2021 | DEALS OF THE YEAR THE WINNERS

2021

Despite, as well as in large part because of, the effects of the Covid-19 pandemic, it has been a standout year for investment banking and capital markets activity. We have witnessed several record-breaking quarters of activity across debt capital markets, equity capital markets, and mergers and acquisitions (M&A). The Banker’s 2021 Deals of the Year Awards highlight the issuers and banks that have really excelled in this unusual year, often in the most challenging of circumstances.

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DEALS OF THE YEAR | 2021 THE WINNERS

AFRICA

BONDS: CORPORATE BONDS: SSA EQUITIES LIQUID INTELLIGENT GHANA’S $3BN TRIPLE-TRANCHE ARADEI CAPITAL’S Dh600M IPO TECHNOLOGIES’ $620M ISSUANCE ISSUANCE International placement adviser: Joint bookrunners: JPMorgan, Standard Bookrunners: Bank of America, Renaissance Capital Chartered and Standard Bank JPMorgan, Morgan Stanley, Standard Bank and Standard Chartered The December 2020 initial public offering Liquid Intelligent Technologies, previously (IPO) of real estate company Aradei Capital known as Liquid Telecom, is a pan-African In February 2020, Ghana printed a mega marked a major moment for northern Afri- communications solutions provider, with a $3bn triple-tranche issuance of six-year, ca’s capital markets. It was the first IPO in presence across 13 countries including South 14-year and 40-year bonds worth $1.25bn, Morocco since 2018 and the country’s big- Africa, which contributes the greatest share $1bn and $750m, respectively. Following a gest since 2016. of the group’s revenue. For instance, it has number of investor meetings in London, the The real estate platform, which holds a built Africa’s largest independent fibre net- bumper issuance attracted orders of almost portfolio of 29 commercial property assets in work, stretching 73,000km across sub- three times its value, enabling price tighten- 15 cities across Morocco, raised Dh600m Saharan Africa and it has customers in some ing across all three tranches of 37.5 basis ($63m), through its sale of 1.5 million shares of the region’s fastest growing markets, points (bps), 50bps and 50bps, respectively, via its listing on the Casablanca Stock including metropolitan locations. with short-, medium- and long-date Exchange. Specifically, 1.25 million of the Prompted by $730m worth of debt tranches pricing at 6.375%, 8% and 8.875%, shares sold were newly issued and a further maturing in 2022, the business required a respectively. 250,000 were sold by existing stakeholders. refinancing solution. To meet these needs, it The 40-year tranche is the longest tenor It also marks the achievement of the goal to issued a $620m 5.5-year non-call two fixed ever printed by a sub-Saharan Africa issuer, go public, which has been a clear objective rate bond in February 2021, the first time it testament to the strong international inves- for the company since its formation in 2014. had accessed the capital markets since 2017. tor demand, including from Europe and the The successful listing followed a broad Investors proved keen to engage with the US, for Ghanaian bonds. marketing exercise, engaging 110 investors deal, with price tightening from initial price Ghana has long been one of the leading in discussion about the company’s long-term talk by more than 60 basis points, to 5.5%. African sovereigns when it comes to access- growth and plans to develop a portfolio of The order book was also more than five times ing the international capital markets, with it quality property assets. The order book was oversubscribed, enabling the planned being the first sub-Saharan African sover- multiple times oversubscribed and included $600m issuance to be upsized by $20m. eign (outside of South Africa and the Sey- a substantial proportion of international The bond attracted investors including chelles) to issue bonds in the international buyers, such as investors from the UK, Swit- anchor orders from the International markets. It has also enjoyed continued suc- zerland and South Africa. Finance Corporation (IFC), Deutsche Inves- cess in its issuance programme with it For international placement adviser titions-und Entwicklungsgesellschaft becoming the first sub-Saharan sovereign to Renaissance Capital it was also a landmark (DEG) and the Emerging Africa Infrastruc- issue a US dollar-denominated bond post- deal, as it was the bank’s first IPO transac- ture Fund. pandemic in 2021. tion in northern Africa. It was the first high-yield Eurobond issu- Proceeds from the bonds will be used to ance out of sub-Saharan Africa in 2021, and finance a range of budgetary needs including its strong performance is a positive sign for energy sector debts. both Liquid Intelligent Technologies and African credits more broadly. To bolster the financing raised via the Eurobond, Liquid Telecom also accessed a R3.25bn ($228m) term loan and a $60m revolving credit facility. The features of the entire financing package have created a nat- ural currency hedge for the group. In addition to refinancing existing debts, the group also plans to use the funds to sup- port its growth strategy. This includes a greater focus on cloud and digital services, as well as data centres, in addition to the group’s more traditional sources of revenue.

36 | THE BANKER | May 2021

DEALS OF THE YEAR | 2021 THE WINNERS

FIG FINANCING INFRASTRUCTURE AND PROJECT ISLAMIC FINANCE FIRST BANK OF NIGERIA’S $350M FINANCE AL-MARASEM INTERNATIONAL FOR ISSUANCE MOZAMBIQUE LNG 1 PROJECT’S DEVELOPMENT’S E£1.5BN Bookrunners: Citi, Renaissance Capital $15.4BN FINANCING FINANCING and Standard Chartered Financial adviser: Société Générale Bookrunners and mandated lead Mandated lead arrangers and arrangers: Banque du Caire and Banque First Bank of Nigeria (FBN) returned to the bookrunners: Absa, Standard Bank, Misr international bond markets in October SMBC, IDC, ICBC 2020, to offer the first Eurobonds from an Mandated lead arrangers: MUFG, Efforts to construct a new capital city for African bank that year. Its $350m five-year Mizuho Bank, Standard Chartered, Egypt, around 35km to the east of the historic offering was also the first Eurobond issuance Société Générale, CDP capital Cairo, have been underway for the by a Nigerian bank since 2017. Lenders: DBSA, Nedbank, Rand past five years, with the aim of creating thou- The virtual roadshow efforts for the issue Merchant Bank, Nippon Life, Shinsei, sands of new homes and more than a million took in conversations with 75 investors, gen- SMTB, Crédit Agricole, JPMorgan, new jobs. The New Administrative Capital is erating significant interest and allowing Afreximbank set to be a 270-square-mile hub, with 21 resi- FBN to proceed with the announcement DFI/ECA direct loans and covered dential districts to accommodate up to five despite market volatility and a difficult mac- providers: AfDB, UKEF, US Exim, million people, as well as new churches and roeconomic backdrop. The issuance took Kexim, SACE, Atradius, NEXI, mosques, schools, colleges, a conference cen- place against a backdrop of domestic pro- JBIC, ECIC tre, medical facilities and a large park, along tests against police brutality, which attracted with new government buildings. considerable international attention. A In spite of the Covid-19 pandemic leading to In June 2020, Al-Marasem Interna - number of other Eurobond issuers put their unprecedented economic shocks and a his- tional for Development accessed a sharia- plans on hold at this time. toric market collapse in oil prices, Total, one compliant E£1.5bn ($95m) syndicated Following strong demand on launch day, of the world’s seven largest oil and gas compa- facility to finance the development of the R5 the issue was upsized by $50m to $350m, as nies, secured $15.4bn in project financing for district of the city, which will be a “new gar- well as some price tightening. Investor inter- the construction of a vast Liquefied Natural den city” built in an “old French” architec- est came from Europe, the UK and the US, as Gas (LNG) plant in northern Mozambique. tural style, similar to that of Cairo’s Garden well as considerable orders from African The Mozambique LNG 1 project is the City. The estimated total cost of the develop- investors, with the offer 1.7 times oversub- single largest direct investment into Africa ment, which will include 23,000 residential scribed. The strong performance of this and the largest natural resource develop- apartments and villas as well as other facili- benchmark issuance was all the more ment in Africa’s history. The project financ- ties, is E£9.7bn. impressive given the difficult political back- ing includes direct and covered loans from This facility was one of several sharia- drop. nine export credit agencies (ECAs), 19 com- compliant facilities which Al-Marasem mercial banks and a $400m loan from the International for Development Company African Development Bank (AfDB). The accessed during 2020 to fund the develop- ECAs and the AfDB provided the lion’s share ment of the New Administrative Capital. of the funding, accounting for nearly $14bn of the total loans and guarantees, which carry an 18-year tenor. The development of Mozambique’s Golfinho-Atum natural gas fields will involve the construction of a two-train liquefaction plant, with a total capacity of 13.1 million tonnes per annum (mtpa) of LNG. In the future, the plant’s production capacity may be further expanded to 50mtpa, which could position Mozambique among the world’s top five global LNG suppliers. Alongside the Covid-19 pandemic, the project continues to face numerous chal- lenges, including vulnerability to severe weather events that frequently affect the country’s northern coast and a deteriorating security situation across the broader region. Mozambique LNG 1 has the potential to transform the country by providing thou- sands of jobs for local Mozambicans, while significantly boosting its gross domestic product and export earnings, as well as pro- viding diversity in LNG supply and more competitive pricing to global markets.

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DEALS OF THE YEAR | 2021 THE WINNERS

LEVERAGED FINANCE LOANS M&A PEREGRINE’S LEVERAGED BUYOUT BANK OF INDUSTRY’S $1BN LOAN ASSORE’S R7.8BN SHARE BUYBACK Participating Institutions: Absa, Investec, Mandated lead arrangers and Sole financial adviser and sponsor: Nedbank and Standard Bank bookrunners: Credit Suisse and Standard Bank Afreximbank Peregrine is a South African-based provider Assore is a company operating within the of investment management solutions, and Bank of Industry (BOI) is the largest devel- mining industry, with a complete ‘mine-to- until October 2020 had been listed on the opment financial institution (DFI) operat- market’ business model, comprising of min- Johannesburg Stock Exchange. ing in Nigeria, with a mandate to create jobs ing, smelting and marketing of iron ore, In October 2020, private equity firm, and alleviate poverty by supporting domestic chrome ore and manganese alloys. Capitalworks, acquired the business after corporates. In 2019, for instance, it helped to In March 2020, Assore bought back securing syndicated leveraged buyout fund- create more than one million jobs, both 17.4% of its issued share capital and subse- ing and a share-backed facility based on Per- directly and indirectly. quently delisted from the Johannesburg egrine’s equity value. The structure of the BOI, fully owned by the Nigerian gov- Stock Exchange (JSE). This was a significant funding package was designed to provide ernment, previously primarily relied on gov- event, as the company had been listed on the maximum protection for funders, while also ernment funding and DFI lending (from JSE since 1950. minimising implementation risks associated institutions such as the African Develop - However, despite its public listing, it was with the acquisition. ment Bank). However, during 2020, Credit majority owned by the Sacco Family Trust Peregrine shareholders were offered R21 Suisse led on two loans for BOI, including and Sumitomo Corporation, which held ($1.5) per share in cash and/or the option to the $1bn facility in December 2020, which 52.4% via Oresteel Investments, and 26.1% retain unlisted stock in one of the buyout was underwritten jointly with Afreximbank. was held by black economic empowerment vehicles which was set up in order to com- The loan, which was upsized from $750m, shareholders. A further 4.1% of shares were plete the transaction. It was important for was one of the largest in sub-Saharan Africa owned by members of the Sacco family, the completion of the transaction that the during 2020 and received strong interest effectively leaving only 17.4% as a free float. right balance of shareholders opted to cash from a diverse range of investors. At the The transaction brought benefits to both in their shares, as well as to remain invested time of closing, more than 20 investors had management and shareholders. From a in the company. This was one of the com- joined the loan, including regional banks as management and strategic shareholder per- plexities that which needed to be managed in well as several European and North Ameri- spective the public listing was not providing the deal. can asset managers. significant benefits, therefore the buyback Syndication for the funding package was The proceeds from the loan will be used and delisting would allow more consolidated launched in June 2020 to invited funders, by BOI to finance local corporates in key control and fewer reporting obligations. For several months after the buyout offer had sectors of the economy, boost local trade the minority shareholders, the low liquidity been announced to the market. This was a and support job creation. Any unutilised of the shares meant that they could not easily deliberate strategy, as at the time the buyout funds will be invested by BOI with the cen- trade out of the shares. offer was announced in March 2020, there tral bank. The minority shareholders were offered was considerable concern around the Covid- The US dollar facility follows on from the R320 ($22) per share from internal cash 19 pandemic in the region and national lock- success of a €1bn euro-denominated loan resources. According to Assore, this repre- down measures were beginning to be which was closed in the first quarter of 2020, sented an 80% premium to the closing price implemented in South Africa. pre-Covid 19. on the last trading day prior to the The additional period allowed the busi- announcement, a 51% premium to the ness to demonstrate its continued trading 30-day volume-weighted average price, and performance throughout the disruption of a 36% premium to the 60-day volume- the pandemic, the lockdown measures and weighted average price. market volatility. Following a concerted Ensuring the transaction proceeded effort of communication and investor smoothly required careful management. engagement over those months, the funding This included securing irrevocable commit- package was successfully syndicated and ments from key minority shareholders to oversubscribed. vote in favour of the scheme ahead of the The transaction represents one of the general shareholder meeting. It was reported most significant leveraged public-to-private that following the deal the stakes held by transactions in the South African market in Oresteel, the black economic empowerment the past decade, and was executed against a shareholders and the Sacco family in Assore highly challenging market backdrop. would be increased pro rata to 63.4%, 31.6% and 5%, respectively.

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2021 | DEALS OF THE YEAR THE WINNERS

SECURITISATION SUSTAINABLE FINANCE NEW URBAN COMMUNITIES EGYPT’S $750M INAUGURAL GREEN AUTHORITY’S E£10BN BONDS SECURITISATION RECEIVABLES Global coordinators, joint lead managers ISSUANCE and bookrunners: Citigroup, Crédit Lead arrangers and issuance managers: Agricole, Deutsche Bank and HSBC National Bank of Egypt, Commercial International Bank, Arab African In September 2020 Egypt became the first International Bank and the Housing and sovereign in the Middle East and north Development Bank Africa region to issue a green bond, estab- lishing a market precedent in the region, The New Urban Communities Authority which, it is hoped, will encourage other issu- (NUCA) is an economic authority responsi- ers in the region to follow its lead. ble for developing Egyptian real estate Not only was the $750m transaction a resources in urban communities. It has symbolic success but it also achieved impres- ambitious investment and development sive pricing with a 5.25% coupon, signifi- plans in more than 20 cities across Egypt to cantly lower than initial price talk and accommodate the country’s growing popula- comparable with a standard bond issuance. tion and economic growth. Following considerable demand, which hit In general, it has financed its activities more than $3.7bn at the peak, the issuance via internally generated cash flows (mainly was also upsized from the initially planned from land sales), as well as bank loans. This $500m. transaction, executed in July 2020, saw In total, 220 investors placed orders NUCA replace existing bridge facilities with including several that were primarily longer-term funding by securitising receiva- attracted to the deal because of its green cre- bles. The authority issued E£10bn ($637m) dentials, including some investing in an worth of securitised bonds via its special Egyptian issuance for the first time. By purpose vehicle, El Taamir, with multiple investor type, asset managers took the bulk tranches and maturities ranging from three of the issue, with 77%, followed by pension to seven years. The bond offering has allowed funds and insurance (9%) and banks (8%). NUCA to restructure its balance sheet, free Egypt will use the proceeds of the bond up resources for further investment in its to finance a wide range of green projects plans and diversify its funding sources. such as sustainable transportation, water Following the 2011 revolution in Egypt, desalination plants and renewable energy securitised lending activity had ceased infrastructure. Envisaged landmark projects within the public sector. NUCA’s bond pro- include the construction of the Cairo mono- gramme marks a significant step in the rail and a 250-megawatt wind project in the revival of this market and is an important Gulf of Suez. alternative to bank finance. It is also the largest issuance ever seen in Egypt’s debt capital markets. The European Bank for Reconstruction and Development is a strong supporter of the programme and the deepening of the local debt capital markets more generally, and invested E£1.5bn, as the sole interna- tional financial institution participant. It is hoped that this issuance will demon- strate the viability of this method of financ- ing and encourage other local borrowers to pursue similar transactions.

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DEALS OF THE YEAR | 2021 THE WINNERS

AMERICAS

BONDS: CORPORATE BONDS: SSA EQUITIES BOEING’S $25BN SEVEN-TRANCHE PERU’S $4BN TRIPLE-TRANCHE PETZ’S 3BN REAIS IPO ISSUANCE ISSUANCE Bookrunners: Itaú BBA, Santander, Bank Bookrunners: Bank of America, Citi, Bookrunners: BBVA, Citi, Goldman of America, JPMorgan and BTG Pactual JPMorgan and Wells Fargo Sachs, Itaú BBA and Morgan Stanley Petz is a leading Brazilian retailer and The aviation industry has been one of the In November 2020, Peru issued a ground- healthcare provider for pets, with more than hardest hit by the Covid-19 pandemic. In breaking bond offering in several respects. 100 stores and almost 100 veterinary centres March 2020, almost overnight, interna - The $4bn triple-tranche offering was its across the country. The company has also tional travel largely ground to a halt and is largest ever transaction. And despite coming been able to develop a strong omnichannel yet to really recover. On April 30, 2020, at amid a highly unstable political backdrop, strategy, with a well-established digital plat- the height of uncertainty about how long the just days after president Martin Vizcarra was form – its digital sales increased by a third, disruption would last, Boeing issued a mega impeached under charges of corruption and year-on-year, between 2019 and 2020. In seven-tranche bond offering worth $25bn, mishandling the Covid-19 pandemic, the addition, it has a well-subscribed loyalty pro- to shore up its cash position. The offering offering attracted $14bn of demand from gramme, encouraging repeat custom, with was spread across three-, five-, seven-, 10-, 600 investors. 80% of its sales made via the scheme. It also 20-, 30- and 40-year maturities, each sized The deal consisted of a $1bn 12-year reported strong financial results and growth between $2bn and $5.5bn. tranche, a $2bn 40-year tranche and a $1bn for the first half of 2020, despite the Covid- This was an important transaction for 100-year tranche – marking Peru’s entry into 19 pandemic. All of this provided the com- Boeing not only due to the challenges the select club of sovereigns to issue a cen- pany with a strong foundation before its imposed on it by the coronavirus outbreak tury bond. The issuance came off the back of listing on September 9, 2020 on the Novo but also following a difficult year, with the multiple reverse enquiries about longer- Mercado segment of the B3 stock exchange. grounding of its 737 Max model in March dated securities from the sovereign. The There was strong demand for the offer- 2019 taking a heavy financial toll on the high level of interest enabled significant ing, which saw 195.92 million shares sold at company. On April 29, just one day prior to price tightening of 100 basis points or more a price of 13.75 reais ($2.48), with the offer- the transaction, the company had for each of the three tranches, with the ing almost seven times oversubscribed. The announced a quarterly net loss of $641m 12-year, 40-year and 100-year pricing at company also exercised its greenshoe over- and that it would be reducing production 1.862%, 2.828% and 3.278%, respectively. allotment option, offering a further 24.5 mil- and staffing levels. The deal was a clear success, with the lion shares. In total, the whole offering raised Despite the challenging circumstances country able to achieve the lowest-ever $3.031m reais, which the company will use facing the company, substantial investor 12-year coupon for a Latin America issuer to invest in opening new stores and health- demand enabled it to significantly upsize the and the lowest-ever 100-year US dollar cou- care facilities, as well as further development transaction. The larger issuance enabled the pon for an emerging markets issuer. It was of its digital channels. company to avoid seeking government fund- also the largest and longest-dated bond ing, something it had previously said it was transaction of a South American sovereign exploring. in 2020. Boeing did have to pay a new issue pre- Peru will use the proceeds to finance mium across the tranches, however given its Covid-19 related measures and to boost its liquidity needs it opted to prioritise securing economy. the funding it needed. The company also included provisions for coupons to increase in the event of its credit rating being down- graded to junk status – on April 29, S&P had downgraded the company to BBB-, its low- est investment grade rating. The jumbo transaction, issued during extraordinary circumstances, was the sixth largest investment grade bond offering of all time and the largest issuance during 2020.

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DEALS OF THE YEAR | 2021 THE WINNERS

FIG FINANCING INFRASTRUCTURE AND PROJECT LEVERAGED FINANCE CHARLES SCHWAB’S $2.5BN FINANCE ZAYO’S $8.1BN LEVERAGED BUYOUT PREFERRED STOCK ISSUANCE CASCADE POWER PROJECT’S DEBT FINANCING Lead bookrunner: Credit Suisse FINANCING Joint lead managers: Citi, Credit Suisse, Additional bookrunners: Bank of Financial adviser: Macquarie Capital Deutsche Bank, SunTrust, TD Bank America, Citi, Goldman Sachs, Funding financial institutions: ING, ATB Co-managers: BNP Paribas, Citizens JPMorgan and Morgan Stanley Financial, MUFG, National Bank Bank, CoBank, Fifth Third, ING, MUFG, Financial, Nomura, Siemens Financial Natixis, Nomura, Scotiabank Charles Schwab is a leading investment ser- Services, Natixis, Canadian Western Financial advisers to Digital Colony vices provider, which in recent years has con- Bank, Fiera Private Debt Fund Partners and EQT: Morgan Stanley and solidated its position via the acquisition of Deutsche Bank TD Ameritrade as well as the brokerage and The C$1.5bn ($1.2bn) Cascade Power Pro- wealth management operations of USAA. ject will finance Canadian asset manager Zayo is one of the world’s largest independ- In April 2020, the company issued Kineticor in its construction of a 900-mega- ent providers of fibre optic cables and other $2.5bn of perpetual non-call five-year fixed watt combined-cycle gas power plant in the telecommunications infrastructure, active rate preferred stock aimed at institutional country’s province of Alberta. The Cascade across North America and Europe. In March investors, marking the largest ever preferred site is strategically situated in proximity to 2020, the company, which had been publicly stock offering not issued by a global systemi- significant gas production and pipeline listed since 2014, was acquired and taken cally important bank. infrastructure, as well as high-voltage elec- private by leading private equity firms EQT The deal was Schwab’s first regulatory trical transmission lines, an important com- and Digital Colony Partners at a value of capital raise following its $26bn acquisition petitive advantage for the facility. $14.3bn. It was one of the largest leveraged of TD Ameritrade in November 2019, and The project aims to accelerate Alberta’s buyouts since the global financial crisis in provided it with capital to support signifi- transition to clean energy. More than half of 2007-09, a reflection of the core role which cant growth, building on a significant the Canadian electricity generation sector’s digital infrastructure is expected to play in increase in client cash deposits. The deal also greenhouse gas emissions are currently pro- the global economy into the future. reopened the preferred stock primary mar- duced by the province’s power plants. Cas- To fund the takeover, a financing pack- kets following several weeks of severe mar- cade’s combined-cycle gas turbines emit age comprised of $4.57bn and €750m of first ket dislocation. 62% less carbon dioxide per megawatt hour lien term loans, $1.5bn seven-year senior The company took advantage of a posi- when compared with traditional coal fired secured bonds and $1.08bn eight-year sen- tive market on the morning of April 27, 2020 plants. The plant is expected to begin com- ior unsecured bonds was put together. to announce the offering, its first regulatory mercial operation in 2023 and will provide Despite Zayo’s single B rating with S&P, capital issuance since 2017. It included an one of the largest emission reduction oppor- many investors regarded the company investor-friendly, fixed-reset structure with tunities for Canada’s energy sector. favourably with strong prospects for the the back-end dividend reset rate bench- Macquarie Capital, in partnership with future, allowing the first lien loan facility to marked to the five-year “Constant Maturity Ontario-based pension fund OPTrust, be upsized across by $500m. Treasury” yield and optional redemption secured and closed the deal in August 2020. Interest was also strong for the bonds dates matching dividend reset dates every Macquarie served as the exclusive financial with demand reported to have topped five years. adviser and debt arranger to the partnership, $10bn, and the secured notes tranche was The announcement was very well raising $629m in debt from a consortium of upsized by $500m. The upsize in both the received, with the order books more than 10 financial institutions, as well as taking an loans and the secured bonds enabled the eight times oversubscribed based on the ini- equity stake in the project. The project will higher yielding unsecured tranche of bonds tial allocation size, enabling Schwab to both provide protection from revenue uncertainty to be downsized by $1bn, cutting costs for increase the size of the offering and to signif- through gas netbacks: a 10-year gas hedge, the issuer. icantly tighten pricing to 5.375%. which links the cost of gas to Cascade’s The transaction was also notable for the ahead-one-day power price. unusually short one-year non-call period With an estimated service life of 30 attached to the seven-year secured notes. A years, Cascade will generate enough electric- one-year non-call period is closer to the ity to power 900,0000 homes, meeting 8% norm for leveraged loans than high yield of Alberta’s total electricity supply needs. bonds, and this will provide the issuer with The new plant will strongly benefit the local greater flexibility to refinance this part of its community, creating an estimated 600 jobs debt package more quickly than would typi- during peak construction, as well as 25 long- cally have been the case. term jobs during its operation.

44 | THE BANKER | May 2021

2021 | DEALS OF THE YEAR THE WINNERS

LOANS M&A RESTRUCTURING LD CELULOSE’S DEBT FINANCING ALSTOM’S ACQUISITION OF PACIFIC GAS & ELECTRIC’S Lead arrangers: IDB/IDB Invest, IFC, BOMBARDIER TRANSPORTATION RESTRUCTURING Finnvera Financial advisers to Alstom: Rothschild Financial adviser: Lazard Participating banks: Santander, BNP & Co and Société Générale Paribas, Commerzbank, Erste Group, Financial advisers to Bombardier In July 2020, California’s largest utilities HSBC, KfW IPEX Bank and Raiffeisen Transportation: Citi and UBS company, Pacific Gas & Electric (PG&E) emerged from its second Chapter 11 bank- LD Celulose is a joint venture owned by Aus- The acquisition of Bombardier Transporta- ruptcy after collapsing under an estimated trian firm Lenzing, a market leader in speci- tion by Alstom has created a worldwide $30bn in liabilities from several devastating ality fibres used in the textiles industry and leader in the rail rolling stock and rail ser- wildfires caused by its own power lines. other sectors, and Brazilian company Dura- vices industry, second in size only to Chi- Its bankruptcy ranks as one of the three tex, the largest producer of wooden panels in na’s CRRC. largest in US history by liabilities settled the southern hemisphere. According to Alstom, the combined ($55.5bn) and as a landmark case on account It’s plan is to construct a plant with the group has a pro forma revenue of €15.7bn of its complexity and capital raised. Its suc- capacity to produce 450,000 tonnes a year of with a workforce of 75,000 people and oper- cessful conclusion involved reaching a con- dissolving wood pulp (DWP), a material ations in 70 different countries worldwide. sensual resolution with multiple disparate used in the manufacture of textiles and non- For parent company Bombardier, the divest- parties, such as wildfire claimants, insurance woven fabrics, in the Brazilian state of Minas ment will enable it to refocus on its world- companies, creditors, government stake- Gerais. DWP can be used to replace both leading aviation business. holders, regulators and utilities bill payers. synthetic and cotton-based fibres in manu- The transaction closed on January 29, To fund its emergence from Chapter 11, facturing processes, and the production of 2021, at a value of €5.5bn, after almost a year PG&E raised $37bn in capital, which this plant, which is expected to be the most of preparations, following a memorandum included $21.7bn in debt financing and the modern and efficient DWP plant in Brazil, of understanding which had been signed in largest single issuance of investment grade will have a positive environmental impact. February 2020. The final sale price was notes ($8.9bn) by a US utility company. There are also clear benefits for both €300m lower than the initial indicative price Lazard coordinated with PG&E’s under- Lenzing, with the project enabling backward range of €5.8bn–€6.2bn announced in Feb- writing banks to structure a $9bn equity integration in its supply chain and providing ruary 2020, with Alstom renegotiating its offering to fund the company’s plan of reor- a growth opportunity, and for Duratex, with offer as a result of difficult market conditions ganisation (POR). In addition, negotiations it providing an opportunity to diversify its and Bombardier Transportation’s lower than were held in parallel with more than 60 income stream and expand into an area of expected financial performance. institutional investors to arrange a $12bn growing international demand. An additional complexity in the transac- equity backstop commitment to ensure the The complete project has been costed at tion was that pension fund, Caisse de dépôt certainty of available capital for PG&E to $1.8bn, with the Inter-American Develop- et placement du Québec (CDPQ), owned a emerge successfully from Chapter 11. ment Bank (IDB), IDB Invest (the private sec- 32.5% minority stake in Bombardier Trans- An innovative $7.5bn off balance sheet tor arm of the IDB) and International Finance portation. As part of the deal, CDPQ rein- securitisation structure was engineered by Corporation (IFC) providing a comprehensive vested its stake (worth around €2bn) into the Lazard to enable PG&E to monetise the tax debt financing package for its funding. merged business along with additional capi- attributes of its wildfire settlements. It pro- The package consists of a $130m IDB tal of around €700m, becoming a 17.5% vided cost-effective financing while remain- Invest A loan (a loan funded via its own shareholder in Alstom. ing rate-neutral to the company’s customers, resources), a $70m IDB A loan, a $250m The proceeds from the sale were €4.4bn and enabled PG&E to accelerate and dis- IDB Invest B loan (a syndicated loan), and after a €1.1bn deduction, which took into burse its final payment of $1.35bn to the $50m funding from the China Co-financing account the application of a cash adjustment wildfire victims. Fund for Latin America and the Caribbean mechanism, based on Bombardier Trans- In January 2020, a restructuring agree- Region (an IDB administered fund). On the portation’s negative net cash position as of ment with PG&E’s pre-petition creditors set- IFC side, it is providing a $200m A loan, a December 31, 2020, and other contractual tled $21.5bn of pre-existing debt and $50 loan through its Managed Co-Lending obligations. Bombardier received net pro- prevented the noteholders from pursuing a Portfolio Programme, and a $250 B loan. ceeds of $3.6bn, including €500m worth of competing POR. By June, PG&E had A further $147m loan financing is being Alstom shares. pleaded guilty to 84 counts of manslaughter. provided from financial institutions, backed The acquisition was financed through a The wildfire claims were eventually settled by Finnish export credit agency, Finnvera. rights issue of around €2bn in December for $25.5bn, including a combined $6.75bn 2020, and part of a €750m senior bond in cash and $6.75bn in equity for the wildfire issuance in January 2021, along with the victims, $11bn for insurance companies and shares issued to Bombardier and CDPQ as a further $1bn for municipal entities. part of the sale.

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DEALS OF THE YEAR | 2021 THE WINNERS

SECURITISATION SUSTAINABLE FINANCE GOLUB CAPITAL’S $678M MIDDLE MERCADO LIBRE’S $400M MARKET CLO SUSTAINABILITY BOND ISSUANCE Sole arranger: Société Générale Joint bookrunners: BNP Paribas, Bank of America, Citi, Goldman Sachs, Middle-market collateralised loan obliga- JPMorgan tions (MM CLOs), a segment of the US CLO market based on secured loans to mid-mar- Mercado Libre is the biggest e-commerce ket corporates, have seen significant growth platform in Latin America, comparable to in recent years with the category accounting China’s Alibaba. It serves as an integrated for 14% of total outstanding US CLOs. provider of online tools allowing businesses Golub Capital is an established operator and individuals to trade products and ser- within the middle market as both a loan vices in the region. originator and CLO manager. It has issued In January 2021, this regional titan 40 MM CLOs since 2005, and, as of Decem- debuted in the international bond markets, ber 2020, was the largest MM CLO man - following a year where its chief executive ager in the market, with more than $16bn of estimated the pandemic accelerated its assets under management across 24 out- growth by three to five years. In addition to a standing MM CLOs. $700m 10-year tranche issued for general Following the outbreak of Covid-19, and corporate purposes, it also issued a $400m the subsequent economic disruption, there five-year sustainability bond (a bond to fund was significant concern about ensuring both both environmental and social objectives). consumers and businesses could access Commenting on the inclusion of the sus- credit. In March 2020, the US Federal tainability tranche, Mercado Libre’s chief Reserve launched a revamped version of its financial officer, Pedro Arnt, said: “The Term Asset-backed Securities Loan Facility growth of our platform demands us to con- (TALF), a programme first created during tribute more to the societies where we oper- the financial crisis in 2008, which aimed to ate, to be efficient in our energy boost consumer spending by financing consumption, to move towards increasingly investors willing to invest in certain catego- cleaner mobility, and to innovate in our ries of securitisation, in turn boosting mar- strategies to mitigate our social and envi- ket liquidity and enabling banks to lend ronmental impact throughout the entire more to corporate and retail customers. The value chain.” new programme was expanded to include It intends to invest the proceeds from CLOs backed by leveraged loans as eligible the sustainability tranche in three main collateral for the TALF programme. areas: increasing access to financial services In October 2020, Golub Capital Part- for small and medium-sized enterprises and ners’ $677.53m TALF 2020-1 LP MM CLO entrepreneurs; improving the organisation’s became the first CLO to issue under the energy efficiency and reducing emissions TALF programme, as well as being the larg- and waste within its operations; and social est CLO issued in 2020 following the onset development and empowerment via pro- of Covid-19. moting greater digital inclusion and improv- A key element for the success of the deal ing job prospects for young people. was that arranger Société Générale and The deal attracted significant interest Golub consulted with the Federal Reserve globally, with the company receiving $14bn on modifications to the TALF programme to worth of orders from 330 investors from 30 make it viable for CLOs to comply as eligible different countries within two hours of its collateral. Société Générale also worked launch. This allowed the company to tighten closely with rating agencies to design an pricing in both the five- and 10-year appropriate structure for the CLO during a tranches, settling at 2.375% and 3.125%, period of extreme market volatility. respectively. This result puts the company in line with international peers and ahead of many local competitors.

46 | THE BANKER | May 2021

2021 | DEALS OF THE YEAR THE WINNERS

ASIA-PACIFIC

BONDS: CORPORATE BONDS: SSA EQUITIES ALIBABA’S $5BN FOUR-TRANCHE INDONESIA’S $4.3BN TRIPLE JD.COM’S $4BN SECONDARY ISSUANCE TRANCHE ISSUANCE LISTING Bookrunners: Citi, Credit Suisse, Morgan Joint bookrunners: Citi, Deutsche Bank, Joint sponsors: Bank of America, CLSA, Stanley, JPMorgan and China Goldman Sachs, HSBC and Standard UBS International Capital Corporation Chartered Joint global coordinators: Bank of Co-managers: ANZ, Bank of China, BNP America, BOCI, CCBI, China Paribas, DBS Bank, HSBC, ING, Mizuho Amid market conditions that may have given Renaissance, CLSA, ICBCI, Jefferies and Wells Fargo many issuers pause for thought, in early April and UBS 2020 Indonesia issued a mega $4.3bn triple- In February, Chinese megabrand Alibaba, a tranche offering. The deal comprised $1.65bn JD.com, a major Chinese e-commerce firm major, force in the country’s huge e-com- 10.5-year, $1.65bn 30.5-year, and $1bn and rival to Alibaba, has joined a growing merce sector, grabbed attention with a $5bn 50-year senior unsecured fixed rate notes. number of Chinese firms with a primary list- bond offering. The four-tranche deal, split It was the first emerging market, Asian ing in the US to add a secondary listing in across 10-, 20-, 30- and 40-year maturities, Sovereign offering since the Covid-19 out- Hong Kong. was Asia’s largest bond offering in eight break, re-opening this market at a moment In June 2020, it offered 133 million months. The 20-year tranche, comprised of of high uncertainty. shares for sale via the Hong Kong Stock $1bn of sustainability bonds, was also the Despite ongoing market volatility, the Exchange, at HK$226 ($29) per share, worth group’s debut issuance under its newly pub- transaction was very well received, with approximately $3.87bn. There was strong lished sustainable finance framework. It was orders peaking at an aggregate size of more demand from both retail and institutional all the more noteworthy as it came just than $11bn, with investor interest spread investors for the shares, with the retail inves- months after Chinese regulators pulled the across Asia, Europe and the US. The high tor tranche around 180 times oversubscribed. plug on the planned initial public offering of demand enabled substantive price tighten- The institutional tranche was also heavily Ant Group, an affiliate company of Alibaba ing of all three tranches, with final coupons oversubscribed, allowing the company to pri- Group, in November 2020. The regulator of 3.9%, 4.25% and 4.5% across the 10.5-, oritise orders from high quality accounts. then launched an antitrust investigation into 30.5- and 50-year tranches, respectively. A The market responded positively to the Alibaba in December 2020. highly impressive result given the market listing, with share prices increasing during Alibaba’s offering received strong circumstances. initial trading and then gradually over the demand, and was more than six times over- The deal was also notable as it was the following weeks. Due to the offering’s posi- subscribed, suggesting investors remain con- first time Indonesia had ever issued a tive reception, the company also subse- fident in the brand’s longer-term outlook. 50-year bond, its longest ever tenor. It was quently opted to exercise almost the full The company raised $1.5bn in 10-year also the first sovereign in the region to issue 19.95m shares over-allotment option, bonds, $1bn in the 20-year tranche, $1.5bn an offering with this time to maturity. boosting the final offering size to approxi- in 30-year paper and $1bn in 40-year notes, Indonesia used the proceeds from the mately $4.46bn. at 2.125%, 2.700%, 3.150% and 3.250%, bonds for general budgetary needs, as well as The transaction’s success was all the more respectively. Due to the high level of demand, contributing towards Covid-19 relief and impressive given its timing during ongoing it was able to tighten pricing by 30-40 basis recovery programmes. geopolitical tension between the US and points for all four tranches. China, as well as uncertainty around Covid-19. Excluding the sustainability notes, the The listing was not only the largest Chi- group will use the proceeds for general cor- nese equity capital markets transaction in porate purposes such as working capital and 2020, it was also the largest listing globally repayment of offshore debts. The sustaina- for that year too. bility tranche will be used to finance eligible The company said it plans to use the cap- projects within its framework, such as ital raised to “invest in key supply chain increasing energy efficiency, responding to based technology initiatives to further the Covid-19 pandemic or contributing to enhance customer experience while improv- the circular economy. ing operating efficiency”.

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DEALS OF THE YEAR | 2021 THE WINNERS

FIG FINANCING INFRASTRUCTURE AND PROJECT ISLAMIC FINANCE OCBC’S $1BN T2 NOTES FINANCE INDONESIA’S $2.5BN TRIPLE Joint lead managers and joint STAR ENERGY GEOTHERMAL’S TRANCHE SUKUK bookrunners: Bank of America, Citi, $1.1BN DUAL-TRANCHE GREEN Joint lead managers and joint JPMorgan, OCBC PROJECT BONDS bookrunners: BNP Paribas, Dubai Joint global coordinators: Credit Suisse, Islamic Bank, HSBC, Maybank and OCBC is one of Singapore’s longest-estab- DBS Bank, Deutsche Bank Standard Chartered lished banks, formed in 1932 in a merger of Joint bookrunner: Barclays Joint green structuring advisers: BNP three local banks, the oldest of which had Co-manager: BPI Capital Paribas and HSBC existed since 1912. It is also the second larg- est financial services group in southeast Asia In October 2020, Star Energy Geothermal Indonesia’s debt management office had a by assets. Group priced the largest green bond issu- busy 2020, beginning with a $4.3bn multi- In September 2020, this large regional ance by any southeast Asian corporate to tranche bond issuance in April, at a time player issued $1bn 10-year, non-call five, date. It was a $1.1bn senior secured project when Covid-19 uncertainty was at a high and fixed rate subordinated notes under its bond split across two tranches: a $320m later on, in July, issuing a ¥100bn ($943m) $30bn global medium-term note pro- tranche due in April 2029 priced at 3.25%, Samurai bond. gramme, with the bonds counting towards and a $790m tranche priced at 4.25%, with a Between these two notable transactions its Tier 2 regulatory capital. The deal repre- longer term of 18 years. was another significant deal, a $2.5bn tri- sented the first Tier 2 subordinated bond There was huge demand for the offering. ple-tranche sukuk issuance, including a deal from Singapore in more than a year. By September, the order book stood over- $750m green tranche. This was the coun- Demand for the notes was strong, even subscribed at $2.8bn, while strong momen- try’s first sukuk issuance since February without high profile marketing, particularly tum from institutional investors allowed 2019 and consisted of a five-year, $750m from Asian investors, with orderbooks peak- pricing to be tightened by 27.4 basis points. green sukuk, a 10-year $1bn sukuk and a ing at more than $6bn. Even at final pricing In terms of geographical distribution, 30-year $750m sukuk. of 1.832% fixed until September 2025 (the 42% of the notes went to US accounts, 39% Following the April issuance, the sover- call date), representing a 42 basis points to Asia and 19% to Europe, the Middle East eign was waiting for the most opportune (bps) tightening from initial price guidance, and Africa. Asset managers secured the larg- window to launch the sukuk. In June, find- the issuance remained 5.8 times oversub- est share with 82% of the total notes, while ing highly favourable market conditions fol- scribed. The final results represented a nega- 8% went to insurers and pension funds, 8% lowing news from the US Federal Reserve tive new issue concession of 5 to 7bps and, to hedge funds and 2% to private banks. about its plans for corporate bond purchases, according to Dealogic, the lowest ever cou- The bonds are rated Baa3 stable by it acted and was able to price the deal intra- pon for a Tier 2 transaction in Asia-Pacific. Moody’s and BBB- by Fitch. The green bond day. It was not alone in capitalising on the The bank will use the proceeds from the frameworks the bonds were issued under are favourable market conditions, yet despite bonds for general corporate purposes. aligned with the International Capital Mar- seven other deals in Asia ex-Japan G3 pri- ket Association’s Green Bond Principles and mary markets on the same day, demand the Asean Green Bond Standards initiative. across the three tranches peaked at more Star Energy will use the bonds’ proceeds than eight times its total size. for the repayment of its existing loans, as The strong demand enabled Indonesia well as to invest in technologies to help to tighten pricing by 70 basis points com- reduce carbon emissions, increase sustaina- pared to initial guidance, with yields of ble energy and promote circular economies 2.30%, 2.80%, and 3.80%, respectively, for in Indonesia. Star Energy is the country’s the five-, 10- and 30-year tranches. Even largest geothermal producer, with a total with the aggressive tightening the offering installed capacity of 875 megawatts. maintained much of its demand, including The $1.1bn issuance is the energy group’s from quality investors. second green framework offering. In April The deal achieved a number of firsts for 2018, Star Energy issued $580m of senior both the issuer and the wider region. This secured green bonds with a term of 15 years. includes it having the lowest-ever US dollar five-year and 10-year coupon/profit rate achieved by Indonesia across both the con- ventional bond and sukuk format. It was also the first US dollar 30-year sukuk issued by Indonesia and the largest US dollar 30-year sukuk ever issued out of Asia.

50 | THE BANKER | May 2021

2021 | DEALS OF THE YEAR THE WINNERS

LEVERAGED FINANCE LOANS M&A SJM HOLDINGS’ $1BN DUAL CP GROUP’S $7.2BN BRIDGE ASAHI’S A$16BN ACQUISITION OF TRANCHE ISSUANCE FINANCING FOR ACQUISITION OF CARLTON & UNITED BREWERIES Bookrunners: Banco Nacional TESCO’S THAILAND AND MALAYSIA Lead adviser to Asahi: Rothschild & Co Ultramarino, Bank of East Asia, Bank of OPERATIONS Adviser to Asahi: Nomura China, Bank of Communications, BNP Joint underwriters: JPMorgan, Siam Adviser to AB InBev (Carlton & United Paribas, CCB International, China Commercial Bank and UBS Breweries): Lazard International Capital Corporation, ICBC, OCBC, Tai Fung Bank, Yue Xiu Securities In early March 2020, Charoen Pokphand Carlton & United Breweries (CUB) is one of Group (CP) announced that it had entered Australia’s longest-established brewing SJM Holdings, the largest operator of casi- into a definitive agreement to acquire Tesco’s companies, with a heritage stretching back nos and resorts in Macau, made an impres- Thailand and Malaysia retail and mall oper- to 1832. It has existed in various incarna- sive bond market debut in January 2021, ations for $10.6bn, in what was to be the tions throughout its history, including as with a $1bn dual-tranche offering across largest-ever merger and acquisition (M&A) Fosters Group between 1990 and 2004. In $500m five-year non-call three notes and transaction on record within southeast Asia. 2016, CUB was acquired by AB InBev, the $500 seven-year non-call four notes. Despite The acquisition was completed at the end of world’s largest brewing company, which took being in an industry hard hit by Covid-19, 2020, and to enable the deal to go ahead a over the brand as part of its purchase of SAB- the brand’s strong heritage, along with con- $7.2bn bridge financing package was put Miller (CUB’s then owner). certed investor engagement, made for a together for CP. However, since its acquisition of SAB- highly effective transaction. Syndication of the package was compli- Miller, AB InBev has struggled with its level A comprehensive marketing process was cated by the spread of the Covid-19 pan- of leveraging and has made a number of stra- undertaken throughout December 2020 demic, which was causing major market and tegic divestments. In July 2019, it announced and January 2021. This included initial ses- operational disruption internationally by late that it had agreed to sell CUB to Japanese sions with more than 50 Asia and Europe- March 2020. At this stage, there were signifi- brewing company, Asahi, for A$16bn based investors during December. A cant questions about whether it would be ($12.3bn). Shortly after, it put plans for an so-called wall-crossing exercise, where there possible to attract the necessary financing. initial public offering of Budweiser APAC is in-depth engagement with selected inves- With a highly challenging market back- (which would have included CUB) on ice. tors before a public launch, was also under- drop, and operational obstacles, getting the For AB InBev the attraction of the deal taken, attracting $1.5bn in orders. deal over the line required a significant effort was being able to further deleverage its bal- Further engagement with more than 100 by the banks involved, with, for instance, ance sheet and strengthen its position for investors was also undertaken after the pub- market volatility having a severe impact on future growth opportunities. For Asahi, lic announcement of the bond on January 18. credit spreads. which is now the third largest brewer in the These efforts really paid off with the offering Nonetheless, by June the senior syndica- world, after AB InBev and Heineken, and more than two times covered two hours after tion (where commitments of $1bn were continues to build its global presence, the launch on January 20, and peaking at more sought) had been completed with 12 banks transaction represented a rare opportunity than $10bn at close. The book even contin- signed up (including the three underwrit- to quickly establish scale and broaden its ued to grow after prices were tightened by 50 ers). General syndication, launched in June markets. It also follows Asahi’s acquisition of basis points or more across both tranches. 2020 and completed in September 2020, a number of former SABMiller European Final pricing of 4.5% and 4.85%, respec- attracted a further 24 lenders. businesses in 2016 and 2017. tively, was achieved. Despite the challenges the deal was suc- The deal had to overcome a number of It was a blockbuster deal in several cessfully executed attracting 36 lenders regulatory hurdles, namely satisfying condi- respects including being the largest-ever based across southeast Asia, east Asia, tions from the Australian Competition and debut bond offering for a high yield issuer in Europe and the Americas; a resounding suc- Consumer Commission and passing a review Asia and the lowest yields ever achieved on cess, even without the testing circumstances. by Australia’s Foreign Investment Review five-year and seven-year bonds for a debut The financing was the first M&A loan Board, but was successfully completed in issue in Asia. from Thailand’s retail sector since March June 2020. The transaction helped the company 2016, the largest Asia-Pacific, ex-Japan and diversify its funding sources, expand its Australia, acquisition loan during 2020 and investor base and extend its debt maturity the second largest Asia-Pacific, ex-Japan and profile. Australia, loan for any purpose in 2020.

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RESTRUCTURING SECURITISATION SUSTAINABLE FINANCE PACIFIC INTERNATIONAL LINES’ EXSIM’S SHARIA-COMPLIANT GOODMAN INTERLINK’S HK$590M $3.3BN DEBT RESTRUCTURING SECURITISATION PROGRAMME GREEN INTEREST RATE SWAPS Financial adviser: Evercore Financial adviser and deal structurer: Sole arranger: Crédit Agricole New Paradigm Capital Markets Headquartered in Singapore and operating Lead arranger: United Overseas Bank Compared to its cousins in the bonds mar- across 500 global locations in more than 90 kets, the sustainability-linked derivatives countries, Pacific International Lines (PIL) In February 2020, Exsim, a Malaysian prop- markets is at a relatively early stage in its is the largest container shipping group in erty development company particularly development. However, it is also an area that southeast Asia and the 12th largest globally. well-known for commercial and industrial has the potential to make a big impact as In early 2020, the Covid-19 pandemic developments, broke new ground in the companies seek to transition to more sus- sent shockwaves through global supply Islamic finance and securitisation markets tainable financing and ways of operating. chains which led to a contraction in cargo with a sharia-compliant securitisation Compared to traditional derivatives, sus- volumes. PIL had posted a net loss of $795m linked to the progress billings of a commer- tainability-linked derivatives incorporate a in 2019, following a loss of $254m in 2018, cial development project. Progress billings so-called ‘sustainability premium’ into their and therefore, was in a particularly vulnera- are invoices submitted for work completed pricing, where the borrower must hit certain ble position. on long-term projects. pre-agreed key performance indicators In an effort to buoy the company’s strug- This transaction marked the first time related to sustainability, or face higher costs. gling finances, PIL had unsuccessfully that a sharia-compliant structured transac- In October 2020, Goodman Interlink, a engaged with various financial institutions tion involving progress billings for a com- joint venture between Goodman Group (a throughout 2018 and 2019 to raise both debt mercial project has been undertaken, global logistics property group) and Good- and equity. By June 2020, PIL’s liabilities globally. The overall securitisation pro- man Hong Kong Logistics Partnership, stood at more than $3bn, which included gramme combines two different structured engaged in a landmark deal in the develop- bank loans of $1.12bn due to mature within a programmes: an Islamic medium-term ment of this market in Asia-Pacific. year. Facing the pressure of an over-lever- notes programme based on securitised pro- The company agreed a HK$590m aged capital structure, the company’s liqui- gress billings from development projects for ($76m) green interest rate swaps deal, the dation seemed inevitable. issuance of up to RM2bn ($486m); and an first deal of its kind in the region. It had previ- In December 2019, PIL turned to Ever- Islamic commercial paper programme ously agreed green loan facilities with Crédit core to evaluate its strategic options and take established to cover cost overruns and bridge Agricole, secured against a prime logistics steps to salvage the company. Evercore iden- any timing mismatches between progress building in Hong Kong. The green interest tified Heliconia Capital Management, a sub- billing receipts and ongoing constructions rate swaps were agreed as its interest rate sidiary of the Singapore government’s costs for issuance of up to RM1bn. hedge against this facility, and is linked to the investment company Temasek, as a potential Under these sukuk programmes, Exsim green credentials of the logistics building. investor. A $112m emergency credit facility Development or any of its developer subsidi- Goodman Interlink will incur a penalty from Heliconia was secured in July 2020. aries will, as required, sell their beneficial on the fixed rate it pays on its side of the swap The emergency credit facility provided a rights related to specific property develop- if it fails to meet the so-called ‘green condi- much-needed liquidity boost for PIL, allow- ment projects to the Issuer, Exsim Ventures tion’, specifically the building must continue ing it to continue critical operations, while Berhad (the special purpose vehicle estab- to have a silver certificate from US LEED the terms of a broader comprehensive financ- lished for the sukuk programmes), with the (Leadership in Energy and Environmental ing package and debt restructuring scheme objective that future receipts under these Design) and a gold certificate from Hong were being finalised with PIL’s stakeholders. agreements will be used to fund construction Kong BEAM (Building Environmental The debt restructuring scheme involved costs relating to the relevant development. Assessment Method). complex negotiations with more than 125 In essence, the arrangement enables Exsim competing creditors to reprofile PIL’s repay- to monetise future income from the sale of ment of its liabilities. Between 74% and yet-to-be-completed developments and 100% of PIL’s creditors from each class allows it to more efficiently manage project voted in favour of the scheme, allowing Hel- development cash flows. iconia to make a subsequent investment of As this was the first structured transac- $600m into PIL, a mix of debt and equity, tion in Malaysia to monetise progress bill- and acquire a significant majority interest in ings involving a commercial project, it posed the company. additionally complexity to be skilfully man- The transaction concluded as Singapore’s aged in terms of creating appropriate risk largest comprehensive debt restructuring management structures in the absence of exercise to date, positioning PIL for future prior examples and regulatory oversight. growth and protecting more than 9000 jobs throughout the company and its subsidiaries.

52 | THE BANKER | May 2021

2021 | DEALS OF THE YEAR THE WINNERS

EUROPE

BONDS: CORPORATE BONDS: SSA EQUITIES LAFARGEHOLCIM’S €850M GERMANY’S €6.5BN INAUGURAL OZON’S $1.4BN IPO SUSTAINABILITY-LINKED BOND GREEN BOND Bookrunners: Citi, Morgan Stanley, Structuring advisors and bookrunners: Joint lead managers: Barclays, Goldman Sachs, Renaissance Capital, ING, Société Générale Commerzbank, Crédit Agricole, Deutsche Sberbank, UBS, VTB Capital Active bookrunners: BNP Paribas, HSBC, Bank, JPMorgan and UniCredit Santander Sole structuring advisor: Crédit Agricole E-commerce company Ozon, sometimes referred to as the “Amazon of Russia”, There is widespread acceptance that in Germany, the eurozone’s benchmark issuer, launched its $1.4bn initial public offering order to hit global targets for reducing is a big borrower, typically printing circa (IPO) in November 2020, marking the larg- greenhouse gas emissions set out in the $200bn in bonds each year, and its develop- est IPO out of the Commonwealth of Inde- Paris climate agreement, high emitting ment bank, KfW, is a sustainable finance pendent States since 2017. Ozon was able to industries will have to transition to far more pioneer. So, its debut into the sovereign capitalise on strong market conditions for sustainable ways of operating. Construction green bond markets has long been antici- tech IPOs, as well as an operating environ- is one such example of a high-emitting sec- pated, and it did not disappoint. ment during the pandemic months resulting tor, with the industry accounting for an esti- In September 2020, its Finance Agency in its sales volumes increasing considerably. mated 10% of global carbon dioxide sold €6.5bn of 10-year notes with a 0% cou- Its shares were listed on Nasdaq in New emissions, according to the Global Alliance pon, after accumulating €30bn of demand York via American depositary receipt, as well for Buildings and Construction. less than two hours after launching. A stellar as via a secondary listing on the Moscow LafargeHolcim is one of the world’s larg- result by any measure. Exchange (MoEx). Thirty-three million est manufacturers of building materials, Although the timing of the debut trans- American depositary shares were floated at including cement, which has a particularly action seemed strongly correlated to strong $30 per share, above price guidance of carbon-intensive manufacturing process. market conditions post-summer, and fol- $22.50-$27.50 due to significant investor The company has been at the forefront of lowing recent government announcements interest ahead of launch. The company also efforts to reduce emissions within the indus- committing the country to climate neutral- reportedly upsized the transaction from an try. This includes innovative solutions, such ity by 2050, it was also the result of 18 initial planned listing worth $500m based as manufacturing its concrete and cement months of planning. The debut deal is the on expected high demand. products using circular economy principles first of an ambitious plan to build up an Ozon opted to include a secondary listing and with reduced carbon emissions. entire yield curve of green securities of up to on MoEx to enable it to tap additional pock- To further underline its climate commit- 30-year maturities. ets of investor demand from local retail and ment, LafargeHolcim launched its first sus- The sovereign was also keen to introduce institutional investors. Trading on the MoEx tainability-linked bond for €850m in new innovations to the green bond market, tranche launched simultaneously with trad- November 2020. The bond commits the something which it achieved with its ‘twin ing on Nasdaq – the first time that the trading company to achieving targets on its carbon bond’ issuance approach. This method of a Russian company’s shares has opened dioxide emissions; specifically no more than means each green bond Germany issues will simultaneously on the two exchanges. 475 kg of net carbon dioxide emissions per have the same maturity and coupon as an Following a positive market response – tonne of cementitious material manufac- earlier issued conventional bond, providing on the first day of trading the price increased tured by 2030. If it does not meet the target, an easily referenceable benchmark rate for by 40% – Ozon also opted to take advantage it will pay an additional 75 basis points (bps) its green notes and vice versa, as well as for of its 15% overallotment (greenshoe), issuing interest on maturity of the bond. other issuance across the eurozone. a further 4.95 million shares. This led to the The 10-year offering was launched on The deal was launched on September 2, total offering of 37.95 million shares, worth Tuesday November 17 and was multiple 2020 and was five times oversubscribed, around $1.139bn being listed, representing a times oversubscribed, enabling pricing to be ultimately priced at 1 basis point tighter than free float of 18%. tightened from initial guidance of midswap its conventional twin. Alongside the main IPO, an additional plus 110bps to midswap plus 77bps, with a Germany will use the proceeds from the private placement of $135m was also exe- final orderbook of€ 2.6bn. bond to finance projects across green trans- cuted, with existing major shareholders The deal provides a positive example of port, international co-operation (assisting BVCP and Sistema each subscribing for how issuers within carbon-intensive sectors emerging market and developing countries $67.5m worth of stock at the same pricing as can access financing that will enable them to in their transition towards a more environ- the IPO. adapt their business models and clears a mentally friendly economy), research inno- pathway for further issuers to print similar vation and awareness raising, renewable bonds. energy transition and the promotion of bio- diversity, natural landscapes and sustainable agriculture.

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DEALS OF THE YEAR | 2021 THE WINNERS

FIG FINANCING INFRASTRUCTURE AND PROJECT ISLAMIC FINANCE ALLIANZ’S DUAL-TRANCHE €1.25BN FINANCE ZORLU ENERJI’S TL50 MILLION AND $1.25BN INAUGURAL RT1 NORTHVOLT’S $1.6BN PROJECT SUSTAINABLE SUKUK ISSUANCE ISSUANCE FINANCING Sole arranger: Industrial Development Joint lead managers: Deutsche Bank, Mandated lead arrangers: APG, BNP Bank of Turkey (TSKB) Bank of America, BNP Paribas, Citi, Paribas, Danske Bank, Danica Pension, HSBC IMI - Intesa Sanpaolo, ING, KfW IPEX Zorlu Enerji is one of Turkey’s largest energy Bank, PFA Pension, SEB, Siemens Bank, providers and it has ambitious plans to The concept of loss-absorbing capital is SMBC, Société Générale, Nordic increase its provision of renewable energy. probably most associated with the banking Investment Bank, Export-Import Bank of In June 2020, the company established a sector in the shape of Additional Tier 1 Korea sustainable sukuk programme, allowing for bonds, which are written down or convert to Financial advisers: BNP Paribas, Morgan issuance of up to Tl450m ($55m) to fund its equity if the issuing bank’s capital drops Stanley investment in this area. The first sukuk below a certain level. offering under the programme of Tl50m But insurers, too, are required to hold Northvolt, a Swedish developer and manu- was printed on June 3. As of the end of Feb- loss-absorbing capital. In Europe, under the facturer of lithium-ion vehicle battery cells, ruary 2021, four further issuances had been Solvency II directive, insurers must issue was founded in 2016 with the aim of acceler- made under the programme, with total issu- convertible debt known as Restricted Tier 1 ating Europe’s transition to a low-carbon ance reaching Tl250m. The programme (RT1). But since the first transactions in economy. The company is targeting a 25% represents a new financing opportunity for 2017, this market has been slow to develop. market share in Europe by 2030, which Zorlu Enerji, a frequent issuer of conven - However, in November 2020 Europe’s equates to an estimated 150 gigawatt-hours tional bonds. biggest insurer made waves when it issued (GWh) of annual production capacity. It was the first sustainable sukuk issu- its first RT1 deal: a perpetual non-call 5.4- In July 2020, Northvolt secured a major ance in Turkey and a key aim of the pro- year $1.25bn and perpetual non-call 10.4- cash injection of $1.6bn in debt financing gramme from the standpoint of arranger, year €1.25bn dual-tranche offering. The way from a consortium of commercial banks, TSKB, was to increase awareness of sustain- was cleared for the issuance when the Ger- pension funds, as well as the European ability issues within the Turkish capital mar- man Ministry of Finance clarified long- Investment Bank, the Nordic Investment kets. It believes it has been successful in this debated rules over whether RT1 issuances Bank and the Export-Import Bank of Korea. objective, with a similar transaction already counted as equity or debt for German tax Northvolt’s new funding more than dou- completed later in 2020 and more underway purposes, with it confirming it would count bled its capital and will be used to complete and due to be finalised in the second quarter as debt in October. production of its first gigafactory, Northvolt of 2021. Demand for the deal was exceptional, Ett, in northern Sweden. The issuance is the The programme, which will fund invest- with orders quickly building throughout world’s first project financing of its kind for a ments in renewable energy, clean transpor- November 10 after its launch. The orders on greenfield lithium-ion battery manufactur- tation, sustainable energy supply and the US dollar tranche and euro tranche ing plant. sustainable infrastructure, has also moved peaked at almost $10bn and more than €6bn Northvolt Ett is expected to begin pro- the sustainable sukuk asset category forward respectively, with orders received from more ducing batteries in 2022, starting with an more broadly, at a global level, as previous than 1400 investors across both tranches. annual production capacity of 16GWh, with sustainable sukuk issuances have often been Even after final pricing was announced, the potential to scale to 40GWh. A second solely linked to renewable energy projects. with substantive tightening of more than 60 plant, Northvolt Zwei, planned for construc- basis points on both tranches, both books tion in Germany, is projected to begin its remained multiple times oversubscribed. commercial operations in 2024. The $1.25bn tranche priced at 3.5% and the Among Northvolt’s industrial partners €1.25bn at 2.625% and customers are ABB, BMW Group, Sca- The deal was a blockbuster in several nia, Siemens, Vattenfall, Vestas and the Volk- respects, not only was it the first RT1 deal out swagen Group, which recently announced a of Germany, it was also the largest Tier 1 $14bn contract with Northvolt to supply it issuance of 2020 and the only dual currency with batteries for the next 10 years. Volkswa- regulatory capital issuance of 2020. gen’s agreement with Northvolt brings the company’s total order book to $27bn. The $1.6bn transaction is set to create the foundation of a new European battery supply chain, establishing the region as a major global player in battery production and, notably, reducing Europe’s dependence on imports from China.

54 | THE BANKER | May 2021

2021 | DEALS OF THE YEAR THE WINNERS

LEVERAGED FINANCE LOANS M&A THYSSENKRUPP ELEVATOR’S DENIZBANK’S $435M DIVERSIFIED LONDON STOCK EXCHANGE’S JUMBO LEVERAGED BUYOUT PAYMENTS RIGHTS DEBT $27BN ACQUISITION OF REFINITIV FINANCING FINANCING Advisers to the London Stock Exchange Bookrunners: Barclays, Credit Suisse, Joint mandated lead arrangers: Credit Group: Goldman Sachs, Morgan Stanley, Deutsche Bank, Goldman Sachs, RBC Suisse and Emirates NBD Robey Warshaw, Barclays and RBC and UBS Capital Markets. DenizBank is one of Turkey’s largest private Advisers to Refinitiv: Evercore, Canson The eagerly anticipated €17.2bn acquisition banks. Recently acquired by Emirates NBD, Capital Partners and Jefferies of Thyssenkrupp Elevator by private equity it had been owned by Russia’s Sberbank firms Advent International and Cinven in between 2012 and 2019. DenizBank has a In January 2021, London Stock Exchange July 2020 was Europe’s largest leveraged stated goal of supporting projects with both Group (LSEG) completed its much-antici- buyout (LBO) in more than a decade and social and environmental objectives. pated acquisition of Refinitiv, a global pro- Germany’s largest-ever LBO. In February 2021, the bank secured a vider of financial market data and An equally impressive financing package sustainability-linked $435m equivalent infrastructure, in an all-share $27bn transac- was put together to support the purchase debt facility based on diversified payments tion. This marked the culmination of more worth the equivalent of €10.25bn in total, rights (DPR). DPR financing is based on than a year and a half of complex negotia- comprised of 10 different issuances and receiving future flows from offshore pay- tions, tackling regulatory hurdles and other credit facilities: a €1.15bn term loan B, a ment sources, such as personal remittances complications from when the planned takeo- $2.875bn term loan B, €1.1bn senior secured or export payments. ver was first reported in the press in July 2019. notes, $1.56bn senior secured notes, €500m Proceeds from the facility will be used for Refinitiv had only been operating as an senior secured floating rate notes, a €2bn a range of sustainability-linked objectives independent entity since October 2018; revolving credit facility and guarantee facil- such as energy efficiency and renewable prior to this it had been a part of Thomson ity, €650m senior unsecured notes, $445m energy projects, and to support businesses Reuters, which had spun off the unit. For senior unsecured notes, €50m privately- and sectors with limited access to funds, LSEG, acquiring Refinitiv presented a placed floating rate senior unsecured notes such as farmers and female entrepreneurs. ready-to-go opportunity to expand its data and €600m-eqvivalent (in US dollars) pri- The deal attracted a broad investor base, services, an area with significant long-term vately-placed floating rate senior unsecured with 13 investors including multilaterals, growth potential, particularly when pack- notes. In addition, the sponsors made an commercial banks and institutional inves- aged up with LSEG’s other offerings. For equity contribution of €8.4bn, including a tors from Europe, Asia and the US partici- Refinitiv, too, the potential synergies €2bn equivalent payment in kind issuance pating. This included anchor investment between the two businesses made for a com- bond across euro and US dollars. from the International Finance Corporation pelling transaction. Achieving success in the financing, and and European Bank for Reconstruction and The market also seemed to agree on the subsequent acquisition, became a bellwether Development, which contributed $150m deal’s potential merits, with LESG’s share moment for the health of the high yield, lev- and $100m, respectively. price jumping 15% when the deal leaked to eraged loan and merger and acquisition The deal was DenizBank’s first DPR the press on July 21, 2019, followed by an markets following the outbreak of Covid-19. issuance in the past seven years, an area it additional 7% jump when the deal was for- The deal was originally structured and was previously active in, and historically an mally announced on August 1. underwritten in February 2020, but market important method by which Turkish banks An unexpected challenge to the acquisi- activity largely ground to halt in March more broadly can raise liquidity. It is hoped tion came in September 2019, when Hong 2020. The financing activity for the deal that this deal will pave the way for similar Kong Exchanges publicly announced an restarted in June, closely watched by other transactions in the future. offer to acquire LSEG for £31.6bn ($44bn), market participants who knew the success, which was conditional on LSEG dropping its or not, of this deal would indicate the likeli- plans to acquire Refinitiv. LSEG’s board hood of others following. unanimously rejected the offer within a mat- Despite the difficult market backdrop, ter of days and Hong Kong Exchanges fundamentally the deal remained attractive dropped its bid in October 2019. to investors. However, the path still was not entirely Although the exact structure and make- clear for the deal to proceed, with LSEG up of the financing was adjusted to reflect cur- needing to undertake a number of measures rent market appetite, a largely similar to ensure any potential antitrust concerns financing was secured as planned in February. were mitigated, given the overlapping nature The financing successfully wrapped on of the two businesses. This included LSEG June 30, 2020, with every tranche pricing at agreeing to divest of Borsa Italiana to rival or tighter than guidance following a one- Euronext, with this deal agreed in principle week marketing process and with order- in late 2020. books peaking at approximately $23bn.

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DEALS OF THE YEAR | 2021 THE WINNERS

RESTRUCTURING SECURITISATION SUSTAINABLE FINANCE SWISSPORT’S €2.4BN DEBT SAGE HOUSING GROUP’S £220M AB INBEV’S $10.1BN INAUGURAL RESTRUCTURING SECURITISATION SUSTAINABILITY-LINKED LOAN Financial adviser: Houlihan Lokey Sole arranger, bookrunner and ESG Sustainability coordinators: ING, structuring adviser: Deutsche Bank Santander Swissport International is the market leader Bookrunners and mandated lead in airport ground handling and cargo ser- Sage Housing Group is a registered provider arrangers: Barclays, BNP Paribas, Citi, vices, boasting historical revenue figures of of affordable housing across England, pro- Deutsche Bank, JPMorgan, Mizuho, nearly double that of its closest competitors viding housing eligible for shared ownership MUFG, SMBC, Société Générale and employing more than 45,000 staff and low-cost rental schemes. Mandated lead arrangers: Intesa across 47 countries worldwide. Increasing the availability of high quality Sanpaolo, NatWest, Rabobank, Toronto In March 2020, the Covid-19 pandemic and affordable housing is a key issue within Dominion, Wells Fargo severely impacted the global aviation indus- the UK market. Within this context, in Octo- try, resulting in ground handling business ber 2020, Sage, which is majority owned by AB InBev is the world’s largest brewing com- volumes falling by as much as 90%. Despite Blackstone group, engaged in the UK’s first pany by some considerable margin, with a holding in excess of €300m in cash reserves, social housing securitisation transaction, to presence in 150 countries and sales of Swissport’s financial position rapidly dete- support its growth ambitions. The inaugural $52.3bn globally in 2019. Therefore, when it riorated as revenues took a nosedive and Sage AR Funding No 1 Plc transaction raised acts it has a big impact. significant strain was placed on the compa- £220m ($308m) for the housing provider, In February 2021, it successfully closed a ny’s liquidity. across 5.1 year notes issued in seven tranches. $10.1bn sustainability linked revolving Initial projections indicated a funding The deal also has wider significance, pro- credit facility (RCF), to replace a previous need of €700m, but due to cost-mitigation viding a funding template and approach for conventional RCF. efforts and an additional $170m in funding other entrants into the social housing sector, This milestone facility is the largest ever secured from the US Treasury under the particularly from the private sector, on how sustainability-linked RCF and the first Coronavirus Aid, Relief, and Economic to raise capital for investment in business arrangement of its kind among publicly-listed Security Act, the figure was revised down to goals while operating within the parameters companies in the alcohol beverage sector. €450-570m. of social housing requirements. It was also The pricing structure of the loan incor- One month after the onset of the Covid- linked to International Capital Market Asso- porates key performance indicator targets in 19 pandemic, Houlihan Lokey was appointed ciation’s 2020 Social Bond Principles – the four broad areas: improving water efficiency by Swissport to engage in negotiations for a first transaction with alignment to the during production; reducing its greenhouse comprehensive restructuring plan with the updated principles. gas emissions; increasing its use of recycled company’s multiple stakeholder groups. The transaction was structured based on plastic in its packaging; and souring electric- By August, Swissport and its stakehold- a hybrid of commercial mortgage-backed ity from renewable sources. These are ers had agreed to a €300m interim facility to securities (CMBS) and secured corporate aligned to the company’s broader 2025 sus- provide the company with ample liquidity to issuance, a novel structure within the secu- tainability goals. AB InBev needs to hit the trade through the remainder of 2020. A ritisation markets. It creates an alternative goals otherwise it will pay a higher rate of debt-for-equity swap extinguished €1.9bn of and flexible source of funding for UK social interest on the loan. The facility has an initial the company’s liabilities, while an additional housing providers, who are typically five-year term, which may be extended by an €500m long-term facility was secured to financed via longer-term fixed rate debt. additional two years. refinance the €300m interim facility and Demand for the issuance, which had The jumbo transaction was supported by give Swissport the resources to invest in its tranches rated from AAA down to B, came a total of 26 lenders, testament to the attrac- business. from a broad range of international inves- tive structuring of the deal and AB InBev’s After nine months of complex negotia- tors, including many that would not typically appeal and position in the syndicated loan tions, the restructuring plan was finally con- invest in the UK social housing sector. Pric- market more broadly. cluded. Swissport became one of the first ing for the senior tranche in particular was global companies to agree to a comprehen- tight, at 45 basis points lower than the last sive restructuring following the impact of UK CMBS deal. It was also priced in a par- the Covid-19 pandemic. The transaction ticularly rapid timeframe of two weeks, mar- achieved a significant deleveraging of the keting and investor education for the new company’s balance sheet, placing Swissport asset class. in a strong financial position to win new business and take advantage of opportuni- ties brought on by the disruption of the avia- tion industry.

56 | THE BANKER | May 2021

2021 | DEALS OF THE YEAR THE WINNERS

MIDDLE EAST

BONDS: CORPORATE BONDS: SSA EQUITIES SABIC’S $1BN DUAL-TRANCHE MUBADALA’S $4BN TRIPLE BINDAWOOD HOLDING’S $585M IPO ISSUANCE TRANCHE ISSUANCE Special adviser: Moelis Bookrunners: BNP Paribas, Citi, HSBC, Bookrunners: Bank of America, Banca Joint financial advisers: Goldman Sachs, Mizuho, MUFG and SMBC IMI, BNP Paribas, First Abu Dhabi Bank, JPMorgan HSBC, Natixis and Société Générale Bookrunners: GIB Capital, NCB Capital There has been a difficult market backdrop over the past 12 months for the petrochemi- Mubadala Investment Company, one of the The global groceries market is one sector cals industry as demand for oil has slumped, UAE’s largest sovereign wealth funds, was that remained in good health throughout the as well as the broader economic effects of created in 2017 in a merger between the Covid-19 pandemic. With many populations Covid-19, intensifying funding needs. International Petroleum Investment Com- confined to their homes at various points Against this context, Saudi Basic Indus- pany (IPIC) and Mubadala Development throughout the last 12 months, demand for tries Corporation (Sabic), the world’s fourth Company in 2017. It aims to invest in oppor- groceries has been high. largest petrochemicals firm, raised $1bn in a tunities, globally, promoting growth and Saudi grocery chain BinDawood is one dual-tranche issuance in September 2020, innovation, ultimately supporting the UAE’s such retailer that has benefitted from taking advantage of a resurgence in market economic development. increased demand, with its profits increas- activity following the end of the northern The state-owned entity has a number of ing by 32% and revenue increasing by 11.6% hemisphere summer. aims via its funding strategy: to diversify its in the first nine months of 2020. It also The company, 70% owned by Saudi Ara- funding sources and issue funding at a low proved an opportune time for the company mco, following its investment in the com- cost, while also extending and smoothing to publicly list its shares for the first time. pany in June 2020, and with a further 30% out its debt maturity profile. In October 2020, the company listed floated on the Tadawul stock exchange, In May, Mamoura Diversified Global 20% of its shares on Saudi Arabia’s Tadawul issued $500m of 10-year bonds and $500m Holding, Mubadala’s debt issuing entity, stock exchange. Shares were priced at SR96 of 30-year Formosa bonds. Formosa bonds priced a $4bn, triple-tranche bond offering. It ($25), the top of price guidance, with a total are sold in Taiwan by foreign issuers and was comprised of a $1.0bn six-year tranche, a offering of SR2.2bn. At the time of listing the denominated in non-Taiwanese currency. $1.0bn 10-year tranche and a $2.0bn 30-year company had a market capitalisation of There was considerable demand for the Formosa tranche. Formosa bonds are sold in SR11bn. The listing was the region’s largest bonds, with the total orderbook eight times Taiwan by foreign issuers and denominated since the outbreak of Covid-19. oversubscribed. Final pricing for the 10-year in non-Taiwanese currency. The offering was a significant success, bonds was completed at 155 basis points over There was strong demand for the bonds, with the institutional tranche of shares more midswaps (2.150%) and 3% for the 30-year driven by institutional investor interest from than 48 times oversubscribed, including notes, with the strong demand allowing for across Asia, the Middle East and Europe, substantial interest from UK and US inves- substantive tightening of the pricing for the with order books peaking in excess of $24bn. tors. Buyers included private funds, public 10-year notes. Final terms were set at midswaps plus 210 funds and government institutions. Its share The offering established Sabic’s curve in basis points (bps) for the $1.0bn six-year, price jumped 10% when trading began on the long end, with its first ever 30-year midswaps plus 235bps for the $1.0bn October 21. tranche. The transaction enjoyed strong 10-year, and 3.95% for the $2.0bn 30-year The company has 73 stores across its two interest from the international investor com- Formosa. This represented substantive price brands – BinDawood and Danube – and munity, attracting sizeable triple-digit tightening from initial guidance. plans to open an average of six stores a year orders from high quality institutional The offering played an important role in to reach 100 outlets by 2024. accounts from Europe and Asia. reopening capital markets activity for the region, with it the first government-related entity or corporate bond offering post the Covid-19 pandemic.

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DEALS OF THE YEAR | 2021 THE WINNERS

FIG FINANCING INFRASTRUCTURE AND PROJECT ISLAMIC FINANCE AND NBK’S $700M PERPETUAL FINANCE SUSTAINABLE FINANCE SECURITIES ADNOC’S 49% STAKE SALE IN GAS (WINNER IN BOTH CATEGORIES) Bookrunners: Citi, HSBC, JPMorgan, PIPELINES ISDB’S $1.5BN SUSTAINABLE COVID NBK Capital, Standard Chartered, UBS Financial advisers to Adnoc: Bank of 19 SUKUK America, First Abu Dhabi Bank, Mizuho Joint lead managers and joint National Bank of Kuwait (NBK), the coun- Independent financial adviser: Moelis & Co bookrunners: Citi, Crédit Agricole, try’s largest bank, returned to the bond mar- Senior mandated lead arrangers: Abu Emirates NBD, GIB Capital, HSBC, kets in February 2021 with a refinancing Dhabi Commercial Bank, Banco Islamic Corporation for the Development deal, as the end of the non-call period for Santander, BNP Paribas, First Abu Dhabi of the Private Sector, Natixis, Société $700m of outstanding perpetual non-call Bank, HSBC, Mizuho, MUFG, Standard Générale and Standard Chartered six-year (NC6) Additional Tier 1 (AT1) Chartered Bank, SMBC Co-manager: Kuwait International Bank bonds, which it issued in April 2015, fast Mandated lead arrangers: Citi, Crédit approached. Agricole, Natixis, Société Générale, The Islamic Development Bank (IsDB) has It opted to issue a new tranche of securi- Emirates NBD, Samba adopted a wide-ranging approach to fund- ties with the same perpetual NC6 structure, Arrangers: CaixaBank, DBS Bank ing programmes to tackle to consequences as the previous notes and executed the call of the Covid-19 pandemic. Its five-year option on the prior tranche on April 9, 2021. In one of 2020’s largest global energy infra- $1.5bn sustainable Covid-19 sukuk in June The new tranche of bonds was priced structure transactions, a consortium of the 2020 was a key transaction as part of its with a coupon of 3.625%, reflecting a price world’s leading infrastructure investors and efforts around three pillars of “Respond, tightening of 37.5 basis points from initial operators, sovereign wealth and pension Restore and Restart”. guidance. The issuance received healthy funds have acquired a 49% stake in Adnoc IsDB was the first body to issue an demand, and was multiple times oversub- Gas Pipelines, a newly created subsidiary of Islamic instrument to finance efforts to com- scribed with orders from 169 investors. state-owned energy firm Abu Dhabi bat the effects of Covid-19. The sukuk, the It was the lowest coupon ever achieved National Oil Company (Adnoc). second issuance under the bank’s sustaina- for a conventional US dollar denominated The consortium – consisting of Global ble bond framework, was rated AAA – the AT1 issuance from a bank in the Middle East Infrastructure Partners, Brookfield Asset first ever AAA-rated Sustainability Sukuk in and north Africa region. Management, Singapore’s sovereign wealth the global capital markets. fund GIC, Ontario Teachers’ Pension Plan The proceeds from the sukuk will be Board, NH Investment & Securities, and directed towards “access to essential ser- Italian energy infrastructure company Snam vices” and “small and medium-sized enter- – invested a total of $10.1bn, valuing the prise financing and employment generation” company at $20.7bn. A $7.96bn two-year programmes across its 57 member countries. commercial loan was signed by the consor- Bookbuilding for the sukuk began on tium to back their investment. Adnoc will June 17, with initial price thoughts set at the retain the 51% majority stake. midswaps plus 70 basis points (bps) area. Adnoc Gas Pipelines holds a 20-year Following strong demand from investors, concession to 38 gas pipelines covering a the deal was eventually priced at midswaps total of 982 kilometres. The pipelines are a plus 55bps, tightening by 15bps. This is the key component of the UAE’s energy ecosys- lowest profit rate ever that the bank has tem, transporting sales of gas from Adnoc’s achieved for a US dollar-denominated pub- onshore plants to its delivery network and lic sukuk. domestic end-customers. The distribution of investors was well The transaction structure allows Adnoc diversified, with 53% allocated to Middle East to tap new pools of low cost international and north Africa, 37% to Asia, 8% to Europe, investment capital, while maintaining full and 2% to others including US offshore. operating control over the assets included within the consortium’s investment. The transaction will result in upfront proceeds of more than $10bn to Adnoc. In return, Adnoc will pay Adnoc Gas Pipelines a volume- based tariff for use of the pipelines, backed by minimum volume commitments – offer- ing a low-risk profile and stable cash flows to the consortium’s investors.

58 | THE BANKER | May 2021

2021 | DEALS OF THE YEAR THE WINNERS

LOANS M&A QNB’S $3.5BN TERM LOAN ADPOWER AND TAQA’S MERGER Bookrunners, mandated lead arrangers Advisers to ADPower: Citi, Rothschild and underwriters: Bank of America, & Co Barclays, HSBC, Maybank, Mizuho, MUFG, SMBC, Standard Chartered In July 2020, Abu Dhabi National Energy and UOB Company (Taqa) and Abu Dhabi Power Cor- Mandated lead arrangers: Intesa poration (ADPower) completed a merger Sanpaolo and JPMorgan which created one of the largest power com- panies in the Middle East, with total assets Qatar National Bank (QNB) is the largest worth around Dh200bn ($54bn) and bank in the Middle East region. In October around Dh42bn in revenue. 2020, it opened syndication on refinancing As part of the deal, ADPower transferred of a $3.5bn term loan facility, which had first the majority of its power and water genera- been written in 2018. tion, transmission and distribution assets to The loan included a $2bn three-year Taqa in exchange for more than 106.3 billion tranche and a $1.5bn five-year tranche and new shares. will be used for general corporate purposes. This landmark transaction will accelerate The syndication closed in mid-Novem- the transformation of the power and water ber. In addition to the nine underwriters, a industry in the UAE, and is widely regarded total of 25 institutions from around the as a positive development. For instance, fol- world committed to the financing, under- lowing the deal, Moody’s upgraded Taqa’s scoring the success of the transaction despite issuer rating to Aa3 from A3, with the agency challenging market dynamics at the time. commenting that the new assets had had a There was significant international investor significant positive impact on Taqa’s business interest in the loan, allowing QNB to and financial profiles. broaden its investor base. Prior to the transaction, ADPower was a Notably, it was the first widely syndi- 74.1% shareholder of Taqa; following the cated five-year term facility for a bank finan- merger that has increased to 98.6%. Taqa cial institution since the financial crisis and remains listed on the Abu Dhabi Securities the largest five-year dual-tranche syndica- Exchange and it intends to increase the size tion ever issued by a bank in the Middle East. of its free float through a public offering in the future.

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