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IFRASIAI N T E R N A T I O N A L F I N A N C I N G R E V I E W A S I A

APRIL 25 2020 ISSUE 1135 www.ifre.com

Kingsoft showcases cloud prospectsin test of US appetite for China IPOs

Oil price collapse put lenders on alertas borrowers come under heavy stress

Xiaomi’s dollar debut leads quarteton busiest day in weeks for PRC bonds

EQUITIES

Eagle HospitalityTrust gives a badname to foreign-sponsored S-REITs07

EQUITIES

Big share sales loomat Kotak MahindraBank as founderreduces stake08

BONDS

Suncorp reopensAussie bond marketfurther, but Big Fourstay on the sidelines08

PEOPLE & MARKETS

India’s attempts toease capital raisingto revive economyfail to convince12

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International Financing Review Asia April 25 2020 1

Upfront OPINION INTERNATIONAL FINANCING REVIEW ASIA

Tropical storms

I t never rains but it pours. The old idiom applies equally to Singapore's tropical climate as it does to the city's capital markets.

The Covid-19 pandemic is whipping up a storm over Singapore. Early successes in containing the outbreak count for nothing now that the virus is raging in foreign workers' dormitories. Lockdowns and slumping retail and hotel rents are rocking the property sector – the mainstay of the local stock market. And now an oil price collapse is threatening the commodities industry.

The coronavirus will pass, in time, but not before raising tough questions for the Singapore system.

Three weeks into the city-wide lockdown, Covid-19 is wreaking havoc on the corporate sector. Hin Leong Trading is seeking a moratorium on over US$3.5bn of bank debt after plunging oil prices wiped out its cash reserves. The trading losses will hit banks hard in the short term, but the admission that its founder concealed US$800m of losses

over several years is far more troubling in the long run. Even after oil prices recover, will Singapore's commodity

remain competitive? The details of HLT's misadventures are yet to become

clear, but the sector can ill afford another accounting scandal, less than two years after the demise of Noble Group's SGX listing.

Unfortunately for Singapore, its exposure to commodities and real estate means corporate casualties in 2020 are unlikely to be isolated events. Eagle Hospitality Trust, which listed a portfolio of US hotels less than a year ago, is already in restructuring after its US sponsor stopped paying its bills.

EHT's downfall is just as troubling for Singapore's capital markets as the oil price is for its commodity sector. In 2019, REITs and property trusts accounted for 24% of turnover on

the SGX, 12% of total market value and 98% of all new listings. The REIT format is also crucial for growth: over the

REITs. Recent deals have allowed Singaporean investors to look beyond their home market without leaving the

warehouses. UK assets, including student accommodation, were set to be the next big thing, before Covid-19 spread across the globe.

The pandemic will rein in any further thoughts of expansion, instead leading investors to reassess the entire sector – just as lenders are doing with their energy portfolios.

Light rain is a rarity in Singapore, but downpours do tend to be brief interludes in the city's hot and sunny climate. When the storm clouds will lift over the city's capital markets, however, remains unclear.

Head in the clouds

Reports of the demise of Chinese issuers in the US appear – once again – to be exaggerated.

of dollars off the market value of Luckin Coffee, and at the same time as the chairman of the US Securities and Exchange Commission is sounding the alarm over poor

companies, more Chinese companies are lining up to sell securities to US buyers.

Kingsoft Corp is preparing to list its cloud computing unit in the US after a positive reception during pre-marketing. That suggests equity investors are still willing to engage with certain Chinese issuers, especially if they offer exposure to a hot sector and a strong brand name.

from China's private sector. Smartphone maker Xiaomi, whose reliance on technology and local consumption is reminiscent of Luckin's pitch to investors, sold 39% of its US$600m 10-year bonds to US accounts.

These are encouraging signs that the world's biggest capital market remains open for business despite increased hostility between the US and China – not to mention the spike in outright xenophobia as a result of the Covid-19 pandemic. US investors have had another warning of the risks involved, but the potential of the Chinese economy cannot be ignored.

Singapore’s exposure to commodities and real estate means corporate casualties in 2020 are unlikely to be isolated events.

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2 International Financing Review Asia April 25 2020

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EMAIL ADDRESSES

360 Security Technology 25

Acciona Financiacion

Filiales Australia 19

Adani Ports & Special

Economic Zone 30

Alimentation Couche-Tard 5

AMTD Group 28

Anhui Honglu

Steel Construction (Group) 28

APA Group 17

Asian Development Bank 32

AU Optronics 34

Bank of Baroda 30

BBMG 24

Beijing Chunlizhengda

Medical Instruments 26

Bestechnic (Shanghai) 27

Binhai Investment 21

BOC Aviation 6, 23

Bohai Ferry Group 28

Caltex Australia 5

Central China New Life 25

ChemChina HK Red Bridge 24

Chengdu Easton

Biopharmaceuticals 27

China Airlines 34

China National Chemical

Engineering 26

China Railway Group 24

CIMB Group Holdings 32

Comba Telecom Systems Holdings 26

Country Garden Holdings 24

CP All 35

Dawning Information Industry 26

Dongguan Yiheda Automation 26

Dr Peng Telecom & Media Group 24

Eagle Hospitality Trust 7

Easy Click Worldwide

Network Technology 26

EBOS Group 21

EG Group 5

Envision Energy International 21

EVA Airways 34

Export-Import Bank of Korea 9

FAR 4

Far East Smarter Energy 26

Franklin Templeton 29

Fufeng Group 21

Fujian Yango Group 22

Future Retail 29

Gemdale 24

Gunkul Engineering 35

Hangzhou Tigermed Consulting 25

Hansoh Pharmaceutical 26

Hilong Holding 22

Hin Leong Trading 4

Hong Kong 28

Hongkong Huiyang International 23

Housing Development

Finance Corp 29

Housing New Zealand 32

Huachen Energy 25

Huawei Technologies 23

Ichthys Liquefied

Natural Gas project 18

Inpex 18

Kiatnakin Bank 35

Kingsoft 28

Kingsoft Cloud Holdings 5

Kingston Technology International 34

Kintor Pharmaceutical 25

Kookmin Bank 9

Korea East-West Power 34

Kotak Mahindra Bank 8

Land and Houses 35

Lenovo Group 20

Mahindra and Mahindra 29

Medtronic 10

Metcash 20, 21

MIE Holdings 4

National Silicon Industry Group 27

Ningbo Jintian Copper (Group) 26

Ningbo Joyson Electronic 26

NTPC 30

Oil Search 5

Pan Brothers 31

Peijia Medical 25

Peking University Founder Group 25

Pengurusan Aset Air 32

Petron 5, 33

Pingdu Construction Investment

Development 22

Pingdu State-owned Assets

Management 22

Pioneer Credit 19

Power Finance Corp 29

PSA International 10, 33

Qantas Airways 18

Qingdao City Construction

Investment (Group) 6, 22

Queensland Treasury Corp 17

Ramsay Health Care 19, 21

Sarana Multi Infrastruktur 31

SATS 33

Serba Dinamik Holdings 32

Shandong Qingyuan Group 4

Shanghai Allist Pharmaceuticals 27

Shanxi Meijin Energy 27

Shimao Property 27

Showa Denko 31

Singapore Airlines 34

Singapore Technologies

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Sino Biopharmaceutical 28

Slater & Gordon 19

Solar Applied Materials Technology 34

Speedcast International 17

SP Setia 32

Suncorp-Metway 8

Swiber Holdings 33

Swiber Offshore Construction 33

Sydney Airport 18

Tenaga Nasional 32

Tongwei 27

Total 18, 29

True Move H

Universal Communication 35

Udenna 4

Union Life Insurance 22

Vietnam Technological &

Commercial Joint Stock Bank 35

Virgin Australia 11

Vocus Group 18

Wanda Film Holding 27

Watabe Wedding 31

Wintime Energy 25

Woodside Petroleum 5

Wumei Technology Group 23

Xiaomi 6

Xinhu Zhongbao 6, 23

Yes Bank 30

Yida China Holdings 25

Yinson Holdings 4

Zhongtai Securities 27

COMPANY INDEX


ContentsINTERNATIONAL FINANCING REVIEW ASIA

APRIL 25 2020 ISSUE 1135

COVER STORIES

LOANS

04 Oil lenders on slippery slopeAny hope Asia’s oil and gas industry would escape the Covid-19 shock evaporated as an unprecedented plunge in oil prices reverberated around the globe.

EQUITIES

05 Kingsoft tests US bid for ChinaKingsoft Cloud received a warm welcome during pre-marketing for a US IPO of about US$300m, a sign that the US market remains open for certain Chinese issuers.

BONDS

06 Xiaomi debuts amid China buzzSmartphone maker Xiaomi made a successful debut in the 144A/Reg S bond market, on the busiest day for offshore Chinese issuers in almost two months.

NEWS

07 REIT probe deals blow to SGXLess than a year after its IPO, Eagle Hospitality Trust’s troubles are threatening to reverse the growth of Singapore’s real estate investment trust market.

08 Kotak eyes massive share sales India’s beleagured capital markets have

been hit by share sales totalling up to Rs140bn in Kotak Mahindra Bank.

08 Suncorp extends Aussie revival The bond market reopened a little when

Suncorp-Metway became the first domestic bank issuer in over two months.

09 Korean issuers join virus fight South Korean issuers have turned to

global bond markets to fund their response to the coronavirus crisis.

PEOPLE & MARKETS

12 India’s revamped TLTRO falls flatIndia’s efforts to bolster its stalled economy through easing access to capital markets have drawn scepticism after the central bank’s second TLTRO fell flat.

13 Pressure mounts on EM debt Pressure to tighten the terms of a debt

standstill for poorer countries to prevent private profiteering is growing.

14 Credit Suisse hikes provisions in Asia Credit Suisse booked a sharp

increase in credit provisions in Asia.

12 Who’s moving where UBS has appointed former CMS International chief

executive Yang Fan as chairman of global banking for Asia.

16 In brief Credit Suisse received approval from the CSRC to increase its

shareholding in Credit Suisse Founder Securities to 51% from 33.3%.

ASIA DATA

36 This week’s figures

17 AUSTRALIA

Energy infrastructure company

APA Group returned to the euro

market after a five-year absence

and paid a chunky concession

for the privilege.

21 CHINA

Binhai Investment kicked off

a consent solicitation on its

US$300m 4.45% 2020 bonds,

as it looks to bring in Sinopec

Group as a major shareholder.

28 HONG KONG

Fitch has downgraded Hong

Kong‘s rating to AA– from AA,

with stable outlook, citing the

impact of the pandemic on the

city’s economy.

29 INDIA

Franklin Templeton will wind

up six Indian debt funds, due to

a drop in bond market liquidity

and a sharp rise in investor

redemptions.

31 INDONESIA

Sarana Multi Infrastruktur has

mandated five lenders on a

five-year term financing of up

to US$500m, returning after a

four-year hiatus.

31 JAPAN

Showa Denko is set to raise a

¥275bn subordinated loan as

part of a financing package

backing its acquisition of

Hitachi Chemical.

32 MALAYSIA

State-owned water assets

and infrastructure company

Pengurusan Aset Air will sell a

multi-tranche Islamic bond in

May to raise up to M$1.3bn.

32 NEW ZEALAND

Housing New Zealand raised

NZ$300m from a long 20-year

inflation-indexed wellbeing

bond issued via institutional

private placement.

32 PHILIPPINES

Asian Development Bank

completed its second jumbo

offering in quick succession,

with a US$4.5bn five-year bond

last Tuesday.

33 SINGAPORE

Global port operator PSA

International drew final orders

of over US$4.2bn from 223

accounts for a US$650m bond

offering.

34 SOUTH KOREA

Korea East-West Power began

hold investor calls last

Thursday, ahead of a potential

US dollar 144A/Reg S bond

offering.

34 TAIWAN

RAM manufacturer Kingston

Technology International has

raised a US$600m three-year

debut revolving credit from six

Taiwanese lenders.

35 THAILAND

True Move H Universal

Communication will offer 1.5 and

5.5-year bonds next month to

institutional and high-net-worth

investors.

35 VIETNAM

Techcombank has increased

its three-year debut loan to

US$500m from a US$300m

target after attracting 19 banks

in syndication.

COUNTRY REPORT

16

News

Oil lenders on slippery slope Loans Plunge in crude prices threatens commodity-sector borrowers

BY CHIEN MI WONG

Any hopes that Asia’s oil and gas industry would escape the worst of the Covid-19 shock evaporated last week as an unprecedented plunge in oil prices reverberated around the globe.

Lenders in Asia are hurriedly reassessing their exposure after US oil prices turned negative for the first time in history and more signs emerged of stress in the corporate sector.

Chinese oil refiner SHANDONG

QINGYUAN GROUP has asked banks to defer the first principal payment on a US$955m three-year loan by a year to June 2021. Its request comes only seven months after it signed the financing last September. (See China Syndicated loans.)

The collapse of HIN LEONG

TRADING, a Singaporean oil trader with bank debts totalling over US$3.5bn, underlined the extent of the problem.

HLT sought protection from its creditors on April 17 after it was caught out by the slump in demand for oil and failed to secure new credit lines. It also admitted to hiding US$800m in futures losses over several years and said it had already sold a lot of its inventory, according to court filings, leaving its 23 lenders at risk of heavy losses.

HLT’s top five lenders – HSBC, ABN AMRO, DBS Bank, Societe Generale and OCBC Bank – account for nearly 50% of its debt, with HSBC top of the list at around US$600m.

Borrowers across Asia’s oil and gas industry are facing a liquidity squeeze arising from the coronavirus pandemic and falling oil prices. Meanwhile, lenders have cooled on the sector, leading to loan syndications being hastily revised, scrapped or extended.

“There will be a lot of

increased scrutiny from banks for oil and gas names,” said a Singapore-based syndications banker.

“Any deals in the market

will need a rethink in terms of pricing, risk and whether [the borrowers] want to raise it now.”

BLEAK OUTLOOK

Last Monday, US crude oil futures collapsed below zero for the first time in history, reaching a stunning minus US$37.63 a barrel as desperate traders paid not to take physical

delivery as the May contract expired.

Brent oil prices, the international benchmark, have collapsed around 70% since the

start of the year with the next-month contract last quoted at US$22.12 a barrel, leading to drilling halts and drastic spending cuts. Analysts do not expect the downward pressure on oil prices to ease any time soon.

Mark Lacey, head of commodities at Schroders, said the oil shock was far

greater than the 2015 sell-off, which triggered around 80 bankruptcies in the oil and gas sector.

“Many, many companies are going to go bankrupt,” said Lacey. “These bankruptcies will not be limited to the US, but will also likely occur in Asia, Latin America and Europe.”

Earlier this month, Chinese oil and gas company MIE

HOLDINGS started discussions with bondholders on a potential restructuring after missing a coupon payment. Rating agency Fitch said the company was facing a severe liquidity crunch and it believed MIE did not have the funds to cure the defaulted interest as access to new capital was limited.

RESERVE-BASED LOSSES

Among the deals in syndication, loans secured against physical oil and gas reserves are especially at risk from the the spectacular plunge in prices.

Philippine oil and shipping group UDENNA has indefinitely extended the syndication of a US$400m reserve-based lending facility, which partially

Xiaomi’s first offshore bond 06 REIT black eye 06 Kotak share sale 08


SUB-ZERO OIL

NEAR-MONTH OIL FUTURES TURNED NEGATIVE (US/B)

Source: Refinitiv

Brent WTI

–45

–30

–15

0

15

30

45

60

75

Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20

Korean Covid bonds 08 Shy Aussie banks 09 Yen bond slump 10

finances its purchase of a stake in the country’s largest gas field.

ASX-listed oil company FAR announced on March 30 that its US$300m senior secured RBL backing its offshore oil field project in Senegal cannot be completed in the current environment.

FAR cited the coronavirus pandemic and significant fall in Brent oil prices as having adversely impacted the global availability of credit.

Malaysia-listed YINSON HOLDINGS has still not closed a US$100m three-year financing, launched earlier this year, while the fate of another similar-sized five-year borrowing launched last

September is unclear. Earlier this month, the

company, which constructs and leases floating production assets for the oil and gas sector, drew down on a US$800m 12-year loan signed last November.

DEALS OFF

Meanwhile, the volatile market conditions have taken a further toll on the already-slow market for event-driven financings in Asia Pacific, with Canada’s ALIMENTATION COUCHE-TARD deciding to pull its takeover bid for petrol station operator CALTEX

AUSTRALIA due to economic uncertainties.

The Canadian convenience store chain, which had funding

commitments for the deal, raised its offer to A$8.8bn (US$5.6bn) in mid-February, while privately owned UK convenience store retailer EG

GROUP made a rival offer of A$3.9bn in cash for Caltex’s convenience stores plus shares in a spin-off company made up of its refining and fuel distribution assets.

“There is a whole ecosystem around oil companies from the refiners, aromatics to the transportation, such as the shipping industry,” said a Singapore-based head of loans syndication.

“I would be surprised if the oil glut doesn’t result in further corporate casualties. We are

monitoring this sector closely.” Earlier this month,

Australia’s WOODSIDE PETROLEUM put in place US$1.2bn in loans, taking steps to deal with the fallout of Covid-19. The lenders participating in the latest financing are not known.

OIL SEARCH, another Australian company, is seeking an extension of bilateral loans totalling US$300m by nine months to June 2021.

Last week Philippine oil refiner PETRON closed a ¥15bn (US$139m) debut Samurai loan. Although it was increased from an original US$100m-equivalent target, the borrower failed to attract any lenders to a US dollar tranche.

Kingsoft tests US bid for China Equities Cloud services spin-off is first China-to-US listing since Luckin scandal

BY FIONA LAU

KINGSOFT CLOUD HOLDINGS last week received a warm response during pre-marketing for a US IPO of about US$300m, in an early sign that the US market remains open for certain Chinese issuers despite the latest accounting scandal involving a US-listed Chinese company.

Kingsoft’s proposed float is the first sizeable China-to-US IPO since Luckin Coffee revealed last month it had reported some fabricated sales numbers.

Bankers have been worried that the subsequent collapse of Luckin’s stock would dent confidence in Chinese companies and affect the pipeline of those planning to list in the US.

Investors, though, did not turn their back on Kingsoft Cloud, thanks to the solid track record of its Hong Kong-listed parent, software company Kingsoft Corp, and the increasing demand for cloud services as a result of the Covid-19 pandemic.

“We haven’t really had much pushback, surprisingly.

We have prepared for such (Luckin-related) questions but it has not come up at all,” said a banker on the deal. “In terms of corporate governance, Kingsoft does have a listed parent and this gives investors confidence ... This corporate governance issue is much less of a concern,” said the banker. Kingsoft Corp owns 53.8% of Kingsoft Cloud. Chinese smartphone maker Xiaomi is the second-largest shareholder with a 15.8% stake.

Shares of Kingsoft Corp have risen 15% since it reported a forecast-beating operating profit for the fourth quarter of 2019 on March 24.

“Investors also like the fact that Kingsoft Cloud is in one of the few industries that are benefiting from the virus outbreak. There’s interest definitely but markets are volatile so the big question is the valuation,” said another banker on the deal.

In an investor call after the results announcement, Ng Yuk-keung, chief financial officer of Kingsoft Corp, said the pandemic has positively

impacted the cloud business as more people work online and demand for online education and entertainment is on the rise. He expects Kingsoft Cloud’s revenue to grow at least 70% in 2020 and to achieve the Ebitda breakeven point by the year-end.

Kingsoft Cloud made a loss of Rmb1.1bn (US$155m) in 2019 and a loss of Rmb1bn in 2018.

Parent Kingsoft Corp raised HK$3.1bn (US$400m) from a five-year put-three convertible bond on Thursday, wrapping up the first international equity-linked deal in Asia Pacific ex-Japan since the coronavirus outbreak.

BEST CANDIDATE

Kingsoft Cloud may be the best candidate to revive US interest in Chinese issuers after a run of recent poorly performing IPOs, due to a combination of US-China trade tensions, the pandemic and the Luckin scandal.

“From a fundamental point of view, the deal ticks all the boxes,” said a third banker on

the deal.Political tensions, however,

remain high, and US regulators have turned increasingly hostile towards Chinese firms.

The head of the US securities watchdog last Tuesday specifically warned investors of the risks of investing in Chinese companies.

In a strongly worded statement, Jay Clayton, chairman of the Securities and Exchange Commission, mentioned China repeatedly in a warning to investors over the accounting standards of foreign companies listed in the US.

“In many emerging markets, including China, there is substantially greater risk that disclosures will be incomplete or misleading and, in the event of investor harm, substantially less access to recourse, in comparison to US domestic companies,” he said.

The statement underlined again that the main US accounting watchdog cannot inspect the work that Chinese auditors do for companies listed in the US.

Kingsoft Cloud plans to open books for the IPO on or after May 4. CICC, Credit Suisse, JP Morgan and UBS are leading the transaction.


For daily news stories visit www.ifre.com

Xiaomi debuts amid China buzz Bonds Smartphone maker prices first Asian 144A/Reg S debut since early February

BY CAROL CHAN

Smartphone maker XIAOMI last Wednesday made a successful debut in the 144A/Reg S bond market, on the busiest day for offshore Chinese issuers in almost two months.

The Baa2/BBB–/BBB rated company priced a US$600m 10-year 3.375% senior unsecured bond at 98.745 to yield 3.525%, or Treasuries plus 290bp, the tight end of final guidance of 290bp–295bp and 50bp tighter than initial guidance of 340bp area.

The transaction came on the most active day in eight weeks for Chinese issuers, with BOC

AVIATION, QINGDAO CITY CONSTRUCTION

INVESTMENT (GROUP) and XINHU

ZHONGBAO also raising funds. The last time four Chinese issuers were in the market on a single day was on February 27, according to Refinitiv data.

Xiaomi played on its unique business model, leading market position and investment-grade credit profile to woo investors. Orders were said to be over US$5.5bn at final guidance and final books came to over US$4.7bn from 281 accounts with European and US investors accounting for half of the orders, including US$555m from the leads.

The strong response allowed the issuer to compress pricing by 50bp from initial guidance and upsize the deal to US$600m from an initial target of around US$500m.

NEW FUNDING CHANNEL

The Beijing-headquartered, Cayman Islands-incorporated company listed in Hong Kong in July 2018 and priced its maiden onshore renminbi bond earlier this month with a private placement of Rmb1bn (US$141m) of 365-day Panda notes at 2.78%. The new offshore bond marks a further expansion of its funding channels.

The deal is also Asia’s first 144A/Reg S debut since Adani Electricity Mumbai on February 5, when physical roadshows were still viable. Since then, travel restrictions due to the

Covid-19 pandemic have made face-to-face investor meetings impossible.

Xiaomi held 16 rounds of investor calls in total, ranging from a large Asian conference call to smaller group calls and even one-to-one chats.

Thanks to the recent slide in Treasury yields, the new bond also priced at the lowest coupon and yield for any debut 10-year note from a Triple B rated Chinese issuer. Still, pricing was on the generous side compared with ANZ’s fair

value estimate of Treasuries plus 270bp, which implied a 45bp premium over the curve of e-commerce giant JD.com, a 35bp premium over ChemChina, and 50bp discount

to Huawei Technologies.Deutsche Bank, on the other

hand, had put fair value at a G spread of 300bp–310bp and said Xiaomi’s new bond did “not look cheap”.

Deutsche wrote in a note that Xiaomi is fundamentally strong with global brand recognition, a leading smartphone market position and solid net cash position, but that these strengths are “tempered by fierce competition and rapid technology evolution in the smartphone market, relatively

short track record of stable profitability, working capital volatility and risks associated with its financial arm”.

The bookrunners pointed to JD.com, rated Baa2/BBB (Moody’s/S&P), and internet portal Baidu, rated A3/A (Moody’s/Fitch), as comparables for the new issue.

JD.com’s 3.375% 2030s were quoted at a G spread of 235bp and Baidu’s 3.425% 2030s at a G spread of 233bp ahead of the release of IPG. JD.com has the tightest Triple B spread among Chinese TMT names.

“We expected this to pay a new issue concession over JD.com since it’s a new issuer and also a consumer manufacturer, rather than JD.com which is e-commerce,” said a banker on the deal, without giving an exact number.

She said Xiaomi has overseas expansion plans and saw favourable conditions in dollars, prompting it to come to market.

News


Xiaomi held 16 rounds of investor calls in total, ranging from a large Asian conference call to smaller group calls and even one-to-one chats.

The company was open to issuing 30-year bonds if there were reverse enquiries but this did not materialise. A second banker on the deal said orders for the 30-year tranche were sufficient for a small trade, but as the overall market is still not very strong or stable, the issuer was advised to drop the 30-year and concentrate on the 10-year.

“We persuaded investors interested in the 30-year to shift their orders to the 10-year,” she said.

GLOBAL PARTICIPATION

Asia Pacific investors took 50% of the bonds, EMEA 11% and the US 39%. Asset managers and fund managers bought 71%, banks and financial institutions 17%, central banks and governments 6%, and insurance 6%.

The newly priced bonds traded slightly tighter in the aftermarket and were quoted at around 289bp/287bp late Thursday morning, but turned slightly wider to around 293bp/291bp in late afternoon, according to a trader.

Wholly owned subsidiary Xiaomi Best Time International is the issuer and Xiaomi the guarantor. The notes have expected ratings of Baa2/BBB–/BBB, on par with the guarantor.

Proceeds will be used for general corporate purposes and to repay borrowings.

Goldman Sachs, JP Morgan and Morgan Stanley were joint global coordinators. They were also joint lead managers and joint bookrunners with Bank of China, China International Capital Corp, ICBC International, CCB International, AMTD, Barclays and HSBC.

ABC International, China Everbright Bank Hong Kong branch and CMB International were listed as JBRs at the beginning of marketing but were no longer involved when the deal was priced.

Xiaomi is the world’s fourth-largest smartphone maker by units shipped in 2019, according to market data provider IDC.

REIT probe deals blow to SGX Equities Eagle Hospitality Trust casts a shadow over lesser-known foreign sponsors

BY S ANURADHA

The downfall of EAGLE HOSPITALITY

TRUST less than a year after its Singapore Exchange IPO is threatening to reverse the growth of the city’s real estate investment trust market.

The Monetary Authority of Singapore and SGX stepped in last week to order the manager and trustee of the underlying REIT, respectively Eagle REIT Hospitality Management and DBS Trustee, to take steps to protect the rights and interests of unitholders.

MAS and Singapore Exchange Regulation (SGX RegCo) have also opened a probe into the 2019 IPO.

EHT said on Friday FTI Consulting had been hired to lead a restructuring process.

“EHT may be one in a dozen REIT listings that does not do well on the SGX but it will turn investors away from smaller foreign sponsors,” an ECM banker said.

REITs and business trusts form the backbone of Singapore’s equity capital market, accounting for over 90% of mainboard IPOs in recent years. REITs from US-based sponsors have been well received by investors until recently because of the positive outlook for the US economy.

EHT, technically a stapled trust comprising EH-REIT and Eagle Hospitality Business Trust, listed on SGX on May 24 2019 following a US$566m IPO at US$0.78 per unit. Its portfolio comprises 18 freehold hotel properties in the US, including the former Queen Mary ocean liner in Long Beach, the Holiday Inn Resort Orlando Suites and the Holiday Inn Resort and Suites Anaheim.

The sponsor, Los Angeles-based property investor Urban Commons, is also the master tenant of EHT’s properties.

EHT requested a trading halt on March 24 after EH-REIT

defaulted on a US$341m loan, putting a block on dividend payments to unitholders. It said the default was caused by the inability of Urban Commons to pay security deposits and rents.

Although EHT blamed the Covid-19 pandemic for the reduced income at its 18

hotels, it never seemed to be in good shape. Bookbuilding for the IPO had to be extended, and the retail tranche closed undersubscribed – a rare instance for a SGX REIT.

The units have performed badly, falling to US$0.44 last November because of maintenance issues at the Queen Mary. The stock remained under pressure on selling by substantial shareholders Compass Cove Assets and Claydon Hill Investments.

Finally, the Covid-19 pandemic and loan default led to a collapse in the units. They last traded at US$0.137.

GATEKEEPING GAP

Another ECM banker said the problems in the sector put the spotlight on value-boosting financial engineering ahead of REIT listings.

He said this takes many forms. For example, sponsors may forgo dividends for the first couple of years, which enables a REIT to issue a higher dividend to other shareholders while the sponsor as master tenant of a property agrees to pay higher

rent during that time. Although sponsors are also

the master tenants in some other hospitality REITs, Urban Commons’ inability to pay some of the rent since 2019 raises questions on the rental forecasts made at the time of the IPO.

“In recent years there has been a race to attract listings on SGX. Bankers have vested interests and can get slack in the due diligence. It is time for the regulators to do more rigorous gatekeeping,” the banker said.

An SGX spokesperson said SGX Regco expects issuers to provide adequate information in compliance with prospectus disclosure requirements.

“In the case of EHT, according to forecasts in the IPO prospectus, the underlying assets generate sufficient income to support the distribution to unit holders.”

The spokesperson said SGX Regco has increased its accountability requirement for IPO due diligence as of this January. “Should issue managers fall short of our requirements, we will not hesitate to take action.”

DBS, the issue manager of the IPO declined to comment. DBS, Bank of America, BNP Paribas and UBS were the joint global coordinators and bookrunners with Deutsche Bank and Jefferies on the 2019 IPO.

MAS has directed Eagle REIT Hospitality Management to obtain the approval of the trustee before making any payments or transfers of EH-REIT’s funds. MAS has also directed the manager to restore EH-REIT’s minimum base capital and financial resources to comply with MAS’s requirements. The manager has been in breach of these requirements since December 2019.

MAS has also directed DBS Trustee to set out the actions that it will take to protect the interests of unitholders.



“In recent years there has been a race to attract listings on SGX. Bankers have vested interests and can get slack in the due diligence. It is time for the regulators to do more rigorous gatekeeping.”

Suncorp extends Aussie revival Bonds Non-major returns with covered sale as Big Four banks stay pat

BY JOHN WEAVERS

The Australian bond market reopened a little further last Monday when SUNCORP-METWAY became the first domestic bank issuer in over two months.

Given the current appetite for high-quality, defensive assets it was no surprise to see Suncorp opt for a covered offering, following a run of Commonwealth and state government supply and four covered notes backed by prime Canadian mortgages.

Suncorp raised A$750m (US$476m) from a five-year floating-rate note which priced inside 115bp–120bp area guidance at three-month BBSW plus 112bp via joint lead managers ANZ, RBC Capital

Markets and Westpac.Local syndication desks

would welcome a reappearance from Australia’s major banks – absent from the domestic market since January 13 – which would encourage a broader revival by setting reference points for other financials and corporates in the senior unsecured sector.

One Sydney-based DCM manager detects no great desire among the Big Four to access wholesale bond markets in the near term, however, given the availability of cheap alternative sources of funding.

“Deposits have been pouring in, while they can borrow from the Reserve Bank of Australia’s A$90bn Term Funding Facility for three years at a fixed

interest rate of just 0.25%,” he said.

The DCM manager also pointed to upcoming half-year results from ANZ on April 30 and National Australia Bank and Westpac the following week as another reason against imminent supply, alongside a desire to see pricing levels settle down.

“ANZ sold a US$1.25bn 10.5-year non-call 5.5 Tier 2 note Yankee on January 14 at Treasuries plus 133bp, whereas a new major bank Tier 2 would have to pay around 350bp,” he noted.

The majors are required by regulators to raise a net A$50bn in expensive subordinated Tier 2 notes, but they can afford to hold out

having gotten well ahead of the run rate over the last 10 months and with plenty of time to top up before the 2024 deadline.

COVERED BENEFITS

Given elevated spread levels and tumbling profit projections it would make sense for the majors to tap the cheapest bond market available to them, namely the local covered market.

Covered bond margins are typically around 70% of senior unsecured levels and thus become most cost-effective during periods of dislocation like the current one.

The majors largely abandoned local covered bonds after a flurry of three and five-year supply in late 2011 and early 2012 as global yields tumbled and Australian investors, who know the credits inside out, preferred the

Kotak eyes massive share sales Equities Bank has better chance than others at raising funds in current conditions

BY S ANURADHA

India’s beleagured capital markets have to absorb share sales totalling up to Rs140bn (US$1.8bn) in KOTAK MAHINDRA

BANK as billionaire founder Uday Kotak prepares to lower his stake to meet local requirements and the bank braces for a spike in bad loans.

Last week the bank’s board approved a plan to sell 65m primary shares, worth Rs75bn at current prices, through a qualified institutional placement, private placement or public offering. The follow-on represents 3.4% of the bank’s existing capital and will dilute Uday Kotak’s stake to 29%.

Separately, Kotak is expected to sell a 3% stake, worth around Rs65bn, from his existing holding, most likely through an offer for sale.

Kotak agreed in January to reduce his stake to 26% from

30% by August, ending a court battle between the bank and the regulator.

Although the outlook for Indian stocks and the banking

sector remains cautious in light of the Covid-19 pandemic, market participants feel Kotak Mahindra Bank has a better chance than any other bank at raising such a large sum. This is despite the slight underperformance of the private sector lender’s shares, which are down 26% so far this year against 23% for the S&P BSE Sensex.

“HDFC Bank and Kotak Bank are the two shining stars in the Indian banking universe. There is some nervousness over HDFC Bank on its impending change

in leadership while Kotak Bank has no such issues,” an ECM banker said.

Aditya Puri, HDFC Bank’s CEO since it was established

in 1994, is due to retire in October. The bank is yet to confirm a replacement and there is a question mark over the continuation of its rapid growth under new leadership.

LOWER RETURN ON EQUITY

It remains to be seen what discount Kotak Mahindra Bank is willing to give this time on the shares. In 2017, it sold Rs58bn of new shares at a wafer-thin discount of 0.1%.

Morgan Stanley said at current prices a 65m-share sale will improve Kotak’s

estimated Tier 1 capital ratio for the fiscal year ending next March to 21.4% from 18.5%. That will give it enough capital to make provisions if 23% of loans become non-performing, up from 17% before the share sale. Its current gross non-performing loan ratio stands at 2.5%, although the Covid-19 pandemic is expected to push that higher across the industry.

The bank’s return on equity, however, will fall to 13.6% from 13.9%, according to Morgan Stanley’s report.

“The capital raise would further improve balance sheet strength of the bank, but weigh on return on equity progression,” it noted.

Although the bank’s Tier 1 capital ratio is much higher than the 6% regulatory minimum, Covid-19 and a nationwide lockdown since March 25 are slowing the economy and raising the risk that some customers will

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“All banks will have non-performing loans but where Kotak Bank stands out is its conservative underwriting practices and early warning systems.”

default. Traditionally Kotak Mahindra has lent to retail investors via home, automobile, consumer goods and credit card loans.

“All banks will have non-performing loans but where Kotak Bank stands out is its conservative underwriting practices and early warning systems,” the ECM banker said.

Some analysts point out that the bank can also use the fresh capital for mergers and acquisitions.

The share sale is subject to shareholder approval although the date has not yet been finalised. The central bank requires private bank owners to lower their holding to 40% within three years of getting a banking licence, 20% within 10 years and to 15% within 15 years. Uday Kotak has won an exemption to those rules by capping his voting rights at 15% from April 1.

Owners are allowed to reduce their stake in a company either through an offer for sale of secondary shares or through a QIP of primary shares.

Korean issuers join virus fight Bonds Kookmin Bank deepens social bond market with Covid-19 debut

BY JIHYE HWANG

South Korean issuers have turned to global bond markets to fund their response to the coronavirus crisis, joining government efforts to shore up the country’s ailing economy.

KOOKMIN BANK, rated Aa3/A+ (Moody’s/S&P), raised US$500m from the country’s first Covid-19 sustainability bond in the international public market, while EXPORT-IMPORT BANK OF KOREA (Kexim), rated Aa2/AA/AA–, printed a US$1.45bn-equivalent dual-tranche bond to support Korean exporters.

All three tranches across the two deals priced inside initial guidance by 35bp or more and traded tighter in the secondary market, underlining the appeal of their high-grade pedigree. The bonds were also oversubscribed, with Kookmin’s social bond covered almost eight times.

Sean McNelis, global co-head of debt capital markets at HSBC, a joint bookrunner on both deals, said the Kookmin transaction showed strong investor interest in the Covid-19 alleviation format, particularly when it met social bond eligibility criteria.

“We expect other issuers to follow a similar issuance format in the coming months,” he said.

Kookmin intends to use around 90% of the proceeds to extend loans to virus-hit SMEs, small offices and home businesses. The rest will be used for ESG-related projects.

Though not formally labelled as a social bond, Kexim’s new US$700m three-year floater came alongside a €700m green tranche, the biggest offering in euros from Asia ex-Japan ex-Australia since January.

Bank of China’s Macau branch sold Covid-19 bonds in Hong Kong dollars and Macau patacas in February, but other issuers have chosen not to use the label. Indonesia said it would use part of the proceeds of a recent US$4.3bn bond offering to fund

its virus response and fellow Korean lender Shinhan Bank raised US$50m from a private placement to offer support to virus-hit small shops.

“It is encouraging to see capital markets playing a key role in the delivery of economic support to people, businesses and societies affected by this crisis,” said HSBC’s McNelis.

Kookmin’s 1.75% five-year 144A/Reg S senior unsecured notes priced at 99.420 to yield 1.872%, or Treasuries plus 150bp, inside initial guidance of 195bp area. The bonds received final orders of over US$3.9bn from 181 accounts and paid no new issue concession, according to bankers on the deal.

“The deal priced 5bp inside of where we saw fair value after receiving strong orders from Asia that were enough to support the whole transaction,” said a banker on the deal.

The Korean bank’s 2023s and like-rated Kexim’s 2025s provided pricing references and were trading around Treasuries plus 137bp and plus 90bp.

Asia took 70% of the bonds, the US 19% and Europe 11%. Fund managers bought 64%, banks and financial institutions 23%, insurers and pension funds 11% and private banks 2%.

SWEET SPOTS

Kexim’s three-year floating-rate note priced at par to yield three-month Libor plus 120bp, inside initial guidance of plus 160bp area.

The deal received orders of over US$5.1bn from 240 accounts, indicating a clear preference among investors for FRNs at current levels, according to a different banker on the deal.

The 0.829% five-year green bond priced at par to yield 105bp over mid-swaps, again inside initial guidance of 140bp area. Orders exceeded €3.2bn from 224 investors, excluding those from the joint lead

managers.“Just like other Korean

issuers that came out earlier this month, Kexim was quick to realise that the market has moved and accept the new reality after the pandemic,” the banker said.

Fellow policy lender Korea Development Bank priced a US$500m three-year floater on April 7 at 145bp over Libor, followed by a five-year from Shinhan Bank at 170bp a day later.

Kexim’s latest benchmark continued the recovery in spreads, but still paid much more than earlier this year. Before the Covid-19 pandemic savaged credit spreads, KDB, with an identical rating, priced a US$750m three-year floater in February at three-month Libor plus 35bp.

Bankers on the deal and away put new issue concessions at negligible levels with one estimating just 2bp for the FRN and 5bp for the green bond.

Asia took 56% of the FRN and the rest went to EMEA. Banks bought 44%, followed by asset managers and fund managers at 21%, public sectors 20%, pension funds and insurers 13% and private banks and others 2%.

Asia took only 11% of the green bond, while Germany bought the most at 21%, followed by the UK at 16%, Switzerland 9%, Luxembourg 8%, France 7%, Denmark 6% and other EMEA at 22%. Fund managers bought 45%, central banks, supranationals and official institutions took 24%, pension funds and insurers 12%, banks 11% and private banks and others 8%.

BNP Paribas, Citigroup, HSBC, Societe Generale and UBS were joint bookrunners for both tranches.

Bank of America, Citigroup, Commerzbank, HSBC, Societe Generale and Standard Chartered Bank were joint bookrunners of the Kookmin Bank deal.



extra juice available in senior unsecured format.

They instead focused on the more expensive US and Europe covered markets, where they can tap strong demand from much deeper pools of investors seeking Triple A rated paper.

NAB was the last major to visit the domestic covered market with a A$1.5bn three-tranche, five-year and 10-year trade in March 2018 – only its second visit following a four-year hiatus.

Suncorp, the country’s fifth largest bank, has been the most consistent Australian issuer in the domestic covered sector since local legislation was passed in November 2011, while ING Australia made its debut in August 2018.

Other non-majors, Macquarie Bank and Bank of Queensland, have sold euro-denominated covered bonds, though nothing at home in the format.

Yen bond pipeline runs dry Bonds Asset managers stay cautious, and bankers struggle to adapt to home working

BY TAKAHIRO OKAMOTO

Yen bond bankers are hoping for a rebound in cross-border issuance after the looming Golden Week holidays, amid signs that Japanese investors have begun to return to new domestic deals.

Only four foreign issuers have sold yen bonds since the start of 2020, in stark contrast to the first quarter last year, when global banks flocked to the yen market to top up their loss-absorbing issuance before a rule change capped Japanese buying in the format.

Huge swings in rates and credit spreads in the wake of the coronavirus outbreak have forced some overseas issuers to reconsider their yen funding plans. US medical device company MEDTRONIC, which held non-deal roadshows in Tokyo in January and was

rumoured to be targeting a deal in March, has not yet launched an offering.

BNP Paribas and BPCE, both frequent Samurai issuers, have recently sold bonds in euros.

“European banks can rely on the targeted long-term refinancing operations (TLTRO), so perhaps they are not so keen to issue bonds in yen now,” said a syndicate banker in Tokyo.

ASSET MANAGERS ABSENT

Japanese investors have also reined in their risk appetite. Sources said asset managers had suffered unrealised losses in credit products – especially subordinated bonds – and are yet to fully return to the market. Banks, insurers and other investors, too, are reluctant to add to their positions while the extent of the coronavirus impact remains unclear.

According to the Japan Securities Dealers Association’s latest data tracking secondary markets, trust banks sold a net ¥10.3bn (US$95m) of Samurai bonds in March. Foreign accounts logged an even bigger

¥26.3bn of net sales in Samurai bonds.

There were some signs of interest in high-rated global credits: Aflac sold yen bonds in March, as did Berkshire Hathaway in April. Syndicate bankers, however, believe more

asset managers need to resume investing in order to bring foreign issuers back to the yen market.

“To be honest, without asset managers, it’s hard for us to give potential issuers an idea how much they would be able to raise by selling yen bonds,” a second banker said.

However, some do see the light at the end of the tunnel. In the domestic market, the biggest asset management firms have cautiously resumed purchases. The three-year tranches of recent domestic deals from East Japan Railway and Chubu Electric Power were especially popular, according to DealWatch, IFR’s sister publication.

Asset management companies prefer the three-year tenor as it receives support from the Bank of Japan, which last month said it would buy an additional ¥1trn of corporate bonds with up to three years to maturity to support the market.

A third banker is focusing more on regional investors,

Singapore Inc rides IG wave Bonds Temasek backing helps ST Engineering, PSA print tight dollar bonds

BY DANIEL STANTON

Two Singapore government-linked companies, including one rare issuer, took advantage of demand for high-quality credits last week to print well-oversubscribed US dollar deals.

SINGAPORE TECHNOLOGIES

ENGINEERING on Wednesday ended a decade-long absence from the US dollar bond market with the first Triple A offshore corporate bond from Asia for five months.

The strong response and secondary performance buoyed an offering by port operator PSA

INTERNATIONAL the following day.State investment holding

company Temasek Holdings is a major investor in both companies, giving investors confidence in their strategic importance to Singapore.

ST Engineering, rated Aaa/AAA (Moody’s/S&P), priced a US$750m 1.5% five-year Reg S bond at 99.77 to yield 1.548%. This was equivalent to Treasuries plus 120bp, inside initial guidance of 160bp area.

The technology, defence and engineering group issued the notes, which are expected to be rated AAA by S&P, through subsidiary ST Engineering RHQ. Temasek has a 52.05% stake in ST Engineering and Singapore’s Ministry of Finance holds one special share giving it veto rights.

Bonds from Clifford Capital, which carry a Singapore government guarantee, and Temasek were used as pricing references, since Singapore does not issue offshore sovereign bonds.

The leads had expected ST

Engineering to price 5bp–10bp back of parent Temasek, which had dollar bonds due 2023 and 2028 quoted at Treasuries plus 103bp and 112bp, respectively. Accounting for current market conditions, the leads expected a new Temasek five-year to pay Treasuries plus 115bp, so ST Engineering was just 5bp outside that, and inside Clifford Capital’s curve. Nomura’s sales and trading desk had put fair value for the deal at 125bp.

Despite the tight pricing, the bonds tightened 10bp in early trading on Thursday, before easing back to Treasuries plus 118bp.

WEAPONS GRADE

That good secondary performance helped PSA International, rated Aa1/AA (Moody’s/S&P), draw final orders

of over US$4.2bn for a US$650m bond offering on Thursday.

The 2.25% 10-year notes were priced at 99.822 to yield 2.270%, or Treasuries plus 165bp, inside initial guidance of 210bp area. PSA’s existing 2029 bonds were seen at Treasuries plus 160bp, so the new issue, led by DBS and HSBC, priced flat to fair value.

While PSA is a regular issuer with an easy-to-understand business and 100% ownership by Temasek, ST Engineering last sold dollar bonds in 2009 and has diverse business lines.

ST Engineering’s product offerings include tanks, machine guns, howitzers, mortars and grenade launchers, and its defence business accounted for US$2.3bn, or 29%, of revenue in 2019. Its other business lines include

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“As investors are still struggling to adapt to remote working, it may be difficult to do a huge deal in yen now, and it also depends on an issuer’s name recognition.”

aviation services and products, shipbuilding and repair, and technology for smart cities, including autonomous systems.

Investors did not seem to be deterred by the company’s weapons business, with final orders over US$4.0bn from 211 accounts. Asia took 68% of the bonds and Europe 32%. By investor type, funds booked 45%, banks and private banks 25%, central banks and public institutions 20%, and insurers 10%.

“People focused on what kinds of military business they are involved in, which is not in most investors’ negative lists,” said a source close to the deal. ST Engineering does not design, produce or sell anti-personnel mines, cluster munitions, white phosphorus munitions or their components, according to its 2019 annual report.

Last year it became the first Singaporean non-bank company to borrow in the US commercial paper market,

after setting up a US$1.5bn CP programme in August. Around US$1.1bn of paper was issued under the programme, as of December 31, mainly to finance acquisitions and for working capital requirements in the US.

ST Engineering made three acquisitions last year, buying MRA Systems, which manufactures engine housing systems for aircraft, satellite communications (satcom) company Newtec Group, and satcom anti-jamming technology provider Glowlink Communications Technology.

The new issue was the first Triple A senior corporate US dollar bond from Asia since Temasek sold €1bn (US$1.1bn) of senior bonds in a dual-tranche offering in November 2019.

DBS and JP Morgan were global coordinators for the ST Engineering trade, and bookrunners with Credit Agricole, Mizuho and Standard Chartered.

Virgin seeks new pilots Bonds Bondholders face haircuts as Aussie airline enters

administration

BY JOHN WEAVERS

VIRGIN AUSTRALIA has entered voluntary administration after failing to secure a A$1.4bn (US$888m) federal government loan, paving the way for the first default in Australia’s institutional bond market in 19 years.

Australia’s second-largest carrier owes over A$6.8bn to more than 10,000 creditors, well above the A$5.3bn of debt disclosed at the end of last year, according to its administrator.

The new total comprises about A$2.3bn of secured debt, around A$2bn of unsecured bonds, A$1.9bn of aircraft leases, A$450m owed to employees, A$167m to trade creditors and A$71m to landlords, Deloitte’s Vaughan Strawbridge revealed.

“Virgin’s [voluntary administration] announcement ... is in line with our base case assumption that any future steps taken to ensure the airline’s ongoing viability will result in economic loss to creditors, and in particular to unsecured creditors,” said Moody’s vice president Ian Chitterer.

Fitch subsequently downgraded Virgin Australia’s issuer default rating to D from CCC–.

Virgin’s outstanding senior unsecured bonds include US private placements, a US$350m October 2021 Yankee, A$150m of 8.25% May 2023 and A$250m of 8.075% March 2024 local wholesale bonds, and a A$325m 8.0% November 2024 retail note.

Trading in the local listed note is suspended, while there have been no recent bids on the two bonds in the domestic OTC market, according to one high-yield banker.

The public Yankee bond was quoted around 20 cents last week, which the banker suggested may offer some value because, with more than 10

parties expressing interest in the collapsed airline, bondholders could get back 25 to 30 cents on the dollar.

Strawbridge, who is leading efforts to recapitalise the business, said his team was reaching out to bondholders to discuss options. A first creditor meeting is scheduled for April 30.

RETAIL PAIN

Default would provide a high-profile reality check for Australia’s fledgling non-investment grade bond market and retail segment in particular.

Virgin’s retail note holders face severe capital losses just a few months after November’s A$325m five-year offering, one of the few deals to make use of the simple corporate prospectus system introduced in the Corporations Amendment Act of 2014.

This system was designed to encourage retail bond issues from listed companies, but it had few takers even before Virgin provided a dramatic reminder of the risk component of the risk-return credit equation.

Default also exposes the bonds’ lead managers and brokers to reputational damage, particularly among those local investors with no previous experience of defaults or restructurings.

ANZ, HSBC and UBS were joint leads for both of Virgin Australia’s domestic institutional bond sales while UBS arranged the retail note offer, largely through its broker network, and has no doubt been dealing with a surge of angry client calls.

The previous default in the Australian institutional market was in 2001 when HIH Insurance, then the country’s second largest general insurance company, went into liquidation.



such as specialised shinkin banks and regional lenders. Unlike asset managers who look at relative values compared to dollar/euro bonds and hence often ask for extra spreads over issuers’ dollar/euro curves, regional investors focus on relative value compared to domestic bonds.

“Medium-term senior non-preferred bonds recently priced by French banks in euros are equivalent to near 100bp over yen offer-side swaps, so I believe regional investors are happy to buy,” he said.

REMOTE WORKING

One potential problem foreign issuers may face comes from remote working. Japanese financial institutions have had to change their way of working after the government declared a state of emergency in a bid to curb the spread of Covid-19, but many have yet to comfortably adapt.

“Even some big accounts are not ready for remote working, which was a bit surprising to

me,” said a fourth banker. With the state of emergency

now extended to the entire country since April 17, regional investors too may need to adopt remote working.

“I am a bit worried that some investors might not be able to get internal approval in time, so it is a nerve-racking question whether to shorten the marketing period.”

The number of deals so far this year is less than it was in the same four-month period in 2018, when seven issuers tapped the yen market.

First-time issuers and lower-rated names are also off the cards while investors work from home. The fourth banker said lesser-known issuers may find it hard to raise a large amount until investors become more comfortable working from home.

“As investors are still struggling to adapt to remote working, it may be difficult to do a huge deal in yen now, and it also depends on an issuer’s name recognition.”

People&Markets

India’s revamped TLTRO falls flatSteps to revitalise ECM activity also meet with scepticismIndia’s efforts to bolster its stalled economy through easing access to capital markets have drawn scepticism after the central bank’s second targeted long-term repo

designed to expedite capital raisings were

On Wednesday, the Securities and Exchange Board of India relaxed rules for equity issuers, granting issuers more

This came after the Reserve Bank of India unveiled a slew of easing measures on April 17 including a second TLTRO facility for up

The TLTRO allows banks to access funds from the central bank as long as they invest

must be used exclusively to buy securities

with half set aside for small and medium-

Rs250bn on Thursday and received an underwhelming response with 14 banks

Analysts attributed the disappointing outcome to the unwillingness of banks to invest in securities of lower-rated, smaller

Some analysts said that regulators needed to do more to channel funding to

the lockdown and pointed to the defaults

“The carve-out for small and medium-

hinges on the willingness of banks to participate,” said one Indian banking sector

improving their asset-liability management

collections impacted by the lockdown and some banks not currently extending their offers of a moratorium on debt repayments, there is a short-term liability impact and we’ve seen in the past how that can quickly

LIQUIDITY RISK

as their debt collections have all but dried up after the RBI introduced a three-month moratorium on loan repayments on March 27, although many banks have not extended

The RBI circular did not mention loans

including State Bank of India have interpreted this to mean that they should be excluded due to the liquidity provided to

them to direct banks to provide them with

They have also called for other measures

the central bank similar to the one the RBI announced on April 17 for three

Under that facility, the RBI will provide

Meanwhile, bankers welcomed the reforms announced last week by Sebi to encourage more issuers to tap the capital markets but cautioned that they were unlikely to act as a catalyst until the impact

The securities regulator extended the validity of IPO or rights issue approvals from 12 months to 18 months, said that issuers

with 20% previously and relaxed the rules around market capitalisation for rights

“The regulators can make it easier but you still need the appetite to buy risk and having a roadshow helps as well,” said one Mumbai-

THOMAS BLOTT


TOP STORY REGULATION

Who’s moving where...

UBS has appointed

former China

Merchants Securities

International chief

executive Yang Fan

as chairman of global

banking for Asia.

Yang, who is due to

join UBS in Hong

Kong early next

month, has spent the

past five years as CEO

of CMS International

having joined the firm

in 2013.

The hiring of Yang,

a well-connected

banker in China,

is seen as part of

a bigger push for

the Swiss bank to

strengthen its China

franchise after

getting back its IPO

sponsorship licence

in Hong Kong in

January.

CLSA has hired

former Vanguard

Asia CEO Charles Lin as vice chairman,

effective immediately.

Lin left Vanguard

earlier this year after

more than eight years

with the investment

firm, initially as head

of institutional sales

for North Asia in

2011 before being

promoted to Asia

CEO in 2018.

Under his leadership,

Vanguard established

a joint venture with

Ant Financial Services

Group to provide

investment advisory

service to retail

customers in China.

He was previously

with Banco Itau Asia

and Deutsche Asset

Management.



Pressure mounts on EM debt termsPressure is mounting on policymakers to tighten the terms of a debt standstill for the world’s poorer countries to prevent private

Under the terms of the deal thrashed

spring meeting, the G20 group of leading economies said it will allow up to 77 countries to delay paying what is owed to them for eight months from the end

many such creditors might not agree to offer relief or else block any standstill

If that happens the money saved from paying bilateral sovereign creditors or multilaterals would simply be used to pay bondholders and other commercial creditors, rather than be directed at healthcare or reducing the impact of the

In a paper published on Tuesday, some sovereign debt restructuring advisers including Lee Buchheit, the former adviser to Greece, Argentina and other distressed

“In the absence of private sector

middle-income countries may simply be

the debt burden of poor countries if all that is achieved is a transfer to private

“If participation [by private sector creditors] is voluntary, any relief provided by private creditors that participate will

may decline to participate, particularly when their own balance sheets are being

The group has suggested that credit facilities be set up at the World Bank or similar multilateral lenders for each affected country to deposit any stayed interest or maturities so they can be used to

“The facility would be monitored by the multilateral institution to ensure that the payments that otherwise would have gone to creditors be used only for emergency funding related to the global pandemic,”

“In making these adjustments, the states concerned will not be acting in a discretionary or optional manner; in the truest sense of the word they will be acting

The group urged the G20 to support such a scheme as a way of ensuring the debt holiday applies to as wide a constituency of

representing banks, investors and other

already backed the G20’s standstill plans but said it was up to individual investors

Some have said that ripping up contracts could harm the EM sovereign debt market

Mark Walker, senior managing director at Guggenheim Securities, who is acting

Global Partners, were hopeful a voluntary approach could still succeed in getting

They wrote in a paper before the G20 deal that this could happen as long as G20

standstill if there is a similar action by the

They said such an approach worked in 2008 when European banks agreed not to accelerate loans to central and eastern European countries under the Vienna

“It should be possible to persuade most

Most creditors will be more sensitive in today’s environment to public opinion and

“The scale of the current crisis will make

effectively happened in 2010 in Greece

Greece that were used to pay private sector

private creditors that their cooperation is necessary to avoid a calamity, most private creditors will agree,” said Walker and

“Under the circumstances, there is good reason to believe that most important creditors, including private ones, will be more open than usual to participating in standstill agreements, as long as the agreements are comprehensive, so that one class of lenders is not disadvantaged over

CHRISTOPHER SPINK

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

CITIGROUP has hired

Alex Cartel as head of

investment banking

for Australia and

New Zealand from

Deutsche Bank.

Cartel is due to start

in July and will report

to Tony Osmond,

regional head of

Citigroup’s banking,

capital markets and

advisory function.

Meanwhile, Deutsche

has responded

quickly by appointing

Hugh Macdonald,

who was co-head of

investment banking

coverage alongside

Cartel, as sole head.

Cartel joined

Deutsche in 2000,

working his way

up from associate.

Macdonald joined

Deutsche in 2008

from Citigroup.

STATE BANK OF INDIA

has appointed Jayati Bansal as regional

head of East Asia.

Bansal replaces

Mahesh Kumar Sharma, who

relocated to India

earlier this month to

become deputy CEO

at SBI Life Insurance.

Based in Hong Kong,

Bansal will have

oversight of SBI’s

operations in Hong

Kong, Japan, China,

South Korea and the

Philippines in her

new role. She was

previously head of the

financial institutions

team in SBI’s

international banking

group in Mumbai.

A spokesperson for

SBI did not respond

to a request for

comment.

Follow IFR Asia @IFRAsia

Credit Suisse hikes provisions in AsiaCREDIT SUISSE booked a sharp increase in

quarter after margin calls triggered by the

The Swiss investment bank recorded

losses during the January-March quarter

primarily related to three loans, the

a defaulted US$518m loan secured against

Luckin chairman Lu Zhengyao and

The value of the pledged shares plunged more than 80% to around US$335m after Luckin said on April 2 that its chief

The increased provisions belied an

Its markets division, which has so often been its Achilles’ heel in Asia, recorded a

driven by higher revenues from structured products, emerging-market rates and

Equity sales and trading revenues

to higher revenues from prime services, partially offset by lower revenues from

In wealth management and connected, investment banking revenues fell

year earlier, although this was primarily due to unrealised mark-to-market losses in

This was partially offset by higher


People&Markets

Who’s moving where...

CITIGROUP has

promoted Rob Jahrling and Hamish Whitehead to co-

heads of Australia

and New Zealand

ECM.

They report to John

McLean, who heads

Citigroup’s Australia

and New Zealand

capital markets

origination team.

Whitehead joined

Citigroup in 2015

and is based in

Melbourne, where he

leads ECM origination

and execution for

Melbourne clients as

well as transport and

utilities coverage.

Jahrling joined

Citigroup in 2010 and

leads ECM origination

and execution from

Sydney as well as

resources coverage.

Barclays’ head of

Asia research, Sudeep Sarma, has left the

UK bank to join

STARTUP-O, a vehicle

for investors to invest

in start-ups in South-

East Asia.

Sarma was with

Barclays for 15

years, beginning

as a vice president

in the strategy and

planning department

in London before

working his way up

to become managing

director and head of

Asia research, based

in Singapore.

He was a

management

consultant at Boston

Consulting Group

previously and has

also worked at Aviva.

China cuts benchmark lending rate

rate for only the second time since the coronavirus outbreak in a widely expected move after the central bank lowered the rate at which it provides liquidity to lenders

The one-year loan prime rate was

The LPR is a lending reference rate set by 18 banks against which all new loans and

The cut to the LPR was widely expected by

and the biggest cut since the liquidity tool

The reduction on Monday to the LPR is only the second cut to the benchmark rate

Analysts said the most recent cut signals that authorities are beginning to loosen monetary policy in response to the

Beijing had previously been vocal

stimulus” for fear of exacerbating already high levels of bad debts, but authorities are likely to step up their intervention

quarterly fall in economic activity since the

The value of the pledged shares plunged more than 80% to around US$335m after Luckin said on April 2 that its chief operating officer and other employees may have fabricated sales totalling Rmb2.2bn in the final nine months of 2019.



HSBC scraps regional GBM rolesHSBC has made more changes to the leadership of its investment bank that include the axing of regional head roles, and reorganised its advisory, underwriting and restructuring unit to “sharpen” its focus on

As part of the changes, Gordon French, head

has taken a six-month sabbatical, according to one of a trio of memos to staff detailing

Andre Brandao, head of GBM in the Americas, will stay on until the end of the year to help the bank reshape its business in

regarding the Americas leadership will be

Thierry Roland, head of GBM in Europe, will step down from that role to focus on leading the disposing of unwanted assets, known as

The memo was sent by Greg Guyett, head of global banking, and Georges Elhedery,

co-heads of GBM in March and implemented other changes at that time, including pulling the securities services business together with markets into a single unit called

Global banking includes M&A advisory and debt and equity underwriting, and

income, currencies, equities and other

In a separate memo, Guyett made changes to the leadership and structure in global

banking, aimed to “tighten” the bank’s focus on supporting its staff and clients through

He named regional leaders for global David

Liaobased in Hong Kong; EMEA will be led by Philippe Henry, based in London; and the Americas will be led on a temporary basis by

Guyett appointed Patrick Nolan to a new role as head of client leadership to front a team working with clients affected by coronavirus and the “inevitable corporate restructurings” that will follow, the memo

banking coverage – led by Hugo Heath, global banking vice chair, on an interim basis, and Peter Ennsmergers and acquisitions team into the unit, led by Kamal Jabre Lex Malas, currently

will become head of investment banking

which will continue to be led by Alexi Chan, based in London, and Ray Doody, who is in

Katia Bouazza, currently head of global banking for Latin America, will be vice chair

Stuart Lea Mary MacLeod will be chief of

STEVE SLATER

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

Jane Lau has

joined CHINA CITIC

BANK INTERNATIONAL

as assistant general

manager and head

of distribution for

structured finance.

Lau started her role at

the bank earlier this

month and is based in

Hong Kong.

She was previously a

vice president for loan

distribution at DBS

Bank, having worked

at the Singaporean

bank for nine years.

Prior to DBS, she

had been with

Commerzbank and

MUFG for over five

years combined.

Private equity firm

GAW CAPITAL PARTNERS

has hired Foster Lee

as senior director for

credit investment and

corporate finance in

Hong Kong.

Prior to joining Gaw

Capital, Lee was a

managing director at

wealth management

firm Cachet Group.

Earlier, he spent one-

and-a-half years as

managing director

at Fortune Fountain

Capital.

He was previously the

head of syndicated

finance at China

Minsheng Bank’s

Hong Kong branch,

where he worked for

over five years from

2012.

private banking revenues, which grew

transaction-based revenues, higher net interest income and a one-off gain related the sale of the bank’s investment fund arm

bank’s divisions increasing expectations for

The sell-off in global equities since the coronavirus outbreak has forced major

Julius Baer and UBS to call in loans to private banking clients, in many cases

More broadly, global investment banks have been building up their reserves

The US banks have already set aside billions of dollars to cover potential loan

THOMAS BLOTT

“It is easy to dismiss a 10bp–20bp decline

conditions through a range of other tools

is used to price mortgages – could lead

THOMAS BLOTT

IN BRIEFCredit Suisse

Approval for China securities JV

CREDIT SUISSE said on April 17 it has received

approval from China’s securities regulator

to increase its shareholding in Credit Suisse

Founder Securities to 51% from 33.3%.

It said it would work with Founder Securities on

the necessary capital injection and other related

procedures.

Credit Suisse joins UBS, JP Morgan, Nomura,

Goldman Sachs and Morgan Stanley among the

foreign firms to have received approval to either

increase their shareholdings in existing JVs to

51% or set up new JVs from scratch with majority

ownership, under new rules introduced in April

2018.

HSBC, which invested under a specific trade

deal between China, Hong Kong and Macau,

was the first to acquire a majority stake in a

securities JV.

China recently relaxed the rules further,

allowing foreign banks to increase their

shareholdings to 100% from April 1, although no

banks so far have formally applied.

Established in 2008 and headquartered in

Beijing, CSFS holds sponsorship, investment

advisory and brokerage licences, the latter of

which it received in 2016. CSFS reported a net

loss of Rmb35.5m (US$5m) in 2018, the last

year for which data are available. The seven

JVs of global investment banks that were

operational in 2018 reported a combined net

loss of Rmb48.1m.

National Australia Bank

H1 earnings warning

NATIONAL AUSTRALIA BANK has warned that it will

take a A$1.14bn (US$72.1m) earnings hit due to

one-off charges in its first-half results.

Australia’s number three lender said on Monday

a change to the application of its software

capitalisation policy will reduce earnings by

A$742m after tax.

It will also book A$188m after tax in provisions

for customer-related remediation and A$214m

on the impairment of the carrying value of its

20% investment in MLC Life.

The remediation provisions will reduce its

common equity Tier 1 ratio by approximately

6bp, while the other charges will have no impact

on the ratio.

NAB recorded a core capital ratio of 10.6% as of

December 31 when it provided its first-quarter

trading update in February.

Its latest statement comes only a week after

rival Westpac Banking Corp flagged A$1.43bn in

provisions for its forthcoming first-half results,

mostly due to an expected record A$900m fine

to settle money laundering allegations.

NAB is due to report its first-half results on May 7.

BoCom International Securities

Fine for regulatory breaches

Hong Kong’s markets watchdog has fined a

local securities unit of Bank of Communications

HK$19.6m (US$2.53m) for regulatory breaches.

BOCOM INTERNATIONAL SECURITIES broke anti-money

laundering rules by not identifying deposits

made by third parties, the Securities and Futures

Commission said last Monday.

The firm is a subsidiary of Hong Kong-based

BoCom International Holdings, which in turn is a

unit of Bank of Communications.

The SFC said it also found “extensive

deficiencies” in the firm’s margin lending and

margin call policy between December 2012 and

November 2016, and that it breached other rules

including those on authorisation of transactions

and client complaints.

“BoCom International Securities ... has

taken and will take a series of optimisation

measures to address the deficiency pointed

out by Hong Kong’s SFC, aiming to improve

management and control mechanism and

ensure compliance,” a spokeswoman for BoCom

International said in an emailed statement.


People&Markets

REACH THE PEOPLE WHO MATTER

For more information on the various advertising and sponsorship opportunities available within IFR Asia, contact:

Shahid Hamid: +65 9755 5031 or email [email protected]


COUNTRY REPORT Australia 17 China 21 Hong Kong 28 India 29 Indonesia 31 Japan 31 Malaysia 32

New Zealand 32 Philippines 32 Singapore 33 South Korea 34 Taiwan 34 Thailand 35 Vietnam 35

AUSTRALIA

DEBT CAPITAL MARKETS

› APA PAYS UP FOR EURO EXTENSION

Energy infrastructure company APA GROUP, rated Baa2/BBB (Moody's/S&P), returned to the euro market last Thursday after a five-year absence and paid a chunky concession for the privilege.

APA followed benchmark euro issuance from fellow Aussie corporates Transurban, Toyota Australia and Telstra earlier in April, with a €600m (US$650m) long 10-year print via joint lead managers BNP Paribas, Citigroup, HSBC and JP Morgan.

Despite not qualifying for the ECB's bond buying programmes, APA's July 15 2030s attracted over €4.4bn of orders.

This enabled the leads to upsize from €500m and price well inside 250bp–260bp initial guidance at mid-swaps plus 210bp, though this still represented a new issue premium of around 25bp, according to bankers.

The bond, via subsidiary APT Pipelines, added three years onto the issuer's euro curve.

› QUEENSLAND GOES LONG AGAIN

QUEENSLAND TREASURY CORP (Aa1/AA+/AA) extended the run of state government issuance last Tuesday with a A$500m (US$316m) sale of 2.25% November 20 2041s.

The new bond priced at 98.315 for a yield

of 2.35%, equivalent to 71bp over the May 2041 ACGB and 148bp wide of EFP (10-year futures).

Citigroup was sole lead manager for the trade, as it was for QTC's previous under-the-radar sale on April 7, a A$300m 2.25% 20-year bond, priced 65bp and 137.5bp wide of the June 2039 ACGB and EFP.

In a recent research note RBC Capital Markets noted at least A$50bn of slippage in state budgets over the back end of fiscal year 2019-20 and full-year 2020-21, due to the coronavirus, bushfires and slowing domestic demand.

This would result in net issuance from the five largest states before June 30 2021 more than doubling from about A$43bn to about A$93bn as gross issuance climbs to A$140bn versus pre-crisis projections of around A$90bn.

Speedcast seeks approval for US$180m DIP Loans Satellite communications company files for Chapter 11

SPEEDCAST INTERNATIONAL is seeking approval

for debtor-in-possession financing after

filing for Chapter 11 bankruptcy protection,

according to a press release on Thursday.

The US$180m DIP for the Australian

communications satellite company includes a

US$90m new money multi-draw loan facility

and a US$90m roll-up of pre-petition debt,

according to a court filing.

An undisclosed group of pre-petition

lenders is providing the DIP.

Speedcast will receive US$35m from

the multi-draw facility upon interim court

approval, and the remaining US$55m upon

final court approval, according to the filing.

Credit Suisse is the DIP agent.

Speedcast has approximately US$689.7m

in pre-petition debt, consisting of US$87.7m

of borrowings under its revolver, US$10.6m in

outstanding letters of credit, and US$591.4m

outstanding in term loans, the court filing

shows.

The pre-petition term loans comprise

a US$425m seven-year term loan B that

Speedcast completed in May 2018 and a

US$175m add-on in September that year.

Chief restructuring officer Michael Healy

said in a first-day declaration that Speedcast

is cash-strapped and requires immediate

access to its DIP funds. As of its petition date,

the company had US$30m of cash on hand,

of which US$21m is collateral pledged to pre-

petition lenders.

The company is a major provider of

telecommunication services to the cruise

industry, which has been badly hit by the

Covid-19 pandemic.

Speedcast also has an upcoming April

28 deadline to pay down US$24m owed to

Luxembourg-based satellite company Intelsat.

“Intelsat is a critical vendor that provides

bandwidth to a majority of the [company's]

customers and the loss of the bandwidth

uplink and related services ... would

significantly and negatively impact [its]

revenues and likely make reorganization

a difficult prospect,” said Healy in the

declaration.

Intelsat is facing its own challenges

amid a liquidity crunch and disputes over

amounts owed to the company from an

incentive package created by the US Federal

Communications Commission.

Australia-based Speedcast opted for a US

bankruptcy filing given the urgency to obtain

financing and preserve recovery value, Healy

said.

“The company spent a significant

amount of time and resources analysing

restructuring alternatives in foreign

jurisdictions, particularly in Australia,” he

said. “However, given the short time frame

allowed for obtaining additional financing

and deteriorating conditions in the capital

markets, Speedcast's board of directors

commenced the Chapter 11 case to properly

restructure the company ... as well as

preserve value for its stakeholders.”

UltiSat and Globecomm Systems,

Speedcast's government business entities,

are not part of the bankruptcy proceedings.

Speedcast signed a forbearance

agreement on April 1 with lenders after it

skipped interest and principal payments due

March 31.

On April 17, the lenders extended the

forbearance agreement deadline to April 24

to negotiate the DIP financing. The lenders

have also waived a leverage covenant that

was to be tested at the end of December.

The company has suffered multiple ratings

downgrades this year.

On April 7, S&P cut it to D from CCC, citing

missed debt and interest payments. That

followed a downgrade from Moody's to Ca

on April 2. Both agencies had already cut

Speedcast's ratings in early February.

Legal counsels Weil, Gotshal & Manges,

and Herbert Smith Freehills represent

Speedcast.

Moelis & Co and FTI Consulting are also

advising the company.

SASHA PADBIDRI, MARIKO ISHIKAWA


RBC expects most states to publish their new budgets after the delayed Commonwealth budget is delivered on October 6.

SYNDICATED LOANS

› ICHTHYS LNG SPONSORS POSTPONE REFI

French oil and gas giant TOTAL and Japan's INPEX have put on hold a proposed refinancing and repricing of loans for the ICHTHYS LIQUEFIED NATURAL GAS PROJECT in Western Australia until market conditions improve.

The sponsors had appointed Citigroup as adviser and were considering a 8.5-year loan from commercial banks for refinancing as well as a repricing of a loan from export credit agencies.

Some lenders found the price talk of 140bp over Libor for the interest margin on the commercial tranche too tight given the market volatility arising from the coronavirus pandemic.

In August 2017, Total raised a US$1.8bn sponsor loan for the LNG project, after completing a repricing in June of that year for US$3bn in project-level debt.

ANZ and BNP Paribas coordinated the repricing of the US$3bn facility with most of the existing lenders stepping up to increase their commitments.

That facility matures in December 2028 and offers a margin of 95bp over Libor.

Mandated lead arrangers and bookrunners were paid a 60bp fee, MLAs received 55bp and lead arrangers earned 50bp.

In June 2017, Total also refinanced a US$600m 12.5-year loan (tranche 1) and reset the margins for a US$1.2bn 12.5-year loan (tranche 2) and a US$1.2bn subordinated piece (tranche 3). The tranches were part of a US$20bn project financing closed in December 2012.

The Ichthys LNG project commenced production in July 2018 and is located in the Browse Basin, 220km offshore Western Australia and 820km south-east of Darwin.

› QANTAS BRAVES TURBULENCE

QANTAS AIRWAYS has mandated four banks on a 10-year amortising loan of around A$300m (US$191m), its second long-tenor loan within a month.

ANZ, BNP Paribas, MUFG and Sumitomo Mitsui Banking Corp are the mandated lead arrangers and bookrunners on the loan, commitments for which are due by mid-May.

Planes form the security for the latest borrowing – similar to a A$1.05bn long-tenor loan Qantas completed in March to manage the impact of the coronavirus outbreak on its business.

That loan has a tenor of up to 10 years, pays an interest rate of 2.75% and carries no financial covenants. Qantas has pledged seven out of 11 Boeing 787-0 aircraft as security for the loan. The planes were

purchased with cash in recent years. The loan completed in March was not

syndicated and was closed soon after Moody's placed the airline's Baa2 rating under review for a possible downgrade due to the unprecedented disruption in the aviation industry.

A previous secured syndicated financing for Qantas was a A$450m 10-year asset-backed loan in October 2018.

BNP Paribas, National Australia Bank and Standard Chartered were the MLABs of the financing, which attracted a dozen lenders in general syndication and was increased from a A$300m initial target.

That loan – secured over a pool of fixed assets, including aircraft engines – pays interest margins tied to the loan-to-value ratios. It gives the borrower more flexibility whenever collateral is added or removed leading to pricing and/or collateral adjustments.

The interest margins are 175bp, 160bp and 145bp over BBSY for LTV ratios of 75%–80%, 65%–75% and less than 65%, respectively.

› VOCUS LAUNCHES A$1.4BN BORROWING

VOCUS GROUP has launched a A$1.38bn-equivalent multi-tranche loan into general syndication, paying higher pricing on its return to the market after nearly two years.

ANZ, Commonwealth Bank of Australia, HSBC and National Australia Bank are the mandated lead arrangers and bookrunners.

Sydney Airport lands A$850m loan Loans Company has combined liquidity of A$2.8bn

SYDNEY AIRPORT has put in place A$850m

(US$539m) of two and three-year bank debt

to support its balance sheet as it copes with

the fallout of the coronavirus pandemic.

The company now has combined liquidity

of A$2.8bn comprising A$430m in cash,

A$1.75bn in undrawn bank loans and around

A$600m in new US private placement notes

that will be funded in June.

This is in excess of the A$1.3bn of debt

maturing and the A$150m–$200m of

expected capital expenditure in the next 12

months.

"We remain confident in the strength of

our balance sheet and liquidity position, but

we will continue to tightly manage liquidity

and operating and capital expenditure to

reflect the significant reduction in passenger

traffic at the airport," said chief executive

officer Geoff Culbert.

Sydney Airport expects to remain

compliant with its covenant requirements

and does not see the need to raise equity

at this time, according to a filing to the

Australian Securities Exchange on Monday.

The company will not declare an interim

distribution for the half-year period ending

June 2020, given the importance of liquidity,

the current impact of Covid-19 and the

uncertain near-term trading outlook, it said

in the filing.

Sydney Airport is targeting at least a 35%

reduction in operating costs for the next 12

months from April 1, and is cutting pay for the

CEO by 20%.

Sydney Airport's previous visit to the loan

market was in May 2019, when it raised A$1.4bn

through a multi-tranche sustainability-linked

loan, the largest such syndicated financing for

the airport sector globally.

ANZ and BNP Paribas were the mandated

lead arrangers and bookrunners as well

as joint sustainability coordinators on the

loan, which attracted over 10 domestic and

international lenders.

The A$1.4bn revolver is split into a

A$570m three-year tranche, a A$530m

four-year portion and a A$300m five-year

piece, with margins tied to Sydney Airport's

sustainability performance over time.

Earlier this year, Sydney Airport raised

A$600m-equivalent from a multi-tranche

US private placement that included the first

sustainability-linked bond issued outside of

Europe.

A A$100m 20-year tranche carries a

two-way pricing structure, whereby interest

rate payments will rise or fall depending on

sustainability performance.

MARIKO ISHIKAWA


COUNTRY REPORT AUSTRALIA

The facility is split into six parts – a A$232.5m 4.25-year multi-currency bullet revolving credit tranche A1 (in Australian and US dollars), a A$232.5m 4.25-year bullet term loan tranche A2, a A$465m-equivalent 3.25-year multi-currency bullet revolver tranche B (in Australian and US dollars), a NZ$135m 3.25-year bullet revolver tranche C, a A$125m-equivalent 3.25-year multi-currency revolver D (in Australia, US, New Zealand and Singapore dollars), and a A$200m 2.25-year amortising tranche E.

The latest deal is offering initial interest margins of 290bp, 310bp and 330bp over base rates for the 2.25, 3.25 and 4.25-year tranches respectively, based on net leverage between 2.75x and 3.00x.

A lender call was scheduled last Thursday, with commitments due late May.

The Australian telecommunications company is paying more than for its previous loan completed in July 2018 when it raised a A$1.417bn-equivalent refinancing with 12 banks joining in general syndication.

The 2018 transaction comprises a A$510m-equivalent 4.25-year bullet revolver tranche A, a A$510m-equivalent 3.25-year

bullet revolver tranche B, a NZ$150m 3.25-year bullet revolver tranche C, a A$75m-equivalent 2.25-year bank guarantee and letter of credit tranche D and a A$175m 2.25-year amortising tranche E.

Tranches D and E mature in August, while tranche B and C come due in August 2021 and tranche in August 2022.

The initial interest margins were 230bp, 215bp and 200bp for tranches A, B and C, and E, respectively, based on the then net leverage of 2.5x–3.0x. Tranche D offered a margin of 135bp over BBSY/BKBM/Libor/Sibor for all levels.

› ACCIONA UNIT PUTS LOAN ON HOLD

A subsidiary of Spanish conglomerate Acciona has put on hold the syndication of a A$400m five-year term loan until market volatility stemming from the coronavirus pandemic subsides.

Sole mandated lead arranger and bookrunner ING Bank had launched the bullet loan into general syndication in early March with a commitment deadline of April 27.

The loan pays an opening interest margin of 170bp over BBSY.

MLAs were offered a participation fee of 55bp for commitments of A$75m and above, while lead arrangers were to earn a fee of 45bp for tickets of A$50m–$74m. Arrangers were offered 35bp for tickets of A$25m–$49m.

ACCIONA FINANCIACION FILIALES AUSTRALIA is the borrower. Proceeds are for general corporate purposes.

The borrower's previous visit to the loan market was in December 2018 for a A$400m five-year financing, according to Refinitiv LPC data.

Bank of America, Banco Financiero y de Ahorros, Bankinter, Caixabank, Commerzbank, HSBC, Intesa Sanpaolo, JP Morgan, National Australia Bank and Natixis were the lenders of the borrowing, which comprises a A$275m term loan and a A$125m revolving credit facility.

› RAMSAY WINS COVENANT WAIVERS

Private hospital operator RAMSAY HEALTH

CARE has won consent from lenders to amend and/or waive its net debt-to-Ebitda ratio covenant at the upcoming June and December testing dates.

The company disclosed the news last Wednesday in a filing as it launched an equity fundraising of up to A$1.4bn to partially repay its revolving debt facilities.

At December 31, Ramsay funding group – comprising its wholly owned subsidiaries but excluding Ramsay Santé and its covenant-lite debt – had committed debt facilities totalling A$3.06bn, of which A$3.054bn was drawn.

Following the equity raising, as at December 31, Ramsay's pro forma leverage will be 2.2x, and funding group leverage will be at 0.9x. Pro forma liquidity for the funding group will be at A$2.116bn and total liquidity for Ramsay Santé at A$594m as at December 31.

Ramsay has no debt maturing until October 2022.

Ramsay is also temporary suspending ordinary share dividends, while it continues to limit or defer discretionary and capital expenditure.

› SLATER & GORDON COMPLETES A&E

Law firm SLATER & GORDON has extended the maturity of its super senior facility by around 30 months and carried out some minor amendments, it said in a filing to the Australian Securities Exchange last Monday.

The maturity is now July 31 2023 from December 2020 previously.

The amendments include a requirement for a small principal repayment and the manner in which interest is paid and/or capitalised over the balance of the loan's tenor.

Pioneer seeks refi, new buyer Loans Australian company terminates LBO from Carlyle

PIONEER CREDIT has terminated a proposed

leveraged buyout by Carlyle Group and

started exploring alternative proposals with

other parties as well as lenders to refinance

debt, including A$141.6m (US$89m)

borrowed from the private equity giant.

The alternative transaction may include

a control transaction and/or the potential

refinancing of Pioneer's debt, the company

said in an ASX filing on Wednesday.

Pioneer also received unsolicited approaches

from some parties, the company said.

Pioneer is not required to pay a

reimbursement or break fee to Carlyle and

disputes claims from the private equity firm

for loss the latter has suffered.

The Australian financial services provider

sent the termination notice for the scheme

of implementation on April 19. The original

indicative timetable would have seen the deal

completed during April, the filing said.

Pioneer has commenced legal proceedings

with Carlyle after the latter refused to

withdraw a default notice on the A$141.6m

syndicated loan, which was signed on

December 20.

Pioneer received a letter on April 13 from

Robin BidCo, part of the group of entities

of Carlyle, alleging a number of breaches

under the scheme, including material adverse

changes and regulated events.

Robin BidCo intended to terminate

the scheme if the relevant circumstances

continued to exist after five business days

from the date of the notice.

On Tuesday, Carlyle issued a notice to

Pioneer stating that the outstanding amount

on the facility was immediately due and

payable. Carlyle has calculated this amount

at approximately A$165.81m.

The loan is originally due in September

and pays an interest rate of 20% per annum

currently. It includes a make-whole payment,

which requires the company to pay a

minimum of nine months of interest.

Besides the debt refinancing, Pioneer is

also looking to raise growth funding from

lenders for the medium term.

Pioneer and Robin BidCo had signed

the scheme under which the latter was to

acquire 100% of Pioneer's fully diluted shares

outstanding for A$1.82 per share. In December,

Carlyle was also in discussions to replace

Pioneer's senior debt facilities as part of proposed

LBO, which valued the latter at A$288m.

MARIKO ISHIKAWA


The company is temporarily reducing pay for its chief executive officer, directors and executive leadership team from April 20 and until June 29 to deal with the coronavirus crisis. The pay cuts may be further extended depending on the Covid-19 situation, the filing said.

As at December 31, the company had borrowings of A$93.2m, having refinanced a A$65m super senior facility maturing on December 22, according to its half-year results released on February 24.

The facility incurs fixed fees and a fixed interest rate, with interest not payable until the end of the term.

There is no amortisation required over the life of this facility. The balance of A$78.6m as at December was fully drawn.

The company was fully compliant with all financial covenants, it said at the time.

In 2019, Slater & Gordon renegotiated a A$33m asset-backed facility secured against disbursement assets. A new redraw facility of A$15m is available until September 30 and is limited through the application of covenant requirements.

As of December 31, the outstanding amount on the asset-backed financing was A$14.7m. The redraw facility had A$2.3m available.

› METCASH RAISES A$180M OF DEBT

Grocery wholesaler METCASH is raising A$330m of equity and A$180m of one-year debt facilities to increase its liquidity buffer and capitalise on potential opportunities that may arise from the coronavirus pandemic.

Proceeds from the equity raising will be used to repay bank debt, the company

said in a filing to the Australian Securities Exchange last Monday.

As of March 29, the company had up to A$860m of gross debt, of which A$345m was drawn.

In March 2019, Metcash's wholly owned subsidiary Metcash Trading raised a A$450m revolving credit facility with 15 lenders, according to Refinitiv LPC data.

ANZ, HSBC, Rabobank and Westpac Banking Corp were the mandated lead arrangers and bookrunners of the deal, which comprises a A$150m three-year tranche A, a A$200m four-year tranche B and a A$100m five-year tranche C, maturing in May 2022, May 2023 and May 2024, respectively.

The interest margins are tied to a senior leverage grid and the initial margins were 145bp, 160bp and 175bp over BBSY for tranches A, B and C, respectively.

Lenovo draws strong book for Reg S return Bonds Other unrated or high-yield issuers may have to wait longer

Unrated LENOVO GROUP has returned to the

Reg S-only dollar bond market after a two-

year absence and was able to upsize the deal

on strong demand despite a still relatively

sluggish primary market.

The US$650m five-year senior notes were

priced at par to yield 5.875% on April 17,

equal to 555bp over Treasuries and inside

initial guidance of 6.125% area.

The deal drew a final order book of over

US$2bn, including US$260m from the leads.

This allowed the issuer to exceed its initial

size target of US$300m–$500m, according

to a banker on the deal.

Lenovo still has a US$350m offshore debt

issuance quota following the transaction.

Another banker on the deal said the

offering was the biggest Reg S public deal

from an unrated issuer since New World

Development's US$950m 4.125% 10-year

bonds last July.

However, with a Reg S market still volatile

and in recovery mode, Lenovo had to pay up

like other recent issuers.

Lenovo last tapped the international bond

market in March 2018 with a US$750m

4.75% five-year bond priced at Treasuries

plus 215bp.

"It's hard to say exactly how much new

issue premium it has paid as its existing

bonds are illiquid and quotes for its 2023s

were all over the place, from G spread of

300bp to 400bp–500bp, or even 600bp,"

said the second banker.

"Lenovo is not a frequent issuer and

given its unrated nature and the low price

transparency of its secondary curve, investors

needed more time to do the credit analysis

and feedback also came within a wide range,

from 5% to 7%," he said.

Final pricing was within fair value

estimates of 5.5%–6.0%, according to

Nomura's trading desk, but was wider than

Deutsche Bank's views of 5.3%–5.4%.

Nomura's trading desk views Lenovo as a

BB+/BB credit and compared it with stronger

sector peers such as AAC Technologies and

Huawei, as well as BB+/BB names such as

Yanzhou Coal and Country Garden. Deutsche

Bank compared it with Huawei along with

weak BBB/strong BB names such as Shimao

Property and GLP China.

TRADING UP

The newly issued bonds traded up more than

one point to 101.05/101.2 early on April 17 but

pared some of the gains after some profit-

taking. They were quoted at 100.45/100.75 in

late morning that day.

Both bankers, however, said Lenovo's

successful deal does not necessary signal the

reopening of the Reg S market for unrated

issuers, or even high-yield issuers.

"The market is still volatile and there's

increasing credit differentiation. Investors will

only park their money on good names. High

quality unrated names such as Lenovo are

rare," the first banker said.

The second banker said despite the recent

recovery, pricing levels for high yield are still

demanding and he expects there will be no

quick return of high yield deals.

"The Reg S market for Chinese issuers just

reopened last week and public deals from

high-yield issuers may need a few weeks to

happen," he said.

Asia Pacific investors took 74% of Lenovo's

new bonds and EMEA 26%. Asset managers

took 60%, private banks 23%, banks 15%,

pension funds and others 2%.

The bonds will be drawn off the company's

US$3bn MTN programme.

The Chinese personal computer and

handheld device maker plans to use the

proceeds for refinancing and general

corporate purposes.

"In our view, the successful pricing displays

the company's strong access to the capital

market although the borrowing cost is

slightly higher than in recent times," Trung

Nguyen, senior credit analyst at Lucror

Analytics wrote in a note.

Lucror Analytics' fundamental credit

bias on Lenovo is "stable", in view of the

company's robust fundamentals, and as the

research firm expects the impact of Covid-19

to be limited.

BNP Paribas, Citigroup, Credit Suisse,

DBS Bank and Goldman Sachs were joint

global coordinators as well as joint lead

managers and bookrunners with Bank of Communications, China Citic Bank International, Credit Agricole, Guotai Junan International, Mizuho Securities and MUFG.

CAROL CHAN


COUNTRY REPORT CHINA

› EBOS GROUP DRAWS A$250M FOR REFI

EBOS GROUP has recently obtained a A$250m loan to refinance its bank debt, the company said in filings to the Australian and New Zealand stock exchanges last Tuesday.

The debt and working capital facilities that were refinanced totalled about A$200m.

The company received strong support from its banking partners, notwithstanding the present challenging credit market conditions, it said in the filings.

The refinancing follows the group's NZ$175m (US$105m) equity raising in 2019.

In May 2018, EBOS completed an amendment and extension to lengthen its debt maturities, which now fall between May this year and May 2023, according to Refinitiv LPC data.

The outstanding borrowing includes a NZ$100m term loan due May 29, a NZ$25m term loan maturing July 4, a NZ$44.75m term loan due May 2021, a A$50m term loan due July 2021 and a A$292.95m term loan maturing May 2023.

EBOS is a diversified Australasian marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products.

EQUITY CAPITAL MARKETS

› METCASH RESTOCKS ITS CAPITAL

Grocery wholesaler and distributor METCASH has completed a A$300m (US$190m) placement to keep the business well capitalised.

It issued 107m shares, or 11.8% of shares on issue, at A$2.80 apiece, representing a 7.9% discount to the pre-deal close of A$3.04 on April 17.

The placement generated demand from both existing shareholders and other institutional investors. About 95% of the shares were allocated to existing institutional shareholders.

The company is planning to raise an additional A$30m through a share purchase plan for eligible shareholders to subscribe new shares from April 27 to May 15.

Proceeds will be used to provide working capital and increase the company's liquidity buffer.

The placement, together with the additional liquidity obtained through short-term debt facilities of A$180m from existing lenders, will provide the company with A$852m of pro forma headroom versus the historical average gross debt of A$480m over the 11 months ended March 29 2020.

Macquarie is the lead manager and underwriter of the placement.

› RAMSAY HEALTH CARE SEALS PLACEMENT

Private hospital operator RAMSAY HEALTH

CARE has raised A$1.2bn via an institutional placement to strengthen its balance sheet as most elective surgeries have been suspended during the Covid-19 pandemic.

The placement drew strong support from domestic and offshore institutional investors, with a mix of existing and new investors.

Ramsay issued 21.4m new shares, or 10.6% of existing issued shares, at A$56 apiece, representing a 12.9% discount to the pre-deal close of A$64.29 on April 21.

It is also raising A$200m through a share purchase plan for existing eligible shareholders to subscribe new shares from April 29 to May 20.

The Covid-19 pandemic has resulted in the suspension of non-urgent elective surgery in Ramsay's major operating regions. Government support and capital management initiatives will allow the company to maintain its hospital network and position it to handle deferred surgeries once the operating environment normalises, Ramsay said. It has 72 hospital across Australia.

Ramsay will temporarily suspend ordinary share dividend payments.

Proceeds from the equity raisings will be used to partially repay Ramsay Funding Group's revolving debt facilities, which will remain available for redraw.

JP Morgan is the underwriter of the placement.

Meanwhile, lenders to the Ramsay Funding Group have provided consent to amend or waive key banking covenants tests for the new two semi-annual covenant testing points up to the December 31 2020 testing date. Ramsay's first debt facility maturity is not until October 2022.

CHINA


› BINHAI SEEKS TO AVOID COC TRIGGER

BINHAI INVESTMENT kicked off a consent solicitation on April 24 to amend the change-of-control clauses of its US$300m 4.45% November 2020 bonds, as it looks to bring in China Petrochemical Corp (Sinopec Group) as its second largest shareholder.

The China-based city-gas operator wants to avoid the triggering of the CoC bondholder put option as a result of the move.

Binhai Investment has agreed to issue

177.676m new shares at HK$1.33 each to a subsidiary of Sinopec Group. At the same time, the company's biggest shareholder TEDA Investment has also agreed to sell 227.796m existing shares to Sinopec Group, also at HK$1.33 each.

The shares will cost Sinopec Group about HK$539m (US$69.5m) in total. Upon completion, Sinopec Group will ultimately own 29.99% in Binhai Investment while TEDA's stake will be reduced to 35.43% from 60.19% currently.

Under the terms and conditions of the 2020 bonds, if TEDA ceases directly or indirectly to hold or own at least 40% of the issuer's outstanding shares, the CoC will be triggered and the issuer will need to redeem the bonds at 101% of the principal amount plus accrued interest.

The Hong Kong-listed company proposes to lower the shareholding threshold to 30% from 40% currently, and to amend the wording of the reference to the issuer from "subsidiary" to “consolidated subsidiary” to prevent any breach of the original letter of support provided by TEDA.

Binhai Investment will pay US$2.00 per US$1,000 in principal amount as consent fee if bondholders agree to the amendments. The voting deadline is May 22 at 4:00pm Hong Kong time.

Guotai Junan International is solicitation agent. DF King is information and tabulation agent.

› ENVISION ENERGY LAUNCHES TENDER

ENVISION ENERGY INTERNATIONAL has announced a tender offer for its US$129.65m senior green bonds due April 26 2021.

It has offered to buy the bonds at par, plus accrued interest.

Fitch downgraded the China-headquartered wind turbine and wind farm specialist to BB+ last July.

Envision Energy Overseas Capital issued the debut offshore bonds in 2018, with a guarantee from parent Envision Energy International. The issue size was originally US$300m, but the issuer bought back some of the bonds in 2019 and 2020, including a US$110m repurchase on April 8 this year.

The bonds were bid at a cash price of 89 on April 22, according to Refinitiv data.

HSBC is dealer manager and Morrow Sodali is information and tender agent. The offer ends on April 29.

› FUFENG REPURCHASES MORE BONDS

FUFENG GROUP has bought back more of its 5.875% senior bonds due August 28 2021.

The Hong Kong-listed maker of food additives said it repurchased US$27.258m of the bonds on April 23.


Including the latest repurchase, it has bought back a total of US$81.123m of the bonds, representing about 23.2% of the aggregate principal amount originally issued.

Fufeng said the repurchased bonds will be cancelled, bringing the outstanding size to US$268.877m.

› FUJIAN YANGO BUYS BACK 2021 BONDS

FUJIAN YANGO GROUP, rated B/BB– (S&P/Lianhe Global), on April 20 repurchased and cancelled US$56.912m of 9.875% guaranteed senior notes due 2021, according to a stock exchange filing.

The repurchase came as bondholders exercised their put option to sell back their bonds to the issuer.

Post cancellation, the outstanding principal amount of the 2021 notes has been reduced to US$28.088m.

The notes were issued in April 2018 with Yango (Cayman) Investment as the issuer and Fujian Yango Group as the parent guarantor.

In a February 26 filing, the group said it had cancelled US$25m of the 2021 notes it had repurchased.

The group has businesses in property development, education services, commodities trading and environmental services, and also has investments in financial services companies.

› HILONG ABLE TO REDEEM BOND: FITCH

HILONG HOLDING, the Chinese oilfield equipment and service provider, is expected to use readily available cash and undrawn credit facilities to redeem its US$165m 7.25% senior unsecured notes due June 2020, according to Fitch.

Fitch cut the issuer and the bond to B from B+ last Friday, with negative outlook, citing deteriorating earnings and cashflows due to the steep decline in oil prices and a potential deep and lengthy downturn.

The rating agency expects the June maturity will deplete its near-term liquidity.

Hilong is exploring financing options, including syndicated loans, bank borrowings and capital market solutions to improve its liquidity position, Fitch said.

› PINGDU LGFV PRINTS US$200M BOND

PINGDU STATE-OWNED ASSETS MANAGEMENT has priced US$200m three-year Reg S senior unsecured guaranteed bonds at par to yield 5.75%, inside initial guidance of 6.2% area.

The unrated bonds will be guaranteed by PINGDU CONSTRUCTION INVESTMENT DEVELOPMENT, which owns a 40% stake in the issuer. Pingdu State-owned Assets Management Centre holds the remaining 60%, and also owns 100% of the guarantor.

The Chinese local government financing

vehicle of Pingdu, a county-level city of Qingdao in Shandong province, plans to use proceeds for general corporate purposes, including project construction and business development.

Zhongtai International and Industrial Bank Hong Kong branch were joint global coordinators as well as joint bookrunners with Central Wealth Securities Investment.

The issuer has businesses in infrastructure construction, leasing and entrusted loans.

› UNION LIFE MAKES TENDER OFFER

UNION LIFE INSURANCE has announced an up to US$50m tender offer for its 3% notes due September 2021 of which US$470m is outstanding.

Under the offer, the Chinese life insurer will pay at least US$800 for each US$1,000 in principal amount of the notes, plus accrued and unpaid interest.

The deadline for the offer is April 28 at 4pm, London time, and settlement is expected on or about April 30.

The 2021s were trading at a bid cash price of 77.25 last week after dropping over 12 points last month, according to Refinitiv data.

HSBC is the dealer manager and Morrow Sodali is the information and tender agent.

Union Life Insurance is rated Baa3 by Moody's.

Qingdao LGFV relies on anchors Bonds Large pre-orders ensure smooth pricing

QINGDAO CITY CONSTRUCTION INVESTMENT (GROUP)

relied heavily on anchor orders for last

Wednesday's US$300m three-year Reg S

bond issue, priced at par to yield 3.99%,

inside initial guidance of 4.4% area.

About 70%–80% of orders were secured

before the local government financing vehicle

formally announced the deal on Wednesday

morning, according to a banker on the deal.

"Given the volatile market, the strong

anchor portion ensured the smooth pricing of

the deal. I think other LGFVs will also follow

suit when they launch deals later," said the

banker.

"In its last two offshore prints, actually it

also used such a tactic," she added.

Statistics were not available for the deal

but the banker said demand came mainly

from banks, asset managers and brokerages.

Qingdao Construction Investment is

the investment and financing arm of the

eastern Chinese coastal city of Qingdao. It

last tapped the dollar bond market with a

US$300m three-year bond priced at par to

yield 3.9% last November.

The latest issuance was priced fairly flat to

its own curve.

Hongkong International (Qingdao) will

issue the bonds with the benefit of a keepwell

deed, a deed of equity interest purchase

undertaking and an irrevocable cross-border

US dollar standby facility agreement issued

by Qingdao City Construction.

The proposed bonds have expected ratings

of BBB/A– (Fitch/ Lianhe), in line with the

keepwell deed provider.

Proceeds will be used to refinance offshore

debts maturing within one year.

Industrial Bank Hong Kong branch, China

Minsheng Banking Corp Hong Kong branch,

Bank of China, Zhongtai International

and Cinda International were joint global

coordinators as well as joint bookrunners and

joint lead managers with Shanghai Pudong

Development Bank Hong Kong branch. Bank

of Communications, China Everbright Bank

Hong Kong branch and AMTD were listed as

JBRs at the marketing stage but not when

the deal was priced.

Fitch said most LGFVs will benefit

from their primary role in fulfilling the

government's mandate to control the

coronavirus outbreak and execute fiscal

stimulus plans.

"We believe the LGFV sector is in a

good position to resume operations and

is protected from the pandemic due to

its minimal exposure to international

economies," the rating agency wrote on

April 15.

"Any impact will be mostly driven by

domestic issues and relate to new project

delays, which will lead to delayed revenue,

and the loss on user-based revenue due to

lower demand."

CAROL CHAN



› XINHU ZHONGBAO GETS SBLC BACKING

XINHU ZHONGBAO, rated B/B– (S&P/Fitch), has raised US$87m from a credit-enhanced two-year 11-month Reg S bond.

The senior notes priced on April 22 at 99.732 to yield 4.4%, inside initial guidance of 4.5% area.

Property developer Xinhu Zhongbao is the parent guarantor for the unrated bonds and Xinhu Oversea 2017 Investment is the issuer. China Zheshang Bank Hangzhou branch is providing a standby letter of credit.

There is a change of control put option at par.

Proceeds will be used for refinancing medium to long-term offshore debt that will become due within a year.

Guotai Junan International was the sole global coordinator as well as joint bookrunner and lead manager with CNCB Capital and Guoyuan Capital.

› HUAWEI MARKETS RMB2BN BONDS

HUAWEI TECHNOLOGIES was marketing Rmb2bn (US$283m) five-year medium-term notes in China's interbank bond market at price

guidance of 2.80%–3.40% last week, in its third onshore bond issue this year.

Final pricing was not yet announced at the time of writing.

The bonds will be issued under a Rmb20bn quota registered with Chinese financial regulators.

ICBC is the sole lead underwriter and sole bookrunner.

Lianhe Credit has assigned a AAA rating to both the issuer and the bonds.

The Chinese technology giant issued two onshore bonds in March – a Rmb2bn 3.24% five-year bond via ICBC and a Rmb2bn 3.38% via CCB.

SYNDICATED LOANS

› SHANDONG QINGYUAN SEEKS DEFERRAL

Shandong Qingyuan Group is seeking changes to the repayment schedule of a US$955m loan it signed last September as it faces a liquidity squeeze. (See News.)

The week before last, the privately controlled Chinese oil refiner held a conference call with lenders and

requested a deferment of the first instalment repayment by a year to June 2021.

The company has asked lenders for feedback but has set no specific deadline.

One banker familiar with the situation said the heavily indebted company's liquidity is tight after a rapid expansion of its production capacity.

The recent plunge in oil prices has made matters worse as Shandong Qingyuan is said to be stuck with inventory due to low demand amid the coronavirus pandemic.

Refiners are processing much less crude oil than normal as physical demand has dried up, creating a global supply glut.

ABN AMRO Bank, Commonwealth Bank of Australia, Deutsche Bank, First Abu Dhabi Bank and ING Bank were the mandated lead arrangers and bookrunners on the US$955m financing, which attracted 10 lenders in general syndication, including a unit of commodity trading giant Trafigura Beheer.

The deal offered a top-level all-in pricing of 350bp based on an interest margin of 300bp over Libor and an average life of two years.

The financing was part of an offtake contract with CNOOC Marketing (Shandong) for base oil.

HONGKONG HUIYANG INTERNATIONAL, a wholly owned offshore financing arm of Shandong Qingyuan, is the borrower. The parent and Shandong Qingyishan Petrochemical Technology are the guarantors.

› WUMEI TAPS FOR METRO CHINA LBO

China's leading retailer WUMEI TECHNOLOGY

GROUP and its joint venture with Metro have obtained loans for over €1bn (US$1.08bn) for the acquisition of a majority stake in the German retailer's China business.

China Minsheng Bank is the sole mandated lead arranger, bookrunner and underwriter of the financing, which has been fully drawn.

Limited syndication is expected to follow.

Metro announced last Thursday that it has completed the sale of a 80% stake in Metro China in exchange for net cash proceeds of more than €1.5bn. Metro retains a 20% stake in the resulting joint venture.

The acquisition represented an implied total enterprise value of €1.9bn for Metro China and a multiple of 0.7x based on its 2017–18 annual sales.

Metro started operations in China in 1996, specialising in supplying food and non-food items for hotels, restaurants, caterers as well as independent traders. It currently operates 97 stores across China,

BOC Aviation pays for size Bonds Poor outlook for global aviation industry impacts pricing

BOC AVIATION drew over US$4bn final orders

from over 230 accounts for a US$1bn 144A/

Reg S senior unsecured bond offering, even

though aircraft leasing is a sector heavily

impacted by the Covid-19 pandemic.

The five-year 3.25% bonds were priced at

99.470 to yield 3.366%, or Treasuries plus

300bp, inside initial guidance of 330bp area.

With a large deal size, the newly priced bonds

traded about 5bp wider at the beginning of

trading on Thursday but were back inside reoffer

by lunchtime, and were quoted at 297bp/295bp

wide of Treasuries by late afternoon.

Final pricing was more generous than

Nomura's trading desk fair value estimate

of Treasuries plus 290bp and CreditSights'

295bp estimate.

Nomura said it placed fair value for the new

bonds outside all other five-year senior bonds

of other Chinese leasing companies, partly

because BOC Aviation is focused entirely

on aircraft leasing amid an unprecedented

downturn in the global aviation industry,

whereas other leasing companies are more

diversified. However, it thinks the issuer's

credit profile continues to be underpinned

by the very high level of support it is

expected to receive from majority shareholder

Bank of China and the government.

The bonds, to be issued off a US$15bn

global MTN programme, are rated A– by both

S&P and Fitch, on par with the issuer.

The aircraft leasing firm plans to use

proceeds for new capital expenditure, general

corporate purposes and/or refinancing of

existing borrowings.

Asian investors took 75% of the bonds,

EMEA 10% and US 15%. Fund managers and

asset managers bought 58%, bank treasury

27%, insurance and pension funds 8%, and

private banks, corporates and others 7%.

BOC International, Citigroup, DBS Bank and

HSBC were joint global coordinators as well

as joint bookrunners with JP Morgan, Morgan Stanley, MUFG and Westpac.

S&P on March 30 revised its outlook on

BOC Aviation's A– rating to negative from

stable to reflect high uncertainty regarding

the magnitude and duration of the earnings

slump for airlines globally as a result of the

pandemic.

The rating agency said this could affect

lease collections in the next few months.

Substantial committed investments could also

add pressure on the company's credit metrics.

CAROL CHAN


a significant portion of which are owned properties.

Beijing-headquartered Wumei operates more than 1,000 stores across the country.

› CHEMCHINA SEEKS WAIVER FOR DELAY

China National Chemical Corp is seeking a temporary waiver from lenders on a US$5.5bn loan signed in 2018 over the registration process relating to a change in the borrowing entity.

The company is required to register the new borrowing entity with the State Administration of Foreign Exchange. However, the process has hit a snag following an extended Lunar New Year holiday and the lockdown and closure of businesses in China to tackle the coronavirus pandemic.

ChemChina now expects to complete the registration by June. Majority consent from lenders (by value) is required for the waiver, and no fees are on offer.

Late last year, the state-owned chemical company obtained consent from lenders to change the borrower from CNAC Century (HK) to a newly incorporated entity, CHEMCHINA HK RED BRIDGE.

Lenders had also agreed to the removal of a guarantee from CNAC Saturn (HK) as well as a removal of a pledge on the guarantor's shares and assignment of the guarantor's inter-company loans as collateral for the loan.

ChemChina had launched the amendment exercise for the US$5.5bn dual-tranche loan in the middle of last year.

The bullet loan, signed in March 2018, is split into a US$3.85bn three-year tranche A and a US$1.65bn five-year tranche B.

A total of 39 banks, including 15 mandated lead arrangers, bookrunners and equal underwriters, participated in the loan.

Proceeds refinanced a US$12.7bn bridge loan that had funded ChemChina's SFr43bn (US$43bn) acquisition of Swiss seeds and pesticides maker Syngenta.

› COUNTRY GARDEN BORROWS ON STAKES

Hong Kong-listed property developer COUNTRY GARDEN HOLDINGS is seeking a US$140m three-year loan backed by its shares in two start-ups.

BNP Paribas is the mandated lead arranger and bookrunner of the financing, which offers a top-level all-in pricing of 350bp over Libor.

Country Garden's shares in the two start-ups – online healthcare platform Tencent Trusted Doctor and online real estate brokerage Beike Zhaofang – will serve as security for the financing.

Tencent Trusted Doctor was formed through a merger between Tencent Doctorwork and Trusted Doctors in 2018. In April last year, the digital health service firm raised US$250m in an equity fundraising round led by Country Garden,

Tencent and Gaw Capital.Last November, Beike Zhaofang raised

US$2.4bn in equity from investors including SoftBank, Tencent, Hillhouse Capital, and Sequoia Capital China.

Guangdong-based Country Garden's previous visit to the market was in July last year with a US$1.17bn four-year term loan for refinancing.

That facility offered a top-level all-in pricing of 365.13bp based on an interest margin of 295bp over Libor or Hibor and an average life of 3.75 years.

RESTRUCTURING

› DR PENG ENGAGES ADVISERS

DR PENG TELECOM & MEDIA GROUP is in talks with some holders of its US$423.35m 5.05% bonds due June 1 about a potential maturity extension.

The Shanghai-listed Chinese telecommunications operator said it is considering extending the maturity and making some payments to noteholders out of its offshore assets.

It will seek consent from bondholders for the proposed changes, and will also continue to raise funds and/or sell assets to enable further payments to bondholders.

Dr Peng provides broadband and cloud computing services in China and North America, and has invested in an undersea

Gemdale causes stir with coupon cut Bonds Issuer says move is in line with T&Cs but scope of proposed reduction upsets investors

A plan by Chinese property developer

GEMDALE to slash the coupon of one of its

onshore bonds has raised objections from

investors and caught the attention of

regulators.

In an April 21 filing, the Shanghai-listed

company said it planned to adjust the

coupon of its Rmb1bn (US$141m) three-year

non-put two notes issued in 2018 to 1.50%

from 5.29% for the remaining year, effective

on May 28. If bondholders do not accept the

adjustment, they can exercise their put option

to sell back the Shanghai exchange-listed

bonds to the issuer.

The proposed coupon is lower than the

one-year Shibor rate of 1.676% and China's

one-year loan prime rate of 3.85% on April 22.

Gemdale said the move is consistent with

the bond terms, which allow it to change the

coupon at the end of second year.

Predictably, the proposal has sparked

objections from investors, who accept that

the terms allow the issuer to modify the

coupon, but say that the adjustment should

be based on the current coupon plus an extra

return, not a downward revision.

The Shanghai Stock Exchange has written

to Gemdale to ask for legal clarification

on the issue. The bonds have also been

suspended from trading since the afternoon

of April 21.

Gemdale is an active issuer in China's

exchange-traded and interbank bond

markets. On April 3 it issued Rmb1.5bn

3.05% three-year bonds and Rmb500m five-

year 3.55% bonds in the interbank market.

Gemdale also has outstanding US dollar

bonds issued offshore through subsidiaries.

There are some precedents for cuts of

onshore coupons recently, though not as steep.

On March 25 BBMG said it would lower

the coupon of its Rmb3.5bn five-year

non-put three bonds due May 2022 to

3.2% from 5.2%, effective from May 19.

In response, a number of bondholders

accounting for 91% of the principal

amount of the bond exercised their put

option to sell back the paper to the

issuer.

CHINA RAILWAY GROUP on March 10 said it

planned to change the coupon of Rmb1.3bn

three-year bonds due April 2022 to 2.7%

from 3.4%, effective from April 15. The bond

terms allow the issuer to adjust the coupon

while investors have put options at the end of

year one and year two.

Not surprisingly, most of the bondholders,

accounting for 89% of the principal amount,

exercised their put option.

CAROL CHAN



cable project between Hong Kong and Los Angeles.

Latham & Watkins is legal adviser to the company and Alvarez & Marsal is financial adviser.

The bonds, issued through Dr Peng Holding Hongkong, were downgraded to Caa1 by Moody's in May 2019. They were quoted last Tuesday at a cash price of 49, according to Refinitiv data.

› HUACHEN ENERGY HIRES PWC

HUACHEN ENERGY has hired PricewaterhouseCoopers as financial adviser for a proposed debt restructuring.

In February it said holders of more than 25% of its US$500m 6.625% senior notes due 2020 had filed to enforce a default and accelerate payment, after the issuer missed a coupon payment in November.

Holders of at least 25% of the principal amount need to demand payment in order to begin legal action and take steps towards liquidation.

The privately owned Chinese power producer failed to pay the coupon within a 30-day grace period, having previously defaulted on a domestic bank loan in November 2018.

The bonds were rated B2 when Huachen issued them in May 2017, but Moody's withdrew its company and bond ratings in February, by which time they had both been cut to Ca.

Huachen's parent company, WINTIME

ENERGY, defaulted on renminbi bonds in July 2018, adding to liquidity pressure at the subsidiary.

› PEKING FOUNDER SEEKS WHITE KNIGHT

Embattled PEKING UNIVERSITY FOUNDER GROUP is planning to introduce a strategic investor as part of its court-supervised restructuring.

The strategic investor should have at least Rmb50bn (US$7.07bn) of total assets or Rmb20bn of net assets, according to a public filing. Interested entities should submit their application to the court-appointed administrators before May 6.

The First Intermediate People's Court of Beijing on February 19 appointed a liquidation team as administrators to lead Peking Founder's restructuring. The team includes officials from the People's Bank of China, the Ministry of Education, financial regulators and relevant departments of the Beijing municipal government.

The university-linked conglomerate in late February confirmed that its failure to repay an onshore bond had led to a cross-default on US$3bn of offshore bonds. It has not made repayments to individual creditors under the terms of the court-

supervised restructuring and has asked creditors to declare their claims with the company before April 21.

In a separate filing, Peking Founder said 434 creditors due a total Rmb162.826bn have declared their claims with the administrators as at April 19.

Peking Founder will hold its first meeting with creditors on April 30.

› YIDA FACES NEW CRISIS

YIDA CHINA HOLDINGS has failed to repay US$52.854m 6.95% bonds due April 19, triggering a cross-default on loans of up to Rmb9.8bn.

In a stock exchange filing, the Hong Kong-listed Chinese real estate company said on April 23 it holds the necessary funds to make the bond payment in mainland China but is still in the process of transferring the money offshore, which it expects to happen on April 24 at the latest.

There was no update on the bond repayment at the time of writing.

The 2020 notes were left over from an exchange offer completed in March. Yida said the bond default and cross-default on the loans will not lead to any event of default on the US$224.899m March 27 2022 bonds that were issued under the exchange offer.

Yida said it has been actively communicating and negotiating with lenders to obtain waivers on the onshore loans. As of Thursday lunchtime, it had not obtained any waiver, nor received any notice from lenders to ask for accelerated payments or any other enforcement actions under any of the loans.

According to the company's legal adviser in the PRC, lenders are entitled to demand immediate repayment of the outstanding loans, accrued interest and all other amounts accrued or outstanding.


› TIGERMED THINKS BIG

Shenzhen-listed HANGZHOU TIGERMED CONSULTING plans to raise about US$1bn from a Hong Kong IPO this year, according to people close to the deal.

The Chinese clinical research service provider filed a listing application last Thursday with Bank of America, CICC, CLSA and Haitong International as sponsors. No fundraising size or timetable was mentioned.

Tigermed had a market capitalisation of Rmb57bn (US$8bn) last Thursday. The stock was up 20% this year.

The company posted net profit of

Rmb975m in 2019, up 49% from 2018. The company participated in over

400 clinical trials from 2017 to 2019. Headquartered in China, Tigermed has 15 overseas operation sites in Asia Pacific, North America and Europe.

› TRIO TO PRE-MARKET LISTINGS

Three companies are planning to start pre-marketing Hong Kong IPOs of a combined US$900m this week.

Chinese property management service provider CENTRAL CHINA NEW LIFE plans to raise up to US$300m. Books are tentatively scheduled to open on May 4.

BNP Paribas is the sole sponsor.Central China New Life posted net profit

of Rmb99m for the first six months of 2019, compared to a Rmb1.8m profit over the same period in 2018.

As of June 30 2019, the company served more than one million property owners and residents in 269 properties.

Central China New Life is controlled by Henan-based Central China Group, which also owns Hong Kong-listed developer Central China Real Estate.

PEIJIA MEDICAL, meanwhile, intends to raise about US$300m. Huatai International and Morgan Stanley are the sponsors of the medical devices maker's float.

Peijia posted a loss of Rmb242m for the nine months ended September 30 2019, compared with a loss of Rmb51m over the same period in 2018.

It makes transcatheter valve therapeutic medical devices and neurointerventional procedural medical devices.

Hillhouse Capital owns a 9.33% stake in the company.

Lastly, KINTOR PHARMACEUTICAL plans to raise US$200m–$300m.

Founded in 2009, the Chinese clinical-stage drug developer has a pipeline of five drug candidates targeting major cancer types and other androgen receptor-related diseases.

The company posted a loss of Rmb99m for the first half of 2019, compared with a Rmb38m loss a year earlier.

Co-founders Tong Youzhi and Guo Chuangxing own a combined 36.8% stake. Legend Holdings holds a 10.1% stake.

Huatai International is the sponsor. UBS is the joint global coordinator.

› 360 SECURITY PLACEMENT IS CLEARED

360 SECURITY TECHNOLOGY, formerly known as Qihoo 360 Technology, has won final approval for a Rmb10.8bn private share placement from the China Securities Regulatory Commission.

The company plans to offer up to 1.35bn


shares to up to 35 investors at a floor price to be set on the first day of issuance.

Proceeds will be used to fund three research projects and six commercial service projects.

The Chinese software maker, which delisted from the NYSE in July 2016, completed a backdoor listing in February 2018 through elevator manufacturer SJEC, the first backdoor listing by a formerly overseas-listed Chinese company since May 2016.

Huatai United Securities is the sponsor.

› CHUNLIZHENGDA MEDICAL MULLS IPO

Hong Kong-listed BEIJING CHUNLIZHENGDA MEDICAL

INSTRUMENTS is considering a secondary listing on China's A-share market.

The orthopedic implant manufacturer has hired Huatai United Securities as IPO tutor, but the listing venue has not been confirmed.

The company posted a net profit of Rmb237m in 2019, a 125% increase year on year, on revenue of Rmb855m, up 71%.

Its current market capitalisation is HK$16.8bn (US$2.2bn), based on an H-share price of HK$46.8 on April 23, down 3.5%.

The IPO proposal still needs approval from shareholders and regulators in China and Hong Kong.

› CNCE LINES UP RMB10BN FOLLOW-ON

Shanghai-listed CHINA NATIONAL CHEMICAL

ENGINEERING plans to raise Rmb10bn from a proposed private share placement.

The company will sell up to 1.48bn shares, or 30% of current shares, to up to 35 investors including largest shareholder China National Chemical Engineering Group, which owns 53.6% of the company.

The state-owned parent has committed to buy at least 17.6% of the offering.

Proceeds will be used to fund a new nylon materials project in Shandong province, a methanol project in Russia, and a coal chemical project in Shaanxi province, and to repay bank loans.

The company posted a net profit of Rmb3.1bn on revenue of Rmb110bn in 2019.

The proposal still needs approval from shareholders and regulators.

› COMBA COMPLETES FOLLOW-ON

A primary and secondary follow-on in COMBA TELECOM SYSTEMS HOLDINGS has raised HK$860m.

The deal, comprising 230m primary and 52m secondary shares, or 10.3% of the enlarged share capital, was priced at HK$3.05 apiece following marketing in

a HK$3.00–$3.15 range. The issue price offered an 11.6% discount to the pre-deal close of HK$3.45 on April 23.

The books were multiple times covered with concentrated allocations.

Selling shareholders Prime Choice Investments and Wise Logic Investments face a 90-day lock-up.

The company plans to use the proceeds to invest in 5G R&D and capacity expansion.

CICC was the lead placing agent together with DBS.

› DAWNING UNVEILS 'MADE IN CHINA' PLAN

Shanghai-listed DAWNING INFORMATION INDUSTRY plans to raise Rmb4.78bn from a proposed private A-share placement.

The company will sell up to 186m shares, or 20% of current shares, to up to 35 investors, with an individual limit of 48m shares.

Proceeds will be used to produce PC products for import substitution purposes, specifically chips, input/output modules, and built-in active control firmware, and to replenish working capital.


› DUO FILE FOR CHINEXT LISTINGS

EASY CLICK WORLDWIDE NETWORK TECHNOLOGY, a Chinese marketing service provider under the Yeahmobi brand, has filed to the China Securities Regulatory Commission for a proposed Rmb1.24bn Shenzhen ChiNext IPO.

The company plans to offer up to 75.5m shares, or 10% of the enlarged capital.

Proceeds will be used to rent new offices and servers in Xi'an city, build a R&D centre, and replenish working capital.

The top five properties on which Yeahmobi marketed its services last year were Google, Cheetah Mobile, Yino (Hongkong) Digital Technology, Bytedance, and BlueFocus International.

Jinxing Investment, owned by Xiaomi, has a a 3.8% stake in Easy Click.

Citic Securities is the sponsor.Separately, automation accessories

manufacturer DONGGUAN YIHEDA AUTOMATION has also filed for a Rmb1.15bn ChiNext IPO.

Dongguan Securities is the sponsor.

› FESE PLANS TO RECHARGE CAPITAL

Shanghai-listed FAR EAST SMARTER ENERGY has released a proposed Rmb2.55bn private placement plan.

The company will sell up to 666m shares, or 20% of the existing shares, to up to 35 investors.

Proceeds will be used to fund production of optical fibre and ultra-thin lithium-electric copper foil for lithium batteries, and replenish working capital.

› HANSOH PHARMA SELLS SHARES

HANSOH PHARMACEUTICAL has raised HK$3.49bn from a fully underwritten primary share placement.

The deal was launched with a base size of 100m shares and an upsize option of 28.5m shares in an indicative price range of HK$26.75–$27.45 per share.

The transaction was upsized to 130.4m shares, representing about 2.2% of the enlarged share capital, and priced at the bottom of the price range.

The issue price represents a 6% discount to the closing price of HK$28.45 last Tuesday.

The deal was multiple times oversubscribed with almost 70 investors participating. More than 90% of the allocations went to long-only investors, mostly existing investors. There was also strong support from sovereign wealth funds.

There is a 90-day lock-up on the company.

Hansoh plans to use the proceeds for investment in R&D activities, including drug development programmes in China and overseas, expansion of the R&D team and general working capital.

Morgan Stanley was the lead underwriter and joint placing agent with Citigroup.

› JINTIAN COPPER SURGES 44% ON DEBUT

NINGBO JINTIAN COPPER (GROUP)'s A-shares surged 44% – the daily trading limit – to Rmb9.43 on their debut on April 22, against the Rmb6.55 issue price of its Rmb1.59bn Shanghai IPO.

Trading in the stock was halted until the next morning, but shares did not continue to hit limit up and rose just 5.5% to close at Rmb9.95 on April 23.

The copper processing manufacturer sold 242m A-shares, or 10% of its enlarged capital. Its original target was to raise Rmb2.36bn by selling 400m shares.

It will use the proceeds on four copper processing projects, to upgrade production lines, and repay loans from banks.

Caitong Securities is the sponsor.

› JOYSON ELECTRONIC PLANS FOLLOW-ON

NINGBO JOYSON ELECTRONIC plans to raise Rmb2.5bn from a private share placement.

It will sell up to 371m shares, or 30% of current shares, to up to 35 investors.

Proceeds will be used to expand capacity



for smart electronic products used in new energy vehicles and for working capital.

› MEIJIN ENERGY PLANS PLACEMENT

Shenzhen-listed SHANXI MEIJIN ENERGY plans to raise Rmb6.6bn from a proposed private A-share placement.

The company will offer up to 1.23bn shares, or 30% of the current shares, to up to 35 investors.

Proceeds will be used to upgrade a coking coal production line, fund a hydrogen fuel cell project, and replenish working capital.

Meanwhile, the company terminated a Rmb3.2 six-year convertible bond plan the board had approved in January.

› NATIONAL SILICON SURGES ON DEBUT

NATIONAL SILICON INDUSTRY GROUP's A-shares surged on their Shanghai Star debut on April 20 to close at Rmb10.91, up 180% from the issue price of Rmb3.89 in the company's Rmb2.41bn IPO.

The deal comprised 620m A-shares or 25% of the enlarged capital.

Proceeds will be used to expand the production capacity of 300mm silicon wafers for integrated circuits and to replenish working capital.

Shanghai Guosheng Group and the National Integrated Circuit Industry Investment Fund were the largest shareholders of the company with 30.48% each before the IPO. Guosheng Group is 100%-owned by the State-owned Assets Supervision and Administration Commission of the Shanghai Municipal Government. NICIIF's largest shareholder is the Ministry of Finance.

The company posted revenue of Rmb1.07bn and a net loss of Rmb53.5m for the first nine months of 2019.

Haitong Securities is the sponsor.

› SHIMAO BUILDS WAR CHEST

SHIMAO PROPERTY raised HK$2.3bn from a top-up share placement last Wednesday.

The Chinese property developer sold 78.2m shares, equal to 2.2% of its enlarged share capital, at HK$29.73 per share, a discount of 2.2% to the pre-deal close.

Goldman Sachs was the placing agent. There is a 90-day lock-up. The company plans to use the proceeds

for project development, to repay debt and for general working capital.

Shares of Shimao gained 2% last Wednesday after it announced that it is considering a spin-off and Hong Kong listing of its property management service unit.

IFR Asia reported in January that Shimao is planning to spin off its property

management service unit in a Hong Kong IPO to raise about US$500m–$600m this year. CICC is working on the transaction.

› THREE FILE FOR STAR LISTINGS

BESTECHNIC (SHANGHAI), an audio chip manufacturer backed by Alibaba and Xiaomi, has filed to the Shanghai Stock Exchange for a proposed Rmb1.81bn Shanghai Star IPO.

The company plans to offer up to 30m shares, or 25% of the enlarged capital. There is a 15% greenshoe.

Proceeds will be used to upgrade and research smart audio chips used in wireless and noise-cancelling headphones, build an R&D centre, and for reserves.

China Securities is the sponsor.SHANGHAI ALLIST PHARMACEUTICALS has filed for

a Rmb1.5bn Star IPO.The pre-profit cancer drugmaker plans

to offer 90m new shares, or 10% of the enlarged capital. There is a 15% greenshoe.

It posted a net loss of Rmb397m in 2019, wider than its net loss of Rmb97.4m a year earlier.

Citic Securities is the sponsor.CHENGDU EASTON BIOPHARMACEUTICALS has

also filed for a Rmb1.16bn Star IPO. Citic Securities is the sponsor.

› TONGWEI SEEKS TO GROW CAPACITY

Shanghai-listed TONGWEI plans to raise Rmb6bn from a proposed private A-share placement to expand production capacity.

The company will sell up to 858m shares, or 20% of the current shares, to up to 35 investors.

Proceeds will be used to fund two high-efficiency silicon solar cell projects in Meishan and Chengdu in Sichuan province and replenish working capital.

Tongwei has become one of the world's largest solar cell manufacturers with a capacity of 20GW today, and it expects to raise that to 80GW to 100GW by 2023, according to the plan.

This year Tongwei announced production capacity expansion investment plans of a combined Rmb24bn into two silicon solar cell and high-purity silicon projects in Sichuan and Yunnan provinces.

› WANDA FILM PROJECTS BIG FOLLOW-ON

WANDA FILM HOLDING plans to raise Rmb4.35bn via a private A-share placement to build new cinemas.

The news comes after the Shenzhen-listed Wanda Group subsidiary withdrew a Rmb3.82bn convertible bond plan in January due to “an adjustment in the company's fundraising plans and

changes in the Chinese capital market environment”.

The follow-on will comprise up to 624m shares, or 30% of current shares, to be sold to up to 35 investors.

Proceeds will be used to build 162 new cinemas in the coming two years, replenish working capital and repay loans.

Wanda Film posted a net loss of Rmb4.7bn in 2019 on revenue of Rmb15.4bn.

It said its net loss attributable to shareholders in Q1 would widen to Rmb550m–Rmb650m because of the coronavirus outbreak, against a profit of Rmb401m a year earlier.

Since January 23, all Chinese cinemas have been shut and the timetable for a reopening is unclear.

As of December 31, Wanda Film owned 656 directly managed cinemas, with a total of 5,806 screens, for a 13.3% share of the Chinese box office, maintaining its pole position for the 11th year.

The company's A-shares have dropped 42% in the past year.


› ZHONGTAI SECURITIES KICKS OFF IPO

ZHONGTAI SECURITIES conducted price consultations for a Shanghai IPO on April 23.

The Chinese brokerage plans to offer 697m A-shares for a 10% free float, down two-thirds from the proposed 2.09bn shares.

Given a net asset value per share of Rmb4.37 last year, the brokerage may raise Rmb3bn from the float.

It will price the deal on April 27 and books will open for a day on April 29.

Proceeds will go towards its margin trading business and securities brokerage and investment banking operations. The funds will also support the development of subsidiaries in asset management, alternative investments, private equity investments and futures, as well as to upgrade IT services.

The company posted a net profit of Rmb1.81bn for Q1-Q3 2019, on revenue of Rmb7.31bn, up 41%. The income from investment banking was Rmb708m in the same period, accounting for 9.7% of revenue.

It updated its IPO filing in May 2019 and the hearing was originally scheduled on November 7 but it was cancelled by the CSRC the night before because “some related matters” needed further verification.

Soochow Securities is the sponsor and joint bookrunner with Essence Securities, GF Securities and Western Securities.


› KINGSOFT HAS INVESTORS ON A CLOUD

Chinese software company KINGSOFT has raised HK$3.1bn from a five-year put-three convertible bond, wrapping up the first equity-linked deal in Asia Pacific ex-Japan since the coronavirus outbreak.

The CB was priced at the mid-point of the marketed terms. Coupon was settled at 0.625% from the 0.375%–0.875% range, yield-to-put/maturity at 1.75% from the 1.5%–2% range and conversion premium at 27.5% from 25%–30%.

There was a same-day upsize option of HK$775m but it was not exercised.

Rather than going after size, the issuer chose to price the deal at a level which would allow a decent aftermarket performance, said a person close to the deal.

The CB was traded at around 100 in the secondary market.

Investors showed strong interest for the first equity-linked issue in Asia Pacific ex-Japan since end-January.

One major reason is the positive impact the pandemic has had on Kingsoft's cloud and gaming businesses as more people work from home and demand for online education and entertainment is on the rise.

The books were multiple times covered with more than 100 investors participating. More than half of the demand came from long-only investors. Apart from CB investors, there was also strong participation from equity funds and credit funds. Geographically, around half of the demand came from Asia and the rest from Europe and the US.

The company plans to use the proceeds for general corporate purposes, strategic investments and acquisitions.

Credit spread was assumed at 500bp, bond floor at 99 and implied volatility at around 28.

JP Morgan and Morgan Stanley were bookrunners.

Kingsoft shares fell almost 7% to HK$26.10 in Friday's afternoon but the stock was up 29% this year.

› BOHAI FERRY CANCELS PLANNED CB

BOHAI FERRY GROUP has cancelled a proposed Rmb1.19bn six-year convertible bond due to “capital environment changes”.

The company received approval from shareholders in April 2019 to offer the CB but had not filed to the China Securities Regulatory Commission.

It planned to use the proceeds to repurchase shares, build a rolling ship, and repay bank loans.

› HONGLU STEELS ITSELF FOR CB

Shenzhen-listed ANHUI HONGLU STEEL CONSTRUCTION

(GROUP) plans to offer a Rmb1.89bn six-year convertible bond.

Proceeds will be used to fund and upgrade two mobile cabin production sites, to repay bank loans and for IT service.

The proposal still needs approval from shareholders and Chinese regulators.

HONG KONG


› FITCH DOWNGRADES HONG KONG AGAIN

Fitch has downgraded HONG KONG's rating to AA– from AA, with stable outlook, citing the impact of the Covid-19 pandemic on the city's economy.

The action, announced on April 20, was the second downgrade of Hong Kong by Fitch in seven months.

The rating agency said government and society-wide social distancing efforts to contain the virus's spread have led to a contraction in economic activity and rise in unemployment, prompting policymakers to announce the most expansionary budget in the territory's history. These challenges have compounded negative rating trends already in place from the reputational damage that anti-government protests in 2019 were inflicting on international perceptions of Hong Kong's business environment and political stability.

Fitch forecasts Hong Kong real GDP will fall by 5% in 2020, following a 1.2% decline in 2019. It also expects Hong Kong's fiscal reserves will fall to 30% of GDP by the end of the 2020 fiscal year, from 40% a year earlier.

Fitch said the downgrade also reflects its view that Hong Kong's gradual integration into China's national governance system and associated rise in economic, financial, and socio-political linkages with the mainland justify a closer alignment of their respective sovereign ratings. It rates China A+, stable.

Fitch last downgraded Hong Kong on September 6, citing concerns over the city's governance and the rule of law during the anti-government protests.

Moody's and S&P rate the special administrative region Aa3 and AA+, respectively.

Fitch on April 20 affirmed Macau's AA rating and maintained the negative outlook. It said the ratings were affirmed as they "remain underpinned by exceptionally strong public and external finances,

and a demonstrated commitment to fiscal prudence throughout economic downturns".

› AMTD OFFERS PERP SWAP

Hong Kong-based AMTD GROUP last Thursday kicked off an offer to exchange its outstanding US$123m 7.625% perpetual bonds callable in June into new senior perp securities.

Holders of the existing perps will have the option of swapping into US and/or Singapore dollar notes.

The investment bank will disclose the minimum new issue yields for the new bonds on or around April 28, with the issue price and coupon to be released around the time the results of the exchange offer are announced. The offer ends on May 6, with results a day later. Settlement is scheduled for around May 14.

The new US dollar perps will see a coupon reset at the end of year three while the Singapore dollar perps will have its coupon fixed for life but will have a call at year five, suggesting little incentive for the issuer to call the notes.

The move into Singapore dollars reflects AMTD's goal of expanding its presence throughout Asia, particularly in Singapore. It listed its investment banking and asset management arm AMTD International in Singapore earlier this month, and is planning to list its digital assets in the island republic as well as the US later this year.

AMTD said the exchange offer was to refinance the existing perpetual bonds, which are due to be called on June 15 and would step up to three-year Treasuries plus 616.1bp, as well as a 500bp step-up, if not called. The original issue size was US$200m but the company repurchased US$77m in December.

AMTD Global Markets and Bank of East Asia are joint dealer managers while DF King is information and exchange agent


› CEO CUTS STAKE IN SINO BIOPHARMA

Founder and CEO Tse Ping has raised HK$2.27bn (US$293m) through the sale of 200m SINO BIOPHARMACEUTICAL shares at HK$11.35 apiece, according to a term-sheet.

The shares were marketed in a HK$11.17–$11.52 range and were priced at a 4.5% discount to the Monday close of HK$11.88.

Ping sold the 1.6% stake from his 10.99% holding. There is a lock-up of 90 days for the remaining stake.

HSBC and UBS are bookrunners.


COUNTRY REPORT INDIA

INDIA


› FRANKLIN TEMPLETON SHUTS FUNDS

FRANKLIN TEMPLETON has announced it will wind up six Indian debt funds, due to a drop in bond market liquidity and a sharp rise in investor redemptions.

Investors in the mutual fund schemes – its low-duration fund, ultra-short bond fund, short-term income plan, credit-risk fund, dynamic accrual fund, and income opportunities fund – will not be able to redeem their units. The assets of the funds will be sold and the proceeds returned to investors.

The combined fund values totalled Rs308.5bn (US$4bn) at the end of March, according to data from Franklin Templeton’s website. They had been hurt by investments in bonds from issuers like Yes Bank and Vodafone Idea.

“There has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lock-down of the Indian economy,” wrote the

trustee for Franklin Templeton Mutual Fund in a statement. “At the same time, mutual funds, especially in the fixed income segment, are facing continuous and heightened redemptions.”

It said that winding up the funds was the only way to preserve value and allow investors an orderly and equitable exit.

› HDFC PLACES BONDS

HOUSING DEVELOPMENT FINANCE CORP, rated AAA/AAA (Crisil/Icra), on Thursday sold Rs12.5bn three-year bonds at 6.95%.

Four investors were allocated the bonds, according to an NSE filing.

› MAHINDRA AND MAHINDRA PRINTS

Vehicle manufacturer MAHINDRA AND

MAHINDRA on Thursday sold Rs10bn three-year bonds at 6.78%.

The bonds are rated AAA by India Ratings.Six investors were allocated the bonds,

according to a BSE filing.

› POWER FINANCE SELLS DUO

State-owned POWER FINANCE CORP on Wednesday sold Rs32.9bn of bonds in two tranches.

A Rs19.7bn three-year tranche priced at 6.83% and a Rs13.2bn five-year at 7.16%. The three-year and five-year bonds were allocated to 32 and 20 investors, respectively, according to BSE filings.

The bonds are rated AAA by Crisil, Icra and Care.

SYNDICATED LOANS

› SABADELL CHECKS OUT OF LNG TERMINAL

Banco de Sabadell has dropped out of a US$600m five-year loan for a liquefied natural gas regasification terminal for Indian conglomerate Adani Group and French oil and gas giant TOTAL after having joined the deal in general syndication.

The Spanish bank was allocated US$10m and was among 11 banks joining the deal in syndication, which closed last month.

The reason for its withdrawal is not clear.Following the exit, Taiwan’s Hua Nan

Commercial Bank, which had joined as mandated lead arranger, stepped up for an additional US$6m through two of its branches.

Intesa Sanpaolo and Standard Chartered split the remaining US$4m of Banco de Sabadell’s commitment equally.

Future Retail at risk of missing first coupon Bonds Indian retailer cut to CCC– three months after market debut

FUTURE RETAIL is at risk of missing the first

coupon payment on its debut US dollar bond,

according to credit analysts.

Future Retail has a Rs1bn (US$13.1m)

payment on the US$500m 5.6% 2025 bonds

due on July 22, but its business has slumped

since it priced the deal in January. An

extended lockdown remains in place in India

until May 3 to stem the coronavirus outbreak,

crippling retail sales.

“The coupon payment itself is not sizeable

in a normal business scenario, but sales

are recovering from depressed levels and

normalization of business and financing

conditions would be needed over the next

two months for servicing debt comfortably,”

said Shruti Zatakia, analyst at S&P.

S&P has downgraded the retailer as well as

its US dollar bonds by three notches to CCC–

and placed the ratings on negative watch.

The downgrade marks a cut of six notches

compared to when the company first tapped

the international bond market in January.

The bonds had a rating of BB–/BB (S&P/

Fitch), in line with the issuer at the time.

“Recent media reports show that Future

Retail is even delaying employee salaries,

indicating how thin the company is in terms

of liquidity, while additional working capital

lines that were to be made available in April

have been delayed to May, at least. Given

those circumstances, coupon payment

possibilities are very low,” said Vishal

Kulkarni, credit analyst at Nomura.

S&P also noted the disbursement of

working capital will be crucial for the

company’s immediate funding requirements,

but it will have to play out before July.

Future Retail has reportedly been working

with a financial adviser for a potential debt

restructuring that could prompt a cross-

default on the company’s dollar notes,

according to S&P.

Nomura expects the potential recovery

value of the bonds to be 25% or lower,

referring to debt restructuring examples in

India, such as Jet Airways and Kingfisher.

S&P said the restructuring could also

trigger the change of control clause on

the dollar bonds that requires Future

Retail’s controlling shareholders – Future

Corporate Resources and Future Coupons

– to maintain a combined 26% stake.

Future Retail had already been facing

change of control risks due to the high level

of share pledges taken by its controlling

shareholders and the dramatic drop in

its share price last month. Citing such

uncertainties, Fitch also cut the ratings of

Future Retail and its bonds to B– from BB

earlier this month.

The company’s 2025s were bid at a

cash price of 27.5 on April 23, according to

Refinitiv data, down 70 points since the start

of March.

Future Retail’s US dollar debut received

orders totalling more than US$3bn, in much

more favourable market conditions. US

investors took 42% of the deal as the Indian

retailer leveraged its new partnership with

Amazon that holds around 4% stake in

Future Retail.

“Amazon is a pretty minority owner and

not a sponsor. Even doing a bull trade,

one probably needs to spend more time

on detailed due diligence when buying it,

especially if it is a new issuer,” said Kulkarni.

JIHYE HWANG


The duo, along with BNP Paribas and DBS Bank are MLAs, bookrunners and underwriters on the deal.

Proceeds fund the development of an LNG regasification terminal at Dhamra in India’s Odisha state.

A 50:50 joint venture between the two sponsors is developing the project.

Total is guarantor on facility A, while ADANI PORTS & SPECIAL ECONOMIC ZONE is guaranteeing Facility B.

The loan offered a top level all-in pricing of 143.8bp based on a blended interest margin of 130bp over Libor and a blended average life is 3.8 years.

Indian state-owned oil and gas companies GAIL India and Indian Oil Corp have signed 20-year contracts totalling 4.5 MTPA for regasification services at Dhamra on a use-or-pay basis.

For full allocations, see www.ifre.com.

› THREE JOIN NTPC’S ¥80BN LOAN

Three banks have joined NTPC’s dual-tranche yen loan of up to ¥80bn (US$750m) in senior syndication.

CTBC Bank and Norinchukin Bank have committed up to US$50m-equivalent, while Sumitomo Mitsui Trust Bank will provide the equivalent of US$30m.

India’s largest power utility had mandated Bank of India, State Bank of India and Sumitomo Mitsui Banking Corp in January on its biggest foreign currency financing to date.

The borrowing is split into a seven-year tranche for 75% of the total size and a 10-year portion for the remainder.

Proceeds from the loan will finance capital expenditure for new coal-fired stations as well as operating power plants

and repayment of Indian rupee loans borrowed onshore previously for the existing projects.

NTPC is also seeking a maiden ¥40bn 12-year green financing from Japanese lenders. Japan Bank for International Cooperation is funding half of the green loan and providing a partial guarantee on the remaining commercial portion that will be syndicated to domestic Japanese lenders. Mizuho Bank is the arranger.

In April last year, the borrower closed a US$300m-equivalent 10-year Samurai loan with only Aozora Bank joining in general syndication.

Mizuho, MUFG and SMBC were the mandated lead arrangers and bookrunners of that financing, which offered a top-level all-in pricing of 114.5bp based on an interest margin of 102bp over Tibor and weighted average remaining life of 10 years.


› BOB CONSIDERS FUNDRAISING

The board of state-owned BANK OF BARODA was scheduled to meet on Friday to consider raising funds through equity or debt.

No further details were provided. BoB planned a Rs30bn–Rs50bn

(US$391m–$652m) share sale in early 2018 but put it on hold after the government announced a three-way merger with Vijaya Bank and Dena Bank.

Axis, BoB Capital Markets, Citigroup, Credit Suisse, JM Financial and Kotak were hired to manage the share sale.

BoB shares are down 53% year to date.

› YES BANK SHARE SALE DRAWS 12 BIDS

A dozen banks have shown interest in working on YES BANK’s capital increase of up to Rs150bn, people with knowledge of the transaction said.

The 12 are Axis Bank, Bank of America, Citigroup, Goldman Sachs, HSBC, ICICI Securities, JM Financial, Kotak, Motilal Oswal, Nomura, SBI Capital and UBS.

Up to five will be hired. The bank’s board last month approved

a plan to raise up to Rs150bn through a rights issue, public offer or qualified institutional placement in one or more tranches.

The bank was previously planning a Rs50bn rights issue but may now consider a QIP as it wants to attract foreign anchor investors, said an ECM source with knowledge of the transaction.

Last month, State Bank of India acquired a 48.2% stake in the loss-making bank for Rs60.5bn. In addition a combined Rs39.5bn at Rs10 per share is coming from peers Housing Development Finance Corp (for an 8% stake), ICICI Bank (8%), Axis Bank (4.8%), Kotak Mahindra Bank (4%), Federal Bank (2.4%), Bandhan Bank (2.4%) and IDFC Bank (2%).

SBI must maintain a stake of at least 26% for the next three years, while all others must keep at least three-quarters of their stakes for the same period.

Analysts believe Yes Bank needs a further Rs90bn–Rs130bn over the next two years to restore its capital ratios.

The bank reported a net loss of Rs185bn in the October-December quarter against a net profit of Rs10bn a year earlier.

Yes Bank shares are down 44% year to date.

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COUNTRY REPORT JAPAN

INDONESIA

SYNDICATED LOANS

› SMI MANDATES FIVE FOR US$500M LOAN

SARANA MULTI INFRASTRUKTUR has mandated five lenders on a five-year term financing of up to US$500m, returning for its largest syndicated loan after a four-year hiatus.

The banks are Bank of China, CTBC Bank, MUFG, Standard Chartered Bank and United Overseas Bank. MUFG is the coordinating bank.

The borrower had sent out a request for proposals in December.

SMI’s last loan market visit in June 2016 was a blockbuster with 29 banks joining its US$175m 1.5-year refinancing in general syndication.

StanChart was the sole mandated lead arranger and bookrunner of the transaction, which offered a top level all-in pricing of 138.2bp based on an interest margin of 110bp over Libor and a remaining life of 1.33 years.

The government-owned borrower, established in 2009 to support infrastructure development projects, is rated BBB (Fitch).

JAPAN

SYNDICATED LOANS

› SHOWA DENKO TAPS ¥275BN SUB DEBT

SHOWA DENKO is set to raise a ¥275bn (US$2.56bn) subordinated loan as part of a financing package backing its acquisition of Hitachi Chemical, it said in a stock exchange filing on Tuesday.

Mizuho Bank and Development Bank of Japan are the lenders on the 35-year subordinated loan to fund the Tokyo-listed electronics materials maker’s subscription of common shares from special purpose company HC Holdings as part of the acquisition of Hitachi Chemical.

The subordinated loan has an availability period of five years and can be repaid after five years.

Showa Denko is also borrowing ¥295bn through a seven-year bilateral loan from Mizuho to fund the acquisition.

HC Holdings, currently a wholly owned subsidiary of Showa Denko, is raising a ¥490bn senior loan and ¥275bn in preferred shares.

Mizuho is sole lender for the ¥490bn loan, which is non-recourse to Showa

Denko and is split into a ¥50bn five-year amortising term loan, a ¥350bn five-year bullet facility and a ¥90bn commitment line for up to six months.

HC Holdings is also issuing preference shares totalling ¥275bn, of which Mizuho is subscribing to ¥185bn worth and DBJ to ¥90bn.

Drawdowns of the senior loans and preferred shares are slated for April 27.

The entire financing package, including all loans for Showa Denko and HC Holdings as well as the latter’s preference shares issue, totals ¥1.335trn.

The acquisition involves Showa Denko and HC Holdings buying a total of ¥964bn in shares in Hitachi Chemical from the latter’s parent and Japanese industrial conglomerate Hitachi as well as the market.

Hitachi owns a 51.2% stake in the chemicals unit.

A ¥4,630 per Hitachi Chemical share offer closed on Monday.

The acquisition is expected to be completed in June.

Hitachi Chemical is a supplier of materials for semiconductors, displays and lithium-ion batteries.

› WATABE WEDDING BAGS ¥13BN LOAN

WATABE WEDDING is raising a ¥13bn one-year loan to prepare for the impact of the coronavirus pandemic, the Kyoto-based wedding planning company said in a statement on Tuesday.

Five banks, including Bank of Kyoto and MUFG, are providing the loan.

Funding is likely by the end of April.The borrower’s previous visit to the loan

market was in May 2013 for a ¥1bn five-year loan with the two banks as mandated arrangers, according to Refinitiv LPC data.

Pan Brothers loan in spotlight Loans Indonesian garment company suffers downgrade from Moody’s

Indonesian garment manufacturer PAN

BROTHERS’ new loan of up to US$320m is in

the spotlight following a downgrade of the

company’s credit rating on Monday.

The Jakarta-listed borrower is expected to

face increasing refinancing risk in the coming

months, according to Moody’s, which cut its

rating to B1 from B2.

The company, a supplier to global clothing

brands such as Nike, Adidas, Hugo Boss,

Calvin Klein and H&M, has a US$138.5m

revolving credit facility due February 2021.

“We expect Pan Brothers will have little

liquidity buffer to withstand any deterioration in

earnings or unexpected stretches in its working

capital, and this presents a significant challenge

even under its new B2 rating,” said Stephanie

Cheong, an analyst at Moody’s.

It is not clear if the downgrade will affect

the US$320m loan, which is largely for

refinancing.

The three-year borrowing includes a new-

money portion, and is expected to carry an

accordion piece of US$30m. It is unclear as to

whether any banks have been mandated yet.

One banker said that Pan Brothers has

time on its side as the existing revolver is not

due until February next year.

As at September 30, Pan Brothers had

a cash balance of US$64m and US$36.5m

available under the revolver, which the rating

agency believes has been largely drawn as of

the end of March.

Moody’s pointed to the seasonal nature

of the business and its exposure to the retail

sector, which has been significantly affected

by the fallout of the coronavirus pandemic.

It noted that working capital tends to

peak in the first half of the year, leading to

negative cash from operations and increased

dependence on its revolver, which has less

than a year of remaining maturity.

Delays in orders or customer receivables,

exacerbated by the coronavirus crisis, will

likely require Pan Brothers to fully draw down

its revolver and eat into its cash cushion,

putting further stress on its liquidity, the

rating agency noted.

Higher debt levels as a result of increased

working capital needs will weaken debt-to-

Ebitda and Ebitda/interest expense to 5.1x

and 1.9x respectively in 2020, the report said.

Despite the headwinds, Moody’s expects

Pan Brothers’ revenue in 2020 to remain

relatively flat as the company’s ability to switch

production to items in high demand, such as

face masks and medical jumpsuits, should

offset the declines in fashion apparel sales.

ANZ, HSBC and ING Bank were the

mandated lead arrangers, bookrunners and

underwriters of the US$138.5m revolver raised

in April 2018, which attracted eight lenders in

general syndication. The deal paid a top-level

all-in pricing of 189.1bp (offshore) or 239.1bp

(onshore) based on interest margins of 175bp

(offshore) or 225bp (onshore) over Libor, and

remaining life of 2.83 years.

CHIEN MI WONG


MALAYSIA


› PAAB THIRSTS FOR SUKUK

State-owned PENGURUSAN ASET AIR will sell a multi-tranche Islamic bond in May to raise up to M$1.3bn (US$296m).

Tenors of three, five, seven and/or 10 years are planned but the final configuration will be decided closer to the scheduled bookbuilding date, expected to be in the week of May 11.

AmInvestment Bank, Bank Islam Malaysia, CIMB, Maybank and RHB are joint lead managers for the deal, rated AAA by RAM. The notes will be issued off a M$20bn Islamic MTN programme.

Pengurusan Air SPV will be the issuer while Pengurusan Aset Air, set up by the federal government to own water assets nationwide, will be the guarantor.

› CIMB GROUP PLANS RETURN

CIMB GROUP HOLDINGS, rated AA1 by RAM, plans to return to the bond market next month to raise up to M$350m.

Bookbuilding is tentatively scheduled for the week of May 11 for potential tenors of 366 days, two and/or three years. The final tenors to be sold will be determined close to the launch date.

CIMB Investment Bank is sole lead manager for the deal, which will be drawn from a M$6bn MTN programme.

The Malaysian financial institution sold M$600m of five-year notes at 3.4% in mid-March.

SYNDICATED LOANS

› SP SETIA SEEKS AUSSIE PROJECT LOAN

Malaysian listed property developer SP SETIA is seeking a A$253m (US$161m) four-year secured financing backing a mixed-use project in Melbourne.

Standard Chartered Bank is the sole mandated lead arranger and bookrunner of the financing, which comprises two term loans of A$36.6m (facility 1) and A$216.4m (facility 2).

The facilities pay interest margins of 180bp over BBSW.

Banks joining as MLAs receive a top-level all-in pricing of 195bp for commitments of A$50m and above via a participation fee of 60bp.

Proceeds raised from the first facility

will be used to refinance up to 60% of the acquisition costs of the land SP Setia initially purchased in June 2017 for A$61m.

The second facility will finance up to 70% of the total development costs of the project.

Special purpose vehicle Setia A’Beckett Melbourne is the borrower, while parent SP Setia is the guarantor.

The mixed-used project, located on 111–125 A’Beckett Street in the central business district of Melbourne, consists of 635 residential apartment units, one retail unit and 149 car park bays.

SP Setia’s previous syndicated loan was a £210m (US$275m then) five-year multi-currency facility in March last year. HSBC was the sole MLAB and underwriter of the loan, which paid a top-level all-in pricing of 185bp based on a margin of 165bp over Libor and a remaining average life of around four years.

Permodalan Nasional (25.55%), Amanah Saham Bumiputera (24.19%), Employees Provident Fund of Malaysia (11.10%) and Kumpulan Wang Persaraan (8.34%) are the major shareholders of SP Setia.


› KHAZANAH SELLS TENAGA BLOCK

State-owned investment firm Khazanah has raised M$1bn (US$231m) through the sale 85m TENAGA NASIONAL shares at M$11.87 apiece, people with knowledge of the transaction said.

The shares were marketed in a M$11.83–$12.30 range and the final discount of 3.5% is one of the tightest in Asia (ex Japan) so far this year.

The deal was upsized from 74m shares, and represented a 1.5% stake.

Books were well covered with demand from local long-only institutions who made up 60% of the investors. The top 10 accounts were allocated 80% of the deal.

Tenaga shares have fallen 5% year to date.

There is a 60-day lock-up on the vendor. CLIMB and Credit Suisse were the joint

bookrunners.

› SERBA DINAMIK UPSIZES SHARE SALE

SERBA DINAMIK HOLDINGS has raised M$457m from an upsized primary share placement priced at the bottom of a M$1.49–$1.52 range. Strong demand encouraged the oil and gas engineering company to upsize the deal to 306.5m shares (10% of the share capital) from 153.3m.

Books were covered 1.5x with over 30 accounts participating. The top 10 were allocated two-thirds of the deal. Foreigners accounted for 40% of the investors.

The issue price offered an 8% discount to the pre-deal close of M$1.62. Serba Dinamik shares have slipped 30% year to date.

There is a 90-day lock-up on the company, which is raising the funds to reduce debt.

Affin Hwang, CIMB and Credit Suisse are the joint placement agents.

In 2017, Serba Dinamik raised M$584m through an IPO priced at M$1.50.

NEW ZEALAND


› HOUSING NZ PRINTS LONG LINKER

HOUSING NEW ZEALAND, rated Aaa/AA+ (Moody’s/S&P), raised NZ$300m (US$178m) from a long 20-year inflation-indexed wellbeing bond issued via institutional private placement.

The 2.5% September 20 2040s priced last Thursday at 101.951295 to yield 2.413%, at a margin of 175bp over the September 2040 New Zealand government inflation-linked bond.

ANZ was sole lead manager for the transaction.

In late January Housing New Zealand delayed a proposed increase to its NZ$765m 3.36% June 12 2025 nominal wellbeing bonds alongside a new 2030 wellbeing bond issue as market conditions became volatile.

Wellbeing bonds are a type of sustainability bond which are aligned with the New Zealand Treasury’s Living Standards Framework.

HNZ, a crown agency that provides housing services for New Zealanders in need, benefits from being a rare high Double A/Triple A rated domestic issuer that offers a pick-up over the sovereign curve.

PHILIPPINES


› ADB MAKES QUICK RETURN

The ASIAN DEVELOPMENT BANK completed its second jumbo offering in quick succession, with a US$4.5bn five-year bond last Tuesday following a two-year of the same hefty size at the end of March.

Pricing for the new bond was 23bp over mid-swaps, 2bp tighter than initial price thoughts and only 3bp back from where


COUNTRY REPORT SINGAPORE

ADB printed its shorter 2022 bond three weeks earlier.

The spread over the five-year US Treasury came at 34.35bp.

Excluding interest from lead managers Bank of America, Citigroup, HSBC and Toronto-Dominion, the new deal drew over US$8bn of demand from 130 accounts.

Asia took 35% of the bonds, EMEA 34%, and the Americas 31%. Central banks and official institutions booked 56%, banks 26%, and fund managers and others 18%.

“They were clearly going for size,” said one syndicate manager away from the transaction. While he considered IPTs “quite generous in the context of the performance of last week’s deals”, “they got an impressive size with aplomb – no mean feat.”

Proceeds will contribute to ADB’s US$20bn Response Package “to help developing member countries counter the severe macroeconomic and health impacts caused by the Covid-19 pandemic”.

SYNDICATED LOANS

› PETRON CLOSES DEBUT SAMURAI LOAN

Philippine oil refiner PETRON has signed a ¥15bn (US$139m) debut Samurai loan, increased from an original US$100m-equivalent target.

Development Bank of Japan came in to share the mandated lead arranger title with Mizuho Bank, MUFG and Sumitomo Mitsui Banking Corp, while Shinsei Bank joined as lead arranger.

The five-year loan was originally available in both US dollars and yen with interest margins of 110bp over Libor and 75bp over yen Libor, respectively.

However, no bank joined the US dollar tranche due to rising funding costs as a result of which the deal is now a Samurai loan.

Yen-denominated deals syndicated in Japan for overseas borrowers are classified as Samurai loans. Ninja deals include Samurai loans and can be denominated in any currency.

Petron’s deal, signed at the end of March, has an average life of 3.5 years.

Funds are for refinancing purposes.

Petron, a unit of Philippine conglomerate San Miguel, raised US$800m through a very successful five-year term loan in April last year that attracted 19 banks in general syndication.

ANZ, Bank of China, DBS Bank, Mizuho, SMBC and Standard Chartered were the MLABs of the financing, which offered a top-level all-in pricing of 113bp based on a margin of 95bp over Libor and has an average life of 3.5 years.

SINGAPORE


› PLAIN SAILING FOR PSA BOND

Port operator PSA INTERNATIONAL, rated Aa1/AA (Moody’s/S&P), drew final orders of over US$4.2bn from 223 accounts for a US$650m bond offering on Thursday.

The 2.25% 10-year notes were priced at 99.822 to yield 2.270%, or Treasuries plus 165bp, inside initial guidance of 210bp area.

The pricing is inside Nomura’s trading desk’s fair value estimate of Treasuries plus 170bp, which referenced PSA’s own curve and added about 10bp as new issue premium due to current market volatility.

PSA’s existing 2029 bonds were seen at Treasuries plus 160bp, so the new issue priced flat to fair value.

While the 10-year issue priced wider in spread terms than PSA’s US$500m offering last August, which came at Treasuries plus 77.5bp, the yield was almost identical and a larger size was achieved this time.

“The terms available for issuers this week were better than last week or the week before,” said a market source.

Asian investors took 83% of the bonds and EMEA 17%. Fund bought 62%, bank 19%, insurance and sovereign wealth funds 17%, and private banks 2%.

PSA International is the guarantor of the Reg S offering and PSA Treasury is the issuer.

Singaporean state investment holding company Temasek Holdings owns PSA International.

The fixed-rate senior unsecured notes have an expected rating of Aa1 by Moody’s and will be drawn off a US$3.5bn global MTN programme.

DBS Bank and HSBC were joint bookrunners.The bonds were flat in secondary trading

on Friday morning, in a soft market.

› SATS RETURNS FOR MORE

SATS has raised S$100m (US$70.3m) from the sale of five-year bonds priced on April 17 at par to yield 2.6%.

The private placement was the second in less than a month after it sold S$200m of five-year notes at 2.88% in late March.

DBS and UOB were joint bookrunners.Settlement was on April 24 with the

notes to be drawn from a S$500m multi-currency MTN programme. Proceeds will be used for general corporate purposes and debt refinancing.

SATS is the main ground-handling and in-flight catering provider at Singapore’s Changi Airport.

RESTRUCTURING

› SWIBER SET FOR ZOOM HEARING

The Singapore High Court will hear applications for an extension to SWIBER

HOLDINGS’ judicial management period on April 30 via online video conferencing tool Zoom.

Swiber had earlier said the hearing – which also covers an extension for subsidiary SWIBER OFFSHORE CONSTRUCTION – was scheduled for May 4, the day a partial government-mandated lockdown was due to end. However, Singapore last Tuesday extended the lockdown by a month to tackle the spread of the coronavirus.

Judicial management for both companies is due to expire at end-April.

The financially strapped Singaporean oil and gas company disclosed in mid-April it was in talks with a Middle Eastern company

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for a US$200m rescue package, which will also address the restructuring of Swiber’s debt. Creditors include investors who hold S$150m (US$105m) of Swiber’s 6.5% bond.


› SIA ANNOUNCES RIGHTS RECORD DATE

Shareholders on SINGAPORE AIRLINES’ books as of May 8 will be eligible for the S$15bn (US$10.5bn) rights offer of shares and convertible bonds announced last month.

In a stock exchange announcement the airline said it will seek shareholder approval for the rights offer on April 30.

The rights offer shares and the first tranche of the CB are likely to be issued over the next three to four months.

Last month, SIA announced that up to 1.78bn rights shares will be sold in a 3-for-2 ratio at S$3 each to raise S$5.3bn. The issue price is at a 54% discount to the pre-deal announcement close of S$6.50. SIA shares closed at S$6.06 on Wednesday.

SIA also plans to raise up to S$9.7bn from the issue of mandatory convertible bonds. Around 295 zero-coupon 10-year mandatory convertible bonds will be issued per 100 shares. If not redeemed before the maturity date in 10 years, the MCBs will be converted into new shares based on a conversion price of S$4.84.

The offer is the largest rights issue in the island state, beating the previous record – DBS Bank’s S$2.7bn issue in 2007.

The proceeds will be used to fund capital expenditure and operating cashflow at a time when the Covid-19 pandemic has forced the airline to ground most of its flights.

Sovereign wealth fund Temasek, which has a 55.46% shareholding in SIA, is underwriting the whole transaction.

DBS Bank is the sole adviser and manager of the rights issue.

SOUTH KOREA


› KOREA EAST-WEST POWER DIALS IN

KOREA EAST-WEST POWER, rated Aa2/AA (Moody’s/S&P), began hold investor calls on Thursday, ahead of a potential US dollar 144A/Reg S bond offering.

BNP Paribas, Bank of America, Citigroup, Credit Agricole and HSBC are joint bookrunners, as reported by IFR earlier this month.

An offering of senior unsecured bonds with short to intermediate maturity may follow, subject to market conditions.

The Korean power producer has a US$500m 2.5% bond due in June this year. It is one of six regional power companies owned by Korea Electric Power (Kepco), which is majority-owned by the Korean government.

TAIWAN

SYNDICATED LOANS

› KINGSTON TECH RAISES DEBUT LOAN

Ireland-based memory products maker KINGSTON TECHNOLOGY INTERNATIONAL has raised a US$600m three-year debut revolving credit from six Taiwanese lenders.

Chang Hwa Commercial Bank, CTBC Bank, First Commercial Bank, Land Bank of Taiwan and Taiwan Cooperative Bank are the mandated lead arrangers and bookrunners of the transaction. CTBC was also the facility agent.

The deal offers an interest margin of 100bp over Libor. The borrower will pay any excess interest rate beyond a 30bp difference between TAIFX and Libor. The deal also has a commitment fee of 10bp.

US-headquartered Kingston Technology Corp is providing a guarantee.

Funds are for general working capital purposes.


› AIRLINES FLY IN FOR NT$40BN LOANS

State-controlled CHINA AIRLINES and private sector operator EVA AIRWAYS are sounding the market for NT$40bn (US$1.33bn) combined in loans to cope with the pressures resulting from the coronavirus pandemic.

Bank of Taiwan is expected to provide bridge loans of NT$20bn each to the two carriers with takeout financings expected at a later stage.

The tenors of the takeout loans are likely to be five years.

The loans are part of the Taiwanese government’s NT$50bn bailout for the aviation industry announced on Wednesday.

The Ministry of Transportation and Communications unveiled new measures that include loans and tax relief for the aviation industry, replacing a NT$30bn bailout announced in March.

The government will provide special funds as credit guarantees for any company that has applied for financial institution

loans to sustain its operations. It will also offer interest subsidies to companies.

China Airlines and EVA have suffered significant declines of 38.4% and 37.9% respectively in passenger numbers for February compared with the same month a year earlier, according to the latest statistics from the Civil Aeronautics Administration.

Neither airline has tapped the loan markets in a decade.

China Airlines’ previous loan was a NT$3.6bn five-year guarantee facility in November 2009. Cathay United Bank was the sole mandated lead arranger and bookrunner of that transaction, which offered an annual guarantee fee of 90bp.

Taiwan-listed EVA Airways completed a NT$5.75bn-equivalent 12-year refinancing in November 2010. Cathay United Bank, Chang Hwa Commercial Bank, E Sun Commercial Bank, First Commercial Bank, Land Bank of Taiwan, Taichung Commercial Bank, Taiwan Cooperative Commercial Bank and Yuanta Commercial Bank were the MLABs on that financing, which offers a margin of 70bp over the 90-day secondary CP rate.

› AU OPTRONICS LIFTS LOAN TO NT$32.5BN

LCD maker AU OPTRONICS has increased a five-year loan to NT$32.5bn from an initial NT$26bn target after attracting 13 lenders in general syndication.

Bank of Taiwan and Chang Hwa Commercial Bank were the mandated lead arrangers and bookrunners of the latest transaction, which comprises a NT$22.5bn term loan tranche A and a NT$10bn revolving credit tranche B.

The interest margin is tied to the borrower’s after-tax net profit margin: 105bp over Taibor for an after-tax net profit margin below 0%, 100bp for 0%–2.9%, 89bp for 3.0%–5.9% and 84bp for 6.0% or more. The pre-tax interest rate floor is set at 1.7%.

Banks were offered a top-level upfront fee of 30bp. Funds are for working capital purposes.

The borrower’s previous syndicated loan – an increased NT$42bn five-year financing in June 2018 with BoT as MLAB – offers the same interest margin as the latest borrowing. Banks were offered a top-level upfront fee of 36bp.

Last May, AU Optronics obtained a NT$2bn three-year bilateral loan from DBS Bank Taipei, according to Refinitiv LPC data.


› SAMT TO MANDATE NT$11BN REFI

Taiwan-listed SOLAR APPLIED MATERIALS

TECHNOLOGY is expected to mandate two banks on a five-year refinancing of up to NT$10.8bn.


COUNTRY REPORT VIETNAM

Chang Hwa Commercial Bank and Taiwan Cooperative Bank are tipped to win the mandate.

Funds are for refinancing and working capital.

In May last year, the borrower raised a NT$2.78bn 13-month senior loan, which attracted four banks in syndication, according to Refinitiv LPC data. Chang Hwa and Taiwan Cooperative were also the MLABs.

THAILAND


› TRUE MOVE RINGS FOR FUNDS

TRUE MOVE H UNIVERSAL COMMUNICATION, rated BBB+ by Tris, will offer 1.5 and 5.5-year bonds next month to institutional and high-net-worth investors.

The Thai mobile phone operator plans to raise Bt9bn (US$278.4m) from the deal, which will open for subscription from May 12-14.

Price guidance on the 1.5-year tranche is at 3.04%–3.25% and 4.25%–4.50% for the 5.5-year tranche.

Bangkok Bank, CIMB Thai, Kasikornbank, Siam Commercial Bank and Thanachart Bank are joint lead managers.

True Move H Universal is likely to use the proceeds to refinance an outstanding Bt9bn 3.38% bond that will mature on May 28. It is also expected to return to the market to refinance a Bt8.8bn 3.15% bond that will mature on August 16.

› GUNKUL ENGINEERS DUAL-TRANCHER

GUNKUL ENGINEERING, rated BBB by Tris, will offer three and five-year bonds this week to institutional and high-net-worth investors to raise up to Bt2.8bn.

The three-year tranche, for up to Bt1.4bn, will pay 3.7% and the five-year piece, for up to Bt1.4bn, will pay 4.2%.

Subscription will run from April 27-29.The Thai power equipment maker will

use part of the proceeds to redeem Bt1bn of bonds maturing in May, with the balance to fund working capital requirements.

Bangkok Bank, Krungthai Seamico Securities, Maybank Kim Eng Securities Thailand, Nomura

Pattanasin Securities, RHB Securities Thailand and Yuan Ta Securities are joint lead managers for the deal.

› LH PLOTS DUAL-TRANCHER

LAND AND HOUSES, rated A+ by Tris, is planning to sell two and three-year bonds at the end of the month for a minimum of Bt2bn.

Bookbuilding is tentatively scheduled for April 30. Preliminary pricing in early marketing has been indicated at 2.3% for the two-year tranche, and 2.35%–2.45% for the three-year tranche.

The Thai property developer is selling the bonds only to institutional investors.

Kasikornbank and UOB Thai are joint lead managers.

SYNDICATED LOANS

› TESCO ASIA M&A LOAN DRAWS NINE

A dual-tranche bridge loan of around US$7.19bn-equivalent backing Charoen Pokphand Group’s purchase of Tesco’s Asian business has attracted nine lenders in senior syndication.

Eight of the banks joining committed in US dollars, while Kasikorn Bank committed in baht.

JP Morgan, Siam Commercial Bank and UBS are the original mandated lead arrangers, bookrunners and underwriters of the borrowing, which is the largest on record from Thailand.

CP Group’s listed subsidiary CP ALL is the borrower on a US$3.19bn-equivalent 12-month tranche A, while a special purpose vehicle is the borrower on a US$4bn-equivalent 18-month Tranche B.

The SPV is also the acquiring entity for CP Group’s successful US$10.6bn bid for Tesco’s 1,965 stores in Thailand and 74 outlets in Malaysia.

The opening interest margin for both tranches is 150bp over Libor before a step-up kicks in after six months from signing.

Thai billionaire Dhanin Chearavanont’s group operates 12,000 7-Eleven convenience stores through CP All and about 80 cash-and-carry stores under Siam Makro.

CP Group will gain control of Tesco’s operations in Thailand including 200 Tesco Lotus hypermarkets and 1,600 Tesco Lotus Express convenience stores.

The bridge loan for CP Group is the largest from Thailand, eclipsing a US$6.2bn-equivalent financing in March 2016 for Berli Jucker when it purchased a 58.56% stake in Thai hypermarket operator Big C Supercenter from France’s Casino Group.


› KIATNAKIN SEEKS GREEN LOAN FROM IFC

Thai lender KIATNAKIN BANK is in discussions with the International Finance Corp for a green loan of up to US$100m to develop its climate finance business.

The seven-year senior loan will comprise two tranches of US$50m each, with proceeds to be specifically on-lent to borrowers or projects that meet IFC’s climate finance criteria, according to the multilateral agency.

The deal will be the first green loan in Thailand to be aligned with the Green Loan Principles, published in March 2018 by the Loan Market Association and the Asia Pacific Loan Market Association, according to IFC.

Headquartered in Bangkok, Kiatnakin had US$10.5bn in assets as at the end of 2019.

VIETNAM

SYNDICATED LOANS

› TECHCOMBANK INCREASES DEBUT LOAN

VIETNAM TECHNOLOGICAL & COMMERCIAL JOINT STOCK

BANK (Techcombank) has increased its three-year debut loan to US$500m from a US$300m target after attracting 19 banks in syndication.

ANZ, CTBC Bank, First Abu Dhabi Bank, Taishin International Bank and United Overseas Bank were the mandated lead arrangers, underwriters and bookrunners. Mega International Commercial Bank joined as MLA prior to the launch into general syndication.

The deal offered a top-level all-in pricing of 163bp based on an interest margin of 150bp over Libor.

Techcombank is one of the biggest private-sector lenders in Vietnam, with over 5.4 million customers and 314 branches.


www.ifre.com


ASIA DATA

LAST WEEK’S ECM DEALS

Stock Country Date Amount Price Deal type Bookrunner(s)

Serba Dinamik Malaysia 23/04/2020 M$457m M$1.49 Follow-on (primary) Affin Hwang, CIMB, Credit Suisse

Tenaga Nasional Malaysia 23/04/2020 M$1bn M$11.87 Follow-on (secondary) CIMB, Credit Suisse

Sino Biopharmaceutical Hong Kong 20/04/2020 HK$2.27bn HK$11.35 Follow-on (secondary) HSBC, UBS

Comba Telecom Systems China 24/04/2020 HK$806m HK$3.05 Follow-on (primary/ secondary) CICC, DBS

Shimao Property China 23/04/2020 HK$2.3bn HK$29.73 Follow-on (primary) Goldman Sachs

Ramsay Health Care Australia 23/04/2020 A$1.2bn A$56 Follow-on (primary) JP Morgan

Hansoh Pharmaceutical China 22/04/2020 HK$3.49bn HK$26.75 Follow-on (primary) Morgan Stanley, Citigroup

Metcash Australia 21/04/2020 A$300m A$2.80 Follow-on (primary) Macquarie

Source: IFR Asia

MERRILL LYNCH ASIAN DOLLAR INDEX

Index Description Index level 1 week total return 1 month total return 3 months total return OAS

ADIG Asian-dollar high-grade index 436.417 0.222 2.896 –0.962 268

ADHY Asian-dollar high-yield index 612.854 –0.457 11.476 –11.022 1136

AGIG Asian-dollar government high-grade index 411.096 0.134 4.663 –0.985 245

AGHY Asian-dollar government high-yield index 622.399 –0.795 –0.082 –23.785 1365

ACIG Asian-dollar corporate high-grade index 463.093 0.255 2.300 –0.966 278

ACHY Asian-dollar corporate high-yield index 513.213 –0.418 13.001 –9.251 1109

Source: Merrill Lynch

ASIAN SYNDICATED LOAN PIPELINE UPDATES WEEK OF 21 APRIL

Company Currency Size (m) Margin (All-in) Tenor (mths) Facility Arrangers

Japan

Banco Nacional de Comercio Exterior SNC US$ 100 144 Revolver/Term Loan 0

Banco Nacional de Comercio Exterior SNC US$ 100 144 Revolver/Term Loan 0

Fujita Kanko Inc ¥ 22,000 60 Term Loan 0

NTPC ¥ 20,000 144 Revolver/Term Loan Mizuho

NTPC ¥ 20,000 144 Revolver/Term Loan 0

Taiwan

World Peace Industrial NT$ 10,000 Revolver/Term Loan Taiwan Coop

Source: Refinitiv data LPC

LAST WEEK’S EQUITY-LINKED ISSUANCE

Issuer Country Date Amount Greenshoe Maturity Coupon/YTM % Premium (%) Bookrunner

Kingsoft China 23/4/2020 HK$3.1bn 5 years 0.625/1.75 27.5 JP Morgan, Morgan Stanley

Source: IFR Asia

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