Tesla Frenzy Sees Goldman Net US$100M from Equities Trading and Margin Loans

SEPTEMBER 19 2020 ISSUE 2351 www.ifre.com

Tesla frenzy sees Goldman net US$100m from equities trading and margin loans

Mexico raises €750m as 266 accounts buy into ﬁrst sovereign bond linked to UN goals

€1.85bn eight-year Novartis deal adds momentum to sustainability-linked bonds

EMERGING MARKETS BONDS/LOANS EQUITIES STRUCTURED EQUITY China issuers Delta pledges 3NOWmAKEûMELTSû Shopify’s US$1.8bn ignore US threats SkyMiles business up after biggest EQUITY#"ûCOMBOû as they raise to secure US$9bn US software IPO PROVESûIMPOSSIBLEû US$4.3bn debt raise ever to resist 02 06 08 09

1 IFR Cover 2351.indd 1 18/09/2020 18:56:21 US POWER DEALS ROUNDTABLE WEBCAST

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PFI US Power.indd 1 03/09/2020 09:12:46 Upfront OPINION INTERNATIONAL FINANCING REVIEW

And another thing All bark, no bite

fter nearly a year without any deal since Enel debuted S president Donald Trump is ramping up his campaign Asustainability-linked bonds, two corporates have issued Uagainst Chinese companies ahead of the November in the format in less than a week. presidential election. So far, his bark looks worse than his First, on September 10, Brazilian pulp and paper company bite. Suzano sold a US$750m 10-year SLB issue. Then, on For all the sabre-rattling about cutting off funding, the Wednesday, Swiss pharmaceutical Novartis printed a Trump administration’s latest moves have had no impact on €1.85bn eight-year SLB offering. Chinese issuers’ ability to access capital. A third potential issuer, Hulic, a Japanese real estate 4HEû53û$EPARTMENTûOFû$EFENSEûlRSTûPUBLISHEDûAûLISTûOFû company, has unveiled plans for a 10-year bond issue with what it calls “Communist Chinese military companies” coupons tied to two sustainability targets. It would be the in June, before adding another 11 names at the end of lRSTû!SIANûCOMPANYûTOûOFFERûTHEûSTRUCTURE August. Since appearing on the list, those companies have So it certainly seems that momentum for SLBs is building, borrowed US$10.9bn in the capital markets, according to not least thanks to an industry push led by the International 2ElNITIVûDATA Capital Markets Association to create some guidelines. Most of the proceeds, naturally, have come from the IFR called on this page last week for a major and Chinese domestic market, where the US can claim no uncontroversial blue chip to enter the SLB market to give it jurisdiction. The total, however, also includes US$4.3bn of some extra impetus, and while Novartis is not without issues, bonds in US dollars and euros, some of which have been ITûLARGELYûlTSûTHEûBILL underwritten by American banks. Bank of America and Yet the sceptics haven’t disappeared. As with bonds linked to 'OLDMANû3ACHSûWEREûBOTHûONûLASTûWEEKSûlVE TRANCHEû the UN’s sustainable development goals (of which Mexico ChemChina deal (along with nine other joint bookrunners), BECAMEûTHEûlRSTûSOVEREIGNûISSUERûLASTûWEEKûVIAûAûTRANSACTIONûTHATû for example. RAISEDûõM ûTHEREûAREûSTILLûQUESTIONSûAROUNDûTHEûEFlCACYûOFû All this is business as usual. The Pentagon’s list gives these bonds in improving ESG standards, especially compared the US president the authority to use emergency powers with green bonds for which there are a clear use of proceeds. against those companies, such as sanctions, but no such measures have yet been taken in the three months since its initial publication. Restrictions against If the performance targets are too Huawei were in force long before it appeared on the June list. DIFlCULT ûANû%3'ûINVESTORûSTANDSûTOûGETû It is a similar story with the ban on WeChat, the messaging app run by Chinese tech giant Tencent Holdings. Announced THEûPARADOXICALûBENElTûOFûAûCOMPANYû with great fanfare in early August, the details that emerged failing to improve its ESG standards on Friday were far less draconian than feared. WeChat will not be carried on app stores in the US, but there are no restrictions to prevent US businesses from using it overseas And then there are more technical issues. The step-up or dealing with Tencent. coupons that are central to SLBs add a layer of technical The fate of video platform TikTok will offer further insight complexity for issuer and investor alike. into the US administration’s thinking. From a corporate treasurer’s perspective, how does one At a time when US politicians are agitating for a ban on build an SLB curve when step-ups are linked to performance Chinese companies in the US stock market, Chinese owner targets that change? And how do such deals affect issuers’ ByteDance has proposed a US IPO for its American business non-SLB curves? as part of a deal designed to satisfy its critics in the US Meanwhile, how does an investor assess the economic government. value of the step-up? If the performance targets are too easy, If Trump accepts that compromise, it would send a ITûADDSûLITTLEûVALUEû!NDûIFûTHEYûAREûTOOûDIFlCULT ûANû%3'û contradictory message that Chinese companies are in fact INVESTORûSTANDSûTOûGETûTHEûPARADOXICALûBENElTûOFûAûCOMPANYû welcome in the US equity markets after all. failing to improve its ESG standards. Betting on a detente is a big call at this point, with US 4HESEûMIGHTûSEEMûLIKEûNERDYûCORPORATEûlNANCEûMATTERSû elections only weeks away. But it is a safe bet that the capital But the sustainability of the sustainability-linked bond markets will carry on printing deals as usual, no matter how market requires good answers to such questions. much noise is out there.

International Financing Review September 19 2020 1

2 IFR Upfront 2351 p1.indd 1 18/09/2020 19:30:36 Top news Mexico brings SDG ﬁrst 04 SLBs get lift from Novartis 04 Delta pledges SkyMiles 06 Goldman Sachs nets US$100m from Tesla trades

People & Markets US giant profits from surging options prices and lucrative margin loans

BY CHRISTOPHER WHITTALL quarter in particular, sources approaching US$3bn – its best By way of comparison, shares say, when the bank reported quarter from that business in in technology stalwarts Amazon Goldman Sachs made about revenues from equity trading over a decade. and Apple have climbed about US$100m from a series of trades The trades also reveal how one 79% and 97% since their March involving Tesla in recent TESLA SHARES HAVE SURGED of the world’s most prominent lows, respectively, while the S&P months, according to sources THIS YEAR, COMFORTABLY lNANCIALûINSTITUTIONSûJOINEDû 500 is up 50%. familiar with the matter, as it OUTPERFORMING THE NASDAQ investors both big and small in All this came during a frenzied % capitalised on a steep rise in the 600 PROlTINGûFROMûTHEûDIZZYINGûCLIMBû period for stock option trading. US 428% electric carmaker’s share price OFûONEûOFûAûCLUSTERûOFûHIGH PROlLEû single-stock options volumes were this summer that helped fuel a 500 stocks that drove markets higher nearly three times higher in the broader surge in US stock this summer. second quarter compared to the markets. 400 same period last year, according Bankers in Goldman’s equities OPTIONS FEVER to strategists at Barclays, driven by 300 trading division were behind a Tesla has been one of the hottest AûSIGNIlCANTûINCREASEûINûACTIVITYû range of lucrative Tesla-focused stocks of the last six months in from retail investors. 200 transactions, including trading what has been a particularly Analysts and media coverage 29% Tesla stock options, providing 100 bumper period for equity have focused on how day traders lNANCINGûSECUREDûAGAINSTûSHARESû markets. The company’s shares on platforms such as Robinhood, in the company, and buying and 0 are up 486% since hitting a low along with institutional giants selling its convertible bonds, of about US$72 in March, when such as SoftBank, helped fuel according to the sources. -100 markets slumped amid concerns the equity rally through their Those deals helped Goldman over the impact of the voracious appetite for Jul 20 Jan 20 Sep 20 Mar 20 May 20 produce stand-out equities Tesla Nasdaq coronavirus pandemic on the derivatives providing exposure trading results in the second Source: Reﬁnitiv global economy. to rising share prices. China issuers ignore US threats Emerging Markets Investor fatigue impacts Chinese deals more than trade war tensions

BY DANIEL STANTON, CAROL CHAN companies”. This followed the The central state-owned seeds- THEûNEWûlVE YEARûPRICEDûmATûTOûORû publication of an initial list of 20 to-chemicals group priced a inside fair value, while the 30-year International investors ignored Chinese companies on June 12. 53MûlVE YEARûSENIORûBONDû was also seen to pay little the Trump administration’s While this has so far been issue at Treasuries plus 185bp, a concession. The exception was the latest shot in the US-China trade seen as little more than sabre US$1bn 10-year at Treasuries 10-year, which paid upwards of war, as three Chinese issuers on rattling, it increases the risk that plus 235bp, a US$200m 30-year 10bp premium for its larger size. a Pentagon watchlist returned to the companies will face US at par to yield 3.7%, equivalent to Orders for the Reg S offering the US dollar bond market to sanctions or restricted access to Treasuries plus 228.6bp, and a mOODEDûINûFROMûGLOBALûREAL raise a combined US$4.3bn. US dollar funding if Sino- US$600m subordinated money accounts, including CHINA NATIONAL CHEMICAL CORP American relations continue to perpetual non-call three at par to central banks, sovereign wealth #HEM#HINA ûWASûTHEûlRSTûTOûTESTû deteriorate. yield 3.35%. Respective guidance funds and offshore US investors. the water, with a well-received ChemChina said in the bond was Treasuries plus 235bp area, Offshore US accounts were US$3bn multi-tranche US dollar prospectus that being added to Treasuries plus 275bp area, allocated between 5% and 10% of and euro trade on Monday, this list had had no impact on its 4.15% area and 3.7% area. each of the US dollar tranches. followed by CHINA THREE GORGES collection of payments, while It also sold a €500m (US$594m) “There was no real impact CORP on Tuesday with a US$1bn Three Gorges said the inclusion four-year senior bond at mid-swaps from being on the Pentagon dual-tranche deal. had not had any material impact plus 168bp, tightening from initial list,” said a banker at one of the On August 31, the US on it or its business. price guidance of 205bp area. deal’s bookrunners. “Investors Department of Defense The latest escalation in the US- ChemChina’s outstanding are familiar with the issuer and designated ChemChina, Three China trade war did not seem to March 2025 bond was quoted at just needed to check internally Gorges and nine other companies have any impact on demand for Treasuries plus 186bp at the start that there was no problem as “Communist Chinese military ChemChina’s new issue. of bookbuilding, indicating that buying the bonds.”

2 International Financing Review September 19 2020

3 IFR Top news 2351 p2-10.indd 2 18/09/2020 19:14:27 For daily news stories @ visit www.ifre.com Snowﬂake melts up 08 THG sees private round go public 08 Rabobank offers ESG transparency 10

Goldman’s equity trading A steep rise in options activity option volumes have been But Goldman bankers also desk doesn’t deal with retail can drive underlying share around twice as high as put made money from corporate investors. But the sizeable prices higher. That is option volumes, Barclays equity derivatives deals revenues it raked in show how particularly true in periods said. That shows investors involving the carmaker, sources the investment bank’s traders when demand in options were predominantly interested said. That is an umbrella term STILLûMANAGEDûTOûPROlTûFROMû markets is extremely lopsided, in gaining exposure to for a range of transactions – these extraordinary market as was the case over the potential share price gains including margin loans, or moves, in part through using summer. through call options, rather lending money against a derivatives to position for an In the most extreme than buying puts to protect company’s shares – which upswing in Tesla shares, sources difference in demand in over against declines. usually involve providing said. lVEûYEARS ûSINGLE STOCKûCALLû A lack of offsetting client lNANCINGûAGAINSTûLARGEûEQUITYû mOWSûFORCESûTRADERSûWHOûHAVEû stakes. TAILWIND STOCKS THAT BENEFITED FROM sold call options to buy the Elon Musk, Tesla’s chief Barclays’ analysis suggests Tesla THE HIGHEST INCREASE IN stock to hedge their position, executive, has borrowed heavily BENElTEDûFROMûTHEûHIGHESTû OPTIONS TRADING VS LAST YEAR a trend that can gather against his Tesla holdings over increase in options trading US$bn momentum as markets move THEûYEARS ûPUBLICûlLINGSûSHOW û activity across the entire 1,500 higher. Such hedging activity pledging nearly half of his market, potentially providing a now accounts for about 40% of roughly 38.7m shares in such SIGNIlCANTûTAILWINDûTOûTHEûSHAREû 1,200 overall stock volume, Barclays transactions at the end of last price. Options volumes on the estimates. year. carmaker jumped to US$1.45trn Corporate equity derivatives 900 in July from US$124bn in July MARGIN LOANS more broadly have been an 2019 on the back of the deluge Trading in call options was just important source of revenue for of retail trading. 600 ONEûOFûAûSERIESûOFûPROlTABLEû some banks this year. Goldman Amazon was the second- businesses related to Tesla for was one of a few lenders to LARGESTûBENElCIARYûOFûANû 300 Goldman. Buying and selling PROlTûFROMûSTRUCTURINGûANDû increase in options activity, Tesla’s convertible bonds (which selling a derivatives rising from US$632bn to about have a face value of over arrangement in June that 0 US$1.48trn. Apple, the next US$4bn), whose prices climbed enables Deutsche Telekom to AMD Tesla Apple Nvidia Netﬂix Google Shopify

most affected, saw volumes Alibaba sharply this summer as the buy SoftBank’s remaining stake Amazon Microsoft increase US$367bn to Jul 2019 Jul 2020 company’s shares rocketed, was in T-Mobile US, according to US$519bn, Barclays said. Source: Barclays another. sources.

ChemChina’s secondary 10-year at 135bp, meaning that “Three Gorges expressed while the 10-year was in line. curve had already absorbed the both tranches paid a 15bp new concern over whether the list CreditSights estimated fair value impact, widening 10bp–15bp in issue concession. may have a negative impact on ATûBPûFORûTHEûlVE YEARûANDû the days following the “Being added to the list did not the deal,” the banker said. “Given 150bp for the 10-year, after adding publication of the list. have much impact on the that US$1bn is a hard target for it, 5bp to compensate for the heavy company and investors haven’t it agreed to adopt a more primary supply in the market. TOO MUCH SUPPLY expressed much concern. generous pricing strategy.” Both tranches traded 2bp–3bp Three Gorges, which operates However, investors did use it as an The company’s outstanding tighter on Wednesday, better the world’s largest hydropower excuse to ask for more generous bonds had tended to trade 5bp than the 12bp and 7bp widening plant, had a harder time winning pricing,” said the banker. or more inside state-owned oil INû#HEM#HINASûlVESûANDûSûONû over investors for its 144A/Reg S “More importantly, starting company Sinopec’s curve, but Tuesday. deal. This was thought to be due from last week, many new deals THEûNEWûlVE YEARûBONDSûCAMEû AVIC INTERNATIONAL HOLDING CORP, to the tight pricing of many widened in the secondary about 5bp wider than Sinopec rated BBB–/A– (S&P/Fitch), also recent Asian deals that has market, badly affecting market ANDûTHEû YEARûWASûmAT came to market on Tuesday, caused them to underperform, sentiment,” he said. “I struggle to tie this to any pricing a US$300m 10-year Reg with ChemChina’s bonds trading The bookbuilding momentum particular political backdrop, S bond offering at Treasuries down when Three Gorges began for the deal was relatively slow, and my impression is that there plus 283bp, inside initial bookbuilding. with orders peaking at over is a bit of investor fatigue,” said guidance of 310bp area. !û53MûlVE YEARûTRANCHEû 53BNûWHENûlNALûGUIDANCEûWASû another banker involved in the The pricing was wider than was priced at Treasuries plus announced, of which US$1.9bn Three Gorges trade. “The IPG the fair value estimate of 280bp 115bp and a US$500m 10-year CAMEûFROMûTHEûLEADSû7ITHûlNALû announcement was met with a by Nomura’s trading desk. piece at 150bp, both well inside orders of over US$2.6bn, the book collective groan by the investor AVIC International is a initial guidance of 145bp area was not particularly hot, but base.” subsidiary of central state-owned and 185bp area. allocations to US investors were Even after offering a new issue enterprise Aviation Industry Corp A banker involved in the deal notable. Investors from North CONCESSION û4HREEû'ORGESûlVE of China, which was named on PUTûFAIRûVALUEûFORûTHEûlVE YEARûATû !MERICAûTOOKûûOFûTHEûlVE YEARû year bonds were still tighter than the initial US list of 20 Chinese a spread of 100bp and for the notes and 56% of the 10-year. CreditSights’ fair value estimate, military companies in June.

International Financing Review September 19 2020 3

3 IFR Top news 2351 p2-10.indd 3 18/09/2020 19:14:28 Top news Mexico brings ﬁrst sovereign bond linked to UN’s SDG goals Emerging Markets Other Latin American countries consider following Mexico’s lead

BY MILUSKA BERROSPI of which were ESG-focused the structure is hard to say, but under management,” Gabriel investors. pricing proved attractive for the Yorio, the country’s sub- MEXICO joined the growing ranks Strong demand allowed leads country with a 1.35% coupon – SECRETARYûOFûlNANCEûANDûPUBLICû of issuers riding the BNP Paribas, Credit Agricole, Mexico’s second lowest ever in credit, said in a video posted on sustainability funding wave last Morgan Stanley and Natixis to the euro market. Twitter. WEEKûWHENûITûBECAMEûTHEûlRSTû tighten from initial thoughts of 4HEûlNALûBPûSPREADûALSOû sovereign to sell a bond tied to the mid-swaps plus 235bp area CAMEûmATûORûPERHAPSûSLIGHTLYû BROAD GOALS the United Nations’ sustainable before pricing at 98.337 to yield inside Mexico’s euro curve, To be sure, as borrowers and development goals. 1.603% or mid-swaps plus 195bp. where the sovereign’s 2026s and bankers experiment in this In the works since February 2030s were trading at around nascent asset class, some ESG when Mexico, rated Baa1/BBB/ “Around the world 191bp and 214bp over swaps on deals have met with their fair BBB–, unveiled its new SDG there are around 3,000 the day of pricing, according to share scepticism, not least for framework to European investment funds with 2ElNITIVûDATA their often vague use of investors, the deal was put on a sustainable mandate Aside from the attractive proceeds. hold following the outbreak of pricing, the government also And in this case, it is hard to the Covid-19 pandemic. and they have some viewed the deal as a way of know how precisely proceeds But with the markets largely US$800bn under accessing a growing investor WILLûBEûUSEDûEXCEPTûTOûlNANCEûAû recovered from the March management” base keen to buy these types of budget that is aligned with the rout, the Latin American country securities. UN’s 2030 agenda for sustainable had little trouble selling the “Around the world there are goals, which include a call for €750m seven-year bond after Whether the deal’s success around 3,000 investment funds action to end poverty, protect generating an order book of was due largely to strong market with a sustainable mandate the planet and better peoples’ €5bn among 266 accounts – 45% conditions or investors’ love for and they have some US$800bn lives. Sustainability-linked bonds get lift as Novartis takes third Bonds Swiss pharmaceutical outfit adds to momentum of SLB market

BY ED CLARK revise pricing to 40bp over far on a bond that isn’t ECB- one of the leads along with swaps from initial price eligible and is structured in a Barclays, HSBC and JP Morgan. NOVARTIS became the second thoughts of the 55bp area. format that is still a relatively corporate in a week to issue a 4HATûlNALûLEVEL ûTHOUGH ûSTILLû unknown quantity. STEPPING UP sustainability-linked bond, meant that Novartis paid a As with the Suzano and Enel although the product continues to spread over its conventional “Can some energy trades, Novartis will pay a 25bp draw criticism from some September 2028s, which were companies issue coupon step-up if it fails to hit INVESTORSûWHOûQUESTIONûITSûEFlCACYû bid at 25bp before the new issue green? Probably not. the key performance indicators. in improving ESG standards. was announced. But some feel that the coupon The Swiss pharmaceutical While some argued that fair But could they use step-up structure hinders rather company printed a €1.85bn VALUEûWASûHARDûTOûDElNEûGIVENû something like this to than helps the development of eight-year sustainability-linked the new structure, there clearly improve the ESG issues %3'ûlNANCINGûh)TûADDSûANOTHERû bond, also known as a KPI-linked was a premium. around their business? layer of complexity,” said a bond, on Wednesday. In contrast, issuers in other Absolutely” banker away from the deal, It followed a US$750m 10-year ESG formats, such as green or pointing out that building an SLB from Brazilian pulp and paper social bonds, have priced “You can say that, yes, this SLB curve will not be easy given company Suzano on September recent deals inside their deal came at a tight spread and that an issuer’s KPIs will change û4HEYûWEREûTHEûlRSTûTWOûSUCHû conventional curves. was not ECB-eligible, but what it on each new bond. bonds sold since the format was Volkswagen, for example, had was rarity. It is a great credit Some investors are also debuted by Italian power producer priced a €2bn debut green with a very interesting ESG UNSUREûOFûTHEûPRODUCTSûBENElTSû Enel in both the US dollar and euro bond some 15bp inside fair element, and it worked really relative to traditional use-of- markets a year ago. value on Wednesday. nicely,” said Andrew Menzies, proceeds green bonds. Novartis attracted €3.75bn of However, leads said they global head of DCM corporate “SLBs are, in our view, an orders, which enabled leads to didn’t want to push pricing too origination at Societe Generale, instrument for a company to

4 International Financing Review September 19 2020

3 IFR Top news 2351 p2-10.indd 4 18/09/2020 19:14:28 For daily news stories @ visit www.ifre.com

3UCHûSOCIALûPRIORITIESûlTûWELLû aligned with SDG targets, but “We are in the business of Andres Perez, Chile’s head of with the policies of Mexico’s we view the process as key in generating alpha over our INTERNATIONALûlNANCE ûTOLDû)&2 populist president Andres improving transparency and benchmarks,” said an investor. CHILE has been one of the Manuel Lopez Obrador, better achieving a country’s SDG goals “We are not likely to give up leaders in the green bond space, known as AMLO, who was swept over the medium term,” said VERYûMUCHûYIELDûINûORDERûTOûFULlLû ISSUINGûTHEûREGIONSûlRSTû to power on an anti-corruption Lupin Rahman, who is head of an ESG [mandate].” sovereign green US dollar and platform and promises to help EM sovereign credit at Pimco euro notes in June 2019. the downtrodden. but also oversees ESG “It does require a lot Perez said Chile could Even so, AMLO also famously integration for the asset of work in identifying approach the market with halted the construction of a new manager. budget items aligned another bond deal involving Mexico City airport after That longer-term view is one ESG themes as early next year. declaring the US$13bn project that several investors are with SDG targets, but “The development of these as corrupt, forcing investors to promoting, arguing that such we view the process types of instruments takes some restructure the green bonds that bonds will ultimately as key in improving time,” he said. lNANCEDûIT outperform the rest of the transparency and “We are working on other And investors will no doubt market. achieving a country’s instruments that will allow us want to hold the government’s “The rationale for getting SDG goals over the to tap markets, differentiate FEETûTOûTHEûlREûnûAûTASKûTHATûFALLSû involved is that over time the ourselves from other EM names in part to the UN but also to volume of SDG investors will medium term” and diversify our investor base.” independent assessor Vigeo increase and that is why it Another country looking to Eiris, which was mandated to should perform quite well over SETTING AN EXAMPLE potentially come to market with give its opinion on whether the medium-term,” said Graham Even so, governments in Latin a similar ESG issuance is Mexico is sticking to its SDG Stock, head of EM sovereign America clearly think such URUGUAY. promises. research at BlueBay Asset forays are worth their while and The country is working with the Big name investors have Management. several have been thinking of Inter-American Development Bank certainly backed the goals For now, it remains unclear following Mexico’s lead. as an adviser for a potential ESG behind the bond even though whether the ESG label – among “We are always looking into bond, a source knowledgeable THEYûMAYûATûTIMESûBEûDIFlCULTûTOû sovereigns at least – has made further diversifying our investor about the offering told IFR. pinpoint. much difference to such bonds’ base by looking into new “The country is examining “It does require a lot of work performance or how willing instruments such as these wider Mexico’s experience with its in identifying budget items INVESTORSûAREûTOûSACRIlCEûYIELD pools of thematic bonds,” issuance.”

EMPHASISEûANDûlNANCEûITSû quantums bigger and to be able that by 2025 it increases material improvement relative sustainability efforts, but we to align that with ESG goals is “innovative therapies patient to the baseline,” said Seb De believe green bonds are the most clearly a tool to greenify or reach” by 200% and the reach of &REITER ûlXED INCOMEû powerful tool for a company to improve a business. ITSûmAGSHIPûPROGRAMMESûBYû investment analyst at Aegon show its progress towards “Sustainability-linked bonds Asset Management. sustainability,” said Bram Bos, are great news for the market. “We looked at these KPIs As of 2019 Novartis’ lead portfolio manager at NN Can some energy companies in particular because innovative therapies reached Investment Partners. issue green? Probably not. But we wanted to focus 500,000 people and 15.1 million Ultimately there is no could they use something like PATIENTSûHADûACCESSûTOûITSûmAGSHIPû assurance that the proceeds will this to improve the ESG issues on the S in ESG which programmes. The latter target have a positive ESG impact, he around their business? allows us to leverage diseases that particularly affect said. Absolutely. And it provides a way our core competency in low to middle-income countries, “In addition to providing for investors to have an impact, driving impact through such as leprosy, malaria, Chagas transparency around the use of which is what everyone wants.” improved patient disease and sickle-cell disease. proceeds, we also expect green Novartis has, however, also bond issuers to align the CLEAR MEASURES access” hit the headlines for the wrong issuance with the company’s But for the latter to be true, KPIs reasons in recent months, general strategy and thus its must be ambitious and clear. “We looked at these KPIs in incurring more than US$1bn in strategic KPIs too,” said Bos. “You have to be very mindful particular because we wanted to lNESûANDûSETTLEMENTS Others argue that this type of OFûTHEûRISKSû4HEûDElNITIONûOFû focus on the S in ESG which allows In June, the US Department of security has the potential to the KPI must be very clear and us to leverage our core Justice said that Novartis and a IMPROVEûTHEû%3'ûPROlLESûOFû absolutely undebatable. That competency in driving impact former eye-care unit would pay businesses that would struggle means in practice a KPI should through improved patient access,” more than US$346m to resolve to issue use-of-proceeds bonds. be relatively simple and said Emmanuel Akpakwu, chief US criminal and civil charges “The amount of green straightforward, not some COMMERCIALûOFlCERûFORûSUB that they bribed medical fundable assets for most issuers complex CO2 emissions Saharan Africa at Novartis. practitioners in Greece and is small,” said Frazer Ross, head calculations,” said Hans Investors said the targets Vietnam. Then in July the of investment-grade debt Biemans, head of green and were robust enough to be company agreed to pay more syndicate for EMEA at Deutsche social bonds at ING, which was meaningful. “The KPIs than US$729m to settle other US Bank, which was not involved in also not involved in the deal. themselves seem well aligned government charges that it paid the Novartis deal. “The amount The two targets which with Novartis’ overall ESG illegal kickbacks to doctors and of funding they have to do is Novartis’ step-up hinges on are strategy and the goals are a patients to boost drug sales.

International Financing Review September 19 2020 5

3 IFR Top news 2351 p2-10.indd 5 18/09/2020 19:14:29 Top news Delta pledges SkyMiles business to secure US$9bn debt raise Bonds/Loans Investors show huge demand for bonds and loans backed by loyalty revenues

BY DAVID BELL, AARON WEINMAN Airlines have pledged assets About 75% of the US$6.1bn of US$1.9bn as consumers used co- such as landing gates and cash sales that were generated branded cards, according to DELTA AIR LINES drew a massive slots as well as intellectual by SkyMiles in 2019 came from Delta. crowd for a US$9bn package of property to secure bond third parties such as Amex, “It’s not 100% correlated,” said bonds and loans secured against offerings since March, which buy airmiles from the the source close to the deal. its SkyMiles loyalty programme but deals backed by rewards company to offer as incentives to h7HILEûAIRûTRAFlCûDROPPEDûINû last week, adding to the programmes have seen consumers. May and June and is starting to company’s growing safety net of particularly strong interest 7HILEûAIRûTRAFlCûPLUNGEDûINû come back, consumer spending liquidity. because the revenues from THEûlRSTûHALFûOFû ûCASHû has come back a lot.” The deal drew US$35bn of these platforms are not fully received from SkyMiles sales to demand across US$6bn in correlated with demand for American Express declined by RING-FENCED secured bonds and a US$3bn travel. less than 5% year-on-year to The structure of the deal secured loan, according to a also gave investors added source close to the deal, DELTA 3.625% US$1bn 2022s comfort.

helping joint bookrunners Bid price Like United’s MileagePlus- Barclays,Goldman Sachs, 105 backed bond and loan JP Morgan and Morgan Stanley transaction, Delta used a upsize the overall deal from securitisation structure that

an initial US$6.5bn. Goldman 95 ring-fenced SkyMiles’ revenues was left lead on the bonds; in a special purpose vehicle Barclays was left lead on the designed to be bankruptcy- loan. remote. 85 Delta became the latest airline h)TSûVERYûCREATIVEûlNANCINGûINû – after United and Spirit – to use the way they’ve set up the ring- its valuable rewards programme fencing and we think it’s 75 to raise liquidity as it continues attractive,” said Steve Kellner, Jul Jan Jun Apr Feb Sep Mar Aug to burn cash in a depressed May head of corporate bonds at PGIM travel market. Source: Reﬁnitiv Fixed Income. Volkswagen coasts through green debut

Bonds German automaker leaves scandal behind as investors jump into new issue

BY ED CLARK Yet any fears that investors are that, given how strong the NEEDûFORûDIVERSIlCATIONûBECAUSEû still distrustful of the company market backdrop is. they will likely be overweight VOLKSWAGEN got a rapturous can be cast aside. There were also technical sectors such as utilities that have response for its long-awaited debut “A majority of investors reasons behind the deal’s success. been more active in the green green bond on Wednesday, as CONlRMEDûTHATûTHEYûWELCOMEDû ESG bond funds have seen net bond market,” said Kilian Gruen, investors showed they have moved VW’s green assets,” said INmOWSûOFû53BNûASûOFû!UGUSTû û director, corporate DCM at ING. on from the company’s diesel Andrew Menzies, global head of according to data from EPFR Global “Additionally, if you look more emissions scandal with the deal DCM corporate origination at and SG Cross Asset Research, generally at the corporate bond MOREûTHANûlVEûTIMESûSUBSCRIBED Societe Generale. “What people already surpassing 2019’s full-year market this year to date While Daimler beat its rival to really like is their strategy and amount of US$27bn. That’s besides automotive issuance on a relative THEûPUNCHûBYûBECOMINGûTHEûlRSTû vision. Of course, they have THEûINmOWSûINTOûGENERALûHIGH GRADEû basis has been under represented German automaker to issue a some history, but they have bond funds that are also buying so from investors following indices green bond earlier this month, given themselves some very ESG bonds. naturally there might be interest. VW’s €2bn dual-tranche deal was ambitious and forward-looking In addition, demand from One last thing is that from a spread still an important milestone for targets, and investors appreciate investors with ESG mandates for perspective autos have suffered the European corporate market this.” green debt issued by auto-related earlier in the year and although given the company’s history. Like Daimler, VW was able to issuers is particularly strong as they have performed since they Earlier this year VW said that price its green bonds inside fair they offer attractive spreads and still offer some spread.” the emissions scandal of 2015 value, though bankers say it’s PROVIDEûDIVERSIlCATION VW, rated A3/BBB+ (both HADûCOSTûITûSOMEûõBNûINûlNESû hard to pinpoint just how much “If you look at green bond negative), priced a €1.25bn and settlements. the green label is responsible for investors, there is probably a eight-year tranche at 125bp over

6 International Financing Review September 19 2020

3 IFR Top news 2351 p2-10.indd 6 18/09/2020 19:14:30 For daily news stories @ visit www.ifre.com

“Generally, we’re pretty “There’s still not a lot of new Meanwhile, the 375bp spread cash burn by 70% since late comfortable [with this structure] money in the loan market, so over Libor on the loan compares March – to US$27m – and hopes and the way it can potentially this is a chance for Delta to with the average drawn Double to achieve breakeven cash burn TRAPûCASHmOWSûIFûTHEûAIRLINEû snatch up the liquidity available B spread of 340bp this month by the end of the year. were to get into trouble.” from investors,” said Michael and the average drawn Triple B “Even if they burn US$27m a The structure helped the Marzouk, managing director for spread of 123bp, according to day, that’s two and a half years secured bonds and loans obtain BANKûLOANûSTRATEGIESûATû0ACIlCû 2ElNITIVû,0#ûDATA of liquidity runway even if you Baa1/BBB/BBB ratings, higher Asset Management, before the assume no demand than Delta’s Baa3/BB unsecured deal was priced. “And with LIQUIDITY BOOST improvement,” said a bond ratings. investment grade ratings, CLOs Bankers were ultimately able to investor. “It’s a pretty strong This led to investment grade, will gobble this up.” MAKEûRAISINGûlNANCEûAGAINSTûTHEû liquidity position that is backing high-yield and structured Leads made the bonds even SkyMiles business in the capital up these bonds.” lNANCEûINVESTORSûCOMPETINGûFORû more attractive to investment- markets a more attractive $ELTAûHASûMAXEDûOUTûTHEûlRST bond allocations. Higher credit grade buyers by offering them option for Delta than going to lien debt capacity of the ratings also proved a master- as non-call for life structures. the US government for funding. SkyMiles business at US$9bn, stroke for the loan portion of The loan is non-callable for Delta said on Monday that it but could issue more debt if the THEûlNANCINGûASû#,/SûJUMPEDû three years, callable at 104 in had opted against taking a business grows and as the debt at the chance to participate YEARûFOUR ûûINûYEARûlVEûANDûATû US$4.6bn secured loan from the amortises. in an investment-grade loan par thereafter. US Treasury under the CARES Other airlines are expected to that will improve the credit The margin on the loan was Act. join Delta, United and Spirit in quality of their overall loan slightly more expensive but, “From the beginning the idea leveraging their rewards portfolios. unlike the bonds, is easy for was to try to get the maximum programmes, and companies A US$2.5bn of 2025 bullet $ELTAûTOûRElNANCEûINûTHEûFUTURE û VALUEûOUTûOFûTHEûFREQUENTûmIERû outside of the airline industry notes landed at 4.50%, inside PROVIDINGûmEXIBILITY programme,” said the source such as the auto and hospitality initial price talk of 4.75% area. In both cases investors saw close to the deal. “The problem companies may also see The US$3.5bn of 2028 bullet the pricing as attractive given with the government loan was BENElTSûINûTHISûKINDûOFû notes were priced at 4.75%, the ratings. that it provided too low an fundraising. inside price talk of 5.00% area. 4HEûlVE YEARûANDûEIGHT YEARû advance rate against what is an “Consumer behaviour and The US$3bn seven-year bonds were priced at spreads of important asset.” the data associated with that is secured loan was priced at 423bp and 422bp over 4HEûlNANCINGûADDSûTOûTHEû really valuable for corporates to 375bp over Libor, tighter than Treasuries. That is in stark US$15.7bn cash and revolver think about and analyse, and to guidance of 425bp–450bp, contrast to spreads on capacity position Delta lNDûTHESEûVEINSûWHEREûTHERESûAû while the original issue average Double B bonds of reported at the end of the DIFFERENTûCASHmOWûFROMûTHEû discount was tweaked to 366bp and average Triple B second quarter. UNDERLYINGûCASHmOWSûOFûTHEû 99 cents on the dollar from bonds of 174bp, according to Delta said on July 14 that it company,” said the source close 98.5 cents. ICE BofA data. had reduced its average daily to the deal.

swaps and a €750m 12-year at respectively. While the Mondelez bond in May to shore up the components of ICMA’s Green plus 150bp. bonds weren’t green, VW’s company’s liquidity meant Bond Principles and LMA’s In contrast, US confectioner relative value still stood out. that VW had little need to Green Loan Principles. Mondelez (A3/BBB) printed Compared with its own look for additional funding, €500m six-year and €750m nine- curve, though, VW came about said leads. MAKING AMENDS year notes on the same day at 15bp through fair value, with Proceeds raised from bonds Since the US Environmental plus 50bp and plus 70bp, pricing on both tranches revised issued under VW’s green Protection Agency found that its by up to 45bp as combined framework will be used to diesel cars had software installed books hit €11.4bn. lNANCEûORûRElNANCEûPROJECTSû to defeat emissions tests, VW has POURING IN related to the manufacturing of made a big effort to rebuild its NET INFLOWS INTO ESG BOND FUNDS LONG BUILD-UP (BY FUND TYPE) electric vehicles and dedicated reputation with investors. 15 The deal came six months after e-charging stations. It says environmental VW visited investors to “These bonds are green bonds awareness is now at the core of announce its green bond that comply with the ICMA Green its corporate strategy. 12 framework with some bankers Bond Principles and as such are Its “Together 2025” strategy, and investors wondering why it use-of-proceeds bonds,” said Carla for example, includes a strong 9 had taken the company so long La Tona, a green structurer within commitment to electric to make its green debut. ING’s DCM sustainable markets vehicles. The company has 6 “Clearly it was a non-deal team. “As an investor you know targeted the production of 1 roadshow, but still, there was an that the proceeds will go towards million electric cars, which it 3 expectation of something sooner zero-carbon projects.” expects to reach by the end of rather than later,” said banker A second-party opinion of the 2023, two years earlier than

0 not involved in the trade. framework has been given by previously predicted. EU Global US EM However, the spread of the Sustainalytics, which said that it BBVA, Commerzbank, HSBC, ING 2020 (US$bn) 2019 (US$bn) coronavirus and the issuance is credible and impactful and and Societe Generale were the Source: EPFR Global and SG Cross Asset Research of a US$4bn multi-tranche aligned with the four core leads on the deal.

International Financing Review September 19 2020 7

3 IFR Top news 2351 p2-10.indd 7 18/09/2020 19:14:31 Top news Snowﬂake smashes US IPO records

Equities Data platform soars after pricing biggest – and most expensive – software IPO

BY ANTHONY HUGHES “Obviously the challenge here stock surge turbocharged by the HYBRIDûOFûTHEûMODIlEDû$UTCHû was that even at the low end of SMALLûFREE mOATûAREûEXISTINGû auction and a traditional SNOWFLAKE staged one of the most the original range it was still holders of shares. But it is one bookbuild. spectacular debuts ever going to be a record valuation that banks are - enthusiastically Bankers said the process aided witnessed in US equity capital for an IPO, so we were in or otherwise - responding to. price discovery and allowed MARKETS ûDOUBLINGûINûITSûlRSTû uncharted territory,” one ECM More direct listings that do not Unity to claw back control over NYSE session after raising banker close to the deal said. necessitate a capital raise are on pricing and allocations from the US$3.86bn in this year’s biggest “But there should be a better the way (Palantir Technologies underwriters. US IPO and the biggest US way to get an understanding of and Asana are listing directly There were early signs of software IPO of all time. valuation sensitivities.” later this month) while the wave that when Unity upped its Pricing at US$120 a share – or Venture capitalist Bill Gurley, a OFûSUCCESSFULû30!#ûmOATSû marketing range ahead of a lofty forward EV/sales multiple vocal critic of the traditional IPO provides another listing pricing to US$44–$48 from of 37 times – the fast-growing process and advocate for the alternative. US$34–$42 at launch, before data management platform was direct listings undertaken in Just last week saw one ultimately pricing well above widely considered the most recent years by the likes of Spotify response to such concerns when the range at US$52. richly valued IPO on record. and Slack, renewed his attack in UNITY SOFTWARE employed a “It’s non-traditional for sure, Yet its 111.6% debut surge to THEûWAKEûOFû3NOWmAKESûDEBUT MODIlEDû$UTCHûAUCTIONû but I think we are all getting US$253.93, aided by 40 times In a tweet, Gurley described designed by Goldman Sachs that more creative in trying to live in oversubscription and the THEû3NOWmAKEû)0/ûASûhlNALûPROOFû enabled institutional investors the current world,” a banker on capping of the stock sold at only of just how broken [the] process to directly enter their orders for the Unity trade said. 10% of the company, only ignited is” because it short-changed the shares in its U$1.2bn IPO priced At the US$52 offering price, more criticism about the company and handed billions of late on Thursday. Unity came at a multiple of EFlCIENCYûOFûTHEûTRADITIONALû)0/û DOLLARSûOFûPROlTSûTOûTHEû Unity had the discretion forward EV/sales of more than process, particularly for hard-to- underwriters’ favoured buyside whether to allocate to the 20, around the same mark that value “unicorns” (private clients. highest bidder or hand-select ûHIGH mYERSû$ATADOGûANDû companies valued at more than It’s a powerful criticism, even investors that would be long- Zoom Video Communications US$1bn). IFûTHEûMAJORûBENElCIARIESûOFûTHEû term supporters, essentially a went public. THG IPO sees private round go public Equities Fixed price and cornerstones dazzle but may be hard to replicate

BY ROBERT VENES available for stabilisation, so Coffee and tea maker JDE Peet’s Moulding. “It is quite unusual for trading needed to be positive. õBNû-AYûmOATûSHOWEDûSOCIALLYû a company of this size, where you !ûVALUATIONûlXEDûATûLAUNCHûANDû Everything else had been distanced IPOs could work in size have a fragmented pre-IPO validated by strong cornerstone wrapped up well before books and was aided by three investor base, but a very powerful participation meant the only closed on Tuesday after four days cornerstones putting in €761m. CEO and major shareholder who element of THE HUT GROUP’s £1.88bn COLLECTINGûORDERSû!ûlXEDû Swedish magazine subscriptions calls the shots,” said another London IPO that was left to chance valuation of £5.4bn had been set business Readly International person involved in the deal. was how the stock would trade. from the registration document traded up more than 10% just last He said that the genesis of the That turned out to be similarly stage and cornerstones buying week following its SKr720m IPO was that Hut Group had an stress-free even though the deal £615m of shares were secured 53M ûlXEDûPRICEû3TOCKHOLMû overwhelming response to a was the largest IPO for a UK before books opened. IPO. While Swiss smart meter private round, with clear price COMPANYûINûlVEûYEARSûANDûTHEû “The clarity and consistency over group Landis+Gyr’s SFr2.3bn indications. COMPANYûISûTHEûLARGESTûTECHûOUTlTûTOû the entire period around likely size 53BN ûmOATûINûûCAMEûWITHû list on the London Stock Exchange. and valuation really helped AûûFREE mOATûANDûNOûGREENSHOE PRIVATE TURNED PUBLIC The stock closed up 25% at investors get their heads around the h7EûHAVEûDONEûlXED PRICEû /NEûOFûTHEûREASONSûFORûTHEûlXED 625p on Wednesday’s debut story and where this should work deals before, and you have seen price structure, he said, is that VERSUSûTHEûPûlXEDû)0/ûPRICE û in the aftermarket,” said the head them in Scandinavia and smaller “eking out every last penny of with about 62m units changing of syndicate at one of the global deals in the UK, but you need a value was not the motivation”. It hands, representing 16.5% of the coordinators. “That simplicity certain type of seller, preferably helped, said the ECM head, that IPO offering. THG shares closed enabled a successful aftermarket.” an entrepreneur, who is there were pre-existing 17% above pricing on Thursday comfortable with price discovery shareholders who were and were still trading at a MORE TO COME? done in private,” said the head of cornerstones and had a good double-digit percentage The deal may not be easy to ECM at another of the global idea of a fair valuation and what premium on Friday morning. replicate, however, despite coordinators. they were prepared to pay. Unusually, especially for such a NEITHERûCORNERSTONESûNORûlXEDû The entrepreneur in this case Shareholders BlackRock (£300m large deal, there was no greenshoe pricing being new to ECM. was THG founder and CEO Matt cornerstone commitment) and

8 International Financing Review September 19 2020

3 IFR Top news 2351 p2-10.indd 8 18/09/2020 19:14:31 For daily news stories @ visit www.ifre.com

SURE-FIRE WINNERS IPO market in the past decade, !CCORDINGûTOû2ElNITIVûDATAû though multiples have more than Shopify CB sale proves going back to the late 1990s, doubled in just the past few years 3NOWmAKEûALSOûCAMEûWITHûTHEû as investors have placed a impossible to resist highest offering price of any IPO premium on companies with on record, with biotech outsized growth and recurring Structured Equity Bidding war yields 60% premium Genentech’s US$1.94bn offering revenues (from subscriptions in at US$97 in July 1999 holding the case of software). BY STEPHEN LACEY Shopify offers a rare the previous record. “If you believe in this easy combination of size, growth and The backing of Warren Buffett’s money/low interest-rate There are times in capital volatility that lent itself to the Berkshire Hathaway and environment that we have seen markets when companies do historic outcome. Salesforce, which each bought for the last decade there is something just because they The underwriters assumed a US$250m of new shares at the IPO, outsized demand for organic can. Shopify, the fast-growing credit spread of 225bp, deep in provided a strong endorsement of growth and where do we have Canadian e-commerce platform, investment grade territory, and 3NOWmAKESûPROSPECTS that organic growth? Software is threw its weight around by 40 vol at launch yet investors Though it rarely invests in EATINGûTHEûWORLD vûTHEûlRSTû raising US$1.8bn from a two- felt those were not tight enough IPOs, Berkshire separately banker said. part sale of equity and or volatile enough for their purchased 4m existing shares “This is not a new trend but the convertible debt at record-low taste. FROMû3NOWmAKESûFORMERû#%/ûATû relevance and scale of cloud funding costs. “Even in the case of a large, the offering price. businesses like AWS, Azure and These are small chits for growing pharma, vol comes 3NOWmAKESûlRST DAYûGAINSûSENTû 'OOGLEû#LOUDû;WHICHû3NOWmAKEû Shopify, which boasts a down when they launch a new its market cap to more than partly competes with] are what is US$111bn market cap, blistering drug,” said a second equity- US$70bn versus revenue of DRIVINGûAûLOTûOFûTHISûANDûEVENûlVEû growth and still volatile shares. linked banker. “Shopify is US$242m and net loss of to seven years ago few would have “The convert market has been something we really haven’t 53MûINûTHEûlRSTûHALFûOFûû dreamed those businesses would dying to get exposure to this seen before.” as investors were also drawn to its become as big as they have.” name,” said one equity-linked Second-quarter revenue fast growth (122% on the top-line Goldman Sachs, Morgan Stanley, banker involved in the was up 97% year-on-year, in the same period) and already JP Morgan, Allen & Co and underwriting. “Every quarter while 200-day realised volatility impressive scale after eight years CitigroupûLEDûTHEû lRMû Shopify exceeds expectations.” is 68, falling to 52 over in business. syndicate that shared in Goldman Sachs, Citigroup and 90 days. That said, 90-day vol Software IPOs have remained US$105.84m in underwriting Credit Suisse, the joint was in the low 30s early ALMOSTûSURE lREûWINNERSûINûTHEû FEESûFROMû3NOWmAKESû)0/ BOOKRUNNERSûONûTHEûlNANCING û this year so the leads’ were positively giddy on original pitch of 40 was not launching the two-part sale of unambitious. Merian Global Investors (£90m), as captive audience and fan club. US$1bn equity and US$800m Notably, Shopify did not well as sovereign wealth fund But a seller’s willingness to set lVE YEARûCONVERTIBLEûDEBTûONû purchase a derivative to Qatar Investment Authority the price on a take-it-or-leave-it Tuesday morning. offset dilution to fantastically (£75m) and tech specialist Janus basis is not that typical. You are The CB would be sold at a high share prices, as tech Henderson (£100m) were joined probably looking at a handful of lXEDûûCOUPONûANDûTHEû companies typically do. shortly before books opened by US names.” conversion price at a 52.5%– The fact it sold stock suggests tech fund Dragoneer Investment Including the cornerstone 57.5% premium to pricing of the MANAGEMENTûISûSATISlEDû Group (£50m). tranche, the top 10 accounts common stock, they said. By with its current valuation “It really helped to have the took 60% of the deal and the top 3pm, the asking price had gone and is less concerned about backing of a name like 20 took 85%. Around half of all up to 57.5%–60% at the same dilution. Dragoneer, a highly thought of orders were zeroed and there COUPON ûTHENûlNALISEDûTHATû As it stands, Shopify sold just West Coast tech fund,” said a UK was heavy scale-back for others evening at 0.125%, up 60%, the 1.3% of itself for the US$2bn banker involved. “Fixed pricing due to a multiple times covered highest premium ever on a equity infusion. is harder to replicate as it book. There was demand from vanilla CB in the US. The aftermath of the trade depends on what the owner tech specialists, global growth The equity piece printed as saw shares fall through the wants and whether they remain investors, sovereign wealth 1.1m shares at US$900, a 3.4% placing price to a close of heavily invested. I’m not sure it funds and generalist money. discount to Monday’s close of US$870.76 on Thursday, would work for everyone.” The Hut Group raised £920m, US$931.83. Shares were barely a 3.2% hit for buyers of the A senior ECM banker away which will be used to get net debt changed during marketing on equity. CB buyers are now from the deal described it as to 2.6 times Ebitda for the 12 Tuesday, ending the day at facing a premium of over essentially a private placement months to the end of June and US$929.39. 65% – but then they did know that became an IPO, with a seller fund growth. Secondary selling it was volatile. THATûHADûAûlXEDûPRICEûINûMINDû totalled £961m, with about 35% HIGH GRADE AND HIGH VOL One question now is what “It’s not unique, but like direct of share capital placed in the IPO. It’s hard to overstate the Shopify does with its US$6bn listings, it is applicable for a Citigroup, JP Morgan, Barclays impressiveness, and cash pile. Another is whether subset of clients but not to the and Goldman Sachs were global IMPLICATIONS ûOFûTHISûlNANCING bankers can convince other majority, including private equity coordinators and bookrunners Shopify’s shares would need companies to follow in Shopify’s who want maximum value,” he with HSBC, Jefferies and Numis. to pierce US$1,440, giving it a footsteps. said. “There are an increasing Rothschild advised THG. The base market capitalisation “We are pitching this number of companies that have fee is 1.5% with a discretionary approaching US$175bn, before lNANCINGûTOûEVERYûLARGE CAPû done private rounds and have a 0.5% incentive fee. CB holders could convert. TECH vûSAIDûTHEûlRSTûBANKER

International Financing Review September 19 2020 9

3 IFR Top news 2351 p2-10.indd 9 18/09/2020 19:14:31 Top news

Rabobank’s treasury offers ESG transparency

People & Markets Investors call for more detail on banks’ balance sheets and portfolios

BY TESSA WALSH little visibility beyond an annual CARBONûFOOTPRINTSûlTûALLOCATIONû and social versions of bonds, loans, report. strategies, and the availability of COMMERCIALûPAPER ûCERTIlCATESûOFû RABOBANK’s new sustainable Each issue will fund only one of this information is seen as deposit and derivatives and has lNANCINGûFRAMEWORKûRAISESûTHEû the sub-frameworks: renewable critical to investment decisions. been structured to align with the GAMEûFORûlNANCIALûINSTITUTIONSû energy, green commercial real “We need to have that latest EU standards. issuing ESG debt by clearly estate, healthcare and care information ... it’s absolutely )TûINCLUDESûTHEûhDOûNOûSIGNIlCANTû identifying the investments that facilities and Covid-19 crisis something that we push for and harm” principle and social ITûWILLûlNANCEûUPFRONTûINû support to SMEs. This separation something that is part of our safeguards of the EU’s Taxonomy, response to investors’ calls for allows investors to assess engagement process and a very and renewable energy projects greater transparency. materiality and impact, which are high priority for us,” an investor have also been categorised to align. The move puts sustainability different for each sector. said. The mapping exercise will also at the heart of the Dutch bank’s “As an investor, you only Rabobank issued a US$1bn help Rabobank to “green” its funding programme and will know what your money has SIX YEARûNON CALLûlVEûYEARûSENIORû balance sheet over time. allow its treasury to give been used for when you get the non-preferred green bond on “This is a logical step of getting investors more detail when green bond report a year after Thursday, using the renewable more insight into the balance sheet issuing a range of sustainable [the bond] has been issued. We energy sub-framework to fund a of a bank because there’s more debt and prepare its balance want to give that upfront and portfolio of projects. The deal, PRESSUREûONûlNANCIALûINSTITUTIONSû sheet for looming EU regulation. SAYûVERYûSPECIlCALLYûTHISûISûWHATû which is also Rabo’s biggest ESG and banks in particular to do more Rabobank has created four your money is going to be used bond ever, was priced at 73bp on sustainability. Ultimately it will new “sub-frameworks” that for,” said Maarten Biermans, over Treasuries in a momentous help to further green Rabobank’s detail the eligible proceeds for head of sustainable capital WEEKûFORûSUSTAINABLEûlNANCE balance sheet,” Biermans said. each sustainable fundraising markets at Rabobank. Second-party opinion from the outset, rather than Investors have been pushing GREENER FUNDING provider ISS highlighted each issuing generic ESG-labelled for more transparency to The framework will allow sub-framework’s contributions deals with a mixed use of UNDERSTANDûWHETHERûlNANCIALû Rabobank to issue more to the UN’s Sustainable proceeds that offer investors’ institutions’ portfolios and sustainable debt, including green Development Goals”. HK listings shrug off weak debut Equities Four secondary listings for combined US$3.5bn The response to Huazhu’s Goldman Sachs and JP Morgan will deal illustrates the shift. price the deal on September 22. BY FIONA LAU On Thursday, Nasdaq-listed Whereas Yum China’s retail The issuers are in a hurry to e-commerce solutions provider tranche was 52 times covered, avoid clashing with Chinese Four US-listed Chinese BAOZUN started taking institutional triggering a clawback that digital payment giant Ant Group’s companies were in the market orders for a Hong Kong offering of pushed the retail allocation record US$30bn A/H listing in last week to raise a combined up to US$486m based on its from 4% to 16.5%, Huazhu’s October and the US presidential US$3.5bn from Hong Kong Wednesday close of US$36.48. retail tranche was more than election on November 3. secondary listings, undeterred The Chinese companies are three times covered and no Nasdaq-listed Chinese data by a weak debut from YUM CHINA. rushing to list closer to home clawback was needed, according centre operator GDS is expected Last Wednesday, Nasdaq-listed amid rising US-China tensions, to people close to the deal. The to bring a US$1bn Hong Kong hotel chain operator HUAZHU despite the lacklustre debut of company earmarked 10% of the secondary listing to the market GROUP raised HK$6.06bn NYSE-listed Yum China, which deal for retail investors. in October, said people with (US$782m) from its Hong Kong operates the KFC, Pizza Hut and knowledge of the matter. secondary listing at HK$297 per Taco Bell brands in China. MOST EXPENSIVE Huazhu will start trading in share, representing a discount of Yum China shares fell 5.3% on Retail investors are clearly not Hong Kong on September 22. It 2.1% to its US close of US$39.16 their Hong Kong debut on Zai Lab’s target market. The sold 20.4m shares with the help per share the day before. September 10 and have traded biotech has set the maximum of sponsors CMB International Also on Wednesday, NYSE- below the issue price of HK$412 offer price for the retail offering and Goldman Sachs. listed delivery company ZTO per share since then. The stock at HK$648 per share with one ZTO is selling 45m primary EXPRESS opened books for a Hong closed at HK$402.60 last Thursday, board lot comprising 50 shares. shares or 5.4% of the enlarged Kong listing that could raise up 2.3% below the offer price. This makes the HK$32,400 price share capital. Sole sponsor to US$1.41bn based on its close “The weak debut of Yum China tag per lot the highest ever for a Goldman Sachs will price the deal of US$31.37 on Tuesday. Nasdaq- does affect retail investors’ appetite Hong Kong IPO. on September 22. listed biotech ZAI LAB also started for secondary listings. However, The company is selling 10.6m Baozun is selling 40m bookbuilding in the evening for institutional interest is unaffected primary shares, of which 92.7% primary shares with pricing a Hong Kong share sale of up to as long as the discount to the US are set aside for institutional slated for September 23. US$835m based on its Tuesday shares is big enough,” said a banker investors and 7.3% for retail Citigroup, CMB International and close of US$78.80. on one of the secondary listings. investors. Joint sponsors Citigroup, Credit Suisse are the sponsors.

10 International Financing Review September 19 2020

3 IFR Top news 2351 p2-10.indd 10 18/09/2020 19:14:31 IFR AWARDS 2020 PROCESS

We are inviting banks to pitch for the IFR LIMITEDûTOûAûMAXIMUMûOFûTWOûHOURSûPERû 10) Bond awards do not embrace structured Awards 2020. ASSETûCLASSû4HEûCONTENTSûOFûPITCHûMEETINGSû lNANCE ûWHICHûISûTREATEDûSEPARATELY WILLûBEûhONûTHEûRECORDv ûTHOUGHûCOMMENTSû 11) Bond and Bond House awards for We have made some changes to the CANûBEûMADEûhOFFûTHEûRECORDvûIFûSPECIlCALLYû &INANCIAL û33!2ûANDû#OVEREDûAREûCROSS awards process and dinner due to the STATEDûATûTHEûTIMEû-EETINGSûWILLûBEûHELDûINû CURRENCY CORONAVIRUSûPANDEMICû-OSTûSIGNIlCANTLYû November and December. û53û"ONDû(OUSEûCOMPRISESûALLû53ûDOLLARû WEûAREûEXTENDINGûTHEûPERIODûFORûELIGIBLEû ISSUANCEûINûTHEû53 ûINCLUDINGû9ANKEES DEALSûTOûTHEûENDûOFûTHEûYEARûANDûPUBLISHINGû 0ITCHûDOCUMENTSûSHOULDûBEûEMAILEDûTOû û/NLYû!ûANDû3%# REGISTEREDû53ûDOLLARû THEûWINNERSûONûOURûWEBSITEûONû&EBRUARYûû )&2!WARDS RElNITIVCOMûFORû'LOBAL û%-%!û ISSUESûAREûELIGIBLEûFORû53û"ONDûANDû9ANKEEû ANDûINûTHEû2EVIEWûOFûTHEû9EARûSUPPLEMENTû and Americas categories. Submissions for Bond awards. DATEDû&EBRUARYû !SIA 0ACIlCûCATEGORIESûSHOULDûBEûSENTûTOû û3%# REGISTEREDûANDû!ûDEALSûFROMû STEVEGARTON RElNITIVCOM issuers based in emerging markets are 7EûAREûRESTRICTEDûBYûTHEûONGOINGûPANDEMICû INCLUDEDûINû%MERGINGû-ARKETûCATEGORIESû BUTûWEûHOPEûTOûBEûABLEûTOûPRESENTûTHEû 0LEASEûINDICATEûFORûWHICHûAWARDSûYOUûAREû ALONGûWITHûDOMESTICûBONDûISSUES ûETC awards at an event in spring 2021. PITCHING ûGIVINGûAPPROPRIATEûCONTACTûDETAILS û2EGIONALû"ONDû(OUSEûAWARDSûAREûFORûANYû ISSUERSûINûTHEûRELEVANTûREGIONALûCURRENCIES û The awards year runs from November 16 &INALûSELECTIONSûWILLûBEûMADEûBYûTHEûSENIORû FORûEXAMPLEû%UROPEû)NVESTMENT 'RADEû 2019 to December 31 2020. EDITORIALûTEAMû Corporate Bond awards are for investment- GRADEûCORPORATESûINû%UROPEANûCURRENCIESû 4OûHELPûWITHûOURûSELECTIONS ûBANKS û .OTESûONûAWARDûCATEGORIES INCLUDINGû%URODOLLARS ADVISERSûANDûISSUERSûMAYûSUBMITûBRIEFû 1) Banks do not need to be active across û9ENû"ONDûAWARDSûINCLUDEû3AMURAIS WRITTENûPRESENTATIONSûALONGûWITHû THEûWHOLEûREGIONûTOûBEûCONSIDEREDûFORû û.ICHE -ARKETû"ONDûAWARDSûCOMPRISEû SUPPORTINGûDATAû)&2ûJOURNALISTSûWILLûALSOû REGIONALûHOUSEûAWARDSû"ANKSûDOûNOTûNEEDû bonds in non-core currencies or niche organise pitch meetings. TOûBEûACTIVEûINûALLûREGIONSûTOûQUALIFYûFORû MARKETSûINûMAJORûCURRENCIES ûSUCHûASû GLOBALûAWARDS Formosa. 0ITCHINGûISûENTIRELYûOPTIONALûANDû û/NLYûTRANSACTIONSûWHEREûAûlRMûISûACTINGû 18) SPAC IPO House focuses on CONSIDERATIONûFORûANûAWARDûWILLûNOTûBEû as a non-underwriting adviser are UNDERWRITINGûANDûSTRUCTURINGûOFûCASHûSHELLû LIMITEDûTOûADVISERSûORûISSUERSûTHATû CONSIDEREDûFORû#APITALû-ARKETSû!DVISER IPOs rather than M&A on the back end. PARTICIPATEûINûTHISûWAY 3) M&A Adviser covers transactions û3TRUCTUREDû%QUITYûCOMPRISESûEQUITY COMPLETEDûINûTHEûAWARDSûYEAR LINKEDûTRANSACTIONS ûINCLUDINGûTHOSEûWITHû All written pitches should reach us by û"ANKûFORû&INANCIALû)NSTITUTIONS û DERIVATIVEûCOMPONENTS ûANDûSTRUCTUREDû November 13. 'OVERNMENTSûANDû&INANCIALû3PONSORSû CASHûEQUITYûTRANSACTIONSû3TRUCTUREDû%QUITYû COVERSûALLûCAPITALûMARKETSûACTIVITYûACROSSû FEEDSûUPûINTOû%QUITYû(OUSEûAWARDS 7EûWILLûCONTINUEûTOûMONITORûTHEûMARKETû REGIONS ûFROMû,-%ûTOûRIGHTSûISSUES û û#ORPORATEûEQUITYûDERIVATIVESûFEEDûINTOû UNTILûTHEûENDûOFûTHEûYEARûANDûBANKSûMAYû PRIVATISATIONSûTOûCENTURYûBONDS û,"/SûTOû %QUITYû$ERIVATIVESû(OUSE SUBMITûADDENDAûTOûINCLUDEûSIGNIlCANTûDEALSû )0/SûANDû-!ûANDûEVERYTHINGûINûBETWEEN û2ESTRUCTURINGûINCLUDESûFORMALûDEBTû that price after submitting their pitches. û"ANKûFORû3USTAINABLEû&INANCEûWILLû RESTRUCTURINGSûANDûBALANCEûSHEETû espouse the creed it promotes having put restructurings. )NûYOURûPRESENTATIONSûFORûHOUSEûAWARDSû %3'SUSTAINABLEûISSUESûATûTHEûHEARTûOFûTHEû û-IDDLEû%ASTû"ONDû(OUSEûFEEDSûUPûINTOû YOUûMAYûWANTûTOûSUMMARISEûACHIEVEMENTSû lRM ûASûWELLûASûBEINGûACTIVEûINûRELATEDû %MERGINGû%-%!û"ONDû(OUSE INûTHEûAWARDSûYEARû&ORûINSTANCE CAPITALûMARKETûlNANCINGSû

(OWûHASûYOURûINSTITUTIONûPROGRESSEDû û%3'3USTAINABLEû(OUSEûWILLûRECOGNISEû )FûYOUûHAVEûANYûQUESTIONSûABOUTûTHEû OVERûTHEûCOURSEûOFûTHEûYEAR THEûPRE EMINENTûBANKûINû%3'SUSTAINABLEû AWARDSûPROCESS ûPLEASEûCONTACTû 7HATûSTRATEGICûGOALSûHAVEûBEENûMET underwriting. %DITORû-ATTHEWû$AVIESû (OWûHAVEûTHEYûBEENûACHIEVED û&ORû-! RELATEDûlNANCING ûLOANSûWILLû ûûû )NûWHATûWAYSûHASûYOURûINSTITUTIONû ONLYûBEûCONSIDEREDûIFûTHEû-!ûTRANSACTIONû MATTHEWDAVIES RElNITIVCOMû adapted to the trends that have driven HASûCOMPLETEDûINûTHEûAWARDSûYEAR ûASûITûISûATû $EPUTYû%DITORû/WENû7ILDû MARKETûACTIVITYûDURINGûTHEûYEAR THISûPOINTûTHEYûAREûFUNDEDû"ONDSûNEEDûTOû ûûû

(OWûHASûYOURûINSTITUTIONûSUPPORTEDû HAVEûPRICEDûWITHINûTHEûAWARDSûYEARûBUTûAREû OWENWILD RElNITIVCOM CLIENTSûTHROUGHûTHEûCORONAVIRUSûPANDEMIC NOTûCONTINGENTûONûTHEû-!ûHAVINGûALSOû 7HATûHASûBEENûNOTEWORTHYûABOUTûYOURû COMPLETED &ORû!MERICASûSPECIlCûQUESTIONSûCONTACTû DEALûROSTER ûWHETHERûINûTERMSûOFûSIZE û 8) Financing Package represents one 3TEPHENû,ACEYû GEOGRAPHICALûANDORûSECTORALûDIVERSIlCATION û lNANCINGûPROGRAMMEûACROSSûASSETûCLASSESû ûûû DEGREEûOFûINNOVATIONûORûCOMPLEXITY BUTûALLûPARTSûNEEDûNOTûHAVEûBEENûEXECUTEDû STEPHENLACEY RElNITIVCOMû CONCURRENTLY )Nû!SIA 0ACIlCûCONTACTû3TEVEû'ARTON û 0RESENTATIONSûSHOULDûINCLUDEûINDIVIDUALû 9) Pandemic Response Financing is for a ûûû SUMMARIESûOFûTHEûMAINûRELEVANTû SINGLEûORûPACKAGEûOFûTRANSACTIONSûBYûANûISSUERû STEVEGARTON RElNITIVCOMû TRANSACTIONSû3EPARATEûDOCUMENTSûSHOULDû in response to the coronavirus pandemic. BEûSUBMITTEDûFORûEACHûMAJORûASSETûCLASS û,EVERAGEDûANDû-ID -ARKETû,OANSûFEEDû $ETAILSûONûTHEûEVENTûWILLûBEûAVAILABLEûATû 0ITCHûMEETINGSûWITHû)&2ûJOURNALISTSûAREû UPûINTOû,OANû(OUSEûAWARDS www.ifrawards.com.

International Financing Review September 19 2020 11

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TOP AWARDS .ORTHû!MERICAû&INANCIALû"ONDû(OUSEû LOAN AWARDS Bank of the Year .ORTHû!MERICAû&INANCIALû"ONDû !MERICASû,OANû(OUSEû Bond House %UROPEû&INANCIALû"ONDû(OUSEûû .ORTHû!MERICAû,OANû %QUITYû(OUSEû %UROPEû&INANCIALû"ONDûû ,ATINû!MERICAû,OANû ,OANû(OUSEûû SSAR Bond House %-%!û,OANû(OUSEû Derivatives House SSAR Bond %-%!û,OANû %MERGINGû-ARKETSû"ONDû(OUSEû Covered Bond House !SIA 0ACIlCû,OANû(OUSEû %3'3USTAINABLEû(OUSE Covered Bond !SIA 0ACIlCû,OANû #APITALû-ARKETSû!DVISERû .ORTHû!MERICAû(IGH 9IELDû"ONDû(OUSEû .ORTHû!MERICAû,EVERAGEDû,OANû M&A Adviser .ORTHû!MERICAû(IGH 9IELDû"ONDû %-%!û,EVERAGEDû,OANû Restructuring Adviser %UROPEû(IGH 9IELDû"ONDû(OUSEû .ORTHû!MERICAû-ID -ARKET0RIVATEû "ANKûFORû&INANCIALû)NSTITUTIONSû %UROPEû(IGH 9IELDû"ONDû $EBTû,OANû "ANKûFORû'OVERNMENTSû %-%!û-ID -ARKET0RIVATEû$EBTû,OANû "ANKûFORû&INANCIALû3PONSORSû "ANKûFORû3USTAINABLEû&INANCE STRUCTURED FINANCE AWARDS North America Structured Finance ESG/SUSTAINABLE AWARDS House %3'3USTAINABLEû"ONDû ISSUER AWARDS North America ABS Issue %3'3USTAINABLEû,OANû SSAR Issuer North America RMBS Issue %3'3USTAINABLEû%QUITY3TRUCTUREDû &INANCIALû)SSUERû North America CMBS Issue %QUITYû)SSUE Corporate Issuer %-%!û3TRUCTUREDû&INANCEû(OUSEû %3'3USTAINABLEû/PINIONû0ROVIDER %3'3USTAINABLEû)SSUER %-%!û3TRUCTUREDû&INANCEû)SSUEû Financing Package !SIA 0ACIlCû3TRUCTUREDû&INANCEû)SSUEû Pandemic Response Financing EQUITY AWARDS .ORTHû!MERICAû%QUITYû(OUSEû EMERGING MARKETS AWARDS North America IPO BOND AWARDS %MERGINGû%-%!û"ONDû(OUSEû .ORTHû!MERICAû3ECONDARYû%QUITYû)SSUEû US Bond House %MERGINGû%-%!û"ONDû ,ATINû!MERICAû%QUITYû(OUSEû US Bond -IDDLEû%ASTû"ONDû(OUSEû ,ATINû!MERICAû%QUITYû)SSUEû Yankee Bond ,ATINû!MERICAû"ONDû(OUSEû %-%!û%QUITYû(OUSEû %UROû"ONDû(OUSEû ,ATINû!MERICAû"ONDû %-%!û)0/û %UROû"ONDû ,ATINû!MERICAû,OCALû#URRENCYû"ONDû %-%!û3ECONDARYû%QUITYû)SSUEû Yen Bond House Asia Bond House !SIA 0ACIlCû%QUITYû(OUSEû Yen Bond Asia Bond !SIA 0ACIlCû)0/û 3TERLINGû"ONDû(OUSEû !SIA 0ACIlCû3ECONDARYû%QUITYû)SSUEû 3TERLINGû"ONDû SPAC IPO House Swiss Franc Bond House RESTRUCTURING AWARDS 53û-ID -ARKETû%QUITYû(OUSEû Swiss Franc Bond %-%!û2ESTRUCTURINGû Niche-Market Bond House Americas Restructuring Niche-Market Bond Asia Restructuring STRUCTURED EQUITY AWARDS .ORTHû!MERICAû)NVESTMENT 'RADEû !MERICASû3TRUCTUREDû%QUITYû(OUSEû Corporate Bond House !MERICASû3TRUCTUREDû%QUITYû)SSUEû .ORTHû!MERICAû)NVESTMENT 'RADEû DERIVATIVES AWARDS %-%!û3TRUCTUREDû%QUITYû(OUSEû Corporate Bond %QUITYû$ERIVATIVESû(OUSEû %-%!û3TRUCTUREDû%QUITYû)SSUEû %UROPEû)NVESTMENT 'RADEû#ORPORATEû Credit Derivatives House !SIA 0ACIlCû3TRUCTUREDû%QUITYû(OUSEû Bond House Interest Rate Derivatives House !SIA 0ACIlCû3TRUCTUREDû%QUITYû)SSUEû %UROPEû)NVESTMENT 'RADEû#ORPORATEû &OREIGNû%XCHANGEû$ERIVATIVESû(OUSEû Bond

12 International Financing Review September 19 2020

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Anthony IFR profiles Airlines Gutman Citigroup’s have needed has been promoted Jane Fraser, the Scot emergency to co-head EMEA who will become the restructuring work investment banking at first woman to lead and bankers predict Goldman, alongside a major US bank in stormy months ahead Gonzalo Garcia February as firms in more sectors seek help

FRONT STORY RESULTS US banks still reaping FICC rewards JP Morgan says Q3 trading up 20% from year ago

US banks will continue to power results on VERYûSTRONGûPERFORMANCEûTHEREûASûWELL vû BARCLAYSûSAIDûITSû1ûTRADINGûREVENUESûAREû THEûSTRENGTHûOFûlXEDûINCOME ûCURRENCIESûANDû SHEûSAID LIKELYûTOûBEûDOWNûFROMûRECORDûLEVELSûINûTHEû COMMODITIESûTRADINGûASûSTRONGûTRENDSûTHATû *0û-ORGANSûSTRENGTHûISûDEMONSTRATINGûTHEû lRSTûANDûSECONDûQUARTERS ûASûVOLATILITYûHASû CREATEDûRECORDûPERFORMANCEûINûTHEûlRSTûHALFû POWERûOFûSCALEûTHATûANALYSTSûHAVEûWARNEDû REDUCEDûh4HEREFORE û)ûTHINKûITSûSAFEûTOû CONTINUEDûINTOûTHEûTHIRDûQUARTER COULDûTILTûTHEûSCALESûINûTRADINGûDOMINANCEû ASSUMEûTHATûMARKETSûANDû#)"ûREVENUESû ,EDûBYûJP MORGAN ûALLûTHREEûMONEYûCENTREû FORûAûDECADE WOULDûHAVEûAûCORRESPONDINGûMODERATION vû BANKSûLASTûWEEKûSAIDûTRADINGûREVENUEûWILLûBEû h)NûTHEûMARKETSûBUSINESS ûWEVEûBEENû "ARCLAYSû#%/û*ESû3TALEYûSAID UPûSUBSTANTIALLYûINûTHEû*ULY 3EPTEMBERû INVESTINGûINûTALENTûANDûTECHNOLOGYûTOû 'IVENûTHEûSTRENGTHûINûTRADINGûTHISûYEARûITSû QUARTERû4HEûUPBEATûPROJECTIONSûCOMEûAFTERû ENHANCEûTHEûCLIENTûEXPERIENCEûWITHûMOREû NOûSURPRISEûTHATûTRADERSûAREûLIKELYûTOûSEEûTHEû ANALYSTSûHADûPREVIOUSLYûBEENûWARNEDûTHATû SOPHISTICATEDûEXECUTIONûTOOLS vû0IEPSZAKû BIGGESTûBOOSTûINûINCENTIVEûPAYû&)##ûTRADERSû TRADINGûREVENUEûWOULDûREVERTûTOûTHEûMEANûORû SAIDûh7EVEûBEENûINVESTINGûINûCASHûEQUITIESû COULDûSEEûBONUSESûFORûûRISEûnû DECREASEûSUBSTANTIALLY ANDûPRIMEûBROKERAGEûANDûREALLYûMAKINGû FROMûAûYEARûAGO ûACCORDINGûTOûCOMPENSATIONû *0û-ORGANûSAIDûMARKETSûTRADINGûREVENUEû GREATûPROGRESSûTHEREv CONSULTINGûlRMû*OHNSONû!SSOCIATESû%QUITIESû COULDûBEûUPûABOUTûûINûTHEûTHIRDûQUARTERû !Tû#ITI û#&/û-ARKû-ASONûSAIDûTRADINGûHASû TRADERSûSHOULDûSEEûAûnûRISEûINûVARIABLEû FROMûAûYEARûAGOûASûCLIENTûACTIVITYûREMAINEDû REMAINEDûSTRONGûSOûFARûINûTHEûTHIRDûQUARTER û PAY ûITûPREDICTED STRONG ALTHOUGHûTHEûLEVELûHASûCOMEûOFFûTHEûHIGHSû h7EûSAWûROBUSTûCLIENTûACTIVITYûINû*ULYûANDû SEENûINûTHEûlRSTûHALFûOFûTHEûYEAR DEAL FLOW FIZZLES INûTHEûEARLYûPARTûOFû!UGUST vû*0û-ORGANûCHIEFû #ITIûHASûAûLOWERûBARûTOûGETûOVERûTOOû)TSû &EESûFROMûINVESTMENTûBANKINGûAREûEXPECTEDû lNANCIALûOFlCERû*ENNIFERû0IEPSZAKûSAIDûATûAû &)##ûREVENUEûWASû53BNûINûTHEûTHIRDû TOûBEûUPûSLIGHTLY ûBUTûDRAGGEDûDOWNûBYûWEAKû VIRTUALûlNANCIALûCONFERENCEûh3EPTEMBERûISû QUARTERûOFû ûmATûFROMûTHEûYEARûBEFORE û PERFORMANCEûINû-! ALWAYSûANûIMPORTANTûMONTHûANDûPERHAPSû WHILEûREVENUEûFROMûEQUITYûTRADINGûWASû "OF!ûSAIDûITSûINVESTMENTûBANKINGûFEESû MOREûSOûTHISûYEARû3OûWEûSTILLûHAVEûAûFEWû DOWNû SHOULDûBEûUPûBETWEENûûANDû WEEKSûTOûGOû"UTûMYûBESTûVIEWûATûTHISûPOINTû BANK OF AMERICAûSAIDûITSû1ûTRADINGûREVENUEû h#%/ûCONlDENCEûISûCOMINGûBACK vû WOULDûBEûABOUTûûUPûYEAR OVER YEARûFORû SHOULDûBEûUPûBETWEENûûANDûûACROSSû 0IEPSZAKûSAIDûh7HENû#%/ûCONlDENCEû THEûMARKETSûBUSINESSv &)##ûANDûEQUITIESûFROMûAûYEARûAGO COMESûBACK ûWELLûSEEû-!v CITIGROUPûISûSEEINGûAûSIMILARûSURGEû4HEû 3OûFARûTHISûYEARûTHEûVALUEûOFû-!ûDEALSûISû

BANKûSAIDûREVENUEûFROMû&)##ûANDûEQUITIESû MIXED PROSPECTS FOR 2020 BONUSES; EXPECTED % DOWNûûCOMPAREDûWITHûLASTûYEAR ûWHILEû TRADINGûWOULDûBEûUPûINûTHEûhLOWûDOUBLEûDIGITû CHANGE IN VARIABLE COMPENSATION VS 2019 THEûNUMBERûOFûDEALSûISûDOWNûûGLOBALLY PERCENT ûRANGEvûINûTHEûTHIRDûQUARTER "UTûUNDERWRITINGûHASûBEENûBUOYANTûnûDRIVENû )FûTHEûTRENDûHOLDSûITûWILLûEXTENDûAûRECORDû Retail/commercial banking BYûRECORDûDEBTûISSUANCEûINûTHEûlRSTûHALFûOFûTHISû RUNûFORûBANKûTRADINGûINûû*0û-ORGANûISû Bank management YEAR ûANDûFOLLOWEDûUPûWITHûAûSURGEûINûEQUITYû FACINGûAûTOUGHûBENCHMARKû)TSû&)##ûREVENUEû Asset management ISSUANCEûTHISûMONTH ûESPECIALLYûINûTHEû53

INûTHEûTHIRDûQUARTERûOFûûWASûUPûûFROMû Hedge funds "ARCLAYSû3TALEYûSAIDûEQUITYûCAPITALû ûWHILEûEQUITYûREVENUEûWASûDOWNû MARKETSûWILLûBENElTûFROMûANûhEXTRAORDINARYû Private equity EXPLOSIONvûINûTHEûRAISINGûOFûEQUITYûCAPITAL û Advisory “GREAT PROGRESS” MUCHûOFûITûFROMûTECHNOLOGYûANDû30!#ûlRMS *0û-ORGANûALSOûSAIDûINVESTMENTûBANKINGûFEESû Underwriting *OHNSONûFORECASTûBONUSESûTHISûYEARûFORû AREûCOMINGûINûSTRONGERûTHANûTHEûBANKûWASû Equities sales/trading UNDERWRITINGûBANKERSûSHOULDûBEûUPûnû EXPECTINGûANDûSHOULDûBEûUPûhMID SINGLEû FICC sales/trading FROMûAûYEARûAGOû"UTûADVISORYûBANKERSûAREû

DIGITSûYEAR OVER YEAR vû0IEPSZAKûSAIDûh!NDû -25 -20 -15 -10 -5 0 5 10 15 20 25 30 LIKELYûTOûSEEûAûnûDROPûINûVARIABLEûPAY û THATSûAGAINSTûTHEûTHIRDûQUARTERûOFû û *OHNSONûSAID Source: Johnson Associates September 14 report; chart shows outside WHICHûWASûTHEûBESTûTHIRDûQUARTERûEVERû3Oû of predicted range Philip Scipio

International Financing Review September 19 2020 13

4 IFR PM 2351 p13-24.indd 13 18/09/2020 19:45:53 h4AKEûITûONû"EûYOURSELF ûANDûDONTû TRYûTOûOUTMACHISMOûANYONEv PREVIOUS ADVICE TO INCOMING CITIGROUP CEO JANE FRASER FROM HER HUSBAND, P18

Fed unveils bank stress test 2.0 4HEûUS FEDERAL RESERVEûRELEASEDûSCENARIOSûFORû OVERûTHEûCOURSEûOFûTHEûNEXTûFEWûQUARTERSû LARGERûTRADINGûBOOKS vû(OROWITZûSAIDû4HATû AûSECONDûROUNDûOFûBANKûSTRESSûTESTSûLASTûWEEKû REMAINSûUNUSUALLYûHIGH ûANDûTHESEûTWOû WOULDûHITûALLûTHEûMAJORûBANKS ûINCLUDINGû ANDûSAIDûITûWILLûMAKEûAûDECISIONûONûWHETHERû ADDITIONALûTESTSûWILLûPROVIDEûMOREû 'OLDMAN û-ORGANû3TANLEYûANDûWELLS FARGO TOûALLOWûBANKSûTOûBOOSTûDIVIDENDSûORûRESUMEû INFORMATIONûONûTHEûRESILIENCYûOFûLARGEû STOCKûBUYBACKSûBYûTHEûENDûOFûTHEûMONTH BANKS vûSAIDû&EDûVICE CHAIRû2ANDALû1UARLES “AS SOON AS WE CAN...” 4HEûlRSTûROUNDûOFûSTRESSûTESTSûFOUNDûTHATû 5NDERûTHEûlRSTûSCENARIOûTHEû (OROWITZûSAIDûHEûEXPECTSûTHEû&EDûTOûEXTENDû LARGEûBANKSûWEREûWELLûCAPITALISEDûUNDERûAû UNEMPLOYMENTûRATEûPEAKSûATûûATûTHEûENDû LIMITSûONûBANKûCAPITALûPLANSûnûBUYBACKSûANDû RANGEûOFûHYPOTHETICALûSTRESSûSCENARIOS ûBUTû OFû ûUPûFROMûûINûTHEûPREVIOUSûTEST ûANDû DIVIDENDSûnûATûLEASTûTHROUGHûTOûTHEûFOURTHû NONEûOFûTHEMûMATCHEDûTHEûACTUALûSTRESSûEVENTû THENûDECLINESûTOûABOUTûû'ROSSûDOMESTICû QUARTER CREATEDûBYûTHEûGLOBALû#OVID ûPANDEMICûANDû PRODUCTûDECLINESûBYûABOUTûTHREEûPERCENTAGEû "ANKSûEXECUTIVESûSAIDûATûANûINVESTORû SUBSEQUENTûECONOMICûSHUTDOWNû!Nû POINTSûFROMûTHEûCURRENTûTHIRDûQUARTERû CONFERENCEûLASTûWEEKûTHEYûAREûEAGERûTOû ADDITIONALûROUNDûOFûSTRESSûTESTSûISûBEINGû THROUGHûTOûTHEûFOURTHûQUARTERûOFûNEXTûYEAR RESUMEûBUYBACKûPLANSûIFûANDûWHENûTHEYûGETû PERFORMEDûDUEûTOûTHEûCONTINUEDûUNCERTAINTYû /VERALL ûTHEûSEVERELYûADVERSEûSCENARIOû THEûALLûCLEARûFROMûTHEû&ED FROMû#OVID ûTHEû&EDûSAID looks a little tougher than the scenario 4HEûEIGHTûLARGESTûBANKSûVOLUNTARILYûHALTEDû ,ARGEûBANKS ûINCLUDINGûJP MORGAN û INCORPORATEDûINûTHEû*UNEûSTRESSûTEST ûSAIDû THEIRûSTOCKûBUYBACKûPROGRAMMESûINû-ARCHû CITIGROUP ûBANK OF AMERICA ûGOLDMAN SACHSûANDû #ITIGROUPûBANKûANALYSTû+EITHû(OROWITZû4HEû THROUGHûTOû*UNEûTOûPRESERVEûCAPITALûTOûSUPPORTû MORGAN STANLEY ûWILLûBEûTESTEDûAGAINSTûTWOû UNEMPLOYMENTûRATEûISûWORSE ûWHICHûISû THEû53ûECONOMYû4HEû&EDûINû*UNEûTOLDûLARGEû SCENARIOSûFEATURINGûSEVEREûRECESSIONSû4HEû PROBABLYûLESSûFAVOURABLEûFORûBANKSûWITHû BANKSûTOûSUSPENDûBUYBACKSûINûTHEûTHIRDû RESULTSûWILLûBEûRELEASEDûBYûTHEûENDûOFûTHISû LARGERûCONSUMERûANDûCREDITûCARDûBOOKS ûSUCHû QUARTERûANDûCAPPEDûDIVIDENDSûATûTHEûEXISTINGû YEAR ASû*0û-ORGANûANDû"OF! LEVEL ûATûLEASTûTHROUGHûTHEûTHIRDûQUARTER h!LTHOUGHûTHEûECONOMYûHASûIMPROVEDû h4HEûMARKETûDECLINEûISûWORSE ûWHICHû h7EûHAVEûAûLOTûOFûEXCESSûCAPITALûûTHEû MATERIALLYûOVERûTHEûLASTûQUARTER ûUNCERTAINTYû COULDûTHROWûAûCURVEûBALLûTOûBANKSûWITHû CAPITALûRATIOSûAREûHIGHERûNOWûANDûCONTINUEû Orcel vs Santander set for March court showdown !ûHIGH PROlLEûROWûBETWEENû3PAINSûSANTANDER HEARINGûINûAû-ADRIDûCOURTûTHEYûDIDûNOTûWANTû WEûSAYûTHATûITûISûNOTûTHEûCONTRACT vû&ATASûTOLDû ANDû!NDREAû/RCELûWILLûGOûTOûAûCOURTû ANûOUT OF COURTûSETTLEMENT REPORTERSûAFTERûTHEûONE HOURûHEARING SHOWDOWNûINû-ARCHûAFTERûTHEYûFAILEDûTOûREACHû !SûAûRESULT ûTHEûJUDGEûSAIDûTHEûDISPUTEû /RCELSûLAWYERû!LVAROû2EMON ûWHOûDIDûNOTû AûDEALûOVERûTHEûWITHDRAWALûOFûANûOFFERûTOû WOULDûNOWûGOûTOûTRIALûSTARTINGûONû-ARCHû RESPONDûTOûAûREQUESTûFORûCOMMENT ûHADû MAKEûTHEû)TALIANûBANKERûCHIEFûEXECUTIVE 3ANTANDERûCHAIRMANû!NAû"OTINûWILLûBEû EARLIERûTOLDûTHEûCOURTûh7HATûWEûASKûFORûlRSTû /RCEL ûAMONGû%UROPESûTOPûINVESTMENTû AMONGûTHEûWITNESSESûCALLEDûTOûSPEAK ûATûTHEû OFûALLûISûTHATûTHEûCONTRACTûBEûFULlLLEDv BANKERS ûISûCLAIMINGûBREACHûOFûCONTRACTûBYû REQUESTûOFû/RCELSûLEGALûTEAM THEûEUROZONESûTHIRD LARGESTûBANKûBYûMARKETû !XELû7EBER ûCHAIRMANûOFû5"3 ûWASûALSOû TWO KEY WORDS VALUE ûANDûSUINGûFORûõMû53M ADDEDûTOûTHEûLISTûOFûWITNESSES -UCHûOFûTHEûTRIALûWILLûREVOLVEûAROUNDûWHETHERû (EûWASûOFFEREDûTHEûROLEûOFû#%/ûINû3EPTEMBERû *OSEû-IGUELû&ATAS ûAûLAWYERûFORû3ANTANDER û Aû3EPTEMBERûûFOUR PAGEûOFFERûLETTERûWASûAû ûBUTû3ANTANDERûCHANGEDûITSûMINDûTHEûNEXTû SAIDûITûHADûNOTûASKEDûFORû/RCELûBEûPUTûONûTHEû BINDINGûJOBûCONTRACT ûASû/RCELûSAYS ûORûAûNON *ANUARY ûSAYINGûITûCOULDûNOTûMEETûHISûPAYû list of witnesses because what was at stake BINDINGûINITIALûOFFER ûASûTHEûBANKûSAYS DEMANDS ûINûAûRAREû5 TURNûINVOLVINGûSUCHûAû WASûNOTûTHEûFACTS ûBUTûLEGALûISSUESûANDûTHEû h(OWûMUCHûMEANINGûCANûBEûATTACHEDûTOû HIGH LEVELûAPPOINTMENTûATûAûMAJORûBANK )TALIANûWOULDûNOTûTHEREFOREûSPEAKûATûTHEûTRIAL THOSEûTWOûWORDSûRECRUITMENTûANDû ,AWYERSûFORûBOTHûPARTIES ûWEARINGûMASKSû h/URûTHESISûISûVERYûSIMPLE ûTHEREûISûANûOFFERû APPOINTMENTû!NDûTHATSûALLû)MûSAYING vû TOûRESPECTû#OVID ûRULES ûTOLDûAûPRELIMINARYû LETTERûTHATûTHEYûSAYûISûTHEûJOB ûCONTRACTûANDû JUDGEû*AVIERû3ANCHEZû"ELTRANûTOLDûTHEûCOURT Who’s moving where…

Greg Thorne has joined in the CIB coverage HOULIHAN LOKEY has industrial technology WELLS FARGO as a group. Thorne was hired Richard Hoh as M&A responsible for managing director previously at Deutsche a managing director deal sourcing and in its technology, Bank, where he also in its industrials execution across the media and telecoms focused on software group in New York, industrial technology coverage group, investment banking. where he will mainly sector. Prior to BMO, where he will focus on focus on electronic Hoh worked at software investment components as well Jefferies, advising on banking. Thorne as environmental transactions across the will work out of San technologies. Hoh diversiﬁed industrials Francisco and report joined Houlihan from sector. He began his to Gerry Walters, BMO Capital Markets, career at Goldman head of technology where he was head of Sachs in 2000.

14 International Financing Review September 19 2020

4 IFR PM 2351 p13-24.indd 14 18/09/2020 19:46:00 People &Markets

TOûBEûHIGHERûEACHûQUARTER vûSAIDû"OF!ûCHIEFû EXECUTIVEû"RIANû-OYNIHANûh"UTûASûSOONûASû Caixa/Bankia deal stokes Europe WEûCANûGETûBACKûINûTHEûMARKET ûWEûWILLv -OYNIHANûSAIDûHEûWASûASûMUCHûINûTHEû bank M&A chatter DARKûONûHOWûMUCHûITûWILLûBEûALLOWEDûTOûBUYû Spain’s CAIXABANKûHASûTAKENûOVERûBANKIA in an RETAILûANDûINVESTMENTûBANKûWOULDûHAVEûTOûBEû BACKûASûINVESTORSûh/BVIOUSLY ûWEVEûGOTûTOû ALL SHAREûDEALûTHATûWILLûCREATEû3PAINSûBIGGESTû PAREDûBACKûSOûITûDIDNTûHAVEûAûMONOPOLY û DOûAûSTRESSûWORKû3OûITûWILLûBEûWHATûITûIS vûHEû DOMESTICûBANKûWITHûMOREûTHANûõBNûINû WHILEûSOMEûWEALTHYûCLIENTSûWOULDûALSOûBEû SAID ASSETSûnûANDûRAISEDûEXPECTATIONSûFORûMOREû LIKELYûTOûLEAVE ûTHEûPERSONûSAID %UROPEANûBANKINGû-!ûACTIVITY 4HEûBOARDûOFû5"3ûMETûTOûDISCUSSûSTRATEGYû #AIXA"ANKûVALUEDûSTATE OWNEDû"ANKIAûATû LASTûWEEK ûBUTûAû#REDITû3UISSEûMERGERûWASû “Although the economy has õBNû53BN ûANDûTHEûBANKSûSAIDûONû NOTûONûTHEûOFlCIALûAGENDA ûTHEûPERSONûSAID improved materially over the &RIDAYûTHEYûEXPECTEDûANNUALûCOSTûSYNERGIESû 4HEREûAREûOTHERûMOREûLIKELYûDEALS ûANDû last quarter, uncertainty over OFûABOUTûõMûTHATûWILLûBEûFULLYûACHIEVEDû REGULATORSûAREûKEENûFORûDEALSûACROSSû%UROPEû the course of the next few BYû ûANDûNEWûANNUALûREVENUESûOFûABOUTû TOûIMPROVEûPROlTABILITYûANDûRESILIENCE quarters remains unusually õMûOVERûAûPERIODûOFûlVEûYEARS 4HEû%UROPEANû#ENTRALû"ANKûINû*ULYûTOLDû high” 4HEûLENDERSûWILLûHAVEûAûCOMBINEDû POTENTIALûBUYERSûTHEYûWOULDûNOTûBEû VALUATIONûOFûMOREûTHANûõBN PUNISHEDûWITHûTOUGHERûCAPITALûRULESûANDû 4HEûDEALûHASûBEENûDESCRIBEDûASûAûMERGER û COULDûGETûAûBOOSTûFROMûTREATMENTûOFû %VENûIFûCAPITALûREQUIREMENTSûWEREûTOû BUTûITûISûINûEFFECTûAûTAKEOVERûBYû#AIXA"ANKûASû hBADWILLvû#HANGESûTOûRULESûALLOWûBANKSûTOû MOVEûHIGHER û#ITIûANALYSTû(OROWITZûSAIDû ITûISûALMOSTûTHREEûTIMESûASûBIGûASû"ANKIAûINû RECOGNISEûACCOUNTINGûBADWILLûTOûSTRENGTHENû MOSTûBANKSûWOULDûSTILLûRUNûAûHEALTHYû TERMSûOFûMARKETûVALUEûANDûALMOSTûTWOûTIMESû AûBUYERSûABILITYûTOûCOVERûPROVISIONSûORû CUSHIONûTOûTHEIRûMINIMUMûCAPITALûRATIOS û BYûASSETSû#AIXA"ANKûSHAREHOLDERSûWILLû RESTRUCTURINGûCOSTS LEAVINGûTHEûPOTENTIALûFORûBUYBACKSûTOûRESUMEû INITIALLYûREPRESENTûûOFûTHEûCAPITALûOFûTHEû h2EGULATORSûHAVEûBEENûINCREASINGLYû INûTHEûlRSTûQUARTER NEWûENTITY ûANDû"ANKIAûWILLûHOLDû SUPPORTIVEûOFûBANKûCONSOLIDATIONûASûAûWAYûTOû Philip Scipio 3INCEûNEWSûOFûTHEûMERGERûlRSTûEMERGED û IMPROVEûPROlTABILITY vû#ITIGROUPûBANKû SHARESûINû"ANKIAûHAVEûRISENûBYûABOUTû û ANALYSTSûSAIDûINûAûNOTEûONû&RIDAY WHILEû#AIXA"ANKûSHARESûHAVEûGAINEDû h"ANKû-!ûCOULDûBEûAûWAYûTOûIMPROVEû 3ANTANDERûPROMISEDûTOûPAYûhUPûTOvûõMû 2O%ûANDûUTILIZATIONûOFûBADWILLû7EûEXPECTû OFûAûõMûPACKAGEûTHATû/RCELûWASûDUEûTOû KICK-START FOR M&A? DOMESTICûBANKûCONSOLIDATIONûBEFOREûCROSS RECEIVEûINûFUTUREûYEARSûFROMûHISûEMPLOYERûATû "ANKSûACROSSû%UROPEûAREûSTRUGGLINGûTOûCOPEû BORDER ûANDûMOSTûLIKELYûINû3PAIN û)TALY û5+û THEûTIME û5"3 WITHûRECORDûLOWûINTERESTûRATESûANDûTHEû ANDû'ERMANY ûGIVENûMARKETûSTRUCTURE 4HEûLETTERûSAIDû/RCELûWOULDûMAKEûHISûhBESTû ECONOMICûDOWNTURNûSPARKEDûBYûTHEû#OVID FRAGMENTATION ûANDûPOTENTIALûFORûBRANCHû EFFORTSvûTOûCAPûTHATûCOSTûBYûGETTINGûTHEû3WISSû ûPANDEMIC ûLEADINGûANALYSTSûTOûPREDICTû REDUCTIONûINûSOUTHERNû%UROPE vûTHEYûSAID BANKûTOûCONTRIBUTEûSOMEûOFûIT MOREûTIE UPSûTOûCUTûCOSTS !NDREWû,OWE ûANûANALYSTûATû"ERENBERG û (OWEVER û5"3ûREFUSEDûANDû/RCELûTHENûTOLDû 4HEREûWASûEVENûTALKûLASTûWEEKûTHATû3WISSû SAIDûMOREûCONSOLIDATIONûCOULDûCOMEûINû 3ANTANDERûHEûWOULDûNOTûACCEPTûLESSûTHANû banks UBSûANDûCREDIT SUISSEûCOULDûCONSIDERûAû 3PAIN ûINCLUDINGûAûMERGERûBETWEENûUNICAJA õM MERGER ANDûLIBERBANK ûANDûBUYINGûSABADELLûWOULDû /RCEL ûWHOûWASûHEADûOFû5"3SûINVESTMENTû 5"3ûSTAFF ûWORKINGûUNDERûCHAIRMANû!XELû ALSOûMAKEûSTRATEGICûSENSEûFORûBBVA or BANK ûRESIGNEDûFROMûTHEû3WISSûBANKûWHENû 7EBER ûHADûEXAMINEDûTHEûPOSSIBILITYûOFûAû SANTANDERûnûBUTûBOTHûCOULDûBEûIMPEDEDûBYû HEûWASûOFFEREDûTHEû3ANTANDERûJOB TIE UPûWITHû#REDITû3UISSEûINûRECENTûMONTHSû THEIRûWEAKûCAPITALûPOSITIONS ûREDUCINGûTHEû .EITHERû/RCELûNORû"OTINûWEREûINûCOURTûFORû BUTûAûDEALûWASûNOWûCONSIDEREDûINTERNALLYûASû lNANCIALûMERITSûOFûAûDEAL -ONDAYSûHEARING ûWHICHûWRAPPEDûUPûAFTERû UNLIKELY û2EUTERSûREPORTED ûCITINGûAûPERSONû ,OWEûSAIDûTHEREûISûLIKELYûTOûBEûFURTHERû FOCUSINGûONûISSUESûSUCHûASûPROCEDURALûEVIDENCEû FAMILIARûWITHûTHEûMATTER DOMESTICûCONSOLIDATIONûAMONGû)TALIANû ANDûWHICHûWITNESSESûWOULDûBEûACCEPTED 4HEûCHANCESûOFûAû5"3ûTAKEOVERûOFû#REDITû BANKS Emma Pinedo, Jesus Aguado 3UISSEûHADûFADEDûBECAUSEûTHEûCOMBINEDû3WISSû Jesus Aguado, Steve Slater, Oliver Hirt

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Rachida Mourahib has contribute to ESG Boutique investment banking experience, been appointed head research, led by Xavier bank DC ADVISORY advising clients on of fixed-income ESG Desmadryl. Mourahib has hired Tom M&A and capital and green research in joined HSBC in 2006 Krasnewich as a markets financings. HSBC GLOBAL ASSET as an ESG analyst managing director in Krasnewich has also MANAGEMENT. and has worked as its industrial group, worked at BlackArch Mourahib is based an equity and credit based in Chicago. Partners, BMO Capital in Paris and will be analyst, specialising Krasnewich joined Markets and Deutsche part of GAM’s credit in pharmaceuticals DC from Nomura, Bank. research team. She and local authorities. where he was head of will report to Tina She was previously diversified industrials. Radovic, head of at BNP Paribas Asset He has more than 25 credit research, and Management. years of investment

International Financing Review September 19 2020 15

4 IFR PM 2351 p13-24.indd 15 18/09/2020 19:46:10 Bellwether Bellwether: n. From the practice of placing a bell around the 34!9).'û7)4(û5"3 ûNEVERûMINDûYOGAû neck of a castrated ram so that it might lead its ﬂock Rather than ORûLEARNINGûAûFOREIGNûLANGUAGE ûITSû take public QUITEûCLEARûWHATû!XELû7EBERSûBEENû "!.+3û!2%û429).'ûTOûLUREûSTAFFûBACKûTOûTHEûOFlCEûWITHû transport, DOINGûDURINGûLOCKDOWNû4HEû5"3û VARIOUSûPERKSû'OLDMANûISûOFFERINGûFREEûFOODûATûITSûIN he’d gone CHAIRMANûHASûCOMEûUPûWITHûTHEû HOUSEûCANTEEN ûWHILEû5"3ûHASûTAKENûTHINGSûUPûAûGEARûBYû all Marlon CRAZYûIDEAûOFûMERGINGûWITHûARCH PURCHASINGûBIKESûTOûENABLEûITSû,ONDONûBANKERSûTOûVISITû RIVALû#REDITû3UISSE CLIENTSûWITHOUTûHAVINGûTOûUSEûPUBLICûTRANSPORT Brando 6IRTUALLYûNO ONEûINû:URICHûTAKESû 4HEûBANKûHASûPURCHASEDûû"ROMPTONSûnûAûFOLDINGû THEûIDEAûSERIOUSLYûANDûMOSTûRECKONû VARIETYûOFûBIKEûTHATûCANûCOSTûASûMUCHûASûa ûnûANDû ITSûAûWHEEZEûTHATûWILLûBEûlLEDû TOLDûSTAFFûINûAûMEMOûTHATûITûHOPESûTOûSEEûhMANYvûUSINGû UNDERûTHEûSAMEûCATEGORYûASûLASTûYEARSûFEEBLEûATTEMPTûATûAû THEM COMBINATIONûBETWEENû$EUTSCHEû"ANKûANDû#OMMERZBANK )TSûGREATû02 ûBUTûITûWILLûBEûINTERESTINGûTOûSEEûHOWû h4HISûWAYûITûSHOWSûTHEYVEûTRIEDûTOûDOûSOMETHINGû MANYûOFûITSûINVESTMENTûBANKERSûDECIDEûTOûRIDEûTHEûBIKES û DOMESTICALLYûSOûTHEYûCANûHOOKûUPûWITHûAûFOREIGNûBANKû WHICHûAREûSPONSOREDûBYû.EO û5"3SûCROSS ASSETûRESEARCHû INSTEAD vûSAIDûAûMOLE BUSINESS "UTû"ELLWETHERûWOULDûLOVEûTOûSEEûTHEûMERGERûHAPPENû "ROMPTONSûMAYûBEûPOSH ûBUTûTHEYREûSTILLûBICYCLESû %ARLIERûTHISûMONTHû3WISSûREGULATORû&INMAûOPENEDû 7HATEVERûHAPPENEDûTOûTHEû&LAMINGû&ERRARIS û&ORGETûLONGû ENFORCEMENTûPROCEEDINGSûAGAINSTû#REDITû3UISSEûINûTHEû LUNCHESûANDûSPORTSûCARS ûFORûTHEû-!ûRAINMAKERûINûû CONTEXTûOFûTHEûhOBSERVATIONûMATTERvûnûAûWONDERFULû ITSûALLûABOUTûGRABBINGûAûFREEûBUTTYûATû'OLDMANûBEFOREû EUPHEMISMûFORû#REDITû3UISSESûDECISIONûTOûHIREûAû PEDALLINGûOVERûTOû-AYFAIRûTOûBEûRIDICULEDûBYûAûHEDGEûFUND SURVEILLANCEûCOMPANYûTOûSPYûONûITSûFORMERûHEADûOFûWEALTHû MANAGEMENTû)QBALû+HANûAFTERûHEûQUITûFORû5"3 -!9"%û4(%û7!9ûTOûSPARKûINTERESTûISûTOûMAKEûITû )MAGINEûAûWORLDûWHEREû#REDITû3UISSEûMERGESûWITHû COMPETITIVEû"ELLWETHERûWOULDûLIKEûTOûPROPOSEûAûRACEû ITSûARCH RIVALûANDûISûTHENûlNEDûBYû&INMAû5NDERûTHATû AROUNDû"ROADGATEû#IRCLEûBETWEENû5"3û#%/û3ERGIOû SCENARIOû5"3ûCOULDûENDûUPûHAVINGûTOûPAYûHALF ûANDû+HANû %RMOTTI ûRIDINGûAû.EOû"ROMPTON ûANDû7ILLIAMû6EREKER û COULDûENDûUPûWITHûANûEVENûBIGGERûEMPIRE THEûNEWûCHAIRMANûOFû3ANTANDERû5+ûANDûFORMERLYûHEADû OFûINVESTMENTûBANKINGûATû5"3 ûRIDINGûONEûOFû,ONDONSû 4(!.+&5,,9 û.%73û(!3ûREACHEDû"ELLWETHERûTHATûTHEûALPHA UBIQUITOUSû3ANTANDERûCYCLE HIREûBIKES MALEûBANKINGûARCHETYPEûISûNOTûCOMPLETELYûDEADû3PIESûONû 0ERHAPSû!NDREAû/RCELûnû6EREKERSûOLDûBOSSûATû5"3û "ISHOPSGATEûSAYûTHEûHEADûOFûINVESTMENTûBANKINGûATûONEû WHOSEûEGOûSUFFEREDûAûSERIOUSûPUNCTUREûAFTERûHISûBIDûTOû ,ONDON BASEDûlRMûCOPPEDûAûSPEEDINGûTICKETûLASTûWEEKûONû BECOMEû#%/ûOFû3ANTANDERûFELLûTHROUGH ûBUTûONLYûAFTERûHEû HISûlRSTûDAYûBACKûATûTHEûOFlCEû2ATHERûTHANûTAKEûPUBLICû HADûTOLDû%RMOTTIûHEûWASûONûHISûBIKEûnûCOULDûOVERSEEûTHEû TRANSPORT ûHEDûGONEûALLû-ARLONû"RANDOûANDûDUSTEDûOFFûANû CONTEST OLDûMOTORCYCLEûHEûHADNTûRIDDENûFORûMOREûTHANûAûDECADEû Who’s moving where…

NOMURA has hired Anita McBain has MIZUHO Webster has joined NATIXIS has before moving to David Cannon as joined CITIGROUP INTERNATIONAL has Mizuho in convertible promoted Meriem London to cover head of collateralised as head of ESG made a number of bonds sales after Smida to global head financial sponsors in mortgage obligation research for EMEA. hires in its convertible 22 years at Morgan of financial sponsors 2019. He previously trading as it seeks She will join from bonds business. Andy Stanley. Both will coverage and Christine worked at Salomon to expand agency M&G Investments, Bourne has joined help strengthen the Coudray to global Smith Barney and mortgage-backed where she was from Deutsche Bank Asia-Pacific business head of banks and private equity investor securities business. head of responsible to expand trading as well as building out international public Actis. Coudray joined Cannon was head of investment and across EMEA. Before the EMEA franchise. sector coverage. Natixis in 2007. MBS sales and trading environmental and Deutsche, Bourne was Smida, based in at MUFG and has also social governance. at Morgan Stanley for London, joined Natixis worked at RBS and eight years and UBS in 2015, working in UBS. for seven years. Ross Asia-Pacific M&A

16 International Financing Review September 19 2020

4 IFR PM 2351 p13-24.indd 16 18/09/2020 19:46:13 People &Markets Garcia, Gutman get Goldman EMEA IBD gig

GOLDMAN SACHSûHASûAPPOINTEDûGonzalo Garcia ONûITSûaBNûMERGERûWITHû6ANTIVûANDû-ERLINû TELECOMSûTEAMû3HEûJOINEDû'OLDMANûINûû ANDûAnthony Gutman ASûCO HEADSûOFû ONûITSû53BNûSALEûTOû"LACKSTONE ANDûWASûNAMEDûPARTNERûINû INVESTMENTûBANKINGûINû%UROPE û-IDDLEû%ASTû 4HISûYEARûHEûHASûADVISEDû)NFORMA û&LUTTERû Barry O’Brien WILLûMOVEûINTOûTHEû#//ûROLEû ANDû!FRICA ANDû#OMPASSûONûSOMEûOFûTHEûBIGGESTû5+ûEQUITYû FORûTHEû4-4ûBANKINGûTEAMûALONGSIDEû*UNGû 4HEûROLESûAREûNEWûPOSITIONS ûALTHOUGHû RAISINGSûANDûISûCURRENTLYûADVISINGû)!'ûONûITSû -INû/"RIENûWILLûBEûBASEDûINû.EWû9ORKû(Eû -ARCû.ACHMANNûWASûPREVIOUSLYûGLOBALûCO PLANNEDûaBNûRIGHTSûISSUEûANDû4ESCOûONûTHEû WASûPREVIOUSLYûCO HEADûOFûTHEûBANKSû4-4û HEADûOFûTHEûINVESTMENTûBANKINGûDIVISIONûINû 53BNûSALEûOFûITSûBUSINESSûINû4HAILAND -!ûTEAM ûANDûJOINEDû'OLDMANûINûûANDû ,ONDON ûUNTILûHEûMOVEDûTOû.EWû9ORKûATûTHEû 'ARCIAûISû'OLDMANSûCO HEADûOFû,ATINû WASûNAMEDûPARTNERûINû STARTûOFûTHISûYEARûTOûCO HEADûTHEûSECURITIESû !MERICA ûHEADûOFû)"$ûFORû,ATINû!MERICAûANDû 'OLDMANûALSOûMADEûCHANGESûATûTHEûTOPû DIVISION FORûTHEûLASTûSIXûYEARSûCO HEADûOFûGLOBALû OFûITSûNATURALûRESOURCESûTEAMûAFTERû'ARCIASû 'UTMANûISûGLOBALûCO HEADûOFûINVESTMENTû NATURALûRESOURCESû(EûJOINEDû'OLDMANûINû MOVE ûWHICHûHASûLEFTûSuhail Sikhtian as BANKINGûSERVICESûANDûHASûBEENûCO HEADûOFû5+û ûANDûWASûNAMEDûPARTNERûINû SOLEûHEADûOFûTHEûBUSINESS ûWHICHûHEû INVESTMENTûBANKINGûFORûEIGHTûYEARSû(EûWASû 4HEûDUALû#HILEAN"RITISHûCITIZENûHASûSPENTû HASûCO HEADEDûFORûSIXûYEARSû(EûJOINEDû NAMEDûPARTNERûINûûAFTERûJOININGû ûYEARSûINûBANKINGû(EûHASûBEENû 'OLDMANûINûûANDûBECAMEûAûPARTNERû 'OLDMANûINûûWHENûHEûWASûPOACHEDû INSTRUMENTALûINûBUILDINGû'OLDMANSû INû FROMû#ITIGROUP ûWHEREûHEûSPENTûSEVENûYEARSû INFRASTRUCTUREûBUSINESSûANDûEXPANDINGûITSû Brian Bolster ANDûFrancesco Pascuzzi were ANDûWASûONEûOFûITSûSTARû-!ûBANKERS RENEWABLEûENERGYûTEAM PROMOTEDûTOûHEADSûOFûNATURALûRESOURCESû 'UTMANûHASûSPENTûûYEARSûINûINVESTMENTû 'OLDMANûPROMOTEDûKim Posnett to take one INVESTMENTûBANKINGûINûTHEû!MERICASûANDû BANKINGûAFTERûTRAININGûASûAûLAWYERûATû OFû'UTMANSûROLESûASûCO HEADûOFûINVESTMENTû %-%! ûRESPECTIVELYû4HEYûWILLûRETAINû &RESHlELDSû(EûHASûWORKEDûONûMAJORûDEALSû BANKINGûSERVICES ûALONGSIDEû-ATTû'IBSON RESPONSIBILITIESûASûCO HEADSûOFûPOWERûANDû INCLUDINGûADVISINGû3HIREû0HARMACEUTICALSûONû 0OSNETTûWASûPREVIOUSLYûCO CHIEFûOPERATINGû INFRASTRUCTUREûINVESTMENTûBANKING ITSûaBNûSALEûTOû4AKEDA ûADVISINGû7ORLDPAYû OFlCERûOFûTHEûGLOBALûTECHNOLOGY ûMEDIAûANDû Steve Slater

Jarden keeps Oz build-out going

JARDENûHASûCONTINUEDûITSûBUILD OUTûINû SERVICESû(EûJOINEDûFROMû'OLDMAN ûWHEREûHEû FOURûSENIORûEQUITYûCAPITALûMARKETSûBANKERSû !USTRALIAûWITHûTHREEûSECTORûBANKERSûJOININGû WORKEDûINûITSûlNANCIALûINSTITUTIONSûGROUPûINû INû-AY ûINCLUDINGû5"3û%#-ûHEADû2OBBIEû THEû+IWIûBOUTIQUE ,ONDONû$YONûHASûWORKEDûINû-! ûlNANCINGû 6ANDERZEILûANDû'OLDMANûBANKERû3ARAHû Reeny Paraskeva ISûJOININGûASûMANAGINGû ANDûACROSSûBANKING ûlNTECH ûINSURANCE ûANDû 2ENNIE DIRECTORûANDûHEADûOFûGENERALûINDUSTRIALSû WEALTHûANDûASSETûMANAGEMENT !IDANû!LLEN ûPREVIOUSLYû5"3SûCO HEADûOFû 0ARASKEVAûWASûPREVIOUSLYûATû5"3ûINû.EWû Mitch Schauer WILLûJOINûFROMû5"3ûASû !USTRALIAûANDû.EWû:EALANDûINVESTMENTû 9ORK ûAFTERûSTARTINGûHERûCAREERûINû!USTRALIAû MANAGINGûDIRECTORûANDûHEADûOFûREALûESTATEû BANKING ûJOINEDûAûMONTHûLATER ûUNDERSCORINGû WITHû5"3ûANDû'OLDMANû3ACHS (EûHASûADVISEDûLISTEDûANDûUNLISTEDûREAL ESTATEû *ARDENSûAMBITIONSûTOûEXPANDûBEYONDû%#-û 3HEûPREVIOUSLYûLEDû5"3ûCONSUMERûPRODUCTSû GROUPSûONû-! ûRESTRUCTURINGS ûFOLLOW ONû ANDûBUILDûAûFULL SERVICEûINVESTMENTûBANKûINû ANDûRETAILûEQUITYûCAPITALûMARKETSûTEAMûINû EQUITYûRAISINGSûANDû)0/S !USTRALIA .EWû9ORKûANDûMOSTûRECENTLYûWASûRESPONSIBLEû 4HEûNEWûARRIVALSûADDûTOûTHEûBUILD OUTûOFû 4HISûMONTHû*ARDENûALSOûHIREDûFrank Sarks FORûBROADENINGûlNANCIALûSPONSORSûCOVERAGE *ARDENSûINVESTMENTûBANKINGûTEAMûINû ASûDIRECTORûFORûINSTITUTIONALûEQUITIES ûAFTERûû Julien Dyon ISûALSOûJOININGû*ARDENûASûAû !USTRALIAû)TûANNOUNCEDûBOLDûPLANSûTOûEXPANDû YEARSûATû-ACQUARIEû'ROUP MANAGINGûDIRECTORûANDûHEADûOFûlNANCIALû ACROSSûTHEû4ASMANû3EAûWITHûTHEûHIRINGûOFû Thomas Blott

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

DEUTSCHE BANK MIZUHO has hired BANK OF AMERICA David Ng has JP MORGAN CITIGROUP has has hired Pieter van Hampus Falth to has hired Wenjie joined HAITONG is adding six hired Jennifer Taylor Blommestein from work on its European Zhang as president INTERNATIONAL new members from Bank of America Credit Agricole to syndicate desk, of its China business. as vice-chairman to its operating to run compliance for work in its sovereign, sources said. Falth Zhang has also been of investment committee including its Institutional Clients supranational and will focus on ﬁnancial appointed the bank’s banking, tasked Thasunda Brown Group. Taylor will start agency debt capital institutions and Shanghai branch with strengthening Duckett, who runs in December and be markets team, sources emerging markets. He manager, subject to investment banking consumer banking; based in the UK. said. Blommestein previously worked at regulatory approval. client coverage Troy Rohrbaugh, joined Credit Agricole UBS for 11 years. Zhang joined from and increasing who heads global in October 2017 HSBC, where he was collaboration between markets; and Teresa and worked in SSA co-head of global the investment bank Heitsenrether, head of origination. banking. and other businesses. securities services.

International Financing Review September 19 2020 17

4 IFR PM 2351 p13-24.indd 17 18/09/2020 19:46:13 h-YûBESTûVIEWûATûTHISûPOINTûWOULDûBEûABOUT ûUPûYEAR OVER YEARûFORûTHEûMARKETSûBUSINESSv JP MORGAN FINANCE CHIEF JENNIFER PIEPSZAK, P13

PROFILE: JANE FRASER New Citi chief has no need to outmachismo men

)Nû&EBRUARY û*ANEû&RASERûWILLûBECOMEûTHEûlRSTûWOMANûTOûLEADûAûMAJORû 4HATûHARDûEDGEûHASûBEENûSHOWNûINûHERûROLESûATû#ITI ûWHICHûINCLUDEDû 7ALLû3TREETûBANKûWHENûSHEûTAKESûOVERûASû#%/ûOFûCITIGROUP AûYEARûCOMMUTINGûBETWEENûFAMILYûINû,ONDONûANDûWORKûINû.EWû9ORK û 4HEû3COTûCOULDûHAVEûBEENûPUSHINGûINTOûTHEûTOPûRANKSûATû'OLDMANû ASûWELLûASûYEARSûBASEDûINû3Tû,OUISûANDû-IAMI 3ACHS ûWHEREûSHEûSTARTEDûHERûCAREERûASûANû-!ûBANKERûINû,ONDON û &RASERûHASûPREVIOUSLYûSAIDûSHEûWASûPROUDûOFûHERûRISEûUPûTHEûRANKSû BUTûSHEûMOVEDûTOû-C+INSEYûANDûTHENûJOINEDû#ITIûûYEARSûAGOû WHILEûKEEPINGûAûhFAIRLYûNORMALvûFAMILYûLIFE BECAUSEûSHEûLIKEDûITSûGLOBALûREACHûANDûDIVERSITY (ERûHUSBANDûISû!LBERTOû0IEDRA ûWHOûWASûBORNûINû#UBAûANDûWASûAû &RASER û ûHASûWONûPLAUDITSûFORûBREAKINGû7ALLû3TREETSûGLASSûCEILING û SENIORûINVESTMENTûBANKERûATû'OLDMANûANDû"ANKûOFû!MERICA ûANDûWASû ANDûSHEûWILLûBRINGûAûNEWûPERSPECTIVEûTOû#ITI ûWHEREûSHEûHASûBUILTûAû RUNNINGû$RESDNERû+LEINWORTSûGLOBALûBANKINGûBUSINESSûWHENûHEû TRACKûRECORDûFORûRESTRUCTURINGûANDûlXINGûUNDERPERFORMINGûAREAS RETIREDûINû 3HEûWASû#ITISûHEADûOFû-!ûANDûSTRATEGYûFROMûûTOû ûFORû 7ORRIESûABOUTûAûLACKûOFûWORKLIFEûBALANCEûWASûONEûOFûTHEûREASONSû EXAMPLEûnûINSTRUMENTALûINûITSûSALEûOFûALMOSTû53TRNûOFûASSETSûANDû &RASERûLEFTû'OLDMANûEARLYûINûHERûCAREER ûANDûDIDNTûRETURNûAFTERûTWOû BUSINESSESûDURINGûTHEûlNANCIALûCRISIS YEARSûWORKINGûATûAûSECURITIESûBROKERAGEûINû-ADRIDûANDûTHENûGETTINGû 3TILL ûSHEûFACESûSTIFFûCHALLENGESûATû#ITIû0ERHAPSûTHEûBIGGESTûISûTOû ANû-"!ûFROMû(ARVARDûINû IMPROVEûTHEûRISKûANDûCONTROLûFRAMEWORKû53ûREGULATORSûSTILLûWANTû h)ûTHOUGHTûABOUTûGOINGûBACKûTOû'OLDMAN û)DûLOVEDûITûTHEREûANDûTHEû IMPROVEMENTSûINûTHATûAREA ûINCLUDINGûTECHNOLOGYûANDûPROCEDURESû CALIBREûOFûTHEûPEOPLE vû&RASERûSAIDûATûAûWOMENûINûBUSINESSûNETWORKû #URRENTû#%/û-IKEû#ORBATûACKNOWLEDGEDûTHATûWHENûANNOUNCINGûHISû EVENTûINû-IAMIûINûû"UTûSHEûWASûPUTûOFFûBYûHOWûFEWûWOMENû DEPARTURE ûSAYINGûITûWASûAûSTRATEGICûPRIORITYûnûBUTûWOULDûBEûhAûMULTI THEREûWEREûATû'OLDMAN ûANDûINûBANKINGûINûGENERAL YEARûEFFORTvûANDûBESTûLEDûBYû&RASER h!NDûNONEûOFûTHEMûWEREûTHATûHAPPYû4HEûWOMENûWHOûWEREûINû &RASERûSINGLEDûITûOUTûASûAûPRIORITYûINûAûMEMOûTOûSTAFFûTOOûh7EûNEEDû THEIRûLATEûS ûANDûMANYûOFûTHEûMEN ûREALLYûDIDNTûHAVEûMUCHûOFûAûLIFEû TOûMOVEûFROMûREMEDIATINGûTOûFUNDAMENTALLYûTRANSFORMINGûOURûRISKû 4HEYûWEREûVERYûSUCCESSFULûANDûTHEYûWEREûBRILLIANT ûBUTûITûWASûTOUGHû ANDûCONTROLûENVIRONMENT vûSHEûSAID ANDû)ûDIDNTûWANTûTHAT vû&RASERûRECALLED 4HEREûAREûOTHERûPROBLEMSûFACINGûTHEû 3HEûJOINEDû-C+INSEY ûWHICHûALLOWEDûAû THIRDûBIGGESTû53ûBANKû)TSûRETURNSûLAGû MOREûPREDICTABLEûLIFESTYLEû3HEû THOSEûOFûRIVALSûANDû&RASERûISû STAYEDûFORûAûDECADE ûWORKINGû EXPECTEDûTOûCUTûCOSTSûANDûJOBSû PART TIMEûFORûlVEûYEARSûASûAû NEXTûYEAR ûWHILEûCRITICSûSAYû partner after the birth of #ITIûSTILLûDOESûNOTûADDûUPû HERûTWOûSONSû3HEûCO TOûTHEûSUMûOFûITSûPARTS AUTHOREDûAûBOOKûnûh2ACEû h7ITHOUTûDOUBT ûTHEû FORûTHEû7ORLDû biggest challenge is 3TRATEGIESûTOû"UILDûAû TAKINGûAûDYSFUNCTIONALû 'REATû'LOBALû&IRMvûnû MANAGEMENTûGROUPûANDû WHICHûREPORTEDLYû MAKINGûITûINTOûAûREALû caught the attention of COMPANY vûSAIDû/DEONû #ITIûEXECUTIVEû-ICHAELû #APITALûBANKûANALYSTû$ICKû +LEIN ûANDûSHEûWASûLUREDûTOû "OVEû(EûCAUTIONED ûHOWEVER û THEû53ûBANKûINû THATûITûWOULDûTAKEûTIME h)ûJOINEDû#ITIûBECAUSEû)ûLOVEû "OVEûSAIDû#ITIûNEEDSûTOûKICK STARTû GLOBALûORGANISATIONS ûTHEûGLOBALITYûOFû GROWTHûWITHûITSûABILITYûTOûMAKEûLOANSû THEûPLACEûANDûTHEûDIVERSITY vû&RASERûLATERûSAID h'IVENûHERûRECORDûSHEûISûTHEûRIGHTûPERSONûTOûMEETû !FTERûJOININGûTHEûCORPORATEûANDûINVESTMENTûBANKû THISûCHALLENGE vûHEûSAID INû,ONDON û&RASERûHEADEDû-!ûANDûSTRATEGYûFROMûûTOûûANDû 4HEûSCOPEûOFûTHEûTASKSûORûSCRUTINYûISûUNLIKELYûTOûFAZEû&RASER û SAIDûSHEûHADûhANûEXTRAORDINARYûTIMEûANDûûLEARNEDûAûHUGEûAMOUNTv HOWEVERû3HEûRECALLEDûTHEûADVICEûHERûINVESTMENTûBANKERûHUSBANDû &RASERûTHENûMOVEDûTOûRUNû#ITISûPRIVATEûBANKûANDûINûûGOTûTHEû GAVEûHERûlVEûYEARSûAGOûWHENûSHEûWASûAPPOINTEDû,ATINû!MERICAûCHIEFû JOBûOFûlXINGûITSû53ûMORTGAGEûBUSINESSû3HEûRANû,ATINû!MERICAûFROMû ANDûARRIVEDûINû-EXICOûTOûADDRESSûSTAFFûATû"ANAMEX ûUNUSEDûTOûAû ûTOûûANDûLASTûYEARûWASûAPPOINTEDûPRESIDENTûOFû#ITIûANDûHEADû FOREIGNERûORûAûFEMALEûRUNNINGûIT OFûGLOBALûCONSUMERûBANKING ûLININGûHERûUPûFORûTHEû#%/ûSUITE h4AKEûITûONû"EûYOURSELF ûANDûDONTûTRYûTOûOUTMACHISMOûANYONEû &RASERûSAIDûINûTHEûPASTûSHEûNEEDEDûENCOURAGEMENTûTOûPUSHûFORû 4HENûYOUûCANûJUSTûGETûONûWITHûIT vû&RASERûRECALLEDûLATERûh4HATûWASû MOREûSENIORûROLESûBECAUSEûSHEûALWAYSûLIKEDûTOûBEûhûPREPAREDvû VERYûGOODûADVICEv BUTûADAPTEDûAFTERûAûCOLLEAGUEûENCOURAGEDûHERûTOûTAKEûAûMOREû PRAGMATICûVIEW “GROUNDBREAKING” 4HATûINCLUDEDûANûINVITATIONûTOûPLAYûGOLFûWITHû4IGERû7OODSûWHENû (AVINGûAûFEMALEû#%/ûATûAûTOPû7ALLû3TREETûBANKûMAYûBEûLONGûOVERDUE û SHEûRANû#ITISûPRIVATEûBANKû!FTERûBEINGûBORNûINû3Tû!NDREWSûSHEûWASû BUTû#ORBATûSAIDû&RASERSûAPPOINTMENTûWASûhAûPOINTûOFûPRIDEûFORûALLûOFû /+ûATûGOLF ûBUTûSAIDûSHEûFEAREDûh)ûMIGHTûKILLûSOMEONEûOFFûTHEûlRSTûTEEû USûANDûGROUNDBREAKINGûFORûOURûINDUSTRYv IFû)ûSHANKûTHEûBALLv &RASERûISûPERSONABLEûANDûENGAGING ûANDûCURRENTûANDûFORMERû &RASERûACCEPTEDûANDûPLAYEDûnûAFTERûHERûSONûTOLDûHERûNOTûTOûWORRYûASû COLLEAGUESûCREDITûHERû3COTTISHûUPBRINGINGûFORûAûSENSEûOFûHUMOUR û EVERYONEûWOULDûBEûWATCHINGû7OODS CONSERVATISMûWITHûMONEYûMANAGEMENTûANDûTOUGHNESS Steve Slater, Philip Scipio

18 International Financing Review September 19 2020

4 IFR PM 2351 p13-24.indd 18 18/09/2020 19:46:18 People &Markets Advisory revenues at Rothschild rise despite Covid 2EVENUESûATûROTHSCHILD@SûCOREûADVISORYû EQUITYûADVICE ûROSEûûTOûõMû4HEû &ORûTHEûlRSTûHALF ûTOTALûADVISORYûREVENUESû BUSINESSûROSEûûINûTHEûSECONDûQUARTERûTOû COMPANYûDOESûNOTûBREAKûOUTûQUARTERLYû WEREûDOWNûûATûõMû'ROUPûREVENUESû õMûASûWEAKERûAPPETITEûFORûMERGERSûANDû REVENUESûFROMûEACHûPARTûOFûTHEûBUSINESS FELLûûTOûõM ACQUISITIONSûWASûOFFSETûBYûhSIGNIlCANTûLEVELSvû -UCHûOFûTHEû-!ûFEESûRELATEDûTOûDEALSûTHATû 2OTHSCHILDûSAIDûMARKETûCONDITIONSû OFûlNANCINGûADVISORY WEREûANNOUNCEDûBEFOREûTHEûOUTBREAKûOFûTHEû REMAINEDûhCHALLENGINGûANDûUNPREDICTABLEv û h&OLLOWINGûAûVERYûSTRONGûSTARTûTOûTHEûYEARû CORONAVIRUSûPANDEMICû2OTHSCHILDûSAIDûSOMEû MAKINGûITûDIFlCULTûTOûFORECASTûPROSPECTSûFORû INû-! ûOURûGLOBALûADVISORYûBUSINESSû TRANSACTIONSûWEREûPOSTPONEDûORûCANCELLEDû THEûREMAINDERûOFûTHEûYEARû)TûSAIDûTHEREûWEREû PIVOTEDûTOWARDSûADVISINGûCLIENTSûONûLIQUIDITYû but a large part of its pipeline was SIGNSû-!ûWASûhBEGINNINGûTOûRETURNvûBUTû ANDûlNANCINGûMATTERS ûWHICHûINûTURNû COMPLETED STILLûEXPECTSûOVERALLû-!ûREVENUESûTOûBEû SUPPORTEDûREVENUEûPERFORMANCEûINûTHEû .OTABLEûDEALSûINCLUDEDûADVISINGû'ERMANYû DOWNûONûLASTûYEAR SECONDûQUARTER vûSAIDûEXECUTIVEûCHAIRMANû ONûITSûõBNûSUPPORTûPACKAGEûFORû$EUTSCHEû h7EûAREûEXPERIENCINGûENCOURAGINGûLEVELSû !LEXANDREûDEû2OTHSCHILD ,UFTHANSA ûAIRLINEûOPERATORû)!'ûONûITSû OFûACTIVITYûSOûFARûINûTHEûTHIRDûQUARTER û 4HEû0ARIS LISTEDûlRMûSAIDû-!ûREVENUESû PROPOSEDûõBNûRIGHTSûISSUEûANDûTHEû ALTHOUGHûTHISûPROGRESSûREMAINSûDEPENDENTû FELLûûINûTHEûlRSTûHALFûOFûTHEûYEARûTOû PRIVATEûEQUITYûCONSORTIUMûTHATûACQUIREDû ONûIMPROVINGûMARKETûSTABILITY vûSAIDû$Eû õM ûBUTûlNANCINGûADVISORY ûINCLUDINGû 4HYSSEN+RUPPSûELEVATORûBUSINESSûFORû 2OTHSCHILD FEESûFORûRESTRUCTURINGûASûWELLûASûDEBTûANDû õBN Christopher Spink

DEALûmOWûISûTHEûFUELûTHATûFEEDSûTHEû-ACQUARIEû Macquarie cools earnings outlook MACHINE ûDRIVINGûSIGNIlCANTûTRANSACTION û MACQUARIE GROUP@SûPROlTûINûTHEûCURRENTûSIXû )TûISûNOWûTHEûLARGESTûINFRASTRUCTUREûASSETû ADVISORYûANDûPERFORMANCEûFEES vûWROTEû5"3û MONTHSûISûLIKELYûTOûFALLûBYûMOREûTHANûAûTHIRDû MANAGERûINûTHEûWORLDûANDûOPERATESûAû ANALYSTû*ONATHANû-OTT ASûTHEûANNUITY STYLEûBUSINESSûTHATûHASûHELPEDû NUMBERûOFûUNLISTED ûCLOSE ENDEDûFUNDSûTHATû -ACQUARIEûDECLINEDûTOûPROVIDEûANYû DIFFERENTIATEûTHEûBANKûFROMûITSûGLOBALûPEERSû HAVEûPAIDûDIVIDENDSûFORûTHEûBANK ûASûWELLûASû GUIDANCEûFORûFULL YEARûPROlTûASûITûSAIDûTHEû COMESûUNDERûPRESSUREûASûAûRESULTûOFû#OVID UNITûHOLDERS ûINûTHEûLASTûDECADE ECONOMICûIMPACTûOFû#OVID ûHADûRENDEREDû #HIEFûlNANCIALûOFlCERû!LEXû(ARVEYûSAIDû 7HATûHASûBEENûANûADVANTAGEûISûNOWû ANYûPREDICTIONSûMEANINGLESS LASTûWEEKûTHATû!USTRALIASûPRE EMINENTû PROVINGûTOûBEûAûHINDRANCEûDURINGûTHEû 5"3Sû-OTTûSEESûREVENUESûFORûTHEûFULLûYEARû INVESTMENTûBANKûEXPECTSûPROlTûINûTHEûSIXû #OVID ûCRISIS ûACCORDINGûTOûANALYSTS û TOûTHEûENDûOFû-ARCHûûCOMINGûINûû MONTHSûTOûTHEûENDûOFû3EPTEMBERûTOûCOMEûINû as the bank struggles to realise gains on LOWERûTHANûLASTûYEARSûlGUREûOFû!BNû AROUNDûûLOWERûYEAR ON YEARûANDûDOWNû THEûSALEûOFûASSETS ûDUEûTOûTHEûREQUIREMENTû 53BN ûONûTHEûPREVIOUSûSIXûMONTHS FORûON THE GROUNDûDUEûDILIGENCE û "UTûMOSTûANALYSTSûEXPECTû-ACQUARIESû 4HATûMARKEDûAûSIGNIlCANTûDETERIORATIONû PARTICULARLYûFORûHARDûASSETSûSUCHûASû RESULTSûTOûREBOUNDûDURINGûTHEûNEXTûlSCALû FROMû*ULYSûlRST QUARTERûTRADINGûUPDATE ûWHICHû INFRASTRUCTUREû0ERFORMANCEûFEESûHAVEû YEAR ûSAYINGûITûHASûBEENûHAMPEREDûBYûAû HADûFORECASTûSLIGHTLYûLOWERûPROlTûCONTRIBUTIONSû ALSOûDROPPED NUMBERûOFûONE OFFûFACTORSûSUCHûASûAû FROMûITSûMAINûOPERATIONS ûANDûLEAVESûTHEûBANKû -ACQUARIEûSAIDûITûEXPECTSûINVESTMENTû STRENGTHENINGû!USTRALIANûDOLLAR ûWHICHû ONûCOURSEûTOûREPORTûLOWERûPROlTSûFORûTHEû BANKINGûINCOMEûTOûBEûSUBDUEDûDURINGûTHEû HURTSûTHEûBANKûASûITûMAKESûROUGHLYûTWO SECONDûYEARûRUNNINGû)TûHADûPREVIOUSLYû SECONDûHALFû!NALYSTSûATTRIBUTEDûTHISûTOûITSû THIRDSûOFûITSûINCOMEûOVERSEAS REPORTEDûSEVENûSTRAIGHTûYEARSûOFûGROWTH FOCUSûONûCROSS BORDERûADVISORYûWORK û 3IMILARLY ûTHEûREDUCTIONûINûINVESTMENTû $UBBEDû!USTRALIASûMILLIONAIREûFACTORYûDUEû PARTICULARLYû-! ûWHICHûHASûALSOûBEENû INCOMEûTHATû-ACQUARIEûmAGGEDûDURINGûITSû TOûITSûHIGHûPERFORMANCE LINKEDûPAY û-ACQUARIEû ADVERSELYûIMPACTEDûBYû#OVID lRST HALFûUPDATEûISûALSOûLIKELYûTOûBEû HASûOUTSTRIPPEDûMANYûOFûITSûGLOBALûPEERSûSINCEû h)NCREASEDûUNCERTAINTY ûWEAKERûECONOMICû TEMPORARY ûACCORDINGûTOûANALYSTS ûASû THEûlNANCIALûCRISISûASûITûHASûPIVOTEDûTOWARDSû OUTLOOKûANDûTRAVELûRESTRICTIONSûHAVEû TRANSACTIONSûAREûPUSHEDûBACKûASûOPPOSEDûTOû MOREûANNUITY STYLEûBUSINESSESûTOûOFFSETû COMBINEDûTOûMATERIALLYûREDUCEûGLOBALû SCRAPPED VOLATILITYûFROMûINVESTMENTûBANKING TRANSACTIONûACTIVITYû7EûBELIEVEûTHATûSUCHû Thomas Blott Former BoE chief Carney joins Pimco &ORMERû"ANKûOFû%NGLANDû'OVERNORûMark #ALIFORNIA BASEDû0IMCOûMANAGESû UNDERSTANDINGûOFûHOWûINSTITUTIONSûSUCHû Carney ISûJOININGûTHEûADVISORYûBOARDûOFûPIMCO û 53TRNûOFûASSETSûANDûISûOWNEDûBYû ASûCENTRALûBANKSûINmUENCEûlNANCIALû ONEûOFûTHEûWORLDSûBIGGESTûBONDûINVESTMENTû 'ERMANûINSURERûALLIANZ MARKETS COMPANIES ûADDINGûTOûHISûROLESûWITHûTHEû h-ARKSûEXTENSIVEûEXPERIENCEûASûANû #ARNEYûLASTûMONTHûJOINEDû#ANADIANû 5NITEDû.ATIONSûANDûAû#ANADIANûASSETû ECONOMISTûANDûCENTRALûBANKER ûCOMBINEDû ASSETûMANAGEMENTûCOMPANYû"ROOKlELDû MANAGER WITHûHISûFOCUSûONûTRANSFORMINGûCLIMATEû ASûAûVICE CHAIRûTOûHEADûITSûGREENûINVESTMENTû #ARNEYûWILLûWORKûALONGSIDEûFORMERû"RITISHû lNANCE ûMAKESûHIMûANûINVALUABLEûADDITIONû PROGRAMMEû"EFOREûLEAVINGûTHEû"O% û 0RIMEû-INISTERû'ORDONû"ROWN ûEX &EDERALû TOûTHISûRENOWNEDûGROUPûOFûTHINKERS vûSAIDû HEûACCEPTEDûAûROLEûASûAû5NITEDû.ATIONSû 2ESERVEû#HAIRû"ENû"ERNANKEûANDûAûPREVIOUSû 0IMCOûCHIEFûEXECUTIVEû%MMANUELû2OMAN 3PECIALû%NVOYûONû#LIMATEû!CTIONûANDû 0RESIDENTûOFûTHEû%UROPEANû#ENTRALû"ANK û 0IMCOûSAIDûITSûGLOBALûADVISORYûBOARDû &INANCE *EAN #LAUDEû4RICHET HELPSûTOûIMPROVEûFUNDûMANAGERSû David Milliken

International Financing Review September 19 2020 19

4 IFR PM 2351 p13-24.indd 19 18/09/2020 19:46:18 h)NCREASEDûUNCERTAINTY ûWEAKERûECONOMICûOUTLOOKûANDûTRAVELûRESTRICTIONSû HAVEûCOMBINEDûTOûMATERIALLYûREDUCEûGLOBALûTRANSACTIONûACTIVITYv UBS ANALYST JONATHAN MOTT ON MACQUARIE, P19

Storm clouds gather for Covid-hit ﬁrms 4HEREûISûANûEERIEûCALMûACROSSûTHEû%UROPEANû TOûUSEûAûhSUPERSCHEMEvûUNDERûTHEû5+SûNEWû SERVICESûALLûSINGLEDûOUTûASûAREASûLIKELYûTOûFACEû DEBTûRESTRUCTURINGûMARKETûASûTHEûINITIALû INSOLVENCYûLAWSûEARLIERûTHISûMONTH STRESSû&EWûADVISERSûAREûCONlDENTûENOUGHûTOû PANICûTOûPLUGûLIQUIDITYûSHORTAGESûINûTHEûWAKEû !IRPORTûSERVICESûGROUPû3WISSPORT ûWHICHû PREDICTûWHENûTHATûPEAKûMIGHTûBE ûGIVENûTHEû OFûTHEûCORONAVIRUSûOUTBREAKûHASûBEENûMETû AGREEDûAûDEBTûFORûEQUITYûDEALûWITHûITSû UNCERTAINTYûABOUTûECONOMICûPROSPECTSûANDû "UTûADVISERSûPREDICTûSTORMYûNEGOTIATIONSû CREDITORSûEARLIERûTHISûMONTH ûANDû&RENCHûCARû THEûTHREATûOFûSECONDûLOCKDOWNS AHEADûASûBUSINESSESûCONFRONTûLONGER TERMû RENTALûCOMPANYû%UROPCAR ûWHICHûISûSETûTOû h4HEREûISûCORPORATEûFATIGUEû#%/SûANDû STRATEGIESûTOûSURVIVE ENTERûSAFEGUARDûPROCEEDINGS ûAREûOTHERû #&/SûAREûEXHAUSTEDû4HEYûHAVEûBEENû h.OûCINEMAûCHAINûHASûGONEûBUSTûYETûDESPITEû EXAMPLESû!LLûAREûTRAVELûCOMPANIESûDIRECTLYû WORKINGûFORûMONTHSûTOûSUSTAINûLIQUIDITYû HAVINGûNOûREVENUESûFORûMONTHSû"USINESSESû IMPACTEDûBYûTHEûPANDEMIC .OWûTHEYûHAVEûTOûDECIDEûWHATûCOMESûNEXT vû HAVEûGOTûSUFlCIENTûLIQUIDITYûCUSHIONS ûBUTû h4HEûPIPELINEûMIGHTûBEûTHINûRIGHTûNOWûBUTû SAIDûTHEûTHIRDûADVISERûh-ANYûSECTORSûINû WHEREûISûCONSUMERûDEMANDûGOINGûTOûCOMEû ITûISûGROWINGû4HEREûISûAûVERYûBIGûPOOLûOFû DISTRESSûWILLûSEEûCONSOLIDATIONû9OUûHAVEûGOTû FROMûNOW û(OWûMUCHûWILLûITûDECLINE vûSAIDû WEAKûBUSINESSES vûSAIDûAûSECONDû TOûGETûAHEADûOFûTHOSEû-!ûDECISIONSv ONEûSENIORûRESTRUCTURINGûADVISER RESTRUCTURINGûADVISERûh&ORECASTINGûEXACTLYû 4HATûISûTRICKYûTOûDOûASûTHEûECONOMICû h3OûFAR ûONLYûWHEREûREVENUESûHAVEûFALLENû WHENûTHEYûWILLûFALLûISûVERYûDIFlCULTûINûTHISû FALLOUTûOFûTHEûPANDEMICûMIGHTûSEEûSEVERALû ûANDûTHEûCOMPANYûISûAûHEAVYûSPENDERûOFû ENVIRONMENT ûBUTû)ûWOULDûSAYûTHATûRIGHTûNOWû YEARSûOFûRECOVERYûMIXEDûWITHûDOUBLEûORûEVENû CAPITAL ûSUCHûASûAIRLINES ûHAVEûPEOPLEûHADûTOû WEûAREûINûTHEûEYEûOFûTHEûSTORMv TRIPLEûDIPSûh4HEREûISûNOû#OVID PROOFûBUSINESSû DOûSOMETHINGv PLAN vûHEûSAID )NDEED ûSINCEûTHEûSTARTûOFû-ARCHûAûLOTûOFû EARLY PROMISE THEûSITUATIONSûREQUIRINGûFULLûRESTRUCTURINGS û 7HENû%UROPEANûECONOMIESûLOCKEDûDOWNû LUCRATIVE YEAR ASûOPPOSEDûTOûRElNANCINGS ûHAVEûBEENûFROMû DURINGû-ARCHûANDû!PRILûADVISERSûWEREû $ESPITEûTHEûRECENTûLULL ûRESTRUCTURINGû COMPANIESûTHATûWEREûALREADYûINûILL HEALTHû INUNDATEDûWITHûCALLSûFROMûMANAGEMENTûTOûlXû ADVISORYûlRMSûREPORTûRECORDûLEVELSûOFûWORKû BEFOREûTHEûPANDEMIC THEIRûCASHmOWûEMERGENCIESû3OMEûlRMSûSAIDû SOûFARûTHISûYEARû/NEûSAIDûTHEYûHADûDONEûASû 3OMEûWEREûIDIOSYNCRATICûCASES ûSUCHûASû THEYûEVENûRECEIVEDûFEESûUPFRONTûTOûSECUREûTHEIRû MUCHûWORKûINûTHEûlRSTûMONTHûOFûTHEûCRISISûASû .-#û(EALTHûANDû7IRECARDû/THERSûWEREûINû SERVICESûBEFOREûRIVALSûCOULDûENGAGEûTHEM THEYûUSUALLYûDIDûINûONEûYEAR SECTORSûSUCHûASûRETAILûANDûCOMMERCIALûREALû h"YûMID -ARCHûTHEûPHONESûSTARTEDûMARGINû h)TSûAûSTANDOUTûYEARûnûTHEûSHEERûVOLUMEû ESTATEûTHATûALREADYûFACEDûSTRUCTURALû LOANSûWEREûINûTROUBLEû2#&Sû;REVOLVINGûCREDITû ANDûINTENSITYûOFûTHEûWORK ûWHICHûHASûBEENû CHALLENGESû3HOPPINGûMALLûOWNERû)NTUû FACILITIES=ûWEREûDRAWNûDOWNû)TûWASûTHEûGET COMPLEXûANDûMULTI FACETED vûSAIDûTHEûTHIRDû STANDSûOUTS CASH INûPHASEû)TûWASûMANIC vûSAIDûAûTHIRDû ADVISER "UTûTHEûPERIODûOFûINTERIMûlNANCINGSûTOû ADVISERûh"UTûWHENûALLûTHEûGOVERNMENTûSUPPORTû !NOTHERûADVISERûSAIDûFEESûPULLEDûINûOVERû PATCHûUPûBALANCEûSHEETSûISûOVERûANDûADVISERSû KICKEDûINûTHEûDESIREDûSTABILISATIONûOCCURREDv THEûLASTûSIXûMONTHSûWEREûHIGHERûTHANûTHOSEû SAYûADDRESSINGûOVER LEVERAGEûBYûSIMPLYû 4HATûSTABILISATIONûWASûWELCOMED ûBUTûWITHû BILLEDûINûALLûOFû SLAPPINGûONûMOREûDEBTûWILLûNOûLONGERûWORKû SOMEûGOVERNMENTûSUPPORTûSCHEMESûSETûTOû 4HOSEûVOLUMESûLOOKûSETûTOûINCREASEû ASûCOMPANIESûCONFRONTûSTRATEGICûPROBLEMSû ENDûINûTHEûNEXTûFEWûMONTHS ûNOTABLYûINûTHEû h4HEREûAREûPERMANENTûANDûFUNDAMENTALû TURBOCHARGEDûBYûTHEûCORONAVIRUSûSITUATION 5+ûAHEADûOFûMOSTûCONTINENTALûCOUNTRIES û CHANGESûINûBEHAVIOURûEVENûIFûWEûALLûGOûBACKû .OWûTHEûFOCUSûISûMOVINGûONûTOûDEEPERû HARDERûCHOICESûWILLûBEûFACINGûBUSINESSESûTHATû TOûTHEûOFlCEû4HISûWILLûNOTûBEûBACKûTOûNORMALû DEBTûRESTRUCTURINGSûFORûBUSINESSESûTHATûWEREû MAYûBEûSQUEEZEDûTRYINGûTOûRAISEûMOREû FORûAûFAIRûAMOUNTûOFûCOMPANIES vûSAIDûTHEû HEALTHYûBEFOREûTHEûPUBLICûHEALTHûCRISISû WORKINGûCAPITALûJUSTûASûTHEûSUPPORTûENDS lRSTûADVISERûh7EûWILLûHAVEûINCREASEDûLEVELSû EMERGED ûSUCHûASûTHEûaBNûRECAPITALISATIONû 4HISûCOULDûLEADûTOûAûSECONDûPEAKûINûACTIVITY û OFûDEFAULTûFORûAûLONGûPERIODûOFûTIMEv OFûAIRLINEû6IRGINû!TLANTIC ûTHEûlRSTûCOMPANYû WITHûRETAIL ûCASUALûDINING ûAUTOMOTIVEûANDûOILû Christopher Spink, Sandrine Bradley India adds red tape to IPO rule

)NDIANûCOMPANIESûTHATûGOûPUBLICûOVERSEASû WHOûAREûWORRIEDûTHATûSOMEûOFûTHEûCOUNTRYSû (EûADDEDûTHATûAûDOMESTICûSECONDARYû MAYûBEûORDEREDûTOûHOLDûAûSECONDARYûLISTINGû MOSTûPROMISINGûSTART UPSûWILLûLISTûOVERSEASû LISTINGûISûNOTûLIKELYûTOûBEûREQUIREDû INûTHEûDOMESTICûMARKET ûUNDERûHOTLYûDEBATEDû ANDûNEVERûRETURNû"UTûITûWOULDûALSOûRAISEûTHEû IMMEDIATELYûBUTûWITHINûAûFEWûYEARSûOFûTHEû PROPOSALSûTOûBEûUNVEILEDûINûTHEûCOMINGû COMPLIANCEûBURDENûFORûPOTENTIALûISSUERSûANDû OVERSEASû)0/ WEEKS COULDûMAKEûITûHARDERûFORûTHEMûTOûACCESSû % COMMERCEûCOMPANYûFLIPKART ûOWNEDûBYû 4HEûGOVERNMENTûSAIDûINû-AYûITûWOULDû FOLLOW ONûCAPITALûINûTHEûFUTURE 7ALMART ûSTARTEDûINTERNALûWORKûONûAû53û)0/û ALLOWûUNLISTEDûCOMPANIESûTOûPURSUEûDIRECTû h4HEREûAREûTWOûBIGûLOBBIESûnûFOREIGNû OFû53BNnBNûINû û)&2ûREPORTEDûLASTû LISTINGSûOVERSEASûANDûISûPREPARINGûTOûLAUNCHûAû INVESTORS ûWHOûWANTûDIRECTûLISTINGSûABROADû WEEKû4HEûCOMPANYûHASûYETûTOûAPPOINTû CONSULTATIONûPAPERûONûTHEûFRAMEWORKû4HEû SOûTHATûTHEYûDONTûHAVEûTOûHANDLEû)NDIANû BANKSûTOûANûUNDERWRITINGûSYNDICATE PROPOSALSûAREûLIKELYûTOûINCLUDEûAû REGULATIONS ûANDû)NDIANûINVESTMENTû -ARKETûPARTICIPANTSûEXPECTûJIO PLATFORMS û REQUIREMENTûFORûAûDOMESTICûLISTINGûWITHINûAû BANKS ûBROKERSûANDûSTOCKûEXCHANGES û 2ELIANCEû)NDUSTRIESûDIGITALûARM ûPAYMENTSû SETûTIME FRAME ûACCORDINGûTOûPEOPLEûINVOLVEDû which will lose business if the big COMPANYûPAYTM ûRIDE HAILINGûCOMPANYûOLA INûTHEûDISCUSSIONS COMPANIESûLISTûABROADû4HEûGOVERNMENTû ANDûHOSPITALITYûlRMûOYOûTOûLISTûABROADû 3UCHûAûMOVEûWOULDûPROTECTûTHEûINTERESTSû HASûTOûBALANCEûTHEûTWO vûAû-UMBAI BASEDû SOMETIMEûINûTHEûFUTURE OFûDOMESTICûINVESTORSûANDûINTERMEDIARIES û LAWYERûSAID Anuradha Subramanyan

20 International Financing Review September 19 2020

4 IFR PM 2351 p13-24.indd 20 18/09/2020 19:46:18 People &Markets

ASKûANOTHERûBANK ûANDû)ûAMûSUREûSOMEONEû JP Morgan HK bribery case kicks off WILLûGIVEûHIMûAûFULLûTIMEûOFFERûGIVENûTHEû JP MORGANûDIDûNOTûCARRYûOUTûESSENTIALûCHECKSû *0û-ORGANûULTIMATELYûWASûNOTûINVOLVEDûINû MANDATEûTHATûISûUPûFORûGRABS vû,EEûCITEDû WHENûEMPLOYINGûTHEûSONûOFûAûPOTENTIALû THEû(+BNû53M û)0/ûINû$ECEMBERû ,EUNGûASûSAYINGûINûTHEûEMAIL CLIENT ûAûPROSECUTORûTOLDûAû(ONGû+ONGûCOURTû û"/#û)NTERNATIONAL û#ITIGROUP û(3"#û !NGû2EN YIûLEFTû*0û-ORGANûINû ûTHEû LASTûWEEK ûONûTHEûlRSTûDAYûOFûTHEûTRIALûOFûTHEû ANDû-ORGANû3TANLEYûWEREûTHEûJOINTûSPONSORS û PROSECUTIONûSAIDûINûAûSTATEMENTûLASTûYEAR BANKSûFORMERû!SIAûINVESTMENTûBANKINGûVICE WITHû#)-"ûONûBOARDûASûJOINTûBOOKRUNNER !û*0û-ORGANûSPOKESWOMANûREFERREDû2EUTERSû CHAIRWOMAN û#ATHERINEû,EUNG ûFORûALLEGEDû 4HEûINVESTMENTûBANKûDIDûNOTûCONSULTûITSû TOûAûSTATEMENTûITûMADEûLASTûYEAR ûWHENûITûSAIDû BRIBERY LEGALûANDûCOMPLIANCEûDEPARTMENTûUNTILûAFTERû h4HISûISûAûHISTORICALûCASE ûWHICHû*0û-ORGANû ,EUNG ûWHOûREPEATEDûHERûEARLIERûPLEAûOFû THEûYOUNGERû!NGSûEMPLOYMENTûCONTRACTû REACHEDûAGREEMENTûONûANDûSETTLEDûINûv NOTûGUILTYûONû-ONDAY ûISûCHARGEDûWITHû WASûSIGNED ûPROSECUTIONûBARRISTERû2OBERTû,EEû 4HEûTRIALûMARKSûTHEûlRSTûTIMEûTHATûANYONEûINû BRIBINGûTHEûTHENûCHAIRMANûOFû+ERRYû,OGISTICSû SAIDûINûHISûOPENINGûSUBMISSION (ONGû+ONGûHASûFACEDûCRIMINALûCHARGESûOVERûTHEû .ETWORK û!NGû+ENG LAM ûBYûEMPLOYINGûHISû ,EEûALSOûCITEDûANûEMAILûHEûSAIDûWASûWRITTENû BANKSûWELL DOCUMENTEDûh3ONSûANDû$AUGHTERSvû SON û!NGû2EN YI ûATûTHEû53ûINVESTMENTûBANKSû BYû,EUNGûWHENû+ERRYû,OGISTICSûWASûINûTHEû PROGRAMMEû)Nû û*0û-ORGANûAGREEDûTOûPAYû (ONGû+ONGûOFlCEûINû EARLYûSTAGESûOFûPREPARINGûFORûITSû)0/ 53ûAUTHORITIESû53MûOVERûALLEGATIONSûTHATûITû 3HEûDIDûSO ûTHEûPROSECUTIONûSAID ûINû h3ONûISûVERYûKEENûTOûDOû)"û;INVESTMENTû HADûHIREDûRELATIVESûOFû#HINESEûOFlCIALSûKNOWNû ANTICIPATIONûTHATû!NGûWOULDûINmUENCEûHISû BANKING= ûBUTûDOESûNOTûINTERVIEWûWELLûûû4HEû ASûhPRINCELINGSvûTOûWINûBANKINGûDEALS COMPANYûTOûGIVEû*0û-ORGANûAûROLEûONûITSû)0/ LASTûTHINGû)ûWANTûISûFORûUSûTOûGOûSLOWûANDûTHEYû Alundavid John

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International Financing Review September 19 2020 21

4 IFR PM 2351 p13-24.indd 21 18/09/2020 19:46:18 h4HEûPIPELINEûMIGHTûBEûTHINûRIGHTûNOWûBUTûITûISû GROWINGû4HEREûISûAûVERYûBIGûPOOLûOFûWEAKûBUSINESSESv UNNAMED RESTRUCTURING ADVISER, P20 Capital markets week ahead: ZTO Express, Palantir, CTP

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22 International Financing Review September 19 2020

4 IFR PM 2351 p13-24.indd 22 18/09/2020 19:46:28 People &Markets Europe CEOs set action plan to speed green transition #HIEFûEXECUTIVESûANDûSENIORûREPRESENTATIVESû CIRCULARITYû4HEû%UROPEANû'REENû$EALû 0ODOBNIKûSAIDûAûCOMBINATIONûOFû.'/S û OFûSOMEûOFû%UROPESûLARGESTûCOMPANIESûSAIDû PRESENTSûANûOPPORTUNITYûTOûDOûJUSTûTHISv SPECIALISTûINVESTORS ûREGULATORSûANDû THEYûWOULDûSUPPORTû%UROPESû'REENû$EALû 6ONûDERû,EYENûSAIDûTHEû%5ûSHOULDûSETûAû POLITICIANSûMADEûANûEFFECTIVEûCOALITIONûOFû ANDûHELPûTHEûREGIONûTRANSITIONûTOûAûGROWTHû TARGETûTOûCUTûITSûGREENHOUSEûGASûEMISSIONSûBYû PEOPLEûWHOûWOULDûHELPûCOMPANIESûBEû MODELûBASEDûONûCIRCULARITY ûRENEWABLEû ATûLEASTûûBYûûCOMPAREDûTOûû ACCOUNTABLE ENERGYûANDûLOW CARBONûINDUSTRIES LEVELSû4HEûUPGRADEûWASûNEEDEDûTOûPUTûTHEû $EUTSCHEû"ANKûHASûSIGNEDûUPûTOûTHEû 4HEûEXECUTIVESûSAIDûTHEûWAYûOUTûOFûTHEû %5ûhlRMLYûONûTRACKvûFORûITSûPLANûTOûREACHûNETû 'ERMANûDECLARATIONûONûCLIMATEûCHANGE ûFORû CURRENTûCRISISûCOULDûNOTûBEûMOREûOFûTHEûSAMEû ZEROûEMISSIONSûBYû EXAMPLEû4HEûBANKûALSOûPUBLISHEDûITSûlRSTû ANDûTHEYûWOULDûCOMMITûTOûSUPPORTûTHEû%5û 4HEûGROUPûOFûûCOMPANIES ûWHICHû %3'ûQUANTIlABLEûTARGETSûINû-AYûANDûHASûSAIDû WITHûCONCRETEûACTION ûINûAûJOINTûSTATEMENTû INCLUDESû2OYALû3CHIPOL û$EUTSCHEû"ANK û ITûAIMSûTOûEXECUTEûõBNûINûSUSTAINABLEû LASTûWEEKûTOûCOINCIDEûWITHûTHEû%UROPEANû "AYERûANDû!8! ûOUTLINEDûSEVENûAREASûWHEREû lNANCINGûANDûINVESTMENTSûBYû #OMMISSIONSûPRESIDENTû5RSULAûVONûDERû THEYûWOULDûCOMMITûTOûACTION ûSUCHûASû 0ODOBNIKûALSOûSAIDûITûWASûIMPORTANTûFORû ,EYENSû3TATEûOFûTHEû5NIONûADDRESS ENSURINGûAûFAIRûANDûINCLUSIVEûTRANSITION û THEûMARKETûTOûLOOKûBEYONDûGREENûBONDS h4HEû#OVID ûPANDEMICûREQUIRESûAû ENFORCINGûDISCLOSUREûTHROUGHûBETTERû h3USTAINABLEûlNANCEûISûMUCHûMOREûTHANû MASSIVEûANDûCOORDINATEDûECONOMICûSTIMULUSû REPORTINGûANDûENCOURAGINGûCARBON OFFSETTINGû GREENûBONDS vûHEûSAIDûh9ES ûTHEYREû TOûBOTHûMITIGATEûTHEûECONOMICûREPERCUSSIONSû ANDûCARBON PRICINGûSCHEMES IMPORTANT ûBUTûWEûNEEDûTOûMAKEûSUREûWEû OFûTHEûPANDEMICûAND ûABOVEûALL ûTOûACCELERATEû h4HESEûSEVENûSPECIlCûACTIONSûTHATûAREûBEINGû DONTûJUSTûLOOKûATûONEûPRODUCTû7EûALSOûNEEDû THEûNECESSARYûTRANSITIONûTOûAûLOW CARBONû COMMITTEDûTOûAREûVERYûCOMPREHENSIVEûANDû TOûMAKEûSUREûTHATûLENDINGûBEHAVIOURû ECONOMY vûSAIDû#%/û!CTIONû'ROUPûCO CHAIRS û CANûHELPûOURûAUDIENCEûUNDERSTANDûAûBITûMOREû CHANGESû4HERESûINFRASTRUCTURE ûREPORTING û !8!û#%/û4HOMASû"UBERLûANDû2OYALû$3-û WHATSûIMPORTANT vûSAIDû'ERALDû0ODOBNIK û INDICESû3O ûWHILEûWEûNEEDûSPECIlCû HONORARYûCHAIRMANû&EIKEû3IJBESMA #&/ûOFûTHEûCORPORATEûBANKûATû$EUTSCHEû"ANK LIGHTHOUSEûPROJECTS ûWEûALSOûNEEDûAûHOLISTICû h7EûHAVEûTOûTAKEûMOREûANDûFASTERûACTIONû h4HISûGROUPûWILLûTHRIVEûTOûENSUREûTHATûTHEYû APPROACHûANDûFORûPEOPLEûTOûBEûLESSûINSULARv WITHûMOREûEMPHASISûONûSUSTAINABILITYûANDû CARRYûOUTûCONCRETEûACTIONSûANDûPROJECTSv Helene Durand

Banks under pressure to adopt deforestation targets "ANKSûAREûCOMINGûUNDERûPRESSUREûFROMû PUTTINGûPRESSUREûONûCOMPANIESûANDû 2EGIONALûBANKSûINû!SIAûANDû3OUTHû!MERICAû INVESTORSûTOûINCLUDEûDEFORESTATIONûTARGETSûINû GOVERNMENTSûTOûTIGHTENûPOLICIES THATûOFFERûSTANDARDûLENDINGûHAVEûNOTûAPPLIEDû lNANCINGûLINKEDûTOûCOMMODITYûPRODUCERSû h4HEûPOSSIBILITYûOFûFURTHERûDIVESTMENTSû SIMILARûLEVELSûOFû%3'ûSTANDARDS ûANDûLOCALû ANDûEMBEDûTHEMûINûTHEIRûOWNû%3'ûSTRATEGIESû FROMûINVESTORSûFACINGûINTERNALûORûEXTERNALû COMPANIESûAREûUNDERûLESSûlNANCING RELATEDû TOûDRIVEûCHANGEûANDûIMPROVEûTHEûCARBONû PRESSUREûCOULDûTIGHTENûlNANCINGûAVAILABILITYû PRESSUREûTOûADOPTûSUSTAINABLEûPRODUCTIONû FOOTPRINTûOFûTHEIRûPORTFOLIOS û&ITCHûSAIDûINûAû FORûSOMEûCORPORATES vûTHEûREPORTûSAID PRACTICES ûTHEûREPORTûSAID REPORT "ANKSû%3'ûPOLICIESûAREûMOREûLIKELYûTOû 4HEûCOMPANIESûWITHûTHEûMOSTûDIRECTûLINKSû 2ISINGûDEFORESTATIONûISûCONTRIBUTINGûTOû INmUENCEûlNANCINGûFORûLARGEûCORPORATESû TOûDEFORESTATIONûAREûAGRICULTURALûPRODUCERSû CARBONûEMISSIONS ûBIODIVERSITYûLOSSûANDû SUCHûASûCOMMODITIESûTRADERS ûCONSUMERû OPERATINGûINûAT RISKûREGIONSûTHATûRELYûONûLOCALû CLIMATEûCHANGE ûANDûISûMAINLYûCAUSEDûBYû GOODSûMANUFACTURERSûANDûRETAILERS ûASûTHEYû FUNDING ûINCLUDINGû"RAZILIANûBEEFûCOMPANIESû COMMODITYûPRODUCTION ûPRIMARILYûOFûBEEF û COVERûALLûlNANCINGûINCLUDINGûLENDING û *"3 û-ARFRIGûANDû-INERVAû&OODSû!GRICULTURALû PALMûOIL ûSOYûANDûTIMBERûORûPULP ûALONGûWITHû BOOKRUNNINGûANDûUNDERWRITING COMPANIESûSUCHûASû/LAM û7ILMAR ûANDû,OUISû THEûPRODUCTIONûOFûMAIZE ûRICE ûSOYBEANSûANDû $REYFUSûHAVEûSUSTAINABILITY LINKEDûLOANS ûBUTû RUBBER FINNISH FORESTRY THEûTARGETSûAREûNOTûFOCUSEDûONûFORESTATION )NVESTMENTûBANKSûAREûINCORPORATINGû %3'ûPRODUCTSûSUCHûASûSUSTAINABILITY LINKEDû !ûCONSENSUSûONûMINIMUMûBANKINGû DEFORESTATIONûINTOûTHEIRû%3'ûPOLICIESûSIMILARûTOû LOANSûANDûBONDSûAREûDESIGNEDûTOûDRIVEû STANDARDSûFORûlNANCINGûCOMPANIESûINûFOREST THEIRûPLEDGESûTOûEXITûCOALû3OMEûHAVEûMADEû IMPROVEMENTûBYûTYINGûMARGINSûTOûTHEû RISKûSECTORSûISûEMERGING ûWHICHûRELIESûONû VOLUNTARYûCOMMITMENTSûTOûALIGNûWITHû ACHIEVEMENTûOFûENVIRONMENTALûTARGETS ûBUTû INTERNATIONALLYûRECOGNISEDûPRODUCTû STANDARDS ûALTHOUGHû).'ûISûTHEûONLYûMAJORûBANKû &INNISHûFORESTRYûGROUPû50-ûISûSTILLûTHEûONLYû CERTIlCATION ûAûCOMMITMENTûTOûNOû WITHûNEGATIVEûSCREENING ûACCORDINGûTOû&ITCH COMPANYûTOûPUBLISHû+0)SûDIRECTLYûLINKEDûTOû DEFORESTATION ûANDûINCREASINGûTHEûABILITYûTOû ).'ûPLEDGEDûNOTûTOûACCEPTûNEWûPALMûOILû DEFORESTATION TRACEûPRODUCTSûTOûTHEIRûORIGIN PRODUCERSûORûTRADERSûASûCLIENTSûFROMû )Nû-ARCH û50-ûISSUEDûAûõMû -OREûCOMPANIES ûINCLUDINGûCOMMODITYû 3EPTEMBERû ûANDûHASûENHANCEDûDUEû SUSTAINABILITY LINKEDûLOANûTHATûTIEDûITSû PRODUCERS ûFOODûMANUFACTURERSûANDûRETAILERS û DILIGENCEûFORûADDITIONALûlNANCINGûTOûEXISTINGû MARGINûTOûBIODIVERSITYûANDû#/ûEMISSIONSû AREûEXPECTEDûTOûANNOUNCEûPLANSûTOûREDUCEû CLIENTS TARGETSû4HEûBIODIVERSITYû+0)ûWASûTIEDûTOûTHEû DEFORESTATIONûINûTHEIRûSUPPLYûCHAINSûINû 3EVERALûLARGEûPENSIONûFUNDSûANDûINVESTORSû ACHIEVEMENTûOFûAûNETûPOSITIVEûIMPACTûONû ANTICIPATIONûOFûINCREASEDûREGULATORYû AREûMOUNTINGûPRESSUREûCAMPAIGNSûONû BIODIVERSITYûINû50-SûOWNûFORESTSûINû&INLAND û REQUIREMENTS ûWHICHûAREûEXPECTEDûTOûSTEPûUPû COMPANIESûINVOLVEDûINûTHEûPRODUCTIONûORû BASEDûONûTHEûCOMPARISONûOFûNATURALûANDû INû CONSUMPTIONûOFûFOREST RISKûCOMMODITIESûANDû COMMERCIALûFORESTS Tessa Walsh

International Financing Review September 19 2020 23

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4 IFR PM 2351 p13-24.indd 24 18/09/2020 19:46:29 BONDS SSAR 27 Corporates 32 FIG 36 Covered Bonds 41 High-Yield 41 Structured Finance 45

FRONT STORY EUROPEAN HIGH-YIELD Investors switch back to risk-on Appetite returns six months after the crash Investors willing to cast net wider

Just six months after the meltdown in However, green shoots in the capital “We’re in a very different situation to capital markets following the global spread markets aside, investors should be mindful where we were,” said Azhar Hussain, head of the coronavirus, European high-yield that the legacy of Covid-19 is “debt, debt and of global credit at Royal London Asset investors are switching their dials back to more debt”, said BofA analysts in a report Management. risk-on. published on Friday. Countries are now focusing on more Thanks to extraordinary action from “The liquidity heaped on companies by localised lockdowns, while state support is governments and central banks to support both governments and central banks has keeping the more impacted companies markets, high-yield option-adjusted spreads been so abundant that the clock has stopped AmOATûnûMEANINGûTHATûSPREADSûCOULDûGETû were last week at 447.7bp. That is the on defaults,” wrote analysts. tighter still, he said. tightest level seen since the coronavirus “But equities have not rallied with the “I’m not betting on a vaccine, but I do crisis caused carnage in capital markets, same gusto across the risk spectrum as think that the way that economies react to with European high-yield bond spreads credit, and we think this lays the Covid is going to be different,” said Hussain. touching a post-2008 crisis high of 944bp in groundwork for a return of idiosyncratic March. risk for bondholders.” PRIMARY TIGHTENING “The picture has totally changed since As of last week, more than €37bn of high- March,” said Marina Cohen, head of VACCINE DREAMS yield bonds had priced in the euro primary European high-yield at Amundi Asset In taking on more risk, investors are partly market year-to-date, compared with €25bn Management. “We have moved from a risk- looking to avoid a repeat of 2019’s fourth over the same period in 2019, according to averse market to a risk-on market and a quarter. Then, buysiders who bet against IFR data. search for yield again.” struggling credits such as Casino with large While the M&A pipeline is thinner Investors say they are now ready to pivot capital structures were left behind by the compared with prior years, borrowers have out of safer sectors into credits that have subsequent rally. BEENûCOMINGûTOûPRIMARYûTOûRElNANCEû been beaten up by the crisis – including They are also looking to get ahead of a existing debt. leisure, travel and retail companies. vaccine – which would prompt an inevitable “The market is now the tightest since the “We’re looking for something slightly market rally. pandemic crisis and we’re seeing more different right now,” said Olivier “Our macro view is that the market is opportunistic issuers looking to push out Monnoyeur, European high-yield portfolio now on a path to normalisation – and then, maturities,” said a London-based high-yield manager at BNP Paribas Asset Management. as we get closer to a vaccine, it will be too syndicate banker. “We feel that the recovery and the safe late for investors to position for it because, “It’s good to see that, but at the same time places – good Double Bs and long durations, as we know, credit is a very illiquid asset there is a lot of potential risk – we’re TMT and packaging – has been mostly class,” said Monnoyeur. probably nearing the tightest level in terms played out.” To a certain extent, investors and bankers of spreads.” The dramatic turnaround in fortunes for feel that the coronavirus carnage has played While spreads are still higher than pre- the capital markets is a far cry from the out – thanks also in part to the preparedness pandemic, default rates are creeping up market crash in 2008, which it took almost of countries for a second wave. – and there’s still uncertainty about how fast a decade to recover from. the economy will recover, he said. EUR JUNK BOND YIELDS NORMALISE AFTER CORONA CRASH That is partly because the actions from CENTRAL BANK ASSET PURCHASES HAVE COMPRESSED YIELDS Notwithstanding the unresolved central banks and governments were strong % backdrop, the banker said the market is and coordinated, and came very quickly, 10 issuer-friendly, pointing to the attractive said Cohen. But it was also because of the TERMSûONû#ABOTûANDû%NCORESûõMûlVE difference between the cause of the crashes. YEARûNON CALLûTWOûRElNANCING ûWHICHûPRICEDû 8 “The nature of the issue that led to such on September 10. extreme widening in 2008 was bank The borrower was able to increase the size failures – a systemic issue – whereas in 6 of its restricted group, and added a big March it was a virus; not to minimise the starter basket, he said.

issue, but it made a big difference,” said 4 “That’s something that is coming back Cohen. now – the market is so strong that we’re “It meant the impact on the economy was seeing several issuances with very 2 more manageable, and people think that Jan Feb Mar Apr May Jun Jul Aug Sep aggressive terms, including large baskets or there will be an end to all of this with a 2020 carve-outs and looser covenants,” he said. vaccine.” Source: Markit iBoxx EUR Liquid High Yield Index Eleanor Duncan

International Financing Review September 19 2020 25

5 IFR Bonds 2351 p25-61.indd 25 18/09/2020 20:07:30 Acquisition ﬁnancing back in WEEK IN NUMBERS vogue in US corporate bonds 5.875% THE YIELD AT WHICH DUTCH RETAILER Trickle of riskier ﬁnancing trades expected to pick up pace MAXEDA DIY PRICED A €420m SIX-YEAR NON-CALL TWO BOND IN A SIGN THAT Low rates and strong investor demand are US$21bn takeover of Immunomedics, Oracle is INVESTORS ARE BUYING CREDITS IN opening doors for junk-rated corporates and partnering with social media platform TikTok RISKIER SECTORS AGAIN. AT ONE POINT PRIVATEûEQUITYûlRMSûTOûBRINGûBONDû and MetLife is buying Versant Health for ITS JULY 22s FELL TO A CASH PRICE OF 41 lNANCINGSûFORûACQUISITIONSûORûDIVIDENDû US$1.68bn, according to reports. BEFORE RECOVERING TO ABOVE PAR

payments, spicing up a primary market .OTûALLûOFûTHESEûWILLûBEûlNANCEDûWITHûNEWû Maxeda's July 2022s RECENTLYûDOMINATEDûBYûRElNANCINGûACTIVITY debt in the bond market, but bankers said 110 !NûUPTICKûINûACQUISITIONûlNANCINGûHADû they expected some of it will. 100 been expected by investors after some “I’m not surprised by the pick-up,” said 90 leveraged buyout and acquisition activity Steve Kellner, head of corporates at PGIM 80 over the summer. Fixed Income. 70 Last week, engineering and construction Higher-quality companies in sectors that 60 company KBR priced a US$250m senior note as have been able to weather the Covid-19 50 part of the funding for its US$800m acquisition pandemic are now being a little more 40 of Centauri Platform Holdings, while AM aggressive with their balance sheets and taking GENERAL, the maker of the Humvee military advantage of low interest rates, he said. 01/07/20 01/03/20 01/02/20 01/01/20 01/05/20 01/09/20 01/06/20 01/04/20 vehicle, was marketing a US$600m bond as One senior DCM banker said: “It’s not as if 01/08/20 PARTûOFûTHEûlNANCINGûOFûTHEûCOMPANYSû that there is all of a sudden a crystal ball, but acquisition by KPS Capital Partners from an people are feeling more comfortable with AFlLIATEûOFû-AC!NDREWSûû&ORBESû how their business has been impacted, what €48.125bn These are still only early signs of an uptick in the future looks like, and how they can THE AMOUNT OF ESG-RELATED what remains a relatively quiet market for manage things. M&A could be the next ISSUANCE IN THE EURO MARKET ALONE acquisitions and leveraged buyouts in the high- driver of issuance in the high-grade market.” SINCE AUGUST 24, THE WEEK THAT yield market, though more are expected. With a presidential election and resulting EUROPE’S PRIMARY MARKET PROPERLY “Once you deal with your near-term market volatility on the horizon, issuers may REOPENED FOLLOWING THE SUMMER LULL maturities, which the majority of larger be tempted to act sooner rather than later to high-yield guys have, and your next set of fund acquisitions. bond maturities is 2026 or 2027, and you Currently attractive funding conditions €7.25bn have no covenants, then you can get reduce the negative carry cost on the bonds THE AMOUNT OF EURO COVERED BOND creative,” said Lale Topcuoglu, head of credit that companies will have to pay before they ISSUANCE LAST WEEK, MAKING IT THE at JO Hambro Capital Management. CANûBENElTûFROMûTHEûADDITIONALûEARNINGSûOFûAû BUSIEST WEEK FOR THE SECTOR SINCE “In high-yield I think it will be more leveraged target when the deal closes. JANUARY buyouts or management buyouts. M&A is “The economics of that decision have trickier because even if the other company is in changed given where rates are and I would stress you have to pay par for those bonds.” think all of those factors would lend people –0.159% ,ASTûWEEKSûDEALSûFOLLOWEDûAûJUMBOûlNANCINGû to issue closer to the outset rather than wait THE YIELD THAT TWO-YEAR GILTS HIT package which was priced in the prior week to until the close,” the DCM banker said. LAST MONDAY, THEIR LOWEST LEVEL, AS help fund the merger of Virgin Media and 02, as Weighing against that is the need for FEARS OF A NO-DEAL BREXIT MOUNTED well as a deal for Radiate Holdco (the holding many of these deals to obtain regulatory THOUGH THEY WERE BACK AT –0.11% COMPANYûFORû!STOUNDû"ROADBAND ûTOûRElNANCEû approval, and the risk of delays. TOWARDS THE END OF THE WEEK debt and pay a dividend to its private equity “Something is not going to come unless they % 0.8 owners TPG Capital ahead of the rumoured sale FEELûCONlDENTûONûTHEûTIMINGûOFûREGULATORYû 0.7 of the company. approvals,” said a high-yield banker. “Negative 0.6 Blackstone’s acquisition of human genealogy carry is not the only factor here.” 0.5 0.4 provider ANCESTRY.COM, one of the largest sponsor- Investors have also become more 0.3 backed deals seen since the pandemic took hold, circumspect about deals that pre-fund 0.2 ALSOûREMAINSûINûTHEûLEVERAGEDûlNANCEûPIPELINE mergers after garbage disposal company 0.1 0.0 4HEûDEALûISûEXPECTEDûTOûBEûlNANCEDûWITHû Waste Management delayed its acquisition -0.1 53BNûOFûlRST LIENûLOANSûANDû53MûOFûHIGH of Advanced Disposal in June. -0.2 yield bonds and could come in the fourth quarter. A clause in the bonds that pre-funded the Similar themes are brewing in the merger allowed Waste Management to call 02/01/20 02/07/20 02/03/20 02/02/20 02/05/20 02/09/20 02/06/20 02/04/20 investment-grade corporate bond market. the notes at a price well below where they 02/08/20 Merger and acquisition funding has yet to were trading in the secondary market, pick up in earnest, but bankers expect it will angering investors. €1.679bn soon, especially after a number of headline- “After Waste Management, investors are THE AMOUNT OF CORPORATE BONDS grabbing deals were announced last week. very sensitive and we would have to feel highly THE ECB BOUGHT (NET) IN THE WEEK Nvidia announced a US$40bn deal to buy chip- CONlDENTûONûAûDEALSûABILITYûTOûCLOSEûORûBEûWELLû TO SEPTEMBER 11 AS PART OF ITS CSPP designer Arm from SoftBank Group, Gilead is compensated for that risk,” said Kellner. COMPARED WITH €1.224bn THE WEEK EARLIER expected to issue US$6bn of new debt to fund its David Bell, William Hoffman In total, it has bought €48.511bn

26 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 26 18/09/2020 20:07:34 BONDS SSAR

While markets were focused on the The proceeds will be allocated to EIB’s upcoming communication from the Fed, the lending to activities contributing SSAR decision to bring deals ahead of the event substantially to climate change mitigation was more down to general prudence rather INûLINEûWITHûEVOLVINGû%5ûSUSTAINABLEûlNANCEû than an expectation of a major shift in legislation. US DOLLARS policy, according to the banker. INTERNATIONAL DEVELOPMENT ASSOCIATION, a “FOMC should always be a big event for the member of the World Bank group, followed RAFT OF DOLLAR ISSUES AHEAD OF FOMC market but in fact here there was so much in the footsteps of the EIB with its own discussion and focus around what Powell said SUCCESSFULûlVE YEARûRESULTûASûITûSETûAûNEWû Four SSA issuers ventured into the market at Jackson Hole that I think people have taken record for size in its third benchmark trade last Tuesday to raise US dollars as funding their direction from that.” in US dollars. was brought forward to get out in front of a “Sometimes there is really a will-they- “We continue to roll out IDA globally, in FOMC policy announcement the following won’t-they feeling around FOMC, but here I US dollars, euros and sterling, and the day. think people are pretty comfortable with US$2bn size is the largest we’ve done,” said Despite the issuers crowding into one what is going to happen,” he said. Andrea Dore, head of funding at the World day to raise a total of US$11.5bn, there Bank. was little sign of fatigue, with demand MORE US DOLLARS FOR EIB h3OûFAR ûWEVEûDONEûAûlVE YEARûINû!PRILû remaining solid and the supply The EIB wasted little time in returning to the US 2018, a seven-year this June and now this comfortably absorbed. dollar market after the previous week’s US$4bn lVE YEARû4HEûlRSTûTRANSACTIONûISûNOWûAû “There is the FOMC on Wednesday, so it LONGûlVE YEARûNOTEûISSUE ûBRINGINGûAû53BNû THREE YEAR ûSOûWEûHAVEûAûTHREE YEAR ûAûlVE needed to get it all done in pretty short September 2030 Global CAB benchmark. year and a seven-year as we try to build out order, but it all seems to have gone quite 4HEûLATESTûDEALûWASûLANDEDûATûAûlNALû the yield curve.” well,” said a DCM banker. spread of mid-swaps plus 16bp via Barclays, The US$2bn September 2025 “At these sort of spreads, if you look at the BNP Paribas, Citigroup and RBC, tightening by 2EGû3!ûPAPERûHADûAûlNALûORDERûBOOKûOFû cycle for the year, we are down at the low 1bp from IPTs. over US$2.25bn and was US$500m larger end again. With equity markets wobbling The trade was comfortably covered, with than the issuer’s biggest previous SOMEûDAYS ûlXEDûINCOMEûHASûDElNITELYûBEENû lNALûORDERûBOOKSûINûEXCESSûOFû53BN û TRANSACTION ûAûlVE YEARûOFFERINGûINû!PRILû shown to still be popular.” excluding joint lead manager interest. 2018.

ALL INTERNATIONAL GREEN BONDS ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues €(m) (%)

1 JP Morgan 45 8,473.70 7.9 1 JP Morgan 1,331 343,027.66 8.7 1 BNP Paribas 382 101,347.86 8.1 2 Credit Agricole 33 7,392.84 6.9 2 Citigroup 1,036 293,768.05 7.4 2 JP Morgan 330 89,879.80 7.2 3 BNP Paribas 36 6,146.64 5.7 3 Bank of America 1,064 280,019.19 7.1 3 Credit Agricole 278 78,266.03 6.3 4 Citigroup 25 5,360.51 5.0 4 Barclays 888 254,078.55 6.4 4 Deutsche Bank 283 77,013.09 6.2 5 Barclays 23 5,335.54 5.0 5 Goldman Sachs 742 212,400.34 5.4 5 Barclays 280 75,072.09 6.0 6 Bank of America 33 5,105.47 4.7 6 HSBC 845 196,680.21 5.0 6 HSBC 305 73,122.21 5.8 7 Deutsche Bank 26 4,827.35 4.5 7 Deutsche Bank 730 186,995.50 4.7 7 UniCredit 255 64,026.71 5.1 8 HSBC 37 4,496.76 4.2 8 BNP Paribas 699 179,225.97 4.5 8 SG 227 60,609.44 4.8 9 ING 28 4,437.99 4.1 9 Morgan Stanley 598 173,364.13 4.4 9 Citigroup 220 60,011.50 4.8 10 NatWest Markets 17 3,900.34 3.6 10 Credit Agricole 496 121,812.86 3.1 10 Bank of America 215 57,069.69 4.6 Total 187 107,686.46 Total 4,619 3,944,004.80 Total 1,451 1,251,309.85

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

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING SEPTEMBER 18 2020 Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover Sep 15 2020 UK £2.75bn 1.25 Jul 22 2027 0.032 2.61 Sep 15 2020 Germany €3.279bn 0.00 Nov 15 2027 -0.62 2.21 Sep 15 2020 UK £1.75bn 1.75 Sep 7 2037 0.623 2.65 Sep 16 2020 UK £2.5bn 0.375 Oct 22 2030 0.263 2.96 Sep 16 2020 Germany €1.3339bn 1.25 Aug 15 2048 -0.07 1.95 Sep 17 2020 Spain €675m 0.00 Apr 30 2023 -0.449 5.78 Sep 17 2020 Spain €935m 0.80 Jul 30 2027 -0.04 3.43 Sep 17 2020 Spain €1.09bn 4.70 Jul 30 2041 0.813 1.43 Sep 17 2020 Spain €1.533bn 1.00 Oct 31 2050 1.091 1.25 Sep 17 2020 France €2.696bn 0.00 Feb 25 2023 -0.64 2.98 Sep 17 2020 France €3.8bn 0.50 May 25 2026 -0.53 1.92 Sep 17 2020 France €1.998bn 0.75 May 25 2028 -0.40 2.76 Sep 17 2020 France (€i) €624m 0.10 Mar 1 2026 -1.12 3.56 Sep 17 2020 France (€i) €448m 0.70 Jul 25 2030 -1.14 3.51 Sep 17 2020 France (€i) €177m 0.10 Jul 25 2047 -0.91 4.02 Source: IFR

International Financing Review September 19 2020 27

5 IFR Bonds 2351 p25-61.indd 27 18/09/2020 20:07:34 There was no movement seen from IPTs, names, are probably wrapped up on their However, plans are in place to dilute these ANDûTHEûlNALûSPREADûWASûSETûATûMID SWAPSû benchmark funding. So yes, there is a lot of stakes to 11% each, bring on board other plus 12bp by BMO, Citigroup, JP Morgan and SUPPLY ûBUTûITSûPROBABLYûAûlNALûHURRAHûANDû borrowing members from emerging Toronto-Dominion. then not too much left.” markets to the tune of a further 25% in combined holdings and the remaining 20% CADES WITH RECORD SOCIAL BOND NDB SET FOR DOLLAR RETURN position then to be held by developed Also out in the same part of the curve was countries that are non-borrowing members. CADES, with a US$4bn Reg S/144A September NEW DEVELOPMENT BANK has taken a step closer After holding a non-deal roadshow and 2025 social bond offering, the largest social to returning to the US dollar market by interacting with a number of key investors, bond issue and also the issuer’s largest HOLDINGûAûGLOBALûINVESTORûCALLûONûAûlVE YEARû NDB is aiming to build on the success of its DOLLARûDEALûINûOVERûlVEûYEARS Covid response bond that is expected to inaugural offering, according to Maasdorp. The trade landed 4bp back from IDA at price in the week beginning September 21. “In terms of our objectives for the plus 16bp, after tightening by 2bp from IPTs. Bank of China, Barclays, Citigroup, Goldman transaction, we want to naturally improve Joint lead managers BNP Paribas, Credit Sachs and Standard Chartered have been on where we were,” he said. Agricole, HSBC and JP Morgan built books of more mandated for the Reg S benchmark trade. “In the previous deal, it was our debut than US$6.5bn for the transaction, including The issuer is looking to ramp up its issuance, so we had a new issuer premium, US$225m of joint lead manager interest. presence in the market after making a but now we are becoming more of a known At the shorter end of the curve, a US$4bn successful debut in June with a US$1.5bn MDB amongst that high-quality investor October 2023 Global issue from KFW was three-year deal. base. Many of the central banks that have comfortably covered, with order books in “The debut transaction met exceptional onboarded us, they are now looking at us excess of US$6bn. high-quality investor support, with strong through a different lens.” Bookrunners Barclays, Morgan Stanley and PARTICIPATIONûFROMûCENTRALûBANKSûANDûOFlCIALû Nomura were able to tighten by 1bp from institutions,” said Leslie Maasdorp, chief ANOTHER MDB TO RAISE USD IPTs to price at mid-swaps plus 4bp. lNANCIALûOFlCERûATû.$" The ASIAN INFRASTRUCTURE INVESTMENT BANK is The transaction is only the issuer’s third “2020 has been a very important year of also set to return to US dollars, with BNP Global benchmark of the year in the key milestones for us, the bank has grown Paribas, Citigroup, JP Morgan and Nomura currency and this provided rarity value, from complete start-up, through a growth mandated to arrange a global investor call according to a lead, who said the deal landed PHASE ûANDûNOWûINTOûAûFULLYûmEDGEDû with a three-year US dollar sustainable close to fair value. multilateral development bank,” he said. development benchmark to follow. “It does feel a bit undersupplied from “As soon as the pandemic erupted, NDB AIIB has established a Covid-19 crisis KfW,” said the lead. “So there will be a lot of committed to provide up to US$10bn in crisis- recovery facility for up to US$13bn, which big credit lines there that are happy to see related assistance to its member countries. Of offers sovereign-backed and non-sovereign- them issuing in a decent liquid size again.” that, we have already approved Covid-19 BACKEDûlNANCINGSûFORûQUALIFYINGûCLIENTSûANDû related assistance projects for US$4bn which projects within AIIB’s members. MORE TO COME are focused on health-related expenses.” The issuer made a long-awaited return to With the FOMC meeting out of the way, The new issue will be under the bank’s capital markets in May with a US$3bn there is likely to be another wave of issuance sustainable development umbrella, with SUSTAINABLEûlVE YEARûBONDûTHATûWASûGREETEDûWITHû in US dollars ahead of holidays in China, proceeds earmarked for additional support an underwhelming response and described as a according to a syndicate banker. LOANSûTOûMEMBERûSTATESûTOûlGHTûTHEû#OVID û bit lacklustre by a co-lead manager. “You’ve got execution probably this week, PANDEMICûWITHûAûSPECIlCûFOCUSûONûTHEû next week and then Monday to Wednesday economic recovery. the week after, then you’ve got to take a The bank’s strategy is to use the dollar EUROS pause for at least a week with the Chinese market as its main source of funding and so out,” he said. become a regular issuer. UNSURE START FOR EU “There is depth of demand but I don’t !TûPRESENT ûTHEûBANKûHASûlVEûMEMBERû think there is too much supply left. A lot of states, the BRICS, which each own an equal Investors keen to snap up bonds from the the agency names, even some of the supra 20% stake. EU under its Sure (Support to mitigate

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

1 Citigroup 272 104,679.51 11.2 1 JP Morgan 908 231,742.21 10.1 1 BNP Paribas 40 32,471.60 10.5 2 Bank of America 299 101,170.35 10.8 2 Citigroup 782 213,299.09 9.3 2 JP Morgan 49 31,906.34 10.3 3 JP Morgan 305 100,103.66 10.7 3 Bank of America 810 203,278.89 8.8 3 Citigroup 32 21,102.28 6.8 4 Goldman Sachs 175 69,706.58 7.4 4 Goldman Sachs 569 156,790.75 6.8 4 Credit Agricole 22 19,072.63 6.2 5 Morgan Stanley 164 60,709.14 6.5 5 Barclays 530 153,296.46 6.7 5 Barclays 32 17,636.66 5.7 6 Wells Fargo 186 52,877.70 5.6 6 Morgan Stanley 462 134,714.80 5.9 6 Deutsche Bank 26 16,679.10 5.4 7 Barclays 145 51,383.35 5.5 7 Wells Fargo 438 105,270.93 4.6 7 HSBC 19 16,666.46 5.4 8 Deutsche Bank 102 39,022.86 4.2 8 HSBC 399 93,290.47 4.1 8 Bank of America 36 16,284.02 5.3 9 TD Securities 89 32,618.69 3.5 9 Deutsche Bank 422 92,239.17 4.0 9 UniCredit 12 15,112.66 4.9 10 RBC 105 32,589.30 3.5 10 Credit Suisse 370 67,993.40 3.0 10 Goldman Sachs 20 15,063.68 4.9 Total 555 937,079.91 Total 2,307 2,302,522.92 Total 149 308,913.22

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

28 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 28 18/09/2020 20:07:34 BONDS SSAR

Unemployment Risks in an Emergency) the delay will not compromise the delivery September 2027 that had whipped up programme will have to wait a bit longer, as of the amounts planned in 2020, according €4.5bn of orders by the time the spread was the expected September start has been to Bohan. set. moved to October. “It looks like it will take a little bit of time “It was a blowout,” said a banker away. While the EU is not new on the public for them,” said a banker. h4HEYûGOTûAûMASSIVEûBOOKûANDûPRICEDûmATûTOû sector scene, the huge increase in its “The EU funding team is a small one for fair value. It was a great transaction and funding programme has made it one of the the time being, and until the Sure shows the attraction of green bonds at the most hotly anticipated issuers of the programme they were small participants moment.” autumn. with annual issuance in the €5bn–€10bn Leopold Olma, head of funding at However, the original timetable whereby region,” he said. Rentenbank, said the issuer had received its the issuer was expected to emerge in the “To go from that to €3bn–€5bn a week largest order book on record. At its peak, the week of September 21 has slipped due to will need a lot – more staff, new techniques order book had more than 130 accounts DELAYSûINûlNALISINGûTHEûDETAILSûANDûLOANû and a lot of work.” involved, with green investors supplying contracts with member states. The size of the programme will nearly half of the orders. “The investor presentation is correct – dramatically increase the EU’s primary “This was the culmination of one year of week two-three October is now the issuance and alter the landscape of the work, starting in October last year,” said CONlDENTûTARGET vû.IALLû"OHAN ûAûDIRECTORûATû whole euro SSA market. Olma. the European Commission told IFR in an The working assumption is that the “It was a huge success. The original plan emailed response. maximum amount of €100bn of the Sure was to print €1.5bn, we upsized this to The initial target of the last week of programme will be used, with 18 member €1.75bn and then due to this success you 3EPTEMBERûISûPROVINGûDIFlCULTûhBECAUSEûOFû states having already requested a combined have to manage the allocation process.” DELAYSûINûlNALISINGûTHEûDETAILSûANDûLOANû €90.3bn. 4HEûORDERûBOOKûATûTHEûlNALûSPREADû contracts with [member states]”, he said, Proposals for disbursements of the dropped away from the very peak but was adding that another global call would be programme were last month presented to still over €3.9bn. held this week to update investors. the European Council, with Italy (€27.4bn), IFR data show the trade was Rentenbank’s “Before a member state can receive a Spain (€21.3bn) and Poland (€11.2bn) among largest in euros since June 2018, when it loan, all member states had to sign a THEûBIGGESTûPOTENTIALûBENElCIARIES SOLDûAûõBNûlVE YEARû"OOKSûFORûTHATûDEALû guarantee agreement with the European Sure’s implementation period ends on topped €2.75bn. Commission to establish a €25bn backstop December 31 2022, but given the large of The issuer brought pricing in from for this lending programme. The loans to amount of interest, it is believed that guidance at swaps less 6bp area via DZ Bank, each member state need to be collectively issuance will likely be fast-tracked and front- ING, JP Morgan and Nordea. Rentenbank has a agreed by all other member states in the loaded. conventional May 2027 note, bid at around Council of the EU,” said Bohan, adding that While the Sure programme will ramp up less 8bp, according to Tradeweb prices. this is scheduled to occur in the week issuance from the EU, it is still relatively The new green bond was launched at 3bp beginning September 21. small compared to the bloc’s €750bn inside guidance, at swaps less 9bp. h/NCEûTHATûISûDONE ûTHEûBENElCIARYû recovery fund, which will disburse €390bn The proceeds will be utilised according to member state must then sign a bilateral in grants and €360bn in cheap loans and is Rentenbank’s green bond framework, loan agreement with the member state. It expected to follow not too long after. which has received a “dark green” second has taken longer than foreseen to complete opinion by Cicero Shades of Green. these formal steps due to administrative RENTENBANK FEASTS ON GREEN In a more low-key deal, HESSE set the steps (linguistic review of legal texts),” he BACKING spread in line with guidance at 4bp through said. swaps for its no-grow €1bn September 2027 When the initial target of a September Two SSA issuers converged on the seven- through DekaBank, Deutsche Bank, Helaba, TD start date was announced in the global year point of the curve last Tuesday, with Securities and UniCredit. investor call, it was made clear it was an green proving just the tonic for RENTENBANK. No book update went out for Hesse. indicative date dependent on the Rentenbank made its debut splash in the “It wasn’t as good as Rentenbank, but let’s completion of these legal procedures and green bond sector with a €1.75bn say that it was okay,” said the banker. “It

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

1 HSBC 37 11,793.82 10.0 1 JP Morgan 14 6,154.11 9.3 1 UniCredit 54 15,087.61 16.4 2 JP Morgan 37 11,231.46 9.6 2 Deutsche Bank 13 5,759.52 8.7 2 DGZ-DekaBank 44 6,683.53 7.3 3 Credit Agricole 29 9,312.24 7.9 3 Credit Agricole 15 5,493.44 8.3 3 JP Morgan 25 6,188.22 6.7 4 Barclays 23 8,548.95 7.3 4 Goldman Sachs 8 5,451.27 8.2 4 Nord/LB 39 5,900.93 6.4 5 BNP Paribas 33 8,201.83 7.0 5 Bank of America 11 4,815.57 7.3 5 Deutsche Bank 33 5,604.06 6.1 6 Deutsche Bank 19 6,912.63 5.9 6 BNP Paribas 12 4,433.24 6.7 6 Barclays 27 5,488.84 6.0 7 Bank of America 14 6,197.59 5.3 7 HSBC 7 4,420.76 6.7 7 BayernLB 27 5,431.65 5.9 8 SG 21 6,126.31 5.2 8 Barclays 8 4,228.71 6.4 8 HSBC 31 4,462.89 4.9 9 Commerzbank 24 6,092.89 5.2 9 SG 8 4,089.88 6.2 9 LBBW 25 3,836.56 4.2 10 Natixis 16 5,696.55 4.9 10 UniCredit 7 3,867.74 5.8 10 Commerzbank 23 3,559.49 3.9 Total 166 117,449.73 Total 48 66,211.43 Total 173 91,851.39

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

International Financing Review September 19 2020 29

5 IFR Bonds 2351 p25-61.indd 29 18/09/2020 20:07:34 WASûmATûTOûTHEûCURVE ûANDûPEOPLEûDOûREQUIREû After bringing a €600m September 2050 AûBITûOFûAûCONCESSIONû"UTûITûWILLûBEûJUSTûlNEû deal at the start of the month and tapping its STERLING in the secondary and trade around reoffer.” August 2040 note for €200m on Tuesday, The calendar has cleared a bit, given Thursday’s deal was a €250m tap of its July STERLING DEALS ATTRACT KEEN LEVELS issuance from the EU under its Sure 2030s and as such marks the shortest OF INTEREST programme has been pushed back from the maturity of the three. anticipated September start to October. The transaction was priced at mid-swaps Two SSA issuers ventured into the relatively “It’s the big elephant everyone is waiting minus 1bp via DekaBank, Erste Group and quiet sterling market last Wednesday to for,” said the banker. “But I don’t think it UniCredit. raise funds, with a seven-year note from the will have a huge impact. A lot of prominent “It came a bit expensive in my opinion,” WORLD BANK and a long four-year transaction issuers are well ahead with their funding said a syndicate banker. “Berlin isn’t the from DEXIA CREDIT LOCAL both meeting and spreads are super stable. The only strongest state issuer, there was no book welcoming receptions. problem is negative yields, but investors are update, the spread was already set, and it 7HILEûTHEREûHASûBEENûAûmOODûOFû53ûDOLLARû cash-rich and waiting for more supply.” looks like they couldn’t even get above issuance and a steady stream of euro supply €250m.” in the past month, sterling transactions NRW.BANK ADDS TO RECENT GERMAN The deal came the day after NRW.Bank’s have been few and far between. ISSUANCE September 2030 paper, which had already “One of the key things everyone knows tightened slightly from pricing at mid-swaps about the sterling market since the start of NRW.BANK returned to the euro market with a plus 3bp, quoted around 2bp bid at the time summer is that there has not been a huge 10-year benchmark trade on Wednesday of the Berlin’s new issue announcement, amount of supply, while euros and dollars that was comfortably covered and only a day according to Tradeweb. have steamed ahead,” said a DCM banker. after two other German issuers raised funds One of the main motivations behind “The lack of supply has not been a in the seven-year part of the curve. many of these deals is central bank support, REmECTIONûOFûAûLACKûOFûDEMANDûDYNAMICSûASû “The tone in the primary market is still according to the banker. [today’s deals] highlight.” very strong, it is working and we are seeing “We still have quite strong QE buying. A £1.25bn September 2027 sustainable investors still coming in and in and in,” said The PSPP is active across the curve for development bond from the World Bank a syndicate banker. German federal states and will continue to was priced at 34bp over the 1.25% July 2027 NRW.Bank, rated Aa1/AA/AAA, moved be so. Market-makers know this and the Gilt, tightening by 1bp from guidance. further out along the curve with its no-grow main driver of the spread currently is the “Generally, we would do a two-day €1bn September 2030 note that was landed ECB for these kind of bonds.” execution and that was the intent,” said at mid-swaps plus 3bp, tightening 1bp from Andrea Dore, head of funding at the World guidance via Barclays, Commerzbank, JP CDP SOCIAL OFFERING IN DEMAND Bank. Morgan and LBBW. “But we had to do it intraday because of 4HEûlNALûORDERûBOOKûWASûMOREûTHANû Italy’s CASSA DEPOSITI E PRESTITI ventured back the Bank of England decision the following õBN ûRISINGûFROMûõBN PLUSûATûTHEûlRSTû into the euro market with a heavily day and the impact that expected volatility update. oversubscribed social bond as the issuer from that could have on the cross-currency “We were a bit more defensive in the once more raised funds through sustainable swap.” beginning, but when we looked at yesterday lNANCING Books ended over £1.5bn, including and also where NRW is trading, we thought !FTERûANûABSENCEûOFûROUGHLYûlVEûMONTHS û £100m joint lead manager interest, through it was a good price and has good potential CDP brought a €750m September 2028 Bank of America, HSBC, NatWest Markets and for performance in the secondary market,” social note that received orders in excess of RBC. said the banker. €3.6bn. “There wasn’t a huge international book, There was some discretion over the Barclays, Credit Agricole, HSBC, Intesa which is no surprise in the middle of Brexit calculation of the trade’s new issue Sanpaolo, JP Morgan, Mediobanca and discussions, but that doesn’t affect the premium, but it landed around fair value, UniCredit were joint bookrunners on the domestic bid,” said the DCM banker. according to a second syndicate banker. deal and able to tighten by an impressive “Anecdotally, we do expect once there is a “If you look at some of their comps, it’s BPûFROMû)04SûTOûSETûAûlNALûSPREADûOFû better idea around what will happen with probably priced on top of their curve,” said BTPs plus 28bp. Brexit that given the sell-off in sterling, we the second banker. “I think that’s how some 4HEûTRANSACTIONûPRICEDûmATûTOûFAIRûVALUE û will see some foreign demand but there was investors have looked at it, but I think it’s according to a lead. just a smattering in there this time.” fair to also say this name hasn’t been in the “The social aspect helped absolutely,” said Dexia, meanwhile, completed a £500m market in this tenor for quite a while, so it’s the lead. “The issuer is quite a frequent no-grow December 2024 offering that priced not the most liquid part of the curve.” social borrower already. Due to the Covid-19 at 48bp over the 2.75% July 2024 Gilt. NRW.Bank brought a €500m 10-year pandemic there’s been a special focus on 4HEûDEALûTIGHTENEDûSIGNIlCANTLYûFROMû)04Sû green benchmark in October and a €500m social bonds in general, and because of that of the plus 53bp area, with books opening at February 2030 note earlier this year, we got more attention, larger size and more the plus 50bp area on indications of interest respectively bid around mid-swaps plus 3bp clients for the deal.” of more than £900m. and 5bp at the time of the new issue’s The issuer’s last euro transaction was also Final order books were in excess of announcement, according to Tradeweb. a social offering, with a €500m three-year £1.5bn, through joint lead managers and €500m seven-year brought back in Barclays, Goldman Sachs and NatWest. BERLIN TAP 10-YEAR April. The issuer is guaranteed by Belgium For the second time in a week, the FEDERAL “We knew there was demand in this part (51.41%), France (45.59%) and Luxembourg STATE OF BERLIN moved to tap an outstanding of the curve,” said the lead. “They did a (3%) and rated Aa3/AA/AA–. bond, adding to the recent supply of seven-year already this year, so that’s why The motivation behind both trades was German paper. we went a little longer.” the potential arbitrage opportunity that has

30 International Financing Review September 19 2020

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developed of late, having not been possible a THEûCURVEûISûQUITEûSTEEPûBETWEENûlVEûANDû The recent surge in NZGB supply has month or so ago, according to a syndicate seven years,” she said. encountered no investor indigestion problems, banker. “So, from a yield perspective, seven years as attested by recent record-breaking deals. “Sterling is generally an arbitrage was attractive for investors, it aligned with New Zealand’s still strong relative credit currency for most. It is driven more by the our goal to extend duration and also the cost position and celebrated handling of Covid- cross-currency basis than anything else, but relative to our dollar curve made sense.” 19 have underpinned demand. it is not a slam dunk in terms of beating Much higher liquidity and the ability to your own currency and you have to be offer the highest absolute yields among its pretty nimble,” said the syndicate banker. NON-CORE CURRENCIES Triple and Double A rated sovereign peers Even though both deals were successful, it have also boosted investor appetite. does not necessarily mean there will be a NEW ZEALAND UPDATES BORROWING In particular, under its Large Scale Asset sustained pick-up in activity, according to PROGRAMME Purchase programme, the Reserve Bank can the same banker. buy up to NZ$100bn of sovereign and local “The cross-currency basis is kind of all The NEW ZEALAND TREASURY (Aaa/AA+/AA+) has government paper in the secondary market over the place. So while I would love to say updated its borrowing programme ahead of by June 2022, which frees up funds to this opens a wave of supply, and it arguably the postponed general election which will participate in new benchmarks. does on a demand perspective, from an now be held on October 17. Further liquidity boosts have come from issuance point of view it is not necessarily 4HEûGROSSûBONDûSUPPLYûFORECASTûFORûlSCAL New Zealand’s recent inclusion in the cheapest possible funding.” year 2020–21 has been reduced by NZ$10bn Citigroup’s nominal World Government (US$6.7bn) versus the previous update in Bond Index and an increase in the IBRD STAYS BUSY WITH CAD DEAL May, to NZ$50bn. maximum size for individual NZGB tranches The WORLD BANK wasted little time in The forecast for 2021–22 has been to NZ$18bn from NZ$12bn. following up the sterling transaction, decreased by NZ$5bn to NZ$35bn, while for Since the start of the pandemic, the New bringing a deal in the same part of the curve 2022–23 it remains at NZ$35bn, and for Zealand Treasury has executed four jumbo in Canadian dollars the following day. 2023–24 the forecast has been increased by syndicated nominal bond transactions. With that trade, the issuer had raised NZ$5bn, also to NZ$35bn. These comprise a NZ$3.5bn tap of the euros, US dollars, sterling, New Zealand Before the Covid-19 pandemic, New 1.5% May 15 2031s on April 9, a record dollars and now Canadian dollars in the Zealand was facing far smaller gross bond NZ$7bn sale of new 0.5% May 15 2024s on space of a week. issuance totals for the current and next June 16, a NZ$4.5bn print of new 1.75% May The spread on the C$750m (US$568m) THREEûlSCALûYEARSûOFû.:BN û.:BN û 15 2041s on July 14 and a NZ$4bn tap of the September 2027 global benchmark was set NZ$8bn and NZ$6bn, respectively. 4.5% April 15 2027s on August 25. at mid-swaps plus 3bp through BMO, CIBC, By the end of 2023–24, total New The Treasury also intends to issue a new Scotiabank and TD Securities, offering no new Zealand government bonds outstanding May 15 2028 nominal bond via syndication issue concession, according to a lead. are expected to have soared to NZ$210bn before December 31 2020. “This is very close to fair value,” he said. from NZ$94.2bn on June 30 2020, while “The CAD market is slightly different NZGBs as a percentage of GDP are AUCKLAND EXTENDS GREEN CURVE because it tends to trade quite tight because projected to climb to 58% from 31% over the liquidity is not as good as in euros or US that period. AUCKLAND COUNCIL, rated Aa2/AA dollars.” S&P forecast a 49.0% gross general (Moody’s/S&P), raised an upsized NZ$500m The seven-year maturity was also chosen government debt to GDP ratio for New (US$339m) from a 2.95% 30-year senior for the Kiwi trade, with several factors Zealand at the end of 2023, in a report unsecured green retail note offer which CONTRIBUTINGûTOûAûmURRYûOFûISSUANCEûATûTHISû released on July 10. priced at par last Wednesday. tenor, according to Dore. For an international comparison, this is ANZ, BNZ and Westpac were joint lead “One of the reasons the maturity made below S&P’s projected government debt to managers for the offer which had an SENSEûWASûTHATûYOUûlNDûAûLOTûINVESTORSûAREû GDP ratios of 52.3%, 62.6%, 88.1%, 107.6% indicative minimum size of NZ$300m. going further out the curve, with rates low and 111.5% for Australia, Germany, Canada, This is the council’s third local green bond or negative, and for a number of currencies the UK and US, respectively. SALEûFOLLOWINGûAûDEBUTû.:MûûlVE

ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues €(m) (%)

1 JP Morgan 146 33,776.67 13.3 1 JP Morgan 638 198,920.07 12.8 1 BNP Paribas 197 35,597.89 9.5 2 Bank of America 119 29,223.32 11.5 2 Bank of America 584 181,553.25 11.7 2 Deutsche Bank 113 25,614.76 6.8 3 Citigroup 83 20,405.89 8.0 3 Citigroup 482 151,947.91 9.8 3 HSBC 133 24,096.78 6.4 4 Morgan Stanley 75 19,827.29 7.8 4 Morgan Stanley 370 118,589.14 7.6 4 Citigroup 110 21,292.71 5.7 5 Goldman Sachs 71 18,343.59 7.2 5 Goldman Sachs 349 115,010.78 7.4 5 Barclays 92 21,246.11 5.7 6 Barclays 62 15,765.44 6.2 6 Wells Fargo 353 106,849.36 6.9 6 Bank of America 99 21,102.48 5.6 7 Wells Fargo 88 15,077.70 5.9 7 Barclays 231 68,499.75 4.4 7 SG 120 20,302.87 5.4 8 Mizuho 48 10,049.60 4.0 8 Mizuho 208 50,352.66 3.2 8 JP Morgan 118 20,055.55 5.3 9 MUFG 45 8,493.32 3.3 9 HSBC 150 49,930.08 3.2 9 Credit Agricole 105 17,199.08 4.6 10 BNP Paribas 30 6,813.49 2.7 10 Deutsche Bank 162 49,741.15 3.2 10 UniCredit 99 15,113.69 4.0 Total 258 254,285.58 Total 1,170 1,554,650.46 Total 409 375,396.71

Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Excluding equity-related debt. FIGs, ABS/MBS.

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

International Financing Review September 19 2020 31

5 IFR Bonds 2351 p25-61.indd 31 18/09/2020 20:07:35 Scentre repairs balance sheet with US$3bn hybrids

CORPORATES Investors positive on outlook for Australia’s largest shopping mall owner

SCENTRE GROUP raised an impressive US$3bn begun to improve again following lockdown Looking ahead, Scentre may turn to the euro (A$4.1bn) last Wednesday from a hybrid offering earlier in the year,” Campbell said. market for a potential 60-year non-call seven to repair its battered balance sheet, in a deal There was broad-based geographical demand subordinated Reg S note. that underlined investors’ confidence in the for both notes with US accounts buying 41% of Scentre is a self-managed shopping centre long-term prospects of Australia’s largest the 60-year non-call six, Asia 27%, EMEA 19% REIT, focused on Australia and New Zealand, shopping mall owner. A US$1.5bn 4.75% 60- and Australia/New Zealand 13%. with interests in 42 Westfield-branded shopping year non-call six note and a US$1.5bn 5.125% US investors were allotted 54% of the 60-year centres. 60-year non-call 10 piece priced at par, well non-call 10, Asia 17%, EMEA 15% and Australia/ The company’s share price rose 2.2% on below low 5% and mid 5% initial price thoughts, New Zealand 14%. Thursday, though this still left it down almost having attracted hefty respective order books of Asset managers took 69% of the non-call 40% year-to-date. US$4.5bn and US$5bn. sixes, insurance companies 14%, hedge funds UBS was structuring adviser and joint 7%, banks 4%, private banks 1% and others 5%. AUSNET GOES LOCAL bookrunner with ANZ, BNP Paribas, CBA, Asset managers bought 75% of the non-call Corporate hybrids from Australia are rare, Citigroup and HSBC. The 144A/Reg S notes 10s, insurance companies 13%, hedge funds 4%, with only two Australian issuers using similar will receive 50% equity credit from the ratings banks 3%, private banks 2% and others 3%. structures in the Yankee market previously. agencies and are not included as liabilities for In a statement to the ASX, Scentre said its In October 2015, as part of a multi-currency Scentre’s bank and bond covenants. inaugural hybrids diversified the group’s sources hybrid issuance, mining giant BHP Billiton sold “Investors appreciated the relatively high of capital and gave it sufficient long-term a US$1bn 60-year non-call five alongside a yield that the subordinated structure offers liquidity to cover all debt maturities until early US$2.25bn 60-year non-call 10. In March 2016 for an investment-grade instrument from 2024. energy infrastructure business AusNet Services an investment-grade issuer that underpins Scentre Group recently reported a loss Holdings sold a US$375m 60-year non-call 5.5 Scentre’s strong, long-term balance sheet of A$3.6bn in H1 2020, following a massive hybrid. position,” said Ian Campbell, head of debt A$4.1bn writedown in the value of its Westfield AUSNET, rated A3/A– (Moody’s/S&P), is now capital markets for Australia and New Zealand shopping centre portfolio as many tenants were looking to place its first local hybrid having at Citigroup. unable to pay rent due to Covid-19 restrictions. mandated UBS as structuring adviser and joint Scentre Group is rated A2/A/A, while the Scentre had already raised or extended lead manager with ANZ, NAB and UBS for an subordinated notes have expected ratings of A$5.8bn of loans and bonds this year, including Australian dollar wholesale 60 non-call five fixed Baa1/BBB+/BBB+. A$3.4bn of bank facilities, a €500m (US$590m) and/or floating-rate note offering with expected “Australia’s well-regarded handling of the 10-year Eurobond in March and a US$1.5bn two- ratings of Baa2/BBB (Moody’s/S&P). Investor coronavirus pandemic provided a lot of comfort part, five-year and 10-year, 144A/Reg S bond calls are due to commence on September 21. to investors, especially as rental incomes have two months later. John Weavers

year bond in June 2018 and NZ$150m It follows the A$13bn (US$9.5bn) sale of came well inside initial price thoughts but six-year note in July 2019. November 2024s on April 15, the A$19bn still arguably left double-digit concessions More recently the country’s largest sale of December 2030s on May 13, the for investors. council has been raising funds in standard A$17bn November 2025 sale on July 14, the Coca-Cola launched a US$1.3bn seven- format at home via the New Zealand Local A$15bn sale of 1.75% June 21 2051s on July year tranche at 55bp over Treasuries, a Government Funding Agency, rated AA+/ 28 and record A$21bn sale of 1% November US$1.3bn 10-year at 70bp over and a AA+ (S&P/Fitch), which priced a NZ$1bn 21 2031s on August 26. US$1.5bn 30-year at 110bp over. dual-tranche domestic offering on July 30. Final spreads were at the tight end of The New Zealand government owns 20% of guidance of 60bp, 75bp and 115bp (+/–5bp) LGFA, while 30 regional and territorial councils, and inside initial price thoughts of 85bp, including Auckland Council, Christchurch City 95bp and 135bp area. and Wellington City, hold the remaining 80%. CORPORATES The US dollar portion follows from a In September, 2019 Auckland Council €2.6bn three-part bond comprising a €1bn issued a €500m 10-year Eurobond. 8.5-year, a €750m 12.5-year and a €850m US DOLLARS 19.5-year that landed at mid-swaps plus AOFM READIES NEXT JUMBO 45bp, 60bp and 80bp, respectively. COCA-COLA TAKES ANOTHER GULP OF Both offerings are expected to fund a tender The AUSTRALIAN OFFICE OF FINANCIAL MANAGEMENT DEBT TO FUND TENDER OFFER offer for up to US$4.57bn and €3.05bn in (Aaa/AAA/AAA) has mandated ANZ, Bank of outstanding debt, according to a press release. America, Deutsche Bank and JP Morgan as joint COCA-COLA raised over US$7bn-equivalent Of the nine bonds in the tender offer, lead managers for a syndicated sale of new through dual-currency bond offerings last seven are for notes at the front end September 21 2026 Treasury bonds, Monday as it sought to retire expensive maturing in years 2021 and 2022. Two of the expected to price this week. outstanding debt. US dollar offers are for bonds issued earlier This will be the Australian government’s Following on the heels of a euro this year that extend out to 2040 and 2050. sixth syndicated Treasury bond sale since transaction earlier in the day, the company Coca-Cola’s 4.125% 2040s and 4.20% 2050s the coronavirus crisis. launched a US$4.1bn three-part deal that were priced at wide levels before the Federal

32 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 32 18/09/2020 20:07:35 BONDS CORPORATES

Reserve stepped in to provide a backstop for Even so, Coca-Cola was arguably At that level, Verizon landed the spread corporate bond spreads through its credit compensating investors for such risks, inside its secondary curve, where its existing facilities. providing double-digit concessions over its green 3.875% 2029s and its non-green 3.15% h#OKEûISûONEûOFûTHEûlRSTûCOMPANIESû)VEû curve, where the existing 1.65% 2030 was 2030s had been trading at G-spreads of 87bp seen to tender for bonds issued earlier this trading at 56bp over — 14bp tight to the and 90bp, respectively, according to year and that far out the curve,” one lead new 10-year offering. MarketAxess data. BANKERûSAIDûh4HEYûWEREûABLEûTOûRElNANCEûATû The company has been particularly active Not only are investors keen on telecom much lower rates.” in the US primary market this year, having CREDITSûTHATûHAVEûBENElTEDûFROMûSOCIALû With high ratings of A1/A+/A, the credit is already raised US$15.6bn. That is more than distancing measures amid the pandemic, SEENûASûAûmIGHT TO SAFETYûPLAYûAMIDûWHATû it has ever raised in a single year in the US but Verizon is no longer the frequent issuer remains an uncertain market backdrop, one dollar bond markets, or indeed over the it was in prior years when it loaded up on senior fund manager said. PREVIOUSûlVEûYEARSûCOMBINED ûACCORDINGûTOû LARGEûlNANCINGSûFORûTHEûACQUISITIONSûOFû!/,û Coca-Cola had some trouble early in the IFR data. and Yahoo. pandemic after away-from-home sales Bank of America, Barclays, Citigroup, JP In 2019, the company’s only bond offering declined and Costa Coffee closures across Morgan and Santander led last week’s deal. was the US$1bn green debut, and so far in Europe and Asia dragged net sales down 28% 2020 it has issued just US$3.5bn amid the year-over-year in the second quarter, INVESTORS TAKE SHINE TO VERIZON’S grab for cash at the height of pandemic fears according to a CreditSights report. SECOND DOLLAR GREEN BOND in mid-March. However, those second-quarter results are And Verizon may have little need to issue expected to be the low point and analysts Investors took a shine to VERIZON more debt this year, given it had US$7.9bn are predicting an upswing for the company COMMUNICATIONS‘ US$1bn 10-year green bond in cash as of the second quarter and faces no as the economy improves. on Wednesday – its second in this space – unsecured debt maturities in 2020 and less “The market is simplistic in the way it’s with orders swelling to US$5.5bn, according than US$1bn in 2021, according to research making its decisions,” the fund manager said. a co-manager on the deal. lRMû#REDIT3IGHTSû “Are you defensive? Are you somewhat With strong demand at its back, the deal was It does, however, have some US$20bn of insulated from volatility? If so, then I’ll buy priced at 83bp over Treasuries, the tight end of bonds maturing between 2022 and 2025, into it. There just isn’t that much thought guidance of 85bp (+/–2bp) and well inside initial ACCORDINGûTOû2ElNTIVûDATA ûWHICHûMAYû going into it.” price thoughts of the 110bp area. incentivise management to make opportunistic liability management forays. ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN STERLING “While we expect Verizon will be BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE opportunistic tapping the market in the Managing No of Total Share Managing No of Total Share coming months, potentially to pursue bank or group issues €(m) (%) bank or group issues £(m) (%) liability management exercises, Verizon 1 BNP Paribas 303 88,136.99 8.1 1 Barclays 26 3,026.87 13.6 DElNITELYûDOESûNOTûHAVEûTOûRETURNûTOûTHEû 2 JP Morgan 259 79,075.32 7.2 2 HSBC 27 2,909.90 13.1 primary market in the near term,” 3 Credit Agricole 237 69,968.26 6.4 3 NatWest Markets 21 1,887.59 8.5 CreditSights noted. 4 HSBC 256 66,924.58 6.1 4 BNP Paribas 16 1,794.17 8.1 Proceeds will continue to go towards 5 Deutsche Bank 224 66,080.55 6.0 5 JP Morgan 10 1,530.19 6.9 eligible green investments similar to how it 6 Barclays 211 64,627.02 5.9 6 Lloyds Bank 13 1,468.45 6.6 used its previous ESG bond. 7 UniCredit 212 58,295.62 5.3 7 Citigroup 9 1,086.38 4.9 Earlier this year, Verizon reported the full 8 SG 198 56,632.80 5.2 8 Santander 10 1,065.12 4.8 ALLOCATIONûFORûITSûlRSTûGREENûBOND ûWHICHû 9 Citigroup 158 50,373.86 4.6 9 Goldman Sachs 7 1,035.43 4.7 used US$319m for green buildings and put 10 Bank of America 173 49,506.04 4.5 10 RBC 10 925.94 4.2 US$637m towards renewable energy, Total 1,208 1,093,868.28 Total 55 22,251.43 according to a company presentation to

Excluding ABS/MBS, equity-related debt. investors. Source: Refinitiv SDC code: N9 Source: Refinitiv SDC code: N8a The renewable energy is largely coming from virtual power purchase agreements ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS INCLUDING made by the company to source wind and EXCLUDING SECURITISATIONS SECURITISATIONS solar energy to run Verizon’s network. BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE The company said it had already reached Managing No of Total Share Managing No of Total Share its 2025 goal of reducing carbon intensity by bank or group issues £(m) (%) bank or group issues SFr(m) (%) 50% and that it intends to be carbon neutral by 2035. 1 HSBC 76 12,317.96 11.4 1 Credit Suisse 108 13,516.1 31.5 Bookrunners Bank of America, Citigroup, 2 NatWest Markets 66 11,644.75 10.8 2 UBS 85 9,214.9 21.4 Loop Capital and Siebert Williams Shank led the 3 Barclays 77 11,142.76 10.3 3 ZKB 54 6,926.5 16.1 deal. 4 RBC 37 9,786.33 9.1 4 Verband Schweizerischer 18 5,951.0 13.9 5 Lloyds Bank 31 8,187.07 7.6 5 Raiffeisen Schweiz 35 3,212.3 7.5 AT&T LOWERS INTEREST COSTS BUT UPS 6 Citigroup 28 7,633.06 7.1 6 Deutsche Bank 10 1,482.6 3.5 DURATION IN JUMBO EXCHANGE 7 Bank of America 29 7,162.90 6.6 7 Basler KB 8 601.0 1.4 8 JP Morgan 24 5,653.85 5.2 8 Commerzbank 7 599.1 1.4 AT&T gave its balance sheet another good 9 BNP Paribas 25 5,157.72 4.8 9 BNP Paribas 6 415.5 1.0 scrubbing last week, completing a jumbo 10 Deutsche Bank 23 4,953.68 4.6 10 Luzerner KB 2 281.3 0.7 Total 179 107,790.97 Total 180 42,979.2 debt exchange that pushed out maturities

Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt. and lowered funding costs but also Source: Refinitiv SDC code: K05a Source: Refinitiv increased duration risk for investors.

International Financing Review September 19 2020 33

5 IFR Bonds 2351 p25-61.indd 33 18/09/2020 20:07:35 The move is part of a broader trend “If you think the spread is attractive, then The company raised €2.6bn through the among borrowers seeking to take advantage you buy the bond and hedge out the interest issue of March 2029s, March 2033s and OFûLOWûRATESûTOûRElNANCEûEXPENSIVEûDEBTûINûAû rate risks.” March 2040s, sold at spreads of 45bp, 60bp market that draws comfort from the Federal Either way, treasurers are seeing the and 80bp over mid-swaps. Reserve’s pledge to support the credit current environment as an opportunity to The bonds were initially marketed at markets. clean up balance sheets at time when 65bp–70bp, 75bp–80bp and the 100bp area. The telecoms company, already adept at investors may turn a blind eye to the costs these transactions, having done several in involved in such liability management GREEN DEMAND recent years, on this occasion targetted a trades. Digital Realty (Baa2/BBB/BBB), the US REIT string of bonds maturing between 2031 and “It has everything to do with tax and focused on data centres, was also in the 2057 with coupons ranging from as low as accounting position of the company and market on the same day to sell a €750m 4.30% to as high as 8.75%. their view on what could happen to tax January 2032 green bond, along with a In exchange for those bonds, the rates,” said a senior banker. õMû3EPTEMBERûûmOATER company offered investors cash plus new “The juxtaposition of Coke tendering for The San Francisco-headquartered 3.5% 2053s, 3.55% 2055s and 3.65% 2059s, bonds at a steep dollar price of 130 or 135, or company has a substantial presence in which were priced at 99.418, 99.404 and in the case of AT&T taking a long-dated bond Europe and is a regular euro borrower, 99.382 to yield 3.53%, 3.58% and 3.68%. and exchanging it even further out the issuing the new bonds through its In all, the company will issue US$7.5bn of curve and enjoy the tax and accounting Netherlands-listed subsidiary Digital Dutch the 2053s, US$7.5bn of the 2055s and implications of that. Two very sophisticated Finco. That meant the notes are eligible for US$6.5bn of the 2059s, saving itself some borrowers reaching two different the ECB’s bond buying programme. US$150m in annual interest payments, conclusions.” After starting marketing at the 165bp according to CreditSights. area and three-month Euribor plus 75bp “The terms of the exchange were clearly area, leads were able to revise spreads attractive as AT&T was paying a premium,” EUROS down to 125bp and a discount margin of SAIDûTHEûRESEARCHûlRM ûNOTINGûTHATûTHEû 48.4bp. company was able to upsize the new issue CORPORATES REVISIT REVERSE YANKEES Chiming with other recent deals, demand from US$15bn. for the green tranche was particularly An exchange also worked better for AT&T A trio of US corporate borrower sold bonds strong, with books ending up over €2.9bn. than a tender given holders’ desire to in the euro market last week as funding /RDERSûFORûTHEûmOATERûlNISHEDûOVERûõM maintain their exposure to the credit, said a levels in the currency improve relative to “Data centres and green is actually an banker close to the deal. their home market, allowing them to get interesting area,” said one asset manager. Yet while that is positive news for the away strategic trades. “They use a huge amount of energy and company, investors have to factor in the Drinks-maker COCA-COLA, data centre REIT personally I see it as quite important that increased duration risks that come with DIGITAL REALTY and confectioner MONDELEZ some companies are looking to address pushing out the maturities in its bond stack. each sold bonds, bolstering what has been a that.” “While it is nice to see them try to slow supply of reverse Yankees. Last Wednesday, Mondelez stepped back streamline their balance sheets, they are “The gap between the euro and US dollar into euros to sell a dual-tranche bond. While extending duration considerably,” said Scott market has closed a bit recently in terms of the borrower has had an active year in its Barnard, a portfolio manager at asset funding levels, but issuance of reverse domestic funding market, it had not raised manager Westwood Holdings Group. Yankees will likely remain strategic and euros in 12 months. “It does have an impact on the price of opportunistic,” said Lars Veltmann, director, The new €500m six-year and €750m nine- their other longer bonds and results in DCM Americas, UniCredit. year received a strong response from a steeper credit curves.” “Not only because the dollar market is European investor base that has seen a While AT&T’s net debt is down about 10% still attractive but also as many issuers dwindling number of US credits tapping the on the year, its index DV01 – a measure of have completed their funding for the market. duration, or bonds’ price sensitivity to year.” “They are a great name and one that interest rate moves – is up over 40%, said US corporates have been much less active doesn’t hit the [euro] market regularly, plus Jason Shoup, head of global credit strategy in the euro market this year thanks to there aren’t that many US names issuing at Legal & General Investment Management favourable conditions in their home market. anyway,” said the second banker. America. As of the end of last week, just over €51bn Books peaked at over €3.25bn, with leads h4HATûISûPARTûOFûTHEûRAMIlCATIONSûOFûALLû of reverse Yankees had been issued in 2020, able to cut spreads down to 50bp and 70bp, THESEûRElS vûSAIDû3HOUPû compared to more than €70bn at the same from IPTs of the 80bp area and 90bp–95bp. “You have the Fed backstopping and stage last year, according to IFR data. The issuer is rated A3/BBB. buying the front end, you have companies But last Monday, Coca-Cola (A1/A+) was in “It looked like a respectable result and buying back their own debt at the front end, the market to fund a tender offer for its you can see why investors like them. Fine and all the risk is shifted out further in the 2021 and 2022 euro maturities (as well as rating and they have come out of the curve and that’s why you’re seeing a lVEû53ûDOLLARûNOTES pandemic okay, not one of the businesses steepening out of the credit curve.” )NûSOMEûRESPECTSûTHEûDEALûFELLûmAT ûASûTHEû worst affected,” said a third banker. Duration risk, of course, can be hedged, borrower had to pay single or even double- Proceeds from the bond issue will, in part, and some investors are happy to do that as digit premiums, according to some bankers. be used to repay US$750m of a loan, under a they seek higher yields further up the curve. “That trade wasn’t ECB-eligible and it US$1.5bn term loan agreement due to “It is really about the spread,” said Jim came with little spread to begin with, and mature next year. #ARON ûPORTFOLIOûMANAGERûFORûGLOBALûlXEDû that, I think, is a theme among those issuers Mondelez last issued euros in September income at Morgan Stanley Investment that do have to pay a little more,” said a 2019, when it raised €500m with a 0.875% Management. second banker. October 2031.

34 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 34 18/09/2020 20:07:35 BONDS CORPORATES

CUSPY CORPORATE CREDITS FARE WELL Although the business falls within the The European high-grade corporate IN EURO PRIMARY leisure and travel industry, it is seen by supply going into this week is expected to some as less vulnerable to the pandemic continue along similar lines in terms of Two borderline investment-grade than others from the sector. volume, say bankers. corporates easily accessed the euro market h)TûISûWELLûPOSITIONEDûTOûBENElTûFROMûAû “No records are going to be broken, but last Thursday, taking advantage of relentless recovery given its leading position in the there might be a pick-up as we go into the demand for higher-yielding assets. market, and of course bear in mind that fourth quarter given the good spread Investors have been happy to take even a company like Ryanair is able to issue PERFORMANCE vûSAIDûTHEûlRSTûBANKER exposure to borrowers most at risk from the these days,” said a fourth banker. One potential borrower could be SCENTRE pandemic and those straddling the Amadeus last tapped the market in May GROUP, which last week issued subordinated investment-grade/non-investment-grade when it raised €1bn via a two-tranche bond bonds in the US dollar market and signalled divide, providing they offer an acceptable offering. a potential follow-up of a similar offering in yield. euros. “The hunt for yield never went away, but TERNA CLOSES WEEK WITH we are seeing it expressed more keenly now OPPORTUNISTIC NO-GROW given the greater levels of stability in the STERLING market,” said a syndicate banker. Italian utility TERNA tapped the euro market last Forklift truck-maker KION GROUP, rated Friday, taking advantage of an otherwise clear BURBERRY IN VOGUE WITH FASHION’S BB+/BBB–, and AMADEUS IT GROUP, an IT CORPORATEûPRIMARYûANDûlRMûMARKETûCONDITIONSû FIRST SUSTAINABLE BOND specialist focused on the travel industry and for high-grade debt to take €500m of funding. rated Baa2/BBB– (both negative), each “You are seeing more deals of limited size, BURBERRYûMODELLEDûAûSERIESûOFûlRSTSûINûLASTû printed benchmark deals without any which suggests that issuers are being Monday’s sterling market, selling not only DIFlCULTIES opportunistic,” said a syndicate banker. its inaugural bond issue but also the debut “The effects of the pandemic have The electricity grid operator, rated Baa2/ sustainable bond from the luxury goods become a lot clearer to investors, so perhaps BBB+/BBB+, did have to pay a concession of sector. those [companies] more exposed get a few 2bp–5bp, based on bankers’ estimates, to The landmark deal caught investors’ more questions, but it is not really an issue,” sell its no-grow September 2030s. interest with orders for the £300m no-grow said a second syndicate banker. The premium potentially highlights an September 2025 quickly reaching £2.45bn. Kion, a relatively cyclical name, stood out investor preference for higher spread Although debut issuers and ESG debt more if for no other reason than the extent borrowers at the moment and a greater often attract strong investor demand, it was of the price tightening during the execution price sensitivity around those issuers not necessarily clear at the outset how process. offering bonds at tighter levels, said a strong the response would be. Leads began marketing a €500m no-grow second banker. h7ITHûlRST TIMEûISSUERS ûINVESTORSûWANTûTOû September 2025 note issue at 2.375%-2.50% Leads BNP Paribas, Bank of America, Goldman know whether they will become regular but a book of more than €3.7bn saw that Sachs, IMI-Intesa, Morgan Stanley, SMBC Nikko, issuers so that they know it is worth doing whittled down to 1.75%. Societe Generale and UniCredit initially all the credit work,” said a banker. “It offered some spread and was ECB- marketed the bonds at a spread of the swaps “Burberry doesn’t strictly need to issue eligible, I think that pretty much ticks all plus 90bp area, but brought this down to but it is protecting its liquidity through the boxes,” said a third banker. 65bp. Orders peaked at over €1.6bn. Covid. It is not necessarily convincing to say 7HILEû+IONûISûNOTûAûlRST TIMEûISSUERûITûHADû With a well established euro senior curve they will be issuing regularly.” no other bonds outstanding prior to the new out to 2032, leads used the issuer’s own But the focus of the new bond’s use of trade and therefore fair value was highly bonds for price points. Terna had a 1% April proceeds, as well as the strength of the subjective. 2026 at 48bp, a 1.375% July 2027 at 50bp, a name, supported robust demand for the For price points, leads suggested notes 1% October 2028 at 52bp and a 0.750% July issue. from similarly rated credits such as Signify 2032 bid at 70bp, pre-announcement. The level of support for the deal also (Baa3/BBB–) and CNH Industrial (Baa3/BBB/ Despite the relative safety of utility sector allowed bookrunners HSBC, JP Morgan, BBB–). issuers, like many network operators Terna NatWest Markets and Societe Generale to Signify had May 2024s bid at 0.81%, while has been affected by a fall in energy use substantially revise the spread to land at CNH had September 2025s at 0.96%, since the start of the Covid-19 pandemic. 135bp over Gilts, from 180bp area IPTs. Only ACCORDINGûTOû2ElNITIV Only last week the company announced a handful of orders fell away, with the latest With the latest deal, Kion may look to that energy consumption was down 1.4% in update showing a book of more than repay outstanding debt. In May, the August compared with the same month in £2.35bn. company agreed on a credit facility of up to û$EMANDûINûTHEûlRSTûEIGHTûMONTHSûOFû “They didn’t pick low-hanging fruit, but €1bn with its core group of lenders and 2020 decreased by 7.7% compared with the they are focusing on areas where they still Germany’s development bank KfW. corresponding period of 2019. have work to do. In a sense, there is no point Additionally, Terna’s rating is constrained focusing on something you are already AMADEUS REVISITS by the performance of the sovereign. doing – the question investors should be Amadeus returned to the market for its “The negative outlook on electricity asking is ‘what are they going to be doing second bond issue of the year and was TRANSMISSIONûSYSTEMûOPERATORû4ERNAûREmECTSû that they weren’t doing before?’,” added the similarly able to tighten pricing for a €750m the negative outlook on Italy, which banker. September 2028 note offering, albeit not to constrains the rating on Terna,” wrote S&P In its sustainability bond framework the same extent. analysts in July. the UK fashion house outlines a series of Starting at plus 260bp area, leads revised S&P is the only rating agency to hold a goals around the company, its products pricing to plus 230bp with the book peaking negative outlook on Terna. The outlooks and the communities with which it is at more than €1.7bn. from Moody’s and Fitch are both stable. involved.

International Financing Review September 19 2020 35

5 IFR Bonds 2351 p25-61.indd 35 18/09/2020 20:07:35 These goals include an operational net £257m indicating a 45% fall compared with seven-year Australian dollar senior secured zero carbon footprint, to procure 100% of the same period during 2019. bond offering, having released initial price cotton more sustainably by 2022 and to Sales did increase as the quarter talk last Thursday at a wide 325bp–350bp positively impact one million people by PROGRESSED ûANDûTHEûCOMPANYûHASûBENElTEDû guidance range over asset swaps. 2022 via projects that tackle educational from a strong recovery in China. ANZ, NAB and Westpac are joint lead inequality, support social and economic Burberry also has strong liquidity. In early managers for the issuer which will development and community cohesion. 3EPTEMBERû ûITûHADûSIGNIlCANTûCASHû inevitably encounter some push-back from 3PECIlCûPROJECTSûTHATûTHEûCASHûRAISEDû balances, including the proceeds from its an increasingly ESG-focused investor base. through the bond issue can go towards £300m of drawings under its £600m HM Corporate price discovery is already INCLUDEûBUYINGûANDûRElTTINGûMOREûENERGYû Treasury and Bank of England Covid challenging due to the coronavirus with EFlCIENTûPROPERTIES ûSUSTAINABLYûSOURCINGû Corporate Financing Facility. badly hit industries like airlines having to cotton and sourcing recyclable packaging. Its liquidity is further supported by access pay far more than non-discretionary sectors to a £300m revolving credit facility, such as supermarkets and utilities. SUSTAINABLE STERLING according to Moody’s. This disparity was underlined by the 4HEûNEWûBONDSûALSOûBENElTEDûFROMûAûSWELLû respective 450bp and 177bp asset swap in demand for ESG assets among sterling spreads paid by Qantas and electricity buyers, coupled with relatively low supply. SWISS FRANCS generator Transgrid, both rated Baa2 “The sterling investor base is certainly (Moody’s), for their A$500m (US$365m) and catching up to Europe in terms of ESG,” said GLENCORE REFINANCES AND EXTENDS A$600m 10-year MTNs on September 1 and 15. a second banker. “The same type of liquidity AHEAD OF BURCKHARDT DEBUT is not available in sterling, but the market TAURANGA PLANS 2025 BOND appears to be very welcoming of debut ESG GLENCOREûPART RElNANCEDûANûUPCOMINGû issuers.” maturity on Tuesday with a SFr225m PORT OF TAURANGA, rated A– (S&P), has During the marketing process for the new (US$247m) 6.5-year deal, extending its Swiss mandated BNZ to arrange an investor call on Burberry bond, one asset manager focused franc curve by 18 months. 3EPTEMBERûûFORûAû.EWû:EALANDûDOLLARûlVE on the ESG sector said he was eager to see IPTs were sent out on Tuesday morning at YEARûlXED RATEûBONDûOFFERINGûFORûDOMESTICû the continued growth of sustainable debt in mid-swaps plus 140bp–145bp, with books institutional investors. the sterling market. opening for a SFr150m minimum at the The port previously visited the market in While borrowers such as publisher SAMEûLEVEL ûlNALLYûPRICINGû3&RMûATûTHEû January 2015 with a NZ$75m 4.792% six-year Pearson and water utilities Southern Water tight end, equivalent to Swiss governments secured note sale following a debut NZ$50m and Severn Trent have brought new issues plus 150.4bp, or a 0.905% yield. 5.865% six-year issue in October 2013. this year, the overall supply has remained 4HEûLEVELûWASûBROADLYûmATûTOû'LENCORESû low, especially in comparison with the euro extrapolated Swiss franc curve, as well as to market, he said. its euro curve, and came inside the h)TSûGREATûDIVERSIlCATIONûFORûINVESTORS û company’s US dollar curve, when adjusted and also from an issuer’s perspective, the for the cross-currency basis swap. FIG cost makes sense,” said a third banker. )TûPARTLYûRElNANCESûANûUPCOMINGû3&RMû “This was in addition to a decent 1.25% issue due in December this year. premium on offer as well. That’s probably Unusually for the Swiss market, the bonds US DOLLARS why it went better than the Coventry deal, feature a three-month par call. for example. Having said that, even at Gilts They were issued by Glencore Capital BANKS SPY TENDER OPPORTUNITIES plus 135bp, I would rather put my pension Finance DAC, guaranteed by Glencore plc, into a prime UK building society than Glencore International AG and Glencore Three banks announced new tender offers someone who makes chequered pants.” (Schweiz) AG. last week, taking advantage of low spreads Coventry Building Society (A2/A–) sold a Credit Suisse and UBS were leads. to lessen the pain of retiring short-term debt aMûlVE YEARûSENIORûPREFERREDûONû-ONDAYû Looking forward, BURCKHARDT COMPRESSION that no longer meets regulatory ATû'ILTSûPLUSûBP ûWITHûlNALûBOOKSûOFû HOLDING, a Swiss company making requirements. around £265m. reciprocating compressor systems, is JP MORGAN, NATWEST GROUP and HSBC each HOLDINGûAûlXEDûINCOMEûINVESTORûCALLûONû came with offers to retire short-term debt, REACH AND LIQUIDITY Monday September 21 via ZKB ahead of a but only HSBC has so far offered new bonds Earlier in September, Moody’s handed potential senior unsecured issue. to replace what was tendered. "URBERRYûITSûlRST TIMEûISSUERûRATINGûOFû"AA û Proceeds from any resulting bond issue On Tuesday HSBC Holdings priced a basing this on the brand’s global reach as well WILLûBEûUSEDûTOûlNANCEûTHEûPURCHASEûOFûTHEû 53BNûEIGHT YEARûNON CALLûSEVEN YEARûlXED THEûCOMPANYSûCONSERVATIVEûlNANCIALûPOLICIES remaining 40% of shares in Shenyang TO mOATûBONDûATûBPûOVERû4REASURIES û The agency does, however, consider the Yuanda Compressor, a Chinese company in which will be used to help fund a tender corporate’s reliance on a single brand, which it took a 60% interest in March 2016. offer for six series of notes with an aggregate LIMITEDûPRODUCTûDIVERSIlCATION ûTHEûHIGHû principal amount outstanding of US$8.14bn. level of competition within the luxury goods Meanwhile, NatWest is tendering for four market and uncertainty around the NON-CORE CURRENCIES series of notes totalling US$4.4bn and JP company’s transformation strategy all as Morgan for nine with US$16.25bn potential risks. DBCT PONDERS INVESTOR FEEDBACK outstanding. )NûTHEûlSCALûYEARûENDINGû-ARCHû û The main driver for these tender offers is Burberry had generated £2.6bn of revenue. DBCT FINANCEû"AA""""""n ûTHEûlNANCINGû to retire debt that no longer meets May to June results were severely affected arm of Queensland’s Dalrymple Bay Coal regulatory requirements for total loss- by the Covid-19 pandemic, revenues of Terminal, has yet to print its proposed absorbing capacity, bankers said.

36 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 36 18/09/2020 20:07:35 BONDS FIG

Munich Re casts spell on green market with Tier 2 debut

FINANCIALS Demand for green asset lifts insurance company’s debut

MUNICH RE made a dramatic entry into the green The syndicate banker on the deal said the bound to draw crowds, a €1bn “green positive bond market last Tuesday with a debut Tier 2 pricing was a good 10bp through fair value. impact” bond for Societe Generale was also a offering, a deal that emerged against a buoyant Munich Re’s 2049 non-call 2029 were quoted clear hit with investors with books passing €5bn backdrop for issuance in the format. around 160bp. The tight print meant that some for the €1bn eight-year non-call seven senior Insurance companies have increasingly been demand was lost with books dropping by €1bn non-preferred. turning to green debt as they look to bolster to €4.7bn. “All the green trades have been blowouts their ESG credentials, but remain relatively rare Still, it helped that Munich Re is a rare issuer. this week,” said a banker close to the deal. “This in the format. While it has issued recently, the reinsurer was SG’s fourth senior non preferred this year so In the case of Munich Re, the deal was not remains a rare sight in the primary market. Its they’re not exactly infrequent.” only its debut in the format but was also the first 2049 non-call 2029 bond was its most recent The strong demand allowed for a sharp from a German insurance company. foray into the market, but prior to that it had not pricing revision from the 155bp–160bp IPTs, with The transaction emerged against a busy issued since 2012, according to IFR data. the trade landing at 128bp over. backdrop for issuance in the format last week “The book was bigger than BPCE’s the week with UNIPOL also pricing a debut in the format NO ALTERNATIVE before which had to pay a new-issue premium (see separate story). Like Scor, bankers said that the spread and yield whereas SG didn’t,” the banker said. “This priced “There’s a huge amount of liquidity and the on offer were a clear draw for investors that have flat to fair value based on the conventional market is clearly feverish for ESG product,” said a few alternatives in the Single A band. The bonds curve.” syndicate banker on the trade. are expected to be rated A/A by S&P/Fitch. Commerzbank picked up where the French Following some swift but efficient investor work, “This is extremely well-rated paper; there’s bank left off, bringing a second green senior leads Citigroup, Credit Agricole, Deutsche Bank, just not that much subordinated debt paper out non-preferred. It was also its debut SNP in the Goldman Sachs and HSBC started marketing the 20- there with these kind of ratings,” another DCM callable format. year non-call 10 at the 190bp area over mid-swaps. banker said. Books grew rapidly, closing at more than “It’s a great name, everybody likes Munich Re. “If you add that to their rarity value and the €4bn for the €500m no-grow 5.5NC4.5 via They have a super high solvency ratio, which clearly fact that this is green, these are all very powerful Commerzbank, Danske Bank, ING, Natixis and investors like,” said a banker away from the trade, arguments to buy the bonds.” Santander. adding that it would be interesting to see whether And while the debate continues as to whether “We had the wind in our sails after the SG Munich Re would be able to land at the same level subordinated paper is an appropriate instrument trade and decided to go intra-day as we felt or even beat the level achieved by Scor last week. for financial institutions to use to raise green debt, investors were familiar with our framework,” a With books passing the €5.7bn mark at the investors were convinced by Munich Re’s framework. banker close to the deal said. peak, the German insurance company shaved “There’s a structural issue why insurance “We didn’t pay any new-issue premium 5bp off the Scor pricing, landing at 155bp, some companies do more subordinated green,” the and didn’t pay a call premium. Arguably, you 35bp tighter than IPTs. second DCM banker said. could say the call premium was eaten by the At €1.25bn, the trade is the largest green “Insurance companies don’t tend to do much greenium.” financial hybrid raised in the single currency. senior. If they want to do green, it will tend to be The previous week BPCE paid around 12bp for “It’s very much around fair value or better done via subordinated debt.” the call feature. depending on how you see 20-year non-call 10 Unlike banks that can choose from senior “You could say that doing green gives you an versus 30-year non-call 10, but the green label non-preferred, senior preferred and covered 8bp–10bp advantage.” was clearly a strong argument for the investor bonds, insurance companies have fewer options. Banks in Europe are increasingly using base,” a DCM banker said. the callable structure as a more effective “Also, while we see a lot of liquidity trades CLEAR HITS way of managing their stack of MREL- like covered bonds get done with a green label While an inaugural deal from a rare and well- eligible debt. attached, you see a lot fewer capital trades.” liked name such as Munich Re was always Helene Durand

Banks could issue more debt at a lower “We were expecting a JP Morgan deal and And unwinding hedges made against all-in cost as HSBC did last week, but the big it’s a little strange we haven’t seen it yet,” those trades and eliminating those costs six US banks have already raised enormous said Jason Shoup, head of global credit could also justify tendering for amounts in the bond markets this year. strategy at Legal & General Investment outstanding bonds, one senior banker And banks have more TLAC funding than Management America. said. they need after years of issuance and h)TSûAûLOTûMOREûDIFlCULTûNOWûTOûPREDICTû “You’re getting to a point where the cost changing balance sheet needs amid the when a bank comes to market.” of taking out that front-end debt is really pandemic. Yet even without a new bond deal, it low,” Shoup said. JP Morgan in particular could use its could still be attractive to buy back debt “It’s already trading close to where the wealth of cash on hand to pay for the tender whose spreads have tightened but often make-wholes are on the bonds, so to a offers but some still expect a new bond deal remain wide to where they were originally certain extent that helps precipitate less to follow. priced. painful math.”

International Financing Review September 19 2020 37

5 IFR Bonds 2351 p25-61.indd 37 18/09/2020 20:07:36 EUROPEAN BANKS ATTRACTED TO US Tier 2 subordinated note that received Baa3/ Most recently, it priced a US$1bn 11NC10 DOLLAR RATES BB+/BBB+ ratings. lXED TO mOATûSENIORûUNSECUREDûBONDûATû Barclays landed the new offering at 290bp 190bp over Treasuries in June. That 2.645% Five European banks were in the US high- over Treasuries, in just 10bp from initial 2031 was trading at around 188bp over grade primary market last week to take price thoughts of 300bp area. Treasuries on Friday, according to advantage of attractive funding rates in the /NEûLEADûSYNDICATEûBANKERûSAIDûlNALû MarketAxess data. asset class as currency rate differentials orders totalled US$2.5bn. compress. “I think there is a Brexit overhang on UNICREDIT, HSBC, BARCLAYS, RABOBANK and pricing and demand,” one investor said. EUROS SWEDBANK collectively priced US$6bn. By comparison, UK peer NatWest Group, They added to a booming year for Yankee rated Baa2/BBB/A, priced a similar US$850m UNIPOL OVERCOMES HURDLES TO LAND bank supply, which is up to more than long 15NC10 Tier 2 note late last month at SUB-HIGH-GRADE GREEN RECORD US$140bn year-to-date, compared with Treasuries plus 235bp — 55bp tight to US$116.45bn by the same time last year, Barclays despite receiving the same Baa3/ UNIPOL overcame a lack of an investment- according to IFR data. BB+/BBB+ subordinated ratings. grade rating to land the biggest green “Companies are looking across different Since then, however, the Brexit issue has high-yield deal in the single currency, a currencies,” the banker said. “Spreads in INTENSIlED ûWITHûTHEû5+ûGOVERNMENTû trade that was not only impressive in size dollars have performed better than euros, so introducing a controversial bill last week but was also priced through fair value. when you’re looking at the cross-currency that would seek to override parts of the The €750m 10-year transaction marked opportunities the dollar market tends to be country’s exit agreement with the European the Italian insurance company’s debut in a little better for most names at most parts Union, which came into effect in January. the green format, emerging in a week of of the curve.” An investor noted that Barclays and feverish demand for these assets. For RABOBANK, rated A3/A-/A+, that meant NatWest paper appeared to be widening the “If you asked me three months ago what pricing its debut green bond in US dollars. most among UK bank names in the green was worth generically, I would have 4HEû53BNûSIX YEARûNON CALLûlVE YEARû secondary market. said a couple of basis points, but that’s senior non-preferred bond will fund a The new bond from Barclays was its changed and we’re consistently seeing deals portfolio of renewable energy projects, fourth US dollar offering this year, bringing come 5bp–10bp through where a ACCORDINGûTOûAûlLINGû the total raised in the asset class to conventional would,” said a banker away The bond priced at 73bp over Treasuries, US$5.5bn. from the deal. after guidance was set at 75bp, plus or ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION minus 2bp. BOOKRUNNERS: 1/1/2020 TO DATE BONDS (ALL CURRENCIES) Initial price thoughts were 90bp area BOOKRUNNERS: 1/1/2020 TO DATE over, inside plus 100bp where Rabobank Managing No of Total Share bank or group issues €(m) (%) priced a US$1bn 1.339% 2026 in June in its Managing No of Total Share 1 Credit Agricole 58 16,552.61 9.9 bank or group issues US$(m) (%) only other US dollar bond this year. 2 Deutsche Bank 50 11,198.54 6.7 This was also Rabobank’s second green 1 Citigroup 34 6,354.22 8.5 3 SG 37 11,033.88 6.6 bond, following its debut deal in euros in 2 JP Morgan 37 6,005.51 8.0 4 BNP Paribas 45 9,826.36 5.9 October. 3 HSBC 31 5,247.14 7.0 5 JP Morgan 60 9,819.04 5.9 The €750m seven-year green bond priced 4 Credit Agricole 19 4,980.98 6.7 6 Barclays 48 9,334.55 5.6 at mid-swaps plus 45bp and garnered a 5 Barclays 24 4,795.50 6.4 7 Natixis 30 9,045.40 5.4 €1.8bn order book. 6 Bank of America 27 4,557.06 6.1 8 HSBC 47 7,348.41 4.4 SWEDBANK also received strong support on 7 UBS 20 4,077.78 5.4 9 UniCredit 34 6,161.12 3.7 Thursday for a US$1bn three-year senior 8 Morgan Stanley 25 3,921.59 5.2 10 Goldman Sachs 36 5,463.95 3.3 9 Credit Suisse 15 3,861.69 5.2 preferred at 45bp over Treasuries, in from Total 283 167,077.48 initial price thoughts of 60bp area. 10 Goldman Sachs 23 3,853.82 5.1 Including banks, insurance companies and finance companies. Excluding Total 110 74,888.93 This was Swedbank’s second US dollar equity-related and covered bonds. Excluding publicly owned institutions. offering of the year, after avoiding the Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a market completely in 2018 and 2019, ALL GLOBAL AND EUROMARKET YEN BONDS ALL INTERNATIONAL YEN BONDS according to IFR data. BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE The new bond tightened through price progression on scarcity value but still Managing No of Total Share Managing No of Total Share bank or group issues ¥(m) (%) bank or group issues ¥(m) (%) launched some 7bp wide of where its nearly identical three-year senior preferred 1 Mizuho 7 109,441.67 21.3 1 Sumitomo Mitsui 24 213,709.67 23.6 offering from May was quoted. 2 Sumitomo Mitsui 9 86,559.67 16.8 2 Mizuho 11 137,791.67 15.2 Swedbank’s 1.30% 2023 was seen trading on 3 Goldman Sachs 3 76,275.00 14.8 3 Nomura 17 104,083.33 11.5 MarketAxess at 38bp over Treasuries, in from 4 JP Morgan 1 48,875.00 9.5 4 Daiwa Securities 16 101,783.33 11.2 pricing of 112.5bp, according to IFR data. 5 Bank of America 1 48,875.00 9.5 5 Mitsubishi UFJ MS 11 78,816.67 8.7 6 Mitsubishi UFJ MS 3 33,466.67 6.5 6 Goldman Sachs 3 76,275.00 8.4 BREXIT OVERHANG 7 Nomura 3 27,833.33 5.4 7 Bank of America 1 48,875.00 5.4 Earlier in the week, BARCLAYS priced a 8 Credit Agricole 3 12,535.00 2.4 8 JP Morgan 1 48,875.00 5.4 US$1bn subordinated bond in a deal that 9 BNP Paribas 1 12,500.00 2.4 9 Credit Agricole 6 32,885.00 3.6 WASûNOTûABLEûTOûTIGHTENûSIGNIlCANTLYûTHROUGHû 10 MUFG 1 12,500.00 2.4 10 BNP Paribas 1 12,500.00 1.4 Total 17 514,628.00 Total 36 905,528.00 price progression. Excluding equity-related debt. Including preferreds. Including all Euro, foreign and global issues. Excluding equity-related The UK bank, rated Baa2/BBB/A at the debt.

unsecured level, priced a 15-year non-call 10 Source: Refinitiv SDC code: K10 Source: Refinitiv SDC code: K12

38 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 38 18/09/2020 20:07:36 BONDS FIG

“Daimler came 20bp through, Orange BEûABLEûTOûRElNANCEûTHEûDEALûONûATTRACTIVEû HCOB is rated Baa2/BBB by Moody’s/S&P, came 20bp through; there is a demonstrable economic terms, likely landing well inside the while the transaction is expected to be rated BENElTûFROMûDOINGûGREENv outstanding bond’s reset spread of 598.9bp. Ba3 by Moody’s. Unipol surfaced a day after Munich Re’s However, others said that the Danish The bank has been undergoing a €1.25bn debut in the format (see separate bank’s strong capital ratio made the restructuring process, cutting costs and story), a €1.25bn long 20NC10 that was likelihood of Nykredit replacing the old reducing bad loans, though the Covid crisis priced 10bp through fair value and was the bond with a new one uncertain. is likely to hamper its progress. Previously LARGESTûGREENûlNANCIALûHYBRIDûRAISEDûINûTHEû At the end of Q2, Nykredit’s Total Capital known as HSH Nordbank, the bank was single currency. Ratio stood at 23.2% and its Common Equity REBRANDEDûASû(#/"ûINûû)TûWASûTHEûlRSTû With an expected rating of Ba2/BB+, it Tier 1 ratio at 19.2%, down from 24.5% and Landesbank to be privatised in Germany and was always going to be different for Unipol, 20.2%, respectively, at the end of Q1. is primarily private equity-owned. though it did manage to nail the record for “I guess they could still do an AT1 but you “The past year and a half we have made pricing the largest sub-investment-grade COULDNTûCALLûITûAûRElûASûSUCHûASûNORMALLYû more progress than expected and achieved green euro trade. issuers would do the new deal and then VISIBLEûSUCCESSESûnûDESPITEûTHEûDIFlCULTû “The deal had a lot going for it but it also call,” a banker said. “It’s a good name economic development in the wake of the had a lot of hurdles to overcome,” a lead though, pure domestic player with a Covid-19 crisis,” the bank said in a statement said. massive market share in Denmark. They at the end of August. “It’s Italian, it’s Double B, it’s €750m, COULDûDElNITELYûDOûAûDEALûIFûTHEYûWANTEDûTOv “The impacts of the Covid-19 pandemic which is quite large, and it’s 10-year, not the !NûOFlCIALûATû.YKREDITûDECLINEDûTOû will continue to be clearly felt, and the easiest at the best of times. There were a few comment as to whether it would look to extent of these impacts is currently not things that could have gone wrong but raise AT1 debt in the future. foreseeable, either for HCOB or for the didn’t, thankfully.” “We’ve not made any announcements in economy as a whole.” Leads BNP Paribas, IMI-Intesa, JP Morgan, that regard,” he said. “Our capital ratios Calls will be held early this week for the Mediobanca and UniCredit started marketing speak for themselves.” deal. The bank successfully shrugged off an at 390bp area over mid-swaps. INVESTORûBOYCOTTûTOûSELLûITSûlRSTûPOST h4HEûlRSTûBOOKûUPDATEûWASûõBN ûNOTûASû HCOB REVIVES TIER 2 PLAN privatisation bond last year, though that was strong as I’d expected,” said a banker away. a €500m senior preferred and not a “I was a bit surprised not to see a bigger HAMBURG COMMERCIAL BANK has revived plans to subordinated trade. The boycott was related book update given the appetite we’ve seen raise Tier 2 debt, delayed from earlier this to a dispute regarding a writedown of the for green bonds this week. But then again, year, as it looks to support its credit ratings. bank’s Tier 1 debt. the deals for Credem and Banco BPM didn’t The German bank originally mandated It later bought back almost all of the go as well as I thought they would. I’d BNP Paribas, Deutsche Bank, Goldman Sachs and offending bonds in a liability management EXPECTEDûTHEMûTOûmYv Morgan Stanley in February to hold a exercise in 2019. That €1.5bn of demand was enough to ROADSHOWûFORûAû YEARûNON CALLûlVEû4IERûû embolden other investors to pile into the The bank has now added Citigroup to the trade and books closed at over €2.9bn. LINE UPûANDûTWEAKEDûTHEûSTRUCTUREûTOûAûlVE STERLING While demand was strong, pricing was year bullet. also impressive, the 350bp print coming “I think the delay was partly due to HOME IS NOT WHERE THE HEART IS some 10bp through fair value. valuations and the fact that they weren’t quite FOR COVENTRY “From an attractiveness perspective, there ready to do the trade,” a banker involved said. aren’t many transactions you can buy with The iBoxx euro banks subordinated index COVENTRY BUILDING SOCIETY failed to match the such a spread at the moment, even in high- was quoted at 106bp over asset swaps when success of country peer Yorkshire Building yield,” the lead said. “If you think the HCOB announced its trade. But by the time 3OCIETYSûRECENTûEUROûTRADE ûWITHûITSûlVE YEARû market is strong, you buy the highest spread THEûROADSHOWûlNISHEDûINûEARLYû-ARCH ûITûHADû senior preferred sterling issue just getting and longest duration you can. This ticked widened to 186bp as concerns around the over the line last Monday despite the issuer both boxes while the green added to the coronavirus started to escalate, eventually bringing what market participants deemed positive feedback loop.” peaking at 368bp on March 24. It closed at a reasonable trade. 154bp on Thursday. The UK lender started marketing the NYKREDIT ENDS SPECULATION WITH “The rationale for the deal is that they benchmark-sized transaction at 120bp area AT1 CALL want to shore up their ratings, so they didn’t over Gilts, but a tepid response from need to do it so quickly,” said the banker. investors meant that leads BNP Paribas, HSBC, NYKREDIT ended speculation over whether it The bank has a CET1 ratio of 21.7%. JP Morgan, Santander and TD were left stuck WOULDûPRE lNANCEûANû!DDITIONALû4IERûûBONDûDUEû However, under Moody’s rating at that level for the pricing of the £250m to be called next month, after the bank said it methodology for Loss Given Failure (LGF), deal. Books closed at around £265m. WOULDûBEûCALLINGûTHEûOUTSTANDINGûDEALûlRST the larger the quantum of debt, the more “We were scratching our heads a little bit The bank’s €500m 6.25% perpetual widely any loss would be spread among its on that one,” a banker said. “We thought it security, which was issued in 2015, was the creditors, thereby reducing individual looked sensible, starting about 15bp cheap, last major currency AT1 from a European losses. was in the right part of the curve, and while bank that was still due for call in 2020 and “It’s just how the methodology works; if there were some Brexit headlines at the HADûNOTûYETûBEENûRElNANCED you have some Tier 2 it shores up your weekend, the picture hasn’t shifted from The lender has now said that it has senior rating,” the banker said. last week.” OBTAINEDûAPPROVALûFROMûTHEû$ANISHûlNANCIALû h4HISûISûWHYûITSûAûlVE YEARûBULLETûASûWELLû 9"3ûSUCCESSFULLYûPRINTEDûAûõMûlVE authority to call the bond on October 26. !ûlVE YEARû4IERûûBULLETûSHOULDûWORKûVERYû year senior preferred on over €1.75bn of Some market participants had said that in well. There’s no considerations around demand the week before last, allowing the the current market conditions Nykredit would reset, and it will pay a big spread.” leads to tighten by 15bp from IPTs.

International Financing Review September 19 2020 39

5 IFR Bonds 2351 p25-61.indd 39 18/09/2020 20:07:36 Deutsche pulls SNP Kangaroo FINANCIALS Bank downplays lack of investor engagement

DEUTSCHE BANK pulled a planned five-year senior generally priced well within initial guidance in low Triple B ratings of Baa3/BBB–/BBB in senior non-preferred Kangaroo bond after announcing recent months. non-preferred format – an instrument rarely the trade on Wednesday with indicative These trades, primarily in senior unsecured seen in the Kangaroo market – and from a credit guidance of asset swaps plus 250bp area. and covered bond formats, have benefited from they do not know very well. The offering, led by Deutsche Bank, ANZ, CBA, the absence of Australia’s major and regional Deutsche Bank last tapped the Australian NAB and Westpac, failed to attract sufficient banks, which have far cheaper sources of dollar market in 2018 with a A$450m five-year investor interest for a liquid benchmark issue. funding available to them, especially the Reserve transaction. The issuer is unlikely to attempt to “Having printed US$3.25bn across two Bank of Australia’s Term Funding Facility. sell the deal again. tranches off a US$9.5bn book recently, we The TFF was introduced in March to provide Like its European peers, the bank loaded up wanted to have a look at other markets, even A$90bn (US$66bn) of funding to authorised on cheap funding at the ECB TLTRO in June, though we don’t need to do more deals this deposit-taking institutions for three years at a fixed with a €30bn participation. year,” a person familiar with the deal said. interest rate of just 0.25%. It was recently expanded As a result, it was able to revise its issuance “This was a purely opportunistic transaction. to about A$200bn and extended until June 30 2021. plan down to €10bn–€15bn from €15bn–€20bn However, the market weakened during Scarcity value has its limits, however, as as well as reduce senior non-preferred marketing and some investors pulled their Deutsche Bank can now attest, while the fact requirements. orders. We thought there was no point in putting that bank Kangaroos are not repo-eligible with Before the US dollar deal, the bank had raised something that was small and illiquid out there.” the Reserve Bank of Australia will have all but just less than €4bn of SNP in the year to-date. This represents a rare setback in a market eliminated the local bank balance sheet bid. The dollar trade took the bank near the upper where bank Kangaroos and international banks’ Investors deemed a 250bp margin to be end of its €4bn–€7bn target for the year. Sydney branches have secured huge books and insufficient for a note issue that had expected Helene Durand, John Weavers

“I think the reason Yorkshire went as well (US$275m) eight-year at the tight end of A ¥36.1bn four-year non-call three priced as it did in euros is because they’re rare and guidance. at 77bp over three-year yen offer-side swaps. they were also offering a pick-up versus the Books opened for a minimum SFr200m at The coupon is 0.768% and, if not called, will sterling market if you were to swap the MID SWAPSûPLUSûBPnBP ûWITHûTHEûlNALû CHANGEûTOûAûmOATINGûRATEûEQUALûTOûTHEûSIX deal,” another banker said. “I think level was equivalent to Swiss governments month yen Libor plus 77bp. investors are generally comfortable with plus 67.2bp and a coupon and yield of !ûcBNûSIX YEARûNON CALLûlVEûPRICEDûATû Brexit as long as they’re being 0.125% at the par reoffer price. BPûOVERûlVE YEARû9/3û4HEûCOUPONûISû compensated.” At that level, the bonds came around 10bp 0.922% and, if not called, will change to the Other bankers speculated that more inside the company’s euro and US dollar curves, six-month yen Libor plus 92bp. exciting competing supply from corporates when adjusted for the cross-currency basis swap. A ¥7.5bn 10-year non-call nine priced at might have grabbed investors’ attention, Around 67 accounts took part, 102bp over nine-year YOS. The coupon is with Burberry selling not only its inaugural spearheaded by asset managers with 52%, 1.075% and, if not called, will change to six- bond issue but also the debut sustainable while insurers took 19% and bank treasuries month Libor plus 102bp. bond from the luxury goods sector. 13%. Private banks, pension funds and The expected ratings are Baa2/BBB/A–. That landmark deal caught investors’ corporates accounted for the remainder. The French bank started marketing the interest, with orders for the £300m no-grow The bonds were issued by Metropolitan yen trade on Tuesday night immediately September 2025 quickly reaching £2.45bn. Life Global Funding I, and rated Aa3/AA–/ after it launched a €1bn eight-year non-call “Coventry has done a fair amount as well, so AA–. Credit Suisse and Deutsche Bank were seven SNP “green positive impact” bond it’s maybe not that exciting for investors,” a leads on the deal. which was a clear hit with investors as DCM banker said. “A £265m book for a £250m Looking ahead, Triple A rated ZUERCHER books passed €5bn. trade is something you can do in covered. I KANTONALBANKûWILLûARRANGEûAûlXED INCOMEû At the beginning of marketing, the bank can’t see this tightening in secondary.” investor call on Monday September 28 for a WASûMARKETINGûJUSTûTHEûSIX YEARûNON CALLûlVEû A banker on the deal said the relative Swiss franc-denominated Additional Tier 1 and 10-year non-call nine tranches at 90bp– value play between the euro and sterling contingent writedown capital notes offering 92bp and 100bp–102bp, respectively. After it markets made Yorkshire attractive and that with expected instrument ratings of Baa1 SETûlNALûPRICEûGUIDANCEûFORûTHEûTWOûTRANCHESû Brexit headlines could have been a factor. from Moody’s. at 92bp and 102bp on Thursday, it added the “Also, spreads haven’t moved as much in four-year non-call three piece because of a sterling secondaries as they have euro, so reverse enquiry from a big investor and that maybe played a part,” he said. YEN marketed it at guidance of 77bp. These landing spreads were roughly within SG RETURNS WITH SNP EUROYEN the issuer’s euro curve. “They are not absurd SWISS FRANCS levels at all,” said a banker away from the deal. SOCIETE GENERALE (A1/A/A–) raised ¥64.7bn SG’s decision to begin marketing as soon METLIFE BRINGS EIGHTS AHEAD OF ZKB AT1 (US$617m) from a three-part senior non- as possible rather than wait for Tokyo hours preferred Euroyen bond offering soon after and to add a new opportunistic tranche METLIFE brought a new FA-backed deal on it drew huge demand for a SNP trade in ensured decent demand from foreign and Wednesday, pricing an upsized SFr250m euros. Japanese accounts.

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Life insurers and asset managers were initial 80bp area and revised 75bp–80bp area “It wasn’t clear that the primary intention major investors, while foreign accounts took guidance at three-month BBSW plus 70bp. was to go back to investment- grade,” said up about 10%. ANZ and UBS were joint lead managers for Steve Kellner, head of corporate bonds at The deal came after the departure of two Kiwibank, a subsidiary of state-owned New PGIM Fixed Income. Tokyo-based syndicate bankers at Societe Zealand Post, the New Zealand “I sense that the company is content to Generale, so the French house’s syndicate Superannuation Fund and Accident operate at these ratings right now. Their bankers in Hong Kong joined the other Compensation Corp. bonds trade pretty well, so they don’t have a bookrunners, Mizuho, Morgan Stanley (B&D) Bank of New Zealand issued a A$700m big risk premium associated with their bond and Nomura, to lead the transaction. lVE YEARûNOTEûINû*UNEû ûBUTûLIKEûTHEû spreads.” The new yen deal is the issuer’s second country’s other three major banks, it has Indeed, Kraft’s secondary bond prices THISûYEAR ûFOLLOWINGûAûcBNûlVE YEARû3.0ûINû subsequenty focused on the US and euro MADEûFEWûSIGNIlCANTûMOVESûAFTERûTHEû February. covered bond markets. investor day as the market drew comfort The only other overseas banks to sell from the company’s incremental steps COVEREDû+ANGAROOSûSINCEûTHEûlNANCIALûCRISISû taken to delever. NON-CORE CURRENCIES are four Canadian lenders (CIBC, Bank of Its 4.875% 2046 and 3.75% 2030 notes Nova Scotia, Royal Bank of Canada and even jumped around 1.5 points last week, ATHENE PLANS AUSSIE DEBUT Toronto-Dominion), Swedish mortgage WITHûTHEûRESTûLARGELYûmATûONûRELATIVELYûLOWû lender Stadshypotek, Norway’s DNB trading volumes, according to ATHENE GLOBAL FUNDING has mandated Bank of Boligkreditt and Singapore’s DBS Bank. MarketAxess. America, Deutsche Bank and RBC Capital Markets “With the near-term focus remaining on to arrange investor calls from Monday deleveraging and with operating trends 3EPTEMBERûûFORûAûPOTENTIALûlVE YEARû AIDINGûINûTHATûENDEAVOUR ûTHEûCREDITûPROlLEû Australian dollar bond offering, expected to should continue to improve through year- be rated A/A (S&P/Fitch). HIGH-YIELD end,” CreditSights said on Wednesday. Fears of bond downgrades into junk CLEARVIEW MARKETS SUB NOTE territory were more acute earlier in the UNITED STATES year, but investors now seem more sanguine CLEARVIEW WEALTH, rated BBB (Fitch), a about crossover credits, with greater DIVERSIlEDû!USTRALIANûLIFEûINSURANCEûANDû INVESTORS SEE LITTLE IG AMBITION IN numbers of investment-grade accounts wealth management business, has KRAFT HEINZ’S PLANS willing to dip into liquid fallen angel debt mandated NAB to market a debut 10-year despite the ratings. NON CALLûlVEû4IERûûNOTEûOFFERING ûEXPECTEDû Investors and analysts saw few signs during an “We’re more pleased to hear that they are to follow investor meetings this week. investor day last Tuesday that food company making an asset sale at a good multiple and KRAFT HEINZ wished to regain the investment- THEYûAREûHOPINGûTOûWORKûONûlXINGûTHEû grade rating it had lost earlier this year. business on a going-forward basis,” Murphy Some bond buyers also don’t seem to care said. that much, as long as management keeps an COVERED BONDS eye on balance sheet management. UBER PRICES US$500m JUNK BOND FOR “Frankly, I don’t care if Kraft Heinz is DEBT REFINANCING BBB– or BB+,” said Tom Murphy, head of IG NON-CORE CURRENCIES credit at Columbia Threadneedle UBER TECHNOLOGIES priced a US$500m junk Investments. BONDûTOûRElNANCEûUPCOMINGûDEBTûMATURITIESû KIWIBANK TAKES KANGAROO COVER “I just care that they’ll be good stewards LASTû-ONDAY ûASûTHEûlRMûLOOKSûTOûCUTûCOSTSûTOû of the balance sheet moving forward and sustain its capital structure. KIWIBANK (A1/A/AA–) became the second New that they’ll execute.” The ride-sharing company offered Zealand lender to issue covered Kangaroos The company made some efforts in that investors a 7.3-year non-call three senior WITHûLASTû7EDNESDAYSû!MûlVE YEARû direction last week when it announced it unsecured note, with B3/CCC+ ratings. mOATING RATEûNOTEûSALEûTHATûPRICEDûINSIDEûTHEû had struck a deal to sell part of its cheese Leads brought the coupon down from BUSINESSûTOûAû53ûAFlLIATEûOFû'ROUPEû,ACTALISû price talk of 6.375% to land the deal at 6.25%. ALL COVERED BONDS (ALL CURRENCIES) for US$3.2bn. That offered a slight premium to where BOOKRUNNERS: 1/1/2020 TO DATE Proceeds from that sale are expected to Uber’s existing 7.5% 2027s were trading on Managing No of Total Share pay down debt, a move that should bring Monday morning, at a cash price of 105.75 bank or group issues US$(m) (%) down net leverage by 0.2x, according to to yield 6.15%. 1 Credit Suisse 18 8,068.73 6.9 CreditSights analysts. Morgan Stanley acted as lead-left and joint 2 Barclays 36 7,911.76 6.8 9ETûANALYSTSûATûTHEûRESEARCHûlRMûTHINKû bookrunner with Bank of America, Barclays, 3 Credit Agricole 31 7,208.32 6.2 that will barely move the needle in terms of Citigroup and Goldman Sachs. 4 HSBC 29 6,281.80 5.4 the leverage metrics needed to lift Kraft The new 2028 notes were last trading at 5 BNP Paribas 25 5,818.82 5.0 back out of junk territory. The company is 101.625 to yield 5.86% on Thursday, 6 Natixis 28 5,758.37 5.0 currently rated Baa3/BB+/BB+. according to MarketAxess data. 7 Commerzbank 24 5,138.79 4.4 !NALYSTSûATûTHEûRESEARCHûlRMûSAIDû The deal was aimed at repaying the 8 UniCredit 26 4,528.05 3.9 Tuesday’s investor presentation was US$500m outstanding on the company’s 9 ING 20 3,964.06 3.4 “notably void” of IG ambitions and that a 7.50% 2023 senior notes. 10 Santander 16 3,889.30 3.3 leverage target of below 4x would only put 30ûEXPECTSû5BERûTOûSUFFERûCASHmOWû Total 135 116,327.10 the company on the cusp of investment DElCITSûAROUNDû53BNûINû ûNARROWINGû Source: Refinitiv SDC code: J15a grade. to around US$2bn next year.

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5 IFR Bonds 2351 p25-61.indd 41 18/09/2020 20:07:36 “Despite the fact that Covid-19 has SIGNIlCANTLYûAFFECTEDûMOBILITYûBOOKINGS ûWEû believe offsetting factors will allow Uber to Back with a bang sustain its capital structure,” said S&P. The company reported a cash position of COVERED BONDS Resurgent supply means busiest week since January US$7.8bn as of the end of June, and has an undrawn US$2.3bn revolving credit facility The euro covered bond sprang back into action as the new issue almost four times subscribed due 2023 that S&P said gives it ample the market had its busiest week since January. and coming inside fair value. liquidity to bridge the next few quarters. Banks have for the most part preferred to CAFFIL priced the week’s biggest trade – a The ratings agency pointed to reductions access official funding channels such as the €1.5bn February 2028 public sector covered in customer support and recruitment staff TLTRO, but with pricing proving attractive in the bond on Monday that was twice covered despite to align with market demand. bond markets, covered issuance is picking up. coming in line with fair value. Uber has also divested its bikes and Ten borrowers printed deals raising a Leads set the ball rolling at the mid-swaps scooters business and discontinued meal combined €7.25bn, though towards the end of plus 9bp area. The level was revised to plus 5bp delivery business Uber Eats in certain the week investors’ willingness to buy tightly (+/–1bp) after orders passed €2.6bn (including markets. priced trades was being tested. €125m of lead interest) in less than two hours. “The market feels less frothy today than it did Books eventually reached more than €3bn earlier this week,” said a banker on Thursday, (including the lead interest), enabling leads to EUROPE/MIDDLE EAST/ when four deals were priced. price at the tight end. AFRICA “Don’t get me wrong, the books are still good “They certainly had a high-quality book but it’s definitely not as strong as it was earlier and were able to do a bit more size than they MAXEDA SAILS SURGE OF DIY DEMAND this week. Still, redemptions are outstripping normally do,” said a banker away from the trade. supply, so that helps with demand.” The final spread of plus 4bp was in line with Over the past six months, coronavirus Like most areas of the bond market, the where BPCE’s €600m 0.01% November 2027 lockdowns have hammered the economy covered sector is profiting from supportive OFH was bid, according to Refinitiv data. The and slashed demand for many so-called non- technicals. BPCE bond was printed at the start of the month, essential businesses. “We’ve seen spreads rally of late in reviving French covered issuance after three But for some European high-yield borrowers, covered bonds, having been steady for a months of little action. changes in consumer appetite have sent while. I think it will be interesting to see how Given the levels on offer, many issuers tested business booming – and buysiders are trying to some of the jurisdictions that have lagged the longer end of their curves with UniCredit lGUREûOUTûHOWûSUSTAINABLEûTHATûISû a bit continue to move in”, said a banker on Bank Austria (BACA) and NN BANK selling 15-year MAXEDA DIY GROUP‘s high-yield debt raise BAWAG PSK‘s €750m 10-year offering, a deal notes, while LANDESBANK SAAR, COFF and Bawag last week proved one such puzzle for some that summed up where the market is, with printed 10-year bonds. investors as they tried to understand the long-term prospects for the Dutch retailer, which has seen its business rocket since CMA CGM has been helped by a steep deal was upsized to €420m on the back of March. drop in oil prices this year, which has investor demand while pricing revised to A sudden surge of enthusiasm for DIY allowed the company to keep its costs down. 5.875%. during Covid-19 lockdowns saw the Crude oil prices have fallen by almost 40% A banker away from the deal said that company’s cash balance increase to €176m SINCEûTHEûSTARTûOFû ûACCORDINGûTOû2ElNITIVû Maxeda had paid a premium compared to at the end of the second quarter, up from data. the market. just €4m over the similar period a year The company is expected to come to the “Maxeda has offered a premium over the earlier, according to CreditSights. euro high-yield primary market shortly to market because their bonds have had some Under six months ago, Maxeda’s 6.125% RElNANCEûITSûUPCOMINGûMATURITIESû DIFlCULTûTRADINGûPERIODSûINûTHEûPAST vûHEûSAID July 2022s were seen bid as low as 41, “CMA got lucky this year with declining Proceeds from the deal will help fund the according to MarketAxess data. Last week, oil prices so they are set to have an amazing redemption of the company’s €475m 6.125% they were seen above par at 101. third quarter, which will open up the July 2022s, callable in October 2020. The bonds “It’s a tough credit,” said one London- RElNANCINGûWINDOWûFORûTHEM vûSAIDûAû were issued in July 2017 and marked Maxeda’s based high-yield investor. second high-yield investor. debut in the euro high-yield bond market. “You’d be buying it on the back of a few “But longer term I still have question Maxeda was set to have its ratings good quarters. This bond traded around 45 marks on this industry, and I feel like upgraded to B2/B by Moody’s/Fitch after the in April. It’s now trading above par. Pre- [shipping companies] are going to have deal’s completion – up from Caa1/CCC+. #OVID ûTHISûISûAûRElûTHATûWOULDûCOMEûATû another near-death experience at some “The bigger question for investors is the over 6% and I don’t think that level should point. I’m not sure what it looks like beyond longer-term trend as the recession bites, change. But I’m fascinated to see where it a six-month horizon.” unemployment rises and housing will come. It feels like the bonds are a bit transactions fall, and indeed, how Maxeda ahead of themselves,” he said. PLENTY OF DEMAND performs against the barnstorming comp of The high-yield investor said he would put Maxeda tapped global coordinators and F1H20,” wrote CreditSights analysts last Maxeda in the same bracket as French physical bookrunners Goldman Sachs and ING week. SHIPPINGûCOMPANYûANDûRElûCANDIDATEû#-!û to market a €400m six-year non-call two Investors looking to buy and hold bonds CGM. bond. An investor call was held on Monday, will have to reckon with whether the “Both credits have seen a short-term September 14. barnstorming six months – seven, if it BENElTûFROMû#OVID ûBUTûSTRUCTURALLY ûFROMû Whispers for the deal were in the low 6% includes Maxeda’s 25% boost to its top line AûCASHmOWûPERSPECTIVE ûTHEYûHAVENTûREALLYû range, according to investors. Price talk was during August – is sustainable, analysts recovered.” sent out on Wednesday at 6%–6.25% and the wrote.

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“Fifteen-years is not really a strange maturity, FURTHER AFIELD SPAREBANKEN VEST BOLIGKREDITT then became plenty of issuers have done it before, even in the Supply also picked up outside of the eurozone the third Norwegian issuer to test the market but Austrian space. I think what does make sense as investors took the opportunity to get some its trade on Thursday met some resistance. is offering a bit of yield to investors,” said a lead relative value. Leads released initial guidance at the mid- manager on the BACA deal. Norway’s SPAREBANK 1 BOLIGKREDITT raked swaps plus 9bp area for the €500m November The Austrian bank’s €500m no-grow 2035 in more than €2.5bn of orders for its €1bn 2025 trade. ECB-eligible Hypothekenpfandbrief proved seven-year green covered bond, its second With books passing €1.25bn, guidance was popular, with books almost six times subscribed. such deal. revised to the 6bp area(+/–1bp) to price in range, Marketing began at the mid-swaps plus 14bp “The green label boosted demand for this with the final spread set at 6bp. area. But the size of the book, at more than one,” a banker away from the trade said. A lead said it was the correct strategy to test €2.95bn (including €175m from leads), meant Marketing began at the plus 12bp area. Books a tighter level, but that 6bp proved to be the pricing was whittled down to plus 9bp. at guidance were in excess of €2.5bn (including right endpoint. The final order tally fell to around Bankers said the deal priced in line with fair €190m from leads), after peaking at €2.75bn. €780m after the launch was announced. value but what enticed accounts was the positive This enabled Spabol to tighten the spread to plus “Clearly, that’s a big drop but the overall yield. The 15-year tenor meant the bonds came at 7bp. Bankers said the trade priced through fair quality was very good in the end,” a second lead a yield of 0.073%. value. said. “We had some bank treasuries but there’s “This is a very strong result, and particularly “Recent Norwegian transactions ended certainly a lot of real money investors. The when you compare it versus some of the printing at negative or flat new issue concessions, positive yield is the main reason we got quality transactions from peers. For example, the last whereas we at least paid 1bp or so.” and quantity. I have over a 100 orders in my book seven-year trade out of Norway, Sparebanken In contrast, FEDERATION DES CAISSES DESJARDINS at the moment,” said a second lead. Vest, came up plus 12bp and that was also a DU QUEBEC earned the plaudits of bankers away NN Bank also drummed up considerable green transaction,” a lead manager said. from its transaction, as the first Canadian issuer support for its €500m 15-year soft bullet covered Fellow Norwegian, EIKA BOLIGKREDITT followed to venture into the euro covered bond market bond. with a €500m March 2028 that also came inside since April pulled off a €500m five-year bond “When you’ve got books peaking at €2.6bn, fair value. that was more than four times subscribed. you’re in pretty good shape,” a lead manager said. “Some of the Norwegians don’t have access to Guidance was mid-swaps plus 12bp area for Leads began marketing the no-grow trade at TLTRO. So for them [the covered bond market] is the no-grow trade. Bookbuilding was fast paced, the mid-swaps plus 17bp area. Execution was a natural place of funding,” a banker away from allowing the issuer to fix the spread at plus 9bp. quick, with NN launching the trade in less than the trade said. Bankers away from the transaction said the trade two hours at plus 12bp. Final books closed in Marketing began at the mid-swaps plus 12bp offered no concession. Orders piled up, reaching excess of €2.5bn. A banker away from the trade area for the no-grow trade but leads were able to more than €2.1bn. said NN priced 1bp–2bp through fair value. tighten to plus 7bp. Malicka Danna Sielinou

HIGH-YIELD BORROWERS LOOK TO REFI The company joined fellow high-yield on the surprise take-private bid from AS CONDITIONS NORMALISE borrowers Altice France, Maxeda and founder Patrick Drahi, according to Lucror Intrum in the market last week with deals to Analytics. SPCM, the holding company of water-soluble OPPORTUNISTICALLYûRElNANCEûDEBT The deal came just days after Altice’s polymers manufacturer SNF, joined a line of Such issuers are looking to take advantage billionaire founder announced the bid on COMPANIESûLOOKINGûTOûRElNANCEûDEBTûLASTû of spread levels. Spreads have been Friday to take the telecoms and cable week while conditions in the European normalising in the European high-yield company private. high-yield market return to normality. market because of government and central A source familiar with the bond said it The company, rated Ba2/BB+ bank support, said investors. had nothing to do with Drahi’s buyout (Moody’s/S&P, positive/stable), landed a “The issuers that are coming in Europe offer. €700m dual-tranche bond on Tuesday, split are broadly the big Double B credits or high- BNP Paribas was lead-left on the euros, between a €350m February 2026 non-call quality-esque deals,” said Azhar Hussain, acting alongside Goldman Sachs and JP two bond and a €350m February 2029 non- head of global credit at Royal London Asset Morgan who were joint bookrunners. call three note. Management. Goldman Sachs was lead-left on the US Sole physical bookrunner BNP Paribas “With the exception of Center Parcs, dollar bond, with BNP Paribas and JP started out by telegraphing a minimum size which gave you a bit of yield, it hasn’t been Morgan as joint books. of €300m for each bond. that riveting for the most part.” About €150m of the proceeds will be used Price talk was sent out at the 2.25% area to repay the outstanding amount under the on the 2026s and the 2.875% area for the ALTICE TALKS Altice France revolving credit facility and 2029s. Final guidance, to price in range, was ALTICE FRANCE, which announced a €750m will be used to partly repay debt at 2.00%–2.125% and 2.625%–2.75%, €900m-equivalent deal last week, sent out Altice Corporate Financing, which is around respectively. lNALûTERMSûFORûITSûDUAL CURRENCYûDEALûONû €1.06bn. Proceeds from the deal, along with cash Tuesday, split between two eight-year non- The remainder of the facility will be on the balance sheet, will redeem the call three senior secured notes. repaid with cash on Altice International’s company’s 2023 notes and repay its The €500m euro bond landed at 4.125%, balance sheet. drawings under its senior revolving credit WHILEûTHEûlNALûLEVELûONûTHEû53Mû53ûDOLLARû “This transaction improves the weighted facility. note was 5.125%. The bonds were talked at average maturity of Altice Europe slightly to Credit Agricole was joint bookrunner, 4.25% area and 5.25% area, respectively. 6.2 years while realising additional interest alongside co-managers Bank of America, Questions from investors on the and tax savings,” said an investor Natixis and Societe Generale. marketing call for the bond focused mainly presentation seen by IFR.

International Financing Review September 19 2020 43

5 IFR Bonds 2351 p25-61.indd 43 18/09/2020 20:07:36 After the deal, Altice Europe will have no EL CORTE INGLES LINES UP DEBT RAISE However, despite business shifting online major maturities before 2025. nû%#)SûGROCERYûSALESûINCREASEDûlVE FOLDû Altice’s bonds dropped on news of Drahi’s Investors looking to add risk to their during lockdown – the company’s revenues take-private bid, as bondholders tried to portfolios by pivoting into the more have still been hit. digest the implications of the buyout for the coronavirus-impacted retail sector may soon Moody’s analysts said in a report in June company’s already high debt levels. The bid get their wish. that they expect ECI’s total revenues for is backed by a term loan from BNP Paribas. Spanish department store operator EL lSCALûûTOûBEûAROUNDûõBNû ûORûONE THIRDû “For bondholders it means that there will CORTE INGLES (Ba1/BB+/BB+, M/S/F, all LOWERûTHANû ûREmECTINGûTHEûLOCKDOWNû be more leverage at the top of [Altice’s] negative) said on Friday it has tapped Bank of and the expected deterioration in the capital structure,” said a high-yield investor. America to arrange investor calls on Spanish economy. “It means that at some point the company September 21-22 ahead of a potential Fitch views the credit similarly. will need to pay dividends to repay the loan unsecured debt transaction. “The closure of ECI’s department stores at the opco level. But we don’t have a clue Like other retailers, El Corte Ingles has from mid-March to end-May led to a ABOUTûTHEûlNANCING ûAMORTISATIONûORû been impacted by the global spread of SIGNIlCANTûLOSSûOFûREVENUEûANDûPROlTSûANDû guarantees given by Drahi – and that has coronavirus. put temporary pressure on liquidity, partly created some uncertainty.” The company was forced to close all of its DUEûTOûSTRONGûWORKINGûCAPITALûOUTmOWS vû Elsewhere in the market, Swedish debt department stores for around three months wrote Fitch analysts in a report in July. collector INTRUM landed an upsized €250m after the Spanish government put the “We expect further pressure on tap of its 4.875% euro senior unsecured country into lockdown on March 14, with discretionary retail over the next 18 months NOTESûDUEûû4HEûlNALûPRICEûWASû the state of emergency only ending on June in Spain, with a 12% decline of consumer Proceeds from the deal will help repay 22. spending in 2020 followed by a rebound of drawings under the company’s revolving ECI also cut its dividends and temporarily only 4% in 2021.” credit facility. laid off 22,000 workers at its stores across ECI has spent the last six months shoring Lead left bookrunner Morgan Stanley had the country. up its liquidity. approached investors on Wednesday Investors were spooked - yields on the In April the company agreed a €1.311bn morning with a €200m deal size and price company’s 3% March 2024s spiked to 8.50% one-year revolving credit facility to provide talk of 100.50 area. at the peak of the Covid-19 crisis in March. stable short-term funding without requiring Joint bookrunners and Nordic Those notes are now seen bid around 3.10%, guarantees and collateral. That was partially coordinators were Nordea and SEB. according to Tradeweb data. REPLACEDûINû*ULYûBYûAûõMûlVE YEARûLOANû backed with a guarantee from state-owned ALL US$ DENOMINATED HIGH-YIELD BONDS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS BANKû)NSTITUTOûDEû#REDITOû/lCIAL BOOKRUNNERS – 1/1/2020 TO DATE 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues €(m) (%) ASIA-PACIFIC 1 JP Morgan 268 34,596.73 10.3 1 JP Morgan 41 4,302.39 7.9 EMECO TERMS OUT DOLLAR BONDS 2 Bank of America 274 32,236.27 9.6 2 BNP Paribas 37 3,955.98 7.3 3 Citigroup 202 24,556.60 7.3 3 Deutsche Bank 35 3,941.76 7.3 4 Goldman Sachs 201 23,611.54 7.0 4 Barclays 32 3,514.97 6.5 Austrailia’s Emeco Holdings, which rents 5 Barclays 198 22,911.30 6.8 5 Goldman Sachs 34 3,211.17 5.9 heavy earthmoving equipment to mining 6 Morgan Stanley 142 20,573.99 6.1 6 Citigroup 33 3,169.37 5.8 companies, has extended the maturity of 7 Wells Fargo 162 18,265.16 5.4 7 Credit Suisse 25 2,752.21 5.1 its US dollar bonds and raised new 8 Deutsche Bank 171 16,166.14 4.8 8 Credit Agricole 22 2,679.22 4.9 equity, in a shake-up of its capital 9 Credit Suisse 153 14,808.17 4.4 9 HSBC 34 2,551.54 4.7 structure. 10 RBC 107 11,352.90 3.4 10 UniCredit 23 2,502.66 4.6 Bondholders, including major Total 512 336,654.07 Total 99 54,295.51 shareholder Black Diamond, a US-based

Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt. ALTERNATIVEûASSETûMANAGEMENTûlRM ûAGREEDû Source: Refinitiv SDC code: B5 Source: Refinitiv SDC code: B6 to exchange US$180m 9.25% senior secured bonds due March 31 2022 for the same ALL ASIAN HIGH-YIELD ISSUERS ALL EUROPEAN HIGH-YIELD ISSUERS amount of bonds with the same coupon due 1/1/2020 TO DATE 1/1/2020 TO DATE March 2024. Managing No of Total Share Managing No of Total Share The remaining US$142m of notes will be bank or group issues US$(m) (%) bank or group issues US$(m) (%) redeemed with proceeds from a A$149m (US$110m) 1-for-2.1 underwritten share 1 Credit Suisse 49 3,769.39 8.7 1 Citigroup 42 5,610.80 8.0 entitlement offer, as well as cash on hand. 2 UBS 45 2,974.84 6.9 2 Deutsche Bank 38 5,300.00 7.5 Goldman Sachs and Macquarie were joint lead 3 Haitong Secs 65 2,376.25 5.5 3 JP Morgan 45 5,217.94 7.4 managers and underwriters for the equity 4 Deutsche Bank 44 2,223.56 5.1 4 BNP Paribas 40 5,163.47 7.3 5 Citic 42 2,214.91 5.1 5 Barclays 36 4,997.77 7.1 offer, while Black Diamond took up its 6 Bank of America 18 2,131.23 4.9 6 Goldman Sachs 36 4,371.37 6.2 entitlement and acted as sub-underwriter 7 Guotai Junan Secs 53 2,086.61 4.8 7 Credit Suisse 27 3,347.79 4.8 for part of the offering. 8 Goldman Sachs 21 1,996.31 4.6 8 HSBC 32 2,939.60 4.2 Repaying some of the US dollar bonds will 9 Barclays 30 1,576.38 3.6 9 Bank of America 25 2,814.51 4.0 cut Emeco’s annual interest costs by A$19m, 10 Bank of China 28 1,565.73 3.6 10 Credit Agricole 19 2,809.09 4.0 it said, and allow it to exercise an option to Total 115 43,282.03 Total 103 70,360.57 extend its revolving credit facility to 2023.

Excluding equity-related debt. Excluding equity-related debt. The company will have A$153m of liquidity Source: Refinitiv SDC code: B06d Source: Refinitiv SDC code: B06c following the transaction.

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second-lien origination, and future capital covered. The leads had started with initial markets issuance will continue under the price thoughts of high 70s to 80bp area, STRUCTURED FINANCE Castell name. before guidance of 73bp area and then a The new issue is backed by £277m prime one-time test at 70bp. and near-prime owner-occupied second-lien Classes B and C were also well supported, EMEA MBS UK residential mortgages with an average WITHûlNALûBOOKSûûTIMESûANDûûTIMESû current balance of £40,543. There are 6,826 covered respectively. OPTIMUM CREDIT PRICES SECOND-LIEN loans, the weighted average current LTV is But the Class D was just one time done at RMBS CASTELL 63.65%, seasoning is 19 months and the 240bp, and the status was not disclosed for weighted average interest rate is 5.84%. An the BB+/BB Class F, which ended with a UK lender OPTIMUM CREDIT pulled in 12 £85m portion was previously securitised in spread of 439bp, well wide of mid-300s IPTs. accounts for its £269.7m RMBS CASTELL 2020-1 Castell 2017-1. “Demand down the lower mezz has last week, with the second-lien nature of the relaxed a bit and investors there are assets reducing the number of investors SENIOR EUROZONE RMBS BUOYED BY becoming more opportunistic about getting prepared to participate. STRONG DEMAND involved,” said a second securitisation UK investors made up 81.7% of the book, banker. and EU accounts 18.3%. Real money took Two eurozone non-bank issuers came with “And the differential between Single A 99.3% and bank investors just 0.7%. residential mortgage deals last week as and Triple B or Double B, which had been Less than half the deal was publicly Continental issuers appear to be following super-wide, has been compressing until now marketed: £100m of the £189.6m Class A the UK pattern from before the summer – but Finance Ireland may have been a step went to a protected order, and 50% of break: pure funding trades from banks are too far in the compression recovery,” he Classes B and C were also protected, while unlikely given the cheaper funding they can said. the rest of the stack – apart from a retained access from central banks, leaving the stage Similarly, last week’s Dutch RMBS from Class H – was pre-placed. clear for non-banks. RNHB, DUTCH PROPERTY FINANCE 2020-2, saw its Joint arrangers and joint leads Citigroup State-backed FINANCE IRELAND came to BB/BBB (low) (S&P/DBRS) Class E just 1.1 and NatWest priced the 2.1-year Class A at market with its second Irish RMBS via BofA TIMESûCOVEREDûATûITSûBPûlNALûSPREAD ûINû Sonia plus 127bp, 1.7 times covered, after a Securities, BNP Paribas, Citigroup and Standard line with 400bp area IPTs. modest tightening from 130bp–135bp Chartered. And RNHB, owned by Arrow Global But the €268.939m of seniors were taken initial price thoughts and then 127bp– and CarVal Investors, sold a RMBS buy-to-let WELLûINûFROMûBPnBPûAREAû)04SûTOûAûlNALû 130bp (WPIR). and investment loans via joint leads Barclays, 79bp spread, where they were 2.2 times 4HEûlNALûLEVELûWASûBPûINSIDEûTHEû HSBC and Natixis. covered. previous Castell RMBS from September last Both deals saw strong demand and spread year. tightening at the top of the stack, but found AVON FINANCE NO.2 PRE-PLACED TO REFI The £15.583m AA/AAL (S&P/DBRS) Class B the going less easy further down the capital WARWICK ONE came at 210bp and the £12.337m A+/A Class stack. C was priced at 240bp. h,IQUIDITYûISûDElNITELYûNOTûANûISSUEûANYû UK RMBS AVON FINANCE NO.2 has been sold Around 27% of borrowers have taken a more, but investors do want to be careful on fully pre-placed via Citigroup TOûRElNANCEûAû payment holiday at some point, but loans the fundamentals,” said one securitisation call of the Co-operative Bank’s Warwick on payment holidays made up only 7.3% of banker. Finance Residential Mortgages Number the pool by the end of August. “So people certainly aren’t being put off /NE ûWHICHûEXTENDEDûBEYONDûITSûlRSTû Optimum Credit was bought by Pepper at the Triple A level, but further down, optional redemption date in June this Money in 2018, and says it is the UK’s largest perhaps at Single A or Triple B, they want to year. second-lien mortgage originator with a 33% make sure they’re comfortable with what Another Co-operative Bank RMBS, market share. Pepper plans to bring they’re doing from a credit perspective.” WARWICK FINANCE RESIDENTIAL MORTGAGES NUMBER Optimum under the Pepper brand in the Finance Ireland’s deal, FINANCE IRELAND NO.2 TWO ûWASûRElNANCEDûTHROUGHû!VONû&INANCEû near future, but says the Optimum business RMBS, sold its €232.08m Triple As at 70bp .OûINû*ULYû"ARCLAYSûWASûLEADûFORûTHEûlRSTû will continue with its current strategy of over three-month Euribor, some 2.7 times Avon, which was also fully pre-placed.

ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS ALL INTL ISSUERS (EXCLUDING SELF-FUNDED) BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues €(m) (%) bank or group issues US$(m) (%) 1 Bank of America 14 4,436.61 14.5 1 Credit Agricole 3 1,615.16 12.2 1 Credit Suisse 77 14,535.79 10.0 2 Citigroup 15 3,028.84 9.9 2 Bank of America 4 1,482.38 11.2 2 Goldman Sachs 50 13,726.32 9.4 3 Lloyds Bank 12 2,811.99 9.2 3 Deutsche Bank 2 1,283.04 9.7 3 Barclays 73 13,456.60 9.2 4 Barclays 12 2,791.59 9.1 4 BNP Paribas 5 1,267.25 9.6 4 JP Morgan 63 11,940.72 8.2 5 BNP Paribas 10 2,487.64 8.1 5 Commerzbank 3 1,146.28 8.6 5 Deutsche Bank 59 11,172.05 7.7 6 Deutsche Bank 5 1,927.34 6.3 6 ING 2 873.04 6.6 6 Citigroup 62 10,902.44 7.5 7 Credit Agricole 3 1,824.32 6.0 7 Goldman Sachs 2 791.39 6.0 7 Bank of America 51 10,489.62 7.2 8 Commerzbank 3 1,263.56 4.1 8 LBBW 2 648.40 4.9 8 Wells Fargo 43 7,880.93 5.4 9 Morgan Stanley 4 1,218.27 4.0 9 JP Morgan 2 574.63 4.3 9 Morgan Stanley 29 5,858.58 4.0 10 JP Morgan 5 1,198.84 3.9 10 ABN AMRO 2 557.74 4.2 10 Nomura 36 5,549.29 3.8 Total 58 30,640.60 Total 23 13,252.01 Total 309 145,731.59

Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, PFI bonds and credit-linked notes. Excludes US domestics) and excludes CDOs. domestics) and excludes CDOs. global ABS/MBS, CDOs and self funded issues. Source: Refinitiv SDC code: B16n Source: Refinitiv SDC code: B16g Source: Refinitiv SDC code: J10d

International Financing Review September 19 2020 45

5 IFR Bonds 2351 p25-61.indd 45 18/09/2020 20:07:37 NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 18/9/2020 Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type BlackRock European CLO X €183.75 - 3mE+120bp Barclays Aaa/AAA/NR CLO BlackRock European CLO X €23.25 - 3mE+170bp Barclays NR/A-/NR CLO BlackRock European CLO X €28.5 - 3mE+270bp Barclays NR/A/A CLO BlackRock European CLO X €19.8 - 3mE+380bp Barclays NR/BBB-/NR CLO BlackRock European CLO X €11.1 - 3mE+630bp Barclays NR/BB-NR CLO BlackRock European CLO X €7.35 - 3mE+900bp Barclays B3/B/NR CLO CAFL 2020-3 US$184.738 5.49 1.358 Morgan Stanley/Goldman Sachs NR/NR/AAA RMBS CAFL 2020-3 US$42.519 9.80 2.203 Morgan Stanley/Goldman Sachs NR/NR/AA RMBS CAFL 2020-3 US$22.726 9.81 2.403 Morgan Stanley/Goldman Sachs NR/NR/A RMBS CAFL 2020-3 US$17.228 9.81 2.950 Morgan Stanley/Goldman Sachs NR/NR/BBB RMBS Castell 2020-1 PLC £189.607 2.1 SONIA+127bp Citigroup/NatWest Markets NR/AAA/NR RMBS Castell 2020-1 PLC £15.583 3.1 SONIA+210bp Citigroup/NatWest Markets NR/AA/NR RMBS Castell 2020-1 PLC £12.337 3.1 SONIA+240bp Citigroup/NatWest Markets NR/A+/NR RMBS Castell 2020-1 PLC £15.583 3.1 SONIA+330bp Citigroup/NatWest Markets NR/BBB/NR RMBS Castell 2020-1 PLC £8.441 3.1 SONIA+430bp Citigroup/NatWest Markets NR/BB/NR RMBS Castell 2020-1 PLC £5.194 3.1 SONIA+650bp Citigroup/NatWest Markets NR/B/NR RMBS Castell 2020-1 PLC £5.194 3.1 SONIA+700bp Citigroup/NatWest Markets NR/NR/NR RMBS Castell 2020-1 PLC £9.569 3.1 SONIA+700bp Citigroup/NatWest Markets NR/B-/NR RMBS COLT 2020-1R US$180.849 2.05 1.255 Nomura/Credit Suisse NR/NR/AAA RMBS COLT 2020-1R US$17.363 2.05 1.512 Nomura/Credit Suisse NR/NR/AA RMBS COLT 2020-1R US$15.208 2.05 1.769 Nomura/Credit Suisse NR/NR/A RMBS COLT 2020-1R US$11.026 4.01 2.803 Nomura/Credit Suisse NR/NR/BBB RMBS COLT 2020-1R US$8.491 4.01 4.310 Nomura/Credit Suisse NR/NR/BB RMBS COLT 2020-1R US$5.577 4.01 5.311 Nomura/Credit Suisse NR/NR/B RMBS CIGAR 2020-1 US$116.940 0.71 0.68 Deutsche Bank Aaa/NR/NR ABS CIGAR 2020-1 US$18.290 1.98 1.55 Deutsche Bank Aa2/NR/NR ABS CIGAR 2020-1 US$8.660 2.33 1.75 Deutsche Bank A1/NR/NR ABS CIGAR 2020-1 US$25.510 2.73 2.35 Deutsche Bank Baa2/NR/NR ABS CIGAR 2020-1 US$11.070 2.80 4.43 Deutsche Bank Ba3/NR/NR ABS DEFT 2020-2 US$382 0.42 0.315 RBC CM/BofA/TD Securities/Truist Financial P1/NR/F-1+ ABS DEFT 2020-2 US$430 1.30 0.470 RBC CM/BofA/TD Securities/Truist Financial Aaa/NR/AAA ABS DEFT 2020-2 US$330.288 2.23 0.570 RBC CM/BofA/TD Securities/Truist Financial Aaa/NR/AAA ABS DEFT 2020-2 US$27.084 2.74 0.920 RBC CM/BofA/TD Securities/Truist Financial Aa2/NR/AA ABS DEFT 2020-2 US$31.824 2.75 1.370 RBC CM/BofA/TD Securities/Truist Financial Aa2/NR/AA ABS DEFT 2020-2 US$39.95 2.75 1.920 RBC CM/BofA/TD Securities/Truist Financial A3/NR/BBB ABS DTAOT 2020-3 US$192.37 0.72 0.540 Citigroup/Deutsche Bank/Wells Fargo NR/AAA/NR ABS DTAOT 2020-3 US$48.15 1.91 0.910 Citigroup/Deutsche Bank/Wells Fargo NR/AA/NR ABS DTAOT 2020-3 US$70.66 2.64 1.470 Citigroup/Deutsche Bank/Wells Fargo NR/A/NR ABS DTAOT 2020-3 US$37.8 3.42 1.840 Citigroup/Deutsche Bank/Wells Fargo NR/BBB-/NR ABS DTAOT 2020-3 US$21.15 3.56 3.620 Citigroup/Deutsche Bank/Wells Fargo NR/BB-/NR ABS Dutch Property Finance 2020-2 €268.939 2.97 3mE+79bp Barclays/Natixis/HSBC NR/AAA/NR RMBS Dutch Property Finance 2020-2 €11.537 4.65 3mE+135bp Barclays/Natixis/HSBC NR/AA+/NR RMBS Dutch Property Finance 2020-2 €12.837 4.65 3mE+185bp Barclays/Natixis/HSBC NR/AA+/NR RMBS Dutch Property Finance 2020-2 €17.225 4.65 3mE+275bp Barclays/Natixis/HSBC NR/BBB+/NR RMBS Dutch Property Finance 2020-2 €4.712 4.65 3mE+400bp Barclays/Natixis/HSBC NR/BBB+NR RMBS EART 2020-3 US$68.00 0.12 0.218 Citigroup/Deutsche Bank P1/A1+/NR ABS EART 2020-3 US$161.4 0.48 0.460 Citigroup/Deutsche Bank Aaa/AAA/NR ABS EART 2020-3 US$88.05 1.06 0.520 Citigroup/Deutsche Bank Aaa/AAA/NR ABS EART 2020-3 US$92.12 1.69 0.790 Citigroup/Deutsche Bank Aa1/AA/NR ABS EART 2020-3 US$106.29 2.45 1.320 Citigroup/Deutsche Bank A2/A/NR ABS EART 2020-3 US$68.02 3.22 1.730 Citigroup/Deutsche Bank Baa2/BBB/NR ABS EART 2020-3 US$69.45 3.91 3.440 Citigroup/Deutsche Bank NR/BB/NR ABS EART 2020-3 US$28.34 4.06 5.560 Citigroup/Deutsche Bank NR/B/NR ABS Finance Ireland RMBS NO. 2 DAC €232.08 2.44 3mE+70bp BofA/BNP Paribas/Citigroup/Standard Chartered NR/AAA/NR RMBS Finance Ireland RMBS NO. 2 DAC €16.81 3.00 3mE+120bp BofA/BNP Paribas/Citigroup/Standard Chartered NR/AA/NR RMBS Finance Ireland RMBS NO. 2 DAC €9.02 3.00 3mE+170bp BofA/BNP Paribas/Citigroup/Standard Chartered NR/AL/NR RMBS Finance Ireland RMBS NO. 2 DAC €7.69 3.00 3mE+240bp BofA/BNP Paribas/Citigroup/Standard Chartered NR/BBB/NR RMBS Finance Ireland RMBS NO. 2 DAC €5.6 3.00 3mE+439bp BofA/BNP Paribas/Citigroup/Standard Chartered NR/BB+/NR RMBS FNA 2020-M42 US$111 5.86 0.785 Morgan Stanley NR/NR/NR CMBS FNA 2020-M42 US$619.2843 9.76 1.270 Morgan Stanley NR/NR/NR CMBS

46 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 46 18/09/2020 20:07:37 STRUCTURED FINANCE

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 18/9/2020 (CONTINUED) Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type FNA 2020-M42 US$200 9.82 1.244 Morgan Stanley NR/NR/NR CMBS FORDF 2020-1 US$1000 2.99 .700 Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities Aaa/NR/AAA ABS FORDF 2020-1 US$150 2.99 1mUSL+5bps Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities Aaa/NR/AAA ABS FORDF 2020-1 US$68.092 2.99 .980 Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities Aa2/NR/AA ABS FORDF 2020-1 US$60.526 2.99 1.420 Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities A1/NR/A ABS FORDF 2020-1 US$45.395 2.99 2.120 Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities A3/NR/BBB ABS FORDF 2020-2 US$750 4.99 1.060 Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities Aaa/NR/AAA ABS FORDF 2020-2 US$44.408 4.99 1.320 Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities Aa2/NR/AA ABS FORDF 2020-2 US$39.474 4.99 1.870 Barclays/CA/SG/BNP Paribas/Lloyds/TD Securities A1/NR/A ABS Freddie Mac Spc K-X04 US$111.552 5.14 .699 Wells Fargo/Credit Suisse NR/NR/NR CMBS Freddie Mac Spc K-X04 US$236.773 8.78 1.088 Wells Fargo/Credit Suisse NR/NR/NR CMBS Freddie Mac Spc K-X04 US$112.184 7.52 1mUSL+33bp Wells Fargo/Credit Suisse NR/NR/NR CMBS LLEND 2020-1 US$81.11 0.79 2.330 Credit Suisse NR/NR/NR ABS LLEND 2020-1 US$17.21 2.10 3.790 Credit Suisse NR/NR/NR ABS LLEND 2020-1 US$23.21 2.94 6.540 Credit Suisse NR/NR/NR ABS MBALT 2020-B US$88.12 0.23 0.500 Mizuho/Credit Agricole/Wells Fargo NR/AAA/AAA ABS MBALT 2020-B US$157 0.93 0.184 Mizuho/Credit Agricole/Wells Fargo NR/A1+/F-1+ ABS MBALT 2020-B US$345 1.91 0.400 Mizuho/Credit Agricole/Wells Fargo NR/AAA/AAA ABS MBALT 2020-B US$420 2.42 0.310 Mizuho Securities USA/CA CIB/Wells Fargo Securities NR/AAA/AAA ABS RMIT 2020-1 US$134.06 3.6 2.340 Credit Suisse/Wells Fargo NR/A/NR ABS RMIT 2020-1 US$18.09 4.7 3.230 Credit Suisse/Wells Fargo NR/A-/NR ABS RMIT 2020-1 US$16.13 5.1 3.800 Credit Suisse/Wells Fargo NR/BBB/NR ABS RMIT 2020-1 US$11.72 5.6 6.770 Credit Suisse/Wells Fargo NR/BB+/NR ABS Santander Consumer Spain Auto 2020-1 €450 2.52 3mE+39bp Santander/Credit Agricole Aa1/AA/NR ABS Santander Consumer Spain Auto 2020-1 €24 2.52 3mE+95bp Santander/Credit Agricole A2/A/NR ABS Santander Consumer Spain Auto 2020-1 €19 2.52 3mE+195bp Santander/Credit Agricole Baa2/BBB/NR ABS Santander Consumer Spain Auto 2020-1 €17 2.52 3.500 Santander/Credit Agricole Ba1/BB/NR ABS Santander Consumer Spain Auto 2020-1 €10 2.52 5.600 Santander/Credit Agricole B1/B/NR ABS Santander Consumer Spain Auto 2020-1 €5.2 1.56 6.490 Santander/Credit Agricole NR/NR/NR ABS SCFT 2020-A US$610.004 2.76 1.970 BofA Securities/Credit Suisse NR/NR/NR ABS SDART 2020-3 US$215 0.14 0.282 RBC CM/BMO CM/Citi P1/NR/F-1+ ABS SDART 2020-3 US$573.5 0.67 0.460 RBC CM/BMO CM/Citi Aaa/NR/AAA ABS SDART 2020-3 US$273.44 1.50 0.520 RBC CM/BMO CM/Citi Aaa/NR/AAA ABS SDART 2020-3 US$210.21 2.02 0.690 RBC CM/BMO CM/Citi Aa1/NR/AA ABS SDART 2020-3 US$318.04 2.67 1.120 RBC CM/BMO CM/Citi Aa2/NR/A ABS SDART 2020-3 US$266.85 3.54 1.640 RBC CM/BMO CM/Citi Baa2/NR/BBB ABS Swiss CAR ABS 2020-1 SFr250 - 0.625 ZKB NR/AAA/AAA ABS VBT OW 2020-2 US$289.5 5.0 2.63 Guggenheim/Barclays NR/NR/NR ABS VBT OW 2020-2 US$39 5.0 3.22 Guggenheim/Barclays NR/NR/NR ABS VBT OW 2020-2 US$32 5.0 4.45 Guggenheim/Barclays NR/NR/NR ABS VERUS 2020-NPL1 US$164 1.19 3.598 Credit Suisse/Barclays NR/NR/NR RMBS VERUS 2020-NPL1 US$19.5 2.73 5.682 Credit Suisse/Barclays NR/NR/NR RMBS VFET 2020-1 US$156 0.26 0.217 JP Morgan/BNP Paribas/HSBC P1/NR/F-1+ ABS VFET 2020-1 US$192 1.05 0.370 JP Morgan/BNP Paribas/HSBC Aaa/NR/AAA ABS VFET 2020-1 US$191 2.22 0.510 JP Morgan/BNP Paribas/HSBC Aaa/NR/AAA ABS VFET 2020-1 US$70.51 3.39 0.600 JP Morgan/BNP Paribas/HSBC Aaa/NR/AAA ABS WFMBS 2020 RR1 US$220.480 4.89 3.00 Wells Fargo Aaa/NR/AAA RMBS FMBS 2020 RR1 US$25.983 4.89 3.00 Wells Fargo Aa1/NR/AAA RMBS

BOE LENDS £34.3bn UNDER TFSME At that juncture, only 15 banks and Before the Covid-19 pandemic prompted building societies had accessed the the introduction of the TFSME, the UK banks and building societies had programme. Of those, the largest securitisation market had been braced for a borrowed £34.3bn under the Term Funding borrowers were NatWest (£5bn), surge in UK RMBS issuance as banks and Scheme with additional incentives for SME Nationwide (£3.22bn), Santander (£2.2bn), building societies started to pay down their programmes as of September 9, according Coventry Building Society (£1.5bn) and four-year borrowings under the original TFS to Bank of England data released last week. Lloyds (£1bn). programme. The BoE also released a breakdown of NatWest, Santander and Lloyds borrowed But those repayments are now likely to be TFSME data by individual borrower, but that via their ring-fenced entities. Santander funded instead by new borrowing under the data only goes up to the end of Q2, at which borrowed an additional £230m through its TFSME. The TFSME opened in April this year point overall borrowing stood at just £14.3bn. non ring-fenced entity. and is also lending at four-year maturities.

International Financing Review September 19 2020 47

5 IFR Bonds 2351 p25-61.indd 47 18/09/2020 20:07:37 The original scheme ran from August “Six or seven weeks ago originators Agricole and Santander. The banks gave 2016 to February 2018, and lent £127bn. started getting deals ready but knew they themselves plenty of time to market the Almost £50bn has been repaid, leaving could always retain [and repo the bonds trade, after announcing it on August 26 and £80.1bn outstanding as of September 9. with the ECB] if the market wasn’t there,” pencilling in last week for pricing. the banker said. SHAWBROOK ANNOUNCES MAINLY But the strong performance of recent new PSA AND ALD OUT WITH SPANISH AND PRE-PLACED BTL RMB issues should encourage them to market. GERMAN AUTO ABS However those originators waiting on the SHAWBROOK BANK has announced a UK buy-to- sidelines who have not yet begun Two new auto ABS were added to the let RMBS already pre-placed apart from the structuring a new issue could decide they pipeline last week as PSA FINANCIAL SERVICES Class X, which is shown as “call desk”. The have run out of time before year-end. announced a Spanish auto loan deal and deal, LANEBROOK MORTGAGE TRANSACTION 2020-1, Santander’s €450m Aa1/AA/AA (Moody’s/ Societe Generale subsidiary ALD AUTOLEASING securitises mortgages originated by The S&P/DBRS) Class A, which had an €88m announced a German lease transaction. Mortgage Lender Ltd, and is expected to protected order, ended 2.9 times covered at PSA announced AUTO ABS SPANISH LOANS 2020-1 price on September 22. THATûlNALûLEVELû)04SûATûTHEûSTARTûOFûTHEûWEEKû just one day after Santander Consumer had Bank of America and Lloyds are co-arrangers, were mid to low 40s, before guidance on priced its own full-stack Spanish auto ABS well- and are joint leads with Barclays. Tuesday of 42bp–44bp. covered and inside initial price thoughts. 4HEûDEALûSECURITISESûaMûOFûlRSTûLIENû There was strong subscription through But PSA’s new deal, lead managed by BTL mortgages. There are 2,220 loans with the rest of the rated notes too, with Classes Santander, is only offering the lowest-three 12.33 months’ seasoning, a weighted B, C, D and E coming 3.1 times, 7 times, 2.7 tranches in the structure. They are a €24.6m average current LTV of 71.47% and WA times and 4.6 times covered. BB/BB (Fitch/DBRS) Class D, €8.7m B/BH interest rate of 3.67%. There are no arrears, The rated notes have average lives of 2.52 Class E and €5.1m unrated Class F. CCJs or bankruptcy/IVA loans, and some years. At the bottom of the stack is a 1.56- The deal’s €484m Class A is shown “pre- 8.8% of the portfolio comprises Covid-19 year unrated Class F, which was priced via placed/not offered”, and the €45.2m and payment holiday loans. auction at 6.49%. €37.5m Classes B and C are both pre-placed. Levels are far tighter than the other The €692.1m portfolio revolves until Spanish ABS to have priced since the Covid- December 2021 and holds 76,317 loans with EMEA ABS 19 pandemic began. BBVA’s BBVA Consumer an average €9,069 balance, weighted Auto 2020-1 in June publicly offered a average seasoning of 16 months and a WA STRONG SHOWING FOR SANTANDER’S portion of 3.9-year senior notes, which were remaining germ of 42 months. SPANISH AUTOS priced at a discount margin of 75bp over The WA interest rate is 7.7%, the new/ three-month Euribor. used split is 82%/18%, and amortising loans Santander priced its full-stack Spanish auto And Santander’s new issue is tighter at make up 65% with balloon loans at 35 ABS well inside initial price thoughts on the senior level than its previous deal in the There is an online presentation scheduled Wednesday, with the senior notes ducking series, a private placement from October for September 28 ahead of pricing on inside 40bp to price at a 39bp discount last year that sold its Class A at 45bp. The October 5. margin. Pent-up demand from eurozone rest of the tranches from that deal came Pricing for the new German ABS, ALD buyers contributed, as well as the tighter, however: the Class B, for example, AutoLeasing’s RED & BLACK AUTO LEASE GERMANY expectations of ECB participation. was at 85bp compared with 95bp on the COMPARTMENT 3, is expected this week “The market is strong, probably the best new trade. through sole lead SG. time of year for [eurozone] ABS – and the Tranching is different on the new It is offering a €350m Class A rated Triple pipeline isn’t yet as big as people were transaction, with more credit enhancement A by Moody’s and S&P, with a 1.94-year expecting a few weeks ago,” said one on all rated tranches. The Class A, for example, average life. securitisation banker. gets a full 20.79% credit enhancement, $EALmOWûCOULDûWELLûPICKûUPûNOW ûWITHû compared with 14.3% last year. SWISS CAR PRINTS AT MID-GUIDANCE several syndicates reporting trades primed The new issue, SANTANDER CONSUMER SPAIN for the next few weeks. AUTO 2020-1, was lead managed by Credit AMAG LEASING, revived a Swiss franc denominated auto-lease asset-backed GLOBAL SECURITISATIONS IN STERLING SECURITISATIONS – ALL EUROPEAN RMBS securities offering that stalled in April, the BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE putative deal would have reopened the then Managing No of Total Share Managing No of Total Share dormant European primary market but bank or group issues £(m) (%) bank or group issues €(m) (%) investors failed to engage. Last Tuesday, the issuer announced the 1 Lloyds Bank 12 2,186.46 17.9 1 Barclays 9 2,205.38 13.3 SWISS CAR 2020-1 AG 2 Bank of America 10 2,141.60 17.5 2 Bank of America 9 2,108.72 12.7 return of through joint 3 Citigroup 12 1,912.72 15.6 3 Citigroup 11 2,056.87 12.4 arrangers GreensLedge Capital Markets and 4 Barclays 8 1,660.24 13.6 4 Lloyds Bank 9 2,048.43 12.3 ZKBû:+"ûWASûALSOûSOLEûBOOKRUNNERûITSûlRSTû 5 BNP Paribas 5 789.91 6.5 5 Credit Agricole 2 1,352.56 8.2 ABS deal in the sole role) and joint lead 6 Morgan Stanley 2 475.45 3.9 6 BNP Paribas 7 1,288.88 7.8 manager alongside UBS. 7 JP Morgan 3 434.00 3.5 7 JP Morgan 4 1,009.16 6.1 IPTs came out on Thursday morning for 8 NAB 3 403.72 3.3 8 Morgan Stanley 3 806.68 4.9 three-year Class As at a 0.5%/0.75% coupon at 9 HSBC 3 365.13 3.0 9 Coop Rabobank 1 500.00 3.0 par. 10 Standard Chartered 2 352.78 2.9 10 NAB 3 468.20 2.8 Books opened for a minimum SFr150m at Total 33 12,227.48 Total 32 16,593.95 THEûSAMEûLEVELS ûANDûlNALûTERMSûWEREûSWIFTLYû

Including Euro, foreign, global and domestics, excluding CDOs. Including Euro, foreign, global and domestics, excluding CDOs set at SFr250m with a mid-guidance 0.625% Source: Refinitiv SDC code: B16i Source: Refinitiv SDC code: B10a coupon and yield.

48 International Financing Review September 19 2020

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!TûTHEûlNALûLEVELûITûGAVEûAûSPREADûOFû period which includes several economic BlackRock’s deal, BLACKROCK EUROPEAN CLO 130.5bp over mid-swaps. downturns including the current pandemic X, is actively managed with a one-year The huge spread for a Triple-A rated asset precipitated one,” a Moody’s spokesperson non-call and three-year reinvestment was enticing for investors, more used to told IFR. “That analysis prompted this period. negative rates. Asset managers took nearly proposed change.” The Class A is rated Triple A by Moody’s, half with 46%, with bank treasuries Moody’s says it found rating reviews are S&P and KBRA. Only S&P and KBRA rate following with 19% and insurers 14%. strong predictors of near-term rating Classes B to E, putting them at AA/AA, A/A, Pension funds took 12% and banks 9%. More actions, and on average ratings move one BBB–/BBB– and BB–/BB–. However Moody’s than 23 accounts took part in the offering. notch once a review is concluded. comes back for the Class F, which is rated The Class A notes are expected to be rated Ratings outlooks, however, convey B3/B– by Moody’s and S&P, with no KBRA AAA by both Fitch and S&P. meaningful information about rating rating. transitions over the medium and long term, Those Classes B, C and D came at 170bp, LASER ABS 2020 FILED AT COMPANIES but less so over the near term, Moody’s says. 270bp and 380bp, while Classes E and F HOUSE And rating reviews typically conclude came at 630bp and 900bp discount margins. within 90 days, but outlooks usually take far There is plenty more room to tighten New vehicle LASER ABS 2020ûHASûBEENûlLEDûATû longer, with an average of 227 days. before levels get closer to pre-pandemic Companies House, suggesting a repeat UK “Rating reviews are stronger signals than pricing. At the end of February, for example, consumer loan ABS could be on the way rating outlooks about future rating transitions KKR’s Avoca CLO XXI sold seniors at 89bp, from BNP PARIBAS PERSONAL FINANCE. in the near term,” the ratings agency says. and below investment grade Classes E and F The originator sold one previous public There are no proposals to change the were at 550bp and 835bp. deal under the LaSer banner, when it existing treatment for positive review or Another deal in the market, from CVC debuted with the £408.5m LaSer ABS 2017 outlook. The current methodology gives a CREDIT PARTNERS, is talking a Class A at 120bp– three years ago. one-notch adjustment upwards where an 125bp. An update on Friday from arranger obligor is on review for possible upgrade, Deutsche Bank shows the tranche some 2.1 but no change for a positive outlook. times covered at that level. EMEA CLO Moody’s expects the changes would produce At the other end of the stack the E and a one notch upgrade affecting around 8% of the F classes could push inside BlackRock, MOODY’S CHANGES WOULD UPGRADE 8% approximately 7,000 outstanding US and EMEA with the Ba3/BB Class E 1.2 times covered OF CLO TRANCHES rated CLO tranches. at 625bp–650bp and the B3/B Class F “The impact will be concentrated mostly shown as “call desk” with mid to high Moody’s is proposing changes to its CLO on tranches we currently rate Ba and higher, 800s IPTs. rating methodology that would upgrade although we do not expect that any Aa rated The deal, CVC CORDATUS LOAN FUND XVIII, has a around 8% of the outstanding US and EMEA tranches in EMEA will be impacted,” one-year non-call and a reinvestment period CLO tranches it rates by one notch. Moody’s says. of just over three years. Pricing is expected Until now, when Moody’s analyses the Moody’s is asking market participants for this week. ratings of corporate obligors in a CLO comment on the proposals, with a deadline portfolio, it adjusts the obligor’s rating of October 19. down by two notches if it is on review for US MBS possible downgrade, and down one notch if EURO CLO SPREADS EDGING TIGHTER it is assigned a negative outlook. BLACKSTONE SELLS NEW CMBS TO Under the new proposals, review for Barclays priced a new issue leveraged loan FINANCE LOGISTICS ASSETS possible downgrade will lead to just a single CLO last week for BLACKROCK ûlNDINGûAûTIGHTû notch adjustment, and there will be no 120bp margin over three-month Euribor for BLACKSTONE planned last week a commercial penalty associated with a negative outlook. the €183.75m senior notes. mortgage-backed security to recapitalise a “We recently performed an empirical Only a static CLO from Palmer Square has PORTFOLIOûOFûûINDUSTRIAL ûOFlCEûANDûPARKINGû analysis of Corporate Family Ratings of come tighter since the Covid-19 pandemic lot properties it has bought since late last below investment grade obligors over a time began, printing seniors at 115bp in August. year.

US ASSET-BACKED SECURITIES GLOBAL STRUCTURED FINANCE IN US$ STRUCTURED FINANCE – ALL INTL ISSUERS BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 JP Morgan 66 17,243.24 10.8 1 JP Morgan 154 66,301.16 13.5 1 JP Morgan 69 14,611.40 9.5 2 Citigroup 57 13,702.19 8.6 2 Credit Suisse 137 58,166.95 11.8 2 Credit Suisse 77 14,535.79 9.4 3 Barclays 59 13,556.08 8.5 3 Wells Fargo 123 55,561.27 11.3 3 Goldman Sachs 53 14,051.73 9.1 4 Bank of America 49 11,223.86 7.0 4 Citigroup 128 45,283.10 9.2 4 Barclays 74 13,744.94 8.9 5 Wells Fargo 54 10,813.90 6.8 5 Bank of America 107 37,340.96 7.6 5 Bank of America 54 11,637.81 7.6 6 RBC 43 10,606.28 6.6 6 Morgan Stanley 77 36,755.31 7.5 6 Deutsche Bank 63 11,623.04 7.5 7 Goldman Sachs 32 10,424.46 6.5 7 Goldman Sachs 121 36,655.62 7.5 7 Citigroup 64 11,241.14 7.3 8 Credit Suisse 42 8,579.99 5.4 8 Barclays 101 23,781.74 4.8 8 Wells Fargo 44 8,128.32 5.3 9 Deutsche Bank 47 8,518.37 5.3 9 Nomura 64 20,269.44 4.1 9 Morgan Stanley 29 5,858.58 3.8 10 Mizuho 29 7,526.87 4.7 10 Deutsche Bank 88 16,303.41 3.3 10 Nomura 37 5,621.03 3.7 Total 282 160,122.23 Total 799 491,492.13 Total 326 153,963.59

Excludes MBS. Including securitisations (Euro, foreign, global and domestics, excluding Includes securitisations, PFI bonds, self-funded issues and credit-linked CDOs) and PFI bonds. notes. Excludes US global ABS/MBS and CDOs. Source: Refinitiv SDC code: F14 Source: Refinitiv SDC code: B16b Source: Refinitiv SDC code: J10c

International Financing Review September 19 2020 49

5 IFR Bonds 2351 p25-61.indd 49 18/09/2020 20:07:37 The offering, BX 2020-VKNG, is secured by a FED TO STOP REINVESTING AGENCY 53MûmOATING RATE ûINTEREST ONLYûLOANû CMBS PRINCIPAL US ABS THATûHELPEDûlNANCEû"LACKSTONESûPURCHASESû of these logistics assets across six US states, The Federal Reserve said last week that it US ABS SUPPLY PICKS UP AS EAGER which total US$834.6m. will stop reinvesting principal payments BUYERS AWAIT There is also a US$45m mezzanine loan as from agency commercial mortgage-backed a part of the recapitalisation, but it will not securities and any further purchases will Issuance in the US asset-backed be securitised in the deal. The mezz loan depend on prices. securities market accelerated last week will be held by BLACKROCK, according to Fitch The amount of multi-family CMBS backed and more supply is expected this week and DBRS Morningstar. by FANNIE MAE, FREDDIE MAC and GINNIE MAE, as fund managers, including non- After the CMBS closes, Blackstone will which the central bank began accumulating traditional ABS investors, are eager to retain US$212m equity in these properties, since March, is minuscule when compared snap up deals. Fitch said. with the huge sums of US Treasuries and h0EOPLEûAREûlGHTINGûFORûPAPER vûSAIDû Most of the properties involved in this agency mortgage-backed securities it buys Caroline Chen, an analyst at Income CMBS stemmed from Blackstone’s each month. So far the Fed has amassed Research and Management. “It’s an issuer acquisition of 59 industrial properties from US$9.6bn in agency CMBS. market.” CSM CORP in April. Yet even with Fed’s small footprint in the About US$10bn hit the market last A Blackstone spokesperson declined to CMBS space, it is seen as a critical backstop, week after US$5.2bn were sold the week comment. together with revived investor appetite, in before, IFR data show. The CMBS, which priced last Thursday, REDUCINGûTHEûCOSTSûFORûREAL ESTATEûlNANCING A persistent bid underpinned by featured a structure that ranges from a CMBS spreads have broadly tightened relatively scarce issuance has encouraged Triple A note, totalling US$315.6m to a since March with those on senior agency companies to tap the securitised debt Single B tranche, totalling US$20.95m, DBRS debt now inside pre-pandemic levels. market to raise cash at historically low Morningstar said in a pre-sale report. Secondary spreads on the most senior borrowing costs. That Triple A tranche came in at 93bp tranches in Freddie’s multi-family deals are This technical demand has offset over one-month Libor. averaging 28bp over swaps, which are 25bp lingering worries about a spike in So far investors are upbeat on this tighter than the end of 2019. They blew out consumer delinquencies and defaults if industrial-heavy offering in the private-label to 135bp at the peak of the March market the jobs recovery stalls later this year, CMBS market, where supply has been scarce rout, Wells Fargo data show. analysts said. due to worries about delinquencies on hotel And levels on 10-year Triple A CMBS More than half of the supply since the and shopping mall loans. paper has narrowed back to 90bp after beginning of September has stemmed “People love industrial,” one buyside widened to 330bp in March. from the auto sector including a analyst said. “The credit stats are good. “Given the updated language in its 53BNûmOORPLANûTRANSACTIONûFROMû Everyone is paying their rent.” statement, we would not be surprised if the FORD MOTOR; a US$1.86bn sub-prime loan The delinquency rate on industrial New York Fed’s monthly purchase volume issue from SANTANDER and a US$1bn lease property loans has ranked the lowest among [of agency CMBS] dipped below US$100m securitisation from Daimler’s MERCEDES- all major property sectors since the going forward,” Wells Fargo analysts wrote BENZ. pandemic, according to Fitch. in a research note last Thursday. &ORûNOW ûINVESTORSûAREûCONlDENTûMOSTû Industrial delinquencies dipped to 0.50% Earlier this month, the New York Fed said it consumers will continue to keep up with in August, compared with 16.77% on hotel is seeking to increase its roster of the approved their car payments. loans and 10.90% on retail loans, Fitch data counterparties for its agency CMBS purchases, “Auto is one of the top payment show. “possibly also a sign that it was seeking more priorities if you don’t want to deal with Citigroup and Bank of America, which competitive pricing”, said Wells Fargo. public transportation. It’s hard to see how originated the loan, were the lead Meanwhile, the Fed pledged on AUTOSûWOULDûBEûSIGNIlCANTLYûIMPACTEDû underwriters on the CMBS. Wednesday to maintain its monthly unless there’s another economic shock,” The deal was expected to close on purchase pace for Treasuries and agency said Florence Chan, vice-president on the September 29. MBS at US$80bn and US$40bn, respectively. structured product team at PGIM Fixed Income. GLOBAL CDOs ALL EUROMARKET CDOs !ûHUGEûINmUXûOFûCASHûINTOûINVESTMENT BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE grade bond funds in recent weeks has Managing No of Total Share Managing No of Total Share pushed fund managers to look at the ABS bank or group issues US$(m) (%) bank or group issues US$(m) (%) market to diversify their holdings from 1 Citigroup 15 5,930.45 18.6 1 Citigroup 9 3,453.85 20.3 corporate bonds, analysts and investors 2 JP Morgan 9 5,109.67 16.0 2 BNP Paribas 6 2,041.80 12.0 said. 3 Barclays 8 3,228.62 10.1 3 Credit Suisse 6 1,895.00 11.1 Investment-grade corporate bonds have 4 Credit Suisse 8 2,759.60 8.7 4 JP Morgan 5 1,871.77 11.0 led the rally among spread products since 5 BNP Paribas 8 2,627.07 8.2 5 Goldman Sachs 4 1,622.42 9.5 the pandemic-induced rout in March and 6 Bank of America 8 2,535.16 8.0 6 Barclays 4 1,410.45 8.3 April. Now their spreads have tightened 7 Goldman Sachs 6 2,432.82 7.6 7 Bank of America 5 1,327.11 7.8 to pre-pandemic levels, active fund 8 Morgan Stanley 5 2,118.83 6.7 8 Natixis 2 890.74 5.2 managers have turned their focus on the 9 Natixis 3 1,152.04 3.6 9 Morgan Stanley 2 743.26 4.4 securitised sector to invest their money, 10 Jefferies 3 1,039.90 3.3 10 Jefferies 1 507.90 3.0 Bank of America said. Total 80 31,860.16 Total 47 17,002.51 “As corporate bonds led the post

Including Euro, foreign, global, US domestics. Excludes global and domestic. liquidity crisis rally, by now active Source: Refinitiv SDC code: B12 Source: Refinitiv SDC code: J11 managers see relative value in other IG

50 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 50 18/09/2020 20:07:37 STRUCTURED FINANCE

asset classes,” Bank of America “We continue to look for some value, resulting in its yields coming in 25bp analysts said in a research note last WHICHûHASûBECOMEûDIFlCULTûGIVENûSENIORû tighter than guidance. Monday. ABS continues to trade through pre- The InSite deal’s strong showing bodes Mutual and exchange-traded funds that pandemic levels,” said Daniel Oh, well for VERTICAL BRIDGE‘s own US$360.5m focus on investment-grade corporate portfolio manager at Osterweis Capital cell tower ABS deal, which was in the BONDSûSAWû53BNûINûINmOWSûINûTHEû Management. market for sale last week. week ended September 17, down from InSite’s latest securitisation raised the THEû53BNûINûINmOWSûTHEûWEEKûBEFOREû INSITE’S CELL TOWER ABS GETS year-to-date issuance of cell tower ABS to ANDûAûRECORDû53BNûINûINmOWSûTWOû STRONG RECEPTION US$2.18bn, IFR data show. weeks earlier, Lipper data show. Insite’s US$121.1m Single-A rated note However, the share of money going INSITE WIRELESS received a ringing was 11 times oversubscribed to clear at a into IG-only funds tapered off to 12% in endorsement from investors for its yield of 1.50%, which was narrower than July from 27% in May. Bank of America US$164m cell tower-backed ABS, with the talked level of 1.75%, the buyside analysts estimated these funds may have DIVERSIlCATIONûBEINGûTHEûATTRACTIONûITû source said. PURCHASEDûONLYûONEûlFTHûOFûTHEû)'ûPAPERû offers from more liquid, consumer ABS The InSite deal’s US$21.4m Triple B in August than they bought in May. sectors such as prime auto and credit card, rated tranche fetched orders nine times The average spread on Triple B rated IG a buyside source said. its offered size, resulting in a yield of paper is 177bp after widening to 488bp on The deal signalled the ability for 2.50%, inside guidance of 2.75%. March 23, which was the widest level esoteric ABS issuers to lock in historically The US$21.5m Double B paper was 11 since the Great Financial Crisis, an ICE/ cheap funding amid an uncertain times oversubscribed for a yield of 4.25, Bank of America index shows. business environment due to the Covid-19 which was 25bp tighter than guidance. They are tighter than the average pandemic. In SBA’s recent A2/A rated deal, the SECONDARYûMARKETûSPREADûOFûBPûONûlVE And the investor said demand for the note with a 5.5-year weighted average life YEARûCOMPARABLYûRATED ûlXED RATEûCREDITû deal was strong, amid a pick-up in cleared at a yield of 1.8912%. card ABS according to Wells Fargo data. issuance in this sector since July. The yield on InSite’s single A note To be sure, yield-minded investors said Barclays and Guggenheim were the joint marginally higher than the average yield ABS have lost some of their appeal as an BOOKûMANAGERSûFORûTHEûTHREE PARTûlVE YEARû OFûABOUTûûONûlVE YEARûCOMPARABLEû IG alternative as they have become more deal called, INTOW 2020-1, which fetched rated credit card ABS in the secondary expensive in recent weeks. orders multiple times its offered size, market, according to Wells Fargo data.

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International Financing Review September 19 2020 51

5 IFR Bonds 2351 p25-61.indd 51 18/09/2020 20:07:45 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 18/9/2020 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) SSAR US DOLLARS Sep 15 2020 Cades social US$4bn Sep 23 2025 0.375 99.44 MS+16 / T+22.1 0.488

Sep 15 2020 EIB CAB US$1.5bn Sep 23 2030 0.75 99.08 MS+16 / T+16.95 0.846

Sep 15 2020 IDA US$2bn Sep 23 2025 0.375 99.63 MS+12 / T+18.15 0.451

Sep 15 2020 KfW US$4bn Oct 19 2023 0.25 99.93 MS+4 / T+11.25 0.272

EUROS Sep 14 2020 CDP social €750m Sep 21 2028 1 99.45 BTP+28 / 1.072 ~MS+137.2 Sep 15 2020 Berlin €200m incr Aug 6 2040 0.05 97.95 - - (€700m) Sep 15 2020 Hessen €1bn Sep 22 2027 0 102.7 MS-4 / B+26.3 -0.375 Sep 15 2020 Rentenbank green €1.75bn Sep 22 2027 0 103.1 MS-9 / B+21.1 -0.44

Sep 16 2020 NRW.Bank €1bn Sep 23 2030 0 102 MS+3 / B+29.7 -0.198

Sep 17 2020 Berlin €250m incr Jul 2 2030 0.01 102.4 MS-1 - (€500m) Sep 17 2020 EIB sustainable €250m incr May 15 2028 0 103.4 MS-11 / B+20 -0.441 (€1.25bn) Sep 18 2020 Berlin €100m incr Aug 6 2040 0.05 98.63 - 0.12 (€800m) STERLING Sep 16 2020 Dexia Credit Local £500m Dec 11 2024 0.25 99.51 G+48 0.368

Sep 16 2020 World Bank SDB £1.25bn Sep 23 2027 0.25 99.19 G+34 0.367 SWISS FRANCS Sep 14 2020 Stadt Zurich SFr150m Oct 26 2060 0 100 MS+29.5 / Eidg+35 0

Sep 15 2020 BCV SFr125m Oct 5 2032 0.15 100 MS+38 / 0.148 Eidg+56.8 Sep 15 2020 Canton Geneva SFr300m Jun 28 2030 0.03 100 MS+35.9 / 0.03 Eidg+18.6 Sep 15 2020 Canton Geneva SFr180m Sep 28 2035 0.2 100.2 MS+35 / Eidg+49 0.185

NON CORE Sep 15 2020 NIB NKr500m incr Mar 13 2025 1.5 104 - - (NKr3.5bn) Sep 15 2020 World Bank SDB NZ$550m Sep 24 2027 0.625 0 MS+36 / - NZGB+44.7 Sep 15 2020 IFC SKr250m Sep 17 2046 0.75 98.89 - - Sep 17 2020 NTTC A$200m incr Apr 21 2033 3.75 118.5 EFP+116 / 2.07 (A$600m) ACGB+105.9 Sep 17 2020 World Bank SDB C$750m Sep 28 2027 0.875 99.82 MS+3 / G+50.6 0.901

Sep 18 2020 IFC NZ$425m incr Sep 10 2025 0.375 0 MS+27 / 0.397 (NZ$825m) NZGB+41.2 CORPORATES US DOLLARS Sep 11 2020 Gray Oak Pipeline US$400m Sep 15 2023 2 99.92 T+187.5 2.027

Sep 11 2020 Gray Oak Pipeline US$600m Sep 15 2025 2.6 99.86 T+237.5 2.63

Sep 11 2020 Gray Oak Pipeline US$400m Sep 15 2027 3.45 100 T+300 3.45

Sep 14 2020 Coca-Cola US$1.3bn Mar 15 2028 1 99.92 T+55 1.011

Sep 14 2020 Coca-Cola US$1.3bn Mar 15 2031 1.375 99.98 T+70 1.377

52 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 52 18/09/2020 20:07:46 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+18 area, MS+17 - >US$6.5bn Aa2/-/AA BNPP / CA-CIB / HSBC / JPM - area MS+17 area, - >US$2.75bn Aaa/AAA/AAA Barc / BNPP / Citi / RBC EMEA 39%, Amers 37%, APAC 24%. Bks 40%, AM/Ins/PF 36%, CB/OI 21%. Other 3%. MS+12 area, MS+12 - >US$2.25bn Aaa/AAA BMO / Citi / JPM / TD EMEA 49%, Amers 31%, Asia 20%. Bks/ area Tsy/Corp 56%, CB/OI 29%, AM/Ins/ PF 15%. MS+5 area, MS+5 - >US$6.2bn, 95acs Aaa/AAA/-/Scope Barc / MS / Nomura Eur 41%, Amers 38%, Asia 21%. Bks area AAA 43%, CB/OI 37%, AM 15%, Other 5%.

BTP+40 area, - €3.6bn -/BBB/BBB/Scope Barc / CA-CIB / HSBC / BcaIMI / JPM - BTP+30 (+/-2) BBB+ / Medio / Uni 0 - - Aa1/-/AAA/Scope JPM - AAA MS-4 area - - -/AA+ Deka / DB / Helaba / TD / Uni - MS-6 area, MS-7 -1 €3.9bn Aaa/AAA/AAA DZ / ING / JPM / Nordea - area MS+4 area 0 >€1.9bn Aa1/AA/AAA/ Barc / CMZ / JPM / LBBW Ger 49%, Fr 8%, Aus/Switz 8%, E.Eur Prime C by ISS ESG, 8%, S.Eur 5%, RoEur 18%, Other 4%. Bks Positive BB by imug 61%, CB/OI 17%, AM 16%, Ins 6%. and Leader AA by MSCI MS-1 (the#) - - Aa1/-/AAA/Scope Deka / Erste / Uni - AAA 103.429, - - Aaa/AAA/AAA CMZ / Deka / DB / SG / Uni -

0 - - Aa1/-/AAA/Scope Uni - AAA

G+53 area, G+50 - £1.5bn Aa3/AA/AA- Barc / GS / NatWest - area G+35 area - £1.5bn Aaa/AAA/None BofA / HSBC / NatWest / RBC -

0%/0.05%, 0% yld 10 - -/AA+ CS / Raiff / UBS / ZKB Switz 100%. Ins 46.5%, AM 34%, Tsy 16%, PF 2%, PB 1.5%. MS+38 area -3 - ZKB AA- UBS / ZKB Switz 100%. AM 57.5%, Tsy 14%, PB 13%, PF 8.5%, Ins 7%. MS+35/+37, 0 - -/AA- CS / UBS / ZKB Switz 100%. AM 50.5%, Tsy 38.5%, PB MS+35/+37 4.5%, Ins 4.5%, PF 2%. MS+35/+37, 1 - -/AA- CS / UBS / ZKB Switz 100%. AM 45%, Ins 44.5%, PB 5%, MS+35/+37 Tsy 4%, PF 1.5%.

- - - Aaa/AAA/NR/NR SEB -

MS+36 - - Aaa/AAA ANZ / BNZ / TD -

- - - Aaa/AAA SEB - EFP+116 - - Aa3 UBS -

MS+3 area, MS+3 - C$750m Aaa/AAA BMO / CIBC / Scotia / TD Amers 78%, EMEA 11%, Asia 11%. Bks/ Treas/Corp 59%, AM/Ins/PF 38%, Cbk/ OI 3% MS+27 - - Aaa/AAA ANZ -

T+250 area, T+200 - - Baa3/BBB BofA / Miz / MUFG / RBC / Scotia - (the #) / TD T+287.5 area, T+250 - - Baa3/BBB BofA / Miz / MUFG / RBC / Scotia - (the #) / TD T+325 area, T+300 - - Baa3/BBB BofA / Miz / MUFG / RBC / Scotia - (the #) / TD T+85 area, T+60 1 US$4.7bn Aa1/A+/A BofA / Barc / Citi / JPM / Santander - (+/-5) T+95 area, T+75 -1 US$3.7bn Aa1/A+/A BofA / Barc / Citi / JPM / Santander - (+/-5)

International Financing Review September 19 2020 53

5 IFR Bonds 2351 p25-61.indd 53 18/09/2020 20:07:46 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 18/9/2020 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Sep 14 2020 Coca-Cola US$1.5bn Mar 15 2051 2.5 99.39 T+110 2.529

Sep 14 2020 Empower Finance US$400m Mar 17 2031 1.776 100 T+110 1.776

Sep 14 2020 Empower Finance US$400m Sep 17 2027 1.357 100 T+90 1.357

Sep 14 2020 Empower Finance US$700m Sep 17 2051 3.075 100 T+165 3.075

Sep 14 2020 Flowserve US$500m Oct 10 2030 3.5 99.66 T+287.5 3.541 Sep 14 2020 Healthcare Trust of America US$800m Mar 15 2031 2 99.2 T+142 2.806

Sep 14 2020 HollyFrontier US$350m Oct 1 2023 2.625 99.89 T+250 2.662

Sep 14 2020 HollyFrontier US$400m Oct 1 2030 4.5 99.82 T+385 4.522

Sep 14 2020 Southern California Gas US$300m Sep 14 2023 (Mar 2023) 3ml+35 0 - -

Sep 14 2020 WEC Energy Group US$600m Sep 15 2023 0.55 99.96 T+40 0.562

Sep 15 2020 CyrusOne Finance Corp US$400m Oct 1 2030 2.15 98.8 T+160 2.284

Sep 15 2020 Marubeni US$500m Sep 18 2025 1.319 100 T+105 1.319

Sep 15 2020 Southern Co US$1.25bn Jan 15 2051 (Jan 2026) 4 100 - 4

Sep 16 2020 Verizon green US$1bn Sep 18 2030 1.5 99.89 T+83bp 1.512

Sep 16 2020 Delta Air Lines (SkyMiles IP) US$2.5bn Oct 20 2025 4.5 100 T+423bp 4.5

Sep 16 2020 Traﬁgura Group US$400m Sep 23 2025 5.875 100 T+560.4 5.875

Sep 17 2020 Duquesne Light Holdings US$350m Oct 1 2030 2.532 100 T+185 2.532

Sep 17 2020 EDP Finance US$850m Jan 24 2028 1.71 99.96 T+125 1.716

Sep 17 2020 Emerson Electric US$750m Oct 15 2026 0.875 99.712 T+65 0.924

Sep 17 2020 Ofﬁce Properties Income US$250m Feb 1 2025 4.5 101.414 T+385 - Trust Sep 17 2020 Quanta Services US$1bn Oct 1 2030 2.9 99.663 T+225 2.939

EUROS Sep 14 2020 Coca Cola €1bn Mar 15 2029 0.125 99.64 MS+45 / B+75.6 0.168

Sep 14 2020 Coca Cola €750m Mar 15 2033 0.375 98.6 MS+60 / B+97.9 0.491

Sep 14 2020 Coca Cola €850m Mar 15 2040 0.8 99.14 MS+80 / B+111.4 0.848

Sep 14 2020 Digital Realty green €750m Jan 15 2032 1 99.02 MS+125 / B+158 1.093

Sep 14 2020 Digital Realty €300m Sep 23 2022 3mE+48 100 3mE+48.4 -

Sep 16 2020 Mondelez International €500m Sep 22 2026 0 99.31 MS+50 / B+79.5 0.116

Sep 16 2020 Mondelez International €750m Sep 22 2029 0.75 99.44 MS+70 / B+99 0.439

Sep 16 2020 Novartis sustainable €1.85bn Sep 23 2028 0 99.35 MS+40 / B+69.8 0.081

Sep 16 2020 Volkswagen International €1.25bn Sep 22 2028 0.875 99.47 MS+125 / B+154.6 0.944 Finance green

Sep 16 2020 Volkswagen International €750m Sep 23 2032 1.25 98.72 MS+150 / B+185 1.366 Finance green

54 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 54 18/09/2020 20:07:46 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

T+135 area, T+115 1 US$5.1bn Aa1/A+/A BofA / Barc / Citi / JPM / Santander - (+/-5) T+145 area, T+115 -2 US$2.7bn -/A+/A GS / RBC / Scotia / WFS - (+/-5) T+125 area, T+95 -2 US$2.3bn -/A+/A GS / RBC / Scotia / WFS - (+/-5) T+200 area, T+170 0 US$3.7bn -/A+/A GS / RBC / Scotia / WFS - (+/-5) T+325/+337.5 - US$2.4bn Baa3/BBB-/BBB- BofA / JPM / WFS Credit Agricole - T+170 area, T+145 -8 US$2.7bn Baa2/BBB/- Jeff / JPM / USB / WFS - (+/-3) T+287.5, T+255 -12 US$2bn Baa3/BBB-/BBB- BofA / Citi / MUFG / TD - (+/-5) T+412.5, T+390 3 US$1.7bn Baa3/BBB-/BBB- BofA / Citi / MUFG / TD - (+/-5) 3ML+60/+65, - US$1.3bn A2/A/A+ BMO / USB / WFS - 3ML+37.5 (+/-2.5) T+60 area, T+45 3 US$1.3bn Baa1/BBB+/BBB+ BofA / Barc / JPM / WFS - (+/-5) T+190 area, T+165 -9 US$2bn Ba1/BBB-/BBB- DB / JPM / Truist - (+/-5) T+135 area, - - Baa2/BBB BofA / JPM / Nomura - T+105/+110 4.25% area, 4% - US$2.5bn Baa3/BBB/BBB- WFS / Barc / Citi / MUFG / Truist - (the #) T+110 area, T+85 -8 US$5.5bn Baa1/BBB+/A- BofA / Citi / Loop / SWS - area (+/-2) 4.75% area, - - Baa1/BBB GS / Barc / JPM / MS / BofA / BBVA / - 4.5%/4.625% BNPP / Citi / CS / DB / FITB / PNC / SMBC / USB / WFS 6.375% area, 6.125% - - - Citi / CS / ING / StCh - area T+225 area, -5 US$1.8bn Baa3/BBB- JPM / MUFG / PNC T+190 area (+/-5) T+155 area, n/a US$3.6bn BBB-/BBB-/BBB- Barc / BBVA / Citi / CA-CIB / CMZ / T+130 area (+/-5) DB / HSBC / Miz / MUFG T+85 area, 7 US$2bn A2/A Citi / JPM T+65 (#) T+400 area, 14 US$400m Baa3/BBB- BofA T+385 (#) T+270 area n/a US$3.7bn Baa3/BBB- BofA T+230 (#)

MS+65/+70, MS+45 3 >€1.9bn A1/A+ BofA / Citi / CS / DB / JPM - (the #) MS+75/+80, MS+60 10 >€1.4bn A1/A+ BofA / Citi / CS / DB / JPM - (the #) MS+100 area, 20 >€1.6bn A1/A+ BofA / Citi / CS / DB / JPM - MS+80 (the #) MS+165 area, - >€2.9bn Baa2/BBB/BBB BofA / DB - MS+135 area 3mE+75 area, - >€750m Baa2/BBB/BBB BofA / DB - 3mE+50 area MS+80 area, MS+55 - - A3/BBB HSBC / SG - area MS+90/+95, - - A3/BBB HSBC / SG - MS+70/+75 MS+55 area, 14 ~€3.75bn A1/AA- JPM / Barc / HSBC / SG Fr 24%, UK 20%, Ger 20%, Benelux 13%, Switz 8%, S.Eur 7%, Nordic 3%, Other 5%. AM 65%, Ins/PF 16%, Bks 12%, Gov/ Agcy 6%, Other 1%. MS+170 area, -15 >€5.1bn A3/BBB+ BBVA / CMZ / HSBC / ING / SG Fr 29%, Ger/Aus 25%, UK 23%, Benelux MS+140 area 7%, S.Eur 7%, Nordics 5%, Switz 2%, Other 2%. AM 62%, Agcy/OI 15%, Ins/PF 11%, Bks 9%, Other 3%. MS+190/+195, -15 >€3.8bn A3/BBB+ BBVA / CMZ / HSBC / ING / SG Ger/Aus 40%, UK 31%, Fr 11%, Benelux MS+165 area 6%, Switz 4%, S.Eur 3%, Nordics 3%, Other 2%. AM 69%, Agcy/OI 10%, Bks 9%, Ins/PF 8%, Other 4%.

International Financing Review September 19 2020 55

5 IFR Bonds 2351 p25-61.indd 55 18/09/2020 20:07:46 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 18/9/2020 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Sep 17 2020 Amadeus IT Group €750m Sep 24 2028 1.875 99.19 MS+230 / B+260.1 1.985

Sep 17 2020 SATO Corp €350m Feb 24 2028 1.375 99.73 MS+175 / B+204.9 1.414 Sep 18 2020 Terna €500m Sep 25 2030 0.375 99.5 MS+65 / B+92 0.426

STERLING Sep 14 2020 Burberry Group sustainable £300m Sep 21 2020 1.125 99.53 G+135 1.223

Sep 17 2020 PRS Finance £74.103m incr Jan 23 2029 2 109.6 G+62 0.801 (£526.841m) Sep 17 2020 PRS Finance £57.564m incr Aug 24 2034 1.5 105.5 G+62 1.073 (£387.564m) SWISS FRANCS Sep 15 2020 Glencore SFr225m Mar 30 2027 1 100.6 MS+140 / 0.905 Eidg+150.4 NON CORE Sep 15 2020 PACCAR Financial A$150m incr Sep 24 2024 0.9 99.65 ASW+78 - (A$0m) Sep 15 2020 Transgrid A$600m Sep 23 2030 2.543 100 T+177 2.543

Sep 16 2020 Charter Hall Exchange A$300m Sep 25 2030 2.317 100 ASW+155 2.317 Investment Trust Sep 14 2020 Stockholm Exergi Holding SKr400m Sep 17 2024 3mS+50 100 3mS+50 - Sep 14 2020 Stockholm Exergi Holding SKr600m Sep 17 2027 3mS+90 100 3mS+90 - Sep 14 2020 Stockholm Exergi Holding SKr1bn Sep 17 2027 1.085 100 - 1.085 Sep 15 2020 Vasakronan green SKr100m incr Sep 11 2023 3mS +50 100.4 - - (SKr300m) Sep 16 2020 Svenska Cellulosa SKr300m Sep 23 2025 0.75 99.52 MS+80 0.848 Sep 16 2020 Svenska Cellulosa SKr1bn Sep 23 2025 3mS+80 100 3m+80 - Sep 16 2020 Svenska Cellulosa SKr1.2bn Sep 23 2027 1.125 99.2 MS+110 1.245 Sep 18 2020 Kungsleden green SKr150m Sep 25 2026 3mS+150 100 3mS+150 - Sep 18 2020 Kungsleden green SKr550m Sep 25 2026 1.593 100 - 1.593 FINANCIALS US DOLLARS Sep 11 2020 Bank of Nova Scotia US$850m Sep 15 2023 SOFR+55bp 100 SOFR+55 -

Sep 11 2020 Bank of Nova Scotia US$650m Sep 15 2023 0.55 99.93 T+43 0.574

Sep 14 2020 Chubb INA Holdings US$1bn Sep 15 2030 1.375 99.78 T+73 1.399

Sep 14 2020 OneAmerica Financial US$400m Oct 15 2050 4.25 99.31 T+287.5 4.291 Partners Sep 14 2020 Protective Life Global US$350m Sep 21 2030 1.737 100 T+107 1.737 Funding Sep 14 2020 SMFG US$850m Jul 8 2025 1.474 102.2 T+75 1.011

Sep 14 2020 SMFG US$850m Sep 23 2030 2.142 100 T+147 2.142

Sep 14 2020 UMB Financial US$200m Sep 17 2030 (Sep 2025) 3.7 100 - 3.7

Sep 15 2020 AIG US$500m Sep 22 2025 0.9 99.92 T+65 0.917

Sep 15 2020 HSBC Holdings US$2bn Sep 22 2028 (Sep 2027) 2.013 100 T+155 2.013

Sep 15 2020 UniCredit SNP US$1bn Sep 22 2026 (Sep 2025) 2.569 100 T+230 2.569 Sep 17 2020 Brown & Brown US$700m Mar 15 2031 (Dec 2030) 2.375 99.89 T+170 2.387

Sep 17 2020 Cooperative Rabobank US$1bn Sep 24 2026 (Sep 2025) 1.004 100 T+73 1.004

Sep 17 2020 PartnerReFinance B US$500m Oct 1 2050 (Oct 2040) 4.5 100 4.5 4.5 Sep 17 2020 Swedbank US$1bn Sep 25 2023 0.6 99.988 T+45 0.604 EUROS Sep 15 2020 Munich Re green T2 €1.25bn May 26 2041 (May 2031) 1.25 98.85 MS+155 / B+184.7 1.367

56 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 56 18/09/2020 20:07:46 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+260 area, - >€1.5bn Baa2/BBB- BNPP / HSBC / Santan / Bankia / - MS+235 area BBVA / CA-CIB / CM-CIC / Citi / CMZ / JPM / MS / SG / Uni - - - -/BBB Danske / OP / Sven / Swed - MS+90 area, MS+70 3 ~€1.5bn Baa2/BBB+/ BNPP / BofA / GS / BcaIMI / MS / - area BBB+/A- Scope SMBC Nikko / SG / Uni

G+180 area, G+150 - £2.35bn Baa2 HSBC / JPM / NatWest / SG / Lloyds - area, G+135/+140 / MUFG G+68 area, - - Aa2/-/- HSBC / NatWest -

G+70 area, - - Aa2/-/- HSBC / NatWest -

MS+140/+145, - - Baa1/BBB+ CS / UBS Switz 100%. AM 61.7%, Ins 15.5%, PB MS+140/+145 11.5%, Tsy 7.5%, PF 4%.

ASW+88/+90 - A$0 -/A+ ANZ / WBC / TD -

T+190 area, - - Baa2 CBA / NAB - T+185/+190 ASW+170 area - - A3 CBA -

- - - -/BBB+ Danske / SEB / Swed - - - - -/BBB+ Danske / SEB / Swed - - - - -/BBB+ Danske / SEB / Swed - - - - - SEB -

- - - -/BBB- HCM / Swed - - - - -/BBB- HCM / Swed - - - - -/BBB- HCM / Swed - - - - Baa3 HCM - - - - Baa3 HCM -

SOFR+67/+72, - - A2/A-/AA- BofA / Citi / DB / JPM / Scotia - SOFR+55 (the #) T+55/+60, T+43 - - A2/A-/AA- BofA / Citi / DB / JPM / Scotia - (the #) T+100 area, T+75 -1 US$2.4bn A3/A/A Citi / JPM - (+/-2) T+312.5 area - - -/A-/BBB+ GS / JPM -

T+125 area, T+110 -1 US$700m A1/AA- Citi / DB / JPM / USB - (+/-3) T+100 area, T+80 1 US$1.6bn A1/A- SMBC Nikko - (+/-5) T+185 area, T+150 -3 US$2.7bn A2/BBB+ SMBC Nikko / GS / Citi / BofA - (+/-5) 4% area, 3.75% - - -/BBB+/A- BofA / JPM - (+/-5) T+80/+85, T+65 2 US$900m A2/A+ BofA / Miz / MS / USB - (the #) T+170/+175, T+155 6 US$3.8bn A2/A-/A+ HSBC - (the #) T+260 area 8 US$3.7bn Baa2/BBB-/BB+ Citi / GS / JPM / MS / Uni / WFS - T+212.5 area, T+175 6 US$4.7bn Baa3/BBB- BofA / JPM / PNC / Truist (#) T+90 area, T+75a -1 US$1.6bn A3/A-/A+ Barc / CS / MS / Rabo / TD (+/-2) 4.75% area - US$1.7bn Baa1/BBB WFS / Barc / BofA - T+60 area, T+45 (#) 2 US$1.5bn Aa3/A+/A+ Barc / Citi / GS / MS

MS+190 area, -10 €4.5bn -/A/A Citi / CA-CIB / DB / GS / HSBC Fr 31%, Ger/Aus 22%, UK 16%, S.Eur MS+160/+165 8%, Switz 8%, Nordics 7%, Benelux 6%, Other 2%. AM 71%, Ins/PF 15%, Bks/PB 8%, CB/OI 4%, HF 2%.

International Financing Review September 19 2020 57

5 IFR Bonds 2351 p25-61.indd 57 18/09/2020 20:07:46 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 18/9/2020 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Sep 15 2020 Soc Gen positive impact SNP €1bn Sep 22 2028 (Sep 2027) 0.875 99.64 MS+128 / B+157.8 -

Sep 16 2020 Commerzbank green SNP €500m Mar 24 2026 (Mar 2025) 0.75 99.51 MS+130 / B+157.1 0.861

Sep 16 2020 Unipol Gruppo green €750m Sep 23 2030 3.25 99.76 MS+350 / B+376.5 3.279

YEN Sep 18 2020 Soc Gen SNP ¥36.1bn Sep 27 2024 0.768 100 OS+77 - Sep 18 2020 Soc Gen SNP ¥21.1bn Sep 28 2026 (Sep 2025) 0.922 100 OS+92 - Sep 18 2020 Soc Gen SNP ¥7.5bn Sep 28 2030 (Sep 2029) 1.075 0 OS+102 -

STERLING Sep 14 2020 Coventry BS £250m Sep 21 2025 1 99.71 G+120 1.06

SWISS FRANCS Sep 16 2020 Met Life SFr250m Sep 25 2028 0.125 100 MS+55 / Eidg+67.2 0.125

NON CORE Sep 17 2020 SBAB Bank SKr400m incr Jun 5 2023 0.89 101.7 - 0.271 (SKr1.35bn) COVERED BONDS EUROS Sep 14 2020 Cafﬁl €1.5bn Feb 22 2028 0.01 102.2 MS+4 / B+34.3 -0.289

Sep 15 2020 SpareBank 1 Boligkreditt €1bn Sep 22 2027 0.01 102 MS+7 / B+37.3 -0.279 green

Sep 15 2020 UniCredit Bank Austria €500m Sep 21 2035 0.05 99.66 MS+9 / B+34.3 0.073

Sep 16 2020 BAWAG €750m Sep 23 2030 0.01 101.7 MS+7 / B+33.7 -0.161

Sep 16 2020 EIKA Boligkreditt €500m Mar 23 2028 0.01 102.1 MS+7 / B+36.7 -0.267

Sep 16 2020 NN Bank €500m Sep 24 2035 0.05 99.54 MS+12 / B+37.4 0.081

Sep 17 2020 CCDJ €500m Sep 24 2025 0.01 101.8 MS+9 / B+35.7 -0.341 Sep 17 2020 Landesbank Saar €250m Sep 24 2030 0.01 101.6 MS+8 / B+34.9 -0.15 Sep 17 2020 Sparebanken Vest €500m Nov 24 2025 0.01 102 MS+6 / B+33.4 -0.367 Boligkreditt

NON CORE Sep 16 2020 Kiwibank A$500m Sep 23 2025 3mBBSW+70 100 3mBBSW+70 -

HIGH YIELD US DOLLARS Sep 11 2020 Radiate Holdco US$900m Sep 15 2026 4.5 100 T+415 4.5 (Sep 2023) Sep 11 2020 Radiate Holdco US$1bn Sep 15 2028 6.5 100 T+599 6.5 (Sep 2023) Sep 11 2020 Tallgrass Energy Partners US$600m Oct 1 2025 (Oct 2022) 7.5 100 T+723 7.5

Sep 11 2020 Western Global Airlines US$50m Aug 15 2025 10.375 102 - 9.846 Sep 14 2020 Asbury Automotive Group US$125m Mar 1 2028 (Mar 2023) 4.5 101 T+387 4.341 Sep 14 2020 Asbury Automotive Group US$125m Mar 1 2030 (Mar 2025) 4.75 101.8 T+391 4.52

58 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 58 18/09/2020 20:07:47 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+155/+160, 0 >€5bn Baa2/A/A- SG - MS+130 (+/-2) MS+160 area, 0 >€4bn, 220acs Baa2/BBB-/BBB CMZ / Danske / ING / Natx / Santan Fr 27%, Nordics 18%, Ger 13%, UK/Ire MS+135 (+/-5) 11%, Benelux 10%, S.Eur 12%, Aus/Switz 4%, Asia 4%, Other 1%. FM 69%, Gov/ Agcy 12%, Bks 10%, Ins/PF 7%, Other 2%. Dark Green 60%, Medium Green 13%, Light Green 5%, Non-Green 22%. MS+390 area, -10 €2.9bn, 270acs Ba2/-/BB+ BNPP / BcaIMI / JPM / Medio / Uni UK/Ire 40%, It 20%, Fr 16%, Switz 6%, MS+360 area Iberia 5%, Nordics 5%, Ger/Aus 4%, Benelux 3%, Other 1%. AM 77%, Bks/PB 15%, Ins/PF 5%, HF 2%, Other 1%.

OS+77, OS+77 - - Baa2/BBB/A- Miz / MS / Nomura / SG - OS+90/+92, OS+92 - - Baa2/BBB/A- Miz / MS / Nomura / SG - OS+100/+102, - - Baa2/BBB/A- Miz / MS / Nomura / SG - OS+102

G+120 area, G+120 - £265m A2/-/A- BNPP / HSBC / JPM / Santan / TD - (the #)

MS+55/+57 0 >SFr250m, ~67acs Aa3/AA-/AA- CS / DB Switz 100%. AM 52%, Ins 19%, Tsy 13%, Bks 8%, PF 4%, Corp 4%.

- - - A1/A SEB -

MS+9 area, MS+5 0 >€3bn Aaa/AA+/-/AAA BNPP / CA-CIB / CS / HSBC / JPM Ger/Aus 34%, Fr 28%, UK/Ire 16%, (+/-1) Nordics 8%, It 5%, Benelux 3%, Asia 3%, Switz 2%, Other 1%. Bks 53%, CB/OI 30%, AM 16%, Ins 1%. MS+8 area -1 >€2.75bn Aaa Barc / BNPP / Swed / Uni Ger/Aus/Switz 33%, Nordics 21%, Benelux 18%, UK/Ire 18%, Fr 6%, S.Eur 2%, Other 2%. Bks/PB 54%, AM 31%, CB/OI 14%, Ins/PF 1%. MS+14 area, MS+10 0 >€2.95bn, 105acs Aaa Erste / Helaba / ING / SG / Uni Ger 42%, Switz 11%, Aus 11%, Iberia (+/-1) 8%, Nordics 7%, UK 5%, Fr 5%, It 5%, Benelux 3%, ME 2%, Other 1%. Bks 52%, FM 30%, CB/OI 10%, Ins 7%, Other 1%. MS+12 area, MS+8 -1 >€2.8bn Aaa BNPP / DZ / Erste / Helaba / LBBW - (+/-1) MS+12 area, MS+8 -1.5 >€1.5bn Aaa CA-CIB / LBBW / Natx / SEB / UBS - (+/-1) MS+17 area, MS+13 -1.5 >€2.5bn -/AAA HSBC / LBBW / Natx / Rabo / Uni Ger/Aus 51%, Benelux 14%, Switz 8%, Fr (+/-1) 7%, Nordics 6%, S.Eur 6%, UK 1%, Other 7%. FM 43%, Bks/PB 35%, CB/OI 15%, Ins/PF 6%, Other 1%. MS+12 area -1 >€2.1bn Aaa/-/AAA Barc / LBBW / RBC / SG / UBS - MS+12 area - >€575m -/-/AAA Deka / Helaba - MS+9 area, MS+6 0 ~€780m, 42acs Aaa Danske / Deka / DB / Santan Ger/Aus 43%, Nordics 29%, UK/Ire 14%, (+/-1) Benelux 9%, Switz 1%, It 1%, RoEur 3%. Bks 59%, AM 26%, Ins/PF 14%, CB/ OI 1%.

3mBBSW+80 area, - - Aaa/-/AAA ANZ / UBS - 3mBBSW+75/+80

5% area, - JPM/CS/BARC/GS/MS/SocGen/UBS 4.5%/4.75% 6.5%/6.75%, - JPM/CS/BARC/GS/MS/SocGen/UBS - 7.5%/7.75% - - B1/BB-/BB- RBC / BXCM - / BofA / Southcoast / Citizens / GS / MS / Scotia / USB / WFS 102.00 px - - B3/B-/B+ RBC / TBC - 100.50-101.00 px - - B1/BB BofA / JPM / WFS - 101.20%/101.75% - - B1/BB BofA / JPM / WFS -

International Financing Review September 19 2020 59

5 IFR Bonds 2351 p25-61.indd 59 18/09/2020 20:07:47 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 18/9/2020 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) Sep 14 2020 Gartner US$800m Oct 1 2030 (Oct 2025) 3.75 100 T+309 3.75

Sep 14 2020 Hologic US$950m Feb 15 2029 (Sep 2023) 3.25 100 T+270 3.25

Sep 14 2020 New Residential Investment US$550m Oct 15 2025 (Oct 2022) 6.25 100 T+596.5 5.25 Sep 14 2020 Shea Homes US$300m Apr 1 2029 (Jan 2024) 4.75 100 - 4.75

Sep 14 2020 Uber Technologies US$500m Jan 15 2028 (Sep 2023) 6.25 100 T+580 6.25 Sep 15 2020 Altice France US$475m Jan 15 2029 (Sep 2023) 5.125 100 T+456 5.125

Sep 15 2020 Cablevision Lightpath US$450m Sep 15 2027 (Sep 2023) 3.875 100 T+343 3.875 Sep 15 2020 Cablevision Lightpath US$415m Sep 15 2028 (Sep 2023) 5.625 100 T+510 5.625 Sep 15 2020 Cheniere Energy US$2bn Oct 15 2028 (Oct 2023) 4.625 100 T+407 4.625

Sep 15 2020 Nexstar Broadcasting US$1bn Nov 1 2028 (Nov 2023) 4.75 100 T+426 4.75

Sep 15 2020 Park Hotels & Resorts US$725m Oct 1 2028 (Oct 2023) 5.875 100 T+535 5.875

Sep 15 2020 Qorvo US$700m Apr 1 2031 (Oct 2025) 3.375 100 T+275 3.375 Sep 15 2020 Specialty Building Products US$600m Sep 30 2026 (Sep 2022) 6.375 100 T+601 6.375 Holdings Sep 16 2020 Energizer Holdings US$800m Mar 31 2029 (Sep 2023) 4.375 100 T+383bp 4.375 Sep 16 2020 KBR US$250m Sep 30 2028 (Sep 2023) 4.75 100 T+422bp 4.75

Sep 16 2020 L Brands US$1bn Oct 1 2030 (Oct 2025) 6.625 100 T+595bp 6.625

Sep 16 2020 New Red Finance US$1.4bn Oct 15 2030 (Oct 2025) 4 100 T+334bp 4 (Restaurant Brands) Sep 16 2020 NFP US$225m Aug 15 2028 (Aug 2023) 6.875 104 - 6.223

Sep 17 2020 Alliance Data Systems US$500m Jan 15 2026 7 100 - 7 (Jan 2022) Sep 17 2020 First Quantum Minerals US$1.5bn Oct 15 2027 6.875 100 T+641 6.874 (Oct 2023) Sep 17 2020 Methanex US$700m Oct 15 2027 5.125 100 T+466 5.125

Sep 17 2020 Michaels Stores US$375m Oct 15 2027 4.75 100 T+428 4.75 (Oct 2023) Sep 17 2020 Oppenheimer Holdings US$125m Oct 1 2025 5.5 100 - 5.5 (Oct 2022) Sep 17 2020 Reynolds Group US$1bn Oct 15 2027 4 100 T+353 4 (Oct 2023) EUROS Sep 15 2020 Altice France €500m Jan 15 2029 (Sep 2023) 4.125 100 B+474 4.125

Sep 15 2020 SNF €350m Feb 1 2026 (Sep 2022) 2 100 B+270 2

Sep 15 2020 SNF €350m Feb 1 2029 (Sep 2023) 2.625 100 B+321 2.625

Sep 16 2020 Intrum €250m incr Aug 15 2025 (Aug 2022) 4.875 100.8 B+542.73 4.704 (€850m)

Sep 16 2020 Maxeda €420m Oct 1 2026 (Oct 2022) 5.875 100 B+656 5.875

Sep 17 2020 Kion €500m Sep 24 2025 1.625 99.41 MS+217.4 / B+246.1 1.75

60 International Financing Review September 19 2020

5 IFR Bonds 2351 p25-61.indd 60 18/09/2020 20:07:47 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution 4%/4.125%, 4% area - - Ba3/BB JPM / Citizens / TD / USB / WFS / - BofA / Truist / PNC / Southcoast 3.25% area - - Ba2/BB- GS / BofA / JPM / Citi / MS / MUS - / WFS 6%/6.25% - - B3/B- CS / JPM / Citi - 4.75%/4.875%, - - B1/BB- JPM - 4.75% area 6.375% area - - B3/CCC+ MS / BofA / Barc / Citi / GS - Low 5%s, 5.25% - - B2/B BNPP / GS / JPM - area, 5.125% cpn 4.25% area, 4% area - - B1/B+ GS / RBC / DB / MS - 6% area, 5.75% area - - Caa1/B GS / RBC / DB / MS - 4.75% area - - Ba3/BB CS / BofA / CIBC / CA-CIB / GS / - HSBC / Intesa SP / JPM / Miz / MS / MUFG / RBC / Santander / SGAS / SMBC / Natx 4.875% area - - B3/B BofA / CS / Citi / DB / GS / MUFG / - Citizens / FITB / Southcoast / Miz / Truist / WFS 6% area - - B1/BB- BofA / JPM / WFS / Citi / MS / GS / - Barc / Jeff / Truist 3.5% area - - Ba1/BB+ BofA / Citi / WFS / MS - 6.5%/6.75% - - B3/B- BofA / Nomura / RBC / Truist / WFS -

4.5% area - - B2/B+ BofA / Citi / JPM / Barc / MUFG - 4.75%/5% - - B1/B+ BofA / BBVA / BNPP / Southcoast / - Citi / Citizens / MUFG / Regions / Scotia / Truist 6.75% area - - B2/B+ JPM / Barc / BofA / Citi / HSBC / - WFS 4.125% area - - B2/B+ MS / JPM / WFS / BofA / Barc / RBC -

104.00-104.25 px - - Caa2/CCC+ BofA / Barc / JPM / MS / SMBC / TD - / MUFG / CIBC / DB / Regions / UBS / KKR / MQB 6.5%/6.75% - - - BofA/MUMSS/WFS/Truist/JPM/Miz/ BNPP/FITB/RBC/CIBC 7.125% area, 7% area - - B- / CCC+ GS/JPM/BNPP/SG/Absa

5.125%/5.375%, - - Ba1 / BB JPM/BMO/BGL-BNP/RBC 5.125% 4.875% area - - Ba3 / B+ JPM/WFS/BofA/Truist/GS/Barc/ USB/BMO/FITB/CS/UBS/Citizens - - - B1 / B+ Oppco

4%/4.25%, 4% - - B1 / B+ CS/HSBC

Low 4%s, 4.25% - - B2/B BNPP / GS / JPM - area, 4.125% cpn 2.25% area, - - -/BB+ BNPP / CA-CIB - 2%/2.125% 2.875% area, - - -/BB+ BNPP / CA-CIB - 2.625%/2.75% 100.50 area, 100.75 - - Ba2/BB/BB MS / Nordea / SEB / BNPP / Citi / - px (the #) CS / Danske / DB / DNB / GS / JPM / NatWest / Nyk / Swed 6%/6.25%, 5.875% - - B2/B+ GS / ING / ABN / BNPP - (the #) 2.375%/.5%, 2% - €2.8bn -/BB+/BBB- BNPP / CMZ / GS / Uni Fr 19%, Ger/Aus 24%, UK/Ire 33%, area, 1.75% yld Benelux 5%, S.Eur 5%, Switz 8%, Nordics 5%, Other 1%. AM 81%, Bks/PB 4%, Ins/PF 5%, OI/Agcy 8%, Other 2%.

International Financing Review September 19 2020 61

5 IFR Bonds 2351 p25-61.indd 61 18/09/2020 20:07:47 GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (18/9/2020) Moody’s S&P Fitch Moody’s S&P Fitch Sovereign 1 2 3 4 5 6 Sovereign 1 2 3 4 5 6 Abu Dhabi Aa2 – AA AA+ AA AA+ Laos Caa2 n – – – B– n BBB+ Albania B1 Ba2 B+ BB – – Latvia A3 Aaa A AAA A– AAA Andorra – Ba2 BBB AAA BBB+ A+ Lebanon Caa2 Caa1 D CC CC CCC Angola Caa1 B3 B– n B– CCC B Lesotho – – – – B B+ Argentina Caa2 Caa1 CCC+ CCC+ RD CCC Liechtenstein – Aaa AAA AAA – – Armenia Ba3 Ba1 – – BB– BB Lithuania A3 p Aaa A AAA A– p AAA Aruba – – BBB+ n BBB+ BBB– n BBB Luxembourg Aaa Aaa AAA AAA AAA AAA Australia Aaa Aaa AAA AAA AAA n AAA Macau Aa3 Aa2 – – AA nAAA Austria Aa1 Aaa AA+ AAA AA+ AAA Macedonia (FYR) – – BB– BB BB+ n BBB– Azerbaijan Ba2 Ba2 BB n BB+ BB+ BB+ Malaysia A3 A1 A– n A+ A– A Bahamas Ba2 n Baa1 BB+ BBB– – – Maldives B2 n Ba3 – – B n B Bahrain B2 Ba3 B+ p BB– B+ BB+ Mali Caa1 n B1 – – – – Bangladesh Ba3 Ba2 BB– BB– BB– BB– Malta A2 Aaa A– p AAA A+ AAA Barbados Caa1 B2 B– B– – – Mauritius Baa1 A2 – – – – Belarus B3 B3 B n d BB B Mexico Baa1 n A1 BBB+ n A+ BBB – BBB+ Belgium Aa3 Aaa AA AAA AA– AAA Moldova B3 B2 – – – – Belize Caa1 n B1 CC+ CCC – – Mongolia B3 n B1 B B+ B B+ Bermuda A2 Aa3 A+ AA+ – – Montenegro B1 p Ba1 B+ n AAA – – Bolivia Ba3 Ba2 B+ B+ B+ B+ Montserrat – – BBB– BBB– – – Bosnia Herzegovina B3 B3 B BB– – – Morocco Ba1 Baa2 BBB– BBB+ BBB– n BBB Botswana A2 n Aa3 A– A+ – – Mozambique Caa2 Caa1 CCC+ CCC+ CCC B– Brazil Ba2 Ba1 BB– BB+ BB – n BB Namibia Ba2 n Baa3 – – BB BB+ Bulgaria Baa2 A3 BBB A BBB pA– Netherlands Aaa Aaa AAA AAA AAA AAA Cambodia B2 B1 – – – – New Zealand Aaa Aaa AA p AAA AA AAA Cameroon B2 Ba2 B n BBB– B n BB+ Nicaragua B2n B1 B– B– B– n B– Canada Aaa Aaa AAA AAA AA+ AAA Nigeria B2 n B1 B B+ B+ n B+ Cape Verde – – B BB– B – B Norway Aaa Aaa AAA AAA AAA AAA Cayman Islands Aa3 Aa2 – – – – Oman Ba3 n Baa3 BB n BB+ BB– n BB+ Chile A1 n Aa2 A+ AA A AA Pakistan B3 B2 B– B– B– B– China A1 Aa3 A+ A+ A+ A+ Panama Baa1 A2 BBB+ n AAA BBB A Colombia Baa2 A3 BBB– BBB+ BBB nBBB+ Papua New Guinea B2 B1 B – B – – – Congo (DR) B3 n B3 CCC+ CCC+ – – Paraguay Ba1 Baa3 BB BB+ BB+ BB+ Congo (Rep) Caa2 n B2 CCC+ BBB– CCC B+ Peru A3 A1 BBB+ A BBB+ A– Cook Islands – – B+ AAA – – Philippines Baa2 A3 BBB+ A– BBB p BBB+ Costa Rica B2 n Ba2 B– n BB– B n B+ n Poland A2 Aa3 A –A A– AA– Cote d’Ivoire Ba3 Baa3 – – B+ p BBB– Portugal Baa3 p Aa3 BBB AAA BBB AA Croatia Ba2 p Baa3 BBB BBB+ BBB– p BBB+ Qatar Aa3 Aa3 AA– AA AA– AA Cuba Caa2 Caa2 – – – – Ras al–Khaimah A AA+ A AA+ Curacao – – BBB+ BBB+ – – Romania Baa3 nA3 BBB– A– BBB– n BBB+ Cyprus Ba2 p A2 BBB– AAA BBB – p A Russia Baa3 Baa2 BBB– BBB BBB BBB Czech Rep Aa3 Aa1 AA– AA+ AA– AAA Rwanda B2 B1 B+ n B B+ B+ Denmark Aaa Aaa AAA AAA AAA AAA St Vincent & Gren B3 Ba3 – – – – Dominican Rep Ba3 Ba1 BB– n BB+ BB– BB– San Marino – – – – BBB– n BBB+ Ecuador B3 n B2 B– B– B– B– Saudi Arabia A1 n A1 A– A A A+ Egypt B2 B1 B B B+ B+ Senegal Ba3 Baa1 B+ BBB– – – El Salvador B3 B1 B– AAA B– n B Serbia Ba3 Ba1 BB+ BBB– BB+ BBB– Estonia A1 Aaa AA– AAA AA– AAA Seychelles – – – – B+ BB Eswatini B3 B1 – – – – Singapore Aaa Aaa AAA AAA AAA AAA Ethiopia B2 B1 B B B n B Slovakia A2 Aaa A+ AAA A AAA Fiji Ba3 n Ba3 BB– BB– – – Slovenia Baa1 p Aa1 AA– AAA A AAA Finland Aa1 Aaa AA+ AAA AA+ pAAA Solomon Islands B3 B2 – – – – France Aa2 p Aaa AA AAA AA n AAA South Africa Baa3 n A3 BB– BB+ BB+ n BBB– Gabon Caa1 p B1 – – B BB+ South Korea Aa2 Aa1 AA AAA AA– AA+ Georgia Ba2 Baa3 BB BBB– BB n BBB– Spain Baa1 Aa1 A AAA A– AAA Germany Aaa Aaa AAA AAA AAA AAA Sri Lanka B2 Ba3 B– B– B– n B– Ghana B3 n B1 B– d B d B B Suriname Caa3 n Ba3 SD CCC– CC CCC Greece B1 Baa1 BB– AAA BB BBB+ Sweden Aaa Aaa AAA AAA AAA AAA Guatemala Ba1 Baa3 BB– BB+ BB nBB+ Switzerland Aaa Aaa AAA AAA AAA AAA Honduras B1 Ba2 BB– BB – – Tanzania B2 Ba3 – – – – Hong Kong Aa2 n Aaa AA+ AAA AA– AAA Taiwan Aa3 Aa2 AA– AA+ AA– AA+ Hungary Baa3 Baa1 BBB A– BBB A Thailand Baa1 A2 BBB+ A BBB+ pA– Iceland A3 p A3 A A A n A+ Trinidad & Tobago Ba1 n Baa3 BBB BBB+ – – India Baa3 n Baa1 BBB– BBB+ BBB– BBB– Tunisia B2 n Ba3 – – B B+ Turkey Indonesia Baa2 A3 BBB n BBB+ BBB BBB B2 n d B1 d B+ BB– BB– n BB– Iraq Caa1 B3 B– AAA B– n B– Turks & Caicos – – BBB+ AAA – – Ireland A2 Aaa AA– AAA A+ AAA Uganda B2 Ba3 BB A– B+ n B+ Israel A1 Aa3 AA– AA+ A+ AA Ukraine B3 B3 B B B pB Italy Baa3 Aa3 BBB nAAA BBB– AA– UAE Aa2 Aa2 – – – – Jamaica B2 Ba3 B+ n BB– B+ BB– UK Aa2 Aaa AA + AAA AA n AAA Japan A1 p Aaa A+ AA+ A AAA USA Aaa Aaa AA+ AAA AAA n AAA Jordan B1 Ba1 B+ BB BB– nBB Uruguay Baa2 A2 BBB A– BBB– n BBB+ Kazakhstan Baa3 p Baa2 BBB– BBB BBB BBB+ Uzbekistan – – BB– n BB– Kenya B2 n Ba3 B+ n BB– B+ BB– Venezuela C Ca SD CC – – Kuwait Aa2 Aa2 AA– n AA AA AA+ Vietnam Ba3 Ba1 BB BB BB pBB Kyrgyzstan B2 Ba3 – – – – Zambia Caa2 n B3 CCC+ CCC+ CCC B– 1 Moody’s Government Bonds 5 Fitch Government Bonds n Negative outlook/on watch * Taken off positive watch/ c Improvement in ratings, 2 Moody’s Country Ceilings 6 Fitch Country Ceilings for downgrade outlook outlook or watch status 3 S&P Government Bonds p Positive outlook/on watch N New rating ** Taken off negative watch/ d Deterioration in ratings, 4 S&P Transfer and for upgrade W Rating withdrawn outlook outlook or watch status Convertibility Assessments SD Selective default 62 International Financing Review September 19 2020

6 IFR Global Debt 2351 p62.indd 62 18/09/2020 19:04:00 EMERGING MARKETS China 64 Indonesia 68 South Korea 69 Thailand 71 Russia 72 Ukraine 72 Bahrain 72 Qatar 74 UAE 74 Dominican Republic 74 Mexico 75

FRONT STORY CEE Bulgaria hits long-distance target Sovereign returns for ﬁrst time since 2016 with tight dual-trancher

BULGARIA raised €2.5bn in its bond market Bulgaria came inside those levels, RANKEDûSECOND LOWESTûAMONGû%5ûMEMBERû RETURNûONû4UESDAY ûBREAKINGûAûFOUR YEARû LAUNCHINGûTHEûõBNû YEARûATûSWAPSûPLUSû states, after Estonia. ABSENCEûWITHûAûPUSHûINTOûLONG DISTANCEû BPûANDûTHEûõBNû YEARûATûPLUSûBP Earlier this year Bulgaria amended its territory. Leads had seen fair value at around 70bp 2020 budget law to be able to raise up to The sovereign completed a comfortably and 145bp respectively, with fair value on ,VBNûõBN ûINûNEWûDEBTûTOûlNANCEûAû OVERSUBSCRIBEDûDUAL TRANCHEûTRANSACTIONû the longer note proving more subjective lSCALûGAPûANDûSETûASIDEûLIQUIDITYûBUFFERSûTOû COMPRISEDûOFû YEARûANDû YEARûBONDS GIVENûITûWASûSIGNIlCANTLYûEXTENDINGûTHEû weather the economic impact of the “Extending the curve is the big curve. coronavirus pandemic. achievement here,” said a banker familiar The amount sold was at the upper end of 4HEûlNALûBOOKSûWEREûAROUNDûõBNûFORû with the deal. expectations, after the sovereign signalled the shorter note and over €3.6bn for the “The fact they were able to take two core EARLIERûTHISûYEARûTHATûITûWANTEDûTOûRAISEûõBN PLUS longer bond. maturities, get strong demand, lock in low “Back in April you had really uncertain h)TSûNOTûAûFREQUENTûBORROWERûBUTûITSûAû rates and pay basically no premium is a markets and it’s unlikely that anyone who name known to the investor community great outcome.” has been absent for four years would want because of the bonds outstanding and you Bulgaria began marketing a September to come into an uncertain and volatile have seen the likes of Bulgarian Energy 2030 note at the swaps plus 95bp area and a market,” said the banker. (OLDINGûINûTHEûMARKET ûWHICHûISûûSTATE September 2050 bond at 175bp–180bp. “Since then, Bulgaria has basically seen all owned,” said the banker. 0RE ANNOUNCEMENT ûLEADSûSAWû"ULGARIASû its neighbours come and do very good deals, “The investors were the same people who SûATûANû) SPREADûOFûPLUSûBP ûITSûSû which encouraged them to look at the look at Romania and Croatia, with a chance at 44bp and 2035s at 113bp. market seriously.” to diversify their portfolios. If you have the h7EûBELIEVEûTHEû YEARûCOULDûPRICEûAROUNDû Bulgaria (Baa2/BBB/BBB) is one of the chance to get your hands on a rarer issuer swaps plus 75bp (but see better value in European Union’s poorest member states, then of course you want to be a part of it #ROATIA(UNGARY ûWHILEûTHEûLONG ENDûOFFERSû but also one of the least indebted. The because who knows the next time when value above swaps plus 150bp,” said ING INVESTORûPRESENTATIONûSHOWEDûAûDEBT TO '$0û they will issue.” analysts after IPTs were announced. of just 20.4% for 2019, which Bulgaria said Robert Hogg

transaction not close as planned, there CTP joins ESG charge will likely be pressure on the rating that may include a one notch downgrade to Real estate company to make debut with green bonds Ba1.” The company is looking at issuing this Environmental, social and governance bonds The latter three are also real estate week. are causing a buzz across markets, and a companies with assets in CEE and that A second banker said that the majority of debut issuer from the Central and Eastern have issued in the international bond ESG bonds from corporates are sustainable Europe region is joining the fray in CTP with markets. rather than green. AûPROPOSEDûlVEûTOûSEVEN YEARûEUROûGREENû CTP is rated Baa3 by Moody’s and BBB– “That is because as an issuer, many of offering. by S&P. Moody’s expects a €500m deal to them don’t have assets to fund that strictly The company, which describes itself as RElNANCEûSECUREDûMORTGAGEûDEBTûANDû comply with the green bond guidelines,” THEûLARGESTûFULL SERVICEûOWNER DEVELOPERû development projects, and says that said the banker. of prime industrial and logistics property bondholders will be subordinated to “Look at who is issuing proper green. in the CEE region, will use the proceeds lenders of secured bank debt of about It is largely REITs because all they need TOûlNANCEûAûPORTFOLIOûOFûELIGIBLEûGREENû €2.6bn. to do is stick some solar panels on the assets. “CTP aims to reduce the level of structural roof and some double glazing on the “They are a logistics company involved in subordination of the bonds over time, windows and they are sorted, it is easier real estate,” said a banker familiar with the supported by planned unsecured issuances for them,” he added about REITs in matter. over the next 12–24 months,” wrote Moody’s general and before the CTP mandate was “It’s an easy sell in terms of being a good last week. announced. CREDIT ûBUTûTHEûDIFlCULTûSIDEûISûHOWûTOû The rating action “is dependent on JP Morgan and Morgan Stanley are global position it. You can talk about CPI Property, successfully placing its contemplated coordinators. They are joined on the books NEPI and Globalworth but they are not the benchmark bond, which will support the by Erste Group, Raiffeisen Bank International, same thing. We will present the company group in unencumbering a meaningful Societe Generale and UniCredit. and see what investors say.” portion of its asset base. Should the Robert Hogg

International Financing Review September 19 2020 63

7 IFR Emerging 2351 p63-76.indd 63 18/09/2020 19:06:36 4HEûPERPSûWEREû#HEM#HINASûlRSTû SPECIlCALLYûREQUESTEDûBYûTHEûBORROWER ûISûAû subordinated note issue, making it hard to less preferred currency than US dollars,” a ASIA-PACIFIC judge fair value, although it has sold senior lead said. dollar perps in the past. "EIJINGû%NTERPRISESûEURO DENOMINATEDûSû The company’s euro bonds due June 2022 WEREûSEENûATûMID SWAPSûPLUSûBP ûSOûTHEû CHINA WEREûBIDûATûMID SWAPSûPLUSûBP ûAGAINû pricing for the new bonds looks fair considering pointing to little new issue concession for THEûTHREE YEARûEXTENSION ûTHEûLEADûSAID CHEMCHINA DELIVERS JUMBO BOND THEûNEWûFOUR YEARS China National Chemical Corp The bonds slightly underperformed in #HEM#HINA ûALSOûPRICEDûAûõMûFOUR YEARû CHINA NATIONAL CHEMICAL CORP (ChemChina) secondary trading on Tuesday. Investment BONDûATûMID SWAPSûPLUSûBPûLASTûWEEKû LASTû-ONDAYûPRINTEDûAû53BN EQUIVALENTû grade bonds were generally 3bp–5bp wider, The notes, however, are rated a notch lower DUAL CURRENCYûBONDûISSUEûWELLûINSIDEûINITIALû but ChemChina’s 5s and 10s were 12bp and at Baa2 by Moody’s compared with Beijing guidance, even after the US escalated its 7bp wider, while the 30s and perp were Enterprises’ Baa1. trade war with China by putting the wrapped around reoffer. Beijing Enterprises’ notes were trading company on a controversial list. The new deal exceeded a target size of BPûTIGHTERûINûSECONDARYûONûTHEIRûlRSTû 4HEûCENTRALûSTATE OWNEDûSEEDS TO US$2bn, which is earmarked for debt trading day on Friday. CHEMICALSûGROUPûPRICEDûAû53MûlVE YEARû redemptions later in the year. ChemChina 4HEûBONDSûAREûTHEûSTATE CONTROLLEDûBEER TO senior tranche at Treasuries plus 185bp, a has US$2bn of private placement bonds energy conglomerate’s third 53BNû YEARûTRANCHEûATû4REASURIESûPLUSû MATURINGûINû$ECEMBERûANDûAûFURTHERû EURO DENOMINATEDûISSUEû4HEûCOMPANYû BP ûANDû53MûOFû YEARSûATûPARûTOû US$5.5bn of debt maturities in 2021, previously visited the international bond YIELDû ûEQUIVALENTûTOû4REASURIESûPLUSû according to Nomura’s credit sales and market to print euro bonds in April 2015 228.6bp. trading desk. WITHûAûlVE YEARûõMûISSUEûANDûINû!PRILû Respective guidance was Treasuries plus It could cut some of its debt through a 2017 when it raised €800m with its 2022s. 235bp area, Treasuries plus 275bp area, and PROPOSEDû#HINESEû! SHAREû)0/ûOFûCROPû Although demand was driven by local 4.15% area. protection company Syngenta, which it investors, the company’s history in euros It also sold a US$600m subordinated ACQUIREDûFORû53BNûINû helped gain support from Europe, said the PERPETUALûNON CALLûTHREEûTRANCHEûATûPARûTOû Investors are also waiting for progress on banker on the deal. yield 3.35%, inside guidance of 3.7% area. ChemChina’s planned merger with fellow Asia took 82% of the deal and the rest The coupon will reset to the initial 319.4bp 3/%û3INOCHEMû'ROUP ûWHICHûWASûALSOû went to EMEA. SPREADûOVERûTHREE YEARû4REASURIESûPLUSûANû named in the US list. additional 300bp if it is not called after three CDB LEASING PLANS OFFSHORE TIER 2 years. BEIJING ENTERPRISES SELLS EURO !ûõMûFOUR YEARûSENIORûBONDûTRANCHEû GREEN BOND CHINA DEVELOPMENT BANK FINANCIAL LEASING, rated WASûPRICEDûATûMID SWAPSûPLUSûBPû)NITIALû A1/A/A+, has hired banks for a proposed US PRICEûGUIDANCEûWASûMID SWAPSûPLUSûBPû BEIJING ENTERPRISES has raised €500m from a dollar Reg S Tier 2 subordinated capital bond area, but this was later tightened to 175bp lVE YEARûGUARANTEEDûGREENûBONDûOFFERINGûONû OFFERING ûWHICHûWOULDûBEûTHEûlRSTûOFFSHOREû area. the back of a strong bid from domestic Tier 2 bond from a Chinese leasing company. The senior bonds are expected to be rated investors. 4HEû(ONGû+ONG LISTEDûLEASINGûARMûOFû Baa2/A– (Moody’s/Fitch) and the hybrids The 1% unsecured Reg S bonds priced at POLICYûBANKû#HINAû$EVELOPMENTû"ANKû have expected ratings of Baa3/BBB (Moody’s/ ûTOûYIELDû ûORûMID SWAPSûPLUSû started holding investor calls on Friday. Fitch). CNAC (HK) Finbridge will issue the 150bp, inside initial guidance of plus 190bp )TûPLANSûTOûISSUEû YEARûNON CALLûlVEû proposed bonds with a guarantee from area. bonds, according to S&P. Proceeds will be ChemChina. Final orders were over €1.6bn from 49 used to boost Tier 2 capital. The good response came despite the US accounts, including €1.35bn from leads. The proposed bonds have expected $EPARTMENTûOFû$EFENSEûDESIGNATINGû “There was decent interest from Chinese ratings of BBB+/A– (S&P/Fitch), two notches ChemChina, as well as other companies banks although the euro, which was below the respective issuer ratings. including Sinochem, as “Communist Chinese military companies” in a list on ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS August 31. BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE ChemChina’s secondary curve had Asia-Paciﬁc Managing No of Total Share already absorbed the impact, widening by Managing No of Total Share bank or group issues US$(m) (%) 10bp–15bp in the days following the bank or group issues US$(m) (%) 1 Citigroup 206 48,170.35 8.4 publication of the list. 1 HSBC 217 23,535.40 8.2 2 HSBC 282 43,629.07 7.6 With that news priced in, investors did 2 Citigroup 120 16,552.53 5.8 3 JP Morgan 205 43,011.23 7.5 not seem to demand much premium for the 3 Standard Chartered 142 15,468.49 5.4 4 Standard Chartered 191 32,384.47 5.6 new issue, despite the size. 4 Bank of China 162 12,371.82 4.3 5 Goldman Sachs 110 27,697.92 4.8 ChemChina’s March 2025 bonds were 5 UBS 115 11,718.33 4.1 6 Deutsche Bank 109 26,650.62 4.6 QUOTEDûATû4REASURIESûPLUSûBPûATûTHEûSTARTû 6 JP Morgan 100 11,580.50 4.0 7 BNP Paribas 139 26,222.51 4.6 7 Bank of America 71 10,994.63 3.8 of bookbuilding, indicating that the new 8 Bank of America 124 24,444.22 4.2 8 Goldman Sachs 60 9,845.20 3.4 lVE YEARSûWEREûPRICEDûmATûTOûORûINSIDEûFAIRû 9 Credit Agricole 105 15,879.81 2.8 9 Credit Suisse 94 9,353.67 3.3 VALUE ûWHILEûTHEû YEARûTRANCHEûWASûALSOû 10 Morgan Stanley 91 15,780.82 2.7 seen to pay little concession. The 10 BNP Paribas 88 8,910.24 3.1 Total 918 575,341.21 EXCEPTIONûWASûTHEû YEARS ûWHICHûPAIDû Total 615 287,768.31 Excluding equity-related debt. upwards of 10bp premium for the larger Excluding equity-related debt.

size. Source: Refinitiv SDC code: L4 Source: Refinitiv SDC code: L1

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BOC brings blue bonds to Asia CHINA New sustainability instrument proves popular with European buyers

BANK OF CHINA priced the world’s first blue bonds “There are more ESG [environmental, social, measured as they are not familiar with bonds from a commercial bank with a US$942m- and governance] investors in Europe, and they focusing on ocean health,” he said. equivalent dual-currency deal to support ocean are interested in blue bonds,” said a banker at BOC will use the proceeds to fund from a list conservation. one of the Chinese banks on the deal. “For the of 25 projects with total value of Rmb7.13bn Through its Paris branch, the A1/A/A rated Dim Sum tranche, given that the investor base is (US$1.04bn). The projects include nine offshore Chinese lender priced US$500m of 0.950% mainly in Asia, they’re not familiar with the blue wind power projects – seven in China, one in the three-year blue bonds last Monday at 99.694 to bond concept.” UK and one in France – as well as 16 marine- yield 1.054%, or Treasuries plus 90bp, the tight BOC has a history in product innovation. Last related integrated sewage treatment projects in end of final guidance of 90bp–93bp and well year it printed the first SOFR bonds from China, China’s coastal cities, which aim to reduce the inside initial 130bp area guidance. and in February it launched the first offshore discharge of untreated sewage into the ocean, BOC’s Macau branch also priced Rmb3bn Covid-19 relief bonds, again via Macau. according to bond documents. (US$442m) of two-year blue bonds in the Dim “By issuing blue bonds, it hopes to lead The expected overall environmental benefit of Sum market at par to yield 3.15%, 35bp tighter by example and encourage other Asian and these projects will include an increase of 2,987 than initial 3.5% area guidance. Chinese issuers to consider it,” said the banker. megawatts installed capacity for offshore wind Blue bonds are a relatively new The senior unsecured bonds have expected power projects and an incremental sewage sustainability instrument, and BOC’s deal is ratings of A1/A/A and will also qualify as green treatment capacity of 6.176m cubic metres per the first public offering in Asia. Early pioneers bonds. day. include the Nordic Investment Bank and the The banker from the Chinese bank said the government of the Seychelles, which launched REGULAR ISSUER dollar bond was fairly priced but the Dim Sum the concept in 2018 with the help of the World BOC’s reputation as a regular green and tranche offered about 5bp new issue premium Bank. sustainability bond issuer helped the deal gain given the relatively big issue size. BOC’s US dollar tranche was well received by traction. ESG investors like repeat issuers that The three-year dollar notes were bid slightly global investors with nearly half of the bonds place sustainability at the core of their strategies, wider at a spread of 90.6bp versus reoffer of allocated to EMEA investors, an unusually high said a banker at a European bookrunner. 90bp last Tuesday morning while the two-year allocation for Reg S deals from Chinese banks. “We are definitely seeing interest from ESG Dim Sum bonds were bid up slightly at 100.05 Banks and sovereign wealth funds actively investors, who are asking questions on how versus a par reoffer. participated. the progress on the marine projects can be Jihye Hwang, Carol Chan

The bonds may be permanently written BP ûTHEûTIGHTûENDûOFûlNALûGUIDANCEûOFû Moody’s on July 10 revised Tingyi’s Baa1 off in full or in part at the discretion of the the 150bp area (+/–2.5bp), and 52.5bp tighter issuer rating outlook to positive from stable China Banking and Insurance Regulatory than initial 200bp area guidance. TOûREmECTûhAûROBUSTûlNANCIALûPROlLEû Commission or if a relevant authority The notes have expected ratings of Baa1/ FEATURINGûLOWûLEVERAGE ûSTRONGûLIQUIDITYûANDû DECIDESûAûPUBLIC SECTORûINJECTIONûOFûCAPITALûISû BBB+ (Moody’s/S&P), on par with the issuer. net cash position”. needed. $EMANDûFORûTHEûRAREûCONSUMERûSTAPLESû Asia received 84% of the notes, EMEA 15% S&P noted that the interest payment is issuer was strong with orders peaking in and offshore US 1%. Fund managers were subject to the prevailing regulatory EXCESSûOFû53BNûWHENûlNALûGUIDANCEûWASû allocated 74%, banks 17%, insurers and the REQUIREMENTSûANDûWILLûBEûMADEûFROMûTHEû announced. Final orders stood at US$3.3bn public sector 7%, and private banks 2%. issuer’s available resources. from more than 120 accounts, including h4HEREûWASûAûDROP OFFûINûORDERSûAFTERûTHEû Standard Chartered, Bank of China, Bank of US$550m from the leads. release of FPG, but that was mainly fast Communications, China Citic Bank International, 4HEû2EGû3ûDEALûWASûTHEû(ONGû+ONG LISTEDû money. Institutional investor demand was HSBC, Mizuho Securities, ANZ, DBS Bank, Guotai COMPANYSûlRSTûDOLLARûBONDûSINCEûAû strong and sticky, and they remained in the Junan International and CMB International are US$500m June 2017 3.875% note in 2012. In book,” the banker said. global coordinators. ûITûISSUEDû2MBBNûOFûûTHREE YEARû The strong book allowed Tingyi to price They are also bookrunners and lead $IMû3UMûBONDSûTHATûMATUREDûINû!UGUSTû the bonds inside fair value. As it did not have managers with China Minsheng Banking Corp 2018. dollar bonds outstanding, bookrunners used Hong Kong branch, KGI Asia, ABC International, The issuer was drawn back to the market REFERENCESûFROMûOTHERû#HINESEûNON CYCLICALû JP Morgan and Citigroup. by low US dollar rates and the relatively CONSUMERûPLAYSûLIKEû#HINAû-ENGNIUû$AIRYSû STABLEû2-"53$ûEXCHANGEûRATE ûACCORDINGûTOû 1.875% 2025s as comparables. Those bonds INVESTORS LAP UP MASTER KONG TREAT a banker on the deal. traded at a G spread of 155bp ahead of the High name recognition, rarity value and release of IPG. TINGYI (CAYMAN ISLANDS) HOLDING, the producer resilient earnings ensured strong demand, “Markets saw fair value at a spread of OFû#HINASûTOP SELLINGû-ASTERû+ONGûINSTANTû said the banker. BPûTOûBP ûSOû4INGYISûlNALûPRICINGûWASû noodle brand, returned to the US dollar 4INGYISûEARNINGSûGREWûûINûTHEûlRSTû DElNITELYûINSIDE vûTHEûBANKERûSAID BONDûMARKETûAFTERûANûEIGHT YEARûABSENCEû half to Rmb2.38bn (US$$352m). Unlike Nevertheless, the new bonds traded 2bp– WITHûAûWELL RECEIVEDûANDûTIGHTLYûPRICEDû many other corporate issuers since the BPûTIGHTERûONû&RIDAYûMORNING ûTHEIRûlRSTû US$500m deal. beginning of the coronavirus pandemic, trading day. 4HEûûlVE YEARûBONDSûWEREûPRICEDûATû it has also received a positive rating The deal stood out in a crowded primary 99.466 to yield 1.737%, or Treasuries plus review. market last week in terms of book cover

International Financing Review September 19 2020 65

7 IFR Emerging 2351 p63-76.indd 65 18/09/2020 19:06:36 GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 18/9/2020 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

ASIA Sep 14 2020 ChemChina €500m Sep 22 2024 1.125 99.58 MS+168 / B+195.4 1.234

Sep 14 2020 CapitaLand/CapitaLand S$800m Sep 21 2032 2.9 100 SOR+196.5 2.9 Treasury Sep 14 2020 ChemChina US$600m Perpetual (Sep 2023) 3.35 100 T3+319.4 3.35

Sep 14 2020 ChemChina US$600m Sep 22 2025 2 99.49 T+185 2.108

Sep 14 2020 ChemChina US$1bn Sep 22 2030 3 99.86 T+235 3.016

Sep 14 2020 ChemChina US$200m Sep 22 2050 3.7 100 T+228.6 3.7

Sep 14 2020 Dalian Wanda Group US$200m Mar 21 2023 8.875 99.73 - 9

Sep 14 2020 Logan Group US$100m Sep 17 2024 (Sep 2023) 4.25 100 - 4.25

Sep 15 2020 AVIC International US$300m Sep 23 2030 3.3 98.23 T+283 3.511

Sep 15 2020 China Three Gorges Corp US$500m Sep 22 2025 1.3 99.43 T+115 1.419

Sep 15 2020 China Three Gorges Corp US$500m Sep 22 2030 2.15 99.7 T+150 2.184

Sep 15 2020 Henan Water Conservancy US$500m Sep 18 2025 2.8 100 - 2.8 Investment Group

Sep 15 2020 Times China Holdings US$350m Mar 22 2026 (Sep 2023) 6.2 100 - 6.2

Sep 14 2020 Bank of China blue bond Rmb3bn Sep 21 2022 3.15 100 - 3.15

Sep 14 2020 Bank of China blue bond US$500m Sep 21 2023 0.95 99.69 T+90 1.054

Sep 15 2020 Bangkok Bank US$750m Perpetual (Sep 2025) 5 100 472.9 5

Sep 15 2020 Tongyang Life Insurance US$300m Sep 22 2050 (Sep 2025) 5.25 100 T+498.1 5.25 Sep 14 2020 Kexim €500m Sep 21 2023 0 100.4 MS+35 / B+62.6 -0.118

Sep 14 2020 Kexim US$400m Sep 21 2025 0.75 99.96 T+50 0.758

Sep 14 2020 Kexim US$500m Sep 21 2030 1.25 99.38 T+65 1.316

Sep 15 2020 Hyundai Capital America US$750m Oct 15 2025 1.8 99.81 T+157 1.839

Sep 15 2020 Hyundai Capital America US$650m Oct 15 2027 2.375 99.97 T+192 2.379

Sep 15 2020 Hyundai Capital America US$1.1bn Sep 18 2023 1.25 99.91 T+112 1.282

Sep 16 2020 ICBC US$2.9bn Perpetual (Sep 2025) 3.58 100 T+330 3.58

Sep 17 2020 China Aoyuan Group US$350m Mar 24 2026 (Sep 2023) 6.2 100 - 6.2

Sep 17 2020 Concord New Energy US$83.448m Sep 24 2023 10.75 100 - 10.75 Sep 17 2020 Concord New Energy US$6.552m Sep 24 2023 10.75 100 - 10.75

Sep 17 2020 Hefei Industry Investment US$300m Sep 24 2023 2.95 100 - 2.95

Sep 17 2020 Jining High Tech Urban US$82m incr May 27 2023 5.5 99.99 - 5.5 Construction Investment (US$200m)

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Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+205 area, - >€1.35bn, 120acs Baa2/-/A- Barc / BNPP / BOCI / BofA / CNCBI Asia 14%, Eur 86%. AM 76%, Bks/FI 12%, MS+175 area / CSI / CA-CIB / GS / Haitong Intl / PB/HF 6%, Ins/PF/Other 6%. Natx / UBS 3.125% area, 2.9% - S$1.2bn, 55acs - DBS / UOB Sing 99%, Other 1%. FM/SWF/Public yld Sec 52%, Bks/Corp 28%, PB 20%. 3.7% area - US$1.89bn, 81acs Baa3/-/BBB Barc / BNPP / BOCI / BofA / CNCBI Asia 77%, EMEA 18%, US O/S 5%. FM/ / CSI / CA-CIB / GS / Haitong Intl / AM 72%, Ins/PF 5%, Bks/PB/Other 23%. Natx / UBS T+235 area - US$1.9bn, 75acs Baa2/-/A- Barc / BNPP / BOCI / BofA / CNCBI Asia 72%, EMEA 18%, US O/S 10%. FM/ / CSI / CA-CIB / GS / Haitong Intl / AM 41%, Bks/FI 13%, PF/Sov/Ins 25%, Natx / UBS PB 18% T+275 area - US$3.2bn, 113acs Baa2/-/A- Barc / BNPP / BOCI / BofA / CNCBI Asia 68%, EMEA 25%, US O/S 7%. FM/ / CSI / CA-CIB / GS / Haitong Intl / AM 70%, Ins/PF 13%, Bks/PB/Other Natx / UBS 17%. 4.15% area - US$650m, 50acs Baa2/-/A- Barc / BNPP / BOCI / BofA / CNCBI Asia 76%, EMEA 18%, US O/S 6%. FM/ / CSI / CA-CIB / GS / Haitong Intl / AM 70%, Bks/FI 5%, Ins/PF 10%, PB Natx / UBS 15%. 9.25% area - - - CS / HSBC / Barc / BOCOMI / CNCBI - / Orient 4.25% (the #) - - -/-/BB/BBB- Guotai Junan / BEA / CMBC Cap / - (Lianhe Global) Haitong Intl / CMBCHK / BNPP T+310 area - - -/-/A- BOCI / HSBC / Guotai Junan / - BOCHK / ICBCA / WingLung T+145 area, T+115 - US$1.4bn, 45acs A1/-/A+ BoC / DB / ICBC / JPM / ABChina / APAC 55%, Amers 41%, EMEA 4%. AM (the #) Miz / CCB / StCh / CLSA / BoCom / 42%, Bks 40%, Gov 10%, Ins 4%, PB/ DBS / UBS / MS / SG Other 4%. T+185 area, T+150 - US$1.2bn, 41acs A1/-/A+ BoC / DB / ICBC / JPM / ABChina / Amers 56%, APAC 42%, EMEA 2%. AM (the #) Miz / CCB / StCh / CLSA / BoCom / 42%, Bks 21%, Gov/PF 20%, Ins 16%, DBS / UBS / MS / SG Other 1%. 3.35% area - - A3/-/A+ CICC / Guotai Junan / BoC / SPDB - / CMBI / CNCB HK / Everbright HK / StCh 6.45% area, 6.2% - US$1.3bn, 70acs B1/B+ UBS / CS / DB / CLSA / CISI / Guotai Asia 86%, Eur 14%. FM/AM 70%, PB/ (the #) Junan / Haitong Intl / HSBC / CNCBI Corp 20%, Bks/FI 10% / CMBC Cap / BEA 3.5% area, 3.15% - Rmb4.5bn, 58acs A1/A/A BoC / CA-CIB / BNPP / ABCHK / Citi Asia 96%, US O/S 3%, Europe 1%. Bks/FI (the #) / DBS / KGI / Miz / Scotia 46%, AM 27%, PB 19%, Insur/Other 8% T+130 area, - US$950m, 42acs A1/A/A BoC / CA-CIB / BNPP / Natx / SG / Asia 59%, EMEA 41%. Bks 42%, CB/SWF T+90/+93 ABCHK / CCBI / CICC 18%, FM/AM 17%, Corp 10%, Ins 5%, PB/ Other 8% 5.4% area, 5% - US$1.75bn, 123acs Ba1 MS / Citi / JPM Asia 56%, EMEA 18%, US 26%. AM/FM 72%, Bks 3%, INS 7%, PB 16%, Other 2%. 5.375% area, 5.25% - - Baa3/-/BBB- Nomura / UBS / JPM - MS+60 area, MS+40 - >€3.9bn, 116acs Aa2/AA/AA- BofA / HSBC / JPM / Miz / ING EMEA 89%, Asia 10%, Other 1%. Gov/CB area 41%, AM 42%, Bks 16%, Other 1%. T+95 area - US$1.5bn, 70acs Aa2/AA/AA- BofA / HSBC / JPM / Miz / ING APAC 46%, EMEA 48%, Amers 6%. CB/ OI 47%, AM 33%, Bks 11%, Ins 7%, Other 2%. T+105 area - US$1.5bn, 65acs Aa2/AA/AA- BofA / HSBC / JPM / Miz / ING APAC 46%, EMEA 36%, Amers 18%. Gov/CB 45%, AM 37%, Ins 12%, Bks 4%, Other 2%. T+185 area, T+160 -2 US$3.3bn Baa1/BBB+ BofA / BNPP / JPM / Miz / SG TD - (+/-3) Securities T+220 area, T+195 -1 US$3.3bn Baa1/BBB+ BofA / BNPP / JPM / Miz / SG TD - (+/-3) Securities T+140/+145, T+115 -3 US$3.4bn Baa1/BBB+ BofA / BNPP / JPM / Miz / SG TD - (+/-3) Securities 3.95% area - - Ba1 ICBCI / ICBC Standard / GS / DB / SG - / BofA / CS / StCh / CCBI / Nomura / BOCI 6.50% area, 6.2% - - B2/-/BB- AMTD / Barc / BofA / CNCBI / CICC / - (the #) CMBI / DB / Guotai Junan / Haitong Intl / MS / OCBC / UBS / HSBC 10.25%+ yld - - -/-/BB- UBS / Haitong Intl / Everbright HK - 10.25%+ yld, 10.75% - - -/-/BB- UBS / Haitong Intl / Everbright HK / - area Oriental Patron 3.3% area - US$1.4bn -/-/BBB Guotai Junan / ICBCA / Industrial / Asia 100%. Bks/FI 84%, FM/AM/HF BoC / SPDB / WingLung / CMBCHK 16%. 5.5% (the #) - - - Zhongtai / Guotai Junan / Industrial - / CICC / Ping An HK / CMBC Cap / Nerico

International Financing Review September 19 2020 67

7 IFR Emerging 2351 p63-76.indd 67 18/09/2020 19:06:37 GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 18/9/2020 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Sep 17 2020 Tingyi US$500m Sep 24 2025 1.625 99.47 T+147.5 1.737

Sep 17 2020 CCB Singapore S$500m Sep 25 2023 1.073 100 SOR+75 1.073

Sep 17 2020 CCB New Zealand NZ$150m Sep 25 2023 0.954 100 MS+90 0.954 Sep 17 2020 Beijing Enterprises Holdings €500m Sep 24 2025 1 99.64 MS+150 1.075

EMEA Sep 15 2020 Bulgaria €1.25bn Sep 23 2030 0.375 99.86 MS+60 0.389

Sep 15 2020 Bulgaria €1.25bn Sep 23 2050 1.375 97.57 MS+145 1.476

Sep 15 2020 Qatar National Bank US$600m Sep 22 2025 1.625 99.74 MS+135 / T+141 1.679

Sep 16 2020 Emirates Islamic Bank US$500m Sep 23 2025 1.827 100 MS+150 / T+156 1.827

Sep 16 2020 Gulf International Bank US$500m Sep 23 2025 2.375 99.98 MS+205 / T+210.9 2.38

Sep 17 2020 Vivo Energy Investments US$350m Sep 24 2027 5.125 100 5.125 5.125

Sep 17 2020 IMH/KOKS US$350m Sep 23 2025 5.9 100 T+562.8 5.9

Sep 17 2020 Metinvest US$333m Oct 1 2027 7.65 99.43 T+748.2 7.95

LATAM Sep 14 2020 CEMEX US$1bn Sep 17 2030 (Sep 2025) 5.2 100 - 5.2

Sep 15 2020 BBVA Bancomer US$500m Sep 15 2025 1.875 99.09 T+180 2.067

Sep 15 2020 CAF US$750m Sep 23 2025 1.625 99.74 MS+135 / T+141 1.679

Sep 14 2020 Mexico €750m Sep 18 2027 1.35 98.34 MS+195 / B+225.2 1.603

Sep 16 2020 BRF US$500m Sep 21 2050 5.75 98.25 5.875

Sep 17 2020 COFIDE US$500m Sep 28 2027 2.4 99.885 T+195 2.418 Sep 17 2020 Dominican Republic US$1.8bn Sep 24 2032 4.875 100 - 4.875 Sep 17 2020 Dominican Republic US$1.7bn incr Jan 30 2060 5.875 94.523 - 6.25 (US£3.2bn) Sep 17 2020 Dominican Republic DOP17.5bn incr Jun 5 2026 9.75 98.905 - 10 (DOP68.023bn)

ratio, the tightening from IPG and secondary MALLS INDONESIA RETAIL TRUST for Rp3.5trn becomes a subsidiary. It is also seeking a performance. (US$238m). waiver related to the asset sales. This asset sale was announced as part of It is offering cash of US$3 per US$1,000 in THEûDEVELOPERSûlNANCIALûTRANSFORMATIONû principal amount for holders of the 2025 INDONESIA plan in 2019, along with a rights issue and bonds who give consent to the changes by debt reduction, but regulatory delays have the deadline of September 30. LIPPO SEEKS MALL SALE WAIVERS held up the divestment and reduced the sale Holders of the 2026 bonds who give price from Rp3.7trn initially. The long stop consent will receive US$3 if they agree by LIPPO KARAWACI is seeking to amend terms of date for the sale is now March 31 2021. THEûEARLY BIRDûDEADLINEûOFû3EPTEMBERû ûORû its US dollar notes to be able to sell a LMIRT is expected to fund part of the nothing if they give consent after that date property to a related REIT and help raise the purchase price through a S$280m BUTûBYûTHEûlNALûDEADLINEûOFû/CTOBERû funding for the deal. (US$206m) rights issue, which Lippo will BNP Paribas, CIMB, Credit Suisse, Deutsche The offer applies to the Indonesian underwrite. Lippo might also extend a loan Bank and Nomura are joint solicitation property developer’s US$420m 8.125% bonds to LMIRT. Lippo is the sponsor of the REIT agents. Morrow Sodali is information and due 2025 and US$417m 6.75% bonds due and holds a 32% stake. tabulation agent. 2026, both of which were issued through Lippo is seeking waivers related to Lippo is rated B3/B–/B–, with a negative Theta Capital with a guarantee from Lippo. indebtedness and restricted payments in outlook for the latter two ratings. LMIRT is Lippo is proposing to sell Lippo Mall Puri case it ends up with a majority stake in the rated B1/BB (Moody’s/Fitch), with both INûWESTû*AKARTAûTOû3INGAPORE LISTEDûLIPPO REIT after the rights issue and the latter ratings on review for downgrade.

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Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

T+200 area, T+150 - US$3.3bn, 120acs Baa1/BBB+ Barc / Nomura / CICC / BOCHK / Asia 84%, EMEA 15%, US O/S 1%. FM area (+/- 2.5) SPDB / SMBC Nikko 74%, Bks 17%, Ins/Public Sector 7%, PB 2%. SOR+90 area - - A1 CCBSing / BoC / DBS / ICBC Sing - / UOB / ABC Sing / CICC / CIMB / CLSA / Maybank / OCBC / StCh MS+90/+95 - - A1/-/A ANZ / BNZ / WBC / CBA - MS+190 area - €1.6bn, 49acs Baa1/BBB+ ANZ / Natx / ICBCA / HSBC / ABCHK Asia 82%, EMEA 18%/Bks/FI 68%, FM / BOCHK / BoCom / CCBI / CNCBI / 16%, Ins/PF 9%, Corp 5%, PB 2% CICC / DBS / ICBCI

MS+95 area, MS+75 -9 ~€3.9bn Baa2/BBB/BBB BNPP / Citi / JPM / Uni - area MS+175/+180, 1 >€3.6bn Baa2/BBB/BBB BNPP / Citi / JPM / Uni - MS+160 area MS+160 area, - >US$1.4bn, >98acs Aa3/A/A+ Barc / ING / CA-CIB / HSBC / QNB Eur 72%, US O/S 14%, Asia 12%, ME 2%. MS+140 area / StCh FM 75%, Bks/PB 17%, CB/OI 5%, Ins/PF 2%, Other 1%. MS+170 area, - >US$1.1bn -/-/A+ Citi / DIB / ENBD / HSBC / ICDPS / - MS+155 area StCh Bank ABC MS+230 area, - US$1.35bn Baa1/-/BBB+ GIB / 1ADB / HSBC / StCh - MS+210/+215 5.375%a - US$850m Baa3/BB+/BB+ JPM / SG 5.25%a (+/-0.125%) Low/mid 6s, 6.125% - US$650m B2/-/B Citi / RenCap / Alfa / Gaz / Sber / - area VTB 8.5% area, 8.25% - US$1.6bn B2/B/BB- DB / Natx / BcaIMI / RBI - area, 8% (+/-5), 7.95%

5.625% area, - - -/BB/BB- JPM / BofA / BNPP HSBC / ING / - 5.375% (+/- 12.5), Intesa SanPaolo / Santander 5.20% ( the #) T+220 area, T+185 -5 US$2.7bn Baa1/BBB/BBB BBVA / BNPP / BofA / MS - (+/- 5) MS+135 area - >US$1.05bn Aa3/A+/A+ Citi / Daiwa / GS / Nomura EMEA 48%, Amers 31%, Asia 21%. AM 52%, CB/OI 18%, Bks 15%, Ins/PF 13%, HF 2%. MS+235 area, - - Baa1/BBB/BBB- BNPP / CA-CIB / MS / Natx - MS+215 area Mid 6s, 6% (+/- - - Ba2/-/BB BB / BBrad / BTG / Citi / Itau / JPM / - 0.125%) MS / Santander T+225bp area - - BBB/BBB HSBC/JPM - 5% area, 4.875% - c.US$9.6bn combined Ba3/BB-/BB- Citi/JPM - Mid 6% area, 6.25% - c.US$9.6bn combined Ba3/BB-/BB- Citi/JPM -

10% area - c.US$9.6bn combined Ba3/BB-/BB- Citi/JPM -

yield 5.25%, inside initial guidance of 5.375% the leads needed to estimate fair value for SOUTH KOREA area. the Tongyang Life deal by adding an The success of the offering provides additional 60bp. TONGYANG HYBRID ENDS LONG WAIT another option for South Korean insurers That implied a new issue premium of seeking to diversify their investor bases, BPnBP ûINûPARTûREmECTINGûAûWEAKERû TONGYANG LIFE INSURANCE reopened the especially as the industry prepares for new market when it was priced last Tuesday, offshore bond market for South Korean reporting rules that could encourage more according to the lead manager. insurers last week with a US$300m offering capital raising. “The pricing was not bad, although it was OFû YEARûPERPETUALûNON CALLûlVEû “There are other insurers that have kept not great either because the timing could subordinated notes. close tabs on Tongyang’s new issue, so the have been better as markets were weaker The Baa1/BBB+ rated issuer overcame a deal this time would allow them to seriously yesterday [Tuesday],” he said. SELL OFFûINûTHEû!SIANûINVESTMENT GRADEû consider printing offshore notes,” a lead !ûBANKERûAWAYûFROMûTHEûDEALûSAIDûAûSELL OFFû market, as well as investor concerns over its banker on the deal said. INûTHEû#HINESEûINVESTMENT GRADEûMARKETû ownership structure and the outlook for the Key comparables for the new issue caused some deals the same day to be barely INSURANCEûSECTOR ûTOûPRINTûTHEûlRSTûOFFSHOREû include Heungkuk Life Insurance’s hybrid, covered. bonds from a South Korean insurer since rated, like Tongyang’s new issue, at BBB–. 4ONGYANGSûPRINTûWAS ûMEANWHILE ûTHREE 2018. The notes were bid at a yield of about 4.5%. TIMESûSUBSCRIBED ûRECEIVINGûlNALûORDERSûOFû The deal – also the company’s own debut However, because Heungkuk Life’s notes more than US$900m from 70 accounts. The outside the country – was priced at par to have a call date in 2022, rather than 2025, majority of it went to Asian asset managers.

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7 IFR Emerging 2351 p63-76.indd 69 18/09/2020 19:06:37 ICBC falls short on AT1 return BANK CAPITAL Aggressive approach and heavy supply contribute to weak response

INDUSTRIAL AND COMMERCIAL BANK OF CHINA “Although the gap has existed for a long time, ICBC’s AT1s will reset to an initial spread of raised US$2.9bn from a well-flagged offering it has further widened. I think the problem is the five-year Treasuries plus 330bp if not called on of offshore Additional Tier 1 preference shares, pricing. It is not particular to ICBC, but across the first call date, while the initial reset spread falling short of its Rmb30bn-equivalent the China banking sector.” for BOC’s AT1s was 244.9bp. (US$4.4bn) approved quota after a weak The new ICBC AT1s opened half a point lower response in a crowded market. WEAK BOOKBUILD last Thursday morning then stabilised at a cash The Reg S non-cumulative perpetual non-call One day earlier, Baa1/BBB+/BBB rated BANGKOK price of around 99.50/99.75. five securities priced last Wednesday at par, to BANK priced a US$750m AT1 offering at 5%, yield 3.58%, inside initial guidance of the 3.95% which is also rated Ba1 by Moody’s. In August, STRUCTURAL TWEAKS area. The 3.58% coupon is the lowest on record new AT1s from European banks like UBS, Credit The bonds also come with different loss- for an offshore AT1 from any PRC-incorporated Suisse and Barclays paid yields ranging from absorption language, without a hard trigger that bank. 5.125% to 6.125%. has featured on previous Chinese offshore AT1s. The Hong Kong and Shanghai-listed bank is “At a mid-3% handle, the yield is very low Until now, all offshore Chinese AT1s will rated A1/A (Moody’s/S&P) and the AT1s have an for market investors,” said the second person, convert to H-shares, in whole or in part, if their expected Ba1 rating from Moody’s. explaining why Chinese banks’ AT1 deals rely Common Equity Tier 1 capital ratios fall to No book details were released, but it is heavily on Chinese anchors. Even for the Big 5.125% or below, or if the China Banking and understood that a large portion of the orders Four banks, anchor orders may account for 70%- Insurance Regulatory Commission determines came from anchor investors, mainly Chinese 80%, he said. that the bank is unviable without a writedown corporates and fund management houses. Singapore’s DBS set the record for the world’s or bailout. ICBC had made very clear that its key lowest coupon for a US dollar AT1 offering in ICBC’s offshore preference shares are the perfomance indicators for the deal were a February, paying 3.3%. first to omit the 5.125% trigger after Chinese bigger issue size and lower coupon than Bank A fund manager said she passed on the ICBC regulators revised the rules late last year. of China’s US$2.82bn 3.6% offshore preference deal. Instead, all or some of the offshore preference shares issued in February, according to a person “With weak bookbuilding you would think shares will convert into H shares at an initial familiar with the situation. they would price cheaper, but they are greedy,” compulsory conversion price of HK$5.73 per “It is not a terrible result. Of course it is not she said. share if the CBIRC orders it. a blowout, but at least it has achieved its KPIs,” However, ICBC’s AT1 deal priced wider than the ICBC previously issued offshore preference the person said. fair value estimates by CreditSights and Mizuho, shares denominated in US dollars, euros and Another person familiar with the situation which both put it at around 3.4%, using BOC’s 3.6% offshore renminbi in the international market in said the lacklustre demand from the market was AT1s issued in February as the closest comparable. December 2014. mainly due to the heavy primary supply recently BOC’s AT1s were bid at 3.52% ahead of the release The bank is likely to launch offshore AT1s in and the widening yield gap between AT1s from of initial guidance for ICBC’s new issue. the form of perpetual bonds by the end of this Chinese and global banks. Mizuho said ICBC’s new AT1s should trade year or early next year, market sources told IFR “There was low transparency of the book at least 10bp inside BOC’s AT1s due to its earlier. It has received shareholder approval to colour. But the deal did get some market orders, significantly higher initial reset spread, which issue up to Rmb40bn-equivalent of undated AT1 despite the low yield compared with global makes it more likely that the issuer will redeem capital bonds in the offshore market. banks’ AT1s,” said the second person said. the securities after five years. Carol Chan

“There haven’t been any Korean insurers new deal, according to the banker on the than it could have achieved in the onshore to print offshore bonds since 2018 and it was deal. market to cope with the new rules, OURûlRST TIMEûISSUE ûSOûWEûWANTûTOûEMPHASISEû South Korea is preparing to adopt the ACCORDINGûTOûTHEûOFlCIAL the fact that the deal went through,” said a +OREAN )NSURANCEû#APITALû3TANDARD ûORû+ )#3 û 4ONGYANGû,IFEû)NSURANCEûOFlCIAL WHICHûREQUIRESûINSURERSûTOûREPORTûASSETSûASû ANBANG SHADOW The bookrunners on the new Reg S deal, WELLûASûLIABILITIESûONûAûMARK TO MARKETûBASISû Investors also expressed some concerns over JP Morgan, Nomura and UBS, were mandated rather than book value, resulting in a larger the stability of the issuer’s ownership two years ago, before a failed attempt from amount of recorded liabilities. structure, the banker on the deal said. Hanwha General Insurance in September The implementation of the new standards 4ONGYANGû,IFEûWASûACQUIREDûBYû!NBANGû 2018 closed the market. The last insurer was planned for 2021, but it has been Insurance Group in 2015, as part of the from South Korea to sell offshore bonds was delayed twice and is now set for 2023. #HINESEûINSURERSûOVERSEASûACQUISITIONûSPREE û +$"û,IFE ûWHICHûPRINTEDûAû53Mû “Capital needs among Korean insurance ANDûISûNOWûOWNEDûBYû$AJIAû)NSURANCEû'ROUP û PERPETUALûNON CALLûlVEûISSUEûATûûTHATû companies will continue to grow with the the entity created to take over Anbang’s May. new rules so the government should lay out assets after its fall from grace. According to A pricing mismatch between issuers and AûPRECISEûROADMAPûFORûINSURERSûTOûPRE Moody’s, Tongyang could eventually be sold investors in 2018 as well as regulatory emptively respond to it,” said a researcher in to a third party. UNCERTAINTIESûOVERûLOSS ABSORPTIONûRULESû South Korea. The China Banking and Insurance explained the lull in supply from South Tongyang’s debut dollar bond was also Regulatory Commission (CBIRC) took over Korean insurers, and regulatory concerns driven by the insurer’s desire to have a Anbang in 2018 as part of a wider campaign were again a sticking point for Tongyang’s broader investor base and a bigger issue size TOûREDUCEûlNANCIALûRISKûTHATûALSOûSAWûITSû

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CHAIRMANûIMPRISONEDûFORûlNANCIALûCRIMESû bond priced at a negative yield with a 0% from a smaller bank and has traded down 4HEû#")2#ûENDEDûITSûTWO YEARûSUPERVISIONûOFû coupon. since it was issued in November. TMB Bank’s Anbang in February. “We were aware that there is a sense of 53Mû!4ûCALLABLEûINû$ECEMBERûûISû /WNERSHIPûUNCERTAINTY ûHOWEVER ûWASûNOTû resistance over negative yields among European RATEDû"AûANDûWASûQUOTEDûAROUNDûûATû the ultimate dealbreaker for potential INVESTORSûAGAINSTûNON %UROPEANûISSUERS ûBUTûTHATû the start of bookbuilding on Tuesday. Tongyang investors. hurdle seems to have been overcome for Korean 4-"SûBONDSûAREû2EGû3 ONLYûANDûTHEûSMALLû “Investors who didn’t buy the deal were BORROWERS vûSAIDûAû+EXIMûOFlCIAL SIZEûMEANSûTHEYûAREûINFREQUENTLYûTRADED û more concerned about the overall health of The euro note priced at 100.355 to yield making them less useful as a pricing the insurance sector due to a low rate MINUSû ûORûMID SWAPSûPLUSûBP û REFERENCEûTHANûMOREûLIQUIDû!4Sû/NûTOPûOFû environment,” the banker said. inside initial guidance of plus 60bp area. that, TMB has a big consumer lending and The new capital securities have expected 4HEûlVE YEARû53ûDOLLARûPORTIONûWITHûAû CARûlNANCINGûBOOK ûWHILEû"ANGKOKû"ANKûHASû ratings of Baa3/BBB–. coupon of 0.75% priced at 99.961 to yield a more defensive loan book driven mainly 4HEûCOUPONûWILLûBEûRESETûEVERYûlVEûYEARSû 0.758%, or Treasuries plus 50bp, inside by corporate lending. from 2025 to the prevailing US Treasury plus initial guidance of plus 95bp area. The 1.25% /FFSHOREû!4SûFROMûBANKSûINû3INGAPOREû the initial spread. The deal includes a 100bp YEARûTRANCHEûPRICEDûATûûTOûYIELDû and China trade very tightly, at yields of STEP UPûFROMûYEARû ûAûDIVIDENDûSTOPPERû 1.316%, or Treasuries plus 65bp, also inside MID TO HIGHû ûSOûTHEûLEADSûFORûTHISûDEALûALSOû as well as a pusher. initial guidance of plus 105bp area. The yield looked at recent issues from global banks !SIA 0ACIlCûTOOKûûOFûTHEûTRANSACTIONû FORûTHEû YEARûBONDûISûTHEûPOLICYûBANKSû like Standard Chartered, UBS, Credit Suisse and the rest went to EMEA. Asset managers lowest since 2008. ANDû(3"# ûYIELDINGûMID TO HIGHûû and fund managers bought 66%, private Kexim’s outstanding 2025s were seen at a Bonds from other banks implied that Tier 1 BANKSûûANDûBANKS ûlNANCIALûINSTITUTIONSû bid spread of 62bp over Treasuries, bonds ought to pay 150bp–175bp more than and insurers 11%. according to an investor note. Tier 2 bonds, and Bangkok Bank’s US$1.2bn Moody’s evaluates Tongyang Life’s $ESPITEûTHEûTIGHTûPRICING ûlNALûORDERSû 2034 Tier 2 notes were trading around 3.80%. CAPITALISATIONûASûSOLIDûWITHûITSûLOCALûRISK came in at over US$7.6bn, with Leads estimated fair value for the new based capital ratio at 204.4% as of the end of governments and central banks taking more issue at high 4%, while investor feedback March. than 40% of all three tranches. VARIEDûFROMûûTOûMID 4HEûRISK BASEDûCAPITALûRATIOûOFû3OUTHû Kexim expects its new issue to help The US$2.9bn offering from Industrial and Korean insurance companies stood at 267.2% sustain the momentum of deals with low Commercial Bank of China on Wednesday gave at the end of March, according to the foreign currency funding costs after the Bangkok Bank an incentive to come to market country’s Financial Supervisory Service. The +OREANûGOVERNMENTûPRINTEDûAûDUAL CURRENCYû lRST ûBUTûALSOûMADEûITSûYIELDûLOOKûMOREû local insurance law stipulates that insurers transaction the previous week. That offering attractive compared to the ones on offer from should maintain a RBC ratio of over 100%. ALSOûCONSISTEDûOFûAûEURO DENOMINATEDû Chinese AT1s. ICBC’s AT1 bonds are also rated portion with a negative yield and a US dollar Ba1, but priced at par to yield 3.58%. KEXIM CONFIRMS LOWER BENCHMARK note that priced inside its curve. h4HEûANTICIPATEDûPICK UPûINû!4ûISSUANCEû The policy bank plans to use the proceeds was absolutely a factor to get in this week EXPORT-IMPORT BANK OF KOREA has raised of the new bonds to support small and AHEADûOFûMOREû!4ûSUPPLYûANDûTHEû&/-#û 53BN EQUIVALENTûFROMûAûDUAL CURRENCYû MEDIUM SIZEDûCOMPANIESûTHATûTOOKûAûHITû meeting,” said a bookrunner. THREE TRANCHEûBONDûTHATûCAPITALISEDûONûNEWû from the coronavirus outbreak as well as the That was probably the right move, as the benchmarks set by the South Korean GOVERNMENTSû.EWû$EALûINITIATIVEûTHATû US Federal Reserve statement on government. focuses on digital and green sectors. 7EDNESDAYûSAIDûTHATûITûWOULDûALLOWûINmATIONû 4HEû3%# REGISTEREDûDEALûCONSISTEDûOFûAû The senior unsecured notes have expected to overshoot its 2% target before raising 53MûlVE YEARûNOTE ûAû53Mû YEARû ratings of Aa2/AA/AA–, in line with the rates, which most policy makers projected PORTIONûANDûAûõMûTHREE YEARû#OVID û issuer. would not happen until 2023. The weak response social bond. The US dollar tranches Bank of America, HSBC, ING, JP Morgan and outlook for the US economy caused stocks to priced inside the policy bank’s curve by Mizuho Securities were bookrunners. sell off and dampened risk appetite. AROUNDûBP ûWHILEûTHEûEURO DENOMINATEDû Bangkok Bank was able to complete its deal before that, and drew on strong US ALL INTL EMERGING MARKETS BONDS THAILAND demand. Another lead said that the deal had BOOKRUNNERS: 1/1/2020 TO DATE attracted some investors who had never BANGKOK BANK AT1 STANDS OUT Europe/Africa bought Asian AT1s before. Managing No of Total Share The bonds opened higher at a cash price bank or group issues US$(m) (%) BANGKOK BANK added to the growing wave of of 100.25 and traded up to 100.70. Private !SIANûBANKûCAPITALûISSUANCEûWITHûTHEûlRSTû BANKSûANDûFAMILYûOFlCESûINû3OUTH %ASTû!SIAû 1 JP Morgan 40 13,995.50 16.1 "ASELû)))û!DDITIONALû4IERûûDEALûFROMû3OUTH and Hong Kong, which were scaled back in 2 Citigroup 28 11,444.97 13.2 East Asia to be marketed to US investors. the offering, were among those seen 3 BNP Paribas 23 8,530.10 9.8 4 Deutsche Bank 11 4,833.61 5.6 The bank, through its Hong Kong branch, topping up in the secondary market. 5 SG 15 4,780.50 5.5 ONû4UESDAYûSOLDû53MûPERPETUALûNON /RDERSûWEREûMOREûTHANû53BNûFROMû 6 UniCredit 11 4,045.17 4.7 CALLûlVEû!4ûSECURITIESûATûPARûTOûYIELDû û 123 accounts, with Asia taking 56%, EMEA 7 HSBC 14 3,984.54 4.6 inside initial guidance of 5.40% area. 18% and the US 26%. 8 Barclays 12 3,781.99 4.4 Bangkok Bank, Thailand’s largest by The bonds will be written down if the 9 ING 9 3,218.82 3.7 deposits, is rated Baa1/BBB+/BBB, while the BANKSûCOMMONûEQUITYû4IERûûRATIOûFALLSû 10 Erste Group 6 2,982.31 3.4 144A/Reg S subordinated securities have an below 5.15% or if the Bank of Thailand Total 82 86,942.47 expected rating of Ba1 by Moody’s. DEEMSûTHEûBANKûTOûBEûNON VIABLEû"ANGKOKû

Excluding equity-related debt. 7HILEûTHISûWASûNOTûTHEûlRSTû"ASELû)))û!4û Bank’s CET1 ratio was 13.96% at the end of Source: Refinitiv SDC code: L2 issue out of Thailand, the previous deal was *UNE ûWELLûABOVEûTHEûMINIMUMûREQUIREMENT

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/NûTHEûBANKINGûSIDE û&ITCHûSAIDûONû and 7.75% April 2023s, with an additional Thursday that it was withdrawing its consent solicitation to allow for the early EUROPE/AFRICA expected BB+ rating for SOVCOMBANK@SûTHREE redemption of the 2021s. year Eurorouble offering, given it no longer The early tender deadline is September 28. expects the sale to happen. h2EDUCEDûRElNANCINGûRISKûMIGHTûPUSHûTHEû RUSSIA The bank (Ba2/BB/BB+) had appointed spread over the sovereign curve below the Citigroup, HSBC (social structuring adviser), current 100bp [level],” said Sivach. IMH TAKES CARE OF SHORT-DATED BOND ING and Sovcombank as global coordinators “After the successful placement, investors for the social bond that was be used to HAVEûEVENûMOREûCONlDENCEûINûTHEûCOMPANYû Industrial Metallurgical Holding, acting via lNANCEûTHEûLOANûPORTFOLIOûFORûITSû(ALVAû and its ability to tap the market when 0*3#û+/+3 ûADDRESSEDûANûUPCOMINGû payment instalment card. The coordinators needed. With interest rates at zero or lower, maturity by raising US$350m in the bond were to have been joined on the books by ITSûHARDûTOûlNDûAûDECENTûCREDITûSTORYûTHATû market on Thursday, combining the new Gazprombank, Sberbank CIB and VTB Capital. pays almost 8%.” lVE YEARûDEALûWITHûAûTENDERûOFFERûANDû Bankers not involved said interest in the MetInvest was last in the market in consent solicitation. transaction had been dampened by the /CTOBERûWITHûAûDUAL CURRENCYûTRADE ûITSûlRSTû The company, an exporter of merchant performance of the rouble. BONDûDEALûSINCEûRElNANCINGûMOREûTHANû pig iron and producer of merchant coke, 4HEûROUBLEûWASûQUOTEDûATûûVERSUSûTHEû53û US$2bn of debt in 2018, which marked the sold the September 2025 notes at 5.9%, dollar on Friday, roughly unchanged from conclusion of almost four years’ work with inside IPTs in the low to mid 6s. the beginning of the week. its creditors. “It was a busy day in the market with Fears that the West may impose new Deutsche Bank and Natixis were global people juggling deals but we had a very sanctions on Russia in relation to its possible coordinators, joined as lead managers and GOODûBOOKBUILD vûSAIDû$MITRYû'LADKOV û meddling in the political crisis in bookrunners by IMI–Intesa Sanpaolo and global head of investment banking at neighbouring Belarus and the suspected Raiffeisen Bank International. Renaissance Capital, which was one of poisoning of Kremlin critic Alexei Navalny, the global coordinators alongside which Russia has denied, have been keeping Citigroup. pressure on the currency. REGIONAL The banks were joined as bookrunners by h7HATû)ûWOULDûDOûISûTRYûTOûmIPûFROMû Alfa Bank, Gazprombank, Sberbank CIB and VTB roubles into dollars,” said one banker away. AFC MANDATES FOR DEBUT GREEN Capital. “The work has been done. They still want to SWISSIE “It was the lowest coupon for a Single B promote their Halva project but clearly it issuer out of the CIS, so it was a very was the wrong time to market roubles.” AFRICA FINANCE CORPORATION mandated Credit impressive result on that front with the price Suisse and Renaissance Capital to arrange a compression,” said Gladkov. The company is series of investor calls from last Wednesday. rated B2 by Moody’s and B by Fitch. UKRAINE A debut Swiss franc green bond may The pricing landed a touch inside the FOLLOWû0ROCEEDSûWILLûBEûUSEDûTOûlNANCEû 6% achieved by compatriot Borets (Ba3/ METINVEST SERVES UP TEMPTING YIELD projects established within AFC’s Green ""n""n ûFORûITSûSIX YEARûNOTEûONû Bond Framework. The alignment with the September 10. Ukraine’s METINVESTûSECUREDûAûlVEûTIMESû ICMA Green Bond Principles has been “IMH went very well, even after the SUBSCRIBEDûDEALûONû4HURSDAYûANDûSQUEEZEDû CONlRMEDûBYû)33ûINûITSûSECONDûPARTYûOPINIONû price tightening it was still a high number out a bit of extra size with a US$333m “There’s been a lot of interest, with for investors to jump on,” said a banker /CTOBERûûNOTEû bookbuilding set for Monday and Tuesday. away. The steelmaker was able to cut pricing by 4HEYûHAVEûAûDIVERSIlEDûINVESTORûBASEûACROSSû Russian buyers were allocated just over 55bp for a launch at 7.95%, after initially GEOGRAPHIESûANDûALSOûAûDIVERSIlEDûFUNDINGû 40%. Books for the trade were over PUTTINGûOUTûEYE CATCHINGû)04SûOFûûAREAû STRUCTUREûACROSSûCURRENCIESû)TSûNOTûTHEIRûlRSTû US$650m, including lead interest. for an expected US$300m deal. 3WISSIE ûBUTûITûISûTHEIRûlRSTû3WISSIEûGREENû The company offered to buy back any and h)TûSTARTEDûQUITEûWIDEûTOûGETûMOREûINVESTORû bond,” said a banker familiar with the matter. all of its 7.5% 2022s for cash, and was interest, then got some good compression,” !&#ûISûAûMULTILATERALûDEVELOPMENTûlNANCEû seeking consent for the mandatory early said a banker away. “It’s a good result for the institution dedicated to sustainable redemption of the notes. ISSUER ûBUTûALSOûAûGOODûYIELDûPICK UPûFORû INFRASTRUCTUREûlNANCINGûINû!FRICAû)TûISûRATEDû By the time of the early participation international investors.” A3 (negative) by Moody’s. deadline, holders of around 91% of the notes MetInvest has 8.50% April 2026s that were had tendered their bonds or given their QUOTEDûATûûWHENûTHEûMANDATEûWASû consent for the early redemption. announced on Tuesday, according to Tradeweb. “The company has been expanding its Investors put in around US$1.6bn of orders. business, results have been strong, it’s been “Just look at the book for MetInvest,” said MIDDLE EAST deleveraging and there has been a ratings a second banker away. “Anything with an upgrade,” said Gladkov. eight handle is clearly attracting interest.” “The 2017 investors have been very Vitaliy Sivach, trader at asset manager BAHRAIN happy with their bonds and we felt it was )#5 ûSAIDû-ET)NVESTû"""" ûHADûPAIDûAû THEûRIGHTûOPPORTUNITYûTOûRElNANCEûWHATû SMALLûPREMIUMûOFûBP BPûFORûTHEûNEWû GIB FINDS A WAY BACK IN WASûBECOMINGûAûSHORT DATEDûNOTEû7EûHADû issue, with many investors liking the credit some new investors in the name but it was story and looking to roll exposure into the GULF INTERNATIONAL BANK sold a US$500m also heavily popular with investors new bond. September 2025 bond on Wednesday 25bp tendering the bonds coming into the new The company is conducting a capped inside initial price thoughts, returning to a deal.” TENDERûOFFERûFORûITSûû$ECEMBERûSû market it had shied away from in 2018.

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African yields draw the crowds AFRICA Commodity-based issuers offer juicy yields

African-related credits were able to dangle key questions on the road about the ability to company headroom during the uncertainty enticing yields in front of investors last week, upstream cash, although with Vivo’s clean record caused by the coronavirus. with VIVO ENERGY and FIRST QUANTUM MINERALS investors got reassured on that point,” said the The net-debt-to-Ebitda ratio was increased both securing positive results. lead. from 4.75x to 5x for the third and fourth quarters Vivo completed a journey it started in 2018 as “In the order book we had an extremely high of 2020, reducing to 4.75x in the first and it made its bond market debut on Thursday with hit ratio from the virtual roadshow meeting. second quarters of 2021 and to 4.5x in the third a US$350m seven-year non-call three note at Every single investor who met these guys on the and fourth quarters. 5.125%. road was convinced by the credit story.” “It’s very much a US high-yield name for The company (Baa3/BB+/BB+), which is a The notes will take out short-term bank debt historical reasons, such as the listing in Canada, distributor and retailer of Shell and Engen- due in 2022 with longer-term bond financing. and they’ve executed a lot of deals in US high- branded fuels and lubricants in Africa, began The lead said the book was there to take a larger yield style,” said the lead. marketing the bonds at the 5.375% area. amount, with a potential full refinancing of “In the last two trades, though, there has One investor reckoned pricing looked tight, outstanding debt and a revolving credit facility been an increase in EM dedicated funds. By and while a banker away thought that 5.5% might totalling around US$400m–$425m. large it’s been an Africa play but as operations have been the point where some accounts would “We could have very easily allocated more in Panama get up and running, it will in effect have drawn a line. than US$350m and not create new debt, but the become a Latam credit, or more balanced at But a lead said that the pricing strategy had issuer is price sensitive and decided to remain least.” been based on five days of marketing. disciplined,” the lead said. Zambia is the primary source of FQM’s “It’s a crossover credit and a consumer Vivo pulled its debut in June 2018, being one cashflows, but the link between the company business,” said the lead. of a number of issuers to shy away from the and country should weaken as FQM’s “Lower rated Double B telecoms – Millicom market during a bout of volatility. geographical diversification improves. or MTN – trade in the mid-high 4s. On relative Global mining company FIRST QUANTUM The diversification will be principally driven value it looks attractive versus sector comps in MINERALS was also in the market on Thursday, by the ramp-up of FQM’s flagship US$6.7bn Latin America like Ultrapar or Cosan. People selling an upsized US$1.5bn seven-year non-call greenfield project Cobre Panama. have also been referencing higher-rated Raizen.” three at 6.875%. Fitch says that FQM derived over 70% of Some investors liked the value on offer. The offering was increased from the initial earnings from its operations in Zambia in 2019, “It’s quite cheap considering it still has one target of US$1bn, and came comfortably inside but Panama’s contribution will rise towards 60% investment-grade rating,” said Olga Budovnits, a IPTs in the low 7s. in 2023 when Cobre Panama’s full capacity is portfolio manager at Main Partners. “FQM proved that anything with a high yield reached. “The biggest issue with the company is gets interest at the moment,” said a lead. “FQM is coming to the market at an potential hardcore lockdowns in their markets “We saw the 2026s at 6.5%, so if you take into opportune time, with copper prices rallying over which would substantially reduce the usage account the curve extension then it’s a 20bp–25bp 45% from the March bottom, now trading at of fuel in the country and interrupt revenue NIP for a Triple C rated credit, it’s pretty impressive.” US$3.07/lb, and with Cobre Panama reaching streams. But the company managed to go FQM’s new notes are rated CCC+ by S&P and full production in August after shutting down though spring lockdowns in pretty decent form. B– by Fitch. earlier this year on Covid-19 issues,” wrote And with a lack of other infrastructure, cars and The amount raised means FQM, which is CreditSights analysts. thus fuel is the lifeblood of the economy.” listed on the Toronto Stock Exchange, can both “We are constructive on the FQM credit story Vivo operates in 15 countries under the Shell repay US$575m of its revolving credit facility and given our positive long-term view on copper brand and eight countries under the Engen redeem its US$425m 2022s in full. fundamentals and the ramp-up of the Cobre name. The company amended the financial Panama project which should allow for balance “There’s no denial it’s a complex story covenants on its US$2.7bn term loan and sheet deleveraging.” operating in 23 African countries. We had revolving credit facility in April to give the Robert Hogg

GIB (Baa1/–/BBB+), which is 97.2% The bank is rated Baa1 by Moody’s “A lot of Middle East issuers are ready to indirectly owned by the government of Saudi NEGATIVE ûANDû""" ûBYû&ITCHûSTABLE û/Nû go, although a lot of names have gone Arabia through the Public Investment Fund, September 8, Fitch downgraded the bank’s already,” said a second banker, adding that placed the new notes at swaps plus 205bp. viability rating to bb+ from bbb– and sovereigns such as Saudi Arabia, Kuwait and A banker familiar with the matter said the removed it from rating watch negative. /MANûCOULDûALSOûBEûEXPECTEDûTOûAPPEARûINû lNALûNEW ISSUEûPREMIUMûWASûDIFlCULTûTOû The ratings action followed the the coming weeks. gauge precisely, but saw it between zero and downgrade of Bahrain’s sovereign rating to h$EMANDûHASûBEENûSOûSTRONGûTHATûDEALSû 10bp. B+ from BB– on August 14. have printed inside fair value. Many names GIB was last in the market in January GIB Capital was a coordinator and was are inside levels where they were in January. 2017, according to IFR data, having joined as a lead manager and bookrunner by Investors who bought in the last two weeks POSTPONEDûAûDEALûINû/CTOBERû ûSAYINGûITû First Abu Dhabi Bank, HSBC and Standard are probably a bit miffed that those things would seek other funding opportunities at Chartered. are trading down now in secondary.” more favourable levels. The pipeline for Middle East banks A trade from Emirates Islamic Bank on Books at launch, excluding lead manager remains busy, although bankers say that in Wednesday fell over half a point in the interest, were around US$1.35bn. MOSTûLIKELIHOODûTHEûmOWûWONTûBEûHECTIC aftermarket, according to Tradeweb, while

International Financing Review September 19 2020 73

7 IFR Emerging 2351 p63-76.indd 73 18/09/2020 19:06:37 THEûlVE YEARûNOTEûFROMû1ATARSû!HLIû"ANKû said, coming three years after National Bank Investors from MENA and Asia took the bulk placed in early September is bid at 98.78, OFû!BUû$HABI ûNOWû&IRSTû!BUû$HABIû"ANK û of the allocations, collecting 41% and 28% of compared to the reoffer price of 99.507. placed the inaugural transaction. the notes, respectively. The ESG market, though, is becoming an “A lot of these bank trades out of the area of interest for EM issuers as investors Middle East are starting to look very QATAR seek out assets. similar,” said the banker. “There’s a bit of The previous week saw Saudi Electricity fatigue building up, and they aren’t all doing QNB ADDS GREEN TWIST TO QATARI BECOMEûTHEûlRSTûISSUERûOFûGREENûSUKUKûORû great in secondary.” FLURRY conventional bonds from the kingdom; The notes were priced at par, but on (UNGARYûBECAMEûTHEûlRSTûSOVEREIGNûTOûSELLû Thursday they had slipped more than half a QATAR NATIONAL BANK kept up the streak of green Samurai bonds; Brazilian pulp and point to 99.49, according to Tradeweb successful issues from banks out of the Gulf PAPERûPRODUCERû3UZANOûSOLDûTHEûlRSTû prices. state on Tuesday, although with an added SUSTAINABILITY LINKEDûBONDSûFROMûANû )Nû-AYû&ITCHûAFlRMEDûITSû! ûRATINGûANDû green twist for its US$600m September 2025 emerging markets issuer; and Chinese gas stable outlook, saying that “EI is a key and offering. distributor ENN Energy Holdings sold its integral subsidiary of its 99.9% shareholder”, û1."SûTRADEûWASûTHEûFOURTHû1ATARIûCABûOFFû lRSTûGREENûBONDS WHICHûISû%MIRATESû."$ THEûRANKûSINCEûLATEû!UGUST ûFOLLOWINGûlVE 4HEûPROCEEDSûWILLûBEûALLOCATEDûBYû1."ûTOû Bank ABC, Citigroup, Dubai Islamic Bank, year bonds from Masraf Al Rayan, Ahli Bank eligible green loans as set out in the Emirates NBD Capital, HSBC,The Islamic and Commercial Bank. company’s green, social and sustainability Corporation for the Development of the Private )TûDID ûHOWEVER ûSTRIKEûAûUNIQUEûPOINTûASû bond framework. Sector and Standard Chartered were lead THEûlRSTûINTERNATIONALûGREENûBONDûFROMû Barclays was global coordinator and ING managers and bookrunners. 1ATARû was sustainability structuring adviser. 1."û!A!! ûCOMFORTABLYûACHIEVEDûTHEû The two banks were joined as lead tightest spread of the four issuers, coming managers by Credit Agricole, HSBC, QNB Capital 30bp inside the 165bp level reached by Ahli and Standard Chartered. Bank (A2/A) with its US$500m September AMERICAS ûBONDû1."SûlNALûSPREADûOFûSWAPSûPLUSû 135bp was 25bp inside IPTs. UAE 1."ûHASû-AYûS ûWHICHûWEREûBIDûATû DOMINICAN REPUBLIC 140bp around the time of the trade, EMIRATES ISLAMIC BANK BREAKS ACCORDINGûTOû2ElNITIV ûINDICATINGûTHEûGREENû ABSENCE SOVEREIGN BRINGS JUMBO bond landed inside its conventional curve. BOND DEAL The books at reoffer were more than EMIRATES ISLAMIC BANKûBROKEûAûFOUR YEARû US$1.4bn, having at one stage passed drought of international issuance on THE DOMINICAN REPUBLIC raised US$3.8bn US$1.8bn. 7EDNESDAYûWITHû53MûlVE YEARûSUKUKû EQUIVALENTûLASTû4HURSDAYûTHROUGHûITSûlRSTû The typical EM investor base took part in that came 20bp inside IPTs. BONDûSINCEûTHEûOUTBREAKûOFûTHEû#OVID û Aû1."ûTRADE ûACCORDINGûTOûAûBANKER ûWITHû 4HEûBANKûlRSTûMARKETEDûTHEû3EPTEMBERû pandemic, marking one of its largest many of those accounts allocating the notes 2025 sukuk at 170bp area over swaps before funding forays in recent years. to their green funds. the spread was moved in for a launch at The Caribbean sovereign, rated Ba3/BB–/ Investors from Europe took 72% of the 150bp. BB–, saw decent price progression on a new notes, US offshore accounts took 14%, Asia “It was a 5bp NIP, well covered with 53BNû YEARûBONDûANDûAû53BNûTAPû 12% and the Middle East 2%. decent international participation, although of its 5.875% 2060, which landed with yields Green bonds have been slow to take off in it was mainly a strong local bid,” said a of 4.875% and 6.25% against initial price the Middle East as a whole. The transaction banker familiar with the matter. thoughts of low 5% and mid 6%, respectively. was only the second conventional green Books closed in excess of US$1.2bn, with However, a Ps17.5bn (US$300m) bond from a bank in the region, the banker more than 75 accounts placing orders. reopening of its local currency 9.75% 2026

ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS INTERNATIONAL ISLAMIC FINANCE DEBT BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE Middle East Latin America Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 Standard Chartered 19 3,397.63 17.2 1 Standard Chartered 41 14,655.95 14.6 1 JP Morgan 42 10,955.49 12.4 2 HSBC 15 2,591.67 13.1 2 Citigroup 28 12,121.59 12.1 2 Bank of America 37 7,715.20 8.7 3 Dubai Islamic Bank 10 1,569.63 7.9 3 HSBC 36 11,443.97 11.4 3 Citigroup 24 7,250.29 8.2 4 First Abu Dhabi 9 1,240.25 6.3 4 Goldman Sachs 9 8,707.04 8.7 4 Deutsche Bank 11 7,215.88 8.2 5 Citigroup 7 895.24 4.5 5 Deutsche Bank 11 6,877.07 6.9 5 Goldman Sachs 29 6,337.90 7.2 6 Emirates NBD 9 850.58 4.3 6 First Abu Dhabi 17 5,186.46 5.2 6 Itau Unibanco 18 5,637.41 6.4 7 Natixis 3 785.53 4.0 7 JP Morgan 16 4,879.63 4.9 7 Scotiabank 19 5,630.09 6.4 8 Islamic Dev Bank 6 746.75 3.8 8 Credit Agricole 14 3,918.73 3.9 8 BNP Paribas 16 5,237.49 5.9 9 JP Morgan 3 695.58 3.5 9 Bank of America 6 3,855.69 3.9 9 HSBC 14 4,583.22 5.2 10 Gulf Int 4 558.77 2.8 10 Morgan Stanley 8 3,357.71 3.4 10 Santander 19 4,227.28 4.8 Total 22 19,792.60 Total 105 100,075.84 Total 100 88,454.60 Excluding equity-related debt. Excluding equity-related debt. Excluding equity-related debt. Source: Refinitiv SDC code: L5 Source: Refinitiv SDC code: L3 Source: Refinitiv SDC code: J27

74 International Financing Review September 19 2020

7 IFR Emerging 2351 p63-76.indd 74 18/09/2020 19:06:38 EMERGING MARKETS AMERICAS

saw next to no traction on pricing after further, according to a report last week from It also achieved considerably cheaper COMINGûWITHûAûYIELDûOFûûnûmATûTOû)04SûOFû /PPENHEIMERû pricing for Cemex than in June when it sold the 10% area. “The combined increase in global bonds AûSEVEN YEARûNON CALLûTHREEûBONDûATûPARûTOû “The audience for that particular type of THISûYEARûWILLûBEûEQUIVALENTûTOûMOREûTHANû yield 7.375% amid heightened concerns bond is pretty small – the local market and SIXûPOINTSûOFû'$0 ûAûSUBSTANTIALûNUMBERû about the impact of the coronavirus the EM guys that play in local currency. I ANDûFARûHIGHERûTHANûRECENTûANNUALûlGURES û pandemic. have seen buyers come in this morning – ALTHOUGHûEXPLAINEDûANDûJUSTIlEDûBYûTHEû Since then, that bond has rallied to hit a but not in the size we see for the US dollar #OVID ûEMERGENCY vûTHEûSECURITIESûlRMû dollar price of 108.875 for a yield of around bonds,” said one trader on Friday. said. 5.115% as the outlook for the credit The island economy, which depends At the end of August, the government improved. heavily on tourism, has been hit hard by the announced a series of measures to revive )NVESTORSûWEREûATTRACTEDûTOûAûWELL KNOWNû global health crisis caused by the tourism including offering medical company that has typically received coronavirus. INSURANCEûANDûWAIVINGûTHEû#OVID ûTESTû CROSSOVERûDEMANDûFROMûTHEû53ûHIGH YIELDû û4HEû$OMINICANûPESOûHASûSUNKûINûVALUEû REQUIREMENT space. against the dollar from 53.54 on March 23 to Remittances to the country have also “This is a BB/BB name, and the BB index in around 58.10 last week, though it has slightly improved, standing at US$770m in the US market is comfortably trading in the remained steady in recent weeks. !UGUST ûAûûMONTH ON MONTHûDECREASEûBUTû MID TO LOWûS vûSAIDûTHEûBANKERûAWAYûFROMû It was a similar story with bond yields AûûYEAR ON YEARûINCREASE ûACCORDINGûTOû the deal. “Here you’re getting a premium to with the 2060 bond peaking around 10.26% /PPENHEIMER that.” on March 19 before falling to be bid around Citigroup and JP Morgan led the transaction. Already facing headwinds last year, 6.18% on Thursday morning, according to 4HEû$OMINICANû2EPUBLICûISûRATEDû"A""n Cemex has been hit hard by the pandemic DATAûFROMû2ElNITIVûANDûAûBROKERû BB–. and the falling demand for cement. Even so, at a yield of 4.875%, pricing on But the company has built a cash cushion THEûNEWû YEARûWASûSEENûASûATTRACTIVEûFORû over the last few months and should be able THEûSOVEREIGNûANDûLANDEDûWITHûAûPICK UPûTOû MEXICO TOûWEATHERûTHEûRESTûOFûûWITHOUTûLIQUIDITYû the curve, where the existing 2030 was risks, S&P said in a report last month. trading around 4.5%. CEMEX GARNERS CHEAPER PRICING #OST CUTTINGûMEASURESûANDûAûGRADUALû h)TûPRICEDûPRETTYûWELLû!û YEARûATûAROUNDû recovery in 2021 should also bring Cemex’s 5% gives the country a great coupon to Mexico’s CEMEX raised US$1bn on Monday DEBT TO %BITDAûRATIOûBACKûTOûAROUNDûXû service and a nice pickup over the existing when it brought its second US dollar bond of from over 5x over the next 12 months, the curve,” said an analyst following the deal. the year at a substantially lower yield than ratings agency said. The deal was the sovereign’s second this when it hit the market in June. h#EMEXûHASûNAVIGATEDûTHEû#OVID ûCRISISû year, which raised US$2.5bn in the primary 4HEûCEMENTûCOMPANY ûRATEDû"""" ûHADû better than expected,” analysts at MARKETûINû*ANUARY ûANDûISûTHEûLARGESTûONE DAYû LITTLEûTROUBLEûlNDINGûBUYERSûFORûITSû YEARû CreditSights wrote on Monday. bond offering from the country in recent NON CALLûlVE ûWHICHûPRICEDûATûPARûTOûYIELDû And as one of the world’s largest cement years, according to IFR data. 5.20%. companies, having sold 63m tonnes in 2019, 4HEû$OMINICANû2EPUBLICûHASûBEENû A strong order book helped leads seal SOMEûAREûCONlDENTûABOUTûITSûLONG TERMû struggling amid a fall in tourism following pricing inside initial thoughts of 5.625% area fundamentals. THEû#OVID ûOUTBREAKûANDûHASûNEEDEDûEXTRAû and tight to guidance of 5.375%, plus or “We do view Cemex as a stronger credit funding. minus 12.5bp. with less structural uncertainty to its However, the country’s debt metrics have The deal broke through fair value of smaller peers,” said CreditSights. been weakened amid the emergency and 5.375%, according to one banker away from JP Morgan, Bank of America and BNP Paribas the latest bond deal will weigh on them the deal. were leads. Reach the people who matter Advertising and sponsorship opportunities in IFR

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7 IFR Emerging 2351 p63-76.indd 75 18/09/2020 19:06:42 US ECM ROUNDTABLE WEBCAST SERIES

This year, we’ve switched the IFR US ECM DATES Roundtable to an online event, split over two OCTOBER 6 & 13 2020 panels. Each session will be moderated by IFR’s US Editor, Stephen Lacey and will bring together TIME a panel of senior market professionals to assess 4:30PM EST current themes in the industry and provide an outlook for the year ahead and beyond. FORMAT WEBCAST Panel 1: The Great Equity Recapitalization in a Post Covid-19 Funding Environment takes place on Tuesday October 6 2020 and will discuss how Covid-19 has affected all aspects of ECM, from fundraising to marketing.

Panel 2: SPACs Boom onto the Market in 2020 as an Alternative to Traditional IPOs takes place a week later on Tuesday October 13 2020 and will examine the emergence of SPACs, where they are showing the RTXYXZHHJXXFSI\MJYMJWYMJ^FWJFUJWRFSJSYè]YZWJ

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U7 ISF ERC EMm weregbincags 2t 3R5T1 Ap6d3v-e7r6t .2in0d20d. i n 7d6d 1 168/09/2020 129:036:3503 LOANS

Australia 78 China 78 Hong Kong 80 India 80 Singapore 81 Czech Republic 81 Germany 81 Italy 82 UK 82 United States 83 Leveraged Loans 84 Restructuring

FRONT STORY EUROPEAN LEVERAGED MARKETS Opportunistic deals hit amid M&A drought Dividend recapitalisation loan set to hit market Borrowers also looking to extend maturities and amend terms

)NVESTORSûAREûCONSIDERINGû%UROPESûlRSTû REACTIONûTOûTHEûCRISISû4HISûISûPURELYûANû SCRAPPEDûDUEûTOûADVERSEûMARKETûCONDITIONSû dividend recapitalisation as borrowers focus OPPORTUNISTICûPLAY ûTOûTAKEûADVANTAGEûOFûTHEû )TûCOULD ûHOWEVER ûBRINGûTHEûDIVIDENDûBACKûIFû ONûOPPORTUNISTICûlNANCINGSûTOûIMPROVEû STRONGûMARKETûANDûINVESTORSûDESIREûFORû ITûGETSûENOUGHûSUPPORTûONûTHEûCURRENTûDEAL CAPITALûSTRUCTURESûANDûMAXIMISEûPORTFOLIOû PAPER vûANûINVESTORûSAID h6ISTRAûISûPUSHINGûOUTûMATURITIESûANDû COMPANIESûAMIDûAûLACKûOFû-!ûACTIVITY )NVESTORSûAREûBEINGûQUITEûSUPPORTIVEûOFû DOINGûOTHERûOPPORTUNISTICûSTUFFû)TûTRIEDûTOûDOû !ûSELECTûGROUPûOFûLENDERSûWEREûPRE these opportunistic deals as the alternative a dividend in 2018 and I guess it could bring sounded on a dividend deal, which is WOULDûBEûAûREPAYMENTûONûTHEIRûPAPER ûWHICHû ONEûAGAIN ûBUTûITûNEEDSûTOûGETûTHEûIMPORTANTû EXPECTEDûTOûBEûTHEûlRSTûOFûMANYûASûBANKERSû WOULDûSUBSEQUENTLYûMEANûSITTINGûONûEVENû STUFFûDONEûlRST vûTHEûSENIORûBANKERûSAID TARGETûSPONSORSûTOûDRUMûUPûACTIVITYûANDûTAKEû MOREûCASH ADVANTAGEûOFûINVESTORSûLOOKINGûFORûPRODUCT 7HILEûTHEûNUMBERûOFûNEWû#,/SûHASû DARK CLOUDS 4HEûMARKETûRETURNEDûFROMûTHEûSUMMERû DECLINEDûSINCEûTHEûGLOBALûHEALTHûPANDEMIC û $ESPITEûSTRONGûMARKETûCONDITIONS ûTHEREûISûAû BREAKûINûAûCONSTRUCTIVEûMOODûBUTûFACESûAû THEREûAREûSTILLûAROUNDûnûINûTHEûMARKETû SLIGHTûSENSEûOFûURGENCYûTOûBRINGû DISAPPOINTINGûLACKûOFûNEWûDEALSûTOûINVESTûIN WAREHOUSINGûANDûLOOKINGûFORûPAPER OPPORTUNISTICûDEALSûASûQUICKLYûASûPOSSIBLEû h9OUûHAVEûSTRONGûTECHNICALSû0EOPLEûHAVEû GIVENûTHEûOUTLOOKûLATERûTHISûYEARûnûWHICHû “The amend and extends we are SOMEûCASHûANDûALTHOUGHûITûISûNOTûCOMINGûOUTû INCLUDESûAûPOTENTIALûSECONDûWAVEûOFû#OVID OFûTHEIRûEARSûTHEYûAREûSTARTINGûTOûRAISEûNEWû û53ûELECTIONSûANDû"REXIT seeing now are different to the WAREHOUSESûANDûlLLûOUTûEXISTINGû !NYûDEALSûTHATûAREûTHINKINGûOFûLAUNCHINGû covenant waivers before, which warehouses, so there is appetite for deals, AREûLIKELYûTOûWITHINûTHEûNEXTûCOUPLEûOFû were a reaction to the crisis” BUTûTHEûPRIMARYûCUPBOARDûISûBAREû3OûYOUû WEEKS ûMEANINGû%UROPESûLEVERAGEDûLOANû have deals that have been around for a while MARKETûCOULDûSEEûAûmURRYûOFûDEALS LOOKINGûTOûEXTENDûMATURITIES ûTAKEûOUTû h4HEREûAREûSOMEûCLOUDSûONûTHEûHORIZONûASû DIVIDENDSûANDûESSENTIALLYûALLûTHEûTHINGSûYOUû PEOPLEûAREûCONCERNEDûABOUTûAûSECONDû#OVIDû LOOKûTOûDOûINûAûQUIETûBUTûSUPPORTIVEûMARKET vû WAVEû4HEYûAREûALSOûBEGINNINGûTOûTHINKû THEûSYNDICATEûHEADûSAID ABOUTû"REXITûANDûTHEYûAREûVERYûCONCERNEDû 5+ BASEDûAUTOûPARTSûMAKERûTI GROUP ABOUTûAûDISPUTEDû53ûELECTIONû.OûONEûISûSUREû h"ANKSûAREûPUTTINGûINûCALLSûTOûCLIENTSû AUTOMOTIVE SYSTEMS and trust and custodial HOWûTHESEûEVENTSûWILLûIMPACTûTHEûMARKETû 3EPTEMBERûHASûCOME ûTHEûGATESûHAVENTû services provider VISTRAûAREûBOTHûLOOKINGûTOû "UTûINûANYûCASE ûRIGHTûNOWûTHEûWINDOWûISû opened and so there are lots of eager AMENDûANDûEXTENDûDUAL CURRENCYû4ERMû,OANû OPENûFORûDEALS vûTHEûSYNDICATEûHEADûSAID INVESTORSûWAITINGûFORûPRODUCTûANDûHUNGRYû "SûANDûPUSHûOUTûMATURITIESûFROMûûSEEû BANKERSûTRYINGûTOûDRUMûUPûDEALSû"ANKSûAREû ,EVERAGEDû,OANS casting round in search of new deals and as )NûEXCHANGE ûBOTHûAREûWILLINGûTOûPAYûUPû “There are a load of 2022 deals THEYûCANTûFEEDûONûPRIMARYûAREûTRYINGûTOû FORûEXTENDINGûMATURITIESûANDûTHEûSECURITYû that will look to extend now, GENERATEûAPPETITEûELSEWHERE vûAûSYNDICATEû THATûCOMESûALONGûWITHûLONGERûDATEDûDEBT while they can” HEADûSAID “There are a load of 2022 deals that will LOOKûTOûEXTENDûNOW ûWHILEûTHEYûCANû7HATSû PURELY OPPORTUNISTIC AûFEWûEXTRAûBPSûORûAûPOINTûHEREûORûTHEREûIFû 7HEREASûBORROWERSûDURINGûLOCKDOWNûWEREû THERESûADDEDûSECURITY vûAûSENIORûBANKERûSAID RAISINGûMONEYûFORûLIQUIDITYûPURPOSESûANDû 4)û!UTOMOTIVEûISûSEEKINGûTOûEXTENDûAû ISSUINGûCOVENANTûWAIVERSûINûAûBIDûTOûKEEPû 53MûTRANCHEûANDûAûõMûTRANCHE ûTOû AmOAT ûTHEûNEWûDEALSûLAUNCHINGûINû $ECEMBERûûFROMû*UNEû 3EPTEMBERûANDûINTOûTHEûFOURTHûQUARTERûAREû -EANWHILE û6ISTRAûISûSEEKINGûTOûEXTENDûAû 3OMEûBANKERSûTAKEûAûMOREûSTOICûVIEWûONû PURELYûOPPORTUNISTIC 53Mû4,"ûANDûAûõMû4,"ûBYûTHREEû POLITICALûEVENTSûANDûTHINKûTHEûMARKETûWILLû In addition to dividend deals, borrowers YEARS ûTOû/CTOBERû WITHSTANDûMOSTûTHINGS ûASûITûDIDûWITHû AREûIMPROVINGûPORTFOLIOûBUSINESSESûBYû 6ISTRAûWILLûALSOûRAISEûROUGHLYû53M 4RUMPSûlRSTûELECTIONûANDûTHEû5+SûVOTEûTOû EXTENDINGûMATURITIESûANDûMAKINGû EQUIVALENTûINûINCREMENTALûDEBTûACROSSûBOTHû LEAVEû%UROPE AMENDMENTS LOANûTRANCHESûANDûDRAWû53MûFROMûANû “Even if people are worried about factors “Borrowers are getting opportunistic as a EXISTINGûREVOLVINGûCREDITûFACILITY ûTOû COMINGûDOWNûTHEûPIKE ûTHEREûAREûSTILLûCENTRALû LACKûOFû-!ûlLTERSûTHROUGHûTOûTHEûENDûOFûTHEû RElNANCEûANûOUTSTANDINGûSECOND LIENûLOAN BANKûBAZOOKASûBEINGûlREDûANDûSOûTHEREûISûAû THIRDûANDûFOURTHûQUARTERSû4HEûAMENDûANDû 6ISTRAûWASûLASTûINûTHEûLOANûMARKETûINûLATEû STRONGûPOSSIBILITYûTHATûTHEûTECHNICALSûTRUMPû EXTENDSûWEûAREûSEEINGûNOWûAREûDIFFERENTûTOû ûWHENûITûTRIEDûTOûRAISEûAûõMûLOANûTOû 4RUMP vûTHEûSYNDICATEûHEADûSAID the covenant waivers before, which were a FUNDûAûDIVIDENDûPAYOUT ûBUTûTHATûDEALûWASû Claire Ruckin

International Financing Review September 19 2020 77

8 IFR Loans 2351 pXX-XX.indd 77 18/09/2020 19:08:47 NINE PROVIDE TRANSGRID LOAN First State Super has stated that it is open TOûPAYINGûAûFULLYûFRANKEDûSPECIALûDIVIDENDûOFû ASIA-PACIFIC .INEûLENDERSûHAVEûPARTICIPATEDûINûTHEû ûCENTSûPERû/PTI#OMMûSHARE ûWHICHûIFûPAIDû !MûDUAL TRANCHEûCLUBûLOANûFORûENERGYû WOULDûBEûDEDUCTEDûFROMûTHEû!ûPERû TRANSMISSIONûlRMû4RANS'RID SHAREûCASHûCONSIDERATION AUSTRALIA Canadian Imperial Bank of Commerce, /PTI#OMMSûDIRECTORSûHAVEûUNANIMOUSLYû Commonwealth Bank of Australia, Hua Nan RECOMMENDEDûTHEûREVISEDûPROPOSALûFROMû PILBARA MINERALS SIGNS Commercial Bank, National Australia Bank, 5NITIû'ROUPûINûTHEûABSENCEûOFûAûSUPERIORû US$125m LOANS Societe Generale, SMBC, United Overseas Bank PROPOSAL and Westpac AREûTHEûLENDERSûTOûAû!Mû 4HEûACQUISITION ûWHICHûISûCONDITIONALûONû 0ILBARAû-INERALSûHASûSIGNEDûAû53Mû THREE YEARûCAPEXûFACILITY ûWHILEûING provided APPROVALSûFROMûTHEûCOURTûANDûSHAREHOLDERS û SENIORûSECUREDûLOANûTOûREDEEMûTHEû Aû!MûSEVEN YEARûTRANCHE ISûEXPECTEDûTOûBEûCOMPLETEDûONû/CTOBERû OUTSTANDINGûBALANCEûOFûITSû.ORDICûBONDSûANDû 4HEûTHREE YEARûPORTIONûOFFERSûANûINTERESTû ALSOûRENEWEDûAû53MûWORKINGûCAPITALû MARGINûOFûAROUNDûBPûOVERû""39 ûWHILEû FACILITY THEûSEVEN YEARûPAYSûBPûOVER CHINA !LLûCONDITIONSûPRECEDENTûFORûlNANCIALû NSW ELECTRICITY NETWORKS FINANCE is the close and drawdown for the loans have been BORROWERû2"#û#APITALû-ARKETSûWASûADVISER HISENSE PAYS UP FOR REFI SATISlED ûANDûTHEûREPAYMENTûOFûTHEû.ORDICû 4HEûlNANCINGûENTITYûOFû4RANS'RIDûHASûALSOû BONDSûISûEXPECTEDûBYû3EPTEMBERû PRICEDûAû!Mû YEARûSENIORûSECUREDû 3TATE OWNEDûELECTRICALûAPPLIANCESû 4HEû53Mû.ORDICûBONDSûWEREûISSUEDû BONDûTHISûWEEKûVIAûJOINTûLEADûMANAGERSû#"!û MANUFACTURERû(ISENSEûHASûLAUNCHEDûAû TOûlNANCEûTHEûlRSTûSTAGEûOFûTHEû0ILGANGOORAû ANDû.!"û 53MûTHREE YEARûLOANûTHATûOFFERSûAû ,ITHIUM 4ANTALUMûPROJECTûINû7ESTERNû )Nû*ULY û#ANADASû/NTARIOû-UNICIPALû HIGHERûPRICINGûTHANûTHEûLOANûITûRElNANCES !USTRALIA %MPLOYEESû2ETIREMENTû3YSTEMûCLOSEDûAû China Development Bank and Standard 4HEûAVERAGEûALL INûINTERESTûRATEûONûTHEûNEWû !MûTHREE YEARûCLUBûLOANûFROMûSIXûBANKSû Chartered AREûTHEûMANDATEDûLEADûARRANGERSû LOANûISûAROUNDûûBASEDûONûCURRENTûMARKETû TOûBACKûITSûACQUISITIONûOFûAûSTAKEûINû ANDûBOOKRUNNERSûOFûTHEûBULLETûTRANSACTION û reference rates, a substantial cost saving 4RANS'RIDû WHICHûOFFERSûANûINTERESTûMARGINûOFûBPû COMPAREDûTOûTHEû.ORDICûBONDS -C'AVINû)NFRASTRUCTUREûISûTHEûBORROWERû OVERû,IBOR h!SûONEûOFûTHEûMAJORûNEWûKEYûLITHIUMûRAWû FORûTHATûFACILITY -,!SûCOMMITTINGû53MûORûABOVEûWILLû MATERIALSûSUPPLIERSûGLOBALLY ûWEûHAVEûBEENû /MERSûHASûACQUIREDûAûûSTAKEûINû EARNûAûTOP LEVELûALL INûPRICINGûOFûBPûVIAûAû ABLEûTOûATTRACTûVERYûCOMPETITIVEûlNANCINGû 4RANS'RIDûFROMû7RENû(OUSEû)NFRASTRUCTURE û BPûFEE ûWHILEûLEADûARRANGERSûTAKINGû TERMSûFROMûLEADINGûlNANCIALûINSTITUTIONSûINû AûSUBSIDIARYûOFû+UWAITû)NVESTMENTû!UTHORITY 53MnMûRECEIVEûANûALL INûPRICINGûOFû AûCHALLENGINGûMARKET vûSAIDû0ILBARAû-INERALSû 4RANS'RIDûALSOûCOUNTSû#AISSEûDEûDEPOTûETû BPûVIAûAûBPûFEEûANDûARRANGERSûTAKINGû MANAGINGûDIRECTORû+ENû"RINSDEN PLACEMENTûDUû1UEBECû û!BUû$HABIû 53MnMûAREûOFFEREDûANûALL INûPRICINGû BNP ParibasûISûPROVIDINGû53MûOFûTHEû )NVESTMENTû!UTHORITYSû4AWREEDû OFûBPûVIAûAûBPûFEE NEWûlVE YEARûLOAN ûWHILEûClean Energy Finance )NVESTMENTSû û5TILITIESû4RUSTûOFû!USTRALIAû HISENSE (HONG KONG) ûAû(ONGû+ONG Corp ISûCONTRIBUTINGû53M ûTHEûCOMPANYû ûANDû3PARKû)NFRASTRUCTUREû ûASûITSû INCORPORATEDûSUBSIDIARYûOFû1INGDAO BASEDû SAIDûINû*ULY SHAREHOLDERS (ISENSE ûISûTHEûBORROWERûANDûPARENTû 4HEû&RENCHûBANKûHASûALSOûEXTENDEDûTHEû COMPANYû1INGDAOû(ISENSEû%LECTRICû(OLDINGSû UNDRAWNûWORKINGûCAPITALûFACILITYûORIGINALLYû UNITI SEEKS A$250m FOR OPTICOMM ISûTHEûGUARANTOR SIGNEDûINû 0ROCEEDSûWILLûRElNANCEûAû53MûTHREE PILGANGOORA OPERATIONS ûAûWHOLLYûOWNEDû UNITI GROUPûISûSEEKINGûAûLARGERûLOANûOFû YEARûLOANûTHEûBORROWERûOBTAINEDûINû SUBSIDIARYûOFû0ILBARAû-INERALS ûISûTHEû !MûTOûFUNDûITSûREVISEDûOFFERûTOûACQUIREû .OVEMBERû BORROWER ûWHILEû0ILBARAû-INERALSûANDû lBREûNETWORKûOPERATORû/PTI#OMM 4ENûBANKS ûINCLUDINGû(3"#ûANDû 0ILGANGOORAû(OLDINGSûAREûGUARANTORS Commonwealth Bank of Australia and Westpac 3TAN#HART ûPROVIDEDûTHATûLOAN ûWHICHû !38 LISTEDû0ILBARAû-INERALSûISûANû AREûTHEûLENDERSûOFûTHEûTHREE YEARûLOAN ûWHICHû OFFEREDûAûTOP LEVELûALL INûPRICINGûOFûBPû !USTRALIANûLITHIUMûANDûTANTALUMûPRODUCER HASûBEENûINCREASEDûFROMû!M BASEDûONûANûINTERESTûMARGINûOFûBPûOVERû 5NITI ûAûREALûESTATEûINVESTMENTûTRUSTûWILLû ,IBOR ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY ALSOûFUNDûTHEûPLANNEDûACQUISITIONûWITHû (ISENSEûISûULTIMATELYûCONTROLLEDûBYûTHEû SYNDICATED VOLUME (INCLUDING JAPAN) EQUITYûANDûEXISTINGûCASH 3TATE OWNEDû!SSETSû3UPERVISIONûANDû BOOKRUNNERS: 1/1/2020 TO DATE 5NITIûHASûAMENDEDûITSûOFFERûTOûACQUIREûALLû !DMINISTRATIONû#OMMISSIONûOFûTHEû1INGDAOû Managing No of Total Share OFû/PTI#OMMûSHARESûITûDOESûNOTûALREADYûOWNû -UNICIPALû0EOPLESû'OVERNMENT bank or group issues US$(m) (%) FORû!ûEACHûPLUSû5NITIûSHARESûnû 1 Mizuho 328 76,087.87 21.4 IMPLYINGû GENERTEC LIFTS LOAN TO US$800m 2 MUFG 494 50,843.14 14.3 AûVALUEûOFû!ûPERûSHAREûnûREVISINGûITSû 3 Sumitomo Mitsui 398 43,976.74 12.4 EARLIERûOFFERûOFû!ûPERûSHARE 3TATE OWNEDûlNANCIALûLEASINGûANDûMEDICALû 4 Bank of China 225 43,070.55 12.1 !SûAûRESULTûOFûTHEûINCREASEDûCASHû SERVICESûlRMûGENERTEC UNIVERSAL MEDICAL GROUP 5 ANZ 47 9,060.42 2.6 consideration and additional debt funding, HASûINCREASEDûAûTHREE YEARûLOANûTOû53M 6 HSBC 50 7,368.41 2.1 5NITIûISûEXPECTEDûTOûHAVEûABOUTû!MûOFû EQUIVALENT 7 China Merchants Bk 16 6,582.62 1.9 cash reserves before transaction costs upon The bullet deal was launched at a 8 DBS Group 30 6,211.78 1.7 COMPLETIONûOFûTHEûACQUISITION ûRESULTINGûINû 53M EQUIVALENTûSIZE ûOFFERINGûAûTOP 9 CBA 23 5,275.13 1.5 PROûFORMAûNETûLEVERAGEûOFûAPPROXIMATELYû LEVELûALL INûPRICINGûOFûBPûVIAûANûINTERESTû 10 China Construction 30 5,239.76 1.5 X ûACCORDINGûTOûTHEûlLING MARGINûOFûBPûOVERû(IBORûORû,IBOR Total 1,876 355,241.14 %ARLIERûTHISûMONTH û/PTI#OMMûRECEIVEDûAû Bank of Communications Hong Kong branch,

Proportional credit RIVALûOFFERûFROMû&IRSTû3TATEû3UPERANNUATIONû China Construction Bank (Asia), Chong Hing Bank Source: Refinitiv SDC code: S3a 3CHEMEûATû!ûPERûSHAREû and Shanghai Pudong Development Bank Hong

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8 IFR Loans 2351 pXX-XX.indd 78 18/09/2020 19:08:47 LOANS ASIA-PACIFIC

KongûWEREûTHEûMANDATEDûLEADûARRANGERSûANDû BOOKRUNNERSûOFûTHEûTRANSACTION ûWHICHûNOWû COMPRISESûAû53Mû4RANCHEû!ûANDûAû Leasing firms venture offshore (+BNû53M û4RANCHEû" Mandated lead arrangers are Agricultural Bank CHINA Borrowers including AVIC International look to raise US$900m of China, China Development Bank and Nanyang Commercial Bank. Lead arrangers are Banque A number of Chinese leasing companies are attempting to lure Western banks, it is likely to Internationale a Luxembourg and ICBC. Arrangers looking to tap the offshore loan market for a be a magnet for PRC lenders, even though the are Bank of Shanghai, Hang Seng Bank, OCBC combined US$900m, despite reduced lender ultimate parent companies are not providing Bank and Bank of East Asia. Senior managers are E appetite as a result of the coronavirus pandemic guarantees for the loans. Sun Commercial Bank, KGI Bank and Taishin and deteriorating US-China relations. “When it comes to analysing leasing International Bank. AVIC INTERNATIONAL LEASING, a unit of aircraft companies, we look at which leasing segments 4HEûBORROWERSûWHOLLYûOWNEDûSUBSIDIARYû manufacturer Aviation Industry Corp of China, is it’s involved in, the gearing ratio of the company #HINAû5NIVERSALû,EASINGû#OûISûTHEûGUARANTOR looking to borrow US$150m-equivalent in a deal in comparison with its industry peers, and very &UNDSûAREûTOûRElNANCEûAû53M that will test offshore appetite. The financing importantly, the background of the borrower’s EQUIVALENTûTHREE YEARûDEBUTûLOANûTHEû comes at a time of significant turbulence for parent,” said a second Hong Kong-based banker BORROWERûRAISEDûINû.OVEMBERûû##"û the aviation industry with the pandemic having at another Chinese bank. !SIA û#4"#û"ANKûANDû30$"ûWEREûTHEû-,!"Sû disrupted global air travel for most of the year. This was evident in the outcome for state- OFûTHATûTRANSACTION ûWHICHûPAIDûAûTOP LEVELû Aircraft leasing companies have faced the challenge owned financial leasing and medical services firm ALL INûPRICINGûOFûBPûVIAûAûMARGINûOFûBPû of its airline lessees failing to make payments on time as GENERTEC UNIVERSAL MEDICAL, which lifted its three- OVERû(IBORûORû,IBOR their planes have been grounded for months. year loan to US$800m from an original US$600m Adding to the challenge is AVIC’s parentage target after a dozen banks joined in syndication. ZHONGYU GAS PUMPS UP LOAN that places it at the heart of the spat between China and the US. In June President Donald NOT SO SMOOTH (ONGû+ONG LISTEDûZHONGYU GAS HOLDINGS has Trump’s administration released a list of 20 Questions over lender appetite remain, however, INCREASEDûITSûTHREE YEARûRElNANCINGûTOû Chinese firms, including AVIC, China Mobile for borrowers without a track record in the loan 53MûFROMû53M Communications, telecoms equipment giant market or with weaker state links. Bank of China (Hong Kong), China CITIC Bank Huawei Technologies and video surveillance JC INTERNATIONAL LEASING, a financial leasing unit International, Hang Seng Bank and HSBC were company Hikvision that it says are owned or of conglomerate Legend Holdings, was forced to THEûMANDATEDûLEADûARRANGERSûANDû controlled by the Chinese military, laying the flex pricing on its debut offshore US$200m loan BOOKRUNNERSûOFûTHEûTRANSACTION ûWHICHû groundwork for new US financial sanctions. by around 25bp after failing to attract banks in a OFFEREDûAûTOP LEVELûALL INûPRICINGûOFûBPûVIAû Eleven more, including China National Chemical prolonged four-month syndication, bankers said. ANûINTERESTûMARGINûOFûBPûOVERû,IBORûANDûAû Corp, were added to the list in late August. The three-year loan had offered a top-level BPûFEE Nevertheless, Chinese banks are expected to all-in pricing of 175bp via an interest margin of Arrangers are Bank of Communications, China lend their support as confidence in the domestic 150bp over Libor when launched into general Everbright Bank, Fubon Bank, Tai Fung Bank, Luso economy continues to rebound from the syndication in May. International Banking, Nanyang Commercial ravages of the pandemic. China’s leaders held “The market is not familiar with the leasing Bank, Bangkok Bank, Bank SinoPac, Land Bank of a triumphant ceremony this month to celebrate business segment of Legend Holdings, and Taiwan and EnTie Commercial Bank. “beating the coronavirus” and some bankers the parent company itself is not entirely state- 0ROCEEDSûWILLûBEûFORûRElNANCINGûANDû believe the worst could be over for the country. owned,” said another Hong Kong-based banker GENERALûCORPORATEûPURPOSES “AVIC Leasing has a strong client portfolio of whose institution declined the deal. )Nû&EBRUARYûLASTûYEAR û:HONGYUû'ASû first-tier Chinese airline lessees, which are hopefully As at June 30, China Academy of Science Holdings OBTAINEDûAû53M EQUIVALENTûTHREE YEARû among the first in the world to recover from the held an approximately 29% stake in Legend Holdings. TERMûLOANûFROMûûLENDERS ûINCLUDINGû(ANGû pandemic as the country has resumed domestic For the six months ended June 30, JC Leasing 3ENGû"ANKûANDû(3"#ûASû-,!"S and international air travel,” said a banker from a reported an 8% year-on-year decline in net 4HATûFACILITYûWASûALSOûINCREASEDûFROMûANû Chinese lender looking to participate in the loan. profit to Rmb111m (US$16m), primarily due to ORIGINALû53M EQUIVALENTûTARGETûANDû a decrease in the revenues from its financial OFFEREDûAûTOP LEVELûALL INûPRICINGûOFûBPû STATE-OWNED PRIVILEGE leasing business, which in turn was due to BASEDûONûAûMARGINûOFûBPûOVERû,IBORûORû Other leasing companies seeking loans include business disruption attributable to Covid-19. (IBOR power and clean energy equipment leasing Even well established borrowers Bocom Leasing :HONGYUû'ASûBUILDSûANDûMANAGESûGASû company CPI RONGHE FINANCIAL LEASING, BOCOM and CPI Ronghe are paying up on their latest PIPELINEûINFRASTRUCTUREûPROJECTSûANDû LEASING MANAGEMENT HONG KONG and PING AN loans. BoCom Leasing is offering a top-level all-in DISTRIBUTESûNATURALûGASûINû#HINA INTERNATIONAL FINANCIAL LEASING. pricing of 125bp for its US$300m three-year (ONGû+ONG LISTEDû#HINAû'ASû(OLDINGS û All three are backed by well-known parents. loan, compared with the 118bp all-in it paid on a WHICHûISûABOUTû OWNEDûBYû"EIJINGû CPI Ronghe is a subsidiary of SPIC Capital US$200m three-year green loan in June 2019. %NTERPRISESû'ROUP ûHOLDSûABOUTûûOFûTHEû Holdings, which in turn is a fully owned subsidiary CPI Ronghe Leasing is paying a top-level BORROWER of China’s state-owned State Power Investment all-in pricing of 155bp for its US$150m two-year Corp. BoCom Leasing Management HK is the refinancing, 10bp richer than the 115bp it offered BCEG BACK SIX MONTHS AFTER DEBUT machinery and equipment leasing unit of BoCom on a US$232m two-year borrowing in April 2019. Financial Leasing, which in turn is a unit of state- Meanwhile, Ping An Leasing is offering the #ONSTRUCTIONûANDûENGINEERINGûCOMPANYû owned Bank of Communications. PAIFL is a unit of same 170bp all-in pricing on its US$340m three- "EIJINGû#ONSTRUCTIONû%NGINEERINGû'ROUPûHASû China’s biggest insurer Ping An Insurance. year refinancing as compared to a US$350m LAUNCHEDûAû53MûTHREE YEARûTERMûLOAN û While a link to the Chinese government may three-year loan closed in July last year. BARELYûSIXûMONTHSûAFTERûCOMPLETINGûAû prove a hurdle for Chinese leasing companies Apple Li SMALLERûDEBUTûBORROWING

International Financing Review September 19 2020 79

8 IFR Loans 2351 pXX-XX.indd 79 18/09/2020 19:08:47 Deutsche Bank, Natixis and Maybank are the 3EPARATELY û!6)#û)NTERNATIONALû,EASINGûISû ESSENCE INTL OBTAINS CLUB MANDATEDûLEADûARRANGERSûANDûBOOKRUNNERSû RAISINGû53MûFROMûAûlVE YEARûCLUBûLOANû of the bullet loan, which offers an interest TOûlNANCEûITSûPURCHASEûOFûTWOûSHIPSû"ANKû (ONGû+ONG BASEDûBROKERAGEûESSENCE MARGINûOFûBPûOVERû,IBOR 3INO0ACûISûTHEûSOLEûUNDERWRITERûOFûTHEûLOANû INTERNATIONAL FINANCIAL HOLDINGS has raised a "ANKSûAREûBEINGûINVITEDûTOûJOINûASû-,!Sû ANDûHASûAPPROACHEDûOTHERûLENDERS (+BNûTHREE YEARûLOANûFROMûNINEû WITHûTICKETSûOFû53MûORûMOREûFORûTOP LENDERS LEVELûALL INûPRICINGûOFûBPûBASEDûONûAû TCL UNIT OBTAINS US$250m LOAN Bank of China (Hong Kong), Bank SinoPac, participation fee of 70bp, or as lead Cathay United Bank, CMB Wing Lung Bank, ARRANGERSûWITHûCOMMITMENTSûOFû53Mn !ûUNITûOFû#HINESEûHOMEûAPPLIANCESûGIANTû Dah Sing Bank, Industrial and Commercial Bank MûFORûANûALL INûOFûBPûTHROUGHûAûFEEû 4#,û4ECHNOLOGYû'ROUPûHASûRAISEDûAû of China (Asia), Nanyang Commercial Bank, OFûBP 53MûTHREE YEARûLOANûFROMûSIXûBANKS Shanghai Pudong Development Bank and The borrower is BCEGI (HONG KONG), a Bank of China and Credit Agricole CIB were Standard Chartered Bank AREûTHEûLENDERS SUBSIDIARYûOFûSTATE OWNEDû"#%' ûWHICHûISû THEûMANDATEDûLEADûARRANGERSûANDû 4HEûDEAL ûWHICHûCOMPRISESûAû(+Mû THEûGUARANTOR BOOKRUNNERS ûWHILEû"ANKûOFû TERMûLOANû4RANCHEû!ûANDûAû(+Mû &UNDSûAREûFORûWORKINGûCAPITALûPURPOSES #OMMUNICATIONS û#HINAû"OHAIû"ANKûANDû revolver Tranche B, offers an interest )Nû-ARCH ûTHEûBORROWERûRAISEDûANû 0OSTALû3AVINGSû"ANKûOFû#HINAûJOINEDûASû-,!Sû MARGINûOFûBPûOVERû(IBOR INCREASEDû53MûTHREE YEARûMAIDENû #HINAû%VERBRIGHTû"ANKûCAMEûINûASûARRANGER &UNDSûAREûFORûRElNANCINGûPURPOSES LOANû.ATIXISûWASûTHEûSOLEû-,!"ûOFûTHATû CHINA STAR OPTOELECTRONICS INTERNATIONAL (HK) The borrower’s previous visit to the loan transaction, which attracted eight lenders ISûTHEûBORROWER ûWHILEû3HENZHEN BASEDû4#,û MARKETûWASûINû*ULYûûFORûAû(+BNû INûLIMITEDûSYNDICATIONû4HEûDEALûOFFEREDû #HINAû3TARû/PTOELECTRONICSû4ECHNOLOGYûISû THREE YEARûFACILITYû"O#(+ û30$" û ALL INûPRICINGûABOVEûBPûVIAûANûINTERESTû PROVIDINGûAûGUARANTEE 3TAN#HARTûANDû7INGû,UNGûWEREûTHEû MARGINûOFûBPûOVERû,IBOR &UNDSûAREûFORûGENERALûCORPORATEûPURPOSES MANDATEDûLEADûARRANGERSûANDûBOOKRUNNERSû )Nû&EBRUARYû û4#,û#3/4ûOBTAINEDûAû OFûTHATûFACILITY ûWHICHûOFFEREDûTOP LEVELû AVIC UNIT SEEKS ONE-YEAR LOAN 53BNûEIGHT YEARûLOANû ALL INûPRICINGûOFûBPûBASEDûONûAûMARGINû /Nû!UGUSTû û4#,û4ECHNOLOGYûANNOUNCEDû OFûBPûOVERû(IBOR CHINA AVIATION INTERNATIONAL HOLDING is in the THATû4#,û#3/4ûHASûSIGNEDûANûAGREEMENTûTOû Essence International Financial is a MARKETûWITHûAû53M EQUIVALENTû BUYûAûMAJORITYûSTAKEûINûAû3UZHOU BASEDû,#$û WHOLLYûOWNEDûOFFSHOREûARMûOFû3HENZHEN DAYûDUAL CURRENCYûLOAN ûWHILEûITSûPARENTû PANELûFACTORYûOFû3AMSUNGû$ISPLAY ûAûUNITûOFû BASEDûBROKERAGEû%SSENCEû3ECURITIES ûWHICHû COMPANYûISûRAISINGûAûSMALLERûSHIPû 3OUTHû+OREANûTECHûGIANTû3AMSUNGû ISûINûTURNûAûWHOLLYûOWNEDûSUBSIDIARYûOFû lNANCINGû %LECTRONICS ûINûAûDEALûVALUEDûATû53BN 3HANGHAI LISTEDû3$)#û%SSENCEû(OLDINGS Credit Suisse ISûTHEûMANDATEDûLEADû ARRANGERûANDûBOOKRUNNERûOFûTHEû TRANSACTION ûWHICHûHASûTWOûONE YEARû HONG KONG INDIA EXTENSIONûOPTIONS 0ARENTû!6)#û)NTERNATIONALû,EASINGûISû SWIRE PACIFIC WRAPS DEBUT SLL BYJU’S PREPS DEBUT LOAN PROVIDINGûAûGUARANTEE The loan, to be available in US dollars (ONGû+ONG LISTEDûCONGLOMERATEûSWIRE %DUCATIONûTECHNOLOGYûlRMû"YJUSûHASû ANDûEUROS ûOFFERSûINTERESTûMARGINSûOFûBPû PACIFICûHASûCONVERTEDûANûEXISTINGû(+BNû MANDATEDûMorgan Stanley on a debut OVERû,IBORûANDûBPûOVERû%URIBOR û REVOLVINGûCREDITûFACILITYûINTOûAû OFFSHOREûLOANûOFûUPûTOû53M ûWHICHû RESPECTIVELY SUSTAINABILITY LINKEDûLOAN ûTHEûCOMPANYSû COULDûCOMPRISEûAû53MûTERMûLOANûANDû "ANKSûCANûJOINûWITHû53MûORûABOVEû lRSTûSUCHûBORROWING Aû53MûREVOLVINGûCREDITûFACILITY FORûTOP LEVELûALL INûPRICINGûOFûBPûOVERû The interest rate on the borrowing can 4HEû53ûBANKûISûTALKINGûWITHûOTHERû ,IBORûORûBPûOVERû%URIBORûVIAûAûBPû STEPûDOWNûIFûTHEûBORROWERûACHIEVESûPRE LENDERSûTOûFORMûTHEûARRANGERûGROUP UPFRONTûFEEûWITHû53MnMûFORûALL INû DETERMINEDûENVIRONMENTAL ûSOCIALûANDû "YJUSûISûREPORTEDLYûINûTALKSûFORûFURTHERû PRICINGûOFûBPûOVERû,IBORûORûBPû GOVERNANCEûTARGETS ûSUCHûASûENERGYû ACQUISITIONSûAFTERûBUYINGû,AB)N!PP ûWHICHû %URIBORûVIAûAûBPûFEE ûANDûWITHû53Mn CONSUMPTION ûWATERûUSAGE ûANDûDIVERSITYû OFFERSûSCIENCEûLABORATORY LIKEûSIMULATIONû MûFORûALL INûPRICINGûOFûBPûOVERû,IBORû ANDûINCLUSION ûWHILEûMAINTAININGûITSûLISTINGû ONûMOBILEûDEVICES ûFORûANûUNDISCLOSEDû ORûBPûOVERû%URIBORûVIAûAûBPûFEE ONûTHEû$OWû*ONESû3USTAINABILITYû!SIAû AMOUNTûLASTûWEEK ûACCORDINGûTOûDOMESTICû )FûTHEûBORROWERûCHOOSESûTOûEXTENDûTHEû 0ACIlCû)NDEXûANDûIMPROVINGûRELATEDûKEYû MEDIAûREPORTS LOANûMATURITY ûTHEûINTERESTûMARGINSûWILLûBEû PERFORMANCEûINDICATORS )Nû!UGUSTû"YJUSûBOUGHTû-UMBAI ADJUSTEDûTOûBPûOVERû,IBORûANDûBPû 0ROCEEDSûOFûTHEûLOANûAREûTOûBEûUSEDûFORû HEADQUARTEREDûEDUCATIONûSTART UPû OVERû%URIBOR ûRESPECTIVELY general corporate funding purposes, 7HITE(ATû*RûFORû53M "ANKSûCOMMITTINGû53MûORûABOVEûWILLû INCLUDINGûDRIVINGûTHEûLONG TERMû 4HEûCOMPANYûHASûALMOSTûDOUBLEDûITSû EARNûANûADDITIONALûBPûEXTENSIONûFEE û SUSTAINABILITYûPERFORMANCEûOFûTHEûCOMPANY REVENUESûTOû2SBNû53M ûINûTHEû THOSEûTAKINGû53MnMûWILLûEARNûANû 4HEûlVE YEARûFACILITYûWASûORIGINALLYûSIGNEDû YEARûTOû-ARCHûûûFROMû2SBNûAû ADDITIONALûBP ûWHILEûLENDERSûATû53Mn with DBS BankûINû*ANUARYû YEARûEARLIER MûWILLûEARNûANûADDITIONALûBP ,ASTûMONTH ûSUBSIDIARYû3WIREû0ROPERTIESû %ARLIERûTHISûMONTHû53ûPRIVATEûEQUITYû 0ROCEEDSûWILLûBEûUSEDûFORûWORKINGû SIGNEDûAû(+BNûGREENûLOANûWITHû/#"#û lRMû3ILVERû,AKEû0ARTNERSûINVESTEDûANû CAPITAL "ANK ûASûPARTûOFûTHEûDEVELOPERSûEFFORTSûTOû UNDISCLOSEDûAMOUNTûINû"YJUS ûLEADINGû The borrower’s previous visit to IMPLEMENTûGREENûINITIATIVESûATûITSû EXISTINGûINVESTORSû4IGERû'LOBAL û'ENERALû THEûMARKETûWASûINû3EPTEMBERûLASTû PROPERTIES !TLANTICûANDû/WLû6ENTURESûINûTHEûMOSTû YEARûFORûAû53MûTHREE YEARûLOANû4HATû )Nû*ULYûLASTûYEAR û3WIREû0ROPERTIESû RECENTûlNANCINGûROUND DEALûOFFEREDûTOP LEVELûALL INûPRICINGûOFû CONVERTEDûAû(+MûlVE YEARûREVOLVERû 4HEû"YJUSûBRANDûBELONGSûTOûTHINK & BPûBASEDûONûAûMARGINûOFûBPûOVERû SIGNEDûINû!UGUSTûûWITHû#REDITû!GRICOLEû LEARN ûAû"ENGALURU HEADQUARTEREDûONLINEû ,IBORû #)"ûINTOûANû3,, TUTORINGûlRMûFOUNDEDûINû

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PFC MANDATES TWO The interest rate on the loan will be tied TOû7ILMARSûACHIEVEMENTûOFûPRE 3TATE OWNEDûPOWER FINANCE CORP has DETERMINEDûTARGETSûTHATûHAVEûBEENûSETû EUROPE/MIDDLE MANDATEDûDBS Bank and State Bank of India BASEDûONûAûLISTûOFûPERFORMANCEûINDICATORS EAST/AFRICA ONûAû53MûLOAN ûMARKINGûTHEû 4HEûPERFORMANCEûINDICATORSûINCLUDEû BORROWERSûRETURNûWITHINûNINEûMONTHSûOFû CORPORATEûGOVERNANCE ûCARBONûEMISSIONS û COMPLETINGûAûSLIGHTLYûLARGERûBORROWING LANDûUSEûANDûBIODIVERSITY ûCOMMUNITYû CZECH REPUBLIC 3")ûHASûCOMMITTEDû53MûOFûTHEûlVE RELATIONSûANDûSUPPLYûCHAINûPRACTICES YEARûBORROWING ûWHILEû$"3ûISûCOMMITTINGû 3USTAINALYTICS ûAûGLOBALûINDEPENDENTû EP MAKES NEW METRO OFFER THEû3INGAPOREûDOLLARûEQUIVALENTûOFû ENVIRONMENTAL ûSOCIALûANDûGOVERNANCEû 53M research and ratings provider, will assess #ZECHûANDû3LOVAKûACQUISITIONûVEHICLEûEP 0&#SûLASTûSYNDICATEDûLOANûWASûAû whether the borrower has achieved the GLOBAL COMMERCEûHASûMADEûAûNEWûOFFERûFORû 53M EQUIVALENTûTHREE YEARûFACILITYû TARGETSûONûANûANNUALûBASIS 'ERMANûWHOLESALERû-ETRO THATûCLOSEDûINû$ECEMBERûûWITHûSIXû ,ASTûMONTH û7ILMARûRAISEDû3Mû BNP Paribas and Societe Generale AREû-!û BANKSûJOINING 53M ûFROMû$"3û"ANK ûMARKINGûTHEû advisers, global coordinators and debt -5&'ûANDû3")ûWEREûTHEûMANDATEDûLEADû AGRIBUSINESSûINDUSTRYSûlRSTû3INGAPOREû UNDERWRITERSûOFûTHEûlNANCINGûBACKINGûTHEû ARRANGERSûANDûBOOKRUNNERSûOFûTHEûDEAL û /VERNIGHTû2ATEû!VERAGEûBENCHMARK BASEDû bid, while Credit Suisse ISûlNANCIALûADVISERû WHICHûPAIDûAûTOP LEVELûALL INûPRICINGûOFûBPû LOANûCOUPLEDûWITHûANûINTERESTûRATEûSWAP ANDûCASHûCONlRMATIONûBANK BASEDûONûANûINTERESTûMARGINûOFûBPûOVERû 4HEû3INGAPORE HEADQUARTEREDûGROUPû ,ASTûYEAR û%0û'LOBALû#OMMERCEûFAILEDûWITHû ,IBORûANDûREMAININGûLIFEûOFûûYEARS PREVIOUSLYûSIGNEDûAû53MûTWO YEARû3,,û AûõBNûBIDûFORû-ETRO ûBACKINGûTHEûOFFERûWITHû WITHû$"3ûINû õBNûlNANCINGûUNDERWRITTENûBYû".0û 0ARIBAS û#REDITû3UISSEûANDû3OCIETEû'ENERALE INDONESIA 4HATûlNANCINGûINCLUDEDûAûõBNûlVE THAILAND YEARûSENIORûSECUREDûTERMûLOAN ûAûõBNû CPI DRAWS A DOZEN FOR RCF SEVEN YEARûSENIORûSECUREDûTERMûLOAN ûANDûAû CHAILEASE THAILAND PREPS LOAN õBNûlVE YEARû(OLD#OûTERMûLOAN CHAROEN POKPHAND INDONESIA has signed a 4HEREûWASûALSOûAûõBNûlVE YEARûSENIORû 53M EQUIVALENTûREVOLVINGûCREDITû 4AIWAN LISTEDû#HAILEASEû(OLDINGûHASû SECUREDûMULTICURRENCYûREVOLVINGûCREDITûFACILITY FACILITYûAFTERûATTRACTINGûAûDOZENûBANKSûINû LAUNCHEDûAûTHREE YEARûLOANûOFûUPûTOû SYNDICATION 53MûTHROUGHûITSû4HAIûSUBSIDIARY Citigroup and DBS Bank were the Mizuho BankûISûTHEûSOLEûMANDATEDûLEADû GERMANY MANDATEDûLEADûARRANGERSûANDûBOOKRUNNERSû ARRANGERûANDûBOOKRUNNERûOFûTHEû OFûTHEûBORROWING ûWHICHûCOMPRISESûAû TRANSACTION ûWHICHûHASûANûINITIALûSIZEûOFû HENSOLDT EYES POST-IPO LOAN 2PTRNû53M ûPIECEûANDûAû53Mû 53MûANDûAû53MûGREENSHOE PORTION 4HEûDEALûOFFERSûANûINTERESTûMARGINûOFû Defence supplier HENSOLDT is lining up a *OININGûASû-,!SûANDûBOOKRUNNERSûAREû BPûOVERû,IBORû4HEûBORROWERûWILLûPAYû õMûLOANûTOûlNANCEûTHEûCOMPANYûAFTERûITSû ANZ, Bank Central Asia, BNP Paribas, Bank ANYûEXCESSûINTERESTûRATEûBEYONDûAûBPû PLANNEDû)0/ ûWHICHûAIMSûTOûRAISEûATûLEASTû BTPN, Bank Rakyat Indonesia, CIMB, HSBC, DIFFERENCEûBETWEENû4!)&8ûANDû,IBOR õM Bank Mandiri and Mizuhoû-ANDATEDûLEADû -ANDATEDûLEADûARRANGERSûJOININGûWITHû 4HEûLOANûWILLûBEûUSEDûTOûRElNANCEûDEBT û arrangers are Bank of China, CTBC and Qatar 53MûORûABOVEûWILLûRECEIVEûAûTOP LEVELû and for general corporate purposes and National Bank ALL INûPRICINGûOFûBPûBASEDûONûANûUPFRONTû WORKINGûCAPITAL 4HEûONE YEARûREVOLVERûCARRIESûANû FEEûOFûBP ûWHILEûMANAGERSûTAKINGû 4HEûlVE YEARûDEALûCOMPRISESûAûõMû EXTENSIONûOPTIONûOFûANOTHERûYEAR ûANDûPAYSû 53MnMûWILLûRECEIVEûALL INûPRICINGûOFû TERMûLOANûANDûAûõMûMULTICURRENCYû ANûEXTENSIONûFEEûOFûBP BPûVIAûAûBPûFEE REVOLVINGûCREDITûFACILITY 4HEûLOANûPAIDûTOP LEVELûBLENDEDûTWO YEARû #HAILEASEû(OLDINGSû"ANGKOK BASEDûUNIT û 4HEûTERMûLOANûPAYSûANûINITIALûMARGINûOFû ALL INûPRICINGûOFûBPûOVERû,IBORûANDû ASIA SERMKIJ LEASING PUBLIC, is the borrower, 225bp over Euribor, then ratcheting on a BPûOVERû*IBORûBASEDûONûANûINTERESTû WHILEûTHEû4AIWANESEûPARENTûCOMPANYûISû leverage grid ranging between 175bp and MARGINûOFûBPûOVERû,IBORûANDûBPûOVERû PROVIDINGûAûLETTERûOFûSUPPORT BP *IBORûFORûTHEûlRSTûYEARû)NûYEARûTWO ûTHEû 0ROCEEDSûAREûFORûWORKINGûCAPITALû 4HEû2#&ûPAYSûANûINITIALûMARGINûOFûBPû MARGINûSTEPSûUPûTOûBPûOVERû,IBORûANDû PURPOSES OVERû%URIBOR,IBOR ûSUBSEQUENTLYûRATCHETINGû BPûOVERû*IBOR )Nû*ULY û#HAILEASEû(OLDINGSû#HINA BASEDû on a leverage grid ranging between 150bp The borrower is one of Indonesia’s unit CHAILEASE INTERNATIONAL FINANCE CORP ANDûBP LARGESTûPOULTRYûFEEDûMAKERSû)TûALSOû LAUNCHEDûAûTHREE YEARûLOANûOFûUPûTOû 4HEREûISûALSOûAûCOMMITMENTûFEEûOFûûOFû OPERATESûPOULTRYûFARMSûANDûPROCESSESû 53M THEûAPPLICABLEûMARGINûONû2#&ûUNDRAWNû CHICKENûMEAT "ANKû3INO0ACûANDû3TANDARDû#HARTEREDû FUNDS "ANKûAREûTHEû-,!"SûOFûTHEûBULLETû Bilateral guarantee facilities issued under TRANSACTION ûWHICHûHASûANûINITIALûSIZEûOFû THEû2#&ûPAYûBPûLESSûTHANûTHEûMARGINûWITHû SINGAPORE 53M AûBPûmOOR ,ENDERSûAREûBEINGûOFFEREDûAûTOP LEVELû #OVENANTSûINCLUDEûMAXIMUMûNETûDEBTûTOû WILMAR SIGNS US$200m SLL ALL INûPRICINGûOFûBPûBASEDûONûAûMARGINû %BITDAûOFûûTIMES OFûBPûOVERû,IBORûANDûAûBPûFEE Allied Irish Banks, Bank of America, Bank of !GRIBUSINESSûGROUPûWILMAR INTERNATIONAL 3EPARATELY û#HAILEASESû#AMBODIANûUNITû Ireland, Citigroup, Commerzbank, Credit HASûSIGNEDûAûTWO YEARû53Mû ISûALSOûSOUNDINGûTHEûMARKETûFORûAû53ûDOLLARû Agricole, Credit Industriel et Commercial, SUSTAINABILITY LINKEDûLOANûWITHûUnited LOANû4HEûTERMSûOFûTHEûBORROWINGûAREûYETûTOû Deutsche Bank, JP Morgan, Mizuho and UniCredit Overseas Bank BEûDETERMINED AREûPROVIDINGûTHEûlNANCING

International Financing Review September 19 2020 81

8 IFR Loans 2351 pXX-XX.indd 81 18/09/2020 19:08:47 7ILMINGTONû4RUSTûISûFACILITYûANDûSECURITYû )NDUSûHASûAûPORTFOLIOûOFûûCOMPANIES û 3AlLOSûAMENDEDûITSûlNANCINGûTOûINCLUDEû AGENT focused on construction and new covenants in line with the new (ENSOLDTûISûLOOKINGûTOûREPLACEûõBNûOFû INFRASTRUCTUREûAUTOMOTIVEûTECHNOLOGYû lNANCING ûWHILEûTHEûCOVENANTûTESTûFORû*UNEû ITSûLEVERAGEDûLOANSûCOMPRISINGûAûõMû MECHANICALûANDûPLANTûENGINEERINGû ûWASûCANCELLED TERMûLOANûMATURINGûINû&EBRUARYûûANDûAû MEDICALûENGINEERINGûANDûLIFEûSCIENCESûANDû %LECTRICALûSYSTEMSûCOMPANYûGRUPPO PSC õMû2#&ûMATURINGûINû&EBRUARYû û METALSûTECHNOLOGY HASûAGREEDûAûõMûLOANûWITHûAûGUARANTEEû WHICHûWASûFULLYûDRAWNûASûAûPRECAUTIONARYû FROMû3!#%ûTOûFUNDûINVESTMENTSûANDû MEASUREûDURINGûTHEû#OVID ûCRISIS OSRAM GETS €1.05bn FROM AMS WORKINGûCAPITAL 4HEûEXISTINGûTERMûLOANûPAYSûAûMARGINûOFû 4HEûSIX YEARûlNANCINGûHASûAûTWO YEARû BP BPûOVERû%URIBORûWHILEûTHEûEXISTINGû ,IGHTINGûCOMPANYûOSRAM has agreed a GRACEûPERIODûANDûWASûISSUEDûUNDERû)TALYSû 2#&ûPAYSûBP BPûOVERû%URIBOR,IBORû õBNûLOANûFROMûITSûPARENT û!USTRIANû LIQUIDITYûDECREEûTHATûAIMSûTOûMITIGATEûTHEû WITHûAûCOMMITMENTûFEEûOFûûOFûTHEû SENSORûMAKERû!-3 IMPACTûOFûTHEû#OVID ûCRISISûONûBUSINESSESû APPLICABLEûMARGINûONûUNDRAWNûFUNDS 4HEûARMS LENGTHûlNANCINGûCOMPRISESûAû INûTHEûCOUNTRY #OVENANTSûINCLUDEDûMAXIMUMûNETûDEBTûTOû õMûTERMûLOANûANDûAûõMûREVOLVINGû UniCredit ûASûFACILITYûAGENT ûANDûBanco %BITDAûOFûûTIMES CREDITûFACILITYû4HEûlNANCINGûISûFORûANûINITIALû BPM, Cassa Depositi e Prestiti and MPS Capital ++2ûACQUIREDû(ENSOLDT ûWHICHûWASûAûUNITû ûMONTHSûWITHûAûSIX MONTHûEXTENSIONû ServicesûAREûPROVIDINGûTHEûlNANCING OFû!IRBUS ûINû OPTION -ARGINSûRANGEûFROMûBPûTOûBPû INDUS PLACES ESG-LINKED SSD OVERû%URIBOR ûDEPENDINGûONû/SRAMSûDEBTû UK RATIO )NDUSTRIALûINVESTMENTûCOMPANYûINDUS There is also a 40bp upfront fee and a DRAX AGREES £160m LOANS HOLDINGûHASûPLACEDûAûõMû COMMITMENTûFEEûOFûûOFûTHEûAPPLICABLEû 3CHULDSCHEINDARLEHENûWITHûAûMARGINûLINKEDû MARGINûONûUNDRAWNûFUNDS ,OW CARBONûANDûRENEWABLEûPOWERû TOûTHEûCOMPANYSûSUSTAINABILITYûRATING !-3ûNOWûOWNSûAROUNDûûOFû/SRAMû generator DRAX GROUP has agreed around 4HEûlNANCING ûWHICHûWASûARRANGEDûBYû SHARESûAFTERûCOMPLETINGûITSûTAKEOVERûOFûTHEû aM EQUIVALENTûOFûINFRASTRUCTUREûTERMû Helaba ûWILLûBEûUSEDûFORûGENERALûlNANCING COMPANYûINû*ULYû4HEûACQUISITIONûWASû LOANSûTOûEXTENDûTHEûCOMPANYSûDEBTû 4HEû33$ûCOMPRISESûTRANCHESûOFûlVE ûSEVENû BACKEDûBYûAûõBNûBRIDGEûLOAN MATURITYûPROlLE ANDûûYEARS 4HATûlNANCING ûWHICHûCOMPRISEDûAû 4HEûlNANCINGûCOMPRISESûAûõMûLOANû (IGHûDEMANDûFROMûINVESTORS ûINCLUDINGû õBNûBRIDGE TO BONDûANDûAûõBNû MATURINGûINû ûAûõMûLOANûMATURINGû SAVINGSûBANKS ûCOMMERCIALûBANKSûANDû BRIDGE TO EQUITY ûWASûFULLYûUNDERWRITTENûBYû INû ûAûaMûLOANûMATURINGûINûûANDû INSTITUTIONALûINVESTORS ûSAWûTHEûlNANCINGû (3"# û5"3ûANDû"ANKûOFû!MERICAûINû!UGUSTû AûõMûLOANûMATURINGûINû INCREASEûFROMûõMûATûLAUNCH 4HEûLOANSûFEATUREûAûSIX MONTHûDELAYEDû )NTERESTûONûTHEû33$ûISûLINKEDûTOû)NDUSû 4HEREûWASûALSOûAûõMûTHREE YEARû2#&û DRAW ûAPARTûFROMûTHEûûFACILITY ûWHICHûISû SUSTAINABILITYûRATINGûBYû)33û%3' for general corporate purposes and AVAILABLEûTOûBEûDRAWNûUNTILû.OVEMBERû 4HEûCOMPANYûHASûh0RIMEvûSTATUSûANDûISû WORKINGûCAPITALûOFûTHEûCOMBINEDû 4HEûLOANSûPAYûANûAVERAGEûMARGINûOFû RATEDûh# vûINûCORPORATEû%3'ûPERFORMANCEû COMPANIES BPûOVERû%URIBOR,IBOR MAKINGûTHEûCOMPANYûONEûOFûTHEûTOPûûINû !-3ûHASûSINCEûISSUEDûBONDSûANDûEQUITYû There is an option to increase the THEûINTERNATIONALûPEERûGROUPûOFûlNANCIALS TOûSECUREûTHEûLONG TERMûlNANCINGûSTRUCTUREû lNANCINGûBYûaMûOFûFACILITIESûWITHû MULTI SECTORûHOLDINGS û)NDUSûSAID FORûTHEûACQUISITION MATURITIESûUPûTOû h3USTAINABILITYûHASûBEENûAûKEYûELEMENTûOFû 4OGETHERûWITHû$RAXSûaMû )NDUSûCORPORATEûSTRATEGYûFORûMANYûYEARS vû ENVIRONMENTAL ûSOCIALûANDûGOVERNANCEû 2UDOLFû7EICHERT ûMANAGEMENTûBOARDû ITALY FACILITYûTHATûWASûEXTENDEDûINû*UNEûBYûTHREEû MEMBERûRESPONSIBLEûFORûlNANCE ûSAID YEARSûTOû ûTHEûlNANCINGûREDUCESû$RAXSû h7ITHûTHEû%3' LINKEDûPROMISSORYûNOTEû SAFILO NETS STATE-BACKED LOAN ALL INûCOSTûOFûDEBTûBELOWû LOAN ûWEûAREûNOWûCONTINUINGûTHISûSTRATEGYû 4HEû%3'ûFACILITYûHASûAûMARGINûTIEDûTOû ALSOûWHEREûOURûlNANCINGûISûCONCERNEDv %YEWEARûCOMPANYûSAFILO has signed a $RAXSûCARBONûEMISSIONSûAGAINSTûANûANNUALû õMûTERMûLOANûBACKEDûWITHûAûû BENCHMARKûASûPARTûOFûTHEûCOMPANYSû EMEA LOANS BOOKRUNNERS – FULLY GUARANTEEûFROMûSTATE OWNEDû3!#%ûTHATûWILLû COMMITMENTûTOûREDUCINGûCARBONû SYNDICATED VOLUME BEûUSEDûFORûWORKINGûCAPITALûANDû EMISSIONS BOOKRUNNERS: 1/1/2020 TO DATE INVESTMENTûACTIVITIESûINû)TALYûDURINGûTHEû $RAXûISûAIMINGûTOûBECOMEûCARBONû Managing No of Total Share UNCERTAINTYûOFûTHEû#OVID ûCRISIS NEUTRALûBYû bank or group issues US$(m) (%) 4HEûlNANCINGûMATURESûONû*UNEûûû SPIRE GETS ANOTHER COV WAIVER 1 BNP Paribas 125 61,148.16 14.4 WITHûAûTHREE YEARûGRACEûPERIOD ûANDû 2 Credit Agricole 90 31,232.49 7.4 REPAYMENTûINûûQUARTERLYûINSTALMENTSû SPIRE 3 Santander 79 23,536.70 5.6 FROMû3EPTEMBERû Independent hospital group HEALTHCARE 4 JP Morgan 54 21,931.88 5.2 !RRANGERSûAREûBNP Paribas, ING, Intesa has secured another waiver of 5 Citigroup 49 20,793.63 4.9 Sanpaolo and UniCredit ûWHICHûISûALSOû3!#%û COVENANTSûONûITSûaMûLOANûlNANCINGûTOû 6 HSBC 66 19,601.05 4.6 COORDINATORûANDûFACILITYûAGENT GIVEûITûTHEûlNANCIALûmEXIBILITYûTOûCONTINUEû 7 UniCredit 98 19,482.04 4.6 4HEûlNANCINGûISûUNSECUREDûANDû TOûSUPPORTûTHEû.ATIONALû(EALTHû3ERVICEû 8 SG 55 19,056.32 4.5 RANKSûPARIûPASSUûWITHûTHEûCOMPANYSû DURINGûTHEû#OVID ûCRISIS 9 Deutsche Bank 68 18,881.56 4.5 õMûTERMûLOANûANDûREVOLVINGûCREDITû 4HEûNETûDEBT TO %BITDAûCOVENANTûANDû 10 Sumitomo Mitsui 40 14,120.26 3.3 FACILITY interest cover covenant has been waived for Total 523 423,215.74 4HEûOVERALLûCOSTûOFûTHEûNEWûTERMûLOANûISû THEû*UNEûûTESTûINûADDITIONûTOûPREVIOUSLYû

Proportional credit LOWERûTHANûTHEûCOSTûOFû3AlLOSûEXISTINGû AGREEDûWAIVERSûFORû*UNEûûANDû$ECEMBERû Source: Refinitiv SDC code: R17 DEBT ûTESTS

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!ûNEWûLIQUIDITYûTESTûREQUIRINGûCASHûANDû *OHNû,EWISûHASûALSOûEXTENDEDûTHEû CASHûEQUIVALENTS ûINCLUDINGûUNDRAWNû MATURITYûOFûAûaMûBILATERALû2#&ûBYûû CREDITûFACILITIES ûTOûBEûABOVEûaM ûWILLû MONTHSûTOû3EPTEMBERû NORTH AMERICA TEMPORARILYûREPLACEûTHEûCOVENANTS #OVENANTSûONûBOTHûTHEûSYNDICATEDû2#&û &ORû$ECEMBERû ûTHEûAMENDMENTû ANDûTHEûBILATERALû2#&ûHAVEûALSOûBEENû ALLOWSûFORûMAXIMUMûLEVERAGEûRATIOûOFûû RENEGOTIATEDûONûMOREûFAVOURABLEûTERMS û UNITED STATES TIMESûIFûTHEûRATIOûHASûNOTûALREADYûREDUCEDû THEûCOMPANYûSAID TOûBELOWûûTIMES )NûRESPONSEûTOûTHEû#OVID ûCRISIS ûTHEû ADTALEM TAPS FOR WALDEN The waiver will provide Spire with the COMPANYûSECUREDûANDûDREWûaMûFROMû NECESSARYûHEADROOMûTOûSUPPORTûTHEû.(3û THEû"ANKûOFû%NGLANDSû#OVIDû#ORPORATEû 7ORKFORCEûEDUCATIONûPROVIDERûADTALEM FORûLONGERûTHANûWASûINITIALLYûENVISAGED &INANCINGû&ACILITYû4HEû##&&ûFUNDSûMATUREû GLOBAL EDUCATIONûISûLININGûUPûAû53BNû 3PIRESûlNANCINGûCOMPRISESûAûaMû INû-ARCHûûBUTûCANûBEûEXTENDEDûBYû LOANûlNANCINGûTOûBACKûITSûACQUISITIONûOFû TERMûLOANûANDûANûUNDRAWNûaMû ANOTHERûYEAR online healthcare education provider REVOLVINGûCREDITûFACILITYû4HEûMATURITYûOFû 4HEûCOMPANYûALSOûAGREEDûTWOûTERMû 7ALDENû5NIVERSITYûFROMû,AUREATEû%DUCATION THEûlNANCINGûHASûBEENûEXTENDED LOANSûOFûaMûEACH ûMATURINGûINû 4HEûSENIORûSECUREDûlNANCINGûCOMPRISESûAû 4HEûTERMûLOANûHASûBEENûEXTENDEDû .OVEMBERûûANDû$ECEMBERû ûANDû 53BNûSEVEN YEARûTERMûLOAN ûAû53Mû BYûONEûYEARûTOû*ULYû ûWHILEûTHEû RAISEDûAROUNDûaMûFROMûTHEûSALEûANDû lVE YEARûREVOLVINGûCREDITûFACILITYûANDûANûUPû 2#&ûWILLûREMAINûATûaMûUNTILû*ULYû LEASEBACKûOFûû7AITROSEûSTORES TOû53MûBRIDGEûLOAN ûBEFOREûREDUCINGûTOûaMûTOû 4HOSEûlNANCINGS ûALONGûWITHûOTHERû !DTALEMûPLANSûTOûTAKEûOUTûTHEûBRIDGEûLOANû MATURITYûINû*ULYû operational cash preservation actions, saw WITHû53MûOFûSENIORûSECUREDûBONDS ,ENDERSûINCLUDEû"ANKûOFû!MERICA û#REDITû THEûCOMPANYSûLIQUIDITYûINCREASEûTOûAROUNDû 0ROCEEDSûWILLûBEûUSEDûTOûlNANCEûTHEû !GRICOLE û(3"# û*0û-ORGAN û,LOYDSû"ANK û aBNûASûOFû*ULYû ûAûûINCREASEûFROMû ACQUISITION ûRElNANCEû!DTALEMSûLOANS ûANDû -5&' û-IZUHOû"ANKûANDû.AT7EST *ANUARY ûPROVIDINGûITûWITHûMOREûHEADROOMû PAYûFEESûANDûEXPENSESûRELATEDûTOûTHEû /NLINEûGAMINGûCOMPANYûPLAYTECH has TOûHELPûNAVIGATEûTHEûCRISIS ACQUISITIONû4HEû2#&ûWILLûBEûUSEDûFORûGENERALû AMENDEDûCOVENANTSûONûITSûõMû2#&ûASûAû CORPORATEûPURPOSES ûINCLUDINGûWORKINGû PRECAUTIONARYûMEASUREûDURINGûTHEû#OVID AVON RUBBER DETAILS RCF CAPITAL ûCRISIS 4HEûTERMûLOANûPAYSûANûINITIALûMARGINûOFû 4HEûLEVERAGEDûCOVENANTûWASûAMENDEDûTOû $ETAILSûHAVEûEMERGEDûONû!VONû2UBBERSû BPûOVERû,IBOR ûWHILEûTHEû2#&ûPAYSûANû AûMAXIMUMûûTIMESûFORûTHEû$ECEMBERû 53MûREVOLVINGûCREDITûFACILITYûBACKINGû INITIALûMARGINûOFûBPûOVERû,IBOR ûTEST ûREDUCINGûTOûûTIMESûFORûTHEû ITSû53MûACQUISITIONûOFû53ûHELMETû -ARGINSûONûTHEûTWOûFACILITIESûSTEPûDOWNûBYû *UNEûûTESTû-EANWHILE ûTHEûINTERESTû SUPPLIERû4EAMû7ENDY BPûIFûLEVERAGEûLEVELSûFALLûBYûûTIMESûANDû COVERûCOVENANTûWASûAMENDEDûTOûAû 0ROCEEDSûWILLûALSOûRElNANCEûTHEû BYûûTIMESûFROMûCLOSINGûLEVERAGE MINIMUMûûTIMESûFORûTHEû$ECEMBERû COMPANYSû53Mû2#& ûWHICHûMATURESûINû 4HEûBRIDGEûLOANûHASûANûINITIALûONE YEARû ûTEST ûRISINGûTOûûTIMESûFORûTHEû*UNEû *UNEû MATURITY ûAFTERûWHICHûITûMAYûBEûCONVERTEDû ûTEST 4HEûMULTICURRENCYûFACILITYûHASûANûINITIALû INTOûANûEIGHT YEARûTERMûLOAN The covenants will return to the THREE YEARûMATURITYûWITHûTWOûONE YEARû 4HEûBRIDGEûLOANûMARGINûSTARTSûATûBPû PREVIOUSûLEVELSûOFûûTIMESûANDûûTIMES û EXTENSIONûOPTIONS OVERû,IBOR ûRISINGûBYûANûADDITIONALûBPû RESPECTIVELYûFROMûTHEû$ECEMBERûûTESTû 4HEûINITIALûMARGINûONûTHEû2#&ûISûBPû EVERYûTHREEûMONTHSûAFTERûCLOSING ûUPûTOûAû DATE ûORûSOONERûIFû0LAYTECHûDECIDESûTOûPAYû OVERû,IBORûUNTILûTHEûENDûOFû3EPTEMBERû PRE AGREEDûCAP SHAREHOLDERûDIVIDENDS WHENûTHEûMARGINûISûTIEDûTOûAûLEVERAGE Morgan StanleyûISûSOLEûADMINISTRATIVEû 'IVENûTHEûONGOINGûUNCERTAINTYûRELATEDû BASEDûGRIDû agent along with Barclays, Credit Suisse and TOûTHEûCRISIS û0LAYTECHûSUSPENDEDû &ORûûTIMESûORûMOREûITûISûBPûOVERû MUFG ASûJOINTûBOOKRUNNERSûANDûJOINTûLEADû SHAREHOLDERûDISTRIBUTIONSûINû&EBRUARYûUNTILû ,IBORûFORûLESSûTHANûûTIMESûITûISûBPûFORû ARRANGERS FURTHERûNOTICE LESSûTHANûûTIMESûITûISûBPûFORûLESSûTHANû !DTALEMûISûACQUIRINGû7ALDENû5NIVERSITYû 4HEûCOVENANTSûWEREûAMENDEDûDESPITEû ûTIMESûITûISûBPûANDûFORûLESSûTHANûû FORû53BNûINûCASH ûWHICHûWILLûBEûFUNDEDû 0LAYTECHûBEINGûCOMFORTABLYûWITHINûTHEû TIMEûITûISûBP through cash on balance sheet and the debt RATIOS ûTHEûCOMPANYûSAID 4HEREûISûAû53MûACCORDIONûFACILITY lNANCING 4HEûCOMPANYûDREWûDOWNûõMûONû Fifth Third Bank, Barclays, Comerica Bank 4HEûACQUISITIONûISûEXPECTEDûCLOSEûINûTHEû THEû2#&ûTOûSTRENGTHENûITSûLIQUIDITYûDURINGû and NatWest AREûMANDATEDûLEADûARRANGERS û COMPANYSûlSCALûlRSTûQUARTERûOFû ûINû THEûCRISIS while Bank of Ireland and CIC AREûARRANGERSû MID CALENDARûYEARû .AT7ESTûISûFACILITYûAGENT JOHN LEWIS GETS PARTIAL 4HEû2#&ûWILLûFUNDûTHEûTRANSACTIONûIFûTHEû STANLEY BLACK & DECKER NAILS RCF EXTENSION ACQUISITIONûCOMPLETESûBEFOREû!VONûHASû COMPLETEDûTHEûaMûSALEûOFûITSû-ILKRITEû 4OOLûMAKERûSTANLEY BLACK & DECKER has agreed $EPARTMENTûSTOREûOPERATORûJOHN LEWIS )NTER0ULSûMILKINGûEQUIPMENTûUNIT Aû53BNû DAYûREVOLVINGûCREDITûFACILITYû HASûEXTENDEDûTHEûMATURITYûOFûaMû /NCEûTHEûSALEûHASûCOMPLETED ûTHEû2#&û THATûREPLACESûAû53BNûFACILITYûARRANGEDûINû OFûITSûaMûSYNDICATEDûREVOLVINGû WILLûBEûUSEDûTOûFUNDû!VONû2UBBERSû 3EPTEMBERû CREDITûFACILITYûBYûONEûYEARûTOû.OVEMBERû MEDIUM TERMûGROWTHûOBJECTIVES ûINCLUDINGû 0ROCEEDSûWILLûBEûUSEDûFORûGENERALû lNANCINGûPOTENTIALûACQUISITIONS CORPORATEûPURPOSES 4HEûREMAININGûaMûOFûTHEû2#&ûWILLû !VONSû2#&ûWASûORIGINALLYûAGREEDû 4HEûlNANCINGûMAYûBEûEXTENDEDûBYûAûYEARû MATUREûINû.OVEMBERû INû*UNEûûVIAû"ARCLAYSûANDû#OMERICAû AFTERûCONVERTINGûINTOûAûTERMûLOAN 4HEû2#&ûWASûORIGINALLYûPUTûINûPLACEûINû "ANK "ORROWINGSûUNDERûTHEûlNANCINGûCANûBEû .OVEMBERûûVIAû"ARCLAYS û".0û0ARIBAS û !VONû2UBBERûMAKESûBREATHINGû DRAWNûINû53ûDOLLARSûORûEUROS (3"# û*0û-ORGAN û,LOYDSû"ANK û.AT7ESTû EQUIPMENTûANDûBODYûARMOURûFORûMILITARYû 4HEûlNANCINGûPAYSûAûMARGINûTIEDûTOûAû ANDû3VENSKAû(ANDELSBANKEN ANDûEMERGENCYûSERVICEûWORKERS RATINGSûGRIDûWITHûAûZEROû,IBORûmOOR

International Financing Review September 19 2020 83

8 IFR Loans 2351 pXX-XX.indd 83 18/09/2020 19:08:48 &ORû! !! ûTHEûMARGINûISûBPûOVERû,IBORû Bank of America ISûADMINISTRATIVEûAGENTû CAPITAL ûPAYSûAûMARGINûOFûBPûOVERû WITHûAûBPûCOMMITMENTûFEEûFORû!!!ûITûISû Citigroup, Royal Bank of Canada, Credit Suisse, ,IBORûWITHûAûBPûSTEP DOWNûIFû BPûANDûBPûFORû! !! ûITûISûBPûANDû MUFG, Mizuho Bank, Natixis, HSBC, Jefferies, lRST LIENûLEVERAGEûISûLESSûTHANûORûEQUALû BPûFORû""" "AA""" ûITûISûBPûANDû Macquarie and Wells FargoûASûJOINTûLEADû TOûûTIMES BPûANDûFORûLOWERûTHANû""" "AA""" ûORû ARRANGERSûANDûJOINTûBOOKRUNNERS 4HEûlVE YEARû2#&ûWASûPUTûINûPLACEûONû NOTûRATEDûITûISûBPûANDûBP Citizens Bank, HL Finance and SMBC are !PRILûûASûPARTûOFûAûWIDERûlNANCING û )FûTWOûOFûTHEûRATINGSûAREûATûTHEûSAMEûLEVELû SENIORûMANAGINGûAGENTS INCLUDINGûAû53BNûSEVEN YEARûTERMûLOANû and the other rating is higher or lower than 4HEûMOVEûCOMESûAFTERû$"ûRAISEDû ANDûAû53BNûBRIDGEûLOANûBACKINGû THOSE ûTHEûLEVELûOFûTHEûTWOûSAMEûRATINGSû 53BNûINûANû)0/ ûWHICHûCLOSEDûINû*ULY 4 -OBILEû53!SûACQUISITIONûOFû3PRINTû#ORP applies, but if all three ratings are at $"ûREPRICEDûITSû53BNûTERMûLOANû"ûINû #REDITû3UISSE û"ARCLAYS û$EUTSCHEû"ANK û different levels, then the level of the rating &EBRUARYûATûBPûWITHûAûûmOORûANDûNOû 'OLDMANû3ACHS û-ORGANû3TANLEY û2"#û level between the highest and lowest /)$ #APITALû-ARKETS û".0û0ARIBAS û APPLIES 4HEû4,"ûMATURESûINû&EBRUARYû #OMMERZBANK û#REDITû!GRICOLE û4$û"ANK û 3TANLEYû"LACKûû$ECKERûISûRATEDû!ûBYû30 û 7ELLSû&ARGO û3ANTANDER û3OCIETEû'ENERALE û "AAûBYû-OODYSûANDû! ûBYû&ITCH ALIGNED SIGNS US$1bn SLL 3UN4RUST û.AT7ESTûANDû53û"ANKûARRANGEDû ,ASTûYEARSûlNANCINGûFEATUREDûPRICINGû THEûlNANCING BASEDûONûTHEûCOMPANYSû#$3ûLEVELS û Data centre operator ALIGNED ENERGY has /Nû!PRILû û4 -OBILEûRAISEDû53BNûINû INCORPORATINGûmOORSûANDûCAPS signed a US$1bn senior secured loan with THEûINVESTMENT GRADEûBONDûMARKETûACROSSû Citigroup ISûADMINISTRATIVEûAGENTûONûTHEû MARGINSûLINKEDûTOûTHEûCOMPANYSû lVEûTRANCHESûOFûDEBTûTOûSUPPORTûTHEû NEWûFACILITY ûALONGûWITHûBank of America, JP ENVIRONMENTAL ûSOCIALûANDûGOVERNANCEû ACQUISITION Morgan and Wells Fargo as lead arrangers and GOALS BOOKRUNNERS ûEACHûCOMMITTINGû53M 4HEûlNANCING ûWHICHûISûTHEûlRSTû53ûDATAû Barclays, Credit Suisse, Deutsche Bank, CENTREûSUSTAINABILITY LINKEDûLOAN ûPROVIDESû Goldman Sachs and Royal Bank of Canada each !LIGNEDûWITHûADDITIONALûCAPITALûTOû COMMITTEDû53M ûWHILEûMorgan Stanley ACCELERATEûCORPORATE ûCUSTOMERûANDû LEVERAGED LOANS COMMITTEDû53M COMMUNITY RELATEDûSUSTAINABILITYû MUFG COMMITTEDû53M ûANDûBNP INITIATIVESûASûWELLûASûSHORTûANDûLONG TERMû Paribas, HSBC, SEB, Bank of New York Mellon and GROWTHûOBJECTIVES UNITED STATES US Bank COMMITTEDû53M 4HEû3,,ûCOMPRISESûAû53MûTERMûLOAN û ING, Truist Bank and Bank of Nova Scotia Aû53MûDELAYED DRAWûTERMûLOANûANDûAû DELTA WRAPS SKYMILES-BACKED LOAN COMMITTEDû53M 53MûREVOLVINGûCREDITûFACILITY TD Securities ISûADMINISTRATIVEûANDû DELTA AIR LINESûHASûlNALISEDûTHEûTERMSûONûAû D&B UPS RCF TO US$850m COLLATERALûAGENTûONûTHEûlNANCINGûALONGûWITHû LOANûTHATûWILLûBEûBACKEDûBYûTHEûCOMPANYSû Goldman SachsûASûSYNDICATIONûAGENTûANDûING LOYALTYûPROGRAMû3KY-ILES $ATAûANDûANALYTICSûPROVIDERûDUN & ASûSUSTAINABILITYûCOORDINATOR 4HEûSEVEN YEARûLOAN ûLEDûBYûBarclays, was BRADSTREET increased its senior secured Citizens Bank, Deutsche Bank and Nomura are UPSIZEDûTOû53BNûFROMû53BNûAFTERû REVOLVINGûCREDITûFACILITYûTOû53MûFROMû BOOKRUNNERSûANDûLEADûARRANGERS STRONGûDEMANDûFROMûINVESTORSûFORûNEWû 53M -ARGINSûAREûTIEDûTOû!LIGNEDSû%3'ûANDûKEYû MONEYûOPPORTUNITIESûSEEû4OPû.EWS 4HEûMATURITYûOFûTHEû2#&ûHASûALSOûBEENû PERFORMANCEûINDICATORS ûWHICHûINCLUDEû 4HEûMARGINûWASûTIGHTENEDûTOûBPûOVERû RESETûTOûlVEûYEARSûTOû3EPTEMBERûû USINGûûZERO CARBONûRENEWABLEûENERGYû ,IBORûFROMûGUIDANCEûOFûBPûTOûBPû 0RICINGûISûBASEDûONûSENIORûSECUREDû BYûûAûCOMMITMENTûTOûTRANSPARENCYûANDû OVERû,IBOR ûWHILEûTHEû/)$ûWASûTWEAKEDûTOû LEVERAGEû&ORûûTIMESûORûLOWERûTHEûMARGINû THEûCONTINUOUSûIMPROVEMENTûINû ûFROMû ISûBPûOVERû,IBORûWITHûAûBPû SUSTAINABILITYûREPORTINGûANDûAûCOMMITMENTû !ûûmOORûREMAINSûUNCHANGED ûASûDOESû COMMITMENTûFEEûFORûûTIMESûORûLOWERûITûISû TOûWORKPLACEûSAFETY THEûCALLûPROTECTION ûWHICHûISûNON CALLABLEû BPûANDûBPûANDûFORûHIGHERûTHANûû %ARLIERûTHISûYEAR ûTHEûCOMPANYûINCREASEDû FORûTHEûlRSTûTHREEûYEARS ûTHENûCALLABLEûATû TIMESûITûISûBPûANDûBP ITSûCOMMITMENTûTOûENVIRONMENTALû ûINûYEARûFOUR ûûINûYEARûlVEûANDûTHENû SUSTAINABILITYûBYûMATCHINGûûOFûTHEû)4û CALLABLEûATûPARûTHEREAFTER AMERICAS LOANS BOOKRUNNERS – FULLY loads across its data centre portfolio with This gives the loan a weighted average SYNDICATED VOLUME CERTIlEDûRENEWABLEûENERGY LIFEûOFûROUGHLYûûYEARS BOOKRUNNERS: 1/1/2020 TO DATE !LIGNEDûWASûALSOûNAMEDûAûû'REENû $ELTAûISûRATEDû"AAûBYû-OODYSûANDûTHEû Managing No of Total Share ,EASEû,EADERûBYûTHEû53û$EPARTMENTûOFû lRST LIENûLOANûISûRATEDû"AA bank or group issues US$(m) (%) %NERGYSû"ETTERû"UILDINGSû!LLIANCEûANDûTHEû The loan, along with US$6bn in senior 1 Bank of America 667 169,056.10 12.9 )NSTITUTEûFORû-ARKETû4RANSFORMATION secured notes, will fund general corporate 2 JP Morgan 575 163,406.29 12.5 PURPOSESûANDûBOLSTERûLIQUIDITY T-MOBILE USA INCREASES RCF 3 Citigroup 322 111,054.53 8.5 $ELTAûANDû3KY-ILESû)0ûWILLûBEûTHEûCO 4 Wells Fargo 416 95,500.72 7.3 BORROWERSûOFûTHEûLOAN T-MOBILE USA 5 Barclays 194 42,716.18 3.3 -OBILEûPHONEûOPERATORû has 2EVENUESûFROMû3KY-ILESûANDûITSû 6 Goldman Sachs 183 41,934.66 3.2 INCREASEDûTHEûREVOLVINGûCREDITûFACILITYû2#& û subsidiaries will be deposited into a 7 Morgan Stanley 110 39,112.26 3.0 ITûSIGNEDûINû!PRILûBYû53BNûTOû53BN collection account pledged to secure the 8 RBC 184 37,591.18 2.9 Deutsche Bank ISûADMINISTRATIVEûAGENTûONû ISSUANCEûOFûTHEûBONDSûANDûLOANûONûAûlRST 9 Credit Suisse 136 36,173.89 2.8 THEûlNANCING ûWHILEûINCREMENTALûLENDERSûAREû LIENûBASIS 10 US Bancorp 228 34,324.11 2.6 Citigroup, JP Morgan, Mizuho Bank, MUFG and !MOUNTSûINûTHEûCOLLECTIONûACCOUNTûWILLû Total 2,234 1,312,316.64 SMBC PAYûAGENTSûFEESûANDûEXPENSES ûINTERESTûANDû

Proportional credit 4HEû2#& ûWHICHûISûUSEDûFORûGENERALû QUARTERLYûAMORTISATIONûANDûFUNDûAûDEBTû Source: Refinitiv SDC code: R7 CORPORATEûPURPOSESûINCLUDINGûWORKINGû SERVICEûRESERVEûACCOUNT

84 International Financing Review September 19 2020

8 IFR Loans 2351 pXX-XX.indd 84 18/09/2020 19:08:48 LEVERAGED LOANS

$ELTAûMUSTûALSOûMAINTAINûATûLEASTû UNVEILEDûTHEûTERMSûOFûAû53BNûLOANû 0ROCEEDSûFROMûTHEûINCREMENTALûDEBTûANDû 53BNûINûLIQUIDITY THATûITûWILLûUSEûTOûRElNANCEûDEBT THEûREVOLVERûWILLûRElNANCEûANûOUTSTANDINGû )Nû!PRIL û$ELTAûRAISEDû53BNûOFûSECUREDû 4HEûlVE YEARûLOANûISûBEINGûSHOPPEDûATû SECOND LIENûLOAN DEBTûACROSSûTHEûBONDûANDûLOANûMARKETSûTOû BPnBPûOVERû,IBORûWITHûAûûmOOR ûAû #ORPORATEûANDûISSUEûRATINGSûAREû"" û SHOREûUPûITSûLIQUIDITYûAFTERûTHEûCORONAVIRUSû û/)$ûANDûûSOFT CALLûPROTECTIONûFORûSIXû WITHûAûSTABLEûOUTLOOK PANDEMICûSLASHEDûDEMANDûFORûPASSENGERûAIRû MONTHS Goldman Sachs, HSBC, Citigroup, Deutsche TRAVEL KKR Capital Markets ISûLEADINGûTHEûDEAL Bank, Morgan Stanley and BNP Paribas are 4HEûCOMPANYûRAISEDû53BNûINûBONDSû #ORPORATEûRATINGSûAREû"" ARRANGINGûTHEûlNANCINGû'OLDMANû3ACHSûISû ANDûAû53BNûLOAN 4HEûLOAN ûALONGûWITHû53MûINûlVE ALSOûTHEûAGENTûBANK 4HEûTHREE YEARûLOANûWASûOFFEREDûATûBPû YEARûSENIORûSECUREDûNOTES ûWILLûRElNANCEû 0RIVATEûEQUITYûlRMûAMERICAN SECURITIES OVERû,IBORûANDûWASûSECUREDûAGAINSTûTAKE OFFû '-2SûEXISTINGûlRST LIENûLOANûMATURINGûINû HASûPROPOSEDûTERMSûFORûITSû53MûLOANû and landing slots at airports in the US, PACKAGEûTOûFUNDûITSûACQUISITIONûOFûNN@Sû,IFEû %UROPEûANDû,ATINû!MERICA 0ROûFORMAûFORûTHEûlNANCING û'-2ûWILLû 3CIENCESûDIVISION %NTERPRISEûSOFTWAREûCOMPANYûHYLAND HAVEûAûûTIMESûNETûlRST LIENûLEVERAGEûRATIOû 4HEû53MûTERMûLOANûPORTIONûISû SOFTWAREûHASûLAUNCHEDûAû53Mû ANDûûTIMESûNETûTOTALûLEVERAGEûRATIO OFFEREDûATûBPnBPûOVERû,IBORûWITHûAû INCREMENTALûLOANûTHATûWILLûBEûUSEDûTOû '-2Sû53BNûEXISTINGûLOANûDUEûINû ûmOORûANDûAûû/)$û)TûCARRIESûûSOFT SUPPORTûTHEûACQUISITIONûOFûCONTENTûSERVICESû ûPAYSûBPûOVERû,IBOR CALLûPROTECTIONûFORûSIXûMONTHS PROVIDERû!LFRESCO $ATAûANDûINFORMATIONûPROVIDERûCLARIVATE 4HEREûISûALSOûAû53MûREVOLVINGûCREDITû 4HEûLOANûISûOFFEREDûATûBPûOVERû,IBORû OUTLINEDûTHEûTERMSûOFûAû53BNû FACILITY WITHûAûBPûSTEP DOWNûONCEûTHEûlRST LIENû INCREMENTALûLOAN Jefferies, KeyBanc, Goldman Sachs and ING NETûLEVERAGEûRATIOûHITSûûTIMES The loan is offered at 300bp–325bp over AREûARRANGINGûTHEûDEAL The debt is also being shopped with a ,IBORûWITHûAûûmOOR ûAûû/)$ûANDûûSOFT !MERICANû3ECURITIESûACQUIREDûTHEû û,IBORûmOOR ûAûnû/)$ûANDûû CALLûPROTECTIONûFORûSIXûMONTHS COMPANYûINûAû53MûDEALûANNOUNCEDû SOFT CALLûPROTECTIONûFORûSIXûMONTHS 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEû LASTûMONTH Credit Suisse, Goldman Sachs, UBS, KKR ROUGHLYû53BNûINûDEBT 4HEûCOMPANYûWILLûENTERûINTOûAûMASTERû Capital Markets and Stone Point Capital Citigroup, Bank of America, RBC Capital SERVICEûAGREEMENTûWITHûTHEûPRIVATEûEQUITYû Markets AREûARRANGINGûTHEûDEAL Markets, Barclays, HSBC and JP Morgan are lRMSûEXISTINGûPORTFOLIOûCOMPANYû-7û 4HEûINCREMENTALûLOANûWILLûMATUREû ARRANGINGûTHEûDEAL )NDUSTRIES ûAûMAKERûOFûENGINEEREDûSPRINGû ALONGSIDEûANûEXISTINGûFACILITYûDUEûINû*ULYû 4HEûDEBTûWILLûBEûATTACHEDûTOûANûEXISTINGû PARTSû"OTHûWILLûBEûOPERATEDûANDûlNANCEDû FACILITYûMATURINGûINû/CTOBERû INDIVIDUALLY #ORPORATEûRATINGSûAREû""n )Nû&EBRUARY û#LARIVATEûRAISEDûAû53Mû (OTELûOPERATORûAIMBRIDGE HOSPITALITY has 4HEûEXISTINGûLOANSûMARGINûWILLûBEûRESETû INCREMENTALûLOANûATûBPûOVERû,IBORûANDû LAUNCHEDûAû53MûINCREMENTALûLOANû TOûBPûOVERû,IBOR ûINûLINEûWITHûTHISûLATESTû NOûmOOR that it will use to fund general corporate INCREMENTALûFACILITY ûFROMûBP )Nû/CTOBERû û#LARIVATEûlNALISEDûTHEû PURPOSES )Nû!UGUSTû û(YLANDûlNALIZEDûAûTWO ORIGINALû53MûSEVEN YEARûLOANûATûBPû The JP Morgan LEDûLOANûISûOFFEREDûATû PARTû53MûINCREMENTALûDEBTûPACKAGE OVERû,IBOR BPûOVERû,IBORûWITHûAûûmOOR ûAû (YLANDûISûSPONSOREDûBYûPRIVATEûEQUITYû nû/)$ûANDûûSOFT CALLûPROTECTIONûFORû lRMû4HOMAû"RAVO VISTRA TO PAY UP FOR A&E SIXûMONTHS 4HEûINCREMENTALûLOANûWILLûBEûNON PCI PHARMA EYES BUYOUT LOAN Trust and custodial services provider VISTRA FUNGIBLEûWITHûANûEXISTINGûLOANûMATURINGûINû ISûSETûTOûPAYûUPûFORûANûAMENDûANDûEXTENDûOFû &EBRUARYû 0HARMACEUTICALûPACKAGINGûANDûDISTRIBUTIONû Aû4ERMû,OANû" #ORPORATEûRATINGSûAREû"### ûANDûTHEû COMPANYûPCI PHARMAûOUTLINEDûTHEûTERMSûONû 4HEûCOMPANYûISûSEEKINGûTOûEXTENDûTHEû lRST LIENûLOANûISûRATEDû"### Aû53MûlRST LIENûLOAN MATURITYûOFûAû4," ûWHICHûCOMPRISESûAû -OODYSûDOWNGRADEDû!IMBRIDGEûTOû"û 4HEûSEVEN YEARûLOANûISûBEINGûOFFEREDûATû 53MûTRANCHEûANDûAûõMûTRANCHE ûBYû FROMû"ûANDûITSûlRST LIENûLOANûTOû"ûFROMû BPnBPûOVERû,IBORûWITHûAûûmOOR ûAû THREEûYEARSûTOû/CTOBERû B1 due to the slowdown in the travel and û/)$ûANDûûSOFT CALLûPROTECTIONûFORûSIXû )NûEXCHANGE ûPRICINGûOFûTHEûDOLLARûANDû HOSPITALITYûINDUSTRIESûCAUSEDûBYûTHEû MONTHS euro tranches will increase and is guided CORONAVIRUSûPANDEMIC ûTHEûRATINGSûAGENCYû 4HEûMARGINûWILLûSTEPûDOWNûBYûBPûONCEû INûAûRANGEûOFûBPnBPûOVERû,IBOR SAIDûINûAûREPORTûONû-ARCHû lRST LIENûNETûLEVERAGEûREDUCESûBYûûTIMESû %URIBOR ûFROMûEXISTINGûMARGINSûOFûBPû )Nû/CTOBERûLASTûYEAR û!IMBRIDGEûAGREEDûAû FROMûTHEûLEVELûITûISûATûWHENûTHEûlNANCINGû ANDûBP ûRESPECTIVELY 53MûFUNGIBLEûADD ONûLOANûTOûTHEûSAMEû CLOSES !Nû/)$ûFORûBOTHûTRANCHESûISûGUIDEDûATû FACILITYûATûBPûOVERû,IBORûWITHûNOûmOOR 4HEREûWILLûBEûAûFURTHERûBPûSTEP DOWNûINû !ûûmOORûONûTHEûDOLLARûTRANCHEûANDûAûû )Nû*ANUARYû ûTHEûCOMPANYûRAISEDûTHEû PRICINGûIFûTHEûCOMPANYûCOMPLETESûANû)0/ mOORûONûTHEûEUROûTRANCHEûWILLûREMAINû ORIGINALû53MûSEVEN YEARûLOANûTHATû 0#)û0HARMAûISûALSOûRAISINGûAû53Mû UNCHANGED SUPPORTEDûTHEûCOMPANYSûBUYOUTûBYû REVOLVINGûCREDITûFACILITYûANDûAû53Mû The euro tranche has changed to a bullet PRIVATEûEQUITYûlRMû!DVENTû)NTERNATIONAL EIGHT YEARûSECOND LIENûLOANûTHATûHASûBEENû REPAYMENT ûFROMûAûPREVIOUSûû PRIVATELYûPLACED AMORTISATION4HEûDOLLARûTRANCHEûWILLû NETSMART MARKETS US$1bn DEAL 0ROCEEDSûOFûTHEûlNANCINGûWILLûFUNDûTHEû CONTINUEûTOûAMORTISEûATûûPERûANNUM COMPANYSûACQUISITIONûBYûPRIVATEûEQUITYû 3OFT CALLûPROTECTIONûOFûûWILLûBEûRESETû (EALTHCAREûSOFTWAREûCOMPANYûNETSMART lRMû+OHLBERGûû#OMPANY FORûAûFURTHERûSIXûMONTHS TECHNOLOGIESûHASûDETAILEDûTHEûTERMSûOFûAû Jefferies, Credit Suisse, Deutsche Bank and 6ISTRAûWILLûALSOûRAISEûROUGHLYû53M 53BNûDEBTûlNANCING Antares AREûARRANGINGûTHEûDEALû EQUIVALENTûINûINCREMENTALûDEBTûACROSSûBOTHû 4HEûTRANSACTIONûCOMPRISESûAû53Mû 4RANSPORTATIONûANDûEMERGENCYûRESPONSEû LOANûTRANCHESûANDûDRAWû53MûFROMûANû TERMûLOANûANDûAû53MûREVOLVINGûCREDITû COMPANYûGLOBAL MEDICAL RESPONSE has EXISTINGûREVOLVINGûCREDITûFACILITY FACILITY

International Financing Review September 19 2020 85

8 IFR Loans 2351 pXX-XX.indd 85 18/09/2020 19:08:48 4HEûSEVEN YEARûTERMûLOANûISûBEINGû )NûADDITIONûTOûTHEûLOANûlNANCING ûTHEû LOANûTHATûWILLûSUPPORTûITSûACQUISITIONûBYû OFFEREDûATûBPnBPûOVERû,IBORûWITHûAû COMPANYûISûALSOûEXPECTEDûTOûRAISEû PRIVATEûEQUITYûCOMPANYû4OR1UESTû0ARTNERSû ûmOOR ûAûnû/)$ûANDûûSOFT CALLû 53MûINûTHEûBONDûMARKETûTOûHELPû ANDû#ANADIANûPENSIONûFUNDû#AISSEûDEû PROTECTIONûFORûSIXûMONTHS RElNANCEûDEBT DEPOTûETûPLACEMENTûDUû1UEBEC Goldman Sachs is leading the deal, which '#)û,IBERTYSûTERMûLOANûMATURINGûINû 4HEûSEVEN YEARûLOANûISûBEINGûOFFEREDûATû WILLûREPAYûlRSTûANDûSECOND LIENûLOANS ûANDû &EBRUARYûûPAYSûBPûOVERû,IBORûWITHû BPûTOûBPûOVERû,IBORûWITHûAûû FUNDûANûACQUISITION NOûmOOR mOOR ûAûû/)$ûANDû SOFTûCALLûPROTECTIONû #ORPORATEûRATINGSûAREû""n )Nû!UGUST û'#)û,IBERTYûAGREEDûAûDEALû FORûSIXûMONTHS )Nû!PRILû û.ETSMARTûRAISEDûAû WHEREBYû,IBERTYû"ROADBANDûWILLûACQUIREû Credit Suisse, BMO Capital Markets and KKR 53MûSEVEN YEARûlRST LIENûLOAN ûAû '#)û,IBERTYûINûAûSTOCK FOR STOCKûTRANSACTION Capital Markets AREûARRANGINGûTHEûlNANCING 53Mû YEARûSECOND LIENûLOANûANDûAû ,IBERTYû"ROADBANDSûBUSINESSûCOMPRISESû 53MûlVE YEARû2#& INTERESTSûINû#HARTERû#OMMUNICATIONSûANDû PACTIV UPS LOAN TO US$1.25bn 0ROCEEDSûBACKEDûTHEûCOMPANYSûMERGERû ITSûSUBSIDIARYû3KYHOOK WITHûELECTRONICûHEALTHûRECORDSûCOMPANYû 0ACKAGINGûMANUFACTURERûPACTIV EVERGREEN !LLSCRIPTSû(EALTHCAREû3OLUTIONS SUSE SEEKS US$300m LOAN HASûUPSIZEDûAûLOANûBYû53MûTOû )NSURANCEûBROKERûAMWINS has outlined 53BNûANDûTIGHTENEDûTHEûPRICINGûONû THEûTERMSûONûAû53MûADD ONûLOAN /PENûSOURCEûSOFTWAREûPROVIDERûSUSE has THEûFACILITY The loan is being offered at 275bp over UNVEILEDûTHEûTERMSûONûAû53MûLOANû 4HEûCOMPANYûREDUCEDûAûPLANNEDûBONDû ,IBORûWITHûAûûmOOR ûAûû/)$ûANDûû THATûWILLûSUPPORTûTHEûCOMPANYSû SALEûBYû53M SOFT CALLûPROTECTIONûFORûSIXûMONTHS ACQUISITIONûOFûSOFTWAREûCOMPANYû2ANCHERû 4HEûlRST LIENûLOANûPRICEDûATûBPûOVERû The debt will be fungible with a loan ,ABS ,IBORûVERSUSûBPûATûLAUNCH ûWHILEûTHEû MATURINGûINû*ANUARYû 4HEûSEVEN YEARûLOANûISûOFFEREDûATûBPû /)$ûWASûTIGHTENEDûTOûûFROMûû!ûû Goldman Sachs is leading the deal that OVERû,IBORûWITHûAûûmOOR ûAûûTOûû ,IBORûmOORûANDûûSOFTûCALLûPROTECTIONûFORû will fund a dividend to shareholders, along /)$ûANDûûSOFT CALLûPROTECTIONûFORûSIXû SIXûMONTHSûREMAINûUNCHANGED WITHû53MûINûUNSECUREDûNOTESûANDû MONTHS Credit Suisse and HSBC led the deal, which CASHûONûHAND JP Morgan ISûLEADINGûTHEûDEAL WILLûMATUREûINû&EBRUARYû #ORPORATEûRATINGSûAREû"" ûANDûTHEûlRST #ORPORATEûRATINGSûAREû"" 0ACTIVû%VERGREEN ûFORMERLYûKNOWNûASû LIENûLOANûISûRATEDû"A" STARWOOD PROPERTY TRUST has launched a 2EYNOLDSû'ROUP ûISûALSOûRAISINGûMONEYû )Nû$ECEMBER û!M7).3ûRAISEDûAû 53MûINCREMENTALûLOANûTHATûITûWILLûUSEû THROUGHûANû)0/ûONûTHEû.ASDAQû0ROCEEDSû 53MûADD ONûLOANûATûBPûOVERû,IBORû TOûRElNANCEûEXISTINGûDEBT WILLûREPAYûDEBTûANDûGOûTOWARDûGENERALû WITHûAûûmOOR The loan is being offered at 375bp over CORPORATEûPURPOSES 4HEûDEBTûWASûFUNGIBLEûWITHûTHEûTERMû ,IBORûWITHûAûûmOOR ûAûû/)$ûANDûû )Nû*ULY û'RAHAMû0ACKAGING ûAûBUSINESSû LOANûDUEûINû*ANUARYû SOFT CALLûPROTECTIONûFORûSIXûMONTHS SEGMENTûOFû0ACTIVû%VERGREEN ûRAISEDû 4ELECOMSûCOMPANYûGCI LIBERTY has JP Morgan is leading the deal, which will 53BNûINûTHEûLEVERAGEDûLOANûMARKET LAUNCHEDûAû53MûTWO PARTûTRANSACTIONû RElNANCEûSENIORûNOTESûDUEûINû 4HEûSEVEN YEARûLOANûPRICEDûATûBPûOVERû THATûWILLûBEûUSEDûTOûRElNANCEûDEBT 4HEûINCREMENTALûDEBTûWILLûBEûNON ,IBORûWITHûAûûmOORû0ROCEEDSûWEREû 4HEûlVE YEARûDEAL ûLEDûBYûTruist Bank, FUNGIBLEûWITHûANûEXISTINGûFACILITYûMATURINGû USEDûTOûRElNANCEû0ACTIVû%VERGREENûDEBT COMPRISESûAû53MûTERMûLOANûANDûAû INû*ULYû (EALTHCAREûTECHNOLOGYûCOMPANYûWAYSTAR 53MûREVOLVINGûCREDITûFACILITY )Nû*ULYûLASTûYEAR û3TARWOODûRAISEDûAû HASûTIGHTENEDûPRICINGûONûAû53Mû 4HEûTERMûLOANûISûOFFEREDûATûBPûOVERû 53MûSEVEN YEARûLOANûTHATûWASûALSOûPUTû INCREMENTALûLOAN ,IBORûWITHûAûûmOORûANDûûSOFT CALLû INûPLACEûTOûRElNANCEûDEBT 4HEûDEALûPRICEDûATûBPûOVERû,IBORûANDû PROTECTIONûFORûSIXûMONTHS 4HATûLOANûlNALISEDûATûBPûOVERû,IBORû Aûû/)$ ûFROMûBPûANDûAûDISCOUNTûOFû %XISTINGûLENDERSûAREûBEINGûOFFEREDûTHEû WITHûNOûmOOR DEBTûATûAûû/)$ ûWHILEûNEW MONEYû (EALTHCAREûTECHNOLOGYûMANAGEMENTû !ûû,IBORûmOORûANDûûSOFTûCALLû COMMITMENTSûAREûBEINGûOFFEREDûAû lRMûAGILITI HEALTHûHASûDETAILEDûTERMSûONûAû PROTECTIONûFORûSIXûMONTHSûAREûUNCHANGED The revolver is priced at 175bp over 53MûINCREMENTALûLOAN JP Morgan led the deal, which will be ,IBORûANDûISûTIEDûTOûAûLEVERAGE BASEDûGRID )TûISûBEINGûOFFEREDûATûBPûOVERû,IBORû ATTACHEDûTOûAûFACILITYûTHATûMATURESûINû WITHûAûûmOOR ûAûnû/)$ûANDûû /CTOBERû US LEVERAGED LOANS SOFT CALLûPROTECTIONûFORûSIXûMONTHS 7AYSTARûISûRATEDû"" ûANDûTHEûlRST LIENû BOOKRUNNERS: 1/1/2020 TO DATE 0RICINGûWILLûSTEPûDOWNûTOûBPûOVERû,IBORû LOANûISûRATEDû"" Managing No of Total Share ONCEûTHEûNETûlRST LIENûLEVERAGEûRATIOûISûû 0ROCEEDSûFROMûTHEûINCREMENTALûLOANûWILLû bank or group issues US$(m) (%) TIMES SUPPORTûTHEûCOMPANYSûACQUISITIONûOFû 1 Bank of America 391 63,925.43 11.8 JP Morgan is leading the deal, which will SOFTWAREûlRMûE3OLUTIONS 2 JP Morgan 299 51,114.67 9.4 PARTIALLYûREPAYûAûSECOND LIENûLOANûTHATûWASû )Nû3EPTEMBERûLASTûYEAR û7AYSTARû 3 Wells Fargo 230 42,739.35 7.9 PRIVATELYûPLACED LAUNCHEDûAû53MûSEVEN YEARûTERMûLOANû 4 Citigroup 146 31,303.80 5.8 4HEûADD ONûLOANûWILLûBEûATTACHEDûTOûANû THATûBACKEDûTHEûCOMPANYSûPURCHASEûBYû 5 Goldman Sachs 145 28,914.05 5.3 EXISTINGûLOANûMATURINGûINû*ANUARYû THEû#ANADAû0ENSIONû0LANû)NVESTMENTû"OARDû 6 Credit Suisse 113 28,214.35 5.2 #ORPORATEûRATINGSûAREû"" ANDûPRIVATEûEQUITYûlRMû%14û0ARTNERS 7 Barclays 135 25,972.02 4.8 )Nû/CTOBERû û!GILITIûRAISEDûAû53Mû 7AYSTARûWASûFORMEDûTHROUGHûTHEû 8 Morgan Stanley 82 20,652.75 3.8 SEVEN YEARûDELAYED DRAWûTERMûLOAN ûPAYINGû COMBINATIONûOFûREVENUEûCYCLEûTECHNOLOGYû 9 Deutsche Bank 104 18,467.25 3.4 BPûOVERû,IBOR ûWITHûAûûmOOR lRMSû.AVICUREûANDû:IRMEDûINû 10 RBC 86 16,388.72 3.0 4HEûCOMPANYûWASûFORMERLYûKNOWNûASû !SSETûMANAGERûFORTRESS INVESTMENT GROUP Total 1,110 542,981.74 5NIVERSALû(OSPITALû3ERVICES WASûSCHEDULEDûONû&RIDAYûTOûCLOSEûANû

Excluding Project Finance. /UTDOORûLIVINGûPRODUCTSûMANUFACTURERû APPROXIMATEû53BNûLOANûTHATûITûWASû Source: Refinitiv SDC code: P2 BARRETTEûHASûOUTLINEDûTERMSûONûAû53Mû SEEKINGûTOûAMENDûANDûEXTEND

86 International Financing Review September 19 2020

8 IFR Loans 2351 pXX-XX.indd 86 18/09/2020 19:08:48 LEVERAGED LOANS

4HEûCOMPANYûINTENDSûTOûPAYûDOWNû ROUGHLYû53MûOFûTHEûLOAN ûLEAVINGû APPROXIMATELYû53MûTOûEXTEND Covid splits private debt 4HEûDEBTûWILLûBEûEXTENDEDûTOû*UNEûû FROMû$ECEMBERû &ORTRESSûLOANûWASûOFFEREDûATûBP BPû lenders into haves and have-nots OVERû,IBORûWITHûAûûmOOR ûAûû/)$ûANDû ûSOFTûCALLûPROTECTIONûFORûSIXûMONTHS US MIDDLE MARKET Health crisis means some direct lending Deutsche Bank WASûLEADINGûTHEûDEAL transactions may be riskier #ORPORATEûANDûlRST LIENûRATINGSûAREû"AA "" Months of market uncertainty created by have decreased,” said Mike McMahon, head &ORTRESSûLOANûPREVIOUSLYûPAIDûBPû the coronavirus pandemic have split private of asset management at investment bank OVERû,IBORûWITHûAûûmOOR debt lenders into the haves and have-nots as Houlihan Lokey. pensions, endowments and other investors LIGHTPATH TIGHTENS TERMS flock to existing relationships and shy away COVID-19 EFFECT from firms with whom they have not previously Scepticism about performance has also made &IBRE OPTICûNETWORKûPROVIDERûCABLEVISION invested. it difficult for firms to attract capital. One LIGHTPATHûHASûWRAPPEDûAû53MûLOANû Some alternative lenders that have manager had sought to persuade investors THATûWILLûSUPPORTûAûMINORITYûINVESTMENTû invested through previous economic that performance issues were a short-term INTOûTHEûCOMPANYûBYû-ORGANû3TANLEYû cycles are attracting investors, also called dislocation rather than fundamental credit )NFRASTRUCTUREû0ARTNERS limited partners, where there is an existing issues, according to one advisory source. 4HEûSEVEN YEARûLOANûPRICEDûATûBPûOVERû relationship. For many LPs, in-person due A plurality of investors, some 35%, surveyed ,IBORûVERSUSûINITIALûGUIDANCEûOFûBP diligence of a potential asset manager is a by Preqin on its outlook for the second half of BPû4HEû/)$ûWASûALSOûTIGHTENEDûTOûû requirement, making it difficult to take on 2020 polled in June, expect Covid-19 to have FROMûûATûLAUNCH clients they have not met. a moderately negative long-term effect on !ûû,IBORûmOORûANDûûSOFTûCALLû “One of the splits in the fund market isn’t returns in their alternative asset portfolios, PROTECTIONûFORûSIXûMONTHSûAREûUNCHANGEDû fund size. What’s really the driving factor is the while 7% expect it to have an extremely 4HEûDEALûAMORTISESûATûûPERûYEAR Roman numeral after the fund name,” said negative effect. 4ICKINGûFEESûWORTHûûOFûTHEûMARGINû Kelly DePonte, a managing director at Probitas For instance, some direct lending WILLûKICKûINûDURINGûDAYSû ûOFûTHEûLOANû Partners, which helps firms to raise money. transactions may be riskier than they would BEFOREûINCREASINGûTOûûOFûTHEûMARGINû “If you’re on fund three or four, you have been without a pandemic. THEREAFTER already have LPs that know [the managers]. “A number of local, smaller more middle Goldman Sachs, RBC Capital Markets, There’s a distinct split in whether the LPs know market companies have been hit by what’s Deutsche Bank and Morgan Stanley arranged the team personally. They can give them money been going on, and they are riskier. The reason THEûTRANSACTION if they’ve seen the whites of their eyes and they need money is they are in a world of hurt,” #ORPORATEûRATINGSûAREû"" ûANDûTHEûlRST they trust you. They’ll do final due diligence Probitas’ DePonte said. “The question, if you’re LIENûLOANûISûRATEDû"" virtually.” a direct lending fund, is how do I know if this /Nû*ULYû ûBROADBANDûCOMMUNICATIONSû Apollo Global Management, for one, could company is going to perform, especially based PROVIDERû!LTICEû53!ûSAIDûITûAGREEDûTOûSELLûITSû profit from this division. on the troubles they’ve just had?” ûSTAKEûINû,IGHTPATHûTOû-3)0ûFORûANû The firm hopes to raise US$2bn–$3bn for Some LPs must also contend with ENTERPRISEûVALUEûOFû53BN Apollo Accord Fund IV. Participants in the fund investments in funds nearing the end of !LTICEû53!ûWILLûRECEIVEûROUGHLYû include existing and new investors. The vehicle, their life that contain troubled assets. Fund 53BNûINûCASHûFROMûTHEûSALEûANDûWILLû which was launched in the second quarter, managers typically face pressure to sell assets RETAINûAûûSTAKEûINûTHEûCOMPANYû4HEû carries a hard-cap of US$5bn. once a fund’s term ends, which can lead to TRANSACTIONûISûEXPECTEDûTOûCLOSEûINûTHEû Fund IV comes after a frenetic capital raise loans being sold at losses. FOURTHûQUARTER for the same fund series. “We’re seeing some managers that are 3NACKûMAKERûSHEARER’S FOODSûHASûUPSIZEDû In May, the asset manager closed on considering term extensions or flexibility [on AûLOANûTOû53BNûFROMû53MûANDû US$1.75bn for Apollo Accord Fund III B in eight that],” said Jason Kolman, a partner at law TWEAKEDûTHEûTERMSûONûTHEûFACILITY weeks, a follow-on to its US$886m Apollo firm Ropes & Gray. “I think investors have been 4HEûSEVEN YEARûlRST LIENûLOANûlNALISEDûATû Accord Fund III. The latter had deployed three- willing to listen to that. They don’t want to be in BPûOVERû,IBORûWITHûAûRATINGS BASEDûSTEP quarters of its uninvested capital in seven a position where managers have to sell assets down in pricing versus initial pricing of business days, a source previously told Refinitiv in a fire sale.” BPûATûLAUNCH LPC. Investors polled by Preqin in the same 4HEû,IBORûmOORûWASûREVISEDûTOûû Fortress Investment Group is seeking survey, released in August, expect distressed FROMûûANDûTHEû/)$ûWASûTIGHTENEDûTOû additional capital for its Fortress Credit debt to offer better opportunities than direct ûFROMû Opportunities (FCO) strategy, according to an lending. 3OFTûCALLûPROTECTIONûREMAINSûUNCHANGEDû investor in the fund. The firm initially raised In June, 69% said distressed debt offered the ATûûFORûSIXûMONTHS US$5bn for its FCO V fund and has now set an best investment opportunities over the next 12 Shearer’s Foods has also reduced a upper limit of US$7bn for FCO V Expansion. months compared with 42% who said the same SECOND LIENûLOANûTHATûWILLûBEûPRIVATELYû The follow-on fund has collected US$5.2bn of direct lending. That is a reversal from June PLACED ûTOû53MûFROMû53M so far. 2019 when 49% said direct lending offered Credit Suisse, Antares, BMO Capital Markets “Some target fund sizes in the private credit better prospects, and 35% said the same thing and Golub Capital ARRANGEDûTHEûTRANSACTION markets have been moved up, I am actually about distressed debt. #ORPORATEûRATINGSûAREû"" ûANDûTHEûlRST seeing more of those ... rather than those that Andrew Hedlund LIENûLOANûISûRATEDû""

International Financing Review September 19 2020 87

8 IFR Loans 2351 pXX-XX.indd 87 18/09/2020 19:08:48 0ROCEEDSûWILLûRElNANCEûlRSTûANDûSECOND #ORPORATEûRATINGSûAREû"A" !ûSTRONGûSECONDARYûMARKETûHASûALSOû LIENûDEBT ûREPAYûAûSUBORDINATEDûSELLERûNOTE û )Nû3EPTEMBERû û-ICHAELSûCOMBINEDû ENABLEDûBANKSûTOûPRICEûLOANSûATûVERYûLITTLEû REPAYûBORROWINGSûFROMûAûREVOLVINGûCREDITû TWOûLOANSûTOûCREATEûAû53BNûFACILITYû DISCOUNTûTOûPAR ûWHICHûISûEXPECTEDûTOû FACILITYûANDûPAYûAû53MûSHAREHOLDERû DUEûINû ENTICEûMOREûISSUERSûTOûTHEûNEW ISSUEû DIVIDEND AVEANNA HEALTHCARE has tightened the MARKETûTHROUGHOUTû3EPTEMBER ûTHEûBANKERû The additional borrowings will increase TERMSûONûAû53MûINCREMENTALûLOAN said THEûCOMPANYSûDEBT TO %BITDAûRATIOûTOû 4HEûLOANûPRICEDûATûBPûOVERû,IBORûWITHû h4HEûLOANûMARKETûHASûPERFORMEDûWELLûINû ROUGHLYûûTIMESûFROMûûTIMES û-OODYSû AûûmOOR ûAûû/)$ûANDûûSOFTûCALLû THEûLASTûCOUPLEûOFûWEEKSûANDûITSûBECOMEûANû SAID PROTECTIONûFORûûMONTHS attractive option for borrowers because 3HEARERSûISûAûPORTFOLIOûCOMPANYûOFû !VEANNAûINITIALLYûOFFEREDûTHEûDEBTûATû /)$SûAREûALMOSTûBACKûTOûPAR vûTHEûSENIORû /NTARIOû4EACHERSû0ENSIONû0LAN BP BPûOVERû,IBORûANDûAû û/)$ BANKERûSAIDûh)TûSHOULDûBEûEQUALLYûASûBUSYû 4HEûINCREMENTALûLOANûWILLûBEûNON NEXTûWEEKûANDûCOMPANIESûTHATûWEREû ELLUCIAN SHOPS US$1.6bn LOAN FUNGIBLEûWITHûAûFACILITYûMATURINGûINû-ARCHû LOOKINGûTOûRElNANCEûTHEIRûDEBTûLATERûTHISû YEARûMAYûPULLûTHEIRûDEALSûFORWARDûTOûGETû (IGHERûEDUCATIONûSOFTWAREûPROVIDERû Barclays, BMO Capital Markets and Jefferies AHEADûOFûANYûVOLATILITYûFROMûTHEûELECTIONv ELLUCIANûLAUNCHEDûTHEûTERMSûONûAû53BNû ARRANGEDûTHEûDEAL JP Morgan, Credit Suisse, Barclays, Goldman LOANûTHATûWILLûRElNANCEûDEBTûANDûFUNDûAû 0ROCEEDSûWILLûFUNDûGENERALûCORPORATEû Sachs, Morgan Stanley, Societe Generale and DISTRIBUTIONûTOûTHEûCOMPANYSûPRIVATEû PURPOSES ûTUCK INûACQUISITIONSûANDûADDû UBS ARRANGEDûTHEûlNANCING EQUITYûSPONSORû40'û#APITAL CASHûTOûTHEûCOMPANYSûBALANCEûSHEET û2ADIATEûCUTûITSûHIGH YIELDûBONDûPACKAGEû 4HEûSEVEN YEARûLOANûISûGUIDEDûATûBPû !VEANNASûTERMûLOAN ûRAISEDûINû-ARCHû FROMû53BNûTOû53BN OVERû,IBORûWITHûAûûmOOR ûAûû/)$ûANDû ûHASûROUGHLYû53MûOUTSTANDING 0ROCEEDSûWILLûREPAYû53MûOFû ûSOFTûCALLûPROTECTIONûFORûSIXûMONTHS 0ROCEEDSûFROMûTHEûûlNANCINGû BORROWINGSûFROMûANûEXISTINGûREVOLVINGû Bank of America, JP Morgan, Morgan Stanley, BACKEDûTHEûCOMPANYSûACQUISITIONûBYû CREDITûFACILITY ûREPAYû53BNûINû Goldman Sachs, UBS, BMO Capital Markets, PRIVATEûINVESTORSû*(û7HITNEYû#APITALû EXISTINGûTERMûLOANûDEBTûANDûREPAYû Barclays, Deutsche Bank and TPG Capital are 0ARTNERSûANDû"AINû#APITAL 53MûINûEXISTINGûUNSECUREDûNOTES ARRANGINGûTHEûDEAL )NûADDITION û2ADIATEûWILLûUSEûPROCEEDSûTOû #ORPORATEûRATINGSûAREû"" ûlRST LIENû RADIATE UPS TERM LOAN FUNDûCAPITALûEXPENDITUREûANDûPAYûAû RATINGSûAREû""ûANDûSECOND LIENûRATINGSûAREû DIVIDENDûTOûITSûPRIVATEûEQUITYûOWNERû40'û #AA### #ABLEûCOMPANYûANDûDATAûPROVIDERûRADIATE #APITAL )Nû*ANUARYû û%LLUCIANûREPRICEDûAûTHENû INCREASEDûTHEûSIZEûOFûAûTERMûLOANûBYû 4HEûBORROWERû2ADIATEû(OLDCOûISûRATEDû 53BNûLOANûTOûBPûOVERû,IBORûWITHûAû 53BNûTOû53BNûAFTERûLOWERINGûAû "" ûmOORûFROMûBP SECUREDûBONDûSALEûBYûTHEûSAMEûAMOUNT Broadband provider CONSOLIDATED !RTSûANDûCRAFTSûRETAILERûMICHAELS STORES 4HEûSIX YEARûLOANûWASûPRICEDûATûBPû COMMUNICATIONSûREDUCEDûAûHIGH YIELDûBONDû HASûUPSIZEDûAûLOANûBYû53MûTOû OVERû,IBORûWITHûAûûmOOR ûAûû/)$ûANDû SALEûBYû53MûINûFAVOURûOFûUPSIZINGûAû 53BNûANDûREDUCEDûAûHIGH YIELDûBONDû ûSOFT CALLûPROTECTIONûFORûSIXûMONTHS LOANûBYûTHEûSAMEûAMOUNTûTOû53BN SALEûBYû53MûTOû53M )NITIALLY ûTHEûTRANSACTIONûWASûOFFEREDûASûAû 4HEûSEVEN YEARûLOANûWASûOFFEREDûATû 4HEûADDITIONALû53MûWILLûGOûTOWARDû 53BNûLOANûATûAûMARGINûOFûBPn BPûOVERû,IBORûWITHûAûûmOOR ûAûnû GENERALûCORPORATEûPURPOSES BPûWITHûAûûmOORûANDûnû/)$ /)$ûANDûûSOFT CALLûPROTECTIONûFORûSIXû 4HEûSEVEN YEARûLOANûPRICEDûATûBPûOVERû The structural changes to the MONTHS ,IBORûWITHûAûûmOOR ûAûû/)$ûANDûû LEVERAGEDûLOANûFROMûTHEûHIGH YIELDûBONDSû JP Morgan, Morgan Stanley, Goldman Sachs, SOFTûCALLûPROTECTIONûFORûSIXûMONTHS COMEûASûINVESTORSûSHOWûANûINCREASEDû TD Securities, Wells Fargo and Deutsche Bank JP Morgan LEDûTHEûDEAL interest in new loan opportunities, ARRANGEDûTHEûDEAL -ICHAELSûWILLûUSEûPROCEEDSûFROMûTHEû PARTICULARLYûFORûCOMPANIESûWILLINGûTOû #ONSOLIDATEDû#OMMUNICATIONSûREDUCEDû loan, along with the secured bond debt RElNANCEûEXISTINGûDEBTûAHEADûOFûTHEû53û ITSûSENIORûSECUREDûBONDûTOû53M ANDû53MûOFûCASHûONûHAND ûTOûREPAYûAû PRESIDENTIALûELECTIONûONû.OVEMBERû ûAû 0ROCEEDSûFROMûTHEûBONDûANDûLOANûWILLû ROUGHLYû53BNûLOANûDUEûINû SENIORûBANKERûSAID REDEEMûOUTSTANDINGûSENIORûNOTESûDUEûINû ûREPAYûAûPORTIONûOFûBORROWINGSûFROMû EUROPEAN LEVERAGED LOANS EMEA SPONSORED LOAN BOOKRUNNERS ANûEXISTINGûCREDITûFACILITYûANDûPAYûFEESûANDû BOOKRUNNERS: 1/1/2020 TO DATE BY VOLUME: 1/1/2020 TO DATE EXPENSESûRELATEDûTOûTHEûTRANSACTIONS Managing No of Total Share Europe, Middle East, Africa #ORPORATEûRATINGSûAREû""ûANDûEXISTINGû bank or group issues US$(m) (%) Managing No of Total Share lRST LIENûDEBTûISûRATEDû"" 1 JP Morgan 34 7,132.31 8.0 bank or group issues US$(m) (%) )Nû$ECEMBERû û#ONSOLIDATEDû 2 BNP Paribas 39 5,922.57 6.6 1 JP Morgan 18 3,681.98 8.2 #OMMUNICATIONSûRAISEDû53MûINû 3 Credit Agricole 29 5,656.34 6.3 2 Deutsche Bank 20 2,923.56 6.5 INCREMENTALûTERMûLOANûDEBT 4 Deutsche Bank 33 5,406.56 6.0 3 BNP Paribas 20 2,782.61 6.2 4HEûINCREMENTALûLOANûWASûATTACHEDûTOûITSû 5 Goldman Sachs 25 5,192.13 5.8 4 Credit Agricole 17 2,584.31 5.7 EXISTINGûLOANûMATURINGûINû/CTOBERûûATû 6 Barclays 23 5,172.98 5.8 5 SG 10 2,344.25 5.2 AûMARGINûOFûBPûOVERû,IBORûWITHûAûû 7 HSBC 22 5,091.92 5.7 6 UniCredit 12 2,214.16 4.9 mOOR 8 Citigroup 16 4,506.80 5.0 7 HSBC 11 2,206.03 4.9 9 UniCredit 19 3,464.78 3.9 8 Barclays 13 2,162.38 4.8 ECI TWEAKS LOAN TERMS 10 Bank of America 19 3,313.01 3.7 9 Bank of America 11 2,112.69 4.7 Total 140 89,601.48 10 Credit Suisse 19 2,087.58 4.6 ECI SOFTWARE SOLUTIONSûHASûREWORKEDûSOMEû Total 75 45,003.78 OFûTHEûTERMSûONûAûLOANûTHATûWILLûFUNDûITSû Excluding project finance. Western Europe only included. ACQUISITIONûOFûSOFTWAREûCOMPANYû Excluding project finance. Source: Refinitiv SDC code: P10 Source: Refinitiv SDC code: P13 3HOCKWAVE

88 International Financing Review September 19 2020

8 IFR Loans 2351 pXX-XX.indd 88 18/09/2020 19:08:48 RESTRUCTURING

4HEûSEVEN YEARûLOANûHASûBEENûINCREASEDûTOû 4HEûBORROWERûISûEXTENDINGûTHEûMATURITYûOFû COMPANYûCONTINUESûNEGOTIATIONSûWITHûITSû 53MûFROMû53MûANDûTHEûMARGINû THEû4," ûWHICHûINCLUDESûANû53Mû LARGESTûLENDERS HASûTIGHTENEDûTOûBPûOVERû,IBOR ûVERSUSû TRANCHEûANDûAûõMûTRANCHE ûTOû$ECEMBERû Speedcast said it is evaluating revised INITIALûGUIDANCEûOFûBPnBP ûFROMû*UNEû recapitalisation proposals with a view of 4HEû/)$ûWASûALSOûSETûATûûFROMûnû )NûEXCHANGE ûPRICINGûONûTHEûDOLLARûTRANCHEû MAXIMISINGûVALUEûFORûALLûCREDITORSûANDû ATûLAUNCH WILLûINCREASEûTOûBPûOVERû,IBORûFROMû PROVIDINGûCERTAINTYûOFûOUTCOMEûFORûALLû !ûû,IBORûmOORûANDûûSOFT CALLû 250bp, while pricing on the euro tranche STAKEHOLDERS PROTECTIONûFORûSIXûMONTHSûREMAINû WILLûINCREASEûTOûBPûOVERû%URIBOR ûFROMû 7EILû'OTSHALûû-ANGESûISû3PEEDCASTSû UNCHANGED BP GLOBALûLEGALûCOUNSEL ûWHILEû(ERBERTû3MITHû 0RIORûTOûCLOSE û%#Iû3OFTWAREûINCREASEDûTHEû !ûûmOORûREMAINSûTHEûSAMEûFORûBOTHû &REEHILLSûISûCO COUNSEL lRST LIENûLOANûBYû53MûTOû53MûANDû TRANCHES &4)û#ONSULTINGûISû3PEEDCASTSûlNANCIALûANDû REDUCEDûAûSECOND LIENûLOANûBYûTHEûSAMEû 4HEûDOLLARûTRANCHEûISûOFFEREDûATûnû OPERATIONALûADVISER AMOUNTûTOû53M /)$ûANDûTHEûEUROûTRANCHEûISûOFFEREDûATûAû -OELISû!USTRALIAû!DVISORYûANDû-OELISûû#Oû Bank of America, RBC Capital Markets, Truist, SLIGHTLYûDEEPERûDISCOUNTûOFûn AREû3PEEDCASTSûINVESTMENTûBANKERSû+##ûISû Golub Capital and Barclays ARRANGEDûTHEûDEAL 4HEûDEALûINCLUDESûûSOFT CALLûPROTECTIONû 3PEEDCASTSûCLAIMSûANDûNOTICINGûAGENT #ORPORATEûRATINGSûAREû""n ûTHEûlRST LIENû FORûûMONTHS LOANûISûRATEDû""ûANDûTHEûSECOND LIENûLOANûISû #ORPORATEûRATINGSûAREû"""nûANDûFACILITYû RATEDû#AA### RATINGSûAREû"""n ûWITHûRECOVERYûRATINGûOFû )NûADDITIONûTOûFUNDINGûTHEû3HOCKWAVEû JP Morgan is leading the process as sole ACQUISITION û%#Iû3OFTWAREûWILLûRElNANCEûITSû PHYSICALûBOOKRUNNERûBarclays, BNP Paribas, RESTRUCTURING EXISTINGûCAPITALûSTRUCTUREûANDûFUNDûAû Citigroup, Deutsche Bank, Mizuho and RBC are DIVIDENDûTOûITSûSPONSOR û!PAXû0ARTNERS BOOKRUNNERS 4HEûCOMPANYSûDEBT TO %BITDAûRATIOûWILLûBEû 4)û!UTOMOTIVEûLASTûTAPPEDûTHEûLOANûMARKETû UNITED STATES ROUGHLYûûTIMES ûBEFOREûACCOUNTINGûFORûCOSTû INû*UNEûûWHENûITûRAISEDûAû53M SYNERGIES ûASûAûRESULTûOFûTHEûACQUISITIONûANDû EQUIVALENTû4,"ûADD ONûINûDOLLARSûANDûEUROSû AVIANCA LANDS US$2bn DIP DEBTûlNANCING û-OODYSûSAID 4HEûDOLLARûADD ONûWASûPRICEDûATûBPûOVERû !ûHIGHûPROPORTIONûOFûRECURRINGûREVENUEû ,IBORûWHILEûTHEûEUROûLOANûWASûPRICEDûATû #OLOMBIANûAIRLINEûAVIANCAûHASûlNALISEDûAû ANDûSTRONGûCUSTOMERûRETENTIONûRATESûWILLû BPûOVERû%URIBOR 53BNûDEBTOR IN POSSESSIONûlNANCINGûTHATû support organic revenue growth and should 4)û!UTOMOTIVEûISûAûSUBSIDIARYûOFû4)û&LUIDû WILLûFUNDûTHEûCOMPANYSûEXPENSESûANDû ENABLEûTHEûCOMPANYûTOûDELEVERAGEûTOWARDûû 3YSTEMS ûWHICHûISûLISTEDûONûTHEû,ONDONû OPERATIONSûTHROUGHOUTû#HAPTERûû TIMESûINûTHEûNEXTûûMONTHS û-OODYSûSAID 3TOCKû%XCHANGEûANDûOWNEDûBYû"AINû#APITAL BANKRUPTCYûPROCEEDINGS %#Iû3OFTWAREûMERGEDûWITHû!PAXSûPORTFOLIOû )TûMAKESûBRAKEûANDûFUELûLINESûANDûTANKSû 4HEû$)0ûlNANCINGûCOMPRISESûAû53BNû COMPANIESû%XACTû3OFTWARESû-ACOLA û*OB"/33û FORûTHEûAUTOûINDUSTRY DELAYED DRAWûTERMûLOANûANDûAû53Mû ANDû-!8ûBUSINESSESûINû TERMûLOAN 4HEûCOMPANYûPROVIDESûENTERPRISEû 4HEû MONTHû$$4,ûHASûAûCASHûPRICEûOFû RESOURCEûPLANNINGûFORûSMALLûANDûMEDIUM ASIA-PACIFIC BPûOVERû,IBOR ûORûAûMARGINû BPû SIZEDûBUSINESSES OVERû,IBORûTHROUGHûPAYMENT IN KIND )NDUSTRIALûMANUFACTURERûWABASH NATIONAL SPEEDCAST FILES MOTION TO 4HEûFACILITYûALSOûINCLUDESûAûûmOORûTHATû TIGHTENEDûTHEûMARGINûONûAû53MûLOAN REPLACE DIP WILLûBEûPAYABLEûINûCASHûORûIN KINDûANDûAûû 4HEûSEVEN YEARûLOANûWASûPRICEDûATûBPû /)$ OVERû,IBOR ûVERSUSûGUIDANCEûOFûBPnBPû SPEEDCAST INTERNATIONALûHASûlLEDûAûMOTIONûTOû )Nû!UGUST ûTHEû$$4,ûWASûOFFEREDûATû !ûû,IBORûmOOR ûAûû/)$ûANDûûSOFT REPLACEûITSûCURRENTûDEBTOR IN POSSESSIONû BPn BPûOVERû,IBORûONûAûCASHûBASIS û CALLûPROTECTIONûFORûSIXûMONTHSûREMAINû lNANCINGûFROMû"LACKû$IAMONDû#APITALû ORû BPn BPûOVERû,IBORûTHROUGHû0)+ UNCHANGEDûFROMûLAUNCH -ANAGEMENTûWITHûAûLARGERûPROPOSEDû$)0û !VIANCAûISûEXPECTEDûTOûDRAWû Wells Fargo and JP Morgan arranged the FACILITYûFROMûCenterbridge Partners APPROXIMATELYû53MûOFûTHEû$$4, lNANCING 4HEûMOTIONûWASûlLEDûWITHûTHEû53û 5NDRAWNûCOMMITMENTûFEESûWILLûBEûBPû 4HEûLOANûWILLûBEûSECUREDûONûAûlRST LIENû "ANKRUPTCYû#OURTûFORûTHEû3OUTHERNû$ISTRICTû FORûTHEûlRSTûûDAYS ûINCREASINGûTOûûOFûTHEû BASISûBYûSUBSTANTIALLYûALLûCOMPANYûASSETS û OFû4EXASûONû3EPTEMBERûûANDûFOLLOWSûAû DRAWNûSPREADûFROMûDAYSûn ûûOFûTHEû EXCLUDINGûREALûESTATE lLINGûBYû"LACKû$IAMOND ûAûMAJORITYûPRE DRAWNûSPREADûFROMûDAYSûnûANDûûOFû 0ROCEEDSûWILLûRElNANCEûANûEXISTINGûLOANû PETITIONûLENDERûANDûTHEûCURRENTû$)0û THEûDRAWNûSPREADûTHEREAFTER MATURINGûINûûANDûFUNDûGENERALû lNANCINGûPROVIDER ûOFûAûNOTICEûOFûDEFAULTûONû Goldman Sachs and JP Morgan arranged the CORPORATEûPURPOSES THEûORIGINALû$)0ûFACILITY lNANCING )Nû-ARCHû û7ABASHûRAISEDûAû The default occurred following #ORPORATEûRATINGSûAREû#AA$ 53MûSEVEN YEARûTERMûLOANûATûBPû 3PEEDCASTSûENTRYûINTOûAûPROPOSEDûEQUITYû #OLOMBIASû-INISTRYûOFû&INANCEûWILLû OVERû,IBORûWITHûAûûmOOR COMMITMENTûAGREEMENTûWITHûPRIVATEû PROVIDEû53MûINûEMERGENCYûFUNDINGûFORû INVESTMENTûlRMû#ENTERBRIDGE THEûCASH STRAPPEDûAIRLINEûTHROUGHûTHEû 4HEûNEWLYûPROPOSEDû53Mû$)0û GOVERNMENTSû%MERGENCYû-ITIGATIONû&UND EUROPE/MIDDLE EAST/ FACILITY ûWHICHûISû53MûMOREûTHANûITSû !VIANCAûlLEDûFORûBANKRUPTCYûPROTECTIONûINû AFRICA PREVIOUSûlNANCING ûFUNDSû3PEEDCASTSû -AY EMERGENCEûFROMû#HAPTERûûANDûOFFERSû TI AUTO SEEKS A&E MAXIMUMûmEXIBILITY ûTHEûCOMPANYûSAID IQOR SEEKS DIP APPROVAL 4HEûNEWû$)0ûlNANCINGûWILLûALLOWû 5+ûAUTOûPARTSûMAKERûTI GROUP AUTOMOTIVE 3PEEDCASTûTOûCONTINUEûITSûNORMALûCOURSEûOFû #USTOMERûSERVICEûOUTSOURCINGûCOMPANYû SYSTEMSûISûSEEKINGûTOûAMENDûANDûEXTENDûITSû OPERATIONS ûINCLUDINGûSERVINGûCUSTOMERSûANDû IQORûISûSEEKINGûCOURTûAPPROVALûFORû53Mû 4ERMû,OANû" SUPPORTINGûBUSINESSûCONTINUITYûASûTHEû INûDEBTOR IN POSSESSIONûlNANCINGûAFTERû

International Financing Review September 19 2020 89

8 IFR Loans 2351 pXX-XX.indd 89 18/09/2020 19:08:49 lLINGûFORû#HAPTERûûBANKRUPTCYû I1ORûWILLûALSOûRECEIVEûANû53MûEXITû AMENDEDûTHEûPROPORTIONûOFûTHEûLOANû PROTECTIONûONû3EPTEMBERûû !",ûFACILITY ûANûEXITûLOANûOFû53M ITûWASûOFFERINGûTOû53BNûFROMû Its international operations are not M ûANDûAûlVE YEARû53MûTERMû 53BNûORIGINALLY ûWITHûAûGROUPûOFû INCLUDEDûINûTHEûlLING LOANûWHENûITûEMERGESûFROMûBANKRUPTCY CREDITORSûPUTûTOGETHERûBYûINVESTMENTû 4HEû$)0ûINCLUDESûANû53MûASSET BASEDû 0ROCEEDSûOFûTHEûEXITûlNANCINGûWILLûBEû BANKû*EFFERIESû'ROUPûPROVIDINGûANû LENDINGûFACILITYûANDûAû53MûTERMûLOANû!û USEDûTOûPAYûBACKûANYûOUTSTANDINGû$)0û ADDITIONALû53M GROUPûOFûLENDERSûLEDûBYû7ELLSû&ARGOûWILLû AMOUNTS )NûAûSECONDûTRANCHE ûSEVERALûKEYû,!4!-û PROVIDEûTHEû!",ûlNANCING 4HEûFOUR YEARûEXITûLOANûWILLûBEûSENIORûTOû SHAREHOLDERS ûINCLUDINGûTHEû#UETOûFAMILY û 4HEû53MûTERMûLOAN ûWHICHûWILLûBEû THEû53MûTERMûLOANûANDûPRICEDûATû WHICHûCONTROLSûTHEûAIRLINE ûANDû1ATARû BACKSTOPPEDûBYûANûUNDISCLOSEDûGROUPûOFû BPûOVERû,IBORûWITHûAûûmOOR !IRWAYS ûCHANGEDûTHEIRûOFFERINGûFROMûTHEû lRSTûANDûSECOND LIENûCREDITORS ûISûPRICEDûATû )NTERESTûONûTHEû53MûTERMûLOANûISû 53MûCONVERTIBLEûLOANûPREVIOUSLYû BPûOVERû,IBORûWITHûAûûmOOR OFFEREDûATûBPûOVERû,IBORûINûCASH ûWITHûAû REJECTEDûBYûTHEûJUDGEûAMIDûOPPOSITIONû I1ORSû53MûPRE PETITIONûDEBTû ûmOORûFORûTHEûlRSTûTWOûYEARSû!FTERûTHAT û FROMûOTHERûCREDITORSûTOû53MûWITHû INCLUDESûAû53MûPRIORITYûTERMûLOAN û I1ORûHASûTHEûOPTIONûOFûAûPAYMENT IN KINDû 53MûADDITIONALûlNANCINGûFROMû 53MûOUTSTANDINGûUNDERûAûRECEIVABLESû TOGGLE ûWHEREBYûINTERESTûISûOFFEREDûATû CREDITORSûLEDûBYû*EFFERIESûANDû53Mû FACILITY û53MûUNDERûAûlRST LIENûCREDITû BPûOVERû,IBORûINûCASH ûWITHûAûûmOOR û FROMûOTHERû,!4!-ûSHAREHOLDERSûORûNEWû FACILITYûANDû53MûUNDERûAûSECOND LIENû ANDûBPûOVERû,IBORûIN KIND INVESTORS CREDITûFACILITY ,!4!-ûSAIDûINûITSûSTATEMENTûTHATûIFûNEWû I1ORûTOOKûONûTOOûMUCHûDEBTûWHENûITû LATAM AIRLINES PROPOSES NEW DEAL INVESTORSûCOULDûNOTûBEûFOUND ûKEYû,!4!-û ACQUIREDûMANUFACTURINGûSERVICESûCOMPANYû SHAREHOLDERSûANDûTHEû*EFFERIESû'ROUPû *ABILûINû û#&/û$AVIDû+AMINSKYûSAID LATAM AIRLINES has presented a new CREDITORSûWOULDûMAKEûUPûTHEûDIFFERENCEû)Tû 4OûlNANCEûTHEû*ABILûACQUISITION ûTHEû 53BNûlNANCINGûPROPOSALûINûTHEû also stipulated that both tranches of loans COMPANYûARRANGEDûTHEûlRSTûANDûSECOND MIDDLEûOFûITSûBANKRUPTCYûPROTECTIONû HADûTOûBEûPAIDûINûCASH ûRATHERûTHANûEQUITYû LIENûTERMûLOANS process in the US, replacing a proposed ASûPREVIOUSLYûINûTHEûPLANûREJECTEDûBYûTHEû /Nû-AYû ûAMIDûAûBACKDROPûOFûlNANCIALû DEBTOR IN POSSESSIONûLOANûTHATûPROMPTEDû JUDGE ISSUESûCAUSEDûBYûTHEûCORONAVIRUSû THEûJUDGEûTOûREJECTûTHEûORIGINALûPLANûEARLIERû The new proposal offers a loan PANDEMIC ûTHEûCOMPANYûOBTAINEDûTHEû THISûMONTH MATURITYûOFûûMONTHSûANDûANûANNUALû PRIORITYûTERMûLOANûTOûFUNDûOPERATIONSûASûITû ,!4!- ûTHEûLARGESTûAIRûTRANSPORTû INTERESTûRATEûOFû,IBORûPLUSûû)TûALSOû discussed restructuring options with COMPANYûINû,ATINû!MERICA ûTOLDûTHEû REQUIRESû,!4!-ûTOûMAINTAINûATûLEASTû LENDERS #HILEANûSECURITIESûREGULATORûINûAûLETTERûONû 53MûINûLIQUIDITY !SûPARTûOFûTHEûRESTRUCTURINGûSUPPORTû 7EDNESDAYûNIGHTûTHATûTHEûNEWû$)0ûLOANû ,!4!-ûlLEDûFORûBANKRUPTCYûPROTECTIONû AGREEMENTûNEGOTIATEDûWITHûANûADûHOCû MAINTAINEDûhBASICALLYvûTHEûSTRUCTUREû INû-AY ûAIMINGûTOûREORDERû53BNûINûDEBTû GROUPûOFûlRSTûANDûSECOND LIENûLENDERS ûI1ORû PRESENTEDûINû*ULY ASûITûWASûHAMMEREDûBYûTHEûWORLDûTRAVELû AGREEDûTOûAûDEBT FOR EQUITYûSWAPûWITHûTHEû )NûONEûTRANCHE ûASSETûMANAGEMENTû CRISISûGENERATEDûBYûTHEûCORONAVIRUSû lRST LIENûLENDERS lRMû/AKTREEû#APITALû-ANAGEMENTû PANDEMICû Is your company breaking the law? Make sure you’re accessing IFR content legally

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90 International Financing Review September 19 2020

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China 92 India 94 Japan 95 Philippines 96 Thailand 96 Belgium 97 France 97 Germany 98 Netherlands 99 Russia 100 UK 101 United States 103 Canada 110 Structured Equity 111

FRONT STORY JAPAN Kioxia lowers target for IPO US-China tensions weigh on Japan’s biggest listing since 2018

KIOXIA HOLDINGS, the new owner of Toshiba’s that the US investors only acquired non- 0ROCEEDSûWILLûGOûTOWARDSûlNANCINGûANDû memory chip unit, has lowered the voting rights and SK Hynix, a competitor of INVESTMENTûRELATEDûTOûTHEû.!.$ûmASHû fundraising target for its up to ¥307bn Kioxia, had part of its investment in memory business and capital expenditure, (US$2.9bn) TSE IPO, Japan’s biggest stock convertible bonds, which can only convert to compete with rivals such as South market listing in two years. to equity with limitations. Korea’s Samsung Electronics and SK Hynix. Kioxia is marketing its IPO at a price range The consortium consists of Japanese There is a greenshoe of up to 7.9m at ¥2,800–¥3,500 per share. The top of that optical components maker Hoya shares, equal to 9% of the base deal. range is 11.6% lower than the indicative price Corporation, US investors Apple, Dell Including the ‘shoe, about 21.5m new of ¥3,960 in the prospectus and gives Kioxia Technologies Capital, Kingston Technology, shares are on offer, and 74m existing an implied market value of about ¥1.89trn. Seagate and South Korean chip maker SK shares from Bain Capital, Toshiba and The base deal consists of 87.6m shares. Hynix. Hoya. The price on the prospectus functions as a After the IPO, Toshiba will hold 32% of About 65% of the deal will be allocated to placeholder in Japan and is always subject to Kioxia, down from 40.2% currently, Bain will international investors and the rest to adjustment, but bankers said the 10%-plus own 33.4% and Hoya 2.5%, according to a domestic institutions and retail buyers with REDUCTIONûREmECTEDûFEEDBACKûFROMûINVESTORSû person close to the deal. a 7%/93% split. during pre-marketing. Books opened last Thursday, but Kioxia There is a lock-up of 180 days on the The new target is also lower than the still has several hurdles to overcome to issuer, selling shareholders and certain ¥2trn valuation when US private equity convince investors to support the listing. DIRECTORSûANDûEXECUTIVEûOFlCERS fund Bain Capital led a consortium in 2018 +IOXIAûSAIDûINûAûlLINGûTHATûITSûCHIPûSALESûTOû Books will close on September 25. The to buy the business from Toshiba. Huawei were likely to be subject to US deal will be priced on September 28 and the “No one really knows the actual equity sanctions that took effect on September 15 shares are due to be listed on October 6. return for Bain and the other investors and warned that the measures could trigger Bank of America, Credit Suisse, Daiwa, because they did not pay the acquisition all a price drop in the memory chip market. Goldman Sachs, JP Morgan, Mizuho, Morgan in cash or equity,” said a banker with The business is highly volatile. Kioxia Stanley, Nomura and SMBC Nikko are global knowledge of the deal. MADEûAûLOSSûOFûcBNûINûTHEûlSCALûYEARû coordinators. Citigroup and UBS are joint The structure of the 2018 acquisition was ENDINGû-ARCHû ûBUTûTURNEDûAûcBNûPROlTû international bookrunners. not fully disclosed. Bain said in a statement in the following three months. Candy Chan Kuaishou steals a march on Bytedance

Hong Kong IPO plan comes as TikTok parent faces storm in US

Chinese online short video company Bank of America, China Renaissance and Founded in 2011, Kuaishou has attracted KUAISHOU plans to raise up to US$5bn from a Morgan Stanley are leading the transaction. DCM Ventures, Morningside Venture Hong Kong IPO early next year, according to Kuaishou’s listing plan comes as ByteDance, Capital, Sequoia Capital, Temasek Holdings, people close to the deal, moving ahead of which operates TikTok outside China, is Tencent and Baidu as investors. The rival ByteDance in the race to go public. working on a deal with Oracle to address US company initially targeted users in lower-tier The Tencent-backed start-up, which competes government concerns over data privacy. cities and has since expanded to bigger cities. against ByteDance’s Douyin in the Chinese As part of the package, ByteDance is Citing data from monitoring agency Quest market, is targeting a valuation of about planning a US IPO of TikTok Global, the new Mobile, Kuaishou describes itself as China’s US$50bn, almost double the US$28bn it achieved company that will house TikTok and in fastest-growing short-video platform with 41.5% in its most recent funding round last year. which Oracle will own a stake, according to year-on-year user growth in the 12 months to The IPO could raise up to US$5bn if the Reuters. It is unclear whether TikTok Global *UNEûû)TSûmAGSHIPûPRODUCT û+UAISHOU ûHASû company sells a 10% stake, said one of the will include ByteDance’s businesses in other more than 300 million daily active users, and its people. Another person close to the deal, REGIONSû4HEûlLINGûOFûTHEû)0/ûCOULDûCOMEûINû live-streaming service more than 170 million. however, said the fundraising size is not set about a year, the report said. The Beijing-headquartered company has as yet as the deal is still at an early stage. ByteDance is expected to kick off MOREûTHANû ûEMPLOYEES ûANDûOFlCESûINû Kuaishou is keen to list before ByteDance preparations for its own listing in Hong Kong China, the US, India and Brazil. Its short- SOûASûTOûENJOYûlRST MOVERûADVANTAGE ûANDûTOû or Shanghai, or both, after settling the US video apps in the international markets are build a war chest to compete with the bigger issue, people with knowledge of the matter called Kwai and Zynn. rival, said a third source. have told IFR. Fiona Lau

International Financing Review September 19 2020 91

9 IFR Equities and SE 2351 p91-113.indd 91 18/09/2020 20:05:03 disposable medical devices for radiology, GANFENG LITHIUM RAISES FUNDS vascular, cardiology and oncology ASIA-PACIFIC procedures. GANFENG LITHIUM has raised HK$1.45bn It did not mention the size, timing and (US$188m) from a primary placement of listing venue of the proposed spin-off. 40m H-shares at HK$36.35 each. CHINA IFR earlier reported that Weigao was The shares were marketed in a HK$36-$37 considering listing its US-based unit Argon range and priced at a discount of 9.1% to last JINKE TO SEEK APPROVAL Medical Devices next year. It is likely that Tuesday’s close of HK$40. The deal Argon will be part of the listco. Weigao represents about 16.7% of the enlarged JINKE SMART SERVICES GROUP is planning to seek acquired Argon Medical for US$850m in H-share capital. listing approval this week for a Hong Kong 2017 as part of an overseas expansion drive. There is a 90-day lock-up period. IPO of about US$700m–$800m, according to Proceeds will be used for capacity people close to the deal. GENOR PRE-MARKETS IPO expansion, research and development, debt Pre-marketing of the deal will start in the repayment, potential investment and week of September 28 if approval is granted, GENOR BIOPHARMA started pre-marketing a working capital. said the people. Hong Kong IPO of about US$300m last Bank of America and CLSA are the joint The property management unit of Monday and books will open early this bookrunners. Shenzhen-listed Jinke Property Group is week. working with sponsor Citic Securities and Goldman Sachs, Jefferies and JP Morgan are NEUSOFT EDU TECH LAUNCHES HK IPO Huatai InternationalûONûTHEûPLANNEDûmOAT joint sponsors. According to an announcement from The Shanghai-based biotech, in which NEUSOFT EDUCATION TECHNOLOGY, the Jinke Property in April, the IPO will Hillhouse Capital owns a 35.6% stake, has 19 educational arm of software company comprise H-shares equivalent to 25% of the oncology and autoimmune drug candidates. Neusoft, has launched a Hong Kong IPO of enlarged capital, with a 15% greenshoe. Founded in 2007, it develops innovative up to HK$1.04bn (US$134m). Jinke Property holds a 75% stake in the unit, therapeutic antibodies and recombinant It is offering 167m shares, or 25% of the and the remaining shares belong to a fusion proteins and posted a 2019 loss of enlarged share capital, at an indicative price PRIVATEûEQUITYûlRMûWHICHûPLANSûTOûSELLûPARTû Rmb523m (US$74m), compared to a range of HK$5.18–$6.22 each, for a valuation of its holding. Rmb288m loss in 2018. of US$446m–$535m. There is a 15% Proceeds will be used to expand the size Singapore’s state investor Temasek greenshoe. of the business, acquire other property Holdings owns 6.3% of Genor. Five cornerstone investors are committed management companies, replenish working to invest US$53m in the deal; Greenwoods capital and for spending on IT services. MSPE SELLS FEIHE AGAIN (US$15m), Jihe Investment (US$11m), Foresight Fund (US$9m), Longrising Asset WEIGAO PLANS SPIN-OFF Shares in Chinese baby formula maker CHINA Management (US$9m) and Quanhe Capital FEIHE fell 4.4% to HK$18 on Thursday after a (US$9m). A spin-off of Hong Kong-listed SHANDONG HK$2.3bn (US$300m) sell-down. There is a six-month lock-up on the WEIGAO GROUP MEDICAL POLYMER‘s medical About 130m shares were sold at HK$17.88 company and cornerstone investors. devices unit is expected to raise about each in the sell-down last Wednesday. The The deal will price on September 22 and US$300m–$400m from a Hong Kong IPO price represents a 5% discount to the the shares are due to start trading on next year, according to people with Wednesday close of HK$18.82. September 29. knowledge of the matter. Morgan Stanley Private Equity is The private education provider mainly Bank of America, CLSA and UBS are leading understood to be the seller and CLSA is focuses on teaching IT professionals for the the transaction, said the people. involved in the transaction. software and IT services industry. Weigao announced last Monday that it is On September 1, Morgan Stanley Private )TûPOSTEDûAûPROlTûOFû2MBMû53M û considering a possible spin-off of its Equity also sold HK$2.3bn Feihe shares at for the three months ended March 31, more business in the research and development, HK$15.05 each. than double Rmb4.5m in the same period manufacturing, and sale and distribution of LASTûYEARû)TûHADûANûANNUALûPROlTûOFû Rmb175m in 2019. ASIA-PACIFIC EQUITIES ASIA-PACIFIC EQUITIES (EX-JAPAN) Proceeds will be used to upgrade and BOOKRUNNERS: 1/1/2020 TO DATE BOOKRUNNERS: 1/1/2020 TO DATE expand existing teaching facilities, expand Managing No of Total Share Managing No of Total Share its school network through acquisitions, bank or group issues US$(m) (%) bank or group issues US$(m) (%) repay bank loans and for working capital

1 Morgan Stanley 79 20,220.57 8.5 1 Morgan Stanley 69 17,988.38 8.4 and general business operations. 2 Goldman Sachs 75 14,718.47 6.2 2 Citic 73 13,184.28 6.2 Citic Securities is the sole sponsor. 3 Citic 73 13,184.28 5.6 3 CICC 65 12,847.11 6.0 GDS HK LISTING COMING SOON 4 CICC 65 12,847.11 5.4 4 Goldman Sachs 70 12,641.50 5.9 5 JP Morgan 50 11,043.50 4.7 5 JP Morgan 48 10,430.10 4.9 6 UBS 66 10,423.16 4.4 6 UBS 64 9,991.90 4.7 Nasdaq-listed Chinese data centre operator GDS 7 China Secs 40 9,964.93 4.2 7 China Secs 40 9,964.93 4.7 is planning to bring a Hong Kong 8 Citigroup 54 9,048.17 3.8 8 Citigroup 50 8,490.32 4.0 secondary listing of about US$1bn to the 9 Credit Suisse 47 8,216.50 3.5 9 Bank of America 39 6,795.90 3.2 market as early as October, said people with 10 Bank of America 43 7,291.38 3.1 10 Credit Suisse 44 6,447.37 3.0 knowledge of the matter. Total 1,895 236,791.24 Total 1,788 214,278.02 The company plans to seek listing

Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues approval from the Stock Exchange of Hong Source: Refinitiv SDC code: C4a1 Source: Refinitiv SDC code: C4a2 Kong in the next few weeks, said the people.

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Bank of America, CICC, Haitong International The books were multiple times covered There is a 15% greenshoe. and JP Morgan are the sponsors. with demand coming mainly from long- The shares will start trading on As of Thursday, GDS shares were up 50% term and fundamental investors. There September 25. this year at US$77.59, valuing it at was also participation from Chinese CICC and Citigroup are joint sponsors. US$12.4bn. money and US investors. GDS announced in July that it has Despite being a sell-down by Xiaomi’s JD DIGITS FILES FOR US$2.9bn STAR IPO partnered with Citic Private Equity to co-founder, the deal was liked by investors undertake a new data centre project in because of Lin’s commitment to a long JINGDONG DIGITS TECHNOLOGY, a spin-off from "EIJING ûWHICHûWILLûHAVEûAûTOTALûNETûmOORûAREAû lock-up and the donation of shares for 53ûANDû(ONGû+ONG LISTEDû*$COM ûHASûlLEDû of about 21,000 square metres. charitable purposes, according to a person with the Shanghai Stock Exchange for a close to the deal. proposed Rmb20bn (US$2.9bn) Shanghai EVERGRANDE VEHICLE SEALS Shares in Xiaomi hit a record high of Star IPO. PLACEMENT HK$26.95 on September 2 on better than The company plans to offer up to 538m expected earnings and the stock’s inclusion SHARESûFORûAûûmOATû4HEREûISûAûû CHINA EVERGRANDE NEW ENERGY VEHICLE GROUP has in the benchmark Hang Seng Index. greenshoe. raised HK$4bn (US$516m) through a top-up Goldman Sachs was the sole bookrunner. Previously known as JD Finance, JD placement. $IGITSûBEGANûLIFEûASûTHEûlNTECHûARMûOFû*$ The electric vehicle subsidiary of FULU PRICES IPO AT TOP com and was spun off from the group in Evergrande issued 176.6m shares, or 2% of July 2017. It has since expanded beyond THEûENLARGEDûSHAREûCAPITAL ûATûAûlXEDûPRICEûOFû FULU HOLDINGS raised HK$890m (US$115m) lNANCE ûANDûCLAIMSûTOûPROVIDEûhAûFULLûRANGEû HK$22.65 per share. Pricing was a discount from a Hong Kong IPO after pricing the OFûDIGITALûSOLUTIONSûFORûlNANCIALû of 20% to the pre-deal close of HK$28.30. deal at the top of the price range. institutions, merchants, enterprises, The company, formerly known as The company, which provides a sales governments and other customers”. Evergrande Health Industry Group, posted platform for virtual goods used in online *$COMûINû*UNEûCONVERTEDûITSûPROlT revenues of Rmb4.51bn (US$668m) for H1 games and apps, sold 100m shares for a sharing rights into a 35.9% equity interest 2020, up 70.3% from a year earlier. Its net loss ûFREE mOATûATûTHEûTOPûOFûTHEû(+n in JD Digits and spent Rmb1.78bn to widened to Rmb2.46bn from Rmb1.98bn. $8.90 range. acquire an additional 0.9%. This gave it a )NûTHEûlRSTûHALF ûûOFûREVENUESûCAMEû Books were heavily oversubscribed. The 36.8% stake in JD Digits, but only 18.7% of from the health management business and retail tranche was about 1,200 times the voting rights. the rest from the new energy vehicle covered, triggering the clawback of 50% of Under JD Digits’ dual-class share segment. the deal to retail investors. structure, JD Group founder and CEO Investors who subscribed to the shares There is a 15% greenshoe. Richard Liu and three related parties include Tencent Holdings, Sequoia Capital, Five cornerstone investors bought control a combined 74.77% of the voting Yunfeng Capital and Didi Chuxing. US$22.3m of the deal; Chinese private rights with a combined 50.35% equity Evergrande New Energy Vehicle said none EQUITYûlRMû#)#&(û53M û3UCCESSFULû stake. of them are expected to become a Lotus, an entity controlled by Henderson JD Digits posted a net loss of Rmb679.6m substantial shareholders of the company. Land chairman Peter Lee Ka-kit (US$6m), INû(û ûREVERSINGûAûNETûPROlTûFORûû The deal was marketed with 88.3m shares Wuhan Optics Valley (US$4.3m), of Rmb773m. Revenues reached and an upsize option of 44.2m shares at investment company Wuhan Baijie Rmb10.3bn in H1 2020, versus Rmb18.2bn launch. (US$3m) and gaming company Perfect in the full year 2019. There is a 90-day lock-up on the company. World (US$1m). Proceeds will be used to upgrade digital Haitong International and Huatai CMB International was the sole sponsor. solutions in four sectors, expand a International are the bookrunners. technology centre in Beijing, and replenish The company is also planning a Shanghai MING YUAN CLOUD AT TOP working capital. Star market listing. Guotai Junan Securities and Minmetals MING YUAN CLOUD GROUP is planning to price Securities are the sponsors, according to the XIAOMI CO-FOUNDER SELLS SHARES its Hong Kong IPO at the top of the price LATESTû)0/ûlLINGS range to raise HK$6.17bn (US$797m), The company said on September 4 it had Lin Bin, co-founder of Chinese smartphone according to people close to the deal. dropped Citic Securities and Huajing maker XIAOMI, has raised HK$7.9bn Books, which are well covered, closed Securities as IPO tutors, having begun the (US$1.02bn) through the sale of part of his last Thursday at 5pm in each region, tutorial process with the four brokerages stake in the company. instead of Friday as originally planned. The at the end of June. Under China’s securities The 350m shares, representing 1.5% of retail offer closed at noon on Friday. regulations, a deal can have a maximum of the company, was priced at the bottom of The Chinese software services provider two sponsors. Citic Securities and Huajing an HK$22.55–$22.85 range for a discount of for property developers is selling 374m Securities are still involved and are likely 4.25% to Monday’s close of HK$23.55. shares or 20% of the enlarged share capital TOûBEûAPPOINTEDûBOOKRUNNERSûANDûlNANCIALû 4OûEXPRESSûCONlDENCEûINûTHEûLONGûTERMû at HK$15–$16.50 each. advisers later on, according to people close value of Xiaomi, Lin, who is also the vice- Six cornerstone investors are in with a to the deal. chairman and executive director, has agreed total amount of US$276m or about 34.6% TOûAûlVE YEARûLOCK UPûEXCEPTûFORûUPûTOûMû of the base deal size at the top end of the EVEREST TO PRE-MARKET IPO Class B shares. price range. They are Hillhouse Capital Half of the 120m Class B shares will be (US$86m), GIC (US$50m), China Structural Chinese biotech company EVEREST MEDICINES donated to the Bin Lin and Daisy Liu Family Reform Fund (US$50m), Sequoia Capital plans to start pre-marketing a Hong Kong Foundation and the other half to the Xiaomi (US$30m), BlackRock Funds (US$30m) and IPO of about US$450m on Monday, said Foundation. Fidelity International (US$30m). people close to the deal.

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9 IFR Equities and SE 2351 p91-113.indd 93 18/09/2020 20:05:03 Bank of America and Goldman Sachs are joint )TûPOSTEDûAûûNETûPROlTûOFû2MBBN û and insurance companies, to subscribe for sponsors. a 33% yearly increase, on revenues of approximately 30% of the IPO. Founded in 2017, Everest has eight drug Rmb14.9bn. )TûPOSTEDûAûûNETûPROlTûOFû2MBBNû candidates focusing on oncology, China Securities is the sponsor and on revenues of Rmb171bn. autoimmune disorders, and cardio-renal and bookrunner with Capital Securities. Proceeds will be used to build 19 infectious diseases. The company also announced plans on PROCESSINGûUNITSûFORûGRAIN ûmOURûANDûCOOKINGû The company announced in June that it August 28 to raise Rmb1.84bn from a REIT oil in 12 Chinese cities. had raised US$310m from a private comprising two sewage treatment projects. China Securities is the sponsor and joint lNANCINGû)TSûINVESTORSûINCLUDEû')# û The company said it aimed to be the pilot bookrunner with CICC. Temasek Holdings, Hillhouse Capital and PROJECTûINûTHEûlRSTûBATCHûOFûINFRA 2%)4S Debutants on the ChiNext board last week BlackRock. SURGEDûONûTHEIRûlRSTûDAYû3HARESûOFûWINNER )TûPOSTEDûAûPROlTûOFû2MBMû53M û CICC CLEARS HEARING FOR MEDICAL rose 70% to Rmb126.25 on for the three months ended March 31 this SHANGHAI IPO September 17, up from the issue price of year, up from Rmb99m in the same period Rmb74.30. last year. It had an annual loss of Rmb215m Hong Kong-listed CHINA INTERNATIONAL CAPITAL The medical dressings manufacturer in 2019. CORPORATION has cleared a hearing at the raised Rmb3.72bn (US$551m) from its IPO China Securities Regulatory Commission for through sponsor CICC. HOZON AUTOMOBILE PLANS STAR IPO its proposed Shanghai IPO. Shares of SHENZHEN EXC-LED TECHNOLOGY 4HEûBROKERAGEûISûLOOKINGûTOûmOATûMû!û surged 129% to Rmb64.12 on Wednesday’s Chinese electric vehicle manufacturer HOZON shares, representing 9.5% of its enlarged debut. NEW ENERGY AUTOMOBILE is conducting a capital. The offer could raise Rmb4.9bn The LED lamps manufacturer raised C-round fundraising ahead of a potential (US$724bn) based on the investment bank’s Rmb1.09bn (US$161m) from its IPO after Shanghai Star IPO in the middle of next net asset value per share of Rmb10.80 in setting the issue price at Rmb27.97 a share. year, according to people close the deal. 2019. Dongxing Securities was the sponsor. The round will value the company at CICC had more than trebled the number Rmb10bn (US$1.5bn), the people told IFR. of shares on offer in its IPO to 1.44bn from XIAMEN BANK PRICES SHANGHAI IPO !ûSPOKESMANûFORû(OZONûCONlRMEDûTHATû MûINû*ULY ûBEFOREûREDUCINGûTHEûmOATûBACKû the company plans a Star IPO next year. TOûITSûORIGINALûTARGETûINûANû!UGUSTûlLING XIAMEN BANK has set the issue price at Hozon, founded in 2014 and Proceeds will be used to replenish capital Rmb6.71 a share for a Rmb1.77bn headquartered in Shanghai, has done four and working capital. (US$260m) Shanghai IPO. rounds of fundraising starting in 2017 to 4HEû#32#ûASKEDû#)##ûINûITSûlRSTûREVIEWû Bookbuilding for the deal, comprising raise a combined Rmb10bn. It has produced enquiry if it faced any legal risks over its role 264m A-shares, will run for a day on October two EV platforms and plans to have in the US IPO of Luckin Coffee, which has 13, instead of September 16 as originally launched three models by the end of this been hit by several class-action lawsuits planned, as the bank is selling shares at a year, according to its website. SINCEûITûSAIDûINû&EBRUARYûITSûûSALESûlGURESû valuation higher than its listed peers. Under Chinese electric vehicle manufacturers had been overstated. Chinese regulations, this means the issuer XPeng and Li Auto raised more than US$1bn #)##ûPOSTEDûAûNETûPROlTûOFû2MBBNûINû has to give investors more time to consider each from US IPOs in the past two months. 2019 on revenues of Rmb22.8bn. It earned the offering. The China Securities Regulatory 2MBBNûINûTHEûlRSTûHALFûOFûûANDû Xiamen Bank’s P/E ratio based on 2019 #OMMISSIONûHASûGIVENûlNALûAPPROVALûFORû generated revenues of Rmb10.5bn. earnings is 10.35, higher than the industry Star IPOs from FRONTIER BIOTECHNOLOGIES, Its H-shares have risen 52% in the past six average of 6.05 in the past month. SHENZHEN CONSYS SCIENCE & TECHNOLOGY and months. Proceeds will be used to replenish capital. SHANGHAI TITAN SCIENTIFIC to raise a combined Oriental Citi Securities and Galaxy Securities The Xiamen Municipal Finance Bureau is Rmb3.8bn (US$561m). are working on the deal. the biggest shareholder in the lender with a Meanwhile, polysilicon manufacturer 20.2% stake. XINJIANG DAQO NEW ENERGY, a subsidiary of YIHAI KERRY EYES CHINEXT IPO RECORD China Securities is the sponsor. .93% LISTEDû$AQOû.EWû%NERGY ûHASûlLEDûWITHû the Shanghai Stock Exchange for a proposed The China Securities Regulatory Rmb5bn (US$732m) Star IPO and HUNAN Commission has approved the IPO INDIA CHANGYUAN LICO and CHANGCHUN BCHT registration of YIHAI KERRY ARAWANA HOLDINGS BIOTECHNOLOGY have cleared hearings at the for a Rmb13.9bn (US$2bn) Shenzhen BLACKSTONE SELLS UPSIZED ESSEL exchange for Star IPOs. ChiNext listing, potentially the biggest yet BLOCK on the start-up board. BEIJING CAPITAL PRICES RIGHTS ISSUE The spin-off from Singapore’s Wilmar 0RIVATEûEQUITYûlRMû"LACKSTONEûHASûRAISEDû International plans to offer up to 542m Rs18.5bn (US$251m) through an upsized Shanghai-listed BEIJING CAPITAL has set the ! SHARESûFORûAûûFREE mOAT 72.58m-share block in India’s ESSEL PROPACK issue price at Rmb2.29 a share for a Price consultation will be set on at Rs255 a share. Rmb5.3bn (US$783m) rights issue to September 22, and books will open on Blackstone, through its Epsilon Bidco replenish working capital and repay bank September 25. entity, upsized the offer from 60.7m shares. debts. Yihai Kerry will be listed on ChiNext in The shares sold represent 23% of the The water supply and sewage treatment mid-October. company. company, part-owned by the Beijing Yihai Kerry, one of the largest agricultural The sale price is at a discount of 6.5% to government, plans to offer 1.7bn shares on and food processing companies in China, the pre-deal close of Rs272.75. Essel shares a 3-for-10 basis. Trading will be halted on has attracted strategic investors, including have risen 45% this year. September 21–28. state-owned funds, sovereign wealth funds There is a 90-day lock-up.

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Before the block, Blackstone owned 75% of India’s largest rigid plastic packaging company. IWH puts its faith in Chinese banks UBS and Systematix Shares & Stocks were the placement agents. MALAYSIA Long-time IPO hopeful plans up to M$5bn Bursa Malaysia listing next year

MOBIKWIK PLANS IPO IN 2022 Malaysia’s ISKANDAR WATERFRONT HOLDINGS is the capital was reinstated last year after the trying its luck again in the IPO market armed government scrapped it in 2017. Fintech platform MOBIKWIK aims to launch an with a Chinese bank-dominated syndicate. Bandar Malaysia was started by 1Malaysia IPO in 2022. In a news release, the company The land owner, which has been Development in 2011 and a 60% stake was sold said it was kick-starting the IPO campaign unsuccessfully trying to list since 2013, has to the JV between IWH and CREC in 2015. by promoting Chandan Joshi as co-founder hired Bank of China, CIMB, Citic CLSA and CIMB is expected to work on getting the and CEO of its payments business. Industrial and Commercial Bank of China to work regulatory approvals for the IPO and scout He has been the senior vice-president of on a M$4bn–$5bn (US$965m–$1.2bn) Bursa for local and international investors, while the the payments business for the past 2.5 years. Malaysia IPO. Chinese banks will be using their domestic In the new role, Joshi will focus on The preliminary prospectus is likely to be networks to prospect large institutional investors. hIMPROVINGûlSCALûPERFORMANCEûANDûGETTINGû submitted later this year, with the IPO to follow in “It’s easier when Chinese banks are involved the company in shape for the IPO in 2022”, the second half of 2021. At the top of the range, in marketing an IPO backed by a Chinese entity. MobiKwik said. the listing would be the largest in Malaysia since Unlike foreign banks, we don’t doubt everything The company’s revenue grew 133% year- IHH Healthcare raised M$6.3bn in 2012 through the sponsor says and are able to present the on-year to Rs3.79bn (US$52m) in the a dual IPO on Bursa Malaysia and Singapore company better,” a Singapore-based official at a lNANCIALûYEARûTHATûENDEDû-ARCHûûû)TSû Exchange. Chinese bank said. operating loss narrowed 91% to Rs85m. This is the first time a local IPO will have so Bankers believe the success of IWH’s IPO will Founded by Bipin Preet Singh and many Chinese banks on it. hinge on the progress of the Bandar Malaysia Upasana Taku, MobiKwik’s payments “Most foreign banks are sceptical if the IWH project. network has 120 million users, three IPO will ever happen given the uncertainty over Analysts said IWH is currently valued at about million merchants and 300 billers. the Bandar Malaysia [transport hub] project. M$20bn based the more than 4,000 acres of But Chinese banks may be more confident land it owns and a minimum 25% free-float because of the participation of one of their would imply an IPO of around M$5bn. JAPAN own companies [China Railway Engineering This means the planned IPO is almost four Corporation] in the JV,” an ECM official at a times bigger than the US$300m float planned SOFTBANK PRICES JUMBO SELL-DOWN foreign firm said. in 2013, when CIMB, Deutsche Bank, JP Morgan IWH is working through a joint venture on and RHB had the mandate. SoftBank Group has raised ¥1.1trn the M$140bn Bandar Malaysia development, IWH’s shareholders include Malaysian (US$10.7bn) from a jumbo sell-down in which will be the hub for a proposed high-speed businessman Lim Kang Hoo and the state Japanese mobile phone unit SOFTBANK CORP, rail link between Kuala Lumpur and Singapore, government of Johor. after exercising the greenshoe in the among other things. The mega-project near Anuradha Subramanyan international tranche. The parent company raised ¥1.07trn by issuing 894m secondary shares at a 3.02% Including the greenshoe, the deal is set to buyback to support its own stock price and discount to September 14’s market close of be the biggest follow-on offering since the said SoftBank Group does not intend to ¥1,242, the tight end of the 3%–5% discount government’s ¥1.3trn disposal of Japan Post reduce its remaining stake. range. It sold an additional 33.5m secondary shares in September 2017. In May, SoftBank Group raised ¥316.8bn shares at the issue price of ¥1,204.50, raising There is a 180-day lock-up on the issuer from the sale of a 5.01% stake in the mobile ¥40.4bn, late the previous week. and selling shareholder. unit through an overnight trade, the largest Shares of SoftBank Corp dropped 13.2% Bank of America, Daiwa, JP Morgan, Mizuho deal of its kind since Altaba sold its ¥481bn between the deal announcement on August and Nomura were the global coordinators stake in Yahoo Japan in September 2018. 28 and the pricing day. Since the pricing the and bookrunners with Citigroup, Credit stock has climbed 5%, closing at ¥1,308.50 Agricole and SMBC Nikko in the international MITSUI FUDOSAN LOGISTICS TAPS EQUITY last Thursday, but is still down 10% so far offering. this year. The deal will reduce SoftBank Group’s MITSUI FUDOSAN LOGISTICS PARK is looking to The international tranche was more than stake in its subsidiary from 62% to 40.3% and raise up to ¥50.6bn (US$480m) from a global lVEûTIMESûCOVEREDûWITHûNEARLYûûINVESTORSû comes as SoftBank CEO Masayoshi Son has follow-on offering of units, based on a participating, prompting the arrangers to been selling down the group’s core assets to minimum 2.5% discount to September 16’s claw back about 5% of the deal from the stabilise its balance sheet and fund a market close of ¥540,000. domestic retail portion. massive stock buyback. It is planning to issue 96,160 units in a International investors will be allocated Last Monday SoftBank said that it had discount range of 2.5%–5% to the market 29.5%, domestic institutions 1% and retail agreed to sell British chip designer Arm to close on the pricing day. There is an up to 5% buyers 69.5%. Institutional allocations were Nvidia Corp for as much as US$40bn in a 4,810 units greenshoe. skewed towards long-only funds, which cash and share deal. Executives have also About 30% of the deal will be earmarked took almost half of that portion. The top 10 rekindled discussions on taking the group for international investors and the rest for investors took 60%. private, the Financial Times and Reuters domestic institutions and retail buyers with There is 100.6m share greenshoe in the reported on September 14, sending a 36%/64% split. domestic portion that can be exercised by SoftBank Group’s stock up 9%. There is a lock-up period of 90 days on the September 29. SoftBank Corp also announced a ¥100bn issuer.

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9 IFR Equities and SE 2351 p91-113.indd 95 18/09/2020 20:05:03 Proceeds will be used to part fund the The shares represent a 3.25% stake in the trade in Hong Kong-listed logistics purchase of two properties, with the food company, whose products include infrastructure company ESR Cayman. remainder to be funded by borrowings. canned tuna, milk powder and dried It sold 140m shares, upsized from 110m Books will open on September 25 and COCONUTû!NûUNSPECIlEDûUPSIZEûOPTIONûWASû shares at launch, at the bottom of the close on September 28. The price will be not exercised. indicative price range of HK$22.50–$23.50, decided from September 19 to October 2. Books were well covered, with long-only representing a discount of 9.1% to the pre- Daiwa, Nomura and SMBC Nikko are joint institutions, domestic investors and deal close of HK$24.75. global coordinators bookrunners for the sovereign wealth funds taking 80% of the SK Holdings now holds 6.4% of ESR international offering. deal. Cayman, down from 11% when it started to The offer price was at a 4.2% discount to invest in the company in August 2017. ESR I-NE IPO RAISES ¥6.2bn THEûPRE DEALûCLOSEûOFû0Sû#ENTURYû0ACIlCû Cayman went public in November last shares are up 15% this year. year via a HK$14bn IPO priced at HK$16.80 Japanese cosmetics and beauty company I-NE There is a 90-day lock-up on the vendor. a share. has raised ¥6.2bn (US$58m) from a TSE IPO. Credit Suisse is the sole bookrunner. There is a 90-day lock-up on the vendor. The offering of 1.7m primary shares and Bank of America and Morgan Stanley are the 428,400 secondary shares was priced at the joint bookrunners. top of the indicative range of ¥2,050– SOUTH KOREA In June, three institutional shareholders, WP ¥2,890, giving the company a market OCIM One, a Warburg Pincus unit, Montsoreau capitalisation of ¥26.2bn. There is a 321,300 BOOK COVERED FOR BIG HIT’S IPO Investment and Mercer Investments primary shares greenshoe. (Singapore), raised a combined HK$1.95bn Retail buyers will be allocated about 70% The book is covered for music group BIG HIT from a sell-down of shares in ESR Cayman. of the deal and institutional investors the ENTERTAINMENT’s up to W963bn (US$811m) remainder. KRX IPO, according to a person close to the LG CHEM EYES IPO OF BATTERY Established in 2007, I-ne runs a range of deal. The listing could be South Korea’s BUSINESS beauty-focused brands including Botanist, largest in three years. Salonia and Laka, with sales channels The books opened on September 14 and Chemical company LG CHEM is to spin off its covering Asia, Australia and North America. close on September 25. The deal will be battery business in December and will The shares are expected to list on the priced on September 28 and the shares are consider an IPO for the new unit, the bourse on September 25. due to start trading on October 15. company said last Thursday. SMBC Nikko is the sole bookrunner. The music label, which features K-pop The spin-off, tentatively called LG groups such as BTS and TXT, is offering Energy Solutions, is a key supplier of 7.13m new shares or 21.1% of the enlarged batteries for electric vehicle makers such PAKISTAN share capital in an indicative price range of as Tesla and GM. W105,000–W135,000. LG Chem said the timing was right to AGHA STEEL PLANS Rs5.04bn IPO The price range implies a potential separate the business as the EV battery valuation of W3.5trn–W4.6trn. BUSINESSûWASûBEGINNINGûTOûYIELDûAûPROlTû AGHA STEEL INDUSTRIES plans to launch an up to At the top of the range, the deal would and seeing rapid growth. Rs5.04bn (US$30m) IPO later this month or surpass SK Biopharmaceuticals’ W959bn The battery unit aims to achieve in early October, a person with knowledge IPO in July this year to be the country’s revenues of W30trn (US$25.5bn) in 2024, of the transaction said. LARGESTûmOATûSINCEû#ELLTRIONû(EALTHCARESû more than double this year’s sales estimate !BOUTûMûSHARESûORûAûûFREE mOATûAREû W1trn KRX listing in July 2017. of W13trn. likely to be sold in a Rs30–Rs42 range. About 60% of the deal will be allocated to LG Chem said it would consider a stock At the top of the range, the issue will be international investors, 20% to retail market listing for the subsidiary, without Pakistan’s largest private sector IPO, beating the investors and the rest to an employee stock giving further details. 2SBNûmOATûBYûSOCKSûMAKERû)NTERLOOPûINû ownership plan. Agha Steel has an annual manufacturing Big Hit recently acquired a majority stake capacity of 250,000 tons of steel. The funds in Seoul-based peer Pledis Entertainment, THAILAND from the IPO will be used to expand the which houses K-pop boy bands Seventeen steel business. and NU’EST, for an undisclosed amount. PTTOR PLANS IPO IN Q1 2021 The company earned revenues of Rs13bn Founder and executive producer Bang Si- INûTHEûlNANCIALûYEARûTOû-ARCHûû ûUPû hyuk is the company’s largest shareholder PTT OIL AND RETAIL, the wholly owned retail ûFROMû2SBNûINûû.ETûPROlTûROSEû with a 43% stake. Gaming company unit of state oil giant PTT, plans to launch an 61% to Rs1.24bn from Rs769m. Netmarble is the second biggest investor up to US$2bn Stock Exchange of Thailand Arif Habib is the sole bank on the having bought a 25.7% stake in 2018 for )0/ûINûTHEûlRSTûQUARTERûOFûNEXTûYEAR ûPEOPLEû transaction. 7BNû6ENTUREûCAPITALûlRMû34)#û with knowledge of the transaction said. Investment is also a shareholder. The IPO was approved by the Thai JP Morgan, Korea Investment & Securities and Securities and Exchange Commission this PHILIPPINES NH Investment & Securities are lead week. bookrunners and Mirae Asset Daewoo is lead Bank of America, Bualuang, Finansa, JP GIC SELLS CENTURY PACIFIC BLOCK manager. Morgan, Kasikorn, Morgan Stanley, Phatra and Tisco Securities are the banks on the !RRANû)NVESTMENT ûANûAFlLIATEûOFû3INGAPORESû SK SELLS ESR CAYMAN BLOCK transaction. GIC, has raised Ps1.96bn (US$40m) through The IPO will comprise 2.7bn primary the sale of 115m shares in CENTURY PACIFIC South Korea’s SK Holdings has raised shares or 22% of the capital. There is a FOODûATûAûlXEDûPRICEûOFû0SûPERûSHARE HK$3.15bn (US$406m) through a block greenshoe option of 300m shares.

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PTTOR owns coffee shops and petrol They have submitted orders at €20 per stations and is Thailand’s largest fuel share, a level that would give the software FINLAND retailer. company a post-money market cap of around €650m. SWEDBANK EXITS ENENTO SCG PACKAGING TO OPEN IPO THIS WEEK !TûTHATûLEVEL û5NIlEDPOSTûSTOCKûWOULDû come at a 10% discount to its nearest peer, Swedbank sold its entire 7.3% stake in SCG PACKAGING plans to open books for a France’s Esker. The discount to US peer Bill. Finnish IT company ENENTO GROUP on US$1bn–$1.5bn IPO this week. com would be around 75%. Thursday evening, cashing in around The Thai company had earlier The idea had been to open books for one €55m. contemplated raising up to US$1bn but it is day only on Friday, given the stock is The sell-down represented more than a aiming for more given high domestic essentially pre-placed, but bankers are aiming year’s volume in the highly illiquid stock, liquidity and upbeat prospects for the to capture tech funds based on the US west based on fewer than 6,000 shares changing packaging industry amid the Covid-19 coast so decided to stretch it until Monday. hands per day. pandemic. 4HEûlRSTûDAYûOFûTRADINGûINûTHEûSHARESûWILLû A total of 1.766m shares were sold at €31 In an earlier stock exchange disclosure, be Tuesday. each, an 8.8% discount to Thursday’s close SCGP indicated the IPO would comprise There are four selling shareholders; PE of €34. 1.19bn shares or 28% of the expanded 'ROUPûWHICHûHOLDSûABOUTû û3MARTlNû Danske Bank and Swedbank were capital. Capital which holds 11.24%, Michel Delloye bookrunners. Bualuang, Morgan Stanley, Siam Commercial with 9.15% and EJF Funding Designated The book was already 1.5 times covered Bank and UBS are the banks on the Activity Company with a 3.30% stake. at launch, a banker involved said, and transaction. The company provides SMEs with a achieved 2.5 times coverage. secure, cloud-based platform to streamline It was a highly concentrated book of 40 ANDûAUTOMATEûADMINISTRATIVEûANDûlNANCEû lines, and the top 10 orders took more functions. than 80% of the offering. Berenberg is global coordinator, and A mix of Nordic, UK, US and Finnish EUROPE/MIDDLE bookrunner with +EMPENûû#O û"ELlUSûANDû demand came in for the deal. EAST/AFRICA Degroof Petercam. The shares dropped on Friday but stayed above ABB pricing. By 2:30pm in London they were down 3.8% at €32.70. BELGIUM DENMARK ACCELERATED BOOKBUILD BEGINS INSIDERS CUT STAKES IN NTG FRANCE FOR UNIFIEDPOST IPO AFTER DIRECT LISTING LENDERS TAKE BULK OF €330m A short bookbuild began on Friday Danske Bank and Nordea were bookrunners TECHNICOLOR RIGHTS ISSUE afternoon for Belgian company UNIFIEDPOST‘s on a DKr404m (US$65m) private placing in around €219m IPO, due to close on Monday NORDIC TRANSPORT GROUP on Monday night, the Video specialist TECHNICOLOR‘s €330m rights at 5pm in London. deal being a legacy of the decision in issue was always likely to go to its lenders Shares are on offer at €18–€20 each. October to pivot to a direct listing from an with shares trading below the €2.98 issue There is a primary tranche of around up to DKr940m Nasdaq IPO. price throughout. €175m, and a secondary increase option of NTG listed in October with a DKr89 Take-up for the capital increase was around €44m. A secondary greenshoe could reference price for a market capitalisation low, with just 18.1% subscribed for by further increase proceeds by €33m at the of DKr2bn, having marketed the IPO at shareholders. Stock was offered on a bottom of the price range. DKr71–DKr89 per share. The stock closed at 43-for-6 basis at €2.98, so non-participants During pre-marketing analysts were able DKr88.50 on its debut. are massively diluted and lenders to carry out 209 virtual pre-marketing A wall-crossing process in advance of collectively now own more than 70% meetings in six days, and the decision was Monday’s trade provided demand from of the business. taken to speed up the process from the Nordic investors for 3.4m shares, initial timetable. representing 12.4% of the share capital. EMEA EQUITIES But a hold-up with the Belgian regulator Some of those in the wall-cross had provided BOOKRUNNERS: 1/1/2020 TO DATE due to the acceleration of the initial reverse enquiry and names had been picked Managing No of Total Share timetable meant a management roadshow up in recent quarters since the direct listing. bank or group issues US$(m) (%) kicked off on September 9 without books There was a bookbuild but only to the wall- 1 Goldman Sachs 54 10,115.14 9.1 opening. crossed names. 2 JP Morgan 66 9,897.80 8.9 In the meantime bankers built a shadow Pricing came at DKr121 per share, an 8.7% 3 Morgan Stanley 38 9,736.92 8.7 book of demand nearing €1bn. Around half discount to the DKr132.50 Monday close. 4 Citigroup 49 9,116.93 8.2 of the deal is backed by six institutional The sellers were a mix of minority 5 Bank of America 37 7,904.06 7.1 cornerstone investors, who are chipping in shareholders and NTG employees, including 6 Credit Suisse 35 7,020.13 6.3 €98m. current and former members of the board of 7 Barclays 38 5,417.39 4.8 They include Capital International directors, executive management, and 8 UBS 22 3,967.15 3.6 Investors, Swedbank Robur Fonder, Legal former CEOs. 9 HSBC 27 3,659.89 3.3 & General Investment Management, Post-money, H5 Capital, the holding 10 BNP Paribas 30 3,485.52 3.1 Invesco Asset Management, WCM company of founder, former CEO and Total 726 111,742.14

Investment Management and Sycomore current NTG board member Jorgan Hansen, Including all domestic and international deals and rights issues Management. retains a 17% stake. Source: Refinitiv SDC code: C4cr

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9 IFR Equities and SE 2351 p91-113.indd 97 18/09/2020 20:05:03 Bpifrance took up all of the rights The range represents estimated EV/Ebitda attached to its 7.58% stake, as expected, GERMANY for 2021 of 8.5-10.6 on consensus, versus key representing 8.37m shares and about €25m peer Trigano at 9.8. Sweden’s Dometic, a of the issue. SECOND-DAY COVERAGE AFTER manufacturer of appliances for caravans and The remaining 90.69m shares are HENSOLDT OPENS BOOKS boats so an imperfect peer, trades at 11.7 for subscribed for by holders of Technicolor’s estimated 2021. term loans and revolving credit facility in a Defence supplier HENSOLDT, formerly Airbus Books are due to close on September 22, debt-for-equity exchange. Defence Electronics, started bookbuilding with a trading debut on September 23. Lenders will also subscribe for 92.18m last Wednesday for a Frankfurt IPO of about Jefferies is sole global coordinator, with new shares at €3.58 in exchange for loans. €400m. ABN AMRO and UniCredit/Kepler Cheuvreux as Shareholders will be given 15.4m Books were covered on the base deal size joint bookrunners. warrants, on the basis of one per existing by Thursday afternoon, having opened SHARE ûWITHûlVEûWARRANTSûGIVINGûTHEûRIGHTûTOû following just over a week of pre-marketing. INSTONE GETS 98.5% TAKE-UP FOR subscribe for four new shares at €3.58 over a An upsize and greenshoe option would lift €182m RIGHTS ISSUE four-year period. proceeds considerably, and the deal could Lenders will also provide €420m of debt see Hensoldt valued at up to €1.6bn. Developer INSTONE REAL ESTATE has wrapped and receive 17.7m warrants exercisable for The base deal size will be about €400m, up its €182m rights issue with 98.5% take-up. three months, giving the right to subscribe including €300m in primary proceeds. The The fully underwritten capital increase to up 17.7m new shares at €0.01 each. rest will be secondary proceeds raised by KKR. comprised 10m shares on a 4-for-15 basis at A plunging share price in light of the The private equity owner is also behind €18.20, a 23.1% discount to TERP of €23.67. coronavirus pandemic forced Technicolor an upsize option of 6.5m secondary shares Proceeds will be deployed on acquisitions to abandon previous plans for a €300m that could add €78m–€104m to the base over the next six to 18 months. rights issue that had been due in the deal, as well as a 15% secondary greenshoe Instone shares closed at €21.60 on second quarter. The original capital of up to 6m shares. Tuesday following the result. increase had standby underwriting from JP A price range of €12–€16 has been set. Credit Suisse and Deutsche Bank were global Morgan and Natixis but was called off in 4HEûRESULTINGûFREE mOATûCOULDûBEûASûLARGEûASû coordinators, with -AINlRSTûand UniCredit as late May. 44% if the upsize and greenshoe are lead managers. Shares were trading above €18 prior to exercised. the fundraising announcement in February. Bank of America, Deutsche Bank, JP Morgan and They closed on Thursday at €2.6805. KKR Capital Markets are global coordinators, ISRAEL Credit Suisse and Natixis were bookrunners and bookrunners with Citigroup, Credit on the rights issue. Agricole, Commerzbank and UniCredit/Kepler KORNIT DIGITAL AND AMAZON Cheuvreux. Mizuho is co-manager. PRINT NEW DEAL CREDIT AGRICOLE UNWINDS Bookbuilding will wrap up on September CARREFOUR HEDGE ûWITHûTHEûlRSTûDAYûOFûSHAREûTRADINGûSETûFORû With headwinds from Covid-19 behind it September 25. and an acquisition in tow, Israeli industrial Credit Agricole disposed of 3.1% of Proceeds will support growth, sustain its printer maker KORNIT DIGITAL raised supermarket CARREFOUR last Monday evening investment strategy and strengthen its US$230.5m from a follow-on stock sale. to unwind a hedge position related to balance sheet, with the fresh cash allowing After two days of marketing, Citigroup, derivative transactions entered into with a the company to reach net leverage of about Barclays and Goldman Sachs late on 'ROUPEû!RNAULTûAFlLIATE 3x by the end of 2020. Wednesday priced 4.1m shares, including The ABB raised €345m, with 25m shares KKR and Hensoldt have agreed to lock-ups 1.7m from strategic partner Amazon, at sold representing around 11 days of trading. of six months. 53ûORûAûûlLE TO OFFERûDISCOUNTû4HEû Groupe Arnault’s 5.5% stake in Carrefour offering was increased in size from 3.6m is unchanged post-money, and it has agreed EVERY WOMAN, EVERY MAN JOIN THE IPO shares at launch, with 1.6m from Amazon. to a 120-day lock-up. It has 8.5% of the voting Kornit shares closed on Thursday at rights in the supermarket. Virtual books opened on Monday for US$57.09, comfortably above the offering Citigroup and Credit Agricole were German caravan and campervan maker price. bookrunners on the deal. KNAUS TABBERT, with coverage on the The shares sold by Amazon relate to a The sell-down was covered from a wall- MINIMUMûûFREE mOATûONû4UESDAYûANDû 53MûlVE YEARûPURCHASEûAGREEMENTû cross and was multiple times then on the full size on Thursday. struck in 2016 that gave the e-commerce oversubscribed. Although pre-marketing has been virtual giant warrants exercisable at just US$13.04, Guidance of €13.80–€13.90 per share was and bookbuilding is too, some committed the 30-day VWAP at the time. sent around 90 minutes after launch, and investors were able to meet management at Amazon elected to exercise the 2.05m lNALûPRICINGûFELLûTOûTHEûBOTTOMûOFûTHEûRANGEû the Caravan Salon exhibition in Dusseldorf warrants currently vested on a cashless for a 5% discount to Monday’s close of that took place in late August and early basis, resulting in the 1.7m shares sold. €14.53. September. Simultaneously, the companies struck a Shares stayed above water last Tuesday The base deal is €318m, with the €58-€74 NEW û53MûlVE YEARûAGREEMENTûTHATû and closed at €14.065, down 3.2% on the day. per share range representing a market gives Amazon warrants to purchase up to The top 10 orders were primarily wall- capitalisation of €602m-€768m. The bulk of 3.4m shares at US$59.26, also a 30-day crossed accounts, and took around 70% of THEûmOATûISûSECONDARY ûWITHûJUSTûõMûOFû trailing VWAP. The new agreement covers the offering. PRIMARYûPROCEEDSûANDûANûEXPECTEDûFREE mOATû US$250m for existing product lines and the By last Friday at midday in London, of around 50%. There is a 15% secondary remaining US$150m for new product lines. Carrefour shares were 3.4% lower than greenshoe that could take secondary selling The new purchase agreement should Tuesday’s close, trading at €13.585. up to €340m. sustain investor interest.

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In the year ended June 30, Kornit sold In August, URW said that as of June 30 it had Polish search engine for consumers US$161.5m of its high-end digital printers €12.7bn of cash and undrawn credit facilities. shopping online in the country. that are used to make textiles such as t-shirts. URW shares closed up 2.49% at €40 on A banker involved in the IPO said that the +ORNITûISûBENElTINGûFROMûTHEûADOPTIONûOFû Wednesday. recent boom in e-commerce during the digital printing solutions, which are higher Eastdil Secured, Kempen, Lazard and pandemic has led to Allegro seeking a COSTûBUTûMOREûEFlCIENT ûFROMûECOMMERCEû Rothschild are advising the company, an higher valuation than originally expected. customers amid growing online sales. unusually large group. “Its comps have had a good run, for In reporting second-quarter revenue of EXAMPLEûCLASSIlEDS ûMARKETPLACES ûONLINEû US$37.4m, versus the US$34.7m consensus, IMCD SHARES JUMP ON SIGNET retail,” the banker said. “Amazon is the management pointed to Q3 revenue of ACQUISITION AND FUNDRAISING most obvious comp but from a scale US$53.5m–$57.6m, well above the perspective is much larger, then there’s US$49.5m consensus at the time. Chemical distributor IMCD raised €400m last Etsy, Zalando and other marketplaces such “The entire market is moving into 4UESDAYûEVENINGûTOûlNANCEûITSûACQUISITIONûOFû as Autotrader, which are also relevant.” ecommerce,” Kornit CEO Ronen Samuel said at Indian peer Signet Excipients. A deal size of around US$2bn equates to Citigroup’s global technology conference Existing shareholders strongly backed the about Z7.5bn, and if that can be secured it earlier this month. “We can see the retail unexpected fundraising, throwing their would be the largest Polish IPO since meltdown is really happening everywhere. weight behind the concurrent M&A insurance group PZU in April 2010. PZU’s Social media is really booming and that’s announcement. mOATûTOTALLEDû:BNûORû53BNûATûTHEûTIME INmUENCINGûWHATûCONSUMERSûWANTûTOûPURCHASE That enthusiasm carried through into last How much of the company will be sold is “More and more people are moving to Wednesday, with the shares rising 9.2% by yet to be determined, and the Warsaw stock work from home through Zoom and would the close to €101.30 each. exchange does not have a minimum free- like to wear casual stuff to express The company said on Tuesday that it will mOATûREQUIREMENT ûWITHûBANKERSûONLYûSAYINGû themselves.” purchase 70% of the Indian chemical that the deal size is large enough for Kornit’s customers are gearing up for the distributor from its founders, and the investors not to worry about the percentage. peak selling season in November and remaining 30% by 2024. The majority of proceeds will be December and “talking about next year that The news, being in line with strategy and secondary, as private equity owners Cinven, they are going to double their capacity”, said earnings-accretive in year one, was Permira and Mid Europa cash in alongside a Samuel. welcomed by shareholders. Z1bn (US$267m) primary raise. Helping usher through that growing JP Morgan was global coordinator on the Allegro said the IPO will allow it to repay demand, Kornit last month spent US$17m to block trade, and bookrunner alongside BNP some debt and support growth. PURCHASEûCLOUDûWORKmOWûSOFTWAREûPROVIDERû Paribas and HSBC. The company has also lined up a Z5.5bn Custom Gateway. With some US$350m of The deal was already multiple times lVE YEARûSENIORûSECUREDûTERMûLOANûANDûAû cash, the company is eyeing additional covered from a wall-crossing exercise, Z500m revolving credit facility that will be potential acquisitions. REmECTINGûSTRONGûSHAREHOLDERûDEMAND USEDûTOûRElNANCEûITSûDEBT Pricing was €91 each on 4.4m shares, 4HEûTIMETABLEûFORû!LLEGROSûmOATûISûSTILLûTOû equal to around 8.4% of the company’s pre- BEûDElNEDûBUTûANûACCELERATEDûPROCESSûOFûAû NETHERLANDS money share capital. Pricing was at a 1.9% week for pre-marketing and a week for discount to Tuesday’s close of €92.80. bookbuilding could be on the cards. BANKS UNDERWRITE €3.5bn URW 4HEûlNALûBOOKûCOMPRISEDûABOUTûûLINESû Around 5% of the offering will be RIGHTS ISSUE and contained several anchor orders from allocated to retail investors. current stakeholders. Allegro is attracting a wide range of Shopping centre landlord UNIBAIL-RODAMCO- IMCD is locked up for 90 days. interest including emerging market WESTFIELD announced a €3.5bn rights issue The shares rose more throughout the investors, global tech names and pan- after the Wednesday close, fully week, and by last Friday at midday in European funds. underwritten by a syndicate of Bank of London they were about 17.5% above ABB Adjusted Ebitda for the six months to June America, BNP Paribas, Credit Agricole, Goldman pricing at €106.90 each. 30 was Z808m, up 28% from Z631.4m in Sachs, JP Morgan and Societe Generale. 2019. Speculation had already been rife that Goldman Sachs and Morgan Stanley are URW would need to carry out a rights issue POLAND global coordinators, and bookrunners with of around €3bn to shore up its balance sheet Barclays, Bank of America, Citigroup and and cut debt. POLAND’S ALLEGRO SHOPPING Santander and BM PKO. The rights issue is part of a €9bn-plus BIGGEST IPO IN A DECADE Credit Agricole, Erste Group Bank, Pekao and deleveraging plan consisting of the €3.5bn Raiffeisen are co-lead managers. rights issue; limiting cash dividends through Online retailers have been obvious Lazard is advising. scrips and/or a lower payout ratio for €1bn BENElCIARIESûOFûTHEûCORONAVIRUSûPANDEMIC û in cash savings over the next two years; an with Amazon shares up more than 70% this €800m reduction in development and non- year, and ALLEGRO is now offering investors ROMANIA essential capex; and €4bn of disposals by the an opportunity to invest in Poland’s most end of 2021. popular online retail platform. ROMANIAN STATE UPSIZES OMV Terms for the rights issue are expected to Pre-marketing began last Monday for a PETROM SALE come around an EGM in the fourth quarter. Warsaw IPO that could raise around URW said that, pro forma for the capital 53BN ûMAKINGûITûTHEûLARGESTûmOATûFROMûTHEû Fondul Proprietatea sold a stake in raise, LTV would decrease to 35.7% from country in more than a decade. Romanian energy group OMV PETROM on 41.5% in June, and to 30.9% including the The platform has 12.3m active buyers and 4UESDAYûNIGHTûFORûTHEûlRSTûTIMEûINûTHREEû full disposal programme. 117,000 merchants, and is the most popular years, raising US$137m.

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9 IFR Equities and SE 2351 p91-113.indd 99 18/09/2020 20:05:04 Shares in the miner dropped on Friday after the sell-down, and closed down 6.2% in Readly, set, go! Shares rise London at £17.635 each. The sell-down comes a week after an effective exit by Bank Otkritie in Polymetal, 10% on Stockholm debut with the shareholder raising Rbs30.4bn (US$400m) at Rbs1,900 per share, or around SWEDEN Books 10 times subscribed, excluding cornerstone allocation £19.40 each, through Citigroup, JP Morgan and UBS. Shares in READLY INTERNATIONAL rose strongly on 2019. It had revenues of SKr160.6m for the first their Stockholm debut last Thursday, after the half of 2020, up 32% from 2019, and aims to TANKER OPERATOR SOVCOMFLOT digital magazine platform completed a SKr720m reach positive Ebitda in four to five years. TO FLOAT IN MOSCOW (US$81.6m) IPO. Despite being loss-making, its reach is The shares peaked at SKr66.91, up 13.4% from widespread, with users across more than 50 State-owned shipping company SOVCOMFLOT SKr59 IPO pricing, before easing off to close at countries paying €9.99 a month for access to a will list its shares in an IPO on the Moscow SKr65, up just over 10%. On Friday afternoon portfolio of about 5,000 magazine titles. Stock Exchange, aiming to raise at least they were at SKr63.09, 6.9% above IPO pricing. Bookbuilding wrapped up on Wednesday US$500m. The performance comes after the IPO drew for the 12.2m share offering, about 62% of Virtual pre-marketing for the all-primary SKr5bn in demand, with the public tranche which was primary. The remainder was sold by mOATûBEGANûONû4UESDAYû4HEûTIMETABLEûISûYETû more than 10 times subscribed, excluding shares Cleantech Europe II Luxembourg, Joel Wikell, TOûBEûCONlRMEDûBUTûWILLûBEûSLIGHTLYû acquired by eight cornerstone investors that took Vaxjo Cityfastigheter, Readly Co-Investment, condensed. about half of the deal. Channel 4 Ventures, Henrik Widov, Fredrik 3OVCOMmOTûSPECIALISESûINûTRANSPORTINGû The offering, which was a mix of primary and Petrini, Millium, State 5 Software, and Glintsoft. hydrocarbons, operating in ultra-harsh ice secondary shares, had a book of 200 institutions, Cleantech is providing a 15% greenshoe. environments. 45% of which were zeroed. Readly now has The float was backed by eight cornerstone Proceeds will be used to invest in new 25,000 new shareholders thanks to the retail investors that contributed SKr390m, just over assets, in particular industrial projects, as component. half of the offering. well as decarbonisation and deleveraging. Strong tech demand came from the US and Three were existing shareholders: Swedbank Investors are said to be focused on UK, as well as Continental Europe and Sweden, Robur, in for SKr70m; the Third Swedish National dividend yield. That is expected to be around despite bookbuilding beginning on September 8, Pension Fund, which put in SKr30m; and Consensus 5%-6% and gives a post-money valuation of the day after the US Nasdaq dropped 4% amid a Smabolagsfond also contributing SKr30m. approximately US$3.5bn-$4bn. global tech sell-off. New investors TIN Fonder, Handelsbanken The company recorded Ebitda of “The quality of the cornerstone investors, and Fonder, and C Worldwide Asset Management all US$823m in 2019, and US$1.03bn in the 12 the ability to find a company at this stage with put in SKr70m, and Skandia Fonder and Skandia months to June 30 this year. this much potential, made people keen to get Liv bought SKr33m and SKr17m, respectively. 0ILOT lSHINGûHASûALREADYûTRIGGEREDûSTRONGû into the book regardless of what was happening ABG Sundal Collier was sole bookrunner, with interest, including from dedicated sector in the market,” a banker involved said. Handelsbanken Capital Markets as lead manager and emerging market money. There is Positive sentiment around streaming services and STJ Advisors also involved. Avanza was retail expected to be a high level of local turnout and online entertainment due to the coronavirus manager, with Nordnet as selling agent. Total for the deal. crisis also spurred demand in Readly stock. costs, including fees, for the IPO are expected to Bank of America, Citigroup, JP Morgan, The company is still making a loss, having be SKr22m, about 3% of the base deal. Sberbank and VTB Capital are bookrunners. recorded an Ebitda loss of about SKr135m in Lucy Raitano 3OVCOMmOTûWILLûBEûLOCKEDûUPûFORûûDAYS

The Romanian state-backed fund sold OMV Petrom stock opened at L0.358 on SAUDI ARABIA approximately 1.7bn shares, representing Wednesday and held above pricing to close around 3% of existing share capital, at at L0.349. On Friday afternoon shares were SUPERMARKET SWEEP AS BINDAWOOD L0.33 each for a deal size of L560.7m at L0.3425. IPO COVERED ON FIRST DAY (US$137m). Fondul Proprietatea previously Citigroup and Wood & Co were bookrunners. sold a 2.57% stake at L0.275 in September "OOKSûWEREûCOVEREDûONûTHEûlRSTûDAYûOFû 2017. bookbuilding for supermarket chain Pricing was an 11% discount to Tuesday’s RUSSIA BINDAWOOD HOLDING‘s up to SR2.2bn L0.371 close. The shares were down nearly (US$585m) IPO, which opened books on 22% this year as of the Tuesday close. SECOND POLYMETAL ABB IN TWO WEEKS September 13. There is a 180-day lock-up on a Books are covered throughout the range remaining stake of just under 7%. Russian mining company POLYMETAL‘s largest of SR84–SR96 per share. A sale of 2.5% of the company was wall- shareholder sold 4% of the company on Strong local demand came in on day one crossed during the day on Tuesday, with Thursday evening, raising £342m in an ABB of the all-secondary offering, given it was coverage from the process. The deal was run by Bank of America. the weekend in most of the world, and the upsized to around 3% of OMV Petrom on IST Group, controlled by businessman book was already showing signs of strong demand, with anchor demand Alexander Nesis, sold 19m shares in balancing out geographically last Monday as coming from domestic and regional Polymetal at £18 each, a 4.3% discount to international investors came online. pension and mutual funds. There was also Thursday’s close of £18.81. Bindawood is listing 20% of its shares on interest from dedicated emerging market Pricing came at the bottom of guidance of the Tadawul exchange so the top of the and frontier investors. £18-£18.20. range equates to a market cap of SR11bn.

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JP Morgan and Goldman Sachs AREûlNANCIALû Epic also has a focus on environmental The shares were sold to several long-term advisers, and bookrunners with GIB Capital sustainability and intends to obtain a public investors and represented around 10% of and NCB Capital. They are all fully ESG rating following the IPO. ADNOC Distribution’s share capital. underwriting the IPO. Along with sector specialists, the relatively )TûINCREASESûTHEûCOMPANYSûFREE mOATûTOû Its three existing shareholders are selling small size is expected to attract generalists, 20%, boosting liquidity. 22.9m shares in total. Akasiya Star Trading, while dividend yield players will be looking at a Shares priced at Dh2.95 per share, Abdullah Bindawood Sons, and Investcorp lXEDûDIVIDENDûOFû3&RûPERûSHAREûFORûlSCALû representing a 9.2% discount to the have pre-money stakes of 84.5%, 8.5% and year 2020, with a targeted distribution of more September 13 close of Dh3.25. 7%, respectively. than 80% of funds from operations thereafter. ADNOC Distrbution shares closed last Bindawood is a household name in 0ILOT lSHINGûHASûBEENûVIRTUALûSINCEûTHEû Friday at Dh3.47. Saudi Arabia, and operates eponymous earlier physical meetings and there was said Citigroup and First Abu Dhabi Bank led the supermarkets and the Danube chain. It to be good momentum going into pre- sale while Moelis & Company advised. previously delayed going public earlier this marketing. This stage of the deal is expected year due to the coronavirus pandemic. to continue for six days, with books opening An all-virtual two-week pre-marketing on September 22 and wrapping up in the UK process lasted until September 13 and two week beginning September 28. weeks of bookbuilding wraps up on The deal is Reg S only. FRANKLIN THE DRAW FOR US$750m September 22. A retail tranche will follow UBS is sole global coordinator, and HARVESTER SPAC ONû3EPTEMBERûnûANDûlNALûALLOCATIONSû bookrunner with Berenberg and ZKB. will be announced on October 1. Special purpose acquisition companies are A banker involved said the IPO has drawn HELVETIA STRUGGLES FOLLOWING commonplace in the US, this year more than a wide range of interest from international PRE-OPEN ABB competing with corporate IPOs for investor investors who engaged in pre-marketing, time and attention. They are yet to become a despite Saudi IPOs being infrequent. MEAG sold its entire stake of 2.4% in insurer theme in Europe, but that may change. A rare Saudi ABB carried out on September HELVETIA for SFr110.8m (US$122.3m) last While Hugh Osmond’s UK-focused SPAC 4 has improved investors’ attitude to Wednesday morning, in a pre-open ABB run Broadstone raised US$300m in the US, books investing in the country, the banker said, by Credit Suisse. opened on Wednesday for a US$750m SPAC referring to NatWest Markets and Santander A total of 1.3m shares were sold at in the UK. selling 1.5% of Saudi British Bank. SFr85.25, representing a 2.7% discount to HARVESTER HOLDINGS has no particular sector Bindawood will be locked up for six last Tuesday’s close of SFr87.65. focus, but expects to acquire an operating months and the selling shareholders for a Pricing came at the bottom of SFr85.25– COMPANYûORûBUSINESSûWITHûAûSIGNIlCANTû lengthy two years. SFr85.65 guidance. proportion of activities in North America. Banks were approached to submit bids for The choice of listing location may be the trade on Tuesday evening, and some surprising considering it would be easier to SWITZERLAND demand was secured late on Tuesday before raise cash for US acquisitions in the States, the book opened just after 6:30am in but it is down to investor familiarity with EPIC IPO TARGETS SFR200m PRIMARY London on Wednesday. one of the backers Martin Franklin. The book closed an hour later and was a Franklin has multiple European SPACs. Commercial real estate business EPIC SUISSE couple of times subscribed, containing around His US$500m 2014 SPAC Nomad acquired began virtual pre-marketing last Monday 35 lines. A combination of Swiss and UK long- Iglo Foods in June 2015 for £2.6bn, adding for its SFr200m (US$220m) all-primary SIX only and hedge funds showed up for the deal. Findus Group for £500m later that year. And 3TOCKû%XCHANGEû)0/ ûONEûOFûTHEûFEWûmOATSû It represented about eight days’ trading the US$1bn 2017 SPAC J2 acquired oil this late in the year where there were in- volume. pipeline contractor API Group for US$2.9bn person meetings ahead of launch. Shares fell slightly below ABB pricing later in late 2019. There were some property tours with last Wednesday, and closed at SFr84.85 – down Franklin is one of the founders of investors earlier this year before the coronavirus 3.2% on the day and 0.5% below ABB pricing. Mariposa, which alongside fellow sponsor shut down physical marketing of deals. Epic By last Friday at midday in London shares Viking is putting in US$200m. Suisse focuses on commercial real estate, mostly were lower at SFr81.50 each. Viking’s founder is Brian Kaufmann, who food retail and logistics properties, and had a Helvetia raised SFr300m on June 19 to has a background in private equity. A banker portfolio valued at SFr1.3bn as of June 30, PART lNANCEûITSûACQUISITIONûOFû3PANISHû involved on the deal said that Viking’s name having grown 7.2% per year since 2017. insurance company Caser. has value but Franklin is the big draw. The company has 24 properties in the main Credit Suisse, Deutsche Bank, UBS and Viking is putting in US$150m, with Swiss economic hubs and a development ZKB were bookrunners on that trade, which US$50m coming from Mariposa, with the pipeline in excess of 175,000 square metres. priced at SFr91 per share. sponsors acquiring US$185m of units at the 0ROCEEDSûFROMûTHEûmOATûWILLûlNANCEû IPO price and US$15m in founder preferred acquisitions, projects, capex and general shares. corporate purposes, as well as pay down debt. UAE The institutional offering comprises 55m It is owned by its founders, listed Israeli units, consisting of one share and one- real estate business Alrov Group and the ADNOC RAISES US$1bn AFTER quarter warrant with a strike price of Greenbaum family, which have worked DISTRIBUTION SELL-DOWN US$11.50, at US$10 per unit. Warrants are together for 20 years. exercisable post-IPO until three years after The owners are not selling in the IPO and Abu Dhabi National Oil Company sold 1.25bn closing of an initial acquisition. are expected to retain a stake of about 80%, shares in its retail fuel station operator Any acquisition is to be approved by the with an expected market capitalisation of subsidiary ADNOC DISTRIBUTION last Monday, board as is normal in the UK version of just over SFr1bn. raising US$1bn through a private placing. SPACs, not shareholders.

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9 IFR Equities and SE 2351 p91-113.indd 101 18/09/2020 20:05:04 However, if an acquisition has not been Watches of Switzerland shares opened over the 12 weeks to July 12, UK grocery made within two years of the IPO, the board above strike at 314p and closed at 315p on sales increased by 17% compared with 2019, will recommend either winding up the 4UESDAYû)TûWASûmATûTOûTHATûLEVELûONû&RIDAYû the fastest growth since records began. company or carrying on the pursuit for a morning. Supermarket Income REIT has generated further year, subject to a shareholder vote a total shareholder return of 11.6% so far in with founders and directors abstaining. AQUILA RENEWABLES FUND 2020 and 24% since its July 2017 IPO. The Part of the reason US SPACs have been so TARGETS €150m company now owns 19 supermarkets with popular in 2020 is their downside protection – an aggregate value of £728.3m. proceeds are returned if no acquisition is secured. London-listed AQUILA EUROPEAN RENEWABLES The offer for subscription closes on 6IRTUALûPILOT lSHINGûHASûALREADYûTAKENû INCOME FUND is seeking €150m to acquire new October 5, the same day as the EGM, with place and the banker said that there is a fan renewable energy infrastructure assets. the placing closing on October 6 and a result club of SPAC buyers in Europe, but that the There is scope to increase the placing to due on October 7. expectation is that much of the demand will õMûIFûTHEREûISûSUFlCIENTûDEMAND ûANDûTHEû The REIT raised £139.8m in May, having come from the US. fund also announced a more long-term targeted £75m and exhausting the previous Pricing is due on or around Friday. placing programme. placing programme. That raising was to Citigroup, sole bookrunner on Broadstone, is The placing and offer for subscription part-fund the acquisition of two joint global coordinator with UBS on Harvester. opened last Thursday and books close on supermarkets. October 8, with a result due the following day. Stifel is sole bookrunner. APOLLO SELLS UPSIZED 13.8% STAKE It consists of 145m new shares, at IN WATCHES OF SWITZERLAND €1.0375, a 3.9% discount to last Wednesday’s ESSENTRA RAISES £100m INTRADAY FOR close of €1.08. ACQUISITION Substantial long-only interest enabled US 3HARESûWEREûmATûATûTHATûLEVELûONû4HURSDAYû private equity giant Apollo Global following news of the fundraising. UK plastic parts supplier ESSENTRA raised Management to increase the size of its sell- The offer is conditional on shareholder £100m on Friday in an intraday ABB to fund down to £102.3m in UK luxury watch approval at a general meeting on October 6. its acquisition of 3C Packaging. retailer WATCHES OF SWITZERLAND. Numis and Kempen & Co are bookrunners. The cash will also strengthen Essentra’s Apollo is left with a 28.3% stake, subject to They will also run any subsequent placing BALANCEûSHEET û)ûNCREASINGûmEXIBILITYûFORû a 90-day lock-up. between October 13 and September 16 2021 other opportunities. The sale is the second since Watches of related to Aquila’s new placing programme, Half the proceeds will go towards the 3WITZERLANDûmOATEDûINûAûaMû)0/ûINû*UNEû which comprises up to 500m shares. US$60m acquisition of the US labelling and 2019, with Apollo selling a 13.8% stake in an !QUILASûPORTFOLIOûCONSISTSûOFûlVEûONSHOREû healthcare packaging company, which upsized trade managed by Barclays and wind farms in Norway, Denmark and completed on Thursday. Goldman Sachs in January. Finland, and 21 hydro power plants in 4HEûACQUISITIONûlTSûINTOû%SSENTRASû Barclays WASûmYINGûSOLOûFORûTHISûOUTING û Portugal. packaging unit, one of its three divisions which was preceded by a wall-cross to a The proceeds from the placing will be with the others producing components and handful of long-only investors, both existing deployed in 6–12 months. Aquila’s pipeline lLTERSû shareholders and those new to the name, comprises 14 targeted assets, but no formal Jefferies and Peel Hunt were bookrunners on including some that had provided reverse steps towards acquiring them have been the ABB. enquiry. The process concluded with taken yet. A total of 38.5m shares were offered at indications of interest in excess of the lXEDûPRICINGûOFûPûANûûDISCOUNTûTOû number of shares on offer. SUPERMARKET INCOME REIT BACK AGAIN Thursday’s close of 285p. At launch after the London close on Monday, Around 1.15m of the shares were sold to that comprised 27.5m shares, or 11.5% of The UK’s SUPERMARKET INCOME REIT is targeting retail investors through PrimaryBid. existing share capital and the deal was quickly £150m from a placing and offer for The capital increase represented COVEREDû$EMANDûWASûSUFlCIENTûTOûINCREASEû subscription to proceed with up to £400m of around 14.6% of the company’s issued share that to 33m shares, or 13.8% of share capital. acquisitions. capital. The stock has partially recovered from The new shares will come from a Pre-emption was respected before launch, the Covid-19-inspired March fall, when proposed 450m-share 12-month placing with key shareholders consulted on the shares dipped below 180p, but are still down programme. placing. more than 14% year-to-date. However, the Supermarket Income REIT will offer Shares in Essentra plunged on Friday, shares have jumped more than 27% in the 144.23m new shares at 104p, a 6.3% discount closing below pricing at 258p, down 9.5% on past month. Pricing came at 310p, a 7.2% to Wednesday’s 111p close and a 3% the day. discount to the 334p Monday close. premium to the last reported NAV of 101p at The company is locked up for 180 days The share performance and illiquidity June 30. There is an option to upsize with post-placing. probably drove the demand, with the shares more shares from the placing programme on offer representing more than 350 days’ dependent on demand. The capital raising is US SOLAR FUND BACK FOR MORE TRADING ûACCORDINGûTOû2ElNITIVûDATA not underwritten. “The liquidity in the stock is awful, so 4HEûCOMPANYûHASûIDENTIlEDûAûPIPELINEûOFû US SOLAR FUND may come to market seeking people are grateful for an injection of opportunities in excess of £400m, including further capital soon, having in effect liquidity,” said a banker involved. three assets totalling £135m that are in deployed all of the US$200m raised during !SûWITHûTHEûWALL CROSS ûAûlNALûBOOKûOFû advanced discussions. its London IPO in April 2019. around 40 lines was a mix of existing and Since the late March lockdown in the UK, 4HEûFUNDûCONlRMEDûTHATûPROCEEDSûFROMû new names, with the top 10 accounts taking approximately £240m has been deployed in THEûmOATûHADûBEENûSPENTûINûITSûINTERIMû about 85% of the trade, including a number lVEûTRANSACTIONS ûDESPITEûTHEûONGOINGû results to June 30, announced on of chunky orders. pandemic. According to consultancy Kantar, Wednesday.

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Portfolio revenues are 100% contracted at product illegal in the US. It is crossing over The broader equity market held its lXEDûORûESCALATINGûPRICESûFORûAûWEIGHTEDû into the public markets on the heels of GROUNDûINûTHEûPASTûWEEKûDESPITEûAûmOODûOFû average of 15.3 years with 70% of the assets raising US$80m on a Series B round in April. ECM supply, including 14 IPOs raising in operation. Noted tech investor Thiel led the Series B US$8.7bn of proceeds, the busiest week of USF has debt of US$321.5m at the project at a valuation of US$12.50 per share with the year for new issues. level – 62.5% of gross asset value. The fund is Perceptive joining as a new investor. 4HOUGHû/UTSETû-EDICALûANDû3NOWmAKEû allowed to have gearing above 50% during Thiel is no stranger to controversial produced outsized aftermarket gains, at CONSTRUCTIONûANDûTHEûlRSTûYEARûOFûOPERATIONS investments. He was an early backer of least four debutantes traded below their Canadian cannabis grower Tilray, which offering prices (Pactiv Evergreen, Metacrine, NUCANA TAKES ITS MEDICINE listed publicly on Nasdaq two years ago. Broadstone Net Lease and Vitru). Cowen was also the lead bookrunner on Nevertheless, with the average 2020 IPO Edinburgh-based cancer drug developer Tilray’s IPO. still showing a 50%-plus return versus the NUCANA addressed a potential cash shortfall While illegal at the federal level and in all S&P 500’s 3% year-to-date gain, there with US$70m raised from an upsized 50 US states, the US FDA has kept an “open remains plenty of incentive for investors to follow-on offering last week. mind” toward psilocybin by granting chase new issues and for bankers to keep Jefferies, Cowen, William Blair and Truist Breakthrough Therapy designation as a bringing them. provided the cash-strapped biotech a lifeline treatment for major depression. Of greater concern during the week, a on a public placement of 15.5m shares at Despite the crossover earlier this year, number of sizeable secondary offerings US$4.50, a 21% discount to last sale. Compass would have about US$150m of traded below their offering price, with NuCana had just US$59m of cash as of cash after the IPO. It is using the money to sponsor sell-downs among the biggest June 30 and would have run out of cash by fund an ongoing Phase II trial that is decliners, but in many cases after sharp the end of next year. expected to wrap up by the end of 2021. stock price gains from Covid-19 lows in The offering gives NuCana at least March. another 12 months of funding for its ProTide cancer drugs, while an ATM with STEPSTONE SURGES ON US$315m IPO Cowen provides additional liquidity. NuCana, which had not sold stock AMERICAS Marking the next step in its evolution, publicly since raising US$114m on its IPO alternative asset adviser STEPSTONE GROUP three years ago at US$15.00 a share, has raised US$315m on its IPO last Wednesday, known about its cash issues for some time. UNITED STATES more than expected and above the range h7EûAREûMINDFULûOFûOURûlNANCIALûSITUATION vû marketed. .U#ANAû#%/û(UGHû'RIFlTHûTOLDû)&2ûINû/CTOBERû IPOs SLOW BUT DOMINATE DEAL JP Morgan, Goldman Sachs, Morgan Stanley, last year. “Our preference would be to sell FLOW AGAIN Barclays and UBS told accounts late in the equity sometime within the next nine bookbuild they were well oversubscribed on months, but all options are on the table.” !NOTHERûlVEû)0/SûSEEKINGû53BNûAREûLINEDû 17.5m shares being sold and that pricing NuCana’s ProTides are new formulations up to be priced in the week ahead as strong was likely to come at the high end or above of existing chemotherapy drugs that are returns from the 2020 IPO vintage continue the US$15–$17 marketing range. POTENTIALLYûSAFERûANDûMOREûEFlCIENTû to encourage issuers to step forward. They followed through by pricing a fully The lead drug is a formulation of Yet what was shaping up as the most sized deal at US$18.00, valuing StepStone at emtricitabine, a chemo drug that is anticipated event of the week, the direct US$1.75bn. diagnosed for 14,000 to 20,000 new patients listing of PALANTIR TECHNOLOGIES took a detour 3TEP3TONEûCLOSEDûlRST DAYûTRADINGûONû per year. on Friday when the secretive data analytics Wednesday at US$25.00, extending that A Phase III trial launched last October in provider said it would now list its shares on valuation well above that of traditional alt- patients with biliary cancers (gall bladder, the NYSE on September 29 instead of asset managers like Blackstone Group, esophagus, etc) with initial data expected by September 23 as planned. Carlyle Group or KKR. mid-2021. The week’s biggest corporate IPO comes While StepStone does invest directly, its from prescription drug app GoodRx, whose core business is advising pension plans, COMPASS PATHWAYS TAKES TRIP TO 53MûmOATûPRICINGûPOST CLOSEûONû NASDAQ Tuesday) includes a separate US$100m US EQUITIES investment from Silver Lake Partners and BOOKRUNNERS: 1/1/2020 TO DATE Peter Thiel-backed and UK-based COMPASS has drawn strong early interest, according Managing No of Total Share PATHWAYS raised US$128m on its Nasdaq IPO to bankers. bank or group issues US$(m) (%)

that provides funds for exploring potential With GoodRx, software company Bentley 1 Goldman Sachs 142 26,366.93 14.0 THERAPEUTICûBENElTSûOFûPSILOCYBIN ûAû Systems and gaming hardware supplier 2 Morgan Stanley 132 25,022.67 13.3 psychoactive drug derived from so called Corsair Gaming all scheduled to price, the 3 JP Morgan 145 22,023.46 11.7 “magic mushrooms”. week ahead features a broader mix of tech 4 Bank of America 149 20,578.00 10.9 Cowen, Evercore and Berenberg led an IPOs versus the heavy focus on high-growth 5 Citigroup 87 15,086.96 8.0 upsized placement of 7.5m shares at software witnessed in the past week with 6 Barclays 73 11,863.69 6.3 US$17.00, above the US$14–$16 range and HOTLYûSOUGHTûOFFERINGSûFROMû3NOWmAKE û 7 Credit Suisse 62 7,916.86 4.2 increased from 6.7m shares at launch. JFrog and Unity Software. 8 Jefferies 88 5,308.89 2.8 Compass pointed due north at the The other two IPOs scheduled to price are 9 Cowen 73 4,596.44 2.4 US$23.40 opening cross, up 37% at the debut biotech Taysha Gene Therapies’ US$131.6m 10 Evercore Partners 39 4,446.71 2.4 print. offering and in a rare energy deal, LNG Total 618 188,143.89

Compass’s UK domicile allows for a storage company Hygo Energy Transition’s Including all domestic and international deals and rights issues Nasdaq listing by a company that peddles a US$485.1m IPO. Source: Refinitiv SDC code: C3r

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9 IFR Equities and SE 2351 p91-113.indd 103 18/09/2020 20:05:04 income of US$19.5m, including US$18.4m related to fees, on adjusted revenue of Unity revives Dutch auction US$74.3m. Peer Hamilton Lane, which opened doors to alt-advisory alternative with its for US$1.3bn IPO US$218.5m IPO in 2017, now trades at 37.5 times this year’s earnings, well north of US Gaming content software firm prices well above range, surges on NYSE debut Blackstone (26.9 times), Carlyle (14.4 times) ANDû++2ûûTIMES ûACCORDINGûTOû2ElNITIVû UNITY SOFTWARE took the unorthodox step of process here and there’s a lot of interest in the data. reviving the modified Dutch auction format to company,” another ECM banker in the syndicate help price its US$1.3bn NYSE IPO, a move that said ahead of pricing. BROADSTONE STRUGGLES TO BUILD may have helped it secure a premium valuation “It’s non-traditional for sure but I think we are INTEREST IN US$569.5m IPO that left less easy money on the table for all getting more creative in trying to live in the investors in the aftermarket. current world and understand their reasoning As a triple net lease REIT and given the Late on Thursday, a syndicate led by Goldman and rationale.” multitude of similar publicly traded Sachs, Credit Suisse, Bank of America, Barclays alternatives, BROADSTONE NET LEASE‘s IPO and William Blair priced 25m shares in the real- PRICE DISCOVERY ALWAYSûlGUREDûTOûBEûCHALLENGING time 3D content software platform at US$52, Though the format may have enabled Unity Forced to negotiate with REIT-dedicated above the US$44–$48 range already increased to garner a higher IPO price than a traditional institutions, Broadstone had to accept from US$34–$42 at launch. bookbuild, bankers close to the deal pushed back US$569.5m with pricing on 33.5m shares Debuting on the NYSE on Friday, Unity shares against the idea, saying the move was just about sold in the IPO at US$17.00, the low end of opened at US$75.00 for an opening 44.2% gain, maximising price. US$17–$19 range marketed. though it was not immediately obvious what The auction enabled “more robust price Broadstone broke offer to close its NYSE impact the auction format had on that outcome. discovery” and ensured Unity was “better debut on Thursday at US$16.30. Timed amid trenchant criticism from some informed in setting the right price”, the first JP Morgan, Goldman Sachs, BMO Capital parts of Silicon Valley that the traditional IPO banker said. Markets, Morgan Stanley, Capital One Securities bookbuild undervalues their companies, the “You have a company here where investors and Truist Securities were joint bookrunners. use of the auction process – most famously really care and are willing to engage in working "ROADSTONESûDIVERSIlEDûPROPERTYû employed for Google’s 2004 IPO but rarely through a new process,” another senior ECM portfolio, both from a tenant and used in recent years – meant that the syndicate banker said. geographical perspective, made it even provided limited book colour leading up to “But I don’t think it’s going to be rolled out MOREûDIFlCULT pricing. broadly. Listen, the traditional IPO process is far “For a generalist, diversity can make it However, the scramble by investors for all from perfect, but people at least know the rules. hard to get their head around valuation,” things software left little doubt Unity would When you change the rules there is a little bit of said a banker involved. “REIT specialists like secure a strong pricing outcome either way. confusion.” TOûDIVERSIFYû)FûYOUûWANTûOFlCEûPROPERTIESûYOUû Unity left itself with the discretion not to At the midpoint of the revised range, Unity buy Vornado; if it’s healthcare, Physicians allocate shares based entirely on the results of was coming to market at a multiple to forward Realty Trust.” the auction, meaning its IPO was in reality more sales of 18, though this rose beyond 20 at the Despite being well oversubscribed, of a hydrid between a traditional IPO process and final price. messaging on Wednesday morning was to the auction model. Though a robust valuation by any measure, “scale orders between US$17–$18” in an According to some close to the deal, the big the task of assessing value was complicated by effort to consolidate demand. banks were initially opposed to using the auction Unity’s revenue mix whereby a large portion of Broadstone, whose largest tenants are in format to gauge institutional demand. However, sales comes from revenue-sharing of ad and in- the industrial and healthcare sectors, Unity CEO John Riccitiello, the former Electronic app purchase revenue generated by mobile and collected 93.9% of rent due in the second Arts CEO, was not easily dissuaded from the PC games built on its platform. quarter, from a current annualised rent base idea of wrestling back control of pricing and Those revenues are therefore based on of US$288m. allocations from the banks. the popularity of games and may prove less Overall, it now has 182 tenants in 633 “He’s been around for a long time and he was predictable relative to the subscription revenues properties worth US$4bn across 41 US going to do what he wanted to do,” one banker that represents the minority of Unity’s sales. states. close to the deal said. According to Unity’s filing, 31% of revenue h)TûISûDElNITELYûTRICKYûDOûAûREAL ESTATEû)0/û Goldman ultimately had no problem came from its Create Solutions unit generating in this market,” said a second banker acceding to Riccitiello’s wishes in setting up the subscriptions and professional services fees, involved. “There have been concerns across technology to run a direct entry order system, versus 58% from the Operate Solutions unit the industry about collecting rent, but that whereby investors could log into a website to put mostly driven by revenue-sharing and usage- has been less of a problem for Broadstone in their order. driven sales (the balance is from strategic because of their diversity.” “It matches closely what the company wants partnerships). In the TTM ended June 30, Broadstone to achieve, and investors actually understand the Anthony Hughes generated adjusted funds from operations of US$199.2m on lease revenues of US$334.8m. While newly public, Broadstone already sovereign wealth funds and other clients Of the US$292bn of assets at June 30, has a diverse investor base after raising on investments, providing a steady US$226bn were under advisory some US$800m of equity over the past three income stream and muting volatility of arrangements and US$66bn directly years. As a result, it has been a regular SEC carried interest that comes from directly MANAGEDû)NûTHEûlRSTûlSCALûQUARTERûENDEDû lLERûSINCEûûANDûHASûLONGûHELDûQUARTERLYû investing. June 30, that mix resulted in adjusted net conference calls to update investors.

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Broadstone is hoping to use the IPO to Yet even some bankers close to the deal among the best-performing software IPOs of fund acquisitions. were surprised the company went out with years past. After repaying debt with proceeds, net such a high valuation from the outset. leverage will stand at roughly 5.3 times !TûTHEûlNALûTERMS û*&ROGûWASûVALUEDûATûAû SYNEOS SLUMPS AFTER SPONSOR BLOCK Ebitda, in line with public net lease REIT forward EV/sales multiple of more than 20, peers such as Spirit Realty Capital (5.3 times) its aftermarket gains catapulting it among A US$418.3m sponsor sell-down of shares in and WP Carey (6 times). the most highly valued public software SYNEOS HEALTH appeared to trigger a 10.2% Broadstone’s valuation is roughly in line companies in the market. slump in the contract research company’s at 14 times AFFO over the TTM ended June !ûDAYûLATER ûDATAûANALYTICSûSOFTWAREûlRMû share price on Wednesday. 30, versus 13 times and 14.7 times for Spirit SUMO LOGIC priced its Nasdaq IPO above range On Tuesday, Thomas H Lee Partners and Realty and WP Carey. for proceeds of US$325.6m. But unlike other Advent International pared their combined In a yield-hungry market, there is appeal recent software IPOs, Sumo did not increase Syneos stake to 33.3% from 39.8% via the sale to the 5.9% dividend yield at the current 25- the original range. of 7m shares to Morgan Stanley. cent quarterly dividend. Responding to heavy oversubscription, a The bank sold the shares to investors on syndicate led by Morgan Stanley, JP Morgan, an overnight basis at US$59.75 a share, the OUTSET SETS HIGH BAR FOR IPOs RBC Capital Markets and Jefferies priced 14.8m bottom of the US$59.75-$60.50 range and a shares at US$22, above the US$17–$21 2.9% discount to last sale. OUTSET MEDICAL, a maker of kidney dialysis range. The discount proved too tight, Syneos machines, set a high bar for IPO Tiger Global, a pre-IPO shareholder, shares slumping 10.2% to US$55.26 in performance last week by more than purchased 1.75m shares representing 11.8% Wednesday’s aftermarket, implying a doubling on its debut session. of the offering, up slightly from its earlier US$30m loss for the ultimate buyers of the /UTSETûlNISHEDûlRST DAYûTRADINGûONû disclosed commitment to buy 10% of the deal. shares. Nasdaq at US$60.68 (US$54.47 VWAP), a Debuting on Thursday, Sumo shares The share price decline, which follows a 124.7% premium to the US$27 offer price set traded in a slightly more subdued fashion sharp run-up in the price from US$30.02 on on an upsized 8.95m shares on Monday than some recent tech IPOs, trading as high March 17, was despite Syneos agreeing to night. ASû53ûBEFOREûlNISHINGûATû53 ûANû repurchase US$30m of shares in the Bank of America, Morgan Stanley, Goldman opening day gain of 22.2%. offering. There is a 30-day lock-up on further Sachs, SVB Leerink and Stifel had accelerated The company has nearly 40% top-line sales by the sponsors. pricing by one day and followed by bumping growth but loses money (breaching the so- The offering priced a day before rival PPD the offer size from 7.6m shares they had called “Rule of 40” where top line growth was poised to price its US$1.3bn follow-on, marketed at US$22–$24 apiece. ANDûPROlTûMARGINûSHOULDûTOGETHERûTOTALûOVERû ITSûlRSTûSINCEû&EBRUARYSû)0/ûANDûREPRESENTEDû The greenshoe will push gross proceeds 40%). It also has some imposing competition a sell-down by its sponsor group led by raised to US$277.8m from US$241.7m on in the form of Splunk and Elastic, both Hellman & Friedman and Carlyle. the base deal. That will give Outset US$420m to help fund the rollout of its in-home kidney dialysis units. Amwell basks in Google glow Outset is disrupting the market for kidney dialysis with its Tablo device, a mobile US Google’s telehealth partner scores premium IPO valuation dialysis machine approved by the FDA for acute care in hospital settings in 2014 and Strategic tie-ups are proving all the rage in ECM. Amwell is growing at a similar rate but off a for in-home use in March. Telehealth platform AMWELL, a strategic partner smaller revenue base. Its revenue grew 77% year of Google, secured a premium valuation on a on year to US$122m in H1 2020. JFROG AND SUMO JUMP ON DEBUT US$742m NYSE IPO that was both increased in More than 57,000 healthcare providers used size and priced well above the range. Amwell’s telehealth platform to facilitate more Software development platform JFROG Morgan Stanley, Goldman Sachs and Piper than 5.6m online patient visits this year. scored one of the week’s most impressive Sandler placed 41.2m shares at US$18 after The digital transformation of the healthcare debuts after pricing its Nasdaq IPO well marketing 35m shares at a US$14–$16 range. industry is more than a US$250bn market above range for proceeds of US$508.6m. Google separately invested US$100m via opportunity for telehealth providers. A syndicate led by Morgan Stanley, JP a concurrent private placement as part of a There has already been some consolidation Morgan and Bank of America priced 11.56m collaboration that will see Amwell migrate its in the space with Teledoc’s US$18.5bn bid for shares at US$44, above the revised US$39– telehealth platform to the Google Cloud next Livongo Health. $41 range, upped from US$33–$37 at January. Amwell’s collaboration with Google kicks in launch. Amwell shares were up 28% on debut on next year. Debuting on Wednesday alongside Thursday to US$23.07 at the close. The move will give Amwell full access to 3NOWmAKE û*&ROGûSHARESûSURGEDûTOûASûHIGHûASû The offering attributes Amwell an EV of about Google products, like AI/machine learning and US$77 before closing at US$64.79, a gain of US$3bn, a hefty mid-teens multiple of 2021 analytics software, that can be used to enhance 47.3% that attributed the company a market revenue and around 10-times estimated 2022. its telehealth services and launch new ones. capitalisation of nearly US$6bn versus Teladoc Health by comparison trades at 11.5- Amwell also intends to take advantage of REVENUEûOFû53MûINûTHEûlRSTûHALFûOFû times and nine-times 2021 and 2022 revenue, Google’s global presence to open doors to 2020. according to Reﬁnitiv data. new sales opportunities. Co-investment in new JFrog, whose service helps clients build Analysts expect Teladoc to grow revenue by products launched by the partnership will also and release software faster, came to market nearly 80% this year to US$990.6m, ramping to help lower future R&D costs. ATûAûPREMIUMûVALUATIONûREmECTINGûITSûû US$1.4bn in 2021 and US$1.7bn in 2022. Robert Sherwood top-line growth rate.

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9 IFR Equities and SE 2351 p91-113.indd 105 18/09/2020 20:05:04 of 14m shares at US$16–$18 on Tuesday, September 22. Hart brings Pactiv IPO below Goldman Sachs, Barclays and Credit Suisse lead a syndicate of nine banks on a deal attributing Corsair a fully diluted enterprise range, slumps on debut value of about US$2bn. The company’s annual revenues have US Kiwi billionaire owner stumps up US$50m to help deal along nearly tripled to US$1.3bn since its failed IPO attempt in 2012. Kiwi billionaire Graeme Hart ended up reaching LEVERAGE Hardware is never as easy a sell as into his own pocket to help get the Nasdaq IPO The ﬁnal terms attribute Pactiv a market cap software but Corsair is being pitched an of PACTIV EVERGREEN over the line, but it did of US$2.46bn and left it with net debt of attractive way to get exposure to the growth little to stop the food packaging company from US$3.3bn versus pro forma adjusted Ebitda of of e-sports and other gaming trends. staging a disappointing debut. US$691m last year. Nearly half of the proceeds will go to Heavy price sensitivity led to Pactiv raising Though bankers said leverage was not a EagleTree, which bought the business in a less-than-expected US$574m late on source of pushback, high leverage means 2017 from Francisco Partners and others and Wednesday from a full-size offering of 41m Pactiv’s equity is extra sensitive to any fall in HASûLIFTEDûITSûGROWTHûPROlLEûSINCEûTHENûû primary shares at US$14.00, well below the enterprise value, thus the large discount to the revenue CAGR) with several acquisitions US$18–$21 marketing range. marketing range. (notably Elgato Gaming in 2018). In a late show of support, Hart, New Zealand’s Pactiv’s pitch rested partly on hopes it EagleTree’s stake will fall to 77.6% from richest man and Pactiv’s sole shareholder prior could repeat the success of January’s IPO 92.2% pre-IPO while the primary proceeds to the IPO, agreed to invest another US$50m in of sister company Reynolds Consumer will enable Corsair to bring down net debt the company by buying 3.57m shares or 8.7% of Products, whose shares have since traded to about US$270m from US$380m versus the offering. up more than 20%. adjusted Ebitda of US$127.6m in the year Debuting on Nasdaq on Thursday, Pactiv However, Reynolds sells consumer-branded ended June 30. shares sank 21.9% to US$10.93 on volume of products (such as foil and waste bags), 14.8m shares. whereas Pactiv is exposed to the competitive 89BIO TANKS ON EQUITY Having struggled to steal investor attention food packaging market and also saw away from several hot tech IPOs that also priced its foodservice segment hit hard by 89BIO, which went public last November, during the week, the syndicate led by Credit Covid-19. launched a two-day bookbuild last Monday Suisse, Citigroup, Bank of America and Goldman At the original terms, Pactiv was coming at a to sell 3.3m new shares after reporting Sachs earlier told accounts there was price multiple of eight times projected 2021 Ebitda, a positive Phase II results for its NASH drug sensitivity around the US$14–$15 mark. discount to the average of 10 for comps such as ahead of the market open. “Fundamentally, it’s a challenge getting people Amcor, Berry Global, Sealed Air, SIG Combibloc BIOûRAISEDû53MûFROMûAûlRSTû to focus on a story like this in a market with and Ball, according to forecasts used by follow-on in July. Snowﬂake, JFrog and Unity Software,” one ECM syndicate banks. Bank of America, SVB Leerink and RBC Capital banker close to the deal said just ahead of pricing. Anthony Hughes Markets waived a 90-day lock-up restriction from the previous sale, clearing the way for 89bio to capitalise on the Phase II results. H&F, CARLYLE START PPD SELL-DOWN period, though the sellers have now agreed 89bio skidded 20.5% to US$29.19 after the not to sell any more of their holdings for 90 standard two days of marketing for recent 0RIVATEûEQUITYûlRMSû(ELLMANûû&RIEDMANû days under a new arrangement. new issues. After pricing at US$28.00 to raise and Carlyle began to monetise their stakes Helping to ease the sale, PPD upwardly US$92.4m, 89bio plunged another 11% in in contract research organisation PPD as the REVISEDûITSûTHIRD QUARTERûlNANCIALûGUIDANCEû Thursday’s aftermarket to US$24.89. MAINûSELLERSûINûAû53BNûlRST TIMEû alongside the offering, upping both its 89bio is looking to use the offering follow-on which priced late on Wednesday. revenue and adjusted Ebitda growth proceeds to fund Phase III trials on its NASH After two days of marketing, a syndicate guidance from the mid-single digits into the drug, but that trial is not set to begin until led by Morgan Stanley, JP Morgan, Barclays and double digits amid higher demand both for next year. Goldman Sachs priced 38m PPD shares, Covid-related and non-related studies. A portfolio company of biotech specialist representing 10.9% of outstanding, at 4HOUGHûTHISûWASûTHEûSPONSORSûlRSTûSELL VC RA Capital, 89bio remains tightly held 53 ûAûûlLE TO OFFERûDISCOUNT down, they already collected their share of with 10 shareholders owning nearly 70% of H&F sold 21.2m shares in the base US$1.2bn of special dividends paid by PPD OUTSTANDING ûACCORDINGûTOû2ElNITIVûDATA offering to cut its stake to 39.3% from 45.4% last year before the IPO. 89bio has US$240m of cash from this while Carlyle sold 9.3m shares to cut its week’s offering to wrap up Phase II trials stake to 16.4% from 19.1%. Other sellers CORSAIR PRESSES START ON ANDûINITIATEû0HASEû)))ûINûTHEûlRSTûHALFûOFûNEXTû were Abu Dhabi-based Platinum, US$252m IPO year. Singapore’s GIC and some company directors. CORSAIR GAMING, a maker of gaming and METACRINE GRABS IPO LIFELINE A 5.7m greenshoe could further reduce streaming peripherals, is seeing solid early their stakes. interest in its up to US$252m Nasdaq IPO, Short on cash, METACRINE raised US$86m of The offering represented PPD’s return to according to bankers close to the deal. much-needed funding from a Nasdaq IPO ECM after it priced its US$1.62m Nasdaq IPO In its second attempt to go public this week. at US$27 a share in February. BUTûTHEûlRSTûUNDERûSPONSORû%AGLE4REEû Jefferies, Evercore and RBC Capital Markets The follow-on therefore came after the Capital (formerly Wasserstein Partners), placed 6.54m shares at US$13, midpoint of expiration of the 180-day IPO lock-up Corsair expects to price its Nasdaq IPO the US$12–$14 range.

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The clinical-stage biopharmaceutical BIOTECHS CHANGE IPO PLAYBOOK Goldman Sachs, Jefferies and Stifel placed 12m company has not raised cash privately since shares at US$17, the top of the US$15–$17 range a US$65m Series B round two years ago. Just one month after completing its Series B marketed and increased from 10m shares. The lack of crossover support became funding round, DYNE THERAPEUTICS raised The offer values Athira above US$500m evident when Metacrine broke hard to US$234m from its IPO last Wednesday, in a publicly, versus a US$9.12 a share valuation US$11.76 in open trading, down 10% from deal that both upsized and priced above the on the Series B. the issue price. marketed range. RTW Investments and Viking Global Investors More importantly, Metacrine now has JP Morgan, Jefferies, Piper Sandler and Stifel led the Series B with crossover participation by US$116m of cash for upcoming Phase II placed 12.3m shares at US$19.00, above the institutional investors including Venrock, trials of two potential treatments for NASH. US$16–$18 range marketed and up from Franklin Templeton and Rock Springs Capital. NASH is a liver disease with no FDA 10.3m shares at launch. Athira recently completed a Phase I trial approved treatment and a potential Dyne shares closed on Thursday at of its Alzheimer’s drug and is using IPO blockbuster revenue opportunity. US$23.90, up 25.8% on volumes of 2.2m proceeds to fund an ongoing Phase II trial Metacrine was running out of cash prior shares (the VWAP was US$23.24). through its completion. to its IPO, and necessitating a “going Dyne raised US$115m on a Series B last It has about US$290m of cash from its IPO concern” provision in the prospectus. month with crossover investors Wellington to complete clinical trials of its Alzheimer’s The company is wrapping up Phase I trials Management and Franklin Templeton drug and launch a new Phase II trial of a of its NASH candidates. It now has enough investing at just US$7.00 a share. treatment for Parkinson’s disease. cash to fund Phase II trials on both drugs That is despite Dyne being more than a After completing two private placements through completion. year away from launching clinical trials of in four months, TAYSHA GENE THERAPY is ready Metacrine expects to have data to report its target therapy for muscular dystrophy. to go public. on both trials by the end of next year, or $YNEûHASû53MûOFûCASHûTOûlLLûTHEûGAP Goldman Sachs, Morgan Stanley and Jefferies early 2022. At that point, Metacrine would The upsized US$204m IPO of ATHIRA PHARMA launched marketing last week of 6.56m advance the better performing drug on to on Thursday followed a similar trajectory shares at US$18–$20 for pricing on Phase III. after the Alzheimer’s specialist raised Wednesday, September 23 for up to US$85m from a Series B round in June. US$132m of proceeds. FORTERRA SLUMPS AFTER LONE STAR SALE

0RIVATEûEQUITYûlRMû,ONEû3TARû0ARTNERSûHADûTOû Bentley’s US$204m IPO BEûCONTENTûWITHûAûûlLE TO OFFERûDISCOUNTû INûORDERûTOûOFmOADûAûûSTAKEûINûCONCRETEû offers cashflow, dividends pipe maker FORTERRA late on Wednesday. After two days of marketing, active US Infrastructure software provider offers liquidity for employees bookrunners Credit Suisse, Bank of America and Citigroup priced the sale of 10m Forterra BENTLEY SYSTEMS became the latest subscription DIVIDENDS shares at US$13.50, well down from the software company to set its sights on a Although Bentley recently paid out a US$1.50 stock’s pre-launch close of US$17.38. September debut, launching an up to US$204m a share special dividend (amounting to The extra liquidity proved tough to digest, Nasdaq IPO for pricing in the coming week. US$390m) and will lug the debt used to fund the shares falling 14% to US$12.56 in The founder-led provider of infrastructure that payout into the IPO, Bentley plans to keep Thursday’s session after pricing. software used by civil engineers is growing at a paying quarterly dividends at an unspecified 4HEû53MûOFFERING û&ORTERRASûlRSTû relatively pedestrian pace reflecting its 36-year rate, (though it paid 3 cents a quarter in recent follow-on since its initially disappointing history, but it generates cashflow and dividends periods. US$331.6m IPO (priced at US$18 a share) in unlike most of the current crop of tech IPOs. Bentley is also a customer of the Nasdaq October 2016, enabled Lone Star to cut its The all-secondary IPO will see a range of insiders Private Market, which the company has used stake to 53.6% from 68.9%, leaving it with – mostly management and employees rather since 2016 to give current (and some now 35.1m shares. than the controlling and founding Bentley family retired) employees the ability to sell stock, There is a 90-day lock-up on further sales. – sell 10.75m shares or just 4.1% of outstanding at having collectively become more than one- The offering followed the previous US$17–$19 for pricing on Tuesday, September 22. third owners via stock incentive programmes. Friday’s favourable arbitration ruling Capital Research Global Investors has These sales also enabled strategic partner denying Heidelberg Cement a US$100m indicated an interest in buying US$40m of Siemens to take a 6.1% stake (voting power). earnout allegedly owed by Forterra in shares in the offering. “This public listing fulfills our intention relation to a 2016 asset purchase. Goldman Sachs, Bank of America and RBC for our colleagues to be rewarded for having Clarity over that matter has enabled Capital Markets lead a six-firm syndicate. devoted their prime working lives with the Forterra to prepay US$100m of term debt, A banker close to the deal said Bentley was deserved satisfaction of their equity being taking the total it has repaid so far this year being valued at an EV/free cashflow multiple, valued by the independent market, rather than to US$139m to leave it with US$485m an unfamiliar metric in the software IPO world by formula,” founders Greg, Barry, Keith and outstanding. where revenue multiples are more common. Ray Bentley wrote in their letter to investors. In the second quarter, Forterra lifted sales In the latest half, Bentley grew sales only “To complete our goal of colleague 7% and adjusted Ebitda by 37% year-on-year, 9% to US$379m but generated US$69m of net ownership, we have preceded this IPO with and also expanded adjusted Ebitda margins income and US$116m of adjusted Ebitda. grants of nearly one million shares distributed to 15.3% from 12%. Bentley is coming at a discount to direct comp across every one of our approximately 4,000 Forterra’s stock price slumped to less than and competitor Autodesk, reflecting the latter’s colleagues.” US$4 at the Covid-19 lows in March but had higher growth and margins. Anthony Hughes quadrupled leading up to the offering.

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9 IFR Equities and SE 2351 p91-113.indd 107 18/09/2020 20:05:05 APOLLO TAKES STOCK OF AGEING Reinvent Technology SPAC ADT STAKE Apollo Global Management last week sold 43.5m shares of ADT, the home security nets US$600m on SPAC IPO provider it took public in early 2018, via a US$445m overnight stock sale. US Hoffman, Pincus, Thompson seek to reign in unicorns Sole bookrunner Morgan Stanley wall- crossed investors on Tuesday before If SPACs are all about management, REINVENT Sole bookrunner Morgan Stanley placed 60m launching an accelerated bookbuild at TECHNOLOGY PARTNERS has it in spades with a units at US$10 each, with each unit structured as US$10.00–$10.25, a discount of as much as leadership team that features a three-headed one share and one-quarter warrant. 7.4% to the US$10.80 last sale. monster of Reid Hoffman, Mark Pincus and “Fundamental buyers are viewing this as a Apollo, which had an 82.4% 634.8m-share Michael Thompson. call option on an acquisition, which is the way it’s stake since the IPO, agreed to a 120-day Hoffman ran PayPal early in his career and supposed to work,” said one banker at the ﬁrm. lock-up, a bit longer than typical for sponsor went onto co-found and head LinkedIn before “We saw a lot of non-traditional fundamental sell-downs. taking up residency at Greylock Partners in 2009. investors buying a SPAC for the ﬁrst time.” ADT broke offer on Thursday to US$9.17. He also sits on the board of unicorns such as The play here is to reinvent one of the 417 private Apollo took ADT public in January 2018 Airbnb, Aurora, Blockstream, Coda and Convoy. unicorns - with US$1bn-plus valuation - more than half via the sale of 105m primary shares at Pincus founded Zynga and had two stints of which are in the US, through “protagonist capital” US$14, well below the US$17–$19 range as CEO of the mobile gaming company after that allows a management team to drive innovation. marketed at the time, after paying itself a earlier founding and taking public Support.com “We recognise reinventions are often the US$750m one-time dividend. in 2001. most important transitions a maturing company Under the weight a highly leveraged Thompson, arguably the least well known can choose to pursue and may mark the period balance sheet (US$9.7bn of debt currently) of the three, co-founded and was a PM at BHR before hyper-growth,” Hoffman, Pincus and and amid customer attrition, ADT sank as Capital, a special situations fund where he led Thompson said in the prospectus. “We believe low as US$3.40 in March. several investments as a “protagonist”. reinvention cycles are the growth engines of all An agreement with Google in early Reinvent exploded, in SPAC terms, on debut in successful technology companies.” August, which elevated the stock by 57% to NYSE trading closing Thursday at US$11.10. Stephen Lacey US$13.48 on announcement, may now hold the key to ADT’s revival, and Apollo’s complete exit any time soon. Taysha already raised US$126m from two Morgan Stanley reoffered the shares at Google invested US$450m to acquire a private placements this year, including a US$69, the bottom of a US$69-$70 range and 6.6% stake with the companies agreeing to US$96m Series B last month that was led by a 4.1% discount to the stock’s US$71.96 collaborate on a next generation security. Fidelity Investments. session close. The sale went down poorly The IPO is being marketed slightly above with investors, the stock slumping 11.1% to ESSENTIAL PROPERTIES RETURNS the US$17 a share valuation from the Series B. US$64 in a tough tape to deliver more than FOR FIFTH FOLLOW-ON Taysha raised another US$30m from a US$43m of losses to buyers of the stock. Series A in March, soon after inking a new Current levels are down from First Solar’s Despite a 20% stock price slump this year to partnership with University of Texas late August high of US$81.87 but well up from levels well below its last offering, ESSENTIAL Southwestern Medical Center to develop up its Covid-19 low in mid-March of US$28.47. PROPERTIES REALTY TRUST was still able to price to 18 new gene therapies for central nervous In a statement, First Solar said Walton an upsized US$167.2m overnight follow-on system disorders. intended to use the sale proceeds for new to help fund its acquisition drive. Aside from issuing 2m shares to UT “impact investments” across a variety of Coming on the same day that fellow net Southwestern, Taysha paid almost nothing environmental and social causes. lease REIT Broadstone Net Lease staged a for its development pipeline – no upfront He also plans to donate up to another disappointing debut, Essential sold 8.8m payment, no milestones and no royalties on 8.65m shares to various charities focused on shares or 8.5% of outstanding at US$19, future sales. “urgent issues”, among them Covid-19 relief. inside the US$18.80–$19.60 marketing UT Southwestern, a 7.6% shareholder, The transactions leave Walton, who range and a 4.2% discount to last sale. WOULDûBENElTûFROMûAûPREMIUMûOUTCOMEûONû controls an estimated US$16bn fortune, Joint bookrunners Bank of America, Taysha’s IPO this week, which targets up to with a 4.9% stake in First Solar. Barclays, Citigroup, Goldman Sachs, Mizuho and a US$690m valuation. Walton’s father John, who died in a 2005 Stifel were able to increase the size of the 4AYSHAûEXPECTSûTOûLAUNCHûITSûlRSTû0HASEû)û plane crash, was an early backer of First offering by 10% from 8m shares at launch. clinical trial in Canada this year and three 3OLAR ûHELPINGûITûTOûSCALEûITSûTHINûlLMû06û )NûBRINGINGûTHEûOFFERING û%SSENTIALûmIPPEDû more Phase I programmes expected to technology to become the largest solar from a US$250m ATM it launched in June, launch in the US by the end of next year. module manufacturer in the US. having only so far issued US$27.3m of shares “The Walton family’s history with First at an average price of US$17.88 under that WALMART HEIR SELLS FIRST Solar goes back to our origins as a start-up in programme. SOLAR STAKE Ohio,” said First Solar CEO Mark Widmar. 4HEûOFFERINGûISûALREADYûTHEû2%)4SûlFTHû “By reinvesting the sale proceeds from the follow-on since its US$493.8m IPO priced at Lukas Walton, the billionaire grandson of shares into new ventures focused on some US$14.00 in June 2018 but it came well Walmart founder Sam Walton, on of the most pressing issues facing the world below the US$25.20 price on its last stock 7EDNESDAYûOFmOADEDûMûSHARESûORûû today, he continues a commitment sale (raising US$173.9m) in January. of solar module maker FIRST SOLAR via a consistent with his father’s investment in The REIT has not let Covid-19’s disastrous US$596.8m-plus block trade. First Solar prior to the company’s 2006 IPO.” implications for many landlords dim its

108 International Financing Review September 19 2020

9 IFR Equities and SE 2351 p91-113.indd 108 18/09/2020 20:05:05 EQUITIES AMERICAS

ECM DEALS: WEEK ENDING 18/9/2020 Stock Country Date Amount Price Deal type Bookrunner(s) Nyxoah Belgium 16/09/2020 €74m €17 IPO (Primary) Belfius Bk/Kepler Cheuvreux, Degroof Petercam Cury Construtora e Incorporadora Brazil 17/09/2020 R$980m R$9.35 IPO (Primary, Secondary) BTG Pactual, Itau, BofA, Caixa Plano & Plano Incorporacoes Brazil 15/09/2020 R$690m R$9.40 IPO (Primary, Secondary) Itau, BTG Pactual, Bradesco, MS, Caixa Virtu Brazil 16/09/2020 US$96m US$16 IPO (Primary, Secondary) GS, BofA, Itau, MS, Bradesco, BTG Pactual, CS, Santander, XP Nuvei Canada 16/09/2020 US$700m US$26 IPO (Primary, Secondary) GS, CS, BMO CM, RBC CM, Citigroup, BofA Shopify Canada 15/09/2020 US$990m US$900 Follow-on (Primary) GS, Citigroup, CS China Evergrande New Energy China 15/9/2020 HK$4bn HK$22.65 Follow-on (Primary) Haitong Int, Huatai Int China Feihe China 17/9/2020 HK$2.3bn HK$17.88 Follow-on (Secondary) CLSA ESR Cayman China 17/9/2020 HK$3.15bn HK$22.50 Follow-on (Secondary) BofA, MS Fulu Holdings China 14/9/2020 HK$890m HK$8.90 IPO (Primary) CMB Int Ganfeng Lithium China 16/9/2020 HK$1.45bn HK$36.35 Follow-on (Primary) BofA, CLSA Guangzhou R&F Properties China 16/9/2020 HK$2.5bn HK$9.82 Follow-on (Primary) China Sec, Kingston Sec Joy Spreader Interactive Tech China 16/9/2020 HK$1.57bn HK$2.88 IPO (Primary) BoCom Int, China Merchants Sec, China Sec Int Xiaomi China 15/9/2020 HK$7.9bn HK$22.55 Follow-on (Secondary) GS Enento Group Finland 17/09/2020 €55m €31 Accelerated Bookbuild (Secondary) Danske Bank, Swebank/Kepler Cheuvreux Carrefour France 14/09/2020 €345m €13.80 Accelerated Bookbuild (Secondary) Citigroup, Credit Agricole Technicolor France 17/09/2020 €330m €2.98 Rights issue CS, Natixis Instone Real Estate Germany 14/09/2020 €182m €18.20 Rights issue CS, Deutsche Bank, Mainfirst, UniCredit Route Mobile India 09/11/2020 Rs6bn Rs350 IPO (Primary/Secondary) Axis, Edelweiss, ICICI Sec, IDBI Capital Kornit Digital Israel 16/09/2020 US$230.5m US$56.50 Follow-on (Primary, Secondary) Citigroup, Barc, GS I-ne Japan 15/9/2020 ¥6.2bn ¥2,890 IPO (Primary/Secondary) SMBC Nikko SoftBank Corp Japan 14/9/2020 ¥1.07trn ¥1,204.50 IPO (Secondary) BofA, Daiwa, JPM, Mizuho, Nomura IMCD Netherlands 15/09/2020 €400m €91 Accelerated Bookbuild (Primary) JPM, Exane BNP Paribas, HSBC Century Pacific Foods Philippines 16/9/2020 Ps1.96bn Ps17 Follow-on (Secondary) CS OMV Petrom Romania 15/09/2020 L560.77m L0.33 Accelerated Bookbuild (Secondary) Citigroup, Wood & Co Polymetal Russia 17/09/2020 £342m £18 Accelerated Bookbuild (Secondary) BofA Readly Sweden 16/09/2020 SKr720m SKr59 IPO (Primary & Secondary) ABG Sundal Collier Helvetia Switzerland 16/09/2020 SFr110.8m SFr85.25 Accelerated Bookbuild (Secondary) CS Compass Pathways UK 17/09/2020 US$127.5m US$17 IPO (Primary) Cowen, Evercore, Berenberg NuCana UK 16/09/2020 US$70m US$4.50 Follow-on (Primary) Jefferies, Cowen, William Blair, Truist The Hut Group UK 15/09/2020 £1.87bn 500p IPO (Primary & Secondary) Citigroup, JPM, Barc, GS, HSBC, Jefferies, Numis Watches of Switzerland UK 14/09/2020 £102.3m 310p Accelerated Bookbuild (Secondary) Barc 89bio US 16/09/2020 US$92.4m US$28 Follow-on (Primary) BofA, SVB Leerink, RBC CM ADT US 15/09/2020 US$435m US$10 Accelerated bookbuild (Secondary) MS Alpha Healthcare Acquisition US 17/09/2020 US$100m US$10 SPAC IPO (Primary) Mizuho, Oppenheimer Amwell US 16/09/2020 US$742m US$18 IPO (Primary) MS, GS, Piper Sandler Athira Pharma US 17/09/2020 US$204m US$17 IPO (Primary) GS, Jefferies, Stifel Broadstone Net Lease US 16/09/2020 US$569.5m US$17 IPO (Primary) JPM, GS, BMO CM, MS, Capital One, Truist Chewy US 16/09/2020 US$281.8m US$55.25 Accelerated bookbuild (Primary) MS Dyne Therapeutics US 16/09/2020 US$233.7m US$19 IPO (Primary) JPM, Jefferies, Piper Sandler, Stifel Equity Distribution Acquisition US 15/09/2020 US$360m US$10 SPAC IPO (Primary) CS Essential Properties Trust US 17/09/2020 US$167.2m US$19 Accelerated bookbuild (Primary) BofA, Barc, Citigroup Executive Network Partnering US 15/09/2020 US$360m US$25 SPAC IPO (Primary) Evercore First Solar US 16/09/2020 US$596.8m US$69 Accelerated bookbuild (Secondary) MS Forterra US 16/09/2020 US$135m US$13.50 Follow-on (Secondary) CS, BofA, Citigroup Humanigen US 17/09/2020 US$68m US$8.50 Follow-on (Primary) JPM, Jefferies JFrog US 15/09/2020 US$508.6m US$44 IPO (Primary, Secondary) MS, JPM, BofA Metacrine US 15/09/2020 US$85m US$13 IPO (Primary) Jefferies, Evercore, RBC CM Oaktree Acquisition II US 16/09/2020 US$225m US$10 SPAC IPO (Primary) Deutsche Bank, Citigroup OneWater Marine US 17/09/2020 US$63.4m US$20 Follow-on (Primary, Secondary) Truist, Baird, Raymond James Outset Medical US 14/09/2020 US$241.7m US$27 IPO (Primary) BofA, MS, GS, SVB Leerink, Stifel Pactiv Evergreen US 16/09/2020 US$574.4m US$14 IPO (Primary) CS, Citigroup, BofA, GS PPD US 16/09/2020 US$1,230m US$32.25 Follow-on (Secondary) MS, JPM, Barc, GS Reinvent Technology Partners US 16/09/2020 US$600m US$10 SPAC IPO (Primary) MS Sandbridge Acquisition US 14/09/2020 US$200m US$10 SPAC IPO (Primary) Citigroup, UBS Snowflake US 15/09/2020 US$3,360m US$120 IPO (Primary) GS, MS, JPM, Allen & Co, Citigroup Software Acquisition Group II US 14/09/2020 US$150m US$10 SPAC IPO (Primary) B Riley StepStone US 15/09/2020 US$315m US$18 IPO (Primary) JPM, GS, MS, Barc, UBS Sumo Logic US 16/09/2020 US$325.6m US$22 IPO (Primary) MS, JPM, RBC CM, Jefferies Syneos Health US 15/09/2020 US$418.3m US$59.75 Accelerated bookbuild (Secondary) GS, MS Unity Software US 17/09/2020 US$1,250m US$52 IPO (Primary) GS, CS, BofA, Barc, William Blair

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9 IFR Equities and SE 2351 p91-113.indd 109 18/09/2020 20:05:05 appetite for acquisitions, lining up or projected revenue for 2022, according to &EBRUARYûTHEûlRSTûATTEMPTûINû/CTOBERûLASTû completing US$324.9m of deals (115 2ElNITIVûDATA year was postponed), the company is properties) in the current quarter at an At a 10-times multiple, GoodRx would RETURNINGûTOûTHEûMARKETûWITHûTHEûBENElTûOFû average cap rate of 7.2%. need to increase revenue in 2022 to roughly HAVINGûREPORTEDûRECORDûlSCALûTHIRD QUARTERû US$1.1bn, doubling the current US$513.4m numbers including a 59% surge in new boat GOODRX BOOKS APPOINTMENT FOR full-year 2020 run rate. sales. US$970m IPO Strong sales have helped lift OneWater’s HUMANIGEN MOVES TO NASDAQ stock price from US$3.41 at the Covid-19 GOODRX launched a roughly US$970m IPO on lows in March to as high as US$33.60 in Monday that would value the online HUMANIGEN raised US$68m from a follow-on August. prescription drug aggregator at US$11.3bn. stock sale last week as part of its uplisting to h)TSûAûTERRIlCûCOMPANYûWITHûINDUSTRY The proceeds of the offering, due to price Nasdaq from its previous home on the leading margins and they have exceeded after the market close on Tuesday, will fund OTCQB Venture Market. expectations on every metric they have put expansion into telemedicine, pitting JP Morgan and Jefferies placed 8m shares at OUTûTHERE ûBUTûTHEûISSUEûISûmOAT vûONEû%#-û 'OOD2XûAGAINSTûHIGH mYINGûCOMPSûSUCHûASû US$8.50, versus a US$10.40 last sale, banker said. Teladoc Health and Amwell. providing a healthy dose of 140-days trading Though the deal is not going to add much Morgan Stanley, Goldman Sachs, JP Morgan volume based past activity. to its war chest, OneWater is also seen as an and Barclays are marketing 34.6m shares, Humanigen is a clinical stage developer of ongoing consolidation force in the marine including 11.2m by secondary sellers, at antibodies that may neutralise a cascading industry. US$24–$28 each. Principal backer Silver immune system response associated with Lake is putting in US$100m through a Covid-19 infection, aka the “cytokine concurrent private placement to give it a storm”. BRAZIL 33.8% stake. The lead drug, called Lenzilumab, is Spectrum Equity and Idea Men are selling currently in Phase III trials and could VITRU FAILS TEST ON US$96m US LISTING 6.8m and 3.8m shares to reduce their stakes become eligible for accelerated approval to 12.5% and 15.6%, respectively. under an Emergency Use Authorization VITRU was forced to accept a deeply GoodRx co-CEOs Douglas Hirsch and (EUA) application by the end of this year. discounted valuation on its Nasdaq IPO this Trevor Bezdek have been awarded 12.3m The drug is being tested in concurrent week, prompting the Brazilian online shares in the form of restricted stock units Phase III trials. Mayo Clinic and Dartmouth education platform to dramatically reduce (RSUs) that vest over time based partially on University are half enrolled for a Phase III how many shares it was willing to sell. the company’s stock price. trial with up to 300 patients at 15–20 sites. Goldman Sachs, Bank of America, Itau and There is no lack of investors willing to The National Institutes of Health is Morgan Stanley placed just 6m shares at check in with GoodRx. recruiting patients for a second Phase III US$16 to raise US$96m, at the low end of a “The roadshow schedule is building trial with up to 200 patients at 20 sites. US$16–$18 marketing range that was phenomenally well,” one banker involved Last week’s offering gives Humanigen revised from US$22–$24 on a deal originally said shortly after launch. “We’ve already set US$115m of cash. sized at 11.2m shares. up 75 meetings from inbound calls with The overhaul, which saw secondary long-only, high-quality hedge funds and ONEWATER RIDES BOATING WAVE sellers pull all 5.2m shares they were to have sovereign wealth funds, and it’s not even sold, was communicated early on noon.” After a lengthy four days of marketing, Wednesday, resulting in an additional day of 'OOD2XSûPROlTABILITYûANDûHIGHûGROWTHû ONEWATER MARINE last week broadened its thin marketing on Thursday. underpin that early interest. PUBLICûmOATûANDûBROUGHTûINûNEWûINVESTORSû Vitru shares traded at midday on Friday at In H1 2020, GoodRx generated VIAûAû53MûFOLLOW ONûOFFERING ûITSûlRSTû US$15. US$101.2m of adjusted Ebitda on revenues since February’s successful US$63.7m IPO. Some resistance was not too surprising of US$256.7m, the latter up 48% on year. A syndicate led by Truist Securities, Baird given the previous Brazilian education IPO, The company had 4.4 million monthly and Raymond James priced the sale of 3.17m 6ASTAû0LATFORM ûFELLûmATûANDûISûTRADINGûDOWNû average users during Q2, a drop from 4.9 shares or about 20% of outstanding at some 17% from its offering price in late July. million in Q1 as customers put off in-person 53 ûTHEûûlLE TO OFFERûDISCOUNTû Both deals hoped to recreate the magic of visits with pharmacists due to Covid-19. REmECTINGûTHEûSTOCKSûILLIQUIDITY Arco Platform, which trades on a handsome User numbers recovered to 4.9 million in The offering comprised 425,000 new earnings multiple after more than doubling July. shares and 2.75m from selling shareholders. since its September 2018 Nasdaq debut. GoodRx lowers the costs of prescription The special situations arm of Goldman drugs to consumers by evaluating over 3ACHSûWASûTHEûMAINûSELLER ûOFmOADINGûABOUTû 70,000 pharmacies and 150 billion data 1m shares to cut its voting power to 3.2% CANADA points daily, providing the same type of from 10.2% previously. online comparison shopping available for 4HEûLENGTHYûMARKETINGûPERIODûREmECTEDûAû NUVEI’S US$700m TSX-LISTED IPO consumer goods, online travel, insurance DESIREûTOûlNDûSOMEûNEWûINVESTORSûTHOUGHû HAS GLOBAL APPEAL and other products and services. Wellington Management and Royce & With the purchase last year of HeyDoctor, Associates are two institutional investors NUVEI ûAûlNTECHûHEADQUARTEREDûINû-ONTREAL û GoodRx is expanding its comparison that are already large shareholders) and saw overwhelming investor demand for its shopping capabilities into telehealth. recognition that investors were going to be US$700m TSX IPO, achieving a premium Teladoc, which raised US$1bn in May BUSYûINûTHEûlRSTûPARTûOFûAûHEAVYûWEEKûFORû)0/û valuation that resulted in an increased haul from the sale of a CB, has seen its shares issuance. while holding the line on dilution. more than double this year to US$194.15, Though it took a couple of tries before Active bookrunners Goldman Sachs, Credit valuing it at US$15.5bn, or nine times OneWater went public at US$12.00 in Suisse, BMO Capital Markets and RBC Capital

110 International Financing Review September 19 2020

9 IFR Equities and SE 2351 p91-113.indd 110 18/09/2020 20:05:05 STRUCTURED EQUITY

EQUITY-LINKED DEALS WEEK ENDING: 18/9/2020

Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s) Shopify Canada 15/09/2020 US$800m US$120m 5y 0.13 60.0 Citigroup, Goldman Sachs, Credit Suisse China New Higher Ed China 17/09/2020 US$100m — 363-day 1.00 18.0 Credit Suisse Falck Renewables Italy 15/09/2020 €200m — 5y 0.00 35.0 Barclays, JPM, CA, Intesa Sanpaolo Cardlytics US 17/09/2020 US$200m US$30m 5y 1.00 32.5 BofA, JPM Marcus US 17/09/2020 US$87m US$13m 5y 5.00 22.5 JPM, BofA Medallia US 15/09/2020 US$500m US$75m 5y 0.13 35.0 BofA, Citigroup, Wells Fargo, KeyBanc CM NextEra Energy US 15/09/2020 US$2bn NA 3y 6.22 25.0 BofA, Barclays

Markets placed 26.9m shares at US$26.00, above an upwardly revised US$22–$24 ITALY marketing range and the original US$20– STRUCTURED EQUITY $22 range at launch. FALCK PICKS UP €200m WITH FIVE-YEAR Nuvei sold 24m shares and Canadian GREEN CB PRIVATEûEQUITYûlRMû.OVACAPûTHEûREMAININGû CHINA 2.9m. Following the previous week’s €2.4bn green “Payment investors are certainly willing MUYUAN FOODS PLANS Rmb10bn CB convertible bond issue from EDF, there was to go anywhere,” said a banker involved. more green paper issued last Tuesday night “The book was a who’s who of the payments Shenzhen-listed MUYUAN FOODS plans to raise with Italy’s FALCK RENEWABLES picking up €200m. MAlAv up to Rmb10bn (US$1.5bn) from a six-year 4HEûlVE YEARûPAPERûCAMEûWITHûAûZEROû Nuvei closed its TSX debut at US$33.32 convertible bond offering. coupon and was offered at 100%–102.5% of and C$45.05, 61% and 61.4%, respectively, It will use the proceeds for 23 pig principal, to be redeemed at 100%, for a above offer, and valuing the company at breeding projects, four pig slaughter yield-to-maturity of minus 0.49% to 0%. US$4.3bn. projects, to repay bank loans and for The premium at launch was 32.5%–37.5%, While priced in US dollars, Nuvei shares working capital. with the reference price set by an can be traded in either US or Canadian )TûPOSTEDûAûNETûPROlTûOFû2MBBNûFORû(û accompanying delta placing, where dollars, taking advantage of fungibility ûNEARLYûDOUBLEûITSû2MBBNûPROlTûFORû investors were given the opportunity to allowances between the TSX and NYSE, a the whole year of 2019. Revenue also hedge zero, half or the full 48% delta provision other Canadian issuers have used SURPASSEDûTHEûFULL YEARûlGURE ûATû2MBBNû alongside CB orders. in the past. versus Rmb20.2bn. There is a call after three years with a The company considered a dual (NYSE/ Meanwhile Shenzhen-listed New Hope 130% hurdle. TSX) listing but opted against doing so ,IUHEûRECEIVEDûlNALûWRITTENûAPPROVALûFROMû The placing of 4.5m shares was priced at because of the accounting complexities. the China Securities Regulatory Commission €5.35. Pricing on the CB came in the middle Nuvei is the second largest Canadian IPO at the beginning of September for its plan to with a 101.25issue price, for a YTM of minus this year, trailing only GFL raise Rmb4bn this year for 14 pig breeding 0.25%, and 35% premium for a €7.22 Environmental’s US$1.425bn dual-listed projects. It completed a Rmb4bn six-year conversion price. The last time Falck shares offering in March, and the seventh largest convertible bond offering in January. traded above €7 was in 2007. INûTHEûPASTûûYEARS ûACCORDINGûTOû2ElNITIVû Falck is not rated, so a credit assumption data. of 275bp was based largely on peers and The company facilitates payments SPAIN fundamentals, with no pushback from globally in more than 200 countries and 150 investors and borrow was available. Implied currencies from traditional online shopping TENDER FOR DAMM EB INTO EBRO FOODS vol was around 30% from a range of 26.6%– PLACES ûlNANCIALûSERVICESûANDûTRAVELûTOû û4HEûBONDûmOORûWASû growing verticals like online gambling and Brewer DAMM has launched a tender for a The top 20 accounts of a multiple times social gaming. €200m 1% exchangeable bond, issued in covered book took approximately 70% of In the past year, Nuvei pumped out 2016 through subsidiary Corporacion allocations, with a skew towards outrights adjusted Ebitda of US$131.6m on revenue of Economic Delta and exchangeable into rice and pre-sounded accounts. There were ESG US$324.8m. and pasta business EBRO FOODS. specialists involved but the ESG angle Nuvei has been busy expanding globally UBS is dealer manager on the tender, appeals to a large number of long-only through the acquisition of European which closed at 5pm in Madrid on Friday accounts now, said a banker involved. lNTECHû3AFE#HARGEûLASTû!UGUSTûFORû and sees Damm offering to buy the bonds at The renewable energy business will use US$872.5m and the still pending €221.6m par. The bonds have been trading above 98 PROCEEDSûTOûlNANCEûANDORûRElNANCEûELIGIBLEû purchase of Smart2Pay, another European FORûTHEûPASTûMONTH ûWITHûTHEûOFFERûmATûTOûAû green projects, according to its green bond lNTECH ûTHATûWASûAGREEDûTOûINû-AY small premium of up to one point, framework 2020. Last December, the company raised ACCORDINGûTOû2ElNITIVûDATA Falck Renewables shares closed down US$270m of equity in a private placement The bonds mature on January 12 2023 and 4.42% at €5.4050 on Wednesday. valuing it at US$2bn at the time. all €200m bonds originally issued remain Barclays and JP Morgan were global Nuvei is using the IPO to repay US$495m outstanding. coordinators, and bookrunners with Credit outstanding on a US$717.6m bank loan There is a clean-up option if 85% or more Agricole and Intesa Sanpaolo. Banca Popolare di and another US$93.4m owed to Caisse de of the bonds are purchased in the tender. A Sondrio, MPS Capital Services and UBI Banca dépôt. result is due on September 21. were co-managers.

International Financing Review September 19 2020 111

9 IFR Equities and SE 2351 p91-113.indd 111 18/09/2020 20:05:05 After a day of marketing, joint bookrunners Bank of America and JP Morgan NextEra Energy plays tough late on Thursday priced the CB with a 1% coupon and 32.5% conversion premium, towards the aggressive ends of the 0.75%– on US$2bn MCB 1.25%/27.5%–32.5% talk. Cardlytics spent a portion of the proceeds US Auction format nets utility 6.123% dividend yield on a call spread to limit dilution to share prices above US$128.51, a 100% premium to the Never one to miss an opportunity to access “My guess is that someone dropped out,” said reference price. The company can call the CB capital, NEXTERA ENERGY took advantage of one equity-linked banker whose firm was invited after three years, subject to a 130% threshold, positive news flow last week to land US$2bn to participate. “If you’re at 6.25%, you might be but must leave US$75m of the CB outstanding. from the overnight sale of a three-year willing to sign on for lower economics at 6.219%. mandatory convertible bond. But if you’re at 6.4%, it might be too far to move.” MARCUS KEEPS LENDERS AT BAY WITH CB Bank of America and Barclays reoffered the In the past, the economics were split US$50-par security at a 6.219% dividend, a 50%/30%/20%. Marcus, an operator of movie theatres, 25% conversion premium and original issue This time around, Bank of America absorbed family fun centres, retail shops and hotels, discount of US$48.60. The banks had sought 70% and Barclays the remaining 30%, according suffered a sharp share price slump on to offload their purchase at a US$48.75–$49 to regulatory filings. Thursday after unveiling plans to raise OID, above the US$48.50 paid, at those same NextEra has now done the same trade through 53MûFROMûAûlVE YEARû#" terms. the same format three times in the past year, leading JP Morgan and Bank of America, also among If fully distributed, they earned US$4m some banks to opt out of the process entirely. a consortium of banks that extended a combined on the US$2bn trade. Last September, it was Barclays, Goldman US$98.8m, 364-day term loan to Marcus in NextEra shares fell 5.2% to US$280.35 in Sachs and Credit Suisse on a US$1.5bn MCB that April, jointly marketed the CB with a the aftermath on Wednesday. pays a 4.872% dividend; and in February, it was coupon of 5%–5.5% and conversion premium NextEra, the parent of Florida Power & Light, JP Morgan, Wells Fargo and Bank of America on of 20%–25%. has repeatedly relied on MCBs to help fund its a US$2.5bn MCB that pays a 5.279% dividend. Marcus’ shares dived 34% to US$8.99 in capex needs. Auctioning the security has been NextEra now has US$5.5bn of MCBs that will Thursday’s session as the CB was pitched to its standard practice. roll over in the next three years. INVESTORS ûSOMEWHATûOFFSETTINGûTHEûBENElTSû The utility has presented banks with a term- “NextEra is a big company, but there’s only FROMûSELLINGûAû#"ûINûTHEûlRSTûPLACE sheet and asks them to “solve” for a dividend, so much of this product the convert market can The CB, by comparison, priced with a 25% with the second-best bid setting the price, the absorb,” said the banker. “My guess is they’ll conversion premium, and 5% coupon, which top bidder gaining outsized economics, and a keep doing this until it doesn’t work.” while at the aggressive end of talk is still third presented the opportunity to participate The timing was opportunistic given NextEra generous on a break-even basis. at lower economics. on Monday announced a four-for-one stock split To help cushion the blow, Marcus spent This time around, however, there were only effective October 19, contributing to a 6.3% gain US$15m of the money raised on a call spread two banks, suggesting that possibly a third-place through Tuesday’s close to US$295.70. to offset stock dilution up to US$17.98, a bank elected not to participate. Stephen Lacey 100% premium to reference. It spent the rest to repay bank debt. In a related move, Marcus entered into a Alongside the CB, the company spent new revolving credit facility maturing in UNITED STATES US$44m to acquire consumer insights January 2025 with maximum availability of software provider SENSE360 and follows US$225m, though that was partially MEDALLIA CB RAISES US$500m recent acquisitions of customer service predicated upon completion of the CB. training provider STELLA CONNECT for The term loan back in April was expected MEDALLIA moved to accelerate its growth by US$100m in cash and speech-to-text to see Marcus through Covid-19. Now it RAISINGû53MûFROMûTHEûSALEûOFûAûlVE YEARû#" provider VOCI for US$59m in cash. needs another liquidity injection. The CB marked the software provider’s The acquisitions are part of a plan to combine DEBUTûANDûlRSTûEQUITY LINKEDûTRANSACTIONû Medallia’s customer experience solutions to GLOBAL CONVERTIBLE OFFERINGS since going public in July last year. create a “work from anywhere” contact centre. BOOKRUNNERS: 1/1/2020 TO DATE Medallia shares fell 6.5% to US$29.15 while Medallia ended the second quarter with Managing No of Total Share the CB was being marketed on Tuesday, US$347.5m of cash and US$43m drawn on bank or group issues US$(m) (%) continuing a descent since the company its revolver, down from US$407.5m and 1 JP Morgan 96 17,759.39 13.3 reported second-quarter results earlier this 53M ûRESPECTIVELY ûATûTHEûENDûOFûlRSTû 2 Goldman Sachs 82 16,916.84 12.7 month without providing guidance. quarter after paying for Voci. Sense360 and 3 Morgan Stanley 74 15,410.03 11.6 Bank of America, Citigroup, Wells Fargo and Stella Connect would have drained cash 4 Bank of America 69 13,175.35 9.9 KeyBanc Capital Markets priced the CB with a reserves to around US$190m. 5 Citigroup 50 8,587.38 6.5 0.125% coupon and 35% conversion 6 Barclays 33 4,556.86 3.4 premium, toward the aggressive ends of the CARDLYTICS SELLS US$200m CB 7 Credit Suisse 28 3,779.86 2.8 0.125%–0.625% and 32.5%–37.5% price talk. 8 Wells Fargo 23 3,414.90 2.6 Medallia spent US$53.8m on a call spread CARDLYTICS raised US$200m from the sale of a 9 BNP Paribas 18 3,174.27 2.4 to limit dilution to prices up to US$58.30, a lVE YEARû#" ûMARKINGûTHEûCONSUMERû 10 Guotai Junan Secs 13 2,821.23 2.1 100% premium to the reference price. INTELLIGENCEûSOFTWAREûlRMSû#"ûMARKETû Total 371 133,093.51

The offering will help bankroll Medallia’s debut and only its second ECM deal since Including exchangeables and domestic offerings. recent acquisition spree. going public in February 2018. Source: Refinitiv SDC code: C9

112 International Financing Review September 19 2020

9 IFR Equities and SE 2351 p91-113.indd 112 18/09/2020 20:05:07 THE FIRST STEP IN CLO ANALYSIS: DETAILED, ACCURATE, AND TRANSPARENT LPC COLLATERAL

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9 IFR Equities and SE 2351 p91-113.indd 113 18/09/2020 20:05:08 INTERNATIONAL FINANCING REVIEW CONTACTS

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

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

114 International Financing Review September 19 2020

10 IFR Masthead 2351 p114-115.indd 114 18/09/2020 19:40:33 OUR DATA COMES DOWN TO TWO SIMPLE THINGS. WHAT WE DO WITH IT. AND WHAT YOU ACHIEVE WITH IT.

Make better business decisions with Refinitiv’s filtered, cleaned, integrated data sets. refinitiv.com

10 IFR Masthead 2351 p114-115.indd 115 18/09/2020 19:40:34 INTERNATIONAL FINANCING REVIEW INDEX

89bio 106 Compass Pathways 103 Iskandar Waterfront Holdings 95 Rentenbank 29 ADNOC Distribution 101 Consolidated Communications 88 Jarden 17 RNHB 45 ADT 108 Corsair Gaming 106 JC International Leasing 79 Rothschild 19 Adtalem Global Education 83 Coventry Building Society 39 JFrog 105 Sabadell 15 Africa Finance Corporation 72 CPI Ronghe Financial Leasing 79 Jingdong Digits Technology 93 Safilo 82 Agha Steel Industries 96 Credit Suisse 15 Jinke Smart Services Group 92 Santander 14, 15, 50 Agiliti Health 86 CSM Corp 50 Jio Platforms 20 Scentre Group 32, 35 Aimbridge Hospitality 85 CTP 63 John Lewis 83 SCG Packaging 97 ALD AutoLeasing 48 CVC Credit Partners 49 JP Morgan 13, 14, 21, 36 Sense360 112 Aligned Energy 84 Damm 111 KBR 26 Shanghai Titan Scientific 94 Allegro 99 DBCT Finance 36 KfW 28 Shawbrook Bank 48 Allianz 19 Delta Air Lines 6, 84 Kion Group 35 Shearer’s Foods 87 Altice France 43 Deutsche Bank 40 Kioxia Holdings 91 ShenZhen Consys Science & Technology 94 Amadeus IT Group 35 Dexia Credit Local 30 Kiwibank 41 Shenzhen EXC-LED Technology 94 AMAG Leasing 48 Digital Realty 34 Knaus Tabbert 98 Snowflake 8 American Securities 85 Dominican Republic 74 Kornit Digital 98 Societe Generale 40 AM General 26 Drax Group 82 Kraft Heinz 41 SoftBank Corp 95 Amwell 105 Dun & Bradstreet 84 Kuaishou 91 Sovcombank 72 AmWINS 86 Dyne Therapeutics 107 Landesbank Saar 42 Sovcomflot 100 Anbang Insurance Group 21 Ebro Foods 111 LATAM Airlines 90 SpareBank 1 Boligkreditt 43 Ancestry.com 26 ECI Software Solutions 88 LG Chem 96 Sparebanken Vest Boligkreditt 43 Asian Infrastructure Investment Bank 28 EIB 27 Liberbank 15 SPCM 43 Asia Sermkij Leasing Public 81 Eika Boligkreditt 43 Lippo Karawaci 68 Speedcast International 89 Athene Global Funding 41 El Corte Ingles 44 Lippo Malls Indonesia Retail Trust 68 Spire Healthcare 82 Athira Pharma 107 Ellucian 88 Macquarie Group 19 Stanley Black & Decker 83 AT&T 33 Emirates Islamic Bank 74 Maxeda DIY Group 42 Starwood Property Trust 86 Auckland Council 31 Enento Group 97 Medallia 112 Stella Connect 112 AusNet 32 EP Global Commerce 81 Mercedes-Benz 50 StepStone Group 103 Aveanna Healthcare 88 Epic Suisse 101 Metacrine 106 Sumo Logic 105 Avianca 89 Essel Propack 94 MetInvest 72 Supermarket Income REIT 102 AVIC International Holding Corp 3 Essence Intl Financial Holdings 80 MetLife 40 SUSE 86 AVIC International Leasing 79 Essential Properties Realty Trust 108 Mexico 4 Swedbank 38 Avon Finance No.2 45 Essentra 102 Michaels Stores 88 Swire Pacific 80 Bangkok Bank 70, 71 Everest Medicines 93 Ming Yuan Cloud Group 93 Syneos Health 105 Bankia 15 Export-Import Bank of Korea 71 Mitsui Fudosan Logistics Park 95 Taysha Gene Therapy 107 Bank of America 13, 14 Falck Renewables 111 MobiKwik 95 Technicolor 97 Bank of China 65 Fannie Mae 50 Mondelez 34 Terna 35 Baozun 10 Federal State of Berlin 30 Morgan Stanley 14 The Hut Group 8 Barclays 13, 38 Finance Ireland 45 Munich Re 37 Think & Learn 80 Barrette 86 First Quantum Minerals 73 Muyuan Foods 111 TI Group Automotive Systems 77, 89 Bawag PSK 42 First Solar 108 NatWest Group 36 Tingyi (Cayman Islands) Holding 65 BBVA 15 Flipkart 20 Netsmart Technologies 85 T-Mobile USA 84 BCEGI (Hong Kong) 80 Ford Motor 50 Neusoft Education Technology 92 Tongyang Life Insurance 69 Beijing Capital 94 Forterra 107 New Development Bank 28 Uber Technologies 41 Beijing Enterprises 64 Fortress Investment Group 86 New Zealand Treasury 31 UBS 15 Bentley Systems 107 Freddie Mac 50 NextEra Energy 112 Unibail-Rodamco-Westfield 99 Big Hit Entertainment 96 Frontier Biotechnologies 94 NN 85 Unicaja 15 Bindawood Holding 100 Fulu Holdings 93 NN Bank 42 UniCredit 38 BlackRock 49, 50 Ganfeng Lithium 92 Nordic Transport Group 97 Unifiedpost 97 Blackstone 49 GCI Liberty 86 Novartis 4 Unipol 37, 38 BNP Paribas Personal Finance 49 GDS 10, 92 NRW.Bank 30 Uniti Group 78 Broadstone Net Lease 104 Genertec Universal Medical 78, 79 NSW Electricity Networks Finance 78 Unity Software 8, 104 Bulgaria 63 Genor Biopharma 92 NuCana 103 Uruguay 5 Burberry 35 Ginnie Mae 50 Nuvei 110 US Federal Reserve 14 Burckhardt Compression Holding 36 Glencore 36 Nykredit 39 US Solar Fund 102 Cablevision Lightpath 87 Global Medical Response 85 Ola 20 Verizon Communications 33 Cades 28 Goldman Sachs 14, 17 OMV Petrom 99 Vertical Bridge 51 Caffil 42 GoodRx 110 OneWater Marine 110 Vistra 77, 85 CaixaBank 15 Gruppo PSC 82 Optimum Credit 45 Vitru 110 Cardlytics 112 Gulf International Bank 72 Osram 82 Vivo Energy 73 Carrefour 98 Hamburg Commercial Bank 39 Outset Medical 105 Voci 112 Cassa Depositi e Prestiti 30 Harvester Holdings 101 Oyo 20 Volkswagen 6 Cemex 75 Helvetia 101 Pactiv Evergreen 86, 106 Wabash National 89 Century Pacific Food 96 Hensoldt 81, 98 Palantir Technologies 103 Watches of Switzerland 102 Chailease International Finance Corp 81 Hesse 29 Paytm 20 Waystar 86 Changchun BCHT Biotechnology 94 Hisense (Hong Kong) 78 PCI Pharma 85 Wells Fargo 14 Charoen Pokphand Indonesia 81 Hozon New Energy Automobile 94 Pilgangoora Operations 78 Wilmar International 81 Chile 5 HSBC 36, 38 Pimco 19 Winner Medical 94 China Aviation International Holding 80 Huazhu Group 10 Ping An International Financial Leasing 79 World Bank 30, 31 China Dev Bank Financial Leasing 64 Humanigen 110 Playtech 83 Xiamen Bank 94 China Evergrande New Energy Vehicle 93 Hunan Changyuan Lico 94 Polymetal 100 Xiaomi 93 China Feihe 92 Hyland Software 85 Port of Tauranga 36 Xinjiang Daqo New Energy 94 China International Capital Corporation 94 IMCD 99 Power Finance Corp 81 Yihai Kerry Arawana Holdings 94 China National Chemical Corp 2, 64 Indus Holding 82 PPD 106 Yum China 10 China Star Optoelectronics Intl (HK) 80 Industrial and Commercial Bank of China 70 PSA Financial Services 48 Zai Lab 10 China Three Gorges Corp 2 I-ne 96 PTT Oil and Retail 96 Zhongyu Gas Holdings 79 Citigroup 13, 14, 18 InSite Wireless 51 Qatar National Bank 74 ZTO Express 10 Clarivate 85 Instone Real Estate 98 Rabobank 10, 38 Zuercher Kantonalbank 40 Clearview Wealth 41 International Development Association 27 Radiate 88 Coca-Cola 32, 34 Intrum 44 Readly International 100 CoFF 42 iQor 89 Reinvent Technology Partners 108

116 International Financing Review September 19 2020

11 IFR Index 2351 p116.indd 116 18/09/2020 20:19:51 IFR’s ESG Financing Brieﬁng

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To subscribe or learn more, e-mail ifr.clientsupport@reﬁnitiv.com ASIA HIGH YIELD WEBCAST

The IFR Asia High Yield webcast will take place on the afternoon of Tuesday October 6 2020 and will present an update on the recovery of FORMAT the high-yield bond market in the wake of the Covid-19 crisis. WEBCAST Moderated by IFR Asia’s Editor Steve Garton, the event will bring TIME together a virtual panel of experts from across the industry spectrum to 3PM discuss the challenges and opportunities within the market, along with DATE an outlook for the year ahead and beyond OCTOBER 6 2020 Topics to be discussed will include: • What are the bright spots in high yield, against a backdrop of so many downgrades? • What is the outlook for corporate defaults in Asia, and how will the coronavirus pandemic affect this? • What are the implications of global rate cuts and monetary stimulus measures? • Investor appetite has returned for high-yield bonds from some sectors like property, but what will it take for credits from other industries to engage investors? • What is the state of liquidity in secondary markets, and how does this play out during a crisis? • What are the prospects for issuance from frontier markets this year? • How will covenant quality and best practices evolve post-Covid? The webcast is free to access and you can secure your place today at https://tinyurl.com/yyrudg9g