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APRIL 13 2019 ISSUE 1085

Asian issuers in control as manic week

for bond sales goes off without a hitch

Sustainable finance thrives Down Under

with debuts for Woolworths and IDB

Japan Post set for third and final state

sell-down after government invites bids


First 50-year yen Societe Generale Sporting goods Citigroup’s Asia
bond highlights bid capitalises on store MAP Active Pacific chief adds to
for duration in Singapore savings revives interest in flurry of leadership
low-rate Japan with first AT1 Indonesian ECM changes
05 07 08 12
IFR presents a panel discussion on the role of the institutional 2&>
2TIJWFYJIG^.+7&XNF*INYTWSteve Garton, this seminar will &)'2**9.3,


The seminar includes a buffet lunch and is FREE TO ATTEND for all delegates at the
52nd ADB Annual Meeting in Fiji.


Race to the top With all that in mind, it’s no wonder Asian issuers want
to get their deals done as quickly as they can.

rrational exuberance may be making a comeback in
Asia's bond markets.
Last week alone, Asian issuers printed a massive Cheques in the post
US$14bn of US dollar bonds, including over US$5bn of high-

yield debt, with barely a whisper about oversupply. he Japanese government is doing its part for Asia's
Investors moaned about Indian high-yield borrowers not equity capital markets again this year, with more
paying enough, but then bought their deals anyway. Bank giant offerings from the Japan Post group set to
OFû#HINAûOFFEREDûlVEûDIFFERENTûCURRENCIESûATûONCEûWITHOUTû dominate 2019 volumes. Even these multi-billion-dollar
cannibalising demand. A Mongolian miner that defaulted deals, however, are no guarantee of liquidity.
THREEûYEARSûAGOûMANAGEDûTOûRElNANCEûWITHûEASEûINûTHEû The three-pronged listing of Japan Post's banking,
international bond market. insurance and holding companies in 2015 did a masterful
Indian non-bank lenders are now queuing up to sell US job of generating excitement around the gradual
dollar bonds because onshore investors won’t lend to them privatisation of a low-growth state enterprise.
at attractive rates anymore. Low-rated companies like Since the initial enthusiasm - especially around JP Insurance,
Bollywood producer Eros International have resurrected arguably the most promising growth story of the three -
interest has waned. The stable prices and thin volumes suggest
the bulk of the shares have ended up with the kind of long-
It’s fair to say there are trade shares. Mrs Watanabe probably used some of her postal
warning signs that the Low liquidity makes it challenging for the government to
market is approaching a top. pare its stake further, but it also shows a way forward for
future offerings.
Only JP Holdings, the parent company, trades in any
kind of volume, and that is more because of the US$11.5bn
plans for dollar bonds that failed to take off two years ago, follow-on in September 2017 than the initial public offering.
and perpetual bonds are back on the table. !VERAGEûDAILYûTRADINGûSLIDûTOûMûSHARESûINûTHEûlRSTûEIGHTû
Add to that the longest ever corporate bond in Japan and months of 2017; the following year's average was over 8.2m.
a record SoftBank retail offering and it's fair to say there are At close to 700 days' trading, the roughly US$3bn
warning signs that the market is approaching a top. secondary follow-on in JP Insurance, due to price this week,
It's also notable that there hasn’t really been much should have a similar impact on that stock's liquidity.
positive news to drive investors into risk-on mode. Global The government's next JP Holdings sale will also be
growth is slowing and there is no progress at all on the massive, at around 175 days' trading if it sells the full
China-US trade talks. The only thing driving demand is US$12bn. But JP Holdings could also buy back stock to
low rates and the hope that Trump will bully the Fed into support the placement, as it did in 2017. At some point
cutting rates later this year. the holding company also needs to sell some of its stake in
It's a similar story in equities, where investors piling Japan Post Bank, raising a similar challenge.
money into loss-making tech stocks got a reality check from The next JP Holdings sell-down will also take the
the second-day slide in newly listed Lyft. government's stake below 50%, completing the privatisation
In the absence of good news to sustain the rally, there is a process. That will move Japan closer to its goal of creating a
real risk that market conditions will take a sudden turn for the deeply liquid group of attractive stocks that will encourage
worse, either when the US economy starts to justify talk of a more savers to invest in the market, but there are no
recession or the Fed starts talking about raising rates again. shortcuts.

International Financing Review Asia April 13 2019 1



Steve Garton Multibank 42
21Vianet Group 19 Muthoot Homefin 9, 34
ûû û ûû Aboitiz Power Corp 39 Nanjing Chervon Auto Precision Technology 29 Adira Dinamika Multi Finance 37 New World China Land 32
DESK EDITOR AFG 2019-1 Trust 18 NIIT Technologies 35
HEAD OF ASIAN CREDIT 6INCENTû"ABY Aflac Life Insurance Japan 37 Ningxia Baofeng Energy Group 29
$ANIELû3TANTON Agile Group Holdings 24 NTPC 10, 36
ûû SUB-EDITOR Alibaba Group 23 Olam International 40
$AVIDû(OLLAND Amman Mineral Nusa Tenggara 9 Oto Multiartha 37
ASIA EQUITIES EDITOR AMP Capital 19 Pacific Radiance 41
Fiona Lau HEAD OF PRODUCTION AMP Group 17 Peking University Founder Group 21
ûû Victor Ng Anheuser-Busch InBev 25 Pelabuhan Tanjong Priok 9
Asian Development Bank 38 Pepper 18
Frances Yoon Bajaj Energy 36 Pepper I-Prime 2019-1 18
Mike Tsui
Bajaj Finance 8 Perkebunan Nusantara III 37
HEAD OF GLOBAL ADVERTISING AND Bangkok Expressway and Metro 43 Perseus Mining 19
DEPUTY EQUITIES EDITOR, ASIA Bank of China 4, 11, 20 Perusahaan Gas Negara 37
SPONSORSHIP Piramal Capital and Housing Finance 8
Baozun 26
S. Anuradha 3HAHIDû(AMIDû Beijing Roborock Technology 25 Polycab India’s 36
ûû ûû Bloomage Biotechnology 25 Power Finance Corp 10, 34, 36
BoCom Leasing Management Power Grid Corp of India 10
IFR ASIA AWARDS MANAGER Hong Kong 24 Property Perfect 43
+ITû9INû"OEY CanSino Biologics 28 Province of Quebec 17
ûû CCB Leasing (International) Corp 24 Qingdao Huicheng
û ûû Chailease Holding 43 Environmental Technology 29
0RAKASHû#HAKRAVARTI China Aoyuan Group 25 Quasar Engineering 31
PRODUCTION MANAGER China Evergrande Group 4, 9 ReadyTech 19
'LORIAû"ALBASTROû China National Nuclear Power 29 REC 34
SENIOR REPORTERS: HONG KONG û ûû China New Higher Education Group 28 Redsun Properties Group 22
4HOMASû"LOTT CK Hutchison Holdings 4, 30 Reliance Industries 35
ûû SUBSCRIPTION SALES ENQUIRIES Copenhagen Infrastructure Partners 43 Rentenbank 17
China, Hong Kong, Taiwan, Korea, Japan CPI Ronghe Financial Leasing 24 Resimac 18
#AROLû#HAN DBS Group Holdings 40 Samson Oil & Gas 19
!LANû7ONG Duiba 27 Semen Indonesia 36
ûû Eros International 33 Shandong Yuhuang Chemical 20
SENIOR REPORTER: SYDNEY Everbright Securities 23 Shanghai Juneyao Airline Hong Kong 32
India, Singapore, Malaysia, Thailand, Fantasia Holdings Group 20 Shanghai MicroPort Endovascular MedTech 25
Indonesia and Australia Frasers Property 41 Shanghai Zhonggu Logistics 28
3AMANTHAû(ARRIS Gaw Capital Partners 31 Shennan Circuits 29
SENIOR ANALYST: TOKYO Government Housing Bank 43 Shenwan Hongyuan Group 26
ûû Grand River Development 42 Shenzhen New Land Tool
Takahiro Okamoto
Greenland Financial Holdings Group 21 Planning & Architectural Design 29
ûû SUBSCRIPTION ACCOUNT MANAGER Guangdong Songyang Recycle Resources 29 Shriram City Union Finance 9
0IAû"ATUAN Guangdong Yueyun Transportation 28 Shriram Transport Finance 8
ûû Guotai Junan Securities 27 Sino Biopharmaceutical 24
+RISHNAû-ERCHANT GWA Group 19 Skyworth Digital 29
ûû CLIENT SERVICES Hansoh Pharmaceutical Group 28 Small Industries Development HDFC Bank 33 Bank of India 35
REPORTER: HONG KONG Heartland Bank 38 SMBC Aviation Capital 37
#ANDYû#HAN WEBSITE Hebei Highway Development 28 Societe Generale 7, 17
ûû Hengli Group 31 SoftBank Group 38 Hero FinCorp 8 Soho Global 9
EQUITIES RESEARCHER: BEIJING Hollysys Automation Technologies 26 Southwest Securities International Securities 22
+ARENû4IAN Home Credit Group 30 So-Young International 28
lRSTNAMELASTNAME RElNITIVCOM Huai’an Water Conservancy Spark New Zealand 39
Holding Group 21 Srei Infrastructure Finance 9
CHINA CREDIT RESEARCHER: BEIJING Huaibei City Construction Sunac China Holdings 22
Investment Holding Group 21 Suncorp-Metway 17
Hunan Yussen Energy Technology 28 Suzhou Planning & Design
ûûû Huya 26 Research Institute 29
IFC Development 30 Tewoo Group 21
Indian Railway Finance Corp 10 Thai Airways 43
Indonesia Eximbank 37 Toray Industries 38
IndusInd Bank 33 Toyota Finance New Zealand 39
HONG KONG (HEAD OFFICE) SINGAPORE Inter-American Development Bank 5 Toyota Motor Credit Corp 37
&û#ITYPLAZAû û û3CIENCEû0ARKû$RIVE û Jakarta Eye Centre 9 TPI Polene 43
Japan Oil Gas & Metals National 38 Trade Me 39
û4AIKOOû7ANû2OAD û 3INGAPOREû û3INGAPORE Japan Post Holdings 6 Trade Me Group (Titan
Taikoo Shing, ûû Japan Post Insurance 6 Acquisitionco New Zealand) 39
(ONGû+ONG JSW Steel 34 TungKong 27
ûû LONDON KfW 17 TungKong Ruiyun Data Technology 27
û3OUTHû#OLONNADE û#ANARYû7HARF Korea Resources Corp 42 United Overseas Bank 40
TOKYO ,ONDONû%û%0 Lakala Payment 29 Vedanta Resources 4, 33
Larsen & Toubro 34 Visionvera Information Technology 25
&û!KASAKAû"IZû4OWER û û ûû
La Trobe Financial 17, 18 Viva Biotech 27
  û!KASAKA û La Trobe Financial Capital Markets Volkswagen Financial
Minato-ku, Tokyo, Trust 2019-1 17 Services Australia 17
û4IMESû3QUARE ûTHû&LOOR Leong Hup International 8 Waskita Karya 37
.EWû9ORK û.9 LG Chem 4, 42 Wheelock Finance 32
ûûûû Liberty 18 Woolworths Group 5
L&T Finance 9 Wuxi Construction and
Magma Fincorp 9 Development Investment 23
Mahindra and Mahindra Financial Services 8 Xianhe 30
MAP Aktif Adiperkasa 8 Xinyuan Real Estate 23
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2 International Financing Review Asia April 13 2019

APRIL 13 2019 ISSUE 1085


04 Manic week for Asian bond sales 17 AUSTRALIA 39 PHILIPPINES
Asian international bond issuance is at fever pitch, as Troubled Australian financial Marlow Foods, a unit of Monde
AMP Group returned to the Nissin, has closed a debut
borrowers rush to use falling credit spreads and global Swiss market with a SFr140m £123m five-year borrowing, with
investors chase returns in a low-yield environment. 0.8% 4.25-year senior Asian banks largely supporting
unsecured bond issue. the deal.
05 ESG bonds thrive Down Under 19 CHINA 40 SINGAPORE
Australia showcased its ESG credentials again last 21Vianet Group last Tuesday DBS Group Holdings priced a
priced US$300m of 2.5-year US$750m three-year senior
week with two original bond offerings from the Inter- senior unsecured bonds to fund unsecured bond offering at
American Development Bank and Woolworths Group. a tender offer, drawing orders of 99.946 with a coupon of 2.85%
over US$1.4bn. to yield 2.869%.
05 Japan welcomes first 50-year bond 30 HONG KONG 42 SOUTH KOREA
Hong Kong conglomerate CK Korea Resources Corp priced
With the first 50-year senior bond of ¥15bn, Mitsubishi
Hutchison Holdings has priced US$400m five-year senior
Estate took the yen bond market into new territory, US$1.5bn dual-tranche senior unsecured bonds at Treasuries
tapping demand for duration in low-rate Japan. unsecured bonds after drawing plus 102.5bp, drawing orders of
over US$2.8bn final orders. over US$2.85bn.


Bollywood film company Eros Grand River Development has
06 Japan’s postman rings thrice International has hired two to launched a US$100m three-
Japan’s government has started its third and final arrange fixed income investor year mezzanine to part-finance
mammoth sell-down in the postal and financial giant meetings in Hong Kong, the construction of Taipei Sky
Singapore, London and the US. Tower in Taipei’s Xinyi district.
Japan Post Holdings in a deal worth around US$12bn.
07 SocGen capitalises on Singapore savings SocGen sold its first 2019 36 INDONESIA 43 THAILAND
bank capital deal to a rousing reception in Singapore. Semen Indonesia plans to raise Thailand’s state-owned
08 MAP re-activates Indonesian ECM MAP Aktif Adiperkasa wrapped up a Rp4.9trn from two-part bonds, Government Housing Bank is
Rp4.2trn re-IPO in Indonesia, reviving major share sales in the country. with ranges of 8.50%–9.25% planning to market bonds in
08 Indian NBFCs target dollar funding India’s non-banking financial sector for a five-year and 8.75%– tenors of three to 15 years to
is lining up USD issues with tight spreads offshore and falling hedging costs. 9.50% for a seven-year tranche. raise up to Bt20bn.

PEOPLE & MARKETS SMBC Aviation Capital last
Monday priced a US$500m
12 Citi loses Asia Pacific CEO five-year bond at 99.868 with
Citigroup’s Asia Pacific chief executive resigned a coupon of 3.55% to yield
unexpectedly after almost four years in the role, adding 3.579%, at the tight end. 14
to a string of leadership changes at the US bank. 38 MALAYSIA
13 StanChart fined US$1.1bn for Iran breaches StanChart has been fined Maybank Islamic has raised
US$1.1bn by the US and UK for Iran sanctions and other compliance flaws. M$1bn from the sale of 10 non-
14 JP Morgan, Nomura plot different JV paths JP Morgan and Nomura are call five Islamic bonds that will
pursuing very different strategies for their new Chinese securities JVs. qualify as Tier 2 capital. The
12 Who’s moving where JP Morgan has selected Takenori Yoneda to head notes will pay 4.5%.
up corporate banking in Japan after Takasuke Sekine left earlier this year.
16 In brief MUFG is set to scale back its bond and equity operations in 38 NEW ZEALAND
London and New York as part of a restructuring of its global markets division. Asian Development Bank
priced a NZ$200m seven-year
Kauri bond on April 5 with joint
ASIA DATA lead managers ANZ and TD
44 This week’s figures

International Financing Review Asia April 13 2019 3

NewsJapan Post sell-down 06 SocGen AT1 07 MAP Active re-IPO 08

Manic week for Asian bond sales

„ Bonds New issues hold up in secondary, despite glut of supply

BY DANIEL STANTON, because of fund inflows, and bonds were seen slightly above RESOURCES rounded out the
FRANCES YOON it doesn’t seem like the Fed is reoffer. week with a US$1bn high-yield
going to raise rates soon.” “The market is mature bond late on Thursday that
Asian international bond Emerging-market debt funds enough that it can handle also priced well inside initial
issuance has reached fever recorded inflows in 12 of the US$7bn in one day,” said a DCM guidance. (See India Debt capital
pitch, as borrowers rush to past 13 weeks, according to syndicate banker. “I don’t think markets.)
take advantage of falling credit research from Bank of America anyone’s deal got damaged as a
spreads and global investors Merrill Lynch. result of all the supply. It shows HERE TO STAY?
continue to chase returns in a Issuers from Asia rushed Asia is developing into a very With the European Central
low-yield environment. to the bond market on liquid, deep market.” Bank and Federal Reserve
Asian issuers sold US$14bn of Monday as they tried to seize Monday’s activity followed signalling a dovish outlook
G3 bonds last week, excluding a brief window before Saudi issuance of US$11.9bn the for interest rates, bankers are
Japan and Australasia, the most Aramco’s expected US$12bn previous week, according to confident that the conducive
since the second week of April offering and key central bank IFR data. backdrop for primary supply
2018, according to Refinitiv announcements. Deal activity sped up again will continue.
data. Eight Asian issuers printed on Wednesday, when BANK The first banker did note that
April is typically a busy US$7.3bn of bonds on Monday, OF CHINA priced a US$3.8bn- secondary levels have tightened
period for bond issues as including a US$2bn multi- equivalent transaction across aggressively since the start of
companies return to the market tranche offering from CHINA five currencies and eight the year, and that gains could
with refreshed financial results, EVERGRANDE GROUP and US$1.5bn tranches. slow from now on.
and bankers say this month from Hong Kong conglomerate Six deals priced the same day, “It’s hard to see a spread rally
could be the busiest April on CK HUTCHISON HOLDINGS. raising US$5.4bn, but a banker from here. It’ll only happen
record, rivalling the US$38bn Perhaps surprisingly, there on the BOC deal said that did if we see a let-up in primary
sold in the same month last were no casualties among the little to curb appetite for the supply,” he said.
year. primary offerings, and most Chinese lender. The JP Morgan US dollar Asia
“People realise that markets performed well in secondary “This deal blew out the door,” Credit Index, which has around
are good,” said an origination on Tuesday as Aramco gathered he said. “Markets are hot. There a five-year average maturity,
banker who worked on orders. is pent-up demand from a lack has rallied since the start of
multiple deals that priced LG CHEM’s dollar bonds of quality paper, including the year, with the Z spread
last week. “The current tightened 5bp–8bp, while Chinese financials.” tightening 53bp to 197bp.
environment is sustainable China Evergrande Group’s Indian mining group VEDANTA The rally has stalled recently,
however, since hitting 195bp
on March 19.
The iTraxx Asian investment-
grade CDS index has also
retreated 2bp since hitting
a 12-month tight of 63.75bp
on March 19, but is still 32bp
tighter since the start of the
Signs of strain in the Chinese
high-yield property sector are
also showing, as aggressive
pricing strategies have tripped
up a few deals so far this
“There is some degree of
indigestion already especially
in the Chinese property sector,
although markets are still
conducive for primary supply,”
said a Hong Kong-based
investor. “There is reinvestment
demand, but deals have priced
without much of a concession
for the past month.” „

4 International Financing Review Asia April 13 2019

For daily news stories

Evergrande forever 09 Mongolian Mining 10 India’s Samurai snub 10

ESG bonds thrive Down Under 63% of total assets under

management across Australia
and New Zealand following
„ Bonds Soaring Aussie demand attracts more Green and Social issues a responsible investment
BY JOHN WEAVERS it is funding, primarily solar five-year bond, via ANZ, CBA and The Responsible Investment
panels and in-store LED lighting. JP Morgan, will finance eligible Benchmark Report 2018
The Australian capital market ANZ, Citigroup and JP Morgan were projects in Latin America and the previously reported A$866bn of
showcased its environmental, joint leads. Caribbean. responsible investments under
social and governance (ESG) “Australia’s large green The 1.95% April 23 2024s management in Australia as of
credentials again last week with investor base and elevated priced at 99.929 for a yield of December 31 2017, ahead of
two original bond offerings from demand for non-discretionary 1.965%, 35bp wide of asset swaps further substantial growth in
the INTER-AMERICAN DEVELOPMENT retailers in times of slower and 50.5bp over the April 2024 2018.
BANK and WOOLWORTHS GROUP. economic growth underpinned ACGB. Pricing was also in line Last week’s two trades take
Woolworths, rated Baa2/ the transaction,” said a banker with IDB’s standard Kangaroo this year’s ESG issuance in
BBB (Moody’s/S&P), attracted a on the deal. “It also enjoyed curve and its existing EYE US Australia to A$3.24bn following
stunning order book in excess of plenty of scarcity value as a rare dollar curve. the record A$1bn five-year
A$2bn (US$1.42bn) for Friday’s corporate issue and, specifically, “The Kangaroo market SSA Green Kangaroo by Asian
debut Green bond, the first such Woolworths’ first local offering was chosen for IDB’s first Development Bank, a A$1.25bn
issuance by an Australian retailer in over seven years.” EYE issuance outside of the Green five-year from Queensland
and the first by a supermarket Woolworths previously sold US dollar market because it Treasury Corp and A$90.9m
globally under the Climate Bonds a A$500m seven-year domestic offers diversity and volume, of Green ABS originated by
Initiative’s recently approved MTN in 2012, the 6.0% March 21 underpinned by a rapidly Flexigroup.
framework for that sector. 2019, which matured last month. expanding investor base,” said a Green, Social and Sustainable
Demand was such that the Two days earlier the Triple syndication manager involved in issuance from Australia,
A$400m 2.85% five-year note A rated IDB printed its first the transaction. including Aussie dollar deals
priced at 99.965 for a yield of Kangaroo bond under the The fourth biennial review and Australian credit bond
2.8575%, well inside 130bp– EYE programme, a social by the Global Sustainable sales offshore, reached A$8.4bn-
135bp guidance at asset swaps financing platform that aims to Investment Alliance released equivalent in 2018 from 11
plus 120bp. promote education, youth and on April 2 showed Australasia issuers in the state government,
The size of the bond was employment. has the world’s highest uptake banking, education, SSA and
limited only by the green assets The proceeds of the A$500m of responsible investing, with consumer lending sectors. „

Japan greets first 50-year bond suspected the bonds were

bought by life insurers, especially
foreign ones, who they think
„ Bonds Mitsubishi Estate pushes boundaries as yield curve flattens need to extend the duration of
their portfolios as yen rates have
BY TAKAHIRO OKAMOTO Coming in the wake of a 0.592% 50-year JGB yield (based shown no sign of going higher.
flattening in the Japanese on the 30-year yield of 0.518% “If you simply seek yield, all
Japanese property developer government yield curve, the and 40-year of 0.551%). you need to do is buy [much
MITSUBISHI ESTATE took the yen deal attracted investors looking That was a pleasant surprise shorter-dated] bail-in-able bonds
bond market into uncharted to extend the duration of their for the issuer, as the yield came or subordinated bonds issued
territory last week with the portfolios and allowed the below that of two of the three by banks,” said a bond investor
first 50-year senior bond. issuer to lock in cheap funding 40-year bonds Mitsubishi Estate at a major domestic insurance
Mitsubishi Estate, rated A2/ for longer. issued in 2016, 2017 and 2018. company. “So, yield hunt is
A+/AA– (Moody’s/S&P/R&I), sold Since 50-year JGBs do not Demand also exceeded probably not the reason.”
¥15bn (US$134m) of 50-year exist, market participants were expectations. The inital target, The spread between 30 and
bonds on Friday, tapping into keen to see how the bonds when Mitsubishi Estate started 40-year JGB yields has been
growing demand for duration would price. While there are sounding out investors at mid- tightening since the beginning
in low-rate Japan. many complicated ways to 50bp on April 8, was around of the year and has even
The ultra-long maturity breaks extrapolate the yield curve, a ¥10bn. The size was raised to accelerated since early April.
new ground in the yen market, banker on the deal explained ¥11bn when marketing started On a simple yield basis, the
where even the government has that arrangers had simply used at 54bp–55bp on April 10, and spread had narrowed to a mere
yet to go beyond a 40-year tenor. the compound yields on the the books ultimately slightly 0.5bp as of Friday.
Only hybrid securities have current 30 and 40-year JGBs to exceeded ¥15bn. Nomura was the bookrunner
priced with longer maturities, estimate the 50-year level. The banker on the deal on the deal, underwriting
but the shorter call dates and The bonds priced at a declined to disclose which types ¥13bn, with SMBC Nikko and
subordinated structures are not compound yield of 1.132%, of investors, or how many, had Mitsubishi UFJ Morgan Stanley
directly comparable. or 54bp over a hypothetical participated. Three sources taking ¥1bn each. „

International Financing Review Asia April 13 2019 5

Japan's postman rings thrice
„ Equities Up to US$12bn stake on offer in last of three mega-sales

BY CANDY CHAN JP Holdings shares dropped The sell-down is expected to follow-on share offering in JP
to an all-time low of ¥1,200 be similar to the 2017 follow-on Holdings.
The Japanese government last Wednesday in reaction led by Daiwa, Goldman Sachs Ultimately, the state plans to
has set the ball rolling on its to the potential sale. Despite and Nomura. raise a total of US$35bn from
third and final mammoth sell- rebounding to ¥1,248 a day “It would be a big event. the sell-down of its stake in the
down in the country’s postal later, the stock is still well There will likely be oversupply holding company to one-third,
and financial giant JAPAN POST below the 2015 IPO price of of stocks in the market when helping fund reconstruction
HOLDINGS in a deal which could ¥1,400 and the government’s the share sale comes,” said for areas damaged in the 2011
be worth around US$12bn. latest sell-down price of ¥1,322 another banker. tsunami.
The Finance Ministry last in 2017. “As the process moves
Tuesday invited banks to bid for A sell-down at the current forward and with more INSURANCE BOOKBUILD
a role in the share sale, which prices will not please investors certainty on the timeline, Separately, JP Holdings itself
is expected to hit the market as who bought into the company (other) issuers will have a is on track to raise around
early as this autumn. at IPO and in the 2017 better idea not to launch their ¥331bn (US$2.9bn) from part of
The sell-down will be the follow-on, but bankers believe deals neck and neck with the its stake in JAPAN POST INSURANCE
government’s last disposal in this will not discourage the government’s,” the banker said. through a secondary follow-on
JP Holdings. Since it is required government from proceeding The first ECM banker, offering, after retail and
by law to hold at least a one- with the sale. however, does not expect the institutional books were fully
third stake, there is a high “Banks will have to present JP Holdings sell-down to distort covered last week.
chance that it will look to cut the best size, method and the market as issuers generally The international portion, at
its stake from the current 56.9% timing to launch the deal,” said are cash-rich and the pipeline 30% of the total deal size, was
to 33.3%. one ECM banker. for capital raisings this year is covered early last week, and
Based on JP Holdings’ market Banks have until April light. the 67% domestic retail tranche
capitalisation of ¥5.61trn 19 to apply, and a round of The government took in filled ahead of Friday’s close.
(US$50.5bn) as of last Thursday, interviews will take place US$12bn from a three-pronged The 3% for Japanese insitutions
selling a 23.6% stake will be by May 8. The MoF plans to listing of JP Holdings and its was also covered.Bookbuilding
worth around US$12bn. At that select four bookrunners for subsidiaries Japan Post Bank finished last Friday. Pricing
size, the deal is likely to be the the domestic tranche and and Japan Post Insurance in will be between April 15-17 at
largest equity offering in Asia two bookrunners for the November 2015. It then raised a 2%-4% discount to the share
Pacific this year. international tranche. US$11.5bn in 2017 from a price on the day.

6 International Financing Review Asia April 13 2019

For daily news stories

Shares in JP Insurance
fell 1.1% during the four-day
bookbuild, underperforming
SocGen bags Singapore savings
a 0.5% gain in the benchmark „ Bonds Competitive funding lures more European banks to local AT1 market
Nikkei 225 Index, but are still
up 6.3% since it announced the BY KIT YIN BOEY 5.875% in November, obtained leaving 11% for fund managers
offering on April 4 – mainly similar benefits. and 8% for banks and corporate
because of a ¥100bn buyback. SOCIETE GENERALE sold its first Banks said market technicals investors. Singapore accounted
The sale is attractive to bank capital deal of the year have improved in Singapore for 85% of the deal, with others
investors because of the to a rousing reception in since UBS visited at the end of taking 15%.
company’s strong brand, Singapore, burnishing the last year. Bank hybrids have Demand was less impressive
nationwide franchise and range island state’s reputation as the all rallied strongly since they in Australia two days later
of insurance products, according go-to place for global banks were sold in the second half of when SocGen immediately
to a person close to the deal. looking to sell subordinated last year. UBS’s 5.875% notes
“It is a trusted brand paper. have tightened to 5%, while
especially for the older The French bank, rated A1/ HSBC’s 5% AT1 notes, sold in
population,” said the person. A/A, raised S$750m (US$554m) September, have firmed to 4%.
“Singapore is the
Based on the closing price from its first Additional Tier 1 “Singapore is the market market for AT1 bonds
on April 10, JP Insurance was offering in Singapore dollars, for AT1 bonds at the moment, at the moment,
valued at an Price/EV of 0.37x, pricing a perpetual non-call five more than the US dollar market more than the US
according to the person. Peers at par to yield 6.125%. where spreads are wider,” said dollar market where
Dai-ichi Life, Sony Financial and The choice of Singapore one lead on the deal.
spreads are wider.
T&D traded at 0.3x, 0.46x and dollars saved the issuer 50bp– “The arbitrage is a big
0.28x respectively. 70bp in funding costs compared advantage for European banks
The arbitrage is a
The base deal is an offer to a US dollar deal, according to at the moment… It is not for big advantage for
of up to 130.8m secondary the lead managers. all European banks, but for European banks at the
shares, and there is a 15% Uncertainties over whether those in need of capitalisation moment ‘… It is not for
overallotment option of up to the European Union would or replacement of capital, it all European banks,
19.6m shares. That is around agree to extend the UK’s is an opportunity to obtain
30m down on the original exit beyond April 12 had no competitive funding here.”
but for those in need
announcement on April 4, after impact on bookbuilding last Another lead manager of capitalisation or
JP Holdings sold some of its Tuesday, showing how little the agreed, adding that there has replacement of capital,
shares in the buyback, but still been an increase in discussions it is an opportunity
a massive 696 days’ trading, with European banks on AT1 to obtain competitive
based on average volumes bond offerings, “and we hope
funding here.”
since the start of the year. The to get more off the ground”.
original terms proposed the
SocGen’s significant A major appeal for investors
sale of up to 161m shares with saving, thanks to a is the 6.125% coupon, the
an overallotment option of up yield-hungry investor highest ever on an AT1 issue in followed its Singapore deal
to 24m shares. community amenable Singapore, though SocGen has with a A$300m 15-year non-
The sale is expected to cut to highly structured little reason to be disappointed call 10 Tier 2 that priced flat
the stake held by parent JP as the references used showed to guidance at 4.5%. The deal
Holdings to about 66% from
bonds, continues a the pricing was inside its pulled in A$390m of orders at
89% before the announcement. theme that has been existing curve. final terms.
JP Insurance said the deal running through UBS’s 5.875% AT1 bonds SocGen’s first Singapore
would advance the privatisation the Singapore bond callable 2023 were used as AT1 is its second bank capital
of Japan’s postal services and market since last year. the main reference. The notes deal in Singapore, following a
lift liquidity in the group’s were quoted at 5% on Monday, S$425m 10NC5 Tier 2 at 4.3% in
shares. which was 80bp–90bp inside May 2016.
Both JP Holdings and JP its US dollar curve. SocGen’s The deeply subordinated
Insurance are subject to a 180- outstanding US dollar AT1 AT1 bond, expected to be rated
day lock-up. Brexit issue mattered to local notes callable 2023 were at Ba2/BB+ by Moody’s/S&P, will
Daiwa, JP Morgan and investors. The EU eventually 7.31%, so the same 80bp–90bp have a 5.125% CET1 temporary
Mitsubishi UFJ Morgan Stanley are granted an extension to end- differential would imply a yield write-down trigger. The coupon
the joint global coordinators on October early on Thursday. of 6.25% in Singapore dollars will reset in year five to the
the deal, and also international SocGen’s significant saving, for a shorter 2023 call date. prevailing Singapore dollar SOR
joint bookrunners and lead thanks to a yield-hungry Investors piled more than plus the initial credit spread of
managers with Bank of America investor community amenable S$1.7bn into the book at initial 420.7bp. There is no step-up.
Merrill Lynch. to highly structured bonds, guidance of 6.5% area, and few Settlement is on April 16.
Daiwa, JP Morgan, Mitsubishi continues a theme that has dropped out after the leads SocGen was global coordinator
UFJ Morgan Stanley, Mizuho, been running through the pulled guidance 37.5bp tighter. and sole structuring adviser as
Monex, Nomura, SBI and SMBC Singapore bond market since Final orders were over S$1.55bn well as joint bookrunner with
Nikko are on the domestic last year. UBS, which sold from more than 61 accounts. DBS, Standard Chartered Bank and
tranche. „ S$700m of perpNC5 notes at Private banks bought 81%, UOB. „

International Financing Review Asia April 13 2019 7

MAP re-activates Indonesian ECM
„ Equities Share sale boosts liquidity while Malaysian deals struggle

BY S ANURADHA May, when a falling currency “The bankers wanted to push open in late April.
and stock market drove away investors higher on the range Citigroup, Credit Suisse,
MAP AKTIF ADIPERKASA (MAP investors. Things are beginning but they [investors] backed Maybank and RHB are global
Active) wrapped up a Rp4.2trn to look up, however, with away,” a banker away from the coordinators, and bookrunners
(US$298m) re-IPO in Indonesia the Jakarta Stock Exchange deal said. with Affin Hwang, AmInvestment
last week, reviving major share Composite Index up 3.8% year The final price translates to Bank, CIMB and CLSA.
sales in the country at a time a 2019 P/E of 20.2x. Regional Meanwhile, poultry breeder
when other floats in South-East speciality retailers trade in the LEONG HUP INTERNATIONAL is
Asia are facing challenges. high 20s and low 30s. banking on cornerstone
Montage, a subsidiary of investors to bankroll a
funds advised by CVC Asia LOWER VALUATIONS downsized US$250m Malaysian
“The backing of CVC,
Pacific, sold 648.5m shares, IPO investors are becoming IPO it is marketing at a 2019 P/E
representing 22.8% of the sports
a presence in the right more price-sensitive in South- multiple of 20.
goods retailer’s capital, at the sector and the positive East Asia, as QSR BRANDS, another The company is likely to sell
bottom of a Rp6,500–Rp7,750 economic outlook for CVC-backed issuer, found out. almost the entire institutional
range. Before the sale, CVC Indonesia have worked The Malaysia-based KFC and tranche, excluding the portion
owned 29.5% of the company. in [MAP Active’s] Pizza Hut franchisee decided to reserved for investors approved
“The backing of CVC, a defer its IPO of up to US$500m, by the Ministry of International
presence in the right sector and
favour.” even though the deal was only Trade and Industry Malaysia, to
the positive economic outlook at the pre-marketing stage, cornerstone investors.
for Indonesia have worked in when investors indicated they “A cornerstone tranche of
its favour,” a banker on the deal were not comfortable with the more than 50% is not a good
said. valuation. The company was sign. It just shows lack of
A reasonable valuation also to date and the rupiah up 6.9% targeting a 2019 P/E multiple confidence in building the
helped attract investors given from its October lows. of 25 but investors were only book,” a Hong Kong-based ECM
the lack of ECM activity in Banks had visibility on the interested below 20, especially banker said.
Indonesia and the impending book at launch with demand after QSR’s recent weak first- Pre-marketing is currently
April 17 elections. There have coming firmly at the lower end quarter earnings. under way and books are
been no major IPOs since last of the range. Books were scheduled to scheduled to open in the third

NBFCs target dollar funding “It is a perfect time for any

company to borrow from the
dollar bond market,” said a credit
„ Bonds Shadow banks look at offshore markets as domestic credit squeeze continues analyst from a foreign bank.
“The market is hot right now.”
BY KRISHNA MERCHANT benchmark 144A/Reg S senior start with smaller sizes like Some market participants
secured dollar bond. US$100m–$200m as they want are cautious about lower-rated
India’s non-banking financial BAJAJ FINANCE, HERO FINCORP, a degree of certainty that the NBFCs, however, with Shriram
companies are lining up US PIRAMAL CAPITAL AND HOUSING deal will go through.” Transport’s swift return raising
dollar bond issues to take FINANCE and MAHINDRA AND Sahai expects a sustained questions. “Investors would
advantage of tight spreads in MAHINDRA FINANCIAL SERVICESare all pipeline because of low interest rather see companies establish
the offshore market and falling understood to have had talks rates offshore, decent appetite themselves in the capital
hedging costs, as domestic with banks ahead of potential among global investors seeking markets gradually,” said a
funding remains tight. dollar debuts, according to returns in emerging markets, second credit analyst.
The queue of potential deals DCM bankers. low rupee hedging costs and Some fund managers feel
will test foreign demand for “All non-banking financial expectations the rupee may the pricing of recent high-yield
the sector in the wake of last companies are trying to access appreciate further. issues has not reflected the
year’s default at Infrastructure the dollar debt market,” said Hedging costs for Indian underlying credit risk.
Leasing & Financial Services, Shantanu Sahai, head of debt companies have dropped by “Shriram’s bonds are
and bankers said that smaller finance and DCM for India at 60bp–70bp after the Reserve currently trading at expensive
NBFCs may struggle to get any Nomura. Bank of India announced on levels to what we would deem
deals done. “In the pecking order, NBFCs March 16 that it would conduct as fair value,” said Dhiraj Bajaj,
SHRIRAM TRANSPORT FINANCE, of large business groups will long-term forex swaps to head of Asia credit at Lombard
which priced a US$400m three- be able to raise funds from increase liquidity. The RBI will Odier. “Most of the similar Asian
year debut in February, started offshore dollar bonds/loans hold a second US$5bn forex high-yield credits, especially
meeting investors in New first, followed by private equity- swap auction on April 23 after from Indonesia and China, are
York, Boston and Los Angeles owned NBFCs,” he said. “The it completed the first one on trading at around 7% levels.”
last week to return with a second phase of NBFCs might March 26. Shriram Transport’s 2022

8 International Financing Review Asia April 13 2019

For daily news stories

week of April.
The company was originally
looking at an IPO of up to
institutions and local investors,
participated in the transaction
with the top 15 accounts
Evergrande sails
US$600m, but poor stock
market conditions in Asia have
allocated around 80% of the
deal. The majority of the
through HY crowd
led to lower valuations. investors were foreigners. „ Bonds Latest high-yield benchmark takes 2019 proceeds to
Credit Suisse, Maybank and RHB The company floated in US$5.6bn
are joint global coordinators Jakarta in July 2018, selling a
and bookrunners with AmInvest, 15% stake in an all-primary deal BY FRANCES YOON, CAROL CHAN those in Europe, place chunky
DBS, Hong Leong, HSBC and OCBC. to raise Rp898bn at Rp2,100 a orders even with the competing
share. CVC did not sell shares at CHINA EVERGRANDE GROUP raised a supply. Friends and family
PIPELINE BUILDING the time, prefering to hold out further US$2bn in a crowded appetite was also said to have
In Indonesia, the IPO pipeline for better market conditions. high-yield bond market last come via private bank orders.
is slowly building. State- As well as providing an exit Monday, highlighting the depth Order books were said to have
owned port terminal operator route at more than three times of demand for big, liquid deals at peaked at US$3bn.
PELABUHAN TANJONG PRIOK is the IPO price, the secondary near double-digit yields. “Sunac was also in the market.
planning to launch a US$100m– offering will improve liquidity The B1/B+ (Moody’s/S&P) rated With both issues offering some
$200m IPO to the third quarter. in the stock. developer priced a US$1.25bn new issue premium, Evergrande
The company had originally MAP Active is a unit of 9.5% three-year, a US$450m decided to go straight with final
planned the issue for April but Jakarta-listed Mitra Adiperkasa, 10.0% four-year non-call two and guidance and enough premium
wants the general elections to which runs the Topshop, Marks a US$300m 10.5% five-year non- to attract investors,” said another
be over before launching. & Spencer, Sogo and Seibu call three, all at par. banker on the deal. Sunac China
Copper and gold miner department stores in Indonesia. The bonds, which priced in sold US$750m of 4.5-year non-
AMMAN MINERAL NUSA TENGGARA is It has over 850 shops in line with final guidance, held call 2.5 bonds on Monday.
planning a US$500m–$600m Indonesia selling sports above reoffer in secondary Evergrande’s orders from
IPO later this year or next year. and children’s goods. The trading, even as the market bookrunners, including interest
Healthcare company SOHO GLOBAL company sells over 50 local digested a deluge of primary from friends and family, were
and JAKARTA EYE CENTRE are also and international brands such deals, including Saudi Aramco’s around US$1bn, the second
planning IPOs this year but the as Adidas, Converse, Levi’s, US$12bn offering. banker said. He also stressed
offer sizes have not yet been Hasbro, Reebok and Timex. The three tranches were bid at that Evergrande Chairman Hui
disclosed. Deutsche Bank and UBS were 100.125, 100.513 and 101.275 on Ka Yan did not buy the bonds
For MAP Active, around the joint global coordinators and Tradeweb on Thursday, with the this time, unlike an offering in
50 accounts, comprising bookrunners with Credit Suisse smallest tranche outperforming. October last year in which he
international long-only and Indo Premier Securities. „ That was a marked contrast supported more than half the
to the poor early performance deal.
of Evergrande’s new issues in The banker said that of the
dollar notes were trading at portfolios, said Karthik 2018, when it drew criticism for three tranches, the five-year non-
a cash price of 100.5 to yield Srinivasan, group head of pricing deals that were too big call three tranche was the most
5.51% last Thursday, according financial sector ratings at Icra. for the weaker market to absorb. generous, with an estimated
to Refinitiv data. The three-year The shift to the dollar A banker on the deal said that 50bp–60bp of new issue
notes were issued at par to market, however, comes with the announcement of a capped premium.
yield 5.7% in February. risks attached. US$2bn deal size and the early As in Evergrande’s previous
Analysts at DBS and Emkay “With tighter onshore and release of final guidance added deals, however, the company’s
expect Shriram Transport commercial paper markets for an extra touch of transparency outstanding bonds had sold off
Finance to deliver growth of the sector, these companies to the deal, catering to investor heavily as rumours of a deal hit
10%–12% over the medium to are keen to have longer debt feedback that asked for more the market. The 8.25% March
long term, much slower than maturity profiles and new clarity on deal sizes. 2022s – a higly liquid US$2bn
what it used to be, according to lenders,” said Bajaj. Evergrande is one of China’s benchmark maturing just three
an April 9 research note. “If the dollar funding route most frequent offshore issuers, weeks ahead of the new 9.5%
shuts for NBFCs because of and has now raised US$5.6bn notes – had been quoted at
ONSHORE SQUEEZE a sell-off in the high-yield from overseas investors since the 7.92% on March 22, and were bid
NBFCs are still facing higher market, first-time issuers may beginning of the year. around 9.1% when the new issue
funding costs in the domestic find it difficult to refinance “People realise that this is the finally emerged.
market. Local AAA rated because they do not have behemoth of China property, The new Reg S notes have
NBFCs pay around 121bp diversified funding sources.” and they cannot be ignored,” expected ratings of B2/B
over government securities, At the same time, some said the banker. “Their bonds (Moody’s/S&P).
compared with 80bp before NBFCs are still tapping the are so liquid, and it’s really a Credit Suisse, Bank of China,
IL&FS defaulted, according domestic market, with SREI case of investing in Evergrande CEB International, Haitong
to Jefferies. Domestic banks INFRASTRUCTURE FINANCE, MUTHOOT as a proxy to China property, as International and UBS were joint
are already heavily exposed HOMEFIN INDIA, L&T FINANCE, SHRIRAM opposed to looking at it as an global coordinators, joint lead
to the sector, which accounts CITY UNION FINANCE and MAGMA individual risk play.” managers and joint bookrunners.
for around 7%-8% of their total FINCORP lining up public bond The banker said he was Bank of America Merrill Lynch
loan books, and are already issues totalling Rs30.50bn surprised to see international was added to this list after the
huge buyers of their securitised (US$440m). „ institutional investors, including marketing of the bonds began. „

International Financing Review Asia April 13 2019 9

Mongolian Mining lifts burden
„ Bonds Coal miner takes out restrictive covenants, lengthens maturity

BY DANIEL STANTON US$600m of offshore bonds, The final yield meant that US$430m. Holders of around
in 2016. The following year it MMC’s new five-year non-call 50% of the old bonds chose to
MONGOLIAN MINING CORP has turned came to an agreement with three issue priced inside the roll into the new issue.
the page on its 2017 debt creditors, which included secondary yield of 9.3% for “It was a fantastic result,”
restructuring with a new issue issuing dollar-denominated like-rated Mongolian Mortgage said Florian Schmidt, founder
and bond tender that lifted senior secured bonds and Corp’s three-year bonds sold in of Frontier Strategies, which
onerous covenants and freed perpetual securities. March. It then jumped a point advised MMC. “The objectives
up cashflow. Since then, a recovery in the in secondary trading. of the company were achieved,
After pricing a US$440m the price of coking coal and terming out their debt into
unsecured new issue on April rebound in MMC’s secured SWITCH AND SAVE a new five-year maturity and
3, MMC wrapped up a tender bonds left it in a position to The new issue funded a tender releasing the hard collateral
issue last week that will take return to the offshore bond offer for MMC’s US$412.5m they had posted for the
out almost all of its senior market and take out debt with senior secured bonds due 2022 restructured notes, relaxing
secured bonds. restrictive covenants. and US$195m perpetual bonds. ultra-tight covenants and
The response beat the MMC priced US$440m of At the same time, MMC ran a effectively eliminating the cash
issuer’s expectations, allowing five-year non-call three senior consent solicitation to amend sweep.
it to take advantage of surging unsecured bonds at par to the senior notes, eliminating “Investors got paid a fair
demand for high-yield debt to yield 9.25%, via bookrunners some covenants, restrictive net present value of the
give it more flexibility. JP Morgan and Morgan Stanley, provisions and events of cash sweep premium, and in
“We considered a bond which also managed the default. addition they get assurance of
exchange in the beginning, tender. MMC accepted around a cash coupon, instead of a PIK
driven by factors including Price guidance started at US$397.8m in principal toggle linked to the coal price.”
market conditions, since the 9.5% area, before tightening amount of senior secured
market was quite choppy at to 9.375% area on the way bonds under the tender offer, CASH SWEEP
that time and we thought a to a final order book of over equal to 96.46%, and US$23.9m Price discovery for the tender
new issue might be difficult,” US$740m. of perps, it said on Tuesday. It was a complex process because
said Ulemj Baskhuu, chief The 144A/Reg S notes have will pay US$1,050 per US$1,000 the senior secured bonds came
financial officer at Mongolian expected ratings of B–/B (S&P/ of senior bonds and US$510 with contingent value rights
Mining Corp. Fitch) and will be issued by per US$1,000 of perps, so the and could be repaid by a cash
The coking coal miner MMC and its wholly owned total cash outlay, including sweep mechanism depending
defaulted on its debt, including subsidiary Energy Resources. accrued interest, is a little over on the company’s performance

Indian Samurai market fizzles Reliance Industries, which is

currently testing the market
with a US$2.25bn deal.
„ Loans Long-term loans find few takers after recent Japanese borrowing spree The deal includes tranches
totaling ¥55.5bn and pays
BY CHIEN MI WONG, WAKAKO SATO Tokyo-based senior banker said. Indian country limits. all-in pricing of 88.5bp and
NTPC, India’s largest power “We are asking regional 91.5bp based on interest
Indian companies are utility, started the rush for banks to expand their country margins of 72.5bp and
finding it harder to raise yen- Samurai loans in late 2017, but limits for India but it is not so 75.5bp over yen Libor, with
denominated Samurai loans as its second visit in early April easy,” the Tokyo-based senior average lives of 5.25 and 5.5
Japanese lenders show signs of was tougher. Only Aozora Bank banker said. years respectively. (See India
fatigue after a borrowing spree joined its US$300m-equivalent As a result, POWER FINANCE CORP Syndicated loans.)
targeting Japan’s low borrowing 10-year Samurai loan in general and INDIAN RAILWAY FINANCE CORP “There is some sense of
rates and abundant bank syndication. have postponed syndication fatigue,” a Singapore-based
liquidity. In March, state-owned POWER of loans totalling US$450m loans banker said. “We will
Top firms from the sub- GRID CORP OF INDIA also drew a indefinitely. have to time the launch of
Continent have raised weak response to its debut Japan’s four megabanks future transactions properly to
US$2.65bn of Samurai loans ¥22bn (US$201m) 12-year term prefunded a five-year US$150m- ensure we will be able to draw
in the last 18 months, mostly loan, the longest maturity seen equivalent Samurai loan for liquidity and close a successful
at maturities of seven years on a Samurai loan to date. Only Power Finance Corp and a deal.”
or more, to reduce borrowing Aozora and Bank of Yokohama US$300m-equivalent seven-
costs and extend maturities, committed to the deal in year deal for IRFC, but general LONG TENORS LANGUISH
but appetite for the deals is general syndication. syndication is now on hold. Japanese lenders continue to
waning. Both deals point to a The next test of demand is seek overseas assets in search
“Everyone has had enough slowdown in Samurai loans as likely to come from privately- of higher returns, but tightly-
of Indian Samurai deals,” said a Japanese lenders struggle with owned Indian conglomerate priced loans with long 10-year

10 International Financing Review Asia April 13 2019

For daily news stories

– a component that was hard

to value because investors had
to calculate the probability
have ground to a halt.
That concentration was also
one of the reasons for doing
BOC back with
of it paying out over the
remaining life of the bonds.
the tender, which gave existing
bondholders an opportunity to
biggest BRI bond
Nomura’s sales and trading exit if they wanted. „ Bonds Fifth Silk Road deal bolsters confidence in China’s
desk wrote that since MMC “By doing this exercise, we infrastructure initiative
had generated free cashflow also wanted diversification,”
in 2018 and was growing its said MMC’s Baskhuu. “We BY CAROL CHAN, FRANCES YOON US$3.55bn-equivalent in US
cash balance, it expected the appreciate our investors, but dollars, euros, Singapore dollars
company to start paying the the restructured bonds have BANK OF CHINA signalled ongoing and offshore renminbi, and
cash sweep premium from this been very illiquid and some support for China’s Belt and followed up with multi-currency
year. investors complained they Road Initiative on Wednesday deals in April 2017 and April
The issuer initially offered couldn’t get hold of the bonds.” with its fifth ‘Silk Road bond’, 2018, as well as a US dollar issue
to pay US$1,010 per US$1,000 The handful of outstanding raising US$3.8bn-equivalent in May 2017.
in principal amount for the 2022s will still be eligible for across five currencies and eight BOC’s Hong Kong branch sold
senior bonds, including a the cash sweep. tranches. a US$550m 3.125% five-year
US$50 early bird premium, but There is a benefit to having State-owned BOC, rated and US$300m 3.625% 10-year at
raised the offer after hearing some of the senior secured A1/A/A, sold Reg S senior bonds Treasuries plus 88bp and 120bp,
bondholders’ feedback. On bonds outstanding: if all of in US dollars, euros, Australian respectively, well inside initial
March 25, MMC announced them had been taken out, the dollars, offshore renminbi and guidance of 120bp area and
that holders of US$303.176m, coupon on the perps would Hong Kong dollars through five 160bp area.
or 73.5%, of the senior bonds have stepped up to 10%, from branches, ranging from Sydney The 10-year dollar tranche
had agreed to participate zero at present. to Luxembourg. priced at the tightest spread
in the tender, after raising The outcome of the new The deal is the largest for a 10-year Reg S deal from
the offer price by US$40 per issue and bond tender leaves multi-currency offering from a Chinese bank, according to
US$1,000. MMC able to build up its cash a financial institution in Asia a second banker. The 40bp
It was not possible to speak reserves. Pacific so far this year, and the tightening from initial guidance
to major bondholders about “We don’t have any major biggest international bond from relected the small issue size,
the tender terms before the capex investment required, any bank in Asia ex-Japan. It is with final orders more than
announcement, as that would we don’t have major payment also the biggest offshore senior six times the final print. The
have meant wall-crossing them obligations and loans that need deal on record from a Chinese tranche was also the first
and preventing them from to be refinanced, so we are commercial bank. 10-year note offering from a
trading the bonds. As three or comfortable and don’t expect to “Launching eight tranches Chinese commercial bank since
four investors held the majority raise funds in the near future,” in five currencies and March 2018.
of the bonds, trading would said Baskh. „ coordinating with five branches The Hong Kong branch also
simultaneously was challenging. sold HK$6bn (US$765m) of 2.45%
We’ve worked from around two-year notes at par, 25bp
plus tenors are losing their level pricing of 114.5bp based 6am yesterday until around 4am inside initial guidance of 2.70%
appeal. on a margin of 102bp and this morning. But overall the area. This is the largest Hong
“The 10-year tenor is too weighted average remaining deal went through smoothly Kong dollar deal from a Chinese
long and pricing is no longer life of 10 years. and the robust order book also commercial bank.
attractive,” a banker at a The company’s ¥39.42bn showed the strong support from BOC also through
Japanese regional bank said. (then US$370m) 10-year investors,” said a banker on the Luxembourg branch sold
India’s state owned Samurai loan of April 2018 deal. US$500m three-year floating-
companies have previously had the longest The response to BOC’s fifth rate note at three-month Libor
enthusiastically embraced long- tenor, and attracted eight banks Silk Road bond comes as a vote plus 72bp and the Frankfurt
term fundraising in Japan’s in general syndication. of confidence in China’s massive branch sold €500m (US$564m)
cheap and highly liquid loan The strong response to that infrastructure initiative. 0.25% three-year senior note at
market. Tightening cross- loan contrasts with the weak Demand for the deal was mid-swaps plus 48bp.
currency swaps and pent-up response to NTPC’s current also helped by the thin supply The Sydney branch issued
demand for higher-yielding loan, despite a 10bp uplift in of senior bonds from Chinese A$600m (US$430m) of 3.5-year
assets also opened a window for pricing. banks this year, robust market floating-rate notes at three-
international borrowers to save The yen-denominated loan conditions and BOC’s sound month BBSW plus 100bp.
on their funding costs. had the minimum 10-year credit profile, which allowed the The Macau branch issued
Power Grid’s 12-year loan is tenor required to raise funds bank to price all the tranches Rmb2.5bn (US$372m) 3.10%
the longest unsecured Samurai via offshore debt in compliance inside its secondary curve. (See one-year and Rmb2bn 3.30%
loan for an Indian company. with the Reserve Bank of China Debt capital markets.) three-year offshore renminbi
The deal offered top-level all-in India’s external commercial BOC claims to have extended notes.
pricing of 110.8bp based on an borrowing rules at the time. over US$130bn of credit to BRI The bonds, to be issued
interest margin of 98bp over The RBI lowered its minimum countries and worked on over off the bank’s US$40bn MTN
yen Libor and an average life of maturity requirement for most 600 major projects from 2015 programme, all have expected
9.75 years. borrowers to five years in to 2018. It first issued Silk Road ratings of A1/A/A, on par with
NTPC’s latest deal pays top- December 2018. „ bonds in June 2015, raising BOC. „

International Financing Review Asia April 13 2019 11

& Markets

Citi loses Asia Pacific CEO

US bank’s president Jamie Forese also steps down

Who’s moving where...

„ JP MORGAN has Australia. „ Soon Jin Lim, head with responsibility
selected Takenori Yoneda previously of structuring for for hedge funds
Yoneda to head up worked at Sumitomo South-East Asia, India and institutional
corporate banking in Mitsui Banking and Australia in the investor sales, and
Japan after Takasuke Corporation. Asia Pacific financing Jinzi Huang, a vice
Sekine left the US He will take up his group at CREDIT SUISSE, president with
bank earlier this year. new role on June is leaving the bank. responsibility for loan
Yoneda has been 1 and reports to Lim’s departure is syndication, mainly
with JP Morgan since Oliver Brinkmann, the third in recent for Greater China,
2011, where he has Asia Pacific head of weeks from Credit resigned. Both were
focused on coverage corporate banking, Suisse’s APAC based in Hong Kong.
of Japanese corporate and Steve Rinoie, financing group. In A Credit Suisse
clients in South-East senior country officer mid-March, Juliet spokesperson
Asia, India, China and for Japan. Siette, a director declined to comment.

12 International Financing Review Asia April 13 2019

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“The circumstances that led BANKû)TûHASûHADûAûROCKYûRIDEûEVERûSINCEûITû
to lead today.”

Please contact us if you have information about job moves:

„ DEUTSCHE BANK has of global transaction „ Flavian Sim, a for corporate and
hired Jennifer Scott- banking for Asia former loans banker institutional banking.
Gray from Westpac Pacific. She is due to with BNP Paribas, Around a year ago,
Banking Corporation start in May. has joined NATIONAL Sim left BNP Paribas
to head up Scott-Gray was BANK OF KUWAIT after a 15-year
transaction banking previously global as vice president stint, where he was
in Australia. head of trade finance for corporate and managing director in
Based in Sydney, she sales as well as institutional banking. loan capital markets
will report to Anthony global head of trade Sim started work origination, with
Miller, Deutsche’s finance for Australia last week in responsibility for
Australia CEO, and at Westpac. She Singapore and Singapore, South
David Lynne, head previously worked at reports to Michael Korea, Vietnam and
of fixed income and Citigroup and BNY Lim, assistant other South-East
currencies and head Mellon. general manager Asian countries.

International Financing Review Asia April 13 2019 13

& Markets






RESTRICTIONSûONûTHEûNUMBERûANDûTYPEûOFû )NVESTMENTû-ANAGEMENTû û8INJIANGû capital position so it makes sense to start

14 International Financing Review Asia April 13 2019

Please send job moves to



CS names Carsten Stoehr ûWHOûWASûHEADûOFûTHEû

)Nû*APAN ûTamao SasadaûHASûBEENû



solutions head WILLûREMAINû'REATERû#HINAû#%/ûANDûWILLû


International Financing Review Asia April 13 2019 15

& Markets





IN BRIEF S&P raises sovereign rating one notch
Mitsubishi UFJ Financial Group progressing in its structural reform plans but
Global markets restructuring declined to comment further. S&P said on April 5 it had raised VIETNAM’s
The bank aims to redeploy staff elsewhere, sovereign credit rating to BB from BB–. It
MITSUBISHI UFJ FINANCIAL GROUP is considering avoiding a material reduction in headcount, the maintained its stable outlook.
scaling back its bond and equity sales and sources said. The US rating agency cited strong economic
trading operations in London and New York Under its mid-term plan announced last year, growth, improvements in the government’s
as part of a broader restructuring of its global MUFG has been focused on strengthening its institutional framework, growing foreign
markets division, Reuters reported citing two global markets business, which offers bonds, direct investment inflows and a manageable
sources. stocks, currencies and derivative sales and external debt burden as reasons for the
MUFG, Japan’s biggest bank by assets, will also trading to institutional and corporate clients. upgrade.
overhaul its Japanese equity business at home It has been working to bring the group, which S&P’s upgrade brings its issuer rating for
and overseas. falls under its core banking unit, under the same Vietnam in line with that of Fitch and one notch
MUFG has yet to finalise the plans, the sources management as its Mitsubishi UFJ Morgan higher than that of Moody’s.
said, declining to be identified because the Stanley Securities joint venture and build its Last August, Moody’s raised the Vietnam’s
information was not yet public. The size of global presence. sovereign credit rating to Ba3 from B1 with a
the likely reductions was not clear. It was also However, MUFG’s ambitions have been stymied stable outlook.
unclear how many people are employed in the by tough competition from US and European Last May, Fitch raised the country’s sovereign
affected divisions. banks and, particularly for bond trading, a rating to BB from BB–. The outlook is also
A representative for MUFG said the bank was difficult market after years of low interest rates. stable.

16 International Financing Review Asia April 13 2019

Australia 17 China 19 Hong Kong 30 India 33 Indonesia 36 Japan 37 Malaysia 38
New Zealand 38 Philippines 39 Singapore 40 South Korea 42 Taiwan 42 Thailand 43

five-year sale via Citigroup, HSBC, JP Morgan last Thursday via RBC Capital Markets and TD
and RBC Capital Markets. Securities.
AUSTRALIA Despite a glut of competing supply, Suncorp The 2.6% October 18 2029s priced at
attracted a sizeable US$1.2bn order book, 99.317 to yield 2.675%, equivalent to 62bp
which allowed the leads to move on from over semi-quarterly asset swaps and 80bp
DEBT CAPITAL MARKETS 120bp area initial price thoughts and price the over the November 2029 ACGB.
3.3% April 15 2024s at Treasuries plus 103bp. The deal was increased from a minimum
› AMP PRINTS UNDERWHELMING SWISSIE This represented a 5bp new issue size of A$65m.
concession over Suncorp’s 2.8% May 2022s
Troubled Australian financial AMP GROUP, and was around 15bp-20bp back of Aa3/ › SOCGEN TIER 2 NETS A$300M
rated A2/A– (Moody’s/S&P), returned to the AA–/AA– rated Australian major bank
Swiss market on April 3 with a SFr140m secondary levels. SOCIETE GENERALE (A1/A/A) raised A$300m
(US$140m) 0.8% 4.25-year senior unsecured It was also close to the high 90s area from a 15-year non-call 10 subordinated
bond issue via Credit Suisse and UBS. where a A1/AA–/AA– rated New Zealand Tier 2 note sale last Thursday off the bank’s
The leads were unable to move on major would currently come, according to EMTN programme.
from initial mid-swaps plus 125bp–130bp syndication desks. The subordinated note, which is expected
guidance before pricing at the tight end Suncorp previously visited the 144A to be rated Baa3/BBB/A–, pays a 4.5% coupon
of the range for a sizeable new issue market in November 2017 with a US$500m and priced at par, equivalent to a 10-year
concession of 15bp–20bp over AMP’s 0.75% 2.375% three-year note. This priced at mid-swaps spread of 245.4bp.
December 19 2022 bond. Treasuries plus 68bp, or around 18bp wide Societe Generale was global coordinator
AMP Group raised SFr110m from the of major Australian bank secondary levels. and joint bookrunner with ANZ, Nomura
original sale of December 2022s in June and TD Securities.
2018. This priced 85bp wide of mid-swaps › VW AUSTRALIA ENGINEERS A$500M DEAL
having met some pushback from Swiss
investors given the offering’s initial 65bp– VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA, rated STRUCTURED FINANCE
70bp soundings. A3/BBB+ (Moody’s/S&P), issued a chunky
The bond was subsequently tapped for A$500m four-year senior unsecured bond › LA TROBE SELLS EIGHTH RMBS
SFr50m in September last year, also with a last Wednesday arranged by joint lead
85bp mid-swaps margin. managers Mizuho and TD Securities. Non-bank lender LA TROBE FINANCIAL sold
Swiss investors were allotted all of the The 3.1% April 17 2023s priced at 99.935 its eighth non-conforming RMBS last
new bond with asset managers taking for a yield of 3.1175%, inside 160bp area Thursday, the A$750m (US$535m) LA TROBE
42.5%, private banks 30%, insurance guidance at asset swaps plus 155bp. FINANCIAL CAPITAL MARKETS TRUST 2019-1, whose
companies 11.8%, bank treasuries 9.7%, The regular issuer raised A$350m last size was increased from an indicative
pension funds 5.8% and corporates 0.2%. August from a sale of 3.5-year medium-term A$500m.
AMP has struggled to get domestic and notes having printed a A$400m three-year Macquarie was arranger and joint lead
offshore bond deals away as investor baulk note four months earlier. manager with CBA, HSBC, NAB, Natixis and
at the financial group’s prominent role in UOB.
Australia’s financial scandals. › GERMAN AGENCIES RAISE A$200M The A$135m Class A1S and A$90m Class
AMP Group finally got a US dollar deal A2S notes with 0.33 and 1.30-year WALs
over the line on March 7, but it had to pay Two triple A rated German government- were pre-placed at one-month BBSW plus
up for a modest-sized, short-dated single guaranteed agencies raised a combined 85bp and 185bp.
note rather than the dual-tranche offering A$200m from the Kangaroo market last The A$390m A1L and A$38.25m A2L
that was abruptly pulled eight days earlier. week, with both trades arranged by sole notes, with 2.72 and 3.98-year WALs priced
AMP sold a revived US$300m 2.5-year Reg lead Nomura. 142bp and 220bp wide of one-month BBSW.
S bond after a planned accompanying five- On Monday, RENTENBANK tapped its 3.25% The A$30.75m Class B, A$24.75m Class
year note was withdrawn when S&P cut the April 12 2028 bond for A$50m to increase C and A$17.25m Class D, all with 3.65-year
issuer’s rating from A to A– on March l, while the size of the line to A$955m. WALs, priced 245bp, 330bp and 425bp over
maintaining the credit’s negative outlook. The reopening priced at 107.296 to yield one-month BBSW.
AMP, a non-profit life insurer and mutual 2.346%, 41bp wide of asset swaps and The retained A$11.25m Class E and
society before it was demutualised in 1998, is 49.5bp over the May 2028 ACGB. A$6.75m Class F notes, with 2.83 and 4.02-
widely seen as the biggest casualty of the Royal Two days later KFW added A$150m to the year WALs, priced at one-month BBSW plus
Commission inquiry in terms of lost business, now A$1.7bn 4.0% February 2025 line. This 630bp and 800bp.
reputation and management fallout. priced at 110.591 for a yield of 2.0725%, The structure was completed by A$6m of
41bp and 47.75bp wide of asset swaps and equity notes.
› SUNCORP NAVIGATES BUSY MARKET the April 2025 ACGB. The Class A1 and A2 notes have 30%
and 12.9% credit support. The Class B to F
Leading non-major bank SUNCORP-METWAY › QUEBEC OPENS 10-YEAR LINE notes have 8.8%, 5.5%, 3.2%, 1.7% and 0.8%
(A1/A+/A+) returned to the US market for support, respectively.
the first time in 17 months last Monday The PROVINCE OF QUEBEC (Aa2/AA–/AA–) priced La Trobe issued its previous non-
with a well received US$500m 144A/Reg S an upsized A$100m 10-year Kangaroo bond conforming RMBS last November, a no-

International Financing Review Asia April 13 2019 17

grow A$750m offering through La Trobe A$5.5m Class C and A$2.25m Class D notes, with a capped A$750m-equivalent dual-
Financial Capital Markets Trust 2018-2. all with 4.4-year WALs, priced 215bp, 250bp, currency issue through PEPPER I-PRIME 2019-1.
The Class A1L notes of La Trobe’s new 310bp and 400bp wide of one-month BBSW NAB was arranger and joint lead
RMBS paid 2bp more than the A1L notes versus respective guidance in the 220bp, manager with CBA and Standard Chartered
sold five months ago while the new Class B, 250bp. low 300bp and 400bp areas. Bank for the Australian dollar tranches
C, D and E note spreads came 10bp, 20bp, Pricing was not disclosed for the A$1.25m and joint lead with Citigroup for the US
15bp and 15bp wider than their equivalent Class E notes, while the transaction was dollar note.
tranches. completed by A$1.5m of retained Class F The A$225m Class A1a and US$266.5m
notes. Class A1-ul notes with 2.6 and 1.0-year
› AFG UPSIZES PRIME ISSUE The non-bank lender previously accessed WALs priced at one-month BBSW plus
the market in June 2018 with a A$350m 135bp and three-month Libor plus 35bp,
AUSTRALIAN FINANCE GROUP issued its seventh AFG 2018-1 Trust prime RMBS issue. respectively.
prime RMBS offering on April 5, the The 2018-1 Trust Class A1, Class A2, Class The A$90m Class A2, A$18.5m Class B,
upsized A$500m AFG 2019-1 TRUST. AB, Class B, Class C and Class E notes priced A$15.5m Class C, A$10.5m Class D, A$7m
NAB was arranger and joint lead manager 70bp, 120bp, 175bp, 195bp, 290bp and Class E and A$4.5m Class F notes priced
with ANZ and UOB for the securitisation, 390bp wide of one-month BBSW or 13bp, 210bp, 235bp, 300bp, 400bp, 600bp and
which had an indicative size of A$350m. 8bp, 40bp, 55bp, 20bp and 10bp tighter 750bp wide of one-month BBSW.
The A$95m Class A1 and A$355m Class than the latest equivalent tranches. The A$4m Class G notes were retained.
A2 notes, with 0.4 and 3.1-year WALs, The A1 notes have 20% credit support
priced inside initial 85bp–95bp area and › PRIME PEPPER SELLS A$750M while the Class A2 to F notes have 8%,
130bp area guidance at one-month BBSW 5.53%, 3.47%, 2.07%, 1.13% and 0.53%
plus 83bp and 128bp. Non-bank mortgage lender PEPPER GROUP support, respectively.
The A$32.5m Class AB, A$7m Class B, returned to the RMBS market last Thursday The new Class A1a note priced 5bp wide

Aussie RMBS spree continues

„ Structured Finance Mortgage specialists step up funding despite house-price fall

Australian mortgage lenders continue to HOUSE PRICE PAIN sub tranches with La Trobe’s new Class
enjoy easy access to the securitisation market The latest spike in supply has met little B, C, D and E note spreads coming 10bp,
despite concerns over falling house prices pushback from investors, despite concerns that 20bp, 15bp and 20bp wider than its previous
and surging supply, with only junior RMBS non-banks are expanding their share of the offering at 245bp, 330bp, 425bp and 630bp,
tranches commanding higher spreads. mortgage market at a time when house prices respectively.
The lighter-regulated non-bank sector has have started to decline after years of gains. The new Pepper A2, B, C, D, E, F notes
dominated the Australian RMBS market in Prices are down 9.3% nationally from priced at 210bp, 235bp, 300bp, 400bp,
2019, in part because of slower credit growth the peak in 2017, according to Moody’s, and 600bp and 750bp over bank bills or 25bp,
among the country’s major banks in the wake the rating agency sees more pain ahead, 15bp, 25bp, 25bp, 25bp and 75bp more than
of the Royal Commission. especially in Sydney and Melbourne where it the equivalent spreads six months earlier.
So far this year five non-banks have raised now forecasts 9.3% and 11.4% falls in 2019
A$4.3bn (US$3.1bn) from seven prime compared to the 3.3% and 6% reductions ARREARS STAY LOW
and non-conforming RMBS, including two predicted in January. Analysts see little risk of further widening
A$750m offerings last week from PEPPER and “We have seen a flurry of pre-Easter issues unless falling house prices translate into a
LA TROBE. that have gone well with many oversubscribed surge of missed mortgage payments. So far,
Two more firms, LIBERTY and RESIMAC, are and upsized deals where senior notes often arrears remain stable and low in comparison
currently in the market with plans to raise priced inside guidance,” Samson said. to global peers with prime home-loan arrears
A$700m and A$730m, respectively. Senior notes remain supported by a of just 1.45% in January, according to S&P.
In stark contrast there has been only one reliable and sizeable bid from bank balance Arrears – and, ultimately, mortgage
bank issue in 2019 – Westpac’s jumbo A$3bn sheet managers looking for a Triple A rated, defaults – are expected to stay low in the
funding-only print – with nothing from repo-eligible asset that offers a bit of juice. absence of any spike in unemployment and/
regional or mutual banks that have access The state of the housing market, however, or rising interest rates, neither of which
to alternative sources of funding through has created more caution among real money seems likely.
deposits and senior and covered bond investors in subordinated RMBS tranches – The jobless rate has fallen to an eight-year
issuance. as last week’s deals illustrate. low of 4.9% while the next Reserve Bank of
“Securitisations are most non-banks’ The Class A1L notes within La Trobe’s Australia rate move is now predicted to be
primary funding tool which they have been non-conforming RMBS paid 142bp over one- downwards.
actively accessing following a slow start month BBSW, just 2bp more than the same “RMBS investors are well protected from a
to 2019 as Australian issuers adjusted tranche last November, while the Pepper loss perspective while most portfolios tend to
to meet new European regulations I-Prime 2019-1 Class A1a note priced at 130bp be well diversified across the country and not
introduced on January 1,” said Sarah or 5bp more than last October’s Pepper solely focused on Sydney and Melbourne,”
Samson, head of securitisation at National I-Prime 2018-2 sale. Samson said.
Australia Bank. There was more price movement in the JOHN WEAVERS

18 International Financing Review Asia April 13 2019


of last October’s Pepper I-Prime 2018-2 sale. Samson Oil & Gas first reported the EQUITY CAPITAL MARKETS
The new A2, B, C, D, E, F notes paid 25bp, breach on general and administrative
15bp, 25bp, 25bp, 25bp and 75bp more than covenants on the old loan in early 2017 › READYTECH TO RAISE A$50M FROM IPO
the equivalent spreads six months earlier. and managed to win an extension of its
maturity to October 2018 from October READYTECH, an Australian maker of
2017. Mutual of Omaha Bank did not take educational and payroll software, is set to
SYNDICATED LOANS any action against the borrower despite a raise A$50m (US$35.6m) from an ASX IPO
forbearance agreement between the two after downsizing the deal from an earlier
› PERSEUS SIGNS LOAN FOR GOLD MINE expiring on January 15 this year. proposal of up to A$98.5m.
At A$50m, the float will be the biggest
Australian gold miner PERSEUS MINING has › AMP CAPITAL TAPS CLUB FOR ANU BUY Australian IPO so far this year.
signed a term sheet for a US$150m loan The deal, which now comprises 11.3m
from three banks to fund its Yaoure Gold AMP CAPITAL is raising about A$600m new shares and 21.9m secondary shares,
Mine in West Africa, the company said last (US$426m) from a club of at least 10 banks is being marketed at A$1.51 a share. The
Monday. for its acquisition of the Australian National offer price translates to a 2019 forecast EV/
The US$150m revolving cash facility is University’s student accommodation Ebitda of 10.9 and a market capitalisation
from Macquarie Bank, Nedbank and Societe concession. of A$121m.
Generale. The loan has a tenor of seven years and The original terms were A$17m of
The interest on the loan will vary with offers 130bp–135bp over BBSY. primary shares and A$73m–$82m of
the company’s leverage and is initially set The 10 banks are ANZ, Agricultural Bank of secondary shares in an indicative price
at 425bp over Libor. China, Bank of China, Hana Bank, Industrial & range of A$1.90–$2.54 apiece.
The company declined to provide details Commercial Bank of China, ING Bank, KEB HANA ReadyTech’s owner, private equity firm
on the tenor of the loan. Bank, MUFG, National Australia Bank and Pemba Capital Partners, will keep a stake of
The estimated capital cost for developing Sumitomo Mitsui Banking Corp. about 43.2% after the IPO.
the gold mine is US$265m and will be AMP Capital said last week that two ReadyTech CEO Marc Washbourne will
funded from the loan, US$80m of cash and of its funds – AMP Capital Diversified cut his stake from 7.3% to 5% post IPO.
bullion on hand, additional contributions Infrastructure Trust and AMP Capital Trading in the shares will start on April
from future operational cash flows and up Core Infrastructure Fund – are buying 23.
to US$40m in proceeds from exercising of the ANU’s student accommodation ReadyTech operates four software-as-a-
warrants maturing on April 19. concession in a transaction valued at service platforms in areas such as predictive
The funding is subject to Perseus being over A$700m. analytics and behavioural science. It has
granted with the exploration permit from The deal includes a 34-year concession over 3,600 clients in the education and
the government of Cote d’Ivoire, which is for over 4,184 beds across 10 residences employment sectors, according to the
expected to be considered on Wednesday, on the ANU campus in Canberra. The company’s website.
and final board approval. concession was originally established Macquarie Capital and Wilsons Corporate
Besides the Yaoure Gold Project in in 2016 and includes existing long-term Finance are lead managers on the float.
central Cote d’Ivoire, Perseus has one other outsourced facilities and management
gold mine in operation – the Sissingue Gold arrangements, while the ANU retains
Project – and has licences for exploring responsibility for operations.
Mahale, Mbengue and Napie. AMP is buying the concession from
The company plans to begin full-scale equal owners Infratil and Commonwealth CHINA
development of the Yaoure Gold project in Superannuation Corp.
late April, and expects first gold production The deal is expected to be completed in
in December 2020. In January, it awarded mid-April. DEBT CAPITAL MARKETS
an engineering and supply contract to
Perseus had US$44.5m of existing debt
with Macquarie Bank as of March 31 2019. Building fixtures supplier GWA GROUP has 21VIANET GROUP last Tuesday priced US$300m
added A$25m to an existing three-year of 2.5-year senior unsecured bonds to fund
› SAMSON TAPS MORE EXPENSIVE REFI syndicated revolving credit facility to fund a tender offer, drawing orders of over
its acquisition of METHVEN, the company said US$1.4bn.
SAMSON OIL & GAS has raised US$33.5m last Wednesday. The new issue priced at 99.722 with a
through a much more expensive loan The expiry date of the original A$225m coupon of 7.875% to yield 8.000%, inside
to refinance an existing facility with a facility is October 2020. initial guidance of 8.5% area.
covenant breach since December 2016, the GWA paid A$112m to buy all of the Asian accounts bought 96% of the new
company said in a statement. shares in Methven. The acquisition Reg S bonds and European accounts 4%.
AEP I FINCO LLC, a unit of US-based was announced in December and was By investor type, asset managers and fund
middle-market lender Anvil Energy completed Wednesday. managers took 92%, banks 5%, private
Partners, is providing the five-year loan to Following the acquisition, GWA expects banks and corporates a combined 2%, and
Samson Oil & Gas. its net debt to Ebitda to be around 1.6x. insurers 1%.
The interest margin on the new loan As of December 31, Methven had drawn The Reg S benchmark bonds are
is 1,050bp over Libor, far higher than the NZ$30.8m (US$21m) from two loans from expected to be rated B1/B+/B+, in line with
600bp margin on the US$23.9m facility Bank of New Zealand for NZ$30m and £2.5m the issuer.
from Mutual of Omaha Bank that was (US$3.2m) respectively and maturing in July Credit Suisse and Barclays were joint
refinanced. 2021. global coordinators. They were also joint

International Financing Review Asia April 13 2019 19

BOC prints eight-tranche BRI bond
„ Bonds Five-currency offering draws strong demand across all tranches

BANK OF CHINA, rated A1/A/A, sold US$3.8bn- Final orders for the tranche passed initial 104bp area guidance. BOC, Citigroup,
equivalent of Reg S senior bonds in US HK$9.3bn from 48 buyers. Asia took 99% of ANZ, Commonwealth Bank of Australia and
dollars, euros, Australian dollars, offshore the notes and offshore US 1%. By investor Macquarie Bank were joint lead managers
renminbi and Hong Kong dollars through five type, 63% went to banks, 25% to central and joint bookrunners.
branches last week to support projects under banks, 11% to funds and insurance, and 1% to Final books were over A$1bn from 49
China’s Belt and Road Initiative. ( See News.) private banks. investors. Australia took 78% of the notes
The lender’s Hong Kong branch sold a BOC, Citigroup, Bank of Communications, and Asia 22%. By investor type, 90% were
US$550m 3.125% five-year and US$300m Commonwealth Bank of Australia, ICBC, bank balance sheets, 5% middle market and
3.625% 10-year at Treasuries plus 88bp Nomura and Wells Fargo Securities were joint private banks, 3% asset managers, and 2%
and 120bp, respectively, well inside initial lead managers and joint bookrunners. trading and hedge funds.
guidance of 120bp area and 160bp area. The Macau branch issued Rmb2.5bn
BOC, Citigroup, Credit Agricole, Mizuho DIVERSE DEMAND (US$372m) 3.10% one-year and Rmb2bn
Securities, China Construction Bank (Asia), Meanwhile, the Luxembourg branch priced 3.30% three-year offshore renminbi notes,
ICBC, JP Morgan, MUFG, Scotiabank and a US$500m three-year floating-rate note at both at par and 30bp inside initial guidance
UBS were joint lead managers and joint three-month Libor plus 72bp, inside initial of 3.40% area and 3.60% area, respectively.
bookrunners. 95bp area guidance. BOC, Citigroup, Credit The issue was the largest credit bond
The five-year tranche attracted final orders Agricole, Mizuho Securities, Bank of America issuance in the Dim Sum bond market since
of over US$1.8bn from 55 investors. Asia took Merrill Lynch, Commerzbank and ING were China’s exchange rate regime reform in
97% of the notes and Europe 3%. By investor joint lead managers and joint bookrunners. August 2015.
type, 84% went to banks and 16% to asset Final orders for this tranche were over Orders for the one-year tranche finished
managers and fund managers. US$2bn from 50 investors. Geographically, at over Rmb3.4bn from 43 investors.
Final orders for the 10-year tranche 85% went to Asia, 13% to Europe and 2% Geographically, 88% went to Asia and 12% to
exceeded US$2bn from 54 accounts. to offshore US. By investor type, 57% went EMEA. By investor type, 66% went to banks,
Geographically, 93% went to Asia and 7% to to banks, 29% to central banks, sovereign 16% to funds and insurance, 12% to central
Europe. By investor type, 57% went to banks, wealth funds and insurance, and 14% to asset banks, and the rest to private banks.
19% to central banks, sovereign wealth funds managers and fund managers. For the three-year tranche, final orders
and insurance, and 24% to asset managers The Frankfurt branch raised €500m exceeded Rmb2.5bn from 38 accounts.
and fund managers. (US$564m) from a 0.25% three-year senior Asia took 67% of the notes, EMEA 31%,
The 10-year dollar tranche priced at the note at mid-swaps plus 48bp, inside initial and offshore US 2%. By investor type, 52%
tightest spread for a 10-year Reg S deal 70bp area guidance. BOC, Citigroup, BNP were banks, 32% were funds and insurance
from a Chinese bank, according to a banker. Paribas, Commerzbank, Deutsche Bank, LBBW companies, and 16% were private banks and
The 40bp tightening from initial guidance and UniCredit were joint lead managers and others.
reflected the small issue size, with final joint bookrunners. Books were said to have BOC, Citigroup, China Citic Bank
orders more than six times the final print. hit €1.8bn at final spread, excluding interest International, China Construction Bank (Asia),
The Hong Kong branch also sold HK$6bn from leads. European investors took up 83% Credit Agricole, DBS Bank, HSBC, KGI Asia
(US$765m) of 2.45% two-year notes at par, of the bonds. and Standard Chartered Bank were joint lead
25bp inside initial guidance of 2.70% area. The Sydney branch priced A$600m managers and joint bookrunners on the Dim
This is the largest Hong Kong dollar deal (US$430m) 3.5-year floating-rate notes Sum tranches.
from a Chinese commercial bank. at three-month BBSW plus 100bp, inside CAROL CHAN, FRANCES YOON

bookrunners with Orient Securities (Hong › FANTASIA RAISES US$200M lead managers and joint bookrunners with
Kong). China Everbright Bank Hong Kong branch, CMB
The Chinese internet data centre FANTASIA HOLDINGS GROUP, rated B2/B (Moody’s/ International and Deutsche Bank.
services provider will use part of the S&P), has raised US$200m from a bond
proceeds to refinance offshore debt, offering for debt refinancing and general › FITCH FLAGS YUHUANG REFI RISK
including funding a cash tender for its corporate purposes.
US$300m 7.0% notes due August 17 2020. The Hong Kong-listed Chinese real estate Fitch said last Thursday that SHANDONG
The issuer accepted US$150.839m of bonds company priced the 11.750% three-year YUHUANG CHEMICAL faces a heightened
under the offer and will pay US$1,006.25 non-call two senior notes at 98.472 to yield refinancing risk on its onshore and offshore
per US$1,000 in principal amount. 12.375%, the tight end of final guidance of bonds that mature later this year and early
CS and Barclays were also dealer 12.375%-12.500% and inside initial guidance in 2020.
managers for the tender offer. of 12.625% area. The Chinese chemicals producer has
State-owned science park operator Tus- The Reg S issue has expected ratings of Rmb1.5bn (US$223m) of onshore bonds that
Holdings, which is controlled by Tsinghua B3/B (Moody’s/S&P). will be due or put by bondholders between
University, held a 21.4% stake in Nasdaq- UBS, Barclays, CMBC Capital, Guotai Junan May and December 2019 and US$300m
listed 21Vianet and 51.0% of its voting International and Haitong International were 6.625% offshore bonds due in March
rights at the end of December. joint global coordinators as well as joint 2020. But the credit rating agency said

20 International Financing Review Asia April 13 2019


its liquidity on hand is not enough for its According to Fitch, Tewoo has received The Reg S unrated notes will be issued
repayment needs, while the bond markets reform instructions in early April from the by indirect wholly owned subsidiary Lv’an
still appear be closed to the company. Tianjin State-Owned Assets Supervision Chuangxing. The bonds will have the
Yuhuang has been repaying its maturing and Administration Commission and this benefit of two separate keepwell deeds
onshore bonds with internal cash since will affect some of Tewoo’s subsidiaries. provided by Greenland Financial Holdings
a liquidity crisis emerged in mid-2017 at It is currently in the process of separating and Greenland Holding Group (Ba1/BB/BB–).
Hongye Chemical Group, with which it has bank loans for each subsidiary that will Proceeds will be used for general
an agreement under which both companies be restructured, with terms of the loans working capital purposes.
guarantee the other’s bank loans. The currently being renegotiated. Final statistics were not available at the
rating agency noted that Yuhuang has Fitch said it may downgrade Tewoo’s time of writing but orders were said to be
not been able to tap onshore or offshore rating if there is evidence that its access over US$1.2bn at the time final guidance
debt capital markets since the crisis to funding has deteriorated and/or there is was released.
unfolded at Hongye, which is undergoing a weaker likelihood of support from Tianjin Hong Kong-listed China Fortune Financial
restructuring process. SASAC. Group said in a stock exchange filing that it
The chemicals producer’s liquidity on Tewoo’s 5.80% perp, which had slumped has subscribed to US$15.9m of the notes.
hand will be just enough to cover domestic 10 points when the news came out on April Haitong International, HSBC, CMB
bond repayments, with little margin for 3, were quoted at 73.00/74.00 on April 10 International and CMBC Capital were joint
error, Fitch said. afternoon, according to Refinitiv data. Its global coordinators as well as joint lead
It said that Yuhuang plans to re-tap the 4.50% 2019s were quoted at 90.50/91.00, managers and joint bookrunners with
onshore bond market in the second half and its 4.625% 2020s at 88.75/89.25 while its China Industrial Securities International,
of this year after Hongye’s restructuring is 5.50% 2022s were at 81.001/82.00. Orient Securities (Hong Kong), China Securities
completed. But its ability to raise funds will International, China Citic Bank International and
depend on market conditions and investor › FOUNDER GROUP PRINTS 3.5-YEAR BOSC International.
sentiment, including how they respond to
It said it is likely to downgrade Yuhuang’s US$300m 3.5-year senior unsecured notes
rating if it fails to make progress towards at par to yield 7.45%, tightening from initial HUAI’AN WATER CONSERVANCY HOLDING GROUP, rated
refinancing its offshore US dollar bond guidance of 7.875% area. BBB– (stable) by Pengyuan International,
by mid-2019 or if its 1H19 free cashflow Nuoxi Capital is the issuer of the unrated has hired banks for a proposed offering of
generation falls short of its expectations. Reg S notes while Founder Group is the US dollar senior unsecured fixed-rate notes,
Fitch currently has a B rating with a guarantor. subject to market conditions.
negative outlook on Yuhuang. The Chinese state-owned conglomerate Shenwan Hongyuan HK is sole global
plans to use the proceeds for general coordinator as well as joint lead manager
› TEWOO PLACED ON RATINGS WATCH corporate purposes. and joint bookrunner with Huatai Financial
Final statistics were not available at Holdings (Hong Kong) and Industrial Bank Hong
Fitch has placed TEWOO GROUP’s BBB issuer the time of writing but orders were said Kong branch.
rating on rating watch negative to reflect to be over US$1.5bn, including interest The issuer, which undertakes water
the potential deterioration in the state- from leads, at the time of releasing final conservancy, greening, and engineering
owned Chinese commodities trader’s access guidance. project construction, met investors in Hong
to funding in the short to medium term. Founder Securities (Hong Kong) Capital, China Kong and London last week.
The action follows media reports that International Capital Corp, Barclays, CLSA, The proposed notes have an
Tewoo is seeking to extend maturities DBS Bank, Guotai Junan International, Haitong expected rating of BBB– from Pengyuan
of debt owed to its key lenders to ease a International and CMBC Capital were joint International.
liquidity crunch. The news caused some global coordinators. They were also joint
selling of Tewoo’s US dollar bonds. lead managers and joint bookrunners with › HUAIBEI CITY CONSTRUCTION RETURNS
Fitch has also placed the BBB ratings on Central Wealth Securities Investment, Orient
Tewoo’s three outstanding US dollar senior Securities (Hong Kong) and China Securities HUAIBEI CITY CONSTRUCTION INVESTMENT HOLDING
unsecured notes and the BBB– rating on its International. GROUP has priced US$150m three-year credit-
US$450m 5.80% senior perpetual capital on Peking University owns 70% of Founder enhanced bonds at par to yield 5%, in line
ratings watch negative. Group and Beijing Zhaorun Investments with price guidance.
The rating agency says that Tewoo’s Management, a holding company of the The deal was its second offshore bond
management has informed it that it does group’s employees, controls the remaining offering after last November’s debut
not face immediate liquidity needs and no 30%. Founder Group has interests in US$300m 5.2% three-year bond issue.
banks have deemed loans to Tewoo as non- information technology, healthcare and The Reg S unrated bonds have the benefit
performing, and as a result, its business pharmaceuticals, finance and securities, of an irrevocable standby letter of credit
operations remain normal. bulk commodities trading, education and to be issued by Huishang Bank, the same
However, Fitch notes that even a training. structure as last year’s issue.
temporary curtailment of access to Proceeds will be used to refinance
liquidity “may disproportionately affect › GREENLAND FINANCIAL SELLS 364-DAY onshore debt and for other general working
the operations of a commodities trader like capital purposes.
Tewoo”. Hence, the ratings watch negative GREENLAND FINANCIAL HOLDINGS GROUP has priced Guotai Junan International was the sole
will remain in place until Tewoo “provides US$200m 364-day senior unsecured notes global coordinator and joint bookrunner
satisfactory evidence that its liquidity at par to yield 6.375%, the tight end of final with Mizuho Securities, Guoyuan Capital and
position has not materially worsened,” guidance of 6.4% (+/-2.5bp) and well inside Industrial Bank Hong Kong branch.
Fitch said. initial 6.875% area guidance. Huaibei City Construction is the

International Financing Review Asia April 13 2019 21

investment and financing vehicle for issue, part of an exchange offer for its corporates and private banks 7%.
urban development under the State-owned senior notes due 2019. The Reg S issue has expected ratings of B/
Assets Supervision and Administration The tenor of the new issue is 2.5 years BB– (Fitch/Lianhe Global).
Commission of Huaibei city in Anhui and the minimum yield is 12.85%. China International Capital Corp, Barclays,
province. Modern Land has invited holders of Credit Suisse and Guotai Junan International
its US$500m 6.875% senior notes due were joint global coordinators. They
› MIE GOES AHEAD WITH EXCHANGE October 20 to exchange them at par, plus were also joint lead managers and joint
accrued interest, for new notes. It is also bookrunners with UBS, Deutsche Bank, HSBC,
MIE HOLDINGS is proceeding with a bond considering raising new money from the Haitong International, CMB International, Bank
exchange offer that will delay an April offering. of East Asia, Orient Securities (Hong Kong),
redemption despite receiving insufficient The Hong Kong-listed Chinese developer HeungKong Financial and SPDB International.
approval from bondholders. has set the maximum acceptance amount
The company said in an exchange under the exchange at US$200m, having › SW SECURITIES INTL SELLS NOTES
filing that it received valid tenders of previously said it would be US$300m.
US$265,251,000 in aggregate principal Any new money raised will be used to Hong Kong-listed brokerage SOUTHWEST
amount of the existing notes, representing refinance bonds, finance acquisitions or SECURITIES INTERNATIONAL SECURITIES has priced
approximately 84% of the US$315.916m development, and for general corporate US$200m two-year senior unsecured notes
7.5% bonds. purposes. at par to yield 6.9%, inside initial guidance
MIE had said the offer required 90% The deadline for the exchange offer is of 7.25% area.
approval to go ahead with the exchange, April 16 and settlement is expected on or The Reg S unrated issue drew final orders
which would switch bondholders into new about April 25. of over US$670m from 45 accounts. Asia
13.75% senior notes due 2022. Credit Suisse, Guotai Junan International and took 99% of the notes and Europe 1%. By
The Chinese oil and gas explorer and Morgan Stanley are dealer managers and DF investor type, 75% went to fund managers,
producer extended the deadline four times King is information and exchange agent for 23% to banks and 2% to private banks.
and sweetened the deal in order to reach the exchange offer. The notes will have the benefit of a
the required threshold ahead of an April 25 Modern Land (China) said the exchange keepwell deed provided by Shanghai-listed
maturity. offer would help to extend its debt maturity parent company Southwest Securities,
It had warned that a failure to reach profile and strengthen its balance sheet and which is indirectly owned by Chongqing
the approval threshold could prompt it to cashflow management. SASAC.
pursue alternative arrangements that could Proceeds will be used for offshore debt
include a debt restructuring, which could › PHILIPPINES EYES SECOND PANDA BOND refinancing and to supplement working
result in bondholders receiving less than capital.
they would under the exchange offer. The Philippines is considering raising Southwest Securities International, BNP
The company will now issue up to US$500m in the Chinese domestic Paribas, Haitong International, CLSA and
US$248,394,000 in new notes last Friday, market from its second Panda bond issue Standard Chartered Bank were joint global
leaving US$50,665,000 in existing notes with tenors of three to five years, National coordinators. They were also joint
remaining. Those notes will have to be Treasurer Rosalia V. de Leon said. bookrunners and joint lead managers
redeemed on April 25. The issue might come next week or with BoCom International, China Citic Bank
MIE had struggled to amass sufficient the week after. Bank of China is the lead International, China Everbright Bank Hong Kong
approvals since the offer was first underwriter, according to people with branch, CMBC Capital, CMB International,
announced on March 1. knowledge of the matter. Founder Securities (Hong Kong) Capital,
Originally, MIE offered US$100 in cash The country is awaiting approval from Huatai Financial Holdings (Hong Kong), ICBC
and US$900 in principal amount of new China’s National Association of Financial International and Orient Securities (Hong Kong).
notes, plus accrued interest, for each Market Institutional Investors for the issue.
US$1,000 of bonds tendered by the early In March last year, the Philippines sold › SUNAC CHINA PRICES SENIOR BONDS
bird deadline of March 15, and US$20 in Rmb1.46bn three-year Panda bonds at 5%.
cash and US$980 in new notes for those SUNAC CHINA HOLDINGS, rated Ba3/BB–/BB,
who tendered after that but before the › REDSUN PAYS DOUBLE DIGITS has priced US$750m senior bonds after
offer deadline expired on March 22. drawing over US$1.5bn final orders from 71
On March 25, MIE extended both REDSUN PROPERTIES GROUP, rated B/B/BB– (S&P/ accounts.
deadlines to March 29, meaning that all Fitch/Lianhe Global), has raised US$300m The 7.95% 4.5-year non-call 2.5 bonds
bondholders who submitted would be from a bond offering for debt refinancing were priced at 98.891 to yield 8.25%, inside
given the terms originally offered to those and general corporate purposes. initial guidance of 8.50% area.
who submitted by the early bird deadline. The 9.95% three-year non-call two senior The Reg S issue has expected ratings of
It also said it would make an offer to buy unsecured notes were priced at 97.071 to B1/B+/BB.
back up to US$30m of the new notes after yield 11.125%, inside initial guidance of Asia took 86% of the notes and Europe
completing the sale of a Canadian business. 11.375% area. 14%. By investor type, 50% went to fund
DF King is information and exchange The deal drew over US$1.25bn in orders managers, 27% to banks and financial
agent. from 61 accounts, including those from the institutions, and 23% to private banks.
joint lead managers. Asia bought 99% of The Hong Kong-listed Chinese real estate
› MODERN LAND SETS MINIMUM YIELD the notes, and the rest went to European company plans to use the proceeds mainly
accounts. for debt refinancing.
rated B2/B (Moody’s/ By investor type, asset and fund HSBC, Morgan Stanley, China Citic Bank
Fitch), has announced the tenor and managers and insurers bought 71%, International, China Industrial Securities
minimum yield for a new US dollar bond banks and financial institutions 22% and International, CMB International, Deutsche Bank,

22 International Financing Review Asia April 13 2019


Guotai Junan International, ICBC International Guotai Junan International and Haitong › EVERBRIGHT SECURITIES PLANS CP
and Nomura were joint global coordinators, International were global coordinators and
joint lead managers and joint bookrunners. bookrunners for the new issue, and dealer- EVERBRIGHT SECURITIES is planning a Rmb3bn
managers for the tender offer. 90-day commercial paper offering this
› WUXI CONSTRUCTION PRINTS week, according to a filing on the Shanghai
rated BBB/BBB+ (S&P/Fitch), last Wednesday Chinese local government financing vehicle interbank market, will be available to
priced US$300m 4.5% senior unsecured Reg YICHANG HIGH-TECH INVESTMENT DEVELOPMENT, rated offshore investors through the Bond
S bonds at 99.723 to yield 4.6%, in line with BB+ by Fitch, has reopened its 7.50% senior Connect link.
final guidance. unsecured notes due December 20 2021 The CP is part of a Rmb12bn debt
Orders were over US$3.2bn from 62 for a tap of US$150m, bringing the total programme the issuer registered with the
accounts, including demand from the outstanding to US$200m. National Association of Financial Market
leads. Asia took 99% of the Reg S notes and It sold the additional bonds at 100.704 to Institutional Investors.
Europe 1%. yield 7.2%, inside initial guidance of 7.50% Proceeds will be used to replenish capital.
By investor type, banks and financial area. China Merchants Bank is the lead
institutions booked a combined 79%, fund Proceeds from the tap will be used for underwriter. Bank of China, Industrial and
managers and sovereign wealth funds a general corporate purposes. Commercial Bank of China and China Bohai Bank
combined 19%, and private banks 2%. The original notes were priced at par last are joint underwriters.
Xihui Haiwai I Investment Holdings is December. The Reg S notes are rated BB+ Bookbuilding will take place on April 16
the issuer of the notes, which will carry a by Fitch. and settlement will be on April 17.
guarantee from Wuxi Construction and are China Minsheng Banking Corp Hong Kong China Chengxin International assigned
expected to be rated BBB+ by Fitch. branch was the sole global coordinator a AAA rating to the issuer and a A-1 rating
Standard Chartered, OCBC, China Minsheng on the reopening. It was also joint lead to the CP.
Banking Corp Hong Kong branch, Cinda manager and joint bookrunner with Societe
International, Industrial Bank Hong Kong Generale, Haitong International, Huatai Financial › ZHENJIANG CITY ISSUES CP
branch, CNCB HK Capital and Shanghai Pudong Holdings (Hong Kong), Industrial Bank Hong
Development Bank Hong Kong branch were Kong branch and Tensant Securities. ZHENJIANG CITY CONSTRUCTION INDUSTRY GROUP,
joint global coordinators. They were also YHID, which is owned by the Yichang a local government financing vehicle in
joint bookrunners with BoCom International, municipal government, invests in and Jiangsu province, issued Rmb500m 240-day
Bank of China, Huatai Financial Holdings builds public works, such as land and unsecured short-term commercial paper at
(Hong Kong), BOSC International and Bank of urban development, industrial parks and 4.5% last Monday.
Communications. social housing, in the Yichang High-Tech China Everbright Bank is the lead
Proceeds will be used to refinance Development Zone in Hubei province. underwriter and lead bookrunner. Bank of
offshore debt. Nanjing is joint underwriter.
Wuxi Construction is wholly owned by › YUYAO IN DOLLAR MARKET Proceeds will be used for general
the Wuxi municipal government and is the corporate purposes and debt repayment.
main government-related entity that carries YUYAO ECONOMIC DEVELOPMENT ZONE CONSTRUCTION Shanghai New Century Credit Rating has
out urban infrastructure construction in INVESTMENT AND DEVELOPMENT was last Friday assigned AA+ to the issuer.
the city. marketing US dollar three-year bonds at Financing costs for the issuer have
initial guidance of 6.2% area. fallen 30bp compared with short-term
› XINYUAN ISSUES TO FUND TENDER Final pricing had yet to be announced CP of the same maturity issued on
when IFR went to press. February 19, as the market expects China
XINYUAN REAL ESTATE, rated B/B (S&P/Fitch), The unrated Reg S issue was capped Development Bank to provide some
on April 4 priced US$200m of 2.5-year at US$100m. Yuyao Shuncai Investment support to the Zhenjiang government
senior unsecured notes at par to yield Holding is guaranteeing the senior to deal with its debt problems, said a
14.2%, having tightened from initial price unsecured bonds. Beijing-based manager with a securities
guidance of 14.5% area. Guotai Junan International and Haitong Bank company.
Strong anchor interest was received after were joint global coordinators. They were China Development Bank has been in
meetings last Wednesday, according to also joint bookrunners with Giraffe Capital talks with the Zhenjiang government on
leads. and BOSC International. providing loans as cheap as 4.9% per year
The benchmark Reg S issue has expected Proceeds will be used to refinance to help repay debt built up mainly by its
ratings of B–/B (S&P/Fitch). existing debt and for onshore project LGFVs, according to people familiar with
Proceeds will mainly be used to fund development. the matter.
a concurrent tender offer to buy back Yuyao Shuncai Investment Holding is
its US$276.6m of 8.125% senior notes the main asset management and capital
due August 30, or other purchases or operation platform of Yuyao municipal SYNDICATED LOANS
redemptions of outstanding notes, and for government in Zhejiang province, and is
general corporate purposes. directly controlled by Yuyao State-owned › ALIBABA SEEKS PRICING CUT, EXTENSION
Xinyuan later said it had accepted Assets Supervision and Administration
US$119.989m of bonds under the tender Commission. The issuer is a wholly owned Chinese e-commerce giant ALIBABA GROUP is
offer. The NYSE-listed Chinese property subsidiary focused on land development seeking an amendment and extension of its
developer will pay US$1,005 per US$1,000 and property construction in Yuyao, US$4bn five-year bullet term loan signed in
in principal amount. mainly within the Yuyao Economic May 2016.
UBS, Bank of America Merrill Lynch, Barclays, Development Zone. Credit Suisse, the sole coordinator of the

International Financing Review Asia April 13 2019 23

A&E exercise, sent invitations to lenders accordance with BoCom Leasing’s Green keepwell provider, which is in turn rated
earlier this month. Finance Framework. A pre-issuance stage A1/A/A.
Alibaba is looking to cut the interest certificate from the Hong Kong Quality Shanghai and Hong Kong-listed China
margin to 85bp over Libor, a 25bp Assurance Agency will be obtained prior to Construction Bank owns both the borrower
reduction from the current margin of the first drawing of the facility. and the keepwell provider.
110bp. BoCom Financial Leasing is rated A2
Lenders are being offered a 25bp fee for (Moody’s), while both BoCom Financial › AGILE SEEKS US$200M LOAN
the A&E exercise, which will extend the Leasing and BoCom Leasing Management
maturity date by a further five years from (ONGû+ONGûAREûRATEDû!¦!û30&ITCH  Hong Kong-listed property developer AGILE
the amendment date. GROUP HOLDINGS is seeking a US$200m three-
The deadline for responses is April 26. › CDB FL UNIT WANTS BIGGER NINJA year amortising term loan.
The original facility had 25 lenders, Industrial & Commercial Bank of China
including the eight original MLABs ANZ, METRO EXCEL, a fully owned unit of China Singapore branch is sounding banks on the
Citigroup, Credit Suisse, Deutsche Bank, Development Bank Financial Leasing, is deal, which is expected to have an average
Goldman Sachs, JP Morgan, Mizuho Bank expected to increase its three-year Ninja life of 2.5 years.
and Morgan Stanley, when it closed loan to US$300m from a US$200m target. Last December, Agile raised a HK$1.75bn
syndication in 2016. Citigroup was the Bank of Communications Tokyo branch has (then US$224m) three-year term loan from
facility agent. Lenders were offered a top- joined as mandated lead arranger and five banks. ICBC Macau was the MLAB
level all-in pricing of 123bp based on the Shinkin Central Bank as a lender. A few more of the deal, which paid a top-level all-in
margin of 110bp over Libor. banks are in the process of obtaining pricing of 538bp based on an interest
Alibaba’s last visit to the loan market internal approvals. margin of 380bp over Hibor and an average
was in May 2017 with a US$5.15bn Mizuho Bank is the sole mandated life of 2.65 years.
five-year club loan. ANZ, BNP Paribas, lead arranger and bookrunner of the Agile, which has projects in Hong Kong,
Citigroup, Credit Suisse, DBS Bank, transaction, which comprises a yen tranche cities in China and Kuala Lumpur, is rated
Deutsche, Goldman Sachs, HSBC, ING and a US dollar portion. Ba3/BB (Moody’s/S&P).
Bank, JP Morgan, MUFG, Mizuho and The all-in pricing is in the low 100s. An
Morgan Stanley were the lenders on that investor presentation meeting was held › SINO BIOPHARM SIGNS US$1BN LOAN
deal, which offered an all-in pricing of in Tokyo last Tuesday. The deadline for
102bp based on a margin of 95bp over responses is April 25. Hong Kong-listed pharmaceutical company
Libor. Funds are for Metro Excel’s general SINO BIOPHARMACEUTICAL signed a US$1bn
funding requirements. CDB Financial three-year term loan on April 9, according
› BOCOM LEASING PAYS TIGHTER MARGIN Leasing is providing a keepwell agreement. to a stock exchange filing.
Hong Kong-based Metro Excel is CDB Change of control covenants require
BOCOM LEASING MANAGEMENT HONG KONG, a unit of Financial Leasing’s core operating platform Tse Ping and his family members, Cheng
Bank of Communications Financial Leasing, for its overseas non-aircraft leasing Cheung Ling, and Theresa Y Y Tse and her
is paying a tighter margin on a US$200m business. family members to together remain the
three-year Green loan than on its parent’s CDB Financial Leasing is rated A1/A/A+. largest shareholder, owning at least 35%
onshore US$275m loan currently in the of the borrower, and Tse Ping to remain
market. › CCB LEASING SEEKS US$300M REFI a member of the company’s board of
The US$200m bullet term loan pays directors.
100bp over Libor, against 108bp for the CCB LEASING (INTERNATIONAL) CORP has launched The role of chairman must also be
paren’ts loan. an unsecured US$300m three-year bullet taken up by a family member of Tse Ping
Banks have been invited to join as term loan. or Theresa Y Y Tse. Theresa Y Y Tse is
mandated lead arrangers with tickets Funds are for refinancing a bridge loan currently chairwoman of Sino Biopharm.
of US$30m or more for a top-level all-in signed by the borrower on January 24 and Bank of China (Hong Kong), Bank of
pricing of 118bp based on an upfront fee of for general corporate purposes. Communications Hong Kong branch, Hang Seng
54bp, as lead arrangers with commitments HSBC, Mizuho Bank and Sumitomo Mitsui Bank and HSBC were the mandated lead
of US$20m–$29m for an all-in of 115bp Banking Corp are the mandated lead arrangers and bookrunners on the deal,
through a fee of 45bp and as arrangers with arrangers and bookrunners of the latest which attracted 32 banks in syndication.
tickets of US$10m–$19m for an all-in of financing, which pays an interest margin The top-level all-in pricing was 185bp based
113bp based on a 39bp fee. Commitments of 92bp over Libor. CCB Financial Leasing is on an interest margin of 135bp over Libor
are due by April 26. providing a keepwell deed. and an average life of 2.7 years.
Mizuho Bank is the sole MLAB, while Banks have been invited to join as lead Funds are to refinance a US$300m loan
BoCom Financial Leasing is providing a arrangers with commitments of US$50m signed in September 2016 and for general
keepwell agreement for the Green loan. or more for a top-level all-in pricing of corporate purposes.
The onshore US$275m three-year term 113bp based on an upfront fee of 63bp, as
loan for the parent pays a higher interest arrangers with tickets of US$30m–$49m for › CPI RONGHE SIGNS US$232M LOAN
margin of 108bp over Libor and a top- an all-in of 110bp through a fee or 54bp and
level all-in pricing of 120bp based on a as senior managers with US$10m–$29m for signed a two-year
remaining average life of 2.675 years. an all-in of 105bp based on a 39bp fee. loan at US$232m with nine lenders last
However, the top-level fee of 32bp is lower. A bank presentation was held on April 11 Monday.
The MLABs on that deal are HSBC, Standard in Hong Kong and commitments are due by BNP Paribas, Sumitomo Mitsui Banking Corp and
Chartered and Sumitomo Mitsui Banking May 10. Westpac were the mandated lead arrangers
Corp, and syndication is ongoing. CCB Leasing (International), which is and bookrunners of the bullet financing,
The US$200m loan will be used in rated A (S&P), is a sister company of the which has a one-year extension option.

24 International Financing Review Asia April 13 2019


Twenty-one file for tech board

„ Equities Aspirants plan to raise a combined US$2.5bn from IPOs on new board

Twenty-one more companies filed for IPOs through an offer of 40.01m A-shares, or 10% shareholders. Shunwei Capital, which was
on the Shanghai tech board between April 4 of its enlarged capital. co-founded by Xiaomi founder Jun Lei, owns
and April 11, to raise a combined Rmb16.9bn According to its pre-prospectus, Visionvera’s a 12.85% stake, while Tianjin Jinmi, an entity
(US$2.5bn). net profit was Rmb475m in 2018, up 585% controlled by Xiaomi, owns 11.85%.
BLOOMAGE BIOTECHNOLOGY, which delisted year on year, on revenue of Rmb1.15bn. Citic Securities is the sponsor.
from the Hong Kong bourse in November Proceeds will be used to replenish SHANGHAI MICROPORT ENDOVASCULAR MEDTECH is
2017, has filed to the Shanghai Stock a reserve fund for development and the first tech board aspirant that is a spin-off
Exchange for a proposed Rmb3.2bn technology, to fund three HD video of a Hong Kong-listed MICROPORT SCIENTIFIC.
(US$470m) tech board IPO. communication projects and marketing, to The endovascular devices manufacturer
The deal is set to be the second largest build or rent a new building for headquarters, plans to raise Rmb651m through the offer
proposed float on the new board behind that and to replenish working capital. of 18m A-shares, or not less than 25% of its
of cloud service provider Ucloud Technology, China Securities is the sponsor. enlarged capital. There is a 15% greenshoe.
which plans to raise Rmb4.7bn. BEIJING ROBOROCK TECHNOLOGY, backed by Proceeds will be used on two artery related
Bloomage, which produces hyaluronic Hong Kong-listed Xiaomi, has filed to the medical instrument projects, a marketing
acid used in medical and skin care products, Shanghai Stock Exchange for a proposed network and IT service, and to replenish
is offering 49.6m A-shares, or not less than Rmb1.3bn tech board IPO. working capital.
10% of its enlarged capital. There is a 15% The company plans to offer 16.7m MicroPort Scientific holds a 62% stake in
greenshoe. A-shares, or 25% of its enlarged capital. the company.
Proceeds will be used to renovate an R&D Roborock Tech designs and develops The parent company said it would not give
centre, build a new production centre in intelligent hardware such as smart cleaning assured entitlements to the majority of its
Tianjin province, and expand the company’s robots and authorises third-party production. shareholders for the proposed spin-off as
headquarters in Jinan, Shandong province. The proceeds will be used on a data they are not classified as qualified investors
According to its pre-prospectus, platform, the launch of a new cleaning robot for the tech board under Chinese regulations.
Bloomage’s net profit was Rmb424m in project, the development of commercial Guotai Junan and Huajing Securities are
2018, a 91% increase year on year, on revenue cleaning robot products, and to replenish the joint sponsors of the deal.
of Rmb1.26bn. working capital. As of April 11, within 19 working days
Huatai United Securities is the sponsor. Roborock Tech received an investment since the tech board started accepting
VISIONVERA INFORMATION TECHNOLOGY, from Xiaomi five months after its founding in applications, 65 companies have filed to the
a provider of high-definition video July 2014, becoming one of the members of SSE to raise a combined Rmb62bn.
communication products and services, has the so-called Xiaomi ecological chain. Twenty-seven companies have received
filed to the SSE for a proposed tech board Founder Chang Jin has a 30.99% stake in the first enquiries from the SSE on their
IPO. the company, followed by Shunwei Capital applications.
The company plans to raise Rmb1.8bn and Tianjin Jinmi as the next two largest KAREN TIAN, FIONA LAU

The interest margin is 120bp over › AOYUAN SIGNS FOUR-BANK CLUB the remainder will be for working capital,
Libor, but it will step up to 150bp if the capital expenditure and general corporate
one-year extension is exercised. Lenders Hong Kong-listed property developer CHINA purposes.
were offered a top-level all-in pricing of AOYUAN GROUP signed a three-year term Ownership covenants require Guo Zi
145bp via a 50bp management fee. loan at US$164m-equivalent on April 9, Wen and Guo Zi Ning to remain chairman
The deal was launched at US$300m on a according to a stock exchange filing on and vice chairman, respectively, of
best-efforts basis. April 12. Aoyuan and together to remain the largest
Funds are for refinancing and general Nanyang Commercial Bank was the shareholder owning at least 40% of the
corporate purposes. coordinator and facility agent. The other borrower and maintain management
The borrower last raised a US$305.6m- lenders are Bank of East Asia, Hang Seng Bank control over it.
equivalent debut loan last November. and Industrial Bank. !OYUANûISûRATEDû"" ""¦
Deutsche Bank was the MLAB of that All lenders are mandated lead arrangers
financing, which offered a top-level all-in and bookrunners.
pricing of 150bp based on a margin of The currency splits are HK$1.131bn EQUITY CAPITAL MARKETS
120bp and a 60bp fee. (US$144m) and US$200m.
CPI Ronghe is a subsidiary of SPIC The all-in pricing was 555.6bp based on › AB INBEV NEARS HK FILING
Capital Holdings, which in turn is a fully an interest margin of 495bp over Libor
owned subsidiary of China’s state-owned or Hibor, an upfront fee of 150bp and an ANHEUSER-BUSCH INBEV,the world’s largest
State Power Investment. average life of 2.475 years. brewer, may apply to the Hong Kong stock
CPI Ronghe is mainly engaged Certain subsidiaries of Aoyuan are exchange as early as this month for a listing
in leasing power and clean-energy providing joint and several guarantees. of its Asian operations, according to people
equipment. At least 80% of the funds drawn from familiar with the situation.
For full allocations, see the loan must be used for refinancing and The company plans to raise at least US$5bn

International Financing Review Asia April 13 2019 25

Hollysys tumbles on ADS sale
„ Equities Surprise sale and vague use of proceeds worry investors

Nasdaq-listed HOLLYSYS AUTOMATION and marketing channels, for potential There is a 15% greenshoe with the same
TECHNOLOGIES saw its shares tumble 23% to acquisitions or investments and other general primary and secondary split.
US$17.97 last Tuesday after it announced corporate uses. Huya raised US$180m from an IPO last
a follow-on offer of 7.8m new American JP Morgan expects the market to react May. As of last Wednesday, the shares were
depositary shares. negatively until further clarity is provided on up 93% from the IPO price.
While multiple Chinese companies have the intentions behind the equity raising. Citigroup, Credit Suisse, Goldman Sachs
been successfully raising funds in the US on Hollysys shares rebounded 4.3% last and Jefferies were the joint bookrunners.
the back of strong stock markets, Hollysys Wednesday. Meanwhile, Nasdaq-listed e-commerce
left the market perplexed as to why it needs The deal, which was originally scheduled solutions provider Baozun raised US$275m
the money and its plan backfired. to price after the US market closed last through a five-year put-three convertible
In a research report, JP Morgan cut Tuesday, will now price on April 16. There is bond on April 5. The base deal was
the automation systems maker from also a 15% greenshoe. US$225m with an upsize option of US$50m
“overweight” to “neutral” as the “the Citigroup is the sole bookrunner. that was fully exercised.
surprising equity issuance plan may cast Baozun loaned ADS to bond purchasers to
doubt on capital discipline”. TWO MORE DEALS enable a US$90m delta placement.
It said the proposed issue would lead to a Hollysys’s troubles contrast with recent The coupon on the CB was fixed at 1.625%
13% dilution for existing shareholders, and capital raisings in the US, where investors from the 1.375%–1.875% range and the
expressed surprise at the fundraising plan have welcomed a string of Chinese follow- conversion premium at the bottom of the
since Hollysys has an underutilised balance ons and convertible bonds this year. 30%–35% range. The company will use
sheet and decent cash generation. Another two Chinese companies, HUYA and the proceeds for working capital and other
The company had a net US$240m of BAOZUN, raised a combined US$717m in the general corporate purposes, including debt
cash on hand at the end of 2018. Its forecast US in the past two weeks. repayment and potential acquisitions.
annual operating cashflow for the financial Last Tuesday, a follow-on in NYSE-listed The delta placing comprised 2.25m shares
year ending in June 2019 is US$120m, game streaming company Huya raised sold at US$40 each. The placement price
against insignificant capex plans based on US$442m. The offer, comprising 18.4m ADSs was at a 9.6% discount to the pre-deal close
existing guidance, said the report. (74% primary/26% secondary), was priced at of US$44.25. The stock loan facility for the
In a filing, Hollysys said it planned to use US$24 per share. NYSE-listed social media bonds extends to up to 4.23m ADS.
the proceeds to expand its product offerings, company YY was the seller. Credit Suisse and Deutsche Bank were the
invest in research and development and The final price represents a discount of joint bookrunners.
production capacity, broaden its sales 1.4% to the close of US$24.33 last Tuesday. FIONA LAU

before the summer holidays, the people said. our business as a long-term investor in the to the company’s A-share closing price of
The size of the float has not been determined, Asia-Pacific region and remain excited about Rmb5.66 (US$0.84) last Wednesday.
and will depend on the stake on offer and the the potential of this geography.” The institutional books have been
valuation of the business. Belgium-based AB InBev, the company covered after the first day of bookbuilding,
Banks have pitched for a valuation of behind Budweiser, Corona and Stella Artois, according to people close to the deal.
as high as US$70bn for the Asia Pacific had a market capitalisation of €129bn There is a 15% greenshoe.
operations, said the people. Analysts at (US$145bn) on Monday. It is looking to There are 13 cornerstone investors taking
Jefferies, however, valued the regional deleverage towards an “optimal capital up a combined US$829m or about 69% of
business at US$45bn in a report in January. structure” of around 2x net debt to Ebitda, the float based on the mid-point of the
AB InBev said Asia Pacific generated Ebitda from 4.6x at the end of 2018. price range.
of US$3.08bn in 2018, up 12.8% on the JP Morgan and Morgan Stanley are leading They are ICBC Asset Management
previous year. The region accounted for the proposed float. Scheme Nominee (US$300m), Huaxia
18% of the group’s business by volume and Life Insurance (US$100m), China Life
14% of its profit. › SHENWAN HONGYUAN LAUNCHES HK IPO Insurance (Group) (US$80m), China
“The company is likely to sell about Reinsurance (Group) (US$50m), New
a 20% stake so as to raise a meaningful Chinese brokerage SHENWAN HONGYUAN China Life Insurance (US$50m), State-
amount of funds to ease its debt burden,” GROUP last Thursday started bookbuilding Owned Enterprise Structural Adjustment
said a banker who pitched for the float. for a Hong Kong IPO of up to HK$9.8bn China Merchants Buyout Fund (US$50m),
“In line with our culture, we always look (US$1.25bn). Suning International (US$50m), Sichuan
at opportunities to optimise our business The Shenzhen-listed company is selling Development (US$49m), Taiping Life
and drive long-term growth. There is, 2.5bn shares, or 10% of the enlarged share Insurance (US$30m), China Saite (HK)
however, no decision as to whether we might capital, in an indicative range of HK$3.63– (US$30m), Changjiang Pension Insurance
undertake an IPO or any other potential $3.93 per share. (US$20m), Pacific Asset Management
transaction relating to our Asia Pacific The price range represents a 2018 P/B of (US$10m) and PICC (US$10m).
business,” a representative for AB InBev said 1.01–1.08 and a 2019 forecast P/B of 0.91– The deal is scheduled to price on April 18
in a statement. “We are very committed to 0.98. It also represents a 41%–45% discount and the shares will start trading on April 26.

26 International Financing Review Asia April 13 2019


SZSE questions tech board spin-off

„ Equities Exchange enquiry highlights incomplete regulatory framework

The Shenzhen Stock Exchange has raised The statement from the company raised subsidiary when there is no clarity yet on the
concerns over a company’s plan to spin eyebrows as China has not yet issued rules for spin-offs.
off a fast-growing unit for a listing on the regulations covering plans by A-share The exchange also asked the company
new Shanghai tech board, saying that rules companies to spin off a business and list it on to clarify whether TungKong Ruiyun would
regarding spin-offs in China are not yet another domestic bourse. continue to be profitable, whether it would
ready. There have been a few cases in which have a competing relationship with its parent
Shenzhen-listed printer TUNGKONG said last listed companies have floated a business company and whether it is a core business of
Monday that it was considering a separate on another board, but only after the parents the parent.
listing for wholly owned cloud storage unit trimmed their stakes to well under 50%. In a written response to the stock
TUNGKONG RUIYUN DATA TECHNOLOGY, with the The establishment of the Shanghai tech exchange last Thursday, TungKong said
Shanghai tech board its preferred venue. board has raised expectations that China will the company decided to propose a spin-off
The new board, which was announced soon allow spin-offs. even though rules on spin-offs are not ready
in November by President Xi Jinping to The China Securities Regulatory because fast-growing TungKong Ruiyun
encourage domestic listings of innovative Commission said in a document on the tech Data has continuous funding needs. As such,
companies, has attracted a long list of board in January that “a listed company that getting the unit ready for a listing could help
IPO candidates since it started accepting reaches a certain scale can legally spin off its speed up the spin-off process once rules are
applications last month. independent and qualified subsidiaries for a in place.
Although the queue includes other listing on the tech board”. TungKong’s shares, which rose 2.2% to
companies with shareholders that are But no detailed spin-off rules have been Rmb21.80 on Tuesday, fell during the three
already listed in China, TungKong is the first announced since then. subsequent sessions to trade at Rmb20.52
to disclose plans for a spin-off on the new The Shenzhen Stock Exchange has shortly before the close on Friday.
tech board. asked TungKong to explain its plan for the KAREN TIAN, FIONA LAU

The proceeds will be used to replenish › VIVA BIOTECH PRE-MARKETS IPO from a Nasdaq IPO in July.
working capital and fund business Founded in 2015, Yunji had more than 23
development. VIVA BIOTECHstarted pre-marketing for a Hong million buyers on its platform in 2018. Its
ABC International, Goldman Sachs, ICBC Kong IPO of about US$200m–$300m last gross merchandise value was Rmb22.7bn in
International and Shenwan Hongyuan HK are Thursday. 2018, up 136% from 2017.
the joint sponsors. Pre-marketing will run until April 17. The company posted a net loss of
The Chinese company provides drug Rmb60m in 2018, compared with a
› GUOTAI JUNAN SEC BUILDS WAR CHEST discovery or incubation services to biotech Rmb106m loss in 2017.
startups. Yunji allows registered users to open
GUOTAI JUNAN SECURITIES has raised HK$3.17bn According to a regulatory filing, Viva stores on its systems. The users promote
from an upsized primary share placement Biotech’s offerings includes research, their stores via WeChat and do not have to
in Hong Kong. hit screening, lead optimisation and hold inventory as Yunji handles the supply
The Hong Kong and Shanghai-listed drug candidate determination. It also chain.
Chinese brokerage sold 194m shares at a makes equity investments in potential
fixed price of HK$16.34 per share. biotechnology startups. › DUIBA PRE-MARKETS HK IPO
The deal was launched with a base size of As of the end of 2018, it had over
166m shares and an upsize option of 73m 350 early-stage biotechnology and DUIBA, a Chinese mobile advertising
share that was partially exercised. pharmaceutical clients worldwide. company, last Monday started pre-
The placement price represents a 7.4% The company posted a profit and total marketing a Hong Kong IPO of about
discount to the company’s pre-deal close of comprehensive income of Rmb91m in US$100m.
HK$17.64 last Tuesday. 2018, up 19% year on year. Pre-marketing will run until April 18,
Books were comfortably oversubscribed CICC is the sole sponsor. according to a term-sheet.
with support from existing shareholders Founded in 2014, Duiba is a user
and new investors. There was participation › YUNJI PRE-MARKETS NASDAQ IPO management software as a service (“SaaS”)
from international long-only funds, provider for online business and an
hedge funds, family offices and Chinese Social e-commerce company YUNJI started interactive advertising platform operator
institutional investors. pre-marketing last Wednesday for a Nasdaq in China.
There is a 90-day lock-up on the company. IPO of about US$200m, according to people The company posted a loss of Rmb292m
Proceeds will be used to supplement the close to the deal. in 2018 mainly because of incurred fair value
brokerage’s capital base, replenish working Credit Suisse, CICC, JP Morgan and Morgan losses on redeemable preference shares.
capital and support business development. Stanley are the joint bookrunners. Adjusted profit for the year was Rmb205m,
Guotai Junan International was the sole The company is following in the compared with Rmb118m in 2017.
global coordinator and joint bookrunner footsteps of Pinduoduo, a Chinese discount CMB International and HSBC are the joint
with UBS. e-commerce site which raised US$1.63bn sponsors.

International Financing Review Asia April 13 2019 27

› HEBEI HIGHWAY PLANS US$400M IPO according to people close to the deal. Proceeds will be used to buy six container
The Chinese drugmaker’s earlier listing ships and more containers.
HEBEI HIGHWAY DEVELOPMENT is planning to raise application to the Stock Exchange of Hong According to the French research
about US$300m–$400m from a Hong Kong Kong was filed in September and has institute Alphaliner, as of December 31
IPO this year, according to people close to expired. 2018, the company ranked 15th in the
the deal. Hansoh first planned a listing of up to world and in the top three in China for
CCB International, CICC and HSBC are US$1.5bn in 2016 via Morgan Stanley and total shipping capacity.
leading the transaction. UBS but it did not proceed with the deal. CICC is the sponsor.
The company operates and invests in six The company has 13 main products
highways in Hebei. It posted a net profit focusing on the central nervous system, › HYET FILES FOR SHENZHEN IPO
of Rmb68m for the first half of 2018, up oncology, anti-infectives and diabetes.
17.7% year on year. Its total assets stood at The company posted a net profit of HUNAN YUSSEN ENERGY TECHNOLOGY plans to raise
Rmb51bn at the end of June last year. Rmb1.9bn last year, up from Rmb1.6bn in Rmb1bn from a proposed Shenzhen IPO.
2017. The company, which mainly engages in
› SO-YOUNG FILES FOR US IPO Hansoh founder Zhong Huijuan and R&D and sales of chemical products based
her daughter Sun Yuan own a 78% stake on LPG, plans to issue 28.4m A-shares, or
SO-YOUNG INTERNATIONAL, a Chinese social in the company. Zhong is the wife of 25% of its enlarged capital.
network focused on plastic surgery, has Sun Piaoyang, who owns a 24% stake in Proceeds will be used to replenish
filed for a US IPO to raise up to US$150m. Shanghai-listed Jiangsu Hengrui Medicine, working capital and add a new chemical
The Beijing-based company, founded the largest pharmaceutical company in production line for its subsidiary, Yussen
in 2013, allows customers to share and Lianyungang, Jiangsu province. New Material.
rate their cosmetic surgeries through its Citigroup and Morgan Stanley are joint Essence Securities is the sponsor.
app and websites and to select cosmetic sponsors.
surgeons to book procedures. › CANSINO BIO EXERCISES GREENSHOE
It had over 240 million average monthly › ZENGAME TECHNOLOGY PRICES IPO
viewers in the fourth quarter of 2018 and Chinese vaccine manufacturer CANSINO
facilitated medical aesthetic treatment Mobile games developer ZENGAME TECHNOLOGY BIOLOGICS has fully exercised an
worth Rmb2.1bn last year, according to a has raised HK$221m from a Hong Kong overallotment option following its Hong
filing. IPO after pricing the deal slightly above Kong IPO, lifting the total deal size to
The company posted a net income of the mid-point of the indicative price range, HK$1.35bn.
Rmb55m in 2018, up from Rmb17m a year according to people close to the deal. CanSino’s share price has almost doubled
before. The company sold 180m primary shares, since its debut on March 28, closing at
So-Young counts Tencent Holdings, CDH or 18% of the enlarged share capital, at HK$42.20 last Wednesday, up 92% from the
Investments, Trustbridge Partners and Apax HK$1.23 each, versus the range of HK$1.12– offer price of HK$22.00 a share.
Partners among its shareholders. $1.32. The company fully exercised an
Deutsche Bank and CICC are the The books were multiple times covered, overallotment option of 4.45m shares,
underwriters of the float. with participation from long-only, strategic representing about 7.8% of the base deal, at
buyers, hedge funds and high-net-worth the issue price of HK$22 apiece. The base
› CHINA NEW HIGHER EDUCATION TOPS UP investors, according to one of the people. deal comprised 57.2m shares.
There was a good mix of international and Tianjin-based CanSino, established in
Hong Kong-listed CHINA NEW HIGHER EDUCATION domestic investors. 2009, is developing 15 vaccine candidates
GROUP has raised HK$393m from a top-up There is an overallotment option of 15% in 12 disease areas. It has three near-
placement after pricing the deal at HK$3.57 of the base deal. commercial assets covering meningococcal
a share. The shares are slated to be listed on April diseases and the Ebola virus.
The company sold 110m primary shares, 16.Cornerstone investors Li Weiwei and Yao CLSA and Morgan Stanley are the sponsors.
or 7.1% of the enlarged share capital, at a Shuobin each committed HK$10m to the
discount of 9.2% to the pre-deal close of deal. › CSRC RESUMES REVIEW OF GYT
HK$3.93 on April 9. Most of the proceeds will be used
The deal was marketed in an indicative to strengthen the company’s R&D and The China Securities Regulatory
price range of HK$3.54–$3.64 each. marketing capabilities, as well as to acquire Commission has resumed its review of the
The books were oversubscribed multiple other games businesses and expand into proposed A-share IPO of Hong Kong-listed
times with participation from international overseas markets. The remainder will be GUANGDONG YUEYUN TRANSPORTATION, according
institutions and existing shareholders. used for general corporate purposes and to an announcement from the company.
Demand mainly came from Asia. working capital. The review was suspended on February
There is a 60-day lock-up on the company Guotai Junan International is the sole 18 because of an ongoing investigation
and the top-up vendor. sponsor of the deal. by the CSRC of Beijing China Enterprise
Proceeds will be used for debt repayment Appraisals, which had provided the
and general corporate purposes. › ZHONGGU LOGISTICS PLANS IPO company an asset valuation report in 2012.
CLSA is the sole placing agent. According to local media reports, China
SHANGHAI ZHONGGU LOGISTICS, a container Enterprise allegedly breached securities
› HANSOH PHARMA RE-FILES HK IPO shipping company specialising in the laws and regulations at the time of the
domestic Chinese market, plans to raise acquisition of Advision Media by Guangdong
HANSOH PHARMACEUTICAL GROUPhas refiled an Rmb1.5bn from a proposed Shanghai IPO. Guangzhou Daily Media in 2014.
application for a Hong Kong IPO of about The company is offering 81.9m A-shares, The bus service provider filed for a
US$1bn and aims to list by the summer, or not less than 10% of its enlarged capital. proposed Shenzhen IPO last September.

28 International Financing Review Asia April 13 2019


It plans to sell 88.9m A-shares to raise Citic Securities is the sponsor. stock slippage at 5% and bond floor at 98.8.
Rmb1bn. Citic Securities is the sponsor. The other three companies which DBS, HSBC and Nomura were the joint
Yueyun Transportation shares closed at cleared the hearing are QINGDAO HUICHENG bookrunners.
HK$3.22 on April 11, up 1.9%. ENVIRONMENTAL TECHNOLOGY (Rmb348m), The EB traded at 100.6/100.8 in the
The China Securities Regulatory are Zhong De Securities, Haitong Securities and
Commission has given final IPO approvals Yingda Securities, respectively. Shanghai-listed CHINA NATIONAL NUCLEAR POWER
to three companies with a combined SUZHOU PLANNING & DESIGN RESEARCH INSTITUTE plans to issue a six-year convertible bond to
fundraising target of Rmb2.5bn. was rejected at that hearing. It plans raise Rmb7.8bn.
LAKALA PAYMENT, backed by Hong Kong- to raise Rmb270m from a ChiNext IPO. Books will open on April 15.
listed Lenovo Group, has the largest target Soochow Securities is the sponsor. The CB will pay a coupon of 0.2% in year
of the three aspirants. The Chinese third- one before stepping up to 2.0% in year six.
party payment company aims to raise › YUEXIU REIT EB GOES LOW The initial conversion price has been set at
Rmb1.3bn from a proposed Shenzhen Rmb6.32, representing a discount of 0.15%
ChiNext IPO by issuing 40.01m A-shares, or Yuexiu Property has raised HK$1.1bn from to the company’s closing price of Rmb6.33
10% of its enlarged capital. the sale of a bond exchangeable into shares on April 10.
The company cut its fundraising target of YUEXIU REAL ESTATE INVESTMENT TRUST. The CB has a AAA rating from United
from Rmb2bn, according to its prospectus. The 363-day EB was marketed at a Ratings.
Proceeds will be used to upgrade coupon/yield-to-maturity of 1%–2% and China National Nuclear Corporation
online payment channels and offline POS exchange premium of 2.5%–5.0%. holds a 70.4% stake in the company and
machines. It was priced at a 1.875% coupon/yield-to- has committed to subscribe to Rmb5.4bn or
According to its pre-prospectus, Lakala’s maturity and a 2.5% exchange premium. 69% of the CB.
net profit was Rmb606m in 2018 on The EB was sold at attractive terms for The state-owned company will use the
revenue of Rmb5.7bn. This compares with investors after a few REIT equity-linked proceeds to expand two nuclear power
net profits of Rmb464m and Rmb326m on deals in Asia Pacific had to be reoffered plants in the coastal provinces of Jiangsu
revenues of Rmb2.8bn and Rmb2.6bn in below par to attract demand. and Fujian.
2017 and 2016, respectively. Two weeks ago, Keppel Real Estate Its shares closed at Rmb6.33 on April 11,
The company is set to conduct pricing Investment Trust reoffered a S$200m unchanged from the previous day.
consultation on April 10 and 11. (US$147m) five-year put-three CB at 98.5. In Citic Securities is the sponsor of the deal
The IPO price of the offer will be March, ASX-listed REIT Dexus had to reoffer and joint bookrunner with CICC.
announced on April 12 and books will open a A$425m (US$302m) issue at 99.
for a day on April 16. Link REIT, which sold a HK$4bn Green › SKYWORTH LAUNCHES SIX-YEAR CB
China Securities is the sponsor. CB a week earlier than Dexus, was believed
NANJING CHERVON AUTO PRECISION TECHNOLOGY, to have exhausted most of the demand for Shenzhen-listed SKYWORTH DIGITAL plans to
an automotive key component REIT paper. open the books for a Rmb1.04bn six-year
manufacturer, and wind turbine producer “We have too many REIT deals out there convertible bond on April 15.
ZHEJIANG WINDEY plan Shanghai and Shenzhen that are not working. We need something The CB will pay a coupon of 0.4% in year
ChiNext listings to raise Rmb651m and that works well for the issuers and one before stepping up to 4.0% in year six.
Rmb590m, respectively. CICC and Caitong investors,” said a person close to the Yuexiu The initial conversion price has been set at
Securities are their respective sponsors. deal. Rmb11.56, representing a discount of 0.3%
Yuexiu Property needs to trim its position to the company’s closing price of Rmb11.60
› FOUR CLEAR CSRC IPO HEARING in Yuexiu REIT and an EB with such a low last Wednesday.
exchange premium basically means a very The CB has a AA rating from China
Four out of five companies attending a high chance of conversion. An EB also Chengxin Securities Rating.
China Securities Regulatory Commission allows the issuer to offload its position at a The multimedia terminal manufacturer
hearing on April 11 were cleared for premium to market prices. will use the proceeds to upgrade TV
A-shares IPOs worth a combined Rmb9.2bn. In an announcement, Yuexiu Property terminal and intelligent driving assistance
The fundraising target of NINGXIA BAOFENG said the EB is an attractive way to dispose system projects.
ENERGY GROUP is the highest among the five. of a certain number of units in Yuexiu Its shares were down 1.38% at Rmb11.44
The coal chemicals producer plans to REIT as it is expected to receive additional on Thursday afternoon.
raise Rmb8bn from a proposed Shanghai units from the REIT in the form of deferred Citic Securities is the sponsor.
IPO, issuing up to 733m A-shares, or not consideration units in connection with the
less than 10% of its enlarged capital. sale of Guangzhou International Finance › SHENNAN CIRCUITS PLANS SIX-YEAR CB
It plans to use Rmb7.4bn of the proceeds Center to the REIT in 2012.
to upgrade a coke gasification production The stake which Yuexiu Property, SHENNAN CIRCUITS, a manufacturer of printed
unit and Rmb600m to repay bank loans. together with its subsidiaries, holds in circuit boards, plans to offer a Rmb1.5bn
Baofeng Energy posted a net profit of Yuexiu REIT will be lowered to 30.2% from six-year convertible bond.
Rmb3.7bn in 2018, up 26% from a year 36.4% if the EB is fully exchanged. The Shenzhen-listed company will use
earlier, according to a filing. The books were about three times the proceeds on a printed circuit board
Its controlling shareholder and covered with around 30 investors investment project and to replenish
chairman of the board Dang Yanbao also participating. The top 10 investors took working capital.
controls Hong Kong-listed China Baofeng about 75% of the deal. The CB proposal still needs approval
(International). Credit spread was assumed at 120bp, from shareholders.

International Financing Review Asia April 13 2019 29

Home Credit Group launches €650m refi
„ Loans Multi-national consumer finance company taps banks in Asia and Europe

Netherlands-based financial services provider 35% of the respective margins and have a companies operating in China, Vietnam,
HOME CREDIT GROUP launched a €650m one-year extension option. The entire deal India, Indonesia, the Philippines, Russia,
(US$733m) bullet term loan last Monday. has a €200m greenshoe option. Kazakhstan, the Czech Republic, Slovakia
HSBC is the global coordinator and A bank presentation will be held in Prague and the US.
mandated lead arranger and bookrunner, on April 16. Commitments are due by May 10. Last October, Home Credit Group replaced
while Goldman Sachs International, ING Funds are for refinancing a €650m facility Home Credit BV as the issuer of a Kc1.998bn
Bank and Societe Generale are MLABs of the raised in June 2017 and to fund equity (US$88m) bond due in 2020.
financing, which is split between a two-year injections into Home Credit Group’s Asian The Asian operations of Home Credit Group
tranche (tranche A) and a three-year portion subsidiaries. are also regular borrowers in the loan market.
(tranche B). Home Credit BV, a Netherlands- In February, Tianjin-based Home Credit
The interest margins are 350bp and incorporated subsidiary of Home Credit Consumer Finance launched a one-year term
380bp over three-month Euribor for tranches Group, raised the €650m two-year term loan loan of up to Rmb1.8bn (then US$268m).
A and B, respectively. in June 2017 from 16 lenders, including a few In the same month, Home Credit Vietnam
Banks have been invited to join tranche A banks in Asia, according to LPC data. The Finance launched a US$50m three-year term
or B or both tranches with commitments of MLABs were HSBC, Industrial & Commercial loan.
€90m or more for the MLA title, €51m–€89m Bank of China, ING and SG. The facility pays Home Credit Indonesia made its debut in
for the lead arranger title and €50m or less an interest margin of 400bp over Euribor and the syndicated loan markets in January with a
for the arranger title. offered a top-level upfront fee of 100bp. Rp800bn (then US$57m) one-year loan.
Tranche A pays upfront fees of 100bp Last year, Home Credit Group became the Last October, HC Consumer Finance
(MLAs), 75bp (lead arrangers) and 35bp ultimate holding company of Home Credit Philippines signed a Ps6.5bn (US$124m)
(arrangers). Portion B offers fees of 125bp, group companies, which it holds through one-year term loan with eight banks.
97.5bp and 47.5bp for the respective Home Credit BV, the previous ultimate European investment company PPF Group
commitment levels. holding company of the group. The Home holds 88.62% of Home Credit Group.
Both tranches pay commitment fees of Credit group comprises consumer finance APPLE LAM

› XIANHE PLANS SIX-YEAR CB over US$2.8bn final orders. Mizuho Securities and Morgan Stanley were
A US$750m 3.250% five-year tranche and joint bookrunners.
Chinese paper manufacturer XIANHE has a US$750m 3.625% 10-year tranche were
said it plans to issue a Rmb1.25bn six-year priced at Treasuries plus 95bp and 120bp, › IFC DEVELOPMENT PRINTS 10-YEAR
convertible bond. The initial conversion respectively, inside initial guidance of
price will be not less than the average 115bp and 145bp area. IFC DEVELOPMENT, rated A2/A (Moody’s/S&P),
A-share price in the 20 trading days before The five-year tranche attracted final has priced US$500m senior unsecured notes
the final CB prospectus is issued, it said. orders of over US$1.4bn from 90 accounts. after drawing over US$1.1bn final orders
Xianhe produces speciality paper, pulp, Asia took 38% of the notes, the US 40% and from 79 accounts.
paper products, and relevant chemical Europe 22%. By investor type, 36% went to The 3.625% 10-year bonds were priced at
additives. It will use the proceeds on a new asset managers and fund managers, 36% 98.933 to yield 3.754%, or Treasuries plus
material paper products and to replenish to banks, 14% to insurers, pensions and 125bp, well inside initial guidance of 145bp
working capital. central banks, 12% to corporate treasury, area.
The company raised Rmb583m from a and 2% to private banks. IFC Development (Corporate Treasury)
Shanghai IPO last April. Final orders for the 10-year tranche is the issuer and IFC Development is the
The shares of the company opened at were over US$1.4bn from 85 accounts. guarantor.
Rmb19.19 on April 10, down 2%. The CB Asia took 36% of the notes, the US 34% and The Reg S issue has expected ratings of
proposal needs approval from shareholders. Europe 30%. By investor type, 45% went to A2/A (Moody’s/S&P).
asset managers and fund managers, 13% Asia took 94% of the notes and Europe
to banks, 38% to insurers, pensions and 6%. By investor type. 51% went to fund
central banks, 3% to corporate treasury, and managers, 32% to banks, 10% to insurers
1% to private banks. and the public sector, and 7% to private
HONG KONG CK Hutchison International (19) Limited banks and corporates.
is the issuer and the Hong Kong-listed IFC Development is a joint venture
parent company is the guarantor. of Sun Hung Kai Properties, Henderson
DEBT CAPITAL MARKETS The 144A/Reg S issue has expected Land Development and Hong Kong and
ratings of A2/A/A–, on par with the China Gas. Its principal asset is the IFC
› CK HUTCHISON PRINTS DUAL-TRANCHE guarantor. commercial complex in Hong Kong’s
Proceeds will be used for debt Central waterfront district.
Hong Kong conglomerate CK HUTCHISON refinancing and general corporate Proceeds from the bond offering will
HOLDINGShas priced US$1.5bn dual-tranche purposes, including capital expenditure. be used to refinance borrowings and for
senior unsecured bonds after drawing Citigroup, Credit Agricole, Goldman Sachs, general corporate purposes.

30 International Financing Review Asia April 13 2019


Longreach seeks funding to buy stake

„ Loans Hong Kong-based PE firm taps loan for purchase of stake in medical devices manufacturer

Hong Kong-based private equity firm top-level all-in pricing of 416.9bp based on designs the group’s products and develops
Longreach Group has launched a US$42.5m an upfront fee of 150bp and lead arrangers manufacturing processes for new products.
five-year facility to back its acquisition with tickets of US$5m–$9.5m for an all-in of Longreach Group, which also has
of a majority stake in medical devices 402.9bp through a fee of 100bp. operations in Tokyo, invests in the
manufacturer QUASAR ENGINEERING. Commitments are due by May 10. technology, food and beverage, business
Mandated lead arranger and bookrunner T Tranche A was for financing the acquisition, process outsourcing, manufacturing, financial
aishin International Bank has fully underwritten which was completed on April 2, and tranche and logistics sectors in Japan and Greater
the deal. It pre-funded the facility on April 2 B is for general corporate purposes. China. It is also a shareholder of EnTie
after signing it on January 30. The family of Israeli entrepreneur and Commercial Bank.
The deal comprises a US$38m amortising Quasar Engineering’s founder, Boaz Amitai, In February 2015, Longreach Group
term loan (tranche A) and a US$4.5m has retained a minority stake in the company. raised a six-year loan of about ¥15bn (then
revolving credit facility (tranche B). It pays an Established in Hong Kong in 1988, Quasar US$126m) to support its buyout of Japanese
interest margin of 375bp over Libor and has a Engineering makes medical devices such as bridal jewellery maker Primo Japan. MLAB
remaining blended average life of 3.58 years. cardiovascular diagnostic and therapeutic Mizuho Bank brought three banks into
Banks have been invited to join tranches catheters. It has a factory in Shenzhen and the deal, which pays an interest margin of
A and B on a pro-rata basis as MLAs with another in Dongguan. QIL Engineering, slightly more than 200bp over yen Libor.
commitments of US$10m or more for a the company’s subsidiary based in Israel, APPLE LAM

The company’s US$500m 2.375% bonds arrangers and bookrunners StanChart and and an average life of 4.6075 years.
are due next month. United Overseas Bank on the senior loan Funds are to refinance a HK$3.15bn
Bank of China, DBS Bank, HSBC, Mizuho and are expected to be substituted into the five-year term loan signed in December
Securities and Morgan Stanley were joint deal in May. 2016, which paid a lower all-in pricing of
global coordinators and joint bookrunners The senior loan paid a top-level all-in 150.75bp based on a margin of 140bp over
on the transaction. They were also joint pricing of 168bp based on an interest margin Hibor and an average life of 4.65 years.
lead managers with SMBC Nikko. of 130bp over Hibor. The target properties Both deals are secured by Cheung Kei
form the security for the financing. Center in Hung Hom.
The borrower is Harmony Lotus, which is Hang Seng Bank is the coordinator of the
SYNDICATED LOANS incorporated in Hong Kong. latest club deal, which is ongoing. The
The two sponsors announced that the borrower is CHEUNG KEI CENTER.
› LOAN ADDED FOR CITYPLAZA BUY HK$15bn acquisition was completed last Repayments will take place through 17
Thursday. quarterly instalments after a year’s grace
Private equity firm GAW CAPITAL PARTNERS Hong Kong-based Gaw Capital is focussed period: 1% (12th, 15th, 18th, 21st, 24th,
and HENGLI GROUP have signed a HK$1.57bn on real estate, while Hengli Group develops 27th, 30th, 33rd, 36th and 39th months),
(US$200m) three-year mezzanine loan to hotels, residential and commercial 2% (42nd, 45th, 48th, 51st, 54th and 57th
partially finance their acquisition of office properties, refines oil and produces textiles. months) and 78% (60th month).
towers Cityplaza Three and Four in Hong Mandated lead arranger and bookrunner
Kong’s Taikoo district. › CHEUNG KEI PAYS UP ON FIVE-YEAR CLUB CMB Wing Lung Bank and three other
A group of investors including Standard banks participated in the 2016 loan, which
Chartered, ICBC International and individual Shenzhen-headquartered Cheung Kei Group is comprised a HK$1.8bn portion for buying
investors provided the mezz financing last offering higher pricing for its HK$4.615bn five- the property – then known as the East
week. It complements a HK$8.33bn three- year club loan than it did for a loan in 2016. Office Tower and the East Retail Villa of One
year leveraged buyout senior facility that The latest facility offers all-in pricing HarbourGate – for HK$4.5bn from Wheelock
closed last month. of 190.9bp based on an interest margin of Properties (Hong Kong), while the remaining
Ten banks joined mandated lead 180bp over Hibor, an upfront fee of 50bp HK$1.35bn was for working capital.


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International Financing Review Asia April 13 2019 31

The property was renamed Cheung Kei five-year term loan of the same size, which Wheelock Properties (Singapore). Wheelock
Center after the acquisition was completed. had been originally signed in June 2015. Properties Singapore delisted from the SGX
Cheung Kei Group, a financial and Sole MLAB Credit Agricole CIB brought in in October 2018 and Wheelock & Co owned
property investment company owned nine new banks and six existing lenders. about 97% of the Singaporean company at
by tycoon Chen Hongtian, has invested The deal was extended to mature in June the end of 2018.
in properties in Hong Kong, Shenzhen, 2023 from June 2020 and the all-in pricing Wharf Holdings’ wholly owned unit
Shanghai, Foshan, Zhuhai and London. was slashed to around 110bp over Hibor Wharf Finance completed a HK$8bn five-
from around 200bp. Three Hong Kong year facility last month. MLABs DBS Bank,
› NEW WORLD CHINA LAND SEEKS LOAN hotels are providing security for that deal. Mizuho and StanChart brought in four
banks, including SMBC that joined as an
Property developer NEW WORLD CHINA LAND, the › WHEELOCK CLOSES CLUB MLAB. The top-level all-in pricing was 90bp
mainland Chinese property arm of Hong based on a margin of 80bp over Hibor.
Kong-listed New World Development, has WHEELOCK FINANCE, a wholly owned unit
launched an unsecured HK$4.5bn facility. of Hong Kong-listed Wheelock & Co, › JUNEYAO AIRLINES LAUNCHES LOAN
New World Development is providing a has completed a HK$2bn five-year
guarantee for the loan, which is mainly for sustainability-linked facility, according to a Shanghai-listed Juneyao Airlines has
refinancing. press release on April 4. launched a HK$1.8bn three-year term loan.
China Construction Bank (Asia) is the BNP Paribas and Mizuho Bank signed the The company is the guarantor, while its
mandated lead arranger and bookrunner of borrowing, which is equally split into a indirect wholly owned subsidiary SHANGHAI
the financing, which comprises a HK$1.5bn term loan and revolving credit facility, JUNEYAO AIRLINE HONG KONG is the borrower.
three-year bullet term loan, a HK$1.5bn as a two-bank club on March 29. The two Standard Chartered is the mandated lead
five-year term loan and a HK$1.5bn five- lenders provided HK$1bn each. arranger and bookrunner of the financing,
year revolving credit facility. The MLAB is According to the press release, both which pays an interest margin of 160bp
not syndicating the five-year tranches. banks received the mandated lead arranger over Hibor and has an average life of 2.5
The three-year tranche pays an interest and bookrunner title, while BNP is also the years.
margin of 85bp over Hibor. Banks have sustainability coordinator and facility agent. Banks have been invited to join as
been invited to join this portion as lead Funds are for general corporate purposes. MLAs with tickets of HK$300m or more
arrangers with commitments of HK$300m The borrower’s environmental, social for a top-level all-in pricing of 185bp
or more for a top-level all-in pricing of and governance performance will be based on an upfront fee of 62.5bp, as lead
103bp based on an upfront fee of 54bp or assessed by Sustainalytics, a provider of ESG arrangers with HK$200m–$290m for an
as arrangers with HK$100m–$290m for research and ratings. all-in of 180bp through a fee of 50bp and
an all-in of 101bp through a fee of 48bp. Wheelock & Co raised a HK$5.8bn five- as arrangers with HK$100m–$190m for an
Commitments are due by April 18. year construction loan in June 2016 for all-in of 175bp based on a 37.5bp fee.
The entire facility can be increased up to developing the ninth phase of MTR Corp’s A site visit to Shanghai will be held on April
HK$6bn. Lohas Park residential development in Hong 16 and commitments are due by May 31.
New World China Land raised a Kong’s Tseung Kwan O district. The self- Headquartered in Shanghai, the
HK$4.5bn term loan in June 2015. MLABs arranged club loan, which pays an interest privately owned guarantor operates short-
Bank of China Hong Kong, DBS and HSBC margin of 90bp over Hibor, attracted Bank of haul flights between Shanghai and Hong
brought in 12 banks. The three-year China, Bank of East Asia, China Construction Kong, Macau, Taiwan, Korea, Japan and
tranche of that deal paid a margin of 185bp Bank, Standard Chartered and Sumitomo Singapore.
over Hibor, while the five-year portion pays Mitsui Banking Corp. Juneyao Airlines is about 63%-owned
a margin of 215bp over Hibor. The blended Headquartered in Hong Kong, Wheelock by Shanghai Juneyao (Group), which
all-in pricing was 220bp. & Co mainly develops properties in also invests in the financial, education,
In September 2018, Hotelier Finance Hong Kong and invests in and develops technology, real estate and food and
– a 50:50 joint venture between New properties in Singapore. Its Hong Kong- beverage sectors. Juneyao Group also
World Development and Abu Dhabi listed subsidiaries include Wharf (Holdings) owns Guangzhou-based budget airline 9
Investment Authority – closed a HK$9.25bn and Wharf Real Estate Investment, while Air that operates domestic flights within
amendment-and-extension exercise of a its other units are Wheelock Properties and China.



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32 International Financing Review Asia April 13 2019


high-cost borrowings through its Fund managers and insurers bought 46%
proposed senior unsecured notes of up to of the notes, banks 42%, private banks 8%
INDIA US$250m. and the the public sector took up the rest.
S&P said the stable outlook reflects its Guidance was tightened from Treasuries
expectation that Eros’ adequate liquidity plus 210bp area.
DEBT CAPITAL MARKETS post refinancing and increasing share of The privately owned Indian lender’s Reg
recurring revenue from streaming service S notes have ratings on par with the Baa3
› DOLLAR IS IN THE AIR FOR EROS Eros Now will temper the impact of volatile (Moody’s) rated issuer.
operating cashflows and content spending Bank of America Merrill Lynch, Barclays,
Bollywood film producer and distributor over the next 12-24 months. Citigroup, CLSA, HSBC, JP Morgan and
EROS INTERNATIONAL has hired Barclays and Eros accounts for roughly 30% of Standard Chartered were joint bookrunners.
Citigroup as joint lead managers to arrange Bollywood box-office collections and about
fixed income investor meetings and calls 40% of all Indian language films released in › HDFC SELLS BONDS FOR INFRASTRUCTURE
in Hong Kong, Singapore, London and the theatres in the UK and the US, according to
United States. the rating agency. India’s HDFC BANK is targeting up to Rs500bn
A US dollar 144A/Reg S note offering may (US$7.1bn) from perpetual bonds, Tier 2
follow, subject to market conditions. › INDUSIND SETS PRIVATE BENCHMARK bonds and long-term bonds to be used for
The Indian company has expected infrastructure and affordable housing,
corporate ratings of B1/B+ (Moody’s/S&P) INDUSIND BANK,acting through its GIFT City according to a filing on the exchanges.
with a stable outlook. branch, priced a US$400m three-year India’s largest private sector bank plans
In a press release, S&P said its 3.875% bond at Treasuries plus 185bp. to raise the funds in one or more tranches
preliminary B+ rating on Eros is Orders exceeded US$1.4bn from 130 within the next year.
predicated on the company’s refinancing investors. Asia bought 66% of the notes, and The bank’s board will consider the
of its upcoming maturities and other the rest went to EMEA. fundraising plan on April 20.

Vedanta continues Indian HY spree

„ Bonds Strong backdrop helps another junk-rated company slash new issue concessions

VEDANTA RESOURCES sold a US$1bn dual- He also brushed off concerns of a crowded Vedanta’s deal comes as a flurry of Indian
tranche bond last Thursday despite growing maturity schedule in 2023, given that the high-yield deals have hit the market to take
concerns of aggressive pricing on recent new bonds mature or become callable a advantage of regulatory changes that made
Indian high-yield deals. little more than a month before a US$500m it easier for the country’s borrowers to go
The 144A/Reg S deal comprised a maturity on May 31. The banker said the offshore.
US$400m four-year note and a US$600m company may consider liability management JSW Steel printed last week, while Eros
seven-year non-call four that priced at par to options, as it has done in the past. International and Shriram Transport Finance
yield 8% and 9.25%, respectively. “The focus of this exercise was really to have also mandated banks for proposed US
Early responses were mixed. A Hong-Kong manage financing costs,” he said. dollar offerings.
based investor told IFR during bookbuilding Another investor said that although he But the pace of tightly priced deals raises
on Thursday that initial guidance of 8.25% owned other Vedanta bonds, he decided not the risk of more investor pushback in the
area and 9.375% area offered minimal new to buy the new issue because of concerns future.
issue concessions. about the structure. He was also irritated “We feel the price levels for Indian high-
But increasing appetite for diversification by Vedanta’s recent decision to buy a stake yield companies are at tight levels, similar to
from global funds overrode concerns over in Anglo-American from Volcan, the family those in 2014,” said Dhiraj Bajaj, head of Asia
price, helping the Indian resources company trust of Vedanta founder and chairman Anil credit at Lombard Odier.
print tight to its secondary curve. Agarwal. “As deal supply from India increases,
A banker on the deal said the 2023s still Moody’s changed the company’s outlook investors will pick and demand a premium.”
offered one-eighth of a percent in new issue to negative from stable in February, citing Vedanta Resources Finance II is the
concessions, based on the company’s 7.125% the heightened risk of cash movement issuer and a wholly owned subsidiary
May 2023s which were trading around outside Vedanta following a US$561m of Vedanta Resources, which will act as
7.6% on April 4 when the mandate was structured payment by the company’s guarantor.
announced. He admitted that the 7NC4s paid operating subsidiary to ultimate The notes have expected ratings of B2/
a minimal concession, based on calculations shareholder Volcan. B+ (Moody’s/S&P). The guarantor is rated
that drew a two-year extension from its The rating agency added that its Ba3/negative by Moody’s and B+/negative
existing August 2024s. expectations for underlying operating by S&P.
“There’s not much supply out of India, earnings have been lowered, which will lead Distribution statistics were not available at
compared to what we have seen from to elevated leverage for the ratings. the time of writing.
China,” said the banker. “If investors want Moody’s did say, however, that the latest Credit Suisse, JP Morgan and Standard
diversification they don’t have a choice. It also offering proactively refinances Vedanta’s Chartered Bank were joint global
helps that Indian names are well regarded amortising term debt maturities with a long- coordinators, joint lead managers and joint
among global investors, particularly the big term bond with bullet repayment, which bookrunners.
corporations.” further reduces its cost of debt. FRANCES YOON

International Financing Review Asia April 13 2019 33

JSW Steel cuts through picky HY market
„ Bonds Five-year draws strong demand despite pushback on some high-yield offerings from India

JSW STEEL last Wednesday priced a US$500m and their ability to price the instrument including Chinese investors.
five-year senior unsecured bond offering at under the 6% handle,” said Amrish Baliga, “Yields are tight, but in a liquid
par to yield 5.95%, having tightened from managing director and head of financing environment, 6% has become the new 8%,”
initial guidance of 6.25% area. from Deutsche Bank. said the second source. “It’s also a proper
Orders were over US$920m from 130 The bonds have expected ratings of Ba2/ size and so it will be liquid in secondaries.”
accounts, a solid result, despite signs that BB (Moody’s/Fitch), in line with the issuer. Asian investors took 57% of the Reg S
investor appetite for some Indian high-yield GMR Hyderabad’s bonds, rated a notch bonds, EMEA accounts 36% and US offshore
deals has been cooling lately. higher at BB+/BB+ (S&P/Fitch), were quoted accounts 7%. The bonds were bid at a cash
For instance, GMR Hyderabad at 5.5% in secondary trading, providing a price of 100.15 on Friday.
International Airport fell short of its pricing reference. By investor type, funds booked 81%, private
US$350m target size and priced at the Bankers said with so many Indian high- banks 10%, insurers and pension funds a
higher end of guidance in its US$300m five- yield issuers coming to market lately, combined 5%, and banks 4%.
year deal priced at 5.375% on April 3. investors could afford to be selective. Deutsche Bank, ANZ, BNP Paribas,
“In spite of the international debt A second source noted that JSW’s bonds Citigroup, Credit Suisse, First Abu Dhabi
capital markets opening up, we have had been steady performers in secondary Bank, JP Morgan, Mizuho, SBI and Standard
seen instances of investor pushback on trading recently, even as some others Chartered were joint bookrunners.
price and tenor which wasn’t evident on fell below a cash price of 90, increasing DANIEL STANTON, KRISHNA MERCHANT,
oversubscription levels for JSW Steel the credit’s appeal to real-money funds, FRANCES YOON

› JSW STEEL READIES RUPEE COMEBACK said a source aware of the developments. year tenors, payable monthly. The coupons
JSW Steel still needs to raise funds to are 9.50%, 9.75% and 10.00%, respectively,
JSW STEEL is planning to return to the buy the stressed asset, so it will be looking for same tenors, payable annually.
domestic bond market after a gap of four at all funding options including domestic Muthoot is targeting Rs1.5bn, plus a
years to issue a Rs30bn three-year notes and offshore bonds and equity financing, greenshoe option of the same amount.
through a special purpose vehicle for the according to a source. Edelweiss Financial Services is the lead
acquisition of Bhushan Power & Steel, In the offshore market, JSW Steel manager for the issue.
according to sources aware of the plans. recently raised US$500m from five-year Crisil has assigned a AA rating to the
The deal will mark the first time that dollar bonds at par to yield 5.95%. notes.
rupee bonds have been sold to acquire JSW Steel is yet to make an official
stressed assets under India’s insolvency announcement on the planned rupee bond › PFC SCRAPS TWO-PART BOND ISSUE
and bankruptcy code. Bhushan Power was sale.
among the first companies referred by the POWER FINANCE CORP scrapped the sale of
Reserve Bank of India to a bankruptcy court › L&T RETURNS AFTER NEARLY FOUR YEARS Rs40bn two-part bonds after it did not get
for a debt resolution process under the new bids at the desired levels, according to
insolvency law. Indian industrial conglomerate LARSEN & market sources.
Details on the exact structure of the TOUBRO is planning to raise up to Rs15bn The state-owned issuer was seeking bids
deal have yet to be disclosed, but JSW from three-year bonds at 7.87%, according for three-year and five-year tranches on April
Steel will issue the bonds through an SPV to a market source. 8. It was targeting Rs5bn, plus a greenshoe
or a holding company that will part-fund The company is coming to the market option of Rs15bn, from each tranche.
the acquisition, sources said. The SPV will after nearly four years. It last raised Rs10bn Crisil, Icra and Care assigned AAA ratings
eventually be merged with JSW Steel. from five-year bonds at 8.4% in September to the bonds.
“Investors will have ultimate recourse to 2015. The issuer is yet to make an official
JSW Steel because of its creditworthiness Crisil has assigned a AAA rating to the announcement on the withdrawal of the
and to an extent will not be exposed to the non-convertible debentures of L&T. bond sale.
risk at Bhushan Power which is a weaker Axis Bank is heard to be the arranger for On March 27, PFC raised Rs10bn from
credit,” a market source said. the deal. Tier 2 bonds at 8.98%.
JSW Steel recently raised US$700m from a The company is yet to make an official
five-year cash-for-steel pre-payment deal with announcement on the planned bond sale. › REC INVITES BIDS FOR 10-YEAR BONDS
global trading firm Duferco International,
under which the company will repay the loan › MUTHOOT HOMEFIN TO ISSUE BONDS REC, formerly known as Rural Electrification
with steel cargo at the end of five years. Corporation, aims to raise up to Rs20bn
The Duferco deal will help fund JSW’s MUTHOOT HOMEFIN plans to raise up to Rs3bn from 10-year bonds, according to sources
planned acquisition of Bhushan Power from a public bond issue, according to the close to the plans.
for Rs197.5bn. The bankruptcy court is prospectus on the BSE. It has asked investors to place bids on
holding a hearing for the power company’s The non-banking financial company has BSE’s electronic platform on April 15 from
operational creditors and is set to give a fixed the coupons at 9.25%, 9.50% and 9.75% 10:00am to 11:00am India time in a closed
final ruling on the acquisition this month, for two, three-year two months and five- bidding session.

34 International Financing Review Asia April 13 2019


It is eyeing Rs5bn, plus a greenshoe of SYNDICATED LOANS to-Ebitda) of mid 3x to low 4x, depending
Rs15bn. on the outcome of the open offer and the
Care, Crisil, Icra and India Ratings have › QUARTET FUNDING NIIT STAKE PURCHASE amount of debt required.
assigned AAA ratings to the notes. The underwriters could launch the loan
On March 29, REC printed Rs21.51bn Four banks are underwriting a leveraged into senior syndication before reaching
subordinated Tier 2 bonds at 8.97%. buyout loan of up to US$306m for out wider to retail lenders in general
REC is yet to make an official Baring Private Equity Asia’s purchase of syndication.
announcement on the planned bond sale. a significant stake in India’s NIIT TECHNOLOGIES. The acquisition is conditional upon
Deutsche Bank, ING Bank, Nomura and receipt of required regulatory approvals,
› SIDBI PRINTS BONDS AT 7.59% Standard Chartered are equally underwriting including anti-trust and competition
the five-year amortising loan, which clearances from the Competition
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA supports BPEA’s purchase of an initial Commission of India.
has raised Rs7.5bn from three-year six- 30% stake in NIIT Technologies and an Additionally, NIIT Technologies
month bonds at 7.59%, according to a additional 26% through an open offer. announced on April 7 its agreement to
filing on National Securities Depository BPEA and its affiliated funds agreed on acquire WHISHWORKS IT Consulting,
Limited. April 7 to buy the 56% stake for a total an IT services and consulting company
The notes have a put and call option on consideration of Rs48.90bn (US$704m) at specialising in MuleSoft and Big Data
October 7 2020. Rs1,394 per share, NIIT Technologies said technologies. NIIT Technologies will buy
Care has assigned a AAA rating to the in an announcement. BPEA is buying the a 53% stake initially, with the remaining
bonds. initial stake from parent company and equity to be acquired over the next two
On April 2, Sidbi scrapped the sale of Indian information technology giant NIIT years through pay-outs linked to financial
three-year six-month bonds before the and promoter entities. performance.
submission of bids. The loan represents a leverage (net debt- NIIT Technologies also signed an

Reliance launches part of financing

„ Loans A US$750m portion of Jio’s jumbo US$2.25bn facility not being syndicated

Conglomerate RELIANCE INDUSTRIES has or 75.5bp over yen Libor, respectively. market was in early November for a
launched into general syndication a Lenders receive the lead arranger title US$2.63bn financing for RIL that had 44
US$1.5bn-equivalent facility, which is part of for commitments of US$35m–$49m- banks participating, including 17 senior
a larger US$2.25bn jumbo financing. equivalent, the co-arranger title for tickets MLABs. That deal comprised a US$187m
ANZ, Bank of America Merrill Lynch, of US$20m–$34m-equivalent or the lead two-year and 11-month bullet loan tranche A,
Barclays, Credit Agricole CIB, DBS Bank, First manager title for US$10m–$19m-equivalent which was not syndicated, a US$966m three-
Abu Dhabi Bank, HSBC, Mizuho Bank, MUFG, for participants in either facility 1 or 2. year amortising tranche B and a US$1.48bn
Scotiabank, Standard Chartered, State Bank of For the facility 1, lead arrangers receive four-year and 11-month amortising tranche
India, Sumitomo Mitsui Banking Corp, United top-level all-in pricings of 128.5bp and C. The top-level all-in pricing was 91.5bp or
Overseas Bank and Westpac are the senior 88.5bp for the US dollar and yen tranches, 111bp based on the margin of 69bp and 90bp
mandated lead arrangers and bookrunners of respectively, based on participation fees of over Libor and remaining average lives of
the deal, which has been fully underwritten. 118.13bp and 84bp; co-arrangers get all-ins 2.792 and 4.392 years for tranches B and C,
Korea Development Bank joined the facility of 126.5bp and 86.5bp, respectively based respectively.
as SMLAB, while Taipei Fubon Commercial on fees of 107.63bp and 73.5bp; while lead A year earlier in December 2017, RIL and
Bank and Bank of China have participated managers receive all-ins of 124.5bp and Jio together raised a US$2.5bn-equivalent
as MLABs prior to the launch into general 84.5bp based on fees of 97.13bp and 63bp, refinancing with 30 banks, including 17
syndication. JP Morgan joined as MLA. respectively. MLABs. The deal was split into a 2.5-
RIL is the borrower of the US$1.5bn- For the facility 2, lead arrangers receive year loan of US$815m and €150m (then
equivalent deal, while Reliance Jio Infocomm top-level all-in pricings of 131bp and US$185m) (facility 1) for RIL, and separate
is the borrower of the remaining US$750m 91.5bp for the US dollar and yen tranches, US$1bn 4.75-year (facility 2) and US$500m
piece, which is not expected to be launched respectively, based on participation fees of 5.58-year (facility 3) portions for Jio. RIL is
into general syndication. 126.5bp and 88bp; co-arrangers get all-ins of guarantor on the Jio tranches.
RIL’s financing comprises two facilities 129bp and 89.5bp, respectively based on fees RIL’s US dollar and euro tranches paid
– facility 1 has a US$650m tranche and a of 115.5bp and 77bp; while lead managers top-level all-in pricing of 76bp and 46bp
¥38.85bn (US$350m) piece, while facility receive all-ins of 127bp and 87.5bp based on based on margins of 56bp and 37bp over
2 has a US$350m portion and ¥16.65bn fees of 104.5bp and 66bp, respectively. Libor and Euribor, respectively, and a
tranche. Bank presentations will be held in remaining average life of 2.375 years. Jio’s
The US dollar and Japanese yen Singapore on April 15, Taipei on April 17 facility 2 and facility 3 offered top-level
tranches former facility – which has an and Tokyo on April 19. The deadline for all-in pricing of 105bp and 110bp based on
average life of 5.25 years – pays interest commitments is May 17, with signing slated margins of 84bp and 92.5bp over Libor, and
margins of 106bp over Libor or 72.5bp for early June. remaining average lives of 4.33 and 5.42
over yen Libor, respectively, while the Proceeds will be used for capital years, respectively.
latter – which has an average life of 5.5 expenditure purposes. RIL is rated Baa2/BBB+/BBB−.
years – pays margins of 108bp over Libor The group’s previous visit to the loan EVELYNN LIN, CHIEN MI WONG

International Financing Review Asia April 13 2019 35

agreement to sell its entire 88.99% stake › YES BANK HOLDS NON-DEAL ROADSHOW Around Rs4bn primary shares and 17.6m
in Esri India Technologies, a geographic secondary shares were sold at Rs533–Rs538
information system software and solutions YES BANK held a non-deal roadshow in Taipei per share. The IPO is likely to be priced at
provider, to the other existing equity last Monday. the top of the price range.
shareholder Environmental Systems CTBC Bank was the coordinator of the The top of the range implies a 2020 P/E
Research Institute. exercise. multiple of 14.5, compared with the sector
NIIT Technologies provides data In September last year, Yes Bank raised average of 22.
& analytics, automation, cloud, and a US$400m three-year loan. BayernLB, Founders Inder Jaisinghani, Ajay
digital services to the banking and Commerzbank, CTBC Bank, First Abu Dhabi Jaisinghani, Ramesh Jaisinghani and
financial services, insurance, travel and Bank, Korea Development Bank, State Girdhari Jaisinghani are among the
transportation sectors. Bank of India, United Overseas Bank and vendors of the secondary shares along with
Westpac were the mandated lead arrangers International Finance Corp. IFC currently
› NTPC SAMURAI ATTRACTS ONE and bookrunners of the financing, which owns 15% of the company.
paid a top-level all-in pricing of 114.48bp The company’s revenue from operations
India’s largest power utility company, NTPC, based on an interest margin of 95bp over rose to Rs69bn in the financial year that
has signed a US$300m-equivalent 10-year Libor and an average life of 2.67 years. ended on March 31 2018, from Rs60bn
Samurai loan, attracting only Aozora Bank in Yes Bank, rated Ba1 (Moody’s), is India’s in 2017. Net profit rose to Rs3.7bn from
general syndication. (See News.) fourth-largest private sector bank in terms Rs2.3bn.
Mizuho Bank, MUFG and Sumitomo of assets. Axis, Citigroup, Edelweiss and Kotak are the
Mitsui Banking Corp were the mandated joint global coordinators and bookrunners
lead arrangers and bookrunners of the with IIFL Holdings and Yes Securities.
financing, which offered a top-level EQUITY CAPITAL MARKETS
all-in pricing of 114.5bp based on an › METROPOLIS IPO BOOKS COVERED
interest margin of 102bp over Tibor and › BAJAJ ENERGY PLANS IPO LATER IN 2019
a weighted average remaining life of 10 The books for METROPOLIS HEALTHCARE’s Rs12bn
years. BAJAJ ENERGY has filed a draft prospectus for IPO were subscribed 5.84 times when they
Pricing on the latest loan is higher than an IPO of up to Rs55bn (US$792m) and is closed on April 5.
that on a ¥39.42bn (then US$370m) facility targeting the launch for later this year. Data on the National Stock Exchange
completed in April last year. That loan The company said in the draft prospectus show the institutional tranche was covered
offered a top-level all-in pricing of 105bp that Rs52bn of primary shares and Rs3bn 8.88 times, the high-net-worth investor
based on a margin of 95bp over Tibor and secondary shares would be sold. Owner tranche 3.03 times and retail 2.21 times.
a weighted average remaining life of 10 Bajaj Power Ventures is the vendor of the The IPO was priced at the top of a Rs877–
years. It was the first unsecured decade- secondary shares. Rs880 range.
long borrowing in the offshore loan market Edelweiss, IIFL Holdings and SBI Capital are Around 13.7m secondary shares were
for an Indian credit. Mizuho, MUFG and the bookrunners and IDBI Capital is the co- sold in the IPO.
SMBC were the MLABs of the Samurai loan, bookrunner. Credit Suisse, Goldman Sachs, HDFC Bank, JM
which attracted eight lenders in general Bajaj Energy owns power capacity of Financial and Kotak are the bookrunners.
syndication. 2,430 megawatts.
Established in 1975, NTPC – formerly The company’s revenue in the financial
National Thermal Power Corp – is rated year that ended on March 31 2018 was
"AA"""¦"""¦ Rs9bn versus Rs14bn in 2017. Net profit fell
to Rs417m from Rs883m. A delay in tariff INDONESIA
› PFC SENDS RFP FOR FACILITY payments by Uttar Pradesh Power Corp and a
shortfall in fuel supplies affected earnings.
State-owned POWER FINANCE CORP has sent ReNew Power (US$1bn–$1.3bn), DEBT CAPITAL MARKETS
out a request for proposals for an up to Sembcorp Energy (Rs50bn) and Acme Solar
US$500m financing. Holdings (Rs15bn) have also announced › SEMEN INDONESIA PLANS TWO-TRANCHE
The deal, which has a US$300m IPOs, but none of them have materialised
greenshoe option, could comprise tenors because of volatile stock market conditions SEMEN INDONESIA is planning to raise Rp4.9trn
ranging from three to five years. The and a lack of investor interest in Indian (US$240m) from two-part bonds, according
borrower is also open to a Green loan. power companies. to a source close to the plans.
The deadline for proposals is April 22. The cement maker has given indicative
PFC signed a US$150m-equivalent five- › POLYCAB IPO BOOKS COVERED 52 TIMES coupon ranges of 8.50%–9.25% for a five-
year Samurai loan in January. Mizuho Bank year tranche and 8.75%–9.50% for a seven-
and MUFG are the mandated lead arrangers Wire and cable maker POLYCAB INDIA’S up to year piece.
of the bullet facility, which has been Rs13bn IPO was covered 52 times when the The company has mandated BNI, CGS-
equally pre-funded and will launch into books closed last Tuesday. CIMB, Danareksa, Mandiri and Indo Premier as
general syndication at a future date. Data on the National Stock Exchange lead arrangers.
PFC is rated Baa3/BBB–/BBB–. In show the institutional tranche was covered The books have opened and will close on
December, Moody’s put the company 92.44 times, the high-net-worth investor April 15.
on review for a downgrade, while S&P tranche 110.42 times and the retail tranche The notes are rated AA+ by Pefindo.
put it on negative watch after the Indian 4.65 times. In February, LPC reported that Semen
government approved in principle PFC’s The offering is the latest Indian IPO to Indonesia had closed a US$1.037bn loan
proposed acquisition of the government’s see its books covered ahead of the closing with eight lenders in syndication to fund
52.6% stake in REC. date. the purchase of an 80.64% shareholding

36 International Financing Review Asia April 13 2019


that Lafarge Holcim owned in Holcim SYNDICATED LOANS offered a top-level all-in pricing of 100bp
Indonesia and a mandatory tender offer for based on a margin of 90bp over Libor and
the remaining stake. › PTPN POSTPONES MAIDEN LOAN an average life of 1.625 years.
Semen Indonesia is yet to make an official The Jakarta-based company, a unit
announcement on the planned bond sale. PERKEBUNAN NUSANTARA III (PTPN) has of Bank Danamon Indonesia, provides
postponed the launch of a US$200m two- consumer financing and finance leasing
› EXIMBANK READIES MULTI-TRANCHE DEAL year debut offshore facility. services for cars, motorcycles, durable
Bank presentations were postponed to goods and other products.
INDONESIA EXIMBANK plans to raise Rp4.3trn the week of April 22. The roadshow was For full allocations, see
from bonds and sukuk in various tranches, initially scheduled for Singapore on April
according to the offer document. 10, Hong Kong on April 11, Taipei on April
It is planning to raise Rp3.86trn from six- 12 and Tokyo on April 15.
part bonds. It is eyeing Rp147bn, Rp935bn, Deutsche Bank and Sumitomo Mitsui Banking
Rp1.52trn, Rp278bn, Rp349bn, Rp625bn Corp are the mandated lead arrangers and JAPAN
from one, three, five, seven, 10 and 15-year bookrunners of the deal, which is available
tranches at 7.35%, 8.4%, 8.9%, 9.25%, 9.5% in either euros or US dollars. The interest
and 9.8%. margin is 185bp over Euribor/Libor and DEBT CAPITAL MARKETS
The bank is also targeting Rp441bn from the average life is 1.8 years. Funds are
a sukuk portion at floating and variable for working capital requirements of the › SMBC AVIATION PRINTS FIVE-YEAR NOTE
rates. It plans to raise Rp230bn, Rp145bn borrower and its subsidiaries.
and Rp66bn from one, three and five-year In March 2017, Perkebunan Nusantara V SMBC AVIATION CAPITAL last Monday priced a
tranches. raised a Rp4.866trn (US$363m) 10-year loan. US$500m five-year bond at 99.868 with a
Bahana, BCA, BNI, CGS-CIMB, Danareksa, DBS Bank Mandiri, Malayan Banking and Bank coupon of 3.55% to yield 3.579%.
Vickers, Indo Premier, and Mandiri Sekuritas are Central Asia were the MLABs on that deal, This was equivalent to Treasuries
the lead managers for the deal. which offered an interest margin of 315bp plus 125bp, the tight end of guidance
The rupiah notes are rated AAA by over Jibor, according to LPC data. of Treasuries plus 130bp, plus or minus
Pefindo. State-owned PTPN, which regularly 5bp, and inside initial price thoughts of
The deal opens on April 15 and closes on taps the Indonesian rupiah market, is a Treasuries plus 145bp area. The new issue
April 16. producer of palm, rubber, sugar and related concession was estimated at 3bp.
Recently, Indonesian Eximbank said it commodities. The deal size was capped at US$500m
was planning to raise Rp32trn from bond and orders were heard to reach US$2.3bn.
sales in up to four stages, according to a › PGN TO MANDATE BORROWING The 144A/Reg S bonds will be issued
Reuters report citing statements from the by SMBC Aviation Capital Finance, and
director. PERUSAHAAN GAS NEGARA is tipped to mandate guaranteed by the parent company. The
Bank Mandiri on a one-year new-money loan notes have expected ratings of A– by both
› OTO MULTIARTHA SETS COUPONS of about US$350m. S&P and Fitch.
The borrower’s previous offshore loan Citigroup, Credit Agricole, Goldman Sachs,
OTO MULTIARTHA has set the coupons for a was a US$650m five-year financing in JP Morgan, RBC and SMBC Nikko were
triple-tranche bond offering to raise Rp1trn, August 2014. ANZ, Citigroup, HSBC, MUFG bookrunners.
according to a source close to the plans. and Sumitomo Mitsui Banking Corp were
The car finance firm has fixed the the MLABs of the deal, which attracted › TOYOTA MOTOR CREDIT PRINTS
coupons at 7.75% for one year, 8.75% for three other lenders in general syndication.
three years and 9.25% for five years. 2ATEDû"AA"""¦"""¦ û0'.û TOYOTA MOTOR CREDIT CORP, rated Aa3/AA–
It has appointed BCA Sekuritas, Mandiri is Indonesia’s largest natural gas (Moody’s/S&P), priced a US$2bn two-part
Sekuritas, IndoPremier and Nikko Sekuritas transportation and distribution company. senior offering last Tuesday.
Indonesia as lead arrangers. A US$1.25bn 1.5-year floater priced at par
Pefindo recently affirmed a AA+ rating › ADIRA CLOSES NEW-MONEY LOAN with a coupon of three-month Libor plus
on the bonds. 15bp, tightening from initial price thoughts
Oto Multiartha is yet to make an official ADIRA DINAMIKA MULTI FINANCE has closed a of low 20s.
announcement on the planned bond sale. US$350m three-year amortising facility, A US$750m three-year fixed-rate tranche
increasing it from a targeted size of US$250m. priced at 99.937 with a coupon of 2.65% to
› WASKITA KARYA PLANS TWO-PART BONDS BNP Paribas, DBS Bank, Maybank, MUFG and yield 2.672%, equivalent to Treasuries plus
United Overseas Bank were the mandated lead 38bp. This was at the tight end of final
WASKITA KARYA is marketing dual-tranche arrangers and bookrunners of the new-money guidance of Treasuries plus 40bp, plus or
domestic bonds to raise Rp1.85trn. deal, which attracted 20 lenders in general minus 2bp, and inside IPTs of low 50s.
The state-owned developer has syndication. The signing was on April 5. Citigroup, RBC Capital Markets, Mizuho and
announced indicative coupon ranges of The borrowing paid a top-level all-in MUFG were active bookrunners for the SEC-
8.5%–9.5% for a three-year tranche and pricing of 106bp based on an interest registered deal.
9.00%–9.75% for a five-year piece, according margin of 90bp over Libor and an average
to the offer document. life of 1.625 years. Funds are for general › AFLAC JAPAN PRIVATELY PLACES PERP
The books opened on April 9 and close corporate purposes.
on April 22. The borrower’s previous loan was an AFLAC LIFE INSURANCE JAPAN, rated AA by
Bahana, BNI, Danareksa, DBS, IndoPremier increased US$300m three-year financing JCR, raised ¥30bn (US$268m) by selling
and Mandiri Sekuritas are the lead arrangers last June. ANZ, BNP, Citigroup, DBS and a perpetual non-call five in a private
of the deal. MUFG were the MLABs of the loan, which placement.

International Financing Review Asia April 13 2019 37

The bonds were issued by Aflac Japan, Of the proceeds of the new trade, ¥300bn
not by Aflac Inc, which had issued Global will be allocated to refinance bonds maturing
yen bonds in 2017 and 2018. As the issuer on May 30, and the rest will be used to MALAYSIA
converted from a branch of Aflac Inc into refinance debt maturing in September.
a legal subsidiary a year ago, the deal is Nomura underwrote 28.8% of the issue,
classified as a domestic bond offering and Daiwa 18%, SMBC Nikko 16%, Mizuho and DEBT CAPITAL MARKETS
does not have a guarantee from Aflac Inc. Mitsubishi UFJ Morgan Stanley 12% each, SBI
The PerpNC5 carries a 0.963% coupon for Securities 8%, and the rest was taken by five › MAYBANK ISLAMIC SELLS T2
the first five years, which is equivalent to other brokerages. Underwriting fees are a
93bp over yen offer-side swaps. The coupon quite rich 125bp. MAYBANK ISLAMIC has raised M$1bn
will change to a floater rate of six-month The bonds are rated A– by JCR. (US$247.7m) from the sale of 10 non-call
Libor plus 93bp if not called and will step five Islamic bonds that will qualify as Tier
up 100bp after 10 years. 2 capital.
Unlike the Global yen deal done by Aflac SYNDICATED LOANS The notes, rated AA1 by RAM, will pay
Inc, this deal was marketed in a typical 4.5%.
Japanese way. The marketing period was › JBIC BACKS TORAY'S TENCATE ACQUISITION Settlement was on April 5. Proceeds
seven trading days, a lot longer than the usual from the self-led issue were used to redeem
three or sometimes two days in international Japan Bank for International Cooperation a 4.75% Tier 2 bond that matured on the
yen deals. The marketing method, however, has signed a loan for TORAY INDUSTRIES to same day. The Islamic bank is a unit of
was not the traditional retention system but back its €930m (US$1.05bn) acquisition Malayan Banking.
the transparent Pot system. of Netherlands-based TenCate Advanced
The guidance range narrowed slowly Composites Holding, JBIC said in a
over the course of marketing. It was at statement last Tuesday.
90bp–100bp on April 3–4, then 90bp–98bp The size of the loan, which was co-financed
on April 5–8, 93bp–97bp last Tuesday, and with commercial banks, is undisclosed. NEW ZEALAND
93bp–95bp on Wednesday before landing at Last July, the world’s largest maker of
the tightest end. carbon-fibre composite materials completed
The books swelled to near ¥60bn, the acquisition of TenCate, which makes DEBT CAPITAL MARKETS
according a banker on the deal. thermoplastic prepreg, a material that
Mitsubishi UFJ Morgan Stanley, Mizuho and improves efficiency of moulding. › ADB KAURI RAISES NZ$200M
SMBC Nikko are the lead managers on the Toray last tapped the syndicated loan
deal, rated A+ by JCR. markets in March for a ¥39.8bn (then ASIAN DEVELOPMENT BANK (Aaa/AAA/AAA) priced
US$358m) loan with Sumitomo Mitsui a NZ$200m (US$136m) seven-year Kauri
› SOFTBANK GROUP SETS RETAIL RECORD Banking Corp as arranger. bond on April 5 with joint lead managers
ANZ and TD Securities.
SOFTBANK GROUP has raised ¥500bn from its › JOGMEC SIGNS ZERO-INTEREST LOAN The 2.375% April 16 2026s priced at
biggest retail bond, once again turning to 99.647922 for a yield of 2.43%, in line with
Japanese savers to lock in low-cost funding. JAPAN OIL GAS & METALS NATIONAL signed a mid-swaps plus 43bp guidance and 77.25bp
The six-year retail bonds, priced at ¥544.65bn (US$4.95bn) one-year bullet wide of the April 2025 NZGB.
par, carry a 1.64% coupon, just above the term loan last Thursday following a heavy ADB previously accessed the Kauri
mid-point of the initial guidance range of oversubscription, the state-backed company market in October 2018 with a NZ$400m
1.30%–1.90%. said in a statement. increase to its 2.875% April 28 2021 bond.
The issue underlines the continued The government-guaranteed loan was
appeal of the SoftBank brand in Japan, priced at a zero interest rate through › HEARTLAND BANKS NZ$125M
where individual investors have bankrolled conventional auctions that saw bids of up
much of its expansion in recent years. to ¥3.195trn. HEARTLAND BANK (formerly Heartland Building
The mobile phone and technology Sumitomo Mitsui Banking Corp was the Society), rated BBB (Fitch), has raised an
investment giant raised ¥700bn from agent. Drawdown is slated for April 26, and upsized NZ$125m from a five-year note
domestic retail bonds in 2013, ¥1.1trn in proceeds will be for operating funds. offer.
2014, ¥920bn in 2015, ¥400bn in 2016, JOGMEC, which visits the loan market The 3.55% April 12 2024s priced at par on
¥400bn in 2017 and ¥410bn in 2018, multiple times in a year, typically raises a April 5, at the tight end of mid-swaps plus
according to DealWatch, IFR’s sister large loan in April. The company completed 175bp–190bp guidance.
publication. Its retail offerings have a ¥393.536bn one-year term loan with a BNZ was arranger and joint lead
included both senior debt and more risky similar structure in April last year. manager with CBA, Deutsche Craigs and
25-year non-call five-subordinated paper. In February, it obtained a ¥35.989bn one- Westpac.
In addition to this, its mobile phone unit year term loan, which also priced at zero Heartland Bank previously issued a
raised ¥2.6trn from last year’s IPO, sold interest following strong demand from NZ$150m 4.5% five-year retail note in
mainly to Japanese retail buyers. lenders such as regional banks. September 2017.
38 International Financing Review Asia April 13 2019

› TOYOTA NZ PARKS NZ$100M due Thursday and have been extended to

TOYOTA FINANCE NEW ZEALAND, rated Aa3/ The borrower is also raising NZ$88m PHILIPPINES
AA– (Moody’s/S&P), priced a capped 2.71% through a revolving credit facility, pricing
NZ$100m five-year senior unsecured bond on which is expected to be the same as the
last Thursday at mid-swaps plus 88bp. first-lien term loan. SYNDICATED LOANS
The margin was at the wide end of final The acquisition was announced
83bp–88bp guidance which had been December 12 2018 and carried an equity › MONDE NISSIN UNIT WRAPS UP DEBUT
revised from the initial 82bp–92bp range. value of NZ$2.56bn.
ANZ was sole lead manager. The issuer and the debt are rated B1/B. MARLOW FOODS, a unit of Philippine food
The issuer, which raised NZ$100m from The borrower is TRADE ME GROUP (TITAN company Monde Nissin, has closed a debut
a five-year bond sale last September, has ACQUISITIONCO NEW ZEALAND). £123m (US$158m) five-year borrowing,
NZ$75m of dual-tranche notes maturing on with Asian banks largely supporting the
April 23. › SPARK EXTENDS 2017 REVOLVER deal.
Citigroup was originally mandated as sole
Telecommunications company SPARK NEW bookrunner of the dual-tranche facility,
SYNDICATED LOANS ZEALAND has extended the maturity of a before HSBC joined at the top as equal-
NZ$200m revolving credit facility it signed status arranger.
› TRADE ME CUTS PRICING ON LOAN in April 2017 by one year, the company said Six other lenders joined the deal, which
in a stock exchange filing on April 4. was syndicated on a best-efforts basis.
New Zealand-based online classified operator The new maturity of the undrawn Marlow Foods is the borrower on the
TRADE ME last Thursday increased a proposed revolver from domestic and international non-recourse financing, which carries a
term loan to US$605m from US$575m term banks is April 30 2022. The original three- letter of comfort from parent Monde Nissin.
and cut the pricing on the deal. year loan was already extended once in The deal comprises a £113m amortising
The debt will be used to support the April 2018 by a year. term loan with an average life of four years
company’s buyout by private equity firm Spark’s other loans include a NZ$100m and a £10m revolving credit facility. It
Apax Partners. three-year committed revolver from HSBC offered a top-level all-in pricing of 220bp
The upsized loan allowed the company due on November 30 2021. The facility based on an interest margin of 195bp over
to cut the size of a privately placed second- replaced NZ$100m of loans with Bank of New sterling Libor.
lien loan to NZ$276m (US$186m) from Zealand that matured in October last year. Funds will be used for capital
NZ$320m. Spark also has a NZ$200m committed expenditure, refinancing of shareholder
Guidance on the first-lien loan is now revolver with Westpac that matures on loans and general corporate purposes.
at 425bp over Libor with a 0% floor and November 30 2020, and a NZ$125m Marlow Foods owns vegetarian and vegan
discount of 99.5 after circulating in the revolver with MUFG maturing on food manufacturer Cauldron Foods and
450bp-475bp over Libor range with a 0% November 30 2022. meat substitute producer Quorn Foods,
floor and a discount of 99. The facilities from BNZ and MUFG were both of which are based in the United
The seven-year loan will have six months fully drawn as of December 31 2018 and Kingdom.
of soft call protection at 101. NZ$60m of the Westpac facility was drawn. Monde Nissin acquired Quorn Foods
Credit Suisse leads alongside Nomura, UBS, Spark Finance is the borrower of these in October 2015 from Exponent Private
Macquarie and Jefferies. Commitments were facilities. Equity and Intermediate Capital Group

Aboitiz Power signs loan for thermal assets

„ Loans Power group to increase stakes in Mariveles and Dinginin plants

ABOITIZ POWER CORP has signed an up to AC Energy’s limited partnership interests in Mariveles Coal Plant and GNPower Dinginin
US$300m five-year facility backing its GNPower Mariveles Coal Plant, the owner from Blackstone. DBS, HSBC, Maybank,
acquisition of a stake in AC Energy Holdings and operator of an operating 2x316 MW coal MUFG, Mizuho and StanChart were the
Inc’s thermal platform in the Philippines. plant in Mariveles, Bataan, and in GNPower mandated lead arrangers, bookrunners and
DBS Bank, Mizuho Bank, MUFG and Dinginin, the developer and owner of a 2x668 underwriters of the financing, which attracted
Standard Chartered are the lenders of the MW supercritical coal plant project under 11 lenders in general syndication. That loan
financing, which will be launched into construction in Dinginin, Bataan. paid a top-level all-in pricing of 126.67bp
general syndication at a later date. The agreement will increase Aboitiz based on an interest margin of 110bp over
Funds will be used to partially finance Power’s beneficial ownership in the Mariveles Libor and an average life of 1.8 years. Therma
the acquisition of a 49% voting stake and project to 78.325% and in the Dinginin Power Inc is the borrower of the financing,
60% economic stake in AA Thermal, which project to 70%. The former project has been which has a corporate guarantee from parent
is owned by AC Energy – a wholly owned operating since 2013, while the first unit of Aboitiz Power.
subsidiary of Ayala Corp. the latter project is scheduled to go online Incorporated in 1998, Aboitiz Power is the
Arlington Mariveles Netherlands Holding, this year. holding company for the Aboitiz Group’s
an affiliate of AC Energy, is the seller of AC Aboitiz Power last signed a US$650m two- investments in power generation, distribution
Energy, which is valued at US$579.2m. year bridge loan that backed its purchase of and retail electricity services.
AA Thermal’s assets initially consist of an indirect partnership interest in GNPower CHIEN MI WONG

International Financing Review Asia April 13 2019 39

for £550m. At the time, Banco de Oro The 144A/Reg S offering attracted over › UOB MAKES A SPLASH ON US T2 DEBUT
Unibank, Bank of the Philippine Islands US$2.2bn of orders from 140 accounts, with
and Metropolitan Bank & Trust Co North America taking 47%, Asia Pacific 39% Singapore’s UNITED OVERSEAS BANK (Aa1/
provided a US$650m seven-year loan to and EMEA 14%. AA–/AA–) drew considerable demand
finance the acquisition. By investor type, fund managers across the Atlantic for its first US dollar-
For full allocations, see booked 50%, insurers and pension denominated capital deal sold via 144A/
funds a combined 20%, banks 18%, Reg S format.
official institutions 8% and private UOB allocated 40% of the subordinated
banks 4%. bonds to US investors, overshadowing the
The bonds will be issued off the 35% distribution to Asia and the 25% lot
SINGAPORE Singaporean bank’s US$30bn Global MTN given to Europe.
programme and are expected to be rated The US$600m Tier 2 10-year non-call
Aa2/AA– (Moody’s/Fitch). five bond priced at Treasuries plus 150bp,
DEBT CAPITAL MARKETS Compatriot United Overseas Bank’s or 25bp inside initial price guidance. Final
dollar bonds due April 2021, rated Aa1/ pricing was seen as offering a minimal
› DBS GROUP DOES DOLLARS AA–/AA–, were seen at Treasuries plus new issue concession despite issuing at the
55bp, while National Australia Bank had tightest spread for a Basel III-compliant US
DBS GROUP HOLDINGS last Tuesday priced a May 2022 bonds, rated Aa3/AA– (Moody’s/ dollar-denominated Asian Tier 2, according
US$750m three-year senior unsecured bond S&P), at Treasuries plus 65bp, indicating to Refinitiv data.
offering at 99.946 with a coupon of 2.85% to that DBS paid little or no new issue This is the first Singapore bank Tier 2
yield 2.869%, equivalent to Treasuries plus premium. since the city state revised its bail-in rules
58bp. DBS was sole global coordinator. It was in 2018, which clarified when a bank
This was at the tight end of guidance of also joint bookrunner with Barclays, JP becomes non-viable, at which point holders
Treasuries plus 60bp, plus or minus 2bp, and Morgan, RBC Capital Markets, Societe Generale of the Tier 2 notes face a writedown in
inside initial price thoughts of 75bp area. and Wells Fargo Securities. their principal bond amount. By reducing

Olam signs incentive loans for digital growth

„ Loans Agribusiness company breaks new ground with D-loan

Singapore-headquartered agribusiness OLAM earmarked for a specific kind of investment. allow these companies to stay ahead of the
INTERNATIONAL has obtained an innovative new The financing for Olam, which refinances competition.”
type of corporate loan that links pricing to existing loans, is the first time that a credit Olam’s deal shows that the range of
the borrower’s progress towards its digital facility has been linked to the digital maturity targets around which PILs are structured is
transformation. of a borrower. expanding.
The US$350m three-year revolving credit Olam and its lenders agreed on digital Already PILs have been tied to a wide
facility is a digital loan (D-loan), a form of score targets to be reached during the life of range of goals including carbon emissions,
positive incentive loan (PIL), which rewards the financing. If Olam meets those targets, it fuel and water usage, employment,
borrowers that achieve pre-arranged targets. sees a reduction in loan pricing. renewable energy, access to affordable
The rise in PILs over the past two years This is an important financial incentive to energy, child labour, and the empowerment
has so far been dominated by credit facilities borrowers to significantly improve their digital of women.
linked to environmental, social and corporate maturity as fast as possible, said BBVA, digital In February, UK-based educational
governance goals. coordinator and facility agent on Olam’s deal. technology group Pearson agreed a
Increasing numbers of companies, Olam’s digital maturity score will be US$1.19bn sustainability-linked loan
especially in Europe, are looking to achieve determined using Boston Consulting Group’s refinancing, the first syndicated loan globally
improved terms on their corporate facilities Digital Acceleration Index methodology, with targets linked to education.
by linking pricing to pre-existing ESG assessing Olam across four digital criteria The margin on the 5+1+1-year loan
commitments. comprising business strategy driven by is linked to Pearson’s commitment to
“Positive incentive loans are really taking digital; digitising the core; new digital extend its vocational educational reach
off. Clients are busy looking at their options. growth; and enablers. internationally in support of the United
There has been a broadening away from The financing is being provided on an equal Nations’ sustainability goals, especially Goal
purely environmental and social elements basis by mandated lead arrangers BBVA, DBS 4 on education.
to more business related developments,” a Bank, First Abu Dhabi Bank, JP Morgan, Mizuho Bank of America Merrill Lynch and
senior banker said. Bank, Natixis and Standard Chartered. Barclays coordinated the RCF as
“These types of loans help communicate “We believe that companies that bookrunning mandated lead arrangers. ANZ,
a message to the world, showing companies undertake a digital transformation will be BNP Paribas, Citigroup, HSBC, JP Morgan,
moving in the right direction, while lenders the winners in their sector in the long term,” MUFG and TD Bank were mandated lead
can demonstrate their support for a Ricardo Laiseca, BBVA’s head of global arrangers.
particular strategy.” finance, said. BNP advised on the sustainability element
Like ESG-linked RCFs, D-loans are for “Digitisation translates into greater of the loan, while Barclays is facility agent.
general corporate purposes and are not competitiveness and profitability, which will ALASDAIR REILLY

40 International Financing Review Asia April 13 2019


uncertainty, the subordinated notes carry This is a less aggressive structure than that it was a going concern, but that there
lower credit risks. previous Singapore dollar perpetual non- were “material uncertainties” about the
The clarity prompted Moody’s to call five bonds, which had resets and appropriateness of that assumption.
upgrade T2 subordinated bonds issued step-ups only in year 10. For example, ST The group’s assets, with a carrying value of
by Singaporean banks to A2 from A3 last Telemedia sold S$350m 5% perpetual notes US$300.3m, are secured against bank loans,
December. in January this year with a call in year five on which certain covenants were breached in
UOB’s notes, which are expected to be but a reset and a step-up in year 10. 2017. Banks agreed to temporarily suspend
rated A2/BBB+/A+, drew over US$3bn in Fraser achieved a lower coupon and a certain debt obligations while discussions are
orders from 176 accounts. larger size than STT’s deal. However it offered being held to restructure the loans.
By investor type, fund managers took a good pick-up over the STT perpetuals, In late August last year, holders of
58%, insurers and pensions 27%, the public which were quoted at around 4%. S$100m (US$73.2m) 4.3% bonds consented
sector bought 8%, private banks and Fraser Property settled its unrated to a deferred cash payment and a debt-to-
corporates 4% and banks 3%. subordinated notes on April 11 off a S$5bn equity swap.
Citigroup, Credit Suisse, HSBC, Standard multi-currency debt issuance programme. In December, the company signed a
Chartered and UOB were joint bookrunners. Proceeds will be used for general corporate binding term-sheet with unidentified
needs and for debt refinancing. parties for an investment of assets in
› FRASERS BUILDS PERPETUAL MOMENTUM Frasers Property Treasury was the issuer exchange of shares. The parties control
of the notes, which are guaranteed by vessel-owning and logistics services
FRASERS PROPERTY priced a S$400m (US$295m) parent Frasers Property. entities. This restructuring option is subject
perpetual non-call five bond on April 4, OCBC Bank was sole lead manager and to various approvals, including from
Singapore’s largest corporate perp since 2017, bookrunner. regulatory agencies and shareholders.
on the back of an investor-friendly structure “These factors give rise to material
and heavy demand from private banks. uncertainties on the appropriateness of the
The bonds were priced at 4.98%, 27bp RESTRUCTURING use of the going concern assumption in the
inside initial guidance of 5.25% area, after preparation of the accompanying financial
orders reached over S$900m. › E&Y WITHHOLDS PAC RADIANCE OPINION statements of the group and the company,”
The deal was the largest non-FIG said Ernst & Young in a disclaimer to the
perpetual since Mapletree Investments sold The independent auditor of financially annual report.
S$700m 3.95% perpetual non-call 5.5-year strapped PACIFIC RADIANCE has withheld As a result, it was not able to obtain
notes in May 2017. its opinion on the company’s latest enough evidence to provide a basis for an
Demand was driven by private banks, annual results because of the uncertainty opinion on the results.
which took 90% of the bonds, leaving 10% surrounding its debt restructuring. For the 2018 financial year, Pacific
to asset managers, banks and corporate The Singaporean oil services company Radiance reported a net loss of US$101.2m
investors. Singapore accounted for 94% of reported last Thursday that its current and (including impairment charges of US$53.6m).
the allocations. total liabilities exceeded current and total Meanwhile, a Singapore High Court
The property developer offered a call in assets by US$486.75m and US$158.48m, moratorium on legal proceedings against
year five, as well as a reset at the end of year respectively, as at end-December 2018. Pacific Radiance and subsidiaries Pacific
five to the prevailing Singapore SOR rate Auditor Ernst & Young said the Crest and CSI Offshore is due to end on
plus the initial credit spread of 304bp, with a information provided for its audit April 18. The companies are expected to
100bp step-up at the year five as well. reflected Pacific Radiance’s assumption apply to the court for further extensions.

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International Financing Review Asia April 13 2019 41

Kores is a mineral resources developer CTBC Bank’s headquarters. Taiwan-listed
with a national policy role to secure CTBC Financial Holding sold 95% of the
SOUTH KOREA resources for Korean industries. site and building to Grand River in October
Citigroup, Credit Agricole, HSBC and JP 2015 and the tower was demolished in
Morgan were joint bookrunners. 2016.
DEBT CAPITAL MARKETS In February 2016, Grand River raised a
NT$10.11bn (then US$304m) seven-year
› KORES GOES OFFSHORE loan to build Taipei Sky Tower. MLAB CTBC
Bank brought in nine lenders. The interest
KOREA RESOURCES CORP last Wednesday priced TAIWAN margin was 210bp over Taibor and the top-
US$400m five-year senior unsecured bonds level upfront fee was 25bp. Green Heaven
at Treasuries plus 102.5bp, drawing orders Investments is the guarantor.
of over US$2.85bn from more than 145 SYNDICATED LOANS The latest mezzanine financing will
accounts. provide additional capital for building the
Initial guidance was Treasuries plus › GRAND RIVER LAUNCHES MEZZANINE LOAN tower.
130bp area, before tightening to 105bp Project manager Riant Capital is a real
area, plus or minus 2.5bp. GRAND RIVER DEVELOPMENT has launched a estate fund with more than US$1.5bn of
Asia took 88% of the Reg S notes and US$100m three-year mezzanine to part- assets under management in North Asia.
EMEA 12%. Fund managers booked 63%, finance the construction of Taipei Sky
central banks and banks took a combined Tower in Taipei’s Xinyi district. › MULTIBANK INVITES ASIAN BANKS
21%, insurers 10%, and private banks and Sole mandated lead arranger and
others a combined 6%. bookrunner Huatai Securities pre-funded the Panama’s MULTIBANK has launched a
Majority-owned Mexican subsidiary deal in early March and is expected to close US$100m three-year bullet term loan,
MINERA Y METALURGICA DEL BOLEO will issue the syndication in late May or early June. tapping Asian loan market liquidity.
notes, which have expected ratings on par The project will cost about US$1bn to Standard Chartered and Sumitomo
with guarantor Korea Resources at A1/A develop and is expected to be completed in Mitsui Banking Corp are the mandated
(Moody’s/S&P). 2020. lead arrangers and bookrunners of the
The senior unsecured notes have a The tower will house the Park Hyatt financing, which pays an interest margin of
change of control put at par if the Korean Taipei and Andaz Taipei hotels, as well as 170bp over Libor.
government ceases to own and control at retail stores. Banks have been invited to join as MLAs
least 51% of the company. The project site was formerly that of with commitments of US$25m or more for

LG Chem adds to green credentials

„ Bonds Korean petrochemical company funds Green business ventures

LG CHEM has burnished its environmentally from 182 accounts, with Asia taking 63%, euro and dollar tranches for their green
friendly credentials with a US$1.56bn- Europe 22% and the US 15%. By investor portfolios.
equivalent 144A/Reg S Green bond offering type, asset managers and insurers took 75%, LG Chem is a petrochemical producer,
in two currencies. banks 18%, central banks 4% and private but it has diversified into manufacturing
The Korean petrochemical producer last banks 3%. rechargeable batteries, which includes
Monday priced a US$500m 3.25% 5.5-year The bonds have expected ratings of A3/A– batteries for electric vehicles.
note at 99.855 to yield 3.279%, equivalent (Moody’s/S&P), in line with the issuer, which “It’s one of those issuers that is not
to Treasuries plus 95bp. Initial guidance was is a subsidiary of Korean chaebol LG Group. traditionally green, but is trying to green up
125bp area. Price references came from like-rated KT its operations with the bond proceeds,” said a
A US$500m 3.625% 10-year tranche Corp, which had August 2022 and July 2026 source close to the deal.
priced at 99.419 to yield 3.695%, equivalent dollar bonds quoted at Treasuries plus 80bp LG Chem has been investing heavily in
to Treasuries plus 117.5bp, inside initial and 101bp, respectively, and SK Telecom, its battery business, and Moody’s wrote that
guidance of 145bp area. which had April 2023 and July 2027 dollar revenue from that division is expected to more
LG Chem also sold €500m (US$563m) bonds seen at Treasuries plus 87bp and than double by 2020 from W6.5trn (US$5.7bn)
0.5% four-year Green bonds at 99.61 to yield 103bp. in 2018. This month, it set up a joint venture
0.599%. This was equivalent to mid-swaps Pricing was in line with those companies, with VinFast Trading and Production, a
plus 65bp, inside initial price thoughts of although the 10-year arguably came inside subsidiary of Vingroup, to produce lithium ion
mid-swaps plus 90bp–95bp. fair value, which was seen in the context of battery packs for the Vietnamese carmaker’s
Orders were over US$2.2bn from 159 100bp–120bp. The issuer benefited from electric scooters and cars.
accounts for the 5.5-year dollar tranche. rarity value, as well as the relative scarcity Bank of America Merrill Lynch, BNP
Asia took 63% of the bonds, US accounts of Asian investment-grade issues this year, Paribas, Citigroup, HSBC, Morgan Stanley
20% and Europe 17%. By investor type, asset helping it stand out in a crowded field of and Standard Chartered Bank were joint
managers and insurers booked a combined over US$7bn in Asian emerging market bond bookrunners for both tranches.
67%, banks 26%, central banks 5% and offerings on Monday. The green angle gave The bonds were seen 5bp–8bp tighter in
private banks 2%. it an extra appeal, especially for European secondary trading on Tuesday.
The 10-year drew orders of over US$2.6bn investors, some of whom bought both the DANIEL STANTON

42 International Financing Review Asia April 13 2019


a top-level all-in pricing of 190bp through The total cost of the projects in Taiwan’s on the issuer’s rating to positive from stable
an upfront fee of 60bp, lead managers with Changhua county is around NT$93bn. to reflect a potential improvement in its
US$15m–$24m for an all-in of 186.7bp Last April, Taiwan’s Ministry of financial profile when its power plants are
based on a fee of 50bp and participants Economic Affairs awarded CIP a contract all at full operation.
with US$10m–$14m for an all-in of 183.3bp for projects with a combined capacity of The company is Thailand’s third largest
through a 40bp fee. 900MW, including 600MW for projects cement manufacturer and also has interests
A bank presentation was held last week in Changfang and Xidao, located off the in power generation. Its power plants sell
in Taipei. Commitments are due by May 17. coast of Changhua county, and 300MW their entire electricity output to state-
There is a US$100m greenshoe option. for Site 29, which CIP will develop with owned Electricity Generating Authority of
According to LPC data, Commerzbank partners China Steel and Diamond Thailand.
and StanChart provided a US$50m two-year Generating Asia. TPI Polene plans to privately place
term loan for Multibank in October 2015. The same month, Danish wind energy the notes to a small group of investors.
4HEûBORROWERûISûRATEDû"""¦û30&ITCH  developer Orsted A/S won a contract to Proceeds will be used to refinance
install 900MW of offshore wind capacity Bt4.75bn of bonds that will mature this
› CHAILEASE HOLDING BACK FOR REVOLVER at its Changhua 1 and 2a projects with year.
completion slated for 2021. Orsted is
CHAILEASE HOLDING is back for a US$150m expected to launch a NT$25bn five-year › BEM ROLLS OUT BOND PLANS
three-year revolving credit, less than a wind farm loan into general syndication
month after one of its units raised a smaller soon. Bank of Taiwan, BNP Paribas and BANGKOK EXPRESSWAY AND METRO is planning to
facility. Cathay United Bank are the mandated lead sell up to Bt5bn of bonds in tenors of three
Mega International Commercial Bank arrangers and bookrunners. A Taiwan- to 10 years over the next few weeks.
and Sumitomo Mitsui Banking Corp are the based unit of Orsted is the borrower on the Bank of Ayudhya and Government Savings
mandated lead arrangers and bookrunners NT$25bn loan, while the parent company is Bank are joint lead managers for the deal.
of the new loan, which has a US$100m the guarantor. Preliminary pricing indications are at
tranche A led by Mega and a US$50m Separately, German developer Wpd and spreads of 80bp–90bp for the three-year
tranche B led by SMBC. Taiwan’s Formosa II OWF are also in the tranche, 105bp–115bp for the five-year
Tranches A and B offer interest market for multi-billion US dollar project tranche, 125bp–135bp for the seven-year
margins of 126bp and 130bp over Libor, financings for offshore wind farms, which tranche and 127bp–137bp for the 10-year
respectively. For tranche A, the borrower are also part of Taiwan’s target to install tranche.
will pay any excess interest rate beyond a 5.5GW of offshore wind power capacity by The pre-marketing ranges offered by the
35bp difference between TAIFX and Libor. 2025. Thai mass rapid transit company are tighter
Banks are being invited to join as co- than those offered by THAI AIRWAYS, although
arrangers with commitments of US$25m both issuers are rated the same by Tris, at A
or more for an upfront fee of 18bp, as with a stable outlook.
managers with US$18m–$24m tickets Thai Airways, which is due to hold
for a 12bp fee, or as participants with THAILAND bookbuilding for a Bt10bn deal on April 23,
US$12m–$17m for a 7bp fee. The deadline is indicating 40bp–50bp more than BEM
for commitments is April 19. for the same tenors, mainly because of
Funds are to refinance a US$100m three- DEBT CAPITAL MARKETS the national air carrier’s higher leverage.
year loan the borrower raised in April 2016 Bangkok Bank, Kasikornbank and Krungthai
and for working capital purposes. Mega › GHB PLANS CHUNKY BOND Bank are joint lead managers for Thai
was the MLAB on that deal, which offered Airways’ deal.
a margin of 134bp over Libor, according to Thailand’s GOVERNMENT HOUSING BANK is BEM plans to open bookbuilding for
LPC data. planning to market bonds in tenors of institutional and high-net-worth investors
At the end of March, US-based Grand three to 15 years to raise up to Bt20bn in late April or early May.
Pacific Finance, a unit of Chailease Holding, (US$630m).
raised a US$100m three-year financing. The state-owned financial institution, › PERFECT PROPERTY BONDS
Bank of Taiwan was the MLAB of that deal, locally rated AAA by Fitch, will offer three,
which offered margins ranging from 150bp five, 10 and 15 years. Institutional investors PROPERTY PERFECT, rated BB+ by Tris, will
to 250bp over Libor. will be invited to subscribe to the notes invite institutional and high-net-worth
from April 24-26. investors to subscribe next month to
› CIP SEEKS PROPOSALS FOR WIND FARM PF CIMB Thailand is sole lead manager for four-year bonds to raise up to Bt2.5bn
the deal. (US78.8m).
Danish infrastructure fund management The unrated bonds will pay 6.25% for the
company COPENHAGEN INFRASTRUCTURE PARTNERS › TPI POLENE PLANS RETURN first two years and 7.00% for the last two
has sent out a request for proposals for a years.
loan of up to NT$69.8bn (US$2.3bn) to back TPI POLENE plans to return to the bond Subscription will be on May 7-9.
offshore wind projects in Taiwan. market to raise up to Bt5bn three months Globlex Securities, KT Zimco Securities, Capital
CTBC Bank and MUFG are the financial after it sold Bt3.5bn three-year bonds in Nomura Securities, KGI Securities Thailand
advisers on the loan, which has an 18-year January. and Yuanta Securities Thailand are joint lead
tenor. CIMB Thai will reprise its role as sole lead managers.
Potential lenders are being asked to manager for the latest offering of bonds, The Thai property developer will use
submit indicative pricing, commitment rated BBB+ by Tris. the proceeds to repay debt as well as fund
levels and other details by the April 26 The deal comes at an opportune time. business expansion and working capital
response deadline. Last Wednesday, Tris upgraded its outlook needs.

International Financing Review Asia April 13 2019 43

Stock Country Date Amount Price Deal type Bookrunner(s)
Huya China 10/04/19 US$442m US$24 Follow-on (primary/ secondary) Citigroup, Credit Suisse, Goldman Sachs, Jefferies
Guotai Junan Securities China 10/04/19 HK$3.17bn HK$16.34 Follow-on (primary) Guotai Junan International, UBS
Zengame Technology China 10/04/19 HK$221m HK$1.23 IPO (primary) Guotai Junan International
China New Higher Education Group China 10/04/19 HK$393m HK$3.57 Follow-on (primary) CLSA
ReadyTech Australia 09/04/19 A$50m A$1.51 IPO (primary) Macquarie Capital, Wilsons Corporate Finance
Source: IFR Asia


Issuer Country Date Amount Greenshoe Maturity Coupon (%) Premium (%) Bookrunner
Yuexiu Real Estate Investment Trust China 09/04/2019 HK$1.1bn 363 days 1.875% 2.5% DBS, HSBC, Nomura
Baozun China 08/04/19 US$275m 5 years 1.625% 30% Credit Suisse, Deutsche Bank
Source: IFR Asia


Index Description Index level 1 week total return 1 month total return 3 months total return OAS
ADIG Asian-dollar high-grade index 407.629 0.142 1.520 3.748 135
ADHY Asian-dollar high-yield index 644.372 0.046 2.097 7.344 500
AGIG Asian-dollar government high-grade index 379.921 0.213 1.857 3.690 115
AGHY Asian-dollar government high-yield index 768.292 0.243 2.853 7.087 371
ACIG Asian-dollar corporate high-grade index 434.126 0.117 1.408 3.788 144
ACHY Asian-dollar corporate high-yield index 528.373 0.008 1.954 7.373 525
Source: Merrill Lynch



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