IFRASIA

INTERNATIONAL FINANCING REVIEW ASIA

AUGUST 31 2019 ISSUE 1104 www.ifrasia.com

Japanese investors flock to Triple B

credits in quest for positive yields

Lotte REIT banks on renowned brand

and rate cuts for record REIT IPO

AI unicorn files for Hong Kong listing

as protests continue to rattle city

BONDS BONDS LOANS PEOPLE & MARKETS

Australia’s Green
bond pipeline gets
bigger as new
projects crop up
07
Temasek-linked China’s new loan Indian government
issuers benefit from prime rate may fall reverses budget tax
flight to safety and short without more changes to revive
yield compression monetary easing battered markets
08 08 10
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Upfront
OPINION INTERNATIONAL FINANCING REVIEW ASIA

Taste for Triple B to broaden their horizons even further. That will mean EM
corporate bonds and more exotic structures. Additional Tier

I
n an ordinary credit market, logic dictates that the ûCAPITALûCOULDûEVENûBEûONûTHEûCARDS
world’s best borrowers should be rewarded with the %VENTUALLYû*APANûWILLûNEEDûTOûDIPûITSûTOESûINTOûSUB
lowest borrowing costs. The Japanese bond market, investment grade credits. That really would be a break from
however, is far from ordinary. the ordinary.
Yields in Japan plunged in August, as global markets
reacted to a worsening outlook for the US economy and
a further escalation of trade tensions with China. If the Accommodating India
world’s top issuers are hoping to take advantage of cheaper

I
borrowing costs, however, they may be disappointed. NDIASûLATESTûREGULATORYûVOLTE FACEûISûHARDLYûAûSURPRISEû
Japanese government bonds are now well below zero INûAûCOUNTRYûWITHûSUCHûAûSTOP STARTûLEGISLATIVEûRECORDû
nûTHEûlVE YEARûBENCHMARKûHITû ûLASTûWEEKûnûBUTû 4OûRESTOREûCONlDENCEûFULLYûHOWEVERûMOREûDRASTICû
YENûINVESTORSûHAVEûNOTûYETûEMBRACEDûNEGATIVE YIELDINGû measures may be needed.
investments in the same way as their European peers. Finance Minister Nirmala Sitharaman may be new to the
Bank deposits still pay positive interest, however tiny. JOBûBUTûSHEûAPPEARSûTOûBEûFOLLOWINGûTHEûAGE OLDûAPPROACHûTOû
And negative yielding debt is a rare sight beyond the JGB lNANCIALûREGULATIONûINû)NDIAûSPEAKûlRSTûTHINKûLATER
MARKETû*ASSOûTHEûSTATEûSCHOLARSHIPûAGENCYûlNALLYûPRICEDûAû 3ITHARAMANûONû!UGUSTûûUNWOUNDûTAXûINCREASESûFROMû
HERûMAIDENûBUDGETûANNOUNCEMENTûONû*ULYûûTHATûHADûHURTû
foreign portfolio investors and roiled Indian stocks. She also
The yen bond market is becoming pledged to speed up a recapitalisation of state banks and
attractive for the Triple B crowd, IMPROVEûLIQUIDITYûFORûHOUSINGûlNANCEûCOMPANIESûAMONGû
other things.
as depressed domestic yields have Investors naturally welcomed the repeal, and the stock
index rebounded early last week, helped by news of a
forced Japanese investors to look massive transfer from the central bank.
down the credit curve. Those gains, however, did not last, and by the end of
the week the focus was back on India’s stalling economy.
'ROWTHûSLUMPEDûTOûAûSIX YEARûLOWûOFûûINûTHEû!PRIL *UNEû
TWO YEARûBONDûATûAûNEGATIVEûYIELDûOFû ûINû!UGUSTûBUTû quarter, according to data released on Friday. The consumer
ITûSTILLûHADûTOûPAYûAûPOSITIVEûCOUPONûOFû sector is wilting.
4HEû#ITYûOFû+OBESû YEARû53ûDOLLARûBONDSûPRICEDûLASTû It is now clear that the problems in India’s credit markets
WEEKûSWAPûTOûYENûATûAROUNDû ûEVENûTHOUGHûMUNICIPALû are having a profound impact on the economy. With the
governments still need to pay positive coupons at home. banks still in capital conservation mode, the liquidity crisis
On the other side of that equation, swap costs and a AFFECTINGûNON BANKINGûlNANCIALûCOMPANIESûHASûHALTEDûTHEû
demand for positive coupons mean the yen bond market is mOWûOFûCREDITûTOûTHEûREALûECONOMY
effectively closed for the world’s top credits. Triple A issuers Economists expect next month’s festival season to drive
have long vanished from the Samurai bond market, and less some recovery, but it is clear that Sitharaman’s ministry
THANûûOFûûISSUANCEûCAMEûFROMû$OUBLEû!ûBORROWERS will need to come up with new measures to restart
Increasingly, however, the yen bond market is becoming CONSUMERûLENDINGûANDûRESTOREûCONlDENCEûINûTHEûlNANCIALû
attractive for the Triple B crowd, as depressed domestic sector. Consolidation of state banks, also announced on
yields have forced Japanese investors to look down the Friday, is a good place to start.
CREDITûCURVEû%MERGING MARKETûGOVERNMENTSûAREûNOWûTHEû Now that the accommodative central bank has given the
HOTûTICKETûTAKINGûTHEûPLACEûOFûLOSS ABSORBINGûSENIORûBANKû government more room – and more funds – to manoeuvre,
debt last year. Sitharaman and her colleagues can do more. They just need
If yields continue to slide, Japanese investors will need to make sure they think before they speak.

International Financing Review Asia August 31 2019 1

INTERNATIONAL FINANCING REVIEW ASIA

INDEX Delta Dunia Sandang Tekstil 26 LIC Housing Finance 24 SK Hynix 32

36Kr 20 Delta Merlin Dunia Textile 26 Lotte REIT 5 Small Industries Development
Adira Dinamika Multi Finance 26 Digi Telecommunications 29 Louis Dreyfus 31 Bank of India 25
Aditya Medisales 23 Digital Mediatama Maxima 27 Macquarie Bank 16 Southwest Securities 21
Agricultural Bank of China 18 Eclipx Group 29 Macquarie Group 9 Sta Lucia Land 30
Alphalogic Techsys 25 Export-Import Bank of India 4 Malaysia 28 State Bank of India 24
Aozora Bank 27 Gansu Jingyuan Coal Industry and Manila Water 29 Suncorp-Metway 16
ARA Asset Management 30 Electricity Power 22 Mapletree Investments 8 Takara Leben Real Estate Investment 28
Ascott Residence Trust 8 Global Switch 23 Megvii Technology 6 Tata Capital Housing Finance 25
Asia United Bank 29 Gruh Finance 26 Minsheng Hong Kong Tianjin Rail Transit Group 19
Asset World 32 Guangxi Financial Investment Group 18 International Leasing 19 Tianma Microelectronics 21
Axelum Resources 30 Guosen Securities 21 MMI Holdings 30 Times China Holdings 17
Bank of Communications Haitong Securities 18 Muyuan Foods 21 Toyota Finance New Zealand 29
Financial Leasing 18 Hanwha Systems 32 MyState Bank 17 Transpower New Zealand 29
Bank of Guizhou 20 HDB Financial Services 23 New Hope Liuhe 22 UBS Group 30
Bank of the Philippine Islands 29 Hyflux 31 Nippon Sheet Glass 27 Union Bank of the Philippines 29
Bapton 22 Hysan Development 22 Nuvoco Vistas 24 United Asia Finance 22
Beijing Sinovoice Technology 7 Indiabulls Consumer Finance 24 Oil and Natural Gas Corp 23 United Overseas Bank China 18
Beijing Unisound Information Indian Railway Finance Corp 24, 25 One REIT 28 Usen-Next Holdings 27
Technology 7 Indonesia Eximbank 27 Origin Energy 16 Volkswagen Finance 25
Bendigo and Adelaide Bank 16 Indorama Ventures 32 Pacific National Holdings 16 WCT Holdings 28
Berli Jucker 32 IndusInd Bank 25 Perenti Global 17 Xtep International Holdings 23
Bloomage Biotechnology 20 Integral Diagnostics 17 Perusahaan Listrik Negara 4, 26 Yes Bank 23
Bumi Serpong Damai 26 Japan Finance Organization for Pharmaron Beijing 20 Yitu Technology 7
CGN Power 20 Municipalities 27 PSA International 8 Yunnan Metropolitan
Changchun Urban Development & Jiumaojiu International 21 PTT Global Chemical 32 Construction Investment Group 19
Investment Holdings (Group) 17 Keboda Technology 21 Recruit Holdings 28 Zhangzhou Jiulongjiang Group 17
China Industrial Securities Korea Development Bank 31 Rentenbank 16 Zhejiang Satellite Petro Chemical 21
International Financial Group 17 Korean Air Lines 31 S Hotels and Resorts 32 Zhengzhou Coal Mining
China Pipeline Corp 19 Kuala Lumpur Kepong 28 SenseTime 6 Machinery Group 21
China Zheshang Bank 21 Latitude Australia Credit Card SF Holding 22 Zhenjiang City Construction
CIFI Holdings (Group) 19 Loan Note Trust, Series 2019-1 17 Shanghai Bright Power Industry Group 19
City of Kobe 27 Latitude Finance Australia 16 Semiconductor 20 Zijin Mining 22
CloudMinds Technology 7 Lendlease Group 31 Shanghai Henlius Biotech 20 Zip 16
CloudWalk Technology 7 Liberty Financial 16 Singapore Technologies Engineering 30 Zip Master Trust Series 2019-1 16

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2 International Financing Review Asia August 31 2019

Contents
INTERNATIONAL FINANCING REVIEW ASIA
AUGUST 31 2019 ISSUE 1104

COVER STORIES COUNTRY REPORT

BONDS
04 Japan welcomes BBB rated credits 16 AUSTRALIA
Pacific National Holdings has
A heavily oversubscribed Samurai bond from Export- mandated five for a 10-year
Import Bank of India provided fresh evidence of Japan’s benchmark Australian dollar,
growing appetite for Triple B rated overseas issuers. sterling or US dollar Reg S
bond offering.
EQUITIES
17 CHINA
05 Lotte to test Korea REIT market Changchun Urban
Lotte REIT is to test appetite for the country’s largest Development & Investment
real estate investment trust, hoping interest rates and Holdings has mandated banks
Lotte Group’s backing help quell skepticism. to arrange investor meetings in
Hong Kong from September 3.
EQUITIES
22 HONG KONG
06 Megvii seeks IPO recognition Hong Kong property company
Megvii Technology has filed for a US$500m–$1bn IPO Hysan Development sold
in Hong Kong, where controversy over surveillance US$500m 2.82% 10-year senior
unsecured Reg S bonds at
technologies has been a feature of the ongoing protests.
99.577 to yield 2.869%.
29 PHILIPPINES
BPI raised SFr100m from two-
year debut Green bonds at
a yield of -0.020%, the first
negative-yielding bonds to be
issued out of the Philippines.
30 SINGAPORE
ST Engineering North America
set up a US$1.5bn commercial
paper programme guaranteed
by parent company Singapore
Technologies Engineering.
31 SOUTH KOREA
Korean Air Lines priced
US$300m three-year 2% senior
unsecured notes guaranteed
by Korea Development Bank at
99.641 to yield 2.124%.

23 INDIA 32 THAILAND
NEWS Oil and Natural Gas Corp has Indorama Ventures has
set up a US$2bn euro MTN mandated four to arrange
07 Aussie Green patch set to bloom programme to access global investor meetings in Hong
Australia remains the third largest issuer of Green markets and widen their Kong, Singapore and London,
bonds in the Asia Pacific region, behind China and investor base. which began on August 28.
Japan, and has plenty of scope for further growth.
26 INDONESIA
08 Investors flock to Singapore Inc Investors turned to high-quality Bumi Serpong Damai has
13
government-linked issuers insulated from the US-China trade war. offered to buy any and all of its
08 China rate reforms may fall short China’s interest rate reforms are US$300m 7.25% bonds due
unlikely to support the economy without action to lower funding costs. 2021, issued by wholly owned
09 Macquarie surprises with A$1bn placement Macquarie Group has subsidiary Global Prime Capital.
sealed the largest share placement in Australia so far this year.
27 JAPAN
Aozora Bank priced US$300m
PEOPLE & MARKETS 2.55% three-year bonds at
99.914 to yield 2.58%, inside
10 India resuscitates capital markets initial price thoughts of
Treasuries plus 135bp area.
India’s financial markets heaved a sigh of relief after
the government rolled back tax hikes on foreign and 28 MALAYSIA
domestic equity investors. Malaysia is considering a
second Samurai bond issue
11 Najib’s main 1MDB trial kicks off Prosecutors say Najib Razak abused his
with a guarantee from JBIC
power to cover up the theft of hundreds of millions of dollars from 1MDB.
following an oversubscribed
12 Credit Suisse merges syndicate teams Credit Suisse has merged its loan sale in March.
and bond syndicate teams in Asia.
12 CSRC issues draft rules on A-share spin-offs CSRC has issued draft 29 NEW ZEALAND
rules to allow A-share companies to spin off units through an IPO. Transpower New Zealand
10 Who’s moving where Daniel Ng Meng Hua, head of investment banking raised the maximum NZ$150m
at BOC International, is to retire from the bank. it was seeking from a six-year
13 In brief China has opened up its capital markets further by allowing retail note offer via sole lead
global banks to be lead underwriters in its interbank bond market. manager ANZ.

International Financing Review Asia August 31 2019 3

NewsAI IPO in Hong Kong 06 Green Australia 07 Safe-haven Singapore 08

Japan welcomes BBB rated credits

„ Bonds Exim India Samurai shows appeal of absolute spreads offered by Asian quasi-sovereigns

BY TAKAHIRO OKAMOTO year is back down below 30% or higher, however, have had on Samurai bonds – even when
of the Samurai market, and the a tougher time borrowing in yields on Japanese government
Last week’s heavily response to India Exim suggests yen in recent years because of bonds are sinking further
oversubscribed Samurai bond there is plenty of untapped a widening in dollar/yen basis below zero. This has made it
from EXPORT-IMPORT BANK OF INDIA demand for lower-rated deals. swaps and Japanese investors’ difficult for issuers with high
provided fresh evidence of Global issuers rated Single A insistence on positive coupons credit ratings to sell bonds in
Japan’s growing appetite for yen as they would need to pay
Triple B rated overseas issuers. well over their euro or dollar
India Exim’s ¥32bn DOWN THE CURVE curves to offer positive coupons
(US$302m) dual-tranche SAMURAI BOND BUYERS HAVE EMBRACED RISKIER DEBT (% OF NEW ISSUES) in yen.
offering on Thursday drew 100
total demand of around ¥90bn, TIGHT-END PRICING
surprising even bankers on the 80 India Exim is the latest
deal. sovereign or quasi-sovereign
“Triple B rated bonds are now 60 credit to enjoy such a strong
wanted in the yen market,” said response in Japan, following
a banker on the deal. “Investors 40
earlier deals from the Republic
no longer expect attractive of the Philippines (Baa2/BBB+),
coupons in the domesic credit which printed ¥92bn of four-
20
market as yen rates have tranche Samurai bonds in early
dropped, but Asian credits 0 August, and the Republic of
still offer reasonable absolute 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Indonesia (Baa2/BBB), which
levels.” AAA AA A BBB BB
raised a massive ¥177bn from
As well as reaffirming a six-tranche offering in May.
Japanese investors’ hunger International rating bands from S&P/Moody’s. Issuer rating used where bonds are unrated The latter was the biggest Asian
for yield, the deal is seen Source: Refinitiv, IFR public offering of standalone
as a curtain-raiser for the
international yen market,
ending a summer recess that
began after Corning’s 12 and
20-year Global yen transaction
on August 6.
Indonesia’s state-run
electricity company PERUSAHAAN
LISTRIK NEGARA filed a securities
registration statement on
Monday to price its inaugural
Samurai bond as early as
September 12. PLN is rated
Baa2/BBB/BBB (Moody’s/S&P/
JCR), in line with India Exim at
Baa2 from Moody’s and BBB+
from JCR.
With no active high-yield
bond market in Japan, Samurai
bonds with Triple B ratings
are among the few remaining
assets to offer attractive
spreads.
A record 51% of Samurai
bonds by volume sold in 2018
had implied international
ratings of BBB+ or lower, up
from less than 8% in 2014,
according to IFR calculations.
Triple B issuance so far this

4 International Financing Review Asia August 31 2019


Little impact from LPR 08
Samurai bonds on record.
The Exim India deal, led by
Daiwa, Mitsubishi UFJ Morgan
Stanley, Mizuho and SMBC Nikko,
consisted of a ¥25bn three-year
tranche with a 0.59% coupon
and a ¥7bn five-year piece with
a 0.66% coupon. They priced
at 70bp and 78bp over the
respective yen offer-side swaps,
both at the tight ends of the
initial guidance ranges of 70bp–
75bp and 78bp–85bp, after
the book quickly reached the
target size in the early stages of
marketing.
The pricing levels were
deemed satisfactory for the
issuer. According to estimates
by two bankers on the deal, the
three-year priced very close to
its US dollar curve, while the
five-year priced only about 5bp
over.
Another significant
aspect of the transaction
was the diversified investor
participation. While asset
managers and lifers were key
investors in the three and
five-year tranches, about 20
Japanese regional accounts
participated, illustrating
growing recognition of Indian
credits across Japan.
“I assume regional banks are
familiar with Indian credits
as they made loans there,”
said one banker. India was the
second largest destination for
Samurai loans in the first half
of this year, according to LPC,
IFR’s sister publication.
Large orders for the bonds
also came in from foreign
investors, including a foreign
public fund and a major global
asset manager.
India Exim last issued
Samurai bonds in 2014, with a
guarantee from the Japan Bank
for International Cooperation.
Having now seen the depth of
demand for its own credit, it is
keen to become a repeat issuer
in yen.
“This widespread investor
base will provide a good ground
for Exim Bank’s future Samurai
transactions,” CFO Harsha
Bangari said in a statement. „
Macquarie’s A$1bn surprise 09
Lotte to test Korea REIT market
„ Equities Rate cuts and brand name expected to arouse investor interest
BY CANDY CHAN
LOTTE REITis set to test investor
appetite for South Korea’s
largest real estate investment
trust, hoping that favourable
interest rates and strong
backing from Lotte Group will
overcome the local market’s
scepticism towards the format.
South Korea’s REIT market
has struggled to catch up
with its peers in Asia and
these aspirations were dealt
a major blow in March, when
supermarket chain Homeplus
pulled the plug on the W1.7trn
(US$1.5bn) listing of Korea
Retail Home Plus REIT on weak
investor demand.
But market participants
expect a different result this
time as Lotte REIT will hold
a diversified portfolio of
four department stores, four
discount stores and two retail
outlets, all owned by Lotte
Shopping, the country’s largest
department store chain. The
deal, at up to W430bn, is also
much smaller, and market
conditions have changed
markedly in the past five
months.
“Both the US Federal Reserve
and Bank of Korea have
lowered interest rates, and that
encourages investors who are
looking for yield to look to the
REIT market,” said a person
away from the deal. “Market
conditions and sentiment
should be strong enough to
support the deal.”
Another person said the
deal should not be difficult for
investors to digest given its size.
“I would not be surprised
to see other Lotte affiliates
backing the deal as a means of
re-investment into the REIT,”
the person said.
Lotte REIT, which will offer
86m shares in an indicative
price range of W4,750–W5,000,
International Financing Review Asia August 31 2019
is expected to list on the bourse
in October with a market
capitalisation of W817bn–
W860bn.
The price range represents a
forecast 2020 dividend yield of
6.3% to 6.6%, higher than that
offered by the current biggest
K-REIT. E Kocref CR-REIT, which
listed on the bourse last year
and runs three commercial
“Both the US Federal
Reserve and Bank of
Korea have lowered
interest rates, and that
encourages investors
who are looking for
yield to look to the
REIT market.”
properties, traded at a forecast
yield of about 5.65% with
a market capitalisation of
W390bn.
RENOWNED BRAND
While a stable yield in volatile
markets is a key selling point,
the familiarity and status of the
Lotte brand will also help.
“Many Lotte affiliates,
which are the major tenants
in the REIT, are recognised as
creditworthy issuers in the
Korean capital markets,” said
the second person.
The success of the deal is
crucial to the development of
South Korea’s REIT market,
which has struggled since it
launched in 2001. Only six
REITs trade on the country’s
stock exchange, out of 2,303
listed companies.
Most listed K-REITs are also
relatively small with a single
investment property and a
market capitalisation of less
than W100bn.
For daily news stories
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Lotte REIT said it has filed
administrative documents
to the Korean bourse to kick
off the listing process, with
bookbuilding set for September
23–October 2 and the public
subscription scheduled for
October 8–11.
After the completion of the
IPO, Lotte Shopping will own
a 50% stake in Lotte REIT and
Lotte AMC will manage the
REIT’s assets.
In 2014, Lotte Shopping
tried to list a US$1bn REIT in
Singapore comprising shopping
mall assets but the deal did not
make it to the pre-marketing
stage.
A KRX listing for Lotte REIT
would be the biggest equity
raising for the Lotte group
since 2017, when it listed a
petrochemical venture, Lotte
Chemical Titan, in Malaysia.
The deal was downsized to
US$877m, only for the stock to
lose a third of its value in its
first month of trading.
A corruption scandal
involving the group’s chairman,
Shin Dong-bin, and other
Lotte executives also led to
the cancellation of a planned
US$4.5bn Hong Kong listing
in 2016 for Hotel Lotte, which
holds lucrative duty-free
shopping licences. The group
has since tried to revive the
offering in Korea as part of a
plan to simplify its corporate
structure, but no deal has
materialised.
Shin was jailed in February
2018 for his role in a bribery
scandal that led to the ousting
of former South Korean
President Park Geun-hye, but
was released in October that
year after an appeals court
suspended his jail term.
HSBC, Korea Investment &
Securities and Nomura are
working on the latest Lotte
REIT. „
5
News
Megvii seeks IPO recognition
„ Equities IPO filings come amid continuing protests in the city
BY FIONA LAU
MEGVII TECHNOLOGY, the facial
recognition specialist best
known for its Face++ software,
has filed for a US$500m–$1bn
IPO in Hong Kong, where
controversy over surveillance
technologies has been a feature
of the ongoing protests.
As the first artificial
intelligence start-up to plan a
listing in Hong Kong, Megvii
will test investor appetite for
the fast-growing and cash-
hungry industry. However,
its software focus will also
invite scrutiny after local
protesters recently tore down
so-called smart lampposts
that they believed were
equipped with Chinese facial
recognition technology. Since
the beginning of the unrest
in June, many protesters have
also systematically hidden their
faces using masks and glasses
to foil government surveillance.
Alibaba-backed Megvii kicked
off preparation for the Hong
Kong IPO at the beginning of
6 International Financing Review Asia August 31 2019
the year. It raised US$750m
from a private financing in
April at a valuation of about
US$4bn.
The company planned at
one point to file the listing
application in the second
quarter. However, in May, New
York-based Human Rights
Watch said in a report that
Megvii might be behind a
mobile app that forms part
of the mass surveillance
infrastructure set up by
Chinese authorities in the
majority-Muslim Xinjiang
Uygur autonomous region. A
month later, the human rights
advocacy group withdrew such
claims.
The company’s filing last
week is a vote of confidence
that the Hong Kong market will
remain open for new-economy
IPOs after a turbulent summer,
marked by political unrest and
the ongoing US-China trade
dispute.
“Megvii’s facial recognition
technology will unavoidably
draw some attention but given
its strong shareholder backing
and solid business growth, we
believe the deal will manage
to generate a decent level of
interest,” said a person close to
the IPO.
Megvii is aware of the
public concern on the use of
its technology. In the filings, it
said it requires its customers to
promise that they will not use
its technology for any illegal
or inappropriate purposes,
including infringement of
human rights. The company
has also recently set up an AI
Ethics Committee to consider
ethical issues in the industry
and the company.
Beijing-based Megvii is the
largest AI-focused solution
provider in terms of revenue in
what it defines in its prospectus
as China’s smart city and
community management
vertical with a 7.4% market
share in 2018. As of June 30
2019, it provided City IoT
(internet of things) solutions
to 339 domestic customers,
including government agencies
and businesses, in 112 cities in
China.
Such solutions encompass
algorithms, software as well as
AI-empowered sensors to allow
government agencies to enhance
public safety, optimise traffic
management and improve urban
resource planning, according to
the filing.
City IoT solutions was the
biggest revenue and gross profit
contributor for Megvii in the
first half of 2019, representing
73% and 67% of the total
respectively.
Megvii’s other clients
include fintech companies, car-
hailing service providers and
smartphone makers.
Joint sponsor Citigroup,
Goldman Sachs and JP Morgan are
planning to bring the IPO to the
market by the end of the year.
INVESTOR EDUCATION
Megvii is joining many other
Chinese AI companies that are
planning to go public this year
or next.
Bigger rival SENSETIME is

tipped to be the next big AI
listing candidate, while YITU
TECHNOLOGY, which also develops
facial recognition technology, is
working on a domestic IPO.
CLOUDMINDS TECHNOLOGY, a
developer of cloud-based robots
backed by SoftBank Group,
pre-marketed a NYSE IPO of
US$500m in July. Meanwhile,
speech recognition companies
BEIJING UNISOUND INFORMATION
TECHNOLOGY, CLOUDWALK TECHNOLOGY
and BEIJING SINOVOICE TECHNOLOGY
are all planning to list on the
Shanghai tech board.
These companies, however,
will have to spend a lot of effort
to educate investors about their
industry.
“There is no direct listed
comparable from China. You
have to convince investors
about the valuation models and
you can imagine the difficulty
involved,” said a person close to
the CloudMinds deal.
CloudMinds will decide in
September whether to push the
deal ahead, according to other
people close to the deal.
People close to the Megvii
IPO, however, strike a confident
note.
“Investors will find it easier
to value Megvii as the company
already turned profitable,” said
one of the people.
Founded in 2011, Megvii
posted a loss of Rmb5.2bn
(US$729m) for the first half of
2019 mainly due to changes in
fair value of preferred shares
and investment in research and
development. But its adjusted net
profit for the first half of 2019
was Rmb32.7m, compared to an
adjusted net loss of Rmb137m in
the first half of 2018.
Megvii is also the third
company planning to list in
Hong Kong with weighted
voting rights, after Xiaomi and
Meituan Dianping.
Under the structure, founders
and executive directors Yin Qi,
Tang Wenbin and Tang Mu,
who own a combined 16.8%
stake in Megvii, will enjoy
voting rights 10 times higher
than other shareholders.
Ant Financial and Taobao
China own 15.1% and 14.3%
stakes in Megvii, respectively. „
Aussie Green patch set to bloom
„ Bonds Project pipeline and large investor base will fuel market expansion
BY JOHN WEAVERS
Australia remains the third
largest issuer of Green bonds
in the Asia Pacific region,
behind China and Japan, and
has plenty of scope for further
growth, according to a pair
of reports from the Climate
Bonds Initiative.
Green Infrastructure
Investment Opportunities
Australia 2019 (GIIO) identified
a pipeline of over 400 green
infrastructure projects and
called for a greater range of
financing tools to support
the transition to a low-carbon
economy.
It also welcomed the
formation of the Australian
Sustainable Financial Initiative,
which brings together the
country’s major banks,
superannuation funds,
insurance companies, financial
industry groups and academia
with the aim of developing
a roadmap for the financial
sector’s contribution to a more
sustainable future by 2020.
“Australia has both the
opportunity and the capital to
meet its green infrastructure
challenges and create a
climate-ready, resilient and
robust economy, fit for the
future,” said Sean Kidney,
CEO, Climate Bonds Initiative.
“Investing in low carbon
transition will create jobs,
boost economic growth
and help Australia meet its
international obligations.”
The GIIO report highlights
solar and wind energy as areas
with the greatest investment
potential, while battery storage
and pumped hydro will be
the likely winners of the
increasing focus on storage.
Australia trails other
OECD countries in the use of
renewable energy sources with
a 21% share of national energy
in 2018. However, this was up
from 17% in 2017 thanks to a
doubling in annual investment,
mainly in wind and solar, to
International Financing Review Asia August 31 2019
A$20bn (US$13.6bn), according
to the GIIO.
David Jenkins, head of
sustainable finance at NAB,
sees a lot more opportunities
for sustainable financing across
both bond and loan formats,
including social, sustainability
and green instruments, that
will help transition Australia to
a low-carbon economy.
“The growth of
sustainability-linked loans,
which incentivise borrowers
to materially improve their
sustainability performance
by linking incentives (and
penalties) to predetermined
sustainability targets rather
than use bonds/loans to
finance finite green or social
projects, is another important
development going forward,”
he said.
This is especially important
for borrowers looking to
support the green-to-brown
transition, especially in sectors
not usually considered green
such as industrials, metals and
mining and shipping.
Jenkins also expects more
offshore issuers to access the
Australian green market to
take advantage of a deep and
rapidly growing investor base.
Responsible investments
under management in
Australia rose 13% last
year to A$980bn, or 44% of
the A$2.24trn total assets
professionally managed in the
country at year-end, according
to the Responsible Investment
Benchmark Report 2019
Australia, released in July.
The scale of buyside interest
Down Under was underlined
by the huge A$2.0bn and
A$1.5bn order books for this
year’s respective A$400m
five-year and A$300m six-
year Green bond sales from
Woolworths and QIC Shopping
Centre.
RAPID GROWTH
The Climate Bonds Initiative
recorded cumulative green
For daily news stories
visit www.ifrasia.com
and sustainable bond issuance
in Australia of A$15.6bn
(US$11.6bn) as of June 30 2019,
behind only China (US$91.5bn)
and Japan (US$12.4bn) in
Asia Pacific, according to the
Green Finance State of the
Market Australia 2019 report,
published at the same time as
GIIO.
Globally, Australia lay 10th
overall with a cumulative
35 deals from 15 issuers in
Australian dollars following an
upturn in issuance in recent
years.
Australian Green bond
sales reached an annual
record of A$6.0bn in 2018,
almost double the A$3.3bn
total in 2017, with the first
six months of 2019 raising
A$3.9bn before QIC and
European agencies KfW and
BNG Bank added a further
A$850m to the total.
On a cumulative basis, low-
carbon buildings dominate
Green bond allocations with an
approximate 43% share of the
use of proceeds, followed by
energy with 25%, low-carbon
transport at 24%, water at 6%
and waste at 2%.
Large scale Green bond
issuance has come mainly
from the state governments
of Victoria, New South Wales
and Queensland, while the
four major banks have all
issued Green bonds of A$500m
or more and supported new
issuers coming to market.
“The domestic green finance
market is an example of
international best practice
with ongoing commitment
from the banking sector
acting as an underlying driver
of both market growth and
innovation,” the CBI report
noted.
Outside the banking/
financials, property and retail
sectors, green issuance from
ASX-listed corporates remain
a lagging indicator compared
with the US and European
markets, however. „
7
News
Investors flock to Singapore Inc
„ Bonds Government-linked issuers benefit from flight to safety, yield compression

BY DANIEL STANTON
Singapore Inc took advantage
of strong issuance conditions
last week as investors turned to
high-quality government-linked
issuers insulated from the US-
China trade war.
MAPLETREE INVESTMENTS and PSA
INTERNATIONAL, which are both
wholly owned by Singapore
state investment holding
company Temasek Holdings,
printed Singapore dollar and
US dollar bonds, respectively,
while ASCOTT RESIDENCE TRUST, in
which Temasek has an indirect
stake, sold Singapore dollar
hybrids.
PSA on Wednesday priced
US$500m 10-year bonds via Asia took 92% of the Reg S in which they took up 17%.
DBS and HSBC at a neglible bonds and EMEA 8%. However, the final order book
new issue premium, drawing There was lower was bigger than the 2016 total
of US$1bn, and the yield and
spread were 37bp and 10bp
tighter, respectively, than the
Just as the US 10-year Treasury yield has reduced respective levels three years
by more than 100bp this year to around 1.5%, ago.
Singapore government yields have compressed The low yield was heard
to deter some investors, with
tremendously in the past few months. In early
insurers receiving half the
May, 10-year Singapore government securities allocation they did in the 2016
were yielding 2.32%, but that had dropped to deal, though there were plenty
1.73% by Monday. of orders from existing holders.
By investor type, funds booked
46%, banks 34%, public sector
institutions 9%, insurers 8%,
a book of over US$1.5bn from participation from European and private banks, corporates
106 accounts (See Singapore Debt investors than in PSA’s last and others a combined 3%.
Capital Markets.). dollar bond offering in 2016, The global port operator is

China rate reforms may fall short margin compression.

„ Loans Economists see little impact on borrowing costs without further monetary easing
BY APPLE LI
China’s interest rate reforms
are unlikely to support a
slowing economy without
further monetary policy
measures to lower banks’
funding costs, economists have
warned.
On August 17, the People’s
Bank of China mandated the
use of the loan prime rate
(LPR) as a substitute to the
official benchmark lending
rate. An above-five-year LPR
will be introduced in addition
to the current one-year LPR
to serve as pricing references
for new loans, improving the
transmission efficiency of
market interest rates.
The revamp will lead to
lower corporate borrowing
costs and is seen as China’s
latest effort to support local
businesses as the country’s GDP
growth has slumped to a 27-
year low. However, economists
expect the effects on the cost
of credit to be marginal as the
LPR is anticipated to decline
gradually, especially when
lenders are under pressure to
protect their lending margins.
“Unless the one-year LPR
falls below 90% of the official
benchmark rate, or around
3.9%, the actual impact on
corporate borrowing costs will
be limited,” said Wei Li, senior
China economist at Standard
Chartered, adding that the
pressure on banks’ profitability
could eventually be transmitted
to smaller enterprises.
“As banks are not able to
significantly lower deposit
rates, they may selectively price
the loans higher for some of
the weaker borrowers in order
to protect their net interest
margin,” Li said.
Published on the 20th of
every month, the new LPRs
are set by average quotations
submitted monthly by 18
commercial banks, including
two foreign lenders, after
discarding the highest and the
lowest quotes.
The one-year LPR, which had
remained largely unchanged
at 4.30%-4.31% since October
2015, fell 6bp on August 20, the
first quotation after the reform,
to 4.25%. That is 10bp below
the 4.35% PBoC’s one-year
benchmark lending rate.
FURTHER EASING
The latest reform has
effectively put the PBoC in
better control of banks’ lending
rates as the new LPR is to be
quoted based on the one-year
medium-term lending facility
(MLF) policy rate (currently at
3.3%) plus a premium to reflect
banks’ own funding costs, risk
premium and credit supply and
demand.
While the shift gives the
central bank a more efficient
monetary policy tool, since
the MLF is more flexible and
market-driven than the PBoC’s
benchmark rate, lenders are
likely to be at a disadvantage.
Moody’s said in an August
19 report that banks could be
tempted to increase their risk
appetite to compensate for
shrinking margins. Lenders
with large loan exposures due
for repricing in the near term
will be immediately exposed to
However, experts believe the
PBoC will take additional steps
to curb banks’ risk-taking by
lowering their funding costs,
either by cutting the reserve
requirement ratio or easing the
MLF – used as a policy lending
tool to manage liquidity in the
financial system.
StanChart’s Li expects the
PBoC to lower the one-year
MLF rate twice by 10bp each
time this year, with the first
rate cut occurring as soon as
September.
“If the LPR, to be announced
on September 20, stays more
or less the same as 4.25%, or on
a much higher level than 4%,
the PBoC may start lowering
the MLF rate with an aim of
lowering banks’ funding costs,”
Li said.
Christiaan Tuntono, senior
Asia Pacific economist at
Allianz Global Investors, sees
the PBoC cutting the RRR by
at least 100bp in the second
half of the year in addition to
lowering the MLF policy rate.
“We think that lowering the
RRR remains a better option
as that would allow greater
room for banks to guide down
the price for their new lending
products,” he said. „

8 International Financing Review Asia August 31 2019


rated Aa1/AA (Moody’s/S&P) and
marketed its bonds using the
Moody’s rating, just one notch
off Singapore’s Triple A country
rating.
On Monday, Mapletree
Investments priced a S$300m
(US$216m) 12-year bond at par
to yield 3.15%, inside initial
guidance of 3.3% area, while
Ascott Residence Trust sold
S$150m subordinated perpetual
non-call five securities at par
to yield 3.88%, inside 4.125%
area guidance. Both issues were
estimated to print close to fair
value.
Orders were over S$900m
from 42 accounts for the
Mapletree bonds and over
S$1.05bn from more than 56
accounts for ART’s hybrid.
Both issuers are unrated but
benefit from links to Temasek.
Temasek owns Mapletree,
Macquarie surprises with A$1bn placement
„ Equities Solid investor demand allows shares to sell at slim discount
BY CANDY CHAN, THOMAS BLOTT
MACQUARIE GROUP has sealed the
largest share placement in
Australia so far this year with a
finely priced A$1bn (US$675m)
follow-on that analysts labelled
a “surprise” capital raising.
The non-underwritten
deal surpassed the A$900m
placement from real estate
investment trust Dexus in May
this year. It received strong
support from institutional
shareholders, according to the
company.
The group sold 8.3m new
shares at A$120 each, or a 2.8%
discount to last Tuesday’s close
of A$123.51. The marketed
price range was A$118–$123.50
per share.
Macquarie’s shares closed
above the placement price last
Thursday at A$122.53. The
stock is up 14.1% year to date,
compared with the benchmark
ASX 200’s 16.9% gain.
The decision to raise
additional capital took analysts
by surprise and they had mixed
views on what the raising
which focuses on property
development, investment and
capital management in Asia
Pacific, Europe and the US.
ART is a serviced-residence
REIT with a portfolio of 74
properties in 14 countries in
Asia Pacific, Europe and the US,
and is in the process of merging
with Ascendas Hospitality
Trust to create a trust with
combined assets of S$7.6bn.
Property developer CapitaLand
owns a 45% stake in ART, and a
28% stake in AH-Trust through
wholly owned subsidiary
Ascendas. Temasek owns a 40%
stake in CapitaLand.
Just as the US 10-year
Treasury yield has reduced
by more than 100bp this year
to around 1.5%, Singapore
government yields have
compressed tremendously
in the past few months. In
signifies.
Analysts at Goldman Sachs
said they were surprised since
the group said last month it
had a A$5bn surplus capital
position when it give its fiscal
first quarter trading update.
“Management has a very good track record in
effectively deploying its marginal capital, and so
we remain comfortable with today’s decision to
raise capital.”
“That said, management
has a very good track record
in effectively deploying its
marginal capital, and so we
remain comfortable with
today’s decision to raise
capital,” Goldman said in a
report.
UBS analyst Jonathan Mott
said the deal indicated that
Macquarie’s capital position
was not as strong as previously
indicated. Macquarie had a
common equity Tier 1 ratio
of 12% last month, well above
International Financing Review Asia August 31 2019
early May, 10-year Singapore
government securities were
yielding 2.32%, but that had
dropped to 1.73% by Monday.
That has proved
advantageous for local high-
quality issuers, as investors
including private bank clients
seek to deploy cash before
yields drop any lower.
ART took the opportunity to
lock in a low yield for a new
issue to refinance S$150m
perps that are callable on
October 27 and bear a much
higher coupon of 5%.
Mapletree, meanwhile,
benefited from investors who
have had to either move down
the credit curve or extend
duration in the search for yield
as it seized the 12-year sweet
spot. That has typically been
too long for many investors
outside pension funds and
the minimum 9.5% regulatory
requirement it is supposed to
meet from 2020 onwards.
As well as the placement,
the company will now launch
a security purchase plan
allowing eligible shareholders
to subscribe to up to A$15,000
of new shares each from
September 4–20. The Goldman
Sachs report expects the SPP to
raise a further A$300m–$600m.
The proceeds will contribute
to the bank’s projected A$1.6bn
capital needs in 2020, of
which a large portion will be
used by Macquarie Capital to
invest in renewable energy,
technology and infrastructure.
The commodities and global
markets division will use about
A$600m to maintain capital
For daily news stories
visit www.ifrasia.com
insurers, but the deal drew
demand from a mix of
investors.
Singapore accounts took
99% of the Mapletree bonds. By
investor type, fund managers
booked 50%, private banks
36% and agencies and banks a
combined 14%.
Singapore investors took
96% of the ART bonds, with
asset managers, banks and
corporates booking a combined
54% and private banks taking
46%, helped by a 25-cent rebate
for private bank orders.
Mapletree’s bonds will be
issued through Mapletree
Treasury Services with a
guarantee from Mapletree
Investments, while DBS Trustee
is issuer for ART’s bonds in its
capacity as trustee.
OCBC was sole bookrunner
for both deals. „
levels in light of regulatory
changes, and Macquarie’s
domestic banking unit will take
up A$100m of extra capital to
expand its mortgage business.
The Australian investment
bank also said last week that
it expected profit for the first
half ending September 30 to be
up 10%, although it maintained
its earlier forecast that its
annual profit would be slightly
down on the previous financial
year.
Macquarie, which is known
for its conservative forecasts
and has delivered higher
earnings for seven consecutive
years, had a blowout year
in its markets division last
year, which it said it does not
expect to repeat this year. Its
core annuity-style businesses,
which includes its investment
management arm, has shown
signs of a slowdown with net
profit down 4% last year.
Macquarie was the sole global
coordinator, and lead manager
and bookrunner on the
placement with Bank of America
Merrill Lynch and JP Morgan. „
9
 People
& Markets
TOP STORY EMERGING MARKETS

India resuscitates capital markets

Window reopens for block trades after tax changes shelved
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Who’s moving where...

„ Daniel Ng Meng 2012. He then worked „ CREDIT SUISSE has he was managing „ Brad Scott has Peel, who previously
Hua, head of at China Merchant hired Chirag Agrawal director. He become managing worked as a director
investment banking Securities (Hong and Nilaya Agrawalla previously worked at director and head of for DCM at ASB Bank,
at BOC INTERNATIONAL, Kong) as head of as directors for Goldman Sachs and debt capital markets Commonwealth Bank
is to retire from the investment banking investment banking Deutsche Bank. at BANK OF CHINA in of Australia’s New
bank. before returning to and capital markets Agrawalla was most Sydney after leaving Zealand subsidiary,
Ng first joined BOCI, BOCI in 2016 to take in India. recently an executive National Australia having performed
the Hong Kong up the role of head They report to Gaurav director at Goldman Bank, where he was a similar role in
investment banking of IB. Pradhan and Sumit Sachs having joined director for corporate Deutsche Bank’s
arm of Bank of China, Ng will leave the Jalan, co-heads of from JP Morgan debt capital markets Sydney office for
in 2004 and rose bank after serving his India IBCM. around 18 months origination for seven almost a decade.
to vice-chairman of notice period. Agrawal has spent ago. He spent 10 years. Both Scott and Peel
investment banking the past decade years at JP Morgan. Scott was replaced remain based in
before leaving in at Jefferies, where at NAB by Brad Sydney.

10 International Financing Review Asia August 31 2019

 Please send job moves to
peoplemarkets@thomsonreuters.com

– MAZAGON DOCK SHIPBUILDERSûINDIAN RAILWAY
CATERING AND TOURISM CORPORATION and INDIAN
RENEWABLE ENERGY DEVELOPMENT AGENCY – are
MEETINGûINVESTORSûTOûGAUGEûDEMANDûFORû
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S ANURADHA, KRISHNA MERCHANT TRANSFERSûOFûATûLEASTû-BNû53M û ROZANNA LATIFF

Please contact us if you have information about job moves: peoplemarkets@thomsonreuters.com

„ COMMONWEALTH CBA in 2016 and „ Morgan Stanley’s Stanley colleagues at „ Chin Ping Chia, Chia left MSCI in May
BANK OF AUSTRALIA has overseen the former head of the Shenzhen-based MSCI’s former after 18 years with the
has made two bank’s response to foreign exchange startup. The company head of research US index provider.
appointments to its recommendations and derivatives was founded two for Asia Pacific, has Last year, MSCI
executive committee from last year’s report trading in Asia, years ago by five resurfaced at INVESCO. began adding China
with Carmel Mulhern into governance Jeffrey Wang, has Morgan Stanley Chia has joined the A-shares to its
joining as general and culture by the joined cryptocurrency traders including global investment emerging markets
counsel and Scott prudential regulator trading company Michael Wu, who firm as head of index, which was
Wharton appointed following a money AMBER GROUP as its Wang once hired as business strategy widely touted as the
to the newly created laundering scandal. Americas head. a trader at Morgan and development biggest endorsement
position of group Mulhern is due to Wang, who will be Stanley. for China A-share so far of Beijing’s
executive for start in January next based in Vancouver, Wang worked at investment. He efforts to open up its
programme delivery. year. She joins from is joining several of HSBC prior to Morgan continues to be based capital markets.
Wharton joined Telstra. his former Morgan Stanley. in Hong Kong.

International Financing Review Asia August 31 2019 11

 People
& Markets
Credit Suisse PRIVATEûBANKINGûADVISORYûUNDERWRITINGû
ANDûlNANCING CSRC issues
merges %ARLIERûTHISûYEARû9VES !LAINû
3OMMERHALDERûWASûAPPOINTEDûHEADûOFû draft rules on
syndicate teams !0!#ûTRADINGûSOLUTIONSûAûNEWLYûCREATEDû
POSITIONûTHATûGIVESûHIMûOVERSIGHTûOFûTHEû A-share spin-offs
BANKSûlNANCINGûANDûMARKETSûDIVISIONSûINû
CREDIT SUISSEûHASûMERGEDûITSûLOANûANDûBONDû THEûREGIONû4HEûLATTERûDIVISIONûHASûSTRUGGLEDû #HINASûSECURITIESûREGULATORûHASûISSUEDûDRAFTû
SYNDICATEûTEAMSûINû!SIAûTHEûLATESTûEFFORTûBYû TOûTURNûAûREGULARûPROlTûDESPITEûUNDERGOINGû RULESûTOûALLOWû! SHAREûCOMPANIESûTOûSPINûOFFû
THEû3WISSûBANKûTOûMOREûCLOSELYûINTEGRATEûITSû AûRESTRUCTURINGûTWOûYEARSûAGO UNITSûTHROUGHûANû)0/ûORûBACKDOORûLISTINGûFORû
INVESTMENTûBANKINGûUNIT 4HEûSHIFTûTOWARDSûAûMOREûGENERALISTû THEûlRSTûTIME
4HEûCOMBINEDûDEBTûSYNDICATEûTEAMûWILLû APPROACHûISûNOTûUNIQUEûTOû#REDITû3UISSEû 4HEûPROPOSEDûRULESûRELEASEDûBYûTHEû
BEûHEADEDûBYûTerence ChiaûWHOûJOINEDûINû ESPECIALLYûASûMOREûBANKSûHAVEûMOVEDû #HINAû3ECURITIESû2EGULATORYû#OMMISSIONûONû
ûASûHEADûOFûDEBTûSYNDICATEûFORû!SIAû TOWARDSûAûSECTORûCOVERAGEûMODELûOFTENû !UGUSTûûWOULDûALLOWûLISTEDûCOMPANIESû
0ACIlCûFROMû#ITIGROUPûWHEREûHEûWASûCO REQUIRINGûSENIORûBANKERSûTOûSELLûTHEûFULLû TOûSPINûOFFûSUBSIDIARIESûONûALLûOFûTHEû
HEADûOFûAûSIMILARûDEPARTMENT SUITEûOFûPRODUCTS MAINLANDSû! SHAREûSTOCKûMARKETS
Sergio MoritaûWHOûWASûHIREDûLASTû %ARLIERûTHISûYEARû5"3ûMERGEDûITSûDEBTû !TûLEASTûNINEû! SHAREûLISTEDûCOMPANIESû
YEARûFROMû".0û0ARIBASûASûHEADûOFûLOANû CAPITALûMARKETSûANDûLEVERAGEDûCAPITALûMARKETSû HAVEûSAIDûTHEYûPLANûTOûSPINûOFFûUNITSûINûTHEû
SYNDICATIONûANDûDISTRIBUTIONûFORû!0!#ûWILLû TEAMSûGLOBALLYûINTOûAûSINGLEûENTITYû'AETANOû DOMESTICûMARKETSûSINCEûREGULATORSûHINTEDû
NOWûREPORTûTOû#HIAû#HIAûMAINTAINSûHISû "ASSOLINOûWASûAPPOINTEDûHEADûOFûTHEû$#-û INû*ANUARYûTHATû3HANGHAISûNEWûTECHûBOARDû
REPORTINGûLINEûTOû#HRISû(OWEûHEADûOFûlXEDû BUSINESSûINû!0!#ûANDû$EEPAKû$ANGAYACHû WOULDûALLOWûTHEûMOVEûONCEûAûCOMPANYû
INCOMEûFORû!0!# REGIONALûHEADûOFûLEVERAGEDûCAPITALûMARKETS REACHESûAûCERTAINûSIZE
#REDITû3UISSEûHASûWORKEDûTOûBETTERûALIGNû #REDITû3UISSEûHASûALSOûAPPOINTEDûLewis )Nû!PRILû3HENZHEN LISTEDûPRINTERûTUNGKONG
ITSûDISPARATEûBUSINESSESûINûTHEûREGIONûSINCEû Wong and Riddhi Shah ASûCO HEADSûOFûTHEû SAIDûITûWASûCONSIDERINGûAûSEPARATEûLISTINGûFORû
#%/û4IDJANEû4HIAMûOUTLINEDûHISûSTRATEGYûFORû !0!#ûlNANCINGûGROUPû"OTHû7ONGûANDû WHOLLYûOWNEDûCLOUDûSTORAGEûUNITûTUNGKONG
THEûBANKûINûûWHICHûINVOLVEDûSETTINGû 3HAHûWILLûREPORTûTOû3OMMERHALDER RUIYUN DATA TECHNOLOGYûWITHûTHEû3TARûBOARDû
UPûAûSTANDALONEû!SIANûDIVISIONûWITHûWEALTHû #ARSTENû3TOEHRûWHOûWASûHEADûOFûTHEû ITSûPREFERREDûVENUE
MANAGEMENTûATûITSûCORE !0!#ûlNANCINGûDIVISIONûREMAINSû'REATERû h-ARKETûPARTICIPANTSûASSUMEDûTHATûTHEû
)NûûITûSETûUPûITSûWEALTHûMANAGEMENTû #HINAû#%/ #HINESEûREGULATORûWOULDûBRINGûTHEûREFORMû
ANDûCONNECTEDûGROUPûENCOMPASSINGû THOMAS BLOTT ONLYûTOûTHEûTECHûBOARDûBUTûTHEûSCOPEûOFûTHEû
DRAFTûRULESûGOESûBEYONDûTHOSEûEXPECTATIONSû
"ESIDESûTHEûRULESûALSOûWELCOMEûBACKDOORû

JP Morgan DAYûOPERATIONS
)Nû-ARCHû*0û-ORGANûRECEIVEDû
LISTINGSûINûADDITIONûTOû)0/SvûSAIDûAûBANKER
5NDERûTHEûPROPOSEDûRULESûCOMPANIESû

appoints China PRELIMINARYûAPPROVALûFROMû#HINASû

SECURITIESûREGULATORûTOûSETûUPûAûMAJORITY
THATûHAVEûBEENûLISTEDûFORûMOREûTHANûTHREEû
YEARSûANDûHAVEûBEENûPROlTABLEûFORûTHREEû

JV directors OWNEDû*6û)NûûTHEûBANKûWALKEDû

AWAYûFROMûITSûPREVIOUSû*6ûWITHû&IRSTû
CONSECUTIVEûYEARSûCANûSPINûOFFûAûSUBSIDIARYû
%XCLUDINGûASSETSûOFûTHEûPROPOSEDûSPIN

#APITALû3ECURITIESûREPORTEDLYûDUEûTOû OFFûTHEûAGGREGATEûNETûPROlTûATTRIBUTABLEû
JP MORGANûHASûAPPOINTEDûSEVERALûDIRECTORSû DISAGREEMENTSûWITHûITSûPARTNER TOûSHAREHOLDERSûSHOULDûBEûNOTûLESSûTHANû
FORûITSûNEWû#HINAûSECURITIESûJOINTûVENTUREû 'LOBALûBANKSûAREûCURRENTLYûNEGOTIATINGûTOû 2MBBNû53M ûFORûTHEûTHREEûYEARS
*0û-ORGANû3ECURITIESû#HINA  RAISEûTHEIRûSHAREHOLDINGSûINûTHEIRûEXISTINGû 4HEûSCALEûOFûANYûSPIN
OFFûISûALSOûRESTRICTEDû
David LiûSENIORûCOUNTRYûOFlCERûFORû#HINAû *6SûORûSTARTûPARTNERSHIPSûFROMûSCRATCHû TOûNOûMOREûTHANûûOFûTHEûPARENTû
ANDûVICEûCHAIRMANûOFûGLOBALûBANKINGûPark AFTERûTHEû#HINAû3ECURITIESû2EGULATORYû COMPANYSûNETûPROlTûANDûûOFûITSûNETû
PuûTHEû*6SûHEADûOFûINVESTMENTûBANKINGû #OMMISSIONûLASTûYEARûRAISEDûTHEûCAPûONû ASSETSûINûTHEûLATESTûYEAR
and Stephen DavisonûHEADûOFû#HINAûSTRATEGYû FOREIGNûOWNERSHIPûTOû 3ENIORûMANAGEMENTûANDûEMPLOYEESûOFû
ANDûCHIEFûOFûSTAFFûTOûTHEû#HINAû#%/ûAREû 5"3ûSOûFARûISûTHEûONLYûFOREIGNûBANKûTHATû THEûPARENTûCOMPANYûANDûTHEûPROPOSEDû
AMONGûTHEûDIRECTORS HASûACQUIREDûAûMAJORITYûSTAKEûUNDERûTHEû SPIN
OFFûCANNOTûHOLDûMOREûTHANûûOFûTHEû
4HEûOTHERû*6ûSHAREHOLDERSûAREûALSOû NEWûRULESû(3"#ûWHICHûINVESTEDûUNDERû SPIN
OFFSûSHAREûCAPITALûBEFOREûTHEû)0/
REPRESENTEDûAMONGûTHEûDIRECTORSû4HESEû AûSPECIlCûTRADEûAGREEMENTûBETWEENû !NûANALYSTûATûAûDOMESTICûBROKERAGEûSAIDû
INCLUDEûLiu HongûCHAIRMANûOFû3HANGHAIû #HINAû(ONGû+ONGûANDû-ACAUûLAUNCHEDûAû THEûTHRESHOLDSûWEREûREASONABLEûNOTINGû
7AIGAOQIAOû&REEû4RADEû:ONEû'ROUPûANDû MAJORITY
OWNEDû*6ûINû$ECEMBERû THATûTHEûRULESûAREûSIMILARûTOûTHOSEûINû(ONGû
Zhou XiaoqiongûCHAIRMANûOFû3HENZHENû -EANWHILEû#REDITû3UISSEûANDû-ORGANû +ONG
-AILANDEû%QUITYû)NVESTMENTû-ANAGEMENTû 3TANLEYûHAVEûBOTHûAGREEDûWITHûTHEIRû ,ISTEDûCOMPANIESûAREûNOTûALLOWEDûTOûSPINû
,IUûHASûALSOûBEENûAPPOINTEDûVICEûCHAIRMAN PARTNERSûTOûTAKEûMAJORITYûPOSITIONSûINûTHEIRû OFFûUNITSûTHATûHAVEûBEENûACQUIREDûORûFUNDEDû
*0û-ORGANûHASûYETûTOûANNOUNCEûAûHEADû *6Sû%ARLIERûTHISûMONTHû'OLDMANû3ACHSûALSOû THROUGHû)0/SûORûOTHERûFUNDRAISINGûMETHODSû
OFûTHEû*6û,ASTûYEARûTHEûBANKSûFORMERû APPLIEDûTOûINCREASEûITSûSTAKEûTOû INûTHEûPASTûTHREEûYEARSû3UBSIDIARIESûTHATû
(ONGû+ONG
BASEDûCO
HEADûOFûGLOBALûEQUITIESû .OMURAûWHICHûISûLAUNCHINGûAû*6ûFROMû ENGAGEûINûlNANCIALûBUSINESSESûCANNOTûBEû
ANDûPRIMEûSERVICESû-ARKû,EUNGûWASû
APPOINTEDû#HINAû#%/û(EûISûEXPECTEDûTOû
HAVEûOVERSIGHTûOFûTHEû*6ûBUTûTHEûBANKûWILLû
APPOINTûAûSEPARATEûHEADûTOûRUNûTHEûDAY
TO
THOMAS BLOTT, KAREN TIAN
12
SCRATCHûMUCHûLIKEû*0û-ORGANûALSOûRECEIVEDû
PRELIMINARYûAPPROVALûINû-ARCHûFORûTHEûNEWû
ENTITY
KAREN TIAN, FIONA LAU
International Financing Review Asia August 31 2019
SPUNûOFFûANDûLISTEDûSEPARATELY
4HEûPUBLICûCONSULTATIONûPERIODûONûTHEû
DRAFTûRULESûWILLûRUNûUNTILû3EPTEMBERû
 Please send job moves to
peoplemarkets@thomsonreuters.com

BNP Paribas 2EUTERSûREPORTEDûLASTûMONTHûTHATû

$EUTSCHESûDERIVATIVESûEXPOSUREûISûTYINGûUPû
IN BRIEF

eyes Deutsche's CAPITALûTHATûCOULDûHAVEûGENERATEDûINCOMEû

OFûõMû53M ûAûYEARû2EUTERSûALSOû
NAFMII
Foreign banks to act as lead underwriters

derivatives book REPORTEDûTHEûBANKûHASûSETûASIDEûOVERûõBNû

TOûCOVERûTHEûCOSTûOFûOFmOADINGûDERIVATIVESû China has taken another step forward in the
MOVEDûTOûITSûSO
CALLEDûhBADûBANKvûORûCAPITALû opening up of its capital markets with a move to
BNP PARIBASûPLANSûTOûBIDûFORûDEUTSCHE BANK’s RESTRUCTURINGûUNITûTOûBEûWOUNDûDOWNûORûSOLD allow global banks to act as lead underwriters in
EQUITYûDERIVATIVESûBOOKûANDûISûHOPEFULûITûCANû 4HEûRESTRUCTURINGûHASûSEENûTHEûBANKû its vast interbank bond market.
BEATûOFFûRIVALûBIDDERSûTOûSECUREûAûDEALûINûTHEû HIVEûOFFûõBNûOFûASSETSûINTOûTHEûBADûBANKû The National Association of Financial Market
NEXTûFEWûWEEKSûACCORDINGûTOûSOURCESûFAMILIARû %QUITIESûINCLUDINGûEQUITYûDERIVATIVESû Institutional Investors said that it would begin
WITHûTHEûMATTER ACCOUNTEDûFORûAROUNDûõBNûOFûTHOSEûASSETSû accepting applications from foreign banks
$EUTSCHEûISûSELLINGûTHEûPORTFOLIOûASûPARTûOFû &IXED
INCOMEûASSETSûINCLUDINGûLONG
DATEDû for type A lead underwriting licences, which
AûRESTRUCTURINGûTHATûWILLûSEEûITûEXITûEQUITIESû INTERESTûRATEûANDûCREDITûDERIVATIVESûACCOUNTEDû would allow them to lead sales of all forms of
TRADINGûANDûOTHERûUNWANTEDûBUSINESSESûANDû FORûõBN corporate debt including negotiable certificates
4HEûEQUITYûDERIVATIVESûAREûSHORT
DATEDû of deposit and asset-backed notes.
ANDûEXPECTEDûTOûATTRACTûAûLOTûOFûINTERESTû NAFMII, the main regulator for non-financial
Deutsche is under pressure to
complete the prime brokerage
deal quickly or risk losing
DATEDûINTERESTûRATEûANDûCREDITû
clients. Barclays is looking to
FROMûBUYERSûMEANINGû$EUTSCHEûMAYûNOTû
HAVEûTOûTAKEûAûDISCOUNTûTOûOFmOADûTHEMû4HEû
BANKSûLONGER
underwriters only on Panda bonds, referred to
DERIVATIVESûAREûEXPECTEDûTOûBEûMUCHûHARDERû
bonds in the interbank market, has so far
restricted foreign banks to acting as lead
as type B underwriting licences. HSBC was the
take on a US$20bn portion of TOûSELLûASûTHEYûREQUIREûHIGHûLEVELSûOFûCAPITALû first to receive such a licence in 2017 followed
TOûBEûHELDûAGAINSTûTHEMûANDûCOULDûREQUIREû by Standard Chartered and BNP Paribas a year
the US$200bn business.
DEEPûWRITEDOWNSûSOURCESûFAMILIARûWITHûTHEû later. The three banks plus Citigroup, Deutsche
SITUATIONûSAID Bank and JP Morgan also hold licences to act
SHEDûûSTAFFûGLOBALLYû#%/û#HRISTIANû ".0û0ARIBASûEXPRESSEDûITSûINTERESTûINû as more junior syndicate members on corporate
3EWINGûISûHOPINGûTHEûPLANûWILLûTURNûAROUNDû $EUTSCHESûEQUITYûDERIVATIVESûBUSINESSûEARLIERû bonds.
THEûBANKûWHOSEûSHARESûHITûAûRECORDûLOWûINû THISûYEARûBUTûTHEû'ERMANûLENDERûDECIDEDû NAFMII laid out several criteria banks need
!UGUST AGAINSTûENTERINGûINTOûEXCLUSIVEûTALKSûHAVINGû to meet for the type A underwriting licence.
$EUTSCHEûPLANSûTOûAUCTIONûITSûEQUITYû ALSOûRECEIVEDûINTERESTûFROMûOTHERûPARTIESû Applicants must be designated global
DERIVATIVESûPORTFOLIOûINû3EPTEMBERûHAVINGû SOURCESûTOLDû2EUTERS systemically important banks, need to have
RECEIVEDûSIGNIlCANTûEXPRESSIONSûOFûINTERESTû $EUTSCHEûISûUNDERûPRESSUREûTOûCOMPLETEû underwritten at least US$20bn of bonds
FROMûBANKSûPRIVATEûEQUITYûlRMSûANDûHEDGEû THEûPRIMEûBROKERAGEûDEALûQUICKLYûORûRISKû globally on average over the past three years
FUNDSûTHEûSOURCESûTOLDû2EUTERSû)TûMAYûSELLû LOSINGûCLIENTSû"ARCLAYSûISûLOOKINGûTOûTAKEûONûAû and must have held a licence to act as part of
THEûBOOKûINûSEPARATEûTRANCHESûRATHERûTHANûINû 53BNûPORTIONûOFûTHEû53BNûBUSINESSû the underwriting syndicate for corporate bonds
ITSûENTIRETYûTHEYûSAID SOURCESûTOLDû2EUTERSûLASTûMONTH for at least a year, among other conditions.
".0û0ARIBASûISûALREADYûCLOSEûTOûTAKINGû $EUTSCHEûPLANSûTOûCLOSEûTHEûPRIMEû
CONTROLûOFû$EUTSCHESûPRIMEûBUSINESSû!û BROKERAGEûDEALûINûTHEûlRSTûHALFûOFû3EPTEMBERû Barclays
PRELIMINARYûDEALûWASûSTRUCKûINû*ULYûWHICHûISû ANDûTOûBEGINûTHEûAUCTIONûOFûITSûEQUITYû Expansion into Australian equities
EXPECTEDûTOûBEûFORMALISEDûINûEARLYû3EPTEMBERû DERIVATIVESûBOOKûSHORTLYûAFTERWARDSûTHEû
!NYûEQUITYûDERIVATIVESûDEALûWOULDûBEûSEPARATEû SOURCESûSAIDû4HEûDEALSûAREûEXPECTEDûTOûTAKEû BARCLAYS has made a further push into Australia
FROMûTHATûTRANSACTIONûTHEûSOURCESûSAID MONTHSûTOûCOMPLETEûASûBUYERSûTAKEûOVERû after it was given the go-ahead to begin trading
".0û0ARIBASûANDû$EUTSCHEûDECLINEDûTOû INDIVIDUALûCLIENTûACCOUNTS shares Down Under by the local stock exchange
COMMENT MATT SCUFFHAM operator.

International Financing Review Asia August 31 2019 13

 People
& Markets
Barclays Capital Asia has been admitted as
a foreign ASX market participant, allowing
it to trade shares from its Hong Kong-based
subsidiary without going through a local broker.
SK Lee, who runs prime services in the region,
will oversee the business. BNP Paribas will
provide clearing services for Barclays’ trades.
Last year, Barclays reopened an office in Sydney
only two years after closing down its operations
in Australia. Paul Early and Richard Satchwell
were appointed joint heads.
In 2016, Barclays pulled back from cash equities
in Asia, although it has retained its electronic
execution-only services as well as derivatives
and prime brokerage.
AMP
One-notch downgrade by S&P
S&P has downgraded the credit rating of AMP
one notch to BBB+ on the back of the Australian
financial services company’s plans to revive the
sale of its life insurance business.
AMP detailed a three-year transformation
plan this month alongside plans to sell its life
insurance unit to the UK’s Resolution Life for a
reduced figure of A$3bn (US$2.03bn).
A previous deal for a total consideration of
A$3.3bn collapsed last month after New
Zealand’s central bank asked the UK company
to ring-fence its assets held in New Zealand.
S&P said it had lowered AMP’s rating because
the sale of the company’s life insurance business
would reduce revenue diversification and
increase its reliance upon its troubled wealth
and investment management operations as well
as its small domestic banking franchise.
The rating agency said AMP’s outlook was
negative due to potential further pressures
on the group’s capitalisation from possible
further legal action and risks associated with
implementing a new strategy.
AMP has undergone a bruising 18 months
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14
following revelations stemming from the
country’s Royal Commission inquiry including
that it had doctored a supposedly independent
report to the corporate regulator about charging
customers for advice they never received.
The revelations led to the resignation of
its chairman, chief executive and several
other board members, triggered a wave of
withdrawals from angry customers and saw the
company’s market capitalisation plummet by
almost 70% since the inquiry began last year.
Earlier this month, AMP raised A$650m
through an institutional share placement to
fund a turnaround plan that includes growing
its banking and investment management arms
by double-digits over the medium-term and
potentially selling off its New Zealand wealth
management unit.
People's Bank of China
T+3 settlement for bonds introduced
China will extend the settlement period for
foreign institutional investors trading in the
interbank bond market to T+3.
In a joint statement issued on August 23, China
Foreign Exchange Trade System, China Central
Depository and Clearing and Shanghai Clearing
House said that foreign investors would still
be able to opt for existing settlement cycles,
namely T+0, T+1 and T+2.
The extended settlement period applies to spot
bond transactions, pledge-style repo, outright
repo and bond lending, the joint statement said.
HSBC said last Monday said that it had
completed the first T+3 trade in the interbank
bond market involving an overseas institutional
investor.
A spokesperson for HSBC said that the trade
was carried out via CIBM direct and also
involved Nomura and Sumitomo Mitsui Banking
Corporation. The spokesperson declined to
provide further details on the size of the trade
International Financing Review Asia August 31 2019
and the company whose bonds were traded.
The Asia Securities Industry and Financial
Markets Association said in a paper last month
that extending the settlement period to T+3
would help attract more foreign institutional
investors by reducing settlement risk.
The move by Beijing also comes after index
provider FTSE Russell confirmed in April that
it was considering adding Chinese government
bonds to its flagship World Government Bond
index. FTSE Russell considers entry into the
index based on market accessibility factors such
as the settlement and custody regime.
In April, Chinese government and policy bank
bonds were added to the Bloomberg Barclays
Global Aggregate index, the country’s first
inclusion in a major fixed-income index.
MSCI
A-share weighting in EM index lifted
MSCI increased the market capitalisation
weighting of China A-shares in its benchmark
emerging markets index last week, the second
of three steps outlined earlier this year that will
eventually see mainland Chinese shares given a
20% weighting.
The US index provider said in an update earlier
this month that the market cap weighting for
the 260 existing A-shares would be increased
to 15% from 10%. It also said it would add eight
new stocks to the index with an initial weighting
of 15%.
MSCI plans to increase the weighting further in
November when it will reach 20%. It said back
in March that upon completion there will be 253
large-cap and 168 mid-cap China A-shares in the
index, equivalent to 3.3% of the overall index.
The changes follow last year’s landmark
inclusion of A-shares in the emerging markets
index, which at the time was interpreted as the
biggest endorsement yet of Beijing’s efforts to
open up its capital markets to foreign investors.
 Interview

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International Financing Review Asia August 31 2019 15


AUSTRALIA
DEBT CAPITAL MARKETS
› PACIFIC NATIONAL TAPS BENCHMARK
PACIFIC NATIONAL HOLDINGS, rated BBB–/BBB–
(S&P/Fitch), has mandated BNP Paribas, CBA,
Credit Suisse, MUFG and NAB for a potential
10-year benchmark Australian dollar,
sterling or US dollar Reg S bond offering
off the rail freight operator’s A$3bn
(US$1.04bn) MTN programme.
An Australian, Asian and UK roadshow
starts on September 2 following on from
investor updates in London, Geneva and
Zurich in March that were arranged by
Credit Suisse.
Pacific National Holdings has an
outstanding US$600m 4.625% September
2020 Eurobond.
› ORIGIN TARGETS REPLACEMENT EMTN
ORIGIN ENERGY,rated Baa2/BBB (Moody’s/S&P),
has mandated BNP Paribas, Citigroup and
Goldman Sachs to arrange investor meetings
and calls in Europe beginning September 2
for a potential 10 to 12-year euro or sterling
Reg S bond offering under its EMTN
Programme.
The integrated Australian energy
company has an outstanding €500m
(US$555m) 2.875% Eurobond set to mature
on October 11.
› BEN BANK FIVE-YEAR NETS A$500M
BENDIGO AND ADELAIDE BANK (A3/BBB+/A–) gained
limited traction for a dual-tranche five-year
senior unsecured note offering via joint
lead managers ANZ, NAB, UBS and Westpac.
The regional lender raised A$500m last
Wednesday, below the A$750m maximum
indicative issue size at margins at the wide
end of guidance.
A A$300m floating-rate note came at
three-month BBSW plus 97bp versus
95bp–97bp price talk, while a A$200m 1.7%
fixed-rate note priced at 99.869 for a yield
of 1.7275%, 97bp wide of asset swaps.
Pricing was 20bp wider than the 77bp
margin paid by major bank ANZ (Aa3/AA–/
AA–) for a A$1.8bn dual-tranche five-year
issue on August 23.
At its previous senior unsecured sale in
October 2018 BEN Bank issued a A$500m
16
COUNTRY REPORT
Australia 16 China 17 Hong Kong 22 India 23 Indonesia 26 Japan 27 Malaysia 28
New Zealand 29 Philippines 29 Singapore 30 South Korea 31 Thailand 32
3.25-year FRN that priced inside 103bp area
guidance at three-month BBSW plus 101bp.
› LIBERTY PRINTS A$200M FLOATER
LIBERTY FINANCIAL,rated BBB– (S&P), priced
a A$200m 3.5-year floating-rate note last
Thursday inside 265bp area guidance at
three-month BBSW plus 260bp.
Deutsche Bank, NAB and Westpac were joint
lead managers for the transaction, which had
an indicative minimum issue size of A$100m.
The speciality finance group, one of
the lowest rated regular visitors to the
Australian bond market, issued a A$200m
three-year FRN on February 26, priced at
three-month BBSW plus 325bp.
It previously sold a A$150m 5.1% three-
year MTN at asset swaps plus 300bp
in March 2018 that was subsequently
increased to A$225m.
In May 2017 Liberty had to ramp up
pricing by 50bp, to asset swaps plus 325bp,
for a A$200m three-year MTN, following a
one-notch S&P ratings downgrade to BBB–
just after announcing the deal.
› SUNCORP GOES SHORT
SUNCORP-METWAY (A1/A+/A+) last Thursday
raised A$350m from a one-year floating-
rate note offering priced inside 43bp area
guidance at three-month BBSW plus 40bp.
ANZ and CBA were joint bookrunners
on the first domestic one-year sale since
higher-rated Royal Bank of Canada, Sydney
branch, rated Aa2/AA– (Moody’s/S&P),
issued a A$625m FRN on July 25 which
priced 28bp wide of three-month BBSW.
› MACQUARIE ADDS A$115M
MACQUARIE BANK (A2/A/A) tapped its June 21
2022 senior unsecured floating-rate note for
A$115m last Thursday, bringing the total
size to A$1.265bn.
The reopening, via sole lead manager
Westpac, priced at 100.146 for a reoffer
spread of three-month BBSW plus 70bp.
› RENTENBANK TAPS FOR A$200M
German agency RENTENBANK (Aaa/AAA/AAA)
tapped its 3.2% May 25 2029 Kangaroo bond
for A$200m last Tuesday to increase the
issue size to A$450m.
JP Morgan was sole lead manager for the
reopening, which priced at 116.411 to yield
1.39%, 44bp wide of asset swaps and 48.5bp
over the April 2029 ACGB.
International Financing Review Asia August 31 2019
STRUCTURED FINANCE
› ZIP BREAKS ABS GROUND
Financial technology company ZIP broke
new ground on August 23 with the first
Master Trust securitisation by a fintech
issuer in the Asia Pacific region.
The enlarged A$500m (US$340m) debut
ABS offering, ZIP MASTER TRUST SERIES 2019-
1, will refinance the funding of existing
receivables within Zip’s portfolio.
Zip offers point-of-sale credit and digital
payment services to the retail, education,
health and travel industries.
Arranger and sole lead manager NAB
said all the notes were significantly
oversubscribed.
The A$260m Class A1 notes priced at the
tight end of one-month BBSW plus 180bp–
200bp guidance.
The A$105m Class A2, A$50m Class B,
A$15m Class C and A$20m Class D notes
matched respective guidance of one-month
BBSW plus 240bp, 365bp, 540bp and 790bp.
The A$25m Class E notes priced at the
tight end of one-month BBSW plus 950bp–
1000bp price talk.
The transaction was completed by
A$25m of retained Class F notes.
All the notes have 2.0-year soft bullet
maturities while the Class A1 to E notes
have respective credit support of 48%, 27%,
17%, 14%, 10% and 5%.
Zip is the second public master-trust
issuer in Australia after Latitude Finance
which printed the inaugural trade in March
2017, a A$1bn credit card ABS, Credit Card
Loan Note Trust Series 2017-1.
Latitude returned in August 2017 for a
A$500m issue through Credit Card Loan
Note Trust Series 2017-2 before another
A$500m sale this March via Latitude
Australia Credit Card Loan Note Trust,
Series 2018-1.
Latitude is now planning an indicative
A$500m Credit Card Master Trust ABS in
Reg S format.
Master trusts are a good fit for ABS that
are revolving in nature. They tend to have
soft bullet maturities rather than weighted-
average lives, which attracts domestic and
foreign investors only willing or able to
purchase the former.
› LATITUDE CONCLUDES REG S ROADSHOW
will complete
LATITUDE FINANCE AUSTRALIA
investor meetings in Mebourne on
September 2 for an indicative A$500m

Reg S securitisation under its Credit Card
Master Trust programme, LATITUDE AUSTRALIA
CREDIT CARD LOAN NOTE TRUST, SERIES 2019-1.
Meetings have already been held in
Sydney and London for Latitude’s inaugural
ABS offering in Reg S format.
Bank of America Merrill Lynch is arranger
and joint lead manager with Deutsche Bank,
NAB and Societe Generale.
Latitude Finance issued the first public
master-trust securitisation in Australia
in March 2017, a A$1bn credit card ABS,
Credit Card Loan Note Trust Series 2017-1.
It returned in August 2017 for a A$500m
issue through Credit Card Loan Note Trust
Series 2017-2 before another A$500m sale
in March 2018 via Latitude Australia Credit
Card Loan Note Trust, Series 2018-1.
Credit-card ABS are typically sold out
of master trusts, which purchase eligible
receivables from the sellers on a revolving
basis.
They tend to have soft bullet maturities
rather than weighted-average lives, which
attracts domestic and foreign investors only
willing or able to purchase the former.
› MYSTATE READIES A$400M RMBS
Tasmania’s MYSTATE BANK has mandated
Macquarie, NAB and Westpac to arrange
investor meetings in Sydney on September
2 and 3 for an indicative A$400m prime
RMBS from the issuer’s ConQuest
programme.
MyState Bank previously issued a no-
grow A$400m prime RMBS in March last
year, ConQuest 2018-1 Trust.
EQUITY CAPITAL MARKETS
› INTEGRAL COMPLETES INSTO RIGHTS
Australian radiology services company
INTEGRAL DIAGNOSTICS has raised A$41m
from the institutional portion of a A$72m
(US$48.5m) entitlement offer to part fund
the acquisition of Imaging Queensland.
The 1–for–5.91 rights offer had a 93%
take up. It was strongly supported by
eligible institutional shareholders. The
shortfall was oversubscribed by both
eligible institutional shareholders and new
institutional investors.
The company is issuing 26.6m shares,
or 17% of the existing shares on issue, at
A$2.71 each, representing a discount of 14%
to the pre-deal close of A$3.15 on August
23.
The retail portion of about A$31m will
run from September 2–20.
Proceeds will be used to help fund the
acquisition of Imaging Queensland for
A$104m, with the remainder to be funded
by debt and escrowed new ordinary
shares to be issued to the vendors at the
entitlement offer price at completion of the
acquisition.
Macquarie is the sole underwriter,
bookrunner and lead manager.
› PERENTI GLOBAL BLOCK FETCHES A$90M
Gresham Private Equity has raised A$90.2m
from a block in Australia’s PERENTI GLOBAL.
It sold 48m shares at A$1.88 each, equal
to the August 29 pre-deal close.
Perenti is a Perth-based mining
contractor formerly known as Ausdrill.
Following the transaction, Gresham,
previously Perenti’s second largest
shareholder, no longer has an interest in
the company.
Perenti Global shares closed up 6.1% at
A$1.995 last Friday. The stock is up 68%
year to date. The company, which acquired
underground mining contractor Barminco
last year, posted strong annual results last
Thursday.
JP Morgan is the sole manager on the deal.
CHINA
DEBT CAPITAL MARKETS
› CHANGCHUN URBAN PLANS BOND
CHANGCHUN URBAN DEVELOPMENT & INVESTMENT
HOLDINGS (GROUP), rated Baa1/BBB+ (Moody’s/
Fitch), has mandated banks to arrange
investor meetings in Hong Kong from
September 3.
Industrial Bank Hong Kong branch, BoCom
International, Guotai Junan International,
OCBC and CMBC Capital are joint global
coordinators. They are also joint
bookrunners with ICBC (Asia), ABC
International, Bank of China, CCB International,
CEB International, Standard Chartered, DBS,
Haitong International, China Industrial Securities
International and TF International. Changchun
Securities is structuring and finance adviser.
A Reg S offering of US dollar senior
unsecured bonds may follow, subject to
market conditions.
Wholly owned subsidiary Chang
Development International will issue the
bonds with a guarantee from the company.
The proposed bonds are expected to be
rated Baa1 by Moody’s.
Changchun Urban Development
& Investment Holdings (Group) is an
investment and financing vehicle in
Changchun City in Jilin province and
is wholly owned by the Changchun
International Financing Review Asia August 31 2019
COUNTRY REPORT CHINA
State-owned Assets Supervision and
Administration Commission. Its business
includes urban drainage pipelines,
engineering construction, water treatment
and financial services.
› CISI SELLS SHORT-TERM NOTES
CHINA INDUSTRIAL SECURITIES INTERNATIONAL
FINANCIAL GROUP last Monday priced US$200m
364-day notes at par to yield 5%, inside
initial guidance of 5.25% area.
Wholly owned subsidiary China
Industrial Securities International
Brokerage will guarantee the Reg S
securities, which mature on August 28
2020.
China Industrial Securities International,
China Minsheng Banking Corp Hong Kong
branch and Zhongtai International were joint
global coordinators. They were also joint
bookrunners with Industrial Bank Hong Kong
branch, Orient Securities (Hong Kong) and China
Everbright Securities (HK).
The Hong Kong-headquartered financial
services provider, which has China’s
Industrial Securities as its controlling
shareholder, plans to use the proceeds for
general corporate purposes.
› TIMES CHINA TAPS BONDS
Property developer TIMES CHINA HOLDINGS last
Wednesday tapped its US$400m 6.75% senior
notes due July 16 2023 for a further US$100m.
The bonds are rated B1/B+/BB–.
Haitong International, CCB International and
China Industrial Securities International led the
reopening, which priced at par and will
settle on September 4.
Proceeds will be used to refinance debt
and for general corporate purposes.
› ZHANGZHOU JIULONGJIANG HIRES
ZHANGZHOU JIULONGJIANG GROUP has mandated
banks to arrange investor meetings in
Singapore and Hong Kong. Meetings began
on August 30 and run until September 2.
Bank of China and Industrial Bank, Hong
Kong branch are joint global coordinators.
They are also joint bookrunners with
CCB International, CEB International, China
Citic Bank International, China Industrial
Securities International, CICC, China Minsheng
Banking Corp, Hong Kong branch, Guotai Junan
International, Haitong International, HSBC and
Huatai Financial Holdings (Hong Kong).
The proposed US dollar bonds are
expected to be rated BB+ by Fitch, in line
with the issuer.
The pharmaceutical and machinery
manufacturer is wholly owned by
Zhangzhou State-owned Assets Supervision
and Administration Commission.
17

BoCom Leasing goes tighter
„ Bonds Chinese leasing unit prints inside curve using new guarantee structure
BANK OF COMMUNICATIONS FINANCIAL LEASING (A2/
A–/A) drew a solid order book last Thursday
for US$600m of five-year senior unsecured
bonds in two tranches, despite tightening
pricing substantially during bookbuilding.
A US$200m 2.625% fixed-rate tranche
priced at 99.374 to yield 2.76%, equivalent to
Treasuries plus 135bp, inside initial guidance
of 165bp area.
A US$400m floating-rate tranche priced at
par with a coupon of three-month Libor plus
117.5bp, inside initial guidance of 150bp area.
Nomura’s sales and trading desk had
put fair value for the fixed-rate tranche at
Treasuries plus 145bp and for the floater at
Libor plus 125bp–130bp. However, it noted
that Chinese leasing subsidiaries offered an
attractive pick-up over their parent banks’
senior bonds.
“Anything that’s investment grade and pays
a bit of a pick-up is going to do well in this
market,” said a banker away from the deal.
Books were over US$900m from 24
accounts for the fixed-rate tranche, including
US$660m of demand from the leads. Asia
took 99% of the Reg S bonds and Europe 1%.
By investor type, banks booked 87%, fund
managers, insurers and others 12%, and
private banks 1%.
› AGRICULTURAL BANK TO ISSUE PERPS
AGRICULTURAL BANK OF CHINA plans to issue
Rmb35bn (US$4.88bn) of perpetual bonds to
replenish its capital, completing a Rmb120bn
issuance plan approved by financial
regulators, according to a public filing.
Bookbuilding starts on September 3 and
the settlement date is on September 5.
Citic Securities is the lead underwriter
and lead bookrunner, while ICBC, CICC,
Guotai Junan, China Securities, Bank of China
International, Everbright Securities, Huatai
Securities, Haitong Securities, China Merchants
Securities, Shenwan Hongyuan Securities and GF
Securities are joint underwriters.
China Chengxin has assigned a AAA
rating to the bonds and the issuer.
The bank issued Rmb85bn perpetual
bonds at 4.39% last month after deciding
not to raise the full Rmb120bn in one go.
The bonds were 2.5 times subscribed.
› GUANGXI FINANCIAL INVEST EYES NOTES
GUANGXI FINANCIAL INVESTMENT GROUP, rated AA+
by Shanghai Brilliance, is planning to raise
18
Books were over US$1.8bn from 53
accounts for the floater, including US$1.1bn
of demand from the leads. The geographical
distribution matched the fixed-rate tranche,
while by investor type banks took 64%, fund
managers and others 34%, and private
banks 2%.
Wholly owned subsidiary BoCom Leasing
Management Hong Kong will issue the
bonds off a US$3bn MTN programme with
the benefit of a keepwell deed and asset
purchase deed from BoCom Financial
Leasing, which will be required to purchase
assets from the issuer if it runs into difficulties
repaying the bonds.
This is a new offshore bond guarantee
structure for the group. Previously, offshore
units issued with either a guarantee from
BoCom Financial Leasing or a keepwell from
BoCom Leasing International.
The Reg S benchmark bonds have
expected ratings of A3/A (Moody’s/Fitch).
Bank of Communications, BoCom
International, Bank of China, DBS, HSBC,
Mizuho and Standard Chartered were joint
bookrunners.
The bonds were around 2bp tighter in
secondary trading.
DANIEL STANTON
up to Rmb1bn from 270-day short term
notes, with initial guidance of 4.2%–4.8%,
according to market sources.
The issuer is yet to make an official
announcement on the plan. The state-
owned investment vehicle in southwest
China is fully owned by the Guangxi
State-owned Assets Supervision and
Administration Commission.
The company has outstanding debt of
Rmb19.6bn, according to Refinitiv data.
› HAITONG SECURITIES ISSUES
HAITONG SECURITIESissued Rmb7bn of three-
year financial bonds at 3.39% last Thursday,
near the tighter end of initial guidance of
3%–4%, according to a public filing.
The bonds drew orders valued at
Rmb7.84bn from eight qualified investors.
ICBC was the lead underwriter and lead
bookrunner, while Agricultural Bank of China,
Bank of China, China Construction Bank, Bank of
Communications, China Merchants Bank, Postal
Savings Bank of China and Shanghai Pudong
Bank were joint underwriters.
Proceeds will be used to provide support
International Financing Review Asia August 31 2019
to non-bank institutions and ease liquidity
concerns.
China Chengxin has assigned a AAA
rating to both the issuer and the bonds.
› LGFVS FACING BIG MATURITIES - S&P
Local government financing vehicles in
China’s smaller cities are facing heavy debt
repayment pressure in the next three years,
according to a report by S&P.
Chinese LGFVs have around Rmb3.8trn of
onshore bonds due to mature in 2019-2021,
according to the rating agency.
Large banks may be willing to offer a hand
to help LGFVs from provincial governments
and top-tier cities refinance their debt, but
lower-tier borrowers – for instance, below the
prefectural city level – face the most risk, as
they have limited access to the capital market
and bank facilities, S&P said.
Some banks have been in talks with
LGFVs in Shanxi, Jiangsu, Yunnan, Hunan
and Guizhou provinces, where S&P
estimates that off-balance-sheet provincial
government debt over GDP reached
169.5%, 345.7%, 230.1%, 239.2% and 291.6%,
respectively, by the end of 2017.
While debt restructuring can reduce
some pressure for struggling borrowers,
S&P analyst Gloria Lu said it could take 10
years or more for some borrowers to bring
debts to a sustainable level.
Ultimately, repayment of most debt will
hinge on improving the fiscal income of local
and regional governments, such as through
land sales and higher taxation, Lu said.
S&P also warned that widespread defaults
or bankruptcies among high-profile LGFVs
would destabilise the financial system, if debt-
strapped local governments are unable to bail
out distressed LGFVs in a timely manner.
“For the next 12-18 months, LGFVs still
have systemic importance to the economy
and the financial system. Regulators are
likely to be assessing the implications,
practicality, and timing of letting go of
some insolvent LGFVs,” said Lu.
› UOB CHINA PLANS TIER 2 BONDS
UNITED OVERSEAS BANK CHINA is planning to raise
up to Rmb2bn from Tier 2 bonds to boost
its capital, according to market sources.
Books for the first tranche of the bonds
are expected to open next month, subject
to market conditions, with initial guidance
set at 150bp above China Development
Bank’s curve.
China Chengxin has assigned a AAA rating
to the issuer and a AA+ rating to the bonds.
The bank has yet to disclose information
about the plan.
A spokeswoman with the bank declined
to comment.

In March, corporate parent United
Overseas Bank issued a debut Rmb2bn
three-year Panda bond at 3.49%. The
first Panda offering from a Singaporean
issuer was 2.7 times oversubscribed,
receiving orders from asset managers and
commercial banks in Asia.
In April 2018, United Overseas Bank
China sold Rmb1bn three-year bonds at
4.93% in the onshore market.
› YUNNAN LGFV ISSUES NOTES
YUNNAN METROPOLITAN CONSTRUCTION INVESTMENT
GROUP issued Rmb1bn three-year medium-
term notes at 5.96% last Friday, near the
upper end of initial guidance of 5%–6%,
according to a public filing.
The issue did not attract strong demand
because of credit quality concerns. It drew
final orders from seven qualified investors,
said a banker close to the deal.
The local government financing vehicle
plans to use the proceeds to repay debts.
ICBC was the lead underwriter and lead
bookrunner, while China Minsheng Bank was
the joint underwriter.
Lianhe Credit has assigned a AAA rating
to both the issuer and the notes.
› ZHENJIANG LGFV EYES NOTES
ZHENJIANG CITY CONSTRUCTION INDUSTRY GROUP
plans to issue up to Rmb1bn three-year
medium-term notes, part of a Rmb4bn
programme the company registered with
financial regulators, according to a public
filing.
Bookbuilding starts on September 2 and
the settlement date is on September 4.
China Construction Bank is the lead
underwriter and lead bookrunner, while
Industrial Bank is the joint underwriter on
the deal.
Shanghai Brilliance assigned a AA+ rating
to both the issuer and the bonds.
The LGFV in Jiangsu province plans
to use the proceeds to repay debts of
subsidiaries.
SYNDICATED LOANS
› TIANJIN RAIL COMPLETES SCHULDSCHEIN
Chinese rail infrastructure operator
TIANJIN RAIL TRANSIT GROUP has raised €200m
(US$222m) from a 10-year Schuldschein,
becoming the first Chinese borrower to
use the private placement format to tap
Germany’s domestic loan market, according
to a press release from sole underwriter
Deutsche Bank.
The loan, which is governed by German
law and is used domestically for financing
or investment purposes, is also Tianjin
Rail’s first euro-denominated assignable
loan, the press release said. Investors
primarily comprised German banks, savings
banks and insurance companies looking for
a buy-and-hold investment.
“This transaction opens a new foreign
currency funding source for Chinese
sponsors in long-term asset sectors like
infrastructure and energy,” said Hunter
Xiong, head of the Belt & Road Initiative
office at Deutsche Bank. “We expect
Schuldschein loans to become a valuable
alternative international financing option
for more Chinese sponsors, particularly for
Belt & Road Initiative businesses.”
The Tianjin-based borrower offers urban
metro and railway construction, operation,
and maintenance services.
› MINSHENG FL IN THE MARKET
Minsheng Financial Leasing is seeking a
loan of up to US$125m for refinancing
purposes.
Emirates NBD is the sole mandated
lead arranger and bookrunner of the
transaction, which has a base size of
US$75m and carries a greenshoe option of
up to US$50m.
The loan offers an interest margin of
120bp over Libor and has an average life of
one year.
Banks have been invited to join with
tickets of US$30m or more for the MLA
title and a top-level all-in pricing of 170bp,
based on a 50bp fee; commitments of
US$20m–$29m for the lead arranger title
and an all-in pricing of 165bp, based on a
45bp fee; and tickets of US$10m–$19m for
the arranger title and an all-in pricing of
160bp, based on a 40bp fee.
Minsheng Financial Leasing is the
guarantor, while its wholly owned
subsidiary MINSHENG HONG KONG INTERNATIONAL
LEASING is the borrower.
In September 2018, the borrower and
guarantor obtained a US$510m three-year
loan from 14 lenders.
That three-year facility, arranged by
Credit Suisse and E. Sun Commercial Bank,
offered a top-level all-in pricing of 170bp
via an interest margin of 150bp over
Libor. China Minsheng Banking Corp was a
coordinator but did not lend.
› CIFI HOLDINGS LOAN ATTRACTS FOUR
Shanghai-headquartered and Hong Kong-
listed property developer CIFI HOLDINGS
(GROUP) has closed a US$364m-equivalent
3.5-year term loan after four banks joined
in syndication.
The loan is split into US$160m and
HK$1.598bn (US$204m) tranches. Signing
International Financing Review Asia August 31 2019
COUNTRY REPORT CHINA
was on August 19.
China Construction Bank (Asia) was the
mandated lead arranger and bookrunner
and the facility and security agent of the
financing, which paid a top-level all-in
pricing of 390bp based on an interest
margin of 310bp over Libor or Hibor and
an average life of 3.175 years.
CIFI Holdings is rated B1/BB/BB.
For full allocations, see www.ifrasia.com.
„ CORRECTION
In the story “Quartet funds Global Switch
LBO loan” published in our August 24
edition, we incorrectly stated that Bank
of America Merrill Lynch is a bookrunner
for the planned Hong Kong IPO of Global
Switch. This is not the case.
EQUITY CAPITAL MARKETS
› BANKS PITCH FOR PIPELINE COMPANY
Banks are pitching for roles on the
restructuring of a Chinese oil and gas
pipeline company which will house the
pipeline assets owned by China’s energy
giants, according to people with knowledge
of the matter.
A small group of banks have been invited
to pitch to be financial advisers on the
restructuring, said the people.
Bankers are hoping a mandate would
help them secure a role in the pipeline
company’s future IPO. Market participants
have estimated that the valuation of the
company, which is likely to be called CHINA
PIPELINE CORP, would be about Rmb300bn–
Rmb500bn (US$42bn–$70bn).
Given the complexity of the
restructuring, bankers said it is hard to
estimate when the IPO will happen.
“It will take them at least a year or so
to complete the restructuring, so it’s hard
to say when the IPO will come,” said one
of the bankers. “We expect the size of the
IPO to be bigger than that of China Tower
Corp.”
China Tower raised HK$58.8bn
(US$7.49bn) from a Hong Kong IPO in
August last year.
In March, the National Development
and Reform Commission announced a plan
to create a national oil and gas pipeline
company, the first public statement on a
reform that had been anticipated by the
energy industry.
The company is expected to house the
pipeline assets owned by Sinopec, China
National Petroleum Corp and China
National Offshore Oil Corp, helping
them to separate the cost of pipeline
transportation from the sale of oil and
gas.
19
 Earlier expectations were that the
pipeline company would be formed around
the middle of the year.
By the end of 2018, China had about
140,000 km of oil and gas pipelines, of
which 65% belonged to CNPC, 15% to
Sinopec and the rest to CNOOC.
› HENLIUS PRE-MARKETS IPO
Fosun-backed SHANGHAI HENLIUS BIOTECH started
pre-marketing last Monday for a Hong Kong
IPO of about US$500m.
The company is tentatively planning to
open books on September 9 if feedback
from investors is positive, said people close
to the deal.
Henlius, a subsidiary of Shanghai Fosun
Pharmaceutical and Fosun International,
has launched one drug commercially and
has more than 20 biologics drug candidates
in its pipeline, focusing on oncology and
autoimmune diseases.
Founded in 2010, the biopharmaceutical
company posted a loss of Rmb158m in the
first three months of 2019 from a loss of
Rmb67.8m in the same period in 2018. It
reported an annual loss of Rmb505m in
2018.
Bank of America Merrill Lynch, CICC,
Citigroup, CMB International and Fosun Hani
are the sponsors. UBS is the financial
adviser.
› BANK OF GUIZHOU ARRIVES
BANK OF GUIZHOU plans to start pre-marketing
a Hong Kong IPO of up to US$1bn as early
as this week, said people close to the deal.
The lender sought listing approval from
the Stock Exchange of Hong Kong last
Thursday, said the people.
Bank of Guizhou was formed in 2012
through the merger of three commercial
lenders in China’s south-western Guizhou
province.
It posted a net profit of Rmb957.4m for
the first quarter of 2019 on net interest
income of Rmb2.34bn. Its net profit for full-
year 2018 was Rmb2.87bn.
Its total assets stood at Rmb362bn as of
March.
Guizhou Provincial Finance Bureau is
the largest shareholder of Bank of Guizhou
with a 14.3% stake. Spirits maker China
Kweichow Moutai Winery is the second
largest with 14.1%.
ABC International, CCB International and
CLSA are the sponsors.
› 36KR PLANS US IPO
36KR, an information service that tracks
start-up fundraisings in China, is planning
to start pre-marketing a US IPO of
20
US$100m–$200m as early as September,
according to people close to the deal.
The current plan is to pre-market in
September but the final listing timetable
will depend on market conditions, said one
of the people.
CICC and Credit Suisse are leading the
transaction.
Founded in 2010, the Beijing-based
company has published more than 100,000
articles, according to its website.
› PHARMARON FILES FOR HK IPO
Shenzhen-listed medical contract research
company PHARMARON BEIJING has filed to the
Stock Exchange of Hong Kong for an IPO.
Pharmaron announced earlier this
month it plans to offer a maximum 15% of
the enlarged share capital in the H-share
offer.
The company’s current market
capitalisation is Rmb27.7bn.
Pharmaron provides laboratory services,
clinical development services and
chemistry, manufacturing and controls
services, with customers ranging from large
multinational pharmaceutical companies
to venture-backed start-ups and biotech
companies.
It posted a profit of Rmb157m for the
six months ended June 30, up 30% from
Rmb120m in the same period last year. It
had an annual profit of Rmb336m in 2018.
CLSA, Goldman Sachs and Orient Securities
are the joint sponsors.
› BLOOMAGE BIOTECH PASSES HEARING
BLOOMAGE BIOTECHNOLOGY has cleared a hearing
for a proposed Rmb3.15bn Shanghai Star
board IPO.
The company delisted from the Hong
Kong bourse in November 2017.
The deal is set to be the third largest
proposed float on the new tech board
behind that of China Railway Signal and
Communication (Rmb10.5bn) and Chinese
cloud service provider Ucloud Technology,
which plans to raise Rmb4.7bn. CRSC listed
on the new board among the first batch of
companies in July.
Bloomage, which produces hyaluronic
acid used in medical and skin care
products, is offering 49.6m A-shares, or not
less than 10% of its enlarged capital. There
is a 15% greenshoe.
Proceeds will be used to renovate an
R&D centre, build a new production
centre in Tianjin province, and expand the
company’s headquarters in Jinan, Shandong
province.
According to its pre-prospectus,
Bloomage’s net profit was Rmb424m in
2018, a 91% increase year on year, on
International Financing Review Asia August 31 2019
revenue of Rmb1.26bn.
Huatai United Securities is the sponsor.
› BPS CLEARS IPO HEARING
SHANGHAI BRIGHT POWER SEMICONDUCTOR
has cleared a hearing at the Shanghai
Stock Exchange for a tech board IPO of
Rmb710m.
The SSE had cancelled a previous hearing
set for July 23 because the company was
being sued.
The issuer's updated IPO filing said it
was being sued by Silergy Semiconductor
Technology (Hangzhou) for patent
infringement and that it received a
subpoena from the Hangzhou Intermediate
People’s Court on July 22.
The stock exchange did not disclose any
information on the lawsuit.
Bright Power Semiconductor, a power
management driver chip manufacturer,
plans to offer 15.4m A-shares, or 25% of the
enlarged capital.
GF Securities is the sponsor.
› CGN POWER'S A-SHARES SOAR ON DEBUT
CGN POWER made a stellar 44% gain on its
debut on the Shenzhen Stock Exchange
after it completed the largest A-share IPO in
more than a year.
The stock closed at Rmb3.59 on its first
trading day last Monday compared to the
IPO price of Rmb2.49, after the float raised
Rmb12.6bn. The shares rose further over
the week to close at Rmb4.79 last Thursday,
92% over the IPO price.
The performance was in contrast to CGN
Power’s H-shares in Hong Kong, which
were down 3.3% at HK$2.06 (Rmb1.87) on
August 26 amid a sell-off in the broader
market on a further escalation of the US-
China trade war. The Hang Seng Index
was down more than 3% at one point,
following a 2.4% drop in the US market on
August 23.
China’s largest nuclear power producer
sold half of the 5.05bn A-shares in the IPO
to eight strategic investors and the rest to
retail and institutional investors.
The company plans to use Rmb11bn
of the proceeds to build four nuclear
power units in the provinces of Guangdong
and Guangxi and the rest for working
capital.
CGN Power ran 22 nuclear power units
in China as of last December, 12 of which
were located in Guangdong province.
CICC was the sponsor and joint
bookrunner with China Development
Bank Securities, while China Securities
and Minsheng Securities. Guotai Junan and
BOC International (China) are the junior
bookrunners.

› CSRC APPROVES GUOSEN PLACEMENT
Shenzhen-listed GUOSEN SECURITIES has
received final written approval from the
China Securities Regulatory Commission
for a proposed Rmb15bn private
placement.
The brokerage plans to sell 1.64bn
shares to up to 10 investors. Shenzhen
Investment Holdings, Yunnan Hehe
(Group) and China Resources SZITIC
Trust have committed to buy 33.5%,
16.8% and 1% of the placement,
respectively. They will face lock-up
period of 12-60 months.
Shenzhen Investment Holdings,
owned by Shenzhen city’s State-owned
Assets Supervision and Administration
Commission, is the biggest shareholder in
the company with a 33.5% stake.
Proceeds will be used to replenish capital
and working capital and repay debt.
The company’s A-shares closed at
Rmb13.12 on August 29, down 0.9%.
China Galaxy Securities is the sponsor and
joint bookrunner with GF Securities and
Hongta Securities.
› CSRC TO REVIEW ZSPC’S PLACEMENT
The China Securities Regulatory
Commission has agreed to review a
proposed Rmb3bn A-share private
placement from Shenzhen-listed ZHEJIANG
SATELLITE PETRO CHEMICAL.
The acrylic acid and acrylates
manufacturer will sell up to 213m A-shares,
or 20% of its existing capital, to up to 10
investors.
Proceeds will be used for three
polyethylene projects.
The issuer said the placement would help
reduce its debt-to-equity ratio from 44.2%
to 36.8%.
Guosen Securities is the sponsor.
› JIUMAOJIU PLANS HK IPO
JIUMAOJIU INTERNATIONAL, a Chinese restaurant
chain, plans to raise about US$200m from a
Hong Kong IPO this year, said people close
to the deal.
The company filed a listing application
last Wednesday, with CMB International as
the sole sponsor.
Jiumaojiu operates 269 restaurants
and manages 41 franchised restaurants,
covering 31 cities in eleven provinces and
four municipalities in the PRC. It has five
brands – Jiu Mao Jiu, Tai Er, Double Eggs,
Cooking Spicy Kebab and Uncle Chef.
The company posted a net profit of
Rmb102m for the first half of 2019, up 88%
over the same period of 2018. Its full-year
profit in 2018 was Rmb74m.
› KEBODA TECH WINS IPO FINAL APPROVAL
KEBODA TECHNOLOGY has won final approval
from the China Securities Regulatory
Commission for a Rmb1.09bn Shanghai IPO.
The company conducted price
consultation on August 30 and will
announce the price on September 2. Books
will be open for a day on September 4.
The automotive lighting control system
manufacturer plans to offer up to 40.1m
A-shares or 10% of its enlarged capital.
The company will use the proceeds to
expand production, build an R&D centre,
and replenish working capital.
CICC is the sponsor.
› MUYUAN FOODS COMPLETES PLACEMENT
Shenzhen-listed MUYUAN FOODS has raised
Rmb5bn from a private placement of 76.7m
shares at Rmb65.22 per share.
The issue price represents a 19% discount to
the closing price of Rmb80.31 on August 29.
The shares were sold to Henan Hongbao
Group (7.67m), Beixin Ruifeng Fund
Management (61.3m) and Sinosafe Asset
Management (7.67m). The buyers face a 12-
month lock-up period.
Proceeds will be used to expand the
company’s pig raising capacity and to repay
debts.
China Merchants Securities is the sponsor.
› SW SEC EYES PRIVATE PLACEMENT
Shanghai-listed SOUTHWEST SECURITIES plans to
raise Rmb7bn from a private placement.
The company will sell 1bn shares
to four investors – Chongqing Yufu
Assets Management Group, Chongqing
City Construction Investment (Group),
Chongqing Real Estate Group and
Chongqing Development Investment. They
have committed to buy 330m, 350m, 120m
and 200m shares for up to Rmb2.31bn,
Rmb2.45bn, Rmb840m and Rmb1.4bn,
respectively.
Chongqing Yufu Assets Management
Group and Chongqing City Construction
Investment (Group) currently hold respective
28.89% and 6.01% stakes in the company.
Proceeds will be used to increase the
capital of two subsidiaries, fund the main
business, expand physical outlets and for IT
services.
The private placement proposal still
needs approval from shareholders and the
Chinese regulators.
› TM EYES PRIVATE PLACEMENT
Shenzhen-listed TIANMA MICROELECTRONICS
plans to raise Rmb7.3bn from a proposed
private placement.
International Financing Review Asia August 31 2019
COUNTRY REPORT CHINA
The company aims to sell 410m shares
or 20% of the existing capital to up to 10
investors who will face lock-up period of 12
to 36 months.
Hubei Changjiang Tianma Private
Placement Investment Fund Partnership,
owned by Wuhan city’s State-owned
Assets Supervision and Administration
Commission, has committed to buy 81.9m
shares or up to 20% of the placement.
Hong Kong-listed AVIC International,
the company’s biggest shareholder, owns
a 33.2% stake through direct and indirect
shareholdings.
Proceeds will be used for the production
of sixth-generation LTPS AMOLED displays.
› ZCM CANCELS PRIVATE PLACEMENT
Hong Kong and Shanghai-listed ZHENGZHOU
COAL MINING MACHINERY GROUP has decided
to cancel a proposed Rmb1.8bn private
placement.
Reasons include changes in the
company's situation, the industry's
environment and the capital markets,
according to the company.
It planned to sell 346m shares, or 20% of
the existing capital, to up to 10 investors.
Proceeds were intended for the
construction of an intelligent coal
production base, two R&D centres and a
new production base in Anhui province.
The proposal had been approved by
shareholders and Henan provincial
State-owned Assets Supervision and
Administration Commission but had
not been filed to the China Securities
Regulatory Commission yet.
The company’s A-shares closed at
Rmb5.91 on August 29, down 4.7%, while
its H-shares dropped 5.7% to HK$3.65.
› ZHESHANG BANK CLEARS IPO HEARING
Hong Kong-listed CHINA ZHESHANG BANK has
cleared a China Securities Regulatory
Commission hearing for a proposed
Shanghai IPO.
The Chinese lender said in its
preliminary prospectus last year that it
planned to offer 4.49bn A-shares, or up to
20% of its enlarged capital.
Based on a net asset value per share of
Rmb4.59 in 2018, the lender could raise
Rmb20.6bn from the IPO.
The bank’s H-shares closed at HK$4.30
(Rmb3.92) on August 30, 15% below the
2018 NAV. The stock changed hands at
HK$4.29 in the afternoon of last Friday,
down 0.2%.
The proceeds will be used to replenish
core Tier 1 capital.
Citic Securities is the sponsor and joint
bookrunner with CICC.
21
› ZIJIN MINING CLEARS HEARING
ZIJIN MINING’s proposed Rmb8bn A-share
placement has been approved by the China
Securities Regulatory Commission at a
hearing.
The Hong Kong and Shanghai-listed
company plans to sell 3.4bn new A-shares,
or not more than 15% of its enlarged
capital, to finance the purchase of a 100%
stake in Toronto-listed mining company
Nevsun Resources for Rmb9.36bn. Nevsun
will delist when the transition is completed.
According to an announcement from
Zijin Mining, Minxi Xinghang State-owned
Assets Investment & Operation Co, which
currently holds 25.88% of the total issued
shares of the company, intends to purchase
up to 1.2bn A-shares in the placement.
Minxi Xinghang’s holding in Zijin will rise
to 26.99% if it purchases 1.2bn A-shares.
The placement price will not be less than
the average trading price of the A-shares
for the 20 trading days prior to the date of
publication of the offering documents, or
the average trading price of the A-shares on
the trading day before the publication of
the documents, whichever is lower.
The public placement still needs final
written approval from the CSRC.
Essence Securities is the sponsor.
› GANSU JINGYUAN COAL EYES SIX-YEAR CB
Shenzhen-listed GANSU JINGYUAN COAL INDUSTRY
AND ELECTRICITY POWER plans to raise Rmb2.8bn
from a six-year convertible bond.
The company will use the proceeds for a
coal project.
The CB proposal still needs approval
from shareholders and the Chinese
regulators.
› TWO COMPANIES CLEAR CBS HEARINGS
SF HOLDING and NEW HOPE LIUHE have cleared
China Securities Regulatory Commission
hearings for proposed convertible bond
offerings of a combined Rmb9.8bn.
Shenzhen-listed SF Holding plans to raise
Rmb5.8bn from a six-year CB to buy cargo
planes, trucks and electric delivery vehicles.
It will also invest in automation, repay
bank loans and build a smart logistics IT
system.
The Chinese express delivery company
posted net profit of Rmb4.46bn on revenue
of Rmb90.9bn in 2018.
Huatai United Securities is the sponsor.
Shenzhen-listed New Hope Liuhe, which
makes animal feed and meat products and
breeds livestock, will use the proceeds of
a Rmb4bn six-year CB to fund eight pig
breeding projects in seven Chinese cities.
The company posted net profit of
22
Rmb2.72bn on revenue of Rmb69.1bn in
2018.
The company is a subsidiary of New Hope
Group, which floated New Hope Dairy
on the Shenzhen Stock Exchange to raise
Rmb465m in January.
China Merchants Securities is the sponsor.
The two CB offerings still need final
written approval from the CSRC.
HONG KONG
DEBT CAPITAL MARKETS
› HYSAN SLIDES IN SECONDARY
Hong Kong property company HYSAN
DEVELOPMENT (A3/BBB+/A–) last Wednesday
sold US$500m 2.82% 10-year senior
unsecured Reg S bonds at 99.577 to yield
2.869%. This was equivalent to Treasuries
plus 140bp, inside initial guidance of 160bp
area.
Hysan’s only outstanding US dollar bond
is a 2023, which was seen at a G spread of
95bp.
Pricing for the new issue was around
15bp–20bp back of Single A rated Hong
Kong developers CK Hutchison and Sun
Hung Kai Properties, yet the bonds widened
about 10bp in morning trading.
The final book was over US$890m from
56 accounts. Asia took 95% of the Reg S
bonds and Europe 5%. By investor type,
fund managers booked 69%, banks 28% and
private banks 3%.
Wholly owned subsidiary Hysan (MTN)
will issue the proposed bonds under
a US$1.5bn MTN programme with a
guarantee from the company. The bonds
are expected to be rated A3 by Moody’s.
Goldman Sachs, JP Morgan, Mizuho and
UBS were joint global coordinators and
bookrunners.
Hysan has more than 4 million square
feet of office, retail and residential
properties in Hong Kong, mainly in
Causeway Bay.
SYNDICATED LOANS
› JOY CITY SEEKS UP TO US$800M
Hong Kong-listed developer Joy City
Property has launched an up to US$800m
dual-tranche bullet loan into general
syndication.
Agricultural Bank of China, Bank of China,
DBS Bank and HSBC are the mandated
lead arrangers and bookrunners of the
International Financing Review Asia August 31 2019
transaction, which includes a US$500m
facility that can be further split into a
three-year tranche A and a five-year tranche
B. There is a greenshoe option of up to
US$300m.
The deal pays interest margins of 115bp
and 145bp over Libor for the three and five-
year tranches, respectively.
Banks have been invited to join either
or both tranches, with commitments of
US$50m or above for the lead arranger title,
tickets of US$30m–$49m for the arranger
title, and commitments of US$10m–$29m
for the manager title.
Lead arrangers will receive top-level all-in
pricing of 135bp and 160bp, respectively,
for tranche A and tranche B, based on
upfront fees of 60bp and 75bp; arrangers
earn all-ins of 132bp and 157bp, based
on upfront fees of 51bp and 60bp, for the
respective tranches; while managers earn
all-ins of 130bp and 155bp, based on fees of
45bp and 50bp, respectively.
The borrower is BAPTON, a Hong Kong-
incorporated wholly owned subsidiary of
Joy City Property. Joy City Property is the
guarantor.
Commitments are due by September 13.
Chinese state-owned food processor
COFCO became an indirect controlling
shareholder of Joy City Property in January
2019, after a COFCO unit, COFCO Property
(Group), completed the acquisition of a
64.18% interest in Joy City, according to Joy
City’s 2018 annual report.
› UA FINANCE UPSIZES TO HK$4.15BN
UNITED ASIA FINANCE has increased a four-
year loan to HK$4.15bn (US$529m) from
HK$1.6bn after attracting 17 banks in
syndication.
Mizuho Bank and Standard Chartered Bank
are the mandated lead arrangers and
bookrunners of the deal, while Mizuho is
also the facility agent. Signing is slated for
August 30.
The company scrapped a US dollar loan
of an unspecified size after receiving a
strong response for the Hong Kong dollar
tranche.
The US dollar loan, targeted at Japanese
lenders, had sought commitments on four
levels compared with three for the Hong
Kong dollar portion.
Pricing on both tranches was the same –
the top-level all-in pricing was 215bp based
on an interest margin of 190bp over Hibor
and an average life of three years.
The loan is partially for refinancing,
while the remainder is new money.
UA Finance last tapped the loan
markets in July 2018 when it completed a
HK$4.72bn-equivalent financing that paid
a top-level all-in pricing of 220bp based on

the same margin and average life as the
latest loan. MLABs Mizuho, StanChart and
Taipei Fubon Commercial Bank brought in
18 other banks, including three Japanese
lenders that lent US dollars.
On June 27, UA Finance completed a
buyback of its own shares representing
a 7.27% stake from Orix Asia Capital, a
wholly owned subsidiary of Japan’s Orix
Corp. Hong Kong-listed Sun Hung Kai &
Co now owns 62.74% in UA Finance, up
from 58.18%. The other shareholders of UA
Finance are Itochu and UA Finance’s CEO
and managing director Akihiro Nagahara.
For full allocations, see www.ifrasia.com.
› XTEP LIFTS REFI TO HK$1.8BN
Hong Kong-listed sportswear manufacturer
XTEP INTERNATIONAL HOLDINGS has increased a
four-year amortising term loan to HK$1.8bn
from HK$1.6bn.
Mandated lead arranger and bookrunner
HSBC brought in eight banks, including
Bank of China (Hong Kong), CTBC Bank and
Hang Seng Bank that joined as MLABs.
The financing offered a top-level all-in
pricing of 188bp based on an interest
margin of 152bp over Hibor and an average
life of 3.7 years.
Xtep International Development, Xtep
International Trading and Xtep (Hong Kong)
Enterprise are the guarantors.
Funds are to refinance a US$200m-
equivalent 3.5-year amortising term
loan signed in January 2017. BOCHK,
CTBC, Hang Seng, HSBC and Industrial &
Commercial Bank of China (Asia) were the
MLABs of the financing, which attracted
four other lenders in syndication. The top-
level all-in pricing was 200bp based on a
margin of 165bp over Hibor or Libor.
Founded in 2002, Xtep produces clothing,
footwear and accessories for sports and its
products are sold in more than 6,200 stores
in the PRC.
For full allocations, see www.ifrasia.com.
EQUITY CAPITAL MARKETS
› SHAGANG RAISES GLOBAL SWITCH STAKE
Chinese steel maker Jiangsu Shagang
Group bought a further 24% stake in GLOBAL
SWITCH for £1.8bn (US$2.2bn) ahead of the
Hong Kong IPO of the UK-based data centre
operator.
Shagang will become Global Switch’s
largest shareholder with a 49% stake after
the purchase.
Shagang has confirmed there will be
no changes to the company’s strategic
direction, management or financial and
operational policies, said Global Switch in a
press release.
Shagang bought its 24% stake from
Aldersgate Investments, a Reuben Brothers
company. Simon Reuben and Alexander
Bushaev, representatives of Aldersgate
Investments, have resigned from the board
of Global Switch.
He Chunsheng, Nie Wei and Shen Qian
will be appointed to the board as Shagang’s
representatives.
Global Switch is planning to file an
application for a Hong Kong listing of
at least US$1bn as early as September,
people close to the deal told IFR earlier. It
is unclear whether the shareholding and
board member changes will affect the plan.
CLSA, Goldman Sachs and JP Morgan are the
joint sponsors.
INDIA
DEBT CAPITAL MARKETS
› ONGC SETS UP US$2BN EMTN
OIL AND NATURAL GAS CORP has set up a US$2bn
euro MTN programme which will be listed
on the Singapore Stock Exchange.
The EMTN will allow ONGC, ONGC
Videsh and their subsidiaries to gain access
to the international markets within a short
period and to widen their global investor
base.
“The current low yield environment in
international debt markets does provide
attractive tenor funding options,” said
Subhash Kumar, director (finance) at ONGC
in a release. “However any drawdown
under the programme will be made to meet
specific requirements of ONGC, ONGC
Videsh or its subsidiaries.”
India’s top oil and gas explorer is
planning multi-billion dollar projects for
new discoveries and to increase output
from existing fields. It is on the prowl for
overseas acquisitions, according to local
media reports.
Citigroup and Standard Chartered are heard
to be appointed as the advisers for the
EMTN.
› YES BANK'S US BONDS, SHARES PLUNGE
YES BANK’s US dollar bonds and shares
plunged last week after Moody’s
downgraded its long-term foreign and local
currency issuer rating by two notches to
Ba3 from Ba1 on concerns over the lower
than expected size of its recent capital
raising.
The cash price on the bank’s US$477m
International Financing Review Asia August 31 2019
COUNTRY REPORT INDIA
3.75% dollar bonds due February 2023
slumped to 86.33/87.53 from 91.82 and
the yield hit at an all time high of 8.43%
last Thursday morning, according to
Tradeweb.
This came after its shares had declined
8% to Rs60 last Wednesday, with the stock
down 67% year to date.
Moody’s kept its outlook negative, which
it said reflected a deterioration in the
bank’s solvency and liquidity buffers.
Yes Bank sold a Rs19bn (US$265m)
qualified institutional placement on August
8 at Rs83.55 a share.
Higher provisions on bad loans
pushed the bank into the red in the
fourth quarter that ended March 31, and
Rs100bn of loans remain on the watch list
and may turn bad in the next two to three
quarters. In addition, around Rs75bn of
bond investments, or 10% of the bank’s
total investment holdings, have suffered
rating downgrades in recent quarters,
Moody’s said.
Yes Bank was set to hold a meeting on
August 30 to consider a second round
of fundraising through a share sale. But
Moody’s said the decline in the bank’s
share price will challenge its ability to raise
sufficient capital to maintain its rating at
the previous level.
The recent QIP will moderately improve
the bank’s reported common equity Tier 1
ratio to 8.6% from 8% as of end-June, but the
bulk of the lender’s operating profit will be
used up on bad loans over the next 12-18
months, leaving it dependent on external
capital raising to improve its loss-absorbing
buffers, according to the rating agency.
› ADITYA MEDI ISSUES ZERO-COUPON
ADITYA MEDISALES has raised Rs5bn from zero
coupon bonds maturing on September
12 2022, according to a filing on National
Securities Depository Limited.
The three-year 15-day bonds of the
Indian pharma company are rated AA+
(structured obligation) by Acuite Ratings.
The yield of 9.95% per annum will be
compounded annually and is payable at
maturity.
› HDB FINANCIAL PRINTS FIVE-YEAR BONDS
has raised Rs3.5bn
HDB FINANCIAL SERVICES
from five-year bonds at 8.05%, according to
a filing on National Securities Depository
Limited.
The housing finance company was eyeing
Rs1bn plus a greenshoe amount of Rs2.5bn.
Care and Crisil have assigned AAA ratings
to the bonds.
HDFC Bank is the arranger for the bond
issue.
23
 On August 8, HDB Financial raised
Rs15bn from 10-year bonds at 8.05%.
› INDIABULLS EXTENDS RETAIL BOND ISSUE
INDIABULLS CONSUMER FINANCE has extended
the deadline to September 12 from August
30 for an offering of public bonds of up
to Rs10bn, according to a filing on the
exchanges.
The issue opened on July 31 and was
scheduled to close on August 30.
The NBFC is eyeing Rs1bn, plus a
greenshoe option of Rs9bn from retail
bonds.
Edelweiss Financial Services, AK Capital
Services, Axis Bank and Trust Investment
Advisors are the lead managers.
The bonds are rated AA/AA+ (Care/
Brickwork Ratings).
› IRFC SEALS 15-YEAR PRINT AT 7.48%
INDIAN RAILWAY FINANCE CORP has raised
Rs21.07bn from 15-year bonds at 7.48%,
S&P warns SME’s funding vulnerable
„ Loans Ratings agency points to difficulties for borrowers from some secfors amid tight credit environment
Nearly 200 Indian small and mid-sized
enterprises with high leverage and persistent
negative free cashflows will be vulnerable
to funding and liquidity challenges over the
next 12–18 months, rating agency Standard &
Poor’s said in a report published last Tuesday.
The report points to 190 companies,
mainly from the construction, steel, textile,
and real estate sectors, that have poor debt
coverage metrics and continue to roll over
large amounts of short-term debt in a tight
credit environment.
These companies are a subset of a sample
of 1,330 listed Indian corporates with debt
or revenues of Rs1bn (US$13.91m) or higher.
The sample comprises Rs17trn of debt and
Rs32trn of revenues, which represents
76% of the debt and 83% of the revenues
respectively of all non-financial listed
companies in India.
The report forecasts India Inc’s revenues to
grow 300bp–400bp slower than the revenue
growth in the last two years. Global growth
concerns, falling rural incomes, and a tight
credit environment add further pressure to a
weak outlook for overall economic output.
“We expect Indian corporates to grow
earnings by 7%–8% annually over the next
two years, down from the double-digit
growth of the past two years despite the
recent stimulus announcement aimed
24
according to market sources.
The state-owned issuer was targeting
Rs5bn, plus a greenshoe option of
Rs20bn.
Care, Crisil and Icra have assigned AAA
ratings to the bonds.
IRFC last raised Rs25.92bn from 10-year
bonds at 7.48% on August 9.
The issuer is yet to make an official
announcement on the final yield and
size.
› LIC HOUSING ISSUES FIVE-YEAR BONDS
LIC HOUSING FINANCE has raised Rs7.7bn from
five-year bonds at 7.78%, according to a
filing on National Securities Depository
Limited.
Crisil and Care have assigned a AAA
rating to the August 2024 bonds.
AK Capital is the lead arranger for the
bond issue.
On August 22, LIC Housing Finance
raised Rs11.65bn from November 2022
bonds at 7.6%.
at encouraging foreign investment, auto
demand, and bank lending,” said S&P credit
analyst Krishnakumar Somasundaram.
The S&P report highlighted that although
Indian corporates were growing faster
than listed peers in Asia, they remained
disproportionately dependent on bank
financing. In contrast, regional listed peers
had access to larger and deeper local
currency debt markets.
State-owned banks dominate the
financing environment in India and S&P
expects them to continue to favour large
corporates. Making matters worse are the
woes of the credit-starved non-banking
financial companies in India, which further
compound the tight credit environment.
A series of defaults and credit scares have
rattled Indian NBFCs over the past year and
posed hurdles to their access to the capital
markets. Dewan Housing Finance Corp, one
of India’s largest housing finance companies,
is seeking approval from lenders on a
restructuring plan aimed at resolving a liquidity
crunch and restarting its lending business.
DHFL has roughly Rs1trn in debt, of
which approximately Rs380bn is owed to
banks. The company had last tapped the
offshore loan markets nearly two years ago
in September 2017 for a US$125m three-year
loan that drew five lenders after crawling
International Financing Review Asia August 31 2019
› NUVOCO VISTAS PRINTS THREE-YEAR
Indian building materials producer
NUVOCO VISTAS has raised Rs3.5bn from
three-year bonds at 9.15%, according to a
filing on National Securities Depository
Limited.
The August 30 2022 notes are rated AA
(stable) by Crisil.
The coupon will step up by 25bp if there
is a one-notch rating downgrade.
In case the rating falls to A+ or below,
debenture holders have an option to
accelerate the repayment by giving a 30-day
notice.
› SBI PRINTS AT1 PERPETUALS AT 8.75%
STATE BANK OF INDIA has raised Rs31.05bn
from Basel III-compliant Additional Tier 1
perpetual non-call five bonds at 8.75%.
There is a call option at the end of five
years and every year thereafter.
The AT1 notes are rated AA+ by Crisil
and Icra.
through a six-month long syndication. That
outcome was mainly due to competition from
a US$150m 3.1-year average life loan from
Indiabulls Housing Finance.
International lenders have been wary
of lending to Indian NBFCs in the past 20
months since news of a US$1.8bn fraud
at Punjab National Bank in January 2018
followed by defaults at Infrastructure Leasing
& Financial Services a few months later in
September.
Earlier this month, Mumbai-based IndusInd
Bank Ltd’s US$320m three-year loan attracted
only one lender in general syndication despite
the deal offering richer pricing than a similar
borrowing last year. The borrower is expected
to prepay one-third of the deal.
The NBFC crisis in India is also spreading
to the property sector with Lodha Developers
International, one of the largest real estate
developers in the country, suffering a ratings
downgrade from Moody’s earlier this month
in a reflection of tighter funding conditions
onshore.
Lodha, which renamed itself Macrotech
Developers earlier this year, has more than
US$1bn of debt maturing over the next 12
months and Moody’s has a negative outlook
on its rating due to uncertainty on how the
developer will deal with it.
PRAKASH CHAKRAVARTI

SBI Capital Markets is the arranger for the
bond issue.
On June 29, SBI last raised Rs50bn from
10-year non-call five Basel III-compliant Tier
2 bonds at 7.99%.
› SIDBI ISSUES SEPTEMBER 2022 BONDS
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
has raised Rs9.5bn from three-year one-
month bonds at 6.80%, according to market
sources.
The notes mature on September 29 2022.
It was targeting Rs5bn, plus a greenshoe
option of the same amount.
Care has assigned a AAA rating to the
bonds.
On August 7, Sidbi raised Rs10bn from
three-year bonds at 6.99%.
The issuer is yet to make an official
announcement on the final yield and size
of the issue.
› TATA CAPITAL EYES MARCH 2021 NOTES
TATA CAPITAL HOUSING FINANCE plans to raise up
to Rs4bn from notes maturing on March
11 2021 at 7.9052%, according to a market
source.
The notes have a tenor of 554 days
and are rated AAA by Crisil. The housing
finance company is eyeing Rs1bn, plus a
greenshoe amount of Rs3bn.
Tata Capital Housing has asked
investors to place bids on the NSE’s
electronic platform on September 3
and the notes will be allotted on
September 4.
The issuer is yet to make an official
announcement on the planned bond sale.
› VW FINANCE BONDS RAISE RS3BN
VOLKSWAGEN FINANCE has raised Rs3bn from
two-part bonds, according to a filing on
National Securities Depository Limited.
It printed Rs1.5bn from a 538-day
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tranche at 8.15% and the same amount
from a 636-day portion at 8.25% per
annum.
India Ratings has assigned a AAA rating
to the secured bonds.
The pay-in took place on August 30.
SYNDICATED LOANS
› INDUSIND IN PARTIAL PRE-PAYMENT
INDUSIND BANK is expected to pre-pay one-
third of a US$320m three-year loan which
recently closed with only one bank in
general syndication.
Citigroup, Commerzbank, First Abu Dhabi
Bank, HSBC, LBBW and MUFG were the
mandated lead arrangers and bookrunners
of the loan, which was pre-funded before
launch. The facility amount will be reduced
on a pro-rata basis between the lead banks.
Korea Development Bank Singapore
branch was the only lender to join in
syndication and will be transferred into the
deal later.
Syndication for the facility, which also
came with an up to US$180m greenshoe,
was launched in early June.
The facility pays a top-level all-in pricing
of 118.2bp based on an interest margin of
95bp over Libor and a remaining life of 2.67
years.
The pricing on the latest loan is richer
than IndusInd’s US$500m three-year loan
completed in May last year, which offered
a top-level all-in of 105bp based on an
interest margin of 80bp over Libor and a
remaining life of 2.75 years.
Axis Bank, Barclays, Citigroup, FAB,
HSBC, Standard Chartered and State
Bank of India were the MLABs on that
deal, which attracted only three others in
general syndication.
The private sector lender reported a 62%
fall in fourth quarter net profit this May,
due to higher provisions for bad loans. Net
International Financing Review Asia August 31 2019
COUNTRY REPORT INDIA
profit fell to Rs3.6bn (then US$50.4m) for
the quarter ending March 31, compared to
Rs9.53bn a year ago.
› IRFC'S SAMURAI ATTRACTS 10 LENDERS
Ten lenders have joined state-owned INDIAN
RAILWAY FINANCE CORP’s ¥32.856bn (US$300m)
seven-year Samurai loan in general
syndication.
Mizuho Bank, MUFG and Sumitomo
Mitsui Banking Corp were the mandated
lead arrangers and bookrunners of the
financing, for which substitution signing
is expected to take place this week and
transfers are slated for the first week of
September.
The three Japanese megabanks signed
the deal on March 29 and fully pre-funded
it on June 4.
The transaction paid a top-level all-in
pricing of 93bp based on an interest margin
of 90bp over yen Libor and a remaining life
of 6.75 years.
Proceeds are for the purchase of railway
rolling stock leased to the Ministry of
Railways.
IRFC last signed a 10-year Samurai loan
at ¥26.231bn (then US$232m) in September
2018 after attracting three banks in general
syndication. Mizuho, MUFG and SMBC were
the MLABs of the deal, which offered a top-
level all-in pricing of 100bp based on an
interest margin of 80bp over yen Libor and
a remaining life of 9.5 years.
The borrower is rated Baa2/BBB-/BBB-.
For full allocations, see www.ifrasia.com.
EQUITY CAPITAL MARKETS
› ALPHALOGIC COMPLETES START-UP IPO
ALPHALOGIC TECHSYS raised Rs62m (US$862,296)
through India’s first start-up IPO.
The Pune-based mobile app developer
and data analystics company received
25
bids for 872,000 shares as against 736,000
on offer at Rs84 a share, data on the BSE
Startups Platform indicate.
Last year the Securities and Exchange
Board of India allowed start-ups to sell
shares through a dedicated board.
BSE Startups Platform requires that
start-ups should be in the information
technology, biotechnology, 3D printing,
space technology, e-commerce, drone,
nano-technology, artificial intelligence,
virtual reality, robotics or genetic
engineering sectors.
The company should have positive net
worth and have been in existence for two
years at the time of filing for the IPO.
It should have registered with the
federal Department of Industrial Policy &
Promotion or Ministry of Micro, Small &
Medium Enterprises and should have a paid
up capital of at least Rs10m.
Finshore Management was the issue
manager.
› HDFC SELLS GRUH FINANCE BLOCK
Housing Development Finance Corporation
has raised around Rs16.7bn through
the sale of 67.4m GRUH FINANCE shares at
Rs247.10 per share.
The shares were marketed in a Rs243.00–
Rs249.60 range. The final price represents a
1% discount to the pre-deal close of Rs249.60.
The shares sold represent 9.2% of the
company’s outstanding share capital.
Books were well covered with demand
from international long-only investors and
domestic institutions.
Goldman Sachs is the sole bookrunner.
In June HDFC sold Rs9bn of Gruh Finance
shares at Rs290 apiece, a 6% discount.
HDFC is divesting shares to meet a
regulatory requirement of not owning
more than 9.9% of Bandhan Bank, which
earlier this year announced a merger with
Gruh. Although HDFC was entitled to a
15% stake after the merger, Reserve Bank
of India regulations do not allow it to own
more than 9.9%.
INDONESIA
DEBT CAPITAL MARKETS
› BUMI SERPONG FUNDS TENDER
BUMI SERPONG DAMAI, rated Ba3/BB– (Moody’s/
Fitch), has offered to buy any and all of its
US$300m 7.25% bonds due 2021, which
were issued by wholly owned subsidiary
Global Prime Capital.
26
It will pay US$1,045 per US$1,000 in
principal amount tendered, plus accrued
interest, for bondholders who tender by
September 2.
The tender offer is subject to the
Indonesian property developer raising
at least US$200m from a proposed new
issue.
The company began investor meetings
in Hong Kong, Singapore and London on
August 28, ahead of a proposed offering of
new Reg S bonds expected to be rated Ba3/
BB– (Moody’s/Fitch).
Existing holders who want to subscribe
to notes in addition to tendering the 2021s
may be given priority in the new offering.
Citigroup, Credit Suisse, UBS and Mandiri are
joint bookrunners and dealer managers for
a proposed new bond issue and tender.
Bumi Serpong Damai is part of Sinarmas
Land, which held around a 60% stake at the
end of March.
› ADIRA FINANCE PLANS THREE-TRANCHER
ADIRA DINAMIKA MULTI FINANCE is planning to
raise Rp1.2trn (US$84m) from three-part
bonds, according to a term-sheet.
The Indonesian consumer finance firm
DMDT seeks payment delay
„ Loans Duniatex group company also looks to defer December instalment
DELTA MERLIN DUNIA TEXTILE (DMDT), a unit of
Indonesian textile group Duniatex, is seeking
to delay payment of around US$5.4m in
principal due in September for a US$215m
five-year loan signed in July 2018.
DMDT has also asked lenders of that
facility to defer an instalment due in
December with repayments starting in June
2020 and to lower the interest rate on the
loan, according to an S&P announcement on
August 22.
Meanwhile, offshore lenders of a US$260m
syndicated loan for Duniatex’s spinning
company, DELTA DUNIA SANDANG TEKSTIL (DDST),
are expected to appoint Borrelli Walsh as their
financial adviser for restructuring that loan,
sources said.
Duniatex has appointed Aji Wijaya & Co
as its onshore legal counsel and AJCapital
Advisory as its financial adviser for the
potential restructuring of the DDST deal.
DDST missed an interest payment due
in July for its US$260m term loan signed
in November 2016, which sources said was
due to significant deterioration in Duniatex’s
liquidity, amid weak domestic demand and
oversupply resulting from US-China trade
tensions.
International Financing Review Asia August 31 2019
has announced indicative yield ranges
of 6.50%–7.40% for a 370-day tranche,
7.50%–8.40% for a three-year portion and
7.75%–8.65% for a five-year piece.
Pefindo has assigned a AAA rating to the
bonds.
The books opened on August 27 and will
close on September 10.
CGS-CIMB, Indo Premier, Mandiri, RHB and
Trimegah Sekuritas are the lead arrangers for
the bond issue.
› PLN EYES FIVE-PART BONDS, SUKUK
Indonesian state utility PERUSAHAAN LISTRIK
NEGARA aims to raise up to Rp2trn from
five-part Sustainable public bonds and
a sukuk offering, according to the offer
document.
It is planning to sell Rp1.5trn of bonds
and Rp500bn of sukuk.
PLN has given indicative yields of 7.15%–
8.40%, 7.35%–9.00%, 7.65%–9.25%, 8.00%–
9.75% and 8.50%–10.15% for five, seven, 10,
15 and 20-year tenors for both portions.
The books opened today and will close on
September 9.
Mandiri, Danareksa, Bahana, BNI, Indo
Premier, Trimegah and Maybank Sekuritas are
BNP Paribas and HSBC were the
mandated lead arrangers and bookrunners
on DDST’s existing loan, which comprises a
US$200m five-year tranche A and a US$60m
three-year tranche B. Eleven other lenders
joined the deal in syndication.
For DMDT’s 2018 loan, the MLABs were
BNP, ING Bank, Maybank and Standard
Chartered. The deal, which was reduced from
an original target size of US$250m, paid top-
level all-in pricing of 520.77bp (onshore) or
495.77bp (offshore) based on interest margins
of 490bp (onshore) and 465bp (offshore) over
Libor. Nine banks joined in syndication.
S&P further downgraded its credit ratings
for DMDT and its US$300m senior unsecured
notes to CC on August 22, after having
downgraded both of them to CCC– from
BB– in mid-July. The rating agency says it
continues to have a negative outlook and
may lower DMDT’s rating to SD after the
distressed exchange on the syndicated loan is
completed.
Fitch also downgraded its ratings for DMDT
and the company’s senior unsecured notes to
CCC– on July 24, after lowering both ratings
to B– from BB– on July 18.
APPLE LI

the lead arrangers.
The bonds and sukuk are rated AAA by
Pefindo.
Separately, PLN has filed a securities
registration statement in Japan for a four-
tranche Samurai transaction.
Mitsubishi UFJ Morgan Stanley, Mizuho,
Nomura and SMBC Nikko have been hired as
joint lead managers.
SYNDICATED LOANS
› SIXTEEN JOIN EXIMBANK US$900M LOAN
State-owned INDONESIA EXIMBANK has completed
a US$900m dual-tranche financing with 16
lenders joining in general syndication.
ANZ, CTBC Bank, First Abu Dhabi Bank,
Mizuho Bank, MUFG, Standard Chartered,
Sumitomo Mitsui Banking Corp and United
Overseas Bank were the mandated lead
arrangers and bookrunners of the financing,
which comprises a US$600m piece (tranche
A) with a tenor of three years and one
month, and a US$300m portion (tranche B)
with a tenor of two years and one month.
The MLABs partially pre-funded the
deal on May 23 after signing the facility
agreement on May 15.
Tranches A and B pay top-level all-in
pricing of 105bp and 93bp, respectively,
based on interest margins of 78bp and 68bp
over Libor, and average lives of 2.83 and
two years, respectively.
Proceeds will be used for refinancing and
general corporate purposes.
The borrower’s last loan was a US$1.15bn
multi-tranche financing in July last year,
which was increased from a US$950m
target after the deal attracted 30 lenders in
general syndication.
ANZ, FAB, Mizuho, MUFG, OCBC Bank,
StanChart and UOB were the MLABs and
equal underwriters of the previous deal,
which comprises a US$395m one-year
tranche A, a US$335m three-year tranche
B and a US$420m five-year tranche C. That
facility paid top-level all-in pricing of 60bp,
92bp and 108bp, respectively, based on
interest margins of 45bp, 75bp and 95bp
over Libor for the one, three and five-year
maturities.
For full allocations, see www.ifrasia.com.
EQUITY CAPITAL MARKETS
› DIGITAL MEDIATAMA PLANS US$50M IPO
is planning a
DIGITAL MEDIATAMA MAXIMA
US$40m–$50m Indonesia Stock Exchange
IPO in the fourth quarter, people with
knowledge of the transaction said.
Digital Mediatama, a digital advertising
company, is owned by brokerage and
underwriter Kresna Graha Investama.
Around 30% of the capital will be sold in
the IPO. Both primary and secondary shares
are likely to be sold.
Macquarie, SooChow CSSD and Trimegah are
the banks on the transaction.
Shares of Kresna Graha are listed on IDX
and are down 22% year to date.
JAPAN
DEBT CAPITAL MARKETS
› AOZORA BANK PRINTS DOLLARS
AOZORA BANK last Thursday priced US$300m
2.55% three-year bonds at 99.914 to yield
2.58%.
This was equivalent to Treasuries plus
115bp, inside initial price thoughts of
Treasuries plus 135bp area.
The Reg S bonds are expected to be rated
A– by S&P.
Citigroup and Goldman Sachs were joint
bookrunners.
› JFM PRINTS YANKEE
JAPAN FINANCE ORGANIZATION FOR MUNICIPALITIES,
rated A1/A+ (Moody’s/S&P), last Wednesday
priced a US$1bn 1.75% five-year bond at
99.89 to yield 1.773%, or Treasuries plus
40.2bp.
This was equivalent to mid-swaps plus
47bp, inside initial guidance of 48bp area.
Books were over US$1.3bn, with EMEA
taking 45% of the 144A/Reg S bonds, Asia
Pacific 44% and the Americas 11%.
By investor type, central banks and
official institutions booked 56%, banks and
private banks 22%, asset managers and
hedge funds 9%, insurers and pension funds
7%, and others 6%.
JP Morgan, Bank of America Merrill Lynch,
Mizuho and Morgan Stanley were leads.
The bonds will be listed in Luxembourg
and on the Tokyo Pro-bond market.
› KOBE FINDS CHEAP FUNDING IN DOLLARS
seems to have found a cheap
CITY OF KOBE
way to raise yen funds, by selling bonds in
US dollars and swapping the proceeds back
into yen.
According to DealWatch, IFR’s sister
publication in Japan, the city priced
US$80m of 1.985% 10-year bonds last
Wednesday via Goldman Sachs.
DealWatch reported the issuer as saying
the spread, 60bp over mid swaps, was not
International Financing Review Asia August 31 2019
COUNTRY REPORT JAPAN
bad compared to its yen level, but bankers
away said their calculations suggested
the issuer was able to raise yen funds at
a negative rate by swapping the proceeds
back to yen.
“We think the bonds priced around
-0.19% (equivalent in yen),” said one of
the bankers away. Another banker away
said he saw the dollar bonds at a level
equivalent to around -0.21% as of Friday.
The issuer’s latest 10-year yen deal in
April priced with a 0.095% coupon at 15.5bp
over JGBs.
Interestingly, Kobe’s US dollar bonds
priced well inside the recent five-year dollar
deal of Shizuoke Prefecture that priced at
71bp over mid swaps.
SYNDICATED LOANS
› NSG TAPS LOANS FOR US, VIETNAM UNITS
NIPPON SHEET GLASS is raising two loans
totalling US$298m for its units in
the US and Vietnam from Japan Bank
for International Cooperation and three
commercial lenders, JBIC said in a
statement last Thursday.
Signing took place on the same day.
JBIC is providing US$100m, while
Mizuho Bank, Sumitomo Mitsui Banking Corp
and Sumitomo Mitsui Trust Bank are funding
US$108m-equivalent to NSG Glass North
America, NSG’s US unit, to build a new
plant in Ohio.
JBIC is also providing US$54m, while
Mizuho, SMBC and SMTB are funding
US$36m-equivalent to NSG Vietnam
Glass Industries, NSG’s Vietnam unit,
to renovate an existing plant in Ho Chi
Minh City.
The plants manufacture glass sheets for
solar panels.
› U-NEXT TO REFI USEN BUYOUT LOAN
USEN-NEXT HOLDINGS is raising a ¥73.5bn
(US$700m) seven-year loan to refinance
a ¥80bn loan from 2017 that funded its
¥62bn acquisition of cable broadcaster
Usen, the Japanese video streaming
service provider said in a statement last
Friday.
Mizuho Bank was the mandated lead
arranger of the deal, which has attracted
both existing and new lenders in
syndication.
Signing and funding are slated for
September 25 and 30, respectively.
Usen-Next Holdings, formerly known as
U-Next, in February 2017 raised the ¥80bn
seven-year non-recourse loan to back its
acquisition of Usen. Mizuho was the MLA,
while U-Next SPC1 was the borrower of the
27
financing, which was split into a ¥28.14bn
amortising term loan tranche and a
¥51.86bn bullet term loan tranche. The loan
was later syndicated to nine other banks.
› ONE REIT REFINANCES ¥13BN LOAN
ONE REITsigned a ¥13.2bn bullet term
loan last Thursday for refinancing, the
Tokyo Stock Exchange-listed real estate
investment trust said.
Mizuho Bank and Mizuho Trust & Banking
arranged the loan, which is split into ¥4bn
five-year and ¥9.2bn seven-year tranches
with interest margins of 45bp and 65bp
over one-month Tibor, respectively.
Bank of Fukuoka, Bank of Kyoto, Mie Bank,
Nippon Life Insurance, Nishi-Nippon City Bank,
Resona Bank, Shinsei Bank and Sumitomo Mitsui
Banking Corp joined in syndication.
Drawdown is slated for September 9.
The borrower invests in mid-sized office
buildings.
EQUITY CAPITAL MARKETS
› RECRUIT UNVEILS FOLLOW-ON
TSE-listed staffing services company RECRUIT
HOLDINGS is to conduct an all-secondary
global follow-on offering of up to ¥339bn
(US$3.2bn) on behalf of 13 shareholders.
The base deal of 105.6m secondary shares
will be marketed at a 3%–5% discount to the
market close on the pricing day. There is
an overallotment option of 15.8m shares or
15% of the base deal.
The shares on offer, including the
overallotment option, represent about 7.2%
of Recruit’s total shares outstanding.
The deal will be allocated 70% to
international investors and 30% to domestic
buyers. The split for the domestic retail and
institutional portions is 96%–4%.
The selling shareholders are Toppan
Printing, Dai Nippon Printing, Mitsui
& Co, Dentsu, MUFG Bank, Sumitomo
Mitsui Banking Corporation, Mizuho Bank,
Hakuhodo DY, Nomura Research Institute,
NTT Data, Daio Paper, TIS and CAC Holdings.
Concurrently, the company will
implement a share repurchase programme
of up to ¥80bn or up to 30m shares from
the day after completion of the follow-on
until November 29.
Recruit said it wanted to “provide an
opportunity for thirteen of its shareholders
to reduce their holdings in a coordinated
manner” and to further expand its
shareholder base globally.
A global management roadshow will
run from August 29–September 6. Books
will open on September 4 and the deal will
price between September 10–12.
28
There is a 180-day lock-up period for
the company and each of the selling
shareholders.
Bank of America Merrill Lynch, Goldman
Sachs, Morgan Stanley and Nomura are the
joint global coordinators. They are also
international joint bookrunners with Mizuho
and SMBC Nikko in the international tranche.
Recruit shares fell 4.8% to ¥3,154 last
Thursday.
› TAKARA REIT FOLLOW-ON RAISES ¥13.7BN
TAKARA LEBEN REAL ESTATE INVESTMENT has raised
¥13.7bn from a follow-on share offering
after pricing the deal at ¥117,000.
The base deal of 117,000 primary
units was sold at a 2.5% discount to
last Monday’s close of ¥124,600, after
deducting a scheduled ¥4,600 dividend,
compared with a marketed discount
range of 2.5%–5.0% to the market close.
There is a greenshoe option of 5,850
secondary units.
About 80% of the deal was allocated
to domestic buyers and the rest to
international investors.
Proceeds will be used for acquisitions
and the remainder to repay borrowings.
SMBC Nikko and Mizuho are joint lead
managers and bookrunners.
MALAYSIA
DEBT CAPITAL MARKETS
› MALAYSIA MAY COME BACK FOR MORE
MALAYSIA is considering a second Samurai
bond issue with a guarantee from Japan
Bank for International Cooperation
following an oversubscribed sale in March,
said a staff member at the Japanese
embassy in Malaysia, confirming a report in
the local press.
Japanese ambassador to Malaysia Makio
Miyagawa reportedly said the size could be
similar to the previous issue and that Japan
is working hard to lower the interest rate.
The size is being discussed by the
Malaysian government and the coupon
will ultimately depend on market
conditions, the staff member said.
The timing has also not been decided.
Malaysia priced ¥200bn (US$1.9bn) of
10-year Samurai bonds in March and used
the funds to help restore a fiscal position
that had deteriorated during the previous
administration.
The JBIC guarantee helped draw demand
from Japanese investors, with books reaching
International Financing Review Asia August 31 2019
about ¥320bn, and kept the coupon low at
0.53%, or the full cost of 0.63%.
The Japanese government and JBIC are
ready to help the sale as it would revitalise
the Samurai market.
› KL KEPONG GOES LONG
KUALA LUMPUR KEPONG will offer long-dated
Islamic bonds as early as this week to raise
up to M$2bn (US$480m).
The sukuk, in tenors of 10 or 15
years, or both, will be drawn from a
newly established M$2bn Islamic MTN
programme under the wakalah bi al-
istithmar concept.
CIMB and Maybank are principal advisers,
lead arrangers and managers for the
programme and the notes, rated AA1 by RAM.
The issuer is Malaysia’s third largest
rubber and oil palm plantation company
and one of the world’s top 10 plantation
companies.
› WCT PLANS PERPETUAL SUKUK
WCT HOLDINGS is planning a sale of perpetual
Islamic bonds off a proposed M$1bn
perpetual sukuk musharaka programme.
The offering is likely to launch around
mid-September for a minimum of M$500m
with room to upsize.
AmInvestment Bank, CIMB, Maybank, OCBC
and RHB are joint lead managers for the deal.
Proceeds from the perpetual bonds will
be used to redeem M$800m of bonds ahead
of the maturity date in 2020. An additional
M$300m of Islamic bonds due in 2021 and
2022 are also likely to be redeemed with
internal cash.
The property and construction
company is embarking on a liability
management exercise to keep its
leverage low and defend its AA rating
from Marc.
The local rating agency put the issuer
on negative watch in November last year
on the company’s slower-than-expected
progress on reducing its elevated leverage
position. Its total borrowings had increased
to M$3.6bn at end-June 2018 from M$3.3bn
a year before.
By redeeming the senior bonds with a
perpetual bond that will have 50% equity
credit from Marc, WCT will lower group
debt to M$2.9bn with the gross debt-to-
equity ratio falling to 0.81 times from 1.13
times during the first half of 2019. At the
same time, it will also strengthen its capital
structure.
As a result, the perpetual sukuk has
earned a stable rating of A from Marc. WCT
had apprised holders of the 2020s, 2021s
and 2022s earlier this year of the early
redemption plans.

› DIGI DIALS IN SUKUK
DIGI TELECOMMUNICATIONS last Monday raised
M$900m in a dual-tranche Islamic bond
that priced inside revised guidance.
A M$450m seven-year sukuk will pay
3.5% and a M$450m 10-year sukuk will pay
3.6%. Initial price guidance was shown in the
respective ranges of 3.70%–3.85% and 4.09%–
4.14% but was tightened after orders started
to pour in to 3.55%–3.70% and 3.65%–3.80%.
Final orders amounted to over M$3bn,
reflecting a robust appetite for high-quality
corporate paper amid falling benchmark rates.
The final yields came with tight spreads
of about 25bp for the seven-year paper and
30bp for the 10-year notes over Malaysian
government securities. MGS yields have
fallen since the start of August, with the
10-year dropping about 35bp by August 26
when the deal was priced.
The notes, rated AAA by RAM, will settle
on September 20 and will be drawn from a
M$5bn Islamic CP/MTN programme.
AmInvestment Bank, CIMB and RHB were
joint lead managers.
The telecom company, which is owned
by Digi.com, has the largest cellular
subscriber base in Malaysia, RAM said in
a note, and counts Telenor as its ultimate
majority shareholder with a 49% stake.
NEW ZEALAND
DEBT CAPITAL MARKETS
› TRANSPOWER GENERATES NZ$150M
TRANSPOWER NEW ZEALAND, rated Aa3/AA–
(Moody’s/S&P), raised the maximum
NZ$150m (US$96m) it was seeking from
a six-year retail note offer via sole lead
manager ANZ.
The 1.735% September 4 2025s priced
at par, within the initial 72bp–77bp and
revised 72bp-75bp guidance ranges, at mid-
swaps plus 73bp.
In March, the state-owned electricity
supplier issued a NZ$150m 2.73% five-year
note, priced at mid-swaps plus 75bp.
› TOYOTA READIES FIVE-YEAR SALE
TOYOTA FINANCE NEW ZEALAND, rated Aa3/AA–
(Moody’s/S&P), has mandated ANZ as lead
manager and MUFG as co-manager for a
proposed five-year wholesale fixed-rate New
Zealand dollar note issue.
In April, Toyota Finance New Zealand
priced a capped 2.71% NZ$100m five-year
note at mid-swaps plus 88bp.
STRUCTURED FINANCE
› ECLIPX MARKETS ABS
ECLIPX GROUP,through its subsidiary Eclipx
Fleet Holdings (ECX), has mandated ANZ
and Westpac for a potential New Zealand
dollar ABS issue, under ECX’s FP Ignition
ABS Programme, following investor
meetings in Wellington and Auckland on
September 3 and 4.
Eclipx Group, a diversified Antipodean
financial services company, previously
issued a NZ$224.4m (US$144m) auto loan
trade through FP Ignition Series 2017-B
Trust, in June 2017.
PHILIPPINES
DEBT CAPITAL MARKETS
› BPI MAKES SWISS GREEN DEBUT
BANK OF THE PHILIPPINE ISLANDS, rated Baa2/BBB+/
BBB– (Moody’s/S&P/Fitch), raised SFr100m
(US$102m) from two-year debut Green
bonds at a yield of -0.020%.
The Swiss franc-denominated notes,
which have a coupon of 0%, are the first
negative-yielding bonds to be issued out of
the Philippines in the international capital
markets.
The senior unsecured bonds due
September 24 2021 were fully subscribed
by Swiss investors. By investor type,
70.3% of the notes were allocated to asset
managers, 15.7% to private bank clients
and retail investors, 13% to institutional
investors and 1% to provident funds.
Credit Suisse, UBS and BPI Capital were the
lead managers.
In June, BPI established a green
finance framework to fund projects with
environmental benefits. The framework
is aligned with the International Capital
Market Association’s Green Bond Principles,
the ASEAN Green Bond Standards, and
the Loan Market Association Green Loan
Principles.
Under the framework, BPI will finance
renewable energy, energy efficiency,
sustainable water and waste water
management, pollution prevention and
control, and green building projects.
Separately, BPI is planning to raise
another tranche of offshore bonds subject
to market conditions.
It has updated its MTN programme to
US$2bn or its equivalent in other currencies.
The bank has appointed BPI Capital,
Deutsche Bank, HSBC, JP Morgan, ANZ, Bank of
International Financing Review Asia August 31 2019
COUNTRY REPORT PHILIPPINES
America Merill Lynch, Citigroup, Credit Suisse,
DBS, ING, Mizuho Securities, MUFG, SMBC Nikko,
Standard Chartered Bank and UBS as dealers
for the programme. BPI Capital is sole global
coordinator and lead arranger.
The bank last week made a stock exchange
announcement to clarify comments made by
its chief financial officer to local media. It said
it “remains opportunistic in tapping the debt
capital markets”.
In August 2018 BPI sold US$600m five-
year Reg S bonds at Treasuries plus 160bp
in its offshore debut.
› UBP AND AUB BONDS GET BOARD NOD
and ASIA UNITED
UNION BANK OF THE PHILIPPINES
BANK have received board approval to raise
up to Ps50bn (US$956m) from peso bonds,
according to filings on the Philippine Stock
Exchange.
The board of UBP approved the issuance
of up to Ps20bn unsecured Tier 2 bonds.
The bank has filed an application with
Bangko Sentral ng Pilipinas to issue the
subordinated notes.
The board of AUB approved a Ps30bn
bond programme. The details and timing of
issuance will be set by the management.
Separately, UBP exercised the call option
on Ps7.2bn unsecured Tier 2 bonds, ahead
of the scheduled maturity in 2025.
On July 20, the also bank closed a
US$150m three-year term loan after
attracting nine banks in general syndication.
SYNDICATED LOANS
› MANILA WATER OBTAINS €250M FACILITY
MANILA WATER, a unit of Philippine
conglomerate Ayala, has signed a €250m
(US$277.8m) seven-year term loan facility
for capital investment.
Bank of China (Hong Kong) and Bank of China
Manila branch were the lenders of the loan.
The major projects for the investment
include developing medium-term water
sources, improving existing water distribution
systems, building new sewerage treatment
plants and expanding sewer networks.
In March, Manila Water raised a Bt5.3bn
(then US$168m) five-year term loan to take
out a bridge that backed its purchase of a
18.7% stake in Thailand’s Eastern Water
Resources Development & Management.
Mizuho Bank and Bank of Ayudhya were
the lenders of the financing, while Manila
Water (Thailand) was the borrower.
Listed on the Philippine Stock Exchange,
Manila Water is the exclusive water
supplier and provider of wastewater
treatment services to more than six million
people in the east zone of metro Manila
29
and Rizal province, according to its website.
Manila Water is expected to spend Ps79.4bn
(US$1.52bn) on projects from 2018 to 2022.
EQUITY CAPITAL MARKETS
› AXELUM TO OPEN IPO IN MID-SEPTEMBER
Coconut products manufacturer AXELUM
RESOURCES is likely to open books for a
Ps7.7bn (US$147m) IPO in mid-September.
The company said in a stock exchange
disclosure the retail offer will be open for
subscription between September 24 and
September 30 but did not provide details
on the timing of the institutional offer. The
shares will start trading on the Philippine
Stock Exchange on October 7.
The offering will comprise 700m primary
shares and 430m secondary shares at a
maximum price of Ps6.81 each.
BPI Capital and First Metro Investment are
the bookrunners.
Proceeds will be used for future acquisitions
and new manufacturing facilities. Axelum
makes products such as coconut water,
coconut milk, desiccated coconut and coconut
oil for industrial and consumer use.
› STA LUCIA PLANS PS7.6BN FOLLOW-ON
Property developer STA LUCIA LAND is planning
a Ps7.6bn follow-on offering in November.
In a filing with the SEC, the company said
up to 2.7bn shares will be sold in a Ps2.26–
Ps2.80 range. There is an overallotment option
of up to 300m shares. The offer, including
overallotment, represents 27% of the capital.
The funds will be used to acquire land
and develop new projects.
China Bank Capital is the bookrunner.
SINGAPORE
DEBT CAPITAL MARKETS
› ST ENGINEERING READIES CPS
ST Engineering North America has set up
a US$1.5bn commercial paper programme
guaranteed by parent company SINGAPORE
TECHNOLOGIES ENGINEERING.
Under the programme, it may issue
short-term unsecured promissory notes at
tenors up to 397 days. Proceeds will be used
for general corporate purposes.
State investment holding company
Temasek Holdings owns a 51% stake in
ST Engineering, which is a technology,
defence and engineering group.
30
UBS makes AT1 savings
„ Bonds Falling yields make Singapore dollars more attractive for foreign banks
UBS GROUP priced a S$750m (US$540m)
perpetual non-call five Additional Tier 1 bond at
par to yield 4.85%, one of the lowest coupons for
a foreign AT1 in Singapore dollars, and made a
substantial saving over its US dollar funding cost.
Books were over S$3.2bn from around
120 accounts, after tightening from initial
guidance of 5% area.
The pricing represented more than a 100bp
saving on the Swiss bank’s last Singapore dollar
AT1, sold in November last year at 5.875%,
equivalent to the Singapore swap offer rate plus
360.5bp. That perp has traded up nearly five
points since then and was quoted at a yield of
4.6% at the start of bookbuilding.
Singapore SOR has come down
dramatically this year, but the new deal also
paid a tighter spread of 337.2bp over SOR.
The new issue printed around 100bp
inside UBS’s US dollar AT1 secondary curve,
so the Singapore dollar market is expected
to attract more European banks to top up
their capital, said a source close to the deal.
Societe Generale, Credit Suisse and Standard
› ARA TAKES TO PERPETUAL
ARA ASSET MANAGEMENT last Thursday raised
S$350m (US$252m) from perpetual non-
call seven securities priced at 5.6%, flat to
final guidance and 20bp tighter than initial
guidance of 5.8% area.
No distribution data were released.
The unrated bonds will reset to the
original spread of 406bp over Singapore
dollar SOR and step up by 300bp if not
called at the end of year seven.
Settlement is on September 4 with
proceeds to be used for general corporate use,
including debt refinancing, general working
capital and capital expenditure needs.
Credit Suisse, DBS, OCBC and UOB were
joint lead managers.
Property fund management company
ARA is one of the largest REIT managers in
Asia Pacific.
SYNDICATED LOANS
› MMI PAYS AS KKR REVIVES SALE PROCESS
KKR-backed MMI HOLDINGS has settled the
remaining US$14m of a US$31m instalment
due in June for its US$580m loan signed in
2015.
As a result, MMI is temporarily relieved
International Financing Review Asia August 31 2019
Chartered have already raised AT1s in
Singapore dollars so far this year.
UBS’s AT1s are expected to be rated BBB–
by Fitch, below the bank’s senior ratings of
A–/A+ (S&P/Fitch).
The last foreign bank issue to price at a
lower yield was HSBC’s AT1, rated Baa3/BBB
(Moody’s/Fitch), sold in 2017 at a yield of 4.7%.
The British bank issued another Singapore
dollar bond last year, an AT1 callable in 2023,
which provided a pricing reference for UBS’s
new deal and was seen at 4.3%.
Singapore took 71% of the UBS notes, the
rest of Asia 25%, and Europe 4%.
By investor type, private banks and
corporates booked 65%, fund managers and
insurers 33%, and banks 2%.
UBS was sole global coordinator and joint
lead manager with DBS, Standard Chartered
and UOB.
The bonds were seen at 100.0/100.2 last
Thursday afternoon after active trading in the
morning.
DANIEL STANTON
from a prepayment acceleration of all
outstanding debt due on September 26.
The US$31m instalment was originally
due on June 27, but MMI only managed to
service the interest payment and US$17m
of the principal.
In early August, a lender proposed terms
for a refinancing of the existing facility.
However, MMI did not agree to the terms
and has not made counterproposals.
Separately, sponsor KKR & Co, which
bought MMI in 2007, has resumed
talks with a Chinese consortium led by
Beijing HBH Innovation Industry Fund
Management for a potential sale of MMI
that hit a roadblock last year.
KKR signed a sale-and-purchase
agreement in July last year to sell its 100%
stake in MMI to the Chinese investor group
for around US$700m.
However, the sale was not completed
because the Chinese consortium failed
to win approvals from China’s State
Administration of Foreign Exchange to
transfer money from its onshore to offshore
accounts for the equity contribution of the
proposed transaction, according to sources
familiar with the matter.
ANZ, Bank of America Merrill Lynch, Cathay
United Bank, CTBC Bank, DBS Bank, Maybank,
Mega International Commercial Bank, Standard
Chartered, Sumitomo Mitsui Banking Corp and

UOB were the mandated lead arrangers and
bookrunners of the US$580m deal, which
comprises a US$520m five-year amortising
term loan and a US$60m revolving credit
facility.
The loan’s repayment is in 11 unequal
quarterly instalments that started in
September 2017: 2.5% (1–7), 6% (8–10) and
50% (11).
MMI produces more than 26 million
high-precision parts for computer hard disk
drives weekly, according to its website. The
company has design centres and plants in
China, Malaysia, Singapore and Thailand.
RESTRUCTURING
› HYFLUX DENIES SIGNING AGREEMENT
United Arab Emirates-based Utico said
last Thursday it obtained approval from
the creditors of cash-strapped HYFLUX on a
restructuring agreement, capping a week
in which both companies made conflicting
claims on the status of the agreement.
Hyflux said last Wednesday it had
not signed a definitive agreement with
Utico on the S$400m (US$288m) rescue
package. The embattled Singaporean water
treatment company said it was in very
advanced stages of discussions, but “the
definitive agreement has not been entered
Louis Dreyfus wraps up sustainability deal
„ Loans Pricing to reduce every year if LDC meets sustainability targets
Netherlands-headquartered merchant
and processor of agricultural goods LOUIS
DREYFUS has completed a US$650m revolving
credit facility in Asia with a margin based
on a sustainability-linked mechanism after
attracting 26 lenders in general syndication.
The financing, which is for Louis Dreyfus
Co Asia, renews LDC’s previous three-year
US$534m Asia RCF that was used for
investments, refinancing, capital expenditure,
working capital and general corporate purposes.
For the first time, margins on the Asia
RCF are linked to LDC’s performance in
meeting reduction targets in four areas:
CO2 emissions, electricity and energy
consumption, water usage, and solid waste
sent to landfill.
LDC will benefit from an interest rate
margin reduction for every year in which it
improves its sustainability performance, as
validated by an independent auditor.
The facility pays an initial margin of 90bp
over Libor, plus utilisation fees of 10bp for
into by both parties, pending resolution on
certain final outstanding issues in the draft
definitive agreement”.
On Thursday, Utico released a statement
suggesting that the Hyflux board had
differences of opinion over certain issues,
including advisory fees. The UAE electric
utility said it had capped the fees at S$25m.
While it did not contradict Hyflux’s
statement, Utico said the Singapore
company had to resolve its differences
quickly to avoid a further erosion of its
value.
Reuters had reported that 70% of Hyflux’s
senior creditors as well as the majority of
investors holding Hyflux perpetual and
preference shares were in favour of Utico’s
restructuring agreement. Utico had set
Hyflux a deadline of August 26 to sign a
final agreement, after pushing it back from
August 16.
Utico plans to invest S$400m in Hyflux,
split into S$300m in equity and a S$100m
shareholder loan, which would give it an
88% stake. It is not clear whether these
terms still apply.
Hyflux has debts of S$3bn, including
S$900m of perpetual bonds and preference
shares (PNP) as well as S$271m in senior
unsecured bonds held by institutional and
high-net-worth investors.
Hyflux has a moratorium in place that
will expire on September 30.
drawings of under a third, 20bp for drawings
of 33%–66%, and 40bp for drawings of over
two thirds.
The financing, which was launched at
US$500m, was led by ABN AMRO, DBS,
HSBC, OCBC Bank and UOB as joint lead
arrangers and bookrunners.
ABN AMRO and DBS acted as
sustainability coordinators.
“Supported by a significant global asset
portfolio, LDC is committed to producing,
processing and supplying food for a growing
world population, while minimizing our
environmental impact,” Andrea Maserati,
LDC’s chief operating officer, said.
“As our teams continue to pursue the
realisation of our ambitious environmental
protection targets, we appreciate the
opportunity to translate them into greater
financial savings for the company,” he added.
In May, LDC said it had renewed its
US$750m North America RCF incorporating
the same pricing mechanism.
International Financing Review Asia August 31 2019
COUNTRY REPORT SOUTH KOREA
EQUITY CAPITAL MARKETS
› LENDLEASE PLANS TO PRE-MARKET IPO
Australia’s LENDLEASE GROUP plans to start
pre-marketing for a Singapore Exchange
real estate investment trust IPO of up to
S$750m (US$540m) in the week starting
September 2, people with knowledge of the
transaction said.
The REIT will contain retail assets.
Lendlease has retail properties in
Australia and Singapore, where it owns the
Parkway Parade, 313@Somerset and Jem
retail malls.
Citigroup and DBS are the banks on the
transaction.
SOUTH KOREA
DEBT CAPITAL MARKETS
› KOREAN AIR TAKES OFF WITH KDB
KOREAN AIR LINES last Wednesday priced
US$300m three-year 2% senior unsecured
notes guaranteed by KOREA DEVELOPMENT BANK
at 99.641 to yield 2.124%, equivalent to
Treasuries plus 70bp.
That financing, which replaced an existing
US$750m three-year RCF that was due
to mature in 2020, was arranged by BNP
Paribas, Bank of America Merrill Lynch,
ICBC, ING Bank, MUFG, Societe Generale
and SunTrust as joint lead arrangers and
bookrunners.
ING Bank was sustainability structuring
agent while BNP Paribas was sustainability
coordinator.
LDC said previously that it intends to
incorporate similar sustainability-linked
targets on its other RCFs as they come up for
renewal.
The company has six RCFs through three
of its regional hubs in the US, Switzerland
and Singapore. The facilities totalled
US$3.3bn in December 2018. Refinancing
risk is limited by both geographical
diversification and staggered maturity dates
as each regional hub refinances one of its
RCFs each year.
ALASDAIR REILLY, CHIEN MI WONG
31
 This was at the tight end of final
guidance of Treasuries plus 70bp–75bp, and
inside initial guidance of 95bp area.
Books were over US$1.1bn from more
than 70 accounts at final pricing, and the
issue size was capped at US$300m. Asia took
74% of the Reg S bonds and Europe 26%.
By investor type, fund managers booked
51%, life insurers and corporates 26%, banks
19%, and private banks 4%.
The Reg S notes have expected ratings of
Aa2/AA (Moody’s/S&P).
Credit Suisse, KDB Asia and UBS were joint
bookrunners.
Proceeds will be used for general
corporate purposes, including repaying debt.
› SK HYNIX HIRES FOR MEETINGS
Semiconductor manufacturer SK HYNIX, rated
Baa2/BBB– (Moody’s/S&P), has mandated
BNP Paribas, Citigroup and Credit Suisse to
arrange investor meetings in Asia and
Europe from September 2.
A US dollar Reg S bond offering with a
short to intermediate maturity may follow,
subject to market conditions.
SK Telecom owns a 20% stake in SK
Hynix, which is one of the world’s three
largest makers of memory chips, according
to S&P.
EQUITY CAPITAL MARKETS
› HANWHA SYSTEMS PREPARES KRX IPO
HANWHA SYSTEMS, the defence electronics
developer of South Korean conglomerate
Hanwha Group, has filed to the KRX to go
public, a person close to the matter said.
The IPO could value the company at
W2trn (US$1.6bn), according to press
reports, but people on the deal did not
confirm the fundraising size or timeline.
Citigroup, Korea Investment & Securities and
NH Investment & Securities are working on the
deal.
Hanwha Aerospace, another unit of
Hanwha Group, is the largest shareholder
in Hanwha Systems with a 52.9% stake,
followed by H-Solutions Corp with 26.1%.
Formerly known as Samsung Thales, the
unit changed its name to Hanwha Thales
when Hanwha Group bought Samsung’s
stake in the company in 2015. Hanwha
increased control the following year after
taking over the remaining stake from
French defence company Thales Group and
renamed the firm Hanwha Systems.
Hanwha Systems merged with the
group’s information technology solutions
unit Hanwha S&C in May.
Hanwha Systems did not respond to an
email seeking comment.
32
THAILAND
DEBT CAPITAL MARKETS
› INDORAMA VENTURES HITS ROAD
INDORAMA VENTURES, an intermediate
petrochemicals producer based in Thailand,
has mandated Standard Chartered as sole
global coordinator and joint bookrunner
with ANZ, Bank of America Merrill Lynch and
HSBC to arrange investor meetings in Hong
Kong, Singapore and London, which began
on August 28.
A US dollar Reg S senior fixed-rate bond
offering may follow, subject to market
conditions.
Subsidiary Indorama Ventures Global
Services will issue the proposed bonds with
a guarantee from the parent.
On August 7, Indorama Ventures agreed
to acquire the oxides and derivative
business of US chemicals group Huntsman
for around US$2bn. The transaction is
expected to be completed by the end of the
year, subject to regulatory approvals.
Indorama said the transaction would
be funded by internal cashflows and debt
financing.
› BERLI JUCKER SHOPS FOR BONDS
BERLI JUCKERwill open subscription to a five-
tranche bond in early September to raise
up to Bt22bn (US$719m).
A four-year tranche of up to Bt4bn will
pay 3.00%, a five-year tranche of up to
Bt7bn pays 2.65%, a six-year tranche of up
to Bt3bn pays 2.86%, an eight-year tranche
for up to Bt1bn pays 2.99% and a 10-year
non-call five tranche of up to Bt7bn pays
3.32%.
Pricing on the four-year tranche was set
earlier and at a higher yield as it is the only
tranche being offered to the public.
The other four tranches were priced on
August 22 during a bookbuilding session
and will be offered to institutional and
high-net-worth investors. Price guidance
for the five, six, eight and 10-year non-call
five tranches were shown at 2.65%–2.85%,
2.72%–2.92%, 2.89%–3.05% and 3.32%–3.48%,
respectively.
Subscription will be held on September
5, when the final tranche sizes will be
fixed.
The Thai consumer products maker,
rated A+ by Tris, will use the proceeds to
refinance a Bt22bn bond that will mature
in September. Berli Jucker has another
Bt30bn of bonds that mature in March and
June.
International Financing Review Asia August 31 2019
Bangkok Bank, Kasikornbank, Krungthai Bank
and Phatra Securities are joint lead managers.
› PTT GLOBAL GOES TRIPLE
PTT GLOBAL CHEMICAL last Tuesday priced a
Bt10bn triple-tranche bond within price
guidance.
A five-year tranche was set at par to yield
2.20%, a seven-year tranche at 2.43% and a
10-year piece at 2.75%. Price guidance was
shown at 2.20%–2.42%, 2.33%–2.55% and
2.61%–2.87%, respectively.
Subscription will be held on September
3-4, when the final tranche sizes will be
determined. The deal is being offered only
to institutional investors and comes after
the Thai petrochemical company, locally
rated AA+ by Fitch, sold Bt10bn of 2.9% five-
year bonds in a public offering to retail and
institutional investors in mid-August.
Bangkok Bank, Bank of Ayudhya,
Kasikornbank, Krungthai Bank, Siam Commercial
Bank and Standard Chartered Bank Thai are
joint lead managers.
EQUITY CAPITAL MARKETS
› ASSET WORLD PRE-MARKETING IPO
Property developer ASSET WORLD has started
pre-marketing a US$1bn–$1.5bn IPO, with
books likely to open in the middle of
September, people with knowledge of the
transaction said.
The company plans to sell up to 22.5% of
its share capital.
Bank of America Merrill Lynch, Bualuang
Securities, Kasikorn Securities, Morgan Stanley,
Phatra Securities, Siam Commercial Bank and
UBS are the banks on the transaction.
AWC owns and develops retail, office
and hospitality properties. It is part of
Thailand's TCC Group, which has interests
in beverages, retail and property. Thai
Beverage, Berli Jucker and Frasers Property
are the other companies in the group.
› S HOTELS PLANS IPO OF UP TO US$250M
is planning a US$200m–
S HOTELS AND RESORTS
$250m Stock Exchange of Thailand IPO
towards the end of the year.
The company said in a preliminary filing
around 1.44bn shares, or 40% of the capital,
will be offered.
Parent Singha Estates will be selling up to
165m shares and the rest will be primary.
Singha Estates’ stake will be reduced to
58.76% after the IPO.
S Hotels runs 39 hotels in Thailand, the
Maldives, Mauritius, Fiji and the UK.
CIMB Thai Bank, Credit Suisse and Krungthai
Bank are the banks on the transaction.
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