2019-06-29 IFR Asia - Unknown

IFRASIA
INTERNATIONAL FINANCING REVIEW ASIA
JUNE 29 2019 ISSUE 1096 www.ifrasia.com
Shanghai tech board’s first listing prices

surprisingly low despite strong demand
Mind the gap: Class divide emerges in

dollar bond market for China developers
Kookmin touts socially responsible

credentials with Sustainability AT1
EQUITIES BONDS BONDS PEOPLE & MARKETS

Equity financing CCB pays out on TCorp mulls rare Hong Kong bourse’s
picks up in India standby letter of offshore bond as handling of IPOs in
in fundraising rush credit in first for Australian states focus after former
ahead of July budget Asian bond ramp up spending official is arrested
06 07 08 12
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OPINION INTERNATIONAL FINANCING REVIEW ASIA
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International Financing Review Asia June 29 2019 1

INTERNATIONAL FINANCING REVIEW ASIA CONTACTS
EDITOR EDITOR, IFR COMPANY INDEX KPR Agrochem 7, 34

Krungthai Bank 44
Steve Garton -ATTHEWû$AVIES KWG Group Holdings 22
ûû û ûû 360 Finance 29 Lao People’s Democratic Republic 36
steve.garton@refinitiv.com Adani Ports and Special Economic Zone 33 LaSalle Logiport REIT 36
DESK EDITOR AII Holding 43 Launch Tech 30
HEAD OF ASIAN CREDIT 6INCENTû"ABY
Alltek Technology 43 Legend Financial Leasing (Shanghai) 27
Arvida Group 38 Lendlease Group 42
$ANIELû3TANTON Auckland Council 38 LF Logistics 33
ûû SUB-EDITOR Bank for Foreign Trade of Vietnam 44 Liuzhou Dongtong Investment and
$AVIDû(OLLAND Bank Negara Indonesia 35 Development Group 22
ASIA EQUITIES EDITOR Bank of Queensland 20 Louis Dreyfus Co Asia 41
Fiona Lau HEAD OF PRODUCTION Bank of Suzhou 29 Luye Pharma Group 31
Bank of the Philippine Islands 39 Macrolink Holding 22
ûû Victor Ng BDO Unibank 40 Mahindra Rural Housing Finance 34
Bear Electric Appliance 31 ManpowerGroup Greater China 30
DEPUTY EQUITIES EDITOR, ASIA PRODUCTION ASSISTANT Budweiser Brewing Company APAC 28 Meinhardt Group International 40
S. Anuradha Mike Tsui Bushiroad 36 Metro 2019-1 20
ûû Canara Bank 33 Metro Finance 20
HEAD OF GLOBAL ADVERTISING AND Castlelake 38 MGM China Holdings 37
SENIOR CREDIT CORRESPONDENT, ASIA SPONSORSHIP
CC Land Holdings 32 Miniso 28
Centuria Industrial REIT 21 Ministry of Finance of the
+ITû9INû"OEY 3HAHIDû(AMIDû CFPC (Singapore) 26 People’s Republic of China 25
ûû ûû Chailease Berjaya Credit 38 Mitsubishi 35
China Construction Bank 7 Montage Technology 31
ASIA PACIFIC BUREAU CHIEF, LOANS China Forestry Group Corp 26 Napier Port Holdings 39
IFR ASIA AWARDS MANAGER
0RAKASHû#HAKRAVARTI China Galaxy Securities 11 National Bank for Agriculture and Rural
0AULû(OLLIDAY China General Nuclear Power 24 Development 34
ûû China Huadian Corporation 26 National Highways Authority of India 34
û ûû
China Jinmao Holdings Group 5 National Storage REIT 21
SENIOR REPORTERS: HONG KONG China Merchants Securities 11 NatWest Markets 10
GLOBAL ADVERTISING
4HOMASû"LOTT China Minsheng Investment Group 7 New South Wales Treasury Corp 8
PRODUCTION MANAGER China National Gold Group 26 New Town Construction Investment
ûû
'LORIAû"ALBASTROû China Railway Signal and Communication 29 (Jizhou, Tianjin) 7, 23
#AROLû#HAN China Resources Microelectronics 29 Parque Eolico Loma Blanca I 27
û ûû China Securities 11, 29 Parque Eolico Loma Blanca II 27
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China VAST Industrial Urban Development 25 Parque Eolico Loma Blanca III 27
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China, Hong Kong, Taiwan, Korea, Japan Chongqing Casin Group 24 Parques Eolicos Miramar 27
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!LANû7ONG
ûûû Construction Investment (Group) 26 Piramal Capital & Housing Finance 34
ûû Chongqing Sifang New Material 31 Platinum Equity 41
SENIOR ANALYST: TOKYO CICC 11 Prasac Microfinance Institution 22
India, Singapore, Malaysia, Thailand, CIMB Thai Bank 37 QIC Finance (Property Fund) 21
Takahiro Okamoto
Indonesia and Australia CIMC Vehicles 29 QIC Shopping Centre Fund 20
ûû Citic 29 QingDao Double Whale Pharmaceutical 31
3AMANTHAû(ARRIS Citic Press 29 Qingdao Jiaozhou Bay Development Group 23
ASIAN CREDIT CORRESPONDENT ûû Citic Securities 11, 29 Qudian 31
+RISHNAû-ERCHANT CMB Financial Leasing 8 Queensland Treasury Corp 8
SUBSCRIPTION ACCOUNT MANAGER CPOF Finance 21 Ratchthani Leasing 44
ûû
Credit Agricole 10 Redsun Properties Group 4, 23
0IAû"ATUAN Cromwell Property Group 21 Retail Zoo 21
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ûû DAE Funding (DIFC) 41 SBI Life Insurance 6
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lRSTNAMELASTNAME RElNITIVCOM Ebang International 30 Shanghai Juneyao Airline Hong Kong 33
ûûû
Edelweiss Financial Services 34 Shenwan Hongyuan Securities 11
European Investment Bank 20 Shenzhen Xinhao Photoelectricity Technology 31
Evolution Wellness Holdings 41 Shinhan Financial Group 42
Fincare Small Finance Bank 35 SMC Global Power Holdings 39
First Abu Dhabi Bank 43 Sports Toto Malaysia 37
Flat Glass Group 32 Standard Chartered 20, 40
Fosun International 25 State Bank of India 34
Gansu Provincial Highway Aviation Sumitomo 35
Tourism Investment Group 25 Sunshine 100 China Holdings 23
GDS Holdings 28 Sushiro Global 37
HONG KONG (HEAD OFFICE) SINGAPORE GF Securities 11 Suzhou HYC Technology 4, 30
GMR Airports 34 Suzhou TZTEK Technology 30
&û#ITYPLAZAûû û3CIENCEû0ARKû$RIVEû Godrej Properties 6 Taizhou Xintai Group 23
û4AIKOOû7ANû2OADû 3INGAPOREûû3INGAPORE GoHo Asset Management 25 Tasly Biopharmaceuticals 28
Taikoo Shing, ûû Greenland Holding Group 5 Tata Capital Finance 34
Growthpoint Properties Australia 21 Teledirect 42
(ONGû+ONG Guotai Junan Securities 11 Topsports International 28
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2 International Financing Review Asia June 29 2019

Contents
INTERNATIONAL FINANCING REVIEW ASIA
JUNE 29 2019 ISSUE 1096
COVER STORIES COUNTRY REPORT

EQUITIES
04 Tech board IPO sets modest price 20 AUSTRALIA 37 MALAYSIA
StanChart became the second CIMB Thai Bank last
Suzhou HYC, the first Shanghai tech board IPO, offered UK holding company to issue Wednesday priced M$550m of
its shares at a 19% discount to its nearest listed peer Kangaroos in six days with a 10-year non-call five bonds at
under the board’s market-based pricing system. A$1bn two-part sale of six-year par to yield 4.15%, well inside
non-call five Kangaroo bonds. initial guidance.
BONDS
22 CAMBODIA 38 NEW ZEALAND
04 Gap widens for China property Prasac Microfinance Institution Auckland Council has
A class divide is emerging in the US dollar bond market has launched a US$130m mandated ANZ and BNZ for a
for Chinese property firms as international investors three-year term loan into senior retail offering of six-year New
syndication, with pricing similar Zealand dollar Green bonds
gravitate towards bigger and better-known names.
to a loan completed a year ago. following investor meetings.
BONDS 22 CHINA 39 PHILIPPINES

06 Kookmin marries AT1 and ESG Jiayuan International said it will SMC Global Power Holdings
South Korea’s Kookmin Bank has become the first bank exchange up to US$150m of its reopened its US$500m 6.5%
US$400m 12.0% senior bonds senior perpetual securities
to raise Additional Tier 1 capital through a Sustainability due October 22 2020 for new callable in April 2024 for a
bond, adding to its socially responsible credentials. notes under an exchange offer. further US$300m.
32 HONG KONG 40 SINGAPORE

NEWS Eastern & Southern African Sembcorp Industries has sold
TDB has increased its three- S$1.5bn of unrated five-year
06 Signs of life in India ECM year loan to US$400m from bonds to investors including
Equity financing picked up in India last week with three a US$250m target after Temasek Holdings, to ease
attracting six lenders. finances at a subsidiary.
share sales totalling Rs43bn as issuers took advantage
of a small window ahead of the federal budget. 33 INDIA 42 SOUTH KOREA
Adani Ports and SEZ priced Korea Western Power has
07 Bond guarantee passes first test A bank has been forced to pay out on a
a US$750m 4.375% 10-year mandated Citigroup, Credit
standby letter of credit used to support an international bond.
senior unsecured at 99.703 Agricole and HSBC to arrange
08 TCorp mulls rare offshore outing Booming infrastructure spending is to yield 4.412%, equivalent to investor meetings in Asia and
putting upward pressure on Australia’s state funding requirements. Treasuries plus 237.5bp. Europe from July 1.
08 CMB Leasing weathers bad news CMB returned to the US dollar bond
market with a US$1bn deal amid reports of a US contempt of court ruling. 35 INDONESIA 43 TAIWAN
09 Sri Lanka relies on loyal support Sri Lanka sold US$2bn of senior Discussions on a new-money First Abu Dhabi Bank priced a
unsecured bonds in two tranches last Monday. financing for Bank Negara US$900m five-year floating-
Indonesia have gained steam rate Formosa at par with a
with the mandate likely to be coupon of three-month Libor
PEOPLE & MARKETS awarded soon. plus 90bp.
12 Corruption probe rocks HK exchange 35 JAPAN 44 THAILAND

The HKEX’s reputation as one of the world’s leading Mitsubishi priced a US$500m Thai construction company
five-year offering at 99.469 CH Karnchang has increased a
capital raising venues took a knock after the city’s anti- with a coupon of 2.5% to triple-tranche bond offering to
graft watchdog arrested a former exchange official. yield 2.614%, equivalent to Bt10bn (US$326m) on robust
Treasuries plus 84bp. demand.
13 RBI to turn dovish after resignation The resignation of the deputy
governor of India’s central bank has boosted the prospects for more rate cuts.
37 MACAU 44 VIETNAM
14 BlackRock sees gold in Indian bad debt Firm aims to expand its special
MGM China Holdings has State-owned Bank for
situations credit team in India as it spies “unprecedented” opportunity. launched a US$1.25bn- Foreign Trade of Vietnam
12 Who’s moving where Goldman Sachs has poached Sam Thong to equivalent loan to partially (Vietcombank) has signed a
become chairman of its healthcare group in Asia ex-Japan. refinance a borrowing US$200m commitment line for
18 In brief Malaysia’s criminal case against Goldman Sachs will be completed a year ago. renewable energy projects.
postponed to September, a court ruled last Monday.

NewsSustainable Kookmin 06 Indian ECM stirs 06 CCB pays out on SLC 07
Tech board IPO sets modest price

Equities Issuer goes low on pricing despite strong demand
BY KAREN TIAN, FIONA LAU can offer issuers a better deal, expectation of overwhelming because we all assumed this
but it was still surprisingly low. demand for the first tech board IPO could be priced higher,”
SUZHOU HYC TECHNOLOGY, the first Market participants had offering. said one ECM banker. “We
company to price a Shanghai expected HYC to go high in the “The price surprised us talked to investors before the
tech board IPO under the
board’s market-based pricing
system, offered its shares at
a 19% discount to its nearest
listed peer.
The touchscreen testing
company, whose customers
include Apple and Samsung,
priced the Rmb981m (US$142m)
deal at Rmb24.26 a share after
pricing consultations on June 21
and 24.
The first tech board listing
is a departure from IPO pricing
in China, where valuations are
pre-approved by the securities
regulator and held artificially
low at an unofficial cap of 23
times earnings.
HYC’s valuation, equal to
39.99 times trailing earnings,
confirms that the market-based
reforms on the new tech board
Gap widens for China property offshore quota approvals, or

the government imposes more
austerity measures to rein in
Bonds First-half rally has benefited some issuers more than others home prices.
“It’s just a question of how
BY CAROL CHAN two bonds to yield 11.875%, that was shown to the market much they are willing to pay.
but HOPSON DEVELOPMENT HOLDINGS, only at final price guidance, But of course, the magnitude
A class divide is emerging in rated B2/B/B+, paid just 7.5% for and 68% of its US$850m final of yield compression like
the US dollar bond market for US$500m three-year non-call order book came from the joint what had happened in the
Chinese property companies as non-put two bonds on June 20. lead managers. first quarter is unlikely to be
international investors gravitate “Polarisation in the sector in All the same, the deal repeated,” the Chinese banker
towards bigger and better- terms of funding cost is likely showed that investors are said.
known names. to persist for some time, with differentiating between
The gap between Single B weak Single B names paying Chinese property companies BULLISH MOMENTUM
and Triple B rated developers double-digit yields while big beyond looking at their ratings. Peter Ru, chief investment
has widened by more than players pay a much lower yield The rally in offshore property officer of China fixed income
180bp this year, according to in the mid-to-low single-digit bonds since late 2018 has at Neuberger Berman, said at a
Fitch Ratings, based on average range,” said a banker from benefited some issuers more conference last week his fund
coupons for new issues in the a Chinese brokerage which than others, leaving the weaker was still looking to increase its
first five months of 2019 versus focuses on high-yield deals. ones at risk of losing market positions in US dollar Chinese
the same period in 2018. Hopson is a better-known access if sentiment turns. property bonds but will focus
Even within the Single B credit as one of the first Bankers do not expect a more on bigger players.
segment, funding costs can vary Chinese developers to sell repeat of the tight conditions He said the default risks
greatly. For example, REDSUN offshore bonds, although it has of 2018 unless there are policy as relatively low compared
PROPERTIES GROUP, rated B/B not issued overseas for years. changes: for instance, if the to other sectors as the major
(S&P/Fitch), on June 25 priced It took no chances this time National Development and developers have land banks
US$250m 3.25-year non-call around with a club-style deal Reform Commission tightens which give them more financial

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TCorp looks offshore 08 Resilient Sri Lanka 09 China cash crunch 11
price consultation. We thought sponsor of the deal. and the issuer. Some issuers Stock Exchange.
this company is worth a higher However, HYC’s valuation are not willing to accept a low Retail investors who want to
valuation as its peers perform is higher than the industry price,” said a third ECM banker. trade on the board must have at
well in the secondary market average multiple of 31.11 in the least Rmb500,000 (US$72,721)
and their valuation is not low.” past month. RETAIL SUPPORT in their trading accounts and
The institutional tranche The ECM banker believes the The retail portion also drew two years’ experience of stock
attracted bids from 1,746 relatively conservative price overwhelming demand, with trading.
accounts under 213 may be a deliberate strategy. the online tranche 2,514 times Li Jizun, director of the
institutional investors, ranged marketing department of the
from Rmb10.65 to Rmb31.76 CSRC, said in an interview with
per share. There was indicative China National TV that as of
demand for 10bn shares, “The price surprised us because we all assumed June 20, more than 2.7 million
around 335 times the shares this IPO could be priced higher. We thought this retail investors had opened
on offer. accounts for the tech board.
company is worth a higher valuation as its peers
Excluding the top decile of Given the strong demand,
bids by price, the weighted
perform well in the secondary market and their and excluding the 4.1%
average was Rmb25.26. Even valuation is not low.” allocation for sponsor Huatai
though there was support at United Securities, the retail
that level, the issuer set the tranche was enlarged to
offer price Rmb1.00 lower at 30% of the remaining shares
Rmb24.26, which translates to “The first tech board pricing subscribed after bookbulding from the original 20%. After
a 2018 P/E of 39.99, 19% below has also sent a signal to the on June 27. the clawback, institutional
Shenzhen-listed comparable market. Your bids will be The strong outcome was investors were allocated 70%.
Wuhan Jingce Electronic’s 2018 eliminated if you quote too despite the fact that each retail HYC sold 40.1m A-shares for
P/E of 49.22. high,” said the banker. investor was only allowed to a 10% free float.
The price also stands around Bankers believe the modest subscribe up to 7,500 shares. Proceeds from the IPO will be
the mid-point of the Rmb21.17– pricing for the first deal could In addition, only 3 million used to build two production
Rmb26.82 range sponsor be used as a reference for other retail investors, or 2% of the bases for flat panel display and
Huatai Securities suggested tech board IPOs, but do not investor pool in China’s A-share semiconductor testers, and
in a pre-deal research report. expect every deal to follow suit. market, meet the requirements replenish working capital.
Huatai Securities is the parent “After all, the issue price to trade on tech board, The listing date for the
of Huatai United Securities, the depends on market conditions according to the Shanghai shares is not yet known.
flexibility in case of a liquidity “But it won’t be as crazy full-year total, according to US$850m, respectively, from
crunch. as that what we have seen in Moody’s. dollar bonds year-to-date.
Moody’s expects borrowing first quarter, given that many Moreover, borrowing costs While Single B names are
costs for small and weaker developers have already pre- for developers fell significantly still paying double-digit yields,
Single B rated developers will funded their refinancing needs from the fourth quarter 2018 a Triple B name like CHINA JINMAO
remain high because of their peak amid improved funding HOLDINGS GROUP priced five-year
weak credit quality and high conditions and risk appetite. bonds to yield 3.655%, while
refinancing needs. “Polarisation in the KAISA GROUP, rated B1/B/B, on Double B rated GREENLAND
According to Moody’s, there sector in terms of June 24 completed its fourth HOLDING GROUP was able to sell
are about US$33.7bn onshore funding cost is likely to US dollar bond issue this year. three-year bonds at 6.8% in mid-
bonds and US$19.2bn of It priced a US$500m tap of two June.
persist for some time,
offshore bonds maturing or of its existing bonds, paying Chen Yi, head of global
subject to put options from its
with weak Single B a 10% yield to reopen bonds capital markets at Haitong
rated developers over the next names paying double- due April 9 2022 and 11.375% International, said at the same
12 months. digit yields.” yield for bonds due January conference last week that
The rating agency also 30 2023. This compared to the funding costs for developers
expects large-scale developers 12% yield it needed to pay for will depend on global interest
to grow their market share in the first-half. For the second- US$300m 365-day bonds priced rates and liquidity, Chinese
in the second half of 2019, half, developers may be more in December. policies, and issuers’ own credit
underpinned by stronger opportunistic,” he said. Redsun also paid less for metrics.
execution and improved access a longer tenor. Last week’s “The market is expecting
to funding. HUGE SUPPLY US$250m 3.25-year non-call two that the US may have an
A banker at a European As of June 25 2019, offshore at 11.875% compared with a interest rate cut in the next
bank said he still has plenty bond issuance this year has US$200m tap of the US$180m two or three months, and
of Chinese developers in the reached US$41.4bn from the December 2020s at 13.5% in developers are likely to benefit
pipeline. He expects supply Chinese property sector, which December. The two companies from the lower interest rate
from the sector will continue. is already around 85% of 2018’s have raised US$1.65bn and trend,” said Chen.

News
Kookmin marries AT1 and ESG
Bonds Korean bank caters to growing sustainability demand with bank capital deal
BY DANIEL STANTON AT1s, callable in August 2023, Proceeds will be used to generation and SME financing.
were quoted at 4.403%, while fund eligible green and social Sustainalytics has provided a
South Korea’s KOOKMIN BANK Woori Bank’s AT1s callable in projects under Kookmin’s second-party verification.
has become the first bank to May 2022 were seen at 4.687%. sustainable financing “I don’t think the sustainable
raise Additional Tier 1 capital In theory, AT1s issued at the framework. Eligible categories angle gave any obvious pricing
through a Sustainability bond, bank level should price tighter include things like renewable benefit, because we knew an
adding to its socially responsible than those issued from a energy, clean transportation, AT1 from Kookmin was going to
credentials. holding company. affordable housing, employment fly out of the door anyway,” said
The Aa3/A+ (Moody’s/S&P)
rated bank on Tuesday priced a
US$500m perpetual non-call five
Sustainability AT1 at par to yield
4.35%. This was the tight end of
final guidance of 4.35%–4.40%,
and inside initial guidance of
4.7% area. The 144A/Reg S AT1s
have expected ratings of Baa3/
BBB– (Moody’s/S&P) and will
be written off if the bank is
declared insolvent.
This was Kookmin’s first
offshore AT1 offering, and also
the first Korean bank AT1 to
have investment-grade ratings
from both Moody’s and S&P.
Based on Kookmin’s call date
in July 2024, a banker on the
deal estimated that it had priced
inside its implied curve.
Shinhan Financial Group’s
Signs of life in India ECM deal equals 10% of the existing

capital, and the final price was
at a 5.5% discount to the pre-deal
Equities Rare burst of activity ahead of first post-election budget close of Rs982.20.
The shares ended the
BY S ANURADHA anchor investors were China- corporate tax rates to manage following day at Rs960.05 and
backed Hornbill Orchid and the fiscal deficit. are up 53% year to date.
Equity financing picked up Hong Kong hedge fund Sylebra Axis Capital, Bank of America
in India last week with three Capital. SAFE NAMES Merrill Lynch, CLSA and Kotak
successful share sales totalling Overall sentiment, however, With uncertainty ahead, were the bookrunners.
Rs43bn (US$622m) as issuers is far from upbeat given the investors prefer to take less risk. The success of the IndiaMart
took advantage of a small slowing economy and the “Investors want to be only IPO was attributed to the
window ahead of the federal continuing bad-assets problems with safe names. There are potential of the Indian online
budget on July 5. of some finance companies. simply no takers for any market. When books closed last
Investor appetite was strong, “There are very few catalysts mediocre issue,” a banker who Wednesday the institutional
with GODREJ PROPERTIES’ Rs21bn for the market and if by any worked on the Godrej Properties tranche was subscribed 31x, the
qualified institutional placement chance the budget disappoints, QIP said. high-net-worth-investor tranche
covered 2x, the institutional we should prepare ourselves for The novelty element was 63x and the retail portion 14x.
tranche of the Rs17bn offer for a rough ride,” an ECM banker strong for Godrej Properties, Founders Dinesh Agarwal
sale in SBI LIFE INSURANCE 3.81x and away from the deals said, one of India’s best-known and Brijesh Agrawal and early
INDIAMART INTERMESH’s Rs4.8bn IPO explaining why some issuers property developers, which has investors including Intel Capital
subscribed 36x. chose to sell ahead of the budget. not accessed the capital market offered around 4.9m secondary
Foreign interest was The government is set to since a rights offer in 2013. shares at a Rs970–Rs973 range.
particularly healthy. Overseas announce its first budget since It priced its all-primary QIP The IPO is likely to price at the
institutions accounted for elections ended in May, and last Wednesday, selling 22.63m top.
80% of the investors in Godrej investors are wary that ministers shares at the top of a Rs912– The shares start trading on
Properties, while IndiaMart’s will increase personal and Rs928 indicative range. The July 4.

the banker.
“I have noticed a lot more
questions from Asian investors
non-viable, whereas Kookmin’s
bonds would be simply written
down. Some bankers said that it
Bond guarantee
on sustainability and green
angles lately, which shows the
is difficult to argue that an AT1
security is still compliant with
passes first test
level of sophistication around ESG factors if it is converted into Bonds CCB pays out on standby letter of credit after CMIG
ESG is increasing.” the common equity of the whole default
Orders were over US$2.7bn business, but investors in the
from 128 investors. Asia took 61% Kookmin AT1 did not need to BY YANFEI WANG, DANIEL STANTON that underwrite the guarantees.
of the 144A/Reg S notes, the US worry about that. Chinese banks, in particular,
25% and EMEA 14%. By investor “Adherence to green and For the first time in Asia, have written SBLCs to cover
type, asset managers booked social bond principles and a bank has been forced to billions of dollars of offshore
76%, insurers 14%, banks 8%, and sustainability bond guidelines is pay out on a standby letter bonds in return for guarantee
private banks and others 2%. based on use of proceeds, project of credit used to support an fees that can run as high as
Kookmin also issued the selection, management of international bond, giving 3%. Indian and Indonesian
region’s first Sustainability Tier 2 proceeds, and reporting, which investors confidence that the borrowers have also used the
offshore bond earlier this year. are in theory independent of structure works in practice. credit-enhanced format to raise
Financial institutions across the capital structure of the bond Cash-strapped CHINA MINSHENG funds.
Asia Pacific have added social or itself,” said Mushtaq Kapasi, chief INVESTMENT GROUP last week said Chinese banks show no sign
sustainability reporting to several representative for Asia Pacific at one of its US dollar bonds had of reining in their support for
recent senior fundraisings, but the International Capital Market been repaid in full after CHINA offshore bonds, even though
socially responsible markers are Association. CONSTRUCTION BANK honoured a a default would far outweigh
still rare in the subordinated “In principle, AT1, project standby letter of credit. the fees they earn. Instead,
capital format. bonds, sukuks … all can be CCB on June 18 paid all the universe of guarantors is
Australia’s QBE Insurance consistent with the principles, outstanding principal and expanding.
Group in November 2017 sold though this would of course accrued interest on the Boom A week earlier, ZUNYI ROAD AND
US$400m of gender-equality have to be determined by Up Investments US$300m 3.25% BRIDGE CONSTRUCTION sold US$81m
AT1 notes. Proceeds were looking at the particular bonds due July 2020, according of three-year unrated bonds
invested solely in bonds from transaction and issuer.” to a stock exchange filing. at 4.6%, backed by Bank of
companies which had signed up Bank of America Merrill Lynch, CMIG had provided a keepwell Chongqing. On Friday, NEW TOWN
to the United Nations Women’s BNP Paribas, Citigroup, Credit deed to support the notes. CONSTRUCTION INVESTMENT (JIZHOU,
Empowerment Principles, Agricole, JP Morgan and Mizuho “The successful drawdown on was marketing three-
TIANJIN)
among other criteria. were joint bookrunners for the Boom Up’s SBLC-backed bonds year US dollar unrated bonds
QBE’s AT1s convert into Kookmin trade. KB Securities was shows that such structural supported by China Zheshang
equity if the insurer is declared co-manager. features are robust and protect Bank’s Tianjin branch.
bond investors in Asia,” wrote
Elaine Ng, a Moody’s vice WORKING ON WORKOUT
Edelweiss, ICICI Securities and only Rs300m of the expected president and senior credit Private investment giant
Jefferies are the bookrunners. proceeds were earmarked for officer. CMIG is now dealing with its
Some bankers remain debt repayment. The SBLC provides stronger remaining obligations.
cautious on the fate of other BNP Paribas Cardif sold a credit support compared The issuer said that the
IPOs. 2.5% stake in SBI Life through to other structures such as request for accelerated
Gaurav Sood, head of ECM an offer for sale of 25m shares keepwell deeds, which are not repayment on the SBLC-backed
at ICICI Securities, said while at Rs675.50, above a floor price a guarantee of payment. bonds on June 13 had triggered
foreign and local interest of Rs650. The clearing price is “A keepwell shows the parent a further cross-default on its
remains high for IPOs, only a 4.9% discount to the pre-deal company is willing to provide US$500m three-year 3.8% notes
those issues “with strong close of Rs710.60. support. It’s not legally obliged due to mature on August 2.
fundamentals, management and SBI Life shares ended last to do so,” said a fixed-income The 2019 dollar bonds were
reasonable valuations will get Wednesday at Rs717.45. analyst in Shanghai. quoted at a cash price of 57.25/
done”. Although the stock only moved “The payment was quite 58.75 on Tuesday following the
That sense of caution was above its 2017 IPO price of timely. As there was no news.
on display last Thursday, when Rs700 this month, investors precedent, the CMIG case helped CMIG is discussing asset
fertilizer and crop protection have turned positive as it trades set an example and would be disposals and potential stake
company KPR AGROCHEM withdrew cheaper than peer HDFC Life helpful to alleviate concerns of sales to strategic investors,
its Rs2.8bn IPO a day before it Insurance and results for the investors on repayment if they and has reached an agreement
was due to launch. quarter ending June 30 are have invested in other bonds with its onshore creditors to
KPR and its promoters were expected to be strong. backed by SBLCs,” she added. “jointly coordinate all lending
planning to offer 34.4m primary The share sale will allow SBI The Hong Kong branch of arrangements”, according to
and 12m secondary shares at Life to meet the minimum 25% China Construction Bank, the the filing.
Rs59–Rs61 a share. free float rule. Before the sale, SBLC bank, made the payment Kirkland & Ellis is advising on
Choice Broking, which has BNP Paribas owned a 12.78% only two days after a request the outstanding offshore bonds.
an “avoid” rating on the IPO, stake. from the trustee. CMIG has total outstanding
said interest costs accounted BNP Paribas and Citigroup were The incident also highlights debt of Rmb49.9bn (US$7.3bn),
for 42% of KPR’s Ebitda, but the selling brokers. the risks taken on by the banks according to Refinitiv data.

News
TCorp mulls rare offshore outing
Bonds Australian state looks to diversify as borrowing requirement grows
BY JOHN WEAVERS issued before 2012, including the fiscal year starting on July US for such rare, high-quality
£44.4m (US$56m) February 1, comprising A$3.6bn of term issuers that offer a decent yield,
Booming infrastructure spending 2039s, ¥15bn (US$139m) April maturities and A$9.7bn of new especially for ultra-long tenors
is putting upward pressure 2039s and SFr130m (US$133m) client loans. around 30 years.
on Australian state funding April 2041s, but nothing The 2019/2020 requirement is “I think the euro market may
requirements, prompting at approaching benchmark size. A$1.4bn higher than estimated be the best destination for Aussie
least one regional government to Instead, TCorp – like all at the time of last year’s state semis (states) initially, potentially
consider a rare offshore bond. other Australian states – has budget, and TCorp’s funding in Green format given Europe’s
NEW SOUTH WALES TREASURY focused on the local market, needs are projected to increase huge and well-established
CORP is preparing to meet which provides high levels of over the following three fiscal investor base for Green and
global investors after updating liquidity and a deep investor base years to A$13.8bn, A$15.0bn Sustainable assets,” he said.
its dormant US$10bn EMTN including bank balance sheets and A$16.9bn as regional The three largest Australian
programme on June 4. eager to purchase rare Level 1 infrastructure outlays mount. state governments – New South
“We are keen to diversify our high-quality liquid assets for Despite obvious home Wales, Victoria and Queensland
investor base and will be doing Basel III purposes. comforts, overseas diversification – have all issued domestic Green
roadshows in Asia, Europe and TCorp, rated Aaa/AAA represents an attractive incentive bonds in recent years, including
the US over the coming year to (Moody’s/S&P), tapped its for state treasurers seeking to TCorp’s record-busting A$1.8bn
update investors on our bond domestic 3.0% April 2029 bond fund rising budget deficits, as 10-year sale last November.
programme and investment for A$2bn (US$1.39bn) last long as pricing is not too far out
opportunities,” said Fiona Tuesday. of kilter with domestic levels. QUEEN VICTORIA
Trigona, TCorp’s head of funding Bank balance sheets bought Relative pricing has improved QUEENSLAND TREASURY CORP, rated
and balance sheet. 53% of the tap, well above the recently, with the Reserve Bank Aa1/AA+ (Moody’s/S&P), identifies
TCorp has only sold one 26% allocation to asset managers, of Australia’s June 5 rate cut and Australian dollar benchmark
offshore bond since it set up the with trading desks taking 11%, the prospect of further easing bonds as its principal source of
EMTN programme in December official institutions 7% and hedge contributing to a collapse in funding, but does not rule out
2012 – a modest Rmb1bn (then funds 3%. Australian cross-currency basis complementary foreign currency
US$163.5m) 2.75% one-year note Tcorp’s last syndicated deal swaps. bond sales.
sale back in November 2014. comprised primarily asset For example the Australian QTC has an indicative term
The first Dim Sum bond managers but this one saw the dollar/US dollar 10-year cross- debt borrowing forecast for
from an Australian state was return of bank balance sheets as currency basis swap has fallen 2019/2020 of A$9.9bn, A$2.1bn
seen as a largely symbolic trade, the main participants, Trigona from mid-30s in March and April of which has been pre-funded.
underlining growing trade and said. to 26.6bp last Wednesday, its The figure is projected to rise to
currency links with China. lowest reading in 12 months. A$11.5bn and A$15.2bn over the
The state has a few other small HIGHER REQUIREMENTS A syndicate banker said there following two years.
long-dated foreign currency The domestic tap will help pre- would inevitably be strong QTC already derives some
bonds outstanding from deals fund a A$13.3bn requirement for interest in Europe and the investor diversification benefits
CMB Leasing weathers bad news fair value at 150bp and 170bp
over Treasuries, respectively.
Final deal statistics were not
Bonds Reports of US contempt ruling prove no issue for China Merchants Bank unit available at the time of writing,
but orders were said to be over
BY CAROL CHAN initially marketed at 165bp area Bank said it was not involved in US$2.4bn, including US$865m
and 190bp area, respectively. any probe. (See People & Markets.) interest from the leads, at the
CMB FINANCIAL LEASING returned The latest Reg S issue was A banker on CMB Financial time of final guidance.
to the US dollar bond market CMB Leasing’s first since a Leasing’s bond issue said The new notes traded slightly
last week with a US$1bn deal US$1.2bn dual-tranche deal in demand for the deal was not wider in the aftermarket with
amid reports that a US court November 2016. affected by the news. the five-year tranche quoted at
had found it in contempt over a The deal coincided with Final pricing of the new notes a spread of 154bp/150bp over
probe into sanctions violations. a report in the Washington was in line or slightly tighter Treasuries and the 10-year at
The Chinese leasing Post that the issuer’s parent, than estimates of fair value. 175bp/172bp on Wednesday
company, rated A3/BBB+ China Merchants Bank, was Mizuho Securities’ trading afternoon, according to a
(Moody’s/S&P), last Tuesday one of three Chinese banks desk saw fair value for the two trader.
priced a US$900m 3.00% five- held in contempt for refusing tranches at Treasuries plus Wholly owned subsidiary
year tranche at Treasuries plus to comply with subpoenas in 145bp and 177.5bp respectively, CMB International Leasing
140bp and a US$100m 3.625% an investigation into North while Nomura’s trading desk Management, rated BBB+ by
10-year tranche at Treasuries Korean sanctions violations. had it at 140bp and 175bp. S&P, is the issuer of the notes,
plus 170bp. The tranches were In response, China Merchants Research firm CreditSights saw which have the benefit of a

by selling 144A eligible local

bonds that can attract high US
demand as underlined by the
Sri Lanka relies on loyal support
49% North American allocation Bonds Sovereign returns after Easter attacks rocked country
for its A$1.75bn July 2026 bond
issued in October 2015. BY DANIEL STANTON disbursed its latest payment to US$4.4bn from more than 290
TREASURY CORP VICTORIA, rated Sri Lanka, bringing the total so accounts, with the US taking
Aaa/AAA (Moody’s/S&P), has The DEMOCRATIC SOCIALIST REPUBLIC far under this programme to 44%, EMEA 40% and Asia 16%.
already pre-funded A$3bn of OF SRI LANKA sold US$2bn of senior US$1.2bn, and agreed to extend By investor type, fund
its smaller A$5.5bn 2019/2020 unsecured bonds in two tranches the programme by a year to June managers and asset managers
projected borrowing and said last Monday, in its second visit to 2020. booked 87%, insurers, pension
it has no plans to issue non- the dollar market this year and Sri Lanka faces foreign- funds and corporates 6%, bank
Australian dollar maturities “at its first since bombings rocked currency sovereign debt treasuries 5%, and private banks
this time”. the country in April. repayments of US$16.8bn and others 2%.
The state’s estimated funding The B2/B/B rated sovereign from 2019-2022, while the Sri Lanka’s political situation
requirement, however, is priced a US$500m 6.35% five-year government expects to have has been volatile in recent
projected to almost double to at par and a US$1.5bn 7.55% long reserves of US$7.2bn-$7.5bn at years, and investors no doubt
A$10.2bn in 2020/2021, and a 10-year, due in March 2030, at the end of this year, according remember when President
subsequent offshore foray cannot 99.95 to yield 7.55%. to Fitch. Sirisena dissolved parliament
be ruled out, especially if TCorp Both tranches came at the Sri Lanka’s five-year dollar the day after the sovereign’s
achieves a compelling result. tight end of respective final bonds traded flat or inside US$2.5bn bond offering in April
guidance of 6.4% area, plus or those of Pakistan (B3/B–/B–) 2018.
TAP STATS minus 5bp, and 7.6% area, plus or and Mongolia (B3/B/B) before Sirisena on June 23 called
The TCorp reopening via minus 5bp. Initial guidance was the attacks in April, but now for the repeal of the 19th
joint lead managers Citigroup, 6.6% area and 7.8% area. Mongolia’s March 2024s are amendment to the constitution,
Deutsche Bank, UBS and Westpac The sovereign last printed trading at around 5.6% and which transferred some of the
priced at 110.466 for a reoffer offshore in March, with a Pakistan’s April 2024s at 6.1%, president’s powers to the prime
yield of 1.83%, within 51.25bp– US$2.4bn dual-tranche offering, according to Refinitiv data. minister and key institutions.
54.25bp guidance at 53bp providing a straightforward Support for the 19th amendment
over EFP (10-year futures) and pricing comparison. Its dollar REAL SUPPORT was one of the main components
53.4bp wide of the April 2029 bonds due March 2024 were The sovereign has been of his manifesto during the
ACGB. quoted at 6.26%, while its March consistently well-supported by 2015 election, but Sirisena now
Total bids exceeded A$3.1bn 2029 bonds were seen at 7.28%. real-money investors from the blames it for causing instability.
for the second largest semi- Accounting for the maturity US and Europe, and this deal The country faces its next
government issuance of the extension, a banker on the deal was no exception. presidential election by the end
year, after the A$2.5bn sale of estimated that the sovereign paid Orders were over US$1.8bn of this year.
new 2.5% October 2029 bonds a new issue concession of around from more than 165 accounts for BOC International, Citigroup,
by TCV on March 20. 5bp on the 2024s and 5bp–10bp the five-year, with EMEA taking Deutsche Bank, HSBC, JP Morgan,
Australian investors bought on the 2030s. 50%, the US 30% and Asia 20%. SMBC Nikko and Standard Chartered
92% of the tap, Asia 3%, the US The yield for the 2024s has By investor type, fund were joint bookrunners.
3% and Europe 2%. been volatile since they were managers and asset managers Both bonds were trading
issued in March, hitting a year- booked a combined 80%, above reoffer on Tuesday
to-date peak of 7% in early June, insurers, pension funds and morning at cash prices of around
keepwell and liquidity support but has been as low as 6.1%, corporates 9%, bank treasuries 100.25. By Friday, the 2024s had
deed and a deed of asset according to Tradeweb. The 8%, and private banks and others softened to a bid of 99.9, while
purchase undertaking provided March 2029s have been as high 3%. the 2030s had risen to 100.5,
by CMB Financial Leasing. as 7.8% and as low as 7.0%. The long 10-year drew over according to Tradeweb.
The notes, to be issued off Sri Lanka’s president,
the issuer’s MTN programme, Maithripala Sirisena, on June 22 SRI LANKA’S FIVE-YEAR DOLLAR BOND YIELD HAS RISEN ABOVE
have expected ratings of Baa1/ extended for another month the THOSE OF PAKISTAN AND MONGOLIA
BBB+ (Moody’s/S&P). country’s state of emergency, 7.00
Proceeds will be used which has been in place since a

6.75
offshore for general corporate jihadi group killed 258 people in
purposes. attacks on churches and hotels 6.50
Agricultural Bank of China Hong on Easter Sunday.
Kong branch, Bank of China, China Fitch warned that the 6.25
Everbright Bank Hong Kong branch, bombings would harm

6.00
CMB International, MUFG and economic growth this year and
Standard Chartered Bank were could raise external financing 5.75
joint global coordinators. They pressures, even though it said
were also joint bookrunners the government’s economic 5.50
Mar 19 Apr 19 May 19 Jun 19
and joint lead managers with policies had enabled the country
ANZ, Citigroup and CMB Wing to put its IMF programme Sri Lanka March 2024 Pakistan April 2024 Mongolia March 2024
Lung Bank. back on track. In May, the IMF Source: Refinitiv

News
NatWest makes friends in Japan
Bonds Lower rates benefit British bank as Credit Agricole proves less attractive
BY TAKAHIRO OKAMOTO Since the beginning of June, 90bp area, quite competitive an opco issuer,” the banker said.
yen swap rates, the yardstick compared to its euro curve.
The decline in Japanese rates used for international yen bond Despite the aggressive NO LONGER PREFERRED
since May affected last week’s yen transactions, have fallen by 5bp– guidance, the five-year drew fair Credit Agricole raised ¥35.9bn
bonds from NATWEST MARKETS and 6bp on growing expectations demand. All went to Japanese from a dual-tranche senior non-
CREDIT AGRICOLE in different ways. that, should the US Federal investors, with regional banks preferred Samurai bond.
NatWest, which has been Reserve cut its rates, the Bank taking 65% and asset managers A ¥22.4bn five-year priced at
funding actively in euros lately of Japan may have to consider 35%. Investors for the three-year 50bp over with a 0.44% coupon,
ahead of Brexit, came to the additional easing to stop the yen were more diversified. Domestic while a ¥13.5bn 10-year tranche
yen market with what bankers from strengthening. investors took 96% and non- priced at 60bp over with a
on the deal described as its first NatWest, which has only Japanese 4%. By investor type, 0.684% coupon. Both came at
quasi-public yen offering. Credit previously sold yen bonds in regional banks took 53%, banks the wider end of the respective
Agricole, on the other hand, is euroyen private placements, 24%, asset managers 16% and initial guidance ranges of 48bp–
well known as a frequent yen raised ¥50bn (US$463m) in a insurers 7%. 50bp and 55bp–60bp.
issuer. senior euroyen bond consisting According to a banker on the The spreads on both tranches
Surprisingly, though, it was of ¥41.7bn of 0.737% three-year deal, the shorter-dated paper, were 10bp inside where French
NatWest that drew the bigger and ¥8.3bn of 0.848% five-year priced at 80bp over yen swaps, peer BPCE priced SNP bonds
demand. The Royal Bank of notes. Final orders were ¥55bn, paid about 15bp–20bp over the just two weeks earlier, making
Scotland Group’s unit offered more than even bankers on the issuer’s euro curve, while the Credit Agricole’s bonds look less
wider spreads and greater rarity deal had anticipated. longer-dated paper at 90bp over attractive.
value, and this certainly played Initial price guidance for yen swaps is flat to about 5bp The coupons were also not
a role in attracting interest. the three-year was 75bp–80bp tighter. appealing compared with
But falling yen rates were the over yen offer-side swaps. As “I think investors were NatWest’s trade, which paid near
primary factor making Credit the issuer was less interested attracted because of the good double for its five-year senior
Agricole’s bonds less attractive in in the longer tenor, it set the yields, because of the short-dated bond. Mexico, too, paid 0.83%
relative terms. guidance for the five-year around maturities and because it is from for a five-year and 1.30% for a 10-
Weibo bonds jump after debut smaller operating scale.

Weibo eventually priced
between Single A rated Baidu
Bonds Rarity value draws investors to social media network and Triple B rated JD, reflecting
both price discovery and a desire
BY CAROL CHAN over US$1bn one hour after The bonds have ratings of to leave room for performance
the announcement of initial Baa1/BBB (Moody’s/S&P), in in the aftermarket.
WEIBO, China’s popular Twitter- guidance, and further increasing line with the issuer. Weibo has Nomura said Weibo is a
like social media network, saw to US$3.1bn by the time final previously issued convertible decent tech name with strong
its debut US$800m bond jump guidance was released. Books bonds, but the issue was its first credit metrics and a leading
sharply higher after pricing last continued to grow even after straight corporate bond. position in the social media
Wednesday as investors chased that as US investors came in, The deal has helped Weibo sector in China, despite growing
a rare credit from the country’s with final books at US$3.25bn, or to further diversify its funding competition with other players
technology sector. four times the issue size. channels, and used up its entire such as TikTok (Douyin)
The newly priced 3.50% five- Asia took about half of the offshore debt issuance quota allowing users to publish their
year bonds opened at a spread of bonds with the rest allocated to from the National Development own content.
170bp/166bp over Treasuries on the US and EMEA, with a well and Reform Commission. “We like its light-asset
Thursday morning and traded diversified mix of investors. The business model and expect the
even tighter to 162bp/161bp in majority of the deal went to asset ACQUISITION RISK company to continue its strong
late morning, before retreating managers while central banks, Investors used Baidu and JD.com growth momentum given the
slightly to 165bp/164bp by late sovereign wealth funds and as the closest comparables for expected rising penetration rate
afternoon. insurers also bought the bonds. the new issue. over the next few years,” Clare
The SEC-registered notes “There is not much dollar Nomura’s trading desk Guo, a Nomura desk analyst,
were priced 172.5bp wide of bond supply from the Chinese suggested that investors wrote in a note.
Treasuries, the tight end of final tech space. Given the premium participate in the deal at final “That said, as there is a more
guidance of 175bp (+/-2.5bp) and Weibo’s new issue offered, guidance of no less than Z plus intense competition in the
well inside initial guidance of investors definitely are interested 165bp or Treasuries plus 160bp. online advertising market, we
195bp area. to have the bonds,” said a This was based on Baidu’s 2024s think it is likely that Weibo may
Investor demand was Hong Kong-based investor trading at Z plus 130bp and further expand its business scope
said to be very strong, with from a Chinese brokerage who JD’s 2026s at Z plus 216bp, plus to grow its user base, which
orders quickly growing to participated in the deal. the fact that Weibo has a much brings potential acquisition risk.”

year, priced the previous day.

Japan’s newly-introduced
risk-weighting rule for regional
China eases non-bank cash crunch
banks’ investments in bonds Regulation Securities firms granted new funding channels to keep credit flowing
counting towards total loss-
absorbing capacity requirements BY YANFEI WANG, DANIEL STANTON will ease tight liquidity for boost lending by smaller banks
also made investors cautious securities companies, the on June 14.
about the lower-yielding Credit The Chinese government is intention is for this money to “But it won’t be easy for
Agricole bonds. The rule does not attempting to spur lending trickle down. small non-banks that use
apply to NatWest’s bonds. to small firms by relaxing “The latest arrangements corporate bonds as collateral,”
Well aware of such obstacles, financing channels for large have clear aims – the ultimate said Li.
the French bank was not securities companies, amid goal is to ensure the real A total of 43 bond offerings
interested in a large issue and worries that an ongoing credit economy can still access valued at Rmb31.2bn were
focused on securing what crunch may still continue. financing,” said a manager postponed or cancelled in the
it thought was fair value. The People’s Bank of China with a securities company first three weeks of June, twice
According to bankers on the granted short-term bond which received an additional the amount compared with the
deal, the new Samurai bonds quotas totalling Rmb304.1bn quota. same period in May, according
priced roughly 10bp to 15bp over (US$44.2bn) to nine large to Wind.
the issuer’s euro curve. securities companies last week. BAOSHANG FALLOUT “Giving credit to large
NatWest’s euroyen deal was GUOTAI JUNAN SECURITIES, CITIC The arrangements come securities companies looks
jointly led by Daiwa, Mizuho, SECURITIES, HAITONG SECURITIES, after the state takeover of like the most efficient way to
MUFG, NatWest Markets and SMBC CHINA GALAXY SECURITIES, HUATAI Baoshang Bank caused ripples ease liquidity concerns,” said
Nikko. The bonds will be listed on SECURITIES, GF SECURITIES, CHINA in the financial sector, despite the manager with a securities
the London Stock Exchange and SECURITIES, CHINA MERCHANTS regulators’ insistence that it company. “It is not realistic
are rated Baa2/A–/A/A (Moody’s/ SECURITIES and SHENWAN HONGYUAN was an isolated incident. to push small banks to issue
S&P/Fitch/JCR). SECURITIES have released separate A liquidity crunch, at first more credit to funds or
Credit Agricole’s Samurai, rated announcements about their limited to small banks, has private equity as some small
Baa2/A–/A+, was led by Credit quota approvals. CICC has also spread to non-bank institutions banks themselves have yet
Agricole, Daiwa, Mitsubishi UFJ applied but has yet to disclose that used to borrow money to recover from the crisis. It
Morgan Stanley, Mizuho, Nomura the actual amount approved. using corporate bonds as is not plausible to ask large
and SMBC Nikko. These short-term quotas have collateral to keep costs low. commercial banks to spur
been coupled with a relaxation That has led to a knock-on lending as they have stringent
of the policy on financial bond effect on corporate bond risk management.”
Weibo, a subsidiary of Sina, issuance in the interbank issuers, as the non-banks Nevertheless, whether the
said it would use the bond market. lack the money to invest in additional money can resolve
proceeds for general corporate In the past, securities corporate bonds. the lending problems of non-
purposes. companies were only allowed Small commercial banks banks remains to be seen.
Given that Weibo is generating to issue financial bonds in the continue to face higher funding A fixed income fund
free cashflow and has limited exchange market, with tenors costs, as illustrated by elevated manager was quite pessimistic
capital expenditure, Guo said she varying from three months to yields for negotiable certificates about the latest policy push.
could not rule out the company 10 years, and only short-term of deposit. “In the future, low-rated
using the proceeds for potential notes with tenors up to three From June 1 to June 27, corporate bonds with AA+ or
acquisitions or channelling some months were allowed in the AA rated issuers sold a total below might still be rejected as
to its parent company. interbank market. of Rmb31.92bn of CDs at collateral, while government
Besides, Guo said more An analyst with a credit an average yield of 3.50%, securities and bonds by state
stringent media censorship rating agency said regulators compared to Rmb80.8bn at lenders will remain popular.
will also have a potentially may allow securities around 3.25% in the same Market confidence will be hard
negative impact on Weibo’s user companies to issue financial period in May, according to to restore in the short-term,”
stickiness. bonds with tenors up to three data from Wind Info. he said.
Rating agency S&P said years. Li Chao, chief economist The securities company
Weibo is likely to remain “That means apart from at Huatai Securities, said the manager, however, expected
one of the leading social replenishing capital – often overall liquidity strain had further policy guidance
media players in China with through short-term debt – eased in the money market to ensure that liquidity is
healthy growth and very low securities companies are able after the central bank pumped channeled effectively.
leverage over the next two to increase their leverage in more money. The overnight “Regulators did not specify
years. However, the company’s levels,” she said. “This would average interbank pledged repo requirements for the use of
limited business diversity and provide room to support rate DR001, which measures proceeds for short-term debts
intense competition in online non-banks, for instance. the borrowing cost in the nor financial bonds, but it
advertising temper these They can loosen some earlier interbank market, on June 24 would not be surprising to
strengths, S&P said. tight standards on acceptable went below 1% for the first see window guidance soon,”
Goldman Sachs was sole collateral and remove some time. she said. “They may require
bookrunner on the transaction. low-rated names from their The PBoC provided a securities companies to lend
HSBC and ICBC (Asia) were co- blacklists.” Rmb300bn rediscount and money to other non-banks or
managers. While the new policies standing lending facility to even appoint key borrowers.”

People
& Markets
TOP STORY EQUITIES
Corruption probe rocks HK exchange

Joint raid by SFC and ICAC raises questions over IPO process
The Hong Kong stock exchange’s reputation candidates also need to pass a listing TOûTHEû3&#ûCITINGûPOTENTIALûCONmICTSûWITHû
as one of the world’s leading capital raising COMMITTEEûSTAFFEDûBYûlNANCIALûSERVICESû the current model given that the exchange,
venues took a knock last week after the industry representatives, companies listing which acts as the frontline regulator,
city’s anti-graft watchdog arrested a former ONû'%-ûAREûAPPROVEDûBYûTHEûEXCHANGEûITSELF generates fees when companies list.
EXCHANGEûOFlCIALûANDûTHEûSECURITIESûREGULATORû (+%XûSAIDûINûAûSTATEMENTûLASTû7EDNESDAYû )NûûTHEû3&#ûANDû(+%XûPROPOSEDû
ANNOUNCEDûAûhSPECIlCûREVIEWvûINTOûHOWûITû THATûWASûPROVIDINGûhFULLûASSISTANCEvûTOûTHEû setting up two new bodies, one to determine
handled new listings. ICAC and the SFC. It noted that neither listing policy and another to vet IPOs, both
The Independent Commission Against the exchange itself nor any of its current equally staffed by the securities regulator and
Corruption said last Wednesday that it had employees were being investigated by the the exchange. This was abandoned a year
arrested a former joint head of the IPO ICAC. later.
vetting team of the exchange operator’s Hong Kong has also been singled out
listing department and two of his associates REGULATORY REGIME for criticism following several corporate
for suspected corruption and misconduct in The investigation is a blow to Hong Kong at a governance scandals involving mainland
PUBLICûOFlCE time when it is grappling with rival bourses Chinese companies. Last Monday, the shares
The former joint head is Eugene Yeoh, in China and the US to maintain its position of Hong Kong-listed clothing company
two sources told IFR. Yeoh joined HONG KONG at the top of the IPO rankings. BOSIDENG INTERNATIONAL HOLDINGS were suspended
EXCHANGES AND CLEARING in 2013 and oversaw (ONGû+ONGûRANKEDûlRSTûLASTûYEARûFORû after falling more than 25% following a report
a team of 70 as co-head of the IPO vetting )0/SûACCORDINGûTOû2ElNITIVûDATAûFOLLOWINGû from a short seller.
team before leaving last month. Yeoh did not AûmURRYûOFûBIG TICKETûOFFERINGSûINCLUDINGû The report from Bonitas Research accused
respond to a request for comment. the HK$42.6bn (US$5.45bn) IPO of Chinese the company’s chairman Gao Dekang and his
The Securities and Futures Commission smartphone maker Xiaomi and Chinese associates of paying over the odds to acquire
ANDûTHEû)#!#ûRAIDEDûTHEûOFlCESûOFûTWOû)0/û online services provider Meituan Dianping’s other apparel brands in order to siphon off
sponsors on Sunday June 23. The operation, (+BNûmOAT money from investors as well as fabricating
CODENAMEDûh#OLDû-OUNTAINvûALSOûINVOLVEDû The number of deals has since dried up in THEûCOMPANYSûPROlTS
the ICAC searching the premises of two listed part because of concerns about the impact Bosideng denied the allegations, describing
COMPANIESûANDûAûlNANCIALûPRINTINGûCOMPANY of trade tensions on China’s economy. THEMûASûhMALICIOUSûANDûBASELESSvû)TûSAIDû
The SFC said it had launched a review of (ONGû+ONGûSLIPPEDûTOûTHIRDûDURINGûTHEûlRSTû THATûITSûlNANCIALûSTATEMENTSûWEREûPREPAREDû
how the exchange “administered or dealt half of the year by total IPO proceeds, with in accordance with all the relevant laws and
WITHvûLISTINGSûANDûOTHERûMATTERSûTHATûMAYûBEû 67 companies having raised a combined that its various acquisitions were done for
relevant to the investigations. HK$8.9bn, behind both the New York Stock commercial purposes.
Local media had reported earlier %XCHANGEûANDû.ASDAQ Trading in Bosideng’s shares resumed last
THATûOFlCIALSûATû(+%XûWORKEDûWITHû)0/û The investigation also raises questions Tuesday and closed last Friday at HK$2.17,
sponsors to help companies, mostly on the about the robustness of Hong Kong’s listing regaining some of the ground lost from last
EXCHANGESûSECONDûBOARDû'%-ûTHATûWOULDû regime. Monday, although they were still down 5.7%
otherwise have struggled to meet the listing Some corporate governance experts and from their level on June 21 before Bonitas
requirements. activist investors have previously called for issued its report.
Unlike the main board, where IPO the IPO approval process to be transferred THOMAS BLOTT
Who’s moving where...

GOLDMAN SACHS has of America Merrill CHINA INTERNATIONAL served as general
poached Sam Thong Lynch. CAPITAL CORPORATION manager of Central
from Morgan Stanley Thong, who is due to has appointed Shen Huijin Investment
to become chairman start in July, has been Rujun, the head of since October 2018.
of its healthcare with Morgan Stanley the domestic arm of He was previously
group in Asia ex- since 2007, primarily sovereign wealth fund vice president of Bank
Japan. focused on advising China Investment of Communications
Thong will also serve Chinese healthcare Corporation, as its from 2015 to 2018
as co-head of the companies on their new chairman. having spent the
bank’s healthcare Hong Kong and US Shen, 55, whose majority of his career
group in the region IPOs. Before that, he appointment is still at Industrial and
alongside Michael was at Merrill Lynch subject to approval Commercial Bank of
Chiu, who only joined between 1996 and from regulators and China.
in October from Bank 2007. shareholders, has

Please send job moves to
[email protected]
RBI to turn dovish after resignation LOWERINGûTHEûCOSTûOFûCAPITALvûSAIDû.OMURAû

in the note.
“The resignation of RBI deputy governor
The resignation of the deputy governor of the central bank and Narendra Modi’s Viral Acharya – one of the most hawkish
India’s central bank last week has boosted government dealt a further blow to the members of the MPC – boosts the chances
the prospects for more rate cuts, lifting country’s fragile debt market, which had OFûFURTHERûRATEûCUTSûINûTHEûNEARûTERMvû3HILANû
hopes for a sustained rally in the local debt already been reeling from defaults at the Shah, senior India economist at Capital
market over the medium term. Infrastructure Leasing & Financial Services %CONOMICSûSAIDûINûAûNOTEûONû*UNEû
Viral Acharya’s departure six months group. Sanyal said earlier this month at
before the end of his term did not come as Acharya had warned in a speech on the Nomura Investment Forum Asia in
a complete surprise. October 26 that undermining the central Singapore that the government would
“Frictions between him and the bank’s independence could be “potentially PROVIDEûAûLIQUIDITYûWINDOWûFORûlNANCEû
government on issues related to central CATASTROPHICvûINûAûTHINLYûVEILEDûCRITICISMûOFû companies if contagion from the liquidity
CRISISûINûTHEûNON BANKINGûlNANCIALûSECTORû
were to materialise, but warned: “Don’t
EXPECTûEVERYûSINGLEûCASEûTOûBEûRESCUEDv
Sanyal said earlier this month at the Nomura Investment Forum Some offshore real money investors
Asia in Singapore that the government would provide a liquidity will doubtless view Acharya’s departure
window for finance companies if contagion from the liquidity as a negative for the RBI’s credibility. “It
crisis in the non-banking financial sector were to materialise, but should once again raise questions over the
warned: “Don’t expect every single case to be rescued.” 2")SûCREDIBILITYûANDûITSûINmATION lGHTINGû
CREDENTIALSvûSAIDûAûNOTEûFROMû#APITALû
%CONOMICS
However, fund managers are not worried
BANKûINDEPENDENCEûHADûCOMEûTOûTHEûFOREvû government pressure on the central bank about the central bank’s independence.
Nomura said in a note on June 24. TOûRELAXûMONETARYûANDûlNANCIALûPOLICIES “The structure of the monetary policy
Disagreements with the government The RBI has been under pressure to keep committee still has three RBI and three
have already been blamed for the early monetary policy loose after the defaults at INDEPENDENTûMEMBERSvûSAIDû.EERAJû3ETHû
exit of the two previous RESERVE BANK OF INDIA IL&FS last September increased the cost of head of Asian credit at BlackRock. “The
governors. Urjit Patel resigned in December borrowing for shadow banks. GOVERNMENTûHASûSOMEûINmUENCEûBUTûTHEYû
last year and Raghuram Rajan unexpectedly Sanjeev Sanyal, the principal economic CANTûREALLYûINmUENCEûTHEûCENTRALûBANKSû
announced in June 2016 he would not seek ADVISERûINûTHEûMINISTRYûOFûlNANCEûANDû DECISIONûMAKINGv
a second term. Michael Patra, a member of the RBI’s Seth said the potential for additional rate
“A few weeks ago, Dr Acharya submitted monetary policy committee, are possible cuts is still positive for the Indian onshore
a letter to the RBI informing that due to replacements for Acharya, according to bond market, given the steepness of the
unavoidable personal circumstances, he is media reports. curve from the policy rate point to where
UNABLEûTOûCONTINUEûHISûTERMvûBEYONDû*ULYû the 10-year benchmark is trading.
23, the central bank said in a statement. DOVISH STANCE On June 6, the RBI cut rates by 25bp for
Acharya, who joined the RBI in January %CONOMISTSûEXPECTûTHEû2")ûTOûADOPTûAû the third time this year, to 5.75%. India’s
2017 for a three-year term, will return more dovish stance following Acharya’s 10-year benchmark yield was hovering at
to New York University’s Stern School of resignation. 6.93% as of June 26 after touching an 18-
Business in August to teach economics, “At the margin, the composition of the month low of 6.781% on June 20, according
India’s Business Standard newspaper said. MPC will likely become incrementally more TOû2ElNITIVûDATA
Last October, a bitter public spat between dovish as Sanyal has argued in the past for KRISHNA MERCHANT
Please contact us if you have information about job moves: [email protected]
Kai Fang, head of of America Merrill Vicky He, head of distribution of

China equity capital Lynch. syndicate for North financings from
markets at CHINA A spokesperson from Asia in CREDIT SUISSE’s Greater China, Korea
RENAISSANCE, has left China Renaissance Asia Pacific financing and Japan.
the bank, according declined to comment. group, has resigned Prior to joining Credit
to people familiar China Renaissance, less than a year after Suisse, He was with
with the situation. which focuses on new joining the bank. Standard Chartered’s
Fang has worked economy businesses, She was hired by loan syndication
at the Chinese was founded by Bao the Swiss bank in team in Hong Kong.
investment bank for Fan in 2005. September last She left StanChart in
more than two years year as a director August 2018 after a
after spending eight in Hong Kong with year covering North
years at the ECM responsibility for Asia loan syndication.
department of Bank syndication and

People
& Markets
BlackRock sees UNDERû2AJATû!GRAWALvûSAIDû3ETH
“India is probably one of the very few
It does not have a dedicated private credit
fund for India, but invests under regional
gold in Indian economies where you see a large, broad-

BASEDûCREDITûGAPvûHEûSAIDûh4HEûCREDITûGAPû
and global strategies.
BlackRock sees opportunities to lend
bad debt sits everywhere, from straightforward

senior secured lending in the middle
to mid-market companies with annual
earnings of US$9m–$30m that do not have
market to non-performing loans and easy access to bank loans or the public
BLACKROCK is looking to expand its DISTRESSEDûOPPORTUNITIESv capital markets, as well as distressed
special situations credit team in India BlackRock hired Agrawal last August situations.
to take advantage of what is sees as an as managing director in the Asian private “The range of returns in the private
unprecedented opportunity in the country’s CREDITûTEAMûITSûlRSTûSENIORûHIREûINûTHEû credit space is in a fairly broad spectrum,
private debt market. private credit arena in India. Agrawal from low double digits, that is 11%–12%, to
The US-based investment manager is last worked as an executive director at HIGHûTEENSûINû53ûDOLLARûTERMSvûSAIDû3ETH
lending to mid-market companies and DBS India, where he was responsible for BlackRock’s investments so far have also
stressed borrowers that are otherwise monitoring and recovering non-performing INCLUDEDûlNANCINGSûFORûSTRESSEDûCOMPANIESû
unable to raise money in the bank or bond loans, and is in charge of developing looking to avoid bankruptcy proceedings
market. BlackRock’s strategy in opportunistic credit in India’s National Company Law
Neeraj Seth, head of Asian credit at investments, including distressed and non- Tribunal. Seth estimates that US$225bn
BlackRock, estimates the total lending performing loans. of non-performing loans still need to be
capacity from India’s banks and Private credit is a high-priority and resolved.“The banking system has gone
NON BANKINGûlNANCIALûCOMPANIESûISû fast-growing segment of BlackRock’s through a crisis which is still in very early
US$50bn–$70bn short of market demand. global credit business, a 150-strong team days of repair phase and NPLs are still
“We are planning to add more capability managing over US$80bn in client assets SITTINGûABOVEûvûSAIDû3ETH
and bandwidth to the Asian private credit across multi-strategy credit, leveraged India’s central bank is putting lenders
team in India, which was set up last year lNANCEûANDûPRIVATEûCREDITûPORTFOLIOS under pressure to resolve their bad debts or
Loans veteran Lipton leaves HSBC loan market has grown nine-fold to around
US$485bn in 2018, according to LPC data.
Lipton passionately championed the loan
Veteran loan banker Phil Lipton has resigned a heavyweight in Asian syndicated loan product and played a key role in the growth
from HSBC after a successful 15-year stint markets, notching up several industry ANDûDEVELOPMENTûOFûTHEû!SIAû0ACIlCû,OANû
with the bank, according to sources and an awards, including winning the IFR Asia Markets Association, which was founded
internal memo seen by LPC/Basis Point. Loan House Award for 2010 and 2016. a year after he arrived in Hong Kong. He
Lipton was head of loan syndications He helped HSBC’s loans team navigate served as chairman of the industry body for
FORû!SIAû0ACIlCû(ISûLASTûDAYûWITHûTHEûBANKû DIFlCULTûPERIODSûSUCHûASûTHEûGLOBALûlNANCIALû four years from 2015 before resigning from
which he joined in April 2004 as head of loan crisis in 2007-2008 and the eurozone crisis that position in May.
DISTRIBUTIONûFORû!SIAû0ACIlCûWASûONû*UNEû in 2011. He started his banking career with
Following Lipton’s departure, Ashish Sharma At the end of 2018, HSBC was ranked Barclays in London in 1988 and moved
has taken over as head of loan syndications THIRDûINûTHEû!SIAû0ACIlCûEX *APAN û to Hong Kong in 1997 with Standard
FORû!SIAû0ACIlCûWITHûEFFECTûFROMûLASTû-ONDAY bookrunner league table with loan volumes Chartered, where he worked for seven
An HSBC spokesperson declined to of US$16.31bn. years before joining Banca Intesa (now
comment. During his stint of more than two Intesa Sanpaolo) in 2001 as head of loan
Lipton spearheaded HSBC’s growth into decades in Asia, the region’s syndicated syndications.
Who’s moving where...

Kevin Burke, Louise Kitchen, head Abhishek Bakshi knowledge of the
previously global of institutional and has joined MAYBANK development said.
head of financial treasury coverage, KIM ENG as director Bakshi joined from
markets sales at and APAC CEO for equity capital CIMB where he had
Standard Chartered, Werner Steinmueller, markets. been a director for
rejoined DEUTSCHE in his new job. He is Based in Singapore, ECM since 2012,
BANK last Monday as based in Singapore. Bakshi reports according to his
head of institutional Burke was head of to Ramesh LinkedIn profile. He
and treasury coverage institutional client Manimekalanandan, previously worked
in Asia Pacific. coverage in APAC regional head of at Royal Bank of
Burke, who swapped during his previous ECM. Bakshi will Scotland and ABN
Deutsche for stint at Deutsche. He be working on ECM AMRO.
StanChart only two has also worked at transactions outside
years ago, reports to Barclays. Malaysia, people with

[email protected]
refer debtors to the bankruptcy courts, in

order to clean up the system and reallocate ANZ's NZ unit faces reviews
credit towards economic growth.
Progress under India’s bankruptcy AUSTRALIA AND NEW ZEALAND BANKING GROUP is 2".:vû!.:û.EWû:EALANDûCHAIRMANû3IRû*OHNû
regime, however, has been slow. Out of 715 facing further scrutiny in New Zealand after Key said.
companies in default, only 92 had yielded an expenses scandal involving its former New Zealand’s Deputy Prime Minister
a resolution plan while 378 had been chief executive, with the country’s central Winston Peters last Monday called on Key, a
placed into liquidation as of March 31 2019, bank demanding two independent reviews former prime minister under the opposition
according to Icra. into the lender. National Party, to resign during a TV
The non-bank sector is also wrestling The Reserve Bank of New Zealand has interview.
with a liquidity crisis in the wake of the asked ANZ to provide two independent “It’s the governor of the Reserve Bank who
default of India’s Infrastructure Leasing & reports examining its compliance with capital COULDûMAKEûTHATûREQUESTvûHEûSAIDûh"UTûIFû
Financial Services nine months ago. rules as well as its internal risk management you were to ask me, if I was the governor of
Seth argues India needs to open its debt and governance controls. the Reserve Bank, I would have asked for his
market to foreign investors and deepen The RBNZ’s intervention comes as pressure RESIGNATIONv
the domestic credit market to prevent the has been mounting on the bank after it Last Monday, Finance Minister Grant
tight credit conditions creating a drag on announced earlier this month that its New Robertson also announced that the second
medium-term growth. :EALANDû#%/û$AVIDû(ISCOûHADûSTEPPEDûDOWNû phase of a government review into the
“The FPI concentration rules in the bond Reserve Bank would look at whether the
market constrain global investors, and New Zealand’s Deputy Prime existing supervisory system was strong
regulators should be reviewing the rules in Minister Winston Peters last ENOUGHûANDûWHETHERûTHEû2".:ûHADûSUFlCIENTû
LIGHTûOFûTHEûCREDITûGAPvûSAIDû3ETH Monday called on Key, a former enforcement powers to discourage bad
“India remains an investment-grade behaviour.
ECONOMYûWITHûAûCLOSEDûDEBTûMARKETv
prime minister under the The Labour-led government announced
KRISHNA MERCHANT opposition National Party, to a review of the Reserve Bank shortly after
resign. TAKINGûOFlCEûINûû)TûSAIDûATûTHEûTIMEû
THATûTHEûlRSTûPHASEûWOULDûLOOKûATûMONETARYû
Sharma joined HSBC as managing following an internal review of his expenses. policy, while the second phase would
director in August last year in a newly Hisco, who went on medical leave in “produce a list of areas where further
CREATEDûPOSITIONûINûTHEû!SIAû0ACIlCû May, was found to have run up hundreds investigations of the Bank’s activities may be
LEVERAGEDûANDûACQUISITIONûlNANCEûLOANû of thousands of dollars per year on items DESIRABLEv
syndication team, with responsibility to such as chauffeured cars and wine storage, 4HEûmURRYûOFûANNOUNCEMENTSûCOMESûONLYû
lead syndication of complex and leveraged which were subsequently logged as business a few weeks after the RBNZ revoked ANZ’s
loans. expenses. ANZ said it disputed Hisco’s licence to calculate its own operational risk
Prior to joining HSBC, Sharma was characterisation of the expenses, and cited CAPITALûFORûhPERSISTENTvûCONTROLûFAILURES
Credit Suisse’s head of loan syndications his health as one of the reasons for his It also comes several months after the
FORû!SIAû0ACIlCûBEFOREûHEûQUITûINûEARLYû departure. conclusion of the Royal Commission inquiry
-ARCHûLASTûYEARûAFTERûAûlVE YEARûSTINTû ANZ said in a statement that it welcomed in Australia. Commissioner Kenneth Hayne
Before Credit Suisse, Sharma worked for the reviews. lambasted the country’s big four lenders
16 years at Bank of America Merrill Lynch, “As has been the case with independent INûHISûlNALûREPORTûDETAILINGûAûCULTUREûOFû
where he handled a variety of roles in loan REVIEWSûOFûOTHERûlNANCIALûINSTITUTIONSû widespread greed and recklessness.
syndications, structured credit and risk in processes, we agree that the most effective A spokesperson for ANZ declined to
India, New York and Hong Kong. way of achieving this assurance is via the comment.
PRAKASH CHAKRAVARTI independent report powers given to the THOMAS BLOTT
Please contact us if you have information about job moves: [email protected]
EY has appointed Company. He has also Rachel Freeman Her appointment

Jan Bellens as head served as Asia Pacific has left the comes just over a
of its global banking banking and capital International Finance month after AMTD
and capital markets markets leader and Corporation to join Group in a joint
team. global banking and Hong Kong-based venture with Chinese
Bellens has spent capital markets boutique investment smartphone maker
the last 16 years in leader for emerging bank AMTD GROUP. Xiaomi was awarded
Asia, including most markets during his Freeman, who was a virtual banking
recently as deputy stint at EY. an advisory manager licence by the Hong
banking and capital in the IFC’s financial Kong Monetary
markets leader at EY, institutions group in Authority.
based in Singapore. Asia Pacific, joins as The IFC is the private
Bellens joined EY in chief strategy and sector financing arm
2013 from McKinsey & innovation officer. of the World Bank.

People
& Markets
statement said, while Wang had refused to
Ex-UBS China banker jailed plead.
Sang, who had worked at leading
A former UBS banker in China has been Sang was paid Rmb5m (US$727,500) for Chinese brokerages before joining UBS,
sentenced to nine years in prison by the leak of information by his associates, left the Swiss bank in November 2017, the
a Shanghai court for disclosing inside WHOûTOGETHERûMADEûTOTALûPROlTSûOFûMOREû website of the Securities Association of
information related to an acquisition in than Rmb120m by trading shares in the China shows.
2017, court documents show and sources two companies, the court statement said. UBS is scrambling to calm its Chinese
with knowledge of the case said. Chinese media and the Wall Street clients after a recent comment by one of its
A statement on the Shanghai No.1 Journal reported that it was Cosco economists was interpreted by some as a
INTERMEDIATEû0EOPLESû#OURTSûOFlCIALû racist slur.
WeChat account only referred to the UBS has asked its senior client advisers
banker by his surname, Sang, but a to call or even meet private banking
separate court document seen by Reuters customers from China who have raised
gave his full name as Sang Renzhao. These efforts come after some concerns about the comment.
The documents said that Sang shared industry participants rejected A reference to Chinese pigs was made in
information with two associates about a UBS’s apology last week for ANûINmATIONûANALYSISûPODCASTûBYû5"3ûGLOBALû
#HINESEûSHIPPINGûlRMSûACQUISITIONûOFûAû chief economist Paul Donovan, who has
Hong Kong company. It did not name the
Donovan’s remarks, criticising it since been put on a leave of absence as
companies. for a lack of cultural awareness the bank reviews the matter. The podcast
Sang, who could not be reached for and calling for a boycott. has been taken down. The bank has also
comment, denied any wrongdoing and apologised for any offence caused.
wanted to appeal against the verdict, the These efforts come after some industry
court said in its statement, which did not participants rejected UBS’s apology last
name the M&A deal involved. week for Donovan’s remarks, criticising it
Two people with knowledge of the case Shipping’s US$6.3bn acquisition of Orient for a lack of cultural awareness and calling
said that Sang was a former vice president Overseas Container Line on which UBS was for a boycott.
in the investment banking department at an adviser. UBS reportedly lost a lead role on a
UBS Securities, the Swiss bank’s Chinese Sang’s associates, whose surnames were US dollar bond deal for China Railway
brokerage unit. given as Wang and Chen, also received Construction Corporation, while Haitong
A spokesman for UBS in Hong Kong CUSTODIALûSENTENCESûANDûlNESû#HENûWANTEDû International has frozen ties with the bank.
declined to comment. to appeal against the verdict, the court’s CHENG LENG, ALUN JOHN
Chinese banks SPDB, whose ownership structure, limited

US presence and alleged conduct with other
investigators’ demands that they hand over
records connected to the alleged movement
found in banks matched with the details disclosed in

the court rulings.
of tens of millions of dollars in violation of
international sanctions on North Korea.
contempt in US SPDB does not have US branch operations

but maintains accounts in the country to
The publicly released court document
did not name the banks, the Hong Kong
handle dollar transactions, the report said, company or the North Korean entity at that
A US judge has found three major adding the subpoena battle will go before time.
Chinese banks in contempt for refusing a federal appeals court in Washington on The subpoenas were issued in December
to comply with subpoenas in a probe into July 12. 2017 as part of a US investigation into
North Korean sanctions violations, the SPDB said in a statement that it will violations of sanctions targeting North
Washington Post reported, adding one of strictly abide by the relevant laws and Korea’s nuclear weapons programme
THEMûCOULDûLOSEûACCESSûTOûTHEû53ûlNANCIALû regulations. including money laundering and
system. CMB said last Tuesday it complies with contravention of the US Bank Secrecy Act.
4HEûBANKSûWEREûNOTûIDENTIlEDûBYûTHEû UN resolutions and Chinese laws and is “We ask our companies and overseas
judge but details in the ruling align with not involved in any investigation related to branches to abide by local regulations and
a 2017 civil forfeiture action against BANK possible violations of sanctions. laws and operate within the framework
OF COMMUNICATIONS, CHINA MERCHANTS BANK "O#OMû#HINASûlFTH LARGESTûBANKûSAIDû of law and cooperate with the local
and SHANGHAI PUDONG DEVELOPMENT BANK, the the case involved US courts seeking to JUDICIALûANDûLAWûENFORCEMENTûBODIESvû
newspaper reported. obtain customer information that is stored Geng Shuang, a spokesman at the Chinese
The US Justice Department at the time outside the US from Chinese commercial foreign ministry, said.
accused the banks of working with a Hong banks. “At the same time, we are against US
Kong company that allegedly laundered Last Tuesday, Shanghai-listed shares of so-called long-arm jurisdiction on Chinese
more than US$100m for North Korea’s CMB closed down 4.8% after being off 8.5% companies. We hope the US will step up
sanctioned Foreign Trade Bank, the paper earlier in the day, while SPDB declined 3.1% BILATERALûCOOPERATIONûONûlNANCEûWITHûOTHERû
said. and BoCom dropped 3.0%. COUNTRIESvû'ENGûSAIDûATûAûDAILYûBRIElNGûINû
The newspaper said the bank at risk of In May, a US district judge ordered Beijing.
losing access to US dollars appeared to be three Chinese banks to comply with US AISHWARYA NAIR, KANISHKA SINGH

[email protected]
Sebi tightens FTSE Russell as a major coup for Beijing.

The US-based company has since
rules on share adds A-shares to announced that it would raise the market cap
weighting of Chinese stocks in its emerging
pledges EM index MARKETSûINDEXûTOûûANDûCOMPLETEDûTHEûlRSTû

phase in May when it lifted the weighting to
10%.
India’s market regulator has reinforced FTSE RUSSELL has begun incorporating China Unlike MSCI, which has so far only
disclosure rules for when shares in a A-shares into its main emerging markets included large-cap Chinese stocks in its index,
company are pledged as collateral and index, giving global fund managers further &43%û2USSELLûHASûADDEDûAûMIXTUREûOFûLARGEû
tightened rules for mutual funds to try to incentive to buy into China’s stock markets. mid and small-cap securities to its index.
protect minority shareholders and retail The UK-based index provider, which is MSCI plans to add mid-cap Chinese stocks to
investors. OWNEDûBYûTHEû,ONDONû3TOCKû%XCHANGEû'ROUPû its index in November.
Controlling shareholders will have to said last Monday it had added 1,015 A-shares UBS analysts estimate that MSCI’s higher
disclose reasons for having pledged shares TOûTHEû&43%û%MERGINGû)NDEXûWITHûANûINITIALû weighting plus the inclusion of A-shares in
when combined pledges exceed 20% of the weighting of 5% of market capitalisation. &43%û2USSELLSûINDEXûCOULDûGENERATEûAROUNDû
total share capital in a company or 50% of 4HISûMARKSûTHEûlRSTûOFûTHREEûSTEPSûOUTLINEDû 53BNûINûFOREIGNûINVESTMENTûmOWSûINTOû
THEIRûTOTALûSHAREHOLDINGûINûTHEûlRMûTHEû in September last year, which will see the China.
SECURITIES AND EXCHANGE BOARD OF INDIA said last weighting of mainland Chinese stocks Still, investors are divided over whether
Thursday. increased to 25% by March 2020. At that level, inclusion has been rushed, citing concerns
Share pledges refer to the use of shares China A-shares will account for 5.36% of the in relation to Stock Connect, the primary
as collateral when investors are seeking to index, based on share price as of close on method for international investors to access
borrow money. When the total number of June 21. onshore China stocks, such as being unable
pledged shares rises, it increases the risk Rival index provider MSCI began adding to trade during public holidays in Hong Kong.
for other shareholders as the stock could Chinese securities to its benchmark emerging According to a survey conducted in the
fall heavily if lenders are forced to sell the markets index last year with an initial market third quarter of 2017 by the Asian Corporate
shares in the event of a default. cap weighting of 2.5%. Governance Association, whose members
Sebi has also set a cap on the royalty MSCI had declined for several years comprise asset managers such as BlackRock
paid by companies to their parents or to add China A-shares to its index, citing and Fidelity International, 48% of foreign
controlling shareholders and ordered weak corporate governance standards, investors said at the time that MSCI was
companies to get shareholder approval REGULARûSHAREûSUSPENSIONSûANDûDIFlCULTIESûINû wrong to add A-shares to its index.
for royalty payments above the cap. It repatriating funds so the inclusion was seen THOMAS BLOTT
said royalty payments may be considered
material if the transactions exceed 5% of
the annual consolidated turnover of the
listed entity. SGX reshuffles with Deutsche hire
In addition, Sebi has tightened the risk
management framework and prudential SINGAPORE EXCHANGE is rolling out a major The new GSO unit will combine the
norms governing investments in debt revamp of its organisation structure this equities and debt capital markets team
and money market instruments for liquid week as part of chief executive Loh Boon WITHû3'8SûNINEûINTERNATIONALûOFlCESûANDû
mutual funds in an attempt to protect retail Chye’s multi-asset strategy. specialist sales team.
investors. The new structure, comprising four Michael Syn, currently head of derivatives,
The regulator has made it mandatory business and client units, was unveiled last will take over as head of equities,
for all liquid schemes to have at least 20% Wednesday and takes effect on July 1. comprising both cash equities and equity
in liquid assets such as cash, government The changes include the creation of a derivatives. Non-equities derivatives will be
bonds, treasury bills or repo in government COMBINEDûlXEDûINCOMEûCURRENCIESûANDû part of FICC.
securities. commodities business and client unit, The market data and connectivity unit
Authorities have been concerned about which will be led by Lee Beng Hong. is renamed Data, Connectivity and Indices
the liquidity issues being faced by some Lee will join on August 1 from Deutsche and Ng Kin Yee will continue to lead it.
NBFCs and have made efforts to mitigate Bank, where he was most recently head of Lee, Sutat, Syn and Ng will all report to
any contagion risks. THEûlNANCINGûANDûSOLUTIONSûGROUPûFORû.ORTHû Loh.
The collapse of Infrastructure Leasing and Asia. Separately, SGX president Muthukrishnan
Financial Services last year triggered a series Lee will have oversight of the Baltic Ramaswami will retire on October 1. He has
a defaults across the shadow banking sector %XCHANGEûTHEû,ONDON BASEDûFREIGHTûINDEXû been with the exchange for the last 12 years.
as borrowing costs for the sector surged provider acquired by SGX in 2016, and Since Loh - also a former Deutsche Bank
forcing them to turn to mutual funds. %NERGYû-ARKETû#OMPANYûWHICHûOPERATESû EXECUTIVEû ûTOOKûOVERûASû3'8Sû#%/ûINûû
The regulator has therefore also Singapore’s wholesale electricity market the exchange has increasingly sought to
mandated funds to invest only in listed and was bought out by SGX in 2014. champion itself as a multi-asset exchange,
non-convertible debentures and limited Other changes include the creation of a in part, according to observers, because it
fresh investments in commercial paper to new global sales and origination unit under struggles to compete with Hong Kong and
only listed paper. the leadership of Chew Sutat, who currently the US as a listing venue.
SWATI BHAT HEADSûEQUITIESûANDûlXEDûINCOME S ANURADHA

People
& Markets
York State Department of Financial Services

IN BRIEF agreed to release all claims against MUFG Bank
Goldman Sachs Hong Kong Monetary Authority and said it would not challenge the validity
1MDB criminal case in Malaysia delayed Onshore RMB hedging for Stock Connect of the licences issued by the US Office of the
Comptroller of the Currency to MUFG Bank in
Malaysia’s criminal case against GOLDMAN SACHS Investors trading Chinese shares through the 2017.
will be postponed to September, a court ruled last Stock Connect schemes will for the first time be In return, MUFG Bank released all of its claims
Monday after defence lawyers asked for more time able to use the onshore renminbi exchange rate against the DFS and agreed to make a US$33m
to receive instructions from their clients. to hedge their foreign exchange exposure. settlement payment to the New York state
Prosecutors have issued summonses to three The HONG KONG MONETARY AUTHORITY said on June regulator.
Goldman units in the UK, Hong Kong and 21 that the additional hedging arrangements “MUFG Bank is pleased to have reached a
Singapore, requiring them to respond to criminal would help investors seeking to offset the foreign settlement that resolves all of its disputes with
charges involving US$6.5bn of 1MDB bonds that exchange risk as more Chinese A-shares are DFS, and allows the bank to move forward with
the bank had arranged for the scandal-stricken included in global indices. its simplified regulatory structure in the United
state investment fund. A spokesperson for the HKMA told IFR that States,” the bank said in its statement last
The US Department of Justice estimates US$4.5bn investors will be able to start trading onshore Tuesday.
was misappropriated from 1MDB between 2009 RMB, or CNY, as soon as their Hong Kong-based
and 2014, including some of the funds that brokers have put the necessary controls and Westpac Banking Corporation
Goldman helped raise. systems in place. Report outlines culture failings
The bank has consistently denied wrongdoing. Currently, investors trading under the
Last Monday, a lawyer for the bank said that northbound trading links of both the Shanghai WESTPAC BANKING CORPORATION’s culture can slow
its Hong Kong subsidiary had only received and Shenzhen Stock Connect trading schemes decision-making and dilute accountability,
its summons in the past week, while another settle any transactions in offshore RMB, or CNH. chairman Lindsay Maxsted said last Monday,
summons issued to the bank’s Singapore unit was Some investors have expressed concerns citing an internal report.
incomplete, with just three out of four charges about whether there is sufficient CNH liquidity, The self-assessment also found the approach
served. particularly as more investors pile into the of Australia’s second-biggest lender to cultural
The court fixed September 30 for case A-share market following last year’s inclusion of issues was “less mature” than its approach to
management. mainland Chinese securities in MSCI’s emerging managing financial risks, Maxsted said in a letter
Last December, Malaysian prosecutors filed markets index. to shareholders.
charges against the three Goldman units for MSCI has since begun increasing the market The report into culture, governance and
misleading investors by making untrue statements capitalisation weighting of A-shares in its accountability was requested by Australia’s
and omitting key facts in relation to bond issues benchmark index, while rival FTSE Russell has financial regulator after the country’s Royal
that the bank had arranged for 1MDB. also added A-shares to its FTSE Emerging Index. Commission inquiry exposed widespread
The bank says certain members of the former misconduct in the banking sector.
Malaysian government and 1MDB lied to it about MUFG Bank The damaging revelations led Westpac
how proceeds from the bond sales would be used. Settlement with NY banking regulator shareholders to vote against the board’s executive
Malaysia has said it was seeking up to US$7.5bn remuneration plans in late 2018.
in reparations from Goldman over its dealings with MUFG BANK, the commercial banking subsidiary Maxsted said the bank would make changes to its
1MDB. of Mitsubishi UFJ Financial Group, said last next remuneration proposal expected later this
According to Bloomberg, Malaysian Prime Minister Tuesday it had reached a settlement with the year.
Mahathir Mohamad said last week that Goldman New York banking regulator following a dispute Under Australian corporate rules, if more than
Sachs had offered Malaysia M$1bn (US$241m) as after it switched its state branches to federal a quarter of shareholders vote against a pay
compensation for the role it played in raising funds oversight. proposal for two years running, they can call for
for 1MDB. Under the terms of the agreement, the New the board to be removed.

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COUNTRY REPORT
Australia 20 Cambodia 22 China 22 Hong Kong 32 India 33 Indonesia 35 Japan 35 Laos 36 Macau 37
Malaysia 37 New Zealand 38 Philippines 39 Singapore 40 South Korea 42 Taiwan 43 Thailand 44 Vietnam 44
added A$100m to its 3.3% May 25 2029 the Metro Finance 2018-1 Trust, which was
bond, increasing the outstanding amount a hybrid of private placement and public
AUSTRALIA to A$350m. term deals.
The reopening, via joint lead managers It followed this with a second auto and
Deutsche Bank and TD Securities, priced at equipment-backed ABS in November, the
DEBT CAPITAL MARKETS 112.302 for a yield of 1.9275%, 46bp wide A$300m Metro 2018-2.
of asset swaps and 57.75bp over the April Metro Finance was established in 2011
› STANCHART KANGAROO NETS A$1BN 2029 ACGB. as a commercial auto/equipment lender.
The following day, German government- It targets prime borrowers for small-ticket
STANDARD CHARTERED (A2/BBB+/A) became guaranteed agency KFW increased its 4.0% auto and equipment assets in low volatility
the second UK holding company to issue February 27 2025s by A$100m, taking the industries.
Kangaroo bonds in six days with last size of the issue to A$1.95bn.
Tuesday’s A$1bn (US$696m) two-part sale of TD Securities was sole lead manager for
six-year non-call five Kangaroo bonds. the tap, which priced at 113.529 to yield SYNDICATED LOANS
A A$400m floating-rate note priced inside 1.4925%, 38bp and 41bp over asset swaps
initial 195bp area and revised 190bp area and the April 2025 ACGB, respectively. › HEALTHSCOPE TAPS LIMITED SELLDOWN
guidance at three-month BBSW plus 185bp.
A A$600m 2.9% fixed-rate tranche priced › QIC TO REDEEM A$175M MTN A limited selldown has been launched for
at 99.838, to yield 2.935%, equivalent to the A$2.15bn (US$1.52bn) multi-tranche
asset swaps plus 185bp. QIC SHOPPING CENTRE FUND, rated A– (S&P), loan supporting the leveraged buyout of
CBA, Nomura, Standard Chartered and has said it will exercise the early August Australian hospital operator HEALTHSCOPE
Westpac were joint bookrunners. 22 2019 call option on its A$175m 5.5% after a host of banks joined in senior
Asian investors bought 51% of the FRN November 20 2029 MTN, when it will syndication.
with Australia and New Zealand taking 48% redeem the notes at par. A handful of banks are now being invited
and EMEA 1%. NAB and Westpac were joint lead to join with commitments of A$50m or
Asset managers were allotted 39%, banks managers for the original sale in November above and offered fees of 100bp. The
35%, middle market 10%, private banks 9% 2013. deadline for responses is July 24.
and trading 7%. More than 15 lenders committed to the
Antipodean acounts took 62% of the five-year borrowing in the senior phase and
fixed-rate note, Asia 35% and EMEA 3%. STRUCTURED FINANCE were substituted into the deal earlier this
Asset managers received 67%, banks month.
10%, trading 8%, insurance companies and › METRO SETS AUTO ABS GUIDANCE The mandated lead arrangers,
official institutions 7%, private banks 7% bookrunners and underwriters are Bank of
and middle market 1%. Consumer lender METRO FINANCE has released America Merrill Lynch, Barclays, ING Bank, JP
On June 19 fellow UK holding company initial guidance for a A$300m (US$209m) Morgan, MUFG, National Australia Bank and
Barclays (Baa3/BBB/A) raised A$800m from a auto and equipment ABS offering, METRO Sumitomo Mitsui Banking Corp.
triple-tranche Kangaroo sale. 2019-1. Canadian investment firm Brookfield
This comprised a A$200m five-year NAB is arranger and sole lead manager Capital Partners, the sponsor of the LBO,
floating-rate note priced at three-month for the transaction, expected to launch and announced on June 6 that it had completed
BBSW plus 215bp alongside A$300m 3.25% price in the week beginning July 1. the acquisition of Healthscope for
five-year and A$300m 4.0% 10-year fixed- For the A$90m Class AS and A$151.5m approximately US$4.1bn.
rate notes priced 215bp and 247bp wide of Class Al notes, both with 19.5% credit Drawdown of a A$360m amortising term
asset swaps. support and respective weighted-average loan A tranche and a A$1.44bn bullet piece
lives of 0.7 and 2.6-years, price talk is one- has already taken place.
› BOQ TAPS 2023 FRN FOR A$50M month BBSW plus 90bp area and 130bp The five-year loan also comprises a
area. A$250m revolving credit facility and a
BANK OF QUEENSLAND (A3/BBB+/A-) tapped its For the A$22.5m Class B, A$10.5m Class A$100m acquisition and capex facility.
February 3 2023 senior unsecured floating C, A$6m Class D, A$9m Class E and A$3.3m The interest margins are 400bp over
rate note for A$50m last Tuesday, bringing Class F notes, all with 2.8-year WALs, BBSY for the amortising term loan and the
the total outstanding to A$600m. guidance is 225bp area, 270bp area, low revolver and 425bp over BBSY for the bullet
The reopening, via sole lead manager 300bp area, mid 500bp area and 700bp area piece and the capex facility.
Westpac, priced at 100.31 to give a reoffer over one-month BBSW. In senior syndication, banks had been
spread of three-month BBSW plus 97bp. Credit support for the Class B to F invited to join as MLAs with take-and-hold
notes is 12%, 8.5%, 6.5%, 3.5% and 2.4%, commitments of A$125m or above, as lead
› EIB AND KFW TAP FOR A$200M respectively. arrangers with A$100m–$125m and co-
The A$3.45m Class GA and A$3.75m arrangers with A$75m–$100m.
Two triple A rated European SSAs tapped Class GB notes have been pre-placed. The borrowing represents a leverage
existing Kangaroo lines last week to raise a Metro Finance sold an inaugural A$288m multiple of 5.20–5.31 times based on
combined A$200m. six-tranche prime commercial auto and Healthscope’s Ebitda of A$405m–$413m
On Thursday, EUROPEAN INVESTMENT BANK equipment ABS offering in June last year, forecast for its fiscal year ending June 30 2019.

COUNTRY REPORT AUSTRALIA
To fund the LBO, Brookfield will also 3), Hong Kong (July 4), Taipei (July 5) and to 70bp based on the company’s S&P rating.
use US$1bn of equity and US$1.7bn from Sydney (July 8). Banks were invited to join as MLAs with
the sale and long-term leaseback of 22 Proceeds are for refinancing debt. commitments of A$50m or more or as co-
wholly owned freehold hospital properties, Charter Hall Prime Office Fund invests in arrangers with A$25m–$49m for upfront
according to its January 31 statement. office buildings located in major Australian fees of 55bp (for tranche A) and 70bp (for
Healthscope is Australia’s second-largest cities. Its A$5.3bn office portfolio includes tranche B), respectively.
operator of private hospitals and a leading investment-grade properties, with 98% QIC Private Capital, the trustee for QIC
provider of pathology services in New of income generated from government, Finance (Property Fund), is the guarantor.
Zealand. investment grade or nationally recognised Funds are for general corporate purposes.
tenants, according to its website. Signing was on Monday.
› CHARTER HALL TAPS DEBUT LOAN The fund is one of several that are For full allocations, see www.ifrasia.com.
part of ASX-listed Charter Hall Group,
Charter Hall Prime Office Fund is making which has A$28.4bn of high quality, long
its syndicated loan market debut with a leased property across the office, retail, EQUITY CAPITAL MARKETS
A$300m seven-year loan. industrial and social infrastructure sectors
Sumitomo Mitsui Banking Corp is the sole in Australia. › RETAIL ZOO EYES ASX IPO THIS YEAR
mandated lead arranger and bookrunner
of the unsecured deal, which has been › QIC FINANCE SIGNS INCREASED LOAN Private equity-owned food franchise
launched into general syndication. business RETAIL ZOO is planning an ASX
CPOF FINANCE, a financing vehicle of has signed a
QIC FINANCE (PROPERTY FUND) listing that could raise approximately
Charter Hall Prime Office Fund, is the A$400m dual-tranche loan with 14 lenders. A$250m–$400m (US$175m–$280m) this
borrower. ANZ, Commonwealth Bank of Australia and year, according to people with knowledge
The interest margin is tied to a ratings MUFG were the mandated lead arrangers of the matter.
grid with the opening margin at 165bp over and bookrunners of the transaction, which It is running a pre-deal roadshow and
BBSY based on the unlisted fund’s current was launched at a A$300m size in early expects to launch the deal in September or
rating of Triple B. May. October, two of the people said.
Banks are invited to join as MLAs with The deal comprises a A$150m 5.5-year It has mandated Citigroup, Goldman Sachs
commitments of A$70m or above or co- revolving credit tranche A and a A$250m and UBS to work on the IPO.
arrangers with A$50m–$70m for fees of seven-year term loan tranche B. In 2014, US-based Bain Capital bought
70bp. Lead managers joining with A$25m– The deal offers an interest margin Retail Zoo from Riverside Company for an
$50m earn fees of 65bp. ranging from 72bp to 105bp over BBSY for undisclosed amount.
Commitments are due by July 26. tranche A and from 140bp to 185bp for The business operates four brands, Boost
Roadshows will be held in Singapore (July tranche B, and a line fee ranging from 48bp Juice Bars, Salsa’s Fresh Mex Grill, Cibo
Four more join REIT fundraising spree

Equities Drop in bond yields drives investor demand for property trusts
Four Australian real estate investment trusts between 5.4% and 6.2%. of A$3.97, a 4.2% discount to the pre-deal
raised a combined A$765m (US$536m) last REITs are benefiting from expectations distribution-adjusted close. Proceeds will
week, adding fuel to a fundraising rush that of further easing in the US, according to be used to acquire a modern office building
plays on investor demand for high-yielding another banker. in Sydney for A$50m while maintaining
instruments. However, the first banker expects the scale gearing near the low point of a 35%–45%
According to a recent JP Morgan research of fundraising to be less in the second half, target range. JP Morgan was the sole
report, this year has already been the best though more deals are expected. underwriter.
year for REIT fundraising in Australia since Last week, CROMWELL PROPERTY GROUP raised National Storage REIT offered 99m
2010. A$375m from an underwritten placement, new shares at a fixed price of A$1.71, a 7%
“Property trusts accounted for about drawing on strong support from new and discount to the pre-deal close of A$1.84 on
40% of the equity issuance so far this year, existing institutional investors. The shares June 24. Proceeds will be used to reduce
compared to 6% in 2018,” a Sydney-based were priced at A$1.15, an 8.3% discount to gearing and provide headroom for future
ECM banker reckoned. the June 25 pre-deal close of A$1.255. growth. JP Morgan and Morgan Stanley were
The banker said low bond yields have The company intends to use the proceeds the lead managers.
been driving huge demand for high-dividend to repay bank debt and provide balance CENTURIA INDUSTRIAL REIT joined the party
equities, giving property companies the sheet flexibility to fund potential acquisitions. later in the week to raise A$70m from a
opportunity to raise funds for acquisitions. Goldman Sachs and UBS were the joint lead placement, offering 23m new units at an
The yield on the benchmark 10-year managers issue price of A$3.05, a 4.3% discount to
Commonwealth of Australia bond has fallen GROWTHPOINT PROPERTIES AUSTRALIA and the pre-deal close of A$3.19. Proceeds will
almost a full point this year to 1.33% from NATIONAL STORAGE REIT respectively raised be used to fund the acquisition of three
2.32%. A$150m and A$170m from placements. industrial assets. Moelis Australia Advisory
By comparison, the four REITs that raised Growthpoint sold 37.8m new shares, or and UBS were the lead managers.
money last week offer dividend yields of 5.2% of the issued capital, at an issue price CANDY CHAN

Espresso and Hatch Chicken Shop, and has under an exchange offer. Financial and Kaisa Securities on the tap.
more than 400 stores in Australia and nine The Hong Kong-listed Chinese real estate Founder Securities (Hong Kong) Capital was a
international markets, according to the company said the new notes will have a joint lead manager.
company’s website. tenor of two years and eight months with a
The company did not respond to an put option after one year and eight months. › KWG GROUP TURNS ON TAP
email seeking comment. The minimum coupon rate for the new
notes is 13.75% and the minimum yield to Property developer KWG GROUP HOLDINGS last
put is 15.00%. Tuesday tapped its US$400m 5.875% senior
Under the exchange offer, for each notes due November 10 2024 for a further
US$1,000 in principal amount of the US$225m at a reoffer price of 91.49 to yield
CAMBODIA validly tendered 2020s, holders will receive 7.85%.
US$1,000 in aggregate principal amount of Final guidance was 7.90%, plus or minus
the new notes, accrued interest, cash in lieu 5bp.
SYNDICATED LOANS of any fractional amount of new notes, plus The notes are rated BB– by Fitch and are
a cash consideration of US$26.25. callable on November 10 2021.
› PRASAC PAYS SIMILAR PRICING Jiayuan may also conduct a concurrent Goldman Sachs managed the reopening.
new money issue of additional new notes Proceeds will be used to refinance debt.
PRASAC MICROFINANCE INSTITUTION has launched a for cash.
US$130m three-year term loan into senior The deadline for the exchange offer is › LIUZHOU DONGTONG PRICES US$40M TAP
syndication, with pricing similar to its loan July 4. The results and the pricing of the
completed a year ago. new notes are expected to be announced on LIUZHOU DONGTONG INVESTMENT AND DEVELOPMENT
Cathay United Bank and Taishin International or around July 5. GROUP, rated BB by Fitch, has priced a
Bank are the mandated lead arrangers, CLSA and Guotai Junan International are US$40m tap for its 7.00% senior unsecured
bookrunners and underwriters of the joint dealer managers for the exchange bonds due May 22 2022 at par, bringing the
financing, which has an unspecified offer, and DF King is information and total outstanding to US$180m.
greenshoe option and is expected to be exchange agent. Proceeds will be used for refinancing,
launched into general syndication in mid-July. Jiayuan on May 2 issued US$225m project construction and general corporate
The deal pays an interest margin of 11.375% senior secured notes due 2022 and purposes.
400bp over Libor and has an average life of used part of the proceeds in an exchange The original notes priced at par on May
2.45 years. for all of its outstanding US$160m 10% 15. The three-year Reg S notes are rated BB
Banks have been invited to join as MLAs senior notes due 2019. by Fitch.
with commitments of US$25m or more for Guotai Junan International, CCB International
a top-level all-in pricing of 424.49bp based › KAISA TAPS TWO LINES and CMBC Capital were joint global
on a participation fee of 60bp. coordinators on the reopening. They
Funds will be used as general working KAISA GROUP HOLDINGS, rated B1/B/B, last were also joint lead managers and joint
capital for business expansion. Monday tapped two bonds it priced earlier bookrunners with BoCom International, CRIC
Pricing on the loan is very close to this year for a combined US$500m. Securities and Prestige Securities.
Prasac Microfinance’s US$100m three-year A US$200m reopening of its US$350m The issuer is mainly responsible for the
borrowing completed in July last year with 11.25% senior bonds due April 9 2022 investment, financing and management
14 lenders. Cathay United Bank, Taichung priced at 102.926 to yield 10.00%, inside of Liudong New District’s infrastructure
Commercial Bank and Taiwan Cooperative initial guidance of 10.25% area. development projects in Guangxi province.
Bank were the MLABs of that financing, A US$300m increase of its US$400m Its businesses include primary land
which offered a top-level all-in pricing of 11.50% senior bonds due January 30 2023 development, public service facilities and
429.4bp over Libor via an interest margin of priced at 100.269 to yield 11.375%, inside property leasing.
425bp and an upfront fee of 12bp. initial guidance of 11.625% area.
The borrower – Cambodia’s largest When final guidance was announced, › MACROLINK MARKETS MORE BONDS
microfinance institution – evolved from a orders were over US$2bn, including
project sponsored by the European Union US$475m demand from the leads. MACROLINK HOLDING was reopening its
and three Cambodian ministries in 1995. Its Kaisa plans to use proceeds for debt US$168m 9.5% senior notes due January
shareholders are Bank of East Asia, Lanka refinancing. 4 2021 at final price guidance of 9.5% last
Orix Leasing and PRASAC Staff. The Hong Kong-listed Chinese property Friday.
company on April 1 priced the 11.25% Macrolink Global Development is
2022s at 99.690 to yield 11.375%. The three- the issuer and Macrolink Holding is the
year non-call two bonds are rated B2 by guarantor.
Moody’s. The tap was not priced yet at the time of
CHINA The 11.50% 2023s were priced at 99.567 writing. Proceeds will be used for general
to yield 11.625% on May 22. The 3.67-year corporate purposes.
non-call two bonds are rated B2/B (Moody/s/ The original notes were priced at par on
DEBT CAPITAL MARKETS Fitch). December 28. The two-year Reg S notes are
BOC International, China Citic Bank unrated.
› JIAYUAN INTL SETS OUT EXCHANGE International, Credit Suisse, Deutsche Bank Silk Road International, CMBC Capital
and Haitong International were joint global and CCB International are joint global
JIAYUAN INTERNATIONAL said it will exchange up coordinators as well as joint bookrunners coordinators as well as joint lead managers
to US$150m of its US$400m 12.0% senior and joint lead managers with Barclays, and joint bookrunner with CM Financial on
bonds due October 22 2020 for new notes Bocom International, CM Financial, HeungKong the reopening.

COUNTRY REPORT CHINA
Macrolink Holding is involved in cultural › REDSUN RISES AGAIN › SUNSHINE 100 CHINA PAYS 12.50% YIELD
tourism real estate development, chemical
engineering, petroleum trading, and non- REDSUN PROPERTIES GROUP, rated B/B (S&P/Fitch), SUNSHINE 100 CHINA HOLDINGS,rated CCC+/CCC+
ferrous metals in China. has priced US$250m 10.5% 3.25-year non- (S&P/Fitch), has sold US$200m 11.50% two-
call two senior unsecured bonds at 96.274 year senior unsecured notes at 98.277 to
› NEW TOWN FUNDS MODEL CITY to yield 11.875%, inside initial 12.125% area yield 12.50%, in line with initial guidance of
guidance. 12.50% area.
NEW TOWN CONSTRUCTION INVESTMENT (JIZHOU, The Reg S issue drew final orders of over The Hong Kong-listed Chinese real estate
TIANJIN)last Friday was marketing three-year US$1.1bn from 55 accounts, including company plans to use the proceeds from
US dollar credit-enhanced bonds at initial US$350m from the leads. the Reg S unrated issue for debt repayment
price guidance of 4.95% area. Asia took 95% of the notes and EMEA and general corporate purposes.
The proposed bonds are supported by an 5%. By investor type, 79% went to asset Haitong International and CCB International
irrevocable standby letter of credit issued managers and fund managers, 13% to were joint global coordinators as well as
by China Zheshang Bank’s Tianjin branch, banks, and 8% to private banks. joint lead managers and joint bookrunners
which is rated Ba1 by Moody’s. The notes have an expected B rating with CM Financial and TF International.
The benchmark Reg S issue was not yet from Fitch.
priced at the time of writing. The Hong Kong-listed Chinese real › TAIZHOU XINTAI DRAGS OUT DEAL
Proceeds will be used for general estate company plans to use proceeds for
corporate purposes and working capital. debt refinancing and general corporate TAIZHOU XINTAI GROUP took longer than
Haitong International and Inter Capital are purposes. expected to complete its US dollar bond
joint global coordinators and bookrunners. China International Capital Corp, Barclays, offering last week.
The issuer is designated by the Tianjin Credit Suisse, Guotai Junan International The local government funding vehicle
Development and Reform Commission to and CCB International were joint global priced a US$100m three-year senior
build the Jixian New City Model Town in coordinators as well as joint lead unsecured bond offering on Wednesday,
the Jixian New City in Tianjin. managers and joint bookrunners with having started bookbuilding on Monday.
BOC International, CMB International, Haitong The deal priced at 99.468 with a coupon
› JIAOZHOU BAY RAISES US$300M International, HeungKong Financial, HSBC and of 6.9% to yield 7.1%, unchanged from
Morgan Stanley. initial yield guidance.
QINGDAO JIAOZHOU BAY DEVELOPMENT GROUP last Redsun last tapped the offshore bond Xin Fu (BVI) will issue the unrated Reg
Tuesday priced US$300m three-year unrated market on April 9, when it priced US$300m S bonds with a guarantee from Taizhou
senior unsecured bonds at par to yield 5.80%, 9.95% three-year non-call two senior bonds Xintai.
inside initial guidance of 6.25% area. at 97.071 to yield 11.125%. Guotai Junan International and Industrial
Zhongtai International was sole global Bank Hong Kong branch were joint global
coordinator for the Reg S offering. It was › SHANDONG GUOHUI HIRES coordinators. They were also joint
also joint bookrunner with Bank of China, bookrunners with CMBC Capital, Bank of
Central Wealth Securities Investment, China Citic SHANDONG GUOHUI INVESTMENT, rated Baa2/BBB+ China and Fosun Hani.
Bank International, China Minsheng Banking (Moody’s/Fitch), has hired bookrunners China Securities International was
Corp Hong Kong branch, China Securities for a potential Reg S offering of US dollar initially listed as a global coordinator, but
International, Silk Road International, Industrial senior bonds, which are expected to have a was no longer in the syndicate when the
Bank Hong Kong branch and Tensant Securities. tenor of three years. final guidance was released.
The issuer provides infrastructure Central Wealth Securities, Zhongtai CMBC Capital was added after
construction services and is controlled by International, Bank of China, CICC and Standard bookbuilding began.
the Jiaozhou Economic and Technology Chartered are joint global coordinators. They Taizhou State-owned Assets Supervision
Development Zone Management are also joint bookrunners with BoCom and Administration Commission wholly
Committee in Shandong province. International, CMB Wing Lung Bank, China owns Taizhou Xintai, which is an
Minsheng Banking Corp Hong Kong branch, investment, financing and operating
› QINHAN NEW CITY GOES OFFSHORE Industrial Bank Hong Kong branch, China Citic vehicle for urban development in Taizhou
Bank International, China Everbright Bank Hong city, Jiangsu province, and the main
SHAANXI XIXIAN NEW AREA QINHAN NEW CITY Kong branch, ABC International and Silk Road investment, financing and operating entity
DEVELOPMENT AND CONSTRUCTION GROUP has made International. for the development of the Taizhou Medical
its offshore debut by issuing US$92m three- Indirectly wholly owned subsidiary High-tech Zone.
year senior unsecured notes at par to yield Guohui International (BVI) will issue the
7.5%, flat with price guidance. proposed bonds with a guarantee from › TSINGHUA UNI UNIT HITS ROAD
The Chinese local government financing Shandong Guohui Investments. The bonds
vehicle plans to use proceeds from the Reg have an expected rating of BBB+ by Fitch. TSINGHUA TONGFANG has mandated banks to
S unrated issue for working capital and Shandong Guohui is an investment arrange investor meetings in Hong Kong,
general corporate purposes. holding and servicing vehicle for state- Singapore and London, which started on
DBS Bank, CMBC Capital and Industrial owned enterprises and is a wholly June 27.
Bank Hong Kong branch were joint global owned subsidiary of the State-owned DBS, UBS, CMB International and
coordinators, joint lead managers and joint Assets Supervision and Administration Guotai Junan International are joint
bookrunners. Commission of Shandong province. global coordinators. They are also joint
Qinhan New City is one of the five units The company previously held non-deal bookrunners with Orient Securities (Hong
of Xixian New Area, which is between the investor meetings in Hong Kong on June 10 Kong), Cinda International and BoCom
cities of Xi’an and Xianyang in Shaanxi and Singapore on June 14. International.
province. A Reg S offering of US dollar unrated

senior unsecured bonds may follow, subject debt maturity profile as it has US dollar debt refinancing and offshore business
to market conditions. bonds maturing in 2019, 2021, 2022, 2023 operations.
Indirect wholly owned subsidiary and 2024, but until now none in 2020. HSBC, ICBC International, CLSA, CCB
Tongfang Aqua will issue the bonds, which Issuing offshore bonds of less than one International, Haitong International, CNCB
will have an unconditional and irrevocable year does not require a debt issuance quota HK Capital, ABC International, Bank of
guarantee from Tsinghua Tongfang. from China’s National Development and Communications, China Minsheng Banking Corp
Tsinghua Holdings has issued a letter of Reform Commission. Hong Kong branch, Industrial Bank Hong Kong
support for the guarantor. However, Wong said this was not branch and Huajin International were joint
Tsinghua University holds a 25.75% stake relevant. “We still have quota available and global coordinators, joint lead managers
in technology company Tsinghua Tongfang valid until the first quarter next year,” he and joint bookrunners.
through Tsinghua Holdings. said. Zhuhai Huafa Group, which is owned
by the Zhuhai municipal government,
› XINHU ZHONGBAO TAPS FOR US$50M › ZHONGYUAN YUZI PRICES BELOW IPG has businesses including financial
services, property development, industrial
XINHU ZHONGBAO, rated B2/B/B–, has reopened ZHONGYUAN YUZI INVESTMENT HOLDING GROUP last investment, sales and trading.
its 11% three-year non-put non-call two Monday priced a US$500m 4.25% five-year
notes due June 12 2022 for a tap of senior unsecured bond offering at 99.777 › CASIN GETS SBLC BACKING
US$50m, bringing the total outstanding to to yield 4.3%, well inside initial guidance of
US$160m. 4.8% area. CHONGQING CASIN GROUP has priced US$65m 34-
The Chinese property developer sold the Orders were over US$2.9bn from 70 month credit-enhanced notes at par to yield
additional bonds at par to yield 10.993%, in investors, with Asia taking 94% of the bonds 4%, flat with price guidance.
line with guidance. and EMEA 6%. The unrated Reg S senior unsecured
Xinhu (BVI) 2018 Holding is the issuer By investor type, banks booked 46%, fund bond is supported by a standby letter of
of the Reg S senior notes and its Shanghai- managers and asset managers a combined credit provided by China Merchants Bank
listed parent company is the guarantor. 36%, corporates and financial institutions Chongqing branch.
The issuer has a call option while 16%, and private banks 2%. Proceeds will be used for onshore debt
investors have a put option, both at par, on Zhongyuan Sincere Investment is the refinancing.
June 12 2021. Moreover, the issuer has an issuer and Zhongyuan Yuzi Investment ABC International was sole global
optional coupon step-up effective from June Holding Group is the guarantor. The coordinator on the transaction as well as a
12 2021. benchmark Reg S bonds have expected joint lead manager and joint bookrunner
Proceeds will be used for debt ratings of A3/A– (Moody’s/Fitch), in line with CMB International.
refinancing and working capital. with the guarantor. The issuer is a diversified conglomerate
UBS, China Citic Bank International Credit Suisse and China Citic Bank with real estate development and
and CNCB HK Capital were joint global International were joint global coordinators. infrastructure construction and operation
coordinators on the reopening. They were also joint bookrunners with as its core businesses.
Guotai Junan International, Silk Road China Minsheng Banking Corp Hong Kong
International, Admiralty Harbour Capital, branch, CMB International, ICBC International, › CGNPC PRICES GREEN BOND
Standard Chartered and Citigroup were Industrial Bank Hong Kong branch and China
listed as joint lead managers and joint Everbright Bank Hong Kong branch. CHINA GENERAL NUCLEAR POWER, rated A2/A–/A,
bookrunners when price guidance was The Department of Finance of Henan last Monday priced US$600m 2.75%
announced but were no longer there when Province owns Zhongyuan Yuzi, which is five-year senior unsecured Green bonds
the deal priced. the sole provincial-level financing vehicle at 99.689 to yield 2.817%, equivalent
A banker from one of the dropped banks for supporting affordable housing projects to Treasuries plus 105bp, inside initial
said it was mainly due to poor demand for in the province. guidance of 135bp area.
the issue. Final orders were over US$2.8bn from
The original notes were priced on June › ZHUHAI HUAFA PRINTS 106 accounts, with Asia taking 84% of the
4 at par to yield 11%, inside initial 11.25% Reg S notes and EMEA 16%. By investor
area guidance. The notes are rated B3/B– Conglomerate ZHUHAI HUAFA GROUP, rated type, banks booked 71%, asset managers
(Moody’s/S&P). BBB (Fitch), priced a US$300m five-year US and fund managers 21%, and private banks,
dollar senior unsecured note at par to yield corporates and others 8%.
› YUZHOU DOES PRIVATE PLACEMENT 4.25%. CGNPC International is the issuer and
Final guidance was 4.25%–4.30%, inside the state-owned parent is the guarantor.
YUZHOU PROPERTIES, rated Ba3/BB–/BB–, has initial price guidance of 4.55% area. The issue has expected ratings of A2/A
raised US$200m from a private placement Final orders were over US$1.4bn from 54 (Moody’s/Fitch).
of 364-day senior notes via sole bookrunner accounts, including US$930m of demand The nuclear power plant operator
Credit Suisse. from the leads. Asia took 99% of the Reg S plans to use proceeds for financing and/or
The 5.50% Reg S unrated notes were notes and Europe 1%. refinancing eligible green projects. CGNPC
priced at 99.762 to yield 5.75%. Settlement By investor type, fund managers and International is the group’s investment and
will be on July 2 and the maturity date is on public sector investors took 46%, banks financing platform for its non-nuclear clean
June 30 2020. 31%, and private banks and others 23%. and renewable power generation projects.
Proceeds will be used for debt Huafa 2019 I Co is the issuer and Zhuhai ICBC, Bank of China, BNP Paribas and Credit
refinancing and working capital. Huafa Group is the guarantor. Agricole were joint global coordinators.
Yuzhou’s chief financial officer, Jacky The bonds have an expected BBB rating They were also joint lead managers and
Wong Chin-hung, said the issue of short- from Fitch. joint bookrunners with China Construction
dated paper would optimise the company’s Proceeds will be used for offshore Bank (Asia), Agricultural Bank of China Hong

Kong branch, Bank of Communications, China inside initial guidance of 7.125% area. The Reg S issue has expected ratings of
Everbright Bank Hong Kong branch, CMB The deal drew final orders of over BBB/BBB (S&P/Fitch).
International, DBS Bank, OCBC Bank, Shanghai US$2.2bn from 173 accounts. Proceeds will be used for debt
Pudong Development Bank Hong Kong branch Asia took 89% of the notes and EMEA refinancing, and for general corporate and
and Standard Chartered Bank. 11%. By investor type, 64% went to fund operational purposes.
Credit Agricole and BNP Paribas were green managers and asset managers, 19% to banks Bank of China, Barclays and Citigroup were
structuring advisers. and financial institutions, 15% to private joint global coordinators as well as joint
banks, and 2% to corporates. bookrunners and joint lead managers with
› CHINA MOF TO OFFER DIM SUM IN MACAU Fortune Star (BVI) is the issuer and the BoCom International, ICBC Asia and ICBC
Hong Kong-listed parent company is the International.
The MINISTRY OF FINANCE OF THE PEOPLE’S REPUBLIC guarantor. Gansu Highway is the only enterprise
OF CHINA plans to offer Rmb2bn (US$291m) The Reg S issue has an expected BB rating authorised by the provincial government
Dim Sum bonds in Macau on July 4. from S&P. of Gansu, a north-central Chinese province,
Bank of China has been appointed sole lead Proceeds will be used for offshore debt to manage and operate transportation
underwriter. Bank of Communications and refinancing, including any payment for infrastructure projects there.
Banco Nacional Ultramarino will also work on a concurrent offer to purchase US$550m
the deal. 5.375% senior notes due 2020 and US$590m › GOHO ASSET MANAGEMENT RAISES
The MoF said the deal would help 5.50% senior notes due 2023, for working
promote the development of the bond capital, and for general corporate purposes. GOHO ASSET MANAGEMENT, rated B1 (stable) by
market in Macau and strengthen Under the tender offer, Fosun is offering Moody’s, last Wednesday priced US$100m
cooperation between Beijing and Macau’s US$1,011.5 per US$1,000 in principal two-year senior unsecured bonds at par to
special administrative region. amount of the 5.375% 2020s and par for the yield 9.5%, having tightened from initial
“The Dim Sum bills come at a good time 5.50% 2023s. price guidance of 10% area.
to commemorate the 20 years of Macau’s The maximum acceptance amount will Wholly owned subsidiary New
return to China,” said a banker on the be US$700m, which will be apportioned Momentum International is the issuer of
deal. “The offering may be available to into the 5.375% 2020s and 5.50% 2023s at the unrated Reg S notes and GoHo Asset is
retail investors apart from institutional Fosun’s sole and absolute discretion. the guarantor.
investors.” The deadline for the tender offer is July Proceeds will be used to refinance debt
Macau, formerly a Portuguese possession, 4. Settlement is on July 11. and expand the group’s business in China.
returned to China in December 1999. Research firm Lucror Analytics said CCB International, Haitong International,
The MoF plans to offer Rmb15bn of the pricing of Fosun’s 6.75% new bond CLSA and Guotai Junan International were
treasury bonds overseas this year. appeared cheap, especially compared with joint coordinators, joint lead managers and
The ministry sold Rmb5bn of Dim peers such as First Pacific and SoftBank as joint bookrunners.
Sum bills in Hong Kong on June 20. A well as Fosun’s existing 5.95% 2023s. GoHo was established in 2014 as the
Rmb3.95bn two-year tranche was set at Lucror said it was notable that Fosun was first local distressed asset management
2.95% and a Rmb1.05bn five-year tranche buying back the 5.50% 2023s only to replace company in Anhui province. China Orient
at 3.03%. them with the more expensive 6.75% new Asset Management owns a minority stake
bond, which is also due to mature in 2023. in GoHo.
› CHINA VAST FALLS SHORT OF TARGET Credit Suisse, BOC International, HSBC and Moody’s assigned GoHo its first corporate
Standard Chartered Bank were joint global family rating and issuer rating in April,
CHINA VAST INDUSTRIAL URBAN DEVELOPMENT, rated coordinators as well as joint lead managers while Pengyuan gave the company its first
B (S&P), has priced a US$180m debut bond, and joint bookrunners with Citigroup, Fosun rating of BB in February.
raising slightly less than its initial target of Hani and SPDB International on the new bond
up to US$200m. issue. › HANRUI TAPS FOR DEBT REPLACEMENT
The Hong Kong-listed Chinese industrial The four JGCs on the new bond issue are
town developer priced the two-year senior also dealer managers of the tender offer. DF JIANGSU HANRUI INVESTMENT HOLDINGS, rated B by
bonds at par to yield 13.00%, inside initial King is the information and tender agent. Fitch, has reopened its 7.95% three-year US
13.25% area guidance. dollar senior unsecured notes due April 29
Proceeds will be used for debt › GANSU HIGHWAY SELLS US$300M BOND 2022 for a tap of US$210m, bringing the
repayment, investment in development total outstanding to US$490m.
projects and general corporate purposes. GANSU PROVINCIAL HIGHWAY AVIATION TOURISM It sold the additional bonds at 99.9833%
The Reg S issue has an expected B– rating INVESTMENT GROUP, rated BBB/BBB (S&P/ to yield 7.95%.
from S&P. Fitch), has sold a US$300m bond after Hanrui Overseas Investment is the issuer
Nomura, Haitong International and Morgan drawing over US$2.1bn final orders from 70 and Hanrui Investment is the guarantor of
Stanley were joint global coordinators accounts, including US$550m demand from the Reg S unrated issue.
as well as joint lead managers and joint the leads. The local government financing vehicle
bookrunners with CCB International, CMB The 3.875% three-year senior unsecured of the Zhenjiang municipal government in
International and First Shanghai Securities. bond was priced at 99.790 to yield eastern coastal Jiangsu province plans to
3.95%, the tight end of final guidance of use proceeds for the replacement of debt.
› FOSUN PRINTS NEW BOND FOR OLD 3.95%–4.00%, and well inside inside initial Central Wealth Securities Investment was sole
guidance of 4.35% area. global coordinator. It was also joint lead
Chinese conglomerate FOSUN INTERNATIONAL, Asia took 98% of the notes and EMEA 2%. manager and joint bookrunner with Haitong
rated Ba2/BB (Moody’s/S&P), has priced By investor type, 56% went to asst managers Bank, Guoyuan Capital, Future Land Resources,
US$700m four-year non-call three senior and fund managers, 42% to banks and 2% to CMBC Capital, China Investment Securities
unsecured notes at par to yield 6.75%, well private banks. International, Huatai Financial Holdings (Hong

Kong) and Zhongtai International. 4.5% on January 28. Minsheng Bank issued on hold pending consent from the 2018
Hanrui Investment is responsible for Rmb40bn perps at 4.85% on May 31. lenders relating to the guarantee from
infrastructure construction and municipal China Forestry.
development in the Zhenjiang Economic › PBOC ISSUES DIM SUM China Forestry is still seeking approval
Development Zone. for two other consent exercises. The
The PEOPLE’S BANK OF CHINA sold Rmb30bn of first relates to a US$100m four-year loan
› HECHUAN LGFV PLANS OFFSHORE DEBUT Reg S Dim Sum bills in Hong Kong in two for China Forestry’s newly incorporated
tranches last Wednesday, but received financing vehicle China Forestry Treasury
CHONGQING HECHUAN CITY CONSTRUCTION INVESTMENT fewer subscriptions than its last offering Center. Far Eastern International Bank
(GROUP), rated BB+ (stable) by Fitch, has hired there. launched that deal in May.
banks for a proposed debut offering of US A one-month Rmb20bn tranche was The second consent exercise is for the
dollar senior unsecured bonds, subject to priced at 2.80% and a six-month Rmb10bn removal of the clause in the 2018 loan that
market conditions. portion at 2.82%. restricts China Forestry Group’s guarantees
Tensant Securities, DBS Bank, SPDB The central bank’s fourth offering on any new debt.
International, China Citic Bank International on the bond tendering platform of the China Forestry Group, the guarantor for
and Industrial Bank Hong Kong branch are Hong Kong Monetary Authority’s Central the 2018 facility, cannot provide guarantees
joint global coordinators on the Reg S issue. Moneymarkets Unit drew orders of more for new debt facilities, unless approved by
They are also joint lead managers and joint than Rmb85bn from commercial banks, two-thirds of the 2018 lenders by value.
bookrunners with Sinolink Securities (HK), funds and central banks. As of June 4, only 15% and 12% of the
Huatai Financial Holdings (Hong Kong) and But the new issue was only 2.85 times 2018 syndicate by value had agreed to
China Sky Securities. oversubscribed, compared with more than the first and second consent exercises,
The Chinese local government financing five times in the previous issue on May 15, respectively.
vehicle met investors in Hong Kong and when a Rmb10bn three-month tranche The FEIB-led deal pays an interest margin
Singapore last week. priced at par to yield 3.0% and a Rmb10bn of 195bp over Libor and offers banks
The proposed bonds have an expected one-year tranche priced at par to yield 3.1%. joining as MLABs an upfront fee of 80bp.
BB+ rating from Fitch. Dim Sum bills have been seen as The Mizuho-led loan paid a top-level
a policy tool for the PBoC to adjust all-in pricing of 200bp based on a margin of
› HUADIAN EYES GREEN BONDS offshore liquidity. When the central bank 185bp over Libor.
announced its plan to issue them in May China Forestry Group has domestic
CHINA HUADIAN CORPORATION, one of the and in June, the renminbi rose against the plantations and manages international
country’s major state-owned power US dollar in the spot market. forest resources.
companies, plans to issue Rmb3bn three- The PBoC has been issuing the bills since
year Green notes, according to a public November and has come back every three › LENDERS BACK IAMGOLD BIDDERS
filing on Shanghai Clearing House. months to issue Rmb2bn equally split into
Bookbuilding started last Friday and one-year and three-month tranches and roll Lenders are lining up to back two state-
settlement will be on July 2. the bills over. owned Chinese companies bidding for
Proceeds will be used for the pre- The new tenors may have made investors Canadian gold miner IAMGOLD.
payment of bank loans for hydropower uncertain about whether the central ZIJIN MINING GROUP and CHINA NATIONAL GOLD
projects. bank would roll the bills over again when GROUP are among the bidders for IAMGOLD,
Lianhe rates both the issuer and the they mature, said a forex analyst. “The which is expected to be sold at more than
bonds AAA. central bank may choose not to roll over C$2bn (US$1.5bn).
Postal Savings Bank of China is the lead if depreciation pressure persists,” said the IAMGOLD is listed on the Toronto
underwriter and lead bookrunner. Citic Bank analyst. and New York stock exchanges. It owns
is the joint underwriter. majority interests in gold mines in the
Republic of Suriname, Burkina Faso and
› HUA XIA BANK PRINTS PERP SYNDICATED LOANS Canada, and has joint ventures in Mali that
run two other mines.
HUA XIA BANK issued Rmb40bn perpetual › CHINA FORESTRY WINS REFI PLANK Hong Kong and Shanghai-listed Zijin is
bonds at 4.85% last Tuesday, within the RATEDû"AA"""¦"""¦ûANDûISûABOUTû
initial guidance of 4.6%–5.2%. State-owned CHINA FORESTRY GROUP CORP has owned by Minxi Xinghang State-owned
Proceeds will be used to strengthen the won lenders’ approval for one of three Assets Investments.
bank’s Additional Tier 1 capital. waivers that are key to its borrowing plans. China National Gold is rated Baa3/
Citic Securities is the lead underwriter On June 17, the company informed BBB (Moody’s/S&P) and is the only central
while BOC International, Haitong Securities, GF existing lenders on the HK$4bn (US$513m) government enterprise in the gold mining
Securities and CICC are joint underwriters. three-year debut offshore loan for China industry, according to the company’s
Golden Credit Rating has assigned a AAA Forestry International Resource signed in website.
rating to the issuer and the bonds. January 2018 that more than 66.6% of the In March, Zijin completed a compulsory
Hua Xia is the third bank to issue syndicate by value had agreed to allow it to acquisition of all remaining shares in
perpetual bonds after Bank of China and guarantee a new US$168m three-year term Canadian miner Nevsun Resources,
Minsheng Bank since the government loan for CFPC (SINGAPORE). according to a March 13 filing with the
allowed commercial banks to expand Mizuho Bank was the sole mandated lead Hong Kong Stock Exchange from Zijin.
funding channels for capital through arranger and bookrunner on the new This followed Zijin’s acquisition last
perpetual bonds, in addition to preference US$168m facility, which was launched in December of about 89.37% of Nevsun,
shares and convertibles. February and closed in May. Although the which owns interests in a copper-gold mine
Bank of China issued Rmb40bn perps at deal was signed on May 7, drawdown was in Serbia and a copper-zinc mine in Eritrea

and has exploration activities in Serbia and West China Cement, rated Ba3/B+/BB-, of the financing, which offers a top-level
Macedonia. Nevsun has been delisted from is based in Xi’an, the capital of China’s all-in pricing of 176.95bp based on an
the Toronto and New York stock exchanges. Shaanxi province. Anhui Conch Cement, average margin of 165bp over Libor and an
A US$840m five-year term loan from 11 one of the largest cement manufacturers average life of 2.93 years.
banks backed Zijin’s acquisition. China and sellers in China, is West China Xinjiang Goldwind is the guarantor,
Construction Bank was the mandated lead Cement’s second-largest shareholder with a while the borrowers are its subsidiaries
arranger and bookrunner of that financing 21.11% stake. PARQUE EOLICO LOMA BLANCA I, PARQUE EOLICO LOMA
for Gold Mountains (HK) International BLANCA II, PARQUE EOLICO LOMA BLANCA III, PARQUE
Mining, which carried a guarantee from › ZHENGZHOU COAL MINING CLOSES LOAN EOLICO LOMA BLANCA VI and PARQUES EOLICOS
Zijin. MIRAMAR.
In January 2018, IAMGOLD amended SEG AUTOMOTIVE GERMANY, a subsidiary of Phases I, II, III and VI of the Loma Blanca
and extended a US$250m revolving credit Shanghai and Hong Kong-listed Zhengzhou wind farm in Chubut, Patagonia, and
facility originally signed in January 2016. Coal Mining Machinery Group, has closed a the Miramar project in Buenos Aires are
The maturity date was extended by two €300m three-year facility. expected to have a total capacity of 350MW
years to March 2022 and amended to The borrowing is equally split between once completed. Goldwind acquired the
include an option to increase the deal by a an amortising term loan and a revolving five projects in May 2017 and is currently
further US$100m. credit facility, with the latter comprising developing them.
sub-limits for ancillary facilities which State-owned China Three Gorges owns
› WOLONG ELECTRIC TAPS THREE-YEAR lenders to the revolver could choose about 24% of Xinjiang Goldwind, which is
whether or not to provide. China’s largest wind turbine manufacturer.
Shanghai-listed electric motor Deutsche Bank Singapore branch was the sole
manufacturer WOLONG ELECTRIC GROUP is raising mandated lead arranger and bookrunner › THREE BACK AUSTRALIS LBO LOAN
a €150m (US$170m) three-year loan. of the financing, which offered a top-
Standard Chartered Bank is the mandated level all-in pricing of 255bp (for lenders Three banks have signed a five-year loan
lead arranger and bookrunner of the not joining the ancillary facilities) and of up to US$500m backing JOYVIO GROUP’s
transaction. 271bp (for lenders providing the ancillary takeover of Chile’s Australis Seafoods, with
A site visit and management presentation facilities), based on an interest margin of more expected to be substituted into the
have been scheduled for July 10 and July 11 240bp over Euribor and an average life of deal through an accession option.
in Shang Yu, Zhejiang province. 3.23 years. Bank of China is the mandated lead
Founded in 1984, Wolong Electric The parent is providing a guarantee for arranger and bookrunner of the
manufactures low and high voltage motors, the deal. transaction, while China Minsheng
and has production bases across Asia, Funds are for refinancing a €300m Banking Corp and Tai Fung Bank joined as
Europe and America. As at June 27, the facility signed in 2018 and for general participants.
company had a market capitalisation of corporate purposes. The three lenders have partially funded
approximately Rmb11bn (US$1.6bn). The borrower makes components for the loan, which offers an interest margin of
passenger and commercial vehicles. around 300bp over Libor.
› W CHINA CEMENT SETS OUT FOR US$150M Zhengzhou Coal Mining produces On February 28, Joyvio Group’s indirect
coal mining and excavating equipment subsidiary Beijing Joyvio Zhencheng
Hong Kong-listed WEST CHINA CEMENT has in China. The guarantor and China Technology agreed to buy about 95% of the
launched a US$150m three-year loan. Renaissance Capital Investment bought Chilean company. Joyvio Group is expected
Deutsche Bank Singapore branch is the 100% of SEG Automotive at the end of 2017 to issue a public tender offer for the
mandated lead arranger and bookrunner from Robert Bosch. remaining stake of about 5% of Australis
of the financing, which has a US$50m According to Zhengzhou Coal Mining’s Seafood within 10 days of fulfilling all
greenshoe option. 2018 annual report, the listed company’s conditions precedent for the tender offer as
The deal, which is equally split into a subsidiary SMG Acquisition Luxembourg stated in the sales and purchase agreement
term loan and a revolving credit, pays an Holdings signed a €300m financing with for the 95% stake. The acquisition of 100%
interest margin of 300bp over Libor and has Bank of China Luxembourg branch and of the target company will cost US$880m.
an average life of 2.75 years. BoC Frankfurt branch, guaranteed by The purchase of the 95% stake has not
MLAs with commitments of US$30m Zhengzhou Coal Mining. SMG Acquisition yet been completed.
and above earn a top-level all-in pricing Luxembourg Holdings indirectly owns a Joyvio, a wholly owned unit of Hong
of 345.45bp via a participation fee of company that completed the purchase of Kong-listed Legend Holdings, imports fresh
125bp, while lead arrangers coming in for SEG Automotive. fruit and seafood into China and produces
US$15m–$29m receive an all-in pricing of For full allocations, see www.ifrasia.com. liquor and snacks.
336.36bp via a 100bp fee.
The guarantors are West China Cement › FIVE JOIN GOLDWIND'S US$475M GREEN › LEGEND SEEKS US$125M CHEST
Co, Faithful Alliance and all present
and future offshore subsidiaries of the A US$475m three-year debut Green loan for LEGEND FINANCIAL LEASING (SHANGHAI), a unit of
borrower. Hong Kong and Shenzhen-listed Xinjiang state-owned Guangzhou Finance Holdings
Funds are for refinancing and general Goldwind Science & Technology has Group, has launched a US$125m-equivalent
corporate purposes. attracted a handful of banks in syndication. three-year term loan.
West China Cement’s previous loan A few more banks are still processing the Luso International Banking is the mandated
was a US$60m three-year financing in deal, which is currently oversubscribed. lead arranger and bookrunner of the
May 2008. Credit Suisse arranged the deal, Syndication is expected to close in mid-July. financing, which pays an interest margin of
which paid a fixed interest rate of 13.5%, Bank of China and Banco Santander are the 220bp over Libor or Hibor.
according to LPC data. mandated lead arrangers and bookrunners Banks have been invited to join as

MLABs with commitments of US$25m or EQUITY CAPITAL MARKETS in recent years through selling low-cost
HK$200m or more for a top-level all-in of lifestyle and consumer goods, including
300bp based on an upfront fee of 240bp. › BUDWEISER EYES BOOKBUILDING cosmetics, fashion, kitchenware and
MLAs with tickets of US$15m–$24m or stationery products.
HK$120m–$199m earn an all-in pricing of BUDWEISER BREWING COMPANY APAC is tentatively A spokesperson from Miniso said the
280bp through a fee of 180bp, while lead looking to open books for a jumbo Hong company has started IPO preparation since
arrangers committing US$10m–$14m or Kong IPO on Tuesday, depending on the January 2018 and it has not decided where
HK$80m–$119m receive an all-in of 260bp outcome of the G20 meeting, said people to list as yet.
based on a 120bp fee. close to the deal.
Guangzhou Finance Holdings is providing Bookbuilding, if launched this week, is › TASLY BIOPHARMA PLANS HK IPO
a letter of comfort. likely to run for more than a week, said the
Funds are for refinancing existing debt people. TASLY BIOPHARMACEUTICALS, a biopharma unit
and purchasing leasing assets. US President Donald Trump and Chinese of Shanghai-listed Tasly Pharmaceutical
Guangzhou Finance Holdings is a President Xi Jinping were scheduled to Group, plans to raise about US$500m from
unit of the Guangzhou city government meet at the G20 summit on June 28-29 in a Hong Kong IPO, according to people close
and invests mainly in financial service Osaka to relaunch trade talks. to the deal.
providers. Budweiser, the Asia-Pacific business of The company filed a listing application
Anheuser-Busch InBev, is expected to raise to the Stock Exchange of Hong Kong last
› GDS SEEKS RMB1BN CLUB LOAN about US$5bn–$7bn from its Hong Kong Monday.
IPO. If the deal comes to fruition, it would Founded in 2001, Tasly Biopharma has
Nasdaq-listed GDS HOLDINGS is seeking a be the city’s largest IPO so far this year. launched a drug to treat blood-clot induced
dual-tranche club loan of approximately JP Morgan and Morgan Stanley are the heart attacks, known as pro-UK, in China. It
Rmb1bn to back the development of a data sponsors. They are also global coordinators is also in the process of developing 13 other
centre near Beijing. and bookrunners with Bank of America drugs covering cardiovascular diseases,
The secured facility comprises a one-year Merrill Lynch and Deutsche Bank. The other oncology and autoimmune, and alimentary
tranche of around Rmb100m and a three- bookrunners are BNP Paribas, CICC, Citigroup tract and metabolism.
year portion of around Rmb900m, both and HSBC. The company posted a loss of Rmb1.67m
offering the same interest margin of 130% in 2018, compared to a loss of Rmb91m in
of the PBoC rate. › MINISO PLANS IPO 2017, on revenue of Rmb240m.
Terms are still to be finalised. Tasly Pharma owns a 92% stake in Tasly
Credit Agricole, HSBC and United Overseas MINISO, a Chinese budget store chain, is Biopharma.
Bank are expected to equally fund the loan considering raising at least US$500m from A-shares of Tasly Pharma have fallen
at the end of July. an IPO to fund growth, according to people 13.7% so far this year.
The Chinese data centre developer and with knowledge of the matter. CLSA is the sole sponsor.
operator recently entered into a framework The Japanese lifestyle retailer is in
agreement with the local government for discussion with potential advisers for the › TOPSPORTS WARMS UP FOR HK IPO
the acquisition of a 70,000-square-metre proposed offering, which could come next
greenfield site in Langfang, a city in Hebei year, said the people. TOPSPORTS INTERNATIONAL, the sportswear
province near Beijing and Tianjin. The first The company has not decided where to business of Chinese footwear retailer Belle
phase of development is targeted to be list, and Hong Kong and the US are among International, has filed for a Hong Kong
completed in 24 months. the options, the people said. IPO.
GDS had total short-term debt of Last October, Chinese internet giant The company plans to raise about
Rmb980m, against cash of Rmb6bn, as Tencent Holdings and private equity US$1bn from the IPO in the second half of
of March 31, according to its unaudited firm Hillhouse Capital made a strategic the year, IFR reported in early June.
financial results. investment of Rmb1bn (US$145m) in Bank of America Merrill Lynch and Morgan
Miniso. Stanley are the joint sponsors.
That was Miniso’s first external financing Belle’s sportswear unit distributes brands
RESTRUCTURING since it was founded in 2013. Miniso said such as Nike and Adidas.
in October the investment would expand The company operates a nationwide
› POLYMER MAKER EYES LIQUIDATION its footprint in the field of intelligent retail retail network, which included 8,343
and accelerate overseas market expansion. directly operated stores as of February 28
Shenzhen-listed KANGDE XIN COMPOSITE MATERIAL Miniso has over 3,600 stores in more 2019.
said a British Virgin Islands court had than 86 countries in Asia, Europe, Australia, According to Frost & Sullivan, Topsports
placed its subsidiary, Top Wise Excellence Africa, and America, according to its was the largest sportswear retailer in China
Enterprise, into provisional liquidation. website. Its medium-term strategic goal is by sales value in 2018 with a 15.9% market
John Ayres and Fok Hei Yu of FTI to enter 100 countries and regions by 2022, share.
Consulting were named provisional with annual revenue of Rmb100bn and For the year ended February 28 2019, the
liquidators in May, Kangde Xin said in a 10,000 stores worldwide. company posted a net profit of Rmb2.2bn,
filing to the Hong Kong exchange. Miniso’s global sales volume reached up 53% from a year earlier.
Kangde Xin, a manufacturer of high- US$2.5bn in 2018, up 39% from US$1.8bn In 2017, a consortium led by Hillhouse
polymer materials, has US$300m of bonds the previous year, according to its website. Capital and CDH Investments took Belle
due 2020 that were issued through Top Chinese entrepreneur Ye Guofu and private in a HK$53.1bn deal.
Wise. It missed a coupon payment on the Japanese designer Miyake Junya founded Hillhouse owns a stake of about 57% in
dollar bonds in March, following a default Miniso in 2013. Its efficient business model Belle and CDH around 12%. A group of Belle
on Rmb500m short-term notes in January. has allowed the company to expand rapidly managers own the remaining 31%.

› JS GLOBAL LIFESTYLE FILES FOR HK IPO 333m A-shares, has also been pushed back Equities Exchange and Quotations on June 19.
to July 18 from June 27 as the bank is China Securities is the sponsor.
JS GLOBAL LIFESTYLE, which owns Chinese selling the shares at a valuation higher than
kitchen appliances maker Joyoung and US its listed peers. › CITIC TO SELL CHINASEC STAKE
home appliances maker SharkNinja, has Its P/E ratio based on 2018 earnings is
filed for a Hong Kong IPO. 12.01, higher than the industry average of plans to sell its 5.58% stake
CITIC SECURITIES
The company plans to raise US$500m– 6.91 in the past month. in Hong Kong and Shanghai-listed CHINA
$800m in the second half of the year, IFR It originally planned to issue 1bn SECURITIES within the next six months,
reported on Monday. A-shares, or 25% of its enlarged capital. according to an announcement.
Credit Suisse, ICBC International and Morgan Proceeds are expected to be used to CiticSec, the fourth biggest shareholder
Stanley are the joint sponsors. replenish core Tier 1 capital. of China Securities, plans to offload all
The small-household-appliances maker Soochow Securities and China Merchants the 427m A-shares it holds in the rival
posted a net profit of US$112m in 2018, Securities are the joint sponsors of the deal. brokerage through a combination of
down 20% from a year earlier. centralised bidding and block trades.
Wang Xuning, chairman of JS Global, owns › CIMC VEHICLES OPENS BOOKS ON IPO CiticSec said it would sell up to 153m
a 50.1% stake in Shenzhen-listed Joyoung A-shares through centralised bidding and
together with other management through Chinese trailer maker CIMC VEHICLES has up to 306m A-shares through block trades.
Shanghai Lihong. They also own another opened books for a Hong Kong IPO of up to A lock-up linked to China Securities’
16.9% stake in Joyoung through Bilting. HK$2.14bn (US$274m). A-share IPO expired on June 20.
In 2017, Shanghai Lihong partnered The subsidiary of Shenzhen-listed China Based on the close of Rmb26.48 on June
with private equity firm CDH Investments International Marine Containers is selling 25, the stake is worth about Rmb11.3bn.
to acquire a 70% stake in SharkNinja in a 265m primary shares for a 15% free float China Securities plunged the 10% daily
US$1.6bn leveraged buyout. in an indicative range of HK$6.38–$8.08. maximum on June 26 in Shanghai on news
Joyoung is best known in China for its The range translates to a 2019 P/E of 7–9 of the planned sale. The H-share closed
soybean milk machines, but has been and market capitalisation of HK$11.2bn– down 1.4% at Rmb5.81.
expanding its product range to offset a $14.2bn. China Securities listed in Hong Kong in
decline in the market for its main product There is a greenshoe option of 15% of the December 2016 and returned home for a
in recent years. base deal. Shanghai listing last June.
US-based SharkNinja, which counts UK Two cornerstone investors have
firm Dyson among its main competitors, committed to purchase about US$85m of › CRM FILES FOR TECH BOARD IPO
makes vacuum cleaners under the Shark the deal, they are SAIC Motor Corporation
logo and kitchen appliances such as food (US$50m) and Shandong Linglong Tire Semiconductor manufacturer CHINA
processors and coffee makers under the (US$35m). RESOURCES MICROELECTRONICS, a subsidiary of
Ninja brand. CIMC Vehicles manufactures semi-trailers state-owned China Resources, has filed for a
and truck bodies. It will use the proceeds Shanghai tech board IPO to raise Rmb3bn.
› 360 FINANCE FOLLOW-ON RAISES US$96M to develop new manufacturing or assembly The company is the second red chip to
plants in the US and Europe, research file for a listing on the tech board following
Shareholders of Nasdaq-listed 360 FINANCE and development, repay the principal Ninebot.
have raised US$96m from an upsized and interest on bank borrowings as well Cayman Islands-domiciled CR
follow-on offering. as working capital and general corporate Microelectronics plans to sell up to 293m
About 9.6m secondary shares were sold purposes. A-shares, or 25% of its enlarged capital.
at US$10 each, representing a 9.6% discount CIMC Group controls 63.3% of the There is a 15% greenshoe.
to the company’s closing share price of company. Proceeds will be used for a sensor and
US$11.06 last Wednesday. The deal will price on July 3, and the power semiconductor construction project,
The offering originally comprised 7.5m shares are expected to be listed on July 11. to upgrade R&D facilities, for M&A, and to
shares, of which 95% were secondary shares Haitong International is the sole sponsor. replenish working capital.
and 5% primary. It is also joint global coordinator and lead CR Microelectronics was listed in Hong
About 50 investors participated in the manager with ICBC and Nomura. Kong for about seven years before it
deal, with most of the demand coming delisted in November 2011.
from two long-only funds and the rest from › CITIC PRESS COMPLETES SHENZHEN IPO CICC is the sponsor.
hedge funds and Chinese money, a person
close to the deal said. CITIC PRESS, a spin-off of Hong Kong-listed › CRSC GETS TECH BOARD REGISTRATION
The selling shareholders are Capricornus CITIC, has raised Rmb705m from a Shenzhen
Technology, Eoraptor Technology, IPO. CHINA RAILWAY SIGNAL AND COMMUNICATION has
Monocerus Technology and Unicorn The company sold 47.5m A-shares or completed the registration process for a
Technology. 25% of its enlarged capital at Rmb14.85 per Rmb10.5bn IPO, clearing the way for the
Citigroup, Morgan Stanley, Haitong share. biggest listing so far on Shanghai’s new
International and China Renaissance are the The book publisher and bookstores tech board.
bookrunners. operator lowered the fundraising target The China Securities Regulatory
from Rmb960m. Commission accepted the registration last
› BANK OF SUZHOU PRICES SHENZHEN IPO Proceeds will be used to invest in an Thursday, less than a week after CRSC
intellectual property rights platform, cleared a listing hearing with the Shanghai
BANK OF SUZHOU has priced its Rmb2.6bn upgrade bookstores, improve logistical and Stock Exchange on June 21.
Shenzhen IPO at Rmb7.86 per share. IT systems and replenish working capital. The company plans to offer 2.2bn
Bookbuilding for the deal, comprising The company delisted from the National A-shares, or up to 20% of its enlarged capital.

Proceeds will be used for intelligent › EBANG MAY SEEK US IPO up to HK$1.2bn from a Hong Kong IPO.
technology research, the construction of an The company is selling 333m primary
intelligent technology manufacturing base EBANG INTERNATIONAL, a Chinese bitcoin- shares, or 25% of the enlarged share
in the city of Changsha, IT services, and to mining gear maker, is considering a US IPO capital, in an indicative price range of
replenish working capital. after its application for a Hong Kong listing HK$3.07–$3.68. The range translates to a
CRSC’s H-shares changed hand at HK$5.82 lapsed, people with knowledge of the forecast 2019 P/E of 12.4–14.8 and gives IVD
on the morning of June 28, up 6.2%. matter have said. Medical a potential market capitalisation of
CICC is the sponsor of the deal and also The timing and the fundraising size have HK$4bn–$4.9bn.
joint bookrunner with Goldman Sachs Gao not been set as yet, said the people. There is a greenshoe option of 15% of the
Hua Securities, Citic Securities, BOC International Tight regulatory scrutiny in Hong Kong base deal.
(China), Morgan Stanley Huaxin Securities, and made it difficult for the deal to proceed The deal will price on July 5. Shares are
TF Securities. there, the people said. The same factor expected to be listed on July 12.
played a role in persuading fellow Chinese BOC International is the sole sponsor.
› DUO KICK OFF TECH BOARD LISTINGS bitcoin mining equipment makers Canaan
and BitMain Technologies to let Hong Kong › JINSHANG BANK LAUNCHES IPO
SUZHOU TZTEK TECHNOLOGY and YANTAI RAYTRON IPO applications lapse as well, IFR earlier
TECHNOLOGY will open books on July 2 for reported. JINSHANG BANK opened books last Friday for a
Shanghai tech board IPOs of a combined Ebang, which aimed to raise US$1bn Hong Kong IPO of up to HK$3.4bn.
Rmb1.45bn. from the Hong Kong listing, first filed to The company will sell 860m primary
The duo follow in the footsteps of flat the Stock Exchange of Hong Kong in June shares, or 15% of the enlarged share capital,
panel display maker SUZHOU HYC TECHNOLOGY, 2018, refiled the application in December in an indicative range of HK$3.80–$3.98 per
which conducted price consultation on but let it lapse on June 24. share.
June 24 for a Rmb981m tech board IPO. Canaan let its listing application of up The range represents a 2019 P/B of
TZTEK Tech, a manufacturer of machine to US$1bn lapse in November, six months 1.05–1.10.
vision and intelligent detecting and after it was filed. Bitmain, which filed in Three cornerstone investors have agreed
measuring instruments, was set to conduct September, let its application lapse in March. to take up a combined US$122m of the
price consultation on June 27 for its Canaan and Bitmain are now both shares. They are Shanxi Qinxin Energy
Rmb1bn IPO. planning to list in the US as early as this Group (US$50m), Taiyuan Industrial Park
The company plans to offer 48.4m year following a recent recovery in bitcoin Investment (US$50m) and Chenxing Real
A-shares, or 25% of its enlarged capital. prices, said people close to the deals. Estate Development (US$22m).
Haitong Securities is the sponsor of the Bitcoin surged above US$11,000 last There is a 15% greenshoe.
deal and will take up 5% of the IPO. The Monday, hitting its highest level in 15 The deal will price on July 11 and the
brokerage will charge the issuer 7% of the months. shares are due to begin trading on July 18.
fundraising amount, including a Rmb1m The size of the US IPOs of Canaan, The Shanxi-based bank posted a net
sponsor fee. However, the fee could be as Bitmain and Ebang is expected to largely profit of Rmb1.06bn for the first nine
low as Rmb21m if the fundraising amount depend on bitcoin prices at the time of months of 2018, up from Rmb1bn a year
is less than expected. listing. earlier.
Proceeds will be used to build an R&D Haitong International was the sole sponsor CCB International, CICC and CMB
centre and a factory and to replenish for Ebang. International are sponsors.
working capital.
Yantai Raytron Tech also conducted price › IMPRO COMPLETES HK IPO › LAUNCH TECH MULLS TECH BOARD IPO
consultation on June 27 for a Rmb450m
float. Citic Securities is the sponsor. IMPRO PRECISION INDUSTRIES has raised HK$999m Hong Kong-listed LAUNCH TECH is considering
The two companies had not announced from a Hong Kong IPO priced at HK$3.00 per applying to list on the Shanghai tech board.
the offer price of their IPOs at the time of share, according to people close to the deal. A board meeting will be held to discuss the
writing. The company sold 333m primary shares, proposal.
Meanwhile, the Shanghai Stock or 18.2% of the enlarged share capital, Shares of the company closed at HK$6.84
Exchange issued more supporting rules slightly below the mid-point of an indicative on June 25, giving it a market capitalisation
and guidelines on June 21 regarding the range of HK$2.80–$3.30 per share. of HK$2.5bn.
issuance and trading of the tech board. The final price represents a 2019 P/E of 8.1. Launch Tech provides products and
According to the rules, listing candidates China Structural Reform Fund is the services for the automotive aftermarket.
can start trading on the board within eight single cornerstone investor in the deal with It posted a net profit of Rmb59m in 2018,
trading days after they complete the IPO a US$28m investment. down 1.6% from a year earlier.
subscription. There is a 15% greenshoe.
This means that HYC Tech, which will BOC International and Morgan Stanley are › MANPOWERGROUP CHINA LAUNCHES IPO
wrap up its subscription on July 1, could the joint sponsors.
start trading on or before July 11. However, Impro makes machined components for MANPOWERGROUP GREATER CHINA, a subsidiary
market participants generally expect that a range of industrial customers. According of NYSE-listed ManpowerGroup, has
the SSE may group a number of companies to a regulatory filing, it posted a 2018 net opened books for a Hong Kong IPO of up to
to start trading together on the same day to profit of HK$411m on revenue of HK$3.7bn. HK$630m.
mark the opening of the board. The employment agency is selling
As of June 27, 141 companies had filed › IVD MEDICAL READIES HONG KONG IPO 50m shares, or 25% of the enlarged share
for a tech board IPO with a combined capital, in an indicative price range of
fundraising target of Rmb128.9bn, 21 of IVD MEDICAL HOLDING, a Chinese distributor of HK$9.90–$12.60. The range translates to
which have filed for the IPO registration. in-vitro diagnostics, is in the market to raise a 2019 P/E of 11.5–14.6 and a 2020 P/E of

9.2–11.7, as well as a market capitalisation ChiNext (25) IPOs on the same day. marketed terms. The coupon was set at 1%
of US$253m–$322m. Only two among them, SHENZHEN XINHAO compared with the 0.75%–1.25% range and
There is a greenshoe option of 15% of the PHOTOELECTRICITY TECHNOLOGY (Rmb1.8bn) the conversion premium was at 27.5% from
base size. and QINGDAO DOUBLE WHALE PHARMACEUTICAL the 25%–30% range.
The deal will price on July 3 and the (Rmb1.07bn), plan to raise over Rmb1bn Because the base deal has been upsized,
shares will be listed on July 10. from respective ChiNext and Shenzhen the overallotment option has increased
Huatai Financial is the sole sponsor. IPOs. from US$37.5m to US$45m.
The deal was about three times covered
› MONTAGE TO KICK OFF TECH BOARD IPO › TWO PASS CSRC IPO HEARINGS at the final size. Demand mainly came
from hedge funds and there was also
Chipmaker MONTAGE TECHNOLOGY is set to KEBODA TECHNOLOGY and BEAR ELECTRIC APPLIANCE, participation from outright and global long-
conduct price consultation on July 3 for a with a combined Rmb2.2bn fundraising only investors.
Rmb2.3bn Shanghai tech board IPO. target, have cleared the IPO hearings of the The company plans to use the proceeds
The pricing will be announced on July 4 China Securities Regulatory Commission. to pay the cost of capped call transactions
and books will open for a day on July 8. The Keboda Tech, an automotive lighting and the remainder for general corporate
company plans to offer 113m A-shares, or control system manufacturer, aims to raise purposes, including strategic investments
not less than 10% of its enlarged capital. Rmb1.09bn from the Shanghai IPO by in complementary businesses, the
Montage Tech, which delisted in the offering up to 40.1m A-shares or 10% of its development of an open platform and
US in 2014, posted a 2018 net profit of enlarged capital. potential share repurchases.
Rmb737m. The company will use the proceeds to Credit Suisse, Morgan Stanley and Citigroup
Proceeds will be used to research AI expand the production base, build an R&D were bookrunners.
and new generation chips and upgrade centre, and replenish working capital.
hardware. CICC is the sponsor. › LUYE PHARMA SELLS CB
Citic Securities is the sponsor and joint Bear Electric, a manufacturer and
bookrunner with CICC, China Securities, distributor of household electrical LUYE PHARMA GROUP, a Hong Kong-listed
Guotai Junan Securities and Zhongtai Securities. appliances, plans to list on the Shenzhen pharmaceutical company, last Monday
Stock Exchange to raise Rmb1.08bn. raised US$300m from a convertible bond to
› RUSH TO FILE FOR A-SHARE IPOS Dongguan Securities is the sponsor. repay other debt.
The five-year put-three CB was launched
Eighteen companies with a combined › ZHONGLIANG LAUNCHES IPO with a base size of US$250m and a same-
fundraising target of Rmb17bn have day upsize option of US$50m which was
filed to the China Securities Regulatory Chinese real estate developer ZHONGLIANG fully exercised.
Commission for proposed Shanghai IPOs HOLDINGS GROUP started bookbuilding last Pricing was in the middle of the
before the validity of their audited results Thursday for a Hong Kong IPO of up to marketed ranges.
expires on June 30. HK$3.5bn. The coupon was set at 1.5% versus the
The 18 candidates all filed draft IPO The company is selling 530m primary 1%–2% range and the yield-to-put/maturity
prospectuses on June 21. June 30 is the shares, or 15% of the enlarged share capital, at 3.75% from 3.25%–4.25%. The conversion
latest date by which companies can in an indicative range of HK$5.20–$6.68 per premium was set at 39.55% compared with
use their 2018 full-year results in IPO share. the 37.0%–42.1% range.
applications. Past that date they will have The range represents a 2019 P/E of 3.47– The put price is 107.07 while the
to provide earnings for a more recent 4.45 and a discount to NAV of 62.9%–70.8%. redemption price is 112.25.
quarter. There is a 15% greenshoe. The deal was more than three
SHAANXI BEIYUAN CHEMICAL INDUSTRY GROUP, a The deal will price on July 9 and the times covered with over 60 investors
plastics and resin manufacturer, plans to shares are due to begin trading on July 16. participating. There was a good mix of
raise Rmb3.44bn from an offer of 361m Based in the Yangtze River Delta Asian and European investors with half
A-shares or not less than 10% of its enlarged Economic Region, Zhongliang has of the demand from outright investors.
capital. projects in 124 cities across China, mainly Credit funds and healthcare specialists also
Proceeds will be used to build a factory, residential properties targeting first-time participated in the transaction. The top 10
to develop an IT platform, to build a R&D buyers and those who want an upgrade on investors took about 50% of the deal.
centre, replenish working capital and repay their current homes. Luye, a first-time issuer, adds variety to
bank debt. It posted a profit of Rmb2.5bn for last the equity-linked space in a year where
The biggest shareholder of the issuer is year, up five-fold from Rmb499m in 2017. Chinese tech CBs have taken centre stage
province-owned Shaanxi Coal and Chemical CCB International is the sponsor. The bank so far. Many investors want exposure to the
Industry Group which holds a 39.2% stake. is also joint global coordinator and joint China healthcare sector, said a person close
Huatai United Securities is the sponsor. bookrunner with Guotai Junan International. to the deal.
CHONGQING SIFANG NEW MATERIAL (Rmb1.52bn), There are five other joint bookrunners. The CB closed at 101.5 last Monday.
ZHEJIANG SANFER ELECTRIC (Rmb1.14bn), and The company plans to use the proceeds
ZHEJIANG HUAKANG PHARMACEUTICAL (Rmb1.09bn) › QUDIAN CB UPSIZED to repay indebtedness and for general
are three of the 18 companies with corporate purposes.
fundraising target over Rmb1bn. Central NYSE-listed Chinese online microlender Goldman Sachs and UBS were the joint
China Securities, Guosen Securities and Credit QUDIAN has raised US$300m from an upsized bookrunners.
Suisse Founder are their respective sponsors. seven-year put-three convertible bond. The credit spread was assumed at 350bp–
In addition, another 37 companies joined The deal was increased from US$250m to 400bp, implied volatility at 24%–27%, the
the rush and published their IPO draft US$300m to meet demand. stock borrow cost at 3.5% and stock slippage
filings for proposed Shenzhen (12) and The CB was priced at the mid-point of the at 4%. The bond floor was around 96.

› SHAREHOLDERS CLEAR FLAT GLASS CB 140bp over Libor. In May 2013, United Laboratories
Banks joining as MLAs were offered a top- attempted to raise US$80m via a three-year
Shareholders of Hong Kong and Shanghai- level upfront fee of 125bp. term loan, but that facility was shelved
listed FLAT GLASS GROUP have approved the Last November, the borrower, formerly because of documentation issues. That deal
company’s plan to issue a Rmb1.45bn six- known as PTA Bank, raised a US$460m was fully subscribed in syndication and
year convertible bond. term loan, which comprised US$200m two- paid a top-level all-in of 435bp via a margin
Proceeds will be used to help fund a year and US$260m three-year bullet term of 350bp over Libor or CNH Hibor.
glass project for photovoltaic modules in loans, paying margins of 120bp and 140bp As of December 31, United Laboratories
Anhui province at a cost of Rmb1.75bn. over Libor, respectively. had borrowings of Rmb1.63bn coming
The project is awaiting a local Citibank, Commerzbank, Emirates NBD due within a year, against cash and cash
environmental impact assessment. Capital, First Abu Dhabi Bank, Industrial & equivalents of Rmb1.48bn, according to its
The company raised Rmb300m from its Commercial Bank of China, Mashreqbank, 2018 annual report.
Shanghai IPO in February. Mizuho Bank, StanChart, SMBC and MUFG
Its A-shares closed at Rmb10.35 on June were the bookrunners and initial MLAs on › CC LAND LAUNCHES HK$2BN LOAN
25, down 3.1%, while its H-shares were that deal.
down 1.5% to HK$3.91. TDB, rated Baa3/BB+ (Moody’s/Fitch), is Hong Kong-listed property developer CC LAND
The CB proposal still needs approval the financial arm of the Common Market HOLDINGS has launched a HK$2bn unsecured
from Chinese regulators. for Eastern & Southern Africa (COMESA), amortising three-year term loan.
Africa’s largest regional economic HSBC is the mandated lead arranger and
organisation. bookrunner of the financing, which pays
For full allocations, see www.ifrasia.com. an interest margin of 185bp over Hibor and
has an average life of 2.7 years.
HONG KONG › TRIO TIPPED TO MANDATE UNITED LAB Banks have been invited to join as MLAs
with tickets of HK$500m or more for a
Three banks are tipped to win the mandate top-level all-in pricing of 239.81bp based
SYNDICATED LOANS for a HK$1bn (US$128m) loan for Hong on an upfront fee of 148bp. Lead arrangers
Kong-listed UNITED LABORATORIES INTERNATIONAL committing HK$300m–$499m earn an all-in
› TDB LIFTS LOAN TO US$400M HOLDINGS. pricing of 229.81bp through a fee of 121bp,
The banks are: Bank of Communications, while arrangers with tickets of HK$100m–
EASTERN & SOUTHERN AFRICAN TRADE & DEVELOPMENT Hang Seng Bank and Taipei Fubon Commercial $299m receive an all-in of 220.19bp based
BANK (TDB) has increased its three-year Bank. on a 95bp fee.
loan to US$400m from a US$250m target The deal is expected to be launched into Commitments are due by July 26.
after attracting six lenders in general general syndication in the coming weeks. Funds are for working capital and general
syndication. In January 2015, the pharmaceutical corporate purposes.
Standard Chartered was the mandated company raised HK$600m in bilateral CC Land’s last loan was a HK$600m
lead arranger and bookrunner of the bullet facilities from China Development Bank three-year facility completed in December
facility, which pays an interest margin of Hong Kong branch. 2014, according to LPC data.
UA Finance seeks loan amid Orix divestment

Loans Japanese shareholder exiting stake in Hong Kong finance company
UNITED ASIA FINANCE has launched a US dollar lenders offers the same all-in pricing and loan. MLABs Mizuho, StanChart and Taipei
loan of an unspecified amount targeting fees as the Hong Kong dollar portion, but has Fubon Commercial Bank brought in 18 other
Japanese lenders alongside a HK$1.6bn four commitment levels. banks, including three Japanese lenders that
(US$205m) borrowing. Banks can join as MLAs with US$38m or lent US dollars.
Mizuho Bank and Standard Chartered more, lead arrangers with US$25m–$37m, On June 20, UA Finance agreed to buy
are the mandated lead arrangers and arrangers with US$15m–$24m and senior back shares representing 7.3% in itself from
bookrunners of the entire financing, which managers with tickets of US$5m–$14m. Orix Asia Capital, a wholly owned subsidiary
pays an interest margin of 190bp over Hibor Senior managers earn an all-in of 200bp of Orix. UA Finance’s distributable profits will
or Libor and has an average life of three based on a fee of 30bp. finance the ¥10bn (US$93m) consideration
years. One-on-one bank meetings will be held in for the share purchase, according to a filing
Banks have been invited to join the Hong Japan on June 25 and 26. Commitments are from its majority shareholder Sun Hung Kai
Kong dollar tranche as MLAs with HK$300m due by July 19. & Co to the Hong Kong Stock Exchange on
or more for a top-level all-in pricing of 215bp The loan is partially for refinancing, while Thursday. The transaction is expected to be
based on an upfront fee of 75bp. Lead the remainder is new money. completed by June 27.
arrangers with HK$200m–$290m earn an UA Finance last tapped the loan markets Sun Hung Kai & Co owns a 58.18% stake
all-in pricing of 210bp based on a fee of 60bp, in July 2018 when it completed a HK$4.72bn- in UA Finance, while Itochu (25.1%) and UA
while arrangers with HK$100m–190m receive equivalent (US$601m) financing that paid a Finance’s CEO and managing director Akihiro
an all-in of 205bp based on a 45bp fee. top-level all-in pricing of 220bp based on the Nagahara (9.5%) hold the remainder.
The US dollar tranche inviting Japanese same margin and average life of the latest APPLE LAM

COUNTRY REPORT INDIA
› JUNEYAO INCREASES LOAN TO HK$2.3BN London-listed company delayed a Hong accounts, including US$180m of demand
Kong share sale. from the leads.
Shanghai-listed Juneyao Airlines has The shares on offer represent about 6.4% Asia took 40% of the 144A/Reg S bonds,
increased a three-year term loan to of the company’s outstanding share capital. the US 38% and EMEA 22%. By investor
HK$2.3bn from a HK$1.8bn target after There is a greenshoe of 1.28m ADSs. type, asset managers and fund managers
attracting 16 lenders in general syndication. Chi-Med shares closed at US$30.20 last booked 76%, insurers and public sector
Standard Chartered was the mandated lead Thursday, up 31% year to date. investors 18%, banks 4%, and private banks
arranger and bookrunner of the financing, Morgan Stanley is the sole bookrunner. 2%.
which offered a top-level all-in pricing of Chi-Med planned to open books for a The notes have expected ratings of Baa3/
185bp over Hibor based on an interest margin Hong Kong listing of up to US$500m two BBB–/BBB–, in line with the issuer.
of 160bp and an upfront fee of 62.5bp. weeks ago but decided to delay the launch Barclays, Bank of America Merrill Lynch,
Signing was slated for Tuesday. amid choppy market conditions, said Citigroup, DBS, Emirates NBD Capital, JP
Juneyao Airlines is the guarantor, while its people with knowledge of the matter. Morgan, Mizuho, MUFG and Standard
indirect wholly owned subsidiary, SHANGHAI CK Hutchison owns a 60.2% stake in Chi- Chartered were joint bookrunners.
JUNEYAO AIRLINE HONG KONG, is the borrower. Med. According to a filing on the London Adani Ports SEZ operates 10 port
Headquartered in Shanghai, the privately Stock Exchange in April, CK Hutchison concessions in India, according to Moody’s,
owned guarantor operates flights between intends to reduce its stake to below 50% including the Mundra Port and Special
Shanghai and Hong Kong, Macau, Taiwan, to improve liquidity in Chi-Med’s shares Economic Zone in Gujarat.
Korea, Japan and Singapore. through the Hong Kong listing. The bonds were seen around 5bp tighter
Juneyao Airlines is 63%-owned by Hong Kong-headquartered Chi-Med in early trading on Thursday.
Shanghai Juneyao (Group), which also develops and commercialises targeted
invests in the financial, education, therapies and immunotherapies for the › CANARA BANK EYES AT1 BONDS
technology, real estate and food and treatment of cancer and immunological
beverage sectors. Juneyao Group also owns diseases. CANARA BANK is planning to raise Rs15bn
Guangzhou-based budget airline 9 Air that Bank of America Merrill Lynch and Goldman (US$217m) from Basel III-compliant
operates domestic flights within China. Sachs were the joint sponsors on the Hong Additional Tier 1 bonds via private
For full allocations, see www.ifrasia.com. Kong float. placement, according to a release on its
website.
The Indian state-owned bank has invited
EQUITY CAPITAL MARKETS technical and financial bids from merchant
bankers on July 3.
› LF LOGISTICS POSTPONES IPO INDIA Crisil and India Ratings have assigned a
AA rating to the notes.
LF LOGISTICS,
the logistics arm of Li & Fung, has On June 18, Canara Bank received board
decided to postpone a planned Hong Kong DEBT CAPITAL MARKETS approval to raise up to Rs30bn from AT1
IPO after receiving a US$300m investment bonds and the same amount from Tier
from Singapore state investor Temasek. › ADANI PORTS SAILS AHEAD 2 bonds in FY19-20, subject to market
Li & Fung, a Hong Kong-listed global conditions and necessary approvals.
sourcing and logistics group, said Temasek ADANI PORTS AND SPECIAL ECONOMIC ZONE last
will buy a 21.7% stake in LF Logistics at a Wednesday priced US$750m 4.375% 10- › DEWAN MISSES DEBT REPAYMENT AGAIN
post-money valuation of about US$1.4bn. year senior unsecured bonds at 99.703 to
As a result of the investment, the yield 4.412%, equivalent to Treasuries plus DEWAN HOUSING FINANCE CORP paid less than
proposed spin-off IPO will be postponed 237.5bp. half the amount due on commercial paper
until further notice, said the company. This was at the tight end of final because of a tight cashflow position,
Li & Fung announced last August that it guidance of 240bp over Treasuries, plus or according to a release on the stock
planned to spin off and list its logistics arm minus 2.5bp, and inside initial guidance of exchanges.
in a Hong Kong IPO as early as the first half 265bp area. The non-banking finance company repaid
of 2019. People close to the deal said at the Adani Ports had outstanding dollar bonds Rs1.5bn out of Rs3.75bn which was due on
time the IPO was expected to raise about due 2027 quoted at Treasuries plus 208bp, June 25. It said it would repay the Rs2.25bn
US$300m–$500m. and one of the leads put fair value for the balance within days once the cashflow
LF Logistics posted turnover of US$1.1bn new issue at 235bp–240bp, suggesting that position improved.
in 2018, up 10% from a year earlier. It had a it paid little to no new issue premium. Twelve investors own the commercial
net profit of US$63m in 2018, up 27% year “It used to be only the top, most paper.
on year. sophisticated institutional buyers who This is the second time Dewan has
LF Logistics operates warehouse would look at India and infrastructure delayed debt repayment.
space serving customers in sectors such credits, but it feels like the landscape On June 15, it repaid interest of Rs9.61bn
as footwear and apparel, fast-moving has changed and a lot of Asia-domiciled due on secured redeemable non-convertible
consumer goods, food and beverage and investors who used to prefer to buy China debentures, a week after it missed the
healthcare. or Korea are now looking at this kind of coupon payment.
paper,” said the lead. The payment was made within the grace
› CK HUTCHISON SELLS CHI-MED SHARES Adani Ports’ spread looked tempting for period of seven working days and came
investors who were used to spreads of mid after Dewan completed the sale of a stake
CK Hutchison is planning to sell 8.5m to high 100s on Triple B paper in other in Aadhar Housing Finance to an entity
American depositary shares in HUTCHISON parts of Asia. controlled by private equity funds managed
CHINA MEDITECH after the New York and Orders were over US$4.3bn from 202 by Blackstone Group.

Care and Brickwork downgraded the Separately, Icra has downgraded the long- It was targeting Rs5bn, plus a greenshoe
company’s entire debt programme to term ratings on bonds, fund-based limits option of Rs45bn.
default in the week ending June 7, while and loans worth nearly Rs209bn of PIRAMAL Care, Crisil and India Ratings have
Crisil and Icra assigned a default rating to CAPITAL to AA from AA+ over challenges in assigned AAA ratings to the rupee notes.
its commercial paper. resource mobilisation and a predominantly On June 4, NHAI raised Rs34.2bn from
On May 21, Dewan imposed curbs on wholesale book, with large exposure to real 10-year bonds at 7.92%.
deposits and withdrawals to preserve estate and infrastructure.
liquidity. › SBI PRINTS TIER 2 BONDS
› IRFC SEALS 15-YEAR PRINT AT 7.85%
› GMR AIRPORTS PAYS 8% FOR 18 MONTHS STATE BANK OF INDIA has raised Rs50bn from
has raised
INDIAN RAILWAY FINANCE CORP 10-year Basel III-compliant Tier 2 bonds at
GMR AIRPORTS has raised Rs8bn from 18- Rs21.2bn from 15-year bonds at 7.85%, 7.99%, according to market sources.
month notes at 8%, according to a market according to market sources. The notes have a call option after five
source. The state-owned issuer was targeting years.
GMR Airports is the holding company Rs5bn, plus a greenshoe option of Rs20bn. The country’s largest bank was eyeing
of Delhi International Airport and GMR Care, Crisil and Icra have assigned AAA Rs20bn, plus a greenshoe amount of
Hyderabad International Airport. ratings to the bonds. Rs30bn.
The coupon is payable semi-annually. On March 29, IRFC sold Rs30bn 10-year Crisil and India Ratings have assigned
The notes have a redemption premium of bonds at 7.95%. AAA ratings to the bonds.
5.45% per annum. IRFC is yet to make an official SBI Capital Markets is the arranger for the
Deutsche Bank was heard to be the announcement on the final yield and size issue.
arranger for the deal. of the issue. SBI is yet to make an official
Care recently assigned a provisional A+ announcement on the final yield and size
rating to the notes. The funds will be used › MRHF ISSUES ZERO-COUPON BONDS of the issue.
to meet near-term repayment obligations,
said Care. MAHINDRA RURAL HOUSING FINANCE has raised › UCO BANK PRICES T2 BONDS AT 9.644%
On March 27, a consortium of Tata Rs1.5bn from zero-coupon bonds maturing
Group, an affiliate of Singapore’s sovereign on June 25 2021 at a 8.5% yield to maturity, UCO BANK has issued Rs5bn 10-year Basel III-
wealth fund GIC, and SSG Capital according to data on Central Depository compliant Tier 2 bonds at 9.644%, according
Management invested Rs80bn in GMR Services Limted. to market sources.
Airports. Under the terms of the deal, GMR The notes have a put option on July 31 Life Insurance Corp of India is heard to
Infrastructure will hold a 54% stake in GMR 2020. In case the put option is exercised, have picked up the entire bond issue.
Airports and keep management control, the yield will be 8.25%. The issuer is eyeing India Ratings and Acuite have assigned a
while Tata Group will hold about 20%, GIC Rs1.5bn, plus a greenshoe option of Rs2.5bn. AA- rating to the bonds.
15% and SSG nearly 10%. India Ratings has assigned a AA+ (stable) Recently, Punjab & Sind Bank raised
The deal will help the company cut GMR rating to the notes. Rs2.37bn from T2 bonds at 9.5%. The
Infrastructure’s net debt and provide an Separately, TATA CAPITAL FINANCE raised notes are rated AA by Brickwork and Care
exit for private equity investors. Net debt is Rs1.02bn compared with the target of Ratings.
expected to fall to Rs120bn from Rs200bn Rs2bn from subordinated bonds maturing UCO Bank is yet to make an official
in December 2018, while GMR Airports’ net on April 16 2029 at 8.95%, according to a announcement on the planned bond sale.
debt is estimated to halve to Rs10bn. market source.
GMR Airports is yet to make an official Crisil and Icra have assigned a AAA rating
announcement on the final size and yield to the notes. EQUITY CAPITAL MARKETS
of the issue.
› NABARD EYES RS20BN FROM BONDS › KPR AGROCHEM WITHDRAWS IPO
› ICRA CUTS RATING OF TWO NBFCS
NATIONAL BANK FOR AGRICULTURE AND RURAL Seeds and crop protection company KPR
Icra has downgraded the long-term ratings DEVELOPMENT plans to raise up to Rs20bn AGROCHEM said it has withdrawn a planned
of EDELWEISS FINANCIAL SERVICES and PIRAMAL from three-year bonds. Rs2.8bn (US$41m) IPO.
CAPITAL & HOUSING FINANCE by one notch The issuer is targeting Rs5bn, plus a No reason was given but market
because of the large exposure to the greenshoe option of Rs15bn. participants said negative feedback from
real estate sector of their predominantly Crisil and India Ratings have assigned a investors may have prompted the decision.
wholesale lending book. AAA rating to the notes. Some 34.4m primary shares and 12m
The domestic rating agency downgraded On June 21, Nabard scrapped a Rs30bn secondary shares were to be sold in a Rs59–
the Rs4.7bn long-term non-convertible tap of its 7.69% May 2024 bonds because of Rs61 range.
debenture programme of Edelweiss higher rates. Books were to open last Thursday.
Financial Services to AA– from AA to reflect Nabard is yet to make an official Choice Broking, which has an “Avoid”
increased vulnerability in the wholesale announcement on the planned bond sale. rating on the IPO, said of that although
lending book. It has withdrawn the ratings interest costs are eating up 42% of KPR’s
on Rs69.16bn of bonds and commercial › NHAI ISSUES 10-YEAR BONDS AT 7.8% Ebitda only Rs300m of the expected
paper at the request of the issuer. The proceeds were earmarked for debt
underlying assets in Edelweiss’ wholesale NATIONAL HIGHWAYS AUTHORITY OF INDIA has repayment.
book have a heightened risk profile which raised Rs39.3bn from 10-year bonds at The company also has no plans to expand
is leading to a consequent rise in stressed 7.80%, according to a filing on the National its capacity as its crop protection product
exposures, Icra said. Securities Depository Limited. plant is running at 57% of capacity, its

COUNTRY REPORT JAPAN
nutrients plant at 24% and its chemical based on an interest margin of 120bp over › SUMITOMO PLANS FIVE-YEAR BOND
operations at 34%, according to the broker. Libor and has a residual average life of
PL Capital Markets was the sole 4.75 years. SUMITOMO has hired Goldman Sachs, Citigroup
bookrunner. and Bank of America Merrill Lynch as joint
lead managers and joint bookrunners for
› HDB FINANCIAL HIRES TWO FOR IPO a proposed offering of five-year US dollar
senior unsecured fixed-rate notes.
Non-bank finance company HDB FINANCIAL JAPAN The Japanese trading company met
SERVICES has hired Bank of America Merrill investors in Asia and Europe last week.
Lynch and Morgan Stanley to manage a The Reg S notes will be issued under
US$1bn–$1.5bn IPO that it plans to launch DEBT CAPITAL MARKETS the company’s euro medium-term note
in the next 12 months. programme dated August 30 2018.
The syndicate is likely to be expanded. › MITSUBISHI OPTS FOR REG S The issue, with expected ratings of Baa1/A–
HDFC Bank will be selling some of its (Moody’s/S&P), is expected to price in the
95.5% stake in HDB Financial. MITSUBISHI last Thursday priced a US$500m near future, subject to market conditions.
HDB Financial’s loan book grew by 23% five-year offering at 99.469 with a coupon
to Rs547bn as of March 31 from Rs443bn a of 2.5% to yield 2.614%, equivalent to › TOYOTA MOTOR REVS UP
year earlier. Treasuries plus 84bp.
Net profit in the financial year to March This was well inside initial guidance of TOYOTA MOTOR, rated Aa3/AA– (Moody’s/S&P),
31 rose to Rs12bn from Rs9.3bn in 2018. Treasuries plus 105bp area. last Wednesday priced US$1.5bn of bonds
HDB Financial has 1,350 branches in 981 Orders were over US$1.5bn from 61 in three tranches. A US$500m three-year
cities and towns in India. accounts. Asia took 65% of the Reg S bonds and priced at par to yield 2.157%, equivalent to
Europe 35%. By investor type, asset managers Treasuries plus 65bp; a US$500m five-year
› FINCARE SFB HIRES TWO IPO BANKS and fund managers booked a combined 39%, at par to yield 2.358% or Treasuries plus
sovereigns, supranationals and agencies 27%, 80bp; and a US$500m 10-year at par to yield
FINCARE SMALL FINANCE BANK has hired ICICI insurers 15%, banks 10%, corporates 8%, and 2.76% or Treasuries plus 90bp.
Securities and Nomura to manage an IPO of private banks and others 1%. Respective price guidance was 48bp–
up to Rs10bn, people with knowledge of The bonds have expected ratings of A2/A 50bp, 63bp–65bp and 77bp–80bp, and
the transaction said. (Moody’s/S&P), in line with the issuer. Citigroup initial price thoughts were 65bp area, 80bp
Fincare, formerly Disha Microfinance, and JP Morgan were joint bookrunners. area and 95bp area.
has to be listed by 2020 under Reserve Bank
of India guidelines after it was given a small
finance bank licence in 2017.
True North, TA Associates, Tata
Opportunities Fund, Leapfrog Investments,
Kotak Mahindra Old Mutual Life Insurance,
Mexico prints huge Samurai
Edelweiss Tokio Life Insurance and Small Bonds Sovereign surprises with jumbo yen transaction
Industries Development Bank of India are
among the investors in the bank, which has The UNITED MEXICAN STATES raised a massive status of BB+ from BBB–. Pemex is known to
operations in South and Western India. ¥165bn (US$1.53bn) from a well-oversubscribed Japanese investors as it sold ¥80bn of 10-year
four-tranche Samurai bond offering. Samurai bonds with a guarantee from Japan
The deal comprised a ¥65.5bn 0.62% Bank for International Cooperation three
three-year, a ¥41.2bn 0.83% five-year, a years ago.
¥27.3bn 1.05% seven-year, and a ¥31bn 1.30% Mexico is recognised among Japanese
INDONESIA 10-year. The spreads over yen offer-side investors as a frequent borrower in the
swaps are 68bp, 88bp, 105bp, and 120bp. Samurai market. It raised ¥135bn in 2016 and
Investors found the absolute yield levels another ¥135bn last year. It has ¥246.7bn
SYNDICATED LOANS and relative value attractive, as JGBs with of outstanding bonds maturing this year
up to 13 years remaining to maturity are now – ¥45.9bn on June 14, ¥33.8bn on July 24,
› BNI NEW-MONEY MANDATE LOOMS trading at negative yields. The bonds also ¥17bn on August 8, and ¥150bn on December
paid roughly 20bp of premiums over the 20, according to Refinitiv data.
Discussions on a new-money financing for issuer’s US dollar curve, according to a banker The new deal also provided fresh evidence
BANK NEGARA INDONESIA have gained steam with on the deal. of the popularity of sovereign bonds among
the mandate likely to be awarded soon. A wide variety of investors participated, Japanese investors. In May, Indonesia printed
Lenders had put forward proposals to the with large orders coming from big investors ¥177bn of Samurai bonds in five tranches.
state-owned borrower in March for a deal both at home and abroad. The books built up However, the issuer was unable to add
size of at least US$750m. The tenors could to over ¥220bn. a 20-year tranche. Its three previous deals
be three and/or five years. Some bankers away said they had not included that maturity, and it marketed one
".)ûRATEDû"AA"""""¦ûLASTûRAISEDûAû anticipated such a large transaction, but the this time as well, but it eventually dropped it
US$500m five-year term loan in October deal went well, taking in its stride the recent because of insufficient demand.
2017. BNP Paribas, MUFG, HSBC, OCBC, downgrades by Fitch on both the issuer and Mizuho, Nomura and SMBC Nikko were
UOB and Westpac were the mandated lead state-owned oil company Pemex. Earlier this the lead managers on the deal rated A3 by
arrangers and bookrunners and 19 banks month, the rating agency downgraded Mexico Moody’s and A– by JCR.
joined in general syndication. That loan to BBB from BBB+ and cut Pemex to junk TAKAHIRO OKAMOTO
paid a top-level all-in pricing of 128bp

The new issue concession was estimated company is a producer of trading cards Nomura, Morgan Stanley and SMBC Nikko are
at around 3bp–4bp across the tranches, games and a publisher of mobile apps the joint lead managers and bookrunners.
with orders heard to be over US$4.1bn. and games. It is known for developing
Bank of America Merrill Lynch, BNP Paribas “Cardfight!! Vanguard” and “Future Card › LASALLE LOGIPORT USES GREENSHOE
and JP Morgan were joint bookrunners for Buddyfight”.
the SEC-registered deal. Books will be open on July 11–July 18. LASALLE LOGIPORT REIThas fully exercised the
The deal will price on July 19. Shares will greenshoe option of its May follow-on
start trading on July 29. SMBC Nikko is the offering, lifting the deal size to ¥13.4bn.
EQUITY CAPITAL MARKETS sole lead manager and bookrunner. The REIT sold an additional 5,239 units,
or 5% of the base size, at the offering price
› BUSHIROAD TO OPEN BOOKS FOR TSE IPO › IIF J-REIT EXERCISES GREENSHOE of ¥121,387 to raise ¥636m.
The base deal of 104,761 units was priced
BUSHIROAD, a Japanese entertainment INDUSTRIAL & INFRASTRUCTURE FUND INVESTMENT at a narrow discount to the closing price of
company, is set to open books for a TSE IPO CORP has fully exercised the greenshoe ¥124,500 on May 29, versus an indicative
to raise up to ¥6.96bn (US$64.8m). option of its follow-on offering, lifting the discount range of 2.5%–5.0%.
The base deal comprises 3.78m shares (56% deal size to ¥11.9bn. Of the shares on offer, 26% went to
primary/44% secondary) at an indicative price IIF sold an additional 4,500 units, or 5% international investors and the rest to
of ¥1,840. There is an overallotment option of of the base deal, at the offering price of domestic buyers.
567,400 shares or 15% of the base deal. ¥125,092 to raise ¥563m. The base deal Proceeds will be used for the acquisitions
The IPO will give the company a comprised 90,700 units. of five properties and the remainder for the
potential market capitalisation of ¥29.6bn. Of the shares on offer, 35% went to future acquisitions of assets or repayment
About 70% of the deal will be allocated international investors and the rest to of borrowings.
to retail buyers and the rest to institutional domestic buyers. Mitsubishi UFJ Morgan Stanley, Mizuho and
investors. Proceeds will be used to acquire five Nomura were the joint lead managers and
Headquartered in Tokyo, the 12-year-old properties. bookrunners.
Credit Suisse steps up frontier market loans

Loans Swiss lender brings loans for Laos and Pakistan
Credit Suisse is ramping up its exposure to the sole lender on that borrowing, which was in the ongoing Cricket World Cup, Pakistan
Asia’s frontier markets with loans for the LAO not syndicated. registered back-to-back victories against
PEOPLE’S DEMOCRATIC REPUBLIC and the ISLAMIC The Lao central bank is also in the market South Africa and New Zealand to keep
REPUBLIC OF PAKISTAN. with a US$100m two-year term loan that was their hopes alive of a repeat of the country’s
Last week, the Swiss bank funded a relaunched into syndication in April after an surprise World Cup win in 1992, when Khan
US$150m-equivalent euro-denominated five- earlier launch in December failed to attract led Pakistan to the championship.
year loan for the Laotian Ministry of Finance interest. Taipei Fubon Commercial Bank is The US$200m loan is Credit Suisse’s 10th
as sole mandated lead arranger. the MLA and bookrunner on that loan, which financing for the South Asian sovereign and
Meanwhile, Credit Suisse is also offers top-level all-in pricing of 371bp based follows a one-year revolving credit facility last
syndicating a US$200m one-year loan on an interest margin of 150bp over Libor December that was increased to US$245m
for Pakistan’s Ministry of Finance. The and an average life of 1.42 years. from an initial US$200m. Credit Suisse was
Swiss lender provided the loan in May and Pakistan, meanwhile, is borrowing to also the sole MLAB on that loan.
is looking to increase the size through support its national budget and refinance China Minsheng Banking Corp, National
commitments from the market. existing debt. Bank of Pakistan and United Bank joined that
The deals come as Credit Suisse is looking The government, led by former cricketer deal, which paid a top-level all-in pricing of
to Asia to drive growth, reporting a 12% year- Imran Khan, has struggled to rebalance the 260bp based on an interest margin of 200bp
on-year increase in risk-weighted assets in Asia economy and rein in inflation, leading to cuts over Libor.
Pacific in the first quarter of 2019 to SFr37.8bn to its credit ratings from Fitch in December Pakistan has also turned to its trading
(US$38.5bn). While the bank has a long and S&P in February to B3/B−/B− (Moody’s/ partners for financial support. That loan had
relationship with Pakistan, its first sovereign S&P/Fitch). followed close on the heels of a US$3bn
loan in Laos mirrors similar deals in Papua New The country, however, is looking to turn a foreign currency support for a year from
Guinea and Mongolia in recent years. corner after agreeing a US$6bn loan from Saudi Arabia in October and a further loan
The Lao PDR loan will provide funds the International Monetary Fund in May, of up to US$3bn in deferred payments for oil
for budgetary support and long-term and is pressing ahead with reforms to cut imports to help stave off a current account
development objectives of the unrated the budget deficit and move the rupee to crisis.
South-East Asian country. It has not been a market-determined rate. Since then, the The United Arab Emirates also confirmed
decided if the loan will be syndicated. Pakistani rupee has plunged to record lows, a US$3bn loan in January, and Qatar’s state
Credit Suisse signed a US$100m- sliding more than 3% on Wednesday to news agency said last week that Qatar would
equivalent euro-denominated five-year Rs161.94 against the US dollar. commit a further US$3bn in deposits and
facility in March to the Bank of the Lao PDR, Pakistan’s cricket team is also performing direct investments.
the country’s central bank. Credit Suisse was better. After struggling in the first few games PRAKASH CHAKRAVARTI

COUNTRY REPORT MALAYSIA
› SUSHIRO SELL-DOWN RAISES ¥38BN Established in 1963, Seiyu is one of the in August last year.
largest supermarket chains in Japan, with MGM China is rated Ba3/BB-/BB, while
Shinmei, the largest shareholder of SUSHIRO 172 supermarkets and 88 hypermarkets. Sands China is rated Ba1/BBB-/BBB-.
GLOBAL, has raised ¥38bn from a sell-down of Walmart first acquired a 6.1% minority
part of its 37.2% stake in the Japanese sushi stake in Seiyu in 2002 and later took full
restaurant chain, after pricing the deal at control, resulting in its delisting in 2008.
¥5,810 a share.
The base deal of 6.6m secondary MALAYSIA
shares priced at a 3.01% discount to last
Wednesday’s market close of ¥5,990, versus
the marketed discount range of 3.0%–5.0%. MACAU DEBT CAPITAL MARKETS
There is an overallotment option of
990,000 shares, or 15% of the base size. › CIMB THAI TAKES TIER 2
The international book was covered SYNDICATED LOANS
about 10 times with over 100 investors CIMB THAI BANK last Wednesday priced M$550m
participating, according to a person close › MGM CHINA SELF-ARRANGING US$1.25BN (US$134.7m) of 10-year non-call five bonds
to the deal. Allocations were skewed to at par to yield 4.15%, well inside initial
long-only funds, roadshow participants and MGM CHINA HOLDINGS has launched a US$1.25bn- guidance in the range of 4.30%–4.40%.
existing investors. The domestic retail and equivalent loan to partially refinance a The subordinated bonds, rated AA3 by
insitutional tranches were also well covered. borrowing completed a year ago. RAM, will qualify as Tier 2 capital. There will
Due to the strong international demand, Banks have been invited to lend US or be loss-absorption features in the notes, which
the bookrunners reallocated 5% from the Hong Kong dollars to the self-arranged and will be written down if the Thai bank is
retail portion to international investors, unsecured financing, which is expected to considered non-viable by the Bank of Thailand
which ended up with 30% of the whole close in mid-July. or if its parent, CIMB Bank, is considered non-
deal, the person said. Proceeds will refinance a HK$23.4bn viable by Bank Negara Malaysia.
The follow-on is structured as a rinpo deal, (US$3bn) loan completed in June 2018. That The Thai lender, rated AA2 by RAM,
a domestic offering with a dedicated overseas deal comprises a HK$15.6bn term loan and regularly raises Tier 2 funds in Malaysia
placement for institutional buyers but no a HK$7.8bn revolver with MGM China’s to take advantage of its parent’s name to
English language prospectus. properties in Macau serving as security. obtain better pricing.
Shinmei is subject to a 180-day lock-up. A partial prepayment of the 2018 loan has Settlement is on July 8 with the
Mizuho, Nomura and SMBC Nikko are the already taken place after MGM China issued bonds to be drawn from a M$2bn Tier
joint leads and bookrunners for the deal. senior notes totalling US$1.5bn in mid-May, 2 subordinated debt programme. CIMB
according to a filing from the borrower to Investment Bank was sole lead manager.
› WALMART TO LIST JAPANESE UNIT SEIYU the Hong Kong stock exchange on May 16.
The 2018 facility was an amendment › SPORTS TOTO BETS LONG
Global retailer Walmart said last and extension of a loan and revolver from
Wednesday it is looking to list a minority June 2015. Bank of America Merrill Lynch Gaming company SPORTS TOTO MALAYSIA has
stake in its Japanese supermarket unit SEIYU. was the coordinator of the exercise, which raised M$645m in eight tranches of bonds
“We have a long-term aspiration to list attracted 21 other banks. The term loan that extended its yield curve to 10 years.
a minority stake of our business in Japan, tranche was increased to HK$15.6bn from The bond was split into four series of
with strong support from Walmart to HK$12.09bn, while the revolver was cut to various tenors. Series 7 comprised M$115m
develop the business as a community-based HK$7.8bn from HK$11.31bn. of three-year bonds priced at par to yield
retailer, both in-store and online,” said MGM China’s latest refinancing exercise 4.95% and M$140m of seven-year notes
Walmart Japan CEO Lionel Desclee in a is similar to Sands China’s US$2bn at 5.25%. Series 8 comprised M$80m of
speech to employees. refinancing last November. The new loan three-year notes at 4.95% and M$40m of
He did not specify a fundraising size or replaced a US$2bn four-year revolver five-year notes at 5.05%. Series 9 comprised
say when the listing would take place. tranche of a US$6.385bn secured facility M$25m of two-year bonds at 4.75%, M$65m
According to Reuters, Japanese media for VML US Finance LLC from August of three-year notes at 4.90% and M$55m
reported last year that Walmart was 2016. Sands China has already repaid the of nine-year notes at 5.45%. Series 10 is a
considering selling Seiyu for around remaining US$4.385bn portion of the 2016 M$125m 10-year bond paying 5.55%.
¥300bn–¥500bn. facility from the proceeds of a bond issued Bankers said demand was healthy, and
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Castlelake wraps up AirAsia buy facility
Loans Borrower raises smaller-than-planned financing
US alternative investment firm CASTLELAKE purchase of 29 A320 aircraft from AirAsia, US$1.27bn dual-tranche financing last July
has completed a smaller-than-planned paid top-level all-ins of 169.4bp and for its purchase of 132 aircraft from AirAsia
US$597.87m non-recourse aircraft financing 193.3bp for the two and five-year tranches, and AAC, as well as 14 engines and options to
that backs the purchase of aircraft from respectively, based on interest margins of buy 50 A320neo family aircraft. That loan is
Malaysia’s flagship budget airline AirAsia. 150bp and 175bp over Libor. The weighted secured against 65 delivered, on-lease aircraft.
Citigroup, BNP Paribas, Deutsche Bank and average lives are 1.8 and 4.1 years for the two That loan had 18 banks participating,
MUFG were the mandated lead arrangers and five-year, respectively. including original MLABs BNP, Citigroup,
and bookrunners of the loan, which attracted The 29 aircraft will serve as security. AS Air Commonwealth Bank of Australia and
11 lenders in general syndication. Lease Holdings 5T DAC is the acquiring and Deutsche. The two and five-year tranches
Citigroup was the left lead on the loan, borrowing entity, while Asia Aviation Capital, a offered top-level all-in pricing of 166.13bp
which is split into a US$149.47m two-year wholly-owned leasing unit of AirAsia, is the seller. and 196.21bp, respectively, based on interest
piece (tranche 1) and a US$448.40m five- Of the aircraft being acquired, 25 are on margins of 150bp and 180bp over Libor and
year portion (tranche 2). lease to AirAsia, while four new aircraft are estimated average lives of 1.86 and 4.01 years.
The original size sought earlier was slated for delivery this year. Two of these Minneapolis-headquartered Castlelake
US$685.1m, but the deal was reduced aircraft will be on lease to AirAsia and two was founded in 2005 and has about
because the borrower arranged alternative others to AirAsia Japan. US$12.8bn in assets under management.
funding that was cheaper. The borrowing follows a similar loan for For full allocations, see www.ifrasia.com.
The borrowing, which funds Castlelake’s New York-listed Fly Leasing, which signed a CHIEN MI WONG
surprisingly encouraging for the nine and increased from an initial target of M$300m refinance debt and buy electric trains and
10-year tenors which are typically perceived following an oversubscription. Bangkok Bank, equipment.
as super long maturities for gaming credits. Bank of China Malaysia and Maybank joined as Besides Auckland, only International
The bond was privately placed with good participants. Finance Corp and two domestic corporates –
distribution to asset managers, financial Proceeds raised will be used to support Argosy Property and Contact Energy – have
institutions and life insurance companies. Chailease Berjaya’s business expansion in issued Green bonds in New Zealand dollars.
All the bonds, rated AA– by Marc, are South-East Asia. On June 18, Westpac New Zealand sold
guaranteed by parent company Berjaya Incorporated in 2015 in Kuala Lumpur, the first offshore Green bond from a Kiwi
Sports Toto. Settlement of the various Chailese Berjaya finances passenger issuer with a €500m (US$559m) five-year
tranches will be complete by July 1. cars and superbikes in collaboration Eurobond print.
CIMB Investment Bank was sole lead. with Berjaya Auto’s dealer network. The
company plans to expand its financing › HNZL READIES DUAL TAP
› TROPICANA READY TO ISSUE business to include commercial cars, heavy
equipment, individuals as well as small-to- HOUSING NEW ZEALAND,rated AA+ (S&P), has
Property developer TROPICANA CORPORATION, medium enterprises in the next five years. mandated ANZ and Westpac to arrange a
formerly known as Dijaya Corporation, global investor conference call on July 2 for a
has registered a M$2bn unrated perpetual tap of its NZ$250m 3.36% June 12 2025 and/or
sukuk issuance programme with the NZ$250m 3.42% October 18 2028 bonds.
Securities Commission. HNZL is a crown agency that provides
Proceeds are to refinance debt, working NEW ZEALAND housing services for New Zealanders in need.
capital, investments, capital expenditure
and/or general corporate purposes.
CIMB is sole principal adviser, lead DEBT CAPITAL MARKETS EQUITY CAPITAL MARKETS
arranger and lead for the programme.
› AUCKLAND PLANS SECOND GREEN BOND › ARVIDA FUNDS RETIREMENT VILLAGES
SYNDICATED LOANS AUCKLAND COUNCIL, rated Aa2/AA (Moody’s/ ARVIDA GROUP, a New Zealand operator of
S&P), has mandated ANZ and BNZ for a homes for the elderly, has completed a
› CHAILEASE BERJAYA RAISES RINGGIT retail offering of six-year New Zealand NZ$50m placement as part of a NZ$142m
dollar Green bonds following domestic (US$94m) equity raising plan to fund the
CHAILEASE BERJAYA CREDIT,
a subsidiary of investor presentations and overseas acquisition of three retirement villages.
Taiwanese leasing giant Chailease Holding, conference calls on July 1. A total of 40m shares were sold at
has raised a debut M$450m (US$108.4m) Auckland Council debuted in the NZ$1.25 each, represents a 9.4% discount to
syndicated loan, according to a press green market in June 2018 with a capped the pre-deal close of NZ$1.38 on June 24.
release from OCBC Bank on June 24. NZ$200m (US$137m) five-year bond that The placement received strong support
Mizuho Bank and OCBC Bank were the priced 2bp inside the municipality’s from existing and new shareholders in New
coordinating mandated lead arrangers and standard local secondary curve. Zealand and Australia, according to Arvida’s
bookrunners of the financing, which was The proceeds of the issue were used to CEO, Bill McDonald.

COUNTRY REPORT PHILIPPINES
The company is looking to raise an The stake of HB, a subsidiary of Citic structuring advisers for the framework,
additional NZ$92m through a 1-for-5.7 Capital International Tourism Fund, in THL while Sustainalytics provided a second party
rights offer for 80m shares at NZ$1.15 each, has increased to 16.9% from 11.9% following opinion.
a 16.7% discount to the pre-deal close. The the placement. The framework details guidelines
offer will run from July 4–15. In addition, THL is raising NZ$50m from regarding evaluation and selection of
The placement and rights offer are both a fully underwritten pro-rata rights offer eligible projects for Green bonds and loans.
underwritten by Forsyth Barr Group and on a 1-for-9 basis at NZ$3.40 per share, “BPI is committed to contributing to
Jarden Partners. representing a 15.8% discount to the pre- the achievement of the UN Sustainable
Arvida is acquiring the three villages deal close. The offer will run from July 4 to Development Goals in the Philippines,” said
for around NZ$180m. The rest of the July 16. president and chief executive officer Cezar
consideration will be funded by vendor Unexercised entitlements will be offered Consing.
equity and bank debt. for sale in a shortfall bookbuild on July 18. The bank is looking to grow its
Formerly known as The Helicopter financings of wastewater management,
› NAPIER PORT IPO TO LAUNCH IN JULY Line, the company began as a scenic pollution prevention and control, and
helicopter flightseeing business and grew green buildings. It disbursed Ps125.76bn
Hawke’s Bay Regional Council has started by acquisitions into a provider of holiday (US$1.8bn) in sustainable energy finance
pre-marketing an NZX IPO of Napier Port vehicles for rent and sale in Australia, New and structured finance in 2018.
that is set to be launched in mid-July, a Zealand, the US and the UK.
person close to the deal said. Jarden Securities is the lead manager of the › SECURITY BANK RAISES MAIDEN BONDS
The IPO is set to raise around NZ$200m capital raising.
depending on the valuation, which could SECURITY BANK has raised Ps18bn from a
be in the range of NZ$518m–$616m at a maiden issue of bonds at 5.875% for a tenor
forecast 2020 EV/Ebitda of 12x–14x, the of two years to support lending activity
person said. and expand its funding base, according to a
“We have today instructed Napier Port to PHILIPPINES press release.
proceed with a 45% offer of shares in Napier The issue will create a path to tap the
Port, with a priority offer for Hawke’s Bay capital markets again in the near future to
residents and non-resident ratepayers, iwi DEBT CAPITAL MARKETS optimize funding costs, said Raul Pedro,
and port staff who wish to buy shares,” executive vice president and treasurer at
said Regional Council Chair Rex Graham, › SMC GLOBAL POWER REOPENS PERP the bank.
according to a Thursday statement. Iwi is a Security Bank exercised its
term designating local Maori people. SMC GLOBAL POWER HOLDINGS last Tuesday oversubscription option and accepted offers
Graham said the IPO will raise the funds reopened its US$500m 6.5% senior above the initially announced Ps5bn on
needed for the cargo port on the country’s perpetual securities callable in April 2024 the back of strong demand. The issue was
North Island to manage congestion and for a further US$300m. priced at the lower end of the range.
prepare for future growth. It needs a The deal priced at 102.052 to yield 6.0%, Deutsche Bank was the sole arranger and
new wharf, which is estimated to cost inside initial guidance of 6.2% area. bookrunner for the issue.
NZ$173m–$190m. The tap was capped at US$300m and
The IPO will be conducted by newly drew orders of more than US$850m. Asia
formed NAPIER PORT HOLDINGS, which will took 87% of the Reg S notes and Europe EQUITY CAPITAL MARKETS
prepare and lodge the product disclosure 13%.
statement setting out the details of the IPO, By investor type, asset managers and › DOUBLEDRAGON PLANS REIT LISTING
offer the shares under the IPO, and become fund managers booked 77%, banks 12%, and
the entity listed on the NZX as well as the private banks and others 11%. DOUBLEDRAGON PROPERTIES plans a real estate
parent company of Napier Port, according The unrated perps reset every five years investment trust listing of up to Ps5bn
to the council. to the initial spread of five-year Treasuries (US$97m) in 2019 and is in preliminary
The port posted a net profit of NZ$24m plus 410.8bp, and the coupon will step up discussions with foreign and local
on operating income of NZ$91m in 2018, by 250bp if they are not called on April 25 underwriters.
up from a NZ$22m profit on operating 2024. However it could raise Ps15bn if the
income of NZ$87m a year earlier. Bank of America Merrill Lynch, Credit Suisse IPO takes place in 2020 as its real estate
Deutsche Craigs and Goldman Sachs are the and UBS were joint bookrunners. portfolio would have expanded by then.
joint lead managers. Confirming a local media report,
› BPI ESTABLISHES GREEN FRAMEWORK DoubleDragon said it was waiting for
› TOURISM HOLDINGS RAISING EQUITY the Philippine Stock Exchange and the
BANK OF THE PHILIPPINE ISLANDS has established a Securities and Exchange Commission to
TOURISM HOLDINGS, a New Zealand-based green finance framework to fund projects amend the regulation that the minimum
provider of holiday vehicles for rent with environmental benefits, according to a public ownership in a REIT should be 67%
and sale, is raising NZ$80m through a release on the Philippine Stock Exchange. before finalising the timetable.
placement and rights offer. The framework is aligned with the The company owns retail, office, hotel
The NZX-listed company has raised International Capital Market Association’s and industrial assets and plans to list some
NZ$30m from a placement of 7.46m new Green Bond Principles, the ASEAN Green of its mature assets.
shares to HB Holdings at NZ$4.02 per share, Bond Standards, and the Loan Market Currently no REITs are listed in the
representing a 0.5% discount to the pre-deal Association Green Loan Principles. Philippines although Ayala Land has
close of NZ$4.04 on June 21. Settlement BPI Capital Corporation, Bank of America indicated plans for an office REIT IPO for up
was on June 24. Merrill Lynch and Citigroup acted as green to US$500m.

› KHAZANAH SELLS BDO UNIBANK BLOCK services and urban development company said. “Working capital needs have also
said it would issue the bonds by July 20 to increased especially for major engineering,
Malaysian state-owned investor Khazanah DBS as sole lead manager through a private procurement and construction projects.”
has raised Ps11bn through the sale of placement. The ultimate investors in the Sembcorp Marine recorded a net loss for
82.96m shares in BDO UNIBANK at a fixed price bonds include Temasek, which has a 49% 2018 of S$74m.
of Ps136.80. stake in Sembcorp Industries.
Khazanah subsidiary Pulau Kaca The five-year bonds were sold at par to
Investments sold the shares in the clean-up yield 3.55%. Sembcorp Financial Services SYNDICATED LOANS
trade. is the issuer and Sembcorp Industries the
SM Investments, which owns 40% of BDO guarantor. › MEINHARDT ENGINEERS LOAN DEBUT
Unibank, had earlier agreed to buy shares Sembcorp Industries will use the
for US$100m. proceeds to help fund a S$2bn loan to Singapore-headquartered engineering
The price represents a 4% discount to the offshore engineering company SEMBCORP consultancy firm MEINHARDT GROUP
pre-deal close of Ps142.50. MARINE, in which it owns a 61% stake. INTERNATIONAL is making its syndicated loan
UBS is the sole bookrunner. The loan comprises a S$1.5bn fixed-rate market debut with a US$115m-equivalent
In February, Khazanah sold Ps5.3bn BDO tranche to repay existing senior facilities multi-tranche financing.
Unibank shares at Ps133. and a S$500m floating tranche for working DBS Bank and Standard Chartered Bank
capital and general corporate purposes. are the mandated lead arrangers and
Both tranches have a tenor of five years, bookrunners of the deal, which is said to
with the fixed-rate paying 3.55% per year comprise both US and Singaporean dollar
and the floater paying a spread of 191bp tranches with tenors ranging from as short
SINGAPORE over the Singapore dollar swap offer rate. as one year to up to five years.
The two companies said in a joint The financing also comprises tranches
statement to the Singapore Exchange for refinancing and acquisition purposes,
DEBT CAPITAL MARKETS that Sembcorp Marine’s current financial as well as a revolving credit facility, a bank
performance had been affected by a guarantee piece, a letter of credit portion
› SEMBCORP HELPS MARINE UNIT prolonged downturn in the global offshore and an overdraft facility.
and marine industry, and that it would take The deal pays a blended interest margin
SEMBCORP INDUSTRIES has sold S$1.5bn time for the industry to recover. of 375bp over Libor and has a blended
(US$1.1bn) of unrated five-year bonds to “While the offshore and marine industry average life of 3.21 years.
investors including state-owned investment has shown signs of recovery, such recovery MLAs joining with commitments of
holding company Temasek Holdings, as part is expected to be gradual and sustained US$25m and above receive a top-level all-in
of a plan to ease finances at a subsidiary. new orders for Sembcorp Marine will pricing of 406.15bp via a fee of 100bp,
The Singapore-listed energy, marine take time to materialise,” the statement while lead arrangers coming in for tickets
Local ties pay off in StanChart's debut AT1

Bonds UK bank prints capital notes tighter than rating would imply
STANDARD CHARTERED priced its first Singapore the last foreign AT1 to price tighter, at 5%, Although StanChart was in the market
dollar Additional Tier 1 securities inside some and that had higher ratings of Baa3/BBB with a A$1bn (US$696m) dual-tranche
higher-rated peers, making the most of its (Moody’s/Fitch). Kangaroo and €500m (US$568m)
scarcity value and investors’ familiarity with Comparative cost savings brought those Sustainability bond the same day, this was
the bank. issuers to the Singapore dollar market, and not thought to be an attempt to replicate
The S$750m (US$553m) perpetual non- StanChart is thought to have benefited more Chinese banks’ multi-currency Belt and Road
call 5.25-year securities priced at par to yield than most from the arbitrage. A source close bond offerings, but simply the bank taking
5.375%, inside initial guidance of 5.75% area. to the deal was reluctant to put a figure on advantage of conducive market conditions.
Expected ratings are Ba1/BB–/BB+. the savings versus US dollars, but said it was The Singapore dollar AT1s were quoted
The UK-based bank’s first AT1 offering “more than just a few basis points”. at a cash price of 100.4 at midday last
in Singapore dollars also achieved the Orders were over S$2.7bn from 99 Wednesday.
tightest pricing of any foreign bank AT1 in the accounts, with Singaporean investors taking If not called, the interest rate will reset
currency this year. 81% and others 19%. Private banks booked every five years to the initial spread of
Pricing was inside Credit Suisse’s perpetual 78%, fund managers and asset managers 368.3bp over the five-year Singapore dollar
non-call five offering, rated BB–/BB (S&P/ 20%, and banks and corporates 2%. swap offer rate. The bonds will convert to
Fitch), which priced at 5.625% in May, and even The issuer benefited from investor familiarity, equity if the bank’s common equity Tier 1 ratio
beat some higher-rated issues. UBS and Societe which has strong local ties. Singapore state drops below 7%.
Generale sold perpetual non-call five AT1s with investment holding company Temasek Standard Chartered Bank was sole
respective ratings of BBB– (Fitch) and Ba2/BB+ Holdings owns a 16% stake in StanChart, which structuring adviser and bookrunner, while
(Moody’s/S&P) at 5.875% and 6.125%. since May this year has conducted all of its Credit Suisse, OCBC, Societe Generale, UBS and
Last September’s S$750m perpetual non- business operations in the city state through a UOB were joint lead managers (no books).
call five offering from HSBC Holdings was locally incorporated subsidiary. DANIEL STANTON

COUNTRY REPORT SINGAPORE
of US$15m–$24m earn an all-in of 398.36bp In July 2017, the same three lenders subsidiary Pagani Holding III is the borrower.
via a fee of 75bp. provided a US$130m five-year financing In April, a majority of PCI shareholders
The deadline for commitments is July 26. for the merger between Fitness First and approved Platinum Equity’s offer of S$1.33
The borrower’s previous loan was a Celebrity Fitness announced in February (US$0.98) per PCI share, in a deal worth
US$70m four-year club facility in March that year. The borrowing comprised a around S$264.8m.
2016, according to LPC data. The same two US$50m term loan, a US$50m-equivalent PCI provides design, manufacturing,
banks were the lenders of the multi-tranche term financing denominated in Thai baht, testing, and supply chain services to
deal, which comprises US and Singapore a US$20m capital expenditure piece and a the automotive, industrial equipment,
dollar tranches. US$10m revolving credit facility. commercial, consumer/lifestyle, and
Founded in Australia, Meinhardt provides US investment manager Oaktree Capital medical segments.
consulting services in civil, infrastructure, Management and Malaysian private equity
structural, electrical, mechanical and firm Navis Capital Partners are the owners › LEADS TAKE 40% OF DUBAI AERO LOAN
related engineering disciplines including of Evolution Wellness, which has over 150
project management and building facades. fitness clubs across Asia. The leads on a US$440m four-year
The company has 3,500 specialists working revolving credit facility for Dubai Aerospace
in 30 offices across Australia, Asia, the › PCI LBO LOAN ATTRACTS SIX BANKS Enterprise have taken final holds of 40%
Middle East, North Africa and the United combined on the deal, which attracted 10
Kingdom. Six lenders have joined the US$165m other banks in general syndication.
loan backing private equity firm PLATINUM First Abu Dhabi Bank and HSBC were the
› EVOLUTION WELLNESS RAISES REFI EQUITY’s leveraged buyout of Singapore- mandated lead arrangers and bookrunners
listed electronics manufacturing services of the financing, which was specifically
EVOLUTION WELLNESS HOLDINGS has raised a producer PCI. targeted at Asian banks and increased from
US$200m four-year term loan to refinance a DBS Bank was the sole mandated lead an original size of US$300m.
facility that backed its creation following the arranger and bookrunner of the financing, The deal offered a top-level all-in pricing of
merger between two fitness chains in Asia. while EnTie Commercial Bank, E.Sun Commercial 193.75bp over Libor via an interest margin of
Kiatnakin Bank, HSBC and Standard Bank, KGI Bank, Taichung Commercial Bank, 175bp and a participation fee of 75bp.
Chartered were the mandated lead arrangers Taishin Commercial Bank and Woori Bank joined DAE FUNDING (DIFC) is the borrower.
of the club deal, which was signed in early as participants in limited syndication. Proceeds will support the company’s
June. HSBC is the facility agent. The borrowing comprises a US$95m five- future financing needs.
The financing comprises a US$150m year term loan, a US$20m five-year revolving In March, DAE increased the size of a
term loan tranche, a US$10m revolving credit facility and a US$50m six-month four-year unsecured revolver to US$600m.
credit facility and a US$40m capital bridge loan. The five-year portions pay The loan had originally been signed in
expenditure piece. interest margins of 350bp over Libor, while December at US$535m with Emirates NBD
Proceeds will also be used for working the bridge loan pays 200bp over Libor. as sole MLAB and eight other regional
capital and capital expenditure purposes. Platinum Equity’s wholly owned banks participating.
Louis Dreyfus back for revolver

Loans: Commodities trader offers similar pricing as 2018 borrowing
LOUIS DREYFUS CO ASIA has launched a sustainability performance, with an independent in Singapore. Responses are due on July 26
US$500m three-year sustainable revolving auditor providing validation. If targets have not and signing is slated for August 8.
credit facility, offering the same pricing as a been met the margin will be increased. Funds will be used for investments,
larger borrowing closed less than a year ago. Banks will receive a 10bp utilisation fee if refinancing, capital expenditure, working
ABN AMRO Bank, DBS, HSBC, OCBC and less than a third of the facility is drawn, 20bp capital and general corporate purposes.
United Overseas Bank are the mandated if 33%–66% is drawn, and 40bp if more than The pricing on the latest loan is the same
lead arrangers and bookrunners, with ABN two-thirds is drawn. as a US$600m three-year revolver the
AMRO and DBS acting as sustainability Mandated lead arrangers with borrower raised last August. Agricultural
coordinators. commitments of US$40m and above earn Bank of China Singapore, ANZ, DBS Bank,
The facility pays an interest margin of a top-level all-in pricing of 147bp via a United Overseas Bank and Westpac were
90bp over Libor, which will be adjusted based participation fee of 51bp, while lead arrangers the MLABs of that financing, which offered a
on four of the borrower’s key performance coming in for US$25m–$39m receive top-level all-in pricing of 147bp based on an
indicators comprising reductions in CO2 an all-in pricing of 145bp via a 45bp fee. interest margin of 90bp over Libor.
emissions, electricity consumption, water Arrangers taking US$10m–$24m receive an Louis Dreyfus is also in the market with a
usage and solid waste sent to landfill. This all-in of 143bp via a 39bp fee. ¥30bn (US$277m) Samurai three-year loan that
is similar to the sustainability criteria-linked The all-in calculations include the 40bp marks its return to Japan after over three years.
pricing on a US$750m North American utilisation fee assuming that more than two- Netherlands-headquartered Louis Dreyfus
revolver Louis Dreyfus closed in May. thirds of the facility will be drawn. is a commodities trading and processing
Under the terms of the latest facility the Louis Dreyfus Co BV is the guarantor of the company with businesses in grains, oilseeds,
margin will reduce in each year in which facility. sugar, coffee, cotton, juice, rice and logistics.
Louis Dreyfus makes improvements in its A bank presentation is scheduled for July 2 EVELYNN LIN

Headquartered in Dubai, DAE’s leasing typically sponsors sell at least a 50% stake A US dollar Reg S transaction with a
and engineering divisions serve over 125 in an SGX REIT IPO. short to intermediate maturity may follow,
airline customers around the world from its Dalian Wanda’s retail assets in China will subject to market conditions.
seven locations in Dubai, Dublin, Amman, be part of the REIT. Power generation company Kowepo is
Singapore and the US. DAE is currently In 2018 the group had assets of Rmb626bn wholly owned by Korea Electric Power,
rated BB+/Ba1 (S&P/Moody’s). (US$91bn) and revenue of Rmb214bn. which is 51% owned by the South Korean
For full allocations, see www.ifrasia.com. The group controlled by billionaire Wang government.
Jianlin delisted its Hong Kong-listed unit
› PAYA LEBAR PROJECT GETS S$2BN REFI Dalian Wanda Commercial Properties in 2016. › SHINHAN THINKS SUSTAINABLY
Units of Australian property group LENDLEASE › TELEDIRECT PLANS SGX LISTING SHINHAN FINANCIAL GROUP, rated A1/A (Moody’s/
GROUP have raised a S$2.005bn multi- S&P), has mandated Bank of America Merrill
tranche financing to refinance a loan that Business process services provider TELEDIRECT Lynch, BNP Paribas, Citigroup, Credit Suisse and
backed a mixed-used project in Singapore. is planning a US$250m–$300m Singapore HSBC to arrange investor meetings in Asia,
DBS Bank, OCBC Bank, Sumitomo Mitsui Exchange listing later this year, people with Europe and the US, which began on June
Banking Corp and United Overseas Bank are the knowledge of the transaction have said. 26.
mandated lead arrangers and bookrunners Founded by French entrepreneur A US dollar 144A/Reg S Tier 2
of the deal, which attracted five other Laurent Junique in 1995, the Singapore- subordinated Sustainability bond aligned
lenders in limited syndication. DBS is also headquartered company has operations in with the United Nations’ Sustainable
the security agent. Malaysia, Thailand, the Philippines, Hong Development Goals may follow, subject to
Bank of China, Hong Leong Bank and Kong, China, Japan and Spain. market conditions.
ICBC came in as lead arrangers, while It provides services such as outsourced call
Bank of East Asia and Maybank joined as centres to companies in the e-commerce,
arrangers. airline, luxury and hospitality sectors. EQUITY CAPITAL MARKETS
The deal comprises three and five-year Deutsche Bank and Goldman Sachs are
term loans of S$800m apiece, a S$154m working on the transaction. › DUKSAN TECHOPIA IPO GETS READY
one-year revolving credit facility, a S$231m Teledirect did not respond to an email
five-year revolver and a S$20m five-year asking for comment. Semiconductor manufacturer DUKSAN
bilateral piece from DBS. TECHOPIA is set to open books in July for
Milano Central, Roma Central and › RUYI GROUP TO RAISE UP TO S$500M a KRX IPO that will raise up to W77.2bn
Verona Central – units of Lend Lease – are (US$66.8m).
the borrowers of the financing, which Textiles and clothing company SHANDONG The deal comprises 4.06m shares (79%
refinances a S$2.12bn loan signed in RUYI TECHNOLOGY GROUP is working on a primary/21% secondary) being marketed
September 2015. S$300m–$500m (US$221m–$369m) in an indicative price range of W17,000–
DBS, OCBC and SMBC were the MLABs of real estate investment trust listing of W19,000. The range values the company at
the previous loan, which attracted 10 banks its industrial assets on the Singapore W313bn–W350bn.
in limited syndication. That secured loan Exchange, people with knowledge of the The shares on offer represent about 22%
offered an all-in pricing in the mid-100s. transaction have said. of the enlarged share capital.
In 2015, a joint venture of Lend Lease The owner of brands such as Bally, SMCP, About 73% will be allocated to
and sovereign fund Abu Dhabi Investment Aquascutum and Renown is targeting a institutional investors, 20% to retail buyers
Authority won the tender with a bid price launch later this year, according to the and the rest to employee stock ownership
of S$1.672bn for the large mixed-use people. plans.
site offered for sale under Singapore’s The syndicate is being finalised. Books will open on July 17 and 18.
government land sales programme. The listed entities in the group include The deal will price on July 20. Shares are
The site in Paya Lebar district has a SMCP (Euronext Paris), Renown (Tokyo expected to be listed on August 2.
capacity for about 165,000 square metres Stock Exchange) and Shandong Ruyi NH Investment & Securities is the lead
of real estate projects, including offices Woolen Garment (Shenzhen Stock manager.
as well as retail and residential/serviced Exchange).
apartments. Ruyi Group did not respond to an email › SOUTH KOREA TO EXIT WOORI FINANCIAL
asking for comment.
South Korea’s Financial Services
EQUITY CAPITAL MARKETS Commission said it would complete the
privatisation of WOORI FINANCIAL GROUP and sell
› DALIAN WANDA HIRES FOR REIT LISTING the government’s remaining 18.3% stake
SOUTH KOREA by 2022.
Chinese conglomerate DALIAN WANDA GROUP The exit will be carried out through the
has hired Citigroup and DBS to manage a company’s state-owned shareholder, Korea
listing of retail assets totalling US$1bn DEBT CAPITAL MARKETS Deposit Insurance Corporation, in two or
through a real estate investment trust three rounds of share sales.
structure on Singapore Exchange later › KOWEPO TO HIT ROAD Up to a 10% stake will be put up for sale
this year, people with knowledge of the in each round through an auction. If a
transaction said. KOREA WESTERN POWER, rated Aa2/AA (Moody’s/ sale does not succeed, the process will be
More banks are expected to join the S&P), has mandated Citigroup, Credit Agricole replaced by a block trade of a maximum 5%
syndicate. and HSBC to arrange investor meetings in stake, according to an announcement.
The size of the deal is not yet clear but Asia and Europe from July 1. KDIC has been the largest shareholder

COUNTRY REPORT TAIWAN
of Woori Financial Group for the past two Wistron’s previous AR factoring benchmark. Tranche D offers an annual
decades. Following the 1997 Asian financial borrowing was in December 2018 when it guarantee fee of 100bp.
crisis, the government injected W12.8trn to signed a US$610m 364-day facility. Mega Lin Bo-Yuan, the chairman of Yi Lung
bail out five troubled lenders, which later also led that transaction, which offered an Development, and Lu Da-Yi, the chairman
became Woori Financial. interest margin of 90bp over Libor. of Da Sheng Development, are the
KDIC has so far recouped W11.1trn from For full allocations, see www.ifrasia.com. guarantors.
stake sales, the sale of subsidiaries, and Signing was on June 21.
dividends. › ALLTEK CLOSES US$100M LOAN For full allocations, see www.ifrasia.com.
In 2017, KDIC signed a W2.4trn deal
with seven institutional investors on the Taiwan-listed ALLTEK TECHNOLOGY has closed › YUNG SHENG OPTICAL LIFTS BORROWING
sale of a 29.7% stake in Woori Bank, which a US$100m-equivalent three-year loan
adopted a financial holding company after attracting eight lenders in general Optical lenses maker YUNG SHENG OPTICAL has
structure last year. IMM Private Equity and syndication. increased a five-year loan to NT$4.1bn from
Mirae Asset Global Investments respectively Land Bank of Taiwan was the sole a NT$3.9bn target.
acquired 6% and 3.7% stakes in the last mandated lead arranger and bookrunner Chang Hwa Commercial Bank was
sale. Hanwha Life Insurance, Tongyang of the transaction, which can be drawn in the original mandated lead arranger,
Life Insurance, Eugene Asset Management, either US or NT dollars. bookrunner and facility agent of the deal,
Korea Investment & Securities and Kiwoom The NT dollar portion pays an interest while Yuanta Commercial Bank came in with
Securities also participated in the deal. margin ranging from 100bp to 110bp over the same title.
Taibor, while the US dollar portion offers a The facility has a NT$2.4bn tranche A,
margin ranging from 105bp to 115bp over a NT$350m tranche B and a NT$1.35bn
Libor. If the borrower decides to draw funds tranche C.
in US dollars, it will pay any excess interest The margin is 65bp over Taibor, with a
TAIWAN rate beyond a 30bp difference between pre-tax interest rate floor set at 1.7%.
TAIFX and Libor. Funds are to refinance a NT$2.4bn five-
Banks were offered a top-level upfront year loan the borrower raised in June 2016
DEBT CAPITAL MARKETS fee of 13bp. and for capital expenditure and working
Alltek Technology and its subsidiary capital purposes.
› FIRST ABU DHABI SELLS FORMOSA ALLTEK TECHNOLOGY (HK) are the borrowers. Chang Hwa also led the 2016 deal,
The parent’s office building in Taipei’s which has a NT$500m term loan tranche
FIRST ABU DHABI BANK priced a US$900m five- Neihu district serves as security. Funds A, a NT$1.2bn term loan tranche B and a
year floating-rate Formosa at par with a are for refinancing and working capital NT$700m revolving credit tranche C. The
coupon of three-month Libor plus 90bp, in purposes. Signing was on Monday. interest margin on all tranches, which is
line with final guidance. In May 2016, the borrower raised a tied to the borrower’s pre-tax net profit
The Reg S senior unsecured notes have US$96m three-year loan. LBoT also led margin, ranges between 110bp and 135bp
expected ratings of Aa3/AA–/AA–, in line that deal, which could be drawn in either over three or six-month Taibor.
with the issuer. The bonds will be listed in US or NT dollars. It paid a margin of Yung Sheng Optical, a wholly owned unit
Taipei and London. 115bp over three or six-month Taibor of Taiwan-listed Ginko International, was
Credit Agricole Taipei branch, HSBC (Taiwan) with a pre-tax interest rate floor set at established in 2010 in Taichung.
and Standard Chartered (Taiwan) were joint 1.9% for NT dollars or 126bp over three For full allocations, see www.ifrasia.com.
bookrunners. First Abu Dhabi Bank was or six-month Libor for US dollars. If the
structuring agent. borrower decided to draw funds in US › JIH SUN INCREASES LOAN TO NT$3.6BN
dollars, it would pay any excess interest
rate beyond a 30bp difference between JIH SUN INTERNATIONAL LEASING & FINANCE has
SYNDICATED LOANS TAIFX and Libor. increased a three-year refinancing to
The borrower makes semiconductor NT$3.6bn from a NT$3bn target after
› WISTRON RAISES US$580M AR FACILITY components for the telecom industry. attracting 10 lenders in syndication.
For full allocations, see www.ifrasia.com. Bank of Taiwan was the mandated
Taiwanese electronics manufacturer WISTRON lead arranger and bookrunner of the
has raised a US$580m 364-day accounts › YI LUNG, DA SHENG RAISE LOAN transaction, which pays an interest margin
receivables factoring facility from five lenders. of 105bp over three-month Taibor, with a
Mega International Commercial Bank was Property developers YI LUNG DEVELOPMENT pre-tax interest rate floor of 1.7%. Lenders
the sole mandated lead arranger and CONSTRUCTION and DA SHENG DEVELOPMENT have were offered a top-level upfront fee of 25bp.
bookrunner of the transaction, which raised a NT$4.571bn (US$147m) six-year The loan carries personal guarantees from
has a US$580m tranche A for Wistron loan. the borrower’s chairman as well as a major
and a US$580m tranche B for British Land Bank of Taiwan was the sole shareholder of parent Jih Sun Holdings.
Virgin Islands-incorporated AII HOLDING. mandated lead arranger and bookrunner of Funds are to refinance the borrower’s
The borrower can only draw a maximum the deal, which has a NT$2.513bn tranche NT$3bn three-year revolving credit facility
amount of US$580m combined from the A, a NT$1.323bn tranche B, a NT$626m signed in June 2016. BoT also led that deal,
two portions. tranche C and a NT$109m guarantee which pays a margin of 105bp over three-
The deal pays an interest margin of tranche D. month Taibor, with a pre-tax interest rate
100bp over Libor. Funds are for working Tranche A offers an interest margin floor of 1.7%.
capital purposes. Accounts receivables from of 93.9bp over the one-year Taiwan post The borrower last tapped the market
China’s Lenovo Group back the financing. office savings rate, while tranches B and in August 2018 with a NT$2.6bn-
Signing was on June 21. C offer a margin of 98.7bp over the same equivalent three-year deal. Bank SinoPac,

Hua Nan Commercial Bank, Land Bank Bank of Ayudhya is sole lead manager for leasing company, is sole lead manager for
of Taiwan, Shin Kong Commercial Bank the bond, rated AA by Tris. Proceeds will be the deal, rated A– by Tris. Proceeds will be
and Yuanta Commercial Bank were used to refinance debt as well as fund new used to fund the company’s expanding loan
the MLABs of that transaction, which investments and working capital needs. portfolio.
comprised a NT$2.2bn tranche A and The Thai mobile phone operator last sold
a US$13m tranche B. Tranche A paid Bt6.5bn of bonds in September 2017 and it
a margin of 108bp over Taibor, while has an outstanding Bt1.5bn bond that will EQUITY CAPITAL MARKETS
tranche B had a margin of 220bp over mature on July 22.
Libor. dtac TriNet is owned by Thailand’s third › DTI FUND RIGHTS GET THE NOD
For full allocations, see www.ifrasia.com. largest mobile phone services provider
Total Access Communication, which counts DIGITAL TELECOMMUNICATIONS INFRASTRUCTURE FUND
Telenor as its major shareholder. has received shareholder approval to sell
rights for 1bn units.
› KRUNGTHAI BANK TAKES T2 STEP DTIF said earlier it planned to raise
THAILAND capital for up to Bt15bn to fund the
KRUNGTHAI BANK, locally rated AA+ by Fitch, acquisition of telecom assets from True.
will offer 10-year subordinated bonds to Details such as the timing, price and
DEBT CAPITAL MARKETS institutional and high-net-worth investors the entitlement ratio are scheduled to be
next month to raise up to Bt24bn. announced later.
› KARNCHANG BUILDS TRIPLE-TRANCHER The notes will qualify as Tier 2 bank Siam Commercial Bank is working on the
capital, making KTB the third domestic transaction.
Thai construction company CH KARNCHANG bank to raise T2 capital this month. Last year the fund raised Bt53.2bn
has increased a triple-tranche bond offering KTB is also offering the tightest yield of through a preferential offer to existing
to Bt10bn (US$326m) on robust demand. 3.7% compared with the 3.8% paid by Bank investors and a public offer to retail and
A Bt3bn three-year will pay 2.46%, a of Ayudhya, locally rated AAA by Fitch, institutional investors at Bt13.90 apiece.
Bt3.5bn five-year tranche will pay 2.90% and in a Bt18.8bn 10-year note settled on June
a Bt3.5bn 10-year tranche will pay 3.66%. A 18, and the 4% paid by TMB Bank, locally
targeted minimum size of Bt4.5bn had been rated AA- by Fitch, in a Bt30bn 10-year note
indicated when the issuer started sounding settled last Friday.
out the market earlier this month. The tight pricing reflects KTB’s VIETNAM
The company received a rating upgrade state-owned status and the expected
in April when Tris promoted it to A from extraordinary support that the government
A–. The rating agency said CK’s financial will extend to the bank in the event of SYNDICATED LOANS
position remained healthy during a financial stress.
downturn in the construction industry. Subscription for the notes, locally rated › VIETCOMBANK RAISES RENEWABLES PF
CK is the second largest engineering and AA by Fitch, will be held from July 8-11.
construction company listed on the Stock Krungthai Bank is the sole underwriter and State-owned BANK FOR FOREIGN TRADE OF VIETNAM
Exchange of Thailand. lead manager. (Vietcombank) has signed a US$200m
Bangkok Bank and Krungthai Bank were joint commitment line for various domestic
lead managers for the deal, which settled › RATCHTHANI OFFERS TRIPLE-TRANCHER renewable energy projects, according to a
last Friday. Proceeds will repay certain loans statement last Wednesday from Japan Bank
and fund business expansion plans. RATCHTHANI LEASING will invite investors to for International Cooperation.
subscribe to a triple-tranche bond this week Signing took place last Tuesday.
› DTAC TRINET DIALS TRIPLE to raise Bt3bn. JBIC is funding US$100m, while MUFG,
A Bt1.9bn three-year tranche was priced Joyo Bank, Mizuho Bank and Nishi-Nippon City
DTAC TRINET is planning to raise up to Bt5bn at 3.3%, a Bt500m four-year tranche will pay Bank are providing the other half.
from a triple-trancher on its return to the 3.4% and a Bt600m five-year piece will pay MUFG is the lead arranger.
bond markets after a near-two-year absence. 3.5%. Initial price guidance was 3.2%–3.4%, JBIC is providing a partial guarantee for
The sale is expected to take place next 3.4%–3.5% and 3.5%–3.6%, respectively. the commercial portion.
month and will likely offer tenors of five, Subscription will be held on July 2-4. The facility is to finance projects such as
seven and nine years. Thanachart Bank, which owns the Thai solar power generation plants in Vietnam.
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IFRASIA

INTERNATIONAL FINANCING REVIEW ASIA

JUNE 29 2019 ISSUE 1096 www.ifrasia.com

Shanghai tech board’s first listing prices

Mind the gap: Class divide emerges in

Kookmin touts socially responsible

EQUITIES BONDS BONDS PEOPLE & MARKETS

A new IFR website is coming, featuring more content,

When you’re looking for clarity on the global capital markets,

New IPO technology COMPANYûLISTSûONûTHEûNEWûBOARD ûASûTHEREûAREûNOûLISTEDû

International Financing Review Asia June 29 2019 1

EDITOR EDITOR, IFR COMPANY INDEX KPR Agrochem 7, 34

2 International Financing Review Asia June 29 2019

COVER STORIES COUNTRY REPORT

BONDS 22 CHINA 39 PHILIPPINES

32 HONG KONG 40 SINGAPORE

12 Corruption probe rocks HK exchange 35 JAPAN 44 THAILAND

International Financing Review Asia June 29 2019 3

Tech board IPO sets modest price

Gap widens for China property offshore quota approvals, or

4 International Financing Review Asia June 29 2019

TCorp looks offshore 08 Resilient Sri Lanka 09 China cash crunch 11

International Financing Review Asia June 29 2019 5

Signs of life in India ECM deal equals 10% of the existing

6 International Financing Review Asia June 29 2019

International Financing Review Asia June 29 2019 7

8 International Financing Review Asia June 29 2019

by selling 144A eligible local

Proceeds will be used which has been in place since a

Everbright Bank Hong Kong branch, bombings would harm

Lung Bank.  back on track. In May, the IMF Source: Reﬁnitiv

International Financing Review Asia June 29 2019 9

Weibo bonds jump after debut smaller operating scale.

10 International Financing Review Asia June 29 2019

year, priced the previous day.

International Financing Review Asia June 29 2019 11

Corruption probe rocks HK exchange

Who’s moving where...

12 International Financing Review Asia June 29 2019

RBI to turn dovish after resignation LOWERINGûTHEûCOSTûOFûCAPITAL vûSAIDû.OMURAû

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

Kai Fang, head of of America Merrill  Vicky He, head of distribution of

International Financing Review Asia June 29 2019 13

gold in Indian economies where you see a large, broad-

bad debt sits everywhere, from straightforward

Who’s moving where...

14 International Financing Review Asia June 29 2019

refer debtors to the bankruptcy courts, in

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

 EY has appointed Company. He has also  Rachel Freeman Her appointment

International Financing Review Asia June 29 2019 15

Chinese banks SPDB, whose ownership structure, limited

found in banks matched with the details disclosed in

contempt in US SPDB does not have US branch operations

16 International Financing Review Asia June 29 2019

Sebi tightens FTSE Russell as a major coup for Beijing.

pledges EM index MARKETSûINDEXûTOûûANDûCOMPLETEDûTHEûlRSTû

International Financing Review Asia June 29 2019 17

York State Department of Financial Services

18 International Financing Review Asia June 29 2019

New IPO technology COMPANYûLISTSûONûTHEûNEWûBOARDûASûTHEREûAREûNOûLISTEDû

Lung Bank. back on track. In May, the IMF Source: Reﬁnitiv

RBI to turn dovish after resignation LOWERINGûTHEûCOSTûOFûCAPITALvûSAIDû.OMURAû

Kai Fang, head of of America Merrill Vicky He, head of distribution of

EY has appointed Company. He has also Rachel Freeman Her appointment

pledges EM index MARKETSûINDEXûTOûûANDûCOMPLETEDûTHEûlRSTû