NOVEMBER 2 2019 ISSUE 2307 www.ifre.

com

Stakes are high as Casino rolls the dice

on €750m senior secured offering

ESG loans come to Russia, as Rusal increases

pre-export financing to US$1.085bn

Battle brews over Budweiser fees: JP Morgan

and Morgan Stanley set for outsized payday

EMERGING MARKETS BONDS PEOPLE & MARKETS EQUITIES

Lebanon on a Strength of Deutsche looks Blowout Cellnex
knife edge, as ECB QE restart to recapture lost rights issue
deposit base surprises in ground in bond attracts €100bn
crumbles covered bonds underwriting of orders
06 09 10 13
Upfront
„ OPINION INTERNATIONAL FINANCING REVIEW

Euro fever ANDûORDEREDûTHEûCOMPANYûTOûOUTlTûITSûPLANTûWITHûhSCRUBBERvû

technology that will cost hundreds of millions of dollars.

E uropean bond investors can expect a surge of Chinese

issuance in the single currency.
#HINAûISûDAYSûAWAYûFROMûPRICINGûITSûlRSTûEUROûBONDûISSUEû
ESG risks are certain to become more acute over coming
years as governments and regulators respond to what is
clearly a climate emergency. The potential for sweeping rule
since 2004, with the celebration dinner already booked for
Paris on Wednesday.
The €3bn–€4bn deal is sure to be a hit in Europe, where the
LASTû#HINESEûSOVEREIGNûBONDûOFFERINGûINûEUROSûMATUREDûlVEû
years ago. Even if the Chinese economy may be slowing, the
rarity value alone should ensure a tight print.
4HEûREALûSIGNIlCANCEûOFûAû#HINESEûSOVEREIGNûISSUEûLIESûINû
the message it sends. In US dollar terms, a euro bond issue is
still likely to be a little more expensive after swaps (despite
the lower euro coupons), so the decision to venture into
euros signals that China sees value in diversifying away from
the ever-powerful greenback.
The tranching is also important. Rather than a single-tenor
blockbuster, China is aiming to create a curve in euros going
out as far as 20 years. That will set a useful benchmark for
Chinese corporate issuers to follow suit.
The logic here is compelling. Chinese companies are
increasingly turning to Europe in search of expansion
opportunities, and US suspicion of China will only accelerate
that shift. Better access to the euro debt market will help
#HINESEûISSUERSûRElNANCEûTHEIRûEXISTINGû%UROPEANû
CHANGESûBIGûlNESûANDûHUGEûDISRUPTIONûTOûBUSINESSûMODELSûISû
very real.
Certain sectors are more exposed than others. Oil is an
obvious target, and the risk to investors is that the equities,
bonds and loans they own in the sector could become
stranded assets as business models are disrupted – or even
stopped altogether.
One estimate states that the energy sector could be left
with US$4trn of stranded assets. While it is hard to forecast
accurately, one thing is sure: current market prices don’t
factor this in fully.
Sour beer
H ong Kong’s biggest IPO of the year is leaving many of the
underwriting banks with a sour taste. Shaking up
syndicate structures, however, is no bad thing.
A group of bookrunners on the Budweiser Brewing APAC
listing found out last week that their split of the US$144m
fee pool will be far lower than expected, after the two
ACQUISITIONSûANDûlNANCEûNEWûONES
There is a limit, however. While China’s biggest state-owned
issuers have reined in their US dollar bond sales over the past year,
others have doubled down. Property developers now account for
almost a third of this year’s Asia G3 bond sales, after an
unprecedented US$40bn binge so far this year – all in US dollars.
Private-sector companies are also rushing to tap the US
equity market before the end of the year, with at least half a
sponsors pocketed a US$57m brokerage commission that is
traditionally shared around the syndicate.
IPO sponsors outrank the rest of the underwriters on Hong
Kong listings, and can expect to earn higher fees in
recognition of the additional responsibilities of preparing a
company for a public offering. Given the regulatory scrutiny
now placed on the sponsor role, that is entirely fair.
In recent years, though, intense competition has led to
dozen Chinese IPOs due to hit the market in the next two SWOLLENûSYNDICATESûWHEREûDOZENSûOFûBROKERSûlGHTûFORûAûSHAREû
months, and twice that number in the pipeline. of league table credit and a slice of the fees, and it is often
!ûBITûOFûDIVERSIlCATIONûISûWELCOMEûBUTû#HINAûISûNOTûABOUTû
to give up on the US dollar any time soon.
In the pits
U S investors, who have for years lagged behind their
European counterparts in their sensitivity towards
unclear to investors who is supposed to be doing what.
To add to the chaos, payouts are only decided after the fact,
in a jump-ball contest where underwriters routinely try to
take credit for bringing in the most important shareholders.
Budweiser’s IPO followed that familiar pattern, but it is
also a step towards a cleaner recipe. When the beer giant
ENVIRONMENTALûSOCIALûANDûGOVERNANCEûISSUESûSEEMûlNALLYûTOû
be waking up to the risk that climate change might pose to
their portfolios.
Bankers say that US investors have begun to push back on
some exposed names – particularly utilities – in recent
months. They highlight a deal for an Ameren coal power
plant in Missouri that was priced wide of its parents’ bonds
with a book substantially lower.
That hesitation proved prescient: just days after the deal, a
federal judge found the plant in violation of the Clean Air Act
International Financing Review November 2 2019
returned to the market with its second listing attempt in
mid-September, it was clear to everyone that JP Morgan and
Morgan Stanley were leading the show.
ESR Cayman’s relaunch was an even more stark example,
with even some of the joint bookrunners unaware of the
details until Morgan Stanley sent out the term sheet.
IPO underwriters deserve to be paid for the work they do,
whether it is working with regulators, designing the
marketing strategy or actually selling the stock. But to
incentivise all parties – and avoid any nasty surprises –
issuers should surely make clear the fee structure in
advance.
1
 CA
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Top news
Lebanon on a knife edge 06 Battle brewing over Bud fees 07 AT1 fires on despite sensitivity 08

Stakes high as Casino rolls out

senior secured offering
„ Bonds Investors focus on dividend restrictions and management issues

BY CHRIS MOORE
The stakes could hardly be higher
for CASINO as it meets investors
before trying to sell a €750m senior
secured high-yield bond issue, one
LEGûOFûAûõBNûRElNANCINGûTOû
extend debt maturities that it hopes
will buy enough time to allow it to
sell off assets and delever.
The corporate picture remains
muddied by investment vehicle
also be creditors of Rallye, which
has relied on dividends from
Casino to service debt.
“There’s a huge vested interest
from the existing French lenders
to make sure that Casino lives
another day with this extension of
liquidity,” said one investor.
Moody’s, which downgraded
Casino by one notch to B2 on
October 23 and says it will
downgrade it by another notch if
challenging and the execution of
the company’s strategy requires
the full attention of Casino’s
board and management team”.
Another investor said: “At some
point the company will have to
act on this. The fact we see this in
the Moody’s report shows people
really care about this issue at the
moment – the company is not
listening to investors.”
Casino could not be contacted
which owns €1bn of real estate
assets in France.
Casino itself is rated B2/B (neg
watch/neg).
Global coordinators and joint
books are BNP Paribas, Credit
Agricole, Credit Suisse, HSBC, JP
Morgan and Natixis. Bank of America,
CM-CIC, Goldman Sachs, Santander
and Societe Generale are joint books.
There is no price guidance yet
for the bonds. A roadshow started
Rallye, which owns a 51% stake
INû#ASINOûANDûlLEDûFORûPROTECTIONû
from creditors in May.
The French retailer is also in
the market with a €750m Term
Loan B, and is working on
extending a €2bn revolving
THEûRElNANCINGûFAILSûTOOKûTHEû
unusual step of commenting on
the position of Casino chief
executive Jean-Charles Naouri.
Naouri is also chairman of
Rallye, something Moody’s says
“is credit negative because it
for comment.
NEW DEBT
JP Morgan is sole physical
bookrunner for the 4.25-year
senior secured bonds, which are
callable after two years. The
last Thursday and will end on
Tuesday, ahead of expected
pricing on Thursday this week.
The covenant-lite €750m 4.25-
year Term Loan B is also due to
be priced on Thursday. It is
guided at 550bp over Euribor
credit facility to 2023. Market could likely distract bond issue is rated B1/B+ and WITHûAûûmOORûANDûAûû/)$ûANDû
participants say many of the management at a time when the secured by shares of includes 103, 101, par call
banks providing that facility will French market remains Immobiliere Groupe Casino, protection.

Strength of ECB QE restart surprises in covereds

„ Bonds Bigger-than-expected orders boost covered bonds; impact on corporates less obvious the interest of other investors on
expectations the deals will
BY TOM REVELL, ED CLARK, The Eurosystem was also out $+"SûDEALûWASûITSûlRSTûINûTHEû perform strongly.
ROBERT HOGG in force in secondary markets so-called “blue social” format, “There is now an excellent
The European Central Bank
kicked off a new, open-ended era
of asset purchases last
Wednesday, heralding a time of
plenty for European bond issuers.
The return in force of the ECB
to the covered bond primary
market boosted deals from
DEUTSCHE KREDITBANK and BPCE,
providing a jolt in momentum
that helped both deals over the
line in short order.
Analysts had forecast the
Eurosystem’s bid for eligible
eurozone covereds would increase
to around 30% at most. But bankers
involved in Wednesday’s deals said
the bids came in at around 40%.
“The ECB are buying at
hilarious levels,” said one
covered bond syndicate banker.
4 International Financing Review November 2 2019
lRSTûTHINGûONû7EDNESDAYûACROSSû
asset classes, bankers said.
The comeback of the big
buyer is expected to encourage a
pick-up in covered issuance in
November. Eurozone borrowers
had been relatively quiet in
anticipation of the central
bank’s return.
The ECB had previously been
placing orders of around 5% for
covereds this year, as it
reinvested maturing holdings.
DKB’s €500m no-grow 10-year
covered was marketed at
guidance of mid-swaps plus 7bp
area via leads ABN AMRO, BayernLB,
DZ Bank, Natixis and UniCredit.
Books exceeded €1bn within
50 minutes. The spread was
lXEDûATûBPûONûAûBOOKûLASTû
reported above €1.4bn.
with the proceeds to be used to
lNANCEûPUBLICûWATERûANDûWASTEû
management facilities in
Germany.
BPCE and its leads Danske Bank,
HSBC, JP Morgan, LBBW, Natixis,
Nord/LB and UniCredit then hit
screens with guidance of mid-
swaps plus 9bp area for its
seven-year.
Demand surpassed €1bn
within an hour and the spread
was ultimately set at 5bp for a
€1.25bn deal.
The book closed above €2.4bn.
A WELCOME PUSH
Bankers involved on the trades
said they were already subscribed
when the Eurosystem came in.
But the ramped-up central bank
bid added momentum, increasing
dynamic in the market,” said a
BANKERûSPECIALISINGûINûlNANCIALû
institutions.
In the end, central banks and
OFlCIALûINSTITUTIONSûWEREû
allocated 11% of DKB’s deal and
33% of BPCE’s.
CORPORATE IMPACT LESS
OBVIOUS
Also on Wednesday, Daimler
helped usher in a new age of the
ECB’s corporate sector purchase
programme, with automakers
likely to be among the biggest
BENElCIARIESûOFûTHEûLATESTûCHAPTERû
of the bond buying programme.
Daimler launched a €4bn
triple-tranche trade, comprising
€1.75bn November 2023s,
€1.25bn May 2027s and €1bn
November 2031s.

US creditors wise up to ESG utility risk 08 Deutsche rebuilds in DCM 10 Blowout for Cellnex rights 13
4HEûLOANûBENElTSûFROMûSECURITYû
over Casino’s main French
operating subsidiaries, Casino
Finance and the French holding
companies owning the company’s
stakes in Latin America.
@ For daily news stories
visit www.ifre.com
restrict the ability of Casino
to pay dividends, which
were in fact scrapped in July.
Rusal brings ESG
They can restart in 2021, but
will be limited to an annual
loans to Russia
€100m plus 50% of net „ Loans Scepticism over country’s environmental record
“For the secured bonds you
have to believe management
when they give you the value of
the real estate assets,” said the
second investor.
“And for the term loan you
have to believe in the strategy of
the company and the fact the
company will still be here in four
years and three months to repay.”
$EBTûPROCEEDSûWILLûRElNANCEû
drawn credit lines and be used
YEARû53BNû greenhouse gases, said it would join
to launch a tender offer for a
targeted €700m of short-dated
unsecured bonds due in 2020,
2021 and 2022.
PROlTûWITHûANûADDITIONALû
€100m envelope available
over the life of the new
debt.
Those dividend limits will
stay in place as long as Casino’s
leverage remains above a 3.5
times debt-to-Ebitda ratio. The
ratio currently stands at 6.4
times.
Casino hopes to use the
BREATHINGûROOMûTOûOFmOADûõBNû
OFûASSETSûBYûTHEûlRSTûQUARTERûOFû
2021.
“The market will be very
focused on whether there is any
BY SANDRINE BRADLEY
Russian aluminium company RUSAL
HASûSIGNEDûTHEûlRSTûSUSTAINABILITY
linked syndicated loan arranged by
international commercial banks for
a Russian borrower, as green
lNANCINGûSPREADSû%ASTûTOûAûCOUNTRYû
where politicians have been
sceptical about climate change.
2USALSûlVE
sustainability-linked pre-export
lNANCINGûLAUNCHEDûINûEARLYû
3EPTEMBERûATû53MûBUTûWASû
increased after receiving a high
for an existing client – taking on a
new coal client would be
impossible,” a second banker said.
TOUGH CALL
For some lenders, the idea of green
lNANCINGûFORû2USSIANûCOMPANIESûISû
DIFlCULTûTOûREADILYûACCEPT
In September, Russia, which is
the world’s fourth largest emitter of
THEûû0ARISû!GREEMENTûTOûlGHTû
climate change, one of the last
countries in the world to do so. In a
report published in 2014, Russia’s
4HEûTHIRDûPARTûOFûTHEûRElûTHEû room to stream those disposal level of interest. main meteorological service
extended syndicated revolving proceeds up to the majority It comes at a time when banks’ Roshydromet warned that the
FACILITYûWILLûBENElTûFROMûTHEû
same security as the loan.
DIVIDEND RESTRICTIONS
!LLûTHREEûlNANCINGûLEGSû
include covenants that
Bankers would not comment
ûITûHASûlNALLYû know how businesses are run in
ONûTHEûSPECIlCSûOFûTHEû%#"Sû
involvement in the transaction,
although the deal statistics
REVEALEDûOFlCIALûINSTITUTIONSûANDû
agencies took between 11% and
17% of the various tranches.
“Some issuers will welcome
the potential support of the
ECB,” said a corporate bond
banker. “I’m just not sure it
will have the same impact as it
did in the past, assuming the
ECB buy up to €2.5bn of
corporate bonds per month.
Which I’m not sure they will
even do.”
Bank of America analysts,
though, said they expect that
automakers’ bonds will be one
of the main targets for the ECB’s
buying programme as the
central bank rebalances its
credit portfolio.
EQUIVALENTû08&ûINûANûEFFORTû
The ECB’s buying should act
as a counterweight to the fact
that automakers have been
PROLIlCûISSUERSûOFûELIGIBLEûDEBTû
this year, the analysts said.
SHAREHOLDERvûSAIDûTHEûlRSTû
investor.
Casino has already signed
€2.1bn of sales from an earlier
€2.5bn asset disposal plan,
Moody’s said. „
The corporates banker said
that the ECB’s presence was
likely to have more of a
psychological than practical
effect on new corporate issues.
“The ECB could help the
sentiment of investors ... in
particular through the end of
November when you have less
involvement from momentum
investors,” he said.
The ECB’s purchases across
asset classes are expected to be
particularly strong in November
ahead of an anticipated
December slowdown. Bankers
attributed the surprising start in
covereds to such frontloading.
The buying should negate
some of the impact of weaker
macro or fundamental news,
while over the short term
spreads are set to tighten.
The ECB will from now target
be? I hope they don’t negotiate
net monthly purchases of €20bn
of covered, public sector,
corporate and ABS paper. It has
said the programme will continue
for as long as necessary. „
International Financing Review November 2 2019
carbon neutrality initiative,
which says they can no longer
lend to certain energy companies
for environmental reasons,
means lending to some Russian
COMPANIESûISûMOREûDIFlCULT
“People are really beginning to
think about sustainability-linked
DEALSûINû2USSIAû
reached the market from Western
Europe. There was a lot of appetite
and it went beyond the normal
circle of banks,” said one banker
on the deal. “We will see more of
green loans in Russia.”
For some Russian borrowers,
many of which are well established
in the loan market, raising funds
has become a lot more challenging
due to environmental issues.
Earlier this year, mining
companies SUEK and SIBERIAN
ANTHRACITE struggled to raise loans.
A number of banks declined to
LENDûTOû35%+Sû53Mû08&û
They found the circa 170bp over
Libor margin hard to swallow and
the deal took nine months to
close. Siberian Anthracite took
the unusual step of introducing
euro-denominated tranches to its
õM
to attract better pricing.
“The business case for doing
these deals is getting weaker. It’s a
struggle to get them through
credit committee. It’s bad enough
country is warming more than
twice as fast as the rest of the world.
“The likes of Rusal or Norilsk
Nickel getting sustainability-linked
loans is a strange concept. Norilsk
is one of the most polluted cities in
the world. I know there needs to
be a starting point but when you
this country I just don’t see it,” a
third banker said.
Rusal will pay a margin on its
latest loan that is dependent on
THEûCOMPANYSûFULlLMENTûOFûKEYû
performance indicators related
to environmental impacts and
sustainable developments. They
include an increase in sales of
Rusal’s low carbon aluminium
brand, called Allow; a reduction
in its carbon footprint; and a
DECREASEûINûmUORIDEûEMISSIONSû
The KPIs will be measured
ANNUALLYûANDûVERIlEDûBYûANû
independent third party.
Some bankers question how
the KPIs will be monitored and
how thoroughly they will be
implemented.
“There is a reliance on certain
standards being met, but will they
checks that are subsequently not
done, or only half implement some
initiatives,” the third banker said.
ING and Natixis coordinated
2USALSûlNANCING „
5
Top news
Lebanon on a knife edge
„ Emerging Markets Upcoming bond maturity expected to be repaid by FX reserves, as deposit base crumbles

BY ROBERT HOGG be a deterioration in the rate of 2019, according to S&P estimates, Jan Dehn, head of research at
The drying up of critical depositor
mOWSûHASûLEFTûLEBANON‘s economy
in a precarious position ahead of
ANûUPCOMINGû53BNûBONDû
redemption, with the central bank
now likely to use up precious
resources to avoid a default.
LEBANON, which has been
DOLLARûmOWSûTOûTHEûCOUNTRYvûSAIDû
Joanna Woods, portfolio manager
at First State Investments.
,EBANONSûMINISTRYûOFûlNANCEû
and central bank did not respond
to requests for comment.
Bond repayments spike next
YEARûTOû53BNûEXCLUDINGû
interest payments), according to
FROMû53BNûATûTHEûENDûOFû
Moody’s forecasts that
,EBANONSûLIQUIDû&8ûRESOURCESû
will be exhausted by the debt
service payments due in the rest
of this year and next.
Lebanon has one of the
highest government debt-to-GDP
ratios in the world. Total debt is
Ashmore, says that rolling
Eurobonds would require ever
higher interest rates, which
could become unsustainable at
some point, especially if capital
mIGHTûTAKESûHOLD
“In a no-change scenario we
may well look at an eventual
restructuring, but it ought not to
engulfed by nationwide protests 2ElNITIVûDATAûFROMû53BNû 53BNûEQUIVALENTûTOûûOFû be an immediate risk,” said
against an elite blamed for
mishandling the economy that
led to the resignation of prime
minister Saad al-Hariri last
week, has never defaulted on its
in 2019. These amounts include
foreign and domestic bonds.
Lebanon had planned to issue
in the international market but
with its bonds trading at elevated
'$0ûOFûWHICHûABOUTû53BNûISû $EHNûh4HEûCASHmOWûSITUATIONûISû
in Eurobonds, says Patty Ye Cao, currently okay.”
assistant portfolio manager at
Merian Global Investors. MELTING AWAY
She estimates that the central However, non-resident
foreign obligations. yields – its March 2020 note, for bank and local commercial banks CONlDENCEûWHICHûISûVITALûFORû
This month’s repayment, due example, is bid at a 66.88% yield own about 80% of the Eurobonds, driving deposits that keep
on November 28, should be met compared with 12.78% just two making any potential Lebanon’s economy functioning,
THROUGHû&8ûRESERVESûBUTûSOMEû
investors are sounding alarm
bells over an eventual need to
restructure debt.
“The probability of an eventual
sovereign debt restructuring has
risen substantially in our view,
and the catalyst for this is likely to
Venezuela opposition ups stakes
following PDVSA default
„ Emerging Markets Guaido-backed oil firm moves to make 2020 bonds invalid
BY MILUSKA BERROSPI
Venezuela’s opposition
government and holders of the
ûBONDûISSUEDûBYûOILûlRMû
PDVSA looked to be on a collision
course last week after the
borrower missed a principal
payment and upped the stakes
by seeking to make the security
invalid.
The aggressive move by the
53
BACKEDûADMINISTRATIONûOFû
opposition leader Juan Guaido,
who is battling for power against
President Nicolas Maduro and
controls PDVSA, saw PDVSA seek
weeks ago – that is no longer a
realistic option, meaning that
GOVERNMENTûlNANCESûAREûLIKELYûTOû
stay strained.
EXHAUSTED
Lebanon’s “usable reserves” will
DECLINEûTOû53BNûBYûTHEûENDûOFû
of the value of the underlying
COLLATERALûnûSHARESûOFû0$63!Sû53û
unit Citgo.
The Guaido team’s decision to
MISSûCLOSEûTOû53BNûINû
amortisation and interest
payment due October 27 had
been widely expected. But few
had expected such forceful legal
action just two days after the
default.
It was especially surprising
as the move came soon after
THEû53û4REASURYûHADûBANNEDû
PDVSA bondholders from
seizing the Citgo shares for 90
days.
RESTRUCTURINGûAûDIFlCULTûCALL
“A debt restructuring with large
NOMINALûHAIRCUTSûWILLûSIGNIlCANTLYû
erode or wipe out commercial
banks’ capital base,” said Cao.
“Therefore the adverse impact on
banks will likely be a strong
deterrent to large haircuts.”
creditors from laying claim
to the Citgo shares.
OVERPLAYING THEIR HAND
“The bondholders know that
they pretty much hold all the
cards,” said Russ Dallen,
managing partner at Caracas
Capital Markets.
But others think the Guaido
team may have overplayed its hand.
“To ask that investors not be
allowed to proceed on their
actual rights, it’s a really
unhealthy position,” said a New
York-based lawyer. “It’s the
opposite of good faith.”
appears to be melting away.
Money drained out in 2019,
S&P said, due to failing depositor
CONlDENCEûANDûRISINGûRISKSûTOû
Lebanon’s currency peg to the
53ûDOLLAR
These risks are outweighing
the lure of attractive returns on
unconstitutional because they
were issued without approval from
the National Assembly. And, in
using Citgo as collateral, the
transaction constituted a matter of
national interest, and such matters
need approval by the Assembly.
The Guaido team also makes a
case that the Maduro
government collateralised the
PDVSA 2020s with Citgo shares
despite the objections of the
democratically elected National
Assembly.
By making such a case, the
Guaido team may be shooting
itself in the foot as its case
resembles arguments that say
PDVSA is an alter-ego of the
AûJUDGEMENTûINûAû53ûCOURTûTOû
declare the 2020s “invalid,
illegal, null and void”.
The 2020 was the last bond in
the Venezuela debt complex to
remain current, mostly because
4HEûlLINGûWHICHûNAMESû
THEûBONDSûTRUSTEEû-5&'û
5NIONû"ANKûANDûITSûCOLLATERALû
agent GLAS Americas as
defendants, also asks for an
injunction to prevent
It is also questionable whether
its legal argument will stand up
in court or indeed ultimately
help it in its case to keep Citgo.
The Guaido team argues that
the PDVSA 2020s are
sovereign state.
Canadian gold miner
Crystallex has already won a
JUDGEMENTûINûAû53ûCOURTûUSINGû
the same reasoning to justify
seizing Citgo assets for

6 International Financing Review November 2 2019


deposits, with banks in July
offering up to 14% on large sums
of money locked up for three
YEARSû.ETûDEPOSITûOUTmOWSû
TOTALLEDû53BNûFORûTHEûlRSTû
eight months of 2019.
Depositors have been driven
away by political gridlock in
@ For daily news stories
visit www.ifre.com
Dollarisation of deposits has
been climbing. It rose to 71.5% in Battle brewing over
June, up from 68% a year earlier.
The Lebanese pound is pegged
at 1,505.50 to the dollar. But a
Budweiser fees
disparity has arisen between the „ Equities JPM and Morgan Stanley set for outsized payday
OFlCIALûEXCHANGEûRATEûANDûTHEû
black market, with informal BY FIONA LAU totalling up to 1.5% of the funds
,EBANONûASûWELLûASûTIGHTENEDû53û
sanctions against Hezbollah and
renewed tensions with Israel.
Relations with Saudi Arabia
have also become strained as
Saudi Arabia sought to limit the
prices ranging from 1,750 to 1,850
pounds on Wednesday.
The central bank has promised
not to introduce formal capital
controls, but banking sources said
on Thursday that commercial
The bookrunners on BUDWEISER
BREWING COMPANY APAC@Sû(+BNû
53BN û(ONGû+ONGû)0/ûAREû
lGHTINGûOVERûAû53Mû
commission after the issuer
RAISEDû4HATû53MûPAYOUTûWILLû
be shared among the
underwriting syndicate, in line
with market practice.
JP Morgan and Morgan
Stanley will share a further
INmUENCEûOFû)RANSû,EBANESEûALLYû
Hezbollah.
“Former friends have been
pulling back from Lebanon,” said
an investor. “That has affected the
economic side. Hariri went to the
banks would only allow transfers
abroad in a narrow set of cases.
The situation on the ground has
BECOMEûEXTREMELYûDIFlCULTû4WOû
weeks of anti-government
protests triggered the resignation
allocated the entire brokerage
fee to the two sponsors.
Budweiser’s decision to award
the 1% brokerage commission to
JP Morgan and Morgan Stanley has
triggered outrage among the six
53MûFEEûFORûSPONSORINGûTHEû
listing.
4HEûADDITIONALû53Mû
brokerage fee is especially
important for banks in a weak
year for equity issuance in Asia-
5!%ûINû/CTOBERûTOûASKûFORûSUPPORTû
and all he got was advice.”
Outside help for Lebanon is
yet to be forthcoming. Besides
the lack of support from GCC
of Hariri, and banks were shut.
“The breadth of the protest
helped to shake the political
establishment out of its stupor
ANDûPROMPTEDûITûTOûTAKEûSIGNIlCANTû
other bookrunners, who argue it
breaks with convention in Hong
Kong.
“I have been working in the
industry for years and have
0ACIlCû%XCLUDINGû*APANûSHAREû
sales were down 20% from
January to September compared
to the same period last year.
According to market
ALLIESûAû53BNûAIDûPACKAGEû policy action, notably a major never seen a single IPO in which participants, brokerage fees are
pledged by international donors
last year on condition of reform,
is still to be disbursed.
The outlook for Lebanon’s ability
to meet foreign obligations will only
worsen if the currency is devalued.
compensation from the
Venezuelan state.
*USTIlCATIONSûFORûDEFAULTINGû
lSCALûADJUSTMENTvûSAIDû$EHN
$EHNûSAIDûTHEûlSCALûADJUSTMENTû
had improved the credit worthiness
of the government, but that the
prices of Lebanese bonds have
fallen due to the political noise. „
Holders of the bonds, which
include big name investors such as
Ashmore, Blackrock, and T Rowe
the whole brokerage fee goes to
the sponsors,” said a person
familiar with the situation.
Fees on Hong Kong IPOs are
often hotly contested weeks
after the deal has priced, with
bookrunners staking their claim
to the underwriting fees based
on the orders they brought in.
The standard 1% brokerage fee,
paid by investors, is typically
usually shared along the same
lines as the underwriting fees.
“For example, if you get 30%
of the underwriting fee, you
will get more or less the same
split for brokerage fee,” said an
ECM banker away from the
deal. “Sometimes the issuer
will be in charge of
distributing the brokerage fee,
sometimes it will be the
on bonds issued by tyrannical
governments, or so-called
odious debt, have been made in
the past but have had little
success in the courts.
Besides, the Guaido
administration earlier this year
MADEûAû53MûINTERESTûPAYMENTû
ONûTHEûSûAFTERû53ûSANCTIONSûINû
effect allowed his government to
TAKEûCONTROLûOFûTHEû53ûRElNER
By making that payment, some
say, Guaido’s team has weakened
the claim that the bonds are
somehow illegitimate.
A LONG SHOT
The move to invalidate the debt
is highly unlikely to succeed,
said Mitu Gulati, a Duke law
professor.
“Such claims are always a
long shot”, he said. “Creditors
have given over the money and
the sovereign is seeking to avoid
paying any of it back using the
argument that there was some
process violation.”
0RICEûAREûLIKELYûTOûlGHTûBACKû!LLû
three declined to comment.
Earlier this month, Ashmore’s
head of research Jan Dehn, told
IFR that while his fund kept
lines of communication open
with the Guaido team, he did
not really “see any reason to
negotiate”.
With the cards seemingly
stacked against success, last
week’s legal action could
potentially be a bargaining tool
to create momentum and
increase leverage ahead of a
possible settlement between the
parties.
h4HEûlLINGûOFûTHEûLAWSUITûISû
another way to create some
settlement leverage but also to
create a process for settlement,”
said Mark Weidemaier, a law
PROFESSORûWITHû5.#û#HAPELû(ILL
“It is not at all uncommon for
a judge presented with a case
like this to try to encourage,
maybe quite strongly, the
parties to mediate.” „
International Financing Review November 2 2019
split along similar lines.
In Budweiser’s case, all the
banks on the deal are entitled to
share the underwriting fee
based on their contribution,
with JP Morgan and Morgan
Stanley taking the lion’s share of
that pot – in line with market
practice.
The junior banks, however,
were stunned to discover that they
would get none of the brokerage
fees. Some are now lobbying the
company to overturn its decision,
trying to convince it to follow
market practice.
“We don’t know what the two
sponsors told the issuer, but we
want the issuer to understand
what is the general practice in
this market and stick with it,”
said another person with
knowledge of the matter.
SMALLER PIE
According to its prospectus,
Budweiser paid underwriting
fees and discretionary incentives
sponsors, but it’s extremely
rare for it to all go to the
sponsors.
“I have only seen one such
case in my entire career, and
that was on a small IPO.”
A third person close to the
deal, however, argued that the
SPLITûREmECTEDûTHEûWORKûDONEûONû
the IPO, saying that banks
should respect the issuer’s
decision.
“The issuer is just rewarding
the banks according to their
contribution. They shouldn’t
complain,” he said.
JP Morgan and Morgan
Stanley were the sponsors on
Budweiser. They were also
global coordinators with Bank
of America and CICC. The other
bookrunners were BNP Paribas,
Citigroup, Deutsche Bank and
HSBC.
Budweiser and JP Morgan did
not respond to requests for
comment. Morgan Stanley
declined to comment. „
7
Top news
AT1 fires on despite sensitivity price
„ Bonds Books drop on tight level but demand expected to stay
BY TOM REVELL
LANDESBANK BADEN-
WUERTTEMBERG and
SKANDINAVISKA ENSKILDA BANKEN
relished the opportunity of
raising Additional Tier 1 debt
at ultra-tight levels last week
but with yields hovering close
to their all-time lows,
investors’ price sensitivity is
becoming more pronounced.
For AT1 bondholders, 2019
has been a vintage year if the
performance of the Bank of
America Merrill Lynch CoCo
index is anything to go by.
Having opened at a yield of
6.498% in early January, it has
tightened by more than two
points, and hit an all-time low of
4.27% on October 25.
Demand was nonetheless
swift to come by for AT1 market
DEBUTANTû,""7ûANDû3%"SûlRSTû
US creditors wise up to ESG utility risk
„ Bonds The fires blazing in California serve an ESG warning to utility credit investors
BY WILLIAM HOFFMAN
foray in the asset-class since
2017.
In both cases, books peaked at
over €3.25bn but as initial price
thoughts were tightened to leave
little on the table, demand
dropped by some €1.25bn and
OVERû53MûRESPECTIVELY
“There’s about €20bn of deals
coming up for call next year,”
said Steve Hussey, head of
lNANCIALûINSTITUTIONSûCREDITû
research at AllianceBernstein.
“As an investor, that means
you can be a bit more careful
where you spend. You’re less
likely to accept a bank being
really being aggressive on
pricing.”
DROP IN DEMAND
Rabobank experienced a similar
drop in demand in September
for its €1.25bn perpetual non-
call 7.25-year AT1 on which
The impact was made most
books ended at €3bn, down from
the €3.75bn-plus at the peak.
“We’re coming into a tricky
time of the year for investors,” a
DCM banker said. “For those
who’ve been investing all year,
you look at these levels and you
have to question how tight
things can go from here.”
Coupons on Nordic AT1s have
been shrinking throughout
2019, for example, mirroring the
broader market.
“You had Nordea at 6.625%,
you then had the Handelsbanken
that looked amazing at 6.25%,
then the Swedbank at 5.625% and
now we’ve printed at 5.125%. So
effectively we’re going half a
percent tighter on a coupon basis
almost each time,” a lead banker
on SEB’s deal said.
“So you can see why investors
get a bit nervous and a bit
SENSITIVEûABOUTûAûûmOORv
and the company is refusing to
For the Swedish bank, that
meant that it ended up pricing
ITSû53Mû2EGû3ûPERPETUALû
non-call May 2025 in the middle
of guidance at 5.125% but still
tighter than the 5.375% area
IPTs.
The bank will also be able to
lock-in a lower coupon than on a
53BNû!4ûTHATûISûDUEûTOûBEû
called in May next year.
“It’s the tightest Nordic
coupon that I can see”, the lead
BANKERûSAIDûh)TSûRElNANCINGûAû
5.75% coupon.”
In the case of LBBW, the
German lender priced its €750m
trade at 4%, some 50bp tighter
THANûTHEûûAREAû)04SûANDûmATû
to fair value.
THROUGH DIFFERENT LENSES
But for all the price
sensitivity, the AT1 asset-class
remains still well supported
Despite some pushback on
5TILITIESûFACEûAûWIDEûRANGEûOFû
well-known climate change
risks, but more traditional credit
real as a federal judge in late
factors and an overall strong
ECONOMYûHAVEûALLOWEDû53û
GRADEûUTILITYû
investors to push aside such
challenges — until recently.
There was investor push back
on the slew of utilities names
hundreds of millions of dollars.
that issued new bonds in recent
months, according to two
syndicate bankers close to the
trades.
“We are hearing increasing
chatter about shying away from -
or having less appetite for - utilities
that have heavy coal bases in terms
of their generation portfolio,” one
syndicate banker said.
“Investors have been
discussing this for a while but
apparent when American power
company AMEREN came to the
market with two bonds in
3EPTEMBERûAû53MûûlVE
dented market conditions for
year on September 11 followed
by AMEREN MISSOURISû53Mû
3.25% 30-year on September 23.
Both seemed to perform
decently but the Ameren
-ISSOURIûPLANTûHASûSPECIlCûCOAL
ICE BofA data.
related issues that may have
made it less attractive than its
parent.
The bond from Ameren
tightened 23bp through price
progression and garnered a
53BNûORDERûBOOKûûTIMESû
over subscribed. The bond from
Ameren Missouri, however,
tightened just 13bp from initial
price thoughts and built a
SMALLERû53MûORDERûBOOKûû
clean leakage-prone ash ponds
that could impact water supply.
Sure enough, the risks proved
September found the plant in
violation of the Clean Air Act
and ordered the company to
OUTlTûITûWITHûhSCRUBBERvû
technology that will cost
“Maybe we’re on the brink of
a greater price differential
between cleaner bonds in the
utility base compared with more
black or brown utilities,” the
syndicate banker said.
DUKE ENERGY and SOUTHERN’s
subsidiaries ALABAMA POWER and
GEORGIA POWER also came with
new bonds in September that
caused some chatter among
investors for their negative
SPECIlCûNAMESûTHEû
environmental social and
governance effect has not yet
utilities in a broader sense.
!VERAGEû53ûHIGH
spreads remain relatively tight
at 118bp over Treasuries — 41bp
tighter on the year, according to
SOCIAL RISK
4HEûMULTIPLEûlRESûRAGINGûACROSSû
California last week, sparked by
utility electrical wires, serve as
another grim reminder of the
vast environmental risk tied up
in utility bonds.
Last year, the once Single A
rated California utility PACIFIC
GAS & ELECTRIC was plunged into
bankruptcy following a string
we hadn’t seen it manifested in
behaviour around orders and
pricing indications, but I think
with these trades we were seeing
folks scale back their appetite.”
times over subscribed.
Ameren’s handling of its
Missouri coal plant is under
scrutiny as fumes have polluted
the surrounding air for years
credit ratings and high coal
exposures.
However, subsequently those
have all seen some support in
secondary trading.
OFûlRESûITûFAILEDûTOûPREVENTû
and this week SOUTHERN
CALIFORNIA EDISON’s bonds (rated
Baa3/BBB/BBB-) widened by as
much as 83bp after state

8 International Financing Review November 2 2019


given that unlike the yields,
spreads still offer some
attractive relative value
opportunities.
While some investors still
look at the product on a yield
basis, others take other metrics
into accounts.
“The market remains
supportive and AT1 still offers
a decent buffer versus other
alternatives such as Double B
high-yield credits,” said
Hussey.
“You have to pick the right
bank and the right structure but
in euros you can still pick up
close to 200bp versus high-yield
ANDûITSûABOUTûBPûINûTHEû53û
dollar market.”
“Yields are more about the
moves in underlying rates
rather than a bank performing,”
said Hussey.
“And while you should look
at yields, it’s important to
look at spreads. On a pure
credit fundamental, I’m more
worried about the spread I am
picking up versus whatever
the reference rate is given
that is what feeds into the
reset.”
4HEû!4ûMARKETûALSOûBENElTSû
from technical support,
according to Hussey.
“We have a backdrop of
negative rates, CSPP kicking
in and there are a lot of high-
yield investors who are
ESG climbs up central
banks’ agendas
„ Bonds/Loans Lack of data hampers ESG efforts
BY TESSA WALSH
Central banks’ increasing use of
ESG investment criteria could
turbocharge the issuance of green
debt, although efforts are at an
early stage, as opinion remains
divided about using monetary
policy to tackle climate change.
Adopting sustainable
investment criteria could boost
securitisations of corporate debt
such as CLOs and SME ABS and
@ For daily news stories
visit www.ifre.com
versus non-green products,” a
senior ESG banker said.
EASIER OPTION?
A potentially easier way of
sparking ESG investments could
be via central banks’ large
currency reserve portfolios. ESG
could be added as a fourth
reserve management objective,
in addition to liquidity, safety
and return, according to a BIS
survey.
STRUGGLINGûTOûlNDûYIELDû)Nû REDUCEûRElNANCINGûRISKû In September, euro area
EXTENSION RISK that kind of environment, providing more liquidity and foreign currency reserves were
The average spread of the
BAML index was at 375bp on
October 25, well above the all-
time low of 314bp in early
2018, which could ease some
investors’ concerns over
extension risk as reset spreads
are higher.
AT1 continues to be an
attractive place to invest.”
The European Central Bank
restarted its asset purchase
programme last week and will
be buying €20bn across primary
and secondary bond markets,
with no end date. „
debt for companies that are
environmentally friendly,
according to a report by Moody’s.
Central banks have taken a
defensive position on managing
THEûlNANCIALûRISKûOFûCLIMATEûCHANGEû
to date, but calls are mounting for a
more proactive approach as the
scale of the problem, and
potentially catastrophic impact on
53BNûANDûPOLICYûPORTFOLIOSû
including foreign currency
reserves accounted for 80% of
central banks’ assets, the
Moody’s report said.
The central banks of Italy, the
Netherlands and France have
already taken steps to integrate
ESG criteria into their
investment process.
investigators found its
equipment caused last year’s
7OOLSEYûlRE
California utilities have
been shutting off power in
order to try and prevent wild
NEGATIVE OUTLOOK
With all this volatility, utilities
may no longer be the bastion
of homogeneously safe credits
the buyside could once count
on for safe returns in times of
THEûlNANCIALûSECTORûREQUIRESû
increasingly urgent action.
The ECB is already buying
green bonds that are eligible for
its purchase programmes, but is
currently debating whether green
Central banks’ efforts to
introduce ESG criteria are
currently being hampered by a
lack of data, market players said,
but their efforts to support
disclosure, particularly for
lRESûWHICHûCOULDûADDûFURTHERû
social pressure to the overall
business risk of utilities
OPERATINGûINûWILDlREûPRONEû
areas, Moody’s wrote in a
report last week.
“Each public safety power
shutoff increases the likelihood
of a more contentious
regulatory environment,
regardless of how many
WILDlRESûAûSUCCESSFULûSHUTOFFû
avoids,” the report reads.
h4HEû#ALIFORNIAûWILDlRESû
illustrate how considerations of
environmental, social and
stress.
5TILITIESûAREûTHEûMOSTû
downgraded sector over the last
12 months, according to Jason
Shoup, head of global credit
strategy at Legal & General
Investment Management
America.
Not many have crossed into
high-yield, but some are headed
that way as 11.7% of the utility
sector holds two or more
negative outlooks from the
ratings agencies - the third
highest rate among the sectors
tracked by analysts at
quantitative easing is a good idea
or not. Incoming ECB President
Christine Lagarde has pledged to
make tackling climate change
“mission critical” and has not
ruled out green QE.
Germany’s Jens Weidmann,
the current head of Germany’s
Bundesbank, has argued against
lower risk-weighting for green
assets, discrimination against
brown assets and for no favour
to be shown to green bonds
through green QE.
Global ESG bond and loan
issuance has surpassed
banks, will provide more clarity
AROUNDûTHEûlNANCIALûSYSTEMSû
exposure.
“The issue now is that there is
not enough data to have a
different risk approach to green
or brown assets,” a second
senior ESG banker said.
Mark Carney, the governor of
the Bank of England, launched
the Taskforce on Climate-
Related Financial Disclosures in
2015, and has warned that
companies have two years to
agree rules for reporting climate
risks before global regulators
governance risk are connected
and how they affect credit,”
Moody’s wrote.
5TILITIESûAREûALSOûUNDERû
scrutiny from Democrats such
as Bernie Sanders, who wants to
make energy companies
publicly owned, and Elizabeth
Warren, who wants to place
strong new regulations on the
sector.
CreditSights.
“You start to add this all up
and you see this is a sector that
has more idiosyncratic risk than
you might have expected,”
Shoup said.
“It was pretty low
differentiation between
companies before and that’s
been totally turned on its head
over the last year.” „
International Financing Review November 2 2019
53BNûTHISûYEARûTHEû#LIMATEû
Bonds Initiative said, but there is
still a lack of assets, particularly
from investment-grade
companies, to meet the growing
demand from investors as a wall
of cash continues to target the
space.
“The ESG market would
welcome central banks having a
SPECIlCûVIEWûONûGREENûPRODUCTSû
devise compulsory rules.
Natixis launched a “green
weighting factor” in September
that allocates capital to
lNANCINGûDEALSûBASEDûONûTHEIRû
climate impact in anticipation of
regulatory moves.
It reduces risk-weighted assets
by up to 50% for green deals and
increases RWAs by up to 24% for
brown assets. „
9
Top news
Deutsche aims to recoup DCM lost ground
„ People & Markets Private placements at heart of latest bond push

BY GARETH GORE a third between 2014 and 2018 heavily incentivising bankers to from larger rivals that have
and are tracking another 9% push bespoke, highly lucrative more resources at their
Five years ago, DEUTSCHE BANK‘s lower so far this year. – but often risky and long-dated disposal. Its investment bank
bond franchise was riding the
crest of a wave. After a period
of post-crisis restraint, clients
had once again begun to take
on debt to invest or make
acquisitions. Deal volumes
were surging and, with many
rivals still distracted by
ongoing clean-ups, Deutsche
SEEMEDûBESTûPLACEDûTOûPROlTû
from the boom.
5NFORTUNATELYûFORû$EUTSCHEû
the bond market boom
coincided with a deep crisis at
the bank that has seen it work
through four CEOs, umpteen
overhauls and a collapse in its
share price.
5NCERTAINTYûOVERûSTRATEGYûANDû
– at least for a time – even its
future existence hit the bank
hard; the bond franchise, like
nûlNANCINGûTOûCLIENTSû7ITHûTHATû
gone, DCM will go back to
basics.
“Coverage teams were
prioritising these innovative
lNANCINGûSOLUTIONSûASûOPPOSEDû
to doing core day-to-day DCM
work,” said Frazer Ross, head of
%UROPEANûmOWûSYNDICATEûh7HATû
we’ve done is re-focus the
coverage. It is much better – in
has a loan book of just €71bn,
compared with €150bn at BNP
Paribas, number one in the
euro league table. To address
that disadvantage, Deutsche
has opted to grow its private
placement desk within the
bond syndicate.
“It’s a quirky little business,
but we have invested in it as
clients really value it and, in
The business posted a THEûRESTûOFûTHEûlRMûSUFFEREDûASûAû an area which is a highly many cases, it is either a
record year in 2014, earning result. COMMODITISEDûHIGHûmOWûnûTOû substitute for lending or
€1.6bn in underwriting fees,
more than any other
European bank and 50% up on
three years earlier. With the
European Central Bank set to
start a €1trn bond buying
programme the following
spring, the future looked even
better. Deutsche, the region’s
pre-eminent bond house, was
widely expected to be the
BIGGESTûBENElCIARY
But while the bond party has
got into full swing since then,
Deutsche seems not to have
been invited. Deal volumes and
fees hit new highs in 2017, and
banks are on track to break that
TURNING A CORNER?
After another strategy overhaul
in July, when the bank made its
deepest cuts yet, shuttering
equity trading and earmarking
€288bn of assets for sale or
winddown, the hope is that a
corner has been turned.
Debt capital markets will be at
the heart of a new slimmed-
down investment bank, with
Deutsche’s bond bankers now
tasked with recouping lost
ground.
4HEûlRSTûSTEPûINûTHATûPROCESSû
WASûTHEûCLOSUREûOFûTHEûlNANCINGû
and solutions group. Although
have people at the coalface who
are paid to originate bond deals,
full stop.”
Mark Lewellen, Barclays’
former global co-head of DCM,
has been brought in to help
revive the corporate bond
franchise in Europe. Deutsche
has long been a top player in
the region, but there are signs
that the bank’s troubles have
dented its standing. After
ranking second for corporate
bond deals in euros for six years
running, it has slipped to third
this year.
PRIVATE PLACEMENTS
STANDALONEûPROlTABLEûFORûUSvû
said Henrik Johnsson, global co-
head of capital markets.
h)FûYOUûGETûINTOûTHEûmOWûASûTOû
what’s going on, and start
climbing the league tables, then
ALLûOFûAûSUDDENûYOUûlNDû
opportunities that you didn’t
think existed.”
The bank hired David Costa
from Goldman Sachs to run the
team, which will be tasked with
identifying pockets of demand
for particular maturities or
currencies and then presenting
trades to clients. The hope is
that such solutions will be not
just lucrative, but also might
record again this year. But, at
Deutsche, the reverse has
happened: bond revenues fell by
Argentina losses, rates trading hurt Deutsche
„ People & Markets Political change in Argentina causes losses on EM debt desk
BY STEVE SLATER
Losses on Argentina debt and a
torrid time in rates trading for
DEUTSCHE BANK last quarter
compounded the impact from its
LATESTûOVERHAULûANDûCUTûPROlTSûINû
its investment bank by 73% from
a year earlier.
The German bank picked out
rates trading and emerging
markets debt as two particular
trouble spots, and both are areas
it is restructuring.
#HIEFûlNANCIALûOFlCERû*AMESû
von Moltke said political
10
only formally set up in 2015, the
philosophy underlying it was a
long-standing one at the bank,
change in Argentina that
RATTLEDûlNANCIALûMARKETSû
“caused some risk losses” in
EM debt. He declined to
quantify the losses.
“We believe the performance
has now stabilised under new
leadership with improved
results in September,” he said.
“In the investment bank, of
course there have been pockets
of challenges, but that is where
the restructuring has fallen most
heavily and you’d expect some
degree of revenue loss when
YOUREûINVOLVEDûINûAûSIGNIlCANTû
International Financing Review November 2 2019
5NDERûTHEûNEWûSTRATEGYû
$EUTSCHEûFACESûTHEûDIFlCULTû
task of winning market share
repositioning,” von Moltke told
reporters on a conference call.
MARKET TURMOIL
Argentina’s markets crashed in
August after then-President
Mauricio Macri was surprisingly
defeated in a presidential
primary. That hit currency and
stock markets and prompted
currency controls. Peronist
candidate Alberto Fernandez
won a general election last
week.
The market turmoil left other
banks nursing losses from
open the door to winning
future bond mandates from
happy clients without Deutsche
Argentina in the third quarter
too. Bankers said many desks
called the situation badly and
got caught out.
HSBC said it took hits on three
fronts in Argentina: a negative
one-off “due to the macro
situation”, which it did not
QUANTIFYûAû53MûHITûTOûPROlTSû
FROMûHYPERINmATIONûACCOUNTINGû
ANDûAû53BNûINCREASEûINûITSû
risk-weighted assets due to the
impact of a credit downgrade of
Argentina.
Goldman Sachs said its
currencies revenues were hurt
 @ For daily news stories
visit www.ifre.com

having to lend its way onto US SLIDE high-yield: globally, it was In emerging markets, too,
bond mandates. Deutsche hopes the strategy second just a few years back, the bank has lost ground. A
In recent months, the
private placements desk has
low rates, the ongoing search
struck some big deals. In the
TOEûTHEûBIGû53ûBANKSû
sovereign space, it did a
LEDûlNANCINGSû increased pressure from
€500m 50-year deal for Israel,
the country’s longest tenor,
and a €105m 100-year deal for
Ireland. In corporates, it
placed big Norwegian krone
deals for Deutsche Bahn and
Aroundtown – as well as a
Hong Kong dollar placement
for the latter.
“The team is incredibly
proactive, they understand the
investor base very well, and
have very good direct access,”
said Lewellen. “It relies on
markets in 2015 – in part
for yield and an explosion in
WILLûALSOûHELPûITûINûTHEû53û
WHEREûITûISûHARDûTOûlGHTûTOE
TO
linked to past scandals and
Deutsche once ranked
SEVENTHûFORû53ûINVESTMENTû
grade bonds but has steadily
dropped back in recent years,
falling to 13th last year with
just half the market share it
had in 2014. This year is
slightly better, but the bank is
still outside the top 10.
The strategy has
nonetheless yielded some
fruit: last year, Deutsche was
sole books on a €2bn private
placement for AT&T. It
believes that, rather than go
behind only JP Morgan. But
PRIVATEûEQUITY
has tempted many banks into
the space. While Deutsche
remains a leader in European
high-yield, globally it has
FALLENûTOûlFTHûTHISûYEAR
PRIVATE EQUITY LINKS
For Johnsson, a former high-
yield banker, the space needs to
remain a focus for the bank
despite the increased
competition. He believes that
Deutsche’s long and deep
history with private equity
pullback from emerging
regulators to have better
oversight over its clients – has
led to it losing a lot of
business in once-lucrative
places like Mexico and Russia.
The bank is looking at
tentatively – and carefully –
moving back into those
countries.
Third-quarter results on
Wednesday indicate the
bank is moving in the right
direction – DCM revenues at
õMûWEREûTHEûBESTûINûlVEû
reverse enquiry from AFTERûEVERYû53ûDOLLARûDEALûITû clients stands it in good stead. quarters and 14% up on the
investors, so it’s important needs to pick its spots such as According to the bank, it is the same point last year. But
that sales people are close to TAKINGû53ûCORPORATESûOVERSEASû only one of its peers to with the new strategy just
the market as they need to be for funding. While it may lose underwrite every distributed three months old and the
able to spot pockets of demand PLACESûINûTHEû53ûLEAGUEûTABLESû õBN
PLUSû,"/ûlNANCINGûINû new set-up really only in
– for maturity, for currency, it can still make money from Europe over the past three place for a few weeks, the
for issuer type – and then 53ûCLIENTSûELSEWHERE years. jury is still out on whether
match that to the issuer’s “We’re not going to try to “We have always been Deutsche can reclaim its
needs.” cover every sector, we’re not strong in high-yield, but it’s former DCM glory.
going to try to cover every become a lot more “Of course, clients want
DEUTSCHE BANK’S DCM SLUMP client,” said Marc Fratepietro, competitive,” he said. “The to see the proof in the
DEBT UNDERWRITING REVENUES, €m THEû53
BASEDûGLOBALûCO
HEADûOFû reason why we like these pudding of the new
1,600 DCM. “We’re going to pick our clients and this business is strategy,” said Ross. “But,
1,400 spots and go deep with those because there is a certain life most importantly, no-one is
1,200
1,000 clients where we have sector cycle. Sponsor activity is talking about the viability of
800
600 banking expertise and, or if, predictable in the sense that Deutsche Bank or the credit
400 THEYûHAVEûAûBUSINESSûPROlLEûTHATû they buy and sell assets along a risk of Deutsche Bank. They
200
0 aligns with our global footprint certain schedule. This means are listening to our ideas. It
2010

2018
2014

2016
2015
2012
2013

2017

9M 2019
2011

and product strengths.” you can concentrate on a is early days, but we are
Another area where the smaller group of clients and be starting to see a shift in
Source: Company Reports bank has lost ground is in very deep with them.” attitude from clients.” „

by volatility in Latin America, in aggregate 11% rise in FICC painful and far-reaching origination revenues rose 14%
particular Argentina. (which also includes shake-up of the business that to €321m.
Deutsche declined to specify commodities) revenues in the includes cutting costs and Equity origination fees were
the precise nature of its losses, third quarter, and FICC derisking. €37m in the quarter, down 6%,
but they are likely to be the revenues at rival Barclays rose “Clients are vindicating our although von Moltke said
result of trading positions 19% from a year earlier. business model. We’re moving Deutsche had completed, priced
rather than in-country Deutsche’s rates trading is in the right direction and we’re or won more than 50 ECM
exposure. The bank sold its likely to have been hurt by its gathering speed on our way,” mandates since July, vindicating
subsidiary in Argentina in greater exposure to euro rates, von Moltke said. its strategy to exit secondary
2016, as part of its Strategy RATHERûTHANû53ûRATESûSIMILARûTOû (EûSAIDûWITHINû&)#ûlNANCINGû equities trading and focus on
2020 plan to shrink its the impact on Royal Bank of revenues grew, credit trading origination.
footprint and exit 10 countries. Scotland, which said sudden and WASûSTABLEûANDû&8ûREVENUESû In July Deutsche unveiled
sharp moves in euro rates in dipped slightly but performed plans to exit equities, scale back
RATES TROUBLE August hit it hard. well. other parts of the investment
2EVENUESûINû$EUTSCHESûlXEDû Deutsche’s investment Origination and advisory bank, and axe 18,000 jobs across
income and currencies BANKûMADEûAûõMûPROlTûINû revenues fared better than the bank. It said it cut 1,500 of
business in the July- the third quarter, down from trading, rising 20% on the year those jobs in the third quarter.
September quarter fell 13% €234m in 2018, as revenues to €488m, the bank’s highest 4HEûWEAKûlXED INCOMEûTRADINGû
from a year earlier to €1.23bn, fell 5% to €1.65bn. Deutsche FORûlVEûQUARTERSû4HATûINCLUDEDû and restructuring costs dragged
far weaker than most rivals. said that was in line with a 56% jump in M&A advisory Deutsche to a net loss of €832m
4HEûBIGû53ûBANKSûREPORTEDûANû expectations as it undergoes a fees to €130m. Debt in the third quarter. „

International Financing Review November 2 2019 11

Top news
China smashes convert record
„ Structured Equity SPDB’s A-share convertible bond highlights depth of Chinese demand

BY KAREN TIAN Rmb12.86 on October 23 before “Banks’ sizes and assets are would bounce back quickly even
the deal was announced. growing, in line with their if they traded down. They said
SHANGHAI PUDONG DEVELOPMENT BANK 8Uû0ENGûANûANALYSTûATû#HINAû development. That is why banks THEûLENDERSûlNANCIALû
HASûRAISEDû2MBBNû53BN û Fortune Securities, said a CB seem to raise a big number from performance and asset quality
from Asia’s biggest convertible offering is the best option CBs – especially this year, when has improved and see little risk
bond issue, highlighting the available for banks looking to SOMEûBIGûSTATE
OWNEDûBANKSûlNALLYû of the price falling when the
surging popularity of the equity-
linked product in China’s
onshore market.
The six-year CBs attracted an
overwhelming response from
investors, with total
subscriptions reaching
Rmb7.86trn. After a priority
offer for existing shareholders
took 52.7% of the bonds, the
raise equity capital.
Chinese banks are not allowed
to sell shares below book value,
and follow-on offerings for any
onshore-listed company come
with long lock-up periods and
arduous approval processes.
“Other fundraising methods,
such as private placements or
rights issues, may price
COMPLETEDûTHEIRû#"ûOFFERINGSvû8Uû
said, “We cannot compare the CBs’
fundraising amount from state-
owned banks with small banks in
previous years.”
SPDB’s CB issue is the fourth
major offering from a bank this
year, following new issues in the
lRSTûQUARTERûFROMû#HINAû#ITICû
Bank (Rmb40bn), Ping An Bank
bonds begin to trade. Investors
are hoping for a similar
performance to Citic Bank’s
Rmb40bn CB offering earlier this
year, which is now trading at
106.98, after being issued at par.
According to a research report
from Guosen Securities, the CBs
offer a “reasonable” initial
premium of 17% and a bond
public tranche was 331 times according to the stock (Rmb26bn), and Bank of Jiangsu mOORûOFûûWHICHûPROVIDESû
covered. performance and the issue price (Rmb20bn). SUFlCIENTûPROTECTIONûTOû
The October 30 offering may be lower than the NAV if Bank of Communications, investors.
trumps China Citic Bank’s the share price does not perform which received China Securities SPDB posted its third-quarter
Rmb40bn CB offering in well. It is not acceptable for the Regulatory Commission lNANCIALûREPORTûONû/CTOBERûû
February and Bank of China’s Chinese regulators that it seems approval at the end of last year, after the CB bookbuild. It earned
Rmb40bn print in 2010, as well to result in the loss of state- is eyeing a record-breaking 2MBBNûINûTHEûlRSTûNINEû
ASû3OFT"ANKSû53BNû
mandatory convertible into
Alibaba in 2016.
The CBs pay an initial coupon
of 0.2%, stepping up each year to
reach 4% in year six. The initial
conversion price is Rmb15.05, a
premium of 17% to the
company’s closing price of
China-to-US pipeline balloons
„ Equities Glut of IPO applicants hoping to list before the end of the year
OWNEDûASSETSvûSAIDû8U
Chinese banks have already
sold more convertible bonds this
YEARûTHANûINûTHEûPREVIOUSûlVEû
years combined, with the 2019
total standing at Rmb139bn. In
2014–18, seven banks issued CBs
with a combined size of
Rmb53bn.
2MBBNûISSUEûBUTûHASûlLEDûTOû
extend the mandate after failing
to complete the offering within
SIXûMONTHSûOFûTHEû#32#SûlNALû
approval.
DOWNSIDE PROTECTION
Analysts are optimistic about
SPDB’s converts, which one said
months of 2019 and said
revenue grew 15.4% year-on-year
to Rmb146bn. Its total assets
reached Rmb6.79trn by the end
of Q3.
SPDB allotted 40.4% and 6.9%
of the CBs to institutional and
retail investors, respectively,
with the remainder going to
family”, and hence should be
able to make it through.
Existing shareholders of 36Kr,
for example, including arms of
$IDIû#HUXINGûANDû8IAOMIûHAVEû
BY FIONA LAU, CANDY CHAN Meanwhile, 36KR, an of the year as they are not sure COMMITTEDûFORûUPûTOû53MûOFû
information service that tracks whether their deals can be done shares or close to one-third of
At least seven Chinese start-up fundraisings in China, next year, when markets are the total deal size.
companies are looking to raise a opened books for a Nasdaq IPO expected to be more volatile The real test will be how
TOTALûOFû53BNûFROMû53û OFûUPûTOû53MûLASTû-ONDAY BECAUSEûOFûTHEû53ûPRESIDENTIALû much interest these deals can
listings before the year-end 4HEûSPATEûOFû#HINA
TO
53û)0/Sû election,” said an ECM banker on DRAWûFROMû53
BASEDûINVESTORSû
window closes.
3IXûCOMPANIESûPUBLICLYûlLEDû
WITHûTHEû53û3ECURITIESûANDû
Exchange Commission for IPOs
TO
53û)0/SûINû
last week: bitcoin mining
equipment maker CANAAN
come despite the disappointing
debuts of online education
portal YOUDAO and cosmetic
surgery provider AESTHETIC
MEDICAL on October 25. The
former plummeted 26.5% on its
some of the above deals.
4HEû53ûSTOCKûMARKETûALSOû
performed well in the past
month, with the benchmark
S&P 500 index up 2.35%, mainly
on the consensus that China and
especially given the abysmal
outcome of a similar rush to list
last year.
4HEûSEVENû#HINA
the fourth quarter of 2018 had
delivered an average return of
53M ûAUDIOûSTREAMINGû lRSTûTRADINGûDAYûWHILEûTHEûLATTERû THEû53ûAREûMOREûLIKELYûNOWûTOû –27% as of last Tuesday’s close.
company LIZHIû53M ûLONG
slid 16.4%. seal a trade deal. As of last “Many of the live deals are too
term apartment leasing service )NCLUDINGû#HINAnTOn53ûLISTINGû Thursday, the index has gained small to arouse investors’
PHOENIX TREEû53MnM û HOPEFULSûWHOûlLEDûMONTHSûAGOû 21.2% in the year to-date. interest. Some are at a very early
biotech company I-MAB but have not launched yet, there development stage and some
53M ûAUTOûlNANCEû is now a backlog of 14 deals in SMALL DEALS come from volatile industries,”
company MEILI AUTOû53M û the pipeline. According to bankers, many of said another ECM banker.
and drone manufacturer EHANG “The Chinese issuers are these IPOs are relatively small Canaan clearly belongs to the
53M  rushing to seize the last window and backed by “friends and latter category. Bitcoin is

12 International Financing Review November 2 2019

 @ For daily news stories
visit www.ifre.com

existing shareholders.
Excluding the priority offer,
UK ECM still facing Brexit blockage
about 85% of the deal went to „ Equities Little expected to be resolved by end-January deadline
institutions, down slightly from
the 90% target pre-bookbuilding.
Investors failed to settle about
3.8% of the retail tranche, or
0.25% of the CBs, with those
notes taken up by the
bookrunners.
The CB has received an AAA
rating from Shanghai Brilliance.
BY ROBERT VENES
5+û%#-ûBANKERSûWEREûLEFTû
wondering why they bother
trying when the latest
EXTENSIONûOFûTHEû5+Sû
membership of the European
5NIONûTOû*ANUARYûûûWASû
"HATTACHARYYAûHEADûOFû5+û)0/û
origination at Peel Hunt.
“However, we will get
companies in front of
investors in the interim,
where it makes sense. In 2020
we can see the cycle starting
again. But with the current
most of the year and is now
mATûTOûWHEREûTHEûDEALûWASû
priced.
The impetus to follow a
similar path for the rest of this
year and in early 2020,
according to advisers, will be
necessity.
The bank will use the
proceeds to replenish core Tier
1 capital.
Citic Securities and Guotai Junan
Securities are the joint sponsors
on the deal and joint
bookrunners with Huatai United
Securities, Haitong Securities, and
CICC.
There are more CBs down the
lNALISEDûLASTûWEEKûJUSTûAHEADû
OFûTHEû5+ûPARLIAMENTûOPTINGûTOû
use the period to hold a
general election on December
12.
5+ûBANKERSûSTRUGGLEDû
through 2019 unable to
CONlDENTLYûADVISEûCLIENTSû
when there would be several
weeks of stability to enable
uncertainty, we expect
corporates to wait until 2020
for IPOs.”
Film special effects business
DNEGûISûTHEûONLYûCURRENTû5+û)0/û
in the market.
4HEREûHASûBEENûAûDROPûINû5+û
IPOs in 2019 but the fall in
volume has been reduced by
foreign companies opting to
“The overall attitude is that
you don’t do something unless
you have to do it,” said Adam
Young, co-head of equity
advisory at Rothschild. “We do
have clients who need to raise
money, so there will be some
transactional activity in the
5+û)FûITSûAûSITUATIONûWHEREû
DOMESTICû5+ûPOLITICSûDOESûNOTû
road. The CB proposals from
Qingdao Rural Commercial
Bank (Rmb5bn) and Jiangsu
Zijin Rural Commercial Bank
(Rmb4.5bn) have been approved
by shareholders and are seeking
regulators’ approval. The two
banks listed on the A-share
MARKETûINûTHEûlRSTûQUARTERûOFû
this year.
Minsheng Bank also said in
2017 that it would sell a
Rmb50bn CB issue, though little
progress has been made since
then. „
currently trading around
their IPOs to proceed and they
now face the same problem -
potentially for another six
months if another extension is
required.
Activity is focused on
preparation work for next
year, but with no idea if it will
be in vain.
“Our advice on IPOs has
been to wait until after the
Brexit extension and then see
where we are,” said Indranil
Cellnex rights issue attracts €100bn
„ Equities Clamour for paper leads to 0.000125% allocations
LISTûINû,ONDONûSUCHûASû5!%û
payments company Network
International. Bankers have
started to talk about reviving
Amsterdam for international
LISTINGSûINû%UROPEûSOû5+û)0/û
issuance could fall again in
2020.
,AWûlRMû$7&û'ROUPû
managed to complete its LSE
IPO in February ahead of the
then March 29 Brexit deadline,
but the stock has struggled for
have a massive impact, the
numbers ‘work’ and there’s a
strong strategic rationale,
then one proceeds with
caution. But one proceeds.”
Listed companies have an
easier path to market for
rights issues or follow-on deals
as a lot of the risks are
effectively priced in to their
valuation so they need only
avoid certain days, such as
around December 12. „
53ûAFTERûAûûSURGEûINû
the days after Chinese President
8Iû*INPINGûENDORSEDûBLOCKCHAINû
technology. The leading
cryptocurrency is still well
below the year’s high of
BY LUCY RAITANO
Spanish tower owner CELLNEX
TELECOM was overwhelmed
with around €100bn of
Cellnex remains the issuer of
the largest rights issue of the
year in Europe, pushing its
€1.2bn rights issue in March
into second place.
19.58% discount to TERP of
€35.87, on a 9-for-31 basis.
Banks earned a 170bp base
fee and will expect to be paid
the 50bp incentive fee.
53ûREACHEDûINû*UNEû
however.
The Canaan deal could decide
the fate of two peers currently
waiting in the wings. If it is a
success, EBANG INTERNATIONAL and
BITMAIN TECHNOLOGIES will feel
MOREûCONlDENTûABOUTûTHEIRûOWNû
prospects.
All three bitcoin mining
EQUIPMENTûMAKERSûlRSTû
applied for Hong Kong IPOs
BEFOREûTURNINGûTOûTHEû53ûASû
regulatory scrutiny was too
burdensome in Hong Kong.
Ebang and BitMain, which
orders for its €2.5bn rights
ISSUEûTOûlNANCEûTHEû
ACQUISITIONûOFû!RQIVASû5+û
telecoms division.
Take-up for the rights issue,
Cellnex’s second this year, was
99.53% leaving a tiny amount of
shares to meet the excess
demand.
Pro rata allocation meant
investors vying for additional
new shares received just
0.000125% of their requests.
)NVESTORSûMASSIVELYûINmATEDû
their orders due to the pro rata
approach to unsubscribed
Its March rights issue saw
take-up of 98.8% and was more
than 17 times subscribed.
A measure of how Cellnex’s
share price has developed
through the year is that both
rights issues represented a 29%
capital increase at a 20% TERP
discount but the second deal
RAISEDûMOREûTHANûDOUBLEûTHEûlRSTû
Demand was again bound to
be high as Cellnex’s share price
reached all-time highs of €42.05
on October 17, around 18.5%
higher than when the
acquisition and rights issue
Morgan Stanley took 20% of the
underwriting while fellow
global coordinators Goldman
Sachs and JP Morgan had 15% of
the risk each.
Of the bookrunners,
CaixaBank and Santander
had 9% each, BNP Paribas 6%
and Banca IMI, Citigroup,
Deutsche Bank, HSBC and
Mediobanca 4% each. Final
bookrunner UniCredit had
2% of the risk, the same as
co-leads Banco de Sabadell
and Societe Generale.
Cellnex has also found time
lLEDûCONlDENTIALLYûLASTûWEEKû shares, nonetheless the level of were announced. to visit the equity-linked market
BOTHûHOPEûTOûLISTûINûTHEû53û interest in a rights issue is Rights issue pricing was twice in 2019 with a tap and a
next year. „ remarkable. €28.85 per share, representing a new issue. „

International Financing Review November 2 2019 13

Top news

China looks to build euro curve

„ Emerging Markets First euro issue since 2004 comes amid lingering US trade tensions

BY CAROL CHAN, SUDIP ROY bond issue later this year, for euros given the volume of China is lower rated at A1/
depending on the market TRADEûWITHûTHEû%5û)TûISûTHEû%5Sû A+/A+, though the ratings from
The PEOPLE’S REPUBLIC OF CHINA is situation and feedback, second-biggest trading partner S&P and Fitch are unsolicited.
POISEDûTOûMAKEûITSûlRSTûEUROû
sovereign bond issue in 15
years, in a bid to further expand
its global presence amid slowing
domestic growth and persistent
TRADEûTENSIONSûWITHûTHEû53
The multi-billion euro bond
offering is set to be priced on
November 5 and is likely to
comprise three benchmark
tranches as China seeks to
become the latest emerging
RATEûBONDSûWITHû January 2028s are at plus 56bp,
according to a banker at one of
the euro trade’s lead managers.
China, now the world’s
second-largest economy, is
expanding its footprint in the
international bond markets. It
ended a decade-long absence
FROMûTHEû53ûDOLLARûMARKETûINû
October 2017, when it printed
53BNûOFûSOVEREIGNûBONDSûTOû
overwhelming demand.
It returned in October last
BEHINDûTHEû53ûANDûTHEû%5ûISû
China’s biggest trading partner.
While the structure of the
tranches has yet to be decided,
the sovereign is likely to avoid
CLASHESûWITHûITSû53ûDOLLARûBONDSû
Currently, China has dollar
benchmarks maturing in 2022,
2023, 2027, 2028 and 2048.
In a net roadshow, China said
it is considering issuing senior
UNSECUREDûlXED
The new euro bonds will be
unrated.
Investors are likely to
consider Israel (A1/AA–/A+) and
Chile (A1/A+/A) as the best
comps.
All three similarly rated
sovereigns have dollar bonds
maturing in 2028. China’s
October 2028s are bid at a
Z-spread of 56bp; Israel’s
markets sovereign to take
advantage of the attractive
coupons in the euro market.
The Chinese government
plans to host a ceremony on
November 6 in Paris to celebrate
YEARûFORûAûFURTHERû53BNûAGAINû
attracting strong demand
despite a global market sell-off
during bookbuilding.
-O&ûOFlCIALSûINû*ULYûHELDû
lXED
TENORSûOFûlVEûTOûûYEARSûWITHû
seven, 12 and 20-year tenors
preferred. The bonds will be
listed in London and Paris.
while Chile’s February 2028s are
at plus 73bp, according to
Tradeweb.
In euros, Israel’s January
2029s, the closest maturity to its
INCOMEûINVESTORûMEETINGSû TIGHT TARGET 53ûDOLLARûBONDûAREûBIDûATûMID

the euro issuance. Zou Jiayi, in Frankfurt and London and If China’s recent dollar deals are swaps plus 37bp. Chile has
vice-minister of the ministry of the market had been any guide, the government is February 2029s at plus 48bp.
lNANCEûWILLûATTENDûTHEûEVENT
4HEûISSUEûWILLûBEûTHEûlRSTûTIMEû
the sovereign has accessed the
single currency since 2004.
“It is a good time to issue as
trade talks seem to be
speculating that a potential
sovereign euro bond was on the
cards.
Several EM sovereigns across
the ratings spectrum, such as
Saudi Arabia, Kazakhstan, Ivory
likely to seek very tight pricing.
When the sovereign returned to
the dollar market two years ago,
it printed so tightly that it
repriced the dollar curves of
Chinese state-owned
China’s October 2028 dollar
bonds are bid at the equivalent
of plus 29bp in euros.
Depending on the tenors
chosen, euro investors should
still get a positive yield from the
progressing well,” said Leo Hu,
senior portfolio manager for
emerging markets debt at NN
Investment Partners. “China
CDS is trading close to its
historic lows for the last 10
years, and euro benchmark
bonds are still at negative rates.”
4HEREûWILLûBEûAûPOTENTIALû53û
dollar-denominated sovereign
#OASTûANDû5KRAINEûHAVEûTAPPEDû
the euro this year attracted by
compelling yields.
Building a euro curve will
enable China to diversify its
investor base, having already
ISSUEDûINû53ûDOLLARSûOVERûTHEû
past two years.
0RICINGûANDûDIVERSIlCATIONû
aside, China has a natural need
enterprises, though SOEs’ euro
paper tends to be closely held
and is less liquid.
In its October 2017 offering,
#HINAûPRICEDûITSû53BNûOFû
SûANDû53BNûOFûSûATû
15bp and 25bp over Treasuries,
respectively. That was inside the
secondary curve of Triple A
rated Sweden.
deal.
Bank of China, Bank of
Communications, China
International Capital Corp, Bank of
America, Citigroup, Commerzbank,
Credit Agricole, Deutsche Bank,
HSBC, Societe Generale, Standard
Chartered and UBS are joint lead
managers and joint
bookrunners. „

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14 International Financing Review November 2 2019

 People

16
&
Credit Suisse
aims to hire
Markets
19 Elree Winnett
Seelig is 20 Macquarie
cuts back its
technology and named head of ESG cash equities business
healthcare bankers in Citigroup’s markets outside of Asia as
to help revive its business, as banks stiffer regulations and
underwriting and build up their green technology changes
advisory arm platforms crimp margins

„ FRONT STORY STRATEGY

Another revamp looms at HSBC

Interim CEO set to shift investment bank assets to Asia
HSBCûABANDONEDûAûKEYûPROlTûTARGETûANDûITSû (3"#ûDIDûNOTûGIVEûMANYûDETAILSûOFûITSû 1UINNûSAIDûOTHERûAREASûHADûGOODû
INTERIMûCHIEFûEXECUTIVEûPROMISEDûTOûTAKEû RESTRUCTURINGûPLANSûALTHOUGHûITûISûEXPECTEDû OPPORTUNITIESûTOOûINCLUDINGûTHEû-IDDLEû
hDECISIVEûACTIONvûTOûlXûUNDERPERFORMINGû TOûINCLUDEûTHOUSANDSûOFûJOBûCUTSûINûADDITIONû %ASTû#ANADAûANDû,ATINû!MERICA
AREASûAFTERûPROlTSûSLUMPEDûûINûTHEûLASTû
QUARTERûANDûITSûINVESTMENTûBANKû
UNDERPERFORMEDûRIVALS
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Credit Suisse
US big 5
banks avg

UBS

HSBC

BNPP

weighted avg
Deutsche

Europe

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directly comparable, Deutsche doesn’t disclose equities and
ECONOMICûENVIRONMENT BNPP doesn’t disclose advisory/underwriting revenues Thomas Blott, Steve Slater

International Financing Review November 2 2019 15

h4HOUSANDSûOFûWILDlREûVICTIMSûWHOûSTANDûBEFOREûTHEû
COURTûASûINVOLUNTARYûCREDITORSûAWAITûSOMEûRESOLUTIONvû
US BANKRUPTCY COURT JUDGE DENNIS MONTALI, P24

CS looks to hire bankers to revive IB

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Coben to return to BofA

Craig Coben WILLûRESUMEûASûVICE CHAIRMANûOFû INVESTIGATEDûAûREPORTEDûACCIDENTALûDISCLOSUREû AûSURPRISEûaMûCAPITALûINCREASEûTHEû
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Who’s moving where…

CITIGROUP has Robert Plowman Hansong Zhu is retiring venture, Goldman
appointed Emre Eler as across the sector. as GOLDMAN Sachs Gao Hua. Wei
a managing director in Costa joined from SACHS’s co-head of its Cai, who is co-head of
its consumer and retail Mediobanca in China investment China investment
investment banking February 2018 and banking business. Zhu, banking alongside Zhu
team for EMEA. Eler Plowman has been who has been with at Goldman, will
joined from JP Morgan, with Citi since 2012 Goldman for 19 years, become the sole head
where he worked in the after eight years at was also head of the of the unit.
same sector, in London Rothschild. industrial and natural
and New York, for resources group in Asia
nearly 20 years. Eler ex-Japan and general
will work closely with manager of the bank’s
Roberto Costa and China securities joint

16 International Financing Review November 2 2019

 People
& Markets
YEAR ON YEARûRISEûINûTHIRD QUARTERûREVENUESû
ACROSSûITSûCORPORATEûANDûINSTITUTIONALûBANKûTOû
Lazard cuts 200 jobs amid M&A slump
õBN LAZARDûISûSLASHINGûABOUTûûJOBSûFROMûITSû .ORTHû!MERICAûMADEûUPûFORûAûDECREASEûINû
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ANALYSTSûTHATûFUTUREûGROWTHûOPPORTUNITIESû ,AZARDûALSOûAPPOINTEDûCharles-Henri Filippi
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Owen Wild WASûmATûATû53MûASûDEALûCLOSINGSûINû Philip Scipio, Christopher Spink

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

Jean-Marc Mercier, the Middle East. He Oliver Holbourn has from UK Financial
HSBC‘s global co-head will also take the lead been made made head Investments, the
of debt capital in driving technology of purpose, government body
markets, has been strategy. Mercier will sustainability and responsible for the
appointed vice- remain based in ventures at ROYAL RBS holding, where he
chairman of capital London and report to BANK OF SCOTLAND was chief executive. He
markets. Mercier will Alexi Chan and Ray in addition to his role joined UKFI in 2013
focus on deepening Doody, global co- as director of strategy. from Bank of America,
HSBC’s client heads of capital He will report directly where he spent 13
proposition for users of markets in global to Alison Rose, who years, including as
capital markets, with a banking. Chan is also took over as CEO on head of UK ECM
particular focus on co-head of DCM. Friday. Holbourn origination.
clients in Europe and joined RBS last year

International Financing Review November 2 2019 17

Bellwether
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WITHû#HRISTIANû3EWINGSûVISIONûFORû$EUTSCHEûASûAûSTRAIGHT h-ISSINGû9OUvûWHILEûAVOIDINGûh/NEû&ALSEû-OVEvûh.Oû3ECONDû
LACEDûCORPORATEûBANKûTHATûLOOKSûAFTERûTHEûHOPESûANDûDREAMSû #HANCEvûANDûh'ONEûFORû'OODvû7ELCOMEûBACKû„

Who’s moving where…

„ Michael Paulus has sector group head for „ PIMCO has hired the past five years as „ Karine Delvallee has „ Former Bank of
rejoined CITIGROUP APAC at JP Morgan Annisa Lee from head of Asia ex-Japan been appointed as Israel governor Jacob
as head of the Asia- and held similar roles Nomura to head its flow credit analysis at head of BNP Frenkel is retiring
Pacific public sector with HSBC and Asia Pacific credit Nomura. She joined PARIBAS‘ Australia at the end of the
group, based in Hong Citigroup. Paulus research. Based in Nomura following its branch. Delvallee was year as chairman
Kong. Paulus was began his career as an Hong Kong, she acquisition of Lehman most recently chief risk of JP MORGAN‘s
managing director at economist at the reports to Christian Brothers’ European officer for Asia-Pacific, international business.
OpenDoor Securities, a Federal Reserve Bank Stracke, global head of and Asian assets in based in Hong Kong. Frenkel has been
New Jersey-based of New York and has credit research, and 2008 and previously She joined BNP advising the bank for
trading platform for also worked at will lead a team of worked for ING and Paribas in 1993. She about a decade and
the US Treasury Dresdner Bank, Bank eight credit analysts in Bank of East Asia. replaces James will remain a senior
market. He was of America and the US Tokyo, Hong Kong and Gibson, who has adviser.
previously public Treasury. Sydney. Lee has spent relocated to Tokyo.

18 International Financing Review November 2 2019

 People
& Markets
Barclays, Citi bulk up ESG teams
BARCLAYSûISûLAUNCHINGûAûNEWûSUSTAINABLEû BUILDINGûSOLUTIONSûTOû%3'ûPROBLEMSûANDû /$ONNELLûGLOBALûHEADûOFûINVESTORûSALESû
ANDûIMPACTûBANKINGûGROUPûTOûlNDûANDû ADVISEûONûlNANCINGûANDûSTRATEGICû ANDûRELATIONSHIPûMANAGEMENTûANDû,EOû
INVESTûINûCOMPANIESûATûTHEûFOREFRONTûOFûTHEû ACQUISITIONSûTOûACCELERATEûTHEIRûGROWTHûANDû !RDUINIûHEADûOFû-33ûFORû%UROPEû-IDDLEû
BATTLEûAGAINSTûCLIMATEûCHANGEûANDûCITIGROUP IMPACT %ASTûANDû!FRICA
HASûCREATEDûAûNEWûROLEûTOûLEADû "ARCLAYSûSAIDûTHEûTEAMûWILLûINCORPORATEû
ENVIRONMENTALûSOCIALûANDûGOVERNANCEû SûSOCIALûIMPACTûBANKINGûINITIATIVEûANDû “We are reshaping our business
ISSUESûINûITSûMARKETSûARMûASûBANKSûRAMPû WORKûWITHûDEBTûCAPITALûMARKETSû
to reflect client demand and our
UPûTHEIRû%3'ûCREDENTIALS SPECIlCALLYû3USANû"ARRONûHEADûOFûGREENû
"ARCLAYSûTAPPEDûBrian ReillyûTOûLEADûTHEû ANDûSUSTAINABLEû$#-ûANDûTHEûPRIVATEû
regulators’ and policy makers’
GROUPûNAMINGûHIMûGLOBALûHEADûOFû CAPITALûMARKETSûTEAMûHEADEDûBYû!NGUSû agendas”
SUSTAINABLEûANDûIMPACTûBANKINGû(EûWILLû 7HELCHEL
CENTRALISEû"ARCLAYSûWORKûWITHûCOMPANIESû )TûWILLûALSOûWORKûWITHû"ARCLAYSû
INVOLVEDûINûSOLVINGûENVIRONMENTALûANDû SUSTAINABILITYûANDû%3'ûTEAMûTOûCONTRIBUTEû
SOCIALûCHALLENGESûANDûITSûWORKûWITHûCLIENTSû TOûTHEûBANKSûSUSTAINABILITYûANDûCLIMATEû
LOOKINGûFORûSUSTAINABLEûlNANCING CHANGEûSTRATEGYûASûITûALIGNSûITSûCORPORATEû 4HEûMEMOûSAIDû%3'ûANDûSUSTAINABLEû
POLICYûWITHûCLIENT FACINGûTEAMS lNANCEûAREûINCREASINGLYûSIGNIlCANTûFORû
"ARCLAYSûHASûISSUEDûMOREûTHANû53BNû CLIENTSûSTRATEGYûANDû#ITIûNEEDEDûTOûPROVIDEû
“We believe that sustainability OFûGREENûSUSTAINABLEûORûSOCIALûBONDSûFORû PRODUCTSûSOLUTIONSûANDûhTHOUGHTû
and social impact will be a CLIENTSûSINCEû*ANUARYûûASûWELLûASû LEADERSHIPûANDûMARKETûCOLOURvûTOûHELPû
significant area of growth in the ADVISINGûONûEQUITYûOFFERINGSûANDûPRIVATEû THEMû4HATûINCLUDESûHOWû%3'ûCANûBEûUSEDû
years to come” PLACEMENTSûFORûCOMPANIESûINûTHEû%3'û TOûHELPûMANAGEûRISKûTRANSITIONûINVESTMENTû
SPACEûANDûSUSTAINABILITY LINKEDûCREDITû PORTFOLIOSûORûADAPTûBUSINESSES
FACILITIES 7INNETTû3EELIGûWILLûBEûBASEDûINû,ONDONû
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4HEûNEWûGROUPûISûCOMINGûTOGETHERû SOCIALûIMPACTûWILLûBEûAûSIGNIlCANTûAREAûOFû WHEREûSHEûWASûHEADûOFûENERGYûCLIENTû
FOLLOWINGûTHEûDEPARTUREûOFû"ARCLAYSûGLOBALû GROWTHûINûTHEûYEARSûTOûCOMEûANDûITûISû MANAGEMENTûFORûCOMMODITIESû3HEû
HEADûOFûGREENûBANKINGû2HIAN -ARIû IMPORTANTûFORû"ARCLAYSûTOûIDENTIFYûANDû PREVIOUSLYûWORKEDûINûNATURALûRESOURCESû
4HOMASû3HEûLEFTûINû-AYûTOûJOINûTHEû'REENû ACTIVELYûPURSUEûAREASûOFûGROWTHûINûTHEû INVESTMENTûBANKINGûATû,EHMANû"ROTHERSû
&INANCEû)NSTITUTEûAFTERûLESSûTHANûAûYEARûINû MARKETûINûORDERûTOûBESTûSERVEûOURûCLIENTSvû ANDûINûPROJECTûlNANCEûATû.ATIONS"ANKû3HEû
THEûROLE SAIDû*OEû-C'RATHûGLOBALûHEADûOFûBANKING ALSOûSPENTûûYEARSûWORKINGûINû
h#OMPANIESûWITHûAûSTATEDûMISSIONûOFû CONSERVATIONûANDûCOMMUNITYû
ADDRESSINGûTHEûWORLDSûMOSTûPRESSINGû “CLIENT DEMAND” DEVELOPMENTûINûSOUTHERNû!FRICAûANDû
SOCIETALûANDûENVIRONMENTALûCHALLENGESûAREû )TûISûNOTûALONEû53ûRIVALû#ITIûLASTûWEEKû CONSULTINGûFORûVENTUREûCAPITALûlRMSû
CONTINUALLYûEMERGINGûINûEVERYûSECTORvû APPOINTEDûElree Winnett SeeligûPREVIOUSLYû INVESTINGûINûRENEWABLEûENERGY
2EILLYûSAIDû!TûTHEûSAMEûTIMEûESTABLISHEDû HEADûOFûSTRATEGYûFORûCOMMODITIESûASûHEADû 4HEûMEMOûSAIDû7INNETTû3EELIGûWILLû
GLOBALûCOMPANIESûAREûINTEGRATINGû OFû%3'ûINûITSûMARKETSûANDûSECURITIESû WORKûCLOSELYûONû%3'ûWITHûOlga Sviatochevskiû
SUSTAINABILITYûINTOûTHEIRûCORPORATEû SERVICESûBUSINESSûAûNEWûROLE WHOûISûJOININGûTHEû-33ûTEAMûFROMûTHEû
STRATEGIESûANDûLOOKINGûTOûPARTNERûWITHû h!Sû#ITIûCONTINUESûTOûSHOWûLEADERSHIPûONû %-%!ûCORPORATEûSTRATEGYûBUSINESS
INNOVATIVEûSTART UPûlRMS SUSTAINABILITYûISSUESûWEûAREûRESHAPINGûOURû 7INNETTû3EELIGûWILLûREPORTûTOû/$ONNELLû
4HEûGROUPûWILLûWORKûWITHû"ARCLAYSû BUSINESSûTOûREmECTûCLIENTûDEMANDûANDûOURû ANDû!RDUINIûWHOûWILLûCO CHAIRûAûNEWLY
COVERAGEûTEAMSûTOûIDENTIFYûANDûFOLLOWû REGULATORSûANDûPOLICYûMAKERSûAGENDASvû FORMEDû%3'û-33ûSTEERINGûCOMMITTEE
ENTREPRENEURSûANDûGROWINGûCOMPANIESû ACCORDINGûTOûAûMEMOûTOûSTAFFûFROMû*IMû Steve Slater, Tessa Walsh

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

„ Will Marshall, a „ WILMINGTON „ Jorge Grasa has „ MAN GLOBAL „ NEWTON equities, and will
managing director in TRUST has appointed taken on additional PRIVATE MARKETS, INVESTMENT report to chief
equity advisory at Alex Pashley as its sterling funding part of hedge fund MANAGEMENT, investment officer
ROTHSCHILD, has left European head of responsibilities at the Man Group, has a subsidiary of Bank Curt Custard.
after nine years at the structured finance EUROPEAN named Bernd Kerner of New York Mellon,
firm. Marshall worked business. Based in INVESTMENT BANK, as investment director has appointed Ilga
on a number of IPOs, London, Pashley will sources said. Grasa within its European Haubelt as head of
including for Swedish, lead a team of nine has worked for the private debt team. equity opportunities,
Turkish, Finnish and professionals in London. Luxembourg Based in London, based in London.
Czech firms. He Pashley previously supranational since Kerner will focus on Haubelt joined from
previously worked in spent nine years at January 2011. sourcing, executing and Deka Investment,
ECM at Merrill Lynch, Wells Fargo’s corporate managing European where she was the
HSBC and Nomura. trust business. real estate loans. head of global

International Financing Review November 2 2019 19

h7HILEûWEûHAVEûMANYûPARTSxPERFORMINGûWELLûWEûALSOû
HAVEûPARTSûWHEREûTHEûPERFORMANCEûISûUNACCEPTABLEv
HSBC INTERIM CEO NOEL QUINN, P15

Macquarie cuts back cash equities

MACQUARIEûHASûBECOMEûTHEûLATESTûBANKûTOûCUTû 4HEûPARTNERSHIPûWILLûSTARTûINûEARLYûû CHIEFûEXECUTIVEû"OBû$IAMONDSû!TLASû
BACKûCASHûEQUITIESûINûTHEûWAKEûOFûSTIFFERû 2ESEARCHûFROMûTHEIRûCOMBINEDûûANALYSTSû -ERCHANTû#APITALûINVESTEDûINûTHEûlRMû
REGULATIONSûANDûTECHNOLOGYûDEVELOPMENTSû WILLûBEûCO
BRANDEDûANDûDISTRIBUTEDûACROSSûTHEû WHICHûHASûEQUITYûTRADINGûANDû%#-ûJOINTû
CRIMPINGûMARGINS JOINTûPLATFORMû4HEûSERVICEûWILLûALSOûOFFERû VENTURESûWITHû#REDITû!GRICOLEû5NI#REDITû
4HEû!USTRALIANûBANKûSAIDûITûWILLûLARGELYû GLOBALûPROGRAMMEûTRADING 2ABOBANKûANDûSEVERALûOTHERû%UROPEANû
WITHDRAWûFROMûTHEûBUSINESSûOUTSIDEûITSûCOREû -ACQUARIEûSAIDûITûISûSEEKINGûSTRATEGICûPARTNERSû BANKS
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!FRICAûANDûTHEû!MERICASû'LOBALLYûûPEOPLEû -ACQUARIEûWILLûSTILLûSERVICEûGLOBALû TOûITSûRESEARCHûSERVICEûINûTHEûCURRENTûYEARû
WORKûINûCASHûEQUITIESûATûTHEûlRM INSTITUTIONALûCLIENTSûWITHû!SIA
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hINûRESPONSEûTOûSTRUCTURALûCHANGESûINûTHEû SECURITIESûGLOBALLYûONûBEHALFûOFûITSûCORPORATEû 2OBERTû"ULLERûGLOBALûHEADûOFûACCOUNTû
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%UROPEû"ERENBERGûLAIDûOFFûûSTAFFûANDûINû COMMODITIESûTRADING MOREûTHANûOTHERSûIFûYOUûINCLUDEûTHEû5+ûANDû
!PRILû.OMURAûCUTûSOMEû%UROPEANûPOSITIONSû -ACQUARIEûONû&RIDAYûREPORTEDûAûRECORDû DOUBLEûANYONEûELSEûIFûYOUûDONTvûHEûTOLDû)&2
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-ACQUARIEûWANTSûTOûRETAINûAûPRESENCEûINû
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MARKETSûHADûAûSTRONGûlRSTûHALFûWITHûPROlTû
CLIMBINGûûTOû!BNû%QUITIESûREVENUESû
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HAVEûTOûHAVEûUSûASûONEûTHEIRûMAJORûRESEARCHû
PROVIDERSv
#ADIOUûSAIDûTHEûlRMûWOULDûCONSIDERû
OTHERûDEALSûh7EûAREûSTILLûOPENûTOûOTHERû
COOPERATIONûBUTûAREûNOTûACTIVELYûLOOKINGûATû
WITHû+EPLERû#HEUVREUXûALLOWINGûCLIENTSûOFû KEPLER GROWTH THEûMOMENTv
EACHûENTITYûTOûACCESSûTHEûOTHERSûSERVICESû +EPLERû#HEUVREUXûHASûGROWNûSINCEû-I&)$û))û Christopher Spink
4OGETHERûTHEYûWILLûCOVERûûSTOCKS WASûIMPLEMENTEDû,ASTûYEARûFORMERû"ARCLAYSû Additional reporting by Thomas Blott

StanChart stays cautious

STANDARD CHARTEREDûEXPRESSEDûDOUBTûABOUTû PLANSûFORûMOREûMAJORûRESTRUCTURINGûOFûITSû BANKûLEVYûISûACCOUNTEDûFORû(EûALSOûWARNEDû
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INûPRE TAXûPROlTûFORûTHEûTHIRDûQUARTER THIRD QUARTERûPROlTûINûFOURûYEARSûWITHû REVENUE GROWTH
#HIEFûEXECUTIVEû"ILLû7INTERSûINû&EBRUARYû UNDERLYINGûPRE TAXûPROlTûUPûûYEARûONûYEARûTOû !LLûFOURûBUSINESSûUNITSûGREWûDURINGûTHEûTHREEû
SETûOUTûHISûSECONDûTHREE YEARûTURNAROUNDû 53BNûEXCLUDINGû53MûRESTRUCTURINGû MONTHSûTOû3EPTEMBERûûWITHûCORPORATEûANDû
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WHICHûINCLUDEDûIMPROVINGûRETURNûONû ANALYSTûFORECASTSûCOMPILEDûBYûTHEûBANK CAPITALûMARKETSûADVISORYûTRADINGûANDûTHEû
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DISAPPOINTINGûTHIRD QUARTERûRESULTSûANDû WILLûBEûLOWERûFORûTHEûFULLûYEARûWHENûTHEû5+û Thomas Blott

20 International Financing Review November 2 2019

 0EOPLE
 -ARKETS
Capital markets week ahead:
Casino, AbbVie, China
FAITES VOS JEUX! &RENCHûSUPERMARKETûCHAINû SOVEREIGNûISSUERûTOûBEûDRAWNûTOûEUROSûATTRACTEDû %NELûnûAûBIGûISSUERûINûTHEûSPACEûnûTOûDUMPûTHEû
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International Financing Review November 2 2019 21

h7EûHAVEûLOSTûGROUNDûBUTûWEûHAVEûPLANSûTOûINVESTû
INûRECRUITMENTû4HATûDOESNTûHAPPENûOVERNIGHTv
CREDIT SUISSE CEO TIDJANE THIAM, P16

FEE TABLES OCTOBER 2019

Bond houses drive investment banking fees

GLOBAL INVESTMENT BANKING FEES 4HISûYEARSûSURPRISINGLYûSTRONGûBONDûMARKETû 4HEû3WISSûBANKûHASûBEENûlGHTINGûFORûSIXTHû
Managing No of Total Share CONTINUEDûTOûDRIVEûINVESTMENTûBANKINGûFEESû SPOTûWITHûBARCLAYSûALLûYEARû!TûTHEûENDûOFû
bank or group issues US$(m) (%) DURINGû/CTOBERû,OWER THAN EXPECTEDûRATESû !UGUSTûITûWASûAHEADûOFûTHEû5+ûLENDERûBUTûHADû
1 JP Morgan 3,847 5,535.4 6.6 HAVEûPROVOKEDûAûWAVEûOFûISSUANCE SLIPPEDûBEHINDûITûBYûTHEûENDûOFû3EPTEMBERû
2 Goldman Sachs 2,222 4,863.6 5.8 3OMEû53BNûOFûINVESTMENTûBANKINGû .OWûITûHASûREGAINEDûSIXTHûSPOTûBUTûISûONLYû
3 BofA 3,304 4,397.0 5.3 FEESûSOûFARûTHISûYEARûHAVEûCOMEûFROMûBONDû 53MûAHEADû/NEûDEALûCOULDûCHANGEûTHAT
4 Morgan Stanley 2,852 4,142.3 5.0 UNDERWRITINGûACCORDINGûTOû2ElNITIVûDATAû ,ASTûWEEKû#REDITû3UISSEûCHIEFûEXECUTIVEû
5 Citigroup 3,107 3,683.4 4.4 4HATûEQUATESûTOûûOFûTHEûTOTALû53BNû 4IDJANEû4HIAMûADMITTEDûHISûINVESTMENTû
6 Credit Suisse 1,667 2,629.4 3.2 GENERATEDûSOûFARûTHISûYEARû4OTALûFEESûAREû BANKINGûANDûCAPITALûMARKETSûDIVISIONûWASû
7 Barclays 2,384 2,627.9 3.1 DOWNûûYEAR ON YEARû"YûCONTRASTûEQUITYû HAVINGûAûTOUGHûYEARûSINGLINGûOUTûSOMEû
8 Deutsche Bank 2,370 2,036.3 2.4 ISSUANCEûONLYûPRODUCEDû53BNûORûû CANCELLEDû-!ûDEALSûASûHITTINGûITSûFEEûPOOL
9 Wells Fargo 2,611 1,803.5 2.2 OFûTHEûFEEûPOOL 4HEûBANKûISûALSOûLOSINGûGROUNDûINûTHEû
10 Mizuho Financial 2,799 1,623.1 1.9 4HATûHASûPLAYEDûINTOûTHEûHANDSûOFûMAJORû !MERICASûWHICHûACCOUNTSûFORûûOFûTOTALû
11 HSBC 2,576 1,603.7 1.9 BONDûHOUSESûJP MORGANûBANK OF AMERICA and GLOBALûFEESû#REDITû3UISSEûHASûSLIPPEDûFROMû
12 RBC CM 1,829 1,510.5 1.8 CITIGROUPûOVERûEQUITYûSPECIALISTSûGOLDMAN SIXTHûINûTHISûREGIONûATûTHEûENDûOFû*ULYûTOû
13 BNP Paribas 1,932 1,365.9 1.6 SACHS and MORGAN STANLEYû4HEûLATTERûTWOû EIGHTHûNOWûALLOWINGû"ARCLAYSûANDûWELLS
14 UBS 924 1,274.4 1.5 HAVEûALSOûLOSTûTHEIRûTOPûPOSITIONSûINûTHEû FARGOûTOûLEAPFROGûIT
15 MUFG 2,120 1,227.7 1.5 EQUITYûSPACEûTOû*0û-ORGANûTHISûYEARûASûWELL !NOTHERûMAJORûREGIONALûWINNERûTHISûYEARû
16 Sumitomo Mitsui 2,311 1,198.1 1.4 !LLûOFûTHEûlVEûMAJORû53ûHOUSESûASIDEûFROMû ISûMIZUHOû)TûRANKSûBEHINDû"ANKûOFû#HINAûFORû
17 Bank of China 2,844 1,177.6 1.4 #ITIûHAVEûNOWûGENERATEDûMOREûTHANû53BNû FEESûINû!SIAûBUTûITSûSECONDûPOSITIONûINûTHEû
18 Jefferies 752 987.6 1.2 INûFEESûEACHûTHISûYEARû4HEYûHAVEûBUILTûUPûAû REGIONûHASûSEENûITûOVERTAKEûHSBCûGLOBALLYû
19 Citic 3,283 862.2 1.0 SIGNIlCANTûLEADûOVERûNEARESTûCOMPETITORû MOVINGûUPûTOûTHûFROMûTHûATûTHEûSAMEû
20 BMO CM 1,223 795.5 1.0 CREDIT SUISSEûWHICHûHASûPRODUCEDû53BNû TIMEûLASTûYEAR
Total 46,359 83,431.6 INûFEESû Christopher Spink

AMERICAS INVESTMENT BANKING ASIA-PACIFIC & JAPAN INVESTMENT BANKING EMEA INVESTMENT BANKING
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 2,691 3,941.4 9.6 1 Bank of China 2,692 1,061.9 4.7 1 JP Morgan 832 1,114.5 5.7
2 BofA 2,428 3,310.9 8.0 2 Mizuho Financial 1,833 1,025.9 4.5 2 Goldman Sachs 512 1,089.7 5.6
3 Goldman Sachs 1,296 3,227.7 7.8 3 Citic 3,275 859.4 3.8 3 Citigroup 737 950.6 4.8
4 Morgan Stanley 1,427 2,556.8 6.2 4 Sumitomo Mitsui 1,667 788.3 3.5 4 Morgan Stanley 388 843.7 4.3
5 Citigroup 1,892 2,260.2 5.5 5 Morgan Stanley 1,039 741.8 3.3 5 Barclays 661 774.8 3.9
6 Barclays 1,445 1,705.2 4.1 6 ICBC 2,499 692.2 3.1 6 BNP Paribas 946 765.7 3.9
7 Wells Fargo 2,458 1,695.6 4.1 7 Goldman Sachs 419 546.2 2.4 7 BofA 539 748.2 3.8
8 Credit Suisse 959 1,587.2 3.8 8 Bank of Commus 2,072 531.6 2.4 8 Deutsche Bank 663 689.2 3.5
9 RBC CM 1,529 1,252.7 3.0 9 China Construction Bk 2,489 514.2 2.3 9 HSBC 922 662.1 3.4
10 Deutsche Bank 911 1,081.6 2.6 10 Nomura 903 485.5 2.2 10 Credit Suisse 440 596.2 3.0
Total 16,054 41,242.8 Total 21,304 22,567.6 Total 9,457 19,621.3

GLOBAL BONDS GLOBAL EQUITIES GLOBAL LOANS

Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 2,157 1,727.1 6.1 1 JP Morgan 356 1,295.4 9.2 1 JP Morgan 1,084 972.3 5.6
2 BofA 1,700 1,586.3 5.6 2 Goldman Sachs 305 1,184.8 8.4 2 BofA 1,188 957.3 5.5
3 Citigroup 1,898 1,476.1 5.2 3 Morgan Stanley 350 1,179.3 8.4 3 MUFG 1,345 819.6 4.7
4 Morgan Stanley 2,029 1,173.9 4.1 4 BofA 251 834.2 5.9 4 Mizuho Financial 942 791.4 4.6
5 Goldman Sachs 1,235 1,029.7 3.6 5 Citigroup 259 717.9 5.1 5 Citigroup 775 668.2 3.9
6 Barclays 1,530 1,023.3 3.6 6 Credit Suisse 221 536.7 3.8 6 Sumitomo Mitsui 969 582.7 3.4
7 Credit Suisse 973 892.5 3.2 7 UBS 153 341.4 2.4 7 Wells Fargo 858 555.5 3.2
8 Wells Fargo 1,587 887.2 3.1 8 Barclays 146 339.6 2.4 8 HSBC 713 543.9 3.2
9 Deutsche Bank 1,702 810.4 2.9 9 Jefferies 124 286.3 2.0 9 Barclays 553 517.3 3.0
10 HSBC 1,736 778.4 2.7 10 Deutsche Bank 97 264.4 1.9 10 Bank of China 468 502.4 2.9
Total 26,110 28,330.2 Total 4,090 14,104.7 Total 8,345 17,256.3

1/1/2019 to 31/10/2019
Source: Refinitiv

22 International Financing Review November 2 2019

 People
& Markets
Campelli put in charge of Deutsche restructuring
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OFûCHIEFûTRANSFORMATIONûOFlCERûRESPONSIBLEûFORû !SûPARTûOFûTHEûREORGANISATIONûMichael Ilgner ,INSENMAIERûWILLûREPORTûTOû-ARKû,EWELLENû
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PRIVATEûBANKINGûANDûASSETûMANAGEMENTûASû GLOBALûHEADûOFûPUBLICûSECTORûORIGINATIONû Christopher Spink, Helene Durand

UBS loses head of ECM

4HEûRESTRUCTURINGûOFûUBS@SûINVESTMENTû ANDûNOWûGLOBALûHEADûOFû%#-ûJavier Martinez- CORPORATEûCLIENTûSOLUTIONSûFORûTHEû!MERICASû
BANKûANDûDISAPPOINTINGûTHIRD QUARTERû Piqueras ISûLEAVINGûTHEûBANKû INû-ARCHûû
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Nomura bounces back

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THANûAûYEARûAGOûALBEITûLESSûIMPRESSIVEûTHANû TOUGHûQUARTERûFORûBANKSûGLOBALLYûWHILEûITSû Thomas Blott

International Financing Review November 2 2019 23

h4HEREûNEEDSûTOûBEûONEûMANAGEMENTûBOARDûMEMBERûDEVOTINGû
ALLûHISûENERGIESûTOûTHISûCOMPREHENSIVEûTRANSFORMATIONv
DEUTSCHE BANK CHAIRMAN PAUL ACHLEITNER, P23

New fires force new mediation for PG&E

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Mozambique Tuna bond restructuring gets go-ahead

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Credit Suisse Asia loans head departs bankrupcty

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24 International Financing Review November 2 2019

 SSAR  Corporates  FIG  Covered Bonds  High-Yield  Structured Finance 
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„ FRONT STORY US HIGH-YIELD

Investors weary of shale drilling boom

Bond markets reassess pricing relationship
Drop in natural gas prices impacting issues
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THEûFRACKINGûBOOMûINûTHEû0ERMIANû"ASINûINû Source: Refinitiv David Bell

International Financing Review November 2 2019 25

Verizon extends Aussie corporate WEEK IN NUMBERS
curve with first 20-year bond €855bn „ THE ELIGIBLE UNIVERSE OF CORPORATE
BONDS AVAILABLE TO THE ECB AHEAD
US telecoms company boosts Kangaroo market with long-dated tenor OF ITS LATEST ROUND OF QUANTITATIVE
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26 International Financing Review November 2 2019

 BONDS SSAR/CORPORATES

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ALL INTERNATIONAL GREEN BONDS ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues €(m) (%)
1 Credit Agricole 56 9,342.25 7.6 1 JP Morgan 1,193 272,504.07 7.9 1 BNP Paribas 367 79,715.75 7.1
2 HSBC 66 8,471.47 6.9 2 Citigroup 1,026 237,045.11 6.8 2 Credit Agricole 301 66,669.50 5.9
3 BNP Paribas 46 8,125.70 6.6 3 Barclays 833 214,897.02 6.2 3 JP Morgan 266 66,260.15 5.9
4 BofA 35 6,466.51 5.2 4 BofA 856 199,141.46 5.7 4 SG 257 65,022.70 5.8
5 JP Morgan 44 6,235.48 5.0 5 HSBC 987 190,248.65 5.5 5 Deutsche Bank 296 64,535.47 5.7
6 Citigroup 46 6,162.54 5.0 6 Goldman Sachs 703 170,103.46 4.9 6 HSBC 342 64,520.51 5.7
7 Barclays 29 4,128.53 3.3 7 Deutsche Bank 735 153,679.06 4.4 7 Barclays 239 62,384.01 5.6
8 SG 22 3,877.16 3.1 8 BNP Paribas 680 148,168.63 4.3 8 UniCredit 294 59,450.73 5.3
9 Danske Bank 25 3,755.07 3.0 9 Morgan Stanley 601 136,456.86 3.9 9 Goldman Sachs 197 48,655.23 4.3
10 UniCredit 21 3,683.89 3.0 10 Credit Agricole 502 107,657.22 3.1 10 Citigroup 216 47,033.14 4.2
Total 249 123,600.87 Total 5,086 3,464,781.08 Total 1,488 1,122,575.44
Excludes social bonds and mixed use of proceeds. Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt,
US Global ABS/MBS. US Global ABS/MBS.
Source: Refinitiv SDC code: JG1 Source: Refinitiv SDC code: J1 Source: Refinitiv SDC code: N1

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING OCTOBER 31 2019

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Oct 29 2019 UK (i) £1.1bn 0.125 Aug 10 2028 -2.478 2.61
Oct 30 2019 Italy €2.5bn 0.35 Feb 1 2025 0.42 1.38
Oct 30 2019 Italy (FRN) €750m 0.301 Apr 15 2025 0.40 2.31
Oct 30 2019 Italy €3bn 1.35 Apr 1 2030 1.06 1.29
Oct 30 2019 Germany €2.464bn 0.00 Oct 18 2024 -0.58 1.73
Source: IFR

International Financing Review November 2 2019 27

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ALL US DOLLAR FIXED-RATE GLOBALS ALL INTERNATIONAL US$ BONDS ALL SOVEREIGN BONDS IN EUROS
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues €(m) (%)
1 JP Morgan 261 71,401.42 10.8 1 JP Morgan 799 183,995.58 9.8 1 JP Morgan 22 15,352.55 10.3
2 Citigroup 222 65,730.92 9.9 2 Citigroup 742 169,099.76 9.0 2 BNP Paribas 20 12,679.79 8.5
3 BofA 223 53,974.60 8.1 3 BofA 623 132,632.22 7.1 3 SG 18 11,726.81 7.9
4 Barclays 165 53,275.49 8.0 4 Barclays 510 122,381.49 6.5 4 Citigroup 20 10,682.95 7.2
5 Goldman Sachs 155 42,507.81 6.4 5 Goldman Sachs 493 109,011.17 5.8 5 Goldman Sachs 18 10,323.53 6.9
6 Morgan Stanley 129 37,576.51 5.7 6 Morgan Stanley 437 97,002.61 5.2 6 HSBC 13 10,217.96 6.8
7 Wells Fargo 172 32,160.81 4.9 7 HSBC 460 89,916.92 4.8 7 Credit Agricole 12 8,888.92 6.0
8 RBC 114 28,392.78 4.3 8 Wells Fargo 381 76,091.49 4.0 8 Barclays 14 8,627.40 5.8
9 HSBC 79 28,185.25 4.3 9 Credit Suisse 406 75,276.53 4.0 9 UniCredit 6 8,400.59 5.6
10 Deutsche Bank 78 23,576.46 3.6 10 Deutsche Bank 378 70,954.70 3.8 10 Banca IMI 5 5,790.18 3.9
Total 478 662,923.45 Total 2,373 1,880,155.91 Total 55 149,336.26
Excluding equity-related debt, ABS/MBS. Including Euro, foreign and global issues. Excluding equity-related debt, Excluding ABS/MBS.
US Global ABS/MBS.
Source: Refinitiv SDC code: O5 Source: Refinitiv SDC code: O1 Source: Refinitiv SDC code: N4

ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%)

1 Credit Agricole 28 8,585.07 8.7 1 JP Morgan 19 6,095.36 10.3 1 UniCredit 34 8,368.39 15.9
2 JP Morgan 24 8,531.31 8.6 2 Credit Agricole 16 5,824.98 9.8 2 DGZ-DekaBank 33 4,901.32 9.3
3 Deutsche Bank 25 7,617.25 7.7 3 HSBC 15 4,804.03 8.1 3 HSBC 31 4,062.56 7.7
4 Goldman Sachs 21 7,138.92 7.2 4 BofA 15 4,576.52 7.7 4 LBBW 25 3,903.19 7.4
5 BNP Paribas 28 7,009.34 7.1 5 Barclays 8 4,115.99 6.9 5 Deutsche Bank 20 2,446.70 4.7
6 BofA 14 6,380.38 6.5 6 Goldman Sachs 7 3,727.94 6.3 6 Barclays 12 2,308.74 4.4
7 Commerzbank 18 6,246.28 6.3 7 UniCredit 4 3,565.27 6.0 7 BayernLB 19 2,287.91 4.4
8 Barclays 22 5,901.62 6.0 8 Morgan Stanley 6 2,988.84 5.0 8 Nord/LB 17 2,205.95 4.2
9 SG 16 5,101.08 5.2 9 BNP Paribas 8 2,904.09 4.9 9 DZ Bank 17 2,059.12 3.9
10 NatWest Markets 10 5,096.69 5.2 10 Deutsche Bank 6 2,745.92 4.6 10 JP Morgan 10 1,604.03 3.1
Total 140 98,627.75 Total 56 59,420.87 Total 113 52,587.36

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

28 International Financing Review November 2 2019

 BONDS CORPORATES

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ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues €(m) (%)
1 JP Morgan 70 11,827.65 10.9 1 JP Morgan 444 104,962.68 10.5 1 BNP Paribas 174 28,387.30 7.6
2 BofA 69 10,346.54 9.5 2 BofA 398 102,600.26 10.3 2 Barclays 92 27,079.68 7.3
3 Citigroup 55 10,173.10 9.4 3 Citigroup 363 93,382.78 9.4 3 Deutsche Bank 124 23,608.96 6.3
4 Morgan Stanley 55 9,042.14 8.3 4 Morgan Stanley 282 72,632.41 7.3 4 JP Morgan 113 20,507.34 5.5
5 Wells Fargo 63 8,651.78 8.0 5 Goldman Sachs 272 70,435.29 7.1 5 BofA 90 20,092.57 5.4
6 Goldman Sachs 33 5,601.35 5.2 6 Wells Fargo 273 59,151.35 5.9 6 SG 119 19,900.13 5.3
7 Barclays 28 5,489.22 5.1 7 Barclays 217 57,616.18 5.8 7 Citigroup 109 19,367.62 5.2
8 Mizuho 28 5,123.51 4.7 8 HSBC 122 37,947.64 3.8 8 Credit Agricole 117 18,729.40 5.0
9 MUFG 33 4,662.07 4.3 9 MUFG 164 37,742.58 3.8 9 HSBC 116 17,922.35 4.8
10 Deutsche Bank 22 3,899.95 3.6 10 Mizuho 156 34,870.46 3.5 10 Goldman Sachs 86 16,582.19 4.5
Total 159 108,557.92 Total 906 998,384.50 Total 465 372,366.63
Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Excluding equity-related debt. FIGs, ABS/MBS.
and non corporates.
Source: Refinitiv SDC code: F6a Source: Refinitiv SDC code: F9 Source: Refinitiv SDC code: N8

International Financing Review November 2 2019 29

 4HEûCOMPANYûRETURNEDûTOûTAKEûADVANTAGEû "ANKERSûONûANDûAWAYûFROMûTHEûTRADEûSAWû 4HEû53ûCREDITûLASTûAPPEAREDûINûTHEûEUROû
OFûLOWûRATESûANDûPRE FUNDûFORûû )04SûAROUNDûBPûBACKûFROMûFAIRûVALUE MARKETûINûûWHENûITûISSUEDûAûõBNû
ACCORDINGûAûLEAD 0ROCEEDSûFROMûTHEûBONDûWILLûBEûUSEDûTOû THREE TRANCHEûDEALûSPANNINGûAûû*UNEûû
h4HEYûSAWûTHEûMARKETûIMPROVEûINûTHEûLASTû FUNDûAûTENDERûFORûOUTSTANDINGû53ûDOLLARû û*UNEûûANDûAûû*UNEûû
TWOûWEEKSûANDûTHEYûALSOûMADEûTHEûINTERNALû BONDSû4WOûWEEKSûAGOûTHEûCORPORATEû 4HEûLONGESTûOFûTHOSEûTRANCHESûWASûBIDûLASTû
DECISIONûTOûLOOKûATûSOMEûRElNANCINGvûSAIDûAû ANNOUNCEDûTHEûCASHûTENDERûOFFERûFORûUPûTOû 4UESDAYûATûBPûONû4RADEWEB
SECONDûLEADû 53BNûFORûûOUTSTANDINGûNOTESûTHEûOFFERû 4HESEûAREûTHEûBORROWERSûONLYûOUTSTANDINGû
BayernLBûCommerzbankûNatWest Markets EXPIRINGûONû.OVEMBERûû EUROûISSUESû
and SMBC NikkoûSTARTEDûMARKETINGûATû)04SûOFû "ANKERSûPOINTEDûTOûTHISûASûANOTHERû 4HEûLASTûCORPORATEûTOûTARGETûTHEû YEARû
SWAPSûPLUSûBP BPûWITHûLEADSûSEEINGûFAIRû EXAMPLEûOFûAû53ûBORROWERûLOOKINGûTOûLOCKûINû PARTûOFûTHEûEUROûCURVEûWASûBIOTECHNOLOGYû
VALUEûINûTHEûMID S LONGERûFUNDINGûATûAûLOWERûCOUPONûCOMPAREDû COMPANYû4HERMOû&ISHERû"AA"""""" û
!LONGSIDEûTHEû"AA"""ûISSUERSûOWNû WITHûWHATûISûAVAILABLEûINû53ûDOLLARS WHICHûINû3EPTEMBERûPRINTEDûAûõBNûû
BONDSûINCLUDINGûITSûLONGESTûOUTSTANDINGû h4HEûISSUERûSIGNALEDûTHEYûWANTEDûTOûDOûAû /CTOBERûûASûTHEûLONGESTûPARTûOFûAûõBNû
TRADEûAûõMûû&EBRUARYûûBIDûATû LARGERû YEARûTRANCHEvûSAIDûAûLEADûh)FûYOUû lVE PARTûTRANSACTIONûWITHû-ARCHûû
BPûONû4RADEWEBûLASTûWEEKûDEALSûFROMû LOOKûTHEREûWASûLESSûTIGHTENINGûONûTHEûLONGERû -ARCHûû/CTOBERûû/CTOBERûû
%NGIEûANDû4ENNE4ûWEREûUSEDûASû BONDv ANDû/CTOBERûûMATURITIES
COMPARABLESû 3IZEDûATûõBNûTHEû YEARûLAUNCHEDûATû BNP ParibasûCitigroupûJP Morgan and
)NûMID /CTOBERû%/.ûRAISEDûõBNûVIAûû SWAPSûPLUSûBPûBPûINSIDEû)04Sû,EADSû Morgan StanleyûRANû%LIû,ILLYSûTRADE
/CTOBERûSûANDûû/CTOBERûSûATû TIGHTENEDûTHEûSPREADûONûTHEûõMû YEARû
BPûANDûBPûOVERûSWAPSû4HEûNEWûSû BYûBPûTOûSWAPSûPLUSûBPû LEASH ON LEVERAGE
LAUNCHEDûATûBPûAûMEREûBPûMOREûFORûANû 4HEûTOTALûõBNûSIZEûOFûTHEûTRADEûCAMEû DOVER CORPORATIONûMEANWHILEûCOMBINEDûAû
EXTRAûlVEûYEARSû SLIGHTLYûHIGHERûTHANûTHEûEXPECTEDûõBNû RETURNûTOûTHEûEUROûMARKETûWITHûAû53ûDOLLARû
4HEûISSUERûCAPITALISEDûONûSOMEûMODESTû AMOUNT BONDûTOûTAKEûOUTûSOMEûOFûITSûEXISTINGûDEBTûASû
TIGHTENINGûINûSECONDARYûWITHûTHEûTWOûBONDSû /NûAûYIELDûBASISûTHEûEUROûTRADEûCAMEû THEûCOMPANYûKEEPSûAûTIGHTûLEASHûONûLEVERAGE
NOWûBIDûATûBPûANDûBPû THROUGHûTHEûISSUERSû53ûDOLLARûLEVELSû 4HEû53ûINDUSTRIALûEQUIPMENTû
4HATûTRADEûWASûALSOûAûQUICKûRETURNûTOû ALTHOUGHûTHATûMIGHTûNOTûBEûTHEûCASEûONûAû MANUFACTURERû"AA""" ûBEGANûMARKETINGû
MARKETû4HEûCOMPANYûHADûALREADYûPRINTEDû SPREADûBASISûFORûTHEûLONGERûTRANCHEû ANûEXPECTEDûõMûEIGHT YEARûATûSWAPSûPLUSû
TWOûõMûGREENûBONDSûINûLATEû!UGUSTû ACCORDINGûTOûAûLEAD BP BPû!FTERûBPûOFûMOVEMENTûFROMû
THOUGHûTHEYûWEREûlVEûANDû YEARû
MATURITIESû ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN STERLING
h4HEREûAREûPROBABLYûAûFEWûINVESTORSûOUTû BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
THEREûASKINGûWHYûWHATûTHATûTYPEûOFû Managing No of Total Share Managing No of Total Share
QUESTIONvûSAIDûTHEûBANKERûAWAYûABOUTûTHEû bank or group issues €(m) (%) bank or group issues £(m) (%)
ISSUERSûRETURNûTOûTHEûMARKET 1 BNP Paribas 293 67,001.13 7.2 1 Barclays 27 2,847.75 13.5
4HISûDIDûNOTûWEIGHûONûDEMANDûTHOUGHû 2 JP Morgan 206 57,030.28 6.1 2 NatWest Markets 23 2,557.23 12.1
WITHûBOOKSûCLOSINGûATûOVERûõBNû4HEûBONDû 3 Credit Agricole 230 56,627.68 6.1 3 HSBC 23 2,001.64 9.5
WILLûPRICEûTHROUGHûFAIRûVALUEûATûBPûINSIDEû 4 HSBC 278 55,726.67 6.0 4 RBC 16 1,496.58 7.1
THEûBP BPûGUIDANCEûRANGEû 5 SG 198 55,685.21 6.0 5 BNP Paribas 13 1,298.42 6.1
h)TûWASûTHEûPERFECTûTIMINGû4HEREûISûPLENTYû 6 Barclays 190 54,989.34 5.9 6 Lloyds Bank 13 1,291.95 6.1
OFûCASHûTOûPUTûTOûWORKûBECAUSEûOFûBLACKOUTSû 7 Deutsche Bank 223 51,698.12 5.6 7 JP Morgan 9 1,213.45 5.7
THEûCURRENTûRALLYûSTILLûHASûLEGSûANDûTHATûPARTû 8 UniCredit 222 50,030.84 5.4 8 Goldman Sachs 11 1,194.08 5.6
OFûTHEûCURVEûISûWELLûBIDvûSAIDûTHEûSECONDû 9 Goldman Sachs 134 38,356.00 4.1 9 Morgan Stanley 10 1,173.58 5.5
LEAD 10 Citigroup 155 37,796.44 4.1 10 Santander 12 1,054.98 5.0
4HEûTRADEûINûFACTûDREWûAûLARGERûBOOKûTHANû Total 1,157 931,211.68 Total 61 21,170.29
THEûOUTINGûTWOûWEEKSûAGOûWHENûCOMBINEDû Excluding ABS/MBS, equity-related debt.
ORDERSûREACHEDûõBN Source: Refinitiv SDC code: N9 Source: Refinitiv SDC code: N8a
%/.ûISûNOTûTHEûONLYûCORPORATEûMAKINGûTHEû
ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS INCLUDING
MOSTûOFûTHEûATTRACTIVEûCONDITIONSûINûEUROSû
EXCLUDING SECURITISATIONS SECURITISATIONS
WITHûCREDITSûSUCHûASû%NGIEûANDû5NIBAIL
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
2ODAMCOûRECENTLYûMAKINGûQUICKûRETURNSû
FOLLOWINGûISSUESûONLYûAûFEWûMONTHSûPRIORû Managing No of Total Share Managing No of Total Share
bank or group issues £(m) (%) bank or group issues SFr(m) (%)

ELI LILLY, DOVER REFIS TARGET COST- 1 Barclays 87 15,967.65 14.4 1 Credit Suisse 130 14,005.2 31.4
2 HSBC 90 13,425.37 12.1
EFFECTIVE EUROS 2 UBS 108 11,429.6 25.7
3 NatWest Markets 82 10,902.76 9.9 3 Verband Schweiz 19 4,740.7 10.6
4 RBC 57 8,312.61 7.5 4 ZKB 57 4,340.3 9.7
%LIû,ILLYûANDû$OVERû#ORPORATIONûADDEDûFRESHû
5 BofA 39 7,176.36 6.5 5 Raiffeisen 33 2,324.7 5.2
ACTIVITYûTOûTHEûGROWINGûmOWûOFû53ûBORROWERSû
6 Citigroup 35 6,834.83 6.2 6 BNP Paribas 15 1,824.1 4.1
ISSUINGûINûEUROSûTOûCAPITALISEûONûTHEû
7 Lloyds Bank 41 6,044.39 5.5 7 Deutsche Bank 11 963.0 2.2
FAVOURABLEûFUNDINGûCONDITIONS
8 JP Morgan 30 5,546.58 5.0 8 Basler Kantonalbank 13 895.6 2.0
ELI LILLYûSHOWEDûAûPREFERENCEûFORûTHEûULTRA
9 Deutsche Bank 26 4,569.34 4.1 9 Commerzbank 9 792.8 1.8
LONGûENDûWITHûITSûDUAL TRANCHEûRETURNûTOûTHEû
10 TD Securities 27 4,428.67 4.0 10 HSBC 3 650.0 1.5
EUROûMARKET
Total 236 110,655.60 Total 237 44,551.6
4HEûISSUERû!! ûCAMEûWITHûAû.OVEMBERû
Including preferreds. Excluding equity-related debt.
ûOFFEREDûATû)04SûOFûMID SWAPSûPLUSûBPû Including preferreds. Excluding equity-related debt.
AREAûANDûAû.OVEMBERûûATûBPûAREA Source: Refinitiv SDC code: K05a Source: Refinitiv

30 International Financing Review November 2 2019

 BONDS CORPORATES

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õMûûSûASûPARTûOFûTHEûEXERCISEû .OVEMBERûWASûAûGOODûIDEAûESPECIALLYûFORû OFûAûSTERLINGûHYBRIDûTHATûISûDUEûTOûBEûCALLEDûINû
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NO GROWûOFû YEARûFUNDINGûTHROUGHûBank of õMûû-ARCHû LEVERAGEûBELOWûXûINûTHEûMEDIUM TERMû
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International Financing Review November 2 2019 31

 3TEDINûISûINTEGRATINGûMOREûRENEWABLEû 3WEDISHûBEARINGûANDûSEALûMANUFACTURERû NAMESûINûTHEûSECTORûANDûSOûHASûAûBROADERû
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BUILDINGSû)33 /EKOMûHASûPROVIDEDûAûSECOND BONDS ISSUEûALLOWINGûLEADSûLloyds and NatWest
PARTYûOPINION 4HEûBORROWERûANNOUNCEDûTHEûMANDATEû MarketsûTOûTIGHTENûPRICINGûTOû'ILTSûPLUSûBPû
ING and NatWest MarketsûAREûGREENûBONDû WITHûDeutsche BankûNordea and SEBûASûLEADû FROMûINITIALûGUIDANCEûOFûPLUSûBPû
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ALL INTL AUSTRALIAN DOLLAR BONDS ALL INTL SWEDISH KRONA BONDS GLOBAL DIM SUM BONDS
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues A$(m) (%) bank or group issues SKr(m) (%) bank or group issues Rmb(m) (%)

1 TD Securities 61 5,935.69 14.7 1 Danske Bank 51 41,903.99 27.9 1 Bank of Comms 10 26,387.45 28.5
2 Nomura 54 5,544.59 13.7 2 SEB 34 36,914.88 24.6 2 HSBC 73 18,611.55 20.1
3 Westpac 24 3,454.47 8.5 3 Swedbank 31 21,339.92 14.2 3 Bank of China 9 12,022.73 13.0
4 ANZ 23 3,012.91 7.4 4 Nordea 24 18,926.80 12.6 4 Standard Chartered 22 7,371.90 8.0
5 RBC 31 3,011.74 7.4 5 Handelsbanken CM 14 15,417.99 10.3 5 Credit Agricole 13 4,726.39 5.1
6 Deutsche Bank 24 2,911.54 7.2 6 DNB 9 9,583.47 6.4 6 KGI Financial 7 1,839.46 2.0
7 JP Morgan 21 2,338.43 5.8 7 BNP Paribas 4 2,557.54 1.7 7 China Construction 7 1,772.73 1.9
8 CBA 19 2,317.99 5.7 8 JP Morgan 3 1,202.56 0.8 8 Citic 5 1,419.45 1.5
9 NAB 17 2,300.34 5.7 9 TD Securities 2 765.16 0.5 9 Shanghai Pudong Dev 5 1,296.54 1.4
10 Mizuho 24 2,265.84 5.6 10 HSBC 2 517.24 0.3 10 CTBC Fin Hldg 6 1,281.39 1.4
Total 219 40,454.62 Total 137 149,984.32 Total 121 92,585.28
Including preferreds. Excluding equity-related debt.
Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt.
Source: Refinitiv SDC code: K1 Source: Refinitiv SDC code: K16 Source: Refinitiv SDC code: AS24a

32 International Financing Review November 2 2019

 BONDS FIG

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International Financing Review November 2 2019 33

 4HEûFUNDINGûWILLûCOUNTûTOWARDûTOTALûLOSS
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1 BNP Paribas 86 18,885.03 8.8 bank or group issues US$(m) (%)
ALTERNATIVE REFERENCE RATES: 2 SG 53 16,859.18 7.8 1 Barclays 22 8,871.88 10.6
&IVEûOFûTHEûBIGûSIXû53ûBANKSûHAVEûISSUEDû 3 HSBC 92 15,581.96 7.2 2 Citigroup 40 6,544.02 7.8
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DIFFERENTûSPINSûONûTHEûFORMATû 6 JP Morgan 63 11,275.75 5.2 5 Credit Agricole 17 4,873.00 5.8
*USTûTHEûWEEKûBEFOREûLASTû"ANKûOFû!MERICAû 7 Natixis 45 10,098.03 4.7 6 BofA 32 4,533.35 5.4
ANDû7ELLSû&ARGOûREAFlRMEDûTHEIRûPREFERENCEû 8 Goldman Sachs 54 8,831.69 4.1 7 UBS 35 4,486.37 5.4
FORûISSUINGûINû,IBORûANDûUSINGûTHEû&EDERALû 9 UniCredit 49 7,756.56 3.6 8 Goldman Sachs 25 4,283.66 5.1
2ESERVEû!LTERNATIVEû2EFERENCEû2ATEû 10 Barclays 53 7,597.74 3.5 9 Morgan Stanley 24 4,172.80 5.0
#OMMITTEESûFALLBACKûLANGUAGEû Total 347 215,004.83 10 BNP Paribas 31 3,647.44 4.4
"ANKûOFû!MERICAûISûTHEûONLYû&)'ûAMONGû Including banks, insurance companies and finance companies. Excluding Total 137 83,607.71
equity-related and covered bonds. Excluding publicly owned institutions.
THISûGROUPûTHATûHASûNOTûISSUEDûAû3/&2
LINKEDû
BONDûATûALLû Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a
h4HESEûSECURITIESûONûTHEûlXED
TO
mOATûSIDEû
ARENTûEVENûLIKELYûTOûBEûMOVEDûTOûTHEûNEWû ALL GLOBAL AND EUROMARKET YEN BONDS ALL SAMURAI BONDS
FORMATûBECAUSEûTHEYûWILLûBEûCALLEDûATûTHEû BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
lRSTûCALLûDATEvûTHEûBANKûANALYSTûSAIDû Managing No of Total Share Managing No of Total Share
h)TSûAûONE
YEARûSTUBûPERIODûATûTHEûENDûOFûAû bank or group issues ¥(m) (%) bank or group issues ¥(m) (%)

YEARûINSTRUMENTûSOûTHERESûAûLONGûTIMEû 1 Mizuho 17 344,396.71 22.6 1 Mizuho 39 385,426.67 24.1
ANDûITûISNTûLIKELYûEVERûTOûBEûAPPLICABLEûSOû 2 Sumitomo Mitsui 13 208,238.40 13.7 2 Daiwa Securities 35 350,560.00 21.9
SOMEûBANKSûAREûSAYINGû@,ETSûJUSTûSTICKûWITHû 3 Daiwa Securities 10 137,030.00 9.0 3 Sumitomo Mitsui 38 333,860.00 20.8
THEûSIMPLESTûSOLUTIONûANDûSEEûHOWûTHINGSû 4 BofA 2 129,075.00 8.5 4 Nomura 27 241,400.00 15.1
PLAYûOUTv 5 Morgan Stanley 8 122,066.73 8.0 5 Morgan Stanley 15 103,283.33 6.4
/VERûTHEûSUMMERû'OLDMANû3ACHSû 6 Nomura 8 121,608.33 8.0 6 HSBC 5 89,626.67 5.6
POPULARISEDûAûlXEDûRESETûFORMATûTHATûUSESû 7 Goldman Sachs 2 112,500.00 7.4 7 Natixis 5 40,900.00 2.6
4REASURIESûWHICHûISûAûSTRUCTUREûTHATûWASû 8 JP Morgan 2 112,500.00 7.4 8 Citigroup 3 32,500.00 2.0
LATERûADOPTEDûBYûREGIONALûBANKSûSUCHûASû 9 MUFG 6 66,955.02 4.4 9 BNP Paribas 4 18,460.00 1.2
""4ûANDû-4û"ANKûASûWELLûASû"-/û 10 BNP Paribas 5 53,630.00 3.5 10 Credit Agricole 2 5,983.33 0.4
0ERPETUALûPREFERREDûNOTESûBACKEDûBYû3/&2û Total 33 1,525,328.20 Total 44 1,602,000.00
WEREûDEBUTEDûEARLIERûTHISûYEARûASûWELLûBYû*0û Excluding equity-related debt. Including preferreds. Excluding equity-related debt.
-ORGANûANDû#ITIGROUPû Source: Refinitiv SDC code: K10 Source: Refinitiv SDC code: K11

34 International Financing Review November 2 2019


Sub and covered markets gear up for busy week
„ FINANCIALS Last issuance spree of the year expected
A busy week is foreseen in the financials
market at both ends of the capital spectrum,
with issuers eyeing low sub-debt funding
costs and others potentially rethinking
covered plans on the back of rekindled ECB
bond buys.
Bankers expect heavy supply this week as the
market heads into the last issuance window of
2019.
The pipeline is said to be particularly full in
the capital space.
The strength of the Additional Tier 1 market
was shown last week by LBBW and SEB, which
encountered some price sensitivity but were still
able to lock in attractive funding levels.
Tier 2 also looks a good option, as
demonstrated by RBS with a book of over
US$7bn for its US$750m deal on Tuesday.
Four issuers have already announced
subordinated euro trades: BANQUE
LEVERAGING DEMAND
INTERNATIONALE A LUXEMBOURG is readying a
sub-benchmark AT1 and tender, UNICAJA BANCO
is marketing a sub-benchmark Tier 2, and RCI
BANQUE will hit the road this Monday ahead of its
first Tier 2 outing.
AUSTRALIA AND NEW ZEALAND BANKING
GROUP, meanwhile, will start a roadshow from
November 11 for a sustainable developments
goals Tier 2 euro benchmark.
Other issuers are likely to emerge with
subordinated trades this week, bankers said.
ECB MAY PROMPT COVERED RETHINK
The pipeline is well-filled in the covered sector
too. CAFFIL and CREDIT MUTUEL ARKEA are set
to bring euro trades this week, while DEUTSCHE
BANK and DANISH SHIP FINANCE will also begin
marketing benchmarks.
Other issuers may be tempted into the
market by bigger-than-expected purchases
4HEûRESPONSEûISûLIKELYûTOûGIVEûOTHERûISSUERSû
BONDS FIG
under the ECB’s QE programme, which got
under way again last Wednesday.
While some analysts had forecast the
Eurosystem’s bid for covereds would increase to
around 15%-20% of issue sizes, others thought it
might grow nearer to 30%.
But bankers involved in the DEUTSCHE
KREDITBANK and BPCE deals said the bid was
higher than even the upper end of expectations,
putting it at around 40%.
“The good placement results of recent new
issues could significantly boost issuance activity
in November,” said Ted Packhmohr, head
of covered bonds and financials research at
Commerzbank.
“The pipeline is filled quite well already.
Further mandates should follow in the wake of
the ECB news as soon as the reporting season
permits.”
Tom Revell
4HEûSPREADûTIGHTENEDûBPûFROMûINITIALû
,EADSûLEVERAGEDûTHEûDEMANDûFROMû%UROPEANû THEûIMPETUSûTOûCOMEûTOûMARKET PRICEûTHOUGHTSûWITHûTHEûORDERûBOOKû
ANDû!SIANûINVESTORSûTOûPROMOTEûAûlVE
YEARû h&RANKLYû)MûQUITEûPROûPUTTINGû5+ûNAMESû REACHINGû53BNû
CALLûPERIODûTHATûISûMOREûEFlCIENTûFORû INûTHEûMARKETûRIGHTûNOWvûAûSECONDûBANKERû #OMPAREDûWITHûTHEû(3"#ûûSû
BORROWERSûFROMûAûREGULATORYûCAPITALû AWAYûSAIDûh4HEûMARKETûISûSTARTINGûTOûIGNOREû WHICHûWEREûTRADINGûATûBPûOVERû
PERSPECTIVE THEû"REXITûHEADLINESû)ûTHINKû.OVEMBERû 4REASURIESûTHEûNEWûNOTEûOFFEREDûBPûOFûNEWû
&OREIGNûINVESTORSûAREûMOREûFAMILIARûWITHû SHOULDûBEûGOODûTOûISSUEv ISSUEûCONCESSIONûACCORDINGûTOû)&2û
THEûSTRUCTUREûWHICHûISûSTILLûRELATIVELYûRAREûINû CALCULATIONS
THEû53ûWHEREûINVESTORSûHAVEûTENDEDûTOû HSBC CHARGES INTO HOLDCO MARKET 4HEûDEALûCAMEûFOURûDAYSûAFTERû(3"#û
PREFERûBULLETûSTRUCTURES AFTER DROPPING AT1 REPORTEDûANûûSLUMPûINûPRE
TAXûPROlTûLASTû
h"YûDOINGû.#ûITSûAûLOTûMOREûEFlCIENTû QUARTERûANDûABANDONEDûAûKEYûPROlTûTARGET
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THEû53ûMARKETûBUTûTHEûSUPPORTûFORûTHISûWASû OFûPLANûWITHûTHEûLENDERûNOûLONGERûLOOKINGûTOû PROMISEûhDECISIVEûACTIONvûTOûlXû
ASTRONOMICALv ISSUEûANTICIPATEDû!DDITIONALû4IERûûDEBTûTHISû UNDERPERFORMINGûAREAS
""4ûPRICEDûAûRAREûCALLABLEûDEALûFROMûAû53û YEAR h)TûISûCLEARûTHATûWHILEûWEûHAVEûMANYûPARTSû
ISSUERûINû3EPTEMBERûAû53Mû.#ûTHATû 7HENûPRESENTINGûITSûRESULTSûONû-ONDAYû OFûOURûPORTFOLIOûTHATûAREûPERFORMINGûWELLûWEû
HELPEDûGROWûAWARENESSûAROUNDûTHEû (3"#ûTOLDûINVESTORSûTHATûITûWILLûNOTûBEû ALSOûHAVEûPARTSûWHEREûTHEûPERFORMANCEûISû
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/NûTHEûSAMEûDAYûASû2"3û"OSTON
BASEDû TOLDûTHEûMARKETûTOûEXPECTû53BNûOFû 4HEûBANKûmAGGEDûTOûINVESTORSûTHATûASûPARTû
STATE STREETûPRICEDûAûLONGERûVERSIONûOFûTHEû ISSUANCEûINûTHEûFORMATûINûTHEûTHIRDû OFûITSûFORWARDûSTRATEGYûWHICHûISûNOTûYETûFULLYû
SAMEûFORMATû
ûAû53Mû
YEARûNON
QUARTER DElNEDûTHEûBANKûMAYûCUTûITSû2ISKû7EIGHTEDû
CALLûûATûBPûOVERû4REASURIESû4HATû 4HEûISSUERûSUBSEQUENTLYûREVALUATEDûANDû !SSETS
DEALûWASûALSOûTHEûlRSTûOFûITSûKINDûTOûUSEûAû DECIDEDûTHATû!4ûMAYûNOTûBEûNECESSARYûANDû 4HATûMAYûMEANûTHATûTHEû!4ûTHATûHASû
SECUREDûOVERNIGHTûlNANCINGûRATEûINûTHEû THATûITûWOULDûINSTEADûREAPPORTIONûTHATûTRADEû BEENûSCHEDULEDûFORûTHISûYEARûISûNOûLONGERû
BACKûENDû TOWARDSûHOLDCOûSENIORûAûSOURCEûFAMILIARû NEEDEDûATûALLû4HEûSOURCEûSAIDû(3"#ûWILLû
3TILLûWORKINGûOUTûFAIRûVALUEûFORûTHEû2"3û WITHûTHEûMATTERûTOLDû)&2 MOSTûLIKELYûPRESENTûAûlNALûVIEWûONûITSû!4û
TRADEûWASûTRICKYûGIVENûTHEûLACKûOFûAVAILABLEû h)FûWEûHITûOURûSIZEûTARGETû;FORûTHEûNEWû PLANSûINûITSûFULLûYEARûRESULTSûINû&EBRUARY
COMPARABLESû/NEûBANKERûAWAYûPUTûITûATû ISSUE=ûTHENûTHATûSHOULDûBEû(3"#ûDONEûFORû (EûSAIDûTHEûPLANNEDû!4ûTRADEûHADûNOû
AROUNDûBPûMEANINGûTHATûATûBPûTHEû THEûYEARvûHEûSAID BEARINGûONû(3"#SûTHINKINGûTOWARDSûAû
DEALûWASûCOMINGûSOMEûWAYûTHROUGH 4HEû53BNûSIX
YEARûNON
CALLûlVEû3%#
53BNûû!4ûCOMINGûUPûFORûCALLûINû
4HEûSECONDûBANKERûSAIDûTHATûGIVENûITûWASûAû REGISTEREDûSENIORûDEALûPRICEDûATûBPûOVERû *ANUARY
NEWûSTRUCTUREûIEû.#û3%# ûTHEREûWASûAû 4REASURIESûFORûAûûCOUPONû !ûBANKERûCLOSEûTOûTHEûSENIORûDEALûSAIDûTHEû
SENSEûOFûPRICEûDISCOVERY !TûAûTIMEûWHENûMANYûBANKSûAREûMAKINGû RESULTSûDIDûNOTûNEGATIVELYûAFFECTEDû(3"#Sû
h4HEûOUTSTANDINGûBOOKûALLOWEDûUSûTOûWORKû THEûSHIFTûTOûTHEû3ECUREDû/VERNIGHTû&INANCINGû STRATEGYûINûAPPROACHINGûTHEûMARKETûANDû
WITHûCLIENTSûANDûBRINGûTHEûDEALûATûBPvûHEû 2ATEûTHEûBACK
ENDûRATEûINSTEADûmOATSûTOû NOTEDûTHEûBANKSûSECONDARYûSPREADSû
SAID THREE
MONTHû,IBORûPLUSûBPû PERFORMEDûWELLûINûRECENTûWEEKS

International Financing Review November 2 2019 35

 CUTTING COSTS INVESTORSûAREûLOOKINGûFORvûSAIDûAûSYNDICATEû
EUROS 4HEûBANKSûCOSTûOFûWHOLESALEûFUNDINGû BANKERûATûONEûOFû"ERLINû(YPSûLEADSû
REMAINSûAûTHORNûINûITSûSIDEûTHOUGHûTHISûISû h)TSûAûVERYûGOODûANDûGRANULARûORDERûBOOKû
SABADELL USHERS IN CALLABLES FOR EXPECTEDûTOûEASEûNEXTûYEARûACCORDINGûTOûITSû ESPECIALLYûFORûAû YEARûTRANSACTIONûWHICHû
SPANISH LENDERS #&/û AREûUSUALLYûDOMINATEDûBYûAûCOUPLEûOFûBIGû
h7EûSTILLûHAVEûVERYûEXPENSIVEûOUTSTANDINGû ASSETûMANAGERSv
4HEûlRSTûCALLABLEûSENIORûFROMûAû3PANISHû WHOLESALEûFUNDINGûLIABILITIESûMATURINGûOVERû
LENDERûRECEIVEDûAûTHUMBS UPûFROMû THEûNEXTûYEARûOFûWHICHûHEREûWEûHIGHLIGHTû TIGHT SPREADS WORKING
INVESTORSûLASTû4UESDAYûWITHûTHEûõMû AROUNDûõMûATûANûAVERAGEûCOUPONûOFûCIRCAû "ANKERSûWEREûIMPRESSEDûBYûTHEûDEMANDû
BANCO SABADELLûSIX YEARûNON CALLûlVEûSENIORû û4OMASû6ARELAû-UINAûTOLDûINVESTORSûONû RECEIVEDûBYû"ERLINû(YPûATûSUCHûAûTIGHTû
PREFERREDûARGUABLYûPRICINGûWITHûBARELYûANYû /CTOBERûû OUTRIGHTûSPREADû
PREMIUMû h4HISûSHOULDûHELPûUSûIMPROVEûOURû "ERLINû(YPûISûAûWELL ESTABLISHEDûPLAYERûINûTHEû
#ALLABLESûHAVEûBECOMEûMOREûPREVALENTûFORû WHOLESALEûFUNDINGûCOSTSûINûûDESPITEûTHEû GREENûBONDûMARKETûBUTûTHEûNEWûISSUEûWASûITSû
%UROPEANûLENDERSûSEEKINGûTOûADDRESSû -2%,ûREQUIREMENTSv lRSTûGREENûBONDûINûSENIORûPREFERREDûFORMAT
REDUCEDûREGULATORYûVALUEûOFûSENIORûNON (EûADDEDûTHATûTHEû%#"ûMEASURESûINûPLACEû 3OMEûBANKERSûAWAYûFROMûTHEûDEALûSAIDûITû
PREFERREDûORûHOLDCOûDEBTûINûTHEûRUNûUPûTOû FROMû/CTOBERûûSHOULDûHELPûREDUCEûCOSTSûONû OFFEREDûAûNEWûISSUEûPREMIUMûOFûAROUNDûBPû
MATURITYûBUTûTHEYûAREûSTILLûRELATIVELYûRAREûINû EXCESSûCASHûBALANCESû VERSUSû"ERLINû(YPSûCONVENTIONALûSENIORû
THEûCASEûOFûSENIORûPREFERREDû h)NûOURûCASEûTIERINGûSHOULDûEXEMPTûMOREû PREFERREDûCURVEû)TSûû!UGUSTûSû
h)TSûTHEûlRSTûOUTûOFû3PAINûANDûTHEûREASONû THANûõBNûOFûDEPOSITSûCURRENTLYûATûTHEû%#"û WEREûQUOTEDûATûBPûBIDûANDûITSûû&EBRUARYû
3ABADELLûISûDOINGûITûISûSIMILARûTOûWHATûWEVEû !NDûTIERING RELATEDûSAVINGSûWILLûAMOUNTûTOû SûATûBPû
SEENûINû)TALYvûAû$#-ûBANKERûONûTHEûDEALû CIRCAûõMûYEARLYvûHEûSAIDû (OWEVERûOTHERûBANKERSûSAIDûFAIRûVALUEûFORû
SAIDû 4HEûTRANSACTIONûCOMPLETESûTHEû3ABADELLSSû THEûNEWûISSUEûWASûARGUABLYûTIGHTERûONû
5NI#REDITûWASûTHEûlRSTû)TALIANûLENDERûTOûDOû ûFUNDINGûPLANû6ARELAû-UINAûSAIDûTHATû ACCOUNTûOFûTHEûGREENûELEMENTû4HEYûNOTEDû
SOûWITHûAûõBNûûNON CALLûûSENIORû THEûBANKûHADûMADEûFURTHERûPROGRESSûINû "ERLINû(YPSûGREENûSENIORûNON PREFERREDû
PREFERREDûINû*UNEûEFlCIENTLYûSUPPLEMENTINGû REACHINGûITSû-2%,ûTARGETûWITHûTHEûISSUANCEû BONDSûTRADEûJUSTûBPûBACKûOFûITSûCONVENTIONALû
ITSûLAYERûOFûLOSS ABSORBINGûDEBTû OFûõBNûOFûSENIORûPREFERREDûANDûõMûOFû SENIORûPREFERREDûCURVEû
h"ANKSûCANûCOUNTûSOMEûOFûTHEIRûSENIORû SENIORûNON PREFERREDûANDûTHATûITûONLYû h)TûISûINTERESTINGûTOûSEEûTHATûTIGHTûNAMESû
PREFERREDûASûPARTûOFûTHEIRû-2%,ûUPûTOûAû INTENDEDûTOûDOûONEûMOREûBENCHMARKûINû ATûTIGHTûSPREADSûAREûSTILLûWORKINGvûSAIDûAû
CERTAINûLEVELû"YûADDINGûTHEûCALLû3ABADELLûISû û SYNDICATEûBANKERûAWAYûFROMûTHEûDEALûh4HEYû
ABLEûTOûOPTIMISEûTHEû-2%,ûCONTENTûOFûTHISû MIGHTûNOTûGETûMULTI BILLIONûBOOKSûBUTûTHEYû
DEBTvûTHEûBANKERûSAID DURATION IN FAVOUR AS BHH, JP GETûDONEûANDûTHATûISûTHEûMOSTûIMPORTANTû
,EADSûBanco Sabadell, Barclays, Natixis, MORGAN HIT SENIOR MARKET MESSAGEv
Nomura and UniCreditûSTARTEDûMARKETINGû h"UTûYOUûDOûNEEDûAûNEWûISSUEûPREMIUMûTOû
THEûNO GROWûTRADEûATûBP BPû"UTû BERLIN HYP and JP MORGAN CHASE & COûHITûTHEû GETûTHEûDEALûGOINGv
WITHûTHEûORDERûBOOKûCOVEREDûMOREûTHANû SENIORûMARKETûLASTû-ONDAYûTAPPINGûINTOû *0û-ORGANSûHOLDCOûDEALûMEANWHILEûWASû
THREEûTIMESûGUIDANCEûWASûSETûMUCHû STRONGûDEMANDûATûTHEûLONGûEND PRICEDûROUGHLYûmATûTOûFAIRûVALUEûBANKERSû
TIGHTERûATûBPûAREAûWITHûTHEûPAPERû )SSUERSûTENDûTOûFAVOURûSHORTûTOû SAIDûWITHûITSûHIGHERûYIELDûANDûWIDERûSPREADû
PRICINGûATûBP INTERMEDIATEûMATURITIESûINûTHEûSENIORûSPACEû SUFlCIENTûTOûENSUREûINVESTORûINTEREST
h)FûASûANûISSUERûYOUREûGOINGûTOûCOUNTû BUTû"ERLINû(YPSûANDû*0û-ORGANSûTRADESû ûAû
SENIORûPREFERREDûTOWARDSû-2%,ûTHENûITû  YEARûANDûAû YEARûNON CALLûû
MAKESûSENSEûTOûADDûTHEûCALLvûAûBANKERûAWAYû RESPECTIVELYû ûUNCOVEREDûAûDEEPûPOCKETûOFû NON-CORE CURRENCIES
SAIDû DEMAND
h4HEûQUESTIONûALWAYSûISûHOWûMUCHûOFûAû )NVESTORûAPPETITEûFORûSUCHûDEALSûHASûONLYû CREDIT AGRICOLE EYES PANDA BONDS
PREMIUMûAMû)ûPAYINGûFORûTHEûCALLû&ORûAûLOTû BEENûINCREASEDûBYûAûRECENTûBACK UPûINûYIELDSû
OFûISSUERSûANYTHINGûAROUNDûBP BPûEXTRAû BANKERSûSAID CREDIT AGRICOLEûISûLOOKINGûTOûISSUEû2MBBNû
MAKESûSENSEû)NûTHEûCASEûOFû3ABADELLû)ûSAWû h4HATûISûCERTAINLYûHELPFULûASûITûHASûMADEûITû 53M ûTHREE YEARû0ANDAûBONDSûTHEû
FAIRûVALUEûAROUNDûBP BPûSOûTHEYûDIDNTû EASIERûFORûSOMEûINVESTORSûTOûCOMEûINûTOûTHESEû lRSTûRENMINBI DENOMINATEDûBONDSûBYûAû
GIVEûANYTHINGûAWAYv TRADESvûSAIDûONEû &RENCHûBANK
!NOTHERûBANKERûAWAYûDISAGREEDûHOWEVERû "ERLINû(YPSûõMûNO GROWûISSUEûWASû
SAYINGûTHATûTHEûISSUERûHADûPAIDûAROUNDûBPû MARKETEDûWITHûINITIALûPRICEûTHOUGHTSûOFûMID ALL COVERED BONDS (ALL CURRENCIES)
OFûPREMIUMûFORûTHEûCALLû SWAPSûPLUSûBPûAREAûVIAûLEADSûCredit Agricole, BOOKRUNNERS: 1/1/2019 TO DATE
h)ûSAWûFAIRûVALUEûFORûAûSTRAIGHTûlVE YEARûINû DZ Bank, HSBC, LBBW and UniCredit Managing No of Total Share
THEûMID SûSOûATûPûITSûBPûORûSOûFORûTHEû 'UIDANCEûWASûSETûATûBP BPûBEFOREûTHEû bank or group issues US$(m) (%)
CALLvûHEûSAIDûh)TSûINTERESTINGûTOûSEEûTHEMû DEALûWASûLAUNCHEDûATûBPûWITHûBOOKSû 1 HSBC 63 12,041.35 6.9
USINGûTHISûFORû-2%,û7EVEûHADûAûLOTûOFûPUSH CLOSINGûABOVEûõBNû)TûWASûPRICEDûWITHûAû 2 UniCredit 78 11,426.05 6.5
BACKûFROMûINVESTORSûWHOûWOULDûPREFERûTOû COUPONûOFûûTOûYIELDû 3 LBBW 54 9,345.15 5.3
BUYûSENIORûNON PREFERREDv *0û-ORGANSûSELF LEDûõBNû YEARûNON 4 Barclays 36 8,536.52 4.9
!SûTOûWHETHERûOTHERûISSUERSûDECIDEûTOû CALLûûHOLDCOûSENIORûOFFERINGûMEANWHILEû 5 Credit Agricole 42 8,151.98 4.7
ADOPTûAûSIMILARûSTRATEGYûASû5NI#REDITûANDû WASûSOLDûATûBPûOVERûMID SWAPSûINSIDEû)04Sû 6 Natixis 41 7,891.24 4.5
3ABADELLûREMAINSûTOûBEûSEENû OFûMID SWAPSûPLUSûBPûAREAûONûAûBOOKûOFû 7 NatWest Markets 34 6,599.96 3.8
h4HISûDElNITELYûAPPLIESûTOûOTHERûISSUERSû õBNû)TûOFFEREDûAûYIELD TO CALLûOFûû 8 Deutsche Bank 34 6,500.60 3.7
THATûPAYûQUITEûWIDEûSPREADSûFORûTHEIRûSENIORû "ANKERSûSAIDûTHEûDEALSûTENORSûWEREûKEYûTOû 9 UBS 31 6,478.40 3.7
PREFERREDûANDûFORûWHOûTHEûSPREADûONûSENIORû THEIRûSUCCESSû 10 BNP Paribas 33 6,165.06 3.5
NON PREFERREDûISûSIGNIlCANTvûTHEû$#-û h4HEûmATTENINGûINûTHEûCURVEûISûPROVINGû Total 247 175,192.82
BANKERûSAIDû THATûTHEûLONGûENDûOFûTHEûCURVEûISûWHATû Source: Refinitiv SDC code: J15a

36 International Financing Review November 2 2019

 BONDS COVERED BONDS/HIGH-YIELD

4HEûINITIALûGUIDANCEûRANGEûWASûSETûATûBP 4HEûDEALûISûEXPECTEDûTOûBEûRATEDû!A!!û GUIDANCEûOFûMID SWAPSûPLUSûBPûAREAû

BPûOVERûTHEûBENCHMARKûTHREE
YEARû#HINAû -OODYS$"23  THROUGHûLEADSûCommerzbank, Credit Agricole,
$EVELOPMENTû"ANKûBONDûYIELD Credit Suisse, DZ Bank and Santander.
0ROCEEDSûWILLûBEûUSEDûFORûGENERALû SMBC, SPABOL REOPEN COVERED MARKET 4HEûSPREADûWASûlXEDûATûBPûANDûTHEûSIZEû
CORPORATEûPURPOSES ATûõBNûWITHûBOOKSûEXCEEDINGûõBNû
#HINAû#HENGXINûHASûASSIGNEDû!!!ûRATINGSû SUMITOMO MITSUI BANKING CORPORATION and INCLUDINGûõMû*,-ûINTEREST
TOûBOTHûTHEûISSUERûANDûTHEûBONDS SPAREBANK 1 BOLIGKREDITT KEPTûTHEûCOVEREDûBONDû "ANKERSûATTRIBUTEDûTHEûDEMANDûTOûTHEû
MARKETûTICKINGûOVERûLASTû4UESDAYû3-"#û DEALSûPOSITIVEûYIELD
BUILDINGûITSûCURVEûWITHûAûDUAL
CURRENCYû !ûRECENTûBACK
UPûINûRATESûHASûINCREASEDû
OFFERINGûASû3PA"OLûBENElTEDûFROMûHIGHERûRATESû
WHILEûOTHERSûAWAITûTHEûRETURNûOFûNETû%#"û1%
COVERED BONDS 4HEûTWOûISSUERSûBROUGHTûTHEûlRSTûEUROû
QUALITYû%UROPEANû
BENCHMARKûCOVEREDSûSINCEû/CTOBERûû4HEû
MARKETûHADûBEENûQUIETûWHILEûEUROZONEû
EUROS ISSUERSûWEREûAWAITINGûTHEûRESTARTûOFûNETû%#"û
INVESTORûAPPETITEûFORûTHEûLONGûENDûANDûINû
3PARE"ANKûSûCASEûMEANTûINVESTORSûCOULDû
PICKûUPûPAPERûFROMûAûHIGH
NAMEûWITHûAûPOSITIVEûYIELD
4HEûDEALûWASûPRICEDûWITHûAûCOUPONûOFû
ûTOûYIELDû
COVEREDûBONDûPURCHASESûWHICHûKICKEDûINû "ANKERSûSAIDûITûOFFEREDûAûNEWûISSUEû
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International Financing Review November 2 2019 37

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REPORTûONû4UESDAY -ARKET!XESSûDATA DUEûûLOWERINGû&ITCHSûRECOVERYû
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THATûCASHûPRICE
ALL US$ DENOMINATED HIGH-YIELD BONDS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS
BOOKRUNNERS – 1/1/2019 TO DATE 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share EUROPE/MIDDLE EAST/
bank or group issues US$(m) (%) bank or group issues €(m) (%) AFRICA
1 JP Morgan 188 23,955.13 8.9 1 Goldman Sachs 42 5,635.88 9.2
2 Citigroup 151 18,952.70 7.0 2 Deutsche Bank 37 4,978.11 8.1 FAURECIA TAP ONLY ACTION IN EURO
3 BofA 166 18,338.20 6.8 3 JP Morgan 34 4,565.29 7.4 HIGH-YIELD
4 Goldman Sachs 147 17,464.53 6.5 4 Citigroup 31 3,741.19 6.1
5 Morgan Stanley 137 16,859.80 6.2 5 Barclays 28 3,437.46 5.6 !ûTAPûBYû&RENCHûAUTOûPARTSûMAKERûFAURECIA
6 Credit Suisse 142 16,478.91 6.1 6 BNP Paribas 32 3,402.96 5.5 WASûSHOWNûTOûINVESTORSûONû-ONDAY
7 Barclays 134 13,657.68 5.1 7 Credit Agricole 32 3,193.11 5.2 &AURECIAûANNOUNCEDûAûõMûREOPENINGû
8 Deutsche Bank 142 13,607.27 5.0 8 HSBC 33 3,042.05 5.0 OFûITSûõMûûSENIORûNOTESûDUEûû
9 Wells Fargo 102 10,951.26 4.1 9 BofA 23 2,230.78 3.6 4HEûBONDSûEXPECTEDûTOûBEûRATEDû"A""
10 RBC 91 10,326.63 3.8 10 Morgan Stanley 18 2,222.01 3.6 ""ûAREûNON CALLûUNTILû*UNEû
Total 473 269,774.97 Total 121 61,424.87 4HEûORIGINALûSEVENûNON CALLûTHREEûNOTESû
Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt. WEREûISSUEDûINû-ARCHûANDûWEREûSEENûBIDûATûAû
Source: Refinitiv SDC code: B5 Source: Refinitiv SDC code: B6 CASHûPRICEûOFûûONû&RIDAYû
,EADSûKICKEDûOFFûMARKETINGûATûAûCASHûPRICEû
ALL ASIAN HIGH-YIELD ISSUERS ALL EUROPEAN HIGH-YIELD ISSUERS OFûûAREAûnû û"YûGUIDANCEûDEMANDû
1/1/2019 TO DATE 1/1/2019 TO DATE ALLOWEDûTHEMûTOûINCREASEûTHEûPRICEûTOû
Managing No of Total Share Managing No of Total Share ûAREAû4HEûTAPûWASûPRICEDûATû
bank or group issues US$(m) (%) bank or group issues US$(m) (%) 7HILEûTHEûAUTOûSECTORûHASûSEENûSOMEû
1 Citigroup 46 8,348.75 9.3 VOLATILITYû&AURECIAûISûVIEWEDûASûONEûOFûTHEû
1 Credit Suisse 52 5,516.54 7.9
2 Goldman Sachs 44 7,149.80 8.0 STRONGERûNAMESûINûTHEûSECTORû)NûADDITIONû
2 Haitong Secs 83 4,479.91 6.4
3 Deutsche Bank 54 3,781.30 5.4 3 JP Morgan 42 6,219.57 7.0 $OUBLEû"ûNAMESûHAVEûBEENûCOMINGûTOûTHEû
4 Citic 58 3,703.04 5.3 4 Deutsche Bank 37 6,211.48 7.0 MARKETûOPPORTUNISTICALLYûASûYIELDSûHAVEûBEENû
5 HSBC 52 3,688.62 5.3 5 Barclays 28 5,006.44 5.6 COMPRESSEDûINûANTICIPATIONûOFûTHEû%#"Sû
6 JP Morgan 24 3,489.24 5.0 6 BNP Paribas 37 4,884.83 5.5 ASSETûPURCHASEûPROGRAMMEû
7 Morgan Stanley 40 3,370.93 4.8 7 HSBC 35 4,298.95 4.8 &AURECIAûISûNOûDIFFERENTû4HEûCOMPANYSû
8 UBS 46 3,140.56 4.5 8 Credit Agricole 32 3,931.45 4.4 û*UNEûSûWEREûSEENûBIDûATûûPRE
9 Goldman Sachs 20 2,575.96 3.7 9 Credit Suisse 28 3,732.78 4.2 ANNOUNCEMENTûOFûTHEûTAPûACCORDINGûTOû
10 Guotai Junan Secs 66 2,540.23 3.7 10 BofA 24 3,405.88 3.8 4RADEWEBû
Total 184 69,592.93 Total 136 89,292.31 !VERAGEûYIELDSûFORû$OUBLEû"ûCREDITSûHAVEû
Excluding equity-related debt. Excluding equity-related debt. SHRUNKûTOûûFROMûûATûTHEûSTARTûOFû
Source: Refinitiv SDC code: B06d Source: Refinitiv SDC code: B06c THEûYEARûACCORDINGûTOûI"OXXûDATAû

38 International Financing Review November 2 2019


As ECB jumps back in, distress builds in high-yield
„ EMEA HIGH-YIELD Investors get picky over sectors
Corners of the European high-yield market are
showing signs of distress as investors gravitate
towards safer credits that are set to benefit from
renewed central bank intervention and the credit
cycle grows long in the tooth.
The third-quarter earnings season has
seen a number of high-yield credits pushed
further into junk, and companies including
Shop Direct and Schmolz + Bickenbach seek
liquidity boosts.
“We’ve never seen such a bifurcated market,”
said one leveraged finance banker.
“In the past four to five years, a rising tide
lifted all boats. But now we’re seeing some
sectors like autos and chemicals really suffering.
Investors are being very selective, which is
leading to a bifurcation between non-cyclical
sectors and cyclical credits,” he said.
Swiss steel group SCHMOLZ + BICKENBACH saw
the yield on its 5.625% July 2022s increase to
15.7% after it issued a third profit warning and
got pushed further into junk. The bonds were
at 12.4% on Monday, according to MarketAxess
data.
S&P downgraded Schmolz by two notches
to CCC on Tuesday, citing the company’s
“unsustainable capital structure”, which analysts
said may lead to a distressed exchange offer or
debt restructuring over the coming weeks.
The rating is on Watch Developing. Schmolz is
Caa1 with Moody’s.
And the yield on UK online retailer SHOP
DIRECT‘s 7.75% November 2022s is up at 14.06%,
from 12.67% the week before, after it disclosed
a £150m funding gap arising from higher-than-
expected PPI claims.
The number of high-yield bonds yielding
above 10% is now the highest since mid-2016,
according to a Bank of America report published
on Wednesday.
“The irony in today’s world is that despite
trillions of negative-yielding bonds globally, the
distressed ratio in European high-yield keeps
heading higher,” wrote analysts in a report
published on Wednesday.
Bank of America’s October survey showed a
huge pivot by investors towards global growth
fears, while European Triple C spreads widened by
25%.
But at the opposite end of the spectrum,
some Double Bs have been pricing bonds at
record-breaking yields of below 1%.
In late October, CROWN HOLDINGS sold a
€550m February 2023 at 0.75% - the lowest in
the history of high-yield issuance.
“The bifurcation is happening because
people are scared of losses,” said one
investor, citing poor recovery expectations in
recent distressed situations such as Thomas
Cook.
“It shows you where capital is flooding in and
where capital is starved.”
BONDS HIGH-YIELD
However, for investors willing to dig down on
credit specifics, the dynamic throws up some
opportunities, he said.
“If you’re buying bonds pricing at a sub 1%
yield, that means your whole year’s income [for
that bond] is your bid/offer spread. That’s sub-
optimal,” he said, referring to Crown’s new issue.
The ECB resumed purchases of corporate
bonds last week - a market technical which is
expected to exacerbate the problem.
“Investment-grade buyers will be happy to
allocate to high-yield if it will benefit from ECB
QE buying. That Double B cohort is going to
benefit,” said the investor.
Average Double B yields are now at 2.27%,
according to iBoxx data. Average yields on Triple
C credits are at 10.46%.
“We see [CSPP 2.0] creating something of
a brave new world for corporate bonds,” wrote
Bank of America analysts.
“It will encourage credit markets to assess risk
based on “the haves” (eligible) and “the have-
nots” (not eligible).”
Still, investors will have to be careful picking
their spots. Bank of America says the number of
zombie companies in Europe is on the rise again.
“The risk with persistently easy monetary
policy is that less profitable companies can
refinance and give themselves time to keep
going,” wrote analysts.
Eleanor Duncan

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PERFORMANCEûAFTERûTHEûTROUBLEDû3PANISHû LIQUIDITYûWILLûDRYûUPûQUICKLYûIFûITSûTURNAROUNDû EMERGINGûMARKETûEARNINGSv

International Financing Review November 2 2019 39

 ,ETTER/NEûNOWûOWNSûûOFû$)!û &RIDMANûDENIEDûTHEûACCUSATIONSûSAYINGû
AFTERûWINNINGûAûVOLUNTARYûTENDERûOFFERûTOû THATûHEûISûTHEûMAINûVICTIMûOFûTHEûSHAREû
TAKEûCONTROLûOFûTHEûCOMPANYûEARLIERûTHISû PRICESûCOLLAPSEûHAVINGûINVESTEDûõBNû STRUCTURED FINANCE
YEARû INûTHEûCOMPANY
,ETTER/NEûWHICHûATûTHEûTIMEûOWNEDû $)!SûLOSSESûHAVEûDEEPENEDûTHISûYEARûWITHû
AROUNDûûOFû$)!ûLAUNCHEDûAûTAKEOVERûBIDû THEûSUPERMARKETûCHAINûRECORDINGûõMû EMEA MBS
FORûTHEûSUPERMARKETûCHAINûINû&EBRUARYû INûNETûATTRIBUTABLEûLOSSESûINûTHEûlRSTûHALFûUPû
FOLLOWINGûAûDISAGREEMENTûWITHûMANAGEMENTû FROMûõMûAûYEARûEARLIER JP MORGAN PRICES EMERALD ITALY 2019
OVERûFUNDRAISINGû !NOTHERûHIGH YIELDû3PANISHûCREDITû CMBS
$)!ûHADûPROPOSEDûAûõMûRIGHTSûISSUEû GRIFOLSû"A"" ûANNOUNCEDûAû
WHICHûWASûBACKEDûBYû-ORGANû3TANLEYûWHILEû 53BN EQUIVALENTûEUROûBONDûDEALûONû JP MORGANûPRICEDûITSûõMû)TALIANû#-"3û
,ETTER/NEûFAVOUREDûAûõMûCAPITALû &RIDAYû EMERALD ITALY 2019ûONû7EDNESDAYû4HEûDEALû
INCREASE 4HEûHEALTHCAREûCOMPANYûISûMARKETINGû CAMEûWIDEûOFûPRICEûTALKûANDûSOMEûNOTESû
4HEûTAKEOVERûHASNTûBEENûWITHOUTûITSû .#ûANDû.#ûSENIORûSECUREDûNOTESûTHATû WEREûRETAINEDûBYû*0û-ORGAN
SPEED BUMPSû,ETTER/NEûCO FOUNDERû-IKHAILû WILLûRElNANCEûEXISTINGûDEBT 4HEûõMû!!!,û&ITCH$"23 ûSENIORû
&RIDMANûISûNOWûBEINGûINVESTIGATEDûBYûTHEû )TûISûALSOûLOOKINGûATûPLACINGû53BN TRANCHEûCAMEûATûBPûOVERûTHREE MONTHû
3PANISHû(IGHû#OURTûACCUSEDûOFûACTINGûTOû EQUIVALENTûINûLOANSûVIAûAûDUAL CURRENCYû %URIBORûAFTERûHIGHûSûINITIALûPRICEû
DEPRESSû$)!SûSHAREûPRICEûINûTHEûLEAD UPûTOû PACKAGE THOUGHTSûANDûTHENûPRICEûGUIDANCEûOFûBP
,ETTER/NESûTAKEOVERûBID Bank of AmericaûBNP Paribas and HSBCûAREû *0û-ORGANûRETAINEDûAûPORTIONûOFûTHEû
)NûANûINTERVIEWûWITHû3PANISHû PHYSICALûBOOKRUNNERSû-EETINGSûRUNûFROMû õMû#LASSû"ûWHICHûCAMEûATûBPûFROMû
NEWSPAPERû#INCOû$IASûONû-ONDAYû -ONDAYûTOû7EDNESDAYû )04SûOFûHIGHûSûANDûGUIDANCEûOFûBP

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 1/11/2019

Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type
AHMSR 2019-GT1 US$192.857 5.06 4.180 Credit Suisse NR/NR/NR RMBS
AHMSR 2019-GT1 US$32.143 5.06 4.680 Credit Suisse NR/NR/NR RMBS
Avoca Clo XI DAC €300 - 3mE+69bps Goldman Sachs Aaa/AAA/NR CLO
Avoca Clo XI DAC €20 - 1.950 Goldman Sachs Aaa/AAA/NR CLO
CAS 2019-R07 US$249.578 1.89 1m+77bps Barclays/BAML NR/NR/BBB- RMBS
CAS 2019-R07 US$524.112 5.69 1m+210bps Barclays/BAML NR/NR/B RMBS
CAS 2019-R07 US$224.62 6.97 1m+340bps Barclays/BAML NR/NR/NR RMBS
CPT 2019-CPT US$783.75 10.00 S+93bps Deutsche Bank/Morgan Stanley NR/NR/NR CMBS
CGCMT 2019-GC43 US$8.955 2.97 2.063 Citigroup/Goldman Sachs NR/AAA/AAA CMBS
CGCMT 2019-GC43 US$41.294 4.91 2.982 Citigroup/Goldman Sachs NR/AAA/AAA CMBS
CGCMT 2019-GC43 US$133 9.66 2.782 Citigroup/Goldman Sachs NR/AAA/AAA CMBS
CGCMT 2019-GC43 US$434.302 9.81 3.038 Citigroup/Goldman Sachs NR/AAA/AAA CMBS
CGCMT 2019-GC43 US$13.585 7.40 2.959 Citigroup/Goldman Sachs NR/AAA/AAA CMBS
CGCMT 2019-GC43 US$54.097 9.91 3.300 Citigroup/Goldman Sachs NR/AA+/AAA CMBS
CGCMT 2019-GC43 US$57.479 9.91 3.491 Citigroup/Goldman Sachs NR/NR/AA- CMBS
CGCMT 2019-GC43 US$42.827 9.97 3.622 Citigroup/Goldman Sachs NR/NR/BBB CMBS
CGCMT 2019-GC43 US$27.048 9.99 3.000 Citigroup/Goldman Sachs NR/NR/BBB CMBS
CGCMT 2019-GC43 US$20.287 9.99 3.000 Citigroup/Goldman Sachs NR/NR/BBB- CMBS
Emerald Italy 2019 €57 3.9 n/a JP Morgan NR/NR/A+ CMBS
Emerald Italy 2019 €13.3 3.9 n/a JP Morgan NR/NR/A CMBS
Emerald Italy 2019 €19.95 3.9 n/a JP Morgan NR/NR/BBB- CMBS
Emerald Italy 2019 €10.25 3.9 n/a JP Morgan NR/NR/BB CMBS
FORA 2019-1 US$55.263 2.93 4.018 Guggenheim Securities NR/NR/NR ABS
FORA 2019-1 US$11.052 2.93 4.852 Guggenheim Securities NR/NR/NR ABS
FORA 2019-1 US$3.685 2.93 6.269 Guggenheim Securities NR/NR/NR ABS
FREMF 2019 K-F70 US$755.278 9.56 1m+52bps Cantor Fitzgerald/Wells Fargo NR/NR/NR CMBS
FREMF SPC K-C05 US$52.333 5.46 2.230 Credit Suisse/Barclays Capital NR/NR/NR CMBS
FREMF SPC K-C05 US$330.609 6.51 2.539 Credit Suisse/Barclays Capital NR/NR/NR CMBS
FREMF SPC K-C05 US$219.593 9.41 2.631 Credit Suisse/Barclays Capital NR/NR/NR CMBS
GCAR 2019-4 US$204.7 0.95 na JP Morgan/Wells Fargo NR/AA/NR ABS
GCAR 2019-4 US$51.35 2.59 na JP Morgan/Wells Fargo NR/A/NR ABS
GCAR 2019-4 US$41.35 3.44 na JP Morgan/Wells Fargo NR/BBB/NR ABS
GCAR 2019-4 US$32.6 4.02 na JP Morgan/Wells Fargo NR/BB-/NR ABS
GSMS 2019-GSA1 US$14.559 2.84 2.049 Goldman Sachs NR/AAA/AAA CMBS
GSMS 2019-GSA1 US$26.306 6.92 2.613 Goldman Sachs NR/AAA/AAA CMBS
GSMS 2019-GSA1 US$177 9.67 2.794 Goldman Sachs NR/AAA/AAA CMBS
GSMS 2019-GSA1 US$352.864 9.88 3.048 Goldman Sachs NR/AAA/AAA CMBS
GSMS 2019-GSA1 US$20.061 7.26 2.988 Goldman Sachs NR/AAA/AAA CMBS

40 International Financing Review November 2 2019

 STRUCTURED FINANCE

BPû4HEûõMû""" """,û#LASSû#ûWASû ASSET BACKED SECURITISATION 1ûTOûaMûFROMû 4HEûMORTGAGESûAREûONû"4,ûPROPERTIESû

FULLYûRETAINEDûANDûWASûPRICEDûWITHûAûBPû aMûANDûEXTENDEDûTHEûMATURITYûTOû LOCATEDûINûTHEû5+ûBUTûWHICHûAREûOWNEDû
SPREADû)TûHADûBEENûTALKEDûATûHIGHûSûTOû /CTOBERûûTHEûCOMPANYûSAIDûONû MAINLYûBYûBORROWERSûINûTHEû2EPUBLICûOFû
LOWûSûANDûTHENûGUIDANCEûOFûBP BP 4HURSDAY )RELANDû4HEûLOANSûWEREûSOLDûTOûSERVICERû
4HEûõMû""""(û#LASSû$ûWASûSOLDûATû 4OGETHERûSAIDûITûADDEDûTWOûBANKSûTOûTHEû PEPPER FINANCEûINû
BPûOVERûAFTERûBEINGûSHOWNûASûhCALLûDESKv VEHICLE 4HEûaMûPORTFOLIOûHASûûMONTHSû
4HEûDEALûTOOKûLONGERûTHANûEXPECTEDûTOûSELLû ,AKESIDEûWASûLAUNCHEDûINûûMAINLYûTOû OFûSEASONINGû!ROUNDûûOFûTHEûLOANSûINûTHEû
WITHûPRICINGûINITIALLYûSLATEDûFORûTHEûPREVIOUSû FUNDûTHEûORIGINATIONûOFûUNREGULATEDû PORTFOLIOûHAVEûBEENûRESTRUCTURED
WEEKû/NEûINVESTORûTOLDû)&2ûTHEûSMALLûSIZEûOFûTHEû RESIDENTIALûANDûCOMMERCIALûBRIDGINGûLOANS 4HEû306ûBANNA RMBSûWILLûISSUEûlVEû
#-"3ûANDûTHEûUNLOVEDûNATUREûOFûTHEû 4OGETHERûSAIDûITûRElNANCEDû,AKESIDEûINû TRANCHESûPAYINGûAûMARGINûOVERû3ONIAûANDû
UNDERLYINGûASSETSû û)TALIANûRETAILûPROPERTIESû û *ANUARYûû4HEûCOMPANYûALSOûSAIDûITûHASû RATEDûFROMû4RIPLEû!ûTOû###"" ûBYû30ûANDû
WOULDûHAVEûMADEûTHEûDEALûAûTRICKYûPROPOSITION RAISEDûORûRElNANCEDûOVERûaBNûOFûDEBTû +"2!û4HEREûISûALSOûANûUNRATEDû#LASSû:
4HEû#-"3ûISûBACKEDûBYûAûSINGLEûLOANûONû FACILITIESûOVERûTHEûPASTûûMONTHS
THREEûSHOPPINGûMALLSûINû.ORTHERNû)TALYûANDû %ARLIERûLASTûMONTHû4OGETHERûPRICEDûAû5+û
ISûSPONSOREDûBYûPRIVATEûEQUITYûFUNDûKILDARE NON CONFORMINGû2-"3û4ABSû  EMEA ABS
PARTNERS
UK BUY-TO-LET RMBS BANNA IN MARKET SC GERMANY AUTO 2019-1 ANNOUNCED
TOGETHER ADDS £245m TO LAKESIDE
VEHICLE Goldman SachsûISûMARKETINGûAûSMALLûLEGACYû SANTANDER CONSUMER BANKûHASûANNOUNCEDû
BUY TO LETû5+û2-"3ûBACKEDûBYûMORTGAGESû 'ERMANûAUTOû!"3û3#û'ERMANYû!UTOû
TOGETHER FINANCIAL SERVICESûHASûINCREASEDûITSû ORIGINATEDûBYû+"#û)RELANDûBETWEENûûANDû  û5'û5NLIKEûTHEûRECENTûSPATEûOFû
REVOLVINGûSECURITISATIONûVEHICLEûLAKESIDE  FULL STACKûCONSUMERû!"3ûINûEUROSû û

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 1/11/2019 (CONTINUED)

Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type
GSMS 2019-GSA1 US$72.793 9.92 3.34 Goldman Sachs NR/AAA/AAA CMBS
GSMS 2019-GSA1 US$39.035 9.92 3.511 Goldman Sachs NR/AA/AA- CMBS
GSMS 2019-GSA1 US$35.869 9.92 3.806 Goldman Sachs NR/A-/A- CMBS
HART 2019-B US$247 0.25 1.907 RBC CM/BNP Paribas/Credit Agricole/Lloyds/Mizuho/MUFJ NR/A1+/F-1+ ABS
HART 2019-B US$348 1.01 1.930 RBC CM/BNP Paribas/Credit Agricole/Lloyds/Mizuho/MUFJ NR/AAA/AAA ABS
HART 2019-B US$348 2.20 1.940 RBC CM/BNP Paribas/Credit Agricole/Lloyds/Mizuho/MUFJ NR/AAA/AAA ABS
HART 2019-B US$100.75 3.30 2.000 RBC CM/BNP Paribas/Credit Agricole/Lloyds/Mizuho/MUFJ NR/AAA/AAA ABS
HART 2019-B US$20.26 3.76 2.210 RBC CM/BNP Paribas/Credit Agricole/Lloyds/Mizuho/MUFJ NR/AA+/AA+ ABS
HART 2019-B US$33.8 3.93 2.400 RBC CM/BNP Paribas/Credit Agricole/Lloyds/Mizuho/MUFJ NR/AA-/A+ ABS
MSAIC 2019-2 US$89.3 5.09 +130bps Deutsche Bank/BNP Paribas NR/NR/NR ABS
MSAIC 2019-2 US$88.92 5.31 +170bps Deutsche Bank/BNP Paribas NR/NR/NR ABS
MSAIC 2019-2 US$7.315 2.16 +275bps Deutsche Bank/BNP Paribas NR/NR/NR ABS
MSAIC 2019-2 US$12.54 2.87 +465bps Deutsche Bank/BNP Paribas NR/NR/NR ABS
NRART 2019-T5 US$249.877 1.96 2.425 Credit Suisse/Barclays/JP Morgan NR/AAA/NR RMBS
NRART 2019-T5 US$9.261 1.96 2.553 Credit Suisse/Barclays/JP Morgan NR/AA/NR RMBS
NRART 2019-T5 US$10.028 1.96 2.603 Credit Suisse/Barclays/JP Morgan NR/A/NR RMBS
NRART 2019-T5 US$26.655 1.96 2.85 Credit Suisse/Barclays/JP Morgan NR/BBB/NR RMBS
NRART 2019-T5 US$4.179 1.96 4.377 Credit Suisse/Barclays/JP Morgan NR/BB/NR RMBS
Pepper Group €100 2.4 3mE+110bps CBA/Citi/Natixis/NAB/Societe Generale/WBC Aaa/AAA/NR RMBS
Pepper Group US$150 1.5 1mUSL+93bps Citigroup Aaa/AAA/NR RMBS
Pepper Group A$161.4 2.3 BBSW+128bps CBA/Citigroup/Natixis/NAB/Societe Generale/WBC Aaa/AAA/NR RMBS
Pepper Group A$100 4.0 BBSW+160bps CBA/Citigroup/Natixis/NAB/SG/WBC Aaa/AA/NR RMBS
Pepper Group A$42.3 4.0 BBSW+190bps CBA/Citigroup/Natixis/NAB/SG/WBC AA/NR/NR RMBS
Pepper Group A$23 4.0 BBSW+280bps CBA/Citigroup/Natixis/NAB/SG/WBC A/NR/NR RMBS
Pepper Group A$16.5 4.03 BBSW+380bps CBA/Citigroup/Natixis/NAB/SG/WBC BBB/NR/NR RMBS
Pepper Group A$10 3.92 BBSW+580bps CBA/Citigroup/Natixis/NAB/SG/WBC BB/NR/NR RMBS
Pepper Group A$7 2.9 BBSW+680bps CBA/Citigroup/Natixis/NAB/SG/WBC B/NR/NR RMBS
PMIT 2019-4 US$102.555 0.89 na Goldman Sachs/Citigroup NR/NR/NR ABS
PMIT 2019-4 US$19.515 2.26 na Goldman Sachs/Citigroup NR/NR/NR ABS
PMIT 2019-4 US$16.786 2.83 na Goldman Sachs/Citigroup NR/NR/NR ABS
PSMC 2019-3 US$140 4.35 3.500 Wells Fargo/Cantor Fitzgerald NR/NR/AAA RMBS
PSMC 2019-3 US$85.365 2.43 3.500 Wells Fargo/Cantor Fitzgerald NR/NR/AAA RMBS
PSMC 2019-3 US$28.455 10.11 3.500 Wells Fargo/Cantor Fitzgerald NR/NR/AAA RMBS
TBOLT 2019-1 US$370 5.2 3.671 Mizuho/BofA/GS/Wells Fargo/BNP Paribas/Citigroup/ NR/NR/A ABS
JP Morgan/MUFJ/RBC CM/Societe Generale ABS
TBOLT 2019-1 US$67 5.2 4.750 Mizuho/BofA/GS/Wells Fargo/BNP Paribas/Citigroup/ NR/NR/BBB ABS
JP Morgan/MUFJ/RBC CM/Societe Generale

International Financing Review November 2 2019 41

INCLUDINGûDEALSûFROMû3ANTANDERû'ROUPû &REEINGûUPûTHEûRISK WEIGHTEDûASSETSû
COMPANIESû ûTHEûNEWûDEALûISûOFFERINGûONLYû GENERATEDûBPûOFûFULLY LOADEDû#%4ûû-UI¾Aû EMEA CLO
4RIPLEû!S SAIDûWHICHûREPRESENTSûANûEQUIVALENTûõMûOFû
0RICINGûISûEXPECTEDûNEXTûWEEKû EQUITY IPTS OUT FOR RELAUNCHED SPANISH
FOLLOWINGûISSUERûCALLSûONû-ONDAYûANDû h4HISûWASûGENERATEDûATûANûIMPLICITûCOSTûOFû SME CDO ALHAMBRA 2019-1
4UESDAYûSociete Generale ISûARRANGERûANDû JUSTûvû-UI¾AûSAIDûh7EûHAVEûUSEDûTHEû
ISûAûJOINTûLEADûWITHûING SantanderûANDû SECURITISATIONûASûANûEFlCIENTûBALANCEûSHEETû ,EADSûRELEASEDûINITIALûPRICEûTHOUGHTSûONû
Wells Fargo. MANAGEMENTûTOOLûFORûBOTHûCAPITALûANDû 4HURSDAYûFORûNON BANKûLENDERûBE-SPOKE
4HEûõMûPORTFOLIOûHASûAûONE YEARû LIQUIDITYv CAPITAL@Sû3PANISHû3-%û#$/ûALHAMBRA SME
REVOLVINGûPERIODûANDûHOLDSûûLOANSû 4HEûSECURITISATIONûWASûTHEûBANKSûlRSTû FUNDING 2019-1
WITHûANûAVERAGEûOUTSTANDINGûPRINCIPALûOFû PUBLICûSECURITISATIONûOFû3PANISHûCONSUMERû 4HEûDEALûWASûFORMALLYûRELAUNCHEDûONû
õû4HEûNEWUSEDûSPLITûISûûANDû LOANSûANDûALSOû3PAINSûLARGESTûPUBLICû -ONDAYûAFTERûNEARLYûAûYEARSûHIATUSûWITHOUTûAû
PRIVATECOMMERCIALûBORROWERSûAREû SECURITISATIONûSINCEû -OODYSûRATINGûANDûWITHûJP Morgan JOININGû
 -UI¾AûSAIDûTHEûDEALûHADûANûIMPLICITûCOSTû ORIGINALûLEADûMANAGERûNatWest Markets ASûAûLEAD
4HEûDEALûISûSTRUCTUREDûFORû343ûELIGIBILITY OFûCOREûCAPITALûOFûûMAKINGûITûEFlCIENTû 4HEûMANDATEûWASûlRSTûANNOUNCEDûINû-AYû
FROMûAûFUNDINGûANDûFROMûAûCAPITALûPOINTûOFû ûANDûAûROADSHOWûTOOKûPLACEûINû
SABADELL’S CONSUMER LOAN ABS FREED VIEW .OVEMBERûAHEADûOFûEXPECTEDûPRICINGûINû
UP €448m RWAS Deutsche BankûARRANGEDûTHEû!"3ûANDûWASû $ECEMBERû0RICINGûFORûTHEûRELAUNCHEDû#$/û
JOINTûLEADûWITHûBanco Sabadell ISûNOWûEXPECTEDûTHISûWEEK
BANCO SABADELLûGAVEûUPûõMûOFûNETû 4HEû306ûSOLDûTHREEûPUBLICLYûSYNDICATEDû 4HEûDEALûISûTHEûlRSTûOFûITSûKINDûSINCEûTHEû
INTERESTûINCOMEûOVERûTHEûNEXTûFOURûYEARSû TRANCHESûTOPPEDûBYûANûõMû#LASSû!ûTHATû CRISISû)TûSECURITISESûAûSMALLûPOOLûOFûûLOANSû
WHENûITûSOLDûITSûõBNûCONSUMERûLOANSû INCLUDEDûAûõMûPROTECTEDûORDER TOûNON INVESTMENTûGRADEû3PANISHû3-%SûANDû
SECURITISATIONûSABADELL CONSUMO 1ûINû &OURûOTHERûTRANCHESûWEREûPRE PLACEDû û MID CAPS
3EPTEMBER INCLUDINGûTHEû#LASSû:ûWHICHûISûPAIDûDOWNû 4HEREûAREûTWOûRATINGûAGENCIESûONûTHEû
"UTûINûRETURNûTHEûBANKûBOOKEDûANûõMû BYûEXCESSûCASHûANDûSIZEDûATûAûNOTIONALû TRANSACTIONû$"23ûANDû3PAIN BASEDû!XESORû
CAPITALûGAINûASûTRADINGûINCOMEûANDûRELEASEDû õM "UTûWHENûTHEû#$/ûWASûANNOUNCEDûLASTûYEARû
õMûOFûRISK WEIGHTEDûASSETSûTHEûBANKSû 3ELLINGûTHATûTRANCHEûALLOWEDû3ABADELLûTOû "E 3POKEûWASûALSOûWORKINGûONûGETTINGûAû
#&/û4OM¯Sû6ARELAû-UI¾AûSAIDûONûANû ACHIEVEûFULLûDECONSOLIDATIONûOFûTHEû -OODYSûRATING
EARNINGSûCALLûONû&RIDAY PORTFOLIO (AVINGû-OODYSûONûBOARDûASûWELLûASû$"23û
nûTHEYûAREûTWOûOFûTHEûFOURûMAINû%#"
ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS
RECOGNISEDûRATINGûAGENCIESûnûWOULDûHAVEû
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
ALLOWEDûTHEû4RIPLEû!SûTOûBENElTûFROMû
Managing No of Total Share Managing No of Total Share
%UROSYSTEMûELIGIBILITYû"UTûINûTHEûENDûTHEû
bank or group issues US$(m) (%) bank or group issues €(m) (%)
-OODYSûRATINGûCOULDûNOTûBEûCONCLUDED
1 BofA 24 6,031.00 10.8 1 SG 13 2,663.95 9.8
h)TSûANû3-%ûTRANSACTIONûBUTûALSOûHASûAûLOTû
2 Lloyds Bank 23 5,064.96 9.1 2 BNP Paribas 8 2,506.98 9.2
OFûPARALLELSûWITHûAû#,/vûSAIDû-ILESû(UNTû
3 BNP Paribas 23 5,012.32 9.0 3 UniCredit 7 1,891.22 6.9
HEADûOFûSECURITISEDûPRODUCTSûANDûALTERNATIVESû
4 Citigroup 24 4,883.68 8.7 4 Credit Agricole 7 1,809.26 6.6
SYNDICATEûATû.AT7ESTû-ARKETSûh3OûYOUûCANû
5 HSBC 16 3,305.14 5.9 5 HSBC 7 1,808.89 6.6
BEûSTUCKûBETWEENûTWOûRATINGSû
6 SG 13 3,031.45 5.4 6 Morgan Stanley 6 1,808.20 6.6
METHODOLOGIESv
7 Deutsche Bank 10 2,633.82 4.7 7 BofA 7 1,529.73 5.6
(UNTûSAIDûHEûEXPECTEDûTHATûRATINGû
8 Credit Agricole 9 2,350.68 4.2 8 Banca IMI 6 1,452.95 5.3
AGENCIESûNOTûONûTHEûDEALûMIGHTûADAPTûTHEIRû
9 Morgan Stanley 7 2,201.30 3.9 9 Deutsche Bank 4 1,372.18 5.0
APPROACHESûTOûTHEûASSETûCLASSûASûTHEûPIPELINEû
10 UniCredit 7 2,095.66 3.8 10 Citigroup 8 1,183.75 4.3
OFûSUCHûDEALSûGROWSûINûTHEûFUTURE
Total 110 55,876.72 Total 56 27,235.14
,IKEûAûLEVERAGEDûLOANû#,/ûTHEû!LHAMBRAû
Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, credit-linked notes (Euro, foreign, global and
domestics) and excludes CDOs. domestics) and excludes CDOs. PORTFOLIOûHOLDSûAûRELATIVELYûSMALLûNUMBERûOFû
Source: Refinitiv SDC code: B16n Source: Refinitiv SDC code: B16g

ALL INTL ISSUERS (EXCLUDING SELF-FUNDED)

GLOBAL SECURITISATIONS IN STERLING SECURITISATIONS – ALL EUROPEAN RMBS BOOKRUNNERS: 1/1/2019 TO DATE
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share
Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%)
bank or group issues £(m) (%) bank or group issues €(m) (%)
1 Credit Suisse 123 25,209.97 10.6
1 Lloyds Bank 22 3,183.84 17.2 1 Citigroup 18 3,275.87 16.3 2 Citigroup 116 22,554.82 9.5
2 BofA 16 3,099.68 16.8 2 BofA 13 3,235.48 16.1 3 JP Morgan 91 19,356.24 8.1
3 Citigroup 16 2,469.16 13.4 3 Lloyds Bank 14 2,716.90 13.6 4 BofA 83 18,216.62 7.6
4 BNP Paribas 14 1,372.61 7.4 4 BNP Paribas 13 1,968.11 9.8 5 Barclays 86 16,482.83 6.9
5 HSBC 10 1,194.19 6.5 5 Morgan Stanley 5 1,569.41 7.8 6 Wells Fargo 73 15,611.09 6.5
6 Credit Suisse 1 1,001.14 5.4 6 Credit Suisse 1 1,116.50 5.6 7 Deutsche Bank 82 14,667.59 6.1
7 NatWest Markets 8 906.00 4.9 7 NAB 7 786.07 3.9 8 Goldman Sachs 64 12,907.16 5.4
8 Deutsche Bank 5 810.57 4.4 8 Barclays 4 728.87 3.6 9 Morgan Stanley 45 9,952.61 4.2
9 Santander 7 806.19 4.4 9 HSBC 4 707.52 3.5
10 Nomura 44 9,373.90 3.9
10 NAB 7 697.25 3.8 10 Natixis 5 594.12 3.0
Total 503 238,652.85
Total 51 18,493.81 Total 42 20,049.89
Includes securitisations, PFI bonds and credit-linked notes. Excludes US
Including Euro, foreign, global and domestics, excluding CDOs. Including Euro, foreign, global and domestics, excluding CDOs global ABS/MBS, CDOs and self funded issues.
Source: Refinitiv SDC code: B16i Source: Refinitiv SDC code: B10a Source: Refinitiv SDC code: J10d

42 International Financing Review November 2 2019

 STRUCTURED FINANCE

LOANSû"UTûWHILEûMOSTûLOANSûINûAûTYPICALû#,/ûAREû SECURITISATIONûOFû3PANISHûCONSUMERûLOANSû 4HEûõMûUNRATEDû#LASSû$ûISûOFFEREDû

TOûLARGEûCOMPANIESûONûWHICHû-OODYSûWOULDû WHICHûWASûTHEûLARGESTûPLACEDû3PANISHû!"3û WITHû)04SûOFûBPûAREAû4HEûõMû#LASSû%û
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US ASSET-BACKED SECURITIES GLOBAL STRUCTURED FINANCE IN US$

KKR REFINANCES AVOCA CLO XI VIA
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
GOLDMAN SACHS
Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
KKRûLASTûWEEKûPRICEDûTHEûRElNANCINGûOFû
1 Citigroup 120 29,563.00 10.5 1 JP Morgan 216 70,696.63 12.1
4RIPLEû!ûANDû$OUBLEû!ûTRANCHESûFROMûITSû
2 JP Morgan 104 28,311.75 10.1 2 Citigroup 224 65,465.87 11.2
õMûAVOCA CLO XIûVIAûLEADûMANAGERû
3 Barclays 96 26,140.03 9.3 3 Wells Fargo 194 64,749.07 11.1
Goldman Sachs.
4 Wells Fargo 91 24,400.00 8.7 4 Credit Suisse 213 62,623.61 10.7
4HEû#LASSû!ûCAMEûATûBPûAFTERûBPûAREAû
5 BofA 77 19,636.55 7.0 5 BofA 162 50,425.29 8.6
PRICEûTALK
6 Credit Suisse 75 15,934.35 5.7 6 Barclays 154 40,249.17 6.9
4HREEû$OUBLEû!ûTRANCHESûnûONEûlXEDûRATEû
7 RBC 63 15,834.31 5.6 7 Morgan Stanley 108 37,404.58 6.4
ANDûTWOûmOATERSûnûHADûBEENûONûOFFERûTOOû
8 Deutsche Bank 71 14,437.11 5.1 8 Goldman Sachs 130 31,294.26 5.4
WITHûTHEûlXEDûRATEûTALKEDûATûTHEûûAREAû
9 Goldman Sachs 53 10,629.10 3.8 9 Deutsche Bank 113 23,121.03 4.0
ANDûTHEû&2.SûATûBPûAREAû/NLYûTHEûlXEDû
10 MUFG 45 10,565.51 3.8 10 Nomura 72 16,403.27 2.8
RATEûWASûSOLDûPRICINGûATû
Total 516 281,621.73 Total 1,087 582,951.16
4HEû#,/ûHASûAûNON RESETûPERIODûOFûAROUNDû
Excludes MBS. Including securitisations (Euro, foreign, global and domestics, excluding
CDOs) and PFI bonds. ONEûYEARûANDûAûREINVESTMENTûPERIODûOFû
Source: Refinitiv SDC code: F14 Source: Refinitiv SDC code: B16b AROUNDûûYEARS

GLOBAL CDOs ALL EUROMARKET CDOs STRUCTURED FINANCE – ALL INTL ISSUERS
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 20 10,673.41 12.6 1 Morgan Stanley 12 5,284.05 14.7 1 Credit Suisse 125 26,789.99 10.5
2 Citigroup 24 10,367.86 12.2 2 Credit Suisse 10 4,199.36 11.7 2 JP Morgan 101 23,435.66 9.2
3 Wells Fargo 16 8,002.74 9.5 3 Barclays 11 3,793.68 10.6 3 Citigroup 119 23,407.88 9.2
4 Morgan Stanley 17 7,419.45 8.8 4 Citigroup 7 3,141.77 8.7 4 BofA 86 20,043.28 7.9
5 Barclays 17 6,785.76 8.0 5 Deutsche Bank 7 2,846.65 7.9 5 Barclays 89 17,039.80 6.7
6 Deutsche Bank 12 5,194.31 6.1 6 Jefferies 6 2,328.72 6.5 6 Wells Fargo 75 15,929.52 6.3
7 Credit Suisse 11 4,604.46 5.4 7 Goldman Sachs 5 2,326.31 6.5 7 Goldman Sachs 70 14,910.21 5.9
8 Goldman Sachs 10 4,078.70 4.8 8 BNP Paribas 5 2,214.59 6.2 8 Deutsche Bank 82 14,667.59 5.8
9 BofA 8 4,009.12 4.7 9 JP Morgan 6 1,876.65 5.2 9 Morgan Stanley 45 9,952.61 3.9
10 Jefferies 10 3,933.57 4.6 10 BofA 4 1,826.59 5.1 10 Nomura 44 9,373.90 3.7
Total 190 84,638.41 Total 84 35,958.21 Total 532 254,758.20
Including Euro, foreign, global, US domestics. Excludes global and domestic. Includes securitisations, PFI bonds, self-funded issues and credit-linked
notes. Excludes US global ABS/MBS and CDOs.
Source: Refinitiv SDC code: B12 Source: Refinitiv SDC code: J11 Source: Refinitiv SDC code: J10c

International Financing Review November 2 2019 43


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44 International Financing Review November 2 2019

 STRUCTURED FINANCE

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International Financing Review November 2 2019 45

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 1/11/2019
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

SSAR
US DOLLARS
Oct 28 2019 KfW US$1bn Mar 31 2021 1.75 99.99 MS+4 / T+9.6 1.752

STERLING
Oct 30 2019 African Development Bank £175m Dec 20 2021 0.875 100.08 G+31bp -
SWISS FRANCS
Oct 29 2019 Canton of Geneva (green) SFr175m May 26 2028 0 101.093 MS+15 / Eidg+45 -0.128

Oct 29 2019 Canton of Geneva (green) SFr285m May 28 2032 0.125 100.264 MS+15 / Eidg+49.6 0.104

Oct 29 2019 Canton of Geneva (green) SFr200m Nov 28 2039 0.3 100.535 MS+12 / Eidg+48.6 0.272

NON CORE
Oct 30 2019 BNG Bank A$100m incr Apr 26 2029 3.3 114.081 ASW+52 / 1.685
(A$995m) ACGB+55
CORPORATES
US DOLLARS
Oct 28 2019 Dover Corporation US$300m Nov 4 2029 2.95 99.579 T+115 2.999

Oct 28 2019 Hershey US$300m Nov 15 2024 2.05 99.914 T+40 2.068

Oct 28 2019 Hershey US$300m Nov 15 2029 2.45 99.964 T+60 2.454

Oct 28 2019 Hershey US$400m Nov 15 2049 3.125 99.612 T+80 3.145

Oct 28 2019 Hyundai Capital America US$800m Nov 1 2022 2.85 99.989 T+120 2.854

Oct 28 2019 Hyundai Capital America US$700m Nov 1 2026 3.5 99.975 T+175 3.504

Oct 28 2019 Rogers Communications US$1bn Nov 15 2049 3.7 98.926 T+142 3.76

Oct 29 2019 Comcast US$1.6bn Feb 1 2030 2.65 99.851 T+83 2.667

Oct 29 2019 Comcast US$1.35bn Feb 1 2039 3.25 99.81 T+93 3.263

Oct 29 2019 Comcast US$1.8bn Feb 1 2050 3.45 99.776 T+113 3.463

Oct 29 2019 DH Europe Finance II Sarl US$700m Nov 15 2022 2.05 99.994 T+40 2.052

Oct 29 2019 DH Europe Finance II Sarl US$700m Nov 15 2024 2.2 99.952 T+55 2.21

Oct 29 2019 DH Europe Finance II Sarl US$800m Nov 15 2029 2.6 99.903 T+78 2.611

Oct 29 2019 DH Europe Finance II Sarl US$900m Nov 15 2039 3.25 99.809 T+93 3.263

Oct 29 2019 DH Europe Finance II Sarl US$900m Nov 15 2049 3.4 99.756 T+108 3.413

Oct 29 2019 DTE Energy US$500m Nov 1 2022 2.25 99.851 T+65 2.302

Oct 29 2019 DTE Energy US$300m Mar 1 2030 2.95 99.676 T+115 2.987

Oct 29 2019 Ford Motor Credit Company US$1.5bn Nov 1 2024 4.063 100 T+240 4.063

Oct 29 2019 JetBlue Airways US$589m May 15 2032 2.75 100 2.75 2.75

Oct 29 2019 JetBlue Airways US$184m May 15 2028 2.95 100 2.95 2.95

Oct 31 2019 Flex US$200m Jun 15 2029 4.875 107.289 T+225 3.936

Oct 31 2019 Paccar Financial US$300m Feb 7 2023 1.9 99.995 T+38 1.902

Oct 31 2019 Southern Natural Gas Co US$100m Mar 15 2047 4.8 112.025 4.8 4.06

46 International Financing Review November 2 2019

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

- - - Aaa/AAA/AAA BofA/BMO/BNPP -
(Scope)

- - - Aaa/AAA RBC -

MS+15/19 - - -/AA- CS/BCGE/UBS Tsy 47.09%, AM 42.88%, PF 5.99%,

Retail/PB 4.04%. Switz 100%
MS+15/19 - - -/AA- CS/BCGE/UBS AM 59.99%, Tsy 18.06%, PF 10.19%,
Ins 9.26%, Retail/PB 2.52%. Switz
100%
MS+12/16 - - -/AA- CS/BCGE/UBS Ins 48.33%, AM 36.17%, PF 15%, Retail/
PB 0.5%. Switz 100%

- - - Aaa/AAA/AAA TD -

T+145 area, 5 US$1.6bn Baa1/BBB+ JPM/GS(a)/DB/BofA/HSBC/Citi(p) -

T+120 area (+/-5)
T+55-60 area, 1 US$1.8bn A1/A/ BofA/Citi/JPM/RBC -
T+43 area (+/-3)
T+75-80 area, 2 US$2.1bn A1/A/ BofA/Citi/JPM/RBC -
T+63 area (+/-3)
T+100-105 area, 2 US$2.3bn A1/A/ BofA/Citi/JPM/RBC -
T+83 area(+/-3)
T+140-145 area, 4 US$3.1bn Baa1/BBB+ Barc/BofA/JPM/RBC/SG/TD -
T+135bp-140 area
T+195-200 area, 9 US$2.7bn Baa1/BBB+ Barc/BofA/JPM/RBC/SG/TD -
T+175 (the#)
T+160 area, 3 US$3.6bn Baa1/BBB+/BBB+ BofA/Citi/JPM -
T+145 area (+/-3)
T+105 area, 0 US$5.5bn A3/A-/A- Miz/MS/SMBC(a)/GS/Santan/TD(p) -
T+85 area (+/-2)
T+115 area, 1 US$3.3bn A3/A-/A- Miz/MS/SMBC(a)/GS/Santan/TD(p) -
T+95 area (+/-2)
T+135 area, 1 US$4.9bn A3/A-/A- Miz/MS/SMBC(a)/GS/Santan/TD(p) -
T+115 area (+/-2)
T+50 area, 0 US$1.6bn Baa1/BBB+ BofA/Miz/MUFG/US Bank/WFS -
T+40 (the #)
T+65 area, 0 US$2.15bn Baa1/BBB+ BofA/Miz/MUFG/US Bank/WFS -
T+55 (the #)
T+100 area, -8 US$4.7bn Baa1/BBB+ BofA/Miz/MUFG/US Bank/WFS -
T+85 area (+/-5)
T+115 area, -8 US$3.3bn Baa1/BBB+ BofA/Miz/MUFG/US Bank/WFS -
T+100 area (+/-5)
T+130 area, -8 US$4.3bn Baa1/BBB+ BofA/Miz/MUFG/US Bank/WFS -
T+115 area (+/-5)
T+85 area, -2 US$1.3bn Baa2/BBB/BBB+ Barc/Citi/Scotia(a)/BofA/JPM/ -
T+70 area (+/-5) WFS(p)
T+135 area, -2 US$1.1bn Baa2/BBB/BBB+ Barc/Citi/Scotia(a)/BofA/JPM/ -
T+120 area (+/-5) WFS(p)
T+262.5 area, 1 US$3.4bn Ba1/BBB-/BBB GS/JPM/MIZ/NatWest(a)/BofA/DB/ -
T+240 (the #) TD(p)
3.00%area, - US$700m Aa3/AA- Citi(str)/GS/MS/Barc/BofA/BNPP/ -
3.00% area(+/-5) CA
3.20% area, - US$1.8bn A2/A Citi(str)/GS/MS/Barc/BofA/BNPP/ -
2.8% area(+/-5) CA
T+245 area, 7 US$350m Baa3/BBB-/BBB- USB/Citi/JPM(a)/SMBC(p) -
T+230 area (+/- 5)
T+50 area, 1 US$550m A1/A+/ MUFG/BofA/BNP -
T+40 area (+/-2)
T+200 area, -2.5 US$200m Baa2/BBB+/BBB+ Barc/Citi/STRH -
-

International Financing Review November 2 2019 47

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 1/11/2019 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

EUROS
Oct 28 2019 Dover Corporation €500m Nov 4 2027 0.75 99.337 MS+88 / B+130.9 0.836
Oct 28 2019 Vicinity Centres €500m Nov 7 2029 1.125 99.456 MS+110 / B+151.4 1.183

Oct 28 2019 SES €500m Nov 4 2028 0.875 99.762 MS+95 0.906

Oct 29 2019 Eli Lilly €600m Nov 1 2031 0.625 98.902 MS+55 / B+107.8 0.721

Oct 29 2019 Eli Lilly €1bn Nov 1 2049 1.7 99.442 MS+125 / B+158.2 1.724

Oct 30 2019 Daimler €1.75bn Nov 6 2023 0.25 99.714 MS+60 / B+96.0 0.322

Oct 30 2019 Daimler €1.25bn May 26 2027 0.625 99.353 MS+80 / B+122.5 0.714

Oct 30 2019 Daimler €1bn Nov 6 2031 1.125 98.824 MS+105 / B+158.7 1.125

Oct 30 2019 KPN €500m Perp 2.125 99.389 MS+234.4 2.125

(Feb 2025)
Oct 31 2019 E.ON €500m Nov 7 2031 0.625 98.673 MS+62 / B+116 0.741

STERLING
Oct 28 2019 Sovereign Housing Capital £375m (£125m Nov 4 2048 2.375 97.939 G+127 2.475
retained)
Oct 30 2019 PRS Finance £250m (£63m Aug 24 2034 1.50% 98.622 G+68bp 1.61%
retained)
SWISS FRANCS
Oct 30 2019 Stadler Rail SFr300m Nov 20 2026 0.375 100.553 MS+68 / Eidg+94 0.295

NON CORE
Oct 30 2019 Verizon A$450m May 6 2026 2.1 99.804 ASW+110 2.133
Oct 30 2019 Verizon A$300m May 6 2030 2.65 99.818 ASW+140 2.67
Oct 30 2019 Verizon A$500m Nov 4 2039 3.5 100 ASW+185.25 3.5
Oct 30 2019 Coles A$300m Nov 6 2026 2.2 99.678 ASW+117 2.25

Oct 30 2019 Coles A$300m Nov 6 2029 2.65 99.717 ASW+142 2.683

Oct 30 2019 Origin Energy A$300m Nov 11 2027 2.65 99.714 ASW+155 2.69

Oct 31 2019 Endeavour Group A$350m Nov 11 2026 2.25 99.664 ASW+123 2.303
FINANCIALS
US DOLLARS
Oct 28 2019 Ashtead Group US$600m May 1 2028 4 100 4 4

Oct 28 2019 Ashtead Group US$600m Nov 1 2029 4.25 100 4.25 4.25

Oct 28 2019 Citigroup US$1.5bn Nov 4 2022 2.312 100 T+67 2.312

48 International Financing Review November 2 2019

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+115/120 - - Baa1/BBB+/- GS/JPM -

MS+120 area, 35 €800m A2/A/- BNPP/BofA/HSBC/Westpac -
MS+105/110
MS+130 area, - >€2.75bn Baa2/BBB-/- GS/HSBC/JPM/MUFG/SMBC/SG -
MS+100 area
MS+85 area, -10 - A2/A+/A- BNPP/Citi/JPM/MS -
MS+60 area
MS+145 area, 0 - A2/A+/A- BNPP/Citi/JPM/MS -
MS+130 area
MS+75 area, 10 €3.3bn A2/A/A- Barc/BNPP/CACIB/CMZ/UniCredit Fra 16%, Ger/Aus 40%, BeNeLux 12% ,
MS+60 UK/Ire 23%,
S. Eur 6%, Switz 2%, Other 1%, Funds
75%,
Ins/Pen 9%, OIs/Ag11%, Banks/PWM
3%, Others 2%
MS+95 area, 15 €2.2bn A2/A/A- Barc/BNPP/CACIB/CMZ/UniCredit Fra 15%, Ger/Aus 41%, BeNeLux 8% ,
MS+80 UK/Ire 24%, S.Eur 5%, Switz 4%, Asia
2%, Other 1%, Funds 68%,
Ins/Pen 9%, OIs/Ag17%, Banks/PWM
4%, Others 2%

MS +120 area, 20 €1.7bn A2/A/A- Barc/BNPP/CACIB/CMZ/UniCredit Fra 17%, Ger/Aus 34%, BeNeLux 7% ,
MS+ 105 UK/Ire 27%,
S.Eur 5%, Switz 4%, Asia 5% Other 1%,
Funds 61%,
Ins/Pen 23%, OIs/Ag 13%, Banks/PWM
2%, Others 1%
2.5%/2.625% - >€1.3bn Baa3/BBB/BBB Barc/BNPP/GS/NWB
2.25%
MS+90/95 -5 >€2.6bn Baa2/BBB/- BayernLB/CMZ/NatWest/SMBC Ger/Aus 39%, UK/Ire 26%, Fra 15%,
MS+65/70 S.Eur 8%,
BeNeLux 4%, Nordics 4%, Switz 2%,
Asia 1%, Other 1%
Funds 74%, OIs/Ag 8%, Banks/PWM 7%,
Ins/PF 10%,
Other 1%

G+140 area, - >£1.2bn A2/A/+/- Lloyds/NatWest -

G+130 (+/-3)
- - - Aa2/-/- HSBC/NatWest -

MS+70/80, - - Fedafin Baa-/UBS CS/ZKB -

MS+68/73 BBB-

ASW+115 area - - Baa1/BBB+/A- DB/Miz/RBC/TD -

ASW+145 area - - Baa1/BBB+/A- DB/Miz/RBC/TD -
ASW+210 area - - Baa1/BBB+/A- DB/Miz/RBC/TD -
ASW+125/130 - A$900m Baa1/BBB+ MUFG/NAB/WBC AUD/NZ 75%, Asia 24%, EMEA
1%. AM 82%, banks 9%, HF 7%,
MM 2%.
ASW+150/155 - A$900m Baa1/BBB+ MUFG/NAB/WBC AUD/NZ 79%, Asia 20%, EMEA
1%. AM 75%, banks 18%, HF 6%,
MM 1%.
ASW+170/175 - A$1.3bn Baa2/BBB ANZ/Citi/CBA AUD/NZ 71%, Asia 28%, EMEA 1%. AM
72%, banks 14%, ins and pf 4%, MM 4%,
others 6%.
ASW+130 area - - Baa1 ANZ/CBA/HSBC -

4.25% area, - - Baa3/BBB- JPM/BofA/WFS/Citi/DB/MUFG/ -

4%/4.25% area NatWest/HSBC/STRH/Barc/Lloyds
4.5% area, - - Baa3/BBB- JPM/BofA/WFS/Citi/DB/MUFG/ -
4.25%/4.5% area NatWest/HSBC/STRH/Barc/Lloyds
T+low 80s area, 2 US$3.2bn A3/BBB+/A Citi -
T+70 area (+/-3)

International Financing Review November 2 2019 49

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 1/11/2019 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Oct 28 2019 Citigroup US$500m Nov 4 2022 SOFR+87 100 SOFR+87 SOFR+87

Oct 28 2019 Citigroup US$2.25bn Nov 5 2030 2.976 100 T+113 2.976

Oct 29 2019 PNC Financial Services US$650m Nov 1 2024 2.2 99.967 T+55 2.207
Group
Oct 29 2019 Royal Bank Of Scotland US$750m Nov 1 2029 3.754 100 T+210 3.754
Group
Oct 29 2019 SEB US$900m Perp 5.125 100 T+346.3 5.125
(May 25)
Oct 29 2019 State Street US$1bn Nov 1 2025 2.354 100 T+70 2.354

Oct 29 2019 State Street US$500m Nov 1 2034 3.031 100 T+120 3.031

Oct 31 2019 HSBC Holdings US$2bn Nov 7 2025 2.633 100 T+112 2.633

EUROS
Oct 28 2019 LBBW (AT1) €750m Perpetual 4 100 MS+420.7 4
(Apr 2025)
Oct 28 2019 JP Morgan €1.75bn Nov 4 2032 1.047 100 MS+85 / B+138.1 1.047
(Nov 4 2031)
Oct 28 2019 Berlin Hyp (Green) €500m Nov 5 2029 0.5 99.157 MS+50 / B+91.6 0.587

Oct 29 2019 Banco Sabadell €500m Nov 7 2025 0.625 99.467 MS+97 / B+132 0.734

SWISS FRANCS
Oct 29 2019 UBS Group SFr275m Perpetual (Nov 2025) 3 100 MS+343.75 3
Oct 30 2019 Banco Santander SFr225m Nov 19 2027 0.2 100 MS+52 / Eidg+76.8 0.2
COVERED BONDS
US DOLLARS
Oct 29 2019 SMBC US$500m Nov 7 2022 2.014 100 MS+38 / T+36.7 2.104

EUROS
Oct 29 2019 SMBC €750m Nov 7 2029 0.409 100 MS+35 / B+76.6 0.409
Oct 29 2019 SpareBank 1 Boligkreditt €1bn Nov 5 2029 0.125 99.584 MS+10 / B+51.4 0.167

Oct 30 2019 BPCE €1.25bn Nov 8 2026 0.01 100.555 MS+5 / B+ 47.2 -0.069

Oct 30 2019 Deutsche Kreditbank €500m Nov 7 2029 0.01 99.164 MS+3 / B+45.7 0.094

HIGH YIELD
US DOLLARS
Oct 29 2019 BBA US Holdings US$650m Mar 1 2028 4 100 - 4
(Mar 2023)
Oct 29 2019 TransDigm US$2.65bn Nov 15 2027 5.5 100 T+373 5.5
(Nov 2022)
EUROS
Oct 28 2019 Faurecia €250m incr Jun 15 2026 (2022) 3.125 104.5 - 2.386
(€750m)

50 International Financing Review November 2 2019

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

SOFR+equiv, - US$1.4bn A3/BBB+/A Citi -

SOFR+equiv
T+130 area, 0 US$6.2bn A3/BBB+/A Citi -
T+115 area (+/-2)
T+70 area, 0 US$1.bn A3/A-/A+ JPM/PNC -
T+57 area(+/-2)
T+240 area, 0 US$7.bn Baa2/BBB/A BofA/CS/NWM/RBC -
T+230 area
5.375% area, - >US$2.75bn Ba1/BBB/- BNPP/GS/JPM/MS/SEB/UBS -
5.125% area
T+80 area, 4 US$1.8bn A1/A GS/JPM/MS/UBS -
T+70 (the #)
T+137.5 area, 5 US$1.6bn A2/A- GS/JPM/MS/UBS -
T+125 area (+/-5)
T+125 area, 3 US$4bn A2/A/AA- HSBC -
T+112 (the #)

4.5% area, 0 >€2.4bn Ba1/-/- BofA/Barc/Citi/HSBC/JPM/LBBW -

4.125% (+/-12.5)
MS+100 area - €3.6bn A2/A-/AA- JPM -

MS+65 area, - >€1.2bn Aa2/-/A+ CA/DZ/HSBC/LBBW/Uni -

MS+50/55
MS+115/120, - >€1.3bn BBB/BBB/A Saba/Barc/Natx/Nom/Uni -
MS+100 area

3%/3.25% - - -/BB/BBB- UBS -

MS+52 area - - A2/A/A BNPP/CS -

MS+high 30s, -’ -’ A1/A GS/SMBC/Barc/BNPP/HSBC/UBS -

MS+38 area

MS+high 30s - - GS/SMBC/Barc/BNPP/HSBC/UBS -

MS+13 area 2.5 >€1.5bn Aaa / - / - CMZ/CA/CS/DZ/Santan Ger/Aus 51%, BeNeLux 22%, Asia 7%,
Nord 6%,
S.Eur 5%, Fra 3%, UK/Ire 3%, Other 3%,
Banks 57%,
Ins/PF 15%, CB/OI 14%, AM 14%
MS+9 area 2.5 >€2.4bn Aaa/AAA Danske/HSBC/JPM/LBBW/Natixis/ Fra 38%, Ger/Aus 25, Nord 11%,
NordLB/UniCredit BeNeLux 10%,
UK/Ire 8% Others 3%, S.Eur 2%, Asia
2%, Switz 1%,
Banks 44%, CB/OIs 33%, AM 23%
MS+7 area 1 €2.06bn Aaa ABN/BayernLB/DZ/Natixis/UniCredit Ger 62%, Nord 11%, BeNeLux 10%, S.Eur
5%, Aus 3%,
Switz 3%, ME 3%, Other 3%, AM 40%,
Banks 31%,
OI 12%, CB 11%, Ins 6%

4.25% area, - - B2/BB BofA/Barc/HSBC/JPM/NatWest/ -

4% area SMBC/STRH
5.5% area - - B3/B- MS/GS/CITI/JPM/CS/KKR/RBC/ -
BARC/CACIB/HSBC/PNC

104 (+/-0.25), - - Ba1/BB+/BB+ BNPP/Natx/SG/CM-CIC/CMZ/ -

104.375 (+/-0.125) Santan

International Financing Review November 2 2019 51

GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (1/11/2019)
Moody’s S&P Fitch Moody’s S&P Fitch
Sovereign 1 2 3 4 5 6 Sovereign 1 2 3 4 5 6

Abu Dhabi Aa2 – AA AA+ AA AA+ Kyrgyzstan B2 Ba3 – – – –

Albania B1 Ba2 B+ BB – – Latvia A3 Aaa A AAA A– AAA
Andorra – Ba2 BBB AAA BBB+ A+ Lebanon Caa1 B2 B– n B+ CCC B–
Angola B3 B2 B– n B– Bn B Lesotho – – – – B B+
Argentina B2 n B1 CCC- B- RD B- Liechtenstein – Aaa AAA AAA – –
Armenia Ba3 Ba1 – – B+ p BB– Lithuania A3 p Aaa A AAA A– p AAA
Aruba – – BBB+ n BBB+ BBB– n BBB Luxembourg Aaa Aaa AAA AAA AAA AAA
Australia Aaa Aaa AAA AAA AAA AAA Macau Aa3 Aa2 – – AA AAA
Austria Aa1 Aaa AA+ AAA AA+ p AAA Macedonia (FYR) – – BB– BB BB+ BBB-
Azerbaijan Ba2 Ba2 BB+ BB+ BB+ BB+ Malaysia A3 A1 A– A+ A– A
Bahamas Baa3 Baa1 BB+ BBB- – – Maldives B2 n Ba3 – – B+ BB–
Bahrain B2 Ba3 B+ BB– BB– BBB– Malta A2 Aaa A– p AAA A+ p AAA
Bangladesh Ba3 Ba2 BB– BB– BB– BB- Mauritius Baa1 A2 – – – –
Barbados Caa1 B2 SD B- – – Mexico A3 n A1 BBB+ n A+ BBB A–
Belarus B3 B3 B B B B Moldova B3 B2 – – – –
Belgium Aa3 Aaa AA AAA AA– AAA Mongolia B3 B1 B B+ B B+
Belize B3 B1 B– B– – – Montenegro B1 p Ba1 B+ AAA – –
Bermuda A2 Aa3 A+ p AA+ – – Montserrat – – BBB– BBB– – –
Bolivia Ba3 Ba2 BB– BB– BB- n BB– Morocco Ba1 Baa2 BBB– BBB+ BBB– BBB
Bosnia Herzegovina B3 B3 Bp BB– – – Mozambique Caa2 Caa1 SD CCC RD B–
Botswana A2 Aa3 A– A+ – – Namibia Ba1 n Baa2 – – BB BB+
Brazil Ba2 Ba1 BB– BB+ BB – BB Netherlands Aaa Aaa AAA AAA AAA AAA
Bulgaria Baa2 A3 BBB– A– BBB p A– New Zealand Aaa Aaa AA p AAA AA AAA
Cambodia B2 B1 – – – – Nicaragua B2n B1 B-n B- B- n B-
Cameroon B2 Ba2 Bn BBB– B BB+ Nigeria B2 B1 B B B+ B+
Canada Aaa Aaa AAA AAA AAA AAA Norway Aaa Aaa AAA AAA AAA AAA
Cape Verde – – B BB– B B+ Oman Ba1 n Baa3 BB n BB+ BB+ BBB-
Cayman Islands Aa3 Aa2 – – – – Pakistan B3 n B2 B– B– B– B–
Chile A1 Aa2 A+ AA A AA Panama Baa1 A2 BBB+ AAA BBB A
China A1 Aa3 A+ A+ A+ A+ Papua New Guinea B2 n B1 B BB– – –
Colombia Baa2 A3 BBB– BBB+ BBB n BBB+ Paraguay Ba1 Baa3 BB BB+ BB+ BB+
Congo (DR) B3 n B3 CCC+ CCC+ – – Peru A3 A1 BBB+ A BBB+ A–
Congo (Rep) Caa2 n B2 B- BBB- CCC B+ Philippines Baa2 A3 BBB+ A- BBB BBB+
Cook Islands – – B+ AAA – – Poland A2 Aa3 BBB+ A A– AA–
Costa Rica B1n Ba2 B+n BB B+n BB– Portugal Baa3 p Aa3 BBB p AAA BBB p AA
Cote d’Ivoire Ba3 Baa3 – – B+ BBB– Qatar Aa3 n Aa3 AA– AA AA– AA
Croatia Ba2 p Baa3 BBB BBB+ BBB- p BBB+ Ras al–Khaimah A AA+ A AA+
Cuba Caa2 Caa2 – – – – Romania Baa3 A3 BBB– A– BBB– BBB+
Curacao – – BBB+ BBB+ – – Russia Baa3 Baa2 BBB- BBB BBB BBB
Cyprus Ba2 p A2 BBB- AAA BBB – A Rwanda B2 B1 B+ B B+ B+
Czech Rep Aa3 Aa1 up AA– AA+ AA- AAA St Vincent & Gren B3 Ba3 – – – –
Denmark Aaa Aaa AAA AAA AAA AAA San Marino – – – – BBB- n BBB+
Dominican Rep Ba3 Ba1 BB– BB+ BB– BB– Saudi Arabia A1 A1 A– A A A+
Ecuador B3 n B2 B– B– B– B– Senegal Ba3 Baa1 B+ p BBB– – –
Egypt B2 B1 B B B+ B+ Serbia Ba3 Ba1 BB p BB+ BB+ BBB–
El Salvador B3 B1 B- AAA B– B Seychelles – – – – BB BBB-
Estonia A1 Aaa AA– AAA AA- AAA Singapore Aaa Aaa AAA AAA AAA AAA
Ethiopia B1 n B1 B B Bn B Slovakia A2 Aaa A+ AAA A+ AAA
Fiji Ba3 Ba3 BB– BB– – – Slovenia Baa1 p Aa1 AA– AAA A AAA
Finland Aa1 Aaa AA+ AAA AA+ p AAA Solomon Islands B3 B2 – – – –
France Aa2 p Aaa AA AAA AA AAA South Africa Baa3 A3 BB BBB– BB+ n BBB–
Gabon Caa1 p B1 B BB+ South Korea Aa2 Aa1 AA AAA AA– AA+
Georgia Ba2 Baa3 BB BBB– BB BBB– Spain Baa1 Aa1 A AAA A– AAA
Germany Aaa Aaa AAA AAA AAA AAA Sri Lanka B2 Ba3 B B B B
Ghana B3 B1 B B+ B B Suriname B2 Ba3 B B+ B– n B-
Greece B1 Baa1 BB– c AAA BB- BBB- Sweden Aaa Aaa AAA AAA AAA AAA
Guatemala Ba1 Baa3 BB– BB+ BB n BB+ Switzerland Aaa Aaa AAA AAA AAA AAA
Honduras B1 Ba2 BB– BB – – Tanzania B1n Ba3 – – – –
Hong Kong Aa2 Aaa AA+ AAA AA n AAA Taiwan Aa3 Aa2 AA– AA+ AA– AA+
Hungary Baa3 Baa1 BBB A– BBB A Thailand Baa1 p A2 BBB+ A BBB+ p A–
Iceland A3 p A3 A A A A+ Trinidad & Tobago Ba1 Baa3 BBB BBB+ – –
India Baa2 Baa1 BBB– BBB+ BBB– BBB– Tunisia B2 n Ba3 – – B+ n BB–
Indonesia Baa2 A3 BBB BBB+ BBB BBB Turkey B1n B1 B+ BB- BB– n BB–
Iraq Caa1 B3 B– B– B– B– Turks & Caicos – – BBB+ AAA – –
Ireland A2 Aaa A+ AAA A+ AAA Uganda B2 Ba3 B B B+ B+
Israel A1 + Aa3 AA- AA+ A+ AA Ukraine Caa1 B3 B B B+ B
Italy Baa3 Aa3 BBB n AAA BBB n AA UAE Aa2 Aa2 – – – –
Jamaica B3 p Ba3 B+ BB– B+ BB- UK Aa2 Aaa AA n AAA AA n AAA
Japan A1 Aaa A+ p AA+ A AAA USA Aaa Aaa AA+ AAA AAA AAA
Jordan B1 Ba1 B+ BB – – Uruguay Baa2 A2 BBB A– BBB– n BBB+
Kazakhstan Baa3 p Baa2 BBB– BBB BBB BBB+ Venezuela C Ca SD CC WD WD
Kenya B2 Ba3 B+ BB– B+ BB– Vietnam Ba3 Ba1 BB BB BB p BB
Kuwait Aa2 Aa2 AA AA+ AA AA+ Zambia Caa2 n B3 CCC+ C CCC B–

1 Moody’s Government Bonds
2 Moody’s Country Ceilings
3 S&P Government Bonds
4 S&P Transfer and
Convertibility Assessments
5 Fitch Government Bonds
6 Fitch Country Ceilings
p Positive outlook/on watch
for upgrade
n Negative outlook/on watch
for downgrade
N New rating
W Rating withdrawn
SD Selective default
* Taken off positive watch/ c Improvement in ratings,
outlook outlook or watch status
** Taken off negative watch/ d Deterioration in ratings,
outlook outlook or watch status

52 International Financing Review November 2 2019

 EMERGING MARKETS
China 54 Hong Kong 55 India 56 Indonesia 57 South Korea 59 Russia 59 Serbia 59 Ukraine 60
Qatar 60 Argentina 61 Brazil 61

„ FRONT STORY MIDDLE EAST

Jumbo Mamoura deal lurches wider

Company formerly known as Mubadala issues its biggest deal
Abu Dhabi state-owned investment on the break, albeit in a softer market. that was 135bp over swaps after pricing at
company MAMOURA launched its biggest bond He said it appeared that the US$9.5bn 125bp.
lNANCINGûONû4UESDAYûTHOUGHûTHEû53BNû BOOKûCONTAINEDûINmATEDûORDERSûh)TûFEELSûLIKEû Leads began marketing about 35bp back
triple-tranche deal struggled to perform
YEARûSTARTINGûATû
once it was free to trade.
Mamoura, formerly known as Mubadala,
SOLDû53BNûlVE
they may have had to allocate to some OFûFAIRûVALUEûWITHûTHEûlVE
weaker hands to get to US$3.5bn,” said the 120bp area over swaps, the 10-year at 145bp
banker on Wednesday. area and the 30-year at 205bp area.
YEARû53BNû
YEARûANDû But a lead dismissed those criticisms. “The “Abu Dhabi started about 30bp back
US$1.5bn 30-year notes, taking advantage of BOOKûWASûABSOLUTELYûlNEûANDûJUSTIlEDûAû [when the sovereign did a US$10bn triple-
the low-rate environment. US$3.5bn trade.” tranche in late September] so it wasn’t really
The 30-year was structured as a Formosa He also said the bonds’ immediate cheap IPTs,” said the lead.
BONDûTHEûlRSTûBYûAû5!%ûCORPORATEûTOû
capture interest from Taiwanese life
insurers as it was listed on both the London
and Taipei exchanges.
The overall size of the transaction was a
big jump on the company’s recent deals. A
year ago, for example, Mamoura (Aa2/AA/
AA) raised US$800m through a November
YEARûNOTESû
ûNOTEûTHATûlNANCEDûAûTENDERûONûITSû
2021s and 2022s.
The jumbo size was criticized by some.
“They clearly outsized it,” said one banker
away after spotting the bonds down 50 cents
South Africa hits road with tales to tell
Sovereign to update investors after another difficult week
SOUTH AFRICA will have plenty to discuss with
investors during a non-deal roadshow that
begins on November 7 after headlines
around Eskom’s future and a faltering
ECONOMYûSIGNALLEDûANOTHERûDIFlCULTûWEEKûFORû
the country.
Investors were also waiting on a review by
Moody’s on Friday with the agency the only
one of the big three to still have the
sovereign at investment grade.
Moody’s rates South Africa at Baa3 with a
stable outlook. S&P and Fitch rate the
sovereign at BB+.
Sovereign bonds widened by 25bp-35bp
over the course of the week as the
government failed to appease concerns
about the direction of reforms.
On Tuesday a paper setting out plans to
overhaul the power sector disappointed
analysts. The government is seeking to break
up loss-making state utility Eskom over the
next three years and open up the industry to
more competition.
performance needed to be taken in context
of the FOMC meeting, which was taking
place on Wednesday.
“It’s Fed day. Asia’s down. Europe’s down.
US equity futures are down. Who wants to
buy risk going into the FOMC?”
By Friday the bonds were back above
reoffer, helped by a rally in Treasuries after
the Federal Reserve cut the funds rate by 25bp,
though in spread terms they were still wider.
The 10-year tranche, for example, was
99.569 bid, according to Tradeweb prices,
having priced at 98.918. On a spread basis
However, analysts were critical at the slow
pace of the planned reforms and lack of
details on how the government will tackle
Eskom’s debt burden.
“The market had hoped for a clear
separation of the three businesses
(transmission, generation, distribution) with
the government taking a large portion of
Eskom’s debt in order for the companies to
begin with a clean slate,” said Citigroup
analysts in a note.
“The debt restructuring was not
addressed, and as of now, the only clarity is
with the transmission business, which will
be spun out to an Eskom Holdings subsidiary
by the end of March 2020.”
Finance minister Tito Mboweni was
expected to outline further details the
following day in his medium-term budget,
including a debt restructuring strategy for
state-owned enterprises – estimated by
Citigroup at about R450bn (US$30bn).
“The trick is to come up with options that
International Financing Review November 2 2019
Pricing was subsequently tightened by
25bp on the 2024s, 20bp on the 2029s and
30bp on the 2049s. That meant concessions
ranging from 5bp to 15bp. Abu Dhabi paid a
10bp-15bp premium for its deal.
Citigroup, Deutsche Bank, First Abu Dhabi
Bank, HSBC, JP Morgan and SMBC Nikko were
BOOKRUNNERSûONûTHEûlVEûANDû
On the Formosa bond, Citigroup, Deutsche
Bank and HSBC were bookrunners, while
the other three were structuring agents
only.
Sudip Roy
cannot be contested later on, otherwise
credibility runs thin,” said the analysts.
But Mboweni’s budget failed to dispel the
blues. Citigroup described the budget as
“disappointing”, adding that the R10bn of
debt relief for Eskom was “far below
expectations”.
“We also believe the company may have
trouble accessing capital markets in 2020–
2021 without a stronger plan of support
absent a government guarantee,” said
analysts at the US bank.
The picture looked no better when taking
in the broader economy. Mboweni forecast
WIDERûBUDGETûDElCITSûANDûSOARINGûDEBTû4HEû
economy is barely growing and is also
saddled with chronically high
unemployment.
The National Treasury’s meetings, which
will take place in Europe and the US, are part
of a regular investor relations schedule and
will run until November 13.
Robert Hogg, Sudip Roy
53
 still has US$450m remaining from its offshore
debt issuance quota from the National
ASIA-PACIFIC Development and Reform Commission that
will expire at the end of this year.
CMB International, BoCom International, Orient
Securities (Hong Kong), CMB Wing Lung Bank and
TF International.
The proposed Reg S notes will be issued
by Hongkong International (Qingdao) with
CHINA
KAISA REVISITS THE 144A MARKET
KAISA GROUP HOLDINGS, rated B1/B/B, has
reopened its 11.95% senior notes due
October 22 2022 for a tap of US$200m,
bringing the total to US$600m.
The additional bonds were sold at 100.79
to yield 11.625%, inside initial guidance of
the 12% area.
YEARûBONDûPRICEDûONû3EPTEMBERû
The 144A/Reg S notes have expected
ratings of B2/B (Moody’s/Fitch).
Final statistics were not available at the
time of writing but orders were said to be in
EXCESSûOFû53BNûATûTHEûTIMEûOFûlNALû
guidance.
The Hong Kong-listed Chinese real estate
company plans to use the proceeds to
RElNANCEûMEDIUMûTOûLONG
TERMûDEBTû of Lan Zhou (CDL) and the state-owned
coming due within one year.
Credit Suisse was sole global coordinator as
well as lead manager and bookrunner with
Barclays and Kaisa Financial Group.
The original notes were priced on October
15 at 99.265 to yield 12.25%, inside initial
guidance of the 12.50% area.
4HEûDEALûWASûTHEûlRSTû!ûOFFERINGûFROMû
a Chinese high-yield property developer
since Country Garden raised US$550m in
LANZHOU LGFV READIES FOR DEBUT
LANZHOU CONSTRUCTION INVESTMENT (HOLDING)
GROUP has hired banks for a proposed debut
offering of US dollar senior guaranteed
notes.
China International Capital Corp, Bank of
China and SPDB International are global
coordinators as well as bookrunners and
lead managers with BoCom International, CMB
International, Haitong International, Industrial
Bank Hong Kong branch and Orient Securities
(Hong Kong).
4HEûGOVERNMENTûlNANCINGûVEHICLEûOFû
Lanzhou city in China’s northwestern
province of Gansu met investors in Hong
Kong and Singapore last week.
The proposed Reg S notes will be issued
by subsidiary City Development Company
Minsheng Banking Corp Hong Kong branch,
parent company will provide a guarantee.
The notes have expected ratings of Baa3/
BBB– (Moody’s/Fitch), on par with the
guarantor.
Lanzhou Construction Investment has
businesses in water, gas and heating supply,
public transport, strategic grain and oil
reserves, social housing and urban
development, according to Fitch.
THEûBENElTûOFûAûKEEPWELLûDEEDûAûDEEDûOFû
equity interest purchase undertaking and an
irrevocable cross-border US dollar standby
facility agreement issued by Qingdao City
Construction.
The bonds have expected ratings of BBB/
A– (Fitch/Lianhe Global).
4HEûINVESTMENTûANDûlNANCINGûARMûOFûTHEû
eastern Chinese coastal city of Qingdao last
tapped the market with a US$300m 4.00%
lVE
QINGDAO WEST COAST DEVELOPMENT (GROUP)
mandated arrangers for investor meetings
in Hong Kong on October 31 and Singapore
on November 1, ahead of a proposed US
dollar bond offering.
CLSA, CICC, Bank of China and Industrial Bank
Hong Kong branch are global coordinators.
They are also bookrunners with China
BoCom International and Guotai Junan
International.
An offering of senior unsecured Reg S
bonds may follow.
Wholly owned subsidiary Xi Hai An 2019
will issue the proposed bonds with a
guarantee from the parent.
The proposed bonds have expected
ratings of Baa3/BBB– (Moody’s/Fitch), in line
with the guarantor.
-AYûûACCORDINGûTOû2ElNITIVûDATA MANDATES PILE UP The group is the sole state-owned
+AISAûWHICHûINûûBECAMEûTHEûlRSTû enterprise responsible for infrastructure
Chinese developer to default on QINGDAO CITY CONSTRUCTION INVESTMENT (GROUP) construction in Qingdao West Coast New
international bonds, returned to the has hired banks for a proposed offering of Area. It is wholly owned by the State-owned
international bond market in June 2017 US dollar bonds. Assets Supervision and Administration
with an exchange offer and new-money Industrial Bank Hong Kong branch, Bank of Commission of Qingdao municipal people’s
issue. It has issued dollar bonds frequently China, China Minsheng Banking Corp Hong Kong government.
since then. branch, China International Capital Corp, ICBC ZHENGZHOU URBAN CONSTRUCTION INVESTMENT
Just this year, the company has visited the International and Zhongtai International are GROUP has hired banks for a proposed debut
dollar bond market seven times to raise joint global coordinators. They are also joint offering of US dollar bonds.
US$2.55bn, including the latest reopening. It bookrunners and joint lead managers with China International Capital Corp and China
Citic Bank International are joint global
ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS coordinators as well as joint bookrunners
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE and joint lead managers with China Minsheng
Asia-Pacific Managing No of Total Share Banking Corp Hong Kong branch, Orient Securities
Managing No of Total Share bank or group issues US$(m) (%) (Hong Kong), SPDB International, CMB
bank or group issues US$(m) (%) International, BoCom International, ICBC
1 Citigroup 248 48,436.16 8.3
1 HSBC 278 26,948.52 8.6 International, Industrial Bank Hong Kong branch
2 HSBC 345 44,604.44 7.7
2 Standard Chartered 192 17,057.26 5.4 and China Securities International.
3 JP Morgan 205 43,158.99 7.4
3 Citigroup 147 16,424.23 5.2 4HEûLOCALûGOVERNMENTûlNANCINGûVEHICLEûOFû
4 Standard Chartered 243 29,702.73 5.1
4 Bank of China 195 13,397.41 4.3 Zhengzhou city in China’s central Henan
5 BNP Paribas 135 23,457.44 4.0
5 JP Morgan 99 11,081.19 3.5 province met investors in Hong Kong last
6 Goldman Sachs 97 22,845.83 3.9
6 Credit Agricole 88 10,991.27 3.5 week and will hold further meetings in
7 Deutsche Bank 122 18,652.84 3.2
7 UBS 118 10,577.35 3.4 Singapore and London this week.
8 BofA 119 18,468.91 3.2
8 Credit Suisse 105 10,149.70 3.2
9 Credit Agricole 110 18,317.46 3.1
The proposed Reg S bonds have expected
9 BNP Paribas 93 9,199.18 2.9
10 Morgan Stanley 114 17,539.62 3.0
ratings of BBB+/A– (Fitch/Lianhe Global), on
10 Morgan Stanley 88 8,987.90 2.9
Total 1,090 581,738.12
par with the issuer.
Total 772 314,952.14 ZUCI looks after construction and
Excluding equity-related debt.
Excluding equity-related debt. maintenance of municipal roads and
Source: Refinitiv SDC code: L4 Source: Refinitiv SDC code: L1 infrastructure, resettlement housing

54 International Financing Review November 2 2019


developments, and the construction and
operation of public assets and community
facilities.
BEIJING CAPITAL PLANS PERP ISSUE
BEIJING CAPITAL GROUP, rated Baa3/BBB–/BBB,
has hired banks for a proposed offering of
US dollar subordinated perpetual securities
and will start to meet investors in Hong
Kong and Singapore on Monday.
China Citic Bank International, Haitong
International and HSBC are global
coordinators as well as lead managers and
bookrunners with Bank of Communications,
China Everbright Bank Hong Kong branch, China
International Capital Corp, CLSA, CMB
International, CMB Wing Lung Bank, Guotai
Junan International, ICBC International, Nomura,
Silk Road International and Standard Chartered.
The proposed Reg S securities will be
issued by Central Plaza Development and
guaranteed by International Financial
Center Property. The perp will have a
keepwell and liquidity support deed and a
deed of equity interest purchase
undertaking from Beijing Capital Group.
The perps have an expected BB+ rating
from Fitch.
Beijing Capital Group, which is 100%
owned by the Beijing municipal
government, is active in water and
environmental protection, infrastructure,
China property bond rush resumes
„ CHINA Rebound in prices triggers busiest day for new issues since July
Chinese property developers are rushing to sell
offshore bonds to take advantage of improving
market conditions and use up offshore debt
issuance quotas before the end of the year.
SUNAC CHINA HOLDINGS, CIFI HOLDINGS (GROUP)
and KAISA GROUP HOLDINGS raised a combined
US$1.25bn from US dollar bonds last Tuesday.
ZHENRO PROPERTIES GROUP continued the trend
on Wednesday with a US$300m issue, followed
a day later by CENTRAL CHINA REAL ESTATE, which
sold a US$200m bond.
An improvement in sentiment in October on
signs that US-China trade tensions are easing
has opened a window for developers that are
able to come to market quickly, said a DCM
banker from a European bank.
“Chinese US dollar high-yield property bonds
on average rebounded 1.5–2.0 points in cash
prices in October, following some weakness seen
in the past two to three months,” the banker said.
“Most of these developers are repeat issuers
that have issued bonds multiple times earlier this
year. Hence, for documentation, it only takes one
week or even a few days.”
Demand for Chinese high-yield property
bonds remains strong as investors seek yield in a
low-rate environment, and all of last week’s new
EMERGING MARKETS ASIA-PACIFIC
Chinese high-yield property bonds despite the
recent rally.
“Double B names are offering a 6% handle
while B+ names are offering a 7%–8% handle,
which are not easy to find in other sectors under
the current low-yield environment,” she said.
“Although China’s property sales showed
some signs of weakness, for those developers
that have issued dollar bonds, most of them
still reported growth in pre-sales in the past few
months.”
Moreover, supply risk from the sector has
reduced after the National Development and
Reform Commission imposed new rules on the
use of offshore bond proceeds in July, she added.
The NDRC said at the time that developers
could only use the funds from any new offshore
bond issues to refinance medium or long-term
offshore borrowings due to mature within a year.
The DCM banker from the European bank said
some developers were keen to use up the quotas
that they received before the new rule came into
force as these give them more flexibility on the
use of proceeds. Moreover, if they increase their
amount of offshore bonds it will make it easier
to apply for a new quota if the policy remains
unchanged, he said.
REALûESTATEûANDûlNANCIALûSERVICES
CHENGDU JIAOZI FINANCIAL PLANS
DEBUT
CHENGDU JIAOZI FINANCIAL HOLDING GROUP, rated
BBB+ by Fitch, has hired banks for a
proposed debut offering of US dollar senior
unsecured notes and met investors in Hong
Kong and Singapore last week.
Haitong International is sole global
coordinator as well as lead manager and
bookrunner with ICBC, CCB International,
China Citic Bank International, China Securities
International, CMB Wing Lung Bank, Haitong
Bank, Orient Securities (Hong Kong), Shanghai
Pudong Development Bank Hong Kong branch
issues attracted strong oversubscription.
Sunac’s US$650m issue was 6.8 times
covered, Zhenro’s US$300m bond was 5.3 times
subscribed, CCRE’s US$200m deal 4.75 times
covered and CIFI’s US$400m deal 2.4 times.
With such robust demand, developers can
now offer a thinner premium and print at longer
tenors than earlier in the year.
On average, they only need to give a new issue
premium of about 10bp–20bp compared with
25bp–30bp in July-August, the banker said.
ATTRACTIVE YIELDS
Judy Kwok-Cheung, director of fixed-income
research at Bank of Singapore, still sees value in
Some developers have already used up their
entire quota, such as Sunac and Ronshine China
Holdings, he said.
Sunac has raised US$3.4bn from five deals
this year while Ronshine visited the markets eight
times to raise a total of US$1.83bn.
The banker expects supply from China’s
property sector will remain strong next year
despite the new NDRC rules.
“Supply is unlikely to be as strong as this year,
but the sector will remain the main supplier
in the high-yield segment as there are a large
amount of outstanding offshore property bonds
maturing in the next two years,” he said.
Carol Chan
and Winsome.
The proposed Reg S notes have an
expected BBB+ rating from Fitch.
Jiaozi is wholly owned by the Chengdu
SASAC and serves as an investment holding
arm to consolidate the municipality’s
RElNANCINGûANDûGENERALûCORPORATEûPURPOSESû maturities of one month or longer. Dealers of
according to Fitch. the programme include ANZ, Barclays, BNP
Paribas, Bank of America, Citigroup, Credit Agricole,
Deutsche Bank, Goldman Sachs, HSBC, JP Morgan,
HONG KONG Mizuho Securities, Morgan Stanley, MUFG, Nomura,
Standard Chartered, UBS and Westpac.
lNANCIALûASSETSûACCORDINGûTOû&ITCHû4HEû
company is the largest shareholder of Bank
of Chengdu and Jintai Insurance, and the
second-largest shareholder of Chengdu
Rural Commercial Bank. It also established
the second licensed local asset-management
company in the province.
Proceeds from the proposed notes will be
MTR SETS UP US$5bn DEBT PROGRAMME
MTR has set up a US$5bn debt issuance
programme with HSBC as arranger,
according to a stock exchange statement.
MTR Corp (CI) Limited is the issuer under
the programme with the Hong Kong-based
mass transit operator as guarantor.
The programme is listed on the Stock
Exchange of Hong Kong.
Rating agencies have taken negative
actions on MTR recently due to months of
persistent unrest and protests in the city.
On September 10 Fitch cut MTR’s issuer
rating to AA from AA+ following the
downgrade of Hong Kong’s ratings on
USEDûFORûONSHOREûPROJECTûlNANCINGû The programme covers notes with September 6. The outlook is negative.

International Financing Review November 2 2019 55

 On September 17 Moody’s changed MTR’s
Aa2 rating outlook to negative from stable,
following the change in outlook on Hong
Kong’s Aa2 rating to negative from stable on
September 16.
30ûONû3EPTEMBERûûALSOûmAGGEDûTHATû
-42SûSTANDALONEûCREDITûPROlLEûMAYûWEAKENû
if recent protests continue to adversely
impact on passenger numbers and retail
sentiment in Hong Kong. S&P has a AA+
rating on the company with stable outlook.
INDIA
TATA EYES SINGAPORE DOLLARS
Indian conglomerate TATA INTERNATIONAL held
investor meetings in Singapore on October
31 ahead of a proposed Singapore dollar
bond offering.
HSBC is sole global coordinator. It is also
bookrunner with ANZ.
A Singapore dollar perpetual non-call
three Reg S securities offering may follow.
Wholly owned subsidiary Tata International
Singapore will issue the proposed bonds with
a guarantee from the parent company. TATA
SONS and other Tata Group companies own a
combined 99.87% stake in Tata International.
COURT RULING DEALS BHARTI BLOW
Investors in Indian telecommunications
operator BHARTI AIRTEL‘s US dollar perpetual
bonds are nursing a six-point paper loss
after an unexpected court ruling that may
lead to a downgrade.
Bharti (Ba1/BBB–/BBB–) said it would delay
the publication of its quarterly results until
November 14 while it assessed the impact of
a Supreme Court decision on October 24
that is expected to cost Indian telecoms
companies billions of dollars.
The telecoms operator on October 8 sold
US$750m subordinated perpetual non-call
5.5 securities at par to yield 5.65%, but the
notes dropped 3.7 points on October 24, after
THEûCOURTûREJECTEDûTHEûDElNITIONûTELECOMSû
companies use to calculate adjusted gross
revenue (AGR), on which the Department of
Telecommunications imposes their licence
fees and spectrum usage charges. The DoT
has demanded the telecoms industry pays a
total of US$19bn, according to Fitch.
On Wednesday, Fitch said that it had put
Bharti’s BBB– rating on review for a possible

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 1/11/2019

Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)
Oct 28 2019 Cable Onda US$600m Jan 30 2030 4.5 98.995 4.625 4.625

Oct 28 2019 Kexim SFr150m May 27 2025 0 100.739 MS+35 / Eidg+59 -0.134
Oct 29 2019 Braskem US$1.5bn Jan 31 2030 4.5 99.268 T+275 4.588

Oct 29 2019 Braskem US$750m Jan 31 2050 5.875 99.853 T+362.5 5.955

Oct 29 2019 PLN US$500m Feb 5 2030 3.375 99.775 T+156 3.4

Oct 29 2019 PLN US$500m Feb 5 2050 4.375 99.567 T+206.6 4.4

Oct 29 2019 PLN €500m Nov 5 2031 MS+175

Oct 29 2019 SMC Global Power US$500m Perpetual (May 2025) 5.95 100 T+429.6 5.95

Oct 29 2019 Kaisa Group US$200m incr Oct 22 2022 (Oct 22 2021) 11.95 100.79 - 11.625
(US$600m)
Oct 29 2019 Sunac China US$650m Feb 1 2024 7.5 99.058 - 7.75

Oct 29 2019 CIFI Holdings US$400m Nov 7 2024 (Nov 7 2022) 6.45 100 - 6.45

Oct 29 2019 Mamoura US$1bn Nov 7 2024 2.5 99.65 MS+95 2.575

Oct 29 2019 Mamoura US$1bn Nov 7 2029 2.875 98.918 MS+125 3.001

Oct 29 2019 Mamoura (Formosa) US$1.5bn Nov 7 2049 3.7 100 MS+175.4 3.7

Oct 30 2019 Zhenro Properties US$300m May 6 2023 9.15 100 - 9.15

Oct 30 2019 ADBC (Green) Rmb2.5bn Nov 6 2022 3.18 100 - 3.18

Oct 30 2019 ADBC (Green) Rmb3bn Nov 6 2024 3.4 100 - 3.4

Oct 30 2019 Empresa Electrica Cochrane US$430m May 14 2027 5.5 100 - 5.5
SpA
Oct 30 2019 Fosun International €400m May 6 2023 4.35 100 - 4.35

Oct 31 2019 Hutchison Port Holding Trust US$500m Nov 5 2024 2.875 99.64 T+137.5 2.953

Oct 31 2019 Central China Real Estate US$200m Nov 7 2023 (Nov 7 2021) 7.9 100 - 7.9

Oct 31 2019 Changde Economic US$100m incr Aug 15 2022 6.6 100.74 - 6.3
Construction (US$300m)

Oct 31 2019 Home Credit & Finance Bank US$300m Perp (7 Feb 2025) 8.8 100 - 8.8
Oct 31 2019 Cabei US$375m Nov 15 2024 3mL+85 100 - 3mL+86

56 International Financing Review November 2 2019

 EMERGING MARKETS ASIA-PACIFIC

downgrade following the ruling, which it
said would cost Bharti US$3bn in licence
fees and potentially US$2.9bn in unpaid
dues on spectrum usage charges. Interest
and penalties amount to about 75% of the
total.
Bharti’s perps were bid at a cash price of
94 on Thursday after the Fitch
announcement, implying a yield of 7%.
Telecoms companies argued that AGR
should comprise only revenue earned from
telecoms services, but the DoT said it should
include all revenue. The dispute dates back
to 2005, and many of the operators involved
have gone out of business since then, due to
intense competition in the sector – not least
from Reliance Jio Infocomm, which started
business in 2016 by offering aggressive
discounts.
Bharti had been due to table results for
the second quarter ended September 30 at
its board meeting last Tuesday, but said it
would seek further explanation of the
ruling from the DoT. The company
said that the court decision “may further
weaken the viability of the sector as a
whole”.
Fitch warned that incumbent operators
would be unlikely to participate in India’s
planned 5G spectrum auction, expected to
be held in the next 12-18 months, if they
had to disburse the unpaid dues in the short
term. It questioned whether the
government would provide any relief to
telecoms affected by the ruling.
Bharti’s share price has actually risen
since the court ruling, as investors assume
that smaller competitor Vodafone Idea,
which has no offshore bonds, will be most
affected, leaving Bharti and Jio to battle it
out for supremacy.
Last Wednesday, domestic rating agency
Care cut the issuer rating of Vodafone Idea
from A to A– and placed it under watch with
negative implications in light of the
Supreme Court’s decision.
INDONESIA
PLN MAKES RAPID OFFSHORE RETURN
PERUSAHAAN LISTRIK NEGARA on Tuesday printed
more than US$1.5bn-equivalent across two
currencies in its third G3 bond offering in
three months, paying no new issue
concession.

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

High 4%/5% area, - - Ba1/BBB- GS/JPM/BNPP/MS/Scotia -
4.75% area(+/-12.5)
- - - Aa2/AA UBS -
T+325 area, 0 US$11bn both tranches /BBB-/BBB- Citi/Itau/MS/Santander -
T+287.5 area(+/-
12.5)
T+400 area, 12.5 - /BBB-/BBB- Citi/Itau/MS/Santander -
T+375 area (+/-12.5)
3.70% area - US$1.8bn Baa2/BBB/BBB BofA/CS/Citi/HSBC/Mandiri/MUFG Asia 58%, EMEA 16%, US 26%. FM/AM
66%, Bks 10%, SWF/SSA 10%, Ins/PF
9%, PB/Other 5%.
4.75% area - US$2.7bn Baa2/BBB/BBB BofA/CS/Citi/HSBC/Mandiri/MUFG Asia 45%, EMEA 27%, US 28%. FM/AM
78%, Ins/PF 11%, Bks 6%, PB/Other 5%.
MS+185 area - - Baa2/BBB/BBB BofA/CS/Citi/HSBC/Mandiri/MUFG -
6.25% area - US$2bn Unrated CS/DB/BofA/JPM/DBS/UBS Asia 83%, Eur 17%. AM/FM 66%, PB
24%, Bank/FI 10%.
12% area - - B2/-/B CS/Kaisa/Barc -

8.25% area - US$4.4bn B1/B+/BB M S /C N C B I /C I S I /C S / D B /G u o t a i Asia 94%, EMEA 6%. FM 79%, Bks/FI
Junan/Nomura 9%, PB 12%.
6.75% area - US$950m -/BB-/BB CS/HSBC Asia 69%, Eur 31%. FM 74%, PB/UHNWI
25%, Bks 1%.
MS+120 area 10 >US$9.6bn Aa2/AA/AA Citi/DB/ 1ADB/HSBC/JPM/SMBC -
MS+105 (+/-5) Nikko
MS+145 area 15 >US$9.6bn Aa2/AA/AA Citi/DB/ 1ADB/HSBC/JPM/SMBC -
MS+130 (+/-5) Nikko
MS+205 area 5 >US$9.6bn Aa2/AA/AA Citi/DB/ 1ADB/HSBC/JPM/SMBC -
MS+185 (+/-5) Nikko
9.4% area - US$1.6bn B2/-/B+ DB/HSBC/BNPP/CCBI /GS/Haitong / Asia 73%, Eur 27%. FM/Bks 96%, PB 4%.
StCh/CMBI
3.45% area - - -/A+/- BoC/StCh/BoCom/ABCHK/CCB/ -
ICBCA/SPDB/CNCBI/Miz/KGI Sec/
CA-CIB/CTBC
3.70% area - - -/A+/- BoC/StCh/BoCom/ABCHK/CCB/ -
ICBCA/SPDB/CNCBI/Miz/KGI Sec/
CA-CIB/CTBC
High 5's/6% - - /Ba1/BBB- GS -

4.875% area, - €2.3bn Ba2/BB/- CS/DB/Fosun Hani/HSBC/Natx/ Cont Eur 47%, UK 24%, HK 21%, SG 6%,
4.5%/4.625% StCh/Uni Tw 2%. AM/Ins 82%, Bks/PB 18%.
T+160 area - US$1.1bn Baa1/A-/- BoC HK/BoCI/BofA/HSBC Asia 86%, Eur 14%. FM 58%, Bks 36%,
PB/Other 6%.
8.35% area - US$950m -/-/BB- BNPP/BofA/DBS/Haitong /MS/UBS Asia 82%, Eur 18%. FM/AM 70%, PB
23%, Bks/Ins 7%.
6.55% area - - Ba1/-/- SinolinkHK/Haitong /Guotai Junan/ -
CMBC Cap/Central/Orient/Industrial/
Dongxing
9.25%-9.50% area - >US$450m -/-/B- Alfa/BCS/JPM/RenCap/UBS/VTB -
3mL+105bp area -'- 3ml+85 Aa3/AA CA/StCh -

International Financing Review November 2 2019 57


Fosun brings China HY to Europe
„ HIGH-YIELD Conglomerate broadens investor base with competitively priced deal
FOSUN INTERNATIONAL last Wednesday became
the first Chinese high-yield issuer to sell euro
currency bonds in a public offering, showing that
there is a hungry investor base in Europe for the
right credits.
The Hong Kong-listed Chinese conglomerate
was targeting an issue size of at least €300m,
but ended up printing €400m (US$447m) of
3.5-year bonds and tightening strongly from
initial guidance.
The Reg S notes, to be issued through
subsidiary Fortune Star (BVI), with a guarantee
from Fosun, have expected ratings of Ba2/BB
(Moody’s/S&P).
Initial price thoughts started at the 4.875%
area, before guidance tightened to 4.500%–
4.625%. By the time the final yield of 4.35% was
announced, books were around €2.5bn.
Fosun overcame fears that it would need to
rely on Chinese demand, finding ample interest
from Europe. Chinese investors have a deep
enough pool of US dollars to support Reg S-only
dollar bond offerings and drive pricing, but have
far fewer holdings in euros.
While there was demand from some Chinese
offshore accounts, European real-money
investors were also active participants.
Final orders were over €2.3bn from more than
200 accounts, with investors from Continental
Europe taking 47%, the UK 24%, Hong Kong
21%, Singapore 6% and Taiwan 2%. Asset
managers and insurers booked a combined 82%,
and banks and private banks 18%.
Fosun was thought to have paid 60bp–70bp
over its dollar curve, but some Chinese state-
owned enterprises have paid 100bp more to print
in euros. It was expected that Fosun would find
euros slightly more expensive than dollar bonds,
but given the scale of its businesses in Europe it
made sense for it to start issuing in the currency.
Fosun has businesses covering finance,
leisure and health, with European investments,
A US$500m 3.375% 10.25-year tranche
was priced at 99.775 to yield 3.4%,
equivalent to Treasuries plus 156bp.
A US$500m 4.375% 30.25-year tranche
was priced at 99.567 to yield 4.4%,
equivalent to Treasuries plus 206.6bp.
Initial guidance for the respective
tranches was 3.70% area and 4.75% area.
A €500m (US$556m) capped 12-year
tranche was priced at mid-swaps plus 175bp,
inside initial price thoughts of mid-swaps
plus 185bp area.
The Indonesian state-owned power
distributor previously sold 10 and 30-year
dollar bonds in July, at 3.95% and 4.95%,
58
including France-headquartered package
holiday operator Club Med, English Premier
League club Wolverhampton Wanderers and a
stake in Portuguese bank BCP. In 2018 alone,
Fosun jointly acquired French health food
company St Hubert, and bought fashion brands
Lanvin from France and Wolford from Austria.
European investors naturally questioned
Fosun’s investment in collapsed British travel
agent Thomas Cook, which entered liquidation
in September. Fosun had been increasing its
stake and offered a rescue package before the
company failed.
However, the impact was minor in the context
of Fosun’s business. It held a 18.6% stake in
Thomas Cook, valued at about Rmb327m
(US$46m) at the time of the collapse.
Proceeds from the bond will be used to
refinance offshore debt and for working capital
and general corporate purposes.
Credit Suisse, Deutsche Bank, Fosun Hani,
HSBC, Natixis, Standard Chartered and UniCredit
were bookrunners and joint lead managers.
This is not the first time an Asian high-yield
issuer has accessed the euro market. Japan’s
SoftBank is the most regular visitor, but there
have been occasional prints from elsewhere in
the region.
Mianyang Investment Holding Group, which
builds infrastructure and develops land in Mianyang
city in southwest China, sold €100m 364-day notes
at 5% in September, but the offering was a club deal
and the issuer was not rated at the time. It obtained
a BB rating from Fitch the following month when it
visited the US dollar market.
In 2014, India’s Samvardhana Motherson
Automotive Systems Group, a maker of
components for vehicles, printed €500m seven-
year non-call three bonds, rated BB+ by S&P,
then returned to the euro market three years
later as a cross-over credit.
Daniel Stanton
respectively, but added a euro tranche this
time.
This emulated the Indonesian sovereign,
which a week earlier sold 30-year dollar
bonds at 3.75% alongside a 12-year euro
tranche priced at mid-swaps plus 130bp.
PLN’s July 2029 and July 2049 bonds were
seen at around 3.4% and 4.4%, respectively, in
secondary trading, meaning that the issuer paid
no premium for the extra six months maturity.
The respective spreads were about 50bp
and 85bp over the sovereign’s dollar bonds
of the same maturity.
PLN’s 10-year dollar bonds have paid a
30bp–35bp spread over the sovereign at
International Financing Review November 2 2019
their tightest this year, and 85bp–90bp at
their widest, according to Nomura’s sales
and trading desk. For the 30-year tenor, this
year’s lowest spread was 60bp–65bp and the
widest was 105bp–110bp.
The deal showed there remains solid
demand for PLN, even after its printing
US$1.4bn of dollar bonds and a ¥23.2bn
(US$215m) debut Samurai trade in
September.
Orders for the 10.25-year dollar tranche
were over US$1.8bn from more than 120
accounts. Asia took 58% of the 144A/Reg S
bonds, EMEA 16% and the US 26%.
By investor type, fund managers and asset
managers booked 66%, bank treasuries 10%,
sovereign wealth funds, sovereigns,
supranationals and agencies 10%, insurers
and pension funds 9% and private banks and
others 5%.
Books were over US$2.7bn for the 30.25-
year tranche from more than 150 accounts.
Asia took 45%, EMEA 27% and the US 28%.
Fund managers and asset managers
booked 78%, insurers and pension funds
11%, bank treasuries 6% and private banks
and others 5%.
EMEA investors took 63% of the euro
currency tranche, the US 27% and Asia 10%.
By investor type, fund managers and asset
managers booked 84%, corporates 5%, banks
4% and private banks and others 7%.
The senior unsecured bonds have
expected ratings of Baa2/BBB/BBB, in line
with the issuer.
Bank of America, Credit Suisse, Citigroup,
HSBC, Mandiri and MUFG were bookrunners.
Bahana, BNI and Danareksa were co-
managers.
Proceeds will be used for capital
expenditure in relation to electricity
infrastructure development projects, and
for general corporate purposes.
PRESSURE RISES ON GEO ENERGY
Indonesian coal producer GEO ENERGY
RESOURCES faces an increased chance of an
early redemption of its US$300m bonds due
2022 after a planned acquisition was
postponed.
Geo Energy in September announced
plans to acquire a 100% stake in Titan Global
Energy and effective 51% stakes in two
mines in South Sumatra from Titan and Jaya
Utama Indonesia for US$25m.
The two mines produced a combined 3.8
million tonnes in 2018 and have estimated
coal tonnage of 89 million tonnes, which
would have brought Geo Energy’s coal
reserves to around 122 million tonnes.
However, on Wednesday, Geo Energy
announced that the owners had postponed
the sale process and the transaction had
been put on hold.

Lucror Analytics warned that holders of
Geo Energy’s US dollar bonds can put their
bonds at par after 3.5 years, in April 2021,
unless at any time prior to that date the
issuer has at least 120 million tonnes of total
reserves with licences with at least eight
years to run, or on the put date it has 80
million tonnes of total reserves with
licences that expire no earlier than 2025.
“With only US$200m cash on hand, Geo
Energy will need to raise additional cash to
pay back the notes,” wrote Lucror. “With its
track record, it could be challenging to tap the
market to cover the shortfall, in our view.”
The bonds, rated B2/B–/B were bid at a
cash price of 71.5 on Friday, according to
Tradeweb.
S&P cut its rating by a notch to B– in July,
WARNINGûOFûRElNANCINGûRISKSûSINCEûTHEû
company had not invested in its coal
reserves. In April Fitch revised its outlook on
the rating to negative, and said Geo Energy
would not meet the minimum reserve
requirements unless it made an acquisition.
SOUTH KOREA
DOOSAN INFRACORE EYES KDB BACKING
South Korean construction equipment
manufacturer DOOSAN INFRACORE has hired
POSCO EYES 144A/REG S DEAL
South Korean steelmaker POSCO, rated Baa1/
BBB+, has hired banks for a proposed
offering of a short to intermediate US dollar-
denominated 144A/Reg S senior unsecured
bond in the near future.
Bank of America, BNP Paribas, Citigroup,
HSBC and Standard Chartered are the leads on
the proposed deal.
EUROPE/AFRICA
RUSSIA
HCFB SHUNS SIZE FOR PRICE TAG
#ONSUMERûlNANCEûLENDERûHOME CREDIT AND
FINANCE BANK left a larger trade on the table
on Thursday in order to aggressively
squeeze pricing.
The Russian bank sold a US$200m 8.80%
perpetual non-call 5.25-year AT1 bond. The
issuance fell US$100m short of what leads
said to expect, despite books at one point
passing US$650m.
“The reduction of the issue amount is a
strange decision in our view and will
EMERGING MARKETS EUROPE/AFRICA
The lead said he expects HCFB to
ultimately trade slightly wide of Tinkoff.
Demand for HCFB made the trade more
straightforward than recent Tier 2 issues
from Alfa-Bank and Sovcombank. The lead
said that opening with a yield above 9% had
helped grab investors’ attention.
“In a perverse way, AT1s are an easier
sell,” he said.
“If you look at the history in Russia, then
when banks get in trouble, they do so
spectacularly. All the capital gets written off.
You can argue therefore there shouldn’t be
much trading differential between AT1s and
Tier 2, but you are getting more yield.”
The deep liquidity of the rouble market
means that Russian lenders can match their
loan books with domestic liabilities.
But those looking to raise capital, while
keeping in mind the Russian regulator’s
push towards higher capital buffers, must
turn their sights to the US dollar market.
HCFB is a subsidiary of Home Credit
Group.
#ZECHûCONSUMERûlNANCEûCOMPANYû(OMEû
Credit has a large business in China, accounting
for about 64% of its €20.9bn outstanding loan
book, according to the prospectus for a planned
Hong Kong IPO. It had assets of more than
€23.6bn as of December 31.
The Czech Republic’s richest
businessman, Petr Kellner, is the majority
banks for a proposed offering of three-year SIGNIlCANTLYûLIMITûBONDûLIQUIDITYûINûFUTUREvû SHAREHOLDERûOFûlNANCIALûGROUPû00&ûWHICHûISû
US dollar senior unsecured notes with a wrote ING analysts. the indirect majority owner of Home Credit
guarantee from Korea Development Bank. A banker away from the deal wondered if Group.
HSBC, KDB and Societe Generale are global the initial messaging of US$300m was to Alfa-Bank, BCS Global Markets, JP Morgan,
coordinators and bookrunners on the Reg S suggest a CEMBI-eligible size and thus draw Renaissance Capital, UBS and VTB Capital were
issue. in more international interest. leads on HCFB’s trade.
$OOSANû)NFRACOREûWILLûHOLDûlXEDûINCOMEû “I guess not much came through and so
investor meetings in Asia and Europe, they decided to use Russian and/or private
starting on November 4. bank orders to just print the tightest trade SERBIA
Moody’s has assigned an Aa2 rating to the and downsize,” he said.
proposed notes. A lead said that London institutional SOVEREIGN GETS TASTE FOR EUROS
The proceeds will be used to repay debt buyers had been in the mix, alongside Swiss
and for other general corporate purposes, and Russian buyers. He said locals took SERBIA is back in the hunt for euro funding
according to Moody’s. around half of the allocations, with only a few months after it made its debut in
internationals picking up the rest. the currency.
ALL INTL EMERGING MARKETS BONDS Books at launch were more than The Balkan sovereign is contemplating a
BOOKRUNNERS: 1/1/2019 TO DATE US$450m, after HCFB concentrated all its deal to fund a buyback of its US$800m
Europe/Africa efforts on pricing. The yield was wrenched 4.875% February 2020s.
Managing No of Total Share in from an initial 9.25%-9.50% down to a “Whatever they buy back via the tender
bank or group issues US$(m) (%) landing point of 8.80%. has to be funded either by a new issue or a
“The decision was made by the issuer to tap of the existing bonds,” said a banker
1 Citigroup 40 11,837.73 15.2
focus on a smaller deal, and we went in and familiar with the matter.
2 JP Morgan 37 10,785.86 13.9
3 BNP Paribas 15 5,569.47 7.2
tightened quite aggressively,” said the lead. Serbia is offering to buy any-and-all of its
4 VTB Capital 15 4,841.84 6.2
“I thought we might get a bigger loss of the 2020 notes at a purchase price of 101.25.
5 Standard Chartered 14 4,213.09 5.4
book going through 9% but that didn’t The bonds are quoted on Tradeweb at
6 Gazprombank 8 4,095.65 5.3
happen.” 100.82/101.12. The tender offer expires on
7 Deutsche Bank 8 3,262.69 4.2 The nearest comparable was from online November 4.
8 SG 15 3,226.08 4.1 consumer lender Tinkoff, which has an AT1 Serbia (Ba3/BB/BB+) sold a €1bn 1.5% June
9 HSBC 10 2,871.77 3.7 callable in September 2022. Tinkoff’s note 2029 bond earlier this year, pricing the
10 Goldman Sachs 7 2,552.38 3.3 was offering a yield-to-call of 7.41%, notes just 35bp back of Croatia (Ba2/BBB-/
Total 87 77,752.64 according to Tradeweb. BBB-).
Excluding equity-related debt. HCFB’s bond carries an expected B- rating Although Fitch upgraded Serbia by one
Source: Refinitiv SDC code: L2 from Fitch, the same as Tinkoff’s note. notch in September, there remains a clear

International Financing Review November 2 2019 59

rating differential to Croatia that is
manifested in the sovereigns’ yields.
Serbia June 2029s are bid at 1.16%,
while Croatia’s June 2029s are quoted at
0.59%.
“People might also look at Romania from
a curve perspective when it comes to
2022 bond alongside a €600m 7.125% July
2024 note. REGIONAL
The euro note is yielding 6.02%, according
to Tradeweb, while the dollar bond is quoted PPF ARENA 1 BACK FOR MORE
at 6.85%.
Bankers at the time of pricing were PPF ARENA 1 is returning to the market for the
puzzled by the dollar tranche, which was second time this year, following up a €550m
PRICINGûBUTû3ERBIASûSûWILLûBEûTHEûlRSTû
port of call,” said the banker.
The dealer managers are BNP Paribas,
Citigroup, Deutsche Bank and JP Morgan.
UKRAINE
FRESH SUPPLY WAVE BREAKS
OVER PRIMARY
Investors are preparing for another wave of
Ukrainian supply, and issuers will be hoping
for cleaner results than those achieved by
their forebears in autumn.
Metinvest, Kernel and MHP have all
printed deals since September. Metinvest
and Kernel were both seen as a struggle and
MHP sold off badly after pricing. MHP’s
US$350m September 2029 bond is four
DENOMINATEDûlVE
YEARûGREENûBOND structure and a clearer policy on the debt
points down from reoffer.
State-owned gas company NAFTOGAZ has
nevertheless pushed on with plans for a
YEARûNON
CALLûlVEûSUB
structural subordination,” wrote Moody’s.
trade, signalling that it wants to place a
US$500m seven-year bullet bond as early as
Monday.
4HEûMATURITYûISûATûTHEûLONGERûENDûOFûAûlVEû
added as the roadshow was coming to a
close.
A lead said that the dollar bond was added
to mop up dollar demand, but sign off to
raise at most €900m-equivalent meant it was
not possible to do a benchmark trade in
both currencies.
Naftogaz’s deal comes while Russia and
Ukraine remain locked in talks over gas
transit for Europe, with one of the obstacles
to a new deal being litigation between
Gazprom and Naftogaz.
The talks will continue at the end of
November, just a month before the current
gas transit deal expires.
Citigroup is sole lead for Naftogaz.
There should be even further supply from
the corporate sector, as DTEK RENEWABLES
lNISHEDûMEETINGSûONû&RIDAYûFORûITSûPROPOSEDû
EURO
On the banking side, state-owned UKREXIM
has appointed JP Morgan and Morgan Stanley
FORûAûDOLLARû
benchmark Tier 2 offering.
A banker away from the Basel II trade
thinks there should be good appetite for the
bonds given that it will be an old-style note.
seven-year trade from March.
The CEE telecoms provider, which is the
holding company of O2 Czech Republic,
CETIN and Telenor CEE, is looking at a euro
BENCHMARKûWITHûAûMATURITYûOFûBETWEENûlVEû
and eight years.
Moody’s published a note on PPF Arena
1’s upcoming bond issue, which it said will
BEûUSEDûTOûPARTIALLYûRElNANCEûBANKûDEBT
4HEûlRMûHASûASSIGNEDûANûEXPECTEDû"Aû
rating to the notes, with a stable outlook.
Moody’s said that PPF Arena 1’s issues are
structurally subordinated to debt at its
operating companies as the parent relies on
dividends from them to service its debt.
“Because of PPF Arena 1’s complex group
structure, upward ratings pressure is
UNLIKELYûUNTILûTHEREûISûAûSIMPLIlCATIONûINûTHEû
debt allocation within the broader group
distribution between PPF Arena 1 and the
operating subsidiaries to minimise
PPF’s 3.125% 2026s are bid at 2.31%,
according to Tradeweb.
-EETINGSûlNISHEDûONû&RIDAY
00&û!RENAûûISûPARTûOFûTHEûlNANCIALûANDû
to seven-year range which it had explored “If the authorities were to try to introduce INVESTMENTûlRMû00&û'ROUPûWHICHûSAIDûONû
with investors during a roadshow last week Basel III at the moment, with capital Monday it has lined up a €1.15bn loan
on both sides of the Atlantic. requirements and so on, then it’s likely the lNANCINGûTOûBACKûITSûACQUISITIONûOFûMEDIAû
4HEûDEALûWASûmAGGEDûBYû)&2ûINû3EPTEMBERû banking system would just fail, so the whole and entertainment company Central
in the same month that Fitch upgraded the thing is under wraps until things improve,” European Media Enterprises (CME).
state-owned company by one notch to B, he said. The US$2.1bn acquisition will be funded
with a positive outlook. Ukrexim (Caa1/-/B) last appeared on the through a mix of equity and debt.
The upgrade followed a similar rating international scene in March 2018 to print CME operates television stations in
change on the sovereign, given Naftogaz’s hryvnia-denominated Eurobonds, selling a Bulgaria, the Czech Republic, Romania,
strong linkages with the state. US$150m-equivalent deal at 16.50%. Slovakia, and Slovenia.
Naftogaz was last in the dollar market in The issuer will be on the road on BNP Paribas, HSBC, Societe Generale and
July when it sold a US$335m 7.375% July November 4 and 5. UniCredit are global coordinators and
bookrunners.
ALL INTL EMERGING MARKETS BONDS INTERNATIONAL ISLAMIC FINANCE DEBT
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Middle East Managing No of Total Share
Managing No of Total Share bank or group issues US$(m) (%)
bank or group issues US$(m) (%)
1 Standard Chartered 21 2,980.47 13.9
MIDDLE EAST
1 HSBC 35 8,722.43 10.6 2 HSBC 15 2,045.55 9.6
2 Citigroup 19 8,043.56 9.8 3 Citigroup 10 1,703.59 8.0
3 Standard Chartered 35 8,024.04 9.8 4 First Abu Dhabi 14 1,465.83 6.9
QATAR
4 JP Morgan 15 7,047.15 8.6 5 Dubai Islamic Bank 13 1,459.85 6.8
5 BNP Paribas 12 5,803.05 7.1 MAR HOMES IN ON DEBUT
6 Kuwait Finance 7 1,356.65 6.3
6 Goldman Sachs 7 4,950.23 6.0 7 Emirates NBD 11 1,070.00 5.0
7 Deutsche Bank 14 4,675.54 5.7 Qatari Islamic bank MASRAF AL RAYAN is ready
8 JP Morgan 6 968.37 4.5
8 First Abu Dhabi 23 4,402.83 5.4 to step out on stage for its debut public debt
9 Gulf Int 4 685.71 3.2
9 Credit Agricole 10 3,941.38 4.8 SALEûHAVINGûAPPOINTEDûBANKSûFORûAûlVE
YEARû
10 Deutsche Bank 5 666.92 3.1
10 Nat'l Com SA 3 3,586.97 4.4 US dollar sukuk.
Total 26 21,372.69
Total 86 82,175.80 MAR is the second largest Islamic bank in
Excluding equity-related debt.
Excluding equity-related debt. Qatar by total assets and is rated A1 by
Source: Refinitiv SDC code: L5 Source: Refinitiv SDC code: J27 Moody’s.

60 International Financing Review November 2 2019

 EMERGING MARKETS AMERICAS

Qatar Islamic Bank, the country’s largest Argentina’s President-elect Alberto ALL INTL EMERGING MARKETS BONDS
Islamic lender, and Qatar National Bank, the &ERNANDEZûHASûNOTûYETûMADEûANYûOFlCIALû BOOKRUNNERS: 1/1/2019 TO DATE
largest bank in the Middle East and Africa, APPOINTMENTSûTOûHISûECONOMICûORûlNANCIALû Latin America
raised a combined US$1.75bn in bonds in cabinet, but investors are vigilant and Managing No of Total Share
the latter half of March. expect an announcement soon. bank or group issues US$(m) (%)
QIB (A1/A-/A) has a US$750m 3.982% March Fernandez won with around 48.1% of the 1 JP Morgan 45 12,583.42 13.3
2024 sukuk that is bid at 2.90% on Tradeweb. vote over incumbent Mauricio Macri, who 2 Citigroup 35 10,697.64 11.3
QNB (Aa3/A/A+) has a US$1bn March 2024 drew about 40.4%, in the country’s 3 BofA 30 8,971.33 9.5
conventional bond yielding 2.72%. presidential elections on October 27. 4 Goldman Sachs 20 6,053.04 6.4
Fixed income meetings for MAR began on More than US$100bn of Argentine debt 5 Santander 32 5,886.45 6.2
Thursday. hangs in the balance ahead of a probable 6 HSBC 23 5,576.79 5.9
Al Rayan Investment, Boubyan Bank, MUFG, restructuring. The country has around 7 Morgan Stanley 16 4,773.54 5.0
QNB Capital and Standard Chartered are lead US$44bn of loans with the International 8 Scotiabank 18 4,186.84 4.4
managers and bookrunners. Monetary Fund. 9 Itau Unibanco 17 3,063.25 3.2
)TûFACESûAROUNDû53BNûINûlNANCINGû 10 Banco Bradesco SA 17 2,698.15 2.8
needs for 2020 should the IMF decide against Total 119 94,832.86
disbursing funds from its loan agreement Excluding equity-related debt.

with the country. Source: Refinitiv SDC code: L3

AMERICAS “All three groups are going to need to

work together to give the country some This will be the company’s debut in the
breathing room. No one leg is going to have dollar market. The company specializes in
ARGENTINA to take the brunt of it,” said the investor, digital banking.
referring to the country’s local law debt,
FULLY ORGANIZED CREDITOR COMMITTEE EXTERNALûDEBTûANDûTHEûOFlCIALûSECTORûNAMELYû ANDRADE GUTIERREZ PREPS BOND
EXPECTED THIS MONTH the IMF. FOR TENDER

Investors in Argentina’s sovereign and Brazilian conglomerate ANDRADE GUTIERREZ is

Province of Buenos Aires debt expect to be
fully organized into two separate creditor
COMMITTEESûSOMETIMEûWITHINûTHEûlRSTûTWOû
weeks of November, an investor told IFR.
The two committees are expected to
comprise investors holding more than 25%
of the debt, the source involved in the
process said.
Organization of the committee has
progressed beyond the early stages as a
critical mass of investors interested in
participating have come together.
4HEYûAREûALSOûRETAININGûPROFESSIONALûlNANCIALû
and legal advisers, according to the investor.
BRAZIL
BANCO ORIGINAL MANDATES BANKS
AHEAD OF NEW BOND
Brazilian bank BANCO ORIGINAL has mandated
ahead of a new dollar deal.
BCP Securities, Santander, and XP Investments
began meeting with investors on October
30. The new note is expected to price this
week.
The senior unsecured 144A/Reg S note
will have short to intermediate maturity
and is rated B/B+ by S&P and Fitch.
prepping a new dollar note together with an
any and all tender offer for its 11% 2021
bonds.
The transaction is being arranged by BB
Securities, Banco Bradesco BBI, and HSBC
securities.
Andrade Gutierrez is offering a buyback
price of 100.25 for the notes.
Leads started meeting with investors on
October 29 and will wrap up on November
6. The bond is being offered in a 144A/Reg S
private placement format.
Proceeds of the transaction will go
towards funding the tender.

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International Financing Review November 2 2019 61

Clarity, increased.
For over 40 years, IFR has been clarifying the complex global
capital markets by providing intelligence on current deals and new
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 LOANS
Australia 64 China 64 India 65 Indonesia 65 Malaysia 66 Vietnam 66 Czech Republic 67 France 67
Germany 67 Saudi Arabia 68 Turkey 68 UK 68 United States 70 Leveraged Loans 70 Restructuring 77

„ FRONT STORY US PRIVATE DEBT MARKET

Private debt faces up to challenges

Attendees at SuperReturn conference highlight concerns
Absence of a pricing benchmark is a major worry for participants
Investors and fund managers that attended “A good benchmark for most managers is SHORT AND SHALLOW
the SuperReturn Private Credit event in an absolute return of 7% to 9% net, others How private credit managers are gearing up
Chicago on October 21 and 22 are optimistic
that the private debt market will continue to
grow, but questions remain how
performance is measured in an asset class
that is deeply opaque and lacks direction.
The absence of a pricing benchmark is a
key concern, said participants at the
conference. While there is agreement that
the spread premium for middle market
loans is 250bp over leveraged loans, this
STANDARDISATIONûDOESNTûACCURATELYûREmECTûTHEû
risk in other strategies also labelled as
private debt.
Private debt managers operate within
specialised niches and beyond the traditional
middle market loan. Some prioritise lending
to private equity borrowers, while others
prefer non-sponsored deals. Lenders split
themselves among the upper middle
market, core middle market and lower
market, and others have moved into
SPECIALTYûlNANCE
ûNETûBUTûITSûDIFlCULTûFORûASSETûALLOCATIONû FORûAûPOTENTIALûSLOWDOWNûOFûTHEû53ûECONOMYû
If you want broader acceptance you need to was another recurrent topic at the
have something that benchmarks all models SuperReturn conference.
and it’s not 8%,” she said. Private credit managers have for years
stated they are building a portfolio to protect
MORE RUNWAY themselves against a downturn, avoiding
$ESPITEûPRIVATEûCREDITûlRMSûHOLDINGûRECORDû non-cyclical industries such as retail or oil
amount of dry powder, investors and lenders and gas.
alike remain bullish about the market’s
future growth, citing development of private
equity fundraising activities as a source of “We are long in a business cycle
increasing opportunities for lenders. and concerned about when the
With bigger funds being raised some of music is going to stop”
the top lenders, such as Ares Management,
Antares Capital and Golub Capital, are
lNDINGûOPPORTUNITIESûATûTHEûHIGHERûENDûOFû
the market and syndicating loans
themselves. While other lenders want to
maintain a sole focus on the core middle
MARKETûORûlNDûOPPORTUNITIESûATûTHEûLOWERû
end. In the last few months, the prospect of a
Direct lenders playing at the top end are recession has become more acute, but a
!SûSUCHûTHEûRETURNûPROlLESûCANûVARYû steadily disintermediating the banks in the sentiment has shifted noticeably from a deep
widely, which raises an issue for investors syndicated market and providing more downturn to what one manager feels will be
that continue to allocate to funds investing opportunities to deploy capital away from a “short and shallow”, participants at the
INûTHEûASSETûCLASSûBUTûAREûUNSUREûWHEREûITûlTSû the competitive middle market, said Taylor SuperReturn conference said.
into their portfolio.
“A good benchmark for most
managers is an absolute return
of 7% to 9% net, others 12%
"OSWELLûCHIEFûINVESTMENTûOFlCERûATû#ARLYLEû
Direct Lending, on a panel.
“As the industry gains scale, private credit
lRMSûAREûTAKINGûAûLOTûOFûSHAREûFROMûTHEû
broadly syndicated leverage market. The
trend has a got a long way to run,” he said.
“It’s a signal that the market is fragmented,
/THERSûSAIDûTHEYûEXPECTûAûhSOFTûLANDINGvû
ANDûTHATûANYûEXPECTEDûVOLATILITYûWILLûBEûAKINû
to the ripples through the energy markets in
ûANDûûRATHERûTHANûTHEûlNANCIALû
crisis a decade ago.
Investors in private credit funds echoed
similar points at the SuperReturn
net, but it’s difficult for asset
allocation”
Some private debt returns are closer to
private equity double-digit returns, others
AREûSLIGHTLYûHIGHERûTHANûSINGLE
DIGITûlXED
phase of providing different types of debt to
not saturated.”
0RIVATEûCREDITûlRMSûFORûTHEûLASTûFEWûYEARSû
have sought to diversify their offering to stay
ahead in a competitive market. Now scale is
becoming a more important factor.
Randy Schwimmer, head of origination at
Churchill Asset Management, said on a panel
that we’ve moved beyond this “cargo pants”
more attractive than broadly syndicated
CONFERENCEûEXPLAININGûWHYûTHEYûCONTINUEû
to make big bets on private credit
more than ten years after the last
downturn.
“We are long in a business cycle and
concerned about when the music is going to
stop. But we’re focused on the middle
market segment where the risk return is
income investments, which makes it hard a bifurcated market of “haves and have LOANSvûSAIDû2OBERTû(ETUûHEADûOFû53ûPRIVATEû
FORûPENSIONûFUNDSûANDûINSURANCEûlRMSûTOû nots”. debt at Caisse de depot et placement du
classify their investments.
“Let’s use a common language,” said Mary
Bates, senior vice president at Meketa
Investment Group, at a panel at the
SuperReturn Private Credit conference.
h)NûTHISûMARKETûûlRMSûCANûDOû53Mû
PLUSû4HEûNEXTûBENCHMARKûWILLûBEû53Mû
holds and you’re not going to be in the
game if you can’t do that,” Schwimmer
said.
Quebec, speaking at a conference panel.
“And we avoid deploying capital in broadly
syndicated loans when there is market
volatility.”
David Brooke

International Financing Review November 2 2019 63

 %XISTINGûLENDERSûTOûTHEû!BNû!PRILûû ONEûOFûITSûSHAREHOLDERSûSAIDûINûTHEûSAMEûlLINGû
loan were offered top-level fees of 20bp, that the acquisition would allow it to
ASIA-PACIFIC 30bp and 50bp, respectively, on the three strengthen its e-commerce and retail strategies,
TRANCHESûWHILEûEXISTINGûLENDERSûTOûTHEû as well as enhance its competitiveness.
!Mû.OVEMBERûûLOANûWEREûOFFEREDû Carrefour China operates a network of
AUSTRALIA 30bp, 40bp and 60bp, respectively. 210 hypermarkets and 24 convenience
New or incremental lenders received top- stores. In 2018, it generated net sales of
LENDERS FLOCK TO WOOLWORTHS level fees of 45bp, 55bp and 75bp, 2MBBNû53BN ûANDû%BITDAûOFû
respectively, for the three tranches. Rmb516m.
Supermarket chain WOOLWORTHS has closed a
!BNû53BN ûMULTI
TRANCHEûFACILITYûTOû MELBOURNE MALL MARKETS LOAN GREENTOWN TAPS US$500m CLUB
an overwhelming response following
commitments from 44 lenders in general THE DISTRICT DOCKLANDS, a shopping centre on Property developer GREENTOWN CHINA HOLDINGS
syndication. the fringes of the central business district of has approached relationship banks for a
The majority of the lenders were from
THREE
YEARûCLUBûLOANûOFûABOUTû53M
Asia and commitments were scaled back
SIGNIlCANTLY
HSBC, National Australia Bank and Westpac
were the mandated lead arrangers and
bookrunners of the deal, which now
COMPRISESûAû!MûFOUR
YEARûREVOLVERû Banks joining as MLAs with commitments
-ELBOURNEûISûRAISINGû!MûFROMûAûlVE
year loan. HSBC is the coordinator of the deal, which
DBS Bank is the mandated lead arranger is likely to offer an interest margin of 248bp
and bookrunner of the transaction, which over Libor.
pays an interest margin of 200bp margin 0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû
over BBSY. general corporate purposes.
State-owned China Communications
TRANCHEû!ûAû!MûlVE
YEARûREVOLVERû OFû!MûORûABOVEûEARNûAûPARTICIPATIONûFEEûOFû Construction Group, which owns
TRANCHEû"ûANDûAû!MûSEVEN
YEARûTERMû BPûWHILEûLEADûARRANGERSûTAKINGû!Mn APPROXIMATELYûûOFû'REENTOWNûISû
tranche C. MûEARNûFEESûOFûBPû!RRANGERSûCOMINGûINû providing a letter of comfort.
!ûSIX
YEARûPORTIONûOFûTRANCHEû#ûHASûBEENû FORû!MnMûWILLûRECEIVEûBP Greentown’s previous loan market visit was
scrapped. Lenders joining before November 22 will INû*ULYûLASTûYEARûWHENûITûSIGNEDûAû53M

Mandated lead arrangers are ICBC, Bank of receive an early-bird fee of 10bp. equivalent three-year loan with 18 lenders.
China, Bank of China Singapore branch, Mizuho
Bank, Rabobank, Bank of Communications, China
Construction Bank, China Everbright Bank and
ANZ. Lead arrangers are Agricultural Bank of
China, MUFG, SMBC, Hua Nan Commercial Bank,
E Sun Commercial Bank, Mega International
EQUIVALENTûTARGET
Commercial Bank and Norinchukin.
LISTEDû'REENTOWNûISûONEûOFû
Co-arrangers are DBS Bank, Citigroup, China
Merchants Bank and Tai Fung Bank. Senior lead
arrangers are Shinsei Bank, BNP Paribas, Credit
Industriel et Commercial, Goldman Sachs, Chang
Hwa Commercial Bank, Chugoku Bank, Taipei
Fubon Commercial Bank, Taiwan Cooperative
Bank, Metrics Credit Partners, Nishi-Nippon City
Bank, Bank Sinopac, Taishin International Bank
and Bank of Taiwan.
Lead managers are Taiwan Business Bank,
Commonwealth Bank of Australia, Shin Kong
The borrowing represents a loan-to-value
ratio of about 50%.
0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû
CAPITALûEXPENDITUREûFORûASSETûENHANCEMENT
!USTRALIANûREALûESTATEûINVESTMENTûlRMû!SHEû
Morgan and Singapore-based private equity
fund SC Capital Partners own the property.
CHINA
FIVE JOIN CARREFOUR CHINA
&IVEûBANKSûHAVEûJOINEDûTHEû53MûTHREE
year loan backing Chinese retail giant
Suning.com’s acquisition of a controlling
stake in French retailer Carrefour’s China
business.
4HATûLOANûAVAILABLEûINû53ûORû(ONGû+ONGû
dollars, offered a top-level all-in pricing of
312bp, based on an interest margin of
256.5bp over Hibor/Libor and an average life
of 2.7 years. It was increased from an
ORIGINALû53M
(ONGû+ONG
China’s major property developers, with a
PRIMARYûFOCUSûINû(ANGZHOUûCITYûANDû
Zhejiang province.
HONG KONG
LANGHAM NETS DEBUT SLL
LANGHAM HOSPITALITY INVESTMENTS, a spin-off of
(ONGû+ONGûDEVELOPERû'REATû%AGLEû(OLDINGSû
Commercial Bank, Shinhan Bank, Sumitomo
Mitsui Trust Bank, First Commercial Bank, Land
Bank of Taiwan, Shanghai Commercial & Savings
Bank and Taichung Commercial Bank. Managers
are Bank of Kaohsiung, Eastspring Investments
Several other banks are processing credit
APPROVALSû3YNDICATIONûISûEXPECTEDûTOûCLOSEû
in early November.
Standard Chartered is the sole mandated
lead arranger, bookrunner and underwriter
HOTELûASSETSûISûLOOKINGûTOûRAISEû(+BNû
ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY
SYNDICATED VOLUME (INCLUDING JAPAN)
BOOKRUNNERS: 1/1/2019 TO DATE
(Singapore) and The 77 Bank. OFûTHEûlNANCINGûWHICHûOFFERSûAûTOP
LEVELû Managing No of Total Share
0ROCEEDSûRElNANCEûTHEûOUTSTANDINGû all-in pricing of 175bp based on an interest bank or group issues US$(m) (%)
portion of two separate multi-tranche margin of 145bp over Libor and an average 1 Mizuho 420 84,760.25 18.3
SYNDICATEDûLOANSûOFû!BNûANDû!Mû life of 2.75 years. 2 MUFG 630 56,295.54 12.2
completed in April and November 2016, Suning.com is providing a guarantee to 3 Sumitomo Mitsui 488 52,619.87 11.4
respectively. the loan, while wholly owned subsidiary 4 Bank of China 177 31,723.69 6.9
The interest on the new facility is based SUNING INTERNATIONAL GROUP is the borrower. 5 Bank of Comms 73 15,079.51 3.3
on the BBSY reference rate and tied to a On September 27, Suning.com announced 6 HSBC 74 12,796.25 2.8
ratings grid. Based on the current S&P rating INûAûlLINGûTOûTHEû3HENZHENû3TOCKû%XCHANGEû 7 Standard Chartered 80 12,622.94 2.7
of BBB for Woolworths, the loan pays that Suning International Group had 8 ANZ 62 11,484.43 2.5
margins of 105bp, 115bp and 140bp for completed the acquisition of 80% of 9 China Construction 27 9,874.09 2.1
tranches A, B and C, respectively. Carrefour’s Chinese operations for €620m 10 Ag Bank of China 26 8,771.28 1.9
Moody’s rates Woolworths at Baa2. 53M ûINûCASH Total 2,387 462,393.50
The commitment fee will be 40% of the Suning.com, which counts Chinese Proportional credit
applicable margin for each tranche. e-commerce giant Alibaba Group Holding as Source: Refinitiv SDC code: S3a

64 International Financing Review November 2 2019

 LOANS ASIA-PACIFIC

53M ûINûITSûlRSTûSUSTAINABILITY LINKEDû

LOANû3,, 
HSBC is the coordinator of the four-year
facility, which offers an all-in pricing below
Sime Darby Plantations
100bp.
The initial interest margin is 83bp over issues RFP for refi
Hibor, which will reduce by 1bp for each of
three sustainability key performance „ MALAYSIA Borrower eyes new financing amid negative rating outlook
INDICATORSûTHEûBORROWERûFULlLSûINCLUDINGû
ENERGYûCONSUMPTIONûWASTEûSENTûTOûLANDlLLSû
and EarthCheck achievement level.
The interest margin will step up by 8bp if
THEûBORROWERSû%BITDAûTOûlNANCIALûCHARGEû
ratio falls below 2 times.
,(),SûTHREEûPORTFOLIOûHOTELSûINû(ONGû+ONGû
SIME DARBY PLANTATIONS has sent a request for
proposals for a refinancing, shortly after Moody’s
revised the credit outlook of the borrower to
negative.
The company, which is the plantation and
agribusiness arm of Malaysian conglomerate
2022, according to Refinitiv LPC data. The facility
is part of a larger US$830m financing closed in
February 2015. HSBC, OCBC, Mizuho Bank and
MUFG were the lenders of the club.
The company also has an outstanding
M$2.2bn (US$526.5m) Islamic perpetual non-
nû4HEû,ANGHAMû#ORDISûANDû%ATONûnûWILLû
serve as security for the loan.
0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûAû
(+BNûLOANûMATURINGûINû-ARCHûNEXTûYEAR
That four-year facility which closed in
March 2016 had offered a top-level all-in
pricing of less than 120bp based on a margin
of 98bp over Libor. Citigroup and HSBC were
the mandated lead arrangers, bookrunners
and underwriters of that transaction, which
attracted 15 other lenders.
INDIA
OIL ENDS THREE-YEAR HIATUS
State-owned OIL INDIA has sent a request for
PROPOSALSûFORûAû53MûlVE
YEARûLOANûAFTERû said Maisam Hasnain, analyst at Moody’s. “This
a three-year hiatus from the offshore loan
markets.
The deal carries a greenshoe option of up
TOû53M
4HEûBORROWERûLASTûRAISEDûAû53MûONE
US$1.5bn of debt outstanding, including a
YEARûBRIDGEûLOANûINû!UGUSTûûTOûlNANCEûITSû
purchase of a stake in two Russian oil and gas
Sime Darby, did not specify a size or tenor for the
financing, which is likely to close as a club.
The deadline for proposals was Wednesday.
On October 9, Moody’s affirmed Sime Darby
Plantations’ Baa1 issuer ratings, but revised the
outlook to negative from stable owing to its weak
credit metrics.
Following Sime Darby Plantations’ weak
operating results to end June, the company’s
adjusted debt-to-Ebitda increased to around 5
times as of June 30 from around 4 times as of
March 31, Moody’s said.
“While the soft second quarter 2019 results
were primarily driven by weaker palm oil prices,
the lower earnings and increase in debt mean
that despite its planned M$1bn debt reduction,
Sime Darby Plantations’ adjusted leverage will
only decline to around 4x by the end of 2019,”
closed as a club and was equally split between
level of leverage exceeds our previous estimate
of 3.3x and will continue to exceed the 3.5x
downward rating trigger for its Baa1 ratings.”
Sime Darby Plantations has more than
healthcare, insurance and retail sectors.
US$500m seven-year term loan due in February
call 10 bond, which it raised in 2016. Maybank
was the sole lead manager of the notes, which is
part of a M$3bn Islamic perpetual programme.
The borrower’s scheduled debt maturities include
US$750m in term loans with a bullet maturity in
June 2020, according to the rating agency.
Despite mounting debt concerns, Moody’s
expects Sime Darby Plantations to proactively
refinance these maturities in the coming months.
“Sime Darby Plantations’ refinancing risk is
partially offset by its strong access to funding
from domestic and international banks,
particularly due to its government of Malaysia-
linked shareholders – Permodalan Nasional and
Employees Provident Fund of Malaysia,” the
rating agency said.
The borrower last raised a US$430m six-
month bridge loan in May 2017. The financing
OCBC and Standard Chartered, according to
Refinitiv LPC data.
Listed on Bursa Malaysia, Sime Darby has core
businesses in the industrial, motors, logistics,
Chien Mi Wong
lELDSû$"3û"ANKû-IZUHOû-5&'ûANDû5NITEDû
Overseas Bank were the lenders of the deal. 53M ûlVE
YEARûTERMûLOANûWHICHû Bank of Taiwan, First Commercial Bank, Hua Nan
FOUR JOIN HDFC LOAN
Mortgage lender HOUSING DEVELOPMENT FINANCE
CORPûHASûCLOSEDûITSû53MûTHREE
YEARûTERMû
loan, which attracted four other lenders in
general syndication.
First Abu Dhabi Bank, Korea Development
Bank, Standard Chartered and Sumitomo Mitsui
Trust Bank were the mandated lead arrangers
and bookrunners. Bank of China had joined as
YEARû 4HATûLOANûCOMPRISESûAû53BNûlVE
YEARû
an MLA before the launch.
Lead arranger is Norinchukin Bank.
Arrangers are Bank of Taiwan, Hua Nan
Commercial Bank and Hokkoku Bank.
YEARûREVOLVINGûCREDITûFACILITYû
The transaction paid a top-level all-in
pricing of 106.1bp based on an interest
margin of 85bp over Libor and an average
life of 2.61 years assuming transfers take
place this month.
The borrowing is HDFC’s second offshore
loan this year. In April, it raised a ¥53.2bn
offered a top-level all-in pricing of 78bp
based on an interest margin of 63bp over
yen Libor and a remaining life of 4.75 years.
OFFSHORE ûORûBPûONSHORE ûOVERû,IBORûANDû
INDONESIA
PLN US$1bn LOAN ATTRACTS EIGHT
State-owned electric utility PERUSAHAAN
LISTRIK NEGARAûHASûCLOSEDûAû53BNûlVE
term loan following commitments from
eight lenders in general syndication.
Bank of China, Cathay United Bank, DBS Bank,
Korea Development Bank, MUFG, OCBC Bank,
SMBC and United Overseas Bank were the
mandated lead arrangers and bookrunners
of the facility.
Mandated lead arrangers are China
Development Bank and China Construction Bank.
Lead arranger is Norinchukin Bank, while Chang
Hwa Bank is an arranger. Lead managers are
Commercial Bank and Musashino Bank.
The transaction paid a top-level all-in
PRICINGûOFûBPûOFFSHORE ûORûBPû
ONSHORE ûBASEDûONûINTERESTûMARGINSûOFûBPû
an average life of 4.1 years.
The borrowing follows PLN’s debut foreign-
currency loan last year, which was increased
TOû53BNûFROMûAû53BNûTARGETûAFTERû
attracting 13 banks in general syndication.
amortising term loan Tranche A, which
offered a top-level all-in pricing of 107.87bp
OFFSHORE ûORûBPûONSHORE û4HEû
53MûTHREE
4RANCHEû"ûPAYSûBPûOFFSHORE ûORûBPû
ONSHORE ûANDûHASûANûAVERAGEûLIFEûOFûûYEARS
ADIRA RETURNS WITH NEW-MONEY LOAN
ADIRA DINAMIKA MULTI FINANCE has launched a
53MûTHREE
YEARûAMORTISINGûFACILITYû

International Financing Review November 2 2019 65

RETURNINGûTOûTHEûLOANûMARKETSûSIXûMONTHSû
after its last visit.
ANZ, DBS Bank, Maybank, MUFG and United
Overseas Bank are the mandated lead
arrangers and bookrunners of the new
transaction, which pays the same pricing as
its previous loan from April.
The new-money deal offers an interest
margin of 90bp over Libor and has an
average life of 1.625 years.
Lead arrangers receive a top-level all-in
pricing of 106bp for commitments of
53MûORûMOREûVIAûAûPARTICIPATIONûFEEû
of 26bp, while arrangers earn an all-in
OFûBPûFORû53MnMûVIAûAûFEEû
of 21bp.
Funds are for general corporate purposes.
The borrower’s previous loan was an
INCREASEDû53MûTHREE
JAPAN
SEKISUI HOUSE REIT RENEWS
SEKISUI HOUSE REITûSIGNEDûAûcBNû53M û
one-year commitment line on Wednesday to
RENEWûANûEXISTINGûFACILITY
MUFG was the arranger and agent and
took ¥5.5bn, while Mizuho Bank and SMBC
committed ¥5bn and ¥4.5bn.
Funds are for real estate acquisitions and
RElNANCINGûPURPOSES
The borrower, which invests in residential
and commercial buildings mainly in the
Tokyo, Osaka and Nagoya areas, increased
the annual facility to ¥15bn from ¥10bn last
October.
underwriters of the borrowing, which at signing
COMPRISEDûAû53MûTERMûLOANûANDûAû
53MûDEBTûSERVICEûLETTERûOFûCREDITûFACILITY
Standard Chartered Bank and SMBC had
joined as MLABs prior to launch into general
syndication.
Mandated lead arranger is China
Construction Bank. Lead arrangers are China
Minsheng Banking Corp and First Abu Dhabi
Bank. Arrangers are State Bank of India, BDO
Unibank, KGI Bank, Yuanta Commercial Bank
and Bank SinoPac. Co-arrangers are Woori
Bank, Taipei Fubon Commercial Bank, CTBC Bank,
Taiwan Shin Kong Commercial Bank and Taishin
International Bank.
The term loan pays an interest margin of
150bp over Libor and has a remaining life of
2.1 years, while the LC facility offers a
YEARûlNANCINGû margin of 100bp, if undrawn, or 200bp, if
which attracted 20 lenders in general drawn, and has a remaining life of 4.75
syndication. BNP Paribas, DBS, Maybank, MALAYSIA years.
-5&'ûANDû5/"ûWEREûTHEû-,!"SûOFûTHEûLOANû
which offered a top-level all-in pricing of
106bp based on a margin of 90bp over Libor
and an average life of 1.625 years.
The Jakarta-based company, a unit of Bank
Danamon Indonesia, provides consumer
WASCO ENERGY EYES US$100m DEAL
Engineering, procurement and construction
company WASCO ENERGY is seeking an up to
53MûDUAL
The top-level all-in pricing for lenders
participating only in the term loan tranche
is 181bp, based on a 65bp fee.
MONG DUONG FINANCE HOLDINGS is the
borrower.
TRANCHEûlNANCINGûINCLUDINGû Signing of the loan with the original
lNANCINGûANDûlNANCEûLEASINGûSERVICESûFORû 53MûINûSHARIA
COMPLIANTûFACILITIES lenders took place on July 18. A repayment
cars, motorcycles, durable goods and other CIMB is the mandated lead arranger, OFû53MûONûTHEû53MûTERMûLOANû
products. bookrunner and coordinator of the deal, will take place on November 7.
WHICHûCOMPRISESûAû53MûTERMûLOANûANDûAû On July 25, Mong Duong Finance priced a
ASTRA SEDAYA TARGETS JAPANESE 53MûREVOLVINGûCREDITûFACILITYû4HEûBANKûISû 53Mû
YEARûSENIORûSECUREDûBONDû
LIQUIDITY also the facility and security agent. WITHûAûûCOUPONû2ATEDû"""AAû&ITCH
Both the term loan and revolver carry -OODYS ûTHEûBONDûAMORTISESûFROMûTHEû
ASTRA SEDAYA FINANCE has launched a commodity murabaha components. fourth year for a weighted average life of 6.9
53MûTHREE
YEARûLOANûTARGETINGû*APANESEû 4HEûTERMûLOANûCOMPRISESûAû53MûTHREE
years. Citigroup and HSBC were the joint
lenders and returning to the international YEARûPIECEûWITHûAû
MONTHûEXTENSIONû global coordinators, as well as joint
loan markets within three months of option, while the revolver includes a bookrunners with SMBC Nikko and StanChart.
CLOSINGûAûCLUBûlNANCING 53MûPORTIONûOFûUPûTOûlVEûYEARS Proceeds from the bond and loan will
Mizuho Bank, MUFG and SMBC are the The remaining amounts on the term loan RElNANCEû-$0SûPROJECTûLOANûOFûABOUTû
mandated lead arrangers and bookrunners and the revolver are conventional loans. 53BNûFROMûTHEûEXISTINGûLENDERS
of the amortising deal, which pays an 4HEûPROlTûRATEûFORûTHEû)SLAMICûlNANCEû !%3
6#-û-ONGû$UONGû0OWERûOWNSûANDû
INTERESTûMARGINûOFûBPûOFFSHORE ûANDûBPû portions and the interest margin for the operates MD2, which has a total capacity of
ONSHORE ûOVERû,IBOR conventional tranches is 225bp over Libor. 1,120MW and is located about 220km east of
Lead arrangers receive a top-level all-in The borrower is required to pay 25bp for the Hanoi. The project is ultimately owned by
PRICINGûOFûBPûOFFSHORE ûANDûBPû
ONSHORE ûFORûCOMMITMENTSûOFû53MûORû
more via a participation fee of 40bp, while
ARRANGERSûEARNûANûALL
INûOFûBPûOFFSHORE û purposes.
ANDûBPûONSHORE ûFORûTICKETSûOFû53Mn
MûVIAûAûFEEûOFûBP
The deadline for commitments is
November 22. A roadshow was held in
Tokyo on Wednesday.
The borrower’s previous loan was a
53MûTHREE
YEARûCLUBûDEALûINû*ULYû VIETNAM
ANZ, Bank of China, BNP Paribas, Citigroup,
revolver’s unutilised principal portion. !%3û û0/3#/û%NERGYû ûANDû#HINAû
Proceeds from the borrowing will be used )NVESTMENTû#ORPû ûANDûHASûBEENûINû
FORûRElNANCINGûANDûWORKINGûCAPITALû operation since 2015.
Malaysia-headquartered Wasco is a wholly
owned subsidiary of listed entity Wah Seong
and serves the global oil and gas industries
worldwide. EUROPE/MIDDLE
EAST/AFRICA
BELGIUM
$"3û"ANKû(3"#û+OREAû$EVELOPMENTû
Bank, OCBC Bank and Standard Chartered
Bank were the lenders of the self-arranged
lREDûPOWERûPLANTûOPERATORû!%3
6#-û
deal.
MONG DUONG LOAN DRAWS 13
UCB LINES UP LOAN FOR RA PHARMA BUY
#OAL
Mong Duong Power has closed a loan of Biopharmaceutical company UCB is backing
!STRAû3EDAYAûTHEûAUTOûlNANCEûUNITûOFû AROUNDû53MûAFTERûATTRACTINGûû ITSû53BNûACQUISITIONûOFû53
BASEDû2Aû
Indonesian conglomerate Astra banks in syndication. 0HARMACEUTICALSûWITHû53BNûOFûLOANS
)NTERNATIONALûISûRATEDû"AA"""¦û-OODYS Citigroup and HSBC were the original The acquisition will also be funded with
&ITCH  mandated lead arrangers, bookrunners and EXISTINGûCASH

66 International Financing Review November 2 2019


The loans are being arranged and
underwritten by BNP Paribas Fortis and Bank of
America. BNP Paribas is facility agent.
Pro forma net debt to Ebitda on the
acquisition will be in the range of between
1.5 and 2.0 times with a rapid deleveraging
ALLOWINGû5#"ûTOûMAINTAINûSIGNIlCANTû
BALANCEûSHEETûmEXIBILITY
4HEûACQUISITIONûISûEXPECTEDûTOûCLOSEûBYûTHEû
ENDûOFûTHEûlRSTûQUARTERû
Ra Pharma is a clinical-stage
biopharmaceutical company leveraging a
proprietary peptide chemistry platform. The
COMPANYûISûACTIVEûINûTHEûlELDûOFû
complement biology developing therapies
to patients with rare diseases.
CZECH REPUBLIC
PPF LINES UP €1.15bn FOR CME
estate and mechanical engineering. The
group had assets of more than €45bn as of
December 2018.
FRANCE
BANIJAY TAPS FOR ENDEMOL BUY
Entertainment production and distribution
company BANIJAYûISûlNANCINGûITSûACQUISITIONû
of Endemol Shine with a committed debt
lNANCINGûANDûAûCAPITALûINCREASE
4HEûlNANCINGûINCLUDESûAûFULLûRElNANCINGû
OFû"ANIJAYSûANDû%NDEMOLSûEXISTINGûDEBT
Deutsche Bank, Natixis and Societe Generale
HAVEûUNDERWRITTENûTHEûlNANCING
Banijay is acquiring Endemol from The
Walt Disney Co and Apollo Global
Management.
Post-closing, the combined group will be
LOANS EMEA
2016 and 2017, of which around €580m was
outstanding in 2018.
TOM TAILOR UPS LOAN TO €375m
Clothing retailer TOM TAILOR has closed a
€375m syndicated loan after increasing the
facility by €10m.
The loan, which matures in September
2022, comprises a €145m revolving credit
facility, a €160m guarantee facility and a
€70m term loan.
Majority shareholder Fosun International
ISûPROVIDINGûAûlXEDûLOANûOFûõMûUNTILûTHEû
end of 2022.
As part of the agreement, CFO Thomas
Dressendoerfer resigned from Tom Tailor’s
management board on October 31. His
successor is Christian Werner with effect
from November 1.
Tom Tailor signed a term sheet for the
Financial investment group PPF GROUP has
TERMûlNANCINGûOFûTHEûCOMPANY
LINEDûUPûAûõBNûLOANûlNANCINGûTOûBACKûITSû
acquisition of media and entertainment
company Central European Media
Enterprises.
The senior secured term loan and
revolving credit facilities have been fully
underwritten by BNP Paribas, Credit Agricole,
Credit Suisse, HSBC, Societe Generale and
YEARûREVOLVINGûCREDITûFACILITYû
UniCredit as mandated lead arrangers and
bookrunnners.
BNP Paribas and Societe Generale are
GLOBALûCOORDINATORSûONûTHEûlNANCING
Societe Generale and Komercni banka are
facility agent and security agent,
respectively.
4HEû53BNûACQUISITIONûWILLûBEûFUNDEDû
HELDûBYû,$(ûWITHûAûûSTAKEûANDû6IVENDIû lNANCINGûINûEARLYû/CTOBERûSECURINGûTHEû
with a 32.9%. LONG
The combined group will own almost 200
production companies in 23 territories and
the rights for close to 100,000 hours of LUXEMBOURG
content.
Pro-forma revenue of the combined group NEXA NETS US$300m RCF
ISûEXPECTEDûTOûBEûAROUNDûõBNûFORûTHEûYEARû
ending December 31 2019. Zinc producer NEXA RESOURCES has signed a
53MûlVE
with a syndicate of lenders.
GERMANY 4HEûlNANCINGûWILLûBEûUSEDûFORûGENERALû
corporate purposes, providing the company
SARTORIUS TAPS FOR DANAHER with increased liquidity and additional
mEXIBILITY
Biopharmaceutical laboratory technology The RCF pays a margin of 100bp over
company SARTORIUSûISûBACKINGûITSû53Mû three-month Libor.
cash acquisition of parts of Danaher’s life .EXAûISûAûLARGE
SCALEûLOW
COSTûINTEGRATEDû
THROUGHûAûMIXûOFûEQUITYûANDûTHEûDEBT science portfolio with a loan. ZINCûPRODUCERûOPERATINGûMININGûANDû
CME operates television stations in The loan is being provided by BNP Paribas smelting assets in Latin America.
"ULGARIAûTHEû#ZECHû2EPUBLICû2OMANIAû as sole mandated lead arranger, bookrunner
Slovakia and Slovenia. and underwriter.
PPF Group invests in multiple market Hengeler Mueller advised BNP Paribas on RUSSIA
SEGMENTSûSUCHûASûlNANCIALûSERVICESû the transaction.
telecommunications, biotechnology, real The acquired portfolio includes the METINVEST PREPAYS US$75m OF PXF
ForteBio label-free biomolecular
EMEA LOANS BOOKRUNNERS – FULLY characterisation business; the Metals and mining company METINVEST has
SYNDICATED VOLUME chromatography hardware and resins REPAIDû53MûOFûITSûPRE
EXPORTûlNANCEû
BOOKRUNNERS: 1/1/2019 TO DATE business; and SoloHill, a microcarrier 08& ûFACILITYûAHEADûOFûSCHEDULE
Managing No of Total Share technology and particle validation standards Following the repayment, the remainder
bank or group issues US$(m) (%) business. DUEûISû53Mû-ETINVESTûSIGNEDûTHEû
1 Credit Agricole 154 36,196.72 7.7 Together the businesses had combined 53Mû08&ûINû!PRILûûANDûITûISûDUEûTOû
2 BNP Paribas 168 36,163.08 7.7 SALESûTURNOVERûOFûAROUNDû53MûINû mature in October 2022.
3 UniCredit 120 26,380.18 5.6 4HEûACQUISITIONûISûEXPECTEDûTOûBEû $EUTSCHEû"ANKû).'û5NI#REDITûANDû
4 BofA 65 26,257.29 5.6 COMPLETEDûINûTHEûlRSTûQUARTERûOFû .ATIXISûWEREûLEADûARRANGERSûONûTHEûDEAL
5 SG 108 22,346.07 4.8 Sartorius has a €400m syndicated Metinvest said the prepayment releases it
6 Deutsche Bank 80 21,864.31 4.7 revolving credit facility that was originally from scheduled principal repayments for
7 Citigroup 75 17,691.70 3.8 arranged in December 2014 via BNP Paribas, THEûNEXTûFEWûMONTHSûhPROVIDINGûGREATERû
8 Commerzbank 103 17,277.75 3.7 #OMMERZBANKûANDû,""7ûASûBOOKRUNNINGû lNANCIALûmEXIBILITYûDURINGûAûSTEELûPRICEû
9 Natixis 86 16,960.72 3.6 mandated lead arrangers. down-cycle”.
10 ING 106 16,388.04 3.5 4HATûlNANCINGûMATURESûINû$ECEMBERû The payment is a planned use of part of
Total 688 469,577.35 2021. the proceeds from the group’s recent dual-
Proportional credit The company also placed CURRENCYû53BN
EQUIVALENTûBONDû
Source: Refinitiv SDC code: R17 Schuldscheindarlehen loan notes in 2012, TRANSACTIONûWHICHûWASûAIMEDûATûEXTENDINGû

International Financing Review November 2 2019 67

THEûMATURITYûPROlLEûOFûITSûOUTSTANDINGû
Eurobonds.
SAUDI ARABIA
PIF SIGNS US$10bn BRIDGE
Saudi Arabia’s PUBLIC INVESTMENT FUND, has
SIGNEDûAû53BNûONE
YEARûSYNDICATEDû Proceeds will be used for general
bridge loan.
Proceeds will be used for general
corporate purposes and will enable the
sovereign wealth fund to accelerate the
implementation of its investment
programme.
The syndicated bridge loan, which
bankers said pays around 30bp over Libor,
will be repaid following completion of the
YEARûLOANûTOûRElNANCEû
agreed sale of PIF’s stake in Saudi Basic
Khaimah as bookrunners and mandated lead
arrangers. China Construction Bank is
mandated lead arranger.
Citi was documentation agent and
#OMMERZBANKûWASûFACILITYûAGENT
The two-year facility has a one-year
EXTENSIONûOPTIONûANDûLAUNCHEDûATû53Mû
BEFOREûCLOSINGûATû53MûFOLLOWINGûANû
oversubscription.
market for €200m dual-tranche syndicated
corporate purposes.
The Investec group is dual-listed on the
,ONDONûANDû*OHANNESBURGûSTOCKûEXCHANGES
Investec Bank has been assigned long-
term ratings of Baa3, BB and BB+ by
Moody’s, S&P and Fitch, respectively.
TURKEY
has also been recovering in secondary to
98.84% of face value on October 31 from
98.87% on October 11.
“Turkish deals are still getting done, there
MIGHTûBEûAûLITTLEûMOREûOFmOADINGûINû
secondary but that is all,” said one banker.
There has also been corporate activity in
recent weeks with Turkish glass
manufacturer TRAKYA CAM SANAYII tapping the
loan.
UK
CONVATEC REFINANCES
Medical products company CONVATEC has
SIGNEDûAû53BNûlVE
debt put in place at its IPO in October 2016.
Industries Corp to Saudi Aramco. BANKS WEATHER THE STORM 4HEûlNANCINGûWHICHûWASûAGREEDûONûMOREû
As outlined in PIF Programme 2018-2020,
launched in October 2017, its four sources
of funding are capital injections by the
government, asset transfers from the
government, retained investment returns,
and PIF loans and debt instruments
independently issued by PIF.
The syndicated bridge loan has been
The price of syndicated loans for Turkish
banks has been rising again in Europe’s
secondary loan market, as AKBANK, TURK
EKONOMI BANKASI and YAPI KREDI all successfully
SECUREDûTHEIRûLATESTûRElNANCINGSûATûLOWERû
pricing than their previous loans.
Pricing fell in the secondary market in
FAVOURABLEûTERMSûCOMPRISESûAû53BNû
TERMûLOANûANDûAû53MûREVOLVINGûCREDITû
facility.
4HEûlNANCINGûREPLACESûAROUNDû53BNû
of outstanding term loans and an undrawn
53Mû2#&
The previous originally totalled around
53BN
EQUIVALENTûINCLUDINGû53BN

agreed with a group of 10 international October following Turkey’s offensive into EQUIVALENTûOFû53ûDOLLARûANDû
banks. They are Bank of America, BNP Paribas, Northern Syria that began on October 9. euro-denominated term loans.
Citigroup, Credit Agricole CIB, HSBC, JP Morgan, However, with the closing of these latest The term loans paid margins ranging
Mizuho, MUFG, Standard Chartered Bank and loans seemingly unaffected by the latest FROMûBPûTOûBPûWITHûAûûmOORûONûTHEû
SMBC. POLITICALûVOLATILITYûCONlDENCEûHASûRETURNEDû 53ûDOLLARûLOANSûANDûAûûmOORûONûTHEûEUROû
The banks are part of PIF’s core banking among loan traders. loans.
group, created in September 2018 through On November 1 the price for Turkish The RCF paid 150bp-225bp over Libor/
THEûSIGNINGûOFûAû53BNûINTERNATIONALû
syndicated loan.
The loan was agreed with 15 banks - JP
Morgan, Citigroup, HSBC, BNP Paribas,
Standard Chartered, Bank of China,
BANKûLOANSûWHICHûAREûRElNANCEDûTWICEûAû
year in the international syndicated loan
market, rose to 99.37% of face value after
falling to 99.28% on October 23 from an
average of 99.82% of face value on October
Euribor with a commitment fee of 37.5bp-
50bp on undrawn funds, depending on
leverage.
4HEûPREVIOUSûlNANCINGûWASûPROVIDEDûBYûAû
group of banks including Bank of America
Industrial and Commercial Bank of China, 11, just after the incursion started, -ERRILLû,YNCHû'OLDMANû3ACHSûANDû5"3ûTHEû
Goldman Sachs, Morgan Stanley, SMBC, according to LPC data. global coordinators of the IPO.
-IZUHOû-5&'û#REDITû!GRICOLEû3OCIETEû
Generale and Bank of America.
)TûWASûTHEûlRSTûCOMMERCIALûLOANûRAISEDûBYû
the fund and paid a margin of 75bp over
Libor.
EQUIVALENTûLOANûTHATû HASûBECOMEûTHEûlRSTû5+û2%)4ûTOûAGREEûAû
SOUTH AFRICA
INVESTEC BANK GETS US$300m LOAN
YEARû2#&ûBEINGûPROVIDEDûBYû
INVESTEC BANK has signed an increased
,ASTûWEEKû9APIû+REDIûSIGNEDûAû53M
equivalent loan paying 225bp over Libor and
210bp over Euribor for the dollar and euro
tranches, respectively. It is cheaper than the
BANKSû53BN
signed in May, which paid 250bp over Libor
and 240bp over Euribor.
Yapi’s deal secured the same pricing
BENCHMARKEDûBYû!KBANKSû53Mû
RElNANCINGûTHATûCLOSEDûTHEûDAYûBEFOREû
Turkey’s offensive into Syria.
TEB, which only taps the market once a
DERWENT NETS £300m GREEN RCF
Real estate investment trust DERWENT LONDON
green revolving credit facility that meets the
Loan Market Association’s Green Loan
Principles.
The £300m facility is part of a wider
aMûlVE
HSBC, Barclays and NatWest.
The green tranche is available to fund
53MûTERMûLOANûFACILITYûWITHûAûGROUPûOFû YEARûINûTHEûAUTUMNûALSOûSIGNEDûAû53M
activities that satisfy the criteria set out in
15 international banks. EQUIVALENTû
DAYûDUAL
TRANCHEûRElNANCINGû Derwent’s newly established Green Finance
Citigroup and Commerzbank were last week. The facility comprises a €306m Framework.
coordinators, bookrunners and mandated TRANCHEûANDûAû53MûTRANCHEûPAYINGû The framework describes Derwent’s
lead arrangers on the loan. total costs of 210bp over Euribor and 225bp sustainability objectives and outlines how
They were joined by Banco BAI Europa, over Libor, respectively. the company intends to fund projects to
Bank of America, Bank of China, HSBC, Industrial This compares with the 265bp over deliver working, amenity and outdoor
and Commercial Bank of China, JP Morgan, Euribor and 275bp over Libor it paid for last SPACESûIMPROVEDûENERGYûEFlCIENCYûANDû
Mizuho, MUFG, Standard Chartered Bank, State October’s deal. reduced consumption of natural resources.
Bank of India, SMBC and National Bank of Ras Al- Pricing on Akbank’s latest €374m tranche These include the development or

68 International Financing Review November 2 2019

 LOANS EMEA/LATAM

refurbishment of commercial and performance reporting of eligible projects in note programme that was introduced in
residential buildings such as 80 Charlotte its annual responsibility report. 2018.
Street W1 and Soho Place W1 in London “This funding demonstrates the growing The RCF was agreed with a syndicate of
that target and receive minimum third-party DEMANDûFORûGREENûlNANCINGûANDûTHEû relationship banks and selected new lenders
VERIlEDûGREENûBUILDINGûCERTIlCATIONûBASEDû
on measurable improvements and positive
environmental impacts.
4HEûFRAMEWORKûHASûBEENûEXTERNALLYû
reviewed to ensure compliance with the
Green Loan Principles.
5NDERûTHEûlNANCINGû$ERWENTûISûREQUIREDû
TOûPUBLISHûANûINDEPENDENTLYûVERIlEDûREPORTû
INDUSTRIALû
ANNUALLYûCONlRMINGûTHATûTHEûGREENûLOANSû
and the framework continue to satisfy the
requirements of the Green Loan Principles.
The company will also provide qualitative
and quantitative environmental
LatAm issuers face steep learning curve
on ESG loans
„ GREEN FINANCING Just US$18bn in green or sustainable loans issued in LatAm since March 2018
Latin American banks and corporations are
facing a steep learning curve as they turn to
sustainable lending as a viable financing tool.
As tackling climate change becomes a
vital priority in the region, so does aligning
environmental, social and governance strategies
with borrowing needs. Issuers are seeking advice
from banks on green and sustainable financings
as lenders also educate themselves on the
opportunities and challenges ahead.
Green and ESG lending remains in its infancy
in Latin America. Just US$18bn in green or
sustainable loans has been issued across the
region since March 2018, according to LPC data.
More exposure to these products could set
off rapid growth in a region that is positioned to
keep growing while ESG norms become more
prominent.
“There needs to be more education around
it. Sustainable finance is still very new to a lot
of people,” said Tess Virmani, associate general
counsel and senior vice president of the Loan
Syndications and Trading Association.
“There could be a lot of opportunities.
Lenders are in the best position to let their
clients know that this loan product is available.”
Solutions are as varied as the corporations
and the banks that fund their operations.
Some banks are strategically offering
sustainable loans to close clients that already
have an ESG strategy in place and have a specific
goal in mind, such as getting access to a new
investor and client base. MUFG was mandated by
Chilean paper and pulp company CMPC to lead a
five-year US$100m green Shogun loan, raised in
dollars and granted by Japanese banks.
continued focus on sustainability across the
real estate sector,” said David Stephens,
(3"#û5+SûHEADûOFûCORPORATEûREALûESTATE
GLOBALWORTH AGREES
€200m RCF
#ENTRALûANDû%ASTERNû%UROPEANûOFlCEû
investor GLOBALWORTH REAL ESTATE INVESTMENTS
has signed a €200m 4.5-year unsecured
revolving credit facility.
4HEûlNANCINGûHASûBEENûSTRUCTUREDûTOû
align with Globalworth’s euro medium-term
The company, which had already done an
international green bond, was confident it would
apply the green standard to the loan.
Other investment-grade borrowers in the
region, whose revenues depend on tapping
natural resources - particularly those within the
paper, utilities, energy and mining sectors —
are under pressure to implement increasingly
sustainable practices, presenting both a
challenge and an opportunity for ESG financiers.
Mining companies recognise the need to align
their financing to more sustainable practices.
The January 25 collapse of a tailings dam at
Brazilian miner VALE‘s Corrego do Feijao iron ore
mine in Brumadinho ramped up the pressure
to provide safer conditions for employees and
nearby communities.
ESG or key performance indicator-linked loans
may provide a means for mining companies to
implement more sustainable practices and to be
held accountable on a financial level, by linking
the interest rate of the loan to the benchmarks
set by a third-party agency.
GREEN SHOOTS
As interest increases toward sustainable
financing in the region, the dialogue between
banks and issuers has heightened.
“We have had dozens of conversations with
interested borrowers over the past few months,
and so far much of it is still about educating
the market,” said Charlotte Peyraud, vice
president of sustainable banking at Credit
Agricole CIB.
“We are seeing a lot of interest in Latin
America in the early stages of this product.”
International Financing Review November 2 2019
led by JP Morgan.
Lenders also include Banca Transilvania,
Bank of China, BRD Groupe Societe Generale,
Deutsche Bank, Intesa Sanpaolo and Raiffeisen
Bank International.
JP Morgan Europe is facility agent.
Globalworth acquires, develops and
MANAGESûOFlCEûANDûLOGISTICSLIGHT
real estate assets in Central and Eastern
Europe.
The company is listed on the AIM
segment of the London Stock
%XCHANGE
European banks or companies leading
the charge on sustainable finance that have
subsidiaries in the region can export their
knowledge to Latin America, leading to a
cascade of sustainable lending transactions.
Spanish utility IBERDROLA signed the first
green loan in Latin America: a US$400m
financing for Iberdrola Mexico in April 2018 that
was led by BBVA.
US subsidiary of Iberdrola Avangrid signed
a US$2.5bn sustainable credit facility in
June 2018. In March 2019, BBVA coordinated
Iberdrola’s €$1.5bn sustainable credit facility.
“When the parent company goes green, they
have subsidiaries that are doing the same,” said
Jorge Gonzalez Jacob, global head of corporate
loans at BBVA.
Still, some banks are tip-toeing around the
asset class, asking questions and observing
how competitors are executing the loans before
diving in.
One banker said more regulation and
standardisation on sustainable loans will be
crucial before the practice is adopted on a
wide scale. It is a matter of time, as lenders are
increasingly prioritising sustainable finance for
their own bottom line.
“The financial industry is waking up at a
rapid pace to the risk and opportunities from
the changing climate and the transition to a
lower-carbon economy,” said Joseph Lake, COO
of The Climate Service, a climate change risk-
assessment technology firm.
“We’ve moved from this information being a
‘nice to have’ to a ‘need to have’,” Lake said.
Daniela Guzman
69

NORTH AMERICA
UNITED STATES
YEARû management and monitoring, cybersecurity
US STEEL UPS RCF TO US$2bn
US STEEL has increased its asset-based revolving
CREDITûFACILITYûTOû53BNûTOûBACKûTHEû
acquisition of a 49.9% stake in Big River Steel.
4HEûlNANCINGûWASûINCREASEDûFROMû
All other terms for the loan remained
unchanged. The loan is priced at 92bp over
Libor with an 8bp facility fee.
Bank of America, Wells Fargo, Citigroup and
US Bank are lead arrangers and bookrunners.
4HEûCOMPANYSû53BNûlVE
revolving credit is unchanged with a
maturity date of October 25 2022.
Starbucks is rated BBB+ by S&P and Fitch
and Baa1 by Moody’s. S&P and Moody’s
downgraded the company by one notch in
June 2018.
and from day 91 onwards the fee is equal to
the full coupon.
Jefferies, Golub Capital and Ares Capital are
arranging the funding.
Help/Systems provides IT operations
and business intelligence software.
Fuel station and convenience store
operator ALLSUP’SûHASûLAUNCHEDûAû53Mû
term loan B that will support the acquisition
of the company by convenience store chain
Yesway.
The seven-year TLB is being offered at 550bp-
53BNûWHILEûTHEûMATURITYûWASûEXTENDEDû
to October 25 2024 from February 2023.
4HEûAMENDEDûlNANCINGûCOMPRISESûAû
53BNû2#&ûANDûINTRODUCESûAû53Mû
lRST
BPûOVERû,IBORûWITHûAûûmOORûû/)$ûANDû
101 soft call protection for 12 months.
The debt will be governed by a covenant
LEVERAGED LOANS ensuring that total net leverage ratio does
INûLAST
OUTûFACILITY
Pricing on the RCF remains at 125bp over
Libor, rising by 25bp for reference
availability of less than 30%.
The FILO facility pays a margin of 225bp
over Libor, also rising by 25bp for reference
LIENûRATINGSûAREû""
availability of less than 30%.
FOCUSEDûPRIVATEû 9ESWAYûISûEXPECTEDûTOûMAINTAINûDEBTûTOû
JP Morgan is administrative agent on the
NOTûEXCEEDûûTIMES
!LLSUPSûISûALSOûRAISINGûAû53MûREVOLVINGû
UNITED STATES credit facility, according to Moody’s.
Goldman Sachs and RBC Capital Markets are
MORE BANKS FOR SOPHOS coordinating the transaction.
#ORPORATEûANDûlRST
53ûSOFTWAREûANDûTECHNOLOGY
EQUITYûlRMû4HOMAû"RAVOûHASûADDEDûMOREû Ebitda of about 5.5 times as it integrates the
lNANCINGûWHILEûBank of America, Wells Fargo BANKSûTOûTHEûLOANûBACKINGûITSû53BNû acquisition of Allsup’s, Moody’s said.
and Barclays are co-syndication agents, lead
arrangers and bookrunners.
BMO, Citigroup, Fifth Third Bank, Goldman
Sachs, PNC Bank, SunTrust, Citizens Bank, Credit
Suisse, ING and Morgan Stanley are co-
documentation agents.
53û3TEELûAGREEDûTOûACQUIREûTHEûû
ownership interest in Big River Steel for around
YEARûlRST
ACQUISITIONûOFû5+ûCYBERûSECURITYûCOMPANYû
SOPHOS.
Bank of America, Barclays, Credit Suisse and
HSBC have joined Goldman Sachs as lenders to
PROVIDEû53BNûOFûLOANSûTOûlNANCEûTHEû
buyout.
The interim facilities comprise a
53BNûSEVEN
4HEûACQUISITIONûISûVALUEDûATû53MûTHEû
ratings agency said.
Yesway is a portfolio company of private
EQUITYûlRMû"ROOKWOODû&INANCIALû0ARTNERS
FINANCING FOR ANIXTER
LIENûTERMûLOANû"û Clayton, Dubilier & Rice is backing its around
53MûINûCASHûWITHûAûCALLûOPTIONûTOûACQUIREû Aû53MûEIGHT
YEARûSECOND
LIENûFACILITYû 53BNûBUYOUTûOFûCABLINGûANDûWIREûCOMPANYû
THEûREMAININGûûWITHINûTHEûNEXTûFOURûYEARSû ANDûAû53M
EQUIVALENTûlVE
YEARû ANIXTER INTERNATIONAL with a committed debt
the company said at the beginning of October. revolving credit facility. lNANCINGûPROVIDEDûBYûBank of America, JP
4HEûINCREASEDûlNANCINGûWASûINITIALLYûFULLYû 4HEûMARGINûFORûTHEûlRST
LIENûTERMûLOANûISû Morgan, Deutsche Bank and Credit Suisse.
COMMITTEDûBYûlNANCIALûADVISERû"ARCLAYSû 425bp over Libor, while the second-lien pays %QUITYûlNANCINGûFORûTHEûBUYOUTûWILLûBEû
Capital. 825bp over Libor. Drawings under the revolver PROVIDEDûBYû#$2û&UNDû8ûAûPOOLûOFûAROUNDû
pay 425bp Libor/Euribor, while undrawn 53BNûOFûEQUITYûCAPITALûMANAGEDûBYû#$2
STARBUCKS EXTENDS US$1bn LOAN amounts pay a 37.5bp commitment fee. 4HEû53ûPERûSHAREûALLûCASHûBUYOUTû
The cash offer values Sophos at around WHICHûISûEXPECTEDûTOûCLOSEûBYûTHEûENDûOFûTHEû
Coffee company STARBUCKSûHASûEXTENDEDûITSû 53BNûORûANûENTERPRISEûVALUEûOFû lRSTûQUARTERûOFûûWILLûSEEû!NIXTERû
53BNû
DAYûUNSECUREDûCREDITûFACILITYûBYû 53BNûINCLUDINGûNETûDEBT become a private company.
a year to October 21 2020. The buyout will be funded through a !NIXTERûISûAûGLOBALûDISTRIBUTORûOFûWIREûANDû
combination of debt and equity to be cabling in the areas of communications,
AMERICAS LOANS BOOKRUNNERS – FULLY invested by funds managed and/or advised security, networking, electronics and utility
SYNDICATED VOLUME by Thoma Bravo. power.
BOOKRUNNERS: 1/1/2019 TO DATE HELP/SYSTEMS is in the market with a Fuel card company FLEETCOR TECHNOLOGIES
Managing No of Total Share 53BNûCREDITûFACILITYûTHATûWILLûBEûUSEDû HASûLAUNCHEDûAû53Mû4ERMû,OANû"ûTHATû
bank or group issues US$(m) (%) to fund TA Associates and Charlesbank WILLûREPRICEûEXISTINGû4ERMû,OANû"ûDEBT
1 BofA 878 255,332.03 12.3 Capital Partners’ majority investment in the The loan is guided at 175bp over Libor
2 JP Morgan 813 252,581.01 12.1 company. WITHûAûûmOORûANDûISûOFFEREDûATûANû/)$ûOFû
3 Wells Fargo 689 173,230.95 8.3 4HEûDEALûCOMPRISESûAû53MûlVE
YEARû 99.875-par.
4 Citigroup 460 160,416.33 7.7 REVOLVERûAû53MûSEVEN
YEARûlRST
LIENû 4HEûEXISTINGûLOANûISûPRICEDûATûBPûOVERû
5 MUFG 261 97,482.66 4.7 TERMûLOANûAû53MûDELAYED
DRAWûlRST
LIENû ,IBORûWITHûAûûmOOR
6 Barclays 276 75,873.05 3.6 TERMûLOANûANDûAûPRIVATELYûPLACEDû53Mû The transaction also refreshes 101 soft call
7 RBC 272 73,423.38 3.5 eight-year second-lien term loan. PROTECTIONûFORûSIXûMONTHS
8 Morgan Stanley 142 61,906.75 3.0 4HEûlRST
LIENûTERMûLOANûISûGUIDEDûATûBP
,IKEûTHEûEXISTINGûLOANûTHEûNEWû4,"ûWILLû
9 BMO 325 52,194.81 2.5 450bp over Libor with a 99 OID. mature on August 2 2024 and will be
10 Scotiabank 210 52,004.96 2.5 The delayed draw term loan will be covenant-lite.
Total 3,517 2,080,180.88 available for one year. There is no ticking fee BofA is leading the deal.
Proportional credit until day 60. From day 61 through day 90 a FleetCor is a global provider of
Source: Refinitiv SDC code: R7 ticking fee equal to half the coupon applies, commercial payment services.

70 International Financing Review November 2 2019


Zayo’s US$6bn LBO to test appetite
for Single B loans
„ US Investors have pushed for pricing, documentation concessions
Approximately US$6bn in acquisition financing
for fibre optic cable company ZAYO may launch
into the leveraged finance market before the
end of this year, a move that will test an investor
base that has grown hesitant over Single B
credits exposed to a cooling US economy.
Zayo, which will use the funds to support
its take-private buyout by investment firms
Digital Colony Partners and EQT, is expected to
raise the lion’s share of the US$6bn from the
institutional term loan market with B2 or B3
rated leveraged loans, bankers said.
CLOs, the biggest buyers of leveraged loans,
have limited baskets for Single B rated (B1/B+,
B2/B and B3/B–) debt, but Zayo’s potential
transaction is considered a “must-own” that can
serve as a shock-absorbing credit capable of
performing in a downturn, the sources said.
“Zayo is a strong, defensive play in a non-
cyclical industry. That stability goes a long
way,” one portfolio manager said. “And internet
bandwidth is only going to grow. Zayo’s
deal should have natural tailwinds with the
investment community.”
Zayo has grown its long-haul fibre routes
throughout the US and Europe in recent years.
Its service is considered an integral connection
between data centres and high-growth
companies such as Netflix and Google that
require reliable internet connectivity.
Digital Colony and EQT in May agreed to pay
US$35 for each Zayo share and assume the
company’s US$5.9bn of net debt, valuing the
leveraged buyout at US$14.3bn.
Publishing company HOUGHTON MIFFLIN
HARCOURTûHASûLAUNCHEDûAû53MûlVE
YEARû loan’s documentation.
Term Loan B that will be used for
RElNANCING
The deal is guided at 600bp over Libor
Credit Suisse, Morgan Stanley, Citigroup,
Deutsche Bank, SunTrust and TD Bank provided
the approximately US$8.2bn in debt for the
acquisition. Credit Suisse will lead any potential
institutional Term Loan B or secured bond sale
and Morgan Stanley is expected to coordinate
any unsecured bond deal for Zayo.
HAPPY MEDIUM
Sceptical investors in the past three months have
balked at Single B rated loans, pushing companies
for pricing and documentation concessions in
exchange for commitments to riskier loans.
In October, winery COOPER’S HAWK and font
software firm MONOTYPE IMAGING became the
latest Single B rated borrowers to accommodate
investor demands, following amended
transactions from auction house Sotheby’s and
digital imaging firm SHUTTERFLY in September.
CLO managers are also reluctant to buy
Single B rated debt that they may be forced to
shed if these loans are downgraded one notch to
Triple C status. CLOs hold more than 60% of the
roughly US$1.2trn leveraged loan market and
are typically limited on the number of loans they
can hold with that rating.
And while Zayo, rated B2/B+, has historically
borrowed money at cheaper levels and more
flexible terms than other Single B rated credits,
it may be compelled to offer more spread and
possibly tighter documentation to win over
investors with more bargaining power.
“[Zayo] will have to pay up more than usual.
But when you look at the pantheon of B3s, this
implemented a series of changes to the
Markets, Credit Suisse, MUFG and RBC arranged
The seven-year TLB priced at 375bp over
Libor, the wide end of a 350bp-375bp range
at launch.
LOANS LEVERAGED LOANS
would be one of the strongest ones,” said a
second portfolio manager.
In June 2017, the company repriced a then
US$1.1bn term loan to 225bp over Libor from
250bp. Since then, however, the average spread
for Single B rated borrowers has gapped out as
investors have scrutinised private equity-backed
LBOs. In October, new Single B loans were
offered at roughly 450bp over Libor compared
with 380bp a year earlier, according to LPC data.
“For exceptional B3 names there is demand,
but they are requiring a premium,” said one senior
leveraged loan banker, citing Cole-Parmer and Hub
International as examples of sponsor-backed deals
that pushed through October’s difficult marketplace.
On October 28, lab equipment provider
COLE-PARMER priced a US$1.09bn credit facility
that supports its buyout by investors GTCR and
Golden Gate Capital. The B3/B rated company’s
US$770m first-lien loan priced at 425bp over
Libor, while a US$75m revolving credit facility
and privately placed US$245m second-lien loan
rounded out the financing.
On October 18, insurance broker HUB, also
rated B3/B, offered a US$1.27bn incremental
loan at 400bp over Libor that partially financed
a shareholder distribution.
“Not all B3s are equal. A deal like Hub, the
market is tripping over itself to own,” a managing
director at an investment bank said. “If you’re going
to be long in the B3 market, then Zayo is one you’d
back. It’s hard to know exactly where it will price,
but there is enough depth in the market at a price.”
Aaron Weinman
Morgan Stanley, Goldman Sachs, BMO Capital
the transaction. Morgan Stanley is also
administrative agent.
Proceeds will repay debt, fund a
WITHûAûûmOORûAûnû/)$ûANDûûSOFTûCALLû
for 12 months.
(OUGHTONû-IFmINSû4,"ûWILLûAMORTISEûATû
5% per year and be repaid on a quarterly
lREDûPOWERûGENERATORSûACROSSû
basis.
!ûû,IBORûmOORûHASûALSOûBEENûINTRODUCEDû
to the transaction, while the OID remained
at 99 and soft call protection is still 101 for
SIXûMONTHS
Documentation changes include a cap on
shareholder distribution and pay fees and
EXPENSESûRELATEDûTOûTHEû4,"
Granite operates roughly 4,800 MW of
NATURALûGAS
THEû53
Joint lead arrangers are Citi LEADûLEFT û Ebitda add-backs, a 50bp most-favoured The company is backed by LS Power,
Morgan Stanley, BofA and Wells Fargo. Citizens is nation clause for the life of the loan and which invests, develops and operates power
co-manager. Administrative agent is Citi. restricted payments baskets have been generation assets.
%XPECTEDûCORPORATEûRATINGSûAREû#AA"n"û RECLASSIlED Winery and restaurant COOPER’S HAWK has
ANDûTHEûlRST
LIENû4,"ûISûRATEDû#AA"""n Granite Energy will be limited in its ability COMPLETEDûAû53Mû4ERMû,OANû"
TOûOFmOADûASSETSûAWAYûFROMûLENDERSûANDûTHEREû The seven-year TLB priced at 650bp over
GRANITE ENERGY PRICES TLB are also imitations on the company’s ability ,IBORûWITHûAûûmOORûû/)$ûANDûûHARDû
to invest in unrestricted subsidiaries. call protection for 12 months.
Independent power producer GRANITE ENERGY Granite Energy will also conduct quarterly Initially, the TLB was offered as a
SETûTHEûPRICEûONûAû53BNû4ERMû,OANû"ûANDû calls with lenders. 53MûTRANSACTIONûATûAûRANGEûOFûBP

International Financing Review November 2 2019 71

 Direct lenders provide US$1.6bn loan
to Risk Strategies
„ US At least a dozen unitranche loans sized at US$500m or more have been agreed this year
RISK STRATEGIES, a national insurance brokerage
and risk management firm, has agreed a
US$1.6bn unitranche loan from a group of 10
direct lenders, making it one of the largest ever
such loans arranged to date.
The accelerating pace of large-scale direct
lending deals this year, including a raft of billion-
dollar plus unitranche loans, underscores the
depth and maturity of the private credit market.
It also reflects a drop in bank appetite for risk.
The uptick comes at a time when increased
execution risk in the broadly syndicated loan
market -- where leveraged borrowers have
traditionally raised funding -- is prompting
private equity sponsors to seek certainty in the
arms of direct lenders.
“Direct lenders have become incredibly
valuable,” said one private credit investor.
“Sponsors are not willing to bet on the uncertainty
in the broadly syndicated loan market right now.”
Year-to-date at least a dozen unitranche loans
sized at US$500m or more have been arranged
by direct lenders, according to public and private
data tracked by LPC, roughly double the seven
deals completed in all of 2018.
In this latest example, the US$1.6bn
unitranche loan, which includes a US$400m
delayed draw component, was provided by
administrative agent Golub Capital, together
with Goldman Sachs, Apollo Global Management,
KKR, Oak Hill Advisors, Ares, Carlyle, Owl Rock
Capital Partners, Antares Capital and Partners
Group. The company also lined up a US$50m
revolving credit facility.
The unitranche loan priced at 550bp over
Libor. Proceeds are slated to refinance the
company’s existing capital structure, including a
first-lien term loan priced at 425bp over Libor.
600bp over Libor and a 99 OID.
“People really liked the company and the
opportunity to get really good allocations in
a credit they like with a sponsor they know,” a
direct lender said.
Risk Strategies is a portfolio company of
Kelso. The private equity sponsor acquired a
majority stake in the brokerage firm in 2015
from Kohlberg & Company. On October 29, Risk
Strategies said in a release that it acquired Dash
& Love, a specialty brokerage based outside of
Philadelphia. Terms of the acquisition were not
disclosed.
OPPORTUNITY KNOCKS
Private credit is no longer solely the domain of
small to mid-sized companies and direct lenders
are benefiting from the repricing of risk in the
broader loan market.
Sponsors are increasingly turning to direct
lenders to fund large sized transactions with
unitranche loans. The structure, which combines
senior and subordinated risk into a single
tranche of debt, is favoured for its certainty and
ease of execution.
Direct lenders said sponsors are regularly
showing them deals before going to bank
arrangers or at the same time, and they expect
the dynamic to continue.
A record US$10.7bn in unitranche loans was
booked in the third quarter, surpassing the
US$9.2bn tally for the second quarter.
Last quarter, INTEGRITY MARKETING GROUP,
which sells life and health insurance products to
the senior market, raised a US$945m unitranche
loan in a deal backing private equity firm Harvest
Partners’ strategic growth investment in the
company. Owl Rock, Crescent Capital and
Antares provided the loan.
0ROCEEDSûWILLûRElNANCEûANûEXISTINGûBRIDGEû
Earlier in the summer, ION GROUP tapped
Goldman Sachs Private Credit and HPS to
provide a US$1.25bn unitranche loan for its
takeover of financial media and data firm Acuris,
and Golub provided a US$950m unitranche
loan to cloud-based supply chain management
company E2OPEN to buy Amber Road.
Typically unitranche loans have been used
to finance private equity-backed mergers and
acquisitions for small and mid-sized companies,
but more than 40% of last quarter’s unitranche
volume was arranged for large borrowers.
As direct lenders explained, if before they
were focused on US$30m Ebitda companies,
now US$100m Ebitda companies are in play.
With a significant group of private credit
players able to hold positions of roughly
US$100m in a single transaction, it is easier than
ever to club up a billion-dollar plus loan among
a group of buy and hold investors.
Nor is the broadly syndicated market currently
offering any meaningful pricing discount
relative to the direct lending market. At least
17 companies tapping the broadly syndicated
market in September and October saw pricing
flex up, all of them single-B rated borrowers,
after investors demanded higher yields to invest.
In a dislocated market, the ability of direct
lenders to move quickly and offer competitive terms
mitigates certain factors, including pricing and flex
risk. The direct lending deals also do not require
ratings. A sponsor may pay up incrementally in the
direct lending market, but sponsors are willing to
swallow that to lock in pricing.
In other words, sponsors know what terms
they are going to get, and that is an attractive
proposition.
Leela Parker
The seven-year TLB priced at 375bp over
The loan also includes 50bp of most- loan issued by Cooper’s Hawk sponsor Ares ,IBORûWITHûAûûmOORûANDûAûû/)$ûHAVINGû
favoured nation protection for lenders for Management that was used, along with an LAUNCHEDûATûBPnBPûWITHûAûû/)$
THEûLIFEûOFûTHEûLOANûANDûTHEûEXCESSûCASHûmOWû equity contribution, to fund the buyout of The Morgan Stanley-led deal includes 101
sweep opens at 75%. the company. SOFTûCALLûPROTECTIONûFORûSIXûMONTHSû)TûWILLû
The TLB will also be governed by a net Ares invested in Cooper’s Hawk in July. amortise at 1% per year.
lRST
LIENûLEVERAGEûCOVENANTûSETûATûAûû 0RIVATEûINVESTMENTûlRMû+ARP2EILLYûATûTHEû )TûWASûINCREASEDûFROMû53MûANDûTHEû
CUSHIONûTOûCLOSINGûNETûlRST
LIENûLEVERAGE same time sold its minority investment in additional proceeds will be used for working
Bank of America, Jefferies and RBC Capital Cooper’s Hawk. capital.
Markets arranged the transaction. BofA was 0ROMONTORYûALSOûRAISEDûAû53Mû
also the administrative agent. PROMONTORY SEALS LBO LOAN SECOND
LIENûTERMûLOANûANDûAû53Mû
#ORPORATEûANDûlRST
LIENûRATINGSûAREû""
 revolving credit facility.
Adjusted debt to Ebitda was 8.1 times for Financial services provider PROMONTORY #ORPORATEûRATINGSûAREû""nûANDûTHEûlRST

the 12 months ending July 3, 2019, according INTERFINANCIALûHASûCLOSEDûAû53Mû4ERMû lien debt is rated B1/B.
TOû-OODYSû4HISûISûEXPECTEDûTOûREMAINûABOVEû Loan B that will support its acquisition by Pending the acquisition by Blackstone,
ûTIMESûOVERûTHEûNEXTû
ûMONTHS PRIVATEûEQUITYûlRMû"LACKSTONE 0ROMONTORYSûDEBTûTOû%BITDAûISûEXPECTEDûTOû

72 International Financing Review November 2 2019

 LOANS LEVERAGED LOANS

be above 7.0 times, according to Moody’s. the margin from days 31-60 and 100% of the 4HEREûAREûCORPORATEûANDûlRST
LIENûRATINGSû
Blackstone agreed in September to margin from day 61 onwards. of B2/B.
ACQUIREûTHEûCOMPANYûFORûAPPROXIMATELYû Previously, ticking fees were 0% through The senior secured term loan B will
53BN
Promontory provides deposit allocation
SERVICESûANDûOTHERûlNANCIALûSERVICESûTOû53û
banks.
Healthcare provider INNOVACARE sweetened
THEûTERMSûONûAû53Mû4ERMû,OANû"
days 0-60, before kicking in at 50% of the
margin from days 61-120 and 100% of the
margin from day 121 onwards.
Goldman Sachs was the sole lead arranger
on the transaction.
0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûTHEû
RElNANCEûTHEûCOMPANYSûCAPITALûSTRUCTUREû
lNANCEûITSûTERMINATIONûOFûOBLIGATIONSûUNDERû
ITSûTAXûRECEIVABLEûAGREEMENTûANDûPAYûFEESû
ANDûEXPENSESûRELATEDûTOûTHEûTRANSACTION
Bank of America, Citigroup, RBC, Barclays,
Credit Suisse, Goldman Sachs and JP Morgan
The seven-year TLB is now priced at 575bp COMPANYSûEXISTINGûDEBTûFUNDûAû53Mû arranged the deal.
OVERû,IBORûWITHûAûûmOORûû/)$ûANDûû dividend and add cash to the balance sheet, #LARIVATEûAGREEDûTOûPAYû53MûTOû
soft call protection for 12 months. Moody’s said. terminate its TRA that it established on May
The loan was initially shopped at a range The ratings agency also said an unnamed 10 with its shareholders prior to listing on
OFûBPnBPûWITHûAûûmOORûû/)$ûANDû hDIVERSIlEDvûOILûCOMPANYûWILLûPURCHASEûAû THEû.EWû9ORKû3TOCKû%XCHANGE
ûSOFTûCALLûPROTECTIONûFORûSIXûMONTHS ûEQUITYûINTERESTûINû5NITEDû0ACIlCûFORû The company, which was formerly known
)NNOVA#AREûISûALSOûRAISINGûANû53Mû 53M as Thomson Reuters Intellectual Property &
revolving credit facility. 5NITEDû0ACIlCSûDEBTûLEVELûWILLûINCREASEûBYû 3CIENCEûSAIDûITûWILLûRETAINûTHEûDEFERREDûTAXû
Credit Suisse and Goldman Sachs are APPROXIMATELYû53MûBUTûTHEûEQUITYû assets that resulted from its sale by
ARRANGINGûTHEûlNANCING interest from the unnamed company will Thomson Reuters in 2016.
#ORPORATEûANDûlRST
LIENûRATINGSûAREû"" reduce debt to Ebitda to 5.4 times at the end 0RIVATEûEQUITYûlRMSû/NEXûANDû"ARINGû
0ROCEEDSûWILLûlNANCEû3UMMITû0ARTNERSû of 2019 from 6.5 times, Moody’s said. Private Equity Asia bought the business for
acquisition of the company. #ORPORATEûANDûlRST
LIENûRATINGSûAREû"" 53BN
InnovaCare’s projected 2019 year-end COLE-PARMER INSTRUMENT revised pricing on Hotel operator AIMBRIDGE HOSPITALITY has
adjusted debt to Ebitda remains less than 3.0 Aû53BNûCREDITûFACILITYûTHEûLABORATORYû lNALISEDûAû53MûFUNGIBLEûADD
ONûTOûITSû
times, according to Moody’s. equipment company is raising to fund its lRST
LIENûTERMûLOANû"ûTHATûMATURESûINûû
InnovaCare is the largest integrated sale to GTCR. which will support its acquisition of
healthcare system in Puerto Rico and has a Jefferies was lead left arranger on the Interstate Hotels and Resorts.
growing presence in Florida. ACQUISITIONûlNANCINGûWHICHûCOMPRISESûAû The add-on TLB, led by JP Morgan, cleared
53MûREVOLVERûAû53MûlRST
LIENûTERMû ATûBPûOVERû,IBORûWITHûAûûmOORûû
UNITED PACIFIC WRAPS TLB LOANûANDûAûPRIVATELYûPLACEDû53M
/)$ûANDûûSOFTûCALLûPROTECTIONûFORûSIXû
equivalent second-lien term loan. months.
Gas station operator UNITED PACIFIC revised 0RICINGûFORûTHEûlRST
LIENûTERMûLOANûCLEAREDû !IMBRIDGEûALSOûRAISEDû53MûINûSECOND

THEûTERMSûONûAû53Mû4ERMû,OANû" ATûBPûOVERû,IBORûWITHûAûûmOORûANDûû lien debt and increased its revolving credit
The seven-year TLB priced at 400bp over OID. The spread cleared at the wide end of FACILITYûBYû53MûTOû53M
Libor, the tight end of the 400bp-425bp guidance, while the discount priced Aimbridge is acquiring Interstate for
GUIDANCEûRANGEû4HEû,IBORûmOORûWASûALSOû narrowed by 50bp. APPROXIMATELYû53MûACCORDINGûTOû
revised to 1% from 0%, while the 99 OID and Price guidance was set at a range 400bp- Moody’s. In addition to the debt,
ûSOFTûCALLûPROTECTIONûFORûSIXûMONTHSûWEREû BPûOVERû,IBORûWITHûAûûmOORûANDûAûû Aimbridge’s private equity sponsor Advent
unchanged. OID. )NTERNATIONALûMADEûAû53MûEQUITYû
The TLB will amortise at 1% per year and is There is also a 25bp stepdown when the contribution to support the purchase.
GOVERNEDûBYûAûlNANCIALûCOVENANTûTHATû COMPANYSûlRST
LIENûLEVERAGEûRATIOûMOVESûAû The combined company’s debt to Ebitda is
REQUIRESû5NITEDû0ACIlCûTOûMAINTAINûAûlRST
LIENû half turn inside of closing leverage. EXPECTEDûTOûBEûROUGHLYûûTIMESûATûTHEûENDû
net leverage ratio of no more than 5.5 times. MFN protection was also revised to 50bp OFûûANDûISûEXPECTEDûTOûDECREASEûTOûLESSû
4HEû53MûlNANCINGûINCLUDESûAû for life versus earlier guidance of 75bp with than 6.0 times within 12-18 months of the
53MûDELAYED
DRAWûTERMûLOAN AûSIXûMONTHûSUNSETûPROVISION acquisition closing, Moody’s said.
Ticking fees on the DDTL have been GTCR and Golden Gate Capital are !IMBRIDGEûISûRATEDû""ûANDûTHEûlRST
LIENû
amended to 0% through days 0-30, 50% of recapitalising Cole-Parmer alongside CEO debt is rated B1/B.
Bernd Brust and the Cole-Parmer Prescription drug price comparison and
US LEVERAGED LOANS management team. coupon platform GOODRX has closed a
BOOKRUNNERS: 1/1/2019 TO DATE As part of the transaction, GTCR will acquire 53MûINCREMENTALûTERMûLOAN
Managing No of Total Share a majority stake in Cole-Parmer, while Golden Final terms were 300bp over Libor with a
bank or group issues US$(m) (%) Gate Capital and management will retain a ûmOORûû/)$ûANDûûSOFTûCALLû
1 BofA 450 82,066.66 11.4 SIGNIlCANTûMINORITYûSTAKEûINûTHEûBUSINESS PROTECTIONûFORûSIXûMONTHS
2 Wells Fargo 343 70,450.47 9.8 Pricing also includes a 25bp step-down
3 JP Morgan 409 69,909.00 9.7 CLARIVATE COMPLETES TERM LOAN ONCEûlRST
LIENûNETûLEVERAGEûREACHESûû
4 Citigroup 193 35,755.80 5.0 times.
5 Barclays 175 33,678.77 4.7 Information provider CLARIVATE ANALYTICS has The incremental debt will be fungible
6 Goldman Sachs 172 30,179.24 4.2 SETûlNALûTERMSûONûAû53MûTERMûLOAN WITHû'OOD2XSûTERMûLOANû"ûTHATûMATURESûINû
7 Credit Suisse 144 26,904.42 3.7 The loan, which had originally been October 2025.
8 Deutsche Bank 155 25,668.07 3.6 GUIDEDûATû53BNûPRICEDûATûBPûOVERû 'OOD2XûISûALSOûEXTENDINGûTHEûMATURITYûONû
9 RBC 119 20,936.76 2.9 Libor with a step-down to 300bp when total ITSû53MûREVOLVINGûCREDITûFACILITYûBYûONEû
10 PNC Financial 144 20,725.36 2.9 net leverage is at 4.5 times. It was issued year to 2024.
Total 1,752 720,392.07 with a 99.75 OID. Goldman Sachs, Barclays, Bank of America,
Excluding Project Finance. The seven-year term loan B was originally Credit Suisse, KKR, Citizens and SunTrust are
Source: Refinitiv SDC code: P2 offered at 325bp over Libor with a 99 OID. arranging the transaction.

International Financing Review November 2 2019 73

 Axel Springer overcomes hurdles
to close loan
„ EUROPE KKR nets €900m to buy minority stake in German publisher
A €900m loan backing KKR’s acquisition of a
44% stake in publicly-listed German publisher
AXEL SPRINGER has closed, overcoming a number
of hurdles including investor reservations
regarding security over the asset and a large
number of CLOs that were prevented from
participating after the deal was unable to secure
a Moody’s rating.
A €725m Term Loan B closed to pay 500bp,
from initial guidance of 475bp-500bp with a
99.5 OID, after the loan attracted significant
interest from credit funds and banks.
The loan was placed in a holdco structure,
after the private equity firm only managed to
secure a minority stake in Axel Springer. Moody’s
was unable to give a rating as it cannot rate a
holdco that owns a minority sharing in an opco,
when there is a single dividend stream, sources
said.
This was a blow during syndication as it
prevented a large number of CLOs, dependant
on a Moody’s rating, going into the deal.
However, some of the newer CLOs could invest
as the deal was assigned a Single B rating from
Fitch and S&P.
For those investors that were able to play,
they needed to get comfortable with having an
opco/holdco structure in place, when there is
only a minority stake in the operating company.
A financing like this depends on dividends being
streamed out an operating company to pay
interest on a loan in a holding company.
The financing was offered with a €125m revolving
credit facility that can be used to cover around 3.25
years of interest payments. It was initially launched
at €175m and could still reach this level.
“The large revolver is an insurance policy at
the holdco if there is a scenario where dividends
don’t come in. It is an additional source of liquidity
to give investors further piece of mind and helps
them sleep better at night,” a senior banker said.
The financing was also offered with a debt
incurrence covenant at the opco level, that the
opco won’t relever above 4 times.
INVESTOR-FRIENDLY
To make the loan more attractive, an upward
margin ratchet was added during the
syndication process on the Term Loan B. The
margin will step up to 550bp when leverage is
greater than 5.2 times on a look through basis,
to 575bp, when leverage is greater than 5.7
times and to 600bp, when leveraged is more
than 6.2 times.
A ticking fee was also added, which pays 50%
of the margin after 45 days and 100% of the
margin after 90 days.
Most investors that went into the deal were
attracted by the prospect of KKR taking the
company private in the future and the subsequent
relocation of the financing to the opco level. KKR
also added some weight to the deal, as one of the
larger, more well-known players in the market.
“The quality of the company, the potential
push down of the loan to the opco in due course,
and the KKR name certainly helped gained
momentum,” a second senior banker said.
KKR, UniCredit, Barclays, BNP Paribas, Credit
Agricole, Helaba, LBBW, JP Morgan and Societe
Generale led the financing.
KKR, acting in concert with main shareholders
Friede Springer and Doepfner, tendered to buy
out minorities for €63 a share, putting an equity
value on Springer €6.8bn.
Claire Ruckin

Proceeds, along with cash on hand, will be 6ERMAATûWHICHûEMPLOYSûOVERûû Bank of America is the sole physical
USEDûTOûRElNANCEûTHEûCOMPANYSûSECOND
LIENû PEOPLEûISûEXPECTEDûTOûGENERATEûCLOSEûTOû bookrunner on the dollar portion and joint
term loan. €300m of sales in 2019. physical bookrunner on the euro portion
#ORPORATEûANDûlRST
LIENûRATINGSûAREû"" 6ERMAATûPROVIDESûOUTSOURCEDûCATERINGû alongside BNP Paribas and HSBC.
services to markets including corporates, BBVA and JP Morgan are passive
museums, hospitals and travel hubs. It bookrunners on the deal.
EUROPE/MIDDLE EAST/ operates more than 350 food and beverage
AFRICA outlets across the Netherlands, including MASMOVIL RETURNS TO REPRICE
restaurants, cafes and canteens, and has a
LENDERS LINE UP ON VERMAAT growing presence in Germany. Spanish telecoms company MASMOVIL has
launched a €1.45bn term loan repricing,
Five lenders have joined SMBC on a GRIFOLS EYES REFINANCING taking advantage of strong market demand.
LEVERAGEDûLOANûlNANCINGûBACKINGûPRIVATEû The deal is guided at around 275bp over
EQUITYûlRMû"RIDGEPOINTSûACQUISITIONûOFû Spanish pharmaceutical company GRIFOLS Euribor, plus or minus 12.5bp. It includes a
Dutch hospitality services provider VERMAAT. HASûSETûPRICEûGUIDANCEûONû53BN
BPûCONSENTûFEEûHASûAûûmOORûANDûTHEû/)$û
Goldman Sachs, Bank of Ireland, Rabobank and equivalent of loans that form part of a is guided at 99.75.
ABN AMRO have been mandated as physical 53BNûDUAL
CURRENCYûRElNANCINGû 4HEûREPRICINGûCOMESûJUSTûlVEûMONTHSû
BOOKRUNNERSûONûTHEûlNANCINGûANDûInvestec as package. after Masmovil secured its €1.45bn seven-
bookrunner, alongside SMBC, which is !û53BNûTERMûLOANû"ûISûGUIDEDûATûBPû year covenant-lite term loan B in May. The
leading the deal as global coordinator. OVERû,IBORûWITHûAûûmOORûANDûANû
û RElNANCINGûPAIDûBPûOVERû%URIBORûWITHûû
4HEûBANKSûAREûEXPECTEDûTOûLAUNCHû
EQUIVALENTûEURO
mOORûANDûAûû/)$
syndication of a senior loan to investors in
mid-November.
A second-lien loan that was underwritten
with a margin ratchet based on
by SMBC has been pre-placed with funds.
Bridgepoint agreed in October to buy
/)$ûWHILEûAû53BN
denominated TLB is guided at 225bp-250bp
OVERû%URIBORûWITHûAûûmOORûANDûANûû/)$
4HEûTRANSACTIONûALSOûINCLUDESû53BN
equivalent euro senior secured notes.
The loans will mature in eight years and
That deal included €280m of capital
EXPENDITUREûANDûREVOLVINGûCREDITûFACILITIESû
environmental, social and governance ratings.
BNP Paribas and Goldman Sachs are global
6ERMAATûFROMû0ARTNERSû'ROUPûWHICHû INCLUDEûûSOFTûCALLûPROTECTIONûFORûSIXû coordinators and physical bookrunners on
acquired the company in 2015. Partners months. the new deal, alongside with JP Morgan as
Group will remain a minority investor. .OûlNANCIALûCOVENANTSûAREûINCLUDED global coordinator.

74 International Financing Review November 2 2019

 LOANS LEVERAGED LOANS

The deal will reset 101 soft call protection Banca IMI, Citi, Mediobanca and UBS are the European distribution arm of Irish
FORûSIXûMONTHS bookrunners. building materials supplier CRH in a bid to
Corporate ratings are BB-/B1/BB-. The deal also includes a €130m revolving GAINûSUFlCIENTûINVESTORûSUPPORT
credit facility. The seven-year, covenant-lite loan is now
ARCHROMA SEEKS ADD-ON !FlDEAûOPERATESûûCENTRESûACROSSûû ATûBPûOVERû%URIBORûWITHûAûûmOORûFROMû
countries. INITIALûGUIDANCEûOFûBPnBPûWITHûAûû
Swiss chemicals company ARCHROMA has mOORû4HEû/)$ûHASûALSOûWIDENEDûTOûûFROMû
LAUNCHEDûAû53M
EQUIVALENTûADD
ONûLOANû BELRON WRAPS DIVI RECAP LOAN 99.5 at launch.
to partially repay a second-lien loan. Soft call protection of 101 has been
The covenant-lite add-on loan, which is 5+ûVEHICLEûGLASSûREPAIRûANDûREPLACEMENTû REVISEDûTOûûMONTHSûFROMûSIXûMONTHS
GUIDEDûATûBPûOVERû%URIBORûWITHûAûûmOORû group BELRON has allocated its loans that will Investors were concerned about the
ANDûAûû/)$ûISûFUNGIBLEûTOûTHEûEXISTINGû lNANCEûAûDIVIDENDûRECAP DISTRIBUTIONûARMSûCREDITûPROlLEûANDûITSû
term loan B. The deal comprises a €100m add-on EXPOSUREûTOûTHEûCYCLICALûCONSTRUCTIONûSECTORû
The deal includes a 25bp consent fee and TRANCHEûANDûAû53MûTERMûLOAN which led to the hike in pricing.
ûCALLûPROTECTIONûFORûSIXûMONTHS The margin on the fungible euro- “The issue with the credit is it’s a very low
HSBC is sole physical bookrunner, denominated loan, which will mature in margin business, and we are concerned
alongside Bank of America as bookrunner. November 2024, is 275bp over Euribor, ABOUTûTHEûBUSINESSûPROlLEûRISKvûSAIDûANû
4HEûlRMûLASTûTAPPEDûTHEûLOANûMARKETûINû SUBJECTûTOûANûEXISTINGûMARGINûRATCHETûWITHûAû investor who declined the deal at launch.
ûWHENûITûSECUREDûAû53M
EQUIVALENTû ûmOORû4HEû/)$ûPRICEDûATû h4HENûTHEREûISûITSûWAREHOUSEûCONSOLIDATIONûnû
lRST
LIENûTERMûLOANûTOûPAYûDOWNûDEBTû4HEû There is a 12.5bp consent fee and the deal we just don’t see a massive synergy there.
SEVEN
YEARûDEALûINCLUDEDûAû53M
INCLUDESûûSOFTûCALLûFORûSIXûMONTHS And we are concerned about the sector, it’s
equivalent euro-denominated term loan and The dollar-denominated Term Loan B, not appealing to us.”
Aû53MûDOLLAR
DENOMINATEDûLOANû4HEû which matures in November 2026, pays The high opening leverage of the business
COMPANYûALSOûPRE
PLACEDûAû53MûEIGHT
BPûOVERû,IBORûWITHûAûûmOORûANDûAûû also put some investors off.
year second-lien term loan. OID. It was guided at 250bp over Libor with According to Moody’s, which assigned a
The euro-denominated term loan priced at a 99 OID. B2 corporate family rating on the
BPûOVERû%URIBORûWITHûAûûmOORûANDûAû Bank of America and JP Morgan led the DISTRIBUTIONûARMûTHEûlNANCIALûLEVERAGEûISû
discount of 99.75, while the dollar-denominated
term loan was issued at 425bp over Libor with a
ûmOORûANDûAûDISCOUNTûOFû
TAGHLEEF LAUNCHES €340m REFI
0ACKAGINGûlLMSûCOMPANYûTAGHLEEF INDUSTRIES
has launched a €340m Term Loan B to
AMENDûANDûEXTENDûANûEXISTINGûEURO
management hold the remaining 60%.
denominated term loan.
The loan, which will mature November
2026, is guided at 275bp over Euribor with a
ûmOORûANDûANû/)$ûOFû
PAR INSPIRED EDUCATION CLOSES
The deal includes 101 soft call protection
FORûSIXûMONTHS
Corporate and issuer ratings are Ba3/BB-.
Credit Suisse is physical bookrunner.
lNANCINGûONûTHEûDOLLARSûANDûTHEûEUROSû around 6.5 times based on Moody’s adjusted
respectively, alongside ING and BNP Paribas gross debt and Ebitda.
as bookrunners and arrangers. Barclays, Fifth 4HATSûHIGHERûTHANûTHEûCOMPANYSûlGURESû
Third Bank, Goldman Sachs, KBC and Citizens According to marketing materials, net
Bank are bookrunners. senior leverage on the deal is 4.5 times and
Clayton Dubilier & Rice completed the net total leverage is 5.7 times, based on the
acquisition of a 40% stake in Belron in 2018. last twelve months pro forma adjusted
Belgian peer D’Ieteren and Belron’s Ebitda of €214m.
Apart from the Term Loan B, there is also
Corporate family and facility ratings are a €248m, eight-year second-lien loan. A
Ba3/BB. €180m revolving credit facility rounds off
THEûlNANCING
Goldman Sachs is left lead, with BNP Paribas,
Fortis, Bank of America, Credit Suisse, MUFG,
Private school chain INSPIRED EDUCATION has NatWest Markets and SMBC as bookrunners.
completed a €150m add-on loan. The unit, which provides cement, asphalt
The margin on the covenant-lite loan and other building materials, operates
4HEûlRMûLASTûTAPPEDûTHEûLOANûMARKETûINû lNALISEDûATûBPûOVERû%URIBORûFROMûBPû under 18 brands across Europe. It generated
September 2018 when it secured a €55m
add-on at 300bp over Euribor with a 0%
mOORû4HATûDEALûWASûISSUEDûATûPARû
4HEûADD
ONûWASûTOûlNANCEûTHEûlRMSû
GUIDANCEûWITHûAûûmOORûANDûATûPARû4HEû/)$û 2018 pro forma revenues of €3.7bn and 2018
was guided at 99.75. pro forma Ebitda of €173m.
The €465m term loan B was also repriced
at 325bp over Euribor, down from pricing of EUROPEAN LEVERAGED LOANS
ACQUISITIONûOFû"IOlLMûWHICHûMANUFACTURESû 350bp, after a positive market response. BOOKRUNNERS: 1/1/2019 TO DATE
BIAXIALLYûORIENTEDûPOLYPROPYLENEûlLMSûANDû The add-on is fungible with the term loan Managing No of Total Share
is based in Bogota, Colombia. B, which is due in May 2026. bank or group issues US$(m) (%)
HSBC and Morgan Stanley were 1 BNP Paribas 55 8,733.29 8.3
AFFIDEA SEALS €450m TLB bookrunners, with Wilmington as agent. 2 Goldman Sachs 37 8,004.60 7.6
Proceeds are for general corporate 3 JP Morgan 36 7,401.74 7.0
European diagnostic imaging and cancer purposes, including the acquisition of 4 Credit Agricole 38 7,057.97 6.7
care company AFFIDEA has closed a €450m INTERNATIONALûSCHOOLSûCOMPANYû+INGSû'ROUPû 5 Deutsche Bank 39 5,885.41 5.6
seven-year loan via physical bookrunners and Reddam House Australia. 6 Barclays 33 5,285.56 5.0
Goldman Sachs and UniCredit. Inspired Education operates 53 schools 7 Natixis 33 5,143.73 4.9
The covenant-lite term loan B priced at ACROSSûlVEûCONTINENTS 8 Credit Suisse 24 4,475.65 4.2
BPûOVERû%URIBORûWITHûAûûmOORûANDûAûû 9 BofA 20 3,977.96 3.8
OID. It was guided at 400bp-425bp over with a CRH UNIT WIDENS PRICING 10 SG 19 3,739.19 3.5
û/)$û4HEREûISûûSOFTûCALLûFORûSIXûMONTHS Total 174 105,619.92
0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEû Pricing has been widened on a €965m Term Excluding project finance. Western Europe only included.

facilities due 2021-2022. Loan B backing Blackstone’s acquisition of Source: Refinitiv SDC code: P10

International Financing Review November 2 2019 75

 CRH, which employs about 90,000 people
in more than 30 countries, said it would use
the proceeds from the sale for further
acquisitions and for its ongoing share
CLO managers under
buyback programme.
pressure to ramp up efforts
ASIA-PACIFIC on ESG investing
ESSEL BUYOUT LOAN CLOSES „ EUROPE Hermes is aiming to raise sustainability awareness

Private equity giant Blackstone Group has A number of investors in CLOs are holding talks A total of six ESG-compliant CLO funds have
WRAPPEDûUPûAû53MûlVE
YEARûLOANû with CLO managers over how environmental, been issued in Europe and at least two in the
for its leveraged buyout of India’s ESSEL social and governance issues factor into their US so far, by avoid investing in sectors including
PROPACKûWITHûAûDOZENûLENDERSûJOININGûINû leveraged loan portfolio decisions. tobacco, gambling, pornography, weapons and
syndication. CLO fund investors, such as ESG-focused hazardous chemicals.
Goldman Sachs, Investec, Standard Chartered Hermes Investment Management, are However, leveraged loans from these sectors
and UBS were the mandated lead arrangers, hoping that CLO mangers will increase their are scarce, so the investment restrictions do
bookrunners and underwriters of the engagement with leveraged loan borrowers or not have significant credit impact on the CLOs
lNANCINGûWHILEûBarclays and Nomura joined
the deal as MLAs and underwriters.
Mandated lead arrangers are MUFG, Intesa
Sanpaolo, Korea Development Bank, Sumitomo
Mitsui Trust Bank, Siemens Bank, Woori Bank,
Taipei Fubon Commercial Bank, Bank Sinopac, KGI
Bank and E.Sun Commercial Bank.
The loan paid all-in pricing in the low to
mid-300s and has an average life of 4.9
years.
Epsilon Bidco, the acquiring entity, is the
their private equity sponsors on ESG matters.
Hermes is aiming to raise sustainability
awareness by having in-depth talks with CLO
managers in pitch meetings.
“We are engaging with CLO managers on ESG
and how they factor it in to each loan investment
decision, rather than simply asking them about
their ESG policy. If a loan is scoring poorly on
certain ESG metrics, we want to understand what
the manager is doing to address this and what
conversations they are having with the sponsor,”
and their performance is comparable to peers,
according to Moody’s.
CLO managers argue it is difficult to measure
ESG risk in leveraged loans due to the absence of
ESG-related information on the issuers.
“We barely get enough transparency from
the company and private equity sponsors. When
you call the CFO and ask ‘Oh by the way, what is
your recycling policy?’ The guy will hang up the
phone,” said a CLO manager.
For well-resourced CLO managers, they might
BORROWERûOFûTHEû,"/ûLOANûWHICHûlNANCESû
Blackstone’s purchase of a 75% stake in Essel
Propack.
India-listed shares of the target form the
collateral for the loan, which represents a
leverage of 3.9 times.
Essel Propack manufactures collapsible
laminated and plastic tubes.
EVOLUTION WELLNESS NETS
US$200m
EVOLUTION WELLNESSûHASûCLOSEDûAû53Mû
FOUR
YEARûMULTI
TRANCHEûlNANCINGû and earning enhancements are the priority
with two other lenders joining in
syndication.
Lead left Standard Chartered Bank and
Kiatnakin Bank were the mandated lead
arrangers and bookrunners of the deal,
said Andrew Lennox, ABS portfolio manager at
Hermes Investment Management.
“There is an increasing amount of data that
supports the positive impact of engagement on
investment performance, but we believe the CLO
space is lagging.”
The ultimate goal is to see a wave of CLO
managers that will ramp up efforts to hold
issuers or sponsors to account on their ESG
responsibilities, Lennox said.
The majority of private equity firms are not
paying attention to ESG matters in their portfolio
companies because immediate cost cuttings
the CLO managers will struggle to show investors
following a buyout, rather than long-term ESG
improvement planning.
LACK OF DATA
To address growing demands from CLO investors
subscribe ESG data from several providers such
as MSCI and Sustainalytics instead of doing by
themselves, but still the data is limited in the
leveraged loan market.
MSCI, which provides ESG ratings for 8,100
equity issuers and 5,000 fixed income issuers,
admitted the challenges of leveraged loan
coverage.
“Some leveraged loan issuers are very small,
private companies. Nobody has that data,”
said Elisabeth Seep, head of fixed income ESG
Products at MSCI.
Without full ESG coverage on the leveraged loans,
how well they integrate ESG in their investments.
“If we don’t rate all of the underlying
collateral, then we won’t have access to sufficient
information to form an overall view on the
transaction,” said Andrew Steel, global head of
WHICHûCOMPRISESûAû53MûTERMûLOANûAû over ESG issues, some CLO managers have sustainable finance at Fitch Ratings.
53MûREVOLVINGûCREDITûFACILITYûANDûAû adopted a screening approach in their funds. Prudence Ho
53MûCAPITALûEXPENDITUREûTRANCHE
HSBC, also the facility agent, joined as an
MLA prior to launch into syndication. The CAPITALûEXPENDITUREûLIMITSûTHATûAREû lNANCINGûINû*ULYûûWHICHûCOMPRISEDû
three banks pre-funded the transaction after undisclosed. Aû53MûTERMûLOANûAû53M
EQUIVALENTû
signing it on June 10. Proceeds will be used primarily to TERMûlNANCINGûDENOMINATEDûINû4HAIû
Sumitomo Mitsui Trust Bank and NEC Capital RElNANCEûAû53MûlVE
YEARûFACILITYûTHATû BAHTSûAû53MûCAPITALûEXPENDITUREû
Solutions came in as lead arrangers. backed the creation of Evolution Wellness PIECEûANDûAû53MûREVOLVINGûCREDITû
The secured deal pays an interest margin following the merger between Fitness First facility.
of 375bp over Libor. and Celebrity Fitness First in 2017. The +UALAû,UMPUR
BASEDû.AVISû#APITALû
Financial covenants require the borrower remainder of the latest loan will be used for Partners and Los Angeles-headquartered
to maintain a total net leverage ratio of 3 CAPITALûEXPENDITUREûANDûGENERALûCORPORATEû Oaktree Capital Management own 75% and
times that steps down; interest coverage purposes. 25% of Evolution Wellness, respectively. The
ratio of 5 times that steps up; a debt service (3"#û+IATNAKINû"ANKûANDû3TAN#HARTû COMPANYûHASûALMOSTûûlTNESSûCLUBSûACROSSû
coverage ratio of 1.2 times; as well as certain were the lenders on the previous Asia.

76 International Financing Review November 2 2019


slashed as coal companies have struggled
due to growing use of renewables and cheap
RESTRUCTURING natural gas.
%IGHTûOTHERûCOALûCOMPANIESûHAVEûlLEDûFORû
bankruptcy over the last two years as
UNITED STATES natural gas has taken over as the primary
LOANS LEVERAGED LOANS
shares it does not already own in the
company.
#ARPETRIGHTûSAIDûITûNEEDSûAPPROXIMATELYû
£80m to repay its debt facilities, meet its
ongoing working capital requirements and
provide it with growth capital.
FUELûFORû53ûPOWERûPLANTSûWHILEûCOALSûSHAREû “Meditor has indicated that the possible
MURRAY ENERGY FILES FOR BANKRUPTCY of generation has collapsed. offer would be at 5p per share, paid in cash.
#OALSûSHAREûOFû53ûPOWERûGENERATIONûISû )FûTHEûPOSSIBLEûOFFERûISûMADEûûITûISûEXPECTEDû
MURRAY ENERGY, one of the largest privately EXPECTEDûTOûFALLûTOûûINûûCOMPAREDû Meditor will convert the majority of the
HELDû53ûCOALûMINERSûWHOSEûFOUNDERûISûANû
ally of President Donald Trump, became the
LATESTûINûAûSTRINGûOFûCOALûCOMPANIESûTOûlLEûFORû
bankruptcy on Tuesday as generators shift
to cleaner burning natural gas and
renewable energy.
As part of a restructuring, founder Robert
Murray, a Trump ally and climate change
with roughly 25% this year. As recently as
2003, coal accounted for half of the
country’s electricity generation, according
TOûTHEû53û%NERGYû)NFORMATIONû
Administration.
Robert Moore will take over as president
and CEO of the company while Murray will
head up the board of directors.
outstanding debt under the debt facilities
into equity and provide the company with
additional capital,” Carpetright said.
In September Meditor acquired
Carpetright’s £40.7m revolving credit
FACILITYûFROMû.AT7ESTûANDû!)"ûTHATûEXPIRESû
on December 31 2019.
The company’s overdraft facilities
DENIERûWILLûSTEPûDOWNûASûCHIEFûEXECUTIVEû PROVIDEDûBYû.AT7ESTûANDû5LSTERû"ANKûBUTû
and a lender group will take on more than
ûOFûABOUTû53BNûINûCLAIMS
The company intends to continue
operating during the Chapter 11
reorganisation with cash on hand and access
TOûAû53Mû$)0ûlNANCINGûFROMûLENDERS
The bankruptcy comes even after the
Trump administration weakened or
ELIMINATEDûDOZENSûOFûENVIRONMENTALû
regulations that Murray and other
EXECUTIVESûHADûCALLEDûBURDENSOMEûFORûTHEû
EUROPE/MIDDLE EAST/
AFRICA
CARPETRIGHT PLANS DEBT PAYDOWN
5+ûmOORINGûRETAILERûCARPETRIGHT is in
discussions to sell itself to its largest
shareholder Meditor European Master Fund
in order to pay down debt and secure its
future.
FUNDEDûBYû-EDITORûAREûALSOûDUEûTOûEXPIREûONû
December 31 2019.
A £25.7m unsecured loan provided to the
company by Meditor on May 11 2018 is due
for repayment on July 31 2020.
Carpetright said its statutory net debt as
at October 26 2019 was around £27m and is
EXPECTEDûTOûRISEûTOûBETWEENûaMûTOûaMû
in December 2019.
Carpetright is one in a long list of
household name retailers which have run
coal industry.
Early in the Trump presidency, Murray
presented the administration with a wish
list of environmental regulations he wanted
Interpipe completes drawn out restructuring
„ UKRAINE Process began in 2013
Ukrainian steel company INTERPIPE has finally
completed a debt restructuring of its bonds and
loans, which began in late 2013.
All the creditors had a portion of their debt
written off as part of the restructuring deal,
which includes a reduction, amendment and
restatement of the debt as a series of new notes
and loan facilities.
Interpipe’s existing US$200m 10.25% secured
notes that were due in 2017 have been cancelled
in exchange for a US$82m portion of new
US$309.1m 10.25% guaranteed notes due in
2024 and 3,054 units of performance securities.
The total size of Interpipe’s post restructuring
syndicated and bilateral facilities is not clear, but
they include a US$334m tranche of a term loan
that matured in November last year, according
to LPC data.
Part of the existing syndicated credit
facilities were written down and refinanced with
lenders. In return they were issued the balance
(US$227.1m) of the new notes. Another part
of the existing syndicated credit facilities were
also written down, amended and restated as
Meditor, which currently owns around
29.99% of Carpetright’s share capital, is in
talks with the group to convert its debt into
equity as it looks to purchase the remaining
a US$45.8m new senior term loan facility due
December 31 2020.
Creditors will also get a portion of a one-off
US$103m cash payment – a restructuring fee –
which is based on accrued and unpaid interest
on the pre-restructured debt, according to one
source close to the situation.
Separately, and as a condition to the
restructuring, the group’s existing working
capital debt facilities have also been written
down and the balance refinanced into two
restructured working capital facilities totalling
US$45m, also due December 31 2020.
The performance securities will give lenders
and bondholders a proportion of the company’s
Ebitda, “effectively giving them an upside of the
business going forward, like an insurance policy,”
the source said.
It would also give them a portion of the proceeds
of any disposals which are made, although none
are planned at present, the source said.
The portion of this Ebitda or disposal upside
will decrease once the debt is refinanced.
In addition, Interpipe’s existing shareholders
International Financing Review November 2 2019
INTOûTRADINGûDIFlCULTIESûINûTHEûLASTûYEARûASûAû
result of a fall in consumer demand powered
by a move to online shopping, high rents
ANDûOVERûEXPANSIONûINûTHEûLASTûDECADE
have contributed US$50m of extra cash equity
to the group and provided a further US$20m
stand-by equity commitment to help its post
restructuring operational performance.
Interpipe has been impacted by the fall in
oil prices as well as political tensions between
Russia and the Ukraine.
Between 2012 to 2016, the group’s Ebitda
declined by 85%, leading to pressure on the
group’s debt repayment ability. In 2013 it
breached certain financial covenants and missed
scheduled principal repayments of US$106m.
Between 2014 and 2017 it failed to make
US$545m of the scheduled principal repayments.
However, Ebitda has since recovered, with a
158% increase in 2017 from 2016.
Interpipe is the largest vertically integrated
manufacturer of steel billets, steel pipes and
railway wheels in Ukraine. All of its manufacturing
operations are located in Ukraine, where it
operates four production sites and one scrap-
processing company. It supplies its products to
customers in more than 70 countries globally.
Sandrine Bradley
77
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 EQUITIES
Australia  China  India  Malaysia  Thailand  Austria  Germany  Spain 
UK  United States  Brazil  Structured Equity 

„ FRONT STORY SINGAPORE

S-REIT issuance hits six-year high

Demand for yield lifts capital raising close to 2013 record
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Winnebago opts for US$270m CB deal

RV maker had considered high-yield
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ATû53ûCOMPAREDûWITHûTHEû53û 4HEûûCOUPONû7INNEBAGOûACHIEVEDûONû Stephen Lacey

International Financing Review November 2 2019 79

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OPTIONûTOûLISTûASûEARLYûASû.OVEMBERûSAIDû Managing No of Total Share Managing No of Total Share
PEOPLEûFAMILIARûWITHûTHEûSITUATION bank or group issues US$(m) (%) bank or group issues US$(m) (%)
4HEû#HINESEûE
COMMERCEûGIANTûHASûBEENû 1 Morgan Stanley 73 11,551.03 7.8 1 Goldman Sachs 44 9,198.06 7.0
EVALUATINGûMARKETûCONDITIONSûANDûTHEû 2 Goldman Sachs 49 10,250.44 6.9 2 Morgan Stanley 55 9,036.05 6.9
POLITICALûSITUATIONûINû(ONGû+ONGûAFTERû 3 Citic 50 7,349.44 4.9 3 Citic 50 7,349.44 5.6
DELAYINGûTHEûLAUNCHûOFûTHEû53BNû 4 CICC 50 7,309.88 4.9 4 CICC 50 7,309.88 5.6
SECONDARYûLISTINGûINû!UGUST 5 UBS 60 7,307.68 4.9 5 UBS 58 7,160.66 5.4
!û.OVEMBERûLISTINGûISûONEûOFûTHEûOPTIONSû 6 JP Morgan 44 7,236.47 4.9 6 JP Morgan 43 6,439.36 4.9
THEûCOMPANYûISûCONSIDERINGûBUTûNOûDECISIONû 7 BofA 29 6,154.39 4.1 7 Citigroup 50 5,354.19 4.1
HASûBEENûMADEûASûYETûSAIDûTHEûPEOPLE 8 Citigroup 53 5,528.43 3.7 8 BofA 25 5,299.19 4.0
h)TûDEPENDSûONûHOWûFASTûTHEûCOMPANYû 9 Credit Suisse 49 4,605.06 3.1 9 Credit Suisse 47 4,327.14 3.3
WANTSûTOûDOûITûû4HEREûAREûEXTERNALûFACTORSûTOû 10 Nomura 50 4,520.78 3.0 10 HSBC 21 3,595.83 2.7
CONSIDERûANDûINTERNALûPROCEDURESûTOûGOû Total 1,696 148,848.73 Total 1,573 131,465.76
THROUGHûWHICHûCOULDûBRINGûUNCERTAINTYvû Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues
SAIDûONEûOFûTHEûPEOPLE Source: Refinitiv SDC code: C4a1 Source: Refinitiv SDC code: C4a2

80 International Financing Review November 2 2019

 EQUITIES ASIA-PACIFIC

TRANCHEûHAVEûLOCK UPûPERIODSûOFûûMONTHSû EMEA COMMON STOCK ISSUER LEGAL ADVISERS EMEA COMMON STOCK MANAGER LEGAL ADVISERS
ANDûSIXûMONTHSûRESPECTIVELY 1/1/2019 TO DATE 1/1/2019 TO DATE
03"#ûANNOUNCEDûITSû3HANGHAIûLISTINGûPLANû No of Total Share No of Total Share
INûû4HEû#HINAû"ANKINGûANDû)NSURANCEû Legal adviser issues US$(m) (%) Legal adviser issues US$(m) (%)
2EGULATORYû#OMMISSIONûlNALLYûAPPROVEDû 1 Freshfields Bruckhaus 9 6,809.3 7.7 1 Linklaters 13 6,410.3 7.3
THEûDEALûINû*UNE 2 Linklaters 8 4,271.9 4.8 2 Latham & Watkins 11 5,027.8 5.7
4HEûISSUERûWASûGIVENûlNALûAPPROVALûFORûITSû 3 Latham & Watkins 15 3,141.8 3.6 3 Allen & Overy 6 4,330.8 4.9
)0/ûONû/CTOBERûûONLYûAûDAYûAFTERûITûCLEAREDû 4 Clifford Chance 4 3,009.9 3.4 4 Clifford Chance 5 4,315.7 4.9
AûREGULATORYûHEARINGûATûTHEû#HINAû3ECURITIESû 5 Allen & Overy 6 2,808.9 3.2 5 Cleary Gottlieb Steen & Hamilton 6 2,293.3 2.6
2EGULATORYû#OMMISSIONû.ORMALLYûISSUERSû 6 Kirkland & Ellis 3 2,729.4 3.1 6 White & Case 11 2,115.5 2.4
HAVEûTOûWAITûWEEKSûORûEVENûMONTHSûAFTERû 7 Davis Polk & Wardwell 4 2,329.0 2.6 7 Freshfields Bruckhaus Deringer 7 1,813.4 2.1
CLEARINGûAûLISTINGûHEARINGûTOûRECEIVEûWRITTENû 8 Advokatfirman Vinge 9 1,810.0 2.1 8 Lenz & Staehelin 1 1,526.1 1.7
APPROVAL 9 Cooley 10 1,634.4 1.9 9 Homburger 2 765.5 0.9
03"#ûRAISEDû(+BNû53BN ûFROMû =10 BianchiSchwald 1 1,526.1 1.7 10 Ashurst 2 749.4 0.9
ITSû(ONGû+ONGû)0/ûINû =10 Niederer Kraft & Frey 1 1,526.1 1.7 Total 693 88,215.9
CICC and China Post Securities AREûTHEûJOINTû Total 693 88,215.9 Source: Refinitiv SDC code: AX4

SPONSORSûANDûJOINTûBOOKRUNNERSûWITHûUBS Source: Refinitiv SDC code: AX3

Securities and Citic Securities

CCB InternationalûChina Merchants Securities REVENUESûOFû2MBBNûANDûûSTORESû
CHINA MERCHANTS’ PLAN APPROVED and JP Morgan AREûSPONSORS WORLDWIDE
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82 International Financing Review November 2 2019

 EQUITIES ASIA-PACIFIC

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International Financing Review November 2 2019 83

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84 International Financing Review November 2 2019

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International Financing Review November 2 2019 85

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7 UBS 25 3,813.56 4.3 LACKûOFûINDEXûELIGIBILITYûANDûCONCERNSûOVERû 4UESDAYûATûõûPERûSHAREûANDûFELLûAROUNDû
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9 Jefferies 32 2,866.19 3.2 WITHûEMERGINGûMARKETûISSUERSûTHATûOPTûFORû &RIDAYûATûAMûINû,ONDONûTHEYûWEREûAROUNDû
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86 International Financing Review November 2 2019

 EQUITIES EMEA

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International Financing Review November 2 2019 87

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US EQUITIES 3ILVERGATEû#APITAL ûNOTûTHEûHIGHESTûQUALITYû GLANDSûTHATûAREûRESPONSIBLEûFORûPRODUCINGû
BOOKRUNNERS: 1/1/2019 TO DATE DEALûMIXûTHISûYEARûBUTûCONSISTENTûWITHûWHATûISû TEARS
Managing No of Total Share LIKELYûTOûDOMINATEûTHEûEND OF YEARûCALENDAR
bank or group issues US$(m) (%) 4HEûPASTûWEEKûSAWûlVEû)0/SûPRICEû TELA BIO LAUNCHES US$64m IPO
1 Goldman Sachs 143 23,356.49 17.0
INCLUDINGûTWOûBIOTECHûOFFERINGSûTWOû30!#Sû
2 JP Morgan 158 15,880.53 11.5
ANDûONEû#HINESEûDEALS TELA BIOûISûTARGETINGûANûUPûTOû53Mû)0/û

3 Morgan Stanley 120 15,802.37 11.5

)NûTHEûMOSTûHOTLYûSOUGHTûDEALûOFûTHEûWEEKû THOUGHûTHEûCOMPANYSûSMALLûSIZEûMAYûLIMITû
4 BofA 110 12,706.33 9.2 /YSTERû0OINTû0HARMAûROSEûûONûDEBUTû UPSIDEûPOTENTIALûFORûNEWûINVESTORS
5 Citigroup 93 12,191.12 8.9 AFTERûPRICINGûATûTHEûBOTTOMûOFûTHEûRANGEûFORû Jefferies and Piper JaffrayûAREûMARKETINGûMû
6 Barclays 76 9,389.28 6.8 53MûOFûPROCEEDS SHARESûATû53nûEACHûFORûPRICINGûNEXTû
7 Credit Suisse 67 5,904.28 4.3 4HEûBIGGERûDEVELOPMENTûINû53û%#-ûINûTHEû 4HURSDAYû.OVEMBERûû4OP ENDûPRICINGû
8 Wells Fargo 60 5,324.83 3.9 WEEKûAHEADûISûLIKELYûTOûCOMEûFROMûAû WOULDûVALUEûTHEûCOMPANYûATûJUSTû53M
9 RBC 43 4,683.51 3.4 RENEWEDûBURSTûOFûSECONDARYûOFFERINGSû4HEû 4ELAûPLANSûTOûUSEûTHEûPROCEEDSûTOûEXPANDû
10 Jefferies 56 3,621.24 2.6 THIRDûQUARTERûEARNINGSûSEASONûISûMOSTLYû THEûSALESûANDûMARKETINGûOFûITSû&$! APPROVEDû
Total 574 137,556.03 COMPLETEûOPENINGûAûTHREE WEEKûFUNDINGû SURGICALûMESHûPRODUCTûCALLEDû/VITEX
Including all domestic and international deals and rights issues WINDOWûTOûEXPLOITûBEFOREû4HANKSGIVINGû 4ELAûHASûBEENûSELLINGû/VITEXûSINCEûû
Source: Refinitiv SDC code: C3r WEEK UNDERûANûEXCLUSIVEûLICENSINGûAGREEMENTû

88 International Financing Review November 2 2019

 EQUITIES AMERICAS

WITHû!ROAû"IOSURGERYûAû.EWû:EALAND BASEDû

COMPANYûTHATûDEVELOPEDûTHEûTECHNOLOGY
4ELAûmASHEDûEXPECTEDû1ûREVENUEûOFû
53M
MûUPûFROMû53MûINûTHEû
Blackstone cashes in
SAMEûPERIODûLASTûYEARû!ROAûTAKESûAûûCUTû
OFûREVENUEûUNDERûAûLONG
TERMû US$247m Crocs stake
MANUFACTURINGûANDûSUPPLYûAGREEMENT
/VITEXûWASûORIGINALLYûAPPROVEDûASûAûSOFTû „ US Stock swings wildly as key backer sells in block trade
TISSUEûREINFORCEMENTûFORûUSEûINûHERNIAûREPAIRû
ANDûABDOMINALûWALLûRECONSTRUCTIONû Private equity firm Blackstone took a sizeable DEAL SIZE
SURGERIESû)Nû!PRILûTHEû&$!ûAPPROVEDûITSûUSEû
INûPLASTICûANDûRECONSTRUCTIVEûSURGERIESûANDû
4ELAûLAUNCHEDûCOMMERCIALûSALESûAûMONTHû
LATER
4HEûCOMPANYûISûALSOûWORKINGûWITHûTHEû
&$!ûONûDEVELOPINGûAûPROTOCOLûFORûTESTINGûTHEû
SAFETYûANDûEFFECTIVENESSûOFû/VITEXûFORûBREASTû
RECONSTRUCTIONûSURGERY
discount on a US$247m block sale of its
remaining stake in CROCS but still crystallised a
substantial gain nearly six years since bankrolling
the lightweight clog shoe maker’s turnaround.
Morgan Stanley beat other banks in an auction
for Blackstone’s holding of 6.9m Crocs shares or
10% of the company.
The bank then reoffered the shares to
Blackstone could have opted for a slightly
smaller deal size (around 6m) in order to instead
undertake an unregistered trade. But the firm
ultimately felt it better to sell out of Crocs
completely via the block, another ECM banker
said.
Blackstone’s original investment in January
2014 saw it invest US$200m in Crocs via
4ELAû"IOûHASûRAISEDû53MûPRIVATELYû
INCLUDINGûAû53Mû3ERIESû"ûROUNDûINû
!UGUSTû4HEû3ERIESû"ûPREFERREDûSHARESû
CONVERTûINTOûCOMMONûSTOCKûATû53ûAû
SHAREûPLUSûAûPORTIONûOFûTHEû53MûOFûUNPAIDû
DIVIDENDSûTHATûHAVEûACCRUEDûATûAûRATEûOFûû
PERûYEAR
SILVERGATE BRINGS CRYPTO TO
IPO MARKET
!BOUTûûMONTHSûSINCEûITûlLEDû
investors overnight Wednesday at US$36 each,
the bottom of a US$36-$36.50 marketing
range and a 6.6% discount to the prior close of
US$38.53.
Blackstone opted to sell fresh from a 15.6%
surge in Crocs’ shares during Wednesday’s
session, the biggest one-day move in the stock
since November 8 last year.
The rally came as the company delivered
better-than-expected third quarter earnings and
raised its 2019 sales guidance, triggering a short
squeeze.
convertible preferred stock carrying a 6%
dividend rate and a US$14.50 a share conversion
price, equivalent to 13.8m shares or a 13% stake
at the time.
The terms required conversion of the
preferreds into common stock after three years if
Crocs shares traded above US$29.
In December last year, Crocs bought back half
of the converted holding at US$26.64 a share for
proceeds to Blackstone of US$184m.
This left Blackstone with a 6.9m-share
balance it agreed not to sell for nine months.
CONlDENTIALLYûSILVERGATE CAPITALûAûBANKû Short-sellers looking to cover their positions As part of the December sell-down, Crocs paid
SPECIALISINGûINûSERVINGûDIGITALûCURRENCYû may have aided Morgan Stanley’s task in Blackstone a one-time sum of US$15m.
EXCHANGESûANDûINVESTORSûHASûLAUNCHEDûANû reoffering the shares. Ahead of the earnings Blackstone netted a return or more than 120%
.93%û)0/ûRAISINGûUPûTOû53M release, short interest in Crocs stood at about from its nearly six-year Crocs investment, though
Barclays and KBWûAREûLEADINGûANûOFFERINGû 10%. likely much more after taking into account
OFûMûSHARESûMARKETEDûATû53
ûEACHû Short-covering was not apparent in Crocs’ leverage in its funds that held the position.
FORûPRICINGûONû4HURSDAYû.OVEMBERû poor aftermarket performance, the shares sliding In the period of Blackstone’s ownership, Crocs
4HOUGHûCRYPTOCURRENCYûHASûLONGûBEENûAû 9.2% to US$34.99, or well below the reoffer restored its growth momentum by changing
POLARISINGûTOPICûINûlNANCIALûMARKETSû price, in Thursday’s session. management, closing underperforming stores
3ILVERGATEûISûONEûOFûTHEûlRSTû)0/SûTOûOFFERû The two-day whipsaw in Crocs’ share price and strengthening its brand and marketing (it
INVESTORSûANûEXPOSUREûTOûNASCENTûDIGITALû highlighted the challenge of pricing a block after also repurchased stock). The shares have risen
CURRENCYûMARKETS such a large unseasoned stock price move. more than 80% in the past 12 months.
4HEûDEALûHASûBEENûLONGûDELAYEDûTHEûBANKû
HAVINGûlRSTûlLEDûCONlDENTIALLYûINûEARLYû
!UGUSTûLASTûYEARûBEFOREûSHOWINGûITSûHANDû
PUBLICLYûLASTû.OVEMBER
9ETûINûAûMARKETûWHEREû)0/ûINVESTORSûAREû
“When a stock is squeezed up 16%, it’s not Crocs reported its third quarter revenues grew
easy to price a block,” said one ECM banker 19.8% year-on-year to US$312.8m and raised its
whose firm put in a losing bid for the block. “It forecast for 2019 revenue growth to 11%-12%.
traded where we thought it would.” Anthony Hughes
PROVINGûHIGHLYûPRICEûSENSITIVEû3ILVERGATEû
STILLûCOMESûATûAûLESS
THAN
IDEALûTIME 3ILVERGATEû%XCHANGEû.ETWORKûBETTERûKNOWNû WILLûMAKEûITûDIFlCULTûTOûDRAWûINTERESTûFROMû
/NEûPOTENTIALûSOURCEûOFûPUSHBACKûISûTHATû ASûhTHEû3%.v ûISûCENTRALûTOûTHEûBANKSû LARGEûINSTITUTIONALûINVESTORS
ûOFûTHEûOFFERINGûISûSECONDARYûSELLINGû INVESTMENTûPITCH (OWEVERû3ILVERGATEûISûPROlTABLEûHAVINGû
ALLOWINGûFORûBACKERSû&INTECHû)NVESTMENTû&*û 4HEûNUMBERûOFû3%.ûTRANSACTIONSûGREWû REPORTEDûNETûINCOMEûOFû53MûINûTHEûlRSTû
#APITALû-ANAGEMENTûANDû"ANK#APû0ARTNERSû ûTOûûINûTHEûlRSTûHALFûOFûû HALF
/PPORTUNITYû&UNDûTOûREDUCEûTHEIRûSTAKES UNDERPINNINGûAûûINCREASEûINûNON

3ILVERGATEûWASûFOUNDEDûINûûASûANû INTERESTûINCOMEûTOû53M XCEL UPSIZES FOLLOW-ON TO US$652.2m
INDUSTRIALûLENDERûBEFOREûITûBEGANûINûûTOû 3ILVERGATESûLESSûEXCITINGûBANKINGûBUSINESSû
EXPLOREûTHEûDIGITALûCURRENCYûSECTORûASûAû GENERATEDûAûûINCREASEûINûNETûINTERESTû -INNEAPOLIS
BASEDûPOWERûUTILITYûXCEL ENERGY
SOURCEûOFûDEPOSITSûTOûSUPPORTûITSûLENDING INCOMEûTOû53MûINûTHEûSAMEûPERIOD WENTûAûLONGûWAYûTOWARDSûSATISFYINGûITSûMULTI

h7EûOPENEDûOURûlRSTû53
DOLLARûDEPOSITû #USTOMERSûINCLUDEûTHEûlVEûLARGESTûDIGITALû YEARûEQUITYûFUNDINGûNEEDSûBYûPRICINGûAû
ACCOUNTûFORûAûCOMPANYûINûTHISûINDUSTRYûINû CURRENCYûEXCHANGESûAMONGûTHEMû#OINBASEû MASSIVELYûUPSIZEDû53MûFORWARDûBLOCKû
*ANUARYûûANDûASûAûRESULTûWEûENJOYû 'ENESISûANDû"ITSTAMPûANDûINSTITUTIONALû SALEûLATEû7EDNESDAY
SIGNIlCANTûlRST
MOVERûADVANTAGEvû#%/û INVESTORSûSUCHûASû"LOCKTOWERûANDû0OLYCHAINû 3OLEûBOOKRUNNERûCitigroupûPRICEDûTHEû
!LANû,ANEûSAIDûINûTHEûONLINEûROADSHOWû #APITALû OVERNIGHTûSALEûOFûMûSHARESûUPûFROMûMû
PRESENTATION 4HEû)0/ûTERMSûVALUEû3ILVERGATEûATûLESSûTHANû ATûLAUNCHûATû53ûEACHûORûZEROûDISCOUNTû
4HEûBANKSûPAYMENTSûNETWORKûTHEû 53MûAûRELATIVELYûSMALLûMARKETûCAPûTHATû TOûLASTûSALEû

International Financing Review November 2 2019 89

 SPROUT MAKES LATE-YEAR IPO CHARGE

Biotech IPOs circle the wagons SPROUT SOCIALûAûCLOUDûSOFTWAREûPLATFORMûTHATû

HELPSûBUSINESSESûMANAGEûTHEIRûSOCIALûMEDIAû
„ US Heavy reliance on insider support
Biotechs continue to test the boundaries
between private and public fundraising through
heavy reliance on insiders.
lRMûUNDERWRITINGûSYNDICATEû
Last week saw two deals being launched,
both with hefty commitments from existing
DAYûWAITû
shareholders.
Of the US$80m being targeted by
)0/ûSTAKE
89BIO,insiders pledged to put in US$40m. The
FOUNDERSû
of-concept” data. It expects to report top-line
data from the Phase II trial by the second half of
2020.
GALERA THERAPEUTICS is in the home stretch of
developing its treatment for a painful side effect
of cancer radiation therapy.
The biotech hopes to raise US$80m from its
IPO to complete a Phase III trial of the drug and
PRESENCEûPUBLICLYûlLEDûONû/CTOBERûûFORûAû
.ASDAQû)0/ûTHATûSHAPESûUPûASûONEûOFûTHEûLASTû
TECHûNEWûISSUESûOFûTHEûYEAR
Goldman Sachs and Morgan Stanley are slated
TOûLEADûAûSIX
THATûCOULDûLAUNCHûTHEûDEALûASûEARLYûASû
.OVEMBERûûAFTERûTHEûREQUIREDû
'OLDMANûISûALSOû3PROUTSûBIGGESTûINVESTORû
WITHûAûûPRE
&OUNDEDûINûûANDûLEDûBYûCO
company focuses on drugs for nonalcoholic
steatohepatitis (NASH) and other liver and
metabolic disorders.
Bank of America, SVB Leerink and RBC Capital
Markets are marketing 4.7m shares at US$15-
$17 each for pricing on Tuesday, November 5, a
compressed seven-day roadshow.
89bio’s story should be familiar to investors.
The biotech was formed last April by former
Teva Pharmaceutical executives around a portfolio
of drugs acquired from their former employer.
89bio raised US$60m last October to fund a
Phase I trial of its lead NASH drug.
OrbiMed anchored that Series A round with
a US$15.8m investment to give it a 41.2% pre-
IPO equity stake, and was joined by Longitude
Venture Partners and RA Capital.
The US$15-$17 IPO range represents a hefty
step up from the US$6.22 mark on the Series A
round.
Since then, 89bio has advanced a drug into
GROWINGû"RAZILIANû
Phase II trials that it hopes will provide “proof-
PRIMARYûFOLLOW
ONû
#ITIGROUPûEARLIERûMARKETEDûTHEûSHARESûATû
BASEDûFLAGSTAR BANCORPûBYû ,UIZAûSHARESûCLOSEDû"OVESPAûTRADINGû
53
seek FDA approval.
Bank of America, Citigroup and Credit Suisse
are marketing 5m shares at $14-$16 each for
pricing on Wednesday, November 6.
Of the US$80m target, insiders are in for
US$40m.
Galera’s lead drug has been designated by the
FDA as breakthrough treatment for severe oral
mucositis.
Galera launched the Phase III trial last
October but does not expect top-line data until
early 2021.
The biotech has funded development with
US$150m raised privately, including a US$70m
Series C financing round and concurrent
US$80m royalty agreement with Clarus
Therapeutics.
Clarus also anchored the Series C along with
other new investors Adage Capital Management,
HBM Healthcare and known-crossover investors,
including RA Capital and Rock Springs Capital.
Robert Sherwood
-ICHIGAN
*USTYNû(OWARDûANDû!ARONû2ANKINû3PROUTûISû
GENERATINGû53MûINûANNUALISEDû
RECURRINGûREVENUE
3UBSCRIPTIONSûGENERATEûNEARLYûALLûOFûTHEû
COMPANYSûREVENUES
4HEûCOMPANYSûLASTûPRIVATEûROUNDûWASûAû
53Mû3ERIESû$ûROUNDûINû$ECEMBERûû
LEDûBYû'OLDMANûANDû.EWû%NTERPRISEû
!SSOCIATESûANDûPRICEDûATû53ûAûSHARE
3PROUTûlRSTûlLEDûCONlDENTIALLYûINû*UNEû
4HEûLATESTûlLINGûISûAû53MûPLACEHOLDER
BRAZIL
MAGAZINE LUIZA TO ACCELERATE
EXPANSION
(IGHûINVESTORûEXPECTATIONSûAREûGROWINGû
EVENûHIGHERûFORûMAGAZINE LUIZAûAFTERûANOTHERû
STRONGûQUARTERûBYûTHEûFAST
RETAILERûANDûTHEûLAUNCHû4HURSDAYûOFûAû
2BNû53M ûALL
STOCKûSALE
ûDRUMMINGûUPûENOUGHû OFmOADINGûABOUTû53MûOFûSHARESûINûAû 4HURSDAYûUPû2ûORûûATû2û
SUPPORTûINCLUDINGûFROMûEXISTINGû BLOCKûTRADEûVIAûMorgan Stanley WHICHûCOMESûONûTOPûOFûAûûPOST
EARNINGSû
SHAREHOLDERSûTOûJUSTIFYûTHEûûUPSIZEûANDû û4HEûDEALûSAWû-ORGANû3TANLEYûREOFFERû RUN
UPûTHEûDAYûBEFORE
STILLûPRICEûATûLASTûSALE Mû&LAGSTARûSHARESûORûûOFûTHEûBANKû ,UIZAûISûSEEKINGûTOûSELLûMûNEWûSHARESûAû
6INDICATINGûTHEûJUDGEMENTûOFûTHEû OVERNIGHTû4UESDAYûATû53ûTHEûBOTTOMû ROUGHLYûûSTAKEûWITHûANûhUPSIZEvûOPTIONû
COMPANYûANDû#ITIGROUPû8CELûSHARESûMOREû OFûTHEû53
ûMARKETINGûRANGEûANDû ONûANûADDITIONALûMûSHARESûMûBYûTHEû
THANûHELDûTHEIRûGROUNDûINûTHEûAFTERMARKETû AûûDISCOUNTûTOûLASTûSALE COMPANYûANDûMûBYûITSûCONTROLLINGû
RISINGûûTOûûINû4HURSDAYSûSESSION 4HEûSHARESûTRADEDûSLIGHTLYûBELOWûTHEû SHAREHOLDERSû4HATûûUPSIZEûOPTIONûISû
4HEûFORWARDûCANûBEûSETTLEDûTHROUGHû REOFFERûPRICEûINû7EDNESDAYSûAFTERMARKETû TYPICALûOFûLARGEû"RAZILIANûFOLLOW
ONûOFFERINGSû
$ECEMBERûNEXTûYEARûALLOWINGûTHEûUTILITYûTOû CLOSINGûATû53 THOUGHûSOMEûRECENTûDEALSûHAVEûBEENû
TAKEûADVANTAGEûOFûITSûSTRONGûSHAREûPRICEûANDû ,ATERûlLINGSûREVEALEDû-ORGANû3TANLEYû STRUCTUREDûATû
DEFERûSTOCKûDILUTIONûUNTILûAûLATERûDATEû8CELû PURCHASEDûTHEûBLOCKûATû53ûAûSHAREûTOû ,4$û!DMINISTRACAOûANDû7AGNERû'ARCIAû
SHARESûWEREûUPûûYEAR
TO
DATEûTHROUGHû DELIVERûNETûPROCEEDSûOFû53MûTOû ENTITIESûAFlLIATEDûWITHûTHEûCONTROLLINGû
4HURSDAYSûCLOSE -ATLIN0ATTERSONû FAMILIESûCURRENTLYûOWNûAûûSTAKEû
4HOUGHûUTILITIESûOFTENûPREFERûTOûRELYûONûAT
-ATLIN0ATTERSONSû&LAGSTARûSTAKEûFALLSûTOû COMBINED
THE
MARKETûOFFERINGSûANDûDIVIDENDû ABOUTûûFROMûûPREVIOUSLYûANDûITûCANû ,UIZAûISûCONDUCTINGûANûEXTENSIVEû
REINVESTMENTûPLANSûTOûCOVERûTHEIRûEQUITYû SELLûMOREûAFTERûûDAYS ROADSHOWûWITHûPRICINGûNOTûEXPECTEDûUNTILû
NEEDSû8CELûISûLOOKINGûTOûSPENDû53BNû )TûLASTûCUTûITSûSTAKEûINû*UNEûLASTûYEARûVIAûANû .OVEMBERû
OVERûlVEûYEARSûTOûSPEEDûITSûTRANSITIONûTOû M
SHAREûSECONDARYûPRICEDûATû53ûBYû Itaú ISûLEADûCOORDINATORûONûANûEIGHT
STRONGû
CLEANûENERGYûINûPARTûBYûEXPANDINGûITSû BOOKRUNNERSû3ANDLERû/.EILLûANDû+"7 SYNDICATEûOFûBOOKRUNNERSûCOMPRISINGû
RENEWABLEûENERGYûPORTFOLIO 4HATûEARLIERûOFFERINGûCAMEûJUSTûAû "RAZILIANûANDû53ûINVESTMENTûBANKS
WEEKûAFTERû&LAGSTARûAGREEDûTOûBUYûû ,UIZAûPLANSûTOûUSEûTHEûPROCEEDSûTOûEXPANDû
MP CUTS FLAGSTAR STAKE AGAIN -IDWESTûBRANCHESûANDû53BNûINûDEPOSITSû ACROSSûPHYSICALûSTORESûECOMMERCEûANDû
FROMû7ELLSû&ARGOûINûAûDEALûTHATûWASûEXPECTEDû ONLINEûMARKETPLACEûASûPARTûOFûANû
!LTERNATIVEûASSETûMANAGERû-ATLIN0ATTERSONû TOûBEûMODESTLYûACCRETIVEûTOûEARNINGSûPERû OMNICHANNELûSTRATEGYûTHATûISûDRIVINGûSTRONGû
MADEûANOTHERûDENTûINûITSûLARGEûSTAKEûINû SHARE GROWTHûACROSSûTHEûCOMBINEDûCOMPANY

90 International Financing Review November 2 2019

 STRUCTURED EQUITY

ECM DEALS: WEEK ENDING 1/11/2019

Stock Country Date Amount Price Deal type Bookrunner(s)
Bawag Group Austria 30/10/2019 €472.5m €35 Accelerated bookbuild (secondary) Citigroup, Goldman Sachs, JP Morgan
Cyrela Commercial Properties Brazil 28/10/2019 R$760m R$19 Follow-on (primary) BBI, BTG Pactual, Itau, MS, Safra, XB Investments
Wuxi Biologics China 11/01/2019 HK$7.9bn HK$85 Follow-on (primary) Morgan Stanley
Changsha Broad Homes Ind Group China 30/10/2019 HK$1.18bn HK$9.68 IPO (primary) CICC, China Securities International
Ping An Healthcare and Tech China 29/10/2019 HK$1.25bn HK$55.70 Follow-on (secondary) Citigroup, UBS
Fangdd Network Group China 31/10/2019 US$78m US$13 IPO (primary) Morgan Stanley, Citigroup, UBS, CICC, AMTD
Worldline France 28/10/2019 €1.2bn €53 Accelerated bookbuild (secondary) JPM, Deutsche, CS, MS, Societe Generale
HDFC Life Insurance India 29/10/2019 Rs57.5bn Rs575 Follow-on (secondary) Bank of America
Axis REIT Malaysia 31/10/2019 M$277m M$1.72 Follow-on (primary) CIMB, Maybank
Hanwha Systems South Korea 31/10/2019 W402bn W12,250 IPO (primary/ secondary) Citigroup, Korea Inv & Secs, NH Inv & Secs
Cellnex Telecom Spain 30/10/2019 €2.5bn €28.85 Rights issue MS, GS, JPM, CaixaBank, Santander, BNPP,
Banca IMI, Citigroup, Deutsche, HSBC,
Mediobanca, UniCredit
Future UK 29/10/2019 £104.4m £12.75 Accelerated bookbuild (primary) Numis, N+1 Singer
Crocs US 30/10/2019 US$247m US$36 Accelerated bookbuild (secondary) Morgan Stanley
DTE Energy US 29/10/2019 US$302.4m US$126 Follow-on (primary) Barclays, BofA, JPM, Wells Fargo Secs, Citigroup,
Scotia Howard Weil
FinServ Acquisition US 31/10/2019 US$220m US$10 IPO (primary) Barclays, Cantor
Flagstar Bancorp US 29/10/2019 US$221.7m US$36.35 Accelerated bookbuild (primary) Morgan Stanley
Osprey Technology Acq US 31/10/2019 US$275m US$10 IPO (primary) Credit Suisse
Oyster Point Pharma US 30/10/2019 US$80m US$16 IPO (primary) JP Morgan, Cowen, Piper Jaffray
Xcel Energy US 30/10/2019 US$652.2m US$63.32 Follow-on (primary) Citigroup
Y-mAbs Therapeutics US 29/10/2019 US$125m US$28 Accelerated bookbuild (primary) Morgan Stanley, JP Morgan, BofA

!SûWITHûALLûHIGH GROWTHû"RAZILIANûNAMESû .EWû(OPEû,IUHEûISûAûSUBSIDIARYûOFû.EWû ûPREMIUMûOVERûTHEû!""ûPRICEûANDûANû

,UIZAûISûNOTûCHEAPû/NûûCONSENSUSû (OPEû'ROUPûWHICHûmOATEDû.EWû(OPEû$IARYû ISSUEûPRICEûOFû
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7HILEûTHEREûWASûAPPETITEûFORûAûBIGGERû
FUNDûPARTICIPATIONûANDûPUTûMOREûPRESSUREûONû
THEûSTOCKû)NûTHEûEVENTûSHARESûSLIPPEDûTOû
õûONû7EDNESDAYûANDûBANKERSûSAWû
SOMEûOUTRIGHTSûBUYINGûTHEûBONDSûINûTHEû
RECEIVEDûlNALûAPPROVALûFROMûTHEû#HINAû STAKEûINûTHEû&RENCHûPAYMENTSûCOMPANYûTHEû MORNINGûTHATûHADûMISSEDûOUTûTHEûPREVIOUSû
3ECURITIESû2EGULATORYû#OMMISSIONûFORûAû 3WISSûSHAREHOLDERûOPTEDûTOûHEDGEûITSûEXPOSURE EVENING
PROPOSEDû2MBBNû53M ûSIX
YEARû !TOSûDISTRIBUTEDûûOFû7ORLDLINEû Goldman Sachs and JP Morgan WEREûGLOBALû
CONVERTIBLEûBONDûOFFERING SHARESûTOûITSûSHAREHOLDERSûINû-AYûANDû COORDINATORSûATûLAUNCHûWITHûRothschild
4HEûCOPPERûPRODUCTSûMANUFACTURERûWILLûUSEû FOLLOWEDûUPûBYûSELLINGûõMûOFûSHARESûINû ADVISINGû!TOSûBUTûBYûPRICINGûTHEûSYNDICATEû
THEûPROCEEDSûFORûSIXûCOPPERûPRODUCTIONûPROJECTSû 4UESDAYSûõBNûACCELERATEDûBOOKBUILDû WASûENOUGHûTOûlLLûTHEû'RANDû0ALAIS
INû3HANGHAIû#HONGQINGû:HEJIANGûPROVINCEû 4HEûRESTûOFûTHEû!""ûREPRESENTEDûHEDGINGû -OSTûNOTABLYûDeutsche Bank WASûADDEDûATû
THEû53ûANDû4HAILANDûANDûTOûREPAYûLOANS BYû#REDITû3UISSEûOFûANûUNFUNDEDûCOLLARû3)8û THEûSAMEûLEVELûASûAûTHIRDûGLOBALûCOORDINATORû
GF Securities ISûTHEûSPONSOR HASûENTEREDûAûMULTI
YEARûCOLLARûCOVERINGû ACROSSûBOTHûEQUITYûANDûEQUITY
LINKEDûTRADES
4HEû#32#ûHASûALSOûGIVENûlNALûAPPROVALûTOû APPROXIMATELYûûOFûITSûSHARESûINû !DDITIONALûBOOKRUNNERSûONûTHEûEQUITYû
3HENZHEN
LISTEDûNEW HOPE LIUHEûFORûAûSIX
YEARû 7ORLDLINEûORûABOUTûõMû3)8SûNEARûû WEREûCredit Suisse, Morgan Stanley and Societe
#"ûWITHûAû2MBBNûTARGETû STAKEûRESULTSûFROMû7ORLDLINESûACQUISITIONûOFû Generale
4HEûCOMPANYûWHICHûMAKESûANIMALûFEEDû 3)8û0AYMENTû3ERVICESûINû &ORûTHEûEXCHANGEABLEûBBVA, BNP Paribas,
ANDûMEATûPRODUCTSûANDûALSOûBREEDSûLIVESTOCKû 4HEû!""ûPRICEDûATûTHEûBOTTOMûOFûõ
õû Commerzbank, HSBC, Morgan Stanley, Natixis
WILLûUSEûTHEûPROCEEDSûTOûFUNDûEIGHTûPIGû
BREEDINGûPROJECTSûINûSEVENû#HINESEûCITIES
)TûPOSTEDûAûûNETûPROlTûOFû2MBBNû
ONûREVENUEûOFû2MBBN
YEARûEXCHANGEABLEûOFFEREDûWITHûAûlXEDû
UP
PERûSHAREûGUIDANCEûAûûDISCOUNTûTOû and Societe Generale WEREûADDEDûASûJOINTû
4UESDAYSûCLOSE BOOKS
!TOSûSECUREDûAûFURTHERûõMûTHROUGHûAû "OTHû!TOSûANDû3)8ûHAVEûAGREEDûTOûAû
lVE
DAYûLOCK
International Financing Review November 2 2019 91
 TOûFUNDûITSû53BNûPURCHASEûOFûGASûASSETSûINû CONVERTIBLE EQUITY LEGAL ADVISER TO
HONG KONG ,OUISIANASû(AYNESVILLEû"ASIN ISSUER, EMEA
1/1/2019 TO DATE
!FTERûAûDAYûOFûMARKETINGûONû4UESDAYû$4%û
PACIFIC BASIN UPSIZES CB SOLDûMûCOMMONûSHARESûATû53ûEACHû No of Total Share
FORûPROCEEDSûOFû53MûALONGSIDEûAû Legal adviser issues US$(m) (%)
PACIFIC BASIN SHIPPINGûHASûRAISEDû53MûFROMû 53BNûMANDATORYûCONVERTIBLEûBOND 1 Linklaters 3 3,517.0 23.8
AûFULLYûUPSIZEDûSIX
YEARûCONVERTIBLEûBOND 4HEû-#"ûSTRUCTUREDûASûEQUITYûUNITSû 2 White & Case 4 2,097.0 14.2
4HEûCOUPONûANDûYIELD
TO
PUTMATURITYû PRICEDûWITHûAûûDISTRIBUTIONûRATEûANDû 3 Allen & Overy 4 1,441.1 9.7
WEREûlXEDûATûTHEûTOPûOFûAûnûRANGEû ûCONVERSIONûPREMIUMûVERSUSûTALKûOFû
4 Cleary Gottlieb Steen & Hamilton 1 592.5 4.0
4HEûCONVERSIONûPREMIUMûWASûlXEDûATûû ûUPû
 5 Bar & Karrer 1 255.8 1.7
FROMûTHEûnûRANGE (ELPFULLYû$4%ûSHARESûROSEûûTOû 6 Alston & Bird 1 180.0 1.2
4HEûSIX
YEARûPUT
FOURû#"ûCOMPRISEDûAûBASEû 53ûWHILEûTHEûBarclays
LEDûSYNDICATEû 7 Baker Mckenzie 1 167.6 1.1
DEALûOFû53MûWITHûANûUPSIZEûOPTIONûOFû MARKETEDûTHEûOFFERINGS 8 Latham & Watkins 1 58.5 0.4
53M 4HEYûWEREûPREVIOUSLYûmAGGEDûONû/CTOBERûû Total 35 14,789.2
"OOKSûWEREûMULTIPLEûTIMESûSUBSCRIBEDû WHENû$4%ûAGREEDûTOûPAYûUPûTOû53BNûTOû Including exchangeables and domestic.
Source: Refinitiv SDC code: AX7
WITHûOVERûûACCOUNTSûPARTICIPATINGûANDûTHEû ACQUIREûMIDSTREAMûASSETSûINûTHEû(AYNESVILLEû
TOPûûWEREûALLOCATEDûûOFûTHEûDEAL "ASINûINû,OUISIANAûPARTûOFûTHEûUTILITYSûEFFORTSûTOû CONVERTIBLE EQUITY LEGAL ADVISER TO
4HEûBONDSûWEREûTRADINGûUPûATûnû BOLSTERûITSûGROWTHûWITHûNON
UTILITY
TYPEûASSETS MANAGER, EMEA
1/1/2019 TO DATE
LASTû&RIDAY 4HEû-#"ûWASûMULTIPLEûTIMESû
0ROCEEDSûWILLûBEûUSEDûTOûFUNDûTHEû OVERSUBSCRIBEDûWITHûSTRONGûSUPPORTûFROMû No of Total Share
EXPANSIONûANDûRENEWALûOFûITSûmEETûOFû LONG
ONLYûACCOUNTS Legal adviser issues US$(m) (%)
(ANDYSIZEûANDû3UPRAMAXûVESSELSûASûWELLûASû !TûTHEûlNALûTERMSûTHEû-#"ûBREAKSûEVENûINû 1 Linklaters 16 6,318.9 42.7
FORûGENERALûCORPORATEûPURPOSES ûYEARSûTHEûHIGHESTûOFûANYû-#"ûSOLDûTHISû 2 Allen & Overy 1 2,492.7 16.9
BNP Paribas and HSBCûAREûTHEûJOINTûGLOBALû YEARûANDûTHEûSECONDûHIGHESTûOFûALLûTIMEûTOPPINGû 3 Homburger 1 1,303.9 8.8
COORDINATORSûANDûJOINTûBOOKRUNNERSûWITHû ûYEARSûFORû.EXT%RAû%NERGYSûRECENTû53BNû 4 Cleary Gottlieb Steen & Hamilton 1 180.0 1.2
DNB Markets -#"ûAFTERûFACTORINGûINûTHEûREOFFERûDISCOUNT 5 Noerr 1 45.3 0.3
$4%ûWASûABLEûTOûEASILYûOVERCOMEûCONCERNSû Total 35 14,789.2
ABOUTûINVESTORûFATIGUEûFROMûTHISûYEARSûû Including exchangeables and domestic.

UNITED STATES OTHERû-#"SûOFûWHICHûFOURûHAVEûEMERGEDû

Source: Refinitiv SDC code: AX8

FROMûTHEûPOWERûUTILITIESûSECTORû SLOTûFORû$4%ûAHEADûOFûBank of AmericaûJP

DTE RAISES US$1.45bn FROM EQUITY/ 4HEûLATTERûINCLUDEûTHEû.EXT%RAûDEALû MorganûWells FargoûCitigroup and Scotiabank
EQUITY-LINKED SALES 3OUTHERNû#OMPANYû53BN û$OMINIONû $4%ûREPORTEDûEARNINGSûEARLYû-ONDAYû
%NERGYû53BN ûANDû!MERICANû%LECTRICû BEFOREûLAUNCHINGûTHEûOFFERINGSûAFTERûTHEû
$ETROIT BASEDûUTILITYûDTE ENERGYûHADûLITTLEûTROUBLEû 0OWERû53M  CLOSE
lNDINGûYIELD HUNTERSûTOûBACKûAû53BNûDUAL "ARCLAYSûWASûLEADûLEFTûORûACTIVEûBOOKSûONû -ANAGEMENTûTOLDûANALYSTSûTHEûACQUISITIONû
TRANCHEûCOMMONûSTOCKûANDûCONVERTIBLEûOFFERINGû ALLûOFûTHESEûANDûWASûAGAINûINûTHEûLEADûLEFTû HELPEDûUNDERPINûITSûLONG TERMûPLANûTOû
INCREASEûEARNINGSû ûAûYEARûTHROUGHû
GLOBAL CONVERTIBLE OFFERINGS GLOBAL CONVERTIBLE OFFERINGS – US û$4%ûNOWûEXPECTSûûOPERATINGû
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE EARNINGSûOFû53 ûAûSHAREûUPû
Managing No of Total Share Managing No of Total Share 4HEûUTILITYûALSOûANNOUNCEDûAûûDIVIDENDû
bank or group issues US$(m) (%) bank or group issues US$(m) (%) INCREASEûLIFTINGûTHEûANNUALûPAYOUTûTOû53û
1 Goldman Sachs 39 8,773.72 8.9 1 BofA 30 5,822.55 16.4 ORûAûûYIELDûATûITSûCURRENTûSHAREûPRICE
2 BofA 41 7,928.13 8.1 2 Morgan Stanley 24 4,783.65 13.4 4HEûACQUISITIONûFORMSûPARTûOFûTHEû
3 JP Morgan 49 7,506.87 7.7 3 JP Morgan 28 4,746.28 13.3 MANAGEMENTSûDESIREûTOûRUNûTHEûCOMPANYû
4 Morgan Stanley 39 6,724.88 6.9 4 Goldman Sachs 25 4,641.56 13.0 WITHûAûûUTILITYNON UTILITYûMIX
5 Citic 12 5,782.16 5.9 5 Citigroup 19 2,857.24 8.0 !ûCAPITALûPLANûAIMEDûATûMAINTAININGû
6 Citigroup 29 5,156.42 5.3 6 Barclays 16 2,267.73 6.4 INVESTMENT GRADEûRATINGSûCALLEDûFORûTHEû
7 China Intl Capital 4 3,634.86 3.7 7 Credit Suisse 11 1,534.60 4.3 COMPANYûTOûISSUEû53MûOFûCOMMONûEQUITYû
8 Credit Suisse 23 3,589.29 3.7 8 Wells Fargo 14 1,391.54 3.9 THISûYEARûOFûWHICHû53MûHADûALREADYûBEENû
9 Huatai Securities 8 3,223.88 3.3 9 HSBC 3 965.94 2.7 RAISEDûINTERNALLYûPLUSû53BN BNûOFû
10 HSBC 17 3,008.34 3.1 10 RBC 7 907.48 2.5 EQUITYûTHROUGHûûINCLUDINGûTHEû-#"
Total 298 98,096.02 Total 87 35,596.85 4HEûTIMINGûOFûTHEûOFFERINGSûREmECTEDû
Including exchangeables and domestic offerings. $4%SûDESIREûTOûCLOSEûTHEû(AYNESVILLEû
Source: Refinitiv SDC code: C9 Source: Refinitiv SDC code: C9a ACQUISITIONûINû$ECEMBER

EQUITY-LINKED DEALS WEEK ENDING: 1/11/2019

Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s)
Atos/Worldline France 29/10/2019 €500m None 5 years 0% / -1.7 35.0 GS, JPM, Deutsche, BBVA, BNPP,
Commerzbank, HSBC, MS, Natixis, SG
Pacific Basin Shipping Hong Kong 31/10/2019 US$150m US$25m 6 years 3.00 31.9 BNP Paribas, HSBC, DNB Markets
DTE Energy US 29/11/2019 US$1.15bn US$150m 3 years 6.25 25.0 Barclays, BofA, JPM, Wells Fargo Secs,
Citigroup, Scotia Howard Weil
Granite Construction US 29/11/2019 US$200m US$30m 5 years 2.75 32.5 BofA, BNP Paribas
Winnebago Industries US 29/11/2019 US$270m US$30m 5.5 years 1.50 32.5 Goldman Sachs, BMO Capital Markets

92 International Financing Review November 2 2019

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 INTERNATIONAL FINANCING REVIEW INDEX

36Kr 12, 84 Credit Mutuel Arkea 35 ION Group 72 SBI General Insurance 85
89bio 90 Credit Suisse 16, 22, 24 JP Morgan 22, 40 SCG Packaging 85
Adira Dinamika Multi Finance 65 CRH 75 JS Global Lifestyle 83 Schmolz + Bickenbach 39
Aesthetic Medical 12 Crocs 89 Kaisa Group Holdings 54, 55 SDIC Power Holdings 81
Affidea 75 Crown Holdings 39 KfW 27 SEB 35
African Export-Import Bank 86 Daimler 33 Kildare Partners 41 Sekisui House REIT 66
Aimbridge Hospitality 73 Dalipal Holdings 83 KKR 43 Serbia 59
Akbank 68 Danaher 27 KPN 31 SES 31
Alabama Power 8 Danish Ship Finance 35 Lakeside Asset Backed Securitisation 1 41 Shanghai Pudong Development Bank 12
Alibaba Group Holding 80 Derwent London 68 Landesbank Baden-Wuerttemberg 8 Shop Direct 39
Allsup’s 70 Deutsche Bank 10, 23, 35, 37 Langham Hospitality Investments 64 S Hotels and Resorts 85
Ameren 8 Deutsche Industrie REIT 86 Lazard 17 Shutterfly 71
Amplify Snack Brands 29 Deutsche Kreditbank 4 LBBW 35 Siberian Anthracite 5
Andrade Gutierrez 61 DH Europe Finance II 28 Lebanon 6 Silvergate Capital 89
Anixter International 70 DIA 39, 87 Lizhi 12, 84 Sime Darby Plantations 65
Antero Resources 25 DiaMonTech 86 Macquarie 20 Sinic Holdings (Group) 82
Archroma 75 DNEG 13 Magazine Luiza 90 Skandinaviska Enskilda Banken 8
Astra Sedaya Finance 66 Doosan Infracore 59 Mamoura 53 SKF 32
Aurelius Equity Opportunities 32 Dover Corporation 30 Masmovil 74 Sophos 70
Australia and New Zealand Banking Group 35 DTE Energy 92 Masraf Al Rayan 60 South Africa 53
Australian Finance Group 45 DTEK Renewables 60 Meili Auto 12, 83 Southern California Edison 8
Axel Springer 74 Duke Energy 8 Metinvest 67 Southwestern Energy’s 25
Axis Real Estate Investment Trust 85 E2open 72 Midsona 87 Sovereign Housing 32
Banco Original 61 Ebang International 13 Miniso 81 SpareBank 1 Boligkreditt 37
Banco Sabadell 36, 42 EHang 12, 83 Mizuho 22 Sprout Social 90
Banijay 67 Eli Lilly 30 Moelis 17 SP Transmission 33
Bank of America 16, 22 Elite Partners Capital 79 Mong Duong Finance Holdings 66 Sta Lucia Land 85
Banna RMBS 41 Emerald Italy 2019 40 Monotype Imaging 71 Standard Chartered 20
Banque Internationale a Luxembourg 35 Emirates NBD Bank 88 Morgan Stanley 22 Starbucks 70
Barclays 19, 22 Endeavour Energy Group 33 Mozambique 24 State Street 35
Bawag 86 E.ON 29 MTR 55 Stedin 31, 32
Beijing Capital Group 55 Essel Propack 76 Murray Energy 77 SUEK 5
Beijing Kingsoft Office Software 83 Esterline Technologies 37 Naftogaz 60 Sumitomo Mitsui Banking Corporation 37
Beijing New Space Technology 83 Evolution Wellness 76 New Hope Liuhe 91 Sunac China Holdings 55
Beijing-Shanghai High Speed Railway 80 Fangdd Network Group 83 Newlat 87 Suning International Group 64
Belron 75 Faurecia 38 Nexa Resources 67 Suzhou Zelgen Biopharmaceuticals 82
Bendigo and Adelaide Bank 45 Flagstar Bancorp 90 Nomura 23 Taghleef Industries 75
Berlin Hyp 36 FleetCor Technologies 70 Oil India 65 Tata International 56
Be-Spoke Capital 42 FlexiGroup 45 ONE Brands 29 Tata Sons 56
Beyond Bank Australia 45 Ford 28 Onsite Rental Group 80 Tela Bio 88
Bharti Airtel 56 Fosun International 58 Origin Energy 33 The District Docklands 64
BitMain Technologies 13, 82 Future 88 Oyster Point Pharma 88 Together Financial Services 41
BNP Paribas 16 Galera Therapeutics 90 Pacific Basin Shipping 92 Tom Tailor 67
Bollore 32 Geo Energy Resources 58 Pacific Gas & Electric 8 Tot Biopharm International 84
Boston Scientific 31, 32 Georgia Power 8 PDVSA 6 Trakya Cam Sanayii 68
Bozhon Precision Industry Technology 83 Globalworth Real Estate Investments 69 People’s Republic of China 14 TransDigm 37
BPCE 4, 35 Goldman Sachs 22 Pepper Finance 41 Turk Ekonomi Bankasi 68
Budweiser Brewing Company APAC 7 GoodRx 73 Pepper Group 44 UBS 23
Caffil 35 Granite Construction 79 Perusahaan Listrik Negara 57, 65 UCB 66
Canaan 12, 82 Granite Energy 71 PG&E 24 Ukrexim 60
Carpetright 77 Greentown China Holdings 64 Phoenix Tree 12, 82 Ultra Petroleum 25
Casino 4 Grifols 40, 74 Ping An Healthcare and Technology 84 Unicaja Banco 35
Cellnex Telecom 13 Gulfport 25 PJT Partners’ 17 United Pacific 73
Central China Real Estate 55 Hanwha Systems 85 Posco 59 UOB Hampshire REIT 79
Changsha Broad Homes Industrial Group 84 HDFC Life Insurance 84 Postal Savings Bank of China 80 US Steel 70
Chengdu Jiaozi Financial Holding Group 55 Help/Systems 70 PPF Arena 1 60 Vale 69
China Feihe 81 Hershey 29 PPF Group 67 Verizon Communications 26
China Merchants Securities 81 Home Credit and Finance Bank 59 Promontory Interfinancial 72 Vermaat 74
China Resources Microelectronics 83 Houghton Mifflin Harcourt 71 PRS Finance 33 Vicinity Centres 31
China Tianbao Group Development 82 Housing Development Finance Corp 65 Public Investment Fund 68 Wasco Energy 66
CIFI Holdings (Group) 55 Housing New Zealand 27 Q&K International Group 83 Wells Fargo 22
Citibank N.A. 33 HSBC 15, 22 RBS 35 WeWork 38
Citigroup 19, 22, 33 Hub 71 RCI Banque 35 Winnebago Industries 79
Clarivate Analytics 73 Iberdrola 69 Reliance General Insurance 85 Woolworths 64
CMPC 69 IDOL 2019-1 Trust 45 Risk Strategies 72 Worldline 91
Cole-Parmer 71 I-Mab 12, 84 RKE Group 82 Wuxi Biologics (Cayman) 81
Coles Group 33 ING Bank (Australia) 45 Royal Bank of Scotland 34 Xcel Energy 89
Columbus Capital 44 InnovaCare 73 Rusal 5 Yapi Kredi 68
ConvaTec 68 Inspired Education 75 Sabadell Consumo 1 42 Youdao 12
Cooper’s Hawk 71 Integrity Marketing Group 72 Santander Consumer Bank 41 Zayo 71
Credit Agricole 36 Interpipe 77 Sartorius 67 Zhejiang Hailiang 91
Credit Bank of Moscow 87 Investec Bank 68 SBI Cards and Payment Services 85 Zhenro Properties Group 55

96 International Financing Review November 2 2019