MAY 1 2021 ISSUE 2381 www.ifre.

com

EIB’s €100m two-year using Banque de

France tokens pushes digital bonds forward

Goldman Sachs’ derivatives traders profit

from explosion of rates volatility

US$6bn debt backing LBO of UK security

company G4S will test ESG attitudes

EMERGING MARKETS LOANS EMERGING MARKETS BONDS

An airline? From Alibaba seeks Giant steppe: After year of
Turkey? Pegasus cheaper funding Mongolian miner fallen angels,
pays up to raise via US$5.15bn raises US$210m bond investors
US$375m amend and extend from debut bond eye rising stars
04 08 10 11
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Upfront
Testing times
I t is a jarring juxtaposition. As heart-wrenching images of
Covid-19 casualties and overwhelmed healthcare workers
in India grip the world, Zomato and Power Grid Corp are
each hoping to raise more than US$1bn in the equity
markets – a size usually only possible in the best of market
conditions.
YEARûOLDû&RENCHûLEGALûFRAMEWORKûnû
Both appear to have a decent chance of success, as long as
the broader market holds up. Power Grid’s infrastructure
trust is a defensive play, and Covid has been good for
Zomato’s food delivery business.
Zomato, in particular, will be a test of what’s really possible
in India.
The hugely popular restaurant app is a hot name, the
„ OPINION INTERNATIONAL FINANCING REVIEW
This was more than another proof of concept transaction
and there are real reasons why market participants should sit
up and notice.
In particular, anyone still convinced that the traditional
legal and technical framework used for the creation of bonds
will provide a regulatory moat that preserves the usual way
of doing things might need to think again.
4HEû%)"ûUSEDûTHEûTHREE
the Dispositif d’Enregistrement Electronique Partage – to
ensure the legality of unlisted securities that are not
registered with depositories.
4HEûDEALûALSOûEMPLOYEDûTHEû"ANQUEûDEû&RANCESûDIGITALû
money as the payment system, giving it an effective
ENDORSEMENTûFROMûTHEûHIGHESTûAUTHORITYûINû&RENCHûlNANCE
And then there are the EU’s initiatives to support digital
COUNTRYSûlRSTûTECHûUNICORNûOFFERINGûINVESTORSûSOMETHINGû lNANCEûTHEû$,4û0ILOTû2EGIMEûANDûTHEûCRYPTO
ASSETSû
very different to the insurance stocks and unexciting SOEs regulatory framework known as the Markets in Crypto-
that have dominated IPOs in recent years. But India’s IPO Assets.
MARKETûISûDEEPLYûmAWEDûANDûAûûALLOCATIONûFORûHIGHû Taken together it would be short-sighted for anyone in the
net-worth and retail investors makes the outcome of any market – bankers, clearers, custodians, investors and many
listing hard to predict. more – to ignore the way the wind is blowing.
While Burger King India and Mazagon Dock Shipbuilders
WEREûEACHûMOREûTHANûûTIMESûSUBSCRIBEDûLASTûYEARûOTHERû
companies from popular sectors – such as Gland Pharma – Now, about that divergence…
struggled to win over investors. (That stock has since almost
doubled.)
Zomato will also need to convince investors it can justify a
HIGHûVALUATIONûFORûAûPRE
PROlTûCOMPANYû&OODûDELIVERYûISûANû
W e’ve found one! A Brexit dividend! Yes, the UK can
NOWûDOûAWAYûWITHûSOMEû-I&)$û))ûREQUIREMENTSû
around research and best execution in certain sections of
ultra-competitive sector, and more experienced investors the market! Talk about sunlit uplands.
will no doubt remember the disastrous performance of All right, that wasn’t on the side of the bus and it’s a
2ELIANCEû0OWERSûû)0/ûASûAûWARNINGûABOUTûINVESTINGûINûANû rounding error compared with Brexit’s enormous
unproven business. DISRUPTIONûFORûlNANCIALûSERVICESûBUTûATûLEASTûITûEXISTS
4HERESûAûLOTûRIDINGûONûAûSUCCESSFULûmOATûFORû:OMATOû)NDIAûISû 4OûBEûPRECISEûTHEû&#!ûWANTSûTOûDROPû%5ûRULESûONûSO
CALLEDû
lNALISINGûRULESûTOûALLOWûCOMPANIESûTOûSELLûSHARESûOVERSEASû
and US-listed SPACs are circling, but the country desperately
wants homegrown tech companies to list on the local stock
market. Indian issuers are also wary of being lost among
bigger players in the vast US markets. A juicy Zomato debut
would go a long way to proving the domestic market can
compete.
The key to completing these big deals, however, will be
UNBUNDLINGûREQUIREMENTSûFORûRESEARCHûONûlXEDûINCOMEû
currency and commodities markets, and for research on
SMALLûCOMPANIESûWITHûCAPITALISATIONSûOFûLESSûTHANûaMû)Tû
is also proposing to reduce best execution reporting
requirements.
It says that the changes “remove unnecessary regulation,
make the requirements less complex and make these
markets work better”.
keeping foreign investors engaged. 4OûTAKEûTHEû&)##ûWORLDûTHEû&#!ûMAKESûTHEûQUITEû
India’s unicorns need foreign investors to hold their nerve. reasonable point that deals in that market are not paid for
The Indian market has so far shrugged off the mounting by commissions to brokers but come from the spread
#OVIDûCRISISûLOSINGûLESSûTHANûûINû!PRILûEVENûASûFOREIGNû
funds turned net sellers. If coronavirus continues to run
wild across the country, that sense of immunity will be
sorely tested.
between buying and selling, so the issue of hidden
commissions doesn’t really arise.
That is a real concern in the equity markets, so doing
away with inducement rules in that area – albeit just for
small companies – is a greater risk. But given the limited
coverage of such companies even before the introduction of
A change is gonna come -I&)$ûSTEPSûTOûENCOURAGEûITûAREûSENSIBLE
It is true that these proposed changes are pretty

A õMûTWO YEARûBONDûISSUEûFROMûTHEû%UROPEANû
Investment bank would normally merit a brief mention
INû)&2ûnûATûMOSTû"UTûLASTûWEEKSûõMûTWO YEARûOFFERINGû
small beer. It is clear, though, that they are just the
lRSTûSTEPûINûAûWELCOMEûWIDERûREVIEWûOFûTHEû5+SûCAPITALû
markets rules. Whether Brexit was a good idea or not,
from the EIB – the Luxembourg-based issuer’s debut deal it’s done now and the UK needs to take advantage of
using the blockchain – is a whole different plate of THEûGREATERûFREEDOMSûAROUNDûlNANCIALûREGULATIONûWHEREû
gromperekichelcher. those actually exist.

International Financing Review May 1 2021 1

Top news
Pegasus gauges Turkey demand 04 G4S faces ESG test 04 European IPOs pass health check 06

EIB’s €100m digital debut pushes

blockchain bonds forward
„ Bonds Banque de France’s digital currency used to issue bond that does without central depository

BY DAVID CHEETHAM, ALEX CHAMBERS 4HEûõMûû!PRILûû #"$# ûPROJECTûANDûCARRIEDûOUTûVIAû SECURITYûISûDEPLOYEDûONûTHEûPUBLICû

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FORWARDûINûDEVELOPINGûTHEû TOKENSûUSINGûPUBLICûBLOCKCHAINû REGISTEREDûONûAûBLOCKCHAIN MARKETûINFRASTRUCTUREûINVOLVEDû)Tû
DIGITALISATIONûOFûCAPITALûMARKETSû TECHNOLOGYûGoldman Sachs, h4HEREûAREûTWOûCOMPONENTSûTOû SHORTENSûTHEûLINKûBETWEENû
THROUGHûBLOCKCHAINûTECHNOLOGY SantanderûANDûSociete Generale THISû/NûONEûHANDûTHEûISSUANCEûBYû INVESTORSûANDûISSUERSv
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Goldman derivatives traders profit

from rates vol explosion
„ People & Markets Extreme swaptions moves prove challenging for bank traders

BY CHRISTOPHER WHITTALL (EDGEûFUNDSûHADûUSEDûTHESEû WHENûINTEREST RATEûVOLATILITYû TRADINGûREVENUESûINûTHEIRû

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2 International Financing Review May 1 2021

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Alibaba seeks cheaper funding 08 Giant steppe for Mongolia  SLBs come to corp hybrids 

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Q1 2020

VACCINATIONûPROGRAMMEûWOULDû EXTREME VOLATILITY MARKETSûHAVEûSINCEûSUBSIDEDûASû

BRINGûTHEû#OVID ûPANDEMICû 4HEûDIFFERENCEûINûVOLATILITYû 4REASURYûYIELDSûHAVEûSTABILISEDûINû
Note: *By trade count; quarterly data
UNDERûCONTROL BETWEENûATûTHE MONEYûANDûOUT RECENTûWEEKSû Source: ISDA

International Financing Review May 1 2021 3

Top news
Pegasus Airlines tests desire
for Turkish credit
„ Emerging Markets Some say debut deal is cheap; some say nowhere near cheap enough

BY ROBERT HOGG -UCHûHASûHAPPENEDûTOû BANKSvûSAIDûAûBANKERûATûONEûOFû h9OUûTHENûHADûSOMEûINVESTORSû

4URKISHûCREDITSûSINCEû-ARCHûINû THEûLEADSûh9OUûAREûGENERALLYû WHOûTOOKûAûMEETINGûANDû)ûDONTû
,OW
COSTûCARRIERûPEGASUS AIRLINES PARTICULARûAFTERû0RESIDENTû2ECEPû TALKINGûABOUTûBLUE
CHIPûNAMESû THINKûTHEREûWASûAûSINGLEûONEûOFû
BECAMEûTHEûlRSTû4URKISHûISSUERû 4AYYIPû%RDOGANûSACKEDûCENTRALû WITHûINTERNATIONALûREVENUESûANDû THOSEûWHOûSAIDûTHEYûWEREûWORRIEDû
TOûPRINTûAûDEALûSINCEûTHEûOUSTINGû BANKûGOVERNORû.ACIû!GBALûLATEûINû NATURALûHEDGESûTHATûMAKEûTHEMû ABOUTû0EGASUSSûBUSINESSûMODELûORû
OFûTHEûCOUNTRYSûCENTRALûBANKû THEûMONTH LESSûEXPOSEDûTOûLIRAûVOLATILITYv HOWûTHEYREûRUNvûSAIDûTHEûBANKERû
GOVERNORûINû-ARCHûSOWEDûFRESHû 4HEûSOVEREIGNSû*ANUARYû h4HEûBIGûCHALLENGEûWASûACCOUNTSû
DOUBTSûABOUTûTHEûDIRECTIONûINû SûFORûEXAMPLEûAREûBPû “The big challenge SAYINGû@WEûLOVEûITûBUTûWEûDONTû
WHICHûTHEûCOUNTRYûISûHEADING HIGHERûINûYIELDûTERMSûSINCEûTHEû was accounts saying, HAVEûAPPROVALûTOûBUYûANYTHINGû
4HEûCOSTûOFûCUTTINGûAûPATHûTOû BEGINNINGûOFû-ARCHûANDûONû 4URKISHû4HEûLEVELûOFûDECISIONû
INTERNATIONALûBUYERSûWASûHIGHû 7EDNESDAYûWEREûBIDûATû
‘we love it but we don’t MAKINGûHASûMOVEDûVERYûMUCHû
THOUGHûWITHû0EGASUSûPAYINGûAû 4YPICALLYûTHEûSOVEREIGNû have approval to buy HIGHERûTHANûANûINDIVIDUALû
YIELDûOFûûTOûBRINGûINVESTORSû REOPENSû4URKISHûMARKETSûAFTERûAû anything Turkish’. PORTFOLIOûMANAGERûGOINGûUPûTOûTHEû
ONûBOARDûAûDEBUTûISSUERûFROMûANû BOUTûOFûTURMOILûBUTûONûTHISû The level of decision CHIEFûINVESTMENTûOFlCERûLEVELûATû
OUTûOFûFAVOURûGEOGRAPHYûANDû OCCASIONûITûFELLûTOûTHEûAIRLINEûTOû making has moved TIMESûnûANDûTHENûGETTINGûTURNEDû
SECTOR DOûTHEûHONOURSû4HEûDEALûWASû DOWNûBECAUSEûITûISû4URKISHv
very much higher than
)NûANûILLUSTRATIONûHOWEVERûOFû ALSOûTHEûCOUNTRYSûlRSTûCORPORATEû
JUSTûHOWûMUCHûUNCERTAINTYû BONDûSINCEûAûTRADEûFROMûBISCUITû
an individual portfolio FALLING SHORT
THEREûISûAROUNDû4URKEYûSOMEû MAKERû5LKERûINû/CTOBER manager” ,EADSûBank of AmericaûANDû
THOUGHTûTHEû53MûlVE
YEARû h)NVESTORSûHAVEûCONSISTENTLYû %VENûSOûSOMEûINVESTORSûmATLYû Goldman SachsûSPENTûMOREûTHANûAû
NON
CALLûTHREEûDEALûWASûVERYû TOLDûUSûTHATûTHEIRûINTERESTûINûTHEû REFUSEDûTOûTAKEûONûEXTRAû4URKISHû WEEKûMARKETINGûTHEûAIRLINEûTOû
CHEAPûOTHERSûTHOUGHTûITûWASûNOTû
CHEAPûENOUGH
G4S LBO debt to gauge ESG attitudes
„ Bonds/Loans Social considerations may affect appetite for bonds and loans backing buyout of UK security outfit
BY ELEANOR DUNCAN
"RITISHûSECURITYûlRMûG4SSû
LEVERAGEDûBUYOUTûBYûALLIED
UNIVERSAL SECURITIESûWILLûBEûAûGOODû
TESTûOFûHOWûIMPORTANTû%3'û
CONCERNSûAREûFORûDEBTûINVESTORSû
CORPORATEûSECTORûISûGREATERûTHANû
THATûINûTHEûSOVEREIGNûANDûTHEû
'3ûRUNSûSEVERALûPRIVATEû
PRISONSûnûALTHOUGHû!LLIEDû
5NIVERSALûSAIDûINûITSûOFFERû
DOCUMENTûTOû'3ûSHAREHOLDERSû
THATûITûMIGHTûEXITûTHEûBUSINESS
“G4S definitely sets
RISKûWHATEVERûTHEûMERITSûOFû"
""nûRATEDû0EGASUS
ANDûALLEGEDûHUMANûRIGHTSûABUSESû
BYû'3û7HILEûBANKERSûSAYûTHEû
SUBJECTIVITYûOFû%3'û
CONSIDERATIONSûMEANSûTHATûTHEû
COMPANYûHASûMARKETûACCESSûnû
ANDûMAYûNOTûEVENûHAVEûTOûPAYûAû
PREMIUMûTOûISSUEûnûSOMEû
INVESTORSûBEFOREûOPENINGûBOOKSû
ONû4UESDAYûATûn
TOûRUNûAû"IRMINGHAMûPRISONûASûAû
RESULTûOFûOPERATIONALûFAILURESû
4HEû5+ûGOVERNMENTûALLEGEDû
THATûTHEû"IRMINGHAMûFACILITYû
HADûTHEûHIGHESTûASSAULTûRATEûOFû
ANYûPRISONûINû%NGLANDûANDû
7ALES
COMPAREDûWITHûTHEIRûNEEDûFORû off alarm bells for me: INVESTORSûAREûUNCOMFORTABLEû )NûADDITIONûTHEû/-ûNOTESûTHATû
YIELD workforce and human WITHûTHEûCREDIT CLAIMSûHAVEûBEENûBROUGHTû
%3'ûHASûBECOMEûAûGROWINGû /NEû,ONDON
BASEDûINVESTORû AGAINSTûITûONûBEHALFûOFû!MERICANû
rights would be the
THEMEûINûTHEûHIGH
YIELDûMARKETû SAIDûTHATûWHILEûATûlRSTûGLANCEûHISû SERVICEûMEMBERSûALLEGINGûTHATû
THISûYEARûONûBOTHûSIDESûOFûTHEû
first port of call” PORTFOLIOSû%3'ûlLTERSûWOULDûNOTû '3ûASûWELLûASûOTHERû53û
!TLANTICûASûITûEXERTSûANû NECESSARILYûRULEûTHEûCOMPANYû COMPANIESûOPERATINGûINû
INCREASINGûINmUENCEûOVERûTHEû OUTûnûUNLIKEûCREDITSûINûTHEû !FGHANISTANûPROVIDEDûSUPPORTû
CAPITALûMARKETSûMOREûGENERALLYû TOBACCOûALCOHOLûWEAPONSû TOûTHEû4ALIBAN
!NDûWHILEûTHEû'3û,"/ûISûNOTûANû "OTHû!LLIEDû5NIVERSALûWHICHû GAMBLINGûANDûCOALûINDUSTRIESûnû 4HEû/-ûALSOûDETAILSûREPORTSûOFû
%3'
LABELLEDûDEALûSOMEû ANNOUNCEDûTHEû53BN
ITSûCONTROVERSIESûULTIMATELYû ALLEGEDûHUMANûRIGHTSûABUSESûATû
INVESTORSûSAIDûTHEYûAREûLOOKINGûATû EQUIVALENTûHIGH
YIELDûBONDû MAKEûITûAûNO
GOûFORûHIM '3SûIMMIGRATIONûFACILITIESûINû
THEûOFFERINGûTHROUGHûANû%3'ûnû PORTIONûOFûAûNEARû53BNû h'3ûDElNITELYûSETSûOFFûALARMû 0APUAû.EWû'UINEAûANDûPRISONû
SPECIlCALLYûSOCIALûnûLENS lNANCINGûONû4HURSDAYûANDû'3û BELLSûFORûMEûWORKFORCEûANDû FACILITIESûINû3OUTHû!FRICA
'3ûHASûSIMILARITIESûTOû53û AREûCOMINGûUNDERûPARTICULARû HUMANûRIGHTSûWOULDûBEûTHEûlRSTû !ûSPOKESPERSONûFROMû!LLIEDû
PRIVATEûPRISONûOPERATORû SCRUTINYûTHANKSûTOûAûNUMBERûOFû PORTûOFûCALLvûSAIDûTHEûINVESTOR 5NIVERSALûDECLINEDûTOûCOMMENTû
#ORE#IVICûWHICHûSAWûTWOûOFûITSû ALLEGATIONSûMADEûAGAINSTûTHEû '3SûWEBSITEûHASûAûSOCIALû
THREEûUNDERWRITERSûPULLûOUTûOFûAû SECURITYûlRMûASûOUTLINEDûINûTHEû SOCIAL RESPONSIBILITY RESPONSIBILITYûPAGEûWHICHûSAYSû
PLANNEDûBONDûSALEûINû!PRILû OFFERINGûMEMORANDUM 2ISKûFACTORSûLISTEDûINû'3Sû THEûCOMPANYSûhETHOSûISûBASEDû
THANKSûTOûPRESSUREûFROMû%3'û 4HEûDEALSûRISKûFACTORSûINCLUDEû OFFERINGûMEMORANDUMûINCLUDEû UPONûFAIRNESSûANDûRESPECTûFORû
INVESTORSû AûLITANYûOFûOPERATIONALûFAILINGSû THEûCOMPANYSûLOSSûOFûAûCONTRACTû HUMANûRIGHTSv

4 International Financing Review May 1 2021

 For daily news stories
@ visit www.ifre.com

$EMANDûREACHEDûAROUNDû THEû5+û53ûANDûTOûANûEXTENTû REFERENCE POINT 0EGASUSûPOSTEDû%BITDAûOFû

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&ITCHûSAIDûITûWASûTARGETINGûWHENû TYPICALûFORûAûDEALûEXECUTEDûOUTûOFû REFERENCEûPOINTûFORûPRICEû !NDûWHILEûTHATûWASûBETTERû
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RATINGS MORNINGû5+ûTIME LOOKEDûATûOTHERûAIRLINESûSUCHûASû WHICHûPOSTEDûNEGATIVEû%BITDAû
"UTûTHEûAIRLINEûSTILLûCROSSEDû h4HISûWENTûDOWNûTOûTHEûWIREû "RAZILIANûCARRIERSû!ZULûANDû'/, DUEûTOûTHEûPANDEMICû30ûSAIDûITû
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MOREûTHANûTHEû53Mû ACCOUNTSûHAVINGûONEûlNALû BONDûBIDûATûûACCORDINGûTOû 0EGASUSSûCASHûNEEDSûINCLUDINGû
MINIMUMûITûHADûANNOUNCEDû DISCUSSIONûTOûCONlRMûTHEIRû)O)Svû -ARKET!XESSûANDû'/,ûHASûAû lNANCEûLEASEûPAYMENTSûANDûNEWû
WHENûINITIALûPRICEûTHOUGHTSû SAIDûTHEûBANKER *ANUARYûûNOTEûBIDûATû AIRCRAFTûCAPEX
WEREûRELEASED h7EûWERENTûGOINGûTOûPUTûTHEû h4HEûCOMPARISONûWITHûGLOBALû h4HEûAIRLINEûBURNTûCASHûANDû
4HEûDEALûWASûESSENTIALLYû ISSUERûATûRISKûOFûAûFAILEDûDEALûSOû AIRLINESûRIGHTûNOWûWASûNOTûAû INCURREDûNEWûADJUSTEDûDEBTûONû
COVEREDûWHENû)04SûWENTûOUTûONû THISûWASûABOUTûDERISKINGûITûTOû HELPFULûTHINGûASûSOMEûOFûTHOSEûAREû AûGROSSûBASIS ûTOûlNISHûûWITHû
SCREENSûLEDûBYûKEYûORDERSûFROMû THEûMAXIMUMûEXTENTûPOSSIBLEv INûFRANKLYûAûVERYûDIFFERENTûANDû ABOUTûõBNûOFûDEBTûFROMûABOUTû
MOREûDISTRESSEDûSPOTûCOMPAREDûTOû õBNûINûvûSAIDûTHEûRATINGSû
TURKEY'S 4.75% JANUARY 2026s 0EGASUSûWHICHûISûEXPECTINGûTOûBEû AGENCY
% MONTHLYûCASHmOWûPOSITIVEûBYû 2EVENUESûDROPPEDûFROMûõBNû
7.0 *ULYvûSAIDûTHEûBANKER INûûTOûõMûLASTûYEAR
"UTûONEûINVESTORûSAIDûTHEû h4HEYREûNOTûGOINGûTOûBEûATû
6.5
PRICEûFAILEDûTOûCOMPENSATEûFORû lNANCIALûYEARûûUNTILûATûLEASTû
6.0 THEûFALLûINû0EGASUSSûREVENUESû vûSAIDûTHEûINVESTORûh7HENû
THEûDEGREEûOFûLEVERAGEûANDûTHEû 0EGASUSûCANûISSUEûAûBONDûTHEû
5.5
NATUREûOFûTHEûBUSINESS MARKETûISûOPENûFORûEVERYONEv
5.0 h)TûWASûAûSOLIDûBUSINESSûINû 4HEûBONDSûTRADEDûUPûINûTHEû
lNANCIALûYEARûvûHEûSAIDûh)Tû AFTERMARKETûFROMûPRICINGûATûPARû
4.5 WASûGENUINELYûIMPRESSIVEûBUTû TOûABOUTûûSUGGESTINGûTHATû
THERESûNOûGUARANTEEûITûWILLû THEûLEADSûDIDûAûDECENTûJOBûOFû
4.0
15/3/21

22/3/21

29/3/21

12/4/21

19/4/21
5/4/21

26/4/21
1/3/21

8/3/21

RETURNûTHEREû4HEûPUNTûISûTHEû lNDINGûAûWAYûTHROUGHûTHEûNOISEû
REOPENINGûNARRATIVEûANDûITSû ANDûTHEûDIFFERENTûOPINIONSûTOû
Source: Refinitiv, Tradeweb NAIVEûTOûAPPLYûTHATûTOû4URKEYv SETTLEûONûANûACCURATEûPRICE „

7HILEûTHEûDECISIONûTOûINVESTû THREEûSENIORûSECUREDûNOTESû ENVIRONMENTûWILLûOUTWEIGHûANYû MOREûVOLATILEûANDûHAVEûAûHIGHERû

ORûNOTûWILLûULTIMATELYûBEûAû ANDûaMûOFûSEVEN YEARû %3'ûCONCERNSûTHOUGHûITSûNOTû DEFAULTûRATEû)TSûREALLYûSUBJECTIVEv
JUDGEMENTûCALLûFUNDûMANAGERSû NON CALLûTHREEûSENIORûSECUREDû CLEARûIFûTHEYûWILLûDEMANDûAûSO 3UCHûCOMPANIESûSHOULDNTûBEû
SAYûTHEYûAREûNOTûHELPEDûBYûAûLACKû BONDS CALLEDûSINûPREMIUMû AUTOMATICALLYûEXCLUDEDûFROMûTHEû
OFûAûSTANDARDISEDû%3'ûRATINGSû h-YûCURRENTûTHINKINGûISû MARKETûSAIDûTHEûBANKERû
SYSTEM “Look at oil and heavy GREENûCOMPANIESûGETûAûPRICINGû )NVESTORSûSHOULDûTHINKûOFûLENDINGû
h4HEREûJUSTûARENTûTHATûMANYû industrials. They get DISCOUNTûSECTORSûTHATûlTûINTOû ASûAûCHANCEûTOûSTARTûAûDIALOGUEû
CREDITSûTHATûAREûOBVIOUSLYû charged a premium OBVIOUSûNEGATIVEûSCREENSûLIKEû WITHûTHEûCOMPANYûTOûENCOURAGEû
BADDIESvûSAIDûAûSECONDûINVESTORû TOBACCOûPAYûAûPREMIUMvûSAIDû THEMûTOûCHANGEûTHEIRûPRACTICESû
h7ITHû'3ûTHERESûBEENûAûLOTûOFû
and ESG funds, which THEûlRSTûINVESTOR 3TILLûFORûSOMEûINVESTORSû
CONTROVERSYûOVERûTHEûYEARSûBUTû are an increasing h"UTû)ûWONDERûIFûWEREûSTILLûEARLYû DIVESTINGûISûTHEûWAYûTOûGOû
ULTIMATELYûWITHûINVESTORSûITSû portion of the market, ONûENOUGHûINûTHEû%3'ûJOURNEYûTHATû '3SûBONDûDOCUMENTSûSTATEû
DOWNûTOûWHOûYOURû%3'ûSCORINGû won’t buy them. But AûCOMPANYûLIKEûTHISûWHICHû THATûINûû.ORWAYSûSOVEREIGNû
PROVIDERûISûANDûWHATûDISCRETIONû is the premium down DElNITELYûHASû%3'ûRISKSûnûBUTû WEALTHûFUNDûBANNEDûALLû
YOUûHAVEûONûYOURûOWNûTOûTAKEûAû DOESNTûDIRECTLYûFALLûINTOûAûBUCKETû lNANCIALûHOLDINGSûINû'3û
to the fact that these
VIEWv EXCLUDINGûTHEMûFROMûBIGûCHUNKSû ONûTHEûBASISûTHATûTHEûGROUPû
4HEûBONDûOFFERINGûWHICHûISû
companies are much OFûTHEûMARKETûnûCANûSTILLûCOMEû CONTRIBUTESûTOûORûISûRESPONSIBLEû
EXPECTEDûTOûBEûRATEDû""""nûISû more volatile and have WITHOUTûHAVINGûTOûPAYûUPûFORûTHATv FORûSERIOUSûORûSYSTEMATICûHUMANû
SPLITûACROSSûTHREEûCURRENCIESûANDû a higher default rate?” %VENûWHENûCOMPANIESûTHATû RIGHTSûVIOLATIONSûALLEGINGûTHATû
lVEûTRANCHESû HAVEûWEAKERû%3'ûCREDENTIALSû '3ûTAKESûCUSTODYûOFûEMPLOYMENTû
)NûTHEû53ûDOLLARûMARKETû 4HEûlNANCINGûPACKAGEûALSOû HAVEûTOûPAYûUPûITûCANTûBEûSAIDû PASSPORTSûINûCERTAINûGEOGRAPHIESû
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SEVEN YEARûNON CALLûTHREEû 53MûlRST LIENûTERMûLOANû"û ISûDOWNûTOûTHOSEûSPECIlCû TAKEûLARGEûLOANSûTOûPAYû
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õMûOFûSEVEN YEARûNON CALLû MAKEûRETURNSûINûAûLOW YIELDû THATûTHESEûCOMPANIESûAREûMUCHû COMMENTû „

International Financing Review May 1 2021 5

Top news
European IPOs pass crucial health
check as sentiment improves
„ Equities Synlab performs on debut after cut while PolyPeptide surges

BY ROBERT VENES mATûTOûPRICINGûBUTûWEREûUPû COULDûBEûMAINTAINEDûPOST THATûTHEûSELLERSûSIMPLYûDIDûNOTûWANTû

AROUNDûûINûLATEûAFTERNOON PANDEMICû7HILEûSOMEûCHANGESû TOûSELLûASûMANYûSHARESûATûTHEûBOTTOMû
4HEREûWEREûDISPARATEûOUTCOMESû !ûBANKERûAWAYûFROMûTHEû THATûHAVEûRESULTEDûFROMûTHEû OFûTHEûRANGEûh4HEREûWASûPRICEû
FORûTWOû%UROPEANûHEALTHCAREû 3YNLABû)0/ûSAIDûTHATû PANDEMICûLOOKûCERTAINûTOûBEû SENSITIVITYûSOûTHEREûWASûAûREDUCTIONû
)0/SûLASTûWEEKûASûTHEûBUYSIDEû EXPECTATIONSûONûVALUATIONûFROMû MAINTAINEDûPARTICULARLYûTHEûUSEû INûSIZEûBUTûTHISûWASûAûBOOKûTHATûWASû
CONTINUESûTOûBEûHIGHLYûSELECTIVEû THEûISSUERûHADûBEENûhCRAZYvûANDû OFûTECHNOLOGYûOTHERSûAREû ALLOCATEDûûTOûLONG ONLYûMONEYû
DESPITEûAûMARGINALûIMPROVEMENTû HISûlRMûWASûNOTûONûTHEûDEALûASûITû POTENTIALLYûMOREûTRANSITORYû THATûWANTEDûTHEûSTOCKvûHEûSAID
INûMARKETûSENTIMENTûANDû HADûPITCHEDûWELLûBELOWûWHEREû 3YNLABûOFFERSûMASSû0#2ûTESTINGû 4HEûlNALûBOOKûHADûBEENû
INCREASEDûINVESTORûINTERESTûINûTHEû THEûISSUERûSAWûVALUEû FORû#OVID ûANDûITSû%BITDAûGREWû ANCHOREDûBYûSOVEREIGNûWEALTHû
SECTORûDUEûTOûTHEûPANDEMIC ûINûûWITHûADJUSTEDû FUNDSûANDûLONG ONLYûACCOUNTSûWITHû
3WISSûPEPTIDEûSPECIALISTû “We had to zero a OPERATINGûPROlTûDOUBLINGûINûTHEû THEûTOPûûORDERSûTAKINGûûOFûTHEû
POLYPEPTIDE GROUPûCLOSEDûUPûû number of accounts YEAR mOATûWITHûAûQUARTERûOFûTHEûBOOKû
ONûITSûDEBUTûONû4HURSDAYûAFTERû that had put in the 4HEûBANKERûALSOûQUESTIONEDû ZEROEDûANDûûGOINGûTOûRETAILûBank
PRICINGûITSû3&RMû53M û work. But we also had 3YNLABSûINTENTIONûOFûSPENDINGû of AmericaûBarclaysûBNP Paribasû
3)8û)0/ûABOVEûTHEûMIDPOINTûOFû õMûPERûYEARûONûAVERAGEûONû Deutsche BankûHSBCûJefferiesûANDû
GUIDANCE
heavy participation ACQUISITIONSûHAVINGûNOTûPREVIOUSLYû UniCreditûWEREûJOINTûBOOKRUNNERS
4HEûSAMEûCOULDûNOTûBEûSAIDûFORû from specialists, which MAINTAINEDûTHATûLEVELûOFûSPEND
'ERMANûCLINICALûANDûDIAGNOSTICû provide sticky money /Nû-ONDAYûAHEADûOFûBOOKSû PEPTIDE POP
SERVICESûCOMPANYûSYNLABûWHICHû and want to build CLOSINGûATûMIDDAYûONû4UESDAYû 0OLY0EPTIDEûWHICHûMAKESûTHEû
WASûFORCEDûTOûDOWNSIZEûITSû positions over time” THEûSECONDARYûTRANCHEûOFû ACTIVEûINGREDIENTSûINûMANYû
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BEFOREûPRICINGûITSûõMûmOATûATûTHEû SHARESûFROMûMû0RIMARYûWASû GAININGûNEARLYûûINûAFTERNOONû
BOTTOMûOFûAûõnõûPRICEûRANGE $ISAGREEMENTSûONûVALUATIONûAREû MAINTAINEDûATûAûlXEDûõM TRADINGûTOûTAKEûTHEû)0/ûRETURNûTOû
3YNLABûSHARESûWEREûINûPOSITIVEû PERHAPSûINEVITABLEûASûINVESTORSû !ûBANKERûATûONEûOFûTHEûGLOBALû ûFROMû3&RûPRICING
TERRITORYûONû&RIDAYSûDEBUTûAFTERû HADûTOûGAUGEûTOûWHATûEXTENTû COORDINATORSûDISMISSEDûTALKûOFû 4HEûDEALûHADûBEENûCOVEREDû
AûSLOWûSTARTû4HEûSTOCKûOPENEDû 3YNLABSûSTELLARûûPERFORMANCEû CONmICTSûOVERûVALUATIONûANDûSAIDû WITHINûHOURSûOFûBOOKSûOPENINGû

Spirit Airlines sheds costly debt baggage

and shows the way for fellow flyers
„ Equities Low-cost carrier cuts interest bill through equity and convert combo

BY STEPHEN LACEY SHARESûNOWûTRADINGûATûTHREEû THEûUNDERLYINGûSTOCKûANDûHOLDERSû STOCKûSALEûTOûCLAWûBACKûûOFûITSû

TIMESûTHEûCONVERSIONûPRICEûONû LOOKûTOûHEDGEûBYûSHORTINGûTHEû 53MûPRINCIPALûûHIGH
YIELDû
/PTIMISMûABOUTûTHEûRESUMPTIONû THOSEûBONDSûTHEYûAREûRIPEû STOCKû4YPICALLYûAû#"ûREPURCHASEû NOTESûDUEûûATûûOFûPARû
OFûTRAVELûSAWû53ûLOW
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6 International Financing Review May 1 2021

 @ For daily news stories
visit www.ifre.com

ANDûATûTHEûTOPûOFûTHEû3&Rn3&Rû
PRICEûRANGEûTHEûFOLLOWINGûDAYû
4HEREûWASûDOUBLE DIGITûCOVERAGEû
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International Financing Review May 1 2021 7

Top news
Alibaba seeks cheaper funding
„ Loans Tech giant’s push for lower margins splits opinion after record antitrust fine

BY APPLE LI, EVELYNN LIN 7ITHûTHEûRULINGû#OMMUNISTû ANDûAREûBELLWETHERSûOFû#HINASû STATEûREGULATIONûMADEûITûAûSAFERû

0ARTYûTIGHTENINGûITSûCONTROLûOVERû TECHNOLOGYûSECTORûSOMEûLENDERSû CREDITû
ALIBABA GROUP HOLDINGûISûASKINGû THEûTECHNOLOGYûSECTORûLENDERSû FEELûTHATû4ENCENTûHASûSTRONGERû
LENDERSûFORûAûLOWERûINTERESTûRATEû AREûUNDERSTANDABLYûWARYûABOUTû PROSPECTS “With the sweeping
ANDûLONGERûMATURITYûONûAû !LIBABASûAMENDMENTûANDû h!LTHOUGHûTHEûPRICINGûISûTHEû
53BNûLOANûAGREEDûINûû EXTENSIONûEXERCISEûWHICHûSEEKSû SAMEûASûTHATûONû4ENCENTSûDEALû
crackdown, we’re not
ASûITûATTEMPTSûTOûMOVEûONûFROMû TOûSLASHûTHEûINTERESTûMARGINûTOû WEûSTILLûTHINKûITSûAûBITûTIGHTûASû keen on increasing
ANûANTI MONOPOLYûPROBEûANDû BPûOVERû,IBORûFROMûBPûANDû 4ENCENTûISûPERFORMINGûBETTERû our exposure in the
RECORDûlNEûIMPOSEDûBYû#HINESEû EXTENDûTHEûMATURITYûUNTILûû THANû!LIBABAûINûTERMSûOFûHAVINGû company at such a
REGULATORS .EWûLENDERSûAREûOFFEREDûALL INû AûBETTER DIVERSIlEDûBUSINESSû tight pricing, but we’ll
#HINASûLARGESTûTECHNOLOGYû PRICINGûOFûBPûBASEDûONûAûBPû HIGHERûPROlTABILITYûANDûSTRONGERû
still be holding existing
COMPANIESûHAVEûBEENûUNDERû FEEûFORûAûlVE YEARûTENORûWHILEû EARNINGSûGROWTHûPOTENTIALvûSAIDû
INCREASEDûSCRUTINYûWITHû!LIBABAû EXISTINGûLENDERSûAREûOFFEREDû AûSECONDû(ONGû+ONG BASEDû
Alibaba paper”
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ITSûBILLIONAIREûFOUNDERû*ACKû-ASû h7ITHûTHEûSWEEPINGû 4HEûPENALTYûREPRESENTSûûOFû
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COUNTRYSûREGULATORYûSYSTEMûINû INCREASINGûOURûEXPOSUREûINûTHEû 7HILEûSOMEûBANKSûAREûHAVINGû 2MBBNûINû#HINAû!SûOFû
/CTOBERû/Nû!PRILûûTHEû3TATEû COMPANYûATûSUCHûAûTIGHTûPRICINGû SECONDûTHOUGHTSûOTHERSûREMAINû $ECEMBERûûûITSûCASHûCASHû
!DMINISTRATIONûFORû-ARKETû BUTûWELLûSTILLûBEûHOLDINGûEXISTINGû SUPPORTIVEûOFû!LIBABAûASûTHEû EQUIVALENTSûANDûSHORT TERMû
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E COMMERCEûGIANTûHADûABUSEDûITSû ASûPEERû4ENCENTû(OLDINGSûPAIDû NOW 53BN
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SEVERALûYEARSûBYûRESTRICTINGû lNANCINGûTHATûCLOSEDûINû EXISTINGûLENDERûONû!LIBABASû FRACTIONûOFû!LIBABASûCASHmOWû)Tû
COMPETITIONûTHROUGHûEXCLUSIVEû &EBRUARYû7HILEûBOTHû!LIBABAû ûDEALûSAIDûTHEûANTITRUSTû DOESNTûHAVEûMUCHûlNANCIALû
ARRANGEMENTS ANDû4ENCENTûAREûRATEDû!!!û INVESTIGATIONûANDûCLOSERû IMPACTûANDûTHATSûWHYûWEûHAVEû

European companies revisit refi loans

„ Loans Borrowers back for investment-grade deals as terms revert to pre-Covid levels

BY ALASDAIR REILLY LEVELSûRElNANCINGûREQUESTSûAREû BUSINESSûANDûINCREASEDûTHEûDRIVEû TENORûONûLOANSvûAûTHIRDûBANKERû

ACCELERATING TOûPRE #OVIDûCONDITIONS SAID
!CTIVITYûINûTHEû%UROPEANû h4HEREûISûDElNITELYûSOMEû h)TSûPRETTYûAGGRESSIVEûOUTû )BERDROLAûSIGNEDûAûõBNû
INVESTMENT GRADEûLOANûMARKETûISû NORMALITYûCOMINGûBACKûINTOûTHEû THEREûRIGHTûNOWûANDûPRICINGûISû  YEARûSUSTAINABILITY LINKEDû
EXPECTEDûTOûRAMPûUPûASûTERMSû MARKETûESPECIALLYûINûINDUSTRIESû ONLYûGOINGûONEûWAYûnûSTRONGLYûINû CREDITûFACILITYûWITHûPRE #OVIDû
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LEVELSûENCOURAGINGûMOREû ACTIVITYûISûBUILDINGvûAûSENIORû SECONDûBANKERûSAID THEûCOMPANYSûPREVIOUSû
BORROWERSûTOûSECUREûFULLû BANKERûSAID !LFAû,AVALûSECUREDûAûlVE YEARû SYNDICATEDûLOANûFROMû-ARCHû
RElNANCINGSûOFûTHEIRûCREDITû $ANISHûWINDûTURBINEûMAKERû MATURITYûPLUSûTWOûONE YEARû 
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DEALS IBERDROLAûANDû3WEDISHûINDUSTRIALû lNANCINGûOFûITSûKINDûTOûBEû OVERû%URIBOR,IBORûIFûCERTAINû
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GRADUALLYûRETURNûTOûPRE #OVIDû COMPETITIONûBETWEENûBANKSûFORû RETURNûOFûTHEûUSUALû YEARû THEûPANDEMICûTHROUGHûINCREASEDû

8 International Financing Review May 1 2021

 For daily news stories
@ visit www.ifre.com

NOTûCHANGEDûOURûVIEWSûONûTHEû
CREDITvûSAIDûAûFOURTHû(ONGû
RESTRUCTURINGûOFûTHEûCOMPANYû
THATûMEANSû!NTûWILLûBEû Discipline returns to
+ONG
BASEDûBANKERûATûAûSTATE
SUBJECTEDûTOûTOUGHERûREGULATORYû
OWNEDû#HINESEûBANKûTHATûISûANû
EXISTINGûLENDERûTOû!LIBABAûh!LSOû
OVERSIGHTûANDûCAPITALû
!LIBABAûISûNOTûTHEûONLYûCOMPANYû
INû#HINAûFACINGûSUCHûSCRUTINYû
4HEûAUTHORITIESûAREûLIKELYûTOûGOû
AFTERûOTHERûGIANTSûONEûBYûONEûTOû
CREATEûAûHEALTHIERûMARKETv
REQUIREMENTSûANDûISûREQUIREDûTOû
CUTûLINKSûBETWEENûITSûHUGELYû
POPULARûPAYMENTSûAPPû!LIPAYû
ANDûITSûOTHERûBUSINESSES
TECH RUSH
leveraged loans
„ Loans More deals prompts investor push-back, pricing rise
BY CLAIRE RUCKIN PRICEDûATûBPûOVERû%URIBORû
WITHûAûûmOORûANDûû/)$û
0RICINGûHASûWIDENEDûINû%UROPESû FROMûINITIALûGUIDANCEûOFûBPn
)NDEEDû#HINESEûAUTHORITIESû !LIBABASû!%ûISûTHEûLATESTûINûAû LEVERAGEDûLOANûMARKETûASûMOREû BP
AREûPREPARINGûAûSUBSTANTIALûlNEû SERIESûOFûLOANSûFORû#HINESEûTECHû SUPPLYûHASûENABLEDûCASH
RICHû h!ûFEWûWEEKSûAGOû,ONZAû
FORû4ENCENTûASûPARTûOFûITSû GIANTSû)NTERNETûANDûONLINEû INVESTORSûTOûCHOOSEûWHICHûDEALSû WOULDûHAVEûlRMLYûCOMEûATû
SWEEPINGûANTITRUSTûCLAMPDOWNû GAMEûSERVICESûPROVIDERûNETEASE THEYûWANTûTOûPARTICIPATEûINû BPnBPûONûTHEûEUROSvûTHEû
ONûTHEûCOUNTRYSûINTERNETûGIANTSû ISûSEEKINGûAû53Mû BRINGINGûANûENDûTOûAûSIX
MONTHû SYNDICATEûHEADûSAID
ALTHOUGHûITûISûLIKELYûTOûBEûLESSû RElNANCINGûWHILEûSEARCHû PERIODûTHATûSAWûAGGRESSIVELYû !ûSENIORûINVESTORûSAIDûh4HEREû
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International Financing Review May 1 2021 9

Top news
Giant steppe: Mongolian miner
raises US$210m from debut bond
„ Emerging Markets Record corporate issue comes as country pushes ahead with capital market reforms

BY DANIEL STANTON OFFERINGSûANDûEVENûFEWERû 4HEREûISûNOûRECORDûOFûHOWû $ARAMBAZARûSAIDûTHEûBONDû

GOVERNMENTûSECURITIESûISSUESû MANYûPRIVATEûPLACEMENTûBONDSû OFFERINGûWASûATTRACTIVEûTOû
ERDENES TAVAN TOLGOIûHASûMADEû &ROMûûTOûûû AREûOUTSTANDING INVESTORSûEARNINGûLOWûDEPOSITû
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this company
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third tranche because
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UPûBYû!PRILûûAHEADûOFûAûNATIONALû OFFERINGûOFûBONDSûMUSTûINû lXEDûDEPOSITûPAYINGûAROUNDûû
not every deposit term
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yet, though some DURINGû)0/SûADDûTOûTHEûCOSTûANDû 2ETAILûINVESTORSûTENDûTOû ESTABLISHEDûINûûTOûDEVELOPû
insurance companies, TIMEûREQUIREDûFORûPUBLICLYû DOMINATEûPUBLICûBONDûOFFERINGSû THEû4AVANû4OLGOIûCOALûDEPOSITû
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have begun buying 4HISûONEROUSûPROCESSûHASûLEDû THANûUSUALûSHAREûOFûTHEûDEALûANDû h%VERYONEûKNOWSûTHISû
corporate bonds” SOMEûCOMPANIESûTOûINSTEADûSELLû RETAILûBOUGHTûAROUNDûAûQUARTER COMPANYûBECAUSEûEVERYONEû
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BEENûFEWûCORPORATEûPUBLICûBONDû Source: Refinitiv TODAYûGIVENûlNANCIALû

10 International Financing Review May 1 2021

 @ For daily news stories
visit www.ifre.com

INSTITUTIONSûINCREASEDûFOCUSûONû
US bond buyers see rising stars
ENVIRONMENTALûMATTERS „ Bonds Investors try to capture upside as junk bond giants mend their balance sheets
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International Financing Review May 1 2021 11

Top news
Gecina highlights complexity
of ESG liability management
„ People & Markets Turning existing debt green needs clear explanation to avoid accusations of rewriting history

BY TESSA WALSH MANAGINGûYOURûCASHmOWûANDû WITHûGREENûORûSUSTAINABILITY 4HEûCOMPANYûSAYSûITûWANTSûTOû

LIQUIDITYû)NEVITABLYûTHISûMAKESû LINKEDûBONDS TAKEûAûBROADERûAPPROACHûTOû
&RENCHûREALûESTATEûCOMPANYû LIABILITYûMANAGEMENTûMOREû 'IVENû%3'ûSENSITIVITIESûANDû SUSTAINABILITYûACROSSûALLûOFûITSû
GECINASûMOVEûTOûRECLASSIFYûALLûOFû COMPLICATEDvûSAIDû!RTHURû THEûRISKSûOFûSO CALLEDû DEBTûRATHERûTHANûCHERRYûPICKû
ITSûEXISTINGûDEBTûASûGREENû +REBBERSûHEADûOFûSUSTAINABLEû GREENWASHINGûITûISûFARûEASIERûTOû ASSETSûFORûSPECIlCûISSUESûANDûISû
HIGHLIGHTSûCOMPLEXûLIABILITY lNANCEûATû.AT7EST REPLACEûCONVENTIONALûDEBTûWITHû NOTûINCLINEDûTOûWAIT
MANAGEMENTûISSUESûAROUNDû SUSTAINABLEûDEBTûTHANûVICEûVERSAû h'REENûISûBECOMINGûTHEûNEWû
SUSTAINABLEûDEBTûTHATûGOûBEYONDû “Green is becoming the ASûINVESTORSûEXPECTûGREENûBONDSû NORMû7EûPREFERûTOûASKûTHEû
TRADITIONALûCONSIDERATIONSûOFû new norm. We prefer ORû3,"SûTOûBEûREPLACEDûONûAûLIKE BONDHOLDERSûFORûTHEûAUTHORITYûTOû
CASHmOWûANDûLIQUIDITY to ask the bondholders FOR LIKEûBASISû RECLASSIFYûûOFûISSUEDûBONDSû
)TûRAISESûQUESTIONSûAROUNDûHOWû ANDûNOTûTOûWAITûFORûTHEûNEXTû
TOûMAINTAINûEXISTINGûGREENûDEBTû
for the authority to A CHANGE IS GONNA COME YEARSûTOûDOûITûBONDûBYûBONDvûSAIDû
ANDûTHEûQUALITYûOFûSUPPORTINGû reclassify 100% of )Nû'ECINASûCASEûHOWEVERûITûISû .ICOLASû$UTREUILûDEPUTYû#%/ûINû
ASSETSûHOWûTOûRElNANCEûVIAû issued bonds and not NOTûREPURCHASINGûANDûREPLACINGû CHARGEûOFûlNANCEûATû'ECINA
TENDERûOFFERSûORûNEWûISSUANCEûASû to wait for the next BONDSûBUTûHASûLAUNCHEDûAû 4HEûSUCCESSûOFû'ECINASû
WELLûASûCONVERTINGûEXISTINGûDEBTû years to do it bond by CONSENTûPROCESSûTOûASKû CONSULTATIVEûSTRATEGYûWHICHû
TOûGREENûALLûOFûWHICHûREQUIREûFARû BONDHOLDERSûTOûALLOWûITûTOû INCLUDESûAûGREENûBONDûFRAMEWORKû
bond”
MOREûENGAGEMENTûANDûDIALOGUEû RECLASSIFYûûOFûITSûEXISTINGû ANDûSECOND PARTYûOPINIONûBYû)33û
WITHûINVESTORS "OTHû.AT7ESTûANDû(3"#ûTHINKû õBNûOFûCONVENTIONALûBONDSûASû WILLûBEûPUTûTOûTHEûTESTûATûAû
h7HENûYOUûHAVEûAûGREENû LIABILITYûMANAGEMENTûISûSETûTOû GREENûDEBTûAFTERûANNOUNCINGû BONDHOLDERûVOTEûONû-AYûû)TûWILLû
BONDûTHEREûAREûADDITIONALû BECOMEûAûBIGGERûTOPICûFORûTHEû THATûITûWILLûBEûABLEûTOûREACHû REQUIREûnûAPPROVALû
REPUTATIONALûANDûSUSTAINABILITYû MARKETûASûCOMPANIESûREPURCHASEû CARBONûNEUTRALITYûBYûûRATHERû DEPENDINGûONûTHEûDOCUMENTATIONû
CONSIDERATIONSûTHANûPURELYû LEGACYûNOTESûANDûREPLACEûTHEMû THANûûASûORIGINALLYûEXPECTED BUTûEARLYûINDICATIONSûAREûPOSITIVE

UK set to scrap MiFID rules for FICC research

„ People & Markets Proposed changes seen as first step in divergence from EU rules post-Brexit

BY STEVE SLATER SEPARATELYû)TûALSOûWANTSûTOû ANDûMAKEûTHESEûMARKETSûWORKû -ANYûOBSERVERSûSEEûTHISûASûAû

REMOVEûTHATûINDUCEMENTûRULEûFORû BETTERvûTHEû&#!ûSAIDûINûITSû lRSTûSTEPûTOWARDSûGREATERûPOST

4HEû5+ûISûPLANNINGûTOûSCRAPûRULESû RESEARCHûTHATûISûOPENLYûAVAILABLEû CONSULTATIONûDOCUMENT "REXITûDIVERGENCEûBETWEENûTHEû%5û
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REGULATIONSûTHREEûYEARSûAGOûANDû TWOûSETSûOFûREPORTINGûOBLIGATIONSû THEû%5ûATûTHEûSTARTûOFûûANDû REVIEWINGû"RITAINSûCAPITALû
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12 International Financing Review May 1 2021


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ANDûONLYûTHEûUSEûOFûPROCEEDSû
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For daily news stories
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EMISSIONS DOWN
'ECINAûISûAûLISTEDûPROPERTYû SLB issuance expands
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International Financing Review May 1 2021 13

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YOU LOOK,
THE MORE
YOU SEE.
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16 Nomura
&
is set to
Markets
19 Santander
signs up 21 Evercore
CEO Ralph
lose US$2.9bn on with Peel Hunt so Schlosstein sees his
Archegos Capital as the Spanish bank’s firm enjoy its best
part of a US$10bn hit balance sheet can first quarter ever to
across the industry stand behind UK continue its strong
equity raises recent run

„ FRONT STORY RESULTS

Europe banks upbeat after decent Q1

Hopes rise for 2021 after strong equities and ECM
Buoyant equities and credit trading and
equity underwriting activity lifted revenues
across European investment banks last
quarter and helped them hold on to the
coat-tails of their US rivals, who enjoyed a
near record quarter.
Most of Europe’s big banks had a strong
we have seen in 2020, in 2021,” Barclays banks, and we’re going to do the same
CEO Jes Staley told reporters on a thing,” Staley said.
conference call. “If revenues soften in the second half of
DEUTSCHE BANK posted its best quarter for the year, which they very well may, then
six years on the back of a more than you dial back the accrual of compensation.”
DOUBLINGûINûPROlTûATûITSûINVESTMENTûBANKûTOû But it was not all good news. Credit Suisse
€1.49bn, and CEO Christian Sewing said the and UBS took big hits from losses to US hedge
lRSTûQUARTERûINûEQUITIESûTRADINGûANDû unit should be able to match 2020 levels. fund Archegos Capital Management (see
outperformed Wall Street’s biggest banks. (see Deutsche story on next page). story on next page), and European banks
%QUITIESûTRADINGûREVENUESûACROSSûlVEûOFûTHEû 4HATûCOULDûlLTERûTHROUGHûTOûTHEûPOCKETSûOFû LOSTûFURTHERûGROUNDûTOûTHEIRû53ûRIVALSûINûlXEDû
big European investment banks in the three traders and bankers, and Barclays stepped income trading.
months to the end of March totalled
US$4.5bn, up 54% from a year earlier and
OUTPACINGûTHEûûRISEûATûTHEûBIGûlVEû53û
banks.
BNP PARIBAS’ Q1 equities revenues bounced
back to €697m, compared with losses of
€87m a year ago – when dividend
cancellations hit French banks’ structured
products businesses hard.
BARCLAYS enjoyed its best quarter in
equities since at least 2014, when its
investment bank was restructured. The UK
bank’s equities revenues jumped 65% from a
year earlier to £932m, driven by derivatives
ACTIVITYûANDûlNANCINGû%QUITIESûTRADINGûWASû
also strong at HSBC and CREDIT SUISSE.
4HATûHELPEDûSEVERALûBANKSûTOûTHEIRûBESTûlRSTû
quarters for years, which lifted optimism that
the good times could continue through 2021
if vaccine rollouts spur economic recovery
and capital markets remain lively.
Barclays’ corporate and investment bank
up the accrual of variable compensation in 2EVENUESûFROMûlXEDûINCOMEûCURRENCYûANDû
Q1 amid signs US rivals have been ramping commodities trading across the six biggest
UPûPAYûSIGNIlCANTLY European banks to report totalled US$9.5bn,
“If you look at the American and other down 7% from the year before, according to
banks, they are clearly accruing IFR calculations at current exchange rates.
compensation at much higher rates, The big US banks reported a 17% rise.
REmECTINGûTHEûREVENUESûANDûPROlTABILITYûTHATû Barclays reported a 35% drop in FICC
people are experiencing in their investment revenues and BNP Paribas, UBS and HSBC
saw declines too.
But Deutsche bucked the gloom and
EQUITIES REBOUND, FICC WEAK FOR EUROPE reported a 34% rise in FICC revenues to
BANKS: Q1 REVENUES % CHANGE VS YEAR AGO
€2.5bn, the biggest year-on-year rise of any
150
major bank other than Morgan Stanley.
120 Credit trading was strong across the
banks, but countered by weaker revenues in
90 rates, foreign exchange and emerging
markets. HSBC’s FX revenues, for example,
60
fell 32% to US$952m.
30 European banks also enjoyed the boom in
underwriting revenues that ignited US
0 rivals. Revenues from underwriting and
ADVISORYûACROSSûTHEûlVEûBIGû%UROPEANûBANKSû
-30
MADEûAûPRETAXûPROlTûOFûaBNûINû1ûUPû
46% from £1.2bn a year earlier, despite a
WEAKûPERFORMANCEûINûlXEDûINCOMEûTRADINGû
That lifted the unit’s return on tangible
equity to 17.9%, up from 12.5% a year earlier
and easily its highest level in recent years.
“Investment banking is showing good
strength and I don’t think I would bet on
investment banking rolling back off what
that give a breakdown totalled US$4.4bn in
-60 Q1, up 59% from a year earlier and not far
Barclays
US banks avg
C Suisse
UBS
HSBC
BNPP**
Europe avg
Deutsche*
from the 76% rise at the big US banks.
Equity capital markets led the way,
thanks to extraordinary activity in bringing
FICC Equities Advisory/underwriting special purpose acquisition companies to
Source: Bank results, IFR estimates; some units may not be the US market in particular, and other
directly comparable; *Deutsche has no equities unit, **BNPP
doesn't break out advisory/underwriting. There is no meaningful
equity raisings in the quarter.
number for BNPP equities, as revenues were negative a year ago. Steve Slater, Christopher Spink
International Financing Review May 1 2021 15
“Traders colluded on trading strategies, exchanged
sensitive pricing information and coordinated on prices”
EU COMPETITION CHIEF MARGRETHE VESTAGER, P21

underwriter to ViacomCBS, one of the large

Archegos pain tops US$10bn positions it had to unwind.
Japan’s MITSUBISHI UFJ FINANCIAL GROUP has
Losses from exposures to ARCHEGOS CAPITAL intends to look at risk management and said it lost US$270m from its exposure, and
MANAGEMENT have topped US$10bn for banks, culture following its losses from Archegos and more details are likely when it reports
after NOMURA reported a bigger loss than
previously indicated last week and UBS
revealed a surprise loss related to the US-
based hedge fund that collapsed in March.
UBS said its investment bank suffered a
US$774m loss from the default by a US-
SUPPLYûCHAINûMANAGEMENTûlRMû'REENSILLûANDû
will also review strategic options. “It takes
years to build a reputation while it can be
seriously affected literally overnight,” Horta-
/SORIOûTOLDûSHAREHOLDERSûATûAûVIRTUALû!'-ûONû
Friday, where his appointment was approved.
results for last quarter on May 17. MIZUHO
FINANCIAL GROUP could take a US$90m hit,
according to media reports.
ARCHEGOS LOSS HITS US$10.5bn; BANKS'
PAIN FROM EXPOSURE
based client of its prime brokerage business
– showing that even with such a hefty blow,
banks have avoided naming the client. UBS
will take another US$87m hit this quarter
due to the unwinding of its last exposures,
taking its loss to US$861m.
“We are disappointed. It was a build-up of a
highly concentrated position. It was an
idiosyncratic event and not a market event; a
!NDREASû'OTTSCHLINGûTHEûHEADûOFûTHEûBANKSû US$m
risk committee, stood down just hours before 6,000
the meeting, after some large investors
opposed his re-election. The bank’s heads of 5,000
risk and the investment bank had already gone.
Nomura is the second biggest loser, with a 4,000
hit of near US$2.9bn. It took a ¥246bn
(US$2.3bn) charge from the “US client” in
3,000
the January–March quarter, higher than the
SPECIlCûCASEûWITHûHIGHLYûCONCENTRATEDû 53BNûITûPREVIOUSLYûmAGGEDûANDûTOOKûAû
2,000
position,” UBS chief executive Ralph Hamers further US$570m charge as of April 23. That
said. Its Swiss rival CREDIT SUISSE has been the could be higher, as it said it still had to
1,000
biggest loser. It took a SFr4.4bn (US$4.8bn) unwind 3% of positions as of that date.
loss in Q1 results, and said it may suffer That means losses from six major banks
another SFr600m hit as it unwinds positions total about US$10.5bn. 0
Credit Nomura Morgan UBS MUFG Mizuho
this quarter – taking its loss to near US$5.5bn. MORGAN STANLEY lost US$911m related to Suisse Stanley

Antonio Horta-Osorio, who took over as Archegos. The US bank had one of the Hit in Jan-March Expected April-June
Credit Suisse chairman on Friday, said he BIGGESTûEXPOSURESûTOûTHEûlRMûANDûWASû Source: Bank results; Mizuho based on media reports

JPM to bring staff back in July, and rotate them

JP MORGAN is bringing bank staff back to its WILLûROTATEûSTAFFûINûOFlCESûnûWITHûHALFû “We would fully expect that by early July, all
53ûOFlCESûFROMû-AYûûSUBJECTûTOûAûû
BASEDûEMPLOYEESûWILLûBEûINûTHEûOFlCEûONûAû
occupancy cap for those who wish to return.
By July, the bank is planning to have all staff
WORKINGûINûITSûOFlCESûONûAûROTATINGûSCHEDULE
The move coincides with plans
announced by the City of New York to fully
reopen by July 1 and could spur other banks
to accelerate their schedules for bringing
EMPLOYEESûBACKûTOûOFlCES
JP Morgan’s executive operating
committee told staff in a memo last week it
working on site and half working remotely
on a rotating basis.
“Throughout the pandemic, our buildings
and branches in the US have remained
open and have safely operated for our
essential employees,” the bank said. The
bank said its decision to reopen was based
on the US surpassing its goal of more than
200 million Covid-19 vaccinations and the
lifting of pandemic restrictions across the
country.
53
consistent rotational schedule, also subject to
our current 50% occupancy cap,” the bank said.
!ûSIGNIlCANTûNUMBERûOFûBANKERSûHAVEû
RETURNEDûTOûMAINûOFlCESûATûGOLDMAN SACHS,
whose chief executive in February described
working from home as an “aberration” that
he wanted to see the back of, and the
number was expected to gradually increase.
CITIGROUP had previously said it plans to
“invite” more of its employees back to the

Who’s moving where…

HSBC has appointed and Coutant will MORGAN STANLEY Frankfurt in 2019 to
Jean-Manuel Richier look after corporate has hired Florian set up its European
as co-head of global banking. Richier will Hessel from UBS to hub EMEA syndicate
banking and head of be based in Paris. join its syndicate desk.
investment banking He joined HSBC in desk. Hessel will be
for Continental Europe 2013 and has headed based in Frankfurt,
to succeed Hubert Switzerland for six covering mostly
Preschez, who has years, after previously FIG clients across
left the bank. Richier working at Citigroup, regions. He will
will work alongside Goldman Sachs and report to Matteo
Frederic Coutant – JP Morgan. Benedetto. Hessel
Richier will focus on spent six years at
investment banking UBS and moved to

16 International Financing Review May 1 2021

 People
& Markets
Other banks that had prime brokerage
relationships with Archegos included
Deutsche outperforms on
'OLDMANû3ACHSûWHICHûHASûSAIDûTHEûIMPACTû
was immaterial, and Deutsche Bank, which
has said it did not expect to incur a loss.
HSBC and Barclays said last week they did
not suffer any losses from Archegos.
Banks and regulators are assessing what
credit recovery
DEUTSCHE BANK outperformed its investment
BANKINGûPEERSûINûTHEûlRSTûQUARTERûTHANKSûTOû
a 34% rise in revenues to €2.48bn at its core
lXED
extraordinary activity in bringing special
purpose acquisition companies to the US
market. Revenues there increased nearly
INCOMEûTRADINGûBUSINESSûWHICHû
went wrong, and changes are expected from
both. A major problem is a lack of
transparency – Archegos had relationships
were more lacklustre.
with seven or eight prime brokerages, and
each bank did not know what leverage the
lRMûHADûWITHûPEERSûORûHOWûCONCENTRATEDûITSû
tenfold, from €20m in 2020 to €196m this
accounted for 80% of total revenues at the
investment bank.
4HEûlVEûMAJORû53ûBANKSûSAWûTHEIRûlXED
income revenues rise 17% year-on-year to
US$20.4bn, and rivals Barclays and BNP
Paribas reported a drop. Only Morgan
year.
Other aspects of origination and advisory
Debt capital markets rose 5% to €385m
and advisory fees fell 11% to €63m. Overall
origination and advisory revenues rose 40%
positions were. That created a blind spot, as
FAMILYûOFlCESûHAVEûFEWERûREPORTINGû
requirements than hedge funds.
It could see greater transparency and
COLLATERALûREQUIREDûFORûFAMILYûOFlCESû
demanded by regulators, or willingly
adopted by banks.
But prime brokerage has been a lucrative
and fast-growing area, and few banks are
likely to turn their back on it. Credit Suisse
ISûPLANNINGûTOûSIGNIlCANTLYûREDUCEûTHEûSIZEûOFû
ITSûPRIMEûBROKERAGEûANDûPRIMEûlNANCINGû
businesses, but few others are expected to
take major action.
Steve Slater
OFlCEûINû*ULYûANDûhANTICIPATEûUPûTOûû
returning throughout the summer”. In a
TAXûPROlTûATûTHEûINVESTMENTûBANKû
memo from its human resources head, Citi
said it is hoping to bring additional staff
back in September.
Stanley, which saw its revenues jump 44% to
US$3bn, did better than Deutsche.
The improvement was largely in credit
trading, particularly of distressed credits.
Deutsche said that this time a year earlier
there was an abundance of “mark-to-market
losses due to market dislocation” that had
not recurred in the latest quarter.
That was thanks to the strong bounce-
back in credit markets following the huge
infusion of central bank support. Other
areas, such as rates, FX and emerging
markets were more subdued compared with
2020.
4HEû'ERMANûBANKûHASûLARGELYûEXITEDû
equities trading, and is still in the process of
moving its prime brokerage platform to BNP
Paribas. That meant it was caught up in the
debacle surrounding the collapse of Archegos
Capital Management, which was a client of
many prime broking desks across the Street.
Deutsche got off lightly and avoided
TOûõMû4HATûWASûBELOWûTHEûlVEû53ûBANKSû
which produced a 76% rise to US$13.4bn,
helped by a fourfold rise in ECM to
US$5.9bn.
Deutsche said the ECM growth could be
maintained in coming quarters and said
revenues for the investment bank in 2021
COULDûBEûhESSENTIALLYûmATvûCOMPAREDûWITHû
the exceptional activity in 2020.
“Even if the markets normalise as
expected in the coming months, we
anticipate that revenues in 2021 will be
close to 2020 levels, which was a very strong
year,” chief executive Christian Sewing said
in a letter to staff. “We are seeing increasing
EVIDENCEûTHATûAûSIGNIlCANTûPORTIONûOFûTHEû
revenue growth in our investment bank
relative to 2019 will prove to be sustainable.”
0RE
SURGEDûûTOûõBNûINûTHEûlRSTûQUARTERû
That accounted for virtually all the group
PRE
TAXûPROlTûOFûõBNûTHEûHIGHESTûLEVELû
“We will continue to practice social
distancing efforts and require face masks.
These measures will stay in place until the
data tells us it’s safe to make a change. To
further protect our colleagues and help to
decrease the transmission of Covid-19, we
plan to offer at-home testing to those who
return to the workplace,” the bank said.
Philip Scipio
incurring losses, unlike some other banks
that have racked up more than US$10bn of
combined losses from this single client.
#HIEFûlNANCIALûOFlCERû*AMESûVONû-OLTKEû
said the bank had exited the positions
swiftly enough to return some of the
collateral to the client.
Like other banks, Deutsche saw a jump in
equity capital markets revenues, thanks to
for eight years. It would have been higher
but was dragged back by a €410m loss in the
capital release unit, where leverage
exposure increased by €9bn over the
quarter.
Negative interest rates continue to be a
drag on margins in Deutsche’s corporate
and private banks.
Christopher Spink

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

Henry Wells has joined market M&A advisory The INTERNATIONAL Paris, London and
FINNCAP GROUP, unit. Wells worked at CAPITAL MARKET Hong Kong, and
which provides advice financial consultancy ASSOCIATION is said the new office
on strategy and Duff & Phelps for opening an office will strengthen its
capital raising to UK seven years until in Brussels in May, presence in the EU.
growth companies, as November 2020, staffed by Julia It said more staff are
head of its consumer including as head of Rodkiewicz, who is expected to join the
unit, one of the core UK M&A. Before that joining the trade office. Rodkiewicz
sectors it covers. he was head of leisure group as a director previously worked at
Wells will also lead and retail at Close in its market practice ISDA for almost 12
the consumer M&A Brothers Corporate and regulatory years.
practice at FinnCap Finance, which policy team. ICMA
Cavendish, the mid- became DC Advisory. has offices in Zurich,

International Financing Review May 1 2021 17

Bellwether
Bellwether: n. From the practice of placing a bell around the On top of the US$774m hit the Swiss bank took in the
neck of a castrated ram so that it might lead its flock lRSTûQUARTERûRELATINGûTOûITSûEXPOSUREûTOû!RCHEGOSûTHEûBANKû
also said it made a US$87m loss in the second quarter – an
UK PRIME MINISTER Boris Johnson stands as the ultimate proof amount it described as “immaterial”. In accounting terms,
that there’s no accounting for taste – he literally won’t say maybe, but when it comes to furnishing a dodgy prime
where the money for the refurbishment of his Downing
3TREETûmATûCAMEûFROMû*OHNSONûISûSHRUGGINGûOFFûTHEûINCIDENTû
as tittle-tattle, but he may want to look at the fates of
banking chiefs with grand designs before assuming he’s
totally in the clear.
Former head of Barclays investment bank Tim Throsby
CAUSEDûAûSTIRûWHENûHEûKNOCKEDûTWOûOFlCESûINTOûONEûTOûGIVEû
himself more space. The makeover included the addition
OFûAûLIFE
MINISTERSûmATûTHATûISûANûAWFULûLOTûOFûCASHûFORûCURTAINS
*0û-/2'!.û)3 looking to put its European Super League
lNANCINGûFAUXûPASûBEHINDûITû4HEû53ûBANKûHASûBEENûPICKEDû
BYûPOSHûLAWûlRMû-ISHCONûDEû2EYAûTOûLEADûITSûINITIALûPUBLICû
offering in London.
)TûALSOûFOLLOWSû*0û-ORGANSûINVOLVEMENTûINûTHEûmOTATIONû
of Deliveroo, which left management with home-delivered
SIZEûSIXûFOOTû-INOTAURûWITHûWHATûVISITORSûTOûTHEû EGGûONûTHEIRûFACESû-ISHCONSûEXECUTIVEûCHAIRû+EVINû'OLDû
OFlCEûDESCRIBEDûASûhVERYûLIFE
LIKEûGENITALIAvûBRINGINGûAûNEWû SAYSûTHEûmOATûWILLûENABLEûITûTOûhENFRANCHISEvûITSûSTAFFûANDû
meaning to the phrase “risk-weighted assets”. Apparently,
Throsby used it as a conversation starter. What could he
possibly have opened with? “Never mind the bollocks”,
perhaps? Within a year, he was gone.
And back in 2008, Merrill Lynch CEO John Thain spent
53MûONûAûLAVISHûOFlCEûRENOVATIONûASûTHEûBROKERAGEû
teetered on the brink of sub-prime induced collapse. Within
months, Thain had been relieved of his duties after Bank
of America rescued Merrill, along with curtains worth
US$28,000, an US$87,000 “area rug” and – most famously –
a “commode on legs” (that wasn’t actually a toilet) valued at
US$35,000 – extravagances that make Johnson’s £840-a-roll
wallpaper look frugal.
WHEN IT COMES to expenses, there is of course a big difference
between banking and politics. Politicians are accountable
to the taxpaying electorate and bankers are accountable to
shareholders. That leads to differing thresholds over what
should and should not be disclosed, as UBS proved last week.
introduce a “John Lewis” model in a reference to the
partnership structure at the UK retailer.
JP Morgan will be hoping the deal goes well and doesn’t
follow the famous John Lewis slogan – and Deliveroo
performance – of being “never knowingly undersold.”
CREDIT SUISSE HAS already tried to get on the right side of
incoming chairman Antonio Horta-Osorio by arranging for
him to have membership of Zurich’s elite membership club.
According to the FT, the bank has arranged the
MEMBERSHIPûFOLLOWINGûAûSPECIlCûREQUESTûFROMû(ORTA
Osorio, who likes to ask for these sorts of things as a sort of
challenge to new employers.
When he became chief executive of Abbey National
in 2006, he asked the bank’s head of human resources
to get him a membership for the Queen’s tennis club
in Kensington. Despite the usual 10-year wait, Abbey’s
owner Santander pulled strings to please its tennis-mad
new man. „

Who’s moving where…

„ Sovereign, „ UBS has hired Rio litigation cases. UBS „ Former Barclays „ Tim Galt has become the helm, including
supranational and Tinto legal executive is contesting a €4.5bn securitisation banker the latest UBS stalwart executive chairman
agency DCM banker Barbara Levi as its penalty in France for Fiona Nelson has to join Australian Guy Fowler, previously
Robert Matthews new general counsel allegedly helping joined FUNDING start-up BARRENJOEY UBS’s Australia head
has joined BANK OF to replace Markus wealthy clients stash CIRCLE, a source CAPITAL PARTNERS, of investment banking.
AMERICA from BNP Diethelm, who will undeclared assets said. She will work having been head UBS’s former Asia-
Paribas. Matthews retire in November, offshore, with a on structuring and of Asia-Pacific DCM Pacific investment
started working at the Reuters reported. new ruling set for execution for the syndicate for the Swiss banking chief Matt
French bank in 2016 Diethelm will remain September. UBS lending platform. bank. The rapidly Hanning is a director,
in structured capital a senior adviser also promoted Mike Nelson worked in expanding boutique while Chris Williams
markets, business through 2022, Dargan to chief digital Barclays’ securitised launched in September and Duncan Haig,
management. with responsibility and information products solutions and has numerous other UBS alumni, are
for some legacy officer. team. ex-UBS veterans at founding partners.

18 International Financing Review May 1 2021


Peel Hunt teams up with Santander on UK ECM
PEEL HUNT has signed a deal with SANTANDER
that will allow the boutique investment
bank to piggyback on the Spanish lender’s
vast balance sheet for future UK equity
raises, in an innovative collaboration that it
hopes will help it compete with much larger
“UNDERWRITING ISSUE”
Belgian bank KBC bought Peel Hunt in
ûBUTûSOLDûOUTûTOûTHEûlRMSûMANAGEMENTû
and backers led by insurer Neil Utley nine
years later. The company had just £75m of
equity and total assets of £620m in March
People
& Markets
Mitchells & Butlers. Last year it ranked 19th
on three deals.
“Santander is number one in ECM in
pretty much every area they operate in –
other than the UK,” said Fine. “This was a
really good opportunity for them to get
rivals.
The two will team up on an ad-hoc basis –
both banks will still be free to work separately
on UK equity deals – with the agreement
extending across a range of share offerings,
from rights issues and placings to secondary
offerings and sell-downs of large stakes.
It comes just over two years after
Santander was linked with a potential
purchase of Peel Hunt. The UK equity space
ûITSûMOSTûRECENTûlLINGûSHOWEDûAûTINYû
fraction of the balance sheets of most of its
rivals.
Still, Peel Hunt has managed to maintain
a strong presence in UK ECM. It currently
ranks 11th, one spot below where it ended
last year, having been bookrunner on deals,
including a £464m block trade for retailer JP
Sports and a £315m rights issue for broker
TP ICAP.
access to our clients and for us to get access
to their balance sheet in a collaborative
fashion that both sides feel can work well.”
MORE COLLABORATION?
There may be potential for additional
products to be added to the agreement, such
as bonds or even loans – areas where Peel
(UNTûISûHOBBLEDûDUEûTOûTHEûSMALLûSIZEûOFûITSû
balance sheet. Santander is becoming more
has long been a weak spot for the Spanish
bank, which is ranked well outside the top
10 in the country despite its vast resources
and ECM prowess in other parts in the world
– particularly Latin America.
Peel Hunt has the opposite problem. As a
!CCORDINGûTOû&INEûTHEûlRMSûSMALLû
balance sheet has not been a constraining
factor yet – Peel Hunt can and always has
underwritten deals. The collaboration with
Santander is something done with an eye to
its growing client base, which might stretch
aggressive in the bond and loans space.
“We aim to establish Santander as one of
the leading corporate and investment banks
in Europe, and this collaboration is an
important step towards that goal,” said Jose
Linares, head of the Spanish lender’s
lRMûTHATûPRIDESûITSELFûONûITSûRESEARCHûITûHASû
steadily picked up clients as larger rivals
have cut back due to new unbundling rules
under MiFID II regulations. But its ability to
OFFERûlNANCINGûSOLUTIONSûTOûTHOSEûCLIENTSûISû
constricted by its small balance sheet.
“A consequence of MiFID has seen many
of the bigger banks juniorise and generalise
their distribution and research functions,
which has allowed us to win a far greater
number of larger corporate clients,” said
Steven Fine, chief executive at Peel Hunt.
“We’ve now got a far greater level of
incoming enquiries from companies that
want us to look after them,” he added. Peel
Hunt boasts 157 corporate clients –
including one from the FTSE 100 and 33
from the FTSE 250 – compared to around
120 just over three years ago when MiFID II
came in.
its balance sheet.
“Looking to the future, we have
concluded that we need to have a solution
for the issue of rights issues and big
placements,” said Fine, who helped lead the
2010 management buyout. “We want to
address the underwriting issue and take it
off the table.”
"OTHûlRMSûWILLûHAVEûAûVETOûINûANYûDEALSû
they choose to collaborate on, and fees will
BEûSPLITûTOûREmECTûTHEIRûRESPECTIVEûROLESû"OTHû
will also retain their standalone spots in the
league tables, although the hope is that the
collaboration will clearly give a boost to
both.
For Santander, the agreement opens the
door to Peel Hunt’s lucrative client base. The
Spanish bank has just one UK ECM deal
under its belt in the year so far: a £351m
open offer for restaurant and pub operator
investment bank. “The agreement with Peel
Hunt combines our respective strengths and
expertise to expand our client reach and
further enhance the services we offer.”
Still, there are questions around whether
underwriting capabilities is the limiting
factor it once was. Rights issues have
become less common in the UK market over
the last year, as companies have favoured
SPEEDûOVERûSIZEûTHROUGHûACCELERATEDû
bookbuilds, which don’t need to be
underwritten.
In 2018, 65% of UK equity issuance was
through rights issues – compared with 35%
from ABBs. A year later there were just two
rights issue that made up 10% of fundraising.
In 2020, and so far in 2021, rights issues
have made up one-third of primary equity
issuance by listed companies.
Gareth Gore

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

„ CREDIT AGRICOLE „ Gautam „ BANK OF AMERICA banking in 2015. Ng „ Alex Oh, who by her previous work
has picked Edouard Rao is joining has poached Winnie was head of Hong became the first as a lawyer, Reuters
O’Neill to become COMMONWEALTH Ng from JP Morgan Kong origination and woman of colour reported. It marked
its CEO for Hong BANK OF AUSTRALIA to become co-head of corporate finance as to lead the US a blow for new SEC
Kong and head of in mid-June as head real estate investment well as head of China SECURITIES chair Gary Gensler
structured finance for of private equity and banking in Asia- and Hong Kong real AND EXCHANGE and underscores the
Asia. O’Neill replaces leverage finance Pacific alongside estate at JP Morgan, COMMISSION’s challenges of filling
Francois Martin, who in Sydney. Rao is Martin Siah. Ng will where she worked for enforcement division, top agency roles with
is due to become currently the Australia also serve as head of 16 years, split between resigned last week Wall Street defence
senior country officer head of leveraged Hong Kong coverage. two stints. after just five days attorneys. Oh was
for Russia. O’Neill was capital markets at Siah was appointed in the job due to previously co-leader
previously based in Deutsche Bank in head of Asia real potential conflicts of Paul, Weiss’s anti-
Paris. Sydney. estate investment of interest created corruption team.

International Financing Review May 1 2021 19

“The American banks are clearly accruing compensation at
much higher rates … and we’re going to do the same thing”
BARCLAYS CEO JES STALEY, P15
Capital markets week ahead:
Three Gorges, Allied Universal, Honest Company
I’LL BE DAMMEDû#HINAû4HREEû'ORGESû
Corporation, the operator of the world’s
largest dam, announces pricing on Thursday
for the spin-off of its wind and solar
operation. The IPO, which is expected to
raise Rmb25bn (US$3.8bn), is the biggest in
China this year and will provide a much-
needed boost to the country’s A-share
market, which has seen a big decline in
companies going public.
)TûISûSPINNINGûOFFû#HINAû4HREEû'ORGESû
Renewables to raise funds to develop seven
offshore wind farm projects. Cleaning up
the country’s power generation network,
which is heavily reliant on coal, is a big
priority for Beijing, which has pledged to be
carbon-neutral by 2060. That is one reason
the deal has managed to get regulatory
approval earlier than other highly
anticipated IPOs.
QUARTERûEARNINGSûONû4HURSDAYûANDûTHEû
PRISON SECURITY Allied Universal hits the junk
bond market to raise the funds for its
Tuesday, a deal expected to raise north of
US$400m. About a quarter of proceeds will
go to plugging the company’s losses with
the rest going to selling shareholders,
although Alba isn’t selling. BlackRock has
already indicated it wants to buy US$80m of
the deal.
OFF THE GRID India’s state-owned electricity
NETWORKûOPERATORû0OWER'RIDûWILLûSPINûOFFû
almost 3,700km of power transmission lines in
the country’s largest IPO by an infrastructure
investment trust. The Rs77bn (US$1bn) deal is
set to price on Tuesday, with the attractive yield
and sovereign backing expected to draw
investors even as another wave of the Covid-19
pandemic grips the nation.
POWER CUT Spanish renewable power
producer Opdenergy prices its Madrid IPO on
Wednesday. It is hoping to raise €375m that
will fund new projects in its pipeline. It’s
likely to be closely watched after last week’s
taken on to fund its leveraged buyout by
EQT in 2018. The Swedish private equity
lRMûWILLûALSOûUSEûTHEûLISTINGûTOûSELLûDOWNû
some of its stake in the company.
PIPE DOWN Ukrainian steel pipe
manufacturer Interpipe is expected to launch
the sale of US$300m of bonds. It is returning
to international debt markets 18 months
after completing a debt restructuring that
took a mammoth six years to complete. All
creditors – including bondholders and bank
lenders – took a hit from that. Interpipe will
be hoping that’s all water under the bridge.
TIPICO!û'ERMANûSPORTSûBETTINGûGROUPû4IPICOû
hopes to wrap up a €1.5bn bank loan on
4HURSDAYûTHATûITûWILLûUSEûTOûRElNANCEûDEBTû)Tû
comes a couple of years after the company
raised a €585m term loan, which with around
€140m of cash on balance sheet, was used to
pay a third dividend to shareholder CVC. CVC
acquired a majority stake in Tipico in 2016.
GOOD REVIEWS?û3OCIETEû'ENERALEûREPORTSû
lRST
French lender is expected to launch a
strategic review of the investment bank. It’s
had problems with its coveted structured
products business in recent months, and
ALSOûINûEQUITYûANDûlXEDûINCOMEûTRADINGû
Those areas have already been overhauled
but more tweaks are expected.
SPRING COLLECTION Chinese clothes retailer
ACQUISITIONûOFû'3ûAûDEALûTHATûWILLûCREATEûTHEû DISAPPOINTINGû)0/ûOFûFELLOWûCLEANûENERGYûlRMû /NIONû'LOBALûHOPESûTOûRAISEûAROUNDû
world’s largest private security company. It is %COENERûWHICHûCUTûTHEûSIZEûOFûITSûLISTINGûANDû US$120m from its NYSE IPO on Monday. The
looking to sell US$3.6bn of bonds across the US priced at the bottom of the range. company markets and distributes more than
dollar, euro and sterling markets. The takeover 4,000 fashion brands and posted net income
ENDSûMONTHSûOFûDRAMAûINûTHEûBATTLEûTOûBUYû'3û of Rmb209.6m (US$32m) in 2020, up 103%
WITHû!LLIEDûSWOOPINGûINûANDûTAKINGûTHEûPRIZEû from Rmb103m a year earlier. Proceeds will
FROMû#ANADIANûRIVALû'ARDA7ORLD be used to develop brand partnerships and
for expansion.
WELL WELL WELL Tullow Oil is looking to sell
Aû53BNûlVE
YEARûBONDûTHATûWILLûHELPûEASEû
lNANCIALûPRESSUREûONûTHEûCOMPANYûASû LAST WEEK IN NUMBERS
maturing debts become due. The deal €100m – Two-year bond sold by the EIB,
demonstrates the turnaround in fortunes THEûlRSTûEVERûDIGITALûBONDûONûAûPUBLICû
for struggling junk-rated energy names, as blockchain
recovering oil prices and investor demand 9.25% – Coupon on bonds from Pegasus
FORûYIELDûGIVESûTHEMûAûCHANCEûTOûRElNANCEû
debt and avoid restructuring.
HONEST BROKER The Honest Company, the
online baby and beauty retailer founded by
actress Jessica Alba, prices its Nasdaq IPO on
20
BIG SUSEû'ERMANûSOFTWAREûDEVELOPERû353%û
prices its €1bn-plus Frankfurt IPO on Friday.
The company, which writes open-source
Linux software for business customers, is
raising money to reduce debts that were
International Financing Review May 1 2021
!IRLINESûTHEûlRSTû4URKISHûCORPORATEûDEALû
in months
£75m – Equity capital of Peel Hunt,
which has teamed up with Santander to
work on UK ECM deals

M&A boutiques pressure larger rivals
Merger and acquisition markets continued to
REVIVEûINûTHEûlRSTûQUARTERûANDûINDEPENDENTû
investment banks kept pace with their larger
rivals, led by EVERCORE, which pulled in more
from advisory fees than Morgan Stanley,
Bank of America and Citigroup.
“The pace of our new client activity remains
high as there is a real and necessary desire to
transact, driven in large part by the
acceleration of long-term strategic positioning
caused by technological disruption, Covid-19
as well as ready access to capital,” said Moelis
People
& Markets
busy, Evercore said it is also looking to expand
more aggressively into other markets.
“While healthcare still represents the
largest portion of revenues, TMT and
industrials more than tripled their combined
PORTIONûOFûREVENUESûINûTHEûlRSTûQUARTERû
!CROSSûTHEûlVEûLARGESTûINDEPENDENTûBANKSû chief executive Ken Moelis. compared with full year 2020,” Evercore co-
including LAZARD, advisory revenue rose 27% While rivals said the restructuring wave CEO John Weinberg told analysts on a call.
in the three months to the end of March that followed the pandemic was no longer “We’ve continued to broaden our
from a year ago, nearly matching a robust powering earnings, Moelis said it was still participation across sectors, which we believe
1ûATûTHEûlVEûLARGESTû53ûINVESTMENTûBANKSû
where advisory revenue rose 29%.
Evercore’s advisory fees surged 43% in the
lRSTûQUARTERûTOû53MûASûITûSHOWEDûLESSûOFû
a reliance on the boom in restructuring fees
to boost revenue than PJT PARTNERSûORû,AZARD
PJT’s revenue from advisory fell 3% in the
REAPINGûBENElTSû)TûSAIDûRESTRUCTURINGû
contributed close to 25% of revenues in the
quarter, even as distress levels measured by
DEFAULTSûANDûBANKRUPTCYûlLINGSûERODED
“There’s a lot of leverage in the system,”
Moelis said. He expects the bank’s
restructuring backlog will continue, driven
is helping us grow our business,” he said.
Evercore also continued to make strides in
its underwriting business, where revenue
rose 275% to US$79m in the quarter.
Advisory revenue rose 3% at GREENHILL,
reaching US$69m. The bank is expecting
stronger performance later in the year as a
lRSTûQUARTERûTOû53MûASûTHEûBOOMûINû by opportunities to help companies improve RECOVERYûINû%UROPEûHOPEFULLYûFUELSûDEALûmOW
restructuring fuelled by a global pandemic their capital structures. “M&A activity is stronger than it has been
came to a close. The bank reported total in recent years in each of our main markets.
revenues of US$207m in the quarter, up 3% “ROARING BACK” It is particularly strong in the US where it is
from a year ago.
,AZARDSû1ûADVISORYûREVENUEûROSEûûTOû
US$317m.
MOELIS reported revenue of US$264m, up
72% from a year ago and its second best
quarter ever on higher deal closings.
Bank trio fined for SSA bond cartel
The European Union’s antitrust authority
HASûlNEDûBANK OF AMERICA, CREDIT AGRICOLE and
CREDIT SUISSE a combined €28.5m for
operating a cartel in the secondary trading
of US dollar denominated bonds within the
European Economic Area.
DEUTSCHE BANK was also charged, but
ESCAPEDûAûlNEûFORûACTINGûASûAûWHISTLEBLOWERû
after it revealed, in August 2015, the
existence of the cartel to the European
Commission.
“Traders colluded on trading strategies,
exchanged sensitive pricing information
and coordinated on prices,” said executive
vice-president of the Commission Margrethe
Vestager, in charge of competition policy.
“The behaviour of the investment banks
restricted competition in a market in which
investment and pension funds regularly buy
and sell bonds on behalf of their investors
and pensioners. The cartel harmed the
lNANCIALûMARKETSûANDûTODAYSûDECISIONûSENDSû
a clear message that the Commission will
not tolerate any type of collusive behaviour.”
%VERCOREûHADûITSûBESTûlRSTûQUARTERûEVERûASû
overall revenue rose 54% to US$670m,
REmECTINGûANûACCELERATIONûOFûTHEûSTRATEGICû
merger market and increased activity in
several of its key markets. While activity in
key markets are clearly keeping the bank
AVOIDINGûAûlNEûOFûAROUNDûõMûnûTHEû
LARGESTûOFûTHEûFOURûlNESû
#REDITû3UISSEûSAIDûITûWOULDûCONTESTûTHEûlNEû
“Credit Suisse continues to believe that the
single former employee whom the EC
criticised did not engage in anti-competitive
conduct. Credit Suisse intends to appeal the
EC’s decision to the European courts, where
we will vigorously defend this matter,” it said.
The four banks operated the cartel
through a core group of US dollar SSA
traders who colluded and were in regular
contact with each other. They logged into
multilateral chatrooms or bilateral
chatrooms on Bloomberg terminals and
created a closed circle of trust, according to
a statement from the Commission.
“They provided each other with recurring
updates on their trading activities, exchanged
commercially sensitive information,
coordinated on prices shown to their
customers, or to the market in general, and
aligned their trading activities on the
secondary market for these bonds,” it said.
RUNNINGûATûAûRECORDûPACEvûSAIDû'REENHILLû
CEO Scott Bok.
“The US economy is now roaring back,”
Bok said. “I think as Europe comes out of the
pandemic, hopefully, they catch up.”
Philip Scipio
clients or the market in general, traders
agreed to refrain from bidding or offering,
or to remove a bid or offer from the market,
when they might come into competition
with one another.
They also agreed to split trades between
each other and combine or reduce their
RESPECTIVEûPOSITIONSûTOûMEETûAûSPECIlCû
customer’s demand, without the customer
being aware that it was dealing with more
than one trader, which meant that in
practice the customer had limited choice.
In 2019, the antitrust authority previously
charged eight unnamed banks with
operating a cartel in trading euro-
denominated government bonds between
2007 and 2012.
In January 2016, IFR exclusively reported
that four SSA traders were being
investigated by the US Department of Justice
for possible manipulation of SSA prices.
Sources at the time said the traders under
investigation were all based in London and
worked at BofA, Credit Agricole, Nomura
"ANKûOFû!MERICAûWASûlNEDûõMû and Credit Suisse, and one had previously
Credit Suisse €11.859m and Credit Agricole CHATROOMS worked at Deutsche Bank during the time
€3.993m. Deutsche Bank received full The investigation revealed that in addition under scrutiny.
immunity for revealing the cartel, thereby TOûCOORDINATIONûONûPRICEûQUOTESûFORûSPECIlCû David Cheetham

International Financing Review May 1 2021 21

“We want to address the underwriting
issue and take it off the table”
PEEL HUNT CEO STEVEN FINE, AFTER TEAMING UP WITH SANTANDER, P19

FEE TABLES APRIL 2021

Fees top US$50bn after 31% surge

GLOBAL INVESTMENT BANKING FEES )NVESTMENTûBANKINGûFEESûINûTHEûlRSTûFOURû US$743.4m. Its market share is down 72bp to
Managing No of Total Share months of the year from equity and bond û4HATûREmECTSûITSûFOCUSûONûDEBTûlNANCEû
bank or group issues US$(m) (%) underwriting as well as syndicated loans and and lower activity in equity and M&A.
1 JP Morgan 1,800 4,247.3 8.4 M&A have reached US$50.6bn, up 31% from At the top of the table JP MORGAN has
2 Goldman Sachs 1,265 4,029.3 8.0 the same stage of 2020, according to data retained its position as the biggest fee
3 Morgan Stanley 1,344 3,003.4 5.9 FROMû2ElNITIV generator, with US$4.25bn from 1,800 deals.
4 Citigroup 1,411 2,842.9 5.6 Equity capital markets fees have led the Its fees are 52% higher than a year ago,
5 BofA 1,644 2,790.2 5.5 surge and accounted for 35% of the total, outstripping the market.
6 Credit Suisse 894 1,965.5 3.9 HELPEDûBYûTHEûmURRYûOFûSPECIALûPURPOSEû GOLDMAN SACHS had been in the lead for the
7 Barclays 1,169 1,583.7 3.1 ACQUISITIONûCOMPANYûmOTATIONSû4HISûISûALSOû lRSTûTWOûMONTHSûOFûTHEûYEARû)TûISûTHEûONLYû
8 Deutsche Bank 1,031 1,301.9 2.6 starting to generate a surge in M&A as the other bank to have generated more than
9 Jefferies 474 1,128.7 2.2 COMPANIESûlNDûTARGETS 53BNûINûFEESûINûû/FûTHEûTOPûlVEû
10 UBS 524 941.8 1.9 'EOGRAPHICALLYûTHEû!MERICASûCONTINUESû BANKSûALLûFROMûTHEû53û'OLDMANûHASû
11 RBC CM 978 842.7 1.7 to dominate, making up 57% of all fees with increased its fees by the most, up 68% to
12 BNP Paribas 951 761.3 1.5 US$28.7bn. That is where most SPACs have US$4.03bn. Its market share has risen by
13 Wells Fargo & Co 994 743.4 1.5 listed. 174bp to 7.96%.
14 Mizuho Financial 1,241 719.1 1.4 Nine banks had generated at least US$1bn Equities specialist JEFFERIES’ good start has
15 HSBC 1,201 663.6 1.3 of fees each by April 29. At the same time continued. It has taken US$692m from
16 Bank of China 1,092 513.4 1.0 last year, only seven had done so. Each of the equity deals alone this year, more than it
17 Citic 1,523 494.4 1.0 top nine has a market share of above 2%. made from all deals at this time a year ago.
18 Nomura 616 459.0 0.9 The bank in eighth position a year ago, That has seen it rise to ninth from 15th in
19 Sumitomo Mitsui 899 457.7 0.9 WELLS FARGOûHASûLOSTûSIGNIlCANTûSHAREû the overall table after its fees went up 123%
20 MUFG 984 448.3 0.9 slipping to 13th. It is the only one of the top to US$1.13bn.
Total 21,724 50,613.1 15 banks to see its fees fall, by 12% to Christopher Spink

AMERICAS INVESTMENT BANKING ASIA-PACIFIC & JAPAN INVESTMENT BANKING EMEA INVESTMENT BANKING
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 1,193 3,095.5 10.8 1 Citic 1,519 492.7 4.3 1 JP Morgan 429 851.7 8.1
2 Goldman Sachs 828 3,024.2 10.5 2 Bank of China 1,051 489.5 4.3 2 Goldman Sachs 262 620.0 5.9
3 BofA 1,217 2,071.9 7.2 3 Morgan Stanley 415 464.3 4.1 3 Citigroup 317 564.0 5.4
4 Morgan Stanley 729 2,018.7 7.0 4 Mizuho Financial 757 413.1 3.6 4 Morgan Stanley 201 520.4 4.9
5 Citigroup 903 1,970.8 6.9 5 Goldman Sachs 176 385.1 3.4 5 BNP Paribas 446 469.2 4.5
6 Credit Suisse 588 1,473.6 5.1 6 Citigroup 192 308.0 2.7 6 Barclays 318 454.2 4.3
7 Barclays 734 1,083.4 3.8 7 JP Morgan 178 300.0 2.6 7 BofA 249 433.9 4.1
8 Jefferies 396 937.9 3.3 8 BofA 179 284.5 2.5 8 Deutsche Bank 271 363.8 3.5
9 Deutsche Bank 479 819.8 2.9 9 Nomura 353 281.8 2.5 9 Credit Suisse 208 315.2 3.0
10 RBC CM 842 732.0 2.5 10 CICC 654 280.7 2.5 10 HSBC 575 308.8 2.9
Total 7,685 28,722.7 Total 9,873 11,366.3 Total 4,313 10,524.1

GLOBAL BONDS GLOBAL EQUITIES GLOBAL LOANS

Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 938 1,258.6 8.5 1 Goldman Sachs 278 1,870.0 10.4 1 JP Morgan 482 865.9 11.8
2 BofA 810 842.9 5.7 2 Morgan Stanley 273 1,509.4 8.4 2 BofA 529 545.5 7.4
3 Citigroup 829 769.1 5.2 3 Citigroup 230 1,363.7 7.6 3 Credit Suisse 239 336.3 4.6
4 Goldman Sachs 603 740.9 5.0 4 JP Morgan 256 1,264.1 7.1 4 Goldman Sachs 255 315.7 4.3
5 Morgan Stanley 804 596.2 4.0 5 BofA 233 989.4 5.5 5 Citigroup 290 307.1 4.2
6 Barclays 697 524.6 3.5 6 Credit Suisse 161 804.5 4.5 6 Bank of China 229 298.3 4.1
7 Deutsche Bank 677 476.4 3.2 7 Jefferies 144 691.9 3.9 7 Barclays 285 277.6 3.8
8 Credit Suisse 451 473.9 3.2 8 Barclays 140 551.8 3.1 8 Mizuho Financial 428 265.4 3.6
9 BNP Paribas 575 405.9 2.7 9 Deutsche Bank 86 448.8 2.5 9 MUFG 606 260.7 3.5
10 Wells Fargo & Co 626 395.0 2.7 10 UBS 110 443.7 2.5 10 Morgan Stanley 173 229.4 3.1
Total 12,646 14,868.4 Total 2,993 17,909.1 Total 3,201 7,351.1

1/1/2021 to 29/4/2021
Source: Refinitiv

22 International Financing Review May 1 2021

 People
& Markets
HSBC, StanChart gain as bad loans slump
HSBC recorded a better-than-expected 79% rise US$61bn in risk-weighted assets from BANKSûTHATûHAVEûREPORTEDûTHEIRûlRST
QUARTERû
INûlRST
QUARTERûPROlTûASûTHEûIMPROVEDû underperforming European and US areas, results so far.
economic outlook allowed it to wind back up from US$52bn at the end of last year and
some of the cash set aside for expected credit its goal of US$100bn by the end of 2022. BRANCHES CULL
losses during the same quarter last year. 4HATûWILLûCONTINUEûINCLUDINGûINû'"- Rival STANDARD CHARTEREDûALSOûBENElTEDûFROMû
The Anglo-Asian lender released US$435m “We still see opportunities for growth in a slump in provisions for bad loans in the
OFûPROVISIONSûINûTHEûlRSTûQUARTERûPARTIALLYû our global banking and markets business in lRSTûQUARTERûWHICHûHELPEDûUNDERLYINGû
reversing a US$3.03bn charge taken a year Asia, and will be moving some of that PRETAXûPROlTSûRISEûûFROMûAûYEARûEARLIERûTOû
ago when the bank braced itself for %UROPEANûANDû53û27!ûINTOû!SIAûFORû'"-ûASû US$1.45bn. The bank also said it expects to
potential losses from the Covid-19 pandemic well,” he said. see a return to income growth during the
and lockdown. Another pillar of his plan is to grow second half of the year.
(3"#Sû1ûPRE
TAXûPROlTûJUMPEDûBYû HSBC’s wealth business in Asia. Quinn said StanChart also said it planned to halve its
ALMOSTûFOUR
lFTHSûTOû53BNûCOMFORTABLYû that is happening, and the bank will
outstripping the average analyst forecast of
US$3.35bn compiled by the bank. The bank
also set a positive signal for the rest of the
year and said credit losses for 2021 could be
below the medium-term range of 30bp–
40bp. That is a stark improvement from its
conservative provisioning last year, when it
set aside US$8.8bn, or three times the
US$2.8bn of provisions in 2019.
“We still see opportunities for
growth in our global banking
and markets business in Asia,
and will be moving some of that
European and US RWA into Asia
global branch network to about 400 sites, in
consider acquisitions to help achieve it.
“Yes, we are looking at opportunities at
the moment, at different stages of
evaluation,” Quinn told reporters on a
conference call. “We’re looking in markets
not only in Hong Kong but in China and in
the rest of Asia, including Singapore and
India. If we were to do acquisitions they
would be bolt-on, small portfolios of
businesses – either product or distribution
capability.”
He is also cutting costs, and said hybrid
WORKINGûPLANSûWILLûHELPûREDUCEûOFlCEûSPACEû
4HEûBANKûPLANSûTOûREDUCEûITSûGLOBALûOFlCEû
footprint by more than 20% by the end of
2021, he said.
'"-SûREVENUESûROSEûûFROMûAûYEARû
addition to its previous goal of reducing its
OFlCEûSPACEûBYûAROUNDûAûTHIRDûASûITûLOOKSûTOû
drive productivity growth and keep its
annual operating expenses below US$10bn.
StanChart said it planned to
halve its global branch network
to about 400 sites
Finance chief Andy Halford told reporters
the bank was looking at a potential acquisition
of some of the 13 consumer banking
businesses that Citigroup has put up for sale.
StanChart’s results were underpinned by
strong performances in wealth management
ANDûlNANCIALûMARKETS
for GBM as well”
CEO Noel Quinn said the optimism was
due to an improved economic outlook and
the rollout of Covid-19 vaccination
programmes, and he also struck an upbeat
earlier to US$4.29bn, on an adjusted basis,
helped by a 6% rise in revenues from markets
and securities services to US$2.49bn. Within
that, revenues from global debt jumped 52%
to US$396m and equities trading rose 55% to
US$419m, helping offset a 32% drop in
)NûlNANCIALûMARKETSûCREDITûMARKETSû
revenues soared by almost two-thirds to
US$441m after the bank booked a US$25m
loss in credit trading during the same
quarter last year, while macro trading
revenue, which includes foreign exchange,
tone for global banking and markets,
effectively its investment bank, after a
STRONGûlRSTûQUARTER
Quinn said his turnaround plan for HSBC
was on track, and the bank had stripped out
JPM’s Willcox joins Nomura for top US role
NOMURA HOLDINGS has hired former JP Morgan
executive Christopher Willcox as chief
EXECUTIVEûOFlCERûANDûPRESIDENTûOFû.OMURAû
3ECURITIESû)NTERNATIONALûANDû.OMURAû'LOBALû
Financial Products, tasked with building up
its Americas business.
Willcox was also named co-CEO of
Nomura Holding America.
Willcox retired from JP Morgan nearly two
years ago after serving as CEO of JP Morgan
Asset Management. There he was responsible
for managing around US$2trn in assets across
foreign exchange revenues to US$952m, after
a strong Q1 in 2020.
Revenues from capital markets and
advisory more than doubled to US$291m,
which was in line with the other global
all asset classes, including public and private
markets. He was previously the head of
GLOBALûlXEDûINCOMEûANDûLIQUIDITYûATû*0û
Morgan Asset Management and global head
of rates at JP Morgan’s Investment Bank.
Prior to joining JP Morgan, he served in
various roles at Citigroup over a 15-year
period.
The appointment came as Nomura
slumped to its biggest quarterly loss since
THEûGLOBALûlNANCIALûCRISISûASûITûWASûFORCEDûTOû
take a US$2.3bn charge related to failed US
International Financing Review May 1 2021
RATESûANDûCOMMODITIESûFELLûBYûALMOSTûAûlFTHû
to US$677m because of the decline in
market volatility compared with last year’s
lRSTûQUARTER
Thomas Blott
hedge fund Archegos Capital Management,
which could rise to a US$2.9bn loss.
It was a sudden blow to Nomura, which in
&EBRUARYûRECORDEDûITSûSTRONGESTûlRSTûNINEû
MONTHSûFORûAûlSCALûYEARûINûATûLEASTûûYEARSû
SINCEûITûSTARTEDûREPORTINGûUNDERû53û'!!0û
Although the Archegos charge is expected to
be a one-off, it is part of a familiar pattern
with the Japanese bank, which has often
SEENûITSûEARNINGSûmUCTUATEûWILDLYûASûAû
consequence of one-off charges.
Philip Scipio, Thomas Blott
23
“It takes years to build a reputation while
it can be seriously affected literally overnight”
NEW CREDIT SUISSE CHAIRMAN ANTONIO HORTA-OSORIO, P16

Blackstone bulks up ESG team

BLACKSTONEûHASûADDEDûlVEûSENIORûMEMBERSûTOû "LACKSTONESûCHIEFûSUSTAINABILITYûOFlCERû$ONû Also working with Duchon is Caroline
its global environmental, social and
governance team in its effort to achieve its
carbon emission and diversity goals it set
forth last year.
The private equity giant hired Elizabeth
LewisûASûMANAGINGûDIRECTORûOFûCORPORATEû%3'û
TOûOVERSEEûTHEûIMPLEMENTATIONûOFû%3'û
!NDERSONûWHOûISûINûCHARGEûOFûTHEûlRMSû
carbon emissions reduction programme.
Since 2013, Mandel led a team that focused
on cost effectively decarbonising buildings
at the Rocky Mountain Institute.
Another new member is Nina James who will
HEADû"LACKSTONESû%3'ûREALûESTATEûGROUPûINû!SIAû
Hill, who will be James’ counterpart in
Europe. Hill had been head of responsible
BUSINESSûATû,LOYDSû"ANKINGû'ROUPû
Blackstone also appointed Rita Mangalick
ASûGLOBALûHEADûOFû%3'ûFORû"LACKSTONEû
Alternative Asset Management and
Blackstone Credit, where she will partner
policies across Blackstone’s businesses. and work with the global head of real estate WITHûBOTHûGROUPSûTOûLEADû%3'ûDILIGENCEû
Before joining Blackstone, she led %3'û%RICû$UCHONûINûGROWINGûTHEûlRMSûREGIONALû policy development, reporting and
ENGAGEMENTûONûKEYû%3'ûTOPICSûFORûTHEû capabilities for its asset management team. engagement. Mangalick previously helped
International Finance Corporation. James had previously been the general manager DEVELOPû"!!-Sû%3'ûPROGRAMMEûALONGû
It also added James Mandel as its managing of responsible investment and corporate with a focus on BAAM’s advisory business.
director of sustainability to support SUSTAINABILITYûFORû)NVESTAû0ROPERTYû'ROUPû Richard Leong

Kelag ties sustainability-linked private

placement to ESG ratings
Austrian utility KELAG has chosen to link Changes in methodologies are also an h4HEûlRSTûFEWû%3'ûRATINGSûPOINTSûAREû
COUPONûPAYMENTSûTOû%3'ûRATINGSûONûAûLONG
issue for borrowers such as Kelag, which relatively easy to catch, each point in addition
dated €120m sustainability-linked bond WASûlRSTûRATEDûBYû%CO6ADISûATûûINûûANDû to that is harder work,” Slamanig said.
private placement, as investors question the achieved a silver rating of 65 in 2020 – one If Kelag fails to hit either rating target, it
ambition of the structure and its vulnerability notch away from gold status at 66. will make a one-off payment of 50bp in the
TOûCHANGINGûMETHODOLOGIESûANDû%3'ûRATINGSû
agencies face calls for tighter regulation.
The 20-year private placement for Single
!ûRATEDû+ELAGûHASûAûCOUPONûLINKEDûTOû%3'û
ratings provided by French agency EcoVadis,
as the renewable energy utility has set a
COMPANY
WIDEûTARGETûTOûREmECTûITSûSTRATEGYûASû European Securities and Markets Authority.
a sustainable energy producer, rather than
SPECIlCû+0)S
“Our strategy is not to improve on a single
Kelag would have achieved gold status
already if EcoVadis had not changed its
methodology, the company said.
French and Dutch regulators have proposed
AûGREATERûREGULATORYûFRAMEWORKûFORû%3'ûDATAû
and services, as well as supervision by the
The bond issue offers only upside to
h%3'ûRATINGSûAGENCIESûAREûFACINGû
increasing calls for regulation and
consistency in their methodology,” said
single interest period following the test,
before reverting to the coupon of 1.15% for
the remaining 20-year life of the bond.
Kelag is not planning to make any further
commitments for the last decade of the
facility from 2031 to 2041.
investors, unlike Kelag’s €250m
sustainability-linked loan from January
2020, which was also linked to EcoVadis’
KPI because we want to develop the group as &ARNAMû"IDGOLIûHEADûOFû%3'ûSOLUTIONSûFORû rating and featured a 5bp margin increase or
AûWHOLEû4HEûDElNITIONûISûTOOûBROADûTOûCOMEû EMEA at HSBC. decrease depending on progress, and a
up with one or two KPIs – we are focused on similar 2.5bp adjustment on fees.
the bigger picture,” said Eva Slamanig, head AMBITIOUS TARGETS? Demand for sustainability-linked private
OFûACCOUNTINGûlNANCEûANDûTAXESûATû+ELAG
Kelag provides electricity, natural gas and
heating services, and its electricity
generation comes from renewable energy,
primarily hydropower. The majority public-
owned company is working to improve its
LINKEDû
%3'ûRATINGûASûITûEXPANDSûPRODUCTIONû
Kelag’s deal has an annual interest rate of
1.15% with bullet repayment in 20 years. The
COUPONûISûLINKEDûTOûITSû%3'ûRATINGûANDûWILLûBEû
TESTEDûTWICEûnûATûlVEûANDûûYEARSûTOûENSUREû
PROGRESSûnûANDûISûONEûOFûTHEûlRSTûPRIVATEûBONDû
placements to feature dual testing.
“As it’s a 20-year facility, we felt that it
placements is growing from a small base.
Kelag opted to raise a sub-benchmark private
PLACEMENTûDUEûTOûTHEûRELATIVELYûSMALLûSIZEûOFû
the deal, which was targeted at institutional
investors including insurance companies.
!ûFURTHERûISSUEûFORû%3'ûRATINGS
deals, particularly for long-dated
capacity. WOULDûNOTûBEûENOUGHûFROMûANû%3'ûPERSPECTIVEû TRANSACTIONSûISûTHATû%3'ûRATINGSûDOûNOTû
Sustainability-linked loans with margins TOûTESTûTHEû%3'ûRATINGûONCEûAFTERûlVEûYEARSûORû NECESSARILYûCORRESPONDûTOûORûREmECTû
TIEDûTOû%3'ûRATINGSûHAVEûBECOMEûLESSûCOMMONû EVENûONCEûAFTERûûYEARSûBECAUSEûTHENûTHEû%3'û companies’ progress on the goals of the
as the market has developed because the feature would not be watertight,” said Malte Paris Agreement on climate change to
ambition of the targets is harder for investors +OLBûASSOCIATEûDIRECTORûINûSUSTAINABLEûlNANCEû ACHIEVEûNET
ZEROûEMISSIONSûBYû
to assess due to a lack of transparency around
methodologies and scores.
h4HEûOPAQUENESSûAROUNDû%3'ûRATINGSû
makes it a bit harder to see how ambitious
those targets are. I’m not sure investors have
advisory at UniCredit.
Kelag has committed to increase its rating
BYûTHREEûPOINTSûTOûûBYûûANDûBYûlVEû
points to 70 by 2031. While ratings increases
OFûTHREEûANDûlVEûPOINTSûDOûNOTûSOUNDû
%3'ûRATINGSûAREûAûBROADûMEASUREûWHICHû
primarily focus on the “E” component,
which means that companies could score
well on governance and social criteria and
still miss Paris targets on greenhouse gas
THEûABILITYûTOûREMODELû%3'ûSCORESvûAûLOANû particularly ambitious, the company said reduction.
banker said. they become progressively harder to achieve. Tessa Walsh

24 International Financing Review May 1 2021


UBS investment bank hit by Archegos
UBS joined the ranks of banks revealing
losses from prime broking client Archegos
Capital Management, which wiped out
UBS said it would review its prime
brokerage relationships to ensure such a
concentration of leveraged positions would
People
& Markets
well for us as a business before. This is a
unique event. We never had a situation
before where a prime broking client has
ALMOSTûHALFûOFûITSûINVESTMENTûBANKINGûPROlTSû not reoccur. It has not gone as far, however, BUILTûUPûSIGNIlCANTûPOSITIONSûACROSSûTHEû
in what would otherwise have been the as rival Credit Suisse, which has initiated a industry, with complete lack of disclosure.
unit’s best quarter in a decade. plan to reduce positions by a third after We will learn and make appropriate
UBS took a US$774m hit from Archegos in booking a SFr4.4bn (US$4.8bn) charge on its CHANGESvû'ARDNERûSAID
THEûlRSTûQUARTERûWHICHûCONTRIBUTEDûTOûAûû
drop in investment banking operating income
to US$2.27bn compared with a year earlier. The
biggest impact was on global markets where
operating income fell 27% to US$1.48bn. It
EXPOSUREûTOû!RCHEGOSûINûTHEûlRSTûQUARTERû
and will book another SFr600m in the
second quarter. (See separate P&M story on
Archegos losses)
Chief executive Ralph Hamers, who
Hamers said in January he would present
his strategic plan for the business in the
second quarter. He has started by appointing
group head of technology Mike Dargan to the
group executive board as chief digital and
would have risen 11% but for the Archegos loss.
'LOBALûBANKINGûINCOMEûROSEûûTOû
US$788m driven mainly by a surge in equity
capital markets fees, though the rise was
lower than the increase in the global fee
POOLû4HEûlRMûALSOûPRODUCEDûAûûINCREASEû
in advisory revenues, particularly for
Europe, the Middle East and Africa.
0RE
TAXûPROlTSûACROSSûTHEûINVESTMENTûBANKû concentrated positions that the client had
fell 42% to US$412m.
Scope moves into ESG bond opinions
'ERMANû%3'ûRATINGSûlRMûSCOPE RATINGS is
launching a second-party opinion service for
GREENûBONDSûANDûOTHERûLABELLEDû%3'ûBONDSûASû
the expanding sustainable debt market
offers opportunity to compete with larger
JOINEDûFROMû).'ûATûTHEûENDûOFûLASTûYEARûSAIDû
he wanted to review positions in the global
FAMILYûOFlCEûBUSINESSûASûWELLûASûRISKû
management processes overall, in addition
to prime brokerage relationships
SPECIlCALLY
#HIEFûlNANCIALûOFlCERû+IRTû'ARDNERûSAIDû
the problem stemmed from the
other investment banks.
built up. “Prime brokerage has performed
investors to report on the adverse impacts of
their investments.
“The rapid worldwide growth of labelled
%3'ûDEBTûISSUANCEûACROSSûALLûBORROWERû
universes is driving parallel demand for
INFORMATIONûOFlCERûREPLACINGûTHEûCHIEFû
OPERATINGûOFlCERûROLE
Hamers said the bank will continue to
prioritise investing in technology in an
effort to generate US$1bn of annual cost
savings. A full strategic plan will be set out
at the end of the year but UBS will focus on
sorting out the prime broking area like
Christopher Spink
“Investors are preparing the ground for the
Taxonomy. A second-party opinion that checks
alignment with the Taxonomy will help issuers
to sell green bonds,” Menville said.
The agency’s new second-party opinion
players such as Sustainalytics. INDEPENDENTûOPINIONSûCERTIlCATIONû service covers all use-of-proceeds and
The ratings agency is carving out a niche ASSURANCEûANDûVERIlCATIONûASûINSTITUTIONALû sustainability-linked instruments, and is
for itself as it is able to provide an impact investors and issuers focus on meeting ever- aligned with industry guidelines and
score that puts a monetary value on PRESSINGû%3'ûDEMANDSûFROMûCLIENTSvûSAIDû principles published by the International
COMPANIESû%3'ûISSUESûBASEDûONûAûQUANTATIVEû $IANEû-ENVILLEûHEADûOFû%3'ûATû3COPE Capital Market Association.
macroeconomic model, although it does not 3COPEûISûALSOûANûAPPROVEDûVERIlERûUNDERû Scope has created a scoring model with
PROVIDEû%3'ûRATINGS the Climate Bonds Initiative’s Climate Bonds lVEûLEVELSûFORûSECOND
PARTYûOPINIONSûANDûISû
4HEû%3'û)MPACTû2EVIEWûCANûPROVIDEû3COPEû
attracting companies that want to establish
3 measurement for greenhouse gas
emissions, child labour and corruption in
global supply chains across 300 sectors in 45
countries. Supply chains are increasingly in
focus as they often hide companies’ worst
%3'ûPROBLEMS
Demand for more detailed information is
growing as the EU’s new Sustainable
Finance Disclosure Regulation requires
Please contact us if you have information about
job moves at your firm or within the market
Call +44 7990 565 436
or email steve.slater@refinitiv.com
3TANDARDûANDû#ERTIlCATIONû3CHEMEûAûSCIENCE
based multi-sector labelling system for green
bonds and other green debt products that
ensures deals are consistent with the goals of
the Paris Agreement on climate change.
4HEûlRMûCANûALSOûASSESSûISSUERSû
alignment with the EU Taxonomy,
SPECIlCALLYûTHEûhDOûNOûSIGNIlCANTûHARMvû
requirement, as well as the UN’s Sustainable
$EVELOPMENTû'OALSûANDûTHEû0ARISûACCORD
International Financing Review May 1 2021
their green credentials beyond the
minimum expectation of the market.
Scope works with issuers to prepare external
reviews before issuance based on frameworks
or bond documentation and provides post-
issuance impact and monitoring reports on the
use of proceeds, and is working with private
EQUITYûlRMSûPORTFOLIOûCOMPANIES
Tessa Walsh
25
IFR’s
ESG Financing Briefing
IFR’s ESG Financing Briefing is a subscription
service offering daily news, data and analysis
on green and ESG financing from across the
Refinitiv Capital Markets Insight Team.

To subscribe or learn more, e-mail

ifr.clientsupport@refinitiv.com

„ FRONT STORY COVERED BONDS
Nationwide makes ‘bold statement’
First UK 20-year wins strong demand
Lack of supply fuels appetite 
NATIONWIDE BUILDING SOCIETY proved
emphatically that the 20-year part of the
covered bond curve is open even to issuers
that do not have ECB support, as it pulled in
more than €2.3bn of orders for a pioneering
€500m deal last Tuesday, supported by an
attractive yield, a pick-up to core European
paper and a scarcity of UK supply.
Covered bond issuance has fallen sharply
over the last year, but the lack of UK supply
has been particularly stark, with
Nationwide’s new issue only the third
benchmark from the country since February
2020. After the spread of the coronavirus
pandemic rocked global markets and
shuttered economies, central banks offered
lenders cheap loans – such as the Bank of
England’s Term Funding Scheme with
additional incentives for SMEs (TFSME) –
slashing their funding needs.
The last euro benchmark from the UK
came in October 2020, when Yorkshire
Building Society sold a €500m seven-year.
Nationwide issued the only other deal, a
£1bn Sonia-linked 10-year, on February 16.
h4HEûMEANINGFULûTECHNICALûBENElTûTHATû
exists in UK covereds is stronger than you get
elsewhere, given the complete lack of supply,”
said a banker at one of Nationwide’s leads.
But Tuesday’s deal was especially rare,
BEINGûTHEûlRSTû
YEARûCOVEREDûBONDûFROMû
the UK. Nationwide was the last UK issuer to
venture into the long end, selling a €1bn 15-
year in June 2017.
Krishan Hirani, head of secured funding
at Nationwide, said that while the building
society maintains a strong liquidity position
and has access to the TFSME scheme, long-
dated funding at current levels is prudent to
provide further long-term stability to the
COSTûANDûMATURITYûPROlLEûOFûITSûLIABILITIESû
Furthermore, the all-in-cost of funding
between 15 years and 20 years is currently
SSAR 29 Corporates 34 FIG 39 Covered Bonds 42 High-Yield 44 Structured Finance 47
In recent years, only eurozone issuers
BENElTINGûFROMûTHEûSUPPORTûOFû%#"ûCOVEREDû
bond purchases have attempted to sell
covereds with tenors of 20 years or longer.
“The idea is there’s a drop-off in bank
treasury demand once you go longer than 10
years . . . This shows it doesn’t matter, you
can go longer, it’s just a question of spread,”
said a banker away from the leads.
The €500m no-grow deal was marketed with
initial guidance of mid-swaps plus 15bp area, via
ABN AMRO, BNP Paribas, NatWest Markets and UBS.
Demand for the transaction – which was
announced on Monday – built rapidly, with
the book surpassing €1.25bn after just over
40 minutes. The spread was subsequently
set at 10bp, with the book closing in excess
of €2.3bn (excluding JLMs).
“We are delighted with the outcome,” said
Hirani. “The decision to issue in the 20-year
tenor was vindicated with the largest 20-
year order book since 2019, which allowed
us to price inside the theoretical fair value.”
The lack of long-dated comparables meant
that fair value for the deal was relatively
subjective, bankers said, but most said it was
PRICEDûmATûTOûIFûNOTûINSIDEûFAIRûVALUEû
“The book size and the level are all very
strong endorsements of not only euro
investors appetite for UK credit and
between UK and core European covered
COVERED BOND YIELDS ON THE RISE
AVERAGE YIELD OF IBOXX EUR COVERED INDEX YTD
0 was offering a 15-year. The German lender’s
–0.05
–0.10
–0.15
–0.20
BONDS
mortgage exposure, but also to get a 20-year
done without the anchor of ECB support is
quite a bold statement from them,” said a
second banker away from the leads.
"ANKERSûSAIDûTHEûDEMANDûREmECTEDûTHEû
scarcity of UK supply as well as the pick-up
UK covered bonds offer versus core
European comparables.
“I would say a lot of investors in this deal
wouldn’t touch eurozone names because of
how tight they trade because of that ECB
support,” said the lead banker. “What we
lost in ECB support we gained in other
investors looking for a pick-up.”
“It’s an opportunity for investors to get long-
dated duration exposure to UK risk, and at the
moment you can’t get that anywhere else.”
Fund managers were allocated 45% of the
deal, banks and private banks 28%, insurance
companies and pension funds 23% and central
BANKSûANDûOFlCIALûINSTITUTIONSûû!CCOUNTSûINû
Germany and Austria took 70%, the UK and
Ireland 11%, France 10%, the Nordics 4%,
Switzerland 2% and other countries 2%.
Bankers also credited the work done by
Nationwide over many years to engage with
the euro investor base.
HEAD-TO-HEAD
The extent of the spread differential
bonds was demonstrated by Muenchener
Hypothekenbank, which at the same time
deal landed at mid-swaps minus 3bp (see
separate article).
“There would have been times when
you’d have been nervous seeing two longer-
dated euro covereds going head-to-head,
particularly a UK versus a German, but the
rarity value of Nationwide feels like it has
come through,” said the second banker
away from the leads.
mATûFORû.ATIONWIDEûHEûNOTEDû h4HEYREûBENElTINGûNOTûONLYûFROMûTHEû
–0.25
“We were conscious that this was an higher spread but also the longer duration,
untested part of the market for UK issuers, which means a higher coupon.”
–0.30
but the market technicals, coupled with the Nationwide’s deal was ultimately priced
extensive investor work we have with a coupon of 0.5% to yield 0.572%.
–0.35
undertaken with European accounts over MunHyp’s deal provided a coupon of 0.25%
4/4/21
4/2/21
4/1/21

4/3/21

RECENTûYEARSûGAVEûUSûTHEûCONlDENCEûTHATû and a yield of 0.325%.

this tenor would work,” said Hirani. Source: Refinitiv Eikon Tom Revell

International Financing Review May 1 2021 27


Investors question high-yield
SLB structures
Concern expressed around possible slipping standards
Europe’s junk bond borrowers have jumped
on the sustainability-linked bandwagon,
with new deals coming to the market each
week. But some investors say that the
structure lacks ambition – allowing
companies to carry on business as usual.
French electrics company REXEL (Ba2/BB) is
the latest high-yield borrower to show the
power of the sustainability label. Investor
orders for the company’s €300m seven-year
non-call three sustainability-linked bonds were
over €2bn on Tuesday afternoon, with more
than 200 accounts participating. Demand
allowed leads to cut initial price thoughts from
MID
ûTOûlNALûPRICINGûOFûû
Elsewhere in the market, LONZA SPECIALTY
INGREDIENTS ISûMARKETINGûTHEûlRSTûEVERû
leveraged buyout sustainability-linked bond
issue to back its buyout by private equity
groups Bain Capital and Cinven.
The use of sustainability criteria in
leveraged deal structures has increased
dramatically since the start of the year. High-
yield investors say the introduction of
sustainability-themed securities is a natural
evolution of a corner of the market that has
gained substantial secular strength – and
offers them value and credit risk.
However, the uptick in SLB supply has
raised eyebrows among some buysiders.
Bankers told IFR in April that they are
worried standards are slipping as more
borrowers and banks pile into the rapidly
expanding market.
“I’m just ignoring that language now,”
said one London-based high-yield investor.
“Every deal seems to be coming with it.”
/THERûINVESTORSûSAYûTHATûGREENûlNANCEû
misses the point completely, and that
environmental problems should be resolved
at the state rather than corporate level.
One of the main concerns within the
sustainability-linked bond market is that it
relies on self-labelling by companies keen to
showcase their ESG credentials. Investors
point out that SLB issuers are both setting
their own targets and the penalty they have
to pay if they do not reach them.
“These companies should be providing a
whole range of ESG-related metrics and
enabling investors to choose for themselves
whether or not the company is making
progress on its sustainability targets,” said the
investor. “These sustainability-linked bonds
are like grading your own homework.”
Bankers active in the space point out that
KPIs and targets are reviewed by second-
party opinion providers and that a
28
WEEK IN NUMBERS
19%
„ THE PERCENTAGE OF CREDIT
INVESTORS SURVEYED BY BANK OF
AMERICA THAT THINK A BUBBLE IS THE
company’s decision to issue SLBs is often MOST TROUBLING RISK, BIGGER THAN
encouraged by investors themselves. ANY OTHER
“Every time we go to market, investors are %
20
pretty vocal about the direction they want to 18
see the company going in,” said Trisha 16
Taneja, head of ESG advisory for capital 14
12
markets at Deutsche Bank. “Most companies 10
consider investor feedback in developing 8
6
their sustainability strategies. The reality is
4
that companies are developing sustainable 2
strategies partly because they want to retain 0
Credit bubbles Debt sustainability Rising yields
access to the capital markets.” Source: Bank of America
Still, the risk that companies face in
missing these targets is reputational alone –
there is no legal recourse, said bankers.
Companies are not under any contractual
obligations to meet the targets and it is not
an event of default if they fail to meet them.
€100m
„ THE SIZE OF A TWO-YEAR BOND SOLD
A more important question, bankers say, is BY THE EIB, WHICH WAS THE FIRST EVER
whether companies are getting their data audited, DIGITAL BOND ON A PUBLIC BLOCKCHAIN
especially if they are tying coupons to those data.
MINORITY REPORT
Bankers currently marketing sustainability-
linked bonds say such concerns represent
US$47.2bn
„ THE AMOUNT OF DOLLAR ISSUANCE BY
very much a minority of views among FIVE OF THE BIG SIX US MONEY CENTRE
investors. They say that companies issuing BANKS SINCE APRIL 15 AS THEY SEEK TO
SLBs have already committed to more STRENGTHEN THEIR CAPITAL BUFFERS
sustainable business practices and that US$bn
16
issuing bonds in this format allows
14
borrowers to hold themselves accountable to
12
SPECIlCûTARGETSû
10
“The feedback we’ve had is frankly 8
appreciative that investors are seeing 6
companies taking the step of issuing 4
sustainability-linked and green bonds,” said 2
a banker familiar with Rexel’s deal. 0
Bank of JP Morgan Morgan Goldman Citigroup
Rexel has two sustainability performance America Stanley Sachs
targets: a 23% reduction in its Scope 3 Source: IFR
greenhouse gases from the use of its products
by 2023, from a 2016 baseline; and a 23.7%
reduction in Scope 1 and 2 greenhouse gases
by 2023, from the same baseline.
If the company does not hit both targets,
US$120bn
„ THE AMOUNT OF TREASURY-BACKED
the cost of debt will increase by 25bp. That is DEBT THE FED HAS BEEN BUYING EACH
a more ambitious step-up than recent MONTH SINCE JUNE AND WILL CONTINUE
credits, which have offered investors 12.5bp TO BUY AFTER LAST WEEK’S FOMC,
for missing one target and 25bp for both, THOUGH INVESTORS ARE LOOKING FOR
noted bankers familiar with the deal. TAPERING CLUES
Both of Rexel’s KPIs and 2023 targets have
been reviewed by Vigeo Eiris and assigned as
“advanced” – the highest rating category,
noted a spokesperson for the company. In
addition, all of Rexel’s data will be audited and
€1.461bn
„ THE AMOUNT OF CORPORATE BONDS
validated each year by PwC. The achievement THE ECB BOUGHT (NET) IN THE WEEK TO
OFûITSûûTARGETûWILLûALSOûBEûCONlRMEDûBYûAû APRIL 23 AS PART OF ITS CSPP COMPARED
limited assurance report from PwC, he said. WITH €1.402bn THE WEEK EARLIER
Eleanor Duncan In total, it has bought €98.167bn
International Financing Review May 1 2021

SSAR
US DOLLARS
ITALY NARROWS THE GAP ON
DOLLAR RETURN
ITALY successfully ventured back into the US
dollar market last Tuesday, bringing a
US$3.5bn dual-tranche deal that amassed a
combined order book of more than US$11bn
despite offering less of a pick-up over its
domestic curve than the sovereign’s last
outing in the currency.
The transaction marks the third
consecutive year the sovereign has brought a
BONDS SSAR
The previous dollar bond was one of the The spread for the 0.375% May 2024 Reg S
last big trades of 2020, coming in mid- transaction was set at mid-swaps less 2bp,
November. Final order books closed in unchanged from guidance via Deutsche Bank,
excess of US$9.25bn. NatWest Markets and RBC. There was zero new-
#ENTRALûBANKSûANDûOFlCIALûINSTITUTIONSû issue concession on offer, according to a lead.
received the largest allocation of the three- “It’s a US$500m print, so to get subscribed
year tranche, with a 42.7% share. Insurance at that price is a good result,” said the lead.
and pension funds received the most of the “It does exactly what it says on the tin.”
30-year bond at 35.1%. The German winding-up institution has
In terms of geographical split, 65.9% of seen its funding needs decrease, with its last
investors came from the Middle East or outing in the markets over a year ago through
Africa on the shorter tenor, with the longer a US$2bn 0.625% 2022 note that attracted a
benchmark quite evenly split between lNALûORDERûBOOKûOFû53BNûINû!PRILûû
Europe (28.7%), Asia (24.8%), the UK (23.7%)
and the US (22%). ALL INTERNATIONAL GREEN BONDS
The Italian treasury sold €5.477bn of the BOOKRUNNERS: 1/1/2021 TO DATE
new 0.75% BTP Futura to retail investors on Managing No of Total Share
April 23. That was slightly less than the bank or group issues US$(m) (%)
amount sold in its last two outings in the 1 JP Morgan 55 9,817.84 8.3
NEWûDOLLARûBENCHMARKûCOMINGûJUSTûOVERûlVEû format, a €6.1bn 1.15% July 2030 BTP Futura 2 BNP Paribas 40 8,795.04 7.4
months since its last outing in the currency. and a €5.7bn 0.35% November 2028. 3 Citigroup 43 7,713.01 6.5
Since prime minister Mario Draghi The recent upward revision of €75bn to 4 Credit Agricole 33 7,564.60 6.4
formed a new government in early THEûDElCITûFORûTHISûYEARûMEANSûTHEREûWILLûBEû 5 Bank of America 39 5,656.42 4.8
February, Italy has brought a string of large an increase of around €40bn in the 6 HSBC 39 5,624.65 4.7
syndicated deals in euros, including two borrower’s issuance of medium/long-term 7 NatWest Markets 14 5,562.23 4.7
other dual-tranche transactions, a record- bonds, according to a UniCredit note. 8 Deutsche Bank 40 5,409.26 4.6
breaking inaugural green bond and a BTP 9 Danske Bank 17 4,200.37 3.5
Futura that targeted retail investors. WINDING DOWN 10 Barclays 26 3,634.07 3.1
The sovereign (Baa3/BBB/BBB–/BBBH) FMS WERTMANAGEMENT’s US$500m no-grow Total 186 118,587.53
announced the dollar mandate shortly after managed to attract enough interest to be Excludes social bonds and mixed use of proceeds.
the government reached a deal with the FULLYûSOLDûEVENûWITHûTIGHTûPRICINGûWITHûlNALû Source: Refinitiv SDC code: JG1
European Commission to sign off its €222bn books ending over US$525m.
recovery package, which Draghi is now
ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS
presenting to lawmakers.
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
The spread for the US$2bn May 2024 note
Managing No of Total Share Managing No of Total Share
was set at mid-swaps plus 50bp, 10bp inside
bank or group issues US$(m) (%) bank or group issues €(m) (%)
IPTs. Final books closed over US$4.8bn. The
1 JP Morgan 645 160,576.12 8.5 1 BNP Paribas 186 47,843.46 8.0
US$1.5bn May 2051 paper came at 195bp,
2 Citigroup 496 127,199.13 6.8 2 JP Morgan 153 41,617.08 7.0
tightening by 5bp from IPTs. Demand
3 Bank of America 502 118,266.55 6.3 3 SG 105 33,962.27 5.7
lNISHEDûABOVEû53BN
4 Goldman Sachs 378 102,508.91 5.5 4 Barclays 119 33,240.52 5.6
Both notes were led by Citigroup, Deutsche
5 Barclays 411 101,611.74 5.4 5 Deutsche Bank 127 33,165.31 5.6
Bank, and Morgan Stanley.
6 BNP Paribas 384 93,793.56 5.0 6 UniCredit 127 31,721.88 5.3
IFR calculations put the spread on both
7 Morgan Stanley 306 89,220.81 4.7 7 Citigroup 112 30,318.82 5.1
tranches around 10bp back from where Italy
8 Deutsche Bank 362 88,723.64 4.7 8 Goldman Sachs 106 28,029.60 4.7
could have raised funds in its domestic
9 HSBC 384 79,896.33 4.3 9 HSBC 119 27,382.45 4.6
market, not accounting for a new-issue
10 Credit Suisse 313 53,313.71 2.8 10 Credit Agricole 116 26,349.41 4.4
premium, a smaller concession at landing
Total 2,263 1,879,644.44 Total 658 596,304.64
than the 15bp–20bp seen for the issuer’s last
Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt,
outing, a US$3bn 1.25% February 2026 US Global ABS/MBS. US Global ABS/MBS.
Global note. Source: Refinitiv SDC code: J1 Source: Refinitiv SDC code: N1

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING APRIL 30 2021

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Apr 27 2021 Italy €3.75bn 0.00 Nov 29 2022 -0.3 1.37
Apr 27 2021 Italy (€i) €1bn 0.65 May 15 2026 -0.92 1.57
Apr 27 2021 Italy (€i) €750m 0.15 May 15 2051 0.39 1.35
Apr 27 2021 Germany €3.2354bn 0.00 Nov 15 2028 -0.41 1.4
Apr 28 2021 Netherlands €2.35bn 0.5 Jul 15 2026 -0.503 —
Apr 28 2021 UK (i) £900m 0.125 Aug 10 2031 -2.537 2.82
Apr 28 2021 Germany €2.1315bn 0.00 May 15 2036 0.06 1.27
Apr 29 2021 Italy €2.75bn 0.00 Apr 1 2026 0.17 1.43
Apr 29 2021 Italy €2bn 0.9 Apr 1 2031 0.83 1.49
Apr 29 2021 Italy €2.5bn 0.6 Aug 1 2031 0.88 1.44
Apr 29 2021 Italy (CCTeu) €1.25bn 0.00 Apr 15 2026 -0.06 1.92
Source: IFR

International Financing Review May 1 2021 29


AIIB formalises ESG credentials
with SDB framework
„ SSAR Supranational puts sustainability at its core
ASIAN INFRASTRUCTURE INVESTMENT BANK
has launched a sustainable development
bond framework that seeks to formalise the
supranational’s approach to ESG and make it
easier for investors to find information about its
will definitely have more issuance throughout
the year and we are working on several new
avenues,” said Nardelli.
“We don’t think we will maintain such a steep
growth rate, but we would like to stabilise around
“They have got a far smaller programme
now because they have done such a good job
on what they’re supposed to do on the
wind-up,” said a second banker.
PSP BROADENS CANADIAN PENSION
FUNDS’ PRESENCE
PSP CAPITAL is hitting the road with the aim of
adding to the ranks of the Canadian pension
funds active in the US dollar bond market.
“They are a regular issuer in Canadian
dollars, but that market is by its very nature
a bit of a closed group of regular issuers – it
credentials.
The launch corresponds with the biggest
funding year yet for the borrower as it ramps up
its activities.
“It is very clear that sustainability is at the core
of the bank. We thought it would make sense
to put together a communication that basically
summarises all the credentials of AIIB as an ESG
and sustainable issuer across the board,” said
AIIB treasurer Domenico Nardelli.
“We were looking to take a step back, detach
from individual bonds and securities and give
investors the opportunity to look at AIIB in its
entirety as an issuer and provider of sustainable
bonds. This comes naturally from the foundation
of the bank and how it was established in the
first place with sustainability at its core.”
The issuer’s previous benchmark deals in US
dollars and sterling have all carried a sustainable
label, but it has now decided to put in place an
overarching framework under which all future
issuance will fall.
“We haven’t touched anything in terms of
the legal format or documentation associated
with our bonds,” said Nardelli. “What we are
doing is putting together in the same place
all the information that we think is relevant to
investors, to analysts, to ratings agencies and to
all stakeholders as an initial contact point to help
them understand the ESG credentials of AIIB as
an issuer.”
The borrower brought its inaugural
that kind of area – in the teens [of US dollar
billions] for the foreseeable future.”
The issuer’s last US dollar deal was its first
linked to SOFR, and it is looking at expanding
into new markets, including Sonia, Canadian
dollars and Australian dollars.
And it made its first move in that direction
on Wednesday, raising the maximum A$500m
(US$388m) it had targeted for its debut five-year Reg
S Kangaroo sustainable development bond offering
via Deutsche Bank, JP Morgan, Nomura and Westpac
The 1% May 6 2026s priced at 99.988 for a
yield of 1.0025%, within the 21bp–23bp guidance
range at asset swaps plus 22bp, equivalent to
30.85bp over the April 2026 ACGB.
“The AIIB’s A$500m transaction highlights
the strength of the Australian dollar franchise
both locally and regionally, along with increasing
demand for high quality ESG issuance,” said
Craig Johnston, head of DCM syndicate, Australia
and New Zealand, at Deutsche Bank.
“The transaction is the culmination of months
of work from the AIIB team and the fantastic
result is a testament to their effort as well as the
very professional marketing exercise.”
CORPORATE STRATEGY
The new framework is intended to outline how
the borrower adheres to the principles set out
in its environmental and social framework that
guides project selection.
“This shows in detail how we will apply and
ISûALWAYSûNICEûTOûHAVEûSOMEûDIVERSIlCATIONvû
said one of the leads.
PSP is one of Canada’s largest pension
investment managers and is 100% owned by
the Canadian government.
It oversees a portfolio that encompasses
almost C$170bn (US$138bn) in net assets
and is tasked with meeting pension plan
obligations for the federation’s public
service, armed forces, royal mounted police
and reserve force.
The Triple A rated issuer forecasts that its
assets under management will double to
over US$300bn by 2030 and expects its debt
issuance volumes will increase in lockstep
with that growth.
With its funding needs rising, the agency is
making strides towards diversifying beyond
its domestic currency and has picked
Citigroup, HSBC, RBC and TDûTOûARRANGEûITSûlRSTû
benchmark trade in US dollars.
4HEûTENORûHASûYETûTOûBEûlXEDûFORûTHEû2EGû
S/144A bond offering. However, most issues
launched under PSP’s C$2.5bn–$3.5bn
annual funding programme tend to carry
maturities within a three to 10-year range.
PSP says its bonds offer investors exposure
to the Canadian federal government as well
as a spread pick-up to Triple A rated
Canadian agencies.
“The Canadian pension sector is a
relatively new part of the SSA market that
benchmark transaction in US dollars in 2019,
raising US$2.5bn with a 2.25% May 2024
note, and has been back in the market on four
occasions, including twice this year, as well as
making its sterling debut in October 2020.
“The bank is growing, our funding plan is
growing and getting more diversified and we are
starting to touch more formats and jurisdictions.
implement our financing programmes going
forward and what our thematic priorities are,”
said Nardelli.
“All the projects where we will lend the money
raised are screened and assessed according
to our strict policies in the environmental and
social space. There are standards that we want
to observe and uphold. Our environmental and
DEVELOPEDûOVERûTHEûPASTûlVEûYEARSûORûSOvû
said the lead. “We have some established
issuers there and we welcome the
opportunity to have another one.”
Canadian pension managers were busy in
US dollars through the course of 2020, with
their issuance volumes for that year
standing at US$12.75bn versus US$8bn in
So we want to provide the assurance to our
investors that all of our bonds, the old bonds as
well as new bonds in the future, will be under
this framework,” said Nardelli.
A total of US$8.7bn was raised last year and
for 2021 the issuer has a funding target to raise
up to US$10bn.
“We are quite advanced already, having
issued US$4bn of bonds through a variety
of benchmarks and private placements. We
30
social framework really guides the way and
affects all these standards.”
There are three financing targets in the
corporate strategy: reaching or surpassing by
2025 a 50% share of climate finance, reaching
by 2030 a 25%–30% share for cross-border
connectivity projects and reaching by 2030 a
50% share of private sector financing in its actual
financing approvals.
John Weavers
International Financing Review May 1 2021
ûACCORDINGûTOû2ElNITIVûDATA
Among the regular US dollar issuers,
bankers deem CPPIB as the closest
comparable for PSP in terms of structure,
support and rating.
This year in US dollars, CPPIB has placed
US$1bn of 0.5% September 2024 and US$1bn
of 1.25% January 2031 bonds. Those notes
are respectively quoted at 1bp through mid-
swaps and 25bp over, according to
Tradeweb.

PSP is meeting investors from Europe,
Asia and the Americas. The roadshow is set
to conclude on June 11.
EUROS
ESM REPEATS SURGICAL STRIKE TO
CONCLUDE Q2 FUNDING
The EUROPEAN STABILITY MECHANISM completed
ITSûSECOND
QUARTERûFUNDINGûATûTHEûlRSTûTIMEû EFSF still has €3bn to raise, having brought a
of asking last Monday, bringing a €2bn long
10-year benchmark that was smoothly and
swiftly executed and saw ample demand.
The transaction and interest on display
were remarkably reminiscent of the issuer’s
past two outings, both €2bn no-grow deals.
“It was very much similar to their recent
transactions, whether it was for ESM or
EFSF,” said a banker. “It seems to have gone
pretty well; the pricing was very attractive
for ESM.”
The spread for the 0.01% October 2031
note issue was set at mid-swaps less 10bp,
with hedge fund orders and the likes that you
don’t really need at that stage,” he said.
“They are not really helping you with the
right price, they are just in the book to show
that they are early, but if they don’t like the
price on the next day they just leave again.
So it’s just a useless exercise. As a well-
established issuer not really targeting a huge
amount – I think this approach has worked
pretty well for them so far.”
With ESM’s funding completed for Q2, the
investors that wouldn’t necessarily be
€4bn 0% July 2026 note issue on April 13.
QUEBEC SETS SIZE RECORD IN EUROS
The PROVINCE OF QUEBEC brought its largest
trade ever in euros on Wednesday, raising
€2.5bn with a 10-year benchmark that was
comfortably oversubscribed despite not
being eligible for European Central Bank’s
bond buying programmes.
“It’s a fantastic result and they’re very
happy with it. It’s the issuer’s largest ever euro
transaction,” said a lead manager. “In terms of
BONDS SSAR
Allocations by geographical type showed
France (23%), the UK (22%) and Germany/
Austria (17%) received the largest share.
Asset managers (39%) received the largest
allocation by investor type, with banks/bank
TREASURIESû ûANDûCENTRALûBANKOFlCIALû
institutions (21%) next in line.
“The diversity they were able to achieve
by coming to euros was also extremely
important for them and extremely strong
because they were able to tap into many
buying in Canadian or US dollars. So there
were very euro-centric buyers as well, with a
good split in terms of both geography and
investor type,” said the lead.
The issuer’s last outing in the single
currency, a €2.25bn 0% October 2030 note
last October, tied the previous record for its
largest euro transaction.
ANDORRA GETS BLOWOUT DEMAND FOR
SUSTAINABLE DEBUT
ANDORRA hit the spot for investors on
tightening 2bp from guidance, via DZ Bank, their funding programme as well it is a hefty 7EDNESDAYûOFFERINGûDIVERSIlCATIONûANDûANû
Goldman Sachs and Nomura. There was chunk of it, so it’s a very successful outcome.” ESG label via an inaugural €500m May 2031
minimal new issue concession on offer, The spread for the 0.25% May 2031 note was Reg S sustainable bond that was more than
although views ranged depending on the set at mid-swaps plus 16bp, 2bp inside four times subscribed.
comparable bonds chosen, according to a guidance via BNP Paribas, Deutsche Bank, HSBC, JP
ALL INTERNATIONAL US$ BONDS
second banker. Morgan and Natixis. According to the banker,
BOOKRUNNERS: 1/1/2021 TO DATE
“There was a bit of discussion with there was 2bp of new-issue concession on offer.
Managing No of Total Share
investors around fair value. If you just use the “The order book size was extremely large,
bank or group issues US$(m) (%)
ESM curve and interpolate, that means you multiple times oversubscribed at the end,” said
have to include an old bond, a 2032 maturity the lead. “As a non-ECB-eligible name it doesn’t 1 JP Morgan 446 105,263.35 10.3
with a 1.125% coupon which isn’t trading in necessarily attract some of the leveraged and 2 Citigroup 370 87,220.44 8.6
line with more up-to-date bonds,” he said. faster money accounts which tend to balloon 3 Bank of America 384 81,885.86 8.0
“There is a 2031 EFSF bond that is trading the order book sizes sometimes. What you see 4 Goldman Sachs 269 65,142.14 6.4
around minus 11.5bp and you also have KfW here is really a very strong level of high-quality 5 Morgan Stanley 221 63,173.44 6.2
and EIB trading at minus 13bp in the orders coming in, and an oversubscription level 6 Barclays 243 51,452.17 5.1
context of that maturity. If you play a little based on those orders clearly means more from 7 Deutsche Bank 212 42,172.70 4.1
bit of relative value in there, you would that perspective.” 8 Credit Suisse 238 41,953.18 4.1

maybe think that ESM would trade a little Order books closed in excess of €6.6bn, 9 Wells Fargo 209 37,560.01 3.7

bit tighter. In the end, we thought this was RISINGûFROMûõBNûONûTHEûlRSTûUPDATEûANDû 10 HSBC 199 34,998.23 3.4

carrying 0.5bp new issue premium.” €5bn when the spread was set. Final Total 1,153 1,018,743.40
Including Euro, foreign and global issues. Excluding equity-related debt,
The issuer’s 1.125% May 2032 note issue demand represented the largest order book US Global ABS/MBS.
was priced in 2016 and was bid around for the issuer in the single currency. Source: Refinitiv SDC code: O1
minus 9bp, according to Tradeweb.
The European Financial Stability Facility ALL US DOLLAR FIXED-RATE GLOBALS ALL SOVEREIGN BONDS IN EUROS
brought a €3bn 0% January 2031 at the start BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
of the year that was bid around minus Managing No of Total Share Managing No of Total Share
11.5bp, according to Tradeweb. bank or group issues US$(m) (%) bank or group issues €(m) (%)
Order books for ESM’s latest deal were in 1 Citigroup 79 33,328.44 10.7 1 JP Morgan 21 17,425.57 11.2
EXCESSûOFûõBNûBYûTHEûlNALûUPDATEûnû 2 JP Morgan 93 32,680.45 10.5 2 BNP Paribas 21 13,115.06 8.4
strikingly similar books to those for the past 3 Bank of America 85 28,438.79 9.2 3 Citigroup 15 11,751.73 7.6
two transactions, of €12.2bn and €12.8bn. 4 Morgan Stanley 63 26,879.50 8.7 4 SG 10 11,024.48 7.1
The approach to execution was the same 5 Barclays 46 18,893.29 6.1 5 UniCredit 12 10,726.61 6.9
as for the past two deals, coming intraday 6 Deutsche Bank 30 18,495.51 6.0 6 Deutsche Bank 13 9,829.80 6.3
on a Monday, and this could go some way to 7 Goldman Sachs 45 18,260.04 5.9 7 Barclays 12 9,719.69 6.2
explaining the surprisingly low levels of 8 TD Securities 30 13,248.59 4.3 8 Nomura 12 9,668.75 6.2
variance seen in order books across the 9 Wells Fargo 55 12,118.79 3.9 9 HSBC 9 8,011.01 5.1
three deals, according to the second banker. 10 RBC 36 10,915.95 3.5 10 Morgan Stanley 10 7,788.33 5.0
“One reason why I currently favour this way Total 173 310,401.97 Total 48 155,574.82
is that if you announce the day before, the only Excluding equity-related debt, ABS/MBS. Excluding ABS/MBS.
thing that happens is you are getting swamped Source: Refinitiv SDC code: O5 Source: Refinitiv SDC code: N4

International Financing Review May 1 2021 31

 “It’s a great success, being able to achieve increase Andorra’s presence on the 2023 and the National Energy Strategy for
OURûlRSTû;ISSUE=ûOFûBONDSûINûTHEûINTERNATIONALû international scene,” he said. the Fight Against Climate Change
market, and one that is aligned with green, h4HEûDIVERSIlEDûINVESTORûBASEûWEû announced in December.
social and sustainable policies the Andorran attracted with this transaction . . . shows the
government has been developing over the interest for Andorra is not limited to GREEN DEALS FROM FRENCH DUO
past years,” said Marc Ballesta, Andorra’s neighbouring countries. We received orders IN DEMAND
Secretary of State of International Financial from nearly 150 accounts from 20 different
Affairs. countries, with widespread demand from BPIFRANCE and SOCIETE DU GRAND PARIS brought
The principality is increasing its focus on Europe but also from the US and other sought-after green euro deals on Thursday,
FOREIGNûDEBTûISSUANCEûANDû%3'ûlNANCINGû
WITHûTHEûAIMûOFûMAKINGûITSûDEBTûPROlLEûMOREû
resilient in the aftermath of the pandemic.
S&P estimates Andorra’s GDP will have
contracted by 12.9% in real terms in 2020
due to the crisis but expects it will rebound
by 5% in 2021 and grow 2.3% in 2022.
The 10-year paper was launched off
Andorra’s newly established sustainable
framework. Credit Agricole and Santander put
out initial price thoughts at mid-swaps plus
125bp–130bp for a €500m no-grow deal.
“They have no direct comps but fair value
was seen in the low 100s,” said a banker
away from the trade.
The leads set the spread at 115bp on
orders in excess of €2.3bn.
“There’s a market for it; it priced quite
well, considering where recent Spanish
bonds are,” said the banker away from the
trade. “This is not that far away.” The banker
added that the trade will not be eligible for
ECB purchases.
jurisdictions.”
In addition to the ESG label and the
scarcity of the credit, another factor drawing
investors was said to have been the
principality’s credit trajectory. Andorran
AUTHORITIESûAREûCONlDENTûTHEûRATINGSûOFû"""û
from S&P and BBB+ from Fitch will be
upgraded in the coming years.
With the transaction completed, Andorra
has now met all of its funding needs for
2021.
“However, taking into account the
current market situation and the good
reception of this bond, we are analysing the
feasibility of tapping the market once more
this year. We may thus be able to pre-fund
THEûRElNANCINGûNEEDSûWEûWILLûHAVEûINû
following years for some of our debt
operations,” said Ballesta.
Proceeds from the bond have been
EARMARKEDûFORûTHEûlNANCINGûORûRElNANCINGû
of different branches of Andorra’s central
government, agencies and public entities.
with the former making an impressive
debut in the format with a €1.25bn seven-
year benchmark that attracted enough
interest to be subscribed almost four times.
“For us, it’s the beginning of a new story,”
said Antoine Baron, green structurer at
Bpifrance. “We have a goal to help French
SMEs make the transition to a low-carbon
economy and the debut issuance of a green
bond is an illustration of this.”
The spread for the May 2028 green note
issue was set at 18bp over the 0.75% OAT of
the same maturity, 3bp inside guidance, via
BNP Paribas, Credit Agricole (structuring
adviser), HSBC, JP Morgan and Societe Generale.
“By this issuance we wanted to create the
lRSTûPOINTûOFûAûGREENûCURVEûANDûWEûWILLûDOû
more green issuance in the future, which
may, under Bpifrance Climatic Plan Horizon,
represent up to 30% of our total issuances.
It’s not set yet, but that’s a guideline,” said
Baron.
Demand grew throughout the trade, with
For one of the leads, Andorra priced a h7EûAREûFOCUSINGûONûENERGYûEFlCIENCYû lNALûORDERûBOOKSûCLOSINGûINûEXCESSûOFûõBNû
little bit tighter than envisaged. starting with the improvement of buildings including €450m lead interest.
“We’re delighted with the response and across Andorra – we are leading by example After launching its new framework the
the result,” he said. “There’s more demand and have projects aimed at boosting the week before last the issuer held a series of
than we could satisfy, so I’m assuming it’s EFlCIENCYûOFûALLûOURûADMINISTRATIVEû investor calls, with the green angle attracting
going to see good performance in the buildings,” said Andorra’s minister of increased demand, according to Baron.
secondary market too.”
Ballesta said the high level of subscription
WASûAûREmECTIONûOFûTHEûCONlDENCEûINVESTORSû
have in the principality.
“The pricing we achieved will result in
!NDORRAûKEEPINGûITSûlNANCINGûCOSTûATûAûVERYû
competitive level and to increase
substantially the maturity of our debt. It’s
the result of the work we have done to
lNANCEû%RICû*OVER
Under its sustainable framework, Andorra
can issue green, social and sustainability
BONDSû)TûHASûIDENTIlEDûMOREûTHANûõMûOFû
eligible expenditures, 87% of which are
social and 13% of which are green.
The maiden bond and the new framework
are aligned with the principality’s
Sustainability Action Plan Horizon 2020–
“We had a lot of investor calls. It was very
interesting because most of the investors
were very happy to see us coming back to the
market and we had a lot of positive
comments on our green framework,” he said.
“Some historical investors we already
knew put in bigger orders because of the
green aspect. We also saw new investors
that were attracted by the green bond label.

ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%)

1 BNP Paribas 13 7,080.64 12.0 1 Deutsche Bank 8 5,978.89 7.7 1 HSBC 16 2,498.32 13.3
2 Natixis 10 4,894.30 8.3 2 Goldman Sachs 7 5,975.88 7.7 2 JP Morgan 10 1,913.68 10.2
3 Deutsche Bank 10 4,320.22 7.3 3 Bank of America 8 5,911.46 7.6 3 UniCredit 10 1,304.72 6.9
4 Barclays 13 4,287.59 7.3 4 SG 7 5,465.31 7.0 4 Deutsche Bank 8 1,293.85 6.9
5 JP Morgan 13 3,790.14 6.4 5 DZ Bank 5 5,373.89 6.9 5 Nord/LB 8 1,129.44 6.0
6 Bank of America 6 3,393.64 5.7 6 UniCredit 6 5,359.66 6.9 6 LBBW 8 1,128.08 6.0
7 Goldman Sachs 9 3,040.80 5.1 7 Barclays 6 5,185.43 6.7 7 DGZ-DekaBank 5 781.28 4.2
8 Credit Agricole 10 3,035.58 5.1 8 BNP Paribas 5 5,021.46 6.5 8 Credit Agricole 5 735.12 3.9
9 Citigroup 9 2,881.13 4.9 9 LBBW 4 4,820.12 6.2 9 Natixis 5 708.71 3.8
10 HSBC 9 2,877.56 4.9 10 Commerzbank 4 4,504.68 5.8 10 Barclays 3 563.23 3.0
Total 94 59,078.95 Total 29 77,784.62 Total 41 18,824.62

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

32 International Financing Review May 1 2021


One of our goals was to diversify our
investor base.”
The proceeds will be used for new or
YEARûPARTûTOûTALKûABOUTûFAIRû
existing medium and long-terms loans,
AIMEDûATûlNANCINGûSOLARûANDûWINDûPROJECTSû
“It’s something we wanted because it’s
very simple and straightforward for the
framework and moreover the assets are
rated dark green by the second-party
opinion methodology at Cicero,” said Baron.
“We think it’s attractive for our investors
to have access to dark green assets.
Moreover, we designed the framework to
comply with Draft EU Green Bond Standards
and, on a best effort basis, the proposed EU
Taxonomy.”
Baron said the issuer already has projects
totalling €5bn on its balance sheet and plans to
and our needs to secure long-term funding
for our assets,” said Etienne Oberthur, SGP’s
head of funding and treasury.
For the banker, the fact that SGP is a pure
green player helped with the momentum.
“We had the opportunity to do even more
but the size was capped,” he said.
h7EûWEREûONEûOFûTHEûlRSTûISSUERSûTOû
commit to executing 100% green debt
issuance when we began tapping the capital
markets in 2018. After a two-year presence
in the markets, we have built an extensive
investor base, with over 400 investors
buying our notes over that period,” Gaillard
said. “We would not have access to such a
DIVERSIlEDûINVESTORûBASEûINûSUCHûAûSHORTûTIMEû
if we had not been 100% green.”
For Oberthur, the new notes have set the
BONDS SSAR
“It’s not far off fair value. There are
different ways you can do fair value, and it’s
DIFlCULTûINûTHEû
value as well,” said the banker. “If you just
look at the 30-year Gilt, the outstanding 50s,
the whole of today it has traded within
yesterday’s trading range.”
Demand grew throughout the trade, with
order books rising from £45bn (including
aBNûOFûLEADûINTEREST ûATûTHEûlRSTûUPDATEû
to more than £69bn (£7.95bn of lead
interest) by the time they closed.
“It doesn’t really matter if the book is
£40bn or £70bn, really. What matters is
what amount of it is good real money, and
this deal did well on that,” said the banker.
4HEû$-/ûSAWûITSûlNANCINGûREMITûFORû
2021–22 revised lower by £43.3bn the week
lNANCEûõBNûOFûPROJECTSûBYûTHEûENDûOFû right tone for SGP’s 2021 issuance. “We have BEFOREûLASTûWITHûITSûNETûlNANCINGû
a funding programme of up to €10bn for requirement now forecast to be £254.4bn. In
NO CANNIBALISATION this year and will remain present in the light of this, one previously planned index-
There were no signs of the two trades
cannibalising demand, with a coordinated
approach and differing tenors ensuring no
notable overlap, according to a DCM banker.
“Bpi was on screens last week; we were
expecting it this week,” said the DCM
banker. “The maturities and investor bases
market,” he said.
There was a contrasting result for CITY OF
BREMEN’s €500m no-grow deal, which failed
TOûDRUMûUPûSIGNIlCANTûINTERESTûANDûCAMEû
with no update on order book size.
The spread for the 0.50% May 2041 notes
was set at mid-swaps plus 3bp, unchanged
LINKEDû'ILTûHASûBEENûCANCELLEDûWITHûlVEû
transactions comprising three conventional
bonds and two linkers now expected for the
year.
“That’s something for the future. There’s
a lot of things tied into that, it’s not a simple
C – B = A,” said the banker. “It’s not for this
were completely different. What is good is
that the market is strong enough to absorb
the two trades, and when you are not
playing in the same tenors it’s not a
problem.”
3OCIETEûDUû'RANDû0ARISûMADEûITSûlRSTû
outing of 2021, raising €2bn with a 0.875%
May 2046 green note issue.
“This is . . . a new reference point on our
100% green curve and we are pleased with
from guidance, via BayernLB, Goldman Sachs,
Natixis, NordLB and UniCredit.
STERLING
UK DMO KICKS OFF NEW FUNDING YEAR
WITH TEXTBOOK TRADE
The UK DMO BROUGHTûITSûlRSTûSYNDICATIONûOFû
QUARTERûSOûTHEûBUYBACKSûOFûTHEû;CENTRAL=û
bank will go alongside it as well. It didn’t
actually impact the market as much as you
think it would. It’s constructive, certainly
not negative, that’s for sure.”
The DMO was last in the syndicated
market at the end of March with its second
sukuk offering.
DEXIA CL MAKES SONIA DEBUT
the response it received. We picked a 25-year
YEARû
maturity, which was most relevant for us in
terms of pricing and duration. The new
BONDûlTSûPERFECTLYûBETWEENûOURûOUTSTANDINGû
RATEûNOTEûMARKETû
15-year and 30-year benchmark bonds; there
was therefore very little price discovery,”
said SGP’s CFO Vincent Gaillard.
The spread was set at 20bp over
interpolated OATs, also tightening 3bp from
guidance, via Credit Agricole, Deutsche Bank,
Goldman Sachs, HSBC, Natixis, and Nomura.
Pricing offered zero new issue concession,
according to the banker.
“What makes it even more impressive is
where SGP is coming from, around 30bp
over OATs, and it’s clearly a good trend,” he
said.
The borrower’s €1.5bn tap of its 1.7% May
2050 green paper almost exactly a year ago
was priced at 35bp over OATs.
Some 120 accounts took part in the
TRANSACTIONûANDûlNALûBOOKSûCLOSEDûINûEXCESSû
of €4.7bn (excluding lead interest), rising
FROMûMOREûTHANûõBNûATûTHEûlRSTûUPDATEû
“The transaction struck a good balance – in
the context of rising rates we have seen since
January – between what investors wanted
THEûlSCALûYEARûLASTû4UESDAYûAûaBNû
benchmark, with the deal ending up being
more than 11 times covered.
The execution of the trade was swift,
precise and clean, as is customary for
syndications from the DMO.
“The ability to talk to accounts
beforehand, the transparent nature and so
on, just makes Gilt syndications a whole
different ball game to almost anything else,”
said a DCM banker.
“There are meaningful differences
between the way the UK handles its debt
management and any other debt-raising
entity. Who else is transparent and open as
they are?”
The mandate for the trade was sent out on
April 16, with the 1.25% coupon announced
four days later.
“It allows you to go out with a pricing
range of 0.25bp, which is ridiculous. Most
people move in ones,” said the banker.
Books for the July 2051 note opened at
1.5bp–1.75bp over the 0.625% October 2050s
via Barclays, Goldman Sachs, Lloyds Bank,
NatWest Markets and RBC. It was then
launched at the tight end.
International Financing Review May 1 2021
DEXIA CREDIT LOCAL brought an inaugural Sonia-
linked transaction last Wednesday,
VENTURINGûINTOûAûmOATING
that has been starved of SSA supply, with
only one other deal in the format so far this
year.
“We are out today with the lesser-spotted
SSA Sonia,” said a lead on the Dexia deal.
“We’ve been pushing people to look at
Sonia. There are a couple of investors in
particular that really want to buy in Sonia
ANDûTHEYûWEREûQUITEûSPECIlCûONûTHATû9OUû
would argue it’s driven by investor demand
as much as anything else.”
The European Investment Bank set a new
size record for deals linked to the Sonia-
index with the only other public Sonia deal
in 2021, raising £1.5bn in January with a six-
year note that priced at a plus 18bp discount
margin.
The spread for Dexia’s £500m no-grow
March 2026 note was set at 26bp over Sonia,
unchanged from initial price thoughts via
Barclays, HSBC and Natwest Markets. Order
books were in excess of £450m by the last
update.
33
 The Dexia deal is not linked to the Sonia
index. That lack of use of the index is a
barrier to more widespread issuance,
according to the lead.
“There’s an issue with using the index –
Dexia is doing it the old-school lag way, but a
lot of issuers want to incorporate the new
Sonia index as a way of doing it, and that
takes a bit of time to get the systems set up
internally and it is a bit of a manual
process,” he said.
LOW-RATE CONCERN
COUPONû
Another issue is the low level of interest
rates, which complicates matters by
creating the possibility of negative rates.
Dexia’s coupon is 100bp, the same level
deployed by EIB in January.
h4HEûmOORSûONûTHEûSWAPûAREûALSOûPLAYINGûAû
part. A lot of our issuers need to have the
bond and the swap matching, and a bond
HASûANûIMPLIEDûZERO
COUPONûmOORûWHEREASûAû companies and pension funds the
swap doesn’t,” said the lead.
“So, for a lot of ALMs, there’s a mismatch.
They either have to price with a very high
coupon to get around it, which some do, but
a lot of the ALMs have a matching swap with
ANZ, BNZ and CBA were joint lead
managers for the NZ$1bn (US$720m)
1.625% seven-year sustainable
development note, which priced at
99.625077 to yield 1.682%, 26bp wide of
mid-swaps and 44.2bp over the May 2028
NZGB.
Last November, the World Bank printed
a NZ$1.3bn dual-tranche Kauri bond
offering which included a NZ$1bn
standard 5.5-year note.
In the non-sovereign New Zealand dollar
market, only the Local Government
Funding Agency has issued a larger bond, a
NZ$1.1bn domestic six-year bond in April
2020.
More than 20 investors participated in
Wednesday’s sale, with local accounts
buying 87%, Europe 8% and Asia 5%. Banks,
bank treasuries and corporates were
allotted 79% and asset managers, insurance
bonds.
remaining 21%.
“We are extremely grateful for the
strong support from Kauri investors
helping us print the largest New Zealand
dollar bond of its kind by an SSA issuer,”
CORPORATES
US DOLLARS
COKE MANAGES LIABILITIES ACROSS
CURRENCIES
COCA-COLA has become the latest corporate
borrower to take advantage of attractive
FUNDINGûCOSTSûTOûRElNANCEûHIGH
paper, with a US$4.65bn-equivalent debt
raising across euros and US dollars.
The beverage company, rated A1/A+,
raised €1bn in euros, before turning on
Wednesday to the US for a US$3.45bn
three-part deal, which will be used to fund
tender offers for €2.2bn of euro
benchmarks and US$4.25bn of dollar
“The market is very strong, but you have
to remember a lot of these companies, the
big regular issuers, have a lot of cash
which will weigh on issuance,” said a
banker, adding that there are
CALLûOPTIONSûANDûmOORSûAREûVERYûVERYû
expensive. It knocks off any sense of
arbitrage for a lot of issuers.”
Dexia was last in the sterling market in
January, with a £750m 0.25% December
2026 note.
The latest deal came the day after the UK
$-/ûBROUGHTûITSûlRSTûSYNDICATIONûOFûTHEû
said Jingdong Hua, World Bank vice-
president and treasurer.
“Funding from the capital markets
supports our member countries’
sustainable development goals, including
efforts to implement a green, resilient and
inclusive recovery to the coronavirus
pandemic.”
opportunities available to corporates
WILLINGûTOûBEûPROACTIVEûINûRElNANCINGûTHEIRû
debt.
Bank of America, Citigroup and JP Morgan
announced a €500m no-grow nine-year
tranche and a €500m no-grow 15-year at
IPTs of 65bp and 85bp areas, trimming
down the spreads at launch to 40bp and
lSCALûYEARûAûaBNû
YEARûBENCHMARKûTHATû “In achieving a second consecutive
ended up being more than 11 times covered.
Despite two deals in two days, there is still
not really a feeling that the sterling market
will spring back to life, according to the
lead.
“It’s been a bit of a strange market. The
demand is there but we’ve not seen
investors chase it like they have the past
couple of years. There is an argument that a
LOTûOFûDEMANDûWASûlLLEDûINûTHEûPASTûCOUPLEûOFû
years, so the inherent need to just buy, buy,
buy maybe isn’t as strong as it was.
“Also, you have to look at some of the
performances in the secondary space, which
has been pretty lukewarm to say the least.
So, from an investor point of view, you’re
not chasing it as much.”
NON-CORE CURRENCIES
WORLD BANK SETS NEW RECORDS
The WORLD BANK, rated Aaa/AAA
(Moody’s/S&P), has matched its own record
with the equal-largest single-tranche issue
in the Kauri market and the biggest ESG
issue to date in New Zealand dollars.
34
60bp. Final books were €1.7bn and €1.5bn.
billion-dollar Kauri transaction within six
months, we have seen both the demand
that the market has for high-grade New
Zealand paper at present and the high
regard that investors have for the World
Bank as an issuer,” said Mike Faville, head
of capital markets at BNZ.
KBN GOES SHORT FOR NZ$450m
Norwegian local government funding
agency KOMMUNALBANKEN, rated Aaa/AAA
(Moody’s/S&P), raised NZ$450m
(US$325m), three times the indicative
minimum size, for a short two-year (April
14 2023) Kauri bond offering via sole lead
manager BNZ.
The bond pays a 0.375% coupon and
priced at 88.828313 to yield 0.465%, 1bp
wide of mid-swaps and 21bp over the April
2023 NZGB.
Friday’s sale takes year-to-date
Kauri issuance up to NZ$2.275bn from
four trades by three SSAs. This follows
2020’s record-breaking NZ$6.465bn
supply from eight SSAs over 16 deals
which beat the old annual record of
NZ$6.3bn that was set in 2014 and
equalled in 2015.
International Financing Review May 1 2021
Underscoring the greater euro investor
sensitivity around longer-dated notes, the
issuer paid a premium 5bp–10bp on the
longer bonds versus one of 0bp–5bp on the
shorter tranche, according to bankers. And
as a US borrower, its bonds are not eligible
for the European Central Bank’s asset
purchase programmes.
In the dollar market, Coca-Cola launched
new US$2bn 10-year and US$750m 20-year
issues and added US$700m to its
outstanding US$1bn 3% March 2051s at
respective spreads of 65bp, 70bp and 80bp
over Treasuries. Those levels were in from
initial price thoughts set in the area of
85bp, 90bp and 100bp.
Moody’s described the transaction as
credit positive because Coca-Cola will
improve liquidity by extending maturities
without materially affecting cash interest
COSTSûANDûFREEûCASHmOW
The bonds will replace four series of US
dollar notes and two euro notes that were
all set to mature in 2025 and 2026 with
coupons ranging from 0.75% to 2.95%. The
transaction is similar to Coca-Cola’s most
recent transaction from March, when it
raised US$2.5bn and €2bn to tender for
around US$4.5bn of various 2023
 BONDS CORPORATES

MATURITIESûRESEARCHûlRMû#REDIT3IGHTSû
noted in a report.
“Dating back to fall 2020, Coca-Cola has
been one of the more active issuers in our
NBN allays funding concerns
space and has twice used the low-rate „ CORPORATES Strong demand for Yankee debut bodes well for future US supply 
environment for opportunistic, debt-
lNANCEDûTENDERûOFFERSvûTHEûREPORTûSTATED
Indeed, since September 2020 the
company has raised more than US$16.7bn-
equivalent in euros and dollars, which does
not even include the nearly US$6bn-
equivalent raised by supported bottling
facility Coca-Cola European Partners that
was priced on April 21.
HEADWINDS
Coca-Cola performed well through the
pandemic as consumers increased their at-
home soda purchases, but the company sees
some headwinds ahead.
For one, Coca-Cola is appealing a tax court
ruling that could result in as much as
US$12bn of liability charges, according to
#REDIT3IGHTSû4HEûCOMPANYûISûlGHTINGûFORûAû
lower charge and expects that the initial
public offering for its Africa bottling
operations could mitigate the costs.
The company also announced plans to
raise consumer prices due to the impact of
higher commodity costs, CEO James
Quincey said during an interview in early
April. The move follows similar actions
taken by Kimberly-Clark, JM Smucker and
Procter & Gamble.
“The question is will there be a persistent
push for higher input costs or is this a one-off
where we just need to get a normalisation of
the supply bottlenecks relative to the surge
in demand as we come out of the pandemic,”
said Jon Duensing, head of corporate credit at
INVESTMENTûlRMû!MUNDIû53
“How much are corporates going to
accept in lower margins down the road?
Because they are still relatively high and
have some room to move lower and I think
it’s something that will be topical in light of
THEûBROADERûDISCUSSIONûONûINmATIONûTHATûWILLû
continue to evolve.”
Corporate treasurers in the food and
beverage space, in particular, remember
well the pre-pandemic environment when it
was a struggle to increase prices without
losing market share, said CreditSights senior
consumer analyst James Dunn. During the
pandemic, many of these companies gained
market share, even taking some business
back from the private labels, and it is yet to
be determined if consumers will stick by the
brands loyally through price increases as the
economy opens up again.
Dunn said: “The announcements we’ve
seen so far are a bit more uniform but we
don’t expect every company to issue a press
release that says ‘we’re raising prices in this
category’, we’ll just see prices go up.”
NBN achieved a strong result from its inaugural
offshore bond issue that suggests refinancing
the company’s huge debt pile and bankrolling its
hefty spending commitments may prove easier
than feared.
Australia’s state-owned broadband operator,
rated A1/AA (Moody’s/Fitch), debuted in the
Yankee market with a US$2bn two-part senior
unsecured print on Monday. This comprised
US$750m of 1.45% five-year and US$1.25bn of
2.625% 10-year notes which priced 67bp and
107bp wide of Treasuries versus the 90bp area
and the 130bp area initial price thoughts.
A banker close to the deal, arranged by joint
lead managers Bank of America, Goldman Sachs,
JP Morgan and Morgan Stanley, said this was
a solid first outing in the world’s largest bond
market which achieved significant duration.
The bonds also traded well, with the five-year
tightening to Treasuries plus 61bp and the 10-
year to 94bp by Friday morning.
NBN may look next to the euro market under
its US$50bn global MTN programme, potentially
filling out its curve by targeting that market’s
seven-year and 12-year sweet spots, according to
a Sydney syndication manager.
Two DCM managers away from the trade were
not overly impressed at first, as they pointed to
the lack of clarity on the order book and limited
price progression, with one of them describing
the outcome as “disappointing”.
The leads did not release investor demand
specifics, leading some to speculate that the
transaction may have been thinly subscribed.
It was surprising then to discover, through
a non-lead source, that orders had reached
US$3bn for the five-year and US$3.6bn for the
10-year, for respective four times and three times
cover.
This was enough for one of the sceptical DCM
managers to revise his opinion of the trade.
“While not quite the blowouts seen for recent
Australian Yankee trades like Santos, this was a
very respectable result that shows NBN has good
access to the deep US market, especially in the
crucial 10-year segment,” he said.
OWNERSHIP QUESTIONS
The lack of obvious comps had been seen as
a problem for this unique issuer, with neither
WHIRLPOOL DEBUTS SUSTAINABILITY
BOND
Home appliance company WHIRLPOOL
returned to the US high-grade primary
market last Monday to launch its debut
sustainability bond offering.
International Financing Review May 1 2021
alternative Australian infrastructure names
nor international blue chips in the sector, like
Verizon, AT&T and Vodafone seen as particularly
useful benchmarks.
The Commonwealth government provided
equity and loan funding to help NBN launch in
2009 to design, build and operate Australia’s
National Broadband Network as the country’s
wholesale broadband provider.
Because NBN is expected to be partially or
fully privatised in the longer term, the new 144A/
Reg S bonds include step-up provisions if a
change of control event occurs that lowers NBN’s
ratings to Baa2/BBB or below. The coupons will
step up by as much as 120bp if the ratings are
cut to Ba1/BB+ or lower.
NBN described the deal as ”successful”
and said proceeds would go towards general
corporate purposes, including refinancing its
A$16.5bn (US$12.8bn) loan from the Australian
government which matures on June 30 2024.
Of the original A$19.5bn, A$3bn was pre-paid in
December.
In addition, a A$4.5bn network investment
plan was outlined in the government’s 2021
corporate plan released last September to bring
faster internet to up to eight million people.
NBN noted that since March 2020, including
this new issuance, it has raised more than
A$12bn in new debt, including A$8.5bn in private
bank debt and A$1.6bn from its first domestic
bond sales at the end of last year.
The company had a mixed reception for its
first local bond. In November 2020 it proposed
a five to 10-year benchmark, before going out
with a potential five and 7.5-year sale and
then dropping the longer note after receiving
limited indications of interest, but went on to
print a record-equalling A$1.2bn five-year MTN
and promptly revived the 10-year note to raise
A$400m, although the latter was underpinned
by significant JLM interest.
Local fund managers at the time expressed
concern about ownership covenants as well as
NBN’s prospects in a 5G world. Such qualms did
not seem to register with US investors and with
so much demand left unfilled for the inaugural
sale, NBN can expect a strong reception if and
when it revisits the Yankee market.
John Weavers
It launched US$300m of 10-year
sustainability bonds at 85bp over Treasuries,
in from initial price thoughts of 115bp area.
Proceeds will be used to repay the
US$300m left outstanding on its 4.85%
senior notes due in June, which is its only US
dollar note issue set to mature this year,
35
ACCORDINGûTOû2ElNITIVûDATAû4HEûCOMPANYû
will allocate an amount equal to the net
0ACIlCûTAKINGûAû hybrids at Baa3/BBB– from Moody’s/S&P.
PROCEEDSûOFû-ONDAYSûOFFERINGûTOûlNANCEûORû
RElNANCEûELIGIBLEûPROJECTSûUNDERûITSû
sustainability bond framework.
The framework highlights several
initiatives, including investments in eco-
EFlCIENTûPRODUCTSûSUCHûASûCONNECTEDûDEVICESû
that can reduce waste to the end-consumer.
Eligible expenditures can also include
projects completed up to three years ago in
the areas of renewable energy, energy
120 accounts participated in the trade, with
INVESTORSûOUTûOFû!SIA
dominant 67%.
The issuer will have been encouraged by
the huge US$6bn of demand for the recent
debut 144A/Reg S issue from Australian
energy company Santos, which has similar
ratings of BBB–/BBB (S&P/Fitch).
Santos, one of Australia’s largest domestic
gas suppliers, was able to price its US$1bn
10-year Yankee bond a full 40bp inside the
250bp area initial guidance at Treasuries
Orange is rated Baa1/BBB+/BBB+, with the
Subordinated corporate bonds remain
one of the key tools that high-grade
investors are using to enhance returns, and
demand for the product will have only been
sharpened by the recent fall in supply.
In April, just €1.35bn of hybrids had been
sold into the primary market before
Wednesday, compared to €4.3bn in March
and €4bn in February, according to IFR data.
“We are focusing a lot on hybrids. We
EFlCIENCYûGREENûBUILDINGSûPOLLUTIONû
prevention, socioeconomic advancement
and empowerment, and access to basic
infrastructure, according to the framework.
Whirlpool was last in the market in May
2020 with a US$500m 30-year bond issue
priced at 340bp over Treasuries. Since then,
the 4.6% 2050 offering has tightened to a
plus 210bp. think that there is still value there,” said an
asset manager.
“If you want to go for yield, then either
EUROS you go lower down the capital structure of
the well-rated companies or alternatively
IG INVESTORS POUNCE ON you look at these lower-rated or sub-
HIGHER-YIELDING PRODUCTS investment-grade senior deals, but we think
that with some uncertainty still around the
G-spread of about 127.5bp, according to
MarketAxess data.
The company managed to launch the new
NOTESûmATûTOûITSûSECONDARYûCURVEûnûITûHASûAû
4.75% 2029 that is fairly illiquid but was last
seen trading at around a G-spread of 86.8bp
at a dollar price of just under 118, according
to MarketAxess data.
Whirlpool is rated Baa1/BBB/BBB, and
Moody’s said the offering is credit positive
BECAUSEûITûEXTENDSûTHEûMATURITYûPROlLEûANDû
helps facilitate projects that improve energy
EFlCIENCYûANDûREDUCEûWASTE
h4HEûCOMPANYûISûCURRENTLYûBENElTINGû
from strong demand for home-related
products given reduced travel and
entertainment spending,” the ratings
agency noted in its report. “Moody’s expects
demand to moderate as the global economy
emerges from the pandemic and a broader
array of consumer spending alternatives
return.”
Bank of America, JP Morgan, Wells Fargo,
Citigroup and Mizuho led the trade.
NEWCASTLE COAL TESTS NON-GREEN
DEMAND
Investors jumped into the higher-yielding
corporate bonds on offer in Europe’s
primary last week, with both an ORANGE
hybrid and a ZF FRIEDRICHSHAFEN sub-
investment-grade senior note gaining good
traction.
With supply relatively patchy, the
opportunity to pick up yield either by going
down the capital structure or along the
credit curve has a clear appeal for investors.
The two deals attracted similar-sized
demand. French telecoms company
Orange’s €500m perpetual non-call eight-
year issue got peak orders of over €2.4bn,
while the book for German car parts maker
ZF’s €500m six-year green bond exceeded
€2.5bn. Neither issuer paid a premium by
most estimates.
Global coordinators BNP Paribas and
NatWest Markets, along with bookrunners
Barclays, Commerzbank, HSBC and RBC began
marketing the Orange’s no-grow hybrid at
the 1.875% area. They then launched the
trade at 1.45%.
There was some disagreement over fair
value, with estimates spanning 1.375% to
1.5%. The coupon was set at 1.375%.
4HEûDEALûWASûPARTûOFûAûWIDERûRElNANCINGû
;ECONOMIC=ûRECOVERYûTHATûISûLESSûPREFERABLEv
YIELDY AND GREEN
Not all investors appear to think that way,
though. ZF Friedrichshafen, which carries
ratings of Ba1 and BB+ (both outlooks
negative), had no problem getting away its
€500m no-grow six-year green bond.
BNP Paribas, ING (green structuring
adviser), LBBW and UniCredit launched the
bond at a yield of 2%, 15bp through where
leads put fair value.
The fact that the deal carried green use of
proceeds and offered yield helped muster a
strong response from accounts, said a
banker involved.
Leads began marketing the note at 2.25%–
2.375%. Despite the ratings, the deal was
executed in an IG fashion and it appealed to
some high-grade investors, said bankers.
The top eligible category for use of
PROCEEDSûUNDERû:&SûGREENûlNANCEû
framework, published in April, is clean
transportation. In practice, what this means
is the production of components for low-
emission vehicles, including electric cars.
Given the company is trying to shore up
its market position and pivot towards
NEWCASTLE COAL INFRASTRUCTURE GROUP, a
wholly owned subsidiary of NCIG Holdings,
has held investor calls in Asia, Europe and
the US arranged by Citigroup and SMBC Nikko
for a 10-year senior secured 144A/Reg S
bond offering with expected ratings of BBB/
BBB– (S&P/Fitch).
NCIG owns and operates one of
Australia’s major coal export terminals and
it will be interesting to see the reception it
gets, given the huge global investor shift
exercise to take out more expensive debt.
“They are using a liability management
EXERCISEûTOûPUSHûOUTûTHEIRûMATURITYûPROlLEû
and, if you look, the deal is reducing their
hybrid portfolio slightly,” said a banker
involved.
A tender offer is targeting Orange’s €1bn
4% non-call October 2021s, of which
€118.374m is left outstanding, £650m
5.875% non-call February 2022s, of which
£427.102m remains, and its £600m 5.75%
ELECTRICûVEHICLEûPARTSûTHEûISSUEûlTSûWITHûITSû
overall strategy, wrote CreditSights.
Although CreditSights holds an
“outperform” rating on ZF’s bonds, the
analysts do note that the corporate has a
€1.7bn wall of debt coming due in 2022,
split across loans and bonds. The company
has, however, €5.5bn of liquidity, including
an undrawn €3bn RCF.
There appeared to be more price sensitivity
around tighter names. TOYOTA MOTOR CREDIT CORP
towards green assets since it debuted in the
Yankee market in September 2017.
NCIG’s inaugural US$500m 4.4% 10-year
144A/Reg S senior secured note secured an
impressive peak order book of US$3.5bn,
WHICHûFELLûTOû53BNûATûlNALûPRICINGû3OMEû
36
note callable in April 2023, with £560.878m
left outstanding.
It is an any-and-all offer for the shorter
two hybrids, while the acceptance amount
for the bond callable in 2023 is capped at
£135m.
International Financing Review May 1 2021
!! ûAû53ûlNANCIALûSERVICESûSUBSIDIARYûOFû
Toyota Motor and another non-CSPP-eligible
issuer, was also out on Wednesday, selling a
6.5-year senior unsecured.
The issuer raised €1bn and set the spread
at 35bp versus swaps, for a 5bp new-issue

concession, according to bankers off
the deal.
Leads, however, suggested fair value was
in fact slightly higher than the 30bp
SUGGESTEDûBYûSYNDICATEûOFlCIALSûAWAY
BPPEH’s focus on logistics-related
PROPERTIESûINûITSûPORTFOLIOûlTSûWELLûWITHûWHATû
real estate bond investors are showing a
preference for, said bankers.
Logistics accounts for 60% of its portfolio,
BONDS CORPORATES
noticeably impact the execution of deals
from the sector.
“There is still a big audience there for this
sector, and investment decisions are based
on credit quality and business performance
“TMCC’s curve, like all high-quality autos, while residential real estate contributes ;RATHERûTHANû%3'ûCONSIDERATIONS=vûSAIDûAû
ISûSUPER
mATvûSAIDûAûLEADûh3OûYESûBPû another 24%. The rest is accounted for by banker away from the deal.
versus their longest bond, but you could
argue more low to mid 30s if you apply some
curve from their shorter bonds.”
Comparables highlighted by leads
included the issuer’s 0.625% €600m
OFlCEûPROPERTIESûACCORDINGûTOûANûINVESTORû Aker BP’s credit quality has been
presentation. improving. In February, Moody’s upgraded
0ROCEEDSûFROMûTHEûDEALûWILLûlNANCEûBANKû its rating to Baa3 and removed its corporate
debt, as well as fund acquisitions. family rating of Ba1, giving the issuer a full
set of investment-grade ratings.
November 2024s, 0.25% €1bn July 2026s and
2.28% €500m October 2027s, seen at 26bp,
27bp and 28bp. The 2027 is issued by Toyota
Finance Australia rather than TMCC.
BPPEH SLASHES SPREAD, UPSIZES IN
EAGER MARKET
BLACKSTONE PROPERTY PARTNERS EUROPE HOLDINGS
was the sole issuer in the euro investment-
grade corporate market last Monday, and
took full advantage of the lack of supply
with a deal pricing in line with fair value.
AKER BP SETS UP FOR EURO FIRST
Independent oil and gas entity AKER BP set
the wheels in motion last week for its debut
euro benchmark bond, after announcing
calls with investors last week.
The Norwegian exploration and
production company, rated Baa3/BBB–/BBB–,
is targeting an eight-year issuance after the
roadshow concludes on May 4, via ABN
AMRO, BNP Paribas, Danske Bank, Nordea and
UniCredit
While dollar funding generally is a better
!ûSHIFTûINûTHEûCOMPANYSûlNANCIALûPOLICIESû
more prudent-than-expected minimum
dividend guidance and improved liquidity,
as well as a more supportive regulatory
environment, underpinned Moody’s
decision.
h4HEûRECENTûCHANGEûINûlNANCIALûPOLICYûANDû
the new guidance of a minimum level of
dividends of US$450m is more prudent than
previous expectations,” wrote the ratings
agency, “allowing the company to allocate
ITSûFREEûCASHmOWûGENERATIONûTOûTHEû
development of its resources to be turned in
However, the €550m seven-year did a see
a big drop in orders as the book shrunk by
more than a third from its peak after leads
squeezed pricing.
Volatility in order books has been
noticeable across asset classes, a
phenomenon bankers have been keeping a
lTûFORûOILûCOMPANIESûEUROSûMAKEûSENSEûFORû production while keeping its leverage
Aker BP’s gas operations, said a banker moderate.”
involved. In addition, a Norwegian petroleum tax
The company’s largest shareholders are regime brought in in June 2020 will support
Norwegian holding company Aker (40%) and the company’s growth while helping it
"0û û)TSûlNANCESûHAVEûBENElTEDû maintain its leverage.
considerably from the rise in oil and gas
close eye on. PRICESûTHISûYEARûREPORTINGûAûPROlTûOFû
“I think it’s fairly healthy,” a senior 53MûFORûTHEûlRSTûQUARTERûOFûû STERLING
banker said. “One of the drivers behind this compared to a loss of US$335m over the
is the amount of available investment, same period last year. NATS NAILS UNSECURED DEBUT
particularly in the corporate and SSA One key name highlighted by bankers as
sectors. In a world where investors a possible comparable was European oil and Credit quality and rarity appeal guided
anecdotally feel that valuations are quite GASûlRMû7INTERSHALLû$EAû"AAn""" STERLINGûINVESTORSûINTOûTHEû5+ûAIRûTRAFlCû
stretched, they still need to buy when asset That credit has four senior notes, including controller NATS (EN ROUTE)’s inaugural senior
becomes available.” a €1bn 1.332% September 2028 and €1bn unsecured bond issue last week, allowing
He added that investors that tended to 1.823% September 2031. Those bonds were the issuer to push hard on pricing.
stay in the book were at the higher end of bid at 107bp and 134bp over mid-swaps last Not only did the dual-tranche sterling
the quality spectrum. week, according to Tradeweb. benchmark mark the A2/A+ (negative) rated
“So, while the drop in order books creates Inevitably with oil and gas companies, borrower’s debut unsecured bond offering,
a challenge in terms of execution, I actually some ESG questions arise, but bankers ITûWASûALSOûTHEûlRSTûTIMEûITûHADûTAPPEDûTHEû
don’t think it’s a massively unhealthy APPEAREDûCONlDENTûTHATûTHISûSHOULDûNOTû primary market in 18 years.
dynamic,” he said. “It does make it hard to
ALL INV-GRADE US CORPORATE BONDS ALL CORPORATE BONDS IN EUROS
judge sometimes, but investors being there
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
when there’s a 25bp–30bp concession and
Managing No of Total Share Managing No of Total Share
DROPPINGûWHENûITSûmATûISûHEALTHYû)TûSHOWSû
bank or group issues US$(m) (%) bank or group issues €(m) (%)
there’s discipline in the market.”
1 JP Morgan 30 6,381.03 13.6 1 BNP Paribas 85 12,369.43 8.2
While BPPEH (BBB, S&P) achieved tight
2 Bank of America 24 4,725.34 10.0 2 Citigroup 54 8,476.50 5.6
pricing and was able to upsize the issue by
3 Citigroup 23 4,698.92 10.0 3 JP Morgan 62 8,313.90 5.5
€50m, leads began cautiously for an
4 Morgan Stanley 20 4,075.75 8.7 4 Deutsche Bank 54 7,439.48 4.9
expected €500m deal after books opened
5 Wells Fargo 25 3,891.50 8.3 5 HSBC 50 6,745.48 4.5
at mid-swaps plus 145bp area, which
6 Goldman Sachs 9 2,686.34 5.7 6 Barclays 42 6,615.66 4.4
equated to a 30bp premium, according to
7 Mizuho 11 2,198.54 4.7 7 Goldman Sachs 53 6,612.46 4.4
the leads.
8 MUFG 8 2,170.21 4.6 8 Bank of America 47 6,571.94 4.3
However, by launch, pricing had been
9 RBC 11 1,667.63 3.5 9 Credit Agricole 50 6,133.73 4.1
taken down to 115bp. The book at one stage
10 Deutsche Bank 7 1,552.89 3.3 10 Santander 32 6,054.97 4.0
was about €1.6bn, which encouraged BPPEH
Total 66 47,044.25 Total 198 151,088.73
and its leads, Bank of America, Morgan Stanley
Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Excluding equity-related debt. FIGs, ABS/MBS.
(joint global coordinators), Bank of China, BNP and non corporates.
Paribas, RBC and Santander, to upsize. Source: Refinitiv SDC code: F6a Source: Refinitiv SDC code: N8

International Financing Review May 1 2021 37

 Barclays, BNP Paribas, MUFG and NatWest
Markets were able to place the £450m
amortising 10-year tranche with a weighted
average life of 7.5 years at a spread of 85bp
over the January 2028 Gilt, while a £300m
12.5-year bullet was priced at 85bp over the
June 2032 Gilt.
secured bonds due to mature in March 2025,
of which £252m is left outstanding, according
to Eikon. The bonds will be redeemed through
the exercise of a make-whole call.
NATS is also establishing a £400m revolving
credit facility and a £450m bridge loan.
As a key component of one of the
lNANCINGûTOOLSûBEINGûUSEDûBYû5+ûHOUSINGû
associations.
The issuer, which owns 23,000 homes
across London, Surrey and the East
Midlands, became the third UK housing
association to issue sustainable benchmark
debt, following transactions from Clarion
!TûTHEûlNALûUPDATEûBOOKSûWEREûaBNû industries worst affected by the pandemic, Housing and MorHomes.
and £1.2bn. IPTs for the tranches were THEûREGULATEDûAIRûTRAFlCûOPERATORSûDIRECTû “Sustainability and ESG are increasingly
100bp area and 105bp–110bp. exposure is more limited than airline important topics for the sector and we see a
The niche nature of the business, the operators and airports due to the UKATS lot of the housing associations exploring
effect of the pandemic on its operations and 4RAFlCû2ISKû3HARINGû-ECHANISMû!GREEMENT DIFFERENTûlNANCINGûTOOLSvûSAIDûAû$#-û
its lack of peers in the bond market, made it This regulatory risk-sharing mechanism banker.
HARDûFORûLEADSûTOûlNDûAPPROPRIATEû MEANSûTHATûIFûLOWER
THAN
FORECASTûTRAFlCû “And the sterling investor base is, in many
comparables or establish fair value. volumes trigger a shortfall in cash, this can ways, very forward-thinking when it comes
h#OMPSûAREûAûLITTLEûDIFlCULTûSINCEûITSû be recovered at a later date. NATS operates to ESG, so we have good interest on that side
infrastructure but also in a sector that has been under a licence granted by the 2000 of the market too.”
impacted by Covid,” said a syndicate banker. Transport Act and is economically regulated Investors were certainly happy to support
/FlCIALSûINVOLVEDûINûTHEûTRANSACTIONû
looked at a range of Single A rated sterling
borrowers, largely from the infrastructure
and utility sectors, including Deutsche Bahn
(Aa1/AA–/AA), Reseau Ferre de France (Aa2/
AA/AA), Motability (A1/A) and Dwr Cymru
(A3/A–/A, senior secured).
CHANGING MODEL
The transaction is part of the company’s
shift away from a whole business
securitisation model.
“They historically had a WBS structure but
now they are moving to a true corporate
unsecured structure because it gives them more
by the Civil Aviation Authority.
But this is not to say that, in the short
term at least, the pandemic has not had an
EFFECTûONûTHEûCOMPANYSûlNANCES
Although NATS has not yet published its
results for the year up to March 2021, in a
recent trading update the company
HIGHLIGHTEDûTHEûSIGNIlCANTûIMPACTûOFûTHEû
Covid-19 pandemic on its business, as well
as the uncertainty around the timing and
pace of the recovery.
h4HEûMOSTûSIGNIlCANTûIMPACTûHASûBEENûTHEû
continuing shortfall since April 2020 in the
issuer’s revenue receipts for its UK En Route
Service and Oceanic En Route Service. This is
0!SûlRSTûTRANSACTIONûWITHûTHEûDEALûSEEINGûAû
23bp spread revision and landing some 10bp
through fair value, according to a syndicate
banker.
Barclays and Lloyds announced IPTs of the
110bp area over Gilts for the upsized £300m
15-year senior secured bond, of which
£100m will be retained. But, with orders of
around £1.2bn, they were able to set the
spread at 87bp.
Arguably, the success of the execution
was not entirely down to demand for ESG.
There are rumours that PA, rated A3/A, will
merge with the better-rated Accent (A+),
while buy-and-hold investors are
mEXIBILITYvûSAIDûAûSECONDûSYNDICATEûBANKER DUEûTOûTHEûREDUCTIONûINûAIRûTRAFlCûVOLUMESvû particularly keen on the 15-year part of the
The borrower’s current bank facilities announced the company in its update. curve. All these factors probably supported
expire in 2022 and part of the motivation for While the risk-sharing mechanism is in demand for the deal, according to the
tapping bond investors was to raise funding place, its liquidity is impacted in the short syndicate banker.
to bolster the business, said a company term because of the deferred nature of Prior to Thursday, less than £900m of ESG
spokesperson. shortfall recoveries. benchmark transactions had been recorded
“We’re looking at the most appropriate from UK housing associations, a relatively
funding structure for the business for the PA HOUSING SPOTLIGHTS GROWING ESG limited amount, considering that the nature
longer term,” said the spokesperson. PUSH of the businesses and their assets appear
“Which, whilst it is something we would be WELLûSUITEDûTOû%3'ûlNANCING
looking to do regardless at this time, is PA HOUSING’sdebut sustainability bond got an But there are some barriers to all housing
cognisant of the impact of Covid-19.” overwhelmingly positive reaction from associations being able to raise this form of
Funding from these bonds will partly be sterling investors last Thursday and debt in the public market.
USEDûTOûRElNANCEûITSûaMûûSENIORû underscored the growing number of ESG “It’s about picking the appropriate
funding tool,” said the DCM banker.
ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN STERLING h;(OUSINGûASSOCIATIONS=ûDOûAûLOTûINûTHEû
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE background. They are active in sustainable
Managing No of Total Share Managing No of Total Share private placements and sustainability-linked
bank or group issues €(m) (%) bank or group issues £(m) (%) loans, but given the size of some of them,
1 BNP Paribas 139 42,076.67 8.3 1 HSBC 9 884.56 12.6 there is no point issuing a benchmark if you
2 JP Morgan 107 35,876.70 7.1 2 Barclays 11 796.75 11.4 don’t have the assets to fund.”
3 SG 88 31,515.89 6.2 3 Lloyds Bank 8 631.09 9.0 This being said, several bankers
4 UniCredit 89 27,721.71 5.5 4 NatWest Markets 7 537.10 7.7 acknowledged there is increasing housing
5 Barclays 83 27,058.16 5.3 5 Santander 5 488.11 7.0 association interest in sustainable
6 Deutsche Bank 80 26,792.92 5.3 6 BNP Paribas 5 433.21 6.2 benchmark issuance.
7 Citigroup 79 25,101.57 4.9 7 RBC 5 423.62 6.1 For those that do not need the size, the
8 HSBC 89 24,012.33 4.7 8 MUFG 4 320.44 4.6 private placement market is open. BELIEVE
9 Credit Agricole 86 23,981.50 4.7 9 Bank of America 3 277.05 4.0 HOUSING, a housing association with 18,000

10 Goldman Sachs 58 22,733.11 4.5 10 JP Morgan 3 242.75 3.5 homes in North East England, last week
Total 518 508,649.99 Total 23 7,000.99 announced that it had issued an £85m 32.5-
Excluding ABS/MBS, equity-related debt. year sustainability-linked private placement,
Source: Refinitiv SDC code: N9 Source: Refinitiv SDC code: N8a bought by Legal & General.

38 International Financing Review May 1 2021


MORE HOMES, GREENER HOMES
The cash PA Housing has raised through the
sale of the sustainable bonds will be
allocated towards existing affordable
housing assets, new affordable homes, green
buildings and sustainable estates,
communities and public spaces.
One of the key projects outlined by the
framework is improving the energy
EFlCIENCYûOFû0!SûAFFORDABLEûHOMES
A number of the company’s homes were
built in the 19th century and 10,500
properties, or 40% of their homes, have
BONDS CORPORATES
Swiss franc curve with a SFr190m The offer is due to open on May 10 and
(US$208m) 10.5-year bond issue. close on May 14.
The issuer debuted in the Swiss market in SkyCity, is an Auckland-based gambling
April 2018 with a SFr200m 1% long seven- and entertainment company that owns and
year (December 8 2025) senior secured OPERATESûlVEûCASINOûPROPERTIESûINû.EWû
Eurobond in the same week it printed an Zealand and Australia.
inaugural US$500m 10-year Reg S note.
Transurban Queensland has a domestic
A$250m 4.9% MTN maturing on December 9
this year. FIG
ENDEAVOUR NAVIGATES HEAVY MARKET
US DOLLARS
%NERGYû0ERFORMANCEû#ERTIlCATEûRATINGSûOFû$û .ETWORKû&INANCEû#OMPANYûTHEûlNANCINGû
or below. PA is targeting a C rating or higher entity of ENDEAVOUR ENERGY GROUP, rated Baa1 CITIGROUP ADDS TO BANK SUPPLY SURGE
for its entire portfolio by 2030. (Moody’s), faced some investor indigestion
Second-party opinion provider for Wednesday’s A$350m (US$273m) long CITIGROUP added to the spate of US bank
Sustainalytics notes that the lack of seven-year senior secured note sale. issuance in recent weeks with a US$5.5bn
affordable housing and the environmental The offering attracted an order book of three-part senior deal of its own on Tuesday.
IMPACTûOFûTHEûHOUSINGûSECTORûAREûSIGNIlCANTû just over A$500m at its peak as demand was The bank was the latest to access the market
ESG issues in the UK, and the use of tempered by a recent wave of supply from following the Fed’s decision in March not to
proceeds outlined should contribute to Australian utilities, with Victoria Power extend a rule introduced at the onset of the
alleviating these pressures. Network, Transgrid and Australian Gas coronavirus pandemic to relax the
In 2019, the residential sector accounted Network raising a combined A$1.45bn in supplementary leverage ratio, which determines
for 19% of the UK’s total CO2 emissions. MTNs between April 15 and 22. the amount of capital banks have to maintain.
Meanwhile, an estimated 8.4 million ANZ, Bank of China and CBA were joint lead US banks had already raised more than
people in England live in unaffordable, managers for the 2.579% October 3 2028s, which US$45bn over a two-week period, taking size
insecure or unsuitable homes, and 3.4 priced on Wednesday at par, just inside the and duration from the market, and
million people were only able to afford 130bp area guidance at asset swaps plus 127bp. Citigroup followed a similar playbook.
decent living conditions through access to Australian and New Zealand investors
ALL US INVESTMENT GRADE CORPORATE DEBT
social housing, according to Sustainalytics. took 69%, Asia 24% and others 7%. Asset
BOOKRUNNERS: 1/1/2021 TO DATE
Unaffordable, according to the survey managers picked up 85%, banks and private
referenced by Sustainalytics, means homes banks 10% and others 5%. Managing No of Total Share
bank or group issues US$(m) (%)
for which the occupants cannot afford to Endeavour Energy Group, a regulated
fully cover their rent or mortgage payments. electricity distribution business located in 1 Bank of America 197 71,438.43 13.2
New South Wales, previously issued a A$350m 2 JP Morgan 207 65,236.63 12.0
2.25% seven-year MTN in November 2019. 3 Citigroup 170 47,403.47 8.8
NON-CORE CURRENCIES 4 Morgan Stanley 123 44,205.25 8.2
SKYCITY READIES RETAIL NOTE 5 Goldman Sachs 102 37,984.19 7.0
TRANSURBAN QUEENSLAND GOES LONG 6 Wells Fargo 118 26,858.09 5.0
SKYCITY ENTERTAINMENT GROUP, rated BBB– 7 Barclays 75 20,644.50 3.8
TRANSURBAN QUEENSLAND, a wholly owned (S&P), has mandated Westpac as arranger and 8 Mizuho 74 18,890.44 3.5
subsidiary of the Transurban Queensland joint lead manager with ANZ, CBA, Craigs, 9 Deutsche Bank 45 16,201.14 3.0
Group, achieved a solid result from Forsyth Barr and Jarden for a maximum 10 Credit Suisse 43 15,420.49 2.8
Wednesday’s A$300m sale of 10.25-year .:Mû53M ûlXED
RATEûSIX
YEARû Total 400 541,641.24
senior secured notes. senior unsecured retail note issue. Source: Refinitiv SDC code: F9
Despite this year’s unusually high
corporate supply – over A$5bn has been ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS INCLUDING
raised so far – and many fund managers’ EXCLUDING SECURITISATIONS SECURITISATIONS
reluctance to invest beyond seven years, the BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
Australian toll-road operator, rated BBB Managing No of Total Share Managing No of Total Share
(S&P), was able to secure an impressive bank or group issues £(m) (%) bank or group issues SFr(m) (%)
A$740m order book. 1 Barclays 42 6,174.12 11.7 1 Credit Suisse 43 4,488.43 25.1
Such demand enabled joint lead 2 HSBC 33 5,707.03 10.9 2 UBS 32 3,126.46 17.5
managers ANZ, CBA and SMBC Nikko to price 3 NatWest Markets 31 5,647.54 10.7 3 Verband Schweiz 8 3,034.32 16.9
the 3.25% August 5 2031s inside the 170bp 4 RBC 25 4,545.87 8.6 4 ZKB 21 2,060.65 11.5
area guidance at asset swaps plus 160bp. 5 BNP Paribas 16 3,810.51 7.2 5 Raiffeisen Schweiz 17 1,473.17 8.2
Australian and New Zealand investors 6 Deutsche Bank 12 3,440.55 6.5 6 Deutsche Bank 12 1,124.76 6.3
bought 65%, Asia 27% and others 7%, to the 7 Lloyds Bank 21 3,046.78 5.8 7 BNP Paribas 6 759.57 4.2
nearest percent. Asset managers dominated 8 Nomura 7 2,846.19 5.4 8 Basler KB 6 450.67 2.5
by investor type with an 82% allocation, 9 Bank of America 14 2,576.93 4.9 9 Credit Agricole 3 402.71 2.2
middle market took 4%, private banks 4% 10 Goldman Sachs 10 2,409.02 4.6 10 Commerzbank 3 229.15 1.3
and others 10%. Total 89 52,596.68 Total 84 17,903.63
Wednesday’s domestic issue came a week Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt.
after Transurban Queensland extended its Source: Refinitiv SDC code: K05a Source: Refinitiv SDC code: K06c

International Financing Review May 1 2021 39

 Citigroup, rated A3/BBB+/A, launched two
lXED
RATEûNOTEûTRANCHESûINCLUDINGûAû53BNû
four-year non-call three at 63bp over
Treasuries and a US$3bn 11-year non-call 10
at 95bp over. Those spreads were some
17bp–25bp tighter than initial price
thoughts in the area of 80bp and 120bp.
The bank also launched US$500m of four-
YEARûNON
CALLûTHREEûmOATING
RATEûNOTESûTHATû
QUARTERûEARNINGS
will reference the secured overnight
lNANCINGûRATE
At initial price thoughts, sole bookrunner
Citigroup started spreads some 30bp wide of
its secondary curve, where its 2.572% 2031s
were trading at around 90bp over the day
prior, according to MarketAxess data. After
accounting for maturity extensions and
other factors, one banker away from the
deal said Citigroup paid some 5bp of new
issue concession on the four-year non-call
three notes and priced inside its curve on
the 11-year non-call 10s.
Citigroup has been one of the lightest
money centre funders in senior US dollar
bonds in the year to-date, the banker added.
QUARTER=ûRESULTSûANDûTHEYû
In January, the bank priced a US$2.5bn six-
YEARûNON
53BNûANDû53BNûRESPECTIVELYûATûlNALû
spreads of Treasuries plus 105bp, 100bp,
115bp and 105bp. For JP Morgan and
Goldman Sachs those spreads were tighter
ORûmATûTOûWHEREûTHEYûPRICEDû.#ûNOTESû
on the same day.
Wells Fargo is now the only big six US
bank not to access the market following
lRST
“The trade obviously worked very well ...
EUROS
GOLDMAN, MORGAN STANLEY TAKE
CENTRE STAGE
Goldman Sachs and Morgan Stanley took
centre stage in the euro-denominated bank
senior market last week while many
domestic issuers remained in blackout,
taking contrasting approaches in their
reverse Yankee holdco deals.
The two deals were the latest in a deluge
of US bank senior offerings across the major
currencies. The deluge has been driven in
some cases – but not all – by a decision from
Observers said the size of the book was
particularly impressive and pointed to
strong demand at the short end of the
curve. They said, however, that such short-
dated issuance would not make sense for
all issuers, in particular those that can
access cheap short-dated central bank
funding, such as from the ECB’s TLTROs.
but I’m not sure it’s something others will
look to follow,” said a banker away from
the deal.
Morgan Stanley, following on Tuesday,
targeted the intermediate part of the
curve. Its self-led €1.75bn October 2027
non-call 2026 transaction was launched at
65bp over mid-swaps, down from initial
price thoughts of 80bp–85bp.
Bankers saw fair value in the 60bp to
low 60s context, extrapolating from
Morgan Stanley’s secondary curve.
“You would expect it to go well – it
didn’t look like a giveaway at that new-
issue concession – but obviously they’ve
HADûGOODû;lRST
have got good demand for their paper in
CALLûlVEûANDûINû&EBRUARYû53BNû
in a single-tranche rate reset preferred. The
bank has a long way to go to reach the
US$15bn–$20bn of benchmark senior issues
that CreditSights had predicted it would
make this year, according to a report from
THEûRESEARCHûlRM
While all the other money centre banks
priced senior bonds at the 20-year part of
the curve or longer in recent weeks,
Citigroup only went out to the 11NC10
mark. It last made a 20-year note issue in
March 2020 – just its fourth ever – and has
the Federal Reserve last month not to
extend a rule introduced at the onset of the
coronavirus pandemic that relaxed the so-
called supplementary leverage ratio, which
determines the amount of capital banks
have to maintain.
"ANKERSûSAIDûBOTHûISSUERSûBENElTEDûFROMû
a wise choice of issuance window, hitting
the market before an anticipated uptick in
supply this week, as big European lenders
exit their blackout periods.
Goldman Sachs’ self-led transaction on
Monday comprised two three-year non-call
US dollars recently,” said a second banker.
LBBW SECURES TIGHTLY PRICED
SNP AMID BLACKOUTS
LANDESBANK BADEN-WUERTTEMBERG capitalised
on a lack of European bank senior supply
as it landed a tightly priced €500m eight-
year senior non-preferred issue last
Tuesday.
,""7SûDEALûWASûTHEûlRSTûSENIORû
unsecured issue from a European bank in
more than a week, an absence that can be
not issued at the 30-year part of the curve TWOûTRANCHESûONEûAûlXED
TO
&2.ûANDûTHEû explained by the fact many remain in their
since March 2019, according to IFR data. other an FRN. blackout periods. The German lender
And other banks have seen stronger 4HEûõBNûlXED
TO
&2.ûTRANCHEûWASû BENElTEDûFROMûTHATûSHORTAGEûOFûSUPPLYû
demand for the longer duration. Over the launched at 50bp over mid-swaps, inside bankers said.
previous two weeks, Goldman Sachs, JP initial price thoughts of the 70bp area. The h7ITHûZEROûNEWû;EUROûSENIOR=ûISSUESûLASTû
Morgan, Bank of America and Morgan €1.5bn FRN landed at 55bp over three- week because of the blackout periods, it
Stanley each priced 21-year non-call 20 month Euribor, down from 70bp area IPTs. WASûVERYûWELCOMEû;FORûINVESTORS=ûTOûSEEû
tranches raising US$2.25bn, US$2bn, The combined book surpassed €5bn. such a new transaction,” said a banker
away from the leads.
ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION
The no-grow deal was launched at 52bp
BOOKRUNNERS: 1/1/2021 TO DATE BONDS (ALL CURRENCIES)
over mid-swaps, inside initial price
Managing No of Total Share BOOKRUNNERS: 1/1/2021 TO DATE
thoughts of 70bp–75bp, via DZ Bank, Erste
bank or group issues €(m) (%) Managing No of Total Share Group, LBBW, Santander, Societe Generale and
1 Goldman Sachs 24 6,739.62 8.2 bank or group issues US$(m) (%)
UniCredit. Final books were over €1.3bn
2 SG 28 6,481.58 7.9 1 HSBC 17 5,095.88 14.3 (€70m JLMs).
3 BNP Paribas 36 6,430.59 7.8 2 Citigroup 17 3,628.40 10.2 A banker at one of the leads attributed
4 UniCredit 30 5,107.29 6.2 3 Bank of America 13 2,912.84 8.2 the demand partly to the strength of the
5 Credit Agricole 26 5,041.19 6.2 4 JP Morgan 14 2,378.11 6.7 name and its high SNP ratings of A2/A–
6 Natixis 23 4,986.82 6.1 5 Barclays 12 2,354.72 6.6 (Moody’s/Fitch).
7 JP Morgan 30 4,662.20 5.7 6 SG 7 2,210.77 6.2 “After the recent yield move, it also
8 HSBC 24 3,128.20 3.8 7 Goldman Sachs 10 2,035.21 5.7 offered a good opportunity for investors to
9 Barclays 22 2,712.31 3.3 8 Credit Agricole 3 1,793.21 5.0 put some more money to work,” he said.
10 UBS 14 2,356.09 2.9 9 Morgan Stanley 6 1,373.27 3.8 h4HEûEIGHT
YEARû;MATURITY=ûISûAûVERYûGOODû
Total 146 81,958.92 10 UBS 8 1,327.58 3.7 spot where you have a good relationship
Including banks, insurance companies and finance companies. Excluding Total 48 35,703.99 between duration, yield and mark-to-
equity-related and covered bonds. Excluding publicly owned institutions.
Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a market risk.”

40 International Financing Review May 1 2021


Eurobank senior success provides positive omen
„ FINANCIALS Greek lender starts MREL issuance journey with first deal since 2017
Greece’s EUROBANK took an important first step
towards its regulatory targets with an inaugural
senior preferred transaction last Wednesday,
a €500m six-year non-call five transaction
that was smoothly executed, supported by an
improving credit story, offering hope to peers
facing up to their MREL needs.
Eurobank, which had been absent from the
wholesale market since 2017, finally returned
on Wednesday to issue the first of a series of
planned MREL-eligible senior deals. Though
banks have typically used senior non-preferred
debt for the bulk of their MREL needs, Eurobank
opted for senior preferred – taking advantage of
an exemption afforded to it because it meets its
subordination requirement.
Following two days of investor calls, the
€500m no-grow transaction was marketed
with initial price thoughts of the 2.375% area on
Wednesday morning.
Leads Bank of America, BNP Paribas, Goldman
Sachs, HSBC and UBS subsequently set the yield
at 2.125% on the back of more than €1.25bn of
orders. The final book stood above €1.1bn.
“Generating a book like this is incredibly
positive,” said a banker at one of the leads. “It
covers a broad spectrum of domestic demand,
international institutional investment managers,
and those that have been in the Greek trade for a
number of years on the hedge fund side and still
see value where we are now.”
Bankers said the deal had progressed
smoothly and deemed the level of demand to
be impressive given it was priced at what is, on
a historical basis, a relatively low yield for Triple
C rated paper. The deal is expected to be rated
Caa1/B+/CCC.
“The buffer investors were demanding
because of that absolute yield hurdle were lower
than expected,” said the lead banker.
Bankers saw fair value for Eurobank’s deal
in the context of 2%–low 2s, extrapolating
from National Bank of Greece’s 2.75% €500m
October 2026 non-call 2025 green senior
Bankers saw fair value in the low 50s,
based on LBBW’s SNP curve.
preferred notes, which were bid at a yield of
1.90% at Wednesday’s open.
While investors’ risk appetite is high and
issuance of higher-beta FIG paper has been
relatively low, observers said it was not a given
that the deal would be successful. They noted
the last Greek issuance – a €500m Tier 2 for
Alpha Bank sold in tougher conditions in March
– was priced in line with initial price thoughts.
“The lack of supply is a very strong
[supportive] technical, and there has been a lack
of supply in high beta – after volatility in the
window pre-blackout pushed back a lot of the
pipeline . . . But given the last Greek execution,
there could have been more uncertainty around
the next trade,” said a syndicate banker away
from the leads.
INCREMENTAL GAINS
Bankers said the assured execution reflected
Eurobank’s improving credit trajectory, as well
as its communication of that story to investors.
Eurobank reduced its NPE ratio from 29.2% at
the end of 2019 to 14% by end-2020.
Thanks to a recently announced €3.3bn
bad loan securitisation, codenamed Mexico,
Eurobank projects that it will be the first Greek
bank to reach a single-digit NPE ratio in 2021,
aiming for a target of around 9% by year-end.
“If you look at the metrics and credit quality
of Eurobank, it is becoming a more normalised
story,” said the lead banker.
Last Tuesday, S&P upgraded Eurobank,
along with peers National Bank of Greece and
Alpha Bank, to B+ from B, after lifting Greece’s
sovereign debt rating to BB from BB– on April
23.
The ratings agency said Greek banks’ funding
and liquidity metrics have improved, supported
by a rise in their deposits, balance sheet clean up
efforts and monetary developments, including
access to the ECB’s TLTRO funding. However, it
said their capital quality remains low, while their
earnings capacity is a restraint on capitalisation.
“So, you can either say that ESG doesn’t bring any
greenium or that this standard transaction priced
BONDS FIG
Bankers suggested it may take further positive
rating actions to generate a tangible pricing
benefit for the banks, but said every incremental
gain is supportive for sentiment towards Greek
risk.
OPPORTUNITY
All those signs bode well for the Greek and
Cypriot issuers that, like Eurobank, are facing up
to the task of filling their loss-absorbing buffers
over the coming years. While Eurobank has been
absent from the market, its peers have made
progress mostly via issuance of Tier 2 debt.
“Risk appetite is good and investors are keen
to look at names they haven’t bought before in
different parts of the capital stack, so there’s a
healthy opportunity here for some of the Greek
banks,” said a DCM banker away from the deal.
Eurobank plans to issue €1bn of senior
unsecured debt this year, with similar issuance
volumes projected for 2022 and 2023, as it aims
to meet its final MREL target by an end-2025
deadline.
The bank has not yet received an official
decision from the Single Resolution Board on its
final MREL target, but said a target unofficially
communicated at the end of last year pointed
to a need equivalent to around 26% of its risk-
weighted assets.
However, bankers said the takeaways are less
clear for Piraeus Bank, which intends to issue
Additional Tier 1 debt following the completion
of a capital raise. The deal, which would be the
first public issuance of a Greek AT1, is expected
to be a tougher test.
“Marginally, this a positive read-across [for
Piraeus], but senior and AT1 are much further
apart than senior and Tier 2,” said the syndicate
banker away from Eurobank’s deal.
“I think the approach will be opportunistic
for the rest of the Greek banks, barring Piraeus
potentially hitting the market, as they promised
their equity investors.”
Tom Revell
privatisation in 2015, having named leads
for a €300m senior preferred transaction.
h)ûTHINKûITûISûFAIRûTOûSAYûITûISûmATûTOûFAIRûVALUEvûSAIDû flat to the ESG secondary curve, which is quite good Kommunalkredit, a specialist in
the lead banker. “We haven’t seen an SNP pricing given the tone of the market.” The deal is LBBW’s INFRASTRUCTUREûlNANCINGûSAIDûLASTû4HURSDAYû
without a new issue concession recently.”
4HEûNEWûISSUEûlTSûBETWEENû,""7Sûû
September 2027s, quoted at 47bp, and its
0.375% February 2031s at 55bp.
“If you look at the comps they sent and
the curve, it’s mainly ESG deals,” said the
lRSTûBANKERûAWAYûFROMûTHEûLEADSûh4HISûONEû
was not and they managed to print with
nearly a zero new issue concession.”
lRSTûCONVENTIONALûSENIORûISSUEûSINCEûû
according to IFR data, as all its senior trades since
then have been either green or social bonds.
KOMMUNALKREDIT READIES SENIOR,
EYES MORE ACTIVE YEAR
KOMMUNALKREDIT AUSTRIAûISûPREPARINGûITSûlRSTû
public senior unsecured issue since
International Financing Review May 1 2021
it had mandated Erste Group, LBBW, Raiffeisen
Bank International and UniCredit to run the
deal, which will have a maturity of three to
lVEûYEARSûANDûWILLûFOLLOWûINVESTORûCALLSûONû
Monday and Tuesday.
The lender said the deal forms part of a plan
to increase its presence in capital markets this
year, to supplement its deposit base, and is
aimed at diversifying its investor base.
41
 4HEûDEALûWILLûBEû+OMMUNALKREDITSûlRSTû
public issue since selling a €300m social
covered offering in July 2017. That deal, its
only euro bond issue outstanding, will
mature in July. Kommunalkredit aims to
replace the it in the second half of 2021.
The bank has also privately placed €63m
of Additional Tier 1 bonds this year, to
TRANCHEûTHREEûNON
CALLûTWOûlXEDû
optimise its capital structure.
A total of 34 accounts took part for an
Syndicate bankers pointed to the senior
bonds of Austrian issuers such as
Raiffeisenlandesbank Oberoesterreich and
Raiffeisenlandesbank Niederoesterreich-
Wien as the best comparables. However,
they said Kommunalkredit may have to offer
a pick-up versus those benchmark trades
owing to the smaller size on offer.
UPûCOMPAREDûWITHûOTHERûRAREûOFlCIALLYû
Following an investor call on Tuesday, IPTs
SWISS FRANCS were released on Wednesday morning at
mid-swaps plus 40bp–45bp. Books opened
GOLDMAN FOLLOWS EUROS WITH for a minimum SFr100m at plus 40bp–42bp,
LONGER SWISS before the spread was set at the tight end,
equivalent to Swiss governments plus
THE GOLDMAN SACHS GROUP followed Monday’s 67.2bp and Saron plus 46.8bp, with a 0.2%
õBNûDUAL
yield and 0.125% coupon.
ANDûmOATINGûEUROûTRANSACTIONûWITHûAûSEVEN
year Swiss franc-denominated deal. average ticket of SFr4.4m, all of them Swiss.
Initial price thoughts were announced at Pension funds took over 37%, banks 30%, asset
mid-swaps plus the 65bp area early on managers more than 26% and insurers 6%.
Tuesday morning, and books opened shortly No premium was relayed, as the bond
afterwards for a minimum SFr300m issue was only Clientis’ second deal, after its
(US$330m) at 62bp–65bp. The spread was debut SFr105m 0.5% June 2022 from 2015.
then set at the tight end for a new minimum “Investors certainly wanted a bit of
SFr375m size, SFr450m ultimately being PICK
RLB Oberoesterreich’s €500m of 0.75% May priced. RATEDû;REGIONAL=ûBANKSûSUCHûASû-IGROSû"ANKû
2023s were bid at swaps plus 48bp on Thursday, Goldman’s outstanding 0.5% 2024 and 1% Bank Cler, the more liquid curve of Cembra
according to Tradeweb data. RLB Noe-Wien’s 2025 Swiss franc issues were quoted around and also the Julius Baer transaction we saw
€500m of 0.25% April 2024s were at 49bp. a Z-spread of 50bp ahead of the new issue, ATûTHEûENDûOFû-ARCHvûSAIDûAûLEADûOFlCIAL
S&P and Fitch both assigned putting the new paper around 12bp wide of Basler Kantonalbank and ZKB were leads on
Kommunalkredit a BBB– rating this year, in
February and March, respectively.
The lender is also rated BBB by DBRS,
following an upgrade from BBB(low) in
October 2020. The agency said the upgrade
REmECTEDûTHEûBANKSûCONTINUEDûPROGRESSûINû
developing its franchise in infrastructure
lending and further improvement in core
the curve, although one lead put it at 6bp, THEûDEALûRATEDû!nûBYûFEDAlNûANDû!nûBYû:+"û
pointing out that its Swiss franc paper is both stable.
very illiquid.
Compared to its US dollar and euro
curves, the bonds came around 6bp inside
the former and 3bp inside the latter,
ACCORDINGûTOûLEADûOFlCIALS COVERED BONDS
More than 100 accounts took part in the
PROlTABILITYûASûWELLûASûTHEûRESILIENCEûOFûITSû deal, with Swiss investors taking 91.61% of
business model despite the challenging the bonds. Germany, the UK and the UAE EUROS
environment of the coronavirus pandemic. accounted for much of the 8.39% residue. By
Kommunalkredit was bailed out by the investor type, asset managers took 53.75%, COVERED BONDS SQUEEZED, INVESTORS’
!USTRIANûSTATEûDURINGûTHEûlNANCIALûCRISISûBEFOREû banks and private banks 18.245%, insurers EXIT FEARED
being privatised in 2015. It is now 99.8% owned by 12.5%, bank treasuries 10% and pension
INVESTMENTûlRMSû)NTERRITUSû,TDûANDû!TTESTORû,TDû funds 5.51%. Issuers of euro covered bonds have recently
Commerzbank, Credit Suisse and Goldman been able to enjoy highly conducive
ALL SAMURAI BONDS Sachs itself were leads on the A2/BBB+/A conditions in a deeply undersupplied
BOOKRUNNERS: 1/1/2021 TO DATE
rated deal. market squeezed by the European Central
Managing No of Total Share Bank, but if selling new issues is said to be as
bank or group issues ¥(m) (%)
1 Sumitomo Mitsui
2 Daiwa Securities
Total
Excluding equity-related debt.
Source: Refinitiv
ALL GLOBAL AND EUROMARKET YEN BONDS
BOOKRUNNERS: 1/1/2021 TO DATE
Managing
bank or group
1 Mizuho
2 Bank of America
3 JP Morgan
4 Sumitomo Mitsui
5 Mitsubishi UFJ MS
6 Goldman Sachs
=6 Wells Fargo
8 Daiwa Securities
=8 Nomura
10 NatWest Markets
Total
Excluding equity-related debt. Including preferreds.
CLIENTIS BACK FOR SECONDS EASYûASûhlSHINGûWITHûDYNAMITEvûHOWûSERIOUSû
4 85,904.00 94.5 is the risk that the pond will eventually
1 5,000.00 5.5 Swiss regional bank CLIENTIS came to the empty?
5 90,904.00 market midweek with its second ever New issues last week highlighted how
deal, a SFr150m (US$161m) seven-year accommodating the primary market is for
SDC code: K11 senior issue. issuers of euro-denominated covered bonds,
with MunHyp pricing the tightest 15-year
ALL INTERNATIONAL YEN BONDS
covered bond since 2002 and BayernLB the
BOOKRUNNERS: 1/1/2021 TO DATE
tightest covered deal of any maturity since
No of Total Share Managing No of Total Share 2018. As spreads grind tighter, deals are
issues ¥(m) (%) bank or group issues ¥(m) (%)
regularly priced inside fair value, yet order
5 88,191.67 23.0 1 Sumitomo Mitsui 10 142,929.00 30.2 books show scant sign of price sensitivity.
2 63,333.33 16.5 2 Mizuho 5 88,191.67 18.6 That is perhaps little surprise in a year
2 60,500.00 15.8 3 Bank of America 2 63,333.33 13.4 where euro benchmark issuance has fallen
6 57,025.00 14.9 4 JP Morgan 2 60,500.00 12.8 almost 43% year-on-year and in which almost
2 23,566.67 6.2 5 Mitsubishi UFJ MS 2 23,566.67 5.0 every eurozone deal can count on a sizeable
1 16,400.00 4.3 6 Daiwa Securities 3 20,625.00 4.4 order from the ECB – which held almost
1 16,400.00 4.3 7 Goldman Sachs 1 16,400.00 3.5 €290bn under its third covered bond purchase
2 15,625.00 4.1 =7 Wells Fargo 1 16,400.00 3.5 programme at the beginning of April. Heavy
2 15,625.00 4.1 9 Nomura 2 15,625.00 3.3 redemptions also mean the market has
1 10,000.00 2.6 10 NatWest Markets 1 10,000.00 2.1 shrunk by around €43bn year-to-date.
10 382,800.00 Total 15 473,704.00 “It does feel like issuing covereds in this
Including all Euro, foreign and global issues. Excluding equity-related
debt.
MARKETûISûLIKEûlSHINGûWITHûDYNAMITEvûSAIDûAû
Source: Refinitiv SDC code: K10 Source: Refinitiv SDC code: K12 syndicate banker.

42 International Financing Review May 1 2021


While the supply versus demand
imbalance has ensured deals are well
oversubscribed, bankers said the pool of
investors still regularly buying covereds has
dwindled to at most 100 accounts.
“It’s not a healthy development,” said a
second syndicate banker. “Right now, it’s
okay for issuers, it’s a seller’s market, but
things can change.”
The ECB-induced squeeze risks pushing
some investors out of the covered bond
market for good, he said.
“We have to keep an eye on this,” said an
OFlCIALûATûAûCOVEREDûBONDûISSUERûh)ûDOûSEEû
this danger.”
The effect is particularly pronounced in
the secondary market, participants said,
with investors struggling to obtain even
small amounts of bonds for portfolio
adjustments while many notes are in the
hands of the ECB or buy-and-hold investors
such as insurance companies.
h3OURCINGûBONDSûHASûBEENûDIFlCULTûINûAû
shrinking sector where also the ECB is
strongly present and issuers have alternative
funding sources at their disposal . . . There
have been a lot of redemptions in Q1 and
Q2, and relatively little supply,” said Dirk
Frikkee, senior portfolio manager, euro
investment-grade, at NN Investment
Partners.
“Buying bonds in the secondary markets,
especially for covered bonds from countries
where there is still some spread pick-up
compared with core countries, is very
€380bn at the end of 2019. It is unclear what
proportion was placed by the issuers
themselves.
Moody’s said the extension of such loans
will strengthen expectations that central
banks rather than public markets will be
banks’ primary source of liquidity in future
times of stress.
“Consequently, the reputation of publicly
issued covered bonds as a rainy-day funding
tool will gradually lessen, raising the
prospect of weaker long-term systemic
support, at least in countries where covered
bonds are not so well entrenched compared
with leading markets,” said Edward
Manchester, senior vice-president at
Moody’s. “For example, it could lower the
incentive for authorities to take supportive
action if an issuer fails.”
However, Michael McCormick, head of
covered bond origination at Credit Suisse,
said that while issuers understand the
BENElTûOFûTAKINGûADVANTAGEûOFûTHEûLEVELSûTHATû
central bank funding offers, they still
maintain capacity to issue in the market.
“People have been talking about that moral
hazard – the danger of addiction to central
bank funding – for a long time, but I don’t see
issuers behaving in that way,” he said.
PLANS CHANGING QUICKLY
Ultimately, market participants are
CONlDENTûTHATûTHEûSCARCITYûOFûSUPPLYûANDûTHEû
persistent tightening of spreads will not last
long enough to cause permanent damage to
BONDS COVERED BONDS
“We have seen some investors step away
from the market in the past but they have
come back in when dynamics have
changed,” he said.
“For this year, the fact some investors are
disengaging is something people have to
take into account, but I’m not worried it will
be the death of the market.”
MUNHYP SECURES DREAM PRICE WITH
15-YEAR PFANDBRIEF
Muenchener Hypothekenbank
demonstrated the appeal of the long end of
the covered bond market as it priced a
historically tight €500m 15-year last week,
while BayernLB advanced the slow but
steady tightening of spreads with a swiftly
executed €500m 10-year Pfandbrief – at the
tightest level since November 2018.
All of last week’s euro covered bond
supply was concentrated at the long end, as
issuers looked to take advantage of low
funding costs while being able to entice
investors with increasing yield levels.
MunHyp’s deal was the tightest 15-year
euro covered bond since 2002, according to
bankers close to the deal.
h4HATûSHOWSûYOUûWHEREûTHEû;COVEREDûBOND=û
market is going,” said a banker at one of the
leads. “You need to tip your cap to what the
ECB is doing, but also there is a general lack
of supply and investors are very keen to buy.”
Leads Barclays, BayernLB, Commerzbank, DZ
Bank and NordLB opened books for the
DIFlCULTû!TûPRIMARYûISSUANCEûITûISûEASIERûBUTû the market. €500m no-grow Pfandbrief with guidance of
there is not a lot of issuance to speak of. But, Some market participants are optimistic mid-swaps plus 2bp area.
at primary issuance, it is less crowded than issuance could pick up sooner, in particular It was ultimately launched at minus 3bp –
other asset classes and sourcing bonds is due to the attractiveness of issuing long- mATûTOûFAIRûVALUEûnûWITHûTHEûlNALûBOOKû
possible.” dated deals at current levels, accessing standing at €1.1bn (including €215m JLM
Frikkee said senior bank bonds provide an tenors far beyond those offered by the interest). The deal was priced with a coupon
attractive alternative to covereds for TLTROs. Last week was the busiest in the of 0.25% to yield 0.325%.
investors, where mandate guidelines allow. euro market since mid-March, with €3bn of Martin Schmid, head of structured
supply. funding and ALM at MunHyp, said the result
NO LONGER THE RAINY DAY PRODUCT? “I think issuers themselves are uncertain,” surpassed the issuer’s pricing target of
If the ECB takes away covered bond supply said McCormick. “Plans are changing minus 2bp, noting that there was
with one hand via its purchases, it also takes quickly.” surprisingly little price sensitivity in the
it away with the other via its TLTROs. The Ultimately, it will, as ever, come down to order book.
extension of the cheap loans amid the relative value, the optimists say. Once
pandemic is one of the primary drivers of issuers return in greater numbers, spreads ALL COVERED BONDS (ALL CURRENCIES)
the fall in supply, alongside a rise in will rise accordingly. BOOKRUNNERS: 1/1/2021 TO DATE
deposits. In March, banks drew €330.5bn of A recent rise in yields may already be Managing No of Total Share
funding from the latest round of the TLTRO tempting some yield-focused investors back bank or group issues US$(m) (%)
III. to the market, participants have suggested. 1 LBBW 15 2,402.21 7.2
As a result, syndicate bankers say some “Long term, without the ECB presence, 2 NatWest Markets 11 1,935.96 5.8
issuers may not return to the covered bond normality will return, and investors will 3 Natixis 12 1,876.31 5.6
market until 2023. return as the ECB’s holdings are reduced,” 4 Commerzbank 11 1,669.10 5.0
The increasing issuance of retained SAIDû&RIKKEEûh)ûDOûNOTûSEEû;INVESTORS=û 5 UniCredit 12 1,584.30 4.8
covered bonds to be deposited as collateral participation as permanently reduced, as 6 BNP Paribas 9 1,385.25 4.2
with central banks also reduces the amount covered bonds are a high-quality asset class 7 DZ Bank 9 1,325.16 4.0
of collateral that issuers have available for with interesting spreads compared with 8 Credit Agricole 9 1,316.52 3.9
public issuance. government bonds.” 9 SG 7 1,293.33 3.9
!SûOFûTHEûENDûOFûTHEûlRSTûQUARTERûOFûû McCormick said the global spread of 10 Credit Suisse 7 1,291.95 3.9
€645bn of covered bonds were deposited covered bonds and investors’ knowledge of Total 52 33,352.00
with the central bank as collateral, up from the product stand it in good stead. Source: Refinitiv SDC code: J15a

International Financing Review May 1 2021 43

 “Minus 3bp was possible in our dreams, so Bankers noted there was little sign of any DEMANDûFROMûlXEDûINCOMEûINVESTORSûFORû
our dreams came true,” he said. price sensitivity in the book, even as the lower-rated junk bonds. This has driven
Banks took 36.6% of the deal, insurance deal was priced around 1bp through down borrowing costs for the riskiest tier of
COMPANIESûûCENTRALûBANKSOFlCIALûINSTITUTIONSû
16.2% and asset managers/funds 15.2%.
Current market conditions are well poised
for such longer-dated issuance because of a
rise in interest rates, which has made deals
more attractive to yield-focused investors.
BayernLB’s curve.
CREDIT MUTUEL HOME LOAN SFH and NATIXIS
PFANDBRIEFBANK also hit the 10-year part of
the curve last Wednesday.
The former secured the largest euro
covered bond issue in more than three
US companies, with Triple C bonds now
offering a spread of just 640bp over
Treasuries, down from 1,962bp in March last
year.
“Building income into portfolios without
taking outsized risk continues to be a
Schmid said the book for Tuesday’s deal
included several insurance companies that
had not participated in MunHyp’s issuances
for three or four years but had returned due
to the rise in rates.
weeks, printing a €1.25bn deal on the back
of a €1.7bn book (including €200m JLM
interest).
The deal was priced at 1bp through mid-
swaps, inside initial guidance of plus 3bp
SIGNIlCANTûCHALLENGEvûWROTEû'REGû(AHNû
CHIEFûINVESTMENTûOFlCERûATû7INTHROPû#APITALû
Management, in a research note to clients
on Monday.
Given the steep yield curve and tight
The deal was MunHyp’s second euro
RATEDûBONDSû
benchmark covered bond issue of 2021,
following a €500m October 2039 deal in
January.
Schmid said the bank has remained
relatively active in the covered bond market
because it has a need for longer-dated
funding.
Its participation in the ECB’s TLTROs,
which provide funding with tenors of up to
three years, has therefore been lower than
that of some of its peers, he said.
“We have retail mortgage loans with
durations of 17 years, so it makes more
SENSEûTOûlNANCEûTHOSEûWITHûAûLONG
DATEDû size but said the book was nevertheless a
instrument like Pfandbriefe rather than the
TLTRO . . . the maturity mismatch will be too
big with the TLTRO,” he said.
SPREADS GRIND TIGHTER
The covered bond primary market has
inched lower over recent weeks, supported
by the recent rise in yields, with deals now
regularly priced through mid-swaps. As
demand continues to outstrip supply, issuers
have been able to push tighter while often
encountering little price sensitivity. (See
separate article.)
Those factors allowed BayernLB to take
spreads tighter still – with demand
heightened because of the issuer’s recent
lNANCIALûCRISISû
absence from the market. The new issue is
ITSûlRSTûBENCHMARKû0FANDBRIEFûSINCEû
February 2019.
Leads BayernLB, BNP Paribas, ING, Natixis
and Santander marketed the €500m no-grow
deal with initial guidance of mid-swaps plus
1bp area.
Demand built swiftly, surpassing €1bn
after 30 minutes. The spread was ultimately
set at minus 4bp on the back of more than
€2.2bn of orders, with over 70 accounts
participating.
area, via Barclays, CIC, Danske Bank and Societe
Generale.
"ANKERSûDEEMEDûTHEûlNALûSPREADûTOûBEûmATû
to if not 1bp inside fair value, based on
Credit Mutuel’s curve.
Natixis Pfandbriefbank’s €250m no-grow
10-year deal landed at 1bp over mid-swaps,
3bp inside the initial guidance. Demand
surpassed €625m (pre-rec, including €95m
JLM interest).
Natixis, NordLB and UniCredit were the
leads.
A banker at one of the leads said demand
was restrained by the deal’s sub-benchmark
seasonal trajectory, analysts at Citigroup
granular one.
“Maybe the investors feared that they
would see the same progression as BayernLB
and MunHyp, where spreads tightened by
5bp or so, but this was not what we had in
mind,” he said. “It’s hard to estimate, but in
the end it was a very small NIP left on the
table, maybe 1bp or so.”
HIGH-YIELD
UNITED STATES
HUNT FOR YIELD DRIVES CORPORATE
DISTRESS RATIO TO 10-YEAR LOW
S&P said last week that the corporate
distress ratio was at a 10-year low, as higher
4REASURYûRATESûPUSHûlXEDûINCOMEûINVESTORSû
into lower-quality corporate bonds in search
of yield, lowering borrowing costs for riskier
companies.
The US corporate distress ratio dropped to
3.4% in March, its lowest level since October
SPREADSûTHEûlRMûPREFERSûHIGHER
at the long end of the curve, but he noted
THATûTHEûCREDITûCYCLEûREMAINSûONûlRMûGROUNDû
and with a reopening economy, “it is
UNLIKELYûTHATûWEûSEEûANYûSIGNIlCANTûTURNSûINû
credit quality in the near term”.
High-yield companies have taken full
advantage of this environment to issue new
debt, with borrowing costs close to post-crisis
lows and Treasury rates still relatively low,.
Borrowers have issued US$194bn of new
junk bonds this year, a 74% increase on the
US$111.182bn raised in the same period last
year. If issuance continues on its usual
said on Wednesday that issuance could
reach US$523bn this year, well ahead of the
US$350bn the bank predicted in December
and ahead of 2020’s record US$433bn.
Issuers have largely taken advantage of
these conditions to replace existing bonds
with longer, cheaper debt. That is helping to
drive down expected defaults. Fitch in April
lowered its expected high-yield default rate
for 2021 to 2%, from 3.5%, thanks to the
INCREASEDûLIQUIDITYûANDûRElNANCINGûACTIVITYû
taking place, as well as expectations of
economic growth and government stimulus.
This is giving some investors comfort with
the low spreads on offer in the market,
WHICHûAREûHOVERINGûNEARûPOST
tights.
“There is a common consensus that
default rates are going to be very benign
going forward,” said Paul Benson, head of
lXEDûINCOMEûEFlCIENTûBETAûATû-ELLONûh!Tû
this point in time, if you’re achieving
250bp–300bp on a spread basis, that is
pretty fairly compensated from a value
perspective.”
DANA PRICES GREEN BONDS FOR EV
INVESTMENTS
h;)TûWAS=ûAûVERYûSUCCESSFULûTRANSACTIONvû
said a banker away from the deal. “They
were able to tighten by 5bp – that was
mainly due to the fact that the issuer had
been inactive since 2019.”
The deal is the tightest euro benchmark
covered bond issue since November 2018,
according to IFR data.
44
2007 and 10 times lower since hitting a peak
of 35.2% in March 2020, S&P said on Tuesday.
The distress ratio is measured as the
percentage of high-yield borrowers trading
at a spread above 1,000bp.
S&P said higher economic growth
FORECASTSûANDûINmATIONûEXPECTATIONSûHAVEûLEDû
to an increase in Treasury yields, spurring
International Financing Review May 1 2021
DANA, a drive train and electric propulsion
systems manufacturer, has issued US$400m
OFûGREENûBONDSûTOûRElNANCEûOUTSTANDINGû
notes and continue its investments in the
electric vehicle space.
The company, rated B2/BB/BB+,
manufactures parts that deliver power to

the driving wheels in combustion cars, but
over the years has steadily increased its
investments in electric propulsion systems,
including several bolt-on acquisitions.
Structuring adviser and lead bookrunner
Citigroup started price talk on the nine-year
NON
CALLûlVEûSENIORûUNSECUREDûNOTESûATû
4.25%–4.5% but was unable to tighten the
yield beyond the low end.
Proceeds will be used to fund eligible
GREENûPROJECTSûASûWELLûASûRElNANCEûANYûANDû
all of the US$425m left outstanding on its
5.5% senior notes due in 2024, according to
THEûlLINGû
Eligible green projects include clean
transportation, renewable energy,
sustainable water management and green
buildings, according to the company’s green
bond framework.
BORDERûlNANCINGûPACKAGEûSUPPORTINGû
EUROPE/MIDDLE EAST/
AFRICA
INVESTORS SAY BIRKENSTOCK BRAND
POWER MEANS BOND IS A BLOWOUT
memorandum, the net-short language
BIRKENSTOCK’s high-yield bond portion of its
LEVERAGEDûBUYOUTûlNANCINGûPACKAGEûHASû
seen blowout demand, allowing it to slash
interest costs despite an aggressive
covenants package.
The company landed its €430m eight-year
non-call three senior bond (Caa1/CCC+/B–)
issue at 5.25% on Tuesday, tighter still than
lNALûPRICEûTALKûOFûûSENTûOUTûEARLIERû
that day. Price talk was 5.5%–5.75%.
The bond issue is part of a larger €1.505bn
CROSS
owns Louis Vuitton and Christian Dior.
BONDS HIGH-YIELD
aggressive sponsor covenant package
incorporating a number of loan-style
covenant provisions typically seen in the
most aggressive top-tier deals”.
According to a pricing supplement, while
some changes were made to the offering
stayed in.
Investors looking at the Birkenstock
bonds said that the yield on offer and the
comfort level around the credit won out in
the end.
BRAND POWER
The deal, reportedly valued at €4bn, brings the
family-owned German company into the orbit
of French luxury powerhouse, LVMH – the
world’s biggest luxury goods group – which
3PECIlCALLYûTHATûINCLUDESûPLANSûTOûALLOCATEû ,6-(
BACKEDûPRIVATEûEQUITYûlRMû,û While footwear is not one of the more
more than half of the proceeds to clean Catterton’s acquisition of a majority stake in POPULARûAREASûINûLEVERAGEDûlNANCEûANDûRETAILû
transportation projects, with a large focus the company. as the sector has struggled amid Covid-19, the
on improving the environmental impact of 4HEûlNANCINGûALSOûINCLUDESûAûõBN
deal has proved attractive given Birkenstock’s
the company’s products and reducing equivalent dual-currency term loan B, and status and the brand quality of LVMH.
downstream emissions and air pollution, there will be an equity contribution of Birkenstock, which traces its roots to 1774
according to a report from S&P. €1.8bn. and sells sandals in 100 countries, said it had
Clean transportation projects also include “The docs are awful but it was always set a record year in 2020 despite the Covid-19
investments in core products the company TOûmYvûSAIDûONEû,ONDON
BASEDûHIGH
YIELDû pandemic and is expanding production
offers and systems that promote the investor of the deal. “The business has the capacity in Germany. Revenues increased by
ELECTRIlCATIONûOFûVEHICLESûINCLUDINGûELECTRICû right sponsors, which gives it credibility in 1.2% in the year ended September 30, while
motors and inverters, electric vehicle terms of achieving its business plan. And Ebitda grew by 15%, said CreditSights
systems, e-powertrain systems, e-axles, even with the amount of leverage there’s a analysts.
thermal management capabilities and
metallic bipolar plates for fuel cells.
2ESEARCHûlRMû#REDIT3IGHTSûPLACEDûFAIRû
value for the new notes in the low 4% area,
comparing it with Dana’s longest
outstanding note issue – a 5.625% 2028 that
was last trading at a yield of 2.771% and a
cash price of 108.50, according to
MarketAxess data.
The company’s outstanding bonds have
rallied substantially in April, with yields
some 87bp tighter from the start of the
lot of comfort around the equity cushion,
ANDûTHEûCASHmOWSûLOOKûDECENTû)ûEXPECTûTHATû
people will be happy to lend to them on the
basis of the brand and the equity value.”
Speaking before the deal was priced, the
investor said that he expected allocations
would be hard to come by.
“It’s going to be messy. A lot of people
came into the books when they realised it
was going to be a blowout. We’re in the
hands of the leads at this point.”
The bond docs contain a controversial
&INANCIEREû!GACHEûTHEûFAMILYûOFlCEûOFû
French billionaire and LVMH boss Bernard
Arnault, is also taking part in the purchase
alongside L Catterton, which has also
invested in Pepe Jeans, online retailer
Everlane and workout gear brand Sweaty
Betty.
The acquisition will help the company to
grow in China and India, as well as expand
its online business.
L Catterton was created in 2016 as a joint
venture between consumer-focused private
month as the dollar price has shot up more PROVISIONûTHATûLOOKSûTOûCURBûTHEûINmUENCEûOFû EQUITYûlRMû#ATTERTONû,6-(ûANDû'ROUPEû
than two points, according to MarketAxess short sellers – only the second time that anti- Arnault, Arnault’s family holding company.
data. CDS language has been seen in the market. It now manages US$23bn in assets.
Part of the strong performance has been The terms of Birkenstock’s deal mean that
driven by a positive earnings report, in bondholders that have short positions ALL US$ DENOMINATED HIGH-YIELD BONDS
which the company raised its 2021 guidance would not be allowed a say on defaults – BOOKRUNNERS – 1/1/2021 TO DATE
driven by a recovery in the broader even if the company has breached its Managing No of Total Share
automotive market, CreditSights noted. COVENANTSû4HEûlRSTûINSTANCEûOFûTHEûLANGUAGEû bank or group issues US$(m) (%)
Additionally, the company has been was found in Merlin Entertainment’s £635m 1 JP Morgan 168 21,761.05 10.3
acquisitive in recent years, most recently of LBO bonds in October 2019. 2 Bank of America 155 17,824.50 8.5
completing the purchase of Pi Innovo in The inclusion of such language is largely 3 Goldman Sachs 101 12,615.04 6.0
March for an undisclosed amount. The designed to avoid a repeat of what happened 4 Citigroup 105 12,582.22 6.0
acquisition will increase Dana’s in-house to telecoms service provider Windstream. 5 Credit Suisse 118 11,987.85 5.7
electrodynamics capabilities and Windstream fell foul of activist hedge 6 Barclays 101 11,362.06 5.4
ELECTRIlCATIONûPRODUCTûPORTFOLIOûACCORDINGû fund Aurelius Capital, which successfully 7 Wells Fargo 99 10,769.99 5.1
to a press release. argued that it had technically defaulted on 8 Morgan Stanley 79 10,299.94 4.9
CreditSights noted in its report: “We its bonds – a move that pushed it into 9 Deutsche Bank 106 10,261.88 4.9
continue to like Dana from an operational bankruptcy in February 2019. 10 RBC 76 8,866.19 4.2
and EV positioning perspective and it Net-short language aside, credit research Total 322 210,617.42
remains one of our favourite names in the lRMû#OVENANTû2EVIEWûSAIDûTHEûNOTESûWEREû Including US domestics, Euro, foreign, globals. Excluding equity-related debt.
space.” being marketed with “an extremely Source: Refinitiv SDC code: B5

International Financing Review May 1 2021 45

 LONZA MARKETS FIRST
SUSTAINABILITY-LINKED LBO BOND
LONZA SPECIALTY INGREDIENTS was in the market
LASTûWEEKûWITHûTHEûlRSTûEVERûLEVERAGEDû
buyout sustainability-linked bond issue to
back its buyout by private equity groups,
Bain Capital and Cinven.
The Swiss drug maker was set to land two
sustainability-linked note tranches: a
US$350m seven-year non-call three (B2/B)
and a €460m eight-year non-call three
(CCC+/Caa2). The dual-tranche bond
offering was the second leg of the LBO
lNANCINGûnû,ONZAûLAUNCHEDûAû53BNûLOANû
to back the deal on April 19.
Proceeds from the deal will be used to
fund the company’s US$4.5bn buyout by
unsustainable levels of debt. Lonza’s
lNANCINGûTOTALSûABOUTûûTIMESûAûHIGHLYû
adjusted Ebitda of SFr415m (US$455m),
which left US banks unable to participate,
LPC reported.
That said, the concept is not new in the
loan market, which has seen the use of
sustainability criteria in leveraged deal
structures increase dramatically. In January,
Flender linked its €1.3bn buyout loan to
ESG, and other similar structures have since
been priced.
Bankers said that, if anything,
incorporating sustainable principles is even
more important when the company is
undergoing more extreme changes than it
would as a corporate in its normal course of
business.
employees? Or does the company want to be
a sustainability leader? If the latter, there’s
no harm in letting people know.”
A second investor agreed.
h)ûGUESSûWHETHERûTHISû;DEAL=ûISûSUSTAINABLEû
or not is what the sponsors plan to do with
the business,” he said. “If they are cleaning it
up, then it’s a possibility.”
Lonza’s KPIs are linked to criteria around
greenhouse gas emissions and waste. The
company is targeting at least an 18%
reduction in greenhouse gas emissions
intensity by year-end 2024, and a minimum
12% reduction in waste intensity over the
same time period. If Lonza misses both
targets, the bond’s interest costs will
increase by 25bp. If it hits one target but not
the other, interest costs will increase by
"AINûANDû#INVENûANDûTOûHELPûRElNANCEûDEBTû
Joint global coordinators and joint
sustainability-linked bond structuring
advisers Deutsche Bank (lead-left, sole
physical) and UBS held investor calls from
Tuesday to Thursday.
Leveraged buyouts might not be
CONSIDEREDûAûNATURALûlTûFORûTHEû%3'ûSPACEû
historically, private equity companies have
received a bad reputation for levering
“An LBO is just one a stage of a lifecycle of
a company – it’s not the company itself,”
said a banker familiar with the deal. “It’s
IMPORTANTûTHATû;%3'=ûPRINCIPLESûAREûINCLUDEDû
in a phase of likely change. Private equity is
a major stakeholder in our market and it’s
good to see them willing to take steps to
adhere to this sort of structure.”
The idea is that, if the company indicates
that sustainability is important, that ethos
12.5bp.
Joint bookrunners were Credit Suisse, RBC,
Credit Agricole, Societe Generale, and UniCredit.
The deal was not the only sustainability-
linked bond issue in the market: French
electricals company REXEL (Ba2/BB) was out
with a €300m seven-year non-call three
sustainability-linked senior bond offering
(Ba3/BB–).
Rexel has two sustainability performance
companies up – sometimes with WILLûlLTERûTHROUGHûTOûCORPORATEûPRACTICESûHEû targets: a 23% reduction in its Scope 3
said. greenhouse gases from the use of its
ALL ASIAN HIGH-YIELD ISSUERS Price talk went out for the euro bonds at products by 2023, from a 2016 baseline, and
1/1/2021 TO DATE 5.375% area, from price talk of 5.5% area. a 23.7% reduction in Scope 1 and 2
Managing No of Total Share IPTs for the US dollar bonds were 5.25% area greenhouse gases by 2023, from the same
bank or group issues US$(m) (%) and price talk followed at 4.875% area. The baseline. If the company does not hit both
deal had not been priced by the time IFR targets, the cost of debt will increase by
1 Credit Suisse 31 1,534.37 7.4
went to press on Friday. 25bp.
2 Citic 34 1,327.83 6.4
0ROCEEDSûFROMûTHEûDEALûWILLûRElNANCEûPARTû
3 Guotai Junan Secs 42 1,316.79 6.4
LOOKING THROUGH THE LABEL of the company’s 2.125% senior notes due
4 Deutsche Bank 34 1,250.92 6.0
5 HSBC 26 1,209.80 5.8
Investors said that the key was to look 2025.
6 Haitong Secs 39 1,089.78 5.3
through the sustainability label to the credit Final pricing was 2.125%, with an order
7 JP Morgan 14 1,085.17 5.2
risk itself. book of over €2bn. Initial price thoughts
8 UBS 33 1,029.58 5.0 “LBOs are not nefarious a priori,” said one were mid-2%.
9 Morgan Stanley 14 1,021.73 4.9 corporate bond investor with an ESG focus. Global coordinators on Rexel’s SLB were
10 Citigroup 8 790.17 3.8 “It’s how the company is managed and how Credit Agricole (B&D, sustainability adviser),
Total 67 20,727.10 it evolves after the fact – and whether the HSBC and Societe Generale. Other bookrunners
Excluding equity-related debt. buyout is creating or destroying value. Is were Barclays and Wells Fargo.
Source: Refinitiv SDC code: B06d VALUEûCREATIONûMANAGEDûBYûlRINGûHALFûOFûTHEû
SINGLE BS NAVIGATE PICKIER
ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS ALL EUROPEAN HIGH-YIELD ISSUERS INVESTOR BASE
1/1/2021 TO DATE 1/1/2021 TO DATE
Managing No of Total Share Managing No of Total Share Four Single B rated corporates priced deals
bank or group issues €(m) (%) bank or group issues US$(m) (%) in the European junk bond market last
1 Deutsche Bank 34 3,901.63 8.2 1 JP Morgan 44 6,074.62 8.2 week, though all completed their trades at
2 JP Morgan 36 3,677.33 7.7 2 Deutsche Bank 39 6,041.87 8.2 contrasting yields.
3 Goldman Sachs 40 3,654.51 7.6 3 Goldman Sachs 46 5,267.83 7.1 French building materials company
4 Barclays 26 3,185.86 6.7 4 Barclays 32 4,759.08 6.4 CONSOLIS (B2/B–) and German auto parts

5 Bank of America 21 2,729.55 5.7 5 Bank of America 27 4,185.50 5.7 supplier STANDARD PROFIL (B3/B) had to pay up,
6 HSBC 29 2,675.25 5.6 6 BNP Paribas 35 4,027.15 5.4 while Italian producer of plasma-derived
7 BNP Paribas 32 2,663.86 5.6 7 Morgan Stanley 24 3,736.94 5.1 therapies KEDRION (B1/B) got its deal across
8 Morgan Stanley 21 2,356.42 4.9 8 Credit Suisse 34 3,653.03 4.9 the line with a much lower coupon.
9 UniCredit 25 2,132.96 4.5 9 Citigroup 26 3,384.44 4.6 These issuers followed a Single B rated
10 Credit Suisse 27 1,951.83 4.1 10 HSBC 29 3,134.80 4.2 offering from UK holiday centre CENTER PARCS
Total 76 47,801.71 Total 89 73,949.10 (issue ratings: B–/B), the only sterling issue
Excluding equity-related debt. Excluding equity-related debt. of the week, on Wednesday.
Source: Refinitiv SDC code: B6 Source: Refinitiv SDC code: B06c High-yield bankers said the market was

46 International Financing Review May 1 2021

 STRUCTURED FINANCE

still wide open but that the amount of Proceeds from the bond will redeem the performing and reperforming loans, has
supply and variety of credits on offer mean company’s remaining Class B3 notes due 2022. come to market.
investors were being pickier on price. #ENTERû0ARCSûLANDEDûTHEûlRSTûLEGûOFûTHEûRElûINû DAIRE RESIDENTIAL, which is sponsored and
“You can get in trouble launching a deal
into this market – today you have to show
more price to investors,” said a banker. “It’s
not a demand issue but a price issue. Solid
issuers are going to do really well but other
credits may have to differentiate on price.”
Many of the borrowers were relatively
rare visitors to the public high-yield bond
market.
h)NVESTORûFATIGUEûSEEMEDûOBVIOUSû;LASTû
WEEK=ûASûTHEûDELUGEûOFûNEWû(9ûBONDSûMAYû
;HAVEûPREVENTED=ûTAKINGûTHEûAPPROPRIATEû
time to look at new entrants into the asset
class,” wrote Spread Research analysts.
Consolis had to put a fairly chunky yield
ONûITSûDEBUTûHIGH
YIELDûBONDûAûõMûlVE
September, when it placed a £250m bond.
Sole physical bookrunner Barclays (left,
B&D) was also global coordinator with HSBC.
STRUCTURED FINANCE
EMEA MBS
GOLDMAN BRINGS PAN-EUROPEAN CMBS
Goldman Sachs last week announced a CMBS
lNANCEDûBYû-ORGANû3TANLEYûISûSELLINGûTHEû
deal. Daire was also the selling entity in
Shamrock 2021-1 – another Irish RMBS
arranged by Morgan Stanley. Shamrock’s
pool mainly consisted of reperforming
loans. Its €290m of Class A notes were priced
at a 100bp discount margin in January.
Primrose securitises two portfolios that
previously backed the ERLS 2019 PL1 and
Grand Canal Securities 1 transactions.
Permanent TSB originated the mortgages in
ERLS 2019 while Irish Nationwide Building
Society and Springboard were the
originators for GCS1’s collateral.
The deal will comprise a €671.9m Class A
OFûTWOûLOANSûWHICHûCOVERûOFlCEûANDûLIGHTû tranche, which has 24.75% credit
year non-call two deal (B3/B–). Initial price industrial properties across Europe. enhancement. The structure also includes
talk was 6% area, and price talk went out at GOLDMAN SACHS BANK EUROPE originated the €56.5m of Class B, €41.3m of Class C, €30.4m
5.875% area (+/–0.125%) on Thursday. It then loans backing BERG FINANCE 2021, called Big of Class D, €30.4m of Class E, €13.1m of
priced at a yield-to-maturity of 5.75%. Mountain and Sirocco, between March and Class F and €10.9m of Class G notes.
0ROCEEDSûWILLûRElNANCEûAûTERMûLOAN April. The €148.3m Big Mountain loan is Start Mortgages and Mars Capital Finance
BNP Paribas was lead-left bookrunner and secured on 25 properties in France and the Ireland are administrators and responsible
global coordinator alongside Natixis, Nordea
(Nordic coordinator) and Societe Generale.
3TANDARDû0ROlLûALSOûHADûTOûPAYûUPû)Tû
LANDEDûITSûõMûlVE
YEARûNON
CALLûTWOûATû Finland and Germany. The 2% of collateral
6.25% on Friday, the tight end of price talk of
OFlCEûISûLIGHTûINDUSTRIAL
6.25%–6.5%. That deal was also a debut.
The private equity-owned company,
which provides sealing for car doors and
windows, held three days of investor calls
beginning on Tuesday via Morgan Stanley
(B&D) and Credit Suisse.
0ROCEEDSûFROMûTHEûDEALûWILLûRElNANCEûTHEû
company’s bank loans and unwind its cash
management facility, according to an
investor presentation.
.ETHERLANDSûMAINLYûOFlCESû4HEûõMû
3IROCCOûLOANûISûSECUREDûONûFOURûOFlCEû
buildings, located in Austria, the Netherlands,
THATûISûNON
After a slight gap in UK RMBS supply, FLEET
Ares is sponsor on the Sirocco loan and
Fortress on Big Mountain.
The CMBS includes a €160m Class A
tranche, €43.4m of Class B notes, €29.4m of
Class C notes, €36.5m of Class D notes and a
€26m Class E tranche.
Goldman Sachs is sole arranger, lead
manager and bookrunner on the transaction.
The Sirocco loan covers 56 unique tenants
and Big Mountain 238. The structure has an
for day-to-day servicing for the transaction.
UK BTL RMBS ENTERS PIPELINE
MORTGAGES has announced a new
securitisation of buy-to-let mortgages.
UK RMBS issuance was consistent through
THEûlRSTûQUARTERûBUTûACTIVITYûHASûDIMMEDû
since Tower Bridge Funding 2021-1 priced
on March 18.
On Friday, Fleet Mortgages announced
LONDON WALL MORTGAGE CAPITAL PLC SERIES FLEET
2021-01, the fourth issuance from the London
Wall programme.
-EANWHILEû+EDRIONûPRICEDûITSûlRSTûRATEDû €11.8m liquidity reserve. Citi is sole arranger and lead manager on
high-yield bond at 3.375%. the transaction. Class A, B and C notes are
The biopharmaceutical group announced MORGAN STANLEY BRINGS NEW offered while Z1, Z2, Z3 and S notes are
AûõMûlVE
YEARûNON
CALLûTWOûSECUREDû IRISH RMBS being retained. Class X notes are being
bond, which will be used to repay debt and priced on a call desk basis.
to fund cash on the company’s balance A Morgan Stanley-arranged Irish RMBS, Investors calls are taking place from May
sheet. The deal follows a €150m tender offer PRIMROSE RESIDENTIAL 2021-1, which securitises 4, with pricing expected as early as May 7.
for the company’s 3% July 2022s.
ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS
“There’s a lot to like about the outlook for
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
the global plasma product market and
Managing No of Total Share Managing No of Total Share
Kedrion over the medium to longer term,”
bank or group issues US$(m) (%) bank or group issues €(m) (%)
wrote CreditSights analysts. “Structural
1 BNP Paribas 11 2,673.79 13.9 1 BNP Paribas 6 1,415.38 13.5
growth, high barriers to entry and a lack of
2 Citigroup 7 1,951.13 10.1 2 Deutsche Bank 5 1,024.71 9.8
substitutability are key positives.”
3 Santander 5 1,646.92 8.5 3 Citigroup 3 931.13 8.9
Initial price thoughts went out on
4 Barclays 7 1,260.06 6.5 4 Santander 2 881.50 8.4
Wednesday in the high 3s. Global
5 Deutsche Bank 5 1,228.94 6.4 5 UniCredit 2 770.36 7.4
coordinators and physical bookrunners
6 Bank of America 5 1,219.37 6.3 6 Morgan Stanley 2 770.34 7.4
were BNP Paribas and JP Morgan.
7 SG 5 955.26 5.0 7 Bank of America 2 648.09 6.2
Rounding out the week’s Single B run,
8 UniCredit 2 930.97 4.8 8 SG 3 613.56 5.9
"ROOKlELD
OWNEDû#ENTERû0ARCSûLANDEDûTHEûONLYû
9 Morgan Stanley 2 921.60 4.8 9 Commerzbank 2 452.71 4.3
sterling issue in the market last week: a £255m six-
10 Natixis 5 708.69 3.7 10 Coop Rabobank 2 445.06 4.2
YEARûNON
CALLûTWOû#LASSû"ûlXED
RATEûSECUREDûBOND
Total 35 19,267.01 Total 20 10,478.20
The company priced the deal at 4.5% on
Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, credit-linked notes (Euro, foreign, global and
Wednesday, following price talk of 4.75% domestics) and excludes CDOs. domestics) and excludes CDOs.
area and IPTs of 5% area. Source: Refinitiv SDC code: B16n Source: Refinitiv SDC code: B16g

International Financing Review May 1 2021 47

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 30/4/2021
Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type
DLLAA 2021–1 US$375 1.30 0.36 Credit Suisse/Barclays/Citigroup Aaa/NR/AAA ABS
DLLAA 2021–1 US$350 2.89 0.67 Credit Suisse/Barclays/Citigroup Aaa/NR/AAA ABS
DLLAA 2021–1 US$80.876 4.19 1.03 Credit Suisse/Barclays/Citigroup Aaa/NR/AAA ABS
FRESPC K–F109 US$898.033 9.55 30 day SOFR av+24bp Citigroup/Wells Fargo NR/NR/NR CMBS
FS RIALTO 2021–FL2 US$414.978 – USL+122bp Goldman Sachs/Wells Fargo Aaa/NR/NR CMBS
FS RIALTO 2021–FL2 US$79.277 – USL+155bp Goldman Sachs/Wells Fargo NR/NR/NR CMBS
FS RIALTO 2021–FL2 US$47.957 – USL+190bp Goldman Sachs/Wells Fargo NR/NR/NR CMBS
FS RIALTO 2021–FL2 US$48.936 – USL+205bp Goldman Sachs/Wells Fargo NR/NR/NR CMBS
FS RIALTO 2021–FL2 US$40.128 – USL+280bp Goldman Sachs/Wells Fargo NR/NR/NR CMBS
FS RIALTO 2021–FL2 US$15.659 – USL+345bp Goldman Sachs/Wells Fargo NR/NR/NR CMBS
MMAF Equipment Finance 2021–A US$156 0.35 – BofA/JP Morgan P–1/NR/F1+ ABS
MMAF Equipment Finance 2021–A US$278.970 1.24 0.30 BofA/JP Morgan Aaa/NR/AAA ABS
MMAF Equipment Finance 2021–A US$278.970 2.83 0.56 BofA/JP Morgan Aaa/NR/AAA ABS
MMAF Equipment Finance 2021–A US$68 4.33 1.04 BofA/JP Morgan Aaa/NR/AAA ABS
MMAF Equipment Finance 2021–A US$67.290 4.36 1.19 BofA/JP Morgan Aaa/NR/AAA ABS
MFT 2021–1 US$148.391 0.81 0.60 Goldman Sachs/JP Morgan/Baird NR/NR/NR ABS
MFT 2021–1 US$53.664 2.13 1.00 Goldman Sachs/JP Morgan/Baird NR/NR/NR ABS
MFT 2021–1 US$21.683 2.98 1.41 Goldman Sachs/JP Morgan/Baird NR/NR/NR ABS
MFT 2021–1 US$22.360 3.89 2.47 Goldman Sachs/JP Morgan/Baird NR/NR/NR ABS
MSC 2021–L5 US$9.572 3.01 0.78 Morgan Stanley/Barclays/Keybanc NR/AAA/AAA CMBS
MSC 2021–L5 US$65.759 4.94 1.51 Morgan Stanley/Barclays/Keybanc NR/AAA/AAA CMBS
MSC 2021–L5 US$22.632 7.52 1.99 Morgan Stanley/Barclays/Keybanc NR/AAA/AAA CMBS
MSC 2021–L5 US$155 9.55 2.32 Morgan Stanley/Barclays/Keybanc NR/AAA/AAA CMBS
MSC 2021–L5 US$294.497 9.93 2.38 Morgan Stanley/Barclays/Keybanc NR/AAA/AAA CMBS
MSC 2021–L5 US$68.432 9.93 2.61 Morgan Stanley/Barclays/Keybanc NR/AAA/AAA CMBS
MSC 2021–L5 US$38.127 9.93 2.75 Morgan Stanley/Barclays/Keybanc NR/AA–/AA– CMBS
MSC 2021–L5 US$34.216 9.97 3.16 Morgan Stanley/Barclays/Keybanc NR/A–/A CMBS
MSC 2021–L5 US$21.507 10.01 3.97 Morgan Stanley/Barclays/Keybanc NR/BBB/BBB CMBS
MSC 2021–L5 US$16.619 10.01 4.91 Morgan Stanley/Barclays/Keybanc NR/BBB–/BBB– CMBS
NEWZ 2021–1 US$532.500 – 1mUSL+75bp BofA/Goldman Sachs Aaa/NR/NR RMBS
NEWZ 2021–1 US$67.500 – 1mUSL+90bp BofA/Goldman Sachs Aa2/NR/NR RMBS
NEWZ 2021–1 US$54.375 – 1mUSL+105bp BofA/Goldman Sachs A2/NR/NR RMBS
NEWZ 2021–1 US$31.875 – 1mUSL+140bp BofA/Goldman Sachs Baa2/NR/NR RMBS
NEWZ 2021–1 US$24.375 – 1mUSL+325bp BofA/Goldman Sachs B2/NR/NR RMBS
NEWZ 2021–1 US$39.275 – 1mUSL+525bp BofA/Goldman Sachs NR/NR/NR RMBS
OCTL 2021–1 US$243.825 1.50 0.93 Credit Suisse/JP Morgan NR/AA/NR ABS
OCTL 2021–1 US$23.469 3.68 1.53 Credit Suisse/JP Morgan NR/A/NR ABS
OCTL 2021–1 US$22.455 4.11 2.23 Credit Suisse/JP Morgan NR/BBB/NR ABS
ONDK 2021–1 US$200.842 3.03 1.59 Truist/Jefferies NR/NR/NR ABS

“This CA-CIB deal is fully in accordance Jordan. “To the extent that we have
EMEA ABS with the classic SRT theology, which is SUFlCIENTûNAMESûINûAûGLOBALûPORTFOLIOûITûISûANû
supporting a business line that is growing, easier transaction to take to our credit
CRÉDIT AG INKS LARGEST SRT TRADE, ploughing capital back into that business,” committee whereas a single country
COVERING EM LINES WITH IFC
CREDIT AGRICOLE CIB and the International
Finance Corporation have agreed a synthetic
risk transfer trade for a US$4bn equivalent
reference portfolio mainly made up of
EMERGINGûMARKETûTRADEûlNANCEûASSETS
The SRT trade, in which IFC is providing a
US$182m guarantee on the reference
portfolio, is the largest executed by CA-CIB. It
ISûALSOû)&#SûLARGESTûEVERûSTRUCTUREDûlNANCEû
deal, double the size of a 2018 SRT between
the two parties (when IFC provided US$85m
of credit risk protection on a US$2bn Credit
SAIDû8AVIERû*ORDANûAûCHIEFûINVESTMENTûOFlCERû
at IFC. “It is very important for the impact
story that we are telling.”
SRT investment is one strand of the IFC’s
strategy for supporting EM countries through
the Covid-19 crisis. The World Bank sister
organisation has also been providing liquidity
THROUGHûTRADEûlNANCEûANDûWORKINGûCAPITALû
facilities, as well as investing in healthcare
ANDûCERTAINûBANKûlNANCINGûACTIVITIES
But its status as an SRT investor precedes
the pandemic, with the IFC already
established in providing protection for
global EM portfolios such as the CA-CIB deal
transaction is very concentrated risk.
“We like global portfolios as they are
DIVERSIlEDûBYûNATUREûBUTûASûWEûWANTûTOûHELPû
EM banks directly we also want to construct
a global portfolio of single country deals –
which helps us address the issue of risk
concentration in the latter.”
CRR RAISES BAR FOR SIZE
Regulation drove the increase in deal size
from the 2018 trade, due to changes in the
European framework in the intervening years.
“We increased the deal size because the
CRR regulatory formula changed in 2019
Agricole portfolio). The regulatory capital and pursuing single country EM portfolios. ANDûMADEûTHESEûDEALSûLESSûEFlCIENTvûSAIDû
RELIEFûWILLûALLOWû#REDITû!GRICOLEûTOûSIGNIlCANTLYû h!SûWITHûANYûINVESTORûDIVERSIlCATIONûANDû Jean-Marc Pinaud, head of structuring at
EXPANDûITSû%-ûTRADEûlNANCEûACTIVITY granularity are very important criteria,” said Credit Agricole.

48 International Financing Review May 1 2021

 STRUCTURED FINANCE

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 30/4/2021 (CONTINUED)

Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type
ONDK 2021–1 US$49.421 3.03 2.28 Truist/Jefferies NR/NR/NR ABS
ONDK 2021–1 US$29.210 3.03 2.97 Truist/Jefferies NR/NR/NR ABS
ONDK 2021–1 US$20.527 3.03 4.94 Truist/Jefferies NR/NR/NR ABS
OPTN 2021–B US$340.153 2.99 1.47 Jefferies/Goldman Sachs/Natixis NR/NR/NR ABS
OPTN 2021–B US$71.611 2.99 1.96 Jefferies/Goldman Sachs/Natixis NR/NR/NR ABS
OPTN 2021–B US$52.430 2.99 3.65 Jefferies/Goldman Sachs/Natixis NR/NR/NR ABS
OPTN 2021–B US$35.806 2.99 5.41 Jefferies/Goldman Sachs/Natixis NR/NR/NR ABS
Progetto Quinto S.R.L. €316.5 2.60 1mE+60bp BNP Paribas NR/NR/NR ABS
PRPM 2021–3 US$296.151 1.95 1.87 Goldman Sachs/Nomura NR/NR/NR RMBS
PRPM 2021–3 US$43.233 2.98 3.72 Goldman Sachs/Nomura NR/NR/NR RMBS
RLGH Trust 2021–TROT U$199.074 1.91 USL+80bp Goldman Sachs/Morgan Stanley NR/AAA/NR CMBS
RLGH Trust 2021–TROT US$25.886 1.91 USL+120bp Goldman Sachs/Morgan Stanley NR/AA–/NR CMBS
RLGH Trust 2021–TROT US$19.415 1.91 USL+135bp Goldman Sachs/Morgan Stanley NR/A–/NR CMBS
RLGH Trust 2021–TROT US$23.815 1.91 – Goldman Sachs/Morgan Stanley NR/BBB–/NR CMBS
RLGH Trust 2021–TROT US$40.816 1.91 – Goldman Sachs/Morgan Stanley NR/BBB/NR CMBS
RLGH Trust 2021–TROT US$25.352 1.91 – Goldman Sachs/Morgan Stanley NR/BB/NR CMBS
RLGH Trust 2021–TROT US$2.431 1.91 – Goldman Sachs/Morgan Stanley NR/NR/NR CMBS
RLGH Trust 2021–TROT US$15 1.91 – Goldman Sachs/Morgan Stanley NR/NR/NR CMBS
SBA TOWER TRUST C$1,165 5.50 1.63 Barclays/Citigroup/Deutsche Bank/Mizuho NR/NR/NR ABS
TTAN 2021–MHC US$136 2.84 1mUSL+85bp JP Morgan/Goldman Sachs Aaa/NR/NR CMBS
TTAN 2021–MHC US$22 2.84 1mUSL+110bp JP Morgan/Goldman Sachs Aa3/NR/NR CMBS
TTAN 2021–MHC US$20.4 2.84 1mUSL+135bp JP Morgan/Goldman Sachs A3/NR/NR CMBS
TTAN 2021–MHC US$24.7 2.84 1mUSL+175bp JP Morgan/Goldman Sachs Baa3/NR/NR CMBS
TTAN 2021–MHC US$45.7 2.84 1mUSL+240bp JP Morgan/Goldman Sachs Ba3/NR/NR CMBS
TTAN 2021–MHC US$54.8 2.84 1mUSL+290bp JP Morgan/Goldman Sachs B3/NR/NR CMBS
TTAN 2021–MHC US$30.98 2.84 1mUSL+420bp JP Morgan/Goldman Sachs NR/NR/NR CMBS
VISIO 2021–1R US$120.86 2.61 1.280 Credit Suisse/Barclays/Nomura NR/AAA/NR RMBS
VISIO 2021–1R US$12.643 2.61 1.484 Credit Suisse/Barclays/Nomura NR/AA/NR RMBS
VISIO 2021–1R US$19.098 2.61 1.688 Credit Suisse/Barclays/Nomura NR/A/NR RMBS
VISIO 2021–1R US$7.161 5.04 2.727 Credit Suisse/Barclays/Nomura NR/BBB+/NR RMBS
WHLS 2021–1 US$254.42 1.54 1mL+28bp Wells Fargo/BNP Paribas NR/NR/NR ABS
WFCM 2021–FCMT US$221.3 3.00 USL+120bp Wells Fargo/Barclays NR/NR/AAA CMBS
WFCM 2021–FCMT US$38.7 3.00 USL+185bp Wells Fargo/Barclays NR/NR/AAA CMBS
WFCM 2021–FCMT US$26.5 3.00 USL+240bp Wells Fargo/Barclays NR/NR/A– CMBS
WFCM 2021–FCMT US$37.9 3.00 USL+350bp Wells Fargo/Barclays NR/NR/BBB– CMBS
WFCM 2021–FCMT US$61.6 3.00 USL+450bp Wells Fargo/Barclays NR/NR/BB– CMBS
WFCM 2021–FCMT US$46.2 3.00 USL+590bp Wells Fargo/Barclays NR/NR/B– CMBS
WFCM 2021–FCMT US$22.8 3.00 – Wells Fargo/Barclays NR/NR/NR CMBS

“Increasing the size was a means of
COMPENSATINGûFORûTHEûLOSSûOFûEFlCIENCYûOFû
regulatory capital relief. Furthermore, IFC
was also strongly supportive of increasing
THEûSIZEûTOûHELPû%-ûlNANCINGSûANTICIPATEDû
rebound.”
IFC has provided its guarantee on a
mezzanine tranche in the transaction, with
#REDITû!GRICOLEûKEEPINGûEXPOSUREûTOûAûlRSTû
loss and senior tranche.
“The senior tranche, which is unhedged,
has a very low economic risk and regulatory
risk – although the regulatory risk is a lot
higher because of the CRR formula, which
CREATESûAûûmOORûTOûTHEûRISKûWEIGHTûOFûAû
securitisation tranche,” said Pinaud. “Even if
we evaluate the economic risk as lower than
that”.
As a Triple A rated institution, IFC can
provide protection through off balance
sheet guarantees, without the need for cash
collateral arrangements such as those used
in derivatives that often provide protection
in synthetic securitisations.
“As the IFC enjoys a very strong credit
rating, we do not need cash collateral from
THEMûANDûTHEIRûSIGNATUREûISûSUFlCIENTûTOû
obtain capital relief and approval from our
risk department too,” said Pinaud.
“With this transaction we can hedge some
exposures that would not be hedgeable with
a standard CDS. We agreed to do it with a
lNANCIALûGUARANTEEûBECAUSEûITûISûAûBUYûANDû
hold transaction that we don’t intend to
renegotiate or unwind. There is no need for
a secondary market on these guarantees and
WRITINGûITûASûAûlNANCIALûGUARANTEEûISûLOGICALû
and avoids the mark-to-market that would
be involved with a derivative”.
Ultimately, the IFC’s ambition is to bring
more private investors into the market,
either to work alongside, or cede ground too.
“We see our role as investing in reference
portfolios that involve EM exposures but
might still be a bit too innovative for private
investors,” said Jordan. “Eventually we
would love it if other investors did these
deals as well, either together with us or on
their own.
“We are ultimately supposed to price risk
commercially and if we are taking exposure
that is priced right we can create a wedge
that will eventually open investors’ eyes up
to act on similar opportunities.”
PROGETTO PRICES DEBUT, DB RETAINS
CHUNKY ITALIAN CONSUMER
BANCA PROGETTO landed the €316.5m Class A
tranche of PROGETTO QUINTO, its debut ABS of
Italian salary and pension assignment and
payment delegation loans, at 60bp over one-
month Euribor on Tuesday.

International Financing Review May 1 2021 49

 Progetto’s debut print came 20bp inside
the last (non-NPL) Italian ABS to price, ViVi
Banca’s Eridiano II – an ABS on the same
collateral as Progetto Quinto. The €308.4m
of Class A notes in that deal were priced at
80bp over one-month Euribor in October.
Co-arrangers Banca Progetto and BNP
Paribas (also lead manager) started
marketing the Progetto Quinto at initial
price thoughts of 70bp area before cutting to
guidance of 65bp area as the order book
grew from more than €475m to more than
€715m. Demand continued to build, with
the most recent update showing more than
€1.1bn of orders. The Class A notes were
then priced at 60bp over one-month Euribor.
During marketing there was some
talk of the illiquidity of Italian ABS
product, with one investor saying he
HOPEDûFORûAûPREMIUMûTOûREmECTûTHATû
But ultimately that concern did little
to dim demand, as orders grew
through bookbuilding – hitting more
THANûõBNûBYûlNALûUPDATE!HEADûOFûTHEû
trade one investor had hoped for a
premium on the offering, given the
general illiquidity of Italian ABS product.
But the deal was structured for
Eurosystem eligibility, which helped buoy
demand for the trade, as well as simple,
transparent and standardised
securitisation treatment.
The deal also included a €53.071m
unrated J tranche, which is being retained.
Another Italian ABS was priced on
Friday, although the large deal was fully
retained. ROCKY 2021-1 included €3.95bn of
Class A notes, carrying a 0.50% coupon,
and Class B notes with a 1% coupon.
DEUTSCHE BANK SPA was seller/servicer on the
deal, which has been structured with Class
A notes for Eurosystem eligibility. The
vehicle’s collateral is Italian consumer
loans including personal loans, new and
used auto loans and other loans.
Deutsche Bank was sole arranger on the
deal.
SECURITISATIONS – ALL EUROPEAN RMBS
BOOKRUNNERS: 1/1/2021 TO DATE
Managing No of Total Share
bank or group issues €(m)
1 Citigroup 4 1,026.03 15.0
2 BNP Paribas 5 742.08 10.9
3 Barclays 4 677.80
4 NAB 3 455.57
5 Coop Rabobank UA 2 445.06
6 Natixis 3 423.72
7 Morgan Stanley 1 396.94
8 Lloyds Bank 2 359.72
9 Santander 2 338.84
10 ABN AMRO 2 322.61
Total 16 6,829.11
Including Euro, foreign, global and domestics, excluding CDOs
Source: Refinitiv SDC code: B10a
50
EMEA CLO
NIBC PRICES ESG CLO AS TRIPLE A
WANDER IN 80bp–85bp RANGE
NIBC BANK printed its €458.95m NORTH
WESTERLY VII ESG CLOon Friday, pricing its
€248m of Class A notes at an 84bp discount
margin.
The deal, priced through Deutsche Bank,
continued new issue Triple A notes’ dance
within an 80bp–85bp range.
On Thursday, CVC Credit Partners Investment
Management priced a €456.55m new issue CLO,
landing the upsized vehicle’s senior notes at the
TIGHTERûENDûOFûRECENTûDEALûmOW
CVC Cordatus Loan Fund XX split its
Triple A tranches between a €152.8m Class
A-N and €124m Class A-L, both with 81bp
discount margins. That was in line with the
€244m of Class A-1 notes in Carlyle Euro
CLO 2021-1 – which printed on April 23.
But it came inside the recent Triple A
tranches of Avoca CLO XXIII and Dryden 88
Euro CLO 2020, which priced at 84bp and
85bp DMs respectively. Like CVC Cordatus
Loan Fund XX, the Avoca and Dryden
vehicles used a Class A notes/A loan split for
their Triple A liabilities.
Morgan Stanley was sole arranger of the
CVC transaction.
Some widening in Triple A spreads has
kicked into the new issue market in recent
weeks, with deals moving from tights that
WENTûTOûBPûANDûUNDERûDURINGûTHEûlRSTû
quarter. But the trend has not been uniform.
Given Triple As were printing at 105bp as
last year ended, levels are still attractive
enough to keep CLO managers printing for
the foreseeable future – both for new issues
ANDûTHEûRESETRElNANCINGûSPLURGEûTHATûSHOWSû
no sign of abating.
“I’ve never known anything like it, the
LEGALûSTUFFûISûlNEûWHENûYOUûHAVEûONEûORûTWOû
DEALSûONûBUTûWHENûYOUûHAVEûlVEûITSûJUSTûNOTû
sustainable,” said one CLO manager.
ALL INTL ISSUERS (EXCLUDING SELF-FUNDED)
BOOKRUNNERS: 1/1/2021 TO DATE
Managing No of
(%) bank or group issues
1 Credit Suisse 63
2 Barclays 45
9.9 3 Bank of America 37
6.7 4 Citigroup 35
6.5 5 Goldman Sachs 41
6.2 6 JP Morgan 29
5.8 7 Wells Fargo 30
5.3 8 Deutsche Bank 37
5.0 9 Nomura 26
4.7 10 Morgan Stanley 20
Total 204
Includes securitisations, PFI bonds and credit-linked notes. Excludes US
global ABS/MBS, CDOs and self funded issues.
Source: Refinitiv
International Financing Review May 1 2021
“But for the next four to 10 weeks,
managers, including me, will keep bringing
RElSûANDûRESETSûUNTILûTHEREûARENTûANYûLEFTûTOû
bring, then more stuff will come off non-call
and the cycle will start again. I don’t think
there is any respite until Triple As get to a
level where it doesn’t make any sense.”
On Tuesday, Blackstone Ireland printed a
reset of its Crosthwaite Park CLO, with its
€149m of A-1A notes and a €151m A-1L
tranche pricing at 85bp DMs. Its
reinvestment end period ends on September
15 2025 and its non-call on November 18
2022. SOUND POINT CLO C-MOA also closed a reset
of SOUND POINT EURO CLO I FUNDING, with
€150.4m of Class A notes and a €159.6m A-L
tranche pricing with 82bp DMs. Citi
arranged the reset, which leaves the CLO
with a reinvestment period lasting until
November 25 2025 and a non-call lasting
until November 25 2022.
North Westerly VII ESG CLO was
structured to be compliant with best
practices for ESG-focused investments. Its
reinvestment period ends on November 15
2025 and its non-call on November 15 2022.
CVC Cordatus Loan Fund XX has a non-call
period ending on December 10 2022 and a
reinvestment ending on December 22 2025.
Carlyle had a reinvestment period ending on
October 15 2025 and a non-call ending on
October 15 2022.
Dryden’s non-call ends on December 11
2022 and its reinvestment on January 20
2026. Avoca’s non-call ends on December 1
2022 and its reinvestment on October 15
2025.
US MBS
CMBS FUNDS AIG’S INDUSTRIAL
PURCHASE
Goldman Sachs and Morgan Stanley last
Wednesday sold a commercial mortgage
bond secured by a US$229.3m loan they
extended to an American International
Group unit to buy a portfolio of mostly
industrial properties from Equus Capital
Total Share
Partners.
US$(m) (%)
The transaction, RLGH TRUST 2021-TROT, will
13,758.56 12.6
lNANCEûTHEûDEBTûPORTIONûOFûTHEû53Mû
10,987.58 10.1
price tag for the 53 business parks in North
9,183.28 8.4
Carolina. The rest of the purchase comes
7,640.40 7.0
from US$132.9m in cash from the AIG and
7,506.65 6.9
Equus venture. After the deal closes, AIG
7,484.80 6.9
Global Real Estate Investment Corporation
7,288.32 6.7
will have a 95% ownership of the properties
6,480.69 5.9
and Equus will retain a 5% stake.
4,651.20 4.3
The US$119.1m Triple A rated, with a
4,261.04 3.9
weighted-average life of 1.91 years, cleared
109,162.57
at 80bp over one-month Libor, which was
wider than the 69bp on a same rated and
SDC code: J10d similar maturity note in the US$387m

logistics CMBS, COMM MORTGAGE TRUST 2021-LBA
on March 3. The wider spread likely
REmECTEDûTHEûCONCENTRATIONûRISKûTHATûALLûTHEû
properties are located in a single state.
The industrial sector has been the hottest
area of the commercial real estate market
SINCEûTHEûPANDEMICû0RIVATEûEQUITYûlRMSûLIKEû
Blackstone and KKR have accelerated their
footprint in this space, often using the CMBS
MARKETûTOûlNANCEûTHEIRûPURCHASESûOFû
warehouses and distribution centres, whose
values have appreciated as online retailers
Francisco”. Some of the biggest tenants
include Bank of America, Morgan Stanley
and Goldman Sachs.
4HEûOFlCEûCOMPLEXûISûOWNEDûBYû(UDSONû
Waterfront Associates, in which Vornado
Realty has a 70% stake. A trust for Trump
owns 30%. Trump’s interest in the joint
venture is “passive” and has no control on
the management and operations of the
property, the ratings agency said.
Of the money raised from the SFO 2021-
555 deal, US$532.7m will be used to
STRUCTURED FINANCE
other home services. Authority Brands’
competitors Neighborly, ServiceMaster
Brands and Servpro have achieved strong
demand for their WBS as investors are
upbeat about their revenue growth amid the
pandemic.
0RIVATEûEQUITYûlRMSûHAVEûENTEREDûINTOû
home services industry, drawn by its
potential growth rate. Apax Partners
acquired Authority Brands in September
2018 for an undisclosed sum.
That same year, Harvest Partners acquired
HAVEûBENElTEDûFROMûMOREûCONSUMERû
demand.
Although prices on industrial and logistics
assets have risen sharply, most market
participants see demand for them
continuing to persist given the structural
change in the retail industry.
“Warehouse is more than fairly priced,
but I think it will stay well bid especially
distribution centres. And it will dovetail
with the weakness in retail, but a great part
of retail has gone to e-commerce versus
brick and mortar and that trend will
continue,” said Paul Varunok, senior vice-
president and portfolio manager at Franklin
NOTCHûOFlCEû Neighborly deal, a buyside source said. That
RElNANCEûANûEXISTINGûMORTGAGEûWHILEû
US$616m of equity will be turned over to
Hudson Waterfront, which has owned the
property since 2007 and has spent
US$164.8m in capital expenditures since
2016.
This offering follows solid demand for a
US$600m single-asset, single-borrower
#-"3ûISSUEûLINKEDûTOûANOTHERû#LASSû!ûOFlCEû
tower in San Francisco earlier this month,
DROP Mortgage Trust 2021-FILE, even
THOUGHûTHEûCITYSûOFlCEûMARKETûHASûSUFFEREDû
because of staff working from home.
There has been adequate appetite for
3!3"ûSUPPLYûBACKEDûBYûTOP
The Dwyer Group before rebranding it as
Neighborly, which made its ABS debut in
February with a US$800m deal, NBLY 2021-1.
Blackstone purchased ServPro in 2019,
while Roark Capital bought ServiceMaster
the following year.
For the 12 months ended December 2020,
Authority Brands recorded system-wide
sales of US$1.3bn. Its compounded annual
growth rate was running at 6.5% over the
past 10 years, Kroll said in a pre-sale report.
Early price talk on Authority Brands’ “A-2”
note was in the high-3% yield area, which is
higher than the 3.60% on the comparable
Templeton.
Interestingly, the majority of properties in
the RLGH 2021-TROT deal that are labelled
hmEXûINDUSTRIALvûBYû$"23û-ORNINGSTARûHAVEû
nothing to do with e-commerce, with 44.3%
OFûTHEIRûSPACEûSERVINGûASûOFlCESû/NEûOFûTHEû
biggest tenants is World Overcomers
Christian Church, which is one of the
biggest congregations in North Carolina
with about 15,000 members.
h4HEûELEVATEDûPROPORTIONûOFûOFlCEûSPACEû
across the portfolio compares less favorably
with other recently analysed industrial
portfolios. DBRS Morningstar does not
consider this as a risk as the subject
COLLATERALûISûmEXûINûTYPEûANDûNATURALLYû
TOWERSûGIVENûSOMEûCONlDENCEûINûTHEû
property itself and/or the strength of the
sponsor, Bank of America analysts said.
“Buildings with upgraded technology,
better facilities and stronger sponsorship
(‘haves’) will likely perform materially
better than will older buildings or those that
are owned by less well-heeled sponsors
(‘have nots’),” Bank of America analysts
wrote in a recent research note.
US ABS
AUTHORITY BRANDS PLANS WHOLE
BUSINESS ABS DEBUT
PARTLYûREmECTSûSOMEûLIQUIDITYûPREMIUMûFORû
the relatively small size of the Authority
deal, the source said.
Meanwhile, the Columbia, Maryland-
based franchiser has stepped up its
expansion under Apax through a series of
acquisitions. On February 19, it announced
it will buy pet waste removal provider
DoodyCalls for an undisclosed amount.
Year-to-date, US whole business
securitisation issuance has reached
US$3.05bn, compared with the total of
US$4.43bn for the full year of 2020, IFR data
show.
SBA BRINGS FIRST CELL TOWER
CONSISTSûOFûAûGREATERûOFlCEûBUILDûOUTvûTHEû
ratings agency said in a pre-sale report.
Still, occupancy in these properties has
been resilient during the Covid crisis. Their
collective occupancy rate was 96% in 2020,
down from 98% in 2019, but up from 92% in
2018, according to DBRS.
OFFICE CMBS LINKED TO TRUMP COMES
TO MARKET
JP Morgan is preparing a US$1.2bn
commercial mortgage bond backed by a San
&RANCISCOûOFlCEûPROPERTYûOWNEDûBYûAû
venture with ties to former US President
Donald Trump.
SFO COMMERCIAL MORTGAGE TRUST 2021-555 is
SECUREDûBYûAûSEVEN
Home service franchise business AUTHORITY
BRANDS last Monday hired Bank of America and
Guggenheim Securities to prepare its inaugural
whole business securitisation, following
well-received debt offerings from larger
rivals such as NEIGHBORLY, SERVICEMASTER
BRANDS and SERVPRO.
The deal, AB ISSUER (AUTHB) 2021-1, features a
US$425m seven-year “A-2” note and a
US$50m “A-1” class. The A-1 class will not be
offered. Both tranches are expected to be
rated BBB– by Kroll.
Proceeds from the bond sale, which is
expected to be announced this week, will be
used to repay existing debt and to fund certain
transaction accounts, according to the leads.
ABS IN 2021
SBA COMMUNICATIONS CORPORATION last Thursday
PRICEDûTHEûlRSTûCELLûTOWERûSECURITISATIONûOFû
the year, with demand for these telecoms
assets expected to grow as wireless service
providers look to advance their 5G
networks.
Investors are showing eagerness to get
their hands on the US$1.165bn single-class
issue, SBA TOWER TRUST 2021-1 after the cell
tower company on Tuesday hired Barclays,
Citigroup, Deutsche Bank and Mizuho as the
lead underwriters, market participants said.
The note with a weighted-average life of
5.5 years, which is expected to be rated A2
by Moody’s and A by Fitch, fetched a spread
YEARûmOATING
RATEû There is also a US$5m advance funding OFûBPûOVERûlVE
YEARû4REASURIESûFORûAûû
MORTGAGEûONûTHREEûOFlCEûBUILDINGSûINûTHEû facility connected to the offering, Kroll said. coupon.
CITYSûlNANCIALûDISTRICTûû#ALIFORNIAû3TREETû The privately-held company is a “We’ve always liked the space and this is a
Campus, which Fitch ranks as “one of the franchiser of 10 brands that offer home nice sized deal.,” a senior portfolio manager
HIGHESTûQUALITYûOFlCEûBUILDINGSûINû3ANû cleaning, pest control, air conditioning and said.

International Financing Review May 1 2021 51

 Most of the money raised will be used to
repay two notes totalling US$800m that
were issued in 2017, while the rest of the
proceeds will be earmarked for transaction
expenses and general corporate purposes,
Fitch analysts said in a pre-sale report.
SBA’s latest deal is backed by 9,939
towers, which represents about 30.3% of its
total portfolio, the ratings agency said.
The Boca Raton, Florida-based company
was previously in the ABS market last July
when it issued two deals totalling
US$1.35bn. They accounted for about half of
ASIA-PACIFIC MBS
FIRSTMAC SMASHES RMBS RECORDS
FIRSTMAC smashed several records with
the enlarged A$2bn (US$1.56bn) FIRSTMAC
MORTGAGE TRUST NO 4 SERIES 2021-2 prime
RMBS sale on Friday, which underscored
investor faith in Australia’s economic
recovery and housing market in
particular.
Nationally, house prices surged 5.7% in
The A$60m Class A3 notes, with a 4.9-
year WAL and 5% support, printed below
both initial 115bp–120bp area and revised
110bp–115bp area guidance at 105bp over
one-month BBSW.
The remaining A$45m Class B,
A$24m Class C, A$12m Class D, A$9m
Class E and A$10m Class F notes were
all retained.
Non-banks have dominated RMBS
OVERûTHEûPASTûûMONTHSûWITHûJUSTûlVEû
bank originators – HSBC, AMP Bank,
Members Equity Bank, Defence Bank,
the US$2.5bn cell tower ABS issuance in
2020, IFR data show. The SBATOW 2020-1 note
with a 5.5-year WAL priced at a spread of
BPûOVERûlVE
YEARû4REASURIESûFORûAûû losses from enforced foreclosure sales of
coupon.
SBA’s latest offering comes after Verizon,
AT&T and T-Mobile were the top bidders at
the record-shattering US$81.1bn C-band
spectrum auction that was completed in
February. These wireless providers were
scrambling for spectrum licences so they
can capture the best and fastest 5G network.
“With WSPs (wireless services providers)
continuing to densify 4G networks and roll
out 5G networks to handle increased
lNANCIALûCRISISûLOWûFORûSENIORû
demands for data capacity, there is a need
for additional towers,” Fitch analysts said.
The 5G push adds to existing demand for
cell towers from increased data usage by
people who have been working from home
since the pandemic.
This ABS sector’s rosy prospect is fuelling
investor enthusiasm for the SBA transaction.
“Towers are a great asset and crucial to
Verizon, AT&T and T-Mobile. We have
invested in this space historically a number
of times and we will probably get involved
with this transaction,” a second senior
portfolio manager said.
On April 12, Verizon signed deals with
SBA and rival Crown Castle to accelerate the
deployment of C-band equipment in
preparation for its launch of 5G network.
US CELL TOWER OPERATORS
SITES (OWNED & MANAGED)
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0 year WAL and 8% support priced below
Vertical American Diamond Crown SBA
Bridge Tower Castle
Source: Company data
52
THEûlRSTûQUARTERûTHEûSTEEPESTûQUARTERLYûRISEû
in almost 18 years, for an annual increase
of 10%, thereby negating the risk of capital
Banks have not needed to issue RMBS or
defaulted properties within mortgage
pools.
The additional comfort that rising house
prices provide, alongside a lack of bank
RMBS supply, has boosted demand,
enabling the Brisbane-based originator to
top its previous 2017 record of A$1.7bn in
2017 as the biggest non-bank RMBS ever in
Australia.
Not only that, Firstmac paid the
tightest margin for any non-bank’s senior
PRIMEû2-"3ûNOTEûSINCEûTHEûlNANCIALûCRISISû
at 73bp over one-month BBSW, a
whopping 62bp inside Firstmac’s
previous prime RMBS last October,
the A$1bn equivalent dual-currency
Firstmac 2020-3.
ANZ was arranger and joint lead
manager with NAB, Standard Chartered and
SMBC Nikko for the groundbreaking
transaction, which had 29 investors
participating from Australia, Japan, South-
East Asia, Europe and the US.
&IRSTMACSûCHIEFûlNANCIALûOFlCERû*AMESû
Austin said the rare combination of high
volume and tight pricing meant this was a
very strong print which highlighted
INVESTORûCONlDENCEûINû&IRSTMACSûLOANû
book and programme.
“As well as commitment from our
regular investors, it has been phenomenal
to see that we have attracted many new
investors, some of whom have not
previously bought any non-bank RMBS at
all. Firstmac’s proven track record as a
strong sustainable business has been the
main contributor to this milestone deal,”
Austin said.
The A$1.7bn Class A1 notes with a 2.9-
year weighted average life and 15% credit
support priced below initial 75bp area and
within revised 70bp–75bp area guidance at
three-month BBSW plus 73bp.
The A$140m Class A2 notes with a 3.9-
95bp–100bp area initial price talk and at
the tight end of revised one-month plus
90bp–95bp area guidance.
International Financing Review May 1 2021
and Bendigo and Adelaide Bank – accessing
the market since the Covid-19 pandemic
hit Australia.
senior bonds since the introduction of the
Reserve Bank of Australia’s Term Funding
Facility in March 2020, which provides
them with up to A$200bn of funding for
THREEûYEARSûATûAûlXEDûRATEûOFûJUSTûû
(formerly 0.25%).
Issuance is set to pick up, however, with
the TFF expiring on June 30 and given the
attractive pricing levels on offer, as BEN
Bank showed on April 14 when it achieved
AûNEWûPOST
bank RMBS spreads of 60bp for the
enlarged A$1bn issue of Torrens Series
2021-1 Trust RMBS.
BLACKWATTLE PRINTS FIRST RMBS
Non-bank lender SINTEX CONSOLIDATED,
trading as Loanworks Lending, sold an
enlarged A$300m debut prime RMBS
offering on Friday, BLACKWATTLE SERIES RMBS
TRUST 2021-1, but appeared to pay up for the
privilege as the senior notes were priced
wide of initial guidance.
Westpac was arranger and sole lead
manager for the securitisation, which had
an indicative size of A$200m.
The A$255m of Class A1 notes with a
2.7-year WAL and 15% credit supported
came wide of 90bp area price talk at one-
month BBSW plus 95bp.
In comparison, regular non-bank issuer
Pepper paid an 83bp margin for the Class
A1 notes of its non-conforming PRS 29
RMBS two days earlier that have a shorter
WAL of 2.3 years
The Blackwattle A$18.9m of Class
A2, A$10.65m of Class B, A$6.15m of
Class C, A$4.05m of Class D, A$2.4m
of Class E and A$1.5m of Class F notes,
with respective WALs of 2.7, 4.6, 4.6,
4.6, 4.6 and 4.1 years, were priced in line
with guidance at 120bp, 160bp, 205bp,
300bp, 560bp and 700bp over one-month
BBSW.
Credit support for the Class A2 to F notes
is 8.7%, 5.15%, 3.1%, 1.75%, 0.95% and
0.45%, respectively.
 STRUCTURED FINANCE

The transaction was completed by Westpac was arranger and joint lead These spreads are 57bp, 65bp, 60bp, 80bp,
A$1.35m of retained Class G notes. manager with CBA, Macquarie and NAB for 80bp, 65bp and 70bp wide of the latest
the regular issuer of prime and non- comparable tranches, underlining the huge
AFG BUILDS FOR 10TH PRIME RMBS conforming mortgage-backed spread compression in the RMBS market over
securitisations. the last six months, though the PRS28 A1L and
AUSTRALIAN FINANCE GROUP is set to launch the The A$562.5m of Class A1 and A$90m of A2 notes did have longer WALs of 3.0 years.
indicative A$500m prime RMBS, AFG 2021–1, Class A2 notes, both with 2.3-year WALs, and
having released initial guidance for the six respective 25% and 13% credit support, priced
top tranches. 83bp and 110bp wide of one-month BBSW. ASIA-PACIFIC ABS
NAB is arranger and joint lead manager The A$45m of Class B, A$21m of Class C
with ANZ. and A$12.75m of Class D notes, all with CNH MARKETS A$300m ABS
For the A$450m of Class A1 notes 4.0-year WALs, priced at one-month BBSW
with a 2.5-year WAL and 10% credit plus 150bp, 195bp and 295bp. CNH INDUSTRIAL CAPITAL AUSTRALIA has released
support, price talk is one-month BBSW The A$7.5m of Class E and A$3.75m of guidance for the senior note of its indicative
plus 75bp area. Class F notes, with 3.5 and 2.4-year WALs, A$300m (US$233m) ABS offering, CNH INDUSTRIAL
Guidance is 110bp area, 145bp–150bp, priced 555bp and 680bp over one-month CAPITAL AUSTRALIA RECEIVABLES TRUST SERIES 2021-1,
190bp–200bp, 280bp–290bp and 525bp BBSW. which is expected to launch and price this
area over one-month BBSW for the A$29m Pricing was not disclosed for the week via arranger and sole lead manager ANZ.
of Class A2, A$7m of Class B, A$5.8m of A$3.75m of Class G1 note while the Price talk is one-month BBSW plus 70bp
Class C, A$3.6m of Class D and A$2.1m of A$3.75m of Class G2 notes were retained. area for the A$268.5m Class A notes with a
Class E notes, all of which have 4.4-year Pepper Group issued three non- 1.8-year WAL and 10.5% credit support.
WALs. conforming RMBS in 2020, the last of The A$7.5m Class B, A$6m Class C and
The transaction is completed by A$2.5m which was the A$750m no-grow PRS28 on A$18m Seller notes will all be retained.
of Class F notes. November 10. The lender priced its 12th ABS transaction
Australian Finance Group sold its ninth The pricing margins for the PRS28 Class in August, the A$435m CNH Industrial
and biggest prime RMBS offering last July, A1L, A2, B, C, D, E and F notes were 140bp, Capital Australia Receivables Trust Series
the A$700m AFG 2020-1 TRUST. 175bp, 210bp, 275bp, 375bp, 620bp and 2020-1, backed by agricultural equipment
750bp. loans.
LA TROBE SETS GUIDANCE
US ASSET-BACKED SECURITIES GLOBAL CDOs
LA TROBE has released guidance for an BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
indicative A$750m non-conforming RMBS Managing No of Total Share Managing No of Total Share
offering, LFGMT 2021-1, expected to launch bank or group issues US$(m) (%) bank or group issues US$(m) (%)
and price this week. 1 Credit Suisse 34 8,960.27 9.4 1 Barclays 9 3,277.28 22.7
Macquarie is arranger and joint lead 2 Wells Fargo 34 8,200.35 8.6 2 Wells Fargo 4 1,932.74 13.4
manager with Citigroup, CBA, HSBC, NAB, 3 JP Morgan 30 8,112.93 8.5 3 Citigroup 3 1,533.44 10.6
Natixis and Westpac for the transaction which 4 Barclays 27 7,864.21 8.2 4 Jefferies 5 1,530.29 10.6
may be increased up to a maximum 5 Bank of America 25 6,813.67 7.1 5 Goldman Sachs 3 1,184.94 8.2
A$1.25bn. 6 Deutsche Bank 34 6,379.51 6.7 6 Deutsche Bank 3 1,055.63 7.3
For the A$562.5m of Class A1 and 7 Citigroup 24 5,324.72 5.6 7 Morgan Stanley 3 693.58 4.8
A$106.5m of Class A2 notes, both with 2.5- 8 RBC 22 5,092.54 5.3 8 JP Morgan 2 637.71 4.4
year WALs, guidance is one-month BBSW 9 MUFG 16 4,697.74 4.9 9 Bank of America 1 495.00 3.4
plus 83bp area and 105bp–110bp. 10 Mizuho 13 4,051.55 4.2 10 Credit Suisse 1 453.89 3.1
For the A$52.5m of Class B, A$6m of Total 152 95,759.07 Total 36 14,460.15
Class C, A$12m of Class D, A$6.75m of Excludes MBS. Including Euro, foreign, global, US domestics.
Class E and A$1.5m of Class F notes, with Source: Refinitiv SDC code: F14 Source: Refinitiv SDC code: B12
respective WALs of 4.3, 4.3, 4.3, 4.1 and 1.4-
years, price talk is 145bp–150bp,
GLOBAL STRUCTURED FINANCE IN US$ STRUCTURED FINANCE – ALL INTL ISSUERS
190bp–195bp, 285bp–290bp, 545bp–550bp
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
and 670bp–675bp over one-month BBSW.
Managing No of Total Share Managing No of Total Share
The transaction is completed by A$1.5m
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
of Equity 1 notes and A$0.75m of Equity 2
1 Credit Suisse 94 37,568.36 12.9 1 Credit Suisse 64 13,893.45 11.9
notes.
2 JP Morgan 71 33,287.25 11.5 2 Barclays 48 11,778.91 10.1
The Blackstone-backed non-bank lender
3 Wells Fargo 79 31,825.67 11.0 3 Bank of America 37 9,183.28 7.8
sold its 11th non-conforming RMBS last
4 Citigroup 69 26,849.72 9.3 4 Goldman Sachs 44 8,674.11 7.4
September, the A$500m no-grow LTFCMT
5 Bank of America 66 24,102.91 8.3 5 Wells Fargo 32 7,904.40 6.8
2020-S1.
6 Goldman Sachs 79 21,678.64 7.5 6 Citigroup 36 7,832.47 6.7
7 Morgan Stanley 44 20,907.82 7.2 7 JP Morgan 29 7,484.80 6.4
PEPPER ENJOYS SPREAD BENEFITS
8 Barclays 61 15,967.62 5.5 8 Deutsche Bank 38 6,991.20 6.0
9 Deutsche Bank 51 11,121.26 3.8 9 Morgan Stanley 22 4,799.20 4.1
Non-bank lender PEPPER GROUP priced the
10 Nomura 40 10,847.57 3.7 10 Nomura 26 4,651.20 4.0
no-grow A$750m non-conforming RMBS
Total 435 290,163.90 Total 218 117,045.03
transaction on Wednesday, PEPPER PRS29, at
Including securitisations (Euro, foreign, global and domestics, excluding Includes securitisations, PFI bonds, self-funded issues and credit-linked
levels well inside its previous clearing CDOs) and PFI bonds. notes. Excludes US global ABS/MBS and CDOs.
rates. Source: Refinitiv SDC code: B16b Source: Refinitiv SDC code: J10c

International Financing Review May 1 2021 53

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 30/4/2021
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

SSAR
US DOLLARS
Apr 27 2021 FMS US$500m May 6 2024 0.375 99.737 MS-2/T+11.7 0.463

Apr 27 2021 Italy US$2bn May 6 2024 0.875 99.673 MS+50/T+63.475 0.986

Apr 27 2021 Italy US$1.5bn May 6 2051 3.875 98.897 MS+195/T+167.65 3.938

EUROS
Apr 26 2021 ESM €2bn Oct 15 2031 0.01 99.802 MS-10/B+26.7 0.029

Apr 26 2021 Lower Saxony €500m incr Sep 8 2026 0.01 101.771 - -
(€1.5bn)
Apr 27 2021 EIB digital bond €100m Apr 28 2023 0 101.213 MS-12/B+11.2 -
Apr 27 2021 KfW €1bn incr Sep 17 2030 0 100.583 MS-11.5/B+23.25 -0.062
(€4bn)
Apr 28 2021 Andorra (Principality Of) €500m May 6 2031 1.25 99.935 MS+115/B+149.1 1.257
sustainability

Apr 28 2021 Quebec €2.5bn May 5 2031 0.25 99.754 MS+16/B+50.2 0.275

Apr 29 2021 Bpifrance green €1.25bn May 25 2028 0 100.099 OAT+18 -0.014

Apr 29 2021 Bremen €500m May 6 2041 0.5 99.225 MS+3/B+46.5 0.541
Apr 29 2021 SGP green €2bn May 10 2046 0.875 98.514 OATs+20 0.942

STERLING
Apr 27 2021 UK DMO £6bn Jul 31 2031 1.25 98.469 G+1.5 1.312
Apr 28 2021 Dexia CL £500m Mar 25 2026 SONIA+100 103.588 SONIA +26 -

Apr 29 2021 CoE £175m incr Dec 15 2025 0.375 99.162 G+28 0.559
(£575m)
SWISS FRANCS
Apr 26 2021 Walliser KB/BCV SFr200m Apr 18 2031 0.1 100.28 MS+7/ 0.072
SARON+14.2/
Eidg+38.1
Apr 27 2021 KB Thurgau SFr250m May 21 2032 0.125 100.082 MS +5/ 0.117
SARON+12.2/
Eidg+37
Apr 27 2021 Nidwaldner KB SFr100m May 27 2031 0.05 100.125 MS+3 0.038
NON CORE
Apr 27 2021 MuniFin A$30m incr Aug 1 2029 2.9 0 ASW+25, -
(A$50m) ACGB+30.5
Apr 28 2021 AIIB sustainable A$500m May 6 2026 1 99.988 ASW+22, 1.003
ACGB+30.85
Apr 28 2021 City of Orebro SKr400m Apr 30 2024 3mS+100 103.199 - -
Apr 28 2021 Uppsala SKr400m May 10 2028 0.643 100 - 0.643
Apr 29 2021 Kommunekredit NKr3bn Feb 10 2027 3mN+150 108.674 3mN flat -
Apr 30 2021 Huddinge SKr200m May 4 2026 3mS+75 103.809 - -
CORPORATES
US DOLLARS
Apr 26 2021 NBN US$750m May 5 2026 1.45 99.799 T+67 1.496

Apr 26 2021 NBN US$1.25bn May 5 2031 2.625 99.948 T+107 2.631

Apr 26 2021 Whirlpool sustainable US$300m May 15 2031 2.4 99.822 T+85 2.42

Apr 27 2021 Indiana Michigan Power US$450m May 1 2051 3.25 99.222 T+100 3.291
Apr 28 2021 Coca-Cola US$700m Mar 5 2051 3 98.137 T+80 3.096

54 International Financing Review May 1 2021

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS-2 area, MS-2 - US$525m Aaa/AAA/- DB/NatWest/RBC -

area
MS+60 area, MS+55 0 US$4.8bn Baa3/BBB/BBB-/ Citi/DB/MS Eur 65.9%, Amers 11.7%, MEA 8.6%,
area BBBH UK 8.1%, Asia 5.7%. CB/OI 42.7%, Bks
27.4%, FM 27.4%, HF 2.4%, Ins/PF 0.1%,
MS+200 area, 5 US$6.2bn Baa3/BBB/BBB-/ Citi/DB/MS Eur 28.7%, Asia 24.8%, UK 23.7%, Amer
MS+200 area BBBH 22%, MEA 0.8%. FM 44.6%, Ins/PF
35.1%, CB/OI 8.9%, Bks 7.66%, HF 3.8%.

MS-8 area 0 €12bn Aa1/AAA/AAA DZ/GS/Nomura EZ 56%, UK/Switz 25%, Asia 9%, RoEur
7%, MEA 3%. Bks 49%, FM 38%, CB/
Govt/SWF 13%.
- - - NR/NR/AAA TD -

- - - Aaa/AAA/AAA GS/Santan/SG -
- - - Aaa/AAA/-/Scope BofA/DB -
AAA
MS+125/+130, - €2.3bn, 150acs -/BBB/BBB+ CA-CIB/Santan Iberia 21.9%, Fr 20.1%, Ger/Aus 15.6%,
MS+117 (+/-2 WPIR) UK 13.36%, Andorra 9.4%, Switz 7.26%,
It 5.3%, Other 7.08%. FM 61.48%, Bks
33.3%, Ins/PF 4.74%, Other 0.48%.
MS+17 area, MS+17 - €6.6bn Aa2/AA-/AA- BNPP/DB/HSBC/JPM/Natx Fr 23%, UK 22%, Ger/Aus 17%, Benelux 14%,
(+/-1) Amers 6%, RoEur 5%, Nordics 4%, MEA
3.5%, Switz 3%, Asia 2.5%. AM 39%, Bks/
Tsy 31%, CB/OI 21%, Ins/PF 8%, Other 1%.
OAT+21 area, - €4.3bn, 144acs Aa2/NR/AA CA-CIB/BNPP/HSBC/JPM/SG Ger/Aust/Switz 25%, Fr 21%, Asia 16%,
OAT+19 (+/-1 WPIR) S.Eur 9%, Benelux 8%, Nordics 7%, UK
6%, Other 8%. CB/OI 38%, AM 32%,
Bks/Tsy 28%, Other 2%.
MS+3 area 2 - NR/NR/AAA BLB/GS/Natx/NordLB/Uni -
OATs +23 area 0 €4.7bn, 120acs Aa2/NR/AA CA-CIB/DB/GS/HSBC/Natx/Nomura Fr 38%, Ger/Aus/Switz 34%, S.Eur 13%,
UK 7%, Nordics 5%, Benelux 1%, RoEur
1%, RoW 1%. AM 61%, Bks 20%, Ins/PF
13%, CB/OI 4%, Other 2%.

G+1.5/+1.75 0.75 £69.4bn, 174acs Aa3/AA/AA- Barc/GS/Lloyds/NatWest/RBC UK 89%, Other 11%.

SONIA +26 area, - £450m Aa3/AA/AA- Barc/HSBC/NatWest -
SONIA +26 area
- - £310 Aa1/AAA/AA+ HSBC/RBC -

MS+7/+9, MS+7 - - NR/-/-/ZKB AA- BKB/CS/ZKB

MS+5 area - - NR/-/-/ZKB AA+ ThurKB -

MS+1/+4 - - NR/-/-/ZKB AA+ Raiff/NidKB -

- - - Aa1/AA+ TD -

ASW+21/+23 - - Aaa/AAA/AAA DB/JPM/Nomura/WBC -

- - - - DNB/SEB -
- - - NR/AA+ Danske -
- - - Aaa/AAA Nordea -
- - - - SEB -

T+90 area, T+70 - - A1/-/AA BofA/GS/JPM/MS/Citi -

(+/-3)
T+130 area, T+110 - - A1/-/AA BofA/GS/JPM/MS/Citi -
(+/-3)
T+115 area, T+90 -5 US$2.5bn Baa1/BBB/BBB BNPP/BofA/JPM/WFS Citigroup/ -
(+/-5) Mizuho Securities
T+120/+125 -3 US$2.3bn A3/A-/A- Citi/Miz/RBC/Truist -
T+100 area, T+80 1 US$2.5bn A1/A+ BofA/Citi/DB/JPM/MS -
(the #)

International Financing Review May 1 2021 55

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 30/4/2021 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Apr 28 2021 Coca-Cola US$750m May 5 2041 2.875 99.97 T+70 2.877

Apr 28 2021 Coca-Cola US$2bn Jan 5 2032 2.25 99.917 T+65 2.259

Apr 28 2021 Omnicom US$800m Aug 1 2031 2.6 99.823 T+97 2.62

Apr 28 2021 Safehold US$400m Jun 15 2031 2.8 99.127 T+125 2.9

Apr 28 2021 Waste Management US$475m Jun 1 2041 2.95 99.488 T+80 2.984

Apr 28 2021 Waste Management US$475m Jun 1 2029 2 99.992 T+70 2.001

Apr 29 2021 Toledo Edison US$150m May 1 2028 2.65 99.703 T+137.5 2.697
EUROS
Apr 26 2021 Atrium European Real Estate €350m Nov 4 2026 3.625 98.197 MS+424.7/B+459.3 4
green hybrid
Apr 26 2021 BPPEH €550m May 4 2028 1 99.933 MS+115/B+151.3 1.01

Apr 28 2021 Coca-Cola €500m May 6 2036 0.95 99.639 MS+60/B+97.6 0.976

Apr 28 2021 Coca-Cola €500m May 6 2030 0.4 99.657 MS+40/B+75.5 0.439

Apr 28 2021 Orange hybrid €500m Perpetual (May 2029) 1.375 99.437 MS+148.6/ 1.45
B+184.7/OAT+158
Apr 28 2021 Toyota Motor Credit Corp €1bn Nov 5 2027 0.125 99.548 MS+35/B+70.5 0.195

STERLING
Apr 28 2021 NATS (En Route) PLC £300m Sep 30 2033 1.75 99.619 G+85 1.777

Apr 28 2021 NATS (En Route) PLC £450m Mar 31 2031 1.375 99.597 G+85 1.433

Apr 29 2021 PA Housing sustainable £300m May 7 2036 2 99.665 G+87 2.026

NON CORE
Apr 27 2021 Transurban Queensland A$300m incr Aug 5 2031 3.25 99.504 ASW+160 3.307
(A$0m)
Apr 28 2021 Endeavour Energy A$350m Oct 3 2028 2.579 100 ASW+127 2.579
Apr 27 2021 Color Group hybrid NKr300m Perpetual (Dec 2024) 3mN+1200 101 - -

Apr 26 2021 Atrium Ljungberg SKr700m Apr 29 2026 3mS+100 100 3mS+100 -
Apr 26 2021 Atrium Ljungberg SKr300m Apr 29 2027 1.62 100 - 1.62
Apr 27 2021 Nivika Fastigheter green SKr500m Sep 6 2024 3mS+450 100 3mS+450 -
Apr 28 2021 SAAB AB SKr100m incr May 5 2028 3mS+235 100 3mS+235 -
(SKr350m)
Apr 28 2021 SAAB AB SKr250m May 5 2028 3mS+235 100 3mS+235 -
Apr 28 2021 Willhem SKr200m May 4 2026 0.872 100 - 0.872
Apr 28 2021 Willhem SKr450m May 4 2026 3mS+55 100 3mS+55 -
FINANCIALS
US DOLLARS
Apr 27 2021 Citigroup US$500m Jan 5 2025 (Jan 2024) SOFR+66.9 100 SOFR+66.9 -
Apr 27 2021 Citigroup US$3bn Jan 5 2032 (Jan 2031) 2.561 100 T+95 2.561
Apr 27 2021 Citigroup US$2bn Jan 5 2025 (Jan 2024) 0.981 100 T+63 0.981
Apr 29 2021 Texas Cap Bancshares T2 US$375m Jan 5 2025 (Jan 2024) 4 100 T+315 4
EUROS
Apr 28 2021 Eurobank SA €500m May 5 2027 (May 2026) 2 99.413 MS+239.8 2.125

Apr 26 2021 Goldman Sachs €1.5bn Apr 30 2024 (Apr 2023) 3mE+100 100.913 3mE+55 -
Apr 26 2021 Goldman Sachs €2bn Apr 30 2024 (Apr 2023) 0.01 99.99 MS+50/B+70.9 0.015
Apr 27 2021 LBBW SNP €500m May 7 2029 0.375 99.264 MS+52/B+88.6 0.469

Apr 27 2021 Morgan Stanley €1.75bn Oct 29 2027 (Oct 2026) 0.406 100 MS+65/B+99.6 0.406
SWISS FRANCS
Apr 27 2021 Goldman Sachs SFr450m May 11 2028 0.4 100.103 MS+62/EIdg+84.3 0.385

56 International Financing Review May 1 2021

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

T+90 area, T+70 2 US$2.1bn A1/A+ BofA/Citi/DB/JPM/MS -

(the #)
T+85 area, T+65 2 US$4.4bn A1/A+ BofA/Citi/DB/JPM/MS -
(the #)
T+120 area, T+100 -3 US$2.3bn Baa1/BBB+ Barc/Citi/WFS/BofA/BNPP/DB/ -
(+/-3) HSBC
T+150 area - US$1.3bn Baa1/NR/BBB+ BofA/GS/JPM Truist Securities/ -
Barclays/Mizuho/Morgan Stanley/
T+100 area, T+85 0 US$2.35bn Baa1/A-/BBB+ Citi/GS/WFS -
(+/-5)
T+95 area, T+75 1 US$2.4bn Baa1/A-/BBB+ Citi/GS/WFS -
(+/-5)
T+150 area - - A2/BBB/BBB+ MS -

4.5% area, - €1.3bn Ba2/NR/BB+ GS/HSBC/Citi/DB/ING/RBI -

4.125%/4.25%
MS+145 area, 0 €1bn NR/BBB BofA/MS/BoC/BNPP/RBC/Santan -
MS+120 area
MS+80 area, MS+65 7 €1.5bn A1/A+ BofA/Citi/JPM -
area
MS+65 area, MS+45 2 €1.5bn A1/A+ BofA/Citi/JPM -
area
1.875% area, 1.5% 0 €1.9bn Baa3/BBB- BNPP/NatWest/CMZ/HSBC/RBC/ -
(+/-5 WPIR), 1.45% Barc
MS+60 area, MS+40 5 €2.8bn A1/A+ BNPP/CA-CIB/HSBC/Santan/Uni -
(+/-3 WPIR)

G+105/+110, - £1.2bn A2/A+ Barc/BNPP/MUFG/NatWest -

G+85/+90
G+100 area, - £1.1bn A2/A+ Barc/BNPP/MUFG/NatWest -
G+85/+90
G+110 area, - £1bn A3/A Barc/Lloyds -
G+90/+95

ASW+170 area - - -/BBB CBA/ANZ/SMBC Nikko -

ASW+130 area - - Baa1 ANZ/CBA/BoC -

100.00-101.00, - NKr300m - Arctic/DNB
101.00
- - - - SEB/Swed -
- - - - SEB/Swed -
- - - - Danske/Nordea -
- - - - Danske -

- - - - Danske/Swed -
- - - - SEB -
- - - - SEB -

SOFR+Equiv - US$1.5bn A3/BBB+/A Citi -

T+120 area 1 US$11.5bn A3/BBB+/A Citi -
T+80 area 1 US$7bn A3/BBB+/A Citi -
4.375%/4.5%, 4% - US$700m Baa3/BB GS/JPM -

2.375% area, 2.125% - €1.1bn Caa1/B/CCC BofA/BNPP/GS/HSBC/UBS Gr/Cyp 34%, UK 28%, It 15%, Fr 15%, Ger/
yld Aus/Swiss 6%, Other 3%. AM 44%, Bks
22%, HF 19%, OI/Agcy 10%, Other 5%.
3mE+70 area 6 - A2/BBB+/A GS -
MS+70 area 6 - A2/BBB+/A GS -
MS+70/+75, MS+55 2 €1.3bn A2/NR/A- DZ/Erste/LBBW/Santan/SG/Uni -
(+/-3)
MS+80/+85 8 - A1/BBB+/A MS/MUFG -

MS+65 area, 6 100acs A2/BBB+/A CMZ/CS/GS Switz 91.61%, Other 8.39%. AM 53.75%,
MS+62/+65 PB 18.245%, Ins 12.5%, Tsy 10%, PF
5.51%.

International Financing Review May 1 2021 57

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 30/4/2021 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Apr 28 2021 Clientis SFr150m May 19 2028 0.25 100.347 MS+40/Eidg+67.2/ 0.2
SARON+46.8
NON CORE
Apr 29 2021 Bank of Queensland A$225m May 6 2026 1.4 99.885 ASW+63 1.424
Apr 29 2021 Bank of Queensland A$425m May 6 2026 3mBBSW+63 100 3mBBSW+63 -
Apr 29 2021 ASB Bank NZ$500m May 4 2026 1.646 100 MS+60 1.646
COVERED BONDS
EUROS
Apr 26 2021 Bayerische Landesbank €500m Apr 30 2031 0.05 99.95 MS-4/B+29.6 0.055
Girozentrale

Apr 27 2021 MunHyp €500m May 2 2036 0.25 98.904 MS-3/B+29.7 0.325

Apr 27 2021 Nationwide BS €500m May 5 2041 0.5 98.643 MS+10/B+54.4 0.572

Apr 28 2021 CM-CIC €1.25bn May 6 2031 0.01 99.115 MS-1/B+33.2 0.099
Apr 28 2021 Natixis Pfandbriefbank €250m May 5 2031 0.125 0 MS+1/B+35.2 -
NON CORE
Apr 26 2021 Landshypotek SKr200m incr Jun 15 2026 3mS+100 104.65 - -
(SKr2bn)
HIGH YIELD
US DOLLARS
Apr 23 2021 Ahead DB Borrower US$400m May 1 2028 (May 2024) 6.625 100 T+539 6.625

Apr 23 2021 Beacon Roofing Supply US$350m May 15 2029 (May 2024) 4.125 100 T+276 4.125
Apr 23 2021 Encino Acquisition Partners US$700m May 1 2028 (May 2024) 8.5 100 T+725 8.5
Holdings
Apr 23 2021 StoneMor Partners US$400m May 15 2029 (May 2024) 8.5 100 - 8.5
Apr 23 2021 Wheel Pros US$365m May 15 2029 (May 2024) 6.5 100 T+510 6.5
Apr 26 2021 Helios Software Holdings US$350m May 1 2028 (May 2024) 4.625 100 T+337 4.625
Apr 27 2021 American Builders & US$400m Nov 15 2029 (Nov 2024) 3.875 100 - 3.875
Contractors Supply
Apr 27 2021 NOVA Chemicals US$575m May 15 2029 (May 2024) 4.25 100 T+281 4.25
Apr 27 2021 Prime Healthcare Services US$225m Nov 1 2025 (Nov 2022) 7.25 106.25 T+505 5.22

Apr 29 2021 Carriage Services US$400m May 15 2029 (May 2024) 4.25 100 T+276 4.25
Apr 29 2021 CD&R Smokey Buyer US$75m incr Jul 15 2025 (Jul 2022) 6.75 106.75 - 4.945
(US$700m)
Apr 29 2021 CSC Holdings (Altice) US$1.5bn Nov 15 2031 (Nov 2026) 4.5 100 T+286 4.5
Apr 29 2021 CSC Holdings (Altice) US$500m Nov 15 2031 (Nov 2026) 5 100 T+336 5
Apr 29 2021 Dana Holding US$400m Sep 1 2030 (May 2026) 4.25 100 T+260 4.25

Apr 29 2021 Independence Energy Group US$500m May 1 2026 (May 2023) 7.25 100 T+638 7.25

Apr 29 2021 SFL US$150m May 12 2026 7.25 100 - 7.25

EUROS
Apr 23 2021 HSE Finance Sarl €380m Oct 15 2026 (May 2023) 5.625 100 B+625 5.625

Apr 23 2021 HSE Finance Sarl €250m Oct 15 2026 (May 2022) E+575 99.5 - -

Apr 27 2021 BK LC Lux Finco 1 rl SA €430m Apr 30 2029 (Apr 2024) 5.25 100 B+567 5.25

Apr 27 2021 Rexel SLB €300m Jun 15 2028 (Jun 2024) 2.125 100 B+261 2.125

Apr 28 2021 ZF Friedrichshafen green €500m May 6 2027 2 100 MS+219.3/B+254.6 2

Apr 29 2021 Consolis €300m May 1 2026 (May 2023) 5.75 100 B+631 5.75

Apr 29 2021 Kedrion SpA €410m May 15 2026 (May 2023) 3.375 100 B+393 3.375

Apr 30 2021 Standard Profil Automotive €275m Apr 30 2026 (Apr 2023) 6.25 100 B+683 6.25
STERLING
Apr 28 2021 CPUK £255m Aug 28 2027 (Aug 2023) 4.5 100 G+398 4.5

58 International Financing Review May 1 2021

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+40/+45, - 34acs NR/-/-/ZKB A-/ KBBL/ZKB Switz 100%. PF 37.1%, Bks 30%, AM
MS+40/42 fedafin A- 26.3%, Ins 6%.

ASW+68 area - - A3/BBB+/A- ANZ/NAB/UBS/WBC -

3mBBSW+68 area - - A3/BBB+/A- ANZ/NAB/UBS/WBC -
MS+55/+60 - - A1/AA-/A+ CBA -

MS+1 area,MS-3 -1 €2.2bn, 70acs Aaa BLB/BNPP/ING/Natx/Santan Ger 71%, Aus/Switz 11%, Asia 8%, Fr 4%,
(+/-1) It 2%, Benelux 2%, Other 2%. Bks 43%,
CB/OI 30%, AM 21%, Ins 6%.
MS+2 area, MS-2 0 €1.1bn, 44acs Aaa Barc/BLB/CMZ/DZ/NordLB Ger 90.7%, Switz 4.5%, It 3.2%, RoEur
(+/-1) 1.6%. Bks 36.6%, Ins/PF 32%, CB 16.2%,
AM/FM 15.2%.
MS+15 area -1 €2.3bn NR/AAA/AAA ABN/BNPP/NatWest/UBS Ger/Aus 70%, UK/Ire 11%, Fr 10%, Nordics
4%, Switz 3%, Other 2%. FM 45%, Bks/
PB 28%, Ins/PF 23%, CB/OI 4%.
MS+3 area - €1.7bn Aaa/AAA/AAA Barc/CIC/Danske/SG -
MS+4 area - €625m Aaa Natx/NordLB/Uni -

- - - NR/AAA Danske -

6.75% area - - Caa1/CCC+ RBC/DB/Barc/KKR/MQB/CS/ -

Regions/TD/PNC
4.25% area - - B2/B- BofA/Citi/WFS -
8.5% area - - B3/B/B Citi/BofA/Scotia/CIBC/Key/RBC/ -
WFS/FITB/Truist/PNC/TD
8.25%/8.50% - - B3/CCC Jeff -
6.75%/7%, 6.625% - - Caa2/CCC DB/Jeff/CS/KKR/UBS/WFS -
4.5%/4.75% - - B2/B CS STAN -
4% area - - B1/B+ BNPP/RBC/BofA -

4.375% area, 4.25% - - Ba3/BB- HSBC/Barc/MS/PNC/RBC/Scotia/TD -

106%/106.25%, - - B2/B-/B Barc/BBVA/Key -
106.25%
4.25%/4.5% - - B2/B+ BofA/Regions -
106.5%/106.75% - - B2/B/N/A UBS/FITB/BMO/BNPP/ING/Miz/ -
Natx
Mid 4s, 4.5% area - - Ba3/BB JPM/GS/BofA/Barc/Scotia -
Low 5s, 5% area - - B3/B+ JPM/GS/BofA/Barc/Scotia -
4.25%/4.5% - - B2/BB/BB+ Citi/Barc/BMO/BofA/CS/GS/JPM/ -
Miz/RBC
6.5%/6.75% - - - JPM/WFS/BofA/RBC/KKR/Key/ -
FITB/Truist/Miz
7.25%/7.375%, - - - DNB/Arctic/Pareto
7.25% cpn

5.75% area, - - - DB/BNPP/HSBC/ING/Jeff/UBS/Uni -

5.625%@par
E+575/+600 @ - - - DB/BNPP/HSBC/ING/Jeff/UBS/Uni -
99.50
5.5%/5.75%, - - B2/B/B+ GS/CS/Citi/HSBC/CMZ/CA-CIB -
5.375% area
Mid 2%s, - €2bn Ba3/BB- CA-CIB/HSBC/SG/Barc/WFS -
2.25%/2.5%, 2.125%
2.25%/2.375%, - €2.5bn Ba1/BB+ BNPP/ING/LBBW/Uni -
2%/2.125%, 2%
6% area, 5.875% - - B3/B- BNPP/Natx/Nordea/SG/CA-CIB -
(+/-12.5)
High 3%s, 3.5% - - B1/B BNPP/JPM/CA-CIB/BcaIMI/Medio/ -
area, 3.375% Natx/Uni
6.25%/6.5% - - B3/B- MS/CS -

5% area, 4.75%
area, 4.5%
- - NR/B-/B Barc/HSBC -

International Financing Review May 1 2021 59

GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (30/4/2021)
Moody’s S&P Fitch Moody’s S&P Fitch
Sovereign 1 2 3 4 5 6 Sovereign 1 2 3 4 5 6
Abu Dhabi Aa2 – AA AA+ AA AA+ Laos Caa2 n Caa1 – – CCC B–
Albania B1 Ba2 B+ BB – – Latvia A3 Aaa A AAA A– AAA
Andorra – – BBB AAA BBB+ A+ Lebanon C Ca D CC RD CCC
Angola Caa1 B3 B– n B– CCC B Lesotho – – – – Bn B+
Argentina Ca Caa1 CCC+ CCC+ CCC B– Liechtenstein – Aaa AAA AAA – –
Armenia Ba3 Ba1 – – B+ BB– Lithuania A2 Aaa A AAA A AAA
Aruba – – BBB BBB BB BB+ Luxembourg Aaa Aaa AAA AAA AAA AAA
Australia Aaa Aaa AAA AAA AAA n AAA Macau Aa3 Aa2 – – AA AAA
Austria Aa1 Aaa AA+ AAA AA+ AAA Macedonia (FYR) – – BB– BB BB+ n BBB–
Azerbaijan Ba2 p Ba2 BB+ BB+ BB+ n BB+ Malaysia A3 A1 A– n A+ BBB+ A
Bahamas Ba2 n Baa1 BB+n BB – – Maldives B3 B1 – – CCC B–
Bahrain B2 n d Ba3 B+ p BB– B+ BB+ Mali Caa1 B1 – – – –
Bangladesh Ba3 Ba2 BB– BB– BB– BB– Malta A2 Aaa A– p AAA A+ AAA
Barbados Caa1 B2 B– B– – – Mauritius Baa2 n A1 – – – –
Belarus B3 B3 Bn B Bn B Mexico Baa1 n A2 BBB+ n A+ BBB– BBB+
Belgium Aa3 Aaa AA AAA AA– n AAA Moldova B3 B2 – – – –
Belize Caa3 n Caa1 CC n CC – – Mongolia B3 B1 B B+ B B+
Benin B1 Ba1 B+ B B+ B+ Montenegro B1 p Ba1 B AAA – –
Bermuda A2 Aa3 A+ AA+ – – Montserrat – – BBB– BBB– – –
Bolivia B2 B1 B+ B+ B B Morocco Ba1 Baa2 BB+ BBB BB+ BB+
Bosnia Herzegovina B3 B3 B BB– – – Mozambique Caa2 Caa1 CCC+ CCC+ CCC B–
Botswana A3** n d A1 d BBB+n A – – Namibia Ba2 n Baa3 – – BB n BB+
Brazil Ba2 Ba1 BB– BB+ BB– n BB Netherlands Aaa Aaa AAA AAA AAA AAA
Bulgaria Baa1 A1 BBB A BBB p A– New Zealand Aaa Aaa AA+ AAA AA AAA
Cambodia B2 B1 – – – – Nicaragua B3 B2 B– B– B– n B–
Cameroon B2 Ba2 Bn BBB– Bn B+ Nigeria B2 n B1 B B+ B B
Canada Aaa Aaa AAA AAA AA+ AAA Norway Aaa Aaa AAA AAA AAA AAA
Cape Verde – – B– B+ B– B Oman Ba3 n Baa1 B+ BB– BB– n B+
Cayman Islands Aa3 Aa2 – – – – Pakistan B3 B2 B– B– B– B–
Chile A1 n Aa2 A AA– A– A+ Panama Baa2 A2 BBB AAA BBB– n A
China A1 Aa1 A+ A+ A+ A+ Papua New Guinea B2 n B1 B– n d B– – –
Colombia Baa2 n A3 BBB– BBB+ BBB– n BBB Paraguay Ba1 Baa3 BB BB+ BB+ BB+
Congo (DR) Caa1 B2 CCC+ CCC+ – – Peru A3 A1 BBB+ A BBB+ n A–
Congo (Rep) Caa2 B2 CCC+ BBB– CCC B+ Philippines Baa2 A3 BBB+ A– BBB BBB+
Cook Islands – – B+ AAA – – Poland A2 Aa3 A– A A– AA–
Costa Rica B2 n Ba3 B– n BB– Bn B+ Portugal Baa3 p Aa3 BBB AAA BBB AA
Cote d’Ivoire Ba3 Baa3 – – B+ p BB– Qatar Aa3 Aa3 AA– AA AA– AA
Croatia Ba1 Baa1 BBB BBB+ BBB– p BBB+ Ras al–Khaimah A AA+ A AA+
Cuba Caa2 Caa2 – – – – Romania Baa3 n A3 BBB– A– BBB– n BBB+
Curacao – – BBB–n BBB– – – Russia Baa3 Baa2 BBB– BBB BBB BBB
Cyprus Ba2 p A2 BBB– AAA BBB – A Rwanda B2 n B1 B+ n B B+ B+
Czech Rep Aa3 Aa1 AA– AA+ AA– AAA St Vincent & Gren B3 Ba3 – – – –
Denmark Aaa Aaa AAA AAA AAA AAA San Marino – – – – BB+n BBB
Dominican Rep Ba3 Ba1 BB– n BB+ BB– n BB– Saudi Arabia A1 n A1 A– A An A+
Ecuador Caa3 Caa2 B– B– B– B– Senegal Ba3 Baa1 B+ BBB– – –
Egypt B2 B1 B B B+ B+ Serbia Ba2 Baa1 BB+ BBB– BB+ BBB–
El Salvador B3 B1 B– AAA B– n B Seychelles – – – – B BB
Estonia A1 Aaa AA– AAA AA– AAA Singapore Aaa Aaa AAA AAA AAA AAA
Eswatini B3 B1 – – – – Slovakia A2 Aaa A+ AAA An AAA
Ethiopia B2 B2 B– B– CCC B Slovenia A3 Aaa AA– AAA A AAA
Fiji B1 n d B1 d BB– BB– – – Solomon Islands B3 B2 – – – –
Finland Aa1 Aaa AA+ AAA AA+ p AAA South Africa Ba2 A3 BB– BB+ BB– n BB
France Aa2 p Aaa AA AAA AA n AAA South Korea Aa2 Aa1 AA AAA AA– AA+
Gabon Caa1 B1 – – CCC B– Spain Baa1 Aa1 An AAA A– AAA
Georgia Ba2 Baa3 BB n BBB– BB n BBB– Sri Lanka Caa1 Ba3 CCC+ CCC+ CCC + CCC+
Germany Aaa Aaa AAA AAA AAA AAA Suriname Caa3 n Ba3 SD CCC C CCC
Ghana B3 n B1 B– B B B Sweden Aaa Aaa AAA AAA AAA AAA
Greece Switzerland Aaa Aaa AAA AAA AAA AAA
Ba3 A3 BB c AAA BB BBB+
Tanzania B2 Ba3 – – – –
Guatemala Ba1 n Baa3 BB– BB+ BB– BB
Taiwan Aa3 p Aa2 AA p AAA AA– AA+
Honduras B1 Ba2 BB– BB – –
Thailand Baa1 A2 BBB+ A BBB+ A–
Hong Kong Aa2 n Aaa AA+ AAA AA– AAA
Trinidad & Tobago Ba1 n Baa3 BBB BBB+ – –
Hungary Baa3 p Baa1 BBB A– BBB A
Tunisia B3 Ba3 – – Bn B+
Iceland A2 A1 A A A– A+
Turkey B2 n B2 B+ BB– BB– n BB–
India Baa3 n Baa2 BBB– BBB+ BBB– n BBB–
Turks & Caicos – – BBB+ AAA – –
Indonesia Baa2 A3 BBB n BBB+ BBB BBB
Uganda B2 Ba3 BB A– B+ n B+
Iraq Caa1 B3 B– AAA B– B–
Ukraine B3 B2 B B B B
Ireland A2 Aaa AA– AAA A+ AAA
UAE Aa2 Aa2 – – AA– AA+
Israel A1 Aa3 AA– AA+ A+ AA
UK Aa3 Aaa AA + AAA AA– AAA
Italy Baa3 Aa3 BBB AAA BBB– AA–
USA Aaa Aaa AA+ AAA AAA n AAA
Jamaica B2 Ba3 B+ n BB– B+ BB–
Uruguay Baa2 A2 BBB A– BBB– n BBB+
Japan A1 p Aaa A+ AA+ An AAA
Uzbekistan B1 B1 BB– n BB– BB BB
Jordan B1 Ba1 B+ BB BB– n BB
Venezuela C Ca SD CC – –
Kazakhstan Baa3 p Baa2 BBB– BBB BBB BBB+
Vietnam Ba3 p Ba1 BB BB BB BB
Kenya B2 n Ba3 B BB– B+ n B+
Zambia Ca Caa3 SD CCC– CCC B–
Kuwait A1 Aa3 AA– n AA AA n AA+
Kyrgyzstan B2 n Ba3 – – – –
1 Moody’s Government Bonds 5 Fitch Government Bonds n Negative outlook/on watch RD Rating default c Improvement in ratings,
2 Moody’s Country Ceilings 6 Fitch Country Ceilings for downgrade * Taken off positive watch/ outlook or watch status
3 S&P Government Bonds p Positive outlook/on watch N New rating outlook d Deterioration in ratings,
4 S&P Transfer and for upgrade W Rating withdrawn ** Taken off negative watch/ outlook or watch status
Convertibility Assessments SD Selective default outlook
60 International Financing Review May 1 2021
 EMERGING MARKETS China 62 Indonesia 63 Malaysia 63 South Korea 63 Vietnam 65
Kazakhstan 66 Ukraine 66 Uzbekistan 67 UAE 69 Argentina 69 Brazil 71

„ FRONT STORY CHINA

Kaisa tackles maturity wall

Proactive debt management wins plaudits from market
New issue combined with LM to tackle looming maturities
KAISA GROUP HOLDINGS on Tuesday took a big The disclosure of US$300m anchor orders “The par-to-par exchange ratio set a new
step towards tackling a looming maturity at the investor call enhanced investor reference point for the 2024s, which
wall in 2024 with a US$500m bond issue, its CONlDENCEûANDûADDEDûSCARCITYûVALUEûOFûTHEû continued to rally to 99.25–99.75 this
largest US dollar bond offering in more than deal, while the par-to-par exchange ratio for morning [Wednesday],” said the banker.
a year and a step toward normalising its the 2024s to the new bonds set a new Nomura put fair value of the new bonds at
yield curve. secondary reference for the long end, said a around 11.80%, after referencing Kaisa’s
The 4.5-year non-call 2.5 senior Reg S banker familiar with the situation.
bonds were priced at par to yield 11.7%, well Asian investors took 95% of the new bonds
inside initial guidance of 12.125% area. The and Europe 5%. Corporates received 59%, This showed that even high
new issue comes alongside an exchange and fund managers 35% and private banks 6%. beta names can come to the
tender offer for holders of US$3.0515bn of Chinese Estates Holdings, controlled by market with longer tenors if the
9.375% senior notes due June 30 2024, which Kimbee Chan, the wife of property tycoon pricing and timing is right
are callable at 104.688 in June 2021. Joseph Lau, was allocated US$150m of the
The Hong Kong-listed Chinese real estate
company is rated B1/B/B and the notes have
expected ratings of B2/B (Moody’s/Fitch).
Kaisa is a frequent bond issuer but has
tended to focus on US$200m–$300m deals.
)TSûLASTûBIGûDEALûWASûAû53MûlVE
YEARû Kaisa’s restructuring in 2016 left it with a
10.5% non-call three bond issue printed in
January 2020.
NEWûBONDSûACCORDINGûTOûAûlLINGû4HEû curve and added some premium for “the
company also disclosed that it holds longer tenor, potential selling pressure from
US$75m of the 9.375% 2024s. cheaper cost exchange bondholders and
future supply risk”.
BIG MATURITY WALL Kaisa’s 11.25% bonds maturing April 2025
and 9.95% bonds maturing July 2025 were
sizeable maturity in 2024, and it has just both quoted at bid yield of 11.5% pre-IPG
obtained a new US$1.4bn offshore issuance announcement. Considering the few
quota that can only be used for the months’ extension of the new November
The issuer has offered some
premium based on pre-IPG
levels. However, given that
the whole curve traded tighter
during the bookbuilding,
especially the long end, it was
hard to say exactly how much
premium the issuer has paid
A banker noted that the new deal’s tenor
was longer than many recent offerings from
the Chinese real estate sector. “It was seen
as being aggressive,” said the banker on the
4.5-year tenor. “Most trades from the sector
have been more defensive on duration.”
Bookbuilding momentum was positive,
even though overall market sentiment
towards Chinese high-yield property bonds
remains weak with some high beta names
still under pressure. Final orders exceeded
US$2.8bn from 131 accounts, including
US$225m from the leads, having crept up
SLIGHTLYûFROMû53BNûATûTHEûTIMEûOFûlNALû
guidance.
RElNANCINGûOFûTHEûSûACCORDINGûTOûAûNOTEû
from Nomura’s trading desk.
The 2024 issue is one of the largest single-
tranche bond issues from China’s property
sector and technically distorted its curve
with a big yield gap between the short end
and the long end.
“Its short end was in the 8%–9% area
while the long end with maturities in
2024 or beyond was trading at 11%–12%.
The big yield gap was uncommon,” said
the banker.
Under the exchange offer, bondholders
will receive the new November 2025 4.5-
year non-call 2.5 bonds on a par-to-par basis.
Under the tender offer, Kaisa will purchase
outstanding bonds for cash at a price to be
DETERMINEDûTHROUGHûANûUNMODIlEDû$UTCHû
auction. The exchange and tender offer will
be subject to a maximum acceptance
amount of US$500m each.
The 2024s were quoted at a cash price of
97.26 or bid yield of 10.40% before the
announcement of the exchange and tender
offer, and traded tighter to around 9.80% on
Tuesday.
International Financing Review May 1 2021
2025s, the banker said fair value should be
around 11.65%.
“The issuer has offered some premium
based on pre-IPG levels. However, given that
the whole curve traded tighter during the
bookbuilding, especially the long end, it was
hard to say exactly how much premium the
issuer has paid,” said the banker.
The newly priced bonds opened at
100.625 and edged higher to 100.75 on
Wednesday morning.
“This showed that even high beta names can
come to the market with longer tenors if the
pricing and timing is right,” said the banker.
The deadline for the exchange and tender
offer will be May 6.
Credit Suisse and Deutsche Bank are dealer-
managers. Morrow Sodali is the
information, exchange and tender agent.
For the new 4.5NC2.5 bonds issue, Credit
Suisse and Deutsche Bank were joint global
coordinators. They were also joint lead
managers and joint bookrunners with China
Citic Bank International, Guotai Junan International,
Haitong International, HSBC and UBS.
Carol Chan
61
ASIA-PACIFIC
CHINA
BEIJING ENTERPRISES CAUTIOUS ON
RETURN
Chinese conglomerate BEIJING ENTERPRISES
HOLDINGS has returned to the US dollar bond
MARKETûAFTERûAûlVE
YEARûABSENCEûWITHûAû amid heightened uncertainty surrounding the
US$700m dual-tranche deal, which received
MOREûTHANû53BNûOFûlNALûORDERSûANDû
rallied in the aftermarket.
!û53MûûlVE
YEARûTRANCHEûWASû Fitch on April 26 became the first global
priced on Wednesday at 99.495 to yield
2.107% and a US$400m 3.125% 10-year piece
at 98.696 to yield 3.279%.
The respective reoffer spreads of 125bp
and 165bp over Treasuries were well inside
initial guidance of 175bp area and 210bp
area.
The 10-year tranche had the longest tenor
from a Chinese state-owned enterprise since
China Huarong Asset Management Co roiled
Asian credit markets in early April, prompting
investors to reassess the robustness of
government support for state-backed or
LINKEDûlNANCIALûINSTITUTIONSûANDû3/%Sû
“We adopted a more conservative
approach and took a two-day execution
because of the soft market. In a good market
like at the beginning of this year, one day
would have been enough for a solid and
repeat issuer like this one,” said a banker on
the deal, adding that initial price guidance
was intentionally set at a more generous
level.
The banker said feedback and indications
of interest from Chinese and Asian investors
were strong post-mandate announcement
but interest from global accounts was
limited. However, orders grew quickly to
US$4bn within two hours of IPG and global
accounts started to come in around
lunchtime so that books peaked at US$8bn
WHENûlNALûGUIDANCEûWASûANNOUNCED
“Global accounts seemed more cautious.
They want to take a step back and make a
decision after getting a clear picture of the
bookbuilding momentum,” said the banker.
STRONG BOOKS
The banker said orders could have allowed a
larger transaction but that the issuer chose
to stick to its US$700m target and gave itself
room to tighten FPG more aggressively.
“That’s also why the book dropped
SIGNIlCANTLYvûTOû53BN
4HEûBANKERûSAIDûTHEûlVE
YEARûTRANCHEûWASû considering Huarong AMC’s policy role and the
priced around fair value while the 10-year
offered 0bp–5bp new issue concession,
based on different valuation methods.
62
Huarong AMC hit by
downgrades
„ CHINA Ratings agencies cite uncertainty around distressed debt manager’s
restructuring plan and government support 
Two global ratings agencies downgraded CHINA
HUARONG ASSET MANAGEMENT CO’s issuer rating
state-owned bad-debt manager’s restructuring
plan and doubts over timely government
support.
in response to a question on Huarong AMC
ratings agency to downgrade Huarong AMC’s
issuer rating, cutting it by three notches to BBB
from A, and kept the ratings on negative watch.
It also downgraded the offshore notes issued
by subsidiaries of Huarong AMC and credit linked
to it, including senior unsecured notes to BBB
from A, senior perpetual notes to BB+ from A–
and subordinated perpetual notes to BB– from
BBB. The notes also remain on negative watch.
On April 29, Moody’s lowered Huarong
AMC’s issuer ratings to Baa1 from A3. It also
downgraded the senior unsecured debt ratings
of Huarong AMC’s offshore financing vehicles,
including Huarong Finance 2017, Huarong
Finance II and Huarong Finance 2019, to Baa2
from Baa1.
The ratings all remain on review for a
downgrade to reflect the uncertainty around
the details of the potential restructuring of the
company and the timing of the publication
of its annual results. The review will look at
the impact of the relevant transaction on its
financial position as well as the ratings agency’s
assumptions for government support.
S&P put its BBB+ rating for Huarong AMC
and its subsidiaries on credit watch with negative
implications on April 9, but has yet to resolve it.
Huarong AMC, which has US$22bn of offshore
notes outstanding, has roiled Asian credit
markets since it failed to meet an end-March
publication deadline for its 2020 earnings, as
investors reassess the likelihood of a government
bailout. Its H-shares have been suspended since
April 1.
There have been media reports about various
possible restructuring plans, but no official
statement from either the Chinese authorities or
Huarong AMC.
“Fitch believes the government sponsor’s
indication of support has not been as
forthcoming amid China Huarong’s weakness in
its offshore funding channel,” the agency said.
While there may still be a big incentive for the
government to provide extraordinary support
the mid-70s to low 90s for the short end and
potential for contagion risk at similar policy-
driven government-related entities, a “timely
International Financing Review May 1 2021
indication of support has not yet materialised”,
Fitch said.
LIMITED TRANSPARENCY
Xiao Yuanqi, vice-chairman of the China Banking
and Insurance Regulatory Commission, said
at a news briefing on April 16 that AMCs are
operating stably and normally. While Huarong
AMC was not directly mentioned, the comments
were viewed by the market as an expression of
support from the regulator, which contributed to
a rebound of Huarong AMC’s offshore bonds.
In statement posted on Chinamoney.com on
April 25, Huarong AMC said it woud miss an
April 30 deadline to file its audited 2020 annual
results as the auditor needed more time and
information to complete its review. It reiterated
that it was operating stably and normally. Under
Hong Kong Stock Exchange rules, the company
had to file its annual report by the end of April.
On April 26, Reuters reported, citing a source
familiar with the matter, that Huarong AMC could
release its earnings “as soon as next month [May]
and the filing would definitely happen before the
end of August when interim results are due”.
Huarong AMC recently repaid a Rmb2.5bn
(US$386m) onshore bond due April 18 and a
S$600m (US$453m) offshore bond due April 27.
There have been reports that Chinese regulators
have asked some banks not to withhold loans to
the company.
In a filing, its 51%-owned unit, Huarong
International Financial Holdings, said it had
signed a supplemental facility letter on April
28 under which a US$100m loan facility has
been renewed to August 31. Huarong AMC
has provided a letter of comfort in which it
promised to maintain its status as the controlling
shareholder of the listed unit as long as the
facility remains outstanding.
Fitch said it was maintaining its negative
watch because of the limited transparency over
the timescale for resolving the issues at stake.
“In the event we believe there is further
deterioration in the company’s funding or
standalone profile, and in the absence of timely
government support, we may change to a
bottom-up approach or remove any government
support uplifts,” it said.
Huarong AMC’s dollar bonds were quoted in
mid-60s to low-70s for the long end on Friday.
Carol Chan
 EMERGING MARKETS ASIA-PACIFIC

Beijing Enterprises, which engages in It has held investor calls across Asia, the The new senior unsecured notes have
piped gas, brewing, sewage and water Middle East and Europe since April 29. expected ratings of Aa2/AA (Moody’s/S&P),
treatment, and solid waste treatment CIMB, DBS Bank, JP Morgan, MUFG and OCBC in line with the issuer. They were trading at
BUSINESSESûlRSTûTAPPEDûTHEûINTERNATIONALû
bond market in 2011. In the past few years,
however, it has mainly issued euro-
denominated bonds. Its last US dollar bond
ISSUEûWASûINû$ECEMBERûûWITHûAû
US$200m 4.99% due 2040 deal.
Its existing 4.5% dollar bonds due 2022,
ANDûDOLLARûBONDSûISSUEDûBYûLOCALû3/%Sû"!)#û
Motor and Shanghai International Port
(Group) as well as conglomerate Citic were
used by leads as comparables for the new
issue.
Nomura’s trading desk saw fair value for
THEûlVE
YEARûATû4REASURIESûPLUSûBPûANDû green note that drew strong demand despite
the 10-year at Treasuries plus 160bp–165bp,
after referencing BAIC Motor and Shanghai
International Port (Group) as well as some
CENTRALû3/%SûSUCHûASû#HINAû.ATIONALû4RAVELû
YEARû2EGû3ûBONDûWASû healthier position compared to some other
Service Group and China Minmetals.
The senior unsecured bonds will be issued
by Talent Yield International and guaranteed
TO
Bank are joint bookrunners and joint lead
managers.
4HEûPROPOSEDûSUKUKûWILLûBEûISSUEDûBYû$UAû
Capital and backed by Khazanah Nasional.
SOUTH KOREA
INCHEON AIRPORT DEBUTS WITH
GREEN BOND
INCHEON INTERNATIONAL AIRPORT CORP has made
its debut in the offshore bond market with a
Construction project and the pandemic
the continuing disruption of the travel
industry and the issuer’s huge capital
spending plans.
4HEû53MûlVE
priced at 99.465 to yield 1.361% or Treasuries
plus 52.5bp, inside initial price guidance of
85bp area.
a benchmark spread of around 50bp on their
lRSTûTRADINGûDAYûONû4UESDAY
Before the pandemic, the company did
not face strong needs to tap the
international bond market thanks to its
ROBUSTûCASHmOWûGENERATION
IIAC’s funds from operations to adjusted
debt came in at 85.6% in 2019, but that ratio
is expected to plunge to 5%–8% in 2020 before
turning negative in 2021 and recovering to
9%–11% in 2022, according to Moody’s.
“We were able to convince investors of our
lNANCIALûHEALTHûAMIDûTHEûONGOINGû0HASEûû
because we expect our debt ratio to remain at
the 100% level even after the project is set to be
completed in 2024, which puts us in a much
state-owned companies in Korea,” said a
FUNDINGûOFlCIAL
+./#SûDEBT
ASSETSûRATIOûFORûEXAMPLEû
by the Hong Kong-listed parent. The
expected ratings are Baa1/BBB+
(Moody’s/S&P), on par with the guarantor.
Proceeds will be used for offshore debt
RElNANCINGû4HEûCOMPANYûHASûAû53Mû
The deal was covered over six times and
priced inside fair value by 3bp–5bp after
referencing recent issues from South
Korea’s state-owned enterprises, such as
Korea Hydro and Nuclear Power and Korea
stood at 3.416% in 2019.
4HEûOFlCIALûSAIDûTAPPINGûTHEûOFFSHOREûBONDû
market this time allowed the company to
make savings as the new bonds were priced
around 80bp inside IIAC’s onshore bonds on
5% bond issue maturing on May 12.
Bank of China (Hong Kong), DBS Bank, HSBC,
Mizuho Securities and Standard Chartered were
global coordinators.
INDONESIA
SMI HIRES FOR EUROBOND
SARANA MULTI INFRASTRUKTUR began calls on
!PRILûûFORûAûPROPOSEDû53ûDOLLARûlVE
YEARû Established in 1999, Incheon International
Reg S bond offering.
Bank of America has been mandated as sole
global coordinator. It is also a joint
bookrunner and joint lead manager with
.ATIONALû/ILû#ORPORATIONûACCORDINGûTOûAû
lead. Korea Hydro’s 2026s were seen at a
benchmark spread of around 56bp.
“The green label, of course, helped drive
demand, but the size was also small,” said
the lead. “Although it was a debut offering,
many investors had the experience of
actually using the airport, so they were
familiar with the name as well, while it was
a good opportunity to diversify away from
THEûSAMEûOLDû3/%ûSUPPLYûFROMû+OREAv
SUSTAINABILITYûlNANCEûFRAMEWORK
Airport Corp (IIAC) is wholly and directly
owned by the South Korean government. It
owns and operates Incheon International
Airport, which is the primary gateway for
an after-swap basis.
IIAC aims to make Incheon International
Airport one of the world’s top three airports
in terms of international passenger and
aircraft accommodation capacity with the
Phase 4 project, which will cost around
W4.8trn (US$4.3bn) and should turn it into
an eco-friendly airport.
Proceeds of the new bonds will be used
FORûlNANCINGûANDORûRElNANCINGûELIGIBLEû
green projects under the company’s
“There aren’t any concrete plans for further
dollar bond issues yet, but now that we have
made our debut offering, we plan to consider
this option in case we have long-term foreign
DBS, MUFG, Mandiri Securities and Standard international travel to and from South Korea. CURRENCYûNEEDSvûTHEûOFlCIALûSAID
Chartered.
The senior unsecured notes, if issued, are ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS
expected to be rated BBB by Fitch and will BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
be drawn under the company’s US$2bn Euro Asia-Pacific Managing No of Total Share
MTN programme. Managing No of Total Share bank or group issues US$(m) (%)
Sarana Multi Infrastruktur is an bank or group issues US$(m) (%)
1 Citigroup 132 25,641.23 8.9
Indonesian state-owned enterprise that is 1 HSBC 117 12,480.25 8.1 2 JP Morgan 134 25,605.48 8.9
ENGAGEDûINûlNANCINGûINFRASTRUCTUREû 2 Citigroup 70 11,611.71 7.5 3 HSBC 164 22,805.49 7.9
development projects. 3 JP Morgan 63 9,579.65 6.2 4 Standard Chartered 118 14,846.04 5.2
4 Standard Chartered 84 8,170.85 5.3 5 BNP Paribas 96 14,423.71 5.0
5 Bank of America 50 6,722.73 4.4 6 Bank of America 74 11,956.27 4.2
MALAYSIA 6 BNP Paribas 62 6,134.56 4.0 7 Goldman Sachs 44 10,641.83 3.7
7 Morgan Stanley 28 5,320.84 3.5 8 Morgan Stanley 46 10,217.27 3.6
KHAZANAH PLANS US DOLLAR SUKUK 8 Credit Suisse 50 4,986.10 3.2 9 Credit Suisse 68 7,449.12 2.6
9 DBS Group 58 4,890.00 3.2 10 Credit Agricole 64 7,207.07 2.5
Malaysian sovereign wealth fund KHAZANAH 10 Bank of China 75 4,493.26 2.9 Total 471 287,491.71
NASIONAL has hired banks for a proposed Total 310 153,919.87
Excluding equity-related debt.
2EGû3ûOFFERINGûOFûlVE
YEARûANDû
YEARû53û Excluding equity-related debt.
dollar senior sukuk. Source: Refinitiv SDC code: L4 Source: Refinitiv SDC code: L1

International Financing Review May 1 2021 63

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 30/4/2021
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

ASIA
Apr 26 2021 Incheon International Airport US$300m May 4 2026 1.25 99.465 T+52.5 1.361

Apr 26 2021 Maldives Sukuk Issuance Ltd US$100m incr Apr 8 2026 9.875 97.625 - 10.5
(US$300m)
Apr 27 2021 Hyundai Motor US$300m Perpetual 1.75 99.6 T+100 1.834
Manufacturing Indonesia PT
Apr 27 2021 Kaisa Group US$500m Nov 11 2025 (Nov 2023) 11.7 100 - 11.7

Apr 27 2021 Shanxi Securities Co Ltd US$200m May 4 2024 3.4 100 - 3.4

Apr 28 2021 Bim Land JSC US$200m Perpetual 7.375 98.47 - 7.75

Apr 28 2021 Kookmin Bank US$500m May 6 2026 1.375 99.851 T+55 1.406

Apr 28 2021 Talent Yield International US$400m May 6 2031 3.125 98.696 T+165 3.279
Limited

Apr 28 2021 Talent Yield International US$300m May 6 2026 2 99.495 T+125 2.107
Limited

Apr 29 2021 XiAn Qujiang Cultural US$60m May 10 2024 5.5 100 - 5.5
Industry Investment Group
Co Ltd
-
Apr 29 2021 Guang Ying (Guangzhou US$300m May 6 2024 2.15 100 - 2.15
Finance)

Apr 29 2021 Nanjing Jiangbei New Area US$300m May 5 2022 2.6 100 - 2.6
Industrial Investment Group
EMEA
Apr 26 2021 Ukraine US$1.25bn May 21 2029 6.875 100 T+561.8/MS+549.1 6.875

Apr 27 2021 Pegasus Hava Tasimaciligi US$375m Apr 30 2026 (Apr 2024) 9.25 100 T+837.5 9.25
AS
Apr 27 2021 Uzauto Motors AO US$300m May 4 2026 4.85 100 - 4.85

Apr 28 2021 Abu Dhabi Ports Company US$1bn May 6 2031 2.5 97.922 MS+110/T+109.8 2.739
PJSC

Apr 28 2021 Oq SAOC US$750m May 6 2028 5.125 100 T+378.1 5.125

Apr 29 2021 Development Bank of T100bn May 6 2026 10.95 99.812 - 11

Kazakhstan

Apr 29 2021 Development Bank of US$500m May 6 2031 2.95 99.571 - 3

Kazakhstan

LATAM
Apr 26 2021 Natura Cosmeticos US$1bn May 3 2028 4.125 100 - 4.125

Apr 27 2021 IOCHPE-MAXION US$400m May 7 2028 (May 2024) 5 98.551 - 5.25

Apr 27 2021 Pan American Energy US$300m Apr 30 2027 9.125 100 - 9.125
Apr 29 2021 AES Andres B.V./Dominican US$300m May 4 2028 5.7 100 - 5.7
Power Partners

Final orders exceeded US$1.9bn from 115
accounts. Asia took 70% and the rest went to EMEA.
Bank of America, Citigroup and JP Morgan
were joint bookrunners.
KOOKMIN CARD HIRES FOR EUROBOND
CALLûlVEûORûNON
KB KOOKMIN CARD begancalls on April 29 for a
proposed US dollar Reg S senior unsecured
sustainability bond offering with an
EXPECTEDûTENORûOFûTHREEûORûlVEûYEARS
Citigroup, HSBC and KB Securities Hong Kong
have been mandated.
KB Kookmin Card, rated A2 by Moody’s, is
South Korea’s third-largest card company by
credit card transaction volume, according to
the ratings agency. It is a wholly owned
subsidiary of KB Financial Group.
SHINHAN HOLDCO HIRES FOR AT1
SHINHAN FINANCIAL GROUP began calls on April
29 for a proposed US dollar 144A/Reg S Basel
III-compliant Additional Tier 1 sustainability
SUBORDINATEDûPERPETUALûNON
call 5.5.
BNP Paribas, Citigroup, Credit Suisse, HSBC
and Mizuho have been mandated.

64 International Financing Review May 1 2021

 EMERGING MARKETS ASIA-PACIFIC

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

T+85 area - US$1.9bn, 115acs Aa2/AA BofA/Citi/JPM Asia 70%, EMEA 30%. AM/FM 57%,
Bks 15%, Ins 14%, SWF/SSA13%, PB/
Other1%.
10.5% (the #) - - B3 ENBD/HSBC/ICDPS -

T+135 area - US$2.7bn, 170acs Baa1/BBB+ BNPP/Citi/HSBC Asia 72%, EMEA 28%. AM/FM 75%, Bks
18%, Ins/SWF 5%, PB/Other 2%.
12.125% area, 11.7% - US$2.8bn, 131acs B2/-/B CS/DB/CNCBI/Guotai Junan/Haitong ASIA 95%, Eur 5%. Corp 59%, FM 35%,
(the #) Intl/HSBC/UBS PB 6%
3.75% area, 3.40% - - - Shanxi/CLSA/BoC/CMBCHK/CMBI/ -
(the #) CMBC Cap/Guotai Junan/Huatai/
Industrial
7.875% area, - -, 52acs B2/-/B CS/StCh/UBS EMEA 41%, Asia 58%, US O/S 1%. FM/
7.625%/7.75% AM 92%, PB 8%.
T+85 area, T+55 -1 US$2.1bn, 100acs Aa3/A+ BofA/CA-CIB/HSBC/KBSec/SG/StCh Asia 73%, Eur 16%, US 11%. AM/Ins 47%,
(the #) Bks 33%, CB/SSA 19%, Other 1%.
T+210 area, T+165 - US$2.2bn, 87acs Baa1/BBB+ BOCHK/DBS/HSBC/Miz/StCh/CCBI/ Asia 91%, EMEA 9%. AM/FM 50%, Bks/
(the #) CNCBI/Everbright HK/CICC/CA-CIB/ FIs 44%, PBs/Other 6%.
ICBCA
T+175 area, T+125 - US$2.4bn, 74acs Baa1/BBB+ BOCHK/DBS/HSBC/Miz/StCh/CCBI/ Asia 97%, EMEA 3%. AM/FM 29%, Bks/
(the #) CNCBI/Everbright HK/CICC/CA-CIB/ FIs 68%, PB/Other 3%.
ICBCA
5.5% (the #) - - - CMBI/Huaxia

2.75% area, 2.15% - - -/-/A- CICC/ICBCI/Huatai/CISI/Industrial/ -

(the #) SPDB/Shenwan Hongyuan/BoC/
CNCBI/Everbright HK/CMBCHK/Luso
3.1% area, 2.6% - - -/-/BBB CICC/Huatai/BoC/CNCBI/Orient/ -
(the #) Everbright HK/WingLung/SPDB

Low 7%s, 6.875% - US$3.3bn NR/B/B BNPP/DB/GS/JPM -

yld
9.25%/9.5%, 9.25% - - NR/B/BB- BofA/GS -

5.375% area, 4.85% - US$1.4bn NR/B+/B+ Citi/MUFG/Natx/RBI/Sovcom -

yld
MS+145 area, - US$4.6bn NR/A+/A+ Citi/1ADB/StCh/HSBC/Miz/SG/ Asia 27%, ME 25%, UK 19%, US O/S
MS+120 (+/-5) BNPP/CA-CIB/SMBC Nikko 15%, Eur 14%. AM 56%, Bks 20%, CB
11%, Ins 6%, PF 5%, Other 2%.
5.625% area, - US$4.5bn NR/NR/BB- Citi/HSBC/JPM/1ADB/MUFG/Natx/ UK 35%, US 22%, Eur 18%, Asia 15%,
5.125% yld SMBC Nikko/SG MENA 10%. AM 83%, Bks 10%, Others
7%.
11%/11.5%, - T160bn Baa3/BB+/BBB Citi/Halyk/JPM/VTB UK 52%, US 30%, Eur 11%, Kaz 1%, Other
11%/11.25%, 11% 6%. AM 91%, Bks/PB 7%, HF 2%.
(the #)
3.375% area, 3.25% - US$1.1bn Baa3/NR/BBB Citi/Halyk/JPM/VTB Kaz 36%, US 29%, Eur 14%, UK 12%,
area, 3%/3.125%, ME/Asia 4%, Switz 3%, Russ 2%. AM
3% yld 63%, Bks/PB 29%, HF 5%, Ins/PF 2%,
Other 1%.

Mid 4% area, 4.25% - - Ba2/BB/BB BBrad/Citi/Itau/MS/BofA/HSBC -

(+/-0.125), 4.125%
5% area, 5.25% - - Ba3/BB-/BB- BBrad/Citi/CMZ/HSBC/Itau/ -
(the #) Santander/UBS
9.25%/9.5%, 9.125% - - -/-/BB- Citi/HSBC/Itau/JPM/Santander -
Low 6%, 5.875% - - -/BB-/BB- Citi/Scotia/JPM -
(+/-12.5)

The proposed bond offering is
expected to be rated Baa3 by
Moody’s. The bank is rated A1/A at
senior level.
YEARûNON
CALLûTHREEûû
The holding company of South Korea’s
Shinhan Bank previously visited the
international bond market in July last
year to raise US$500m from a 5.5-year
senior social bond.
VIETNAM
BIM LAND PRINTS COUNTRY’S FIRST
GREEN BOND
BIM LANDûHASûPRICEDû6IETNAMSûlRSTûGREENû
bond with a debut international offering
that also broke a lull of almost two years in
offshore bond supply from the South-East
Asian nation.
The property developer priced the
53MûlVE
senior green bond at 98.47 to yield 7.75%,
inside initial guidance of the 7.875% area but
ATûTHEûWIDEûENDûOFûlNALûGUIDANCE
4HEûlNALûBOOKûSIZEûWASûNOTûAVAILABLEûBUTû
52 accounts participated with around two-

International Financing Review May 1 2021 65

lFTHSûOFûTHEMûCOMINGûFROMû%-%!û/RDERSû “The macro story on Vietnam is solid, A lead said the deal came in line with fair
EXCEEDEDû53MûWHENûlNALûPRICEû
guidance was announced at 7.625%–7.75%.
h)TSûDIFlCULTûTOûGIVEûAûBREAKDOWNûONû%3'û
DEMANDûBUTûTHEûGREENûLABELûDElNITELYû
helped to reach a larger audience, as seen in
the distribution to Europe that has quite a
number of funds with the green tag,” said a
YEARû
lead.
“The jurisdiction of the deal, which isn’t
the most active, also offered investors an
opportunity to diversify out of China and
higher coupon levels led to private bank
participation.”
Asia bought 58% of the Reg S deal, EMEA
YEARûANDûlVE
that’s for sure,” said a private banker.
GREEN DRIVE
BIM Land’s new green bond offering comes
as the Vietnamese government is pushing
THEûDEVELOPMENTûOFû%3'ûlNANCING
Two local government entities sold
Vietnamese dong-denominated green bonds
in 2016 as part of the government’s efforts
to prepare the market for such issues. Ho
Chi Minh City and the People’s Committee
of Ba Ria Vung Tau Province raised the
equivalent of US$23m and US$4m from
Aû
VALUEûEVENûARGUABLYûINSIDEû4HEûlNALûBOOKû
was above US$1.1bn.
Just over a third of the deal went to
Kazakh investors, 29% went to the US, and
European investors bought 14%. UK accounts
were the other major buyers with 12%.
$"+ûALSOûSOLDûAû4BNû53M ûlVE
note at 11%, which was the tight end of the
initial guidance range that went out to 11.50%.
Books had reached more than T170bn, before
dropping away a touch to T160bn. The bond
will be payable in US dollars.
“For an investment-grade/crossover state-
YEARûNOTEûRESPECTIVELY owned bank you can see how this would
41% and offshore US investors the The Vietnamese government also appeal to a certain sector of the investor
remainder. Fund managers and asset INTRODUCEDûITSûlRSTûLEGALûFRAMEWORKûFORû base,” said the lead.
managers took 92% and private banks 8%. CORPORATEûGREENûBONDSûINûûWITHû$ECREEû More than 50% of this tranche went to UK
BIM Land’s new bonds have expected 163, according to the Climate Bonds investors, with US accounts also taking 30%.
ratings of B2/B (Moody’s/Fitch), in line with Initiative’s latest report. More recently, the $"+ûHASûAûLOCALûBONDûQUOTEDûATûû
the issuer. They were wrapped around
REOFFERûINûSECONDARYûONûTHEIRûlRSTûTRADINGû
day on Thursday.
There were no recent issues from
Vietnam to provide a pricing comparison.
The last offshore deals came when Vietnam
Prosperity Joint Stock Commercial Bank
raised US$300m from three-year senior
bonds on its international debut and the
SPONSORSûOFûTHEû-ONGû$UONGûûPOWERûPLANTû
SUCCESSFULLYûRElNANCEDûPROJECTûDEBTûWITHûAû
COUNTRYSûlNANCIALûREGULATORûTHEû3TATEû
Securities Commission, published a
handbook last month along with IFC, the
Climate Bonds Initiative and the Swiss State
Secretariat for Economic Affairs on how to
issue ESG bonds.
Proceeds from BIM Land’s new bonds will
be used to fund eligible green projects as
well as for working capital and general
corporate purposes. The green projects
include investments in green buildings with
with 3.8 years to maturity.
Citigroup, Halyk Finance, JP Morgan and VTB
Capital were bookrunners. JP Morgan was
DEVELOPMENTûlNANCEûSTRUCTURINGûAGENT
UKRAINE
INTERPIPE SITS DOWN WITH INVESTORS
Ukraine’s INTERPIPE is hoping to follow the
US$679m bond issue, both in July 2019. ENERGYûEFlCIENTûSYSTEMSûWASTEûREDUCTIONû lead of its sovereign with an expected
Leads looked at VPBank’s dollar bonds as and renewable energy. Parent BIM Group’s 53MûlVE
YEARûNON
CALLûTWOûAFTERû
well as those from property developers from
the broader South-East Asia region such as
Pakuwon Jati, Vista Land and Bumi Serpong
$AMAI
VPBank’s 2022s were seen at a bid yield of
around 4%, while Pakuwon Jati’s 2028s were
bid at 102.13 for a yield of 4.52%, according
to an investor note.
Indonesia’s Pakuwon Jati is rated higher
than BIM Land at Ba2/BB/BB. Vista Land’s
unrated 2027s were bid at 104.75 for a yield
of 6.17%.
“There was a debate over the private
operations include a renewable energy
business in solar and wind power.
Credit Suisse, Standard Chartered and UBS
were lead managers and bookrunners of the
new bonds.
EUROPE/AFRICA
KAZAKHSTAN
spending a week talking investors through
its credit story.
The mandate for the manufacturer and
supplier of steel pipes and railway products,
rated B by S&P and Fitch, was announced on
Monday, the same day that Ukraine raised
US$1.25bn through an eight-year bond.
“The company has improved
MANAGEMENTûANDûDIVERSIlEDûITSûBUSINESSû
SIGNIlCANTLYûINûTHEûLASTûSEVERALûYEARSû)TûALSOû
has low leverage,” said one investor.
At the end of 2020, it reported total debt
of about US$100m on Ebitda of US$270m.
company premium, but we came to a fair
value in the low 7% area after factoring in
100bp for that premium,” said the lead.
BIM Land is the real estate development
arm of BIM Group, a privately owned
DBK DOUBLES UP IN DOLLARS AND
TENGE
DEVELOPMENT BANK OF KAZAKHSTAN placed a dual-
h$UEûTOûITSûHISTORYûHOWEVERûANDûASûHALFûOFû
the bond proceeds are intended as
dividends, I think they would need to pay a
large concession over more established
Ukrainian issuers,” said the investor.
conglomerate. Moody’s notes there is
governance risk stemming from BIM Land’s
private company status.
Vietnam’s credit strength has been
improving, and on April 1, Fitch revised the
sovereign’s outlook to positive from stable
ANDûAFlRMEDûTHEûLONG
TERMûFOREIGN
CURRENCYû h$"+ûHASûALWAYSûBEENûQUITEûTRICKYûTOûPRICEû
issuer default rating at BB. The rating agency
cited Vietnam’s growth and the resilience of
PUBLICûlNANCESûAMIDûTHEûCORONAVIRUSû
outbreak, as well as the continued
STRENGTHENINGûOFûEXTERNALûlNANCESûTHANKSûTOû
persistent current account surpluses and
rising international reserves.
66
currency issue on Thursday, including a rare
tenge-denominated Eurobond.
The 100% state-owned development
institution, rated Baa3/BB+/BBB, launched a
US$500m 10-year note at 3% from IPTs of
3.375% area.
negotiations took about seven years and
versus where the sovereign trades,” said a
banker away.
“The sovereign is very compressed, [IPTs
were] maybe 75bp back of that.
KazMunayGaz’s 2030s are at 2.95%, so you
could argue a new 10-year for KMG is in the
low 3s.”
International Financing Review May 1 2021
!LEXEYû"ULGAKOVûlXEDûINCOMEûANALYSTûATû
Renaissance Capital, said the deal is “not for
the fainthearted”.
The company, he said, has previously
restructured its Eurobonds twice – in 2008
and 2012 – the latest restructuring
concluded rather recently, in 2019.
However, Interpipe fully redeemed the
restructured bonds at the end of 2020, ahead
of schedule.
h4HEûCREDITûSTORYûISûQUITEûSPECIlCû)ûDOUBTû
that there will be switching out of any other
paper,” Bulgakov said.
 EMERGING MARKETS EUROPE/AFRICA

Comparables will include Russian steel bonds moved 30bp–50bp tighter,” said Matt
companies such as TMK but most obviously $OHERTYûHEADûOFû#%%-%!ûSYNDICATEûATûBNP UZBEKISTAN
Metinvest. Bulgakov reckons Interpipe Paribas, a lead manager alongside Deutsche
should pay at least a 200bp premium over Bank, Goldman Sachs and JP Morgan. UZAUTO BROADENS UZBEK CREDIT
Metinvest, which has April 2026s bid at “So the government wanted to be OPPORTUNITY
ûACCORDINGûTOû2ElNITIV
“Interpipe has a long history with
investors, sometimes successful, other times
less so,” said Vitaliy Sivach, a trader at asset
manager ICU, who added that Interpipe
could be looking to issue at around 8%.
“A successful roadshow is crucial for the
new Interpipe deal. The company has to
convince investors that the new bonds are
good value for the credit risk they take.
That’s the main challenge.”
Rumbling in the background have been
RUCTIONSûATûSTATE
RUNûENERGYûlRMû.AFTOGAZ GAM.
YEARûNOTEûATûû
Ukraine’s acting energy minister Yuriy
Vitrenko was appointed head of state-run
ENERGYûlRMû.AFTOGAZûONû7EDNESDAY
The government said in a statement that
former Naftogaz chief Andriy Kobolyev had
opportunistic and take some of the funding
requirements for this year off the table,
particularly after the markets saw some big
volatility in February and March,” said
$OHERTY
Relations between Moscow and Kyiv
have been dire since Russia annexed the
Crimean peninsula in 2014 and backed a
pro-Russian separatist insurgency in east
Ukraine. But those tensions only tell part
of Ukraine’s credit story, according to
Richard Briggs, an investment manager at
EXPECTEDû53MûlVE
“The bonds trade at decent yields given
the geopolitics, as Ukraine’s fundamentals
have continued to improve with their
current account in surplus last year and
reserves still remaining ample,” said Briggs.
UZAUTO provided new territory to explore for
emerging markets investors after becoming
THEûlRSTû5ZBEKûCORPORATEûTOûISSUEûANû
international bond.
By doing so, the company joined the
sovereign and some of the country’s banks
as a borrower in the US dollar market.
UzAuto (B+/B+) is 100%-state owned but also
operates in an alliance with General Motors.
Investors used the sovereign as the key
reference point. Leads began marketing an
area, which one banker away said was
attractive.
“Starting 225bp wide of the sovereign for
a similar-rated 100%-state owned company
would in general feel cheap to me,” he said.
been dismissed after the company reported
a loss of H19bn (US$684m) for 2020.
But Sivach said the headlines around
Naftogaz were unlikely to deal a material
blow to Interpipe’s proposed transaction.
“Interpipe may be impacted, but just
marginally – maybe just by 0.1%–0.15% in
terms of yield, no more than that,” said
Sivach. “The sovereign Eurobond market is
weaker, but we see no sell-off so far on the
back of the Naftogaz news.”
Goldman Sachs and JP Morgan are lead
managers and bookrunners.
UKRAINE LEAPS ON MOOD SHIFT
h4HEûlSCALûDETERIORATEDûWITHû#OVIDûBUTû
not excessively so. It should be an
improving credit over the next few years if
they can avoid further escalation with
Russia.”
Ukraine (NR/B/B) is also hoping to make
progress on talks with the IMF and improve
more loans under a US$5bn deal approved
last June.
However, the dismissal of the head of
Naftogaz may push back any disbursements,
said analysts, especially as the move was
CRITICISEDûBYûTHEû53û3TATEû$EPARTMENT
“Unfortunately, these actions are just the
latest example of ignoring best practices and
putting Ukraine’s hard-fought economic
However a book in excess of US$1.4bn
enabled leads to price the US$300m bond at
4.85%. The size meant it didn’t meet the
criteria for index inclusion but that didn’t
deter investors that were keen to get their
hands on something new offering yield.
“It was the right credit at the right time
and people were engaged,” said a banker
close to the deal. “People ultimately felt
comfortable looking at the spread over the
sovereign. I saw it as 185bp, give or take.”
)NûHEADLINEûTERMSûTHEûlNALûYIELDûWASûMOREû
or less in line with Ipoteka Bank and Uzbek
Industrial and Construction Bank
(Uzpromstroybank), which are both BB–/BB–
and have bonds trading in the high 4s. But
UKRAINE used an easing in geopolitical
tensions and a subsequent rally in its
sovereign bonds as the springboard for
TAKINGûOUTûAûSIGNIlCANTûCHUNKûOFûITSûEXTERNALû
funding needs for the year last Monday.
However, investors were given a further
reminder of the nation’s political intrigues
after the government dismissed the head of
PROGRESSûATûRISKvûSAIDûAû3TATEû$EPARTMENTû
spokesman on Thursday.
The drama came 48 hours after the
sovereign had priced its eight-year bond,
WHICHûWASûlRSTûMARKETEDûABOUTûBPûBACKû
of fair value, at a yield in the low 7s. Pricing
was tightened for a launch at 6.875%. With
Ukraine’s bonds moving around during
UzAuto provided a pick-up after adjusting
for the respective curves.
Ipoteka Bank has November 2025s bid at
4.80%, while Uzpromstrobank has
$ECEMBERûSûATûû.ATIONALû"ANKûOFû
5ZBEKISTANûHASûALSOûISSUEDûBUTûITSû/CTOBERû
2025s trade much tighter, in the low 4s.
state-owned Naftogaz two days later because
OFûTHEûCOMPANYSûPOORûlNANCIALû
performance, though the decision drew a
YEARûTENORûlTTEDûNICELYûINûANû Europe/Africa
stinging rebuke from the US government.
EXECUTIONûLEADSûSAWûTHEûlNALûCONCESSIONû ALL INTL EMERGING MARKETS BONDS
versus trading levels as around 12.5bp. BOOKRUNNERS: 1/1/2021 TO DATE
h4HEûEIGHT
open year on Ukraine’s existing maturity Managing No of Total Share
The sovereign, which plans to raise PROlLEvûSAIDû$OHERTYûh!DDITIONALLYûTHEû bank or group issues US$(m) (%)
around US$3bn from the bond markets in coupon obtained by Ukraine marked the
1 JP Morgan 22 5,747.59 12.8
2021, brought the US$1.25bn May 2029 lowest out of all their existing US dollar
2 Citigroup 15 4,547.11 10.1
trade on the back of improved headlines external bonds outstanding.” 3 BNP Paribas 14 3,691.17 8.2
and sentiment. The note priced at par and traded up in 4 HSBC 10 2,904.77 6.5
Tensions between Ukraine and Russia had the aftermarket. 5 Goldman Sachs 7 2,749.54 6.1
soared in recent weeks over a Russian “I felt [the new issue] came quite cheap 6 UniCredit 10 2,313.33 5.1
military build-up near the Ukrainian border. actually, I think partly as people were 7 SG 7 2,193.82 4.9
Russia, which said the build-up had been pricing fair value off of a high [cash price] 8 Standard Chartered 8 2,065.64 4.6
part of military exercises, said last week it 2028 bond, which wasn’t a fair comparison 9 Deutsche Bank 6 1,517.26 3.4
had begun returning the troops to their and we were a little surprised by the 10 Raiffeisen Schweiz 3 1,370.93 3.0
permanent bases. timing,” said Briggs on Tuesday. Total 46 44,991.79
“With the positive local developments The bonds were trading around their par Excluding equity-related debt.
during last week, Ukrainian sovereign reoffer price on Friday. Source: Refinitiv SDC code: L2

International Financing Review May 1 2021 67

 Unlike the bank deals, which were all Reg S “It’s going to a bit of a mix of investors but OFûCASHmOWûTOûTHEûBUSINESSûOVERûTHEûNEXTûû
only, UzAuto issued in 144A/Reg S format. overall I would say more Western Europe years.
!LEXEYû"ULGAKOVûlXEDûINCOMEûANALYSTûATû focused,” said a lead during execution. The company’s hopes for tackling its debt
Renaissance Capital, said the company “has 0ROCEEDSûWILLûBEûALLOCATEDûTOûlNANCEûORû load have also been boosted by strong
VOLATILEûCASHmOWSûDUEûTOûWORKINGûCAPITALû RElNANCEûELIGIBLEûPROJECTSûANDORûASSETSû demand for lowly rated risk, albeit a
swings”, while revenues are mostly in local including the residential-for-rent asset class. successful debt raise and implementation of
currency – exports are just 5%.
(EûSAIDûPROCEEDSûWILLûlNANCEûAûBRIDGEû
loan taken in 2020 from Credit Suisse to
upgrade equipment and to launch
production of new GM models.
Citigroup was global coordinator and
joined on the books by MUFG, Natixis and
Raiffeisen Bank International.
REGIONAL
ATRIUM EXPANDS INTO GREEN HYBRIDS
Central and Eastern European shopping
,IADû"ARZILAIûCHIEFûEXECUTIVEûOFlCERûOFû
Atrium Group, said in a statement that the
outcome was an endorsement of the
company’s strategy to diversify into
residential-for-rent in its key geographies of
Poland and the Czech Republic, as well as
THEûAPPEALûOFûTHEûGREENûlNANCINGû
framework.
Following the issuance, the company’s
reported net LTV will be 27%, with the long-
term target set at 40%.
Goldman Sachs and HSBC were global
coordinators and were joined as
bookrunners by Citigroup, Deutsche Bank, ING
and Raiffeisen Bank International.
its hedging programme at US$55 a barrel
will mean the notes will be rated B2/B–. If
these are not met, the instrument ratings
would be B3/B–.
The outlook for economic recovery has
bolstered risk appetite, while higher
Treasury rates has dented demand for
higher-rated bonds, which has brought
down the cost of borrowing for risky
companies and allowed many to avoid
restructuring events.
“In the third and fourth quarter of last
year there was a high expectation of
restructuring events, and that has tapered a
little bit because companies can go ahead
centre owner ATRIUM EUROPEAN REAL ESTATE
ADDEDûAûHYBRIDûTOûITSû%3'ûlNANCINGûTOOLSûASû
it sold an upsized €350m perpetual non-call
5.5-year green bond on Monday.
The company (Baa3/–/BBB) followed up a
debut green senior unsecured trade in
January with the hybrid.
The deal was initially expected to be
€300m, but an order book that peaked over
€1.3bn meant the company was able to
YEARûNON
CALLûTWOûNOTEû Both Moody’s and S&P have put Tullow’s
increase the size.
Atrium sold its note at a yield of 4%, with
a 3.625% coupon. IPTs had been 4.5% area.
Comparables included CPI Property Group,
TULLOW OIL LOOKS TO TERM OUT DEBT
Africa and South America-focused oil and
gas company TULLOW OIL is marketing a
US$1.8bn secured bond that will help ease
lNANCIALûPRESSUREûONûTHEûCOMPANYûBYû
clearing out near term debt maturities.
Banks led by JP Morgan are marketing the
53BNûlVE
through to May 5, in a bid to clear out the
company’s debt maturities through to 2025.
The exploration and production company
will use the proceeds from the B3/B– rated
ANDûRElNANCEûCHEAPLYvûSAIDûONEûLEVERAGEDû
lNANCEûLAWYERûh4HEYûCANûKICKûTHEûCANûDOWNû
the road and take advantage of some of
these yields. We will see more liability
management exercises, as companies avoid
full-on restructurings.”
The deal is intended to be leverage
neutral, the company said.
Ratings agencies have reacted positively.
issuer ratings of Caa1/CCC+ on review for
upgrade to B3/B– on a successful outcome.
Global coordinators and joint bookrunners
are JP MorganûLEAD
LEFTû"$ ûDNB Markets,
#ITYCONû5NIBAIL
2ODAMCO
7ESTlELDûANDû!CCOR lVE
YEARûNON
CALLûTWOûBONDSûANDû53Mû ING, Standard Bank, and Standard Chartered.
#0)0'ûHASûAûHYBRIDûCALLABLEûINû/CTOBERû
2025 quoted at 3.65%, and one callable in
November 2026 quoted at just over 3.8%.
CPIPG’s hybrids are rated Ba1 by Moody’s
and BB+ by S&P. Atrium’s bond is expected
to be rated Ba2 by Moody’s and BB+ by Fitch.
Atrium said the hybrid attracted a broad
range of European and international
institutional debt investors, including
ACCOUNTSûWITHûAûSPECIlCûFOCUSûONû%3'ûANDû
sustainable investment portfolios.
from a new super senior revolving facilities,
to repay a US$1.43bn reserves-based lending
facility, US$650m 6.25% senior notes due
2022, and US$300m of 6.625% convertible
bonds due 12 July 2021. MIDDLE EAST
4HEûDEBTûRElNANCINGûWOULDûBEûAûBIGûSTEPû
FORWARDûTOûAûlRMERûlNANCIALûFOOTINGûFORûTHEû
company, which has long been a target of OMAN
hedge fund short sellers because of its heavy
debt load. OQ ADDS FUEL TO HIGH-YIELD ENGINE
The market was pricing in a much
slimmer chance of the company pulling off OQûFORMERLYûKNOWNûASû/MANû/ILû#OMPANYû
INTERNATIONAL ISLAMIC FINANCE DEBT
AûRElNANCINGûLASTûYEARû!SûRECENTLYûASû saw books that were six times subscribed on
BOOKRUNNERS: 1/1/2021 TO DATE
September, the 6.25% 2022s were trading at Wednesday, as the issuer uncorked a deluge
Managing No of Total Share
a cash price of just 55 cents on the dollar, of orders for a seven-year bond from a state-
bank or group issues US$(m) (%)
according to MarketAxess. The bonds were backed entity that offered ample yield.
1 HSBC 7 1,242.24 14.7 trading around 93 on Wednesday, but The company, which is rated BB– by Fitch
2 JP Morgan 4 854.76 10.1 jumped on the news of the bond offering to and is wholly owned by the sultanate of
3 Standard Chartered 6 836.94 9.9 98. /MANûTHROUGHû/MANû)NVESTMENTû!UTHORITYû
4 Goldman Sachs 3 628.57 7.4 Since September, Brent crude oil prices began marketing the May 2028 offering at
5 Citigroup 4 628.19 7.4 have climbed from around US$40 a barrel to the 5.625% area. Pricing was crunched down
6 CIMB Grp Hldgs Bhd 2 570.65 6.8 AROUNDû53ûBOOSTINGû4ULLOWSûCASHmOWû by 50bp for a US$750m print at 5.125%.
7 Emirates NBD 6 514.46 6.1 expectations. h/1ûWASûANûOUTSTANDINGûRESULTûGIVENûTHEû
8 Warba Bank 2 450.00 5.3 The company is looking to put in place level of demand and price compression,”
9 SG 1 357.14 4.2 additional oil hedges in at US$55 a barrel. said a banker familiar with the matter. “The
=9 Natixis 1 357.14 4.2 /NûTHEûCOMPANYSûFULL
YEARûEARNINGSûCALLûONû bond landed about 35bp back of the
Total 12 8,440.48 -ARCHûû#&/û,ESû7OODûSAIDûTHATûTHEû SOVEREIGNûANDû/MANûCONTINUESûTOûBEûANû
Excluding equity-related debt. difference between a US$55 oil price and interesting place for investors given the
Source: Refinitiv SDC code: J27 US$65 oil price was an additional US$1.5bn levels on offer.”

68 International Financing Review May 1 2021


-OSTûOFûTHEû/MANIûISSUINGûCOMPLEXû
COMPRISEDûREGULATEDûUTILITIESûSOû/1ûOFFEREDû
investors a chance to diversify their
exposure to a credit offering a more
attractive yield.
“The regulated utilities have predictable,
more than US$4.6bn of orders at the US$1bn
10-year deal.
The A+/A+ rated issuer, which is 100%
OWNEDûBYûTHEûEMIRATEûOFû!BUû$HABIûTHROUGHû
!BUû$HABIû$EVELOPMENTALû(OLDINGû
Company, was expected to proceed
EMERGING MARKETS MIDDLE EAST
Asian accounts were the biggest buyers at
27% followed by MENA investors at 25%.
There was also a good balance from UK,
Continental Europe and offshore US
accounts too.
Citigroup, First Abu Dhabi Bank and Standard
STABLEûCASHmOWSvûSAIDûAûSECONDûLEADûBANKERû smoothly with its offering as it ticked a Chartered were global coordinators.
“Those names trade inside the sovereign.” number of boxes for accounts. They were joined as lead managers and
For that reason he said a better reference
point on pricing was Bahrain’s Nogaholding,
WHICHûISûAûSIMILARûSORTûOFûCOMPANYûTOû/1û
Noga trades about 60bp back of its
sovereign.
!ûBANKERûAWAYûCALLEDûTHEûOUTCOMEûFORû/1û
h!$0ûWILLûGOûFANTASTICALLYûWELLvûSAIDûAû active bookrunners by HSBC, Mizuho and
banker away as books opened. “It’s Societe Generale. BNP Paribas, Credit Agricole and
government-linked, rated A+, it’s SMBC Nikko were passive lead managers.
infrastructure, it’s exactly what people like.
It’s a slam dunk.”
&ITCHûPOINTEDûTOû$0û7ORLDû"AA.2"""n û
a “blowout”, while a second banker away ASûTHEûCLOSESTûPEERûTOû!$0ûWITHûTHEûFORMERû
from the deal said that for some investors, much larger in size and geographically AMERICAS
/MANIûCREDITSûOFFEREDûAûYIELDûTHATûWASûTOOû DIVERSIlED
enticing to pass up. !$0ûHOWEVERûHASûLOWERûLEVERAGEûANDûAû
h/MANûISûAûDIVISIVEûJURISDICTIONvûSAIDûTHEû largely contracted revenue base, which ARGENTINA
second banker away. ENSURESûLONG
TERMûCASHmOWûVISIBILITYûANDû
“Some like the yield when they think of stability. OPTIMISM GROWS AS PBA DEBT
the rest of the GCC. People can put Bahrain )NDEEDûLEADSûPOINTEDûTOûOTHERû!BUû$HABIû NEGOTIATIONS PICK UP MOMENTUM
ANDû/MANûINûTHEûSAMEûBUCKETûBUTûWITHû
Bahrain you have that implicit backstop,
WHEREASû/MANûISûALMOSTûTHEûBLACKûSHEEPû
But some people love that because you get
paid a lot to take the risk – how many other
oil companies in the Middle East can you
ISSUERSûSUCHûASûENERGYûCOMPANYû4!1!û
(Aa3/–/AA–) and investment company
Mamoura (Aa2/AA/AA), as the best reference
points due to their credit rating and quality.
“Given the ratings and leverage this was
CLOSERûTOûTHOSEû!BUû$HABIûPEERSûRATHERûTHANû
There is cautious optimism brewing that a
deal between the PROVINCE OF BUENOS AIRES and
its creditors could come sooner than
anticipated on some US$7.1bn of
outstanding debt, though some investors
imagine paying you over 5%?”
Even after the substantial pricing
revision, there was enough runway left for
the bonds to perform in the aftermarket,
with a banker away spotting the bonds up
from their reoffer price of par at 101.75–102.
h/1ûISûAMONGûAûVERYûLIMITEDûNUMBERûOFû
ISSUERSûINûTERMSûOFûITSûPROlLEûINûOFFERINGûTHATû
$0û7ORLDvûSAIDûAûBANKERûFAMILIARûWITHûTHEû
matter.
“This had everything for investors in
terms of sovereign risk, the business group
and fundamentals, so it was quite easy for
people to get credit approvals quickly. The
books were testament to the strong demand
and showed there is still some room for Abu
remain sceptical given the lengthy delays in
negotiations.
“My sense is we are getting closer to
reaching a deal, we could get to a deal in
May. But it is Argentina, so you never know,”
said an investor close to the bondholder
negotiations.
The province has picked up
LEVELûOFûRISKREWARDvûSAIDûTHEûlRSTûLEADû $HABIûGOVERNMENT
RELATEDûENTITIESûANDû!BUû conversations with bondholders and has
banker. “Investors saw the opportunity. That $HABIûRISKûOVERALLv shown willingness to engage in discussions
kind of demand makes the allocations really !$0ûOPENEDûWITHûINITIALûPRICEûTHOUGHTSû to set forth a new deal, said the investor.
tough, and a lot of people jumped on that for its May 2031 bond of swaps plus the “We are starting to see more interest on
yield on offer.” 145bp area. the province’s part to try to get a deal,
/1ûSAWûAûSIMILARûHEADLINEûDEMANDûlGUREû 4!1!ûHASû!PRILûSûBIDûATûPLUSûBPû which for months we had not seen any
TOû3INGLEû!ûRATEDû!BUû$HABIû0ORTSûWHICHû while Mamoura has May 2030s at 95bp. interest. The fact that they’re willing to
was in the market on the same day. Whereas Pricing was wrenched in to 110bp. engage with us, if they continue to engage,
!$0SûBONDûWASû2EGû3ûONLYû/1SûWASûINû “This ended very close to the better rated could get us to some common ground,” he
144A/Reg S format. '2%SûLIKEû4!1!ûATûAûPREMIUMûTOûTHEû added.
/1ûTHEREFOREûTAPPEDûINTOûAûBROADERû EMIRATEûOFû!BUû$HABIûOFûABOUTûBPvûSAIDû
international investor base, said the second THEûBANKERûFAMILIARûWITHûTHEûMATTERûh4!1!û ALL INTL EMERGING MARKETS BONDS
lead. UK investors were the biggest buyers at is more towards 35bp–40bp, and the fact BOOKRUNNERS: 1/1/2021 TO DATE
35%, followed by the US at 22%. MENA !$0ûISûPERFORMINGûWELLûINûSECONDARYûSHOWSû Middle East
investors took only 10%. we got the pricing right.” Managing No of Total Share
Citigroup, HSBC, and JP Morgan were global The notes were spotted marginally up from bank or group issues US$(m) (%)
coordinators. They were joined as lead the reoffer price of 97.922, bid at over 98. 1 Standard Chartered 25 4,516.69 11.4
managers and bookrunners by First Abu !ûSECONDûLEADûBANKERûSAIDû!$0ûWASûONEûOFû 2 Citigroup 23 4,470.40 11.3
Dhabi Bank, MUFG, Natixis, SMBC Nikko and ONLYûTHREEûINVESTMENT
GRADEûNON
lNANCIALû 3 HSBC 25 4,196.91 10.6
Societe Generale. Middle East deals in the US dollar market 4 JP Morgan 18 3,047.63 7.7
this year – the other two being Saudi Arabia 5 Goldman Sachs 9 2,193.04 5.5
ANDû4!1! 6 BNP Paribas 7 1,595.53 4.0
UAE “There’s a real scarcity of this paper,” he 7 First Abu Dhabi Bk 11 1,276.43 3.2
said. 8 Barclays 10 1,224.74 3.1
ABU DHABI PORTS HITS HOME RUN As an index-eligible instrument it 9 Mizuho 10 1,184.25 3.0
appealed to international buyers, despite 10 Credit Suisse 9 1,160.90 2.9
proved the extent of investor
ABU DHABI PORTS the Reg S-only format, while the bond’s Total 54 39,729.48
demand for highly rated assets from Abu (1,!ûSTATUSûMEANTûITûWASûALSOûAûGOODû Excluding equity-related debt.
$HABIûONû7EDNESDAYûWITHûBUYERSûTHROWINGû investment for the local banks. Source: Refinitiv SDC code: L5

International Financing Review May 1 2021 69

 The country was deeply impacted by the

Latin America sees run of
SLB deals
„ ESG Pace of SLB issuance picks up, with more to come
In the past few weeks, Latin American borrowers
have sold a number of sustainability-linked bonds
with the trend expected to keep growing in the
near term amid a global push for the securities.
Out of the 15 deals issued from Latin America
in April, four of those were sustainability-
linked notes. Names like Mexican beverage
and retail company FEMSA, Mexican auto parts
manufacturer METALSA, Brazilian personal care
and cosmetics firm NATURA COSMETICOS and
Brazilian auto parts manufacturer IOCHPE-MAXION
all sold sustainability-linked debt last month.
Femsa raised €1.2bn through seven-year and
12-year notes, Metalsa raised US$300m via a
10-year bond, Iochpe-Maxion sold a US$400m
seven-year note and Natura Cosmeticos was in
the market with a US$1bn seven-year.
“We expect this to be a fast growing part of
the market with the growing emphasis on ESG
and accompanying regulation,” said Shamaila
Khan, director of emerging market strategies at
AllianceBernstein.
Although SLB issuances remain in their
infancy, these types of deals have seen a surge
from the region most likely due to pricing
advantages and because Latin American
corporates see it as a way to formalise their
existing ESG targets, said market watchers.
“Most of the issues that are coming from
Latin America are from more industrial-type
A pick-up in the negotiations follows a
LAWSUITûlLEDûATûTHEûENDûOFû-ARCHûBYûTHEû
bondholder committee, which holds the
companies that already have been reducing their
carbon emissions so this is just quantifying them
for investors in a more transparent way,” said
Denise Simon, co-head of emerging market debt
at Lazard Asset Management.
All of the SLB issuance in April came from
companies in the consumer sector.
A number of these companies may have
already had their own ESG plans and integrated
ESG culture even before thinking about issuing
bonds but are now making it more official and
taking advantage of the pricing benefit these
notes could carry, said a banker.
Past issuances from Suzano, Klabin and CMPC
have drawn outsized demand and significant
new issue concessions. All three companies
issued their bonds with negative new issue
concessions.
High demand for these types of transactions
also allows bankers to tighten deals even more,
with books often oversubscribed.
Metalsa, for example, drew around US$1bn of
interest for its 10-year SLB. Natura Cosmeticos’
books reached US$3.8bn.
“Certainly if they can come at a lower yield
that’s definitely an incentive and that’s what the
market is trying to do – to incentivise companies
to do whatever they can do to meet these goals,”
said Lazard’s Simon.
Miluska Berrospi
priority,” said an investor away from the
negotiations.
However, Argentina’s upcoming mid-term
PANDEMICûWITHûITSû'$0ûFALLINGûûINûû
one of the largest in Latin America. Fitch
EXPECTSû'$0ûTOûREBOUNDûûINû
A majority of Argentine provinces such as
Mendoza, Chubut, Cordoba, Entre Rios and
Salta have already reached restructuring
agreements with bondholders.
Representatives for the Province of
Buenos Aires and for the bondholder
committee did not return request for
comment.
PAN AMERICAN ENERGY BUCKS
ARGENTINE RISK TO PRICE NEW DEBT
The Argentine branch of oil producer PAN
AMERICAN ENERGY offered investors a new six-
year note last Tuesday, with investors
demanding a steep price to take part in a
rare offering of Argentina risk because of
concerns surrounding the nation’s
struggling economy.
Leads Citigroup, HSBC, Itau, JP Morgan, and
Santander priced the US$300m 2027
amortizing bond at 9.125%, after pricing was
tightened from guidance of 9.25%–9.50%.
Initial price thoughts were not issued for
this transaction.
That pricing level was wide compared
with the company’s 4.75% 2025 bond, which
was yielding 5.34% as of April 23, according
TOû2ElNITIVûDATAû
“I don’t like the Argentina market that
much, it’s too risky. There is a reason why
it’s at a 9% yield,” said a Latin American
trader looking at the deal.
Argentina has faced several economic
challenges in the past few years, including a
US$65bn restructuring of its sovereign debt,
negotiations to restructure provincial debt,
and talks with the International Monetary
fund to negotiate terms on some US$45bn of
outstanding obligations.
majority of the province’s debt.
4HEûCOMMITTEEûlLEDûAûCLAIMûINûTHEû5NITEDû
3TATESû$ISTRICTû#OURTûFORûTHEû3OUTHERNû
$ISTRICTûOFû.EWû9ORKûSEEKINGûJUDGMENTû
against the province due to its continuing
default on scheduled payments of interest
and/or principal relating to its bond debt.
Last week, the province announced it
would extend the expiration date on its
ELECTIONSûDUEûTOûTAKEûPLACEûINû/CTOBERûCOULDû
serve as an impetus for Province of Buenos
Aires Governor Axel Kicillof to push a deal
through.
“I think Kicillof would much rather go to
mid-term elections with this behind him,”
added the investor close to negotiations.
“They’re feeling the pressure to come to
the table. Generally the macro environment
Negotiations with bondholders paired
with an economic crisis steepened by the
Covid-19 pandemic have made investors
wary of investing in debt exposed to the
country.
“You can do all the maths but eventually
when it comes to Argentina it gets down to
FX controls and other associated risks,” said
a UK-based analyst looking at the deal.
bond exchange offer to bondholders,
MARKINGûTHEûlFTEENTHûTIMEûTHEûOFFERûHASû
BEENûEXTENDEDûSINCEûITûWASûlRSTûANNOUNCEDû
in April 2020. The new expiration date for
the offer is May 7.
for Argentina is improving, they’re doing
better now than they did a year ago. So it’s
VERYûDIFlCULTûFORûTHEMûTOûJUSTIFYûNOTûCOMINGû
up with something,” he added.
Argentina, which underwent its own
$ESPITEûTHEûRISKSûINVOLVEDûTHEûDEALûWASû
expected to pull in interest due to the
company’s international operations outside
Argentina, such as Bolivia and Mexico, said
the analyst.
$ESPITEûPROGRESSûINûNEGOTIATIONSû
however, some investors following the
situation remain sceptical that the province
will come to any agreement any time soon.
“I would not hold my breath on this one,
unless creditors cave in. The province has
sovereign restructuring last year and is
currently re-negotiating its debt
obligations with the International
Monetary Fund, has seen its economic
situation improve in the past few months
due to interest rate hikes, said Fitch in a
“It’s not purely Argentina risk, they also
have operations in Bolivia and Mexico. It’s
not just about Argentina and it’s also 50%
owned by BP so it’s not typical Argentine
corporate risk,” he added.
Fitch, which rated the deal BB–, cited the
MUCHûBIGGERûlSHûTOûFRYûANDûTHISûISûNOTûAû March report. COMPANYSûDIVERSIlEDûGEOGRAPHICûFOOTPRINTû

70 International Financing Review May 1 2021

 EMERGING MARKETS AMERICAS

STABLEûPRODUCTIONûPROlLEûANDûSTRONGû Brazilian BB/BB– rated consumer sector, Rising interest rates and Covid-19
ownership as positive drivers for the rating. which he estimated at 4.183%. infections in Brazil may have weighed on
Pan American Energy’s production, “The name [is] favoured/familiar to Natura’s ability to push pricing much
THOUGHûEXPECTEDûTOûREMAINûmATûINûû investors who use it as their sector holding,” tighter, according to a second analyst.
compared to 2020, is expected to increase to said the analyst. “Right now Brazil is risky, so for me it’s a
235,000 barrels of oil a day in 2022 and Investor interest was strong with order bit of guilt by association,” said the analyst,
surpass 250,00 by 2023, said the agency. books reaching US$3.8bn, said a source close who found the deal too expensive. “If it
Proceeds of the new bond are expected to to the deal. goes below par then I may be interested.”
fund a tender of the company’s 7.875% 2021 4HEûTRANSACTIONûISûTHEûCOMPANYSûlRSTû The new bond will carry a step-up coupon
bonds. bond deal since closing a US$2bn acquisition of 65bp should the issuer fail to meet its key
of Avon Products in January 2020. performance targets tied to reducing
Natura was last in the market in January greenhouse gas emissions and increasing
BRAZIL 2018 when it sold US$750m of its 5.375% USAGEûOFûRECYCLEDûPACKAGINGûBYû$ECEMBERû
2023 bond. Proceeds from last week’s deal 2026.
NATURA COSMETICOS RETURNS WITH will be used to repay company debt,
TIGHT SLB including its upcoming 2021 and 2023 bond ALL INTL EMERGING MARKETS BONDS
maturities. BOOKRUNNERS: 1/1/2021 TO DATE
Brazilian personal care and cosmetics “We foresee strong technical demand for the Latin America
company NATURA COSMETICOS returned to the bonds. The notes will have good liquidity in the Managing No of Total Share
market last Monday to offer a new secondary market, given their benchmark size. bank or group issues US$(m) (%)
sustainability-linked bond deal following a /THERûPOSITIVESûINCLUDEû.ATURASûIMPROVINGû
1 JP Morgan 28 7,569.96 15.7
three-year absence from the market. fundamentals and ongoing deleveraging,” said
2 Citigroup 22 5,610.81 11.6
)TûWASûALSOûITSûlRSTûDEALûSINCEûCLOSINGûITSû Lorena Reich, analyst at Lucror Analytics, in a 3 Santander 22 4,555.52 9.4
acquisition of Avon Products. note to investors. 4 Morgan Stanley 13 4,427.00 9.2
The company priced a US$1bn seven-year While the pricing is tight to the sector 5 Bank of America 15 3,736.98 7.7
bond at 4.125%, with leads Bank of America, average, the bonds are came wider than 6 HSBC 10 3,042.07 6.3
HSBC, Bradesco, Citigroup, Itau, and Morgan Lucror’s fair value estimate of high 3%. 7 Goldman Sachs 13 2,996.41 6.2
Stanley tightening pricing from initial price 4HEûlRMûCOMPAREDû.ATURAûAGAINSTûOTHERû 8 BNP Paribas 11 2,643.24 5.5
thoughts set at the mid-4% area. The bonds Brazilian BB rated consumer credits like Ba1/ 9 Barclays 6 1,907.14 3.9
were rated Ba2/–/BB. BB rated B2W and Ba1/BB rated JSM. 10 BBVA 4 1,870.01 3.9
/NEû.EWû9ORKûANALYSTûLOOKINGûATûTHEûDEALû B2W’s 4.375% 2030s bonds traded at 4.3%, Total 52 48,298.08
said it was pricing at the tight end of the while JSM’s 4.75% 2030s traded at 4.4% as of Excluding equity-related debt.
average yield on 10-year maturities in the April 21, according to MarketAxess data. Source: Refinitiv SDC code: L3

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International Financing Review May 1 2021 71

 THE FIRST STEP IN CLO ANALYSIS:
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LPC COLLATERAL
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 LOANS
Australia 74 China 74 Indonesia  Taiwan 77 Denmark 78 Italy 79 Norway 80 Poland 80 Russia 80
Switzerland 80 UK 81 United States 81 Colombia 83 Leveraged Loans 84

„ FRONT STORY CENTRAL AND EASTERN EUROPE, MIDDLE EAST AND AFRICA MARKETS

CEEMEA borrowers remain cautious

LMA hosts virtual Developing Markets Conference
Lenders keen to do deals as terms return to pre-Covid levels
The syndicated loans market across
Central and Eastern Europe, Middle East
and Africa is slowly returning to pre-
Covid conditions, but activity remains
curtailed by muted borrower appetite,
according to bankers speaking at the
Loan Market Association’s Developing
Markets Conference on Wednesday.
Loan bankers are optimistic about a
recovery across the CEEMEA region, but
despite them being keen to lend, tenors
on the rise and pricing falling to pre-
“It will be a positive year for loan
volumes (in the Middle East) with a
number of jumbo deals already in the
MARKETû"UTûWEûALSOûHOPEûFORûDEALûCOUNTû
TOûINCREASEûASûWELLû"ANKSûAREûHUNGRYû
and liquid and they want to put balance
sheets to use. We just need good assets
TOûCOMEûTOûTHEûMARKETû"UTû)ûAMû
optimistic about the year ahead,” said
Tonmoy Andalib, managing director,
head of loan syndicate distribution and
portfolio management, First Abu Dhabi
pandemic would be the main challenge
to growth in 2021.
Excluding the impact of Covid-19, 38%
of lenders considered global macro-
economic and political stability to be the
main challenge to growth, closely
followed by lack of bankable
transactions at 37%.
Nearly a third of respondents thought
THATûLOANSûFORûDEVELOPMENTûlNANCEû
institutions would show the greatest
growth in 2021, followed by commercial
Covid levels, borrowers remain cautious
about returning to the market.
“Volumes are down year-on-year due to
lack of lending opportunities,” said Zain
Zaidi, managing director, loans and
"ANK
MYSTERY SPOT
The reason for borrowers’ reluctance to
RETURNûTOûTHEûMARKETûISûDIFlCULTûTOûPINû
BANKSûATûûREmECTINGûTHEûINCREASEDû
INmUENCEûOFûTHESEûLENDERSûTHROUGHOUTû
the pandemic.
That response was a reversal of the
survey last year, when 34% of delegates
ACQUISITIONûlNANCEû#ITIûh"UTûBANKSûAREû
wide open, they are vying for assets in
primary and secondary and the reduced
tenors and increased pricing of last year has
reversed. We are back to pre-Covid times.
We are telling clients that this is as good a
time as any to access the bank market.”
4HEûSTORYûISûREmECTEDûACROSSûTHEû
diverse landscape of the CEEMEA region
from the Middle East to Russia, and
across the African continent.
In the Middle East, loan volume so far
this year has been buoyed by a number
of jumbo deals primarily from Saudi
Arabia, including a US$15bn revolving
credit facility for the Public Investment
Fund of Saudi Arabia and a one-year
extension of a US$10bn term loan
facility for oil giant Saudi Aramco.
“US$15bn sized deals are no longer
outliers, that is becoming the normal.
We already have around US$45bn of
down, and driven by a myriad reasons
across the region.
“My guess is that economies have not
grown because of the pandemic so
borrowers have fewer needs for
lNANCINGûATûTHEûMOMENTû)TûDOESNTû
apply to all borrowers, but overall it
translates into lower volumes,” said
Raouf Jundi, managing director at
MUFG.
In Africa, economies have withstood
the impact of the pandemic better than
expected, helped by extensive stimulus
PACKAGESûANDûlSCALûINTERVENTIONSûACROSSû
the continent.
“It’s heartening to see the
recovery that has been made to date
in the African syndicated loan
MARKETû"UTûDEALSûAREûSLOWûTOûCOMEû
to the market, borrowers are still
cautious about taking on leverage,”
said Jo Maharaj, head of loan
said commercial banks would provide
the biggest growth, while development
lNANCEûINSTITUTIONSûRECEIVEDûûOFûTHEû
vote.
In the most recent survey, 52% of
respondents said green and sustainable
lNANCEûSOLUTIONSûPOSEDûTHEûPOTENTIALûFORû
the greatest innovation in a developing
markets, down from 55% last year.
Some 51% of delegates said a lack of
government/regulatory support for ESG
WOULDûBEûTHEûMOSTûSIGNIlCANTûBARRIERûTOû
ESG investment in developing markets,
followed by 23% who voted for a lack of
borrower awareness around ESG
principles.
On the question of what is the
primary responsibility of lenders in
promoting ESG-linked loans in the
developing market, voters were split
between offering sustainability-linked
loans to borrowers (30%) and educating
deal volume at various stages of SYNDICATIONû2-" borrowers as to ESG principles (28%).
completion which puts us in spitting
distance of 2020 already,” said Zaidi.
“Saudi is the main country driver of deal
volume currently, and is on track to
become the number one country for
deals in the region – it could outpace the
UAE in 2021.”
Lenders are also hoping for an uptick
)Nû2USSIAûDEALûmOWûREMAINSûMUTEDûBYû
the sanctions imposed by the West
following the Kremlin’s annexation of
the Crimea in 2014, but pricing here has
also returned to pre-Covid levels.
COVID HANGOVER
Covid remains the main focus and was
In 2021, South Africa is expected to
offer the most opportunities for
syndicated lending in Sub-Saharan
Africa at 43.7%, followed by Nigeria at

Across CIS and Russia, Russia is
expected to offer the most lending
OPPORTUNITIESûATûûFOLLOWEDûBYû
in actual deal numbers as borrowers REmECTEDûINûTHEû,-!SûSURVEYûOFûLENDERSû 5KRAINEûATûûACCORDINGûTOûTHEû
BECOMEûMOREûCONlDENTûABOUTûRETURNINGû at the conference, where 53% of survey.
to the market. respondents said the fallout from the Sandrine Bradley

International Financing Review May 1 2021 73


ASIA-PACIFIC
YEARûlNANCIALûRESULTSû March 2019.
AUSTRALIA
RAMSAY MANDATES FOR SLL
Private hospital operator RAMSAY HEALTH CARE
has mandated four banks on a A$1.39bn
(US$1.08bn) sustainability-linked loan for
RElNANCINGûANDûGENERALûCORPORATEûPURPOSES
Commonwealth Bank of Australia, HSBC,
MUFG and National Australia Bank are the
mandated lead arrangers and bookrunners
of the multi-currency revolving credit
As at December 31, Viva Energy had a
US$700m revolver maturing on March 28
2022, which comes with a one-year
extension option, according to the
COMPANYSûFULL
ANNOUNCEDûONû-ARCHû
Last year in April, Waypoint REIT,
formerly Viva Energy REIT, said it was
looking to repay one of its lenders and had
agreed to revise a loan with another lender
as part of a debt review event it concluded
following the exit of controlling
shareholder, Viva Energy.
Earlier that month, the REIT signed a
A$275m four-year club loan with four banks.
In early 2019, Viva Energy closed a
53MûTHREE
Proceeds from that term loan were
PARTIALLYûUSEDûTOûRElNANCEûAû2MBBNû
bridge facility, which backed the
construction of the Shanghai factory in
&ORûTHEûlRSTûTHREEûMONTHSûENDEDû-ARCHû
31 2021, the group’s revenues in China
totalled Rmb3.043bn, increasing 238.1%
compared with Rmb900m a year earlier,
according to its quarterly report.
SHUIFA SEEKS US$200m
State-owned conglomerate Shuifa Group is in
the market with a US$200m three-year loan.
Deutsche Bank is the sole mandated lead
YEARûRElNANCINGûVIAû!.:û ARRANGERûANDûBOOKRUNNERûOFûTHEûlNANCINGû
facilities, which comprise a A$450m facility -IZUHOû.ATIONALû!USTRALIAû"ANKûANDû-5&'û which offers an interest margin of 180bp
!ûAû!MûFACILITYû"ûAû!MûFACILITYû#û as leads. over Libor.
and a US$150m facility D. Viva Energy supplies approximately a MLAs joining with US$30m or above
Tranche A matures on July 31 2024, quarter of Australia’s liquid fuel receive a top-level all-in pricing of 205bp via
TRANCHEû"ûONû*ULYûûûANDûTRANCHESû#û requirements. It is the exclusive supplier of a 75bp fee, while lead arrangers with
ANDû$ûONû*ULYûû Shell fuels and lubricants in the country US$15m–$29m will earn an all-in pricing of
&ACILITYû!û"ûANDû#ûAREûAVAILABLEûINû!USSIEû
and US dollars and euros, while facility D is
only available in US dollars.
These facilities will be sustainability-
linked according to the APLMA
Sustainability Linked Loan Principles and
will incorporate some performance
indicators.
0ROCEEDSûWILLûRElNANCEûEXISTINGûFACILITIESû
maturing in November 2022 and also fund
general corporate purposes.
As at December 31, the company’s
funding group, which excludes unit Ramsay
Sante and joint venture Ramsay Sime Darby
Healthcare, had cash and undrawn debt of
A$2.3bn.
Leverage at Ramsay and its wholly owned
funding group was 3.4 times and 1.0 times,
respectively, as at that date.
Earlier in April, Ramsay Sante completed
AûõBNûRElNANCINGû4HEûCOVENANT
LITEû4,"û related to production at Gigafactory
ISûSPLITûINTOûõMûlVE
YEARûANDûõMûSIX
through a network of more than 1,330
service stations.
CHINA
TESLA SHANGHAI REPAYS
A subsidiary of Nasdaq-listed electric-car
MAKERû4ESLAûINû!PRILûREPAIDû53MûINû
aggregate principal of a secured term loan
in connection with the construction of
Gigafactory Shanghai.
The facility for TESLA (SHANGHAI) has been
terminated and the unused amount of
US$758m as of March 31 2021 is no longer
available.
In May last year, Tesla (Shanghai) obtained
a revolving credit facility of up to Rmb4bn-
EQUIVALENTû53M ûFORûEXPENDITURESû
Ping An Bank is expected to provide the
BPûVIAûAûBPûFEE
Shandong-based Shuifa Group is the
guarantor, while its wholly owned
subsidiary, SHUIFA INTERNATIONAL HOLDINGS (BVI),
is the borrower.
In March, the borrower raised US$200m
from a three-year green bond for project
CONSTRUCTIONûANDûRElNANCINGû4HEûSENIORû
unsecured bonds were priced at par, to yield 4%.
Shuifa Group controls key water sources
and reservoirs within the province. It also
has businesses in environmental services,
clean energy and agriculture.
HYGEIA EYES HOSPITAL BUY
Oncology healthcare services provider HYGEIA
HEALTHCARE HOLDINGS is seeking a US$152m
three-year loan to back its proposed
acquisition of Etern Group.
Shanghai.
year tranches.
4HEûlVE
YEARûTRANCHEûWASûPRICEDûATûBPû Shanghai Pilot Free Trade Zone Special Area
over Euribor and an OID of 99.75, while the
six-year portion was priced at 275bp over
Euribor and at par.
The borrowing also included a €100m capital
expenditure facility and a €100m revolver.
The margin is linked to environmental,
lNANCINGûWHICHûOFFERSûANûINTERESTûMARGINû
)NDUSTRIALûANDû#OMMERCIALû"ANKûOFû#HINAû of 112bp over Libor.
branch was the lender of that non-recourse ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY
loan, which is scheduled to mature in June. SYNDICATED VOLUME (INCLUDING JAPAN)
It can be drawn in either renminbi or US BOOKRUNNERS: 1/1/2021 TO DATE
dollars and offers interest margins of 35bp Managing No of Total Share
below the market quoted interest rate bank or group issues US$(m) (%)
published by an authority designated by the 1 Bank of China 134 31,286.64 18.6
social and governance targets, rising and 0EOPLESû"ANKûOFû#HINAûANDûBPûOVERûONE
2 Mizuho 188 28,650.26 17.1
falling by 10bp. year Libor, respectively. 3 MUFG 347 24,588.53 14.6
In December 2019, the company obtained 4 Ag Bank of China 20 12,740.78 7.6
VIVA ENERGY NETS US$700m REFI a Rmb9bn three-year term loan and a 5 Sumitomo Mitsui 107 10,815.28 6.4
Rmb2.25bn one-year revolver from a 6 China Dev Bk 4 5,795.14 3.4
VIVA ENERGY GROUP and its subsidiaries have syndicate of Chinese banks. 7 Bank of Comms 9 3,296.44 2.0
raised US$700m through revolving credit That deal, which was available in 8 Indl & Comm Bk China 14 3,019.18 1.8
FACILITIESûFORûRElNANCING renminbi or US dollars, pays interest 9 China Merchants Bk 8 2,973.44 1.8
ANZ, National Australia Bank, Mizuho Bank, MARGINSûOFûBPûBELOWûTHEûMARKETû 10 China Construction 14 2,727.48 1.6
MUFG and United Overseas Bank were lenders quoted interest rate published by an Total 1,011 167,993.48
to the latest loan, which matures in March AUTHORITYûDESIGNATEDûBYûTHEû0"O#ûANDû Proportional credit
2024. 130bp over one-year Libor, respectively. Source: Refinitiv SDC code: S3a

74 International Financing Review May 1 2021


Fitch downgrades Sritex on missed payment
„ INDONESIA Interest payment of around US$850,000 was due on April 23 for US$350m loan
Indonesian textile manufacturer SRI REJEKI
ISMAN has missed an interest payment on
an outstanding US$350m syndicated loan,
prompting Fitch to downgrade its credit rating to
C from CCC−.
An interest payment of around US$850,000
was due on April 23 for the outstanding
three-year syndicated loan, for which Sritex
is negotiating a standstill agreement with its
lenders.
Failure to pay within five business days of
the due date will constitute an event of default
under the facility’s documentation.
Inability to roll over the revolver would
exacerbate Sritex’s liquidity pressure, as the
company funds its daily operations with cash.
It has chosen not to make the interest payment
as it has not secured the standstill agreement,
Fitch noted in its report.
Sritex is reliant on its own cashflow generation
to fund its operations as external funding access
has weakened, Fitch warned. Decreasing access
On April 25, Hygeia Healthcare
announced that it has agreed to acquire all
of Etern, an investment holding company
that holds a 98% equity interest in Suzhou
Yongding Hospital, in a deal valued at
Rmb1.73bn-equivalent.
to working capital will also limit Sritex’s ability to
increase revenue.
Fitch expects Sritex’s cashflow from
operations to remain negative in 2021 due to
challenging working-capital management,
which has also resulted in a drain on the
company’s cash balance. It will be difficult for
Sritex to address its 2021 debt maturity and
maintenance capex without any additional
external funding.
The C rating denotes a default or default-like
process has begun, or the issuer is in standstill,
or for a closed funding vehicle, that payment
capacity is irrevocably impaired, according to the
report.
The ratings agency may downgrade the
ratings further to restricted default if no
payment is made at the expiration of the five
days.
Sritex and its subsidiaries are the subjects
of various legal actions. On April 21, Sritex
applied for a moratorium to allow it to continue
An interest reserve account, inter-
company loan and all other assets of the
borrowers and guarantors make up the
SECURITYûFORûTHEûlNANCING
Asia International School last raised a
US$120m-equivalent term-loan in December
LOANS ASIA-PACIFIC
negotiations with banks after an onshore
creditor filed a petition to begin a restructuring
of the Indonesian company.
The textile producer wants time to complete
restructuring talks with lenders of its bilateral
facilities following the filing from the trade
creditor on April 20 over what the company calls
disputed debt. The petition could trigger cross
defaults across its debt.
In November, the borrower was seeking
consent from lenders to extend the maturity of
the US$350m loan it raised in March 2019 by
two years.
Citigroup, DBS Bank and HSBC were the
mandated lead arrangers and bookrunners of
the loan, which attracted 24 lenders in general
syndication.
The deal offered top-level all-in pricing of
315bp (onshore) and 275bp (offshore) based on
interest margins of 290bp (onshore) and 250bp
(offshore) over Libor.
Chien Mi Wong
Fortune Oil PRC Holdings is the borrower,
while parent Fortune Oil is the guarantor.
0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû
general corporate purposes.
Fortune Oil manages investments and
operations in oil and gas supply and
Suzhou Yongding Hospital is a private, for-
PROlTû#LASSû))ûGENERALûHOSPITALûINû3UZHOUûINû
Jiangsu province.
After the completion, Etern will provide a
guarantee to the loan.
In 2020, the group’s revenues totalled
û5"3ûWASûTHEû-,!"ûOFûTHEûFACILITYû infrastructure projects in China.
which attracted three other lenders.
Asia International School is the holding
company of Harrow International HONG KONG
Management Services, Harrow International
Schools, Innovation Leadership Academies CHOW TAI FOOK LAUNCHES
2MBBNûANDûGROSSûPROlTûWASû2MBMû and Little Lions International Kindergartens.
rising 29.1% and 45.4% respectively over Conglomerate CHOW TAI FOOK ENTERPRISES has
2019. FORTUNE OIL LIFTS LOAN launched a HK$4bn-equivalent (US$515m-
EQUIVALENT ûlVE
YEARûLOANûINûADDITIONûTOû
ASIA INTL SCHOOL RETURNS
ASIA INTERNATIONAL SCHOOL has launched a
US$135m three-year facility into
syndication, returning to the loan markets
after over two years.
Bank SinoPac, Chiyu Banking Corp and Hang
Seng Bank are the mandated lead arrangers
and bookrunners of the transaction, which
pays an interest margin of 230bp over Libor
and has an average life of 2.8 years.
MLAs with tickets of US$30m and above
BIRDûFEEûFORû
receive a top-level all-in pricing of 287bp via
Hong Kong-headquartered energy company
FORTUNE OIL PRC HOLDINGS has increased a
three-year loan to US$431m-equivalent from
an original US$400m-equivalent target after
attracting 11 lenders in syndication.
China Citic Bank International and UBS were
the mandated lead arrangers and
bookrunners of the transaction, which
offered a top-level all-in pricing of 285bp via
an interest margin of 225bp over Hibor/
,IBORûANDûANûAVERAGEûLIFEûOFûûYEARSû
Mandated lead arrangers are Ping An
Bank, Bank of East Asia and Hang Seng Bank.
already being in the market with another
smaller borrowing for a luxury apartment
development in Australia.
Bank of Communications Hong Kong branch and
China Citic Bank International are the mandated
lead arrangers, bookrunners and underwriters
of the latest transaction, which is available in
Hong Kong or US dollars.
The deal offers an interest margin of
120bp over Hibor or Libor and has an
average life of 4.4 years.
"ANKSûRECEIVEûAûBPûEARLY
committing before May 21.
AûPARTICIPATIONûFEEûOFûBPûWHILEûLEADû Lead arrangers are China Minsheng Banking Senior MLAs with tickets of HK$1bn-
arrangers with US$15m–$29m earn an all-in Corp, Chiyu Banking Corp and Fubon Bank. equivalent or more will earn a top-level
of 277bp via a fee of 130bp. Arrangers are China Construction Bank, CMB ALL
INûPRICINGûOFûBPûBASEDûONûANûUPFRONTû
Asia International School is the guarantor Wing Lung Bank, Luso International Bank, FEEûOFûBPûWHILEû-,!SûWITHû(+Mn
of the loan, while several of its subsidiaries Shanghai Pudong Development Bank and Tai $999m commitments receive an all-in of
are co-borrowers. Fung Bank. 158bp through a fee of 155bp.

International Financing Review May 1 2021 75

 Tokyo steps up transition push
„ JAPAN Transition finance guidelines imminent after surprise new 2030 emissions target
Japan is preparing to roll out interest rate
subsidies for ¥1trn (US$9.2bn) of transition
financings after announcing tougher emissions
targets that will push its biggest banks to do
more to address climate change.
The Ministry of Economy, Trade and Industry
(METI) is planning to subsidise borrowing costs
for transition projects by up to 20bp over the
next three years – covering a significant portion
of funding costs in low-rate Japan. The details of
the transition finance programme are expected
as early as May and will be in accordance with
the International Capital Market Association’s
climate transition finance handbook which was
published last December.
While banks and borrowers have been
working towards the country’s goal of becoming
carbon-neutral by 2050, the government
ramped up the pressure on April 22, when
Prime Minister Yoshihide Suga pledged to cut
greenhouse gas emissions by 46% by 2030
from levels recorded in 2013, up from a previous
target of 26%.
“This year will be a turning point as
formulating long-term management plans
should be the biggest challenge for Japanese
companies,” said Shinichi Tsunoda, general
manager of sustainable business promotion
at Mizuho Bank. “The target of 46% by 2030
is a shocking figure. I don’t think anyone had
imagined a significant increase in the target at
this time a few months ago. Mizuho’s biggest
challenge is how to support it.”
Several companies in high-emission industries
are already exploring ways to finance their shift
to a low-carbon future.
Shipping company KAWASAKI KISEN KAISHA
agreed a ¥5.9bn (US$54m) transition loan in
March, the country’s first climate transition
,EADûARRANGERSûWITHû(+MnMû
tickets earn an all-in of 153bp based on a
135bp fee, while arrangers with HK$200m–
$399m tickets get an all-in of 148bp via a
113bp fee.
The all-in calculations include the early-
bird fee.
loan, and companies in industries such as steel,
chemicals, power, oil and gas have approached
lenders to raise funds via transition finance.
Mizuho Bank, MUFG and SMBC have been
working with METI to work out a detailed
roadmap for transition finance for each industry.
“Listed companies have been accelerating their
efforts in environmental, social and governance
recently. In particular, since the Japanese
government’s carbon neutral declaration, corporate
awareness has increased dramatically, and the
number of dialogues with customers has increased,”
said Munehiro Goda, senior vice-president of
sustainable business promotion at SMBC.
ATTRACTIVE INCENTIVES
The government’s subsidy programme is
expected to encourage more companies to
consider transition loans, which would be tied to
output-oriented goals.
Eligible borrowers will also receive a 10bp
discount in interest margins and another
identical cut if they achieve sustainability
performance targets.
METI will also subsidise the cost of third-party
assessments.
“Until now, sustainable finance was said to
have no interest rate merit except for only one-
time subsidy at the time of syndication. But for
transition finance, an interest replenishment
system being discussed would be an incentive,”
said Tomoko Hirabayashi, deputy general
manager of syndicated finance at Mizuho.
Despite the attractive incentives to borrowers,
lenders are concerned about high risks involved
in some deals.
“In some sectors, technologies have not
yet been established for how they can achieve
carbon neutrality in 2050. In transition finance,
INDIA
TATA TAPS FOR ELECTRONICS UNIT
Conglomerate Tata Group has signed a
US$290m seven-year loan for a new
there will be cases where it was difficult to
support with conventional indirect finance,
how financial institutions can evaluate deals
and get credit approval and how loan assets
are classified by the authorities, for example,”
said Taro Sugimachi, vice-president in the
sustainable business office of the solution
products division at MUFG.
BROWN TO GREEN
Kawasaki Kisen Kaisha’s transition loan also
doubles up as a green loan with proceeds going
towards buying an environmentally friendly
liquefied natural gas-fuelled car carrier.
Japan Credit Rating Agency assigned its
highest green evaluation to the loan. Mizuho
was the arranger, while Sumitomo Mitsui Trust
Bank joined as co-arranger.
Although only two banks participated in the
debut deal, the transition loan could lead to
wider syndication in the future as more lenders
such as regional banks look to meet sustainable
finance targets and support the Task Force on
Climate-Related Financial Disclosures created in
2015 by the Financial Stability Board, according
to bankers.
Green/ESG loan volume in Japan is on
track with US$3.287bn raised so far this year,
compared to US$9.55bn in 2020, which is
almost triple the US$3.514bn raised in 2019,
according to Refinitiv LPC data.
MUFG has raised its sustainable financing
target to ¥35trn by fiscal year 2030 from the
original ¥20trn target, while Mizuho aims to
provide ¥25trn by the same year. SMBC is
targeting ¥10trn in green financing by FY2030,
of which more than half has come from loans
so far.
Wakako Sato
INDONESIA
KIRANA MEGATARA SEEKS REFI
Rubber processor KIRANA MEGATARA has
launched a US$272m three-year borrowing
&UNDSûAREûFORûRElNANCINGûWORKINGûCAPITALû
and general corporate purposes.
Chow Tai Fook, along with Far East
Consortium, is also seeking a loan of around
A$320m (US$247m) from relationship banks
for a luxury apartment development in
Australia’s Queensland state.
electronics manufacturing unit.
TATA ELECTRONICS is the borrower of the club
loan from BNP Paribas, Mizuho Bank, MUFG
and SMBC.
The conglomerate was also in discussions
FORû)NDIANûRUPEEûlNANCINGûOFûAROUNDû
US$270m-equivalent for the subsidiary.
into limited syndication.
OCBC and Rabobank are the mandated lead
arrangers and bookrunners on the deal,
which comprises a US$250m revolving
credit facility and a US$22m amortising
term loan.
The transaction pays interest margins of
ANZ ISûTHEûSOLEû-,!"ûOFûTHATûDEALûWHICHû Tata began talks last year for a loan to set 220bp (offshore) over Libor and 250bp
has a tenor about three years and offers up a plant for manufacturing mobile phone (onshore).
an all-in pricing in the mid-200bp over components in the southern Indian state of 4HEûBORROWINGûWILLûRElNANCEûAû53Mû
""39û Tamil Nadu. multi-tranche loan which was signed in

76 International Financing Review May 1 2021


ûWITHûEIGHTûBANKSû4HATûLOANûWASû
subsequently amended and extended in
2019.
4HATûlNANCINGûCOMPRISEDûAû53Mû
three-year revolving credit, a US$30m 4.5-
YEARûTERMûLOANûANDûAû53MûlVE
YEARûTERMû Renewables, which is expected to be
LOANûATûTHEûTIMEûOFûSIGNINGûINû!UGUSTûû
Kirana Megatara produces crumb rubber
YEARû
management will hold between 40% and
ûOFû0ACIlCû2ADIOLOGY
Infratil will repay the bridge loan and
other drawn debt facilities from the
proceeds of the sale of its stake in Tilt
extension option.
completed by September 30.
As at March 31, Infratil had NZ$342m of
LOANS EMEA
E.Sun Commercial Bank and SMBC are the
mandated lead arrangers and bookrunners
of a US$500m three-year loan for local
Formosa Plastics unit FORMOSA RESOURCES
AUSTRALIA. That loan carries a two-year
First Commercial Bank and Taiwan Cooperative
BankûAREûTHEû-,!"SûOFûAû53MûlVE
that is exported to tyre factories around the
world and for domestic use.
INDOMOBIL FINANCE CLUBS
INDOMOBIL FINANCE INDONESIA has clubbed its
US$275m three-year amortising facility with
10 banks, avoiding the syndicated loan
market where it had met with a poor
reception on its last visit.
Bank BTPN, Bank of China, Bank Mandiri, DBS
INûOFûBPûVIAûAûBPûFEE
Bank, Korea Development Bank, Mizuho Bank,
drawn debt and NZ$353m of undrawn loans.
A NZ$50m loan that was due in June this
YEARûHASûBEENûRElNANCED
4HEûCOMPANYûHASûAû.:MûLOANû
maturing in February 2022 and bonds of
NZ$93.9m and NZ$93.7m due in June this
year and next year, respectively.
In December, Infratil and Morrison & Co
Growth Infrastructure Fund completed the
ACQUISITIONûOFûûANDûûSTAKESû
respectively in Australian diagnostic
imaging business Qscan Group Holdings.
lNANCINGûFORû&ORMOSAû2ESOURCESû#ORPûAû
Taiwan-based unit of Formosa Plastics.
The two loans offer interest margins of
75bp over Libor. The borrower will pay any
excess interest rate beyond a 40bp
difference between TAIFX and Libor.
MLAs joining the US$500m loan with
tickets of US$100m or more earn an all-in of
78bp via a 9bp participation fee, while lead
arrangers with US$50m–$99m receive an
ALL
The ticket levels for the US$430m are:
OCBC Bank, RHB Bank, SMBC and United !.:û#OMMONWEALTHû"ANKûOFû!USTRALIAû MLAs joining with US$120m and above will
Overseas Bank are the lenders of the multi-
lNANCEûCOMPANYSûLATESTûDEAL
Last September, the borrower closed a
joining with US$30m–$49m are offered 3bp.
US$240m three-year facility with only two
lenders joining in general syndication despite
HAVINGûPAIDûUPûFORûLIQUIDITYûINûAûDIFlCULTû
-5&'û2OYALû"ANKûOFû#ANADAûWEREû
mandated lead arrangers, underwriters and
BOOKRUNNERSûOFûAû!Mû53M ûlVE
year loan backing the acquisition.
0ACIlCû2ADIOLOGYûISûTHEûLARGESTûPRIVATEû
diagnostic imaging service provider in New
receive an 8bp fee, while co-arrangers taking
53MnMûEARNûBPû0ARTICIPANTSû
Proceeds from the US$500m loan will
fund the stage two construction of the iron
ore mining project in Western Australia,
environment amid the coronavirus pandemic.
The latest transaction is said to pay similar
SIZEDûLOANûCOMPLETEDû
pricing as the September deal, which paid top-
level all-in pricing of 185bp (onshore) and
175bp (offshore) based on interest margins of
135bp (onshore) and 125bp (offshore) over
,IBORûANDûANûAVERAGEûLIFEûOFûûYEARS
Indomobil Finance had a much better
reception a year earlier in June 2019 when it
raised a US$290m three-year loan that was
:EALANDûOPERATINGûûCLINICSûINûTHEû3OUTHû
Island and lower North Island.
SINGAPORE
SUNTEC REIT DRAWS TWO
A £200m loan backing SUNTEC REAL ESTATE
INVESTMENT TRUST‘s acquisition of a stake in
while the US$430m borrowing will
RElNANCEûANûIDENTICAL
in March 2017.
Formosa Plastics’ units – Formosa
Petrochemical Corp, Formosa Plastics Corp,
Nan Ya Plastics Corp and Formosa Chemicals
& Fiber Corp – are providing letters of
support for the two latest deals.
The iron ore project is a joint venture
between Formosa Steel (31%), a unit of
nearly tripled from US$100m after nine
banks joined in general syndication.
That borrowing paid a top-level all-in pricing
of 135bp (onshore) and 125bp (offshore) based
"RIDGE
TWOûOFlCEûBUILDINGSûINûTHEû5+ûHASûCLOSEDû &ORMOSAû0LASTICSûANDû&-'û)RONû"RIDGEû 
with two lenders joining in syndication. Australia’s Fortescue Metals Groupand
DBS Bank was the mandated lead arranger, #HINASû"AOSTEELû'ROUPûOWNû&-'û)RONû
BOOKRUNNERûANDûFACILITYûAGENTûOFûTHEûlVE
on margins of 105bp (onshore) and 95bp YEARûlNANCINGûWHILEûOCBC Bank and RHB
(offshore) over Libor respectively, and an Bank joined as participants.
AVERAGEûLIFEûOFûûYEARSû Wholly owned subsidiary SUNTEC REIT UK 1 is
The borrower, controlled by the Indomobil
Group, provides motor vehicle and heavy-duty
EQUIPMENTûlNANCINGûSERVICES
NEW ZEALAND
INFRATIL TAPS BRIDGE
INFRATIL is tapping a NZ$350m (US$254m)
bridge loan for its proposed acquisition of a
MAJORITYûSTAKEûINû.EWû:EALANDSû0ACIlCû
Radiology Group.
The 12-month bridge loan will fund
Infratil’s purchase of between 50.1% and
ûOFûTHEûDIAGNOSTICûIMAGINGûBUSINESSûFORûAû
total consideration of up to NZ$350m.
The deal implies an enterprise value of
.:MûFORûTHEûRADIOLOGYûlRM
Upon completion of the acquisition,
existing doctor shareholders and
THEûBORROWERûOFûTHEûLOANûWHILEû(3"#û
Institutional Trust Services (Singapore) is the
guarantor.
Proceeds fund the purchase of a 50% stake
INûTWOû'RADEû!ûOFlCEûBUILDINGSûWITHû
ancillary retail in the Victoria district of
London.
ARA Trust Management (Suntec) is the
manager of Suntec REIT.
TAIWAN
FORMOSA PLASTICS PAYS LESS
Conglomerate FORMOSA PLASTICS GROUP has
launched two loans totalling US$930m for
its iron ore mining project in Australia at
better terms (75bp over Libor) than its
previous borrowing three months ago (80bp
over).
International Financing Review May 1 2021
EUROPE/MIDDLE
EAST/AFRICA
BOTSWANA
GOLDMAN TO LEAD SOVEREIGN LOAN
Goldman Sachs has been mandated to arrange
ANûUPûTOû53MûLOANûFORûBOTSWANA to
lNANCEûNEWûINFRASTRUCTUREûPROJECTSûANDûTOû
RElNANCEûRECENTLYûCOMPLETEDûPROJECTS
"OTSWANASû-INISTRYûOFû&INANCEûSAIDûITûWASû
LOOKINGûFORûAû53MûORûAûõMûLOANû4HEû
loan could be denominated in euros and
dollars and will have a 10 to 15-year maturity
and a minimum three-year grace period.
The loan will be guaranteed by the
Multilateral Investment Guarantee Agency
(MIGA).
77
 4HEûlRSTûDRAWDOWNûOFûTHEûLOANûISûEXPECTEDû
to be made by mid-2021 and repayments will
be made biannually starting from mid-2024 at
the earliest, according to a request for
proposals document that was posted on the
Ministry of Finance’s website in January.
"OTSWANAûISûSEEKINGûFUNDINGûTOûMEETûTHEû
costs of a variety of projects, including those
recently completed, ongoing projects and
PLANSûTHATûAREûTOûSTARTûDURINGûTHEûlNALûTWOû
years of its National Development Plan 11
Public Investment Programme.
.$0ûûISû"OTSWANASûlRSTûMEDIUM
TERMû sustainable materials use, and increased
plan towards the implementation of its
The facility is available for general
corporate purposes, including guarantees
for wind power projects.
Pricing will be adjusted based on
sustainability-linked performance targets,
which measure Vestas’ ability to reduce its
carbon footprint and enhance workplace
safety.
Subsequent targets will be added to
improve the carbon footprint across the
company’s supply chain.
Performance targets will also cover more
Finnair suffered severe losses from the
recyclability across the turbine value chain.
fund Vaekstfonden, was due to mature in
December 2021.
FINLAND
FINNAIR AMENDS €175m RCF
FINNAIR has amended terms on its existing
€175m revolving credit facility to avoid a
possible covenant breach in the second
quarter of 2021.
travel restrictions imposed in response to
6ISIONûûWHICHûAIMSûTOûTURNûITûINTOûAû HSBC and SEB are coordinating mandated the Covid-19 pandemic.
high-income country through sustainable lead arrangers and bookrunners on the The RCF was arranged in January 2019 via
economic development, human and social lNANCING COORDINATINGûBANKû.ORDEAû"ANKûANDû$ANSKEû
development, sustainable environment and Banco Santander, Citigroup, DNB, Nordea, "ANKû/0û#ORPORATEû"ANKû3%"ûANDû
governance, peace and security. Societe Generale and UniCredit joined as Swedbank.
No more than 50% of the total facility will mandated lead arrangers and bookrunners, The facility, which is due to mature in
BEûUSEDûFORûTHEûRElNANCINGûOFûPROJECTû
expenditure already undertaken, the RFP said.
-)'!ûISûPROVIDINGû"OTSWANAûWITHûITSûNON
arrangers.
HONOURINGûOFûSOVEREIGNûlNANCIALûOBLIGATIONSû
cover, which provides protection against
losses if a sovereign or sovereign-related
entity fails to make a payment under a loan
facility to an international lender.
"OTSWANAûISûRATEDû"""ûBYû30ûANDû!ûBYû
Moody’s.
DENMARK
VESTAS BAGS €2bn SLL
while BNP Paribas, Danske Bank, JP Morgan and
Standard Chartered joined as mandated lead
during the second quarter of 2020 and reset to
(3"#ûWASûDOCUMENTATIONûAGENTûWHILEû
3%"ûISûTHEûFACILITYûAGENTûANDûSUSTAINABILITYû
adviser.
PANDORA SECURES SLL
Jewellery brand PANDORA has secured a
€950m sustainability-linked revolving credit
FACILITYûTOûRElNANCEûITSûEXISTINGûUNDRAWNû
credit facility, which was due to mature in
May 2022.
The new facility, which will form part of
*ANUARYûûHADûONEûlNANCIALûCOVENANTû
adjusted gearing of 175%, which was waived
225% until June 2021, reducing to 200% until
June 2022 before reverting to 175% thereafter.
At end of 2020 adjusted gearing was
153.2%.
In March 2021, the European Commission
approved a €350m tranche of an up to
€400m hybrid loan for Finnair from the
State of Finland.
The remaining around €50m share will be
brought to approval by the EC at a later
stage.
Wind turbine maker VESTAS WIND SYSTEMS has
signed a €2bn multi-currency revolving
credit facility with a margin linked to the
company’s sustainability performance.
THEûCOMPANYSûLIQUIDITYûRESERVEûHASûAûlVE
year maturity with extension options for a FRANCE
further two years.
Pricing on the facility is tied to Pandora’s EURONEXT EYES BRIDGE REFI
progress on two sustainability goals
4HEûlNANCINGûWHICHûREPLACESû6ESTASû comprising becoming carbon neutral in its Pan-European exchange EURONEXT is
undrawn €1.15bn revolving credit facility own operations by 2025 and using only PLANNINGûTOûRElNANCEûTHEûõBNûBRIDGEûLOANû
which was signed in 2017 and is the recycled silver and gold by 2025. it used to back its €4.325bn cash acquisition
COMPANYSûlRSTûSUSTAINABILITY
LINKEDû Pandora switched to using 100% OFû"ORSAû)TALIANAûFROMûTHEû,ONDONû3TOCKû
lNANCINGûHASûAûlVE
YEARûMATURITYûWITHûTWOû renewable energy at its Thai crafting Exchange Group, which completed on
one-year extension options. FACILITIESûINûû"YûûTHEûCOMPANYû Thursday.
aims to become carbon neutral across all of The bridge loan will be repaid through a
EMEA LOANS BOOKRUNNERS – FULLY its operations and move entirely to using €1.8bn of new equity through a rights issue
SYNDICATED VOLUME recycled silver and gold, which have and €1.8bn of debt issued through the debt
BOOKRUNNERS: 1/1/2021 TO DATE SIGNIlCANTLYûLOWERûGREENHOUSEûGASû capital markets with long-term maturities.
Managing No of Total Share emissions than newly mined metals. %URONEXTûHASûALSOûSIGNEDûAûNEWûõMû
bank or group issues US$(m) (%) The RCF is provided by Pandora’s main revolving credit facility, replacing its
1 BNP Paribas 63 15,816.55 9.4 relationship banks, including Nordea, Danske EXISTINGûõMû2#&ûREmECTINGûTHEûINCREASEDû
2 Credit Agricole 46 10,989.86 6.5 Bank, UniCredit, SEB and BNP Paribas. size of the group.
3 Deutsche Bank 31 8,710.09 5.2 .ORDEAûANDû$ANSKEû"ANKûAREûJOINTû The bridge loan was arranged in October
4 JP Morgan 24 8,341.19 5.0 coordinators. Nordea acted as 2020 via coordinating bookrunners and
5 UniCredit 32 8,326.65 4.9 documentation agent and sustainability MANDATEDûLEADûARRANGERSû"ANKûOFû!MERICAû
6 Credit Suisse 23 8,158.95 4.8 COORDINATORûWHILEû$ANSKEû"ANKûACTEDûISû #REDITû!GRICOLEû#)"û(3"#ûANDû*0û-ORGAN
7 HSBC 30 7,688.54 4.6 facility agent. The loan, which had an initial maturity
8 SG 29 6,998.96 4.2 Pandora has also repaid a €400m club loan date of September 11 2021 with two six-
9 Sumitomo Mitsui 17 6,560.20 3.9 which was put in place in May 2020 to secure month extension options, paid an initial
10 Citigroup 23 6,408.40 3.8 LIQUIDITYûDURINGûTHEû#OVID
ûCRISISûVIAû".0û margin of 45bp over Euribor, stepping up
Total 182 168,402.98 0ARIBASû$ANSKEû"ANKû.ORDEAûANDû5NI#REDIT over time.
Proportional credit 4HATûlNANCINGûWHICHûCARRIEDûAûû At the same time, Euronext agreed a new
Source: Refinitiv SDC code: R17 guarantee from Danish state investment õMûREVOLVINGûCREDITûFACILITYûTOûREPLACEûITSû

78 International Financing Review May 1 2021


Eskom gets respite as it nears US$1bn loan
„ SOUTH AFRICA State-owned utilities firm weighed down by huge debts
Struggling state-owned utilities company
ESKOM is in the process of agreeing a R15bn
(US$1.05bn) one-year term loan with a group
of local and international banks to help with
its capex costs, as it continues to rely on
government support to service its debt of
approximately US$32bn.
JP Morgan is arranging the state-guaranteed
financing that will replace a R15bn capex facility
the borrower repaid in January. That one-year
loan was originally signed in January 2019 and
extended by a further year in January 2020.
The new facility will be good news for Eskom
which generates 90% of South Africa’s power
but has struggled to meet demand in recent
years due to deteriorating generators and coal
shortages which has left it unable to meet its
operating costs and service its debt.
The situation was compounded last year by
an additional loss of R10bn of revenue due to
the pandemic, with ratings agency Fitch now
estimating that Eskom’s Ebitda will be 40%
lower this year than in 2020, leaving banks
initially unsure if they would be able to lend to
the company.
Eskom relies on the government’s Guarantee
Framework Agreement, which provides explicit
government support to Eskom to the end of 2023
through equity injections. This year the company
will receive R56bn, but this can only be used for
debt repayments and not for capex purposes.
“Eskom is a bit of a basket case and
negotiating the new facility has been difficult.
existing €400m RCF when the acquisition
People are nervous, especially with the
ongoing load shedding (power cuts),” said one
banker.
Lenders’ fears over the new loan were eased
by the government’s backing of the new facility.
“They need funding for capex and a term
sheet for a R15bn loan has now been agreed. It
is guaranteed so we can still do it,” the banker
said.
Fitch estimates that in addition to the R56bn
of support the government will provide this year,
Eskom will also need to borrow R40bn to cover
all of its refinancing requirements and support
its capex programme in 2021.
Some R20bn of that was already in place
by the end of 2020 according to Fitch, so the
new facility should bring Eskom within touching
distance of its needs.
The company had around R464bn of debt
as of December 2020, which included at least
US$6.8bn-equivalent of syndicated loans, with
maturities ranging from 2021–36, according to
Refinitiv LPC.
The R15bn facility that was repaid in January
comprised two tranches. There was a R12.6bn
tranche provided by local banks ABSA, FirstRank
Bank, Standard Bank, Development Bank of
South Africa, Nedbank and Investec Bank, and a
R2.4bn tranche provided by Afreximbank.
Eskom’s next syndicated loan scheduled to
mature is a US$965m tranche of a US$1.34bn
loan that was agreed in 2016 that expires in
July. Mandated lead arrangers on that loan
sustainability-linked facility after the
LOANS EMEA
were African Development Bank, Bank of China,
CaixaBank, Citibank, HSBC, JP Morgan, KfW
IPEX-Bank, MUFG, Siemens Bank and Standard
Chartered.
“We currently have various facilities under
negotiation with various funders. We are
unfortunately not able to comment on any
of them until such time that the facilities are
successively concluded and signed,” an Eskom
spokesperson said.
JP Morgan declined to comment.
UNSUSTAINABLE DEBT
Bankers remain concerned over the long term,
questioning how Eskom can manage its debt
pile.
“Eskom is in an unfathomable state. It used
to be extremely well banked,” said a second
banker. “Everyone is carefully eyeing how the
government is dealing with issues and how it
supports Eskom. There is a political need to keep
it going. The discussion has to move forward
as there is a huge bank exposure to it and a
solution has to be found.”
In November, Fitch downgraded Eskom’s
senior unsecured guaranteed debt to BB–
from BB reflecting South Africa’s sovereign
downgrade. But the agency’s standalone credit
profile for Eskom remained at CCC– reflecting,
it said, Eskom’s unsustainable financial profile,
government equity support and tight liquidity
position.
Sandrine Bradley
European operations and the number of
CLOSEDûREmECTINGûTHEûINCREASEDûSIZEûOFûTHEû PUBLICATIONûOFû!30)û'ROUPSûlRSTû ArcelorMittal facilities globally that have
group. sustainability report expected in June 2021. BEENûCERTIlEDûBYû2ESPONSIBLE3TEELûBYûTHEû
Euronext drew €3.7bn from the bridge Proceeds will be used for general corporate end of each year.
LOANûTOûlNANCEûTHEûACQUISITIONûWHICHûWASû
also funded through around €300m of
EXISTINGûCASHûANDûAROUNDûõMûFROMûAû
private placement to CDP Equity and Intesa
Sanpaolo.
LSEG will use the proceeds of the sale to
repay the remainder of the around £8bn
purposes and to support the upgrade and
modernisation of the motorway network
operated under concession by ASPI.
Intesa Sanpaolo, BNL, UniCredit, Banco BPM
and Natixis AREûPROVIDINGûTHEûlNANCING
The company has also agreed that the
LEVERAGEûRATIOûlNANCIALûCOVENANTûONûTHEû
facility will fall away if ArcelorMittal obtains
an investment-grade long-term credit rating
with a stable outlook from two ratings
agencies.
The RCF, which was originally signed in
BRIDGEûLOANûITûUSEDûTOûACQUIREû2ElNITIV
,3%'ûHADûALREADYûRElNANCEDûAûSIGNIlCANTû
part of the bridge loan through around £5bn
of bonds issued in March.
ITALY
AUTOSTRADE EYES SUSTAINABILITY
Toll road operator AUTOSTRADE PER L’ITALIA has
SIGNEDûAûõMûlVE
YEARûREVOLVINGûCREDITû Margins are linked to metrics including
facility including an option to convert into a
LUXEMBOURG
ARCELORMITTAL SWITCHES TO SLL
Steel maker ARCELORMITTAL has amended its
existing US$5.5bn revolving credit facility,
linking the margin on the facility to its
performance in meeting sustainability and
emissions reduction goals.
The facility is the largest ESG-linked RCF
in the metals and mining sector.
30% CO2 reduction target for its European
the CO2 intensity of ArcelorMittal’s
International Financing Review May 1 2021
$ECEMBERûûFORûANûINITIALûlVEûYEARSû
remains undrawn and is available for
general corporate purposes.
Credit Agricole CIB is ESG coordinator on
the amended facility.
53BNûOFûTHEûlNANCINGûHASûBEENû
extended to December 2025 with the
remaining US$100m maturing in December
2023.
ArcelorMittal has set a group-wide target
of reaching carbon neutrality by 2050, and a
operations by 2030.
79
 The company is looking to harness
technology to drive its ESG push, including a
carbon capture and re-use project and a
process to convert waste wood into bio-coal
– which is used as a replacement for coal in
YEARûPRE
EXPORTûlNANCEû
blast furnaces.
"OTHûWILLûCOMEûONûSTREAMûATûTHEû
shareholder loan when it lists on the ACRON EXTENDS PXF
Warsaw Stock Exchange.
4HEûlNANCINGûCOMPRISESûAûõMûSENIORû Fertiliser business ACRON has signed a second
secured term loan and a €190m multi- amend and extend agreement for its
currency revolving credit facility. 53MûlVE
facility, which was originally signed in May
2017.
COMPANYSûPLANTûINû'HENTû"ELGIUMûNEXTû
year, while in Hamburg, Germany it is
developing an industrial-scale project to use
hydrogen instead of natural gas in the direct
reduction of iron ore.
ROMANIA
ROMPETROL EXTENDS US$75m RCF
Oil company ROMPETROL RAFINARE has
The facility has been extended by another
TWOûYEARSûANDûNOWûMATURESûINû-AYûû)Tû
was last extended by two years in June 2019.
).'ûANDû5NI#REDITû"ANKûACTEDûASû
coordinators and bookrunners on the deal.
The company is also a founding member extended the maturity of a US$75m tranche 4HEûBANKûGROUPûINCLUDESû(3"#û)#"#û
of ResponsibleSteel, the steel industry’s only of its 2015 US$435m-equivalent multi- Societe Generale, Rosbank, Credit Agricole
GLOBALûMULTI
STAKEHOLDERûCERTIlCATIONû currency revolving credit facility to June 30
initiative.
4HEûCERTIlCATIONûCOVERSûOVERûû
requirements addressing a range of
environmental, social and governance
standards. Several of the company’s
%UROPEANûmATûPRODUCTSûSITESûAREûUNDERTAKINGû
THEû2ESPONSIBLE3TEELûSITE
LEVELûCERTIlCATIONû International and the facility can also be
process.
NORWAY
AKER BP EXTENDS RCF
/ILûEXPLORATIONûANDûPRODUCTIONûlRMûAKER BP
has agreed an extension of its existing
revolving credit facilities, reducing the
facilities to US$3.4bn from US$4bn.
A working capital facility will be reduced
to US$1.4bn from US$2bn and extended to
2024 from 2022.
#)"û3BERBANKûANDû"ANKûOFû#HINA
2021.
The extension of the facility was arranged
by Banca Comerciala Romana, ING and Raiffeisen
Bank as mandated lead arrangers. UniCredit
acted as a facility agent.
Rompetrol is a subsidiary of KMG
used by KMG Rompetrol, Rompetrol
Downstream and KazMunayGas Trading.
It is guaranteed by KMG International
through mortgages set up on several assets
held by KMG International subsidiaries such
as fuel distribution stations, warehouses,
stocks of petroleum products, trade
receivables but also bank accounts.
In October 2020, Rompetrol agreed a
53MûINCREASEûTOûITSû53Mû2#&ûWHICHû
was signed in April 2015.
KMG International is fully owned by
KazMunayGaz, the national oil and gas
company of Kazakhstan.
ING also acted as facility agent.
SPAIN
EDREAMS BOOKS COV HOLIDAY
Travel company EDREAMS has extended a
waiver of covenants on its €175m super
senior revolving credit facility by a further
year to June 2022.
The covenants will be replaced with a
minimum liquidity requirement of €25m
that will be tested at the end of each quarter
beginning in June 2021 and ending in March
2022.
,IQUIDITYûWASûõMûATûTHEûENDûOFû-ARCH
eDreams agreed the covenant waiver in
April 2020 after seeing bookings plummeted
due to the Covid-19 pandemic.
The RCF was arranged in September 2018
A US$2bn liquidity facility will be VIAûAûCLUBûSYNDICATEûOFû$EUTSCHEû"ANKû
EXTENDEDûTOûûFROMûûREDUCINGûTOû 3OCIETEû'ENERALEû""6!û"ANCOû3ANTANDERû
53BNûINûTHEûlNALûYEAR
Other terms remain unchanged.
The working capital facility pays a margin
of 133bp over Libor, while the liquidity
facility pays 108bp. There is also a
commitment fee of 35% of the applicable
YEARûCLUBûTERMûLOANûWITHûAû 2023.
margin on undrawn amounts.
!KERû"0ûHASûRECEIVEDûlRMûCOMMITMENTSû
from a group of banks for the extension.
4HEûlNANCINGûWASûORIGINALLYûAGREEDûINû
May 2019 via bookrunning mandated lead
RUSSIA "ARCLAYSû#AIXA"ANKû-ORGANû3TANLEYû*0û
Morgan and CIC.
VSMPO-AVISMA NETS US$400m Margins range from 200bp to 300bp over
Euribor.
Titanium group VSMPO-AVISMA has signed a 4HEûlNANCINGûMATURESûINû3EPTEMBERû
53MûlVE
group of international banks.
Credit Agricole, Banca Intesa, Intesa Sanpaolo
and UniCredit acted as mandated lead SWITZERLAND
arrangers and bookrunners and were joined
by Societe Generale as mandated lead PUMA ENERGY CLOSES REFI
ARRANGERSû!".û!-2/û"ANKû3%"û"ARCLAYSû arranger, with Bank Zenit and Bank ICBC as
"ANKûOFû-ONTREALû".0û0ARIBASû$ANSKEû lead arrangers. Global energy retail and storage company
"ANKû$."û).'û-5&'û.ORDEAûANDû ING Bank was facility agent and UniCredit PUMA ENERGYûHASûCLOSEDûAû53MûONE

Swedbank. was documentation agent. YEARûLOANûRElNANCING
#REDITû!GRICOLEû#)"û#ITIGROUPû(3"#û*0û 4HEûLOANûPAYSûBPûOVERû,IBORûANDûWILLû The loan, which will be used for general
Morgan, UniCredit and Wells Fargo joined BEûUSEDûFORûRElNANCINGûOFû63-0/SûEXISTINGû
as mandated lead arrangers. loans and general corporate purposes.
VSMPO-AVISMA is the world’s largest
vertically integrated manufacturer of
POLAND titanium and titanium alloy products.
The borrower also produces aluminum
PEPCO LINES UP €740m LOAN alloy extrusions, steel alloy and nickel-based
HEAT
RESISTANTûALLOYûSEMI
lNISHEDûPRODUCTSû year extension options and one 90-day
CORPORATEûPURPOSESûRElNANCESû0UMASû
existing US$310.5m one-year facility agreed
INû!PRILûûANDûTHEûREMAININGû53Mû
FACILITYû"ûOFûAû53MûLOANûAGREEDûINû-AYû

4HEûlNANCINGûCOMPRISESûAûREVOLVINGû
credit facility and a term loan with two one-
PEPCOûTHEûOWNERûOFû"RITISHûDISCOUNTûRETAILERû which are used in power engineering, extension option.
Poundland, has lined up a €740m loan to petrochemical industry, shipbuilding, 4HEûlNANCINGûWASûLAUNCHEDûFORû53Mû
RElNANCEûALLûITSûEXISTINGûLOANSûANDû medicine and civil engineering. CLOSEDûSIGNIlCANTLYûOVERSUBSCRIBEDûANDûWASû

80 International Financing Review May 1 2021

 LOANS NORTH AMERICA

INCREASEDûTOû53Mû#OMMITMENTSû The maturity of the remaining term loans The facilities comprise a US$4bn revolver
were received from 18 banks with a broad has also been extended from to 2025 from MATURINGûINû!PRILûûANDûAû53BNû
geographical split comprising 39% from 2023 in line with the RCF. REVOLVERûTHATûWILLûEXPIREûINû!PRILû
%UROPEûûFROMû!SIA
0ACIlCûûFROMû "ARCLAYSû(3"#û".0û0ARIBASûANDû Pricing for both revolvers is linked to
Africa and 11% from the Middle East. Santander UK provided the existing RCF and market rates as well as the company
ABSA Bank, ING, ICBC, Natixis, Nedbank, term loans. ACHIEVINGûCERTAINûSUSTAINABILITYûGOALSû"OTHû
Societe Generale and UniCredit were mandated Meanwhile, electrical retailer DIXONS facilities are undrawn.
lead arrangers and active bookrunners on CARPHONE has agreed a £550m revolving Alphabet also terminated its US$4bn
THEûlNANCING credit facility to replace its existing debt. revolver that was due to mature in July 2023.
ING and Societe Generale coordinated The new facility matures in April 2025. 4HATûlVE
YEARûFACILITYûFEATUREDû"ANKûOFû
SYNDICATIONûWITHû!"3!ûACTINGûASûBOTHûTHEû All other facilities have been cancelled, America as the administrative agent and
documentation agent and the facility agent. including an £800m RCF and £250m RCF, paid a commitment fee of 3.5bp.
Puma is headquartered in Singapore and both of which were set to mature in October !LPHABETûISûRATEDû!AûBYû-OODYSûANDû!!û
Geneva. ûASûWELLûASûAûaMûSTANDBYû2#&ûTHATû by S&P.
was put in place in place in April 2020 to
preserve liquidity during the Covid-19 WALGREENS UPS TO US$3.8bn
TURKEY lockdown.
Retail pharmacy company WALGREENS BOOTS
VAKIFBANK SIGNS SLL PERSIMMON RENEWS £300m RCF ALLIANCE has increased the size of its delayed
draw term loan to US$3.8bn.
VAKIFBANKûHASûSIGNEDûAû
DAYû53BN
Housebuilder PERSIMMON has renewed its The amendment increases the size of the
equivalent dual-currency loan, which is also existing £300m revolving credit facility with loan, which was signed on April 9, from
ITSûlRSTûSUSTAINABILITY
LINKEDûFACILITY AûlVE
YEARûMATURITYûOUTûTOû-ARCHûû US$2.75bn.
The loan comprises a US$237.5m tranche The RCF provides the company with At signing, the loan had a 45-day
WHICHûPAYSûBPûOVERû,IBORûANDûAûõMû WORKINGûCAPITALûmEXIBILITY availability period and featured an initial
tranche paying 225bp over Euribor. 2ELATIONSHIPûBANKSû"ANCOû3ANTANDERû maturity date of October 9, to be extended if
Emirates NBD and Abu Dhabi Commercial "ARCLAYSû(3"#û,LOYDSû"ANKûANDû.AT7ESTû !MERISOURCE"ERGENSûACQUISITIONûOFûAû
Bank are joint coordinators with Emirates PROVIDEDûTHEûlNANCING majority of Walgreens’ Alliance Healthcare
."$ûMUFG and Standard Chartered acting as
sustainability coordinators. Mizuho was the
agency bank.
The loan was provided by a total of 38
BANKSûFROMûûCOUNTRIESûANDûRElNANCESûAû
US$950m-equivalent facility which was
The RCF paid a margin of 90bp over Libor
in 2020.
TULLOW GETS US$600m
Africa-focused TULLOW OIL has agreed a
business had not closed by October 9.
The loan pays a margin of 70bp over Libor
before October 9 and 75bp over Libor after
October 9.
Well Fargo Bank is the administrative agent.
That bank, along with Bank of America, HSBC
signed in April last year. 53MûSUPERûSENIORûREVOLVERûWHICHûWILLûBEû and JP Morgan were also joint lead arrangers
That loan was also coordinated by used, along with the issuance of US$1.8bn of and bookrunners.
%MIRATESû."$ûANDû!BUû$HABIû#OMMERCIALû NEWûSENIORûSECUREDûBONDSûDUEûINûûTOû 7ALGREENSûISûRATEDû"AAûBYû-OODYSûANDû
"ANKûANDûCOMPRISEDûAû53MûTRANCHEû
and a €589.5m tranche paying all-in costs of
225bp over Libor and 200bp over Euribor,
respectively.
UK
WH SMITH UPS RCF
EXTENDûTHEûCOMPANYSûMATURITYûPROlLE
The new senior secured loan, which
matures in December 2024, comprises a
US$500m revolving credit facility and a
US$100m letter of credit facility.
The revolver and bonds will be used to
repay and cancel commitments on Tullow’s
existing US$1.7bn reserves-based lending
FACILITYûREDEEMû53MûOFûEXISTINGûBONDSû
due in 2022; repay at maturity US$300m of
"""ûBYû30
S&P GLOBAL BAGS SLL
Credit ratings agency S&P GLOBAL has signed a
senior unsecured US$1.5bn revolving credit
facility with pricing linked to sustainability
targets.
The facility’s pricing may be adjusted
based on targets related to climate action
"OOKSELLERûSTATIONERûANDûNEWSAGENTSûWH
SMITH has increased its existing revolving
credit facility to £250m from £200m and
extended the maturity to 2025 from 2023 as
it looks to raise around £325m of
convertible bonds.
The increased RCF is being provided by an
expanded syndicate of lending banks.
Proceeds from the bonds will be used to
provide £50m of new capacity for WH Smith
to fund the opening of around 100 new
Travel Stores over the next three years and
to back new growth opportunities. The
remainder of the proceeds will be used to
partially pay down two £200m term loans
that backed the acquisitions of InMotion in
November 2018 and Marshall Retail Group
in October 2019.
convertible bonds due in July 2021.
Proceeds will not be used to pay any
amounts under the company’s US$800m
bonds due in 2025.
NORTH AMERICA
UNITED STATES
ALPHABET GETS US$10bn
ALPHABET, the parent company of Internet
search giant Google, has signed revolving
credit facilities totalling US$10bn.
International Financing Review May 1 2021
GOALSûVERIlEDûBYûTHEû3CIENCEû"ASEDû4ARGETSû
Initiative. The targets are linked to S&P’s
goals to reduce greenhouse gas emissions,
including a 25% reduction in emissions by
2025 from a 2019 base year.
4HEû3"4IûISûAûCLIMATEûACTIONûPARTNERSHIPû
between CDP, the United Nations Global
Compact, World Resources Institute and the
World Wide Fund for Nature, according to
its website.
JP Morgan is the administrative agent and
sustainability agent of the revolver. Bank of
America, Citigroup, Deutsche Bank, HSBC,
Mizuho Bank and Morgan Stanley MUFG Loan
Partners were joint lead arrangers and
bookrunners.
S&P is rated A3 by Moody’s and A– by
Fitch.
81
 BROADRIDGE SEALS RCF Fitch Ratings. In a March 30 release, Moody’s Pricing is based on the borrower’s debt
revised its outlook for the company to RATINGû&ORû"AA""""""ûTHEûFACILITYûFEEûISû
Financial technology company BROADRIDGE negative from stable due to the increased 12.5bp, the RCF pays 100bp over Libor and
FINANCIAL SOLUTIONS has agreed an amended leverage expected from the Itiviti the term loan pays 87.5bp over Libor; for
ANDûRESTATEDû53BN
EQUIVALENTûlVE
YEARû acquisition. In the same release, Moody’s "AA"""ûITûISûBPûBPûANDûBPûFORû
senior unsecured revolving credit facility. stated it “believes the acquisition will "AA"""nûITûISûBPûBPûANDûBPû
The facility comprises a US$1.1bn tranche improve the company’s scale and product FORû"A""ûITûISûBPûBPûANDûBPû
and a US$400m multi-currency portion. Its
total size may be increased by a further
US$500m.
Pricing is based on the company’s debt
rating. For A2/A/A the facility fee is 7bp and
YEARûREVOLVERûANDûFROMû
the margin is 80.5bp over Libor; for A3/
!n!nûITûISûBPûANDûBPûFORû"AA"""
"""ûITûISûBPûANDûBPûFORû"AA"""
"""ûITûISûBPûANDûBPûANDûFORû"AA"""n
"""nûITûISûBPûANDûBP
Opening pricing is 101.5bp over Libor
with an 11bp facility fee.
The multi-currency portion may be
funded in Canadian dollars, euro, sterling,
yen, and Swedish kronor. For sterling, the
capabilities”.
DR HORTON UPS RCF, CUTS SPREAD
Homebuilding company DR HORTON has
increased the size, extended the maturity,
and reduced the pricing of its revolving
credit facility.
The amendment increases the RCF size to
US$2.19bn and its maturity date to April 20

At its last amendment in October 2019,
the facility’s size was US$1.59bn and it was
due to mature on October 2 2024.
The RCF size may also be increased up to
ANDûFORû"A""ûITûISûBPûBPûANDû
150bp.
The original credit agreement paid a
margin over Libor of between 125bp and
BPûFORûTHEû
137.5bp–200bp for the three-year term loan,
based on the borrower’s debt rating.
Financial covenants limit Vontier’s
consolidated leverage ratio to a maximum of
3.75 times, and its consolidated interest
coverage ratio to a minimum of 3.5 times.
The consolidated leverage ratio may be
increased to a maximum of 4.25 times for up
TOûTWOûlSCALûQUARTERSûINûTHEûEVENTûOFûANû
acquisition valued at US$100m or more.
OPENINGûMARGINûISûBPûOVERû3ONIAûANDû
that margin over Sonia ranges from
BPnBP
!ûlNANCIALûCOVENANTûRESTRICTSû"ROADRIDGESû
leverage ratio to a maximum of 3.5x. That
maximum ratio may be increased to 4.25x
FORûFOURûlSCALûQUARTERSûFOLLOWINGûTHEû
completion of the company’s Itiviti Holding
acquisition.
US$3bn.
Pricing is based on the borrower’s
leverage ratio.
For 0.2 times the commitment fee is
12.5bp with a margin of 100bp over Libor;
for 0.2–0.35 times it is 12.5bp and 112.5bp;
for 0.35–0.5 times it is 15bp and 125bp; for
0.5–1.0 times it is 17.5bp and 137.5bp; and
FORûOVERûûTIMESûITûISûBPûANDûBP
Bank of America is the administrative agent.
Additional lenders are PNC Bank, SMBC, Bank
of Nova Scotia, US Bank, Wells Fargo, JP Morgan,
Citigroup, BNP Paribas, TD Bank, Truist Bank,
Credit Suisse, Goldman Sachs, Morgan Stanley,
HSBC, MUFG, Westpac and Barclays.
6ONTIERûISûRATEDû"AûBYû-OODYSûANDû"""nû
by S&P and Fitch.
)Nû-ARCHû"ROADRIDGEûANNOUNCEDûITSûINTENTIONû Prior to the amendment, the margin was CON EDISON INKS US$500m TL
to acquire Swedish trading and capital markets 100bp–175bp, and the commitment fee was
technology company Itiviti for approximately 12.5bp–25bp, based on the borrower’s Utility company CONSOLIDATED EDISON has
õBNû53BN ûASûREPORTEDûBYû2ElNITIVû
DAYûTERMûLOAN
,0#û4HATûACQUISITIONûISûlNANCEDûBYûAû*0û-ORGAN
Mizuho Bank is the administrative agent.
led up to US$2.55bn term loan.
JP Morgan is the administrative agent of
THEûREVOLVERû!DDITIONALûLENDERSûAREû"ANKûOFû
leverage ratio.
Funds are intended to be used to repay the
Additional lenders are Bank of America,
Citigroup, JP Morgan, US Bank, Wells Fargo, PNC
Bank, TD Bank, Truist Bank, Bank of the West,
ENTEREDûAû53Mû
company’s US$500m 2% bonds that mature
on May 15 2021.
The facility is available to be drawn until
!MERICAû7ELLSû&ARGOû"ANKû".0û0ARIBASû4$û Citizens Bank, Comerica Bank, Fifth Third Bank, -AYûû)TûPAYSûAûMARGINûOFûBPûOVERû,IBORû
"ANKû53û"ANKû4RUISTû"ANKû"ANKûOFû#HINAû First Hawaiian Bank, Regions Bank, Texas Capital FORûTHEûlRSTûûDAYSûAFTERûTHEûCLOSINGûDATEû
"ANKûOFû.OVAû3COTIAû"ANKûOFû-ONTREALû Bank and Huntington National Bank. The margin is variable thereafter.
(3"#û"ANKû-ORGANû3TANLEYû3ANTANDERû $2û(ORTONûISûRATEDû"AAûBYû-OODYSûANDû TD Bank is the administrative agent and
"ANKûANDû"ARCLAYSû"ANK """ûBYû30 sole lender.
"ROADRIDGEûISûRATEDû"AAûBYû-OODYSû The credit agreement restricts Con
"""ûBYû30û'LOBALû2ATINGSûANDû"""ûBYû VONTIER REDUCES LOAN Edison’s consolidated debt to consolidated
TOTALûCAPITALûRATIOûTOûAûMAXIMUMûOFûû
AMERICAS LOANS BOOKRUNNERS – FULLY Technology company VONTIER has agreed an times.
SYNDICATED VOLUME amended and restated credit facility, #ONû%DISONûISûRATEDû"AAûBYû-OODYSûANDû
BOOKRUNNERS: 1/1/2021 TO DATE reducing the deal size to a total of A– by S&P.
Managing No of Total Share US$1.15bn from US$2.55bn.
bank or group issues US$(m) (%) The facility comprises a US$400m 3.5-year LOWE’S SIGNS US$1bn TL
1 JP Morgan 339 105,411.87 12.5 senior unsecured term loan and a US$750m
2 Bank of America 386 104,413.30 12.4 lVE
YEARûSENIORûUNSECUREDûREVOLVINGûCREDITû Home improvement retailer LOWE’S COMPANIES
3 Citigroup 177 64,373.46 7.6 facility. The term loan was intended to be HASûSIGNEDûAû53BNû
DAYûTERMûLOANû
4 Wells Fargo 224 56,610.01 6.7 fully drawn on the deal’s Wednesday closing facility.
5 Goldman Sachs 142 43,790.76 5.2 date. Wells Fargo is the sole provider of the
6 Barclays 163 35,778.05 4.2 The original credit agreement, dated facility, which will be used for share
7 Credit Suisse 134 31,525.52 3.7 September 2020, comprised an US$800m repurchases, working capital and other
8 Morgan Stanley 88 30,380.51 3.6 three-year delayed draw-term loan, a general corporate purposes.
9 RBC 145 29,866.03 3.5 US$1bn two-year delayed draw-term loan, The loan pays a margin of 70bp over Libor
10 Deutsche Bank 114 26,241.63 3.1 and a US$750m three-year revolving credit and is available to be drawn in three
Total 1,155 845,071.64 facility. portions.
Proportional credit Vontier received credit ratings in The borrower will pay an upfront fee of
Source: Refinitiv SDC code: R7 February. 2bp on amounts drawn after May 15.

82 International Financing Review May 1 2021

 LOANS LATIN AMERICA

,OWESûISûRATEDû"AAûBYû-OODYSûANDû"""û Bank of the West, Apple Bank for Savings, OCBC maximum permitted debt to Ebitda ratio
by S&P. Bank, Stifel Bank, US Bank, Bank of MAYûBEûINCREASEDûTOûûTIMESûFORûFOURûlSCALû
Communications, City National Bank, CIC, Chang quarters if an acquisition with a value
AMETEK GETS DDTL Hwa Commercial Bank, Woodforest National Bank exceeding US$500m occurs.
and Bank of Ireland. Bank of America is the administrative agent.
Electronics manufacturer AMETEK has signed !IRû,EASEûISûRATEDû"""ûBYû30ûANDû&ITCH Additional lenders are Citigroup, Bank of New
ANûUPûTOû53MûlVE
YEARûDELAYEDûDRAWû York Mellon, CIBC, Goldman Sachs, HSBC, JP
term loan. CME EXTENDS US$7bn RCF Morgan, Morgan Stanley, MUFG, TD Bank, Wells
Funds will be used to repay borrowings Fargo, Barclays, Credit Suisse, ICBC and State
drawn under the company’s revolving credit Trading exchange CHICAGO MERCANTILE Street Bank.
facility. EXCHANGEûHASûAMENDEDûITSû53BNû
DAYû )NVESCOûISûRATEDû!ûBYû-OODYSû"""ûBYû
The drawn pricing is the same as for
borrowings under the revolver, and the loan
is provided by existing lenders to that
facility.
JP Morgan, Bank of America, Wells Fargo, PNC
Bank and Truist Bank are lead arrangers. Five
other banks also participated in the loan.
!METEKSû53BNûlVE
YEARûREVOLVERû increased to US$10bn.
dated October 2018 pays a margin of
79.5bp–130bp over Libor, and a facility fee
ranging from 8bp–20bp. Pricing is based on
the company’s leverage ratio.
JP Morgan is the administrative agent of
that facility.
YEARû
!METEKûISûRATEDû"""ûBYû30
AIR LEASE UPS RCF TO US$6.4bn
Aircraft leasing company AIR LEASE has
SIGNEDûANûAMENDEDûANDûEXTENDEDû53BNû
revolving credit agreement.
The facility’s commitments feature a
range of maturity dates. About US$5.7bn
will mature on May 5 2025, US$575m is due
on May 5 2023, US$105m is set to expire on
May 5 2022, and US$5m will terminate on
May 5 2021.
revolving credit facility, extending the
multi-currency facility’s maturity date to
April 27 2022 from last Wednesday.
Funds are intended to provide temporary
liquidity to parent company CME Group in
the event of a clearing member default or
liquidity constraints. The deal’s size can be
The revolver pays a 0.1bp commitment
fee and a 150bp over Libor margin.
Bank of America is the administrative agent.
Amending lenders are Citigroup, Agricultural
Bank of China, Bank of China, Barclays, BMO
Harris Bank, ICBC, MUFG, Santander, Bank of
Nova Scotia, TD Bank, US Bank, United Overseas
Bank, Wells Fargo, China Construction Bank,
Commerzbank, Deutsche Bank, JP Morgan,
Landesbank Hessen-Thueringen, HSBC, Bank of
Communications, BNP Paribas, Credit Suisse,
Goldman Sachs, Mizuho, Morgan Stanley, RBC,
Societe Generale, Standard Chartered Bank, CIBC
Bank and Brown Brothers Harriman.
CME Group is rated Aa3 by Moody’s and
AA– by S&P.
INVESCO INKS US$1.5bn RCF
S&P and A– by Fitch.
LATIN AMERICA
COLOMBIA
ARGOS ADDS DIVERSITY METRICS
Infrastructure company GRUPO ARGOS has
SIGNEDûAû0SBNû53M ûlVE
loan, which features pricing tied to gender
diversity and greenhouse gas emissions.
The facility’s interest rate may decrease
by up to 100bp if targets relating to
increasing the participation of women in
senior management positions and the
reduction of greenhouse gas emissions are
met.
Bancolombia is providing the loan.
Achievement of targets will be assessed
based on the annual reporting of Grupo
Argos.
Grupo Argos’ subsidiary cement company,
The deal’s longest maturity date has been
extended by two years, and its total size
YEARûREVOLVINGû featured pricing tied to the company’s
INCREASEDûFROMû53BN
Applicable pricing is unchanged at 105bp
over Libor with a 20bp facility fee. The
margin and commitment fee are tied to the
borrower’s credit rating.
&ORû"AA""""""ûTHEûFACILITYûFEEûISû
BPûANDûTHEûMARGINûISûBPûFORû"AA
""""""ûITûISûBPûANDûBPûFORû"AA
"""n"""nûITûISûBPûANDûBPûANDûFORû
LOWERûTHANû"AA"""n"""nûITûISûBPûANDû
145bp.
Financial covenants have been revised to
increase the minimum required
shareholder’s equity to US$2.5bn from
US$2bn, and remove restrictions relating to
Air Lease’s consolidated leverage ratio.
JP Morgan is the administrative agent.
Amending banks are Bank of America, Bank of
China, MUFG, BMO Harris Bank, Citigroup, Fifth
Third, Mizuho, Societe Generale, Truist Bank,
Wells Fargo, TD Bank, RBC, Deutsche Bank,
Goldman Sachs, NatWest, Regions Bank,
Santander, Citizens Bank, KeyBank, Arab Banking
Investment management company INVESCO
HASûSIGNEDûAû53BNûlVE
credit facility that amends and restates the
company’s credit agreement of the same
size from 2017.
Funds are for working capital and general
corporate purposes. The deal size may be
increased to US$2bn.
Invesco Finance PLC is the borrowing
entity, guaranteed by parent Invesco Ltd.
Pricing is based on the borrower’s debt
rating. For Aa3/AA–/AA– the commitment
FEEûISûBPûANDûAûMARGINûOFûBPûOVERû,IBORû
FORû!!!ûITûISûBPûANDûBPûFORû!!!û
it is 10bp and 100bp; for A3/A–/A– it is
BPûANDûBPûFORû"AA""""""ûITûISû
BPûANDûBPûANDûFORû"AA""""""ûITûISû
20bp and 150bp.
The commitment fee is now lower than
on the replaced facility, but the margin is
unchanged. For the August 2017 revolver,
the commitment fee ranged from 8bp to
22.5bp.
Financial covenants restrict the
company’s debt to Ebitda ratio to a
#EMENTOSû!RGOSûSIGNEDûAû03BNûLOANûTHATû
environmental, social and governance
initiatives in March.
Grupo Argos has a national long-term
rating of AAA from Fitch.
COSTA RICA
CMI ENERGIA TAKES US$300m
Renewable energy company CMI ENERGIA has
closed a senior secured US$300m seven-year
term loan.
CMI Energia’s holding company, Investment
Energy Resources, is the borrowing entity, and
the facility is guaranteed by CMI Energia’s main
renewable energy projects and subsidiaries. It is
secured by shares of the majority of those
operating entities.
Bladex is the administrative agent and
additional lenders are Banco Industrial and
Banco Davivienda.
The loan, along with a US$700m green
Corp, CIBC Bank, China Construction Bank, BNP maximum of 3.25 times, and its coverage BONDûWILLûBEûUSEDûTOûRElNANCEûDEBTûFROMû
Paribas, DBS Bank, Morgan Stanley, CIT Bank, ratio to a minimum of 4 times. The renewable energy projects.

International Financing Review May 1 2021 83

 CMI Energia operates over 800MW of
renewable assets in Central America. The
company is a subsidiary of Guatemalan
conglomerate Corporacion Multi
YEARûlRST
LIENûTERMûLOANûWASû
Inversiones.
YEARûTERMûLOANû"ûTHATûWILLûBEû and an OID of 99 and the eight-year second-
LEVERAGED LOANS
Platinum Equity is acquiring
Cabinetworks from American Industrial
Partners, GIC and other equity holders.
2EALûESTATEûlNANCINGûCOMPANYûGREYSTONE
SELECT FINANCIAL is in the market with a
53MûSEVEN
used to repay existing term debt and for
general corporate purposes.
Pricing is guided at 475bp–500bp over
Libor with an OID of 98.5–99.
4HEREûISûAûûmOORûANDûTHEûLOANû
features 101 soft-call protection for six
4HEûTRANSACTIONûCOMPRISEDûAû53MûlRST
lien term loan, a US$123m second-lien term
LOANûANDûAû53MûREVOLVINGûCREDITûFACILITY
4HEûSEVEN
PRICEDûATûBPûOVERû,IBORûWITHûAûûmOORû
LIENûLOANûATûBPûOVERû,IBORûWITHûAûûmOORû
ANDûAûû/)$
Golf cart manufacturer CLUB CAR will host a
lender call on Monday to discuss a US$775m
senior secured term loan
The loan, together with US$450m of
UNITED STATES
MARKET RECEIVES THERAPY
THERAPY BRANDS, a provider of software to
mental health service companies, has
released terms on its US$440m loan that
will fund its acquisition by KKR.
A seven-year senior secured US$235m
53BNûASûPARTûOFûITSûPUSHûTOûPAYûDOWNû
lRST
LIENûTERMûLOANûISûBEINGûOFFEREDûATû
BPnBPûOVERû,IBORûWITHûAûûmOORû
and a 99.5 OID.
PQ SEALS LBO LOAN
The facility includes a 25bp step-down
ONCEûTHEûlRST
LIENûLEVERAGEûRATIOûISûREDUCEDû term loan.
to 4.55 times.
YEARûlRST
LIENûLOANûISûOFFEREDûATû CHEMICALSûWRAPPEDûAû53MûlRST
LIENûTERMû
An eight-year US$85m second-lien term
LOANûISûOFFEREDûATûBPûOVERû,IBORûWITHûAû
ûmOORûANDûû/)$
LIENûNETûLEVERAGEûDECREASESû and industrial company Koch Minerals &
4HEûlRST
LIENûLOANûCARRIESûûSOFT
CALLû by 0.5 times.
protection for six months. The second-lien
loan features 102 and 101 hard-call
PROTECTIONûFORûTHEûlRSTûANDûSECONDûYEARûAFTERû
issuance.
!û53MûDELAYED
months.
JP Morgan is leading the transaction.
#ORPORATEûRATINGSûAREû"A"n""n
USIC OUTLINES TERMS
Underground utility services company USIC
revealed terms for US$1.29bn of loans that
WILLûRElNANCEûTHEûCOMPANYSûEXISTINGûlRST
lien and second-lien term loans, in addition
to funding a shareholder distribution.
4HEûlNANCINGûCOMPRISESûAû53MûlRST
lien term loan and a US$335m second-lien
Chemicals company PQ PERFORMANCE
4HEûSEVEN
375bp–400bp over Libor that comes with a
25bp step down when the company’s
CLOSINGûDATEûlRST
Trading.
)TûCOMESûWITHûAûûmOORûANDûANû/)$ûOFû
99. It amortises at 1% per annum and has
101 soft call protection for six months.
The eight-year second-lien loan is offered
UNSECUREDûDEBTûWILLûlNANCEûTHEûCOMPANYSû
buyout by private equity sponsor Platinum
Equity.
Goldman Sachs is the left lead arranger.
Bank of America, Deutsche Bank, Credit Suisse
and Citigroup are also arranging the deal.
$IVERSIlEDûINDUSTRIALûlRMû)NGERSOLLû2ANDû
agreed to sell Club Car to Platinum for
debt, Reuters reported.
loan that will fund its acquisition by private
EQUITYûlRMû#ERBERUSû#APITALû-ANAGEMENTû
The margin on the seven-year loan was
lowered to 350bp over Libor from 375bp–
400bp, while the OID was tightened to 99.5
FROMûû4HEûûmOORûWASûUNCHANGED
DRAWûTERMûLOANûWHICHû ATûBPûOVERû,IBORûWITHûAûûmOORûANDûAû There will be one 25bp step-down when
ISûBEINGûOFFEREDûASûAûSTRIPûOFûTHEûlRST
LIENû 98–99 OID. Hard call protection kicks off at lRST
LIENûNETûLEVERAGEûDECREASESûBYûûTIMESû
facility, pays a ticking fee that kicks in at 102 before decreasing to 101. At launch, the deal included two step-
ûOFûTHEûMARGINûATûûDAYSûAFTERûISSUANCEû Goldman Sachs is left lead arranger on the downs.
and 100% of the margin after 121 days. transaction. Morgan Stanley, Bank of America, It comes with 101 soft call protection for
A separate US$20m DDTL, offered as a strip Credit Suisse, Deutsche Bank, MUFG, Antares six months and amortises at 1% per annum.
of the second-lien facility. Details on the Capital, ING and Citizens are also arrangers. A ticking fee that is 50% of the margin will
second-lien DDTL ticking fee are forthcoming. IT services provider ENSONO has agreed KICKûINûONûDAYûûAFTERûTHEûDEALûCLOSESû4HISû
"OTHû$$4,SûHAVEûAûTWO
YEARûCOMMITMENTû US$1.073bn in loans to fund its acquisition will increase to 100% on day 91.
period. BYûPRIVATEûEQUITYûlRMû++2 Goldman Sachs was the left lead arranger.
)NCLUDEDûINûTHEûTOTALûLOANûlNANCINGûISûAû 4HEûlNANCINGûCOMPRISESûAû53Mû Barclays, Credit Suisse, Deutsche Bank, RBC, BMO,
lVE
YEARû53MûREVOLVINGûCREDITûFACILITY REVOLVINGûCREDITûFACILITYûAû53MûlRST
LIENû KeyBanc, Macquarie and BNP Paribas are also
Jefferies ISûLEFT
LEADûONûTHEûlRST
LIENûFACILITYû term loan and a US$250m second-lien term arrangers.
KKR Capital Markets is the left-lead on the loan. Cerberus and Koch agreed to buy the PQ
second-lien facility. Societe Generale and Stone 0ROCEEDSûWILLûBEûALSOûUSEDûTOûRElNANCEûTHEû Performance Chemicals business from
Point Capital are arrangers on the deal. company’s existing debt. parent company PQ Group Holdings for
Cabinet manufacturer CABINETWORKS has Total funded debt will be US$1bn and about US$1.1bn.
LAUNCHEDûAû53BNûSEVEN
YEARûTERMûLOANû"û OPENINGûLEVERAGEûISûEXPECTEDûTOûBEûûTIMES 4HEûCOMPANYûANDûlRST
LIENûDEBTûAREûRATEDû
TOûPARTIALLYûlNANCEûITSûACQUISITIONûBYûPRIVATEû Morgan Stanley, UBS and KKR Capital Markets ""
equity company Platinum Equity Advisors. AREûPROVIDINGûTHEûlNANCING Electronic document services provider
Pricing is guided at 375bp–400bp over The acquisition of Ensono from private CONSILIO has wrapped up terms on a
Libor with an OID of 99–99.5. The facility EQUITYûlRMû#HARLESBANKû#APITALû0ARTNERSû 53BNûlRST
LIENûTERMûLOANûTHATûWILLûFUNDû
FEATURESûAûûmOORûANDûûSOFT
CALLû and M/C Partners is expected to close in the its acquisition by Stone Point Capital and
protection for six months. The acquisition second quarter. Aquiline Capital Partners.
WILLûALSOûBEûlNANCEDûBYûAû53MûEIGHT
Ensono was most recently in the market The covenant-lite seven-year term loan
year unsecured notes issuance and an equity in June 2020, when it privately placed a priced at 400bp over Libor from guidance of
investment. 53MûSENIORûSECUREDûLOAN BPnBPû4HEûûmOORûANDûû/)$ûAREû
Bank of America is the left-lead. Citigroup, )Nû!PRILûûITûSIGNEDû53MûOFûLOANSû unchanged.
Barclays, Deutsche Bank, Goldman Sachs, KKR, backing the acquisition of Wipro’s hosted It comes with 101 soft call protection for
BMO, Jefferies and RBC are arrangers. data centre services business. six months.

84 International Financing Review May 1 2021


Goldman readies US$3.9bn debt for
Proofpoint buyout
„ US Buyout firm Thoma Bravo favours loans over bonds
Goldman Sachs is putting together a US$3.9bn
financing package that would back private
equity firm Thoma Bravo’s US$12.3bn purchase
of PROOFPOINT.
If the buyout of the cybersecurity firm goes
through, the facility will add almost US$4bn in
debt to the red-hot leveraged finance market,
fuelled by expectations of inflation and rising
rates as the US economy has rallied since the
beginning of the year.
The financing could top Thoma Bravo’s
US$10.2bn buyout of RealPage, a software
provider for the real estate industry, which
comprised US$3.75bn in loans and was the
largest LBO financing of the first quarter of the
year.
Thoma Bravo, a private equity firm focused on
the software sector, often favours loan financings
over bonds. People following the transaction
suggest the package could be almost entirely
composed of loans, though a bond component
could be included.
EQUITY CHEQUES
The US$4bn debt component of the Proofpoint
deal would imply an US$8bn equity cheque,
according to one banker. Equity contributions for
Credit Suisse, Stone Point, Bank of America,
KKR Capital Markets, Truist, Blackstone and
Goldman Sachs were arrangers.
The transaction includes a US$300m
privately placed second-lien term loan.
4HEûCORPORATEûFAMILYûRATINGSûAREû""nû
ANDûTHEûFACILITYûISûRATEDû""n
LIENû
Audio product manufacturer DEI SALES
widened the margin on a US$380m
TERMûLOANû"ûTHATûWILLûGOûTOWARDSû
99 OID. It features 101 soft call protection
RElNANCINGûTHEûCOMPANYSûEXISTINGû
capital structure.
LIENûTERMûLOANûDUEûINû
DEI Sales, which does business as Sound
large corporate LBO deals averaged 43% in the
first quarter.
“The equity cheque on those transactions is
the highest ever. I’d say I’m seeing 40% equity in
deals,” the banker said.
The more extensive equity cheques illustrate
the health of the market and deal quality.
“If you’re a first lien-lender, maybe 40% of
the capitalisation is equity, and 20% of the
capitalisation is bonds or second-lien, which
means only 40% of the capital structure is loans.
A 40% loan to value is a lot of protection. A 60%
junior capital protection speaks about the quality
of the deals we’re doing. The credit markets are
very, very healthy right now,” he said.
RISK IS ON
As visibility about the end of the pandemic and
certainty about the US economy grew in the first
quarter, investors’ appetite for riskier assets took
off with leveraged loans and high-yield bonds
returning 1.78% and 0.90%, respectively.
“Global credit markets continued to
demonstrate their robustness throughout the
first quarter of 2021 as the speed of economic
recoveries accelerated,” said Jeremy Ghose, global
head of Investcorp Credit Management, in a report.
The most-favoured nation provision was
amended to 50bp for life with no carve outs,
instead of 50bp for 12 months with carve outs.
Bank of America was the left lead arranger.
KKR was also an arranger.
CUBIC BAGS LBO LOANS
Transportation and defence services
provider CUBICûWRAPPEDû53BNûOFûlRST
lien loans that will fund its buyout by
private equity sponsors Veritas Capital and
Evergreen Coast Capital Corp.
LOANS LEVERAGED LOANS
A year into the pandemic, private equity
sponsors have amassed significant amounts of
cash, burning holes in their pockets. Meanwhile,
defaults are low, which, combined with the
sponsor’s dry powder, creates a suitable
environment for credit.
The expectation of rising rates in the future is
another driver of appetite. Loans tend to do well
in periods of rising rates and inflation, given their
low duration and floating-rate nature.
Add a robust US economy with
“unprecedented fiscal stimulus in the US,
significant progress in vaccinating the
population, and expectations for substantial
pent-up demand as we reach a ‘return to
normalcy’ by summer 2021”, according to the
Investcorp report, and the leveraged asset class
seems “indestructible”.
“There is a lot of bullishness for credit
investors, they feel good about the underlying
credits, and the private equity guys are ready
to put money to work, and they see a lot of very
compelling opportunities,” the first banker said.
The “go-shop” period during which
Proofpoint’s board could actively initiate, solicit
and consider alternative offers ends on June 9.
Michelle Sierra
4HEûCOMPANYûISûRATEDû""n"û4HEûTERMû
LOANû"ûISûRATEDû""""ûANDûTHEûTERMûLOANû#ûISû
RATEDû"A"
$ATABASEûSOFTWAREûlRMûIDERA allocated its
US$205m add-on loans in line with
previously proposed terms.
!û53MûFUNGIBLEûINCREMENTALûlRST
term loan due March 2028 was priced at
BPûOVERû,IBORûTIEDûTOûAûûmOORûANDûAû
that expires in September 2021.
!û53MûSECOND
March 2029 was privately placed and is
5NITEDûACQUIREDûPEERû"OWERSûû7ILKINSûLASTû 4HEûSEVEN
YEARûlNANCINGûCOMPRISESûAû fungible with the company’s existing
October. The proceeds will also repay a 53BNûlRST
LIENûTERMûLOANû"ûANDûAû FACILITYû4HEûlNANCINGûWASûPRICEDûATûBPû
recent equity holders’ investment that was 53MûlRST
LIENûTERMûLOANû# OVERû,IBORûWITHûAûûmOORû4HEûSECOND

funded to close this acquisition. The loans were priced at 425bp over Libor, lien loan has hard call protection of 102
The seven-year loan wrapped at 550bp on the wider end of previous guidance of until March 2022.
over Libor, wider than guidance of 475bp– 400bp–425bp. Proceeds will fund an acquisition.
500bp.
The OID was revised to 98.5 from 99,
LIENûLOANûSIZEû
WHILEûTHEûûmOORûREMAINEDûUNCHANGED
It now comes with 101 soft call protection
for 12 months instead of six months.
Amortisation kicks off at 2.5% before
LIENûLOANûISûRATEDû""nûWITHûAû
increasing to 5% thereafter. It was previously
set at 1% per annum.
4HEYûSTILLûCOMEûWITHûAûûmOORûANû/)$û
of 99 and 101 soft call protection for six
months.
Barclays was the lead bookrunner. Credit
Suisse, BMO, KKR, Mizuho, RBC and Truist were
also bookrunners.
The all-cash transaction is valued at
approximately US$3bn.
International Financing Review May 1 2021
Following the transaction, the company
WILLûHAVEûAûTOTALûPROûFORMAûlRST
OFûABOUTû53BNûANDûAûTOTALûPROûFORMAû
second-lien loan size of US$410m.
4HEûCORPORATEûFAMILYûRATINGSûAREû""nû
4HEûlRST
recovery rating of 3. The second-lien loan is
RATEDû#AA###ûWITHûAûRECOVERYûRATINGûOFû
85
 Calypso’s US$2.3bn unitranche sets
US record
„ US MIDDLE MARKET Private credit loans above US$1bn are a rarity in the leveraged market

Direct lending firm Owl Rock Capital‘s US$2.3bn
unitranche financing for CALYPSO TECHNOLOGY‘s
buyout set a US record for deal size in the
private credit market, further demonstrating the
strength of the asset class.
The financing backs private equity firm Thoma
Bravo’s acquisition of Calypso, a provider of
cloud services and blockchain technology to the
financial service sector. The loan is the largest
completed by a private credit fund in the US.
Private credit loans above US$1bn are a rarity
in the leveraged market. However, sponsors
are increasingly turning to non-bank lenders as
their growing fund sizes suggest they can write
more extensive cheques and offer more certainty
than a broader syndication process. Because
of this certainty, direct lenders provide direct
competition to banks when funding companies
in the upper-middle market tier.
In the last 12 months, private credit firms
have pushed past the previous loan size barrier
of US$2bn. Direct lending firm Golub Capital
provided a US$2.04bn loan to Risk Strategies,
an insurance brokerage firm, and a US$2.2bn
loan to real estate software company MRI
Software. Both loans were completed in 2020
and the first to pass the US$2bn mark.
The largest unitranche ever arranged was by
Ares Management in 2020, a £1.875bn loan,
which refinanced debt provided to UK insurance
group Ardonagh.
“Golub Capital and several other leading
private debt players can now offer sponsors a
kind of financing that until recently wasn’t on the
menu – one-stops as big as US$2bn-plus,” said
David Golub, president of Golub Capital.
Dealing with a single lender can be a boon for
sponsors, allowing them to work with one lender
and avoid a potentially turbulent syndicated
process among a larger group of investors.
“An attribute of direct lending is the benefit of
knowing who your lender is. Private credit firms
manage the debt until maturity, and pricing and
terms are not dependent on a market process or
rating agency,” said Craig Packer, co-founder of
Owl Rock.
Unitranche spreads for the first quarter
averaged 617bp, down from the 2020 average of
626bp for 2020.
STILL OPPORTUNITIES
The red-hot start to the year in the leveraged
market arguably subdued some of the
opportunities for large-scale unitranche facilities
to be used for mergers and acquisitions.
The US syndicated loan market saw a wave
of borrowers tap the asset class to reprice debt
and fund acquisitions as it rebounded from the
pandemic. Leveraged buyout loan volumes
totalled US$30.58bn for the first quarter, almost
matching the 2020 first quarter of US$31.01bn.
In the second and third quarter, volumes fell to
US$10.91bn and US$11.09 – the lowest since
2012.
But direct lending firms say they are
undeterred by the demand in the syndicated
market and are still finding opportunities in the
upper-middle market.
Kipp DeVeer, head of credit at Ares, said the
lender was looking to provide financing for larger
companies.
“We’ve moved up the company size spectrum
because we think there’s really good relative
value in some of these larger companies,”
he said on the firm’s business development
company earnings call on Wednesday.
In the private credit market, the sizeable
unitranche trend is set to continue regardless of
the dynamics in the leveraged market.
“Private debt solutions offer valuable
advantages to sponsors in both choppy markets
and hot markets – advantages such as keeping
a deal confidential and managing timing
concerns,” Golub said.
SOFTWARE IN FOCUS
Private equity sponsors continue to gravitate
towards borrowers in the software industry,
a space that has shown resilience during the
pandemic. Both Calypso and MRI Software
were the recipients of large unitranche
loans.
“We find the software industry compelling,
and software buyouts have been extremely
active during the pandemic, said Erwin Mock,
managing director and head of capital markets
at Thoma Bravo, the private equity firm that
bought Calypso.
“Given the recurring revenues and high
free cashflow, software businesses have been
appealing to lenders and have proven to be
resilient,” he said, adding that these businesses
are attractive to lenders versus a cyclical
business leveraged at 4 times.
Owl Rock oversees an investment fund
specifically focused on technology investments.
According to Packer, it would be easier for an
early-stage software company at the beginning
of its J-curve showing a growth rate ranging
between 20% and 50% to access funding from
a direct lender. The broader syndicated market
would likely need a longer earnings trajectory to
provide a loan.
“A private credit firm can construct a financing
package adapted to a long-term, forward-
looking model that you cannot communicate in
a 45-minute bank meeting,” he said.
Large-scale unitranche financings are better
targeted at more mature software companies.
Typically, a direct lending firm has established
a relationship at the early stage of a company’s
development and can serve as the incumbent
lender for new transactions. Golub, for instance,
has been invested in MRI Software since 2017,
BDC Collateral data show.
“Some of the large financings are for
certain companies that are maybe not growing
as quickly, but are planning to complete
acquisitions. For sponsors, they are leaning more
and more to the unitranche to help execute this
strategy,” Packer said.
David Brooke, Sasha Padbidri

Jefferies was the lead arranger on the
lNANCING
Gas station operator UNITED PACIFICûlNALISEDû
terms for US$550m in loans, including a
NEWûMONEYû53MûADD
ONûTERMûLOANû"û ATûBPûOVERû,IBORûWITHûAûûmOORûANDûû/)$
ANDûANûEXISTINGû53MûTERMûLOANû"ûTHATû
was repriced.
The loans, which mature in November
LIENûNETûLEVERAGEûRATIOûOFûûTIMES
4HEREûISûAûûmOORûANDûTHEûREPRICEDûLOANû
was issued at par and the new money loan
was issued with a 99 OID.
The existing loan was issued in October 2019
The loans have a maintenance covenant
that requires the company to maintain a
lRST
Insulin pump technology provider INSULET
There was a 25bp amendment fee for
rolled money.
Goldman Sachs was the sole lead.
#OMPANYûANDûISSUEûRATINGSûAREû""
INSULET TAKES US$500m TLB
ûWEREûPRICEDûATûBPûOVERû,IBORûATûTHEû "OTHûLOANSûCOMEûWITHûûSOFTûCALLûPROTECTIONû COMPLETEDûAû53MûlRST
LIENûTERMûLOANû"û
wide end of 350bp–375bp guidance. for six months and amortise at 1% per annum. that will be used for general corporate

86 International Financing Review May 1 2021

 LOANS LEVERAGED LOANS

purposes, including retiring debt and The seven-year loan priced at 250bp over The seven-year loan priced at 200bp over
funding investments. Libor from guidance of 225bp–250bp. The Libor from 200bp–225bp at launch. The 99.5
4HEûSEVEN
YEARûTERMûLOANû"ûWASûPRICEDûATû ûmOORûANDûû/)$ûWEREûUNCHANGED /)$ûANDûAûûmOORûWEREûUNCHANGEDû)Tû
325bp over Libor, compared with previous The loan comes with 101 soft call comes with 101 soft call protection for six
guidance of 350bp–375bp. The OID was protection for six months. It will amortise at months and amortises at 1% per annum.
tightened to 99.75 from 99-99.5 at launch. 1% per year, paid quarterly, with the Wells Fargo was the left lead arranger. JP
)TûCOMESûWITHûAûûmOORûûSOFTûCALLû remainder due at maturity. Morgan, Bank of America, Credit Suisse, TD,
protection for six months and amortises at Mandatory pre-payments include 50% of Truist and US Bank were also arrangers.
1% per annum. THEûEXCESSûCASHûmOWûPROCEEDSûSUBJECTûTOû The covenant-lite loan will repay a
Morgan Stanley was the a joint lead leverage-based step-downs. Mandatory pre- 53MûTERMûLOANû"ûUSEDûTOûlNANCEûTHEû
arranger and administrative agent. Citigroup payments also include 100% of net cash acquisition of peer Hargray
was also a joint lead arranger. proceeds from non-ordinary course asset Communications and for general corporate
#ORPORATEûRATINGSûAREû""ûWHILEûFACILITYû sales, subject to leverage-based step-downs purposes.
RATINGSûAREû"A" and customary reinvestment rights, in #ORPORATEûRATINGSûAREû"A""ûANDûFACILITYû
(EALTHCAREûANALYTICSûlRMûPRESS GANEY addition to 100% of debt issue proceeds, RATINGSûAREû"A""
priced US$359.55m of loans, split between a other than debt permitted. TKC HOLDINGS, which provides food services
FUNGIBLEû53MûINCREMENTALûTERMûLOANû"û Citigroup was administrative agent, and TOûPRISONSûDOWNSIZEDûITSûlRST
LIENûTERMûLOANû
and an existing term loan approximately joint lead arranger with Bank of America, Wells to US$525m from US$925m.
US$180m in size that was issued in October. Fargo and JP Morgan. The company is now raising US$400m via
4HEûLOANSûWHICHûMATUREûONû*ULYûûû 2ATINGSûFORûTHEûCOMPANYûAREû"A"û4HEû AûNEWûSEVEN
YEARûSENIORûSECUREDûlRST
LIENû
were priced at 375bp over Libor with a 0.75% FACILITYûISûRATEDû"A""n notes offering that will launch on Monday.
mOOR Salt supplier KISSNER has repriced an US$893m 4HEûSEVEN
YEARûlRST
LIENûLOANûWHICHû
The existing loan was priced at par while the lRST
LIENûTERMûLOANû"ûDUEûINû-ARCHû launched at US$1.125bn on April 19, was
incremental loan was priced at an OID of 99.5. The loan priced at 400bp over Libor with a resized to US$925m on Monday. The
"OTHûCOMEûWITHûûSOFTûCALLûPROTECTIONû ûmOORûANDûAûû/)$ûFROMûGUIDANCEûOFû US$200m was re-allocated to an eight-year
for six months. 99.5–99.75. senior unsecured notes offering that is now
Barclays was the administrative agent and It still comes with 101 soft call protection US$700m in size.
a bookrunner. Goldman Sachs, BMO and for six months and amortises at 1% per year. 4HEûlRST
LIENûLOANûISûNOWûOFFEREDûATûBPû
Deutsche Bank were also bookrunners.
Proceeds will fund a portion of an
acquisition of a healthcare analytics
provider.
LIENûTERMûLOANû"ûTHATû at 98 from 98.5.
Healthcare services company SURGERY
YEARûREVOLVINGûCREDITû
CENTER increased the pricing on its US$125m
fungible add-on loan and extended the
maturity on its existing facility.
"OTHûTHEûEXISTINGûFACILITYûANDûADD
ONûLOANû The US$900m loan priced at 400bp over
now pay 375bp over Libor, up from 325bp,
LIENûLOANûANDûTHEûSECUREDûNOTESû
/Nû!PRILûûTHEûCOMPANYûlNALISEDûAû
US$275m incremental revolving credit
facility due in March 2025 and a US$900m
INCREMENTALûlRST
WILLûRElNANCEûDEBTûANDûBEûUSEDûFORû
acquisitions.
The repriced loan will be fungible with
the incremental loan.
WILLûRElNANCEûANûEXISTINGûDEBTûFACILITY
,IBORûWITHûAûûmOORûANDûû/)$
over Libor, compared with previous
GUIDANCEûOFûBPnBPû4HEûmOORûWASû
revised to 1% from 0.75% and the OID is set
4HEû53MûlVE
facility remains unchanged.
Pricing is expected on Monday afternoon.
Jefferies is the arranger on the deal, which
4HEûlRST
WITHûAûûmOORûCUTûFROMûû4HEûLOANSû Animal hospital operator MISSION AREûRATEDû""ûANDûTHEûUNSECUREDûNOTESûAREû
HAVEûANû!UGUSTûûMATURITYûAûTWO
YEARû VETERINARY PARTNERS has allocated US$525m rated Caa2/CCC.
extension on the original August 2024 OFûLOANSûTHATûWILLûRElNANCEûTHEûCOMPANYSû
maturity. debt.
Lenders consenting to the amendment !ûSEVEN
YEARû53MûlRST
LIENûTERMûLOANû EUROPE/MIDDLE EAST/
received a 25bp fee. The new-money PRICEDûATûBPûOVERû,IBORûWITHûAûûmOORû AFRICA
lNANCINGûHASûAûû/)$ and 99.5 OID, unchanged from launch. It
The loans carry 101 soft call protection for carries 101 soft call protection for six months. TIPICO SEEKS €1.455bn REFI
six months. The company also agreed a privately-
The combined facility includes a 90-day placed US$75m delayed-draw term loan, German sports betting group TIPICO has
springing maturity within the 2025
YEARû LAUNCHEDûAûõBNûTERMûLOANû"ûTOû
unsecured notes if more than 50% are
outstanding.
0ROCEEDSûWILLûRElNANCEûTHEûCOMPANYSû
EXISTINGûNON
FUNGIBLEûlRST
LIENûFACILITYû,ASTû Proceeds will be also used to recapitalise
year Surgery Center obtained a US$120m
loan at 800bp over Libor, which was non-
CALLABLEûFORûTHEûlRSTûYEAR
Jefferies, Barclays, JP Morgan, KKR Capital
LIENûFACILITYûISûRATEDû""nûWITHûAû and a 99.5 OID.
Markets and Macquarie are arrangers on both
transactions.
BEACON WRAPS US$1bn TLB
BEACON ROOFING SUPPLYhas wrapped a US$1bn
SENIORûSECUREDûTERMûLOANû"ûTHATûWILLûREPAYû
ANDûRElNANCEûDEBT
WHICHûISûAVAILABLEûFORûûMONTHSûAûlVE
US$20m revolving credit facility and an
eight-year US$90m second-lien facility that
was also privately placed.
bookrunner, alongside joint bookrunners
its balance sheet and fund near-term
acquisitions.
4HEûCORPORATEûFAMILYûRATINGûISû""nûANDû
THEûlRST
recovery rating of 3.
Jefferies and Golub Capital were arrangers.
CABLE ONE UPS LOAN TO US$800m
"ROADBANDûCOMMUNICATIONSûPROVIDERûCABLE
ONEûHASûPRICEDûAû53MûTERMûLOANû"ûTHATû
WASûINCREASEDûFROMû53M
International Financing Review May 1 2021
RElNANCEûEXISTINGûDEBT
Morgan StanleyûISûLEADINGûTHEûRElNANCINGû
as global coordinator and physical
Credit Agricole, Nomura and UniCredit.
The seven-year term loan is offered at
BPnBPûOVERû%URIBORûWITHûAûûmOORû
It includes 101 soft call for six months and
has a minimum Ebitda covenant of €20m.
#ORPORATEûANDûISSUEûRATINGSûAREû""
In 2019, Tipico raised a €585m term loan,
which with around €140m of cash on
balance sheet paid a third dividend payout
to shareholder CVC. CVC’s acquisition of a
MAJORITYûSTAKEûINû4IPICOûINûûWASû
87
lNANCEDûWITHûAROUNDûõMûOFûEQUITYûANDû The loan is fungible with a €317m the euro loan has 25bp step-downs at 4.5
õMûOFûLEVERAGEDûLOANS ûCOVENANT
LITEûTERMûLOANû"ûTHATûWASû times and 4.0 times.
#6#ûTOOKûITSûlRSTûDIVIDENDûINû*ULYûû raised in 2018 as part of a wider €437m The loan includes 101 soft-call protection
after raising a €190m add-on term loan. It SENIORûANDûJUNIORûLOANûlNANCINGûTOûBACKû for six months.
then took a second shareholder distribution ITSûBUYOUTûBYûPRIVATEûEQUITYûlRMû,INDSAYû #ORPORATEûRATINGSûAREû""ûWHILEûISSUEû
in October 2018 of around €200m, using Goldberg. RATINGSûAREû""
cash on the balance sheet. 4HEûõMû4,"ûPAYSûBPûOVERû%URIBORû /NûTHEûDOLLARû4,"ûCredit Suisse was physical
After the 2019 dividend, CVC no longer WITHûAûûmOORûWHICHûISûWHEREûTHEûADD
ONûISû bookrunner alongside joint bookrunners
had an equity stake in the business. guided to pay. Deutsche Bank, UBS, RBC, UniCredit, Credit
The add-on is also offered at 98–98.5 OID Agricole and Societe Generale.
SOCOTEC MARKETS REFI
French technical and inspection services
provider SOCOTEC has launched an
õM
EQUIVALENTûTERMûLOANû"ûRElNANCING
4HEûSEVEN
YEARû4,"ûCOMPRISESûAûõMû
4,"ûGUIDEDûTOûPAYûBPnBPûOVERû
in a bid to attract investors into the deal as it
COMPETESûWITHûAûNUMBERûOFûOTHERû"ûLOANSû
in the market. Expected corporate ratings
AREû""n
Barclays and HSBC are leading the
lNANCINGûASûPHYSICALûBOOKRUNNERS
The 2018 buyout loan also comprised a
/NûTHEûEUROû4,"ûPHYSICALûBOOKRUNNERSû
were UBS, Deutsche Bank and RBC, alongside
joint bookrunners Credit Suisse, UniCredit,
Credit Agricole and Societe Generale.
Mandated lead arrangers are Natwest, Bank
of Ireland and Commerzbank.
4HEûBUYOUTûlNANCINGûALSOûCOMPRISESû
%URIBORûWITHûAûûmOORûATûû/)$ûANDûAû €70m eight-year second-lien loan paying SFr318m equivalent of pari passu secured
53Mû4,"ûGUIDEDûTOûPAYûBPnBPû BPûOVERû%URIBORûWITHûAûûmOORûATûû bonds and SFr513m equivalent of unsecured
OVERû,IBORûWITHûAûûmOORûATûû/)$
The dollar loan is offered with 101 soft
call for six months.
The euro loan has three pricing step-
downs of 25bp, while the dollar loan has
two step-downs of 25bp each, with all step-
downs based on 0.5 times of deleveraging
from opening secured net leverage.
TIGHTENEDûPRICINGûONûAûõMûlRST
LIENû
4HEûLOANûRElNANCESû3OCOTECSûEXISTINGû
TERMûLOANû"ûANDûREPAYSûAûõMûINJECTIONû
from shareholders, which backed strategic
add-on acquisitions in 2020.
#ORPORATEûANDûFACILITYûRATINGSûAREû""
BNP Paribas and Deutsche Bank are active
bookrunners on the euro loan, while JP
YEARûlNANCINGûCOMPRISESûAû
Morgan is active bookrunner on the US
OID and a €50m six-year RCF. bonds.
PACCOR specialises in manufacturing There is also a SFr375m revolving credit
plastic packaging for the food, beverage, facility.
healthcare and agricultural sectors.
UNIT4 WRAPS BUYOUT LOAN
LONZA FINALISES LBO LOAN
$UTCHûBUSINESSûSOFTWAREûlRMûUNIT4
0RICINGûHASûlNALISEDûONûTHEûDUAL
currency leveraged loan that forms TERMûLOANû"ûBACKINGûITSûBUYOUTûBYû4!û
PARTûOFûAûWIDERû3&RBNû53BN û Associates.
DEBTûlNANCINGûBACKINGû"AINû#APITALû The seven-year loan pays 400bp over
and Cinven’s acquisition of Swiss Euribor, from initial guidance of 400bp–
contract drug maker LONZA‘s 425bp. The loan was issued at par from an
ingredients unit. /)$ûOFûûATûLAUNCHû)TûINCLUDESûAûûmOORû
4HEûSEVEN
and 101 soft call for six months.
53BNûTERMûLOANû"ûTHATûWASûREDUCEDû Morgan Stanley and JP Morgan led the
DOLLARûLOANû".0û0ARIBASûISûADMINûAGENT FROMû53BNûANDûAûõMû4,"ûTHATûWASû lNANCINGûASûJOINTûPHYSICALûBOOKRUNNERSû
increased from €725m. alongside Barclays and Mizuho as mandated
PACCOR LAUNCHES ADD-ON "OTHûLOANSûPRICEDûWITHûAûMARGINûOFûBPû lead arrangers.
OVERû,IBOR%URIBORû4HEûDOLLARû4,"ûWASû #ORPORATEûRATINGSûAREû"""nûWHILEûISSUEû
European plastic packaging manufacturer GUIDEDûATûBPnBPûWHILEûTHEûEUROû4,"û RATINGSûAREû"""n
PACCOR PACKAGING, previously known as was guided at 375bp–400bp. The sale by Advent International was
Coveris Rigid, has launched a €120m 4HEûDOLLARûLOANûHASûAûûmOORûANDûû ANNOUNCEDûONû-ARCHûûINûANûOFlCIALû
add-on term loan for acquisitions and to /)$ûWHILEûTHEûEUROûLOANûHASûAûûmOORûANDû announcement by the companies, and
RElNANCEûDRAWINGSûUNDERûAûREVOLVINGû 99.5 OID, in line with guidance. Partners Group will invest alongside TA
credit facility, as well as general corporate The dollar loan has a 25bp step-down at Associates in a deal valued in excess of
purposes. 4.5 times senior secured net leverage, and US$2bn.

US LEVERAGED LOANS EUROPEAN LEVERAGED LOANS EMEA SPONSORED LOAN BOOKRUNNERS

BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE BY VOLUME: 1/1/2021 TO DATE
Managing No of Total Share Managing No of Total Share Europe, Middle East, Africa
bank or group issues US$(m) (%) bank or group issues US$(m) (%) Managing No of Total Share
1 Bank of America 242 49,176.56 12.2 1 BNP Paribas 33 6,330.17 9.8 bank or group issues US$(m) (%)
2 JP Morgan 190 36,799.66 9.1 2 JP Morgan 20 5,002.41 7.7 1 JP Morgan 14 4,276.32 8.9
3 Credit Suisse 122 28,552.57 7.1 3 Deutsche Bank 24 4,180.21 6.5 2 BNP Paribas 21 4,076.17 8.5
4 Wells Fargo 129 25,732.13 6.4 4 Credit Agricole 23 3,887.57 6.0 3 Barclays 11 3,404.10 7.1
5 Goldman Sachs 116 24,256.59 6.0 5 Barclays 13 3,615.10 5.6 4 Deutsche Bank 19 3,129.14 6.5
6 Barclays 127 23,536.55 5.8 6 Bank of America 19 3,298.79 5.1 5 Credit Suisse 14 2,691.96 5.6
7 Citigroup 95 20,170.51 5.0 7 Credit Suisse 17 3,226.46 5.0 6 Credit Agricole 17 2,659.24 5.5
8 RBC 94 15,955.58 3.9 8 HSBC 18 3,151.70 4.9 7 Goldman Sachs 17 2,651.09 5.5
9 Deutsche Bank 91 15,507.59 3.8 9 Goldman Sachs 20 3,108.48 4.8 8 Bank of America 12 2,227.35 4.6
10 Jefferies 57 13,865.29 3.4 10 Natixis 12 2,465.29 3.8 9 Natixis 9 2,039.73 4.2
Total 664 404,209.86 Total 65 64,746.66 10 UniCredit 10 1,750.70 3.6
Excluding Project Finance. Excluding project finance. Western Europe only included. Total 43 48,194.94
Excluding project finance.
Source: Refinitiv SDC code: P2 Source: Refinitiv SDC code: P10 Source: Refinitiv SDC code: P13

88 International Financing Review May 1 2021


Advent took the business private in 2014
INûAûDEALûVALUINGûTHEûlRMûATûNEARLYûõBN
CIMPRESS SEALS REFINANCING
Ireland-based customised marketing
products group CIMPRESSûHASûlNALISEDû
terms on its US$1.15bn-equivalent term
YEARû
LOANû"ûTHATûWILLûRElNANCEûITSûEXISTINGû
bank loans and expensive second-lien
debt it raised at the height of the
pandemic.
MIRA and Aware Super. Its board has advised
shareholders to vote in favour of the offer
when they meet in June.
TRIO LEAD TLB FOR BINGO BUY
Macquarie Infrastructure and Real Assets
has mandated three banks to arrange a
TERMûLOANû"ûOFûABOUTû!BNû53M ûTOû
fund its proposed acquisition of BINGO
INDUSTRIES.
Goldman Sachs, Jefferies and Credit Suisse are
LOANS LEVERAGED LOANS
GREENCROSS OBTAINS ACCORDION
TPG Capital-backed Australasian pet care
company GREENCROSS has obtained a A$211m
accordion facility for dividend
recapitalisation.
TPG self-arranged the latest loan, which
ADDSûTOûANûEXISTINGû!MûSIX
UNITRANCHEûTHEû53ûPRIVATEûEQUITYûlRMûRAISEDû
for the leveraged buyout of Greencross in
2019.
The pro forma net leverage is reduced to
Prior to close the deal was revised, ARRANGINGûTHEûlNANCINGûWHICHûISûLIKELYûTOû about 3.5 times.
including changes to the collateral package, be in US and Australian dollars. #REDITû3UISSEûANDû5"3ûWEREûTHEûMANDATEDû
restrictions on the transfer of material ").'/ûAGREEDûTOûAû!BNûBUYOUTûBYû lead arrangers and bookrunners of the 2019
intellectual property, inclusion of a funds managed by Macquarie Group. deal, which attracted banks and
springing maturity and additional MFN UBSûISûlNANCIALûADVISERûTOû").'/ûWHILEû institutional investors across Australasia in
protection. Herbert Smith Freehills is legal adviser. syndication.
4HEûSEVEN
YEARûlNANCINGûARRANGEDûBYû ,ASTû/CTOBERû").'/ûRAISEDûAû!Mû The previous loan carried an opening
lead-left bookrunner and administrative four-year loan from existing and new leverage of about 4.5 times and an opening
agent JP MorganûCOMPRISESûAû53Mû4,"û lenders. INTERESTûMARGINûOFûBPûOVERû""39û
ANDûAûõMû4," Listed on the Australian Securities Greencross owns hundreds of Petbarn
"OTHûLOANSûPRICEDûATûBPûOVERû,IBOR %XCHANGEû").'/ûHASûAûmEETûOFûMOREûTHANû stores and a network of veterinary clinics in
Euribor from guidance of 350bp–375bp. 330 trucks across New South Wales and Australia and New Zealand.
4HEûDOLLARûTERMûLOANûHASûAûûmOORûANDûAû Victoria states, as well as recycling and TPG, through special purpose vehicle
99 OID, from 99.0–99.5 at launch, while the COLLECTIONûFACILITIESûANDûLANDlLLûSITES Vermont Aus, acquired 100% of Greencross
EUROûLOANûHASûAûûmOORûWITHûAûû/)$û at an enterprise value of about A$1bn.
unchanged from launch. AIRTRUNK DIALS FOR ACCORDIONS
There is 101 soft call for six months. SIX BACK HITACHI METALS LBO
Cimpress will also retain access to a Data centre company AIRTRUNK has
US$250m revolving credit facility, which tapped two incremental facilities to a Six Japanese banks are providing a debt
HASûBEENûEXTENDEDûTOûlVEûYEARS !BN
EQUIVALENTûlVE
YEARûLOANû lNANCINGûFORûGLOBALûPRIVATEûEQUITYûlRMû"AINû
4HEû4,"ûHASûNOûlNANCIALûCOVENANTSûWHILEû signed last year. Capital’s planned leveraged buyout of HITACHI
THEû2#&ûHASûAûMAXIMUMûûTIMESûlRST
LIENû Deutsche Bank, which was the mandated METALS.
net leverage covenant with a cap on cash lead arranger, bookrunner and underwriter Aozora Bank, Mizuho Bank, MUFG, SMBC,
netting at US$50m. of last year’s loan, arranged the new loans Shinsei Bank and Sumitomo Mitsui Trust Bank are
4HEûCOMPANYûISûRATEDû"""nûANDûTHEû denominated in Australian and Singapore the lenders.
FACILITYûISûRATEDû"A"" dollars. Hitachi, the parent of Hitachi Metals, has
4HEûlRSTûACCORDIONûFACILITYûCOMPRISESû agreed to sell a 53.45% stake in its metals
ASIA-PACIFIC
VOCUS DETAILS TLB
Prospective lenders are being sounded
out with indicative terms for a A$2.15bn-
EQUIVALENTû53BN ûlNANCINGû
tranches of S$200m (US$151m) and A$41m.
The second add-on facility is split into
3MûANDû!MûPORTIONS
Credit Agricole CIB, DBS Bank and OCBC Bank
joined the second add-on.
The 2020 borrowing comprises tranches
or about A$1.30bn, S$250m and HK$180m
(US$23m) paying interest margins of 450bp
UNITûTOûFUNDSûINCLUDINGû"AINûFORûcBNû
(US$3.51bn), the latest in its divestiture
programme in the past few years.
"AINûISûTEAMINGûUPûWITHû*APANESEû
domestic funds Japan Investment Corp and
Japan Industrial Partners, which were also
shortlisted in the bids last November.
"#*
ûAûSPECIALûPURPOSEûCOMPANYûOWNEDû
backing the proposed takeover of OVERû""393/2(IBORû)TûHADûANûAVERAGEûLIFEû BYû"AINûWILLûLAUNCHûTHISû.OVEMBERûAûcû
Australian telecommunications company of 4.75 years. per share offer for Hitachi Metals, which
VOCUS GROUP. In April last year, Macquarie represents a 15.8% premium over Tuesday’s
Morgan Stanley, Deutsche Bank and Natixis Infrastructure and Real Assets reached closing price.
AREûARRANGINGûTHEûlNANCINGûWHICHûISû lNANCIALûCLOSEûOFûTHEûACQUISITIONûOFûANûû The sale of the controlling stake in
denominated in Australian and US dollars stake in AirTrunk, valuing the company at Hitachi Metals is the latest such move
split into a A$1.85bn-equivalent seven-year more than A$3bn. Hitachi has undertaken to unload non-core
term loan for the acquisition, a A$150m A consortium, led by Macquarie Asia assets in recent years. It has also decided to
seven-year term loan for capital expenditure Infrastructure Fund 2 and including other sell half of its 51% stake in Hitachi
ANDûAû!MûlVE
YEARûREVOLVINGûCREDITû MIRA-managed partners, acquired the Construction Machinery, another listed unit
facility. stake from founder and CEO Robin WITHûAûMARKETûVALUEûOFûcBN
Initial margins are guided at 350bp– Khuda, Goldman Sachs and Sixth Street Last year, Hitachi sold Hitachi Chemicals,
BPûOVERû""39ûFORûTHEûSEVEN
YEARûTERMû Partners. a supplier of materials for semiconductors,
tranches in Aussie dollars and 350bp over Khuda continues to hold a material to Showa Denko, following the sales in 2017
""39ûFORûTHEûlVE
YEARûREVOLVER stake in the business and remains as CEO of power tools unit Hitachi Koki to KKR and
Leverage is about 4.9 times. under a long-term arrangement, chip-making equipment manufacturer
On March 9, Vocus announced it had supported by the existing executive Hitachi Kokusai Electric to a KKR-led
agreed to a A$3.5bn takeover offer from management team. consortium.

International Financing Review May 1 2021 89

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to your achievements and
backing-up your message
with the most authoritative
and respected endorsement
in the industry.

CERTIFICATE
REPRINTS
An IFR Award is always
the result of a team effort,
so why not recognise each
individual’s contribution
by ordering extra copies
of your certificate?
Certificates can be supplied
as framed or unframed.
CARTOON
REPRINTS
Some articles in the IFR
Awards supplement are
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containing caricatures of
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Award-winning company.
These can be reprinted to
create unique souvenirs of
your achievement, and can
be supplied as framed or
unframed.

For more information, email paul.holliday@lseg.com

IFRAwards.com #ifrawards
 EQUITIES
Australia  China  India  Philippines  South Korea  Finland  France  Germany 
Greece  Netherlands  Norway  UK 101 United States  Structured Equity 110

„ FRONT STORY IPOs

Zomato brings rare tech issue

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International Financing Review May 1 2021 91

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92 International Financing Review May 1 2021

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International Financing Review May 1 2021 93

 PowerGrid opens rare InvIT IPO
„ INDIA Infrastructure trust float is the first by a state-owned issuer
POWERGRID INFRASTRUCTURE INVESTMENT TRUST has
launched India’s first state-owned, and largest,
InvIT IPO, confident that an attractive yield and
sovereign backing will draw investors to the
Rs77bn (US$1.03bn) deal even as a harsh second
wave of the Covid-19 pandemic grips the nation.
There have been no InvIT IPOs in India since
IRB InvIT Fund (road assets) and India Grid
(power transmission) floated in 2017 as their
subsequent underperformance has dissuaded
other sponsors. IRB InvIT last traded at Rs54,
down from an IPO price of Rs102.
More recently, sponsors have preferred the
alternative route of listing an InvIT through a private
placement to at least five institutions. PGInvIT,
though, hopes it can woo a broader investor base.
“It is the best InvIT asset portfolio from India.
The sponsor is a blue chip and the yield is
attractive,” a Mumbai-based ECM banker away
from the deal said.
Sponsor Power Grid Corporation of India is the
country’s largest power transmission company
and its shares are up 17% this year.
Up to 777.5m PGInvIT shares (with a 65:35
primary/secondary split) are on offer in a Rs99–
Rs100 price range until May 3 via Axis, Edelweiss,
HSBC and ICICI Securities.
The top of the range implies an annual
yield of 9.5%, in line with the only other power
PHILIPPINES
DEL MONTE PHILIPPINES FILES FOR IPO
ONLYûINSTITUTIONSû4HEû
transmission InvIT, India Grid Trust, sponsored
by KKR.
The PGInvIT comprises five projects
encompassing 11 transmission lines covering
3,698 circuit kilometres. The transmission
service agreements are for 35 years and the
average remaining term is 32 years. The useful
life of the transmission lines can be extended
to 50 years with some renovations, analysts
said.
Choice Broking, which has a buy on the IPO,
said: “With initial portfolio assets characterised
with perpetual ownership, higher visibility
on cashflows, minimal counterparty risk and
lower operating risk, the trust is well placed to
benefit from the structural growth in the power
transmission space.”
LOCAL INTEREST
Local mutual funds have shown interest in the
anchor tranche, which was open for one day on
Wednesday. Around 47 investors bought 348m
shares. CPP Investment Board, Capital Group
and Fidelity were among the foreign investors
while local funds included SBI Mutual Fund,
HDFC Mutual, Sundaram Mutual Fund and Tata
Mutual Fund.
The 2017 IPOs of IRB InvIT Fund and India
Grid Trust did not attract any interest from
ANDûûOFûTHEIRûSTAKESûRESPECTIVELYûINûTHEû
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Credit Suisse and Morgan StanleyûAREûJOINTû
domestic mutual funds, which were focused on
growth stocks rather than yield plays.
As of Thursday, the IPO was 10% subscribed.
Other InvIT listings in the pipeline are taking
the placement route. State-owned National
Highways Authority of India is planning to list
through a private placement of up to Rs50bn while
Tata Power and Shrem Group are also planning
respective placements of Rs80bn and Rs6bn.
Bankers are hoping that a successful listing
from PGInvIT will comfort the edgy market. The
benchmark S&P BSE Sensex index was up 0.5%
in April but had lost most of the gains made
earlier in the year. In the year to-date the index
is up 4.2%.
India has been registering over 300,000 new
coronavirus cases daily lately, including a record
of 379,257 on Thursday, according to the health
ministry.
“The market may slow down a bit but will not
shut down. There is still appetite for good deals,”
another ECM banker said.
Last week, online food delivery company
ZOMATO filed an IPO of up to Rs82.5bn in what
could be the country’s biggest technology
sector listing (see separate story). Cement
manufacturer Nuvoco Vistas also plans to file for
an IPO of Rs50bn this week.
S Anuradha
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94 International Financing Review May 1 2021

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International Financing Review May 1 2021 95

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3 JP Morgan 39 5,956.50 6.7 FRANKFURT IPO
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5 Bank of America 26 4,317.93 4.9 /PEN
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96 International Financing Review May 1 2021

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International Financing Review May 1 2021 97

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LOCK UPûONû4HURSDAYûEVENINGûFROMûTHEûLATEû SEEKSûTOûATTRACTûMOREûTECHû)0/S HADûBEENûVERBALûGUIDANCEûOFûPnPûAHEADû
-ARCHûSELL DOWNûBYû4RINGLEû)NVESTMENTSûINû BerenbergûJefferies and KKR Capital Markets OFûPRICING
RADIOûANDûX RAYûTECHNOLOGYûBUSINESSûCOMET AREûJOINTûGLOBALûCOORDINATORSûANDûJOINTû )NûTOTALûMûSHARESûWEREûSOLDûATûPû
HOLDINGûALLOWINGûTHEûSHAREHOLDERûTOûSELLûITSû BOOKRUNNERSûWITHûNeedham and Piper Sandlerû EACHûANûûDISCOUNTûTOûTHEûPûCLOSEû
REMAININGûûSTAKEûFORû3&RMû53M  4HEûBANKSûEARNEDûAûBASEûFEEûOFûûWITHûAû ANDûAPPROXIMATELYûaûWASûRAISEDû
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ORDERSûBELOWû3&RûPERûSHAREûRISKEDû ,ONDONûANDûTHEûNEWLYûESTABLISHEDû FROMû5+ûANDû53ûMONEYûANDûALLOCATIONSû
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4HEûSHARESûCLOSEDûONû&RIDAYûmATûTOûTHEû!""û 4HEûCOMPANYûWILLûINVESTûINûAûDIVERSIlEDû Peel HuntûH&P Advisory and Cantor Fitzgerald
PRICEû4HEûSTOCKûHADûRISENûMOREûTHANûûINû PORTFOLIOûOFûVESSELSûPRIMARILYûSECOND HANDû WEREûJOINTûBOOKRUNNERS
ûASûOFûTHEû4HURSDAYûCLOSE SHIPS 4HEûSHARESûCLOSEDûATûPûONû7EDNESDAY

International Financing Review May 1 2021 101

 FOUNDERS SELL MOST OF STAKE IN 4HEûTRADEûWASûSKEWEDûTOûEXISTINGû #OVID ûVACCINEûITûHELPEDûDEVELOPûWITHû
KEYWORDS STUDIOS SHAREHOLDERSûWHOûTOOKûTHEûBULKûOFûTHEûSTOCKû !STRA:ENECA
INûAûBOOKûOFûFEWERûTHANûûLINESûWITHûSTRONGû Morgan StanleyûJefferiesûBarclays and
!ûûSELL DOWNûONû4UESDAYûEVENINGûINû SUPPORTûFROMû5+ûANDû53ûLONG ONLYûMONEY William BlairûONû4HURSDAYûPLACEDûMûSHARESû
KEYWORDS STUDIOSûWASûPRICEDûATûaûPERûSHAREû 0ROCEEDSûWILLûBEûUSEDûTOûCUTûDEBTûANDû ATû53ûMIDPOINTûTOûTHEûINDICATEDû
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VIDEOûGAMINGûSERVICESûGROUPûCUTûTHEIRûSTAKE PURPOSESû4HEûCOMPANYûSAIDûITûHASûAûSTRONGû 53MûMARKETûCAPITALISATIONû
4HEûVENDORûWASû0%1û(OLDINGSûAûVEHICLEû PIPELINEûOFûMOREûBOLT ONûACQUISITIONS 4HEûBANKSûLAUNCHEDûMARKETINGûONû
OFûTHEûFOUNDERSûLEDûBYûNON EXECUTIVEû 2ESTOREûSHARESûHAVEûNOTûMOVEDûMUCHûTHISû -ONDAYûMORNINGûJUSTûASûNEWSûBROKEûOFûAû
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AûûSTAKEûSUBJECTûTOûAûNINE MONTHû PûANDûCLOSINGûONû&RIDAYûATûTHEûSAMEûLEVELû !STRA:ENECAûOVERûDELAYSûINûSHIPPINGû
LOCK UPû!TûTHEûPLACINGûPRICEûTHEûREMAININGû FORûAûDAYûGAINûOFû HUNDREDSûOFûMILLIONSûOFûDOSESûOFûTHEû
STAKEûISûVALUEDûATûaM Peel HuntûWASûSOLEûBOOKRUNNERûANDûBROKERû CORONAVIRUSûVACCINEû
+EYWORDSû3TUDIOSûSHARESûOPENEDûATûaû WITHûCanaccord Genuity ASûlNANCIALûADVISER !STRA:ENECAûSAIDûLASTûMONTHûITûWOULDûBEûABLEû
ONû7EDNESDAYûANDûWEREûSTILLûABOVEûPRICINGû TOûDELIVERûONLYûONE THIRDûOFûTHEûûMILLIONû
ATûTHEûaûCLOSE COMPASS PATHWAYS RAISES US$144m IN DOSESû%5ûOFlCIALSûHADûEXPECTEDûBYûTHEûENDûOFû
NumisûWASûSOLEûBOOKRUNNERûONû4UESDAYSû NASDAQ RETURN *UNEû!STRA:ENECAûWHICHûBLAMEDûTHEûSHORTFALLû
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102 International Financing Review May 1 2021

 EQUITIES AMERICAS

EARNINGSûTHEû53û)0/ûMARKETûREMAINSûMUCHû
MOREûCHALLENGINGûTHANûAûFEWûMONTHSûAGOû
PROMPTINGûSOMEûISSUERSûTOûREINûINûTHEIRû
AMBITIONS
Endeavor Group goes the
4HEûPASTûWEEKûSAWûONEû)0/ûINSURERû
&ORTEGRA ûPULLEDûANDûTWOûLARGEûDEALSûTAKEû distance in NYSE debut
SIGNIlCANTûPRICINGûHAIRCUTSûHOMEû
HEALTHCAREûlRMû!VEANNAû(EALTHCAREûANDû „ US Endeavor Group golden in the second attempt at NYSE IPO
SOLARûTRACKERûMAKERû&4#û3OLAR ûTHOUGHûSIXû
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53BN
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)0/SûINûTHEûCOMINGûDAYSûANDûSEVERALûAREû
After pulling its first IPO attempt 18 months ago, Sachs-led syndicate at that time was unable to
Ari Emanuel’s ENDEAVOR GROUP scored a hard- consummate a deal, even after cutting the price
fought victory by raising US$511m from its NYSE to US$26–$27.
IPO. The focus at that time was on Endeavor’s
LIKELYûTOûPUSHûAHEADûBUTûTHEûVOLUMEûOFûNEWû Morgan Stanley, Goldman Sachs, JP Morgan legacy business in talent management, including
ISSUEûACTIVITYûAPPEARSûTOûBEûSLOWINGûAMIDû and Deutsche Bank on Wednesday night placed the William Morris Agency and IMG, a complex
INVESTORûCAUTIONûANDûGREATERûSELECTIVITY 21.3m Endeavor shares at US$24.00, the top of business that confused many potential investors.
4HEûCOMINGûWEEKûBRINGSûlVEû53û)0/Sû the US$23–$24 range. Unhappy with Goldman’s performance,
SEEKINGûJUSTû53MûLEDûBYûTHEû53Mû After an up-and-down session on Thursday Emanuel demoted the bank and elevated
.ASDAQû)0/ûOFûACTRESSû*ESSICAû!LBASû that saw the stock spend some time in the Morgan Stanley into the leadership role.
CONSUMERûPRODUCTSûBRANDû(ONESTû#O hole and trade as low as US$23.25, Endeavor The goal this time around was to reposition
4HEûPASTûWEEKûALSOûSAWûSPONSOR
BACKEDû managed a modest 5% day-one return by closing Endeavor with a much easier to understand
OFFERINGSûRETURNûTOûTHEûFOREûCAPPEDûBYû at US$25.20. business model.
4HURSDAYûNIGHTSû53BNûBLOCKûSELL
DOWNû Having already endured Endeavor CEO “Investor education focused on how the
BYû++2ûû#OûOFûITSûLARGEûSTAKEûINûPAYMENTSû Emanuel’s wrath over their 2019 failure, the flywheel of agents, artists and content fits
PROVIDERû&ISERV banks left little to chance the second time together,” the banker said. “Investors realised
++2ûWHICHûHASûALSOûBEENûBEHINDûTHEû)0/Sû around. they were buying assets at a low-teens valuation
OFû!PP,OVINû+NOW"EûANDû%NDEAVORûINû Some of the 14 institutional investors that compete with premier content creators
RECENTûWEEKSûALSOûHIGHLIGHTEDûTHEû
ACCELERATINGûPACEûOFûPRIVATEûEQUITYû
MONETISATIONSûBYûAGREEINGûEARLYûONû&RIDAYûTOû
SELLûVITAMINSûMAKERû"OUNTIFULûTOû.ESTLEûFORû
53BN
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LARGEû)0/ûFROMûTHEûPIPELINEûGIVENû"OUNTIFULû
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EARLYûNEXTûWEEKûINCLUDEû"LACKSTONE
BACKEDû targeted on Endeavor’s 2019 IPO marketing effort,
that backed a concurrent US$1.79bn private
placement at a fixed price of US$24.00 also
bought stock in the IPO, a banker close to the
deal said.
After closing the books five times covered late
on Tuesday, the syndicate placed half of the deal
with just 10 accounts and 85% with the top 25
investors.
Though the offer price was below the range
Even so, investors were not willing to assign
trading in the high-teens.”
Consolidating its ownership of the Ultimate
Fighting Championship mixed martial arts
promotion simplifies matters even further.
The UFC has operated as an indirect
subsidiary of Endeavor since 2017 when, with
help from private equity firms KKR & Co and
Silver Lake Partners, Endeavor bought a 50.1%
stake for US$4bn.
DIGITALûOUTSOURCERû4ASK5SûEDUCATIONûSOFTWAREû it allowed Endeavor to accomplish its goals. Endeavor full credit for its partial buyout of the
PROVIDERû0OWER3CHOOLû#HINESEûINSURANCEû “The big success is that Endeavor was able UFC back in 2019.
PLATFORMû7ATERDROPûGENEûTHERAPYûPLAYû to achieve a higher valuation for its legacy Endeavor is using the proceeds from its
'YROSCOPEû4HERAPEUTICSûCELLûTHERAPYûDEVELOPERû businesses than what was available the last time IPO and private placement to purchase the
4ALARISû4HERAPEUTICSûANDûFATTYûACIDûBIOTECHû around,” the banker said. remaining 49.9% of the mixed martial arts
3AGIMETû"IOSCIENCESûWHILEûOATûMILKûMAKERû/ATLYû
ANDûMORTGAGEûINSURERû'ENWORTHû-ORTGAGEûCOULDû
THEORETICALLYûPUSHûAHEADûLATERûINûTHEûWEEK
4HEûPASTûWEEKûALSOûSAWûSOMEûSIGNSûTHATû
30!#û)0/SûAREûTRYINGûTOûSTAGEûAûCOMEBACKûASû
US EQUITIES
BOOKRUNNERS: 1/1/2021 TO DATE
Managing No of
bank or group issues
The terms attributed Endeavor an enterprise
value of US$14.5bn, including a hefty US$4bn of
net debt.
Endeavor priced at a 2021 EV/Ebitda multiple
of 14 times, rising to 16 times after adjusting for
equity-based compensation.
Though Endeavor initially marketed its
2019 IPO at US$30–$32 a share, the Goldman
Total Share
US$(m) (%)
promotion company that it does not already own.
Given clear sightlines into the UFC business as
a wholly-owned Endeavor subsidiary, investors
were able to make easy comparisons between
Endeavor and World Wrestling Entertainment,
the professional wrestling promotion, which
trades at 15 times EV/Ebitda.
Robert Sherwood

1 Goldman Sachs 103 16,027.70 14.3

TWOû30!#SûPRICEDûFORûPROCEEDSûOFû53Mû TOPûOFûANûUPWARDLYûREVISEDûRANGEûANDûSTILLû
2 Morgan Stanley 91 15,667.19 13.9
BUTûREGULATORYûSCRUTINYûOFûTHEûBOOMûPRODUCTû LEAVEûINVESTORSûWANTINGûMORE
3 JP Morgan 95 14,577.64 13.0 ANDûDIMINISHINGûRETURNSûFROMû30!#ûMERGERSû "RIGHTONû(EALTHû0RIVIASûPRINCIPALûOWNERû
4 Bank of America 87 11,532.64 10.3 AREûWEIGHINGûONûAûBROADERûREBOUNDû)NûALLû ANDûINVESTMENTûAFlLIATEûOFû'OLDMANû3ACHSû
5 Citigroup 44 5,683.07 5.1 ûNEWû30!#SûPRICEDû)0/SûINû!PRILûWELLû CERTAINLYûHADûCAPACITYûTOûSATISFYûTHATû
6 Barclays 53 5,430.78 4.8 DOWNûFROMûMOREûTHANûûINû-ARCHû DEMANDûBUTûWILLûINSTEADûWAITûTOûCASHûOUTûATû
7 Credit Suisse 43 4,566.52 4.1 PREMIUMûVALUATIONSûINûTHEûFUTURE
8 Jefferies 49 3,577.35 3.2 PRIVIA HEALTH RECEIVES POSITIVE Goldman SachsûJP Morgan Credit SuisseûPiper
9 RBC 28 2,781.12 2.5 DIAGNOSIS ON IPO Sandler and William Blair ONû7EDNESDAYû
10 UBS 22 2,079.27 1.8 PRICEDûTHEûSALEûOFûMû0RIVIAûSHARESûATû
Total 435 112,447.06 0ROVINGûTHEûAPPEALûOFûTECH ENABLEDû 53ûTHEûTOPûOFûTHEû53nûRANGEûTHATû
Including all domestic and international deals and rights issues HEALTHCAREûPROVIDERSûPRIVIA HEALTHûWASûABLEû WASûREVISEDûFROMûTHEûORIGINALû53nû
Source: Refinitiv SDC code: C3r TOûACCELERATEûPRICINGûOFûITSû)0/ûPRICEûATûTHEû PRICEûTALK

International Financing Review May 1 2021 103

ECM DEALS: WEEK ENDING 30/4/2021
Stock Country Date Amount Price Deal type Bookrunner(s)
Banco Modal Brazil 28/04/2021 R$1,021.5m R$20.01 IPO (Primary & Secondary) Credit Suisse, BofA, Itau
BoA Safra Sementes Brazil 27/04/2021 R$4m R$9.90 IPO (Primary) XP, BBVI
Caixa Seguridada Participacoes Brazil 27/04/2021 R$5,0.4m R$9.67 IPO (Secondary) Morgan Stanley, Caixa, BofA, Credit Suisse, Itau, UBS
Lojas Renner Brazil 29/04/2021 R$3,978m R$39 Follow-on (Primary) Itau, BTG Pactual, JP Morgan, MS, Santander
Magnet Forensics Canada 27/04/2021 C$90m C$17 IPO (Primary) BMO CM, Canaccord Genuity
LK Technology China 27/04/2021 HK$570m HK$9.50 Follow-on (Primary) CLSA
Orient Overseas (International) China 29/04/2021 HK$840m HK$120 Follow-on (Secondary) JP Morgan
WuXi Biologics (Cayman) China 27/04/2021 HK$11.6bn HK$107 Follow-on (Secondary) Morgan Stanley
Technip Energies France 26/04/2021 €277.5m €11.10 Accelerated Bookbuild (Secondary) Morgan Stanley, Societe Generale
468 SPAC Germany 29/04/2021 €3m €10 IPO (SPAC) Berenberg
Deutsche Beteiligungs Germany 27/04/2021 €105m €28 Rights issue Jefferies, UniCredit/Kepler Cheuvreux
Katek Germany 28/04/2021 €79m €23 IPO (Primary & Secondary) Hauck & Aufhaeuser, MM Warburg
Synlab Germany 28/04/2021 €671m €18 IPO (Primary & Secondary) Goldman Sachs, JP Morgan, BofA, Barclays,
Deutsche Bank, HSBC, Jefferies, UniCredit
ElvalHalcor Greece 26/04/2021 €50m €2 Accelerated Bookbuild (Secondary) AXIA Ventures, EUROXX Securities
Affle India India 28/04/2021 Rs6bn Rs5,2 Follow-on (Primary) Axis, Nomura, UBS
Euronext Netherlands 29/04/2021 €211.4m €75.50 Accelerated Bookbuild (Secondary) Societe Generale
Pegasus Europe Netherlands 28/04/2021 €5m €10 IPO (SPAC) Citigroup, JP Morgan
Elkem Norway 26/04/2021 NKr1.89bn NKr33.50 Accelerated Bookbuild (Primary) ABG Sundal Collier, Morgan Stanley
AC Energy Philippines 28/04/2021 Ps12.4bn Ps6.50 Follow-on (Primary) BPI, CLSA, UBS
MMK Russia 26/04/2021 Rbs22.95bn Rbs68.475 Accelerated Bookbuild (Secondary) Goldman Sachs
Segezha Russia 27/04/2021 Rbs30bn Rbs8 IPO (Primary & Secondary) JP Morgan, UBS, VTB Capital, Alfa CM, BofA,
Renaissance Capital
FirstRand South Africa 29/04/2021 R2bn R51 Accelerated Bookbuild (Secondary) JP Morgan, Morgan Stanley, Rand Merchant Bank
Grupo Ecoener Spain 28/04/2021 €1m €5.90 IPO (Primary) Societe Generale, Banco Sabadell, Credit Agricole,
Kepler Cheuvreux, CaixaBank, HSBC
Creades Sweden 27/04/2021 SKr1bn SKr90 Accelerated Bookbuild (Primary) SEB
Hemnet Sweden 26/04/2021 SKr2.06bn SKr115 IPO (Secondary) Carnegie, Citigroup, MS, Barclays, Nordea
SSAB Sweden 26/04/2021 SKr2.8bn SKr43.25 Accelerated Bookbuild (Secondary) BNP Paribas, Nordea
Wallenstam Sweden 28/04/2021 SKr889m SKr127 IPO (Treasury) SEB
Barry Callebaut Switzerland 27/04/2021 SFr1.095bn SFr19.90 Accelerated Bookbuild (Secondary) Credit Suisse, Goldman Sachs
Comet Holding Switzerland 29/04/2021 SFr87.3m SFr238 Accelerated Bookbuild (Secondary) UBS
PolyPeptide Switzerland 28/04/2021 SFr736m SFr64 IPO (Primary & Secondary) BofA, Credit Suisse, Morgan Stanley, Berenberg,
Danske Bank, ZKB
Compass Pathways UK 29/04/2021 US$144m US$36 Follow-on (Primary) Cowen, Evercore, Berenberg
Darktrace UK 29/04/2021 £165.1m 250p IPO (Primary & Secondary) Berenberg, Jefferies, KKR, Needham & Company,
Piper Sandler & Co
Vaccitech UK 29/04/2021 US$110.5m US$17 IPO (Primary) Morgan Stanely, Jefferies, Barclays, William Blair
Impact Healthcare REIT UK 29/04/2021 £50m 111.5p Follow-on (Primary) RBC, Winterflood
JTC UK 29/04/2021 £65.9m 620p Accelerated Bookbuild (Primary) Numis, Berenberg
Keywords Studios UK 27/04/2021 £84m £28 Accelerated Bookbuild (Secondary) Numis
SolGold UK 27/04/2021 £53.1m 25.5p Accelerated Bookbuild (Primary) Cantor Fitzgerald, H&P Advisory, Peel Hunt
Aldeyra Therapeutics US 28/04/2021 US$125m US$12.50 Follow-on (Primary) Jefferies, SVB Leerink
Ascend Wellness US 28/04/2021 US$80m US$8 IPO (Primary) Canaccord Genuity
Aveanna Healthcare US 28/04/2021 US$458.8m US$12 IPO (Primary) Barclays, JP Morgan, BMO CM, Credit Suisse
Big Sky Growth Partners US 28/04/2021 US$3m US$10 SPAC IPO (Primary) Goldman Sachs
Columbus McKinnon US 29/04/2021 US$180m US$48 Follow-on (Primary) JP Morgan, Wells Fargo, PNC Bank
Endeavor Group Holdings US 28/04/2021 US$511.2m US$24 IPO (Primary) Morgan Stanley, Goldman Sachs, JP Morgan,
Deutsche Bank
Fiserv US 29/04/2021 US$2,366m US$118.30 Block (Secondary) Goldman Sachs, JP Morgan
FTC Solar US 27/04/2021 US$257.9m US$13 IPO (Primary & Secondary) Barclays, BofA, Credit Suisse, UBS
Hydrofarm Holdings US 28/04/2021 US$283.6m US$59 Follow-on (Primary) JP Morgan, Stifel
ION Acquisition Corp 3 US 29/04/2021 US$220m US$10 SPAC IPO (Primary) Morgan Stanley, Goldman Sachs
Mid Penn Bancorp US 29/04/2021 US$65m US$25 Follow-on (Primary) Piper Sandler, Stephens
OneMain US 29/04/2021 US$428m US$53.50 Follow-on (Secondary) Barclays, Citigroup, RBC CM
PQ Group US 28/04/2021 US$175m US$14. Follow-on (Secondary) Citigroup, Deutsche Bank, Credit Suisse, BMO CM,
Morgan Stanley, KeyBanc CM
Privia Health US 28/04/2021 US$448.5m US$23 IPO (Primary & Secondary) Goldman Sachs, JP Morgan, Credit Suisse,
Piper Sandler, William Blair
Werewolf Therapeutics US 29/04/2021 US$112m US$16 IPO (Primary) Jefferies, SVB Leerink, Evercore

104 International Financing Review May 1 2021


Jessica Alba brings glamour to Honest’s
US$439m Nasdaq IPO
„ US Maker of nappies and household products lifts sales but profitability remains elusive
Nappy and personal care brand HONEST is
hoping the star power of Hollywood actress and
co-founder Jessica Alba and its heavily marketed
ESG credentials will overshadow some less
inspiring financials when it prices its US$439m
Nasdaq IPO in the coming week.
Morgan Stanley, JP Morgan and Jefferies are
leading the sale of 25.8m Honest shares at
US$14–$17 for pricing on Tuesday, May 4.
Easing the task, BlackRock has agreed
upfront to buy US$80m of shares or about 20%
of the deal. Morgan Stanley is understood not to
be using its hybrid auction process to price and
allocate the deal.
The wider-than-normal range (for most US
IPOs, a US$2 spread is sufficient guidance)
hints at greater than normal debate about the
company’s worth. At the top of the range, the
terms attribute Honest an enterprise value of
U$1.7bn or a multiple of 5.7 times last year’s
sales of US$300.5m.
This multiple is much lower than ESG-friendly
consumer brands such as Beyond Meat (18) and
Freshpet (20-plus) and about a turn higher than
Procter & Gamble, the owner of rival Pampers.
Sponsor L Catterton is selling 15.4m shares in
the offering to cut its stake to 17.4% from 37.1%,
a move that comes relatively quickly after it
ploughed US$100m into Honest via a secondary
transaction in June 2018.
Alba, the company’s co-founder, chair and
chief creative officer, is naturally fronting the
marketing effort, prompting few to doubt that
the deal will draw significant investor interest.
“It will be interesting. It seems the only
thing people care about is that Jessica is in the
roadshow, though it is just a shame it is virtual,”
one ECM banker away from the deal said.
Honest’s recent financials are naturally
distorted by Covid-19 and show a business
not particularly profitable after nine years in
operation.
Honest’s filing discloses only two years of
financials, missing a revenue fall in 2019, and
skips some executive comp disclosures since it
qualifies as an emerging growth company. In
January, the company brought on board a new
CFO, former See’s Candies CFO Kelly Kennedy.
Alba is not selling any shares in the IPO and
will hold 6%, though she already collected
US$4.4m from the June 2018 secondary
transaction.
Earlier this month, Honest paid a US$35m
dividend to pre-IPO investors of which L
Catterton collected one third, allowing it to claw
back some of its investment even though the
business is making net losses and delivered an
adjusted Ebitda margin of just 4% last year.
CLEAN
Generating 55% of its sales from digital
channels and with a sophisticated approach to
digital marketing, Honest makes nappies, baby
wipes, cosmetics and cleaning supplies.
EQUITIES AMERICAS
More than 60% of revenue last year came
from the nappy and wipes segment that
competes with Kimberly-Clark (Huggies) and
Procter & Gamble.
Founded in 2012, Honest made a 2020 net
loss of US$14.5m after growing revenue 28%,
the latter notably helped by surging sales of
sanitisation and disinfecting products introduced
during Covid-19.
The filing includes preliminary numbers for
the first quarter of 2021 showing revenue rose
as much as 10.5% to US$80m, a net loss of
US$4.5m–$5.5m and an adjusted Ebitda loss of
up to US$1m.
CEO Nick Vlahos told investors Honest
was addressing a US$130bn market of which
US$17bn or 13% is currently represented by clean
and natural products that are growing at six
times the rate of conventional products.
“We believe that given our growth strategy
and consumers’ growing focus on their health
and wellness, reducing waste and promoting
social impact, we are well-positioned to
deepen our existing product categories,
grow in new categories and expand global
distribution,” Vlahos said in the online
roadshow presentation.
The presentation flags plans to grow revenue
by 15% over the next three years, lift gross
margins to 45% (from 35.9% last year) and
generate 20%-plus Ebitda growth long term.
Anthony Hughes

4HEûBANKSûHIKEDûTHEûASKINGûPRICEûONû "RIGHTONû(EALTHûWHICHûHELPEDûSEEDû THEû53nûMARKETINGûRANGEûFORûANûOFFERû

7EDNESDAYûMORNINGûALONGSIDEûMESSAGINGû 0RIVIASûGROWTHûWITHûAû53MûINVESTMENTû OFûMûSHARES
THEYûWEREûOVERûûTIMESûSUBSCRIBEDûANDûTHATû INûûSOLDûMûSHARESûTOûREDUCEûITSû (ALFûOFûTHEûDEALûWASûALLOCATEDûTOûANCHORû
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ORIGINALû4HURSDAYûNIGHTûTIMEFRAME 0RIVIAûISûTHEûLATESTûINûAûLONGûLINEûOFûTECH &4#ûCLOSEDûITSû.ASDAQûDEBUTûONû
0RIVIAûSHARESûSOAREDûûTOû53ûONû ENABLEDûHEALTHCAREûPROVIDERSûFOCUSEDûONû 7EDNESDAYûATû53ûûABOVEûOFFERû
4HURSDAYSûDEBUT -EDICAREû!DVANTAGEûFOLLOWINGûTHEû)0/ûOFû ANDûTRADEDûATûMIDDAYûONû&RIDAYûATû53
h)TûWASûSIMILARûTOûSOMEûOFûTHEûOTHERûRECENTû /AKû3TREETû(EALTHûLATEûLASTûYEARûANDû/NEû &4#SûMAJORûSHAREHOLDERûISûFORMERû
HEALTHCAREû)0/SvûSAIDûONEûBANKERûINVOLVEDû -EDICALûANDû!GILONû(EALTHûEARLIERûINû 3UN%DISONû#%/û!HMADû#HATILAûWHILEû&4#Sû
INûTHEûOFFERINGûv4HISûISûAûCOMPANYûWITHûAû #%/ûISûFORMERû3UN%DISONûEXECUTIVEû!NTHONYû
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BILLINGûANDûINSURANCEûCLAIMSûPROCESSINGûTOû SYSTEMSûWITHûTIESûTOûTHEûFAILEDû3UN%DISONû ACQUISITIONS
ûPHYSICIANûGROUPSûINûûMETROPOLITANû FAILEDûTOûINSPIREûPUBLICûINVESTORSûRESULTINGûINû &4#ûISûTHEûLATESTûENTRANTûINûAûCOMPETITIVEû
AREASûACROSSûSIXûSTATESûSOLDûJUSTûMûSHARESû PRICINGûOFûITSû)0/ûSIGNIlCANTLYûBELOWûTARGETû lELDûOFûSOLAR ARRAYûMAKERSûFOLLOWINGûTHEû
ONûTHEûOFFERINGû)NûADDITIONûTOûPROCEEDSûFROMû ANDûINCREASEDûDILUTIONûONûANûUPSIZEûTOûMEETû DEBUTûINû/CTOBERûûOFû!RRAYû4ECHNOLOGIESû
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MûSHARESûTHEûCOMPANYûCOLLECTEDû !ûSYNDICATEûLEDûBYûBarclaysûBank of Americaû 3INGAPORESû&LEXûTHROUGHûITSû.EX4RACKERû
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International Financing Review May 1 2021 105

 Aveanna Healthcare IPO weighed
down by debt load
„ US In-home healthcare provider concedes on valuation
AVEANNA HEALTHCARE, a provider of in-home
support to high-risk patients, saw its growth
aspirations stunted last week by a reduced
US$459m Nasdaq IPO, coming well below the
valuation targeted and blunting debt repayment
that was to provide capacity to fund growth.
Barclays, JP Morgan, BMO Capital Markets
and Credit Suisse on Wednesday placed
38.2m Aveanna shares at US$12 each, the
bottom of a US$12–$13 range that was revised
from US$16–$18. The extent of that reduction
forced them to delay pricing from the Tuesday
timetable to recirculate the new terms to
investors.
GUIDANCEûFORûûWHENûREPORTINGûFOURTH
7EREWOLFûHASûSOûFARûIDENTIlEDûTHREEû
“Because of the leverage, changing the price
by US$1 or US$2 does not change the valuation
very much,” one ECM banker close to the deal
said. “Part of the issue was the company was
trying to get credit for potential M&A. But trying
to get credit for future M&A in a market like this
is probably not the right thing to do.”
Aveanna was formed through the merger of two
private equity-backed healthcare companies, one
owned by Bain Capital and the other by JH Whitney.
It will use the proceeds to repay US$407m of bank
debt, reducing net leverage to about US$700m, or
3.9-times adjusted Ebitda over the trailing 12 months
to April 3 based on preliminary first-quarter results.
ALDEYRA RAISES US$125m ON POSITIVE
The IPO valued Aveanna at an
enterprise value of US$3bn, or 16.4-times
the US$180m generated over the trailing
12 months.
Aveanna shares failed to impress in the
aftermarket, closing on their Thursday debut at
US$11.53 on volume of 12.1m shares.
Aveanna has grown through acquisitions,
recently spending US$115m to purchase Doctor’s
Choice in an expansion into hospice care. This
is in addition to the US$178.8m spent over the
previous eight months to build out its core hour-
pay private care service.
Stephen Lacey
QUARTERûEARNINGSûINû-ARCH 0REDATORûDRUGSûFORûDEVELOPMENTûBUTûISûSTILLû TRIAL RESULTS
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 EQUITIES AMERICAS

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International Financing Review May 1 2021 107

 Big Sky US$300m SPAC IPO warrants attention
„ US Accounting change leaves industry in the lurch
Regulatory uncertainty has clearly slowed new
SPAC funding, though some new vehicles are
nonetheless proceeding without clarity from
the SEC around the accounting and disclosure
issues it has raised.
Zulily co-founder Mark Vadon’s BIG SKY
GROWTH PARTNERS on Wednesday landed
US$300m from the sale of 30m units at
US$10.00. Each unit comprises one share and
one-quarter warrant exercisable per full warrant
at US$11.50.
Significantly, Big Sky is the first SPAC with
warrants to go public since the SEC issued
guidance on April 8 that warrants be treated as
a liability. Goldman Sachs was sole bookrunner.
Big Sky disappointed on debut, opening
Nasdaq trading on Thursday at US$9.92 and
closing first-day trading at US$9.96.
Big Sky, which is eyeing consumer targets, is
complying with the new accounting standard for
warrants, known as ASC 815-40.
The 13.23m warrants sold, comprising 7.5m
warrants sold to the public and 5.73m private
placement warrants, result in an initial balance-
sheet liability of US$15.88m.
That liability will be re-determined on a
quarterly basis based on the price of the shares.
“Some issuers are taking a proactive approach
toward the new accounting treatment,” said one
SPAC banker. “The lawyers were telling us the
SEC would come with permanent rules in two or
three weeks. Now they’re saying another two to
three weeks. I do think that being proactive will
accrue to their benefit.”
DILA Capital Acquisition, a US$50m SPAC,
Global Consumer Acquisition (US$200m),
OceanTech Acquisitions I (US$100m) and Trinity
Acquisition (US$250m) are among the SPACs
that have filed amendments recently to address
the warrant accounting issue.
As another workaround, some SPACs are
adding provisions to allow boards to amend
warrant treatment without shareholder approval.
“Investors don’t care about the accounting
treatment,” said the banker.
For SPAC issuers, the accounting change
matters on the margin, particularly when a
merger target is earnings positive, requiring
them to report adjusted earnings to back out
the cost.
Some see the accounting issue as a red
herring raised by the SEC to broader regulatory
initiatives such as the use of forward projections
in the marketing of mergers, specifically between
the time of agreement and the filing of merger
proxy.
ISRAELI FORWARD
ION ACQUISITION CORP 3, the latest SPAC out of
Israeli asset manager ION Asset Management’s
stable, on Thursday took in a downsized
US$220m on its all-stock SPAC IPO, despite
the inclusion of an oversized US$120m forward-
purchase agreement.
On Thursday morning Morgan Stanley and
Goldman Sachs launched at a US$250m funding
target and oversubscribed message. ION 3
tweaked the structure from the original one-
share, one-eighth unit structure to the all-stock
sale of 22m shares sold at US$10.00 apiece.
“The only way you launch in this market is
if you are oversubscribed, either from having
tested the waters or a shadow book of investors
that reversed into the deal,” said one banker
involved in the ION 3 IPO.
This is the ION Asset Management’s third
SPAC following the debut in October last year
of the US$258.75m ION Acquisition 1 and the
US$253m ION Acquisition 2 in February.
In January, ION I agreed to merge with adtech
firm Taboola.com in a US$2.45bn transaction.
ION I trades at US$10.25, down from a post-
merger high of US$17.20 when the tie-up was
announced in January.
ION 2, structured with one-eighth warrants,
has yet to announce a merger and trades at
US$10.20.
ION Asset Management had taken significant
steps to de-risk the ION 3 IPO. Third Point,
a SPAC powerhouse, indicated for 9.9% of
the deal. ION Asset Management and other
institutions also committed to invest US$120m
at the time of a merger through a forward
purchase agreement, an oversized commitment
that provides M&A funding assurance.
Stephen Lacey

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CAPITAL ADJUSTEDû%BITDAûMARGIN 4UESDAY

108 International Financing Review May 1 2021

 EQUITIES AMERICAS

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 DAYûLOCK UPûONûFURTHERûSALES BANCO MODALûANûONLINEûBANKûONû
7EDNESDAYûSECUREDû2BNû53M ûONûANû FULL STEAM AHEAD FOR ALPHAWAVE IP’S
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BRAZIL GAPINGûSHORTFALLûTOûTHEû2nû
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CAIXA SEGURIDADE OVERCOMES THEûSTOCKûFELLûûTOû2 INITIATEDûPRE MARKETINGûFORûITSûROUGHLYû
DIFFICULT MARKET Credit SuisseûBank of America and Itau were 53BNûCORNERSTONE BACKEDû,ONDONû)0/ûAû
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"RAZILIANûSTATE OWNEDûBANKû#AIXAû SURGINGûûONûITSû"ûDEBUTûONû4HURSDAYû "LACK2OCKûWILLûINVESTûABOUTû53Mû
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FORûTHEûBETTERûPARTûOFûAûDECADE XP and BB Investimentos WEREûJOINTû ASûREVEALEDûWHENûTHEûREGûDOCûWASûlLEDûFORûAû
,IKEûOTHERûPRIVATISATIONSûALLOCATIONSûWEREû BOOKRUNNERSûONûTHEû)0/ûWHICHûPRICEDûATû VALUATIONûOFûUPûTOû53BNû
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ENSURINGû#AIXAû3EGURIDADEûWILLûREMAINûINû MARKETED THEREûWILLûBEûAûûSECONDARYûGREENSHOEû
"RAZILIANûHANDS "OAû3AFRAûCLOSEDûlRST DAYûTRADINGûONû Barclays and JP MorganûAREûJOINTûGLOBALû
Morgan StanleyûCaixaûBank of Americaû 4HURSDAYûATû2ûANDûTRADEDûMIDDAYû COORDINATORSûANDûJOINTûBOOKRUNNERSûWITHû
Credit SuisseûItau and UBSûONû4UESDAYûPLACEDû &RIDAYûATû2 BMO Capital Markets.

EQUITY-LINKED DEALS WEEK ENDING: 30/4/2021

Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s)
DiaSorin Italy 28/04/2021 €500m – 7y 0 47.5 Citigroup, BNP Paribas, Mediobanca, UniCredit
WH Smith UK 28/04/2021 £327m – 5y 1.625 40 Barclays, BNP Paribas, HSBC, JP Morgan, Santander
Snap US 27/04/2021 US$1,000m US$150.0m 6y 0 47.5 Goldman Sachs, JP Morgan, Morgan Stanley
Spirit Airlines US 28/04/2021 US$440.0m US$60.0m 5y 1 40 Barclays, Morgan Stanley, Deutsche Bank, Citigroup

International Financing Review May 1 2021 109

 /NûPRICINGûTHEûBONDSûCAMEûATûûOFû #"ûALSOûPROVIDEDûAûREFERENCEû"ORROWûWASû
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110 International Financing Review May 1 2021

 INTERNATIONAL FINANCING REVIEW CONTACTS

EDITOR SENIOR REPORTERS: LONDON DEPUTY CREDIT EDITOR TOKYO

Matthew Davies Fixed-income: Jon Penner Helene Durand Wakako Sato
+44 (0)20 4530 3050 +44 (0)20 4530 3059 +44 (0)20 4530 3052 +813 6441 1876
DEPUTY EDITOR
NEW YORK NEWS EDITORS REPORTER: LONDON
Equities/Structured equity: Fixed-income: -ILUSKAû"ERROSPI *ULIANû"AKERû Prudence Ho
Owen Wild +1 646 794 7193 +44 (0)20 4530 3043 +44 (0)20 4530 3055
+44 (0)20 4530 2517 People & markets: Philip Scipio DESK EDITORS NEW YORK
AMERICAS BUREAU CHIEF +1 646 794 7392 6INCENTû"ABY Rhys Adams
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ASSOCIATE EDITORS +44 (0)20 4530 2638 +1 646 794 7235
HONG KONG
Features and analysis: Gareth Gore People & markets: 4HOMASû"LOTT David Holland Sasha Padbidri
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US editor: Stephen Lacey Fixed-income: Carol Chan CHIEF SUB-EDITOR PRINT/WEB PRODUCTION, LONDON
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People & markets: Steven Slater TOKYO LOANS EDITOR Gavin White
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Fixed-income: Takahiro Okamoto GLOBAL HEAD – ADVERTISING &
Green/ESG Financing Editor: +813 6441 1773 )&2û!SSOCIATEû%DITOR SPONSORSHIP SALES
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REPORTERS: LONDON Shahid Hamid
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People & markets: Equities: Robert Sherwood $AVIDû"ROOKEû ECM: Rebecca Cox
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%NGLANDû0RINTEDûINû%NGLANDûBYû7ALSTEADû2OCHEû,TDû)33.û û5NAUTHORISEDûPHOTOCOPYINGûISûILLEGAL

International Financing Review May 1 2021 111

 INTERNATIONAL FINANCING REVIEW INDEX

468 SPAC I 96 Delta Air Lines 11 Kawasaki Kisen Kaisha 76 Retailors 98

Abu Dhabi Ports 69 Deutsche Bank 15, 17, 21, 50 KB Kookmin Card 64 Rexel 28, 48
AC Energy 94 Deutsche Beteiligungs 97 Kedrion 46 Rio Alto Energias 109
Acron 80 Dev Bank of Kazakhstan 66 Kelag 24 Rompetrol Rafinare 80
Affle India 93 Dexia Credit Local 33 Keywords Studios 102 S&P Global 81
Air Lease 83 DiaSorin 110 Khazanah Nasional 63 Santander 19
AirTrunk 89 Dilip Buildcon 93 Kirana Megatara 76 Sarana Multi Infrastruktur 63
Aker BP 37, 80 Dixons Carphone 81 Kissner 87 SBA Communications 51
Aldeyra Therapeutics 106 DR Horton 82 Kommunalbanken 34 Scope Ratings 25
Alfa Laval 8 Duravant 9 Kommunalkredit Austria 41 SECO 98
Alibaba Group Holding 8 EcoOnline 98 Kora Saude Participacoes 109 Segezha 99
Allied Universal Securities 4 Edding Group 93 Kraft Heinz 11 ServiceMaster Brands 51
Alphabet 81 eDreams 80 La Trobe 53 Servpro 51
Alphawave IP Group 109 Elkem 98 LBBW 40 SF REIT 93
Ametek 83 En Route 37 Lazard 21 Shinhan Financial Group 64
Andorra 31 Endeavor 103 LK Technology 92 Shuifa International (BVI) 74
Apontis Pharma 97 Endeavour Energy Group 39 LMK Group 100 Sintex Consolidated 52
ArcelorMittal 79 Ensono 84 Lonza Specialty Ingredients 28, 46 Sitowise 95
Archegos Capital 16 Erdenes Tavan Tolgoi 10 Lonza 9, 88 SK IE Technology 94
Asia International School 75 Eskom 79 Lowe’s Companies 82 SkyCity Entertainment Group 39
Asian Infrastructure Invest 30 Eurobank 41 Magnet Forensics 109 Snap 110
Atai Life Sciences 102 Euronext 78, 95 Magnitogorsk 99 Societe du Grand Paris 32
Atrium European Real Estate 68 European Investment Bank 2 Iron & Steel Works Socotec 88
Australian Finance Group 53 European Stability Mechanism 31 Metalsa 70 SolGold 101
Authority Brands 51 Evercore 21 Mid Penn Bancorp 107 Sound Point CLO C-MOA 50
Autostrade per l’Italia 79 Femsa 70 Mission Veterinary Partners 87 Spirit Airlines 6
Aveanna Healthcare 106 Financial Conduct Authority 12 Mitsubishi UFJ Financial Group 16 Sri Rejeki Isman 75
Baidu 9 Finnair 78 Mizuho Financial Group 16 SSAB 100
Banca Progetto 49 Firstmac 52 Moelis 21 Standard Chartered 23
Banco Modal 109 FirstRand 99 Morgan Stanley 16 Standard Profil 46
Bank of America 21 Fiserv 106 Nationwide Building Society 27 Suntec REIT Trust 77
Barclays 15 Five Star Bancorp 107 Natixis Pfandbriefbank 44 Surgery Center 87
Barry Callebaut 101 Fleet Mortgages 47 NATS 37 SUSE 96
Beacon Roofing Supply 87 FMS Wertmanagement 29 Natura Cosmeticos 70, 71 Synlab 6
Beijing Enterprises Holdings 62 Ford 11 Nayax 98 Tata Electronics 76
Believe Housing 38 Formosa Plastics Group 77 NBN 35 Taylor Maritime Investments 101
Big Sky Growth Partners 108 Formosa Resources Australia 77 Neighborly 51 Technip Energies 96
BIM Land 65 Fortegra 107 NetEase 9 Tesla (Shanghai) 74
BINGO Industries 89 Fortune Oil PRC Holdings 75 Netflix 11 Thai AirAsia 95
Birkenstock 45 Froy 98 New Hope Service 93 Therapy Brands 84
Blackstone Property Partners 37 FTC Solar 105 Newcastle Coal Infrastructure 36 Tipico 87
Blackstone 24 G4S 4 Ngern Tid Lor 95 TKC Holdings 87
BNP Paribas 15 Gecina 12 NIBC Bank 50 T-Mobile 11
Boa Safra Sementes 109 GfK 9 Nilar International 100 Toyota Motor Credit Corp 36
Botswana 77 GlobalWafers 110 Nomura 16 Transurban Queensland 39
Bpifrance 32 Goldman Sachs 2, 16, 22, Nomura Holdings 23 Tsingtao Brewery 92
Broadridge Financial Solutions 82 42, 47 Novatek Microelectronics 110 Tullow Oil 68, 81
ByteDance 91 Goodyear Tire & Rubber 11 Nuvoco Vistas 93 UBM Development 13
Cabinetworks 84 Greencross 89 OboTech Acquisition 96 UBS 15, 16, 25
Cable One 87 Greenhill 21 OneMain 109 UK DMO 33
Caixa Seguridade 109 Greystone Select Financial 84 Onion Global 92 Ukraine 67
Participacoes Grupo Argos 83 Orange 36 Unit4 9, 88
Calypso Technology 86 Grupo Ecoener 7 Orient Overseas (International) 93 United Microelectronics 110
Center Parcs 46 Hello 93 PA Housing 38 United Pacific 86
Chemist Warehouse 92 Hemnet 99 PACCOR Packaging 88 USIC 84
Chicago Mercantile Exchange 83 hGears 97 Paccor 9 UzAuto 67
China Huarong AM 62 Hitachi Metals 89 Pan American Energy 70 Vaccitech 102
China Three Gorges 7 Hon Hai Precision Industry 110 Pandora 8, 78 VakifBank 81
Chow Tai Fook Enterprises 75 Honest 105 Paycor HCM 107 Valneva 96
Cimpress 89 Hospital Care Caledonia 109 Peel Hunt 19 Vestas Wind Systems 8, 78
Citigroup 16, 39 HSBC 15, 23 Pegasus Airlines 4 Vistra Energy 11
City of Bremen 33 Huanxi Media Group 93 Pegasus Europe 98 Viva Energy Group 74
Clientis 42 Hydrofarm 106 Pepco 80, 99 Vocus Group 89
Club Car 84 Hygeia Healthcare Holdings 74 Pepper Group 53 Vontier 82
CMI Energia 83 Iberdrola 8 Pepper Money 92 Vossloh 13
CNH Industrial Capital Aus 53 Idera 85 Persimmon 81 VSMPO-AVISMA 80
Coca-Cola 34 Incheon International Airport 63 Piraeus Financial Holdings 97 Walgreens Boots Alliance 81
Columbus McKinnon 108 Indomobil Finance Indonesia 77 PJT Partners 21 Wallenstam 100
Comet Holding 101 Infracommerce CXAAS 109 PolicyBazaar 91 Wells Fargo 22
Compass Pathways 102 Infratil 77 PolyPeptide Group 6 Werewolf Therapeutics 106
Consilio 84 Infront 9 PowerGrid Infrastructure 94 WH Smith 81, 110
Consolidated Edison 82 Insulet 86 Investment Trust Whirlpool 35
Consolis 46 Interpipe 66 PQ Performance Chemicals 84
World Bank 34
Creades 100 Invesco 83 Press Ganey 87
WuXi Biologics (Cayman) 92
Credit Agricole CIB 48 Iochpe-Maxion 70 Privia Health 103
Xiaohongshu 92
Credit Agricole 21 ION Acquisition Corp 3 108 Progetto Quinto 49
Zeta Global 108
Credit Mutuel Home Loan SFH 44 Isofol Medical 100 Proofpoint 85
ZF Friedrichshafen 36
Credit Suisse 15, 16, 21 Italy 29 Province of Buenos Aires 69
ZipRecruiter 108
Cubic 85 JD Logistics 93 Province of Quebec 31
Zomato 91, 94
Daire Residential 47 Jefferies 22 PSP Capital 30
Dana 44 JP Morgan 16, 22 Puma Energy 80
Darktrace 101 JTC 102 R&F Property Services Group 93
DEI Sales 85 Kaisa Group Holdings 61 Ramsay Health Care 74
Del Monte Philippines 94 Kakao Pay 95 Renovaveis 109
Delhivery 91 Katek 97 Restore 102

112 International Financing Review May 1 2021

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ESG CAPITAL MARKETS
ROUNDTABLE
The IFR ESG Capital Markets Roundtable webcast takes place
on Tuesday May 18, 2021. DATE
MAY 18 2021
Moderated by Keith Mullin of KM Capital Markets, this virtual
roundtable will convene an expert panel to discuss the vital role TIME
played by public finance issuers in the growth of ESG issuing
and investing. 2:00PM BST

Titled Drivers and Future Directions of Public-Finance ESG FORMAT

Issuance this essential Roundtable will review activity year-to- WEBCAST
date from the perspective of SSA issuers.
FREE TO ATTEND!
Discussion topics will include:
• How are public-finance issuers dealing with the various
strands of the evolving ESG narrative as they think about debt issuance and use of
proceeds?
• An update on project selection, tracking and reporting.
• How does the notion of just transition play into project selection, around economic
development, jobs and social impact?
• In the private sector, a lack of standardised data and uneven reporting make it more
difficult for investors to engage with full transparency. How does this issue play out in
the realm of public finance?
• As the world moves beyond Covid-19, how will the complexion of the ESG debt market
change for public-finance issuers?
• How is the role of investors evolving?
• As the EU Taxonomy becomes more embedded, how is its impact developing?

The webcast is free to join. You can register and find out more information at
https://tinyurl.com/k7swfbe6.

Sponsored by: