IFRASIA

INTERNATIONAL FINANCING REVIEW ASIA

MAY 5 2018 ISSUE 1039 www.ifrasia.com

Xiaomi lines up blockbuster HK IPO under new dual-class share rules

Shandong Iron & Steel files to sell perps convertible into equity

Casino operator plans Cambodia’s first offshore bond offering

PLUS: MONTHLY LEAGUE TABLES

EQUITIES EQUITIES BONDS PEOPLE & MARKETS Foxconn’s mainland Indian real estate Lippo Karawaci UBS becomes first unit mulls selling firms look to sell faces cash crunch foreign bank to part of jumbo IPO shares as sector’s after breaching apply for majority to strategic buyers outlook improves bond covenant control of China JV 07 08 08 12 REGISTER TODAY

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Leap of faith to convince investors of its growth plans and list at a reasonable valuation. If it fails, Hong Kong’s leap into the iaomi’s giant IPO is widely seen as a turning point for unknown will be looking more like a step backwards. Hong Kong, and for China’s technology sector. So far, X it’s looking more like a leap of faith. Years ago, when a certain global bank looked to buy credit On the right track insurance for a loan it had agreed to China’s Xiaomi, the insurer – quite reasonably – asked to see the company’s he Asian Development Bank is cosying up to the lNANCIALSû4HATSûWHENûTHEûDEALûHITûAûSNAGûTHEREûWERENTûANY private sector, if last week’s annual meetings are 8IAOMISû)0/ûlLINGûLASTûWEEKûLIFTEDûTHEûLIDûONûONEûOFûTHEû 4 anything to go by. In capital markets terms, that is COUNTRYSûBEST KNOWNûTECHNOLOGYûBRANDSûFORûTHEûlRSTûTIMEû long overdue. With access to the historical results, creditors no longer 4HEûPRIVATEûSECTORûFEATUREDûUNUSUALLYûPROMINENTLYûONûTHEû need to take the smartphone maker on blind trust. agenda in Manila. Executives from Veolia Japan, McKinsey, For equity investors and the Hong Kong stock market, Unilever and China’s Ant Financial, among others, however, the deal is a step into the unknown. addressed delegates on topics ranging from gender diversity 8IAOMIûWILLûBEûTHEûlRSTûCOMPANYûWITHûAûDUAL CLASSû TOûlNANCIALûTECHNOLOGY SHAREHOLDINGûSTRUCTUREûTOûmOATûINû(ONGû+ONG ûUSINGûNEWû As well as a welcome departure from the usual listing rules designed to attract “innovative” issuers to the PONTIlCATINGûBETWEENûMULTILATERALûBANKERSûANDûlNANCEû city’s exchange. ministers, the discussions offer real hope for greater A successful debut would be early vindication of Hong engagement between the public and private sectors on IMPORTANTûlNANCINGûINITIATIVES 4HEûGROWTHûOFû!SIASûINSTITUTIONALûINVESTORûBASEûWASûAû For equity investors and the recurring theme throughout the meetings, making it quite clear that the drive to leverage private-sector funds into Hong Kong stock market the infrastructure development through the capital markets is deal is a step into the unknown. gaining ground in the multilateral sector. Novel discussions around portfolio-based investments alongside the IFC, risk-sharing agreements with private +ONGSû)0/ûREFORMS ûANDûAûVOTEûOFûCONlDENCEûINûTHEûCITYSû insurers and co-investments with dedicated green funds are long-term future as a conduit for Chinese capital. all a step in the right direction. But this is no slam dunk. On the private side, demand for long-term, sustainable Xiaomi is said to be targeting a high valuation for the investments is certainly rising, but most of it is from listing, with discussions starting at US$70bn and a P/E target outside the region. Major hurdles remain in place in Asia’s of more than 80 times 2017 earnings (compared to less local markets, not least regulations that restrict domestic THANûNINEûFORû3AMSUNGûANDûûFORû!PPLE û4OûADDûAûTWIST û institutional investors to the most vanilla of investments. its founder has pledged to cap the margin it makes from its Integration and standardisation is lacking across the hardware devices at 5%. REGION ûANDûEFFORTSûTOûMOVEûINFRASTRUCTUREûlNANCINGûBEYONDû Recent IPOs from the technology sector are also giving the banking sector are proving frustrating. investors pause for thought. ZhongAn Online P&C 4HEû!$"ûANDûITSûPEERSûCANûHELPûCHANGEûTHAT ûBUTûTHEYûWILLû )NSURANCE û4ENCENTSûE BOOKûBUSINESSû#HINAû,ITERATUREûANDû need to work with both public policymakers and private gaming hardware maker Razer all popped when they went sector investors. In that regard, last week’s line-up of public towards the end of 2017, but have given up most of speakers is cause for celebration. those gains. Ant Financial’s CEO, Eric Jing, likened the path towards ZhongAn and Razer are well below their IPO price. China FULLûlNANCIALûINCLUSIONûTOûAû KILOMETREûJOURNEYû4HEû ,ITERATUREûISûSTILLûûINûTHEûMONEY ûHAVINGûALMOSTûDOUBLEDû progress made so far, he said, through the introduction of on its debut. NEWûlNANCIALûTECHNOLOGIESûANDûGREATERûCONNECTIVITY ûHASû 0ING!Nû(EALTHCAREûlNISHEDûONLYûmATûTOûITSû)0/ûPRICEûONû moved Asia only about 100 metres down the track. Friday despite a wildly oversubscribed public offering. He may just as well have been talking about Asia’s capital 8IAOMIûCANûREVERSEûTHATûTREND ûBUTûITûWILLûlRSTûNEEDû markets.

International Financing Review Asia May 5 2018 1 INTERNATIONAL FINANCING REVIEW ASIA CONTACTS

EDITOR EDITOR, IFR COMPANY INDEX Indorama Ventures 38 3TEVEû'ARTON Matthew Davies Accolade Wines 14 IndoStar Capital Finance 32 +852 2912 6670 +44 (0)20 7542 7504 Adaro Energy 14 KfW 12 [email protected] DESK EDITOR Khon Kaen Sugar 38 HEAD OF ASIAN CREDIT Vincent Baby Aroundtown 12 Kingboard Chemical Holdings 30 Daniel Stanton HEAD OF PRODUCTION Asian Development Bank 35 +65 6417 4548 Korea National Oil Corporation 36 Victor Ng Astra Sedaya Finance 33 ASIA EQUITIES EDITOR Lavasa 31 PRODUCTION ASSISTANT AU Optronics 37 Fiona Lau Mike Tsui Australia and New Zealand Liberty Financial 13 +852 2912 6673 HEAD OF GLOBAL ADVERTISING AND Banking Group 13 Lippo Karawaci 8 DEPUTY HEAD OF ASIAN CREDIT SPONSORSHIP Lippo Malls Indonesia Retail Trust 8 Frances Yoon AVIC International Leasing 18 Shahid Hamid +852 2841 5783 Bank Nederlandse Gemeenten 12 Lodha Developers 8 +65 9755 5031 DEPUTY EQUITIES EDITOR, ASIA Bank of Communications 20 Manulife US REIT 35 IFR ASIA AWARDS MANAGER S. Anuradha Bank of Communications Macau 18 Meituan-Dianping 4 Paul Holliday +65 6417 4547 +44 (0)20 7542 8018 BlueScope Steel 12 Members Banking Group 13 SENIOR CREDIT CORRESPONDENT, ASIA GLOBAL ADVERTISING Bumi Serpong Damai 33 Merchants Union Consumer Finance 9 Kit Yin Boey PRODUCTION MANAGER Minmetals Land 16 +65 6417 4549 Busan Bank 17 'LORIAû"ALBASTROû CEFC Shanghai International Group 17 Minsheng Financial Leasing 9 ASIA PACIFIC BUREAU CHIEF, LOANS +44 (0)20 7542 4348 Prakash Chakravarti Central Proteina Prima 33 MNC Investama 33 SUBSCRIPTION SALES ENQUIRIES +852 2912 6671 Cheng Loong 37 Nagacorp 6 China, Hong Kong, Taiwan, Korea, Japan SENIOR REPORTERS: HONG KONG Nanjing No.1 Pesticide Group 20 Alan Wong China Aoyuan Property Group 16 Thomas Blott +852 2912 6606 China Huadian 15 Nanjing Red Sun 20 +852 2841 5878 China Kepei Education Group 19 Nanjing Securities 20 Carol Chan India, Singapore, Malaysia, Thailand, National Housing Bank 31 +852 2912 6604 Indonesia and Australia China National Nuclear Corporation 17 Samantha Harris Nature’s Care 15 EQUITY RESEARCHER: BEIJING China New Town Holding 30 +612 9373 1749 Ken Wang CITIC Capital Holdings 30 Ningbo Yuan Da Industry Investment 19 +86 10 6627 1259 SUBSCRIPTION ACCOUNT MANAGER CITIC Dameng Investments 18 NSW Electricity Networks Finance 13 Pia Batuan SENIOR REPORTER: SYDNEY Dewan Housing Finance Corporation 31 Pacific Securities 20 +65 6403 5542 John Weavers Digital Telecommunications Pepper Group 14 +61 2 9373 1655 CLIENT SERVICES Infrastructure Fund 38 Poly Property Group 16 SENIOR ANALYST: TOKYO [email protected] DLF 8 Power Finance Corp 31 Takahiro Okamoto WEBSITE Dong Yin Development (Holdings) 19 Pruksa Holding 38 +813 6441 1773 www.ifrasia.com ASIAN CREDIT CORRESPONDENT Embassy Office Parks 8 Qingdao Haier 19 EMAIL ADDRESSES Quantum Solar Park Semenanjung 34 Krishna Merchant lRSTNAMELASTNAME TRCOM EMR Capital 14 +65 6417 4544 Evergrande Group 17 Red Star Macalline Holding Group 16 REPORTER: HONG KONG Export-Import Bank of Thailand 38 Reliance Jio Infocomm 31 Ina Zhou Fantasia Holdings Group 16 Republic of Maldives 35 +852 2912 6674 Federal International Finance 32 Rural Electrification Corp 31 First REIT 8 Sarimelati Kencana 34 Flexi ABS Trust 2018-1 13 SDIC Power 19 HONG KONG (HEAD OFFICE) SINGAPORE Foxconn Industrial Internet 7 SGSP (Australia) Assets 12 16/F Cityplaza 3, 18 Science Park Drive, Genius Auto Finance 9 Shandong Iron & Steel Group 4 14 Taikoo Wan Road, Singapore 118229, Singapore Suntec REIT 36 Taikoo Shing, +65 6775 5088 Genting Malaysia 34 Hong Kong Global Logistic Properties 17 Tencent Music Entertainment 19 LONDON +852 2843 6363 30 South Colonnade, Canary Wharf, Government of Sri Lanka 36 TransGrid 13 TOKYO London E14 5EP Great Wall Guoxing Financial Leasing 9 Tsit Wing International 30 30F Akasaka Biz Tower, +44 (0)20 7250 1122 Greentown China Holdings 18 United Bank of India 32 5-3-1 Akasaka, NEW YORK Minato-ku, Tokyo, Guangzhou Finance Holdings Group 15 United Photovoltaics 3 Times Square, 18th Floor Japan 107-6330 New York, NY10036 Guangzhou R&F Properties 17 (Changzhou) Investment 9 +813 6441 1119 +1 646 223 4000 Hindustan Petroleum 32 Vinhomes 39 Hong Leong Financial Group 34 Virgin Australia Holdings 13 Hong Yang Group 16 WuXi AppTec 7 IFR Asia is a sister publication of International Financing Review. The contents of this HSBC Bank (China) 17 Xiaomi 4 publication, either in whole or part, may not be reproduced, stored in a data retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, Huarong Tianze Investment 9 Yangtze Optical Fibre and Cable 20 recording or otherwise without written permission of the publishers. Action will be taken Huya 19 Yihua Healthcare 19 against companies or individual persons who ignore this warning. The information set forth herein has been obtained from sources which we believe to be reliable, but is not Hydoo International Holding 16 Yuzhou Properties 16 guaranteed. Subscriptions to IFR Asia are non-refundable after their commencement issue Hyosung Vina Chemicals 39 Zhongsheng Group Holdings 20 date. © Thomson Reuters 2018. Published by Thomson Reuters in Hong Kong. Printed in Hyundai Rotem 37 ZTE (HK) 18 (ONGû+ONGûBYû$IVERSIlEDû'LOBALû'RAPHICSû'ROUPû5NAUTHORISEDûPHOTOCOPYINGûISûILLEGAL

2 International Financing Review Asia May 5 2018 INTERNATIONAL FINANCING REVIEW ASIA Contents MAY 5 2018 ISSUE 1039

COVER STORIES COUNTRY REPORT

EQUITIES 04 Xiaomi blockbuster heads to HK 21 AUSTRALIA 35 MONGOLIA Chinese phone maker Xiaomi last week became the first BlueScope Steel has hired The Asian Development Bank banks for a proposed received approval for its first to take advantage of Hong Kong’s new listing rules by benchmark five-year US dollar Mongolian tugrik bond issue, applying for the city’s biggest technology IPO. senior unsecured bond offering either offshore or onshore it off its EMTN programme. said on Friday. BONDS 04 Shandong trials new CB model 24 CHINA 35 SINGAPORE Shandong Iron & Steel is planning to issue China’s first Guangzhou Finance Holdings Manulife US REIT hired DBS, Group has mandated CICC, HSBC and Standard Chartered convertible perpetual bond, giving investors the option Ping An of China and Wing to arrange investor meetings to convert the instrument into equity. Lung as joint coordinators for a in Hong Kong and Singapore, US dollar Reg S bond. which began on May 3. BONDS 06 Nagacorp set for Cambodia debut 30 HONG KONG 36 SOUTH KOREA Nagacorp, which owns and operates the only integrated Hong Kong-listed Kingboard Korea National Oil Corporation Chemical Holdings is returning has mandated BNP Paribas casino and hotel resort in Phnom Penh, plans to be the to the market for a HK$6bn (Suisse) and UBS to lead a first Cambodian issuer to sell offshore bonds. four-year loan, six months after Swiss roadshow on Monday in obtaining a HK$5.5bn facility. Zurich.

NEWS 31 INDIA 36 SRI LANKA The assets under management A group of 10 banks is 07 Foxconn mulls strategic tranche of offshore Indian bond funds among the bidders vying for The Shanghai IPO of Foxconn Industrial Internet may have doubled to US$8bn in the mandate on a US$1bn- be the first mainland listing in more than four years to 2017, according to a Fitch equivalent loan for the set aside a portion of shares for strategic investors. release. Government of Sri Lanka.

08 Indian property firms raise equity Three Indian real estate companies 32 INDONESIA 37 TAIWAN are preparing to tap the equity capital markets. Indonesian motorcycle leasing Taiwanese LCD maker AU 08 Lippo Karawaci faces cash crunch Indonesian property developer Lippo company Federal International Optronics has launched a Karawaci faces a cash crunch after breaching a covenant in its dollar bonds. Finance raised US$300m from NT$35bn five-year loan, 09 China’s loan tenors shrink Onshore Chinese loans are getting shorter as a debut US dollar bond offering 10 months after it closed a banks seek to limit risks and price-sensitvie borrowers reduce maturities. for general corporate purposes. NT$23bn loan.

34 MALAYSIA 37 THAILAND PEOPLE & MARKETS Genting Malaysia has Export-Import Bank of Thailand established a M$3bn MTN has hired banks for a proposed 12 UBS first to raise China stake programme with CIMB and offering of US dollar senior UBS has become the first foreign bank to apply for Maybank as joint principal unsecured notes and has majority ownership of an existing Chinese securities advisers and lead arrangers. started to meet investors. joint venture, days after regulators eased restrictions. 35 MALDIVES 38 VIETNAM 13 India eases debt rules to buttress rupee India’s central bank has The Republic of the Maldives South Korean conglomerate loosened rules for foreign investment in domestic bonds. has returned to the offshore Hyosun is cancelling a US$1bn 18 Who’s moving where Ivan Lee has joined BoCom Hong Kong branch as bond market with a US$100m project financing in Vietnam. deputy chief product manager in the structured & capital finance dept. private placement. The five-year Hyosung Vina Chemicals was 18 In brief The scheme that allows qualified PRC domestic financial bonds were issued at par with a the borrower. institutions to buy renminbi-denominated products overseas has resumed. coupon of 5.5%. 16 Interview Mathias Meisel, head of capital markets at Zurich Insurance

ASIA DATA 40 This week’s figures

International Financing Review Asia May 5 2018 3 News Cambodian gamble 06 Foxconn’s strategic tranche 07 Indian developers to raise equity 08 Xiaomi blockbuster heads to HK

„ Equities Smartphone maker files for ‘game-changing’ IPO under dual-class share rules

BY FIONA LAU More significantly, the deal follow. MEITUAN-DIANPING, China’s will introduce dual-class shares “It’s a game-changing IPO for largest provider of on-demand Chinese smartphone maker to the Hong Kong exchange for Hong Kong. A successful Xiaomi online services, has already XIAOMI last week became the the first time, giving the stock listing will definitely attract ditched the US for a Hong Kong first issuer to take advantage exchange an immediate return more jumbo tech listings in the IPO of several billion dollars. of Hong Kong’s new listing on its reforms and setting the city,” said a banker away from CLSA, Goldman Sachs and rules with an application for stage for similar listings to the deal. Morgan Stanley are joint the city’s biggest IPO from the technology sector. The filing came only days after rules aimed at wooing technology listings took effect on April 30, giving Hong Kong an immediate boost in the global competition to lure high- profile Chinese IPOs. Xiaomi is looking to raise about US$10bn from the deal as early as June, according to people close to the deal. It also plans to offer Chinese Depositary Receipts to mainland investors if regulations allow. At US$10bn, Xiaomi’s IPO will be the world’s largest since the US$25bn listing of Chinese e-commerce giant Alibaba Group in September 2014. It is also set to be the second largest Hong Kong IPO after the HK$159bn (US$20.5bn) listing of insurer AIA in 2010.

first Chinese company to Shandong trials new CB model offer equity-linked products in China’s interbank market, „ Bonds Steelmaker’s convertible perpetual would be a first in the interbank market as well as the first to do so through an undated deal. BY INA ZHOU the National Association of equity for shares of Shanghai- Analysts said that the Financial Market Institutional listed Shandong Iron & Steel proposed innovation was a SHANDONG IRON & STEEL GROUP is Investors. Co, another subsidiary, when way for the issuer to make planning to issue China’s first The bonds, to be sold in the the listed company issues perpetual bonds more attractive convertible perpetual bond, interbank bond market, will new shares through private to investors. Perps have become giving investors the option to give investors the option to placements. a hard sell in the domestic convert the instrument into swap the notes for equity of In addition, should Laiwu market since the first coupon equity as part of its efforts to Laiwu Iron & Steel, an unlisted launch an IPO during the life reset on onshore perps took reduce debt. subsidiary of the issuer, of the notes, there would be place in February. The state-owned steelmaker during the first five years. The an option for investors to swap China Jilin Forest Industry intends to sell Rmb5bn exchange price would be based the bonds or Laiwu’s unlisted Group then took the (US$787m) perpetual non-call on the net asset value per share equity for the newly listed unprecedented step of paying a five securities with features of Laiwu, according to the shares. step-up coupon on its Rmb1bn similar to convertible bonds, prospectus. The plan, subject to approval perpetual bonds, giving a according to a preliminary Investors would then be from NAFMII, would make wake-up call to investors who bond prospectus filed with able to exchange Laiwu’s Shandong Iron & Steel the had viewed the format as

4 International Financing Review Asia May 5 2018 For daily news stories visit www.ifrasia.com Lippo cash crunch 08 Shrinking loan tenors 09 League tables 10

sponsors for the Xiaomi IPO. According to IDC, Xiaomi was products, such as smart TVs and change proved instrumental in the fourth-largest smartphone laptops, amounted to 20.5% of allowing Xiaomi to list in the AIMING HIGH maker in the world for the first overall revenue, up from 18.1% city. Xiaomi, however, has set quarter of 2018 with a market in 2016. Revenue from internet According to the filing, Lei ambitious targets for the IPO. share of 8.4%. services including advertising Jun and Lin Bin, co-founder and It is looking for a valuation of Xiaomi posted revenues of and value-added services president, are the beneficiaries at least US$70bn, according to Rmb114bn in 2017, up 67% contributed 8.6% of the total of the company’s weighted people close to the discussions, from a year earlier. revenue, compared with 9.6% voting rights, controlling less and is positioning itself closer However, a Rmb54bn loss in 2016. than half the equity but around to its internet peers than other derived from fair value changes 85% of the voting rights. hardware makers. Currently, Lei Jun owns 31.4% In an open letter alongisde of Xiaomi’s share capital, split the IPO filing, chairman and between 429.5m Class A shares founder Lei Jun described “The valuation target will put Xiaomi at and 222m Class B shares. Each Xiaomi as an “innovation- around 83 times earnings based on its 2017 Class A share carries 10 votes driven internet company”. adjusted profit, which is much higher than other and each Class B share has one Its numbers showed that its smartphone makers. To justify the valuation, vote, giving him control of over operating profits more than 55% of the votes. trebled in 2017 to Rmb12bn Xiaomi has to demonstrate strong growth in Co-founder Lin Bin has 240m (US$1.89bn). overall markets other than just in India.” Class A shares and 39m Class B Still, talk of a US$70bn market shares, giving him a 13.3% stake cap may be too rich for some. and 30.0% of the voting rights. “The valuation target will Xiaomi plans to use 30% of put Xiaomi at around 83 of convertible redeemable WEIGHTED VOTING RIGHTS the funds raised for research times earnings based on its preferred shares led to a loss of Hong Kong Exchanges and and development, 30% for 2017 adjusted profit, which Rmb43.9bn in 2017, versus a Clearing introduced new rules investments, 30% for global is much higher than other profit of Rmb491m in 2016. on April 30 aimed at attracting expansion and 10% for working smartphone makers. To justify Excluding the loss of “innovative” companies to capital and general corporate the valuation, Xiaomi has to preferred shares and share- the exchange. From now on, purposes. demonstrate strong growth in based compensation, Xiaomi companies with dual-class share As of March 2018, Xiaomi overall markets other than just posted adjusted profit of structures, and pre-revenue and had about 190 million monthly in India,” said a fund manager. Rmb5.36bn in 2017, a 183% pre-profit biotech companies, active users of MIUI, its Samsung Electronics and gain from a year earlier. can list on the city’s bourse. customised operating system Apple, which ranked first and The sale of smartphones Hong Kong’s long-standing based on Google’s Android second in terms of market contributed 70.3% of Xiaomi’s opposition to weighed voting OS. Over 1.4 million users share in the first quarter, revenue last year, down from rights took it out of the had more than five connected traded at around 8.7x and 17.3x 71.3% in 2016. Revenues from running for the record Alibaba Xiaomi products excluding earnings respectively. internet-of-things and lifestyle IPO in 2014, and the rule smartphones and laptops. „

nothing more than higher- perpetual bonds unless they March, signed an agreement the interbank bond market, yielding bullet bonds. were promised either an IPO over a Rmb26bn debt-for-equity or if the regulators are of Laiwu in the near future or swap programme with ICBC in really encouraging the new NOT ENOUGH INCENTIVES a private share placement of May 2017. structure,” said a syndicate However, some analysts doubt the listed Shandong Steel & The company expected the banker away from the deal. Shandong Iron & Steel Group is Iron Co. As it stands, there is programme would lower its The introduction of such offering enough incentives to no certainty either will happen debt-to-assets ratio by as much equity-linked perpetual bonds convince investors to swap the during the life of the bonds. as 10%. to the interbank bond market bonds into equity. An investor with a Chinese The perpetual offering, if it would require coordination “In theory, issuers could fund house speculated that goes ahead, would also mark among different regulators, he have more pricing advantage the offering might only target the first time in China a bank said. when there is an option to distressed-debt managers such has underwritten equity-linked For instance, if such perpetual swap bonds into equities,” said as China Huarong, giving them products, which are currently bonds are allowed to be swapped a Beijing-based credit analyst a new route to participate in only available on the Shanghai into shares of listed companies, with a Chinese securities house. the country’s debt-for-equity Stock Exchange and Shenzhen the China Securities Regulatory “however, I don’t think equities swap scheme, which aims to Stock Exchange. Only securities Commission, which oversees the in the unlisted Laiwu Steel ease the debt burden of state- houses, not banks, are allowed stock exchange market, would would be attractive at all to owned enterprises. to arrange deals in the two also have a say, he said. investors.” Shandong Iron & Steel stock bourses. China Construction Bank is the He said investors would Group, whose debt-to-assets “We need to see if [the deal] sole lead on Shandong Iron & treat the bonds like regular ratio stood at 84% at the end of is a one-off innovation in Steel’s offering. „

International Financing Review Asia May 5 2018 5 News Nagacorp set for Cambodia debut „ Bonds Casino operator targets US investors for frontier market’s first offshore issue

BY DANIEL STANTON Proceeds will be used to grow investors are expected to look we expect investors to add on a its VIP gaming business and at like-rated credits in South- premium given the Cambodian NAGACORP, which owns and refurbish hotel rooms. East Asia, as well as Macau jurisdiction,” said a market operates the only integrated The lack of pricing references casino bonds. source. casino and hotel resort in Nagacorp has decided to Phnom Penh, is planning to target the US investor base, become the first Cambodian given that is very familiar with issuer to sell offshore bonds. the gaming sector and has The company last week hired driven demand for many of the Credit Suisse and Morgan Stanley “The most relevant comparable credits are in the Macau offerings. as joint global coordinators and Macau gaming complex, but we expect investors Among Macau gaming bookrunners for a potential US to add on a premium given the Cambodian credits, Wynn Macau’s 2024 dollar debut in the 144A/Reg S and 2027 bonds, rated B1/BB– market. jurisdiction.” (Moody’s/S&P), were trading Hong Kong-listed Nagacorp at 5.3% and 5.8%, respectively, has been meeting investors in on Wednesday, according to Hong Kong, Singapore, London, Thomson Reuters data. Studio Boston and New York from May City’s 2019 and 2021 notes, 2, and has secured expected in Cambodia, which does “The most relevant rated B1/BB–, were quoted at ratings for the bonds of B1/B not have a domestic bond comparable credits are in the 4.7% and 5.4%, while Melco (Moody’s/S&P). market to speak of, means that Macau gaming complex, but Resorts’ 2025s, rated Ba3/BB,

6 International Financing Review Asia May 5 2018 For daily news stories visit www.ifrasia.com

were seen at 6.0%. Moody’s rating for Nagacorp Foxconn mulls strategic tranche is one notch above its rating for the Cambodian sovereign, „ Equities Jumbo A-share IPO would be first since 2014 to include cornerstone-like investors which has never issued offshore bonds. The rating BY KEN WANG, FIONA LAU FII’s float is seen as a milestone in Shanghai. About 50% of agency noted that Nagacorp in China’s drive to attract major the shares were sold to seven generates nearly of its revenue The landmark Shanghai IPO of domestic listings from the fast- strategic investors, with a 12- from tourists and does not FOXCONN INDUSTRIAL INTERNET may growing technology sector. It month lock-up period. rely on local banks or capital be the first mainland listing is the first high-profile tech However, some bankers markets for funding. Much in more than four years to set firm to enjoy a fast track for away from FII’s deal reckon of its financing so far has aside a portion of shares for a mainland IPO, allowing it to the introduction of strategic come from its founder and strategic investors. bypass the long queue of listing investors may be controversial, controlling shareholder, The Shenzhen-based applications. given these investors have Malaysian businessman Dr subsidiary of Taiwan’s Foxconn, However, the regulator has guaranteed allocations for hot Chen Lip Keong, who holds a the world’s largest electronics been reluctant to grant final IPOs. 65% stake. contract manufacturer, is approvals for large floats to avoid Thanks to the artificially However, Moody’s said considering selling a portion further pressuring the volatile low prices, limited supply and Nagacorp’s rating is constrained of its IPO shares to a group of stock market. Some issuers have strong aftermarket performance, and unlikely to rise more than strategic investors who would to reduce their fundraising size A-share IPOs are normally one notch higher than the agree not to sell them for a to secure approvals. hundreds or even thousands sovereign. certain period, according to For instance, biotechnology times oversubscribed. (Wuxi “We view the jurisdiction two sources familiar with the company WUXI APPTEC, which AppTec’s retail tranche was 4,913 as very high risk due to the situation. cleared a listing hearing 19 days times covered.) Investors can country’s non-transparent The practice, similar to after FII, has already completed only receive allocations on a pro- policymaking environment, cornerstone investments in its Rmb2.25bn Shanghai IPO rata basis. very weak institutional Hong Kong IPOs, is designed to after cutting its fundraising size One of the sources close to strength, and limited monetary ease regulators’ fears over the by 61% to meet the regulatory FII’s float, however, reckons flexibility,” wrote S&P, noting impact of sizable floats on the requirement on the valuation the introduction of strategic that Nagacorp’s reliance on broader market. cap of 23 times historical investors is reasonable for large tourism meant that it could be FII is yet to set a target size earnings. IPOs. affected in the event of travel from the IPO, but it plans FII, on the other hand, has “Strategic investors will face a disruptions or a deterioration in to use the proceeds to fund very limited room to lower its lock-up period, so it is not unfair the political environment. investments of some Rmb27bn IPO size. The company plans to other investors. It is a good Nagacorp’s concession (US$4.24bn). to sell up to 10% of its enlarged way to reduce the impact on the runs until 2065 and it has a “The big fundraising size is capital in the IPO, which broader market,” said the source. monopoly in the area until one of the key hurdles to the matches the minimum free-float “Meanwhile, if the company the end of 2035. The original company getting final approval,” requirement for a domestic introduces strategic investors, it NagaWorld resort was said one of the sources. “If listing. would select very high-quality expanded in 2017 when Naga2 the issuer introduces strategic It also has little room to lower investors, which will be positive opened a short distance away, investors, it could effectively the valuation, as FII is already at for the company’s business in connected by an underground reduce the fundraising size to a deep discount to listed peers. the future,” said the source. shopping centre. the public, so as to ease the Assuming FII floats a 10% stake FII was founded in 2015 The company is developing burden to the broader market,” and raises the full Rmb27bn, to design and manufacture a second casino and hotel said the source. its IPO price would represent a communication equipment, complex in Vladivostok, Russia, This is particularly important post-IPO historical P/E of about cloud service equipment, which is expected to open next at a time when the the China-US 16 times. precision tools and industrial year, but this is outside the trade dispute is weighing on the Its listed peers in the robots. It posted net profit of restricted group that is issuing domestic markets. computers, communications Rmb16.2bn last year on revenue the bond. FII cleared a listing hearing and other electronic equipment of Rmb354.5bn. S&P said that Nagacorp could on March 8, only 36 days after manufacturing industry were Foxconn directly and seek further development it filed the IPO application. The traded at a historical P/E of 37.67 indirectly controls 94% of FII, opportunities in Mongolia company, however, has since times as of May 3. according to the filing. and Kazakhstan, but that been waiting for CSRC’s written CICC is the sponsor on the discussions were at a approval. During this period, the FIRST IN FOUR YEARS float. preliminary stage. Shanghai Composite Index has A tranche for strategic investors The company plans to use The coastal resort town fallen more than 5%. would be the first on an A-share the proceeds for investment of Sihanoukville is the main FII is yet to determine IPO since China imposed its in industrial internet centre for the gambling whether to introduce strategic unwritten valuation cap in mid- platforms, cloud computing, industry in Cambodia, investors, given it still needs 2014. the production of internet with two dozens of casinos to discuss with regulators, In January 2014, in one of the equipment, research and already in operation or under according to the sources. most recent examples of IPOs development of 5G industrial construction, mostly funded by FII did not respond to a involving strategic investors, internet systems and computing Chinese money. „ request for comment. Shaanxi Coal raised Rmb4bn data centre projects. „

International Financing Review Asia May 5 2018 7 News Indian property firms raise equity

„ Equities Real estate companies capitalise on sector recovery to cut debt

BY S ANURADHA a qualified institutional RARE ISSUANCES will be able to raise only placement of up to Rs45bn The real estate sector has been around US$750m from its IPO. Three Indian real estate (US$676m) in the second half, an infrequent issuer in recent “US$1bn is aspirational not companies are preparing to tap and EMBASSY OFFICE PARKS real years. Prestige Estates was the achievable,” an ECM banker the equity capital markets for estate investment trust plans last realty firm to complete an said. up to a combined US$2.7bn on to file for a US$500m–$1bn IPO IPO in 2010. This will be Lodha’s second hopes that the worst is over for in June. Qualified institutional attempt at listing after a failed the sector. Balaji Raghavan, head of the placements have also been rare attempt in 2010 due to weak Demand, particularly for real estate practice at financial and sold at hefty discounts. market conditions. residential property, has been services provider IIFL Group, Last year Sunteck Realty Lodha is selling Rs37.5bn sluggish in India since 2016 said the country’s property raised Rs5bn through a QIP new shares in the IPO, and the after the federal government sector has bottomed out, priced at a 11% discount to Mangal Prabhat Lodha family is implemented demonetisation, although it is too early to talk the pre-deal close and Brigade offering 18m secondary shares. introduced the goods and of an all-round recovery. Enterprises raised the same CLSA, JM Financial, Kotak and services tax and set up “Demonetisation, GST and amount at a 4.9% discount. Morgan Stanley are joint global the Real Estate Regulatory RERA have weighed on the These discounts were steep coordinators and bookrunners Authority. industry as many small players as many companies from the with BOB Capital, Edelweiss, A severe need for capital is were not able to cope with financial sector sold shares at HDFC, ICICI Securities, IIFL, UBS now forcing highly indebted them,” he said. 0%–2% discounts last year. and Yes Securities. real estate companies to tap the The commercial property Bankers away from the DLF Meanwhile, the DLF QIP is capital markets. sector has seen some and Lodha deals said both designed to maintain the public LODHA DEVELOPERS, one of improvement because of transactions have to be priced shareholding at 25% and reduce India’s largest realty firms, last low supply, while the low to at a decent discount to the debt. week filed for a US$700m– mid-end residential sector industry’s EV/Ebitda range of The group has taken several $1bn IPO. Meanwhile, DLF is continues to see demand, 10x–18x to attract investors. steps to reduce debt. Last year working towards launching Raghavan said. Some bankers think Lodha Singapore’s GIC agreed to buy

Lippo Karawaci faces cash crunch Fitch said it believed LMIRT would have to issue new equity to fund the acquisition. „ Bonds Asset sales likely after Indonesian developer breaches bond covenants That may not be popular with minority shareholders: BY DANIEL STANTON has to be met by cash or strengthen the balance sheet the Singapore-listed units further sales of short-term to regain the former rating have fallen 13% over the past Indonesian property developer investments,” wrote Jacintha and stable outlook”. month, hitting a two-year low LIPPO KARAWACI faces a cash Poh, senior analyst at Moody’s. Lippo Karawaci owns a 30% of S$0.32 on April 30. crunch after breaching a Moody’s in April cut Lippo stake in LIPPO MALLS INDONESIA S&P said it expected LMIRT covenant in its dollar bonds, Karawaci’s rating, and that on RETAIL TRUST and a 31% stake in to refinance its 2018 maturities and might need to turn to one its bonds issued through Theta FIRST REIT, which is also focused before raising new funds for of its Singapore-listed REIT Capital, to B2 from B1, while on Indonesian property. OCBC acquisitions. holdings to help raise funds. S&P cut its respective ratings wrote in a research note that LMIRT has S$270m In its full-year 2017 to B– from B. Fitch joined the trade receivables had been (US$204m) of Singapore dollar- accounts, the developer’s trend on Thursday, cutting growing at the two REITs as denominated debt falling due fixed-charge coverage ratio Lippo to B from B+. Lippo Karawaci and related this year: a S$80m revolving dropped below 2x, which S&P warned that it could entities have been delaying credit facility, a S$90m term under the indenture of its US downgrade Lippo Karawaci payments. loan due on December 15 and dollar bonds means it cannot to CCC if it did not complete a S$100m 4.5% bond maturing incur further indebtedness to asset sales within the next six REIT SALES on November 23. cover its net operating cash months. The developer has been A Singapore DCM banker outflow, including interest Fitch said its negative watch considering selling its Jakarta- said he did not expect LMIRT payments. reflected the company’s weak based Puri Mall, valued at to have any trouble meeting its “Over the next 12-18 liquidy and execution risks Rp5trn–Rp6trn, to LMIRT, but obligations. months, without the around its asset sales plan. S&P warned that it was too Raising new bonds might successful execution of assets Following the Moody’s large for the REIT to absorb. be more difficult, as the REIT sales, we expect net operating and S&P downgrades, The asset would represent no longer has a public credit cash outflow at the holding Lippo Karawaci said it was 30% of the REIT’s book rating. Moody’s withdrew its company level to be around “committed to reinforce value and 60% of its market Ba1 rating with a negative Rp800bn (US$58m), which the company’s liquidity and capitalisation. outlook for business reasons

8 International Financing Review Asia May 5 2018 For daily news stories visit www.ifrasia.com

a 33.3% stake in DLF Cyber City Developers, a DLF subsidiary, China’s loan tenors shrink for Rs89bn. The syndicate for the QIP „ Loans Foreign lenders face soaring costs in the inter-bank market has not yet finalised but ICICI Securities, Kotak, JP Morgan and BY YAN JIANG INVESTMENT and HUARONG TIANZE Given the ongoing mismatch Morgan Stanley are said to be INVESTMENT are also in the market between the PBoC rates and their working with the company. Syndicated loans in the onshore with Rmb500m and Rmb1bn funding costs, some banks are For its part, the sponsors of Chinese market are getting two-year facilities, respectively. becoming innovative. Blackstone and Embassy Group- shorter as foreign banks seek Bankers say many deals with “If possible, we’d like to have backed Embassy Office Parks to reduce risks and price- two-year maturities pay the same a term in the loan agreement are still finalising the assets sensitive borrowers opt to limit as three-year transactions as the which will allow interest margin that will be part of the REIT. maturities. benchmark PBoC lending rates adjustments in tandem with A Mumbai-based fund Several companies have for onshore loans are the same Shibor fluctuation,” said a senior manager said the REIT has been turned to one-year borrowings for two and three-year tenors, banker at a Taiwanese lender. indicating a yield of around 7%. since the second half of last year, giving them no incentive to take Merchants Union Consumer Last year two infrastructure in a departure from the three- longer-term risk. Finance’s debut Rmb1.15bn one- investment trusts (InvITs) year maturities that have been year bullet signed last October completed IPOs at an implied standard in recent years. SOARING COSTS was the first deal priced over rate of return of 10.8%–12%. The latest is a Rmb500m Foreign banks, which have Shibor and syndicated among However, bankers said the (US$79m) facility launched in limited renminbi deposits, foreign banks. It offered a top- growth potential of a REIT is late April for GREAT WALL GUOXING are especially susceptible to level all-in pricing of 115bp much higher and, as a result, it FINANCIAL LEASING. Other borrowers higher rates in the interbank based on a margin of 100bp over could offer a lower yield. in the market with similar tenors market. While the PBoC rate the one-year Shibor. Fubon Bank “I would still think they need include MERCHANTS UNION CONSUMER for one-to-five-year loans has (China) was the sole MLAB. to offer around 8% to factor for FINANCE and MINSHENG FINANCIAL been unchanged at 4.75% since In February, Hana Bank the novelty of the instrument LEASING, which are seeking October 2015, rates have spiked (China) priced Minsheng in India,” the fund manager Rmb600m and Rmb500m, in the interbank market. Financial Leasing’s Rmb500m said. respectively. The three-month Shanghai one-year bullet at an all-in Morgan Stanley and JM Financial While shorter maturities often interbank offered rate (Shibor), a pricing of 95bp over the one-year are working on the IPO. „ point to credit concerns and a gauge for foreign banks’ funding Shibor. dip in risk appetite, bankers say costs in China, hit 4.9133% at the shift is also due in part to the end of last year, up 162bp NEW ECONOMY in April. rising funding costs, a result of in 12 months. It has since been The shorter tenors are also a Its earliest significant debt China’s move to tighten liquidity on a downward track, falling to protection against fresh risks maturity is in 2022 when to limit credit growth. 3.993% on May 3. as foreign banks have to lend a US$410m 7% bond falls “When we tried to charge However, foreign banks to unconventional borrowers, due. The 2022 bonds were more, price-sensitive borrowers remain cautious and anticipate including consumer finance bid at a cash price of 93 on opted for shorter tenors,” said their financing costs to stay high companies, amid lower deal flow. Thursday, implying a yield of a senior banker in Shanghai. because China is expected to China’s loan volume tumbled 9.4%, having traded at par in “This also makes us feel more keep deleveraging its economy 48% year on year in the first January. comfortable. Who knows what and shutting down shadow- quarter to US$17.12bn. This Lippo Karawaci could also will happen in three years’ banking activities to reduce was partly because traditional consider trimming its stakes time?” systemic risks. borrowers were struggling as in the two REITs to raise Adding to the uncertainty, All-in pricing based on PBoC China shifts its economy away money, but that would reduce China is mulling further rates is much richer than it was from investment and exports, its control over them and regulations against thousands of 18 months ago. while trade protectionism is on might make it harder to sell leasing firms, which are frequent Great Wall Guoxing Financial the rise. properties to them. borrowers in the syndicated loan Leasing’s deal is offering a top- Meanwhile, start-ups in sectors Lippo Karawaci was late market. Detailed rules have yet level all-in pricing of 133% of the such as technology, consumer filing its 2017 accounts, partly to come out. PBoC rate via an interest margin products, electric vehicles and due to clarifications it needed Two-year deals are also of 115% of the PBoC rate for the healthcare are blooming under to provide to the domestic increasingly replacing three-year one-year bullet loan. favourable government policies. regulator about a planned facilities. In August 2016, its peer “A lot is happening and rights issue at its 54%-owned Two weeks ago, Geely unit Haitong UniTrust International uncertainties are rising,” said subsidiary Lippo Cikarang. GENIUS AUTO FINANCE made a quick Leasing paid only a top-level a third source based in Beijing, Filing more than 90 days after return for a loan of at least all-in pricing of 100% of the PBoC who just left the banking the end of the year would have Rmb780m with a two-year rate based on a margin of 93% of industry to work in a financial constituted an event of default tranche A and a one-year tranche the PBoC rate for its Rmb910m leasing company. if holders of at least 25% of its B. The borrower had raised dual-tranche facility with one “Banks have to be brave and bonds had given written notice Rmb900m less than four months and three-year tenors. embrace the new economy, so to the company before it had earlier through a deal with a The PBoC rate for one-year it’s better to start with a one- had published the annual similar structure. loans has been at 4.35% since year loan to reduce risks while financial statement. „ UNITED PHOTOVOLTAICS (CHANGZHOU) October 2015. building up relations.” „

International Financing Review Asia May 5 2018 9 League tables

Top bookrunners of Asian fixed- and floating-rate Top bookrunners of Asia Pacific syndicated loans Top bookrunners of Asia Pacific syndicated loans bonds for G3 currencies ex-Japan, inc-Australia G3 currencies (ex-Japan, inc-Australia) Int’l currencies, Rmb and NT$ (inc-Samurais and Yankees) 1/1/18 – 30/4/18 (ex-Japan, inc-Australia) 1/1/18 – 30/4/18 Amount 1/1/18 – 30/4/18 Amount Name Deals US$(m) % Amount Name Issues US$(m) % 1 Mizuho 7 2,731.5 7.9 Name Deals US$(m) % 1 HSBC 83 11,316.0 8.1 2 ANZ 10 2,611.6 7.6 1 Bank of China 44 12,519.9 15.8 2 Citigroup 51 7,529.3 5.4 3 HSBC 8 2,330.0 6.8 2 ANZ 22 5,126.5 6.5 3 JP Morgan 28 6,685.2 4.8 4 UOB 4 2,290.5 6.6 3 China Citic Bank 4 4,644.3 5.9 4 Bank of China 60 6,021.4 4.3 5 Standard Chartered 5 2,254.1 6.5 4 Standard Chartered 12 4,084.4 5.2 5 BAML 33 5,850.2 4.2 6 MUFG 12 2,217.2 6.4 5 HSBC 12 3,869.8 4.9 6 BNP Paribas 38 5,674.1 4.1 7 DBS 8 1,151.2 3.3 6 Mizuho Bank 12 3,863.4 4.9 7 Goldman Sachs 26 5,609.6 4.0 8 Fubon Financial 8 888.9 2.6 7 UOB 7 3,411.2 4.3 8 Morgan Stanley 38 5,461.9 3.9 9 BNP Paribas 7 862.5 2.5 8 MUFG 15 3,053.4 3.9 9 Deutsche 39 5,287.8 3.8 10 ICBC 3 849.4 2.5 9 DBS 13 2,298.3 2.9 10 Standard Chartered 48 4,966.3 3.5 11 Mega Financial 6 823.0 2.4 10 Credit Agricole 8 1,743.2 2.2 11 Credit Suisse 36 4,933.5 3.5 12 Credit Agricole 4 810.3 2.4 11 Mega 13 1,648.4 2.1 12 UBS 34 3,747.9 2.7 13 State Bank of India 4 681.7 2.0 12 ICBC 5 1,591.2 2.0 13 Citic 36 2,896.3 2.1 14 First Abu Dhabi Bank PJSC 2 660.4 1.9 13 Westpac 7 1,514.5 1.9 14 Barclays 22 2,865.5 2.0 15* Credit Suisse 3 653.8 1.9 14 Bank of Taiwan 14 1,511.6 1.9 15 Credit Agricole 18 2,746.6 2.0 15* Rabobank 4 653.8 1.9 15 OCBC 7 1,429.2 1.8 16 DBS 34 2,613.3 1.9 17 Taiwan Financial 5 585.0 1.7 16 BNP Paribas 11 1,400.7 1.8 17 Nomura 11 2,486.4 1.8 18 Deutsche 3 543.0 1.6 17 Maybank 6 1,240.0 1.6 18 ANZ 18 2,349.2 1.7 19 Bank of China 5 527.8 1.5 18 CDB 1 1,238.7 1.6 19 ICBC 27 2,295.0 1.6 20 ING 3 506.6 1.5 19 Taipei Fubon 12 1,194.5 1.5 20 MUFG 15 2,163.6 1.5 Total 68 34,518.9 20 SMBC 8 1,118.7 1.4

Total 222 140,225.4 *Market volume Total 172 79,100.8

*Market volume Proportional credit *Market volume

*Includes Asian Development Bank issuance. Source: Thomson Reuters SDC Code: S3k Proportional credit

Proportional credit Source: Thomson Reuters LPC Source: Thomson Reuters SDC Code: AR1

Top bookrunners of Asian fixed- and floating-rate Top bookrunners of Asia Pacific syndicated loans Top bookrunners of Asia Pacific syndicated loans bonds for G3 currencies ex-Japan and Australia All currencies (ex-Japan, inc-Australia) All currencies (ex-Japan and Australia) (inc-Samurais and Yankees) 1/1/18 – 30/4/18 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Amount Amount Amount Name Deals US$(m) % Name Deals US$(m) % Name Issues US$(m) % 1 Bank of China 43 12,530.2 15.4 1 Bank of China 41 12,426.7 17.5 1 HSBC 75 9,459.3 8.3 2 ANZ 21 5,114.8 6.3 2 Citic 4 4,644.3 6.5 2 Bank of China 60 6,021.4 5.3 3 Citic 4 4,644.3 5.7 3 HSBC 13 4,117.7 5.8 3 Citigroup 44 5,526.5 4.8 4 HSBC 14 4,136.8 5.1 4 Standard Chartered 10 3,993.8 5.6 4 Standard Chartered 47 4,906.3 4.3 5 Standard Chartered 11 4,126.0 5.1 5 UOB 5 3,217.1 4.5 5 JP Morgan 21 4,819.3 4.2 6 Mizuho 12 3,877.7 4.8 6 Mizuho 10 3,052.8 4.3 6 Goldman Sachs 23 4,548.8 4.0 7 UOB 7 3,411.2 4.2 7 MUFG 13 2,446.7 3.5 7 BAML 28 4,448.8 3.9 8 MUFG 15 3,067.6 3.8 8 DBS 13 2,304.8 3.3 8 Deutsche 33 3,896.2 3.4 9 DBS 13 2,304.8 2.8 9 Mega Financial 12 1,672.6 2.4 9 Morgan Stanley 30 3,876.0 3.4 10 Credit Agricole 8 1,743.2 2.1 10 Taiwan Financial 14 1,511.6 2.1 10 Credit Suisse 31 3,721.1 3.2 11 Mega Financial 12 1,672.6 2.1 11 OCBC 7 1,474.0 2.1 11 BNP Paribas 30 3,576.3 3.1 12 ICBC 5 1,658.8 2.0 12 BNP Paribas 10 1,381.5 2.0 12 Citic 36 2,896.3 2.5 13 Westpac 8 1,561.2 1.9 13 ANZ 9 1,275.3 1.8 13 UBS 30 2,703.4 2.4 14 Taiwan Financial 14 1,511.6 1.9 14 State Bank of India 7 1,263.0 1.8 14 DBS 34 2,613.3 2.3 15 OCBC 7 1,474.0 1.8 15 Maybank 6 1,240.0 1.8 15 Nomura 11 2,486.4 2.2 16 BNP Paribas 11 1,400.7 1.7 16 CDB 1 1,238.7 1.7 16 Credit Agricole 17 2,480.7 2.2 17 State Bank of India 8 1,282.1 1.6 17 Fubon Financial 12 1,171.5 1.7 17 Barclays 20 2,411.0 2.1 18 Maybank 6 1,240.0 1.5 18 SMFG 8 1,139.5 1.6 18 ICBC 27 2,295.0 2.0 19 CDB 1 1,238.7 1.5 19 Credit Agricole 7 1,093.4 1.5 19 MUFG 14 1,997.0 1.7 20 Fubon Financial 12 1,171.5 1.4 20 Axis 6 964.7 1.4 20 Guotai Junan Sec 41 1,946.5 1.7 Total 201 81,602.9 Total 177 70,999.4

Total 187 114,692.0 *Market volume *Market volume

*Market volume Proportional credit Proportional credit

Proportional credit Source: Thomson Reuters SDC Code: AR2 Source: Thomson Reuters SDC Code: S3 Source: Thomson Reuters SDC Code: S5c

10 International Financing Review Asia May 5 2018 For daily news stories visit www.ifrasia.com

Top bookrunners of global common stock Top bookrunners of global convertible offering Top bookrunners of all Asian currencies Asia Pacific (ex-Japan and Australia) Asia Pacific (ex-Japan and Australia) (excluding Japan and Australia) 1/1/18 – 30/4/18 1/1/18 – 30/4/18 (inc-certificates of deposit) Amount Amount 1/1/18 – 30/4/18 Name Issues US$(m) % Name Issues US$(m) % Amount 1 Citigroup 26 7,107.2 10.7 1 Goldman Sachs 3 2,628.8 18.1 Name Issues US$(m) % 2 Morgan Stanley 17 6,542.4 9.8 2 Citic 3 1,414.0 9.7 1 Citic 176 26,774.1 7.1 3 BAML 8 4,852.5 7.3 3 CICC 3 1,173.2 8.1 2 Bank of China 140 20,348.0 5.4 4 Goldman Sachs 17 4,652.4 7.0 4 CSC Financial 2 941.0 6.5 3 CCB 163 18,146.2 4.8 5 Citic 20 3,652.8 5.5 5 Credit Suisse 4 918.7 6.3 4 ICBC 133 17,241.1 4.6 6 UBS 15 2,862.3 4.3 6 China Merchants Sec 2 785.4 5.4 5 ABC 112 14,823.9 3.9 7 Huatai Sec 10 2,254.2 3.4 7 BNP Paribas 2 475.4 3.3 6 CSC Financial 119 14,737.7 3.9 8 Credit Suisse 16 1,943.7 2.9 8* China Galaxy Sec 1 452.1 3.1 7 Industrial Bank 127 13,250.9 3.5 9 China Sec 11 1,738.2 2.6 8* Bank of China 1 452.1 3.1 8 BoCom 120 13,192.1 3.5 10 Guotai Junan Sec 16 1,682.7 2.5 8* China Sec 1 452.1 3.1 9 CMBC 120 11,586.1 3.1 11 Shenwan Hongyuan Sec 2 1,568.0 2.4 11 Guotai Junan Sec 1 394.4 2.7 10 KB Financial 187 9,865.8 2.6 12 Axis 10 1,452.3 2.2 12 Minsheng Sec 1 381.3 2.6 Total 2,930 379,337.1

13 China Merchants Sec 10 1,141.4 1.7 13 Zhongtai Sec 1 347.0 2.4 *Market volume

14 Kotak Mahindra 9 1,124.2 1.7 14 Morgan Stanley 2 318.9 2.2 Proportional credit 15 State Bank of India 10 1,046.5 1.6 15 Essence Sec 1 316.9 2.2 Source: Thomson Reuters SDC Code: AS1 16 Daishin Sec 7 953.6 1.4 16 Huatai Sec 1 314.2 2.2 17 Haitong Sec 10 864.7 1.3 17 HSBC 3 295.9 2.0 18 Dongxing Sec 7 756.8 1.1 18 Haitong Sec 3 263.0 1.8 19 GF Sec 9 737.4 1.1 19 Taishin Financial 1 206.0 1.4 Top bookrunners of all Asian currencies 20 Deutsche 7 736.7 1.1 20 Nomura 2 185.6 1.3 (excluding Japan, Australia and China) Total 526 66,720.2 Total 47 14,565.8 (inc-certificates of deposit)

*Market volume *Market volume 1/1/18 – 30/4/18

Proportional credit Proportional credit Amount Source: Thomson Reuters SDC Code: C4a Source: Thomson Reuters SDC Code: C9b Name Issues US$(m) % 1 KB Financial 187 9,865.8 9.7 2 Mirae Asset Daewoo 132 6,680.9 6.6 3 Korea Investment 155 6,313.5 6.2 4 NH Inv & Sec 93 5,973.5 5.9 5 Axis 66 5,382.1 5.3 Top bookrunners of global common stock Top bookrunners of global convertible offering 6 HSBC 74 4,671.3 4.6 Asia Pacific (ex-Japan) Asia Pacific (ex-Japan) 7 Kyobo Life 70 3,354.4 3.3 1/1/18 – 30/4/18 1/1/18 – 30/4/18 8 SK Sec 52 2,995.5 2.9 Amount Amount 9 Standard Chartered 38 2,626.9 2.6 Name Issues US$(m) % Name Issues US$(m) % 10 CIMB Group 22 2,519.1 2.5 1 Morgan Stanley 21 7,854.1 10.5 1 Goldman Sachs 4 2,770.7 18.3 Total 1,622 102,044.7

2 Citigroup 29 7,483.1 10.0 2 Citic 3 1,414.0 9.4 *Market volume

3 UBS 24 5,136.1 6.9 3 CICC 3 1,173.2 7.8 Proportional credit 4 BAML 8 4,852.5 6.5 4 Credit Suisse 5 1,060.6 7.0 Source: Thomson Reuters SDC Code: AS1a 5 Goldman Sachs 18 4,671.6 6.2 5 CSC Financial 2 941.0 6.2 6 Citic 20 3,652.8 4.9 6 China Merchants Sec 2 785.4 5.2 7 Huatai Sec 10 2,254.2 3.0 7 BNP Paribas 2 475.4 3.1 8 Credit Suisse 16 1,943.7 2.6 8* China Galaxy Sec 1 452.1 3.0 9 China Sec 11 1,738.2 2.3 8* Bank of China 1 452.1 3.0 Top bookrunners of Asia Pacific Securitisations 10 Guotai Junan Sec 16 1,682.7 2.3 8* China Sec 1 452.1 3.0 (ex-Japan and Australia) (ex-A$ and CDOs) 11 Shenwan Hongyuan Sec 2 1,568.0 2.1 11 Guotai Junan Sec 1 394.4 2.6 1/1/18 – 30/4/18 12 Axis 10 1,452.3 1.9 12 Minsheng Sec 1 381.3 2.5 Amount 13 China Merchants Sec 10 1,141.4 1.5 13 Zhongtai Sec 1 347.0 2.3 Name Issues US$(m) % 14 Kotak Mahindra 9 1,124.2 1.5 14 Morgan Stanley 2 318.9 2.1 1 China Merchants Sec 2 687.2 26.2 15 State Bank of India 10 1,046.5 1.4 15 Essence Sec 1 316.9 2.1 2* China Sec 1 507.8 19.4 16 JP Morgan 10 1,024.4 1.4 16 Huatai Sec 1 314.2 2.1 2* China Dvlp Bank Sec 1 507.8 19.4 17 Daishin Sec 7 953.6 1.3 17 HSBC 3 295.9 2.0 2* Citic 1 507.8 19.4 18 Deutsche 8 934.2 1.3 18 Deutsche 1 271.7 1.8 5* Standard Chartered 1 179.4 6.8 19 Macquarie 8 922.9 1.2 19 Haitong Sec 3 263.0 1.7 5* ICBC 1 179.4 6.8 20 Haitong Sec 10 864.7 1.2 20 Taishin Financial 1 206.0 1.4 7* Hong Leong Financial 1 26.5 1.0 Total 750 74,882.5 Total 52 15,128.1 7* AMMB 1 26.5 1.0

*Market volume *Market volume Total 3 2,622.2

Proportional credit Proportional credit *Market volume

Proportional credit Source: Thomson Reuters SDC Code: C4a2 Source: Thomson Reuters SDC Code: C9b1 Source: Thomson Reuters SDC Code: AZ2

International Financing Review Asia May 5 2018 11 People &Markets

TOP STORY PEOPLE AND MARKETS UBS first to raise China stake Swiss bank applies for 51% after China confirms new rules

UBSûHASûBECOMEûTHEûlRSTûFOREIGNûBANKûTOû RANKûAMONGûTHEûWORLDSûTOPûlNANCIALû MAJORITYûEQUITYûSTAKE APPLYûFORûMAJORITYûOWNERSHIPûOFûANûEXISTINGû INSTITUTIONS 5"3ûCURRENTLYûHOLDSûAûûSTAKEûINûTHEû #HINESEûSECURITIESûJOINTûVENTURE ûDAYSûAFTERû !MONGûTHEûREQUIREMENTSûISûAûRULEûTHATû *6 ûACCORDINGûTOû5"33SûWEBSITEû4HEûOTHERû REGULATORSûEASEDûRESTRICTIONSûONûFOREIGNû FOREIGNûINVESTORSûMUSTûNOTûHAVEûINCURREDû SHAREHOLDERSûAREû"EIJINGû'UOXIANGû!SSETû INVESTMENTS MATERIALûSANCTIONSûFORûTHEûPASTûTHREEûYEARSû -ANAGEMENTû û'UANGDONGû0ROVINCIALû 5"3û3ECURITIES û5"3Sû#HINESEû*6 ûHASû ORûBEûUNDERûINVESTIGATIONûFORûALLEGEDLYû #OMMUNICATIONû'ROUPû û#HINAû SUBMITTEDûANûAPPLICATIONûTOûTHEû#HINAû BREACHINGûREGULATIONS 'UODIANû#APITALû ûANDû#/&#/û  3ECURITIESû2EGULATORYû#OMMISSIONûTOûALLOWû 5"3ûISûAPPEALINGûAû(+Mû53M û 3OûFAR ûTHEû*6SûHAVEûPRODUCEDûLITTLEû 5"3ûTOûINCREASEûITSûSTAKEûTOû ûACCORDINGû lNEûANDûANû MONTHûSUSPENSIONûFROMû INCOMEûFORûTHEIRûFOREIGNûSPONSORSû&IGURESû TOûAûSTATEMENTûFROMûTHEû3WISSûBANKûLASTû SPONSORINGû(ONGû+ONGû)0/SûFOLLOWINGûANû RELEASEDûLASTûWEEKûFORûûSHOWEDûTHATûTHEû 4HURSDAY INVESTIGATIONûINTOûITSûWORKûONûPREVIOUSû COMBINEDûNETûPROlTSûOFûTHEûSIXû3INO FOREIGNû h4HEûFURTHERûOPENINGûUPûOFû#HINASû LISTINGS SECURITIESû*6SûDECLINEDûBYûMOREûTHANûAûTHIRDû lNANCIALûSECTORûREPRESENTSûGREATû 4HEûlNALûRULESûALSOûADDûAûLINEûIFûAû ASûAûRESULTûOFû#HINASûCLAMPDOWNûONûEQUITYû OPPORTUNITIESûFORûOURû#HINAûBUSINESSES û FOREIGN INVESTEDûSECURITIESûCOMPANYûISû RElNANCINGûANDûAûSLOWDOWNûINûTHEûBONDû INCLUDINGûINVESTMENTûBANKING ûWEALTHû MARKET MANAGEMENTûANDûASSETûMANAGEMENT vûSAIDû 4HEûSIXû*6SûMADEûAûCOMBINEDûNETûPROlTû Aû5"3ûSPOKESPERSON “The further opening up OFû2MBMû53M ûINû ûDOWNû 4HEûAPPLICATIONûCOMESûAFTERû#HINAûISSUEDû of China’s financial sector ûYEARûONûYEAR OFlCIALûRULESûONûFOREIGNûINVESTMENTûINû represents great opportunities -EANWHILE û#HINASûENTIREûSECURITIESû SECURITIESûCOMPANIES ûFOLLOWINGûAûPUBLICû for our China businesses, INDUSTRYûMADEûNETûPROlTSûOFû2MBBNû CONSULTATIONûINû-ARCH DURINGûTHEûSAMEûPERIOD ûDOWNûûYEARûONû 4HEûCHANGESûTOOKûEFFECTûONû!PRILû û including investment banking, YEAR lNALLYûALLOWINGûFOREIGNûINVESTORSûBASEDû wealth management and asset #ITIû/RIENTû3ECURITIESûREMAINEDûTHEû BEYONDû(ONGû+ONGûTOûOWNûAûMAJORITYû management.” MOSTûPROlTABLEû*6 ûDESPITEûAûûNETû STAKE ûFORûNOWûOFûAûMAXIMUMû ûINûTHEIRû PROlTûDECLINEûTOû2MBMû:HONGû #HINESEûSECURITIESû*6S $Eû3ECURITIES û$EUTSCHEû"ANKSû*6 ûCAMEû 4HEû#32#ûSAIDûQUALIlEDûFOREIGNûINVESTORSû INVOLVEDûINûNATIONALûSECURITYûMATTERS ûITû SECOND ûWITHûAûNETûPROlTûOFû2MBM û WEREûNOWûALLOWEDûTOûAPPLYûFORûAûCONTROLLINGû SHALLûBEûHANDLEDûINûACCORDANCEûWITHû#HINASû DOWNûûYEARûONûYEAR STAKEûINûAûNEWûORûEXISTINGûSECURITIESû*6û4HEû RELEVANTûREGULATIONS 'OLDMANû3ACHSû'AOû(UAû3ECURITIES ûONû REGULATORûSAIDûITûWOULDûGRADUALLYûEXPANDû THEûOTHERûHAND ûPOSTEDûNETûPROlTûGROWTHûOFû THEûBUSINESSûSCOPEûOFûSECURITIESû*6S ûANDû PROFITS DECLINE ûTOû2MBMû#REDITû3UISSEû&OUNDERû NEWLYûESTABLISHEDû*6SûSHOULDûHAVEûANûINITIALû 4HEûlNALûRULESûAREûAûlLLIPûTOûFOREIGNûBANKS û 3ECURITIESûALSOûSAWûSTRONGûPROlTûGROWTHûLASTû BUSINESSûSCOPEûTHATûMATCHESûTHEûCAPABILITIESû WHICHûHAVEûLONGûBRISTLEDûOVERûTHEûPREVIOUSû YEARû)TSûNETûPROlTûROSEûûTOû2MBM OFûITSûTHEIRûLARGESTûSHAREHOLDERS REGULATIONS ûCAPPINGûTHEIRûOWNERSHIPûATû 5"3û3ECURITIESûPOSTEDûNETûPROlTûOFû h4HEû#HINESEûGOVERNMENTSûDECISIONû ûANDûLEAVINGûTHEIRû*6ûPARTNERSûOFTENûINû 2MBM ûDOWNûûYEARûONûYEAR TOûALLOWûFOREIGNûCOMPANIESûTOûTAKEûUPûTOû CONTROLûOFûKEYûLICENCES -ORGANû3TANLEYû(UAXINû3ECURITIESûWASû ûINûSECURITIESûJOINTûVENTURESûISûANOTHERû /NLYû(3"# ûWHICHûINVESTEDûUNDERûTHEû THEûONLYûONEûAMONGûTHEûSIXû*6SûTOûRECORDû IMPORTANTûSTEPûINûTHEûOPENINGûUPûOFû#HINASû TERMSûOFûAûSPECIlCûDEALûBETWEENû#HINAû AûLOSSûLASTûYEARû)TûPOSTEDûAûûNETûLOSSûOFû MARKETS vûSAIDûTHEû5"3ûSPOKESPERSON ANDû(ONGû+ONG ûHASûAûCONTROLLINGûû 2MBMûFOLLOWINGûAûGAINûOFû2MBMû 4HEûlNALûRULESûONûFOREIGNûINVESTMENTSû STAKEûINûAû#HINESEûSECURITIESû*6 ûBUTûITûISû INû STILLûLEAVEûITûTOûTHEû#32#ûTOûDETERMINEû BUILDINGûTHEûBUSINESSûFROMûSCRATCHû5"3û *0û-ORGANûLASTûYEARûSOLDûITSûûSTAKEûTOû WHICHûFOREIGNûINVESTORSûAREûELIGIBLEûFORûAû ANDû'OLDMANû3ACHSûENJOYûMANAGEMENTû ITSûLOCALûPARTNERû&IRSTû#APITALû3ECURITIES MAJORITYûSTAKE ûALTHOUGHûTHEYûHAVEûDROPPEDû CONTROLûOFûTHEIRû*6S ûWITHOUTûHOLDINGûAû KEN WANG, STEVE GARTON SOMEûRESTRICTIONSûFROMûAûDRAFTûOFûTHEû REGULATIONSûINû-ARCH #OMPAREDûTOûTHEûDRAFT ûTHEûlNALûVERSIONû NET PROFIT/LOSS OF JV BROKERAGES PART OWNED BY FOREIGN BANKS IN 2017 REMOVEDûRESTRICTIONSûLIMITINGûSINGLEûFOREIGNû Goldman Sachs Gao Hua Securities 66.08 INVESTORSûTOûAûûSTAKEûINûLISTEDûSECURITIESû UBS Securities 40.89 COMPANIES Credit Suisse Founder Securities 26.14 4HEûlNALûVERSIONûALSOûREMOVEDûAûCLAUSEû Zhong De Securities 118.26 IMPOSINGûAûMINIMUMûSTAKEûOFûûFORû Morgan Stanley Huaxin Securities -69.49 FOREIGNûINVESTORSûINûSECURITIESû*6S Citi Orient Securities 188.24 "UTûTHEûNEWûRULESûALSOûIMPOSEûAûHIGHû Total 370.12 STANDARDûFORûFOREIGNûINVESTORS ûWHOûMUSTû Currency: Renminbi (million) HAVEûAûGOODûREPUTATIONûANDûEARNINGSûTHATû Sources: Securities Association of China

12 International Financing Review Asia May 5 2018 Please send job moves to [email protected]

India eases debt rules to buttress rupee

)NDIASûCENTRALûBANKûHASûLOOSENEDûRULESûFORû 53BN ûOFûDOMESTICûBONDSûSINCEû 4HEû2")ûHASûINTRODUCEDûSOMEûSAFEGUARDSû FOREIGNûINVESTMENTSûINûDOMESTICûBONDSû -ARCH ûACCORDINGûTOûDATAûFROMûTHEû.ATIONALû AGAINSTûHOTûMONEYû)TûSAIDûTHATûINVESTMENTû ANDûLIBERALISEDûITSûOVERSEASûBORROWING ûINû 3ECURITIESû$EPOSITORY INûGOVERNMENTûSECURITIESûANDûSTATEû AûMOVEûSEENûASûSHORINGûUPûSUPPORTûFORûTHEû 4HEûLATESTûMOVEûBYûTHEû2")ûWILLûHELPû GOVERNMENTûBONDSûWITHûRESIDUALûMATURITYû FALLINGûRUPEE &0)SûMANAGEûDURATIONûRISKûBYûGIVINGûTHEMû BELOWûONEûYEARûSHALLûNOTûEXCEEDûûOFûTHEû )NûAûSERIESûOFûMEASURESûSINCEû!PRILû û THEûCHOICEûTOûTAKEûEXPOSUREûTOûSHORT DATEDû TOTALûINVESTMENTûBYû&0)SûINûTHOSEûASSETSûnû THEû2ESERVEû"ANKûOFû)NDIAûALLOWEDûFOREIGNû BONDS PORTFOLIOûINVESTORSû&0)S ûTOûBUYûSHORT DATEDû h)TûGIVESûANûOPPORTUNITYûFORûINVESTORSû 4REASURYûBILLSûANDûPURCHASEûGOVERNMENTû TOûREDUCEûDURATIONûRISKûDURINGûPERIODSû “The central bank had BONDSûWITHûAûREMAININGûTENORûOFûLESSûTHANû WHENû)NDIANûBONDûYIELDSûAREûEXPECTEDû THREEûYEARSû)TûALSOûEASEDûTHEûEXTERNALû TOûWEAKEN vûSAIDû-ANUû'EORGE ûSENIORû permitted domestic companies COMMERCIALûBORROWINGû%#" ûFRAMEWORKû INVESTMENTûDIRECTORûFORûlXEDûINCOMEûATû to bring loans from their TOûALLOWûMOREû)NDIANûCOMPANIES ûINCLUDINGû 3CHRODERû)NVESTMENTû-ANAGEMENT offshore promoters and HOUSINGûlNANCEûCOMPANIES ûTOûRAISEûFUNDSû &OREIGNûINVESTORSûCANûMODIFYûTHEIRû sponsors. Going forward OVERSEAS EXPOSUREûTOûRUPEEûBONDSûWITHOUTûANYû the capacity to borrow from 4HEûCHANGESûCOMEûAFTERûAûSPIKEûINû CONCERNûOFûLOSINGûTHEIRûQUOTAûLIMIT offshore is further relaxed.” GOVERNMENTûBONDûYIELDSûANDûAûSLIDEûINûTHEû h)TûALSOûALLOWSûFORûMOREûTACTICALû RUPEEûTHATûDRAGGEDûTHEûCURRENCYûTOûAû POSITIONING ûPARTICULARLYûINûSHORT DURATIONû MONTHûLOWûAGAINSTûTHEû53ûDOLLAR BONDS vûSAIDû$ESMONDû3OON ûSENIORû h)Fû2")ûISûWORRIEDûABOUTûOUTmOWSûANDû PORTFOLIOûMANAGERûANDûHEADûOFûINVESTMENTû THEûSAMEûCEILINGûTHATûALSOûAPPLIESûTOû&0)û CURRENCYûWEAKNESSûTHATûWILLûBEûADDRESSEDû MANAGEMENT û!SIAûEX *APAN ûATû7ESTERNû INVESTMENTûINûCORPORATEûBONDSûWITHûAû INûTHEûNEARûTERM vûSAIDû4ANVEERû3ETHI ûFUNDû !SSETû-ANAGEMENT MINIMUMûREMAININGûMATURITYûOFûONEûYEAR MANAGERûATû+OTAKû-AHINDRAû'ROUP h4HEûCHANGESûAREûLIKELYûTOûBEûSUPPORTIVEû HOT MONEY SIMPLER BORROWING RULES OFûTHEû).2ûINûTHEûNEARûTERM ûASûTHEYûSHOULDû (OWEVER ûSOMEûMARKETûPARTICIPANTSûHAVEû 4HEû2")ûHASûALSOûLOOSENEDûITSû%#"ûRULES û ENCOURAGEûMOREûCARRY RELATEDûINmOWS vûSAIDû CRITICISEDûTHEûDECISIONûASûPOTENTIALLYû RAISINGûTHEûMAXIMUMûINTERESTûRATEûANDû 3TANDARDû#HARTEREDûINûAûNOTE EXPOSINGû)NDIAûTOûVOLATILEûINmOWSûTHATûAREû WIDENINGûTHEûPOOLûOFûELIGIBLEûBORROWERS )NDIAûISûFACINGûSHARPLYûHIGHERûSOVEREIGNû LIKELYûTOûBEûDRIVENûBYûINVESTORSûVIEWSûONû 4HEûCENTRALûBANKûSETûAûSINGLEûALL IN COSTû DEBTûYIELDS ûWITHûTHEû YEARûGOVERNMENTû THEûCURRENCY CEILINGûOFûBPûOVERûSIX MONTHû,IBORû BENCHMARKûRISINGûBPûTOûûSINCEû!PRILû h7EûWILLûHAVEûBONDûTOURISTSûANDû)NDIAû FORûDOLLARûBONDSûANDûLOANS ûANDûTHEûSAMEû û4HEûRECENTû2SBNûAUCTIONûOFûûû WILLûBEûATûAûRISKûOFûATTRACTINGûHOTûMONEY vû SPREADûOVERûGOVERNMENTûSECURITIESûFORû BONDSûATTRACTEDûBIDSûFORûONLYûABOUTû2SMû SAIDûAûTRADERûFROMûAûFOREIGNûBANK OFFSHOREûRUPEEû-ASALAûBONDSû4HATûREPLACESû h%NCOURAGINGûSHORT TERMûmOWSûCOULDû AûMAXIMUMûSPREADûOFûBPûATûTHREEûTOûlVEû LEADûTOûPOTENTIALûVULNERABILITY ûESPECIALLYû YEARSûANDûBPûATûlVEûYEARSûORûMORE WHENûEITHERûDOMESTICûORûGLOBALûMACROû (OUSINGûlNANCEûCOMPANIESûANDûPORTû “Encouraging short-term ENVIRONMENTûDETERIORATES vûSAIDû2AJEEVû TRUSTSûWILLûALSOûBEûELIGIBLEûTOûBORROWû flows could lead to potential 2ADHAKRISHNAN ûHEADûOFûlXEDûINCOMEûATû3")û OVERSEAS ûSUBJECTûTOûHEDGINGûREQUIREMENTSû vulnerability, especially when &UNDSû-ANAGEMENT #OMPANIESûINûTHEûMAINTENANCEûREPAIRûANDû either domestic or global macro !FTERûTHEûûTAPERûTANTRUM û)NDIAû OVERHAULûINDUSTRYûANDûFREIGHTûFORWARDINGû environment deteriorates.” BARREDûFOREIGNûINVESTORSûFROMûBUYINGû WILLûBEûALLOWEDûTOûRAISEûOVERSEASûFUNDING û GOVERNMENTûDEBTûWITHûLESSûTHANûONE YEARû BUTûONLYûINûRUPEES MATURITYûANDû&0)ûINVESTMENTSûINû4 BILLSû 4HEûRELAXATIONûOFû%#"ûRULESûWILLûOFFERûANû WEREûALLOWEDûTOûTAPERûOFFû4HISûWASûDONEû ALTERNATEûAVENUEûFORûCORPORATESûTOûBORROW û FROMûTHEûMARKET ûWITHûTHEûREMAINDERû TOûENCOURAGEûLONGER TERMûFUNDûINmOWSûANDû SAIDû)CRAûINûAûNOTEûONû-AYû BOUGHTûBYûPRIMARYûDEALERS ûACCORDINGûTOûAû REDUCEûTHEûCOUNTRYSûDEPENDENCEûONûHOTû 4HEû2")ûALSOûRAISEDûTHEûMAXIMUMû 2EUTERSûREPORT MONEY LIABILITY TO EQUITYûRATIOûFORûBORROWINGSûFROMû &OREIGNûINVESTORSûCANûNOWûHOLDûUPûTOûû AûDIRECTûFOREIGNûEQUITYûHOLDERûUNDERûTHEû RATES BUYERS OFûALLûOUTSTANDINGûGOVERNMENTûBONDS ûUPû AUTOMATICûROUTEûTOû ûUPûFROMûûEARLIER 4HEûGOVERNMENTûTRIEDûTOûBOOSTûMARKETû FROMûûEARLIERû&OREIGNûBUYERSûWILLûALSOû h4HEûCENTRALûBANKûHADûPERMITTEDûDOMESTICû SENTIMENTûBYûCUTTINGûITSûBORROWINGû BEûABLEûTOûPURCHASEûCORPORATEûBONDSûWITHûAû COMPANIESûTOûBRINGûLOANSûFROMûTHEIRûOFFSHOREû PLANSûFORûTHEûSIXûMONTHSûTOû3EPTEMBERû MINIMUMûREMAININGûMATURITYûOFûONEûYEAR û PROMOTERSûANDûSPONSORSû'OINGûFORWARDûTHEû ANDûISSUINGûSHORTERûMATURITYûBONDS û DOWNûFROMûTHREEûPREVIOUSLY CAPACITYûTOûBORROWûFROMûOFFSHOREûISûFURTHERû BUTûHAWKISHûCOMMENTSûFROMûMONETARYû 4HEûCENTRALûBANKûALSOûDROPPEDûTHEûQUOTAû RELAXED vûSAIDû*AYENû3HAH ûHEADûOFûDEBTû COMMITTEEûPOLICYûMINUTESûHAVEûTURNEDû AUCTIONûMECHANISM ûWHEREBYûFOREIGNû CAPITALûMARKETSûATû)$&#û"ANK INVESTORSûAWAY INVESTORSûNEEDEDûTOûBIDûFORûAûSHAREûOFûTHEû 4HEû2")ûCONTINUESûTOûBANûOVERSEASû 4HEûRUPEEûHITûûAGAINSTûTHEûDOLLARûONû REMAININGûCAPACITYûONCEûTOTALûINVESTMENTû BORROWINGSûFORûINVESTMENTSûINûREALûESTATEûORû !PRILûûAMIDûHEAVYûPORTFOLIOûOUTmOWS ûAû PASSEDûûOFûTHEûLIMITû4HEû#LEARINGû LANDûPURCHASES ûASûWELLûASûCAPITALûMARKETSû SPIKEûINû53û4REASURYûYIELDSûANDûRISINGûCRUDEû #ORPORATIONûOFû)NDIAûWILLûINSTEADûMONITORû ORûEQUITYûINVESTMENTS PRICESû&OREIGNûINVESTORSûHAVEûSOLDû2SBNû THEûUTILISATIONûOFûLIMITS KRISHNA MERCHANT

International Financing Review Asia May 5 2018 13 People &Markets

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IMMINENTûUSEûOFûAUTOMATEDûlNANCIALûADVICEû Islamic finance eyes profits, fintech TOOLSûSUCHûAûROBO ADVISERS

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14 International Financing Review Asia May 5 2018 Please send job moves to [email protected]

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International Financing Review Asia May 5 2018 15 People &Markets

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Zurich eyes Australian dollar debut

ZURICH INSURANCEûISûPREPARINGûFORûAû !SûWELLûASûOFFSETTINGû:URICHSûPOSITIONSûINû!USTRALIANûDOLLARS ûTHEû POTENTIALûDEBUTûINûTHEû!USTRALIANû POTENTIALûTRANSACTIONûWOULDûALSOûALLOWûITûTOûDIVERSIFYûITSûINVESTORû BONDûMARKETûAFTERûANNOUNCINGû BASE ûREACHINGûSOMEûASSETûMANAGERSûWHOûDOûNOTûBUYûITSûBONDSûINû AROUNDû!BNû53BN ûOFû OTHERûCURRENCIES ACQUISITIONSûINûTHEûCOUNTRYûINûTHEû h4HEREûISûAûBITûOFûOVERLAP ûBUTûTHEREûISûDElNITELYûANûOPPORTUNITYû PASTûTWOûYEARS TOûDIVERSIFY vûSAIDû-EISELûh%VENûIFûTHEûINVESTORSûBELONGûTOûTHEû 4HEû3WISSûINSURER ûRATEDû!! û SAMEûASSETûMANAGEMENTûORGANISATION ûTHOSEûINû!USTRALIAûSTILLû -OODYS30 ûHELDûMEETINGSûWITHû MANAGEûAûDISTINCTûPOOLûOFûASSETSv INVESTORSûINû!USTRALIAûANDû(ONGû )FûANû!USTRALIANûDOLLARûTRANSACTIONûHAPPENS ûITûISûNOTûEXPECTEDûTOû +ONGûLASTûWEEKûANDûCOULDûCOMEûTOû BEûAûONE OFF MATHIAS MEISEL, MARKETûWITHûANû!USTRALIANûDOLLARû h4HISûISûAûDIVERSE ûSLIGHTLYûDIFFERENTûGROUPûOFûINVESTORSûWHOûAREû head of capital markets at TRANSACTION ûSUBJECTûTOûMARKETû VERYûKNOWLEDGEABLEûANDûSKILLED vûSAIDû-EISELûh4HATûISûATTRACTIVEûNOTû Zurich Insurance CONDITIONS ûAFTERûITûUPDATESûITSû JUSTûFORûDIVERSIlCATIONûBUTûBECAUSEûWEûHAVEûAûGROUPûOFûINVESTORSû DOCUMENTATIONûINûMID -AYûANZ û THATûWILLûUNDERSTANDûOURûCREDITûANDûWITHûWHOMûWEûCANûHAVEûANû Citigroup ûNABûANDûUBSûARRANGEDûTHEûMEETINGS ONGOINGûDIALOGUE ûINûGOODûTIMESûORûWHENûTHEYûAREûLESSûGOODv :URICHûLASTûYEARûENTEREDûINTOûANûAGREEMENTûTOûBUYû!.:Sû !DDINGûAûNEWûCREDITûTOûTHEû!USTRALIANûDOLLARûMARKETûCOULDûALSOû /NE0ATHûLIFEûANDûCONSUMERûCREDITûINSURANCEûBUSINESSûFORû BEûATTRACTIVEûFORûLOCALûINVESTORSûLOOKINGûTOûDIVERSIFYûTHEIRûOWNû !BN ûTHEûLATESTûINûAûLINEûOFûRECENTûTRANSACTIONS ûINCLUDINGûTHEû HOLDINGSû53ûCORPORATEû+ANGAROOûISSUANCEûISûEXPECTEDûTOûFALLû ACQUISITIONSûOFûTRAVELûINSURANCEûPROVIDERû#OVER -OREû'ROUPûANDû FOLLOWINGû53ûTAXûREFORMSûTHATûENCOURAGEûCOMPANIESûTOûREPATRIATEû -ACQUARIEû'ROUPSûLIFEûINSURANCEûBUSINESS OFFSHOREûCAûSHûPILES ûANDûTRADESûLIKEû$EUTSCHEû"AHNSûDEBUTû 4HEû/NE0ATHû,IFEûACQUISITION ûEXPECTEDûTOûCLOSEûBYûTHEûENDû +ANGAROOûLASTûYEARûHAVEûSHOWNûTHEûSTRENGTHûOFûDEMANDûFORûWELL OFûTHISûYEAR ûWILLûGIVEû:URICHûûOFûTHEû!USTRALIANûRETAILûLIFEû ESTABLISHEDû%UROPEANûCREDITS INSURANCEûBUSINESS ûMAKINGûITûTHEûBIGGESTûPLAYERûINûTHEûMARKET h)TSûAûVERYûINTERESTINGûDIVERSIlCATIONûOPPORTUNITYûFORûTHEûLOCALû h!SûPARTûOFûTHEû/NE0ATHûTRANSACTION ûWEûHAVEûSAIDûWEûWILLû INVESTORûBASE vûSAIDû-EISELûh7EûAREûNOTûASûCONNECTEDûTOûDOMESTICû FUNDûAROUNDûONE THIRDûOFûTHEûTRANSACTIONûWITHûSENIORûDEBT vûSAIDû REALûESTATEûORûOTHERûMATTERSûINûTHEûRESTûOFûTHEûREGIONûASûOTHERû -ATHIASû-EISEL ûHEADûOFûCAPITALûMARKETSûATû:URICHû)NSURANCEûh)TSû ISSUERSv VERYûCLEARûTHATûWEûWOULDûBEûINTERESTEDûINûDOINGûATûLEASTûPARTûOFû :URICHûREPORTEDûREVENUESûOFû53BNûINûûANDûBUSINESSû THATûINûTHEû!USSIEûMARKETv OPERATINGûPROlTSûOFû53BN ûAROUNDûûOFûWHICHûCAMEûFROMû 4HEû!USTRALIANûDOLLARûCOULDûJOINûTHEû53ûDOLLAR ûEURO û3WISSûFRANCû !SIAû0ACIlCû)TûHADûAûûREGULATORYûSOLVENCYûRATIOûUNDERû3WISSû ANDû"RITISHûPOUNDûASûONEûOFû:URICHSûFUNDINGûCURRENCIES RULESûFORû h4HEûINTENTIONûWOULDûBEûTOûDOûATûLEASTûAûBENCHMARKûSIZEûASû 4HEûINSURANCEûGROUPûCURRENTLYûHASûAûBALANCEûOFûAROUNDûû LIQUIDITYûISûIMPORTANTûFORûBOTHûUSûANDûULTIMATELYûINVESTORS vûSAIDû EQUITYûTOûûDEBT ûANDû-EISELûSAIDûTHEûLONG TERMûAIMûWASûTOû -EISELûh7EûAREûmEXIBLEûINûTERMSûOFûTHEûSIZEûANDûTRANCHINGûOFûTHISû BRINGûTHATûTOû 7EûAREûNOTûINûTHEûARBITRAGEûGAMEv DANIEL STANTON, KRISHNA MERCHANT, S ANURADHA

16 International Financing Review Asia May 5 2018 Please send job moves to [email protected]

HASûPRESIDEDûOVERûAûPREVIOUSûINQUIRYûINTOû FUNCTIONS ûANDûCHANGESûINûCULTUREûTOû CBA ordered to CORPORATEûGOVERNANCEûINûTHEûBANKûSECTOR ûASû GUARANTEEûBESTûPRACTICESûINûRISKûIDENTIlCATION ITSûNEWûCHAIRMANûh!-0ûSTRENUOUSLYûDENIESû )TûWARNEDûOTHERûLENDERSûTHATûTHEYûWOULDûBEû boost capital THEûALLEGATIONvûBYûLAWYERSûOFûTHEûCOMMISSIONû HELDûTOûSIMILARûSTANDARDS THATûTHEYûCOULDûlNDû!-0ûHASûCOMMITTEDûAû h!02!ûSUPERVISORSûWILLûALSOûBEûUSINGûTHEû until failings fixed CRIMINALûOFFENCE ûTHEûCOMPANYûSAIDûINûAû REPORTûTOûAIDûTHEIRûSUPERVISIONûACTIVITIES û PAGEûDOCUMENT ANDûWILLûEXPECTûINSTITUTIONSûTOûBEûABLEûTOû !USTRALIASûBANKINGûREGULATORûSLUGGEDû )NûAûFURTHERûBLOW û#"!ûONû7EDNESDAYûWASû DEMONSTRATEûHOWûTHEYûHAVEûCONSIDEREDûTHEû COMMONWEALTH BANK OF AUSTRALIAûWITHûANûEXTRAû FORCEDûTOûREVEALûITûLOSTûTHEûRECORDSûOFûALMOSTû ISSUES vûITûSAID !BNû53M ûCAPITALûREQUIREMENTûLASTû ûMILLIONûACCOUNTSûANDûDECIDEDûNOTûTOû #"!ûSAIDûITûWOULDûIMPLEMENTûALLûTHEû 4UESDAYûASûITûRELEASEDûAûSCATHINGûREPORTûINTOû INFORMûITSûCUSTOMERSû4HEûBANKûSAIDûITûCOULDû RECOMMENDATIONSûANDûHADûALREADYûBEGUNû HOWûTHEûLENDERûALLOWEDûMONEYûLAUNDERINGûTOû NOTûCONlRMûTHATûITûHADûSECURELYûDISPOSEDûOFû MAKINGûCHANGESûATûAûBOARDûLEVELûTOûREBUILDû mOURISH TWOûMAGNETICûTAPESûCONTAININGûûYEARSûOFû CUSTOMERûTRUSTû)TûSAIDûTHEûADDITIONALûCAPITALû 4HEûCOUNTRYSûLARGESTûBANKûHADûAû CUSTOMERûDATAûINû CHARGEûEQUATEDûTOûBPûOFûCOMMONûEQUITYû hWIDESPREADûSENSEûOFûCOMPLACENCYvûANDûWASû 4HEûYEAR LONGû2OYALû#OMMISSIONûSTARTEDû TIERûûCAPITAL REACTIVEûINûDEALINGûWITHûRISK ûTHEû!USTRALIANû HEARINGSûINû&EBRUARYûANDûHASûALREADYûEXPOSEDû -ATTû#OMYN ûWHOûREPLACEDû.AREVûASû#%/ û 0RUDENTIALû2EGULATORYû!UTHORITYûSAIDûINûTHEû WIDESPREADûWRONGDOING ûINCLUDINGûFRAUDûBYû SAIDûHEûHADûASKEDûTHEûBOARDûNOTûTOûGIVEûHIMû REPORTûINTOûTHEûCULTUREûTHATûLEDûTOûTHEûMONEYû lNANCIALûPLANNERS ûDECEPTIONûOFûREGULATORSû AûSHORT TERMûBONUSûTHISûYEARûASûHEûSETSûABOUTû LAUNDERINGûALLEGATIONS ANDûCHARGINGûCUSTOMERSûFEESûWITHOUTû REBUILDINGûTHEûREPUTATIONûOFûTHEû YEAR OLDû 4HEûlNDINGSûPILEûPRESSUREûONûTHEûBOARDû PROVIDINGûAûSERVICE BANK OFû#"!ûFOLLOWINGûTHEûRESIGNATIONûOFûCHIEFû !02!ûCOMMISSIONEDûTHEûINDEPENDENTû h&ORûMEûTHISûISûONLYûONEûSMALLûSTEPûINû EXECUTIVEû)ANû.AREVûINû*ANUARY ûANDûADDû REPORTûINTOû#"!ûLASTûYEAR ûAFTERûTHEûBANKûWASû DEMONSTRATINGûTHATûACCOUNTABILITYûANDûTHEû TOûTHEûIGNOMINYûHEAPEDûONû!USTRALIASû SUEDûBYû!USTRALIASûlNANCIALûINTELLIGENCEû STEPSûTHATûAREûGOINGûTOûBEûREQUIREDûAREûGOINGû TOPûlNANCIALûlRMSûINûRECENTûWEEKSûBYûANû AGENCYûFORûALLEGEDûBREACHESûOFûMONEYû TOûBEûDIFFERENTûTHISûTIMEûROUND vûHEûSAIDûINûANû ONGOINGûJUDICIALûINQUIRYûINTOûBANKINGûSECTORû LAUNDERINGûLAWSûTHATûALLOWEDûCRIMINALSûANDû INTERVIEWûRELEASEDûBYûTHEûBANKûONû4UESDAY WRONGDOING TERRORûlNANCIERSûTOûLAUNDERûMILLIONSûOFûDOLLARSû /MKARû*OSHI ûPORTFOLIOûMANAGERûATû2EGALû h%XECUTIVESûAREûGONE ûBOARDûMEMBERSûAREû THROUGHûITSûACCOUNTS &UNDSû-ANAGEMENT ûSAIDûTHEûADDITIONALû GONEû-OREûWILLûGO vû!USTRALIANû4REASURERû )TûSAIDûTHEûHIGHLYûPROlTABLEûBANKSû CAPITALûREQUIREMENTûWASûINSIGNIlCANTûFORûAû 3COTTû-ORRISONûTOLDûREPORTERSûINû#ANBERRAû hCONTINUEDûlNANCIALûSUCCESSûDULLEDûTHEûSENSESû BANKûWITHûANû!BNûBALANCEûSHEET WHENûASKEDûABOUTûTHEû!02!ûREPORTSû OFûTHEûINSTITUTIONvûANDûEXPOSEDûITûTOûNON h2EPUTATIONALLY û)ûTHINKûTHERESûALREADYû IMPLICATIONSûFORûTHEûBANK lNANCIALûRISKS ûPARTICULARLYûINûTHEûAREASûOFû BEENûENOUGHûISSUESûFORûTHEMûTHATûITûDOESNTû 4HEûREPORTûPUTûALLûOFû!USTRALIASûBANKSûONû COMPLIANCEûANDûCONDUCT MAKEûITûWORSE vûHEûSAID NOTICEûTHATûTHEIRûGOVERNANCEûSTANDARDSûWOULDû h4HESEûRISKSûWEREûNEITHERûCLEARLYû !USTRALIASû"IGû&OURûBANKSûnû#"! û FACEûSIMILARûSCRUTINYûINûLIGHTûOFûTHEûFAILINGSû UNDERSTOODûNORûOWNED ûTHEûFRAMEWORKSû 7ESTPAC û.ATIONALû!USTRALIAû"ANKûANDû ATû#"! ûAMIDûMOVESûTOûSTIFFENûPENALTIESûFORû FORûMANAGINGûTHEMûWEREûCUMBERSOMEûANDû !USTRALIAûANDû.EWû:EALANDû"ANKINGû'ROUPû CORPORATEûWRONGDOINGûANDûBEEFûUPûOVERSIGHT INCOMPLETE ûANDûSENIORûLEADERSHIPûWASûSLOWû nûAREûFACINGûGREATERûREGULATIONûANDûPOTENTIALû 4HEûNEWSûCAMEûAûDAYûAFTERûTHEû TOûRECOGNISE ûANDûADDRESS ûEMERGINGûTHREATSû PENALTIESûINûTHEûWAKEûOFûTHEûGOVERNANCEû COUNTRYSûLARGEST LISTEDûWEALTHûMANAGER û TOû#"!SûREPUTATION vûITûSAID SCANDALS AMP ûANNOUNCEDûTHEûRESIGNATIONSûOFûITSû h)ûTHINKûOURûSECTORûHASûHADûAûGOLDENûPERIODû CHAIRWOMANûANDûLEGALûCOUNSELûANDûSLASHEDû RECOMMENDATIONS FORûûPLUSûYEARSûANDûWEûDONTûTHINKûTHATSû DIRECTORûFEESûINûRESPONSEûTOûREVELATIONSûOFû 4HEûREPORûRECOMMENDATIONSûINCLUDEDû GOINGûTOûCONTINUE ûITûISûGOINGûTOûBEûHARDER vû MISCONDUCTûATûTHEûINDEPENDENTûJUDICIALû MOREûCLOSELYûLINKINGûEXECUTIVEûPAYûTOû !.:û#HIEFû%XECUTIVEû3HAYNEû%LLIOTTûSAIDûONû INQUIRY hEXACTINGûACCOUNTABILITYûSTANDARDSv û LASTû4UESDAY /Nû&RIDAY û!-0ûHIREDû$AVIDû-URRAY ûWHOû ENHANCINGûRISKûMANAGEMENTûANDûCOMPLIANCEû PAULINA DURAN, TOM WESTBROOK

International Financing Review Asia May 5 2018 17 People &Markets

WHO’S MOVING WHERE... September for the leveraged buyout of Hong Kong fixed-line telephone company Hutchison „ Ivan Lee has joined BANK OF COMMUNICATIONS „ Eddie Law, ANZ’s former global head of Global Communications. Hong Kong branch as deputy chief product institutional property, is moving to Australian Before joining Credit Suisse in July 2013, Wong manager in the structured and capital finance real estate investor MAXCAP GROUP as chief had worked in loan syndications at ANZ for department. investment director for New South Wales, nearly five years. He came on board late last month and reports Queensland and the Australian Capital Territory. to Carmen Chen, general manager of the He will start his new role on May 14 after leaving „ RBC CAPITAL MARKETS has hired two bankers in department. ANZ in April. Sydney as part of a push into leveraged finance. Before that, Lee had worked at Standard Chaired by Australia’s former Prime Minister The Canadian bank has recruited Hamish Chartered since August 2011 and was Paul Keating, MaxCap specialises in the Mitchell to lead Australian leveraged finance most recently a director in the bank’s loan placement of private and institutional funds and added Harry Staple as a director in the syndications team. into residential and commercial real estate syndication, corporate banking and leveraged investments, with a focus on development finance group. „ Barrett Lu, an executive director and co-head assets. The group has invested over A$3bn International lenders, including Barclays, Intesa of China fixed income capital markets at MORGAN (US$2.3bn) in the Australian property sector. Sanpaolo and Societe Generale, are beefing STANLEY, has left the US bank. up their operations in Australia in a bid to win His departure marks an end to a decade-long „ Eddie Wong, a director in the Asia Pacific loan market share as tighter regulation and capital stint after he joined Morgan Stanley in Hong syndications team at CREDIT SUISSE, has left the requirements take their toll on the domestic Kong in February 2008. firm after a stint of nearly five years. lenders. Before that, Lu worked in the loan syndications Wong’s departure comes within weeks of the Mitchell was previously at Goldman Sachs teams at China CITIC Bank International and appointment of Sergio Morita as Credit Suisse’s in New York and Sydney, while Staple was a Standard Chartered. head of syndication and distribution for the Asia director in Westpac Institutional Bank’s loans Pacific financing group in March. and syndications team in Melbourne. Staple „ Neha Agarwal has been promoted to co-head Morita replaced Ashish Sharma, the Swiss bank’s reports to Amy Promaine, managing director for of capital markets at Indian financial services APAC loans chief, who quit earlier that month. corporate banking, who is on secondment from provider JM FINANCIAL, a person with knowledge Wong was based in Hong Kong and reported to New York. of the development has said. Morita. He handled loan syndications for North RBC has also promoted Sean Miller to head up Agarwal was earlier a director in the capital Asia. the investment bank in Australia following the markets group. During his five-year stint, he was involved in relocation of Dominic Hudson to London to lead Agarwal will report to Manish Prasad, CEO of high-profile and event-driven financings from sector coverage for Europe. Miller was previously institutional equities. Chitresh Mody is the other North Asia such as the multi-billion dollar loan running the structuring capital advisory team, co-head of capital markets. for China National Chemical Corp’s acquisition while Tim Foy, director of infrastructure, has Agarwal joined JM in 2006. of Swiss seeds and pesticides maker Syngenta expanded his responsibilities to include M&A. JM Financial was not immediately available for and its US$5.5bn refinancing earlier this year, A spokesman for the bank confirmed the comment. as well as the US$900m-equivalent loan last appointments.

IN BRIEF HNA and SkyBridge said in a statement they found that it was not in their interests to pursue People's Bank of China to the central bank, and are subject to PBoC’s the transaction as significant time had passed Resumption of RQDII scheme macro prudential assessment. since the deal was first announced and due to Last month, China resumed the Qualified the “uncertain timing” of the approval process. The People’s Bank of China last week signalled Domestic Institution Investor scheme, which SkyBridge and HNA Capital, a unit of the HNA the resumption of the outbound investment allows Chinese investors to convert renminbi into Group, now plan to explore the development scheme that allows qualified domestic financial foreign currencies to buy overseas securities. of a “mutually beneficial marketing and institutions to buy renminbi-denominated The foreign exchange regulator has also distribution arrangement” of SkyBridge’s products in overseas markets. widened the quotas of two other outbound offerings in China, the statement said. In a notice on its website, the PBoC updated the investment schemes in Shanghai and Shenzhen Scaramucci, who last year had a tumultuous regulations governing the Renminbi Qualified as part of the government’s efforts to liberalise 10-day stint as White House communications Domestic Institutional Investors programme, financial markets. director, will return to the firm as co-managing which was suspended unofficially in late 2015 partner to focus on strategic planning and along with several other outbound schemes HNA Group marketing efforts, according to the statement. amid fears of capital flight and worries of rapid SkyBridge bid dropped The Chinese conglomerate first announced in currency depreciation. January 2017 that it was buying a majority stake The latest announcement suggests Beijing is HNA GROUP’s bid to buy a majority stake in in SkyBridge. HNA and SkyBridge have never gradually relaxing the outbound investment SkyBridge Capital, a hedge fund investment disclosed the terms of the investment. scheme. firm founded by US President Donald Trump’s Two people familiar with the matter but who The PBoC notice says the renminbi must not former aide Anthony Scaramucci, has been declined to be identified due to sensitivity of the be converted into foreign currencies under the called off after facing repeated delays in getting subject, have said the deal could not close as scheme for overseas investment. In addition, approval from the Committee on Foreign CFIUS had declined to accept an application to RQDII investors must submit investment details Investment in the United States. review the transaction, which in effect prevented

18 International Financing Review Asia May 5 2018 Please send job moves to [email protected]

the official CFIUS review process from starting. “This is going to be a key focus for us as this XIAOMI, which filed for a Hong Kong IPO earlier One of the people said CFIUS had refused sector develops.” this week, is considering a domestic listing to take the application because HNA kept Two weeks ago, Price told a gathering in Sydney through CDRs, sources told IFR earlier. changing the details of its ownership. that ASIC will look to update its guidance The smartphone maker plans to bring its HNA did not immediately respond to a request on companies considering ICOs. It will also US$10bn Hong Kong float to the market in June. for comment. highlight that Australian corporate and A CDR sale could follow immediately if final consumer law might apply no matter where the rules are ready as expected in late June. ASIC ICO is created and offered. E-commerce giant ALIBABA GROUP is also mulling ICOs under greater scrutiny an A-share listing through an issue of CDRs as China Securities Regulatory Commission early as the middle of this year, IFR reported Australia’s corporate watchdog said last week it Draft CDR rules issued earlier. CICC and Citic Securities are working on was cracking down on “misleading or deceptive the float, which could raise more than Rmb10bn conduct” in the marketing and selling of digital Chinese technology giants including Alibaba (US$1.57bn). tokens via initial coin offerings. Group and Xiaomi are a step closer to list in the Alibaba rival JD.COM also plans to issue CDRs The Australian Securities & Investments A-share market as China’s securities regulator with the help of China Securities, Huajing Commission said some companies have already said last Friday it had published draft rules on Securities and Huatai United Securities. halted their offerings or indicated a change in the issuance of Chinese Depositary Receipts. The CSRC said on March 30 it would allow their ICO structure as a result of its inquiries. According to local media, the China Securities qualified overseas-listed and domiciled The ICO market is relatively small in Australia Regulatory Commission has started a public companies with a market capitalisation of no but ASIC is wary poor conduct will have a consultation on the draft rules, which will run for less than Rmb200bn to issue shares or CDRs in negative impact on investor confidence over a month. the A-share market as part of a pilot scheme. time. The final rules are expected to take effect as The CSRC will also allow qualified unlisted “If you are acting with someone else’s money, early as the end of June if no major changes are companies, with valuations of no less than or selling something to someone, you have made, according to market participants. Rmb20bn and revenues of no less than obligations,” ASIC commissioner John Price said The CSRC said in March it would carry out a Rmb3bn, to go public under the pilot scheme. in a statement. pilot scheme for CDRs, similar to American The CSRC also said at Friday’s weekly briefing “Regardless of the structure of the ICO, there is depositary receipts. The new instrument will that it plans to make CDRs available under one law that will always apply: you cannot make offer a way for overseas-domiciled Chinese the Shanghai-London Stock Connect trading misleading or deceptive statements about the companies to make their shares available on the link, expected to be launched later this year, product,” he added. domestic market. according to Reuters. NEW: IFR CAPITAL MARKETS WEEK AHEAD

Start the week with IFR’s Capital Markets Week Ahead email: a brief, global, cross-asset class look at the key capital markets deals and events expected in the coming week, with links to relevant IFR stories for context. ƒ Key deals coming up in the week ahead, with statistics and background context. ƒ A graphic, chart or table that captures a trend or milestone in the markets. ƒ ‘Last week in numbers’: newsworthy statistics from the previous week’s deals. Visit IFRe.com to sign up today.

International Financing Review Asia May 5 2018 19 LOOKING FOR A WIDER VIEW OF THE GLOBAL SYNDICATED LOAN MARKET? LOOK TO THOMSON REUTERS LPC

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www.loanpricing.com [email protected] COUNTRY REPORT

Australia 21 China 24 Hong Kong 30 India 31 Indonesia 32 Malaysia 34 Maldives 35 Mongolia 35 Singapore 35 South Korea 36 Sri Lanka 36 Taiwan 37 Thailand 38 Vietnam 38

Australian dollar bond transaction, pricing KfW had on April 26 priced a A$200m a A$250m (US$189m) seven-year senior increase of its 6% August 20 2020 Kangaroo, AUSTRALIA unsecured Kangaroo. bringing the total outstanding to A$2.7bn. The issue priced at 98.98 with a That tap priced at 108.010 to yield 2.395%, coupon of 4.5% to yield 4.6725%. This equivalent to semi-quarterly asset swaps DEBT CAPITAL MARKETS was equivalent to semi-quarterly coupon- plus 22bp. matched asset swaps plus 200bp, the tight JP Morgan was sole lead for the deal. › BLUESCOPE MAKES FIVE-YEAR PLAN end of 200bp–205bp initial guidance. Dutch public-sector lender BANK The bonds will be issued off the NEDERLANDSE GEMEENTEN, rated Aaa/AAA BLUESCOPE STEEL, rated Baa3/BBB– (Moody’s/ company’s Australian debt issuance (Moody’s/S&P), on May 1 priced a A$100m S&P), has hired banks for a proposed programme, and settlement will be on May reopening of its 3.3% July 17 2028 Kangaroo benchmark five-year US dollar senior 14. bond, bringing the total outstanding to unsecured bond offering off its EMTN Citigroup and UBS were joint lead A$1.035bn. programme. managers. The tap priced at 99.675 to yield 3.3375%, ANZ, Credit Suisse, HSBC and JP Morgan are Aroundtown has visited the euro equivalent to 53bp over semi-quarterly the bookrunners of the Reg S issue. currency bond market three times this year coupon-matched asset swaps or 58.25bp The Australian steelmaker will meet so far, and issued one Swiss franc offering, over the May 2028 ACGB. investors in Sydney, Asia and London, but this was its first time accessing the RBC Capital Markets was sole lead manager starting on Tuesday. Australian dollar market. for the deal, which settles on May 8. The company invests in commercial › SGSP WEIGHS UP CURRENCY OPTIONS and residential properties, primarily in Top lead managers of all Australian securitisation, Germany and the Netherlands. inc-self-funded transactions ex-CDOs SGSP (AUSTRALIA) ASSETS, rated A3/A– (Moody’s/ 1/1/18 – 30/4/18 S&P), has mandated CBA, HSBC, Mizuho and › EUROPEANS TAP KANGAROOS Amount Westpac to arrange investor meetings in Name Issues A$(m) % Australia, Asia and Europe from May 8. German development bank KFW, rated 1 NAB 8 3,468.3 39.3 A seven to 10-year Reg S senior Aaa/AAA/AAA (Moody’s/S&P/Scope) and 2 Westpac 5 1,017.1 11.5 unsecured transaction denominated in guaranteed by the Federal Republic of 3 BAML 3 796.7 9.0 Australian dollars, euros or US dollars may Germany, on Friday priced a A$150m 4 CBA 4 758.6 8.6 follow, subject to market conditions. reopening of its 2.75% April 16 2020 5 Macquarie 4 674.0 7.6 The company owns electricity and gas Kangaroo, bringing the total outstanding to 6 ANZ 2 516.2 5.9 infrastructure assets in Australia. China’s A$2.65bn. 7 Deutsche 2 447.2 5.1 State Grid International Development holds The tap priced at 100.799 to yield 8 HSBC 2 436.6 5.0 a 60% stake and Singapore Power owns the 2.3225%. This was equivalent to asset swaps 9 UOB 1 284.5 3.2 remaining 40%. plus 20bp, in line with guidance, and 10 Natixis 1 124.1 1.4 29.25bp over the April 2020 ACGBs. Total 12 8,823.3 › AROUNDTOWN MAKES KANGAROO DEBUT RBC Capital Markets was sole lead manager *Market volume and including Kangaroo bonds for the transaction, which will settle on Proportional credit German property group AROUNDTOWN, rated May 14. Source: Thomson Reuters SDC Code: AJ4 BBB+ by S&P, has completed its debut Top lead managers of Australian dollar- Top lead managers of Australian dollar- Top lead managers of all Australian debt, inc- denominated domestic securitisation, denominated domestic bonds, inc-Kangaroo bonds, ABS, MBS (ex-self-funded transactions) inc-self-funded transactions ex-CDOs ex-self-funded transactions, ABS, MBS 1/1/18 – 30/4/18 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Amount Amount Amount Name Issues A$(m) % Name Issues A$(m) % Name Issues A$(m) % 1 NAB 34 7,739.6 14.8 1 NAB 8 3,326.9 39.3 1 UBS 15 5,361.8 12.3 2 CBA 18 5,737.0 11.0 2 Westpac 5 990.4 11.7 2 CBA 14 5,005.0 11.4 3 UBS 15 5,361.8 10.3 3 BAML 3 770.0 9.1 3 ANZ 28 4,793.0 11.0 4 ANZ 30 5,309.1 10.2 4 CBA 4 731.9 8.7 4 Deutsche 20 4,417.8 10.1 5 Deutsche 22 4,838.2 9.3 5 Macquarie 4 674.0 8.0 5 NAB 26 4,412.7 10.1 6 Westpac 24 3,593.3 6.9 6 ANZ 2 516.2 6.1 6 Citigroup 9 3,398.6 7.8 7 Citigroup 9 3,398.6 6.5 7 HSBC 2 436.6 5.2 7 TD Sec 37 3,085.9 7.1 8 TD Sec 37 3,085.9 5.9 8 Deutsche 2 420.5 5.0 8 Westpac 19 2,602.9 6.0 9 Nomura 22 2,080.5 4.0 9 UOB 1 169.8 2.0 9 Nomura 22 2,080.5 4.8 10 JP Morgan 12 1,977.6 3.8 10 Natixis 1 124.1 1.5 10 JP Morgan 12 1,977.6 4.5 Total 149 52,191.7 Total 12 8,460.4 Total 137 43,731.4

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

Proportional credit Proportional credit Proportional credit Source: Thomson Reuters SDC Code: AJ3a Source: Thomson Reuters SDC Code: AJ5 Source: Thomson Reuters SDC Code: AJ6

International Financing Review Asia May 5 2018 21 TransGrid powers up A$4bn refinancing

„ Loans Energy transmission firm moves to lock funding costs

Potential lenders have been invited to Morgan, MUFG, Natixis, HSBC, RBC, 3.5-year revolving credits of A$350m and submit proposals to refinance about United Overseas Bank and Westpac A$50m. The margins, calculated over A$4bn (US$3bn) of maturing debt for Banking Corp, according to Thomson BBSY, were 85bp, 115bp and 145bp for New South Wales’ energy transmission Reuters LPC data. Agricultural Bank of the respective tenors, based on a BBB- firm TRANSGRID ahead an expected rise in China Sydney branch, First Commercial equivalent credit profile. borrowing costs later this year. Bank Brisbane branch, Hua Nan There was also a A$1bn-equivalent two- The company is seeking tenors between Commercial Bank Sydney branch, Mizuho year bridge loan, which was refinanced three and seven years. RBC Capital Markets Bank, Norinchukin Bank and Taiwan in the US private placement market in is advising on the deal. Business Bank Sydney branch joined the August 2017. The RFP has gone out to a wide group loan in the general syndication phase. The borrowing entity for both loans was of lenders to explore various financing NSW ELECTRICITY NETWORKS FINANCE. options and is likely to include tapping the CAPITAL STRUCTURE Since the acquisition, the international Japanese Ninja loan market following the TransGrid was acquired by a Hastings business of Hastings was sold by its recent success there of the Victorian and Funds Management-led consortium parent Westpac to London-based NSW desalination projects – AquaSure for A$10.3bn, backed by the A$5.9bn Northill Capital and re-branded Vantage and Sydney desalination plant. loan, in December 2015. The other Infrastructure. The quest comes ahead of rising investors were Australian electricity The investors in the two local Hastings- borrowing costs expected later this year firm Spark Infrastructure, sovereign managed funds – Utilities Trust of as banks recalibrate pricing in light of fund Abu Dhabi Investment Authority, Australia and The Infrastructure Fund – increased Libor and funding costs. Kuwait’s Wren House Infrastructure and have also changed managers. Morrison The existing lenders of the A$5.9bn Canadian pension fund Caisse de Depot et & Co is managing UTA and Macquarie loan being partly refinanced are, at the Placement du Quebec. Infrastructure & Real Assets has won the primary level, ANZ, Bank of Nova Scotia, The loan comprises a A$1.94bn 3.5-year mandate to manage TIF, said another Commonwealth Bank of Australia, DBS term loan, a A$1.94bn five-year term loan, source familiar with the matter. Bank, Export Development Canada, JP a A$620m seven-year term loan and two SHARON KLYNE

› ANZ PRINTS JUMBO DUAL-TRANCHE › RACQ BANK PRINTS FLOATER receivables originated and serviced by Certegy Ezi-Pay. AUSTRALIA AND NEW ZEALAND BANKING GROUP, MEMBERS BANKING GROUP, operating as RACQ A A$100m Class A tranche, rated P-1/ rated Aa3/AA–/AA–, on Wednesday priced Bank and rated Baa1/BBB+ (Moody’s/S&P), F1+ (Moody’s/Fitch), priced at three- A$2.55bn dual-tranche senior unsecured on Thursday priced a A$55m two-year month BBSW plus 65bp, from 65bp–70bp bonds. floating-rate note at three-month BBSW guidance. A A$2bn five-year floating-rate tranche plus 110bp, in line with guidance. A A$66.5m Class A2 tranche and A$66m priced at par with a coupon of 90bp The offering was increased from a Class A2-G tranche, both rated Aaa/AAA, over three-month BBSW. A A$550m five- minimum size of A$40m. priced at BBSW plus 107bp, from 115bp year fixed-rate tranche priced at 99.829 ANZ and NAB were joint lead managers area initial guidance. with a coupon of 3.35% to yield 3.3875%, for the deal, which settles on May 11. A A$15.3m Class B-G tranche (Aa2/ equivalent to semi-quarterly asset swaps AA) priced at 165bp from 180bp area; a plus 90bp. › VIRGIN AUSTRALIA HOLDS MEETINGS Initial guidance was 93bp over the fixed Top bookrunners of Australia syndicated loans and floating benchmarks. Airline VIRGIN AUSTRALIA HOLDINGS, rated B2/ 1/1/18 – 30/4/18 ANZ was sole lead manager for the deal, B+ (Moody’s/S&P), mandated ANZ, HSBC Amount which settles on May 9. and UBS to arrange investor meetings Name Deals US$(m) % in Singapore, Hong Kong, Sydney and 1 ANZ 10 3,551.1 34.4 › LIBERTY FINANCIAL TAPS Melbourne, which began on May 3. 2 Westpac 4 1,213.5 11.8 An Australian dollar debt capital markets 3 NAB 6 959.4 9.3 LIBERTY FINANCIAL, rated BBB– by S&P, on transaction is expected to follow, subject to 4 CBA 7 863.3 8.4 Monday priced a A$75m increase to its market conditions. 5 Mizuho 2 824.8 8.0 5.1% April 2021 MTN, bringing the total 6 ICBC 1 700.0 6.8 outstanding to 7 Credit Agricole 1 649.8 6.3 A$225m. STRUCTURED FINANCE 8 MUFG 2 620.9 6.0 The tap priced at 99.56 to yield 5.2625%, 9 Barclays 1 268.7 2.6 equivalent to semi-quarterly asset swaps › FLEXIGROUP PRINTS TIGHT ABS 10 UOB 2 194.2 1.9 plus 300bp, in line with guidance. Total 22 10,315.1 NAB and Westpac were joint lead Flexigroup has priced a A$300m (US$228m) * Based on market of syndication and market total managers for the trade, which settled on securitisation, FLEXI ABS TRUST 2018-1, backed by Proportional credit May 4. fully amortising Australian dollar consumer Source: Thomson Reuters SDC Code: S7

22 International Financing Review Asia May 5 2018 COUNTRY REPORT AUSTRALIA

Kestrel duo eye lower funding cost

„ Loans Sponsors mull rejig of US$1.7bn coal M&A loan

The US$1.7bn financing for Indonesia’s ADARO size of the project facility and lower the size holding-company level. The junior tranche is ENERGY and Australian private equity firm EMR of the high-yield bond portion,” said one of structured as a pay-in-kind note, yielding well CAPITAL’s acquisition of Rio Tinto’s Kestrel the sources. over 10%. coking coal mine could include a larger The economics of the project will improve portion of the project loan if syndication if the financing is rejigged to include a FULLY FUNDED goes well, market sources familiar with the bigger project loan component that is less The sponsors are acquiring an 80% stake in situation said. expensive, said the source. Rio’s Kestrel coking coal mine for A$2.25bn As the sponsors consider options to MUFG and Standard Chartered are (US$1.74bn) with Japanese trading house cut their overall financing costs, the more providing the US$400m bridge to high-yield Mitsui & Co holding the remaining 20%. The expensive US$400m 12-month bridge to bond, while ANZ, CIMB Bank, DBS Bank, company has until the end of the month to high-yield bond could be reduced in size as MUFG, OCBC Bank, StanChart and Sumitomo sell its minority stake to Adaro and EMR, it received an indicative rating of around B+, Mitsui Banking Corp are underwriting the double its stake to 40% or retain its existing lower than the BB+ rating the two leads had US$1.05bn term loan. Four of the seven holding. earlier envisaged, the sources said. lenders on the term loan are also providing a In the event Mitsui exits its investment, Pricing for a high-yield bond for a US$250m revolving credit facility. the debt Adaro and EMR are raising would single-asset financing could come around The project loan and the high-yield be sufficient to fund the entire acquisition, 800bp–850bp over Libor, more than double bond are senior secured instruments in according to sources. the 375bp interest margin on the US$1.05bn the capital structure and share the same The Kestrel mine – Rio Tinto’s last five-year amortising project loan, explained security package, explained another source. remaining coal mine in Australia – in the the sources. However, the lenders will be repaid ahead of Bowen Basin region produces high-quality Syndication of the financing is expected bondholders as the project loan amortises coking coal for steel manufacturing. It has to be launched later this month and Adaro’s over five years, whereas the bond would have significant reserves of 146 million tons and Asian relationship banks have already shown a bullet repayment at the end of the five is in the lowest-cost quartile of comparable strong interest to participate, according to years. mines. the sources. In addition to the US$1.7bn senior and The acquisition is subject to regulatory “The sponsors are well within their rights bridge financing, Adaro and EMR are also approvals and is expected to be completed in to ask that additional commitments from the raising a US$400m 5.5-year mezzanine the second half of this year. syndication be applied to increase the overall loan from Nomura and Varde Partners at the SHARON KLYNE

A$17.7m Class C tranche (A2/A) priced at SYNDICATED LOANS back private equity giant Carlyle Group’s 195bp from low 200s area; a A$12m Class A$1bn (US$771m) takeover of Australia’s D tranche (Baa2/BBB) priced at 280bp › ACCOLADE WINES' £300M TLB ACCOLADE WINES. from 300bp area; and a A$7.5m Class E The financing comprises acquisition term tranche (Ba1/BB+) priced at 490bp from Citigroup, Credit Suisse, ING Bank, Mizuho Bank debt as well as a A$150m revolving credit low 500s. and Rabobank have underwritten a £300m facility for working capital and capital A A$15m Class F unrated tranche was (US$408m) covenant-lite term loan B to expenditure. retained. The deal is in early-bird stages, with the The weighted average life of the Class A1 Top bookrunners of Australian equity and tranche was 0.3 years; for the Class A2 and convertible offerings Top bookrunners of Australian equity A2-G tranches it was 1.5 years; and for Class 1/1/18 – 30/4/18 1/1/18 – 30/4/18 B-G, C, D and E was 1.7 years. Amount Amount Credit enhancement was 22.5% for the Name Issues US$(m) % Name Issues US$(m) % Class A1, A2 and A2-G tranches, 17.4% for 1 UBS 9 2,890.5 27.1 1 UBS 9 2,890.5 29.0 the Class B-G, 11.5% for the Class C, 7.5% for 2 Morgan Stanley 4 1,662.3 15.6 2 Morgan Stanley 4 1,662.3 16.7 the Class D, and 5.0% for the Class E. 3 Macquarie 6 629.7 5.9 3 Macquarie 6 629.7 6.3 NAB was sole arranger. It was also joint 4 Deutsche 2 602.7 5.7 4 Morgans Financial 12 532.3 5.4 bookrunner with CBA. The transaction will 5 Morgans Financial 12 532.3 5.0 5 Citigroup 3 481.9 4.8 settle on May 9. 6 Citigroup 3 481.9 4.5 6 JP Morgan 2 388.5 3.9 7 JP Morgan 2 388.5 3.6 7 Hartleys 15 386.7 3.9 › PEPPER GROUP EYES PRIME RMBS 8 Hartleys 15 386.7 3.6 8 Euroz Sec 8 289.0 2.9 9 Euroz Sec 8 289.0 2.7 9 Taylor Collison 11 279.4 2.8 Australian non-bank lender PEPPER GROUP has 10 Taylor Collison 11 279.4 2.6 10 Deutsche 1 252.7 2.5 hired CBA, NAB and Westpac to liaise with Total 228 10,676.4 Total 223 9,952.3 investors with regard to a potential prime *Market volume *Market volume RMBS transaction. “Standard Exclusion not applicable” “Standard Exclusion not applicable” An Australian dollar deal may follow, Proportional credit Proportional credit subject to market conditions. Source: Thomson Reuters SDC Code: AK1 Source: Thomson Reuters SDC Code: AK2

International Financing Review Asia May 5 2018 23 broader investor community awaiting a that includes investment group China Bank as joint global coordinators for a US possible launch to general syndication. Jianyin Investment (JIC), one of its dollar Reg S bond. Carlyle is paying more than three times subsidiaries and private equity fund Tamar The JGCs are joint bookrunners and the A$290m paid by Accolade Wine’s Alliance. joint lead managers with ICBC International, private equity owner CHAMP Private Nature’s Care – Australia’s third- Agricultural Bank of China Hong Kong Equity seven years ago when it formed largest vitamin company – also makes branch, Guotai Junan International and CEB Accolade after buying Constellation Brands’ supplements and skin care products. Its International. Australian winemaking operations, along founders and current owners, the Sydney- Fixed income investor meetings in Hong with some UK and South African labels, based Wu family, will retain the remaining Kong and Singapore will start on Monday according to Reuters. minority stake in the 28-year-old company, for the proposed Reg S senior guaranteed Reuters reported. notes. › NATURAL PARTNERS The buyout, which is subject to The bonds will be issued by Guang regulatory approvals, is expected to close in Ying Investment Limited, a wholly owned Standard Chartered and UOB Bank are the second half of the year. UBS is advising subsidiary of Guangzhou Finance. mandated on a A$280m five-year Nature’s Care, while Deutsche Bank is the Guangzhou Finance will also amortising loan backing the leveraged buy-side adviser. unconditionally and irrevocably guarantee buyout of Australian vitamin company JIC is one of China’s largest state-owned the notes, which have expected ratings of NATURE’S CARE. funds. Its portfolio of investments includes BBB+/A– (S&P/Fitch). The loan is expected to be launched into medical care, artificial intelligence chips general syndication soon. and book stores. Tamar Alliance is owned › CHINA HUADIAN GOES OFFSHORE Funds are to support the acquisition of a by Citic Pacific and Hong Kong-listed majority stake in the Sydney-based vitamin motor vehicle distributor Dah Chong Hong CHINA HUADIAN, rated A2/A–/A, one of China’s company that values the target at about Holdings. The latter is also engaged in food five major power generation groups, has A$800m. and consumer products and the provision hired banks to arrange investor meetings The buyer is a Chinese-led consortium of logistics services. in Hong Kong, Singapore and London from The LBO loan is the first in Australia’s Monday ahead of a proposed offering of Reg Top bookrunners of all renminbi bonds, dietary supplements industry since S US dollar notes. ex-self-funded transactions Biostime International Holdings (now BOC International, ABC International and UBS 1/1/18 – 30/4/18 known as Health and Happiness (H&H) are joint global coordinators. They are also Amount International Holdings) borrowed US$450m- joint bookrunners and joint lead managers Name Issues Rmb(m) % equivalent for its acquisition of Australian with CCB International, ICBC International, 1 Citic 176 169,313.3 9.7 vitamin maker Swisse Wellness in 2016. China Everbright Bank Hong Kong branch, Bank 2 Bank of China 140 128,495.5 7.3 of Communications, Wing Lung Bank, China 3 CCB 163 114,847.0 6.6 Securities International. 4 ICBC 133 109,015.0 6.2 CHINA A proposed offering of senior unsecured 5 ABC 112 93,745.6 5.4 US dollar bonds issued by China Huadian 6 CSC Financial 119 93,010.2 5.3 Overseas Development 2018, an indirect 7 Industrial Bank 127 83,827.1 4.8 DEBT CAPITAL MARKETS wholly owned subsidiary of China Huadian, 8 CMBC 120 73,333.3 4.2 may follow. 9 BoCom 113 69,458.6 4.0 › GFHG PICKS BANKS FOR DOLLAR NOTES The notes will be unconditionally and 10 CICC 40 53,894.3 3.1 irrevocably guaranteed by China Huadian Total 1,308 1,752,785.8 GUANGZHOU FINANCE HOLDINGS GROUP, rated and are expected to be rated A2/A (Moody’s/ *Market volume BBB+/A– (S&P/Fitch), has mandated China Fitch). Proportional credit International Capital Corporation, Ping An of Source: Thomson Reuters SDC Code: AS24 China Securities (Hong Kong) and Wing Lung Top bookrunners of China equity and Top bookrunners of Dim Sum bonds Top bookrunners of China syndicated loans convertible offerings (Rmb issued and settled offshore bonds) 1/1/18 – 30/4/18 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Amount Amount Amount Name Deals US$(m) % Name Issues US$(m) % Name Issues Rmb(m) % 1 Bank of China 33 10,657.5 62.4 1 Goldman Sachs 12 5,530.6 10.8 1 Standard Chartered 16 8,740.9 30.2 2 Citic 3 4,300.5 25.2 2 Morgan Stanley 12 5,188.7 10.1 2 HSBC 20 8,085.8 27.9 3 CDB 1 1,238.7 7.3 3 Citic 17 4,498.2 8.8 3 Societe Generale 2 2,050.0 7.1 4 HSBC 2 120.3 0.7 4 BAML 5 4,348.1 8.5 4 Bank of China 3 1,805.8 6.2 5 Ping An Bank 1 100.0 0.6 5 Citigroup 10 4,198.1 8.2 5 Credit Agricole 9 1,705.8 5.9 6* CMB 1 87.8 0.5 6 Huatai Sec 11 2,568.4 5.0 6 Citic 3 1,153.3 4.0 6* Bank of East Asia 1 87.8 0.5 7 China Sec 12 2,190.2 4.3 7* DBS 1 1,000.0 3.5 8 SMFG 2 81.2 0.5 8 CICC 6 1,827.6 3.6 7* KGI Financial 1 1,000.0 3.5 9* OCBC 1 48.7 0.3 9 Guotai Junan Sec 15 1,818.3 3.5 9* Goldman Sachs 1 475.0 1.6 9* KDB 1 48.7 0.3 10 Shenwan Hongyuan Sec 2 1,568.0 3.1 9* JP Morgan 1 475.0 1.6 9* First Financial 1 48.7 0.3 Total 174 51,425.2

Total 49 28,989.8 Total 43 17,083.5 *Market volume *Market volume * Based on market of syndication and market total “Standard Exclusion not applicable” Proportional credit Proportional credit Proportional credit Source: Thomson Reuters SDC Code: AS24a Source: Thomson Reuters SDC Code: S8b Source: Thomson Reuters SDC Code: C1m

24 International Financing Review Asia May 5 2018 COUNTRY REPORT CHINA

› HONG YANG NOT LONG that become puttable in the second half of Haitong International, UBS, Guotai Junan this year, as these coupons are below the International and Oceanwide Securities were Chinese property developer HONG YANG company’s average financial cost. joint global coordinators, joint lead GROUP, rated B/B (S&P/Fitch), on April 27 managers and joint bookrunners. priced US$250m 363-day US dollar senior › CHINA AOYUAN SELLS US$200M BOND S&P on April 19 downgraded Fantasia’s unsecured notes at par to yield 8.50%, rating to B from B+ with stable outlook, as tightening from initial guidance of 8.75% CHINA AOYUAN PROPERTY GROUP, rated B1/B+/BB–, it expects the company’s financial leverage area. priced US$200m three-year non-call two to remain high over the next 12-24 months. Wholly owned subsidiary Hong Seng US dollar senior notes at par to yield 7.50%, S&P believes the company may face is the issuer of the Reg S notes and Hong inside initial 7.80% area guidance. growing execution risks in expanding its Yang Group is the guarantor. The Reg S notes have expected ratings of operating scale amid increased competition Proceeds will be used for debt B2/B/BB–. in the property management segment. refinancing and general corporate The Hong Kong-listed Chinese real estate purposes. company intends to use the proceeds to › RED STAR MACALLINE HIRES BANKS CICC and Huatai Finance Holdings (Hong refinance offshore debt. Kong) were joint global coordinators as AMTD, Bank of America Merrill Lynch, China RED STAR MACALLINE HOLDING GROUP has hired well as joint bookrunners and joint lead Citic Bank International, China Industrial banks for a proposed offering of US dollar managers with ABC International, Orient Securities International, China Minsheng Banking senior notes. Securities (Hong Kog) and VTB Capital. Corp Hong Kong branch, China Merchants CICC, Goldman Sachs, Haitong International, Securities (HK), CEB International Capital, Morgan Stanley and Standard Chartered Bank › YUZHOU DIPS INTO OFFSHORE QUOTA Deutsche Bank, Guotai Junan International, are joint global coordinators as well as joint Haitong International and UBS were joint lead bookrunners and joint lead managers with YUZHOU PROPERTIES, rated Ba3/BB–/BB–, raised managers and joint bookrunners. BNP Paribas. US$200m from a bond offering to refinance The company has started to meet debt and for general working capital › MORE FOR POLY investors in Hong Kong and Singapore from purposes. May 3. The Hong Kong-listed Chinese real estate Hong Kong-listed POLY PROPERTY GROUP Wholly owned subsidiary StarTai HK company on Thursday priced the three-year reopened the 5.20% three-year US dollar will be the issuer of the Reg S unrated non-call two US dollar senior notes at par to senior unsecured bonds due 2021 it priced notes and Red Star Macalline Holding is the yield 7.90%, slightly tighter initial guidance in March for US$150m, bringing the total guarantor. of 7.95% area. outstanding to US$500m. Red Star Macalline Holding has Final statistics of the Reg S issue were not The company sold the additional bonds businesses in home furnishings, real estate, available at the time of writing. But orders at 99.996 on April 27. Settlement will be on commercial property management and were said to be only US$450m, including May 7. cinema. It holds a 68.4% stake in Shanghai interest from leads, at the time of final Proceeds from the tap will be used to and Hong Kong-listed Red Star Macalline guidance. refinance offshore debt. Group Corporation. The notes have expected ratings of B+/ Wholly owned BVI subsidiary Ease Trade BB– (S&P/Moody’s). Global is the issuer of the Reg S unrated › MINMETALS LAND EYES PERPETUAL The newly priced notes were under water bonds and Poly Property Group is the in the secondary market and quoted at guarantor. The notes have the benefit of a MINMETALS LAND has hired banks for a 99.000/99.200 on Friday morning, according keepwell deed from ultimate state-owned proposed offering of US dollar senior to Tradeweb. parent China Poly Group Corp. perpetual capital securities. BOC International, Haitong International, DBS Bank, Guotai Junan International Deutsche Bank, UBS, Morgan Stanley, BOC Credit Suisse, HSBC, Guotai Junan International, and BOC International were joint global International, Haitong International are joint Deutsche Bank, Industrial Bank Hong Kong coordinators as well as joint lead managers global coordinators as well as joint lead branch, Orient Securities (Hong Kong) and and joint bookrunners with Haitong managers and joint bookrunners with CLSA Yuzhou Financial Holdings were joint global International. and United Overseas Bank. coordinators, joint lead managers and joint Poly Property is the sole offshore-listed The company, the Hong Kong-listed bookrunners. property flagship of China Poly Group. real estate flagship of state-owned China Yuzhou has a total US$1bn offshore debt Minmetals, will meet investors in Hong Kong, issuance quota expiring by the end of this › FANTASIA TAPS 2021S Singapore and London, starting Monday. year. The company on February 27 priced Wholly owned subsidiary Excel Capital US$375m of three-year non-call two US FANTASIA HOLDINGS GROUP, rated B2/B (Moody’s/ Global is the issuer of the proposed unrated dollar senior bonds at par to yield 6.375%. S&P), has reopened the 8.375% US dollar Reg S perpetual notes and Minmetals Land Hence, after these two issues, it still has senior bonds due March 8 2021 it priced is the guarantor. The notes will also have US$425m of quota left. earlier this year for US$150m. the benefit of a keepwell deed provided by According to research firm Lucror The additional bonds were sold at 96.285 China Minmetals. Analytics, Yuzhou has also obtained or a yield of 9.90%, equal to final guidance. approval to issue onshore bonds with a The outstanding size of the 2021s has › HYDOO WRAPS UP EXCHANGE OFFER quota of Rmb3bn (US$473m) and plans been increased to US$600m following to use the proceeds to pay for Rmb2bn the tap. The Reg S notes are rated B3/B Trade centre developer HYDOO INTERNATIONAL onshore bonds due in October. (Moody’s/S&P). HOLDING (B3/B–/B–) priced US$130m of new Lucror noted that Yuzhou will likely The Hong Kong-listed Chinese property two-year bonds as part of a new-money have to renegotiate the coupon on the developer plans to use proceeds from the issue and exchange offer for its old bonds. other three tranches of onshore bonds tap for debt refinancing. The new-money offering was sized at

International Financing Review Asia May 5 2018 25 US$25.893m with an issue price of 98.287 month, according to market sources. CEFC Anhui International Holding, and a 12% coupon to yield 13%, in line with It will be its second print under the a Shenzhen-listed subsidiary of CEFC guidance. Hydoo had previously announced bank’s Rmb10bn bond programme Shanghai, was found to have overdue debt a minimum yield of 12% for the new US approved by the China Banking Regulatory of Rmb794m, including a trust loan of dollar issue. Commission and People’s Bank of China. Rmb294m, according to an audit report It ran alongside an exchange offer for In September 2017, the lender printed with a disclaimer of opinion by Shanghai Hydoo’s US$160m 13.75% senior notes due Rmb2bn three-year notes at par to yield Certified Public Accountants. The audit December 15 2018. Hydoo agreed to accept 4.68%. The notes were rated AAA by China report was filed to the Shenzhen Stock US$98.4m of the 2018 notes and will issue Chengxin. Exchange on April 26. US$104.107m of new notes in exchange. Meanwhile, CEFC Shanghai has yet to Under the exchange offer, holders will › FIFTH PANDA FOR GLP publish its annual report, which should receive US$1,040 of new notes for every have been released by April 30. The delay US$1,000 of principal in existing notes GLOBAL LOGISTIC PROPERTIES has raised is “due to the great uncertainties the tendered. The new Reg S notes are expected Rmb1.5bn from its fifth offering of Panda company faces”, the company said in a to be rated B– by Fitch. bonds this year. statement. Proceeds from the new-money offering The the nine-year notes, which come China Chengxin said it had will be used to refinance the old notes, with put options for investors at the end of communicated with CEFC Shanghai with among other things. years three and six, priced at par to yield regard to the recent development but failed Haitong International and Morgan Stanley 5.09%, within the indicative price range of to get valid information. were dealer managers on the exchange 4.5%–5.5%. The agency first downgraded CEFC offer. They were also joint global The proceeds from the the “Belt and Shanghai to AA+ from AAA in March and coordinators and bookrunners for the new Road” bond, listed on the Shenzhen Stock then cut the rating further to AA– in early issue. Potomac Capital was joint bookrunner. Exchange, will be used to repay debt linked April. to GLP’s acquisition of logistics assets in CEFC Shanghai this month withdrew a › R&F REDEEMS Europe. plan to issue up to Rmb5bn bonds on the The notes were issued in the name Shanghai Stock Exchange. GUANGZHOU R&F PROPERTIES, rated Ba3/B+/BB–, of GLP subsidiary Iowa China Offshore According to the preliminary prospectus has redeemed US$400m of its US$800m Holdings (Hong Kong). The bonds and the for the bond plan, CEFC Shanghai and its 5.25% notes due October 2018 via a tender issuer have AAA ratings from Shanghai subsidiaries have outstanding bonds of over offer. Brilliance Credit. China Merchants Securities Rmb30bn. It faces imminent repayment The amount was the maximum was sole lead on the issue. pressure on May 21, when its Rmb2bn 6.0% under the tender from the Hong Kong- short-term notes becomes due. listed Chinese real estate company. The › CNNC PRINTS RMB3BN NOTES Reuters reported earlier this month redemption price was 100.6 and settlement that CEFC China Energy was planning took place on April 27. CHINA NATIONAL NUCLEAR CORPORATION has raised asset sales to ease a financial crunch. Two Guangzhou R&F now has US$400m of the Rmb3bn from an offering of three-year sources with knowledge of the matter told 2018s outstanding. notes in China’s interbank bond market. Reuters that state-run conglomerate CITIC The company on April 17 priced The notes were priced at par to yield 4.65%, Group was conducting due diligence on US$600m three-year non-call two US dollar within an indicative range of 4.0%–4.90%. CEFC China Energy’s stake in onshore oil senior notes at par to yield 7.00% to fund Both the notes and the issuer are AAA fields in Abu Dhabi to possibly take over the tender offer and for general corporate rated by China Chengxin. CEFC’s energy business. purposes. The proceeds will be used to refinance CEFC Shanghai has been meeting Goldman Sachs was the dealer manager of debt and to replenish capital. domestic bondholders since last Friday. the tender offer. This is CNNC’s first bond issue this year. Bondholders, in proposals submitted to the The Export-Import Bank of China is lead meetings, have asked the issuer to clarify › BUSAN BANK MARKETS DIM SUM NOTES underwriter and bookrunner on the recent media reports and to provide more offering with China Galaxy Securities as joint credit enhancement measures to its bonds, BUSAN BANK, a regional bank in South Korea, lead underwriter. CNNC Finance is financial among other things. rated A2/A– (Moody’s/S&P), was marketing adviser. CEFC’s US$250m 5.950% bonds due Reg S three-year Dim Sum bonds at final November 2018 were quoted at 7.34%/7.25% price guidance of 4.85%–4.90% last Friday. › CEFC DOWNGRADED TO BBB– last Friday afternoon, according to SG Securities (HK) Taipei branch and Thomson Reuters data. Standard Chartered Bank (Taiwan) are joint China Chengxin International Credit Rating bookrunners. has downgraded a subsidiary of CEFC China The issue is expected to be rated A2 by Energy for a third time since its chairman STRUCTURED FINANCE Moody’s. Ye Jianming was reported in early March to have come under investigation for › EVERGRANDE PLANS RENTAL ABS › HSBC BANK (CHINA) PLANS COMEBACK suspected economic crimes. The agency cut the issuer’s rating of CEFC Property developer EVERGRANDE GROUP HSBC BANK (CHINA) is looking to come back to SHANGHAI INTERNATIONAL GROUP on May 2 to plans to raise up to Rmb10bn from a China’s onshore bond market for funding BBB– from AA–, citing concerns over CEFC securitisation of rental housing assets. after its debut issue in September 2017. Shanghai’s ability to service debt after it The securities will be privately placed The bank plans to issue Rmb3bn three- was revealed that one of its subsidiaries to institutional investors on the Shanghai year senior unsecured notes in China’s had missed payment on some debt under Stock Exchange, according to a preliminary interbank bond market as early as this financial pressure. filing to the SSE.

26 International Financing Review Asia May 5 2018 COUNTRY REPORT CHINA

ZTE debt in focus after share suspension

„ Loans: Telecoms equipment maker grapples with US trade ban

Lenders on a US$450m loan maturing in July borrowing, has enough cash to repay the loan The US$450m facility paid a top-level for Chinese telecoms equipment group ZTE on maturity or earlier, if the need arises. all-in pricing of 265bp via an interest margin face an event of default after the suspension ZTE did not immediately respond to of 225bp over Libor and an upfront fee of of the company’s shares on the Hong Kong requests for comment. 160bp. BOCHK, Credit Agricole, BNP Paribas and Shenzhen stock exchanges. ZTE was in discussions with relationship and Societe Generale were the mandated ZTE’s shares on the two bourses were banks to refinance the loan in March. At the lead arrangers and bookrunners of the suspended on April 17 following US sanctions time, it also announced its intention to seek maturing loan, which attracted eight other against the company. medium or long-term debt for ZTE (HK), its lenders in general syndication. Under the terms of the four-year bullet wholly owned subsidiary and the borrower on On April 16, the US Department of loan, signed in July 2014, a suspension the loan. Commerce banned American firms from of ZTE’s shares on the Hong Kong stock According to the March 15 selling parts and software to ZTE for seven exchange for more than 14 trading days announcement, ZTE was to provide a years, saying the company had violated an constitutes an event of default. guarantee for its unit’s debts for an amount agreement on punishing employees that To alleviate concerns among lenders, up to US$600m and for maturities of up was reached after it was caught illegally facility agent Bank of China (Hong Kong) has to 66 months, in order to secure debt shipping US goods to Iran. notified them that ZTE, the guarantor of the financing at favourable costs. EVELYNN LIN, YAN JIANG

First Seafront Fund Management is sole margin of 313bp over Libor and a top-level receive an all-in pricing of 165bp via an arranger on the plan. upfront fee of 200bp. upfront fee of 45bp, while lead arrangers Last month, the China Securities Greentown is one of China’s major joining with US$20m–$29m earn an all-in Regulatory Commission said that it would property developers, with a primary pricing of 162bp via a 36bp fee. Arrangers encourage companies to conduct rental focus in Zhejiang province and its capital coming in for US$10m–$19m will receive housing asset-backed securitisations. Hangzhou. an all-in pricing of 159bp via a 27bp fee. A “green channel” will be set up to speed Funds are for capital expenditure and up the issuance of such securities, CSRC said. › MANGANESE MINER DRILLS FOR REFI general corporate purposes. Responses are due on June 4. CITIC Dameng Holdings has launched The borrower is China Aviation SYNDICATED LOANS a US$100m three-year loan into limited International Holdings, while AVIC syndication. International Leasing is the guarantor. › GREENTOWN SEEKS US$630M LOAN DBS is the mandated lead arranger and Last November, AVIC International bookrunner of the transaction, which offers Leasing raised a Rmb1bn (US$158m) three- Chinese property developer GREENTOWN CHINA an interest margin of 230bp over Libor. year senior loan. Bank of China was the HOLDINGS is in the market for a US$630m- Funds are for refinancing and general MLAB on that deal, which offers a margin equivalent three-year loan. corporate purposes. at par with the PBoC rate. HSBC is the mandated lead arranger and Repayment takes place after a one-year bookrunner of the transaction, which can grace period in three annual instalments of › BOCOM MACAU RAISES STAKES be drawn in Hong Kong or US dollars. 10%, 10% and 80%. The deal offers an interest margin CITIC DAMENG INVESTMENTS, a wholly owned BANK OF COMMUNICATIONS MACAU has increased a of 256.5bp over Hibor/Libor and has an unit of CITIC Dameng Holdings, is the loan to US$350m from a US$300m target. average life of 2.7 years. borrower, while the parent is the guarantor. HSBC was the mandated lead arranger MLAs committing US$50m-equivalent CITIC Group has a 9% stake in CITIC and bookrunner of the transaction, which or more will receive an all-in pricing of Dameng Holdings, while CITIC Resources comprises a US$250m 364-day tranche A 312bp via an upfront fee of 150bp, while Holdings holds 34%. and a US$100m two-year tranche B. The lead arrangers joining with US$30m–$49m- Hong Kong-listed CITIC Dameng Holdings interest margins are 60bp and 71bp over equivalent earn an all-in pricing of 301bp mines manganese and has downstream Libor for tranches A and B, respectively. via a 120bp fee. Responses are due on May processing operations in China and Gabon. Lenders joining as MLABs were offered 30. a top-level all-in pricing of 73bp or 81bp Funds are for capital expenditure, › AVIC ON RUNWAY via participation fees of 13bp or 20bp for refinancing and working capital purposes. tranches A and B, respectively. State-owned China Communications AVIC INTERNATIONAL LEASING is tapping offshore Funds are for working capital purposes. Construction Group, which owns a 28.83% markets for a US$200m three-year loan. Separately, BOCOM International Holdings stake in Greentown, is providing a letter of China Construction Bank (Asia) and First Abu is in the market for a HK$4bn (US$510m) comfort. Dhabi Bank are the mandated lead arrangers three-year term loan. Bank of China (Hong The Hong Kong-listed borrower last and bookrunners of the bullet deal, which Kong), Bank of Communications Hong Kong tapped the market in March 2016 with a offers an interest margin of 150bp over branch, HSBC and Standard Chartered are US$720m three-year bullet loan. HSBC was Libor. the MLABs of that transaction, which can be also the MLAB on that deal, which offered a MLAs committing US$30m or more will drawn in either HK or US dollars. Based on a

International Financing Review Asia May 5 2018 27 margin of 130bp over Hibor or Libor, lenders A spokesperson from Tencent said the › HAIER D-SHARE SALE APPROVED are being offered a top-level all-in pricing of company would not comment on market 155bp via a participation fee of 75bp. speculation or rumours. Shareholders of Shanghai-listed QINGDAO For full allocations, see www.ifrasia.com. Tencent Music was valued at around HAIER have approved the company’s plan US$12.3bn in late 2017 when Europe’s to issue D-shares in Frankfurt, the first › DONG YIN SIGNS US$100M LOAN Spotify Technology swapped a stake with of a new class of equities for Chinese it. Under the agreement, Spotify owns companies. DONG YIN DEVELOPMENT (HOLDINGS), the parent about 9% of Tencent Music while Tencent The home appliances manufacturer plans of China Orient Asset Management Holdings owns a 7.5% stake in Spotify. to issue not more than 400m D-shares. (International) Holding, has signed a Existing shares of Tencent Music were There is a greenshoe option of 15% of the US$100m three-year term loan. reportedly changing hands at a valuation base size. Taipei Fubon Commercial Bank was the of about US$25bn in March. People close The Frankfurt listing could raise around mandated lead arranger and bookrunner of to the deal said the company is expected to US$1bn. the transaction, which offered an interest seek an IPO valuation at around that level. D-shares, similar to Hong Kong-listed margin of 215bp over Libor and has an As of last Wednesday, Spotify had a H-shares, are new instruments being average life of 2.75 years. market capitalisation of US$30bn. touted by the China Europe International Lenders were offered a top-level all-in Tencent Music first started discussions Exchange (CEINEX), a joint-venture pricing of 230bp over Libor via a 40bp with banks for an IPO late last year. trading platform that the Shanghai management fee. Signing was on April 27. Progress was slow, however, as the Stock Exchange, China Financial Futures Funds are for general corporate purposes. company was busy with the Spotify Exchange and Deutsche Boerse created in Dong Yin Development is a unit of state- transaction. The group considered a Hong November 2015. owned China Orient Asset Management. Kong listing at one point after the city CEINEX markets itself as a gateway for For full allocations, see www.ifrasia.com. decided to amend its listing rules to attract Chinese firms looking to access European more listings from Chinese technology investors, offering renminbi-denominated › POWERLONG FUNDS NINGBO PROJECT companies, say the people. products, including stocks, bonds and Tencent Music, however, decided to go exchange-traded funds on the Frankfurt Hong Kong-listed developer Powerlong Real for a US listing as its comparable Spotify is Stock Exchange’s existing infrastructure Estate Holdings has signed a Rmb700m listed there and the Hong Kong Exchanges and under German regulations. three-year term loan with two banks to and Clearing’s newly introduced rules finance a project in Ningbo city. do not allow corporate entities to hold › KEPEI EDUCATION FILES FOR IPO Bank of East Asia provided Rmb400m, split weighted voting rights for now, according equally between its Shanghai and Ningbo to the people. The stock exchange will CHINA KEPEI EDUCATION GROUP has filed an branches. China Everbright Bank Ningbo launch a separate consultation by 31 July application to the Stock Exchange of Hong branch committed Rmb300m. 2018 to explore such an option. Kong for a proposed IPO. The borrower is NINGBO YUAN DA INDUSTRY The provider of private higher vocational INVESTMENT. The parent company is the › GAME ON FOR STREAMING IPO education in south China plans to raise guarantor.The secured loan, signed on April about US$200m, according to people close 26, will be repaid via six unequal, semi- HUYA, the game-streaming unit of Nasdaq- to the deal. annual installments. listed YY, has launched a NYSE IPO of up to The company posted 2017 profit of The project, under construction at the US$180m. Rmb230.9m (US$36m) on revenue of Ningbo High-tech Zone, will have flats The company, which is also backed by Rmb455.4m. and retail space, with an estimated total Chinese internet giant Tencent Holdings, is Citigroup and CCB International are joint investment of Rmb2.5bn. selling 15m primary American depositary sponsors. Powerlong signed a US$120m three-year shares at an indicative price range of term loan with Bank of China (Hong Kong), US$10–$12 each. › TWO FIRMS TO SELL RIGHTS BEA and Wing Lung Bank in May 2016 to The range represents a 2019 P/E of refinance Rmb800m 9.5% senior notes. That 17.4–21.0 and a 2019 P/S of 2.0–2.4. It SDIC POWER has applied to the China deal paid a margin of 400bp over Libor. also implies a market capitalisation of Securities Regulatory Commission for a The company, rated B+ by S&P, is majority US$2.18bn–$2.63bn before the greenshoe proposed rights issue of up to Rmb7bn owned by its founder and chairman Hoi Kin is exercised. There is a greenshoe of 15% of (US$1.1bn). Hong and his son Hoi Wa Fong. the base deal. The power producer plans to offer up to The deal will price on May 10. 1.49bn rights shares on a 2.2-for-10 basis. Credit Suisse, Goldman Sachs and UBS are Proceeds will be used for construction of EQUITY CAPITAL MARKETS joint bookrunners. two hydropower plants. After the offering, YY will own 44.5% in Credit Suisse Founder Securities is working › BANKS PITCH FOR TENCENT MUSIC GIG Huya while Tencent will own 32%. on the transaction. Huya is one of China’s biggest live- YIHUA HEALTHCARE has secured board Banks are set to pitch TENCENT MUSIC streaming platforms for online gaming, approval for a proposed rights issue of ENTERTAINMENT, China’s largest music-streaming with 86.7m monthly active users in the up to Rmb3bn. The company plans to company, this week for a US IPO which could fourth quarter, up 17.2% from a year offer up to 134m right shares on a 3-for- raise about US$3bn–$4bn, according to people earlier, according to a regulatory filing. 10 basis. Proceeds will be used to fund familiar with the situation. The company posted a 2017 net loss of a hospital construction project, repay The entertainment and music arm of tech Rmb81m (US$12.4m), from a 2016 loss of debts and replenish working capital. giant Tencent plans to wrap up the float by Rmb625.6m. Revenues nearly tripled to Shareholders will review the proposal on the end of the year, according to the people. Rmb2.18bn. May 18.

28 International Financing Review Asia May 5 2018 COUNTRY REPORT CHINA

› YANGTZE OPTICAL CLEARS HEARING HK$2.35bn CB in Zhongsheng with a tenor › BOCOM PLANS JUMBO CB ISSUE of 360 days last October. The CB was with YANGTZE OPTICAL FIBRE AND CABLE has cleared a an initial conversion price of HK$20.286 per BANK OF COMMUNICATIONS has secured China Securities Regulatory Commission share. board approval to raise up to Rmb60bn hearing for a proposed Shanghai IPO of Shares of Zhongsheng closed at HK$22.75 (US$9.43bn) from an issue of six-year about Rmb2bn (US$315m). last Thursday. In other words, the old convertible bonds, joining a queue of The Hong Kong-listed manufacturer plans CB was in the money and investors were Chinese banks looking to issue CBs. to offer not more than 75.79m A-shares, or likely to convert the bonds in the next few Shanghai Pudong Development Bank about 10% of its enlarged capital. months. and China Minsheng Banking aim to raise CICC is the sponsor. To avoid the dilution, the company Rmb50bn each from CBs, while China Citic Proceeds will be used to expand decided to buy back the old CB and sell a Bank plans a Rmb40bn CB offering. production capacity, for working capital new one to fund the repurchase. BoCom will use the proceeds for Core and to repay loans. The old CB holders, who have shorted Tier 1 capital. The deal still needs approval The deal still needs written CSRC the stock to hedge their position, will have from shareholders and regulators. approval. to unwind their hedging if they are selling PACIFIC SECURITIES has withdrawn its NANJING SECURITIES has started pre- the CB back to the issuer. The short-covered application from the China Securities marketing a Shanghai IPO of up to 275m activity is expected to grant support to Regulatory Commission for a proposed shares, or about 10% of its enlarged capital. Zhongsheng’s share price. issue of six-year convertible bonds of up to The brokerage could raise around Different from a typical CB, the reference Rmb1.7bn because of changes in market Rmb911m, based on its 2017 earnings price of Zhongsheng’s new CB is not the conditions. per share of Rmb0.16 and the regulators’ company’s last closing price. Instead, it will BOC International (China) was the sponsor. unwritten valuation cap of 23 times be the higher of the company’s last close Proceeds were to be used to support historical earnings. of HK$22.75 last Thursday or the volume the development of margin financing It will set the price on May 9 and start weighted average price per share last Friday. and securities lending businesses, as well bookbuilding two days later. As the company’s share price was as equity and fixed-income investment Soochow Securities is the sponsor and joint expected to rise on Friday due to the short- business. bookrunner with Hua Ying Securities. covered activity, the VWAP was likely to Proceeds will be used for working capital. be used as the reference price. As such, › PESTICIDE PRODUCER TO SELL EB investors asked for a lower conversion › ZHONGSHENG BUYS BACK CB premium and hence the deal was priced Controlling shareholder NANJING NO.1 PESTICIDE below the marketed range. GROUP has received a no-objection letter Hong Kong-listed car dealership ZHONGSHENG Zhongsheng shares rose 3% to HK$23.45 from the Shenzhen Stock Exchange to list GROUP HOLDINGS raised HK$3.925bn on Friday afternoon. and transfer its planned private placement (US$500m) from a five-year put-three It is understood that a large of majority of exchangeable bonds of up to Rmb1.5bn convertible bond while at the same time of investors in the old CB participated in with the shares of NANJING RED SUN as repurchased a significant portion of an the new deal. There is an upsize option of underlying. outstanding HK$2.35bn CB due in October. HK$775m which can be exercised in 30 days. The group holds 301m Red Sun shares, Last Thursday, the zero-coupon new CB Credit spread was assumed at 300bp, representing 51.75% of the company’s total was marketed at a yield-to-put/maturity borrow at 1.5%, implied volatility at 28% issued capital. of 2.25%–2.75% and was priced at the top and bond floor at 92.Proceeds will be used Haitong Securities is the sole bookrunner. of the range. The conversion premium, to repurchase the existing CB and for The deal still needs approval from the however, was set at 27.5%, below the general corporate purposes. China Securities Regulatory Commission. indicative range of 35%–40%. JP Morgan was the sole global coordinator Nanjing Red Sun is a manufacturer of Sole bookrunner JP Morgan sealed a and sole bookrunner for the new CB. pesticides and chemical fertilisers.

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International Financing Review Asia May 5 2018 29 Top bookrunners of Hong Kong dollar bonds, Top bookrunners of Hong Kong dollar bonds, inc certificates of deposit, commercial paper ex-certificates of deposit, commercial paper HONG KONG 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Amount Amount Name Issues HK$(m) % Name Issues HK$(m) % SYNDICATED LOANS 1 HSBC 61 22,626.0 31.7 1 HSBC 17 10,576.0 37.2 2 BoCom 7 17,200.0 24.1 2 Standard Chartered 14 6,704.5 23.6 › KINGBOARD CHEMICAL RETURNS 3 Standard Chartered 27 14,727.5 20.6 3 Societe Generale 4 1,784.9 6.3 4 Mizuho 7 3,549.4 5.0 4 Mizuho 3 1,749.4 6.2 Hong Kong-listed KINGBOARD CHEMICAL HOLDINGS 5 Societe Generale 5 2,284.9 3.2 5 Credit Agricole 4 1,260.0 4.4 is returning to the market for a HK$6bn 6 Credit Agricole 5 1,760.0 2.5 6 BNP Paribas 6 1,190.0 4.2 (US$764m) four-year loan, six months after 7 UBS 2 1,325.0 1.9 7 Goldman Sachs 1 900.0 3.2 obtaining a HK$5.5bn facility. 8 BNP Paribas 6 1,190.0 1.7 8 UBS 1 825.0 2.9 DBS, Hang Seng Bank and Standard 9 Goldman Sachs 1 900.0 1.3 9 RBS 1 739.0 2.6 Chartered are the mandated lead arrangers, 10 Citigroup 4 780.0 1.1 10 Citigroup 1 300.0 1.1 bookrunners and underwriters of the latest Total 140 71,355.8 Total 55 28,442.8 financing, which is equally split into a *Market volume *Market volume term loan tranche A and a revolving credit Proportional credit Proportional credit tranche B. Source: Thomson Reuters SDC Code: AS5a Source: Thomson Reuters SDC Code: AS6 Based on an interest margin of 95bp over Hibor and a 3.5-year average life, banks are Top bookrunners of Hong Kong syndicated loans Hong Kong global equity and equity-related being invited to join at three levels: MLABs 1/1/18 – 30/4/18 1/1/18 – 30/4/18 committing HK$800m or more will receive Amount Amount an all-in pricing of 117bp via a participation Name Deals US$(m) % Name Issues US$(m) % fee of 77bp; MLAs joining with HK$450m– 1 HSBC 9 1,887.4 9.1 1 UBS 4 1,061.3 24.4 $799m earn an all-in pricing of 114bp 2 MUFG 6 1,707.8 8.2 2 Goldman Sachs 3 558.6 12.9 via a 66.5bp fee; lead arrangers coming 3 Bank of China 6 1,589.3 7.7 3 China Merchants Sec 2 417.3 9.6 in for HK$250m–$449m will receive an 4 ICBC 4 958.8 4.6 4* BNP Paribas 1 333.3 7.7 all-in pricing of 111bp via a 56bp fee. The 5 ANZ 5 930.1 4.5 4* Citic 1 333.3 7.7 deadline for responses is May 31. 6 CCB 7 857.0 4.1 6 Guotai Junan Sec 2 258.8 6.0 Funds are for general corporate funding, 7 Standard Chartered 2 778.4 3.8 7 Get Nice Sec 3 119.6 2.8 capital expenditure and refinancing 8 BNP Paribas 3 720.7 3.5 8 CCB 2 106.0 2.4 purposes. 9 CMB 3 681.5 3.3 9 Yue Xiu Sec 1 99.9 2.3 The borrower raised the HK$5.5bn four- 10 Credit Suisse 3 653.8 3.2 10 Kingston Sec 8 84.1 1.9 year loan last November. Hang Seng and Total 32 20,751.0 Total 86 4,343.8 StanChart were the MLABs of the financing, * Based on market of syndication and market total which paid a top-level all-in pricing of Proportional credit Source: Thomson Reuters 123bp based on an interest margin of Source: Thomson Reuters SDC Code: S9b 100bp over Hibor and a 3.5-year average suburbs of China’s big cities. life. state-owned conglomerate CITIC. For full allocations, see www.ifrasia.com. Kingboard Chemical makes laminates and printed circuit boards. › NEW TOWN DEVELOPMENT ASKS FOR MORE EQUITY CAPITAL MARKETS › CITIC CAPITAL SEEKS HK$3BN REFI Hong Kong-listed China New Town Development has increased a debut three- › BOOKS COVERED FOR COFFEE SUPPLIER CITIC CAPITAL HOLDINGS is talking to relationship year loan to US$294m-equivalent from banks for a HK$3bn three-year loan to US$200m. The books of the Hong Kong IPO of TSIT refinance a same-sized bullet facility signed China Construction Bank (Asia) was the WING INTERNATIONAL, a coffee and black tea in 2015. sole original mandated lead arranger and supplier, are covered. The mandate is yet to be awarded. bookrunner of the facility, which has a The deal will raise up to HK$523m Bank of China (Hong Kong), Bank of bullet term loan tranche and a revolving (US$67m) through the sale of 239m Communications Hong Kong, China credit and offered a top-level all-in pricing shares (44% primary/56% secondary) at an Everbright Bank Hong Kong, Hang Seng of 250bp based on an interest margin of indicative price range of HK$1.50–$2.19 Bank, HSBC and OCBC Bank were the 220bp over Libor. each. The range represents a 2018 P/E of mandated lead arrangers and bookrunners The financing comprises a HK$1.524bn 11.6–17.0. of the existing HK$3bn deal, which matures tranche and a US$100m portion. Tsit Wing has secured two cornerstone in September. Signing was on April 24. Funds were investors for the float. NH Foods, a food That deal, which comprises a HK$1bn for general corporate purposes, including processing company listed on Tokyo Stock term loan tranche A and a HK$2bn refinancing. Exchange, has agreed to subscribe ¥1bn revolving credit tranche B, paid a top- Hong Kong-registered CHINA NEW TOWN (US$9.2m) of shares. SGX-listed beverages level all-in pricing of 250bp via an interest HOLDING is the borrower, while the BVI- and dairy products maker F&N will margin of 210bp over Hibor. incorporated parent is the guarantor. State- subscribe 32m shares. The borrower, an alternative investment owned policy lender China Development Books closed on May 4 and pricing was management and advisory company set up Bank owns 54.98% of CNTD, which slated for the same day. Trading will start in Hong Kong in 2002, is a unit of Chinese develops large-scale new towns in the on May 11.

30 International Financing Review Asia May 5 2018 COUNTRY REPORT INDIA

BOC International and BOSC International It is looking at tenors of three to ten years. This is the fourth issue by a public are the joint sponsors. BOC International The housing finance company is seeking sector company to be scrapped since the is the sole global coordinator and joint board approval to raise funds from the sale market regulator issued new bookbuilding bookrunner with DBS, Future Land Resources of bonds to retail investors in one or more guidelines from April 1, making it Securities, Sunwah Kingsway and VBG Capital. tranches, according to a release on the mandatory for issuers to seek bids through exchanges on April 30. an electronic platform every time they raise DHFL is yet to make an official Rs2bn or more from bonds, thus bypassing announcement on the size and tenor. intermediaries. In September 2016, DHFL raised Rs100bn Market participants have blamed the INDIA from a triple-tranche public bond offering. new system and higher yields for the tepid response to bonds of public sector › LAVASA DEFAULTS ON BOND PAYMENT companies. DEBT CAPITAL MARKETS Indian developer LAVASA has defaulted › PFC RAISES TAX-FREE BONDS › OFFSHORE INDIAN BOND FUNDS ON A ROLL on interest and principal payments on non-convertible debentures and delayed POWER FINANCE CORP has raised Rs5bn from The assets under management of offshore repayments to banks and financial five-year tax-free bonds at 5.75%, according Indian bond funds have doubled to US$8bn institutions, according to a filing on to a filing on National Securities Depository in 2017, according to a Fitch release. exchanges. Limited. The opening up of India’s domestic The company has Rs2.2bn of bonds The bonds were allotted privately on capital market and the increase in the outstanding and the next interest and April 30. The secured rupee notes are investment limit for foreign portfolio principal payment is due on June 30. eligible to be exempted from the capital investors in recent years have drawn more Lavasa and its units are in the process of gains tax. foreign capital into the bond market, said formulating a resolution plan along with Crisil, Icra and Care Ratings have Fitch. the lenders. assigned a AAA rating to the notes. Offshore Indian bond funds have grown Lavasa incurred a net loss of Rs6.82bn at 76% compounded annual growth rate in the financial year ending March, with › REC SELLS TAX-FREE BONDS AT 5.75% over the last five years from a low base, current liabilities exceeding its current while onshore India and global fund assets assets by Rs23.9bn on the back of losses RURAL ELECTRIFICATION CORP has raised Rs10bn have grown at an annual CAGR of 25% and from operations in the past few years. from five-year tax-free bonds at 5.75%, 8%, respectively. according to a filing on National Securities The majority of offshore Indian bond › NHB SCRAPS THREE-YEAR BOND ISSUE Depository Limited. funds (66%) were domiciled in Japan as of The bonds were allotted privately on December 2017 and 23% in Luxemburg. The NATIONAL HOUSING BANK has scrapped a three- April 30. The secured rupee notes are funds mainly invest in local-currency Indian year rupee bond after receiving total bids of eligible to be exempted from the capital government or government-related securities less than the issue’s base size, according to gains tax. and highly rated corporate bonds with an market sources. Crisil, India Ratings, Icra and Care average duration of five to six years. NHB was targeting Rs10bn, plus a Ratings have assigned a AAA rating to the greenshoe of the same amount. “NHB notes. › DEWAN EYES RS150BN PUBLIC ISSUE received total bids worth Rs7.15bn, with lowest bid at 8.1% for Rs4bn,” said a source. DEWAN HOUSING FINANCE CORPORATION (DHFL) The notes had a put/call option at the end SYNDICATED LOANS is in talks with bankers to raise up to of 368 days. Rs150bn (US$2.24bn) from a public issue › JIO IN JAPAN of bonds, according to sources close to the Top bookrunners of India syndicated loans development. 1/1/18 – 30/4/18 Indian mobile communications carrier Amount RELIANCE JIO INFOCOMM is inviting banks on four Top lead managers of Indian rupee bonds Name Deals US$(m) % 1/1/18 – 30/4/18 1 Axis 6 964.7 17.4 India equity and equity-related Amount 2 State Bank of India 6 863.0 15.6 1/1/18 – 30/4/18 Name Issues Rs(m) % 3 Yes Bank 4 784.5 14.2 Amount 1 Axis 66 349,092.2 33.7 4 L&T Financial Services 11 733.0 13.3 Name Issues US$(m) % 2 HDFC 32 150,514.7 14.5 5 MUFG 4 420.1 7.6 1 Axis 10 1,452.3 14.4 3 Trust Group 52 147,731.4 14.3 6 Mizuho 3 353.5 6.4 2 Citigroup 8 1,367.3 13.6 4 ICICI 44 78,924.7 7.6 7 ICICI 3 306.6 5.5 3 Kotak Mahindra 9 1,124.2 11.2 5 Yes Bank 13 46,076.9 4.5 8 Indusind-Bank 5 157.3 2.8 4 State Bank of India 10 1,046.5 10.4 6 AK Capital 20 34,524.3 3.3 9* Standard Chartered 1 128.7 2.3 5 Morgan Stanley 1 692.4 6.9 7 Kotak Mahindra 13 33,171.7 3.2 9* DBS 1 128.7 2.3 6 ICICI 8 662.7 6.6 8 Edelweiss Financial 10 31,747.8 3.1 9* ANZ 1 128.7 2.3 7 JM Financial 8 491.2 4.9 9 State Bank of India 13 27,548.9 2.7 9* Credit Agricole 1 128.7 2.3 8 HDFC 3 446.1 4.4 10 Barclays 5 23,299.1 2.3 9* First Abu Dhabi Bank PJSC 1 128.7 2.3 9 BAML 2 360.4 3.6 Total 129 1,035,550.3 Total 37 5,532.4 10 Edelweiss Financial 7 343.0 3.4

*Market volume * Based on market of syndication and market total Total 115 10,080.8

Proportional credit Proportional credit Source: Thomson Reuters SDC Code: AS23 Source: Thomson Reuters SDC Code: S10b Source: Thomson Reuters SDC Code: C1L

International Financing Review Asia May 5 2018 31 levels in general syndication for a ¥53.5bn of 60bp–65bp over Libor. Although the bank is seeking board (US$498m) seven-year Samurai bullet term The leads are unlikely to launch the approval on May 11 to raise up to Rs15bn loan. deal into general syndication, but will be through a QIP, or rights shares, or public Mizuho Bank, MUFG and Sumitomo Mitsui open to reverse enquiries from interested offering in one or more tranches in the Banking Corp are the mandated lead lenders. current financial year that ends on March arrangers, bookrunners and underwriters In November, HPCL took the bilateral 31, the current fundraising is likely to be of the loan, which pays an interest margin route for a US$200m one-year financing. around Rs5bn. of 51bp over Tibor and has a guarantee MUFG provided that loan. United Bank shares are down 29% year from Indian conglomerate and parent to date. Reliance Industries. Most QIPs from state-owned banks have Banks are being offered the MLA title EQUITY CAPITAL MARKETS been put on hold after the discovery, earlier and 98bp in participation fees for tickets this year, of a US$2bn loan fraud at Punjab of ¥5bn or above for a top-level all-in › INDOSTAR SETS IPO PRICE RANGE National Bank. However, some banks have pricing of 65bp. Lead arrangers coming in started work on share sales as they need for ¥3.0bn–¥4.9bn earn 84bp for an all-in Home and vehicle finance provider INDOSTAR to boost their capital to provide for non- pricing of 63bp, while arrangers taking CAPITAL FINANCE has set the price range at performing loans. ¥1.5bn–¥2.9bn receive 73.5bp for an all-in Rs570–Rs572 per share for an IPO of up to of 61.5bp. Lead managers joining with Rs18.4bn (US$276m), according to a term- ¥0.5bn–¥1.4bn earn 63bp in fees for an sheet. all-in of 60bp. Subscription will take place between May Proceeds will fund capital expenditure. 9 and May 11. INDONESIA In December, RIL and Jio raised a Primary shares for Rs7bn and 20m combined US$2.5bn from 13 banks. That secondary shares will be sold. loan comprises a 2.5-year loan of US$815m Major shareholder IndoStar Capital will DEBT CAPITAL MARKETS and €150m (US$185m) (facility 1) for RIL, sell 18.5m shares and other shareholders and separate US$1bn 4.75-year (facility 2) 1.49m shares. IndoStar Capital is backed by › FIF SELLS DEBUT US$300M BOND and US$500m 5.58-year (facility 3) portions private equity firm Everstone Capital. for Jio. RIL’s US dollar and euro tranches The company earned net profit of FEDERAL INTERNATIONAL FINANCE, rated Baa2/ paid top-level all-in pricing of 76bp and Rs3.2bn in the financial year to March 31 BBB– (Moody’s/Fitch), raised US$300m from 46bp based on margins of 56bp and 37bp 2017, up from Rs2.9bn in 2016. Its net non- a debut US dollar bond offering for general over Libor and Euribor, respectively. Jio’s performing loans were 1.2% of total loans in corporate purposes. facility 2 and facility 3 offered a top-level 2017 versus 0.2% in 2016. The Indonesian motorcycle leasing all-in pricing of 105bp and 110bp based JM Financial, Kotak, Morgan Stanley, Motilal company, a unit of conglomerate Astra on margins of 84bp and 92.5bp over Libor, Oswal and Nomura are bookrunners. International, priced the 4.125% three-year respectively. Facilities 1, 2 and 3 have senior unsecured notes at 99.654 to yield remaining average lives of 2.375, 4.33 and › UBI HIRES THREE ARRANGERS 4.249%, or Treasuries plus 160bp, inside 5.42 years, respectively. initial 175bp area guidance. UNITED BANK OF INDIA has hired Emkay, IDBI The Reg S issue comes off a US$1bn › HPCL’S REFI ROADSHOW Capital and Yes Securities for a qualified EMTN programme, and has expected institutional placement of up to Rs5bn, ratings of Baa2/BBB– (Moody’s/Fitch). HINDUSTAN PETROLEUM will meet banks on people with knowledge of the transaction The deal drew final orders of over Tuesday in Singapore in relation to a have said. US$500m, including interest from leads, US$300m three-year bullet loan that four The state-owned bank is expected to across 40 accounts. Asia took 79% of the banks have pre-funded. start meeting investors this week to gauge notes and EMEA got 21%. By investor type, DBS Bank, Mizuho Bank, MUFG and interest. fund managers and asset managers bought State Bank of India are the mandated a combined 50%, banks took 34%, insurers lead arrangers and bookrunners of the refinancing, which pays an interest margin Top bookrunners of Indonesia syndicated loans Indonesia global equity and equity-related 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Amount Amount Top bookrunners of Indonesian rupiah bonds Name Deals US$(m) % Name Issues US$(m) % 1/1/18 – 30/4/18 1 State Bank of India 1 400.0 23.9 1 Ciptadana Securities 2 93.5 27.5 Amount 2 CIMB Group 2 241.1 14.4 2 Citic 2 63.5 18.7 Name Issues Rp(m) % 3* Bank Mandiri 1 188.1 11.2 3 Indo Premier Sec 2 41.2 12.1 1* MUFG 1 1,350,000.0 19.7 3* Bank Central Asia 1 188.1 11.2 4 Credit Suisse 1 39.4 11.6 1* Mandiri SARL 1 1,350,000.0 19.7 5 MUFG 1 167.1 10.0 5 Sinar Mas Group 1 30.0 8.8 1* HSBC 1 1,350,000.0 19.7 6 Standard Chartered 3 122.1 7.3 6* Danareksa 1 24.1 7.1 1* BNP Paribas 1 1,350,000.0 19.7 7* Maybank 2 90.5 5.4 6* Bahana Sec 1 24.1 7.1 5 Citigroup 2 1,000,000.0 14.6 7* BNP Paribas 2 90.5 5.4 8 Victoria Investama 1 11.8 3.5 6 Trimegah Sec 1 177,655.0 2.6 9 Deutsche 1 53.0 3.2 9 Mirae Asset Daewoo 2 9.0 2.7 7 TD Sec 1 500.0 0.0 10 Qatar National Bank 1 37.5 2.2 10* Investindo Nusantara 1 1.5 0.4 Total 6 6,838,155.0 Total 6 1,673.0 10* Jasa Utama Capital PT 1 1.5 0.4

*Market volume Based on market of syndication and market total Total 9 339.5

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

32 International Financing Review Asia May 5 2018 COUNTRY REPORT INDONESIA

MNC Investama removes default risk

„ Bonds Indonesian company completes exchange and raises new money to pay off 2018s

Indonesian media holding company MNC The exchange amount was lower than the exchange, which is an event of default under INVESTAMA has completed an exchange offer issuer’s target of US$250m. BHIT decided Moody’s definition of default,” Moody’s senior and raised new money to avoid defaulting on to waive the condition to the exchange offer credit officer Annalisa DiChiara said in a a debt obligation due next month, but had to requiring that no less than US$225m in rating note prior to the exchange. sweeten terms to entice investors amid weak principal amount of the existing notes be MNC Investama had warned that if the market conditions. submitted for exchange. exchange offer did not go through, the The company, also known as BHIT, The new three-year non-call one notes US$115m debt conversion would not happen, will now be able to repay its US$365m were priced at par to yield 9%, or 100bp nor would it receive a US$30m advance on a 5.875% senior notes due May 16 2018, after wider than the 8% minimum yield initially shareholder loan intended to fund the cash exchanging some of them into a new bond announced. BHIT also raised US$56.4m in portion of the bond exchange offer. and raising additional money. new money from additional notes, raising The company said last December that BHIT received valid instructions to the total aggregate of new bonds to it had planned to repay the May 2018s by exchange US$186m in aggregate principal US$231m. selling coal assets and raising cash from amount of the existing notes for US$174.6m S&P has assigned a preliminary rating shareholders. in aggregate principal amount of new notes. of B– to the new notes, while Moody’s has The notes were issued in 2013 through Separately, US$115m of the 2018s will be assigned a provisional Caa1. Moody’s said it Ottawa Holdings. converted into subordinated debt, leaving expects to upgrade the company rating to B3 Deutsche Bank, ING and Standard US$64m of the 2018s still outstanding. The on completion of the deal but keep the notes Chartered were joint bookrunners on the new remainder will be paid off with proceeds from at Caa1. issue and dealer managers on the exchange the concurrent new money offering and a “If the exchange offer is completed as offer. US$30m advance on a shareholder loan. outlined, it will constitute a distressed FRANCES YOON

took 11%, and the rest went to private SYNDICATED LOANS 124.6bp based on an interest margin of banks and others. 100bp over Libor and an average life of HSBC was global coordinator and joint › ASTRA SEDAYA FINANCE IS BACK 1.625 years. bookrunner with DBS Bank, Mizuho Securities, Astra Sedaya Finance is the auto finance MUFG and OCBC Bank. ASTRA SEDAYA FINANCE has launched a US$150m unit of Astra International. Federal International Finance is a three-year loan into general syndication, frequent issuer in the domestic bond returning to the loan markets after almost market. Jardine Matheson Holdings is its a year. RESTRUCTURING ultimate parent. Citigroup, DBS Bank, OCBC Bank, Sumitomo Mitsui Banking Corp and Taipei Fubon › CP PRIMA TO RESTRUCTURE AGAIN › BUMI BACK FOR MORE Commercial Bank are the mandated lead arrangers and bookrunners of the loan, Indonesian aquaculture company CENTRAL Indonesian property developer BUMI which has an average life of 1.625 years. PROTEINA PRIMA said that holders of 97.39% SERPONG DAMAI on April 30 reopened the The borrowing pays interest margins of of its US$325m step-up notes had voted 7.25% US dollar notes due April 26 2021 it 80bp (offshore) and 90bp (onshore) over in favour of a scheme of arrangement to priced earlier in the month for a US$50m Libor. restructure the bonds for the second time. tap, bringing the total outstanding to Banks are invited to join as lead CP Prima issued US$325m five-year 11% US$300m. arrangers with tickets of US$20m–$29m senior secured bonds in 2007 through Blue The company sold the additional bonds for upfront fees of 35bp, translating to top- Ocean Resources, but was badly affected at 100.125, or a yield of 7.201%, in line with level all-in pricing of 101.54bp (offshore) by a virus at its shrimp farms beginning final guidance of 100.000-100.125. and 111.54bp (onshore). Arrangers in 2009. Bondholders with more than half Bumi Serpong Damai is rated Ba3 committing US$10m–$19m receive 30bp of the notes agreed in February 2010 to (positive) by Moody’s and BB– (stable) by in fees for all-ins of 98.46bp (offshore) and implement a standstill agreement following Fitch. The Reg S senior unsecured three- 108.46bp (onshore). a missed coupon payment in December year non-call two bonds are rated Ba3/BB Roadshows will be held in Singapore on 2009. (Moody’s/Fitch). Monday and Taipei on Wednesday. The The bonds were then restructured and Global Prime Capital is the issuer while deadline for responses is June 1. the new notes were issued in 2013 with Bumi Serpong Damai and certain of its Astra Sedaya Finance’s previous visit a final maturity of December 2020 and a subsidiaries are guarantors. to the market was in June last year for a step-up coupon. The bonds paid a coupon Proceeds from the tap will be used for US$300m three-year loan that was more of 2% for the period ended December 2014, debt refinancing, capital expenditure, than tripled from an original US$90m 4% for the next three years, 6% for the working capital and general corporate target. Citigroup, CTBC Bank and HSBC following year, and 8% for the remaining purposes. were the MLABs of the financing, which two years. Citigroup, UBS, BNP Paribas and Credit Suisse was marketed to Taiwanese lenders only The company had the option to defer were joint bookrunners. and offered a top-level all-in pricing of interest payments if it fell short of Ebitda

International Financing Review Asia May 5 2018 33 targets, with the deferred interest to be operates more than 200 restaurants across would not lead to any breach in covenants repaid with the principal at maturity. the country. related to the minimum finance service CP Prima defaulted on those bonds in CIMB, CLSA and Mandiri were the joint cover ratio. mid-2017, but it was already in talks with global coordinators. Under the sukuk agreement, any project investors and 55.94% of holders had already cost overruns will be covered by the project signed a restructuring support agreement company’s sponsors under a M$50m by then. contingency equity fund backed by a bank Under the restructuring proposal, guarantee or cash injections. In addition, Blue Ocean will exchange the existing MALAYSIA pre-funding requirements under the sukuk notes for US$145.75m of new December agreement contained sufficient funds to 2021 secured notes, plus mandatory pay the first coupon, made on April 6, and exchangeable bonds. Bondholders signing DEBT CAPITAL MARKETS for the second coupon payment. It is not the restructuring support agreement were clear when the second coupon is due. offered a proportional share of US$20m in › GENTING BETS ON NEW PROGRAMME Marc also noted that an additional cash as a consent payment. liquidity buffer was extended by Scatec A court hearing of the scheme of Gaming and resorts company GENTING Solar Solutions Malaysia, which was arrangement is expected to be held this MALAYSIA has established a M$3bn (US$775m) hired to construct the projects. The month. MTN programme with CIMB and Maybank as buffer is in the form of a deferment of a CP Prima is majority owned by the joint principal advisers and lead arrangers. final 5% payment from the engineering, Jiaravanon family, who are behind GENM Capital will be the issuer of procurement and construction contractor Thailand’s Charoen Pokphand Group. the notes, which will be irrevocably and for up to one year after commercial unconditionally guaranteed by parent operations begin. Genting. The notes are rated AAA by RAM. As a result, Marc has kept the rating EQUITY CAPITAL MARKETS Proceeds are to meet operating expenses, on Quantum Solar’s bonds at AA–. The capital expenditure, debt refinancing, company is a subsidiary of Quantum Solar › SARIMELATI PRICES IPO AT BOTTOM working capital and investment needs. Park Malaysia, a joint venture between Genting last visited the bond market in ItraMAS Technology, MalTechPro and Pizza Hut franchisee SARIMELATI KENCANA has October when it made a US$500m tap of CamLite.The 33-tranche sukuk was priced its IPO of up to Rp1trn (US$72m) its 4.25% senior bonds due January 24 2027. privately placed last October with tenors at the bottom of the Rp1,100–Rp1,350 It also sold M$2.6bn of five, 10 and 15-year of 1.5 years to 17.5 years, paying coupons per share, according to a person with notes in March last year. of 4.81% to 6.16%. CIMB and Maybank were knowledge of the transaction. joint lead managers and bookrunners. Books were well oversubscribed and the › RAY OF SUN AS QUANTUM PAYS COUPON top 10 investors got 55% of the book. › HLFG TAKES MTN ROUTE Long-only investors comprised 85% of the QUANTUM SOLAR PARK SEMENANJUNG has paid the investors. first coupon on its M$1bn Green SRI lslamic HONG LEONG FINANCIAL GROUP has set up a Shares will start trading on the Indonesia bond, allaying some concerns arising from M$1.8bn CP/MTN programme, which has Stock Exchange on May 23. delays in completing solar power projects. earned respective ratings of P1/AA1 from Up to 918.7m shares, or 30% of the The Malaysian company is building RAM. enlarged capital, were to be sold in the IPO. three solar power plants with a combined The new programme is in addition to Of these 604.4m were primary and 314.3m generating capacity of 150MW at a cost of a M$25bn multi-currency programme secondary. M$1.24bn. The plants were originally due that was set up in November 2017. Under Raya and Mountain High Investments to be completed by end-2017, but the delays the older programme, HLFG is allowed to were the vendors of the secondary shares. pushed the commercial operation date first sell senior notes, subordinated Tier 2 and Sarimelati has held the Pizza Hut to March 31 and then to end-June 2018. Additional Tier 1 capital securities. The new franchise in Indonesia since 1984 and No reason was given for the delays, but one only allows senior notes to be sold. Marc Rating said in a statement that they HLFG, Malaysia’s fifth-largest integrated Top bookrunners of all Malaysian ringgit bonds 1/1/18 – 30/4/18 Top bookrunners of Malaysia syndicated loans Malaysia global equity and equity-related Amount 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Name Issues M$(m) % Amount Amount 1 RHB 14 8,502.7 24.4 Name Deals US$(m) % Name Issues US$(m) % 2 CIMB Group 17 8,150.4 23.4 1 Mizuho 2 2,051.7 24.7 1 CIMB Group 2 176.5 18.6 3 Maybank 14 5,231.5 15.0 2* UOB 1 2,000.0 24.1 2 JP Morgan 1 160.4 16.9 4 AMMB 14 4,354.3 12.5 2* Standard Chartered 1 2,000.0 24.1 3 Maybank 3 147.0 15.5 5 K&N Kenanga 6 1,551.7 4.5 2* HSBC 1 2,000.0 24.1 4 RHB 6 130.6 13.8 6 Affin 3 1,250.9 3.6 5* SMFG 1 51.7 0.6 5 BNP Paribas 1 128.6 13.6 7 HSBC 2 1,100.0 3.2 5* Hong Leong Financial 1 51.7 0.6 6 TA Sec 10 41.6 4.4 8 Bank Islam Malaysia 2 845.2 2.4 5* Citigroup 1 51.7 0.6 7 M and A Sec 4 33.3 3.5 9 OCBC 2 561.9 1.6 5* MUFG 1 51.7 0.6 8 K&N Kenanga 3 24.8 2.6 10 Cagamas Bhd 1 450.0 1.3 5* BNP Paribas 1 51.7 0.6 9* Yuanta Financial 1 23.5 2.5 Total 48 34,819.5 Total 2 8,310.0 9* Crosby Securities 1 23.5 2.5

*Market volume * Based on market of syndication and market total Total 47 949.3

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

34 International Financing Review Asia May 5 2018 COUNTRY REPORT MALDIVES

Top bookrunners of New Zealand syndicated loans Top bookrunners of all Philippine peso bonds Philippines global equity and equity-related 1/1/18 – 30/4/18 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Amount Amount Amount Name Deals US$(m) % Name Issues Ps(m) % Name Issues US$(m) % 1 ANZ 2 288.4 100.0 1 China Bk Capital Corp 5 15,398.8 22.4 1 UBS 2 729.3 39.2 Total 2 288.4 2 BDO Unibank 4 14,023.8 20.4 2 Metropolitan B&T 2 604.7 32.5 * Based on market of syndication and market total 3 BPI 3 10,690.5 15.5 3 BPI 2 483.6 26.0

Proportional credit 4 Philippine National 2 6,666.7 9.7 4 BDO Unibank 1 27.9 1.5 Source: Thomson Reuters SDC Code: S13b 5 Metropolitan B&T 2 6,190.5 9.0 5 RCBC 1 14.9 0.8 6 Standard Chartered 2 5,857.1 8.5 Total 6 1,860.4 financial services group by assets, owns 7 Union Bank of the Philippines 1 3,333.3 4.8 Hong Leong Bank. 8* Security Bank 1 2,857.1 4.2 Source: Thomson Reuters 8* ING 1 2,857.1 4.2 10 Multinational Investment Banc. 1 959.7 1.4 Total 7 68,834.7 *Market volume SINGAPORE MALDIVES Proportional credit Source: Thomson Reuters SDC Code: AS10 DEBT CAPITAL MARKETS DEBT CAPITAL MARKETS Securities Exchange Market. › MANULIFE US REIT HIRES FOR PERP › PRIVATE PLACEMENT FOR MALDIVES “This issuance strengthens the Government of Maldives’ strategy and MANULIFE US REIT hired DBS, HSBC and Standard The REPUBLIC OF MALDIVES, rated B2/B+ its ability to find the necessary funding Chartered to arrange investor meetings in (Moody’s/Fitch), has returned to the as it prepares to expand its expenditure Hong Kong and Singapore, which began on offshore bond market with a US$100m on development projects and accelerate May 3. private placement. the economic and social development An offering of US dollar resettable The five-year bonds were issued at par of the country,” said Dr Hussain Niyaz, perpetual securities may follow, subject with a coupon of 5.5% through First Abu ambassador of the Republic of Maldives to to market conditions. The proposed bonds Dhabi Bank and settled on April 26. the UAE. will be issued off Manulife US REIT’s The bonds are rated B+ by Fitch, and The Maldives made its offshore debut last US$1bn multi-currency debt issuance were sold to the Abu Dhabi Fund for year, printing a US$200m five-year issue programme. Development. at 7% in May, then tapping it for a further Manulife US REIT is a Singapore-listed They are the first foreign sovereign US$50m in December at 6.95%. BoCom real estate investment trust sponsored bonds to be listed on the Abu Dhabi International led both deals. by a subsidiary of Manulife Financial and ADB to issue first Mongolian bond

„ Bonds Tugrik-denominated notes set to put currency on radar for global investors

The ASIAN DEVELOPMENT BANK received approval liquidity in local currency to be deployed for International Monetary Fund, the ADB and for its first Mongolian tugrik bond, its financing infrastructure operations in those others stepped in with a US$5.5bn bailout treasurer said on Friday. countries.” package. Pierre Van Peteghem, speaking at an It is not yet clear if the ADB will issue Since then, Mongolia has regained some IFR seminar at the ADB annual meetings in bonds onshore or offshore. stability. The local benchmark interest rate Manila, said Mongolia had approved a bond Multilateral development banks has come down to 10%, from 15% in August issue in its local currency, either offshore or – including the European Bank for 2016, and the currency has stabilised around onshore. Reconstruction and Development – have had 2,400 to the dollar. A tugrik bond would be a first from any some experience with synthetic tugrik bonds Moody’s upgraded its sovereign rating to overseas issuer, and could help put Mongolia’s in the international markets in the past, but B3 in January, falling in line with S&P and currency on the radar for global investors. none have yet issued securities denominated Fitch at B–. Van Peteghem compared the concept in the currency. The IMF noted at the end of March that to a recent issue of offshore Indonesian Deal sizes have also been tiny. The EBRD the country’s recovery has been “better than rupiah bonds, dubbed Komodo bonds, in in 2016 sold a US$1.5m tugrik-linked issue, anticipated”, with real GDP growth of 5.1% December 2017. Indonesia and Mongolia are amortising to March 2020, as a hedging in 2017 driven by renewed investment in the shareholders of the ADB. instrument for its Mongolian operations. That vast Oyu Tolgoi copper and gold mine. “Typically what we do is we repatriate deal paid a fixed coupon of 13.75%. Economic and political challenges remain, those funds onshore and we park them, Mongolia has an active government bond however. The ADB expects Mongolia’s GDP typically in government bonds, until we market but its fiscal problems have made its growth to moderate to 3.8% in 2018 before can use those proceeds to refinance our currency volatile. The exchange rate slumped rebounding to 4.3% next year, with inflation operations there,” said Van Peteghem. from 1,945 to the US dollar in June 2016 to running at around 8%. “This is where we are able to provide more almost 2,500 in January 2017, before the STEVE GARTON

International Financing Review Asia May 5 2018 35 Top bookrunners of all Singapore dollar bonds Top bookrunners of all Singapore dollar bonds Top bookrunners of all Singapore dollar 1/1/18 – 30/4/18 (non-domestic) bonds (domestic) Amount 1/1/18 – 30/4/18 1/1/18 – 30/4/18 Name Issues S$(m) % Amount Amount 1 DBS 16 2,172.8 35.5 Name Issues S$(m) % Name Issues S$(m) % 2 OCBC 14 1,625.5 26.5 1 OCBC 2 190.0 25.3 1 DBS 15 2,132.8 39.7 3 UOB 4 818.8 13.4 2* Standard Chartered 1 40.0 5.3 2 OCBC 12 1,435.5 26.7 4 HSBC 4 436.7 7.1 2* DBS 1 40.0 5.3 3 UOB 3 778.8 14.5 5 Standard Chartered 5 305.4 5.0 2* Credit Suisse 1 40.0 5.3 4 HSBC 4 436.7 8.1 6 Credit Suisse 3 152.5 2.5 2* UOB 1 40.0 5.3 5 Standard Chartered 4 265.4 4.9 7 CIMB Group 1 128.8 2.1 Total 3 750.0 6 CIMB Group 1 128.8 2.4

8 Hong Leong Financial 1 70.0 1.1 *Market volume 7 Credit Suisse 2 112.5 2.1

9 Haitong Sec 1 16.7 0.3 Proportional credit 8 Hong Leong Financial 1 70.0 1.3 Total 26 6,127.0 Source: Thomson Reuters SDC Code: AS14 9 Haitong Sec 1 16.7 0.3

*Market volume Total 23 5,377.0

Proportional credit Singapore global equity and equity-related *Market volume

Source: Thomson Reuters SDC Code: AS12 1/1/18 – 30/4/18 Proportional credit Amount Source: Thomson Reuters SDC Code: AS15 Top bookrunners of Singapore syndicated loans Name Issues US$(m) % 1/1/18 – 30/4/18 1 HSBC 3 315.2 23.1 of 102bp over Singapore dollar SOR. Amount 2 DBS 5 260.6 19.1 The unrated notes will be guaranteed by Name Deals US$(m) % 3 Citigroup 2 125.9 9.2 HSBC Institutional Trust Services Singapore, 1 DBS 7 1,598.9 16.5 4 RHB 1 107.7 7.9 in its capacity as trustee of Suntec REIT. 2 OCBC 4 1,096.7 11.3 5 UOB 4 103.2 7.6 Settlement is on May 10. Proceeds will be 3 Maybank 3 909.5 9.4 6* Credit Suisse 2 63.2 4.6 used for general corporate purposes. 4 Standard Chartered 2 832.7 8.6 6* Maybank 2 63.2 4.6 OCBC was sole lead manager and 5 UOB 2 755.5 7.8 8* CICC 1 43.0 3.2 bookrunner for the deal, which will be drawn 6 SMFG 1 645.5 6.7 8* Haitong Sec 1 43.0 3.2 from a US$1.5bn Euro MTN programme. 7 ING 3 506.6 5.2 8* Bank of China 1 43.0 3.2 8 BNP Paribas 3 413.8 4.3 Total 25 1,365.5 9 Credit Agricole 3 366.1 3.8 10* CTBC Financial 1 316.7 3.3 Source: Thomson Reuters 10* First Abu Dhabi Bank PJSC 1 316.7 3.3 SOUTH KOREA Total 15 9,709.2 from John Hancock Life Insurance for a * Based on market of syndication and market total combined US$398.9m. Proportional credit DEBT CAPITAL MARKETS Source: Thomson Reuters SDC Code: S16b › SUNTEC REIT SECURES S$100M › KNOC HOLDS SWISS ROADSHOW focused on US office buildings. It recently SUNTEC REIT, rated Baa3 by Moody’s, raised agreed to buy 1750 Pennsylvania Avenue in S$100m (US$75.1m) in five-year bonds KOREA NATIONAL OIL CORPORATION, rated Aa2/AA/ Washington and Phipps Tower in Atlanta priced at 3.4% last Thursday with a spread AA–, has mandated BNP Paribas (Suisse) and Ten-bank group bidding for Sri Lanka mandate

„ Loans Sri Lankan firms also in fray for US$1bn loan

A group of 10 banks is among the bidders have largely seen foreign lenders leading the part bond Sri Lanka printed in April. The vying for the mandate on a US$1bn- financings. notes were split equally into a five-year equivalent loan for the GOVERNMENT OF SRI China Development Bank and Axis Bank portion priced to yield 5.75% and a 10-year LANKA. have also submitted solo bids, although the piece yielding 6.75%. Citigroup, Deutsche, Citigroup, Credit Suisse, Deutsche Bank, bid from Axis is for a small amount. HSBC, JP Morgan and StanChart were the Emirates NBD, First Abu Dhabi Bank, HSBC, The sovereign has sent out a request for bookrunners. MUFG, Standard Chartered, State Bank of proposals for the loan, to be denominated in The sovereign’s latest loan comes nearly India and Sumitomo Mitsui Banking Corp are US dollars, euros or yen and with a minimum nine months after it closed a US$1bn three- the lenders in the group, while three other maturity of three years. The original April year facility in July last year. That deal paid bidders are also in the fray. 6 deadline for responses to the RFP was a top-level all-in pricing of 250bp based on Quite unusually, Alpen Capital, National extended to around April 20. a margin of 200bp and a two-year average Savings Bank and NDB Investment Bank – all Sri Lanka is not expected to award the life. of which are Sri Lankan financial institutions mandate anytime soon as it is negotiating That loan followed a US$1.5bn 10-year – are also jointly competing for the mandate. the terms after receiving responses from the bond Sri Lanka raised at 6.20% in May last In previous instances, offshore loans for the bidding banks. year. Democratic Socialist Republic of Sri Lanka The loan follows the US$2.5bn two- PRAKASH CHAKRAVARTI

36 International Financing Review Asia May 5 2018 COUNTRY REPORT TAIWAN

UBS to lead a Swiss roadshow on Monday in on the full deal size. The vendor could have pre-tax interest rate floor is set at 1.7%. Zurich. used the upsize option in full but decided Banks are being invited to join at Harvest Operations, a Calgary-based oil not to. About 30 investors, mainly hedge five ticket levels. MLAs committing exploration and production company and funds, participated in the transaction with NT$6.5bn or more, NT$5bn–$6.4bn or a wholly owned subsidiary of state-owned the top five taking more than 70% of the NT$3.5bn–$4.9bn will earn upfront fees KNOC, priced a US$397.5m five-year bond deal. About a quarter of demand came of 36bp, 30bp or 22bp, respectively; at Treasuries plus 140bp last month. from domestic investors and the rest from while co-arrangers that commit NT$2bn– international investors. $3.4bn will get an upfront fee of 13bp. There is a 60-day lock-up on the seller. Participants that commit NT$1bn–$1.9bn EQUITY CAPITAL MARKETS Citigroup was the sole bookrunner. will get a 6bp fee. The deadline for responses is June 8. › HYUNDAI ROTEM BLOCK UPSIZED Funds are for refinancing purposes. The borrower signed the NT$23bn Morgan Stanley unit MSPE Metro- five-year loan last July. BoT also led that Investment has raised W230bn (US$214m) TAIWAN deal, which pays a margin ranging from from the sale of part of its stake in Korean 85bp to 110bp over Taibor based on the rolling stock manufacturer HYUNDAI ROTEM. borrower’s after-tax net profit margin. The deal was launched at a base size of SYNDICATED LOANS The deal also has a pre-tax interest rate 7.33m shares with an indicative price range floor set at 1.7%. of W27,873–W29,177 each, or a discount of › AU OPTRONICS LAUNCHES NT$35BN LOAN 10.5%–14.5% to the pre-deal spot. There was › CHENG LOONG INCREASES LOAN an upsize option of 1.8m shares. Taiwanese LCD maker AU OPTRONICS has The vendor eventually sold 8.23m shares launched a NT$35bn (US$1.2bn) five-year CHENG LOONG has increased a five-year at W28,000, representing a discount of loan, 10 months after it closed a NT$23bn financing to NT$7.2bn from a NT$6bn 14.1% to the pre-deal spot. loan. target. The books were multiple times covered Bank of Taiwan is the mandated lead Hua Nan Commercial Bank was the arranger, bookrunner and facility agent. original mandated lead arranger and The interest margin is tied to the bookrunner, while First Commercial Bank Top bookrunners of all South Korea Won bonds borrower’s after-tax net profit margin: and Taipei Fubon Commercial Bank came in 1/1/18 – 30/4/18 105bp over Taibor for an after-tax net profit with the same title. Amount margin below 0%, 100bp for 0–2.9%, 89bp The deal comprises a NT$7.2bn term loan Name Issues Won(m) % for 3–5.9% and 84bp for 6% or more. The tranche A, a NT$2.16bn term loan tranche 1 KB Financial 187 10,560,558.0 18.3 B and a NT$4.32bn guarantee tranche C. 2 Mirae Asset Daewoo 132 7,164,280.0 12.4 Top bookrunners of all Taiwan dollar bonds The borrower can only draw a maximum 3 Korea Investment 155 6,772,050.0 11.7 1/1/18 – 30/4/18 amount of NT$7.2bn. 4 NH Inv & Sec 93 6,400,130.0 11.1 Amount The interest margin is 60bp over Taibor, 5 Kyobo Life 70 3,598,302.0 6.2 Name Issues NT$(m) % with a pre-tax interest rate floor set at 1.7%. 6 SK Sec 52 3,208,000.0 5.6 1 HSBC 1 22,000.0 51.2 Banks were offered a top-level upfront fee 7 DB Financial Investment 39 2,225,400.0 3.9 2 Yuanta Financial 3 11,000.0 25.6 of 10bp. 8 Shinhan Financial 27 2,005,000.0 3.5 3 KGI Financial 1 3,000.0 7.0 Funds were for working capital purposes 9 Samsung Sec 21 1,721,017.0 3.0 4 Capital Sec 1 1,000.0 2.3 and to refinance a NT$6bn five-year facility 10 Hana Financial 23 1,711,000.0 3.0 Total 7 43,000.0 signed in September 2014. Signing was on Total 1,230 57,692,370.1 *Market volume April 26. *Market volume Proportional credit The borrower makes industrial paper and Proportional credit Source: Thomson Reuters SDC Code: AS11 corrugated containers. Source: Thomson Reuters SDC Code: AS22 For full allocations, see www.ifrasia.com.

Top bookrunners of Taiwan syndicated loans South Korea global equity and equity-related 1/1/18 – 30/4/18 Taiwan global equity and equity-related 1/1/18 – 30/4/18 Amount 1/1/18 – 30/4/18 Amount Name Deals US$(m) % Amount Name Issues US$(m) % 1 Mega Financial 10 1,232.4 17.0 Name Issues US$(m) % 1 Citigroup 4 1,291.8 17.6 2 Taiwan Financial 12 1,105.2 15.3 1 Morgan Stanley 2 261.5 25.8 2 Goldman Sachs 3 1,029.2 14.0 3 Taiwan Cooperative 8 866.9 12.0 2 Taishin Financial 7 239.5 23.6 3 Credit Suisse 3 998.8 13.6 4 Taishin International 5 739.8 10.2 3 Yuanta Financial 2 167.7 16.5 4 Daishin Sec 7 953.6 13.0 5 Fubon Financial 7 661.2 9.1 4 Grand Fortune Sec 2 85.9 8.5 5 NH Inv & Sec 6 699.2 9.5 6 DBS 3 394.7 5.5 5 Mega Financial 4 59.2 5.8 6 Korea Investment 6 555.4 7.6 7 Land Bank of Taiwan 3 335.6 4.6 6 Sinopac Holdings 5 46.3 4.6 7 Shinhan Financial 11 465.7 6.3 8* Chang Hwa Commercial 4 284.9 3.9 7 Cathay Financial 3 33.6 3.3 8 Mirae Asset Daewoo 4 278.6 3.8 8* Cathay Financial 3 284.9 3.9 8 Fubon Financial 6 30.3 3.0 9 Hana Financial 4 261.3 3.6 10 Hua Nan Financial 3 268.2 3.7 9 Concord Sec 1 28.0 2.8 10 KB Financial 1 191.2 2.6 Total 38 7,242.3 10 KGI Financial 3 19.3 1.9

Total 44 7,348.1 * Based on market of syndication and market total Total 44 1,015.6

Proportional credit Source: Thomson Reuters SDC Code: C1Q Source: Thomson Reuters SDC Code: S19b Source: Thomson Reuters

International Financing Review Asia May 5 2018 37 Top bookrunners of all Thai baht bonds Top bookrunners of Thailand syndicated loans 1/1/18 – 30/4/18 1/1/18 – 30/4/18 THAILAND Amount Amount Name Issues Bt(m) % Name Deals US$(m) % 1 Kasikornbank 11 42,159.5 21.5 1* Maybank 1 240.0 48.2 DEBT CAPITAL MARKETS 2 Siam Commercial 10 37,494.6 19.1 1* CIMB Group 1 240.0 48.2 3 Krung Thai 9 25,767.9 13.1 3 CTBC Financial 1 18.0 3.6 › EXIM THAILAND PLANS US DOLLAR ISSUE 4 Bangkok Bank 7 20,976.2 10.7 Total 2 498.0 5 MUFG 4 16,309.5 8.3 * Based on market of syndication and market total EXPORT-IMPORT BANK OF THAILAND, rated Baa1/ 6 Phatra Sec 5 15,742.9 8.0 Proportional credit BBB+ (Moody’s/ Fitch), has hired banks for 7 CIMB Group 4 10,833.3 5.5 Source: Thomson Reuters SDC Code: S18b a proposed offering of US dollar senior 8 Standard Chartered 1 7,142.9 3.6 unsecured notes and has started to meet 9 UOB 5 6,458.3 3.3 Thailand global equity and equity-related investors in Hong Kong, Singapore and 10 Asia Plus Sec 3 4,768.4 2.4 1/1/18 – 30/4/18 London from May 3. Total 29 196,589.1 Amount HSBC, Mizuho Securities and Standard *Market volume Name Issues US$(m) % Chartered Bank are joint bookrunners Proportional credit 1 Morgan Stanley 2 340.7 27.2 and joint lead managers for the Reg S Source: Thomson Reuters SDC Code: AS7 2* Phatra Sec 1 169.3 13.5 issue. 2* BAML 1 169.3 13.5 subsidiary Pruksa Real Estate, a major 4 Bangkok Bank 1 117.0 9.3 › KHON KAEN FINDS SWEET SPOT property developer in Thailand. Pruksa 5 TISCO 2 115.1 9.2 Holding’s main revenues are derived 6* Siam Commercial 1 113.4 9.1 KHON KAEN SUGAR has privately placed Bt2bn from dividends from the subsidiary, but 6* Credit Suisse 1 113.4 9.1 (US$63.4m) of three and 10-year bonds at this would be augmented in 2020 when a 8 Kasikornbank 1 80.7 6.4 2.15% and 3.6%, respectively. private hospital project is scheduled to be 9 Nomura 1 29.5 2.4 UOB Thai was the sole lead manager and completed. 10 KGI Financial 1 4.3 0.3 underwriter for the unrated notes, which The issuer and notes are rated A by Tris. Total 9 1,252.7 settled on May 3. Proceeds will be used to pay off bridging The Thai sugar producer saw more bank loans and to meet working capital Source: Thomson Reuters demand for the three-year note, which was needs. set at Bt1.35bn while the 10-year tranche offers will be priced on May 14. was fixed at Bt650m. Credit Suisse is the sole international EQUITY CAPITAL MARKETS bookrunner. › INDORAMA PLANS LARGEST BOND › DTIF OFFERS BT53.2BN OF NEW UNITS INDORAMA VENTURES has mandated Bangkok Bank, Kasikornbank, Krungthai Bank and Siam DIGITAL TELECOMMUNICATIONS INFRASTRUCTURE Commercial Bank to jointly underwrite and FUND has launched a preferential offer VIETNAM manage a multi-tranche bond at the end of of new units to existing investors and the month. public offer to retail and institutional The Thai petrochemical products investors. SYNDICATED LOANS maker, rated A+ by Tris, is expected to The price range for the offer of up to offer tenors of three to 15 years in six Bt53.2bn (US$1.7bn) is Bt13.60–Bt13.90 per › HYOSUNG SCRAPS VIETNAM PF PLAN tranches to raise up to Bt15bn. This will unit, according to a term-sheet. be its largest transaction since October This equates to a 2.1%–4.2% discount to South Korean industrial conglomerate 2014 when it sold Bt15bn of 7% step-up the pre-deal close of Bt14.20 and a 2019 Hyosun is cancelling a US$1bn project perpetuals to retail and institutional yield of 7.48%–7.65%. financing in Vietnam. investors. The preferential offer for existing Coordinator Korea Development Bank on Bookbuilding is slated for May 31 with shareholders, in a 1-for-2.0911 ratio, will Monday sent the cancellation notice to issuance in June. comprise up to 2.78bn units for up to lenders processing credit approvals for the Bt38.6bn. borrowing. › PRUKSA SEEKS DEBUT BOND In the public offer, investors will be sold The Export-Import Bank of Korea and KDB 1.05bn units for up to Bt14.6bn. were the mandated lead arrangers and PRUKSA HOLDING has mandated Kasikornbank The preferential offer is open for bookrunners of the amortising loan that as sole lead manager and underwriter for a subscription between last Wednesday was launched into general syndication in debut bond to raise up to Bt5.5bn. and May 8 while the public offer is open early April. The deal offered a top-level The notes will be guaranteed by core between last Wednesday and May 11. Both all-in pricing of 252bp based on an interest

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38 International Financing Review Asia May 5 2018 COUNTRY REPORT VIETNAM

margin of 240bp over Libor and a five-year If 267.2m shares are sold at the top of Vinhomes, GIC (7.08%), Vincommerce average life. of the range the deal will total D30.6trn (4.12%) and other individual shareholders HYOSUNG VINA CHEMICALS, Hyosung’s Vietnam- and if all the shares are sold it will who together own 3.19%. incorporated wholly owned subsidiary, was total D31.8bn. Cornerstones will take Books close on May 7 and the shares the borrower. The Seoul-listed parent was D23.4trn. start trading on the Ho Chi Minh Stock the guarantor. The transaction is Vietnam’s largest Exchange on May 17. Funds were for construction of equity offering, beating Vietnam Citigroup, Credit Suisse, Deutsche Bank polypropylene and liquefied petroleum Technological and Commercial Joint and Morgan Stanley are the joint global gas plants in Ba Ria-Vung Tau province Stock Bank’s D21trn IPO earlier this coordinators and bookrunners with HSBC near Ho Chi Minh in south-eastern month. and Maybank. Vietnam. Certain undisclosed minority individual Vinhomes, a Vingroup subsidiary, On January 3, Hyosung announced a plan shareholders are selling the Vinhomes has a 48% market share of the high-end to split into five companies – a holding shares. property developments in the last three company and four operating subsidiaries The cornerstone investors include years in Hanoi and Ho Chi Minh City. In (Hyosung T&C, Hyosung Heavy Industries, Avanda Investment, Capital Research, 2017 Vinhomes reported residential sales Hyosung Advanced Materials and Hyosung Dragon Capital, Ivy Investment, JF revenue of US$1.98bn and gross profit of Chemical). Asset Management, Korea Investment US$766m. Management and Mirae Asset Global Investment. The remaining cornerstone EQUITY CAPITAL MARKETS investors are multi-strategy funds and other Vietnam global equity and equity-related investors. 1/1/18 – 30/4/18 › VINHOMES LAUNCHES IEO On April 12, Singapore’s GIC agreed Amount to buy 189.8m Vinhomes shares for Name Issues US$(m) % High-end property developer VINHOMES has US$853.3m from Vingroup and other 1 Deutsche 2 374.1 33.3 launched an initial equity offering of up shareholders. 2* Morgan Stanley 1 307.9 27.4 to D31.8trn (US$1.40bn), with cornerstone The total secondary proceeds from 2* VCSC 1 307.9 27.4 investors buying 74%–76% of the offer. the IEO and pre-IEO will be close to 4* Credit Suisse 1 66.2 5.9 Around 267.2m–277.3m secondary USS$2.2bn. 4* Citigroup 1 66.2 5.9 shares, or 10%–10.3% of the capital, are There will be a 180-day lock-up on Total 2 1,122.2 being sold in a D110,500–D114,700 range, the selling shareholders, as well as on according to a term-sheet. Vinhomes, Vingroup, which owns 69.7% Source: Thomson Reuters

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International Financing Review Asia May 5 2018 39 ASIA DATA

ASIAN SYNDICATED LOAN PIPELINE UPDATES WEEK OF 30 APRIL Company Currency Size (m) Margin (All-in) Tenor (mths) Facility Arrangers Cambodia PRASAC Microfinance Institution US$ 50 425 (429) 36 Term Loan Cathay Financial Holdings, Taichung Commercial Bank, TCB China Genius Auto Finance Rmb 390 546.25 (570) 24 Term Loan CA-CIB, SMFG, Korea Development Bank, SCB Rmb 390 500.25 (539) 12 Term Loan Korea Development Bank, SCB, CA-CIB, SMFG Great Wall Guoxing Financial Leasing Rmb 500 500.25 (579) 12 Term Loan Fubon Financial Holding Co Ltd Sinopharm Holding (China) Finance Leasing Rmb 1,000 546.25 (570) 36 Term Loan China Cinda Asset Management Co Ltd Xinjiang P&C Corps Agri Division VIII Xinjiang Rmb 700 551 (665) 24 Term Loan DBS Tianshan Aluminum Plant Hong Kong Agile Group Holdings HK$ 6,000 395 (520) 48 Term Loan SCB, HSBC, Hang Seng Bank Ltd China Aviation International Holdings US$ 200 150 (165) 36 Term Loan CCB, First Abu Dhabi Bank Cinda International Holdings HK$ 400 145 (168) 36 Term Loan Cathay Financial Holdings Co Ltd United Asia Finance HK$ 1,600 190 (220) 48 Term Loan Fubon Financial Holding Co Ltd, SCB, Mizuho India Oil & Natural Gas Corp (ONGC) US$ 1,000 12 Revolver/Term Loan Indonesia Medco Ratch Power Riau US$ 240 Term Loan Asian Development Bank, World Bank Korea (South) Hyosung Vina Chemicals US$ 1,000 240 (252) 72 Term Loan Export-Import Bank of Korea, Korea Development Bank Singapore Aver Asia (S) S$ 100 275 (295) 60 Term Loan Malayan Banking Bhd Taiwan Hongwell New Taipei NT$ 3,000 88 60 Term Loan First Financial Holding Co Ltd NT$ 300 60 Guarantee First Financial Holding Co Ltd Rih Ding Water Enterprise NT$ 3,301 178 120 Term Loan Mega NT$ 3,600 178 120 Term Loan Mega NT$ 309 100 120 Guarantee Mega NT$ 300 178 120 Term Loan Mega Vietnam Vinfast Trading and Production LLC US$ 400 350 60 Term Loan CS, HSBC, ICBC, Malayan Banking, Fubon Financial Holding Source: Thomson Reuters LPC

MERRILL LYNCH ASIAN DOLLAR INDEX Index Description Index level 1 week total return 1 month total return 3 months total return OAS ADIG Asian-dollar high-grade index 382.073 0.099 –0.812 –1.253 136 ADHY Asian-dollar high-yield index 601.698 –0.388 –1.085 –2.456 430 AGIG Asian-dollar government high-grade index 354.006 0.030 –1.236 –1.948 124 AGHY Asian-dollar government high-yield index 707.823 –0.578 –1.036 –3.557 355 ACIG Asian-dollar corporate high-grade index 407.685 0.124 –0.666 –1.011 141 ACHY Asian-dollar corporate high-yield index 494.780 –0.350 –1.094 –2.226 445 Source: Merrill Lynch

LAST WEEK’S ECM DEALS Stock Country Date Amount Price Deal type Bookrunner(s) Hyundai Rotem South Korea 02/05/18 W230bn W28,000 Follow-on (Secondary) Citigroup Sarimelati Kencana Indonesia 03/05/18 Rp1trn Rp1,100 IPO (Primary/Secondary) CIMB, CLSA, Mandiri Source: IFR Asia

LAST WEEK’S EQUITY-LINKED ISSUANCE Issuer Country Date Amount Greenshoe Maturity Coupon (%) Premium (%) Bookrunner Zhongsheng Group China 4/5/2018 HK$3.925bn 2023 0 27.5 JP Morgan Source: IFR Asia

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