resume bond buying provides instant boost Saudi Aramco IPO …dl.magazinedl.com/magazinedl/IFR Magazine/2019/IFR... · 2019-09-23 · BY HELENE DURAND, SUDIP ROY The European credit

SEPTEMBER 14 2019 ISSUE 2300 www.ifre.com

PEOPLE & MARKETS

06

LOANS

lose value08

EQUITIES

10

EMERGING MARKETS

10

“It’s party time for corporates”: ECB move to resume bond buying provides instant boost

Saudi Aramco IPO fees could hit US$180m with 1% float on domestic exchange

ECB’s tiered interest rates offer little relief for squeezed European banks

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Upfront OPINION INTERNATIONAL FINANCING REVIEW

Desperate times

Hong Kong’s stock exchange is not about to fade quietly into obscurity.

Last week’s US$39bn bid for the London Stock Exchange Group is a bold statement of intent from HKEx. After months of protests that have raised questions over the city’s autonomy under an increasingly assertive China, it puts Hong Kong’s capital market in focus for the right reasons. The stock exchange – and, therefore, the city and its government – still has big, global ambitions.

The timing of HKEx’s bid for the UK’s 300-year-old stock exchange, however, smacks of desperation.

offer by October 9, only weeks before the UK is (still) due to crash out of the EU, potentially without a deal to protect its

The cheap pound has already attracted other Asian purchasers – notably Hong Kong tycoon Li Ka-shing is guzzling up Greene King pubs – but that will be of little comfort if Brexit damages London’s status as a leading

happens.)Hong Kong is also facing its own critical moment. Already

angry protests have unearthed deep-seated social problems and questions over the city’s long-term future, and the

At this point in time, LSE and its shareholders would be mad to gamble on a merger with a company so deeply connected to Hong Kong politics. The stock exchange is so important to Hong Kong life that only six of HKEx’s 13 directors are appointed by shareholders, and its chairman must be approved by Hong Kong’s Beijing-endorsed chief executive.

HKEx boss Charles Li claims to have been eyeing LSE for years, which makes an offer after the stock has jumped 67% this year even more bizarre.

The only plausible explanation for the timing – and structure – of HKEx’s proposal is that it will be impossible

different direction, and make the combined group a far larger company than HKEx is today.

traction among LSE’s own shareholders, the clock is ticking. If HKEx really has been interested in LSE for a long time, this may be its last chance at a merger.

also owns this publication, and a sale to the venerable LSE would make this company’s debt burden look a lot more manageable.

Even without that deal on the table, however, a Hong Kong takeover looks like a roll of the dice from an exchange increasingly worried about its own future.

Ready for another rush

So, Mario Draghi delivered, sort of. In his penultimate

central bank will restart bond buying from November 1 as part of a series of measures to stimulate the eurozone’s economy.

announcement that many had hoped for, but the open-ended

happy.The question is: what happens next?In the short term, the simple answer as far as the credit

market goes is supply. Syndicates are already gearing themselves up for an array of issuance.

Beyond that, the structural support the market was

So, while in headline terms the amount of corporate bonds the ECB will purchase each month could be small – analysts

combined with other technical considerations mean we are likely to see credit spreads push tighter.

And anyone hoping for the era of negative-yielding bonds to end may be waiting a (very) long time.

But there is a but. Price action in the rates market since the beginning of the month shows that the one-way rally of August has stalled. This may be just a limited but overdue

supply.Or it could be a harbinger of more volatile times ahead as

the ECB’s ability “to do whatever it takes” is starting to run out of road.

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International Financing Review September 14 2019 3

Contents INTERNATIONAL FINANCING REVIEW

SEPTEMBER 14 2019 ISSUE 2300

TOP NEWS 04BONDS Party time To infinity and beyond.

ECB package bullish for credit though unclear for other sectors. 04

EQUITIES Painful ECB tiering little relief for squeezed banks.

Stimulus package set to prolong period of negative interest rates in eurozone. 04

PEOPLE & MARKETS Shunned HKEx falls flat with LSE bid.

UK target savages Hong Kong exchange’s ambitious takeover plan. 06

EQUITIES Pay day Aramco IPO fees could hit US$180m.

Base fee set at 35bp between nine banks hired for US$20bn-plus IPO. 07

Problem credits PE-owned firms strain as loans lose value. 08 Refreshing Budweiser adds cheer to HK IPOs. Revived float seen as boost for Hong Kong market. 10 Blowout Pemex enjoys successful return to dollars. Oil company garners US$38bn book. 10 Unprecedented LGFV sends perpetual warning. Jilin issuer shocks with decision not to call. 11

PEOPLE & Banking on September US bank executives were last week cautiously 15MARKETS optimistic the third quarter is shaping up, albeit with three crucial weeks to go.

Technology push Goldman hires Marco Argenti from Amazon and

Atte Lahtiranta from Verizon Media to join the bank as partners. 16 Setback Arnie saddles UK banks with late £5bn PPI hit.

TV campaign creates last-minute surge in claims for compensation. 17 Trouble ahead IMF warns of Brexit hit to EU capital markets. 21 Reshuffle Lazard reorganisation continues as UK chief Rucker steps down. 22 Settlement Bankrupt PG&E’s new plan seeks to silence bondholders. 23

BONDS Nearing record US corporates sprint at historic pace. 25 US WeWork junk bond hits post-IPO filing low. 42 US MBS Markets braced for September surge. 46

EMERGING Hopeful South Africa to launch bond trade despite spectre of a downgrade. 63MARKETS China Tianjin Binhai revives dollar bond issue. 65 Ukraine MHP blazes through sovereign’s curve. 73

LOANS Plea Chinese onshore banks call for relaxation of secondary market rules. 77 Financing HKEx to spice up loan market. 79 UAE GMS delays results amid lender talks. 84

EQUITIES Sell-down Recruit Holdings shareholders raise ¥359bn from follow-on offer. 95 Germany Biotech unicorn files for Nasdaq IPO. 101 US Big discount on Baker Hughes sale. 105

STRUCTURED In the money MTU Aero Engines prints €500m 2027 convertible bond. 111EQUITY China Xianhe convertible clears hearing. 112 US Harmonic strikes accord on US$105m CB. 112


Top news HKEx falls flat with LSE bid 06 Aramco sets IPO fees 07 WeWork concedes on price governance 08

ECB tiering little relief for squeezed banks People & Markets Stimulus package set to prolong period of negative interest rates in eurozone

BY STEVE SLATER, GARETH GORE

Another European Central Bank stimulus package looks set to keep eurozone interest rates negative for longer and tighten the squeeze on the region’s banks, heaping more pain on German lenders in particular.

The ECB cut its deposit rate by 10bp to a new record low of minus 0.5% on Thursday because the eurozone faced “more protracted weakness” than previously estimated, outgoing ECB president Mario Draghi said.

The ECB is aware negative rates are hurting bank

the pain by introducing tiered interest rates on their excess liquidity. But that is only likely to provide a partial shield from the negative rates.

“It’s bad news for the banks compared to expectations, and banks with excess liquidity are more penalised,” said Scope Ratings analyst Marco Troiano.

He estimated less than half of eurozone banks’ excess liquidity will be covered by the tiering system. “That’s underwhelming,” he said.

“SUCKING THE ENERGY”

Banks had already been groaning. The era of rock-bottom interest rates has been

hurting the margins they make on deposits and loans.

And while the ECB’s measures are aimed at stimulating the economy and could help trading and deal-making and in turn perk up capital markets activity, the negative rates are contributing to the malaise across European banks, bankers said.

Deutsche Bank has a long list of problems, and negative rates is one of its biggest headaches – and one it can do little about.

A senior banker at a rival US bank said, coming after the

eurozone banking industry’s

problems with bad loans, the drag of negative rates “has sucked the energy” out from much of the European sector.

Indeed, eurozone banks have been charged €23.2bn due to negative interest rates since the policy was introduced in 2014, analysts at Scope Ratings estimated. They said the cost to banks was €7.5bn last year, reducing

To infinity, and beyond Bonds ECB package bullish for credit though unclear for other sectors

BY HELENE DURAND, SUDIP ROY

The European credit market was given an early Christmas gift last week when the European Central Bank said it would restart asset purchases and cut the deposit rate, decisions expected to further lift an already buoyant mood.

There was much speculation ahead of the meeting as to what the central bank would do on Thursday and what the package of measures would include.

In the end, any concern that Mario Draghi would not deliver as his eight-year term at the helm of the institution draws to a close proved unfounded.

The headline announcement was the restart of quantitative easing, with the ECB set to buy €20bn of bonds a month from November 1 with no end-date.

credit,” a head of syndicate

said. “We’re off to the races. Look at the KERRY trade – it’s a blowout. We’ve got a decent pipeline for [this] week, which we think will go well.”

Books for the Irish food ingredient company’s €750m 10-year on Friday peaked at €2.6bn. That gave leads Bank of America Merrill Lynch, HSBC, NatWest Markets and Rabobank plenty of leverage to move pricing to swaps plus 78bp, 22bp inside the tight end of the 100bp–105bp IPT range. The

inside fair value.“It’s party time for

corporates,” a senior DCM banker said.

While the Kerry deal was senior unsecured, the banker said the backdrop couldn’t be better for other formats either.

“When it comes to hybrids, conditions are exceptional and the market’s ability to absorb paper is huge. The senior/

hybrid spread ratio is very tight.”

Already INFINEON

TECHNOLOGIES has mandated Citigroup and UniCredit (structuring advisers and global coordinators) and Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank, Goldman Sachs and JP Morgan for a two-part euro perpetual comprising non-call 5.5-year and non-call 8.5-year tranches.

Longer-dated transactions had become increasingly popular in the run-up to the ECB meeting, with a number of issuers bringing tenors of 15 years and longer.

Bankers say more deals targeting the long end should

“What QE should in theory result in is yields capped at where they are and probably a

What that could do is steepen credit curves, but CSPP may

balance that out, and help the bid for the long end.”

“So if anything, I like long-end euro a bit more now, though I liked it before too,” said a second syndicate banker.

And though the ECB’s stimulus highlights the sluggish nature of the eurozone economy, credit investors are unlikely to have any other option than to go long.

“The €4bn shield is less than we had expected and the impact on banking sector RoEs will be minimal”

Source: Refinitiv Eikon

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IBOXX EURO NON-FINANCIALS INDEX

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For daily news stories visit www.ifre.com@

PE struggles with problem credits 08 Wassup HK? 10 LGFV’s perpetual warning 11

euro area bank RoE by about 40bp.

TIERING

The tiering is meant to provide relief for banks. But bankers said it’s hard for the

all” package that helps banks in different countries.

The ECB has set the exemption as a multiplier of minimum reserve requirements. It has initially set the multiplier at six, but that could be adjusted later.

Scope estimated the 6x multiplier will exempt about €800bn from negative rates, less than half of the €1.7trn excess liquidity at the end of August.

Troiano said the annual cost of excess liquidity for eurozone banks will still be €4.6bn, compared with €8.5bn if there was no tiering.

“While not immaterial, the €4bn shield is less than we had expected and the impact on banking sector RoEs will be minimal,” he said.

uneven. The tiering should cover all the excess liquidity in Italy and Spain, for example, but not cover the higher excesses in Germany, France, Finland and Luxembourg.

German banks have a glut of savings that is proving costly to hold, and the Association of German banks has said German, French and Dutch banks account for about two-thirds of the penalty charges paid for hoarding cash.

NOT ALL BAD

negative deposit rates have

basis it is arguable that many have in fact made a considerable amount of money from the ECB and its various efforts to shake the economy out of its decade-long economic slumber.

Many of the central bank’s efforts have been channelled directly to banks, in a bid to bring down their funding costs and get them lending again.

launched its longer-term

ECB has lent banks almost €2.2trn in cheap loans.

The ECB said last week it will offer a third TLTRO and sweetened the terms.

Those facilities have been provided well below market funding costs, making lending much more

otherwise have been. Since 2014, the ECB has even offered to pay banks to take its money, offering to pay them up to €3bn of bonuses a year if lending targets are hit.

Many banks – at least initially – used cheap ECB loans to buy eurozone sovereign debt as part of a carry trade that has boosted

generate precious capital for banks. Those trades have proved particularly lucrative as rates have fallen, pushing up the price of bonds.

Added to that, quantitative easing has been something of a boon for debt capital markets and trading desks. European bond issuance has sky-rocketed during the past 10 years of low interest rates.

“Overall, the ECB package hasn’t changed our base case for credit. Seen over what may well be a three to four-year horizon, even at a mere €20bn a month, the cumulative amount of purchases that the ECB will do at a time of excess liquidity should strike fear into anyone who is underweight on European credit,” wrote Hans Lorenzen, head of European investment-grade credit strategy at Citigroup.

Even if the ECB’s monthly purchases of corporate bonds are as small as €2.5bn, that,

into the asset class and even deeper negative deposit rates, should ensure that ”QE will slowly and steadily grind away at the market over time”, said Lorenzen.

The ECB also relaxed restrictions on some of the securities it can buy, saying that it will now consider corporate bonds yielding less than the deposit rate.

While there’s little paper at such levels “its removal is nonetheless a bullish signal, ensuring that even the richest part of the current eligible universe remains eligible in the event of a further bond rally”, wrote Michal Jezek, credit strategist at Deutsche Bank.

All of this is likely to bring a further tightening in credit spreads – Lorenzen thinks the iBoxx corporate index will rally to 60bp from its current level of 80bp – and an extended era of negative yields.

FIZZLING OUT

Unlike the corporate sector, which appeared to emerge as a clear winner, question marks remain as to how the ECB package will play out for the rest of the market.

In addition to the APP restart, Draghi, as he prepares to hand over the presidency to IMF chief Christine Lagarde, announced a 10bp cut in the deposit rate to –0.50%.

The stimulus package also included a third round of lending to banks through targeted longer-term

III) and introduced a tiered system of interest rates whereby part of banks’ excess reserves will be exempt from the charge.

Reaction in the government bond market swayed from euphoria to something more tepid as investors began to look more closely into the details of the ECB’s pronouncements on Thursday.

The yield on the 10-year Bund, for example, fell by about 7bp to –0.64% in the immediate aftermath but then

–0.54%. It edged up further on Friday to 0.48%.

“I think the rates volatility is a bit of a delayed reaction to

the tiered deposit rate,” the head of syndicate said.

“If banks can effectively park cash, at least to some degree, at 50bp over the base rate, this whole ‘I’ve got to buy everything that moves because it has a positive yield’ doesn’t really play out anymore. So a lot of the bank treasury demand that was really cash-parking could ebb.”

Covered bonds could be similarly impacted, bankers said, though any drop in real money demand would probably be counterbalanced by the fact that the ECB will be back buying large chunks of trades in primary.

Still, how far they can push in terms of negative yields and whether this can spread to senior preferred remains to be seen.

“We’ve seen it for corporates, so why not banks?” the DCM banker said. “So far, issuers have been very reluctant to do it because they fear capacity will be very limited.”

“It’s party time for corporates”


Top news

HKEx falls flat with LSE bid People & Markets LSE savages Hong Kong exchange’s ambitious takeover plan

BY THOMAS BLOTT

The Hong Kong stock exchange operator’s audacious £31.6bn (US$39.1bn) bid for the LONDON

STOCK EXCHANGE GROUP drew a savage response on Friday, as the

LSE said the board unanimously rejected the approach in a letter slamming the long-term viability of a merger with would-be suitor HONG KONG EXCHANGES AND CLEARING.

“We see the value of your share consideration as inherently uncertain. The ongoing situation in Hong Kong adds to this uncertainty,” LSE chairman Don Robert wrote. “Furthermore, we question the sustainability of HKEx’s position as a strategic gateway in the longer term.”

The timing of the approach from HKEx had stunned market

throes of a US$27bn deal to

company. HKEx said its offer would be subject to that purchase being called off by December 31.

It also comes amid rising geopolitical tensions between China and the West, which will probably complicate the approval process. LSE owns the Milan exchange, the FTSE Russell index business and major international clearing houses, meaning that the deal would probably require sign-off from the US and the EU as well as the UK government.

of HKEx, said the exchange had long considered buying LSE and the deal was strategically compelling as it would create a combined 18-hour trading zone, enhancing capital

conceded that the exchange had been late with an offer, however.

“We are here, just to be a bit lighthearted, almost like a corporate Romeo and Juliet. We were probably a bit hesitant and slightly late,” he said. “We know we were late; we don’t want to be late again.”

“We wanted to be able to openly express our admiration so that people, using this analogy, the villagers, the parents and the siblings and all the community are

able to hear that we truly mean to bring a compelling proposition to the City of London and to LSE.”

Li’s Juliet, however, made her feelings quite clear in Friday’s letter.

“We do not believe HKEx provides us with the best long-term positioning in Asia or the best listing/trading platform for China. We value our mutually

Shanghai Stock Exchange, which is our preferred and direct channel to access the many opportunities with China.”

Having waited so long to make its feelings known, HKEx will not be easily rebuffed. On Friday it responded to LSE’s rejection by stating “HKEx believes that shareholders in LSEG should have the opportunity to analyse in detail both transactions”.

REFINITIV COMMITMENT

HKEx announced its unsolicited cash-and-shares takeover of LSE on Wednesday. The offer comprises £20.45 a share in cash and 2.495 newly issued HKEx shares, valuing LSE at £83.61 a share and £29.6bn overall (or

£31.6bn inclusive of net debt and other adjustments).

This represents a 22.9% premium to last Tuesday’s closing price. It is also a 22.4% premium to the volume weighted average closing

date after the announcement of the

to the July 26 price, the day before the announcement.

HKEx’s approach sent LSE’s share price higher last Wednesday, jumping more than 15% in early trading before paring gains to close the day up 6% at £72.32 after the board said in a statement it was

HKEx slid 3.3% the following day in Hong Kong as investors reacted to the potential acquisition.

Guy de Blonay, a fund manager at Jupiter Asset Management, one of LSE’s top 25 shareholders, said he expected LSE shareholders would be unlikely to back HKEx’s takeover unless the exchange changes its stance on the

“The crucial element of the deal is whether it is indeed

India fuels renewables bond rush Emerging Markets New energy companies look offshore to fund massive capacity expansion

BY KRISHNA MERCHANT

Indian renewable energy companies are looking to the US dollar bond market to fund a major capacity expansion as they grapple with tight liquidity conditions at home.

Changes to Indian regulations have made it easier to tap the offshore market, while the rupee bond market is still tough to access for those without top credit ratings.

AZURE POWER GLOBAL has hired banks for a proposed offering of

bonds, SEMBCORP ENERGY INDIA is looking at raising dollar bonds while it waits for market conditions to improve for a domestic IPO, and ADANI GREEN ENERGY is in discussions

with bankers for a potential long-dated benchmark dollar bond issue.

So far this year, Greenko Energy Holdings, Adani Green Energy and ReNew Power have raised a total of US$2.5bn from dollar bonds.

This came after liquidity in the Indian bond market collapsed for issuers rated below a local AAA.

“There is no market available in India for high-yield names since the debt market is going through turbulence and banks are getting reorganised,” said Vasudeva Rao Kaipa, chief

Indian mutual funds have shunned riskier credits after the collapse of Infrastructure Leasing & Finance Services last year and state-owned banks

with a huge debt pile are reluctant to lend.

In contrast, the offshore pipeline is growing after the Reserve Bank of India on July 30 allowed Indian companies to use the proceeds from overseas borrowing to repay rupee debt. Previously, they could use offshore funding only for capital expenditure.

A minimum seven-year

capital expenditure loans, and 10

loans. The cap on interest costs remains unchanged at 450bp over the benchmark rate.

“The recent relaxations to allow external commercial borrowings

welcome move,” said Vipul Tuli,

managing director at Sembcorp Energy India, though he said there tends to be very little liquidity at the seven-year tenor needed for

Sembcorp Energy is a foreign-owned entity, the structure that we can do is limited.”

The offshore entity, Sembcorp Energy, may raise dollar bonds and use the proceeds to subscribe to the rupee bonds of the domestic subsidiary. Tuli did not disclose the timing, size or tenor of the potential bond offering.

For its part, Azure Power Global intends to use the net proceeds of dollar bonds to subscribe to rupee bonds issued by onshore subsidiaries.

The offshore market offers greater scope for innovative structures. “Most of the renewable companies have special purpose vehicles which own multiple projects, and the



contingent on the London Stock

being taken off the table,” he said, before Friday’s rejection.

“If this is the case, it looks uncertain whether shareholders will accept the offer given that

across the shareholder base for its potential to transform the business and add value over the long-term.”

when a Blackstone-led consortium bought a 55% stake

and risk business in the largest leveraged buyout since the

Reuters owns the remaining 45% stake.

declined to comment.

ELEVATED POLITICAL RISKSAnalysts noted that the LSE acquisition offered a once-in-a-generation opportunity for HKEx to create a global exchange network to rival Nasdaq and Intercontinental Exchange, which operates NYSE, although some questioned the chances of regulators approving the deal.

“We think there are a few antitrust implications from a

tie-up between LSE and Hong Kong Exchange,” said Chris Turner, analyst at Berenberg, in a research note to clients.

“An acquisition of the LSE would see a Chinese company acquire the primary equity markets of both the UK and Italy, as well as key infrastructure for European debt markets. We believe this transaction would face elevated political risks as a result.”

Turner expected LSE’s board to reject the offer, citing a similar scenario in 2016 when it rejected a proposed takeover by Intercontinental Exchange as it had already agreed to merge with Deutsche Boerse. The EU eventually blocked that deal on competition grounds.

The LSE’s response spelled out similar doubts, noting that any takeover would be “subject to full scrutiny” from regulators and governments in the UK, US and Italy.

“There is no doubt that your unusual Board structure and your relationship with the Hong Kong government will complicate matters,” LSE said.

Under UK takeover laws, HKEx has until October 9 to

away for six months.

bond proceeds are being used to infuse liquidity into the projects,” said a DCM banker.

Moreover, “raising offshore bonds from a holding company helps because of the guarantee from the parent and investors are more comfortable”. said Greenko’s Kaipa. As a result, Greenko found it cheaper to sell dollar bonds.

Credit strategists expect good demand from yield-hungry investors for dollar bonds from Indian renewable companies, even though they are priced tightly.

“We could see incremental supply of US$1.0bn–$1.5bn from Indian renewable companies for the rest of the year,” said a DCM banker.

The fundraisings come as India aims to increase renewable energy capacity to 500GW by 2030 from 357GW currently,

according to government projections.

Azure Global Power is committed to adding 1,500MW of solar capacity and Greenko is planning to add 2.5GW of storage capacity by 2022.

Financial conditions are also improving for renewable and power companies. The state-owned power distribution companies (discoms) have started offering letters of credit for power purchases as a payment security after the government made it mandatory. That is good news for the generation companies.

“The discoms are paying on a daily basis after the LC mechanism was implemented from August 1,” Tuli said. “The amount of follow-up required for basic payment from discoms has reduced substantially. I have not seen something like this in 30 years.”

Aramco IPO fees could hit US$180m

Equities Base fee set at 35bp between nine banks hired for US$20bn-plus IPO

BY ROBERT VENES

Banks will pick up an aggregate base fee of at least US$70m for the local listing of SAUDI ARAMCO expected in November, providing the oil giant achieves an expected valuation of US$2trn.

The base fee has been set at 35bp, according to bankers on the deal. The emphasis is on outperformance as the incentive fee is much bigger at 55bp, and

level. If fully paid it would put total fees at US$180m.

The Saudi kingdom intends to

the Tadawul exchange this year, with pricing now expected in November. That would give a deal size of US$20bn, with the local route seen as the best chance to secure the desired US$2trn valuation, smaller than Alibaba’s record US$25bn NYSE

largest IPOs. Alibaba paid a 120bp total fee, with US fees typically higher than in EMEA.

A further 1% is expected to be listed on an international exchange in 2020 or 2021, but plans for that are still some way off.

JP Morgan, Morgan Stanley and HSBC are once again joint global coordinators, having been mandated previously. They have been joined on the same level by Bank of America Merrill Lynch, Citigroup, Credit Suisse, Goldman Sachs and local banks National Commercial Bank and Samba Financial.

The banks have yet to be

structure, although JP Morgan and Morgan Stanley are said to be sponsors and will “do more quarter-backing than others involved”, said one banker on the deal.

Another banker said that international participation will probably be as low as 10%, with domestic money getting 90%.

The company has already talked to large domestic investors, with Saudi princes expected to be central, and is understood to have lined up indications of interest of around US$40bn. The company could opt for a well covered deal at US$20bn or increase sizing above 1% for a

There is no concern about getting the deal done, however.

Typically, an IPO would need to be covered at least two times to be sensibly allocated, but this was not the case with Arabian Centres, which priced a SR2.47bn (US$659m) IPO in May. That deal was only 10% oversubscribed, with just 16% international participation. Despite initial weakness the shares are now up 7%.

Two bankers said that Aramco expects international banks to

demand. One said that the level of interest from Western money was high but not as much as when a London listing was expected.

The deal size may be slightly smaller, with reports of a valuation closer to US$1.5trn, and international accounts may want a discount for emerging markets risk.

“This will be one of the largest IPOs anywhere for one of the largest companies in the world, and it is being done on an exchange that has not been tested anywhere near that scale, so it will pose some challenges,” said a third banker working on the transaction. He said MSCI inclusion in June last year has been a big step forward for the deal, but Western investors will have to come to terms with other issues, such as a much longer settlement period.

“That being said, if the political will is there, there is no doubt that the relevant infrastructure will be tip top,” he said.


Top news

PE-owned firms strain as loans lose value Loans BC Partners suffering with “disproportional amount” of problem credits

BY CLAIRE RUCKIN

more portfolio challenges in Europe as retail and cyclical companies remain under pressure, but BC Partners has more than its share of problem credits that are attracting attention from distressed investors.

The secondary loan value of some European companies owned by BC Partners have fallen heavily since the start of the year, although the private

supported by some big wins.“There are some tricky

leveraged loans out there for most sponsors but BC Partners seem to have a disproportional amount,” a head of capital markets banking said.

London-based BC Partners specialises in buyouts and

middle market European and US

companies and is looking to

pound fund next year.German managed hosting

provider PLUSSERVER’s loans have nearly halved in value and were quoted at 50% of face value on September 11, according to LPC data, down from 92.25% at the end of 2018.

Other BC Partners-owned companies including Dutch

DUMMEN ORANGE and Irish online car rental company CARTRAWLER’s loans have also been under pressure recently.

Dummen Orange’s loans were quoted at 61% this month, down from 80% in late 2018 and CarTrawler’s loans were quoted at 84% of face value on September 12, down from 99.25% in the same period.

These loans are drawing attention from distressed investors scouting potential restructuring situations, as

retail companies battle online vendors and cyclical companies struggle.

Europe’s top 40 leveraged loans are trading at an average 98.7%, up from 97.35% at the start of the year, but some sectors are still trading well below par, with retail at 93.10%, general manufacturing at 91.24% and construction at 71.98%.

Spanish bridal wear designer PRONOVIAS’ loans were quoted at 89.96% in September, down from 94.5% at the end of 2018 and Israeli furniture maker KETER’s loans are still trading at a

despite rising from 78.39% in late 2018. Both companies are owned by BC Partners.

The common theme appears to be poor performance in over-leveraged companies against a weakening economic backdrop, but some investors are also questioning how the companies are being managed.

Despite problems in its European portfolio, BC Partners’ overall returns are being held up by some strongly performing companies, including German industrial ceramics group CERAMTEC and US animal products retailer PETSMART.

“BC Partners has had some massive home runs, such as PetSmart, but several European deals are not performing well,” a

said.

EXPANSION

Blackstone Alternative Asset Management invested around €500m for a 15%–20% stake in BC Partners in August.

BC Partners said at the time that the move would provide it with increased balance sheet capital to further invest in its business and expand its capabilities.

WARNING SIGN

earned negative reputations in

WeWork re-works valuation Equities Office landlord makes concessions ahead of IPO bookbuilding launch

BY STEPHEN LACEY

The only thing certain about

better known as WEWORK, is the utter lack of certainty, as the

forced to re-work all manners of its IPO.

WeWork plans to launch bookbuilding on Monday September 16 on a US$3bn-plus equity-linked offering that will target a cut-rate valuation, according to bankers involved in the underwriting.

Reuters reported on Friday that the IPO will target a valuation of between US$10bn and $12bn, a fraction of the US$47bn WeWork was valued at earlier this year on a US$2.5bn private round with SoftBank.

Bookrunners mandated on the deal were all scheduled to run

the revised terms through committees on Friday afternoon.

JP Morgan and Goldman Sachs, the leads of eight bookrunners, have been driving efforts to restructure the deal.

prospectus on Friday morning that outlined the extent of changes undertaken – no declaration on valuation but

corporate governance, prepping the market for the deal to be launched on Monday.

Adam Neumann, WeWork’s 40-year-old CEO, pledged to give

real estate agreements between him and the company, arguably

on governance.Super-voting shares held by

Neumann were dropped from 20 votes apiece to 10, with a sunset

provision added that would drop the class to one vote in the event Neumann becomes permanently incapacitated or dies.

WeWork also pledged to appoint a lead independent director by the end of the year and maintain a majority of independent directors. Increasing gender and ethnic diversity of the company’s board is another stated goal.

As has been the case throughout, the timeline and structure are subject to change.

As originally contemplated, WeWork’s offering was all-primary, entirely Class A common shares, and sized at US$3bn-plus. Given the dramatic reduction in valuation, the offering could be restructured to include a mandatory convertible, speculated one of the bankers.

“A lot of this has been dictated between Neumann and [SoftBank CEO] Masayoshi Son,” one banker involved said. “All of the SoftBank stuff we’ve been around [in the past] has had the element of an adversarial relationship.

“[Masa] has enough money to pull the trigger on anything he wants to invest in. But the relationship is not always as a partner with a company.”

The mandatory convertible, presumably subscribed to by SoftBank, would be a way to limit dilution of selling stock at the lowered valuation.

The US$3bn fundraising is a contingency to unlocking US$6bn of credit facilities, provided by the same banks leading the IPO.

WeWork’s credit facility is not the panacea to liquidity some



Virgin Galactic to host investor day at spaceport

Equities Branson and Palihapitiya begin countdown to acquisition

BY STEPHEN LACEY

VIRGIN GALACTIC, the Richard Branson-backed space travel company, is holding an investor day on Tuesday at the company’s New Mexico spaceport.

The investor day is designed to drum up interest in the pending acquisition of Virgin Galactic by SOCIAL CAPITAL

HEDOSOPHIA, the special purpose acquisition company headed by serial entrepreneur Chamath Palihapitiya, according to a banker close to the situation.

The meetings will include televised interviews on CNBC, and follows approval by Social Capital shareholders of an extension to close the acquisition.

Social Capital went public two years ago in a US$690m IPO and would have had to return that money to shareholders without the three-month extension approved early last week.

The proposal to extend closing until December 18 was nearly unanimously approved.

Social Capital, which trades on the NYSE, is in a holding pattern.

After agreeing to a US$1.3bn tie-up with Galactic, Social Capital units peaked as high as US$10.97 but have since returned to US$10.37.

The trading level is notable as if the SPAC’s shareholders reject the takeover they would at present receive US$10.367 per share, after factoring in interest earned on the IPO proceeds held in trust.

Terms of the acquisition would see Social Capital invest all of the US$700m cash raised from its IPO, with Palihapitiya chipping in an additional US$100m, for a combined stake of 49% in Virgin Galactic.

Virgin Galactic’s shareholders will harvest US$300m and retain a 51% stake in what would be the

travel company.If Social Capital

shareholders dissent from the plan then the SPAC will need to plug any shortfalls with alternative capital.

The US$460m of cash in place post-closing, assuming no redemptions, will see Galactic

sometime in late 2020.

support, though not necessarily from current SPAC shareholders.

Credit Suisse, which took Social Capital public and advised on the M&A, plans to conduct a non-deal roadshow in late September or early October to transition a registry from opportunists to true believers.

Galactic has secured US$80m of deposits from 600 customers that represent US$120m of potential revenue. Galactic stopped taking orders

backlog of 2,500 inquiries.Galactic is targeting 16

passengers on a 90-minute ride at Mach 3. In 2021, the targets

passengers, then 170 and 965 the following year, and 270 and 1,565 in 2023.

For perspective, 571 people have been into space.

lenders due to their reluctance to support portfolio companies and an aggressive approach with investors.

Charterhouse Capital Partners lost control of portfolio companies including French retailer VIVARTE and UK hygiene services provider PHS in painful debt-for-equity swaps in 2014, which brought losses for lenders.

Lenders and investors are closely monitoring how BC Partners will deal with these situations, and whether the

support or walk away if businesses are deemed to be

“BC Partners is on a really bad run at the moment. Quite a few deals are troublesome and it remains to be seen exactly how they behave as it will determine how much people work with them,” a second capital markets head said. “People are asking if they are still a top-tier sponsor.”

Questions are also being asked about BC Partners in

banks’ credit committees, particularly about potential new covenant-lite loans with loose documentation.

“BC hasn’t had to come together with lenders yet, so the test of their mettle is yet to

head said.With little protection thanks

to the proliferation of cov-lite loans, investors have limited recourse as long as companies continue to pay the interest margins on their loans, even if sales and performance are sinking.

“Companies with covenant-lite loans just need to cover their interest. The risk is that they become zombies for a few years and the sponsor has a free hand to do what they want,” a syndicate head said.

The upside of cov-lite loans

they have breathing space to manage portfolio companies out of problems, or ride economic and commodity cycles without pressure from lenders.

have made it out to be, but the company most certainly would not be able to procure similar terms on a new arrangement.

The bank facilities comprise a US$2bn letter of credit facility and a US$4bn delayed-draw term loan; the latter will only be available over time based upon minimum liquidity tests.

WeWork still intends to draw down US$1bn from the bank facility on the IPO, it indicated

Terms of the credit agreement do provide banks with protections in the form of minimum liquidity requirements.

WeWork will only be able to access US$1bn of the US$4bn delayed-draw term loan. Another US$1.5bn becomes available after the company

second quarter of 2020, and the remaining US$1.5bn after 2020 year-end results.

That access, however, is contingent upon the company

maintaining minimum unrestricted cash of US$3.5bn through to June 30 2021.

quarter with US$2.5bn of cash.The bigger concern, among

all constituents, is that WeWork is haemorrhaging cash. In the

US$1.4bn on an operating basis on revenues of US$1.5bn.

business within 18 months,” said one investment banker. “The challenge is that they sign a long-term lease on a building and it takes them at least a year to build out and

have to slow growth.”There are no clear options,

other than to rein in expansion, or lose access to the capital

from existing leases have been pledged, in part, to the credit facilities, limiting the company’s ability to undertake securitisations.

If the SPAC’s shareholders reject the takeover they would at present receive US$10.367 per share

Galactic has secured US$80m of deposits from 600 customers


Top news

Pemex enjoys successful return to dollars Emerging Markets Oil company garners US$38bn book as part of liability management exercise

BY MILUSKA BERROSPI

PEMEX landed a US$7.5bn blowout three-part US dollar bond last Thursday, garnering a US$38bn order book in what was

deal in close to a year.The offering was described as

a triumphant return for the company, which just a few months ago was the centre of

“It was a blowout trade; a truly transformational trade for Pemex in which there was demonstrated commitment on behalf of the sovereign to Pemex,” said a banker close to the deal.

The offering was part of a jumbo liability management transaction as the troubled state-owned entity looks to deal with

upcoming maturities and expensive debt payments.

The deal followed a rally in Pemex bonds spurred on by the Mexican government’s decision to inject US$5bn into the highly leveraged company, which carries more than US$100bn of debt on its books.

Leads approached investors with 2027, 2030 and 2050 bonds, which priced at yields of 6.5%, 6.85% and 7.7% – tight to initial price thoughts of 6.75%, 7.25% and 8%.

The bonds were also set to trade nicely on the break with the bonds bid up in the grey market.

LOW RATES

Even so, the big book and tight pricing were not only a validation

of buoyant market conditions and investors’ hunt for yield in a low-rate environment.

Yields on Pemex’s new bonds were trading higher than some of Mexico’s sovereign bonds.

“We’re working with a bit of a distorted bond market where the presence of negative interest rates and excess amount of loanable funds that are in the global system are causing mispricing,” said a bond analyst.

“On a standalone basis, it wouldn’t have come in at these kinds of yields.”

RIGHT DIRECTION

And while the government’s capital injection was seen as a step in the right direction, investors think Pemex has some way to go before it can stave off further downgrades.

“We continue to believe that Pemex is at risk of a downgrade, particularly given our view that the US$5bn capital injection by the Mexican government is

reserves,” said Rafael Elias, an executive director at emerging

Tellimer, in a report.

There have been worries that the company could

angel if the other main rating agencies follow Fitch, which downgraded Pemex in June to

Budweiser adds cheer to HK IPOs Equities Revived US$5bn float seen as a boost for Hong Kong market

BY FIONA LAU

Anheuser-Busch InBev has revived plans for a Hong Kong

that could raise about US$5bn, underlining the city’s appeal as a capital raising venue despite ongoing political protests.

BUDWEISER BREWING COMPANY

APAC, which pulled a mega Hong Kong IPO in July, plans to open books on Wednesday with pricing tentatively slated for September 23 and listing on September 30.

“We have a market window here and we think we should go ahead. You never know how the Hong Kong protests, Brexit and US-China trade talks will go,” said a person close to the deal.

The deal comes at a time when months of protests in the territory have put at least one

on hold. Chinese e-commerce

giant ALIBABA GROUP has held back a US$10bn–$15bn secondary listing in Hong Kong

June.The Hang Seng Index rallied

close to 1,000 points on September 4 after the government formally withdrew a controversial extradition bill that had ignited the protests. As of last Thursday, the index has risen 6.1% since September 3.

MINUS AUSTRALIA

AB InBev shelved a HK$76.6bn

APAC in July after investors pushed back on the high valuation. The Belgium-headquartered brewer then sold its Australian operations, which

slow-growing, to Japan’s Asahi Group Holdings for A$16bn (US$11bn) to help pay down debt.

In July, Budweiser APAC marketed primary shares at a 2020 EV/Ebitda of 15.5–18.2 and a 2020 P/E of 28.5–33.5. It intended to list about 15.4% of its enlarged share capital at a pre-shoe valuation of around US$54bn–$64bn.

Minus the Australian unit, the company is now looking at a valuation of about US$45bn in the revived listing, said another person close to the deal.

“With a lower valuation for assets of higher growth, the deal should be able to get done,” said the person.

on the stock exchange’s website last Thursday, Budweiser said it considers China, South Korea, India and Vietnam to be its principal markets.

Ex-Australia the company

2019, up 12.7% year-on-year.

the Australian business, had

the same period but a slower growth rate of 1.4% year-on-year.

normalised Ebitda of

grew 23% from a year earlier, compared with a 13.4% growth rate including the Australian unit.

JP Morgan and Morgan Stanley are the sponsors.

IPO BOOST

The Budweiser deal, together with a HK$3.7bn Hong Kong IPO launched last Monday for SHANGHAI HENLIUS BIOTECH, comes as a welcome boost to Hong Kong’s

“With a lower valuation for assets of higher growth, the deal should be able to get done”

“On a standalone basis, it wouldn’t have come in at these kinds of yields”



LGFV sends perpetual warning

Emerging Markets Jilin issuer shocks with decision not to call

BY YANFEI WANG, DANIEL STANTON

JILIN COMMUNICATION INVESTMENT

GROUP, a local government funding vehicle in China’s struggling north-eastern rust belt, will not redeem its

date on September 28, becoming

a step.The yield on the Rmb1.5bn

(US$210m) 4.64% notes issued in 2016 has soared to 11%, jumping 21bp on August 19 after the issuer failed to give 30 working days’ notice ahead of the call date. It will instead add 300bp to the original spread over the three-year government benchmark, taking the coupon to around 8%.

Although the terms of the bonds allow such a move, investors tend to assume perpetual notes will always be

and view a missed call date as a sign of stress.

Analysts said the unprecedented step was likely

North-East region and affect the pricing of perpetual bonds, a popular tool for Chinese issuers looking to raise funds without adding to their leverage ratio.

“Everyone is quite anxious at a time when worries about defaults are rising,” said a bond trader.

In early August, some investors held meetings with the company to discuss

with the issuer told investors that stepping up the coupon was the only option it could offer.

Jilin Communication Investment did not respond to interview requests.

Meanwhile, some investors are considering legal action, claiming that the company breached the bond contract when it failed to disclose the replacement of its legal representative, Qiu Zhuang. Qiu

was expelled from the Communist Party in 2018, according to the Central Commission for Discipline Inspection’s website.

Missed call options are rare in the onshore Chinese market. Only 13 issuers have previously skipped call dates on 16 perpetual bonds totalling Rmb17.1bn, less than 1% of all outstanding onshore perps. Of those, nine were issued by high-rated issuers that sought agreement from investors in advance. Only seven bonds, totalling Rmb8.5bn, were issued

challenges. These issuers include HNA Airlines and Tianjin Airlines, part of the troubled HNA group, according to data provider Wind Info.

JPCIG, backed by Jilin State-owned Assets Supervision and Administration Commission, is a major LGFV in Jilin province with its main business in railway construction. According to the company’s mid-year report, it has outstanding debt totalling Rmb30.18bn, equivalent to 80.7% of its total assets, up from Rmb29.5bn in 2018.

“It can only make things worse for companies in the rust belt. It will be hard for investors to

north-eastern issuers as we have

all north-eastern issuers for quite a long time,” said a fund manager not involved in the deal.

Three-year LGFV bonds from the North-East pay 6.72% on average, 118bp higher than the national average, according to Wind Info.

Particular scrutiny may be directed at lower-level Jilin province LGFVs.

“There will be spillovers in the region coming up,” said a credit analyst.

China Chengxin assigned AA+ ratings to both the issuer and the bonds, and downgraded the issuer’s rating to AA on July 26.

sub-investment grade (to BB+ from BBB).

Moody’s and S&P both have negative outlooks on Pemex with ratings of Baa3 and BBB+, respectively.

Adding to the concerns is the company’s ambitious production targets – it plans to produce 1.9m barrels per day by the end of next year.

“On a fundamental level, we believe the company is insolvent as a standalone entity and we expect a steep spread widening if and when the Moody’s downgrade crystallises,” Elias said.

Alongside the bond, Pemex is carrying out a cash tender for bonds maturing 2020 to 2023, as well as an exchange offer for bonds maturing between 2022 and 2048.

“The planned debt repayment and exchange offers will increase revolver borrowing availability and

debt maturities, improving Pemex’s liquidity position and

Speer, a Moody’s senior vice-president, said in a report last week.

Those involved in the deal are convinced that the transaction marks a positive turnaround for the company.

A person closely following the transaction said: “It was a successful strategic move by Pemex to address the market’s concerns about its short-term and liquidity issues.”

“This [deal] addresses those concerns head on very aggressively.”

Citigroup, Goldman Sachs, HSBC and JP Morgan were active bookrunners and lead dealer managers on the transaction. Bank of America Merrill Lynch, Credit Agricole, CIBC and Mizuho Securities were passive bookrunners and dealer managers.

IPO market, where new listings on the main board year to-date are down 55% year-on-year at HK$84bn, according to data from the Stock Exchange of Hong Kong.

Months of unrest, including violent clashes between protesters and police, and a worsening US-China trade dispute, have contributed to market volatility over the summer and turned many investors cautious on Hong Kong’s long-term future.

To improve its chances of success, Fosun-backed Henlius brought in four cornerstone investors for a combined US$140m including a US$90m investment from Qatar Investment Authority. (See Equities section.)

“Markets are shaky and investors are still very cautious over IPOs. A renowned cornerstone investor hopefully can help drive momentum,” said a banker on the Henlius deal. Books were covered by Friday.

Others have chosen to lower their fundraising size or wait for a better window.

company HOME CREDIT and Chinese lender BANK OF GUIZHOU aim to open books in October for respective Hong Kong IPOs of about US$1bn, despite having

Home Credit has cut its fundraising target from US$1.5bn to US$1bn, potentially selling just 10% of its enlarged share capital.

cornerstone demand.Bank of Guizhou, meanwhile,

decided not to launch the deal immediately as it wants to monitor market conditions and the development of the Hong Kong protests.

TOPSPORTS INTERNATIONAL, the sportswear business of Chinese footwear retailer Belle International and China’s largest sportswear retailer, last week started pre-marketing a US$1bn IPO. Books may open on Tuesday.

“There is interest in the deal but it all comes down to valuation. Issuers will have to be less aggressive under these market conditions,” said a person on the Topsports deal.


We invite banks to pitch now for the IFR Awards 2019.

To help with our selections, banks, advisers and issuers may submit brief written presentations along with supporting data. IFR journalists will also organise pitch meetings.

Pitching is entirely optional and consideration for an award will not be limited to advisers or issuers that participate in this way.

All written pitches should reach us by October 14.

We will continue to monitor the market until the end of the awards year (the period in which deals must price for consideration) and banks may submit

price after submitting their pitches.

The awards year runs from November 16 2018 to November 15 2019.

In your presentations for house awards you may want to summarise achievements in the awards year. For instance:

How has your institution progressed over the course of the year?

What strategic goals have been met? How have they been achieved? In what ways has your institution

adapted to the trends that have driven market activity during the year?

What has been noteworthy about your deal roster, whether in terms of deal size, geographical and/or sectoral

complexity?

Presentations should include individual summaries of the main relevant transactions. Separate documents should be submitted for each major asset class.

Pitch meetings with IFR journalists are limited to a maximum of two hours per asset class. The contents of pitch meetings will be “on the record”, though comments can be made “off the

Pitch documents should be emailed

Global, EMEA and Americas categories.

categories should be sent to

Please indicate for which awards you are pitching, giving appropriate contact details.

Final selections will be made by the senior editorial team. The winners will be announced in the IFR Review of the Year published on www.ifre.com on December 13, and with the December 14 issue of IFR.

Notes on award categories:1) Banks do not need to be active across a region to be considered for regional house awards.

acting as a non-underwriting adviser are considered for Capital Markets Adviser.3) M&A Adviser covers transactions completed in the awards year.4) Bank for Financial Institutions, Governments and Financial Sponsors covers all capital markets activity across regions, from LME to rights issues, privatisations to century bonds, LBOs to IPOs and M&A and everything in between.5) The winner of Bank for Private Credit

and other important client services to the rapidly growing private credit industry.6) ESG House recognises the best bank

classes.

only be considered if the M&A transaction has completed in the awards year, as it is at this point they are funded. Bonds need to have priced within the awards year but are not contingent on the M&A having also completed.8) Financing Package represents one

classes but all parts need not have been executed concurrently.9) Leveraged and Mid-Market Loans feed up into Loan House awards.10) Bond awards do not embrace

separately.11) Bond and Bond House awards for Financial, SSAR and Covered are cross-currency.12) US Bond House comprises all US dollar issuance in the US, including Yankees.13) Only 144A and SEC-registered US

dollar issues are eligible for US Bond and Yankee Bond awards.14) SEC-registered and 144A deals from issuers based in emerging markets are included in Emerging Market categories (along with domestic bond issues, etc).15) Regional bond house awards are for any issuers in the relevant regional currencies, for example Europe Investment-Grade Corporate Bond awards are for investment-grade corporates in European currencies (including Eurodollars).16) EMEA Issuer Bond House includes all issuance on behalf of issuers from the EMEA region across currencies. The US equivalent is for US-based issuers, including reverse Yankees.17) Yen Bond awards include Samurais.18) Niche-Market Bond awards comprise bonds in non-core currencies or niche markets in major currencies, such as Formosa.19) Structured Equity comprises equity-linked transactions, including those with derivative components, and structured cash equity transactions. 20) Structured Equity feeds up into Equity House awards.21) Restructuring includes formal debt restructurings and balance sheet restructurings.22) Middle East Bond House feeds up into Emerging EMEA Bond House.

IFR AWARDS 2019 PROCESS

If you have any questions about the awards process, please contact Editor Matthew Davies +44 20 7542 7504

Deputy Editor Owen Wild +44 20 7542 8541

contact Stephen Lacey +1 646 223 8808

+852 2912 6670

Presentation of the IFR Awards at the Grosvenor House Hotel, London will take place on January 28 2020 in the presence of HRH The Princess Royal, patron of Save the Children.

Further details on the event are available at www.ifrawards.com.


IFR AWARDS 2019

TOP AWARDSBank of the Year

Bond House

Equity House

Loan House

Derivatives House

Emerging Markets Bond House

ESG House

Capital Markets Adviser

M&A Adviser

Restructuring Adviser

Bank for Financial Institutions

Bank for Governments

Bank for Financial Sponsors

Bank for Private Credit Funds

ISSUER AWARDSSSAR Issuer

Financial Issuer

Corporate Issuer

ESG Issuer

Financing Package

BOND AWARDSUS Bond House

US Bond

Yankee Bond

Euro Bond House

Euro Bond

Yen Bond House

Yen Bond

Sterling Bond House

Sterling Bond

Swiss Franc Bond House

Swiss Franc Bond

Niche-Market Bond House

Niche-Market Bond

US Issuers Bond House

Western Europe Issuers Bond House

North America Investment-Grade

Corporate Bond House

North America Investment-Grade

Corporate Bond

Europe Investment-Grade Corporate

Bond House

Europe Investment-Grade Corporate

Bond

North America Financial Bond House

North America Financial Bond

Europe Financial Bond House

Europe Financial Bond

SSAR Bond House

SSAR Bond

Covered Bond House

Covered Bond

North America High-Yield Bond House

North America High-Yield Bond

Europe High-Yield Bond House

Europe High-Yield Bond

STRUCTURED FINANCE AWARDSNorth America ABS House

North America ABS Issue

North America MBS House

North America MBS Issue

EMEA Structured Finance House

EMEA Structured Finance Issue

EMERGING MARKETS AWARDSEmerging EMEA Bond House

Emerging EMEA Bond

Middle East Bond House

Latin America Bond House

Latin America Bond

Latin America Local Market Bond

House

Latin America Local Market Bond

Asia Bond House

Asia Bond

DERIVATIVES AWARDSEquity Derivatives House

Credit Derivatives House

Interest Rate Derivatives House

Foreign Exchange Derivatives House

LOAN AWARDS

Americas Loan House

North America Loan

Latin America Loan

EMEA Loan House

EMEA Loan

North America Leveraged Loan

EMEA Leveraged Loan

North America Mid-Market Loan

EMEA Mid-Market Loan

ESG AWARDSGreen Bond

Green Loan

Social Bond

Social Loan

ESG Opinion Provider

EQUITY AWARDSNorth America Equity House

North America IPO

North America Secondary Equity Issue

Latin America Equity House

Latin America Equity Issue

EMEA Equity House

EMEA IPO

EMEA Secondary Equity Issue

US Mid-Market Equity House

EMEA Mid-Market Equity House

STRUCTURED EQUITY AWARDSAmericas Structured Equity House

Americas Structured Equity Issue

EMEA Structured Equity House

EMEA Structured Equity Issue

RESTRUCTURING AWARDSAmericas Restructuring House

EMEA Restructuring House

IFR AWARDS 2019 PROCESS

24TH FINANCING ENERGY PROJECTS IN ASIA CONFERENCEThe 24th PFI Financing Energy Projects in Asia Conference takes place on Thursday October 10 2019 at the iconic .

Chaired by PFI’s Editor, Rod Morrison, the event will bring together panels of the most senior professionals from across the whole spectrum of the

and developments in the market.

More information will follow soon but, for now, you can secure your delegate place at this event by visiting

.

Sponsored by:


People&Markets19 Kinner

Lakhani joins the exodus of senior bankers leaving Deutsche Bank to head strategy and development at Credit Suisse

19 Changes in the senior ranks

at ING’s investment bank see Rob van Veldhuizen take over as global head of corporate finance

17 UK banks suffer a £5bn PPI hit

after the animatronic head of Arnold Schwarzenegger prompts a surge of late claims for compensation

FRONT STORY TRADING

Banking on SeptemberUS banks cautiously optimistic on Q3 - if this month holdsUS banks are looking at this month to determine how the third quarter will shake out in trading and investment banking as they seek to recover

US banks were last week cautiously optimistic about how the third quarter is shaping up,

MORGAN STANLEY

Jonathan Pruzan said the third quarter was “tricky” to assess due to holidays and

“What I’ve discovered is not many people

In trading, banks with easy to beat JP MORGAN

CEO Jamie Dimon said trading revenue at the bank could be up about 10% compared

“It was not a particularly good year last year, so we’re not jumping for joy on that

In Q3 2018 JP Morgan’s revenue from

equities trading revenue was up 17%, but the

Trading revenue at BANK OF AMERICA MERRILL

LYNCH should also be up slightly thanks to

“So far, we’re up a little bit in markets,”

The good news is BAML has been gaining

sentiment shared by most of his US peers, continuing a trend in recent years where they continue to take share from European

CONVICTION DOUBTSCITIGROUP and Morgan Stanley were more

“I’d say that things have improved since

revenues are likely to be slightly down versus last year given some of the volatility in the

ago third quarter Citi turned in the best

leading equities business, citing weaker client activity compared with last year,

“Conviction seems not to be as strong as

Bankers said the pipeline for deals in investment banking is healthy, even if there

“Whether or not we can convert those pipelines in September or the fourth quarter

will depend on sort of the macro

BAML’s investment bank revenues should be up in the low single digits in the third quarter, but that may not capture a renewed energy he

“In capital markets we just got a new intensity about ourselves and what we’re doing, and that’s allowed us, quite frankly,

He said the bank had added 54 new managing directors in banking globally that

revenues to be down year-over-year, while JP

“The story of this quarter is always in September … so we’ll see what happens,”

Philip Scipio

Source: Bain & Co report, September 2019

0

50

100

150

200

250

300

350

2018201720162015201420132012201120102009

2018 vs 2009Overall: -30%FICC: -51%Equities: flatIBD: +5%

2018 vs 2013Overall: -6%FICC: -20%Equities: +12%IBD: +4%

FICC Equities IBD

CAPITAL MARKETS REVENUES SINCE RECORD 2009:

FICC DRAGS HEAVY; REVENUES IN US$bn


Who’s moving where…

MOODY’S ON EUROPEAN INVESTMENT BANKS, P22

China scraps inbound investment quotasBeijing has scrapped quota limits on two inbound capital market investment

little immediate impact given Hong Kong’s status as the main conduit for cross-border

The STATE ADMINISTRATION OF FOREIGN

EXCHANGE said last week it would abolish

to allow foreign investors to trade in its onshore markets, although both schemes have since been largely superseded by the Stock Connect and Bond Connect trading

Investors prefer the Stock Connect and Bond Connect schemes because they do not require

At the end of 2018, just 309 overseas

scheme, according to the China Securities

foreign institutional investors have been

In contrast, there are more than 7,000 trading accounts using Stock Connect and just under 1,000 for Bond Connect, according

“WELCOME CHANGES”Nevertheless, regulators have taken a

restricting foreign investors from repatriating more than 20% of their total assets held in China each month, and scrapped a three-

as, for a lot of global investors, it’s important to maintain different access channels,” said Gary O’Brien, head of custody product for

“There are some advantages to using

particular stocks that are not available through Connect – but the Connect schemes remain the preferred access channel due to the more straightforward custodian

recent initiatives designed to better integrate China’s domestic capital markets

Only this month, BNP Paribas and

to receive licences to act as lead

Goldman hires pair to lead technology pushGOLDMAN SACHS has hired Marco Argenti from

Atte Lahtiranta from Verizon Media as chief

Argenti will replace Elisha Wiesel, who joins a raft of long-time partners who are calling time on their Goldman careers at the

Wiesel has been at Goldman for 25 years

group of leaders in the last few months, according to a memo to staff sent on

since 2017 and is also co-chair of the

Goldman in 1994 and was named partner in

2004, and held roles including chief risk

Another Goldman partner leaving at the end of the year is Dane Holmes, head of human capital management, which oversees all functions related to staff,

Holmes has been at Goldman for 18

He has been head of HCM for two years, and since 2016 headed Pine Street, Goldman’s leadership development group

heading investor relations and part of the

Laurence Steinwill have day-to-day oversight of HCM until

“DIFFERENTIATED TECH”A separate memo said Argenti and

be co-CIO with George Lee, tasked with delivering “differentiated and innovative

“Technology will only continue to shape markets, and digital platforms that seamlessly

transact,” according to the memo from CEO David Solomon, chairman John Waldron and

CITIGROUP has hired Goldman Sachs banker Marc Banziger as co-head of corporates for US investment-grade bonds. He will work alongside Jeff Kania who was promoted to co-head of corporates. Banziger was with Goldman for the past decade, most recently

as head of healthcare investment grade financing. Before that he was with Merrill Lynch, after beginning his career as an attorney with Davis Polk & Ward. Kania has been with Citi for more than 20 years. He was most recently a managing director in the DCM group.

MUZINICH & CO, the investment firm focused on public and private corporate credit, has appointed Peter Andersson as head of the Nordic region. Andersson is based in London and will focus on developing its presence in the Nordics in the

institutional and wholesale segments. Andersson has spent the past 10 years at Legg Mason, most recently as its head of Nordics and new markets in EMEA.

positive if they establish defensible niche positions”


People&Markets

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

MOODY’S INVESTORS SERVICE has appointed Wendy Cheong (left) as head of Asia-Pacific after her predecessor, Min Ye, was promoted to lead the rating agency’s international operations. Based in Hong Kong, Cheong reports to Ye in her new job. She joined

Moody’s in 2010 and was most recently chief of staff to Robert Fauber, president of Moody’s, and based in New York. Ye has been with Moody’s for 25 years, starting as an analyst in the structured finance team and later China country head and APAC head.

Florent Cassabois has joined RBC CAPITAL MARKETS from HSBC as head of leveraged finance in France, tasked with building its French business. Cassabois will be based in Paris in the newly created role, and report to Ed Dickinson, European head of leveraged

finance, and Eric Meyer, head of France. Cassabois spent 13 years at HSBC, most recently as co-head of leveraged and acquisition finance for France. RBC has also hired David Brand from Morgan Stanley in its central funding group in London.

Arnie hits UK banks with late £5bn PPI hitBritain’s major banks have been rocked by a last-minute surge in claims for payment protection insurance compensation, just as they were lifting dividends and starting to

LLOYDS BANKING GROUP, BARCLAYS, ROYAL BANK

OF SCOTLAND, NATIONWIDE BUILDING SOCIETY and CLYDESDALE BANK have said they may have to

sharper sting in the tail than had been

more than £50bn in the costliest mis-selling

HSBC, SANTANDER

Lloyds, Britain’s biggest retail bank, said last

Hours later, Barclays said it will set aside

Banks have been paying out massive amounts in compensation for the past eight

alongside a personal loan or mortgage to cover repayments if borrowers fell ill or lost

unsuitable policies, and the scale of complaints has made it Britain’s biggest

But there has also been criticism that

the problem and were pushing through too many fanciful claims, and two years ago the

Banks had to pay for a widespread advertising campaign fronted by the

animatronic head of Arnold Schwarzenegger as The Terminator, encouraging people to make a claim before

It worked, and there was an avalanche of

800,000 A WEEKIn July Lloyds was receiving about 190,000 requests for information a week, but that spiked to 600,000 to 800,000 per week in

Lloyds has been building capital in recent years, but the latest hefty provision will stall its capital build this year and depress its return on tangible equity below its previous

Part-nationalised RBS said this month it

And Clydesdale, which also owns Yorkshire Bank and Virgin Money brands,

£450m, which sent its shares crashing

Steve Slater

INVESTMENT INFLOWSSeveral foreign banks are also applying to acquire majority shareholdings in their

UBS so far is the only bank to have increased

Beijing is looking for foreign investment

fallen to its lowest level against the US dollar

economic growth, which has also reached a

Anthony Wong, portfolio manager at Allianz Global Investors, said the impact on

because of the preference among investors

He said the coming inclusion of Chinese stocks and bonds in a number of major global

Thomas Blott

Argenti has been Amazon Web Services’ vice president of technology since 2013 - overseeing cloud services, including mobile,

Argenti previously held senior roles at

He is also the lead guitarist in the Seattle-based alternative rock band Element47, performing shows to raise awareness and funds towards cancer research, the memo

Lahtiranta joined from Verizon Media Group, where he has been chief technology

Yahoo! and before that founded e-commerce

Steve Slater

Banks had to pay for a widespread advertising campaign fronted by the animatronic head of Arnold Schwarzenegger as The Terminator

Bellwether: n. From the practice of placing a bell around the neck of a castrated ram so that it might lead its flock

Bellwether


Who’s moving where… UK-based

asset manager

INTERMEDIATE CAPITAL GROUP

has hired Martin Preuss from KKR

for its European

subordinated debt

and equity team.

Preuss will be based

in Frankfurt.

Lucrezia Compagnucci has

joined UBS from

the Credit Suisse

DCM team. She

will be working on

the syndicate desk,

covering emerging

markets, SSA and

some financials.

Compagnucci replaces

Florian Hessel.

CITIZENS FINANCIAL GROUP

has hired Rich Sullivan from Mizuho

Securities as a

managing director

in its high-yield

sales and trading

business in its

Citizens Commercial

Banking group. At

Mizuho, Sullivan was

most recently head

of corporate fixed-

income strategy.

He has 35 years of

financial services

experience, including

nearly two decades as

a securities trader at

JP Morgan. Citizens

also hired investment-

grade bond trader

Josh Leary from US

Bank.

UNICREDIT has

appointed Monika Rast as head of

multinational

corporates for

Germany as one of

several changes at

its corporate and

investment bank in

Germany. Rast takes

over from Achim von

der Lahr in the role.

Rast was previously

head of the CIB-

UBK joint venture in

Germany between

its corporate and

investment bank.

Gerhard Biasi, head

of corporate treasury

sales for Germany, will

take over from Rast

as head of the CIB-

UBK Germany JV. The

changes take effect on

October 1.

WITH SIBOS, THE securities industry’s annual conference and beano, kicking off in London later this month,

Sibos “meet and greet” with, err, “Liverpool legend” Terry

Young readers will know StanChart is Liverpool’s shirt sponsor, while older ones will vaguely remember that McDermott and his hair were big in the 1980s – an era in which you were more likely to get your shirt ripped than

of the club might wonder why it couldn’t use its clout to entice one of the current crop of players who won

precisely, how many phone calls the bank had to make

(in no particular order) Kenny Dalglish, Steven Gerrard, Kevin Keegan, John Barnes, Graeme Souness, Ian Rush, John Aldridge and Jamie Carragher (Bellwether could go

Or maybe it’s got something to do with the fact that the bank’s head of branding is Tracey McDermott, also the bank’s group head of corporate affairs and former acting

Bellwether can’t establish whether Tracey and Terry are related, or whether the surname just immediately sprang

Minister Theresa May caused a stir

name on there is Olly Robbins, her erstwhile chief

Then again, surely you’d only sign up for that job if you

of course, where he’ll work as a managing director in its

Presumably, they’ve hired him for his political contacts and can-do attitude, rather than his deal negotiating

Another familiar name on the list is William Vereker,

who quit the Swiss bank to become May’s business envoy and persuade businesses about the virtues of

more than he ever got from his former boss Andrea

TWITTER-HAPPY DONALD

to his skill set after taking to social media to offer his analysis of the move by activist fund manager Elliott Advisors to agitate for change at US phone behemoth

Trump welcomed news that Elliott had built a stake

subsidiary CNN for producing fake news, before pitching

Maybe he secretly wants to work for CNN as a stock-


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

People&Markets

Deutsche departures continue, CS takes advantageCREDIT SUISSE has hired Kinner Lakhani, previously head of European research and advisory at DEUTSCHE BANK, to head strategy

Credit Suisse said Lakhani will be based in

from Deutsche, where Lakhani headed European research and was also head of

the top rated analysts covering wealth and asset management, investment banking and

Lakhani joined Deutsche from Citigroup in 2015, where he spent 10 years, including as co-head of its European banks research

Lakhani has also served on the European Central Bank’s macro-prudential policies

group that discusses issues related to euro

There continues to be a steady stream of departures from Deutsche in all regions as it shrinks its investment bank - including an

Credit Suisse has hired Jeremy Fox, who was Deutsche’s head of US equity capital

career at Deutsche in ECM and equity sales as a specialist focused on the real estate,

At Credit Suisse he will be co-head of US real estate, alongside Michael Kamras, to lead the bank’s coverage of real estate

And in Australia, Jefferies has hired Deutsche’s former Australia head of ECM Peter Molesworth to lead its ECM business in

team with , Deutsche’s former Australia head of sales trading who

And in London, emerging markets trader Gary Sloan has also left Deutsche and is heading to Jefferies to join its EM trading

Steve Slater, Philip Scipio, Thomas Blott

Benjamin Son

has joined BANK OF AMERICA MERRILL LYNCH as a vice-president in the Asia-Pacific syndicated and leveraged finance team. He is based in Hong Kong and reports to Adnan Meraj, co-head of APAC syndicated and

leveraged finance. Son worked in the leveraged finance and special situations group at UBS for four years until March 2018.

CLSA’s former Australia country head Andrew Norman

has started as head of equities Down Under at JEFFERIES. Norman is one of dozens of former CLSA staff to jump ship to Jefferies. He had been with CLSA for around five years and was

Australia CEO since April. Norman previously worked at Nomura, where he was Australia head of equities, and also Credit Suisse.

Prasad Gollakota

has joined FINANCE UNLOCKED as chief content officer of the on-demand video learning platform for finance professionals. Gollakota is a stalwart of the financial institutions DCM market. His last bank role was head of capital solutions for Australia at BAML.

Kng Hwee Tin

has quit her role as CEO of Singapore’s Oversea-Chinese Banking Corporation’s China subsidiary to join CAPITALAND. Kng is due to join the Singaporean property developer on October 1 as chief executive for finance and corporate services in China.

ING rejigs markets, corporate finance chiefsING’s global markets head Percy Rueber is moving to another role at the Dutch bank to lead a new platform for trading vanilla

ING also last week promoted Rob van Veldhuizen to global head of corporate

merger and acquisitions advisory and capital market transactions for big

A spokesman said Rueber, who has spent most of his 17 years at ING in senior markets roles, will continue to run markets until a replacement is named and will then move to

Rueber joined ING in 2002 as head of

operation, and later headed that business

ALL CHANGEING said van Veldhuizen would start as head

Amin Mansour, global head of strategic products, had been running corporate

ING has also been without a head of capital markets since September 2018 when

is still working on a permanent

Van Veldhuizen, 46, has been at ING for 11 years, including the past two years as

director providing M&A advice for energy

2008, van Veldhuizen spent 10 years in

ING said van Veldhuizen will manage the

departments operating from various capital

said it aims to strengthen its network in Asia

Veldhuizen will also continue to be in

Steve Slater, Alex Chambers

Rueber will continue to run markets until a replacement is named and will then move to run the new FX trading project called “Trade-in-a-Box”


JP MORGAN BOSS JAMIE DIMON ISN’T GETTING EXCITED ABOUT A TRADING RISE, P15

“It was not a particularly good year last year, so we’re not jumping for joy on that one”

Capital markets week ahead: Budweiser, EQT, Wintershall DEAANOTHER ROUND? Anheuser-Busch InBev will

business, just weeks after it was forced to pull the deal after investors baulked at its high

chances this time, having reduced the size of

time round which included its now-sold

The Budweiser Brewing IPO is a central tenet of the company’s efforts to bring down its mammoth debt pile, which stands at more than US$100bn, making it one of the

from the IPO and proceeds from the sale of its Australian business to Asahi for US$11bn will help it towards its ambitious target of

MONEY MONEY MONEY Bookbuilding

deal appears strong: within hours of launching late last week, bankers said the deal was fully covered at the top of the

rest will go towards partners past and

NKOTB Wintershall DEA is set to make its

was formed just a few months ago when

LetterOne merged their German oil and gas

CAUCASIAN RACE Armenia is set to return to

as it takes advantage of ripe market

conditions that have driven yields on its

looking at a US dollar deal with a tenor between 10 and 15 years, in what will be its

UNINSTALL OPTIONS German software developer TeamViewer continues bookbuilding

an upsize option and greenshoe, which would elevate the size of the deal – and Permira’s

IN THE PIPELINE

of the US pipeline operator by Australian

May that it had agreed to acquire all the outstanding shares in an all-cash acquisition

SUPER MARIO BROTHERSout with dual-tranche subordinated transaction

issuance after the European Central Bank

has mandated banks for Restricted Tier 1 and

lining up a trade, with investor meetings set to

ROCKET FUELleveraged buyout of UK telecommunications and satellite operator Inmarsat by a

will amortise at just 1% a year, is set to push

Warburg Pincus and two Canadian pension funds are also part of the consortium doing

TOOTH FAIRY Envista hopes investors will

separates from conglomerate Danaher with

The maker of dental implants comes to the

will all go to Danaher, which is locked up for

HOT DOG New York-based cloud IT monitoring software company Datadog hopes to live up to its billing as one of September’s hottest IPOs when it prices its

Coming on the back of the strong debuts of a string of new software issues this year, and with an 82% top-line growth rate over the last year, the deal could prove hard for

BORDERLINE Struggling Irish lender Permanent TSB is out with the sale of €300m

recent sale of more than €500m of bad loans will help assuage any doubts about its

market: higher rated rival Bank of Ireland was forced to postpone a Tier 2 transaction earlier this month amid ongoing worries

SELF DEFENCE Shareholders in UK aerospace company Cobham are set to vote on whether to accept a £4bn leveraged buyout

deal, with nine banks set to underwrite the

Sanderson Asset Management has already

LAST WEEK IN NUMBERS€20bn – Monthly asset purchase under the ECB’s relaunch of its quantitative easing programme–0.5% – New ECB deposit rate, after a 10bp cut took it further into negative territoryUS$38bn –

year


People&Markets

IMF warns of Brexit hit to EU capital marketswarned European Union leaders they need to drive forward the bloc’s capital markets union initiative to integrate national capital markets as they are about to lose their “de

“European capital markets are split along

deputy chief of the European department, with economists Srobona Mitra and Anke

“In both banking and capital markets, the focus is domestic, an insularity that has increased in recent times with a strong

that EU capital markets could be transformed from a hub-and-spokes system with London as the hub to a multi-node

transition and in the future steady state,” they said in the paper presented at the

The authors said the UK’s departure could

“The large number and volume of

across a broad range of instruments, creates economies of scale and scope and deep market liquidity, supporting price discovery

trading and clearing across multiple

ACCESS VIA LONDONAnother major problem is that much of the EU’s access to US equity and debt markets

cited “a transatlantic dollar funding pipeline

of US securities” that “would take time to

As well as shrinking the overall size of the EU markets, disrupting some vital links and reducing liquidity, the large-scale migration from London to the EU27 “requires urgent

Another barrier was the lack of uniform rules regarding insolvency, which deterred

certain European jurisdictions that are seen

As part of the capital markets union, the EU has introduced minimum standards through the directive on restructuring and

“silent on several critical issues, including

The authors urged the EU to maintain close regulatory cooperation with non-EU

“This would in particular apply to a post-

“SIGNIFICANTLY SMALLER”A separate report from research group New

capital markets activity within the EU is likely to shrink to 14% of overall global

The UK is the largest market for 24 of 30

capital markets activities across the EU at

“The EU is losing its largest capital market, and as a result capital markets in

the remaining EU27 with a market share of

At present the UK makes up 31% of all

Report author Panagiotis Asimakopoulos said this would likely mean that a large part of EU capital markets activity will effectively

Another implication will be that the EU is more reliant on its banking sector for

smaller and less developed than they are today, and the EU economy will be even more reliant on a struggling banking sector

Capital Markets Union initiative, which wanted to develop a single capital market in various areas, including securitisation,

have called for the UK to be banned from

Christopher Spink

Citi readjusts in EMEACITIGROUP has adjusted its reporting structure in Europe, the Middle East and Africa in

European Union, putting all remaining EU

The changes will see James Bardrick, CEO of Citigroup Global Markets and chief

directly to David Livingstone, Citi’s CEO

UK as a standalone market and “the

opportunities that will be presented by the UK altering its trading and commercial arrangements with the EU”, Livingstone said last week in an email to staff, seen

Bardrick will also oversee Citi’s Israel

the UK and Israel on technology and digital

The memo said in addition to putting all its EU countries together in a single group, including its operations in Poland, it has

created a new EMEA emerging markets cluster, led by Atiq Rehman, current Middle

Grant Carson, EMEA head of the global subsidiaries group (GSG), has been appointed head of a sub-group covering

Serra Akcaoglu, head of operations in Turkey, has taken over as EMEA head of

Steve Slater


IMF’S ASHOK VIR BHATIA WARNS ON BREXIT IMPACT, P21

“In both banking and capital markets, the focus is domestic, an insularity that has increased in recent times”

Lazard reshuffle continues as UK chief Rucker steps downThe end of William Rucker’s 15-year reign as

LAZARD last week was the latest in a spate of recent changes of senior personnel at the

Amelie Negrier-Oyarzabal this month left

June Eric Lalo, the driving force of the sovereign

Rucker has been replaced by Cyrus Kapadia, his deputy, who leads the technology, media and

Rucker remains as chairman of UK investment

Norman, who is also chairman of retailer Marks and Spencer, remains a special

Rucker moving on from his pivotal role in

global head of banking and deputy chief

role as head of sovereign advisory but gave up

global head of industrials and vice-chairman

With Jacobs in place as chairman and CEO for nearly a decade, some of the latest jostling could be seen as some lieutenants

BOUTIQUES BUILDThe changes come as Lazard’s advisory

of this year, revenues fell 18% to US$659m

The total value of deals it has completed this year is down 45% year-on-year to

In contrast, Evercore has gone up eight

places to eighth and Guggenheim is 18 places

new boutiques, such as Moelis & Co, are challenging more established players, such as

Another big factor is the rise of shareholder activism, prompting companies to engage more advisers on defending

particular, has built up a strong practice, and

veteran restructuring adviser Chetan

banker Jean Greene, has left for BAML after 20 years, latterly working closely with

Lazard has made some hires this year, mainly in Latin America, where Antonio Pereira joined

investment banking business from Goldman

Christopher Spink

Four IBs ‘stuck in the middle’BARCLAYS and CREDIT SUISSE sit alongside DEUTSCHE BANK and NOMURA in a group of investment banks that are “stuck in the middle” and need to prove their strategies are sustainable, analysts at credit ratings

US rivals and their modest returns show their investment banks have not proven an ability

choice between maintaining full-service ambitions or offering more specialised services at a more sustainable scale,” Moody’s said in a report on global investment banks, saying some shifts in

actually be credit positive if they establish defensible niche positions and disengage from

Moody’s said the gap between investment banks has widened as industry revenues have been squeezed, growth prospects have diminished and regulations have stiffened,

others cutting back or abandoning their full-

“ADVERSE SELECTION”

US investment banks – JP Morgan, Citigroup, Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley – which have

Moody’s said there is also a tier of banks with a more targeted offering, which are well positioned to offer specialised services

group includes HSBC, BNP Paribas, Societe

They have had a disciplined approach to client and transaction selection, and some

capital markets franchises to areas like cash

lacking the market share or resources to

returns and are at great risk of being adversely selected by sophisticated, price-sensitive institutional customers, with only a limited chance of winning less commoditised

Deutsche Bank in July announced a major

April Nomura said it will shrink its wholesale

Deutsche Bank and Nomura “must solve the riddle of surrendering low-return market share while maintaining enough

Moody’s said Barclays aspires to keep a full-service platform but faces considerable investment costs to keep pace with the big

“Barclays must be careful to avoid adverse selection and will need to strengthen

differentiated capabilities and maintain scale

Credit Suisse has cut some operations, but still has “to demonstrate it can sustain

environment post its restructuring efforts,”

Steve Slater


People&Markets

IN BRIEF

CHINA BOUNDMITSUBISHI UFJ FINANCIAL GROUP has applied

for a licence to act as underwriter in China’s

vast interbank bond market, sources said. If its

application is accepted, MUFG would become the

seventh foreign bank to receive the green light

to act as a syndicate member on non-financial

corporate bond deals in China.

Citigroup and JP Morgan also hold licences

to act as junior syndicate members, while HSBC

and Standard Chartered are able to act as lead

underwriters on Panda bonds in addition to being

allowed to act as junior syndicate members. BNP

Paribas and Deutsche Bank this month became

the first foreign banks to win approval to act as

lead underwriters on all non-financial corporate

debt in the interbank bond market.

Under new rules banks must hold the more

junior underwriting licence for at least a year

before they can apply to act as lead underwriters.

DIGITAL RETHINKEurozone governments and central banks are

working on a long-term plan to launch a public

digital currency that they hope would make

redundant projects like Facebook’s Libra, which is

seen as a risk to financial stability, officials said.

The 19-country bloc is also united in pursuing

a tough regulatory approach should Libra seek

authorisations to operate in Europe. It is also

considering a common set of rules for virtual

currencies, which are currently largely unregulated.

Libra has been a “wake-up call”, ECB board

member Benoit Coeure said after a meeting of

Eurozone finance ministers. He said Libra had

revived efforts to widen the uptake of an ECB-

backed project for real-time payments in the

Eurozone, known as TIPS. The project, launched

last year, has been met with caution by banks.

SAYONARA TOKYOCOOPERATIEVE RABOBANK has closed its office in

Tokyo, a symbol of its diminishing presence in the

yen bond market. The Dutch bank closed its Tokyo

office at the end of July, a source told IFR.

Kazuhide Tanaka, Rabobank’s head of long-

term funding in Japan and a well-known figure in

the Japanese capital market, has left the bank.

Rabobank had been a frequent issuer in the

Samurai market for years with Japanese bankers

affectionately calling Tanaka “Kazu-san”, but its

presence has been declining as market conditions

became unfavourable for highly rated issuers.

Rabobank made a sensational debut in the

Samurai market in 2008 with a huge ¥160.3bn

(US$1.49bn) three-tranche deal and, in five years,

established a strong presence through repeated

benchmark-sized Samurai issues.

PG&E’s new plan seeks to silence bondholdersBankrupt California utility PG&E has offered up a restructuring plan that seeks to silence boisterous bondholders and cap its liabilities for

When the company sought bankruptcy

necessitated by liabilities stemming from

Under the plan unveiled last week victims’ claims would be capped at

Days after it released the plan, PG&E said it agreed to resolve most insurance claims

PG&E bondholders, who have been

right to propose a plan of reorganisation,

move to repay bondholders would

code, only stakeholders who are impaired

But under the proposed plan, bondholders would be paid at the federal judgment rate, set by a bankruptcy precedent, instead of

While bondholders will certainly argue that receiving anything less than the bargained for contract rate is an impairment, it could also be argued the

impairment comes from the bankruptcy

will pay bondholders at the contract rate if a

“We had thought that the company may seek to reinstate at least some of the utility’s

full,” CreditSights analyst Charlotta Chung

bankruptcy protection between US$33bn

JP Morgan, Bank of America Merrill Lynch,

While the terms of PG&E’s latest plan are unlikely to be approved as they are, they form an important baseline for future

Bondholders led by Elliott Management previously proposed a plan that would inject about US$31bn into PG&E, including

to be sweetening their plan, according to

The company is racing to conclude the bankruptcy by June 2020 to receive a portion

Philip Scipio

Indian bank reform urgedIndia should make ownership of state-owned banks more broad-based and rope in the private sector to manage them, Uday Kotak, managing director of KOTAK MAHINDRA

BANK

“The PSU ownership should be broader – genuine and widespread, not just with Life Insurance Corporation of India,” Kotak said at the HT Mint Asia Leadership Summit in

The Indian government has been trying to solve the issues of bad loans and poor capitalisation at state-owned banks by providing capital support and merging

policy is to reduce its ownership stake in

other investors is poor, state-owned LIC ends up buying shares in other state-owned

Kotak said the government should consider private-public partnership in the

management should be with the private sector and while the government should

He said a lot of public money had gone into state-owned banks without much

S Anuradha

For over 40 years, IFR has been clarifying the complex global capital markets by providing intelligence on current deals and new opportunities, along with reliable data and trusted opinions.

The IFR website at www.ifre.com has been redesigned. It now features improved search capabilities, expanded navigation, powerful personalization tools and a more intuitive layout. It combines IFR’s industry-leading content from across all the global capital markets asset classes onto a single, consolidated platform.

When you’re looking for clarity on the global capital markets, look to the new IFR.

Intelligence, enhanced.

ifre.com/new-ifr-website

FRONT STORY CORPORATES

US corporates sprint at historic pace Investment-grade market closing in on record supply

High-yield credits offer higher-yielding alternative

Investors are not fatigued by the historic pace of issuance in the US corporate bond market, with strong demand helping riskier

stormed the market earlier in the month.Since the start of September, investors

poured US$140bn into US corporate investment-grade and high-yield bonds, setting up this month to be one of the busiest on record.

With 11 more days of trading left in the month, investment-grade supply is just US$28.6bn from breaking the record for the busiest September since the mark was set in 2016, according to IFR data.

“People are looking at these rates and they can’t help themselves because it’s nearly free money,” said David Knutson, head of credit research at Schroders.

For the most part, borrowers across the corporate credit spectrum have been piling

rates.This has brought out an abundance of

long paper in the investment-grade market. More than 20% of new issuance in September was for maturities of 30 years or higher, according to IFR data.

High-quality borrowers with credit ratings of Single A and higher such as APPLE and DISNEY

the month when Treasury rates were at their lowest.

Following their lead, lower-rated KRAFT HEINZ

(Baa3/BBB–) and high-yield issuers carried the baton last week.

Indeed, the junk bond market was on track to see its busiest week of the year, with as much as US$15bn expected from 24 borrowers.

DEMAND FOR JUNK

Low-rated investment-grade bonds and strong high-yield credits have been a

income as investors look to bolster the yield in their portfolios in a low-rate environment but without too much risk.

That is helping borrowers achieve impressively tight pricing. Upsized deals

have become commonplace in the high-yield market and a number have even been able to achieve sub 4% pricing, which is unusual for the asset class.

“It has been a really good time to issue,” said Greg Zappin, a portfolio manager with Penn Mutual Asset Management. “The all-in yields have been ridiculously low.”

However, the 10-year and 30-year

1.79% and 2.22%, respectively, up from 1.47% and 1.95% at their lows on September 3 - causing some of the more aggressively priced bonds to soften in the secondary market.

Luxury homebuilder TOLL BROTHERS (Ba1/BB+/BBB–) priced a new 3.80% 2029 that was trading down at 98.563 on Thursday after pricing at par last week, for example.

“The Street has been pricing – particularly the higher-quality deals – right on the nubs,” said Andrew Feltus, co-director of high-yield at Amundi Pioneer. “There is no selling concession.”

But that has not been a deterrent to issuers given investors are eager to put their money to work on relatively high-yielding credit when non-US bonds are offering negative yields.

Now the market is seeing a riskier array of high-yield borrowers looking to raise cash.

This included UBER, which priced a US$1.2bn B3/CCC+ senior unsecured eight year non-call three note on Thursday, increasing the size of the deal from an initial US$750m.

And CORE & MAIN HOLDINGS, a distributor of water and sewer products, priced a rare

note, though push-back had leads adjusting the coupon higher to 8.625% from 8.375% on a reoffer price of 98.50, as well as downsizing the deal from US$400m.

SPREADS HOLDING FIRM

So far, the market has been able to mop up this jump in supply without weighing on secondary market spreads despite market intuition suggesting they would widen.

JP Morgan analysts pointed out, however, there is zero correlation between supply and spread performance over the past 10 years.

Sure enough, average high-grade secondary spreads actually tightened 2bp to Treasuries plus 124bp, while average high-yield spreads were 16bp tighter over the 10-day period ending September 11, according to ICE BAML data.

The JP Morgan paper highlights two main reasons. One, the high-grade bond market is US$7trn in size and even a US$100bn month only adds 1.5% to the bucket. Two, syndicate desks guide companies to issue more when investor demand is strong, and vice versa.

“This does not mean that within sectors new issues do not impact spreads on existing bonds at certain times – they do occasionally,” JP Morgan said in the note.

“But for the market overall, supply trends have not historically been a factor driving monthly spread performance.”

2019 was expected to be a down year for supply, with the pace of issuance lagging behind 2018 by as much as 12.8% in June. But the surge in issuance has helped close that gap to just under 4% in the intervening months.

“The market has been able to absorb it all with little to no indigestion, but how long can that be the case,” said Jason Shoup, head of credit strategy for Legal & General Investment Management America.

“We’re watching the supply wave right now to look for signs of slowing or if it continues to be very strong and that could be the thing that determines the direction of the market over the next three to four weeks.”William Hoffman, David Bell


BONDS SSAR 27 Corporates 31 FIG 36 Covered Bonds 41 High-Yield 42 Structured Finance 45

PICKING UP PACEUS IG VOLUMES BY MONTH (US$bn)

Month 2018 2019

January 129.71 109.988

February 94.015 101.48

March 119.497 116.275

April 118.658 91.65

May 117.345 104.35

June 111.192 78.025

July 63.133 97.319

August 86.515 74.797

September 76.825 106.521

Source: IFR


Altice dials up high-yield bond size Telecoms company pushes out maturities

ALTICE showed the strength of the high-yield bond market on Friday when it upsized its deal by just over €1bn, taking the overall size of its cost-cutting, maturity-pushing bond to €2.5bn-equivalent.

A more generous than expected ECB announcement on Thursday, and a risk-on approach from buysiders who are seeking to be more invested in TMT credits, all helped the French

with the deal.“It’s a well-known entity, issuing at the

secured end of the capital structure, and investors see it as a safe place to park cash,” the source said.

Similar to Salt’s success earlier in the week, demand for Altice’s bond was bolstered by expected repayments from Italian mobile operator Wind Tre, he said.

Altice landed a €1bn eight-year non-call three at 3.375% (price talk was 3.5% area) and a US$1.1bn eight-year non-call three at 5.5% (price talk was 5.625% area).

Demand was such that the company

note at 2.5% to the line-up.The company had initially approached

investors on Thursday with a €1.5bn-equivalent senior secured offering split between eight-year non-call three bonds in euros and US dollars, issued from the telecom company’s French unit.

Proceeds were to fund the redemption of all the residual Altice Luxembourg 2022s and the partial redemption of Altice France’s 2024 notes.

With the new upsized deal, Altice can take out the entirety of its 2022s and its 2024s, leads said.

Altice is targeting the US$636m 7.75% and €445m 7.25% 2022 notes from holdco Altice Luxembourg, as well as its US$815m 6.25% and €750m 5.625% 2024s.

“We believe it is the right time for Altice to go ahead with this transaction,” wrote Spread Research analysts. “The market is very supportive and the company posted strong H1 2019 results

while increasing guidance for FY 2019.”The bond is expected to be rated B2/B

(Moody’s/S&P).After a run of successful deals in high-

yield from well-known credits including Salt and Pinewood, bankers are now trying to get other, more “interesting” issuers to step up.

“We’ve had all of the plain vanilla deals,” the source said. “It’s time for the market to get some M&A.”

DEAL DETAILS

Goldman Sachs was left lead on the euro bond, while Citigroup will act in a similar capacity on the US dollar trade.

This is the second time Altice will tap the high-yield market this year, according to IFR data.

Altice priced a €2.8bn-equivalent eight-year non-call three euro and US dollar trade through its Luxembourg entity in May. It is trying to push out its maturities and cut the cost of its debt.

The company has been seeking to simplify its debt structure into two units: Altice France and Altice International, which controls assets in countries including Israel, the Dominican Republic and Portugal.

Altice reported strong second-quarter results in France, with Ebitda up 10% year-on-year.

“This transaction is not a surprise as management made it clear in the previous investor calls that it aims to gradually eliminate debt at Altice Luxembourg and eventually only keep two debt silos (Altice France and Altice International),” Spread Research analysts wrote.

In an earnings call on July 31, founder and controlling shareholder Patrick Drahi told analysts that Altice had reduced net

€1.3bn - 4% of its total debt.“We hope this helps us get cheaper

reduce interest expense in the next two years as we are deleveraging rapidly.”Eleanor Duncan

WEEK IN NUMBERS

30bp THE SELL-OFF IN 10-YEAR TREASURIES

AHEAD OF THE ECB’S POLICY MEETING ON

THURSDAY SINCE THEY HIT AN INTRA-DAY

LOW OF 1.42% ON SEPTEMBER 3

US$2bn THE SIZE OF A 10-YEAR GREEN BOND

FROM KFW ON TUESDAY, THE LARGEST

GREEN BOND EVER ISSUED BY AN SSA IN

DOLLARS

97.75 THE PRICE THAT WEWORK’S 7.875%

2025s FELL TO ON WEDNESDAY, A DROP

FROM A RECENT HIGH OF 105.375 ON

AUGUST 15, AFTER THE OFFICE SPACE

PROVIDER WAS CONSIDERING A RADICAL

REDUCTION OF AN INITIAL US$47bn

VALUATION ON ITS IPO. THEY LATER

BOUNCED TO CLOSE TO PAR

£550m THE SIZE OF A SIX-YEAR NON-CALL TWO

BOND FROM PINEWOOD STUDIOS, WHERE

23 OUT OF THE 25 JAMES BOND FILMS

HAVE BEEN MADE

US$16.2bn THE ORDER BOOK FOR KRAFT HEINZ’S

US$3bn THREE-PART OFFERING DESPITE

THE PACKAGED FOODS COMPANY

STRUGGLING TO REDUCE ITS US$31.1bn

DEBT LOAD

1/8/

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8/19

5/8/

197/

8/19

9/8/

1911

/8/1

913

/8/1

915

/8/1

917

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101

103

105

107

“It’s a well-known entity, issuing at the secured end of the capital structure, and investors see it as a safe place to park cash”

“We expect to significantly reduce interest expense in the next two years as we are deleveraging rapidly”

SSAR

US DOLLARS

KFW DAZZLES WITH ‘INCREDIBLE’ 10-YEAR

KFW smashed open the 10-year part of the US dollar market on Tuesday, gathering books over US$4.8bn for a US$2bn green bond - the largest green bond ever issued by an SSA issuer in the currency - in an outcome that stunned the market.

Treasury yields’ downward path for most of 2019 meant that there has been much questioning as to how deep demand would be in that part of the curve.

But the path became easier following a sell-off in rates that saw the yield on the 10-year benchmark climb by more than 25bp in a week.

Investors gave a resounding “yes” to KfW’s trade, which the ASIAN DEVELOPMENT

BANK was quick to follow with a US$2bn in the same tenor via Deutsche Bank, Morgan Stanley, Nomura and TD Securities.

“Wow, that was an incredible trade, they really played a blinder,” a banker away said of KfW.

“Ten-year was untested water. It was a really nice time to do the trade given the pop in yields, but to get that kind of demand in this maturity is great in anyone’s book.”

Leads BNP Paribas, Citigroup and TD started marketing the bonds at 23bp area IPTs but demand meant that this was swiftly revised for pricing at 21bp, which offered no concession.

“KfW are exceptional at timing their 10-year,” a lead said.

The German agency’s last 10-year, a US$3bn priced in January 2018, saw demand pass US$6.2bn and held the previous record for the largest book in that maturity.

At over US$4.8bn for Tuesday’s trade, demand easily eclipsed the US$2.7bn-plus gathered by the Inter-American Development Bank in June for a US$2.1bn issue in the tenor.

“Yes, we are in a low-yield environment but the back-up in yields since the start of September meant that 10-year was on the table,” the lead said.

“There’s also been a lack of supply of dollar

format under their updated framework.”Ten-year Treasuries had moved to 1.69%

when the deal came to market from 1.43% on September 3.

“Swap spreads widening probably helped a bit as well, to be fair, and for central banks

this would have looked attractive,” another banker away said.

Ten-year swap spreads had moved from less 12bp at the start of the month to less 10.8bp, according to Tradeweb.

DIFFERENTIATING FACTORStill, the deal priced at the tightest spread to Treasuries ever seen for an SSA issuer for a 10-year dollar in all green and all benchmark markets.

Some bankers, though not all, attributed the scale of the demand to the deal’s green nature.

“One of the things we’ve seen on our recent deals is bank treasuries actively looking to buy ESG to the extent that they’re not price insensitive but they have to buy ESG, so I think there’ll be a bit of it that’s

The lead banker said that while there were different shades of green when it came to investors, the format still made a difference.

“You get unique investors who are only looking for green paper,” the lead said.

ROOM FOR TWOWith the dust barely settled on KfW’s transaction, ADB was quick to follow, securing the second successful trade in the tenor in as many days.


BONDS SSAR

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING SEPTEMBER 12 2019

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover

Sep 10 2019 Netherlands €1.54bn 0.25 Jul 15 2029 -0.427 –

Sep 10 2019 Germany (i) €207m 0.10 Apr 15 2046 -1.270 1.29

Sep 11 2019 Portugal €600m 1.95 Jun 15 2029 0.264 2.11

Sep 11 2019 Portugal €400m 2.25 Apr 18 2034 0.676 2.30

Sep 11 2019 Switzerland SFr93.69m 3.25 Jun 27 2027 -0.822 1.65

Sep 11 2019 Switzerland SFr111.175m 0.00 Jun 26 2034 -0.473 1.54

Sep 12 2019 Ireland €1bn 1.10 May 15 2029 -0.051 1.96

Sep 12 2019 Italy €4bn 0.05 Jan 15 2030 -0.010 1.50

Sep 12 2019 Italy €2.25bn 2.10 Jul 15 2026 0.450 1.47

Sep 12 2019 Italy €1.5bn 3.85 Sep 1 2049 2.060 1.24

Source: IFR

ALL INTERNATIONAL BONDS (ALL CURRENCIES)BOOKRUNNERS: 1/1/2019 TO DATE

Managing No of Total Share

bank or group issues US$(m) (%)

1 JP Morgan 926 225,356.06 7.8

2 Citigroup 838 200,194.10 6.9

3 Barclays 679 180,111.15 6.2

4 BAML 694 168,146.03 5.8

5 HSBC 776 154,891.13 5.3

6 Goldman Sachs 559 142,687.51 4.9

7 Deutsche Bank 608 129,548.92 4.5

8 BNP Paribas 536 124,463.93 4.3

9 Morgan Stanley 486 113,967.17 3.9

10 Credit Suisse 459 90,724.46 3.1

Total 4,163 2,907,286.91

Including Euro, foreign, global issues. Excluding equity-related debt,

US Global ABS/MBS.

Source: Refinitiv SDC code: J1

ALL BONDS IN EUROS BOOKRUNNERS: 1/1/2019 TO DATE


bank or group issues €(m) (%)

1 BNP Paribas 296 68,422.73 7.3

2 JP Morgan 214 56,571.72 6.1

3 SG 206 55,050.16 5.9

4 Deutsche Bank 244 53,794.99 5.8

5 Barclays 192 53,143.98 5.7

6 HSBC 262 52,891.44 5.7

7 Credit Agricole 231 51,977.17 5.6

8 UniCredit 235 46,240.27 5.0

9 Citigroup 178 41,172.96 4.4

10 Goldman Sachs 152 39,822.69 4.3

Total 1,224 933,299.98

Including Euro-preferreds. Excluding equity-related debt,

US Global ABS/MBS.

Source: Refinitiv SDC code: N1

ALL INTERNATIONAL GREEN BONDSBOOKRUNNERS: 1/1/2019 TO DATE



1 HSBC 52 7,017.23 7.4


3 BNP Paribas 36 6,298.42 6.7

4 BAML 30 5,450.01 5.8

5 Citigroup 36 4,943.43 5.2

6 JP Morgan 32 4,580.84 4.9

7 SG 16 3,293.56 3.5

8 ING 20 3,121.35 3.3

9 Barclays 21 2,998.86 3.2

10 UniCredit 14 2,865.33 3.0

Total 193 94,229.27

Excludes social bonds and mixed use of proceeds.

Source: Refinitiv SDC code: JG1

year has taken all of the demand out and nobody wants to be a sloppy second but that clearly wasn’t the case there,” a third syndicate banker said.

Like KfW, ADB secured ample demand for the Global, with books closing at over US$3.65bn.

“The yield curves have steepened compared to the inversion that we had for most of August,” a lead on ADB said.

“The 10-year tenor has generally been undersupplied. Not just this year, but over the last couple of years. All the stars were aligned.”

Leads started marketing the transaction at 23bp area over mid-swaps, the same level as the KfW IPTs.

In the end, it landed slightly wider than KfW’s, pricing at 22bp over mid-swaps and just a whisker away from KfW’s 9.65bp over Treasuries spread, at 9.9bp.

“You always have to weigh up size versus price on those trades,” the third banker said. “KfW had capped their deal from the start; ADB started at the right level and the choice was made to take a big chunk out of the market.”

DOLLARS WIN THE DAY, AGAIN

The rapid tempo for US dollar issuance showed little sign of slowing down last week, with public sector issuance passing the US$8bn mark, once again eclipsing euro volumes.

OESTERREICHISCHE KONTROLLBANK, the AFRICAN

DEVELOPMENT BANK and the INTER-AMERICAN

DEVELOPMENT BANK found plenty of takers as they plumped for the short part of the curve, though the little visited 10-year made a strong comeback as KfW and the Asian Development Bank raised benchmarks (see separate story).

“Generally, the dollar market has been in pretty good shape, I know there were a couple of

strong as some of the three-years, but everything

“Let’s not forget, with these swap spreads that are at eye-watering spreads versus US Treasuries, we can’t expect it to be completely plain sailing.”

Since issuance restarted in earnest at the end of August, SSA borrowers have raised almost US$34bn, compared with €6bn in the single currency.

And despite the sustained pace of supply, demand has remained strong. OeKB’s US$1.5bn three-year via Bank of America Merrill Lynch, Citigroup, Goldman Sachs and HSBC saw books over US$3.2bn.

This allowed for a 2bp tightening from the 16bp area IPTs that erased the concession on offer at the start.

“Issuers are being very disciplined and paying 2bp-3bp at the starting point, which is really helping the deals,” another syndicate banker said.

“What’s great is that we’re starting to see a bit more tightening on trades, which we weren’t really seeing before.”

For the AFRICAN DEVELOPMENT BANK, which started marketing its three-year at 13bp area mid-swaps, there was less room for manoeuvre, however, as that level did not offer a concession.

That meant leads Citigroup, Daiwa, HSBC, JP Morgan and Societe Generale left the spread unchanged for a US$2bn deal that priced in line with IPTs.

“Tightening was an option, but there were a few limits in the book and 13bp kept

“We discussed moving tighter but there was a risk that we wouldn’t have had such a tight allocation and that you’d snatch defeat from the jaws of victory.”

SOFR ARBITRAGEFor IDB, which was bringing a debut SOFR-linked trade via Citigroup, Deutsche Bank, TD

and WFS, demand was slower to come together, with books last reported over US$575m for the US$600m deal. It priced in line with the plus 26bp area IPTs.

“There’s only a limited investor base for these deals,” one lead said. “The market continues to evolve but, right now, you only have just over a dozen accounts who buy this.”

Still, for IDB, the transaction was not only a way of establishing its name in the new benchmark market, it was also an opportunity to lock in attractive funding levels.

said.At 26bp over SOFR, the spread was

equivalent to around 5bp-6bp over Libor, much cheaper than the 13bp over at which IDB would do a three-year.

“From an issuer perspective, it’s great as they can tick two boxes,” the second lead said. “They can say they’ve done an inaugural SOFR but also report it as arbitrage.”

EUROS

SOUTHERN EUROPE JOINS NEGATIVE-YIELD CLUB

FADE was greeted with rapturous demand

a Southern European issuer.The deal, which emerged one day ahead

of a key European Central Bank meeting, attracted over €3.1bn of orders, allowing lead managers BBVA, Credit Agricole, HSBC and Societe Generale to tighten the spread 2bp from IPTs and price the deal at 15bp over Spanish government bonds.

Public sector issuers have favoured the US dollar market over euros in recent weeks,


ALL US DOLLAR FIXED-RATE GLOBALS BOOKRUNNERS: 1/1/2019 TO DATE

Managing No of Total Share bank or group issues US$(m) (%)

1 JP Morgan 209 57,585.81 10.1

2 Citigroup 182 55,564.33 9.8

3 Barclays 140 46,398.47 8.2

4 BAML 175 45,402.84 8.0

5 Goldman Sachs 126 38,545.54 6.8

6 Morgan Stanley 105 33,166.11 5.8

7 Wells Fargo 144 28,819.27 5.1

8 RBC 94 24,565.94 4.3

9 HSBC 64 22,117.75 3.9

10 Deutsche Bank 65 20,216.19 3.6

Total 390 568,059.64

Excluding equity-related debt, ABS/MBS.

Source: Refinitiv SDC code: O5

ALL SOVEREIGN BONDS IN EUROSBOOKRUNNERS: 1/1/2019 TO DATE

Managing No of Total Share bank or group issues €(m) (%)

1 JP Morgan 21 14,977.16 11.0

2 BNP Paribas 18 12,104.66 8.9

3 SG 16 11,029.51 8.1

4 HSBC 13 10,217.96 7.5

5 Goldman Sachs 17 10,123.79 7.5

6 Citigroup 17 9,785.90 7.2


8 Barclays 12 8,009.27 5.9

9 Deutsche Bank 11 5,370.92 4.0

10 UniCredit 5 5,025.59 3.7

Total 47 135,605.50

Excluding ABS/MBS.


ALL INTERNATIONAL US$ BONDSBOOKRUNNERS: 1/1/2019 TO DATE


1 JP Morgan 637 150,870.95 9.6

2 Citigroup 610 141,612.83 9.0

3 BAML 507 111,999.73 7.1

4 Barclays 417 102,556.24 6.5

5 Goldman Sachs 397 92,469.92 5.9

6 Morgan Stanley 361 83,862.82 5.3

7 HSBC 362 70,986.24 4.5

8 Wells Fargo 310 65,534.54 4.1

9 Credit Suisse 327 64,621.51 4.1

10 Deutsche Bank 312 60,264.10 3.8

Total 1,912 1,579,543.82

Including Euro, foreign and global issues. Excluding equity-related debt,

US Global ABS/MBS.

Source: Refinitiv SDC code: O1

lured by certainty of execution and attractive pricing levels. However, the outcome of FADE’s deal provided much needed balm to what had been a shaky market.

be keen to participate despite the negative yields,” said Pablo de Ramon-Laca, head of funding and debt management at the Spanish Treasury.

“The result could not have been

ever public benchmark bond syndicated at negative yield from a Southern European issuer.”

The bond priced with a -0.107% yield. The issuer’s secondary curve is negative up to 2023, according to Tradeweb.

“The market backdrop was supportive for the transaction -there had been little volatility in the previous days, and there was

involved in the transaction were optimistic, and we felt that this window was optimal,” de Ramon-Laca said.

The transaction’s success contrasted with that of KommuneKredit, which barely scraped over the line in August with a €500m 11-year.

“It’s not really a surprise to see the deal go very well given it started at 20bp-ish over Spain,” said a syndicate banker.

“It’s one of the few things that offers a little bit of yield, or thereabouts. Not deeply

market.”De Ramon-Laca said that while there

would have been solid demand in the long end given the rate environment, FADE’s

The deal was only one of two benchmarks to price in the single currency ahead of a key ECB meeting last Thursday. The FEDERAL

STATE OF HESSE was the only other public sector borrower to bring a euro benchmark last week.

It priced a €500m 10-year at 6bp through mid-swaps on books over €540m, in line with IPTs, via Barclays, Deutsche Bank, Helaba, HSBC and LBBW.

“I don’t think you can take away too much from these Laender trades apart from the fact that you can get deals done,” a second banker said.

“What it does tell us, though, is that if

money to work.”

IRELAND GRABS CENTURY RETURN

IRELAND made its return to the century bond market last week, locking in 100-year funding at 1.425%, taking advantage of investor demand for longer-dated issuance as yields continue to decline.

Deutsche Bank led the MTN, which raised €105m.

foray into 100-year debt. In 2016, Goldman Sachs and Nomura placed a €100m century bond at 2.35%.

With falling yields driving investors towards long-dated paper, century bonds appear to be catching on. Austria last month issued a €50m 100-year zero-coupon note via RBI.

“With rates where they are and the direction in which they’re going, products like this are starting to make more and more sense for both investors and issuers,” said a banker.

The insurance sector in Germany and Austria is seen as the typical buyers of these products.

Deutsche Bank also has form in placing long-dated debt for sovereigns. Earlier this year, the house closed a €500m 2% 50-year for Israel with Barclays.

The Ireland trade does, however, mark

MTN.

STERLING

UK DMO SAILS THROUGH POLITICAL MAELSTROM

Pandemonium in UK politics failed to derail the UK DMO’s latest syndication, a £4bn tap of its 1.625% October 2054 that sailed through the market in typical fashion.

the Brexit fracas, and last Tuesday’s deal was no different.

It was the DMO’s fourth syndication this calendar year, taking the nominal raised via the method to £13.75bn. The tap pushes the 2054s, originally priced in May 2019, up to £8.75bn.

The transaction came after a tumultuous few days in UK politics. Prime Minister Boris Johnson said he would not request an Article 50 extension last Tuesday despite a law coming into force requiring him to delay the UK’s departure from the EU unless parliament approves a withdrawal agreement or a no-deal exit.

“It’s a brilliant trade,” said a banker away from the deal. “It’s never in any doubt with the DMO, but it’s always the way with those guys. It’s amazing frankly.”

Books closed at £25.75bn, which included £4.825bn from joint lead managers Bank of America Merrill Lynch, Barclays (B&D), Lloyds and Morgan Stanley.

They began marketing at 0.5bp-0.75bp

at the tight end of that range. The book was dominated by UK investors, accounting for around 81%.

“There is enough domestic support driven by the regulatory capital requirements to keep the demand intact in the short to medium term,” said Artur Baluszynski, head of research at Henderson Rowe.

He said, however, there were risks to external investor appetite for sterling over the longer term.


BONDS SSAR

ALL SUPRANATIONAL BONDS IN EUROS BOOKRUNNERS: 1/1/2019 TO DATE


1 JP Morgan 15 4,862.48 11.0

2 HSBC 11 4,206.64 9.5

3 Barclays 7 3,988.11 9.0

4 Goldman Sachs 6 3,474.65 7.8

5 BAML 12 3,328.93 7.5


7 Deutsche Bank 4 2,402.93 5.4

8 UniCredit 3 2,378.53 5.4

9 BNP Paribas 5 2,302.80 5.2

10 Citigroup 5 2,137.58 4.8

Total 44 44,330.15

Excluding ABS/MBS.


ALL AGENCY BONDS IN EUROSBOOKRUNNERS: 1/1/2019 TO DATE


1 JP Morgan 22 8,335.23 9.8


3 BNP Paribas 26 6,635.43 7.8

4 Goldman Sachs 19 6,078.83 7.2

5 Deutsche Bank 21 5,565.61 6.6

6 NatWest Markets 9 4,932.72 5.8

7 SG 15 4,849.12 5.7

8 BAML 12 4,677.65 5.5

9 Commerzbank 13 4,587.30 5.4

10 Barclays 20 4,443.65 5.2

Total 118 84,915.96

Excluding equity-related debt. Including publicly owned institutions.


MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS BOOKRUNNERS: 1/1/2019 TO DATE


1 UniCredit 30 7,519.88 16.1

2 DGZ-DekaBank 30 4,451.52 9.5

3 HSBC 29 3,837.83 8.2

4 LBBW 24 3,734.26 8.0

5 Barclays 12 2,308.74 5.0

6 Nord/LB 16 2,080.99 4.5

7 DZ Bank 17 2,059.12 4.4

8 Deutsche Bank 18 2,026.84 4.3

9 BayernLB 17 1,994.01 4.3

10 TD Securities 11 1,525.35 3.3

Total 101 46,638.08

Excluding ABS/MBS.


“If you offer enough yield you will

stimulus programme, most of the

the same time. Investors will move their attention from yield to creditworthiness and liquidity.”

AllianzGI, said the deal’s aftermarket performance would be key to judging whether it was really a success or not, and that he had been quite bearish on UK government bonds in the last few weeks.

“People are very focused on the size of the book but really we need to see how it behaves in the aftermarket as a lot of the

he said, adding, though, that the deal did look attractive.

“You basically got 0.1% (in price terms) for free,” he said.

There were other supporting factors to the syndication, according to James Lynch,

Kames Capital.“It was underpinned by the fact that

the BoE buybacks have started,” he said. They will be buying back about £15bn over the next four weeks in Gilts and corporates, so that’s a technical support that will help the market deal with increase in supply.”

With the syndication now out of the way, Gilt investors will continue to watch political developments in the coming weeks closely and try to position the best they can depending on the possible scenarios, including a no-deal Brexit.

“An initial market reaction to a no-deal Brexit happening would be a Gilt positive

market expectation of BoE action in the

“But there would come a point where that would come into reverse. It’s not a foregone conclusion that you’d get BoE easing and it’s probable you’d get an election. You would then have to price in a potential change in government and potential higher spending.”

While the DMO trade was the highlight of the week, the deal did not deter other issuers from coming to market. EUROPEAN

INVESTMENT BANK priced a £500m tap of its June 2023 FRN at 27bp over Sonia, having marketed a minimum £250m at 28bp area via BAML, Deutsche Bank, Standard Chartered Bank and TD. Demand was over £585m at the last update.

The WORLD BANK conducted a swift £300m tap of a December 2024 issue via Bank America Merrill Lynch, HSBC and NatWest Markets. It priced at 36bp over Gilts, in line with IPTs, on books over £300m.

NON-CORE CURRENCIES

NZDMO READIES SOVEREIGN SALE

The NEW ZEALAND DEBT MANAGEMENT OFFICE (Aaa/AA/AA) has mandated BNZ, CBA, UBS and Westpacsyndicated nominal bond sale in 18 months, a NZ$1.0bn–$2.0bn (US$640m–$1.28bn) offering of new May 15 2031s.

Gross New Zealand government bond issuance in 2019-20 is projected to be NZ$10bn, most of which will be raised through weekly tenders.

With NZGB maturities and buybacks of NZ$6.6bn scheduled, net issuance is forecast to be NZ$3.4bn. This will increase NZGBs on issue to NZ$73.9bn from NZ$70.5bn, though as a percentage of GDP outstanding NZGBs will fall to 23.3% from 23.5% as the economy grows.

New Zealand attracted a record order book in excess of NZ$5bn for its previous syndicated sovereign nominal bond offering in March 2018, a NZ$2bn sale of 3.0% April 20 2029s.

Non-Australasian investors bought 58% of the bond, their second-highest allocation,

interest alongside the traditional strong Asian bid.

These rare government issues enjoy scarcity value. However, the county’s small government debt, which is expected to fall to 21.6% of GDP as of June 30 2023, raises liquidity concerns, especially as New Zealand does not qualify for Citigroup’s nominal World Government Bond Index, which many global portfolio managers like to track.

The WGBI, established in 1987, requires outstanding government bonds, with maturities of over one year, to be the equivalent of at least US$50bn, €40bn (US$44.2bn) or ¥5trn (US$46.2bn).

New Zealand had approximately NZ$54.9bn of nominal government bonds outstanding as of August 30, equivalent to about US$35.1bn, €31.8bn and ¥3.8trn at

about NZ$17.1bn of index-linked bonds, which do not qualify for the WGBI nominal index.

The NZDMO helped alleviate offshore investors’ liquidity worries when it committed to maintaining NZGBs on issue to be worth at least 20% of GDP over time.

HOUSING NZ TAPS FOR NZ$600m

HOUSING NEW ZEALAND, rated AA+ by S&P, completed its delayed return to the local market last Wednesday with a combined NZ$600m (US$387m) tap of its 3.36% June 12

2025 and 3.42% October 18 2028 wellbeing

programme.The reopenings had originally been

planned for July, but were postponed

the replacement of the housing minister.A NZ$425m addition to the shorter-dated

bonds, which took the issue size up to NZ$675m, was priced at 110.780108 for a yield of 1.398%, within initial 26bp–30bp guidance at mid-swaps plus 28bp, equivalent to 42.3bp over the April 2025 NZGB.

A NZ$175m increase to the 2028s, which took the outstanding amount to NZ$425m, was priced at 113.784236 to yield 1.771%, within initial 42bp–46bp guidance at mid-swaps plus 44bp, equivalent to 53.6bp over the April 2029 NZGB.

ANZ and Westpac are joint lead managers for the transaction.

HNZL is a crown agency that provides housing services for New Zealanders in need.

ADB EXTENDS GREEN CURVE

ASIAN DEVELOPMENT BANK (Aaa/AAA/AAA) issued its second green Kangaroo bond issue last Tuesday – a rare offering outside the asset

managers Deutsche Bank, Mizuho and RBC Capital Markets.

The A$150m (US$103m) of 1.6% 10.5-year (March 18 2030) bonds were priced at 99.568 for a yield of 1.645%, in line with guidance at asset swaps plus 43bp and 54.9bp wide of the May 2030 ACGB.

of climate-friendly projects under the ADB’s green bond framework.

ADB debuted in Australia’s green market

biggest green Kangaroo issue from a supranational or agency and the largest SSA Kangaroo print in any format since a A$1bn World Bank tap in June 2014.

ADB’s latest green Kangaroo takes year to-date Australian socially responsible issuance, including Aussie dollar and offshore deals, up to A$5.45bn-equivalent, well placed to surpass the annual record of A$8.4bn-equivalent in 2018.

The Australia bond market was a slow starter in the global SRI revolution, selling just A$1.0bn, A$1.4bn and A$1.1bn between 2014 and 2016, but it has subsequently made big strides, beginning with a jump to A$5.2bn-equivalent of issuance in 2017.

Australia is the third largest issuer of

the 10th largest in the world, on a cumulative basis, according to the Climate Bonds Initiative.


CORPORATES

US DOLLARS

HOSPITALITY PROPERTIES TRUST PAYS UP FOR NEW M&A BOND

Hotel real estate investment trust HOSPITALITY

PROPERTIES TRUST paid up to price a three-part US$1.7bn M&A bond on Tuesday, with the

downgrade concerns under scrutiny.The REIT, rated Baa3/BBB- with a negative

outlook from S&P, initially came out with a four-part deal, aimed at funding part of its US$2.4bn acquisition of travel centre assets from SPIRIT MTA, which specialises in retail buildings such as those for AMC and CarMax locations.

The acquisition prompted S&P to put the

with leverage expected to remain high at around mid-six times by the end of 2019, a move that has left investors wary of potential downgrades.

Recognising that, bookrunners started pricing on the new debt exceptionally high for a Triple B credit, with all four tranches being marketed with spreads of more than 300bp over Treasuries, one lead told IFR.

But even with wide starting levels, leads dropped a 12-year note while spreads for the other three tranches were unable to tighten from guidance.

Bookrunners BAML, Citigroup, Morgan Stanley, RBC, and Wells Fargo priced a

a US$450m seven year at 312bp over Treasuries and a US$425m 10 year at 337bp over Treasuries.

Those levels are more than 100bp wider than average Triple B spreads in ICE BAML indices, and even wide of average Double B

spreads of 225bp over Treasuries, according to the data provider.

Furthermore, Hospitality Properties was unable to secure cheaper funding at the 10-year part of the curve, pricing its new note with a 4.95% coupon at 337.5bp over Treasuries. This compared with its outstanding 4.375% 2030 note, which was trading at a G-spread of 273.7bp on Monday.

Despite Hospitality Properties’ lack of any gaming exposure, CreditSights said the best comparable is likely Gaming and Leisure Properties, rated Ba1/BBB-/BBB-.

Even there, the new 10-year priced 100bp wide of Gaming and Leisure Properties’ 4% 2030 notes, which were changing hands at a G-spread of 235bp last week.

But even at these highly elevated concessions, CreditSights said it might not be worth the risks.

“The 10-year pricing north of T+300bp would merit closer examination, but in our view, there are several near to medium-term risks that could easily erase new issue

next couple of quarters,” CreditSights noted in a report.

Moreover, S&P noted that Hospitality Properties faces execution risk following its acquisition of Spirit MTA with a planned US$800m asset sale before year end that would lower leverage to low six times.

“While the [acquisition] is modestly favourable from a business risk perspective, the company’s credit protection measures are likely to deteriorate as a result of the proposed acquisition,” wrote analysts at the ratings agency.

VODAFONE RETURNS TO US FOR CHEAP FUNDING

UK telecoms company VODAFONE took advantage of low rates and good market conditions on Tuesday to lock in cheaper

presses on with deleveraging plans following its acquisition of LIBERTY GLOBAL’s European assets in July.

The company, rated Baa2/BBB/BBB, raised US$1.5bn through a 31-year bond that tightened 20bp from initial price thoughts to price at 210bp over Treasuries, with a 4.25% coupon.

At that level, the bond was offering some 15bp over where Vodafone’s outstanding 4.875% 2049 was trading last Monday, according to MarketAxess data.

For a strong Triple B name with a compelling deleveraging story, Vodafone offered investors an attractive spread that pushed order books to US$4.5bn.

“Even with that concession, they are going to print this 30-year with a 4.25% coupon, and if you think about 30-year debt for Triple Bs that’s a fantastic rate,” said Kurt Halvorson, portfolio manager at Western Asset Management.

“They will bring down their overall cost of debt while extending maturities, so it’s absolutely a win for them.”

Vodafone has been active in the US market this year, issuing a dual-tranche US$1.75bn 30-year and US$500m 40-year note in June, as well as a US$2bn hybrid back in March.

The increase in new debt from Vodafone follows on from its US$21.8bn acquisition of Liberty Global’s European assets in July, a move that prompted S&P and Fitch to downgrade the company one notch to BBB because of the increase in leverage.

Since then, Vodafone has cut its dividend and announced monetisation of its tower assets, according to CreditSights.

“We like the management team and think they will execute on their deleveraging plan,” Halvorson said.

“I can’t tell you the difference it makes to have a management team for a company like this that is going to deliver on what they say versus one that doesn’t have a track record.”


BONDS CORPORATES

ALL INV-GRADE US CORPORATE BONDSBOOKRUNNERS: 1/1/2019 TO DATE


1 JP Morgan 58 11,728.08 11.8

2 Citigroup 46 10,432.52 10.5

3 BAML 62 9,814.85 9.9

4 Wells Fargo 56 7,581.15 7.7

5 Morgan Stanley 45 6,674.97 6.7

6 Barclays 25 5,322.92 5.4

7 Goldman Sachs 31 4,743.82 4.8

8 MUFG 30 4,430.81 4.5

9 RBC 31 4,012.89 4.1

10 Credit Suisse 19 3,946.97 4.0

Total 141 99,002.05

Excluding equity-related debt, ABS/MBS, all foreign issues, global issues

and non corporates.

Source: Refinitiv SDC code: F6a

ALL US INVESTMENT GRADE CORPORATE DEBT

(EXCLUDING SOLE SELF FUNDED DEALS)BOOKRUNNERS: 1/1/2019 TO DATE


1 JP Morgan 373 87,987.96 10.7

2 Citigroup 297 75,958.35 9.2

3 BAML 329 73,820.10 9.0

4 Morgan Stanley 234 59,811.28 7.3

5 Goldman Sachs 224 58,690.04 7.1

6 Barclays 186 51,909.61 6.3

7 Wells Fargo 237 46,371.82 5.6

8 MUFG 142 34,438.50 4.2

9 Mizuho 137 30,409.76 3.7

10 Deutsche Bank 99 28,246.08 3.4

Total 734 823,304.87

Source: Refinitiv SDC code: F09a

ALL CORPORATE BONDS IN EUROSBOOKRUNNERS: 1/1/2019 TO DATE


1 Barclays 74 23,496.55 7.9

2 BNP Paribas 139 23,272.17 7.8

3 Deutsche Bank 98 19,358.47 6.5

4 BAML 67 17,072.10 5.7

5 Citigroup 90 16,954.45 5.7

6 SG 88 15,740.59 5.3

7 JP Morgan 86 15,727.11 5.3


9 HSBC 86 13,272.72 4.5

10 Santander 58 11,670.88 3.9

Total 370 297,361.95

Excluding equity-related debt. FIGs, ABS/MBS.


And with a rally in rates as well as in the

an opportunity to lock in more funding at cheaper levels.

Since that June issuance, the 30-year US Treasury rate had fallen to 2.153% on Tuesday from 2.624%.

“Today’s new issuance is just over three months later but

coming with a materially better price for the operator,” CreditSights noted in a report.

“Since the June issuance, Vodafone has performed well against the US technology, media and telecom comp group, with spreads compressing materially relative to both AT&T and Verizon.”

Even so, Vodafone’s new notes offer a decent spread over Verizon’s 5.012% 2049, which was trading at 147bp over Treasuries on Tuesday, while AT&T’s 4.5% 2048 was at plus 190bp, according to MarketAxess data.

FORD BONDS SEE VOLATILE WEEK AFTER MOODY’S DOWNGRADE TO JUNK

FORD MOTOR bonds suffered a volatile session last week after Moody’s downgraded the storied automaker to Ba1 from Baa3, consigning it into junk territory and raises concerns about its investment-grade status.

The company’s bond spreads widened on the news, as secondary prices fell a good two points, only to tighten by the week’s end as Treasury yields jumped.

Ford’s US$1.25bn 5.113% 10-year traded as high as Treasuries plus 348bp last week, about 88bp wide to where the bonds priced in May and about 124bp over average Double B spreads as calculated by ICE BAML.

S&P and Fitch are maintaining their BBB/BBB ratings for now, but it is widely expected that one or both will cut the company one notch to the lowest rung of investment-grade by year-end.

While that would keep Ford in investment-grade territory, there is still the question of whether S&P or Fitch would place the company on negative outlook.

“It is our read that S&P is giving Ford some room to execute on its turnaround plan and has signalled that its full downgrade to high-yield would need to be partly driven by a broader global recessionary backdrop,” CreditSights noted in a report.

“As such, we see Ford as being part of the IG index for the next six months.”

Against that backdrop, investors remain in two minds about increasing exposure to the credit after some cheapening last week.

“It gets very hard with fallen angels and rising stars, because when the story feels the worst it can often be the best time to buy and the opposite can be true on the way

up,” said Kurt Halvorson, portfolio manager at Western Asset Management.

“But for us to feel comfortable with the pricing we need to see some better fundamental positives in this story.”

Ford is in the midst of a long business restructuring plan to help it better adapt to consumer demand for larger vehicles, electric cars, autonomous driving and expand the carmaker’s footprint overseas.

The restructuring is expected to be costly and extend through the 2020/2021 period and include a lengthy period of negative

“The restructuring is expected to extend for several years with US$11bn in charges, and a cash cost of approximately US$7bn,” the Moody’s report notes.

“Ford is undertaking this restructuring from a weak position as measures of

expectations, and below the performance of investment-grade-rated auto peers.”

KRAFT HEINZ BUILDS BIG BOOK DESPITE CREDIT RISKS

KRAFT HEINZ sold a US$3bn three-part bond

Wednesday, showing that investors will put aside credit concerns to back investment-grade bonds with relatively high yields.

The packaged foods company is struggling to sell assets to reduce its burdensome US$31.1bn debt load and is at risk of becoming a fallen angel, with ratings of Baa3/BBB- and a negative outlook from S&P.

But that did not stop investors from piling at least US$16.2bn into order books through launch on the new bonds, which allowed spreads to tighten 32bp-45bp through price progression across the three tranches.

Bookrunners Bank of America Merrill Lynch, Citigroup and Wells Fargo priced a US$1bn 10-year at 205bp over Treasuries, a US$500m 20-year at 250bp and a US$1.5bn 30-year at 275bp.

At initial price thoughts, the bonds offered mouth-watering spreads to yield-hungry investors, but managed to tighten

For example, Kraft Heinz’s 4.625% 2029 bond was trading at a G-spread of 204bp on Wednesday and its 4.375% 2046s at 266bp, according to MarketAxess.

Still, with non-US yields turning negative and Treasuries on the rise again, those levels were attractive to investors.


ALL INVESTMENT-GRADE BONDS IN EUROSBOOKRUNNERS: 1/1/2019 TO DATE


1 BNP Paribas 239 58,279.17 7.4

2 JP Morgan 171 50,288.94 6.4

3 Barclays 163 48,255.42 6.1

4 SG 164 47,636.11 6.1

5 HSBC 217 46,018.46 5.9


7 Deutsche Bank 191 44,535.87 5.7

8 UniCredit 183 39,566.38 5.0

9 Citigroup 131 33,463.88 4.3

10 Goldman Sachs 111 32,771.35 4.2

Total 974 785,463.70

Excluding ABS/MBS, equity-related debt.


ALL CORPORATE BONDS IN STERLINGBOOKRUNNERS: 1/1/2019 TO DATE

Managing No of Total Share bank or group issues £(m) (%)

1 Barclays 21 2,313.88 13.7


3 HSBC 16 1,558.49 9.2

4 JP Morgan 9 1,213.45 7.2

5 Lloyds Bank 12 1,205.05 7.1

6 RBC 11 1,196.02 7.1

7 Santander 11 971.65 5.7

8 Morgan Stanley 7 889.86 5.3

9 Goldman Sachs 8 888.41 5.2

10 BNP Paribas 9 883.13 5.2

Total 48 16,924.51

Source: Refinitiv SDC code: N8a

ALL SWISS FRANC BONDS INCLUDING

SECURITISATIONSBOOKRUNNERS: 1/1/2019 TO DATE

Managing No of Total Share bank or group issues SFr(m) (%)

1 Credit Suisse 100 11,016.35 31.4

2 UBS 86 9,009.54 25.7

3 Verband Schweizerischer 18 4,189.85 11.9

4 ZKB 49 3,586.05 10.2

5 Raiffeisen Schweiz 29 2,171.69 6.2

6 BNP Paribas 10 1,182.93 3.4

7 Basler KB 13 885.58 2.5

8 Commerzbank 9 792.77 2.3

9 HSBC 3 650.00 1.9

10 Deutsche Bank 5 533.63 1.5

Total 182 35,109.19

Including preferreds. Excluding equity-related debt.

Source: Refinitiv

ALL INTERNATIONAL STERLING BONDS

EXCLUDING SECURITISATIONSBOOKRUNNERS: 1/1/2019 TO DATE

Managing No of Total Share bank or group issues £(m) (%)

1 Barclays 73 12,515.83 13.0

2 HSBC 74 11,766.16 12.2


4 RBC 49 7,756.10 8.1

5 BAML 36 6,827.28 7.1

6 Citigroup 31 6,514.65 6.8

7 Lloyds Bank 35 5,293.06 5.5

8 JP Morgan 24 4,327.59 4.5

9 Deutsche Bank 21 4,064.11 4.2

10 TD Securities 23 3,988.29 4.1

Total 197 96,255.94

Including preferreds. Excluding equity-related debt.

Source: Refinitiv SDC code: K05a

“They offered a ton of spread and in this environment all you’re seeing is investors who want to up their yield a little bit,” said one banker away from the trade.

“This is a good opportunity to buy something that has a fair amount of spread on it. Yeah, there is a lot of noise around it but it still feels like it should be okay.”

Kraft Heinz is looking to pay down debt that has ballooned on its balance sheet pushing leverage to high four times, according to S&P.

PUTTING THE BRAKES ONThe fastest way to do that is through asset sales, but the company put a pause on those plans after receiving tepid buyer interest and installing a new CEO who is reviewing the business.

CEO Miguel Patricio came from AB Inbev in July to take the helm at Kraft Heinz and almost immediately put the brakes on the sale of dairy products brand Breakstone’s, baby food business Plasmon, coffee brand Maxwell House and frozen potatoes business Ore-Ida.

“In the absence of near-term deleveraging through asset sales, which have been temporarily shelved, continued operational weakness in the second half of 2019 will weigh on spreads,” CreditSights noted in a report.

“Leverage is very clearly elevated for the ratings and with the challenges the company has faced since the disastrous 4Q18 earnings, fallen angel risk is a key concern.”

Proceeds from the new bond sale will be used in part to fund an up to US$1bn tender offer on four near-term maturities and free up cash for another US$500m chunk of 2020 notes.

The tendered notes combine for US$5.8bn in principal amount outstanding and include two 3.5% 2022s, a 4% 2023 and a 4.875% 2025 that has a call date approaching next year.

Just the week before last, Kraft announced another tender offer for all of its US$900m principal outstanding 5.375% 2020s and a cash redemption of US$1.72bn of two Kraft Heinz Canada 2020 notes.

In all, the company is redeeming and or tendering for US$4.12bn of debt.

Ultimately, CreditSights said Kraft Heinz can maintain its investment-grade ratings, but by reducing its short-term maturity wall the company is lowering the risk of falling to high-yield.

“One of the main incentives for staying IG

given the heavy maturity calendar,” CreditSights noted in its report.

“The latest tender for bonds farther out the curve would alleviate some of that

EUROS

DIVERGENT APPROACHES PAY OFF

Corporates were busy in the build up to the ECB policy meeting on Thursday, adopting contrasting strategies to take advantage of the low-yield environment.

Many targeted longish maturities, but DASSAULT SYSTEMES opted for more traditional tenors focused at the shorter end and belly of the curve.

Even though by Monday more than €38bn of issuance had hit the euro investment-grade corporate market since the UK’s public holiday on August 26, companies piled into the single currency.

With the ECB’s policy meeting looming, issuers were keen to get ahead of any potential volatility arising from the central bank disappointing the market.

“Supply is coming thick and fast,” said one banker. “Secondary trading has drifted a bit wider but primary has gone well.”

Average euro corporate bond spreads had slowly widened by 14bp from the beginning of August, to 80bp as of September 6, according to iBoxx data.

A large part of why secondaries had drifted is simply because investors have had so much supply to get on top of.

Admittedly, the odd recent new issue has underperformed - Daimler’s €3bn four-part euro bond issue from August 1 was seen more than 20bp wider across the curve in early September.

But many of the deals priced in early September were performing. Best of all were the reverse Yankees from Danaher and AT&T.

tranches by Monday, though arguably that was a sign it was relatively cheap. AT&T was 3b-7bp

attractive spread US corporates offer in euros.But deals from the likes of RTE, Snam,

Glencore and Vonovia were also tighter in the aftermarket.

US$5.8bn all-cash acquisition of US-based digital life sciences company Medidata.

Unlike other recent issuers that have sold multi-tranche offerings, the French corporate eschewed going too far out with

its €3.65bn offering.That was in part because it was a debut,

but also because shorter tenors are common

leverage. In addition, the levels at the short end were too good to resist.

“If rates are this low, why not lock in ridiculously low yields,” said a banker close to the deal.

Another lead said: “They have strong

debt in the capital structure.”The €900m three-year priced at a negative

yield, having launched at 40bp over swaps.

positive after launching at plus 48bp. The €900m seven and €1.15bn 10-year, meanwhile, priced at yields of less than 0.5%.

At launch, books were more than €10.4bn with a slight skew towards the longer tranches. Dassault is rated A- by S&P.

Many other issuers in the euro market focused on longish tenors, though none went for the 30-year mark that has become increasingly popular over the past few weeks after having lain dormant for more than four years.

PEUGEOT (Baa3/BBB-/BBB-) issued a €600m 10-year note at 140bp over swaps, 25bp inside initial thoughts. The tenor was unusually long for an automaker.

But leads said it is a part of the curve that is favoured by investors.

“There isn’t a need for a lot of size and issuers will want to go longer when they can,” said one who thought the deal was coming in line with fair value.

The 10-year has become the sweet spot for issuance, attracting both insurers and asset managers.

LA POSTE

French regulator approved the state-owned mail operator’s takeover of CNP Assurances, though a lead said that was not a topic of discussion for investors.

La Poste launched a €900m eight-year at 65bp over swaps and a €600m 15-year at plus 90bp. The September 2027s were tightened by 20bp from the wide end of IPTs, while the 2034s came in by 15bp from IPTs.

As is typical of La Poste deals, pricing was tight, with arguably no premium on either tranche.

ORANGE chose to launch a hybrid offering on Wednesday, following shortly after a successful triple-trancher at the end of August.

The reason was quite straightforward,

upcoming call and for general corporate purposes, this was a quite separate funding operation from that previous deal.

The French telecoms company brought a €500m no-grow perpetual non-call 7.5-year at 1.875%. Marketing began at 2.125%-2.25% and was revised to 1.875%-2% on a book of €1.7bn (pre-reconciliation). Demand fell to around €1.1bn.

The deal came with zero new issue premium. While not through its own curve as some recent hybrids have achieved, it was still a great result, said one banker away from the deal.


BONDS CORPORATES

GREENS SHINE IN AUTUMN RENEWAL

in the primary market.Paris-based real estate group COVIVIO and

ENERGIAS DE PORTUGAL went out on Tuesday

investment-grade market since E.ON’s

10.5-year notes on August 21.Amazingly, the market had seen

approximately €45bn issuance since then without either a green or SRI-linked deal.

Italian energy company Enel did issue a bond that has a step-up structure with a concomitant swap linked to the UN’s Sustainable Development Goals on Friday, but that was a Yankee.

There was no such innovation with the Covivio and EDP trades. Covivio priced a €500m no-grow 12-year bond at 120bp over swaps, 15bp inside IPTs.

The yield was 1.165%, nearly 30bp back of where Verizon printed a €800m March 2032

in the nature of Covivio’s and Verizon’s businesses and their standing in the capital markets. Books were approaching €900m at guidance but closed at €850m-plus.

The bonds have a second-party opinion from Vigeo-Eiris and have to comply with some of the UN’s Sustainable Development Goals, including affordable clean energy, climate action and sustainable communities.

Covivio (BBB+ from S&P) was last in the market in September with a €350m 1.875% seven-year deal. That bond was bid at 0.63%, or 106bp over swaps.

EDP, meanwhile, took out €600m through a seven-year note.

“The green label certainly helps. You get more momentum in the book and maybe a bit tighter pricing. I don’t think it was a conscious decision [to make it green to set it apart] but in a busy market it could help it stand out,” said a lead.

EDP (Baa3/BBB-/BBB-) is well known to green investors. In January, for example, it

year non-call 5.25.The senior bond began marketing at

100bp-105bp over swaps.Leads put out a series of EDP bonds as

comparables, including its 1.875% October 2025 green bonds, which they had bid at plus 67bp, its 1.625% January 2026s at plus 79bp and its 1.5% November 2027s at plus 76bp. The lead put fair value in the mid-70s.

A second lead said the difference in spreads between the green bond and EDP’s non-green notes meant there “was a slight nuance or challenge” when it came to pricing but the issuer achieved its targets.

The bonds were launched at plus 77bp as the deal got upsized from an expected €500m with books hitting more than €1.5bn.

ENEL is organising a series of non-deal investor meetings in Europe commencing on September 16 to provide an update on its sustainable strategy via BNP Paribas, Credit Agricole, Goldman Sachs and JP Morgan.

While typically this would be seen as a dull update, Enel has an interesting sustainable story to tell.

The company issued a US$1.5bn 2.65%

a renewables capacity target. Currently at 46%, its renewables capacity needs to be at 55% of total capacity by December 2021, otherwise the coupon steps up by 25bp.

The cost of the swap will also be affected if it does not meet that target.

EUROS PROVE A DRAW FOR US CORPORATES

The reverse Yankee trade has returned as a go-to product for US corporates, helping to push volumes to near double those of last

Chemicals company LYONDELLBASELL (Baa1/BBB+) launched a €500m seven-year and a €500m 12-year at plus 127bp and 175bp, respectively. Both were no-grow tranches. Comparables included Westlake Chemical and Eastman Chemical.

Westlake (Baa2/BBB/BBB) has July 2029s bid at plus 157bp, according to Tradeweb. Eastman (Baa2/BBB/BBB) has November 2026s at 88bp.

LyondellBasell was targeting tenors from seven to 20 years but pulled back from the long end. A lead said that investor feedback from a roadshow gravitated towards the 12-year mark.

Tenors between 10 and 12 years have become the sweet spot for issuers, with deals attracting the attention of fund managers and insurers.

The lead denied that S&P’s decision to downgrade the company’s outlook last month had any impact on the trade.

The agency revised its ratings outlook for the company to negative following a tender offer and repurchase of US$3.09bn of shares, citing worsening credit metrics.

US REIT WP CAREY (Baa2/BBB) launched a €500m April 2028 note at 168bp over swaps, 12bp inside IPTs. Various comparables were used, including the company’s euro bonds.

The closest pointers were its April 2026s, bid at 122bp as books opened, and its April 2027s, which were at 143bp. With so many deals in the market, however, most issuers were having to pay a premium to grab investors’ attention.

As one DCM banker said: “People are putting out deals that look like relative value.”

VERIZON

of the blocks, hitting screens on Monday to

bond, which can be redeemed at par on September 22.

The US telecoms company was targeting long 12 and 20-year euros and an 11-year sterling trade.

“The 12-year has been a tenor that’s outperformed,” said the banker on the deal.

As for the sterling tranche, despite the fraught political landscape the market continued to chug along.

Investors have cash that needs to be deployed and, like their euro counterparts, are keen for deals with tenors of 10 years and longer. Moreover, issuers that have minimal Brexit risks are getting a decent reception.

“In the face of everything Brexit-related, it makes sense for investors to look at companies with less exposure,” said the lead.

Verizon raised €800m from the March 2032s, €500m from the September 2039s and £550m from the September 2030s. That sterling note was bigger than the initial target of £300m-£400m.

At guidance, books on the euro tranches were €2.5bn-plus with a slight skew to the long 12-year, while on the sterling it was £1bn.

A second lead banker played down the relatively modest book at that stage on the euro offering. “We priced this to achieve a US$2bn size rather than for a large book,” he said.

The March 2032s priced 20bp inside initial thoughts and at the tight end of guidance, at plus 90bp.

However, the 20-year missed the tight end of the guidance range of plus 135bp (+/-5bp), to launch in line. Still, that was 15bp inside initial thoughts. The sterling came 15bp inside IPTs, at 135bp over Gilts.

KERRY’S POST-ECB TIMING PAYS OFF

KERRY GROUP picked the right time to return

the post-ECB lull and capturing the full attention of the corporate market.

With issuance slowing to a trickle at the end of the week the food ingredients company, the only issuer in the market on Friday, received solid demand on the back of strong conditions following the ECB meeting.

Leads Bank of America Merrill Lynch, HSBC, NatWest Markets and Rabobank marketed the 10-year at IPTs of 100bp-105bp area over mid-swaps, but with the book peaking at over €2.9bn they were able to set guidance at 80bp-85bp.

“It’s a very nice day to be in the market,” said a banker away from the trade.


“It feels quite strong after the ECB QE measures were announced and investors will be able to focus [on the trade].”

Final books closed over €1.85bn with the issuer taking €750m at swaps plus 78bp for a coupon of 0.625%.

Several bankers away from the issue saw

With the understanding that QE is now here to stay, one of the bankers away said that he expected the pace of issuance to normalise following frantic trade volumes prior to the recent ECB announcement.

Among other corporate purposes, the money raised will be used to repay debt and fund acquisitions.

Kerry has US$208m due to mature in January 2020 as part of a four-tranche note purchase agreement, according to CreditSights.

Two other tranches of the agreement are outstanding, together totalling US$200m and redeeming in 2022 and 2025.

closed three acquisitions for a total of €327m.

Kerry has one outstanding euro benchmark: a €750m 2.375% September 2025, bid at 67.7bp on Friday.

The Baa2/BBB+ rated Kerry Group is a food

serving the UK, Ireland and other selected markets and is involved in the production of a wide range of products including butter, cheese tea and sausages.

TEREGA SEEKS INVESTOR CONSENT FOR LEVERAGE INCREASE

TEREGA sought to modify the terms of its outstanding debt in order to up borrowing, following an increase in the stability and predictability of the company’s revenues.

The French natural gas transportation

increase its borrowing up to a maximum of 7.25 times Ebitda from the current 5.25 times.

It is targeting its 4.339% €500m July 2021s and 2.2% €550m August 2025s. Investors will, respectively, receive a fee of 0.3% and 0.9% of the amount held if they consent to the changes. The shorter bond was bid at 49bp and the longer note at 70bp on Tradeweb.

Holders of Terega’s 2.998% €350m 2035 are not part of the consent solicitation but will be convened in a general meeting to approve similar amendments to the “Total Net Leverage” included in the terms and conditions of the 2035 notes.

The decision follows a shift in regulation last year whereby revenues of storage operators are now fully regulated. This will help eliminate the company’s exposure to volume and price

risk, helping in turn to reinforce its business

following Thursday’s announcement, citing the fact that the rating is currently well positioned within the Baa2 category.

Moody’s expects management will act in accordance with their stated intentions to defend credit quality, should it become necessary.

The ratings agency also stated that the change in regulation was a credit positive for the issuer.

BNP Paribas, Credit Agricole, Natixis, Societe Generale and UniCredit are solicitation agents.

M&A FINANCING LEADS CORPORATE PIPELINE

A trio of mandates was out in the corporate market last week, with deals from

Technologies expected in the near future.WINTERSHALL DEA is lining up a €3.7bn multi-

US dollars for pricing as early as Monday via active bookrunners Barclays, Bank of America Merrill Lynch, JP Morgan and Societe Generale.

A European roadshow ended on

which is focused on four, six, nine and 12-year maturities, with investors showing interest for longer tenor, according to one of the leads.

The European independent gas and oil company was formed from the merger of BASF’s Wintershall and DEA Deutsche

US$7.25bn-equivalent of syndicated loans around that time.

The company is rated Baa2/BBB by Moody’s/Fitch.

INFINEON TECHNOLOGIES is eyeing hybrid issuance to fund its acquisition of Cypress Semiconductor.

The BBB (S&P) chipmaker has selected Citigroup and UniCredit as structuring advisors and global coordinators, as well as Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank, Goldman Sachs and JP Morgan as bookrunners to

meetings from September 18-20.A dual-tranche euro hybrid comprising a

perpetual non-call 5.5-year and a non-call 8.5-year with an expected rating of BB+ from S&P will follow.

ITV also joined the pipeline. The Baa3/BBB- (Moody’s/S&P) media company has mandated Barclays, Citigroup and Credit Suisse to arrange investor meetings in Europe commencing on September 16 for a benchmark-sized seven-year euro.

ITV also announced a tender offer for its €600m 2.125% note due September 2022 and its €500m 2% due December 2023.

The company has two outstanding benchmark issues, a €600m 2.125% September 2022 and a €500m 2% December 2023, last week bid at 85.2bp and 106.2bp over swaps, respectively.

WORLDLINE PRICES DEBUT ACQUISITION REFI

French electronic payments company WORLDLINE took full advantage of a becalmed corporate bond market on Wednesday to

minimal cost.The €500m debut bond issue came at

80bp over mid-swaps via BNP Paribas, JP Morgan and Natixis on an order book of about €1bn at time of pricing.

The bridge loan was for the purchase of ABN AMRO’s remaining stake (36.4%) in EquensWorldline, a remnant of the 2016 transaction in which Equens merged with part of Worldline.

Worldline, which obtained a BBB (stable) credit rating from S&P for the purposes of this transaction, made an unrated €600m seven-year convertible bond issue at the end of July. One of the leads said that it was deemed appropriate given it is not a household name.

“It’s a good story – payments services … Investors love this sector,” said another lead.

The fact that it is a new name with an M&A story was another plus, the banker said.

And while the transaction emerged after weeks of heavy supply and just one day ahead of the ECB meeting, demand topped €1.25bn at one stage.

Initial price thoughts began at plus 95bp–100bp for a benchmark size.

As with any debut issuer, there was a wide range of views on valuations. But a new issue premium of around 5bp was mooted, based on similar credits that include Fiserv (Baa2) and Wirecard (Baa3) – both of which have recently issued.

Some investors thought Worldline should offer 20bp more than where Fiserv’s €500m 2023s were trading. They came at 70bp in mid-June but have tightened to an I-spread of 55.5bp since then.

110bp earlier in September and is 2bp wider, according to Tradeweb.

SIGNA DEBUT FALLS OFF THE RADAR

Real estate company SIGNA PRIME CAPITAL saw

quiet on the trade.The commercial property landlord had

followed up a roadshow by putting out IPTs of 2.50% area on Wednesday for an unrated


BONDS CORPORATES

Sole global coordinator Credit Suisse and fellow bookrunner Raiffeisen Bank International had opened books with the trade expected to be wrapped up in the day.

But the trade was pushed into Thursday.

further updates had been communicated to the market by late Friday.

Signa, however, said on Thursday that it had raised €1.2bn in equity. Signa Holding added €700m of capital through existing shareholders. Its largest subsidiary, Signa Prime Selection, will execute a €500m capital increase on September 17 which is already fully subscribed.

As a result, the group said that it has access to liquidity reserves of more than €1bn for future growth.

Signa focuses on the high-end market in city centres in Austria and Germany. It has historically relied on banks and strategic

STERLING

NATIONAL GRID GRASPS STERLING CHANCE

NATIONAL GRID raised £700m on Monday via a dual-tranche transaction from its UK operating company, hitting the sterling

this year.The utility sold a £300m seven-year at

100bp over Gilts and a £400m 19-year at

the sterling market since a £250m 16-year in January.

“It was always the target from the outset to go for a bigger trade,” said a lead. “Given low rates and credit spreads, this was a great opportunity to lock in long-term funding.”

15bp from the wide end of IPTs on the shorter note. The September 2026s attracted more than £650m of orders.

Pricing was tightened by 22bp on the September 2038s from the wide end of the IPTs range, drawing interest of more than £900m.

The lead saw fair value at plus 90bp-95bp on the shorter bond and plus 105bp on the longer one.

“We started at the right level in terms of the IPTs to generate demand and luckily we were able to take the issue where the issuer wanted it,” said the lead.

CreditSights analysts had said that concessions at IPTs looked between 15bp-20bp.

The analysts said that the issue presented relatively low risk, given it came from National Grid’s regulated, ring-fenced UK entity National Grid Electricity Transmission (A3/A-/A).

“The biggest uncertainty is the Labour Party plan to renationalise the UK electricity industry, but these bonds are being issued by the regulated UK opco,” wrote the CreditSights team.

“Our base case scenario is that renationalisation does not happen, and even if it did, these bonds would go with the regulated company and would effectively become liabilities of the UK government, although there is unlikely to be any explicit guarantee.”

The bonds also have a restructuring event noteholder put, for further bondholder protection.

National Grid is not a pure UK play: it owns and operates electricity transmission facilities and gas distribution networks in the US.

It is one of a number of corporates in recent weeks to take advantage of rock-bottom yields by cutting the cost of debt with liability management exercises.

In August, the issuer was in the euro market to sell a dual-tranche €1.25bn hybrid transaction comprising 60-year non-call 5.25 and 63-year non-call eight tranches, proceeds from which will be used to buy back higher-coupon notes at a negative yield.

National Grid expects to issue on average £2bn-£3bn of long-term debt each year to

The proceeds of the latest issue will be used for general corporate purposes.

HSBC, Lloyds, NatWest Markets and Societe Generale were leads.

FIG

US DOLLARS

BB&T BRINGS RARE CALLABLE STRUCTURE ON LATEST TIER 2 NOTE

BB&T

with a Tier 2 subordinated note that carried a call structure rarely employed by US banks as it prepares its US$28bn merger with SUNTRUST.

The US$750m 10-year note issued by BB&T’s operating company, BRANCH BANKING

TRUST

common among Yankee issuers but less so for US banks, which tend to stick to call options one year from maturity.

Only Discover Bank’s 10-year non-call

Northern Trust’s 15-year non-call 10 from 2017 stand as precedents in the US banking sector, according to CreditSights.

The structure makes sense, as capital treatment on Tier 2 notes amortises by

the bond’s life. So, exercising the call is seen as a way to maximise capital treatment.

“There is limited precedent in the US for callable sub debt because of market inertia and the need to educate the investor base on how to think about the structure,” said Jesse Rosenthal, senior analyst at CreditSights.

“Our view is that the structure makes all the sense in the world — for the issuer at least — and that we would see a trickle over time, ramping up as we get closer to the sub debt maturity wave (starting around 2024).”

BB&T and SunTrust are awaiting regulatory approval for the largest bank merger in a decade — a US$28bn combination that will bring the two banks together under the new name TRUIST.

with US$4.2bn in Tier 2 capital outstanding, the combined entity will likely need an extra boost of such debt, according to CreditSights.

Issuance of US investment-grade corporate subordinated Tier 2 debt has fallen since 2016, when banks brought US$29.7bn to the market, versus US$9.8bn in 2018 and US$7.5bn year-to-date in 2019,

And with regional bank paper also scarce, the sector remains in strong demand for its high credit quality and insulation from geopolitical trade risks, said David Knutson, head of credit research at Schroders.

Price progress was hardly aggressive, neither on the Tier 2 bond nor on the US$1.1bn 3.5-year note (A2/A-/A+) which the holding company issued the same day.

After starting the Tier 2 notes at initial price thoughts of Treasuries plus 130bp area, leads released guidance at 115bp the number, and stuck there after books reached just US$1bn.

Similarly, the senior notes tightened 10bp from IPTs and did not budge from guidance to price at Treasuries plus 70bp on a US$1.3bn book.

At that level, BB&T’s Tier 2 notes were seen offering investors an attractive pick-up over SunTrust’s 3.3% 2026 sub note, which had been trading in the mid-90s.

But a banker on the deal thought SunTrust’s 2026 too illiquid to be counted as a comparable and noted that BB&T priced inside its fair value calculation of Treasuries plus 117bp-120bp.

If viewed as a 10-year if the call option is not exercised, the BB&T bond priced in line with its outstanding 3.875% 2029 subordinated note, which had been trading at a G-spread of 117.5bp, he said.


PRUDENTIAL PRINTS US$1.5bn TO FUND ASSURANCE M&A

PRUDENTIAL FINANCIAL raised US$1.5bn in the investment-grade bond market on Tuesday to help fund its US$2.35bn acquisition of online insurance start-up ASSURANCE IQ.

The big-name life and education insurer (rated A3/A) priced a US$1.5bn 31.5-year senior unsecured bond that tightened 10bp-

at 155bp over Treasuries.

The debt portion of the M&A deal is earmarked at US$680m and the additional funds raised above that amount will go towards pre-funding US$1.2bn in debt maturing in 2020, according to CreditSights.

Prudential announced the acquisition of the “insurtech” company at the start of the month in a move to upgrade its technology at a time when Silicon Valley start-ups are disrupting the space with data-driven policy models that boost revenues and cut costs.

The insurance giant moved quickly to access bond markets that offer low rates amid

a surge in supply that has brought US$88bn to

Although the yield on the 30-year Treasury has risen above 2% again, it is still close to its historical lows, trading at 2.153% on Tuesday.

“Like everyone else, they are moving things forward as quickly as possible to take advantage of where rates are, lest they continue to go up,” one syndicate banker close to the trade told IFR.

At 155bp over Treasuries, the new bond offered some 13bp-19bp of new issue


BONDS FIG

Lloyds plumps for dollars as Rothesay breathes life into sterling

FINANCIALS UK FIG issuers brave Brexit noise

LLOYDS BANKING GROUP sought the certainty

of the US dollar market last Tuesday, while

a £400m ROTHESAY LIFE Tier 2 hit attested

to demand available in sterling ahead of a

potential window for UK credits.

UK banks have been relatively quiet on the

funding front as Brexit risks have once again

come to the fore.

Lloyds’ US dollar holdco senior was the first

UK bank trade in two weeks – excluding a senior

offering from Standard Chartered, typically

classed apart from UK lenders.

Bookrunners Goldman Sachs, JP Morgan,

Lloyds, Morgan Stanley and UBS marketed

the SEC-registered March 2023 non-call

March 2022 issue with initial price thoughts of

Treasuries plus 135bp area after the European

open.

It ultimately launched a US$1.5bn trade at

120bp.

A source close to the deal said Lloyds chose

US dollars as it does not feel the euro market

is there for the bank at present and said the

sterling market is relatively illiquid.

“The treasury guys are constantly monitoring

options at the moment, and obviously with all

the joys of the parliamentary votes yesterday

and a keen desire to show a bit of leadership for

the UK, they were quite keen to do something,”

he said.

The difficulties UK banks face in the single

currency are demonstrated by Virgin Money, which

has remained on the sidelines with a planned euro

covered bond. Bank of Ireland, meanwhile, pulled a

euro Tier 2 the week before last.

Non-financial issuers have recently scored

successes in sterling, with National Grid raising

£700m on Monday. But the source close to

Lloyds’ deal said the market is “a leap of faith”,

given a lack of clear or consistent feedback from

investors.

NO NEWS FLOW IS GOOD NEWSOther bankers are more upbeat on the market

and foresee a promising window for new

issuance now the UK parliament has been

prorogued, meaning the Brexit newsflow could

temporarily slow.

However, Scottish judges on Wednesday ruled

the suspension unlawful and the Labour Party

has called for MPs to be recalled.

“From a UK credit perspective the market

is feeling pretty good at the moment,” said a

syndicate banker. “Parliament is prorogued until

October 14 and I think there’s a window here.”

He said Lloyds’ preference for US dollars

made sense as UK banks tend to get easier

execution and greater liquidity in that market, but

suggested UK banks may begin to return to their

home market.

“I suspect they will now there’s been a bit of a

shift in tone,” he said.

Rothesay offered encouragement.

The insurer’s 10-year non-call five-year Tier 2

was marketed with initial price thoughts of Gilts

plus 550bp area last Tuesday morning.

Leads Barclays, HSBC and NatWest Markets subsequently revised guidance to the 525bp

area and set the size at £400m, before the

spread was fixed at 515bp.

Books closed above £1.6bn, pre-reconciliation.

A DCM banker at one of Rothesay’s leads said

the sterling market proved its capacity in July,

when Rothesay sold a £300m Tier 3 and fellow

insurers ReAssure, Prudential and Pension

Insurance Corporation tapped the market.

“With the sterling market you just have to

time it in terms of newsflow, and newsflow has

been more positive versus last week,” he said.

“OPPORTUNITIES”Rothesay’s plans for growth were knocked back

last month when a UK high court judged blocked

the transfer of £12bn in annuities to the insurer

from its peer Prudential.

Nevertheless, Rothesay chief executive Addy

Loudiadis said in an update last Tuesday that

2019 is expected to be a record year for new

business for the insurer. It expects to write £10bn

of new business by year-end.

“While the political and economic backdrop

clearly presents challenges, we believe there

will also be opportunities for strong institutions

which are risk-managed well,” said Loudiadis.

NEW YORK LIFE GLOBAL FUNDING was also in the

market, printing £550m of funding-agreement

backed notes.

Leads Barclays, Credit Suisse and JP Morgan marketed the deal with IPTs of Gilts plus 100bp

area. The spread was fixed at 88bp, via guidance

of 90bp (+/–2bp).

Books were above £950m.

MORE TO COMEThe market should expect more supply to come

from Lloyds, which said in July it would focus on

issuing secured products and opco senior in the

second half of 2019.

It raised US$1.5bn of opco senior on August 7

through Lloyds Bank but has more to do through

its non-ring-fenced entity Lloyds Bank Corporate

Markets (LBCM), which also sits at the opco level.

The source close to the deal said LBCM will

come to the market when costs make sense.

Its deal comes after Lloyds on Monday said

it would set aside up to an extra £1.8bn to

settle compensation claims relating to mis-sold

payment protection insurance after a surge in

enquiries.

As a result, the bank suspended its 2019

share buyback programme and warned that its

increase in its capital ratio in 2019 will now be

below its guidance of 170bp–200bp per year.

Tom Revell


concession over Prudential’s 4.35% 2050s that mature just one year prior to the new notes, according to another banker close to the trade.

The new note also landed some 10bp wide

changing hands at a G-spread of 145bp on Monday, according to MarketAxess data.

Prudential is known for issuing with somewhat unorthodox tenors, but the 31.5-year note will help ease the maturity ladder for future management that will have to pay off US$1bn in both 2049 and 2050, according to CreditSights.

All things considered, CreditSights highlighted this bond as a particularly good deal for investors.

“This looks like good value to us for a name that has routinely traded as the tightest name in the US life insurance sector across tenor,” the report stated.

“In our assessment, Prudential has one of

insurance sector and is a name that has a place in any buy-and-hold portfolio.”

Citigroup, Barclays, Credit Suisse, Goldman Sachs, Mizuho and Wells Fargo were bookrunners on the deal.

SMFG PRINTS TIER 2

SUMITOMO MITSUI FINANCIAL GROUP, rated A1/A–

US dollar Tier 2 bond issue from Japan since 2015.

The US$500m 10-year subordinated Tier 2 offering was priced at par to yield 3.202%, equivalent to Treasuries plus 148bp.

This was at the tight end of guidance of 150bp area, plus or minus 2bp, and inside initial price thoughts of 165bp area.

US investors drove demand for the SEC-registered notes, with good demand from insurers in particular. SMFG held investor updates recently, and from the feedback it was clear that there was demand for a Tier 2 issue.

The last of the Japanese megabanks to issue Tier 2 dollar bonds was Mizuho in 2015, but a recent wave of paper from Australia showed there is good investor demand for capital securities from well-rated banks in the current low yield environment.

SMFG’s Tier 2 bonds have expected ratings of A2/BBB+ (Moody’s/S&P).

SMBC Nikko, Goldman Sachs, Citigroup and Bank of America Merrill Lynch were active bookrunners.

Proceeds will be used to extend a subordinated loan to Sumitomo Mitsui Banking Corp, which will count towards Tier 2 capital and internal total loss-absorbing capacity.

MIZUHO GOES GLOBAL

MIZUHO FINANCIAL GROUP last Monday priced US$1.6bn of SEC-registered bonds in three tranches.

A US$500m four-year non-call three

a coupon of three-month Libor plus 85bp,

plus or minus 5bp; a US$600m 2.55% six-

was priced at par to yield Treasuries plus

110bp area, plus or minus 5bp; and a

guidance of 125bp area, plus or minus 3bp.Back-end pricing for the latter two note

tranches was three-month Libor plus 110bp and 131bp, respectively.

Initial price thoughts for the respective tranches were three-month Libor plus 105bp area, Treasuries plus 120bp area, and Treasuries plus 140bp area.

The senior unsecured benchmark bonds have expected ratings of A1/A– (Moody’s/S&P).

Mizuho (B&D) and Goldman Sachs were active bookrunners.

Proceeds will be used to make a loan to Mizuho Bank that will count towards internal total loss-absorbing capacity.

EUROS

DE VOLKSBANK, GROUPAMA SCORE WHILE COMMERZBANK SPLITS OPINION

Deals from DE VOLKSBANK and GROUPAMA picked up healthy books last Monday, but the lacklustre reception COMMERZBANK received divided the market.

De Volksbank’s inaugural green bond, a

was more than three times covered.Coming at IPTs of 70bp area over mid-

swaps, leads managed to launch at plus 50bp.Bankers put some of its success down to

the issuer’s investor friendly approach to marketing.

“De Volksbank did it the right way and they’ll end up paying 3bp or 2bp [new issue

relatively well followed but also rare,” said a banker away from the trade.

“Optics play a massive part. If you appear to be investor friendly at the beginning, you end up winning at the end,” he said.

“the issuer did everything right and put in a lot of time roadshowing the framework as well”.

Along with the Dutch bank’s own issue from last year, dealers on the trade used

BPCE, Credit Agricole, LBBW, Royal Bank of Canada and Sumitomo Mitsui as comparables.

A second lead banker saw fair value on the trade in the high 40s.

framework in April and the new issue is

ALL GLOBAL AND EUROMARKET YEN BONDSBOOKRUNNERS: 1/1/2019 TO DATE

Managing No of Total Share bank or group issues ¥(m) (%)

1 Mizuho 14 316,258.38 22.3

2 Sumitomo Mitsui Finl 12 203,433.40 14.4

3 BAML 2 129,075.00 9.1

4 Daiwa Securities 8 113,891.67 8.0

5 JP Morgan 2 112,500.00 7.9

6 Goldman Sachs 1 107,500.00 7.6

7 Mitsubishi UFJ MS 6 107,066.73 7.6

8 Nomura 7 103,275.00 7.3

9 MUFG 4 58,375.02 4.1

10 BNP Paribas 2 40,050.00 2.8

Total 28 1,417,528.20

Excluding equity-related debt. Including preferreds.

Source: Refinitiv SDC code: K10

ALL SAMURAI BONDSBOOKRUNNERS: 1/1/2019 TO DATE


1 Mizuho 36 352,926.67 24.0



4 Nomura 24 208,900.00 14.2


6 HSBC 5 89,626.67 6.1

7 Natixis 5 40,900.00 2.8

8 Citigroup 3 32,500.00 2.2

9 BNP Paribas 4 18,460.00 1.3


Total 41 1,472,000.00

Excluding equity-related debt.


ALL INTERNATIONAL YEN BONDSBOOKRUNNERS: 1/1/2019 TO DATE


1 Mizuho 50 669,185.04 23.2



4 Nomura 31 312,175.00 10.8


6 BAML 2 129,075.00 4.5

7 JP Morgan 2 112,500.00 3.9

8 Goldman Sachs 1 107,500.00 3.7

9 HSBC 7 101,626.67 3.5

10 Natixis 7 60,200.00 2.1

Total 69 2,889,528.20

Including all Euro, foreign and global issues. Excluding equity-related

debt.



BONDS FIG

only the credit’s third senior benchmark, having issued one every year since 2017.

A second away thought the deal “got out of the gates a bit quicker than some of the other trades in the market today”.

ABN AMRO, HSBC, ING and SEB led de Volksbank’s trade, with the two Dutch banks also acting as green bond structuring advisers.

TEPID COMMERZ

senior non-preferred received a far more tepid response from the market, the book only managing to attract €700m-plus orders.

Leads BBVA, Commerzbank, Deutsche Bank, DZ Bank and Natixis offered IPTs of 90bp area and tightened to 80bp, with bankers on and off the trade seeing fair value in the high 60s, however.

“Perhaps it got off to a bit of slow start, but this has been a trend since last week,” said a lead banker.

tougher to position themselves ahead of the ECB, but if issuers want to issue they can.”

Other bankers, meanwhile, thought the pricing should have been more accommodating.

“I think they struggled … by starting a bit tight at 90bp,” said one banker.

“It strikes me as a little bit of exuberance from the issuer about getting the tightest possible price whereas the sensible strategy right now is to go out and pay [a bit extra].”

Another syndicate banker added that he thought the low yield on offer dampened enthusiasm for the trade. The deal was issued at a yield of 0.32%.

Some bankers even cited investor concerns surrounding the bank’s M&A prospects.

For comparables, from the issuer’s own curve, the €500m 1.125% May 2024 and €500m 1.125% September 2025 were cited by leads. The deals were seen bid at plus 68.2bp and 80.9bp respectively on Monday.

“What was a lot tighter was Groupama. That wasn’t paying a huge premium but went really well. It says a lot about the market. Anything that’s offering yield is a different story. That was always going to go well,” said a banker away from the French insurer’s deal.

Books on the €500m 10-year Tier 2 closed at €1.25bn at reoffer, after peaking at over €1.6bn

As a result, leads BNP Paribas, Citigroup, Credit Agricole, HSBC, JP Morgan and Natixis were able to set the level at 240bp over, the tight end of the 240bp-245bp guidance and inside the 260bp-265bp IPTs. The 2.125% bonds priced at a yield of 2.242%.

“It’s subordinated, it’s high beta, this is where investors have been putting their money to work,” a lead said.

“It’s a core name, it still offers well above 2% in terms of coupon, it’s a 10-year bullet – it seemed a very straightforward offer and something investors would welcome in the current spread and yield complex.”

to arguably through fair value, depending on how one looked at the curve extension.

Another banker away thought the deal’s attractiveness was also down to relative value.

“Insurance Tier 2 at that sort of spread is not bad if you consider where some of the French banks’ Tier 2 is trading,” he said.

A €1bn July 2031 for BNP Paribas priced in June was quoted at mid-swaps plus 134bp, according to Tradeweb.

The deal is expected to be rated BBB by Fitch and is expected to replace a 7.875% €750m Tier 2 due to be called on October 27

ACHMEA THROWS HAT INTO THE RING AHEAD OF BUSY FIG WEEK

ACHMEA mandated banks for a dual-tranche subordinated transaction, one of four transactions announced after the ECB opened the door wide to QE and cut rates deeper into negative territory, the premise

The Dutch insurance company has mandated Deutsche Bank and HSBC as joint global coordinators and Barclays, BNP Paribas, Deutsche Bank, HSBC, NatWest Markets, Rabobank and UniCredit for Restricted Tier 1 and Tier 2 issues.

“The market is back on oxytocin, the shop is open,” a syndicate banker said.

“We saw rates rally massively on the back of the ECB announcement, although they’re now back to unchanged. But on the credit side, the market reaction has been very positive - we’ve seen Italian, Spanish risk snap tighter.”

KUTXABANK, rated Baa2/BBB/BBB+ by Moody’s/S&P/Fitch, is also already lining up a trade.

It has mandated Barclays, BBVA, Credit Agricole, Natixis and Santander for a debut

expected to be rated Baa3/BBB-/BBB+. Meetings begin on September 17.

Further down the ratings spectrum, PERMANENT TSB GROUP HOLDINGS, rated Ba3/BB-, has mandated BNP Paribas, Goldman Sachs and Morgan Stanley for an inaugural €300m 5NC4 senior holdco. Meetings begin on September 16.

Little-known CASSA CENTRALE RAIFFEISEN

DELL’ALTO ADIGE added its name to the pipeline last Friday, mandating Banca IMI, ING and RBI

year senior preferred. Meetings begin on September 17. The deals are the tip of the iceberg, according to bankers.

AUSPICIOUS TIMINGFor Achmea, the timing could not be more auspicious, as the search for yield that has been the theme of recent weeks is expected

It will be marketing a perpetual non-call 10-year Restricted Tier 1 and 20-year non-call 10 Tier 2 transaction until Wednesday,

insurance company to sell two capital transactions in one go.

banker familiar with the transaction. “They have certain capital needs and they thought

combination and lower the overall cost.”

temporary writedown structure out of the Netherlands according to the banker.

Speculation had gripped the market that a

mandate announcement, after S&P published a report outlining new ratings for RT1 and dated subordinated notes of Achmea.

The issuer’s €600m 6% perpetual dropped from 105.50 to 100.80, according to Tradeweb, as markets started pricing in the possibility of a call of the instrument.

The €600m bond is grandfathered as Tier 1 capital until January 2026, according to

November 2012. If the note was left outstanding, it would offer a yield of around 5.8% to the 2025 call, they said.

“In our view, it is a close call as to whether issuing a new RT1 would create a cost advantage over the existing Tier 1 hybrid,” they wrote.

“As the outstanding Tier 1 instrument is still tax-deductible, its effective cost is circa 4.5% for the insurer, according to Achmea. As the Dutch tax law change has made RT1 coupons non-tax-deductible, the insurer would need to issue an RT1 at below these

outstanding instrument.”

issuer to raise a euro in the format since S&P tweaked its methodology. It now give intermediate equity credit to instruments that have a remaining maturity of 20-year instead of 30-year.

“The perception is that it will price with slightly less spread than a 30NC10, though it remains to be seen how much that is,” the banker said. “Market conditions are amazing and yields exceptionally low, so it makes sense to come now.”

ANZ NZ GOES LONG, REAPS REWARDS WITH 10-YEAR SENIOR

ANZ NEW ZEALAND only paid a slim concession and was rewarded for pushing out its curve,


as it attracted more than €1.2bn of orders for a €500m 10-year senior unsecured offering last Tuesday.

Such a long-dated issue is unusual for a New Zealand bank. The deal extends ANZ NZ’s curve by 4.5 years and becomes the longest dated senior benchmark from any New Zealand lender by almost three years.

Leads ANZ, BNP Paribas, DZ Bank and HSBC placed the €500m no-grow deal at 60bp over mid-swaps, inside IPTs of 80bp area and at the tight end of guidance of 60bp–65bp.

Books closed above €1.2bn, excluding JLMs.

Bankers saw fair value in the high 50s,

precise given the lack of New Zealand comparables so far out along the curve.

ANZ NZ’s 1.125% March 2025, its longest dated senior bond, was bid at 43bp at last Tuesday’s open.

A syndicate banker at one of the leads said the choice of tenor was driven by the yield environment and investor demand.

have the optionality between seven and 10 years, for example, you can basically do a 10-year trade at a seven-year spread,” he said.

“On top of that, you have investors looking for 10-years from well-rated credits

The longer tenor meant the deal offered investors a relatively attractive coupon of 0.375% and yield of 0.45%.

The deal is expected to be rated A1/AA–/AA– (Moody’s/S&P/Fitch).

ARKEA SOUNDS FIRST SOCIAL BOND

CREDIT MUTUEL ARKEA

bond, having arranged a roadshow to present its green, social and sustainability bond framework.

Credit Agricole is sole social bond structuring adviser and has been mandated alongside ABN AMRO and DZ Bankmeetings starting late this week.

dedicated to affordable housing originated by Arkea Banque Entreprises & Institutionnels, Credit Mutuel de Bretagne and Credit Mutuel du Sud-Ouest, according to Arkea’s investor presentation. The issuer established its green, social and sustainability framework this month.

Vigeo Eiris is providing a second party opinion on the issuer’s framework and has noted its consistency with green, social and sustainable bond principles.

The issuer is rated Aa3/A– by Moody’s/Fitch. Moody’s this summer announced it was extending its review of the issuer’s credit rating, initiated in 2018 when the French name received a mandate to separate from Groupe Credit Mutuel.

Sustainable Development Goals (SDG) credentials. CAIXABANK recently held meetings in Europe to introduce its UN SDG framework, under which it will be able to issue green, social and sustainability bonds.

STERLING

BMO OPENS UP STERLING FOR CANADIAN BAIL-IN

BANK OF MONTREAL received a warm reception from sterling investors on Wednesday as the

benchmark in the currency.Interest peaked at more than £675m

before closing in excess of £650m, the largest book for a BMO sterling senior in at least four years.

“It got a very good reception from the market and there was enough demand for a decent benchmark-size trade,” said a lead.

The lead said that investors were not fazed by the paper’s bail-in eligibility.

The trade, rated A2/A-/AA-, was eventually sized at £500m with a coupon of 1.50%.

IPTs of Gilts plus 120bp area via leads Bank of Montreal, Credit Suisse, Lloyds and NatWest Markets.

It was set at 110bp, with leads putting fair value in the low 100s.

“Sterling is a very important market for BMO, there is a great fondness for the currency,” said a second lead banker.

“BMO has a solid presence in the UK and investors know the name and the story around regulation.”

Comparables included sterling senior from US bank names such as Bank of America and Wells Fargo, as well as their US dollar curves, alongside legacy sterling senior from BMO and Bank of Nova Scotia.

The last Canadian FIG issuance of benchmark senior sterling came before the introduction of the Canadian bail-in regime in September 2018. Bank of Nova Scotia printed a £250m 1.75% December 2022 in June last year, that was quoted at 22.6bp bid on Wednesday.

bail-in-able from a Canadian bank, lenders from the country are regular senior sterling MTN issuers, helping to build investor familiarity with the banks.

“The investor base knows the name from previous senior, from MTNs, there is a lot of activity,” said the second lead.

Toronto Dominion recently underscored Canadian banks’ substantial issuance in the MTN market by placing a £500m one-year

13bp. The trade settled last Wednesday, according to Eikon.

In benchmarks, BMO last printed sterling

plus 28bp.

SWISS FRANCS

INTESA’S NOT QUITE SWISS DEBUT

INTESA SANPAOLO BANK IRELAND

proper foray into the Swiss market on Tuesday with a Swiss franc-denominated

It was not technically a debut for Intesa in the franc, as the bank had issued repo-

distributed deal.IPTs started out with quite a wide 10bp

range at mid-swaps plus 98bp-108bp as some leeway was left for a bit of premium, given the newness of the name to Swiss accounts and the volatility in the Italian markets.

Books opened for a minimum SFr200m (US$202m) at 100bp-105bp, before printing SFr225m at the tight end, equivalent to 124bp over government paper for a 0.195% yield.

Adjusted for currency conversions, the bonds came around 5bp wide of Intesa’s July 2024 euro deal, which was quoted at 94.5bp over euro mid-swaps ahead of the new deal, equivalent to 95bp over Swiss franc mid-swaps.

Other outstanding Italian names in the franc that could be used for reference included UniCredit Bank Ireland 4.25% October 2022 (also rated Baa1), an old 10-year senior from 2012, bid at a Z-spread of 100bp ahead of the Intesa transaction. Slightly lower rated, at S&P BBB, Mediobanca Luxembourg has a 0.55% September 2023 that was spotted at a Z-spread of 100bp.

Although a few accounts had limits on Italian paper, there were no worries shown about the credit. An all-Swiss book of 35 accounts took part, with asset managers taking just over two-thirds at 67.1%, followed by private banks with 18.3%, insurers 7.3%, bank treasuries 7% and pension funds a scant 0.3%.

The bonds came with SFr200k denominations, much larger than the standard SFr5k seen in the Swiss market. This, however, cut down on much of the retail demand for the paper, as the private

from an investment-grade credit with a positive yield showed.

The deal could also have been even bigger with smaller denominations given that some asset managers had concerns about lower liquidity in high-denomination paper.


BONDS FIG

The issue is unconditionally and irrevocably guaranteed by Intesa Sanpaolo SpA, and expected to be rated Baa1 by Moody’s, BBB by S&P and BBB by Fitch.

UBS was sole bookrunner and joint lead manager with Banca IMI.

YEN

BNP PARIBAS TAPS EUROYEN MARKET AGAIN FOR QUICK FUNDING

BNP PARIBAS (Aa3/A+/AA–) raised ¥42.9bn (US$397m) from two-tranche six-year non-

non-call 10 Tier 2 bonds, providing an investment opportunity for Japanese investors who have been moving into higher-yielding products.

The French bank used the Euroyen rather than the traditional Samurai format for the third time in a row because it can sell the bonds swiftly off its EMTN programme and it does not require onerous documentation.

year yen offer-side swaps with a 0.492% coupon. If not called, the coupon will reset

55bp. The ¥8.5bn subordinated bond priced at 100bp over 10-year swaps with a 1.058% coupon. The coupon will reset to six-month Libor plus 100bp if not called.

The bank was not necessarily aiming to raise a large amount of funds, as more than 80% of its non-preferred senior debt programme has already been completed for the year, according to its second quarter results.

Also, on the buyside, Japanese regional investor appetite for bonds that comply with by total loss-absorbing capacity requirements has fallen after Japanese authorities implemented higher risk weightings on such investments in April.

Nonetheless, the French bank’s TLAC tranche drew over ¥30bn of demand, a bit bigger than the ¥22.4bn that Credit Agricole

in June. Megabanks, specialised banks, lifers, trust banks, asset managers, regional investors, and other accounts including foreigners participated in the tranche.

The issuer’s initial plan was to sell just the

Tier 2 tranche as it was aware of potential demand among Japanese investors for higher yielding products. The tranche attracted lifers, central public funds, regional investors and other accounts including foreigners.

The deal was executed quickly, at least for the yen market, with only two days of marketing, as opposed to the usual three to four for a Samurai transaction.

BNP Paribas announced the deal on Wednesday with initial price thoughts of 50bp–55bp over yen offer-side swaps and 100bp–102bp, respectively. The guidance

The guidance level for the SNP was quite competitive because the issuer did not have a strong need to raise funds. Two bankers on the deal said the guidance level was about 5bp to near 10bp over the issuer’s euro secondary curve.

At the time of pricing, the spread was a bit wider as credit spreads tightened in the euro market after the ECB announced the reintroduction of its bond-buying programme. The issuer is said to have sounded out investors at 45bp area before marketing, but apparently investors rejected the sub-50bp spread.

For the Tier 2 tranche, a suitable

issuer does not have similar callable sub bonds in euros, although the more-than-1% coupon helped draw demand.

BNP Paribas, Daiwa, Mizuho, MUFG and SMBC Nikko were joint lead managers. The SNP and Tier 2 notes have expected ratings of Baa1/A–/A+ and Baa2/BBB+/A, respectively.

NON-CORE CURRENCIES

SLOW BIRTH FOR METRICS ASLF

METRICS CREDIT PARTNERS DIVERSIFIED AUSTRALIAN

SENIOR LOAN FUND, rated BBB+ (S&P), has yet to pull the trigger on a planned debut

note issue, having released initial price talk last Tuesday at 170bp area over three-month BBSW and asset swaps.

Bank of China, CBA, SMBC Nikko and UBS are joint lead managers for the transaction, which requires more investor credit work

Metrics ASLF has just under 100 loans

Australian corporates. These have a weighted-average credit rating of mid-Triple B and an average loan tenor of a little below three years.

The fund had A$2.4bn (US$1.64bn) in assets as of December 31 2018 with the largest single exposure representing 3% and the 10 largest investments 24%.

The money raised by the proposed bonds would enable the company to expand its business and lend to a growing pipeline of potential corporate borrowers.

S&P assigned a BBB+ rating with a positive outlook to the fund on April 1.

The ratings agency cited portfolio holdings with relatively low underlying credit and market risks, a strong funding

leverage that supports liquidity and solvency in a stress scenario.

On the downside, S&P referenced a relatively concentrated investment portfolio, a limited fund and manager track record and a small management team.

One potential real money investor said the proposed bond issue had strengths, but

business growth in another, albeit different, asset manager.

BFCM MARKETS KANGAROO

BANQUE FEDERATIVE DU CREDIT MUTUEL (BFCM), rated Aa3/A/A+, has mandated ANZ and UBS

preferred Kangaroo bond offering.

KIWIBANK TAKES NZ$400m

KIWIBANK (A1/A/AA) raised NZ$400m

bond offer.Westpac was arranger and joint lead

manager with BNZ and Kiwibank for the 2.155% September 20 2024s, which were priced last Friday within the 105bp–110bp guidance range at mid-swaps plus 107bp.

Kiwibank is a subsidiary of state-owned New Zealand Post, the New Zealand Superannuation Fund and Accident Compensation Corp.

It has the same ratings from Moody’s as New Zealand’s four major banks. Fitch has Kiwibank one notch higher than the majors’ AA– ratings, while S&P rates it two notches below the majors’ AA– ratings.

On August 13 Kiwi major ASB Bank (A1/

MTNs at mid-swaps plus 85bp.

COVERED BONDS

EUROS

MMB COVERED SHOWS PROGRESS, CRH PREPS COMEBACK

MY MONEY BANK

debut covered bond with a comfortable second trade, offering a rare, albeit slight, positive yield.

My Money Bank’s issue on Monday was its second euro benchmark covered bond. Its

The French issuer marketed a debut €500m trade in September last year but orders only reached €400m and the deal was


pulled. It got over the line at the second attempt one month later, but still only took orders of €550m-plus.

This time, leads ABN AMRO, BNP Paribas, Credit Agricole, DZ Bank, NordLB and Santander opened books for the €500m no-grow Obligations Foncieres with initial guidance of mid-swaps plus 30bp area.

The leads made clear early on that the deal was subscribed, with books reported above €500m, excluding JLMs, after one hour.

The spread was set directly at 27bp with books well above €800m.

“We’re really happy with the execution,” said a syndicate banker at one of the leads. “It’s not a straightforward name and it’s not a straightforward pool.

being adopted by a broader investor audience.”

Bankers said that a key driver of demand was that the deal will offer a positive yield, of around 0.10%.

Prior to My Money Bank’s deal, every euro benchmark covered bond sold after the market’s summer break had been priced with a negative yield. Austria’s Erste Group Bank priced a €500m 10-year earlier this month with a yield of -0.160%.

In addition, MMB’s issue offered an eye-catching pick-up versus more established French issuers, whose 2028-2029 covereds mostly trade in the low to mid-single digits.

Bankers said the increased demand for

assess the credit and set up lines.At the time of the debut, market

participants cited investor concerns over MMB’s business model - the Cerberus-owned bank specialises in debt consolidation loans backed by residential property.

Bankers said it was supportive that MMB’s

The 0.75% October 2025 issue was quoted at 15bp, mid, on Monday, having been priced at 21bp.

CRH COMEBACKMore French supply was added to the pipeline on Monday morning, with former big hitter CAISSE DE REFINANCEMENT DE L’HABITAT set for a reintroduction.

CRH said that it had mandated Credit Agricole, HSBC, LBBW, Natixis and Societe Generale to arrange a European roadshow starting on Wednesday.

A euro benchmark covered bond is

large programme of issuance planned for the next 18 months.

CRH was set up by the French

mortgage home loans granted by its

shareholders, the major French banks.CRH was a major issuer of covered bonds -

selling €12bn in 2011, for example - but ceased issuing in 2013 due to adverse impact of European regulation.

These issues have been cleared following the revision of Capital Requirement Regulation (CRR) earlier this year.

The issuer intends to become a key

more, aiming to place €3bn-€4bn of covered paper in the next 18 months.

“It’s good to see what is effectively a new covered bond issuer coming at the high-grade end of the spectrum,” said a syndicate banker.

HIGH-YIELD

UNITED STATES

WEWORK JUNK BOND HITS NEW POST-IPO FILING LOW

WEWORK’s only junk bond last Tuesday traded

public offering in mid-August, only to bounce back later in the week.

traded as low as 97.75 on Tuesday, a drop from a recent high of 105.375 on August 15

according to MarketAxess data.But by Thursday, the bond had bounced

back to change hands late that day at 101.125, after the Financial Times reported the company was considering curbing the voting power of founder Adam Neumann.

Investors have frowned on Neumann’s excessive voting rights, not to mention his wife Rebekah Neumann’s ability to pick her husband’s successor if he dies or is permanently disabled in the 10 years after the IPO.

Rebekah Neumann is a co-founder of the company and is currently WeWork’s chief

The price of the bond had been on a downward trajectory ever since news broke that the workspace provider had been considering a radical reduction of an initial US$47bn valuation on the IPO.

A valuation could come in as low as US$15bn-$18bn, according to Reuters, citing people familiar with the matter.

That is bad news for the cash-burning start-up, which needs funding to fuel its growth plans and has US$6bn of syndicated loans that are contingent on a successful IPO.

WeWork’s largest investor, SoftBank, has reportedly advised against the IPO, but

CNBC cited sources on Tuesday that the IPO roadshow would start as soon as Monday.

of US$1.5bn.

BUYSIDE PUSHES BACK ON DIVIDEND RECAP, PIK TOGGLE TRADE

A rare PIK toggle deal used for a dividend recap stood out in a crowd of largely higher-quality junk-rated credits last week during what was the busiest week so far this year for the asset class.

CORE & MAIN, a Missouri-based water and sewage products distributor, emerged with a

toggle to fund a dividend payment to

Such deals have been few and far between as investors have shown a preference for trades higher up the credit spectrum, and Core & Main saw some push back despite what has been a receptive market for issuers.

Leads were ultimately forced to adjust the cash coupon higher on the holdco deal to 8.625% from 8.375% on a reoffer price of 98.50, as well as downsizing the deal to US$300m from US$400m.

The PIK toggle structure allows interest payments to be capitalised if there is

PIK coupon in this case is 9.375%.“The reason they are doing PIK toggle

from the holdco is because the restricted payments basket limits them and they didn’t have capacity at the opco,” said an investor.

S&P revised its outlook on its B+ rating on the company to negative while also assigning a B- rating to the new PIK notes, noting that the new deal would increase leverage to near 7x.

“While we project Core & Main will grow

reduce debt, a slowdown in the company’s residential or commercial end markets, materials cost increases, or recessionary pressures could cause credit metrics to further weaken,” the ratings agency said.

Moody’s also downgraded Core & Main’s corporate family rating to B3 from B2 and assigned a Caa2 rating to the note, after calculating that debt to last 12 month Ebitda

up from 5.9 times.

Rice agreed to buy the waterworks business unit of HD Supply Holdings for US$2.5bn in 2017, later rebranding it as Core & Main.

While the near-term call option is not unusual for an equity sponsor looking to


BONDS HIGH-YIELD

exit in the near term, investors wanted to ensure there was some upside.

“If I am going to get a bond that is being called in year one, it caps my total return potential, so I have to have some price appreciation,” said a second buyside account.

“So, this deal had to hit all the boxes and there is not a lot of margin for error.”

JP Morgan acted as lead-left on the deal, with BAML, Citigroup, Barclays, Deutsche Bank, RBC, Goldman Sachs, BB&T, Credit Suisse, Natixis and Nomura also participating.

UBER TAKES SECOND RUN AT JUNK BOND MARKET

Ride-hailing company UBER TECHNOLOGIES seized its chance in a bumper week for issuance, bringing its second US dollar junk bond to fund its planned US$3.1bn acquisition of Middle East competitor Careem.

Strong name recognition no doubt helped the company gather a crowd of investors for the US$1.2bn eight-year non-call three as did a relatively high yield in a junk market that has been printing on occasion sub-4% deals.

pricing for size after sticking to talk of 7.5%

deal, rated B3/CCC+, to US$1.2bn from US$750m.

Even so, some investors remain wary of a company that continues to struggle to turn

buy into tried and tested sectors in a week that left the buyside spoilt for choice.

“I just don’t know how to value [Uber],” said an investor. “I would rather look at a food company that makes money and you know what will happen.”

Uber priced its junk bond debut in October when it issued a US$1.5bn eight-year non-call three at an 8% yield and a

At the time, the tech company drew a crowd of about 50 investors despite it being

BAML indices because it was a private

The private placement (under Section 4(a)(2) of the Securities Act) was unusual, but it allowed Uber to get to market quicker with

tight to its chest.

On this occasion, the company sold its bonds under a more standard 144A for life/Reg S format.

In May, Uber completed its widely expected, but less-than-successful initial public offering, which raised US$8.1bn after it was priced at the low end of the targeted range at US$45 per share.

The stock opened on Friday at US$34.25.The day before the bond pricing, the

company’s 8% 2026s closed at 104.00 or a yield of around 7% after a reaching a high this year of 107.75 on July 16, according to MarketAxess data.

The 7.5% 2023s last traded on Wednesday at 103.25 for a yield of 6.336% after reaching a high of 107.25 on June 20.

The deal was led by bookrunners Morgan Stanley, Bank of America Merrill Lynch, Goldman Sachs, Citigroup, Barclays, HSBC, SunTrust and RBC.

EUROPE/MIDDLE EAST/ AFRICA

PINEWOOD LANDS BOND, HIGH-YIELD BOND

Investor demand allowed PINEWOOD STUDIOS to accelerate the pricing of its high-yield bond, wrapping up the senior secured debt sale before the European Central Bank’s September 12 meeting.

on the road until Thursday.Demand allowed leads to upsize

Pinewood’s six-year non-call two bond to £550m from £500m and to print on Wednesday. The bond priced at 3.25% - the tight end of 3.25%-3.50% price talk.

High-yield investors were able to see through Brexit noise and concerns over the company’s increasing debt levels, a person familiar with the trade said.

“This is a business which is fairly well-insulated from Brexit, that has just signed two long-term contracts with Disney and

spread for investors that need to put cash to work,” he said.

Pinewood priced the note at a spread of 280bp over Gilts, which provides investors with an attractive spread versus low Triple B rated credits, the person said.

For example, M&S has a 4.75% June 2025 sterling bond that was seen bid around 250bp. The UK retailer also has a 3.25% July 2027 seen bid around 300bp.

“Quite honestly there isn’t a lot else out there that trades with a spread of 280bp,” the source said.

The debt sale was buoyed after Fitch gave the company’s pivot to real estate the

ALL US$ DENOMINATED HIGH-YIELD BONDS BOOKRUNNERS – 1/1/2019 TO DATE


1 JP Morgan 149 19,622.32 8.7

2 Citigroup 133 17,172.08 7.7

3 BAML 130 14,613.12 6.5

4 Morgan Stanley 113 14,385.80 6.4

5 Goldman Sachs 116 14,151.47 6.3

6 Credit Suisse 115 13,856.25 6.2

7 Deutsche Bank 118 11,646.64 5.2

8 Barclays 107 10,749.26 4.8

9 Wells Fargo 81 8,811.42 3.9

10 RBC 71 8,381.71 3.7

Total 383 224,328.30

Including US domestics, Euro, foreign, globals. Excluding equity-related

debt.

Source: Refinitiv SDC code: B5

ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS1/1/2019 TO DATE


1 Deutsche Bank 26 3,544.11 7.8

2 Goldman Sachs 27 3,337.10 7.3

3 JP Morgan 25 3,240.38 7.1

4 Citigroup 24 3,128.71 6.9

5 BNP Paribas 26 2,818.84 6.2

6 Barclays 20 2,799.42 6.1


8 HSBC 23 2,198.96 4.8

9 BAML 14 1,529.39 3.3

Total 92 45,670.30


Source: Refinitiv SDC code: B6

ALL ASIAN HIGH-YIELD ISSUERS1/1/2019 TO DATE


1 Credit Suisse 42 4,815.21 7.9

2 Haitong Securities 70 3,918.76 6.4

3 Deutsche Bank 48 3,451.25 5.7

4 Citic 48 3,150.50 5.2


6 JP Morgan 20 2,848.68 4.7

7 HSBC 42 2,796.95 4.6

8 UBS 40 2,779.70 4.6

9 Goldman Sachs 16 2,353.16 3.9

10 Guotai Junan Securities 57 2,207.52 3.6

Total 153 60,942.72


Source: Refinitiv SDC code: B06d

ALL EUROPEAN HIGH-YIELD ISSUERS1/1/2019 TO DATE


1 Citigroup 35 7,162.40 10.9

2 Deutsche Bank 26 4,456.60 6.8

3 Goldman Sachs 27 4,253.57 6.5

4 JP Morgan 28 4,103.84 6.2

5 Barclays 20 4,036.02 6.1

6 BNP Paribas 29 3,962.36 6.0


8 HSBC 24 3,053.21 4.6

9 Credit Suisse 19 2,472.40 3.7

10 BAML 15 2,437.73 3.7

Total 102 65,933.33


Source: Refinitiv SDC code: B06c


thumbs up by assigning the senior secured bond an investment-grade rating of BBB.

Pinewood leant heavily on its new-found property rental credentials to market the bond after signing two long-term rental

10-years respectively.

more akin to an investment-grade property company,” wrote analysts in a report published last Monday.

The ratings agency also put Pinewood’s long-term issuer rating of BB on positive watch.

In addition, investors got comfortable with the credit by looking at it from an LTV perspective, rather than a leverage perspective, the person familiar said.

One investor saw Pinewood’s LTV rising from 36% at the time of its last bond deal in 2017 to 43% pro forma for the current deal.

However, the investor said that with net debt of €475m and pro forma Ebitda of €55m for the last 12 months, he saw Pinewood’s net leverage at 8.6x.

Pinewood last visited the high-yield bond market in November 2017 when it priced a £250m December 2023 bond at 3.75%, according to IFR data. That deal was rated BB/BB+.

S&P gave the new bond a BB rating.The ratings agency also upgraded

Pinewood to BB- from B+ on the back of the new lease agreements but the ratings agency’s analysts said the company will end up with a “riskier capital structure” because debt to Ebitda should reach 10x, from 5.3x as of June 30.

note and also fund a £250m dividend recap to Pinewood’s shareholder, Aermont Capital. Credit Suisse (B&D), Goldman Sachs, Barclays, HSBC and NatWest Markets were bookrunners.

SALT REMOVES DIVIDEND BARRIER

Strong market conditions allowed Swiss telecoms operator SALT to have its cake and eat it on Tuesday, increasing the size of its

also removing the need to seek bondholders’ permission to pay a dividend.

Demand for Salt’s new deal meant the

non-call two-year bond tranche to an upsized €575m seven-year non-call three bond and a €500m seven-year term loan.

That increased the whole package to SFr1.45bn-equivalent, taking out the company’s entire existing bond stack, up from the planned SFr1.15bn-equivalent.

The new resized deal means that Salt can now go ahead with its planned €350m dividend recap without having to ask

holders of its 2022 bonds to loosen covenants – because it will now be fully

Research analysts.Salt’s outstanding euro 4.0% November

vis-à-vis issuer rights than did the Swiss franc 2022s, a source familiar with the offering said.

The 2027s allow leverage of 4.25x, while the Swiss franc 2022s only allowed 3.5x.

“Now that the [Swiss franc] bond will be extinguished [along with all the other bonds] with the increased proceeds of the new issuance/introduction of the 5NC2 offering, the ‘lowest common denominator’

capacity for the dividend distribution to be made,” the source said.

Spread Research analysts estimate that

the company could add around SFr150m to the already-planned SFr350m dividend recap without having to ask for bondholders’ consent.

“Actually, pro forma the transaction there will be nothing preventing the company from increasing net leverage to 4.25x in order to pay a dividend,” wrote analysts in a report published last Monday.

“Indeed, Salt will be allowed to make any payments as long as net leverage does not exceed 4.25x.”

One investor said he thought it was unlikely that Salt would push leverage in the near future.

“It was clear that the most restrictive bonds from a [restricted payments] perspective were the 2022s and that if these got taken out, the restriction would increase to the 4.25x test,” said the investor.

“The company’s target range is 3.5x–4.0x and they have spent the last few years deleveraging so they could take more out but I don’t think they will in the near term,” he said.

Salt had wanted to increase the restricted payments capacity on the 2022s in order to make a SFr350m dividend payment to NJJ, owned by French telecoms billionaire Xavier Neil.

The covenant change would have only increased Salt’s leverage to 3.9x – within the company’s 3.5x–4.0x target.

The consent solicitation was initially necessary because, while the dividend

recent towers sale, the 2022s restricted payments basket only allowed a SFr300m dividend payment, said the source familiar with the deal.

Salt’s additional 5NC2 tranche was increased in size by €50m from the minimum €200m announced last Monday. Indicative yields went out at 2.75–3% and the bond landed at 2.625%.

The euro bond replaced a proposed Swiss franc senior secured offering.

The €575m seven-year NC3 euro bond tranche was upsized from €400m and landed at a yield of 3.125%, compared with guidance of 3.25%–3.5%. And the €400m seven-year loan launched at 350bp over Euribor, compared with the earlier range of 350bp–375bp.

The original debt package included a minimum €400m seven-year Term Loan B and a minimum €400m seven-year euro or Swiss franc-denominated senior secured bond.

of up to SFr75m.The expected issue ratings are B+/B2.In May, the mobile network operator

agreed to sell its 90% stake in Salt TowerCo, comprising a portfolio of 2,800 towers and rooftops throughout Switzerland, for SFr800m to Cellnex.

Following the close of the tower sale in August and strong recent operational

capital structure and pursuing a dividend distribution.

INTRUM COMES BACK FOR EURO SECONDS

Demand for high-yield paper allowed Swedish debt collector INTRUM to land its second bond in as many months - and upsize it to boot.

Intrum (BB+/Ba2/BB) pushed out its maturity curve with a new eight-year non-call three bond. The bond priced at a €850m size on Tuesday, versus the previously announced €750m.

Final pricing was 3%, unchanged from initial price talk.

Intrum has 3.50% July 2026s, which were seen trading around 2.50% pre-announcement, according to Tradeweb.

Investors liked the deal despite it coming just under two months after Intrum priced a €800m 3.50% senior seven-year non-call three bond at the end of July.

Proceeds will be used to help fund the redemption of Intrum’s €760m 2.75% senior

upsized, additional proceeds will be used to partially repay the company’s drawn revolving credit facility, said leads.

Supportive conditions have been coaxing other issuers back for seconds this year.

INTERNATIONAL GAME TECHNOLOGY’s priced a €500m 8.5-year non-call 3.5 bond (Ba2/BB+) on Monday just months after the company sold a €700m seven-year non-call three senior secured note in June.

Intrum’s transaction is leverage-neutral and will extend the weighted average maturity of its capital structure, said the


STRUCTURED FINANCE

company. Net total leverage is 4.3x pro forma for the transaction.

Debt collection agencies like Intrum have

weighed down by non-performing loans and are under pressure from regulators to get those debts off their balance sheets.

“Non-performing loan stock on banks’ balance sheets has come down in recent

crisis levels,” said Intrum’s investor presentation.

European bank NPL stock increased from €400bn in 2007 to €1.2trn in 2013.

That level has reduced to €700bn as of the

on deleveraging - primarily via debt sales. Still, the level is almost twice the amount

company said.

STRUCTURED FINANCE

EMEA MBS

OPTIMUM CREDIT PRINTS SECOND-LIEN CASTELL

Pepper Group’s OPTIMUM CREDIT sold the third UK second-lien RMBS issue from its Castell programme on Thursday.

Lead-managed by Citigroup and NatWest Markets, CASTELL 2019-1 issued six tranches of rated notes linked to Sonia, topped by a £196.592m 1.72-year Triple A tranche. The bond came 1.6 times covered at 128bp over Sonia, from 130bp area IPTs.

seniors at Libor plus 95bp, and the second deal at 114bp in October last year.

Given an approximately 15bp basis between Sonia and Libor, the Sonia plus 128bp print is in line with the Libor spread last year.

The £19.725m Aa1/AA, £15.78m A1/A–, £6.575m Baa3/BBB and £5.26m Ba2/BBB– tranches came well covered and inside IPTs at 185bp, 220bp, 270bp and 350bp.

Below investment-grade, the £5.918m B3/BB tranche was priced at 450bp and the £11.835m unrated Class X came at 472bp.

The notes are backed by a £228.1m portfolio of prime and near-prime second-lien mortgages.

LEEDS RETURNS TO ALBION RMBS

LEEDS BUILDING SOCIETY

UK RMBS for four years. The originator will return to its Albion programme for ALBION

NO.4, offering a 2.8-year Triple A tranche paying a margin over Sonia.

A £250m portion of the tranche is expected to be publicly placed via joint leads Barclays, Citigroup and Lloyds. Barclays and Lloyds are joint arrangers.

A roadshow started on Thursday.

decided to retain that deal in full after the Funding for Lending scheme was announced.

A second deal in 2013 sold its senior trance at 85bp over Libor and the third deal in September 2015 sold its seniors at 70bp over Libor.

DEUTSCHE ANNOUNCES UK SHOPPING CENTRE CMBS

DEUTSCHE BANK has announced £114m UK CMBS DECO 2019-RAM, securitising a loan backed by regional shopping centre Intu Derby.

The deal offers a £100.8m Class A, rated Triple A by S&P and DBRS, and a £13.2m Class B rated Double A.

The underlying loan has a 4.8-year maturity and a one-year extension option. The going-in LTV is 42.7%, debt-yield is 16.1% and interest coverage ratio is 4.42 times.

The borrowers are Intu Properties and Cale Street Investments, a real estate investor backed by the Kuwait Investment Authority.

which now owns the shopping centre.

EMEA ABS

NEWDAY DEBUTS SOFR NOTES FROM UK CARDS VEHICLE

UK credit card lender NEWDAY last week

linked dollar bonds, pre-placing a senior tranche off its master trust.

NEWDAY FUNDING 2019-2 marks a quick return to market by NewDay, which sold its previous cards ABS in June. That deal was initially going to pre-place a senior dollar tranche too, although one linked to Libor.

But according to a source familiar with the deal, conversations at the time with US investors who were new to the originator took longer than expected. And because the

ABS with a fast-approaching call date, the decision was made to switch the dollars to sterling.

By the time of the 2019-2 ABS, at least one major investor was interested in SOFR and so the decision was made to structure the new deal with dollars linked to that rate instead.

The tranche, sized at US$205m and with a two-year average life, was pre-placed at 94bp over SOFR.

Three sterling mezzanine tranches were publicly offered. The £25.73m AA/AA (Fitch/DBRS) Class B, £37.76m A/A Class C and £47.11m BBB/BBBL Class D came at Sonia plus 190bp, 240bp and 300bp, respectively. They were 2.71, 2.77 and 2.91 times covered.

The master trust holds £1.58bn of NewDay’s own-brand credit cards to prime and near-prime customers. There are 1.47m accounts with an average balance of £1,079 and weighted average retail annual percentage rate of 40.5%.

Bank of America Merrill Lynch, BNP Paribas, Santander and Societe Generale were joint leads on the new issue.

UK AUTO ABS GLOBALDRIVE PRICED

Ford’s UK captive FCE BANK priced its GLOBALDRIVE UK 2019-A ABS on Wednesday.

The £350m 1.05-year senior tranche came at Sonia plus 54bp, after IPTs of mid 50s and guidance earlier on Wednesday at 53bp–54bp.

The £36.4m 2.43-year mezzanine tranche, rated Aa2/AAH, was priced at 150bp over Sonia. IPTs were low to mid-100s and guidance was 140bp–150bp.

BNP Paribas, Lloyds, NatWest and Santander were joint leads.

UK accounts bought 94% of the £350m Class A, and other Europe took 6%. Asset managers bought 46%, bank treasuries 43%

11%.On the £36.4m Class B, UK investors

bought 44% and other Europe 56%. The Class B book was 100% asset managers.

The originator’s previous UK deal was in May last year, when it sold £300m of 1.85-year Triple As at 50bp over one-month Libor and £31.2m of Double As at 94bp over.

The portfolio is static and holds 27,833 loans with an average net present value of £14,568 and seasoning of 5.26 months. The new/used split is 97.87%/2.13%.

FULL-STACK AUTONORIA 2019 UPSIZED AND PRICED

BNP PARIBAS PERSONAL FINANCE upsized its French auto loan ABS AUTONORIA 2019 last week and priced the deal well covered and

BNP Paribas was sole lead.

The deal sold its full capital stack and follows an Italian full-stack ABS called AutoFlorence from the same originator in July.

AutoNoria was upsized to €950m from €750m. Its €674.9m of Triple As (S&P and DBRS) were priced with a pre-set coupon of 70bp over one-month Euribor and came at a discount margin of 21bp, in from mid to high 20s IPTs. The tranche was 2.4 times covered.


The €85.5m AA–/AA Class B, the largest of the mezzanine tranches, was the least oversubscribed in the structure. In recent deals where a full capital structure has been on offer, mezzanine investors have often been drawn more to the lower-rated and higher-yielding Single As or Triple Bs.

The Class B came 1.4 times done at 85bp, after 90bp area IPTs.

The €57m of Single As and €33.25m of Double Bs were priced 4.5 times and 5.5 times covered at 120bp and 160bp. IPTs were 150bp area and 200bp area.

Below investment-grade, the €33.25m of Double Bs came 3.7 times covered at 270bp, from 300bp area IPTs, and the €19m B–/B tranche was 3.8 times subscribed at 370bp, from 400bp area IPTs.

The unrated Class G at the bottom of the structure was shown as “call desk” during the marketing process before being priced

The next full-stack eurozone auto ABS will be German trade E-Carat 10 from Opel Bank, which began a roadshow last week. BNP Paribas is lead manager for all tranches on that deal too, and is joined by UniCredit on the seniors.

BNP Paribas and Groupe PSA jointly

Vauxhall in 2017.

OPEL BANK ANNOUNCES GERMAN AUTO ABS E-CARAT 10

Germany’s OPEL BANK announced full cap-stack German auto loan ABS E-CARAT 10 last week. BNP Paribas is arranger and is lead manager on all tranches, with UniCredit joint lead on the Class A.

The portfolio revolves for one year. It totals €849.8m and holds 76,080 loans with an average balance of €11,170.

The new/used split is 63.26%/36.74%, and private/corporate customers make up 93.78%/6.22%. Seasoning is 13.84 months and the average remaining term is 31.59 months.

A roadshow in continental Europe and the UK started on Wednesday.

The most recent German auto ABS was BMW’s Bavarian Sky 5 on September 4. That deal built a book of just under €2bn for its €900m 0.89-year seniors before pricing them at an 18bp discount margin.

SABADELL BRINGING SPANISH CONSUMER LOANS

BANCO SABADELL

securitisation of Spanish consumer loans on Monday. SABADELL CONSUMO 1 will sell a full capital structure, backed by a hefty €1.2bn portfolio.

The top three tranches - rated Aa3/AAL, Baa3/A and Ba2/BBB - are being offered,

although there is a €500m protected order for the €875m Class A. The rest of the capital structure is being pre-placed.

with an average current balance of €6,969 and a maximum current balance of €94,362.

Seasoning is 1.8 years and the average term to maturity is 4.3 years. The weighted average interest rate is 7.46%.

Deutsche Bank is sole arranger, and is joint lead manager with Banco Sabadell. A roadshow began last week, visiting the Netherlands, Germany, Paris, London and Madrid. Pricing is expected this week.

OODLE DEBUTS USED AUTOS ABS

OODLE priced its debut securitisation last week, selling £335.7m bonds from DOWSON 2019-1.

The £229m senior tranche has a split rating of Aaa/AA. The 1.21-year notes came at Sonia plus 130bp, after IPTs of 125bp-130bp, and were 1.5 times covered.

The £75.8m A2/A-, £15.9m Baa3/BBB and £14.1m Ba3/BB+ mezzanine notes came at 240bp, 275bp and 380bp after IPTs of low to mid-200s, high 200s to 300bp area and high 300s. Coverage levels on the three tranches were 1.5 times, 3.5 times and 2.5 times.

The portfolio holds 41,298 hire purchase loans - there are no personal contract purchase loans or loans with balloon payments. The average outstanding balance is £8,559.

The weighted average APR is 16.83%, the average original term is 57.6 months and the average remaining term is 50.4 months.

The vehicles are used cars, except for a 0.7% portion of new cars.

Citigroup was sole lead manager.

EMEA CLO

ST PAUL’S CLO II RESET VIA GOLDMAN

INTERMEDIATE CAPITAL MANAGERS reset its €436.2m ST PAUL’S CLO II on Friday. Goldman Sachs was lead manager.

The €245m of Triple As (S&P/Fitch), €44.9m of Double As, €24.9m of Single As and €23.3m of Triple Bs came at three-month Euribor plus 75bp, 155bp, 225bp and 360bp. The €22.9m Double Bs and the €11.2m B–/B– tranche were priced below par at 99% and 96% with coupons of 682bp and 894bp.

There is a two-year reinvestment period.Also announced last week was a planned

CORDATUS VIII from CVC CREDIT

PARTNERS. Lead manager Deutsche Bank is

The two Triple A tranche, two Double A tranches and the Single A Class C are being offered.

There is no change to the reinvestment period, which ends in April 2021, or the legal maturity of April 2030. The non-call period runs for nine months.

US MBS

CMBS MARKETS BRACED FOR SEPTEMBER SUPPLY SURGE

An expected rise in the issuance of conduit CMBS in the coming months could put supply volumes ahead of last year’s pace but also weigh on spreads.

As many as 13 conduit deals totalling US$12.2bn could price in the typically busy months of September and October, according to Bank of America Merrill Lynch analysts.

If that all comes to the market, year-to-date conduit volumes would hit US$37.5bn through October, which is 18% higher than the issuance during the same period last year, the bank said.

So far this year, the market has been keeping pace with 2018, although annual conduit volumes have been dipping since 2015.

Market activity was more sluggish than usual at the start of this year because of market volatility in the fourth quarter of 2018, but conduit platforms are now running at full tilt again.

A drop in interest rates over the summer led to a jump in borrowers locking in commercial mortgages, prompting an increase in CMBS.

“September is always a busy month, but with falling interest rates a lot of loans have been locked in,” said one CMBS investor.

All this new paper could start to weigh on bond spreads, however.

“Pricing could be somewhat sloppy, especially at the top of the capital stack, with investors forcing spread differences among deals that are well liked and those that aren’t,” said BAML.

have been trading in the 90bp area over swaps, according to Trepp data.

Bonds in the mezzanine part of the structure should hold in better, BAML said. Trepp data shows investment-grade mezzanine bonds trading around 200bp.

“Investors are looking for spread product even with higher supply coming out, so I would expect mezz tranches to remain in check, if not tighten,” said the investor.

Investors have been comfortable with commercial real estate fundamentals to reach down into riskier bonds, which has pushed the CMBS credit curve near its

“We see no reason for that to change over the near to medium term,” said the bank.


STRUCTURED FINANCE

Three deals were being marketed with investors last week, with one, the US$1.06bn BANK 2019-BNK20, expected to be priced before the end of the week. The deal was being underwritten by Morgan Stanley, Wells Fargo, BAML, Academy Securities and Drexel Hamilton.

the last conduit deal in the market was priced on August 9, according to IFR data.

The US$800.4m CSAIL 2019-C17 was also announced on Thursday to be priced this week, while a US$1.06bn GSMS 2019-GC42 deal was also being pre-marketed.

FREDDIE PRICES NEW CMBS AS MULTIFAMILY LENDING SOARS

Government-sponsored mortgage agency FREDDIE MAC last week priced its second agency CMBS deal backed by multi-family property loans in the past two weeks, as the Mortgage Bankers Association predicts

record lending in the sector over the next two years.

The agency priced the US$1.359bn SPC Series K-097 deal on Tuesday, selling the senior A-1 tranche at 56bp over swaps.

Wells Fargo and Citigroup were joint bookrunners on the deal, which followed the pricing of a US$1.272bn Series K-736 deal in the previous week.

Multi-family lending across the market has soared recently, with the Mortgage Bankers’ Association predicting Monday that bankers will close a record US$359bn this year, 6% higher than last year.

The body expects lending to rise again in 2020, reaching US$390bn.

“The low-interest-rate environment, coupled with continuously strong demand for commercial and multi-family assets, has pushed property values higher and increased demand for mortgages,” said Jamie Woodwell, MBA’s vice president for commercial real estate research.

Agency lending in the sector has been a big part of that growth, which has not gone unnoticed.

The US Treasury recommended in its plans to reform Fannie Mae and Freddie Mac last week that Congress should seek to limit the footprint of the agencies in the multi-family market, and the types of loans that are eligible for a government guarantee.

It said that exemptions to the Federal Housing Finance Agency’s caps on lending had allowed the agency’s multi-family portfolio to expand, particularly through

“In part because of these broad exemptions, the caps have not been effective in limiting the GSEs’ multifamily footprint,” the report said.

“Capping the multi-family businesses could be implemented in several ways, but we think the easiest would be to enforce the caps that are in place and limit the

Where there’s bucks there’s Brass STRUCTURED FINANCE Yorkshire Building Society debuts dollar RMBS tranche

YORKSHIRE BUILDING SOCIETY priced a successful

debut dollar issue from its Brass UK RMBS

programme on Wednesday, which also sold a

sterling tranche that appeared to benefit from

better bank treasury participation.

The dollar piece from BRASS NO.8 - a

US$300m 1.92-year Class A1 - priced at 70bp

over three-month Libor, from 75bp area IPTs.

The notes were 2.5 times covered and went to 12

accounts.

The previous dollar floater from a UK issuer

was back in April when Nationwide’s Silverstone

2019-1 printed US$350m two-year paper at

57bp. That tranche - reported now bid in the

high 50s - went to 19 accounts.

Despite the unhelpful backdrop of Brexit

news, one of the leads pointed to the strong

subscription which could have made a print into

the high 60s possible.

But the originator’s priority was to establish

itself as a benchmark issuer in the US. Yorkshire

has had dollar issuance in mind for some years

and, with the end of the government’s Term

Funding Scheme, is now looking to increase the

size and frequency of issuance in the future.

After sounding out US securitisation investors

at the Las Vegas securitisation conference in

February, YBS then conducted a week-long non-

deal US roadshow in June.

The syndicate banker also highlighted a high

proportion of onshore accounts in the dollar

book. US accounts took 76% of the tranche and

UK ones 24%, while by type asset managers

made up 76% and bank treasuries 24%.

FULL STERLING BOOK

The £250m sterling tranche was priced three

times covered at 72bp over Sonia, in from mid

to high 70s IPTs. Given the Sonia/Libor basis of

around 15bp, the 72bp over Sonia is inside last

year’s Brass print of 60bp over three-month Libor.

And the new sterling tranche boasted a full

book of 27 investors, well up on the 20 who

participated in Brass No.7. It’s also one more

than for Nationwide’s much larger £750m

Silverstone sterling tranche in April.

The English Channel clearly presents a bigger

hurdle than the Atlantic Ocean for overseas

investors contemplating UK securitised risk, of

those 27 accounts in the new Brass issue, 84%

were from the UK, 14% from the US and just 2%

from other Europe.

Distribution statistics show an encouraging

rise in participation by bank treasuries. Last

year’s Brass RMBS saw asset managers taking

two thirds and bank treasuries one third, partly

because some bank treasuries held back from

non-STS deals.

There was no clear sign that anything had

changed with Nationwide’s Silverstone in April,

despite that deal becoming the UK’s first ever

STS securitisation. Its sterling tranche registered

a 69%/31% split in favour of asset managers.

But bank treasuries do now appear to have

returned for YBS’s new (and STS-compliant) issue,

and the distribution was broadly even, with asset

managers buying 52% and bank treasuries 48%.

A similar picture was observed for FCE Bank’s

UK auto ABS Globaldrive this week, where asset

managers took 46% of the Triple As, against

43% bank treasuries (and 11% central banks and

official institutions).

And one week earlier the 18 investors in

Aldermore Bank’s Oak No.3 RMBS were split

63%/37% in favour of bank treasuries.

CASH STILL FLOWING

Syndicate officials stress that the asset manager

bid has not fallen away, and that one or two large

orders from asset managers can drive pricing in a

way that bank treasuries - who often cap orders to

a certain percentage of a tranche - rarely do.

“There’s plenty of cash still flowing around

different funds,” said the syndicate banker. “But

I’ve definitely observed the return of some bank

treasuries.”

Longer term, issuers hope that a stronger

bank bid could lead to tighter pricing, but

syndicates aren’t yet in a position to try turning

the screw.

“You are competing for investor resources,”

the syndicate banker said. “We are not going to

squeeze every last basis point because investors

could just decide to put pens down and look at

the other six or seven deals on the screens.”

Brass No.8 was lead managed by Bank of America Merrill Lynch, BNP Paribas, Citigroup

and Lloyds. It was swiftly replaced in the pipeline

by Albion No.4 a prime UK RMBS from Leeds

Building Society. A non-conforming RMBS, non-

captive auto ABS and non-prime credit card deal

were the other UK deals marketing this week.

Chris Moore


NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 13/9/2019

Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type

AEPTC 19-1 US$117.641 3.05 2.055 Goldman Sachs/Citigroup Aaa/AAA/NR ABS

AEPTC 19-1 US$117.641 7.87 2.293 Goldman Sachs/Citigroup Aaa/AAA/NR ABS

ALLYA 2019-3 US$365.75 1.01 2.071 Barclays/BAML/RBC CM Aaa/AAA/NR ABS



AMCAR 2019-3 US$158 0.19 2.179 Citigroup/Deutsche Bank/Mizuho/NatWest Markets NR/A-/NR ABS

AMCAR 2019-3 US$200.94 0.93 2.170 Citigroup/Deutsche Bank/Mizuho/NatWest Markets NR/AAA/NR ABS

AMCAR 2019-3 US$50 0.93 L+30bp Citigroup/Deutsche Bank/Mizuho/NatWest Markets NR/AAA/NR ABS

AMCAR 2019-3 US$172.61 2.12 2.060 Citigroup/Deutsche Bank/Mizuho/NatWest Markets NR/AAA/NR ABS

AMCAR 2019-3 US$63.12 2.92 2.130 Citigroup/Deutsche Bank/Mizuho/NatWest Markets NR/AA/NR ABS

AMCAR 2019-3 US$78.35 3.50 2.320 Citigroup/Deutsche Bank/Mizuho/NatWest Markets NR/A/NR ABS

AMCAR 2019-3 US$77.04 3.98 2.580 Citigroup/Deutsche Bank/Mizuho/NatWest Markets NR/BBB/NR ABS

Avant Loans Funding Trust 2019-B US$250.136 0.69 L +77bp CreditSuisse/JP Morgan NR/NR/NR ABS



BANK 2019-BNK20 US$26.6 2.92 SONIA+42bp Morgan Stanley/BAML/WFS NR/AAA/AAA CMBS


BANK 2019-BNK20 US$350 9.79 SONIA+90bp Morgan Stanley/BAML/WFS NR/AAA/AAA CMBS



BANK 2019-BNK20 US$45.555 9.96 SONIA+130bp Morgan Stanley/BAML/WFS NR/AA/AA- CMBS

BANK 2019-BNK20 US$45.554 9.97 SONIA+160bp Morgan Stanley/BAML/WFS NR/A-/A- CMBS

Brass No 8 US$300 1.92 1mL+70bp BAML/Lloyds/BNP Paribas/Citigroup Aaa/AAA/NR RMBS

Brass No 8 £250 2.94 SONIA+72bp BAML/Lloyds/BNP Paribas/Citigroup Aaa/AAA/NR RMBS

Castell 2019-1 £6.575 3.1 SONIA+270bp Citi/Natwest Markets Baa3/NR/BBB RMBS

Castell 2019-1 £5.26 3.1 SONIA+350bp Citigroup/Natwest Markets Ba2/NR/BBB- RMBS

Castell 2019-1 £5.918 3.1 SONIA+450bp Citigroup/Natwest Markets B3/NR/BB RMBS

COPAR 2019-2 US$276.45 0.25 2.132 JP Morgan/Citigroup/Wells Fargo NR/A1+/F-1+ ABS

COPAR 2019-2 US$469.3 1.13 2.060 JP Morgan/Citigroup/Wells Fargo NR/AAA/AAA ABS



DRIVE 2019-4 US$180.8 0.10 2.195 Societe Generale/Citigroup/Deutsche Bank P1/A1+/NR ABS

DRIVE 2019-4 US$276 0.60 2.320 Societe Generale/Citigroup/Deutsche Bank Aaa/AAA/NR ABS

DRIVE 2019-4 US$75 0.60 L+35bp Societe Generale/Citigroup/Deutsche Bank Aaa/AAA/NR ABS

DRIVE 2019-4 US$150.25 1.30 2.160 Societe Generale/Citigroup/Deutsche Bank Aaa/AAA/NR ABS

DRIVE 2019-4 US$140.4 1.90 2.230 Societe Generale/Citigroup/Deutsche Bank Aa1/AA/NR ABS

DRIVE 2019-4 US$198.78 2.60 2.510 Societe Generale/Citigroup/Deutsche Bank A1/A/NR ABS

DRIVE 2019-4 US$175.87 3.40 2.700 Societe Generale/Citigroup/Deutsche Bank Baa3/BBB/NR ABS

FMMSR 2019-GT2 US$214.286 5.03 4.230 Credit Suisse NR/NR/NR RMBS

FMMSR 2019-GT2 US$35.714 5.03 4.720 Credit Suisse NR/NR/NR RMBS

FREMF 2019 K-F67 US$718.533 9.57 1mL+52bp BAML/Goldman Sachs NR/NR/NR CMBS

FREMF 2019 K-097 US$114.372 7.01 2.160 Wells Fargo/Citigroup Aaa/NR/NR CMBS

FREMF 2019 K-097 US$1,083.053 9.80 2.508 Wells Fargo/Citigroup Aaa/NR/NR CMBS

FREMF 2019 K-097 US$66.115 9,84 2.216 Wells Fargo/Citigroup Aaa/NR/NR CMBS

FREMF 2019 K-097 US$58.77 9.84 3.764 Wells Fargo/Citigroup Baa1/NR/NR CMBS

FREMF 2019 K-097 US$36.73 9.85 3.764 Wells Fargo/Citigroup Baa3/NR/NR CMBS

GLDR 2019-UKA £350 1.05 SONIA+54bp Lloyds/BNP Paribas/Natwest Markets/Santander Aaa/NR/NR ABS

GLDR 2019-UKA £36.4 2.43 SONIA+150bp Lloyds/BNP Paribas/Natwest Markets/Santander Aa2/NR/NR ABS

GSMS 2019-SMP US$61.904 1.89/4.89 L+115bp Goldman Sachs NR/AAA/NR CMBS

GSMS 2019-SMP US$21.524 1.89/4.89 L+150bp Goldman Sachs NR/AA-/NR CMBS

GSMS 2019-SMP US$16.000 1.89/4.89 L+170bp Goldman Sachs NR/A-/NR CMBS

GSMS 2019-SMP US$21.143 1.89/4.89 L+195bp Goldman Sachs NR/BBB-/NR CMBS

GSMS 2019-SMP US$33.333 1.89/4.89 L+260bp Goldman Sachs NR/BB-/NR CMBS

GSMS 2019-SMP US$29.524 1.89/4.89 L+310bp Goldman Sachs NR/B-/NR CMBS

GSMS 2019-SMP US$24.479 1.89/4.89 L+425bp Goldman Sachs NR/NR/NR CMBS

HANA 2019-1 US$56.274 3.94 1mL+200bp Guggenheim Securities NR/NR/NR ABS

HONK 2019-2 US$275 6.8 3.981 Barclays NR/BBB/NR ABS

HPEFS Equipment Trust 2019-1 US$243.726 0.35 n/a Goldman Sachs/BAML/Citigroup/JP Morgan NR/A-1/NR ABS

HPEFS Equipment Trust 2019-1 US$275.643 1.15 n/a Goldman Sachs/BAML/Citigroup/JP Morgan NR/AAA/NR ABS


STRUCTURED FINANCE

exceptions allowed,” said Bank of America Merrill Lynch analysts on Monday.

Freddie Mac’s issuance of multi-family

According to Bank of America Merrill Lynch data, Freddie K-Series issuance jumped from US$21.325bn in 2014 to US$61.471bn last year.

And issuance is ahead of last year’s pace, with US$37.797bn sold in the year-to-date prior to last week compared with US$35.24bn in the same period last year.

Demand for this kind of paper has remained strong in recent weeks, according to a note from Brean Capital on Monday.

most structured products sectors, we continue to see very good demand for (agency CMBS) as investors look to pick up incremental yield versus Treasuries and agency debentures and carry, roll-down and convexity versus agency MBS,” wrote Scott

US ABS

ABS MARKET KICKS INTO GEAR WITH MORE THAN US$10bn PRICED

cylinders last week, with 16 borrowers

pricing over US$10bn of new deals, making it the second busiest week of the year so far.

Most of the action happened on a busy Tuesday, when 12 deals were priced.

After a quiet period over August, investors were eager to put cash to work, said Evan

That meant most of last week’s deals were well received and able to come 5bp or so inside guidance.

An increase in the 10-year Treasury yield from 1.55% at the end of the previous week to 1.79% on Thursday also helped bring credit spreads in.

“With the back-up in rates, folks are more willing to accept a little less spread in the new issue market,” said Shay. “There has

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 13/9/2019 (CONTINUED)

Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type

HPEFS Equipment Trust 2019-1 US$100.003 1.90 n/a Goldman Sachs/BAML/Citigroup/JP Morgan NR/AAA/NR ABS

HPEFS Equipment Trust 2019-1 US$53.262 2.24 n/a Goldman Sachs/BAML/Citigroup/JP Morgan NR/AA/NR ABS

HPEFS Equipment Trust 2019-1 US$56.040 2.61 n/a Goldman Sachs/BAML/Citigroup/JP Morgan NR/A/NR ABS

HPEFS Equipment Trust 2019-1 US$33.491 2.83 n/a Goldman Sachs/BAML/Citigroup/JP Morgan NR/BBB/NR ABS

HPA 2019-2 US$154.974 7.63 2.703 Citigroup/Morgan Stanley/Deutsche Bank Aaa/NR/NR ABS

HPA 2019-2 US$44.889 7.63 2.922 Citigroup/Morgan Stanley/Deutsche Bank Aa2/NR/NR ABS

HPA 2019-2 US$19.239 7.63 3.021 Citigroup/Morgan Stanley/Deutsche Bank A2/NR/NR ABS

HPA 2019-2 US$29.926 7.63 3.121 Citigroup/Morgan Stanley/Deutsche Bank Baa2/NR/NR ABS

HPA 2019-2 US$42.751 7.63 3.320 Citigroup/Morgan Stanley/Deutsche Bank NR/NR/NR ABS

HPA 2019-2 US$28.858 7.63 3.866 Citigroup/Morgan Stanley/Deutsche Bank NR/NR/NR ABS

MMAF 2019-B US$157 0.32 2.125 JP Morgan/Wells Fargo NR/NR/NR ABS

MMAF 2019-B US$277 1.42 2.070 JP Morgan/Wells Fargo Aaa/NR/AAA ABS



MMAF 2019-B US$90.05 6.06 2.290 JP Morgan/Wells Fargo Aaa/NR/AAA ABS

Newday 2019-2 US$205.2 2 SONIA+94bp BAML/BNP Paribas/Santander/Societe Generale NR/NR/AAA ABS

Newday 2019-2 £25.73 3.2 SONIA+190bp BAML/BNP Paribas/Santander/Societe Generale NR/NR/AA ABS

Newday 2019-2 £37.76 3.2 SONIA+240bp BAML/BNP Paribas/Santander/Societe Generale NR/NR/A ABS

Newday 2019-2 £47.11 3.2 SONIA+300bp BAML/BNP Paribas/Santander/Societe Generale NR/NR/BBB ABS

NRMLT 2019-NQM4 US$262.679 2.75 2.492 Nomura/BAML/Citigroup/Credit Suisse/Deutsche Bank NR/NR/AAA RMBS

NRMLT 2019-NQM4 US$24.767 2.75 2.644 Nomura/BAML/Citigroup/Credit Suisse/Deutsche Bank NR/NR/AA RMBS

NRMLT 2019-NQM4 US$34.167 2.75 2.797 Nomura/BAML/Citigroup/Credit Suisse/Deutsche Bank NR/NR/A RMBS

NRMLT 2019-NQM4 US$13.739 5.11 2.986 Nomura/BAML/Citigroup/Credit Suisse/Deutsche Bank NR/NR/BBB RMBS

NRMLT 2019-NQM4 US$12.654 5.11 3.737 Nomura/BAML/Citigroup/Credit Suisse/Deutsche Bank NR/NR/BB RMBS

NRMLT 2019-NQM4 US$6.688 5.11 5.064 Nomura/BAML/Citigroup/Credit Suisse/Deutsche Bank NR/NR/B RMBS

NRART 2019-T3 US$333.985 2.99 2.511 Credit Suisse/Barclays/JP Morgan NR/AAA/NR RMBS

NRART 2019-T3 US$12.703 2.99 2.660 Credit Suisse/Barclays/JP Morgan NR/AA/NR RMBS

NRART 2019-T3 US$13.527 2.99 2.709 Credit Suisse/Barclays/JP Morgan NR/A/NR RMBS

NRART 2019-T3 US$35.184 2.99 3.055 Credit Suisse/Barclays/JP Morgan NR/BBB/NR RMBS

NRART 2019-T3 US$4.601 2.99 4.433 Credit Suisse/Barclays/JP Morgan NR/BB/NR RMBS

SBATOW Corp 2019-1 US$1,165 5.3 2.836 Barclays/Citigroup/DB/JPM/Mizuho/TD Securities/Wells Fargo A2/NR/A ABS

SKOPOS 2019-1 US$73.19 0.57 2.900 Citigroup NR/NR/NR ABS





WFMBS 2019-3 US$334.96 4.98 3.500 Wells Fargo Aaa/NR/NR RMBS



WFMBS 2019-3 US$54.295 5.00 3.500 Wells Fargo Aa1/NR/NR RMBS

WFNMT 2019-C US$600 2.99 2.210 Wells Fargo/BAML/MUFJ/Scotia Capital NR/AAA/AAA ABS

WFNMT 2019-C US$53.425 2.99 2.710 Wells Fargo/BAML/MUFJ/Scotia Capital NR/AA/AA ABS


been minimal issuance since August and people need to keep investing.”

Investors continue to show interest in consumer-related paper with that sector contributing a heavy chunk issuance, including three prime auto loan deals (ALLY

FINANCIAL, CAPITAL ONE and BMW), as well as three sub-prime auto loans (GENERAL MOTORS, SANTANDER USA and SKOPOS FINANCIAL).

That is despite recent data points indicating that the economy is at or near the peak of the cycle, according to Wells Fargo researchers.

Data points such as retail sales, nonfarm

appear to be peaking or just past peak, they said.But, so far, ABS investors seem undeterred,

said Shay.“If that were the case, you might see less

demand for subordinate tranches of asset classes like autos and student loans. So far we just haven’t really seen that,” he said. “In general, the consumer remains in good shape with sub 4% unemployment, and the underlying assets are performing in line with expectations.”

JP Morgan analysts did caution at the start

coming to the market.“While ABS structures are robust, the

possibility/perception of over-leveraged lower-tiered sponsors gorging on low-cost bond funding should increase idiosyncratic seller/servicer risks and tiering as the economy, sooner or later, dips into a recession,” they wrote.

“Off-the-run ABS sponsors should face greater resistance to spread tightening, with yields falling and risks/volatility escalating.”

This week, around US$6bn is in the pipeline.

They include a new non-prime auto loan deal from online car retailer CARVANA, which was new to the market this year but is looking to price its third deal - and at US$583.2m, its biggest yet.

Credit Suisse, Deutsche Bank, and Wells Fargo have been mandated as active bookrunners.

And another new face is expected in the whole business securitisation market in the shape of SERVPRO, a Blackstone-owned property cleaning and reconstruction company (see separate story).

PROPERTY RECONSTRUCTION FIRM SERVPRO SHOPS DEBUT ABS

SERVPRO, a Blackstone-owned property cleaning and reconstruction company, is in the market with a debut US$480m whole business securitisation as more frequent extreme weather events drive demand for those services.

The property services company has mandated Barclays as sole structuring advisor and lead bookrunner and Goldman Sachs and RBC Capital Markets as joint bookrunners on the upcoming deal, Servpro Master Issuer Series 2019-1, which is expected to be priced this week.

which has BBB-/BBB ratings from S&P and Kroll and carries a 6.8-year weighted average life.

business models to be brought to the whole business securitisation market to lower their cost of funding.

Servpro, a 100% franchised business, provides restoration services to consumers and property

mould and storm-related events.Demand for these services is increasing as

the housing inventory grows, property values increase and as severe weather events occur on a more frequent basis, said Kroll in a pre-sale report.

The pre-sale report described the property reconstruction and restoration sector as a US$35bn market that is expected to grow 4% per annum over the next several years, citing industry research.

Kroll described the company as a market leader with annual sales of approximately US$2.5bn.

Sales grew at a compound annual growth rate of 13% from 1998 to 2018, according to the pre-sale, and 95% of system sales are covered by insurance claim payments.

securitisation structure would stand at 5.8x - inside the low 5x-mid 6x range seen on recent deals.

US CLO

CLO MARKET DIVIDED ON FED-APPROVED LIBOR ALTERNATIVE LANGUAGE

A debate has been brewing in the US CLO market as some investors and managers push back on regulatory recommendations for how best to transition from a benchmark trillions of dollars of investments rely on.

Wells Fargo and PGIM are pushing managers to adopt language recommended by a Federal Reserve-backed group into new CLO documents that lays out steps to replace Libor as a requirement for their investment in the largest and most senior

sources familiar with the discussions.Some junior investors and managers have

balked at the requirement and sought out other Triple A buyers that do not require the provision, the sources said. There is a concern that this is a “cart-before-the-horse” request, with some CLO participants frustrated that the funds are being pushed to transition before the loan market does.

Tensions have been rising since Andrew

Financial Conduct Authority, in 2017 said Libor needed to be phased out by the end of 2021.

The announcement has thrown documents for both the US$1.2trn US leveraged loan market and the US$641bn US CLO market into question, with companies and managers jockeying to ensure their positions are not altered by a change in rate.

The loan market has been slow to adapt the recommendation of the Secured Overnight Financing Rate (SOFR), a broad measure of the cost of borrowing cash overnight collateralised by US Treasury securities, because there are no SOFR term options like one-month and three-month Libor, to which companies peg their interest payments.

“Many bankers believe it is less risky to make a Libor loan than a SOFR loan, because Libor has good characteristics, is better known, is more easily hedged, and term SOFR is still in the future,” said Adam Schneider, a partner at

practice and chair of the Fed’s Alternative Reference Rates Committee (ARRC) new operations working group.

“That needs to change. Term SOFR is likely to be created, but waiting is a mistake. Banks need to build out a full suite of non-Libor products based on overnight SOFR now.”

HARD-WIRED APPROACHARRC in May released recommended securitisation fall-back language that predetermines the transition away from Libor, known as a ”hard-wired approach”.

When a trigger event has been determined, ARRC recommends a move to a forward-looking term SOFR rate plus a spread adjustment. If that option does not exist, then the benchmark would move to compounded SOFR plus a spread adjustment. It would then continue down a pre-determined set of alternatives until there is a viable option.

“Our goal on fall-backs is to hear what works best in the market and ensure borrowers and lenders end up in a fair place,” Tom Wipf, ARRC chair and vice-chairman of institutional

ALL EUROMARKET CDOs BOOKRUNNERS: 1/1/2019 TO DATE



2 Credit Suisse 6 3,122.08 10.5

3 Citigroup 6 2,805.77 9.5



6 BAML 4 1,826.59 6.2

7 Jefferies 4 1,807.32 6.1

8 BNP Paribas 4 1,802.59 6.1

9 Barclays 4 1,527.80 5.2

10 Greensledge CM 2 655.79 2.2

Total 68 29,598.21

Excludes global and domestic.



STRUCTURED FINANCE

securities at Morgan Stanley, said in an interview.

“We always tried to look at it from a risk management perspective. Currently continuing to use Libor without any of these tools are adding to risk we already have.”

Wells Fargo supported a hard-wired approach in a November 26 letter to ARRC about loan fall-back language. The bank, however, noted in a separate February 5 letter that the consultation does not address what would happen if the underlying assets transition to a replacement not contemplated by the proposed waterfall for securitisation liabilities, which could magnify

If there is no term SOFR or compounded

approach, which allows an agreement to be reworked to replace Libor with an alternative benchmark, while CLOs continue down the predetermined replacement rate waterfall.

If loans and the funds are pegged to different rates, CLO equity holders, who own the riskiest portion of the fund and receive distributions from the interest left over after all debt-holders are paid, may receive lower payments, two of the sources said. To adjust the rate would be likely to require a 100% unanimous vote of CLO investors, which

“Deals that have uncertainty over the base rate that don’t have ARRC [language] will suffer from some liquidity issues as investors need to understand the nuances of what a manager may or may not do because of the opaqueness of not having ARRC language,” said Edwin Wilches, a portfolio manager at PGIM where he invests in the debt of CLOs.

“Not having ARRC [language], a manager can do what they think they should do, and that can cause some issues and concerns about what the rate is going to be.”

He does not agree with the assertion that managers or investors are choosing to work with other Triple A investors instead of PGIM due to ARRC language.

“Everyone pushed back [on the ARRC language] in the beginning, but the winds have changed since the start of September,” Wilches said. “Managers are starting to feel better about the issue. I don’t think it will have a 100% adoption rate anytime soon, but I do strongly believe we will get there as a market.”

A Wells Fargo spokesperson declined to comment.

As the US CLO market begins to ramp up after the US summer holiday, it is unclear if or how many additional Triple A investors will adopt the posture of Wells Fargo and PGIM. But participants agree that as it gets closer to 2021, CLO documents will need to adapt.

“We have moved into a phase where people are thinking about how do we deal with the permanent cessation of Libor,” Wipf said. “These discussions are technical,

but probably a good place to get into the weeds when we have a little more than two years on the clock” (until Libor goes away).

ASIA-PACIFIC MBS

MYSTATE SELLS PRIME RMBS

Tasmania’s MYSTATE BANK issued a no-grow A$400m (US$274m) prime RMBS offering last Tuesday via CONQUEST 2019-2 TRUST.

NAB was aranger and joint lead manager with Macquarie and Westpac.

The A$368m of Class A1 notes with a 3.05-year weighted-average life were priced at the tight end of initial one-month BBSW plus 105bp–108bp area guidance.

This compares with the 98bp margin for the Class A notes of the Bank of Queensland-originated A$1bn Series 2019-1 REDS Trust RMBS on August 22.

to access the public RMBS market this year, following BoQ, AMP and Bendigo and Adelaide, both on June 7, and Members Equity on May 30.

The Conquest 2019 A$8m of Class A2, A$8m of Class AB, A$6.4m of Class B, A$4.2m of Class C and A$1.8m of Class D notes, all with 5.43-year WALs, were priced at the tight ends of their respective 150bp–160bp, 165bp–175bp, 185bp–195bp, 255bp–265bp and 315bp–325bp guidance ranges.

The A$1.6m of Class E and A$2m of Class F notes, also with 5.43-year WALs, came in line with initial price talk at one-month BBSW plus 470bp and 600bp.

MyState Bank previously issued a no-grow A$400m prime RMBS offering in March last year, ConQuest 2018-1 Trust.

MACQUARIE READIES PUMA RMBS

MACQUARIE has released initial price guidance at one-month BBSW plus high 90s for the A$500m of Class A notes in its PUMA SERIES

2019-1 prime RMBS issue, expected to be launched and priced this week.

ANZ, CBA, Macquarie, NAB and Westpac are joint lead managers.

FIRSTMAC PLANS PRIME RMBS

Non-bank lender FIRSTMAC has mandated JP Morgan and Westpac to market a potential Australian dollar prime RMBS offering.

Regular issuer Firstmac previously sold the A$1.4bn Firstmac Mortgage Funding Trust No. 4 Series 2-2019 RMBS in May.

LA TROBE MARKETS NINTH RMBS

Non-bank lender LA TROBE FINANCIAL has mandated CBA, HSBC, Macquarie, NAB, Natixis Asia, United Overseas Bank and Westpac to

arrange domestic and offshore investor meetings commencing September 19 for a potential RMBS offering.

La Trobe issued its eighth non-conforming RMBS in April, the A$750m La Trobe Financial Capital Markets Trust 2019-1.

ASIA-PACIFIC ABS

WINGATE SETS DEBUT ABS GUIDANCE

Initial guidance has been released for the NOW TRUST 2019-1 AS200m securitisation of personal loans originated by WINGATE

CONSUMER FINANCE.NAB is arranging the non-bank personal loan

specialist’s debut ABS offering, expected to be launched and priced this week.

For the A$143m of Class A notes with a 1.5-year WAL guidance is one-month BBSW plus 125bp–135bp area.

For the A$16.6m of Class B, A$12.8m of Class C, A$5.2m of Class D, A$13.8m of Class E and A$4.6m of Class F notes, all with 2.2-year WALs, price talk is one-month BBSW plus 200bp area, mid 200bp area, mid/low 300bp area, 500bp area and mid/high 600bp area.

The transaction is completed by A$4m of retained Class G notes with a 3.3-year WAL.

ECLIPX SETS ABS GUIDANCE

ECLIPX GROUP, through its subsidiary Eclipx Fleet Holdings (ECX), has released initial guidance for the no-grow NZ$250m (US$161m) FP IGNITION SERIES 2019-1 ABS offering, expected to be launched and priced this week.

ANZ and Westpac are joint lead managers.Price talk for the NZ$163m of Class A

notes with a 1.4-year weighted-average-life is one-month BKBM plus 100bp–110bp.

For the NZ$12.75m of Class B, NZ$21.75m of Class C, NZ$15m of Class D and NZ$17.5m of Class E notes, all with 1.89-year WALs, guidance is one-month BKBM plus 200bp area, 250bp area, 350bp area and 550bp area.

Price talk for NZ$5m Class F notes with a 2.58-year WAL is one-month BKBM plus 750bp area.

The transaction is completed by retained NZ$2.5m of Class G and NZ$12.5m originator notes.

The Class B, C and F notes have been 100% pre-placed while the Class D and E notes are 80% pre-placed.

Respective credit support for the Class A to G notes is 34.8%, 29.7%, 21%, 15%, 8%, 6% and 5%.

issued a NZ$224.4m auto loan trade through FP Ignition Series 2017-B Trust in June 2017.


SSAR

US DOLLARS

Sep 10 2019 IADB US$600m Sep 16 2022 SOFR+26 100 SOFR+26 -

Sep 10 2019 KfW green US$2bn Sep 14 2029 1.75 99.9 MS+21 / T+9.65 1.761

Sep 10 2019 OKB US$1.5bn Sep 17 2022 1.625 99.933 MS+14 / T+8.75 1.648

Sep 11 2019 ADB US$2bn Sep 19 2029 1.75 99.317 MS+22 / T+9.9 1.825

Sep 11 2019 AfDB US$2bn Sep 16 2022 1.625 99.843 MS+13 / T+8.75 1.679

EUROS

Sep 10 2019 Land Hessen €500m Sep 10 2029 0 102.192 MS-6 / B+35.4 -0.217

Sep 11 2019 FADE €1bn Sep 17 2024 0.05 100.785 BONOs+15 -0.107

Sep 12 2019 KfW €1bn incr

(€6bn)

May 25 2021 0 101.086 MS-14 / B+17.6 /

OAT+11.4

-0.641

STERLING

Sep 10 2019 EIB £500m incr

(£1.5bn)

Jun 29 2023 SONIA+35 100.297 SONIA+27 -

Sep 10 2019 UK DMO £4bn incr

(£8.75bn)

Oct 22 2054 1.625 115.557 G’52+0.5 1.091

Sep 11 2019 ADB £300m incr

(£1bn)

Mar 19 2024 SONIA+29 100 SONIA+29 -

Sep 12 2019 World Bank £300m incr

(£800m)

Dec 13 2024 0.875 100.267 G+36 0.821

NON CORE

Sep 10 2019 ADB Green A$150m Mar 18 2030 1.6 99.568 ASW+43 /

ACGB+54.9

1.645

Sep 10 2018 KfW A$100m incr

(A$2.1bn)

May 19 2021 6.25 108.386 ASW+32 /

ACGB+29

1.167

Sep 11 2019 Housing NZ NZ$425m incr

(NZ$675m)

Jun 12 2025 3.36 110.780 MS+28 /

NZGB+42.3

1.398

Sep 11 2019 Housing NZ NZ$175m incr

(NZ$425m)

Oct 18 2028 3.42 113.784 MS+44 /

NZGB+53.6

1.771

Sep 12 2019 KfW Rmb500m Sep 23 2022 2.5 100 - 2.5

Sep 12 2019 World Bank A$500m incr

(A$2.6bn

Feb 27 2024 2.2 103.872 ASW+37 /

ACGB+41.3

1.299

Sep 12 2019 World Bank SDB sustainable C$300m incr

(C$1.8bn)

Jul 26 2024 1.8 99.999 MS+3 / CGB+34 1.8

Sep 12 2019 World Bank SDB sustainable C$250m Sep 20 2029 1.95 99.885 MS+15 / CGB+52.3 1.966

CORPORATES

US DOLLARS

Sep 9 2019 AEP Transmission US$350m Sep 15 2049 3.15 99.269 T+110 3.188

Sep 9 2019 Air Lease US$600m Jan 15 2023 2.25 99.286 T+95 2.475

Sep 9 2019 Air Lease US$500m Oct 1 2029 3.25 98.883 T+175 3.382

Sep 9 2019 Baltimore Gas And Electric US$400m Sep 15 2049 3.2 99.122 T+115 3.246

Sep 9 2019 Cleco Corporate Holdings US$300m Sep 11 2029 3.375 99.941 T+175 3.382

Sep 9 2019 Duke Energy US$1bn PerpNC5 4.875 100 T+338.8 4.875

Sep 9 2019 Fortune Brands Home &

Security

US$700m Sep 15 2029 3.25 99.83 T+165 3.27

Sep 9 2019 John Deere Capital US$400m Jun 13 2022 1.95 99.871 T+48 1.999

Sep 9 2019 John Deere Capital US$400m Jun 13 2022 3ml+49 100 3ml+49 3ml+49

Sep 9 2019 John Deere Capital US$450m Sep 14 2026 2.25 99.755 T+73 2.288

Sep 9 2019 Methanex US$700m Dec 15 2029 5.25 99.969 T+362.5 5.255

Sep 9 2019 Oncor Electric Delivery US$700m Sep 15 2049 3.1 99.496 T+102 3.126

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 13/9/2019

Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)


BONDS SUMMARY DETAILS

SOFR+27 area - - Aaa/AAA/AAA Citi/DB/TD(B&D)/WFS -

MS+23 area,

+22 area

0 >US$4.8bn, 120acs Aaa/AAA/Scope

AAA

BNPP/Citi/TD Asia 36%, Amers 24%, UK 15%, Ger

10%, Fr 6%, Scandi 5%, Other 4%.

CB/OI 51%, Bks 33%, AM 12%, Ins/

PF 2%, Other 2%. Green/ESG 58%,

Conventional 42%.

MS+16 area 0 >US$3.2bn, 59acs Aa1/AA+ BAML/Citi/GS/HSBC Asia 47%, EMEA 31%, Amers 22%. CB/OI

72%, Bks 23%, FM 5%.

MS+23 area 1 >US$3.75bn Aaa/AAA/AAA DB/MS/Nomura/TD -

MS+13 area(I/G) 0 >US$2.8bn, 53acs Aaa/AAA/AAA Citi/Daiwa/HSBC/JPM/SG Amers 32%, Asia 27%, Eur 23%, MEA

18%. CB/OI 64%, Bks 28%, AM 8%.

MS-6 area - >€540m -/AA+ Barc/DB/Helaba/HSBC/LBBW -

BONOs+20 area,

BONOs+17 (+/-2)

- >€3.1bn, 90acs -/A-/A-/A BBVA/CA-CIB/HSBC/SG CB/OI 41.9%, FM 33.7%,. Ins/PF 4.6%.

- - - Aaa/AAA/Scope

AAA

CMZ -

SONIA+28 area - >£585m Aaa/AAA/AAA BAML/DB/StCh/TD -

G’52+0.5/0.75 1 >£25.8bn, 80acs Aa2/AA/AA BAML/Barc/Lloyds/MS UK 81%, Other 19%.

SONIA+29 area 0 >£325m Aaa/AAA/AAA Barc/Citi/TD -

G+36 area - >£300m Aaa/AAA BAML/HSBC/NatWest -

ASW+43 area - - Aaa/AAA DB/Miz -

- - - Aaa/AAA/AAA JPM -

MS+26-30, MS+28-

30

- - -/AA+ ANZ -

MS+42-46, MS+44-

46

- - -/AA+ ANZ -

- - - Aaa/AAA/Scope

AAA

BAML -

ASW+37 - - Aaa/AAA CBA/RBC/TD -

MS+3 area(I/G) - >C$600m combined Aaa/AAA BMO/CIBC/RBC -

MS+15 area(I/G) - >C$600m combined Aaa/AAA BMO/CIBC/RBC -

T+130 area,

T+115 (+/-5)

- US$1.3bn A2/A-/A Citi/CS/GS/Scotia -

T+120 area,

T+95 (#)

- - BBB//BBB FITB/JPM/SGAS/WFS -

T+187.5 area,

T+175 (#)

- - BBB//BBB FITB/JPM/SGAS/WFS -

T+135 area,

T+120 (+/-5)

- US$1.4bn A3/A-/A- BNPP/JPM/WFS -

T+175/187.5 - - Baa3/BBB-/BBB- CA-CIB/Miz/Scotia -

5%/5.125%,

4.875%/5%

- US$2.9bn Baa3/BBB Barc/CS/GS/JPM -

T+180/185,

T+170 (+/-5)

- US$1.7bn Baa3/BBB+/BBB BAML/Citi/JPM -

T+high 60s,

T+50 (+/-2)

- US$1.4bn A2/A/A Citi/DB/HSBC/JPM -

3mL+equiv,

3mL+equiv


T+90 area,

T+75 (+/-2)


T+Mid/Hi 300,

T+362.5 (#)

- US$1.1bn Baa3/BB+/BBB HSBC/JPM/RBC -

T+120/125,

T+105 (+/-3)

- US$2bn A2/A+/A Citi/JPM/PNC/RBC -

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution


GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 13/9/2019 (CONTINUED)


Sep 9 2019 Plains All American Pipeline US$1.bn Dec 15 2029 3.55 99.496 T+195 3.572

Sep 9 2019 Principal Life Global Funding US$400m Sep 16 2029 2.5 99.325 T+95 2.577

Sep 9 2019 Spirit Realty US$300m Jan 15 2027 3.2 99.906 T+165 3.125

Sep 9 2019 Spirit Realty US$500m Jan 15 2030 3.4 99.77 T+180 3.427

Sep 9 2019 Steel Capital US$800m Sep 16 2024 3.15 100 T+167.8 3.15

Sep 10 2019 Ares Capital US$250m Jun 10 2024 4.2 102.2 T+210 3.68

Sep 10 2019 Connecticut Light & Power US$200m Mar 15 2027 3.2 105.143 T+37 2.422

Sep 10 2019 Florida Power & Light US$800m Oct 1 2049 3.15 99.363 T+100 3.183

Sep 10 2019 Hospitality Properties Trust US$825m Oct 1 2024 4.35 99.882 T+280 4.376

Sep 10 2019 Hospitality Properties Trust US$450m Oct 1 2026 4.75 98.844 T+312.5 4.776

Sep 10 2019 Hospitality Properties Trust US$425m Oct 1 2029 4.95 98.954 T+337.5 5.084

Sep 10 2019 Kansai Electric Power US$500m Sep 17 2024 2.55 100 T+105 2.55

Sep 10 2019 Penske Truck Leasing US$500m Nov 1 2024 2.7 99.793 T+118 2.743

Sep 10 2019 Penske Truck Leasing US$300m Nov 1 2029 3.35 99.554 T+170 3.42

Sep 10 2019 Perkinelmer US$850m Sep 15 2029 3.3 99.67 T+162.5 3.339

Sep 10 2019 TransCanada Trust US$1.1bn Sep 15 1979 5.5 100 5.5 5.5

Sep 10 2019 Vodafone Group US$1.5bn Sep 17 2050 4.25 99.624 T+210 4.272

Sep 10 2019 Washington Gas Light US$300m Sep 15 2049 3.65 99.494 T+150 3.678

Sep 11 2019 Toyota Tsusho US$500m Sep 19 2024 2.596 100 T+100 2.596

Sep 11 2019 Ameren Corp US$450m Sep 15 2024 2.5 99.967 T+92 2.507

Sep 11 2019 Citadel US$500m Jan 15 2027 4.875 99.714 T+325 4.923

Sep 11 2019 Expedia Group US$1.25bn Feb 15 2030 3.25 99.225 T+160 3.339

Sep 11 2019 Kraft Heinz Foods US$1bn Apr 1 2030 3.75 99.612 T+205 3.795

Sep 11 2019 Kraft Heinz Foods US$500m Oct 1 2039 4.625 98.816 T+250 4.717

Sep 11 2019 Kraft Heinz Foods US$1.5bn Oct 1 2049 4.875 98.571 T+275 4.967

Sep 12 2019 Alabama Power US$600m Oct 1 2049 3.45 99.665 T+120 3.468

Sep 12 2019 Host Hotels & Resorts US$650m Dec 15 2029 3.375 99.218 T+168 3.467

Sep 12 2019 Markel US$300m Sep 17 2029 3.35 99.823 T+158 3.371

Sep 12 2019 Markel US$500m Sep 17 2050 4.15 99.775 T+190 4.163

EUROS

Sep 9 2019 CCEP €500m Sep 12 2031 0.7 99.656 MS+78 / B+131.8 0.738

Sep 9 2019 Dassault Systemes €900m Sep 16 2022 0 100.358 MS+40 / B+76.4 -0.119

Sep 9 2019 Dassault Systemes €700m Sep 16 2024 0 99.93 MS+48 / B+88.1 0.014

Sep 9 2019 Dassault Systemes €900m Sep 16 2026 0.125 99.528 MS+55 / B+97.1 0.193




T+low 200s,

T+200 (+/-5)

- US$2.5bn Ba1/BBB-/BBB- MUFG/Citi/Miz/Scotia -

T+105 area,

T+95 (the #)

- US$550m A1/A+ GS/MS/USB -

T+180 area,

T+170 (+/-5)

- US$900m Baa3/BBB/BBB BAML/JPM/RBC/STRH -

T+195 area,

T+185 (+/-5)

- US$1.1bn Baa3/BBB/BBB BAML/JPM/RBC/STRH -

3.375% area,

3.2% (+/-5)

- - Baa2/BBB-/BBB Citi/JPM/SG/ING/SBER/VTB -

T+220 area,

T+210 (#)

- - Baa3/BBB- BAML/JPM/WFS -

T+85/90,

T+75 (+/-2)

- US$500m A1/A+/A+ Miz/MUFG -

T+120 area,

T+105 (+/-5)

- US$1.8bn Aa2/A/A- BAML/CS/Scotia/TD(a)/BMO/BNY/

CIBC/Miz/PNC

-

T+300/312.5,

T+280 (the #)

- US$1.8bn Baa3/BBB- BAML/Citi/MS/RBC/WFS -

T+325/337.5,

T+312.5 (the #)

- US$860m Baa3/BBB- BAML/Citi/MS/RBC/WFS -

T+337.5/350,

T+337.5 (the #)

- US$727m Baa3/BBB- BAML/Citi/MS/RBC/WFS -

T+125 area - US$1.4bn A3 MS/Nomura/Miz/Citi Asia 95%, Eur 5%. AM 35%, Bks 34%,

Ins 19%, Other 12%.

T+135 area,

T+120 (+/-2)

- US$1.5bn Baa2/BBB/BBB+ BAML/CitiIzens/JPM/Miz/WFS -

T+185 area,

T+175 (+/-5)

- US$800m Baa2/BBB/BBB+ BAML/CitiIzens/JPM/Miz/WFS -

T+175 area,

T+162.5 (the #)

- - Baa3/BBB/BBB BAML/JPM -

5.5% (the #) - US$2bn Baa3/BBB-/BBB- Citi/JPM -

T+230 area,

T+215 (+/-5)

- US$4.5bn Baa2/BBB/BBB BAML/MS/RBC/SMBC -

T+145/150 - US$400m A2/BBB+/A MUFG/TD -

T+115 area - - A3/A+ JPM/BAML/MS -

T+115 area,

T+95 (+/-3)

- US$2.2bn Baa1/BBB BAML/BNPP/MS/SMBC Nikko -

T+337.5 area,

T+325 (+/-5)

- US$875m BBB GS/UBS -

T+175 area,

T+165 (+/-5)

- US$3bn Baa3/BBB/BBB BAML/GS/JPM -

T+237.5/250,

T+210 (+/-5)

- US$5.8bn Baa3/BBB- BAML/Citi/WFS -

T+287.5 area,

T+255 (+/-5)


T+312.5 area,

T+280 (+/-5)


T+135 area,

T+120 (the #)

- US$1.45bn A1/A-/A+ MSMS/BAML/Miz/Scotia/WFS -

T+180 area,

T+170a (+/-2)

- US$1.47bn Baa2/BBB-/BBB DB/GS/WFS -

T+185 area,

T+160 (+/-2)

- US$1.8bn Baa2/BBB/BBB+ Citi/JPM/WFS -

T+215 area,

T+195 (+/-5)

- US$1.5bn Baa2/BBB/BBB+ Citi/JPM/WFS -

MS+100/105,

MS+80 (+/-2)

-2 >€1.25bn A3/BBB+ BNPP/DB/Santan/Uni -

MS+60 area,

MS+45 (+/-3)

- >€2.2bn -/A- GCs CA-CIB/GS/MUFG/SG, JBs

BAML/BNPP/CM-CIC/CMZ/ING/

Santan

-

MS+70 area,

MS+50/55



Santan

-

MS+80 area,

MS+55/60



Santan

-




Sep 9 2019 Dassault Systemes €1.15bn Sep 16 2029 0.375 99.375 MS+60 / B+101.9 0.439

Sep 9 2019 Peugeot €600m Sep 18 2029 1.125 98.915 MS+140 / B+181.4 1.241

Sep 9 2019 Verizon €800m Mar 19 2032 0.875 99.895 MS+90 / B+146.4 0.884

Sep 9 2019 Verizon €500m Sep 19 2039 1.5 98.823 MS+135 / B+182.3 1.569

Sep 10 2019 Covivio green €500m Sep 17 2031 1.125 99.554 MS+120 / B+174.2 1.165

Sep 10 2019 EDP green €600m Sep 16 2026 0.375 99.635 MS+77 / B+119.8 0.428

Sep 10 2019 La Poste €900m Sep 17 2027 0.375 99.953 MS+65 / B+107.7 /

OAT+80.5

0.381

Sep 10 2019 La Poste €600m Sep 17 2034 1 99.613 MS+90 / B+141.7 /

OAT+92.4

1.028

Sep 10 2019 LyondellBasell €500m Sep 17 2026 0.875 99.642 MS+127 / B+170 0.928

Sep 10 2019 LyondellBasell €500m Sep 17 2031 1.625 98.924 MS+175 / B+228.4 1.725

Sep 10 2019 WP Carey €500m Apr 15 2028 1.35 99.266 MS+168 / B+211 1.442

Sep 11 2019 Orange €500m Perpetual (Mar 2027) 1.75 99.137 MS+218.1 1.875

Sep 11 2019 Worldline €500m Sep 18 2024 0.25 99.5 MS+80 / B+120.5 0.351

Sep 13 2019 Kerry Group €750m Sep 20 2029 0.625 98.991 MS+78 / B+121.8 0.73

STERLING

Sep 9 2019 National Grid Electricity

Transmission

£300m Sep 16 2026 1.375 99.902 G+100 1.385

Sep 9 2019 National Grid Electricity

Transmission

£400m Sep 16 2038 2 99.465 G+108 2.024

Sep 9 2019 Verizon £300m Sep 19 2030 1.875 99.132 G+135 1.954

Sep 10 2019 Catalyst Housing £50m

(retained sale)

Oct 31 2047 3.125 111.553 G+143 2.547

Sep 11 2019 Yorkshire Housing Finance £60m

(retained sale)

Oct 31 2044 4.125 126.564 G+155 -

NON CORE

Sep 4 2019 Stockholm Exergi Holding SKr400m Sep 11 2023 3mS+60 100.602 3mS+45 -

Sep 4 2019 Stockholm Exergi Holding SKr1.6bn Sep 11 2026 0.893 100 MS+90 0.893

Sep 10 2019 Kungsleden SKr300m Sep 17 2024 3mS+125 100 3mS+125 -

Sep 11 2019 CENEXP A$350m Sep 26 2024 1.873 100 MS+80 /

ASW+91.5

1.873

Sep 11 2019 Spark NZ$125m Mar 18 2030 2.6 99.749 MS+137 2.628

Sep 11 2019 Stendörren Fastigheter SKr800m Perpetual (Sep 2024) 3mS+650 100 3mS+650 -

FINANCIALS

US DOLLARS

Sep 9 2019 BB&T US$1.1bn Mar 16 2023 2.2 99.926 T+70 2.222

Sep 9 2019 Branch Banking & Trust US$750m Sep 17 2029 2.636 100 T+115 2.636

Sep 9 2019 Discover Bank US$750m Sep 12 2024 2.45 99.958 T+98 2.459

Sep 9 2019 Mizuho Financial Group US$500m Sep 13 2023 (Sep 2022) 3mL+85 100 3mL+85 -

Sep 9 2019 Mizuho Financial Group US$600m Sep 13 2025 (Sep 2024) 2.55 100 T+105 2.55

Sep 9 2019 Mizuho Financial Group US$500m Sep 13 2030 (Sep 2029) 2.869 100 T+122 2.869

Sep 10 2019 Lloyds Banking Group US$1.5bn Mar 17 2023 2.858 100 T+120 2.858




MS+90 area,

MS+65 area

- >€3bn -/A- GCs CA-CIB/GS/MUFG/SG, JBs


Santan

-

MS+165 area,

MS+145 area

15 ~€1.05bn Baa3/BBB-/BBB- GCs BNPP/SG, JLMs Citi/CA-CIB/

Natx/Santan

-

MS+110 area,

MS+95 (+/-5)

5 >€2.5bn combined Baa1/BBB+/A- BAML/CS/GS/MS -

MS+150 area,

MS+135 (+/-5)

12 >€2.5bn combined Baa1/BBB+/A- BAML/CS/GS/MS -

MS+135 area,

MS+120/125

- >€850m -/BBB+ BcaIMI/BNPP/CA-CIB/Natx -

MS+100/105,

MS+80 (+/-3)

0 >€1.5bn Baa3/BBB-/BBB- BAML/BBVA/Citi/CMZ/ICBC/ING/

JPM/Miz/SG

Fr 30%, Iberia 17%, It 4%, UK/Ire

17%, Ger 11%, Benelux 10%, Switz 9%,

Other 2%. AM 84%, Ins/PF 10%, Bks/

PB 6%.

MS+80/+85,

MS+65/70

18 >€2.22bn -A/A+ BNPP/CMZ/DB/Natx/NWatWest Ger/Aus 31%, UK/Ire 11%, Benelux

9%, Switz 6%, S.Eur 6%, Asia 6%,

Other 2%. AM 63%, Ins 13%, CB/Agcy

8%, Bks/PB 6%, Corp 6%, Other 4%.

MS+105 area,

MS+90/95

25 >€1.2bn -A/A+ BNPP/CMZ/DB/Natx/NWatWest Fr 44%, Ger/Aus 32%, UK/Ire 15%,

S.Eur 4%, Switz 3%, Other 2%. AM

74%, Ins 18%, Bks/PB 6%, Other

2%.

MS+140 area,

MS+130 area

- - Baa1/BBB+ Citi/DB -

MS+190 area,

MS+175/180

- - Baa1/BBB+ Citi/DB -

MS+180 area,

MS+170 area

- - Baa2/BBB Barc/BAML/JPM -

2.125%/2.25%,

1.875%

0 ~€1.1bn Baa3/BBB- GC/struc CA-CIB/GS, JBs MUFG/

NatWest

-

MS+95/100,

MS+80 area

- €1bn -/BBB+ BNPP/JPM/Natx(a), CM-CIC/CMZ/

ING/MUFG/Uni(p)

-

MS+100/105,

MS+80/85

- >€1.85bn Baa2/BBB+ BAML/HSBC/NatWest/Rabo -

G+110/115,

G+100/105

- ~£1.6bn combined A3/A-/A HSBC/Lloyds/NatWest/SG -

G+125/130,

G+115 area

- ~£1.6bn combined A3/A-/A HSBC/Lloyds/NatWest/SG -

G+150 area,

G+135/140

12 >£1bn Baa1/BBB+/A- BAML/CS/GS/MS -

G+147 area,

G+143/145

- >£140m -/A RBC -

G+155/160 - >£90m A3 Santan -

- - - -/BBB+ Danske/SEB -

- - - -/BBB+ Danske/SEB -

- - - Baa3 HCM -

MS+mid 80s - - A2 Daiwa/Miz/SMBC -

MS+140/145 - - -/A- ANZ/WBC -

- - - - Danske/Nordea/Swed -

T+80 area,

T+70 (the #)

- US$1.3bn A2/A-/A+ BAML/BB&T/RBC/STRH -

T+130 area,

T+115 (the #)

- US$1bn A2/A-/A BAML/BB&T/RBC/STRH -

T+115/120,

T+100 (+/-2)

- US$1.65bn Baa2/BBB/BBB+ Citi/DB/MUFG/RBC -

3mL+105 area,

3mL+90 (+/-5)

- US$2.05bn A1/A- Miz/GS -

T+120 area,

T+110 (+/-5)


T+140 area,

T+125 (+/-3)


T+135 area,

T+120 (the #)

- US$2.2bn A3/BBB+/A+ GS/JPM/Lloyds/MS/UBS -




Sep 10 2019 Prudential Financial US$1.5bn Mar 13 1951 3.7 99.318 T+155 3.737

Sep 10 2019 SMFG (T2) US$500m Sep 17 2029 3.202 100 T+148 3.202

Sep 10 2019 Toronto-Dominion Bank US$1.25bn Mar 17 2021 3ml+27 100 3ml+27 -

Sep 12 2019 Standard Chartered US$750m incr

(US$1.5bn)

Sep 10 2022 3ml+120 100.195 3ml+120 -

Sep 12 2019 Northwestern Mutual US$600m Sep 30 2059 3.625 99.475 T+140 3.65

EUROS

Sep 9 2019 Commerzbank €500m Sep 16 2024 0.25 99.653 MS+80 / B+118.2 0.32

Sep 9 2019 de Volksbank green €500m Sep 16 2024 0.01 99.865 MS+50 / B+88.1 0.037

Sep 9 2019 Groupama T2 €500m Sep 16 2029 2.125 98.962 MS+240 / B+281.8 2.242

Sep 10 2019 ANZ NZ €500m Sep 17 2029 0.375 99.268 MS+60 / B+101.3 0.45

YEN

Sep 13 2019 BNP Paribas (SNP) ¥34.4bn Sep 25 2025 (Sep 25

2024)

0.492 100 OS+55 0.492

Sep 13 2019 BNP Paribas (Tier 2) ¥8.5bn Sep 25 2034 (Sep 25

2029)

1.058 100 OS+100 1.058

STERLING

Sep 10 2019 NY Life £550m Dec 17 2026 1.25 99.601 G+88 1.308

Sep 10 2019 Rothesay Life T2 £400m Sep 17 2029 5.5 99.416 G+515 5.637

Sep 11 2019 BMO £500m Dec 18 2024 1.5 99.833 G+110 1.534

SWISS FRANCS

Sep 10 2019 Intesa Sanpaolo Bank

Ireland

SFr225m Sep 30 2024 0.25 100.273 MS+100 / Eidg+124 0.195

NON CORE

Sep 9 2019 Bank Norwegian NKr400m Sep 16 2022 3mN+140 100 3mN+140 -

Sep 9 2019 Bank Norwegian SKr400m Sep 16 2022 3mS+140 100 3mS+140 -

Sep 9 2019 Bluestep Bank SKr700m Sep 12 2022 3mS+125 100 3mS+125 -

Sep 10 2019 Westpac A$600m Sep 11 2020 3mBBSW+30 100 3mBBSW+30 -

Sep 11 2019 LF Bank SKr800m Nov 13 2024 0.75 99.732 MS+84 0.805

Sep 11 2019 LF Bank SKr1.7bn Nov 13 2024 3mS+84 100 3mS+84 -

Sep 13 2019 Kiwibank NZ$400m Sep 20 2024 2.155 100 MS+107 2.155

COVERED BONDS

EUROS

Sep 9 2019 LBBW €650m Sep 18 2028 0.01 102.075 MS+1 / B+43.4 -0.218

Sep 9 2019 MMB SCF (My Money Bank) €500m Sep 17 2029 0.05 99.404 MS+27 / B+68.9 0.11

SWISS FRANCS

Sep 10 2019 PSHypo SFr215m incr

(SFr470m)

Nov 17 2025 0.25 105.202 MS+15 / Eidg+37.2 -0.58

Sep 10 2019 PSHypo SFr150m incr

(SFr430m)

Apr 26 2034 0.25 105.435 MS+10 / Eidg+49.9 -0.119

HIGH YIELD

US DOLLARS

Sep 6 2019 Restaurant Brands

International

US$750m Jan 15 2028 3.875 100 T+235 3.875

Sep 9 2019 Cheniere Energy Partners US$1.5bn 10NC5 4.5 100 T+288 4.5




T+165/170,

T+155 area,

- US$2.6bn A3/A Barc/Citi/CS/GS/Miz/WFS -

T+165 area - - A2/BBB+ SMBC Nikko/GS/Citi/BAML -

3mL+35 area,

3mL+27 (the #)

- US$1.45bn Aa3/A CS/TD/WBC -

3ml+120 area,

3ml+110 area

- >US$1bn A2/BBB+/A StCh -

T+160 area,

T+140 (the #)

- US$2.1bn Aa2/AA- CS/JPM/MS -

MS+90 area,

MS+80/85

11 >€700m Baa2/BBB/BBB+/

Scope A-

BBVA/CMZ/DB/DZ/Natx -

MS+70 area,

MS+55 area

2 >€1.5bn, ~90acs A3/-/A- ABN/HSBC/ING/SEB Ger/Aus 22%, UK/Ire 20%, Nordics

20%, Benelux 19%, Fr 12%, Other 7%.

FM 73%, Bks/PB 17%, CB/OI 7%, Ins/

PF 3%. Green 67%,, Conventional 33%.

MS+260/265,

MS+240/150

0 >€1.25bn -/-/BBB BNPP/Citi/CA-CIB/HSBC/JPM/Natx Fr 49%, It 15%, Benelux 9%, UK/Ire

8%, Ger 6%, Switz 5%, Iberia 5%,

Nordics 1%, Asia 1%, Other 1%. AM

70%, Ins/PF 20%, Bks 5%, CB/OI

2%, HF 1%, Other 1%.

MS+80 area,

MS+60/65

- >€1.2bn A1/AA-/AA- ANZ/DZ/BNPP/HSBC -

OS+50/55 - - Baa1/A-/A+ BNPP/Daiwa/Miz/MUFG/SMBC

Nikko

-

OS+100/102 - - Baa2/BBB+/A BNPP/Daiwa/Miz/MUFG/SMBC

Nikko

-

G+100 area,

G+90 (+/-2)

- >£950m Aaa/AA+/AAA Barc/CS/JPM -

G+550 area,

G+525 area

- >£1.6bn -/-/BBB+ Barc/HSBC/NatWest -

G+120 area - >£650m A2/A-/AA- BMO/CS/Lloyds/NatWest -

MS+98/108,

MS+100/105

5 (vs €) SFr225m, 35acs Baa1/BBB/BBB UBS Switz 100%. AM 67.1%, PB 18.3%, Ins

7.3%, Tsy 7%, PF 0.3%.

3mN+135/140 - - -/BBB DNB/SEB -

3mS+135/140 - - -/BBB DNB/SEB -

- - - - SEB -

3mBBSW+32 area - - Aa3/AA-/AA- WBC -

- - - Baa1/A- Danske/SEB/Swed -

- - - Baa1/A- Danske/SEB/Swed -

MS+105/100 - - Aa3/A/AA BNZ/Kiwi/WBC -

MS+5 area,

MS+2 (+/-1)

2 >€1bn, 57acs Aaa CMZ/ING/LBBW(B&D)/NWM/Rabo/

Swed

Ger 52.3%, Benelux 14.5%, Fr 8.7%,

Nordics 7.8%, Switz 5.0%, Aus 4.8%,

UK 4.4%, Other 2.5%. Bks 49.6%,

AM 28.6%, CB/OI 15.2%, Ins 6.6%.

MS+30 area 7 >€850m, >50acs -/AAA ABN/BNPP/CA-CIB/DZ/NordLB/

Santan

Ger/Aus 36.2%, Nordics 28.8%, Fr 17.7%,

UK 8.5%, Asia 4%, Sp 2.2%, Other 2.6%.

FM 40.4%, Bks 35.2%, CB/OI 20.2%,

Ins 4.2%.

MS+15 area 5 - Aaa CS/Raiff/UBS -

MS+10 area 3 - Aaa CS/Raiff/UBS -

4% area - - Ba3/BB- MS/JPM/WFS/RBC/Barc -

4.625%/4.875% - - Ba2/BB/BB RBC/ABN/BBVA/BAML/CIBC/Citi/

CBA/CA-CIB/CS/DBS/GS/HSBC/

ING/JPM/Loop/Miz/MS/MSMS/

Nabcapital/Santan/Scotia/SG/StCh/

SMBC/WFS

-




Sep 9 2019 Encompass Health US$500m Feb 1 2028 4.5 100 T+295 4.5

Sep 9 2019 Encompass Health US$500m Feb 1 2030 4.75 100 T+313 4.75

Sep 9 2019 Toll Brothers Finance US$400m Nov 1 2029 3.8 100 - 3.8

Sep 9 2019 Triumph Group US$525m Sep 15 2024 6.25 100 T+476 6.25

Sep 10 2019 Beazer Homes USA US$350m Oct 15 2029

(Oct 2024)

7.25 100 T+556 7.25

Sep 10 2019 Brookfield Residential

Properties

US$600m Sep 15 2027

(Sep 2022)

6.25 100 T+460 6.25

Sep 10 2019 ESH Hospitality Inc /

Extended Stay America

US$750m Oct 1 2027

(Oct 2022)

4.625 100 T+296 4.625

Sep 10 2019 HAT Holdings US$150m Jul 15 2024

(Jul 2022)

5.25 104.875 T+255 4.127

Sep 10 2019 Spectrum Brands US$300m Oct 1 2029

(Oct 2024)

5 100 T+331 5

Sep 10 2019 Sensata Technologies US$450m Feb 15 2030 4.375 100 - 4.375

Sep 10 2019 WPX Energy US$600m Oct 15 2027

(Oct 2022)

5.25 100 - 5.25

Sep 11 2019 Kehe Distributors US$200m Oct 15 2026

(Oct 2022)

8.625 100 - 8.625

Sep 11 2019 Level 3 Financing US$1bn Sep 15 2027

(Sep 2022)

4.625 100 T+295 4.625

Sep 11 2019 Patrick Industries US$300m Oct 15 2027 7.5 100 T+576 7.5

Sep 11 2019 Tegna US$1.1bn Sep 15 2029

(Sep 2022)

5 100 T+327 5

Sep 12 2019 B&G Foods US$550m Sep 15 2027

(Sep 2022)

5.25 100 T+351 5.25

Sep 12 2019 CDW LLC and CDW Finance US$600m Apr 1 2028

(Apr 2022)

4.25 100 T+250 4.25

Sep 12 2019 Core & Main Holdings US$300m Sep 15 2024

(Sep 2020)

8.625 98.5 T+735 9.004

Sep 12 2019 ISTAR US$675m Oct 1 2024 4.75 100 T+309 4.75

Sep 12 2019 Patrick Industries US$300m Oct 15 2027 7.5 100 T+576 7.5

Sep 12 2019 Wynn Resorts US$750m Oct 1 2029 5.125 100 T+335 5.125

Sep 12 2019 Uber Technologies US$1.2bn Sep 15 2027

(sep 2022)

7.5 100 T+576 7.5

Sep 13 2019 Altice France US$1.1bn Jan 15 2028 (Sep 2022) 5.5 100 T+377 5.5

EUROS

Sep 9 2019 IGT €500m Apr 15 2028 (Apr 2023) 2.375 100 B+305 2.375

Sep 10 2019 SALT (Matterhorn) €575m Sep 15 2026 (Sep 2022) 3.125 100 - 3.125

Sep 10 2019 SALT (Matterhorn) €250m Sep 15 2024 (Sep 2021) 2.625 100 - 2.625

Sep 10 2019 Intrum €850m Sep 15 2027 (Sep 2022) 3 100 B+372 3

Sep 13 2019 Altice France €1bn Jan 15 2028 (Sep 2021) 3.375 100 B+397 3.375

Sep 13 2019 Altice France €550m Jan 15 2025 (Sep 2021) 2.5 100 B+323 2.5

STERLING

Sep 11 2019 Pinewood Finco £550m Sep 30 2025 (Sep 2021) 3.25 100 G+280 3.25

NON CORE

Sep 10 2019 AKA AS NKr500m Sep 17 2024 3.6 100 - 3.6




4.5%/ 4.75% - - B1/B+ Citi/Barc/BAML/GS/JPM/MS/RBC/

STRH/WFS

-

4.75% /5% - - B1/B+ Citi/Barc/BAML/GS/JPM/MS/RBC/

STRH/WFS

-

4% (+/- 5) - - Ba1/BB+/BBB- Citi/BAML/GS/Miz/PNC/STRH/WFS -

6.5%/6.75%,

6.255%/6.375%

- - B3/B JPM/Citi/Citizens/MSMS/PNC -

7.25% area - - B3/B- CS/DB/GS/BNP -

6.25/6.5% - - B1/BB- JPM/Citi/TD/WFS -

4.625% area - - Ba3/BB- DB -

104.75/105.00 - - BB+/BB+ WFS/BAML/JPM -

5%/5.25% area - - B2/B+ CS/RBC/BarcS/BMO/BAML/DB/JPM -

4.5% area - - Ba3/BB+ GS/Barc/BAML/Miz/MS/RBC -

5.25%/5.5% - - B1/BB- BAML/JPM/MUFG/CA/WFS/Barc/

Citi

-

8.5% area - - B3/B- BMO/JPM/WFS/BAML -

4.625% area,

4.625% (+/- 0.125)

- - Ba3/BB Citi/BAML/GS/JPM/MS/Barc/CS/

RBC/WFS/MSMS/BNPP/Citizens/

DB/FITB/Loop/Miz/Regions/STRH/

USB

-

7.5% area - - B3/B+ WFS/BAML/Key -

5% area - - Ba3/BB JPM/Citi/Barc/RBC/MUFG/Miz/

FITB/USB/STRH/WFS/Citizens/

SMBC

-

5.25% area - - B2/B+ Barc/DB/RBC/BAML/BMO/GS/

JPM/CS

-

4.375% area - - Ba2/BB- MS/JPM/Barc/GS/MUFG/WF -

8.375% coupon @

98.5%

- - Caa2/B- JPM/BAML/Citi/Barc/DB/RBC/GS/

BB&T/CS/Natx/Nomura

-

4.75% area - - Ba2/BB-/BB BAML/JPM/Barc/MS/GS -

7.5% area - - B3/B+ WFS/BAML/Key -

5.25% area - - B1/BB DB/GS/Scotia/BAML/ BNPP/FTSEC/

JPM/Miz/Sun/SMBC/CA-CIB/

Citizens

-

7.5% area - - B3/CCC+ MS/BAML/GS/Citi/Barc/HSBC/

Sun/RBC

-

5.625% area - - B2/B+ Citi(left)/GS/Barc/BNPP/CA-CIB/CS/

DB/JPM/MS/RBC/SG

-

2.75%/3%,

2.5%/2.75%,

2.5% area,

2.375%

- - Ba2/BB+ CS/JPM/Barc/Citi/DB/NWM/Scotia/

SG

-

3.5% area,

3.25%/3.5%,

3.125%

- - B2/B+ GCs GS/Citi(a)/CS(p). JBs BNPP/CA-

CIB/HSBC/JPM/SG

-

2.75%/3%,

2.625%

- - B2/B+ GCs GS/Citi(a)/CS(p). JBs BNPP/CA-

CIB/HSBC/JPM/SG

-

3% area,

3% area,

3%

- - Ba2/BB+/BB GS/JPM/IMI/Citi/Danske/DB/DNB/

MS/Nordea/Nyk/SEB/Swed/UBS

-

3.5% area,

3.375%

- - B2/B+ GS(left)/Citi/Barc/BNPP/CA-CIB/CS/

DB/JPM/MS/RBC/SG

-

2.75% area,

2.5%

- - B2/B+ GS(left)/Citi/Barc/BNPP/CA-CIB/CS/

DB/JPM/MS/RBC/SG

-

3.25%/3.5% - - -/BB-/BBB- CS/GS/Barc/HSBC/NatWest -

3.60% - - - DNB -

HIGH YIELD ROUNDTABLEThe IFR Asia High Yield Roundtable takes place in Hong Kong on the afternoon of Monday October 21 2019 and registration is now open.

Don’t miss out on this free-to-attend event – secure your place today!

Moderated by IFR Asia’s Editor, Steve Garton, the Roundtable will convene an expert panel to discuss the challenges and opportunities within the market and an outlook for the year ahead and beyond.

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DATE

OCTOBER 21 2019

TIME

15:00 – REGISTRATION

15:30 – ROUNDTABLE

17:00 – CLOSE

LOCATION

HONG KONG

FRONT STORY AFRICA

South Africa ready to hit the button State power utility Eskom in dire straits

Moody’s raises spectre of downgrade

SOUTH AFRICA is hoping to secure a big deal in

year amid ratings pressure and troubles haunting state-owned power utility Eskom.

would mark its largest single international bond deal.

much trouble getting the deal away, larger

said Altenkirch.One banker said that South Africa would

reasonable price.

Treasury’s last two deals, in 2017 and 2018,

The banker thinks that South Africa could look to place 10 and 30-year tranches in dollars, with euros potentially offering

choice for many CEEMEA issuers in 2019

including Saudi Arabia and Ukraine.

Treasury’s 15-month absence from the market, but also the case of ailing state

which ends in March 2020, as part of special

“The proceeds of the Eurobond may not be dropped off in front of Eskom’s

Africa is issuing more than usual is to fund

utility fails to meet its borrowing plan, a

August.“The Eskom funding situation is

said the banker.

Treasury will try to steer away from any

because it would run the risk of tainting the

Moody’s lead analyst for South Africa, Lucie Villa, said on Tuesday that lack of clarity and progress on reforming Eskom, including splitting it into three entities, was concerning.

three units - generation, transmission and

Eskom off bailouts that threaten to push

ratio seen as a red line by credit agencies.

Treasury had raised the idea of selling

Cosatu and some factions inside the ruling

The utility also recently lost its tenth chief

Although Moody’s is unlikely to shunt

territory in the short term, Villa said that the slow pace of reform, illustrated by the

the rating.

Moody’s and the other two rating agencies.

“[Moody’s] leniency towards South Africa

Management, said that Moody’s has always

than its peers.

Africa’s medium-term budget policy

the country has collapsed, undermining a

start growth after a decade of stagnation.

budget back on a sustainable path.

South Africa has not issued since May 2018, when it raised US$2bn through a

Sources say that South Africa has appointed Citigroup, Deutsche Bank/Nedbank, Rand Merchant Bank and Standard Bank for the new deal, although no mandate has yet been

Robert Hogg


EMERGING MARKETS China Hong Kong India Indonesia 70 Malaysia 71 South Korea 71 Egypt 71

Nigeria 72 Russia 72 Slovakia 73 Kuwait 73 Qatar 74 Argentina 75

“Once they start nudging above US$3bn, I’d get a little concerned about them having to pay up”

“If Finance Minister Tito Mboweni fails to deliver, South African bonds could face a torrid time”

ASIA-PACIFIC

CHINA

ICBC SELLS GREATER BAY BONDS

INDUSTRIAL AND COMMERCIAL BANK OF CHINA, HONG

KONG BRANCH has priced US$3.15bn-

priced at par to yield Libor plus 78bp, the

year tranches at Libor plus 70bp and Treasuries plus 85bp, and Libor plus 78bp

including US$1bn of demand from the leads.

leads.

COGARD PRICES INSIDE ITS CURVE

COUNTRY GARDEN HOLDINGS

A source close to the deal estimated that

US$80m of the notes were allocated to

company plans to use proceeds for

debt, which will become due within one year.

Morgan Stanley, Goldman Sachs and BNP Paribas were global coordinators, lead managers and bookrunners.

GUANGXI COMMUNICATIONS PRICES TIGHT

GUANGXI COMMUNICATIONS INVESTMENT GROUP has raised US$300m from a bond offering for

issuer.

US$1bn from 34 accounts, including

CCB International, China Securities International, Bank of China and BoCom Internationalas well as bookrunners and lead managers with ICBC International, DBS Bank, China Minsheng Banking Corp Hong Kong branch and China Citic Bank International.

CEB Internationalinitial guidance was announced but no longer when the deal was priced.

Commission owns the issuer, which is responsible for the construction and

toll roads, in the autonomous region.The group’s other businesses include

mineral products.Moody’s on August 22 upgraded the

support following its recent merger with

and sole railway operator.“The company’s substantially enlarged

role in the strategic transportation infrastructure sector has increased its

last tapped the offshore bond market in

or Treasuries plus 182.5bp.

LONGFOR PRINTS CHUNKY 10-YEAR

LONGFOR GROUP HOLDINGS

has priced a US$850m 10-year senior unsecured bond after drawing more than

including US$200m from the leads.

2.5bp) and well inside initial guidance of the 280bp area.


ALL INTL EMERGING MARKETS BONDSBOOKRUNNERS: 1/1/2019 TO DATE

Asia-Pacific


1 HSBC 229 23,220.51 8.9

2 Standard Chartered 151 13,785.85 5.3

3 Citigroup 118 12,970.73 5.0

4 Bank of China 153 11,320.35 4.4

5 UBS 100 9,276.63 3.6

6 JP Morgan 74 8,789.19 3.4

7 Credit Suisse 84 8,632.20 3.3

8 Haitong Securities 150 7,732.54 3.0


10 Mizuho 88 7,475.78 2.9

Total 609 260,159.71


Source: Refinitiv SDC code: L4



1 Citigroup 202 37,095.68 7.9

2 HSBC 282 36,263.06 7.7

3 JP Morgan 156 33,474.15 7.1


5 Goldman Sachs 76 18,584.20 4.0

6 BNP Paribas 101 18,249.53 3.9

7 BAML 103 15,204.64 3.2

8 Morgan Stanley 99 15,177.31 3.2

9 Deutsche Bank 100 14,764.93 3.1

10 Credit Suisse 100 12,646.86 2.7

Total 866 469,407.99



largest single-tranche dollar bond since it

Citigroup, Goldman Sachs, Haitong International, HSBC and Morgan Stanley were global coordinators as well as lead managers and bookrunners with Barclays and China International Capital Corp.

CNLP SETS MINIMUM COUPON

CHINA LOGISTICS PROPERTY HOLDINGS

announced the minimum coupon for new

2020.The new US dollar bonds due 2021 will

rate will be announced on September 18.

The logistics facilities operator is also seeking consent from bondholders to amend certain terms of the notes, including

consent.Consenting bondholders will be paid

US$0.50 per US$1,000 of bonds.

August 2020 bonds, it has US$100m of senior secured notes puttable in March 2020.

Morgan Stanley, UBS and AMTD are dealer-managers and solicitation agents. The

offer both end on September 17.

ZHONGRONG XINDA DOWNGRADED

ZHONGRONG XINDA GROUP

position.


EMERGING MARKETS ASIA-PACIFIC

Tianjin Binhai revives dollar bond issue

CHINA Generous yield and strong anchors ensure successful deal

TIANJIN BINHAI NEW AREA CONSTRUCTION &

INVESTMENT GROUP has successfully revived a

US$300m bond offering with a more generous

yield and strong anchors after a failed attempt

in July.

The Chinese local government financing

vehicle, rated Baa2/BBB+ (Moody’s/Fitch),

last Wednesday priced the 5.875% three-

year senior unsecured bond at 99.661 to yield

6.00%, in line with guidance.

The pricing was around 100bp more

generous than the July attempt.

A banker on the deal said the Reg S

issue had secured significant anchor orders and

bookrunners had made sure orders

were sufficient before formally launching

marketing.

“That’s why we went straight with 6% final

price guidance in the morning,” he said, noting

that the yield seemed attractive to investors.

“Many high-yield LGFV names, such as

Double B names, are trading at a 5%–6%

handle, but this investment grade name is

offering 6%. We saw some market orders on

Wednesday,” he said, but declined to disclose

the book size.

The banker acknowledged that BHCI had

to offer a higher yield than some similarly rated

or even lower-rated LGFVs, reflecting investors’

concerns about the capability and likelihood of

support from the Tianjin city government.

Interest for Tianjin-based LGFVs and state-

owned enterprises has weakened in response

to financial distress at commodity trader Tewoo

and developer Tianjin Real Estate Group. Both

are looking for a white knight to overcome their

financial woes.

S&P on July 15 flagged the financing

challenges of Tianjin SOEs given that the

northern Chinese port has the highest debt

burden among Chinese mega-cities or

provinces after including its local government

financing vehicles’ debt.

S&P believes that the Tianjin government

is more likely to provide support to its major

LGFVs than to other types of SOEs, given their

higher strategic importance.

BHCI in July was forced to postpone the

three-year dollar bond offering after concerns

over the finances of its local government parent

led to a rare snub from international investors.

Marketing of the Reg S deal began on July 11

at the 5.10% area and final guidance of 5.00%

(+/–5bp) was announced in the evening, before

the deal was pulled around midnight.

YIELD COMPENSATION

A significantly more generous yield helped

assuage anxieties over Tianjin names on

Wednesday.

LGFVs have also been in demand recently

with three other new issues pricing last week at

lower yields than BHCI.

Similarly rated GUANGXI COMMUNICATIONS

INVESTMENT GROUP, rated Baa2/BBB (Moody’s/

Fitch), on Tuesday priced US$300m of 3.50%

three-year bonds at 99.437 to yield 3.70%.

First-time issuer SHUIFA GROUP, rated Baa3

by Moody’s, which is one notch lower than

BHCI, on Tuesday sold US$400m of three-year

bonds at par to yield 4.15%.

High-yield issuer CHANGDE URBAN

CONSTRUCTION AND INVESTMENT GROUP, rated

BB+ by Fitch and three notches lower than

BHCI, on Wednesday priced US$200m of

three-year bonds at 5.8%.

BHCI’s newly priced bonds were traded

around reoffer in the aftermarket.

The issue structure was the same as the last

attempt in July, with Zhaobing Investment (BVI)

as the issuer and BHCI as the guarantor.

The notes have expected ratings of Baa2/

BBB+ (Moody’s/Fitch), in line with the

guarantor.

S&P withdrew its rating on BHCI at the

company’s request on September 10, following

a downgrade to BBB– from BBB on August 22.

Moody’s and Fitch did not undertake

any rating actions after the July deal

postponement.

BHCI was established in 2006 by the Tianjin

municipal government to manage major

projects in the Tianjin Binhai New Area.

Proceeds from the bond issue will be used

for general corporate purposes.

The banker said BHCI has used up its entire

offshore debt issuance quota from the National

Development and Reform Commission.

Standard Chartered, Bank of China,

HSBC, ABC International, Guotai Junan International, Industrial Bank Hong Kong branch, Haitong International and CCB International were joint global coordinators.

They were also joint lead managers and joint

bookrunners with BNP Paribas, China Citic Bank International, Everbright Sun Hung Kai, CMBC Capital, CMB Wing Lung Bank, Orient Securities (Hong Kong), Shanghai Pudong Development Bank Hong Kong branch and Zhongtai International.Carol Chan


Sep 9 2019 ICBC (Green) US$1bn Sep 16 2022 3mL+67 100 3mL+67 -

Sep 9 2019 ICBC (Green) US$500m Sep 16 2022 2.25 99.81 T+80 2.316

Sep 9 2019 ICBC (Green) US$1bn Sep 16 2024 3mL+78 100 3mL+78 -

Sep 9 2019 ICBC (Green) HK$4bn Sep 16 2021 2.2 100 - 2.2

Sep 9 2019 ICBC (Green) Rmb1bn Sep 16 2020 3.1 100 - 3.1

Sep 9 2019 Longfor Group US$850m Sep 16 2029 3.95 99.071 T+247.5 4.064

Sep 9 2019 Wuhan Financial Holdings US$300m incr

(US$442m)

Dec 27 2021 5.8 103.658 - 4.1

Sep 9 2019 Severstal US$800m Sep 15 2024 3.15 100 T+167.8 3.15

Sep 10 2019 FWD Group US$600m Perpetual (Sep 2024) 6.375 100 T+487.6 6.375

Sep 10 2019 Country Garden US$500m Sep 17 2025 (Sep 2023) 6.15 100 - 6.15

Sep 10 2019 Shuifa Group US$400m Sep 17 2022 4.15 100 - 4.15

Sep 10 2019 SK Hynix US$500m Sep 17 2024 3 99.279 T+162.5 3.157

Sep 10 2019 Guangxi Communications

Group

US$300m Sep 17 2022 3.5 99.437 - 3.7

Sep 10 2019 Emaar Properties US$500m Sep 17 2029 3.875 99.762 MS+235 3.904

Sep 10 2019 IHS US$500m Mar 18 2025 (Sep 2021) 7.125 100 T+558 7.125

Sep 10 2019 IHS US$800m Sep 27 2027 (Sep 2022) 8 100 T+637.3 8

Sep 12 2019 Rail Capital Markets (JSC

Ukrainian Railways) LPN

US$94.902m

incr

Jul 9 2024 8.25 103.813 - 7.292

Sep 11 2019 Changde Urban Construction

and Investment

US$200m Sep 18 2022 5.8 100 - 5.8

Sep 11 2019 Alpek US$500m Sep 18 2029 4.25 99.718 T+255 4.285

Sep 11 2019 Government of Jamaica US$815m Jul 28 2045 7.875 127.612 0 5.8

Sep 11 2019 Tianjin Binhai New Area

Construction

US$300m Sep 18 2022 5.875 99.661 - 6

Sep 11 2019 Bank of Sharjah US$600m Sep 18 2024 4 99.933 MS+250 / T+243.3 4.015

Sep 12 2019 Bank of East Asia (AT1) US$650m Perpetual (Sep 2024) 5.875 100 T+425.7 5.875

Sep 12 2019 Huai’an Traffic Holding US$300m Sep 19 2022 6 99.46 - 6.2

Sep 12 2019 PLN ¥3.7bn Sep 20 2022 0.43 100 OS+50 0.43

Sep 12 2019 PLN ¥18.5bn Sep 20 2024 0.87 100 OS+93 0.87

Sep 12 2019 PLN ¥1bn Sep 20 2029 1.05 100 OS+100 1.05

Sep 12 2019 Chelpipe US$300m Sep 19 2024 4.5 100 MS+293 4.5

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 13/9/2019




3mL+95 area,

3mL+67/70

- US$1.5bn A1 ICBC/ABCHK/BAML/BoC/BoCom/

BNPP/CBA/CA-CIB/Industrial/

HSBC/SMBC Nikko/StCh/UBS

Asia 94%, Eur 6%. Bks 79%, FM 11%, Ins

7%, PB/Other 3%.

T+105 area - US$1bn A1 ICBC/ABCHK/BAML/BoC/BoCom/



Bks 46%, Public Sec 35%, FM 16%, PB/

Other 3%.

3mL+105 area,

3mL+78/80

- US$1.6bn A1 ICBC/ABCHK/BAML/BoC/BoCom/



Asia 98%, Eur 2%. Bks 79%, FM 8%,

Public Sec/Ins 9%, PB/Other 4%.

2.45% area - HK$5.3bn A1 ICBC/BoC/CBA/HSBC/StCh Asia 99%, Other 1%. Bks 59%, FM/Ins

27%, SWF/CB/Other 14%.

3.4% area,

3.1%/3.15%

- Rmb2.2bn A1 ICBC/BoC/CA-CIB/StCh EMEA 65%, Asia 35%. Bks/CB 90%,

AM/FM 7%, PB 3%.

T+280 area,

T+250 (+/-2.5)

- US$2.8bn Baa3/BBB-/BBB Citi/GS/Haitong/HSBC/MS/Barc/

CICC

Asia 79%, Eur 21%. FM/Corp 64%, Public

Sec 22%, Ins 7%, Bks/FI 7%.

4.7% area,

4.1%

- - - GCs CICC/StCh, JBs Industrial/BOC/

CMBCHK/BoCom/SPDB/CMBC Cap/

Everbright HK/PingAn/Orient

-

3.5% area,

3.375% area,

3.15%

- US$1.9bn Baa2/BBB-/BBB GCs Citi/JPM/SG, JBs ING/SBER/VTB US 22%, UK 16%, Eur 23%, Russ 30%,

Asia 9%. AM/FM 62%, Bks/PB 31%,

Ins 7%.

6.5% area - - - CMSHK/DB/HSBC/JPM/Miz/SMBC

Nikko/StCh/UBS

-

6.625% area Neg US$2.3bn -/-/BBB- MS/GS/BNPP Asia 93%, EMEA 7%. AM 55%, Corp

29%, UHNWI/Bks 9%, PB/Other 7%.

4.625% area - - Baa3 GCs CICC/Guotai Junan/Zhongtai,

JBs CISI/CNCBI/Industrial/BOCOMI/

Orient.

-

T+190 area - US$3.5bn Baa2/BBB- BNPP/Citi/CS Asia 85%, EMEA 15%. AM/FM 82%, Ins

11%, Bks 6%, PB/Other 1%.

4% area - US$1bn Baa2/-/BBB CCBI/CSI/BoC/BOCOMI/ICBCI/DBS/

CMBCHK/CNCBI.

HK 65%, SG 14%, Other 21%. Bks/FI

48%, AM/FM 47%, PB 5%.

MS+270 area,

MS+250/255

- ~US$2.3bn Baa3/BBB- StCh(GC)/DIB(struct)/DB/ENBD/

FADB/Mashreq/SIB

MENA 42%, Asia 34%, Eur 22%, US 2%.

FM 54%, Bks 35%, PB 5%, Agcy/Corp/

Other 6%.

7.5% area,

7.25% (+/-12.5),

7.125%

- >US$1.4bn B2/B+/B+ GCs Citi/GS/StCh, JB ABSA/JPM/

Rand

-

8.375% area,

8.125% (+/-12.5),

8%

- >US$2.2bn B2/B+/B+ GCs Citi/GS/StCh, JB ABSA/JPM/

Rand

-

- - - -/-/B- JPM/Dragon -

6.1% area - - -/-/BB+ BoC/BOSC/CNCBI/Industrial/CMBC

Cap/Central/BOCOMI/Huatai/CSI/

Dongxing

-

2.875% area,

T+260a (+/- 5)

- - Baa3/BBB-/BBB- Citi/HSBC/JPM/MUFG -

5.85% ( +/-5) - - B3/B BAML/Citi -

6% (the #) - - Baa2/-/BBB+ StCh/BoC/HSBC/ABCI/Guotai

Junan/Industrial/Haitong/CCBI/

BNPP/CNCBI/CMBC Cap/Wing

Lung Bank/Orient/SPDB/Zhongtai/

Everbright SHK

-

MS+high 200s,

MS+270 area

- >US$1.85bn -/-/BBB+ ABC/ENBD/1ADB/JPM -

6.25% area,

5.875%/6%

- US$3.8bn Ba2/BB BEA/Citi/CA-CIB/GS/HSBC/SMBC

Nikko

Asia 93%, EMEA 7%. FM/AM 59%, PB

29%, Bks/FI 8%, Corp/Other 4%.

6.5% area - US$650m -/-/BB Guotai Junan/Haitong/CMBC Cap/

Industrial/Orient/SPDBI

Asia 99.9%, Eur 0.1%. Bks 69%, AM/FM/

FI 30%, PB 1%.

OS+45/65,

OS+47/55,

OS+49/51

- - Baa2/BBB/JCR BBB MUMSS/Miz/Nomura/SMBC Nikko -

OS+75/95,

OS+80/93,

OS+87/93


OS+90/105,

OS+95/100,

OS+98/100


4.75%/5%,

4.625%/4.75%,

4.5%

- >US$1bn Ba3/-/BB- GCs Citi/Gaz/JPM/SG, JB RenCap UK 30%, Russ 28%, Eur 23%, Asia 14%,

USA 5%. AM/FM 52%, Bks/PB 48%.


The Chinese coke producer had only

of short-term debt repayments, according to

onshore bonds that turn puttable from

US$500m bond issue due in October 2020.

weakens further.The 2020 bonds were bid at a cash price

of 59 last Tuesday, according to Tradeweb.

HILONG BOND TO FUND TENDER

HILONG HOLDING is planning to issue new US dollar bonds to fund a buyback of some of

22 2020.

US$1,003.75 per US$1,000 in principal amount of notes accepted under the

for priority in the new bond offering.

amount of 2020s it plans to purchase under the tender.

for the 12 months ended June 30, as well as

The tender offer is not considered a

could face downward rating pressure if it failed to complete the proposed

CLSA, HSBC and SPDB International are dealer-managers for the offer, and DF King is information and tender agent.

The tender offer deadline is September

priced on or around September 18.

MANDATES GALORE

CHONGQING INTERNATIONAL LOGISTICS HUB PARK

CONSTRUCTION

has hired banks for a proposed offering of US dollar senior unsecured notes.

Citigroup, DBS Bank and BOC International

They are also bookrunners and lead managers with China Citic Bank International, CEB International, China Minsheng Banking Corp Hong Kong branch, Guotai Junan International, ICBC International, Bank of China, CMB International, Shanghai Pudong Development Bank and China Construction Bank.

last week and further meetings are

The issuer, formerly known as

municipality in 2007 as the sole operator,

unsecured notes.QINGDAO CITY CONSTRUCTION INVESTMENT

(GROUP)

proposed offering of US dollar bonds.Bank of China, China International Capital

Corp, Industrial Bank Hong Kong branch, ICBC International and China Minsheng Banking Corp Hong Kong branchcoordinators. They are also bookrunners and lead managers with Zhongtai International, CMB International, Huatai Financial Holdings (Hong Kong), China Securities International and BoCom International.

the eastern Chinese coastal city of Qingdao

Singapore, starting on Monday.

undertaking and standby facility agreement.

SHANDONG IRON & STEEL GROUP has hired banks for a proposed offering of US dollar senior bonds.

DBS Bank, Bank of China, CEB International, Standard Chartered Bank and Zhongtai International are global coordinators as well as bookrunners and lead managers with BoCom International, Huatai Financial Holdings (Hong Kong), ICBC International and Orient Securities (Hong Kong)

The proposed bonds will be issued by indirectly wholly owned subsidiary

the state-owned parent.

ZENSUN GROUP has hired banks to lead a

Guotai Junan International, CMB International and CLSA are bookrunners.

proposed senior unsecured bonds with a

WUHAN METRO GROUP

offering of US dollar green bonds off a

ICBC International is sole global coordinator, together with Bank of China and HSBC as lead managers and

The metro operator in Wuhan, the

issuer.


GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 13/9/2019 (CONTINUED)


Sep 12 2019 MHP US$350m Sep 19 2029 6.25 100 MS+458 / T+445.9 6.25

Sep 12 2019 Pemex US$1.25bn Jan 23 2027 6.49 99.954 - 6.5

Sep 12 2019 Pemex US$3.25bn Jan 23 2030 6.84 99.939 - 6.85

Sep 12 2019 Pemex US$3bn Jan 23 2050 7.69 99.899 - 7.7

HONG KONG

FWD GROUP SELLS US$600m PERP

FWD GROUP

which operates in South-East Asia and Japan

July, intends to use the proceeds for

2024, US$750m zero-coupon subordinated perpetuals and preference shares in the

rank below all its senior preferred obligations including its banking facilities. The offering circular makes it clear that they are not senior bonds.

The issuer has the option to call the bonds at 101 or add a 500bp coupon step-up if

There is also an issuer call option at 101 if

time of writing but orders were said to be in

China Merchants Securities (HK), Deutsche Bank, HSBC, JP Morgan, Mizuho Securities, SMBC Nikko, Standard Chartered Bank and UBS were global coordinators, bookrunners and lead managers.

BEA PRINTS AT1

BANK OF EAST ASIA

of US$3.8bn from 215 accounts, including US$220m of demand from the leads.

BEA, Citigroup, Credit Agricole, Goldman Sachs and HSBC were global coordinators as well as lead managers and bookrunners with SMBC Nikko. Bank of America Merrill Lynch, CCB International, China Citic Bank International, CMB Wing Lung Bank, DBS Bank, Standard Chartered and United Overseas Bank were lead managers.

GENTING HK HIRES

GENTING HONG KONG has mandated UBS as sole

with DNB Bank and Maybank for a potential US dollar unrated senior unsecured bond issue.

including cruises, shipyards and resorts, and it

INDIA

ADANI GROUP EYES US$1.5bn BONDS

bankers to raise up to US$1.5bn from offshore bonds in the coming months, according to sources close to the plans.

ADANI TRANSMISSION

from long-tenor bonds. The deal format is yet to be decided, but the funds will mainly

Meanwhile ADANI GREEN ENERGY

June, the renewable energy company priced a US$500m 5.5-year senior secured green

would be for a longer tenor.

interest costs remains unchanged at 450bp

thanks to incremental earnings contributions from the Mumbai integrated

would create a material funding

seeking comment.

AZURE POWER PLANS GREEN BONDS

AZURE POWER GLOBAL has hired banks for a proposed benchmark-sized offering of US




7% area,

6.75% area,

6.5%/6.625%,

6.25%/6.3%,

6.25%

- >US$1.89bn -/B/B+ ING/JPM -

6.75% area,

6.5% (the #)

- - Baa3/BBB+/BB+ Citi/GS/HSBC/BAML/Credit

Agricole/CIB/Mizuho

-

7.25% area,

6.85% (the #)


Agricole/CIB/Mizuho

-

8% area,

7.7% (the #)


Agricole/CIB/Mizuho

-

Barclays, Credit Suisse and HSBC are global coordinators, as well as bookrunners with Jefferies, JMP Securities, MUFG, Roth Capital Partners, Societe Generale, Standard Chartered Bank and Yes Bank.

power producer is the guarantor.

to issue up to US$345m of bonds due 2024.

The net proceeds will be used to subscribe to onshore debt to be issued by restricted

debt.The restricted subsidiaries include 10

entities that operate solar generation assets

INDONESIA

PLN MAKES MODEST SAMURAI DEBUT

PERUSAHAAN

LISTRIK NEGARA

has raised ¥23.2bn (US$215m) from a debut

bonds.

The ¥3.7bn three-year tranche was priced

coupon, and the ¥1bn 10-year tranche was

coupon.

tranche.

banker on the deal said of the spread in the US secondary market.

participated in the deal. The three-year tranche attracted asset managers and

asset managers, banks, regional banks and shinkin banks, and the 10-year was bought by shinkin banks. Life insurers were key buyers.

The guidance ranges at the start of

tranche, which was later dropped.Mitsubishi UFJ Morgan Stanley, Mizuho,

Nomura and SMBC Nikko were the lead managers on the deal.


SK Hynix brings back memories SOUTH KOREA Chip-maker prints first dollar bonds since financial crisis

SK HYNIX, rated Baa2/BBB– (Moody’s/S&P),

made a flashy return to the offshore market with

its first standalone US dollar bond issue since the

financial crisis.

The South Korean semiconductor

manufacturer on Tuesday sold US$500m

of 3% five-year senior unsecured bonds via

bookrunners BNP Paribas, Citigroup and Credit Suisse at 99.279 to yield 3.157%. This was

equivalent to Treasuries plus 162.5bp, and well

inside initial guidance of 190bp area.

There are no similar credits in Asia, so the

leads looked at South Korean industrial issuers

such as steelmaker Posco and oil refiner GS

Caltex, as well as SK Telecom, which owns a 20%

stake in SK Hynix. Low Single A or Triple B South

Korean credits were seen at around 100bp–

120bp over Treasuries at five years.

In the memory sector, US-based Micron

Technology had a bond issue due February 2024,

rated Baa3/BB+/BBB–, quoted at Treasuries

plus 197bp, providing another pricing reference.

A lead estimated that SK Hynix had paid next

to no new issue premium, helped by its scarcity

value, plus the extra yield it offered compared

with higher-rated South Korean credits.

The bonds were around 12bp tighter on

Wednesday.

Books were over US$3.5bn from 196 accounts,

with Asia taking 85% of the Reg S bonds and

EMEA accounts 15%.

SK Hynix has no other US dollar bonds. Its last

foreign currency issue was in June 2012, when it

issued a US$100m five-year floater guaranteed

by Shinhan Bank, but before that its last public

offshore deal was in 2007 – when it was just

called Hynix.

In 2012, SK Telecom acquired a stake of

about 20%, becoming the chip-maker’s largest

shareholder. The company was bailed out in

2001 when South Korean institutions such as

Korea Finance Corp, Korea Exchange Bank and

Woori Bank became shareholders after providing

rescue funds, and they gradually sold their

shares over subsequent years.

Bondholders can put the bonds at par if SK

Telecom and its affiliates cease to own at least

a 20% stake, or if Hynix’s ratings from either

Moody’s or S&P drop below investment grade.

Hynix had previously issued in the 144A format

to reach US investors that are familiar with the

semiconductor industry. Arrangers on the new

issue said that a Reg S offering was chosen to

reduce execution risk, but noted that many US

fund managers could now participate through

their branches in Hong Kong or Singapore, some

of which did not exist in 2007.

By investor type, asset managers and fund

managers booked 82%, insurers 11%, banks 6%,

and private banks and others 1%.

RISING LEVERAGESK Hynix has faced some headwinds this year,

and Moody’s in July revised the company’s

outlook to negative. This was due partly to

mounting debt in the first half of this year and

partly because Japan recently tightened controls

of exports to South Korea of some materials

needed to produce semiconductors.

This month, Japan removed South Korea from

its export white list, a preferential status for trade

partners. Fitch said that would have only a minimal

impact on the South Korean semiconductor sector,

as it does not constitute a complete ban on the

supply of materials used to make chips, and South

Korean manufacturers are seeking alternative

suppliers as a contingency plan.

A bookrunner said some investors had been

concerned about the impact of Japanese export

restrictions, but it had not precluded them from

placing orders, albeit after factoring in a premium.

SK Hynix recorded net income of W537bn

(US$451m) in the second quarter, down 51%

from the previous quarter and down 88% year-

on-year. It announced plans to cut production

capacity for dynamic random access memory

(DRAM) chips, which are used in computers and

smartphones, from the fourth quarter to adjust

to reduced demand, and shift production to

CMOS image sensors, which are used in things

such as digital cameras, from the second half.

However, Fitch wrote this month that it

expects the memory semiconductor market

to stabilise towards 2020, with the market

for NAND flash memory, which is used in

smartphones and tablet PCs, likely to improve

before demand for DRAM chips.

Daniel Stanton

MALAYSIA

MALAYSIA HOPES FOR BETTER SAMURAI TERMS

MALAYSIA has agreed with Japan to make another 10-year Samurai bond issue at

one in March, its national news agency reported.

sale in March.

media conference that Malaysia has

Minister with those representing the

the Samurai bond, it agreed to reduce the

full cost to the issuer, including fees to

earlier Samurai bond.

Malaysia can really be assured of a lower interest rate because the market

Malaysia priced ¥200bn (US$1.9bn) of

about ¥320bn. The proceeds were used to

administration.

SOUTH KOREA

SHINHAN HIRES FOR EURO GREEN

SHINHAN BANK BNP Paribas, Credit Agricole, Credit Suisse, HSBC and Societe Generalemeetings in Europe from September 17.

A euro-denominated benchmark sized

offering with an intermediate maturity may follow.

SRI LANKA

CENTRAL BANK SENDS RFP FOR SAMURAI BOND

CENTRAL BANK OF SRI LANKA

underwriters for an offering of Samurai

issue in yen.

EUROPE/AFRICA

ARMENIA

REPUBLIC SPOTS PRIME OPPORTUNITY TO GO LONG

ARMENIA

Armenia is looking at issuing US dollar bond with a tenor of 10-15 years, in what

run to the bond market is being timed to

search for yield and duration. Armenia has

Armenia’s new issue will primarily be

of which US$500m is outstanding. The

purchase price is 103.375. The notes were

The roadshow began on Thursday. The

Citigroup and JP Morgan are lead managers and bookrunners.

EGYPT

SOVEREIGN HINTS AT BORROWING

EGYPT intends to issue international bonds

Maait said last Monday.

currencies in which it issues bonds to ensure hedging within the portfolio, Maait said during an economic conference in Cairo.

abroad since a US$12bn package was agreed

repayment schedule, analysts say.

on a downward trend and should drop to

ended in June, he said.

the sidelines of the Euromoney Egypt conference.

“We tried last year, but there are a lot of

The ministry is also looking at issuing green bonds and sukuk but is not

issuance, Maait said.

bonds could allow Egypt to attract new types

economic reform programme draws to a close.

“We are targeting something between US$3bn as a minimum and US$7bn as a

Last year, the ministry issued more than

and yen, yuan (renminbi) and green bonds, but the plans did not materialise.

he said, “because it doesn’t need any legal


EMERGING MARKETS EUROPE/AFRICA

Maait also said some progress has been made on the procedures necessary to issue bonds in yen and yuan but did not elaborate.

NIGERIA

IHS NAVIGATES DEBT LIMITS FOR DUAL-TRANCHE REFI DEAL

IHS

US$1.3bn through a two-part bond comprising a US$500m 5.5-year non-call two

The tender is designed to redeem the bonds without paying the current call price of 104.75. That price falls to 102.375 on October 27.

Total payout on the tender is 102.875, including a half-point early bird premium.

switch out of the 2021s and buy the new issue.

other debt, including an intercompany

The company’s total needs are US$1.8bn. A US$1bn credit facility is in place, split into dollars and naira.

instead of the initial US$800m target, the size of the dollar portion of the loan will fall commensurately.

banker close to the deal.One of the stipulations of the bond is that

the company’s debt incurrence ratio doesn’t

is to put the deal’s proceeds into escrow so

sheet.There was also a structural tweak from

the company’s last outing in the market by

guarantors.

A recent note from Moody’s said enlargement of the restricted group of

Marketing for the trade, which is

area for the September 2027s. The best

Leads were able to tighten pricing by 37.5bp on both tranches although the eight-year drew more interest, at US$2.2bn compared with US$1.4bn.

the lead.One banker thought the pricing was a

Citigroup, Goldman Sachs and Standard Chartered were the global coordinators. They

ABSA Bank, JP Morgan and Rand Merchant Bank.

ZENITH BANK will buy back almost US$393m

The repurchase price was 108.50.Citigroup and Goldman Sachs were dealer

managers.

RUSSIA

ORPORATES GRIND DOWN THE YIELD

week, with both corporates securing tight prints.

SEVERSTAL whittled away at the price and beefed up the size of its September 2024 offering on Tuesday to US$800m.

The steelmaker had contemplated going

opted to keep the tenor shorter to keep the focus on pricing.

Once it was clear that the issuer’s pricing target could be met, the focus shifted to bulking up the offering.

that, they started to look at the size component. They managed to get both their

There was some fall away in the book from its US$2.4bn-plus peak, dropping back to settle at more than US$1.9bn.

ratings agency said that of the US$4.5bn-

US$1.5bn-$2bn would be obtained through debt.

Citigroup, JP Morgan and Societe Generale

CHELPIPE raised US$300m on Thursday through a September 2024 offering in its inaugural international trade.

offering a smaller trade, the steel tube manufacturer stirred up a pricing debate.

One key comp was steelmaker and

Thursday.“There was a lot of interesting debate

at Renaissance Capital, a lead manager.

indicated a number of approaches to pricing.



Europe/Africa


1 JP Morgan 32 10,059.61 15.1

2 Citigroup 35 9,694.42 14.6

3 BNP Paribas 14 5,361.97 8.0

4 VTB Capital 9 4,243.59 6.4


6 Gazprombank 6 3,944.36 5.9

7 HSBC 10 2,871.77 4.3


9 SG 11 2,277.72 3.4

10 Deutsche Bank 7 2,262.69 3.4

Total 73 66,628.09



of the allocations.“The size of US$300m is smaller than

some other corporate benchmarks, but the

to Asia and the rest to the US.The proceeds will be used to partly

Citigroup, Gazprombank, JP Morgan and Societe Generale were global coordinators and

SLOVAKIA

PRIMA BANKA TEES UP DEBUT COVERED

PRIMA BANKA SLOVENSKO announced a mandate for a European roadshow on Monday, ahead of an inaugural

intermediate to long tenor and should be rated Aaa by Moody’s, will be backed by

The Commerzbank analysts said that

€4bn is well below the €10bn-€20bn

“Still, it is present across the country and comes close to the big three in terms of the

portfolio with a focus on residential mortgages

2018, which replaced an outdated framework.

already stepped into the market to issue in benchmark size.

The roadshow will run from Monday to Wednesday.

Commerzbank, DZ Bank and LBBW are leads.

MIDDLE EAST

KUWAIT

WARBA BANK SIZES UP SUKUK OPTIONS

WARBA BANK has hired banks

sukuk.

141bp.

case of need.

which are moderated by rapid growth and high credit concentrations.

Moody’s analysts.Warba sold a US$250m Tier 1 perpetual

the Middle East before wrapping up in London on Monday.

BNP Paribas, Emirates NBD Capital and Standard Chartered are global

bookrunners by Abu Dhabi Islamic Bank, Bank ABC, Dubai Islamic Bank, NBK Capital and QNB Capital.


EMERGING MARKETS MIDDLE EAST

MHP blazes through sovereign’s curve

UKRAINE Chicken company proves popular with investors

MHP sold a US$350m September 2029 at 6.25%

on Thursday, in another demonstration of the

appetite for Ukrainian assets.

The poultry producer took the maximum

amount it had been seeking, and also shifted the

price 75bp from IPTs of 7% area.

The final yield was well inside Ukraine’s

secondary - the sovereign does not have a 2029

point on its curve but its September 2032s are

bid at 6.71%, for example.

At final guidance the deal was nearly 5.5

times covered, which allowed leads to pull in

pricing to the extent they did.

For some investors it proved too much.

“I expected the new issue to come slightly

inside the government curve, but with some

premium on top of that. I thought fair value

was 6.50% or even 6.625%, so this looks very

tight and we won’t go there,” said Vitaliy Sivach,

trader, fixed income and forex at asset manager

ICU.

“The demand was huge. Everyone likes it

because of its stable revenues and Ebitda. It is

one of the best credits in Ukraine.”

Research firm Gimme Credit has an

‘outperform’ view on the company, stating that it

expects its strategy to cautiously grow through

corporate acquisitions, while internal investment

programmes will ultimately support MHP’s credit

profile.

MHP is rated B by S&P and Fitch.

Olga Budovnits, portfolio manager at

Main Partner, said that MHP’s postcode has

historically meant that there was value on offer

for the credit, which she views as fundamentally

a Double B name.

“All the goodwill from investors about being

financially responsible, transparent and willing to

pay the debts - it finally paid off and the bond is

being priced at par with Double B [credits],” said

Budovnits.

Like many Ukrainian entities, MHP’s business

has been through the wringer since Russia’s

annexation of Crimea. The company only

returned to net profit in 2016, when it made

US$69m, after net losses of US$126m in 2015

and US$412m in 2014.

One big thing in MHP’s favour was that

despite all the hardships, and unlike other

corporates from Ukraine, it did not undertake a

debt restructuring and continued to service its

debt.

The proceeds will partly be used to refinance

short-term debt.

ING and JP Morgan were bookrunners and

lead managers.

UKRAINIAN RAILWAYS added a further US$95m

to its US$500m 8.25% July 2024s at 7.292% on

Tuesday, via JP Morgan and Dragon Capital.Robert Hogg, Sudip Roy

LEBANON

SOVEREIGN STILL MULLING PLANS FOR POSSIBLE DOLLAR DEBT SALE

LEBANON is still considering the possibility of a new dollar debt sale and has not yet

Lebanon for paying its debt obligations for the year would be to issue US$1.5bn-US$2bn

28.“The ministry has not announced any

issuance and has not taken any step yet

US$3bn sale in May 2018 that came shortly after a US$5.5bn debt swap with the central bank, which was issued with Eurobonds in

the rest of 2019.

maturity was instead paid off with the

Salameh on Thursday to discuss foreign and

how things are going and their stability

statement said.

growing regional political tensions and slow progress by politicians on enacting reforms needed to secure international donor funding and put the economy on a sound footing.

The yield on a 2021 maturing bond is

The only country to issue a dollar bond

year was Ecuador, which had a 10-year issue

Wednesday he passed the draft 2020 budget to cabinet - which will then debate it - with a lower

“We need now to sell more bonds in foreign currency that we will issue. The

with a plan for how we can work on attracting part of that amount that could maybe be between US$1.5bn-US$2bn, to

beforehand.

number of tools that complement each other. Within this are issuances at low interest rates, (and) a programme of issuing Eurobonds that we need from now to the

With one of the world’s highest debt burdens, low growth and crumbling infrastructure, Lebanon’s economy is struggling. The

delayed reforms to ward off a crisis.

outlook, saying it considered Lebanon’s

QATAR

BANKS EMBRACE PRIMARY REVIVAL

The resumption of the primary market has spread to Qatar, with AHLI BANK QATAR

senior unsecured offering.

outlook.

Other comparables could include

Al Khaliji, Barclays, Mizuho Securities, QNB Capital and Standard Chartered are lead managers and bookrunners.

COMMERCIAL BANK is planning to raise

Joseph Abraham said on Tuesday.Abraham said the bank, the country’s

third-largest lender by assets, will look into US dollar and euro bonds to raise the debt.

Taiwanese and Japanese bonds.Qatari banks, traditionally reliant on

became locked in a diplomatic dispute with Saudi Arabia, the United Arab

UAE

EMAAR SHAKES OFF PROPERTY BLUES

EMAAR PROPERTIES was able to keep its

Tuesday.

despite a growing sense of pessimism

its home emirate.Emaar had run into an early headwind,

said a lead.



Middle East




2 HSBC 25 5,834.58 9.8

3 Citigroup 14 5,287.99 8.9


5 JP Morgan 8 4,113.25 6.9


7 BNP Paribas 8 3,640.55 6.1


9 Natl Comml Bank 3 3,586.97 6.0


Total 63 59,329.30



INTERNATIONAL ISLAMIC FINANCE DEBTBOOKRUNNERS: 1/1/2019 TO DATE




2 HSBC 12 1,733.43 11.2

3 Kuwait Finance House 7 1,356.65 8.8

4 Dubai Islamic Bank 9 1,176.89 7.6

5 First Abu Dhabi Bank 11 1,153.71 7.5

6 Citigroup 6 1,058.13 6.8

7 Emirates NBD 8 795.38 5.1

8 Deutsche Bank 4 621.46 4.0

9 JP Morgan 4 589.58 3.8

Total 19 15,472.69



issuer is best in class and a dominant

The trade was opportunistically timed to

longer-dated deals.

September 2029s at swaps plus 270bp area.

sukuk, bid at 221bp. Other comparables

May 2029, spotted at 197bp, and a July

207bp.Leads tightened pricing for a print at

235bp.

remainder going to offshore US.

deeper downturn in the real estate market

market has seen residential prices slide by

Standard Chartered was global coordinator and Dubai Islamic Bank was

Deutsche Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq Bank and Sharjah Islamic Bank.

DUBAI has held talks with banks about a potential issue of US dollar-denominated bonds, two sources

sale since 2013.

pour money into the notes, as global buyers seek high-yielding assets in a low-

had raised US$1.25bn in 2013 through

Such a deal would come at a delicate

year grew at the slowest pace since a contraction in 2009, when it was hobbled by a debt crisis.

comment.

this year, has had talks with banks

considering issuing bonds which would be used for budgetary purposes, said the sources.

at least 10 years, they added.

BANK OF SHARJAH STIRS PRICING DEBATE

BANK OF

SHARJAH

started marketing in the high 200s.That stirred a debate in the market,

with bankers saying the pricing looked cheap.

from the deal.

159bp.

the March 2022s, were at plus 183bp.

he said.

of support … from the UAE authorities if

A lead said the aftermarket performance

trading up by 30 cents … if it were deemed

Bank ABC, Emirates NBD, First Abu Dhabi Bank and JP Morgan were the leads.

AMERICAS

ARGENTINA

CLEARSTREAM HOLDS DOLLAR PAYMENTS ON LOCAL ARGENTINE BONDS

Clearstream has put foreign currency proceeds on non-peso denominated, domestically issued Argentine securities on hold until further notice

week regarding capital controls.“This restriction implies that any income and

redemption proceeds due in currencies other than Argentinian pesos may not be collected on or paid to any account held by any legal person

market earlier last week that dollar proceeds on a September 2019 bond issued by real estate

Macri imposed capital controls earlier this month in an effort to stem a currency rout.

BRAZIL

BRF MANDATES BANKS FOR NEW BOND

BRF has appointed banks to lead a benchmark-sized note.

BB Securities, Bradesco BBI, BTG Pactual, Citigroup, Itaú BBA and Santandermeetings which began on September 12 and

The company also announced its intent to


EMERGING MARKETS AMERICAS


Latin America


1 JP Morgan 34 8,969.52 12.6

2 Citigroup 28 7,709.53 10.8

3 BAML 25 6,947.59 9.7

4 Santander 24 4,371.29 6.1

5 Goldman Sachs 15 4,189.30 5.9


7 HSBC 17 3,626.27 5.1

8 Scotiabank 15 3,357.48 4.7

9 Barclays 9 2,466.05 3.5

10 BNP Paribas 9 2,383.39 3.3

Total 98 71,442.10



UNIGEL MANDATES BANKS AHEAD OF DOLLAR OFFERING

UNIGEL PARTICIPACOES has mandated banks ahead of issuing a dollar deal.

Morgan Stanley and Bradesco will lead

issuance with intermediate maturity.

Together with the bond, the company is offering an any-and-all tender offer for its

The company was last in the market in

2024 bond.

JAMAICA

SOVEREIGN RIDES REFINANCING WAVE WITH TAP, BOND BUYBACK

JAMAICA returned to the bond market last Wednesday after a two-year hiatus to launch

trend across asset classes as borrowers rush

for yield amid ultra low rates across the globe.

data.This came as growth picked up and

consolidation efforts leading to reductions in the country’s hefty debt burden.

agreement.

logic in tapping a bond that was trading at such a high dollar price, when a new 2050

drawn larger demand.

coming with a dollar price of 127.70, which

trader.

The deal was part of a tender in which

129.00, 119.50 and 118.125.

could get much traction on high-coupon

Bank of America Merrill Lynch and Citigroup acted as dealer managers on the tender as well as lead managers on the bond offering.


JP Morgan reviews removal of Argentina from some indices

LATIN AMERICA Move would put pressure on passive managers

ARGENTINA was placed on watch last Tuesday

for possible removal from several local currency

indices produced by JP Morgan due to the

imposition of capital controls this month.

The move is expected to put index followers

in an awkward spot and in some case may force

them to sell at a loss.

“It will not make any difference to us,” said

Jan Dehn, head of research at EM investment

manager Ashmore.

“But it forces passive investors into liquidation

at a terrible time, ie near lows which they lock in

without hope of making their money back.”

The US bank said in a report last week that the

country is under review for potential exclusion

from its Government Bond Index-Emerging

Markets (GBI-EM) Global and Narrow index series

The Local Market Index (ELMI+) is also on

watch ahead of its quarterly rebalancing on

September 30.

“Countries with explicit capital controls are

not eligible for the GBI-EM Global and Narrow

series, as per the index rules and methodology,”

the bank said.

Argentina accounts for about 0.17% of the

GBI-EM Global Diversified index. If excluded, it

will not be eligible for re-inclusion for a minimum

of 12 months.

Three of its Bote bonds are included in the

index: its October 3 2021, October 17 2023 and

October 17 2026, which have been yielding

96.02%, 57.69% and 46.35%, according to JP

Morgan.

Together, principal value on the notes is about

Ps223bn, or about US$3.8bn, as of the end of

August, but market value is closer to US$1.6bn,

the bank said.

NO SURPRISE

The move surprised few in the market, as the

criteria on those particular indices calls for

the removal of bonds issued by a country that

imposes capital controls.

“This was a foregone conclusion after they

reintroduced capital controls and made it very

difficult for non-residents to convert peso holding

maturities and coupon payments into dollars

over very strict limits,” said Patrick Esteruelas,

head of research at Emso Asset Management.

The government imposed capital controls at

the beginning of September following a sharp

decline in its currency, which hit 60 against the

dollar at one point.

The government has also called for a debt

reprofiling of billions of dollars in local and

international law bonds as well as debt extended

by the International Monetary Fund.

Argentines are now restricted to purchasing

US$10,000 a month and companies have to

request permission to distribute dividends abroad

or buy dollars in the foreign exchange market.

Exclusion from the index will impact passive

investors, forcing them to liquidate their

positions. It will also be an issue for investors

restricted from replicating the index.

The situation is a Catch-22 for investors who

will need to sell the debt but are limited by

capital controls.

“Unfortunately, a lot of investors are stuck

there,” said a New York syndicate banker.

“It’s tough for investors who are in the

index but now can’t get out because of capital

controls.”

JP Morgan said it would remove the bonds

from the index by November 29 if there were no

changes made to the capital controls.

About US$226bn in assets are benchmarked

to the GBI-EM suite of indices as of August, said

the bank.

The last country to be removed from the index

was Thailand also due to the implementation of

capital controls, in March 2007.

Argentina remains included in the broadest

GBI-EM index series, which allows the inclusion

of countries with capital controls as long as they

satisfy other criteria, the bank said.

The bank also said that there were no changes

to the country’s eligibility on hard currency

indices such as the EMBI and CEMBI.

Miluska Berrospi

FRONT STORY CHINA

PRC banks in loan trading plea Onshore banks call for relaxation of secondary market rules

Loan bankers in China are calling for a relaxation in rules to spur growth in the secondary loans market in the country and help them better manage their risk portfolios.

At a conference organised by the Asia

earlier this month, panellists bemoaned the regulatory hurdles that make it virtually impossible to engage in secondary market trading.

The China Credit Assets Registration & Exchange is tasked with building a regulated, transparent credit asset exchange market and promoting the transformation and upgrade of commercial banks’ business models.

Banks are calling for the removal of two key regulations that hamper loan trading.

exposures and the second requires extensive approvals to sell or exit a position.

Unlike elsewhere in Asia, banks in China are restricted from selling down part of a loan. They are only allowed to exit their position entirely in the secondary market. However, this is subject to approvals from all other members of the lending syndicate

intending to trade loans in the secondary market has to register itself as well as every transaction with the CCRE.

This has left many lenders frustrated as the cumbersome process has made it

this has also affected primary syndication.“In cases where a borrower gives us a tight

schedule to close and fund a loan, we are forced to close it as a club due to the lack of

restrictions have made it quite impossible for us to manage our exposures through further

banker alluding to a practice that is common in other parts of the Asian loan market.

MISSED DEADLINES

commitments in primary syndication due to lengthy internal approval processes. In such situations, they buy the loan in the secondary market after obtaining internal approvals, not too long after close of primary syndication.

“Typically we would not exit the facility entirely as we want some exposure too,” the banker added.

The CCRE has taken steps previously to bolster China’s secondary loans market by encouraging the use of one of its platforms to trade deals, albeit in a rather gradual manner.

Last year, it released new guidelines for the use of the credit assets transfer system, including migrating the signing of loan transfer documents online, and introducing a standardised registration process. These changes were intended to create a more transparent and effective trading venue and were based on an existing framework that had not been updated since 2016.

While Chinese bankers hold hopes that regulatory liberalisation would give the country’s secondary loan market a lift, not many are optimistic about a change in the risk culture of Chinese banks.

Unlike international lenders, many Chinese lenders prefer to hold on to loans until maturity and rarely sell their positions as they place greater value on the relationship with the borrower than portfolio management. The fact that other regional banks in Asia also take a similar approach is one of the main reasons why Asia’s secondary loans market has not

Europe.“It’s incorrect to even call Asia’s

secondary loans trading activity a proper ‘market’, as trades are basically done on a bilateral basis between two institutions without much transparency,” said a Hong

Apple Li

Mercuria launches US$1bn refi into syndication Trading giant seeks commitments to annual refi

general syndication. ANZ, Bank of China, DBS Bank, Emirates NBD, ICBC, ING, Mizuho Bank, MUFG, OCBC Bank, Rabobank, Societe Generale and SMBC are the mandated lead arrangers and bookrunners.

CTBC Bank joined as a Taiwan coordinator before the launch of syndication.

committed revolver and swingline facility

year committed revolver (Facility C2).

Proceeds from Facilities A, B and C1 will be

completed last November, and for general corporate and working capital purposes.

from November 2021 to November 2022.Banks can participate in either one or a

combination of Facilities A, B and C1.

MERCURIA ENERGY TRADING and MERCURIA ASIA

GROUP HOLDINGS

borrowers, while their ultimate holding

providing irrevocable and unconditional guarantees.

Chien Mi Wong, Apple Li


LOANS Cambodia China Hong Kong Japan Singapore Vietnam France Germany

South Africa UK United States Chile Leveraged Loans Restructuring


ASIA-PACIFIC

CAMBODIA

PRASAC MICROFINANCE UPS LOAN

PRASAC MICROFINANCE INSTITUTION, has increased

Cathay United Bank and Taishin International Bank were the mandated lead arrangers, bookrunners

equivalent in Cambodian riel.Cathay United (Cambodia) provided the riel

tranche, which was not syndicated.Cathay United Bank

(Cambodia), Bank of East Asia Labuan branch, Bank of East Asia Macau branch and First Commercial Bank OBU. Lead arrangers are KGI Bank, AfrAsia Bank, Bank SinoPac OBU, Chang Hwa Commercial Bank OBU, Hua Nan Commercial Bank OBU and Union Bank of Taiwan.

Arrangers are Shanghai Commercial & Savings Bank Singapore branch, Bank of Panhsin, Bank of Taiwan OBU, Chailease International Financial Services, Far Eastern International Bank, SinoPac Leasing – Grand Capital International, Sunny Bank, Taiwan Cooperative Bank OBU and Taiwan Shin Kong Commercial Bank Hong Kong branch.

Banks joining in senior syndication

participation fee of 60bp. Funds are for working capital for business expansion.

Pricing on the loan is very close to Prasac

Cathay United, Taichung Commercial Bank and

The borrower evolved from a project sponsored by the European Union and three ministries of the country’s government in

CHINA

SHANDONG QINGYUAN LIFTS LOAN

following commitments in syndication from 10 lenders, including a unit of commodity

participating as a lender in an Asian loan.

lender in loans for European and Latin American credits. ABN AMRO Bank, Commonwealth Bank of Australia, Deutsche Bank, First Abu Dhabi Bank and ING Bank were the mandated lead arrangers and

Other lenders are SMBC, Westpac, Bank of East Asia, Intesa Sanpaolo, ,

Chiyu Banking Corp, Chang Hwa Commercial Bank, Luso International Banking, Tokyo Star Bank and Korea Development Bank (Asia).

Libor and an average life of two years.

oil. The ratio of the contract value to the outstanding loan amount must be maintained

ChemChina seeks changes to 2018 term loan

CHINA State-owned chemical giant looks to change borrower and remove guarantee

State-owned CHINA NATIONAL CHEMICAL CORP is

seeking amendments to a US$5.5bn three and

five-year term loan signed in 2018, including

changing the borrowing entity and removing a

guarantee.

The company asked existing lenders on

August 27 to provide an initial indication of their

likelihood to agree to changes to the loan it

completed in March last year.

The new borrowing entity is not known and

ChemChina is seeking to remove 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.

The borrower on the loan is currently CNAC

CENTURY (HK), which is the parent of CNAC Saturn

(HK).

ChemChina and its unit China National

Agrochemical are also providing guarantees.

ChemChina is an indirect owner of CNAC Century

via CNAC.

ChemChina first held a conference call with

lenders to the 2018 loan on August 16 to inform

them of the proposed amendments.

CNAC Saturn (HK) is now an indirect parent

of Swiss seeds and pesticides maker Syngenta,

which ChemChina acquired in 2017 in a deal

worth SFr43bn (then US$43bn).

The US$5.5bn March 2018 loan refinanced

a US$12.7bn bridge facility that funded the

acquisition.

A total of 39 banks, including 15 mandated

lead arrangers bookrunners and equal

underwriters, participated in the 2018 bullet

loan, which is split into a US$3.85bn three-year

Tranche A and a US$1.65bn five-year Tranche B.

Top-level all-in pricing was 181.33bp and

215bp via opening interest margins of 153bp

and 195bp over Libor respectively for the two

tranches, based on ChemChina’s then ratings of

Baa2/BBB/A–.

ChemChina’s proposed amendment of the

2018 loan follows a handful of other capital

markets fundraisings this year. In late August,

CNRC International, a unit of ChemChina, closed

a €550m (US$618m) loan comprising a €150m

one-year Tranche A and a €400m three-year

Tranche B with a two-year extension option.

CNRC’s loan offered top-level all-in pricing

of 100bp and 150bp, based on interest margins

of 75bp and 125bp over Euribor, respectively, for

Tranches A and B. ChemChina is the guarantor.

Solar panel maker REC Solar Holdings, an

indirect unit of ChemChina, is in the market for

a US$150m three-year loan offering a top-level

all-in pricing of 170bp based on a margin of

150bp over Libor.

China National Bluestar (Group), parent of REC

Solar Holdings and a unit of ChemChina, is the

guarantor on the loan. In mid-July, China National

Bluestar priced US$700m of five-year senior

unsecured bonds at 99.717 with a coupon of 3.375% to

yield 3.437%, equivalent to Treasuries plus 157.5bp.

A month earlier, ChemChina itself raised

US$2.3bn from a four-tranche bond for debt

refinancing and general corporate purposes.

A US$300m 3.125% three-year, a US$900m

3.375% five-year, and a US$900m 3.875%

10-year tranche were priced at Treasuries plus

135bp, 155bp and 182.5bp respectively, while a

US$200m 30-year tranche was priced at 4.75%.

In mid-July, Syngenta’s chief financial officer

Mark Patrick reiterated ChemChina’s aim of

floating at least part of the Swiss company

by 2022. Syngenta’s first-half sales fell 7% to

US$6.8bn, while net income tumbled 34% to

US$798m, in part due to the bad weather and

global issues such as the US trade disputes with

China and Mexico.

Patrick said volatile weather in some of

Syngenta’s markets would play a role in the final

IPO decision, Reuters reported on July 19.

Apple Lam


LOANS ASIA-PACIFIC

HONGKONG HUIYANG INTERNATIONAL, a wholly

Technology are the guarantors.

GOERTEK LAUNCHES THREE-YEAR LOAN

revolving credit facility.ANZ and Standard Chartered Bank are the

mandated lead arrangers and bookrunners on the deal, which pays an interest margin

GOERTEK (HONG KONG) is the borrower, while the parent is the guarantor.

components and consumer items such as Bluetooth earphones and speakers.

INOVANCE POWERS UP DEBUT

syndicated loan market.INOVA

AUTOMATION is the borrower, while Inovance is the guarantor. Citigroup is the sole mandated lead arranger and bookrunner.

over Libor or Euribor and has an average life

of 10bp for banks committing by October 11.The deal carries a greenshoe of up to

electronic components for controlling machinery, cranes and elevators such as programmable logic controllers, power inverters and motors.

HONG KONG

CK ASSET EYES DEBT FOR GREENE KING

CK ASSET HOLDINGS has reached out to some

told a handful of relationship banks it is

acquisition if it is able to achieve low pricing.

HKEx to spice up loan market HONG KONG/UK Banks eye potential financing for HK bourse’s high-profile LSE bid

Asian and global banks are eyeing a role on a

potential multi-billion dollar debt financing to

support HONG KONG EXCHANGES AND CLEARING’s

£31.6bn takeover bid for the London Stock

Exchange.

The strong interest in the deal contrasts with

the negative reaction from equity investors after

Wednesday’s announcement caught market

participants by surprise. HKEx shares slid by

3.3% on Thursday as investors gave the takeover

proposal a cool response.

HKEx has tabled a conditional offer of about

£83.61 per LSE share through a combination of cash

and stock. It has not specified the size and tenor of

any financing, or named any banks providing debt.

Moelis is advising HKEx on the bid, which has an

initial deadline of October 9. The Hong Kong bourse

must have committed financing in place by that

date, under UK takeover regulations.

Several bankers pointed to HSBC as the likely

financing bank, given its close relationship with

HKEx and its involvement in the Hong Kong

bourse’s previous acquisition financing.

In June 2012, HKEx raised a £543m

(US$843m then) one-year bridge loan via

Deutsche Bank, HSBC and UBS to fund

its £1.4bn purchase of the London Metals

Exchange. That loan was priced at 65bp

over Libor with a step-up to 85bp. China

Development Bank also provided a US$1.8bn

three-year bilateral loan.

There is a high likelihood of other heavyweight

banks being involved this time given the large size

of the borrowing. Some estimated HKEx will borrow

up to £5bn, which represents a multiple of around

2.2 times the combined Ebitda of £2.26bn the Hong

Kong stock exchange and LSE generated in 2018.

GEARING RATIO

Fitch estimated that HKEx could need to

borrow up to around £6.5bn to fund the £7.3bn

cash component, depending on unrestricted

cash available at the time of closing. That would

push its gross debt to Ebitda ratio to 4.0 times

and pro forma gearing ratio to above 50%,

according to the rating agency.

HKEx has a publicly stated strategy to

maintain its gross gearing ratio (gross debt/

adjusted capital) at less than 50%.

The Hong Kong exchange operator was quick

to bring its gearing down after its purchase of

LME. In September 2012, only a few months

after it closed the acquisition loans, HKEx

completed a US$500m convertible bond issue,

again through Deutsche, HSBC and UBS.

HKEx has not borrowed in the loan markets

since. As of December 31 2018, its borrowings

amounted to a mere HK$1.17bn (US$149m),

representing a gross gearing ratio of 3%. LSE’s

gross borrowings at the end of last year totalled

£2.2bn, including £1.2bn in bank loans that carry

change of control provisions, according to its

annual report.

Jumbo acquisition loans from Hong Kong are

rare, and a £6.5bn facility would be the second-

largest acquisition financing from the city after

the US$12bn financing for PCCW’s buyout of

Cable & Wireless HKT in April 2000.

HKEx’s proposed acquisition of LSE

is conditional on the LSE terminating its

acquisition of data company Refinitiv, the parent

company of IFR. In August, LSE agreed to buy

Refinitiv in a US$27bn deal and is raising a

US$13.5bn bridge loan underwritten by Barclays,

Goldman Sachs and Morgan Stanley.

The bridge will refinance a US$13.5bn

leveraged loan and high-yield bond financing

that was put in place last year to support US

private equity firm Blackstone Group and its

consortium partners for their purchase of a 55%

stake in Refinitiv in October 2018 for US$20bn.

On Friday, LSE rejected HKEx’s offer, opting

to stick with its planned purchased of data and

analytics group Refinitiv. The LSE said it had

fundamental concerns about key aspects of the

proposal.

Prakash Chakravarti, Tessa Walsh, Apple Lam


multiple bilateral loans.

report.The acquisition is set to be completed in

the fourth quarter of this year, subject to approval from shareholders of both companies, and the European Commission, as well as sanction of the scheme of arrangement by the High Court of Justice in England and Wales.

HSBC while Citigroup and Rothschild are joint

hotels across the UK.

CP NEARS LOTUS DELISTING

Thai conglomerate Charoen Pokphand

CP LOTUS through bilateral loans.

CP HOLDING (BVI) INVESTMENT, a unit of Thai

announced plans in June to buy back the listed ordinary shares of CP Lotus for about

Extraordinary general meetings and court meetings for holders of ordinary and convertible

arrangement was dispatched on Wednesday.No cash is required for CP Holding’s

cancellation of the convertible preference shares.

Somerley CapitalCP Holding for the privatisation.

arranger and bookrunner Rabobank brought two banks into the deal, which

Last week, CPF INVESTMENT, a subsidiary of

loan after attracting 26 banks in syndication.

GOSHAWK AVIATION LOAN SOARS

eight banks in syndication.Agricultural Bank of China Hong Kong branch

was the sole mandated lead arranger and

China Everbright Bank Hong Kong branch, Development Bank of Japan, OCBC Bank, Philippine National Bank and Societe Generale Hong Kong branch joined as senior lead

China Minsheng Banking Corp is also a senior lead arranger. Lead arranger is Chong Hing Bank. Arranger is Dah Sing Bank.

Chang Hwa Commercial Bank, Land Bank of Taiwan, Shanghai Commercial & Savings Bank, Taiwan Business Bank and Far Eastern International Bank.

160bp over Libor.DIONYSUS AVIATION is the borrower on a

MAGUEY DUTCH

AVIATION

guarantor.

two borrowers in just over a year. In July last year, ABC Hong Kong branch led a

The deal attracted six other banks and

based on the same margin of 160bp over Libor.

mainly coordinated in Europe, with some Asian lenders participating. Citibank Europe is the facility agent.

Youyuan in hot water over covenant breaches

HONG KONG Paper maker’s shares suspended after plunging 86% on August 19

Hong Kong-listed paper manufacturer YOUYUAN

INTERNATIONAL HOLDINGS has found itself in hot

water after breaching covenants on HK$2.59bn

(US$331m) of debt, including a loan signed as

recently as March.

In a stock exchange filing on September

5, Youyuan said it could face a demand for

immediate repayment of all its outstanding

debt following an event of default relating to the

disposal of a 7.2% stake in Youyuan by lenders

and creditors in mid-August.

Youyuan chairman Ke Wentou and his wife

had pledged shares equal to 22.4% of the

company as collateral for loans. Smart Port

Holdings, one of Ke’s companies, had pledged

another 17.9% stake.

Ke’s lenders and creditors sold some of the

pledged shares after he and his wife were unable

to repay a personal loan. The disposal of the

shares on August 19 set off a chain reaction and

a double whammy of covenant breaches.

According to the September 5 filing, the

share sale constitutes an event of default on the

company’s bonds and loans totalling HK$2.59bn

as Ke and Smart Port now hold less than 30% of

unencumbered Youyuan shares.

Youyuan’s shares have been suspended

since plunging 86% on August 19 to HK$0.26,

triggering another covenant breach on a

US$135.5m-equivalent 3.5-year term loan it

signed in March. The terms of the loan stipulate

that Youyuan’s shares cannot remain suspended

from trading for more than 13 consecutive

trading days.

HSBC, the mandated lead arranger, bookrunner

and facility agent on the March loan, flagged the

possibility of the covenant breach, pointing out

that the trading suspension had to be lifted by

September 5. The stock remains on hold.

Lenders on the March loan have asked

Youyuan to provide additional security or

guarantees after meeting with company

executives.

The lenders also visited Youyuan’s factories

in China to investigate if they had resumed

operations. Youyuan has temporarily stopped

production at four of its five factories in Fujian

province to adjust its labour force and was

expected to resume operations on September 11,

but had not done so.

Banks have also appointed Mayer Brown

JSM as legal counsel and are also looking to

appoint an independent financial adviser to audit

Youyuan’s financial statements.

On August 30, Youyuan said in a filing that

the publication of its interim financial results

ending June 30 will be delayed. This could have

a bearing on the resumption of trading in its

shares.

The US$135.5m loan signed in March has

been fully drawn after HSBC syndicated the loan

to five other banks. It paid top-level all-in pricing

of 395bp, including an early bird fee, based on

an interest margin of 320bp over Libor or Hibor

and an average life of 2.975 years. Proceeds

refinanced a US$165m 3.5-year amortising loan

signed in May 2016.

Apple Lam


LOANS ASIA-PACIFIC

equal shareholders of the company.

LEO PAPER SIGNS SECOND GREEN LOAN

green loan, its second such borrowing in a year.

Bank of China (Hong Kong), Bank of East Asia, BNP Paribas, Citigroup, Hang Seng Bank, HSBC, Mizuho Bank and MUFG.

LEO PAPER GROUP FINANCE is the borrower.Funds are partly for a project aimed at

reducing energy consumption and carbon emissions at the company’s factory in

and to curb and treat waste at Leo Paper’s printing factories in China.

The remaining proceeds are for building

Vietnam, according to sources. The factory in Vietnam is expected to start production in 2021, according to the press release.

banks participating. Proceeds from that deal are for investments in green projects in

conservation, emission reduction, and waste

Hong Kong company to receive the green

through wholly owned subsidiary Leo Paper

JAPAN

TOKYO CENTURY TAPS FOR ACG

TOKYO CENTURY will fund its planned

loan and cash on hand.The bridge will be taken out with a

Completion of the acquisition is expected

Tokyo Century last tapped the syndicated loan market in July when it raised a ¥100bn

arranger.

JOGMEC SIGNS ZERO-INTEREST RATE LOAN

JAPAN OIL GAS & METALS NATIONAL CORP signed a

loan last Thursday, following a heavy oversubscription at seven times.

SMBC was the agent.

and proceeds will be for operating funds.

MALAYSIA

BATTERSEA SIGNS SELF-ARRANGED REFI

BATTERSEA PHASE 3

HOLDING

development of the third phase of London’s

CIMB Bank, DBS Bank Labuan branch, OCBC Bank, Maybank, and Standard Chartered were the mandated lead arrangers and

lead arranger.OCBC is the facility agent of the deal.Lead arranger is RHB Bank.

property project.

mandated lead arrangers, bookrunners and joint coordinators of the previous deal, which attracted four others in syndication and paid

In February, Permodalan Nasional and

commercial assets in Phase 2 of the development.

deal.

The power station building, comprising seven phases, accounts for about six acres of

project, initially scheduled for 2020, has been delayed and is now expected sometime in 2021 because of the project’s complexity and also due to Brexit, according to local media.

multinational conglomerate involved in sectors such as property, autos, industrial equipment, energy, utilities and healthcare.

SINGAPORE

AAA OILS & FATS COMPLETES A&E

AAA OILS & FATS

completed an amendment and extension of

Through the exercise, AAA Oils extended the maturity and reduced the pricing of Facility A, and amended several clauses on

Facility agent ABN AMRO Bank coordinated the A&E.

Lenders are Bank of Communications, China Minsheng Banking Corp, Emirates NBD, First Abu Dhabi Bank, ICICI Bank, Industrial & Commercial Bank of China, Shanghai Pudong Development Bank, China Everbright Bank, Taiwan Cooperative Bank, Taishin International Bank, National Bank of Kuwait, DZ Bank, Mega International Commercial Bank and Cathay Bank.

ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY

SYNDICATED VOLUME (INCLUDING JAPAN)BOOKRUNNERS: 1/1/2019 TO DATE


1 Mizuho 327 64,547.96 18.2

2 MUFG 477 42,639.51 12.1


4 Bank of China 142 22,185.05 6.3

5 Bank of Communications 61 13,112.19 3.7

6 HSBC 60 10,853.99 3.1


8 ANZ 52 9,182.85 2.6

9 Agricultural Bank of China 22 7,134.15 2.0

10 United Overseas Bank 25 6,940.86 2.0

Total 1,829 353,754.24

Proportional credit

Source: Refinitiv SDC code: S3a


and is now a revolver, while a separate

On Facility A, 11 of the 21 existing lenders exited the deal and have been repaid. Of the remaining 10 that rejoined and rolled over their commitments to Facility A, three banks came in with reduced amounts compared with their original exposures.

Bank of Communications Hong Kong

Hong Kong branch were the new lenders joining Facility A, which was drawn on

Existing lenders and their commitments to Facility B remain unchanged.

Facilities A and C have now been

Parent company and Indonesian palm oil

guarantor.

OLAM INKS SUSTAINABILITY-LINKED LOAN

OLAM INTERNATIONAL has signed a

margin linked to the company’s

goals.

and its subsidiaries.

subsidiary OLAM TREASURY, comprises

Interest margins are linked to the achievement of key performance indicators contributing to goals described as prosperous farmers and food systems; thriving communities; and regeneration of the living world.

The KPIs with be tracked and reported on by Olam’s corporate responsibility and sustainability team with an independent assessment of the achievement scores by

that have been approved by the banks.ANZ, BNS and Rabobank were senior

mandated lead arrangers, while Barclays, BBVA, Banco Santander, DBS Bank, HSBC and Standard Chartered Bank

Rabobank is sustainability coordinator,

loan in Asia to tie the interest margin to the borrower’s performance on environmental, social and governance metrics.

THAILAND

LENDERS PILE INTO CP FOODS

CPF INVESTMENT, a wholly owned unit of Charoen Pokphand Foods, has increased its

lenders joined in syndication.

bookrunners Kasikornbank and Mizuho Bank had launched the deal into syndication in

Lenders are Korea Development Bank, Korea Development Bank Singapore branch, Norinchukin Bank Singapore branch, Bank of Taiwan Singapore branch, Development Bank of Japan, First Commercial Bank OBB, Shinsei Bank, Sumitomo Mitsui Trust Bank (Thai), Bank of China (Thai), Bank of China (Hong Kong), Bank of the Philippine Islands, Taiwan Cooperative Bank Manila, E. Sun Commercial Bank, Hang Seng Bank, Chang Hwa Commercial Bank, Entie Commercial Bank, Taiwan Business Bank, Taiwan Shin Kong Commercial Bank, Yuanta Commercial Bank, Bank of Panhsin, BDO Unibank, CTBC Bank, Hua Nan Commercial Bank OBB, Hua Nan Commercial Bank Singapore branch, KEB Hana Bank Singapore branch, Shinhan Bank Singapore branch, Chugoku Bank, Hyakugo Bank and Shanghai Commercial & Savings Bank OBB.

The loan, carrying a letter of undertaking

shrimp farming operations and produces

VIETNAM

VPBANK FINANCE EYES EXTENSION

VPBANK FINANCE

for responses.Credit Suisse Singapore branch and Taishin

International Bank were the mandated lead arrangers and bookrunners of deal, which

lenders.

term of the loan.

EUROPE/MIDDLEEAST/AFRICA

FINLAND

TIETOEVRY LOAN SIGNED

IT services company TIETO and Norway’s EVRY.

June by bookrunners and mandated lead arrangers Nordea and SEB

extension option.The bridge loan is being provided by the

arranging banks and was not syndicated.

BNP Paribas, Danske Bank, DNB, ING, OP Corporate Bank and Swedbank year facilities as mandated lead arrangers while AIB, Bank of China and Helaba joined as lead arrangers.

After the merger, the net debt to Ebitda ratio of the combined company is expected to temporarily increase to above 2.0 times, but the company expects to achieve a targeted level of below 2.0 times in the medium term.

Under the merger, shareholders of EVRY will receive 0.12 new shares in Tieto and

the combined company and a total cash consideration of around €200m.

The merger is expected to close in the

2020 at the latest.The combined company will be called

TietoEVRY.

FRANCE

GECINA AGREES SUSTAINABLE LOANS

GECINA has

totalling €660m.


LOANS EMEA

The loans, which are provided by BNP Paribas, Natixis and Societe Generale, comprise new facilities and the conversion of existing credit lines, including a €200m loan from

The margin on the €200m loan is linked

social responsibility objectives: global real estate sustainability benchmark rating; carbon footprint targets on the path to a

company’s building portfolio.

more than 1,000 property owners and real

a standard for green buildings in France.

of €1.2bn bank loans, replacing various

2020 with facilities with an average maturity of nearly seven years.

margins on that loan were indexed to the

and carbon footprint, and workplace wellness and occupant productivity.

GERMANY

TEAMVIEWER LINES UP IPO LOAN

TEAMVIEWER has lined up a

leveraged loans.

that will be redenominated into sterling ahead of a utilisation request.

multicurrency revolving credit facility.

leverage grid.

Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch, Barclays, Commerzbank, LBBW, ING, RBC and Deutsche Bank are mandated lead arrangers.

agent.TeamViewer’s senior debt included a

revolving credit facility that was due to

MAHLE BAGS €1.8bn RCF

Automotive parts supplier MAHLE has

€1.6bn to support the company’s liquidity.

Commerzbank, SMBC and UniCredit were bookrunning mandated lead arrangers on

BNP Paribas, Deutsche Bank, HSBC and LBBW as mandated lead arrangers.

Citigroup, Credit Mutuel Arkea and Mizuho Bank were lead arrangers.

LBBW is facility agent while

and 10 years.

placement.The previous €1.6bn RCF was arranged in July

options, both of which were exercised.

GEWOBAG SEALS SCHULDSCHEIN

GEWOBAG has

BayernLB and LBBW.

estate company and it also features the

tranches of 12 years or more.

strong demand from more than 100 investors led to an almost eight times oversubscription and the transaction amount was increased.

Investors included insurance companies, pension funds, asset managers and savings banks.

PHOENIX SPREEDEUTSCHLAND AGREES TL

PHOENIX SPREEDEUTSCHLAND

debt facility on improved terms.

the company’s liability structure with the

Natixis Pfandbriefbank

additional facility.

debt with the remainder used for working capital and to fund other market opportunities.

An existing swap portfolio was restructured to provide interest rate hedging to match the new loan maturity.

The additional facility is available for

utilisation, drawn amounts carry the same

EMEA LOANS BOOKRUNNERS – FULLY

SYNDICATED VOLUMEBOOKRUNNERS: 1/1/2019 TO DATE



2 BNP Paribas 124 28,946.35 7.3

3 BAML 56 24,272.27 6.1

4 UniCredit 107 20,642.10 5.2

5 Deutsche Bank 69 20,216.42 5.1

6 SG 87 18,303.71 4.6

7 Citigroup 67 16,292.07 4.1

8 Commerzbank 89 15,147.42 3.8

9 JP Morgan 59 14,233.25 3.6

10 ING 94 14,009.91 3.5

Total 546 396,572.21

Proportional credit

Source: Refinitiv SDC code: R17


weighted average maturity remains unchanged at around seven years.

RUSSIA

POLYMETAL GETS SUSTAINABLE LOAN

Precious metals miner POLYMETAL

INTERNATIONAL

Societe Generale.The interest margin on the loan may

increase, stay unchanged or increase on an annual basis depending on the company’s

social indicators.The targets have been set in

implementing a comprehensive climate management system; ensuring tailings storage safety; reducing fresh water use; maintaining occupational health and

safety; and supporting and engaging local communities.

Under that loan Polymetal is committed to making further improvements to its environmental, social and governance performance.

for its environmental and social policies

Polymetal, which operates in Russia,

second largest gold producer in Russia.

SAUDI ARABIA

TASNEE SIGNS REFI

NATIONAL INDUSTRIALISATION CO has completed a

facilities with Saudi British Bank and Riyad Bank.

British Bank and Riyad Bank.

fully owned by the private sector.It is one of the world’s largest producers

of titanium dioxide and has interests in petrochemicals, chemicals, plastics, metals manufacturing, industrial services and environmental technologies.

SOUTH AFRICA

STANDARD BANK SEEKS US$500m

STANDARD BANK OF SOUTH AFRICA has mandated Citigroup, Industrial and Commercial Bank of China and Standard Chartered Bank as coordinators, bookrunners and mandated

more syndicated term loan.

for general corporate purposes including

institutions.

coordinators, bookrunners and mandated

operates in 20 countries in Africa.

SWITZERLAND

LONZA BANKS REFINANCING

LONZA has agreed a

extension of its existing term and revolving credit facilities.

general corporate purposes, includes a

GMS delays publishing results amid lender talksUAE Borrower seeks “long-term sustainable capital structure”

Abu Dhabi-based offshore contractor GULF

MARINE SERVICES is delaying the publication

of its interim financial results amid ongoing

discussions with its bank lenders.

The company said its results for the six months

ended June 30 – which were due to be published

on Wednesday – would be delayed due to

discussions with its banking syndicate, specifically

one lender regarding GMS’s continued access to

one of its working capital facilities, which provides

essential short-term liquidity.

“The company continues to seek to establish

an appropriate, long-term sustainable capital

structure with its lenders,” GMS said in a

statement.

GMS’s chief executive officer resigned last

month after the company warned profits would

fall this year.

The results are now expected to be published

before September 30.

GMS was last in the syndicated loan market

in January 2018 when it extended the maturity

of its existing syndicated loan that was originally

arranged in November 2015.

The maturity of the financing was extended

by two years to 2023, with scheduled loan

repayments reduced by two-thirds in both 2018

and 2019.

In addition, a cash sweep mechanism,

triggered when leverage exceeds 4.0 times

Ebitda, has been added from 2018, where 75%

of surplus free cashflow will be applied towards

repayment of bank debt.

The financing was originally arranged in

November 2015 for six years. It combined

Islamic and conventional financing, comprising

a US$375m term loan, a US$175m committed

capital expenditure facility and US$70m for

general working capital purposes, with a further

US$300m uncommitted facility.

Abu Dhabi Islamic Bank coordinated the

financing as bookrunner and mandated lead

arranger, alongside National Bank of Abu Dhabi,

Abu Dhabi Commercial Bank and HSBC Bank

Middle East as mandated lead arrangers.

Lead arrangers were National Bank of Kuwait,

ABC Islamic Bank and First Gulf Bank.

GMS is listed on the London Stock Exchange

and was founded in Abu Dhabi in 1977 and serves

the oil, gas and renewable energy industries from

its offices in the UAE, Saudi Arabia and the UK.

Sandrine Bradley


LOANS NORTH AMERICA

facilities.

leading to materially improved terms on the

with a total of 16 relationship banks committing to the facilities. Commitments

Bank of America Merrill Lynch and HSBC were

capsule product maker Capsugel with

Kantonalbank were bookrunners and

UK

BABCOCK ENGINEERS REFI

BABCOCK INTERNATIONAL has renewed its revolving credit facility for

swapped into sterling, pay a current interest

interest rate.Proceeds from the bond will be used to

pay down maturing loans and drawings

year ending 2021.

year extension options.

CIC were arrangers.

term loan with Lloyds Bank in February

capital purposes.

NORTH AMERICA

UNITED STATES

CATERPILLAR RENEWS US$10.5bn RCF

Heavy machinery maker CATERPILLAR signed

respectively.

loans.Citigroup and MUFG are lead arrangers and

bookrunners. Proceeds are for general corporate purposes.

fee.

100bp on both.

Lenders are Citigroup, Bank of America Merrill Lynch, JP Morgan, Barclays, MUFG, Societe Generale, BNP Paribas, Deutsche Bank, HSBC, ING, Lloyds Bank, Toronto-Dominion Bank, US Bank,

Commerzbank, Northern Trust, Standard Chartered, Mizuho, Wells Fargo, Bank of Nova Scotia, ICBC,

ANZ, KBC, China Construction Bank, Westpac, BBVA, Bank of New York Mellon and Itau Unibanco.

NYT SIGNS US$250m RCF

THE NEW YORK TIMES has signed an unsecured

The publishing company, which owns The New York Times newspaper and is

leader arrangers and bookrunners Bank of

America Merrill Lynch, Wells Fargo and JP Morgan.

Pricing is linked to leverage.When leverage is less than 1.0 times, the

loan pays 100bp over Libor; when leverage is

leverage is greater than 2.0 times it pays

The loan pays a 20bp commitment fee.

APOLLO MEDICAL GETS US$290m

Health management company APOLLO MEDICAL

HOLDINGS

over Libor.SunTrust Robinson Humphrey

arranger and SunTrust Bank is the administrative agent.

Preferred Bank, JP Morgan, MUFG and RBC are lead arrangers and bookrunners.

PARKER HANNIFIN SIGNS TL

Industrial conglomerate PARKER HANNIFIN has

The loans will mature one day before the

term loan facility.Keybank is the joint lead arranger, sole

bookrunner and administrative agent.It was joined by Citibank, HSBC, JP Morgan,

Mizuho, PNC, TD, Wells Fargo, Bank of America,Branch Banking, BNP Paribas, Bank of China,

Morgan Stanley, MUFG, Barclays, BNY Mellon, BBVA,

US Bank, Santander, Commerzbank, Bank of Communications and Northern Trust.

AMERICAS LOANS BOOKRUNNERS – FULLY

SYNDICATED VOLUMEBOOKRUNNERS: 1/1/2019 TO DATE


1 BAML 736 215,193.91 12.2

2 JP Morgan 678 212,238.76 12.0

3 Wells Fargo 590 149,622.50 8.5

4 Citigroup 389 132,533.46 7.5

5 MUFG 216 89,511.43 5.1

6 RBC 241 66,041.24 3.7

7 Barclays 228 61,495.03 3.5

8 Morgan Stanley 105 51,977.02 3.0

9 Scotiabank 173 45,720.44 2.6

10 BNP Paribas 132 45,162.28 2.6

Total 2,902 1,761,626.96

Proportional credit

Source: Refinitiv SDC code: R7


Pricing opens at 100bp over Libor based

LATIN AMERICA

CHILE

CMPC LOAN ATTRACTS SIX

Pulp and paper company EMPRESAS CMPC has

a foreign company in the country.

general syndication.MUFG was the sole mandated lead

arranger of the loan, which pays an

Participants are Gunma Bank, Hyakugo Bank, Iyo Bank, Shiga Bank, Bank of Kyoto and Joyo Bank.

The borrower was originally looking to

Loan Principles established by the Loan

its funding sources.

senior loan. BBVA was the agent on that deal, according to LPC data.

forestry and wood pulp operations in Chile,

Uruguay.

LEVERAGED LOANS

UNITED STATES

EDGEWELL SETS PRICE TALK

EDGEWELL PERSONAL CARE set price talk on a

products company Harry’s.

protection for six months.

of the margin plus Libor from the 101st day.Bank of America Merrill Lynch, MUFG,

Barclays, TD and Standard Chartered are

The proceeds, along with cash from the balance sheet and additional pro rata facilities, will be used to support the

Auction house SOTHEBY’S set price guidance

company’s acquisition by French media and

101 soft call protection. The loan will mature

Goldman Sachs and BNP Paribas are physical bookrunners.

years as a public company traded on the

ASCENSUS SPECIALITIES outlined the terms for

purchase of chemical company Callery.

and 101 soft call protection for six months.

to be determined.Antares Capital is leading the transaction,

which is unrated.Ascensus is a portfolio company of Wind

Point Partners.

ADVANCED DRAINAGE DETAILS LOAN

ADVANCED DRAINAGE SYSTEMS provided details

Proceeds from the loan, together with proceeds from a recently completed equity raise and an upcoming senior notes offering, will be used to fund the acquisition of

Pricing for the term loan is guided at a

six months of soft call protection at 101.Barclays, Morgan Stanley, Bank of America

Merrill Lynch, PNC, BMO, Fifth Third and HSBC are arranging the transaction.

management products and services.AUTOKINITON

GLOBAL GROUP has set price guidance on a

lien incremental term loan B and a

credit facility.

call protection for six months.Goldman Sachs, Bank of America Merrill Lynch,

Barclays, RBC and KKR are arranging the transaction.

of structured metal components manufacturer Tower International for

Pipeline operator BUCKEYE PARTNERS is

on Thursday that will support its acquisition

Investors.The TLB is expected to launch alongside a

Credit Suisse

debt.

are advising Buckeye on the sale.Buckeye owns and operates a network of

integrated midstream assets, including 6,000 miles of pipeline, more than 100

US LEVERAGED LOANS BOOKRUNNERS: 1/1/2019 TO DATE


1 BAML 377 67,288.48 11.6

2 Wells Fargo 295 59,492.73 10.3

3 JP Morgan 335 56,070.24 9.7

4 Citigroup 156 28,178.89 4.9

5 Barclays 138 25,090.09 4.3

6 Goldman Sachs 140 23,034.85 4.0

7 Credit Suisse 118 21,512.69 3.7

8 Deutsche Bank 127 19,953.99 3.4

9 RBC 104 17,024.42 2.9

10 PNC Financial 124 16,879.02 2.9

Total 1,451 579,099.93

Excluding Project Finance.

Source: Refinitiv SDC code: P2


LOANS LEVERAGED LOANS

products terminals. Its network of marine

ZELISREDCARD SEEKS US$1.65bn

Healthcare payment platform ZELISREDCARD

year revolving credit facility.

101 soft call protection for six months.Morgan Stanley, Deutsche Bank, UBS, Antares,

Credit Suisse, SunTrust, Jefferies and Goldman Sachs are joint lead arrangers and

administrative agent.

Proceeds from the funding back the

combined entity.The combination pairs RedCard’s

cost management and payment execution

healthcare payment platform.The transaction is supported by existing

Capital along with Bain.

following the merger with RedCard and its

Adjusted debt to Ebitda as of the 12 months ended in June was 2.1 times, however, pro forma with the new capital

Radio broadcaster CUMULUS MEDIA set price

six months.Bank of America Merrill Lynch is leading the

transaction.Proceeds, along with cash on hand, will

balance of its existing TLB due in 2022,

TLB is rated B.The new TLB is considered “relatively

through audio network Westwood One.VIRTU FINANCIAL is shopping a

The Jefferies

lien notes due 2022.The incremental loan will be combined

loan to fund its acquisition of agency execution services and trading analytics

at the time.

12 months of 101 soft call protection.

Investors weigh in on UFC’s US$465m return to the ring

US Promotion company secures improved media rights agreement with ESPN

Mixed martial arts promotion company ULTIMATE

FIGHTING CHAMPIONSHIP has closed a US$465m

leveraged loan, as the franchise benefits from an

improved media rights agreement with pay TV

sports channel ESPN that secures greater revenue.

UFC is adding the US$465m loan to an

existing US$1.875bn Term Loan B that matures

in 2026. That loan was trading over par in the US

secondary market in August, which encouraged

UFC to raise the new add-on loan.

“It’s an opportunistic trade for the UFC. Their

loan has traded very close to either side of par

and the momentum from the new media deal

was very well received,” a portfolio manager said.

UFC’s parent company, Hollywood talent

agency Endeavor Operating Company (formerly

WME-IMG), bought UFC for US$4bn in 2016.

Endeavor filed documents in March to go

public before the end of the year and is backed

by private equity group Silver Lake and investors

Canada Pension Plan Investment Board,

Singaporean sovereign wealth fund GIC and

Japanese technology group SoftBank.

Goldman Sachs, KKR, JP Morgan, Morgan Stanley

and Deutsche Bank are underwriting Endeavor’s IPO.

UFC signed an expanded media rights deal in March

2019 with Disney-owned sports television giant ESPN,

after inking the initial media rights deal in May 2018.

The agreement gives UFC more secure cash

flow and has improved investors’ view of the

company, which is also seeking to expand in the

Middle East after signing a new multi-year deal

with the Abu Dhabi government in September.

“After the ESPN deal, the ties to Disney, UFC

is back in the good graces of investors,” a second

portfolio manager said.

The expanded media rights deal with ESPN

includes pay-per-view events for UFC and

extends the agreement to seven years from

five years. UFC will also get fixed media rights

fees, in exchange for distributing its events

through ESPN and the video streaming ESPN+

subscription service in the US, according to S&P.

“This agreement will partially mitigate key

business risks, such as the unforeseen need to

cancel or postpone events,” S&P said.

The updated media rights agreement will

give UFC roughly 70% of contractually-fixed

pro forma revenue this year, up from an earlier

forecast of 40%.

BACK IN THE OCTAGON

Goldman Sachs led UFC’s US$465m B2/B rated

add-on loan and offered investors the same

terms as the existing debt – 325bp over Libor,

with a 1% Libor floor. The discount was tightened

to par from 99.5-99.75 at launch.

There is 101 soft call protection for six months.

Goldman also led and placed another

US$435m add-on loan in April that extended the

company’s term loan to 2026 from 2023, but it

has not always been plain sailing in the US loan

market for UFC and the investment bank.

Goldman led a leveraged loan in 2016 to

fund UFC’s buyout by WME-IMG, but the deal

attracted the attention of federal regulators, who

warned over the aggressive Ebitda add-backs

included in the loan at that time.

A year later in April 2017, UFC mandated KKR

Capital Markets to lead a US$100m add-on loan,

as the private equity-backed arranger was not

subject to the same leveraged lending guidance

as investment bank Goldman.

The relaxation of the leveraged lending

guidance under the Trump administration has

allowed Goldman to resume its lead left role

with UFC on the current deal, however, despite

the company’s adjusted debt to Ebitda having

increased.

S&P said that UFC’s adjusted debt to Ebitda

ratio is now “in the high 6 times area”, compared

with 5.8 times in April 2017, according to a UFC

investor presentation.

Parent company Endeavor is also highly

leveraged with long-term debt of US$4.53bn

and total liabilities of US$7bn, according to its

prospectus.

S&P expects UFC’s leverage to decrease to

mid 6.0 times by next year, and the improved

media rights contract is likely to significantly

increase revenue and Ebitda margins.

Aaron Weinman


Jefferies and RBC arranged the existing facilities.

acquisition, proceeds were used to

and expenses associated with the transaction.

AHEAD SEEKS ACQUISITION DEAL

AHEAD has launched a

existing debt and return capital to existing shareholders.

Bank of America Merrill Lynch is leading the transaction, while Regions Bank and TD Securities are arrangers.

protection for six months.

will merge the two portfolio companies,

successful integration of the two businesses.Adjusted debt leverage is expected to be

Technology services provider MERRILL set

Term Loan B.

and 101 soft call protection.Goldman Sachs and Credit Suisse are

arranging the transaction, which will

distribution to shareholders.

Ice cream manufacturer WELLS ENTERPRISES

B that will fund the company’s purchase of ice cream brand Halo Top.

protection for six months.BMO Capital Markets is leading the

transaction.

Pro forma leverage for the company will

incremental debt to its TLB that it used to fund the purchase of Fieldbrook Foods. It

outstanding on the TLB, not including this

Integrity Marketing raises jumbo US$945m unitranche

US Unitranche volume has grown for the third quarter in a row

Dallas-based INTEGRITY MARKETING GROUP is

the latest US middle market company to raise

a jumbo loan from the private debt market,

in a deal backing private equity firm Harvest

Partners’ strategic growth investment in the

company in late August.

Credit investors Owl Rock Capital Partners,

Crescent Capital and Antares Capital provided

the US$945m unitranche loan to Integrity

Marketing, which sells life and health insurance

products to the senior market. The trio were

joint lead arrangers, and Owl Rock also acted as

administrative agent.

Integrity Marketing is the most recent US

mid-sized firm to raise a loan in the billion dollar

range that has not been arranged or provided by

banks. Private equity firms are increasingly able

to execute larger deals via direct lenders and

private credit investors flush with capital that

can move discreetly in highly competitive, fast

moving or otherwise sensitive processes.

At least three other jumbo private debt deals

were completed over the summer, including a

US$1.79bn term loan for NEW MEDIA INVESTMENT

GROUP from Apollo Global Management that

funded its US$1.4bn acquisition of USA Today-

owner Gannett.

Software company ION GROUP also tapped

Goldman Sachs Private Credit and HPS to

provide a US$1.25bn untiranche loan for its

takeover of financial media and data firm Acuris,

while E2OPEN, a cloud-based supply chain

management services company, lined up a

US$950m unitranche loan via Golub Capital to

buy Amber Road.

Direct lending deals are not subject to the

same market risk and price flex that comes with

executing a transaction in the syndicated loan

market.

Unitranche volume grew for three consecutive

quarters starting in the fourth quarter of 2018

and hit a record high of US$9.2bn in the second

quarter this year, according to Refinitiv LPC data.

Average unitranche size also increased in the

second quarter to US$175m, from US$140m in

the first quarter.

The unitranche structure has evolved since

the loans first garnered attention in 2016 as

hybrid instruments that combine senior and

subordinated debt into a single tranche at

a blended interest rate. The loans initially

appealed to sponsors and borrowers for the

ease of execution, especially in times of market

volatility and were primarily provided to small

and middle market companies.

Since then, direct lenders and private credit

providers have proliferated and expanded

significantly in scale and are now able to write

bigger checks. This shift has made non-bank lenders

increasingly competitive with traditional investment

banks as sponsors and issuers seek to raise debt

quickly at competitive levels in terms of cost of

capital and leverage, with limited execution risk.

IN DEMAND

Hefty demand for untranche facilities has caused

average spreads on the loans to fall below

the 600bp threshold. The average spread on

unitranche loans is 592bp in the third quarter

to date, compared with 606bp in the previous

quarter and 612bp in the first quarter, according

to LPC.

Integrity Marketing’s new loan pays lenders

a spread of 575bp over Libor. The new loan

refinanced the company’s prior first- and second-

lien capital structure.

Last November, the company arranged a

US$267.5 first-lien term loan priced at 425bp

over Libor and a US$87.5m second-lien term

loan priced at 850bp over Libor in place to

fund a dividend recapitalisation, along with an

additional US$60m of delayed draw term debt

across the first- and second-lien facilities.

Those loans were arranged by Antares Capital.

As of June 30, firms including Golub Capital,

Garrison Capital, Audax and Crescent held pieces

of the debt, according to LPC’s BDC Collateral.

PennantPark was invested in the second-lien

loan.

Following Harvest’s strategic investment,

middle market private equity firm HGGC, which

initially invested in the company in July 2016, and

the company’s management team will continue

to collectively control a majority equity stake.

Integrity Marketing made its first acquisition

two weeks after Harvest’s announcement. On

September 11 Integrity said it had bought The

Pinnacle Benefits Group, an insurance marketing

organisation headquartered in North Carolina.

Leela Parker Deo



Independent wealth management platform HIGHTOWER HOLDING has detailed

incremental term loan.

term loan, which are being sold as a pro

The term loan is expected to pay lenders

There is also 101 soft call protection for six months, which applies to the entire pro

The delayed draw portion of the

ticking fee and will be available until

Proceeds from the new debt will be used to fund planned acquisitions.

Antares Capital leads the deal.The company is also considering raising

term debt.The new incremental facilities will be

fungible with the existing tranches. The facilities will be governed by a total net

HighTower has been a Thomas H Lee

CERENCE LAUNCHES US$500m LOAN

CERENCE

the unit’s spinoff from Nuance Communications.

The Term Loan B is guided at a spread of

The term loan has 101 soft call protection for six months.

Barclays is lead left on the transaction.Nuance, which delivers conversational

AI platforms, is spinning off its automotive

traded Cerence.Air and gas products and services

provider HOWDEN is in the market with a

for six months.JP Morgan is leading the transaction.The acquisition of Howden is also

unsecured debt and sponsor equity,

times range in 2020.

VUNGLE is in

backing the company’s acquisition by

credit facility.

for six months.

revolver is governed by a springing leverage covenant.

Morgan Stanley, Credit Suisse, Goldman Sachs and Nomura are arranging the transaction.

Corporate family and facility ratings are

advertisements on mobile devices.

DELL UPS TLB

Computer manufacturer DELL revised some of the terms on its term loan B, which it

The TLB, which will mature in

soft call protection for six months.

Credit Suisse led the transaction.

Proceeds from the TLB and cash from

facility.Packaged consumer foods company B&G

FOODS

six months.

Barclays led the transaction.

weaker credit metrics, the ratings agency said.

Pro forma leverage is expected to hover

times if the company makes acquisitions,

Proceeds from the TLB and bond sale will

fees and expenses related to the transactions.

JELD-WEN revised

Wells Fargo led the transaction.

KAR AUCTION NEARS US$950m TLB

Wholesale vehicle auctioneer KAR AUCTION

SERVICES was scheduled on Friday to close a

the company’s existing debt.

months.JP Morgan was leading the transaction.

Coal producer PEABODY ENERGY was

debt.


months.JP Morgan arranged the transaction.

and the maturity was extended by three

Proceeds will also fund a portion of a tender offer that Peabody has launched for outstanding bond debt.

In addition to the TLB, Peabody is also

neutral. Peabody is expected to operate at an

and the expectation of lower international thermal and metallurgical coal prices.

ON SEMICONDUCTOR was due on Friday to

borrowings on a revolving credit facility.

six months.JP Morgan was leading the transaction.

The ratings agency said that the transaction modestly increases interest

outstanding on its RCF.

adjusted net leverage is about 2.0 times.UK cinema operator CINEWORLD has

soft call protection for six months.HSBC

while Bank of America Merrill Lynch and Barclays are joint lead arrangers and bookrunners.

and pay drawings on its revolving credit facility.

neutral.

Entertainment.

EUROPE/MIDDLE EAST/ AFRICA

PRICING EMERGES ON BCA LOANS

Pricing has emerged for British car auctioneer BCA MARKETPLACE’s buyout loan.

denominated Term Loan B is guided at

The sterling tranche represents a decent

tranche as it will test market appetite for sterling amid Brexit turmoil and a potential general election in the UK.

the last few weeks, deterring investors from holding sterling loans. The currency

As a tried and tested name in the European leveraged market, BCA may well ease some fears among loan investors. The

company had a history of private equity ownership prior to being taken public in

In addition, some investors believe BCA, which generates the majority of its income

economic downturn as consumers prefer to buy used cars rather than new vehicles.

BCA, the owner of webuyanycar.com, purchases used vehicles and disposes them through auctions. The company recorded a

vehicle sales.

The proceeds will use to back BCA’s

Bank of America Merrill Lynch, HSBC and Royal Bank of Canada are the physical global coordinators, while KKR Capital Markets, Santander and SMBC are passive joint

INMARSAT GUIDES US$2.7bn TLB

UK telecommunications and satellite operator INMARSAT has unveiled price

the company’s acquisition by a consortium of investors led by Apax Partners.

soft call protection for six months.

Barclays, Bank of America Merrill Lynch and UBS are arranging the transaction.

A consortium of investors comprising Apax Partners, Warburg Pincus, the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan in

each Inmarsat share, valuing its acquisition of the company at about

will support the acquisition with

expects Inmarsat’s adjusted debt to Ebitda

The ratings agency has assigned a

which is the borrower on the leveraged buyout for Inmarsat.

Parent company Inmarsat is rated BB by

EUROPEAN LEVERAGED LOANSBOOKRUNNERS: 1/1/2019 TO DATE



1 Goldman Sachs 34 6,776.56 7.6

2 JP Morgan 33 6,607.17 7.4


4 BNP Paribas 40 6,387.31 7.1

5 Deutsche Bank 36 5,455.28 6.1

6 Barclays 28 4,247.82 4.7

7 Natixis 26 4,180.40 4.7

8 BAML 18 3,498.58 3.9

9 SG 16 3,321.71 3.7

10 HSBC 20 2,867.83 3.2

Total 141 89,516.09

Excluding project finance. Western Europe only included.


EMEA SPONSORED LOAN BOOKRUNNERS BY VOLUME: 1/1/2019 TO DATE

Europe, Middle East, Africa




2 Deutsche Bank 32 4,967.81 9.2

3 Goldman Sachs 23 4,042.85 7.5

4 JP Morgan 20 3,668.39 6.8

5 BNP Paribas 27 3,618.35 6.7

6 Natixis 23 3,385.40 6.3

7 BAML 14 2,766.89 5.1

8 Credit Suisse 16 2,697.37 5.0

9 SG 12 2,323.38 4.3

10 ING 12 1,804.21 3.3

Total 91 54,118.96

Excluding project finance.




BOLUDA TOWAGE SEEKS €890m LOAN

BOLUDA TOWAGE

The deal includes 101 soft call for six months.

Bank of America Merrill Lynch and BNP Paribas are the physical global coordinators, while BNP Paribas is agent.

Boluda Towage, a towing division of

major European ports such as Rotterdam,

and Antwerp in Belgium.

ATNAHS MARKETS LBO LOAN

ATNAHS

Triton.

Barclays and Credit Suisse are global coordinators and mandated lead arrangers, while HSBC and Jefferies are mandated lead managers.

Triton agreed to acquire a majority stake in Atnahs in late June.

Atnahs is focused on acquiring mature branded medicines out of large cap and

own niche medicines. Atnahs operates a

DEXKO DETAILS €180m LOAN

Term Loan B for auto parts manufacturer DEXKO that backs an acquisition of hydraulic

recovery rating remain unchanged. Issue

Credit Suisse is leading the loan, alongside Goldman Sachs, Barclays and Deutsche Bank.

production facilities and 22 distribution centres.

EI LENDER GROUP EXPANDS

The lender group has been expanded on the

pub owner EI GROUP.In addition to mandated lead arrangers

Barclays, Goldman Sachs and Nomura that are Deutsche Bank and

Lloyds Bank have joined the loan as lenders.

Barclays is also facility agent and security agent.

facility, which is being provided by AlbaCore Partners. Wilmington Trust is facility agent on the PIK facility.

SALT ALLOCATES €500m TLB

SALT has allocated a

and 101 soft call protection for six months.The deal, which will be used for

Goldman Sachs, BNP Paribas and Citigroup were the global coordinators, and

Investors line up for Parques Reunidos loanEUROPE Deal for theme park operator comes at the same time as Merlin financing

Banks are showing a select group of investors a

€1.16bn debt financing backing Swedish private

equity firm EQT’s acquisition of Madrid-based

theme park operator PARQUES REUNIDOS.

EQT, Miles Capital and Alba are acquiring a

55.79% stake in the company, in a take private

transaction, for €631m. Miles Capital and Alba

already own the rest of the company so the offer

is for the remainder.

Morgan Stanley and JP Morgan are leading

the €1.16bn leveraged loan financing, alongside

Santander, BNP Paribas and ING.

The financing comprises a €960m term loan

and €200m revolving credit facility.

It is being shown to earlybird investors prior to

launching general syndication to a wider group

of investors shortly.

Parques Reunidos is a well known borrower

to Europe’s leveraged loan and high-yield bond

market, having tapped the markets prior to its

IPO in 2016.

Parques signed €787m of loans in July 2007

to back its buyout by Candover Partners, which

was taken over by Arle in 2011 after Candover fell

victim to the credit crunch. In April 2015, Parques

Reunidos announced it had returned to growth

after three difficult financial years, with the number

of visitors growing for the first time since 2009.

The current financing backing EQT’s

acquisition comes as the loan market prepares

to receive a jumbo debt financing totalling

£3.8bn-equivalent of loans backing the £5.91bn

acquisition of UK theme park and attraction

operator MERLIN ENTERTAINMENTS by an

investment vehicle of Lego’s founding family and

private equity firm Blackstone.

“Parques Reunidos is out there in earlybird,

which is completely crazy as Merlin will be

coming out soon too. Two amusement parks at

the same time could be a bit much. Merlin is one

of the largest in the world and Parques is not,” a

syndicate head said.

It is also the latest loan financing backing a

public-to-private transaction. Leveraged loan

investors are considering investing in £972m

of term loan backing British car auctioneer BCA

MARKETPLACE’s buyout and a US$2.7bn Term

Loan B that is part of a wider debt financing

backing UK telecommunications and satellite

operator INMARSAT’s acquisition by a consortium

of investors led by Apax Partners.

Claire Ruckin, Alasdair Reilly


bookrunners with Credit Agricole, Credit Suisse, HSBC, JP Morgan and Societe Generale.

Following the close of the tower sale in August and strong operational performance,

and pursuing a dividend distribution.Proceeds from the debt package, towers

sale and cash on the balance sheet will be used to redeem the company’s bonds

failing to meet investors’ pricing aspirations.

GVC BETS ON EUROS

GVC

HOLDINGS

The new consolidated loan, which was

euro facilities and a 100bp saving on previous sterling facility.

There is a margin ratchet. Pricing will go

if the ratio improves to 2 times or below.

B delivers the required currency mix of debt for the company after the implementation

equivalent of loans backing its acquisition of Ladbrokes Coral.

Libor.

sterling and euro tranches, along with

AUTOSTORE SCHEDULES MEETING

AUTOSTORE has scheduled a lender meeting on Tuesday for its

Lee Partners.

The deal includes 101 soft call for six months.

Apart from the term loans, there are also

Deutsche Bank and Jefferies are the joint physical bookrunners, while MUFG is bookrunner.

providing automation technology to warehouses and distribution facilities. Its software enables customers to achieve nearly four times the inventory storage relative to manual alternatives.

OVO’S SSE BUY BACKED WITH LOAN

UK independent energy supplier OVO ENERGY

household energy and related services business with a leveraged loan fully underwritten by Barclays.

launched to investors in the coming weeks.The loan will give debt investors the

opportunity to participate in a rare leveraged loan in the UK energy supply sector, which up until now has been dominated by the big

deal with the new term loan and existing cash.The combined businesses serve almost

acquisition will create a strong player in the energy supply market, elevating OVO into a top six position.

OVO’s move comes after the company

The acquisition is expected to close towards the end of the year or early next year after regulatory approval.

on the acquisition.

WITTUR SEEKS €530m REFI

WITTUR has

B and to repay a portion of drawn revolving credit facility.

Deutsche Bank is leading the deal, while Barclays, Credit Suisse, Goldman Sachs, HSBC, KKR Captial Markets and RBC are also involved.

Apart from the term loan, the existing

adjusted Ebitda was €120.1m during the same period.

its existing Term Loan B.Bain acquired the lifts component maker

stake in the company to Canada’s Public

ASIA-PACIFIC

ARNOTT BUYOUT TLB IN MARKET

Term loan B backing KKR & Co’s acquisition

ARNOTT’S

have launched the Australian dollar tranches into syndication.

Price guidance on the Aussie dollar

Jefferies and KKR Capital Markets are left

respectively. Barclays, HSBC and MUFG are also in the arranger group.

Jefferies and Barclays are the physical bookrunners of the Aussie dollar tranches.

SNACKING INVESTMENTS BIDCO is the borrower.

into syndicatioan by the end of the month.Additionally, private markets investment

manager Partners Group has provided a

leveraged buyout.


LOANS RESTRUCTURING

In late July, KKR announced it would

acquiring businesses that sell soup, stock, juice and ready meals in Australia, Hong

operations in Australia, Indonesia and

As part of the transaction, Campbell will also give KKR exclusive rights to use some Campbell brands including Campbell’s,

East and Africa.

KKR for the acquisition.

PARTNERS GROUP LENDS FOR GONG CHA

Partners Group has committed a unitranche loan to back TA ASSOCIATES

participate in the investment alongside TA. The transaction is expected to close in early October, according to an August 26 announcement from TA Associates.

Founded in 2006 in southern Taiwan,

Cha has expanded to more than 1,000

Korea, Japan, Taiwan, the Philippines,

unitranche loan in Asia, according to a press release. It previously lent to support the

billing, coding and business analytics services to healthcare providers across the

VODAFONE NZ LOAN CLOSES

tranche loan backing its purchase of VODAFONE GROUP

ANZ, Citigroup, Commonwealth Bank of Australia, MUFG, National Australia Bank and Westpac were the mandated lead arrangers and bookrunners on the the loan, which is expected to be signed shortly.

Bank of China, China Construction Bank, Export Development Canada, ICBC, Intesa Sanpaolo,

Mizuho, Oversea-Chinese Banking and Societe Generale. Arrangers are Agricultural Bank of China, HSBC and Woori Bank.

Facilities A and B are bullet term loans,

Facility A pays an interest margin of

ICN JV Ltd is the borrower and a guarantor as well. Other guarantors are ICN JV

of the target.

infrastructure investment company Infratil

reported.

RESTRUCTURING

EUROPE/MIDDLE EAST/ AFRICA DEOLEO NEARS RESTRUCTURING

DEOLEO, majority

is near to agreeing a debt restructuring with a group of its creditors.

In a letter to shareholders dated

the restructuring of the company’s debt were very close to conclusion.

The deal will then have to be agreed by a majority of the wider creditor group.

He said that the restructuring will

provide it with greater stability for implementation of its business plan.

increase in raw material costs that could not be fully passed on to customers and a general decrease in appetite for olive oil.

following the announcement, after reaching

according to data from LPC.

get it in better shape before the then minority shareholder CVC launched a full takeover offer.

revolving credit facility.

bottled olive oil and owns three of the top

Bertolli and Carapelli.

BARTEC LENDERS SET TO ENFORCE

producer BARTEC, owned by private equity

company after deciding to enforce on the debt.

an ad hoc group that is being advised by

advised by Houlihan Lokey.By enforcing on the debt owed,

the lenders have taken the chance of a consensual debt restructuring off the table.

“Charterhouse just didn’t want to put more money into it. We are seeing

a sign of things to come,” one source said.

capitalised interest, according to a second source close to the company. It was last

maturities extended out to 2022.As part of that restructuring Bartec

€20m from its lenders as super senior debt. Part of Bartec’s debt, a €260m Term Loan

Europe’s secondary loan market on

January 1.Charterhouse acquired Bartec in 2012

from private equity investor Capvis, which

Charterhouse’s purchase was backed by

and UniCredit as bookrunners and mandated lead arrangers.

Term Loan B, were converted into the

[email protected]

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FRONT STORY JAPAN

Global buyers flock to Recruit Strong overseas demand helps unwind Japanese cross-shareholdings

Shareholders of Japan’s RECRUIT HOLDINGS have raised ¥359bn (US$3.3bn) from the country’s largest follow-on offer so far this year.

Thirteen shareholders of the TSE-listed

close.The company announced on Friday it had

the overseas tranche. This took the total deal size to ¥359bn, surpassing Japan Post

The total may still rise by a further

domestic tranche is fully exercised by

date.The sell-down appealed to both local and

overseas buyers. The international books were

long-only and sovereign wealth funds, with the

The domestic institutional portion was

tranche about six times covered.

than initially planned, because of the strong overseas demand.

“It’s a high quality company as you can see from the participation and demand of long-only funds,” a person close to the deal said. “It is a company that is truly easy to understand, which you do not see often in Japan.”

“It’s a big deal which provides a good opportunity for people who want to build positions in Recruit. When the company is at such an attractive level, you have no pressure to sell its shares in the market because everyone just wants to buy, not sell,” the person said.

UNWINDING CROSS-HOLDINGS

Recruit said it wanted to “provide an

reduce their holdings in a coordinated manner” and to further expand its shareholder base globally.

“The sale can be seen as a response to the government’s effort to reduce cross-holdings in Japanese companies,” said another person

can shift the company’s shareholding base

Concurrent to the latest share sale, Recruit will implement a share buyback of

The selling shareholders are Toppan Printing, Dai Nippon Printing, Mitsui & Co, Dentsu, MUFG Bank, Sumitomo Mitsui Banking Corporation, Mizuho Bank, Hakuhodo DY, Nomura Research Institute,

company and each of the selling shareholders.

Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Nomura are the joint global coordinators. They are also international joint bookrunners with Mizuho and SMBC Nikko in the international tranche.Candy Chan

CHJ Auto charges up for US IPO Deal follows poor stock performance of rival EV maker Nio

Chinese electric vehicle maker CHJ AUTOMOTIVE

more than halving of the shares of rival Nio since it was listed in the US last year.

The company, which counts Wan Xing, chairman of online food delivery-to-ticketing group Meituan Dianping among its backers, has already engaged banks for the deal.

Goldman Sachs is the lead bank on the

developer of social media video app Tik Tok and China’s most valuable start-up, also

Two people close to the deal declined to give a target valuation as preparations for

person said a listing could value the

vehicles in November.CHJ did not respond to emails seeking

comment.

coming to the US equity market after Nio’s

China said earlier this year it would cut subsidies for developers of new energy

vehicles, putting pressure on companies in the sector to gather funds for expansion.

from a convertible bond issue in January and

issue to existing shareholder Tencent Holdings

Nio’s share price has halved since its

massive recall of one of its vehicles after

Byton and Xpeng Motors, two other Chinese

candidates from the sector. Both companies are currently raising funds from the private

Candy Chan


EQUITIES Australia China India Philippines 99 Singapore 99 Thailand 99 Belgium 99 France

Germany South Africa Sweden UK United States

ASIA-PACIFIC

AUSTRALIA

HOMECO SETS TERMS FOR A$300m ASX IPO

HOME CONSORTIUM

deal.The big box property owner is planning to

enlarged share capital. The deal will be split between cornerstone investors and a retail tranche, without a regular institutional tranche, according to one of the people.

HomeCo acquired Woolworths’ Masters

The prospectus is due to be lodged on

people.HomeCo shares are due to start trading on

Credit Suisse, Goldman Sachs and JP Morgan

CHINA

DANKE, ZIROOM PLAN LISTINGS

DANKE APARTMENT

Services among its backers, is planning to

as early as this year, said people with knowledge of the matter.

Danke (eggshell, in Chinese) may start

controlled by billionaire Jack Ma, led

with existing investor Tiger Global

Primavera Capital, CMC Capital and

China’s rental housing market is developing rapidly because of a growing

second-tier cities and the government’s policy support to increase the supply of rental housing for low-income residents.

Guangzhou, Shenzhen and Hangzhou.Citigroup, Credit Suisse and JP Morgan are

ZIROOM, a unit of China’s largest real estate brokerage Lianjia, is considering a US listing

of the matter.The Chinese long-term apartment leasing

service has had early discussions with

was originally a division of Lianjia until

independently.

Warburg Pincus and Tencent Holdings at a

Local media reported in June that the

B funding round led by existing investors

valuation.


ASIA-PACIFIC EQUITIESBOOKRUNNERS: 1/1/2019 TO DATE


1 Morgan Stanley 63 10,015.48 8.8

2 Goldman Sachs 37 7,333.27 6.4

3 UBS 45 5,543.54 4.9

4 Citic 38 5,302.57 4.7

5 JP Morgan 35 5,088.86 4.5

6 CICC 37 4,307.49 3.8

7 Nomura 43 4,141.71 3.6

8 BAML 19 4,042.98 3.6

9 Citigroup 40 3,848.36 3.4

10 Credit Suisse 37 3,560.53 3.1

Total 1,349 113,845.05

Including all domestic and international deals and rights issues

Source: Refinitiv SDC code: C4a1

ASIA-PACIFIC EQUITIES (EX-JAPAN)BOOKRUNNERS: 1/1/2019 TO DATE



2 Goldman Sachs 33 6,771.19 6.9

3 UBS 43 5,396.52 5.5

4 Citic 38 5,302.57 5.4

5 CICC 37 4,307.49 4.4

6 JP Morgan 34 4,291.75 4.4

7 Citigroup 37 3,674.12 3.7

8 Credit Suisse 35 3,282.61 3.3

9 BAML 15 3,187.77 3.3

10 China Securities 28 2,454.43 2.5

Total 1,248 98,077.84


Source: Refinitiv SDC code: C4a2

WEEK IN NUMBERS

<US$47bn THE WE COMPANY, BETTER KNOWN

AS FLEXIBLE WORKSPACE PROVIDER WEWORK, IS EXPECTED TO LAUNCH ITS IPO ON MONDAY WITH A VALUATION FAR BELOW THE US$47bn MARK PROVIDED BY ITS LATEST FINANCING ROUND. A SUB-US$20bn LEVEL IS NOW EXPECTED, LEADING TO SOFTBANK (WHICH INVESTED US$2.5bn AT US$47bn) TOPPING UP ITS INVESTMENT TO LIMIT DILUTION

30x NOMINATIVE DETERMINISM SUGGESTED

THAT BIOTECH 10X GENOMICS’ IPO WOULD END SEVERAL TIMES SUBSCRIBED, THOUGH IN THE EVENT IT WAS CLOSER TO 30 TIMES SUBSCRIBED, NOT JUST 10X. THE IPO RAISED US$390m AFTER BEING UPSIZED AND PRICING ABOVE THE RANGE

€2.3bn GERMAN SOFTWARE COMPANY

TEAMVIEWER COULD BECOME THE LARGEST EMEA IPO OF 2019 SO FAR AFTER THE LAUNCH OF BOOKBUILDING LED TO A FLURRY OF ORDERS. THE BOOK WAS COVERED AT THE TOP OF GUIDANCE, INCLUDING AN UPSIZE OPTION AND GREENSHOE, WHERE THE DEAL COULD RAISE €2.3bn. THE LARGEST IPO IN THE REGION THIS YEAR WAS THE €2.01bn IPO OF NEXI.

US$5bn AB INBEV IS REVIVING THE IPO OF

ITS ASIA-PACIFIC UNIT AFTER IT WAS CANCELLED IN JULY. THE LISTING COULD RAISE ABOUT US$5bn AND BE COMPLETED BY THE END OF SEPTEMBER. BUDWEISER BREWING HAS SHRUNK SINCE JULY WHEN THE AUSTRALIAN OPERATIONS WERE SOLD TO ASAHI GROUP FOR A$16bn (US$11bn)

¥325bn THIRTEEN SHAREHOLDERS IN RECRUIT

HOLDINGS HAVE RAISED ¥325bn (US$3bn) FROM AN ALL-SECONDARY GLOBAL FOLLOW-ON. INTERNATIONAL BOOKS WERE SIX TIMES COVERED WITH MORE THAN 200 INVESTORS ALLOCATED 75% OF THE TRANSACTION

as Beijing, Shanghai, Shenzhen and Guangzhou. It has served close to 3 million tenants, according to its website.

comment.

HENLIUS BIOTECH LAUNCHES HK IPO

Fosun-backed SHANGHAI HENLIUS BIOTECH opened books last Wednesday for a Hong

three months of protests.

each.The price range represents a pre-money

valuation of about US$3bn–$3.5bn and a

the company at about US$3bn.The deal has attracted four cornerstone

Biopharmaceutical and Cayman Henlius

Under the international tranche, about

shareholders of Shanghai Fosun Pharmaceutical and Fosun International.

Henlius, a subsidiary of Shanghai Fosun Pharmaceutical and Fosun International, has launched one drug commercially and

in its pipeline with a focus on oncology and autoimmune diseases.

earlier. It reported an annual loss of

Bank of America Merrill Lynch, CICC, Citigroup, CMB International and Fosun Hani are sponsors and joint global coordinators with BOC International and UBS.

TOPSPORTS PRE-MARKETS HK IPO

TOPSPORTS INTERNATIONAL, the sportswear business of footwear retailer Belle International, started pre-marketing last

Pre-marketing will run until September

Bank of America Merrill Lynch and Morgan Stanley are the joint sponsors.

Belle’s sportswear unit distributes brands

The company operates a nationwide retail

was the largest sportswear retailer in China

share.

Capital and CDH Investments took Belle

CATHAY MEDIA GROUP FILES FOR HK IPO

Media production company CATHAY MEDIA

GROUP

IFR reported earlier, citing people close to the deal.

Demi-Gods and Semi-Devils and The Heaven Sword and Dragon Sabre.

The company also manages the Communication University of China in Nanjing, which teaches majors related to

China Merchants Securities and Macquarie are

TIMES NEIGHBORHOOD FILES FOR IPO

TIMES NEIGHBORHOOD, the property management unit of Hong Kong-listed Chinese property developer Times China,

the deal.Haitong International is the sole sponsor.

Times Neighborhood is joining a number of Chinese property management companies to list in Hong Kong.

Poly Property Development, the property management arm of Shanghai-listed Poly

Developments and Holdings Group, plans to

the end of the year. Henan-based Central

Properties are also planning to list their property management units to each raise

CHONGQING RURAL TO KICK OFF IPO

Hong Kong-listed CHONGQING RURAL COMMERCIAL

BANK is set to conduct price consultations on

The company will set the price on

The local lender will offer not more than

capital.

Regulations in China require banks to sell

Proceeds will be used to replenish capital.CICC is the sponsor and joint bookrunner

with China Securities.

CHONGQING SANFENG PLANS SHANGHAI IPO

CHONGQING SANFENG ENVIRONMENT GROUP has

Proceeds will be used for three waste incineration power plants in three Chinese cities, and to replenish working capital.

The company is owned by the provincial

China Securities is the sponsor.

CMGE TECH TO SEEK APPROVAL FOR IPO

Mobile game publisher CMGE TECHNOLOGY

GROUP plans to seek listing approval in

The company develops both proprietary and licence-based games, with a current

higher than the industry average, according

BNP Paribas and CICC are the sponsors.


EQUITIES ASIA-PACIFIC

ESR PREPARES TO RELAUNCH HK IPO

Logistics property developer ESR CAYMAN,

The deal could be launched in the

familiar with the situation.The deal is likely to be smaller than the

company targeted in June but the size has not yet been decided, IFR reported earlier, citing people with knowledge of the situation.

from high-quality long-only investors.In June, the Warburg Pincus-backed

The range represented an implied pre-money market capitalisation of

the corresponding period a year earlier. It

CLSA and Deutsche Bank are sponsors and global coordinators with Citigroup, Credit Suisse, DBS, Goldman Sachs and Morgan Stanley.

GUANGZHOU PHARMA TO BE SPUN OFF

Hong Kong and Shanghai-listed Guangzhou Baiyunshan Pharmaceutical Holdings plans to spin off GUANGZHOU PHARMACEUTICALS through a Hong Kong listing.

The company said the deal would expand its fundraising channels and accelerate its internationalisation strategy.

stake in Guangzhou Pharmaceuticals after

That transaction was completed in May

Guangzhou Pharmaceuticals contributed

The proposal needs approval from shareholders, the Hong Kong exchange, and Chinese regulators.

SHENZHEN TRANSSION KICKS OFF STAR IPO

SHENZHEN TRANSSION HOLDINGS, the world’s largest manufacturer of feature phones, is set to conduct price consultation on

The company will set the price on

the enlarged capital. Strategic investors will

institutional and retail investors will split

Proceeds will be used to expand the production capacity of smartphones in Shenzhen and Chongqing, develop an

two R&D centres for mobiles and home appliances in Shanghai and Shenzhen, replenish working capital, and for internal IT services.

the largest feature phone manufacturer in

from the China Securities Regulatory

Citic Securities, as the sole sponsor of the

INDIA

APOLLO HOSPITALS BLOCK RAISES Rs7.4bn

The managing director of APOLLO HOSPITALS

ENTERPRISE, Suneeta Reddy, has raised

capital was well oversubscribed and the shares were crossed in the block window of the local stock exchange, as can be done if

Reddy, a member of the founding family,

according to its website.Citigroup is the placement agent while

HDFC Bank is the co-manager.

RELIANCE NIPPON OFS IN DEMAND

The institutional tranche of RELIANCE NIPPON

ASSET MANAGEMENT

the stock exchanges show.

The transaction comprises a base deal of

same-sized upsize option. Seller Reliance Capital has said it will exercise the upsize option.

The clearing price for the sale has been

JM Financial is the sole bookrunner.

Monday’s close to the end of trading on

to-date.

SBI LIFE SELLS SHARES FOR FREE FLOAT

The institutional tranche of the Rs35bn SBI LIFE INSURANCE

last Thursday, data on the local stock exchange show.

The transaction comprises a base deal of

exercised.State-owned State Bank of India is selling

The retail tranche was open for one day last Friday. The shares were sold on the local stock exchanges.

HSBC, Nomura and SBI Capital are the banks on the transaction.

BANKS BID FOR SBI CARDS IPO

SBI

CARDS AND PAYMENT SERVICES, people with knowledge of the transaction said.

The bidders include Axis Bank, Bank of America Merrill Lynch, Edelweiss, HSBC, ICICI Securities, IIFL Holdings, JM Financial, JP Morgan, Kotak, Nomura and SBI Capital.

Up to eight banks will be hired after they make presentations to the company next week.

SBI Cards, India’s second largest credit

shares. The deal, if it goes through, would be

India.SBI Cards is a joint venture between State


The company’s credit card user base was

JAPAN

LASALLE REIT PRICES FOLLOW-ON

LASALLE LOGIPORT REIT

The Japanese commercial REIT marketed

size.

participating, according to a person close to

towards long-only, real estate funds, existing unit-holders and investors that had access to management during marketing and supported the issuer’s last offering.

of the deal. Both domestic retail and institutional demand were very strong, the person said.

The deal is structured as a rinpo, a domestic offering with a dedicated overseas placement for institutional buyers but no English language prospectus. Foreign

and the rest went to domestic institutions and retail buyers.

Proceeds will be used to acquire two properties, as well as for future acquisitions or debt repayment.

Mitsubishi UFJ Morgan Stanley, Mizuho and Nomura are the joint bookrunners and joint lead managers.

This is the second time this year the REIT has raised funds for acquisitions, following a

The stock, which hit an all-time high of

to-date.

PHILIPPINES

ALLHOME LAUNCHES Ps15.8bn IPO

Homeware retailerALLHOME has launched an

secondary) will be sold. There is a greenshoe

the vendor of the secondary shares.

shares will start trading on the Philippine

The top of the price range is close to the

price.

senator and one of the Philippines’ richest men with a portfolio including Starmalls

UBS is the sole global co-ordinator, and bookrunner with CLSA and Credit Suisse. PNB Capital and China Bank Capital are the local underwriters.

SINGAPORE

LENDLEASE TARGETS YIELD FOR SGX REIT

LENDLEASE GLOBAL COMMERCIAL REIT plans to open books for a Singapore Exchange REIT

knowledge of the transaction said.The REIT will contain two retail assets,

one in Singapore and another in Milan.Comparable SPH REIT, whose portfolio

comprises three Singapore-based retail

Lendlease Corporation is the sponsor and

Citigroup and DBS are leading the transaction.

THAILAND

ASSET WORLD SETS FIXED PRICE FOR IPO

Property developer ASSET WORLD has launched

share.

shares and there is a greenshoe option of

of the share capital.

international investors and another

cornerstone investors. Singapore’s sovereign wealth fund GIC will buy shares for around

and FWD Life.The domestic institutional tranche will

persons will be entitled to US$9m of shares.

Bank of America Merrill Lynch, Morgan Stanley and UBS are the joint international coordinators, while Bualuang Securities, Kasikorn Securities, Phatra Securities and Siam Commercial Bank are the joint domestic coordinators.

outside the infrastructure fund sector since

estate owner and developer with a portfolio of

it is the largest owner of mid-scale to upper-scale hotels in Thailand, operating under

Banyan Tree, Hilton and Sheraton.

EUROPE/MIDDLEEAST/AFRICA

BELGIUM

BANKS WAIVE LOCK-UP FOR PRIVATE SALE IN FAGRON

Waterland Private Equity and investment group Baltisse continued to reduce their combined stake in FAGRON with the sale of

Unusually, the sale was to just one buyer and was led by one of the three banks holding the lock-up from July’s sale.

The buyer is a UK-based fund manager at a major US institution that will declare their stake in the coming days having crossed the

Waterland and Baltisse, the family

The buyer had looked at the sale in July of

to participate. The buyer wanted more time to evaluate Fagron and to meet

Berenberg was one of three bookrunners in


EQUITIES EMEA

Kepler Cheuvreux) and Kempen. Berenberg

Padilla in the same room on Thursday.Following that meeting, the buyer wanted

and the sellers in the July trade were approached on that basis. It was agreed that

the July trade. Pricing represented a tight

Kepler Cheuvreux and Kempen to waive the lock-up, which required the agreement of the trio, and this was agreed shortly before the close on Friday. The transaction wrapped up later that evening.

the lock-up remains in place and will expire

stake, no longer the largest position in Fagron. Marc Couke, a Belgian billionaire

FRANCE

EMISSIONS-CUTTING BOILER MAKER TO FLOAT IN PARIS

Pre-marketing began on Thursday for French start-up BOOSTHEAT, which aims to take advantage of an expected push towards revamping consumer boilers to reduce carbon emissions.

with proceeds to be used for strategic growth, including R&D, development of production facilities and strengthening the sales force.

Boostheat produces domestic heat pumps and condensing boilers, which aim to cut

The anticipated market capitalisation is

The company is targeting production of

completed Lyon plant, but is aiming to sell

distributor Holdigaz is working with Boostheat and has become a shareholder

Jacquet, who is a co-founder with Jean-Marc

There is an expectation that some or all of the existing shareholders will participate in

be held to long-term lock-ups.

is likely to attract investors keen to meet requirements for ESG allocations in their portfolios, although a company this early-stage will not appeal to all.

expected interest in an ESG offering despite its

will put the launch of bookbuilding around

Berenberg, Gilbert Dupont and Portzamparc are bookrunners.

BOUYGUES CUTS ALSTOM STAKE

Rail transport company ALSTOM’s main

company on Wednesday evening in a

Bookrunners Bank of America Merrill Lynch, BNP Paribas, JP Morgan and Societe Generale carried out a wall-cross on Wednesday that provided indications of interest covering the

day lock-up.The sale launched with reference to the

taking two-thirds of the trade, with UK and US money dominating.

GERMANY

RUSH FOR TEAMVIEWER IPO COULD MAKE IT LARGEST EMEA IPO OF 2019

Books were covered within hours for software company TEAMVIEWER

Bookbuilding started on Thursday morning following two weeks of pre-

size including upsize and greenshoe was covered at the top of guidance.

and a greenshoe of 9m shares. If both are exercised the deal size could reach as much

Italian payments company Nexi.

Goldman Sachs and Morgan Stanley are global coordinators, joined at bookrunner level by Bank of America Merrill Lynch and Barclays. RBC is co-lead manager and Lilja & Co is advising.

number of indications well in excess of the deal size was received before launch, including some big orders.

Teamviewer sells software for virtual meetings and remote desktop access on a subscription basis. Investors are casting an eye

at a long list of European software peers and other software-as-a-service peers from the US.

US software company Citrix was mentioned as a peer as well as Dropbox and Paycom.

The scarcity of growth tech companies in Europe has helped fuel demand, and there is more coming from the US due to the popularity of the tech sector.

“Software is a very well liked space,” one banker said. “There is fantastic, unparalleled growth in this business and this has resonated with accounts.”

growth trajectory.

The underwriters are sharing a base fee of

be awarded, or not, within 35 days of the


EMEA EQUITIES BOOKRUNNERS: 1/1/2019 TO DATE


1 JP Morgan 49 7,935.77 11.1

2 Morgan Stanley 35 7,390.44 10.4

3 Goldman Sachs 38 6,287.00 8.8

4 Citigroup 39 4,485.27 6.3

5 UBS 21 3,374.11 4.7

6 BAML 18 3,363.78 4.7

7 Credit Suisse 25 3,209.52 4.5

8 Jefferies 27 2,534.11 3.6

9 Barclays 21 2,533.97 3.6

10 BNP Paribas 12 1,571.60 2.2

Total 569 71,186.12


Source: Refinitiv SDC code: C4cr

CONGATEC RETURNS WITH FRANKFURT FLOAT

German embedded computing products business CONGATEC has begun pre-marketing

selling from the company’s founders. There

Frankfurt, having previously attempted a

company. Stifel and Needham & Company

Deggendorf, Congatec focuses on the computer-on-module segment of the embedded computing market, particularly the internet of things. Congatec makes the computer that sits at the heart of internet of things devices. The company’s modules are

across a range of applications, from industrial robots, medical technology, delivery drones and autonomous vehicles.

“It’s hard to get exposure to growth in the internet of things and Congatec is a pure play on that growth,” said a banker involved, who said that an additional attraction was the lack of any private equity involvement in the company and so it is debt free.

Congatec was the global market share leader for the computer-on-module segment of the embedded computing market, with a

Congatec’s most important market,

development and broaden the product portfolio.

beginning of bookbuilding around September

Bryan Garnier and Commerzbank are joint bookrunners.

SOUTH AFRICA

PROSUS SURGES ON EURONEXT DEBUT

opportunity to gain exposure to TENCENT through a Europe-listed stock with the debut of PROSUS, the holding company for Naspers’ internet assets.

stake in the Chinese tech giant, on

secondary listing in Johannesburg. The listing is by introduction and involved no capital raise for the company or Naspers.

Having been given a reference price for the

Naspers shareholders were given the option of receiving shares in the new

equivalent number of shares in Naspers

depending on shareholder elections, with a

Naspers’ stake in Tencent was valued at

that the move will enable the company to

growth.In addition to the Tencent stake, the

bundled listing also includes stakes in mail.ru, DeliveryHero and others.


EQUITIES EMEA

German biotech unicorn files for Nasdaq IPO GERMANY BioNTech debut could set a new biotech record

BIONTECH filed for a Nasdaq IPO last week that

could unseat Moderna as the largest biotech IPO

of all time.

The German biotech filed on Monday night for

an IPO with a US$100m placeholder to a much

larger deal.

JP Morgan, Bank of America Merrill Lynch, UBS

and SVB Leerink are joint bookrunners.

BioNTech closed a massive US$225m on a

private round in July that valued the clinical

stage cancer drug platform at US$4bn.

Fidelity Investments led the offering as a

new investor alongside existing shareholders

including Redmile Group. Redmile was the

lead investor on a US$270m Series A round last

January.

Both rounds point to a much larger IPO for

BioNTech. Reuters reported in March that the

IPO could weigh in at US$800m and target a

valuation of US$4bn.

Moderna, a pioneer in the field of messenger

RNA therapeutics, raised US$605m on its

offering in December 2018.

BioNTech confidentially filed in June, so is well

advanced on its regulatory review.

The July private placement was to have

been even bigger at US$325m but a Hong

Kong-based investor delayed an €87m

(US$97m) funding commitment, citing “ongoing

geopolitical disruptions in Hong Kong”.

BioNTech has not had any other trouble

raising cash.

Collaborations with Pfizer and Sanofi brought

in another US$211m in upfront cash on top of the

funds from private placements.

The Bill & Melinda Gates Foundation invested

US$55m earlier this month as part of a US$100m

collaboration with BioNTech for developing new

treatments for HIV and tuberculosis. BioNTech now

has a US$530m cash hoard ahead of the IPO.

The company has an extensive pipeline of more

than 20 product candidates, including seven that

have already advanced into clinical trials.

BioNTech was formed in 2008 by

billionaire twin brothers Andreas and Thomas

Struengmann.

The initial focus was placed on developing

messenger RNA treatments for cancer, the same

field as Moderna.

BioNTech’s collaboration with Genentech on

a messenger RNA treatment for a type of skin

cancer is the most advanced.

The drug is currently being evaluated in a

Phase II trial among 132 patients with top-line

data coming by the end of next year.

BioNTech has branched out into other areas of

cancer treatment, beyond mRNA. The company

acquired two companies this year with Phase I

cancer antibody drugs.

Robert Sherwood

Due to a clerical error the listing was delayed from July to September.

Goldman Sachs, JP Morgan and Morgan Stanley

involved were Banca IMI, Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Deutsche Bank, ICBC Standard Bank and ING.

SWEDEN

EQT COVERED WITHIN HOURS AT US$6.7bn VALUATION

EQT put out a price range after Thursday’s market close, giving the company a potential post-money

Within two hours of books opening on Friday morning, the deal was covered at the top of guidance.

There is a much smaller than is typical

full exercise of the greenshoe.The price range represents estimated P/E

Bookbuilding began on Friday and closes

Management is splitting up in order to cover a lot of ground in the short roadshow.

Stockholm on Monday, then London and

on Wednesday, New York and London on Thursday, and New York and Frankfurt on

comprise just conference calls.JP Morgan and SEB are global coordinators,

and bookrunners with Goldman Sachs, Morgan Stanley, Nordea and UBS. ABG Sundal Collier and BNP Paribas are co-lead managers.

MAJOR SHAREHOLDER SELLS 11% OF STILLFRONT

The largest shareholder in gaming studio STILLFRONT GROUP

Wednesday evening, cashing in around

Kai Wawrzinek and Christian Wawrzinek sold 3m shares through their investment

vehicle Laureus Capital. The brothers founded Goodgame Studios, which Stillfront

The share sale, which corresponded to

bookrunners Carnegie and JP Morgan.

The deal launched without guidance and

that it was a sale by the major shareholder, a banker involved said.

The Wawrzineks stepped down from

of Goodgame Studios in February, so the sell-down did not come as a complete shock to the market.

between international and domestic players, with slightly more internationals. Low liquidity in the stock helped attract interest.

Shares struggled to stay above water on Thursday following the trade, and closed

Stillfront was last in the headlines in June,

acquisition of US game company Kixeye.Carnegie and Swedbank ran that deal.

UK

HELIOS TOWERS BACK WITH LONDON LISTING

Telecoms infrastructure business HELIOS

TOWERS

document on Thursday.

previous attempt was cancelled in March

Johannesburg listing.Helios is targeting primary proceeds of

from shareholders including Newlight Partners, Helios Investment Partners,

Partners, International Finance Corporation,

including construction of additional sites, acquisitions of site portfolios and expansion into adjacent technologies and services, as well as for general corporate purposes.

Helios is expected to be eligible for inclusion in FTSE UK indices. Pre-marketing can

document.Helios provides infrastructure and power

supplies to mobile network operators,

in particular on Tanzania, the Democratic Republic of Congo, the Republic of Congo

quarters of adjusted Ebitda growth. First-half

Bank of America Merrill Lynch, Jefferies and Standard Bank are global coordinators, and bookrunners with EFG Hermes and Renaissance Capital.

The previous attempt was cancelled following pre-marketing and was understood to have faltered on the disparity between the owners’ valuation and what the market was prepared to pay. Previously the

Lynch, Credit Suisse and Standard Bank as JGCs and joint books with Jefferies.

jurisdiction since last year, but also they have delivered on every promise made in pre-marketing last year, quarter-on-quarter,” said a banker involved.

The banker said that although Helios is targeting a London listing, an emerging

from being “completely decoupled from the uncontrollable volatility in the backdrop in the UK and Europe”.

BOVIS AND GALLIFORD HOUSEBUILDING MERGER BACK

UK housebuilders BOVIS HOMES and GALLIFORD

TRY have restarted discussions over a potential merger of their housing businesses, with Bovis planning to tap the capital markets for cash as part of the transaction.

The potential deal, the exact terms of which are still being hashed out, would value

share held. It would see Bovis Homes merged with the Linden Homes and Partnerships and Regeneration divisions of Galliford Try.

Bovis would also take on Galliford Try’s

September 9 close, which put its market cap

taking out additional debt and existing resources.


Following the transaction, and taking into account the new shares issued under the placing and bonus issue, Galliford Try shareholders would own in aggregate around

The transaction is subject to the placing going ahead, and approval by both companies’ shareholders. There are a number of other conditions including

the potential synergies and the transfer of pensions to Bovis Homes on terms acceptable to each party.

markets opened and the stock closed down

Galliford rejected a previous offer in May by Bovis to acquire its housebuilding arm, saying the deal undervalued the business division.

Lazard together with Numis, which is also sole bookrunner and sole broker on the deal.

ACQUISITIVE HIPGNOSIS BACK WITH £300m TARGET

HIPGNOSIS SONGS FUND, which acquires music

intraday placing.Hipgnosis said on Tuesday that the capital

which is expected to be published before the end of September. The transaction will involve an issue of C shares, including an

month share issuance programme.

segment of the main market in London.JP Morgan and N+1 Singer will manage the

capital raise.Hipgnosis shares were unmoved by news

MERIAN CHRYSALIS TARGETS £100m IN PLACING

MERIAN CHRYSALIS INVESTMENT launched a

in fresh capital.

invested following recent additions to its portfolio, including investments in online

a-service company Sorted.Merian said the weighting of its portfolio,

three-quarters of which is exposed internationally, means it is well positioned to deal with the UK’s uncertain political and macroeconomic environment.

Liberum and Zeus Capital are bookrunners on the placing.

Shares in the fund fell on Tuesday following news of the capital increase, and

The placing is expected to wrap up on

In particular, the company has the right to close the placing early if commitments

Pricing will be set at a premium to the

and as per listing rules will not be more than

capital was held in cash or cash equivalents ahead of the Embark, Klarna and Sorted investments.

maxed out its placing programme to cash in

SEQUOIA SETS PRICING FOR £138.75m PLACING

SEQUOIA ECONOMIC INFRASTRUCTURE INCOME FUND is

The fund published pricing terms on Thursday for the placing, which launched

Stifel is bookrunner.

TUFTON OCEANIC LAUNCHES PLACING

UK-listed fund TUFTON OCEANIC ASSETS, which invests in second-hand commercial ships, has launched a placing to raise new capital.

Bookbuilding is expected to run until

Hudnall Capital and N+1 Singer are bookrunners.

Tufton announced the placing alongside

placing and offer for subscription, after

In its results the fund said it does not expect Brexit to have a material impact on its operations, given that seaborne trade between mainland Europe and the UK is not

medium-to-long-term charters, cushioning the portfolio from geopolitical and macroeconomic shocks.

The most recent addition to its portfolio is ‘Parrot’, a ship that operates on a time charter to a major container line.

SUPERMARKET INCOME REIT TARGETS £50m PLACING

UK-listed SUPERMARKET INCOME REIT is targeting

subscription.

at a premium to the company’s last reported

The company is considering three acquisition opportunities in the near term.

another two are in advanced due diligence.The placing and corresponding placing

programme are subject to a shareholder

March. Chairman Nick Hewson said this had been deployed rapidly, and that the

It owns eight UK supermarket assets with

include Tesco, J Sainsbury and WM Morrison Supermarkets.

Stifel and placing agent with Goodbody.

AMERICAS

UNITED STATES

WE, ENDEAVOR FACE TOUGH AUDIENCE BUT ECM ROLLS ON

in months as several controversial offerings are due in the coming weeks just as cracks


EQUITIES AMERICAS

may be beginning to appear in investors’ willingness to support high valuations.

trenchant criticism of the company’s business model and corporate governance, space-as-a-service provider The We Company/WeWork is poised to launch its

amendment to its registration statement revealing it plans to list on Nasdaq and outlining further concessions to investors on the corporate governance front.

We could also be joined on the road by talent management agency Endeavor, which owns half of the Ultimate Fighting Championship.

interest embedded in its business model.GFL Environmental, a sponsor-backed

as a possible launch in the coming weeks, but likewise may face more price sensitivity than the staple diet of software and biotech

This comes after a mixed week that saw

summer break, with six companies coming

cosmetic dentistry business SmileDirectClub highlighted market scepticism of some “disruptor” business models.

SmileDirect’s poor debut surprised some given the offering was heavily oversubscribed

range and then slump on debut.The strongest deal of the week was the

deal was massively oversubscribed and the

moderated and the asset class as a whole is no longer outperforming the broader market, notwithstanding big winners such as Beyond Meat.

scheduled to price, led by the up to

software company Datadog and the

Danaher spin-off Envista.Though bankers acknowledge unusual

market conditions - equities near record highs despite widespread recession fears - are making some deals challenging (particularly those involving insider selling), they are rushing to launch stock sales while they can.

“Part of it is because we don’t know what the back of the year holds,” a senior ECM banker said. “The fourth quarter looks like there’s a lot of runway, but before you know it you are bumping into holidays.”

CLOUDFLARE BUCKS VALUATION CONCERNS

CLOUDFLARE overcame gyrations in the stock

debut on Friday.

pricing.In the end, a syndicate led by Goldman

Sachs, Morgan Stanley and JP Morgan priced a

one dollar above the top of the range.Debuting on Friday morning, the shares

“It’s trading around where I thought it might but investors have become a little more conservative, especially in how they are approaching the open,” one banker close to the deal said.

net cash, versus current annualised sales of

“It’s a reasonably large deal but you have to imagine the liquidity will dry up pretty quickly,” another banker said.

now trading at a double-digit forward multiple

CrowdStrike.

recent weeks post-earnings, suggesting investors are becoming more wary about the high valuations attributed to software companies that generate substantial recurring subscription-based revenues.

after it warned that large sales deals are taking longer to close, which may be a sign that IT vendors are facing a slowdown.

Yet even after recent declines, these stocks generally still command a premium

10X GENOMICS IPO 30X COVERED

Molecular diagnostics play 10X GENOMICS was

bid for medical technology stocks this year.

Wednesday night that was both upsized and priced above the range.

JP Morgan, Goldman Sachs and Bank of America Merrill Lynch

each.

shares and above the upwardly revised

launch.

Biotechnologies and Castle Biosciences as well as medical device specialists like Silk Road Medical and Shockwave Medical.

team much of the credit for walking accounts through a recent intellectual property dispute with Bio-Rad Laboratories.

called Chromium infringed on certain Bio-Rad patents.

In addition to owing Bio-Rad US$35m in

Chromium products that are in circulation that are still using the infringing technology.

The company is actively migrating its customers over to the new version of Chromium.

It will continue to service customers that are in the middle projects that rely on using the original Chromium molecular

US$55m to put its Bio-Rad issues in the rearview. The remainder of the proceeds are available to launch the new version of Chromium and other products.


US EQUITIESBOOKRUNNERS: 1/1/2019 TO DATE


1 Goldman Sachs 121 21,024.80 17.3

2 JP Morgan 133 14,064.48 11.6

3 Morgan Stanley 103 13,811.85 11.4

4 BAML 96 11,746.30 9.7

5 Citigroup 80 10,274.94 8.5

6 Barclays 61 7,744.30 6.4

7 Credit Suisse 61 5,494.58 4.5

8 Wells Fargo 50 4,761.22 3.9

9 RBC 38 4,232.68 3.5

10 Jefferies 44 2,963.81 2.4

Total 489 121,308.43


Source: Refinitiv SDC code: C3r

SPRINGWORKS SOARS ON DEBUT

SPRINGWORKS THERAPEUTICS made a big splash in its market debut last week. Shares of the

was upsized and priced at the top of the range.

The deal was upped to 9m shares in a new

JP Morgan, Goldman Sachs and Cowen priced the deal later

two years ago to develop treatments for rare types of cancer and tumours.

In addition to providing SpringWorks

private placement anchored by Bain Capital

Shares of migraine headache specialist SATSUMA PHARMACEUTICALS

midpoint.Credit Suisse, SVB Leerink and Evercore priced

the marketed offering of 5m shares at

indication of interest from unnamed

remainder of shares were tightly placed.

was soon back around the offer price on

shares).Satsuma is a former subsidiary of Shin

Nippon Biomedical Laboratories, a Japanese medical device company.

The lead product is a nasal inhaler that delivers a dry powder formulation of a common migraine headache drug.

complete an ongoing Phase III trial of the drug.

There are also plans for a second Phase III

months.

ALERUS DOWNSIZES IPO, PRICES BELOW-RANGE

North Dakota-based bank ALERUS FINANCIAL

tough market for bank stocks, pricing a

downsized, priced below the range and a day later than expected.

Joint bookrunners Raymond James and DA Davidson & Co were able to drum up enough

late Thursday after being held over from the previous evening.

on the over-the-counter market, though that

was below the bank’s last sale price on the


EQUITIES AMERICAS

Big discount on Baker Hughes sale US GE’s holding in oil services provider falls below 50%

Ailing industrial conglomerate GENERAL ELECTRIC

raised another US$3bn for debt reduction

late Wednesday by cutting its stake in oilfield

services unit BAKER HUGHES for the second time

in 10 months, but it had to accept a sharply

discounted price in order to do so.

GE was able to upsize the one-day marketed

sell-down of 115m Baker Hughes shares from

105m at launch but offloaded the holding at just

US$21.50, an 11% file-to-offer discount.

The offering was also struck about 40% below

the price of Baker Hughes shares at the time of

its merger with GE’s oil & gas unit in July 2017.

JP Morgan, Citigroup, Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch, BNP Paribas and Evercore ISI led the sale, which

separately saw Baker Hughes repurchase

US$250m of its shares from GE.

With exercise of the greenshoe, total proceeds

would rise to US$3bn, cutting GE’s Baker

Hughes stake to about 38% versus 50.2%

previously. The deal leaves GE with another

380m shares to sell, and it can look to do so

after a 90-day lock-up expires.

Even more disappointingly for GE, the offering

price was also below the US$23 level at which

it sold US$3.8bn of Baker Hughes stock in a

similar deal last November.

Bankers said the offering was covered at launch

with the aid of a wall-cross, though this support did

not appear to be reflected in the 7.5% slump in Baker

Hughes’ shares during the session of marketing.

“GE has clearly stated it is in the process of

divesting Baker Hughes,” one banker said, noting

recent strength in the oil sector had contributed

to GE’s decision to sell now.

PRESSURE

The latest sell-down comes as GE’s own share

price - down 70% since the start of 2017 - came

under further pressure last month following

a short report by Madoff whistleblower Harry

Markopolos that called into question the

company’s accounting and solvency.

GE’s chief executive, former Danaher

executive Larry Culp, has led a busy slate of

asset sales since he was appointed one year ago.

Culp has already overseen the pending

US$21bn sale of GE’s biopharma unit to his

former company and last month sold a US$1.5bn

stake in Wabtec, which previously merged with

GE’s transportation division.

The reduction in GE’s Baker Hughes stake below

50% triggers an accounting deconsolidation that

also requires GE to mark to market the remaining

holding at the end of the quarter.

GE previously said it expects to book a non-

cash charge of US$7.4bn on ceding control of

Baker Hughes, but this was based on a higher

share price of US$24.84 at July 26. Each US$1

a share fall from that level increases the loss by

US$500m. Shares closed Thursday’s session at

US$22.64.

Ratings agency Moody’s said the sale did not

effect GE’s credit ratings.

Speaking at a Morgan Stanley conference

on Thursday, Culp said GE had now raised or

identified US$38bn of asset sales and had

begun to signal its plans for that cash with a

US$5bn debt tender split 50/50 between the

US and Europe.

In what it has labelled its “reset year”, GE

is looking to bring the leverage ratio of its

industrial business to below 2.5 times, requiring

US$25bn of debt reduction, and its GE Capital

unit, which has large insurance liabilities, below

four times.

“We know we have a lot more to do both

with respect to the balance sheet and the

way we run the business to make sure that

GE is not only a good investment … but the

company that we all want it to be,” Culp

said.

Anthony Hughes

opted to downsize the offering to reduce dilution at the lower price.

times estimated tangible book value post-

PING FINDS NEW IDENTITY VIA US$200m IPO

PING IDENTITY

backed identity software platform that

Monday, is coming to market at a multiple

That represents a much more humble

that have commanded double-digit

secondary trading.The difference is that Ping has been

growing nearly as fast as some of the hot

this year.Ping’s annualised recurring revenue

intentionally brought down margins in the past year to invest more in sales and marketing and research and development.

Leads Goldman Sachs, Bank of America Merrill Lynch, RBC Capital Markets and Citigroup

company’s sponsor-backed pedigree.

mature software companies, bought Ping for

deleveraging exercise, leaving the company

Tech investors typically aren’t much concerned with balance sheets anyway, but carrying debt does signify where the company is in its life cycle.

In a more sober market for tech valuations, Ping might draw attention from value-conscious investors, though other sponsor-backed

Ceridian HCM and Dynatrace have not been

In its online roadshow presentation, Ping

the company’s strong enterprise customer

the largest banks by assets) and stresses the company’s opportunity to disrupt legacy

Ping, which has partnerships with

hardly alone in disrupting this market.

private CB offering, though the stock has tumbled since that deal was announced.

for Ping’s purposes might best be described as an aspirational comp.

EXAGEN REVISITS IPO PLAN

Diagnostics company EXAGEN is making a second attempt at becoming a publicly traded company after abandoning the process three years ago.

Cowen, Cantor and William


SmileDirectClub stumbles in market debut

US SmileDirect IPO is nothing to smile about.

SMILEDIRECTCLUB made history with its US$1.35bn

IPO, but for all of the wrong reasons.

The stock inexplicably plunged 29% in

Thursday’s debut session after pricing its IPO a

dollar above the range.

It was the first US$1bn-plus IPO to price above

range and trade down in three years, according

to Renaissance Capital.

JP Morgan, Citigroup, Bank of America Merrill Lynch, Jefferies, UBS and Credit Suisse were wary

of strong interest in the deal that was coming

from retail investors.

They ended up concentrating the bulk of the

58.5m shares at US$23 with institutional hands.

“You couldn’t tell that there was a problem

from the book,” a source involved in the

underwriting told IFR.

Hedge funds and other retail buckets were

scaled back to 15%-20%, versus their usual 25%-

30% allocation. A buyside source that IFR spoke

to received less than half of a “sizeable order”.

The source, and other retail investors, dodged

a bullet (or a falling knife). SmileDirect bottomed

at US$16.28 in afternoon trading before closing

at US$16.67, down 27.5% for the day.

The deal hung US$235m of losses on IPO

investors based on the US$18.99 VWAP and 55m

shares trading during the session.

The outcome is hard to explain.

Investors widely agree that SmileDirect has

done an exceptional job of building its direct-to-

consumer brace business to a commercial scale.

There were still some notable concerns about

the deal.

First, SmileDirect was not cheap.

The IPO priced at a mid-sevens multiple of

2020 EV/sales. That significant premium to

ALIGN THERAPEUTICS, the company Smiledirect is

trying to disrupt, at 4.7-times 2020 EV/sales.

Align is the incumbent player in the cosmetic

dentistry space with its Invisalign clear smile

aligners. SmileDirect sells its products to

consumers at up to 60% of what orthodontists

charge for Invisalign.

SmileDirect has already treated more than

700,000 customers. SmileDirect estimates there

are as many as 124m potential customers in the

US, and 500m worldwide.

In addition to its online/mail order business,

the company has a network of 300-plus retail

locations that extends its reach to potential

customers.

Align is shut out of the retail brace business

for the next three years. An early investor in

SmileDirect, Align violated a non-compete

agreement it had with SmileDirect by opening its

own Invisalign stores.

Align was forced to sell its 17% stake in

SmileDirect and close its Invisalign stores. Align

cannot open any new Invisalign stores until

August 2022.

SmileDirect has first mover advantage

over Align and smaller competitors for now.

Still, there no intellectual property defending

SmileDirect’s business model from a well-funded

competitor like Amazon, the buyside source told

IFR.

The final straw may have been the deal’s

secondary component, which is rare for a growth

IPO. Insiders can hardly be blamed for taking

profits at the near US$9bn IPO valuation after

investing privately in October at a US$3.2bn

valuation.

Robert Sherwood

Blair

The underwriting line-up is a change from

Exagen is a relatively mature company

brand, up from only four products three years ago.

collaborations with large pharmaceutical companies including Jannsen Biotech and GlaxoSmithKline.

patients that are at risk for developing childhood-onset lupus.

LAUREATE SPONSORS SELL AGAIN

Undaunted by the poor performance of some of the prior week’s blocks, banks proved happy to commit capital to more risk trades in the past week.

Morgan Stanley late on Monday reoffered

education provider LAUREATE EDUCATION to

price.

controlling shareholder and the vehicle for sponsors including KKR & Co, sell what

sizable overhang. The remaining stake

The poor aftermarket may not have been helped by Laureate’s disclosure alongside the offering that it expected a one-off

the sale of operations in Malaysia and Turkey.

Wengen last sold down its Laureate stake

Before that, in November last year, a

For the sponsors, it has been relatively slow going in terms of monetising what has at times looked like a tough investment,

with JP Morgan and Citigroup increasing

respectively last month after the company topped second-quarter revenue and earnings expectations.

HAMILTON LANE TURNS TO INSIDER SALE

Goldman Sachs and JP Morgan joined forces to

HAMILTON LANE, a deal that allowed existing shareholders including management to sell down their holdings.

secondary and partly synthetic secondary) or


EQUITIES AMERICAS

Peloton goes extra mile with US$1.2bn IPO US Exercise bikes, treadmills pitched as subscription service

Exercise bike and treadmill maker PELOTON

INTERACTIVE is hoping to attract a premium

valuation akin to popular streaming subscription

service Netflix when it prices its US$1.16bn

Nasdaq IPO later this month.

On Tuesday, Peloton launched the sale of

40m Class A shares at US$26-$29 for pricing on

Wednesday, September 25.

The fast-growing company, which has 1.4m

members and more than doubled revenues to

US$915m in the year ended June 30 2019, is

bringing its highly anticipated IPO to the market

with the heft of a syndicate of 21 underwriters

led by Goldman Sachs and JP Morgan.

Management is meeting with investors in

Europe as well as the US during an extended

roadshow that got underway in the past week.

The European leg of the roadshow was not

necessary, one banker close to the deal said, but

Peloton management was also interested in

marketing its product offshore, particularly as the vast

bulk of its current sales come from North America.

Aiding the deal, existing venture backer TCV

has agreed to buy US$50m of shares in a private

placement alongside the IPO.

Two directors, Karen Boone and Howard

Draft, have also expressed an interest in buying

US$500,000 and US$2m of shares in the IPO.

HARDWAREBankers are pitching the company as a

technology, media and software company

rather than a hardware maker and encouraging

investors to value Peloton like popular streaming

service Netflix.

Netflix trades at five times forward

EV/sales.

With a market cap of US$8bn and US$1.2bn

of post-IPO cash at top-end pricing, Peloton

would trade at a similar multiple assuming

roughly 50% top-line growth.

Another favorable comp is streaming

hardware and content provider Roku, which

trades at 11 times forward sales.

In contrast, fitness band maker Fitbit,

which has stumbled since its 2015 IPO, trades

at a valuation that is a fraction of its annual

sales.

Unlike some other recent unicorn IPOs,

Peloton is going public at a much higher

valuation than its most recent private round. In

August 2018, the company raised US$550m in a

Series F financing at US$14.44 a share or about

half the top end of the IPO range.

One banker close to the deal said there was

unusually strong buyside interest early in the

marketing phase.

However, some buysiders have expressed

concern about the dominance of non-recurring

hardware sales, the company’s large net losses

(US$195.6m last year) and large and ongoing

royalty costs associated with music used on its

videos.

Though nearly 80% of sales come from

“connected fitness products” (the bikes and

treadmills), Peloton generated US$181.1m of

sales from subscriptions to its streamed fitness

content.

Subscribers can pay US$19.49 a month to

access Peloton Digital, the company’s library of

fitness content, while owners of the bikes and

treadmills pay US$39 for content streamed to

screens attached to this fitness equipment.

Peloton has sold 577,000 connected fitness

products since it launched the bike in 2014 (the

treadmill was launched in 2018), and 92% of

the equipment it has sold still has an active

subscription attached.

“It’s a bit like the razor, razor blade model

where you have the installed base but it’s all

about the subscription,” another banker said.

“There are some people that are completely

into the product and they do have an

underpenetrated market.”

Anthony Hughes

The shares struggled in the aftermarket,

after the sale but recovering to back above

primary proceeds will be used to settle in cash exchanges of membership units in its LLC held mainly by management.

assets under management, has now completed similar offerings on four occasions at six month intervals since March

The last follow-on stock sale in March this year saw the same two banks combine to

last sale.

but if the cadence of the past four sell-downs is any guide, Hamilton Lane will not be back

ALPHA FOR OMEGA

OMEGA HEALTHCARE INVESTORS pre-funded a

equity while its stock is trading at robust levels.

Bank of America Merrill Lynch provided

the sole bookrunner on a forward sale of

and reselling them into the market.

forward sale in either cash or stock.

responsible for paying the quarterly

The details of the pending acquisition

nursing REIT MedEquities Realty Trust.That deal was funded with a mix of cash

and stock.

shareholders was partially funded with

CARDLYTICS SELLS STOCK AFTER PRICE SURGE

CARDLYTICS, whose “purchase intelligence” platform helps banks and marketers understand how consumers are spending

follow-on stock sale late Tuesday that took advantage of the more than trebling of its stock price this year.

bookrunners JP Morgan and Bank of America Merrill Lynch priced a combined primary and

Existing shareholders, notably co-founders Scott Grimes and Lynne Laube and Fidelity National Information Services, sold

The offering was three-times covered with

accounts.

a few dollars short of the previous week’s

Though the offering discount was wide, Cardlytics shares have surged spectacularly


Datadog to fetch up to US$528m from IPO

US Fast-growing IT monitoring software company seeks double-digit sales multiple

The up to US$528m Nasdaq IPO of fast-growing

IT monitoring software provider DATADOG looks

like another lay-up for US tech ECM bankers,

but turbulence in the stock prices of recent hot

software IPOs is threatening to complicate pricing.

Datadog, which boasts 80% top-line growth

of 70% gross margins, early Monday launched

the sale of 24m shares at US$19-$22. Lead

underwriters Morgan Stanley, Goldman Sachs,

JP Morgan and Credit Suisse expect to price the

offering post-close Wednesday, September 18.

Subscription software companies have long

delivered the most predictable success in the US IPO

market, though recent weeks have seen some of this

year’s big gainers (Zoom Video Communications,

Medallia and CrowdStrike) stumble after the release

of their quarterly earnings.

Bankers concede that higher valuations

have left many of these companies priced to

perfection, leaving their share prices vulnerable

to disappointment. Yet they also point out that,

for the most part, the recent IPOs continue to

trade well above their offering prices.

Founded by Alexis Le-Quoc and Olivier Pomel

in 2010, Datadog’s numbers look at least as

impressive as other hot software new issues

priced this year.

Apart from its high top-line growth, the

company also boasts a 146% retention rate

among its now 8,800 customers, 590 of which

are paying more than US$100,000 a year for its

products.

The IPO represents only 8% of the company,

increasing the likelihood that low supply and

high demand drive up the stock price on debut.

“BEST-IN-CLASS”

Datadog was “best-in-class” in growth and unit

economics, Pomel said in the company’s online

IPO roadshow presentation released alongside

the launch of the deal.

The mid-point of the IPO range pitches

Datadog at an enterprise value of about 13 times

2020 EV/sales of around US$460m, the latter

implying 40% top-line growth next year, one

banker close to the deal said.

Comps include Dynatrace (13 times forward

EV/sales), PagerDuty (15 times), Elastic (16

times) and ServiceNow (12 times.

However, investors appear to be reassessing

their willingness to pay double-digit EV/sales

multiples for the same sorts of businesses they

might have paid five to 10 times sales for a few

years ago. This comes amid signs that investors

may be rotating their portfolios away from

momentum stocks and into cyclicals or value

stocks.

Names such as Splunk and ServiceNow that

helped entrench investors’ love affair with all

things SaaS went public went public earlier this

decade at multiples of seven to 10 times forward

sales, whereas a number of this year’s tech IPOs

have commanded in the region of 15 times-plus.

Datadog estimates its addressable market is

worth US$35bn a year, encompassing potential

demand for its infrastructure monitoring,

application performance management, log

management, user experience management

and network performance monitoring software

products.

Anthony Hughes

Carlytics’ stock price soared anew last month after the company posted a second

The company also upped the bottom ends of its full-year billings and revenues

IMXI TRANSFERS REGISTRY TO NEW OWNERS

INTERNATIONAL MONEY EXPRESS (IMXI), a

sale last week to cash out insiders.The offering, marketed for two full days

and priced after the close Wednesday, saw former IMXI owner Stella Point Capital and

said a banker involved, underscoring the need to conduct three days of marketing. “This was very well telegraphed.”

Credit Suisse, Cowen, BMO Capital Markets and KeyBanc Capital Markets

to-offer discount.

IMXI, formerly known as Intermex, has performed strongly since being acquired by

Stella Point sold 3.5m on the offering to

CANADA

NORTHLAND FUNDS COLOMBIAN PURCHASE

Canadian renewable power company NORTHLAND POWER

from an overnight bought deal offering of subscription receipts to help fund its

regulated utility Empresa de Energia de

CIBC Capital Markets and National Bank Financial

The shares stumbled in the wake of the

the week.The subscription receipts entitle the

holder to one common share of Northland once the acquisition closes. Northland expects to close the acquisition in the fourth quarter of this year.

Northland expects the acquisition to generate “average mid-single digit accretion to free cash per share during the current

increasing accretion over the long-term”.Some investors might read this as the

acquisition not being immediately accretive to earnings.

subsidiary debt and will fund the balance of the acquisition cost with its corporate credit facility.

“Management has reviewed its corporate metrics to ensure an appropriate mix of equity and debt instruments that we believe will preserve our balance sheet to support further growth initiatives, deliver accretion to our shareholders and maintain our investment-grade credit rating,” Northland


EQUITIES AMERICAS

ECM DEALS: WEEK ENDING 13/9/2019

Stock Country Date Amount Price Deal type Bookrunner(s)

CTC Real Estate Investment Trust Canada 10/09/2019 C$240.0m C$14.25 Accelerated bookbuild CIBC, RBC, BMO

(Primary, Secondary)

Northland Power Canada 09/09/2019 US$315.0m US$24.25 Accelerated bookbuild (Primary) CIBC, NBF

Alstom France 11/09/2019 €1.08bn €37 Accelerated bookbuild (Secondary) BAML, BNP Paribas,

JP Morgan, Societe Generale

LaSalle Logiport REIT Japan 11/09/2019 ¥21.6bn ¥148,005 Follow-on (Primary) Mitsubishi UFJ Morgan Stanley, Mizuho, Nomura

Recruit Holdings Japan 10/09/2019 ¥325bn ¥3,079 Follow-on (Secondary) BAML, Goldman Sachs,

Morgan Stanley, Nomura

Stillfront Group Sweden 11/09/2019 SKr750m SKr250 Accelerated bookbuild (Secondary) Carnegie, JP Morgan

10X Genomics US 11/09/2019 US$390.0m US$39.00 IPO (Primary) JP Morgan, Goldman Sachs, BAML

Alerus Financial US 12/09/2019 US$60.1m US$21.00 IPO (Primary) Raymond James, DA Davidson

Baker Hughes US 11/09/2019 US$2.47bn US$21.50 Follow-on (Secondary) JP Morgan, Citigroup, Goldman Sachs,

Morgan Stanley, BAML, BNP Paribas, Evercore

Cardlytics US 10/09/2019 US$91.5m US$34.00 Follow-on (Primary, Secondary) JP Morgan, BAML, Wells Fargo,

Suntrust Robinson Humphrey, Raymond James

Cloudflare US 12/09/2019 US$525.0m US$15.00 IPO (Primary) Goldman Sachs, Morgan Stanley, JP Morgan

Experience Investment US 12/09/2019 US$250.0m US$10.00 IPO (Primary) Deutsche Bank, Citigroup, JP Morgan

Fate Therapeutics US 11/09/2019 US$150.5m US$17.50 Accellerated bookbuild (Primary) Jefferies, Citigroup, SVB Leerink, Wells Fargo

Hamilton Lane US 09/09/2019 US$163.6m US$60.60 Accelerated bookbuild (Secondary) Goldman Sachs, JP Morgan

International Money Express US 11/09/2019 US$66.5m US$12.75 Follow-on (Primary) Credit Suisse, Cowen, BMO Capital Markets,

KeyBanc Capital Markets

Laureate Education US 09/09/2019 US$252.8m US$16.85 Accelerated bookbuild (Secondary) Morgan Stanley

New Providence Acquisition US 10/09/2019 US$200.0m US$11.00 IPO (Primary) BTIG

New York Mortgage Trust US 10/09/2019 US$153.5m US$6.14 Accelerated bookbuild (Primary) Morgan Stanley, JP Morgan, UBS, Barclays, BAML,

Credit Suisse, KBW, RBC Capital Markets

Omega Healthcare Investors US 09/09/2019 US$302.4m US$40.32 Accelerated bookbuild (Primary) BAML

Satsuma Pharmaceuticals US 12/09/2019 US$82.5m US$15.00 IPO (Primary) Credit Suisse, SVB Leerink, Evercore

Smile Direct Club US 11/09/2019 US$1.35bn US$23.00 IPO (Primary) JP Morgan, Citigroup

SpringWorks Therapeutics US 12/09/2019 US$162.0m US$18.00 IPO (Primary) JP Morgan, Goldman Sachs, Cowen

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STRUCTURED EQUITY China 112 France 112 Switzerland 112 United States 112

FRONT STORY FRANCE

MTU prints €500m 2027 paper €275m buyback of outstanding paper that was massively in the money

Following a record negative yield issue from France’s Edenred the previous week, Germany’s MTU AERO ENGINES printed a 7.5-year convertible bond (maturing in March 2027) that came with just a sliver of a coupon and a very high premium.

Proceeds from the €500m paper went towards buying back 2023 CBs that were issued in 2016 with a coupon of 0.125% and are massively in the money with shares trading at near double the conversion price.

This is the third CB from MTU, which is rated Baa3 by Moody’s and BBB by Fitch, and along with being investment grade, the benchmark sizing and the familiarity of the name meant pre-sounding was unnecessary.

A credit assumption of 100bp was derived in part from a peer group of German industrials that have issued vanilla bonds in euros such as HeidelbergCement, Hochtief, Fresenius and Deutsche Lufthansa. There was no pushback, with stock borrow available at 35bp.

Implied vol on that basis was 21.9%-29.3%, which compares with historic over 180 days at 21.9%.

coupon of 0.05% at 101.5%-104.5% for a yield-to-maturity of -0.54 to -0.15, and a premium of 50%-60%. The reference price will be the VWAP for Wednesday to Friday inclusive, so investors will know their allocation in both the new issue and tender before the VWAP period begins.

There is a call from April 2025, subject to a 130% trigger.

Books were covered by early morning and ended multiple times covered, with pricing at 103%, implying a -0.34% yield-to-maturity. The premium was at 55%, on top of a share price that has risen more than 62% this year to the previous week’s all-time high close of €253.40. The rise has helped the stock into the DAX, which it joins on September 23.

Shares took a slight hit on Tuesday, ending at €236.70 from Monday’s €248.20 close.

A banker involved said that restriking at a big premium to the current share price massively reduces dilution while pushing out the maturity. The outstanding bonds are

In a book of around 100 lines, allocations were split 45%/55% hedge to long-only accounts.

On pricing, implied vol was 25.6%, with a

new bonds were trading around 103.5% in the grey in the afternoon.

MTU bought back €275m of the €500m outstanding 2023s as planned, offering €203,500 per €100,000 of bonds from a €203,500-€204,250 range, adjusted for the VWAP over September 11-13, plus accrued interest of €42.69 per bond. The outstanding bonds were heavily in the money, trading at 203.25% ahead of launch of the buyback. A Dutch auction process wrapped up at 7am in Germany on Wednesday.

The banker said that the straight debt market is printing at record levels and it “feels like we are following in their wake”.

HSBC and UniCredit were bookrunners, with UniCredit the sole bank carried over from the previous CB issue in 2016 when Goldman Sachs was sole global coordinator, with Deutsche Bank and UniCredit as joint books.Robert Venes

RH seizes potential with US$300m five-year zero Furniture retailer employs unique, optional deal marketing

RH, the former Restoration Hardware,

Thursday that will see it pay a coupon of 0% with a derivative employed to offset dilution to a 100% premium.

Bank of America Merrill Lynch, RH’s long-time incumbent bank, sold the CB to investors at the 0% coupon and 25% conversion

coupon and 25%–30%.BAML soft-launched a “potential offering”

on Thursday at 10:54am in New York.RH elected not to proceed with a similarly-

sized, similarly structured “potential offering” in December, so there were no guarantees that it would follow through this time around.

RH shares traded at midday on Friday at US$172.88, up 2.2% on the session and

virtually unchanged from the US$172.37 “unaffected” price before trading was halted on Thursday.

The derivative purchased offsets dilution to prices above US$338.24.

RH fully repaid US$200m drawn on a second-lien credit facility that carried a L+650bp rate to access.

RH now has US$1.235bn of convertible

US$3.2bn market cap.“Had we not been opportunistic in

responding to favourable market conditions

2014 and 2015, we would not have been in a position to repurchase US$1bn of our stock when it was undervalued during 2017,” said RH CEO Gary Friedman at the time of the CB repayment in June.

RH has fully turned the corner on operations. Thanks in no small part to a diminished share count, it shattered second-quarter EPS by reporting US$3.20, above the US$2.70 consensus, on revenues of US$706.5m, also above the US$698m

The key, again, is fewer shares. In 2014, when RH hit the reset on operations and its shares traded in the 60s, RH had about 40m shares outstanding; now, it has 26.5m - 5m of those shares are sold short.

Brushing aside concerns of China-US tariffs, RH bumped full-year EPS and revenue guidance to US$10.53–$10.76 and US$2.68bn–$2.69bn, up from US$9.08–$9.52 and US$2.66bn–$2.67bn previously.Stephen Lacey


CHINA

BEST SELLS CB

NYSE-listed Chinese logistics services company BEST has raised US$175m from a

The CBs were priced at the top of a 1.25%–1.75% coupon range and the conversion premium was set at 27.5%, below the indicative range of 30%–35%.

There is a greenshoe option of US$25m.

has indicated interest in purchasing at least US$100m of the notes. Alibaba holds a 3.99% interest in the company, according to

The company plans to use the proceeds to pay for a capped call transaction and for general corporate purposes.

Credit Suisse, Goldman Sachs and JP Morgan are the bookrunners.

GOERTEK EYES Rmb4bn CB

Shenzhen-listed GOERTEK plans to raise

year convertible bond offering.The electronic components manufacturer

will use the proceeds for a wireless headset project and an AR/VR components project, and to build an R&D centre in Qingdao.

Rmb844m on revenues of Rmb23.8bn last year.

XIANHE’S CB CLEARS HEARING

Shanghai-listed paper manufacturer XIANHE has cleared a China Securities Regulatory Commission hearing for a proposed

bond issue.Xianhe produces speciality paper, pulp,

paper products and chemical additives. It will use the proceeds for a new paper product and to replenish working capital.

The company raised Rmb583m from a Shanghai IPO last April.

Citi Orient Securities is the sponsor.

approval from the regulator.

CSRC TO REVIEW FLAT GLASS CB

The China Securities Regulatory Commission has agreed to review a

A-share convertible bond issue from Hong Kong and Shanghai-listed FLAT GLASS GROUP.

Proceeds will be used to help fund a photovoltaic glass project in Anhui province at a cost of Rmb1.75bn.

The company raised Rmb300m from a Shanghai IPO in February.

Shareholders cleared the CB plan in June.

FRANCE

JP MORGAN ISSUES €400m EB IN LVMH

JP MORGAN

goods business LVMH with a maturity of September 18 2022.

The zero-coupon bonds launched at a base size of €375m with a €25m upsize option

110.625%-111% of principal for a -3.445% to -3.335% yield-to-maturity.

Pricing came shortly after 3pm in London at 110.625%.

reference price to be set from the VWAP over

price will be announced on September 16.Proceeds are for general corporate

purposes, including for hedging derivatives

The trade follows a series of bank-issued

technical trades appealing mostly to hedge funds, a banker involved in the LVMH EB said that the deal also appealed to outright

JP Morgan was bookrunner.

SWITZERLAND

JP MORGAN TO BUY BACK DUFRY EBS DUE 2021

JP MORGAN is buying back the cash-settled

duty free group DUFRY in January and October 2018.

JP Morgan issued a US$350m cash-settled

coupon in January 2018, following that up in October with another US$205m

initially, into the same underlying and with the same January 11 2021 maturity.

JP Morgan launched a buyback of the original US$350m bonds at the same time in October, after which US$122.8m was left outstanding.

As a result, JP Morgan is now tendering for the US$122.8m outstanding of the US$350m

The offer price for the January 2018 issue is 97.125%. The tender in October was at 92.5%.

JP Morgan is offering 97.375% for the October 2018 issued bonds, that were issued at 97.625%.

The offer closes on October 8.JP Morgan is dealer manager.

UNITED STATES

HARMONIC STRIKES ACCORD ON US$105m FIVE-YEAR CB

Having generated positive momentum from recent contract wins, cable equipment maker HARMONIC secured US$105m from a

Barclays, sole bookrunner, reduced market risk by wall-crossing select investors on Tuesday before bringing the new CB that evening at 2%, up 30%.

There was some disappointment among rival banks to miss the deal. Bank of

EQUITY-LINKED DEALS WEEK ENDING: 13/9/2019

Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s)

Chemtrade Logistics Canada 10/09/2019 C$100.0m C$15.0m 5y 6.50 39.50 BMO Capital Markets

Income Fund

Best China 13/09/2019 US$175m – 5y 1.75 27.50 Credit Suisse, Goldman Sachs, JP Morgan

MTU Aero Engines Germany 10/09/2019 €500m – 7.5y 0.05/-0.34 55.00 HSBC, UniCredit

Apellis Pharmaceuticals US 11/09/2019 US$220.0m US$33.0m 7y 3.50 25.00 JP Morgan, Citigroup, Evercore

Best US 12/09/2019 US$175.0m US$25.0m 5y 1.75 27.50 Goldman Sachs, Credit Suisse, JP Morgan

Harmonic US 10/09/2019 US$105.0m US$10.5m 5y 2.00 30.00 Barclays

Heska US 12/09/2019 US$75.0m US$11.3m 7y 3.75 35.00 JP Morgan, Piper Jaffray

JP Morgan/LVMH US 11/09/2019 €400m – 3y 0/-3.335 15.00 JP Morgan

RH US 12/09/2019 US$300.0m US$50.0m 5y 0.00 25.00 BAML


STRUCTURED EQUITY CONVERTIBLES

America Merrill Lynch bookran a US$128.25m 4% CB back in 2015, and Harmonic management regularly present at Jefferies technology conference.

“I don’t want to talk about it,” responded a banker at one of the above-mentioned

Harmonic used a portion of the new funding to repurchase a portion of the 4% CB that matures December 2020 and converts at US$5.74 per share.

When Harmonic issued its CB in 2015 the stock was punished over the one-day marketing period with a 14.5% drop, while terms of 4% coupon and 28% premium were wide of 23.75%-3.25% and 37.5%-42.5% guidance.

In this case, however, Harmonic shares rose 1.5% from reference to US$6.76.

The terms it achieved impress despite the wall-cross. At 2%, up 30%, Harmonic’s CB is the most aggressive pairing achieved on an overnight deal by a sub-$700m market cap company since Audiocodes in 2004, according to IFR records.

Another factor weighing on the decision to wall cross was the poor performance of recent deals.

Okta’s new US$1bn 0.125% CB due 2025 are trading at 94 and Insulet’s US$800m 0.375% CB due 2026 at 95, on sell-offs in the underlying in both cases.

Harmonic recently struck a new US$175m licensing deal with Comcast, providing it visibility to revenue and offsetting shortfalls at a video unit that is transitioning toward a software-as-a-service model.

In conjunction with second quarter earnings announcements, the company estimated it would end the year with cash of US$90m-$100m.

Best to de-risk the 2020 CB maturity now, and all the better to do so outside of the

APELLIS APPENDS US$220m SEVEN-YEAR TO FUNDING PIPELINE

APELLIS PHARMACEUTICALS gained a hefty funding runway from the sale overnight Wednesday of a US$220m seven-year convertible bond.

JP Morgan, Citigroup and Evercore bumped the offering from US$200m launched to US$220m ahead of pricing at 3.5%, up 25%, the wide end of talk.

US$500m of cash, following US$117.3m raised from a common stock sale in March (at $17.00 a share) and another US$100m the company took as part of a collaborative agreement with SFJ Pharmaceuticals.

Apellis’ shares tanked 10.7% post-pricing Thursday to US$28.20, suggesting hedge-heavy allocations or dissatisfaction among fundamental types.

Apellis is funding ahead of key clinical reports later this year, so there is an element of opportunism.

data on one Phase III trial by December and complete enrolment on separate Phase III

HESKA COMES OUT OF HIBERNATION FOR US$75m

Having lived on a lean diet of capital, HESKA secured US$75m on Thursday from the sale of a seven-year CB, the veterinary

in over 20 years.JP Morgan and Piper Jaffray did face some

investor pushback but found a new home for the CB, despite the company’s small size and relative obscurity.

It was oversubscribed ahead of the market open on Thursday, after launching post-close on Wednesday, with one day of marketing resulting in pricing at a 3.75% coupon and 35% conversion premium, the wide end of 3.25%-3.75% and 35%-40% talk.

“It makes sense for them to stabilise their balance sheet,” said one sell-side analyst who requested anonymity. “They have been operating for quite some time with razor-thin capital budgets and have a number of growth projects that they are undertaking.”

Heska shares fell 10.4% while marketing the CB to US$64.17, a new annual low and down from the US$114.50 high last October.

Heska is using proceeds to repay US$12.8m drawn on a US$50m revolver and for general corporate purposes.

The company’s cash holdings were whittled to US$10m as of June 30, after it

settlement.Heska has the ability to call the CB after

four years, as long as its shares trade 130% above the US$86.63 conversion price, or US$112.62, subject to a make-whole provision.

Heska has disappointed this year largely

heartworm preventative drug, Tri-Heart, which it sells through Merck.

In the June quarter, it reported a net loss of US$241,000 on revenue of US$28.2m, the latter a 5.1% year-on-year decline and a little shy of the US$28.9m consensus.

GLOBAL CONVERTIBLE OFFERINGSBOOKRUNNERS: 1/1/2019 TO DATE


1 Goldman Sachs 31 7,764.09 9.7

2 JP Morgan 42 6,977.38 8.8

3 BAML 36 6,739.78 8.5


5 Citigroup 26 4,633.59 5.8

6 Citic 10 4,226.26 5.3

7 Credit Suisse 20 3,406.36 4.3

8 China Securities 9 2,593.11 3.3

9 Bank of China 4 2,442.73 3.1

10 HSBC 12 2,277.87 2.9

Total 254 79,661.66

Including exchangeables and domestic offerings.

Source: Refinitiv SDC code: C9

GLOBAL CONVERTIBLE OFFERINGS – EMEA BOOKRUNNERS: 1/1/2019 TO DATE


1 BNP Paribas 9 1,592.42 12.5

2 JP Morgan 10 1,571.97 12.3

3 HSBC 8 1,380.90 10.8

4 Citigroup 3 946.53 7.4

5 UBS 3 764.25 6.0

6 BAML 3 762.10 6.0


8 Natixis 4 595.00 4.7

9 SG 5 577.23 4.5

10 Credit Agricole 4 570.86 4.5

Total 30 12,746.15

Including exchangeables.

Source: Refinitiv SDC code: C09d

ALL INTERNATIONAL ASIAN CONVERTIBLESBOOKRUNNERS: 1/1/2019 TO DATE


1 Credit Suisse 8 1,455.73 16.6

2 Goldman Sachs 6 1,242.37 14.2

3 JP Morgan 7 1,203.56 13.7

4 BAML 5 1,058.06 12.1


6 Citigroup 6 608.77 6.9

7 UBS 4 403.71 4.6

8 HSBC 2 304.79 3.5

9 BNP Paribas 3 274.37 3.1

10 Sumitomo Mitsui Finl 2 237.20 2.7

Total 26 8,769.21

Including exchangeables.

Source: Refinitiv SDC code: M10

GLOBAL CONVERTIBLE OFFERINGS – US BOOKRUNNERS: 1/1/2019 TO DATE


1 BAML 26 4,884.20 16.9

2 Morgan Stanley 20 4,205.83 14.6

3 JP Morgan 23 4,041.39 14.0

4 Goldman Sachs 20 3,995.82 13.8

5 Citigroup 16 2,334.41 8.1

6 Barclays 13 1,502.31 5.2

7 Credit Suisse 9 1,410.00 4.9

8 Wells Fargo 10 951.54 3.3

9 Jefferies 10 731.48 2.5

10 HSBC 2 592.19 2.1

Total 71 28,863.72

Source: Refinitiv SDC code: C9a

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INTERNATIONAL FINANCING REVIEW INDEX

10x Genomics 104AAA Oils & Fats 81Achmea 39Adani Green Energy 6, 69Adani Transmission 69Advanced Drainage Systems 86African Development Bank 28Ahead 88Ahli Bank Qatar 74Albion No.4 45Alerus Financial 105Alibaba Group 10Align Therapeutics 106AllHome 99Ally Financial 50Alstom 100Altice 26ANZ New Zealand 39Apellis Pharmaceuticals 113Apollo Hospitals Enterprise 98Apollo Medical Holdings 85Apple 25Argentina 76Armenia 71Arnott’s 92Ascensus Specialities 86Asian Development Bank 27, 30Asset World 99Assurance IQ 37Atnahs 91Autokiniton Global Group 86AutoNoria 2019 45AutoStore 92Azure Power Global 6, 69Babcock International 85Baker Hughes 105Banco Sabadell 46Bank of America Merrill Lynch 15Bank of East Asia 69Bank of Guizhou 11Bank of Montreal 40Bank of Sharjah 75Banque Federative du Credit Mutuel 41Barclays 17, 22Bartec 93Battersea Phase 3 Holding 81BB&T 36BCA Marketplace 90, 91Best 112B&G Foods 89BioNTech 101BMW 50BNP Paribas 41BNP Paribas Personal Finance 45Boluda Towage 91Boostheat 100Bovis Homes 102Branch Banking Trust 36Brass No.8 47BRF 75Buckeye Partners 86Budweiser Brewing Company APAC 10Caisse de Refinancement de l’Habitat 42CaixaBank 40Capital One 50Cardlytics 108CarTrawler 8Carvana 50Cassa Centrale Raiffeisen dell’Alto Adige 39Caterpillar 85Cathay Media Group 97Central Bank of Sri Lanka 71Ceramtec 8Cerence 89ChelPipe 72China Logistics Property Holdings 65China National Chemical Corp 78CHJ Automotive 95Chongqing Rural Commercial Bank 97Chongqing Sanfeng Environment Group 97Cineworld 90Citigroup 15, 21CK Asset Holdings 79Cloudflare 104Clydesdale Bank 17CMGE Technology Group 97CNAC Century (HK) 78

Commercial Bank 74Commerzbank 38Congatec 101Cooperatieve Rabobank 23Cordatus VIII 46Core & Main 25, 42Cotland 17Country Garden Holdings 64Covivio 34CPF Investment 80, 82CP Holding (BVI) Investment 80CP Lotus 80Credit Mutuel Arkea 40Credit Suisse 19, 22Cumulus Media 87CVC Credit Partners 46Danke Apartment 96Dassault Systemes 33Datadog 108Dell 89Deoleo 93Deutsche Bank 19, 22, 45DexKo 91Dionysus Aviation 80Disney 25Dubai 75Dufry 112Dummen Orange 8E2open 88E-Carat 10 46Eclipx Group 51Edgewell Personal Care 86Egypt 71EI Group 91Emaar Properties 74Empresas CMPC 86Enel 34Energias de Portugal 34EQT 102ESR Cayman 98European Investment Bank 30EVRY 82Exagen 106FADE 28Fagron 99FCE Bank 45Federal State of Hesse 29Firstmac 51Flat Glass Group 112Ford Motor 32Freddie Mac 47FWD Group 69Galliford Try 102Gecina 82General Electric 105General Motors 50Genting Hong Kong 69Gewobag 83Goertek 112Goertek (Hong Kong) 79Goldman Sachs 16Groupama 38Guangzhou Pharmaceuticals 98Gulf Marine Services 84GVC Holdings 92Hamilton Lane 107Harmonic 112Helios Towers 102Heska 113HighTower Holding 89Hilong Holding 68Hipgnosis Songs Fund 103Home Consortium 96Home Credit 11Hong Kong Exchanges and Clearing 6, 79Hongkong Huiyang International 79Hospitality Properties Trust 31Housing New Zealand 30Howden 89HSBC 17IHS 72Infineon Technologies 4, 35ING 19Inmarsat 90, 91Inova Automation 79Integrity Marketing Group 88Inter-American Development Bank 28

Intermediate Capital Managers 46International Game Technology 44International Money Express 109Intesa Sanpaolo Bank Ireland 40Intrum 44ION Group 88Ireland 29ITV 35Jamaica 76Japan Oil Gas & Metals National Corp 81Jeld-Wen 89Jilin Communication Investment Group 11JP Morgan 15, 112KAR Auction Services 89Kerry Group 4, 34Keter 8KfW 27Kiwibank 41Kotak Mahindra Bank 23Kraft Heinz 25, 32Kutxabank 39La Poste 33LaSalle Logiport REIT 99La Trobe Financial 51Laureate Education 107Lazard 22Lebanon 74Leeds Building Society 45Lendlease Global Commercial REIT 99Leo Paper Group Finance 81Liberty Global 31Lloyds Banking Group 17, 37London Stock Exchange Group 6Longfor Group Holdings 64Lonza 84LVMH 112LyondellBasell 34Macquarie 51Maguey Dutch Aviation 80Mahle 83Malaysia 71Mercuria Asia Group Holdings 77Mercuria Energy Trading 77Merian Chrysalis Investment 103Merlin Entertainments 91Merrill 88MHP 73Mitsubishi UFJ Financial Group 23Mizuho Financial Group 38Morgan Stanley 15MTU Aero Engines 111My Money Bank 41MyState Bank 51National Grid 36National Industrialisation Co 84Nationwide Building Society 17NewDay 45New Media Investment Group 88New York Life Global Funding 37New Zealand Debt Management Office 30Nomura 22Northland Power 109Oesterreichische Kontrollbank 28Olam International 82Olam Treasury 82Omega Healthcare Investors 108ON Semiconductor 90Oodle 46Opel Bank 46Optimum Credit 45Orange 33OVO Energy 92Parker Hannifin 85Parques Reunidos 91Peabody Energy 89Peloton Interactive 107Pemex 10Permanent TSB Group Holdings 39Perusahaan Listrik Negara 70PetSmart 8Peugeot 33PG&E 23Phoenix SpreeDeutschland 83PHS 9Pinewood Studios 43Ping Identity 106PlusServer 8

Polymetal International 84Prasac Microfinance Institution 78Prima banka Slovensko 73Pronovias 8Prosus 101Prudential Financial 37Recruit Holdings 95Reliance Nippon Asset Management 98Rothesay Life 37Sabadell Consumo 1 46Salt 44, 91Santander 17Santander USA 50Satsuma Pharmaceuticals 105Saudi Aramco 7SBI Cards and Payment Services 98SBI Life Insurance 98Sembcorp Energy India 6Servpro 50Severstal 72Shandong Iron & Steel Group 68Shanghai Henlius Biotech 10, 97Shenzhen Transsion Holdings 98Shinhan Bank 71Shuifa Group 65Signa Prime Capital 35SK Hynix 70Skopos Financial 50SmileDirectClub 106Snacking Investments Bidco 92Social Capital Hedosophia 9Sotheby’s 86South Africa 63Spirit MTA 31SpringWorks Therapeutics 105Standard Bank of South Africa 84State Administration of Foreign Exchange 16Stillfront 102St Paul’s CLO II 46Sumitomo Mitsui Financial Group 38SunTrust 36Supermarket Income REIT 103TA Associates 93TeamViewer 83, 100Tencent 101Terega 35The New York Times 85Tieto 82Times Neighborhood 97Tokyo Century 81Toll Brothers 25Topsports International 11, 97Truist 36Tufton Oceanic Assets 103Uber 25Uber Technologies 43UK DMO 29Ukrainian Railways 73Ultimate Fighting Championship 87Unigel Participacoes 76Verizon 34Virgin Galactic 9Virtu Financial 87Vivarte 9Vodafone 31VPBank Finance 82Vungle 89Warba Bank 73Wells Enterprises 88WeWork 8, 42Wingate Consumer Finance 51Wintershall DEA 35Wittur 92World Bank 30Worldline 35WP Carey 34Wuhan Metro Group 68Xianhe 112Yorkshire Building Society 47Youyuan International Holdings 80ZelisRedCard 87Zenith Bank 72Zensun Group 68Zhongrong Xinda Group 65Ziroom 96

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TIME

08:30 – 17:00

DATE

THURSDAY NOVEMBER 21 2019

VENUE

CANARY WHARF, LONDON

20TH FIG CAPITAL CONFERENCEThe IFR FIG Capital Conference will take place in London on Thursday November 21 2019.

Chaired by Keith Mullin of KM Capital Markets, the event will bring together six panels of the industry’s most senior and experienced speakers to assess the current state of play in the market, examine the issues and opportunities and provide an outlook for the year ahead and beyond.

The conference will include:• An assessment of 20 years of bank capital developments• A panel on Brexit and the UK’s likely regulatory relationship

with Europe• A discussion on EU bank risk-reduction measures• A re-review of Total Capital and AT1 features• • An investor panel• Views from the issuers

calendar. The event is free to attend but all delegates must be registered. Secure your place today by registering at http://bit.ly/2Me1NCd.

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resume bond buying provides instant boost Saudi Aramco IPO …dl.magazinedl.com/magazinedl/IFR Magazine/2019/IFR... · 2019-09-23 · BY HELENE DURAND, SUDIP ROY The European credit