its logistics quiet if not entirely shut last week as a result are also potential candidates. management platform. of the US presidential election; not entirely Bankers said that the desire for liquidity Sistema’s majority owner Vladimir surprisingly it took the rest of the week to have a remains, but not necessarily any desire for bigger Evtishenkov said in July that Amazon and clear result on who will take the presidency. IPOs, although there are said to be more large SoftBank had approached Sistema about a There are as a result only a few IPOs in the deals than is typical in the US$1bn-plus category, possible acquisition of Ozon. Around the same market. Danish homebuilder HUSCOMPAGNIET‘s up such as VODAFONE TOWERS‘ €3bn–€4bn IPO time Sberbank was reported to be interesting to DKr1.25bn (US$200m) Copenhagen float and expected in early 2021. in buying a large stake in the marketplace. CANAL+ POLSKA‘s US$255m–$333m Warsaw tilt “Liquidity is one of the major issues for According to the company’s website, in are bookbuilding, and ROUND HILL MUSIC ROYALTY investors, but it’s not necessarily large floats that Q2 2020, Ozon’s gross merchandise value FUND and MAILBOX REIT are due to complete they want; the emphasis is more on liquidity on rose by 188%, its fastest pace in 15 years, and listings. Russian e-commerce business OZON has growth assets. If you have growth, and if you can WASûUPûûINûTHEûlRSTûHALF also filed for a US listing, but with no indication add a hot sector like tech, those deals tend to be on timing. very sticky,” said the first US head. Beyond those the rest of the year is expected Polish online retailer Allegro and Kazakh SAUDI ARABIA to be quiet for listings, with the bulge bracket fintech company Kaspi fit that category and were banks now focused on the 2021 pipeline. an interesting test of the tension between hot ZAIN REPORTS 86.76% TAKE-UP FOR “I can’t see anything of note happening before sector and emerging market product. One banker SR4.5bn RIGHTS ISSUE the end of the year and nothing more from us, suggested their success shows more investors are but we are very busy currently on early look willing to buy EM offerings, but another felt it was -OBILEûTELECOMSûBUSINESSûZAIN SAUDI ARABIA meetings and deep dives for the 2021 pipeline,” purely the sector overriding EM concerns. has reported 86.76% shareholder take-up for said the head of syndicate at a US bank. “Payments and e-commerce are so well its SR4.5bn (US$1.2bn) capital increase. Another head of syndicate at a US bank said accepted and understandable; investors know There were acceptances for 390.44m out that he had more than 20 names on his IPO how Amazon works, so the EM aspect becomes of the 450m shares offered at SR10 each, schedule for the first half. Some of that is the less important as it’s relatively easy to be able representing take-up of SR3.9bn. The rights backlog from deals that were not able to get to model the local aspect,” said the second issue represents a doubling of the done this year due to the coronavirus pandemic. syndicate head. outstanding shares. As is typical, not all of that is likely to get done Since the summer 27 IPOs of more than The remaining 59.56m shares were but the backlog means that about two-thirds are US$50m have raised nearly US$11bn for issuers offered to institutional investors on Tuesday expected to reach the market. from 12 countries, including rare spots for IPO and Wednesday with no result by Thursday’s Growth, as ever, is high on the list of investor activity such as Lithuania with Ignitis Grupe and close. demands, along with yield, and there are some Kazakhstan with Kaspi. Norway was the most The capital increase was approved at an companies being fast-tracked for an IPO next active market with Sweden and Germany just /CTOBERû%'- ûWITHûSHAREHOLDERSû year. behind. representing 56.55% of share capital voting “There are some assets that are pretty growth- A senior ECM banker at a European bank said in favour. based that can come to market faster,” said the that the read-across from post-summer pricings The transaction is underwritten by lead second US bank syndicate head. “As we saw in was that larger, high-quality companies have managers Saudi Fransi Capital, Arab National the bonanza IPO year of 2014, we are seeing global appeal and strong demand. Investment Bank, Al Rajhi Capital, Aljazira some companies accelerating through their life “It’s harder to draw a pattern from the smaller Capital, Alinma Investment and Riyad Capital. cycle in the private phase and some of those may deals, especially as performance has been so The stock stayed above SR13 throughout come sooner than would typically be expected.” patchy,” he said. “With some, you do wonder the subscription period, hitting a closing E-commerce and digital platforms and work- how they got done and whether, in other years, high for the year of SR15.10 during from-home services are expected to be a strong they would have been pulled. There is a lot of subscription, a level last seen in late 2014. theme in 2021. Likely floats include German used positivity for next year, but the recent aftermarket car online marketplace AUTO1, which is expected performance has not been very helpful.” to be valued at around €5bn, and a London As of Wednesday, 12 post-summer floats were SWEDEN IPO of DELIVEROO, likely to come with a £2bn trading below water. valuation. Robert Venes NORDNET TO FLOAT IN STOCKHOLM

NORDNET‘s private equity owners plan to list interest from the US retailing giant earlier the Nordic digital bank in Stockholm in an RUSSIA THISûYEAR ûHASûlLEDûFORûANû!$3û)0/ûONû all-secondary IPO that could raise upwards Nasdaq, with Morgan Stanley and Goldman of US$1bn. OZON FILES FOR AROUND US$500m Sachs as joint lead bookrunners. Citigroup, Pre-marketing launched last Thursday, US IPO UBS, Sberbank and VTB are joint bookrunners, with the timetable left open for the all- with Renaissance Capital as co-lead manager. virtual process. E-commerce business OZON, often described A deal size in the region of US$500m is The sellers are Ohman Group and Nordic as Russia’s Amazon and the subject of expected, according to a banker involved. Capital, which have stakes of around 55%

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and 40%, respectively. Nordnet board has managed 116 investments into solar “Having restructured the business and members and employees hold the parks, wind farms and hydroelectric plants transitioned to more than 90% of revenues remainder. since 2010. from digital, we now see a clear Carnegie, Citigroup, and JP Morgan are global N+1 Singer is bookrunner. opportunity to capitalise on various coordinators, with ABG Sundal Collier, industry drivers, not least the increasing Berenberg, DNB Markets and SEB as BYTES TECHNOLOGY PLANS LONDON IPO trend towards online retail, and further bookrunners. STJ Advisors is advising. improve our customer proposition,” CEO “We already have extremely broad UK software, security and cloud services Steve Johnson said in a statement. interest,” one banker involved said. “The company BYTES TECHNOLOGY GROUP is planning Results released on Thursday for the six investment case is very easy to understand a London listing and secondary line in months to August 29, termed H1 2021 by N and they have done really well during 2020, Johannesburg. "ROWN ûSHOWEDûAûSIGNIlCANTûDROPûINûSALESû converting a lot of new customers that will The company will be demerged from ANDûPROlTSûALTHOUGHûTHEREûWEREûSOMEû be there for a long time. There is a lot of listed South African technology group Allied positives. Product revenues fell nearly 29% digitisation across the world and they have Electronics (Altron), which announced the INûTHEûlRSTûQUARTER ûBUTûONLYûûINûTHEû solid long-term growth.” planned demerger and separate listing on SECONDûQUARTERû!DJUSTEDûPROlTûFELLûBYû .ORDNETûREACHEDûMûCUSTOMERSûINû-ARCH û April 2. £9.2m to £22.6m, including a £17m Covid- doubling its customer base since 2016. As of Upon admission, Bytes expects to have a 19 bad debt provision in anticipation of September30, Nordnet had SKr477.8bn distributed shareholder base comprising at defaults. (US$55bn) in savings capital and total least 36% as new investors. The balance will The company is introducing medium- OPERATINGûINCOMEûINûTHEûlRSTûNINEûMONTHSûOFû held by Bytes management and Altron term targets on the back of the fundraising the year was SKr1.91bn. The company shareholders, with Altron itself exiting the of 7% organic growth per year and a 14% intends to pay an annual dividend of at least stock. Ebitda margin. ûOFûITSûPROlTSûFORûTHEûYEAR Bytes had nearly 5,000 customers in the Approximately £77m of proceeds will be The key comp is Swedish bank Avanza, year to the end of February across the used to repay a revolving credit facility and which trades at roughly 30x–32x P/E 2021. private and public sectors, and reported coronavirus Large Business Interruption Other comps include the UK’s AJ Bell and GROSSûPROlTûOFûaM ûUPûûFROMûû Loan Scheme. On August 29 group net debt Hargreaves Lansdown. and from £12.6m in 2010. was £411.1m. N Brown’s lenders have The company was previously listed in Altron shareholders will vote on the agreed to extend the maturity of secured Stockholm from 1999 until 2016 when it demerger on December 1. and unsecured facilities on revised terms. was acquired by Ohman Group and Nordic Post-IPO the company expects to be N Brown shares have dropped more than Capital. eligible for inclusion in UK FTSE indices. 60% in 2020 as of the Wednesday close. The The two selling shareholders are locked Numis is sole bookrunner. shares closed down more than 5% at 55.3p up for 180 days, while board members and on Thursday. management are locked up for 365 days. ALLIANCE FAMILY BACKS £100m Jefferies is global coordinator and joint FUNDRAISE FOR RETAILER N BROWN sponsor with Rothschild, and Jefferies and Shore Capital are joint corporate brokers. UK The Alliance family has stepped in to 2OTHSCHILDûISûlNANCIALûADVISERûANDû3HOREû guarantee a £100m fundraising by online #APITALûISûNOMINATEDûADVISERûFORûTHEû!)-û DOWNING RENEWABLES & clothing and homeware company N BROWN listing. INFRASTRUCTURE TRUST PLANS IPO that represents a capital increase of more than 60%. ACCROL RAISES £38.5m FOR TISSUE DOWNING RENEWABLES & INFRASTRUCTURE TRUST is The retailer, which caters to older ACQUISITION PLANNINGûTOûmOATûINû,ONDONûBYûMID customers, is raising money to eliminate December and is targeting up to £200m via secure debt and is also moving from the ACCROL GROUP, which manufactures toilet a placing, offer for subscription and an MAINûMARKETûTOû!)-ûINû,ONDON rolls, kitchen towels and facial tissues, has intermediaries offer. David Alliance, who was chairman of the raised £38.5m to back its purchase of Cornerstone investments of £30m have company for 44 years until 2012 and Leicester Tissue Company. BEENûSECUREDûANDûPRICINGûWILLûBEûlXEDûATû remains the largest shareholder, has Its shareholders have the chance to 100p per share. committed with his son Joshua to buy all subscribe for an additional £4.1m of shares Downing and funds managed by Downing 174.67m shares, representing 61.1% of share in an open offer, and there was secondary will invest £20m and £10m of commitments CAPITAL ûATûPû0RICINGûISûmATûTOûTHEûlVE DAYû selling totalling £2.8m. have been secured under a letter of intent closing average and a 3.4% discount to the Accrol announced the LTC acquisition on from Downing clients. 59p Wednesday close. -ONDAYûFORûANûENTERPRISEûVALUEûOFûaMû The fresh cash will be invested in a David Alliance has a pre-money with an initial payment of £35m and £6.8m portfolio of renewable energy assets shareholding of 33.81% and his son has an deferred until 2021, contingent on including wind, solar, hydro and geothermal 11.02% stake. They are not receiving any fees performance criteria being met. The and also with other infrastructure assets in for guaranteeing the fundraising. additional funds will be paid if LTC achieves the UK, Ireland and Northern Europe. Other shareholders can claw shares back an up to £3.1m incremental Ebitda Proceeds will be substantially invested or through an 11-for-18 open offer at the same contribution on revenue generated from committed within a year. price from November 6–December 14, with certain new contracts in the second quarter )TûHASûALREADYûIDENTIlEDûAûSEEDûPORTFOLIOû a result on December 15. There is also an of 2021. WORTHûaM ûANDûAûSIGNIlCANTûPIPELINEûOFû excess subscription facility. Shareholders The acquisition will increase Accrol’s assets with a value of more than £1.5bn. WILLûVOTEûONûTHEûFUNDRAISINGûATûANû%'-ûONû share of the UK retail tissue market to )TûISûNOTû$OWNINGSûlRSTûFORAYûINTOû .OVEMBERûû)TSûSHARESûWILLûTRADEûONû!)-û approximately 16% of what is estimated to renewables. The trust’s investment manager from December 23. be a £1.7bn UK industry.

International Financing Review November 7 2020 63

9 IFR Equities and SE 2358 p57-69.indd 63 06/11/2020 20:34:04 A placing comprising 87.5m primary It will use the cash to strengthen its Books are open for sub-underwriting from shares, representing 44.8% of pre-money share balance sheet amid ongoing disruption due Friday, and the record date is November 20. capital, was priced at 44p per share, a 1.1% to coronavirus lockdown measures. A result is due on December 10, alongside DISCOUNTûTOû-ONDAYSûPûCLOSE ûWITHûTAKE UPû A total of 76.7m shares were conditionally any rump placement. from both new and existing investors. Accrol placed with institutional investors at 90p A total of 125.7m shares are on offer on a shares began the year at 31p. each, and a further 1m were placed through 7-for-9 basis at £22.55 each, representing a To capture excess demand, management the PrimaryBid app at the same price. 32.2% discount to TERP of £33.28. exercised options to sell stock and 6.45m Over half was snapped up by the Aveva will be locked up for 180 days. The shares were sold for £2.8m. COMPANYSûMAINûSHAREHOLDERû-ALAYSIANû rights issue is conditional on a vote at a Shareholders can also participate through banking group Hong Leong, which poured general meeting on November 24 2020. an up to 9.29m open offer on a 1-for-21 basis, in £39.3m. Aveva announced its plans to buy OSIsoft also at 44p. The open offer is additional to Pricing of 90p came at a 4.3% premium to at the end of August. OSIsoft makes software the placing, which is not subject to Thursday’s close of 86.30p per share. that captures data from ships, chemical clawback, with proceeds providing working Shares in the company, which owns boilers, power plants and other facilities in capital and strengthening the balance sheet. -ECCA û'ROSVENORû#ASINOSûANDû%NRACHA ûSHOTû industries, including oil and gas, mining, 3CHRODERû)NVESTMENTû-ANAGEMENTû up on Friday following the capital increase, pulp and paper, and water. acquired 10.89m shares, in line with its and were 9.4% higher by 2pm in London. Around 12% of the acquisition price will 12.45% shareholding. The capital increase amounted to 19.99% be paid in newly issued ordinary shares to The open offer runs until November 19, of the company. Estudillo, which owns 50.3% in OSIsoft. The with shareholders voting on the fundraising The fundraising is conditional on a vote at remaining US$4.4bn will be paid in cash, ATûAû.OVEMBERûû%'- a general meeting set for November 23. with US$3.5bn coming from the rights issue The equity raising is not underwritten, If it successfully completes, The Rank and US$900m from cash on the balance with Zeus Capital and Liberum Capital as Group’s lending banks have agreed to sheet and new debt facilities for a pro forma bookrunners. extend the company’s £50m minimum net leverage of 1.9 times Ebitda in the Accrol shares closed up 2.25% at 45.5p on LIQUIDITYûTESTûUNTILû-ARCHûû enlarged group. Tuesday. The fresh cash will allow the company to SoftBank has a 44.7% stake in OSIsoft, maintain appropriate liquidity covenant WITHû-ITSUIûHOLDINGûTHEûBALANCEûOFû SYNAIRGEN RAISES £87m FOR COVID-19 headroom on its debt facilities under various After Aveva acquires OSIsoft, the DRUG TRIAL trading scenarios, provide ample working combined business will have pro forma capital to operate through this challenging revenue of £1.2bn. Shareholders in respiratory drug company trading environment, and enable it to SYNAIRGEN fully backed a 1-for-37 open offer continue its “transformation 2.0 programme”. to take the company’s fundraising to £87m 6ENUESûWEREûCLOSEDûFROMûLATEû-ARCHûû for clinical trials of its Covid-19 drug. until July/August 2020 during coronavirus Synairgen had already raised £80m from a lockdowns. AMERICAS M SHAREûlRMûPLACINGûANDûAû The group’s like-for-like net gaming 30.77m-share conditional placing, both at revenue was down 52% for the quarter 175p each, a 4.1% discount to the 10-day ended September 30 2020. UNITED STATES VWAP prior to launch. The introduction of a 10pm curfew for A further 4m shares were offered to venues in England in late September heavily US ECM GETS UNEXPECTED ELECTION shareholders on a 1-for-37 basis with full impacted on the group’s Grosvenor TAILWIND take-up. business, which usually generates half of its Proceeds will part-fund Phase III trials of NETûGAMINGûREVENUEûAFTERûPMû)TSû-ECCAû Buoyed by a surprise post-election Synairgen’s SNG001 drug on approximately Bingo clubs were not as heavily impacted by STOCKMARKETûRALLY û53û%#-ûBANKERSûWILLûTRYû 900 Covid-19 patients across 20 countries, as the curfew. to put ongoing political uncertainty behind WELLûlNANCINGûMANUFACTURINGûANDûDEVICEû them by stepping up the pace of dealmaking scale-up. AVEVA LAUNCHES £2.8bn ACQUISITION in the coming week. Synairgen stock was trading at 36p in RIGHTS ISSUE Though the full market and policy mid-July before soaring to 248p by mid- implications of Tuesday’s presidential vote – August on news of promising Phase II UK software company AVEVA GROUP has including a likely (if contested) Biden victory results for SNG001. The shares were trading launched a fully underwritten £2.835bn and a potentially divided Congress – are still at 202p at the start of the open offer period RIGHTSûISSUEûTOûPART lNANCEûITSû53BNû to play out, capital markets remain open for BUTûHADûDROPPEDûTOûPûBYûTHEûlNISH acquisition of SoftBank-backed OSIsoft. business and ready to absorb an end-of-year 4HEûSTOCKûCLOSEDûATûPûONû-ONDAY ûAû JP Morgan and Numis are joint global deal push. level not seen since 2004 before this year’s coordinators, with Barclays and BNP Paribas With the launch of REIT ASPIRE REAL ESTATE jump. as joint bookrunners and Santander as lead INVESTORS‘ US$300m NYSE IPO on Friday and Finncap and Numis were bookrunners. manager. Thursday’s launch of the US$80m Nasdaq The joint global co-ordinators are being IPO of biotech IN8BIO, two IPOs are fronting THE RANK GROUP RAISES £70m IN paid 30bp for the underwritten portion of investors in the coming week. IN8bio looks PREMIUM-PRICED ABB the deal, while there is also a 180bp SETûTOûBEûTHEûlRSTûPOST ELECTIONûPRICINGûWHENû underwriting fee. it prices on November 11, while Aspire is UK casino operator THE RANK GROUP has Schneider Electric, which indirectly holds SLATEDûFORûTHEûFOLLOWINGû-ONDAYû.OVEMBERû conditionally raised £70m through a about 60% of Aveva, has irrevocably 16). Thursday evening ABB run by Goodbody and undertaken to vote in favour of the deal and They are likely to be joined by more Peel Hunt. to take up its rights in full. launches early this week (SOUTHEASTERN

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GROCERS and COMPASS THERAPEUTICS are two -ANAGEMENTûNOWûEXPECTSûTOûREDUCEûNETû shareholders received for Llamasoft in possibilities) as a small number of issuers leverage to four times by year-end from 5.8 addition to US$795m of cash. look to price before Thanksgiving, though times post-IPO and 4.6 times at the end of Coupa, which also sold a US$1.38bn six- December looks likely to be more active. To 2019. year CB in June, has been a serial acquirer that end, the coming week’s biggest event this year as it has looked to enhance its COULDûBEûAûPOTENTIALû)0/ûlLINGûFROMûVACATIONû THOMA BRAVO SKATES OUT OF ICE business spend management software rental unicorn AIRBNBûREVEALINGûITSûlNANCIALSû offering, having also purchased Bellin AHEADûOFûAûPOSSIBLEûDEBUTûINûTHEûlNALûMONTHû Under the shadow of a contested US Treasury International (Treasury services), of the year. PRESIDENTIALûELECTION ûPRIVATEûEQUITYûlRMû ConnXus (supply chain management) and 7ITHûNEARLYûûOFû30ûûCOMPANIESû Thoma Bravo proved equity capital markets Yapta (travel expense management) this year. now having reported third-quarter earnings, remain wide open by disposing of its The former Llamasoft owners missed out secondary issuance could play a more remaining stake in INTERCONTINENTAL EXCHANGE on a handy 3.3% bounce in Coupa shares to dominant role in the next few weeks. via a US$900m block trade late Wednesday. US$255.55 in Tuesday’s aftermarket and a Even with the extreme election Though Goldman Sachs handled Thoma 12.8% rally to US$311.48 in Thursday’s uncertainty of the past week, banks were "RAVOSûlRSTû)#%ûSELL DOWNûINû3EPTEMBER ûITû session after the company struck a deal to able to price US$3.3bn of follow-on offerings was Morgan Stanley that took charge of provide its software to Walmart. led by a US$1.8bn sponsor sell-down of cleaning up the rest of the holding. shares in laboratory supplier AVANTOR. The bank reoffered 9.18m ICE shares at VITRUVIAN CLEARS BANDWIDTH STAKE US$98.00, the top of the US$97.70–$98.00 AVANTOR BACKERS EXTRACT US$1.8bn range and a slim discount of 0.4%. ,ONDON BASEDûINVESTMENTûlRMû6ITRUVIANû HAUL ON SELLDOWN The offering was well anticipated by 0ARTNERSûWASTEDûLITTLEûTIMEûOFmOADINGûAû investors and oversubscribed, one banker US$100.8m stake in BANDWIDTH after taking AVANTOR, a lab equipment supplier that went close to the deal said. shares in the communications software PUBLICûINû-AYû ûSAWûITSûFORMERûBACKERSû While the block was large in dollar terms, company as part-payment for last month’s cash in a sizeable US$1.81bn slug in a it represented only 1.6% of ICE. US$500m sale of IP telephony network marketed follow-on last Thursday. h)TûWASûVERYûMUCHûSITUATION SPECIlCûANDû Voxbone. Goldman Sachs and JP Morgan placed 71.6m )#%ûISûALSOûAûBENElCIARYûOFûALLûTHEûVOLATILITYû Morgan Stanley was sole bookrunner on the shares at US$25.25, a thin 0.5% discount to RECENTLY vûANOTHERû%#-ûBANKERûSAIDû overnight sale of 663,394 Bandwidth shares LASTûSALEûANDûAûûlLE TO OFFERûPREMIUMû In early September, Thoma Bravo sold or 3% of the company at US$152.00, the The banks, which bumped the offering size mortgage processing software company bottom of the US$152–$153 range and a from the 71.3m shares marketed on %LLIEû-AEûTOû)#%ûFORû53BNûINûCASHûANDû ûDISCOUNTûTOûLASTûSALEû4HEûlRMûCOLLECTEDû Thursday, hold a greenshoe option on 18.4m shares worth US$1.9bn at the time. a US$1.50 a share underwriting spread, another 7.2m shares. Thoma Bravo paid only US$3.7bn for Ellie equating to a fee of nearly US$1m. Avantor shares traded early Friday at -AEûINûEARLYû In a deal that closed on October 31, US$26.19. 4HEû3EPTEMBERûOFFERINGûSAWûTHEûlRMû Vitruvian collected the bulk of €338m Assuming that greenshoe is fully dispose of half of those shares at US$100.20 (US$400m) of cash and €108m worth of exercised, the selling shareholders will have each, the stock then falling back to Bandwidth shares as consideration for the whittled their residual Avantor stake to just US$92.41 before rebounding ahead of the sale of Voxbone. The deal added US$85m of 11%, setting the stage for a clean-up trade latest sale. revenue for Bandwidth (based on Voxbone’s early next year on expiry of lock-up Only last month, Thoma Bravo was able to forecast 2020 sales). agreements. PARLAYûITSûSUCCESSFULû%LLIEû-AEûMONETISATIONû Despite trading down to US$149.50 in the .EWû-OUNTAINû#APITALûM ûANDû into a US$22.8bn fundraising for three new early going, Bandwidth shares ended Goldman Sachs (14.7m), the top sellers, funds. Tuesday’s aftermarket session at US$157.45 reduced their stakes to just 5% and 3%, or well above the offering price. Still, RESPECTIVELYû.EWû-OUNTAINûISûLOCKEDûUPûFORû LLAMASOFT SELLERS CHECK OUT Vitruvian may have been too hasty in selling 180 days and Goldman Sachs, along with OF COUPA since Bandwidth shares surged to US$165.63 other selling shareholders, for 60 days. by Thursday’s close. This is just the third time the PE 3UPPLYûCHAINûDATAûSOFTWAREûlRMû,LAMASOFTSû consortium has sold stock in a public lNANCIALûSPONSORSûMOVEDûLATEûONû-ONDAYûTOû US EQUITIES offering since Avantor’s IPO, the most quickly sell US$515.8m of COUPA SOFTWARE BOOKRUNNERS: 1/1/2020 TO DATE recent being a 55.5m share offering at stock taken as part of the consideration for Managing No of Total Share US$18.20 in August, also via Goldman Sachs the US$1.5bn sale of the business bank or group issues US$(m) (%) ANDû*0û-ORGAN announced earlier that day. 1 Goldman Sachs 174 31,599.68 14.3 Avantor saw pushback on its IPO over Sole bookrunner Goldman Sachs reoffered 2 Morgan Stanley 152 27,305.88 12.4 high debt leverage, resulting in a below- 2.15m Coupa shares or 3% of outstanding in 3 JP Morgan 173 26,144.84 11.8 range US$14 pricing on the US$3.3bn IPO a block trade priced at US$240.00, the 4 Bank of America 179 23,817.55 10.8 ANDûTHEûINCLUSIONûOFûAû53BNû-#"ûTOûASSISTû middle of the US$238.00–$243.00 marketing 5 Citigroup 100 16,753.85 7.6 in targeted debt reduction goals. RANGEûANDûAûûlLE TO OFFERûDISCOUNT 6 Barclays 88 13,374.64 6.1 Avantor, which completed a €650m bond 4HEûOFFERINGûSAWûPRIVATEûEQUITYûlRMû40'û 7 Credit Suisse 77 10,161.52 4.6 sale late last month, is now ahead of Capital sell 1.6m Coupa shares, the principal 8 Jefferies 104 6,309.53 2.9 schedule in its leverage reduction goals investments group of Goldman Sachs 9 Cowen 90 5,841.23 2.6 following strong quarterly earnings.  ûSHARESûANDû-+û#APITALû-ANAGEMENTû 10 Evercore Partners 50 5,298.17 2.4 In the third quarter, Avantor reported a 105,495 shares. Total 742 220,646.51

ûYEAR OVER YEARûINCREASEûINûFREEûCASHmOWû The shares sold represent the bulk of Including all domestic and international deals and rights issues to US$266.2m on revenue of US$1.6bn. 2.4m Coupa shares they and other Source: Refinitiv SDC code: C3r

International Financing Review November 7 2020 65

9 IFR Equities and SE 2358 p57-69.indd 65 06/11/2020 20:34:05 Bandwidth went public in late 2017 at launched an up to US$80m Nasdaq IPO, the -ARAVAI ûWHICHû'4#2ûINITIALLYûSTAKEDûWITHû US$20.00 a share, at which point the largest lRSTûDEALûTOûSTUFFûINTOûTHEûPOST ELECTIONûTOû US$300m, has grown through acquisitions non-management holder was former FCC pre-Thanksgiving Day window. of TriLink Biotechnologies, Glen Research, CHAIRMANû+EVINû-ARTINSû#ARMICHAELû Barclays, Cantor and Mizuho are leading the Cygnus Technologies, Vector Laboratories Partners. sale of 4.69m shares at US$15–$17 each for ANDû-OCK6û 4HEûCOMPANYûLASTûPRICEDûANû%#-ûDEALûINû pricing this Wednesday, November 11. -ARCHûLASTûYEARûWHENûITûRAISEDû53MûATû The banks have already conducted pilot MIDWEST GOES FOR NASDAQ LISTING US$54.25 a share, though that was an all- lSHING ûGENERATINGûSOLIDûDEMANDûFROMû primary exercise. investors that participated. ,IFEûINSURANCEûANDûlXEDûANNUITYûPROVIDERû Even by biotech standards, IN8bio is early- MIDWEST HOLDINGûlLEDûLASTûWEEKûFORûAû FORMER VIOLIN MEMORY EXECS PAY UP stage, both in terms of its drug development US$50m IPO to shift its listing from the ON US$220m SPAC IPO ANDûITSûlNANCINGûHISTORY over-the-counter markets to Nasdaq. Piper It closed a US$25.3m Series A round in Sandler is the sole bookrunner Donald Basile and Dixon Doll, the CEO and August, so the IPO is more of an ask than the -IDWESTSû/4# LISTEDûSHARESûFELLûûTOû #//ûOFûBANKRUPTûmASHûMEMORYûPROVIDERû typical late-stage crossover to public 53ûAFTERûTHEûlLINGûAPPEAREDûONû 6IOLINû-EMORY ûAREûTAKINGûANOTHERûSTABûATû funding. Wednesday, though on volume of just 100 public markets as the principal backers of IN8bio, which changed its name from shares. THEû53M û4-4 FOCUSEDûROMAN DBDR TECH Incysus Therapeutics in conjunction with In August, the insurer consolidated ACQUISITION. the Series A round, would emerge with ownership by completing a 500-for-one B. Riley Securities launched marketing on a more than US$90m of cash to fund Phase I reverse stock split. revised offering on Thursday morning, trials of the two lead drug candidates. Using an online distribution platform, setting a US$220m funding target from the IN8bio alludes to the innate power of -IDWESTûSELLSûANNUITIESûANDûLIFEûINSURANCEû sale of 22m units at US$10.00 structured as T-cell cancer therapies to kill tumours. It UNDERûTHEû!MERICANû,IFEûû3ECURITY û one share and one-half warrant with a goal expects to complete a Phase I trial for its Seneca RE and 1505 Capital brands of pricing that night. The target was down autologous cell therapy next year and a THROUGHûINDEPENDENTûlNANCIALûPLANNERS FROMûTHEû53MûSUMûORIGINALLYûlLED second Phase I trial using allogenic cell )NûTHEûlRSTûHALFûOFûTHEûYEAR ûITûPOSTEDûAû Four institutions anchored the revised therapy in 2022. NETûPROlTûOFû53MûONûREVENUESûOFû deal with a combined US$21.8m Autologous cell therapies are harvested US$11.9m. commitment. from a patients’ own T-cells and allogenic In addition to the size reduction, Roman ones are mass produced from donor T-cells. MP ENDS FLAGSTAR INVESTMENT DBDR hiked the trust proceeds from 100% to If the drugs are proven to be safe, IN8bio 102% and compressed the investment expects to use the data from both studies to Morgan Stanley late on Thursday priced a horizon from 24 months to 18 months. launch trials on a third line of genetically US$278.8m block sale of shares in Troy, That means investors can redeem at MODIlEDû4 CELLûTHERAPIESûINû -ICHIGAN BASEDûFLAGSTAR BANCORP on behalf US$10.20 plus interest in 18 months, about OFûLONG TERMûBACKERû-ATLIN0ATTERSON as investor-friendly as a SPAC IPO can be. MARAVAI IPO A COVID-19 DERIVATIVE )Nû-ORGANû3TANLEYSûSECONDûCLEAN UPû Doll and Basile, who was forced out at PLAY trade in as many days, the bank reoffered Violin in December 2013 just three months 9.11m Flagstar shares or about 16% of after its IPO and after losing major customer In what is likely to be one of the more outstanding at US$30.60, inside the Hewlett-Packard, are footing the bill by interesting IPOs late in the year, MARAVAI US$30.50–$30.75 marketing range and a investing US$10.375m by buying 10.375m LIFESCIENCESûlLEDûDOCUMENTSûLATEûLASTûWEEKû 1.9% discount to last sale. “at-risk” warrants. for an offering nominally sized at US$100m, 4HISûREPRESENTEDûALLûOFû-ATLIN0ATTERSONSû B. Riley is collecting US$4.4m as an but likely to be much larger. remaining shares, the distressed securities upfront underwriting fee, with US$825,000 Morgan Stanley, Jefferies and Goldman Sachs fund manager having progressively cut its for offering expenses and US$750,000 is are joint bookrunners on a 14-strong stake via secondaries over recent years, being reserved for operating expenses, syndicate of banks. including via August’s sale of 6m shares at leaving US$224m in trust. 4HEûlLINGûTIMELINEûWOULDûALLOWû-ARAVAI û US$30.00 apiece. Basile and Doll will focus their search on WHICHûISûBACKEDûBYûPRIVATEûEQUITYûlRMû Flagstar has been a long hold for 4-4ûWITHûAûSPECIlCûCONCENTRATIONûONû GTCR, to publicly launch marketing on -ATLIN0ATTERSON ûWHICHûlRSTûINVESTEDû companies combining security, cloud November 16 for pricing ahead of the US$250m for a 70% stake during much computing and cloud data storage. November 26 Thanksgiving Day holiday. darker days for the banking industry in There are other signs of investor fatigue In addition to an US$88.6m dividend paid last 2008. on the periphery of SPAC land. MONTH û-ARAVAIûPLANSûONûUSINGûTHEûPROCEEDSû Plant-based food/beverage-focused from the IPO to purchase shares from GTCR. OLEMA TARGETS BREAST CANCER NATURAL ORDER ACQUISITION ANDûlNANCIALû -ARAVAISûPRINCIPALûPRODUCTSûAREûCHEMICALû WITH IPO services-focused KINGSWOOD ACQUISITIONûlLEDû reagents used to make innovative cell and amendments on Thursday to downsize the gene therapies, making it a derivative play OLEMA PHARMACEUTICALSûlLEDûDOCUMENTSûONû size of their offerings to US$200m and on development programmes of customers Friday for a US$100m all-primary IPO that US$100m respectively from the US$250m like BioNTech and CureVac. will fund development of a new type of ANDû53MûTARGETSûORIGINALLYûlLED Its “CleanCap” technology is used to protein degrader targeting breast cancer. stabilise mRNA vaccines. Protein-degrader biotechs have been a hot INNATE TIMING FOR BIOTECH IPO -ARAVAIûGENERATEDûAûNETûPROlTûOFû53Mû investment area following recent deals by ONûREVENUEûOFû53MûINûTHEûlRSTûNINEû C4 Therapeutics, up 30.2% since its offering Proving once again that biotech is a world months of the year. Nearly 40% of revenue in early October, and Kymera Therapeutics unto itself, cancer drug developer IN8BIO came from its mRNA products. up 81%.

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JP Morgan, Jefferies, Cowen and Canaccord Though Upstart may wait until after the of 3.75%–5.0%, though Aspire thinks Genuity are bookrunners on the Olema IPO. holiday, virtual marketing during Covid-19 renovations will amount to 0.5%–1.5% of Protein degradation has the potential to has seen IPOs priced after shorter-than- additional yield above the market rate. treat multiple forms of cancer caused by the normal roadshows. There is also the potential to grow the yield same protein mutation. Founded by former Google executives in ONCEûINCOMEûSTREAMSûBEGINûTOûmOWû /LEMASûLEADûDRUGûTARGETSûSPECIlCûPROTEINSû 2012 and backed by Third Point Ventures Aspire’s external managers Avanath and called oestrogen receptors that are prevalent and Rakuten, Upstart connects consumers -AC&ARLANEûEACHûOWNûLARGEûPORTFOLIOSûOFû in 75% of all breast cancers. to a network of bank partners and has multifamily housing assets, many located in Olema is coming to the public markets originated more than 620,000 personal designated opportunity zones. well funded, having completed an US$85m loans since inception. -ANAGEMENTûANDûPERFORMANCEûFEESûTIEDûTOû Series C round in September that included The company also services the loans after Aspire’s stock price would provide an incentive participation from crossover specialists origination. To further support loan for the managers to provide new investment "LACK2OCK û$EERlELDû-ANAGEMENT û*ANUSû ORIGINATION û5PSTARTûlNANCESûSOMEûLOANSûBYû opportunities. They would be entitled to collect (ENDERSON û#ORMORANTû!SSETû-ANAGEMENT û purchasing them from banks and either selling a 1.5% annual fee based on the share price and 7ELLINGTONû-ANAGEMENTûANDû2!û#APITAL them to third parties or securitising them. up to 20% of incentive fees once the stock clears The crossover round gave it US$127.8m to )NûTHEûlRSTûNINEûMONTHSûOFûTHISûYEAR û an 8% performance hurdle. fund an ongoing Phase I/II trial on its lead Upstart grew revenues 44% to US$146.7m, drug in patients with HER2-breast cancer. mostly from fees, and reported net income That trial launched in August with initial of US$5m. BRAZIL results expected in the second half of next Upstart’s last major funding round was a year. 53MûlNANCINGûATû53ûAûSHAREû MELIUZ, ENJOEI STRUGGLE ON completed in April last year led by VC-BACKED IPOS PETCO FILES CONFIDENTIALLY FOR IPO 0ROGRESSIVEû)NSURANCEûCHIEFûSTRATEGYûOFlCERû and former board member Andrew Quigg. MELIUZ, a VC-backed online coupon clipper, Though it may have run out of time to go and online thrift shopped ENJOEI highlighted public this year, sponsor-backed pet products ASPIRE MARKETS FOR IPO OPPORTUNITY that public investors are reluctant to retailer PETCO said in a statement late on underwrite growth given tepid reception to 4HURSDAYûTHATûITûHADûlLEDûCONlDENTIALLYûWITHû -ULTIFAMILYûHOUSINGû2%)4ûASPIRE REAL ESTATE their IPOs this week. the SEC for an upcoming IPO. INVESTORS launched marketing on a )NûTHEûCASEûOFû-ELIUZ ûItau, BTG Pactual, 0ETCOûDIDûNOTûELABORATE ûBUTûTHEûlLINGû US$300m NYSE IPO on Friday that would Bradesco and XP placed 52.2m shares, starts an SEC review process that positions MAKEûITûTHEûlRSTûOFûAûNEWûCLASSûOFûPUBLICLYû including 29.5m by secondary sellers, at the company for a potential IPO early next traded opportunity zone fund REITs to list R$10.00 apiece, the bottom of the R$10.00– year, though the public disclosure may also on a major US stock exchange. ûRANGEûANDûVALUINGû-ELIUZûATûJUSTû be a signal its owners are open to straight Joint bookrunners Morgan Stanley, B Riley, R$1.15bn (US$200m), tiny by any measure. sale as well. Wells Fargo, BMO Capital Markets and KeyBanc -ELIUZûBROKEûOFFERûONûITSû"ûDEBUTûONû CVC Capital Partners and Canada Pension Capital Markets are putting in a full eight-day Thursday to close at R$9.35. Plan purchased the company in a US$4.6bn roadshow for the marketing of 15m shares -ELIUZûISûBACKEDûBYû"RAZILIANû6#Sû-ONASHEES û secondary buyout from TPG Capital and ATû53ûlXEDûPRICINGûONû-ONDAY û Lumia Capital and Endeavor Catalyst. ,EONARDû'REENûû0ARTNERSûINû November 16. )NûTHEûlRSTûHALFûOFûTHEûYEAR ûTHEûCOMPANYû Reportedly they are hoping to take the !SPIREûISûEXTERNALLYûMANAGEDûBYûAFlLIATESû processed R$932m of gross merchandise company public at a US$6bn valuation OFû!VANATHû#APITALû-ANAGEMENTûANDû revenue over its platform, a 52% year-on- including debt, though the success of online -AC&ARLANEû0ARTNERS ûTWOûOFûTHEûLARGESTû year growth and translating to 60% growth pet retailer CHEWY (controlled by rival African American-owned real estate in gross revenue to R$62.2m. PETSMART) and pandemic impacts have companies in the US. Enjoei on Thursday sold 96.265m shares, 50.3m presented challenges that may cast some The external managers are contributing by the company and the remaining 45.9m by VC doubts as what price an IPO would fetch. US$10m to a concurrent US$30m private lRMSûANDûMANAGEMENT ûATû2 ûALSOûATûTHEû Petco has more than 1,500 stores across placement alongside accredited investors. bottom of the R$10.25–$13.75 range marketed. THEû53 û-EXICOûANDû0UERTOû2ICO ûINCLUDINGû !SPIREûISûPOTENTIALLYûTHEûlRSTûPUBLICLYû Bessemer Venture Partners was the top more than 100 in-store veterinary hospitals. traded US REIT to take advantage of new tax seller at 22.3m shares, followed by incentives in the Tax Cuts and Jobs Act of -ONASHEESûATûM UPSTART FILES FOR NASDAQ IPO 2017 for investing in low-income areas Enjoei is expected to debut on the B3 designated as “opportunity zones”. -ONDAY û.OVEMBERûû4HEûFREE mOATûISûû UPSTART ûANûARTIlCIALûINTELLIGENCE BASEDû Tax incentives for opportunity zone funds with a valuation of R$2bn (US$350m). consumer lending platform, is hoping to like Aspire include a 10% tax cut on deferred BTG Pactual, Bradesco, JP Morgan, XP and access the tight end-of-year funding window GAINSûONûRENOVATEDûPROPERTIESûFORûlVEûYEARSû UBS are joint bookrunners on the offering. BYûlLINGûEARLYûONû4HURSDAYûFORûANûUPCOMINGû and no federal taxes on the appreciation of ,IKEû-ILIUZ û%NJOEIûISûBUILDINGûFROMûAû Nasdaq IPO. renovated properties through 2047. RELATIVELYûSMALLûBASEû)NûTHEûlRSTûHALFûOFûTHEû Goldman Sachs, Bank of America and Aspire is using US$260m of cash from the year, it processed R$112.5m of gross Citigroup lead a syndicate of seven banks IPO and the concurrent private placement to merchandise value on its platform, grossing named on the US$100m placeholder. purchase an initial portfolio of nine revenue of R$29.6m for a 26.4% take rate. 4HEûTIMINGûOFûTHEûlLINGûISûAûLITTLEûUNUSUALûSINCEû multifamily assets from its external manager, There could be other opportunities. it implies that Upstart is positioning to go public including six located in opportunity zones. MOSAICO ûAû6#ûlRM ûlLEDûDOCUMENTSûLASTû in Thanksgiving week, suggesting bankers are The properties are currently under month for its IPO and online real estate hopeful of getting some deals done in a week that renovation, so the initial dividend has not brokerage HOUSI, akin to Airbnb, reportedly is normally a dead zone for issuance. been set. Comparable assets trade at yields has mandated banks for a pending offering.

International Financing Review November 7 2020 67

9 IFR Equities and SE 2358 p57-69.indd 67 06/11/2020 20:34:05 ECM DEALS: WEEK ENDING 6/11/2020 Stock Country Date Amount Price Deal type Bookrunner(s) Enjoei Brazil 05/11/2020 R$987m R$10 IPO (Primary, Secondary) BTG Pactual, Bradesco, JPM, XP, UBS Meliuz Brazil 03/11/2020 R$522m R$10 IPO (Primary, Secondary) Itau, BTG Pactual, Bradesco, XP New Oridental China 03/11/2020 HK$10.1bn HK$1,190 IPO (Primary) BofA, CS, UBS Education & Technology RemeGen China 02/11/2020 HK$3.99bn HK$52.10 IPO (Primary) Huatai Int, JPM, MS Zain Saudi Arabia Saudi Arabia 02/11/ 2020 SR4.5bn SR10 Rights issue Saudi Fransi, Arab National, Al Rahji, Aljazira, Alinma, Riyad ARA LOGOS Logistics Trust Singapore 02/11/2020 S$50m S$0.5525 Follow-on (Primary) Citigroup, CS,DBS Synairgen UK 02/11/2020 £87m 175p Follow-on (Primary) Finncap, Numis The Rank Group UK 05/11/2020 £70m 90p Accelerated bookbuild (Primary) JPM, BNPP, GS, MS, HSBC, CA, Jefferies, SG Avantor US 05/11/2020 US$1,807.9m US$25.25 Follow-on (Secondary) GS, JPM Bandwidth US 02/11/2020 US$100.8m US$152 Accelerated bookbuild (Secondary) MS Coupa Software US 02/11/2020 US$516m US$516 Accelerated bookbuild (Secondary) GS Flagstar Bancorp US 05/11/2020 US$278.8m US$30.60 Accelerated bookbuild (Secondary) MS Int Exchange US 04/11/2020 US$900m US$98 Accelerated bookbuild (Secondary) MS Roman DBDR Tech Acq US 05/11/2020 US$220m US$10 IPO (Primary) B Riley Securities

ALPHAVILLE RECONSTRUCTS R$500m IPO Like its peers, Alphaville responded to the With news of the acquisition still fresh economic pickup by accelerating constructions and an outcome for the US elections Delayed and downsized but not deterred, beginning in 2019 and into this year. It becoming clearer, leads took the decision homebuilder ALPHAVILLE is moving ahead with currently has 180 projects in development. that the market was open and ready for a a R$502m (US$92m) IPO that was originally That upturn saw it generate R$58m of SIGNIlCANTûAMOUNTûOFû#ELLNEXûPAPER scheduled to be priced last Wednesday. OPERATINGûCASHmOWSûINûTHEûlRSTûHALFûOFû û Cellnex already has outstanding CBs, Bradesco, BTG Pactual, Itaú and XP now after haemorrhaging money during the having printed a €600m 2026 CB in January expect to price the offering of 10.5m new slowdown of 2016–2018. 2018 that was tapped a year later for a shares being marketed at R$41.50–$47.80 further €200m, and an €850m 2028 CB that after the market close on Tuesday, came in July 2019. November 10. Having launched marketing “This is a company that is putting on October 13, they will now keep the books together a considered and rapid acquisition open to investor orders until November 9. STRUCTURED EQUITY strategy while delivering regularly on those The delay in pricing was due to acquisitions and the market just wants them technicalities at Brazilian securities to do more,” said a banker on the deal. REGULATORû#6- ûRATHERûTHANûAûLACKûOFû CHINA “Their track record means that investors are demand, according to a banker involved. fully supportive of them using capital Alphaville, the second-largest Brazilian WINGTECH TECHNOLOGY EYES Rmb9bn CB markets to fund acquisitions.” homebuilder based on landholdings, behind The banker said that the long maturity only Cyrela Brazil Realty, had planned to WINGTECH TECHNOLOGY plans to raise Rmb9bn was largely a case of matching a company conduct a larger raising this summer, but (US$1.3bn) from a six-year convertible bond issue. that operates on long-term contracts with elected to downsize amid investor pushback The maker of mobile terminals and smart long-term funding. “We’ve been pushing on TOûAûmOODûOFûHOMEBUILDERû)0/SûTHATû hardware products will use the proceeds to longer maturities for some time because of struggled at the time, said the banker. expand smartphone component production the negative rates, you can get a high "RAZILIANû0%ûlRMSû3TARBOARDûANDû0¯TRIA ûAû in Jiangsu and Yunnan provinces as well as premium and still get good delta to make it current 50.9% owner, had pledged to invest INû)NDIA ûTOûBUILDûANû2$ûCENTRE ûREPLENISHû attractive and pay some yield,” he said. in the IPO, though that commitment was working capital and repay bank loans. Cellnex is rated BB+ (outlook stable) by always optional and remains that way, 7INGTECHûPOSTEDûAûNETûûPROlTûOFû 30ûANDû"""nûOUTLOOKûSTABLE ûBYû&ITCH ûWITHû Alphaville said in a release on Wednesday. Rmb2.3bn on revenues of Rmb38.6bn for the bonds expected to be rated BBB– by Alphaville, a holding company of Q1–Q3 2020. Fitch. Along with the outstanding paper, the Alphaville Urbanismo, is one of the largest ratings provided a credit assumption of Brazilian homebuilders with operations in 230bp, with no pushback. Implied vol was 23 states and 70 cities focused on mid to FRANCE 20%–26.5%. high-income housing. With speed of the essence, a limited pre- It estimates the value of its landbank at CELLNEX BREAKS ELECTION LULL WITH sounding was carried out on Thursday and R$17bn, trailing only the R$33.4bn held by 11-YEAR €1.5bn CB the deal launched after the London close. Cyrela Brazil Realty and ranking ahead of Offered at par and with a coupon of the R$6.8bn held by Even Construtoria in Spanish telco CELLNEX pushed the boat out on nûANDûlXEDûPREMIUMûOFû ûTHEû terms of publicly traded peers. maturities on Thursday with a record- bonds were to be redeemed at 101.44%– Cyrela and Even shares have more than breaking 11-year tenor for a convertible bond. 113.24% for a yield-to-maturity of doubled in the past year on a recovery in Proceeds were slated for general corporate 0.875%–1.375%. There is a call from Brazilian housing, valuing them at R$9.2bn PURPOSES ûINCLUDINGûlNANCINGûFORû-! ûANDû December 11 2028 with a 150% hurdle. The and R$2.2bn, respectively. the €1.5bn trade follows the announcement of reference was to be set from an Alphaville, by comparison, is targeting a talks with CK Hutchison over acquiring a accompanying delta placing of up to €300m, valuation of R$1.1bn. €10bn portfolio of European mobile towers. with investors given the opportunity to

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EQUITY-LINKED DEALS: WEEK ENDING 6/11/2020

Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s) Novocure Jersey 02/11/2020 US$500m US$75m 5y 0.000 50 JPM, Wells Fargo Cellnex Telecom Spain 05/11/2020 €1.5bn — 11y 1.375 70 JPM, BNPP, GS, MS, HSBC, CA, Jefferies, SG

hedge zero, half or the full 48% delta Only a handful of companies – Square, alongside CB orders. UNITED STATES RingCentral, Etsy, SolarEdge Technologies – Pricing came at the best terms for investors have sold CBs this year at sub-1% coupons of 0.75% coupon and 1.375% yield-to-maturity NOVOCURE ELECTRIFIES WITH US$575m and 50%-plus premiums, so strong investor with redemption at 107.37%. Pricing in the ZERO-COUPON CB receptivity to Novocure’s funding bodes well DELTAûPLACINGûWASûmATûTOûTHEûõûCLOSEûFORûAû for issuance post-third quarter earnings. conversion price of €97.07, which on Ahead of an important year for clinical trials The Jersey-domiciled Novocure last month redemption pricing makes for an effective on multiple forms of cancer treatment, reported strong third-quarter revenues of conversion price of €104.2241. Thursday’s NOVOCURE landed US$575m last week from US$132.7m, up 14.5% on a sequential basis close of €57.10 was the record closing high, THEûSALEûOFûANûAGGRESSIVELYûPRICEDûlVE YEARû and topping the US$120m consensus on with shares up more than 55% year-to-date. convertible bond issue. IMPROVEMENTSûINû-EDICAREûREIMBURSEMENTSû On pricing, implied vol was 20%, with a The biotech/medtech hybrid, whose 3IGNIlCANTûTOûTHEûSUCCESSFULû#"ûFUNDING ûTHEû BONDûmOORûOFû tumour-treating devices are used in COMPANYûISûSOLIDLYûPROlTABLEûINûGENERATINGû “You have to be more precise with repeat combination with anti-cancer drugs, funded US$37.3m of adjusted Ebitda for the period. issuer deals as it’s really about how much after a third-quarter earnings bump and In conjunction with the earnings release, new paper you can bring to market,” said ahead of its inaugural analyst date. Novocure announced a strategic alliance with the banker. “Investors also had to really Novocure did get hurt while marketing THEû.9û5NIVERSITYû'ROSSMANû3CHOOLûOFû-EDICINEû think about what it means to have a high THEû#"ûONû-ONDAY ûASûITSûSHARESûFELLûûTOû FOCUSEDûONû44-ûlELDS ûMILDûELECTRICALûPULSESûTHATû delta on an eleven-year instrument.” US$112.16, eroding gains since late August interrupt cancer cells’ ability to divide. The banker said that there were some to roughly 35% and cosmetic to low funding Novocure will now be able to focus sizeable orders in a book of around 100 costs achieved. analyst attention on details of ongoing lines, with strong support from outright JP Morgan and Wells Fargo had marketed a clinical trials at its analyst day November 12 accounts. “A few people were surprised at US$500m CB offering at a coupon and rather than how it will fund those trials. how quickly we had moved after the US conversion premium of 0%–0.5% and 42.5%– election, but it felt that the market had û4HATûTALKûWASûREVISEDûTOûûlXED ûUPû GLOBAL CONVERTIBLE OFFERINGS – US moved on and was engaged. A number liked nûONû-ONDAYûAFTERNOONûONûSTRONGû BOOKRUNNERS: 1/1/2020 TO DATE that you get some yield that you don’t’ get in investor demand. Managing No of Total Share the rest of the market.” The banks set pricing at 0%, up 50% and bank or group issues US$(m) (%) A second banker said of the timing that subsequently exercised their 15% greenshoe 1 Goldman Sachs 59 12,967.91 17.1 “while there is music still playing, we option to bump the offering size to US$575m. 2 JP Morgan 67 12,148.42 16.1 should keep dancing” and both bankers The CB is structured with three years of 3 Bank of America 60 12,026.72 15.9 suggested there may be more issuance out call protection and is provisionally callable 4 Morgan Stanley 52 10,769.51 14.2 of Europe before year-end. thereafter subject to a 130% trigger with a 5 Citigroup 33 5,614.52 7.4 The second banker also said that there make whole, other than a low coupon and 6 Barclays 24 4,043.17 5.3 was an awareness that the tenor on Cellnex high conversion premium. 7 Wells Fargo 24 3,664.90 4.8 would be too long for some investors and a 4HEûlNALûPRICINGûOFFSETSûDILUTIONûTOûSHAREû 8 Credit Suisse 17 2,577.09 3.4 number were already exposed to the name prices above US$168.24. Novocure’s 9 RBC 11 1,163.30 1.5 through one or more of the outstanding underlying bounced to US$125.70 early on 10 Jefferies 11 1,030.79 1.4 bonds. Friday, up 12.1% from reference, with the Total 138 75,645.08 About 67% of allocations went to hedge new CBs wrapped at 107. Source: Refinitiv SDC code: C9a funds, with 33% going to outrights. The delta placing totalled approximately €234m on GLOBAL CONVERTIBLE OFFERINGS GLOBAL CONVERTIBLE OFFERINGS – EMEA completion. BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Cellnex said that the new paper allows it Managing No of Total Share Managing No of Total Share to increase its average debt maturity to up to bank or group issues US$(m) (%) bank or group issues US$(m) (%) about 6.5 years and to place its average cost 1 JP Morgan 105 18,975.02 12.7 1 JP Morgan 28 5,267.48 18.6 of borrowing at 1.5%, with a liquidity 2 Goldman Sachs 87 17,854.89 11.9 2 Morgan Stanley 14 3,172.97 11.2 position of €9.7bn. 3 Morgan Stanley 79 16,662.15 11.1 3 Goldman Sachs 18 2,595.77 9.2 Cellnex shares were down just over 2% at 4 Bank of America 79 14,932.17 10.0 4 BNP Paribas 17 2,431.42 8.6 €55.96 after 4pm in London on Friday. 5 Citigroup 52 8,841.26 5.9 5 Credit Agricole 13 1,733.67 6.1 JP Morgan, BNP Paribas, Goldman Sachs and 6 Barclays 35 5,664.44 3.8 6 UniCredit 10 1,720.20 6.1 Morgan Stanley were joint global coordinators 7 Credit Suisse 29 4,079.85 2.7 7 Bank of America 12 1,530.21 5.4 and joint bookrunners with Credit Agricole, 8 Wells Fargo 25 3,914.90 2.6 8 Citigroup 9 1,399.76 5.0 HSBC, Jefferies and Societe Generale. Banco 9 Guotai Junan Secs 17 3,714.18 2.5 9 HSBC 9 1,329.78 4.7 Sabadell, CaixaBank, Citigroup, Commerzbank, 10 Citic 22 3,697.96 2.5 10 Barclays 8 1,277.10 4.5 Deutsche Bank, Intesa Sanpaolo, Mediobanca, Total 422 149,853.56 Total 57 28,277.57

Mizuho International, Santander, SMBC Nikko Including exchangeables and domestic offerings. Including exchangeables. and UniCredit were co-bookrunners. Source: Refinitiv SDC code: C9 Source: Refinitiv SDC code: C09d

International Financing Review November 7 2020 69

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10 IFR Masthead 2358 p70-71.indd 70 06/11/2020 19:26:20 INTERNATIONAL FINANCING REVIEW CONTACTS

EDITOR SENIOR REPORTERS: LONDON NEWS EDITORS TOKYO Matthew Davies Fixed-income/Structured Finance: *ULIANû"AKERû Wakako Sato +44 (0)7872 121024 Chris Moore +44 (0)20 7542 7432 +813 6441 1876 DEPUTY EDITOR +44 (0)20 7542 5018 DESK EDITORS REPORTER: LONDON Equities/Structured equity: Fixed-income: Jon Penner 6INCENTû"ABY Prudence Ho Owen Wild +44 (0)20 7542 7348 +852 2912 6612 +44 (0)20 7542 2875 +44 (0)7881 264 973 NEW YORK )ANû%DMONDSON NEW YORK AMERICAS BUREAU CHIEF Fixed-income: -ILUSKAû"ERROSPI +44 (0)20 7542 9703 Rhys Adams Jack Doran +1 646 223 7586 David Holland +1 609 651 9202 +1 646 345 6302 People & markets: Philip Scipio +852 2912 6676 Andrew Hedlund ASSOCIATE EDITORS +1 646 223 8767 CHIEF SUB-EDITOR +1 646 223 5558 Features and analysis: Gareth Gore Richard Stanbury Sasha Padbidri +44 (0)20 7542 4279 3TRUCTUREDûlNANCEûRichard Leong +1 332 201 1168 EDITORIAL ASSISTANT +1 646 223 4442 US editor: Stephen Lacey HONG KONG Anna Farish PRINT/WEB PRODUCTION, LONDON +1 646 223 8808 People & markets: 4HOMASû"LOTT +44 (0)20 7542 3474 Head of production: Clive George Fixed-income, Emerging markets: +852 2841 5878 LOANS EDITOR +44 (0)20 7542 3869 Sudip Roy Chris Mangham IFR production manager: +44 (0)20 7542 4617 Fixed-income: Carol Chan +852 2912 6604 )&2û!SSOCIATEû%DITOR Carole Styles People & markets: Steven Slater SYDNEY +44 (0)20 7542 3582 !NDREASû-ICHAEL û.ITAû7EBB û +44 (0)20 7542 4367 Fixed-income: John Weavers BUREAU CHIEF: LONDON Gavin White Green/ESG Financing Editor: +612 9373 1655 Claire Ruckin GLOBAL HEAD – ADVERTISING & Tessa Walsh TOKYO +44 (0)20 7542 1891 SPONSORSHIP SALES +44 (0)20 7542 4048 Fixed-income: Takahiro Okamoto BUREAU CHIEF: HONG KONG Shahid Hamid Derivatives: Christopher Whittall +813 6441 1773 Prakash Chakravarti +65 9755 5031 +44 (0)20 7542 3256 REPORTERS: LONDON +852 2912 6671 ADVERTISING & SPONSORSHIP MANAGING EDITOR DIRECTOR Fixed-income: David Cheetham BUREAU CHIEF: NEW YORK SALES Philip Wright +44 (0)7901 112 916 Michelle Sierra Leonie Welss +44 (0)20 7542 8144 +1 646 223 8592 +44 (0)20 7542 7752 Fixed-income: Edward Clark IFR ASIA EDITOR ADVERTISING +44 (0)207 542 7630 DEPUTY EDITOR: ASIA-PACIFIC GLOBAL Steve Garton Chien Mi Wong PRODUCTION MANAGER Fixed-income: Eleanor Duncan +852 2912 6670 +852 2912 6611 'LORIAû"ALBASTRO +44 (0)207 542 5016 HEAD OF US CREDIT SENIOR REPORTERS: LONDON +44 (0)20 7542 4348 Fixed-income: Tom Revell Paul Kilby 3ANDRINEû"RADLEYû SUBSCRIPTION SALES ENQUIRIES +44 (0)207 542 2794 +1 646 223 4733 +44 (0)20 7542 0651 UK/EMEA: +44 (0)20 7542 4569 Equities: Lucy Raitano HEAD OF ASIA CREDIT Alasdair Reilly Americas: +1 646 223 5543 +44 (0)20 7542 4282 Daniel Stanton +44 (0)20 7542 3197 China, Hong Kong, Japan, Korean, Taiwan Fixed-income: Malicka Sielinou Alan Wong +852 2912 6606 +65 6417 4548 NEW YORK +44 (0)207 542 6907 EQUITIES EDITOR, ASIA $AVIDû"ROOKEû Australia, India, Indonesia, Malaysia, Fiona Lau NEW YORK +1 646 223 4697 Singapore, Thailand +852 2912 6673 Fixed-income: William Hoffman Samantha Harris +612 9373 1749 Kristen Haunss +1 646 223 6141 CLIENT SERVICES ASSISTANT EDITORS: LONDON +1 646 223 6790 Emerging Markets: Robert Hogg Equities: Robert Sherwood IFR.Clientsupport@refinitiv.com Aaron Weinman +44 (0)20 7542 9077 +1 646 223 8792 NEW ISSUES LEAGUE TABLE & DATABASE +1 646 223 6278 High-yield: $AVIDû"ELL Loans: )OLANDAû"ARBATI People & markets: HONG KONG Christopher Spink +1 646 223 8388 +44 (0)20 7542 0971 Aileen Chuang +44 (0)20 7542 3814 HONG KONG +852 3761 1934 ECM: Rebecca Cox Equities/Structured equity: Equities: Candy Chan +44 (0)20 7542 7376 Apple Li Robert Venes +852 2912 6672 +852 2912 6685 DCM: )ANû7ILLMOTT +44 (0)20 7542 8326 Fixed-income: Jihye Hwang +44 (0)20 7542 4376 Evelynn Lin NEW YORK +852 2843 1679 REPRINTS OR LICENCE TO COPY +852 2912 6607 Equities: Anthony Hughes SINGAPORE 'LORIAû"ALBASTRO SINGAPORE +1 646 223 8174 Fixed-income: Krishna Merchant +44 (0)20 7542 4348 Mirzaan Jamwal SINGAPORE +91 9833847353 E-MAIL ADDRESSES +65 6417 4541 Equities: Anuradha Subramanyan BEIJING lRSTNAMELASTNAME REFINITIVCOM SYDNEY +65 6417 4547 Equities: Karen Tian -ARIKOû)SHIKAWA SENIOR CREDIT CORESPONDENT +86 10 6627 1045 +61 2 9321 8179 +ITû9INû"OEY CREDIT EDITOR +65 6417 4549 Alex Chambers +44 (0)20 7542 8389 DEPUTY CREDIT EDITOR Helene Durand +44 (0)20 7542 3469

LONDON, HEAD OFFICE NEW YORK HONG KONG SINGAPORE 5 Canada Square 3 Times Square THûmOOR û)#"#û4OWER 18 Science Park Drive London 18th Floor Three Garden Road Singapore 118229 E14 5AQ New York Central Tel +65 6775 5088 Tel +44 (0)20 7250 1122 NY10036 Hong Kong Tel +852 3761 1800

4HEûCONTENTSûOFûTHISûPUBLICATION ûEITHERûINûWHOLEûORûPART ûMAYûNOTûBEûREPRODUCED ûSTOREDûINûAûDATAûRETRIEVALûSYSTEMûORûTRANSMITTEDûINûANYûFORMûORûBYûANYûMEANS ûELECTRONIC ûMECHANICAL û PHOTOCOPYING ûRECORDINGûORûOTHERWISEûWITHOUTûWRITTENûPERMISSIONûOFûTHEûPUBûLISHERSû!CTIONûWILLûBEûTAKENûAGAINSTûCOMPANIESûORûINDIVIDUALûPERSONSûWHOûIGNOREûTHISûWARNINGû4HEû INFORMATIONûSETûFORTHûHEREINûHASûBEENûOBTAINEDûFROMûSOURCESûWHICHûWEûBELIEVEûTOûBEûRELIABLE ûBUTûISûNOTûGUARANTEEDû3UBSCRIPTIONSûTOû)&2ûAREûNON REFUNDABLEûAFTERûTHEIRûCOMMENCEMENTû ISSUEûDATEûÊû2EFINITIVûû2EGISTEREDûASûAûNEWSPAPERûATûTHEû0OSTû/FlCEû2EGISTEREDû/FlCEû2EFINITIV ûû3OUTHû#OLONNADE û#ANARYû7HARF û,ONDONû%û%0û2EGISTEREDûNOû û %NGLANDû0RINTEDûINû%NGLANDûBYû7ALSTEADû2OCHEû,TDû)33.û û5NAUTHORISEDûPHOTOCOPYINGûISûILLEGAL

International Financing Review November 7 2020 71

10 IFR Masthead 2358 p70-71.indd 71 06/11/2020 19:26:22 INTERNATIONAL FINANCING REVIEW INDEX

ABN AMRO Bank 17 GHY Culture & Media 60 Outsourcing 47 Accrol Group 63 Gland Pharma 60 Ozon 62 Adani Gas 41 Glencore Agriculture 48 Pacific Equity Partners 55 Airbnb 6 Greenhill 12 PA Housing 27 Alantra 15 Haitong International Securities Group 46 Pantheon International Participations 51 Alphaville 68 Havea 55 Pepper Group 35 AngloGold Ashanti 50 Hengli Group 56 Petco 67 Ant 2 Hesse 25 PetSmart 9, 53, 67 Antengene 58 Hexaware Technologies 55 PNM Resources 49 Antero Midstream 6, 30 Holdings 48 Polska 62 Ant Group 2, 4, 57 Housi 67 Polymetal 50 Ant Group 57 HSBC 18, 27 Poly Property Group 47 Aspire Real Estate Investors 64, 67 HT Global IT Solutions 56 Port of Newcastle Investments (Financing) 46 AstraZeneca 51 HusCompagniet 61, 62 Potters Industries 54 Auto1 62 Iberdrola 26, 49 Precision Medicine 54 Avangrid 49 ICICI Prudential Life Insurance 40 Premier Oil 51 Avantor 54, 65 IN8bio 64, 66 Raising Cane’s 52 Aveva Group 64 Indian Railway Finance Corp 41 RemeGen 59 Banca Monte dei Paschi di Siena 28 Indofood Sukses Makmur 47 Republic of Maldives 41 Bandwidth 65 Industrial Bank Hong Kong branch 40 Reserve Bank of Australia 25 Bank of America 7 Ineos Styrolution 31 Roman DBDR Tech Acquisition 66 Bank of Jiangsu 59 Institutional Mall Investors 34 Round Hill Music Royalty Fund 62 Bank of Scotland 33 Intact Financial 52 Royal Schiphol Group 49 Bendigo and Adelaide Bank 30 Intercontinental Exchange 65 Russian Railways 41 Blackstone 32 ION Analytics 8, 54 SBS Holdings 47 Blumar Seafoods 53 Isbank 50 Schneider Electric 49 BNP Paribas 11, 12 Ithaca Energy 51 Selecta 56 Boardriders 54 Japan Airlines 60 Serta Simmons 54 Bochum 25 Japan Oil Gas & Metals National Corp 47 Seven & i Holdings 27 BoCom Leasing Management Hong Kong 46 JD Health International 58 Shimao Services 57 Brightline 9 Jingrui Holdings 6 Siemens 49 Brookfield Properties 34 Jinke Smart Services Group 57, 58 Simcere Pharmaceutical Group 57 Bytes Technology Group 63 JP Morgan 7 Simon Property 34 Cadeler 61 JW (Cayman) Therapeutics 57 Societe Generale 11, 12 Campbell Soup 52 Kingswood Acquisition 66 Southeastern Grocers 64 Canal+ 62 Kuaishou 59 Standard Chartered 18 Canal+ Polska 61 KWG Living 57 Sunac Services 6, 57, 59 Cellnex 10, 68 London Borough of Sutton 21 Sunkwan Properties Group 58 Chewy 67 Louis Dreyfus 47 Suriname 42 China Construction Bank 47 Lower Austria 24 Synairgen 64 China Evergrande Group 39 Lufax 4 Technology 59 China International Capital 59 Macquarie Group 17 Terna 49 Chrysaor 51 Mahindra Finance 40 The Rank Group 64 Citadel Group 55 Mailbox REIT 62 Total Play 43 Citigroup 7, 13 Mangalore Refinery and Petrochemicals 40 TriMark 54 Clarion Housing Group 26 Maravai LifeSciences 66 TruGreen 53 Coltel 43 Marvell Technology 51 Tsinghua Unigroup 39 Commerzbank 12 Masmovil 31, 32 Turk Ekonomi Bankasi 51 Compass Therapeutics 65 Meliuz 67 Uber 31 Conduit 6 Messe Frankfurt 49 Unibail-Rodamco-Westfield 61 Core Income Global REIT 60 Midwest Holding 66 Upstart 67 Coupa Software 65 Millicom 43 Varian 49 Curium 54 Mirvac Group 46 Vattenfall 50 CZG 60 Morgan Stanley 18 Veregy 53 daVinci Payments 53 Mosaico 67 Vista Land and Lifescapes 60 Deliveroo 62 MultiPlan 9 Vodafone Towers 62 Deutsche Bank 29 Musim Mas 48 VTR 43 EDF 26 Natixis 11, 15 VTTI 50 Egypt 41 Natural Order Acquisition 66 Walvax Biotechnology 59 Enjoei 67 N Brown 63 Waste Management 6 Euronav 48 New Hope Liuhe 46 Westpac 29 European Financial Stability Facility 24 New Hope Singapore 46 Wingtech Technology 68 European Private Placement Facility 21 Nielsen 53 WOM 43 European Union 23 Nordnet 62 Yatsen Holding 58 Ferrovial 6, 26 North Lane Technologies 53 Yitu 60 First Citizen Finance 34 Novocure 69 Zain Saudi Arabia 62 Flagstar Bancorp 66 Novo Nordisk 48 Zambia 41 FRT Finance (HK) 47 Nuvei Technologies 53 Gaw Capital Partners 56 Olema Pharmaceuticals 66 Genuine Parts Company 52 OneDigital 54

72 International Financing Review November 7 2020

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