MARCH 31 2018 ISSUE 2227 www.ifre.com

Bargain basement Bahrain: sovereign sells US$1bn sukuk but drops conventional tranches

Tesla stumbles as markets face reality: fatal crash and downgrade push bonds below 90

Deutsche Bank hangs Cryan out to dry: Achleitner sounds out replacement CEOs

EQUITIES PEOPLE & MARKETS LOANS EMERGING MARKETS Jitters hurt Asia Successful Golden €7.3bn of debt to Mannai gets IPOs: listings Belt law suit fund leveraged Qatar Inc back from China and prompts broader buyout of Akzo in the US dollar India struggle disclaimers Nobel unit bond market 06 07 09 12 SAVE THE DATE: MAY 22 2018

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Dead man walking? Rocket man

t was another terrible week for Deutsche Bank. But this ast November, an analyst at Germany’s Nord/LB said it Itime it wasn’t John Cryan’s fault. Lwas reasonable to ask which thing Elon Musk would do Instead, the person who should be embarrassed is Paul lRSTûmYûAûROCKETûTOû-ARSûORûOPERATEû4ESLAûATûAûPROlT Achleitner, the bank’s chairman, whose cack-handed efforts -USKûISûSOMETIMESûAûlGUREûOFûFUNûFORûHISûBOLDûhVISIONARYvû to line up a new CEO were splashed all over the media. ideas, but there is nothing amusing about what has Like when football clubs “tap up” prospective new happened at Tesla of late. managers, the crime isn’t so much readying a suitable His electric-car company lost almost US$8bn in market cap replacement, but being caught doing so. (And yes, we’re fully over two days last week when shares plummeted after the US aware of the irony of those of us trying to uncover such National Transportation Safety Board said it would developments complaining when they become public.) INVESTIGATEûAûFATALûCARûCRASHûANDûlREûINVOLVINGûAû4ESLAû356 Late in the week, Cryan released a statement saying that he Meanwhile, Moody’s downgraded the company by one was “absolutely committed” to Deutsche and that he would notch to B3 and dropped its sole outstanding junk bond continue in the role. rating to Caa1, citing both a liquidity shortfall and Tesla’s But the statement didn’t say that Deutsche was absolutely continuing problems rolling out its Model 3 sedan. committed to Cryan and it is hard to see how he is anything The crash may turn out not to be a problem, but the cash but a lame duck who will have to go sooner rather than later. most certainly is. So who will replace him? Tesla raised US$1.8bn with the junk bond issue last August Not, it seems, any of the prominent bankers mentioned in to ramp up production of the Model 3. Musk talked about the various press reports. The Times suggested that Richard manufacturing 5,000 of the sedans per week by the end of Gnodde, Jean-Pierre Mustier and Bill Winters had all told 2017 and 10,000 per week by year-end 2018, as Tesla Achleitner where to stick his job offer. transformed itself from a boutique marque to a mass-market automaker. But the company managed to make only 2,400 Model 3s in the whole of the fourth quarter last year, according to Richard Gnodde, Jean-Pierre Mustier Moody’s. Others put that number even lower. Tesla is burning through money, and Moody’s analysts and Bill Winters all told Achleitner think the company will need to raise another US$2bn in the short term – and have to raise again late next year. where to stick his job offer Tesla now has the much more modest target of making 2,500 Model 3s per week – and will provide an update on PRODUCTIONûINûTHEûlRSTûWEEKûOFû!PRILû!NOTHERûMISSûWILLûMEANû Besides, it seems that the bank in fact wants to put a even more trouble. German into the CEO’s job. Musk has long had the Midas touch with investors, and he That means that the only real candidates are internal should be able to muster up the cash Tesla needs to keep anyway (and suggests the embarrassing leaks that dropped going. The company could raise equity (yet again), get Achleitner in it might also have come from inside the bank). holders of its convertible debt to roll over into new bonds, or Either way, will anyone with any sense want to go even try its luck again in the junk-bond market. ANYWHEREûNEARûTHEûJOBûINûTHEûlRSTûPLACE That market is more expensive for everyone this year Not only has the bank become woefully dysfunctional (as compared with last and, after the downgrade, it will be more the leaks make clear), it’s also not obvious what a new CEO expensive still for Tesla. Yet it could probably get a deal done MIGHTûDOûTHATûISûSIGNIlCANTLYûDIFFERENTûFROMûWHATû#RYANûHASû without too much trouble, especially if it decided to secure done. the trade against some of its prized assets. And there’s also this: would a banker with the stature of But at some point Musk will surely have to stop focusing Gnodde, Mustier or Winters be interested in taking a pay cut ONûmYINGûSPACESHIPSûTOû-ARSûANDûlGUREûOUTûHOWûTOûDOûWHATû to join an institution that now has a smaller market cap than automakers are supposed to do: make a lot of cars, and sell Danske Bank? THEMûATûAûPROlTû)TSûNOTûROCKETûSCIENCE

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© 201 Thomson Reuters. 03/15. INTERNATIONAL FINANCING REVIEW Contents MARCH 31 2018 ISSUE 2227

TOP NEWS 04 EMERGING Bargain basement Bahrain sells US$1bn 7.5-year sukuk bond but was MARKETS forced to revise its triple-tranche offering following pressure from investors. 04 BONDS Battered Tesla got hammered in the markets last week, as its stocks and bonds plunged on negative news about how the cash-burning company will raise funds. 04 P&M Head hunting Following its profit warning the previous week Deutsche Bank was under pressure to give news on its hunt for a replacement for John Cryan. 05 EQUITIES Market correction Sell-offs across global equities have dented investor sentiment for IPOs out of Asia, forcing issuers to compromise on valuations. 06

Liable Arrangers are strengthening disclaimers in issue documentation after BNPP loses court case. 07 New release Music streaming outfit Spotify discloses numbers ahead of its landmark direct listing. 08 Cashbuilding Banks have lined up as much as €7.3bn-equivalent of debt for Akzo Nobel buyout. 09 Thaw Mannai gets Qatar back on track with first US dollar bond since spat. 12

PEOPLE & Pay gap Bonuses paid to men were 66% bigger than awards to women on 13 MARKETS average across the big corporate and investment banks in London last year. Eyeing expansion Big banks may be ready to make a splash in M&A after a long hiatus, which could see JPM and Goldman getting acquisitive from next year. 14 Top slot London maintained its position as the world’s leading financial centre, though its lead over New York, Hong Kong and Singapore narrowed. 15 Back on the gravy train Wall Street bonuses jumped 17% to an average US$184,220 last year. 19 Gaining ground Green bonds are set to play catch-up in Asia, with two borrowers rushing to sign up. 21 Doubtful Singapore Exchange is questioning whether the restructuring of Noble Group can succeed. 23

BONDS Hanging fire Tough market forces Banca Carige to put Tier 2 plans on hold. 25 US high-grade Difficult conditions endure. 26 Getting ahead Euroclear beats the rush. 32

EMERGING Kept on hold STLC was forced to wait last week to revive a pulled trade. 45 MARKETS China Issuers rush to beat NDRC clock. 46 Deaf ear Court refuses to hear Dana appeal. 51

LOANS Toothless Bankers question how ECB can police lending guidelines. 55 US J&J diabetes unit bid prompts loans. 66 Europe Imagina LBO debt delayed. 71

EQUITIES Revamp Dominion Energy rethinks its strategy after tax ruling. 73 Muddled Overstock pulls share sale. 80 Ready Tech IPOs set for April launch. 81

STRUCTURED Go-ahead Ping An Bank has approval to issue convertible bonds. 83 EQUITY China CB approval for Shanying. 83 US Chegg hatches CB to fuel growth. 83

International Financing Review March 31 2018 3 Top news

Jitters hurt Asia IPOs 06 Golden Belt prompts disclaimers 07 Spotify direct listing nears 08

Bahrain’s bargain basement sukuk „ Emerging Markets Islamic bonds left to fend for themselves as conventional tranches scrapped

BY ROBERT HOGG just US$1bn of 7.5-year sukuk, audience in the capital markets been very expensive – even for a after accounts lasered in on the even though its bonds aren’t 12-year it would be very BAHRAIN’s trade wilted under credit quality of a country that eligible for the indices. That’s expensive from a debt pressure from investors last relies heavily on external because of the yields Bahrain sustainability angle,” said a week as the sovereign was support. provides and the implicit banker at one of the leads. forced to revise a potential “Bahrain’s fundamentals on a support the economy gets from Instead, Bahrain (B+/BB–) triple-tranche bond offering by standalone basis remain among Saudi Arabia in particular. agreed only to issue the shorter- ditching the conventional the worst of all EM sovereigns But with investors dated October 2025 sukuk. But tranches for a single Islamic note globally,” said Richard Briggs, an increasingly turning their pricing on that deal drew gasps issue, which then came at a emerging markets strategist at attention to credit fundamentals from bankers after it began huge pick up over its CreditSights. and questioning the exact marketing in the 7% area outstanding sukuk. “Without support [from its nature of that Saudi support, the compared with the high 5%/low The sovereign had been Arab neighbours] Bahrain would wheel has turned for Bahrain. 6% quotes for its March 2025 hoping to mirror a US$3bn be highly likely to be facing a Since the turn of the year, sukuk, which were part of the triple-tranche deal from last balance of payments crisis.” yields on the sovereign’s September offering. September, which was also a 7HILEû"AHRAINSûlNANCESûHAVEû outstanding bonds have jumped “Clearly, we started at mix of conventional and sukuk been a cause for concern for by some 70bp and, as a guidance levels that would be tranches. some time (government debt-to- consequence, it was simply more inclusive than just the But this time the sovereign GDP is forecast to peak at more priced out of issuing the sukuk investor base,” said a was forced to abandon plans for than 100% by 2023 from 36% in conventional tranches. second lead banker. “We took potential 12 and 30-year 2012) the sovereign has largely “There was a conventional the opportunity to leverage off conventional tranches and issue MANAGEDûTOûlNDûAûCAPTIVEû trade available but it would have strong Islamic demand and get Tesla stumbles as markets face reality

„ Bonds Company’s visionary leader bumps up against uncomfortable truths

BY DAVIDE SCIGLIUZZO batteries at the heart of it - were The rating agency cited both cover normal operations, an safe to move. Tesla’s problems in getting expected US$2bn cash burn in TESLA got battered in the markets Tesla stock shed 8.2% on production levels on the Model 3 2018 and some US$1.2bn in last week, as its stocks and Tuesday after the NTSB news - up to speed, as well as the strain convertible debt maturities bonds plunged on negative news slashing about US$4.2bn off its of the heavy cash burn and through next year. that deepened questions about market valuation - and lost upcoming debt maturities. Not only does it need to raise how the cash-burning company another 7.7%, and US$3.6bn more It said Tesla, which has yet to more than US$2bn for that, the will raise the funding to keep market cap, on Wednesday. TURNûAûFULL YEARûPROlT ûNEEDEDûTOû agency said, but Tesla is also going. More bad news came from raise more than US$2bn in the likely to need to muster up Company founder Elon Musk Moody’s, which downloaded short term - no mean feat given even more in the second half of has captivated the markets with Tesla’s corporate rating one the headwinds it faces - and put 2019. promises of widespread electric notch to B3 on Tuesday, a move the credit on outlook negative. When it sold its junk bond cars, solar houses and rockets that sent its lone outstanding One investor told IFR that last year, the company indicated that land on Mars, but reality has junk bond plummeting as well. investors needed “equity-type THATûWOULDûBEûTHEûlRSTûOFû been rather more prosaic. The bond, a US$1.8bn 5.3% 2025 return” to compensate for the several such deals as it moved The National Transportation that priced last August, was already risks the credit entails. away from equity issuance Safety Board tweeted on Tuesday at its lowest-ever level of 91 cents “Now that you have issued a to fund its ambitious growth that it was investigating the fatal on the dollar before the downgrade; bond, you have to start to think plans. crash of a Tesla vehicle in afterward it went as low as 86 cents. ABOUTûCASHmOWûDYNAMICS vûTHEû But still it has raised equity California, news that sent the investor said. every year so far since going company’s shares into a tailspin. JUNK IN THE TRUNK h4HESEûAREûSIGNIlCANTû public in 2010, and that might It was unknown if Tesla’s 4HEûBONDû ûINTENDEDûTOûlNANCEû challenges that Tesla faces.” again prove to be an attractive autopilot feature was on at the ramped-up production of Tesla’s option to get through the time, and there were reports Model 3 sedan - has never traded MONEY PIT turbulence ahead. THATûlRElGHTERSûHADûTOûCONSULTû above par. Moody’s downgraded Moody’s said that, between cash The company could also try to Tesla engineers to see if the that as well - to Caa1 - closer to and its revolver, Tesla’s current roll over its maturing burning car - and the lithium-ion default territory. liquidity is “not adequate” to convertible bonds.

4 International Financing Review March 31 2018 For daily news stories @ visit www.ifre.com Akzo Nobel jumbo LBO 09 Issuers target Dim Sum savings 10 Mannai gets Qatar back on track 12

the international guys to tag participation, the majority of along.” buyers were Middle East banks Deutsche hangs 4HEûlRSTûBANKERûSAIDû and private banks. comparing pricing on the new A banker away from the deal issue with that of the March reckoned the country felt it Cryan out to dry 2025 sukuk would be a mistake would have been unwise to wait „ People & Markets Initial hunt for new CEO draws blanks because of the lack of liquidity for easier market conditions. in the secondary market. “The market is obviously very BY CHRISTOPHER SPINK market cap of €23.32bn, a third “The [March 2025] sukuk choppy but I guess they were of its book value. doesn’t trade,” he said. “It’s equally spooked by the potential &OLLOWINGûITSûUNSCHEDULEDûPROlTû A senior executive at the bank quoted 1% inside conventional – supply for post-Easter. Markets warning the previous week, said part of the blame for the no issuer in the world has that. that are unlikely to be any DEUTSCHE BANK endured a second continuing uncertainty about It optically increases the new better,” he said. tough week in a row, after the bank’s senior management issue premium.” The second lead banker said initially refusing to dampen and its plans should be levelled Indeed, it was the that with the likes of Saudi speculation that chairman Paul at Achleitner, who has been conventional curve that the Arabia waiting down the line Achleitner was unsuccessfully chairman of the supervisory leads were focusing on, with the with another blockbuster, last scouting for successors to chief board for nearly six years and January 2026s trading just north week was the best window. executive John Cryan. was behind Cryan’s of 7%. Given the backdrop, however, A report in The Times appointment in 2015. Pricing on the sukuk was there was always going to be a suggested that Bill Winters and “If Cryan is about to be edged tightened a touch from initial price to pay. Jean-Pierre Mustier, chief OUT ûHOWûDOESûTHATûREmECTûONûTHEû LEVELS ûWITHûTHEûlNALûPROlTûRATEûSETû “This is the new reality,” he executives of Standard chairman? Given the turnover at 6.875%. The book was US$2.1bn. said. “If people want to get Chartered and UniCredit [of chief executives] … they are The sukuk were trading 15bp trades done, the market is open respectively, as well as Richard all his hires,” said the senior tighter in the aftermarket. but there’s a premium for risk. Gnodde, chief executive of executive. Although there was an That isn’t going to change in the Goldman Sachs International, He questioned whether the element of international foreseeable future.” „ had all been approached, but identity of the CEO, something had not expressed interest in the possibly brought to the fore by role. new major investors such as HNA In any case, a return to the car will really follow through. Deutsche initially declined to and Cerberus, was the key issue. junk-bond market will mean “If order conversion is indeed comment on the report, but on “It is not as simple as bringing much more expensive funding an issue, then at some point the Wednesday Cryan himself tried in a new leader,” he said. than it achieved last year, when production ramp could be to dispel the rumours of his Even if - as now seems likely - it priced its US$1.8bn trade at delayed for reasons outside of departure. an internal candidate, such as 5.3%. factory bottlenecks,” Citigroup “Once again we are the FORMERûCHIEFûlNANCIALûOFlCERû Sentiment is far more analysts said last week. subject of widespread rumours,” Marcus Schenck, replaces Cryan, negative now, irrespective of They said that would put he wrote in an email to staff. “I that is unlikely to herald a major the Moody’s downgrade, and further pressure on free JUSTûWANTEDûTOûREAFlRMûTHATû)ûAMû shift in strategy. Schenck is now JUNKûBORROWERSûAREûlNDINGûITû CASHmOWûhATûAûTIMEûWHENûBOTHû absolutely committed to serving co-head of the corporate and tougher (and more expensive) to Model 3 earnings and working our bank and to continuing investment bank. get traction with a skeptical capital are being relied on as down the path on which we The executive said that buyside. major tailwinds”. started some three years ago. although cost savings and Tesla plans to provide an “We all know that we have a revenue growth had not DUDE, WHERE’S MY CAR? update on Model 3 production lot of work to do: our happened as quickly as Meanwhile the company has INûTHEûlRSTûWEEKûOFû!PRIL programmes are ambitious, but envisaged, Cryan had addressed failed to meet the production But all in all, the situation will THEûlNANCIALûRESULTSûHAVEûSOûFARû several critical issues. “Litigation, targets for its Model 3 - the car only make it harder for Tesla - not been what all of us would settlements and capital questions intended to be Tesla’s mass- despite Musk’s tremendous want them to be … We need to are off the table,” he said. production marvel. SALESMANSHIPû ûTOûlNDûSUCCESSû focus on executing on the Piers Brown, an analyst at Pledging it would get raising funding in the bond strategy that was agreed and Macquarie, agreed. “Changing production up to 5,000 cars per markets. signed off by both the management doesn’t get rid of week - the reason for last year’s “Investors have become more management and supervisory the major challenges. The bank junk bond - it made less than critical of companies that are boards.” just needs to get on with half that in the whole fourth FREEûCASHmOW NEGATIVEûANDûVERYû Over the past month the executing its existing plan.” quarter of 2017, according to capital intensive,” said Michael German bank’s shares have Unlike other European banks Moody’s. Goldstein, co-head of global fallen 14% and are now down that have struggled in recent The rating agency cited that high-yield and leveraged loans 29% this year at €11.31, putting years, such as Credit Suisse and hSIGNIlCANTûSHORTFALLvûASûAû at Goldman Sachs Asset them below the level at which Barclays, Deutsche is dominated reason for the downgrade, while Management. the bank raised €8bn only a year by its investment bank and has other analysts have questioned “The high-yield market is not AGO ûITSûlFTHûCAPITALûRAISINGûINû fewer options to change the mix whether intended buyers of the a place for innovators.” „ the past decade. The bank has a of its business. „

International Financing Review March 31 2018 5 Top news Market jitters hurt Asia IPOs

„ Equities Choosy investors take selective look at listings amid market correction

BY FIONA LAU, S ANURADHA “Investors still look at IPOs but table for its US$483m NYSE issuer could have priced it they have become very picky. listing and sold shares at the higher but given how the recent Sell-offs across global equities They would like to be totally sure mid-point of the US$10.50– Chinese listings in the US have dented investor sentiment that they are not buying anything $12.50 range. OneSmart, traded, they chose to price it for IPOs out of Asia, forcing overpriced. They will just pass meanwhile, priced its US$179m sensibly,” said a source close to issuers to compromise on the transaction if they have any NYSE IPO at the bottom of the the deal. valuations and leave some deals doubt,” said an ECM banker. US$11–$13 range. undersubscribed. Such concerns meant Chinese Nevertheless, Bilibili shares “The issuer could have Shares continued to fall in hotel chain operator GREENTREE dropped as much as 16.3% on priced it higher but major markets last week after HOSPITALITY had to cut the size of their debut last Wednesday given how the recent the US opened a trade war its US IPO by half because of before ending the day 2.3% against China and investors sold INSUFlCIENTûDEMANDû4HEû under the IPO price. OneSmart Chinese listings in the off leading US technology stocks, US$143m deal was also priced closed 1.8% below the issue US traded, they chose such as Facebook, on fears of below the US$16–$18 indicative price. to price it sensibly” increased regulation. As of last price range, at US$14 per share. Wednesday, the S&P 500 index Despite these concessions, the SENSIBLE PRICING had fallen 5.3% since March 16. stock still sank 7.1% on its debut That kind of weak performance iQiyi, often seen as the 4HEû-3#)û!SIA 0ACIlCûEX *APANû last Tuesday. prompted IQIYI, Baidu’s video- #HINESEûEQUIVALENTûOFû.ETmIX ûISû Index fell 4.4% over the same Two other Chinese issuers, streaming service, to price its the biggest Chinese listing in the period. video-streaming site BILIBILI and US$2.25bn US IPO at the mid- US since the US$25bn IPO of Volatile market conditions tutoring company ONESMART point of the US$17–$19 price e-commerce giant Alibaba Group have made investors more INTERNATIONAL EDUCATION, also range so as to secure a decent Holding in September 2014. cautious and deliberate about priced their US IPOs aftermarket performance. the new issues they choose to conservatively. “The book was double-digit SAME STORY buy into, even from issuers in Despite a strong book, Bilibili oversubscribed and there was It was a similar story in India, high-growth China and India. chose to leave something on the not much price sensitivity. The where retail and high-net-worth AT&T offers last-minute deal on SMR bonds

„ Bonds Notes were printed to finance stalled merger with Time Warner

BY JOHN DORAN, ELEANOR DUNCAN antitrust trial has only just redemption price outlined by success rate. It makes sense, begun, making it likely the April the SMRs. because the ones included in the AT&T made a buy-back and swap 22 date will be missed. There is slightly more than offer are long-tenor bonds, while offer on Thursday for some of “I thought they would have US$12.7bn outstanding of those the debt left out of the offer the US$22.5bn of bonds it sold announced something in the notes in all. carries relatively shorter tenors.” LASTûYEARûTOûlNANCEûITSû lRSTûTWOûMONTHSûOFûTHEûYEAR vû As an alternative, the CreditSights said on Thursday: acquisition of Time Warner, a Mary Pollock, a senior analyst at company is offering some “We do not see any reason why deal that the US government is CreditSights, told IFR before the investors a private exchange for investors would participate in suing to stop. exchange offer was announced. new bonds at $1,000 par plus the cash tender. The takeout With an April 22 deadline to “Usually, a tender or exchange US$2.50 cash. The new bonds do price is 100.25, below the SMR of complete the merger or face takes about a month.” not contain special mandatory 101.00.” mandatory redemption of the redemption language. Because AT&T is not soliciting notes at a 101 cash price, AT&T SWAP OR CASH The bond exchange is open consents as part of the offers, extended the offer for four But the telecoms giant, rated ONLYûTOûQUALIlEDûINSTITUTIONALû investors have the option to pass tranches of the seven-part US Baa1/BBB+/A–, is not leaving buyers and non-US persons. The and still be taken out at 101 in trade. investors – or itself – that much cash tender is open to all April, CreditSights said. This is the third offer it has time. investors. On the other hand, the bond made on the debt that was to The offer expires at the close Those investors not taking exchange gives investors the back the US$85.4bn takeover of business on April 5, which part in either offer would then opportunity to remain exposed after proposing an exchange on gave investors exactly one week be able to redeem their bonds at to AT&T, it said. the euro and sterling- to determine what they wanted the SMR cash price. AT&T omitted three US dollar denominated portions of the to do. “In effect, this offer will test tranches of the deal from the OVERALLûBONDûlNANCINGûINû AT&T is offering to buy back investor appetite for TMT risk at offering. One of those tranches February. its 5.3% 2058s, 5.15% 2050s, 4.9% current coupons,” one senior was called earlier this month But it has become especially SûANDûmOATING RATEûSûATû syndicate banker told IFR. using the make-whole price. urgent to negotiate a solution US$1,000 plus US$2.50 per bond, “They are probably targeting And last month, AT&T for the US dollar debt, as the or US$7.50 below the the bonds with the highest exchanged around €4bn of the

6 International Financing Review March 31 2018 For daily news stories @ visit www.ifre.com investors gave the ICICI SECURITIES target and made a weak debut Golden Belt prompts IPO a miss even though the last Wednesday. The stock company had lowered its closed 6.8% lower at Rs1,132.85 expected valuation to Rs167bn on the National Stock Exchange broader disclaimers (US$2.6bn) from Rs250bn when against the IPO price of ITûlRSTûPITCHEDûTHEûmOAT Rs1,215. „ People & Markets Docs reviewed after successful law suit The broking house-cum- investment bank raised Rs35bn as “A steep fall in the BY CHRISTOPHER SPINK “The immediate reaction to opposed to its targeted Rs40bn valuation can work the judgment by banks might be after the IPO was just 78% covered. Arrangers of debt and equity characterised as one of alarm,” “A steep fall in the valuation against an IPO. issues are strengthening the said Simon Clarke, a partner at can work against an IPO. Investors view the disclaimers they include in new LAWûlRMû(ERBERTû3MITHû&REEHILLS Investors view the management management as greedy issue offering documents in the “Some banks and their lawyers as greedy and tend to stay and tend to stay away” wake of an English court were initially attracted to putting away,” an ECM banker away judgement which found BNP in broader disclaimers but others from the deal said. Paribas culpable for losses were not keen as such broad The weakness of the broader Meanwhile, in Australia, coal incurred by investors in a sukuk disclaimers might be unpalatable market was also a factor. company RIVERSDALE RESOURCES where it was sole arranger and to potential investors.” “We had decent visibility has pushed back the bookrunner. The complicated case involved from institutions at launch, but bookbuilding of an ASX IPO of The high court decision - a mix of English law and Saudi the weak stock market failed to about A$130m (US$100m) due handed down in December and law brought as part of lengthy provide momentum. The to volatile market conditions. concerning a US$650m sukuk litigation by specialist distressed interest [from institutions] did The company, which is bond issued by GOLDEN BELT - funds. not get converted into orders,” incorporated in Australia but raised eyebrows in London legal It centred on a dispute over said a banker working on the has operations in Canada, was circles since the offering circular whether a promissory note ICICI Sec IPO. scheduled to open books last had standard disclaimers guaranteeing the sukuk had 4HEûmOATûWASûTHEûSECONDûINû Wednesday but decided to delay concerning BNP Paribas’ role, been properly signed, in person India to be undersubscribed the offerings and wait for a saying that it would not be rather than electronically, a in two weeks. State-owned better market window, responsible for liabilities requirement under Saudi law to Hindustan Aeronautics raised according to a person close to incurred. BNP Paribas is VALIDATEûTHEûSUKUKûCERTIlCATE Rs41bn instead of the Rs42bn the deal. „ appealing. The guarantor and ultimate h4HISûISûTHEûlRSTûTIMEûINû borrower was Saudi English law that a duty of care construction group Saad, which euro debt for new bonds M&A bonds were trading well has been found to be owed to defaulted in 2009. The overall without SMR language, but did above a cash price of 101. investors by a bank which has debt agreement was written not get enough interest to swap In 2015, for example, when assisted a borrower to arrange a under English law. The English the £1bn sterling issue. Sysco’s merger with US Foods publicly listed securities issue,” court found against BNP Paribas was abandoned, its SMRs were according to a note from law for negligence over the CLAUSE FOR PAUSE trading above 113. But holders lRMû!SHURST documentation. Thursday’s offer may also test were redeemed at 101. In most disputes investors Distressed funds Cyrus and market sentiment about SMRs, have targeted legal action Fortress bought the sukuk claims which have been a disputed against issuers rather than in the secondary market, further topic among investors. “We do not see any advisers or bankers. complicating the proceedings as Many buysiders feel they reason why investors “Notwithstanding the they had not been party to the should get more than just the would participate in pending appeal, arrangers have original agreement but only standard 101 cash price when the cash tender. The been reacting to the judgement taken it on by buying the bonds mergers do not consummate in takeout price is 100.25, and inserting new disclaimers,” at a later stage. order to account for, among below the SMR of said Christopher Hardingham, a The International Capital other things, heightened rates debt capital markets lawyer at Markets Association has not risk. 101.00” LAWûlRMû!SHURST made any recommendation on -!ûlNANCINGSûAREûNOWû “This started mainly with whether arranging banks should regularly undertaken well before According to CreditSights, Middle East issuers but is modify their disclaimers on new the actual mergers take place. AT&T has the money to redeem increasingly being seen in issues written under English For instance, AT&T sold these all the M&A debt if it has to, investment grade issues law, leaving it up to individual bonds in July 2017, leaving with around US$50.5bn of cash elsewhere written under English banks to decide. nearly a nine-month window on balance sheet as of the fourth law.” “If you go too far in before the SMR kicks in. quarter of 2017. However, some in the market disclaimers then the regulator, 7HILEûTHEûOFlCIALûDEADLINEûFORû But the redemptions are have argued against inserting and the issuer itself, may not the AT&T/Time Warner merger expensive, not least because broader disclaimers as a way of like that. You can never absolve has been extended by two AT&T has been paying interest preventing other investors from yourself from everything,” said months, that has no effect on for eight months already. targeting arrangers in the another lawyer. the April 22 date in the bond By IFR’s calculations it would future. They say that the case is h9ES ûITûWASûTHEûlRSTûTIMEûTHATû indentures. have accrued interest of at least being appealed in any case and a disclaimer for arrangers has In many cases when mergers US$850m on the dollar, euro and HADûVERYûSPECIlCûFACTSûANDû not worked but people shouldn’t have been blocked, the underlying sterling bonds by April 22. „ circumstances. get too carried away.” „

International Financing Review March 31 2018 7 Top news Spotify releases numbers ahead of landmark direct listing „ Equities Music-streaming company sees revenue growing up to 30% this year

BY STEPHEN LACEY disciplined they are [at] Converting users from free to cost of storing user data with managing the business,” said pay is integral to achieving a Alphabet, the parent of Google, SPOTIFY TECHNOLOGY has Rohit Kulkarni, managing PROlT ISûALSOûSIGNIlCANT announced it expects to grow director and head of research at Including €35m–€40m of Spotify projects a gross revenue by as much as 30% and SharesPost. expenses associated with the margin this year of 23%-25%, up narrow losses in 2018, as it gears “Spotify is consistently direct listing, Spotify expects from 13.6% ahead of the record up for its direct listing this week increasing the conversion rate of operating losses this year to label deal in 2016 and 20.8% in on the New York Stock free to paid subscribers.” narrow to €230m–€330m, from 2017. It is targeting longer-term Exchange. The company estimates the €378m in 2017. gross margins of 30%-35%. The music-streaming number of premium subscribers Gross margin, on which company’s decision to publicly GREWûINûTHEûlRSTûQUARTERûBYû “The fact that they are potential investors seem to be disclose forward guidance is between 2m and 5m to 73m– focusing, represents only the unusual for new US stock 76m - an unusually wide providing guidance cost of providing the streaming listings, but Spotify is anything number, especially given that across a variety of service (such as music royalties) but conventional. the quarter-end was just days metrics shows how but excludes other expenses Rather than raising funds away. But it said its forecasts disciplined they are [at] (such as salaries, data storage, through an IPO - it says it doesn’t were “subject to substantial managing the business” R&D and much more). need the money - the company is uncertainty”. “That gross margins will cutting out some Wall Street By year-end, Spotify expects to approach 25% is a sign of the middlemen and listing directly have 92m-96m paying A licensing deal inked last ONGOINGûBENElTûOFûTHEIRû on the NYSE on April 3. subscribers - a heady 30%-35% YEARûWITHûlVEûMAJORûMUSICû relationship with the big music “The fact that they are increase from the 71m at the labels is a big reason for labels,” said Kulkarni. “We still providing guidance across a end of 2017 - and 198m-208m improved operating economics. don’t have an answer on when variety of metrics shows how users overall. !NOTHERûAGREEMENTûTOûlXûTHEû THEYûWILLûBEûPROlTABLEv WuXi AppTec to relist via IPO

„ Equities US-delisted biotech company clears hearing for Rmb5.74bn Shanghai float

BY KEN WANG, FIONA LAU “The IPO approval shows that AMIDûINTENSIlEDûCOMPETITIONû Foxconn Industrial Internet, a the regulator welcomes with exchanges in the US and mainland unit of Taiwan’s WUXI APPTEC is set to become overseas-delisted companies to Hong Kong. &OXCONN ûISûTHEûlRSTûHIGH PROlLEû THEûlRSTû#HINESEûCOMPANYûINû list in the A-share market, if they As part of its efforts, the tech company to enjoy this recent years to relist in the are of high quality and in line regulator plans to introduce privilege for a proposed A-share A-share market through an IPO with the regulator’s strategy to Chinese Depositary Receipts as IPO. That deal, too, still awaits after being delisted from an promote listings of new soon as this year to allow written approval. overseas bourse, in a further economy industries,” said a QUALIlEDûOVERSEAS INCORPORATEDû 7U8Iû!PP4ECûlLEDûITSû)0/û push from regulators to attract banker on the transaction. entities to list in the domestic application last July after listings from the “new Prior to WuXi AppTec, market. delisting from the NYSE in 2015. economy”. software maker 360 Security Last June, the company spun The biotechnology company Technology in February became “The valuation of the off and listed its open-access cleared a China Securities THEûlRSTûFORMERûOVERSEAS LISTEDû healthcare sector is biologics technology unit WuXi Regulatory Commission hearing company to relist in the A-share at a high level in the Biologics in Hong Kong in a last Tuesday for a proposed market since mid-2016, but this HK$3.98bn (US$511m) IPO. Shanghai IPO of about was via a reverse takeover. A-share market, so WuXi Biologics’ share price has Rmb5.74bn (US$914m). The Relisting through an IPO is WuXi AppTec will more than tripled since listing. mOAT ûHOWEVER ûSTILLûNEEDSû MOREûDIFlCULT ûESPECIALLYûSINCEû have a huge upside written CSRC approval. THEû#32#ûSIGNIlCANTLYûINCREASEDû potential after listing” HEALTHCARE RALLY Chinese companies that were its IPO rejection rate at the end Investors are showing keen formerly listed overseas have of last year. The regulators are also fast- interest in WuXi AppTec’s IPO in faced regulatory uncertainty tracking large tech IPOs on the midst of a stock rally in the over their ability to gain a TECH LISTINGS domestic stock exchanges, healthcare sector. The China domestic listing since the CSRC 7U8Iû!PP4ECSûmOATûISûSEENûASû allowing them to bypass the Securities Index 300 Health Care banned such relistings in May further evidence that the CSRC long queue of listing Index has risen nearly 30% in the 2016. is keen to attract tech listings applications. past 12 months.

8 International Financing Review March 31 2018 For daily news stories @ visit www.ifre.com

REVENUE GROWTH unlikely sellers, while Sony Spotify expects revenue to grow Music may be motivated to hold Jumbo deal for Akzo by as much as 29.6% this year to for strategic reasons. €5.3bn, based on a €4.9bn– No doubt, retail-jockeying Nobel unit LBO €5.3bn range and on top of the will distort fundamentals in the 38.6% growth last year. early days. The bigger question „ Loans Up to €7.3bn of financing expected before summer What that will all mean when is whether the initial trading Spotify debuts in the market is really matters. BY CLAIRE RUCKIN equivalent of senior leveraged anyone’s guess. But in October, Spotify is not raising any loans, mostly denominated in Kulkarni said the company money, and points to free Banks have lined up as much as 53ûDOLLARSûTOûMATCHûCASHmOWS û could go public at a valuation CASHmOWûASûONEûREASONûFORûTHEû €7.3bn-equivalent of debt to but is still likely to include up to exceeding US$21bn, or more direct listing. Another is to put back the buyout of AKZO NOBEL’s €1.5bn-€2bn of euro- than US$100 per share. shareholders on an equal chemicals business, the latest denominated loans. footing to sell, without any IPO jumbo cross-border leveraged That suggests the euro piece discount. lNANCINGûTOûHITûTHEûLOANûANDû will become the second largest “We still don’t have Direct listing is something bond markets. single-tranche euro- an answer on when that other, deep-pocketed, Akzo Nobel is selling the denominated term loan B since they will be profitable” well-known private companies business to Carlyle Group and THEûlNANCIALûCRISIS ûBEHINDû are certain to entertain in Singapore’s GIC for a slightly Flora’s €2bn TLB. future. While the costs of better than expected enterprise DOINGûSOûAREûNOTûINSIGNIlCANT û value of €10.1bn. MUCHûOFûTHEûMONEYûISûmOWINGûTOû Barclays, HSBC and JP Morgan “It’s been long awaited Privately, Spotify shares have lawyers rather than to Wall AREûLEADINGûTHEûlNANCINGû by the markets and is traded as low as US$48.93 and as Street. alongside Citigroup, Credit Suisse, one that everyone will high as US$131.88 this year, Investment banks are playing Deutsche Bank, RBC and UBS. want to get a piece of” through March 14. a limited role. Citadel Securities, a Other banks could also join, Of the 203.9m fully diluted non-conventional choice, is given the deal’s vast size. shares outstanding, all but the acting as market-maker with The new-money deal is set to “While it is very large, it is not 16.2m held by China’s TenCent advice from Morgan Stanley, with be well received by investors, SOûLARGEûTHATûITûWILLûREDElNEûTHEû are freely tradable immediately. Goldman Sachs and Allen & keen for fresh paper to put CLO European market in terms of That said, founders Daniel Ek CompanyûACTINGûASûlNANCIALû and managed-account cash into. capacity. While it is a European- and Martin Lorentzon are advisers. „ “It’s been long awaited by the led deal, it is calling on both markets and is one that markets and shouldn’t stretch everyone will want to get a piece either. It falls squarely into the “The valuation of the Wanlian analysts forecast that of,” a syndicate head said. realms of deals investors want to healthcare sector is at a high the size of the market will reach The deal follows soon after look at as it is big and liquid, but level in the A-share market, Rmb100bn by 2020, or a the €4.7bn-equivalent leveraged not so big there is danger of so WuXi AppTec will have compound annual growth rate LOANûlNANCINGûBACKINGû++2Sû overhang,” the second syndicate a huge upside potential after of more than 20%, thanks to buyout of Unilever’s spreads head said. listing, given there is a China’s growing business, Flora Food Group. The deal is expected to launch valuation cap for A-share pharmaceutical demand, rising “The track record of sponsors for syndication to investors before IPOs,” said an institutional expenditure on drug R&D, and a buying large deals out of large the summer and is likely to be in investor. gradual shift of the industry conglomerates has been the market at much the same “The company is very towards emerging countries. extremely strong. There are a lot time as the US$8bn-equivalent attractive, because of its big of levers they can pull - the term loan B backing US private business scale and its leading “The company is very ability to run businesses more EQUITYûlRMû"LACKSTONEû'ROUPSû position in a fast-growing attractive, because of EFlCIENTLYûORûMOREû acquisition of a majority stake in industry,” said the investor. its big business scale commercially and make better Thomson Reuters’ Financial and WuXi AppTec is a leading use of the assets they have. It Risk unit, as the pipeline of jumbo GLOBALûCONTRACTûRESEARCHûlRMûFORû and its leading position feels like the sort of deal PE CROSS BORDERûlNANCINGSûBUILDS the pharmaceutical, in a fast-growing should be good at and plays into Blackstone is buying a 55% biotechnology, and medical industry” [their] strengths,” a second stake in F&R, which includes IFR. device industries. It provides syndicate head said. "ANKSûAREûCONlDENTûTHATûTHEREû services throughout the drug will be appetite when these research and development WuXi AppTec plans to sell no CHEMICAL REACTION deals launch for syndication, process. more than 104m shares, or 4HEûlNANCINGûBACKINGûTHEû!KZOû REMOVINGûANYûSIGNIlCANTûFEARSû The company posted net about 10% of its enlarged deal equates to around 6.4 times of holding large underwrites on PROlTûOFû2MBBNûONû capital. the chemicals unit’s balance sheets for the next few revenues of Rmb5.68bn for the Huatai United Securities is the approximately €1bn Ebitda and months. lRSTûNINEûMONTHSûOFû sponsor and joint bookrunner is set to comprise €6.5bn- “The market took Flora, and it China’s contract research with Guotai Junan Securities. equivalent of funded debt and is not like a snake that has market grew to about Rmb56bn Proceeds will be used for around €700m-€800m of swallowed a pig and can’t eat for in 2017 from Rmb14bn in 2011, pharmaceutical and biotech undrawn facilities. the next three months. There is according to a report from projects, as well as working The funded debt is expected appetite,” the second syndicate Wanlian Securities. capital. „ to include around €5bn- head said. „

International Financing Review March 31 2018 9 Top news US junk bond sales hit choppy market

„ Bonds/Loans New bond issues struggle but leveraged loan market proves more resilient

BY DAVIDE SCIGLIUZZO, Goldman Sachs Asset Management. yield on the remaining tranche debt. It also changed its mix of PAULINE RENAUD, ANDREW BERLIN “There is less forbearance some 200bp above the level dollar and euro term loans to towards disappointment in initially eyed. decrease the overall amount. Some cracks have emerged in markets today and investors are 4HEûACCOMPANYINGûlRSTûLIENû the US junk bond market, where less willing to take a leap of faith loan was also increased by NEGATIVE SENTIMENT investors pushed back against in certain names.” US$200m to US$2.26bn, with Some say investors are some of the largest bond sales of McDermott’s and Coty’s pricing increased to 500bp in particularly reluctant to buy the week after getting stung by struggle contrasts with a syndication from 400bp–425bp paper with long maturities from recent new issues. relatively positive backdrop for and the OID widened to 99 from borrowers that are highly Engineering and construction the global economy and 99.5. leveraged or in challenging company MCDERMOTT corporate earnings that sectors. INTERNATIONAL and beauty investors say are still supportive “Investors are less And that negative sentiment products maker COTY were both for high-yield borrowers, even as has seeped into the secondary forced to cut the size of new the Federal Reserve continues to willing to take a leap of market. Bonds recently issued by bond offerings and hike yields raise interest rates. faith in certain names” Frontier Communications, JC after receiving lukewarm “The market overall has been a Penney and Teva Pharmaceutical demand from the buyside. little bit challenged,” Brian Kloss, Industries have all dropped by The disappointing head of high-yield at investment several points in trading, performance of some recent manager Brandywine Global, according to MarketAxess data. new issues has hit investor told IFR. “But if you look at global The moves came only a day sentiment, resulting in a more growth, we think it looks after beauty products maker REVISED TERMS cautious approach to the reasonable.” Coty similarly dropped the McDermott had begun sounding primary market. McDermott, which serves the longest-dated portion of a four- out investor appetite for a “The new issue market has been oil and gas industry, dropped the part, dual-currency junk bond US$950m six-year and a very choppy,” said Michael longer-dated tranche of its two- sale through which it had US$550m eight-year at yields of Goldstein, co-head of global high- part bond offering on initially planned to raise mid 8%s and high 8%s, yield and leveraged loans at Wednesday, and pushed the 53BN EQUIVALENTûTOûRElNANCEû respectively, when it announced Two issuers switch to Dim Sum for savings versus Panda bonds „ Emerging Markets Panda bond borrowers switch to Dim Sum market, but investors increasingly look onshore

BY INA ZHOU, DANIEL STANTON when it launched a Rmb1bn of quality international names, a of up to US$60bn on Chinese debut offshore renminbi trend that bankers hope will goods. Two past Panda bond issuers offering. help narrow pricing differences A banker on the CAR Inc deal tapped the offshore renminbi This came after three offshore- between the Dim Sum and said a volatile debt market made MARKETûFORûTHEûlRSTûTIMEûLASTû incorporated Chinese developers Panda markets. THINGSûDIFlCULTûFORûNEWûISSUESûINû week, adding to a growing list of made the switch from Panda to general, and particularly for borrowers who have been drawn Dim Sum bonds earlier: Jinmao Volatile debt market Double B rated names, as to the Dim Sum market by Holdings Group, Shimao made things difficult for investors lacked risk appetite. attractive pricing. Property Holdings and Country On the other hand, currency Chinese car rental company Garden. new issues in general, appreciation raised interest in CAR INC, rated Ba3/BB Market participants pointed and particularly for renminbi assets, he said. (Moody’s/S&P), raised Rmb400m out that more Panda bond Double B rated names CAR Inc priced 6.50% three- (US$63m) from a maiden issuers might look to lock in year non-call two Dim Sum offering of Dim Sum bonds, cheaper funding in the offshore notes at 98.80 to yield 6.95% on about one year after it visited the renminbi market. DELICATE TIMING Monday. CAR Inc’s Dim Sum Panda bond market. Meanwhile, investors have Last week’s Dim Sum deals were offering would have saved it German vehicle-maker increasingly been looking launched as the renminbi was 10bp–20bp compared with DAIMLER (A2/A/A–), a veteran onshore for the relative value of strengthening after US President issuing US dollar notes, Panda issuer, followed suit Panda bonds, particularly those Donald Trump announced tariffs according to the banker.

10 International Financing Review March 31 2018 For daily news stories @ visit www.ifre.com

the deal on Monday, sources 6%–6.25% area and whispers of facing operating challenges, However, while the high-yield familiar with the matter told IFR. high 5% area initially eyed, according to Moody’s, which bond market is struggling, the It later revised those levels to sources told IFR. downgraded the company to leveraged loan market is high nines and low 10s before Pricing also moved wider on Ba3 this month. The agency proving more resilient. eventually deciding to drop the the euro-denominated tranches, rates the notes B2. The company “One area of the market that eight-year portion and shift WITHûlNALûYIELDSûCOMINGûATûû is rated BB by S&P. continues to power ahead with US$350m to the shorter tranche and 4.75% respectively from 3% little sign of stress is the and US$200m to a term loan area and 4% area initially. SPEED BUMPS leveraged loan market. With marketed alongside the notes, The bond offering is part of a A US$645m bond sale backing Libor moving higher and fewer the sources said. broader US$8bn-equivalent Clayton Dubilier & Rice’s RElNANCINGS ûLEVERAGEûLOANû "UTûBYûTHEûTIMEûITûSETûOFlCIALû RElNANCINGûOFûITSûALL LOANûDEBTû acquisition of Ply Gem Holdings investors are enjoying the price talk on Wednesday, pricing load. and Atrium Windows & Doors returns that come with higher on the remaining six-year “They’re coming at a pretty was also hitting some speed Libor,” said Goldstein. tranche had moved all the way bad time, just before Easter. bumps on Wednesday. “The economics of owning up to the 10.5% area, or some Also, if you view it as a Single B, leveraged loans are becoming 200bp wide to the initial you need to be paid for the risk more compelling compared to whisper. of being unsecured with no “The economics of those of the high-yield and Offshore-focused McDermott covenant. I think when they owning leveraged investment-grade market. In is selling the debt to help came with the initial whispers, loans are becoming ADDITIONûTOûINmOWSûONûAûFUNDû lNANCEûITSûACQUISITIONûOFû people said they were not more compelling mOWûBASIS ûTHEREûISûAûLOTûOFû Chicago Bridge & Iron, in a deal interested,” said one investor, compared to those demand from CLO investors.” that will give it a foothold in the who also pointed to the lack of Barclays is the lead onshore market for oil and gas appetite for longer paper in an of the high-yield and bookrunner on McDermott’s services. acquisitive name like Coty. investment-grade bond sale, which is rated Only a day before, Coty The company accumulated a market” B2/B-, while Deutsche Bank is similarly cut the size of its bond large amount of debt in 2016 the lead on the bond for Ply offering to US$1.5bn-equivalent when it bought the beauty Price talk on the deal was set Gem and Atrium, which is from US$2bn initially sought, products division of Procter & at 7.75%–8%, wide to whispers of expected to be rated Caa1/CCC+. after removing a US dollar 10- Gamble. It will now make up for the low 7% area that had Both are scheduled to price on year from its offering, which the smaller bond and loan size circulated earlier in the week. Thursday. ALSOûINCLUDESûlVE YEARûANDûEIGHT with balance sheet cash and a The deal also includes a Morgan Stanley and BNP year tranches in euros. revolver drawdown. US$1.755bn Term Loan B, which Paribas, respectively, led the US It priced the remaining eight- Coty has struggled to reduce priced at 375bp, after being dollar and euro portions of the year US dollar tranche at 6.5%, leverage as it continued to pay launched with guidance of Coty deal, which is rated B2/BB which was wide to price talk of generous dividends despite 300bp–325bp. and priced on Wednesday. „

The next day, Daimler sold become more expensive than He also said a reviving Dim OFûlVE YEARûNOTESûATûPARûTOûYIELDû three-year notes at par to yield Dim Sum notes particularly for Sum market was not necessarily 6.4%. 4.80%, as the Chinese currency quality international credits like bad news for Panda bonds, as Offshore investors are also rose to a seven-week high Daimler.” interest has been growing from starting to move onshore. against the dollar, a sign Daimler has been selling international investors towards Desmond Soon, head of interpreted by the market as Panda bonds since March 2014 the higher-yielding Panda investment management, Asia part of China’s efforts to smooth WHENûITûBECAMEûTHEûlRSTûFOREIGNû bonds. ex-Japan, at Western Asset trade tensions with the US. corporation to sell renminbi Some investors were even Management, said WAM was bonds in China, with a willing to make the effort to doing more trades in the “Panda bonds have Rmb500m private placement register with the National Chinese interbank bond market deal. Association of Financial Market these days and working on become more expensive /VERûTHEûPASTûlVEûYEARS ûITûHASû Institutional Investors as moving more global funds into than Dim Sum notes raised Rmb30bn from Panda members in order to be able to the onshore bond market. particularly for quality bonds and still has a Panda bond buy privately placed Panda bond international credits quota of over Rmb20bn. issues by international names. Interest has been like Daimler” “A few offshore investors YIELD-CHASING intend to buy the Panda notes of growing from A banker familiar with Air Liquide and are going international investors Daimler’s Dim Sum bonds Daimler’s Panda bond through the registration towards the higher- were deep inside its Panda bond programme said opportunistic process,” said a source familiar yielding Panda bonds curve. Its 2021 5.60% Panda Dim Sum offerings could not with Air Liquide’s deal. bonds were bid at 5.58% last replace Panda bonds for the In early March, French Wednesday. vehicle-maker, as a bigger industrial gases company Air WAM has reduced the A Shanghai-based DCM and deeper onshore market Liquide, rated A3/A– proportion of US dollar assets in banker away from the deal said caters better to its large (Moody’s/S&P), privately placed its Asia bond fund by about 15% “4.80% is the pricing Daimler funding needs in China in the Rmb1.4bn of three-year notes at compared with this time last deserves. Panda bonds have long term. par to yield 5.95% and Rmb800m year. „

International Financing Review March 31 2018 11 Top news

Mannai gets Qatar back on track „ Emerging Markets First Qatari US dollar bond since spat

BY ROBERT HOGG Instead, debut borrower US$1bn October 2025 Islamic Another factor in the quasi- MANNAI CORP has put itself at the bond issue. (See story on page 4.) sovereign’s favour, according to The 10-month long hibernation front of the queue. “Qatari credits are well liked the banker away, is that it will for Qatari issuers frozen out of The conglomerate, which is in Asia,” added the banker. be an issuer from a highly rated major international markets 66% owned by entities Asian investors could look at a jurisdiction. looks set to be broken by an representing the Qatar string of regional names that have Although Mannai’s bonds will unexpected name. government and royal family, issued senior perpetual notes to be unrated, Qatar is a Double A No Qatari borrower has has named banks for a potential gauge potential value. For credit, albeit one that has seen the accessed the mainstream US US dollar senior perpetual non- EXAMPLE ûOILûRElNERû0ETRONûSOLDû yield on its June 2026 notes jump dollar market since a spat with CALLûlVEûBONDûOFFERING US$500m 4.6% senior perpetuals to just over 4% from a low 3% level Doha’s Gulf neighbours erupted Mannai will visit investors in in January, while Philippine peer before the breakdown in relations. in June when Saudi Arabia, the Switzerland, London and Asia. ICTSI raised US$350m through United Arab Emirates and A lead banker reckoned there ûlXED FOR LIFEûNOTES TREADING A TIGHTROPE Bahrain cut diplomatic ties and are few direct comparables for the Perpetuals are costlier than For investors, there should be no imposed an economic boycott, bond from a company that has dated senior bonds, and issuers problem with participating in protesting against Qatar’s international businesses in the IT, typically need to incorporate a the deal irrespective of the relationship with Iran. retail and automotive sectors. coupon reset and a hefty step-up bigger political issues. Although Market participants had One banker away from the deal if not called in order to attract some banks have been treading a expected that the sovereign or expects the transaction to go investors. tightrope in the region, fearful national champion Qatar well, assuming the market Petron’s deal, which that close ties with Doha could National Bank would lead the doesn’t suffer a meltdown. “It’s incorporated both resets and hurt business relations with way in testing investor appetite. quite gutsy timing given that step-up, demonstrated that Saudi Arabia, investors are likely But nothing has been Bahrain is paying a 100bp dynamic by seeing stronger to be far less sensitive, especially forthcoming bar some deals by premium but there should be support than ICTSI, which given the potential yield on offer. Qatari lenders, including QNB, in good demand from Asia,” he said. had neither. Mannai’s notes Bank of America Merrill Lynch is niche markets such as the Last week Bahrain paid a will have a 500bp coupon global coordinator. The US bank Australian dollar, Swiss franc and huge pick-up over its March step-up if the notes are not is joined by Nomura and Standard Taiwanese Formosa. 2025 sukuk offering for a called. Chartered as lead managers. „

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12 International Financing Review March 31 2018 People &Markets

London keeps Technology Wall Street 15 its crown as 17 banker Jan 19 bonuses jump the leading financial Metzger is to run Citi’s 17% to an average centre, but its lead investment bank in US$184,220 - the over New York and Asia as the bank bets second highest ever Asian rivals narrows tech will stay lively payday

„ FRONT STORY PAY Mind the bonus gap: Men get 66% more Men’s awards dwarf women’s at 20 London investment banks

Bonuses paid to men were 66% bigger than differences in pay between men and women. UBS’s report added: “This disclosure on awards to women on average across the big !LLûMAJORûBANKSûHAVEûNOWûlLEDûTHEIRûREPORTS gender pay gap demonstrates the ongoing corporate and investment banks in London last CHALLENGEûTHATûTHEûlNANCIALûSERVICESûSECTORû year, according to the most comprehensive TAKING TIME faces in ensuring that there is a balanced gender pay details ever released. Banks blamed the gap on the dominance of representation of women in senior levels.” The gulf in bonuses left men earning on men in senior positions, built up over years and Anne Marie Verstraeten, UK country head average 42% more per hour than women at taking time to level out. Several executives for France’s BNP Paribas, said banking the banks, based on IFR calculations of the acknowledged more needs to be done. WOULDûBENElTûFROMûFASTERûCHANGE submitted data from 20 major UK and “Unfortunately, the gender pay gap is an “We need more women in senior, front- international banks (see chart page 19). issue across the investment banking sector OFlCEûANDûTECHNICALûROLESû7EûHAVEû The disparity in bonuses shows men ANDûTHEûlNANCIALûSERVICESûINDUSTRYûASûAû initiatives, both in place and planned, to continue to dominate senior positions in whole,” said Robert Rooney, CEO of Morgan drive the change we need,” Verstraeten said. banking: women occupied just 17% of the top Stanley International. “Diversity is a business imperative. It QUARTILEûJOBSûACROSSûTHEûlRMSûASSESSEDûBYû)&2 “There is much more work to do. We fosters better decision making, enriches our All 20 banks showed a big gap in average acknowledge that meaningful and talent pool and drives innovation,” she pay for men and women and an even bigger sustainable change will take time. We added. gap in bonuses. reiterate our strong commitment to Bankers say a problem is that while many The bonus gap - calculated by the develop, promote and retain talented banks employ just as many women as men, difference between average awards to men WOMENûACROSSûTHEûlRMûANDûMAKEûTHISû women often don’t progress beyond middle and average awards to women - was 86% at change happen,” Rooney said in the bank’s management or see career progression stall HSBC UK and over 70% at the international UK gender pay report. in their 30s, leaving men to advance towards divisions of BARCLAYS, GOLDMAN SACHS, CREDIT the top jobs. GENDER PAY AND BONUS GAP AT LONDON SUISSE, NOMURA and SOCIETE GENERALE. Only Deutsche Bank said part of the reason for INVESTMENT BANKS SUMITOMO MITSUI’s European arm had a bonus its wide gender pay gap was also because it gap narrower than 50%. GAP BETWEEN PAY FOR MEN AND WOMEN, recruits a lot of people from science, The overall hourly gender pay gap was AND SHARE OF MEN IN TOP QUARTILE JOBS technology, engineering and mathematics more than 50% at HSBC, Goldman, Credit % backgrounds, and the majority from those Suisse, JP MORGAN SECURITIES, MORGAN STANLEY 90 backgrounds are men. EMPLOYMENT SERVICES and RBC EUROPE. Only BANK 80 Banks said the gender pay gap should not OF AMERICA MERRILL LYNCH UK had an average 70 be confused with equal pay. While the pay gap of less than 30%. gender pay gap is the average pay difference 60 Not all the data are directly comparable as between men and women, irrespective of BANKSûREPORTEDûlGURESûFORûDIVISIONSûTHATû 50 role or level, equal pay is ensuring men and varied in size and who it included. Data from 40 women are paid equally for the same or some banks included retail banking staff, 30 similar role. where the gender pay gap is narrower than in JP Morgan, for example, said its most 20 investment banking. Where possible, IFR recent review of pay globally showed that used data for divisions that included the 10 for base salary and total compensation, corporate and investment banks. 0 women are paid 99% of what men are paid - Mean gender Mean gender Men in upper Britain is forcing all companies with more pay gap bonus gap quartile jobs but only after adjusting for factors such as than 250 staff to submit details of pay by Source: Company UK Gender Pay Gap reports 2017, and role, tenure, seniority and geography. gender by April 5 to shine a light on UK government gender pay gap reporting website Steve Slater

International Financing Review March 31 2018 13 “You’re trying to smell a deal and then you’re like a puppy dog jumping up and down” CITI’S NEW ASIA CIB CHIEF JAN METZGER ON INVESTMENT BANKS, AND WHY HE PREFERS CITI’S BROADER APPROACH, P17

Bank M&A set to move back on radar

Big banks may be ready to make a splash in size deals in order to increase scale in regulations around bank secrecy and anti- M&A after a long hiatus, which could see businesses that are higher return or in money laundering. the likes of JP MORGAN and GOLDMAN SACHS businesses that will lead to scale and Scale is making more of a difference getting acquisitive from next year. EFlCIENCYûOPPORTUNITIES vû+LEINHANZLûSAID than ever before, especially when it comes That would certainly be a shift. Financial !MONGûlRMSûTHATûMAYûBEûINûPLAYûFORû to technology, said Wells Fargo bank institutions, banks and brokerages in takeovers are WisdomTree investments, analyst Mike Mayo. particular have largely sat out the booming Global Payments, Square Discover “Right now it’s an advantageous window M&A cycle of the last several years. Financial Services, Synchrony Financial to pursue acquisitions for banks between The value of bank and brokerage M&A and others with a combined market cap US$20bn and US$120bn, given the transactions fell 21% last year to US$98bn above US$125bn - more than the deal value fundamentals and the regulatory and in the current quarter the value of in the sector for any year since 2012. environment,” Mayo said. transactions is down 49% from a year ago to Realistically, however, none of these US$10.7bn, according to Thomson Financial. transactions are likely to be pursued EUROPEAN DEALS? But universal banks have moved from anytime soon, leaving the bulk of In Europe, bank executives have been talking divesting businesses to looking at transaction for smaller banks. more about the possibility of M&A activity ACQUISITIONSûFORûGROWTHûORûTOûlLLûINû There are two potential catalysts for than they have in recent years, although the functionality, said KBW analyst Brian DEALSûATûSMALLERûBANKSû4HEûlRSTûISûTHATû53û threat of higher capital costs and the added Kleinhanzl. While most excess capital is Congress is gearing up to lift the threshold complexity deals bring are likely to deter most currently used for stock buybacks that may for regulating systemically important cross-border deals for a while, bankers said. begin to change. banks to US$250bn from US$50bn. The Germany’s COMMERZBANK is seen as a “Over time, we believe universal banks second is that most of the banks have possible target for rivals including BNP will return to the M&A market in larger- created the systems to comply with PARIBAS and UNICREDIT. Banks reassured on Brexit transition deal

4HEû"ANKûOFû%NGLANDûSAIDûlNANCEû WILLûNOTûBEûFORMALLYûRATIlEDûBYû It remains to be seen if European companies operating in Britain will have governments until the autumn and any lNANCIALûREGULATORSûWILLûSAYûTHATû"RITISHû more time to meet a Brexit deadline, in a deal could collapse if there is domestic banks that do business in the bloc can use move aimed at avoiding a potentially political upheaval in the months before the transition deal to take more time to get disorderly shift of people and operations Britain leaves. clearance for their operations in the EU. across the continent. In a letter to banks, the BoE sought to Stephen Jones, the chief executive of Britain and the European Union this reassure companies they can rely on the trade body UK Finance, said EU regulators month agreed a transition period of 21 transition period to ease their adjustment must provide similar reassurance. months that will follow Britain’s departure to Brexit. “Without similar assurances from EU from the bloc in March 2019, during which Companies will be able “to plan that REGULATORS û5+ BASEDûlRMSûSERVINGûCUSTOMERSûINû companies will have unchanged access to they will be able to continue undertaking the EU will be forced to continue implementing the bloc’s markets. these activities during the implementation costly contingency plans,” he said. Many banks have said they will not be period in much the same way as now,” the Currently, banks such as Deutsche Bank, able to rely on such a political deal as it BoE said. BNP Paribas and Societe Generale operate Who’s moving where…

LLOYDS BANK has corporate DCM, will BARCLAYS has Cormac Walsh will now promoted David head a combined appointed Finbar lead LatAm credit Carmalt (left) to head infrastructure group Cooke as head of its trading. That team has of debt capital across corporates and credit trading business recently hired Sean markets, a source said. markets, aimed at for CEEMEA. Cooke Kelly from Claren Road Carmalt was previously creating a single route has spent the past two Asset Management head of financial for origination, years in New York and Harrison Kivowitz institutions in DCM. He structuring and leading Barclays’ Latin from BAML. Barclays will continue to report execution. Bankers in America credit trading has also hired Tolga to Allen Appen, head the global corporates desk and will keep Kirby from BNP of bond financing. infrastructure group overall responsibility Paribas as a senior EM Guillaume Fleuti, will now report to for LatAm trading, but credit trader. formerly head of Fleuti. will move to London.

14 International Financing Review March 31 2018 People &Markets

But beyond that, bankers reckon smaller deals are more likely as strong banks try to London keeps crown as financial KICK STARTûGROWTHûANDûWEAKERûlRMSû continue to shed assets. centre... just More multi-billion-euro Italian loan London maintained its position as the No other European city ranked in portfolios are likely to swap hands as part WORLDSûLEADINGûlNANCIALûCENTRE ûTHOUGHûITSû GFCI’s top 10, however, and most had of a clean-up of non-performing loans in lead over second-placed New York and slipped down the rankings in the past the country, and asset management could rivals including Hong Kong and Singapore six months. also be an area where several banks look to narrowed as Brexit nears. :URICHûWASûTHEûNEXTûHIGHESTû%UROPEANû bulk up, bankers said. ,ONDONûRANKEDûlRSTûINûTHEûLATESTû:9ENû city in 16th place, while Frankfurt was Executives speaking at Morgan GLOBALûlNANCIALûCENTRESûINDEXû'&#) û 20th, Paris was 24th and Dublin ranked Stanley’s European banking conference in WHICHûRANKSûûlNANCIALûCENTRESûONûFACTORSû 31st. London this month talked more openly such as infrastructure and access to high The GFCI report said London ranked about consolidation and in a poll at the quality staff. lRSTûFORûBUSINESSûENVIRONMENT û event 8% of investors said M&A But London’s lead over New York was infrastructure and reputation. Hong opportunities represented the biggest just one point, compared with 24 points in Kong scored highest for human capital, opportunity for European banks over the the last poll released in September. ANDû.EWû9ORKûRANKEDûHIGHESTûFORûlNANCIALû next two years. The cities are ranked out of 1,000. sector development. Those three cities But analysts were cool on the prospect. London scored 794, up 14 points from 780 ranked in the three top spots in each “2018 will see more of the same, in our in the last report. New York scored 793, up category. view: intra-market tie-ups, particularly in 37 from September, while Hong Kong had Steve Slater 3PAINûANDû)TALY ûlNTECHûINVESTMENTSûANDû 781 points (up 37), Singapore was on 765 bolt on geographical or business deals,” (up 23) and Tokyo scored 749 (up 24). Morgan Stanley analysts said after the They were followed by Shanghai, WORLD’S TOP FINANCIAL CITIES conference. Toronto, San Francisco, Sydney and THE TOP FIVE CITIES FOR FINANCIAL SERVICES, Philip Scipio Boston. AND SELECTED OTHERS The GFCI report said the results showed Score signs of preference for stronger and more 800

established centres, as the scores for the 700 in Britain under EU ‘passporting’ rules top 25 centres all rose, but ratings fell for 600 which are due to expire when Britain the lowest 50 centres. leaves the bloc. The UK is due to leave the European 500 The BoE said the government has Union at the end of March 2019, although 400 committed to introduce legislation to transitional arrangements are set to be in 300 ALLOWûlRMSûTOûCONTINUEûTHEIRûACTIVITIESûFORû place for 21 months after that. There have 200 a limited period after leaving the EU. been fears since the Brexit vote in June In the unlikely event that the 2016 that London will lose its pre-eminent 100 WITHDRAWALûDEALûISûNOTûRATIlEDûTHISûWILLû STATUSûASûAûlNANCIALûCENTRE ûANDûJOBSûANDû 0 provide a back-stop for companies to business will shift to other EU cities, New Tokyo continue their operations, the BoE said. York or elsewhere. London New York Paris (24)Paris Singapore Zurich (16) Dublin (31) Toronto (7) Toronto %ARLIERûTHISûMONTH û"RITAINSûlNANCEû The GFCI report said respondents Hong Kong Shanghai (6) minister Philip Hammond said once the described the impact of Brexit on the Frankfurt (20) San Francisco (8) transition was agreed regulators should business environment as a major source of tell companies they can rely upon it. UNCERTAINTYûFORûALLûlNANCIALûCENTRES ûNOTû Source: Z/Yen Global Financial Centres Index 23. Scores are out Andrew MacAskill just London. of 1,000

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CITIGROUP has Europe and Europe Veteran debt capital Scotland’s DCM fixed appointed Cecilia cluster head. Ronan markets banker Tim income team, which he Ronan as its country joined Citi in 2000 and Skeet is set to return to joined in April 2011, but head for Ireland, in held a number of the market after more was put at risk at the addition to her role as senior roles across than two years out, end of 2015. He is chief administrative Europe in operations sources said. They said currently a senior officer for Citibank and technology. She Skeet is heading to adviser at the Europe, its major previously worked for BANK OF CHINA to International Capital business Microsoft. Citi has work on coverage for Market Association. headquartered in more than 2,500 western Europe BoC has been actively Dublin. Ronan will people in Ireland. financial institutions. expanding its network report to Zdenek Turek, He last worked in in Europe. CEO of Citibank Royal Bank of

International Financing Review March 31 2018 15 Bellwether Bellwether: n. From the practice of placing a bell around the And as critical investors go, one unnamed shareholder was even neck of a castrated ram so that it might lead its flock quoted as saying that the embattled CEO was “not the person who will lead the bank into the next millennium”. Given that he was IT’S EASTER, SO it’s time for the resurrection of JC. No, not that JC, referring to a period in the future that is 982 years away, it shows but the banking one. Deutsche Bank’s John Cryan to be precise. the high expectations even Deutsche investors still have. Yes, he had a tricky week – things were already going badly at the investment bank when news emerged that he’d MEANWHILE, UBS’ US equity strategy chief Keith Parker had a row with his chairman Paul Achleitner, who it seems has warned millennials that they must avoid one big is actively searching for a replacement CEO. “temptation” if they want to properly save money. "UTû*#ûCAMEûBACKûlGHTINGûTOûCLAIMûTHATûNEWSûOFûHISû Bellwether doesn’t think he was referring to avocados death was premature. Cryan said in a memo to staff he was (millennials are alleged to eat too many of them), but we “absolutely committed” to the German bank, despite dozens can’t be sure, because to read the contents of the interview, of news stories to the contrary. millennials – and indeed those of more advanced years – “Once again we are the subject of widespread rumours,” were taken to a paywall and asked to subscribe. Cryan said. “There is no difference of opinion here.” The headline garnered only two comments on Facebook. Let’s see. After all, JC has proven in the past he is actually “Anyone with a Business Insider subscription want to help capable of performing miracles. out a broke millennial by telling me the contents of the article?” posted one, while another added: “You need to pay EITHER WAY, WHILE Australia’s cricketers are mired in a ball- to read this. No point in following now.” tampering scandal, the events of the last week show surely that Sounds like millennials are already careful with their money. Deutsche’s senior leadership group are guilty of CEO tampering. Clearly, someone has been caught rubbing Cryan up the WITH THE ENDûOFûTHEûlRSTûQUARTERûINVESTMENTûBANKSûAREûONCEû wrong way and everything about this saga carries more again jockeying for position in the league tables. Such is the than a hint of the bizarre. lERCELYûCOMPETITIVEûNATUREûOFûTHEûRANKINGSûTHEYûWILLûOFTENû For a start, Heidrick & Struggles sounds like the name of take roles on deals for no or minimal fees just to get league a perfectly dour Anglo-German double act that would run table credit. $EUTSCHEûSUPERBLY ûRATHERûTHANûTHEûlRMûOFûHEADHUNTERSû So surely they could apply the same rivalry to the gender apparently scaring senior bankers away. pay gap rankings and the issue would be addressed very #RYANSûCOPPEDûSOMEûHARSHûmACK ûWITHûSOMEûUNKINDLYû quickly with pay rises all round for female staff ? calling him the Antony Jenkins of Deutsche. Of course, it’s important to note that the idea is to If reports are to be believed, Cryan is also known come bottom of these tables and as things stand HSBC internally as Mr Grumpy, which compared with the rest of UK has a decent lead with a 59% gender pay gap followed Deutsche’s laugh-a-minute management board, led by the by Goldman Sachs International on 56% and Barclays hilarious Achleitner, is quite an achievement. International on 48%. Game on. „ Who’s moving where…

„ JP MORGAN has investment banking. „Bertrand Valet has „ Simon Finch was „ BAML has hired „ GOLDMAN SACHS appointed James Roddy was previously been named as BNP named chief Jason Prior as global has promoted Will Roddy global co-head head of JP Morgan’s PARIBAS’ head of investment officer of head of oil and gas Broughton to head of of diversified industries regional investment financial sponsors hedge fund MAN trading, sources said. consumer and retail and head of its North banking and M&A coverage for continental GROUP’S GLG unit. Prior will replace banking for Australia America diversified coverage. He will Europe. Valet joined Finch joined from George Cultraro, who and New Zealand after industries group within report to head of from Bank of America London-based asset will now serve as co- the resignation of its investment banking investment banking Merrill Lynch, where he management firm head of the current chief Chris division, sources said. Eric Stein. was head of France CQS, where he was commodities business, Mills. Broughton has Roddy’s predecessor coverage in its EMEA CIO, heading the firm’s one source said. Prior been with Goldman for David Walker was financial sponsors multi-asset credit was previously at over a decade and is named by JP Morgan team. Valet is based in fund. Castleton Commodities based in Melbourne. as vice chairman of Paris. and Barclays.

16 International Financing Review March 31 2018 People &Markets Citigroup picks tech banker to run Asia CIB CITIGROUP has tapped its top technology side, but on the content side. This “I have worked at a pure investment bank banker to run the corporate and appointment is line with that.” and the problem sometimes is that you’re investment bank in Asia as it bets that the Metzger, who previously spent 10 years building such an opportunistic client sector will continue to set its agenda for with Credit Suisse, including as head of relationship. You’re trying to smell a deal years to come. technology, media and telecommunications and then you’re like a puppy dog jumping Jan Metzger, who joined Citigroup in INVESTMENTûBANKINGûFORû!SIA 0ACIlC ûHASûCLOSEû up and down,” he said. November 2015, takes up the role on June ties with several tech companies in the region, “At Citi, because we have this wider array 1 to replace Mark Slaughter. Slaughter is including Alibaba, Lenovo and Samsung. of products across cash management, trade relocating to the US to become vice- He is credited with building the bank’s lNANCEûANDûDERIVATIVES ûWEREûTALKINGûTOûOURû chairman of the global CIB business. China tech IPO pipeline, having worked on clients on a much more regular basis. When Metzger was promoted early last year to several deals in the last year, including the it comes to the higher-margin investment global co-head of technology IB, alongside 53MûmOATûOFûONLINEûMICROLENDERû banking business, we already have that Herb Yeh, a position he will retain Qudian in New York and the HK$6.77bn relationship in place.” following his promotion. (US$863m) IPO of Chinese online car retailer Citigroup’s strategy is starting to pay His technology credentials were an Yixin Group. DIVIDENDSû,ASTûYEAR ûITûRANKEDûlFTHûFORû)"û important factor for Citigroup when it Metzger told IFR the bank would continue FEESûINû!SIA 0ACIlCûEX *APAN ûACCORDINGûTOû came to picking a new CIB head as the to grow its tech footprint, although he said Thomson Reuters data. It generated bank doubles down on its strategy of he favoured recruiting coverage bankers as US$522m in fees, for a 2.4% share of targeting more new economy companies. he sought to build on Slaughter’s efforts to wallet, up two places from the previous “We have essentially gone quite long tech improve coordination between the year and was edged out only by pure IB consciously,” Slaughter said. “Since Jan corporate and investment bank. player Morgan Stanley as the top global joined a couple of years ago, we have Citigroup merged its corporate and bank. gradually been adding to the team under investment banking divisions in 2009 and Slaughter said the bank was still looking him.” further stepped up integration after Gerry to grow in a number of countries, notably “We have really sought to position Keefe was appointed to the new role of head China. ourselves as leaders, not only on the product of corporate banking in 2016. Thomas Blott Deutsche rates head Wisnia leaves Sam Wisnia, head of rates and FX at DEUTSCHE stay as co-heads of global FX. All three report set up by former Goldman and DMC BANK, has left to pursue opportunities TOûHEADûOFûlXEDûINCOMEûANDûCURRENCIESûSALESû colleague Edward Eisler. Eisler Capital outside the bank, according to a person with and trading Ram Nayak. declined to comment. knowledge of the matter. Wisnia joined Deutsche in November Wisnia was appointed to head of rates in An internal memo sent to staff last week ûFROMûPRIVATEûEQUITYûlRMû$-#û0ARTNERSû May. He is not expected to be replaced also outlined that Kemal Askar would and previously worked as head of macro immediately. Wisnia was also on the corporate continue to be in charge of global rates and structuring at Goldman Sachs. Wisnia is and investment bank’s executive committee. Jonathan Tinker and Russell Lascala would expected to join Eisler Capital, a hedge fund Christopher Spink

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„ Ignacio Maldonado ECM but also covered „ Former Citigroup capital, and has now „ The heads of ING after 18 years, is leaving BAML after ECM in Turkey and the veteran Najeeb Haider been tasked with European equity moving into a new role 12 years and will take a Middle East. Before has been appointed implementing it. He syndicate at ING and as senior adviser in few months out to BAML, he was at manager for investment previously spent over SANTANDER are ECM, working across explore opportunities. Santander in ECM and operations at the ASIAN two decades with moving on, with syndicate, broking and Maldonado joined investment banking. INFRASTRUCTURE Citigroup, most recently internal replacements origination. Bjorn Krook Merrill Lynch in 2005, INVESTMENT BANK. leading its project and lined up to replace takes over Balt’s role shortly after Craig Haider spent the past 18 infrastructure finance them. Ignacio Pena has on April 1. Krook joined Coben, now vice- months in the policy and group for Asia Pacific, left Santander and has the ING syndicate desk chairman of global strategy team at the based in Hong Kong. He been succeeded by at the start of 2017 capital markets. Most China-led multilateral is currently based in Simon Payne. Kim Balt from ABN AMRO. recently, Maldonado bank, devising a plan for Beijing. has also ended was head of Iberia mobilising private running syndicate at

International Financing Review March 31 2018 17 “Diversity is a business imperative. It fosters better decision making, enriches our talent pool and drives innovation” BNP PARIBAS’ UK COUNTRY HEAD MARIE VERSTRAETEN, P13 Capital markets week ahead: Spotify, Orient Hontai, Varo Energy bonds on previous occasions, and this time will try its luck with a conventional euro- denominated deal of at least €300m. BNP Paribas, Citigroup and Credit Agricole are running the deal.

BEING RESOURCEFUL Korea Resources hits THEûROADûTHISûWEEK ûMEETINGûlXEDûINCOMEû investors in Asia and Europe ahead of a planned US dollar bond sale. It is almost a year since the state-owned miner was last in the dollar market. That deal didn’t go swimmingly: it was thinly subscribed, GARNERINGûAûlNALûORDERûBOOKûOFûJUSTûOVERû FACE THE MUSIC Spotify will mount SPOON FED The Federal Reserve Bank of US$500m from 52 accounts for an issue something of a rebellion against the New York begins publishing new reference size of US$425m. traditional IPO model when it goes public in rates on Tuesday that it hopes might one New York on Tuesday. The music streaming day replace Libor as a benchmark. The new THE RIGHT STUFF Subscription service is effectively bypassing the banks, RATESûnûTHEûSECUREDûOVERNIGHTûlNANCINGû continues on the €750m rights issue saving itself – and denying them – hundreds rate, the broad general collateral rate, and of IT consultancy Altran. Shareholders of millions of dollars in fees. More than 164m the tri-party general collateral rate – are INûTHEû&RENCHûlRMûHAVEûUNTILûNEXTû shares will go on general sale at the same based on repurchase agreements backed Monday to exercise their rights, with time on Tuesday, with many predicting a by US Treasuries. Sofr has already gained a result due four days later. It is raising FRENZIEDûlRSTûFEWûHOURSûOFûTRADING industry backing. CASHûTOûRElNANCEûAûPORTIONûOFûTHEûDEBTû Management’s belief that “the wisdom of taken on to fund the acquisition of crowds trumps expert intervention” will be TAKING ON FUEL Books open on Monday on California-based design and put to the test. There will be none of the old- the Amsterdam IPO of Varo Energy, in a engineering services business school features of a traditional IPO: no deal that could raise up to €1.2bn for Aricent in a €1.7bn deal announced preferential allocations, no lock-ups, and no existing shareholders including Carlyle, last year. money left on the table. It perhaps isn’t the Reggeborgh Invest and Vitol Holding best time to be experimenting, though, wishing to cash out. The Dutch fuel I AM THE RESURRECTION With the given the sell-off in technology shares over supplier is one of only a handful of %UROPEANûlNANCIALûBONDûPIPELINEû the last few days. Will it hit the right note, companies that have chosen to run an IPO swelling, a number of issuers are ORûWILLûTHEûDIRECTûLISTINGûSOUNDûAûBITûmAT process straddling the Easter break. Pre- expected to jump into the market marketing ended last week, while pricing to tap into cash eager to be put to QUARTER POUNDER Bond markets move into is slated for April 13. work in the new quarter. Credit the second quarter after a disappointing Suisse’s debut Green bond, Hypo start to the year – and with the prospect of NOE’s euro senior, and DBS’s euro worse to come. Issuance in the US Tier 2 are all expected soon. Banca investment-grade market was US$343bn in Carige, which put its Tier 2 deal on THEûlRSTûQUARTER ûDOWNûûONûAûYEARûEARLIERû hold last week, might not be so The outlook is gloomy amid waning quick off the mark, though. demand, dismal returns, widening spreads and increased volatility. Which issuers will DIPûTHEIRûFEETûINTOûTHEûMARKETûlRST LAST WEEK IN NUMBERS EXTENDING CREDIT Bankers will have US$2.25bn – Proceeds raised by iQiyi, another go at syndicating a €920m leveraged which priced its New York IPO at the LOANûBACKINGû#HINESEûPRIVATEûEQUITYûlRMû mid-point of the range Orient Hontai Capital’s buyout of Spanish 7% – Coupon on a €350m AT1 from media group Imagina. The process was Spanish lender Ibercaja, one of the meant to wrap up last week, but the BULL BY THE HORNS Spanish technology highest in the asset class deadline was extended following a ANDûCONSULTINGûlRMû)NDRAû3ISTEMASûBEGINSû 5.6% – Fall in the Faang+ Index on lukewarm reception from the market amid meeting with investors on Tuesday to woo Tuesday, the biggest drop since its corruption allegations circling one of them ahead of its conventional bond inception in September 2014 Imagina’s US subsidiaries. debut. The company has issued convertible

18 International Financing Review March 31 2018 People &Markets

GENDER PAY GAP AND BONUS GAP HOW MUCH MORE MEN ARE PAID THAN WOMEN AT UK BANK DIVISIONS, AND THE PERCENTAGE OF New York Fed starts MEN IN THE TOP QUARTILE OF JOBS AT EACH FIRM Libor replacement Mean gender Mean gender % Men in upper pay gap % Bonus gap % quartile jobs The NEW YORK FED will begin publishing reference BAML UK 28.7 57.9 81.0 rates on April 3. The rates are seen as alternatives Barclays International 48.0 78.7 81.0 to Libor and are based on the repurchase BNP Paribas London branch 38.3 64.6 88.0 agreements backed by Treasury securities. Credit Agricole CIB 31.6 53.1 88.1 The Fed, together with the US Treasury Citigroup Global Markets 48.4 64.6 89.0 $EPARTMENTSû/FlCEûOFû&INANCIALû2ESEARCH ûHASû Credit Suisse International 51.2 76.6 88.7 developed three Treasury repo reference rates: Deutsche Bank 36.1 69.2 82.4 the Secured Overnight Financing Rate (SOFR), Goldman Sachs Intl 55.5 72.2 83.0 the Broad General Collateral Rate (BGCR) and HSBC Bank 59.0 86.0 66.0 the Tri-Party General Collateral Rate (TGCR). JP Morgan Securities 53.0 64.0 89.0 The SOFR was selected by the Fed’s Lloyds Banking Group 32.8 65.2 64.6 Alternative Reference Rates Committee as Mizuho International 35.3 58.4 83.2 representing “best practice for use in certain Nomura International 48.8 75.3 89.2 NEWû53ûDOLLARûDERIVATIVESûANDûOTHERûlNANCIALû Morgan Stanley Employment Services 50.4 68.6 87.1 contracts.” RBC Europe 51.0 65.0 92.0 The New York Fed will continue to investigate RBS 37.2 64.4 69.7 the possibility of publishing a longer history of SG International 33.5 70.1 92.0 indicative historical rates for the SOFR, although SMBC Europe 34.2 43.5 81.5 any such extension of the series is unlikely to Standard Chartered 30.4 57.1 80.0 include more than a few years of additional data. UBS 31.0 57.0 79.0 Investors association The Credit Average 42.0 66.0 83.0 Roundtable in January put its support Source: Company UK Gender Pay Gap reports 2017, and UK government gender pay gap reporting website. behind the SOFR with a forward-looking Where banks have several divisions, IFR has used the unit that includes the investment bank term structure and risk spread to make it a more attractive alternative to replace Libor. Shankar Ramakrishnan Wall Street bonuses back to US$184,000

Bonuses across New York City’s securities the past two years demonstrates that the ahead of 2018 changes to the US tax code, industry paid for last year jumped 17% to an industry can prosper with the regulations DiNapoli said. In December the code was average US$184,220, the highest apart from and consumer protections adopted after the revised to eliminate the corporate deduction the boom year of 2006. The rise increased lNANCIALûCRISIS vû$I.APOLIûSAIDû4HEûESTIMATEû for performance-based pay beginning in 2018. the total bonus pool to US$31.4bn, marking includes bonuses paid during the traditional For 2006, the peak year for Wall Street a second consecutive increase after a two- December-March bonus season to staff who bonuses, the pool was US$34.3bn, resulting year decline, according to estimates by New work in New York City. in an average payout of US$191,360. York State Comptroller Thomas DiNapoli. 4HEûBONUSûPOOLûWASûPROBABLYûINmATEDûBYû h4HEûLARGEûINCREASEûINûPROlTABILITYûOVERû companies that moved up payments to 2017 EMPLOYMENT PLATEAUS Net revenues for the industry increased by WALL STREET BONUSES AND PROFITS 4.5% to US$153bn last year, driven by wealth AVERAGE ANNUAL BONUS FOR SECURITIES INDUSTRY STAFF IN NEW YORK CITY, IN US$, AND PRE-TAX management fees, underwriting, and PROFITS FOR NYSE BROKER/DEALERS, IN US$bn advising on mergers and acquisitions. 200,000 80 Trading revenues, which accounted for 8% 70 of net revenues, fell sharply as the year 60 150,000 progressed but were still up 10% for all of 50 2017, according to DiNapoli. 100,000 40 30 0ROlTSûTOTALLEDû53BNûLASTûYEAR ûTHEû 50,000 20 highest level since 2010. 10 !ûDECADEûAFTERûTHEûlNANCIALûCRISISû 0 0 employment may have plateaued. After adding -10 -20 jobs for three years in a row the job level was -30 ESSENTIALLYûmATûINûûATû û7HILEû -40 employment in the rest of the private sector -50 has grown by 23% in the city, DiNapoli found 1988 1992 1997 2002 2007 2012 2017 that employment in the securities industry in Average bonus (lhs) Profits (rhs) the city is 6% smaller than before 2007. Source: Office of the New York State Comptroller Thomas DiNapoli Philip Scipio

International Financing Review March 31 2018 19 “We believe universal banks will return to the M&A market in larger-size deals” KBW ANALYST BRIAN KLEINHANZL, P14

FEE TABLES MARCH 2018 Q1 fees down 15% on year

GLOBAL INVESTMENT BANKING FEES Global fees from M&A advisory, debt and US$1.24bn through March 29, up 4% on Managing No of Total Share equity underwriting and syndicated 2017 giving it a 5.4% market share. bank or group issues US$(m) (%) LENDINGûWEREû53BNûINûTHEûlRSTûQUARTER û BANK OF AMERICA MERILL LYNCH and CITIGROUP 1 JP Morgan 971 1,562.0 6.8 DOWNûûFROMûTHEûlRSTûTHREEûMONTHSûOFû FOLLOWEDûTOûKEEPû53ûBANKSûINûTHEûTOPûlVEû 2 Goldman Sachs 607 1,295.8 5.6 2017, according to data from Thomson positions. 3 Morgan Stanley 807 1,243.4 5.4 Reuters. BARCLAYS was the leading non-US bank, 4 BAML 930 1,172.3 5.1 Activity picked up in March to narrow ranking sixth with US$885m of fees in the 5 Citigroup 872 1,090.6 4.8 the gap from the strong start seen in 2017, lRSTûQUARTERûFORûAûMARKETûSHAREûOFûû)Tû 6 Barclays 689 884.9 3.9 after fees lagged 21% behind a year ago at was followed by CREDIT SUISSE and DEUTSCHE 7 Credit Suisse 517 760.9 3.3 the end of February. BANK. 8 Deutsche Bank 625 747.4 3.3 JP MORGAN remains the top bank, after Japan’s MIZUHO FINANCIAL jumped to ninth 9 Mizuho Financial 849 485.6 2.1 bringing in US$1.56bn in fees from 971 globally from 13th a year ago, after it topped 10 HSBC 722 478.2 2.1 deals across advisory, underwriting and THEûRANKINGSûFORûFEESûINû!SIA 0ACIlC ûWHEREûITû 11 RBC CM 586 465.3 2.0 syndicated loans, giving it a 6.8% share of had a 6% share of fees. That put it ahead of 12 UBS 301 462.6 2.0 the market, based on data to March 29. Sumitomo Mitsui, Bank of China and 13 Wells Fargo 691 442.3 1.9 GOLDMAN SACHS ranked second with Morgan Stanley in the region. 14 BNP Paribas 508 427.3 1.9 US$1.3bn of fees and a 5.6% share of global JP Morgan was the leading bank in the 15 MUFG 653 375.7 1.6 revenues. JP Morgan’s and Goldman’s fees Americas and in Europe, the Middle East and 16 Sumitomo Mitsui 698 362.1 1.6 were both down 17% from a year ago. Africa, and also topped fees for arranging 17 Jefferies 191 288.0 1.3 MORGAN STANLEY moved up to third from BONDûISSUESû-ORGANû3TANLEYûRANKEDûlRSTûFORû 18 Bank of China 468 257.0 1.1 lFTHûINûTHEûlRSTûQUARTERûOFû ûANDûITûWASû EQUITYûISSUANCEûANDû"!-,ûRANKEDûlRSTûFORû 19 Lazard 60 242.3 1.1 the only bank in the top 20 to see a rise in global loans, according to the data. 20 SG CIB 295 238.2 1.0 revenues from a year earlier. Its fees were Steve Slater Total 11,545 22,957.8

AMERICAS INVESTMENT BANKING ASIA-PACIFIC & JAPAN INVESTMENT BANKING EMEA INVESTMENT BANKING

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 667 1,041.5 9.1 1 Mizuho Financial 535 329.4 6.0 1 JP Morgan 240 372.3 6.2 2 BAML 693 871.4 7.6 2 Sumitomo Mitsui 511 251.0 4.6 2 Barclays 207 303.0 5.0 3 Goldman Sachs 356 831.8 7.3 3 Bank of China 433 233.7 4.3 3 Goldman Sachs 148 292.4 4.9 4 Morgan Stanley 423 830.6 7.2 4 Morgan Stanley 262 211.0 3.8 4 Deutsche Bank 250 280.0 4.7 5 Citigroup 513 641.0 5.6 5 Citic 556 190.9 3.5 5 Citigroup 229 273.5 4.6 6 Barclays 414 559.1 4.9 6 Citigroup 132 176.0 3.2 6 HSBC 267 257.5 4.3 7 Credit Suisse 292 478.2 4.2 7 MUFG 384 172.0 3.1 7 BNP Paribas 240 246.8 4.1 8 Wells Fargo 652 409.3 3.6 8 Goldman Sachs 104 171.6 3.1 8 Morgan Stanley 124 201.8 3.4 9 RBC CM 464 380.3 3.3 9 UBS 77 165.8 3.0 9 BAML 145 197.1 3.3 10 Deutsche Bank 301 363.2 3.2 10 JP Morgan 64 148.2 2.7 10 SG CIB 189 169.5 2.8 Total 4,337 11,468.1 Total 4,893 5,485.2 Total 2,413 6,004.5

GLOBAL BONDS GLOBAL EQUITIES GLOBAL LOANS

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 496 451.3 6.4 1 Morgan Stanley 129 436.4 8.5 1 BAML 360 322.9 6.7 2 Citigroup 548 412.4 5.8 2 Goldman Sachs 100 383.4 7.5 2 JP Morgan 315 271.0 5.6 3 BAML 464 397.3 5.6 3 JP Morgan 93 290.5 5.7 3 Mizuho Financial 299 244.6 5.0 4 Goldman Sachs 309 385.6 5.4 4 BAML 76 237.4 4.6 4 MUFG 429 234.1 4.8 5 Barclays 421 336.9 4.7 5 Citigroup 82 235.9 4.6 5 Citigroup 204 212.9 4.4 6 Deutsche Bank 370 290.4 4.1 6 Deutsche Bank 61 202.8 4.0 6 Deutsche Bank 171 183.9 3.8 7 HSBC 508 250.8 3.5 7 Credit Suisse 59 182.5 3.6 7 Bank of China 89 183.9 3.8 8 Morgan Stanley 508 246.6 3.5 8 UBS 55 168.5 3.3 8 Barclays 186 173.7 3.6 9 Credit Suisse 281 241.7 3.4 9 Barclays 48 162.8 3.2 9 Sumitomo Mitsui 322 173.6 3.6 10 BNP Paribas 299 209.1 2.9 10 RBC CM 57 95.5 1.9 10 Wells Fargo 242 154.6 3.2 Total 6,127 7,099.9 Total 1,439 5,132.1 Total 2,284 4,854.3

1/1/2018 to 29/3/2018 Source: Thomson Reuters

20 International Financing Review March 31 2018 People &Markets Investors welcome China bond index inclusion

Global investors have welcomed BOLT FROM THE BLUE also the fact that the correlation in global Bloomberg’s surprise decision to The inclusion news came as a bolt from the bond funds between different markets is add renminbi-denominated bonds to blue. Bloomberg had published in February the very strong, whereas China is a bit of an its benchmark bond index and outcome of its annual consultation process, in exception.” dismissed concerns that operational issues which it did not mention adding renminbi- “There are some teething issues around in China’s interbank bond market would denominated bonds to its main index. settlement and things like that, although … STImEûACCESS Once Chinese government and bank the PBoC [People’s Bank of China] has already Bloomberg said it would add renminbi- policy debt are added to the index, funds begun addressing those issues. The pace of denominated government and policy bank tracking the benchmark will have to reforms in the last few years is such that most securities to the Bloomberg Barclays allocate capital to replicate the exposure. of the large institutional investors are already 'LOBALû!GGREGATEû)NDEX ûBECOMINGûTHEûlRSTû Goldman Sachs estimates that around ABLEûTOûOPERATEûONSHOREûWITHûFEWûDIFlCULTIESv of the three major index providers to US$2trn of assets are tracking the index. INCLUDEû#HINESEûBONDSûINûITSûmAGSHIPû “The timing of the news came as a bit of a OPERATIONAL ISSUES index. surprise but the bottom line is that we’ve China has made inroads in the last few years Bloomberg said the addition of these been expecting inclusion of RMB- in opening up access to the interbank bond securities would be phased in over a 20- denominated debt in some of the major market to foreign investors as it looks to month period, beginning in April 2019. It indices for a while,” said Luc Froehlich, head broaden its renminbi investor base. said this would be subject to further OFûINVESTMENTûDIRECTINGûFORû!SIANûlXEDû Index providers have been reluctant about improvements in the Chinese market, income at Fidelity International. adding Chinese bonds to their benchmark including changes to the settlement, block “The direction of travel in the last few products due to various operational issues. trade and tax collection policies. years, with investors allocating more Nick Gendron, head of product management London Stock Exchange Group’s resources to China, shows that the decision for Bloomberg’s index business, said this was subsidiary FTSE Russell, which operates will be welcomed. There are certainly some why Chinese bonds will be phased into the the rival World Government Bond Index, outstanding technical issues, but generally index, although he said that it was important and JP Morgan, which owns the most speaking, most sophisticated investors not to get hung up on all the issues. widely tracked index for government already have access channels in place.” “Many emerging markets have some bonds in emerging markets, have not (AYDENû"RISCOE ûHEADûOFûlXEDûINCOMEûFORû nuances such as issues around liquidity and made any announcements on the !SIA 0ACIlCûATû5"3û!SSETû-ANAGEMENT ûSAIDû access,” he said. “In a lot of these cases, we inclusion of renminbi-denominated bonds. “I think it is good for investors. Chinese draw a distinction between what is Neither responded to requests for government bonds offer some of the best imperative and what would be nice to have.” comment. nominal and real yields globally. There is Thomas Blott Asia catches up with Green loans

After lagging behind Green bond issuance, The Green loans market has less than a revolving credit facility of US$500m, in Green loans are set to play catch-up in Asia, tenth of that volume. However, the pace has which the interest rate is tied to the with two borrowers rushing to sign up to picked up in Europe recently, with sizeable company’s performance on environmental, THEûREGIONSûlRSTûFACILITIESûCONFORMINGûTOûAû deals such as the €5.3bn (US$6.5bn) social and governance metrics. new international standard. syndicated loan Spanish power and gas Hong Kong property giant NEW WORLD The two deals come after the London- provider Iberdrola signed in January. DEVELOPMENTûANNOUNCEDûAû'REENûlNANCINGû based Loan Market Association and Hong To conform with GLPs, Green loans must FRAMEWORKûANDûSIGNEDûITSûlRSTû(+BNû +ONG HEADQUARTEREDû!SIAû0ACIlCû,OANû align with requirements governing the use (US$459m) Green loan on March 21. Market Association released a set of Green of proceeds, the process for project More borrowers are expected to follow. Loans Principles on March 21, and more are evaluation and selection, the management BEIJING JINGNENG CLEAN ENERGY, the largest gas- set to follow. of proceeds, and transparent reporting. lREDûPOWERûPROVIDERûINûTHEû#HINESEûCAPITAL û The lack of standardised industry Borrowers can consider Green loans for a has already launched a US$220m three-year principles has hampered the take-off of non-exhaustive list of projects covering bullet Green loan. Green loans until now, but the GLPs should renewable energy, sustainable water usage h4HEû'REENûLOANûMARKETûINû!SIA 0ACIlCûISû narrow the gap. and waste-water treatment, climate change going to be a growing sector,” said HSBC’s “The initial thunder has been stolen by adaptation, biodiversity conservation, clean Lipton. “We started from a very small base the Green bonds market, but such transportation and green buildings. but this is growing – especially in China.” enthusiasm should apply to Green loans China has dominated Asia’s Green bond TOO vûSAIDû0HILû,IPTON ûHEADûOFû!SIA 0ACIlCû FIRST DEALS issuance in the last two years as the instruments loan syndications at HSBC. Two Asian borrowers have wrapped up are seen as advancing its drive to clean up The introduction of Green Bond Principles Green loans in the short time since the new pollution. It even overtook the US in 2016 as the (GBPs) in 2014 boosted global Green bonds standards were introduced. world’s largest Green bond primary market, issuance, which Moody’s estimates will reach Singapore-listed OLAM INTERNATIONAL last although it ceded the crown back last year. US$250bn this year, up 60% from 2017. WEEKûSIGNEDû!SIASûlRSTûSUSTAINABILITY LINKEDû Yan Jiang

International Financing Review March 31 2018 21 “The initial thunder has been stolen by the green bonds market, but such enthusiasm should apply to Green loans too” PHIL LIPTON, HEAD OF ASIA-PACIFIC LOAN SYNDICATIONS AT HSBC, P21

India fires up government bonds India gave an unexpected shot in the arm to foreign portfolio investors in government &0)ûmOWSûWILLûPOTENTIALLYûINCREASEûBYû its ailing government bond market last securities, the Ministry of Finance said. US$20bn if the limit is increased to 6% of week, sparking a spectacular rally days “It is possible (but not a 100% done deal) outstanding IGBs in the next two years, BEFOREûTHEûENDûOFûTHEûlNANCIALûYEARûANDû that we see an increase in the FPI limits,” Standard Chartered Global Research said. opening the door to greater foreign investor said Swapnil Kalbande, vice-president and However, FPIs have been net sellers of participation in the months ahead. Asia rates strategist at Deutsche Bank. Rs99.47bn (US$1.53bn) of government bonds Indian government bond prices made “Currently, the limit is capped at 5% and it since February because of uncertainty about their biggest one-day gain in more than four might be raised to somewhere between 6% the pace of US rate rises, the weakening years last Tuesday following a surprise cut in and 8% over the next two to three years.” rupee and the impact of selling by domestic the government’s borrowing programme Foreign ownership of IGBs is tiny at about banks. The market will watch out for the and a rebalancing of the traditionally front- 4.5%, compared with countries such as proportion of the new quota that will be split loaded funding schedule towards the second Indonesia and Malaysia where foreign between general and long-term FPIs, such as HALFûOFûTHEûlNANCIALûYEARûSTARTINGûONû!PRILû investors own nearly 40% and 45% sovereign wealth funds and central banks. The 10-year IGB yield plummeted from respectively of government bonds, The quota for long-term FPIs is currently 7.62% to 7.33%, its lowest since January 29 according to Western Asset Management. only 82% utilised, while the quota for and its biggest intraday fall since December general FPIs is 96% utilised, according to the 2013. The move partly reversed a rise of YEAR-END TONIC National Securities Depository Limited. nearly 92bp in the benchmark yield since At present, Indian banks absorb the bulk of “An incremental increase in the general THEûBEGINNINGûOFûTHEûlNANCIALûYEARûLASTû!PRILû IGB supply. But, given their high holdings of FPI quota would be perceived favourably by The yield closed at 7.40% on Wednesday. outstanding bonds, which make up about the market,” said Standard Chartered. In addition to the changes in the 30% of their investment portfolios, and the India plans to borrow Rs2.88trn during borrowing requirement and funding mark-to-market losses they have suffered in THEûlRSTûHALFûOFûTHEûNEWûûlNANCIALû schedule, the government and Reserve Bank the past few quarters, their appetite for year and Rs500bn less for the full year than OFû)NDIAûAREûINûTHEûlNALûSTAGEûOFûDISCUSSIONSû further supply is limited and new investors the Rs6.05trn it had budgeted for. on an increase in the investment quota of are needed to take up the slack. Krishna Merchant FROM THE ARCHIVE: 10 years ago this week THE FINANCIAL CRISIS

“Our leverage was too high, and a has now become a slightly more and Wachovia. They claim, along recap should have happened in the expensive dish for JPM to consume with the company, that the group last six months,” said the banker. “I has helped to mitigate the worst of has reneged on its commitment would say that about half the senior the bad feeling. JPM quadrupled to provide up to US$22.125bn in management were in favour of it.” its offer to 0.21753 JPM shares financing to fund the deal. It is unlikely that even such a for each Bear share, equivalent to The sponsors claim the banks are capital injection would have staved about US$10 a share. trying to alter the financing “in ways off all the problems that Bear has no responsible purchaser could ever suffered, but it could nevertheless Clear Channel blame game accept”. They say that the lenders have made the valuation proposal The growing list of failed buyouts are attempting to shift the costs of rather different. could soon have a new addition – financing to the sponsors and other “We would still have ended up in Clear Channel Communications. shareholders by replacing a six-year From March 29 2008 issue bed with someone else, but maybe at Thomas H Lee and Bain Capital financing with a three-year bridge, Bear recap vetoed in 2007 book value or just above, instead of at a committed themselves to on different terms. A possible capital injection into fraction of our value,” said the banker. purchasing the broadcaster in But it remains to be seen Bear Stearns was rejected by Current head Alan Schwartz is 2006 for US$26bn. At the time, whether it is only the banks who the firm’s top US management continuing to come in for particular the deal was widely admired as one want out of the transaction. “This is last year, according to one senior criticism, not helped by widespread of the largest-ever buyouts in the clearly a case of lenders’ remorse. executive who was close to the rumours within Bear staff that he is media sector. Since then, however, But is it a case of buyers’ remorse?” talks. Discussions were held in expected to emerge with a senior views on the transaction have asked Steven Davidoff, assistant the autumn of last year – when investment banking position at JP turned as sour as the debt markets professor of law at Wayne State the firm’s stock was still at around Morgan – viewed as a reward for that were supposed to finance it. University. “We don’t know yet. But US$120 – and involved discussion having helped serve the firm up on The sponsors filed two lawsuits I think [the private equity firms] are of a possible rights issue or a plate. last week against the bank group, rational economic individuals that strategic investments by outside Nevertheless, bankers did which includes Citi, Morgan Stanley, may want to drive the price down parties. concede that the fact that Bear Credit Suisse, RBS, Deutsche Bank from what they are paying now.”

22 International Financing Review March 31 2018 People &Markets

„ IN BRIEF

Singapore questions Noble TRADING TIE-UP US exchange operator CME GROUP is buying Michael workout plan Spencer’s NEX GROUP, valuing the British firm at about The Singapore Exchange has questioned 75% must vote in favour. It would also need a £3.9bn (US$5.5bn) and creating a cross-border whether the proposed restructuring of NOBLE majority of shareholders to approve the trading powerhouse. Shareholders in NEX, which GROUP is a “fait accompli”, since much of it transfer of assets to a new vehicle. matches buyers and sellers of bonds, swaps and could go ahead even if shareholders opposed The restructuring proposal currently currencies, will receive £5 in cash for each NEX share a core part of the scheme. under consideration would then assign and 0.0444 new CME shares, worth about £10 apiece. Noble Group said that, if shareholders creditors, shareholders and management The offer by CEM, one of the world’s biggest voted down a plan to move assets to a new shares in that vehicle and issue new debt. exchange groups and owner of the Chicago Board of vehicle as part of a restructuring proposal, it Under an alternative restructuring Trade and Chicago Mercantile Exchange, represents planned to put the company into insolvency proposal outlined in the RSA, if the company a 2.9% premium to NEX’s closing share price on proceedings in the UK. were to enter administration, senior Wednesday. NEX’s shares rose 30% in 2017. The commodities trader said it creditors would grant shares to existing Attempts at major exchange mergers, such as “anticipated” that a court-appointed shareholders only if they had voted in favour the one between the London Stock Exchange and administrator would take steps to implement of transferring assets to the new Noble Deutsche Boerse, have hit regular antitrust buffers the scheme detailed in a restructuring entity – even though, in that scenario, the in recent years, but CME’s expansion by buying NEX support agreement (RSA) – signed by holders vote would have failed. could be easier for regulators and politicians to accept. of 55% of Noble’s senior debt, as of Noble said existing shareholders voting in CME said the deal would create significant Wednesday – given that it would need to favour of the asset transfer would receive efficiencies across futures, cash and over-the- serve the best interests of creditors, but there shares “in at least the same proportion in counter products. The deal would also expand was no certainty that this would happen. which they would have received shares in CME’s international footprint in Europe, the Middle “The board has provided no back-up for its New Noble if the shareholder consents had East, Africa and Asia, CME said, and is expected to POSITIONûTHATûANûARTIlCIALûADMINISTRATIONû been passed and the primary restructuring deliver annual cost savings of US$200m. process in England would be better than had been implemented”. judicial management in Singapore, where Shareholders who voted against it would Noble has real connections and investors,” not receive any recovery on their stakes if BARCLAYS FINE said Goldilocks, which holds an 8.2% stake in the company went into administration, and BARCLAYS has agreed to pay US$2bn for allegedly Noble, in a statement issued through law the asset transfer could happen anyway. causing billions of dollars of losses to investors lRMû-ORGANû,EWISû3TAMFORD Goldilocks questioned whether this was the by engaging in a fraudulent scheme to sell Noble said it expected participation in the correct use of the UK administration process. residential mortgage-backed securities between RSA to rise further by April 11, the deadline h4HEûlRSTûSTATUTORYûPURPOSEûOFû 2005 and 2007, the US Justice Department said. for senior creditors to take part in the new administration is the rescue of a company as The DoJ said Barclays misled investors about facility as backstop lenders, for which they a going concern,” it wrote. “The alternative the quality of the mortgage loans backing those would be paid a fee. restructuring requires the transfer of all of deals and committed violations of mail fraud and In order for Noble’s restructuring proposal Noble’s assets to New Noble, resulting in a bank fraud. According to the DoJ’s statement, to pass, it requires a vote of senior creditors ‘shell’ company remaining.” Barclays disputes the allegations. holding at least 75% of the debt, of which Daniel Stanton Two former Barclays executives, Paul Menefee and John Carroll, who worked on the RMBS deals, paid a combined US$2m in exchange for claims China prioritises risk prevention against them being dismissed, the DoJ said. The right-hand man of Chinese President Xi However, Liu is no fan of the debt-driven CHINA RATINGS Jinping for economic affairs has told the growth model. Foreign rating agencies can now apply for licences COUNTRYSûRECENTLYûRESHUFmEDûREGULATORSûTHATû “Liu is a critic of the debt-fuelled to assess credits in China’s interbank bond market, their top priority is to prevent risks in the programme that China adopted following opening the door to more direct competition lNANCIALûSECTOR THEû;GLOBAL=ûlNANCIALûCRISIS ûORûATûLEASTûFEELSû with their Chinese counterparts. Foreign rating Vice-Premier Liu He said China also that it has continued for too long and that agencies will need to document their home- NEEDEDûTOûDEEPENûlNANCIALûREFORMSûANDû government stimulus cannot be the main country regulatory approvals, list of branches in further open up the sector, with market driver of growth,” said Tony Saich, an expert China, and contact persons there. forces providing the cue, according to the in Chinese politics at Harvard’s Kennedy China’s regulator will grant two types of licences: OFlCIALû8INHUAûNEWSûAGENCY School of Government. category A, which gives full ability to rate all securities h4OûWINûTHEûBATTLEûAGAINSTûlNANCIALûRISKSûISû Liu, on what Xinhua described as an in the interbank bond market, or category B, which AûPRIORITYûOFûTHEûCOUNTRYSûCURRENTûlNANCIALû inspection trip, told the central bank and grants limited access, based on the regulator’s WORK vûSAIDû,IU ûAûTRUSTEDûCONlDANTûOFû8I lNANCIALûREGULATORSûTHATûEFFORTûSHOULDûBEû assessment. Category A licences cover financial China’s oft-repeated commitment to made on supporting the real economy while bonds, non-financial debt instruments, asset-backed deleverage the economy has been met with keeping monetary policy prudent and securities and bonds that offshore entities issued. scepticism, with critics saying it might fall neutral and ensuring reasonable and stable Market participants said the new regime would not back on the old playbook of credit-fuelled LIQUIDITYûINûTHEûlNANCIALûSYSTEM lead to immediate, full-scale competition between investment when growth slows. Reuters reporters domestic and foreign agencies.

International Financing Review March 31 2018 23 THE FIRST STEP IN CLO ANALYSIS: DETAILED, ACCURATE, AND TRANSPARENT LPC COLLATERAL

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SSAR 27 Corporates 29 FIG 32 Covered Bonds 34 High-Yield 35 Structured Finance 37

„ FRONT STORY FINANCIALS Banca Carige puts Tier 2 plans on hold Markets conditions not conducive Investors require convincing

BANCA CARIGE’s plan to rebuild its h)TSûAûDIFlCULTûBALANCEûBETWEENûNOTû “We are comfortable on the name,” said subordinated debt cushion though a Tier 2 IMPAIRINGûTHEûPROlTABILITYûTOOûMUCH ûANDûATû Surry. He argued that P2R is designed to keep bond has foundered, after the issuer decided the same time trying to be compliant with a bank viable rather than bring it to its knees. to wait for a better issuance window. the capital requirement as soon as possible.” “We believe the ECB should give them The Italian lender had completed a time, and we are sceptical that ultimately it roadshow the previous week, but said “REGULATORY LIMBO” will end up being a forced merger with last Tuesday that “the market conditions Carige needs to rebuild its subordinated debt another player. Any merger would be a for a subordinated debt issuance on the after a liability management exercise late consensual one.” expected key issuance terms are not yet in last year converted Tier 1 and Tier 2 place”. SECURITIESûINTOûAûûlVE YEARûSENIORûNOTEûTOû TURNING TIDE Carige emerged as one of the remaining generate capital gains and reduce interest The deal mandate emerged amid considerably weak links in the Italian banking sector last expense. more challenging issuance conditions for year, warning in October that it could be As of year-end 2017, the bank was above lNANCIALûBORROWERS ûFORCINGûNEWûISSUEû wound down should its capital its 2018 minimum Common Equity Tier 1 concessions up and oversubscription down strengthening plan fail. requirement of 11.175%, at 12.4%, but virtually across the board. The bank just about pulled off an below its total capital requirement of emergency equity raise in December, but its 13.125%, at 12.6%, according to its investor turnaround plan has failed to win over some. presentation. “We believe the ECB should With a Triple C rating from Fitch, the bond - h4HEûBANKûISûDElNITELYûINûREGULATORYû give them time, and we are expected to be €300m-€350m - would have limbo,” said Gildas Surry, a partner at sceptical that ultimately it will been among the lowest rated Tier 2 INVESTMENTûMANAGEMENTûlRMû!XIOM end up being a forced merger transactions in recent years. “They have to issue as they are technically “If I’m honest, [it was] a great short for us a in breach of their requirement, but the bank with another player. Any merger few years back and maybe interesting in is so close to the ECB, that hopefully they would be a consensual one” 2017 too,” said one hedge fund investor. SHOULDûBEûGIVENûSOMEûmEXIBILITYv “Truth is it’s an irrelevant bank which Carige was hoping the deal would prompt should have failed a while back - Ligurian the European Central Bank to reduce its Italy’s political gridlock following the champion means nothing. All the current Pillar 2 requirement (P2R) of 3.25%, among recent election was also unhelpful. Banca drama is just too much.” the highest in Europe. While the deal has Monte dei Paschi di Siena sold a €750m Others are more positive. Along with been shelved, it nonetheless demonstrates 5.375% 10NC5 Tier 2 (Caa2/CCC+ by Moody’s/ other measures, the cash call helped its efforts to rebuild its capital, particularly Fitch) in January, a key comparable for Carige, increase Carige’s Common Equity Tier 1 ahead of Europe-wide stress tests this year. but was trading at 6.64% last Wednesday. ratio to 12.4% by year-end from 10.4% at the The focus on bail-in risk in Italy has end of Q3. subsided since the liquidation of two “They have some heavy lifting to do, but TRADING WIDER Venetian lenders last summer. There is they have achieved most of it - they did €1bn PERFORMANCE OF BMPS €750M 5.375% 10NC5 arguably less implicit state support for Carige of capital strengthening, they made a dent in TIER 2 than BMPS, however, which is one of Italy’s the NPE (non-performing exposure) largest banks and partly government-owned. Yield (%) mountain, and the coverage has been 8.0 “Keep in mind the market is tough and increased,” said Filippo Alloatti, senior credit 7.5 investors are not necessarily as interested to analyst at Hermes Investment Management. 7.0 commit to things as they have been in the “The management seems of good quality, 6.5 past,” a lead said. and that is a welcome break.” 6.0 “You’ve seen that on everything that is 0ROlTABILITYûREMAINSûCHALLENGED ûHOWEVER û 5.5 getting done, and the price that issuers are hampering organic capital creation, and it is 5.0 having to pay today compared to January. unlikely that the bond would have cleared 4.5 7ITHûTHATûlLTER ûITûMAKESûTHINGSûHARDERûALLû inside 8%. The bank reported a full-year loss 4.0 round. But there was appetite for the of €380.5m for 2017. transaction.” 5/3/18 5/2/18

“The ECB will look at the bank future 15/1/18 Credit Suisse, Deutsche Bank, JP Morgan and 12/3/18 19/3/18 12/2/18 22/1/18 19/2/18 29/1/18 26/3/18 26/2/18 PROlTABILITY ûSOûPAYINGûDOUBLEûDIGITSûCOULDû UBS were joint bookrunners on the deal. actually be detrimental,” Alloatti added. Source: Thomson Reuters Alice Gledhill

International Financing Review March 31 2018 25 US high-grade braced for more WEEK IN NUMBERS 37bp uncertainty after tough quarter „ THE NUMBER OF BASIS POINTS THAT 10-YEAR TREASURY YIELDS HAVE RISEN No sign of respite with difficult conditions set to endure THIS QUARTER TO BE QUOTED AT 2.83% 3.0 The US investment-grade bond market kicks “It’s a pretty big change in technicals for off the second quarter with one of the DOLLARûlXEDûINCOMEûASSETS ûANDû)ûTHINKûITûWILLû 2.9 gloomiest outlooks in years, amid waning persist for a while longer,” one bond buyer 2.8 demand, dismal returns, widening spreads said. “It’s not clear who the next funder of all 2.7 and increased volatility. of the debt coming to market will be.” Many market participants - will be happy Graper, however, said conditions could 2.6

TOûLEAVEûTHEûlRSTûQUARTERûBEHIND improve in the near term, and that there are 2.5 Total returns were negative 2.5% and already signs of that. spreads widened 18bp on average, according Issuance in April typically tends to be 2.4 to ICE BAML data. And many borrowers had lower as the earnings season gets under way, 16/01/18 13/03/18 13/02/18 23/01/18 30/01/18 27/03/18 09/01/18 02/01/18 27/02/18 20/03/18 20/02/18 06/03/18 to pay double-digit new-issue concessions, and that might help spreads. Issuance for the 06/02/18 which they had not seen in quite some time. month was US$80.7bn in 2017 and Yet some in the market believe the US$90.835bn in 2016, IFR data show. COMINGûQUARTERûCOULDûBEûEVENûMOREûDIFlCULT “The market has shown evidence of Matt King, senior analyst at Citigroup, healthier demand despite increased investor 21bp warned that the three main sources of liquidity selectivity and price discipline,” Graper said. „ THE SIZE OF THE CONCESSION for corporate bonds have dried up. And as the Issuers last week got a mixed reception in THAT CITIZENS BANK (Baa1/A-) PAID buyer base has shrunk, many companies have the market. FOR A US$500m MARCH 2023 NEW ISSUE found themselves paying more to raise debt. Some credits such as CENTERPOINT ENERGY LAST WEEK “Corporate treasurers are shifting out of RESOURCES and MYLAN paid double-digit new- corporates and into short-duration money issue concessions even as equities were markets following tax reform. Foreign investors rising. But others saw a better response, with 7% have stopped buying as higher dollar Libor has REALTY INCOME upsizing its trade to US$500m „ THE LEVEL AT WHICH SPAIN’S IBERCAJA raised their hedge costs,” King told IFR. and paying only a 4bp NIC. PRICED A €350m PERP NON-CALL FIVE “And even the domestic mutual-fund bid has AT1, ONE OF THE HIGHEST YIELDS evaporated, as higher rates have made less risky OUT OF FAVOUR AVAILABLE IN THE ASSET CLASS. IT DID, instruments like short-maturity Treasuries Some see weakened foreign demand as the HOWEVER, TIGHTEN BY 50bp FROM THE seem more attractive by comparison.” biggest risk to the high-grade market, as it WIDE END OF IPTs AFTER DRAWING A has been such a crucial part of the investor BOOK IN EXCESS OF €950m M&A WILD CARD base in recent years. US high-grade issuance was just over "ETWEENûûANDû ûFOREIGNûmOWSû 53BNûINûTHEûlRSTûQUARTER ûCOMPAREDû accounted for half of the bid for US 10bp with US$387.032bn in the same period in investment-grade credit, said Stephen „ THE AMOUNT THE US DOLLAR 2017, according to IFR data. Caprio, credit strategist at UBS. TWO-YEAR SWAP SPREAD HAS WIDENED Even so, spreads have widened out to But foreign exchange hedging costs for THIS QUARTER. AT ONE POINT IT WAS Treasuries plus 116bp, their widest levels euro and yen-based investors have spiked to 15bp DUE TO A SQUEEZE IN DOLLAR since September 2017. post-crisis peaks in recent weeks, leaving LIQUIDITY “Technical weakness and spikes in FOREIGNûmOWSûATûNEGLIGIBLEûLEVELS bp volatility have taken spreads off all-time The worst-case scenario is that foreign 35 33 tights, but much of that weakness has been high-grade bond investors start selling 31 mitigated by relative undersupply,” said outright, Caprio said, though that has not 29 Meghan Graper, managing director, happened just yet. 27 investment-grade syndicate, at Barclays. “We’ve heard of some position adjustment 25 Some fear that, if demand for bonds continues where the bid has moved from the short end 23 to taper off, conditions could become even tougher to intermediate part of the curve as a way to 21 for borrowers, with at least three more Fed rate offset hedging costs,” he said. “But we don’t 19 17 hikes expected this year and a potential pick-up in see much selling outright.” 15 M&A bond supply that may weigh on spreads. Eleanor Duncan 16/01/18 13/03/18 13/02/18 23/01/18 30/01/18 27/03/18 02/01/18 09/01/18 27/02/18 06/03/18 20/03/18 06/02/18 US HOLDINGS OF FIVE LARGEST CORPORATIONS (US$BN) 20/02/18 Company US Govt & Agency Non-US Corps US Corps Str Products Other Total (US$bn) Apple 39 8 126 21 2 195 Microsoft 117 5 5 4 1 132 €2.224bn Alphabet 42 2 22 16 7 89 „ THE AMOUNT THE ECB BOUGHT Cisco Systems 22 0 32 2 2 59 THROUGH ITS CSPP IN TRADES SETTLED Oracle 0 0 42 0 8 50 IN THE WEEK UP TO MARCH 23 Source: Wells Fargo In total, it has bought €148.467bn

26 International Financing Review March 31 2018 BONDS SSAR

a bigger deal than its US$3bn December The World Bank’s two-year paper trades 2020 that came in November last year. The in the high single digits/low double digits SSAR new trade was the joint largest SSA three- through, for example, discounting much of year US dollar trade of 2018. the demand that would have come from “There were a few issues to do with bank treasuries that need Libor plus type US DOLLARS quarter-end and a few accounts had to hold spreads. back, which was a bit unfortunate, but it “Investors mistrust the huge swap spread CONCESSIONS RISE IN WOBBLY was of good quality so we were able to do widening on the US dollar side and are just DOLLAR MARKET US$4bn,” the lead said. not willing to accept the tighter valuation of “KfW was keen to come now as a lot of SSA product,” a banker away from the KfW KFW was the latest issuer to have to pay an issuers are expected to come after Easter trade said. elevated new issue concession in the US dollar and they wanted to avoid being in the “The required new issue concessions are market last week, offering 3bp to get a US$4bn crowd.” basically the same as in euros, which some three-year away as conditions remained febrile issuers are not necessarily willing to accept. The ahead of what is expected to be a busy week. WHO’S NEXT? fact that the swap spread move is driven by the The German agency landed the deal via The INTERNATIONAL DEVELOPMENT ASSOCIATION increase in Libor means that there’s a danger it Citigroup, Nomura and RBCûmATûTOûMID SWAPS û (IDA), the part of the World Bank that helps could collapse the other way if sentiment a level that offered investors a generous the world’s poorest countries, is preparing reverses, and some investors are reluctant to pick-up but was necessary in order to get the the ground to make its debut entry into the buy stuff at such deep Libor levels.” deal size away. international markets, and could come after Central banks and asset managers took Gyrations in the underlying market off Easter. 74% of KfW’s trade, with the Americas and which public sector issuers price their bonds The WORLD BANK itself also has yet to make Europe taking down the lion’s share at 77%. has made issuance trickier recently, with a an appearance in the US dollar market this US$500m two-year transaction for the year. Nordic Investment Bank recently failing to The tight sub-Libor level at which its EUROS cross the line, for example. paper trades could mean a big new issue “It does feel like new issue premiums are concession if the issuer wants to raise a large FRANCE REFRESHES LINKER CURVE, elevated right now but the market is really deal size. GETS BIGGEST BOOK YET distorted at the front end,” said a lead. “It’s very hard to get US$5bn done right “NIB paid around 3bp, Kommunalbanken now given how tight levels are to swaps, AGENCE FRANCE TRESOR lured a record order around 7bp, and issuers feel that they need issuers may need to do smaller deals and BOOKûFORûITSûlRSTûINmATION LINKEDûSYNDICATIONû TOûTRYûANDûREACHûTHEûMID SWAPSûmATûMARKû come more often,” another banker on the since September 2016, a €3.5bn July 2036 otherwise they are worried they won’t get trade said. “There is an acknowledgment deal that also set a record-low real yield at enough demand.” among market participants that rates will go issue in a syndication for the country. In the case of KfW, the issuer attracted up and that will affect the short-end of the "OOKSûFORûTHEûEUROZONESûlRSTûSYNDICATEDû over US$5bn of demand, allowing it to print curve.” linker of 2018 passed €11.5bn despite a

ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS ALL US DOLLAR FIXED-RATE GLOBALS BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues €(m) (%) bank or group issues US$(m) (%) 1 JP Morgan 285 85,168.47 7.6 1 SG 85 25,356.19 6.8 1 JP Morgan 55 25,349.68 12.0 2 Citigroup 282 75,281.02 6.7 2 BNP Paribas 97 24,933.91 6.6 2 BAML 57 23,889.47 11.3 3 Barclays 217 70,911.51 6.3 3 Barclays 73 22,228.08 5.9 3 Goldman Sachs 39 20,518.59 9.7 4 BAML 220 62,667.15 5.6 4 Deutsche Bank 100 21,353.47 5.7 4 Barclays 34 19,373.21 9.2 5 HSBC 272 58,413.84 5.2 5 UniCredit 91 20,749.32 5.5 5 Citigroup 58 19,086.79 9.0 6 Goldman Sachs 162 57,218.95 5.1 6 Credit Agricole 73 20,521.52 5.5 6 Wells Fargo 31 13,908.22 6.6 7 Deutsche Bank 224 50,603.61 4.5 7 HSBC 103 20,371.74 5.4 7 Morgan Stanley 30 10,344.79 4.9 8 BNP Paribas 191 48,821.04 4.3 8 JP Morgan 67 19,888.39 5.3 8 Deutsche Bank 22 8,536.96 4.0 9 SG 127 38,106.09 3.4 9 Citigroup 59 16,505.75 4.4 9 HSBC 20 7,282.38 3.4 10 Morgan Stanley 160 36,701.36 3.3 10 Goldman Sachs 47 16,474.11 4.4 10 TD Securities 22 6,985.28 3.3 Total 1,510 1,123,906.50 Total 467 375,349.59 Total 119 211,511.91

Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt, Excluding equity-related debt, ABS/MBS. US Global ABS/MBS. US Global ABS/MBS.

Source: Thomson Reuters SDC code: J1 Source: Thomson Reuters SDC code: N1 Source: Thomson Reuters SDC code: O5

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING MARCH 28 2018 Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover Mar 26 2018 Italy €2.9301bn 0.000 Mar 30 2020 -0.225 1.32 Mar 26 2018 Italy (€i) €2.5bn 0.100 May 15 2023 -0.430 1.60 Mar 27 2018 UK (i) £600m 0.125 Nov 22 2056 -1.579 2.04 Mar 28 2018 Italy €2.5bn 0.950 Mar 1 2023 0.680 1.78 Mar 28 2018 Italy (FRN) €2bn 0.342 Apr 15 2025 0.350 1.45 Mar 28 2018 Italy €3bn 2.000 Feb 1 2028 1.830 1.30 Source: IFR

International Financing Review March 31 2018 27 STUBBORNLYûLOWûINmATIONûBACKDROPûINûTHEû “For the same maturity, the duration is a The 108.738 reoffer gave a real yield of region. LOTûHIGHERûFORûANûINmATION LINKEDûTRADE ûANDû –0.361% Solid growth in the bloc notwithstanding, while there may not be the same captive “Real yields are so negative but if it’s gone INmATIONûHASûYETûTOûPICKûUP ûSLOWINGûTOûAû audience as a UK linker would have, there is to minus 0.36% from minus 0.2% two weeks month low of 1.1% in February, year-on-year, still structural demand.” ago, does that change the way investors look from 1.3% in January. The French sale had been expected since at a linker? Not really,” said another lead. “There is a structural need from the AFT said in December it would syndicate a “The real selling point we had for this likes of insurance companies and pension linker with a maturity of between 15 and 20 trade was on a relative value basis, which funds that means there is demand for years, though some thought it would have cheapened up over time on the back of INmATION LINKEDûPAPER ûESPECIALLYûATûTHEû come earlier. INmATION LINKEDû;AUCTION=ûSUPPLYûFROMû&RANCEû longer end of the curve, where there just “Conditions were a bit volatile last week and rumours about the trade.” isn’t that much paper around whether and trickier given the talks around trade Based on the Iota spread – the difference it’s from France, Spain, Germany or wars,” Requin said. between a linker Z-spread and a Italy,” said Anthony Requin, AFT’s chief “We didn’t think we would come this conventional Z-spread – he estimated the executive. week, as we didn’t believe the market was new issue premium at 4bp. h3O ûWHOEVERûWENTûlRSTûCOULDûBEûEXPECTEDû stable enough. But then the market was The leads looked at the 2030 and 2047 to receive good demand.” more in a risk-on mode on Monday and we OATei bonds and interpolated between the Spain was the last European sovereign to SAWûANû)TALIANûINmATION LINKEDûAUCTIONûBEINGû two to get to 2036 fair value. sell a syndicated linker, luring over €16.5bn taken down well by the market.” The deal also worked despite the of demand for a €5bn long 10-year in April Leads Barclays, BNP Paribas, HSBC, JP Morgan breakeven widening to around 157bp– 2017, though Italy added €2.5bn to its May and NatWest Markets started at IPTs of high 158bp. 2023 linker via auction on a 1.6 bid-to-cover 20s over the 0.70% July 2030 OATei, followed “If you look at the breakeven, the implied ratio last Monday. with guidance at 28bp area, and late INmATIONûINûTHEûMARKETûISûAROUNDû û “You have two types of buyers for this MORNINGûlNALISEDûTHEûSPREADûATûBP WHICHûISûSTILLûBELOWûTHEûINmATIONûTARGET vûTHEû product: those who want exposure to The transaction generated strong second lead said. INmATIONûPRODUCT ûBUTûALSOûTHOSEûWHOûWANTû momentum despite the real yield on France’s “It’s not a perfect measure but it’s clearly to buy it because it offers high duration,” a 2030 OATei having dropped from –0.42% in not as high as 2%. The longer you go, and as lead banker said. early March to –0.64% by last Wednesday. long as the central bank has credibility, the

ALL EURODOLLAR STRAIGHTS ALL INTERNATIONAL US$ BONDS ALL SOVEREIGN BONDS IN EUROS BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 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 50 10,387.29 13.6 1 JP Morgan 192 55,458.97 10.0 1 Barclays 10 8,509.20 12.0 2 Wells Fargo 45 7,421.68 9.7 2 Citigroup 209 52,353.44 9.4 2 Citigroup 13 8,121.10 11.5 3 BAML 45 6,350.78 8.3 3 BAML 165 44,561.30 8.0 3 JP Morgan 10 7,911.91 11.2 4 Goldman Sachs 30 5,574.82 7.3 4 Barclays 121 39,900.59 7.2 4 NatWest Markets 5 6,161.45 8.7 5 Citigroup 35 5,394.34 7.1 5 Goldman Sachs 110 36,186.63 6.5 5 BNP Paribas 9 5,158.66 7.3 6 Deutsche Bank 31 5,244.05 6.9 6 Wells Fargo 97 28,690.33 5.2 6 HSBC 6 4,187.31 5.9 7 Credit Suisse 31 5,240.25 6.9 7 Morgan Stanley 111 28,356.29 5.1 7 SG 6 3,430.40 4.8 8 Morgan Stanley 23 3,906.72 5.1 8 HSBC 110 24,550.91 4.4 8 Santander Global 4 3,428.70 4.8 9 Barclays 24 3,614.17 4.7 9 Deutsche Bank 95 21,316.32 3.8 9 ING 3 3,087.00 4.4 10 Mizuho 13 3,561.25 4.7 10 Credit Suisse 96 19,141.19 3.4 10 Goldman Sachs 5 2,858.95 4.0 Total 137 76,223.33 Total 627 557,072.95 Total 21 70,794.87

Including Euromarket preferreds. Excluding equity-related debt. Including Euro, foreign and global issues. Excluding equity-related debt, Excluding ABS/MBS. US Global ABS/MBS.

Source: Thomson Reuters SDC code: J12 Source: Thomson Reuters SDC code: O1 Source: Thomson Reuters SDC code: N4

ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 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 11 3,498.07 10.9 1 Credit Agricole 7 3,952.63 12.5 1 DGZ-DekaBank 13 2,165.88 16.8 2 UniCredit 4 2,726.56 8.5 2 UniCredit 5 3,719.95 11.8 2 UniCredit 14 1,658.70 12.9 3 SG 9 2,661.50 8.3 3 Barclays 5 3,581.26 11.3 3 LBBW 11 1,410.02 10.9 4 BNP Paribas 5 2,425.45 7.6 4 Commerzbank 5 3,511.72 11.1 4 HSBC 9 1,271.21 9.9 5 Goldman Sachs 3 2,099.74 6.6 5 JP Morgan 3 2,302.06 7.3 5 Nord/LB 9 1,037.86 8.1 6 Commerzbank 3 2,015.55 6.3 6 Goldman Sachs 3 2,218.37 7.0 6 Deutsche Bank 7 688.21 5.3 7 Credit Agricole 7 1,889.06 5.9 7 Deutsche Bank 5 1,941.70 6.2 7 JP Morgan 3 443.59 3.4 8 JP Morgan 7 1,879.68 5.9 8 SG 3 1,905.44 6.0 8 Barclays 3 407.50 3.2 9 Deutsche Bank 7 1,618.75 5.1 9 BAML 3 1,695.69 5.4 9 Cooperatieve Rabobank 1 403.77 3.1 10 Natixis 5 1,458.04 4.6 10 NatWest Markets 1 1,481.08 4.7 =9 Credit Agricole 1 403.77 3.1 Total 41 32,018.59 Total 25 31,556.91 Total 40 12,883.39

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

28 International Financing Review March 31 2018 BONDS CORPORATES

more likely you are to see a convergence usual with these trades, there was little in with the central bank target.” THEûWAYûOFûlREWORKS Banks, insurance companies, pension CORPORATES JLMS SHOW THEIR STRENGTH FUNDS ûINSURANCEûCOMPANIESûANDûOFlCIALû 4HEûDEALûBENElTEDûFROMûSTRONGûJOINTûLEADû institutions tend to be the typical buyers of manager interest of €3.65bn. German state deals. EUROS While JLM orders tend to play a role in “It’s developing steadily but don’t expect sovereign syndications – Spain had €3.35bn miracles,” a lead said early in the process. AKELIUS TAKES HYBRID PLUNGE for its linker in 2017 – the proportion this “This is coming pre-Easter, pre the end time was higher than usual for a France OFûTHEûlRSTûQUARTER ûANDûWEVEûSEENûRECENTû AKELIUS RESIDENTIAL PROPERTY on Tuesday INmATIONûOUTING, albeit in the context of a transactions in other sectors widen and BROUGHTûTHEûlRSTûEUROûDEALûTOûTHEûCORPORATEû larger total book size overall. post-trade performance has not been market in almost a week, taking advantage “Banks took 36% but that wasn’t just the inspiring.” of an improved backdrop to sell its debut joint lead manager interest: you have to A €500m Bremen 10-year that came at less hybrid trade. INCLUDEûASûWELLûINûTHISûlGUREûTHEûINTERESTûOFû 18bp late February was quoted at less 13.5bp Skipping the IPT stage, leads Barclays, the ALM side of various banks, primary on Tuesday. Danske Bank and Deutsche Bank (B&D) dealers and non-primary dealers,” said But in the end, there was enough demand announced guidance for the 60.5NC5.5 at 4% Requin. for the deal to clear, with books passing the AREA ûWITHûAûBANKERûPOINTINGûTOûTHEûDIFlCULTYû “Even if you remove that interest from €590m mark, excluding joint lead manager in gauging fair value despite Akelius having JLMs, we still had record demand. Also, in interest. It priced in line with the less 18bp issued senior bonds before. the allocation we favour real money area guidance. &INALûGUIDANCEûWASûRElNEDûTOû  û investors. For the trading desks, there is an The transaction did not offer much in the AHEADûOFûlNALûTERMSûATûTHEûTIGHTûENDûFORûAû interest in having paper, as some investors way of premium, with less 18bp more or less €500m print on books of €980m. who can’t come in in primary might do in mATûTOûWHEREû"ADEN 7UERTTEMBERGSûõMû “We’ve been having a lot of investor secondary and they need to be able to offer 0.625% February 2027 was quoted on dialogue, as you can tell by the fact that we some paper.” Tradeweb on the day of execution. went straight to guidance, but the hard bit “The Laender are somewhat peculiar and WASûlNDINGûOUTûWHEREûPEOPLEûAREûPREPAREDû ESM/EFSF OUTLINE Q2 PLANS look quite expensive,” the lead said. “At the to buy a new hybrid given the sell-off in same price, investors can buy into a €5bn secondaries,” said the banker. The EUROPEAN STABILITY MECHANISM and KfW. It will be the usual suspects.” “Investors like the name, the story, but EUROPEAN FINANCIAL STABILITY FACILITY have The tenor is not the most popular with it’s a question of where they put the line in outlined their funding plans for the second investors at the moment, who either favour the sand to come back to the credit.” quarter, which will take them a step further shorter-dated transactions, as seen with The deal was holding up well in the towards meeting their €46bn combined +F7SûRECENTûõBNûlVE YEAR ûORûTRADESûWITHû secondary market on Thursday last week, needs for 2018. 15-year-plus maturities. bid at par, according to Thomson Reuters The two have a €8.5bn target for Q2 - the “It is a bit of a no man’s land,” the lead data. It priced at 99.654. smallest quarter of the year - split €3.5bn for said. “Coupon-wise it’s not the most exciting Mandated two weeks ago as a the ESM and €5bn for the EFSF. and the aggressive spread means that you €300m-€500m NC5.5, the Swedish company’s The funding update follows last Tuesday’s get a 0.875% coupon at best.” issue was launched four working days after announcement that the ESM had approved The deal, via Barclays, BayernLB, DZ Bank, the roadshow ended because of softer market a €6.7bn disbursement for Greece following HSBC, LBBW and UniCredit, came with a 0.80% conditions in the wake of heavy supply. the government’s conclusion of another coupon, giving a yield of 0.811% at the “When they announced this deal the round of reforms. 99.895 reoffer price. market was much tighter in hybrids across “Greece still has to meet some tight the board,” said the banker. deadlines to complete the fourth review in FINLAND TO RETURN TO EURO AND US 4HEûI"OXXûEUROûNON lNANCIALSû time for the end of the programme in DOLLAR MARKETS subordinated index moved meaningfully August, when it needs to be able to fully higher, from 2.13% on March 13 to 2.40% as RElNANCEûITSELFûINûTHEûMARKETûAGAIN vû%3-û FINLAND’s State Treasury said last Wednesday at Wednesday’s close last week. said in a statement. that it plans to issue a new euro benchmark But already signs of recovery have been “But it is now already clear that the total bond in the second half of this year, as well evident. On March 19, Iberdrola brought its amount that will be disbursed will be far as a US dollar-denominated bond some time second Green hybrid, a €700m perpetual less than the full €86bn that was initially in 2018, according to Reuters. non-call March 2024 at 2.625%. On Thursday thought necessary.” Tap auctions of existing euro bonds are last week, it was bid at par for a yield of The timetable for potential benchmark also expected during the second quarter of 2.623%, according to Thomson Reuters data. transactions is as follows: the weeks starting the year, the treasury said. Akelius is rated BBB stable by S&P and the April 9, April 23, May 14, May 28 and June Finland’s net borrowing requirement for bonds BB+ (expected). Its CFO, Leiv Synnes, 11. Transactions may be for the ESM or the 2018 is €3.1bn, while redemptions ANNOUNCEDûAûNEWûlNANCIALûPOLICYûINûMID EFSF. amounted to €15bn. March, saying its rating should be a minimum In February, Finland sold €3bn in an BBB and striving to achieve BBB+ or higher. BADEN-WUERTTEMBERG LEANS ON oversubscribed 2034 benchmark bond, USUAL SUSPECTS taking advantage of investor demand for TOYOTA AUSTRALIA FINDS LUKEWARM high-quality assets in a turbulent market. EURO WATERS The FEDERAL STATE OF BADEN-WUERTTEMBERG Finland has an AA+ credit rating from S&P leant on the usual suspects to get a €500m and Fitch, and Aa1 from Moody’s, all with a TOYOTA FINANCE AUSTRALIAûBECAMEûTHEûlRSTû no-grow 10-year over the line, though, as stable outlook. antipodean corporation to test the euro

International Financing Review March 31 2018 29 market in 2018, but there was little scarcity Looking ahead, at least three Australian €348.34m of its 2020 and €83.3m of its 2024 demand for last Wednesday’s issue via BNP REITs are gearing up for potential euro notes, in a tender offer last week. Paribas and Citigroup. trades in the coming weeks. The company announced the tender )TSûlVE YEARûATTRACTEDûAûLIMITEDûBOOKû û SCENTRE GROUP (A1/A) held meetings in targeting its €750m 2% May 2020s and around €650m for a €500m size - and saw March, which Credit Suisse and Deutsche Bank €500m 2.875% December 2024s on March PRICEûPROGRESSIONûTOûAûlNALûBPûFROMûINITIALû arranged, for a euro or sterling Reg S bond 20. The offer, for up to US$849.89m- guidance of mid-swaps plus 30bp-35bp, offering of seven to 10 years. equivalent, expired on March 27 and is signs that the euro market is still recovering VICINITY CENTRES (A2/A) did roadshows in aimed at further reducing its gross debt. from the recent supply wave. Asia and Europe, via Bank of America Merrill Concurrent with the tender, Rio Tinto A lead reckoned fair value was in the 9bp- Lynch, BNP Paribas, HSBC and Westpac, for a also announced the redemption of its US 10bp area, based on its €750m February euro or US dollar Reg S bond with a maturity dollar 2021 and 2022 notes equalling 2023s, which were at 10bp over before the of seven to 10 years. approximately US$1.4bn. announcement, according to Tradeweb STOCKLAND (A3/A-) held European meetings prices. last week with CBA, HSBC and JP Morgan for a While the borrower has issued in US and minimum €300m seven-year to 12-year STERLING Australian dollars before, it has never Eurobond. previously visited the euro market, with a !ûSYNDICATEûOFlCIALûINVOLVEDûWITHû3CENTREû LAND SECURITIES REVIVES STERLING banker saying proceeds will be used for local said the company is in no rush to come to the MARKET funding needs. market because it has cash. Timing will also “They’ve not made it clear if they’re going depend on the basis swap into Australian LAND SECURITIES revived the investment-grade to swap back to Australian dollars,” he said. dollars and not just outright spreads, he said. sterling sector on Monday last week, but “It’s for general corporate purposes and the euro corporates were a no-show against a RElNANCINGûMENTIONûISûNOTHINGûNOTABLE ûJUSTû UNRATED INDRA TARGETS €300m softer market backdrop. a fairly generic statement”. The UK REIT had mandated a nine-year Toyota Finance Australia has seven bonds Unrated Spanish technology and consulting secured benchmark and potential sub- maturing this year in US and Australian lRMûINDRA SISTEMAS starts a European benchmark tap of its 2.399% 2029s, both to dollars, totalling €372m-equivalent. roadshow on April 3 for a minimum €300m HELPûlNANCEûAûTHREE BONDûTENDER SIXûTOûSEVEN YEARûlXED RATEûSENIORûUNSECUREDû But the announcement on Monday only ALL INVESTMENT-GRADE BONDS IN EUROS transaction. referenced the nine-year, which it started BOOKRUNNERS: 1/1/2018 TO DATE BNP Paribas, Citigroup and Credit Agricole are marketing at 110bp-115bp over the July Managing No of Total Share running the offering. 2027 Gilt. bank or group issues €(m) (%) After gathering a book of around £725m, 1 SG 63 19,752.95 6.8 KERING ANNOUNCES MAX €350m it moved guidance to Gilts plus 100bp area 2 Barclays 55 19,218.61 6.6 FOUR-BOND TENDER (+/-3bp) for a £350m deal, and went on to set 3 BNP Paribas 64 18,789.91 6.5 the spread at the tight end of that range. 4 JP Morgan 48 17,520.53 6.0 French luxury group KERING has announced a The proceeds from the issue, expected AA/ 5 Credit Agricole 55 17,264.18 5.9 maximum €350m tender offer for its 3.125% AA by S&P/Fitch, will be used, together with 6 HSBC 79 16,727.06 5.8 2019, 2.50% 2020, 1.375% 2021 and 0.875% EXISTINGûCOMMITTEDûLIQUIDITYûSOURCES ûTOûlNANCEû 7 Deutsche Bank 70 16,378.82 5.6 2022 notes, expiring on April 4. a £606m tender targeting its 5.391% 2025/2027, 8 UniCredit 60 15,961.54 5.5 If more than €350m is tendered, a pro rata 5.396% 2030/2032 and 5.125% 2034/2036s. 9 Goldman Sachs 32 14,506.54 5.0 reduction will apply to each series’ tender. Land Securities last tapped the market in 10 Citigroup 43 12,298.44 4.2 Societe Generale is structuring adviser, with September 2017, printing a £500m 20-year Total 345 290,590.80 HSBC, Societe Generale and NatWest Markets as at Gilts plus 90bp and a £500m 40-year at Excluding ABS/MBS, equity-related debt. dealer managers. plus 100bp. The former was at 94bp and the Also in euros, RIO TINTO has agreed to buy latter at 105bp on Monday, according to Source: Thomson Reuters SDC code: N9 back a total €431.64m, split between Thomson Reuters data.

ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS BOOKRUNNERS: 1/1/2018 TO DATE (EXCLUDING SOLE SELF FUNDED DEALS) BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share bank or group issues US$(m) (%) Managing No of Total Share bank or group issues €(m) (%) 1 BAML 22 3,928.99 9.1 bank or group issues US$(m) (%) 1 BNP Paribas 42 7,889.21 8.9 2 Morgan Stanley 14 3,700.00 8.6 1 JP Morgan 107 33,126.80 12.0 2 SG 34 6,831.33 7.7 3 JP Morgan 22 3,645.83 8.5 2 BAML 99 27,996.60 10.1 3 Goldman Sachs 21 6,429.48 7.2 4 Wells Fargo 22 3,351.64 7.8 3 Citigroup 98 24,810.33 9.0 4 UniCredit 29 6,053.37 6.8 5 Barclays 15 3,279.86 7.6 4 Goldman Sachs 63 23,164.24 8.4 5 Deutsche Bank 34 5,472.72 6.1 6 Citigroup 16 2,561.02 5.9 5 Barclays 54 21,251.22 7.7 6 HSBC 34 4,664.92 5.2 7 Goldman Sachs 10 2,162.98 5.0 6 Wells Fargo 69 18,247.03 6.6 7 Credit Agricole 27 4,552.85 5.1 8 Mizuho 13 1,778.89 4.1 7 Morgan Stanley 72 18,231.74 6.6 8 JP Morgan 25 4,379.71 4.9 9 MUFG 9 1,778.63 4.1 8 Mizuho 44 9,037.09 3.3 9 Barclays 23 3,840.18 4.3 10 TD Securities 7 1,673.66 3.9 9 Credit Suisse 38 8,502.14 3.1 10 BAML 20 3,651.68 4.1 Total 51 43,056.88 10 Deutsche Bank 31 8,456.28 3.1 Total 132 89,052.89

Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Total 237 276,805.78 Excluding equity-related debt. FIGs, ABS/MBS. and non corporates.

Source: Thomson Reuters SDC code: F6a Source: Thomson Reuters SDC code: F09a Source: Thomson Reuters SDC code: N8

30 International Financing Review March 31 2018 BONDS CORPORATES

The corporate market had not seen a believes it can enjoy better returns by sterling deal since a £300m 22-year from SWISS FRANCS holding assets for a longer period. utility Cadent Finance in mid-March. That The shorter tenors were selected in came at Gilts plus 135bp but has since SWISS RETURN FOR TRANSURBAN recognition of it being a maiden issue and a softened to 141bp over. lRSTûFROMûTHEûPRIVATEûEQUITYûSECTOR Sterling investment-grade corporates TRANSURBAN QUEENSLAND, rated BBB (S&P), has Issuing yen bonds is also a way for KKR to were 5bp wider against governments and mandated UBS to arrange a Zurich lunch on improve its name recognition. Although it is 2bp wider against asset swaps for the week April 6 for a potential new bond issue. well known to big investors and pension funds ending March 23, according to iBoxx indices. The Australian toll-road operator, in in Japan, it is less familiar to regional investors. Equivalent euro spreads were 6.5bp wider which Transurban owns 62.5%, made its “Some regional investors do consider KKR versus governments and 4bp softer versus Swiss debut in June 2016 with a SFr200m as Kokka Koumuin Kyosai Kumiai swaps. 0.625% seven-year bond, priced at mid-swaps Rengokai,” Hirano said with a smile, “There seems to be a different dynamic plus 98bp. referring to the Japanese name of the now between the euro and sterling market,” Federation of National Public Service an investor said. “Sterling is usually higher Personnel Mutual Aid Associations. beta but the CSPP no longer seems to be YEN Hirano believes that selling bonds to protecting the euro market from volatility.” regional investors will increase KKR’s Also in sterling, WALES & WEST UTILITIES KKR PLANS TO BECOME REPEAT YEN notoriety and, eventually, expand the agreed last week to buy back £48m of its ISSUER market for its products. SUB CLASSû"ûaMûlXED TO mOATINGû Although it plans to keep issuing in yen, guaranteed bonds due 2036 (callable KKR plans to issue yen-denominated bonds KKR already has ample cash and, as such, December 2018) in a tender offer. once or twice a year to fund its operations does not have a pre-set target for how much Approximately £103.5m were validly and enhance its name recognition in Japan, it will raise from yen bonds in future. tendered. especially among regional investors. However, Hirano did drop some hints. “It The purpose of the offer, which expired 4HEû53ûPRIVATEûEQUITYûlRMûRAISEDûcBNû WOULDûBEûNICEûIFûWEûCOULDûRAISEûcBNûTOû on March 26, is to “proactively manage the (US$380m) from debut Global yen bonds in cBN vûHEûSAIDû.ONETHELESS ûTHEûCOMPANYû balance sheet of the offeror’s group”, the early March after pondering such a move for does not want excessive issuance to imperil company said in a statement. around a year. its credit rating. “We, as a frequent borrower, want to KKR has been an active player in Japanese ALL CORPORATE BONDS IN STERLING raise yen funds once or twice a year,” said M&A and private equity, as local BOOKRUNNERS: 1/1/2018 TO DATE KKR Japan CEO Hirofumi Hirano at a recent conglomerates restructure and spin off non- Managing No of Total Share roundtable with reporters. core assets. In particular, it has focused on bank or group issues £(m) (%) Hirano said the frequency of future creating global growth opportunities for 1 HSBC 5 469.11 16.6 issuance would depend on market business units that had been overlooked 2 Lloyds Bank 4 374.49 13.3 CONDITIONS ûBUTûHEûSTRESSEDûTHATûTHEûlRSTû within larger groups. 3 Barclays 4 366.47 13.0 trade would not be a one-off. KKR recently acquired the semiconductor 4 MUFG 3 248.53 8.8 For its maiden deal, KKR chose tenors of manufacturing equipment activity of 5 NatWest Markets 3 238.82 8.4 lVE ûSEVENûANDûûYEARS ûBUTûITûPREFERSûLONGû Hitachi Kokusai Electric and a 60% interest 6 RBC 2 174.49 6.2 tenors for business reasons. in its video and communications business. 7 Morgan Stanley 1 160.00 5.7 “The weighted-average duration of the %ARLIERûLASTûYEAR ûITûSEALEDûAûcBNû,"/ûOFû 8 Deutsche Bank 1 149.34 5.3 latest trade was 9.1 years,” said KKR Capital Hitachi’s power tools unit, Hitachi Koki, and a 9 BNP Paribas 2 134.05 4.7 Markets Japan head Go Yamashita, pointing cBNûBUYOUTûOFûAUTO PARTSûMAKERû#ALSONICû 10 Mizuho 2 115.52 4.1 out that this was aligned with the goal of Kansei. KKR is also helping Panasonic Total 11 2,826.31 raising long-term funds. Healthcare and Pioneer DJ to grow globally. A private equity fund’s usual holding Source: Thomson Reuters SDC code: N8a PERIODûISûlVEûTOûSEVENûYEARS ûBUTû++2û NON-CORE CURRENCIES ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS EXCLUDING EXCLUDING SECURITISATIONS SECURITISATIONS DAIMLER DIVERTS TO DIM SUM BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share Managing No of Total Share German carmaker DAIMLER (A2/A/A-) has bank or group issues £(m) (%) bank or group issues SFr(m) (%) raised Rmb1bn (US$159m) from a maiden 1 NatWest Markets 30 4,171.35 12.8 1 Credit Suisse 34 3,486.76 25.5 offering of Dim Sum bonds. The three-year 2 HSBC 28 4,097.69 12.6 2 UBS 31 3,315.18 24.3 notes were priced at par to yield 4.8%, 3 Lloyds Bank 17 3,059.91 9.4 3 Verband Schweizerischer 3 2,221.72 16.3 tighter than guidance of 5.0% area. 4 RBC 20 2,983.56 9.1 4 ZKB 16 1,194.61 8.7 Daimler International Finance is the 5 Barclays 18 2,353.47 7.2 5 Raiffeisen Schweiz 7 875.44 6.4 issuer of the notes and Daimler is the 6 JP Morgan 6 2,226.59 6.8 6 BNP Paribas 8 734.06 5.4 guarantor. HSBC is arranger and manager on 7 BAML 8 2,169.84 6.7 7 Deutsche Bank 6 583.36 4.3 the issue, expected to be rated A2/A/A–. 8 Santander Global 6 1,813.20 5.6 8 Commerzbank 3 204.47 1.5 Daimler has been selling Panda bonds in 9 Nomura 11 1,548.46 4.7 9 Gazprombank 1 187.50 1.4 China since 2014. It last tapped the Panda 10 TD Securities 12 1,480.04 4.5 =9 VTB Capital 1 187.50 1.4 market for Rmb3bn in January with a Total 75 32,627.65 Total 61 13,656.81 private placement of three-year notes priced Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt. at par to yield 5.60%. (See Top News story for Source: Thomson Reuters SDC code: K05a Source: Thomson Reuters SDC code: K06b more.)

International Financing Review March 31 2018 31 FIG Euroclear beats the rush US DOLLARS with MREL-driven issue

SANTANDER LOOKS TO TEST SNP „ CORPORATES/FINANCIALS Dual-tranche deal to build loss-absorbing capacity APPETITE IN DOLLARS EUROCLEAR INVESTMENTS priced a dual-tranche largely because the MREL rules are not final. BANCO SANTANDER will be gauging investor euro trade designed to increase the loss- Euroclear Bank operates a very different model appetite this week for a possible foray into the absorbing capacity in its main subsidiaries, to to traditional lenders, and there is scope for the US high-grade market with its third ever dollar- satisfy new European rules. final rules for these outliers to change. denominated senior non-preferred bonds. Traditional banks account for most issuance The issuer also made clear that it was avoiding 4HEû3PANISHûINSTITUTIONûISûLIKELYûTOûlNDûTHATû driven by the Minimum Requirement for own Funds double leverage, a practice where issuers downstream even amid volatile broader markets, investors and Eligible Liabilities (MREL). The rules, however, senior debt in the form of more junior securities. are welcoming of sizeable, liquid deals, also apply to entities such as Euroclear Bank, which The corporate hybrid is designed to help especially from a high-quality large bank. is regulated by the Bank Recovery and Resolution maintain Euroclear’s current ratings. Santander has a €12bn-€14bn target - Directive (BRRD) to ensure it can perform its critical “They are issuing two tranches … because outlined in a December investor presentation economic functions even in a crisis. everything in senior [format] would create too - for senior non-preferreds in 2018. The bonds were issued from Euroclear much leverage, because Euroclear Investment is It will undertake three days of investor Investments (AA-/AA S&P/Fitch), a non- viewed as a corporate,” said a second lead. meetings in the US and Canada starting from operating holding company, but the proceeds “It’s not a question of the spreads they pay Tuesday ahead of a benchmark-sized deal. will largely be downstreamed to Euroclear SA/ on the transaction, it’s about the fact that better “To be fair, they are looking at dollars NV and Euroclear Bank (AA/AA+, S&P/Fitch), ratings means more business.” because they probably could get a better deal supervised by the National Bank of Belgium. here compared to euros where it has become Euroclear was established in 1968 as a central ‘GREY ZONE’ more challenging,” one syndicate banker said. securities depository providing post-trade services, IPTs of mid-swaps plus 55bp-60bp and 2.875% In mid-March, Santander sold a €1.5bn including settlement and asset servicing. area were revised to 45bp (+/-5bp) and 2.75% perpetual non-call seven-year Additional “The issuer didn’t need this new cash - they’re (+/-0.125%). Final terms followed at plus 40bp Tier 1 bond - its largest euro AT1 since 2014 - doing very well on the liquidity and the capital and 2.625%, when orders for the senior note with investor-friendly terms. basis,” said a lead on the transaction. The group were €1bn and €1.1bn for the hybrid. The bonds priced at 4.75%, or 50bp wide is targeting a 40%-45% fully loaded Common Euroclear’s only outstanding bond was a €600m of where fair value was perceived, but it was Equity Tier 1 ratio. 10-year, which printed at mid-swaps plus 52bp in deemed apt compensation given the market “It’s a financial market infrastructure issuer, November 2016. It was quoted at 16bp over when backdrop. subject to some regulations, given its critical the deal roadshow was announced on March 22, Issuance conditions in Europe since function within the settlement of securities for but had widened to 27bp by last Thursday. Santander’s last deal have become more financial institutions,” the lead added. “It’s a Bonds from Alliander, Deutsche Boerse and CHALLENGINGûFORûlNANCIALûBORROWERSû ûNEWû corporate issuer at the issuing level which holds Total offered further pricing comparables. issue concessions are moving higher and a financial subsidiary.” Despite the deal’s strong momentum, Annabel oversubscription levels have fallen across Rudebeck, head of non-US credit at Western the board. GETTING AHEAD Asset Management, said she was passing. The dollar market is also suffering from a The final MREL requirement for Euroclear is not “Euroclear is definitely a bit of grey zone in spike in short-term rates that has led to a set in stone, regulators having prioritised setting terms of sector,” she said. “It’s a fine credit, but dwindling of liquidity in primary markets. traditional banks’ targets. However, it wanted it’s also Thursday before a holiday.” Still, there are more than enough buyers to start tackling its future needs well ahead of She was also not looking to express a for new bonds and though investors are competing supply in the coming years. significant overweight to corporate hybrids. demanding more compensation, new issue The deal, via Citigroup and MUFG, had two “We don’t see any reason why they should compress premiums have not become too prohibitive tranches, a €300m minimum 12-year senior (AA-/ meaningfully at this point. It’s more a bottom-up yet. Santander’s dollar senior non-preferreds AA) and a €300m minimum 30NC10 corporate decision than a thematic decision. Every company has a priced in October were on Wednesday quoted hybrid (A/A+). It was capped at €700m in total. different approach as to why they’re using hybrids, and I more or less in line with their reoffer levels, It was issued at the holding company think you need to understand that.” according to MarketAxess, suggesting they level rather than the bank for more flexibility, Alice Gledhill, Pauline Renaud have weathered the broader market volatility. Its 3.80% 2028s were at a G-spread of 154bp compared with 155bp over Treasuries “The factors that have led to a fall in when technicals improve in April on the pricing. The 3.125% 2023s were quoted at demand for corporate credit - rising hedging back of a seasonal slowdown in supply,” plus 122bp versus a 120bp spread at reoffer. costs for foreign investors, lumpy M&A BAML analysts said. Though relatively better, there are still supply, selling pressure on the front end - High-grade bank spreads on average have mixed views on credit spreads and investor may persist for a while.” widened some 25bp year to date to around reception to dollar primary deals. Though conditions look tricky now, some 106bp, but still way inside their three-year “There is considerable pressure on credit feel the start of a new quarter could be high of 186bp, according to ICE BAML data. spreads at present as deteriorating technicals better for issuance. Some bankers warned it was still unlikely are overwhelming solid underlying credit “[Tuesday’s] strong credit outperformance to be a free-for-all market yet - as in the fundamentals,” said one senior credit strategist. signals that spreads should tighten further recent past - and investors were showing a

32 International Financing Review March 31 2018 BONDS CORPORATES

preference for large deals from liquid leverage than others and that could explain senior to Additional Tier 1 and Tier 2 but names. why Citizens had a tougher time than usual. junior to preferred senior debt. And even then these issuers may have to The last deal from Citizens was a Senior non-preferred bonds are being brace themselves to pricing deals with at least US$1.5bn trade in May 2017. The May 26 adopted across Europe to help lenders high single digits in new issue concessions. 2022s from that trade were quoted at a G increase their loss-absorbing capacity in the Bank of America Merrill Lynch, Citigroup, JP spread of 84bp, which was the nearest MOSTûCOST EFlCIENTûWAY Morgan and Santander will be the leads on the COMPARABLEûFORûTHEûlVE YEAR ûFORûAû 5NI#REDITûWASûTHEûlRSTû)TALIANûBANKûTOûSELLû Santander deal. concession in the 20bp area after accounting 3.0 ûAûõBNûlVE YEARû"AA""" """ ûINû for maturity extension. January this year that drew more than CITIZENS BANK BRAVES THROUGH One banker, however, argued that it was €4.1bn in orders. It priced at swaps plus TOUGH MARKET still a fair deal compared with the bank’s 70bp but has since widened to 85bp over. peers, whose bonds were in the mid 80s to “That set the stage, so UBI would be CITIZENS BANKSûlVE YEARûlXEDûANDûmOATERS û 90s area. an obvious candidate to follow,” said a which raised a combined US$750m, hardly #ITIZENSûPRICEDûTHEû53MûlXED RATEû banker. “AIB is a slightly different case, but moved in from IPTs and priced with chunky notes at 110bp over Treasuries from IPTs of ITûSHOWSûTHESEûSUB )'ûTRADESûAREûDElNITELYû CONCESSIONSûLASTûWEEKû ûREmECTINGûCONTINUEDû plus 115bp/120bp. The US$250m FRN came doable.” tightness in short-term liquidity. at three-month Libor plus 95bp. AIB Group’s debut holdco senior bond, a Citizens was able to tighten only 5bp- lVE YEARûRATEDû"A"" """ ûDREWûOVERû 10bp through bookbuild and priced at levels €2.25bn of demand for a €500m print which had 21bp in concession. The order EUROS despite a challenging market backdrop last book was a modest US$1.2bn. Thursday. “The tone is not that great because the MOODY’S ASSIGNS Ba3 RATING TO UBI The supply of SNP debt from Italy is deals that have come before have not SENIOR NON-PREFERRED expected to be relatively limited. UniCredit outperformed,” said one syndicate banker. outlined a €6bn SNP target at the end of h)TûWASûAûRAREûlVE YEARûTRADEûBYûAûDOMESTICû Moody’s has assigned a provisional Ba3 2017, but Intesa has ruled out any such lNANCIALûANDûTHEYûDIDûFAIRLYûWELLûINûTHEûENDû rating to senior non-preferred debt from UBI issuance in 2018. UBI’s own needs are also given the market conditions.” BANCA, potentially the second Italian bank to limited. In recent weeks, markets have become sell bonds in the format. “Given the relatively small amount of CHALLENGINGûFORûlNANCIALûISSUERSûAMIDûAû UBI updated its EMTN programme earlier junior senior debt that Moody’s expects spike in short-term rates. in March to include the asset class, which is TOûBEûISSUED ûATûLEASTûATûlRST ûANDûTHEû Bankers said issuers that were regular and current limited subordination in the form looking at size were getting more pricing ALL GLOBAL AND EUROMARKET YEN BONDS of Tier 2 securities and residual equity, BOOKRUNNERS: 1/1/2018 TO DATE the LGF analysis indicates likely high loss- ALL SAMURAI BONDS Managing No of Total Share given-failure,” the ratings agency wrote in BOOKRUNNERS: 1/1/2018 TO DATE bank or group issues ¥(m) (%) a note. Managing No of Total Share 1 Nomura 8 46,566.67 28.2 UBI has only issued covered debt in the bank or group issues ¥(m) (%) 2 Mizuho 7 38,466.69 23.3 euro market so far this year. It sold a €750m 1 Mizuho 9 39,345.00 18.7 3 Sumitomo Mitsui Finl 4 31,816.69 19.3 October 2022 senior (Baa3/BBB-/BBB-/BBBH) =1 Mitsubishi UFJ MS 9 39,345.00 18.7 4 Daiwa Securities 6 18,316.67 11.1 INû/CTOBERûLASTûYEAR ûITSûlRSTûFORAYûINûTHEû 3 Daiwa Securities 7 38,220.00 18.1 5 Barclays 4 11,650.00 7.1 institutional senior unsecured market after 4 Sumitomo Mitsui Finl 4 31,125.00 14.8 6 Chugoku Bank 2 6,666.67 4.0 three and a half years away. 5 Nomura 6 23,220.00 11.0 =6 Mitsubishi UFJ MS 2 6,666.67 4.0 That bond is bid at swaps plus 62.6bp, =5 Natixis 6 23,220.00 11.0 8 Dev Bank of Japan 1 5,000.00 3.0 virtually unchanged from its 62bp reoffer 7 BNP Paribas 3 16,125.00 7.7 Total 10 165,150.05 level. It has a €500m 4.45% 2027 NC2022 Total 10 210,600.00 Excluding equity-related debt. Including preferreds. Tier 2 bond (Ba3/BB/BB+) trading at a yield of Excluding equity-related debt. Source: Thomson Reuters SDC code: K10 3.47%. Source: Thomson Reuters SDC code: K11 ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION ALL INTERNATIONAL YEN BONDS BOOKRUNNERS: 1/1/2018 TO DATE BONDS (ALL CURRENCIES) BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share bank or group issues €(m) (%) Managing No of Total Share bank or group issues ¥(m) (%) 1 BNP Paribas 25 6,384.60 9.4 bank or group issues US$(m) (%) 1 Mizuho 16 77,811.69 20.7 2 Deutsche Bank 21 6,339.63 9.3 1 BNP Paribas 10 2,534.99 9.4 2 Nomura 14 69,786.67 18.6 3 SG 16 5,700.19 8.4 2 SG 4 2,219.88 8.3 3 Sumitomo Mitsui Finl 8 62,941.69 16.8 4 UBS 15 5,428.34 8.0 3 BAML 8 1,669.00 6.2 4 Daiwa Securities 13 56,536.67 15.0 5 Natixis 7 4,591.85 6.7 4 Barclays 8 1,641.25 6.1 5 Mitsubishi UFJ MS 11 46,011.67 12.2 6 Credit Agricole 7 3,710.32 5.4 5 UBS 7 1,474.61 5.5 6 Natixis 6 23,220.00 6.2 7 HSBC 19 2,916.22 4.3 6 Credit Agricole 3 1,429.96 5.3 7 BNP Paribas 3 16,125.00 4.3 8 Barclays 13 2,673.32 3.9 7 Lloyds Bank 3 1,377.19 5.1 8 Barclays 4 11,650.00 3.1 9 Lloyds Bank 4 2,486.61 3.7 8 HSBC 6 1,336.77 5.0 9 Chugoku Bank 2 6,666.67 1.8 10 NatWest Markets 9 2,418.28 3.5 9 Goldman Sachs 6 1,336.23 5.0 10 Dev Bank of Japan 1 5,000.00 1.3 Total 92 68,125.78 10 JP Morgan 6 1,275.97 4.8

Total 20 375,750.05 Including banks, insurance companies and finance companies. Excluding Total 32 26,830.28 equity-related and covered bonds. Excluding publicly owned institutions. Including all Euro, foreign and global issues. Excluding equity-related debt. Source: Thomson Reuters SDC code: K12 Source: Thomson Reuters SDC code: N11 Source: Thomson Reuters SDC code: J3a

International Financing Review March 31 2018 33 Ibercaja squeezes IPTs on one-off AT1 „ FINANCIALS Spanish lender meets target with €350m deal

The attractive headline coupon for IBERCAJA’s prices, but was bid nearly back at reoffer by late a lot of DTAs [deferred tax assets], so the quality €350m no-grow Additional Tier 1 issue helped morning. is not great,” he said. “Other names have more drum up more than €850m in orders, but Leads said the issue had weakened in line positive catalysts in the medium term.” the bonds slipped below par after terms were with the market since its pricing on Tuesday, and The bank is on the road to an IPO, though that squeezed well inside IPTs to 7%. paid just an eighth in new issue concession – has been pushed back until 2020. The Spanish bank had completed a roadshow considerably less than the roughly 50bp paid by Fitch describes Ibercaja’s capitalisation for the perpetual non-call five-year (B–/B by much larger banks Santander and CaixaBank for as adequate. Its fully loaded CET1 ratio had S&P/Fitch) the previous week. The size was AT1s in recent weeks. improved to 11.04% by year-end 2017, from capped, since Ibercaja – Spain’s ninth largest Those deals paid up partly due to renewed 10.17% at end-2016, but remains lower than that bank by assets – has limited needs in this investor focus on back-end spreads – a major of most peers. format. determinant of the coupon level should an AT1 Others however liked the bank’s franchise, Final books were around €850m, having deal not be called. The back-end spread was less particularly given its presence in some of Spain’s peaked in excess of €950m (pre-reconciliation). of a focus here, however, because Ibercaja’s cost stronger regions. It has also reduced non- Marketing started at low to mid-7s before of funding is comparatively so much higher. performing assets by 28% since 2014. guidance at 7.125% area. The bond issue is among the highest yielding “The coupon looks decent but, of course, “I’m surprised it got done at 7%, in some in the euro AT1 universe. A Permanent TSB it’s a smaller bank with low return on equity ways,” said a banker away from the deal. €125m 8.625% NC2021 was around 9.25% last and leverage ratio,” said Michael Huenseler, “I’d heard from some investors that they were Tuesday, according to Thomson Reuters data, managing director at Assenagon Asset trying to go through 7% and, given investors’ while a Caixa Geral de Depositos €500m 10.75% Management. unwillingness to follow deals tighter, I’m surprised NC2022 was at 6.45%. “On the other hand, it has an attractive they hung around for a 7% trade, actually. The business mix and potential for cost savings, also market is weaker and they squeezed the deal, so STILL TIGHT being located in a country we’re positive on.” that is set up to go wider, I’m afraid.” Even so, one investor said the level was a little tight. Barclays, BBVA, JP Morgan and UBS were joint The bonds opened half a point below par at “It’s a small bank in Spain – only number nine lead managers. last Thursday’s open, according to Tradeweb – and its capital is still relatively weak – there is Alice Gledhill

“At the moment, there is almost no NON-CORE CURRENCIES liquidity in the secondary market,” said COVERED BONDS Schulz, speaking at the IMN covered bond HAPPIER RETURN FOR LIBERTY conference last Tuesday. Schultz expects the ECB to stop buying in LIBERTY FINANCIAL, rated BBB- (S&P), smoothly EUROS September, and envisages a potential 10bp ISSUEDûAû!Mû53M ûlXED RATEû to 20bp widening of spreads by June 2019, three-year note last Wednesday, during a COVERED BONDS EYE END OF ECB’S resulting in a repricing in primary and a quiet week for local trades. FRIENDSHIP revival of interest from real money With NAB and Westpac as arrangers, the investors. SPECIALITYûlNANCEûGROUPûPRICEDûTHEûû The end of quantitative easing could see the “This will increase the demand dynamic April 9 2021s at 99.821 for a yield of 5.165%, return of investors priced out of the covered but this will not kick in until the ECB has in line with asset swaps plus 300bp area market by the European Central Bank, but left the market,” he said. guidance. only if secondary spreads widen But not all think the ECB will stop buying The new trade went better than Liberty’s SUBSTANTIALLYûlRST so soon. One investor, speaking to IFR on the previous local senior unsecured issuance in Since January the ECB has halved the pace May 2017. Then, it was forced to ramp up of total asset purchases and is now buying ALL COVERED BONDS (ALL CURRENCIES) pricing by 50bp to asset swaps plus 325bp €30bn monthly until at least September. BOOKRUNNERS: 1/1/2018 TO DATE for a A$200m three-year MTN, following a Issuers have taken no risks and Managing No of Total Share one-notch S&P rating downgrade to BBB- FRONTLOADEDûBORROWINGûINûTHEûlRSTûQUARTERû bank or group issues US$(m) (%) just after announcing the deal. Covered supply has already reached over 1 UniCredit 25 4,897.68 6.8 half of the €90bn total that Michael Schulz, 2 LBBW 22 4,355.58 6.1 MEB MULLS THREE-YEAR ISSUE HEADûOFûlXEDûINCOMEûRESEARCHûATû.ORD," û 3 Natixis 17 4,318.60 6.0 forecasts for the whole of 2018. 4 HSBC 21 4,076.39 5.7 MEMBERS EQUITY BANK, rated Baa1/BBB (Moody’s/ But after covered spreads hit record 5 Deutsche Bank 18 4,017.67 5.6 S&P), held an investor update call on March tights, the market weakened towards the 6 Credit Suisse 15 3,857.83 5.4 28, which ANZ, NAB and Westpac arranged, end of the quarter amid rumours that the 7 Barclays 17 3,561.86 5.0 for a potential issue of an Australian dollar Eurosystem had started reducing the size of 8 Commerzbank 19 3,476.66 4.8 three-year senior unsecured note. its orders. 9 SG 15 3,310.01 4.6 On November 1 last year, the bank sold a Tight Pfandbriefe from the likes of Aareal 10 Credit Agricole 19 3,241.84 4.5 !MûTHREE YEARûmOATING RATE ûPRICEDû "ANKûANDû7,û"ANKûHAVEûSTRUGGLEDûTOûlLLû Total 92 71,853.46 125bp wide of three-month BBSW. order books in recent weeks. Source: Thomson Reuters SDC code: J15a

34 International Financing Review March 31 2018 BONDS HIGH-YIELD

sidelines of the conference, does not see the 30%-35% of an issue compared with the 50% A direct competitor to Whole Foods, The central bank pulling back until the end of or 60% share it used to buy. Fresh Market has been struggling to turn its the year. Weekly ECB buying has also fallen business around since the Apollo leveraged h3YNDICATESûAREûDElNITELYûSTEPPINGûBACKû dramatically. Early in the quarter, covered buyout, causing the value of its debt to from new issuance and investors remain purchases settled in the week ending slump. cautious ahead of spread widening,” he said. January 19, for instance, totalled nearly The company’s 9.75% 2023 bonds have Ahead of the ECB’s departure, 88% of €2.5bn according to ABN AMRO analysts. been trading at a cash price below 60 cents market participants at the IMN conference In contrast, the week ending March 23 on the dollar in recent days, giving them a think spreads will be wider than their aggregated to only €176m, a historical low yield of close to 25%, according to current levels by year-end. But there were for a week, with €3.35bn in eligible eurozone MarketAxess data. doubts over the likely extent of the move. primary settlements, said ING analysts. Supermarkets and drug stores make up “We really didn’t see much spread just 1% of the overall US high-yield market, widening when the US just stopped bond where the trailing 12-month default rate buying,” said Steve Williams, head portfolio currently stands at a much lower 2.6%, Fitch MANAGERûFORûCOREûlXEDûINCOMEûATû.IKKOû said. Asset Management. HIGH-YIELD “We’ve only seen spread widening of about 10bp to 15bp recently on the portfolio EUROPE/MIDDLE EAST/ reduction programme.” UNITED STATES AFRICA While the market is waking up to the implications of the central bank wind-down SUPERMARKET DEFAULTS TO REACH 16% TUI WAITING FOR BETTER WINDOW there are also questions around IN 2018: FITCH reinvestments. Almost two weeks after holding an investor Schultz reckoned portfolio reduction The default rate in the US supermarket and call, TUI has yet to emerge, with leads saying would start in 2021. drug store sector is on track to reach 16% the tourism group is waiting for a “decent “The big question is where the ECB will THISûYEARûFOLLOWINGûTHEûBANKRUPTCYûlLINGûOFû market” before selling its seven-year trade. reinvest - will it be in the covered or the public SOUTHEASTERN GROCERS, according to ratings A banker away reckoned Tui would sector market?” he said. “If it’s the former, agency Fitch. struggle to get a deal done at the 1.50%-1.75% then the covered market should stabilise.” Stiff competition has pressured margins level he heard was being targeted. A lead Redemptions in the second quarter will for a number of supermarket chains, while be sizable at €28.8bn with June accounting Amazon’s recent acquisition of Whole Foods ALL EUROPEAN HIGH-YIELD ISSUERS for half of that amount, according to ABN Market has given new urgency to the need 1/1/2018 TO DATE AMRO analysts. for grocers to expand their online presence. Managing No of Total Share The other question, according to Michael Southeastern Grocers, the parent bank or group issues US$(m) (%) McCormick, director at Credit Suisse, is COMPANYûOFû"I ,OûANDû7INN $IXIE ûlLEDûFORû 1 JP Morgan 17 1,767.79 6.8 whether the ECB will reinvest using the bankruptcy protection on Tuesday to cut 2 BNP Paribas 15 1,696.38 6.5 primary or secondary market. some US$500m from its debt load. 3 Credit Suisse 13 1,633.71 6.3 “If you look at some of the euro books and 4HEûlLING ûWHICHûCOMESûJUSTûOVERûAûMONTHû 4 Deutsche Bank 14 1,522.79 5.9 take out the ECB order, you don’t have a after supermarket chain TOPS took a similar 5 Goldman Sachs 13 1,522.25 5.9 cleared trade, unfortunately,” he said. “The step, brought the default rate for the sector 6 Morgan Stanley 7 1,379.52 5.3 secondary market is always going to take its to 12% over the past year, according to Fitch. 7 ING 10 1,331.43 5.1 cue from the primary market.” The ratings agency, however, said that 8 HSBC 10 1,089.27 4.2 The ECB is by far the biggest holder of rate was likely increase to 16% by the end of 9 BAML 7 1,032.12 4.0 eurozone covereds, having purchased 2018 as it expected THE FRESH MARKET (a 10 Natixis 9 1,006.06 3.9 almost €250bn of paper under CBPP3. premium grocery chain Apollo Global Total 44 25,946.65 However there are signs it is scaling back Management took private in 2016) also to Excluding equity-related debt. primary orders, which now average around default on its debt. Source: Thomson Reuters SDC code: B06c

ALL US$ DENOMINATED HIGH-YIELD BONDS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS ALL ASIAN HIGH-YIELD ISSUERS BOOKRUNNERS – 1/1/2018 TO DATE 1/1/2018 TO DATE 1/1/2018 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues €(m) (%) bank or group issues US$(m) (%) 1 JP Morgan 46 6,933.08 11.1 1 BNP Paribas 13 1,287.64 7.4 1 Bank of China 7 720.15 6.8 2 Credit Suisse 38 5,115.06 8.2 2 JP Morgan 14 1,226.51 7.0 2 Citic 8 695.18 6.6 3 Barclays 31 4,283.48 6.9 3 Deutsche Bank 12 1,114.08 6.4 3 Credit Suisse 8 595.01 5.6 4 Wells Fargo 31 4,174.66 6.7 4 Credit Suisse 11 1,098.37 6.3 4 Haitong Securities 11 435.19 4.1 5 BAML 40 4,093.96 6.6 5 Goldman Sachs 12 1,085.91 6.2 5 Citigroup 5 423.92 4.0 6 Deutsche Bank 32 4,013.06 6.4 6 Morgan Stanley 6 997.97 5.7 6 Morgan Stanley 6 392.20 3.7 7 Citigroup 37 3,914.04 6.3 7 HSBC 10 888.37 5.1 7 BAML 5 377.50 3.6 8 Goldman Sachs 34 3,894.81 6.3 8 Natixis 7 722.39 4.1 8 Guotai Junan Securities 10 360.54 3.4 9 Morgan Stanley 27 3,207.72 5.2 9 ING 6 652.07 3.7 9 Deutsche Bank 5 332.33 3.2 10 RBC 19 2,028.39 3.3 10 UniCredit 6 631.06 3.6 10 VTB Capital 4 324.99 3.1 Total 113 62,254.07 Total 39 17,414.70 Total 27 10,548.43

Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt. Excluding equity-related debt. Source: Thomson Reuters SDC code: B5 Source: Thomson Reuters SDC code: B6 Source: Thomson Reuters SDC code: B06d

International Financing Review March 31 2018 35 Mackay exposes Aussie HY risks „ ASIA HIGH-YIELD Sugar miller gets extension in first Australian bond default in 17 years

Australia’s expanding high-yield and unrated “We look to assist mid-market companies to job search provider SEEK provided most comfort bond market received a reality check when pursue their growth strategies by providing a among such issues as it had four lead managers MACKAY SUGAR effectively defaulted on its A$50m financing option, beyond local bank lending and and attracted strong support from local fund (US$38.5m) 5.25% April 5 2018 note, having the US private placement market,” said John managers. sought and secured a 12-month extension from Ricciotti, head of debt capital markets at FIIG Bayley also noted the benefits of the retail bondholders. Securities. market, where ASX-listed bonds provide greater The distressed debt exchange, which Around two-thirds of these bonds are sold to liquidity and clarity to investors with continuous represents an event of default according to FIIG’s 7,000-strong wholesale client base, the disclosure requirements, including half-yearly ratings agencies’ definitions, underlines the majority of which are self-managed superannuation reports. difficulties that individual investors face in funds, with the rest going to institutional investors Healthcare and homecare provider Australian assessing the credit risks of unlisted, unrated and high-net-worth individuals. Unity printed the first such bond with a A$250m credits, said Phil Bayley, principal at ADCM Growth in the unrated bond market has five-year note sale in November 2015. Real- Services, an independent DCM consultancy. been fuelled in part by reduced bank lending estate developer Peet issued a A$100m five-year “Mackay Sugar is a farmer-owned cooperative to sectors such as property, resources and paper in June 2016, while Qube Holdings sold and high-net-worth individuals will have a hard non-bank financials, while the buyside has A$300m of subordinated seven-year retail notes time monitoring the company’s financial health grown as investors seek to diversify their fixed- in September 2016. because it is not ASX-listed and so not obliged to income portfolios into higher-yielding corporate The last ASX-listed high-yield trade was release continuous disclosure. The fact the bond instruments. residential developer Villa World, which sold a has only one sponsoring broker and thus only one A$50m five-year floater in April 2017. price point is another negative,” Bayley said. WHOLESALE GROWTH The Australian local market’s first default With the unrated bond plunging to a cash The first high-yield bond sold in Australia’s since 2001 serves as a timely reminder of the price of around 50 in the secondary market, institutional wholesale market was issued by risks associated with higher returns, but one investors clearly doubt they will be repaid at face Qantas Airways, which raised A$750m from bad apple is not expected to spoil an asset value next year, despite the company’s plans Deutsche Bank-arranged seven-year and eight- class which has grown from nothing six years to raise cash from asset sales and third-party year issues in 2014. These came just after the ago to become a significant alternative to the investment. airline suffered downgrades to junk status, which investment-grade market. Indeed it is a lack of Bondholders rank behind the company’s were subsequently reversed. supply rather than a lack of demand which has bankers, National Australia Bank and Rabobank, National Australia Bank was the first of been holding the market back. which also agreed to extend their secured credit the country’s four major lenders to arrange a High yield is dwarfed by Australia’s bank- lines by 12 months, to March 2 2019, and will wholesale market deal the same year, bringing dominated A$1trn-plus IG arena, although within be paid off first if Mackay’s restructuring plan is the high-yield bond market into the mainstream. the corporate space it now makes up a sizeable successful. NAB has led deals on a sole or joint basis for share of overall issuance, with more than A$1bn Mackay Sugar’s bond, issued in April 2013, NEXTDC, Centuria Capital, SEEK and others. raised in 2017, in all markets, versus A$12.6bn in was the second high-yield offering arranged ADCM’s Bayley points out that unrated the Triple B and higher-rated space, excluding by FIIG Securities, Australia’s largest specialist sole-led wholesale high-yield market issues Kangaroos. fixed-income broker, which opened the domestic share some of the weaknesses of single-broker “What Mackay Sugar really shows is the high-yield market in 2012. arranged deals, although the former do benefit importance of a portfolio approach to high-yield FIIG has now helped sell more than A$1.8bn from the greater involvement of asset managers, bond investments whereby small amounts are of bonds across 45 transactions, typically at which can be relied upon to do a lot of credit spread over many issues to lessen the pain from sizes of A$40m–$50m with callable five-year work for their bond purchases. company-specific problems,” a DCM manager structures. To date over A$400m of bonds have He suggested that the A$175m five-year said. matured or been repaid. floating-rate note issued in April 2017 by online John Weavers

and investor, however, said last week there initially sought, after removing a 10-year Tui reported debt of €5.68bn and a were no whispers out on the deal. from its offering, and priced the remaining LEVERAGEûRATIOûOFûXûFORûTHEûûlNANCIALû Most borrowers took a step back ahead of three tranches wider than price talk. year and is targeting 3x-2.25x for FY2018. the Easter holiday, with the market still soft Tui, rated Ba2 (positive) by Moody’s and after some deals suffered tricky execution or BB (stable) by S&P, last tapped the market in ORANO PLANS NON-DEAL ROADSHOW poor secondary performance. /CTOBERû ûSELLINGûAûõMûlVE YEARûATû Although LKQ managed to raise €1bn the ûTOûRElNANCEûAûõMûûûNOTE ORANO will hold a non-deal roadshow in week before last, the two tranches came at the The proceeds from the new offering will London on April 11 via Santander. The mid-point of talk, in both cases unchanged be used for general corporate purposes. Tui rebranded New Areva will present its FY from IPTs. The €750m 8NC3 came at 3.625% said in a recent presentation that a changed 2017 results and outlook, according to last and the €250m 10NC5 at 4.125%, both at par. MIXûOFûDEBTûlNANCINGûFORûAIRCRAFTûRE mEETINGû Wednesday’s announcement, and is not The bonds held up last week, though, the INûFAVOURûOFûBONDûISSUANCEûANDûlNANCEû planning a transaction “in the short term”. former bid at 100.44 and the latter at 100.25. LEASESûWOULDûNOTûIMPACTûCASHmOWûTOû Areva transferred its bond debt to Orano Meanwhile, COTY cut the size of its bond shareholders and have “no material impact” in late 2016. The company has net debt of offering to US$1.5bn-equivalent from US$2bn on its leverage ratio. close to €3bn, CEO Philippe Knoche said in a

36 International Financing Review March 31 2018 BONDS STRUCTURED FINANCE

January presentation linked to the Bankers consider £500m as benchmark 13.1 years. The LTVs are low too, with a company’s rebranding. size for prime RMBS and master trust issuers current LTV of 70% and a Moody’s indexed Areva held a non-deal roadshow via JP have been able to limit their reliance on LTV of 49%. Morgan last March. It last issued in March sterling buyers by issuing dollars too. Away A low credit enhancement requirement of 2014, selling a €750m nine-year, and does from the master trusts, PMF 2018-1, the 13% also allows a larger proportion of Triple not have any upcoming maturities until largest of the two buy-to-let deals to price A bonds than in other non-conforming November 2019, according to Eikon data. this year, sold £388m. deals. The seniors account for 88.5% of the Orano, rated BB positive by S&P, is owned Joint leads on RMAC No.1, Bank of America capital structure, compared with 71% for the by the French state (45.2%), the CEA (Atomic Merrill Lynch and Natixis, indicated a £400m Stanlington deal and 75% for Kensington’s Energy Commission) (4.8%), Areva SA (40%), size during marketing and said £500m was a RMS 30, which was priced in July last year. Japan Nuclear Fuel Ltd (5%) and Mitsubishi possibility, before pricing for the lower However, the mortgages were originated Heavy Industries (5%). The latter two amount. to often loose pre-crisis standards, and completed their total €500m investment last The underlying mortgages are legacy non- arrears numbers are high: 24% of the pool is month. conforming loans originated before 2007 by in arrears, with 8% over 90 days. Borrowers GMAC-RFC, which was bought by Fortress in with CCJs make up 18.4%, interest-only 2010 and renamed Paratus. loans make up 77%, and 43% have been The portfolio had formed the collateral restructured. for six earlier RMBS deals off the RMAC The capital structure comprises a 3.74- STRUCTURED FINANCE shelf, which had not been called because the year Triple A tranche and three pre-crisis margins their bonds were paying investment-grade mezzanine pieces at 5.21 were inside current market levels. years, as well as two Class Xs and a pair of EMEA MBS However, when real estate investor unrated and retained Class Z notes. Clifden made the RMAC deals part of a At pricing on Tuesday the deal’s Triple As PARATUS PRICES PARTIAL RMAC REFI hostile tender offer, seeking to take control were sized at £351.7m. IPTs the previous of the SPVs, Paratus’s response was quickly Tuesday had been high 60s to 70bp over PARATUS AMCûPRICEDûTHEûDELAYEDûRElNANCINGû to call the deals and they were redeemed on ,IBOR ûWHICHûWASûRElNEDûTOûBPûAREAûONû of non-conforming mortgages from its March 12. -ONDAYûBEFOREûBPûlNALûPRICING RMAC shelf on Tuesday after settling for a A source with direct knowledge of the A clear comparable was Kensington’s RMS smaller deal size done at tight levels. MATTERûSAIDû0ARATUSûHADûlRSTûCONSIDEREDû 30, which was heard bid in secondary as “From the conversations on the roadshow calling the RMAC deals and securitising wide as 67bp, suggesting investors were it seemed they intended to place the whole them afresh after getting tighter than being offered very little in the way of new- transaction if they could,” said one investor. expected pricing in its February 2017 issue premium. “It looks like they didn’t want to widen securitisation of other legacy non- Classes B, C and D were heavily Triple A spreads to the level required to do conforming mortgages, Stanlington No.1. oversubscribed and all came inside IPTs and so.” But EU proposals in July to outlaw at the tight end of guidance. Pricing had been held over from the end SECURITISATIONûOFûSELF CERTIlEDûMORTGAGES û The £11.9m Aa2/AA+ Class B came at of the previous week and those Triple As which make up the majority of the RMAC three-month Libor plus 95bp after 100- appeared to be the sticking point. They mortgages, halted those plans. The EU 110bp IPTs. The £11.9m A2/AA- Class C came ended a modest 1.2 times subscribed at the ENDEDûUPûRULINGûTHATûLEGACYûSELF CERTIlEDû at three-month Libor plus 130bp after 140- lNALûDEALûSIZEûOFûaM ûINûCONTRASTûTOûTHEû mortgages could be securitised after all, and 150bp IPTs; and the £8m Baa2/A Class D mezzanine tranches, which were all very shortly afterwards Clifden began its assault came at three-month Libor plus 160bp after well covered. on the deals. 180-190bp IPTs. Subscription levels on the Paratus had a £650m portfolio to The RMAC mortgages themselves have mezz were 3.7x, 5.9x and 4.3x. RElNANCE ûWHICHûATûFULLûSIZEûWOULDûHAVEû clear strengths and weaknesses compared The two Class X notes, rated Ca/CCC and made the new issue, RMAC NO.1, the largest with newly originated non-prime loans. shown as “call desk”, were placed at 290bp sterling RMBS sale this year. They are of course very well seasoned, at and 400bp.

ALL EUROPEAN ISSUERS GLOBAL SECURITISATIONS IN STERLING ALL INTL ISSUERS (EXCLUDING SELF-FUNDED) BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues £(m) (%) bank or group issues US$(m) (%) 1 SG 4 3,030.38 12.9 1 MUFG 1 1,006.20 19.2 1 JP Morgan 31 7,933.79 10.2 2 BAML 6 1,968.42 8.4 2 Lloyds Bank 8 817.76 15.6 2 Wells Fargo 25 7,461.88 9.6 3 Lloyds Bank 8 1,658.33 7.1 3 Citigroup 4 668.78 12.7 3 BAML 25 7,000.09 9.0 4 BNP Paribas 7 1,432.50 6.1 4 BNP Paribas 5 581.55 11.1 4 Citigroup 26 5,144.52 6.6 5 MUFG 1 1,398.52 5.9 5 BAML 5 482.85 9.2 5 Credit Suisse 18 4,552.77 5.9 6 Cooperatieve Rabobank 1 1,309.36 5.6 6 HSBC 3 374.33 7.1 6 Goldman Sachs 11 4,221.06 5.4 7 Credit Agricole 3 1,196.56 5.1 7 RBC 3 227.10 4.3 7 SG 8 4,213.22 5.4 8 Citigroup 4 1,122.43 4.8 8 Natixis 2 214.10 4.1 8 Barclays 16 3,952.77 5.1 9 UniCredit 4 1,036.61 4.4 9 Barclays 2 197.50 3.8 9 Deutsche Bank 19 3,818.58 4.9 10 Commerzbank 1 946.60 4.0 10 JP Morgan 1 175.00 3.3 10 RBC 13 3,014.83 3.9 Total 30 23,508.41 Total 14 5,250.28 Total 117 77,567.76

Includes securitisations, credit-linked notes (Euro, foreign, global and Including Euro, foreign, global and domestics, excluding CDOs. Includes securitisations, PFI bonds and credit-linked notes. Excludes US domestics) and excludes CDOs. global ABS/MBS, CDOs and self funded issues.

Source: Thomson Reuters SDC code: B16n Source: Thomson Reuters SDC code: B16i Source: Thomson Reuters SDC code: J10d

International Financing Review March 31 2018 37 NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 29/3/2018 Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type AMT 2018-1 US$500 10.0 3.652 Barclays/Citigroup/JP Morgan/ Aaa/NR/AAA ABS Morgan Stanley/MUFJ EVGRN 2018-1 US$600 2.94 2.950 TD Securities/JP Morgan/Citigroup NR/AAA/AAA ABS SWISS CAR 2018-1 / AMAG Leasing SFr275 - 0.120 Credit Suisse NR/NR/AAA ABS

CLIFDEN EXTENDS RMACS DEADLINE the WA remaining term is 40 months. The Unemployment is low and consumer AGAIN, OUTLINES PLANS new/used split is 78%/22% and the private/ leverage isn’t off the charts,” Brown told IFR. commercial split is 80%/20%. “So when you see value, you have to get CLIFDEN has again extended the early tender The originator last came to market with involved.” deadline for the RMACS series of non- Swiss Car ABS 2016-2 in April 2016. AMAG’s Most consumer ABS is short-dated, Triple A conforming RMBS that formed part of its main business is the importing of VW group rated paper. As of quarter-end, three-year controversial tender offer announced in vehicles and marketing them in Switzerland lXED RATEû4RIPLEû!ûPRIMEûAUTOûANDûCREDIT CARDû January. through a dealer network. paper was only about 10bp wide of its 12- That offer also included the RMAC series month tights, according to JP Morgan data. of deals but those have since been called and By contrast, the average investment-grade RElNANCEDûBYûTHEûBONDSûSERVICERûANDû EMEA CLO corporate bond spread has widened 18bp administrator, Paratus. The RMACS series is since January, according to IFR data. not yet callable. BLUEMOUNTAIN EUR CLO 2016-1 REFI But the effect of the repatriation of cash If enough noteholders tender, the real GETS RATING by US companies on US corporate bond estate investor said it intends to introduce supply could spill over into structured an additional call option into the deals’ !ûRElNANCINGûOFû%UROPEANûLEVERAGEDûLOANû products. terms, exercisable by itself or the servicer. It CLO BLUEMOUNTAIN EUR CLO 2016-1 received The 10 largest companies with foreign said it could compensate the holder of the provisional ratings from Moody’s last week. earnings held around US$647bn of existing call rights. The deal is managed by BLUEMOUNTAIN FUJI marketable securities as of the second half The initial tender offer set the RMACS MANAGEMENT. of 2017. While US corporate bonds make up early tender deadline for January 26. Earlier Moody’s said the Class X Triple As will pay the biggest US$288bn swathe of total this month it was extended to March 23 and 30bp over three-month Euribor and the company holdings, structured products the early tender premiums were increased Class A Triple As 79bp. The Double As will accounted for only US$54bn of their so that when added to the purchase prices pay 115bp, the Single As 160bp, the Triple investments. they gave a combined price of par. Bs 245bp, the Double Bs 438bp and the The ABS market could easily shrug off a The early tender deadline has now been Single Bs 620bp. pause in buying by the treasury departments extended to April 6. There is a four-year reinvestment period. of big corporations. But the pressure they The premiums have been changed too. JP Morgan is arranger. can exert in the corporate bond market The combined price for noteholders who would likely push spreads wider in that tender after March 23 but before April 6 will sector - and ABS nearly always follows be 101.5%. US ABS corporates wider at some point down the For those noteholders that have already line. tendered, Clifden said it will increase the ABS INVESTORS READY FOR Q2 “It’s reasonable to think those combined price from par to 102%. VOLATILITY [companies] won’t be active in either of those markets,” Christopher Creed, co-head Investors in bonds backed by consumer debt of the globalised securitised investment EMEA ABS are gearing up for more volatility in the team at Goldman Sachs Asset Management, second quarter, but could be ready to snap said of large corporations. AMAG LEASING SELLS SWISS AUTO ABS up asset-backed securities on the cheap. But buying opportunities would also Bonds backed by car loans, student debt, hinge on how spreads hold up when Swiss car leasing group AMAG LEASING priced credit cards and related consumer credit comparing the different segments of credit. auto ABS SWISS CAR ABS 2018-1 on Tuesday, have been fairly immune to the gyrations “The key drivers for spreads are probably selling a SFr275m Triple A (Fitch only) bond seen so far this year in stocks and corporate less of the technicals - who are the buyers via Credit Suisse. bonds. and if [some] are gone - and more of what is The notes came at mid-swaps plus 45.3bp, But with rates on the rise - and a steady the relative value between the two,” Creed with an issue price of par and a 0.12% stream of headline risk emanating from said. coupon. They are structured as three-year Washington - few expect the relative calm Wells Fargo also pointed to uncertainty in soft bullets. IPTs were for a 0.10%/0.15% that has sustained the ABS market to last Washington and escalating trade tensions as yield. much longer. other reasons for its forecast for more The portfolio has a three-year revolving Some level of volatility should be expected, volatility in the second quarter. period. Residual value is securitised and can said Chris Brown, co-portfolio manager of the “Concerns regarding a global trade war make up a maximum 50% of the portfolio. Car T. Rowe Price Total Return Fund, who noted could send volatility higher,” the bank’s dealers are supposed to pay RV to the issuer. that an unusually placid 2017 left investors analysts wrote in their outlook for the There are 12,407 loans in the portfolio with few opportunities to pick up bargains. quarter. with an average outstanding balance of “So in a way, some volatility is healthy. “In addition, the United States is entering SFr27,000. Seasoning is seven months and Fundamentally things are still quite strong. into its midterm election cycle. [But] we

38 International Financing Review March 31 2018 BONDS STRUCTURED FINANCE

continue to believe that spread widening in Collateral: Credit cards. increase the number of transactions that we the structured products market is likely Largest tranche: Class A US$600m, with will see this year and beyond,” said Deborah driven by factors outside of our market.” 2.94-year WAL; priced at interpolated swaps &ESTA ûAûPARTNERûATûLAWûlRMû-ILBANK û4WEED û Many ABS issuers need to issue bonds on a plus 35bp versus guidance at interpolated Hadley & McCloy. regular basis to offset ongoing loan originations. swaps plus 35bp area. CLOs are the biggest buyers of leveraged That often means quarterly, and many are loans and the passing of Monday’s midnight expected to continue selling new bonds even if NSLT 2018-1 deadline in the Appeals Court is a key part of the market gets somewhat choppy. NELNET priced a US$473.75m 144A student the industry’s push to roll back the “We would just motor on as long as there loan ABS transaction called NELNET STUDENT regulation. isn’t anything that knocks the market off LOAN TRUST 2018-1. BMO structured the deal and The Loan Syndications and Trading the rails,” one syndicate head told IFR. “But was a lead manager with Goldman Sachs and Association (LSTA), the trade group for the IFûYOUûHAVEûSOMEûmEXIBILITY û;WEûSAY=ûDONTûBEû RBC. US$980bn US loan market, sued the Fed and wedded to just going. Be a little patient.” Collateral: Pool consists of both SEC in 2014, saying the rules were “arbitrary, rehabilitated student loans (50%) and non- capricious” and “an abuse of discretion”. US ABS DEAL PRICINGS rehabilitated student loans (49%), according “We believe that the DC Circuit Court’s to Moody’s pre-sale. decision was correct so we are pleased that AMERICAN TOWER TRUST Largest tranche: Class A2 US$375.75m, the government chose not to appeal,” Elliot AMERICAN TOWER priced a US$500m secured with 7.88-year WAL, rated Aaa/AA+; priced Ganz, general counsel at the LSTA, said in an wireless tower transaction, called AMERICAN at one-month Libor plus 76bp. email. TOWER TRUST I, SERIES 2018-1. The deal comprised Direct comp: NLST 2017-3 (7/12/17) Class A Fed spokesperson and an SEC ONEûSERIESûOFû YEAR û4RIPLE !ûRATED ûlXEDû A US$539.4m, with 8.07-year WAL, rated spokesperson declined to comment. rate securities. Barclays structured the deal Aaa/AA+, priced at one-month Libor plus By April 2 the Appeals Court will give a and was a joint bookrunner with Citigroup, 85bp. mandate for the risk-retention rule for CLOs JP Morgan, Morgan Stanley and MUFG. to be vacated, allowing managers of those #OLLATERALû)SSUANCEûOFûCERTIlCATESûBACKEDû funds to legally issue deals without holding by mortgages representing more than 88% US CDO retention. of the annualised run rate (ARR) net The CLO market still has one hurdle to CASHmOWû.#& ûANDûGUARANTEEDûBYûTHEûDIRECTû REGULATORS DECLINE TO CHALLENGE pass, however, as the US government has parent of the borrowers. Those guarantees CLO RETENTION EXEMPTION until May 10 to ask the Supreme Court to are secured by a pledge and hear the case, Ganz said. If regulators do not lRST PRIORITY PERFECTEDûSECURITYûINTERESTûINû Issuance of CLO funds could surge after the appeal to the Supreme Court by then, the 100% of the equity interest of the borrowers Federal Reserve and Securities and RULINGûWILLûBEûlNALû-ANAGERSûCANûCONTINUEû (which own or lease 5,116 wireless Exchange Commission decided not to to issue CLOs without retention in that time. communication sites) and of the direct appeal a February court ruling that parent, according to a Fitch pre-sale. exempted the deals from Dodd-Frank ‘skin HEALTHY ISSUANCE Largest and only tranche: US$500m, with in the game’ rules. Despite the uncertainty of an appeal, 10-year maturity, rated Triple A; priced at Regulators’ decision not to seek a review issuance has been brisk this year at about Treasuries plus 90bp versus guidance at of the retention rules, which require US$28bn in 2018 through March 23, Treasuries plus 100bp area. managers to hold 5% of their funds’ risk, according to Thomson Reuters LPC could boost CLO issuance by managers that Collateral data. Several managers have EVERGREEN CREDIT CARD lacked the capital to comply. It could also issued CLOs that are not risk-retention TORONTO-DOMINION BANK priced an upsized cut borrowing costs for companies that compliant, but included language to US$600m (increased from US$400m) credit depend on the US$511bn US CLO market for increase the fund to buy retention if the rule card ABS transaction, called EVGRN 2018-1. TD lNANCING still stood at closing. Securities, JP Morgan and Citigroup were joint The ruling could be transformational for “The obvious conclusion is the ruling leads. the CLO market and will “only further should help the CLO market grow, but we

GLOBAL STRUCTURED FINANCE IN US$ US ASSET-BACKED SECURITIES STRUCTURED FINANCE – ALL INTL ISSUERS BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 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 Citigroup 68 26,418.77 14.5 1 Citigroup 40 16,573.17 20.8 1 JP Morgan 31 7,933.79 9.4 2 JP Morgan 65 21,470.52 11.8 2 BAML 27 7,531.56 9.5 2 Wells Fargo 26 7,643.94 9.1 3 Wells Fargo 58 21,344.95 11.7 3 JP Morgan 29 7,128.33 9.0 3 BAML 27 7,534.01 8.9 4 BAML 52 18,259.99 10.0 4 RBC 21 5,820.13 7.3 4 Citigroup 27 5,445.36 6.5 5 Credit Suisse 35 14,329.09 7.8 5 Deutsche Bank 22 4,815.23 6.0 5 Barclays 18 4,811.12 5.7 6 Goldman Sachs 32 10,738.94 5.9 6 Barclays 20 4,704.39 5.9 6 Credit Suisse 18 4,552.77 5.4 7 Morgan Stanley 26 10,239.97 5.6 7 Wells Fargo 22 4,544.56 5.7 7 SG 9 4,460.78 5.3 8 Deutsche Bank 31 7,908.70 4.3 8 Mizuho 13 4,290.70 5.4 8 Deutsche Bank 20 4,443.84 5.3 9 RBC 26 7,814.01 4.3 9 Goldman Sachs 13 3,610.73 4.5 9 Goldman Sachs 11 4,221.06 5.0 10 Barclays 29 7,617.34 4.2 10 MUFG 12 3,351.49 4.2 10 RBC 14 3,764.82 4.5 Total 298 182,558.66 Total 120 79,593.38 Total 127 84,362.48

Including securitisations (Euro, foreign, global and domestics, excluding Excludes MBS. Includes securitisations, PFI bonds, self-funded issues and credit-linked CDOs) and PFI bonds. notes. Excludes US global ABS/MBS and CDOs.

Source: Thomson Reuters SDC code: B16b Source: Thomson Reuters SDC code: F14 Source: Thomson Reuters SDC code: J10c

International Financing Review March 31 2018 39 think the overall impact on size will be 120bp–125bp and 160bp–165bp initial price fairly modest considering most managers ASIA-PACIFIC MBS talk, respectively. had solved for risk retention,” Brad Rogoff, The A$30m Class B, A$23.25m Class C, head of credit strategy at Barclays, said in an LA TROBE PRINTS LARGEST RMBS A$16.5m Class D, A$9.75m Class E and email. A$6.75m Class F notes were priced at one- Citigroup is predicting record CLO volume Non-bank lender LA TROBE FINANCIAL issued month BBSW plus 200bp, 305bp, 405bp, of US$140bn in 2018, compared with its sixth and largest batch of non- 605bp and 695bp, compared with 200bp US$117bn in 2017, which was the second conforming RMBS last Tuesday with an area, low 300s, low 400s, 600bp area and largest year for volume, according to LPC increased A$750m (US$578m) sale through 700bp area initial guidance, respectively. Collateral data. La Trobe Financial Capital Markets Trust Retained equity notes of A$5.25m After February’s court ruling, Morgan 2018-1. completed the trade. Stanley increased its 2018 US CLO forecast Macquarie was sole arranger, and joint The B, C, D and E notes were partially pre- by US$10bn to US$110bn and Deutsche lead manager with CBA, NAB, Natixis, Westpac allocated. Bank raised its forecast to US$120bn from and HSBC on the trade, which had a The Bs to Es have 3.7-year WALs, while US$110bn. minimum indicative issue size of A$500m. the Fs have a 2.9-year WAL. “The legacy of risk retention, absent an The A$150m of Class A1 notes, with a The A1 notes have credit support of 30% appeal, will be much greater investor 0.34-year weighted-average life, were priced and the A2s have 12.2%. education, opening the eyes of a lot of in line with guidance at one-month BBSW The Bs to Fs have respective support of investors who may not have looked at CLOs plus 70bp. 9.2%, 5.1%, 2.9%, 1.6% and 0.7%. previously,” said Tom Majewski, founder of The A$375m of Class A1L and A$133.5m The transaction has 13.45% of loans to Eagle Point Credit Management, which of Class A2 notes, both with 2.7-year WALs, credit impaired borrowers, well under the invests in the equity and junior debt of were offered at 125bp and 165bp over one- industry standard within the specialist CLOs. month BBSW, at the wide end of lending sector, according to the leads.

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 29/3/2018 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) SSAR US DOLLARS Mar 27 2018 KfW US$4bn Apr 12 2021 2.625 99.87 MS flat / T+25.35 2.67

EUROS Mar 27 2018 Baden-Wuerttemberg €500m Apr 5 2028 0.8 99.895 MS-18 / B+28.7 0.811

Mar 27 2018 Rentenbank €50m incr May 18 2027 0.625 99.295 - 0.705 (€1.2bn) Mar 28 2018 France linker €3.5bn Jul 25 2036 0.1 108.738 OATi ‘30+27 -0.361

Mar 28 2018 Land Berlin €250m Apr 12 2021 3mE+40 101.904 3mE-22 -

NON CORE Mar 26 2018 IFC (Green) SKr500m May 12 2025 0.9 99.931 - - CORPORATES US DOLLARS Mar 26 2018 Dollar General US$500m May 1 2028 4.125 99.899 T+130 4.137

Mar 26 2018 Allstate Corporation US$250m Mar 29 2021 3mL+43 100 3mL+43 -

Mar 26 2018 Allstate Corporation US$250m Mar 21 2023 3mL+63 100 3mL+63 -

Mar 26 2018 Bell Canada US$750m Mar 29 2048 4.464 100 T+140 4.464

Mar 26 2018 CenterPoint Energy US$300m Apr 1 2023 3.55 99.782 T+97 3.598

Mar 26 2018 CenterPoint Energy US$300m Apr 1 2028 4 99.942 T+117 4.007

Mar 26 2018 ABB Finance (USA) US$700m Apr 3 2020 2.8 99.936 T+55 2.833

Mar 26 2018 ABB Finance (USA) US$450m Apr 3 2023 3.375 99.932 T+75 3.39

Mar 26 2018 ABB Finance (USA) US$750m Apr 3 2028 3.8 100 T+95 3.8

Mar 26 2018 Valero Energy Part US$500m Mar 15 2028 4.5 99.66 T+170 4.543

Mar 27 2018 Colonial Pipeline US$550m Apr 15 2048 4.25 98.826 T+128 4.32

Mar 27 2018 CRH America Finance US$900m Apr 4 2028 3.95 99.371 T+125 4.027

40 International Financing Review March 31 2018 BONDS SUMMARY DETAILS

,Aû4ROBEûSOLDûITSûlFTHûNON CONFORMINGû Volkswagen Financial Services raised In February, Geely announced it had RMBS issue last September with the A$520m A$466m from the Driver Australia Four bought a stake of almost 10% in Daimler in a La Trobe Financial Capital Markets Trust Trust Auto ABS in May 2017. US$9bn deal for access to the Mercedes-Benz 2017-2. owner’s technology, Reuters reported. GEELY PRINTS MAIDEN ABS EVERBRIGHT SECURITIES LOOKS ASIA-PACIFIC ABS Chinese automaker ZHEJIANG GEELY HOLDING OFFSHORE GROUP has raised Rmb1.98bn (US$314m) FIFTH AUSTRALIAN DRIVER from a debut offering of asset-backed EVERBRIGHT SECURITIES plans to raise up to securities in China. HK$20bn-equivalent (US$2.5bn) through the VOLKSWAGEN FINANCIAL SERVICES has released The maiden ABS issue, backed by car issuance of offshore debt. initial price talk for its A$699m Driver leases, comprises a Rmb1.8bn senior piece The instruments may be commercial Australia Five Trust auto ABS issue. of 0.72 years and a Rmb180m unrated loans, bonds, subordinated debentures or Guidance for the A$661.5m of Class A and subordinated portion of 2.16 years, structured notes, according to a company A$37.5m of Class B notes, with weighted- according to a press release from China lLINGûTOûTHEû3TOCKû%XCHANGEûOFû(ONGû+ONG average lives of 1.78 and 2.82 years, is Merchants Securities, arranger on the issue. The Chinese brokerage is also looking to one-month BBSW plus 95bp area and 150bp The senior tranche was privately placed issue asset-backed securities in the area, respectively. WITHûQUALIlEDûINVESTORSûATûPARûTOûYIELDû mainland’s domestic market. The Class As are rated AAA/AAA Zhejiang Wisdom Leasing, a subsidiary of The total issue size of the ABS issue will (S&P/Fitch) and the Class Bs are rated Zhejiang Geely, is the ABS originator and not be more than 50% of the company’s net A+/AA–. Zhejiang Geely is the guarantor. assets at the end of last year. The board has ANZ and Bank of America Merrill Lynch are The securities will be listed on the cleared both plans, which now await joint lead managers on the trade. Shanghai Stock Exchange. approval from shareholders and regulators.

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+1 area(I), 3 >US$5bn, >90 acs Aaa/AAA/Scope Citi/Nomura/RBC Amers 42%, Eur 35%, Asia 20%, ME 1%, MS+1 area(G) AAA Other 2%. CB 46%, Bks 28%, AM 26%.

MS-18 area 0 >€590m, >30 acs Aaa/AAA Barc/BLB/DZ/HSBC/LBBW/Uni Ger 54%, Fr 19%, Benelux 12%, RoEur 9%, Asia 6%. CB/OI 22%, AM 57%, Tsy 21%. - - - Aaa/AAA/AAA CMZ -

OATi ‘30+high 20s, 4 >€11.5bn, 100 acs Aa2/AA/AA/AAA Barc/BNPP/HSBC/JPM/NatWest UK 37%, Fr 24%, RoEur 18%, RoEZ 13%, OATi ‘30+28 area RoW 8%. Bks 36%, AM 24%, Ins/PF 21%, HF 10%, OI 9 %. 3mE-22 area - - Aa1/-/AAA/Scope BLB/LBBW/NordLB - AAA

- - - Aaa/AAA Danske -

T+150 area, 9 US$2.2bn Baa2/BBB BAML/GS/WFS/USB/Citi - T+135 area 3mL+62.5 area, - US$1.3bn A3/A- BAML/JPM/MS/WFS - 3mL+45 area 3mL+80 area, - US$600m A3/A- BAML/JPM/MS/WFS - 3mL+65 area T+160 area, T+145 - US$2.1bn Baa1/BBB+/BBB BAML/Barc/C/RBC/TD - area T+100 area, 24 US$500m Baa2/A-/BBB BAML/Citi/CS/MUFG - T+100 area T+120 area, 24 US$700m Baa2/A-/BBB BAML/Citi/CS/MUFG - T+120 area T+70 area, 5 US$1.2bn A2/A Citi/CS/JPM - T+60 area T+85 area, 8 US$900m A2/A Citi/CS/JPM - T+80 area T+110/115, 5 US$1.8bn A2/A Citi/CS/JPM - T+100 area T+180-185, 6 US$1.4bn Baa3/BBB-/BBB- Barc/CS/Miz/MUFG - T+170 (the #) T+145 area, 5 US$1.25bn A3/A Miz/TD/WFS - T+130 area T+145 area, 5 US$2.3bn Baa1/BBB+ BAML/BNP/Citi/MUFG/SANT/SG - T+130 area

International Financing Review March 31 2018 41 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 29/3/2018 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Mar 27 2018 CRH America Finance US$600m Apr 4 2048 4.5 99.654 T+155 4.583

Mar 27 2018 George Washington Univ US$795m Sep 15 2048 4.126 100 T+108 4.126 Mar 27 2018 Realty Income US$500m Apr 15 2025 3.875 99.5 T+125 3.957

Mar 27 2018 Sutter Health US$341.635m Aug 15 2028 3.695 100 T+88 3.695 Mar 27 2018 Sutter Health US$341.635m Aug 15 2048 4.091 100 T+103 4.091 Mar 28 2018 Mylan US$750m Apr 15 2028 4.55 99.752 T+180 4.581

Mar 28 2018 Mylan US$750m Apr 15 2048 5.2 99.682 T+220 5.221

EUROS Mar 27 2018 Akelius €500m Oct 5 2078 (Oct 2023) 3.875 99.645 MS+348.8 / - B+399.7 Mar 28 2018 Toyota Finance Australia €500m Apr 6 2023 0.5 99.528 MS+23 / B+75.3 0.596

Mar 29 2018 Euroclear €300m Apr 11 2030 1.5 99.717 MS+40 1.526

Mar 29 2018 Euroclear €400m Apr 11 2048 (Apr 2028) 2.625 100 MS+165.9 -

STERLING Mar 26 2018 Land Securiities £350m Mar 29 2027 (LFM Mar 2.375 99.326 G+97 2.459 2029) NON CORE Mar 23 2018 SAAB SKr600m Mar 27 2020 0.413 100 - - Mar 23 2018 SAAB SKr250m Mar 27 2020 3mSt+75 100.405 - - Mar 23 2018 SAAB SKr400m Mar 27 2023 3mSt+120 100 3mSt+120 - Mar 26 2018 Klovern SKr900m Apr 4 2022 3mSt+400 100 3mSt+400 - Mar 27 2018 Telia NKr750m Apr 9 2030 3.04 - - - Mar 27 2018 Greater Toronto Airports C$500m Jun 1 2037 3.26 99.932 GOC+100 3.265 Authority Mar 27 2018 Daimler Rmb1bn Apr 9 2021 4.8 100 - 4.8 FINANCIALS US DOLLARS Mar 26 2018 Citizens Bank US$500m Mar 29 2023 3.7 99.855 T+110 3.732

Mar 26 2018 Citizens Bank US$250m Mar 29 2023 3mL+95 100 - 3mL+95 EUROS Mar 27 2018 Ibercaja €350m Perpetual (Apr 2023) 7 100 MS+680.9 7

SWISS FRANCS Mar 28 2018 Berner KB SFr150m May 3 2027 0.4 100.177 MS+5 / Eidg+47 0.38 NON CORE Mar 22 2018 SBAB Bank SKr600m incr Mar 29 2021 3mSt+75 101.465 3mSt+27 - (SKr1.8bn) Mar 27 2018 CIBC C$1.5bn Apr 4 2028 (Apr 2023) 3.45 99.968 OTC+140 3.547 Mar 28 2018 Sparbanken Skåne SKr700m Oct 9 2020 3mSt+75 - - - Mar 28 2018 Liberty Financial A$150m Apr 9 2021 5.1 99.821 ASW+300 5.165 HIGH YIELD US DOLLARS Mar 26 2018 GCP Applied Technologies US$350m Apr 15 2026 (Apr 2021) 5.5 100 T+268 5.5 Mar 27 2018 Tronox US$615m Apr 15 2026 (Apr 2021) 6.5 100 T+379 6.5 Mar 27 2018 Boyne USA US$400m May 1 2025 (May 2021) 7.25 100 T+455 7.25

Mar 28 2018 Coty US$550m Apr 15 2026 (Apr 2021) 6.5 100 T+376 6.5

EUROS Mar 28 2018 Coty €550m Apr 15 2023 (Apr 2020) 4 100 B+409 4

Mar 28 2018 Coty €250m Apr 15 2026 (Apr 2021) 4.75 100 B+449 4.75

42 International Financing Review March 31 2018 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

T+175 area, 8 US$1.7bn Baa1/BBB+ BAML/BNP/Citi/MUFG/SANT/SG - T+160 area T+110 area - - A1/A+ Barc/JPM/Loop - T+140 area, 4 US$1.5bn A3/BBB+/BBB+ Barc/BNY/C/Miz/RBC/USB - T+125 (the #) T+95 area - US$900m Aa3/AA-/A+ MS - T+110 area - US$800m Aa3/AA-/A+ MS - T+190 area, 12 US$2bn Baa3/BBB-/BBB- DB/JPM/MS - T+185 area T+230 area, 12 US$1.6bn Baa3/BBB-/BBB- DB/JPM/MS - T+225 area

4% area, - >€850m -/BBB Barc/Danske/DB - 3.95%/4% MS+30/35, 13 >€650m Aa3/AA- BNPP/Citi - MS+25 (+/-2) MS+55/60, - - -/AA-/AA Citi/MUFG - MS+45 (+/-5) 2.875% area, - - -/A/A+ Citi/MUFG - 2.75% (+/-12.5)

G+110/115, - >£725m -/AA/AA Lloyds/NatWest/HSBC/Santan - G+100 (+/-3)

- - - - Danske/SEB - - - - - Danske/SEB - - - - - Danske/SEB - - - - - Danske/Nordea/SEB - - - - Baa1/A- Swed - GOC+103 (+/-3) - - Aa3/A+ BMO/CIBC/RBC -

5% area - A2/A/A- HSBC -

T+115/120, 21 US$900m Baa1/A- Citi/CS/MS/WFS - T+110 (the #) 3mL+equiv - US$300m Baa1/A- Citi/CS/MS/WFS -

Low/Mid 7%s, - >€850m, >130 acs -/B-/B Barc/BBVA/JPM/UBS UK/Ire 51%, Fr 12%, Sp 12%, Switz 9%, It 7.125% area, 7%, Ger/Aus 5%, Asia 2%, Other 2%. AM 7% 48%, HF 39%, Bks/PB 12%, Ins/PF 1%.

MS+5 area - - A1/ZKB AA- BernKB -

- - - A1/A Danske -

OTC+143 (+/-3) - - Baa2/BBB/-/AL CIBC - - - - -/A- Swed - ASW+300 area - - -/BBB- NAB/WBC -

5.5% area - - B1/BB BAML/DB/GS/Citi/PNC/Key - 6.375% area - - B3/B- Citi/BAML/Barc/CS/GS/RBC/WFS - 7.25%/7.5%, - - B2/B WFS - 7.25% High 5% area, - - B2/BB MS/BNPP/JPM/BAML/CA-CIB/DB/ - 6%/6.25%, HSBC/ING/Miz/RBC/Uni 6.5%

3% area, - - B2/BB MS/BNPP/JPM/BAML/CA-CIB/DB/ - 4% area, HSBC/ING/Miz/RBC/Uni 4% 4% area, - - B2/BB MS/BNPP/JPM/BAML/CA-CIB/DB/ - 4.5% area, HSBC/ING/Miz/RBC/Uni 4.75%

International Financing Review March 31 2018 43 Trusted answers for trusted advisors.

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© 2015 Thomson Reuters S027976/12-15 EMERGING MARKETS China  Hong Kong  South Africa  Turkey  Colombia  Guatemala  Mexico  Panama û Peru  Uruguay 

„ FRONT STORY RUSSIA STLC kept waiting for revived trade State-owned company plans market return after February failure

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International Financing Review March 31 2018 45 ASIA-PACIFIC Issuers rush to beat NDRC clock CHINA „ CHINA Higher premiums not always enough to use up Chinese quotas in time Chinese issuers rushed to sell bonds last week HOLDINGS, commodities trader DONGLING GROUP, POLY COMPLETES THREE-YEAR PRINT ahead of the expiry of their offshore debt hotel-and-property developer SI CHUAN PROVINCE issuance quotas at the end of the quarter, but JUYANG GROUP, and local government financial (ONGû+ONG LISTEDûPOLY PROPERTY GROUP last met with mixed results. vehicles JIANGSU NEWHEADLINE DEVELOPMENT 4UESDAYûPRICEDû53MûOFûTHREE YEARû53û Two borrowers managed to complete offerings GROUP and SHANDONG HI-TECH INNOVATION DOLLARûSENIORûUNSECUREDûBONDSûINûAûRECENTLYû ahead of the deadline, but more were unable to CONSTRUCTION INVESTMENT GROUP were unable to UNFAVOURABLEûMARKET launch deals given the weak market. They will launch deals ahead of the deadline due to the 4HEû2EGû3ûUNRATEDûBONDSûWEREûPRICEDûATû forfeit their quotas unless they secure extensions unfavourable market, according to bankers. PARûTOûYIELDû ûSLIGHTLYûTIGHTERûTHANûINITIALû from the authorities. All had conducted roadshows earlier this GUIDANCEûOFûûAREA ûONûTHEûBACKûOFûITSû Last Monday, coal-and-property company year and some tried to invite more banks STATE OWNEDûBACKGROUND ZHENGZHOU ZHONGRUI INDUSTRIAL GROUP raised as bookrunners to increase their chances of 7HOLLYûOWNEDû"6)ûSUBSIDIARYû%ASEû4RADEû US$85m from a maiden US dollar bond sale, attracting sufficient demand, but were beaten by 'LOBALûISûTHEûISSUERûOFûTHEûBONDSûANDû0OLYû while pharmaceutical wholesaler and distributor the clock. 0ROPERTYû'ROUPûISûTHEûGUARANTORû4HEûNOTESû TAIZHOU HUAXIN PHARMACEUTICAL INVESTMENT “The market has been very weak recently. ALSOûHAVEûTHEûBENElTûOFûAûKEEPWELLûDEEDû tapped existing notes for an extra US$56m. High-yield names found it very hard to draw FROMûULTIMATEûSTATE OWNEDûPARENTû#HINAû Both failed to garner sufficient orders to enough interest to proceed with their issuance 0OLYû'ROUPû#ORP achieve larger deal sizes and thus were not able plans, especially those industrial names and h4HEûKEEPWELLûDEEDûFROMûITSûSTATE OWNEDû to use up their entire quotas from the National first-time issuers,” said one of the bankers, PARENTûGIVESûINVESTORSûSOMEûCOMFORT ûBUTû Development and Reform Commission, which who had deals in the pipeline that could not be THEûISSUERûALSOûGAVEûQUITEûAûGENEROUSû expired at the end of March. launched ahead of the deadline. PREMIUMûDUEûTOûTHEûWEAKûMARKETû Chinese issuers must register with the NDRC The volatility in Treasury yields, prospects SENTIMENT vûSAIDûAûBANKERûONûTHEûDEAL to issue offshore bonds with tenors of a year or of a faster pace of interest rate rises in the US, 3ISTERûCOMPANYû0OLYû2EALû%STATEû'ROUPSû more and successful applicants are assigned a and escalating trade war headlines, added to 53MûOFûûSûPRICEDûINûLATEû time-limited quota. recent heavy Asian bond supply and the non- *ANUARYûWEREûCOMPARABLESû4HEûNOTES ûRATEDû The unused quota for Taizhou Huaxin was said performances of new issues, all dented market "AA"""n""" ûWEREûTRADINGûATûAûûYIELDû to be “negligible”, whereas Zhengzhou Zhongrui sentiment. AHEADûOFûTHEûRELEASEûOFû0OLYû0ROPERTYSûINITIALû left more of its entitlement on the table, bankers GUIDANCE on the deals said without giving exact numbers. YIELD SPIKE !Sû0OLYû2EALû%STATEûISûAûBIGGERûENTITYûINû Meanwhile, property developer RONSHINE CHINA The average yield for three-year Asia high-yield TERMSûOFûBUSINESSûSCALEûANDûANNUALû HOLDINGS last Tuesday tried to tap its US$425m dollar bonds has spiked by about 72bp this year REVENUES ûANDûITSûNOTESûAREûRATED ûBANKERSû 8.25% US dollar senior notes issue due February to about 7.5%, the highest since March 2016, PUTûAûPREMIUMûOFûSLIGHTLYûLESSûTHANûBPûATû 2021 to use up its remaining quota. But it had to according to Thomson Reuters data. AROUNDûûASûFAIRûVALUE cancel the plan after some anchor orders were Even when issuers agreed to pay a higher 0OLYû0ROPERTYSûNEWûNOTESûTHEREFOREûPAYûAû suddenly withdrawn during bookbuilding, said a yields and larger premiums to compensate, this BPnBPûPREMIUMûOVERûFAIRûVALUE û banker on the planned reopening. gave no guarantee that a deal could go ahead ACCORDINGûTOûTHEûBANKER Ronshine was left with US$125m out of its as investors just did not look at some issuers, the 3TILL ûTHEûNEWLYûPRICEDûNOTESûWEREûNOTû US$550m quota. The banker said the company banker said. TRADINGûWELLûINûTHEûSECONDARYûMARKET ûBEINGû was likely to apply for a new quota rather than an “Investors are more and more cautious and QUOTEDûATûûLASTû7EDNESDAY extension of the original one. are cutting back on their purchases. I know an 0OLYû0ROPERTYûISûTHEûSOLEûOFFSHOREûLISTEDû investor that hasn’t made any investment in new PROPERTYûmAGSHIPûOFû#HINAû0OLYû'ROUP UNUSED QUOTAS issues in the past two months and will just wait 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEû Last week’s unlucky issuers were not alone. Others and see until the market stabilises and there is a OFFSHOREûDEBT such as steelmaker SHANDONG IRON & STEEL GROUP clear trend,” she said. &INALûSTATISTICSûONûTHEûISSUEûWEREûNOTû and conglomerate GANGTAI GROUP were also Issuers are also waiting for better windows to AVAILABLEûATûTHEûTIMEûOFûWRITING ûTHOUGHû unable to use up their entire NDRC quotas before see if volatility will ease. ORDERSûWEREûSAIDûTOûBEûINûEXCESSûOFû53M û the March 31 deadline after fundraising earlier in “We knew some issuers wanted to apply for INCLUDINGûINTERESTûFROMûLEADS ûWHENûlNALû the month, the bankers said. extensions for the end-March quotas, but it was GUIDANCEûWASûANNOUNCED Meanwhile, steelmakers INNER MONGOLIA really case-by-case,” another banker said. BOC InternationalûWASûLEFT LEADûGLOBALû BAOTOU STEEL UNION and GUANGYANG ANTAI Carol Chan COORDINATORûANDûDBS BankûWASûJOINTûGLOBALû COORDINATORû4HEûPAIRûWEREûALSOûJOINTûLEADû MANAGERSûANDûJOINTûBOOKRUNNERSûWITHûChina ICBC ASIA PRIVATELY PLACES AT1S OVERûlVE YEARû4REASURIESûIFûTHEûNOTESûAREûNOTû Citic Bank International ûWing Lung Bank ûGuotai CALLED ûWITHûAûRESETûEVERYûSUBSEQUENTûlVEû Junan International ûChina Chengtong ûICBC ICBC ASIAûPRIVATELYûPLACEDû53BNûOFû YEARS (Asia) and Haitong Internationalû"ANKûOFû%ASTû SUBORDINATEDû!DDITIONALû4IERûû 30ûESTIMATEDûTHEûISSUEûWOULDûRAISEûTHEû !SIAûWASûCO MANAGER PERPETUALûSECURITIESûATûPARûONû-ARCHûûTOû BANKSûRISK ADJUSTEDûCAPITALûRATIOûBYûABOUTû 5"3 ûPREVIOUSLYûONûTHEûLISTûOFû YIELDû TWOûPERCENTAGEûPOINTSû)TûSAIDûTHEû2!#ûRATIOû BOOKRUNNERS ûWASûNOTûONûITûWHENûTHEûISSUEû 4HEûSECURITIESûAREûCALLABLEûAFTERûlVEûYEARSû WASûLIKELYûTOûSTAYûATûnûFORûTHEûNEXTû WASûPRICED 4HEûCOUPONûWILLûRESETûTOûTHEûINITIALûSPREADû TWOûYEARS

46 International Financing Review March 31 2018 EMERGING MARKETS ASIA-PACIFIC

JIANGXI COPPER LOOKS OFFSHORE BYûTHEû3HANGHAI LISTEDûPARENTûANDû#HINAû 4HEûNOTESûHAVEûANûEXPECTEDû"ûRATINGû 'RANDû!UTOMOTIVEû3ERVICESû(ONGû+ONG û FROMû-OODYS $UAL listedJIANGXI COPPER û#HINASûLARGESTû 4HEûNOTESûAREûUNRATED 0ROCEEDSûWILLûBEûUSEDûFORûTHEûGROUPSû COPPERûPRODUCER ûSAIDûITûPLANNEDûTOûISSUEû53û CICC and Morgan StanleyûWEREûJOINTûGLOBALû SUPPLYûCHAINûBUSINESS ûRElNANCING ûWORKINGû DOLLARûBONDSûTOûRAISEûBETWEENû53MûANDû COORDINATORSûANDûBOOKRUNNERS CAPITALûANDûOTHERûGENERALûCORPORATEû 53BN 4HEû#HINESEûAUTOûDEALERûWILLûUSEûTHEû PURPOSES 4HEûISSUERûOFûTHEûPROPOSEDûBONDSûWILLûBEû PROCEEDSûFORûDEBTûREPAYMENTûANDûGENERALû !FTERûTHEûMAIDENûDOLLARûTRADE û::)'ûSTILLû EITHERûTHEûCOMPANYûITSELFûORûAûSPECIAL CORPORATEûPURPOSES HASûANûAVAILABLEûOFFSHOREûDEBT ISSUANCEû PURPOSEûVEHICLEûESTABLISHEDûINû(ONGû+ONG QUOTA ûBUTûITûWILLûEXPIREûATûTHEûENDûOFûTHISû *IANGXIû#OPPER ûLISTEDûINû(ONGû+ONGûANDû ZZIG SELLS TWO-YEAR AT 9.50% MONTH ûACCORDINGûTOûANOTHERûBANKER 3HANGHAI ûWILLûSEEKûAPPROVALûFORûTHEûPLANû FROMûSHAREHOLDERSûATûTHEIRûANNUALûMEETING ZHENGZHOU ZHONGRUI INDUSTRIAL GROUP ûRATEDû"û S&P UPGRADES COGARD AND AGILE -OODYS ûHASûPRICEDû53MûOFû53ûDOLLARû GOLDWIND WORKS ON PERP ISSUE SENIORûUNSECUREDûNOTESûATûPARûTOûYIELDû 30ûHASûUPGRADEDûBYûONEûNOTCHûTHEûLONG &INALûPRICINGûWASûTHEûSAMEûASûREVISEDûlNALû TERMûCORPORATEûCREDITûRATINGSûOFû#HINESEû #HINESEûWIND TURBINEûMAKERûXINJIANG GUIDANCE ûBUTûTIGHTERûTHANûPREVIOUSû PROPERTYûDEVELOPERSûCOUNTRY GARDEN HOLDINGS GOLDWIND SCIENCE & TECHNOLOGYûPLANSûTOûISSUEû GUIDANCEûOFû and AGILE GROUP HOLDINGS ûCITINGûIMPROVEDû PERPETUALûNOTESûINûTHEûOFFSHOREûMARKETûTOû 4HEûBUYERSûWEREûANCHORûINVESTORS û MARGINS RAISEûUPûTOû53M ACCORDINGûTOûAûBANKERûINVOLVEDûINûTHEûTRADEû #O'ARDSûRATINGûHASûBEENûRAISEDûTOû"" ûINû 7HOLLYûOWNEDûSUBSIDIARYû'OLDWINDû.EWû EARLYûON LIGHTûOFûITSûhSIGNIlCANTLYûENHANCEDvûSCALEû %NERGYû(+ û)NVESTMENTûWILLûBEûTHEûISSUER û ::)'ûlRSTûANNOUNCEDûAûûYIELDûINû ANDûMARKETûPOSITIONû4HEûLONG TERMûISSUEû ANDûTHEûPARENT ûLISTEDûINû(ONGû+ONGûANDû ANûATTEMPTûTOûDRAWûNON ANCHORûINVESTORS û RATINGûONûTHEûCOMPANYSûOUTSTANDINGûSENIORû 3HENZHEN ûWILLûBEûGUARANTOR BUTûITûFAILED ûANDûSOMEûBOOKRUNNERSûALSOû UNSECUREDûNOTEûHASûALSOûBEENûRAISEDûBYûONEû 4HEûPROPOSEDûSECURITIESûWILLûBEûEITHERû DROPPEDûOUTûOFûTHEûDEAL ûTHEûBANKERûSAIDû)Tû NOTCHûTOû"" PERPETUALûNON CALLûTHREESûORûNON CALLûlVESû LATERûREVISEDûTHEûGUIDANCEûANDûSTUCKûTOûTHEû h-ARKEDLYûIMPROVEDvûMARGINSûANDûFASTû /THERûTERMSûALSOûHAVEûYETûTOûBEûlNALISED ûYIELDûLEVELûAGREEDûWITHûANCHORû REVENUEûGROWTHûAREûEXPECTEDûTOûOFFSETûTHEû 0ROCEEDSûWILLûBEûUSEDûFORûDEBTûREPAYMENT û INVESTORS IMPACTûOFûTHEûCOMPANYSûEXPANSIONû#O'ARDû PROJECTûINVESTMENTûANDûGENERALûOPERATIONALû DBS Bank and AMTDûWEREûJOINTûGLOBALû ISûALSOûEXPECTEDûTOûCONTINUEûTOûDELEVERAGEû CAPITAL COORDINATORSûONûTHEûISSUE ûASûWELLûASûJOINTû THISûYEAR BOOKRUNNERSûANDûJOINTûLEADûMANAGERSûWITHû 30ûSAIDû#O'ARDûWASûNOWûAMONGûTHEûTOPû SHOUGANG DRAWS HOT DEMAND BOC International ûFirst Capital Securities and THREEûPROPERTYûDEVELOPERSûINû#HINA ûHAVINGû Haitong International SOLIDIlEDûITSûMARKETûLEADERSHIP ûESPECIALLYûINû SHOUGANG GROUP ûRATEDû!n!û&ITCH$AGONG û "ANKûOFû#HINA û#,3! û'UOTAIû*UNANû LOWER TIERûCITIES SOLDû53MûOFûSHORT TERMû53ûDOLLARû )NTERNATIONAL û64"û#APITALûANDû:HONGTAIû #ONTRACTEDûSALESûSOAREDûBYûûINû û BONDS ûWELLûINSIDEûINITIALûPRICEûGUIDANCE ûFORû )NTERNATIONALûAPPEAREDûONûTHEûBOOKRUNNERû ANDûTHEûMOMENTUMûWILLûEXTENDûTOûTHISûYEARû AûSIZEABLEûISSUEûASûINVESTORSûFAVOUREDûTHEû LISTûATûTHEûTIMEûTHEûûGUIDANCEûWASû WITHûSALEABLEûRESOURCESûESTIMATEDûTOûBEûOVERû SHORTûENDûOFûTHEûCURVEûAMIDûAûVOLATILEûRATESû ANNOUNCED ûBUTûDROPPEDûOUTûATûTHEûTIMEûTHEû 2MBTRNû53BN  MARKET REVISIONûWASûUNVEILED 4HEûCOMPANYûISûEXPECTEDûTOûMAINTAINû 4HEû DAYû2EGû3ûUNRATEDûSENIORû ::)'ûISûAûPRIVATELYûOWNEDûENTERPRISEûWITHû ITSûIMPROVEDûPROlTABILITYûOVERûTHEûNEXTû UNSECUREDûNOTESûWEREûSOLDûATûPARûTOûYIELDû COALûSOLUTIONûANDûPROPERTYûDEVELOPMENTûASû TWOûYEARS ûWITHûANû%BITDAûMARGINûOFû  ûTIGHTERûTHANû)0'ûOFûn ITSûMAJORûBUSINESSES n &INALûORDERSûWEREûINûEXCESSûOFû53BNû 4HEû2EGû3ûNOTESûWILLûBEûISSUEDûINûTHEûNAMEû -EANWHILE û!GILESûLONG TERMûCORPORATEû FROMûûACCOUNTSû4HEûSTRONGûDEMANDûEVENû OFûWHOLLYûOWNEDûUNITû:HONGRUIû)NDUSTRIALû CREDITûRATINGûHASûBEENûRAISEDûTOû""ûONû ALLOWEDûTHEû#HINESEûSTEELMAKERûTOûOFFERûTHEû 'ROUP ûWITHû::)'ûASûPARENTûGUARANTORûANDû EXPECTATIONSûTHATûITûWILLûCONTINUEûIMPROVINGû BONDSûBPûINSIDEûTHEûTIGHTûENDûOFû)0' #HINAû#OALû3OLUTIONûANDû(ECHANGû2EALû ITSûLEVERAGEûFROMûAûSIGNIlCANTûMARGINû 3INGAPOREûTOOKûûOFûTHEûNOTES û(ONGû %STATEû'ROUPûASûSUBSIDIARYûGUARANTORS EXPANSION +ONGûANDû#HINAûGOTû ûANDûOTHERSû RECEIVEDûû)NûTERMSûOFûINVESTORûTYPES ûû ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS WEREûPRIVATEûBANKSûANDûOTHERS ûûWEREû BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE BANKS ûANDûûWEREûFUNDSûANDûINSURERS Asia-Pacific Managing No of Total Share 0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû Managing No of Total Share bank or group issues US$(m) (%) GENERALûCORPORATEûPURPOSES bank or group issues US$(m) (%) 1 Citigroup 77 19,054.11 10.6 DBSûWASûSOLEûGLOBALûCOORDINATOR ûASûWELLûASû 1 HSBC 58 6,123.47 7.3 2 HSBC 84 13,273.34 7.4 JOINTûLEADûMANAGERûANDûJOINTûBOOKRUNNERû 2 Bank of China 44 4,590.62 5.5 3 JP Morgan 43 11,760.12 6.5 with Bank of China and BNP Paribas 3 Standard Chartered 43 4,546.13 5.4 4 Standard Chartered 65 10,405.89 5.8 4 Citigroup 33 4,203.08 5.0 5 BNP Paribas 47 8,275.76 4.6 CHINA GRAND AUTO GOES SHORT 5 BNP Paribas 30 3,449.71 4.1 6 BAML 38 7,763.62 4.3 6 Credit Suisse 21 2,977.07 3.6 7 Deutsche Bank 32 6,529.42 3.6 CHINA GRAND AUTOMOTIVE SERVICES ûRATEDû"""nû 7 Citic 26 2,953.33 3.5 8 Credit Suisse 33 5,900.10 3.3 -OODYS&ITCH ûONû4UESDAYûSOLDû53Mû 8 BAML 19 2,660.10 3.2 9 VTB Capital 13 5,034.64 2.8 OFû DAYûNOTESûATû ûTIGHTERûTHANû 9 UBS 23 2,465.98 3.0 10 Barclays 27 4,861.29 2.7 INITIALûPRICEûGUIDANCEûOFûûAREA 10 Morgan Stanley 20 2,385.62 2.9 Total 281 180,564.33 7HOLLYûOWNEDûSUBSIDIARYû"AOXINû!UTOû Total 174 83,528.28 Excluding equity-related debt. &INANCEû)ûISûTHEûISSUERûOFûTHEû2EGû3ûNOTES û Excluding equity-related debt. WHICHûAREûJOINTLYûANDûSEVERALLYûGUARANTEEDû Source: Thomson Reuters SDC code: L4 Source: Thomson Reuters SDC code: L1

International Financing Review March 31 2018 47 4HEûLONG TERMûISSUEûRATINGûONû!GILESû COVERûITSûSHORT TERMûDEBT ûWHICHûINCLUDEDû )NTERNATIONALû'ROUPûINû-ARCHûPRICEDûDEALSûINû OUTSTANDINGûSENIORûUNSECUREDûNOTESûHASûALSOû 53MûOFûONE YEARûNOTES THEû53 ûATTRACTINGûORDERSûOFû53BNûANDû BEENûUPGRADEDûTOû""ûFROMû""n ,OGANûRECENTLYûRELEASEDûlNANCIALûRESULTSû 53BN ûRESPECTIVELY 30ûSAIDû!GILESûSTRONGûMARGINûANDûFASTû FORû ûWHICHûSAWûCONTRACTEDûSALESûRISINGû h7EûSAWûAûCHOPPYûMARKETûINûTHEû53ûANDû REVENUEûGROWTHûWEREûEXPECTEDûTOûOFFSETûTHEû ûYEARûONûYEARûTOû2MBBNû53BN  YOUûSAWûPREMIUMSûOFûOVERûBP ûBUTûINûAû IMPACTûOFûRISINGûCAPITALûSPENDING CHOPPYûMARKETûSOMETIMESûYOUûGETûAû !GILESûTOTALûADJUSTEDûDEBTûCOULDûGROWûBYû AIA EXTENDS DURATION WITH MOMENTûOFûCALM vûSAIDûTHEûSOURCEûh-ARKETSû ASûMUCHûASûûINûûDUEûTOûTHEû US SUPPORT BECAMEûCONSTRUCTIVEûONû4UESDAYû)NVESTORSû COMPANYSûINCREASINGûLANDûACQUISITIONSûINû INûTHEû53ûALSOûSTILLûHAVEûMONEYv NEWûCITIESûANDûSIZEABLEûCAPITALûSPENDINGûFORû AIA GROUP ûRATEDû!!!!n ûTOOKûADVANTAGEûOFû #REDITûSPREADSûANDû4REASURIESûTIGHTENEDû NON PROPERTYûSEGMENTS 53ûLIQUIDITYûLASTûWEEKûTOûLOCKûINûLONG TERMû DURINGûTHEû.EWû9ORKûSESSION ûGIVINGû!)!ûTHEû 4HEûCOMPANYûPLANSûTOûESTABLISHûITSû FUNDING ûWHILEûITSûHOMEûBASEûINû!SIAûWASû ABILITYûTOûPRICEûTHEûISSUEûATûûTOûYIELDû PRESENCEûINûûCITYûCLUSTERSûINû#HINAûBYûû EFFECTIVELYûSHUTûFORûISSUERSûSEEKINGûDURATION û4HEûCOUPONûISû ANDûINVESTûABOUTû2MBBNûEACHûYEARûINûNON 4HEû(ONGû+ONG LISTEDûINSURER ûWHICHû h7EREûNOTûBACKûTOûANûISSUERSûMARKET ûBUTû PROPERTYûSEGMENTS ûSUCHûASûWATER SUPPLYû RECEIVESûHALFûOFûITSûNEWûBUSINESSûFROMû#HINAû WEûFOUNDûAûFAIRûPRICEûFORûINVESTORSûANDûTHEû CONSTRUCTIONûANDûENVIRONMENTALûBUSINESSES ANDû(ONGû+ONG ûBUTûALSOûHASûOPERATIONSûINû ISSUER vûSAIDûTHEûSOURCE 4HAILAND û3INGAPOREûANDû-ALAYSIA ûONû 4HEûNEW ISSUEûCONCESSIONûWASûSPOTTEDûASû 4UESDAYûPRICEDûAû53Mû YEARûBONDû TIGHTûASûBPûTOûHIGHûSINGLEûDIGITS ûWHICHû HONG KONG ISSUEûATû4REASURIESûPLUSûBP WASûSMALLERûTHANûTHEûBPnBPûSEENûONû /RDERSûPEAKEDûATû53BN ûGIVINGû!)!û RECENTû YEARûDEALSûPRICEDûINû!SIAû&AIRûVALUEû LOGAN PLANS SINGAPORE DEBUT THEûMOMENTUMûTOûTIGHTENûFROMûINITIALûPRICEû FORûAûNEWû YEARû!)!ûWASûPLACEDûATû' PLUSû THOUGHTSûOFû4REASURIESûPLUSûBPnBPû BP ûBASEDûONûCURVEûEXTENSIONûOFûTHEûû (ONGû+ONG LISTEDûLOGAN PROPERTY HOLDINGS ANDûINITIALûGUIDANCEûOFûPLUSûBPûAREAû)04Sû S METûlXED INCOMEûINVESTORSûINû3INGAPOREûLASTû WEREûANNOUNCEDûEARLYûINûTHEû53ûTRADINGû 0RUDENTIALûPAIDûAûNEW ISSUEûCONCESSIONûOFû WEEKûTOûEXPLOREûAûPOTENTIALûOFFERINGûOFû SESSION ûRATHERûTHANûINû!SIANûHOURS ABOUTûBPûONûITSû53MûOFûûS û 3INGAPOREûDOLLARûBONDS 4HEûISSUEûCAMEûASûBANKERSûSTRUGGLEDûTOû WHILEû!)'Sû53Mûû YEARûYIELDEDû )FûTHEûISSUEûMATERIALISES ûITûWILLûMARKûTHEû SELLû YEARûNOTESûINû!SIAûBECAUSEûOFûRATEûRISEû ABOUTûBPûEXTRA ûACCORDINGûTOû)&2ûDATA #HINESEûREAL ESTATEûCOMPANYSûDEBUTûPRINTû CONCERNSûANDûVOLATILEûlNANCIALûMARKETS 4HEûlNALû!)!ûSIZEûWASûLARGERûTHANûTHEû INû3INGAPOREûDBS ûOCBC and Standard %VENû!)!ûWASûNOTûIMMUNE ûWITHûAûSOURCEû MINIMUMû53MûITûHADûINûMINDû4HEû CharteredûARRANGEDûTHEûTWO DAYûMEETINGSû CLOSEûTOûTHEûDEALûSAYINGûTHATû2EGû3ûDEMANDû INSURERûWASûALSOûLOOKINGûATûAû YEAR ûBUTûDIDû LASTû4UESDAYûANDû7EDNESDAY HADûSHORTENEDûTOûTHREE YEARûANDûlVE YEARû NOTûPROCEEDûWITHûTHATûTENOR ûALTHOUGHû0RUû ,OGAN ûRATEDû"A""n""n ûSOLDûAû53Mû CREDITSûINûTHEûPASTûSIXûTOûEIGHTûWEEKS û ANDû!)'ûPRICEDû YEARûDEALSû!LLOCATIONû THREE YEARûNON CALLûTWOûBONDûATûEND LEADINGûTHEûISSUERûTOûUSEûTHEû!ûFORMATûTOû STATISTICSûWEREûNOTûRELEASED &EBRUARY ûPAYINGû REACHû53ûBUYERS 4HEûBONDSûTIGHTENEDûINûTHEûAFTERMARKETû ,UCRORû!NALYTICSûRECENTLYûREPORTEDûTHATû $EMANDûFORûINSURANCEûPAPERûALSOûHELPED û ONû7EDNESDAYûTOûBPBPûOVERû THEûPROPERTYûCOMPANYûHADûSUFlCIENTûCASHûTOû AFTERû0RUDENTIALû&INANCIALûANDû!MERICANû 4REASURIES

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 29/3/2018 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) Mar 25 2018 Luso International Banking US$93.2m incr Dec 28 2027 5.375 99.878 - 5.4 (US$343.2m) Mar 26 2018 Taizhou Huaxin US$56m incr Mar 15 2021 6.8 100 - 6.8 Pharmaceutical (US$206m) Mar 26 2018 Zhongrui Industrial Group US$85m Mar 29 2020 9.5 100 - 9.5

Mar 26 2018 Agile Group Holdings US$100m - 6.875 99.25 T+421.6 - Mar 26 2018 CAR Inc Rmb400m Apr 4 2021 (Apr 4 2020) 6.5 98.8 - 6.95

Mar 27 2018 AIA Group US$500m Apr 6 2028 3.9 99.688 T+115 3.938

Mar 27 2018 Baoxin Auto (China Grand US$300m Apr 2 2019 6.625 100 - 6.625 Auto) Mar 27 2018 Poly Property Group US$350m Apr 10 2021 5.2 100 - 5.2

Mar 27 2018 InRetail US$350m Apr 3 2028 5.75 100 - 5.75

Mar 28 2018 Shougang Group US$500m Apr 4 2019 3.95 100 - 3.95

Mar 28 2018 Bahrain sukuk US$1bn Oct 5 2025 6.875 100 T+419.5 6.875

Mar 28 2018 Vrio Corp US$650m Oct 4 2023 6.25 100 - 6.25

Mar 28 2018 Vrio Corp US$350m Oct 4 2028 6.875 99.112 - 7

48 International Financing Review March 31 2018 EMERGING MARKETS EUROPE/AFRICA

#REDIT3IGHTSûSAIDûITûPREFERREDû!)!ûOVERû -OODYSûCHANGEDûITSûOUTLOOKûONû3OUTHû 0RUDENTIALûGIVENûTHATûTHEûLATTERûCONTINUEDûTOû !FRICAûTOûSTABLEûFROMûNEGATIVEûONû-ARCHû û SUFFERûFROMûAûWEAKûQUALITYûOFûCAPITAL EUROPE/AFRICA BASEDûONûITSûVIEWûTHATûAûPREVIOUSûWEAKENINGû ,ASTûMONTH û!)!û'ROUPûPOSTEDûAûûRISEû OFû3OUTHû!FRICASûINSTITUTIONSûWILLûGRADUALLYû INûNEWûBUSINESSûINûTHEûLATESTûlSCALûYEAR û REVERSEûUNDERûAûMOREûTRANSPARENTûANDû MEETINGûFORECASTS BELARUS PREDICTABLEûPOLICYûFRAMEWORKû)TûMAINTAINSûAû &ITCHûUPGRADEDûTHEûINSURERSûLONG TERMûISSUERû "AAûRATING DEFAULTûRATINGûTOû!!nûFROMû! ûLASTû.OVEMBER û BELARUS DEVELOPMENT BANK EYES 30 ûWHICHûRATESû3OUTHû!FRICAûATû"" ûALSOû CITINGûAûhVERYûSTRONGvûMARKETûFRANCHISEûANDû LOCAL CURRENCY EUROBONDS REVISEDûITSû'$0ûFORECASTSûFORûTHEûCOUNTRYû lNANCIALûPERFORMANCE ûCONSERVATIVEû UPWARDS ûANDûURGEDûTHEûCOUNTRYûTOûCONTINUEû INVESTMENTûMIXûANDûVERYûSTRONGûCAPITALISATION BELARUS DEVELOPMENT BANKûMIGHTûRAISEûUPûTOû WITHûREFORMSû&ITCHûRATESû3OUTHû!FRICAû""  !)!ûAGREEDûTOûBUYûTHEûINSURANCEûUNITûOFû 53MûINû"ELARUSûRUBLE DENOMINATEDû 4SHEPISOû-OAHLOLI ûTHEûCHIEFûDIRECTORûOFû #OMMONWEALTHû"ANKûOFû!USTRALIAûLASTû %UROBONDSûINû ûTHEûHEADûOFûTHEûBANKû LIABILITYûMANAGEMENTûATûTHEû4REASURY ûTOLDû 3EPTEMBERûFORû53BNû4HISûRANKEDûASûTHEû SAIDûONû4HURSDAY REPORTERSûITûCOULDûPOTENTIALLYûISSUEûINû BIGGESTû!SIANûBUYOUTûOFûANû!USTRALIANû 4HEûISSUERûISûRATEDû"ûBYû30ûANDû&ITCH CURRENCIESûOTHERûTHANûDOLLARSûANDûPRINTûINû lNANCIALûlRMûMorgan Stanley ûBNP Paribas -EANWHILE ûTHEûBELARUSûSOVEREIGNûPLANSûTOû CHUNKSûIFûNECESSARYûRATHERûTHANûSELLINGû and BarclaysûWEREûBOOKRUNNERS ISSUEûBONDSûINû#HINAûWORTHû53M ûTHEû 53BNûALLûATûONCE lNANCEûMINISTRYûSAIDûONû7EDNESDAY 4HEûSOVEREIGNûRAISEDû53BNûLASTûYEARûINû ITSûlRSTûTRANSACTIONûSINCEûBEINGûDOWNGRADEDû INDIA TOûJUNKûSTATUSûBYû30ûANDû&ITCH SOUTH AFRICA -EANWHILE û-OODYSûHASûDOWNGRADEDû MIAL HIRES FOR DOLLAR TRADE STATE OWNEDûUTILITYûESKOMSûLONG TERMû AFRICAN SOVEREIGN ISSUES RFP CORPORATEûFAMILYûRATINGûTOû"ûFROMû" MUMBAI INTERNATIONAL AIRPORTû-)!, ûHASû FOR EUROBOND h4HEûRATINGûACTIONûREmECTSûTHEûFACTûTHAT û APPOINTEDûCitigroup ûHSBC ûDeutsche Bank ûJP DESPITEûAûNUMBERûOFûIMPROVEMENTSûATûTHEû Morgan and Standard CharteredûASûGLOBALû SOUTH AFRICAûHASûSENTûAûREQUESTûFORûPROPOSALSû COMPANYûINûRELATIONûTOûITSûCORPORATEû COORDINATORSûFORûAûPOTENTIALû53ûDOLLARûBONDû TOûBANKSûFORûAû%UROBONDûISSUANCE ûACCORDINGû GOVERNANCEûANDûLIQUIDITY ûTHEREûISûLIMITEDû OFFERING ûACCORDINGûTOûMARKETûSOURCES TOûTHEûCOUNTRYSû.ATIONALû4REASURY VISIBILITYûATûTHISûJUNCTUREûASûTOû%SKOMSûPLANSû &ORûITSûMAIDENûISSUE û-)!,ûISûLOOKINGûTOû 4HEû4REASURYûSAIDûITûCOULDûNOTûELABORATEû FORûPLACINGûITSûLONGERûTERMûBUSINESSûANDû ADOPTûTHEû2EGû3!ûFORMAT ONûTHEûDETAILSûOFûTHEûPROCESSûASûITûISûSTILLûATûANû lNANCIALûPOSITIONûONûAûSUSTAINABLEûFOOTING vû !ûCONSORTIUM ûLEDûBYû)NDIANûCONGLOMERATEû EARLYûSTAGE SAIDûTHEûAGENCYûABOUTûITSûDECISION '6+ ûCONTROLSûûOFû-)!, ûWHILEû!IRPORTSû 3OUTHû!FRICAûPLANSûTOûUSEûOPTIMISMû h!DDITIONALLY ûTHEûRATINGûFACTORSûTHEûLACKû !UTHORITYûOFû)NDIAûOWNSûTHEûREST AROUNDûTHEûPOLITICALûCHANGESûINûTHEûCOUNTRYû OFûANYûTANGIBLEûlNANCIALûSUPPORTûFORûTHEû -)!,ûANDûTHEûBANKSûHAVEûYETûTOûMAKEûANû TOûTAPûINTERNATIONALûBONDûMARKETSûFORûUPûTOû COMPANYûINûTHEû&EBRUARYû3TATEû"UDGET ûANDû OFlCIALûANNOUNCEMENTûONûTHEûPLANNEDû 53BN ûONEûOFûTHEûCOUNTRYSûTOPû4REASURYû THEûLIQUIDITYûANDûFUNDINGûCHALLENGESû%SKOMû DOLLARûBONDûSALE OFlCIALSûSAIDûEARLIERûINû-ARCH MAYûCONTINUEûTOûFACEv

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution 5.40% - - Unrated CMBI -

100 (the #) - - -/-/BB+ BNPP/SPDBI/Guotai Junan/ - Everbright HK/ CSI/Central Wealth 10.125% (the #), - - B3 DBS/AMTD/BOCI/Haitong/First - 9.5% Capital Securities 99.25 (the #) - - B1 UBS/Orient - 6.95%/7%, - - -/BB CICC/StCh - 6.95% "T+125/130, 2 US$1.2bn A2/A Barc/BNP/MS - T+120 area" 6.875% area, - - - CICC/MS - 6.625% 5.3% area, - - - BOCI/DBS/China Citic/Wing Lung/ - 5.2% Guotai Junan/Chengtong/ICBCA/ Haitong Low 6% area, - - Ba2/BB/BB+ Citi/CS/JPM - 5.875% area, 5.75% 4%/4.1% - US$1.4bn - DBS/BOC/BNPP SG 48%, HK/China 47%, Other 5%. PB/ Other 63%, Bank 20%, Fund/Ins 17%. 7% area, 75 US$2.1bn -/B+/BB- BNPP/Citi/GIB/NBBah/StCh ME 59%, Eur 16%, UK 14%, US 9%, 6.875% APAC 2%. Bks/PB 63%, FM 33%, Ins/PF 3%, Other 1%. Mid 6%s, - US$550m Ba2/BB/BB+ Citi/GS/JPM/MS - 6.25% High 6%/7%, - US$1.6bn Ba2/BB/BB+ Citi/GS/JPM/MS - 7%

International Financing Review March 31 2018 49 %SKOMûSAIDûTHATûWHILEûTHEûDOWNGRADEûWASû CURRENCYûTHROUGHûPRIVATEûPLACEMENTS ûORû -OSTûRECENTLY û"AHRAINûISSUEDûAû53BNû DISAPPOINTING ûITûDREWûATTENTIONûTOû-OODYSû SALESûTOûQUALIlEDûINVESTORSûABROAD SUKUK ACKNOWLEDGEMENTûOFûTHEûPOSITIVEûSTRIDESûTHEû 4URKCELLûWASûLASTûINûTHEûPUBLICûBONDû 3INCEûCHIEFûEXECUTIVEû*OHNû)OSSIlDISûJOINEDû NEWûBOARDûANDûNEWûINTERIMûGROUPûCHIEFû MARKETSûINûûWHENûITûSOLDû53MûOFû .OORûINû!PRILûLASTûYEAR ûTHEûBANKûHASû EXECUTIVEûHAVEûMADEûINûTHEûTWO MONTHû û/CTOBERûSû4HOSEûBONDSûDROPPEDû UNDERTAKENûAûTURNAROUNDûPLAN ûINCLUDINGû PERIODûTHATûTHEYûHAVEûLEDûTHEûORGANISATION BYûTHREEûPOINTSûDURINGûTHEûCOURSEûOFû-ARCH û MOVINGûAWAYûFROMûUNSECUREDûLENDINGûTOû !ûTRADERûSAIDûTHATûTHEûACTIONûDIDûNOTûHAVEûAû FROMûAûBIDûOFûûDOWNûTOû û SMALLûANDûMEDIUM SIZEDûENTERPRISESûANDû LARGEûEFFECTûONûTHEûCOMPANYSûBONDS û ACCORDINGûTOû4RADEWEB SHIFTINGûTHEûFOCUSûOFûITSûRETAILûBUSINESSûMOREû ALTHOUGHûTHEûPAPERûDIDûWIDENûBYûBPûINû !LSOûFROMû4URKEY û)SLAMICûLENDERûTURKIYE TOWARDSûAFmUENTûCONSUMERûCLIENTS RESPONSE FINANSûHASûBEENûGRANTEDûREGULATORYûAPPROVALû 4HEûGOVERNMENTûOFû$UBAI ûMEMBERSûOFû TOûRAISEû53MûVIAûDOLLAR DENOMINATEDû THEûEMIRATESûRULINGûFAMILYûANDûAûSELECTû )SLAMICûBONDS ûORûSUKUK ûACCORDINGûTOû GROUPûOFû5NITEDû!RABû%MIRATESûNATIONALSû TURKEY 4URKEYSû#APITALû-ARKETSû"OARD OWNûûOFûTHEûBANKSûSHARESûINûAGGREGATE û 4URKIYEû&INANS ûAûSHARIA COMPLIANTûLENDERû ACCORDINGûTOûITSûWEBSITE TURKISH ISSUERS LAY BOND PLANS THATûHASûAûFOCUSûONûLOANSûTOûCORPORATEû CLIENTS ûWILLûISSUEûTHEûSUKUKûTHROUGHûITSû -OBILEûOPERATORûTURKCELLû"A"""n"""n ûISû WHOLLY OWNEDûLEASINGûUNITû4&û6ARLIKû EYEINGûAûRETURNûTOûTHEûMARKETSûAFTERûAû  +IRALAMA YEARûABSENCE )TûPREVIOUSLYûISSUEDûDOLLAR DENOMINATEDû AMERICAS 4HEû4URKISHûCORPORATEûHASûMANDATEDûBNP SUKUKûINû ûAû53MûlVE YEARûDEALû Paribas ûHSBC and JP MorganûTOûARRANGEûTWOû THATûMATURESûINû-AYû4HEûSûAREûBIDûATû DAYSûOFûINVESTORûMEETINGSûINû%UROPEûANDûTHEû ûACCORDINGûTOû4RADEWEB COLOMBIA 53 ûSTARTINGûFROMû!PRILû 4URKCELLûINDICATEDûTHATûAû53ûDOLLARû YEARû SOVEREIGN STAYING CLEAR OF BONDûISSUEûMIGHTûFOLLOWû%ARLIERûTHISûYEAR ûITû FOREIGN BOND MARKETS APPLIEDûTOûTHEû#APITALû-ARKETSû"OARDûTOûISSUEû UPûTOû53MûORûITSûEQUIVALENTûINûANOTHERû MIDDLE EAST &ORûTHEûlRSTûTIMEûINûEIGHTûYEARS ûCOLOMBIA is STAYINGûCLEARûOFûFOREIGNûCURRENCYûBONDû ALL INTL EMERGING MARKETS BONDS ISSUANCEûASûITûLOOKSûTOûREDRESSûTHEûIMBALANCEû BOOKRUNNERS: 1/1/2018 TO DATE UAE OFûITSûEXTERNALûANDûINTERNALûDEBT Latin America #OLOMBIASûOPTIMALûBALANCEûBETWEENû Managing No of Total Share NOOR BANK PLANS ROADSHOW INTERNALûANDûEXTERNALûDEBTûISû ûBUTû bank or group issues US$(m) (%) FOR SUKUK THEûRATIOûHASûSHIFTEDûTOûûFOLLOWINGû 1 JP Morgan 15 5,192.84 16.7 THEûDEPRECIATIONûOFûTHEûCURRENCY 2 Citigroup 16 4,842.92 15.6 $UBAI BASEDûNOOR BANKûPLANSûTOûSTARTû h9OUûWANTûAûCOUNTRYûLIKEû#OLOMBIAûTOû 3 BAML 13 3,728.85 12.0 ROADSHOWSûTHISûWEEKûFORûAûBENCHMARK SIZEDû RAISEûMOSTûOFûITSûFUNDINGûINûDOMESTICû 4 BNP Paribas 5 2,086.05 6.7 SUKUK ûAûSOURCEûFAMILIARûWITHûTHEûMATTERû CURRENCY ûSOûWEûAREûNOTûEXPOSEDûTOûHIGHERû 5 Barclays 6 1,387.43 4.5 TOLDû2EUTERS DEBTûCOSTSûINûTHEûEVENTûOFûAûCHANGEûINûTHEû 6 HSBC 4 1,382.12 4.4 Citigroup, Deutsche Bank and Standard EXCHANGEûRATE vûSAIDû&INANCEû-INISTERû 7 Credit Suisse 5 1,375.44 4.4 CharteredûAREûARRANGINGûTHEûISSUE ûWHICHûWILLû -AURICIOû#ARDENASûONûTHEûSIDELINESûOFûTHEû 8 BBVA 2 1,308.69 4.2 LIKELYûHAVEûAûlVEûYEARûTENOR ûTHEûSOURCEûSAID )$"ûMEETINGSûINû!RGENTINA 9 Deutsche Bank 2 1,205.97 3.9 !CTIVITYûINûTHEû)SLAMICûBONDûMARKETûWASû #OLOMBIAûLEARNEDûTHATûLESSONûINûTHEû 10 Santander 6 1,202.77 3.9 RELATIVELYûBRISKûINû-ARCH ûWITHû$UBAI BASEDû S ûWHENûAûDEPRECIATIONûINûTHEûCURRENCYû Total 35 31,132.90 AIRLINEû%MIRATES û3AUDIû!RABIASû$ARû!Lû TURNEDûINTOûAûlSCALûCRISISûASûDEBTûCOSTSûROSE Excluding equity-related debt. !RKANû2EALû%STATEû$EVELOPMENTû#OûANDûTHEû 0UTTINGûTHEûCURRENCYûMIXûBACKûONûTRACKû Source: Thomson Reuters SDC code: L3 GOVERNMENTûOFû3HARJAHûALLûISSUINGûSUKUKû WILLûREQUIREûEMPHASIZINGûDOMESTICûISSUANCE û BOTHûTHISûYEARûANDûPERHAPSûINûCOMINGûYEARSû ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS FOLLOWINGûTHEûPRESIDENTIALûELECTIONûINû-AY BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE h/URûGOVERNMENTûENDSûONû!UGUSTûûANDû Europe/Africa Middle East WEûAREûNOTûPLANNINGûANYûEXTERNALûBONDû Managing No of Total Share Managing No of Total Share ISSUESûBEFOREûWEûLEAVE vûSAIDû#ARDENAS bank or group issues US$(m) (%) bank or group issues US$(m) (%) 4HISûYEARûTHEûGOVERNMENTûNEEDSûTOû 1 Citigroup 17 6,214.61 17.6 1 Citigroup 10 3,834.20 13.2 lNANCEûAûDElCITûOFûAROUNDû53BN ûABOUTû 2 VTB Capital 7 4,675.39 13.2 2 Standard Chartered 16 3,647.15 12.5 53BNûOFûWHICHûWILLûCOMEûFROMû4%3û 3 HSBC 7 2,368.65 6.7 3 HSBC 14 3,397.63 11.7 4REASURIES ûANDûTHEûRESTûFROMûMULTILATERALS 4 Deutsche Bank 7 2,342.86 6.6 4 JP Morgan 6 2,277.34 7.8 h7EûNEEDûTOûBEûCLEARûWITHûTHEûMARKETûTHATû 5 Standard Chartered 5 2,306.24 6.5 5 Sumitomo Mitsui Finl 3 1,587.41 5.4 ISûWHYûWEûAREûRELYINGûMOREûONûDOMESTICû 6 JP Morgan 9 2,243.28 6.3 6 Credit Suisse 5 1,401.16 4.8 BONDûISSUES vûSAIDû#ARDENASûh)TûISûAû 7 SG 10 2,068.54 5.9 7 BAML 5 1,324.67 4.5 REmECTIONûOFûTHISûSTRATEGYv 8 BNP Paribas 7 1,824.19 5.2 8 Deutsche Bank 6 1,154.06 4.0 4HEûLASTûYEARûTHATûTHEûCOUNTRYûISSUEDûALLûITSû 9 UniCredit 7 1,050.70 3.0 9 BNP Paribas 5 915.80 3.1 BONDSûINûLOCALûCURRENCYûWASûINû ûANDû 10 First Abu Dhabi Bank 2 907.87 2.6 10 Barclays 3 897.13 3.1 EVENûTHENûTHEûSOVEREIGNûSOLDû'LOBALû4%3û Total 30 35,353.51 Total 37 29,143.92 NOTESûTOûFOREIGNERS ûACCORDINGûTOû)&2ûDATA Excluding equity-related debt. Excluding equity-related debt. 3INCEûTHENû#OLOMBIAûHASûCUTûWITHHOLDINGû Source: Thomson Reuters SDC code: L2 Source: Thomson Reuters SDC code: L5 TAXESûFROMûûTOû ûOPENINGûTHEûWAYûFORû

50 International Financing Review March 31 2018 EMERGING MARKETS AMERICAS

4HEûBANKûHASûBEENûTRYINGûTOûBRIDGEûTHEû GAPûBETWEENûBANKSûTHATûHAVEûDOLLARSûTOûLENDû English court refuses to hear ANDûTHEûPESOûFUNDINGûNEEDSûOFûTHEûPROJECTSû INû#OLOMBIA )TûISûWORKINGûWITHûTHEû7ORLDû"ANKûANDû Dana Gas appeal COMMERCIALûBANKSûTOûCREATEûHEDGINGû INSTRUMENTSûTOûMITIGATEûRISKSûANDûSETûUPûAû „ ISLAMIC FINANCE Decision confirms original ruling in case of sukuk dispute SORTûOFûDISCOUNTûWINDOWûTOûALLOWûDOLLAR FOCUSEDûBANKSûTOûACCESSûPESOS DANA GAS has lost an attempt to overturn English Dana is headquartered, issued an order earlier h4HEûINITIALûLINEûISû53M ûBUTûTHATû court rulings that backed creditor demands for this month prohibiting the company from COULDûBEûEXPANDEDûTOû53M 53M vû the repayment of US$700m of Islamic bonds, the withdrawing its legal efforts in the UAE. HEûSAID UAE company said last Monday. The order was issued at the request of 4HREEûDEVELOPMENTûBANKSûHAVEûALREADYû The English Court of Appeal refused an a plaintiff, Marwan John Shorkry Kattan, a SIGNEDûUPûFORû53M ûANDûDELû6ALLEûHOPESû application by the UAE company to appeal the shareholder in Dana Gas. TOûBRINGûINûCOMMERCIALûBANKSûASûWELL November 2017 and February 2018 English High The Sharjah court also added BlackRock – one Court orders. of the largest creditors of Dana Gas – to the UAE Dana Gas last year shocked the global Islamic proceedings and issued an injunction prohibiting GUATEMALA finance industry when it stopped payments on it and other creditors from taking any action its sukuk, which matured in October, saying against Dana Gas or its shareholders in the UAE REPUBLIC EYES RETURN TO DOLLAR that because of changes in the interpretation and the United Kingdom until the UK courts’ BOND MARKETS of Islamic finance rules the bonds had become rulings “are referred to the UAE judiciary to unlawful in the UAE. resolve their enforceability in the UAE”. GUATEMALA ûRATEDû""n"" ûMAYûRETURNûTOûTHEû Instead, it proposed to exchange the sukuk This could mean that Dana’s creditors may not DOLLARûBONDûMARKETSûASûSOONûASû*UNE ûBUTû for new instruments with lower profit rates. The be able to advance any enforcing claims against MUCHûWILLûDEPENDûONûTHEûAPPROVALûOFû proposal was rejected by bondholders and a the company and its assets as long as the UAE MULTILATERALûLOANS ûTHEûCOUNTRYSûCREDITûCHIEFû legal battle started over the validity of the sukuk court orders remain in place. TOLDû)&2 in both English and UAE courts. Despite the legal dispute, Dana said on )DEALLYûTHEûCOUNTRYûWOULDûLIKEûTOûTAPû While the English Court of Appeal’s decision may Sunday it would seek shareholder approval to YEARûMONEYûWITHûAûSIZEûOFûBETWEENû53Mû complicate further legal action by the company in pay a dividend for 2017 totalling about Dh349m ANDû53MûTOûQUALIFYûFORûINDEXûINCLUSION û English courts, proceedings in the UAE continue. (US$95.03m). 2OSAû-ARIAû/RTEGA û'UATEMALASûDIRECTORûOFû A court in the emirate of Sharjah, where Davide Barbuscia PUBLICûCREDIT ûSAIDûONûTHEûSIDELINESûOFûTHEû)$"û MEETINGûINû!RGENTINA "UTûTENORûWILLûDEPENDûONûMARKETûAPPETITEû GREATERûPARTICIPATIONûFROMûINTERNATIONALû THEûSIDELINESûOFûTHEû)$"ûMEETINGSûINû ANDûCOSTS ûSAIDû/RTEGA ûNOTINGûTHATû ACCOUNTSûTHAT ûACCORDINGûTOû#ARDENAS ûNOWû !RGENTINA 'UATEMALASûLASTûTWOûFORAYSûINVOLVEDû YEARû MAKEûUPûûOFû4%3ûHOLDINGSû ûUPûFROMûJUSTû $OLLARûDEALSûCOULDûALSOûBEûONûTHEûCARDS ûASû BONDS ûlVEûYEARSûAGO PROJECTSûTHATûCANûSUPPORTûFUNDINGûINûTHATû 5LTIMATELYûTHEûSOVEREIGNûMAYûNOTûNEEDû h/NE FOURTHûOFûTHEû4%3û4REASURIES ûINû CURRENCYûCOMEûONûLINE TOûRAISEûMONEYûAMONGûINTERNATIONALû FOREIGNûHANDSûISûHEALTHY vûSAIDû#ARDENASû $ELû6ALLEûSEESûTHEû53BNû'ûPLANû INVESTORSûIFû#ONGRESSûAPPROVESûLOANSûFROMû h7EûDONTûHAVEûANûOBJECTIVEûTOûINCREASEû GETTINGûBACKûONûTRACKûTHISûYEARûAFTERûTHEû THEû7ORLDû"ANKûANDûTHEû)$"ûTOTALLINGû THATv /DEBRECHTûCORRUPTIONûSCANDALûHADûLOCALû 53M %VENûSO û#OLOMBIAûISûLOOKINGûTOûFOLLOWûTHEû BANKSûLESSENINGûTHEIRûEXPOSUREûTOû "UTûPROSPECTSûOFûTHATûAPPROVALûAREûLOWûINûAû TRENDûINûTHEûREGIONûOFûISSUINGûLOCAL CURRENCYû INFRASTRUCTUREûPROJECTS COUNTRYûTHATûHASûSUFFEREDûAûSERIESûOFûPOLITICALû BONDSûINû%UROCLEARABLEûFORMATûTOûBROADENû h,ASTûYEARûWEûONLYûDIDûTWOûPROJECTSû SCANDALS ûSOûTHEûGOVERNMENTûHASûBEENû THEIRûAPPEALûTOûFOREIGNERS BECAUSEûOFûTHEû/DEBRECHTûSITUATIONûANDû PREPARINGûAûDOLLARûBONDûJUSTûINûCASE h!NYTHINGûTHATûGIVESûMOREûLIQUIDITYûTOû SITUATIONSûRELATEDûTOûTHEûPROJECTSû 2EQUESTSûFORûPROPOSALSûAREûREADYûBUTûHAVEû THESEûLOCAL ûBONDSûISûGOOD vûSAIDû#ARDENASû THEMSELVES vûHEûSAID YETûTOûBEûSENTûTOûBANKS ûSHEûSAID h7EûAREûTALKINGûWITHû%UROCLEARûTOûSEEûIFûWEû h4HISûYEARûWEûHOPEûTOûGETûBACKûTOûTHEûLEVELû 4HEûGOVERNMENTûHASûBEENûUNDERûPRESSUREû CANûMOVEûINûTHATûDIRECTIONv INûû ûAROUNDûEIGHTûPROJECTSûAûYEARûANDû ASûTHEûCOUNTRYSûATTORNEYûGENERALûSEEKSûTOû 53BN 53BNûRAISEDv INVESTIGATEûTHEûPRESIDENTûAMIDûALLEGATIONSûOFû FDN CAN WAIT FOR CROSS-BORDER BOND /FûTHEû53BNûNEEDEDûFORûTHEû'û ILLEGALûCAMPAIGNûlNANCING DEVELOPMENT ûABOUTû53BNûHASûALREADYûBEENû 4HEû/DEBRECHTûCORRUPTIONûPROBEûHASûALSOû #OLOMBIASûFINANCIERA DE DESARROLLO NACIONAL RAISEDûTHROUGHûAûCOMBINATIONûOFûSOURCES û EXTENDEDûTOû'UATEMALA ûWHEREûPROSECUTORSû &$. ûHASûNOûNEEDûTOûTAPûTHEûMARKETûNOWû INCLUDINGûTHEû&$.ûITSELF ûLOCALûANDûINTERNATIONALû REVEALEDûTHATûTHEûEX INFRASTRUCTUREûMINISTERû BUTûCOULDûDOûSOûNEXTûYEARûASûITûLOOKSûTOû BANKS ûANDûINSTITUTIONALûINVESTORS HADûTAKENûBRIBESûFROMûTHEû"RAZILIANû FACILITATEûFUNDINGûFORûTHEûNATIONSû'û 4HISûYEAR ûTHEûBANKûISûREJIGGINGûTHEû CONSTRUCTIONûCOMPANY ûACCORDINGûTOû2EUTERS NETWORKûINFRASTRUCTUREûPROGRAMME SOURCESûOFûFUNDINGûTOûREDUCEûPARTICIPATIONû )Nû/CTOBER û30ûLOWEREDû'UATEMALASû 4HEûBANK ûMANDATEDûTOûMOBILIZEû FROMûLOCALûBANKS RATINGûTOû""nûFROMû"" ûCITINGûTHEûIMPACTûONû lNANCINGûFORû#OLOMBIASûINFRASTRUCTUREû h7EûWILLûINCREASEûSUBSTANTIALLYûOURû GROWTHûFROMûPOLITICALûVOLATILITYûANDûWEAKû DEVELOPMENT ûISûLOOKINGûATûAûPOTENTIALûTRADEû PARTICIPATIONûTOûûBECAUSEûWEûAREûWELLû GOVERNMENTûINSTITUTIONS INû CAPITALIZED vûDELû6ALLEûSAID &ITCH ûONûTHEûOTHERûHAND ûSEESûLIMITEDû h.EXTûYEARûWEûWILLûPROBABLYûDOûAûCROSS h&$.ûNOWûHASûAROUNDû53BN 53BNû IMPACTûONûGROWTHûFROMûTHEûPOLITICALûSCANDAL û BORDER ûLOCAL DENOMINATEDûBOND vû#LEMENTEû OFûCAPITAL ûWHILEûBEFOREûWEûONLYûHADû NOTINGûTHATûTHEûECONOMYûHASûBEENûRESILIENTû DELû6ALLE ûTHEûBANKSûPRESIDENT ûTOLDû)&2ûONû 53Mv INûTHEûFACEûOFûSUCHûSHOCKSûINûTHEûPAST

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4HEûûSûISSUEDûATûTHATûTIMEûTOûYIELDû 4HATSûSIMILARûTOûXûFORû&IBRAû5NOSûANDû 7HILEû'UERRAûSAIDûTHEûBANKûLOOKSûATû ûHAVEûLATELYûBEENûTRADINGûATû û XûFORû"2û-ALLS ûANDûBELOWûTHEûXû MARKETSûACROSSûTHEûGLOBE ûITSûNATURALû ACCORDINGûTOû4HOMSONû2EUTERSûDATA EXPECTEDûFORû0ARQUEû!RAUCO SOURCESûOFûFUNDINGûINûTHEûINTERNATIONALû 4HEûREMAININGûFUNDINGûGAPûISûEXPECTEDûTOû !TûûTHEûNEWû)N2ETAILûBONDûCAMEû MARKETSûAREûDOLLARS ûEUROS ûYEN ûSTERLINGû BEûlLLEDûTHROUGHûLOCALûBONDûISSUANCEûANDû BPûWIDEûTOûTHEûûSECONDARYûLEVELûONû&IBRAû ANDû3WISSûFRANCS LOANSûFROMûMULTILATERALS 5NOSûEXISTINGûû"AA"""""" ûAû 4HEûBANKûTAPPEDûTHEûYENûMARKETûINû COMPARABLEûBONDûTHOUGHûHIGHER RATED /CTOBER ûRAISINGû*09BNûTHROUGHûAûû 4HEûDEALûHADûORIGINALLYûBEENûmAGGEDûATûAû BONDûTHATûWASûPRICEDûTOûYIELDû PERU MINIMUMû53MûINûSIZE "UTûDOMESTICûISSUANCEûISûAûNATURALûCHOICEû 7ITHûINVESTORSûMOREûCIRCUMSPECTûAMIDûAû FORûAûBANKûTHATûHASûûOFûITSûLOANûPORTFOLIOû INRETAIL BOND TESTS APPETITE IN MOREûVOLATILEûBACKDROP ûCREDITûPOSITIVESû DENOMINATEDûINûPESOS TOUGH MARKET HAVEûBEENûTAKINGûAûBACKSEATûTOûRISKSûONû )NûTHATûMARKET ûTHEûBORROWERûISûLOOKINGûATû MANYûDEALSûCOMINGûTOûMARKET AûRANGEûOFûOPTIONS ûINCLUDINGûlXED RATE û -ARKETûTONEûWASûBETTERû4UESDAY ûBUTû )NûTHEûCASEûOFû)N2ETAIL ûLEVERAGEûWASûANû mOATINGûRATEûASûWELLûASûTHEMATICûISSUESûSUCHû CONDITIONSûREMAINEDûTOUGHûFORû,ATINû ISSUEûFORûSOMEûINVESTORS ûWITHû&ITCHû ASû'REEN û3OCIALûANDû9OUTHûBONDS ûHEûSAID !MERICANûBORROWERSûASû0ERUSûINRETAIL FORECASTINGûTHATûNETûDEBTûTOû%BITDARûWILLûPEAKû )TSûNEXTûDOMESTICûDEALûCOULDûCOMEûASûSOONû SHOPPING MALLS APPROACHEDûINVESTORSûWITHû ATûXûINû ûVERSUSûXûINû ASûNEXTûMONTH THEûREGIONSûlRSTûBONDûOFûTHEûWEEK !NDûTHEûCOMPANYûISûNOTûEXPECTEDûTOû !NYûISSUEûDONEûINûTHEûLOCALûMARKET û $ESPITEûSIGNIlCANTûHEADWINDS ûHOWEVER û REDUCEûLEVERAGEûANYûTIMEûSOON ûWITHû&ITCHû HOWEVER ûWILLûBEûUNRECOVERABLEûTOû THEûMALLûOPERATORûPRICEDûANûUPSIZEDû FORECASTINGûNETûADJUSTEDûLEVERAGEûTOûFALLûTOû FACILITATEûPARTICIPATIONûFROMûFOREIGNû 53Mû YEARûNON CALLûlVEûBONDûATû AROUNDûXûBYû ACCOUNTS  ûINûFROMûINITIALûPRICEûTHOUGHTSûOFû h%VENûTHOUGHûTHISûISûAûSOLIDûCREDIT ûITûISûNOTû 4HISûFOLLOWSûAûSTRATEGYûTHATûTHEûBANKû LOWû ASûIFûTHEYûAREûGOINGûTOûGOûTOûXûTOMORROW vû BEGANûINûûh7EûHAVEûSEENûAûGROWTHûINû 4HATûPRICEûPROGRESSIONûLOOKEDûGOODû THEûINVESTORûSAID FOREIGNûPARTICIPATIONûSINCEûWEûSTARTEDûDOINGû COMPAREDûWITHûMANYûRECENTûISSUES ûWHICHû !NDûLATELY ûNOûMATTERûHOWûGOODûTHEûCREDITû THIS vû'UERRAûSAID HAVEûSTRUGGLEDûTOûTIGHTENûLEVELSûAMONGûAû QUALITYûOFûANûISSUER ûMANYûINVESTORSûAREû

52 International Financing Review March 31 2018 EMERGING MARKETS AMERICAS

PREFERRINGûTOûHOLDûONûTOûCASHûFORûFEARûOFû REDEMPTIONSûORûPOORûSECONDARYû PERFORMANCE Paraguay prepares better h.OûONEûISûSAYINGûWEûHAVEûSEENûTHEûWORSTû YET vûONEûBANKERûSAIDûh)NVESTORSûFEELûTHEû PRIMARYûISûBROKEN ûANDûYOUûAREûBETTERûOFFû debt management HOLDINGûCASHv 0ROCEEDSûWILLûHELPûRElNANCEû53MûOFû „ SOVEREIGN DEBT Finance minister says country assessing debt sustainability levels SûANDûTOûEXTENDûAû53MûLOANûTOû )N2ETAILû0ERUû#ORPûTOûHELPûPARTIALLYûPAYûAû With six dollar bond issues under its belt, US$530m 30-year that was priced to yield 5.6% BRIDGEûLOANûFORûTHEûACQUISITIONûOFû PARAGUAY is now laying the groundwork for a on the back of a US$2.6bn order book. PHARMACEUTICALûCOMPANYû1UICORP more sophisticated debt management strategy. The country has just US$20m left to raise this Citigroup and JP MorganûACTEDûASûGLOBALû The government has been assessing its debt year, an amount that can be covered throughout COORDINATORSûANDûJOINTûBOOKRUNNERSûALONGû sustainability levels while exploring ways to the year with small issues in the domestic with Credit Suisse deepen what is still a very shallow local market. market, said Gimenez. “We still have a very conservative approach The government is also carrying out reforms towards everything we do in regards to debt,” to deepen the local market. The idea is not only URUGUAY Finance Minister Lea Gimenez told IFR on the to make it easier for certain state-owned banks sidelines of the IDB meetings in Argentina. “We to issue debt locally, but to allow the country’s URUGUAY PLANS ‘IMMINENT’ DEBT SALE think in the next few years that debt will reach a largest pension fund to buy government bonds. steady-state point and stabilise.” A law is also making its way through Congress URUGUAYûISûPLANNINGûTOûTAPûTHEûGLOBALûDEBTû The country, rated Ba1/BB/BB, still has scope to better regulate pension funds, providing more MARKETSûhIMMINENTLYvûANDûEXPECTSûTOûSELLû to issue more debt. transparency and guidelines for investments. BONDSûINûFOREIGNûCURRENCYûINûûAFTERû According to a recent analysis conducted with “Paraguay is a very risk-averse county - so STICKINGûTOûTHEûLOCALûCURRENCYûMARKETûLASTû the IMF, sustainable debt levels for the country averse to risk-taking that we don’t even invest [a YEAR ûlNANCEûMINISTERû$ANILOû!STORIûTOLDû stand at somewhere between 30% and 45% of good part of] the public works funds, which are 2EUTERSûINûANûINTERVIEW GDP versus the current 25%, Gimenez said. sitting in the central bank and losing value,” said !STORI ûWHOûISûCONSIDERINGûRUNNINGûFORû “In terms of the capacity of the state we could Gimenez. PRESIDENTûOFûTHEû3OUTHû!MERICANû triple [our debt service commitments], but we are “We have been [gradually] investing part of COUNTRYûNEXTûYEAR ûSAIDûTHEûECONOMYûISû not planning to do that,” said Gimenez, who at 36 the funds in Triple A assets, but we should do this FORECASTûTOûEXPANDûBYûûTHISûYEAR ûUPû is the youngest finance minister in the region, and more proactively.” FROMûûINû ûTHANKSûPARTLYûTOûTHEû the first woman to hold that position in Paraguay. While the development of the local market is RESTARTûOFûSTATE RUNûOILûCOMPANYû!NCAPSû Rather than increase debt, the government is important, the sovereign isn’t necessarily making RElNERY ûWHICHûUNDERWENTûMAINTENANCEû working on a law to allow the sovereign to more a push toward issuing local-currency debt - INû readily take advantage of windows of opportunity unlike some other Latin American countries. h!ûSIGNIlCANTûPARTûOFûTHEûMANUFACTURINGû to perform some liability management. That is partly because Paraguay has a natural INDUSTRYûWILLûHAVEûEXTRAORDINARYûGROWTH vû “The objective of these transactions is not to currency hedge through the dollar revenues !STORIûSAIDûONûTHEûSIDELINESûOFûTHEû)NTER issue new debt or grow the debt level, but rather generated at the hydroelectric dams that it !MERICANû$EVELOPMENTû"ANKSûANNUALû improve the debt profile,” she said. “When these jointly owns with Brazil and Argentina. MEETINGûINû-ENDOZA û!RGENTINA windows open up in the international markets, “We have revenues from [these projects] (EûSAIDûTHEûûGROWTHûlGURE ûPUBLISHEDû we can go out and buy back some old bonds and which are sufficiently large to cover all the debt ONû4HURSDAYûBYûTHEûCENTRALûBANK ûWASû issue new debt at better rates.” service,” Gimenez said. SLIGHTLYûBELOWûTHEûGOVERNMENTSûPROJECTIONû Land-locked Paraguay has built a relatively By 2023, the country will have repaid the cost FORû ûBUTûWASûHIGHERûTHANûITSûINITIALû extensive yield curve in US dollars since its debut of construction for one of those dams, bringing FORECASTûOFû in the international markets in 2013. in additional revenues of around US$1bn a year, &ORû û!STORIûSAIDûRECENTLYûANNOUNCEDû Paraguay took out most of its 2018 financing she said. INCENTIVESûFORûINVESTMENTûANDûTHEûhREVERSALvû needs earlier this month, when it issued a Paul Kilby OFûAûDROUGHTûINûTHEûBEEFûANDûSOY EXPORTINGû COUNTRYûWOULDûHELPûGROWTH ûPROVIDINGû REVENUEûTOûREDUCEûTHEûlSCALûDElCITûTOûûOFû 5RUGUAYûWILLûTAPûDEBTûMARKETSûhINûTHEû '$0ûBYûTHEûENDûOFû0RESIDENTû4ABAREû COMINGûDAYSvû(EûDECLINEDûTOûGIVEûFURTHERû REGIONAL 6AZQUEZSûTERM DETAILSû(EûADDEDûTHATûTHEûGOVERNMENTû 4HEûDElCITûISûûOFû'$0û6AZQUEZSû WOULDûSWAPûEXISTINGûBONDSûFORûLONGER CABEI STICKS TO MULTI-CURRENCY PLAN "ROADû&RONTûGOVERNMENT ûWHICHûHASû DURATIONûDEBTûTHISûYEAR INCREASEDûSPENDINGûONûSOCIALûPROGRAMMES û !STORI ûWHOûHASûPREVIOUSLYûRUNûFORû CABEIûWILLûSTICKûTOûITSûTRIED AND TESTEDûSTRATEGYû WILLûBEûhCAUTIOUSvûWITHûSPENDINGûWHENûITû PRESIDENTûANDûWASûVICEûPRESIDENTûFROMû THISûYEARûOFûRAISINGûFUNDINGûINûVARIOUSû PRESENTSûITSûlNALûBUDGETûPROPOSALûINû*UNE û   ûSAIDûHEûWOULDûDECIDEûWHETHERû CURRENCIES ûBUTûAûRAREû53ûDOLLARûDEALûMAYûBEû !STORIûSAID TOûRUNûAFTERûTHISûYEARSûSOCCERû7ORLDû#UPûINû ONûTHEûHORIZONûASûTHEûBANKûAWAITSûANû h)Nû5RUGUAY ûITûISûNOTûEASYûBECAUSEûTHEû *ULYû(EûWOULDûHAVEûTOûRESIGNûFROMûHISû UPGRADEûTOû!!  PERCENTAGEûOFûNON DISCRETIONARYûSPENDINGûISû CURRENTûPOSTûTOûBEûAûCANDIDATEûINûTHEû/CTOBERû 4HATûISûWHATûANûOFlCIALûINûTHEûCAPITALû MUCHûHIGHERûTHANûDISCRETIONALûSPENDING û ûVOTE MARKETSûDIVISIONûOFûTHEû#ENTRALû!MERICANû BUTûWEûAREûEMPHASISINGûAûPRUDENTûAPPROACHû h)TûISûAûJOBû)ûWOULDûLIKEûTOûDO vûHEûSAIDûh"UTû DEVELOPMENTûBANKûTOLDû)&2ûONûTHEûSIDELINESû TOûSPENDING vû!STORIûSAID EVENûTHOUGHû)ûWOULDûLIKEûTO ûANDûAMûWILLINGû OFûTHEû)$"ûMEETINGûINû-ENDOZA û!RGENTINA 4OûSTARTûCOVERINGûITSû53BNûBONDû TOûDOûIT ûTHEûCOLLECTIVEûCONDITIONSûHAVEûTOû 4HEûBANK ûRATEDû!!! ûHASûTYPICALLYû lNANCINGûNEEDSûTHISûYEAR û!STORIûSAIDû EXISTûTOûMAKEûITûPOSSIBLEv TARGETEDûFUNDRAISINGûINûAûVARIETYûOFû

International Financing Review March 31 2018 53 CURRENCIES ûSUCCESSFULLYûSWAPPINGûPROCEEDSû PARTûBONDûLASTûWEEKûEVENûASûOTHERSûINûTHEû YOUûUPSTREAMûMOREûDIVIDENDSûTOû!44 vûTHEû BACKûTOû53ûDOLLARSûATûATTRACTIVEûCOSTS REGIONûDECIDEDûTOûWAITûDUEûTOûUNCERTAINû PORTFOLIOûMANAGERûSAIDûh4HEûANSWERûISûMOREû h3WAPPINGûBACKûTOûDOLLARSûHASûBEENûMOREû MARKETûCONDITIONS BONDSv COSTûEFFECTIVEûTHANûISSUINGûINûTHEû53ûDOLLARû "UTûPRICINGûPROGRESSIONûONûTHEû53BNû #OVENANTû2EVIEWûSAIDûTHEREûWEREûNOû MARKETûDIRECTLY vûSAIDûTHEûOFlCIALûh4HATûHASû DEAL ûRATEDû"A"""" ûINDICATEDûTHATûLEADSû LIMITSûONûTHEûAMOUNTûOFûSECUREDûDEBTûTHATû BEENûTHEûSTRATEGYv HITûROADBLOCKSûASûAûRISK AVERSEûBUYSIDEûSTOODû CANûBEûINCURREDûBYûNON GUARANTORSûANDûTHATû #!"%)ûHASûALREADYûRAISEDû53M ITSûGROUNDûAGAINSTûEXCESSIVEûTIGHTENING INVESTORSûhSHOULDûINSISTûTHATûTHISûBEûlXEDv EQUIVALENTûTHROUGHûAû3WISSûFRANCûANDûYENû 4HISûWASûESPECIALLYûTRUEûFORûTHEû53Mû 4HEûBONDSûAREûBACKEDûBYûAûPLEDGEûOFûû ISSUE ûLEAVINGûITûWITHûABOUTû53MûTOûRAISEû  YEARûTRANCHE ûWHICHûPRICEDûATûAûYIELDûOFû OFûTHEûSHARESûOFûCERTAINûSUBSIDIARIESûUNTILû FORûTHEûRESTûOFûTHEûYEAR  ûTHEûWIDEûENDûOFûINITIALûPRICEûTHOUGHTS û !44ûREDUCESûITSûSTAKEûTOûLESSûTHANûû!Tû )NûCOMINGûMONTHSûITûISûLIKELYûTOûRETURNûTOû AFTERûBOOKSûHITûJUSTû53M ûSOURCESûTOLDû THATûTIME ûTHEûSUBSIDIARIESûWILLûTHENûBECOMEû SOMEûOFûITSûCOREûINVESTORSûINûPLACESûSUCHûASû )&2 GUARANTORS -EXICO û3WITZERLANDûANDû4AIWAN )NVESTORSûWEREûMOREûRECEPTIVEûTOûTHEû h4HEûUNIQUEûASPECTûOFûTHISûDEALûISûTHATû )TûALSOûPLANSûTOûRETURNûTOûTHEû5RIDASHIû 53MûlVE YEARûPIECE ûWHICHûSAWû THEREûISûGOINGûTOûBEûAûDIFFERENCEûINûCREDITû MARKET ûWHEREûITûHASûINûTHEûPASTûISSUEDûINû DEMANDûOFû53BNûANDûPRICEDûTOûYIELDû SUPPORTûBEFOREûANDûAFTERûTHEûSPIN OFF vûSAIDû 3OUTHû!FRICANûRAND û!USTRALIANûDOLLARSûANDû  ûTHEûTIGHTûENDûOFûû nBP û *ASONû3UH ûAû#OVENANTû2EVIEWûANALYST 4URKISHûLIRA GUIDANCEûANDûINSIDEû)04SûOFûMIDû h4HEûGUARANTEESûAREûWORTHûMOREûTHANûTHEû h)TûISûAûMARKETûWHEREûWEûHAVEûBECOMEûAû 4HEû YEARûCAMEûWIDEûTOûCOMPARABLESû EQUITYûPLEDGE ûSOûIFûINVESTORSûAREûCOUNTINGû FREQUENTûISSUER vûTHEûOFlCIALûSAID SUCHûASû,IBERTYû-EDIA OWNEDû#ABLEûû ONûTHOSEûGUARANTEES ûTHEYûSHOULDûKNOWûTHATû )NûANûEFFORTûTOûINCREASEûITSûRATINGS û#!"%)û 7IRELESSSûûS ûWHICHûWEREûTRADINGû THEREûISûNOûREQUIREMENTûTHATûTHEûCOMPANYû HASûBEENûWORKINGûTOûDIVERSIFYûITSûLENDINGû ATûAROUNDû ûACCORDINGûTOûONEûANALYST PROCEEDûWITHûTHEûSPIN OFFv PORTFOLIOûANDûBRINGûINûSHAREHOLDERSûTHATû )TûALSOûOFFEREDûAûCONSIDERABLEûPICK UPûTOû !44ûHOPESûTOûSELLûnûOFûTHEû HOLDûHIGHERûRATINGSûTHANûITûDOES TELECOMSûOPERATORû-ILLICOM ûWHICHûISûRATEDû BUSINESSûANDûEVENTUALLYûTAKEûTHATûDOWNûTOû !TûLEASTûONEûRATINGûAGENCYûISûEXPECTEDûTOû "A"" "" ûANDûHASûAûûTRADINGûATû LESSûTHANûûATûAûLATERûDATE ûTHEûPORTFOLIOû UPGRADEû#!"%)ûTOû!! ûTHISûYEAR ûPUTTINGûITûONû AROUNDû MANAGERûSAID COURSEûTOûACCESSINGûSUPRANATIONALûINVESTORSû 4OUGHERûMARKETûCONDITIONSûMEANTûTHATû h"ECAUSEûITûISûAûNEWûCOMPANY ûTHEYûDONTû ANDûINûTURNûLOWERINGûITSûFUNDINGûCOSTS THEûDEALûSIZEûFELLûSHORTûOFûTHEûUPûTOû53BNû HAVEûAûDIVIDENDûPOLICY ûANDûWEûDONTûKNOWû h7EûHAVEûHIGHûEXPECTATIONSûTHATûTHISûYEARû PREVIOUSLYûmAGGED HOWûMUCHûTHEYûWILLûUPSTREAMûGOINGû WEûWILLûGETûOURûlRSTû!! ûRATINGûFROMûONEûOFû 6RIOûHADûALSOûBEENûEYEINGûAûmOATING RATEû FORWARD vûHEûSAID THEûAGENCIES vûHEûSAID BONDûDENOMINATEDûINû!RGENTINEûPESOS ûBUTû 4HEûCOMPANY ûWHICHûOPERATESûUNDERûBOTHû 5NDERûSUCHûAûSCENARIOû#!"%)ûCOULDûRETURNû THATûWASûUNLIKELYûINûTHEûCURRENTûCLIMATE ûONEû THEû$IREC46ûANDû3KYûBRANDS ûGENERATESûMOSTû WITHûAûBENCHMARKûDOLLARûTRADEûFOLLOWINGûANû PORTFOLIOûMANAGERûTOLDû)&2 OFûITSûCASHmOWûINû"RAZILûANDû!RGENTINA û UPGRADEû ûORûPERHAPSûEVENûBEFORE ûGIVENûTHEû 6RIOûWILLûUSEûPROCEEDSûTOûMAKEû WHICHûACCOUNTEDûFORûABOUTûûOFû53BNû INCREASINGûATTRACTIONûOFûDIRECTûDOLLARûISSUES DISTRIBUTIONSûTOûITSûPARENTûCOMPANYûAHEADûOFû INû%BITDAûLASTûYEAR ûACCORDINGûTOû&ITCH h4HEû53ûDOLLARûMARKETûHASûIMPROVEDûAû ANûEXPECTEDû)0/ûnûNOTûTHEûPREFERREDûORDERûOFû -OODYSûFORESEESûADEQUATEûLIQUIDITYûAFTERû LOT vûSAIDûTHEûOFlCIAL BUSINESSûFORûMANYûINVESTORS 6RIOûHASûUPSTREAMEDûITSû)0/ûANDûDEBTû (EûSAIDûTHEûCOSTûDIFFERENTIALûHASûNARROWEDû h4YPICALLYûlXED INCOMEûINVESTORS ûWOULDû PROCEEDS ûANDûEXPECTSûITûTOûHAVEû53MûINû BETWEENûISSUINGûDIRECTLYûINûDOLLARSûANDû LIKEûTOûSEEûANû)0/ûlRST vûTHEûPORTFOLIOû CASHûBYûYEAR ENDûANDû53MûINûFREEû SWAPPINGûBACKûFROMûOTHERûCURRENCIES MANAGERûSAID CASHmOWûGENERATIONûOVERûTHEûNEXTûTHREEû !NDûWITHûANûUPGRADEûLIKELYûTHISûYEAR û 4HEûSTRUCTUREûALLOWSûTHEûCOMPANYûTOûBUYû YEARS #!"%)ûWILLûPROBABLYûTAPûTHEûDOLLARûMARKETû BACKûTHEûBONDSûATûûIFûITûFAILSûTOûCARRYûOUTû 4HATûWILLûBEûENOUGHûTOûCOVERû53MûINû ONCEûITûMOVESûINTOû$OUBLEû!ûTERRITORY THEû)0/ ûBUTûITûISûUNDERûNOûOBLIGATIONûTOûDOû DEBTûMATURITIESûSTARTINGûINû û-OODYSû SO ûACCORDINGûTOûRESEARCHûlRMû#OVENANTû SAID VRIO COMES TO MARKET WHILE 2EVIEW Citigroup ûGoldman Sachs ûJP Morgan and OTHER CREDITS WAIT 4HATûHASûRAISEDûCONCERNSûAMONGûINVESTORSû Morgan Stanley AREûACTINGûASûJOINTû WORRIEDûTHATûTHEûISSUERûCOULDûSEEKûMOREû BOOKRUNNERS ûWHILEûBarclays ûBNP Paribas û VRIO û!44Sû,ATINû!MERICANûSATELLITEû LEVERAGE Bradesco ûCredit Suisse ûItau and Santander are BUSINESS ûPUSHEDûAHEADûWITHûAûCOMPLEXûTWO h)FûTHEû)0/ûDOESNTûGOûTHROUGH ûHOWûDOû CO MANAGERS

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54 International Financing Review March 31 2018 LOANS

Australia 56 China 56 Hong Kong 57 Indonesia 58 Japan 58 Belgium 59 Germany 59 Italy 60 Spain 60 Turkey 61 UAE 61 UK 62 United States 62 Leveraged Loans 64 Restructuring 72

„ FRONT STORY EUROPEAN LEVERAGED MARKET ECB lending guidelines ‘toothless’ Several large LBOS have breached the six times leverage limit Bankers question how ECB can police the guidelines

Several large leveraged buyouts have FIRST REVIEW “As it stands pretty much every deal breaks exceeded the six times leverage limit outlined The ECB has made a round of visits to banks the guidelines as the ECB include everything by the European Central Bank’s guidance on this year to monitor the way they work and up to shareholder loans as debt,” said a third leveraged lending, leading loan bankers to arrangements introduced to comply with syndicate head at a European bank. “The big question just how effective the rules are. THEûGUIDELINESûASûITûPREPARESûFORûAûlRSTû challenge is that the banks and the ECB also Arranging banks are exceeding the review at the end of the year. have to monitor all deals above four times, so leverage limits set out in the guidelines as Despite more stringent and costly systems there’s clearly a manpower issue.” they struggle to satisfy borrowers’ demands put in place by the banks, many bankers in the highly competitive and liquid loan question how the ECB will be able to police market, and are focusing more on the guidelines, which were introduced to “The guidelines have shown companies’ ability to repay debt. rein in risky bank lending and are similar to no teeth and ECB has shown “Banks have not been restricted one iota Leveraged Lending Guidelines that were no desire to enforce them. in the way they have levered deals as a implemented by the Federal Reserve in the It feels like a ‘me too’ regulation result of the ECB guidelines on leveraged US in 2013. lending,” a syndicate head said. “The guidelines have had a soft impact on but without the hashtag or The guidelines were introduced last the market. Yes banks have brought in empowerment” November in a bid to match similar US systems and processes to cover the bases and GUIDELINES ûWHICHûSPECIlEDûTHATûCOMPANIESû monitor what they’re doing but are they still also have to repay at least 50% of the total opting to do highly leveraged deals anyway? DEBTûINûlVEûTOûSEVENûYEARS ûINûADDITIONûTOû Yes!” a second syndicate head said. curbing leverage. A partner at a large sponsor noted the ECB !ûõBN EQUIVALENTûDEBTûlNANCINGûTOû does not have the resources to monitor the The third syndicate head noted it was back the buyout of AKZO NOBEL’s chemicals market effectively, meaning the number of CLEVERûOFûTHEû%#"ûTOûSCHEDULEûITSûlRSTûREVIEWû business will have leverage of around 6.4 deals leveraged over six times is unlikely to of how banks are following and interpreting TIMESû)TûFOLLOWSûAûlNANCINGûTHATûHADû decline. the guidelines for the end of this year. leverage of 6.23 times that backed KKR’s “The guidelines have shown no teeth and “That helps it to potentially save face if buyout of UNILEVER’s spreads business FLORA ECB has shown no desire to enforce them. It the Fed does backtrack on its guidelines this FOOD GROUP, which closed earlier this month. feels like a ‘me too’ regulation but without year, as the ECB can react accordingly,” the THEûHASHTAGûORûEMPOWERMENT vûTHEûlRSTû third syndicate head said. syndicate head said. In the short term there is likely to be “Banks have not been minimal impact from the ECB guidelines. restricted one iota in the MOOD SWING “I don’t think there’s been much impact way they have levered deals A change in mood over the Fed’s guidelines from the guidelines so far, and looking at as a result of the ECB has only complicated matters further. The what’s to come there’s a lot of seven times- guidelines on leveraged Fed’s guidance has received criticism from plus deals,” a fourth syndicate head said. numerous Republican lawmakers following Bankers seem far more focused on the lending” Donald Trump’s presidential victory in late repayment metric outlined in the 2016 and are set to be rolled back. guidelines, as opposed to the four and six “The arc of the US guidelines went from times leveraged metric. unclear to clear and now it’s unclear again, The repayment metric ties in more which is frustrating,” said a managing HEAVILYûWITHûAûCOMPANYSûCASHmOWSûANDûITSû director at a large US bank. “What is it to be ability to return capital to lenders. Meanwhile, JP Morgan and Morgan Stanley SIXûTIMESûLEVERED û)SûITûONûAûlNANCIALûREPORTû The view from many bankers in the HAVEûPROVIDEDûAûSTAPLEûlNANCINGûTOûBACKûAû number or a pro forma number that can be market is that a stronger credit with good potential sale of French drug maker SANOFI’s heavily adjusted?” CASHmOWSûCANûTAKEûHIGHERûLEVERAGEûANDû European generic drugs business ZENTIVA, It is not just the headline deals that they’d feel more comfortable lending to that which totals around 7.0 times leverage, ostensibly break the ECB guidelines. The business than a lower leveraged and arguably while banks are offering up to 8.0 times GUIDELINESûSTATEûTHEûDElNITIONûOFûLEVERAGEDû WEAKERûBUSINESSûWITHûPOORûCASHmOWS LEVERAGEûONûDEBTûlNANCINGSûTOûBACKûAû transactions as all types of loans or credit “This is very much a transition year,” the potential sale of German metering group exposure with leverage of more than four third syndicated head said. TECHEM. times total debt to Ebitda. Claire Ruckin, Max Bower

International Financing Review March 31 2018 55 BPûFORûTHEûFOUR YEARûANDûBPûFORûTHEûlVE -,!SûWITHû53M EQUIVALENTûORûMOREû year. earn top-level all-ins of 236.67bp (for US ASIA-PACIFIC DOLLARS ûORûBPûFORûEUROS ûVIAûANû NINJA PIECE OF SDP REFI TO CLOSE upfront fee of 110bp, while lead arrangers WITHû53MnM EQUIVALENTûEARNûALL INSû AUSTRALIA !Nû YEARû.INJAûLOANûOFû!M ûPARTûOFûTHEû of 231.67bp or 201.67bp, via a 95bp fee, and !BNûRElNANCINGûFACILITYûFORûTHEû3YDNEYû ARRANGERSûWITHû53MnM EQUIVALENTû DUO SEEK REFIS OF OVER A$1bn DESALINATIONûPLANTû3$0 ûWASûTOûREACHû earn all-ins of 228.33bp or 198.33bp, via an lNANCIALûCLOSEûLASTû4HURSDAY 85bp fee. 2ElNANCINGûLOANSûOFû!M EQUIVALENTû The loan, led by underwriter MUFG, saw &UNDSûWILLûRElNANCEûAû53MûTHREE 53M ûFORûCOMMERCIALûSERVICESû the participation of Japanese life insurers, as year bullet term loan from May 2015. It paid company SPOTLESS GROUPûANDû!MûFORû well as regional and cooperative banks. a top-level all-in of 291.7bp, based on a contractor DOWNER EDI have been launched 4HEûRElNANCINGûCLOSEDûINû&EBRUARYû-5&'û margin of 270bp over Libor. through six mandated lead arrangers and originally funded the Ninja loan in Last May, Fosun International closed a bookrunners. Australian dollars. It will be converted into a 53M EQUIVALENTûTHREE YEARûBULLETûTERMû ANZ, BNP Paribas, Commonwealth Bank of combined US dollar and Australian dollar loan. It paid a top-level all-in of 240bp, based Australia, HSBC, Mizuho Bank and MUFG are FACILITYûAFTERûlNANCIALûCLOSE ûWITHûTHEû on a margin of 200bp over Libor or Euribor. the six MLABs. Australian-currency portion being the larger The borrower is an investment holding The loan for Spotless, in which Downer of the two. company with a portfolio including EDI owns a majority stake, comprises a The Ninja loan paid all-ins of 175bp for healthcare, insurance, resources and leisure !MûTERMûLOANûANDûAû.:Mû Australian dollars and 130bp for US dollars, assets across the world. 53M ûREVOLVINGûCREDITû)TûISûFURTHERû calculated on margins of 170bp over BBSY divided into a three-year revolver of and 125bp over Libor. LENOVO INCREASES LOAN SIZE !M ûAûTHREE YEARûTERMûLOANûANDû 4HEûRESTûOFûTHEûRElNANCINGûWASûSTRUCTUREDû REVOLVERûOFû.:M ûAûFOUR YEARûREVOLVERûOFû WITHûTHREE YEARûANDûlVE YEARûTRANCHESûANDû Smartphone and computer maker LENOVO !MûANDûAûFOUR YEARûTERMûLOANûOFû funded mainly by existing lenders. The GROUPûHASûINCREASEDûITSûLOANûTOû53BNû !M interest margin for the three-year tranche is FROMû53BNûAFTERûAûSTRONGûRESPONSEûFROMû The opening interest margin, calculated BPûOVERû""39 ûWHILEûTHATûFORûTHEûlVE YEARû 20 lenders in general syndication. on a leverage grid, is 140bp over BBSY and tranche is 120bp over BBSY. Citigroup is original mandated lead BKBM for the three-year pieces and for the The borrower is SDP FINCO. ARRANGERûANDûBOOKRUNNERûONûTHEûlNANCING û four-year portions it is 155bp over BBSY. As The plant has been undergoing repairs, while nine other banks joined with for the of December 31, the company had a net expected to be completed later this year, MLAB title. leverage ratio of 2.9x. The commitment fee AFTERûSUFFERINGûSIGNIlCANTûSTORMûDAMAGEûINû Mandated lead arrangers and for the revolver is 45% of the applicable December 2015. As the storm triggered a bookrunners are ANZ, Banco Santander, BNP margin. force majeure clause, the plant’s contractual Paribas, Cathay United Bank, China Construction The participation fee is 40bp for the obligations under its water-supply Bank, Citigroup, Credit Agricole, CTBC Bank, DBS three-year pieces and 50bp for the four-year agreement with state utility Sydney Water Bank and MUFG. Mandated lead arrangers are portions for top-level commitments of have been put on hold until the State Bank of India and Societe Generale. Lead !M EQUIVALENT reconstruction project is completed. arrangers are DZ Bank, Credit Industriel et )Nû$OWNERSûCASE ûITûISûRElNANCINGûAû The plant has not delivered any water Commercial, Credit Suisse, Goldman Sachs, !MûREVOLVERû4HEû!MûFOUR YEARû since it was bought in 2012 by Hastings Morgan Stanley, Natixis, Westpac, Bank of East tranche offers an interest margin of 125bp Funds Management and Ontario Teachers’ Asia and Yuata Commercial Bank. OVERû""39ûANDûTHEû!MûlVE YEARûOFFERSû Pension Plan due to high water levels in The loan offered a top-level all-in pricing 140bp over BBSY, based on its BBB rating Sydney. The sponsors paid the New South of 185bp, based on an opening margin of &ITCH û4HEûTOP LEVELûTICKETûOFû!MûOFFERSû 7ALESûGOVERNMENTû!BNûFORûAû YEARû 160bp over Libor. lease. The margin, tied to the borrower’s net leverage ratio, ranges from 135bp to 195bp. ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY Proceeds of the loan are for general SYNDICATED VOLUME (INCLUDING JAPAN) CHINA corporate funding, capital expenditure and BOOKRUNNERS: 1/1/2018 TO DATE RElNANCINGûPURPOSES Managing No of Total Share FOSUN LAUNCHES US$500m REFI bank or group issues US$(m) (%) CHEMCHINA WRAPS JUMBO LOAN 1 Mizuho 120 18,877.47 16.9 Hong Kong-listed FOSUN INTERNATIONAL has 2 Sumitomo Mitsui Finl 141 14,025.41 12.5 LAUNCHEDûAû53MûTHREE YEARûTERMûLOANû CHINA NATIONAL CHEMICAL CORP has signed its 3 MUFG 179 13,199.98 11.8 TOûRElNANCEûAûûBORROWING 53BNûDUAL TRANCHEûTERMûLOANûAFTERû 4 Bank of China 40 12,351.73 11.0 Bank of East Asia, Commerzbank, First Abu attracting 24 banks in general syndication. 5 Citic 3 4,300.52 3.8 Dhabi Bank, Hang Seng Bank, Nanyang Banco Santander, Bank of America Merrill 6 ANZ 14 4,297.65 3.8 Commercial Bank and Wing Lung Bank are the Lynch, Barclays, BNP Paribas, China CITIC Bank, 7 Standard Chartered 10 4,230.09 3.8 mandated lead arrangers and bookrunners Commerzbank, Credit Agricole CIB, Credit Suisse, 8 HSBC 12 4,010.16 3.6 ONûTHEûLOAN ûWHICHûHASûANûUNSPECIlEDû First Abu Dhabi Bank, Industrial Bank, Rabobank, 9 United Overseas Bank 6 3,549.14 3.2 greenshoe option. MUFG, Natixis, Societe Generale and Unicredit 10 Malaysian Banking Berhad 2 2,051.67 1.8 The Chinese conglomerate’s loan, which Bank were the MLABs and equal Total 610 111,835.41 can be drawn in euros or US dollars, pays an underwriters of the bullet loan. Proportional credit interest margin of 200bp over Libor and Mandated lead arranger and bookrunner Source: Thomson Reuters SDC code: S3a 170bp over Euribor. is ABN AMRO. Mandated lead arranger is Bank

56 International Financing Review March 31 2018 LOANS ASIA-PACIFIC

of East Asia, while lead arrangers are State Bank of India, Caixabank and Mega International Commercial Bank. Arrangers are Fubon Bank Olam ties margin to ESG metrics (Hong Kong), Hang Seng Bank and OCBC Bank. Lead managers are Bank of Philippine Islands, „ SINGAPORE Agri-business clubs first Asia sustainability-linked loan Bank Sinopac, Chang Hwa Commercial Bank, Chiyu Banking Corp, First Commercial Bank, Hua OLAM INTERNATIONAL has raised a three-year BEYOND NORMAL REQUIREMENTS Nan Commercial Bank and Siam Commercial sustainability-linked revolving credit facility “We want to go beyond what we would normally Bank. Managers are Shin Kong Commercial of US$500m, the first loan in Asia to tie the be required to do as a listed company. Listing Bank, E. Sun Commercial Bank, Land Bank of interest margin to the borrower’s performance on requirements mainly address governance Taiwan, Shinhan Asia, Taiwan Cooperative Bank, environmental, social and governance metrics. matters and are not as specific on environmental Shanghai Commercial & Savings Bank, Eastspring The move follows the release of the or social issues,” he said. Investment, NEC Capital Solutions and Taichung Green Loan Principles by the London-based Pricing on the latest loan is close to the Commercial Bank. Loan Market Association and Hong Kong- levels Olam has paid on similar-tenor facilities #.!#û#ENTURYû(+ û#Oû,TDûISûTHEû headquartered Asia Pacific Loan Market previously, according to Parande, who declined borrower, while parent ChemChina and Association on March 21. to reveal the interest margin or fees. AFlLIATESû#HINAû.ATIONALû!GROCHEMICALû#Oû The principles create a framework of market However, a few of months earlier, in July, Olam ,TDû#.!# ûANDû#.!#û3ATURNû(+ û#Oû,TDûAREû standards and guidelines aimed at bringing made a successful debut on the Samurai loan guarantors. The borrower, CNAC and CNAC consistency across the wholesale Green loan market, closing a ¥25bn (US$223m then) three- Saturn are all fully owned subsidiaries of market. year facility with 11 Japanese banks. The loan state-owned ChemChina. Olam, under the terms of its loan, is pays an interest margin of 45bp over Libor. 4HEûBULLETûLOANûISûSPLITûINTOûAû53BNû committed to meeting improvement targets Olam’s latest self-arranged loan was THREE YEARûTRANCHEû!ûANDûAû53BNûlVE for a comprehensive range of ESG metrics, as clubbed with 15 mandated lead arrangers: year tranche B, respectively, paying an assessed by Sustainalytics. The Amsterdam- ANZ, BNP Paribas, DBS, Mizuho Bank, MUFG, opening top-level all-in pricing of 181.33bp headquartered assessor rates the sustainability NAB, Rabobank, Standard Chartered and the and 215bp over Libor, based on of listed companies, based on ESG performance. Singapore branches of ABN AMRO Bank, #HEM#HINASûRATINGSûOFû"AA"""!¦û “We are proud to be the first company in Asia Commerzbank, CBA, HSBC, ING Bank, Natixis and -OODYS30&ITCH û0RICINGûISûTIEDûTOûAû and the agri-sector to secure a sustainability- UniCredit Bank. ratings grid. linked medium-term club loan that links interest ING is the sustainability coordinator, while &UNDSûWILLûGOûTOWARDûRElNANCINGûAû rates on the loan to achieving clear sustainability BNPP is the facility agent. Olam and wholly 53BNûBRIDGEûLOANûTHATûFUNDEDûTHEû targets,” said Sunny Verghese, Olam co-founder owned subsidiary Olam Treasury are the COMPANYSû3&RBNû53BN ûACQUISITIONû and group CEO in a press release. borrowers. last year of Swiss seeds and pesticides maker Other Asian companies and financial “We worked closely with lenders, which have Syngenta AG. institutions are following Olam down this road. hired Sustainalytics and will bear the costs Last Wednesday, ANZ joined the Qantas Future related to assessing Olam on the ESG metrics,” BOHAI AUTO SEEKS DEBUT Planet Partnership, a programme partnering said Parande. with businesses to reduce their environmental “This sustainability-linked loan speaks to BOHAI AUTOMOTIVE SYSTEMS CO is seeking a impact and increase investment in projects Olam’s core purpose of reimagining global €100m debut loan to back its acquisition of such as the preservation of wildlife habitats and agriculture and growing responsibly. We are a majority stake in Germany’s TRIMET rainforests. embedding the sustainability criteria evaluated Automotive Holding. Olam will be tested on the ESG metrics by an independent third party into our financing Natixis is the coordinator of the three-year annually, and, if the pre-set improvement targets activities.” transaction, which has been launched into are achieved, the interest rate on the facility Separately, Olam has obtained two loans, limited syndication. will be reduced. That means it will have two totalling US$163m, for itself and a wholly owned Price talk indicates an all-in pricing above opportunities during the life of the three-year subsidiary in Vietnam. 200bp. loan to reduce its interest margin. Olam raised a US$83m five-year loan for itself A special-purpose vehicle owned by Bohai “We will be assessed on more than 50 and guaranteed a US$80m seven-year facility for Automotive is the borrower, while the different environmental, social and governance unit CAFE OUTSPAN VIETNAM. parent is providing a guarantee. metrics once a year and will benefit from a Proceeds will go to capital expenditure and Shanghai-listed Bohai Automotive counts reduction in interest should we meet all the permanent working capital requirements for Beijing Hainachuan Automotive Parts Co Ltd criteria,” said Jayant Parande, Olam’s president Olam and COVL in Vietnam, Indonesia, Timor-  ûANDû"EIJINGû!UTOMOTIVEû'ROUPû#Oû,TDû and global head of treasury and investor Leste and Papua New Guinea.  ûASûITSûLARGESTûSHAREHOLDERSû"EIJINGû relations. The Asian Development Bank and Japan Automotive, or BAIC, is providing a letter of Parande said that Olam’s objectives were International Cooperation Agency were the comfort. two-fold – not just to cut the interest cost on the lenders. On Wednesday, Bohai Automotive borrowing, but also to meet the ESG criteria. Prakash Chakravarti announced its plan to buy a 75% stake in TRIMET Automotive for €61.5m from TRIMET Aluminium SE. The transaction is through mandated lead arrangers and subject to approval from regulators. HONG KONG bookrunners Bank of China (Hong Kong), Bank TRIMET Automotive, a maker of of Communications, Hong Kong branch, HSBC lightweight aluminium alloy parts, has long- BOCOM INTL SEEKS HK$4bn and Standard Chartered. term partnerships with European auto The loan can be drawn in either HK or US brands such as Audi, BMW, Daimler, BOCOM INTERNATIONAL HOLDINGS has launched a dollars. Based on an interest margin of Volkswagen and Volvo. (+BNû53M ûTHREE YEARûTERMûLOANû 130bp over Hibor or Libor, lenders get a top-

International Financing Review March 31 2018 57 level all-in pricing of 155bp and the MLA The loan now includes Indonesian banks cBNû53BN ûSYNDICATEDûLOANûTOû TITLEûFORû(+M EQUIVALENTûORûMORE ûVIAûAû in the arranger group, while Mizuho Bank, venture into banking. PARTICIPATIONûFEEûOFûBPûANûALL INûOFûBPû previously at the top, has dropped out. MUFG is the mandated lead arranger, ANDûTHEûLEADûARRANGERûTITLEûFORû(+Mn Bank CIMB Niaga, Bank Mandiri, Bank Permata, while Mizuho Bank and SMBC are co- M ûVIAûAûFEEûOFûBPûORûANûALL INûOFû BNP Paribas, Citigroup, ING Bank, MUFG, Standard arrangers. BPûANDûTHEûARRANGERûTITLEûFORû(+Mn Chartered and SMBC are mandated lead The loan was expected to be signed before M ûVIAûAûFEEûOFûBP arrangers and bookrunners on the facility, the end of March. &UNDSûAREûFORûRElNANCINGûANDûGENERALû COMPRISINGûAû53MûTERMûLOANûTRANCHE ûAû Lawson Bank Preparatory, of which corporate purposes. 2PTRNû53M ûTERMûLOANûPORTIONûANDûAû Lawson owns 95% and MUFG holds 5%, is the The Hong Kong-listed borrower, Rp800bn revolving credit piece. borrower. established in 1998, is the integrated The US dollar tranche offers interest Funds are for working capital of a newly PLATFORMûFORûSECURITIESûANDûRELATEDûlNANCIALû margins of 225bp and 210bp over Libor to ESTABLISHEDûlNANCIALûINSTITUTION ûTOûBEû services of Bank of Communications. onshore and offshore lenders, respectively, named Lawson Bank. Meanwhile, BoCom Macau is in the while the Indonesian rupiah tranches offer Drawdown is subject to obtaining a MARKETûFORûAû53MûLOAN ûWITHû(3"#ûASû 275bp over Jibor. banking licence from Japan’s Financial the MLAB. The loan, split into a 364-day Lenders are being invited to commit to all Services Agency. tranche A and a two-year tranche B, carries or either of the rupiah or US dollar tranches. Lawson has been offering ATM services respective interest margins of 60bp and Based on an average life of 4.2 years, MLAs through Lawson ATM Networks since 2001. 71bp over Libor. Banks joining as MLABs will WITHû53M2PBNûORûMOREûEARNûTOP obtain a top-level all-in of 73bp or 81bp, via LEVELûALL INSûOFûBPûONSHOREûDOLLARS û FPG RENEWS COMMITMENT LINES participation fees of 13bp or 20bp for BPûOFFSHOREûDOLLARS ûORûBPûFORû tranches A and B, respectively. RUPIAH ûVIAûAûPARTICIPATIONûFEEûOFûBP ûLEADû Tokyo Stock Exchange-listed FINANCIAL ARRANGERSûWITHû53MnM2PBNn PRODUCTS GROUP said on March 23 it was set to Rp404bn receive all-ins of 240.47bp (onshore renew two commitment lines, totalling INDIA DOLLARS ûBPûOFFSHOREûDOLLARS ûORû ¥24.3bn. BPûFORûRUPIAH ûVIAûAûBPûFEE ûANDû 4HEûlNANCIALûSERVICESûlRMûWASûDUEûTOûSIGNû INDIABULLS SIGNS US$200m REFI ARRANGERSûWITHû53MnM2PBNn a ¥15bn one-year facility last Friday to Rp269bn get all-ins of 238.09bp (onshore replace a same-sized loan completed last INDIABULLS HOUSING FINANCE has signed a DOLLARS ûBPûOFFSHOREûDOLLARS ûORû year. 53MûlVE YEARûRElNANCINGûLOAN û BPûFORûRUPIAH ûVIAûAûBPûFEE SMBC is arranger and agent on the latest through original mandated lead arrangers Funds are for capital expenditure, loan, while MUFG is co-arranger. Funds are to and bookrunners MUFG and State Bank of RElNANCINGûANDûWORKINGûCAPITALûPURPOSES acquire real estate. India. FPG also signed a ¥9.3bn-equivalent one- Korea Development Bank came in to share ADIRA MAKES QUICK RETURN year facility last Tuesday to replace a the same title. similar-sized loan from last year. The ¥9.3bn- Lead arrangers are Mega International ADIRA DINAMIKA MULTI FINANCE is returning for a equivalent facility comprises a ¥4.8bn Commercial Bank OBU and Taiwan Cooperative 53MûTHREE YEARûLOAN ûSIXûMONTHSûAFTERû tranche and a ¥4.5bn-equivalent dual- Bank OBU. Arrangers are Land Bank of Taiwan it closed a facility of the same size. currency tranche in US dollars or yen. The OBU, Bank of Taiwan OBU, Hua Nan Commercial ANZ, BNP Paribas, Citigroup, DBS Bank and tenor can be extended for six months. Bank OBU and Hua Nan Commercial Bank MUFG are mandated lead arrangers and MUFG is the arranger and agent, while Bank Singapore branch. Managers are Bank of Panhsin BOOKRUNNERSûONûTHEûlNANCING ûWHICHûHASûAû of Iwate, Daito Bank, Kagawa Bank, Minato Bank, and Sunny Bank. 53MûGREENSHOEûOPTION Osaka Prefectural Credit Federation of Agricultural The loan pays an interest margin of 120bp The interest margin is 90bp over Libor Cooperatives, Saitama Prefectural Credit Federation over Libor and has an average life of 3.56 and the average life is 1.625 years. of Agricultural Cooperatives, Tottori Bank and years. Lenders get a top-level all-in pricing of Lenders receive top-level all-in pricing of Toyama Daiichi Bank joined in syndication. 143bp, via a participation fee of 82bp. 110bp and the lead arranger title for Funds are for the borrower’s tax leasing &UNDSûWILLûBEûUSEDûTOûRElNANCEûTHEû 53MûANDûABOVE ûVIAûAûPARTICIPATIONûFEEûOFû ARRANGEMENTûBUSINESS ûAIRCRAFTûlNANCINGû borrower’s same-sized maiden loan 32.5bp, or an all-in of 105bp and the ANDûRElNANCINGûPURPOSES completed in August 2016. Barclays was the ARRANGERûTITLEûFORû53MnM ûVIAûAû "OTHûFACILITIESûHAVEûTWOûlNANCIALû SOLEû-,!"ûOFûTHEûlVE YEARûFACILITY ûWHICHû 24.3bp fee. covenants: the borrower must maintain a drew eight other lenders in general Funds will be used for general corporate minimum of 75% of net assets, and should syndication. The facility paid a top-level purposes. have no recurring losses. all-in of 220bp, based on a margin of 200bp The Jakarta-based borrower provides FPG previously tapped the syndicated loan over Libor. CONSUMERûlNANCINGûANDûlNANCE LEASINGû market last December for a ¥15bn one-year The borrower is a private-sector housing services for cars, motorcycles, durable goods commitment line, which can be drawn in lNANCEûlRM and other products. The company is a US dollars or yen. SMBC was the arranger subsidiary of Bank Danamon Indonesia. and agent.

INDONESIA NIPPON REIT RAISES REFI LOANS JAPAN STP LAUNCHES US$567m FACILITY NIPPON REIT INVESTMENT CORP has signed eight LAWSON SEEKS BANKING FUNDS bullet term loans totalling ¥20.9bn for Telecoms tower operator SOLUSI TUNAS RElNANCINGûPURPOSES PRATAMAûHASûLAUNCHEDûAû53M Tokyo Stock Exchange-listed convenience MUFG arranged seven of the eight loans at EQUIVALENTûlVE YEARûLOAN store operator LAWSON has said it is seeking a tenors of six to 10 years and interest

58 International Financing Review March 31 2018 LOANS EMEA

margins ranging from 36bp to 65bp over variable-rate tranche paying 90bp over six- for the remaining stake, a premium of 25% one-month Tibor. month Euribor. to the stock’s March 23 closing price, Mitsubishi UFJ Trust & Banking, Mizuho Bank, 4HEûlVE YEARûTRANCHESûCOMPRISEûANûõMû VALUINGûTHEûCOMPANYûATûABOUTû53BN û Mizuho Trust & Banking, Resona Bank, Shinsei lXED RATEûTRANCHEûPAYINGûûANDûAûõMû Reuters reported. Bank, SMBC and Sumitomo Mitsui Trust Bank tranche paying 100bp over six-month Euribor. joined in syndication. WABCO is listed on the New York Stock HEIDELBERG AGREES €320m REFI The loans are slated to be drawn down on Exchange. April 24 and August 20. Printing-press maker HEIDELBERGER Separately, Meiji Yasuda Life Insurance gave DRUCKMASCHINEN has agreed a €320m loan Nippon REIT a ¥500m eight-year bilateral loan DENMARK RElNANCINGûONûIMPROVEDûTERMS ûALLOWINGû ATûAûYET TO BE DETERMINEDûlXED INTERESTûRATE the company to redeem part of its existing 4HEûBORROWERûINVESTSûMAINLYûINûOFlCEû NORDIC AVIATION NETS US$486m high-yield bond due in 2022. buildings. 4HEûlVE YEARûDEALûWASûARRANGEDûBYû The REIT last tapped the syndicated loan Regional aircraft leasing company NORDIC Heidelberg’s six main lenders: Bank of China, market in March 2017 to raise six bullet AVIATION CAPITAL has completed the BNP Paribas, Commerzbank, Deutsche Bank, term loans of a combined ¥21.8bn. MUFG PLACEMENTûOFû53MûOFûUNSECUREDûDEBTû HSBC and LBBW. arranged those loans with tenors of six to through a US private placement and a debut DZ Bank, IKB, NIBC and SaarLB also eight years and margins ranging from 39bp Schuldscheindarlehen. participated. to 54bp over one-month Tibor. 4HEûDEBT ûWHICHûWILLûBEûUSEDûTOûRElNANCEû Heidelberg plans to nearly halve its aircraft in the company’s portfolio, lNANCINGûINTERESTûCOSTûINûTHEûMEDIUMûTERMû COMPRISESûAû53MûSENIORûUNSECUREDû to around €20m. TAIWAN PRIVATEûPLACEMENTûANDûAû53Mû The new facility provides the company unsecured SSD with maturities of three, WITHûlNANCIALûmEXIBILITYûTOûSUPPORTûITSû LG DISPLAY SIGNS AR FACILITY lVE ûSEVEN ûEIGHTûANDûûYEARS digital transformation. The US private placement was arranged !FTERûTHEûRElNANCING û(EIDELBERGSû LG DISPLAY TAIWANûHASûWRAPPEDûUPûAû53Mû by Citigroup and BNP Paribas, while the SSD lNANCINGûSTRUCTUREûCOMPRISESûTHEûõMû one-year accounts receivable factoring was arranged by Investec Bank. syndicated loan, a convertible bond of €59m facility with four lenders. 4HEûlNANCINGûISûPARTûOFû.!#SûMIGRATIONû maturing in March 2022, an early callable Mandated lead arranger and bookrunner TOûANûUNSECUREDûlNANCINGûSTRUCTUREûAFTERû bond of €204m maturing in May 2022, and Taishin International Bank was joined by THEûCOMPANYûCOMPLETEDûAû53Mû an EIB loan of €100m with a term until 2024. mandated lead arranger Far Eastern unsecured private placement in June 2017. Heidelberg extended the maturity of its International Bank and participants KGI Bank 4HATûlVEûANDûSEVEN YEARûlNANCINGûWASû existing revolving credit facility for an initial and Taipei Fubon Commercial Bank. arranged by Citigroup and Deutsche Bank. total of €250m in August 2015. The amended Funds are for general corporate purposes. .!#ûALSOûAGREEDûAû53MûUNSECUREDû lNANCINGûWASûDUEûTOûAMORTISEûTOûõMûBYû The borrower is a fully owned subsidiary syndicated revolving credit facility in July 2019. of South Korea’s LG Display. 2017 arranged by Citigroup with BNP Heidelberg had group sales of around Paribas, Credit Agricole and Deutsche Bank. €2.5bn in 2016/17. The company is rated B 4HATûlNANCINGûHADûAûTHREE YEARûMATURITYû by S&P and B2 by Moody’s. and is expected to be increased through an SCOUT24 NETS DEBUT SCHULDSCHEIN EUROPE/MIDDLE accordion feature. EAST/AFRICA Digital marketplace operator SCOUT24 has GERMANY placed a debut €215m Schuldscheindarlehen via ING and LBBW, taking advantage a strong BELGIUM KNAUF EYES US$4bn FOR USG BID 33$ûMARKETûTOûDIVERSIFYûITSûlNANCINGûANDû extend its maturities. WABCO PLACES €300m SCHULDSCHEIN Family-owned building products company GEBR KNAUFûCOULDûRAISEûUPûTOû53BNûINûDEBTû EMEA LOANS BOOKRUNNERS – FULLY Commercial vehicle systems company WABCO lNANCINGûTOûBACKûITSûUNSOLICITEDûBUYOUTû SYNDICATED VOLUME has placed a €300m Schuldscheindarlehen. offer for US-based USG Corp. BOOKRUNNERS: 1/1/2018 TO DATE 4HEûlNANCINGûDIVERSIlESû7!"#/SûDEBTû +NAUFûSAIDûITûHASûAûHIGHLYûCONlDENTûLETTERû Managing No of Total Share portfolio in an attractive euro interest rate from Morgan Stanley for the debt. bank or group issues US$(m) (%) environment. The acquisition will not be subject to any 1 SG 35 13,402.88 8.3 WABCO Europe BVBA is the borrower, lNANCINGûCONDITIONSûANDû+NAUFûEXPECTSûTOû 2 Deutsche Bank 27 11,870.82 7.3 while parent company WABCO Holdings Inc lNANCEûTHEûTRANSACTION ûINCLUDINGûANYû 3 BAML 20 10,987.10 6.8 is guarantor. REQUIREDûRElNANCINGûOFû53'ûDEBT ûFROMû 4 Credit Agricole 43 9,769.14 6.0 The SSD was arranged by BNP Paribas, ING existing funds and additional borrowings. 5 BNP Paribas 45 8,836.75 5.5 and UniCreditû4HEûlNANCINGûHASûTHREE ûFOURû Knauf intends to prepare and deliver a 6 Citigroup 21 8,754.66 5.4 ANDûlVE YEARûMATURITIES FULLYûCOMMITTEDûlNANCINGûBYûTHEûTIMEûOFûTHEû 7 Goldman Sachs 15 8,128.34 5.0 The three-year tranches comprise a €10m SIGNINGûOFûAûDElNITIVEûAGREEMENT 8 ING 29 7,865.05 4.9 lXED RATEûTRANCHEûPAYINGûûANDûAû USG has rejected the buyout offer from its 9 HSBC 29 7,611.00 4.7 €50m variable-rate tranche paying 80bp second biggest shareholder saying it 10 JP Morgan 16 6,625.84 4.1 over six-month Euribor. substantially undervalues the company. Total 147 161,590.85 The four-year tranches comprise a €60m Gebr Knauf, which owns a 10.5% stake in Proportional credit lXED RATEûTRANCHEûPAYINGûûANDûAûõMû THEûCOMPANY ûHASûOFFEREDû53ûPERûSHAREû Source: Thomson Reuters SDC code: R17

International Financing Review March 31 2018 59 4HEû33$ûWILLûBEûUSEDûTOûPARTIALLYûRElNANCEû Last year’s facility was arranged by existing debt. Rabobank, Credit Agricole CIB, Natixis, NETHERLANDS 4HEûlNANCINGûCOMPRISESûMATURITIESûOFû Standard Bank, and SMBC as coordinating THREE ûFOUR ûlVEûANDûSIXûYEARSûONûlXEDûANDû initial mandated lead arrangers and AERCAP UPS REFI TO US$950m mOATINGûRATESûOFûINTEREST bookrunners, and Ghana International Bank The SSD closed oversubscribed after as initial mandated lead arranger. It paid a !IRCRAFTûLEASINGûlRMûAERCAP HOLDINGS has strong demand and was increased from a margin of 65bp over Libor. increased its self-arranged revolving credit launch amount of €200m. Pricing was at the Cocobod is a statutory public board TOû53MûFROMûTHEû53MûTARGET lowest end of marketing. established under the responsibility CTBC Bank, DBS Bank and First Abu Dhabi Pricing on the three-year tranches started of the Ministry of Finance and Economic Bank were the coordinators of the four-year at 75bp, the four-year tranches started at Planning, which supervises Ghana’s cocoa RElNANCING ûWHICHûPAYSûANûINTERESTûMARGINû BP ûTHEûlVE YEARûTRANCHESûSTARTEDûATûBP û industry. of 155bp over Libor. WHILEûPRICINGûONûTHEûlXED RATEûONLYûSIX YEARû Banks were offered a top-level all-in pricing tranche started at 105bp. of 173.75bp via an upfront fee of 75bp. Scout24 agreed a €800m syndicated loan ITALY Other lenders are Bank of China, London in December 2016 comprising a €600m term branch, Bank of China, Dubai branch, Bank of loan and a €200m revolving credit facility, FIAT CHRYSLER AMENDS AND EXTENDS China, Singapore branch, State Bank of India, paying initial margins of 170bp and 130bp Osaka branch, Cathay United Bank, OCBC Bank, over Euribor, respectively. FIAT CHRYSLER AUTOMOBILES has amended and Bank of Taiwan, Singapore branch, ICBC Europe, extended its existing €6.25bn revolving Amsterdam branch, ICBC, Singapore branch, ISBANK AG RENEWS €100m TERM LOAN credit facility. Westpac Banking Corp, Singapore branch, Chang 4HEûlNANCINGûINCLUDESûAûõBNû Hwa Commercial Bank OBU, Hua Nan ISBANK AG has renewed its €100m-equivalent month tranche with two extension options Commercial Bank OBU, Hua Nan Commercial term loan with a 100% rollover ratio. of one year and of 11 months exercisable on Bank Singapore branch, Mega International Standard Chartered Bank was the THEûlRSTûANDûSECONDûANNIVERSARYûONûTHEû Commercial Bank OBU, Taiwan Cooperative Bank coordinator and documentation agent with amendment signing date. OBU, Yuanta Commercial Bank, Bank Sinopac, BayernLB the facility agent. 4HEREûISûALSOûAûõBNûlVE YEARûTRANCHE Hong Kong branch, China Construction Bank 4HEûFACILITYûCOMPRISESûTRANCHESûOFû53Mû 4HEûAMENDEDûlNANCINGûWASûAGREEDûWITHûAû Europe, Amsterdam branch, Far Eastern and €96.27m, and attracted commitments group of 27 of FCA’s key relationship banks. International Bank, First Commercial Bank OBU, from 14 banks across eight countries. &#!ûAMENDEDûANDûEXTENDEDûTHEûlNANCINGû Korea Development Bank, Singapore branch, Land The amount raised was in excess of the in March 2017 via a group of 27 banks, Bank of Taiwan OBU, Taichung Commercial Bank, amount in the 2017 maturing facility by INCREASINGûTHEûlNANCINGûFROMûõBN Taiwan Business Bank OBU, Woori Bank, Hong approximately 33%, and lenders were scaled The loan was originally agreed in June Kong branch, E.Sun Commercial Bank, Shin Kong back. 2015 via 24 banks led by bookrunners and Commercial Bank, Hong Kong branch, Shanghai BayernLB, Commerzbank, Demir-Halk Bank, mandated lead arrangers Bank of America Commercial & Savings Bank, and Sunny Bank. DenizBank, Standard Chartered Bank and Merrill Lynch, Barclays, BNP Paribas, !ER#AP ûRATEDû""" û30&ITCH ûLASTûTAPPEDû UniCredit Bank joined as mandated lead Citigroup, Credit Agricole, Goldman Sachs, !SIANûLENDERSûINû!PRILûûFORûAû53Mû arrangers and bookrunners. JP Morgan, Mediobanca, Societe Generale, loan, paying a margin of 165bp over Libor. The deal pays an all-in margin of 125bp UBS and UniCredit. CTBC, DBS and Development Bank of Japan over Libor on the dollar loan and 115bp over coordinated that deal. Euribor on the euro loan for commitments In February last year, AerCap amended at the MLA level. That is 20bp lower from KUWAIT and extended an unsecured revolver, the all-in on the 2017 deal. INCREASINGûITûTOû53BNûFROMû53BN The facility has a one-year bullet maturity BURGAN BANK NETS US$350m CLUB and proceeds will be used for the bank’s CORRECTION GENERALûTRADEûlNANCEûPURPOSES BURGAN BANKûHASûSIGNEDûAû53MûTHREE Frankfurt-based Isbank AG was founded year club loan with a group of international 4HEûSTORYûh!EGONûNETSûõBNûRElNANCINGvûINû in 1992 as a wholly owned subsidiary of and regional banks. the March 24 issue omitted that ING acted as Isbank, the largest private bank in Turkey The facility, which will be used for coordinator of the deal, along with Bank of by assets as of December 31 2017. GENERALûlNANCINGûPURPOSES ûPAYSûAûMARGINû America Merrill Lynch. of 95bp over Libor and has a bullet repayment at the end of three years. GHANA Burgan Bank was able to secure SPAIN competitive terms while extending the COCOBOD SENDS RFP FOR PXF tenor of the facility when compared with its ALVEAN SUGAR BAGS REFI previous club loan that was agreed in COCOBOD has sent out a request for proposals December 2015. Trader ALVEAN SUGARûHASûSIGNEDûAû53Mû FORûITSûANNUALûPRE EXPORTûlNANCINGûLOAN 4HATû53MûTWO YEARûCLUBûLOANûPAIDûAû 364-day revolving credit facility to replace a 4HEûlNANCING ûWHICHûWILLûBEûUSEDûTOûMEETû margin of 105bp over Libor. 53MûFACILITYûAGREEDûINû!PRILû #OCOBODSûlNANCINGûNEEDSûFORûITSûû Commerzbank, HSBC, First Abu Dhabi Bank, The RCF will be used for working capital COCOAûCROP ûREPLACESûAû53BNûLOANûRAISEDû Standard Chartered Bank, Citibank, Mizuho Bank for Alvean’s sugar trading activities and will last year. and Wells Fargo Bank were mandated lead support the growth of the business. 4HEûNEWûlNANCINGûWILLûALSOûBEûFORû arrangers and bookrunners on the new deal. 4HEûlNANCINGûWASûLAUNCHEDûATû53Mû 53BNûANDûTHREEûBANKINGûGROUPSûAREû Wells Fargo was coordinator, and closed oversubscribed, allowing the working on proposals. documentation agent and facility agent. FACILITYûTOûBEûINCREASEDûTOû53M

60 International Financing Review March 31 2018 LOANS EMEA

“This was achieved at tighter pricing 4HEûLOANûWILLûRElNANCEûAû53Mû levels with a range of new lenders joining TURKEY DAYûMURABAHAûlNANCINGûTHATûCLOSEDûINû!PRILû the syndicate,” Alvean CFO Stefano Tonti û4HATûlNANCINGûWASûCOORDINATEDûBYû said. “The RCF will play an important role in AKBANK CLOSES US$1.24bn LOAN Bank ABC and paid a margin on 125bp over OURûDIVERSIlEDûFUNDINGûMODEL ûCONTRIBUTINGû three-month Libor. to the strength of our balance sheet as we AKBANKûHASûCLOSEDûAû53BN EQUIVALENTû Albaraka was last in the market in continue to grow our global footprint.” syndicated loan. .OVEMBERûûWHENûITûCLOSEDûAû53Mû A total of 26 banks committed to the The loan comprises a one-year facility murabaha loan facility that paid 130bp over lNANCING ûWHICHûWASûARRANGEDûBYû SPLITûBETWEENûAû53MûTRANCHEû!ûANDûAû Libor. bookrunners and mandated lead arrangers €483m tranche B, which pay 130bp over BNP Paribas, Rabobank, Credit Agricole CIB and Libor and 120bp over Euribor, respectively. EXIMBANK CLOSES US$670m LOAN Natixis. 4HEREûISûALSOûAû53MûTWO YEARûTRANCHEû ABC International Bank, ABN AMRO, Banco do C paying 210bp over Libor. TURK EXIMBANKûHASûCLOSEDûAû53M Brasil, Banco Santander, Credit Suisse, HSBC and Bank of America Merrill Lynch, First Abu Dhabi equivalent syndicated loan from a group of Raiffeisen Bank International joined as Bank and Industrial and Commercial Bank of 24 lenders. mandated lead arrangers. ChinaûARRANGEDûTHEûLATESTûlNANCING MUFG was sole coordinator, bookrunner British Arab Commercial Bank, DBS Bank, DZ 4HEûLOANûRElNANCESûAû53BN and facility and documentation agent on the Bank, Erste Bank, GarantiBank International, equivalent multi-tranche loan arranged in deal. ING, OCBC, Societe Generale and UniCredit March 2017. The one-year facility on that The facilities were split between four JOINEDûASûLEADûARRANGERSûWHILEûAgricultural LOANûCOMPRISEDûAû53MûTRANCHEû!û tranches: a €358.5m one-year tranche A1, a Bank of China, Banco Bradesco, Banque Cantonale paying 145bp over Libor and a €738.3m õMûTWO YEARûTRANCHEû! ûAû53Mû de Geneve, UBS, Union de Banques Arabes et tranche B paying 135bp over Euribor. ONE YEARûTRANCHEû"ûANDûAû53MûTWO YEARû Francaises and Zuercher Kantonalbank joined as 4HEREûWASûALSOûAû53MûTWO YEARû tranche B2. arrangers. tranche C paying 220bp over Libor. Mandated lead arrangers are Mizuho Bank, Alvean was founded in 2014 as a 50-50 Akbank was last in the market in August Citi, Emirates NBD, DenizBank, First Abu Dhabi joint venture between US-based ûWHENûITûRAISEDûTHEû53BN Bank, ICBC, ING, Standard Chartered Bank, agribusiness and food processor Cargill and equivalent loan - the A, B and C tranches on SMBC and Turk Ekonomi Bankasi. Lead arranger Brazilian sugar exporter Copersucar. The that loan paid 135bp, 125bp and 220bp, is HSBC, while arrangers are Bank of Taiwan, company is incorporated in Bilbao and respectively. Bank SinoPac, Intesa Sanpaolo, Isbank and Yapi operates through a Geneva branch in ve Kredi Bankasi. Lead managers are Akbank Switzerland, working with producers, VAKIF KATILIM BANKASI SEEKS US$150m TAS-Malta Branch, Bank ABC, Bank Audi, Habib RElNERIES ûINDUSTRIALûCOMPANIESûANDûTRADINGû Bank, Hua Nan Commercial Bank, Kexim Asia houses worldwide. VAKIF KATILIM BANKASI is in the market for a and Taiwan Cooperative Bank. DEBUTû53MûDUAL CURRENCYûSYNDICATEDû The one and two-year euro tranches pays MURABAHAûlNANCING 85bp and 150bp over Euribor, respectively, SWITZERLAND Bank ABC is coordinating on the facility while the one and two-year dollar tranches and has been joined by Emirates NBD pay 95bp and 160bp over Libor, respectively. GLENCORE NETS US$9.085bn Capital, First Abu Dhabi Bank, Kuwait Pricing is lower than on the bank’s International Bank, Mashreqbank, Sharjah Islamic PREVIOUSû53MûDEALûTHATûCLOSEDûINû!UGUSTû 'LOBALûDIVERSIlEDûNATURALûRESOURCEûCOMPANYû Bank, Standard Chartered Bank and Warba Bank 2017 and was coordinated by Mizuho. GLENCOREûHASûSIGNEDû53BNûOFûLOANSûTOû as the initial mandated lead arrangers and That loan paid 95bp over Euribor and RElNANCEûITSûEXISTINGûSHORT TERMûREVOLVINGû bookrunners. 100bp over Libor for the one-year euro and credit facilities. The loan is structured as a sharia- dollar tranches, respectively. The facilities replace Glencore’s existing compliant murabaha facility with a tenor of The state-owned borrower is rated Ba2/ 53BNûONE YEARûREVOLVINGûCREDITû ûDAYSûFROMûTHEûDATEûOFûlRSTûDRAWDOWNû "" û-OODYS&ITCH  facility agreed in May 2017. and a greenshoe option to increase its size. 4HEûlNANCINGûLAUNCHEDûATû53BNûANDû The facility will be denominated in US CLOSEDûOVERSUBSCRIBED ûRAISINGû53BNû dollars and euros and the proceeds will be UAE from the market after receiving strong used for general funding purposes and trade support from the company’s broad group of lNANCE DUBAI AEROSPACE TO RAISE US$400m existing banks. The borrower, established in 2015, is fully Due to a stronger commodity price owned and controlled by the government of State-controlled DUBAI AEROSPACE ENTERPRISE is environment, Glencore decided to increase the Republic of Turkey. RAISINGûAû53MûLOANûARRANGEDûBYûAhli the size of the facilities. Vakif Katilim is rated BB+ with stable Bank of Kuwait. The new facilities are unsecured and outlook by Fitch. DAE has become one of the world’s include a 12-month extension option and a largest aircraft lessors after acquiring 12-month borrower’s term-out option, ALBARAKA SEEKS US$210m MURABAHA Dublin-based AWAS last year. The EXTENDINGûTHEûlNALûMATURITYûOUTûTOû-AYû acquisition tripled the Dubai aircraft leasing 2020. ALBARAKA BANKûHASûLAUNCHEDûAû53Mû and maintenance company’s portfolio to 4HEûFACILITIESûHAVEûNOûlNANCIALûCOVENANTS day murabaha loan facility via a group of about 400 aircraft with a book value of more BNP Paribas, HSBC, MUFG and Santander UK seven banks. THANû53BN WEREûACTIVEûBOOKRUNNERSûONûTHEûlNANCINGû!û Arab Banking Corporation, Dubai Islamic Bank, The new loan, which is being syndicated total of 58 banks committed to the Emirates NBD Capital, Mashreqbank, Noor Bank, to banks, includes a revolving credit facility lNANCING ûINCLUDINGûûMANDATEDûLEADû Sharjah Islamic Bank and Standard Chartered and a working capital facility. It could be arrangers and bookrunners. Bank are arranging the facility. INCREASEDûTOû53M

International Financing Review March 31 2018 61 4HEûCOMPANYûISSUEDû53BNûLASTûYEARûINû A+/A2 rated GSK is being advised by GCP SIGNS £150m LOAN REFI senior bonds split across three tranches, to Citigroup, JP Morgan and Greenhill on the PART lNANCEûTHEû!7!3ûACQUISITIONû4HEû acquisition. Debt investor GCP INFRASTRUCTURE INVESTMENTS BONDSûINCLUDEDû53MûOFûûNOTESûDUEûINû The company will look at a range of has signed a £150m revolving credit facility  û53MûMILLIONûOFûûBONDSûDUEûINû DIFFERENTûFUNDINGûSOURCESûTOûlNANCEûTHEû to replace a maturing £90m facility. ûANDû53BNûOFûûBONDSûDUEûINû acquisition, including launching a strategic '#0ûUSESûTHEûREVOLVERûTOûlNANCEû review of its Horlicks range and other investments. NMC RAISES US$2bn LOAN consumer nutrition products that could be 4HEûlNANCING ûWHICHûISûSUBSTANTIALLYû used to support the funding of the drawn, comprises a £125m facility maturing Healthcare provider NMC HEALTH has raised a acquisition. on March 27, 2021 and a £25m facility 53BNûLOANûFORûGENERALûCORPORATEûPURPOSESû The review also includes GSK’s 72.5% maturing on March 27 2019. ANDûPARTLYûTOûRElNANCEûEXISTINGûDEBT shareholding in its Indian subsidiary, Royal Bank of Scotland and ING are providing The fundraising was provided by a GlaxoSmithKline Consumer Healthcare, THEûlNANCING consortium of banks including Citigroup, JP as it seeks an increased focus on GCP amended its revolver in November Morgan and Standard Chartered. over-the-counter and oral health 2017 via Royal Bank of Scotland, increasing London-listed NMC said earlier this categories. the facility to £90m from £75m. month that it planned acquisitions this year The majority of Horlicks and other The facility paid 225bp over Libor. WORTHûUPûTOû53M ûASûITûLOOKSûFORûGROWTHû nutrition products sales are generated in opportunities in Dubai, Oman and Saudi India, with combined sales of around £550m RESTORE AGREES £160m LOAN !RABIAû,ASTûYEAR û.-#ûSPENTû53MûINû in 2017. acquisitions. !TûTHEûENDûOFû û'3+ûHADûaBNûOFûlVE Business support company RESTORE is The healthcare sector in the Gulf is YEARûCOMMITTEDûFACILITIESûANDû53BNûOFû backing its £88m acquisition of records growing partly because of an increasingly  DAYûCOMMITTEDûFACILITIESû4HEûlVE YEARû MANAGEMENTûlRMû4.4û"USINESSû3OLUTIONSû wealthy population becoming more committed facilities were agreed in with £160m of new debt facilities. susceptible to lifestyle diseases, such as September 2015 and were extended by one 4HEûlNANCINGûCOMPRISESûAûaMû diabetes and obesity. year to 2021 in September 2016. The 364-day revolving credit facility with an additional 4HEûNEWûLOANûINCLUDESûTHEûRElNANCINGûOFû committed facilities were agreed in August £30m accordion facility. ANûEXISTINGûFACILITYûOFûMOREûTHANû53BNûANDû 2017. Barclays, Royal Bank of Scotland, Lloyds Bank a bridge loan for the remainder. The facilities remained undrawn at the and Bank of Ireland are providing the loan. It will provide some extra headroom for end of 2017. The acquisition will also be funded the company in the medium and longer- The company has a £15bn European through an up to £51.5m share placing. term for potential acquisitions, but there is medium-term note programme, with £9bn 2ESTOREûAGREEDûAûaMûlVE YEARûLOANûINû no imminent acquisition plan. in issue at the end of 2017. GSK also had November 2017 via Royal Bank of Scotland Last year it signed two syndicated 53BNûOFûBONDSû4HEûCOMPANYSû and Barclays. FACILITIES ûAûlVE YEARû53MûLOANûANDûAû borrowings mature between 2018 and 2045. 4HATûlNANCINGûCOMPRISEDûANûaMûTERMû SEVEN YEARû53MûLOAN loan and a £30m revolver and paid a margin NMC, which operates or manages more JD SPORTS TAPS FOR FINISH LINE BUY of between 185bp and 210bp over Libor, than 125 healthcare facilities in 13 depending on leverage. countries, was included in the FTSE 100 Sportswear retailer JD SPORTS is lining up a index last year. aMûLOANûlNANCINGûAHEADûOFûITSûAROUNDû 53MûACQUISITIONûOFû53ûATHLETICûFOOTWEARû retailer Finish Line. UK 4HEûlNANCINGûCOMPRISESûAûaMû NORTH AMERICA revolving credit facility and a £25m ancillary GSK TAPS FOR US$13bn TAKEOVER sub-facility. The RCF, which will replace JD’s existing UNITED STATES GLAXOSMITHKLINE has lined up a committed £215m RCF, has been jointly underwritten lNANCINGûBACKINGûITSû53BNûBUYOUTûOFû by Barclays and HSBC. GM MARKETS US$16.5bn LOANS Novartis’s 36.5% stake in its consumer *$ûWILLûUSEû53M EQUIVALENTûOFûTHEû healthcare joint venture. NEWû2#&ûTOûPART lNANCEûTHEûACQUISITION û GENERAL MOTORS is in the market with The acquisition is expected to be WHICHûWILLûALSOûBEûFUNDEDûTHROUGHû53Mû 53BNûINûSENIORûUNSECUREDûLOANS ûLEDûBYû completed in summer. FROMûAûNEWû53MûASSET BASEDûLENDINGû JP Morgan and Citigroup. The move comes just days after GSK facility at Finish Line that will be provided The revolving credit facilities comprise a PULLEDûOUTûOFûTHEûBIDDINGûFORû0lZERSû by PNC Bank. 53BNûTHREE YEARûMULTICURRENCYûTRANCHE ûAû consumer healthcare business. &INISHû,INESûEXISTINGû53Mû2#&ûWILLû 53BNûlVE YEARûMULTICURRENCYûTRANCHEû The joint venture was formed in 2014 as be terminated on completion of the ANDûAû53BNû DAYûTRANCHE part of a three-part transaction between GSK acquisition. Pricing is linked to ratings. and Novartis. Under the joint venture JD’s previous RCF was arranged in For A/A2/A the three-year pays a margin of Novartis had the right to require GSK to September 2015 via Barclays, HSBC, Lloyds BPûOVERû,IBORûANDûAûBPûFACILITYûFEEûTHEû purchase all or part of its stake from March and Royal Bank of Scotland. lVE YEARûPAYSûBPûANDûBPûANDûTHEû 2 2018 to March 2 2035. 4HATûlNANCING ûWHICHûPAIDûBPûOVERû day pays 77.5bp and 2.5bp. The acquisition will remove the Libor, was largely unused as the company’s For A-/A3/A- the three-year pays a margin uncertainty that this put option created and working capital, capital expenditure and OFûBPûOVERû,IBORûANDûAûBPûFACILITYûFEEû improves GSK’s ability to plan allocation of OTHERûCASHûCOSTSûHAVEûBEENûlNANCEDûFROMû THEûlVE YEARûPAYSûBPûANDûBPûANDûTHEû capital to its other priorities. cash reserves. 364-day pays 95bp and 5bp.

62 International Financing Review March 31 2018 LOANS NORTH AMERICA

For BBB+/Baa1/BBB+ the three-year pays a General Dynamics said that Wells Fargo Joint bookrunners and joint lead margin of 102.5bp over Libor and a 10bp also replaced JP Morgan after it resigned as arrangers are JP Morgan (which is also FACILITYûFEEûTHEûlVE YEARûPAYSûBPûANDû administrative agent on the company’s ADMINISTRATIVEûAGENT ûBank of America Merrill BPûANDûTHEû DAYûPAYSûBPûANDûBP EXISTINGûlVE YEARûCREDITûAGREEMENT ûWHICHû Lynch, MUFG, Citigroup and US Bank (which are For BBB/Baa2/BBB the three-year pays a PROVIDESûFORûAû53BNûSYNDICATEDûlVE YEARû SYNDICATIONûAGENTS  margin of 110bp over Libor and a 15bp multicurrency revolver that replaces a Goldman Sachs, Wells Fargo, HSBC and FACILITYûFEEûTHEûlVE YEARûPAYSûBPûANDû 53BNûlVE YEARûFACILITYûTHATûWASûSETûTOû Deutsche Bank are documentation agents. BPûANDûTHEû DAYûPAYSûBPûANDû expire in July 2018. General Dynamics said it The company completed the placement 12.5bp. plans to use this facility, along with an OFû53MûOFûBONDSûONû-ONDAYû4HEû For BBB-/Baa3/BBB- the three-year pays a EXISTINGû53BNûLOANûTHATûMATURESûINû û privately placed bonds comprise margin of 130bp over Libor and a 20bp to backstop commercial paper issuance. 53MûOFûûSENIORûBONDSûDUEûINû FACILITYûFEEûTHEûlVE YEARûPAYSûBPûANDû ûANDû53MûOFûûSENIORûBONDSû BPûANDûTHEû DAYûPAYSûBPûANDû REGENCY UPS RCF TO US$1.25bn due in 2028. 17.5bp. For BB+/Ba1/BB+ the three-year pays a REGENCY CENTERS CORP amended its existing DANAHER TAKES US$1bn RCF margin of 150bp over Libor and a 25bp unsecured revolving credit facility to FACILITYûFEEûTHEûlVE YEARûPAYSûBPûANDû INCREASEûTHEûSIZEûTOû53BNûFROMû53BNû Conglomerate DANAHERûHASûAGREEDûAû53BNû BPûANDûTHEû DAYûPAYSûBPûANDû and extend the maturity to March 23 2022. 364-day revolving credit facility with Bank of 22.5bp. The maturity can be extended for two America Merrill Lynch as administrative agent. For BB+/Ba1/BB+ or lower the three-year additional six-month periods. The facility expires on March 22 2019 and pays a margin of 170bp over Libor and a Borrowings will be made at 87.5bp over proceeds will be used for general corporate BPûFACILITYûFEEûTHEûlVE YEARûPAYSûBPû Libor, reduced from 92.5bp under the purposes. ANDûBPûANDûTHEû DAYûPAYSûBPû previous facility, based on a ratings grid. Pricing opens at 81.5bp over Libor with a and 27.5bp. There will be a 15bp annual facility fee. facility fee of 6bp, for all-in drawn pricing of 4HEûTHREE YEARûANDûlVE YEARûLOANSûAREû Wells Fargo and PNC are joint bookrunners 87.5bp. slated to extend maturities of existing loans and lead arrangers of the facility. Danaher is rated A2 by Moody’s and A by THEûCOMPANYûRElNANCEDûINûû4HEû Regency owns, operates and develops S&P. day is a new tranche. shopping centres. Lenders are BAML, MUFG, Barclays, BNP Pricing is the BBB/Baa2/BBB level in line The company is rated Baa2 by Moody’s Paribas, Citigroup, Commerzbank, Credit Suisse, with the credit facility rating. The loans are and BBB+ by S&P. Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, expected to remain undrawn. #OMMITMENTSûAREû53MûEACHûFORû Lloyds Bank, Mizuho, PNC, Royal Bank of Canada, Upfront fees are 6bp on old money and 7ELLSû&ARGOûANDû0.#û53MûEACHûFORûUS Standard Chartered, US Bank and Wells Fargo. 18bp on new money on both the three-year Bank, SunTrust and Regions Bankû53MûFORû ANDûlVE YEAR ûANDûBPûONûTHEû DAY Bank of America Merrill Lynch,JP Morgan and DOMINION ENERGY WRAPS RCF Mizuhoû53MûEACHûFORûBMO, BB&T, WELLS REPLACES JPM ON GENERAL Sumitomo Mitsui and TDûANDû53MûFORû Power producer DOMINION ENERGY amended DYNAMICS Comerica. and extended its revolving credit facility, INCREASINGûCOMMITMENTSûBYû53BNûTOû Wells Fargo has replaced JP Morgan as PENTAIR SPIN-OFF GETS US$800m 53BNûANDûPUSHINGûOUTûTHEûMATURITYûBYû administrative agent for GENERAL DYNAMICS’ three years. 53BNû DAYûREVOLVINGûCREDITûFACILITYû Industrial equipment manufacturer JP Morgan is administrative agent for the after JPM resigned from the role. PENTAIR’s electrical business NVENT has agreed loan that now matures in March 2023 General Dynamics’ loan is used for ANû53MûLOANûlNANCINGûAHEADûOFûITSû instead of April 2020. general corporate purposes, including the spin-off. Dominion Energy, Virginia Electric and COMPANYSûPLANNEDûMERGERûWITHû)4ûlRMû 4HEûlVE YEARûlNANCINGûCOMPRISESûAû Power, Dominion Energy Gas Holdings and CSRA. The defence contractor raised its all- 53MûREVOLVINGûCREDITûFACILITYûANDûAû Questar Gas are the borrowers. cash offer for CSRA on March 20 to 53MûTERMûLOAN 53BNûFROMû53BN Pricing is based on a leverage grid. AMERICAS LOANS BOOKRUNNERS – FULLY The increase thwarted a rival offer for For 0.5 times the term loan margin is SYNDICATED VOLUME CSRA from defence contractor CACI, which 100bp, the facility fee is 10bp and the RCF BOOKRUNNERS: 1/1/2018 TO DATE withdrew its offer on Wednesday. JP Morgan pays 90bp. For 0.5-1.0 times the term loan Managing No of Total Share WASûACTINGûASû#!#)SûLEADûlNANCIALûADVISER pays 112.5bp, the facility fee is 12.5bp and bank or group issues US$(m) (%) Prior to the resignation, JP Morgan along the RCF pays 100bp. For 1.0-1.75 times the 1 BAML 272 80,347.36 13.2 with Wells Fargo, Bank of America Merrill term loan pays 125bp, the facility fee is 15bp 2 JP Morgan 226 68,749.50 11.3 Lynch and RBC were joint lead arrangers and the RCF pays 110bp. For 1.75-2.5 times 3 Wells Fargo 192 44,808.44 7.4 and joint bookrunners. the term loan pays 137.5bp, the facility fee 4 Citigroup 117 40,225.65 6.6 The 364-day credit agreement for General is 17.5bp and the RCF pays 120bp. For over 5 Morgan Stanley 69 27,622.14 4.5 Dynamics remains on track, the company 2.5 times the term loan pays 175bp, the 6 MUFG 46 26,352.43 4.3 said. facility fee is 25bp and the RCF pays 150bp. 7 Barclays 96 26,109.77 4.3 The company also said that the maximum After the separation of the two 8 RBC 92 23,487.66 3.9 unsecured short-term promissory notes companies, nVent will have the option to 9 Credit Suisse 88 23,426.10 3.8 allowed under its commercial paper INCREASEûTHEûREVOLVERûBYûUPûTOû53Mû4HEû 10 Goldman Sachs 84 21,802.36 3.6 PROGRAMMEûWASûINCREASEDûTOû53BNûFROMû COMPANYûEXPECTSûTOûHAVEû53MûOFû Total 904 608,706.37 53BN ûANDûTHEûMAXIMUMûMATURITYûWASû borrowing under the term loan and no Proportional credit extended to 397 days from 370 days. borrowing under the revolver on separation. Source: Thomson Reuters SDC code: R7

International Financing Review March 31 2018 63 JP Morgan, Mizuho, Bank of America Merrill BPûANDûBPûFORû! !ûITûISûBPûANDûBPû Consilio is a provider of electronic Lynch, Bank of Nova Scotia and Wells Fargo are FORû!!ûITûISûBPûANDûBPûFORû! !ûITûISû information discovery, document review, joint lead arrangers and joint bookrunners. BPûANDûBPûANDûFORû""" "AAûITûISû and legal consulting services. Advanced Dominion Energy is rated Baa2 by 125bp and 15bp. Discovery is a provider of eDiscovery and Moody’s and BBB+ by S&P. risk management. Pricing is linked to ratings. For A+/A1 the VERIZON INCREASES RCF Advanced Discovery is expected to close margin is 80bp over Libor with a 7.5bp in late March 2018 with Consilio and the FACILITYûFEEûFORû!!ûITûISûBPûANDûBPûFORû VERIZON COMMUNICATIONS has increased its subsequent merger expected to close in the ! !ûITûISûBPûANDûBPûFORû""" "AAû REVOLVINGûCREDITûBYû53MûTOû53BN second quarter of 2018. ITûISûBPûANDûBPûFORû""""AAûITûISû JP Morgan led the deal. INTERNATIONAL CAR WASH GROUP set guidance BPûANDûBPûANDûFORû""" "AAûITûISû The company also extended the maturity ONûTHEûREPRICINGûOFûITSû53MûTERMûLOANû"û 147.5bp and 27.5bp. date on the four-year facility to 2022 from DUEûINû/CTOBERûûANDû53MûFUNGIBLEû Other lenders are MUFG, Credit Suisse, US 2020. add-on. Bank, Barclays, BNP Paribas, Citigroup, Deutsche Pricing is 8bp undrawn and 100bp drawn, Goldman Sachs leads with Barclays, Jefferies Bank, Goldman Sachs, Morgan Stanley, Morgan based on a ratings grid. and Credit Suisse. Stanley Senior Funding, RBC, Sumitomo Mitsui, For A2/A the margin is 75bp over Libor The entire tranche is guided at 325bp over SunTrust, TD, KeyBank, BB&T and PNC. WITHûAûBPûCOMMITMENTûFEEûFORû!! ûITûISû ,IBORûWITHûAûûmOORû4HEûEXISTINGûLOANûPAYSû BPûANDûBPûFORû"AA""" ûITûISûBPû BPûOVERû,IBORûWITHûAûûmOOR CME TAPS FOR NEX BUY ANDûBPûANDûFORûLOWERûTHANû"AA""" ûITûISû The repricing is offered at par, while the 125bp and 12.5bp. add-on is offered at a 99.75 discount. Exchange operator CME GROUP is backing its As of December 31 2017, Verizon had Lenders will receive a six-month 101 soft cash and shares acquisition of Britain’s NEX APPROXIMATELYû53BNûOFûOUTSTANDINGû call refresher. Group for around £3.9bn with a £1.58bn UNSECUREDûDEBT ûASûWELLûASûROUGHLYû53BNû International Car Wash in September 364-day bridge loan. of unused borrowing capacity under its 2017 placed the existing term loan B and a The bridge loan will be used along with existing revolving credit. 53MûSECOND LIENûTERMûLOANûDUEûINûû BALANCEûSHEETûCASHûTOûlNANCEûTHEûCASHû to back its leveraged buyout by Roark consideration of the offer. Capital Group. JP Morgan and Barclays are joint Proceeds from the add-on will be used to bookrunners and joint lead arrangers. JP repay revolver borrowings and pay related Morgan is administrative agent while LEVERAGED LOANS fees and expenses. Barclays is syndication agent. In addition to the repricing, the The unsecured loan pays a commitment AMENDMENTûSEEKSûTOûREFRESHûTHEû53Mû fee and margin based on a ratings grid. UNITED STATES free and clear incremental basket and reset For AA/Aa2 the margin is 75bp over Libor the leverage cap governing unlimited ANDûTHEûCOMMITMENTûFEEûISûBPûFORû!! !Aû GI FACILITY IN MARKET incremental capacity from 0.25 times inside the margin is 87.5bp and the commitment ,"/ûCLOSINGûLEVERAGEûTOûAûNETûlRST LIENûANDû FEEûISûBPûFORû! !ûITûISûBPûANDûBPû ')û0ARTNERS ûAûPRIVATEûINVESTMENTûlRM ûISû net secured leverage ratio. FORû!!ûITûISûBPûANDûBPûANDûFORû!  MARKETINGûAû53MûlRSTûANDû Existing ratings are B2/B corporate and A3 it is 125bp and 20bp. second-lien credit facility that funds the ""ûlRST LIEN A duration fee of 50bp is due 90 days after acquisition and subsequent combination Workforce management and human closing, 75bp due 180 days after closing, and of two businesses, CONSILIO and ADVANCED resources information software company 100bp due 270 days after closing. DISCOVERY. CERIDIAN HCM is in the market with a There is a 12.5bp structuring fee, and 4HEûDEALûCOMPRISESûAû5MûlVE YEARû 53MûTERMûLOANû"ûBACKINGûAûRElNANCING underwriting fees of 10bp due on the REVOLVER ûAû53MûSEVEN YEARûlRST LIENû Deutsche Bank leads the covenant-lite effective date and 10bp of the outstanding TERMûLOANûANDûAû53MûEIGHT YEARûSECOND seven-year term loan, which is guided at amount of the commitment due on the lien term loan. BP BPûOVERû,IBORûWITHûAûûmOORûANDû earlier of 90 days after the effective date or 4HEûlRST LIENûTERMûLOANûISûGUIDEDûATûAû 99.5 discount. the closing date. range of 450bp-475bp over Libor with a 0% Lenders will receive six months of 101 Under the terms of the offer NEX mOORû4HEûLOANûISûOFFEREDûTOûINVESTORSûATûAû soft call protection. shareholders will be offered 500p in cash 99.5 OID. 4HEûlNANCINGûWILLûINCLUDEûAû53Mû and 0.0444 new CME shares. The second-lien term loan is guided at a revolving credit facility. The proposed acquisition has been range of 850bp-875bp over Libor with a 0% #ERIDIANû(#-ûONû-ARCHûûlLEDûFORûANû approved unanimously by the board of mOORû4HEûLOANûISûEXPECTEDûTOûBEûISSUEDûATûAû )0/ûOFûUPûTOû53Mû4HEûCOMPANYûPLANSû directors of both companies and is expected discount of 99. to use proceeds to repay a portion of its debt to close in the second half of 2018. 4HEûlRST LIENûLOANûWILLûHAVEûûSOFTûCALLû and for general corporate purposes. protection for six months, while the second- Ratings are expected at B2/B in BLACKROCK NETS US$4bn EXTENSION lien tranche will have hard call protection at conjunction with the pricing of the 102, 101. company’s IPO. BLACKROCK FINANCIALûHASûAGREEDûAûRElNANCINGû Jefferies is leading with SunTrust, Goldman OFûITSû53BNûlVE YEARûLOAN Sachs and KKR. GI Revelation Acquisition LLC SBA MARKETS US$2.2bn TLB The Wells Fargo-led deal extends the deal is the borrower. by one year to 2023. It pays 6bp undrawn. GI Partners said on March 21 that it would Wireless infrastructure provider SBA Pricing is linked to ratings. acquire the two businesses and COMMUNICATIONS is in the market with a For AA/Aa2 the margin is 62.5bp and the subsequently combine Consilio and 53BNûTERMûLOANû"ûTHATûWILLûBEûUSEDûFORû COMMITMENTûFEEûISûBPûFORû!! !AûITûISû Advanced Discovery into a single company. RElNANCING

64 International Financing Review March 31 2018 LOANS LEVERAGED LOANS

TD Securities leads with Mizuho Securities. Pricing on the dollar tranche is 300bp Morgan Stanley, Citigroup, Goldman Sachs Barclays, Citigroup, Deutsche Bank, JP Morgan OVERû,IBORûWITHûûmOOR ûWHILEûTHEûEUROû and JP Morgan led the deal. and Wells Fargo are joint bookrunners. tranche is at 325bp over Euribor with a 0% Technology product provider CDWûSETûlNALû The seven-year term loan is guided at mOORû"OTHûHAVEûAûûDISCOUNT TERMSûONûAû53BNûREPRICING BP BPûOVERû,IBORûWITHûAûûmOORûANDû The tranches include six months of soft The term loan pays 175bp over Libor with 99.75 discount. call protection at 101. The MFN sunset has AûûmOOR ûATûPARû)TûHASûûSOFTûCALLû 4HEûlNANCINGûINCLUDESûAû53BNûlVE been removed. protection for six months. year revolving credit facility. 4HEûlNANCINGûINCLUDESûAû53Mû Morgan Stanley, Barclays, JP Morgan, Bank of 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûTHEû revolving credit facility due in 2023. America Merrill Lynch, Wells Fargo, MUFG, company’s term loans B1 and B2 and Ratings are B2/B+ corporate and facility. Capital One, Goldman Sachs, RBC Capital Markets borrowings under the revolving credit facility. and US Bank ARRANGEDûTHEûlNANCING Existing ratings are B1/BB- corporate and LEGALSHIELD SET TO LAUNCH Corporate ratings are Ba2/BB+, while B1/BB facility. facility ratings are Ba1/BBB-. %DUCATIONALûSERVICESûlRMûADTALEM GLOBAL Legal service provider LEGALSHIELD will EDUCATION set price talk on its covenant-lite LAUNCHûONû4UESDAYûAû53MûSENIORûLOANû EMPLOYBRIDGE MARKETS REFI 53MûTERMûLOANû"ûBACKINGûAûRElNANCING that funds the company’s sale to Stone Point Bank of America Merrill Lynch leads with Capital from MidOcean Partners. EMPLOYBRIDGEûISûMARKETINGûAû53Mû BMO, Northern Trust and Fifth Third. RBC Capital Markets leads the funding with COVENANT LITEûLOANûTHATûWILLûRElNANCEû The seven-year loan is guided at 300bp SunTrust, KKR Capital Markets, Capital One and existing debt. OVERû,IBORûWITHûAûûmOORûANDûû/)$ BMO Capital Markets. Credit Suisse, Goldman Sachs, RBC, Citizens, Lenders are offered six months of soft call 4HEûDEALûCOMPRISESûAû53MûREVOLVER ûAû Morgan Stanley, SunTrust and Wells Fargo are protection at 101. 53MûlRST LIENûTERMûLOANûANDûAû arranging the seven-year loan, which is Ratings are Ba3/BB corporate and Ba3/BB+ 53MûSECOND LIENûTERMûLOAN expected to price at 500bp-525bp over Libor facility. MidOcean, which purchased LegalShield WITHûAûû,IBORûmOORûANDûûISSUEûPRICE 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûEXISTINGû in 2011, will retain a minority stake in the There will be 101 soft call protection for revolver borrowings and fund cash to the business. six months. balance sheet for general corporate Industrial and automotive paint maker Corporate ratings are B2/B- and facility purposes. AXALTA COATING SYSTEMSûLAUNCHEDûAû53BNû ratings are B3/B-. Dental care provider ASPEN DENTAL TERMûLOANû"ûREPRICINGûANDûAû53Mû EmployBridge was created in the 1990s by MANAGEMENT has set price guidance on the add-on term loan. COMBININGûSEVERALûSTAFlNGûORGANISATIONS û TERMûLOANûPORTIONûOFûAû53MûRElNANCINGû Price guidance is set at 175bp over Libor and has more than 490 locations throughout credit facility. WITHûAûûmOORû4HEûISSUEûPRICEûISûEXPECTEDûATû the US. 4HEûDEALûCOMPRISESûAû53MûlVE YEARû a range of 99.75-par. The transaction also Snack maker SHEARER’S FOODS is in market REVOLVINGûCREDITûANDûAû53MûSEVEN YEARû resets 101 soft call protection for six WITHûAûDEALûTHATûINCLUDESûAû53Mû term loan B. months. incremental term loan as well as the The term loan is guided at 325bp over Proceeds will be used to reprice the REPRICINGûOFûANûEXISTINGûROUGHLYû53Mû ,IBORûWITHûAûûmOORû4HEREûISûALSOûEXPECTEDû company’s existing US dollar-based term lRST LIENûTERMûLOAN to be one stepdown. LOANû"ûANDûTOûRElNANCEûITSûEXISTINGûõMû The incremental loan is guided at 425bp The covenant-lite loan is offered at a 99.5 term loan B due 2023. OVERû,IBORûWITHûAûûmOOR ûOFFEREDûATûAûû OID and has 101 soft call protection for six The repriced loan and the add-on will OID. months. mature on June 1 2024. Proceeds from the incremental loan will be RBC Capital Markets, Credit Suisse, BMO, Barclays is lead left on the deal, joined by USEDûTOûREPAYû53MûOFûEXISTINGûSENIORûNOTES Deutsche Bank and JP Morgan are joint lead Deutsche Bank. Shearer’s is also looking to reprice the arrangers. Healthcare data analytics company existing tranche to the same level, but the Canadian gaming and online gambling INOVALON HOLDINGS has increased pricing on a loan is offered at par. Existing pricing is company THE STARS GROUPûHASûlNALISEDûTERMSû 53BNûLOANûBACKINGûAûPORTIONûOFûITSû approximately 393bp over Libor with a 1% for the repricing and maturity extension of 53BNûACQUISITIONûOFû!BILITYû.ETWORK ûANû mOOR ITSûEXISTINGûCOVENANT LITEûDUAL CURRENCYûlRST IT provider. lien term loan due in 2021 and 4HEûDEALûCOMPRISESûAû53MûlVE YEARû US LEVERAGED LOANS 53M EQUIVALENTûADD ONûTOûTHEûFACILITY REVOLVERûANDûAû53MûSEVEN YEARûTERMû BOOKRUNNERS: 1/1/2018 TO DATE Deutsche Bank led with Macquarie, Barclays loan B. Managing No of Total Share and BMO. 0RICINGûFORûBOTHûTRANCHESûmEXEDûUPûDURINGû bank or group issues US$(m) (%) The company asked lenders to extend the syndication to 350bp over Libor with a 0% 1 BAML 155 35,086.76 12.6 loan’s maturity to 2025 from 2021. mOORûFROMûGUIDANCEûOFûBP BPû4HEû 2 JP Morgan 128 29,174.43 10.5 4HEûDOLLARûTRANCHEûNOWûTOTALSû53BNû term loan B is at 98.5 versus 99.5 proposed 3 Credit Suisse 82 21,240.57 7.6 VERSUSû53BNûATûLAUNCHûPROûFORMAûANû at launch. 4 Wells Fargo 98 17,248.27 6.2 amortisation payment. It will be increased Soft call protection was extended to 12 5 Barclays 75 16,459.02 5.9 BYû53MûINSTEADûOFûTHEûPROPOSEDû months from six months. 6 Citigroup 62 16,409.34 5.9 53MûUPSIZEûATûLAUNCH ûTOû53BN The term loan, which is covenant-lite, will 7 Goldman Sachs 74 16,067.00 5.8 The euro tranche now totals €381m amortise at 1% annually, in line with launch 8 Deutsche Bank 74 14,614.05 5.2 VERSUSû53M EQUIVALENTûATûLAUNCHûPROû terms. The revolver has a springing leverage 9 Morgan Stanley 59 11,416.28 4.1 forma an amortisation payment. It will be covenant. 10 RBC 51 9,869.45 3.5 increased by €119m instead of the proposed 0ROCEEDSûWILLûALSOûBEûUSEDûTOûRElNANCEû Total 501 278,636.07 53M EQUIVALENTûUPSIZEûATûLAUNCH ûTOû Inovalon and Ability debt and pay related Excluding Project Finance. €500m. fees and costs. Source: Thomson Reuters SDC code: P2

International Financing Review March 31 2018 65 JP Morgan led the seven-year loan, which WASûINCREASEDûBYû53MûTOû53M J&J diabetes care unit bid Pricing was tightened to 275bp over Libor WITHûAûûmOOR ûVERSUSûOPENINGûGUIDANCEûOFû BP BPûWITHûAûûmOOR prompts loans The tranche was issued at 99.75, tight to the 99.5 discount initially offered. „ US BAML is providing US$1.875bn of loans Lenders will receive six months of soft call protection at 101. Private equity firm Platinum Equity’s US$2.1bn competition. The unit has also faced challenges 4HEûlNANCINGûINCLUDESûAûlVE YEARû offer to acquire blood glucose monitoring securing rights to newer technology. 53MûREVOLVINGûCREDITûFACILITYûANDûAû systems maker LifeScan from US health care Due to declining Ebitda, the debt underwriting second-lien term loan. The second-lien products company Johnson & Johnson is backed process centred around an absolute debt tranche, which was not broadly syndicated, by US$1.875bn of loans. amount rather than a debt-to-Ebitda multiple, WASûCUTûBYû53MûTOû53M J&J has been evaluating strategic options the more typical factor in leveraged lending. PPC Partners is acquiring CH Guenther for for the troubled unit since January 2017 amid The Ebitda figure that will be used to market APPROXIMATELYû53BNû#APITALISATIONûWILLû falling sales, as well as its other diabetes care the deal has not been solidified. The metric INCLUDEû53MûOFûEQUITY businesses that include insulin pumps maker ranges between US$450m-S$600m depending 2ATINGSûAREû""ûCORPORATEûANDûlRST LIEN Animas and wearable insulin pumps maker on whether it is calculated on a last 12-months’, Infrastructure software company ROCKET Calibra Medical. The company said in October full-year 2017/2018, or trough basis. SOFTWARESû53MûTERMûLOANûREPRICINGû it would close down Animas after failing to find Leverage would be 3.9 times and 2.9 times at ANDûANû53MûINCREMENTALûLOANûlRMEDûATû a buyer. the low and high end of that range, respectively. the narrow end of a guided range. Credit Bank of America Merrill Lynch is providing the The timing of the syndication of the debt is Suisse was sole lead. entire debt commitment to Platinum Equity also fluid, as the closing process is likely to be Pricing on both tranches is 375bp over initially but will carve out a portion to other protracted due to regulatory concerns, and the ,IBORûWITHûAûûmOOR ûTHEûTIGHTûENDûOFûBP banks. The carve-out could be as high as 60%. new owner may seek to avoid paying ticking fees. 400bp guidance. The previous spread on the The debt will be split between a US$1.4bn Assuming the offer is accepted, closing is existing loan was 425bp over Libor. secured term loan with a first priority claim and expected by year-end, according to a J&J’s press There is no discount on the existing loan, a US$350m secured term loan with a second release. while the new money sold at 99.75. Initially priority claim. Platinum said on March 16 it had submitted the new money was offered at a 99.5 The financing includes a US$125m revolving a binding offer to acquire LifeScan for discount. credit facility that will be undrawn at close. approximately US$2.1bn. It has given J&J until The transaction also resets 101 soft call for June 15 to accept the offer, and to allow for six months. LIFELINE consultations with work councils that represent Proceeds from the loans will be used to LifeScan’s performance in recent years has employees. REPRICEûEXISTINGûlRST LIENûTERMûDEBTûANDû been hurt by pricing pressure stemming from Andrew Berlin lNANCEûTUCK INûACQUISITIONS Both the existing loan and the incremental will mature in October 2023. The new add-on and the existing term 4HEûTERMûLOANû"ûCOMPRISESûAû53Mû Global asset manager RUSSELL INVESTMENTS loan will be combined with an additional tranche and a €350m piece that was SEALEDûAû53MûlRST LIENûTERMûLOANû"û 53MûlRST LIENûTERMûLOANûTOûCREATEûAû increased by €50m. repricing. SINGLEû53MûTERMûLOANûTRANCHEû4HATû The €350m TLB priced at 200bp over 0RICINGûlNALISEDûATûBPûOVERû,IBORûWITHû loan is already priced at 425bp over Libor Euribor at 99.875 OID. It originally launched AûûmOORûATûPAR ûTHEûTIGHTûENDûOFûBP WITHûAûûmOOR ATûBP BPûATûû/)$û!ûûmOORû 350bp guidance. The combined tranche will be due June 30 was unchanged. The deal, which matures on June 1 2023, 2021 and will have six months of 101 soft The increase in the euro TLB means refreshed soft call protection of 101 for six call protection. Chemours will use less cash from the months. Antares Capital leads the deal, with Golub balance sheet as part of the deal. Originally, Barclays led with Macquarie and Credit Capital as joint lead arranger. THEûDEALûHADûINCLUDEDû53MûOFûCASHûFROMû Suisse. Shearer’s is a portfolio company of the balance sheet. Ontario Teachers’ Pension Plan. 4HEû53Mû4,"ûPRICEDûATûBPûOVERû MCDERMOTT UPS TERM LOAN US SILICA has received debt commitments Libor after launching at 175bp-200bp, with a from BNP Paribas and Barclays to back its all- ûmOORûATûû/)$ %NGINEERINGûlRMûMCDERMOTT INTERNATIONAL cash acquisition of EP Minerals. The facilities have ratings of Baa3/BBB-, HASûINCREASEDûBYû53MûTOû53BNûTHEû US Silica is buying EP Minerals for largely explaining the tight spreads on offer SIZEûOFûAûlRST LIENûTERMûLOANûTHATûRElNANCESû 53M even in today’s market. Corporate ratings existing debt. 4HEûlNANCINGûWILLûINCLUDEûAû53BNû are Ba2/BB. The increase comes alongside the SEVEN YEARûTERMûLOANû"ûANDûAû53Mû There is six months of soft call protection downsizing of a high-yield bond offering. revolving credit facility. at 101 on the loans, with a cashless roll McDermott cancelled the longer-dated offered to existing investors. tranche of a planned two-part bond offering, CHEMOURS WRAPS CROSS-BORDER DEAL JP Morgan and Citigroup were bookrunners. REDUCINGûTHEûDEALSûTOTALûSIZEûTOû53BNû Frozen and seasoning products company FROMû53BNûSEEû4OPû.EWS Chemicals company CHEMOURS has wrapped CH GUENTHER has completed syndication of its The loan transaction, which will be used UPûAû53BN EQUIVALENTûRElNANCINGûAFTERû term loan B backing its acquisition by TOûRElNANCEûEXISTINGûDEBTûANDûCASHû making some changes to the deal. PRIVATEûEQUITYûlRMû00#û0ARTNERS collateralise letters of credit, and the bond

66 International Financing Review March 31 2018 LOANS LEVERAGED LOANS

deal come in conjunction with the The facility matures on April 6 2022. expected to be completed before the company’s acquisition of CB&I, a provider of Corporate family and facility ratings are transaction closes, and reset liquidity for technology and infrastructure for the B3/B. future acquisitions. energy industry. Hospital and outpatient care provider Existing ratings are B3/B corporate and Barclays was lead-left on the loan, joined SELECT MEDICAL CORP has wrapped up the ""ûlRST LIEN by Credit Agricole, Goldman Sachs, MUFG, ABN REPRICINGûOFûITSû53BNûTERMûLOANû" FILTRATION GROUPûWRAPPEDûAû53BN AMRO, RBC and Standard Chartered. JP Morgan led the transaction, which EQUIVALENTûlRST LIENûTERMûLOANûBACKINGûAû Pricing on the term loan is 500bp over PRICEDûATûBPûOVERû,IBORûWITHûAûûmOORû RElNANCINGûANDûTWOûACQUISITIONS ,IBORûWITHûAûûmOOR ûATûû4HEûSPREADûWASû and par offering price, versus initial Goldman Sachs co-led with JP Morgan. BMO increased and the OID was widened during GUIDANCEûOFûBP BPûWITHûAûûmOORûANDû and HSBC are co-managers. syndication, before the loan was upsized. par offering price. The seven-year term loan is structured as Initial guidance circulated at 400bp-425bp A one-year maturity extension was added Aû53BNûTRANCHEûWITHûAûõMûCARVE with a 99.5 OID. to the repricing amendment, so the loan out. During syndication, soft call protection at now matures in March 2025. Pricing on the dollar tranche was 101 was also extended to 12 months from Lenders receive six months of soft call tightened to 300bp over Libor with a 0% six months at launch. Among other changes protection at 101. mOOR ûFROMûOPENINGûGUIDANCEûOFûBP to the terms of the loan, a maximum total Existing ratings are B1/B+ corporate and BPûWITHûAûûmOORû)TûSOLDûATû ûVERSUSû leverage covenant was added and the excess Ba2/BB- facility. 99.5 originally. CASHmOWûSWEEPûWASûINCREASED Pricing on the euro tranche is 350bp over The loan has a seven-year springing WYNDHAM CUTS PRICING %URIBORûWITHûAûûmOOR ûTHEûTIGHTûENDûOFû maturity to six months inside the six-year opening guidance of 350bp-375bp with NOTESû0ROûFORMAûTHEûTRANSACTION ûNETûlRST WYNDHAM HOTELS & RESORTS lowered pricing on AûûmOORû)TûSOLDûATû ûVERSUSûû lien leverage is 0.8 time and net total THEû53BNûTERMûLOANûBACKINGûITSû originally. leverage is 1.8 times. purchase of peer La Quinta’s franchising Lenders will receive six months of soft call Corporate family ratings are Ba3/B+. and management business. protection at 101, as originally proposed. Secured debt ratings are Ba2/BB- and Bank of America Merrill Lynch led with The loan will amortise at 1% per year. unsecured debt ratings are B2/B-. Barclays, Deutsche Bank, Credit Suisse, Goldman Filtration Group is acquiring a company Medical company HEALTHCHANNELS Sachs, Wells Fargo, SunTrust, Scotia, MUFG and that will be folded into its Industrial increased pricing on the term loan portion US Bank. Technologies Group and Multisorb OFûITSû53MûLOAN Pricing on the seven-year covenant-lite 4ECHNOLOGIESûFORû53M ûACCORDINGûTOû 4HEûDEALûCOMPRISESûAû53MûlVE YEARû loan has been cut to 175bp over Libor with a Moody’s. REVOLVERûANDûAû53MûSEVEN YEARûTERMû ûmOOR ûFROMûBPûWITHûAûûmOORûATû Ratings are B2/B corporate and facility. loan. launch. The OID was tightened to par from The term loan is now priced at 450bp over 99.75. KBR SEALS US$800m TLB ,IBORûWITHûAûûmOORûCOMPAREDûWITHûINITIALû Lenders receive six months of soft call guidance of 400bp. The loan sold at a 99.5 protection at 101, as originally guided. Engineering, procurement and construction OID. A ticking fee of 50% of the spread will kick company KBRûHASûlNALISEDûPRICINGûFORûTHEû Instead of 101 soft call protection for six in 31 days following allocation, stepping up 53MûTERMûLOANû"ûTHATûWILLûINûPARTûBACKû months, the loan now has 101 hard call to 100% of the spread 61 days following its acquisition of Stinger Ghaffarian protection for 12 months. Additional lender- allocation until closing. Technologies and a joint venture. friendly changes were made to the loan Ratings are Ba1/BB+ corporate and Baa3/ Bank of America Merrill Lynch led the document. BBB- facility. covenant-lite seven-year loan, which priced Proceeds from the Jefferies-led loan will be Insurance brokerage ASSUREDPARTNERS ATûBPûOVERû,IBORûWITHûAûûmOORûFROMû USEDûTOûRElNANCEûEXISTINGûDEBTûANDûFUNDûAû lNALISEDûTERMSûFORûTHEûREPRICINGûOFûITSû opening guidance of 300bp-325bp with a 0% DISTRIBUTIONûTOûlNANCIALûSPONSORû6ESEYû 53BNûTERMûLOANû"ûANDû53Mû mOOR Street Capital Partners. add-on. It sold at a 99.5 discount with six months Internet infrastructure company INTERNAP BAML led with Barclays, JP Morgan, Morgan of 101 soft call protection, as originally CORPûSEALEDûAû53MûTERMûLOANûREPRICINGû Stanley, RBC and Macquarie. proposed. that was led by Jefferies. 0RICINGûONûTHEûENTIREû53BNûTRANCHEû Proceeds from the term loan, along with 4HEûlRST LIENûLOANûPRICEDûATûBPûOVERû WIDENEDûTOûBPûOVERû,IBORûWITHûAûûmOOR û THOSEûFROMûAûNEWû53MûlVE YEARûTERMû ,IBORûWITHûAûûmOOR ûATûPARû'UIDANCEûWASû compared with opening guidance of 300bp LOANû!ûANDû53MûREVOLVINGûCREDITû 550bp-575bp. WITHûAûûmOOR FACILITY ûWILLûBEûUSEDûTOûlNANCEûTHEûPURCHASEû The transaction also resets 101 soft call Pricing was previously 350bp with a 0% OFû3'4 ûRElNANCEûEXISTINGûREVOLVERû protection for six months. mOOR borrowings, fund KBR’s share in the Ichthys Last month, the company agreed a 4HEûOFFERINGûPRICEûlRMEDûATûPARûFORûBOTHû /NSHOREû,IQUIlEDû.ATURALû'ASûPROJECTûINû 53MûINCREMENTALûTERMûLOANûTHATû new and existing lenders, versus opening Australia, and for general corporate funded the company’s acquisition of guidance of 99.875-100 for existing lenders purposes. SingleHop. and 99.75-99.875 for new lenders. #OMMITTEDûlNANCINGûINCLUDESûAû53Mû The loan priced at 700bp over Libor with a The debt will mature in October 2024, in performance letter of credit. ûmOOR ûINûLINEûWITHûTHEûEXISTINGûSPREAD line with the existing term loan B4, and Ratings are B1/B+ corporate and facility. The add-on, which is fungible with the includes six months of soft call protection at TRAVELCLICKûHASûWRAPPEDûAû53MûlRST EXISTINGûTERMûLOAN ûBROUGHTûTHEûlRST LIENû 101. LIENûTERMûLOANûREPRICINGûANDûAû53Mû TRANCHEûSIZEûTOû53M Proceeds from the incremental will be incremental term loan. Soft call protection of 101 expires in April used to pay down borrowings under the The repriced loan was initially guided at 2018. revolving credit facility, fund acquisitions 53MûANDûTHEûADD ONûATû53M

International Financing Review March 31 2018 67 Both loans, due May 6 2021, are priced at existing bank debt and repays shareholder 4HEûlVE YEARûTERMûLOANû!ûTRANCHESûAREû BPûOVERû,IBORûWITHûAûû,IBORûmOORûATûPAR loans. NOWûSIZEDûATû53BNûANDû53BN A spread in the 325bp-350bp over Libor 4HEûDEALûCOMPRISESûAû53MûlVE YEARû equivalent in euros, compared with RANGEûANDûAûûmOORûWEREûEXPECTEDû4HEû REVOLVERûANDûAû53MûSEVEN YEARûTERMû 53BNûANDû53BN EQUIVALENTûINû existing loan was seen being offered at par loan that priced at 425bp over Libor with a euros originally. and the new money at a 99.75 original issue ûmOORûANDûûISSUEûPRICEûFROMûGUIDANCEû The seven-year dollar term loan B tranche discount. of 450bp. WASûINCREASEDûBYû53MûTOû53BN ûANDû There will be soft call protection at 101 There is also 101 soft call protection for THEûEUROûTRANCHEûCUTûFROMû53BN for six months. six months. EQUIVALENTûTOû53BN EQUIVALENT Credit Suisse led the deal, which will be Jefferies led with ABN AMRO and Rabobank. Pricing on the dollar term loan B is 225bp USEDûTOûREPRICEûTHEûCOMPANYSûEXISTINGûlRST Loparex manufactures silicone-coated OVERû,IBORûWITHûAûûmOOR ûCOMPAREDûWITHû lien term loan and repay a portion of the materials used in labelling. guidance of 200bp-225bp. Pricing on the company’s second-lien facility. Movie theatre chain CINEMARK has repriced euro term loan B is 250bp over Euribor with TravelClick provides marketing and ITSû53MûSEVEN YEARûlRST LIENûTERMûLOANû AûûmOOR ûCOMPAREDûWITHûGUIDANCEûOFû reservation technology to hotels. "ûTOûBPûOVERû,IBORûWITHûAûûmOOR 225bp-250bp. DOLE FOOD CO increased the spread on a It was issued at a 99.75 discount with 101 Both tranches sold at 99.75 with six REPRICINGûOFûITSûEXISTINGû53MûTERMû soft call protection for six months. months of 101 soft call protection, in line loan B. Barclays led with Wells Fargo, JP Morgan, RBC with original guidance. The loan is now priced at 275bp over Libor and Webster Bank. 4HEûORIGINALLYûPROPOSEDû53BN WITHûAûû,IBORûmOORûANDûûDISCOUNTû In June 2017, the company sliced pricing equivalent of senior unsecured notes The spread was guided at 250bp, with the ONûITSûTHENû53MûTERMûLOANûTOûBPû accompanying the loans were cut by same spread and discount. OVERû,IBORûWITHûAûûmOOR 53M EQUIVALENTûINûAGGREGATEûTOû Morgan Stanley led the loan, which That transaction marked the third 53BN EQUIVALENTûANDûPRICEDûONû matures April 6 2024. repricing for the company within a year. Wednesday. There will be 101 soft call protection for Cinemark lowered pricing to 225bp in The bonds included an eight-year non-call six months. December 2016 after cutting pricing to THREEû53MûTRANCHE ûAûlVE YEARûNON CALLû 4HEûCOMPANYûRAISEDûAû53MûTERMûLOANû 275bp in June of the same year. two €550m-equivalent tranche, and an B a year ago. The proceeds, along with The issuer originally lined up the loan at a eight-year non-call three €250m-equivalent 53MûOFûNOTES ûWEREûUSEDûTOûRElNANCEû SIZEûOFû53MûINû-AYûûTOûRElNANCEû tranche. Dole’s existing term loan B, second-lien debt due in December 2019. The originally proposed 10-year non-call notes and borrowings under its asset-based Cinemark is rated B1/BB. The debt is rated lVEûTRANCHE ûTOûBEûISSUEDûINûDOLLARS ûWASû lending facility. Ba1/BBB-. dropped during syndication. The seven-year loan priced at 300bp over Ticket reseller VIVID SEATS has sealed a The funding gap will be bridged with ,IBORûWITHûAûûmOORûANDûAûBPûSTEPDOWNû 53MûTERMûLOANûREPRICING 53MûOFûDRAWINGSûUNDERûTHEûNEWû WHENûlRST LIENûLEVERAGEûREACHEDûûTIMES The company lowered the spread on the 53BNûREVOLVINGûCREDITûFACILITYûDUEûINû The loan was scheduled to amortise at loan by 50bp to 350bp over Libor with a 1%  ûINCREASEDûFROMû53BNûATûLAUNCH ûANDû ûANNUALLYûFORûTHEûlRSTûFOURûYEARSû mOORû)TûWASûISSUEDûATûPARûANDûHASûûSOFTû 53MûOFûBALANCEûSHEETûCASHû4HEû followed by 5% for the remainder of the call protection for six months. COMPANYûWILLûNOWûHAVEû53MûOFûCASHûONû loan. This schedule will remain under the Barclays was lead-left on the loan, due HANDûATûCLOSE ûVERSUSû53MûUNDERûTHEû repriced loan. June 30 2024, joined by RBC, SunTrust and original structure. Jefferies. 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEû#OTYû DUFF & PHELPS WRAPS ADD-ON The covenant-lite loan, originally sized at and Galleria’s outstanding debt. Galleria is 53M ûBACKEDûITSûSALEûTOûPRIVATEûEQUITYû the collective name for the 40-plus beauty #ORPORATEûlNANCIALûADVISERûDUFF & PHELPS lRMû'4#2û)TûPRICEDûINû*UNEûûATûBPû products brands that Coty acquired from made revisions to the fungible TLB add-on OVERû,IBORûWITHûAûûmOOR 0ROCTERûû'AMBLEûINûûFORû53BN û backing its purchase of risk management including CoverGirl, Max Factor and Wella and cybersecurity services company Kroll. COTY UPS LOAN AS BOND PULLED Professional. UBS and Goldman Sachs led the deal. Corporate ratings are Ba3/BB. Secured Due to oversubscription, the add-on has Beauty products maker COTYûHASûlNALISEDû ratings are Ba2/BB+. Unsecured ratings are BEENûUPSIZEDûBYû53MûTOû53M the structure and pricing on its loan and B2/BB. Pricing is the same as the existing loan at BONDûRElNANCING ûAFTERûPULLINGûAû YEARû Clothing retailer TAILORED BRANDS revised BPûOVERû,IBORûWITHûAûûmOORûANDûû NON CALLûlVEûBOND terms for its dual-tranche loan backing a soft call protection that rolls off on August 4HEûTRANSACTIONûWASûCUTûTOû53BN RElNANCING 13. EQUIVALENTûFROMû53BN EQUIVALENTûINITIALLY û JP Morgan led the transaction. The tranche sold at par, versus a 99.5 in favour of the use of additional balance The originally proposed structure discount originally. sheet cash and a small draw on the new INCLUDEDûAû53MûmOATING RATEûTERMûLOANû Additional proceeds will be used to pay revolving credit facility. "ûDUEûûANDûAû53MûlXED RATEûTERMû down outstanding borrowings under the Bank of America Merrill Lynch and JP Morgan loan B due 2025. revolving credit facility. led the loans alongside Morgan Stanley, BNP 4HEûlXED RATEûTERMûLOANûHASûBEENû 0RIVATEûEQUITYûlRMû0ERMIRAû&UNDSûINû Paribas, Credit Agricole, Deutsche Bank, HSBC, ELIMINATEDûINûFAVOURûOFûAû53MûUPSIZINGû November agreed to acquire Duff & Phelps UniCredit, ING, Mizuho and RBC. TOûTHEûmOATING RATEûTRANCHEûTOû53M from an investor group led by The Carlyle 4HEûLOANSûWEREûDOWNSIZEDûBYû53M 0RICINGûONûTHEûLARGERûmOATING RATEûTRANCHEû 'ROUPûFORû53BN equivalent in aggregate to HASûlNALISEDûATûBPûOVERû,IBORûWITHûAûû LOPAREX INTERNATIONAL HOLDING has 53BN EQUIVALENTûFROMû53BN mOOR ûCOMPAREDûWITHûOPENINGûGUIDANCEûOFû WRAPPEDûAû53MûLOANûTHATûRElNANCESû equivalent originally. BP BPûWITHûAûûmOOR

68 International Financing Review March 31 2018 LOANS LEVERAGED LOANS

The loan sold at a 99.5 discount with six 4HEûlNALûTRANCHEûSIZESûINCLUDEûAû53Mû DOUBLEDûTHEûSIZEûOFûITSûlRST LIENûTERMûLOANû"û months of soft call protection at 101. lVE YEARûREVOLVERûANDûAû53MûSIX YEARû TRANCHEûTOû53MûANDûLOWEREDûPRICING 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûTHEû term loan B. The term loan was initially 0ROCEEDSûFROMûTHEûLOANûWILLûlNANCEûTHEû COMPANYSûEXISTINGûlXEDûANDûmOATING RATEû PROPOSEDûATû53M company’s acquisition of Nasdaq’s public lRST LIENûTERMûLOANSûDUEûINû*UNEû 0RICINGûlRMEDûATûBPûOVERû,IBORûFORû relations and digital media services Ratings are Ba3/B+ corporate and Ba3/BB- both tranches versus guidance of 375bp- BUSINESSESûASûWELLûASûTOûRElNANCEû7ESTSû facility. BPû4HEûREVOLVERûHASûAûûmOORûANDûTHEû existing 2021 senior secured notes. TERMûLOANûHASûAûûmOOR Pricing on the term loan B1 tranche PLY GEM REBUILDS TLB The term loan sold at a 99 discount, as decreased during syndication to 350bp over proposed at launch, while 101 soft call Libor with a 25bp stepdown at 3.5 times net Building products maker PLY GEM HOLDINGS protection was increased to 12 months from SECUREDûLEVERAGEûANDûAûûmOORû!TûLAUNCH û REVISEDûTERMSûFORûITSû53BNûTERMûLOANû"û the proposed six months. It will amortise at the spread was guided at 400bp, the same as BACKINGûITSûTAKE PRIVATEûBYûBUYOUTûlRMû ANûANNUALûRATEûOFûûINûTHEûlRSTûTWOûYEARS û on the existing term loan. Clayton, Dubilier & Rice and merger with then at 3% thereafter. The deal sold at a 99.875 discount Atrium Windows & Doors. The revolver is governed by a springing compared with guidance of 99.75-par. There JP Morgan led the seven-year loan, which leverage covenant, while the term loan is is also 101 soft call protection for six CLOSEDûATûBPûOVERû,IBORûWITHûAûûmOORû covenant-lite. months. and 99.5 OID, compared with 300bp-325bp Corporate ratings are B3/B, while facility The Credit Suisse-led loan matures on WITHûAûû,IBORûmOORûANDûû/)$ûATûLAUNCH ratings are B3/B+. October 10 2024, the same as the existing Lenders will now receive 12 months of term loan. 101 soft call protection, extended from six GREENSKY INCREASES REFINANCING Ferry operator HORNBLOWER has completed months originally. SYNDICATIONûOFûITSû53MûTERMûLOANû"û Changes have also been made to the MFN, Payments technology company GREENSKY has backing its leveraged buyout by private incremental facilities, restricted payments, SIGNEDûAû53MûTERMûLOANû" ûWHICHûWASû EQUITYûlRMû#RESTVIEWû0ARTNERS EXCESSûCASHûmOWûSWEEP ûASSETûSALEû INCREASEDûBYû53M UBS led with Barclays. The covenant-lite, prepayments and Ebitda addbacks. JP Morgan led the seven-year deal, which seven-year term loan cleared at 450bp over Proceeds from the term loan, along with PRICEDûATûBPûOVERû,IBORûWITHûAûûmOORû ,IBORûWITHûAûûmOORûANDûû/)$ 53MûOFû#$2ûCASHûEQUITYûANDû and 99.75 discount, at the tight end of Lenders will receive six months of soft call 53MûOFûROLLEDûEQUITYûFROMû!TRIUMû 325bp-350bp guidance. protection at 101. SHAREHOLDERS ûINCLUDINGûPRIVATEûEQUITYûlRMû Lenders will receive six months of soft call 4HEûlNANCING ûWHICHûMARKSûTHEû 'OLDENû'ATEû#APITAL ûWILLûBEûUSEDûTOûlNANCEû protection at 101. company’s debut in the institutional INûPARTûTHEû53BNûCOMBINEDûPURCHASEû Proceeds from the initial loan will be LEVERAGEDûLOANûMARKET ûINCLUDESûAû53Mû PRICEûOFû0LYû'EMûANDû!TRIUMûANDû53Mû USEDûTOûRElNANCEûTHEûCOMPANYSûEXISTINGû lVE YEARûREVOLVINGûCREDITûFACILITY of prepayment penalties, fees, and term loan, while the incremental proceeds Hornblower operates the New York ferry expenses, according to Moody’s. will be used to fund a dividend to system. 4HEûlNANCINGûINCLUDESûAû53MûlVE shareholders. Ratings are B2/B corporate and B2/B+ YEARûREVOLVINGûCREDITûFACILITYûANDûAû53Mû Ratings are B1/B+ corporate and facility. facility. eight-year senior unsecured bond. Alternative asset manager GROSVENOR Corporate and facility ratings are B2/B. CAPITAL MANAGEMENT has revised terms for its YUM! BRANDS NEARS REFI (OMEûHEALTHCAREûBENElTSûMANAGEMENTû amendment to extend the maturity of its services company CARECENTRIX made changes 53MûTERMûLOANû"ûBYûûMONTHS Fast food company YUM! BRANDS was to its seven-year term loan backing a Goldman Sachs led with UBS. The company SCHEDULEDûTOûCLOSEûLASTûWEEKûAû53BNû dividend recapitalisation. asked lenders to push out the maturity of 4ERMû,OANû"ûTHATûWILLûBEûUSEDûTOûRElNANCEû The term loan, led by UBS with Deutsche the covenant-lite term loan B to March 2025 its existing Term Loan B due in 2023. Bank and Citizens Bank, has been downsized from August 2023. The JP Morgan-led seven-year loan was BYû53MûTOû53M 0RICINGûISûBPûOVERû,IBORûWITHûAûûmOOR û GUIDEDûATûBPûOVERû,IBORûWITHûAûûmOORû Pricing was increased to 450bp over Libor versus guidance of 275bp-300bp. ANDûnPARûOFFERINGûPRICE WITHûAûûmOOR ûFROMûOPENINGûGUIDANCEûOFû The OID tightened to 99.75 from 99.5 for It is structured with six months of 101 soft BP BPûWITHûAûûmOORû4HEûû both existing and new lenders. call protection. discount was unchanged. The six-month 101 soft call reset is Existing ratings are Ba3/BB corporate and The loan will amortise at 2.5% per year. unchanged. "A"""nûFACILITY 4HEûlNANCINGûINCLUDESûAû53MûlVE The amendment also covers an 18-month Yum! Brands owns more than 43,500 year revolving credit facility. extension of the maturity of the company’s restaurants worldwide, including KFC, Pizza The company planned to use proceeds 53MûREVOLVINGûCREDITûFACILITYûDUEûINû Hut and Taco Bell. FROMûTHEûORIGINALLYûPROPOSEDû53MûTERMû August 2021 to March 2023. Miner ARCH COAL was expected to close on LOANûANDûROUGHLYû53MûINûCASHûTOûREPAYû 0RIVATEûEQUITYûlRMû(ELLMANûû&RIEDMANû 4HURSDAYûAû53MûLOANûTHATûWILLûBEûUSEDû EXISTINGûDEBTûANDûPAYûAû53MûDIVIDENDû owns 29% of the company, while the to reprice existing Term Loan B debt. to shareholders including Summit Partners, remaining 71% is owned by Grosvenor Credit Suisse led the deal, which was as well as to cover fees and expenses, employees. EXPECTEDûTOûBEûPRICEDûATûBPnBPûOVERû according to Moody’s Investors Service. The transaction is leverage neutral, with Libor, compared with the existing spread of Ratings are B1/B corporate and facility. net leverage remaining at 2.8 times, based 325bp over Libor, at par with a 1% Libor ALTISOURCE HOLDINGSûHASûlNALISEDûAû ONûROUGHLYû53MûOFûNETûDEBTûANDû mOOR 53MûSENIORûSECUREDûLOANûTHATûWILLûBEû 53MûûCONSOLIDATEDû%BITDA The covenant-lite loan will maintain its USEDûTOûRElNANCEûEXISTINGûTERMûLOANû"ûDEBTû Communication and network March 2024 maturity and the 101 soft call Morgan Stanley led. infrastructure company WEST CORP has protection for six months will be reset.

International Financing Review March 31 2018 69 #ORPORATEûRATINGSûOFû"A""nûANDûFACILITYû Lenders will receive 12 months of soft call Document storage company IRON MOUNTAIN ratings of Ba3/BB are expected. protection at 101, extended from six months has wrapped up syndication of its term loan Commitments were due on Thursday for originally. "ûBACKINGûAûRElNANCING media services company TOWNSQUARE MEDIA’s The eight-year second-lien term loan has JP Morgan led the 7.75-year term loan, which 53MûlRST LIENûTERMûLOANûREPRICING BEENûCUTûBYû53MûTOû53M WASûINCREASEDûBYû53MûTOû53M The covenant-lite loan was guided at 0RICINGûONûTHEûTRANCHEûlNALISEDûATûBPû It cleared at 175bp over Libor with a 0% BPûOVERû,IBORûWITHûAûûmOORû4HEûLOAN û OVERû,IBORûWITHûAûûmOORûANDûû/)$ ûWIDEû mOORûANDûûISSUEûPRICE ûTIGHTûTOûGUIDANCEû due April 1 2022, was offered at par. The OFûGUIDANCEûOFûBP BPûWITHûAûûmOORû OFûBP BPûWITHûAûûmOORûANDûû transaction also refreshes 101 soft call and 99 OID. discount. protection for six months. It includes a 102/101 hard call schedule, as Lenders will receive six months of soft call RBC Capital Markets was lead arranger on originally proposed. protection at 101. deal. 4HEûlNANCINGûALSOûCOMESûWITHûAû53Mû Proceeds will be used to pay down )Nû ûTHEûCOMPANYûRAISEDûAû53Mû lVE YEARûREVOLVINGûCREDITûFACILITY borrowings under the revolving credit seven-year Term Loan B. The covenant-lite 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûEXISTINGû facility. loan was priced at 325bp over Libor with a debt and fund a dividend to shareholders Ratings are Ba3/BB- corporate and Ba3/BB ûmOOR including Kelso & Co, which acquired the facility. Beverage products maker TRILLIANT has company from Tenex Capital Management 4HEûBORROWERûALSOûREPRICEDûITSû!Mû wrapped up the repricing of its covenant-lite in 2016. 53M ûSIX YEARûTERMûLOANû"ûSIGNEDûINû 53Mû4ERMû,OANû"ûDUEûINû3EPTEMBERû 2ATINGSûAREû""ûCORPORATE û"" ûlRST LIENû 3EPTEMBERûûANDûADDEDû!MûTOûTHEû Wells Fargo led the deal, which was priced and Caa2/CCC+ second-lien. facility. at 350bp over Libor with a 25bp step-down AMNEAL PHARMACEUTICALSûlNALISEDûAû The loan was repriced at 387.5bp over when the corporate family rating is revised 53BNûTERMûLOANû"ûBACKINGûITSûMERGERû BBSY, in the middle of guidance ranging to B2/B or greater with stable outlooks, and a with fellow generics drug maker Impax from 375bp to 400bp. The previous margin ûmOOR Laboratories. was 425bp. )TûWASûLAUNCHEDûATûBPnBPûWITHûTHEû JP Morgan led with Bank of America Merrill 4HEû!MûOFûNEWûDEBTûALSOûPRICEDûATû SAMEûSTEP DOWNûANDûmOOR Lynch and RBC Capital Markets. 387.5bp over BBSY and was issued at an OID The loan was previously priced at 400bp Pricing on the seven-year loan was of 99. The TLB attracted new lenders and WITHûAûûmOOR increased to 350bp over Libor with a 25bp existing ones which stepped up their initial It was issued at par with six months of STEPDOWNûWHENûlRST LIENûNETûLEVERAGEûISûû allocations. soft call protection at 101. It amortises at 1% TIMESûORûLESS ûAûûmOORûANDûûDISCOUNTû Barclays was left lead on the TLB with per year. Guidance opened at 300bp-325bp with a 0% Credit Agricole CIB and HSBC as joint lead 2ATINGSûAREû""nûCORPORATEûANDûFACILITY mOORûANDûûDISCOUNT managers. Lenders receive 12 months of soft call SOUTHERNCARLSON REVISES TERMS protection at 101, extended from six months originally. EUROPE/MIDDLE EAST/ Fasteners and packaging supplies The loan includes 50bp MFN for life with AFRICA distributor SOUTHERNCARLSONûREVISEDûITSûlRST û no carve-outs. and second-lien loan package backing a Additional revisions were made to the ELYSIUM ALLOCATES £275m LOAN dividend recapitalisation. incremental facility, as well as to the restricted KKR Capital Markets is sole arranger. payments and permitted investments baskets. A £275m term loan for the UK’s ELYSIUM 4HEûSEVEN YEARûlRST LIENûTERMûLOANûHASû 0ROCEEDSûWILLûBEûUSEDûTOûFULLYûRElNANCEû HEALTHCARE has closed, allocating on Europe’s BEENûINCREASEDûBYû53MûTOû53M existing debt at Amneal and Impax. secondary loan market at the wider end of 0RICINGûONûTHEûTRANCHEûlRMEDûATûBPû Ratings are B1/BB- corporate. OID guidance. OVERû,IBORûWITHûAûûmOORûANDûû/)$ ûATû Amneal Holdings’ members will own 75% The seven-year term loan B closed at 98.5 the wide end of guidance of 400bp-425bp and Impax shareholders will own 25% of the /)$ ûFROMûINITIALû/)$ûGUIDANCEûOFûnû WITHûAûûmOORûANDûû/)$ new company’s pro forma shares. OID, while pricing remained in line with initial guidance of 525bp over Libor, with a EUROPEAN LEVERAGED LOANS EMEA SPONSORED LOAN BOOKRUNNERS ûmOOR BOOKRUNNERS: 1/1/2018 TO DATE BY VOLUME: 1/1/2018 TO DATE The loan is offered with 101 soft call Managing No of Total Share Europe, Middle East, Africa protection for six months. bank or group issues US$(m) (%) Managing No of Total Share 4HEû4,"ûWILLûBEûUSEDûTOûRElNANCEûEXISTINGû 1 Deutsche Bank 18 4,248.65 7.3 bank or group issues US$(m) (%) debt, and part-fund three further 2 BNP Paribas 18 4,074.56 7.0 1 SG 10 2,066.75 8.6 acquisitions alongside a £42m equity 3 Goldman Sachs 13 3,887.73 6.7 2 Deutsche Bank 9 1,850.24 7.7 investment. 4 SG 15 3,477.21 6.0 3 Natixis 10 1,840.89 7.7 JP Morgan and Jefferies led the loan, which 5 Credit Agricole 14 3,428.70 5.9 4 Goldman Sachs 9 1,830.15 7.6 is offered with a leverage covenant. 6 ING 14 3,312.84 5.7 5 ING 8 1,827.27 7.6 The company is rated B3/B with a recovery 7 Citigroup 10 3,146.17 5.4 6 HSBC 8 1,808.54 7.5 rating of 3. 8 HSBC 13 3,042.00 5.2 7 BNP Paribas 9 1,746.35 7.3 There is also a £55m revolving credit 9 Natixis 12 2,488.44 4.3 8 Citigroup 4 1,206.01 5.0 facility. 10 UniCredit 9 2,343.89 4.0 9 Credit Agricole 8 1,160.99 4.8 BC Partners owns Elysium, which it Total 48 58,249.31 10 RBC 4 1,009.34 4.2 established in October 2016 following the Excluding project finance. Western Europe only included. Total 28 24,004.66 acquisition of 22 mental health facilities Excluding project finance. from Acadia Healthcare. The facilities were Source: Thomson Reuters SDC code: P10 Source: Thomson Reuters SDC code: P13 former Priory clinics.

70 International Financing Review March 31 2018 LOANS LEVERAGED LOANS

SWISSPORT WIDENS REFI PRICING

Swiss air cargo handler SWISSPORT has Imagina LBO debt delayed widened pricing on a €325m incremental term loan that backs its acquisition of !USTRALIANûmIGHTûSUPPORTûSERVICESûOPERATORû as investors hesitate Aerocare. The term loan is now at 437.5bp over „ EUROPE Deadline extended from March 26 Euribor, at 96.5 OID from initial price guidance of 425bp, at 98-99 OID. Syndication has been extended on a €920m said. Soft-call protection of 101 has also been leveraged loan financing backing Chinese private The deal comprises a €200m six-year term extended to 12 months, from six months. equity firm Orient Hontai Capital’s buyout of loan A, a €660m seven-year covenant-loose Barclays was sole arranger on the Spanish media group IMAGINA after the deadline term loan B and a €60m six-year revolving incremental add-on loan. for participation passed on March 26. credit facility. The TLB includes a gross leverage Swissport, which is owned by China’s The deadline for commitments has been covenant. HNA Group, raised an initial €460m term pushed to after Easter following a lukewarm Some investors are waiting to see if pricing will LOANû"ûINû*ULYûûTOûRElNANCEûEXISTINGûDEBTû reception from the market, several loan investors be adjusted to increase the overall yields on offer. following a technical breach of covenants. said. The term loan A was initially guided to pay HNA is planning to list Swissport in the This largely relates to corruption allegations 400bp over Euribor, while the term loan B was second half of this year, helping to circling one of Imagina’s US subsidiaries, Media guided at 450bp over Euribor, at 99 OID. Both SIGNIlCANTLYûREDUCEûLEVERAGEûATûTHEûBUSINESS World Sports, which Reuters reported on are offered with a 0% floor. Yet HNA scrapped its planned listing of previously. “Whether people sell their soul for a little bit Swiss-based airline caterer Gategroup at the The latter’s chief executive and another more spread, let’s see – it could make a bad deal eleventh hour on March 26, dealing a blow executive pleaded guilty to corruption charges become a good deal,” the second investor said. to the cash-strapped Chinese from the US Department of Justice in late 2015. Deutsche Bank is leading the deal, alongside conglomerate’s efforts to reduce its debt Both are due to be sentenced in the coming Citigroup and Goldman Sachs. mountain. months, according to the US Department of Imagina is one of Europe’s largest audiovisual “This is the clearing level on the deal. The Justice documents. and sports media groups. Its subsidiaries include credit is strong but there is a history with “Even a whiff of corruption normally spooks Mediapro, the sport TV rights distributor, film the name and there are issues with the investors from a credit,” a senior portfolio producer and audiovisual production centre ownership,” one source said. manager said. operator. Moody’s and S&P downgraded their While a number of investors are attracted Imagina had revenues of €1.54bn in 2016 and outlook on Swissport’s B3/B- ratings to the business, others question its resilience, Ebitda of €162m. following the announcement of Swissport’s especially around contracts. Orient Hontai entered into exclusive talks with RElNANCING “There are questions over how much they pay Imagina’s shareholders in May 2017. The deal Swissport employs over 65,000 people for football rights and how they’ve gone about was made at a multiple of 10 times 2016 Ebitda and generates operating revenue of €2.7bn. obtaining certain things in the business, subject and valued the company at €1.9bn. Orient Hontai to DoJ investigations and corruption charges. will take a 53.5% stake in the group. SUNRISE MEDICAL SEALS TLB There are also contract cliffs,” a senior investor Max Bower

Germany-based wheelchair manufacturer SUNRISE MEDICAL has priced its €445m seven- The loans are being issued through Cidron Nordic Capital acquired Birmingham- year covenant-lite term loan B at 350bp with Holding BV, after Nordic Capital chose to headquartered TBS in 2011. TBS produces AûûmOOR ûATûPAR ûAFTERûLAUNCHINGûATû transfer Sunrise to another fund within its protein tests for diagnosis of certain blood There is six months soft call protection at ownership structure. cancer diseases as well as immunological 101. disorders. Moody’s estimated adjusted leverage for TBS UPS TL, CUTS PRICING Sunrise is 7.3 times Ebitda for the year to January 2018. UK diagnostics company THE BINDING SITE has ASIA-PACIFIC The ratings agency noted earlier this shifted £32m-equivalent from its second- month that Nordic Capital-owned Sunrise lien facility to its term loan B, tightening LINK REIT LBO LOAN DRAWS 11 HADûTHEûABILITYûTOûGENERATEûSIGNIlCANTû pricing in the process. UNDERLYINGûFREEûCASHûmOW ûGIVENûITSûLOWû The term loan is now £285m-equivalent, !û(+BNûLEVERAGEDûBUYOUTûLOAN ûBACKINGûAû mandatory capex and working capital guided at 350bp over Euribor from previous consortium’s winning bid for commercial requirements. guidance of 375bp, following strong properties of LINK REAL ESTATE INVESTMENT TRUST, has The company reported Ebitda for the year appetite from investors. It sold at par, from attracted 11 lenders. ANZ, Standard Chartered ending June 30 2017 of €75.9m, from ûINITIALLY ûWITHûAûûmOOR and UOB are the original mandated lead revenues of €469.8m. The £69m-equivalent dollar-denominated arrangers and bookrunners on the three-year HSBC, Natixis and SMBC led the second-lien has therefore reduced to bullet loan, while Industrial & Commercial Bank of lNANCINGû0ROCEEDSûRElNANCEûEXISTINGû £37m-equivalent. China, Macau branch,came in for the same title. debt at Sunrise. 0ROCEEDSûRElNANCEûEXISTINGûDEBT Mandated lead arrangers are Bangkok Bank The deal also includes a €70m revolving HSBC, SEB and SMBC led the deal. Hong Kong branch, First Commercial Bank Hong credit facility and a €122.5m, sterling- Leverage is 5.1 times through the senior Kong branch, CTBC Bank, Dah Sing Bank, Hang denominated eight-year second lien that has and 6.5 times in total, off an Ebitda of Seng Bank, China Construction Bank (Asia) and been pre-placed with investors. £49.5m to December 2017. Nanyang Commercial Bank.

International Financing Review March 31 2018 71 The portfolio of 17 properties, which includes shopping malls and Banks provide rescue cars parks in public housing estates located in older urban districts in Hong Kong, will form the security on the loan. financing for Remington The facility has 17 borrowers and is dubbed “Project Doris”. „ US Gunmaker obtains bankruptcy funding from existing lenders Link, Asia’s largest REIT in terms of market capitalisation, will have Gunmaker REMINGTON OUTDOOR CO has obtained relationships. The bank said part of its about 90% of its assets in Hong commitments for nearly US$300m from its consideration is to listen to its clients and Kong and 10% in China after the existing lenders, including some of the biggest stakeholders, who have a wide range of opinions. divestment. US banks, after new sources of funding dried up “We’re deeply concerned with the increasing The total portfolio value would in the months leading up to its filing for Chapter amount of gun violence in our schools and BEûABOUTû(+BN ûTHEûCOMPANYû 11 bankruptcy protection. communities,” the bank said. said in late November, when During that time, the company’s investment The others, along with Remington, did not announcing the sale to the Gaw bank Lazard approached more than 30 possible immediately respond to a request for comment. Capital consortium. lenders, according to court documents. The company ran into trouble after borrowing “The vast majority of lenders contacted, to ramp up production in 2016 in anticipation however, indicated they were reluctant to provide of greater industry demand, according to court financing to firearms manufacturers,” said Lazard filings. banker Ari Lefkovits in the papers. The expectation of higher sales was in part RESTRUCTURING Most of the banks providing the bankruptcy driven by fears of a Hillary Clinton presidency and funding were lenders to Remington before its tighter gun controls. With the election of President current financial problems, according to court Donald Trump, who has said he strongly supports UNITED STATES records. Without the funds, Remington may have gun ownership, the firearms industry was stuck been forced to go out of business and the banks with a glut of weapons and higher levels of debt. DAVID’S BRIDAL IN TALKS could have seen their investment slump in value. Remington, which said in January it was nearly The company and its investors have been out of cash, plans to tap the loans from the DAVID’S BRIDAL is in talks to hire investment under heightened scrutiny after 17 people were banks to help pay corporate expenses, including bank Evercore as a restructuring advisor to killed and 17 more were wounded in a school payroll, during its bankruptcy filing. SLASHûITSû53BNûDEBTûBURDEN ûASûTHEû53û shooting in Parkland, Florida in February. Remington’s bondholders are also providing wedding gown retailer faces mounting Remington filed for bankruptcy protection one some of the bankruptcy loan and will receive a competition. day after hundreds of thousands of Americans stake in the company when it exits bankruptcy David’s Bridal is the latest retailer to took to the streets to demand tighter gun control protection. struggle as internet upstarts offer measures. Their identities were redacted in court increased transparency on prices, Banks often sell troubled loans to hedge funds documents. turning its stores into showrooms when a borrower is heading into bankruptcy, The company also asked the court to seal where customers come to try on gowns but one source told Reuters that even as the the letters detailing the fees the lenders will only to buy them online. More than Remington loans were heavily discounted, buyers earn from the loans, saying that the sums are û53ûBRICKS AND MORTARûRETAILERSûlLEDû were scarce. commercially sensitive, according to filings in the for bankruptcy last year. The company’s bankruptcy lenders include bankruptcy court in Wilmington, Delaware. David’s Bridal, which is known for its Bank of America, Wells Fargo, JP Morgan and The court records also showed that affordable wedding gowns and bridesmaid Deutsche Bank, according to court documents. Remington’s business faces new hurdles in the dresses and has over 300 US stores, has also Remington disclosed the loan details in its wake of the Florida shooting. suffered due to declining marriage rates, Sunday bankruptcy filing, which the company The company cited a risk to its business from according to S&P. said will allow it to cancel US$775m of debt and restrictions placed on gun sales by retailers such One strategy the retailer may pursue bring it out of Chapter 11 as soon as May. Walmart, Dick’s Sporting Goods and Kroger. to trim its debt is to ask lenders to Smaller banks Regions Financial Corporation, Walmart accounted for 11% of Remington give it at least another year, until BB&T Corp, Synovus Financial Corp and Fifth sales in 2017, according to the court documents. 2020, to turn around its business Third Bancorp have also committed to help fund Remington also said sales could be hurt before repaying an approximately Remington’s bankruptcy loans, court documents by more government regulation, including 53MûLOAN show. An affiliate of investment manager enhanced background checks and a broader David’s Bridal is also liable for Franklin Templeton Investments, another lender, definition of “dealer” under current gun laws. 53MûINûBONDSûCOMINGûDUEûINûû is also providing funds. Remington said if the 1994 federal assault- 4HEûBONDSûAREûTRADINGûSIGNIlCANTLYû Bank of America, Regions, Deutsche Bank, JP weapons ban were re-enacted it would have an below face value at around 53 cents Morgan and Synovus declined to comment. adverse effect on the business. on the dollar. BB&T declined to comment on its lending Tom Hals, Jessica DiNapoli David’s Bridal’s term loan is quoted at about 86 cents on the dollar. Much of the retailer’s debt stems from Based on an interest margin of 185bp Hong Kong-based Gaw Capital Partners, a Clayton, Dubilier & Rice’s leveraged buyout over Hibor, banks joining as MLABs get PRIVATE EQUITYûREAL ESTATEûlRM ûLEADSûTHEû of the company in 2012, a deal that was top-level all-in pricing of 200bp, via an consortium that agreed to buy the properties VALUEDûATûABOUTû53BN upfront fee of 40bp and a 5bp from Link REIT in late November for David’s Bridal also has 11 stores in Canada underwriting fee. (+BNûEVERWELLCITY is the acquiring entity. and four in the UK.

72 International Financing Review March 31 2018 EQUITIES

China 74 India 75 Indonesia 76 Philippines 76 Thailand 76 Germany 76 South Africa 77 Switzerland 77 UK 78 United States 78 Barbados 82 Brazil 82 Structured Equity 83

„ FRONT STORY US TAX CHANGES Dominion Energy raises US$1.4bn Utility short-circuited by FERC MLP tax ruling

The change in US tax rates and allowances stock is sold long and later settled by delivering DE’s recently completed Cove Point LNG has hit utilities hard, with DOMINION ENERGY Treasury shares in exchange for proceeds. facility is just one valuable asset. The utility spent one of those left rethinking its strategy. Also like Duke, the raise was backstopped about US$4bn to build the LNG facility and now Highly levered and increasingly an owner by the underwriters. plans to issue debt at Cove Point and upstream of regulated businesses, the utility is 'IVENûCASHmOWûCONSTRAINTSûOFûTAXû funds to repay parent-level debt, a prospect exploring options to shed assets and legislation, utilities are queuing up equity supported by 20-year offtake agreements and accelerate deleveraging goals. The expected raises to support credit ratings – Southern US$700m of annual Ebitda generated. plan to drop assets down to its master Company, Consolidated Edison, PPL and Selling a minority stake in Cove Point is limited partnership Dominion Energy 3EMPRAû%NERGYûHAVEûALLûmAGGEDûEQUITYûRAISES also conceivable and would attract plenty of Midstream Partners (DM) has been The need is more acute for DE. interest from infrastructure funds. Analysts scuppered by a change in tax treatment. at CreditSights, an independent research Raising US$1.4bn of fresh equity MLP FUNDING TRAP lRM ûRECKONûTHATû#OVEû0OINTûISûWORTHû overnight on Tuesday, on top of US$500m it MLP subsidiary DM was particularly hard hit US$7bn-US$8.4bn. secured through at-the-market sales in by a March 15 decision from the Federal DE is also considering alternatives for January, was the least complicated of those Energy Regulatory Commission to disallow Blue Racer, a midstream JV that processes funding options. master limited partnerships from taking tax and transports natural gas out of the Utica DE, which in January agreed to buy South allowances on income earned from Shale. Though unregulated, and therefore Carolina utility SCANA for US$14.9bn, interstate pipelines. DM’s principal assets outside of FERC, selling this to DM may no nevertheless outlined its options to investors are two interstate pipelines. longer be economical. behind closed doors on Tuesday. The targeted The sale of assets to the vehicle was DM, and MLPs broadly, may go the way of MARKETINGûHELPEDûlRMûUPûDEMANDûANDû supposed to have been a big source of cash dinosaurs. pricing ahead of the public launch. to the parent. !LLûISûNOTûLOSTû$%ûREAFlRMEDûGUIDANCEûFORû “We had substantial interest from the wall With the tax-advantaged valuation operating earnings to grow this year by 10% cross,” one banker involved in the arbitrage gone DM’s publicly traded units to US$3.80–$4.25, and by 6%–8% thereafter underwriting told IFR. “There were a lot of have collapsed 37.5%, leading Dominion through 2020. It also hopes to increase its investors that expected they would do a deal.” Energy’s CEO Thomas Farrell to conclude a dividend, currently US$3.34 per share Goldman Sachs and Credit Suisse, along with “materially negative impact” on DM’s ability annually, by 10% annually through 2020. Barclays, Citigroup and JP Morgan, placed 20m to raise equity publicly. And it has vowed not to sell stock again shares at US$67.85, the bottom of a DE is reviewing options for DM. One likely through the end of 2019. US$67.85–$68.00 marketing range and 2% scenario is to collapse the GP/LP structure (AVINGûSATISlEDûEQUITYûNEEDS û$OMINIONû discount to the US$69.22 Tuesday last sale. into a traditional tax-paying C-Corp, as Energy will focus on creditors. Dominion Energy shares closed Kinder Morgan, Enterprise Products With 54% of overall debt at the holding Wednesday at US$67.79. Partners and OneOk have done when faced company, the utility is among the most Like Duke Energy’s US$1.4bn raise earlier in with similar, high-cost funding scenarios. heavily levered regulated utilities, compared the month, Dominion Energy structured the After all DM is now paying taxes, so gets to an industry average of 25%. equity raise as a forward sale, whereby borrowed LITTLEûBENElTûOFûANû-,0ûSHELL Stephen Lacey General Mills defies stock pressure to raise US$1bn

Short-covering helps to overcome stock price pressure

Branded food company GENERAL MILLS raised Goldman Sachs, Bank of America Merrill Lynch In General Mills’ case, short positions were US$1bn in equity late Tuesday, partly were active books, while Barclays, Citigroup, already well established and shorts were able funding the US$8bn acquisition of BLUE Deutsche Bank and Morgan Stanley were passive to cover through allocations in the offering. BUFFALO PET PRODUCTS. books.. Several people said short-covering helped General Mills sold 22.73m shares at Hedge funds were already short the stock to underpin demand for the offering and the US$44 each, a 2.9% all-in discount after one around the earnings release and in relatively strong aftermarket performance. day of marketing but only after a nearly expectation of the offering. Also reducing the market impact of the 25% slump in the stock price from levels in SEC rules do not allow short-sellers to offering, the new shares represented only 4% late January. cover short positions put on in the previous OFûOUTSTANDINGûANDûONLYûlVEûDAYSûOFûAVERAGEû The stock held its ground in Wednesday’s lVEûDAYSûWITHûSTOCKûPURCHASEDûINûFOLLOW ONû daily trading volume. aftermarket, closing at US$44.35. offerings. Anthony Hughes

International Financing Review March 31 2018 73 WEEK IN NUMBERS management and peer-to-peer lending unit LUFAX is now likely to come in the second ASIA-PACIFIC half of the year at the earliest. 91 days Lufax is now restructuring its business to „ IT TOOK LAFARGE AFRICA 91 DAYS TO ensure it complies with the new rules CONFIRM THAT ITS N131.65bn (US$365.7m) CHINA Chinese authorities introduced late last year RIGHTS ISSUE HAD BEEN SUCCESSFUL. to regulate the country’s online lending TAKE-UP WAS ONLY 42.12%, BUT THE TOP MEITUAN-DIANPING PLANS industry, according to people familiar with 10 INVESTORS HOOVERED UP SHARES HONG KONG IPO the situation. BUYING 94% OF THE FUNDRAISING The Hong Kong IPO of OneConnect, China’s largest provider of on-demand online PROVIDERûOFûlNTECHûSOLUTIONSûTOûlNANCIALû services, MEITUAN-DIANPING, has tapped Bank of institutions, is expected to raise US$2bn– 18 years America Merrill Lynch, Goldman Sachs and $3bn. Ping An announced in February that „ KIM BALT BECAME HEAD OF Morgan StanleyûTOûWORKûONûAû(ONGû+ONGûmOATû OneConnect raised US$650m in a private SYNDICATE AT ING IN FEBRUARY 2000. that could see it list as early as this year. lNANCINGûEXERCISE ûWHICHûVALUEDûTHEûARMûATû BY FAR THE LONGEST SERVING HEAD OF Meituan-Dianping, an online platform for US$7.4bn. EQUITY SYNDICATE IN EUROPE, HE ordering food and booking movies and Lufax, meanwhile, plans to raise US$5bn– IS MOVING TO A NEW SENIOR ADVISER restaurants, recently started preparatory $6bn from an IPO that values the company ROLE IN ECM work with the three banks for the IPO, at US$40bn–$50bn. according to people close to the deal. No formal mandate has been awarded TIANQI LITHIUM PLANS HK IPO US$257.78 yet, they have said. „ TESLA SHARES SLUMPED LAST In October, Meituan-Dianping was valued TIANQI LITHIUM intends to raise at least US$1bn WEEK AS THE COMPANY WAS HIT BY at US$30bn following a US$4bn funding from a proposed Hong Kong IPO, according A DOWNGRADE BY MOODY’S AND A round led by Tencent Holdings. to people close to the plans. FEDERAL INVESTIGATION INTO THE FATAL Meituan-Dianping had been considering The Shenzhen-listed lithium producer CRASH OF ONE OF ITS CARS. SHARES an IPO in the US as soon as this year. The recently secured board approval to sell no CLOSED ON WEDNESDAY AT US$257.78, company has however shifted focus to Hong more than 20% of its enlarged capital and DOWN 18.6% FOR THE WEEK AND PUTTING Kong as the city’s exchange operator is there is a 15% greenshoe. SHARES BACK TO A LEVEL LAST SEEN IN about to allow dual-class shares. As of March 29, Tianqi Lithium had a MARCH 2017 Led by serial entrepreneur Wang Xing, market capitalisation of Rmb58.72bn Meituan-Dianping’s backers also include (US$9.34bn). US$ 400 Sequoia Capital, Singaporean state investors 4HEûCOMPANYûPOSTEDûAûûNETûPROlTûOFû 380 GIC and Temasek Holdings, as well as DST Rmb2.15bn, representing 41.86% year-on- 360 Global and the Canada Pension Plan year growth. 340 Investment Board. Tianqi’s move came after rival Ganfeng 320 Lithium’s Hong Kong listing plan. PING AN MOVES FAST 300 Ganfeng, which is also listed in Shenzhen, 280 lLEDûAûLISTINGûAPPLICATIONûTOûTHEû3TOCKû 260 Ping An Insurance has started work on a Exchange of Hong Kong in February. The 240 PROPOSEDû(ONGû+ONGû)0/ûOFûlNANCIALû company planned to raise at least US$1bn in ONECONNECT FINANCIAL 220 technology arm the second quarter, a person close to the TECHNOLOGY 200 this year with the help of deal told IFR earlier. 22/12/ 22/04 22/08 22/12 Goldman Sachs and JP Morgan. Tianqi plans to use the proceeds to 2016 2017 The Chinese insurer has accelerated the expand output, enhance research and plan to list OneConnect because the development, fund investment projects and Two classes targeted Hong Kong IPO of online wealth- replenish working capital. „ SINGAPORE EXCHANGE WILL ALLOW ASIA-PACIFIC EQUITIES ASIA-PACIFIC EQUITIES (EX-JAPAN) COMPANIES TO LIST WITH DUAL CLASS BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE SHARE STRUCTURES. SGX HAS ALSO Managing No of Total Share Managing No of Total Share LOWERED THE MINIMUM MARKET bank or group issues US$(m) (%) bank or group issues US$(m) (%) CAPITALISATION ALLOWED FOR DCS 1 Morgan Stanley 25 7,871.66 11.9 1 Morgan Stanley 19 7,400.44 12.5 ISSUERS TO S$300m (US$229m), FROM 2 Citigroup 24 6,773.50 10.2 2 Citigroup 21 6,456.19 10.9 THE EARLIER PROPOSAL OF S$500m 3 BAML 9 4,816.33 7.3 3 BAML 8 4,794.48 8.1 4 Goldman Sachs 16 4,336.66 6.6 4 Goldman Sachs 15 4,284.09 7.2 5 UBS 21 4,260.07 6.4 5 UBS 19 4,019.37 6.8 78% 6 Huatai Securities 9 2,075.44 3.1 6 Huatai Securities 9 2,075.44 3.5 „ ICICI SECURITIES ENDED ITS IPO ONLY 7 Citic 11 1,728.58 2.6 7 Citic 11 1,728.58 2.9 78% SUBSCRIBED – BUT STILL CLOSED 8 Sumitomo Mitsui Finl 23 1,485.79 2.2 8 Credit Suisse 12 1,335.85 2.2 THE DEAL. IT IS THE SECOND TIME IN A 9 Nomura 29 1,450.10 2.2 9 Axis Bank 9 1,314.35 2.2 FORTNIGHT THAT AN INDIAN IPO HAS 10 Mizuho 17 1,387.18 2.1 10 China Securities 9 1,147.41 1.9 FAILED TO ATTRACT ENOUGH DEMAND Total 637 66,128.01 Total 575 59,420.09

TO SELL ALL SHARES OFFERED THOUGH Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues NEITHER DEAL CANCELLED Source: Thomson Reuters SDC code: C4a1 Source: Thomson Reuters SDC code: C4a2

74 International Financing Review March 31 2018 EQUITIES ASIA-PACIFIC

Shareholders will review the proposal on narrowing from a loss of Rmb1.47bn in The paper products company plans to April 24. 2016. sell no more than 62m shares, or about a It had average monthly active users of ûFREE mOATû)TûWILLûSETûTHEûPRICEûONû!PRILû TRIO PRICE US FLOATS LOW 25.2m in the fourth quarter of 2017. 2 and start bookbuilding on April 9. Proceeds will be used mainly for paper Three Chinese companies priced their US CZB SEEKS EXTENSION FOR IPO production and a thermal power project. IPOs at competitive valuations amid volatile market conditions. (See News.) CHINA ZHESHANG BANK will seek shareholder Video-streaming site BILIBILI raised approval for a 12-month extension to the INDIA US$483m in a NYSE IPO of 42m primary validity period for its proposed Shanghai IPO American depositary shares at US$11.50 of up to 4.49bn A-shares, or about 20% of its MEDI ASSIST HIRES TRIO FOR IPO each, representing P/E ratios of 28.3 for 2019 enlarged capital. and 13.7 for 2020. The existing shareholder approval will MEDI ASSIST HEALTH SERVICES has hired Axis, Books were multiple times covered on expire on May 30. Edelweiss and ICICI Securities for an IPO later strong demand from long-only funds and The Hong Kong-listed lender stands to this year, expected to raise Rs10bn–Rs12bn technology specialists. raise about Rmb17bn (US$2.71bn) from the (US$154m–$185m), according to people There is a 15% greenshoe of 6.3m primary IPO, based on the March 27 closing price of familiar with the plans. ADS. HK$4.79, equivalent to Rmb3.83. The Indian third-party administrator of Bank of America Merrill Lynch, JP Morgan and Citic Securities is the sponsor and joint healthcare services is one of India’s largest Morgan Stanley were joint bookrunners on bookrunner with CICC. with a network of more than 4,750 the IPO. CZB plans to use the proceeds to hospitals across 20 states. The company Bilibili provides Japanese and Chinese strengthen its Core Tier 1 capital. provides services such as claims ANIMATIONS ûlLMSûANDû46ûDRAMAS ûANDûALSOû The IPO still needs approval from the administration and settlement, cashless allows users to upload self-generated videos. China Securities Regulatory Commission. hospitalisation, reimbursement, ONESMART INTERNATIONAL EDUCATION, IDENTIlCATIONûCARDS ûHOSPITALûNETWORKS û meanwhile, raised US$179m from its NYSE GOLDWIND TO SELL RIGHTS pre-authorisation, pre-policy medical IPO of 16.3m primary ADS at the bottom of checks and specialised value-added the US$11–$13 price range, representing a XINJIANG GOLDWIND SCIENCE AND TECHNOLOGY has services for corporate customers. forecast 2019 P/E of 19.6. secured board approval for a proposed A/H Bessemer Venture Partners, IDFC There is a 15% greenshoe of 2.45m rights issue of up to Rmb5bn (US$795m). Alternatives and Vikram Chhatwal are primary ADS. The wind turbine manufacturer plans to among the company’s shareholders and Deutsche Bank, Morgan Stanley and UBS led sell up to 711m shares (81.7% A/18.3% H) on are expected to be sellers on the IPO, the IPO. AûYET TO BE lNALISEDû FOR ûBASIS which will involve only secondary shares. OneSmart is a Shanghai-based K-12 after- Proceeds will be used to fund two wind school education company involved in farm projects, for working capital and to MIDHANI IPO 1.21 TIMES SUBSCRIBED tutoring and education tourism services. repay debts. Hotel chain operator GREENTREE HOSPITALITY The issue still needs approval from MISHRA DHATU NIGAM (Midhani) saw its GROUP raised US$143m from a smaller-than- shareholders and regulators. Rs4.2bn (US$64m) IPO 1.21 times planned IPO of 10.2m primary ADS at US$14 GUANGHUI ENERGY raised Rmb3.86bn from a subscribed when books closed on March each, down from the originally planned 3-for-10 issue of 1.52bn rights shares, 23. 19.4m ADS. representing about 96.7% of the total on The institutional tranche was 1.96 times Bank of America MerrillLynch, Morgan Stanley offer. The price was set at Rmb2.55, or a covered, the high net-worth investor piece and UBS were joint bookrunners. discount of 39.1% to the pre-deal spot. 12% covered and the retail 72% covered. China Securities was sole bookrunner. The Indian government sold 46.8m INKE FILES FOR HONG KONG IPO 0ROCEEDSûWILLûBEûUSEDûFORûAûLIQUElEDû shares, or 25% of the specialised metal natural gas project and for debt repayment. alloys maker, at the top of the Rs87–Rs90 Live-streaming provider INKEûHASûlLEDûFORûAû price range. Hong Kong IPO with CICC, Citigroup and CSRC APPROVES THREE FLOATS IDBI Capital and SBI Capital were the Deutsche Bank as joint sponsors. bookrunners. IFR reported earlier in March that the The China Securities Regulatory company planned to raise about US$200m– Commission has approved three IPO ICICI SECURITIES IPO NETS LESS $300m from the listing. applications, targeting combined proceeds Inke’s IPO comes after a marketing of Rmb2.6bn (US$413m). Of the three, WG ICICI SECURITIES said its IPO raised Rs35bn agency last year abandoned plans to acquire TECH (JIANGXI) is pre-marketing its Shanghai (US$537m), as opposed to its targeted AûSIGNIlCANTûSTAKEûINûTHEûCOMPANY IPO of about Rmb789m, with Shengang Rs40bn. Last May, Shenzhen-listed Shunya Securities as sponsor. The overall weak markets and concerns International Brand Consulting (Beijing) The photoelectric glass manufacturer over expensive valuations have resulted in announced it would buy a 48.2% stake in plans to make available not more than 24m tepid responses to recent Indian IPOs. Beijing Milaiwu Network Technology, which SHARESûFORûAûûFREE mOATû)TûWILLûSETûTHEûPRICEû When books closed last Monday, ICICI owns Inke, for Rmb2.89bn (US$457m). on April 2 and start bookbuilding two days Securities’ 44.2m-share public offer received Shunya said last December that it had later. Proceeds will be used for production, as bids for 34.7m, or 78% of the total. abandoned the plan, without giving any well as research and development. Earlier, ICICI Securities sold 33m shares to reasons. XIANHE CORP is also pre-marketing its a group of anchor investors. Including the !CCORDINGûTOûAûREGULATORYûlLING û)NKEû Shanghai IPO of about Rmb843m, with Citi anchor tranche, the 77.2m-share IPO was posted a loss of Rmb239m in 2017, Orient Securities as sponsor. 88% subscribed.

International Financing Review March 31 2018 75 In India, the anchor tranche is part of the Proceeds from the capital increase are IPO, but is outside the public piece targeting PHILIPPINES slated to support acquisitions and to pay retail and institutional investors. down debt. In the public offering, the institutional BPI SETS Ps50bn RIGHTS PRICE There was subscription for 5.78m of the tranche was 1.04 times covered, the high 6.818m shares offered on a one-for-three net-worth investors’ piece 36% covered and BANK OF THE PHILIPPINE ISLANDS has set the basis at €11.40, a 7.6% discount to TERP. the retail piece 88% covered. offer price for a Ps50bn (US$956m) 1-for- "ELlUSû)NSURANCEûHADûIRREVOCABLYû ICICI Securities went ahead and closed its 7.0594 rights issue at Ps89.50 per share, or committed to invest €12m in the IPO, despite not getting the full subscription. a 20% discount to last Tuesday’s Ps115 fundraising, with GIMV subscribing pro rata Under an Indian rule, a company can close close, according to a term sheet. to its 8.01% stake. ANû)0/ûIFûITûATTAINEDûAûûFREE mOATû0ARENTû The bank will sell 558.7m shares A second stage, dealing with the rump, ICICI Bank was selling 77.2m shares, or a between April 16 and April 25. wrapped up the same day. 24% stake, in ICICI Securities. Ayala will take up its entitlement and TINC shares closed on Monday at €11.75. Bank of America Merrill Lynch, Citigroup, subscribe to additional shares, as long as KBC and "ELlUSû"ANK were joint global CLSA, Edelweiss, IIFL and SBI Capital Markets its stake in BPI does not exceed 49.5% of coordinators and joint bookrunners were bookrunners. the issued and outstanding capital of the alongside Kempen and Degroof Petercam. The IPO of state-owned HINDUSTAN lender. AERONAUTICS also fell short as it raised Rs41bn Ayala held a 48.2% stake as of November versus a Rs42bn target. 2017, according to the BPI website. GERMANY The ICICI Securities’ subscription is the Joint bookrunners BPI Capital, Deutsche lowest among the ICICI Bank subsidiary Bank, Goldman Sachs and JP Morgan will GODEWIND COMPLETES DOWNSIZED mOATSû)#)#)û0RUDENTIALSû2SBNû)0/ûINûû underwrite the remaining shares. €375m FRANKFURT FLOAT was 10.48 times covered and ICICI BPI will use the proceeds mainly to ,OMBARDSû2SBNûmOATûINûûWASûû lNANCEûLOANûGROWTHû4HEREûISûAû DAYû Real estate business GODEWIND IMMOBILIEN times covered. lock-up on the issuer. completed its €375m Frankfurt IPO on ICICI Securities offers investment banking, Tuesday, although trading does not begin institutional broking, retail broking and until April 5. private wealth management services. THAILAND The deal was revised around pricing on 4HEûlRMSûSHARESûAREûEXPECTEDûTOûSTARTû Monday. Bookbuilding launched with a trading on the local exchanges on April 5. CP ALL SELLS SIAM MAKRO BLOCK primary base of €450m and an upsizing option to €550m. That decreased to €375m, LEMON TREE IPO BOOKS COVERED CP All has sold a larger than planned with 93.75m shares offered versus 112.5m Bt10bn (US$320.5m) block of SIAM MAKRO previously, with an option to increase sizing Books were covered 1.19 times for LEMON shares, according to people with to 137.5m. TREE HOTELS’ Rs10bn (US$153m) IPO. knowledge of the disposal. 0RICINGûREMAINEDûlXEDûATûõûPERûSHAREû The institutional tranche was 3.89 times The shares were sold at Bt44 each, off a 4HEREûISûNOûGREENSHOEûANDûTHEûFREE mOATûISû covered, the high-net-worth investor piece Bt43.50–Bt44.25 price range. 86.2%, with a market capitalisation of 12% covered and retail 12%. Books closed last CP All sold 230m shares, up from the €435m. Wednesday. Around 185.5m secondary originally planned 161.2m. CEO Stavros Efremidis said that the shares were sold at the top of the Rs54–Rs56 Around 45 investors participated in the COMPANYûHASûALREADYûIDENTIlEDûPROMISINGû price range. transaction and the top 10 investors were off-market acquisition opportunities with CLSA, JP Morgan and Kotak were joint allocated 73% of the shares. The investors a total estimated value of €3.7bn. global coordinators and joint bookrunners were a mix of local institutions and Godewind may use additional or existing with Yes Securities. Delhi-based Lemon Tree is international long-only investors. debt facilities or consider issuing new a mid-market chain with two main brands, 4HEûlNALûPRICEûREPRESENTSûAûû shares as consideration for potential future Lemon Tree and Red Fox. discount to the pre-deal close of Bt51. acquisitions. There are 90-day lock-up periods on the Efremidis, alongside CFO Ralf vendor and the company. Struckmeyer, members of the supervisory INDONESIA Credit Suisse and Siam Commercial Bank were board and other investors, put €60m into bookrunners on the sale. THEûmOAT ûHAVINGûSIGNEDûUPûFORûõMûONûTHEû HERMINA SET TO PRE-MARKET IPO original, larger deal. The book was highly concentrated, with Maternity and paediatric hospital owner THEûTOPûlVEûORDERS ûINCLUDINGûTHEû HERMINA GROUP plans to start pre-marketing management commitment, representing its IPO, expected to raise US$100m–$250m, EUROPE/MIDDLE around 60% of the deal and the top 20 this week. EAST/AFRICA approximately 85%. The deal was skewed The company owns 14 maternity facilities towards long-only accounts and real estate in Indonesia. specialists. Hermina will be the third hospital group BELGIUM Citigroup and JP Morgan were joint global to launch an IPO in Indonesia in recent coordinators and joint bookrunners with years. In 2013, Siloam Hospitals raised TINC WRAPS UP RIGHTS ISSUE Berenberg and Societe Generale. The fee on Rp1.4trn (US$102m) from a listing and, in the deal was 220bp, with a 55bp incentive 2015, Mitra Keluarga raised Rp4.5trn. Infrastructure specialist TINC said that there fee, split 35% each to the global Citigroup, Credit Suisse, DBS and Mandiri are was 84.82% take-up for its €77.72m rights coordinators and 15% each for the joint WORKINGûONûTHEûmOAT issue. bookrunners.

76 International Financing Review March 31 2018 EQUITIES EMEA

On March 8, Sanlam and local rival Proceeds from the capital increase will SERBIA Santam, said they would acquire 53.37% of lNANCEûPROPERTYûACQUISITIONSûANDûBEûUSEDû Saham Finances for around US$1bn, taking for investment in the current property BELGRADE GEARS UP FOR FIRST their joint holding to 100% as part of a plan portfolio. IPO IN ALMOST 80 YEARS to become a pan-African insurance group. There were acceptances for 10.75m shares The placing was launched immediately out of 11.25m offered on a 7-for-1 basis at Bankers will have to dust off their Serbian after the close, and there was a covered SKr90 per share. D Carnegie shares opened phrasebooks now that the Belgrade Stock message at 4:45pm London time. Wednesday at SKr122.80 and closed at Exchange has launched its IPO Go! 3ANLAMûANDû3ANTAMûlRSTûACQUIREDûAûû SKr123. programme, which could see the listing of stake in Saham in February 2016 and then Swedbank, in cooperation with Kepler three new companies before the end of the acquired an additional 16.63% stake in May Cheuvreux, was sole bookrunner. year. 2017. )NûAûVIDEOûlLEûPOSTEDûONûTHEûWEBSITEûOFû Deutsche Bank and JP Morgan were joint news agency Tanjug last Tuesday, CEO bookrunners. SWITZERLAND Sinisa Krneta said the programme is designed to strengthen the country’s HNA REFUSES TO BUDGE ON INVESTMENTûPROlLEûANDû)0/ûPIPELINEû4HEû SWEDEN GATEGROUP VALUATION last Belgrade IPO was in 1940. The project is supported by the BYGGHEMMA, BIG DISAPPOINTMENT HNA gave up on its ambitions to list airline Shareholder Special Fund (SSF) of the catering business GATEGROUP on Monday, just European Bank for Reconstruction and Home furnishings and building supplies a few hours before bookbuilding was due to Development (EBRD) and the Belgrade business BYGGHEMMA disappointed on debut close. In agreement with its cash-stricken Stock Exchange, he said. last Tuesday, opening above the SKr47.50 Chinese conglomerate owner, Gategroup As part of the project, IPO pricing at SKr48, but swiftly drifting said that there had been a “gap in valuation PricewaterhouseCoopers, through its below SKr45. under current market conditions”. OFlCESûINû"ELGRADEûANDû7ARSAW ûWILLû By the early afternoon, the stock hit an A banker involved said that there had support the exchange in talks with intraday low of SKr43 and dropped further been a very good deal but that HNA selected private companies. for a SKr42 close, down 11.5%. ultimately had held a different view on 4HEûlRSTûPUBLICûOFFERINGûISûLIKELYûTOûBEûMK Approximately 6.95m shares changed valuation. HNA needs the cash, making the FINTEL WIND, which intends to list its shares hands, representing just under a quarter of decision to cancel all the more unexpected, in Belgrade in May, according to CEO the IPO offering. but it does perhaps suggest that investors’ Tiziano Giovannetti. The stock closed at SKr41 on approach to a forced seller situation “The stock market listing brings many Wednesday. changed the dynamics. advantages and enables a more stable and The poor performance was surprising Gategroup was chasing a SFr2.1bn- lRMûlNANCIALûSTRUCTURE ûWHILEûTHEû considering that the deal could have priced SFr2.6bn (US$2.22bn-$2.75bn) valuation and experience of Fintel Energia can serve as a at the top of SKr45-SKr50 price guidance the SFr867.52m-SFr1.138bn deal size. benchmark for the future development of previous Thursday, with the company and One IPO investor said that the valuation the Belgrade bourse,” Tiziano is reported owner FSN Capital opting to price at the presented was “extremely expensive” and to have said. mid-point to deliver a positive aftermarket. he had dropped out of the deal early on, but MK Fintel Wind, a 46/54 joint venture Pricing of SKr47.50 represents a deal size another investor said that the valuation was between MK Group and Fintel Energia of SKr1.408bn (US$171m) and an initial fair and that the business was stronger than Group, was set up in 2008 and already market capitalisation of SKr5.1bn. The when it had been bought by HNA. operates two wind farms in Serbia, with a PRIMARYûPORTIONûWASûlXEDûATû3+RM It is unclear whether Gategroup’s combined installed capacity of 16.5 MW. Cornerstone investors ATP and Creades cancellation will affect HNA’s plans to list Last May, the CEO said that the company acquired an aggregate 5.26m shares in the Swiss cargo and ground handling company planned to offer 20%-40% of MK Fintel IPO, representing SKr250m of the total. SWISSPORT this year. Wind to raise about €60m. A 15% secondary greenshoe - now only to Credit Suisse and UBS were joint global be exercised in part or not at all - would lift coordinators and joint bookrunners with JP THEûFREE mOATûTOûûFROMûAûBASEûDEALûSIZEûOFû Morgan. Berenberg, ING, Santander and UniCredit SOUTH AFRICA 27.6%. were co-bookrunners. Lazard advised. The deal was more than three times SANLAM FINANCES MOROCCAN COVERED ûANDûTHEREûWASûSIGNIlCANTûZEROING û SENSIRION UP 27% AND FULLY BUY-OUT with approximately 35% of orders binned. EXERCISES GREENSHOE The top 20 orders took approximately 80% Financial services group SANLAM placed of the deal, with long-only accounts SENSIRION shares closed more than 27% above new shares in an accelerated bookbuilding REPRESENTINGûMOREûTHANûûOFûTHEûmOAT the SFr36 IPO price last Monday, following on Tuesday evening to raise R5.7bn Carnegie was sole bookrunner and joint three days of trading. Unsurprisingly, the (US$486.76m) to part-fund its joint bookrunner with Berenberg and SEB. 15% primary greenshoe on the Swiss sensor acquisition of Moroccan company Saham MAKERSû3)8ûmOATûWASûFULLYûEXERCISEDûONû Finances. D CARNEGIE REPORTS 95.5% Tuesday morning. The Johannesburg-listed company placed FUNDRAISING TAKE-UP As a result, the deal size rises to a total of 65.52m new shares at R87 per share, which SFr318m (US$335.5m), with the primary corresponds to a 5% discount to Tuesday’s Real estate group D CARNEGIE reported a 95.5% fundraising increasing to SFr96.6m from R91.61 closing price. The shares represent take-up on Wednesday for its SKr1.013bn 3&RMûPREVIOUSLYû4HEûFREE mOATûISûLIFTEDûTOû around 3.25% of the existing share capital. (US$122m) rights issue. 58.33% from 54.85% on the base deal.

International Financing Review March 31 2018 77 Sensirion closed on Tuesday at SFr46.29 Co-founder and chairman of the Rhine- The rights issue involves 27.74m shares and at SFr45.51 on Wednesday. based company Thomas Straumann remains on a one-for-three basis at 568p, a 32.8% Credit Suisse and JP Morgan were joint the largest shareholder with 47.9% of the discount to TERP, based on the March 26 bookrunners, with Vontobel as co- share capital. Vice-president Dominik close of 937.5p. The TERP is 845.13p, based bookrunner. Lazard advised. Ellenrieder owns 7.9% through NexMed, and on IFR calculations. Willi Miesch, CEO and co-founder, owns 6%. The record date was March 23, with NEAR-PERFECT RESULT FOR Bryan Garnier and Zurcher Kantonalbank subscription running from March 28 MOBILEZONE were joint bookrunners, with Kepler through to April 13. Cheuvreux as co-manager. Quarton HSBC and Peel Hunt are joint sponsors, There was a strong response for mobile International advised. joint corporate brokers, joint global retailer MOBILEZONE’s SFr81.6m (US$86.2m) coordinators and joint bookrunners with rights issue, which underpins its SFr59m Barclays. Rothschild is advising. purchase of Munster-based German UK telecoms provider TPHCom. JOHN LAING REPORTS 97% Mobilezone reported acceptances CONVIVIALITY PUSHED TO THE EDGE RIGHTS TAKE-UP for 8.57m shares out of 8.58m offered BY A COMEDY OF ERRORS on a four-for-15 basis at SFr9.50, Infrastructure specialist JOHN LAING GROUP has representing take-up of 99.85%. The CONVIVIALITY, the owner of the Bargain Booze reported take-up of 97.03% for its £216.5m remaining 12,164 shares were sold and Wine Rack chains, has called in the rights issue that will fund a pipeline of in the market. administrators after investors shunned a investment opportunities. Mobilezone shares are now trading £125m equity fundraising that was needed There were acceptances for 118.69m out SIGNIlCANTLYûHIGHERûTHANûBEFOREûTHEû to cover a forgotten tax bill and provide of the 122.32m shares offered on a one-for- announcement of the capital increase, and desperately needed capital. three basis at 177p, a 29.2% discount to the just above where shares were trading Earlier this month, the group issued a 249.9p TERP. before subscription began. The stock SERIESûOFûPROlTûWARNINGSûBLAMEDûONûAûaMû The rump of 3.62m shares was sold at closed on Monday up 2.55% at SFr12.08. miscalculation and margin erosion in its 251p on Monday. John Laing Group stock Bank Vontobel managed the rights issue. wholesale business. opened at 260p and was trading around On March 14, the company said it had 252p-253p in the early morning before MEDARTIS EXERCISES GREENSHOE AS discovered a £30m tax bill that was due for pushing up to 254p-255p in the run-up to SHARES CONTINUE TO CLIMB payment on March 29, the last working day midday, with pricing on the rump coming OFûTHEûlSCALûYEAR ûANDûTHEûSHARESûHAVEûBEENû shortly before that. The shares closed on Medical tech company MEDARTIS will issue suspended from trading since then. Monday at 256p. an additional 390,625 new shares after the The company only began talking to Barclays and HSBC were joint bookrunners. stabilisation manager for its heavily shareholders about a £125m rescue subscribed all-primary IPO exercised the fundraising a week before the payment was EQUITY RAISE FOR ACQUISITIVE RESTORE greenshoe option in full. due. Failing to attract investors, the Shares in the company, which company called in the administrators on /FlCEûSERVICESûBUSINESSûRESTORE is part- specialises in medical devices for treating March 29. funding its acquisition of TNT Business bone fractures and osteotomies, made a The company listed on AIM in London at the Solutions through a £51.5m placing. Restore, trading debut on March 23 at SFr54 per end of July 2013, having placed shares worth which provides document storage, scanning share, well above the SFr48 pricing level, £64m with institutional investors. Proceeds and shredding and IT equipment relocation and were changing hands at SFr70.50 late were used to pay off debt, buy out ECI Partners and recycling, is buying the record on March 29, up nearly 47% from the IPO. and other shareholders, and provide some management business of TNT for £88m. By exercising the greenshoe in full, the additional working capital to expand. The balance is dealt with through new proceeds increase to SFr142.6m (US$149m) Zeus Capital and Oriel Securities managed debt facilities from Barclays, RBS, Lloyds and FROMû3&RM ûANDûTHEûFREE mOATû the listing. Bank of Ireland. The placing comprised increases to 24.6%. 10.1m shares at 510p, an 8% premium to the GALLIFORD TRY CASH CALL FOR Friday March 23 close of 472p. EMEA EQUITIES CARILLION JV COSTS Cenkos ran the placing, which was BOOKRUNNERS: 1/1/2018 TO DATE oversubscribed and included new investors. Managing No of Total Share GALLIFORD TRY has set terms on a £157.6m Restore shares closed Monday at 507p. bank or group issues US$(m) (%) rights issue to cover the costs of a joint 1 Goldman Sachs 19 4,757.94 10.8 venture project it had been working on with 2 JP Morgan 14 3,361.93 7.7 Balfour Beatty and collapsed UK 3 Deutsche Bank 17 2,840.84 6.5 CONSTRUCTIONûlRMû#ARILLION 4 Citigroup 15 2,609.53 5.9 Housebuilder and construction group AMERICAS 5 UBS 7 2,248.26 5.1 Galliford Try said that, following the 6 Credit Suisse 9 1,858.44 4.2 compulsory liquidation of Carillion, it 7 Morgan Stanley 16 1,790.73 4.1 expected to incur additional costs related to UNITED STATES 8 Investec 9 1,594.28 3.6 the project of £30m-£40m and in its half- 9 Barclays 9 1,584.56 3.6 year results to December 31 2017 it ECM BANKERS AWAIT SPOTIFY DEBUT 10 SG 9 1,583.34 3.6 announced a related £25m exceptional cost. Total 237 43,860.93 The over-run costs on the project are SPOTIFY’s direct listing on Tuesday will Including all domestic and international deals and rights issues expected to absorb more than £150m of overshadow US ECM activity in the coming Source: Thomson Reuters SDC code: C4cr Galliford Try’s cash pile. week, while signs that investors are turning

78 International Financing Review March 31 2018 EQUITIES AMERICAS

bearish look set to pose a challenge to equity The company’s so-called ACTR drugs At Home shattered fourth-quarter issuers in the short term. incorporate antibodies that steer cancer expectations by reporting EPS of 50 cents A number of IPO aspirants are positioning killing T-cells directly to the tumour. and revenue of US$293.7m, beating Street to launch deals but none are on the calendar There have been some issues regarding estimates of 35 cents and US$286.4m. The to price in the week ahead. Among those the treatment’s safety. The FDA put a company is guiding for 2019 EPS to grow by that could launch IPOs near-term are clinical hold on a Phase I trial in December 30%–36% to US$1.18–$1.24 on 21%–22% biotech Alzheon, software company Zuora after two patients died during a Phase I revenue growth to US$1.15bn–$1.16bn. and the LatAm-based former DirecTV arm study, but removed the hold in February. “That they are able to continue to grow Vrio. Unum expects to have data to report from without an e-commerce strategy is Before these deals price, bankers and the ongoing study before the end of this amazing,” one banker involved in the issuers will witness Spotify’s direct listing year. underwriting syndicate told IFR. “This is experiment, a deal that sees no capital being really a unit growth story.” raised and leaves nearly all of the music- BAIN OUT OF BRIGHT HORIZONS At Home traded on Thursday at US$32.46. streaming service’s existing shareholders free to sell day one. 0RIVATEûEQUITYûlRMû"AINû#APITALûOFmOADEDûITSû CENTERBRIDGE CANCELS AMERICAN One banker said he expected Spotify to remaining 7.6% stake in child care operator RENAL SALE trade “like a beast in its own universe” with BRIGHT HORIZONS FAMILY SOLUTIONS on Monday early trading dictated by retail investors night. A collapse in the share price of AMERICAN familiar with the product. Morgan Stanley purchased 4.6m Bright RENAL ASSOCIATES prompted sponsor A congested week due to Friday’s trading Horizons shares, 4.5m of which came from Centerbridge Capital Partners to abandon a holiday did not stop some big deals from Bain, before reoffering them to investors at planned US$100m sell-down of its pricing in the past week, including the US$102.70, a 1.9% discount to last sale, to controlling stake in the kidney dialysis 53BNû)0/ûOFû#HINASûANSWERûTOû.ETmIX û raise US$473m. centre operator. iQiyi, a US$1.4bn forward sale of equity by Bright Horizons helped facilitate the deal American Renal’s shares dived 16.4% from Dominion Energy and a US$1bn M&A by repurchasing 800,000 of the shares. US$21.32 to US$17.83 while a syndicate led lNANCINGûFROMû'ENERALû-ILLS The offering still took some digesting, the by Bank of America Merrill Lynch, JP Morgan and All IPOs except “customer lifecycle stock tumbling 6.5% to US$97.86 in SunTrust Robinson Humphrey marketed the experience” provider IBEX priced, though Tuesday’s aftermarket. offering across two sessions during the three of the week’s Chinese newcomers Though this implies a distribution week. traded down on debut. shortfall and potential losses for the Centerbridge had been looking to sell In terms of follow-on activity, many underwriter, banks typically use hedging 4.5m out of a 5m-share offering to cut its issuers had to absorb steep share price falls strategies to limit their risk. stake to 40.4% from 54.2%. This would have to consummate their stock sales, though Bain Capital has now completed an BEENûITSûlRSTûSELL DOWNûSINCEûITûTOOKû there were a few casualties. American Renal incredibly lucrative monetisation process American Renal public in April 2016. Associates was the most notable withdrawal. since buying the company for US$1.3bn in Bankers close to the deal had warned after The decline of the DJIA and several 2008 and taking the company public at THEûlRSTûDAYûOFûMARKETINGûTHATû#ENTERBRIDGEû volatile sessions remain an obstacle to deal- US$22 a share in 2013. would not accept a price below the levels making though some types of deals such as The last Bright Horizons block comprised the stock was then trading at of around blocks will be muted around the quarter end 4m shares (with a 1m share buyback) US$18.40, hoping it would recover on the in any case. OFmOADEDûATû53ûEACHûINû.OVEMBER û second day of marketing. and there has been a string of incremental It proved more than an idle threat to UNUM CALLS ON INSIDERS FOR sell-downs since the IPO. discourage short-sellers. IPO SUPPORT American Renal announced just ahead of AT HOME GROWS SHAREHOLDER BASE pricing late on Wednesday that it was Early stage biotech UNUM THERAPEUTICS raised withdrawing the sale due to market US$69.2m for its new twist on cancer cell Sponsors AEA Investors and Starr conditions and because it was not in the therapy through its IPO. Investments elected to market for one day interests of its shareholders. Morgan Stanley and Cowen priced a offering an all-secondary sale of 6m AT HOME shares of 5.77m shares at US$12, the bottom of the last week. That is just 9.7% of outstanding US EQUITIES US$12-$14 marketing range. for the home decor retailer, but enough to BOOKRUNNERS: 1/1/2018 TO DATE This was despite good levels of result in an increase of more than 40% in the Managing No of Total Share oversubscription and insider commitments STOCKSûFREEûmOAT bank or group issues US$(m) (%) for up to US$37.5m of the deal. Bank of America Merrill Lynch, Goldman Sachs 1 Morgan Stanley 43 8,620.24 16.8 Unum’s founder Dario Campana is the and Jefferies priced a fully sized deal at 2 JP Morgan 47 6,041.19 11.8 company’s largest shareholder with a 21.7% US$30.00, a slim discount to the last sale 3 Goldman Sachs 40 5,590.31 10.9 stake, followed by Atlas Venture (13.9%) and price of US$30.56 and an all-in concession of 4 Barclays 27 5,236.51 10.2 Fidelity Investments (9.9%). 4.3%. 5 Citigroup 32 4,228.38 8.3 Seattle Genetics, a collaborative partner, The two sponsors reduced their holdings 6 BAML 35 3,446.89 6.7 invested US$5m in a concurrent private to 23.4m and 17.8m shares respectively, 7 Deutsche Bank 18 2,570.18 5.0 placement. leaving them with a still-sizable combined 8 Credit Suisse 23 2,304.51 4.5 Unum is using the money to continue a 75% stake. 9 RBC 19 2,098.07 4.1 Phase I trial of a new type of cell therapy At Home’s blowout quarter reported on 10 UBS 14 1,393.03 2.7 drugs. Similar to T-cell developers, the Friday also motivated the sellers to market Total 203 51,223.77 company is seeking to use genetically the deal, giving underwriters more time to Including all domestic and international deals and rights issues engineered cells to destroy cancer cells. get the story out to new investors. Source: Thomson Reuters SDC code: C3r

International Financing Review March 31 2018 79 BIOTECHS PAY UP FOR EQUITY

Overstock pulls planned Cancer specialist MACROGENICS is making a big bet on its immuno-oncology. The company raised US$95.6m in an equity share sale raising on Tuesday night that will allow it to bring its experimental cancer drugs into „ US Short-sellers gain fuel on quixotic CEO the clinic. The funding did not come cheap and Is OVERSTOCK.COM, the internet retailer cum Overstock provided additional fodder for MacroGenics shares plunged while the digital currency incubator, for sale or not? detractors on its fourth-quarter earnings call on deal was being marketed. Leerink Partners, That is unclear after the company sought to March 15 by unveiling plans to pursue a “classic Deutsche Bank and Evercore priced 4.5m sell fresh stock while simultaneously pursuing internet growth strategy” – specifically high shares at US$21.25 on Tuesday night, a the sale of a traditional retail business whose growth, negative net income, funded out of a further 9.9% discount to the US$23.60 last proceeds were to have been used to reward negative cash conversion cycle. sale and all-in down 26% from Monday’s shareholders. “We have already turned on the jets, and will close of US$28.91. Overstock muddled things further by opting continue to demonstrate that our growth engine 4HEûOFFERINGûWASû-ACRO'ENICSûlRSTû to pull the proposed sale of 4m shares, following is far more efficient,” Patrick Byrne said in the stock offering since 2015, when it raised a withering 18% sell-off over the two-day fourth-quarter earnings release. US$130m at US$37.00 a share. Proceeds marketing period to US$36.60 - in January, they Confusingly, Byrne appeared to cool on selling from that offering were used to fully fund fetched as much as US$89.80. the e-commerce business. a Phase III trial of its breast cancer drug Overstock traded early on Thursday at “This work is ongoing and we will provide an margetuximab. MacroGenics expects to US$37.05, up 1.2%. update when appropriate,” added Byrne in the publish the results from that study next Guggenheim Securities, sole bookrunner, was release. “That said, our philosophy has always year. hired last year to explore strategic alternatives been to run every asset like we intend to own MacroGenics has eight other drugs in its for the company’s internet retail businesses. it forever and our strategy discussion will be clinical pipeline, including two early-stage Overstock had planned to use the proceeds framed in that mindset.” immuno-oncology treatments for solid from the stock sale to repay a US$40m term loan The e-commerce unit posted a pre-tax loss tumours. The upside potential of some of to PCL, a Utah LLC that is controlled by John last year of US$25.4m, only the unit’s second- THESEûDRUGSûISûNOTûREmECTEDûINû and Dorothy Byrne, the brother and mother of ever annual loss, with its blockchain Medici unit MacroGenics’ current stock price. Overstock CEO Patrick Byrne. losing another US$22.3m. Overall revenue fell “It is our belief that successful execution There are plenty of reasons for concern. 3% to US$1.75bn. of the early-stage immuno-oncology Overstock revealed on March 1 that the SEC Overstock has plenty of critics that at last count programme is likely to be a bigger value was conducting an investigation related to a had sold short 7.3m shares, 25% of outstanding – driver of the stock [than margetuximab],” planned US$250m token sale through its tZero that number is almost certain to grow. said analysts at H.C. Wainwright in a note subsidiary. Stephen Lacey to clients. The immuno-oncology drug MGD013 is undergoing a Phase I/II safety study while American Renal was already trading UNSPECIlEDûAMOUNTûOFûSHARESûSOLDûINûTHEû THEûSECONDûDRUGû-'$ûWILLûSOONûlLEûANû below its US$22.00 IPO price before the deal deal. Tang Capital is an investment vehicle lLINGûANûINVESTIGATIONALûNEWûDRUGû launched. for biotech entrepreneur Kevin Tang, who is application with the FDA, and begin Phase “Centerbridge have been patient and will Heron’s chairman of the board of directors. I later this year. continue to be patient,” one banker said. Tang is also the company’s second largest Cancer diagnostics specialist INVITAE shareholder with a 13.1% stake pre-offer. raised US$50m that will help the company HERON SWOOPS INTO EQUITY MARKET Fidelity is Heron’s top shareholder with a MEETûITSûLONG TERMûlNANCIALûGOALSû4HEû 14.8% interest in the company. company paid a high price for its new HERON THERAPEUCTICS capitalised on its recent Heron is the second offering from a Tang- funding, as JP Morgan and Cowen priced stock gains since it reported positive trial backed biotech this month. La Jolla 11.1m shares at US$4.50. results for a non-addictive painkiller two Pharmaceutical raised US$100m on March 14 Invitae said it could accomplish its goals weeks ago with a new equity raise. with Cowen acting as the sole bookrunner. without new acquisitions, but did not hint Jefferies, Cowen and Evercore priced an PTC THERAPEUTICS raised US$108m of new that an equity raising was coming. Its stock upsized US$156m offering of 6m shares at funding for its EU-approved Duchenne price cratered 22.7% while the deal was US$26 on Wednesday after marketing Muscular Dystrophy drug Translarna, but being marketed on Tuesday and priced at a TOWARDSû53MûOFûlXEDûPROCEEDS the pricing terms were not ideal. further 15% discount to Tuesday’s US$5.41 The offer was set at a 21% premium to Credit Suisse and Citigroup priced 4m shares closing price. Heron’s price on March 16, when it on par with the US$26.04 last sale on The company announced earlier this announced that its lead drug hit its Wednesday night after the stock sold off month that it hopes to have one million endpoints in a Phase III trial. 15.3% during the one day marketing effort. customers and US$500m of revenue by The drug is a non-opiod treatment for Though it is not approved for use in the 2020, nearly double the analyst forecast of pain after surgery, and a potential US, Translarna generated US$145m of global US$273m according to Thomson Reuters. alternative to addictive painkillers. Proceeds sales last year in markets where the DMD It also hopes to achieve 50% gross margin will be used to fund a new drug application drug is approved. Its other DMD drug and operate at break-even level by 2020. with the FDA in the second half of this year. %MmAZAûWASûAPPROVEDûBYûTHEû&$!ûLASTûYEARû Medical equipment company ZOSANO The offering was backed by an indication and generated US$28.8m in revenue PHARMA generated a windfall for short of interest from Tang Capital for an following its commercial launch in May. sellers that covered their positions on the

80 International Financing Review March 31 2018 EQUITIES AMERICAS

migraine headache drug developer’s Dell will be hoping for a better reception DOCUSIGN SHAPES AS NEXT UNICORN IPO US$50m stock offering. than its last IPO effort, SecureWorks in Over 30% of Zosano shares were out on April 2016. Digital signature software company DOCUSIGN borrow as of March 15 while the stock was SecureWorks, a still loss-making cyber PUBLICLYûlLEDûFORûANû)0/ûTHATûCOULDûLAUNCHûINû trading at US$15.50. BTIG priced 10m security provider, went public at US$14.00 April. shares on Wednesday night at US$5.00, but has not seen those levels since the DocuSign is potentially shaping as the INDICATINGûAûûPROlTûFORûTHEûSHORTS early months after the IPO, trading as low NEXTûHOTûhUNICORNvû)0/ ûCONlRMINGûITSû Zosano’s funding need was well known. as US$7.86 earlier this month. ambitions to go public three years after a The company had just US$11m of cash at US$300m private funding round valued it at the end of 2017 and its ability to sustain CERIDIAN HCM, SMARTSHEET FILE US$3bn. operations is a going concern for the FOR NEAR-TERM IPOS The company generated US$381.5m of company’s accountants. revenue last year, up 52% on the prior year The company is looking to fund a long- Dropbox’s spectacular debut on March 23 and an impressive pace of growth term safety study of its Zotrip patch, which has had the desired effect in rejuvenating considering its scale. provides an extended release dose of the the tech IPO market, notwithstanding In the same period, DocuSign made a net drug zolmitriptan for treating migraine broader pressure on stock prices in the loss of US$115.4m and generated adjusted headaches. sector. Ebitda losses and negative operating cash Proceeds extend the company’s cash to Last Monday saw CERIDIAN HCM and ANDûNEGATIVEûFREEûCASHûmOWûTHOUGHûITûWASû US$59m, two years’ funding at the current SMARTSHEET join Pivotal Software in CLOSEûTOûOPERATINGûCASHûmOWûBREAKEVEN  BURNûRATEû)TSûlRSTûDATAûCUTûFROMûAûSIX SHOWINGûTHEIRûHAND ûPUBLICLYûlLINGûFORû)0/Sû Founded in 2003, DocuSign has a month safety study is expected in the that could come in April. subscription-based cloud-based platform fourth quarter. Investors have proved hungry this year used by 350,000 companies and hundreds of for anything related to cloud or millions of users. TECH IPOS READY FOR APRIL LAUNCH, subscription software, and bankers are !NûEIGHT lRMûSYNDICATEûLEDûBYûMorgan MARKETS WILLING happy to oblige. The caveat is that bankers Stanley and JP Morgan are slated to lead the have long predicted a tech IPO revival only offering. Dell Technologies/VMWare-backed PIVOTAL to be sorely disappointed, which is why Earlier this year and following a lengthy SOFTWARE, a provider of “cloud-native” some prefer to believe it when they see it. search, DocuSign hired Dan Springer, the software used by software developers, #ERIDIANû(#-ûlLEDûFORûAû53Mû)0/û former CEO of Responsys, to become its PUBLICLYûlLEDûONû-ARCHûûFORûANû)0/ûTHATû WITHûAû lRMûSYNDICATEûLEDûBYûGoldman CEO. could come as early as next month. Sachs, JP Morgan, Credit Suisse and Deutsche $OCU3IGNûlRSTûlLEDûCONlDENTIALLYûONû Morgan Stanley, Goldman Sachs and Bank. January 22. CitigroupûAREûSLATEDûTOûLEADûANû lRMû Ceridian is a sponsor-backed company underwriting syndicate. WHOSEûmAGSHIPûCLOUDû(#-ûPLATFORMûISû HOMOLOGY FOCUSES ON INSIDER Previous reports have speculated the IPO called Dayforce. SUPPORT FOR IPO could value Pivotal at US$5bn-$7bn. This Like Pivotal, Ceridian is more mature would imply a US$500m-plus offering (as than the typical tech IPO and will be going After upsizing and pricing its US$144m IPO opposed to the US$100m placeholder). public having demonstrated success in at the top of the range, HOMOLOGY MEDICINES Pivotal’s plans are separate from Dell’s transitioning to a SaaS/cloud software delivered a powerful debut only to fade as its own recent deliberations about returning business model. opening session wore on. to public markets four years after founder Ceridian has proved a long haul for Homology opened at US$23.00 on Michael Dell took it private in league with major shareholders Thomas H. Lee and Wednesday and ticked to a high of sponsor Silver Lake. Fidelity National Financial/Cannae (Cannae US$24.40, only to fall to US$18.66 at the Pivotal was once a joint venture of is a publicly traded company, recently split close, a respectable 16.6% above offer but VMware, EMC and General Electric but off from Fidelity National). They bought hardly spectacular. came under Dell’s control after its the business way back in pre-crisis era Bank of America Merrill Lynch, Cowen and US$67bn EMC acquisition in 2016. 2007, the long holding period attesting to Evercore found takers for 9m shares, up from Pivotal grew revenue 22% to US$509.4m how much they have had to do to make it 6.7m at launch, at US$16.00 each on last year, but recorded a net loss of work. Tuesday night. US$163.5m. The turning point was Ceridian’s That only 2.9m of the shares that were Even after adding back stock comp and purchase of Dayforce in 2012. This has sold changed hands pointed to tight intangible asset amortisation, it is still bolstered revenue growth and led to a allocations. deep in the red. greater proportion of recurring/cloud Orders materialised quickly enough to Since shifting its focus to its revenue in its sales mix (more than half of accelerate pricing by one day. The deal was subscription-based “Pivotal Cloud total revenue). then upsized on Tuesday morning as an Foundry” platform, Pivotal’s subscription Smartsheet is more of a traditional accommodation for new investors as customer count has grown to 319. software IPO with US$111.3m of revenue insiders’ original commitments for up to Subscription revenue grew 73% to US$259m last year, an impressive growth rate of 66%, US$50m of the shares went unchanged. last year, a year in which these recurring an excellent gross margin of 81%, a good “Management wanted to reward its revenues overtook services revenue. spread of customers (92,000) and a high shareholders,” a syndicate banker that No doubt this point will be central to retention rate. worked on the deal told IFR. “They also liked any IPO pitch given the high multiples Morgan Stanley, JP Morgan, Jefferies and RBC some of the long-only institutions that took investors are attaching to SaaS revenues. Capital Markets are slated to lead a seven- one-on-one meetings.” 0IVOTALûlRSTûlLEDûCONlDENTIALLYûONû lRMûUNDERWRITINGûSYNDICATEûONûTHEûDEAL û Conversion from one-on-one meetings December 15. nominally sized at US$100m. with the management team was about 75%,

International Financing Review March 31 2018 81 according to the banker. This was high for a -ARCHû ûHAVINGûlLEDûCONlDENTIALLYûONû the Brazilian toy retailer it purchased in biotech IPO. December 22. 2012. The banks concentrated allocations with Barclays, UBS and CIBC Capital Markets are The alternative asset manager pulled the 20 institutions, leaving a “skinny tail” for slated to lead the offering. plug on the toy retailer’s IPO on Thursday, others. The deal is following in the footsteps of March 15, well ahead of planned pricing Homology’s lead drug uses a gene transfer other successful island banking IPOs in this Tuesday. method – homologous recombination that recent years, including BNP Paribas’ First “The price level was not up to the gave the company its name – to treat a rare Hawaiian Bank and the Carlyle-backed Bank seller’s expectations, so they decided not liver disorder that causes a toxic build-up of OFû.4û"UTTERlELDûû3ONûFROMû"ERMUDA to move forward,” one banker involved in amino acids in the brain. Proceeds will be These banks have been able to secure the process told IFR. “It was pretty clear used to initiate a Phase I/II trial, develop premium multiples in part because of their given what was going on in the market other product candidates and build its strong market positions in less competitive that the price was not going to get any manufacturing capacity. island markets. better.” 4HEûCOMPANYûEXPECTSûTOûHAVEûSUFlCIENTû Shares in FirstCaribbean already trade on BTG Pactual, Credit Suisse, Itau, Bradesco, cash to fund operations for the next two the Barbados Stock Exchange and other Goldman Sachs and BB Investimentos had years, having also received a cash boost from local exchanges, but CIBC currently holds marketed 36.9m shares, including 14.8m signing a partnership with Novartis last 91.7% of the shares. by Carlyle and other sellers, at R$20.30– November. Last year saw FirstCaribbean report net $26.30, bracketing a market capitalisation income of US$127.6m from interest income of just US$360m-$470m. of US$424.9m and non-interest income of Carlyle’s reluctance to transact is BARBADOS US$157.3m, the former representing a understandable, given that the base return on tangible shareholders’ common OFFERINGûREPRESENTEDûAûûFREEûmOATû ûTHEû FIRSTCARIBBEAN HEADS TOWARDS IPO equity of 12.2%. company was essentially selling out on day The bank intends to pay quarterly cash one. Canadian major CANADIAN IMPERIAL BANK OF dividends starting at US$1.50 a share. Ri Happy had marketed itself promising COMMERCE is eyeing an NYSE IPO of its growth through omni-channel sales in a Caribbean banking arm FIRSTCARIBBEAN fragmented Brazilian marketplace for toy INTERNATIONAL BANK in the next few months. BRAZIL retailers. FirstCaribbean, which has US$12.4bn of The company, which operates 259 stores assets and operates in Barbados, the RI HAPPY OWNER LEAVES DISAPPOINTED in 25 Brazilian states and three online sales Bahamas, the Cayman Islands, Jamaica, channels, generated adjusted Ebitda of Trinidad and Tobago and the Dutch Carlyle Group was less than happy with R$140.7m on revenue of R$1.7bn in 2017, #ARIBBEAN ûlLEDûPUBLICLYûFORûAû)0/ûONû investor receptivity to the IPO of RI HAPPY, and a return on invested capital of 28.7%.

ECM DEALS: WEEK ENDING 29/3/2018 Stock Country Date Amount Price Deal type Bookrunner(s) ELMO Software Australia 27/03/2018 A$45m A$5.40 Follow-on (Primary) MS, Wilsons TINC Belgium 26/03/2018 €78m €11.40 Rights issue KBC, Belfius Bank, Kempen, Degroof Petercam Iqiyi Cayman Is. 28/03/2018 US$2.25bn US$18.00 IPO (Primary) GS, Credit Suisse, BAML Onesmart International Education Cayman Is. 27/03/2018 US$179.3m US$11.00 IPO (Primary) MS, Deutsche Bank, UBS Bilibili China 27/03/2018 US$483m US$11.50 IPO (Primary) BAML, JP Morgan, MS GreenTree Hospitality Group China 27/03/2018 US$143m US$14 IPO (Primary) BAML, MS, UBS OneSmart International Education China 27/03/2018 US$179m US$11 IPO (Primary) Deutsche Bank, MS, UBS Godewind Immobilien Germany 27/03/2018 €375m €4.00 IPO (Primary) Citigroup, JP Morgan, Berenberg, Societe Generale Mishra Dhatu Nigam India 23/03/2018 Rs4.2bn Rs90 IPO (Secondary) IDBI Capital, SBI Capital Lafarge Africa Nigeria 26/03/2018 N131.65m N42.50 IPO (Primary) Chapel Hill Denham Advisory, Standard Chartered Sanlam South Africa 27/03/2018 R5.7bn R87 Accelerated follow-on (Primary) Deutsche Bank, JP Morgan Bygghemma Sweden 26/03/2018 SKr1.408bn SKr47.50 IPO (Primary, Secondary) Carnegie, Berenberg, SEB D Carnegie Sweden 26/03/2018 SKr1.013bn SKr90 Rights issue Swedbank/Kepler Cheuvreux Mobilezone Switzerland 26/03/2018 SFr81.6m SFr9.50 Rights issue Bank Vontobel Siam Makro Thailand 27/03/2018 Bt10bn Bt44 Follow-on (Secondary) Credit Suisse, Siam Commercial Bank John Laing Group UK 26/03/2018 £216.5m 177p Rights issue Barclays, HSBC At Home US 27/03/2018 US$180.0m US$30.00 Follow-on (Secondary) BAML, GS, Jefferies, Barclays, Guggenheim, MS Bright Horizons Family Solutions US 26/03/2018 US$473.0m US$102.70 Accelerated follow-on (Secondary) MS Dominion Energy US 27/03/2018 US$1.35bn US$67.85 Accelerated follow-on (Primary) GS, Credit Suisse, Barclays, Citigroup, JP Morgan General Mills US 27/03/2018 US$1.00bn US$44.00 Follow-on (Primary) GS, BAML, Barclays, Citigroup, Deutsche Bank, MS Heron Therapeutics US 28/03/2018 US$156.0m US$26.00 Follow-on (Primary) Jefferies, Cowen, Evercore Homology Medicines US 27/03/2018 US$144.0m US$16.00 IPO (Primary) BAML, Cowen, Evercore Invitae US 27/03/2018 US$50.0m US$4.50 Follow-on (Primary) JP Morgan, Cowen MacroGenics US 27/03/2018 US$95.6m US$21.25 Follow-on (Primary) Leerink Partners, Deutsche Bank, Evercore PTC Therapeutics US 28/03/2018 US$108.0m US$26.04 Follow-on (Primary) Credit Suisse, Citigroup Unum Therapeutics US 28/03/2018 US$69.2m US$12.00 IPO (Primary) MS, Cowen Zosano Pharma US 28/03/2018 US$50.0m US$5.00 Follow-on (Primary) BTIG

82 International Financing Review March 31 2018 STRUCTURED EQUITY

The paper products maker plans to use BEFOREûlNALISINGûPRICINGûATûTHEûAGGRESSIVEû the proceeds for a thermal power project ends of revised talk. STRUCTURED EQUITY and a paper production project. Chegg shares fell 5% on the marketing to Sinolink Securities is the sole bookrunner. US$20.34, but are still up 24% year-to-date. Shareholders will review the proposal on The company offset some of that impact by CHINA April 10. buying back US$20m of stock. It also purchased SHANGHAI BIKONG LONGXIANG INVESTMENT a capped call to offset economic dilution to share CBS APPROVED FOR PING AN BANK MANAGEMENT proposes a placement of three- prices above the US$26.95 base conversion price. year exchangeable bonds of up to Rmb1.1bn There are reasons to be bullish. Revenue PING AN BANK has obtained China Banking with the shares of BEIJING KINGEE CULTURE from Chegg Services, the company’s online Regulatory Commission approval to issue DEVELOPMENT as the underlying. content and tutorial business, grew 37% last six-year convertible bonds of up to Shanghai Bikong holds 154m Beijing YEARûTOû53M ûAûSIGNIlCANTûPORTIONûOFû Rmb26bn (US$4.14bn). Proceeds will be used Kingee shares, or 18.41% of the company’s US$70.6m of overall revenue. for Core Tier 1 capital. issued capital. Chegg is guiding toward full-year revenue The deal still needs approval from the Beijing Kingee is a producer of gold of US$295m–$300m, including US$240m– China Securities Regulatory Commission. jewellery and precious metal products. $243m from Chegg Services, on continued Parcel delivery company YTO EXPRESS GROUP expansion of online services. has secured board approval for a proposed Chegg is investing heavily to build a issue of six-year CBs of up to Rmb3.65bn. UNITED STATES library of online content that now includes Proceeds will be used mainly for logistics 20m textbook and asked and answered projects. Shareholders will review the CHEGG HATCHES NEW CB TO solutions, up 7m from the end of 2016. Test proposal on April 16. FUEL GROWTH preparation and maths solutions are MYLIN HOLDING GROUP has applied to the planned as future product extensions. Shenzhen Stock Exchange for a placement CHEGG, the self-dubbed “chicken and egg” of exchangeable bonds of up to Rmb1.5bn textbook rental company that went public in GLOBAL CONVERTIBLE OFFERINGS – EMEA with shares of DEZHAN HEALTHCARE as the 2013, jumpstarted its new subscription-based BOOKRUNNERS: 1/1/2018 TO DATE underlying. online tutoring business with US$300m Managing No of Total Share Mylin holds 745m Dezhan shares, or RAISEDûFROMûTHEûSALEûOFûAûlVE YEARû#" bank or group issues US$(m) (%) 33.25% of the company’s issued capital. The transition has proven volatile, a 1 Deutsche Bank 3 922.29 19.4 Shenwan Hongyuan Securities is the sole FACTORûTHATûBENElTEDûPRICINGûOFûTHEû#" 2 SG 5 607.79 12.8 bookrunner. Morgan Stanley and Bank of America Merrill 3 BNP Paribas 4 584.09 12.3 Dezhan manufactures chemicals and Lynch on Wednesday morning launched a 4 HSBC 3 343.25 7.2 pharmaceuticals. US$250m base deal size with price talk of a 5 JP Morgan 3 326.58 6.9 0%-0.5% coupon and 27.5%-32.5% conversion 6 Goldman Sachs 2 243.58 5.1 CB APPROVAL FOR SHANYING premium. A credit spread of L+275bp and =6 Citigroup 2 243.58 5.1 implied vol of 40, versus 44 90-day realised, 8 Credit Agricole 2 204.21 4.3 SHANYING INTERNATIONAL has secured board were offered up as support. 9 Barclays 2 203.25 4.3 approval for a proposal to issue six-year The banks bumped the deal size to 10 Natixis 2 181.54 3.8 convertible bonds of up to Rmb2.3bn 53MûANDûlRMEDûUPûTALKûATû ûlXEDû Total 15 4,758.89 (US$366m). and 30%-32.5% on Wednesday afternoon, Including exchangeables. Source: Thomson Reuters SDC code: C09d GLOBAL CONVERTIBLE OFFERINGS ALL INTERNATIONAL ASIAN CONVERTIBLES BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE ALL INTERNATIONAL US CONVERTIBLES Managing No of Total Share Managing No of Total Share BOOKRUNNERS: 1/1/2018 TO DATE bank or group issues US$(m) (%) bank or group issues US$(m) (%) Managing No of Total Share 1 Goldman Sachs 17 4,188.88 13.6 1 Goldman Sachs 3 2,289.76 37.5 bank or group issues US$(m) (%) 2 Morgan Stanley 15 1,933.62 6.3 2 Daiwa Securities 3 524.29 8.6 1 BAML 11 1,594.62 16.8 3 JP Morgan 17 1,757.52 5.7 3 BNP Paribas 2 475.42 7.8 2 Morgan Stanley 13 1,590.04 16.8 4 BAML 13 1,751.48 5.7 4 Sumitomo Mitsui Finl 2 401.79 6.6 3 JP Morgan 13 1,270.54 13.4 5 Citic 3 1,413.99 4.6 5 Nomura 3 375.42 6.1 4 Goldman Sachs 10 1,020.87 10.8 6 Deutsche Bank 6 1,366.03 4.4 6 China Merchants Secs 1 333.33 5.5 5 RBC 4 610.54 6.4 7 BNP Paribas 7 1,192.85 3.9 =6 Citic 1 333.33 5.5 6 Barclays 4 597.20 6.3 8 China International 2 1,080.66 3.5 8 Credit Suisse 2 205.48 3.4 7 Wells Fargo 6 360.42 3.8 9 CSC Financial 2 941.03 3.1 9 Morgan Stanley 1 200.00 3.3 8 Credit Suisse 3 341.67 3.6 10 Barclays 6 800.45 2.6 10 JP Morgan 1 160.40 2.6 9 Citigroup 4 275.00 2.9 Total 107 30,829.85 Total 16 6,110.05 10 Jefferies 3 246.70 2.6

Including exchangeables. Including exchangeables. Total 27 9,466.07 Source: Thomson Reuters SDC code: C9 Source: Thomson Reuters SDC code: M10 Source: Thomson Reuters SDC code: C9a

EQUITY-LINKED DEALS WEEK ENDING: 29/3/2018 Issuer Country Date Amount Greenshoe Tenor Coupon (%) Premium (%) Bookrunner(s) Extendicare Canada 26/03/2018 C$110.0m C$16.5m 7y 5.0 40.0 RBC CM, BMO CM, CIBC WM, Scotiabank, Echelon Wealth Chegg US 28/03/2018 US$300.0m US$45.0m 5y 0.3 32.5 Morgan Stanley

International Financing Review March 31 2018 83 NOW AVAILABLE IN THOMSON REUTERS EIKON

IFR ASIA: AT THE HEART OF ASIA’S CAPITAL MARKETS

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A THOMSON REUTERS SERVICE GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (29/3/2018)

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+ Kyrgyzstan B2 Ba3 Albania B1 Ba2 B+ BB Latvia A3 Aaa A– pAAA A– AAA Andorra W BBB AAA BBB p A– Lebanon B3 B1 B– B+ B– B– Angola B2 n B1 B– B– B n B Lesotho B+ BB+ Argentina B2 B1 B+ BB– B p Liechtenstein Aaa AAA AAA Armenia B1 p Ba2 B+ p BB– Lithuania A3 Aaa A AAA A– AAA Aruba BBB+ BBB+ BBB– Luxembourg Aaa Aaa AAA AAA AAA AAA Australia Aaa Aaa AAA nAAA AAA Macau Aa3 Aa2 AA AAA Austria Aa1 Aaa AA+ AAA AA+ AAA Macedonia (FYR) BB– BB BB p BB+ Azerbaijan Ba2 Ba2 BB+ BB+ BB+ BB+ Malaysia A3 A1 A– A+ A– A Bahamas Baa3 n Baa1 BB+ BBB– Maldives B2 Ba3 B+ Bahrain B1 n Ba2 B+ BB– BB– BBB– Malta A3 p Aaa A– p AAA A+ AAA Bangladesh Ba3 Ba2 BB– BB– BB– BB Mauritius Baa1 A2 Barbados Caa3 Caa2 CCC+ nCCC+ Mexico A3 n A1 BBB+ A+ BBB+ A Belarus B3 B3 B B B– pB– Moldova B3 B2 Belgium Aa3 Aaa AA AAA AA– AAA Mongolia B3 B1 B– B B– p Belize B3 B1 B– B– Montenegro B1 Ba1 B+ AAA Bermuda A2 Aa3 A+ AA+ Montserrat BBB– BBB– Bolivia Ba3 Ba2 BB nBB BB– Morocco Ba1 p Baa2 BBB– BBB+ BBB– BBB Bosnia Herzegovina B3 B3 B BB– Mozambique Caa3 n Caa2 SD CCC RD B– Botswana A2 Aa3 A– A+ Namibia Ba1 n Baa2 BB+ BBB– Brazil Ba2 n Ba1 BB– BB+ BB – BB Netherlands Aaa Aaa AAA AAA AAA AAA Bulgaria Baa2 A3 BBB– A– BBB A– New Zealand Aaa Aaa AA AAA AA AAA Cambodia B2 B1 Nicaragua B2 p B1 B+ BB– B+ Cameroon B2 Ba2 B BBB– B BB+ Nigeria B2 B1 B B B+ nB+ Canada Aaa Aaa AAA AAA AAA Norway Aaa Aaa AAA AAA AAA AAA Cape Verde B BB– B B+ Oman Baa3 n Baa2 BB BB+ BBB– n BBB Cayman Islands Aa3 Aa2 Pakistan B3 B2 B B B B Chile Aa3 n Aa1 A+ AA A AA Panama Baa2 p A3 BBB AAA BBB A China A1 Aa3 A+ A+ A+ A+ Papua New Guinea B2 n B1 B+ n BB Colombia Baa2 A3 BBB– BBB+ BBB Paraguay Ba1 Baa3 BB BB+ BB p Congo (DR) B3 n B3 CCC+ CCC+ Peru A3 A1 BBB+ A BBB+ A– Congo (Rep) Caa2 n B2 CCC+ BBB– CC B+ Philippines Baa2 A3 BBB BBB+ BBB Cook Islands B+ AAA Poland A2 Aa3 BBB+ A A– AA– Costa Rica Ba2 n Baa3 BB– n BB+ BB Portugal Ba1 p A1 BBB– AAA BBB AA Cote d’Ivoire Ba3 Baa3 B+ BBB– Qatar Aa3 n Aa3 AA– n AA AA– n AA Croatia Ba2 Baa3 BB+ c BBB+ c BB BBB Ras al–Khaimah A AA+ A AA+ Cuba Caa2 Caa2 Romania Baa3 A3 BBB– A– BBB– BBB+ Curacao A– n A– Russia Ba1 p Baa3 BBB- BBB– BBB– p BBB– Cyprus Ba3 p A3 BB+ p AAA BB p BBB Rwanda B2 B1 B B B+ B+ Czech Rep A1 Aa2 AA– AA+ A+ p AA+ St Vincent & Gren B3 Ba3 Denmark Aaa Aaa AAA AAA AAA AAA San Marino BBB– BBB+ Dominican Rep Ba3 Ba1 BB– BB+ BB– Saudi Arabia A1 A1 A– A A+ AA Ecuador B3 B2 B– B– B Senegal Ba3 Baa1 B+ BBB– Egypt B3 B2 B– pB B B Serbia Ba3 Ba1 BB BB+ BB BB+ El Salvador B3 B1 CCC+ p AAA B– Seychelles BB– BB Estonia A1 Aaa AA– AAA A+ pAAA Singapore Aaa Aaa AAA AAA AAA Ethiopia B1 B1 B B B B Slovakia A2 p Aaa A+ AAA A+ AAA Fiji Ba3 Ba3 B+ B+ Slovenia Baa1 Aa1 A+ AAA A– AAA Finland Aa1 Aaa AA+ AAA AA+ AAA Solomon Islands B3 B2 France Aa2 Aaa AA AAA AA AAA South Africa Baa3 n A3 BB BBB– BB+ BBB– Gabon B3 n Ba3 B BB+ South Korea Aa2 Aa1 AA AAA AA– Spain Georgia Ba2 Baa3 BB– BB+ BB – p BB Baa2 Aa2 A– pc AAA A– AAA Germany Aaa Aaa AAA AAA AAA AAA Sri Lanka B1 n Ba2 B+ B+ B+ B+ Ghana B3 B1 B– pB B B Suriname B2 n Ba3 B n B+ B– Greece B3 p Ba2 B p AAA B BB– Sweden Aaa Aaa AAA AAA AAA AAA Guatemala Ba1 Baa3 BB– BB+ BB Switzerland Aaa Aaa AAA AAA AAA AAA Honduras B1 Ba2 BB– BB Tanzania B1n Ba3 Hong Kong Aa2 Aaa AA+ AAA AA+ Taiwan Aa3 Aa2 AA– AA+ AA– Hungary Baa3 Baa1 BBB– p BBB+ BBB– p A– Thailand Baa1 A2 BBB+ A BBB+ Iceland A3 A3 A A A A Trinidad & Tobago Ba1 Baa3 BBB+ A India Baa2 Baa1 BBB– BBB+ BBB– Tunisia B2 Ba2 B+ BB– Indonesia Baa3 p Baa2 BBB– BBB BBB Turkey Ba2 Baa2 BB nBBB– BB+ BBB– Iraq Caa1 B3 B– B– B– B– Turks & Caicos BBB+ p AAA Ireland A2 Aaa A+ AAA A+ AAA Uganda B2 Ba3 B B B+ B+ Israel A1 Aa3 A+ p AA A+ AA Ukraine Caa2 p Caa1 B– B– B– B– Italy Baa2 n Aa2 BBB AAA BBB AA UAE Aa2 Aa2 Jamaica B3 Ba3 B B+ B B UK Aa2 Aaa AA n AAA AA n AAA Japan A1 Aaa A+ AA+ A USA Aaa Aaa AA+ AAA AAA Jordan B1 Ba1 B+ BB Uruguay Baa2 A2 BBB A– BBB– Kazakhstan Baa3 Baa2 BBB– BBB– BBB BBB+ Venezuela C Ca SD CC RD Kenya B2 Ba3 B+ BB–B+ BB– Vietnam B1 p Ba2 BB– BB– BB– p Kuwait Aa2 Aa2 AA AA+ AA AA+ Zambia B3 B1 B B B nB+ 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

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International Financing Review March 31 2018 1 INTERNATIONAL FINANCING REVIEW INDEX

Adira Dinamika Multi Finance 58 Deutsche Bank 5, 17, 20 Kering 30 SDP Finco 56 Adtalem Global Education 65 Dezhan Healthcare 83 KfW 27 Select Medical Corp 67 Advanced Discovery 64 DocuSign 81 KKR 31 Sensirion 77 AerCap Holdings 60 Dole Food Co 68 Land Securities 30 Shandong Hi-tech Innovation 46 Agence France Tresor 27 Dominion Energy 63, 73 La Trobe Financial 40 Shandong Iron & Steel Group 46 Agile Group Holdings 47 Dongling Group 46 Lawson 58 Shanghai Bikong Longxiang 83 AIA Group 48 Downer EDI 56 LegalShield 65 Shanying International 83 Akbank 61 Dubai Aerospace Enterprise 61 Lemon Tree Hotels 76 Shearer’s Foods 65 Akelius Residential Property 29 Duff & Phelps 68 Lenovo Group 56 Shougang Group 47 Akzo Nobel 9, 55 Elysium Healthcare 70 LG Display Taiwan 59 Siam Makro 76 Albaraka Bank 61 EmployBridge 65 Liberty Financial 34 Si Chuan Province JuYang Group 46 Altisource Holdings 69 Eskom 49 Link Real Estate Investment Trust 71 Smartsheet 81 Alvean Sugar 60 Euroclear Investments 32 Logan Property Holdings 48 Societe Generale 13 AMAG Leasing 38 European Financial Stability Facility 29 Loparex International Holding 68 Solusi Tunas Pratama 58 American Renal Associates 79 European Stability Mechanism 29 Lufax 74 South Africa 49 American Tower 39 Everbright Securities 41 Mackay Sugar 36 Southeastern Grocers 35 Amneal Pharmaceuticals 70 Everwell 72 MacroGenics 80 SouthernCarlson 70 Arch Coal 69 Fiat Chrysler Automobiles 60 Mannai Corp 12 Spotify 78 Aspen Dental Management 65 Filtration Group 67 McDermott International 10, 66 Spotify Technology 8 AssuredPartners 67 Financial Products Group 58 Medartis 78 Spotless Group 56 At Home 79 Financiera de Desarrollo Nacional 51 Medi Assist Health Services 75 STLC 45 AT&T 6 Finland 29 Meituan-Dianping 74 Stockland 30 Axalta Coating Systems 65 FirstCaribbean International Bank 82 Members Equity Bank 34 Sumitomo Mitsui 13 Baden-Wuerttemberg 29 Flora Food Group 55 Mexico 45 Sunrise Medical 71 Bahrain 4 Fosun International 56 Minerva 45 Swissport 71, 77 Banca Carige 25 Galliford Try 78 Mishra Dhatu Nigam 75 Tailored Brands 68 Banco Santander 32 Gangtai Group 46 Mizuho Financial 20 Taizhou Huaxin Pharmaceutical 46 Bank of America Merill Lynch 13, 20 Gategroup 77 MK Fintel Wind 77 Techem 55 Bank of the Philippine Islands 76 GCP Infrastructure Investments 62 Mobilezone 78 Tesla 4 Barclays 13, 20, 23 Gebr Knauf 59 Morgan Stanley 20 The Binding Site 71 Beijing Jingneng Clean Energy 21 General Dynamics 63 Morgan Stanley Employment Services 13 The Fresh Market 35 Beijing Kingee Culture Development 83 General Mills 73 Mumbai International Airport 49 The Stars Group 65 Belarus 49 General Motors 62 Mylan 26 Tianqi Lithium 74 Belarus Development Bank 49 Gilex 45 Mylin Holding Group 83 TINC 76 Bilibili 6, 75 GlaxoSmithKline 62 Nafin 52 Tops 35 BlackRock Financial 64 Glencore 61 Nelnet 39 Toronto-Dominion Bank 39 Blue Buffalo Pet Products 73 Godewind Immobilien 76 New World Development 21 Townsquare Media 70 BlueMountain Fuji Management 38 Golden Belt 7 New York Fed 19 Toyota Finance Australia 29 BNP Paribas 14 Goldman Sachs 13, 14, 20 NEX Group 23 Transurban Queensland 31 BoCom International Holdings 57 GreenSky 69 Nippon REIT Investment Corp 58 TravelClick 67 Bohai Automotive Systems Co 57 GreenTree Hospitality Group 6, 75 NMC Health 62 Trilliant 70 Bright Horizons Family Solutions 79 Grosvenor Capital Management 69 Noble Group 23 Tui 35 Burgan Bank 60 Guanghui Energy 75 Nomura 13 Turkcell 50 Bygghemma 77 Guangyang Antai Holdings 46 Noor Bank 50 Turk Eximbank 61 CABEI 45, 53 Guatemala 45, 51 Nordic Aviation Capital 59 Turkiye Finans 50 Cafe Outspan Vietnam 57 HealthChannels 67 nVent 63 UBI Banca 33 Canadian Imperial Bank of Commerce 82 Heidelberger Druckmaschinen 59 Olam International 21, 57 UniCredit 14 CareCentrix 69 Hermina Group 76 OneConnect Financial Technology 74 Unilever 55 CAR Inc 10 Heron Therapeuctics 80 OneSmart International Education 6, 75 Unum Therapeutics 79 CDW 65 Hindustan Aeronautics 76 Orano 36 Uruguay 45, 53 CenterPoint Energy Resources 26 Homology Medicines 81 Overstock.com 80 US Silica 66 Ceridian HCM 64, 81 Hornblower 69 Panama 45, 52 Vakif Katilim Bankasi 61 Chegg 83 HSBC UK 13 Paraguay 53 Verizon Communications 64 Chemours 66 Ibercaja 34 Paratus AMC 37 Vicinity Centres 30 CH Guenther 66 ICBC Asia 46 Pentair 63 Vivid Seats 68 China Grand Automotive Services 47 ICICI Securities 7, 75 Ping An Bank 83 Volkswagen Financial Services 41 China National Chemical Corp 56 Imagina 71 Pivotal Software 81 Vrio 45, 54 China Zheshang Bank 75 Indiabulls Housing Finance 58 Ply Gem Holdings 69 WABCO 59 Cinemark 68 Indra Sistemas 30 Poly Property Group 46 Wales & West Utilities 31 Citigroup 17, 20 Inke 75 PTC Therapeutics 80 West Corp 69 Citizens Bank 33 Inner Mongolia BaoTou Steel Union 46 RBC Europe 13 WG Tech (Jiangxi) 75 Clifden 38 Inovalon Holdings 65 Realty Income 26 World Bank 27 CME Group 23, 64 InRetail Shopping Malls 45, 52 Regency Centers Corp 63 WuXi AppTec 8 Cocobod 60 Internap Corp 67 Remington Outdoor Co 72 Wyndham Hotels & Resorts 67 Colombia 50 International Car Wash Group 64 Restore 62, 78 Xianhe Corp 75 Commerzbank 14 International Development Association 27 Ri Happy 82 Xinjiang Goldwind Science and Tech 47, 75 Consilio 64 Invitae 80 Rio Tinto 30 YTO Express Group 83 Conviviality 78 iQiyi 6 Riversdale Resources 7 Yum! Brands 69 Coty 10, 36, 68 Iron Mountain 70 Rocket Software 66 Zentiva 55 Country Garden Holdings 47 Isbank AG 60 Ronshine China Holdings 46 Zhejiang Geely Holding Group 41 Credit Suisse 13, 20 JD Sports 62 Russell Investments 66 Zhengzhou Zhongrui Industrial 46, 47 Daimler 10, 31 Jiangsu NewHeadline Development 46 Sanlam 77 Zosano Pharma 80 Dana Gas 51 Jiangxi Copper 47 Sanofi 55 Danaher 63 John Laing Group 78 SBA Communications 64 David’s Bridal 72 JP Morgan 13, 14, 20 Scentre Group 30 D Carnegie 77 KBR 67 Scout24 59

88 International Financing Review March 31 2018 INDONESIAN PROJECT BONDS ROUNDTABLE

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The PFI Indonesian Project Bonds Roundtable takes place in Jakarta, Indonesia on the morning of Monday DATE April 23 2018. Monday April 23 2018 TIME Moderated by PFI’s Editor, Rod Morrison, the 09:00 – Registration Roundtable will consist of two 90-minute sessions: one 09:30 – Local/Domestic Bonds local/domestlic bonds international on and one on 11:00 – Break dollar bonds . 11:15 – Int’l Dollar Bonds 12:45 – Lunch and networking Each panel will contain the most senior and 14:00 – End experienced market practitioners – including lawyers, project sponsors, investors and rating agencies. VENUE The Ritz Carlton – Pacific Place For more information and to register for this free to Jakarta, Indonesia attend event, please visit goo.gl/beAwUY. Two must-attend Roundtables from IFR

The 2018 IFR ECM and DCM Roundtables are taking DATE place on the morning of Wednesday April 11 2018 at the Wednesday April 11 2018 Thomson Reuters Building in London. ECM ROUNDTABLE 08:30 – Registration 09:00 – Roundtable discussion Moderated by Keith Mullin of KM Capital Markets, the 10:15 – Q&A 10:30 – End events will bring together panels of the most senior DCM ROUNDTABLE professionals in each asset class to discuss current 10:15 – Registration market trends, assess deal flow, evaluate the impact 10:45 – Roundtable discussion 12:00 – Q&A of regulation and give their view on the outlook for the 12:15 – End remainder of 2018. VENUE Thomson Reuters 30 South Colonnade These essential Roundtables are free to attend, but you Canary Wharf must be registered. To secure your place at either or London both, please visit goo.gl/uLChPZ. E14 5EP