IFRASIA

INTERNATIONAL FINANCING REVIEW ASIA

November 24 2018 ISSUE 1068 www.ifrasia.com

Huatai Securities pre-markets first GDRs

under Shanghai-London Stock Connect

India looks to equity and debt ETFs to

fund budget and state-owned firms

HDFC reopens corporate Masala market

following rupee rebound and rule fixes

BONDS STRUCTURED EQUITY BONDS PEOPLE & MARKETS

Chinese real estate
developers keep up
elevated supply of
high-yield bonds
06
Country Garden University of Sydney China’s measures
raises US$1bn as taps Korean demand to help private firms
new convertible for largest 25-year access credit leave
prices wide corporate bond foreign lenders cold
08 08 12
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Upfront
London landmarks
T
he introduction of the Shanghai-London stock trading
link has enormous political significance for the
governments at each end of the connection. In capital
markets terms, however, its success will boil down to two
things: price, and liquidity.
Huatai Securities is preparing the first London listing
under Shanghai-London Stock Connect, with GDRs due to
list by mid-December. It has tabled plans to raise anywhere
from US$500m to US$1.9bn, though the lower end of that
range seems more likely.
The float will be an important test on many fronts. For
one, it is not yet clear that the London market has much
interest in Chinese stocks – let alone a volatile securities
broker. The rules on the latest Stock Connect tie-up also
aren't even final (although Huatai's ability to go ahead
suggests they will be by the time the deal is done).
Politically, the UK will be keen to talk up tighter financial
links with China while it negotiates a painful exit from the
Creating an alternative pool of
liquidity for Chinese equities
sounds like a tall order, but the
fungibility factor gives Huatai a
good shot.
European Union. China, too, is testing ways to open its own
capital markets in the middle of a trade dispute with the
US.
The real success, however, will be creating an alternative
pool of liquidity for Chinese equities. While that sounds like
a tall order, the fungibility factor gives Huatai a good shot.
In contrast to other existing offshore markets, Huatai's
London GDRs will be fungible with its existing A-shares.
That means pricing should – in theory – be near parity, and
the timezone will effectively allow for trading to continue
after the Shanghai market closes.
Bankers expect some overseas Chinese investors will
gravitate towards the London market, potentially to the
detriment of Hong Kong (where H-shares lack fungibility),
adding to any native European demand.
Chinese companies are understandably excited at the
chance to raise money in a new market. In the long run,
however, overseas investors will need to be confident that
International Financing Review Asia November 24 2018 1
OPINION INTERNATIONAL FINANCING REVIEW ASIA
London can deliver the price and liquidity they need for this
experiment to become a success.
A better Masala recipe
M
asala bonds are finally back on the menu for Indian
companies after an eight-month diet, but bankers
and issuers should not be expecting a feast.
HDFC, one of India's most valuable companies, brought a
modest deal to the offshore rupee market last week, hinting
that a recent rule change has lifted interest in the format.
The central bank's streamlined tax regulations will
undoubtedly be positive for Masala issuance, but the
renewed enthusiasm for these bonds seems to be mainly
driven by investors who feel the rupee has nowhere to go
but up.
The truce between the Reserve Bank of India and the
government has bolstered confidence in the currency and
caused a healthy rally after a dismal year. At the end of the
day, it is the currency, not credit, that is driving Masala
appetite.
Like Dim Sum bonds in their early days, the asset class is
mainly a one-way currency play that sees primary issuance
dry up whenever the rupee heads south.
The Masala bond concept nonetheless has a lot going for
it. Allowing Indian issuers to raise overseas funding without
taking currency exposure is a laudable ambition – especially
at a time when local liquidity is running thin and India's
banks are wrestling with bad loans.
But the investor base needs to expand and diversify before
Masala bonds can become a staple of the credit markets.
Small deals from the likes of HDFC can only do so much.
If India is really serious about developing the offshore
rupee market, it should consider building a full, liquid yield
curve, starting with the sovereign itself.
An offshore government bond programme would provide
a valuable reference point for Indian issuers and global
investors, and would help the government diversify its own
funding sources.
India's government has never been keen on offshore
funding, preferring to rely on friendlier local sources
to finance its budget deficit. China's finance ministry,
however, offers a useful model: the PRC has now committed
to regular Dim Sum bond sales, giving overseas renminbi
holders an alternative to bank deposits.
There is one big difference, however. Offshore Chinese
investors are big buyers of China credit; overseas Indians,
for whatever reason, seem less interested in rupee risk.
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2 International Financing Review Asia November 24 2018

Contents
INTERNATIONAL FINANCING REVIEW ASIA
COVER STORIES COUNTRY REPORT
EQUITIES
04 Huatai tests London GDR route 15 AUSTRALIA
Huatai Securities is pre-marketing a US$500m-plus ANZ Banking Group took the
defensive option in printing
London listing, promising the first pricing benchmark a €1.25bn four-year covered
for the new Shanghai-London Stock Connect. bond on Thursday, after having
mulled a senior deal.
EQUITIES/BONDS
04 India eyes ETFs for budget boost 18 CHINA
The Indian government is turning to exchange-traded Carnival Group is seeking
consent from holders of its
funds to raise money at a challenging time in the US$180m 8% senior bonds due
capital markets. March 22 2019 to extend their
maturity by two years.
BONDS
06 Rupee revives Masala appetite 24 HONG KONG
New World China Land has
India’s Housing Development Finance Corp sold the
hired banks for five-year US
first corporate Masala bond issue since April, signalling dollar-denominated Green
the return of confidence in the rupee market. notes off its US$2bn medium-
term note programme.
NEWS 27 INDIA
Housing Development Finance
06 HY property onslaught persists Corp is planning to raise up to
Chinese property developers kept up the pressure on US$1bn from a five-year debut
Asia’s high-yield bond market last week, handing over issue of dollar bonds in Reg S
format.
generous coupons on US$1.58bn of new issues.
08 Country Garden tackles CB refi Country Garden showed that the 28 INDONESIA
convertible bond market remains open to Chinese property developers. Indonesian state-owned
08 Sydney wins University Challenge Australia’s oldest university took the airports operator Angkasa
bond market to a higher level with the largest 25-year corporate issue. Pura II is planning to raise
09 BOC returns to yen market after 24 years BOC last week priced ¥30bn Rp750bn from a dual-tranche
of three-year Green euroyen bonds in a return to the market after 24 years. bond issue.
29 JAPAN
PEOPLE & MARKETS Shizuoka Prefecture raised
C$100m from a 10-year bond
12 Policy shift gets cool response offering. The 3.148% bond
Government measures to help China’s private sector priced at par, yielding 36bp over
access cheaper onshore funding will have little impact mid swaps.
on the availability of overseas finance, specialists say. 30 MALAYSIA
13 IPIC files suit against Goldman over 1MDB Abu Dhabi’s IPIC has filed a Prasarana Malaysia has
lawsuit against Goldman Sachs and others to recover losses from 1MDB. mandated five banks to
13 Regulator to end monitoring of StanChart New York’s DFS will end a manage an offering of Islamic
period of monitoring of StanChart on December 31. bonds, expected to launch this
12 Who’s moving where Nomura has hired Jwalant Nanavati as head of week, to raise up to M$2bn.
technology, media and telecommunications for Asia ex-Japan.
14 In brief Noble Group said it will cooperate fully with Singapore authorities 30 NEW ZEALAND
in an investigation, but plans to proceed with its restructuring process. Telecommunications
infrastructure company Chorus
raised NZ$500m, including
ASIA DATA NZ$200m of oversubscriptions,
for a 10-year note offer.
36 This week’s figures
International Financing Review Asia November 24 2018 3
November 24 2018 ISSUE 1068
31 PHILIPPINES
Metropolitan Bank & Trust
Company plans to reopen its
November 2020 bonds to raise
an additional Ps5bn, according
to a Stock Exchange filing.
32 SINGAPORE
DBS Bank last Monday priced a
US$1.25bn three-year covered
bond at mid-swaps plus 31bp,
achieving a broader distribution
than its previous dollar trade.
33 SOUTH KOREA
Low-cost carrier Air Busan has
won approval from the Korea
Exchange for a December
listing of up to W20.8bn
comprising 5.21m shares.
34 TAIWAN
Chailease International
Finance has increased a three-
year loan to US$250m from
the US$150m target after
exercising its greenshoe option.
35 THAILAND
Hotel and restaurant operator
Minor International mandated
four banks to arrange investor
meetings globally from
November 20.
35 VIETNAM
Joint Stock Commercial Bank
for Investment & Development
of Vietnam attracted 12 banks
in general syndication for its
US$300m financing.
14
News Masala revival 06  Chinese property bonds 06  Sydney U goes long 08

Huatai tests London GDR route

„„Equities Discount range seen as key to first test of Shanghai-London trading link

By ROBERT VENES A-shares trade around US$100m whichever is lower, but the times book value, versus 0.9
per day and the Hong Kong- banker said that investors times in Hong Kong. The GDRs
HUATAI SECURITIESlaunched pre- listed H-shares around US$15m. will initially be asked where will be fungible with Huatai’s
marketing last Thursday for a Pricing will not fall below they care, regardless of the A-shares, but investors can
US$500m-plus London listing one times price to book or boundaries. expect to pay a premium to the
that promises to set the first a 10% discount to the 20- Huatai’s Shanghai shares Hong Kong price.
pricing benchmark under the day VWAP on the A-shares, currently trade at just over 1.3 “This is a very well-known
new Shanghai-London Stock
Connect trading link.
The offering comprises 82.51m
global depository receipts,
with each GDR representing
10 A-shares, for a sale of 10% of
the company’s existing share
capital. That values the follow-on
at up to US$1.9bn, based on
the pre-deal market cap, but a
banker involved said that the
GDR listing was unlikely to hit
that size.
More important than the
size of the deal is the relative
value of the GDRs versus
Huatai’s existing stock. The
Chinese brokerage has a
market capitalisation of around
US$19.2bn, with relatively
liquid lines in Shanghai and
Hong Kong: the Shanghai-listed

India eyes ETFs for budget boost After hitting a seven-month

„„Equities/Bonds Government plans Rs80bn follow-on in CPSE ETF and first debt fund
By S ANURADHA,
KRISHNA MERCHANT
The Indian government is
turning to exchange-traded
funds to raise money at a
challenging time in the capital
markets.
With the March 31 end of
the financial year approaching,
the government last week said
it would raise up to Rs80bn
(US$1.1bn) through a follow-on
offer in CPSE ETF, which holds
stakes in a basket of state-
owned companies. Should
demand allow, it has the
option to increase the sale to
Rs140bn.
The fundraising will help
make up some of the shortfall
in this financial year’s
divestment programme, which
has raised only Rs152bn so
far, well short of the Rs800bn
target.
The government last week
also issued a request for
proposals to appoint an asset
manager to a planned debt ETF
of state-owned companies.
The debt ETF, which bankers
say could take up to 18 months
to set up, is designed to help
state-owned companies meet
their capital expenditure
and funding requirements
by leveraging the aggregate
strength of public-sector
issuers.
SUBSCRIPTION DISCOUNT
The anchor book for the CPSE
ETF follow-on will open for one
day on November 27 and the
rest of the offer will run from
November 28 to November 30.
The government will be
selling shares to the ETF
at a 4.5% discount to their
weighted-average price during
the offer period, which should
stimulate demand despite
the current sluggish market
conditions.
“The market has bottomed
out and with a 4.5% discount
there is some protection for
the investors,” said Manish
Bhatt, director at financial
advisory firm MBD Advisory.
low on October 26, the S&P
BSE Sensex index has regained
close to 5% since.
Reliance Nippon Asset
Management, the manager of
CPSE ETF, is also optimistic.
“Inflows into the mutual
fund sector have remained
positive despite a blip a couple
of months ago,” said Vishal
Jain, head of ETFs at RNAM.
Mutual funds faced
redemption pressure as
investors worried over their
exposure to non-bank finance
companies after the default
of Infrastructure Leasing &
Financial Services triggered a
liquidity crunch.
However, some analysts
think the energy-heavy
concentration of the CPSE ETF
makes it less attractive than
the more diversified Bharat 22

4 International Financing Review Asia November 24 2018

 For daily news stories
visit www.ifrasia.com

BOC returns to Japan 09  NBFCs sell down good assets 10  Joy for Malaysia bondholders 10

quantity for local investors who
have followed it for a while,
but there are also international
funds in Asia who own the
stock but will want to take part
in the GDRs,” said the banker.
“There is interest from some
very big institutional names,
with a lot of demand out of
London.”
The GDR discount is
significant because H-shares
trade at wide discounts and
the first offering of D-shares in
Germany, for Qingdao Haier,
also came with a deep discount
(although both lack fungibility
with A-shares).
On Thursday, Huatai’s
A-shares closed at Rmb17.08.
The HK$13.36 close on Huatai’s
H-shares is a 31% discount.
Pricing of Qingdao Haier’s
D-shares in late October was at
a 37.5% discount to its A-shares,
a gap that had widened slightly
by Thursday’s close to just
under 40%.
At a base size of US$500m,
Huatai’s London GDR offering
represents just five days’ trading,
which the banker stressed
was important at a time when
liquidity fetches a big premium.
FAST TRACK set, and will run for at least But the banker said that
Huatai’s GDR plan comes after a week. Unlike an IPO, pre- current market woes were
China’s securities regulator marketing will not involve less of a concern for Huatai’s
published draft rules on analyst meetings, with deal, particularly as its A and
August 31 for the long-awaited existing research available. A H-shares have recovered from
Shanghai-London link. roadshow this week will take their September and October
“The Shanghai-London Stock in London and major European lows and are trading around
Connect is the first of its kind cities as well as Asia, but the March/April and June levels,
respectively.
“This is a very well-known quantity for local Huatai floated in Shanghai in
investors who have followed it for a while, but a Rmb15.75bn (US$2.27bn) IPO
there are also international funds in Asia who in February 2010 and its Hong
Kong IPO in June 2015 raised
own the stock but will want to take part in the
HK$4.04bn (US$515m).
GDRs. There is interest from some very big According to the consultation
institutional names, with a lot of demand out of draft, companies listed on the
London.” London Stock Exchange will be
able to issue Chinese depositary
to directly link the Chinese offering is Reg S and as a result receipts on the Shanghai Stock
and European markets, and a management will not travel to Exchange, while SSE-listed
strategic component of China’s the US. companies will issue GDRs on
capital markets reform,” said the LSE.
Zhou Yi, chairman and CEO of TRADING UP The major difference
Huatai in a statement. In Europe, while the IPO between the two is that LSE-
“The programme offers us pipeline has thinned out listed companies can only issue
access to one of the deepest and dramatically in recent CDRs backed by existing shares,
most influential capital markets weeks, a handful of recent at least for the time being,
in the world and provides listings (Shurgard, Neoen, whereas Chinese companies
fungibility between the GDRs Piovan, Garofalo Health Care, can issue GDRs backed by new
and the A-shares.” Nova Ljubljanska Bank and shares.
The deal is also on a fairly Kazatomprom) are trading Huatai, JP Morgan and
rapid turnaround. Books open up, although one exception is Morgan Stanley are joint
on Monday at the earliest, Italian real estate fund Arima global coordinators and joint
when a price range will be Real Estate. bookrunners with Credit Suisse. 

ETF, also state-owned, which
comprises energy companies,
banks, and even some private
companies.
“Investors would rather buy
a Bharat 22 follow-on offer
than CPSE ETF,” a Mumbai-
based analyst said.
The CPSE ETF holds stakes
in 11 state-owned companies,
including nine in the power
and oil sectors: NTPC, Coal
India, Indian Oil, Oil & Natural
Gas Corp, Rural Electrification
Corp, Power Finance Corp,
Oil India, NLC India and SJVN.
Bharat Electronics and NBCC
India complete the list.
The follow-on offer is the
biggest since the CPSE ETF
was floated in 2014 through
a Rs30bn IPO. There were
two follow-on offers in 2017
totalling Rs85bn. The deal
will also be the government’s
biggest divestment so far this
year.
ICICI Securities is the adviser
to the CPSE-ETF follow-on
offer.
BROADER INVESTOR BASE
The proposed debt ETF aims to
give public sector companies a
broader investor base to lessen
their dependence on wholesale
investors, according to Ajay
Manglunia, head of fixed
income at Edelweiss Financial
Services. The ETF will be sold
to both retail and institutional
investors.
Manglunia said state-owned
companies have been reluctant
to consider public debt issues
because of the distribution
costs. The ETF, by contrast, will
offer a cheaper route.
“The bonds of public sector
companies can be bundled
together and they can raise
money from the bond
market at a lower cost; that
is the biggest advantage of a
debt ETF. If 10 state-owned
companies are taking part in
debt ETF, they can raise money
from retail investors at one
stroke, rather than go to the
market 10 times,” he said.
In addition to the debt
securities of participating
public sector companies,
the ETF may also include
government securities,
according to the RFP.
The successful AMC will
manage the ETF for three
years, with a potential two-
year extension. Responses are
due by December 17.
India’s corporate bond
market is relatively
underdeveloped at around 13%
of GDP, compared with 30.4%
for government bonds, and
market participants expect it
will take time for the debt ETF
to take off.
“I don’t see anything
happening on this for at least
18 months. With an election
in May, this will be the last
thing on the government’s
mind,” a mutual fund
manager said.
Similar to the equity ETF,
the debt ETF will be launched
as a new fund and may be
followed by further fund
offers, tranches or taps. AK
Capital Services is the adviser
for the creation and launch of
the ETF.
“A debt ETF is something
new. The positive experience
from equity ETF will be tested
on debt, and we need to see
the success of that,” said
Manglunia. 

International Financing Review Asia November 24 2018 5

News
Rupee revives Masala appetite
„„Bonds HDFC leads Indian issuers back to offshore rupee market

By KRISHNA MERCHANT last year, which were placed intense pressure from the central bank is seen retaining
with International Finance government to boost lending, its operational autonomy,” said
India’s HOUSING DEVELOPMENT Corp. the Reserve Bank of India Radhika Rao of DBS Bank in a
FINANCE CORP reopened the HDFC’s return came after the agreed last week to support note on November 20.
Masala bond market last rupee strengthened to 71.12 small businesses, revise capital
week with the first corporate against the US dollar last week, rules for banks and set up a CURRENCY CALL
issue since April, signalling a 4.3% rebound from October committee to examine the level The deal shows that foreign
the return of confidence in 9’s low and its highest level of its capital reserves. investors are willing to take a
the rupee market following a since September 3, as worries “Easing tensions between punt on the Indian currency
currency slump and shadow eased over the rift between the RBI and the government is again following the recovery
banking crisis. the central bank and Narendra likely to be positive for rupee from its battering earlier this
The country’s largest housing Modi’s government. Under assets, particularly as the year.
finance company raised Rs5bn
(US$70m) from five-year one-
day Masala bonds at 8.75%,
payable semi-annually. The
deal is HDFC’s first Masala in
almost a year, and the first
from an Indian issuer since the
government eased restrictions
in September.
Despite the modest size, the
trade raised hopes that India
could be winning back foreign
investors after a torrid year,
marked by a slump in the
rupee and a war between the
government and the central
bank.
However, it had to offer more
than 200bp over the 6.73% it
paid (also semi-annually) on the
Rs13bn Masala notes maturing
in November 2022 that it issued

HY property onslaught persists have offshore issuance quotas

„„Bonds Chinese developers continue to rush to market amid fears for 2019
By CAROL CHAN
Chinese property developers
kept up the pressure on Asia’s
high-yield bond market last
week, handing over generous
coupons on US$1.58bn of new
issues amid further warnings
over the outlook for the sector.
CHINA EVERGRANDE GROUP (B1/
B+/B+), TIMES CHINA HOLDINGS (Ba3/
B+/BB–) and GREENLAND HOLDING
GROUP (Ba1/BB/BB–) all tapped
the market last week to help
meet looming refinancing
requirements. (See China Debt
capital markets.)
The continued supply
came despite dismal market
conditions, with many bonds
from the sector trading at
record lows, highlighting fears
that it may be harder to raise
money in the future. Corporate
high-yield bonds in Asia now
pay an average yield of 10.27%,
according to BAML indices, up
170bp since the start of October
and the highest since January
2012.
“If developers have
refinancing needs in the next
six or seven months, it will
be better for them to do the
necessary capital raising as
early as possible, otherwise
the funding cost may be even
higher,” a banker from a
Chinese bank said.
“It is hard to say whether
the market will be very bad for
the whole year, but it is likely
to continue to struggle at least
early next year.”
Ongoing US-China trade
tensions, further interest rate
rises in the US, China’s slower
economic growth, the downturn
of the property sector and
rising default risks of weak
Chinese corporates are some of
the factors that contribute to a
dismal market, he said.
Although some companies
expiring at the end of the year,
China bankers expect quotas
to be extended as long as they
are for genuine refinancing
purposes.
Instead, analysts see the
timing of recent new issues as a
sign of the intense refinancing
pressures looming in 2019.
Fitch on November 18
warned that Chinese developers
are likely to face tougher
market conditions next year,
with slowing economic growth
and deteriorating sentiment
likely to drag down sales
volumes and stifle gains in
home prices.
Fitch expects the sector’s
sales volumes to fall by 5%–10%,
following low-single-digit gains
in 2018, while prices are likely

6 International Financing Review Asia November 24 2018


“We had done some non-
deal investor meetings some
months back, but certainly the
rupee stability now has helped
in renewing investor interest,”
said VS Rangan, executive
director of HDFC.
HDFC is the first domestic
issuer to raise Masala bonds
since the government waived
the 5% withholding tax on
coupon payments on offshore
rupee bonds issued from
September 17 to March 31
2019, in a bid to attract foreign
investment and support the
rupee.
IFC issued a Rs7.4bn three-
year Masala in October, but
Dewan Housing Finance was
the last Indian company to sell
Masala bonds, with a small
Rs10bn tranche of five-year
bonds priced at 8.95% in April.
The RBI has also scrapped
a rule preventing banks from
supporting Masala bonds as
market-makers, which should
boost liquidity in the secondary
market.
“The removal of the
withholding tax on Masala
bonds was a big positive,”
said Rangan. “The tax made
it difficult for issuers to price
offshore rupee-denominated
bonds in line with domestic
levels.”
HDFC’s five-year Masala was
to remain largely stable, but
could fall in some lower-tier
cities.
The words of caution came
just a week after a similar
warning from S&P.
Fitch said the liquidity of
smaller players – particularly
those rated B or below – could
be squeezed by slowing sales
and ongoing development costs
for existing projects.
“Some could be forced
to sell existing projects to
larger operators, which
would accelerate industry
consolidation, or accept lower
prices to maintain cashflow,
especially in lower-tier cities.
Developers that are unable to
preserve liquidity could face
negative rating pressure,” Fitch
said.
priced at par with domestic
levels. In fact, it came slightly
inside its recent domestic
issue on November 20, a
Rs40bn five-year deal priced
at 9.05%.
This is also the first
offshore deal from a housing
finance company following
the defaults at Infrastructure
Leasing & Financial Services
that rocked the shadow
banking sector.
“Following the IL&FS
crisis, investors have become
selective, they are committing
to institutions where they
are comfortable,” said
Rangan. “Some NBFCs are
coming to the market and
investor interest is improving
depending on the names.”
RUPEE REBOUND
INDIA’S CURRENCY HAS RECOVERED FROM OCTOBER LOWS (RS/US$)
76
74
72
70
68
66
64
62
Jan Feb Mar Apr May
Source: Refinitiv
RISING FUNDING COSTS
Developers are already paying
much higher yields than in
the recent past as they rush to
print bonds before this year’s
market window closes in mid-
December.
For example, Times China
paid 11.00% for a US$300m two-
year bond last week, compared
with a 7.85% yield for US$450m
three-year non-call two issue
in May.
Greenland, despite its state-
owned background, paid 9.25%
for a US$280m 1.5-year bond
sold in two parts last week, a
7.875% yield for a US$200m
364-day bond in June, and 5.50%
for a US$300m three-year issue
in February.
But among last week’s deals,
Evergrande was the most eye-
International Financing Review Asia November 24 2018 7
Axis Bank and JP Morgan were
the lead arrangers for the HDFC
deal.
MASALA PIPELINE
HDFC’s transaction “opens the
door for a new line of Masala
issuance under the revised RBI
regulations”, coupled with the
return of investor interest and
confidence both in the rupee
and Indian names, Rangan said.
HDFC has approval to raise
up to Rs50bn from the offshore
rupee-denominated bonds in
the next six months.
“Our endeavour will be
to issue more Masala bonds,
subject to rates and the demand
environment, since they help
diversify our investor base,”
said Rangan.
Jun Jul Aug Sep Oct Nov
catching name as it revisited
the market for a second sizable
issue in less than a month.
Evergrande raised US$1bn
from a reopening of the
11.00% 2020 bonds it priced
last month, bringing the total
outstanding size of the line to
US$1.565bn.
The tap was more like a
club deal as all the bonds were
sold to friends and family or
banks, which allowed the issuer
to sell the bonds above their
secondary price, according to a
banker on the deal.
The additional bonds, sold
through a keepwell structure
via the Hong Kong-listed
company’s 63.46%-owned
subsidiary HENGDA REAL ESTATE
GROUP, priced at par, compared
with a secondary price of
For daily news stories
visit www.ifrasia.com
Other local issuers are
planning to visit the market.
POWER GRID CORP OF INDIA has
mandated Axis Bank, HSBC,
Standard Chartered and SBI
Capital Markets for a Masala bond
offering, according to market
sources, and the same banks are
arranging investor meetings for
the company in Asia and Europe
from November 26.
HOUSING AND URBAN DEVELOPMENT
CORP (Hudco) has mandated
Axis Bank, MUFG and ICICI Bank
for a potential Masala offering,
according to a market source.
NATIONAL HIGHWAYS AUTHORITY OF
INDIAis also considering its
options, said DCM bankers.
“While PGC has mandated
four banks, whether the deal
materialises will depend on
investor feedback and market
conditions,” said a DCM
banker. PGC, Hudco and NHAI
are all yet to make official
announcement on the plans.
Recent investor inflows are
expected to support appetite
for new issues. Foreign
portfolio investors were net
buyers of rupee bonds to the
tune of Rs56.50bn month to
date fter selling bonds worth
Rs202bn combined in August
and September. FPIs have been
encouraged by the rupee’s
gains and attractive rates in
India, said a DCM banker. 
around 99.8 before the
announcement of the proposed
deal.
The original issue was part
of a US$1.8bn triple-tranche
offering priced on October
30. That deal dragged the
entire sector wider as it
priced at a huge premium to
Evergrande’s existing bonds,
underlining the challenge of
attracting investors in a risk-off
environment.
S&P said the tap would
further enable Evergrande and
Hengda to address the issues
surrounding its short-term
maturities and significant
alternative financing. However,
the impact is unlikely to be
significant due to the large size
of the developer’s short-term
and overall debt. 
News
Country Garden tackles CB refi
„„Structured Equity China’s cooling property market concerns investors
By FIONA LAU
COUNTRY GARDEN HOLDINGS showed
that the convertible bond
market remains open to
Chinese property developers
with a HK$7.83bn (US$1bn) deal
that went some way to meeting
its refinancing burden.
The five-year put three CB,
launched late Wednesday, was
marketed at a coupon/yield of
4.00%–4.50% and a conversion
premium of 30%–35% over
the reference share price of
HK$9.68, before pricing at
the investor-friendly end of
terms. The conversion price is
HK$12.584.
The terms are much more
generous than Country
Garden’s latest equity-linked
offering, but a sliding stock
price and sharply higher
credit costs in the sector
meant investors were hard to
convince.
Sydney wins University Challenge
„„Bonds University taps Korean appetite for ultra-long bonds
By JOHN WEAVERS
Australia’s oldest university
took the country’s bond
market to a higher level last
Monday with the largest 25-
year corporate issue on record,
opening the door to a potential
run of similar ultra long-dated
local deals.
The UNIVERSITY OF SYDNEY raised
A$200m (US$146m) from
its third MTN, tapping high
demand from Korean life and
general insurance companies to
extend its maturity profile.
The Aa1 (Moody’s) rated
university priced the 4.5%
November 26 2043s at par,
in line with 4.5% guidance,
having secured orders from
10 investors, including eight
yield-focused Asian accounts.
ANZ and NAB were joint lead
8 International Financing Review Asia November 24 2018
Against that backdrop, Credit spreads have soared stuck with bonds.”
market talk suggested that in the Chinese property sector “Yes sentiment for
the CB was not fully cleared in recent weeks, with China property has been bad but
and joint global coordinators Evergrande and Times China the (fundraising) market is
Goldman Sachs and JP Morgan, each selling two-year straight not totally shut. There is still
which had agreed to hard US dollar bonds last week at interest for higher-quality
property issuers,” said another
person.
“The January CBs were traded at 99.5 before
the launch of the new deal. Now the company CB REPURCHASE
is offering to buy back the old CBs at 100.75 Alongside the new CB, Country
Garden offered to repurchase
which means there is a pick-up of 1.25 points up to HK$7.83bn of a 363-day
immediately. You are basically gambling the new CB it sold in January. Holders
deal will not fall below 99.” who took up the new CBs
were given priority in the
repurchase, which helped
underwrite the deal, had taken yields of 11%. (See News.) drive demand for the new
some positions. People close to the deal, offer. Country Garden said it
“We are hearing some bonds however, said the books were had accepted tenders totalling
were left around,” said a banker covered and the deal was fully HK$6.05bn from an outstanding
away from the deal. “Risk allocated. amount of HK$15.2bn.
appetite for property plays is “Any deal we do, we do The repurchase price is
already low. With Evergrande technically take a position 100.75% of the principal
paying 11% for its bonds, because we need to make a amount, which is the same as
investors are getting even more market,” said one of the people. investors will get if they hold
cautious on the sector.” “I won’t classify it as being the old CB to maturity.
investors, many of whom
received degrees Down Under.
“Most Australian universities
are Double A rated which
places them in the upper
managers. yield and cross-currency basis echelon within the corporate
Recent regulatory changes swap levels presently making market spectrum with stable
requiring South Korea’s huge Australia’s MTN market a cashflows and very little debt,”
life insurance industry to viable alternative to reliable said Adam Gaydon, syndication
extend the duration of its asset US private placements when manager at ANZ.
The US private placement
market has historically
been the first port of call for
“Most Australian universities are Double A rated Australian companies seeking
which places them in the upper echelon within small US$150m–$350m
multi-tranche deals usually at
the corporate market spectrum with stable tenors of between 10 and 15
cashflows and very little debt.” years, often alongside longer
maturities where many local
funds dare not tread.
Indeed Australian and New
portfolios have led to a search seeking ultra-long term tenors Zealand firms, primarily from
for international markets in Australian dollars,” said Brad the utility, industrial, property
offering high-quality long-term Scott, director for corporate and infrastructure sectors,
assets that pay competitive debt capital markets at National have issued almost US$5bn-
returns. Australia Bank. equivalent so far this year – the
“The typically AA rated Australian universities are largest supply outside the US
university sector uniquely ticks seen as strong, stable and besides the UK, according to the
all these boxes with current even familiar credits by Asian Private Placement Monitor.

The January CB was done
at a time when Country
Garden’s share price was
around its all-time high. The
HK$15.6bn deal carried a yield
to maturity of 0.75% and a
conversion premium of 20%.
The conversion price was set at
HK$20.556.
However, rising interest rates
and a cooling property market
in China have put the sector
under pressure, dragging down
the shares of listed Chinese
property developers. As of last
Thursday, Country Garden
shares were down 34% year to
date.
Less than 50 investors
participated in the transaction,
including outright investors
and hedge funds, with the top
five taking about 60% of the
deal.
“The January CBs were traded
at 99.5 before the launch of the
new deal. Now the company
is offering to buy back the old
CBs at 100.75 which means
there is a pick-up of 1.25 points
immediately,” said another
person close to the deal. “You
Monash University accessed
the US PP market in December
2016 with a A$218m sale of
Green bonds with 15 to 20-year
tenors.
However, other Australian
universities have shown a clear
preference for the domestic
MTN market, where local and
overseas investors in the 10-
year segment appreciate the
50bp–70bp pick-up on offer
over SSA Kangaroos and semi-
government bonds.
The UoS sale followed a
A$50m 25-year Sustainability
bond issued by Macquarie
University in late August that
pays an identical 4.5% coupon.
Macquarie U had originally
planned a A$200m single
tranche 10-year Sustainability
bond, but added the longer
piece to satisfy interest, again
from Korea.
UoS’s third bond came after a
A$200m 10-year print in August
2015 and an inaugural A$200m
seven-year MTN in April 2014,
are basically gambling the new
deal will not fall below 99.”
The CBs traded around 99
last Thursday.
To offset the potential
dilution of the new CB and
lift the conversion premium,
Country Garden added a call
spreaad overlay through call
option transactions with
Goldman Sachs and JP Morgan.
The company purchased a
lower strike call option with
a strike price equal to the
initial conversion price of the
CB and sold to counterparties
a higher strike call option at
a strike price of HK$17.908,
representing an effective
conversion premium of 85%.
HSBC, which was not on the
deal at launch, was added as
a joint bookrunner at a later
stage, according to term-sheets
seen by IFR.
Country Garden shares fell
3.5% to close at HK$9.34 last
Thursday, and lost a further
3.4% on Friday to close at
HK$9.02. The new bonds were
last bid at 98.4, according to
Refinitiv data. 
which reopened the market as
the first from a university since
Macquarie U’s A$250m 10-year
in August 2010.
Six other universities have
since sold domestic bonds,
five of them with debut
transactions of A$175m–
$300m, almost all with 10-year
tenors.
The success of the latest UoS
deal suggests others may now
look to take advantage of the
flat yield curve and extend
their funding out to 25 years.
“In its third capital markets
transaction, the University of
Sydney’s watershed 25-year
issue represents a textbook
peer case study of how the
appetite from the tertiary
sector to access capital markets
continues to evolve in lock-step
with the development of ultra-
long Australian dollar regional
life insurance demand,” said
Scott at NAB. “Other sector
peers will surely be watching
this development closely.” 
International Financing Review Asia November 24 2018 9
BOC returns to yen
market after 24 years
„„Bonds Bank becomes first Chinese issuer of Green bonds in
Japan
By TAKAHIRO OKAMOTO,
CAROL CHAN
BANK OF CHINA last week priced
¥30bn (US$265m) of three-
year Green euroyen bonds on
its return to the yen market
for the first time in 24 years.
The deal made BOC the first
Chinese issuer of Green bonds
in Japan and the first Chinese
issuer to tap the yen market
since China Eastern Airlines
sold ¥50bn three-part Pro-
bonds in March.
According to Refinitiv data,
BOC last printed yen bonds
in 1994 when it raised ¥15bn
from seven-year notes via
Nikko Cordial.
The state-owned Chinese
commercial lender has been
on a funding tour around
Asia Pacific lately, with its
branches in Sydney, Hong
Kong and Macau issuing bonds
in five currencies earlier this
month.
The Tokyo branch’s 0.42%
Green bonds were priced
at 32bp over yen offer-side
swaps. This gave a pick-up of
around 5bp–10bp over the
BOC’s US dollar yield curve
after swapping into the US
currency, according to a
banker on the deal.
Some Japanese investors
wanted an absolute yield of
at least 0.40% and the final
spread landed right in the
middle of Monday’s initial
guidance range of 27bp–37bp.
The bonds were sold to a
variety of investors including
Japanese, Chinese, other Asian
and European buyers. Among
the Japanese investors were
city banks, trust banks, asset
managers, property insurers,
and regional investors.
Japanese investors bought
40% of the notes, other Asian
investors 40%, European
accounts 19% and offshore
US buyers 1%. The book size
For daily news stories
visit www.ifrasia.com
swelled to near ¥39.1bn with
20 accounts participating.
Asset managers and fund
managers booked 37%,
sovereign wealth funds 30%,
banks 25%, insurers 2% and
others 6%.
The Green feature of
the bonds, certified by the
Climate Bonds Initiative, was
not a very strong factor in
drawing demand, but had
some positive effects, several
bankers on the deal said.
Through its Tokyo branch,
BOC last week also sold a
Rmb800m (US$115m) two-year
Green Dim Sum bond at par to
yield 4.35%, well inside initial
4.65% area guidance.
The offshore renminbi-
denominated issue drew final
orders of Rmb1.34bn from 34
accounts. Of the notes, 98%
went to Asia, 1% to Europe
and 1% to offshore US. By
investor type, 54% were banks,
34% were asset managers and
fund managers, 10% were
private banks, and 2% were
insurance.
Both deals will be issued
under BOC’s US$40bn
medium-term note
programme and have
expected ratings of A1/A/A.
The bonds may be listed on
the Tokyo Pro-bond market
after the payment date of
November 29.
Proceeds from the Reg S
Green bonds will be used to
fund eligible projects related
to sustainable water and waste
water management and clean
transportation.
BOC, BOC HK, BOCI, Daiwa,
Morgan Stanley, Mizuho, Nomura
and SMBC Nikko were the
bookrunners on the yen
tranche.
BOC and Nomura were
joint global coordinators,
joint lead managers and joint
bookrunners on the Dim Sum
tranche. 
News
NBFCs hand over crown jewels
„„Bonds Banks ‘cherry picking’ assets as sector squeeze continues

By KRISHNA MERCHANT
India’s non-banking financial
companies are securitising or
selling their higher-quality
assets to weather a liquidity
squeeze, as they remain unable
to take advantage of the
central bank’s partial credit
enhancement facility.
Securitisation volumes soared
to around Rs180bn (US$2.5bn)
in October compared with the
monthly run rate of Rs110bn so
far this financial year, according
to Icra. The jump in volume
was driven by the scale of the
funding needs for shadow
banks, with many selling down
their retail portfolios to banks,
according to an Icra note dated
November 13.
The funds raised from
securitisation helped meet the
large repayment obligations
of the NBFCs in October, with negotiating hard on rates.” Leasing & Financial Services
Rs780bn of commercial paper The increased reliance on was putting a severe strain on
due for repayment, in an asset sales and securitisation lower-rated shadow banks and
otherwise difficult market to comes in spite of efforts to ease could slow lending.
raise funds, said Icra. credit conditions for the sector. But none of the NBFCs have
“The banks have an option to The Reserve Bank of India gone down this route so far,
say DCM bankers. Icra said in
a note on November 16 that
the facility is of limited use
for them and may not drive
“There are some opportunities to buy the debt of significant issuance volumes.
smaller NBFCs because they will not be able to “A genuine first-loss credit
raise new bonds given their lower ratings and will enhancement would be one in
get into stress.” which the credit enhancement
provider does not ask for his
money to be reimbursed till the
time the senior debt has been
fully repaid or the borrower
buy or securitise assets, freeing on November 2 allowed NBFCs has become regular in servicing
up capital for shadow banks and to use the PCE facility, under all his debt obligations,” said
providing liquidity to them,” which banks would act as Vibhor Mittal, assistant vice
said Ajay Manglunia, head partial guarantors on some of president of Icra. But under the
of fixed income at Edelweiss their existing debt, because of RBI’s PCE guidelines, the drawn
Financial Services. “The banks concerns that the fallout from facility becomes payable within
are cherry-picking assets and the defaults by Infrastructure 30 days.

Malaysia pays out road creditors the concession holder, almost

„„Bonds Full settlement sets template for cancelled projects
By KIT YIN BOEY
Creditors to Malaysian toll-road
operators have reason to cheer
after the government agreed
a settlement over the Eastern
Dispersal Link project that will
see bondholders paid in full.
Investors holding M$1.07bn
(US$260m) of MRCB SOUTHERN LINK
Islamic bonds are set to receive
all principal and accrued
interest under the November
12 settlement, which came 11
months after the government,
then led by former Prime
Minister Najib Razak, abolished
toll collections and began talks
to take over the project.
The settlement injected
some optimism into the
infrastructure sector after the
new government of Prime
Minister Mahathir Mohamad
threatened to cancel a host of
projects that were agreed under
the previous administration.
The new government also
sought to ban tolls nationwide
to fulfil an electoral pledge,
but the plans were abandoned
after it realised massive
“The outcome of the EDL’s settlement
negotiations is pivotal to the sector’s
stakeholders. It will set the tone and serve
as a benchmark deal for other potential toll
abolitions in the future.”
compensation charges would
have to be paid to concession
holders.
“Although we note that the
government of Malaysia has
held back its plan to abolish
industry-wide toll collections
for now, the outcome of the
EDL’s settlement negotiations
is pivotal to the sector’s
stakeholders,” said Davinder
Kaur Gill, co-head of RAM
Rating’s infrastructure and
utilities ratings.
“It will set the tone and serve
as a benchmark deal for other
potential toll abolitions in the
future.”
Under the termination pact
signed on November 12, the
government will pay a total
settlement of M$1.326bn to
equal to the total cost of the
toll road project. The net
book value of the EDL asset
is around M$1.135bn, as of
November 8, according to
sponsor Malaysian Resources
Corp (MRCB).
MRCB said the settlement
proceeds would be used to pay
the outstanding senior sukuk
of M$835.7m in principal
and interest obligations, the
outstanding junior sukuk
of M$238.5m, and repay
shareholders’ advances of
M$226.6m, with the balance
to be used for general working
needs and other expenses.
The 8.62km EDL joins
the southern tip of the
North-South Highway to the
Bangunan Sultan Islandar
Customs, Immigration and
Quarantine complex in
Johor – the checkpoint for
vehicles travelling to and from
Singapore.
MRCB Linkaran Selatan
(MLSSB) is the concession
holder, and parent of funding

10 International Financing Review Asia November 24 2018

 For daily news stories
visit www.ifrasia.com

SECTOR STRESS
The central bank has been
fighting government pressure
to ease lending restrictions
for NBFCs further, because it
is worried about encouraging
reckless lending.
For banks, PCE is costly
because the risk weight is
100% for BBB issuers and 30%
for AA issuers. This means that
the lenders have to set aside
capital for the entire bond
issue in the case of a BBB rated
issuer, even though they have
provided credit enhancement
of only 20%, according to DCM
bankers.
Under the guidelines, the
tenor of the bonds must
be at least three years, the
proceeds should be used only
for refinancing debt, and
banks should ensure that they
keep within existing exposure
limits. Bankers point to the
infrastructure sector, which has
had similar guidelines in place
since September 2015 without
any issues forthcoming.
Public and private sector
banks have been looking
closely at NBFC assets. Last
month, State Bank of India said
it would raise its target to buy
“good quality” asset portfolios
from NBFCs this year to
Rs450bn from Rs150bn.
“There are some
opportunities to buy the debt
of smaller NBFCs because they
will not be able to raise new
bonds given their lower ratings
and will get into stress,” said a
source from a foreign bank.
Some NBFCs are also looking
at public bond issues to ease
the liquidity strain.
“AA rated NBFCs like IIFL
Holdings, Magma Fincorp,
Shriram City Union Finance
and ECL Finance are actively
exploring to raise funds
through public issue of bonds,”
said Manglunia.
Manappuram Finance and
JM Financial Credit Solutions
are in the market to raise up
to Rs22.5bn from public bond
issues. 
Nissan spreads widen
after Ghosn arrest
„„Bonds CEO’s shock removal raises governance concerns
By TAKAHIRO OKAMOTO However, the magnitude
of the widening has been
NISSAN MOTOR’s yen bonds contained so far, as the CDS is
fell and credit default swaps still well below the five-year
widened last Tuesday in iTraxx CDS index for Japan,
the wake of Carlos Ghosn’s which had hovered around
arrest in Japan for alleged 64bp in recent sessions.
improprieties that led to his “I don’t know for sure how
ouster as CEO and chairman much this [Ghosn’s arrest] will
later in the week. affect Nissan’s fundamentals,
Nissan Motor’s 0.22% March but apparently the market
2023 bonds (Series 60) sold doesn’t think it will,” said
off to 0.250% on Tuesday from a CDS trader at a foreign
0.178% on Monday, while the securities firm. “In order for the
“I don’t know for sure how much this [Ghosn’s
arrest] will affect Nissan’s fundamentals, but
apparently the market doesn’t think it will. In
order for the Nissan CDS to widen further from
here, actual selling in cash bonds is needed.”

yield on its 0.33% March 2026 Nissan CDS to widen further

vehicle MRCB Southern Link.
MRCB Southern Link raised
M$1.044bn in 2008, comprising
M$845m of senior sukuk and
M$199m in junior sukuk, as
project bonds to fund the
construction of the toll road.
STOP-START NEGOTIATIONS
Since commercial operations
began in 2012, the project has
seen its fair share of challenges.
Four months after starting toll
collections, the government
banned MRCB from imposing
tolls. The government offered
to acquire the toll road but
after several months without
progress, it decided instead to
pay monthly compensation of
M$11m to offset the operator’s
losses.
The lack of revenues during
the intervening period weighed
on the project, although MRCB
Southern Link relied heavily
on parent MRCB to meet debt
obligations over the past years.
Toll collection was reinstated
in August 2014 before another
ban was imposed from January
1 this year.
Creditors were growing more
concerned about a potential
default given the company’s
dwindling cash reserves, as
some M$74.6m of financial
obligations were coming due
from December 21 to 24.
Earlier this year, amid talks
with the Ministry of Works for
the concession termination,
MRCB Southern Link asked
bondholders to approve an
“indulgence” period to end-
August to give it time to
negotiate.
It returned to the investors
again just before the August
deadline to extend the
indulgence period to December
20. Creditors also agreed to
waive an event of default while
negotiations were under way.
Under the settlement
agreement, MRCB has to
provide a performance bond
tied to outstanding works to
be done for the highway. The
cash settlement will then be
paid within 14 days of the
performance bond. 
bonds rose to 0.465% from
0.351%, according to Refinitiv
data.
Bonds from subsidiary
NISSAN FINANCIAL SERVICES widened
a bit more, with its 0.20%
December 2023 (Series 51)
notes off to 0.338% from
0.18%.
RENAULT was hit harder with
its 0.49% July 2023 Samurai
bonds (Series 22) widening to
0.949% from 0.531% – a huge
swing in Japan’s low-yielding
bond market.
Ghosn is still chairman and
CEO of Renault, as well as
chairman of Mitsubishi Motors,
another auto manufacturer
with which Nissan has an
alliance, although there are
calls for his removal.
Nissan Motor’s credit default
swaps also surged, with five-
year default protection pushing
out from 33bp to 60bp at one
stage on Tuesday before easing
to 55bp on Wednesday. Single-
name CDS are not available
on Nissan Financial or on
Mitsubishi Motors.
from here, actual selling in cash
bonds is needed.” Heavy selling
in Nissan’s bonds would force
dealers to buy CDS for hedging
purposes.
Investors seem to be still
wondering whether they
should sell now and realise
losses, or hold on to Nissan’s
bonds in the hope they can
stay in the black. As many of
the bonds issued by Nissan
Motor, Nissan FS and Renault
are short-dated, investors
are not expecting defaults
that would seriously damage
their portfolios. Some had
already unloaded the bonds
due to worries about tariffs on
overseas automakers in the US.
Investors are keeping a close
eye on incoming news about
Nissan.
“I prefer all bad news to
come at once,” said a Japanese
asset manager. “It’s better than
bad news coming out one after
another some time later.”
On Tuesday, S&P placed
Nissan’s A/A-1 ratings on credit
watch negative. 

International Financing Review Asia November 24 2018 11

 People
& Markets
TOP STORY LOANS
Policy shift gets cool response
Chinese private-sector borrowers still face challenges overseas
Government measures to help China’s
private sector access cheaper onshore
funding will have little impact on the
availability of overseas finance, according to
loan market specialists.
Beijing announced a slew of new measures
in October and November to boost liquidity
for privately owned enterprises (POEs),
including easier bond and IPO issuance and
lower lending rates.
The moves are designed to support China’s
economy and offset the effects of a trade war
with the United States. However, bankers
working on offshore loans for POEs still see
the sector as tarnished.
“Our house view won’t change simply
because of such short-term policy,” a senior
banker at a global lender in Hong Kong
said.
“Our credit risk department might ask:
why is the Chinese government doing this
now? Is something really going wrong?”
POEs have suffered disproportionately
from the government’s campaign to
deleverage the financial system. At least 10
ailing private groups have been nationalised
this year as China’s shadow banking sector
also retreated.
President Xi Jinping held a roundtable
with private entrepreneurs on November 2
in which he outlined plans to support the
private economy and help POEs resolve their
difficulties.
Xi rolled out six guidelines including
tax cuts and easier financing, which were
followed by detailed implementation plans
from various ministries, including the central
Who’s moving where...
„„NOMURA has hired has also worked at
Jwalant Nanavati as Deutsche Bank and
head of technology, Lehman Brothers.
media and He reports to Kenji
telecommunications Teshima, head of
for Asia ex-Japan. investment banking
Nanavati joined last for Asia ex-Japan, in
Monday in the bank’s his new role.
Hong Kong office.
He was previously
co-head of TMT
investment banking
for Asia Pacific at
BNP Paribas and
12 International Financing Review Asia November 24 2018
bank and the securities regulator.
Bankers, however, see government support
as insufficient to change their lending
criteria until the companies improve their
financial performance, lift investment yields
and improve corporate governance and
transparency.
The rising tide of defaults in the last two
years has made debut offshore loans more
difficult. Bankers still have fresh memories
of China Huishan Dairy Holdings, once the
country’s largest integrated dairy farm,
failing to repay loans and the inability of
China Hongqiao Group, the world’s largest
aluminium producer, to publish its financial
results on time last year.
S&P credit analysts Cindy Huang and
Chang Li said in a November 19 report the
latest measures would ease the risk of default.
“The short-term default risks for major
POEs will reduce as policy signals should
improve market confidence and investor
sentiment,” the analysts said. “Lenders will
likely be more inclined to refinance maturing
loans and private credit lines.”
COORDINATED EFFORT
China’s central bank said on October 22
that it would make another Rmb150bn
(US$21.6bn) of relending and rediscount loans
available for banks to funnel to POEs, taking
this year’s total to Rmb300bn.
The People’s Bank of China will also help
more POEs to issue bonds by providing
initial capital to encourage the use of credit
mitigation and enhancement tools.
The China Banking and Insurance
„„Boutique from Credit Suisse,
investment bank where he led general
MOELIS AUSTRALIA has industrials investment
hired Andrew Wilson as banking for Australia.
managing director in He worked on a
the firm’s Melbourne number of notable
office. transactions including
Wilson, who is due Pact Group’s A$650m
to start in the New (US$470.1m) IPO
Year, will help lead and Advent Partners’
the firm’s general sale of Integrated
industrials coverage Packaging Group.
in Australia and New
Zealand. He joins
Regulatory Commission is also proposing
to instruct major Chinese banks to target
at least a third of new corporate lending
towards POEs.
Chinese and international banks have
traditionally preferred to lend to state-owned
enterprises, which have varying levels of
sovereign support and are better funded.
Chinese SOEs have raised US$9.7bn
in the offshore loan market so far this
year, while POEs have raised US$6.4bn,
according to LPC data.
Despite the government’s show of support,
bankers have limited appetite for loans in
the private sector. Eight of the POEs that
tapped the offshore market since May are still
struggling to close their syndicated deals.
Arranging banks are also finding it hard
to bring any new POEs to the offshore loan
market, and many of the companies are
currently focussing on paying down dollar
debt.
Internet giant Tencent Holdings played
it safe when it raised its first offshore loan
in 2014, testing the market with a small
US$200m five-year facility that attracted five
banks in total.
Two years later in the second half of 2016,
the company was able to raise US$3.5bn to
back its acquisition of a majority stake in
Finnish mobile game developer Supercell in
less than three months.
“POEs need to gradually and carefully build
up their track record for many years before
they can have a strong net of relationship
banks,” a second banker in Hong Kong said.
YAN JIANG
„„CIMB GROUP has oversight of the
hired Omar Siddiq as group’s finance,
chief operating officer technology and
weeks after he quit operations divisions
rival RHB Bank after in his new role,
less than six months Malaysia’s number
as head of wholesale two lender said in
banking. a statement last
Siddiq, who spent Monday.
10 years with CIMB He is due to start on
earlier in his career November 26.
as managing director
for corporate client
solutions, will have
 Please send job moves to
peoplemarkets@thomsonreuters.com

IPIC files suit Khadem Abdulla al-Qubaisi, former IPIC

managing director and Aabar chairman,
assume responsibility for future principal
and interest payments on 1MDB bonds

against Goldman and Mohamed Ahmed Badawy al-Husseiny,

former Aabar chief executive, to further
which IPIC had guaranteed.
Last Tuesday, Malaysia sought to set aside

over 1MDB the business of Goldman and 1MDB at the

Abu Dhabi’s INTERNATIONAL PETROLEUM
INVESTMENT CO said last Wednesday it had
filed a lawsuit against US investment bank
Goldman Sachs and others to recover
losses suffered through its dealings with
Malaysian state fund 1MDB.
Government-owned IPIC said in a
statement it filed a civil legal action in
New York against Goldman and others,
alleging they “played a central role in
a long-running effort to corrupt former
executives of IPIC and its subsidiary
Aabar Investments, and mislead IPIC and
Aabar”.
The suit alleges Goldman conspired with
unidentified people from Malaysia to bribe
expense of IPIC and Aabar.
“We are in the process of assessing the
details of the allegations and fully expect to
contest the claim vigorously,” a Goldman
spokesman said.
Malaysian government officials could not
immediately be reached for comment.
IPIC also said in its statement that it
had filed a criminal complaint in the
United Arab Emirates against Qubaisi and
Husseiny for allegedly accepting bribes
and abusing their authority. The current
whereabouts of the two men are not
publicly known and they could not be
contacted.
Last year, 1MDB and the Malaysian
government agreed to pay US$1.2bn to
IPIC under a London arbitration award and
that award, IPIC said. It said it would fight
that action and take steps to reaffirm the
validity of the settlement.
An estimated US$4.5bn was
misappropriated from 1MDB by high-level
officials of the fund and their associates
between 2009 and 2014, the US Justice
Department has alleged.
Three weeks ago, US prosecutors
unveiled criminal charges against two
former Goldman bankers and Malaysian
financier Low Taek Jho related to the 1MDB
case.
Meanwhile, the Malaysian government
has said it wants to reclaim from Goldman
fees which the US bank received for
helping 1MDB raise money as well as losses
suffered due to the deals.
STANLEY CARVALHO

Regulator to end monitor installed in the bank to check on

progress in improving controls in 2014 and
settlement.
The end of the monitorship announced

monitoring of again in April 2016.

That last extension was set to expire
last Wednesday has no bearing on that
investigation, StanChart said in a regulatory

StanChart on December 31 this year, but the news

New York’s Department of Financial
Services will end a period of monitoring of
STANDARD CHARTERED on December 31, the DFS
said last Wednesday, bringing to a close
one strand of the bank’s punishment for
past failings in compliance controls.
StandChart agreed to the supervision
with the regulator in 2012 as part of a wider
settlement with US authorities in relation
to the bank’s dealings with Iran-related
entities. The bank agreed an extension
to that deal, which saw an independent
that there are to be no further extensions
to the monitorship will be welcomed by
StanChart bosses as they seek to convince
US authorities they have learned from past
mistakes.
The bank’s problems over failing in the
past to prevent customers from breaching
Iran-related sanctions are not over.
StanChart faces a separate investigation
by US authorities into the extent to which
it allowed clients with Iranian interests to
conduct transactions after 2007, as well as
the extent to which it shared such dealings
with authorities at the time of the 2012
filing.
Media reports in October said the bank
could face a further US$1.5bn fine for those
violations, in addition to the US$667m
it paid in 2012 to settle alleged breaches
between 2001 and 2007.
The reports said the fine amount was a
preliminary assessment based on some of
the communications between the bank and
regulators.
StanChart CEO Bill Winters in an
internal email to staff in October criticised
media coverage of the bank’s efforts to
improve its controls.
LAWRENCE WHITE

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

„„Damien Ng, an to Dan Robbins, „„CREDIT SUISSE has as a research analyst „„CIMB GROUP has Shahnaz Jammal,
executive director who heads up the hired Quinn Pierson at JP Morgan and hired Victor Lee from group chief financial
in AUSTRALIA & NEW business. to lead small caps has also worked Fullerton Financial officer, had been
ZEALAND BANKING Ng, who has been research in Australia. at Deloitte and US Holdings to head its appointed CEO of
GROUP’s leveraged with the bank in Quinn, who is due boutique investment commercial banking wholesale banking,
and acquisition Singapore for more to start in January, bank Chardan Capital and transaction while Khairulanwar
finance team, is than five years, joins from Macquarie Markets. banking businesses. Rifaie, CFO of CIMB’s
relocating to Sydney has been covering Group, where he was Lee is due to start on Malaysian and Islamic
in early February. leveraged and part of the consumer January 17 and is one banking subsidiaries,
Ng will cover both acquisition finance team and lead of several changes to will replace Jammal
Australian and mainly for the South analyst on small, senior management in his current role.
inbound Asia-based and South-East Asian mid and large cap announced by the Both appointments
borrower acquisition markets for over two consumer names. Malaysian lender last are effective January
activity. He will report years. He previously worked Monday. 1.

International Financing Review Asia November 24 2018 13

 People
& Markets
IN BRIEF
Noble Group
Cooperation with Singapore authorities
NOBLE GROUP said it intended to cooperate fully
with Singapore authorities, which last Tuesday
announced an investigation of the commodities
trader, but said it planned to proceed with its
restructuring process.
The Commercial Affairs Department of the
Singapore Police Force, the Monetary Authority
of Singapore and the Accounting and Corporate
Regulatory Authority are jointly investigating
suspected false and misleading statements and
breaches of disclosure requirements by Noble
and potential non-compliance with accounting
standards by its wholly owned subsidiary Noble
Resources International.
ACRA said this followed an extensive review of
NRI’s financial statements for the years ended
December 31 2012 to December 31 2016 and would
require directors of the company to submit further
information.
CAD and MAS have asked Noble and NRI to
produce documents related to the preparation
of Noble’s financial statements. The authorities
said they had reviewed information including that
submitted by the Singapore Exchange Regulation
and other third parties.
Iceberg Research, founded by ex-Noble employee
Arnaud Vagner, first raised questions about the
company’s accounting treatment in 2015. Vagner
claims to have spoken to Singapore Exchange’s
regulatory team at the time.
Noble said it would not delay work towards
implementing its restructuring plan and planned
to stick to its previous schedule. The restructuring
is expected to become effective on Monday.
Singapore Exchange
Guidance on initial coin offerings
SINGAPORE EXCHANGE has for the first time
14 International Financing Review Asia November 24 2018
provided guidance for companies seeking to
raise funds through initial coin offerings.
Tan Boon Gin, chief executive of the Singapore
Exchange Regulation, the regulatory arm of the
Singaporean bourse, said in an article last Tuesday
in The Edge newspaper that listed companies
seeking to raise digital tokens or coins would need
to consult SGX RegCo beforehand and adhere to
certain disclosure requirements.
He said that SGX RegCo would require the listed
issuer to provide legal opinion on the nature of the
digital tokens as well as its auditor’s opinion on the
ICO’s accounting treatment.
Tan also said that the regulatory body would
require the issuer to disclose the rationale for the
ICO and the risks involved, the accounting and
valuation treatment of the ICO and the impact on
shareholders’ rights among other things.
His intervention comes after Y Ventures, an
e-commerce company listed on Singapore’s
Catalist board, announced it was looking to raise
US$50m through an ICO.
Shanghai/Shenzhen stock exchanges
New rules on stock suspensions
The SHANGHAI STOCK EXCHANGE and the SHENZHEN
STOCK EXCHANGES have issued proposed revisions
to regulations governing trading suspensions of
listed companies, part of a wider push to clean up
practices in the corporate sector.
The exchanges will allow listed companies that are
planning on asset restructuring via share issues to
suspend trading in their shares for up to 10 trading
days, they said in separate statements.
Previously, there were no time limits on this
activity.
Both exchanges will solicit opinions on the
revisions until December 21.
The exchanges have both recently issued
regulations aimed at improving corporate
governance. Earlier in November, they published
rules on delisting companies involved in fraud or
that have violated rules on information disclosure.
Mitsubishi UFJ Financial Group
Money-laundering investigation
US prosecutors are investigating the systems
that Japan’s biggest bank, MITSUBISHI UFJ FINANCIAL
GROUP, uses to track money laundering, the New
York Times reported last Wednesday.
The bank was subpoenaed by federal prosecutors
in Manhattan late last year as it was locked in
a court fight with the New York Department of
Financial Services, according to the report, citing
two people who were briefed on the investigation.
The litigation is a part of the department’s
attempts to punish MUFG for breaking anti-
money-laundering rules, the newspaper reported.
The subpoena was issued after the State of
New York said in a court filing that the bank had
intentionally ignored an internal filter designed to
keep it from doing business with companies and
people on international sanctions lists, it reported.
Sri Lanka
Moody's downgrades sovereign
Moody’s downgraded the GOVERNMENT OF SRI LANKA
last Tuesday for the first time since it started rating
the country in 2010, blaming a political crisis for
aggravating already problematic finances.
Moody’s cut Sri Lanka to B2 from B1 and, though
there is likely to be relief in Colombo that it put
a ‘stable’ outlook on the new rating, the credit
agency underscored ongoing risks.
A bitter row over President Maithripala Sirisena’s
sacking of Prime Minister Ranil Wickremesinghe
and the competing influences of China and India
have shattered the island’s fragile ruling coalition.
“The government’s debt refinancing will remain
highly vulnerable to sudden shifts in investor
sentiment in a period of further tightening in
financing conditions and political and policy
uncertainty,” Moody’s said.

New Zealand 30 Philippines 31 Singapore 32 South Korea 33 Taiwan 34 Thailand 35 Vietnam 35
AUSTRALIA
DEBT CAPITAL MARKETS
››ANZ OPTS FOR SAFETY COVER
AUSTRALIA AND NEW ZEALAND BANKING GROUPtook
the defensive option in printing a €1.25bn
(US$1.42bn) four-year covered bond on
Thursday, after having mulled a senior deal.
Facing tricky market conditions, covered
bonds have in recent weeks been the
preferred route for many issuers rounding
off their 2018 funding plans or sealing pre-
funding for 2019.
ANZ held a European roadshow earlier
this month, marketing a potential senior
and/or covered transaction. Its decision to
go for a standalone covered with a rare and
defensive four-year maturity exemplifies
the approach issuers should take in the
Civmec broadens unrated market
„„Bonds Aussie engineering firm becomes seventh unrated wholesale issuer
CIVMEC HOLDINGS, a wholly owned subsidiary
of engineering construction group Civmec,
became the seventh unrated Australian
company to access the domestic wholesale
bond market with last Thursday’s A$60m
(US$44m) four-year fixed-rate senior secured
MTN issue via sole lead NAB.
The 7.0% November 30 2022s priced at
par, at the tight end of 7.0%–7.25% yield
guidance but 50bp above the A$45m 6.5%
senior secured MTN issued by property funds
manager Centuria Capital Group as part
of a A$80m dual-tranche 4.5-year sale on
October 9.
Civmec’s coupon is also 100bp more than
the A$100m 6.0% four-year MTN printed
by data-centre provider NEXTDC in July
alongside a A$200m four-year floating-rate
note, collectively called Notes IV.
The last trades from Centuria and NEXTDC
both benefited from established track records
in the unrated market.
In April 2017 Centuria raised A$100m from
a two-part four-year sale including a A$60m
7.0% MTN while NEXTDC had visited the
market three times previously, in June 2014,
November 2015 and May 2017.
COUNTRY REPORT
Australia 15 China 18 Hong Kong 24 India 27 Indonesia 28 Japan 29 Malaysia 30
coming weeks, said bankers.
“This is about as defensive an option as
they could have done after that roadshow,”
said a syndicate banker away from the
bookrunners.
Leads ANZ, Commerzbank, HSBC and Societe
Generale opened books with guidance in the
mid-swaps plus 15bp area. This was revised to
the 13bp area (+/-1bp) on books over €1.25bn.
The spread was then fixed mid-range
at 13bp and the size at €1.25bn, with
books closing in excess of €1.5bn, pre-
reconciliation.
The final spread incorporates a new
issue premium of around 6bp over ANZ’s
interpolated mid-curve.
The banker away said the final spread is
equivalent to a US dollar spread of 32bp,
which he noted is only 1bp more than DBS
paid for a shorter US$1.25bn three-year
covered bond on Monday.
“That demonstrates that the euro market is
the most cost-effective covered bond market,
even for international issuers,” he said.
Civmec did price 25bp inside payments
company Afterpay Touch Group which issued
a A$50m 7.25% four-year senior unsecured
note in April this year while QMS Media
debuted with a A$70m 7.0% five-year MTN in
November 2017.
The other two unrated wholesale issuers
are online job search provider SEEK which in
April 2017 sold a A$175m five-year floating-
rate notes and Capital Health which raised
A$50m from a four-year MTN a year earlier.
Unrated bonds remain rare in Australia’s
famously conservative wholesale bond
market, which is dominated by investment
grade-focused fund managers, but recent
deals show that local appetite for higher-
yielding assets is growing.
Unrated issuers save on the fees, time
and other costs involved in establishing
and maintaining a credit rating though they
obviously pay a premium to make up for the
absence of ratings.
Other unrated issuers, infrastructure
company Qube Holdings, home-care provider
Australian Unity and real-estate developers
Peet and Villa World, opted for the retail
market and its modest A$5,000 minimum
International Financing Review Asia November 24 2018 15
The deal is only the sixth euro
benchmark covered bond with a tenor
of four years or shorter this year and is
ANZ’s first euro benchmark covered since
November 2016.
››BEN BANK TIER 2 NETS A$275M
BENDIGO AND ADELAIDE BANK (A3/BBB+/A–)
priced a A$275m (US$200m) 10-year non-
call five Tier 2 floating-rate note inside
250bp area guidance at three-month BBSW
plus 245bp.
ANZ, NAB, Nomura and Westpac were
joint bookrunners area for last Thursday’s
subordinated note issue which has expected
ratings of Baa3/BBB–/BBB+.
The margin was 30bp tighter than the
275bp BBSW spread paid by troubled
Australian financial group AMP on
November 7.
AMP’s A$250m 10-year non-call five note,
which is rated two notches higher by S&P
at BBB+, was forced to pay a hefty premium
entry level to issue bonds between A$50m
and A$300m in recent years.
The A$500,000 minimum ticket size
requirement in the wholesale market
excludes all but the wealthiest of Australian
individuals, but it does offer lower all-in
funding costs than the retail/listed market,
even under the Simple Prospectus regime,
due to the latter’s marketing, broker fees,
legal and other costs.
Civmec is an ASX-listed multi-disciplinary
heavy engineering and construction services
company in the oil and gas, metals and
minerals, infrastructure and defence sectors.
“Accessing the wholesale Australian
debt markets will provide additional tenor
to the company’s debt maturity profile,
diversify Civmec’s current debt funding
sources and provide greater operating
flexibility to fund future growth,” said
Civmec CEO Pat Tallon.
The proceeds will be used to refinance
debt and fund investment in shipbuilding and
maintenance facilities under construction at
Civmec’s Henderson headquarters in Western
Australia.
JOHN WEAVERS
 Telecom merger leads to A$5bn refi
„„Loans Vodafone Hutch self-arranging loan after proposed merger with TPG Telecom
VODAFONE HUTCHISON AUSTRALIA – a joint venture
between the UK’s Vodafone Group and
Australia-listed Hutchison Telecommunications
(Australia) – is self-arranging a A$4.75bn–
$5bn (US$3.4bn–$3.6bn) loan.
The deal comprises a A$2bn three-year
term loan (facility A), a A$2bn five-year loan
(facility B) and a A$750m–$1bn five-year
revolving credit facility (facility C), which all
have a bullet repayment.
The borrower will be renamed TPG TELECOM
after the merger of Vodafone Hutchison
Australia and Australia-listed TPG Telecom is
completed.
The merger of equals is expected to
close next year, after which current TPG
shareholders will together own 49.9% of the
merged group, while Vodafone Group and
Hutchison Telecommunications Australia will
each hold 25.05%.
The operating companies – the current
operations of TPG Telecom, Vodafone
Hutchison Australia and their subsidiaries –
will provide guarantees.
The interest margins on the up to A$5bn
deal are tied to the borrower’s net debt-to-
Ebitda ratio.
Facility A pays margins of 90bp, 100bp,
110bp, 125bp and 155bp over BBSY for
respective ratios of 1.5x or less, 1.5x–2x, more
than 2x to 2.5x, more than 2.5x to less than
3x and 3x or more.
The margins for facilities B and C are
to reflect its prominent role in Australia’s
financial scandals.
Suncorp Group priced a A$600m 10.25-
year non-call 5.25-year Tier 2 note, rated
BBB+/A– (S&P/Fitch), on August 29 at three-
month BBSW plus 215bp.
The Tier 2 market is likely to be flooded
by a glut of major bank issuance in coming
years with Australia’s Big Four lenders
potentially needing to raise up to A$83bn of
new Tier 2 capital after regulators proposed
an increase in total capital requirements.
In a recent discussion paper, the
Australian Prudential Regulation Authority
called for the majors to hold Tier 2 capital
equal to 6%–7% of their risk-weighted
assets, around triple the 2% target in its
current framework.
››WESTPAC SETS AT1 MARGIN
WESTPAC has set the margin at the tight end
of three-month BBSW plus 370bp–390bp
16 International Financing Review Asia November 24 2018
110bp, 120bp, 130bp, 145bp and 175bp over
BBSY for the respective ratios.
As the initial net debt-to-Ebitda ratio will
be more than 2x to 2.5x, the initial margins
will be 110bp and 130bp over BBSY for the
three and five-year portions.
Banks have been invited to join with
commitments of A$500m or more for
upfront fees of 45bp for facility A and 75bp
for facilities B and C, and with tickets of
A$250m–$499m for fees of 30bp and 50bp.
At the top level, the all-ins based on the
initial margins are 125bp for three years and
145bp for five.
The entire deal pays a ticking fee on
unused commitments of 20% of the
applicable margins.
Funds are for refinancing, acquisition and
capital expenditure purposes.
CK Hutchison Holdings owned about 88%
of Hutchison Telecommunications Australia
at the end of 2017.
In September 2016, Vodafone Hutchison
Australia raised a A$1.7bn three-year
refinancing from 19 banks. That deal had
two tranches – one guaranteed by Vodafone
Group and the other guaranteed by
Hutchison Whampoa. The loan paid an all-in
of 120bp calculated on a margin of 110bp
over BBSY.
According to Hutchison
Telecommunications Australia’s August 30
ASX announcement on the merger, about
guidance for an enlarged A$1.25bn retail
offer of Additional Tier 1 notes, Westpac
Capital Notes 6.
The offer for the perpetual non-call 5.5-
year (July 31 2024) notes, rated BB+ (S&P),
opened last week and is expected to close
on December 11.
ANZ, CBA, JP Morgan, Morgans, NAB, UBS
and Westpac Institutional Bank are joint lead
managers.
Fellow major bank Commonwealth Bank
of Australia is also in the market with a
retail-targeted AT1 offer.
CBA allocated A$1.25bn after the
bookbuild for its CommBank Perls XI
Capital Notes issue, which includes an
exchange offer for eligible holders of the
A$2bn Perls VI notes that are due to be
called on December 17.
The Perls XI offer closes on December 5.
The margin for the perpetual non-call 5.36-
year (April 26 2024) note, rated BB+ (S&P),
is also three-month BBSW plus 370bp.
A$4.8bn-equivalent of Vodafone Hutchison
Australia debt will not remain in the
merged group and will be held by an entity
owned by Vodafone Group and Hutchison
Telecommunications Australia and continue
to be guaranteed by Vodafone Group and CK
Hutchison.
In November 2017, 23 lenders provided
a US$3.5bn three-year refinancing for
Vodafone Hutchison Australia. Vodafone
guaranteed a US$1.75bn tranche, while
Hutchison guaranteed the other US$1.75bn
portion.
Regulatory approvals, including those from
the Australian Competition and Consumer
Commission, the Foreign Investment Review
Board, TPG Telecom’s shareholders and
court approvals are required for the merger.
The provisional date for announcing the
ACCC’s decision is December 13.
Vodafone Hutchison Australia has almost
6m mobile subscribers, while TPG Telecom
has more than 1.9m customers for its fixed-
line residential telecom services and also has
corporate, government and wholesale clients.
Vodafone Hutchison Australia and TPG
Telecom together own and operate more
than 27,000km of fibre optic networks, a
mobile network with more than 5,000 sites,
and spectrum assets. The merged entity
is expected to have a pro forma enterprise
value of about A$15bn.
APPLE LAM
››SHORT-TERM FLOATERS IN FOCUS
Three Australian financials issued defensive
short-dated floating-rate notes last week to
raise a combined A$700m.
On Monday, HSBC BANK AUSTRALIA, rated A1/
A+ (Moody’s/S&P), priced a self-led A$100m
1.25-year (February 24 2020) FRN at three-
month BBSW plus 55bp.
Two days later CREDIT UNION AUSTRALIA, rated
Baa1/BBB (Moody’s/S&P), issued a A$100m
one-year floater via sole lead manager NAB
in line with guidance at three-month BBSW
plus 75bp.
Pricing compares with the 70bp
margin paid on October 17 by Newcastle
Permanent Building Society, rated
A3/BBB (Moody/S&P), for a A$50m one-
year FRN.
On Friday the ROYAL BANK OF CANADA,
acting through its Sydney branch, rated
Aa2/AA– (Moody’s/S&P), raised A$500m
from a self-led one-year floating-rate

note that priced at three-month BBSW
plus 50bp.
In August 2017, RBC Sydney branch sold
a A$600m one-year floater at 32bp over
three-month BBSW and paid a margin of
48bp for another A$600m one-year FRN a
year earlier.
STRUCTURED FINANCE
››PEPPER SETS AUSSIE GUIDANCE
Non-bank lender Pepper Group has released
initial guidance for three Australian dollar
tranches within its multi-currency PEPPER
PRS 22 RMBS issue.
For the Class A1a notes with a 2.6-year
weighted-average life price talk is one-
month BBSW plus 140bp–145bp area.
For the A$111m Class A2 and A$52.5m
Class B notes, both with 4.0-year WALs,
guidance is one-month BBSW plus
210bp–220bp area and 235bp–245bp area,
respectively.
Citigroup, CBA, NAB, Natixis, Standard
Chartered and Westpac arranged recent
investor meetings in Australia and
Europe for the non-conforming RMBS
that is also expected to include euro and
US dollar tranches in both 144A and Reg
S formats.
A euro tranche and possibly an
Australian dollar companion will be
exclusively backed by green mortgages.
On October 4, Pepper issued the
A$600m (US$438m) no-grow dual-
currency Pepper I-Prime 2018-2 Trust
that included a US$253m Class A1u1
note.
››METRO MARKETS A$300M AUTO ABS
METRO FINANCEhas released initial price talk
for a A$300m auto and equipment-backed
ABS issue, METRO 2018-2, via lead manager
NAB.
For the A$150m Class AS notes with a
0.9-year WAL price talk is one-month BBSW
plus 90bp area.
For the A$87m Class AL, A$26.7m Class
B, A$10.2m Class C, A$6.6m Class D, A$9m
Class E and A$3.3m Class F notes, all with
2.8-year WALs, guidance is one-month
BBSW plus 130bp area low 200bp area,
250bp–265bp, 300bp area, 550bp area and
high 600s area.
Metro Finance sold an inaugural A$288m
six-tranche prime commercial auto and
equipment ABS offering in June this year,
Metro Finance 2018-1 Trust, which was
a hybrid between private placement and
public term deals.
Metro Finance was established in 2011
as a commercial auto/equipment lender.
It targets prime borrowers for small-ticket
auto and equipment assets in low volatility
industries.
››BLUESTONE SETS RMBS GUIDANCE
Specialist residential mortgage lender
Bluestone Group has released guidance for
the senior A1b and A2 notes of its nine-
tranche A$350m non-conforming RMBS
offering, SAPPHIRE XX SERIES 2018-3 TRUST.
Price talk for the A$122.5m Class A1b
and A$106.4m Class A2 notes, both with 2.7
WALs, is one-month BBSW plus 140bp and
205bp.
The Class A1a, B, C, D, E and F notes have
been pre-placed as have 85% of the Class A2
notes.
Macquarie is arranger and joint lead
manager with CBA.
This will be Bluestone’s third non-
conforming RMBS of the year following
February’s A$250m Sapphire XVIII 2018-1
sale and the A$300m Sapphire XIX 2018-2
issued in late August.
››LA TROBE HIRES HSBC
LA TROBE FINANCIALhas mandated HSBC to
arrange a forthcoming Australian dollar
RMBS warehouse note of up to A$350m
with an initial revolving period of up to
three years.
EQUITY CAPITAL MARKETS
››GPA COMPLETES INSTO RIGHTS ISSUE
GROWTHPOINT PROPERTIES AUSTRALIA has
completed the institutional portion of
a A$135m (US$98.8m) 1-for-17.65 rights
issue.
The REIT’s institutional offer raised
about A$117m and was priced at A$3.46 per
unit, representing a 4.2% discount to the
company’s last close of A$3.61.
About 33.8m securities were issued
under the institutional offer, which was
well supported by existing institutional
security holders and the shortfall has been
fully taken up by both existing and new
institutional buyers.
South African parent company
Growthpoint Properties committed to take
up its full entitlement of about A$89m.
The retail offer will be open from
November 26 to December 5 and is
expected to raise up to A$18m.
The offering is to fund part of GPA’s
acquisition of the Bank of Queensland
headquarters building in Brisbane for
A$250m.
Goldman Sachs is lead manager and
bookrunner.
International Financing Review Asia November 24 2018 17
COUNTRY REPORT AUSTRALIA
››HEATHLEY HEALTHCARE REIT DELAYS IPO
HEATHLEY HEALTHCARE REIT has deferred a
proposed ASX listing of A$225m, a person
close to the deal said.
The REIT, which owns 42 healthcare
assets in Australia, had planned to open
books on November 21 and file the
prospectus the day after.
The listing was set to give the company a
A$373m market capitalisation based on its
indicative price of A$2 a share.
ASX-listed property trust Dexus had
committed to a cornerstone investment
giving it at least a 10% stake in the REIT.
Dexus separately took a 28.5% stake in
Heathley Asset Management, the manager
of Healthley Healthcare REIT.
IPOs have been pulled, postponed or
scaled back in the Asia-Pacific region
following stock market declines. The
benchmark ASX 200 index is down 9.38% in
the quarter to date.
Property Exchange Australia (PEXA)
pulled its ASX IPO of up to A$862m last
month and accepted an offer from a
consortium led by two of its shareholders
to buy the company for A$1.6bn.
Coronado Global Resources slashed its
ASX IPO size by 33% to A$774m. Despite
pricing a smaller deal at the bottom of the
indicative price range, its shares fell 10% on
their trading debut and were down 17.5%
last thursday against its IPO price.
JP Morgan and UBS led the Heathley
Healthcare REIT float.
››YANCOAL TO LAUNCH HK FLOAT
ASX-listed coal miner YANCOAL AUSTRALIA
plans to start bookbuilding on Monday for
a Hong Kong dual primary listing of about
US$200m, according to people close to the
deal.
Alongside the HK float, there is also a
concurrent Australian offering, said the
people.
IFR reported in October that Yancoal
planned to raise about US$500m–$650m
from its Hong Kong share sale. Falling
markets, however, have prompted the
company to sell fewer shares at a lower
valuation, said the people.
Yancoal’s shares in Australia have fallen
around a third since the company started
pre-marketing its Hong Kong float on
October 2. The stock closed at A$3.06 on
Friday.
Shares of Coronado Global Resources,
a coal miner which started trading on the
ASX last month, are 18% below the IPO
price at A$3.29 each.
BOC International, CMB International and
Morgan Stanley are the joint sponsors for
Yancoal’s Hong Kong listing.

CHINA
DEBT CAPITAL MARKETS
››CARNIVAL GROUP SEEKS TO EXTEND
is
CARNIVAL GROUP INTERNATIONAL HOLDINGS
seeking consent from holders of its
US$180m 8% senior bonds due on March 22
2019 to extend the maturity of the bonds
by two years.
The proposed amendments would extend
the maturity to March 22 2021 and raise the
coupon to 10%. Bondholders who consent to
the changes will receive a payment of US$10
per US$1,000 in principal amount.
The offer ends on December 11. The
company said that, in order to pass, the
measure needs a majority to consent from a
quorum of holders of at least 75% of the bonds.
Carnival, a Chinese operator of tourism,
hospitality and recreation facilities, is
unrated.
››CEFC SHANGHAI WARNS ON BONDS
said it did
CEFC SHANGHAI INTERNATIONAL GROUP
not expect to repay its US$250m 5.95%
bonds when they mature on November 26.
The company said it would discuss
with bondholders the terms of a potential
forbearance agreement and/or the
restructuring of the bonds.
The bonds were issued through Wise
Source International with a guarantee
from CEFC Shanghai International Group,
which on May 21 this year failed to repay a
Rmb2bn onshore bond.
CEFC Shanghai International Group
is a subsidiary of energy conglomerate
China CEFC Energy. Earlier this year
it was reported that Ye Jianming, the
chairman of China CEFC Energy, was
under investigation for suspected economic
crimes.
››CHENGDU COMMS LOOKS OFFSHORE
CHENGDU COMMUNICATIONS INVESTMENT GROUP,
rated BBB+ (stable) by Fitch, has hired three
banks for a proposed offering of US dollar
senior unsecured bonds.
CICC Hong Kong Securities is sole global
coordinator as well as joint bookunner and

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18 International Financing Review Asia November 24 2018


ADBC taps into euro bond market
„ Bonds Debut euro Green bond expands reach to international investors
Policy bank AGRICULTURAL DEVELOPMENT BANK
OF CHINA, rated A1/A+ (Moody’s/S&P), has
made its debut in the euro bond market
with €500m (US$573m) three-year Green
floating-rate notes.
The Reg S bonds were priced at three-
month Euribor plus 48bp, the tight end of
final guidance of 48bp–50bp and well inside
initial 65bp area guidance.
The final pricing did not offer a premium
compared with the euro-denominated bonds
from the other two Chinese policy banks,
according to a banker on the deal.
The Export-Import Bank of China’s
0.625% 2021s were bid at a Z-spread
of 49bp and China Development Bank’s
0.375% 2021s were bid at a Z-spread of
46bp, ahead of the announcement of price
guidance.
Despite the lack of a premium, the
funding was still costly for ADBC. The issue
translates into three-month Libor plus
64bp–65bp after swapping into US dollars,
joint lead manager with CCB International
and ICBC International.
The state-owned group started to meet
investors in Hong Kong, Singapore and
London, on November 21.
The proposed Reg S bonds have an
expected BBB+ rating from Fitch.
The State-owned Assets Supervision
and Administration Commission of
Chengdu in China’s Sichuan province owns
Chengdu Communications Investment,
which is responsible for developing the
municipality’s transport network.
The issuer last tapped the offshore
market with a US$300m 4.75% 10-year bond
in December last year.
› CHONGQING LGFV PLANS DOLLAR BOND
CHONGQING NAN’AN URBAN CONSTRUCTION &
DEVELOPMENT (GROUP), rated BBB/BBB+ (S&P/
Fitch), has hired banks for a proposed
offering of US dollar senior unsecured
bonds.
China Industrial Securities International and
Citigroup are joint global coordinators,
together with Bank of China and Guotai Junan
International as joint bookrunners and joint
lead managers, on the Reg S issue.
The Chinese local government financing
vehicle will meet investors in Hong Kong
and London and hold telephonic calls,
starting Monday.
about 8bp–9bp costlier than its dollar
bonds, according to the banker.
ADBC does not have funding needs in
euros, but, like the US dollar bonds and
Dim Sum bonds it issued in September,
the main purpose is to expand its reach to
international investors, the banker said.
“With onshore yields falling in recent
months, ADBC could raise funds in China’s
onshore market with a much lower funding
cost,” he said.
Given that the other two Chinese policy
banks have not sold bonds in the offshore
market this year, ADBC’s euro bonds did
provide some scarcity value, the banker
said. Other than support from Chinese
banks, the deal attracted some purchases
by European central banks and sovereign
wealth funds.
The deal attracted orders of €1.684bn
and over 58% of the notes were allocated to
European investors, according to a statement
posted on the Chinese lender’s website.
The proposed bonds have expected
ratings of BBB/BBB+ (S&P/Fitch).
The issuer has businesses in primary land
development, infrastructure construction,
property leasing and management, loan
financing, supply chain finance, among
others.
It has three outstanding US dollar bonds
in the market: US$300m 2.875% 2019s,
US$500m 3.625% 2021s and US$200m
4.500% 2026s.
› EVERGRANDE RAISES AN EXTRA US$1BN
Heavily indebted property developer CHINA
EVERGRANDE GROUP has raised US$1bn from
a reopening of the 11.00% 2020 bonds
it priced last month, bringing the total
outstanding size of the line to US$1.565bn.
The additional bonds, sold through a
keepwell structure via the Hong Kong-listed
company’s 63.46%-owned subsidiary HENGDA
REAL ESTATE GROUP, were priced at par in line
with guidance.
“The deal was more a club deal. All the
bonds were sold to family friends and
banks,” a banker on the deal said.
Giving this, and the pricing of the new
bonds above the secondary price, the
additional supply did not put great pressure
on Evergrande’s curve, the banker said.
The original issue was part of a US$1.8bn
triple-tranche offering priced on October
International Financing Review Asia November 24 2018
COUNTRY REPORT CHINA
ADBC’s Green floaters have an expected
A+ rating from S&P.
Proceeds will be used for financing or
refinancing eligible green assets as described
under its Green and Sustainability bond
framework.
Bank of China, Standard Chartered
Bank, Bank of Communications and Credit
Agricole were joint global coordinators.
They were also joint bookrunners and joint
lead managers with BoCom International,
Agricultural Bank of China Hong Kong
branch, ABC International, ICBC (Asia),
HSBC, Mizuho Securities, Commerzbank,
Citigroup and JP Morgan.
Credit Agricole was also the Green
structuring adviser.
The Beijing-based lender in September
printed US$875m-equivalent senior bonds
denominated in US dollars and offshore
renminbi. The US dollar bond issue was its
first in the currency.
CAROL CHAN
30. That deal repriced Evergrande’s and
China’s property sector bonds given
the generous double-digit coupons.
Evergrande’s chairman and executive
director Hui Ka Yan subscribed to US$1bn
of the three-part deal. The other two
tranches were US$645m 13.00% 2022s and
US$590m 13.75% 2023s.
Proceeds from the tap will be primarily
used to refinance offshore debt.
Scenery Journey is the issuer and Tianji
Holding is the parent guarantor. Hengda is
the keepwell and Equity Interest Purchase
Undertaking provider.
Both Evergrande and Hengda are rated
B1/B+/B+. The Reg S notes are rated B2/B/B+.
Hengda, which is slated for a backdoor
listing in Shenzhen, accounts for 95%–100%
of Evergrande’s sales, Ebitda, and total
assets, and more than 85% of total adjusted
debt.
Research firm Lucror Analytics said
although the tap extends Evergrande’s
maturity profile it adds to the maturity
cliff in 2020, given the repurchase options
available to onshore strategic investors
should the backdoor listing of Hengda fail
to materialise.
Lucror again highlighted that a recent
dividend payment of Rmb14.7bn was
“very creditor unfriendly and reflects the
poor corporate governance framework” of
Evergrande.
19
 China Citic Bank International, CEB
International and Haitong International were
joint global coordinators and joint lead
managers on the reopening.
› GREENLAND PRINTS 1.5-YEAR NOTES
GREENLAND HOLDING GROUP, rated Ba1/BB/
BB–, raised US$280m last week from
senior unsecured notes offerings for
debt refinancing and general corporate
purposes.
The Chinese developer priced US$200m
9.125% 1.5-year notes at 99.829 to yield
9.25% last Monday, versus initial guidance
in the low 9% area.
It sold an additional US$80m of bonds
at the same price three days after the first
issue in a reopening, bringing the total
outstanding to US$280m.
Demand was lacklustre when the original
issue was marketed because of the low yield.
“Times China Holdings was marketing
two-year bonds at 11% on the same day
while Greenland was marketing 1.5-year
bonds at low 9% area,” said a banker on the
deal. “Greenland’s state-owned background
should allow it to pay a lower yield, but at
this level the issue didn’t look attractive,”
he said.
Times China Holdings is rated Ba3/B+/BB–.
The banker said investors are now more
concerned about the intrinsic financial
strength of developers than potential
support from shareholders.
The Shanghai State-owned Assets
Supervision and Administration
Commission is the largest shareholder of
Greenland Holding’s Shanghai-listed parent
company Greenland Holdings Corp.
Plentiful supply from Greenland Holding
was also a concern. Including last week’s
two issues, it has visited the offshore
market eight times this year.
Greenland Global Investment is the issuer
and Greenland Holding is the guarantor.
The Reg S notes, to be issued off a
US$5bn MTN programme, have an expected
Ba2 rating from Moody’s.
BOC International, CEB International, Haitong
International, China Citic Bank International,
Founder Securities (Hong Kong) Capital and
Orient Securities (Hong Kong) were joint
bookrunners and joint lead managers on
both the original issue and the tap.
› GUANGSHA PRINTS TWO-YEAR BOND
GUANGSHA HOLDING GROUP has priced US$60m
two-year senior bonds at par to yield 8.50%,
in line with price guidance.
Proceeds from the unrated Reg S issue will
be used to develop onshore projects, refinance
debt and general corporate purposes.
CMB International was sole global
20
coordinator on the transaction.
Guangsha Holding Group has businesses
in construction, real estate, energy, finance,
manufacturing, education, health care,
media, hotels and tourism.
› HUACHEN MISSES COUPON PAYMENT
HUACHEN ENERGY has missed a coupon
payment on its US$500m 6.625% bonds due
2020, as was widely expected. The interest,
amounting to some US$16.5m, was due on
November 18.
In a statement the next day to Singapore
Exchange, Huachen said it has secured the
necessary funding to make the coupon
payment and is planning to honour the
payment before the end of a grace period
on December 18.
Moody’s said the missed coupon is
another sign of the privately owned
power company’s weak liquidity position
following the default of one of its domestic
bank loans earlier this month.
The rating agency said the company’s
ability to make the payment during the
grace period remains uncertain.
Moreover, Huachen also needs to meet a
coupon for a Rmb2bn domestic bond that is
due in early December, Moody’s noted.
Moody’s believes that Huachen will
encounter more challenges in meeting
other debt obligations over the coming
months due to its already weak liquidity
position.
On November 12, Huachen said it had
defaulted on one of its domestic bank loans
with a principal amount of Rmb48m, as
the default by its Shanghai-listed parent
company Wintime Energy in July created
significant stress on Huachen’s liquidity
position.
Moody’s on November 13 cut Huachen’s
corporate family rating to Ca from Caa1
and its senior unsecured rating to Ca from
Caa2. The ratings outlook remains negative.
› HUAIBEI CITY CONSTRUCTION HIRES
HUAIBEI CITY CONSTRUCTION INVESTMENT HOLDING
GROUP has hired Guotai Junan International
as sole global coordinator and joint
bookrunner with Mizuho to arrange investor
meetings in Hong Kong on November 27.
A US dollar three-year credit-enhanced
senior unsecured Reg S bond may follow,
subject to market conditions.
Huishang Bank will provide a letter
of credit. The bonds are expected to be
unrated.
Proceeds will be used to refinance
onshore debt and for general corporate
purposes.
Huaibei City Construction is the
investment and financing vehicle for
International Financing Review Asia November 24 2018
urban development under the State-owned
Assets Supervision and Administration
Commission of Huaibei city in Anhui
province.
› JIANGSU FANG YANG PRINTS
Chinese local government financing vehicle
JIANGSU FANG YANG GROUP on Thursday priced a
US$100m three-year senior unsecured bond
offering at 7.5%.
The deal was announced at final
guidance of 7.5% on Wednesday and books
stayed open the following day.
Haichuan International Investment will
issue the bonds with a guarantee from
Jiangsu Fang Yang. The Reg S bonds are
expected to be rated BB by Fitch, in line
with the guarantor’s rating.
Guotai Junan International and Bank of
China were joint global coordinators and
bookrunners.
BoCom International and SPDB
International have dropped out of
the syndicate since the mandate was
announced in September.
Fang Yang Group is the sole investment
and financing arm of the Lianyungang
municipal government to develop
Lianyungang Xuwei New District, a state-
level economic development zone in
Jiangsu province.
› LIUZHOU DONGCHENG LOOKS OFFSHORE
GUANGXI LIUZHOU DONGCHENG INVESTMENT
DEVELOPMENT GROUP, rated BB/BB (S&P/Fitch),
has hired three banks for a proposed
offering of US dollar senior unsecured
bonds.
Guotai Junan International, CCB International
and DBS Bank are joint global coordinators,
joint bookrunners and joint lead managers
on the Reg S issue.
The Chinese local government
financing vehicle of Liuzhou city in the
Guangxi Zhuang Autonomous Region will
start to meet investors in Hong Kong on
Monday.
The proposed bonds have expected
ratings of BB–/BB (S&P/Fitch).
The issuer is mainly responsible for the
investment, financing and management
of Liudong New District’s infrastructure
development projects. Its businesses
include primary land development, public
service facilities and property leasing.
› LVGEM WINS APPROVAL
has
LVGEM (CHINA) REAL ESTATE INVESTMENT
won approval from holders of 91% of its
US$400m 8.75% August 2020 bonds for an
amendment that will allow it to take on
additional debt.

Holders of the 2020s who agreed to the
changes will receive US$2.50 per US$1,000
in principal amount.
The property developer and investor was
seeking additional flexibility to incur debt
in pursuing new business opportunities and
new sources of capital.
Nomura was consent solicitation agent
and DF King was the information and
tabulation agent.
› SPDB SINGAPORE PRINTS FRN
SHANGHAI PUDONG DEVELOPMENT BANK, SINGAPORE
BRANCH, rated Baa2/BBB (Moody’s/S&P) and
expected to be rated BBB by Fitch, priced
US$300m three-year floating-rate senior
unsecured notes at par with a coupon of
three-month Libor plus 87bp, inside initial
guidance of 110bp area.
The benchmark Reg S bonds are expected
to be rated Baa2 by Moody’s.
Shanghai Pudong Development Bank
Singapore branch, DBS, Agricultural Bank of
China Singapore branch, CCB Singapore, OCBC
and UOB were joint global coordinators.
They were also joint bookrunners with
ICBC Singapore, Haitong International, SPDB
International, Shanghai Pudong Development
Bank Hong Kong branch, Citigroup, Standard
Chartered, Bank of China, HSBC and CIMB.
› TIMES CHINA PRINTS DOLLARS
TIMES CHINA HOLDINGS, rated Ba3/B+/BB–, on
Monday priced a US$300m 10.95% two-year
senior unsecured bond at 99.912 to yield
11%, unchanged from initial price guidance
of 11% area.
The Chinese property developer was
estimated to have paid 50bp–100bp as a
new issue concession.
Final orders were around US$700m from
68 accounts. Asian investors bought 99.7%
of the Reg S notes and EMEA accounts
took 0.3%. By investor type, fund managers
booked 54%, banks 37% and private banks
9%.
The bonds have expected ratings of B1/
BB– (Moody’s/Fitch).
The Hong Kong-listed Chinese real
estate company plans to use proceeds
for debt refinancing and general
corporate purposes. Times had a quota of
US$550m available from China’s National
Development and Reform Commission
prior to this deal, leaving US$250m for it
to use by the end of the year, according to
Lucror Analytics.
Guotai Junan International, UBS, Deutsche
Bank, Credit Suisse, CEB International, China
Industrial Securities International, Haitong
International, HSBC and Silk Road International
were joint lead managers and joint
bookrunners.
› TONGLIAO CITY INV PICKS BANKS
TONGLIAO CITY INVESTMENT GROUP, rated
BB– (stable) by Fitch, has mandated EBS
International and Zhongtai International as
joint global coordinators, joint bookrunners
and joint lead managers for its proposed
offering of US dollar senior unsecured
bonds.
A Reg S unrated bond offering may
follow, subject to market conditions.
Tongliao City Investment is the largest
infrastructure construction platform
by total assets in Tongliao city, Inner
Mongolia. Its core business segments
include infrastructure construction,
construction services, and heating and
water supplies.
› WUHAN METRO EYES GREEN PERP
WUHAN METRO GROUP, rated A3/A (Moody’s/
Fitch), has hired banks for a proposed
offering of US dollar-denominated senior
perpetual Green securities.
Standard Chartered Bank and ICBC (Asia) are
joint global coordinators as well as joint
lead managers and joint bookrunners with
HSBC, CNCB HK Capital, GF Securities and
Haitong International.
StanChart is the Green structuring
adviser.
The state-owned metro operator of
Wuhan, in Hubei province, started to meet
investors in Hong Kong and London on
November 22.
The proposed Reg S Green bond have
expected ratings of A3/A– (Moody’s/Fitch).
Wuhan Metro intends to use proceeds
to finance and refinance eligible green
projects in low-carbon transportation,
pollution prevention, energy efficiency and
renewable energy, in accordance with the
company’s Green bond framework.
› YANCOAL PRINTS THREE-YEAR BOND
YANZHOU COAL MINING, rated Ba3/BB (Moody’s/
S&P), has priced US$275m three-year senior
bonds at par to yield 6.00%, inside initial
6.25% area guidance.
The bonds will be issued by wholly owned
subsidiary Yancoal International Resources
Development, while the Hong Kong and
Shanghai-listed parent company is guarantor.
The Reg S issue has an expected BB rating
from S&P.
The Chinese coal miner plans to use
proceeds for debt repayment, working
capital and general corporate purposes.
Deutsche Bank, CMB International and Standard
Chartered Bank were joint global coordinators
as well as joint bookrunners and joint lead
managers with CEB International, Haitong
International and Shanghai Pudong Development
International Financing Review Asia November 24 2018
COUNTRY REPORT CHINA
Bank Hong Kong branch.
Industrial Bank Hong Kong branch and
Silk Road International were added as joint
bookrunners and joint lead managers at a
later stage.
› YUNNAN ENERGY SELLS 3-YEAR BOND
YUNNAN PROVINCIAL ENERGY INVESTMENT GROUP,
rated BBB (stable) by Fitch, has raised
US$200m from an offering of senior
unsecured notes for working capital and
general corporate purposes.
The 6.250% three-year bonds were priced
at 98.662 to yield 6.75%, inside initial 6.9%
area guidance.
The bonds will be issued by wholly
owned British Virgin Islands subsidiary
Yunnan Energy Investment Overseas
Finance and guaranteed by Yunnan
Provincial Energy Investment Group.
The guarantor has invested in hydropower,
fossil fuel, wind power, natural gas, solar and
other new energy projects that are deemed
of strategic importance to the economic and
urban development of Yunnan province.
The Reg S bonds have an expected BBB
rating from Fitch.
Citigroup, HSBC and BOC International
were joint global coordinators as well as
joint lead managers and joint bookrunners
with Guotai Junan International and Silk Road
International.
CCB International, Southwest Securities
International and BoCom International were on
the syndicate list at the time of marketing
but were not at the final stage.
› RUSHYDRO PRINTS DIM SUM
RUSHYDRO (Ba1/BBB–/BBB–) on November
15 sold a Rmb1.5bn Dim Sum bond due
November 2021 at 6.125%, inside IPTs of
6.25% area.
The issuer, one of the largest utility and
infrastructure companies in Russia, drew
orders of Rmb2.5bn.
Asian investors bought 82% of the notes,
Russian accounts 17% and others 1%. Asset
managers and fund managers booked 69%,
while banks and private banks took 31%.
Gazprombank, JP Morgan, Sberbank and VTB
Capital were joint bookrunners.
› BECEG PLANS GREEN PANDA BONDS
Cayman Islands-incorporated BEIJING
ENTERPRISES CLEAN ENERGY GROUP plans to issue
up to Rmb1.2bn Green Panda bonds.
The Hong Kong-listed company plans to
sell the perpetual non-call three securities in
an indicative price range of 6.00%–6.80%. If
not called, the notes will step up by 300bp.
Books opened on Friday and final pricing
will be announced on November 26.
21
 The Chinese photovoltaic power plants
company obtained approval in July
from the China Securities Regulatory
Commission to issue up to Rmb2.8bn of
Panda bonds.
The planned note, which will be listed
on the Shenzhen Stock Exchange, is the
company’s first issue off of that quota. The
approval is valid for 24 months.
Both the issuer and the notes are rated
AA+ by United Ratings.
Proceeds will be used to repay debt and
replenish capital.
Huatai Securities is lead underwriter and
bookrunner on the offering with China
Development Bank Securities and China Merchants
Securities as joint lead underwriters.
› CHINA RAILWAY GROUP SEEKS APPROVAL
State-owned construction company CHINA
RAILWAY GROUP is seeking shareholder
approval to issue up to Rmb40bn bonds in
onshore and offshore markets, according to
a stock exchange filing.
The types of bonds to be issued could
include short-term commercial paper, super
short-term commercial paper, medium-
term notes, corporate bonds, onshore
and offshore renminbi bonds and foreign
currency bonds, and bonds convertible into
the company’s A-shares or H-shares.
If convertible bonds are to be issued,
the size of each single issue cannot exceed
US$1.5bn-equivalent.
Proceeds raised from the bond offerings
will be principally used to meet operational
needs, replenish working capital, adjust the
company’s debt structure, increase capital,
invest in domestic and overseas projects,
and for mergers and acquisitions.
› CMB PRINTS ONSHORE T2 BONDS
CHINA MERCHANTS BANK has raised Rmb20bn
from an offering of Tier 2 capital bonds in
China’s interbank market, according to a
stock exchange filing.
The 10-year non-call five notes were
priced at par to yield 4.65%.
The Hong Kong and Shanghai-listed
lender said proceeds would be partly to
make up for the redemption of Rmb7bn
10-year subordinated bonds that matured
on September 4 2018 and to refinance
Rmb11.3bn Tier 2 bonds callable in April
22 2019.
› CMBC ISSUES FINANCIAL BONDS
has issued Rmb40bn
CHINA MINSHENG BANKING CORP
three-year financial bonds in China’s
interbank market at par to yield 3.83%,
according to a stock exchange filing.
Proceeds from the issue will be used to
support loans to small and micro enterprises.
The issue was the first tranche of an up
to Rmb80bn quota that the Hong Kong and
Shanghai-listed bank received from the
People’s Bank of China.
› FANTASIA GETS GO-AHEAD
Hong Kong-listed Chinese property
developer FANTASIA HOLDINGS GROUP said its
PRC subsidiary has received approval
from the China Securities Regulatory
Commission to issue up to Rmb2.9bn of
corporate bonds, according to a stock
exchange filing.
Public offerings of the corporate bonds
will be carried out by wholly owned PRC
subsidiary Fantasia Group (China) and will
be issued in tranches.
The approval is valid for 24 months and
the first tranche will be issued within 12
months.
SYNDICATED LOANS
› LENDERS FLOCK TO ZIJIN'S NEVSUN LOAN
ZIJIN MINING GROUP has attracted almost a
dozen relationship banks to a US$870m
five-year term loan to back its C$1.84bn

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22 International Financing Review Asia November 24 2018


(US$1.4bn) acquisition of Canadian miner
Nevsun Resources.
China Construction Bank is the mandated lead
arranger and bookrunner of the loan, which
has been oversubscribed and is expected to
be signed and drawn next month.
Zijin has cleared all the regulatory hurdles
to proceed with the all-cash offer. The Hong
Kong and Shanghai-listed miner said on
Tuesday that it has completed a registration
with China’s State Administration of Foreign
Exchange and has cleared the Investment
Canada Act – the final regulatory conditions
from the two countries for the acquisition.
Before that, Zijin received an approval
from China’s National Development &
Reform Commission and cleared the
Canadian Competition Act on October 24.
It then got the green light from China’s
Ministry of Commerce on November 1.
Nevsun’s shareholders have until December
28 to tender their shares to Zijin, according to
a statement on the company’s website.
If the takeover proceeds successfully,
Zijin will acquire the Timok copper-gold
mine in Serbia. Nevsun has exploration
activities in Serbia and Macedonia.
Zijin, rated Baa3/BBB–/BBB–, is
headquartered in China’s Fujian province
and mines gold, copper, zinc and other
mineral resources.
› HUAWEI LAUNCHES SAMURAI LOAN
Huawei Technologies has launched a
US$300m-equivalent three-year debut
Samurai loan into general syndication.
The deal, denominated in yen and
targeting Japanese investors, is the first
such borrowing for a Chinese corporate.
The three Japanese mega banks – Mizuho
Bank, MUFG and Sumitomo Mitsui Banking Corp
– have underwritten US$100m-equivalent
each. A bank meeting took place in Tokyo on
Tuesday.
The borrower is HUAWEI TECHNOLOGIES
COOPERATIEF UA.
Huawei’s previous loan market visit was
in December for a US$1.5bn five-year bullet
loan, which offered a top-level all-in pricing
of 112bp based on an interest margin
of 95bp over Libor. ANZ, Banco Bilbao
Vizcaya Argentaria, BNP Paribas, Citigroup,
Commerzbank, DBS Bank, ING Bank,
Standard Chartered and UniCredit were the
mandated lead arrangers and bookrunners.
Shenzhen-based Huawei, the world’s
largest telecom equipment maker,
established a Japan unit in 2005.
› DIANCHI WATER TAPS MAIDEN LOAN
has
KUNMING DIANCHI WATER TREATMENT
launched a US$150m-equivalent three-year
amortising term loan.
Bank of Communications and Morgan
Stanley are the mandated lead arrangers
and bookrunners of the debut offshore
syndicated financing.
The borrower is Hong Kong-incorporated
DIANCHI INTERNATIONAL HOLDINGS, while Kunming
Dianchi Water is the guarantor.
The interest margin is 200bp over Libor
or Hibor and the average life is 2.85 years.
Banks have been invited to join as MLAs
with tickets of US$30m-equivalent or more
for a top-level all-in pricing of 240bp via
an upfront fee of 115bp. Lead arrangers
committing US$20m–$29m get an all-in of
235bp through a 100bp fee and arrangers
with tickets of US$10m–$19m get an all-in
of 230bp based on a 85bp fee.
Commitments are due by December 14.
Funds are for general corporate purposes.
Founded in 2010, Kunming Dianchi
Water was listed on the Hong Kong Stock
Exchange in April 2017. The Kunming-
based company supplies water and treats
wastewater.
Two companies owned by the
State-owned Assets Supervision and
Administration Commission of Kunming
together own about 64% of the guarantor,
while a unit of Yunnan Provincial SASAC
holds about 6%.
For comparison, Yunnan Water
Investment, which is about indirectly 30%-
owned by Yunnan SASAC and also listed on
the Hong Kong Stock Exchange, launched
a US$200m three-year loan in October
2017, offering a top-level all-in pricing of
268.65bp via a margin of 220bp over Libor
and an average life of 2.775 years. Deutsche
Bank was the MLAB.
Yunnan Water Investment cancelled
the loan in December 2017 after
obtaining funding from China
Development Bank.
› XIANGGUANG SEEKS TRADE LOAN
XIANGGUANG GROUP has invited banks into a
US$150m three-year trade facility.
Deutsche Bank is the coordinating
mandated lead arranger of the amortising
term loan, which pays an all-in pricing in
the high 300bp area.
The borrower is HONG KONG HUNG YUN
INTERNATIONAL HOLDINGS, a unit of Xiangguang
Group. The parent is providing a guarantee.
Hong Kong Hung Yun International
Holdings raised a US$138m two-year
pre-export financing in November 2017.
The guarantor on that deal was Yanggu
Xiangguang Copper, an intermediate
company that holds shares in the borrower
and is a unit of Xiangguang Group.
Sole MLAB ANZ brought Commonwealth
Bank of Australia and Westpac Banking
Corp into the 2017 financing, which pays
International Financing Review Asia November 24 2018
COUNTRY REPORT CHINA
an interest margin of 260bp over Libor and
offered a top-level all-in pricing of 318.14bp
for an average life of 1.29 years.
Xiangguang Group is a privately owned
cathode copper maker.
EQUITY CAPITAL MARKETS
› BABYTREE PRICES IPO AT BOTTOM
Alibaba-backed BABYTREE GROUP has raised
HK$1.7bn (US$217m) from a Hong Kong
IPO after pricing it at the bottom of an
indicative price range, according to people
close to the deal.
The company sold about 250m primary
shares, or 15% of its enlarged share capital,
at the bottom of the HK$6.80–$8.80 range.
The final price represents a 2019 P/E of
13.1 and also values the online parenting
services company at US$1.45bn. Chinese
e-commerce giant Alibaba invested
US$214m in Babytree in late May, valuing
the 11-year-old firm at Rmb14bn (US$2.2bn
at the time).
Shares of Babytree will start trading on
November 27.
China Merchants Securities, Haitong
International and Morgan Stanley were joint
sponsors of the IPO.
› BANK OF JINZHOU PLANS PLACEMENT
BANK OF JINZHOU has won approval from the
China Securities Regulatory Commission
for a H-share private placement of
HK$8.35bn based on the lender’s closing
price on Monday.
The bank plans to sell up to 1bn H-shares
or 12.85% of its enlarged share capital.
Its shares closed at HK$8.35 last Monday.
The stock is up 9.4% year to date.
The lender will use the proceeds to
replenish the core Tier 1 capital.
› EVER SUNSHINE SEEKS LISTING OKAY
EVER SUNSHINE LIFESTYLE SERVICES, a Chinese
property management service company,
last week sought listing approval from the
Stock Exchange of Hong Kong for an IPO of
about US$70m, according to people close to
the deal.
Haitong International is the sole sponsor for
the deal.
The company posted a net profit of
Rmb13.4m (US$1.93m) for the three
months ended March 31 2018, up 21%
year on year. Its net profit in 2017 was
Rmb76.4m.
As at the end of March this year, Ever
Sunshine provided property management
services and value-added services in 34
cities in China with a total gross floor area
23
under management of about 30.5 million
square metres.
› IDREAMSKY TECH TO OPEN IPO BOOKS
Chinese mobile game developer IDREAMSKY
TECHNOLOGY will open books on Monday for a
Hong Kong IPO of around US$100m, people
with knowledge of the deal said.
The Shenzhen-based company posted a
net profit of Rmb152m in 2017, versus a
net profit of Rmb5.1m in 2016, according to
a regulatory filing.
The company had some 125 million
monthly average users as of last year.
It currently operates 55 games, ranging
from massively multiplayer online games
through to social games such as puzzles
and competitions. Most are free to play
with the company earning revenue from
sales of game add-ons.
Tencent Holdings currently owns a
20.65% stake in the company.
CICC, China Merchants Securities and Credit
Suisse are the joint sponsors.
› KAISA PROPERTY TO OPEN BOOKS
KAISA PROPERTY, the property management
unit of Hong Kong-listed Kaisa Group, will
open books on Monday for a Hong Kong
IPO of around US$60m–$70m, people close
to the deal said.
ABC International and CLSA are the joint
sponsors.
Founded in 1999, the company mainly
focuses on mid-to-high-end properties
developed by Kaisa Group in Guangdong,
Hong Kong and Macau.
Kaisa Holdings will remain the
controlling shareholder of the company
via Rui Jing Investment and Ye Chang
Investment.
Kaisa Property posted a net profit of
Rmb71m in 2017, up 23% from a year
earlier.
Kaisa Property is joining a wave of
Chinese property management company
listings in the city. A-Living Services, the
property management unit of developer
Agile, raised HK$4.1bn from an IPO in
February. In June, Country Garden also
listed Country Garden Services in Hong
Kong by introduction.
› NATURAL FOOD TO OPEN IPO BOOKS
NATURAL FOOD INTERNATIONAL, a health food
company in China, plans to open books
on Tuesday for a Hong Kong IPO of about
US$100m, a person close to the deal said.
The company sells products under the
Wugu Mofang brand. It produces packaged
food made of natural ingredients, without
any artificial or synthetic food additives,
24
and which include nutrients with health
benefits.
Founded in 2007, the company’s
product portfolio includes over 70 types of
products from healthy snacks to personal
care products that are made of grains,
beans, nuts, dried fruits and other natural
ingredients.
Founder Zhang Zejun holds a controlling
stake of 51.67% in the company via Natural
Capital Holding.
It posted a net profit of Rmb186m in
2017, up 112% from a year earlier.
CICC and CMBC Capital are joint sponsors.
› SINOCHEM ENERGY PUTS HK IPO ON HOLD
SINOCHEM ENERGY has decided to put its Hong
Kong IPO on hold amid weak markets and
falling oil prices, according to people close
to the deal.
The company, which finished pre-
marketing its IPO the week before last, has
halted work on the deal and will wait for a
better market window next year, said the
people.
The company originally planned to raise
US$2bn. Other people close to the deal said
investors asked for a lower valuation during
pre-marketing, which will put the deal
more likely in the US$1.3bn–$1.5bn range.
Oil prices have tumbled 25% from their
early October highs. Hong Kong's Hang
Seng stock index is also down 6% since the
start of October, for a 12% loss year to date.
BOC International, CLSA and Morgan Stanley
are the joint sponsors.
The company is the energy unit of state-
owned Chinese chemicals conglomerate
Sinochem Group. Sinochem Energy’s
businesses include oil refining, oil trading,
storage and logistics, marketing and
distribution.
› TONGCHENG-ELONG PRICES AT LOW END
Tencent-backed TONGCHENG-ELONG, a Chinese
online travel service provider, has raised
HK$1.41bn from a Hong Kong IPO after
pricing it near the bottom of the indicative
price range, according to people close to
the deal.
The company sold 143.8m primary
shares, or about 7% of the enlarged
share capital, at HK$9.80 each versus the
HK$9.75–$12.65 range.
The final price represents a 2019 P/E of
12.5.
The shares will start trading on
November 26.
Tencent and Ctrip.com owned respective
stakes of 24.92% and 22.88% prior to the
IPO.
CMB International, JP Morgan and Morgan
Stanley were the joint sponsors on the float.
International Financing Review Asia November 24 2018
› TUANCHE FURTHER TRIMS IPO SIZE
TUANCHE, which operates an automotive
marketplace in China, has trimmed the
size of its Nasdaq IPO to US$28.5m from
US$38m.
The company is selling 3m American
depositary shares, instead of 4m, at the
same price range of US$7.50–$9.50 each.
The deal was originally filed with a size
of US$150m.
Three existing shareholders, Honour
Depot, BAI and K2 Partners II, have
indicated an interest in purchasing up
to US$7m, US$5m and US$3m of the IPO
shares, respectively.
Based in Beijing, TuanChe posted a net
loss of Rmb21m for the first half of 2018,
compared with a net loss of Rmb58m in the
same period of 2017.
The company intends to use the proceeds
to develop and expand its business,
strengthen its information technology and
data analytics capabilities, and for general
corporate purposes.
AMTD Tiger and Maxim Group are the joint
bookrunners.
› XINYI ENERGY PRE-MARKETS HK IPO
XINYI ENERGY,
a spin-off of Hong Kong-listed
Xinyi Solar, has started pre-marketing
for a Hong Kong IPO of about US$400m,
according to people close to the deal.
The shareholders of Xinyi Solar, a solar
farm operator, approved the proposed spin-
off last week.
Established in 2015, Xinyi Energy
owns and operates ground-mounted solar
farm projects initially developed and
constructed by Xiniyi Solar. The company
has a portfolio of nine solar farms with a
combined capacity of 954MW.
Following the spin-off, Xinyi Solar will
continue to be the largest shareholder and
controlling shareholder of Xinyi Energy
with a 75% stake.
BNP Paribas is the sole sponsor of the deal.
HONG KONG
DEBT CAPITAL MARKETS
› NEW WORLD CHINA LAND GOES GREEN
NEW WORLD CHINA LANDhas hired banks for a
proposed offering of five-year US dollar-
denominated fixed or floating-rate Green
notes off its US$2bn medium-term note
programme.
HSBC, Mizuho Securities, DBS Bank, Natixis,

Permira closes A&E for 2017 LBO loan
„ Loans Six existing lenders drop out of increased borrowing
Private equity firm Permira has closed at
HK$3.44bn (US$439m) with 15 banks the
amend-and-extend exercise of the senior
loan raised in 2017 to back its leveraged
buyout of TRICOR HOLDINGS.
HSBC – the facility agent of the HK$2.8bn
three-tranche deal completed in January
2017 – coordinated the A&E exercise along
with Goldman Sachs, which was a mandated
lead arranger, bookrunner and underwriter
in 2017.
The exercise comprises a HK$2.85bn
amortising term loan facility A, increased
from HK$2.21bn, a HK$390m acquisition or
capital expenditure facility and a HK$200m
revolving credit facility. TRIVIUM INVESTMENT
was the borrower on both deals. Permira
originally wanted to increase facility A to
HK$2.865bn.
The maturity date of the three tranches
BNP Paribas and Credit Agricole are joint
global coordinators, as well as joint
bookrunners and joint lead managers with
China Construction Bank (Asia), CMB Wing Lung
Bank, Bank of Communications, United Overseas
Bank, OCBC Bank, Bank of East Asia, UBS, AMTD
and Heungkong Securities.
HSBC and Natixis are also joint Green
structuring advisers.
The China property arm of Hong Kong-
listed New World Development started to
meet investors in Singapore, Hong Kong,
London and Paris on November 22.
New World China Land is the issuer
of the unrated Reg S senior unsecured
notes and New World Development is the
guarantor.
The proposed Green bond issue has
received a pre-issuance stage certificate
under the Hong Kong Quality Assurance
Agency’s Green finance certification
scheme.
New World China Land plans to use
the proceeds to finance two certified
environmental projects in the Greater Bay
Area of Guangdong, Hong Kong and Macau
– Qianhai CTF Finance Tower in Shenzhen
Qianhai Free Trade Zone and New World
Zengcheng Comprehensive Development
Project in Guangzhou.
› CMT FINDS HK TAKERS
CAPITALAND MALL TRUSThas raised HK$555m
(US$70.9m) from seven-year bonds priced at
par to yield 3.836%.
will be extended to September 30 2023 from
March 31 2022. The extended capex tranche
will provide a full HK$390m credit line
available for drawdown.
Credit Agricole CIB and MUFG’s Hong
Kong and Singapore branches are new
lenders. Credit Agricole will provide about
HK$294.375m, split into approximate
amounts of HK$255.125m for facility A and
HK$39.25m for the capex tranche. The
MUFG branches will together lend about
HK$157m to facility A.
The 13 existing lenders that agreed to
the amendment are: Aozora Bank, Bank of
China, Bank of East Asia, BNP Paribas, Cathay
United Bank, CTBC Bank, E. Sun Commercial
Bank, HSBC, ING Bank, Sumitomo Mitsui
Banking Corp, Sumitomo Mitsui Trust Bank,
Taipei Fubon Commercial Bank and Yuanta
Commercial Bank.
DBS was sole lead manager and
bookrunner for the deal, which settled last
Tuesday off a S$3.5bn (US$2.5bn) multi-
currency MTN programme.
CMT MTN is the issuer and HSBC
Institutional Trust Services Singapore, in its
capacity as CMT Trustee, is the guarantor.
The HK dollar proceeds were swapped
into Singapore dollars for S$98.79m at
3.248% in Singapore dollar terms.
Proceeds will be used to refinance debt,
fund investments and asset enhancement
works, and support general corporate and
working capital needs.
SYNDICATED LOANS
› LEI SHING HONG CREDIT WANTS MORE
LEI SHING HONG CREDIT is likely to increase its
three-year loan to US$310m-equivalent
from the US$300m-equivalent target after
attracting a handful of banks in general
syndication.
Bank Sinopac, Chang Hwa Commercial
Bank, Far Eastern International Bank,
KGI Bank and Taiwan Cooperative Bank
are the mandated lead arrangers and
bookrunners of the facility, which is
expected to close soon.
The deal, which can be drawn in either
HK or US dollars, offers an interest margin
of 160bp over Libor/Hibor and has a 2.85-
year average life.
Banks were offered a top-level all-in
International Financing Review Asia November 24 2018
COUNTRY REPORT HONG KONG
Six existing lenders have dropped out –
Chang Hwa Commercial Bank, China Citic Bank
International, China Minsheng Bank, Goldman
Sachs, Mega International Commercial Bank
and Taishin International Bank.
The amended facility agreement is
currently being signed by circulation and is
expected to be dated soon.
The additional funds from the increased
portion will repay a mezzanine debt financing
of up to US$75m from Partners Group that
part-financed the LBO. The margin matrix
will remain the same, while leverage and
interest coverage covenants will be relaxed.
Permira’s funds and Tricor’s management
completed their HK$6.47bn acquisition of
Tricor – a provider of integrated business,
corporate and investor services – from Bank of
East Asia and NWS Holdings in March 2017.
EVELYNN LIN, APPLE LAM
pricing of 180bp and the MLAB title via a
57bp management fee.
The guarantor is parent Lei Shing Hong.
Funds are for general corporate purposes.
The borrower last raised a US$400m-
equivalent tree-year loan in August 2017.
Far Eastern International Bank, KGI Bank,
Mega International Commercial Bank,
Taishin International Bank and Yuanta
Commercial Bank were the MLABs on
that loan, which comprised a HK$1.554bn
(then US$200m) tranche A and a US$200m
tranche B. Banks were offered a top-level
all-in pricing of 180bp via a margin of
160bp over Libor.
The borrower provides mortgage loans
against various collateral bases.
› HUAFA SIGNS INCREASED CLUB LOAN
ZHUHAI HUAFA GROUP has increased a three-year
term loan to HK$1.7285bn (US$222m) from
HK$1bn.
Coordinator Hang Seng Bank and six other
banks signed the club loan on November 16.
The size may be increased further as
more banks are said to be still looking
at the facility and are expected to be
substituted in later.
The interest margin is 208bp over Hibor
and the all-in pricing is 259.1bp for an
average life of 2.7 years.
The borrower is HONG KONG HUAFA INVESTMENT
HOLDINGS, while its onshore parent is the
guarantor.
For full allocations, see www.ifrasia.com.
25
© Thomson Reuters 2018. All rights reserved. RTR24AS6.

©REUTERS/Daniel Munoz

REGIONAL ECM INTELLIGENCE

FOR YOUR GLOBAL STRATEGY
IFR US ECM BRIEFING
IFR’S RANGE OF DAILY ECM BRIEFINGS OFFERS CONCISE,
NOVEMBER 3 2011

US EQUITIES HUMAN GENOME SCIENCES had laid out plans to market a $400m seven-year convertible bond as
PAGE 1

FOCUSED COVERAGE OF EQUITY CAPITAL MARKETS ACTIVITY

IN EUROPE, ASIA AND THE US.
BOOKRUNNERS: 1/1/2011 TO 28/10/2011 an operational bridge to profitability. Fresh from the disappointing launch of a drug earlier

IFR EUROPEAN ECM BRIEFING

Managing bank No. of Total Share in the year, the CB was viewed as the most attractive way to pre-fund the maturity of an
or group issues US$(m) (%) existing debt coming due over the next year.
1 JP Morgan 99 15,978.5 11.7 Citigroup, one of the banks mandated on the CB, presented the company with an even
2 BofA Merrill Lynch 113 15,090.7 11.0 better offer in agreeing
 NOVEMBER 3 2011to purchase the CB, eliminating any execution risk associated with PAGE 1
3 Goldman Sachs 73 14,670.6 10.7 a marketed transaction.
4 Morgan Stanley 97 13,645.3 10.0 The outcome was stunning for reasons beyond just execution. Citigroup exited the
5 Credit Suisse 62 13,403.2 9.8 position in dramatic fashion and at profit.
EMEA EQUITIES German steelmaker THYSSENKRUPP is believed to be focusing on a trade sale for its stainless
6 Citigroup 94 12,657.3 9.2 The bank negotiated
BOOKRUNNERS: late
1/1/2011 TO into the night Tuesdaysteel
28/10/2011 before launching
business with shortly
IPO markets after all 7:00 AM
but frozen for some time to come. It was considered
7
8
9
Barclays Capital
Deutsche Bank
UBS
10 Wells Fargo
80
72
44
72
12,332.2 9.0
9,775.8
7,455.8 5.4
6,753.0 4.9
7.1
EST Wednesday.
demand
3%,1 up
in the
Managing bank
or group
30% with
Goldman
range of
2 Deutsche
Within No.
to increase theissues

2.5%–3%. 40
Bank
twoof hours,
size of the
35 level set
Sachsthe re-offer
US$(m)
ahead
Total

at 99,
15,221.1
12,766.4 9.7
IFR ASIA ECM BRIEFING
of the 9:30
Share
(%)
commitment
11.6
tosuch
sufficient
AM opening,
the least
$430m
likely of the
from $400m,
as Evonik,
to ensure
Blackstone
it had
one banker
anda KKR
profit
bigsecured

are
Germansufficient
at final
– gross
away terms
said tospread
IPOs to come to market this year, behind marquee deals
from ofthe deal said. Large buyout houses including Apollo,
likelythe business.
be circling
Companies like Evonik were further into the IPO process and would be ready to launch
NOVEMBER 3 2011 PAGE 1
Emailed at midnight in their respective time-zones, each Briefing has the flexibility
Total 476 137,186.40 Pre-open  risks
3 Morgan marketing
Stanley allowed
33 the issuer to
10,349.8 7.9avoidonce notmarket
the only in the US, but but
normalises, alsoThyssenKrupp
around still has some preparatory work to do. As it
Including all domestic and international deals and rights issues

Source: Thomson Reuters (SDC code: C3r)

the4world.

even
To
6 JP
– Goldman
BofA Merrill Lynch
banksSuisse
5 Credit
byMorgan
mandated in 33
investment-banking
7 UBS Sachs was a joint
26
the marketed
40 standards.
9,419.7

8,073.9 One
28 bookrunner,
7,070.9 along
7.2
8,748.3 transaction,
6.6
6.1source
5.4 with
is unlikely to be a must-buy like some of the larger German firms, it may have to wait
however,
longer
ASIA-PACIFIC EQUITIES
questioned
Even if private
BOOKRUNNERS:
Citigroup,
spin-off
the maneuver
still before
the equity
1/1/2011
“honorfirms
on aa pair
IPO, it’s
broke protocol,
a public offering
among
TO 28/10/2011
question of follow-on
becomes viable, he added.
arethieves”
CHOW TAI FOOK JEWELLERY may seek SEHK approval as early as November 10 for its proposed
unlikely to stump up the €2.5bn–€3bn targeted in the
Hong Kong IPO of US$3bn–$4bn, according to the schedule.
of sacrificing some of the proceeds to complete the deal within
to be read in the way that suits you best: as a printed PDF, on your office PC, or
Managing No of Total Share The company, however, is undecided over whether or not it will push back the listing

through your mobile device.

offerings
8 Citigroupin 2009. 16 5,235.1 4.0 months rather than wait a year. One banker said a trade sale would probably fetch about
bank or group issues US$(m) (%) hearing because current market conditions are not favourable for the offering. It is looking
9 Barclays Capital 22 3,307.0 2.5 €500m less than an IPO would.
1 Goldman Sachs 33 11,579.5 7.0 to sell shares at around 2012 P/E of 30 times, a valuation that is not easy to achieve in the
US DOMESTIC CONVERTIBLES Yield
10 HSBCto buyers
Holdings 9 3,200.8 2.4 The firm appointed Citigroup, Deutsche Bank and Rothschild to look at all available options
BOOKRUNNERS: 1/1/2011 TO 28/10/2011 2 Morgan Stanley 56 11,015.7 6.6 prevailing markets, according to sources.
ENDURO ROYALTY TRUST, a perpetual
Total 533 royalty trust, culminated
131,787.0 in May of itsthis
second
year,run butatisthe now public
understood to be focusing mainly on a straight sale to
3 UBS 71 9,956.9 6.0 As the firm is cash rich, it does not have to rush into a listing, added a source.
Managing bank No. of Total Share markets with aReuters
Source: Thomson somewhat
(SDC code:disappointing
C4c) result. Joint bookrunners
private equity fund, Barclays
althoughCapital,this is not expected to occur before early next year. The spin-
or group issues US$(m) (%) 4 BofA Merrill Lynch 28 7,492.3 4.5 Chow Tai Fook is a jewellery retailer in Hong Kong and mainland China under the
Citigroup, Goldman Sachs, RBC Capital Markets, Wells offFargo stainlessfinalized
of theSecurities divisionpricing
is part of of a larger ThyssenKrupp plan to raise €10bn through
5 Deutsche Bank 43 6,714.3 4.0 control of tycoon Cheng Yu-tung, chairman of Hong Kong property company New World
1 Goldman Sachs 17 4,447.9 18.0 13.2m
EMEAunits at $22, well below the $24–$26 indicative
CONVERTIBLES range and
divestments setting
to lower itsthe
debt.implied
The Stainless Global unit had sales of €5.9bn in the last fiscal
BOOKRUNNERS:
6 Guosen Securities 33 5,930.6 3.6 Development.
dividend yield at1/1/2011
7.4%. TO 28/10/2011

Written by ECM specialists with a wealth of market experience, each daily report contains:
2 JP Morgan 28 4,104.4 16.7 year and more than 11,000 employees.
7 Nomura 34 5,484.5 3.3 Goldman Sachs, HSBC and JP Morgan are sponsors for the deal. The three banks, together
3 Citigroup 15 3,725.5 15.1 That compares
Managing bankto a 6.1%
No. ofyield for CrossShare
Total Timbers Royalty Trust,DRILLING
NORTH ATLANTIC the largest perpetual
, a carve-out from Seadrill focused on harsh environment operations,
8 Pingan Securities 36 4,727.4 2.9 with Deutsche Bank, are joint global co-ordinators and joint bookrunners. Citigroup, Credit
4 Morgan Stanley 15 3,014.0 12.2 trust,orand group a 7.2% yield on issues US$(m)
a like-sized deal (%)
that was pulled at its
postponed theplanned
height of market
Oslo listingvolatility
yesterday. Following a US$425m block trade in February,
9 JP Morgan 28 4,538.5 2.7 Suisse and UBS are the other bookrunners.
5 BofA Merrill Lynch 17 2,284.4 9.3 in August.
1 MorganOne reason for3the disappointing
Stanley 1,842.2 17.6outcome North (higher
Atlantic yield)
has is loweron
traded oilthe
pricesOTCsince
said at the time that it was planning a full listing on
10 Citigroup 35 4,487.9 2.7 Sole bookrunner UBS has completed a selldown of HK$402.5m (US$51.6m) in YINGDE GASES
6 UBS 8 1,247.4 5.1 August
2 BNP the first-year payout
– Paribas 7 on1,022.5
the August 9.8 floatthewasOslo$1.79; now,
Stock it is $1.62.
Exchange later in the year and a filing application was made in early
Total 1,572 166,111.3 GROUP. The deal comprises 50m shares at HK$8.05 each, bottom of the price range of
7 Deutsche Bank 13 1,083.3 4.4 Another is structural. Like
3 Credit Suisse 4 Cross Timbers,
1,015.9 9.7 Enduro Royalty is structured as a perpetual
October.
HK$8.05–$8.25, representing a discount of 6.5% to the pre-deal spot. There is a 30-day lock-

ȕ

/FXT. The vital information for that day in the market, including mandates, launches
Including all domestic and international deals and rights issues
8 Barclays Capital 7 954.0 3.9 trust, meaning
4 Deutsche the vehicle3 has no1,010.7
Bank defined 9.7 life. The twistHowever,in this case is thatissues,
accountancy Enduro the level of free-float and share price and the company’s
Source: Thomson Reuters SDC code: C04a1r up for the selling shareholder Baring Private Equity.
9 Credit Suisse 7 712.4 2.9 Royalty’s sponsor
5 BofA Merrill Lynchdoes not3 actually945.1 operate9.1the oilfields,
relationship but, instead
with Seadrillowns interests
led to theinpostponement. A final decision is due in the next 30
The deal was launched yesterday, when Hang Seng Index rallied 1.88%. The book was
10 RBC CM 5 432.3 1.8 properties
6 UniCredit operators, such4 as Kinder Morgan,
826.5 7.9 Petrohawk
days, with Energy and Apache
a London or NewCorporation.
York listing also under consideration.
ASIA-PACIFIC EQUITIES (EX-JAPAN) covered in three hours on demand from investors in Europe, Asia and the US. Long-only
Total 78 24,644.0 Part of the
7 Societe selling pitch5was the594.7
Generale balance-sheet
5.7 strength of large,
BOOKRUNNERS: 1/1/2011well-established
TO 28/10/2011
Includes all US$ denominated bonds structured to be sold in the US, operators.
8 Citigroup 2 471.3 4.5 THIS WEEK'S DEALS (DEALS OVER US$50M) funds were dominant, but there were also some hedge funds and other investors.
Managing No of Total Share Yingde shares closed today at HK$8.06, holding up above the selldown price, while Hang
including exchangeables.

Source: Thomson Reuters (SDC code: G9)

Barclays
10 JP Morgan
CHESAPEAKE
Capital received
9 Lazard-Natixis
GRANITE WASH TRUST
4 a 0.5% 443.7
3 , a royalty
Total with a 20-year30term. 10,444.3
structured
properties
Including exchangeables
structuring
333.1 trust
4.3 fee. TUESDAY
3.2 affiliated
The expectation is FRIDAY
will rise initially and tail off over time.November
bank or group
Capitecwith(South
1 Goldman Sachs
issues
Africa – Finance):
Chesapeake
that production from the underlying
2 Morgan Stanley
The targeted
311 warrants
UBS
4 – Eurosic
Energy,
31
43
(Franceyield
dividend – Real
67Oct 5-Nov
US$(m)
R791.2m

on
10,363.2 6.9
9,916.7 6.6
Estate)
(%) Seng Index dropped 2.49%.
is (US$98m) prim at R172 (1.7% disc. to Tues), BAML
XINYI SOLAR has generated some investor interest for its US$500m Hong Kong IPO.
However, the spin-off unit of Xinyi Glass is still monitoring the market and has yet to set a
its €221.1m rights, 6.4m shares at €34.30 (4% prem to Sep 27),
9,617.6 timetable for the offering.
and pricings – plus granular detail of who bought, why and what that means.
for 4 shares, subs 4, BNP 6.4
upcoming
Source: ThomsonIPO Reuters
is 12.9%–
(SDC 14.3%
code: M9)in the first full year of operation, but dropping to 10.8%–12%
To find out how you can generate League Tables and 4 Deutsche Bank 41 6,578.1 4.4 Taiwan-listed company China Development Financial earlier announced that subsidiary
in 2016, according the latest regulatory filing.

ȕ

%FBMT. All the facts and figures pertaining to deals that have priced, or are due to
analyse investment banking and deal trends take a 5 BofA Merrill Lynch 26 6,182.1 4.1 China Development Industrial Bank decided to invest up to HK$162m (US$21m) in Xinyi
To find out how
Spinning offyou can generate
interests League Tables
in mature andinto royalty
assets trusts is proving an increasingly
look at ThomsonONE.com Investment Banking and 6 Guosen Securities 33 5,930.6 4.0 Solar. The investment plan has secured board approval, but is still subject to regulatory
analyse investment banking and deal trends take a
SDC Platinum. popular strategy for independent E&Ps to fund their operations. SandRidge Energy sold off
look at ThomsonONE.com Investment Banking and 7 Pingan Securities 36 4,727.4 3.2 review.
interests
SDC Platinum.in two such vehicles earlier this year and plans to complete a third vehicle.
8 JP Morgan 28 4,538.5 3.0 According to an announcement from the parent of Xinyi Solar, 10% of the IPO shares will
In the case of Granite Wash, Morgan Stanley and Raymond James are targeting pricing of
9 Citigroup 34 4,395.1 2.9 be issued to qualifying shareholders. After the spin-off and the offering, Xinyi Glass will

price, throughout the week – plus weekly deal totals.

23.375m units, representing a two-thirds interest, at $19–$21 for pricing on November 10.
10 Credit Suisse 27 4,301.2 2.9 hold a 70%–75% stake in Xinyi Solar, which is given capital value of up to HK$12.1bn
Total 1,483 149,835.7 (US$1.56bn). Citigroup and JP Morgan are arranging the IPO.
Pile on to Groupon? METLIFECARE said it, along with its majority shareholder Retirement Villages New Zealand,
Including all domestic and international deals and rights issues
A lot of people are scratching their heads, but GROUPON ’s IPO is shaping up as a great
Source: Thomson Reuters SDC code: C04a2r is placing new and existing shares to institutions and other eligible investors. The capital
success. raising will comprise a NZ$40m primary offer of new shares. RVG is also making a
All the talk ahead of today’s much-anticipatedALL pricing of the controversial daily-deal
INTERNATIONAL ASIAN CONVERTIBLES secondary offer of existing shares of approximately NZ$50–$70m which will reduce its

ȕ
1JQFMJOF. Full details of what deals are in the market, and what will come next.
company’s $540m IPO suggests the deal is handsomely BOOKRUNNERS: oversubscribed
1/1/2011 TOand will likely price
28/10/2011 shareholding in Metlifecare to 50–55% on a diluted basis. Goldman Sachs will be acting as
above the $16–$18 range. Managing No of Total Share sole lead manager, placement agent and bookrunner. Talk is that the offer price for the
A bad night in Europe may well change things, but buy-side
bank or group sources are
issues being told
US$(m) that(%) share sale is NZ$2.10.
the deal is at least eight-times covered ahead of the 4:00 PMSachs
1 Goldman EST closing6of the1,850.2 books. Their 15.2 COLLINS FOOD stock fell sharply after the company on November 2 announced a shock
thinking suggests pricing in the range of $19–$20. 2 Nomura 5 1,430.8 11.8 downgrade of its profit forecast. In slightly over two months of completing an IPO through
Critical to perceptions will be the quality of the3 book, JP Morganthat is, the mix7of long-term 1,224.2 10.1 which owner Pacific Equity Partners shed its stake in the company, Collins said it expected
investors versus momentum traders that lead underwriters 4 Credit Suisse
5 Morgan Stanley
Morgan Stanley

6 BofA Merrill Lynch

10 , Goldman
4
3
The contents of this Briefing, either in whole or in part, may not be reproduced, copied, or distributed without prior written
7 Barclays Capital 5
988.1 Sachs
778.8
702.6
657.0
permission of the publishers. Action will be taken against companies who ignore this warning. IFR Daily Briefings are produced in
8.1
6.4
5.8
5.4
pro forma NPAT for the first half FY2012 to be approximately A$8m. The pro forma
forecast determined at the time of the prospectus issuance was A$10.3m.
It also said that if current trends were to continue across the full year the company
believes that pro forma full year NPAT for FY2012 could be in the range of A$18m–$20m
ȕ

-FBHVF
5BCMFT. Daily-updated tables showing which companies are leading the way
compared to the pro forma forecast in the prospectus of A$24.7m.

in issuance, and what proportion of the total market they account for.
line with the publishing dates of IFR and will not appear during national8holidays
Mizuho andFinancial Groupannual
the magazine's 1 end of 635.7
year break. 5.2
© Thomson Reuters 2011
9 RBS 6 608.2 5.0 “It is a complete disgrace,” said one banker. “It raises questions about the quality of due
10 UBS 4 593.2 4.9 diligence and how the company could have missed by that much in such a short period of
Total 44 12,174.8 time.” The Collins IPO was the largest listing in Australia this year and it was considered a
Including exchangeables. defensive play. Collins Foods, which operates from Brisbane in Queensland, owns the
Source: Thomson Reuters SDC code: M10 franchises for KFC and Sizzler.

ToThe
find out how
contents youBriefing,
of this can generate League
either in whole orTables and
in part, may not be reproduced, copied, or distributed without prior written
permission
analyse of the publishers.
investment bankingAction will be
and deal taken take
trends against
a companies who ignore this warning. IFR Daily Briefings are produced in
line with the publishing dates of IFR and will not appear during national holidays and the magazine's annual end of year break.
look at ThomsonONE.com Investment Banking and

Specifically written to be digested in minutes, IFR Briefings are designed to be the

© Thomson Reuters 2011
SDC Platinum.

The contents of this Briefing, either in whole or in part, may not be reproduced, copied, or distributed without prior written
permission of the publishers. Action will be taken against companies who ignore this warning. IFR Daily Briefings are produced in
line with the publishing dates of IFR and will not appear during national holidays and the magazine's annual end of year break.
© Thomson Reuters 2011
essential first step in your daily workflow. Choose from IFR’s suite of ECM Briefings to give
you the depth or breadth of insight you need to put yourself ahead of the competition.

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INDIA
DEBT CAPITAL MARKETS
› HDFC PLANS US$1BN BONDS
HOUSING DEVELOPMENT FINANCE CORP is planning
to raise up to US$1bn from a five-year
debut issue of dollar bonds in Reg S format,
according to market sources.
HDFC is yet to appoint bankers or make
an official announcement on the dollar
bond sale.
Seperately, in the onshore market, HDFC
sealed a Rs40bn (US$560m) five-year deal
at 9.05%, according to a filing on National
Securities Depository Limited.
ICICI Bank was the sole arranger of the
deal.
Crisil and Icra have assigned a AAA
(stable) rating to the notes. In the offshore
rupee market, HDFC raised Rs5bn from
five-year one-day Masala bonds at 8.75%,
payable semi-annually.
› BHARTI AIRTEL BUYS BACK BONDS
BHARTI AIRTEL has agreed to buy back most of
its US$1.5bn 5.125% bonds due 2023 under
a tender offer.
It said it had received valid tenders for
US$994.885m of bonds and instructions for
a further US$11.781m.
Following the tender, between
US$493.334m and US$505.115m of the
bonds will remain outstanding.
The Indian telco will pay tendering
bondholders US$985 per US$1,000 in
principal amount.
Barclays, BNP Paribas, Bank of America Merrill
Lynch and Standard Chartered were joint
dealer managers.
Bharti Airtel said the purpose of the
tender was to reduce debt and leverage by
acquiring the notes out of equity proceeds
and give liquidity to bondholders at a
premium to the market price.
› DEWAN HOUSING GETS BOARD NOD
DEWAN HOUSING FINANCEhas received board
approval to issue bonds for up to Rs120bn,
according to an exchange filing.
The Indian non-banking financial
company can raise Rs100bn from non-
convertible debentures, Rs10bn from
subordinated bonds and Rs10bn from
perpetual bonds.
On November 16 Dewan sold Rs15bn
10-year bonds at 9.9245%, payable
quarterly, according to a filing on
exchanges.
› HUDCO EYES 10-YEAR BONDS
HOUSING AND URBAN DEVELOPMENT CORP is seeking
bids to raise up to Rs20.5bn from 10-year
government of India-serviced bonds in a
closed bidding session, according to market
sources.
Hudco has asked investors to place bids
on BSE’s electronic platform on November
26 between 11:00am and 12:00pm India
Time.
It is targeting Rs5bn, plus a greenshoe
option of Rs15.5bn.
On November 6, Hudco raised Rs30bn
from 10-year bonds at 8.6%.
Icra, Care and India Ratings assigned AAA
ratings to the bonds.
The issuer is yet to make an official
announcement the size and tenor of the
planned sale.
› INDIABULLS PRINTS 10-YEAR BONDS
INDIABULLS HOUSING FINANCE has raised Rs10bn
from 10-year bonds at 9.3%, according to
market sources.
The bonds are rated AAA by Crisil and
Icra.
Separately, the privately owned
housing finance company is planning
to raise Rs2bn plus an undisclosed
greenshoe amount from zero-coupon
bonds at 9.5% for a tenor of three years
and one month.
It raised Rs236bn from 32 financial
institutions in the past two months,
according to a release on India’s
exchanges.
Of the total, it raised Rs174bn in long-
term debt even though non-banking
financial and housing finance companies
were facing a liquidity crunch following
defaults at Infrastructure Leasing &
Financial Services. The funds were raised
to maintain high liquidity and sustainable
growth, the release said.
› NHAI FILES FOR PUBLIC BONDS
NATIONAL HIGHWAYS AUTHORITY OF INDIA has filed
a draft shelf prospectus with the market
regulator to raise up to Rs100bn from a
public issue of bonds, according to a filing
on the BSE.
NHAI has appointed Edelweiss Financial
Services, AK Capital Services, Axis Bank,SBI
Capital Markets and Trust Investment Advisors
as lead managers on the issue.
NHAI is looking to raise the bonds in one
or more tranches of Rs25bn each, according
to DCM bankers.
The bonds will be listed on the BSE and
NSE.
Care, Crisil, Icra and India Ratings have
assigned AAA ratings to the notes.
International Financing Review Asia November 24 2018
COUNTRY REPORT INDIA
› NRSS EYES RS30BN BONDS
The Northern Region Strengthening
Scheme (NRSS)-29 owned by STERLITE POWER
GRID VENTURES is planning to raise up to
Rs30bn from bonds, according to market
sources.
NRSS has transmission lines in the
northern states of Jammu & Kashmir and
Punjab. It has asked investors to place bids
electronically on Tuesday.
Crisil recently assigned a AAA (stable)
rating to the notes.
The rating agency said the company
plans to raise a maximum of Rs30bn, with
an amortising repayment schedule over 10
years and a large (70%) bullet payment at
maturity.
The proceeds will be used to refinance
debt, repay shareholder loans, pay capital
expenditure creditors and for general
corporate purposes.
› PIRAMAL PLANS ZERO-COUPON BONDS
PIRAMAL ENTERPRISESis planning to raise
Rs10bn from dual-tranche zero-coupon
bonds, according to a filing on exchanges.
It is planning to raise Rs1bn from a one-
year portion and Rs4bn plus a greenshoe
option of Rs5bn from a two-year tranche.
The notes are secured by the first-ranking
pledge of some of the securities held by the
company and its affiliates.
On November 16, Piramal Enterprises
raised Rs5bn from bonds via private
placement.
› REC PRICES NOTES AT 8.45%
RURAL ELECTRIFICATION CORP raised Rs25.71bn
from three-year four-month bonds at 8.45%,
payable semi-annually.
Crisil, Care, Icra and India Ratings have
assigned AAA ratings to the notes.
The week before last, REC raised Rs36bn
from 10-year government of India-serviced
bonds at 8.54%.
› TATA POWER CONSULTS INVESTORS
TATA POWER is in talks with investors to issue
five or 10-year rupee bonds, according to
market sources.
On November 3, the Indian utility
received board approval to raise up to
Rs55bn from bonds via private placement,
according to a filing on exchanges.
On October 12, Crisil assigned a
AA– (stable) rating to Tata Power’s non-
convertible debentures aggregating to
Rs15.64bn.
Tata Power is coming to the domestic
bond market to raise funds after nearly a
year’s absence.
27
 In November last year, it raised Rs15bn
from bonds in an equally redeemable
format at the end of the third, fourth, fifth,
sixth and seventh years, at 7.99%.
Tata Power is yet to make an official
announcement on the fundraising plans.
SYNDICATED LOANS
› PFC SENDS RFP FOR UP TO US$250M LOAN
POWER FINANCE CORP has sent out a request
for proposals for a five-year loan of up to
US$250m-equivalent, with a deadline of the
end of this month.
The bullet deal, which has a base size of
US$75m, could be denominated in either
dollars or yen, or a combination of both.
In July, PFC was also seeking a US$250m
five-year loan.
The state-owned borrower last tapped
the offshore loan market in April for a
US$300m five-year facility. MUFG, Mizuho
Bank and State Bank of India were the
mandated lead arrangers and bookrunners
of the facility, which attracted four other
lenders in general syndication. The loan
paid a top-level all-in pricing of 100bp based
on an interest margin of 70bp and has a 4.5-
year remaining life.
› SBI CLOSES DUAL-TRANCHE FACILITY
STATE BANK OF INDIA SYDNEYhas closed a
A$200m (US$150m) dual-tranche term loan
after attracting three lenders in general
syndication.
CTBC Bank and Mizuho Bank were the
mandated lead arrangers and bookrunners
of the bullet financing, which has a
A$147m three-year tranche A and a A$53m
five-year tranche B. The portions pay a
top-level all-in pricing of 105bp and 133bp,
respectively, based on interest margins of
93bp and 126bp over BBSY.
Funds are for general corporate purposes.
Separately, SBI has mandated seven
banks on a US$500m five-year loan. CTBC,
DBS Bank, HSBC, First Abu Dhabi Bank,
Sumitomo Mitsui Banking Corp, Westpac
and UOB Bank are the MLABs and equal
underwriters. The mandated all-in pricing
is said to be around 130bp, significantly
more generous than the pricing on SBI’s
US$750m three-year loan that closed to a
poor response in July.
No lenders committed in general
syndication on that deal, which was
launched in May offering a top-level all-in
pricing of 90bp based on a margin of
70bp over Libor and a 2.6-year remaining
life. Axis Bank, Barclays, Credit Agricole
CIB, First Abu Dhabi Bank, HSBC, MUFG,
SBI Capital Markets, Standard Chartered
28
and UOB Bank were the MLABs of the
deal.
In April, SBI Sydney closed a A$120m
bilateral with SMBC. That deal paid a
margin of 106bp over BBSY, according to
LPC data.
For full allocations, see www.ifrasia.com.
RESTRUCTURING
› ROLTA FACES NCLT PETITION
ROLTA INDIA said holders of around 23% of its
senior US dollar notes had filed a petition
with the National Company Law Tribunal
under the Insolvency and Bankruptcy Code.
The bondholders who filed are claiming
US$146.1m, including principal and
accrued interest.
The IT services company defaulted on
US$300m 8.875% senior notes due 2019
and US$200m 10.75% notes due 2018 and
had agreed to two restructuring proposals
earlier this year to exchange them for cash
and new notes, but failed to execute either
of the agreements when it could not meet
its obligations in time.
ASEAN sovereigns eye dollars
„ Bonds Indonesia, Philippines hire banks for offshore sovereign bond offerings
The REPUBLIC OF INDONESIA (Baa2/BBB–/BBB)
and the REPUBLIC OF THE PHILIPPINES (Baa2/BBB/
BBB) have hired banks for their next offerings
of US dollar sovereign bonds, as they consider
pre-funding 2019 requirements before the
end of this year.
Indonesia is working with ANZ, Citigroup,
DBS, Deutsche Bank and Goldman Sachs,
while Bank of China International, Citigroup,
Credit Suisse, Goldman Sachs, JP Morgan,
Standard Chartered and UBS are among the
bookrunners on the Philippines transaction,
according to multiple people familiar with the
situations.
The Philippine central bank has approved
the government’s plan to issue US$500m–
$2bn of global bonds, Reuters reported this
month.
Volatile market conditions and rising
interest rates are forcing Asian sovereign
issuers to consider launching jumbo
transactions when windows are open in
the latter part of the year, instead of their
traditional time slots in January and February
when liquidity tends to be abundant.
Indonesia has sold US dollar bonds in
December for the past three years running,
opting to pre-fund its budget for the coming
year and minimise market risk. It sold a
International Financing Review Asia November 24 2018
INDONESIA
DEBT CAPITAL MARKETS
› ANGKASA PURA READIES TWO-PART DEAL
ANGKASA PURA II is planning to raise Rp750bn
(US$51m) from a dual-tranche bond issue,
according to the offer document.
The Indonesian state-owned airports
operator has given indicative yields in the
range of 8.50%–9.00% for a three-year tranche
and 8.75%–9.25% for a five-year portion.
Bookbuilding closed on November 22.
Mandiri, Bahana, BNI and DBS Vickers
Sekuritas are lead arrangers.
The proceeds from the issue will be used
for the construction and development of a
new airport.
The notes are rated AAA by Pefindo.
› CHANDRA ASTRI PLANS RUPIAH BOND DEAL
CHANDRA ASRI PETROCHEMICAL is targeting
proceeds of Rp500bn from an offering
US$4bn SEC-registered bond in December
2017 before diversifying its borrowings across
multiple currencies in 2018.
Indonesia sold a ¥100bn (US$911m) multi-
tranche Samurai bond in May and, a month
before that, a dual-tranche offering of US
dollar and euro notes to raise US$2.2bn,
taking advantage of a rating upgrade from
Moody’s that month.
The sovereign also issued the first Green
sovereign bond from Asia in February,
comprising a US$1.25bn five-year sukuk. That
was part of a deal that also included a regular
US$1.75bn 10-year sukuk.
An extra incentive for Indonesia to pre-fund
next year’s requirements is the general election
scheduled for April 19 2019, which will see the
president, vice president and members of the
People’s Consultative Assembly elected on the
same day for the first time.
The Philippines sold US$750m of 10-
year US dollar bonds in January, and raised
another US$230m from a sale of Panda
bonds in March. It also sold bonds in Japan
in August, setting a record for the largest
Samurai issue from Asia, excluding Australia,
with a massive ¥154.2bn (US$1.38bn) three-
tranche deal.
FRANCES YOON

of two-part bonds, according to the offer
document.
It has given indicative yield ranges of
9.75%–10.50% for a three-year tranche and
10.25%–11.00% for a five-year portion.
The bond issue will be a part of Rp2trn
bond programme.
Bookbuilding commenced on November
16 and closed on November 20.
Pefindo has assigned a AA– rating to the
notes.
Around 80% of the funds will be used to
repay a dollar loan and the rest will be used
for capital expenditure.
BCA Sekuritas, DBS Vickers and Mandiri
Sekuritas are lead arrangers for the issue.
› SYNDICATED LOANS
› LAUNCH IMMINENT FOR SEMEN INDO LOAN
A US$1.28bn loan backing state-owned SEMEN
INDONESIA’s proposed acquisition of the local
business of Swiss company LafargeHolcim is
set to be launched imminently.
BNP Paribas, Deutsche Bank, Maybank, MUFG
and Standard Chartered have underwritten
the two-year loan, which is split into a
US$1.029bn tranche A and a US$253m
tranche B. The tranches fund the purchase
of LafargeHolcim’s 80.64% stake in Holcim
Indonesia and a mandatory tender offer for
the remaining stake, respectively.
BNP is the coordinator of the loan, which
pays an interest margin of 160bp over Libor
in the first year before stepping up in the
second year. The all-in pricing is said to be
north of 200bp.
LafargeHolcim on November 12 signed
an agreement with Semen Indonesia
for the disposal of its entire holding in
Holcim Indonesia for an enterprise value of
US$1.75bn, on a 100% basis.
Holcim Indonesia, the country’s third-
largest cement maker, has four cement
plants, 33 ready-mix plants and 2 aggregate
quarries, according to LafargeHolcim.
Semen Indonesia previously tapped the
loan market in June 2016 for a Rp3.96trn
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International Financing Review Asia November 24 2018
(US$298m then) 10-year bilateral borrowing
with Bank Mandiri to finance the
construction of a cement plant in Central
Java.
JAPAN
DEBT CAPITAL MARKETS
› SHIZUOKA PRINTS CANADIAN DOLLAR DEAL
SHIZUOKA PREFECTURE, rated A1/AA+ (Moody’s/
R&I), raised C$100m (US$75m) last
Wednesday from a 10-year bond offering
via sole lead Goldman Sachs.
The 3.148% bond priced at par, yielding
36bp over mid swaps.
The trade is part of the prefecture’s
attempt to diversify its investor base
by issuing foreign-currency bonds. On
November 16, the regional authority sold a
US$100m five-year bond via Nomura.
In contrast to the sedate pace of domestic
Japanese bond offerings, Goldman gave
the issuer a taste of how quick pricing can
be globally. It started marketing with a
guidance range around 5:30pm and priced
within four hours.
In order to prevent front-running of the
currency basis swaps, Goldman did not
disclose the currency or tenor until the last
minute.
The bonds were sold to Japanese investors.
Shizuoka’s foreign bond deals will help it
tap the market swiftly in future, especially
when currency basis swaps widen, and
they also set a good precedent for other
municipal governments considering
foreign-currency bond issues.
› TAKEDA ADDS TO SHIRE FUNDING
TAKEDA PHARMACEUTICAL, rated A2/A– (Moody’s/
S&P), priced US$5.5bn of 144A/Reg S bonds
as part of its funding for the acquisition
of Shire, after printing the equivalent of
US$8.5bn in euros a week earlier.
COUNTRY REPORT JAPAN
A US$1bn two-year priced at Treasuries
plus 105bp, from initial talk of 120bp area;
a US$1.25bn three-year priced at Treasuries
plus 120bp, from 130bp area; a US$1.5bn
five-year priced at Treasuries plus 155bp,
from 160bp area; and a US$1.75bn 10-year
priced at Treasuries plus 200bp, unchanged
from initial price talk.
The issuer was estimated to have paid
single-digit new issue concessions on the
two shorter tranches and around 20bp on
the two longer-dated parts.
Two floating-rate tranches were dropped
at launch. Books were heard to be over
US$10.8bn.
Bank of America Merrill Lynch, JP Morgan,
Mizuho, Morgan Stanley and SMBC Nikko were
joint bookrunners.
Takeda has agreed to buy Ireland-based
biopharmaceutical maker Shire for ¥7trn
(US$64bn) and expects the acquisition to
close in early 2019.
Moody’s has placed Takeda’s A2 rating
on review for downgrade, while S&P has
its A– rating on negative watch and said a
downgrade to BBB+ is likely.
› COMMERZBANK PRINTS SMALL YEN SNP
COMMERZBANK, rated A1/A–/BBB+/A (Moody’s/
S&P/Fitch/Scope), raised ¥2.4bn from a
five-year senior non-preferred bond offering,
the first yen SNP deal from Germany.
The bonds priced with a 0.839% coupon,
or 70bp over yen offer-side swaps. The
spread was at the wide end of the initial
guidance range of 65bp–70bp.
The deal came after Standard Chartered
and Credit Agricole raised ¥111bn and
¥97.4bn, respectively, a week earlier.
Since then, however, the mood in the
international yen market had soured
because of continued spread-widening
in overseas markets, primarily due to
uncertainties over Brexit and Italy’s budget.
Against this backdrop, the German bank
struggled to draw demand.
Bankers, both on the deal and away
from it, blamed the unfavourable market
conditions for the small size of the print.
One banker on the deal also faulted
29
massive corporate issuance in the domestic
market for the limited demand. Indeed,
the domestic market digested more than
¥500bn of domestic bonds on the same day.
Some investors also stayed clear because
of persistent rumours about a possible
merger between Commerzbank and
Deutsche Bank.
Nonetheless, the lack of senior non-
preferred bonds from Germany did draw
demand from regional investors.
Commerzbank, Daiwa, Morgan Stanley, and
SMBC Nikko were the bookrunners on the
deal that has expected ratings of Baa1/BBB/
BBB+/A– (Moody’s/S&P/Fitch/Scope). The
bonds will be listed on the Tokyo Pro-bond
market.
EQUITY CAPITAL MARKETS
› TWO CB ISSUERS RAISE ¥60BN EACH
Department store owner TAKASHIMAYA has
priced a ¥60bn (US$534m) zero-coupon
convertible bond near the bottom of the
indicative conversion premium.
The company sold the 10-year CB at a
conversion premium of 15.04% versus the
indicative range of 15%–30%. The issue price
is at 100.5% and the offer price at 103%.
The books were well covered, people
with knowledge of the deal said. About 70%
of the offering went to hedge funds and
30% to outright. There was a balanced mix
of Asian and European investors.
“Takashimaya is a repeat issuer which
has a strong credit in the market. Although
demand is not particularly strong compared
to what it could receive from a healthy
market, CBs are still doable,” one of the
persons said.
The TSE-listed company plans to use
¥40bn of the proceeds to redeem its zero-
coupon convertible bonds due in 2018 and
approximately ¥10.8bn to finance capital
expenditure on Nihombashi Takashimaya
Shopping Centre, which has undergone a
first phase of renovation and reopened last
month.
Citigroup and Morgan Stanley are joint
bookrunners and lead managers.
The deal was the second CB launched in
Japan last week, after COSMO ENERGY sealed
a ¥60bn four-year zero-coupon convertible
bond.
The Japanese oil importing company
priced the CB at a conversion premium
of 12.98% versus the indicative range of
8%–18%. The issue price is at 100% and the
offer price at 102.5%.
The TSE-listed company plans to use
¥11bn of the proceeds for its petrochemical
business and ¥49bn for renewable energy
and other businesses.
30
Mizuho is the active joint bookrunner,
while Morgan Stanley and SMBC Nikko are
passive joint bookrunners, according to a
term-sheet.
MALAYSIA
DEBT CAPITAL MARKETS
› PRASARANA HIRES FOR BOND
PRASARANA MALAYSIA has mandated five banks
to manage an offering of Islamic bonds to
raise up to M$2bn (US$483.4m).
Affin Hwang Investment Bank, AmInvestment
Bank, CIMB, Kenanga Investment Bank and
Maybank are joint lead managers for the
deal, which is expected to launch as early
as this week.
Tenors of three to 20 years will be on
offer.
The bond, backed by an irrevocable
and unconditional guarantee from the
government of Malaysia, is likely to be the
last government-guaranteed bond sale for
the year.
The state-owned public transportation
company will issue the notes off a M$10bn
sukuk murabahah programme.
SYNDICATED LOANS
› EPF CLOSES £282M REFI
Government-linked pension fund EMPLOYEES
PROVIDENT FUND OF MALAYSIA has closed a
£282.4m (US$371m) five-year refinancing
with four lenders joining in limited
syndication.
Standard Chartered is the original
mandated lead arranger and bookrunner
of the deal. The other lenders were OCBC,
which joined as MLAB, and Bank of China,
MUFG, and Sumitomo Mitsui Banking Corp,
which joined as MLAs.
The new facility, which is backed by UK-
based assets, refinances a £320m five-year
club loan that matured in July. Citigroup
was the coordinator on the previous deal,
which attracted three other banks and paid
all-ins of around 165bp–170bp.
EPF’s last loan before the latest
borrowing was a €268m (US$315m then)
new-money facility in December 2017 for
its purchase of logistics assets in Europe.
HSBC was the sole MLAB of the five-year
deal, which attracted four other lenders
in limited syndication. That financing,
split into a €156m tranche A and a €112m
tranche B, is said to have paid a top-level
International Financing Review Asia November 24 2018
all-in pricing in the 90s based on an interest
margin of 82bp over Libor.
NEW ZEALAND
DEBT CAPITAL MARKETS
› EXCELLENT LOCAL CONNECTION
Telecommunications infrastructure
company CHORUS, rated Baa2/BBB (Moody’s/
S&P), raised NZ$500m (US$340m), including
NZ$200m of oversubscriptions, for a 10-
year note offer.
The 4.35% December 6 2028s priced last
Friday at the tight end of mid-swaps plus
180bp–190bp guidance with the coupon
to be reset after five years at the then base
rate plus the margin.
ANZ was arranger and joint lead manager
for the offer with BNZ, Deutsche Craigs,
Forsyth Barr and Hobson Wealth Partners.
Chorus became the first New Zealand
corporation to issue a euro-denominated
benchmark bond in October 2016 with a
€500m (US$570m) seven-year sale, which
remains the country’s biggest offshore issue
on record outside the banking sector.
The company’s only other domestic bond
issue since it became an independent entity
in 2008 was a NZ$400m 4.12% five-year sale
in May 2016.
› HSBC PRINTS UPSIZED THREE-YEAR
HSBC, NEW ZEALAND BRANCH,rated Aa3/AA–
(Moody’s/S&P), priced a NZ$300m three-year
floating-rate note last Wednesday at the
tight end of three-month BKBM plus 77bp–
80bp guidance.
BNZ, HSBC and Westpac were joint lead
managers for the transaction, which had an
indicative minimum issue size of NZ$100m.
In March, the bank priced a NZ$300m
three-year FRN at three-month BKBM plus
75bp.
› CHRISTCHURCH NETS NZ$150M
CHRISTCHURCH CITY HOLDINGS, rated A+ (S&P),
raised the maximum NZ$150m it was
seeking from a six-year retail note offer.
Westpac was arranger and joint lead
manager with ANZ Bank New Zealand for
last Wednesday’s sale of 3.58% November
27 2024s, which priced 90bp wide of mid-
swaps, bang in the middle of the 85bp–
95bp guidance range.
On November 29 2017, Christchurch City
Holdings issued a NZ$150m 3.4% five-year
note, priced 80bp wide of mid-swaps.

PHILIPPINES
DEBT CAPITAL MARKETS
› METROBANK REOPENS NOVEMBER 2020S
METROPOLITAN BANK & TRUST COMPANY plans to
reopen its November 2020 bonds to raise
an additional Ps5bn (US$96m), according
to a filing on the Philippine Stock
Exchange.
Last month, Metrobank completed the
first bond issuance under new central bank
guidelines, selling Ps10bn of two-year notes
at 7.15%.
In a circular published on August 9,
Bangko Sentral ng Pilipinas said it would
allow banks to issue bonds without
prior authorisation, subject to certain
requirements regarding corporate
governance, risk management, capital
adequacy and other similar issues.
SYNDICATED LOANS
› MONDE NISSIN UNIT PREPS FOR DEBUT
MARLOW FOODS, a unit of Philippine food
company Monde Nissin, is raising a £123m
(US$158m) five-year borrowing, marking its
debut in the loan markets.
Citigroup is sole mandated lead arranger
Philippine bank bonds in demand
„ Bonds First issues under new guidelines beat expectations
BANK OF THE PHILIPPINE ISLANDS has priced its
inaugural fixed-rate peso bond, joining a rush
of Philippine banks in the onshore market
since the central bank made it easier for
them to sell bonds.
BPI sold Ps25bn (US$477m) 1.25-year
bonds at par with a coupon of 6.797%.
This was equivalent to 20bp over the
interpolated 1.25-year BVAL government
benchmark rate, at the tight end of 20bp–
40bp guidance.
The issuer closed the book a day ahead
of schedule after orders reached Ps38bn,
allowing it to increase the issue size from an
initial base target of Ps5bn.
BPI said in a stock exchange filing
that the issue would fund growth and
expansion, as well as help diversify its
funding sources.
The bonds are not rated, but BPI has issuer
and bookrunner of the dual-tranche deal,
which is being syndicated on a best-efforts
basis.
Marlow Foods is the borrower on the
non-recourse financing, which carries
a letter of comfort from parent Monde
Nissin.
The deal is split into a £113m amortising
term loan with an average life of four years
and a £10m revolving credit facility.
The borrowing pays an interest margin of
195bp over sterling Libor.
Banks are being invited to join on
three levels: as MLAs with tickets of
£25m or above for upfront fees of 100bp
and a top-level all-in pricing of 220bp;
as lead arrangers with commitments
of £15m–£25m for fees of 80bp and an
all-in of 215bp and as arrangers with
£10m–£15m with fees of 65bp for an
all-in of 211.25bp.
Bank meetings were held in Manila and
Taipei last week. The deadline for responses
is December 12.
Proceeds will be used for capital
expenditure, refinancing of shareholder
loans and general corporate purposes.
Marlow Foods owns vegetarian and vegan
food manufacturer Cauldron Foods and
meat-substitute producer Quorn Foods,
both of which are based in the United
Kingdom.
Monde Nissin acquired Quorn Foods in
October 2015 from Exponent Private Equity
and Intermediate Capital Group for £550m.
At the time, Banco de Oro Unibank, Bank
ratings of Baa2/BBB– (Moody’s/Fitch).
HSBC was sole lead manager and
bookrunner. BPI Capital and HSBC were
selling agents.
METROPOLITAN BANK & TRUST COMPANY
(Metrobank) this month completed the first
issuance under the new guidelines, selling
Ps10bn of two-year bonds at 7.15%.
The deal drew orders of Ps19.6bn,
prompting the issue to be increased from a
target size of Ps2bn.
Standard Chartered was sole arranger,
as well as selling agent and market maker.
Metrobank and First Metro Investment were
the other selling agents, while Union Bank of
the Philippines was also a market maker.
Metrobank said last week it planned to
reopen the bonds to raise an additional
Ps5bn.
In a circular published on August 9,
International Financing Review Asia November 24 2018
COUNTRY REPORT PHILIPPINES
of the Philippine Islands and Metropolitan
Bank & Trust Co provided a US$650m
seven-year loan to finance the acquisition.
› HC CONSUMER FINANCE DRAWS FUNDS
HC CONSUMER FINANCE PHILIPPINES drew funds
from a Ps6.5bn (US$124m) one-year bullet
term loan on November 8.
ING Bank and Land Bank of the Philippines
were the mandated lead arrangers and
bookrunners of the financing, which
attracted six other banks. The amount was
increased from the launch size of Ps5bn
due to oversubscription.
The facility comprises a Ps4.75bn tranche
A and a Ps1.75bn tranche B. The interest
margins are 325bp and 425bp over BVAL
for tranches A and B, respectively.
Parent Home Credit Group is providing a
guarantee for tranche A.
Banks were invited to join tranche A as
MLAs with commitments of Ps1bn or more
for a top-level all-in pricing of 360bp via
an upfront fee of 35bp, as lead arrangers
with Ps500m–Ps999m tickets for an all-in of
350bp via a 25bp fee and as arrangers with
commitments of less than Ps500m for an
all-in of 340bp via a 15bp fee.
For the respective commitment levels,
tranche B paid all-ins of 480bp, 470bp and
460bp for upfront fees of 55bp, 45bp and
35bp.
Rizal Commercial Banking Corp is the facility
agent. Signing was on October 19.
For full allocations, see www.ifrasia.com.
Bangko Sentral ng Pilipinas said it would
allow banks to raise bonds without prior
authorisation, subject to certain requirements
regarding corporate governance, risk
management, capital adequacy and other
similar issues.
Although banks were not formally
prevented from issuing bonds before,
permission was difficult to obtain and most
banks preferred issuing long-term negotiable
certificates of deposit (LTNCDs) to their
depositors – an easier option as this type
of paper is in high demand and enjoys tax
exemptions.
BPI also made its debut in the offshore
bond market in August, with a US$600m
five-year senior trade that priced at
Treasuries plus 160bp and closed three times
subscribed.
DANIEL STANTON
31

SINGAPORE
DEBT CAPITAL MARKETS
› DBS IN DOLLAR COVERED RETURN
DBS BANK last Monday priced a US$1.25bn
three-year covered bond offering at mid-
swaps plus 31bp, inside initial guidance of
33bp area, achieving a broader distribution
than its previous dollar trade.
Final orders were over US$1.5bn from 38
accounts. European investors bought 66%
of the 144A/Reg S bonds, Asian accounts
took 21% and US investors 13%. By investor
type, central banks and banks booked a
combined 74%, fund managers 22% and
corporate investors, insurers and private
banks took a combined 4%.
That distribution marked a big change
from DBS’s last dollar covered bond
offering under the 144A format, its debut
deal in 2015. In that trade, Asian investors
bought 51% of the bonds, with EMEA and
Hyflux seeks nod for Indonesian rescue
„ Restructuring Bondholders nervous over plan for super priority debt
A proposed strategic investment by two
Indonesian companies in cash-strapped
HYFLUX looks set to gain regulatory approval
in Singapore, after a government minister
welcomed foreign investment in the city-
state’s water infrastructure.
Indonesia’s Salim Group and Medco
Group said in late October that they would
invest S$400m (US$290m) in equity and
provide S$160m of loans in a financing
that would require approvals from various
regulatory agencies, including the Public
Utilities Board. The package includes a
S$30m working capital loan that would
help alleviate Hyflux’s short-term liquidity
issues.
There was uncertainty that the government
would allow foreign investors to acquire
stakes in companies supplying potable water
in the island republic.
But Environment and Water Resources
Minister Masagos Zulkifli said last Tuesday
in a written response to a question in
Parliament that adequate measures were
in place to ensure supply would not be
disrupted in water supply projects granted
to private sector participation via the design,
build, own and operate scheme.
“It is a top strategic priority of the
32
the US taking 30% and 19%, respectively.
Banks accounted for 62% of allocations in
the debut transaction.
“Since the first covered bond, investors
have got more familiar with DBS, albeit in
different currencies,” said a source close to
the deal. DBS has printed covered bonds in
euros and Australian dollars since its first
US dollar trade.
Bayfront Covered Bonds is guarantor for
the bonds, which are backed by Singapore
dollar-denominated residential mortgages.
The benchmark offering is expected to
be rated Aaa/AAA (Moody’s/Fitch).
Canadian covered bonds were used as
price references, with Royal Bank of Canada
and Toronto-Dominion Bank’s 2021 covered
bonds seen at around mid-swaps plus 27bp
in secondary, and their new issues expected
to pay 30bp–31bp.
DBS, Barclays, HSBC, ING, TD Securities and
UBS were joint bookrunners.
› UOL DOUBLES PROGRAMME SIZE
Property owner UOL GROUP has doubled the
size of its multi-currency MTN programme
government to keep our taps flowing,” he
wrote.
Masagos said the government could not
comment on the Hyflux case, but he welcomed
participation from both local and foreign
companies to deliver cost-effective solutions.
Investors and analysts took the statement
as a sign that the government was unlikely
to block a potential Indonesian investment in
Hyflux, a key supplier of Singapore’s drinking
water.
There was a mixed reaction from investors
holding S$265m of Hyflux’s senior bonds and
S$900m of preference shares and perpetual
notes. While some said the minister’s response
was positive, others were disappointed that the
government was not stepping in to take over
the water supply plants perceived as strategic
to national security.
Hyflux’s creditors still face an uncertain
future, with the fate of its loss-making power
and water plant in Tuaspring still unclear.
In early November, Hyflux said Malayan
Banking, the sole secured creditor of a
S$720m loan for the Tuaspring project, had
agreed to extend a deadline to execute a
binding agreement with a successful bidder
or investor up to and including November 29.
This suggests that Maybank may still push
International Financing Review Asia November 24 2018
to S$2bn (US$1.46bn).
The programme was established in
November 2014 via its funding vehicle
UOL Treasury Services with the parent
providing an unconditional and irrevocable
guarantee.
UOL Treasury has not raised any funds
in the Singapore dollar bond market since
September 2016, when it sold S$240m four-
year notes. The 2.5% notes will mature in
2020.
United Overseas Bank is arranger and dealer
for the programme.
SYNDICATED LOANS
› MERCURIA INCREASES FINANCING
Mercuria Energy Trading has increased a
financing to US$1.35bn from US$1bn.
ANZ, Bank of China Singapore branch,
Rabobank Singapore branch, DBS Bank, Emirates
NBD Capital, Industrial & Commercial Bank
of China London branch, ING Bank Singapore
branch, Mizuho Bank, MUFG, OCBC Bank,
Societe Generale and Sumitomo Mitsui Banking
for a potential sale, potentially against the
interests of the Indonesian group.
“Hyflux appears to be receiving little
support from current creditors,” noted OCBC
analysts in a research note. “This includes
Maybank, which agreed to a short-term
extension only until the end of November
(to) find a buyer, effectively emphasising its
sole right to decide whether or not Tuaspring
stays within the Hyflux group.”
Singapore’s High Court is due to rule on an
extension of a moratorium on claims against
Hyflux on November 26, and will also hear an
application for a super priority debt to secure
certain assets to the Indonesian investors’
proposed working capital loan.
Bondholders are concerned about
the proposed super priority debt, which
essentially gives the Indonesian investors
first priority fixed charges over all of Hyflux’s
ordinary shares in HyfluxShop Holdings, all of
HufluxShop’s perpetual preference shares, all
of Hyflux’s shares in Spring China Utility and
in NewSpring Utility.
This may eventually reduce recoveries to
all bondholders and other creditors in an
event of liquidation since super priority debt
will have the first claim on these assets.
KIT YIN BOEY

Corp Singapore branch are the bookrunning
mandated lead arrangers of the borrowing,
which has attracted 24 other lenders.
MERCURIA ENERGY TRADING PTE LTD and MERCURIA
ASIA GROUP HOLDINGS are the borrowers, while
their ultimate holding company MERCURIA
ENERGY GROUP is providing irrevocable and
unconditional guarantees.
At launch, the deal comprised a US$500m
one-year multi-currency revolving credit
portion (Facility A), a US$200m one-year
revolver and swingline facility (Facility B), and
a US$300m three-year revolver (Facility C).
The tranches have now been increased
to US$710m-equivalent, US$240m and
US$400m, respectively, and US$255m-
equivalent of Facility A can be drawn in
renminbi or US dollars.
Facility A pays an interest margin of 65bp
over Libor, while facility B pays 65bp for
the revolver and 110bp for the swingline
option. Facility C pays a margin of 125bp.
Proceeds will be used to refinance
a US$780m syndicated revolver from
November 2017 and amend and extend
a US$260m Facility C of a US$925m
syndicated revolver from November 2016.
Excess funds will be used for general
corporate purposes and working capital
requirements.
For full allocations, see www.ifrasia.com.
RESTRUCTURING
› ASL PLANS THIRD MEETING
ASL MARINE HOLDINGS will hold an informal
meeting with bondholders on December
5, the third such session on its request to
amend the terms of its bonds as part of a
debt restructuring exercise.
The cash-strapped Singaporean offshore
marine services provider plans to hold
a consent solicitation to ask investors
holding its outstanding 4.75% 2020s (series
6) and 5.35% 2021s (series 7) to extend the
maturities and reduce the coupons. The
original size of both bonds was S$150m
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(US$109.2m) but this was reduced to
S$142.5m in October and currently stands
at S$140m, according to its results for the
fiscal first quarter that ended September
30.
At the second bondholder meeting on
October 29, ASL proposed to push the
maturity out by five years, lower the
principal sum amortisation, reduce the
coupons to 2.5% and lift certain covenants.
In return, ASL planned to give
bondholders one warrant for each S$1 in
principal amount of notes held.
A loosening of the terms would help ASL
win over banks to restructure loan facilities
as well. Banks are being asked to reprofile
loans to match the company’s cashflows,
extend credit lines of S$150m to scale up its
shipyard business, set interest rate spreads
at 2.0%–2.5% and relax or lift certain
covenants.
ASL said it was still viable despite
S$199m of order cancellations, but required
more time to fully meet debt obligations.
To win more projects and ensure liquidity,
the company needs project and working
credit lines from banks, but banks want
similar support from bondholders.
ASL has total debt of about S$545.8m.
› SWIBER SEEKS LONGER SHELTER
Beleaguered SWIBER HOLDINGS and subsidiary
SWIBER OFFSHORE CONSTRUCTION have applied to
the Singapore High Court to extend their
judicial management shelter to December 31.
Judicial managers for the companies
appointed on October 6 2016 are also
asking for an extension to May 31 2019 to
send restructuring proposals to creditors
and hold a creditor meeting.
The court will hold a hearing on the
applications on January 10 2019.
Swiber, which defaulted on S$550m
of bonds two years ago, signed a term-
sheet in October for potential strategic
investor Seaspan, a NYSE-listed owner and
operator of container ships, to invest up to
US$200m.
International Financing Review Asia November 24 2018
COUNTRY REPORT SOUTH KOREA
Swiber is an offshore construction and
services group based in Singapore.
EQUITY CAPITAL MARKETS
› KBS US REIT DELAYS IPO TO NEXT YEAR
KBS US PRIME REIT has pushed back an up to
US$1bn Singapore Exchange IPO to next year
because of lukewarm demand caused by
concerns over rising rates in the US, people
with knowledge of the transaction said.
The REIT was earlier looking at a launch
in October.
Investors are looking at a yield of around
8% while the issuer is looking at 7.0%–7.5%.
The REIT will comprise US commercial
assets. KBS Realty is the sponsor.
Other US REITs listed on the SGX are
performing weakly, with the Keppel-KBS
US REIT dropping 32% year to date and
Manulife US REIT down 14%.
Bank of America Merrill Lynch and DBS are
leading the transaction and OCBC Bank,
Maybank and Mizuho are likely to join in
junior roles.
KBS will be the second sponsor after
Manulife to list purely US assets through
a Singapore trust. Manulife US REIT raised
US$470m from an SGX IPO in 2016.
SOUTH KOREA
DEBT CAPITAL MARKETS
› AIR BUSAN RECEIVES LISTING APPROVAL
Low-cost carrier AIR BUSAN has won approval
from the Korea Exchange for a December
listing of up to W20.8bn (US$18.3m), a
person close to the matter said.
The offering will comprise 5.21m shares
(40% primary/60% secondary). The indicative
price range has been set at W3,600–W4,000
33
a share, putting the offering size at
W18.7bn–W20.8bn.
About 60% of the offering will go to
institutional investors and 20% to retail
buyers. The remaining 20% will be allocated
to the employee stock ownership plan.
Books will be open on December 13
and 14 and subscription will take place on
December 18 and 19.
The shares are expected to start trading
on December 27.
Founded in 2007, the carrier is a
subsidiary of Asiana Airlines. It posted a net
profit of W28.5bn on sales of W561.7bn last
year.
Mirae Asset Daewoo and NH Investment &
Securities are lead managers.
› HYUNDAI CAPITAL HIRES FOR NDR
HYUNDAI CAPITAL SERVICES(Baa1/BBB+/BBB+) has
mandated ANZ, Bank of America Merrill Lynch
and Credit Agricole to arrange fixed income
investor meetings in Asia, Australia, Europe
and the US from November 28.
The announcement did not mention any
plans for a bond deal.
Hyundai Capital provides consumer
financial services including auto financing.
Formosa Plastics tightens pricing
„ Loans Units of conglomerate tap different pools of liquidity
Taiwanese conglomerate Formosa Plastics
Group is offering tighter pricing for three
financings in the market, totalling up to
US$2bn, compared to what it offered on
previous visits to the loan market.
Bank of Taiwan, First Commercial Bank and
Mega International Commercial Bank are the
mandated lead arrangers and bookrunners
on a US$700m seven-year loan for FORMOSA
HA TINH (CAYMAN), a special purpose vehicle of
Formosa Plastics.
MUFG and Standard Chartered are the
MLABs on another US$700m five-year loan
for Formosa Ha Tinh (Cayman) targeting
foreign lenders.
The two loans have unspecified greenshoe
options but cannot exceed a combined
amount of US$1.5bn.
Meanwhile, Chang Hwa Commercial Bank
and E. Sun Commercial Bank are the MLABs
on a five-year loan of up to US$500m for
FORMOSA HA TINH STEEL. The facility has a base
size of US$400m.
The US$700m seven-year loan offers
an interest margin of 110bp over Libor. The
borrower will pay any excess interest rate
beyond a 35bp difference between TAIFX and
34
Hyundai Motor Group held a 79.8% stake as
of June 30.
› KEXIM PRINTS DUAL TRANCHE
The EXPORT-IMPORT BANK OF KOREA last Monday
priced US$1bn of SEC-registered senior
unsecured bonds in two tranches.
A US$500m three-year fixed-rate
tranche priced at Treasuries plus 67.5bp,
from initial guidance of 90bp area, and a
US$500m five-year tranche at Treasuries
plus 87.5bp, from 110bp area.
Combined orders were over US$2.9bn.
EMEA investors booked 60% of the three-
year bonds, Asian accounts 25% and US
investors 15%. By investor type, central
banks and sovereign wealth funds took a
combined 70%, asset managers 15%, banks
14% and others 1%.
In the five-year tranche, EMEA took 55%,
Asia 30% and the US 15%. Central banks
and sovereign wealth funds took half, asset
managers 30% and banks 20%.
The notes have expected ratings of Aa2/
AA/AA–, in line with the issuer.
Bank of America Merrill Lynch, Credit Agricole,
Daiwa, HSBC, Mizuho and Standard Chartered
were joint bookrunners.
Libor. Banks are being invited to join the deal
as MLAs or co-arrangers with commitments
of US$100m–$150m or US$10m–$99m for
an upfront fee of 25bp. The deadline for
responses is December 28.
The US$700m five-year deal offers a
margin of 100bp over Libor. Banks are being
invited to join for an upfront fee of 25bp.
The up to US$500m five-year facility
offers a margin of 105bp over Libor. The
borrower will pay any excess interest rate
beyond a 35bp difference between TAIFX
and Libor. Banks are being invited to join as
MLAs or co-arrangers with commitments
of US$100m–$120m or US$10m–$99m for
an upfront fee of 25bp. The deadline for
responses is December 28.
Eleven shareholders of Formosa Ha Tinh
(Cayman) are the guarantors on the two
loans of up to US$1.5bn. The guarantors
include parent Formosa Plastics and its
subsidiaries, and also China Steel and Tokyo-
based JFE Steel. Four Formosa Plastics
units are providing a letter of comfort for the
Formosa Ha Tinh Steel deal.
The up to US$500m deal is for capital
expenditure, refinancing and working capital
International Financing Review Asia November 24 2018
› KEB HANA THINKS SUSTAINABLY
KEB HANA BANK (A1/A+/A–) has mandated Bank
of America Merrill Lynch, HSBC, JP Morgan and
UBS to arrange investor meetings in Europe
and the US from November 26.
A US dollar 144A/Reg S Sustainability
bond transaction with a short to
intermediate maturity may follow, subject
to market conditions.
TAIWAN
SYNDICATED LOANS
› CHAILEASE INCREASES DEAL TO US$250M
Leasing services provider CHAILEASE
INTERNATIONAL FINANCE has increased a three-
year loan to US$250m from the US$150m
target after exercising the deal’s US$100m
greenshoe option.
Taishin International Bank was the original
mandated lead arranger and bookrunner,
while Bank Sinopac, DBS Bank and Taiwan
purposes, while the two loans of up to
US$1.5bn for Formosa Ha Tinh (Cayman) are
to refinance a US$1.5bn five-year loan that
Formosa Group (Cayman) raised in February
2015 to back the capital expenditure
requirements of a steel mill project in
Vietnam.
The US$1.5bn deal from 2015 paid a
margin of 135bp over Libor and a top-level
fee of 24bp.
Formosa Plastics last tapped the loan
market in 2016 via Formosa Ha Tinh
(Cayman) for two loans totalling US$3.38bn.
BoT, DBS, Hua Nan Commercial Bank,
Mega and Taipei Fubon were the MLABs on
a US$2.1bn seven-year loan completed in
May 2016, while Bank of China (Hong Kong),
Mizuho Bank and Sumitomo Mitsui Banking
Corp were the MLABs on a US$1.28bn five-
year facility from August 2016.
The US$2.1bn loan offered a margin of
158bp over Libor. The borrower would pay
any excess interest rate beyond a 35bp
difference between TAIFX and Libor. The
US$1.28bn loan offered a margin of 140bp
over Libor.
EVELYNN LIN

Business Bank came in with the same title.
The facility offers an interest margin of
140bp over Libor.
Banks joining as MLABs were offered a
top-level upfront fee of 25bp. Signing was
on November 15.
Taiwan-listed Chailease Holding is the
guarantor. Funds are for refinancing and
working capital purposes.
In late October, Chailease International
Finance signed a Rmb2.015bn (US$290m)
three-year term loan with 10 banks. Mizuho
Bank (China) was the sole MLAB of that
loan, which pays a margin of 120% of the
PBoC rate and a top-level participation fee
of 25bp.
For full allocations, see www.ifrasia.com.
› YI KAO INVESTMENT RAISES NT$5BN
YI KAO INVESTMENT has raised a NT$5bn
(US$162m) five-year loan from 14 lenders.
Taishin International Bank was the sole
mandated lead arranger and bookrunner
of the deal, which has a NT$4bn revolving
credit tranche A and a NT$1bn bill facility
tranche B.
Funds are for refinancing purposes.
Yi Kao Investment last tapped the loan
market with a NT$6bn three-year loan in
November 2015. Taishin International Bank
was also the MLAB on that deal, which
comprises a NT$4.9bn tranche A and a
NT$1.1bn tranche B, according to LPC data.
Yi Kao Investment holds a 2.91% stake in
CTBC Financial Holding.
For full allocations, see www.ifrasia.com.
THAILAND
DEBT CAPITAL MARKETS
› MINOR PLANS GUARANTEED BONDS
MINOR INTERNATIONAL mandated banks to
arrange investor meetings in Singapore and
Hong Kong, as well as a global investor call,
from November 20.
ANZ and HSBC are joint global
coordinators, as well as bookrunners with
Mizuho and Standard Chartered.
An offering of US dollar senior
capital securities under Reg S, with an
unconditional and irrevocable guarantee
www.ifrasia.com
from BANGKOK BANK, may follow, subject to
market conditions.
The guarantor is rated Baa1/BBB+/BBB+.
The securities will have a mandatory
acquisition obligation allowing them to be
called in year three.
This year, hotel and restaurant operator
Minor increased its stake in Spain’s NH Hotel
Group to 94%. Fitch wrote on November
14 that Minor had already raised Bt15bn
(US$455m) to finance the acquisition.
› LAOS RETURNS FOR BAHT
The LAO PEOPLE’S DEMOCRATIC REPUBLIC, rated
BBB+ by Tris, will invite investors to
subscribe to a four-tranche bond at end-
November to raise up to Bt7bn.
A three-year tranche was priced at par to
yield 4.3%, a five-year tranche will pay 5%,
a 10-year piece will pay 6% and a 12-year
tranche will yield 6.45%.
As the deal will be targeted at mainly
high-net-worth investors, Laos priced
the bonds before marketing. The size of
each tranche will be finalised after the
completion of the subscription period from
November 26 to 28.
Bangkok Bank and Thanachart Bank are joint
lead managers for the deal.
The sovereign obtained approval
from Thailand’s Ministry of Finance in
September to issue bonds of up to Bt7bn
from September 1 2018 to May 31 2019.
A portion of the proceeds will be
converted into US dollars in accordance to
the Thai government’s policies, which will
require Laos to convert the monies on the
onshore foreign currency market. These
funds will be used for investment purposes
in Laos.
Another portion of the proceeds will be
used to refinance a Bt2.566bn five-year note
maturing on December 4.
› TLT PLANS BAHT FORAY
TOYOTA LEASING THAILAND is planning to
offer up to Bt6bn in bonds to wrap up its
fundraising programme for the year.
Books are scheduled to open on
December 7.
The Thai auto leasing company has raised
Bt18bn in three visits to the baht bond
market to date this year.
Bangkok Bank, Bank of Ayudhya, Kasikornbank
and Krungthai Bank are joint lead managers
for the latest transaction.
International Financing Review Asia November 24 2018
COUNTRY REPORT VIETNAM
TLT and its bonds are rated AAA by Tris.
The bonds are guaranteed by parent company
Toyota Motor Finance Netherlands, whose
ultimate parent is Japan’s Toyota Motor.
EQUITY CAPITAL MARKETS
› SPRIME FILES FOR REIT IPO
S PRIME GROWTH LEASEHOLD REAL ESTATE INVESTMENT
TRUST (SPRIME) has filed for a Stock
Exchange of Thailand IPO.
The offering size is not yet known but
the fund size is up to Bt5.7bn (US$174m).
The sponsor is Singha Estate, an investor
and real estate developer under Boonrawd
Brewery Group.
The REIT will comprise a 30-year
leasehold right at the Suntowers office
complex in Bangkok. The REIT is awaiting
regulatory approval for the IPO. Up to
446.8m units will be sold.
Krungthai Bank is the financial adviser.
VIETNAM
SYNDICATED LOANS
› BIDV CLOSES US$300M FACILITY
JOINT STOCK COMMERCIAL BANK FOR INVESTMENT &
DEVELOPMENT OF VIETNAM has closed a US$300m
financing after attracting 12 banks in
general syndication.
Asian Development Bank was the sole
mandated lead arranger and bookrunner of
the facility, which consists of a US$200m A
loan and a US$100m B loan. ADB provided
the A loan, while only the B loan has been
syndicated.
The B loan comprises a US$30m three-
year tranche B1 and a US$70m five-year
tranche B2. The interest margins are 110bp
and 160bp over Libor, respectively, for
the three and five-year portions, and the
average lives are 2.5 years and 3.15 years,
respectively.
Lenders were offered a top-level fee of 50bp
for all-ins of 130bp and 173.3bp, respectively,
for the three and five-year tranches.
Vietnam’s government holds a majority
stake in the borrower.
For full allocations, see www.ifrasia.com.
35
 ASIA DATA
ASIAN SYNDICATED LOAN PIPELINE UPDATES WEEK OF 19 NOVEMBER
Company Currency Size (m) Margin (All-in) Tenor (mths) Facility Arrangers
Australia
Epic Energy Australia A$ 300 60 Revolver/Term Loan CBA, Mizuho, BTMU, NAB, ANZ
China
Youyuan International Holdings US$ 120 320 (395) 42 Term Loan HSBC
Hong Kong
Beijing Enterprises Group (BVI) HK$ 4,500 113 (120) 60 Term Loan DBS, Mizuho, ANZ, BoC, Communications
Hong Kong Hung Yun International Holdings US$ 150 (300) 36 Term Loan DB
Trivium Investment HK$ 2,865 375 58 Term Loan Bank of East Asia, Cathay Financial Holdings,
Fubon Financial Holding, GS, CTBC
HK$ 200 375 (427) 58 Revolver/Line >= 1 Yr. GS, Cathay Financial Holdings, Bank of East Asia, CTBC,
Fubon Financial Holding
HK$ 390 400 58 Term Loan CTBC, SMFG, HSBC, Cathay Financial Holdings, GS
Indonesia
Balikpapan-Samarinda Toll Road Rp 6,900,000 180 Revolver/Term Loan Bank Mandiri Persero
Semen Indonesia (Persero) Tbk US$ 625 160 24 Bridge Loan DB, SCB, BNP, Malayan Banking, BTMU
[ex-PT Semen Gresik (Persero) Tbk]
US$ 625 160 24 Bridge Loan DB, BNP, BTMU, SCB, Malayan Banking
Singapore
Cache Logistics Trust S$ 200 132 (145) 65 Term Loan DBS
S$ 65 132 (145) 65 Revolver/Line >= 1 Yr. DBS
Keppel Infrastructure Trust S$ 750 12 364-Day Facility
A$ 532 60 Revolver/Term Loan
Taiwan
950 Property LLC US$ 232 36 Term Loan CTBC, Ind Bk of Taiwan
Clevo Co NT$ 4,000 65 60 Term Loan TCB
NT$ 1,000 65 60 Revolver/Line >= 1 Yr. TCB
NT$ 1,000 65 60 Guarantee TCB
Foxconn Interconnect Technology US$ 300 85 (85) 36 Term Loan Mizuho
US$ 200 90 (94) 36 Term Loan Mizuho
Source: Refinitiv data LPC

MERRILL LYNCH ASIAN DOLLAR INDEX

Index Description Index level 1 week total return 1 month total return 3 months total return OAS
ADIG Asian-dollar high-grade index 383.805 0.018 0.210 –0.894 161
ADHY Asian-dollar high-yield index 581.240 –0.485 –2.458 –2.498 696
AGIG Asian-dollar government high-grade index 354.269 –0.011 0.202 –1.419 140
AGHY Asian-dollar government high-yield index 693.189 –0.364 –2.560 –2.807 482
ACIG Asian-dollar corporate high-grade index 410.021 0.026 0.210 –0.727 169
ACHY Asian-dollar corporate high-yield index 476.646 –0.511 –2.440 –2.438 741
Source: Merrill Lynch

LAST WEEK’S EQUITY-LINKED ISSUANCE

Issuer Country Date Amount Greenshoe Maturity Coupon (%) Premium (%) Bookrunner
Takashimaya Japan 21/11/2018 ¥60bn 10 years 0 15.04% Citigroup, Morgan Stanley
Cosmo Energy Japan 20/11/2018 ¥60bn 4 years 0 12.98% Mizuho, Morgan Stanley, SMBC Nikko 
Source: IFR Asia

LAST WEEK’S ECM DEALS

Stock Country Date Amount Price Deal type Bookrunner(s)
Tongcheng-Elong China 21/11/2018 HK$1.41bn HK$9.80 IPO (primary) CMB International, JP Morgan and Morgan Stanley
Babytree Group China 21/11/2018 HK$1.7bn HK$6.80 IPO (primary) China Merchants Securities, Haitong International,Morgan Stanley
Source: IFR Asia

36 International Financing Review Asia November 24 2018

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