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 CHANGESûBIGûlNESûANDûHUGEûDISRUPTIONûTOûBUSINESSûMODELSûISû
Paris on Wednesday. very real.
The €3bn–€4bn deal is sure to be a hit in Europe, where the Certain sectors are more exposed than others. Oil is an
LASTû#HINESEûSOVEREIGNûBONDûOFFERINGûINûEUROSûMATUREDûlVEû obvious target, and the risk to investors is that the equities,
years ago. Even if the Chinese economy may be slowing, the bonds and loans they own in the sector could become
rarity value alone should ensure a tight print. stranded assets as business models are disrupted – or even
4HEûREALûSIGNIlCANCEûOFûAû#HINESEûSOVEREIGNûISSUEûLIESûINû stopped altogether.
the message it sends. In US dollar terms, a euro bond issue is One estimate states that the energy sector could be left
still likely to be a little more expensive after swaps (despite with US$4trn of stranded assets. While it is hard to forecast
the lower euro coupons), so the decision to venture into accurately, one thing is sure: current market prices don’t
euros signals that China sees value in diversifying away from factor this in fully.
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 Sour beer
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
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.
opportunities, and US suspicion of China will only accelerate A group of bookrunners on the Budweiser Brewing APAC
that shift. Better access to the euro debt market will help listing found out last week that their split of the US$144m
#HINESEûISSUERSûRElNANCEûTHEIRûEXISTINGû%UROPEANû fee pool will be far lower than expected, after the two
ACQUISITIONSûANDûlNANCEûNEWûONES sponsors pocketed a US$57m brokerage commission that is
There is a limit, however. While China’s biggest state-owned traditionally shared around the syndicate.
issuers have reined in their US dollar bond sales over the past year, IPO sponsors outrank the rest of the underwriters on Hong
others have doubled down. Property developers now account for Kong listings, and can expect to earn higher fees in
almost a third of this year’s Asia G3 bond sales, after an recognition of the additional responsibilities of preparing a
unprecedented US$40bn binge so far this year – all in US dollars. company for a public offering. Given the regulatory scrutiny
Private-sector companies are also rushing to tap the US now placed on the sponsor role, that is entirely fair.
equity market before the end of the year, with at least half a 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 unclear to investors who is supposed to be doing what.
to give up on the US dollar any time soon. 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.
In the pits Budweiser’s IPO followed that familiar pattern, but it is
also a step towards a cleaner recipe. When the beer giant

U S investors, who have for years lagged behind their

European counterparts in their sensitivity towards
ENVIRONMENTALûSOCIALûANDûGOVERNANCEûISSUESûSEEMûlNALLYûTOû
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.
be waking up to the risk that climate change might pose to ESR Cayman’s relaunch was an even more stark example,
their portfolios. with even some of the joint bookrunners unaware of the
Bankers say that US investors have begun to push back on details until Morgan Stanley sent out the term sheet.
some exposed names – particularly utilities – in recent IPO underwriters deserve to be paid for the work they do,
months. They highlight a deal for an Ameren coal power whether it is working with regulators, designing the
plant in Missouri that was priced wide of its parents’ bonds marketing strategy or actually selling the stock. But to
with a book substantially lower. incentivise all parties – and avoid any nasty surprises –
That hesitation proved prescient: just days after the deal, a issuers should surely make clear the fee structure in
federal judge found the plant in violation of the Clean Air Act advance.

International Financing Review November 2 2019 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 also be creditors of Rallye, which challenging and the execution of which owns €1bn of real estate
has relied on dividends from the company’s strategy requires assets in France.
The stakes could hardly be higher Casino to service debt. the full attention of Casino’s Casino itself is rated B2/B (neg
for CASINO as it meets investors “There’s a huge vested interest board and management team”. watch/neg).
before trying to sell a €750m senior from the existing French lenders Another investor said: “At some Global coordinators and joint
secured high-yield bond issue, one to make sure that Casino lives point the company will have to books are BNP Paribas, Credit
LEGûOFûAûõBNûRElNANCINGûTOû another day with this extension of act on this. The fact we see this in Agricole, Credit Suisse, HSBC, JP
extend debt maturities that it hopes liquidity,” said one investor. the Moody’s report shows people Morgan and Natixis. Bank of America,
will buy enough time to allow it to Moody’s, which downgraded really care about this issue at the CM-CIC, Goldman Sachs, Santander
sell off assets and delever. Casino by one notch to B2 on moment – the company is not and Societe Generale are joint books.
The corporate picture remains October 23 and says it will listening to investors.” There is no price guidance yet
muddied by investment vehicle downgrade it by another notch if Casino could not be contacted for the bonds. A roadshow started
Rallye, which owns a 51% stake THEûRElNANCINGûFAILSûTOOKûTHEû for comment. last Thursday and will end on
INû#ASINOûANDûlLEDûFORûPROTECTIONû unusual step of commenting on Tuesday, ahead of expected
from creditors in May. the position of Casino chief NEW DEBT pricing on Thursday this week.
The French retailer is also in executive Jean-Charles Naouri. JP Morgan is sole physical The covenant-lite €750m 4.25-
the market with a €750m Term Naouri is also chairman of bookrunner for the 4.25-year year Term Loan B is also due to
Loan B, and is working on Rallye, something Moody’s says senior secured bonds, which are be priced on Thursday. It is
extending a €2bn revolving “is credit negative because it callable after two years. The 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
lRSTûTHINGûONû7EDNESDAYûACROSSû with the proceeds to be used to dynamic in the market,” said a
The European Central Bank asset classes, bankers said. lNANCEûPUBLICûWATERûANDûWASTEû BANKERûSPECIALISINGûINûlNANCIALû
kicked off a new, open-ended era The comeback of the big management facilities in institutions.
of asset purchases last buyer is expected to encourage a Germany. In the end, central banks and
Wednesday, heralding a time of pick-up in covered issuance in BPCE and its leads Danske Bank, OFlCIALûINSTITUTIONSûWEREû
plenty for European bond issuers. November. Eurozone borrowers HSBC, JP Morgan, LBBW, Natixis, allocated 11% of DKB’s deal and
The return in force of the ECB had been relatively quiet in Nord/LB and UniCredit then hit 33% of BPCE’s.
to the covered bond primary anticipation of the central screens with guidance of mid-
market boosted deals from bank’s return. swaps plus 9bp area for its CORPORATE IMPACT LESS
DEUTSCHE KREDITBANK and BPCE, The ECB had previously been seven-year. OBVIOUS
providing a jolt in momentum placing orders of around 5% for Demand surpassed €1bn Also on Wednesday, Daimler
that helped both deals over the covereds this year, as it within an hour and the spread helped usher in a new age of the
line in short order. reinvested maturing holdings. was ultimately set at 5bp for a ECB’s corporate sector purchase
Analysts had forecast the DKB’s €500m no-grow 10-year €1.25bn deal. programme, with automakers
Eurosystem’s bid for eligible covered was marketed at The book closed above €2.4bn. likely to be among the biggest
eurozone covereds would increase guidance of mid-swaps plus 7bp BENElCIARIESûOFûTHEûLATESTûCHAPTERû
to around 30% at most. But bankers area via leads ABN AMRO, BayernLB, A WELCOME PUSH of the bond buying programme.
involved in Wednesday’s deals said DZ Bank, Natixis and UniCredit. Bankers involved on the trades Daimler launched a €4bn
the bids came in at around 40%. Books exceeded €1bn within said they were already subscribed triple-tranche trade, comprising
“The ECB are buying at 50 minutes. The spread was when the Eurosystem came in. €1.75bn November 2023s,
hilarious levels,” said one lXEDûATûBPûONûAûBOOKûLASTû But the ramped-up central bank €1.25bn May 2027s and €1bn
covered bond syndicate banker. reported above €1.4bn. bid added momentum, increasing November 2031s.

4 International Financing Review November 2 2019

 @ For daily news stories
visit www.ifre.com

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
restrict the ability of Casino
to pay dividends, which
were in fact scrapped in July.
Rusal brings ESG
Finance and the French holding
companies owning the company’s
They can restart in 2021, but
will be limited to an annual
loans to Russia
stakes in Latin America. €100m plus 50% of net „ Loans Scepticism over country’s environmental record
“For the secured bonds you PROlTûWITHûANûADDITIONALû
have to believe management €100m envelope available BY SANDRINE BRADLEY for an existing client – taking on a
when they give you the value of over the life of the new new coal client would be
the real estate assets,” said the debt. Russian aluminium company RUSAL impossible,” a second banker said.
second investor. Those dividend limits will HASûSIGNEDûTHEûlRSTûSUSTAINABILITY
“And for the term loan you stay in place as long as Casino’s linked syndicated loan arranged by TOUGH CALL
have to believe in the strategy of leverage remains above a 3.5 international commercial banks for For some lenders, the idea of green
the company and the fact the times debt-to-Ebitda ratio. The a Russian borrower, as green lNANCINGûFORû2USSIANûCOMPANIESûISû
company will still be here in four ratio currently stands at 6.4 lNANCINGûSPREADSû%ASTûTOûAûCOUNTRYû DIFlCULTûTOûREADILYûACCEPT
years and three months to repay.” times. where politicians have been In September, Russia, which is
$EBTûPROCEEDSûWILLûRElNANCEû Casino hopes to use the sceptical about climate change. the world’s fourth largest emitter of
drawn credit lines and be used BREATHINGûROOMûTOûOFmOADûõBNû 2USALSûlVE YEARû53BNû greenhouse gases, said it would join
to launch a tender offer for a OFûASSETSûBYûTHEûlRSTûQUARTERûOFû sustainability-linked pre-export THEûû0ARISû!GREEMENTûTOûlGHTû
targeted €700m of short-dated 2021. lNANCINGûLAUNCHEDûINûEARLYû climate change, one of the last
unsecured bonds due in 2020, “The market will be very 3EPTEMBERûATû53MûBUTûWASû countries in the world to do so. In a
2021 and 2022. focused on whether there is any increased after receiving a high 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 SHAREHOLDERvûSAIDûTHEûlRSTû carbon neutrality initiative, country is warming more than
same security as the loan. investor. which says they can no longer twice as fast as the rest of the world.
Casino has already signed lend to certain energy companies “The likes of Rusal or Norilsk
DIVIDEND RESTRICTIONS €2.1bn of sales from an earlier for environmental reasons, Nickel getting sustainability-linked
!LLûTHREEûlNANCINGûLEGSû €2.5bn asset disposal plan, means lending to some Russian loans is a strange concept. Norilsk
include covenants that Moody’s said. „ COMPANIESûISûMOREûDIFlCULT is one of the most polluted cities in
“People are really beginning to the world. I know there needs to
think about sustainability-linked be a starting point but when you
Bankers would not comment The corporates banker said DEALSûINû2USSIAû ûITûHASûlNALLYû know how businesses are run in
ONûTHEûSPECIlCSûOFûTHEû%#"Sû that the ECB’s presence was reached the market from Western this country I just don’t see it,” a
involvement in the transaction, likely to have more of a Europe. There was a lot of appetite third banker said.
although the deal statistics psychological than practical and it went beyond the normal Rusal will pay a margin on its
REVEALEDûOFlCIALûINSTITUTIONSûANDû effect on new corporate issues. circle of banks,” said one banker latest loan that is dependent on
agencies took between 11% and “The ECB could help the on the deal. “We will see more of THEûCOMPANYSûFULlLMENTûOFûKEYû
17% of the various tranches. sentiment of investors ... in green loans in Russia.” performance indicators related
“Some issuers will welcome particular through the end of For some Russian borrowers, to environmental impacts and
the potential support of the November when you have less many of which are well established sustainable developments. They
ECB,” said a corporate bond involvement from momentum in the loan market, raising funds include an increase in sales of
banker. “I’m just not sure it investors,” he said. has become a lot more challenging Rusal’s low carbon aluminium
will have the same impact as it The ECB’s purchases across due to environmental issues. brand, called Allow; a reduction
did in the past, assuming the asset classes are expected to be Earlier this year, mining in its carbon footprint; and a
ECB buy up to €2.5bn of particularly strong in November companies SUEK and SIBERIAN DECREASEûINûmUORIDEûEMISSIONSû
corporate bonds per month. ahead of an anticipated ANTHRACITE struggled to raise loans. The KPIs will be measured
Which I’m not sure they will December slowdown. Bankers A number of banks declined to ANNUALLYûANDûVERIlEDûBYûANû
even do.” attributed the surprising start in LENDûTOû35%+Sû53Mû08&û independent third party.
Bank of America analysts, covereds to such frontloading. They found the circa 170bp over Some bankers question how
though, said they expect that The buying should negate Libor margin hard to swallow and the KPIs will be monitored and
automakers’ bonds will be one some of the impact of weaker the deal took nine months to how thoroughly they will be
of the main targets for the ECB’s macro or fundamental news, close. Siberian Anthracite took implemented.
buying programme as the while over the short term the unusual step of introducing “There is a reliance on certain
central bank rebalances its spreads are set to tighten. euro-denominated tranches to its standards being met, but will they
credit portfolio. The ECB will from now target õM EQUIVALENTû08&ûINûANûEFFORTû be? I hope they don’t negotiate
The ECB’s buying should act net monthly purchases of €20bn to attract better pricing. checks that are subsequently not
as a counterweight to the fact of covered, public sector, “The business case for doing done, or only half implement some
that automakers have been corporate and ABS paper. It has these deals is getting weaker. It’s a initiatives,” the third banker said.
PROLIlCûISSUERSûOFûELIGIBLEûDEBTû said the programme will continue struggle to get them through ING and Natixis coordinated
this year, the analysts said. for as long as necessary. „ credit committee. It’s bad enough 2USALSûlNANCING „

International Financing Review November 2 2019 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
DOLLARûmOWSûTOûTHEûCOUNTRYvûSAIDû FROMû53BNûATûTHEûENDûOFû Ashmore, says that rolling
The drying up of critical depositor Joanna Woods, portfolio manager Moody’s forecasts that Eurobonds would require ever
mOWSûHASûLEFTûLEBANON‘s economy at First State Investments. ,EBANONSûLIQUIDû&8ûRESOURCESû higher interest rates, which
in a precarious position ahead of ,EBANONSûMINISTRYûOFûlNANCEû will be exhausted by the debt could become unsustainable at
ANûUPCOMINGû53BNûBONDû and central bank did not respond service payments due in the rest some point, especially if capital
redemption, with the central bank to requests for comment. of this year and next. mIGHTûTAKESûHOLD
now likely to use up precious Bond repayments spike next Lebanon has one of the “In a no-change scenario we
resources to avoid a default. YEARûTOû53BNûEXCLUDINGû highest government debt-to-GDP may well look at an eventual
LEBANON, which has been interest payments), according to ratios in the world. Total debt is restructuring, but it ought not to
engulfed by nationwide protests 2ElNITIVûDATAûFROMû53BNû 53BNûEQUIVALENTûTOûûOFû be an immediate risk,” said
against an elite blamed for in 2019. These amounts include '$0ûOFûWHICHûABOUTû53BNûISû $EHNûh4HEûCASHmOWûSITUATIONûISû
mishandling the economy that foreign and domestic bonds. in Eurobonds, says Patty Ye Cao, currently okay.”
led to the resignation of prime Lebanon had planned to issue assistant portfolio manager at
minister Saad al-Hariri last in the international market but Merian Global Investors. MELTING AWAY
week, has never defaulted on its with its bonds trading at elevated 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 weeks ago – that is no longer a RESTRUCTURINGûAûDIFlCULTûCALL appears to be melting away.
investors are sounding alarm realistic option, meaning that “A debt restructuring with large Money drained out in 2019,
bells over an eventual need to GOVERNMENTûlNANCESûAREûLIKELYûTOû NOMINALûHAIRCUTSûWILLûSIGNIlCANTLYû S&P said, due to failing depositor
restructure debt. stay strained. erode or wipe out commercial CONlDENCEûANDûRISINGûRISKSûTOû
“The probability of an eventual banks’ capital base,” said Cao. Lebanon’s currency peg to the
sovereign debt restructuring has EXHAUSTED “Therefore the adverse impact on 53ûDOLLAR
risen substantially in our view, Lebanon’s “usable reserves” will banks will likely be a strong These risks are outweighing
and the catalyst for this is likely to DECLINEûTOû53BNûBYûTHEûENDûOFû deterrent to large haircuts.” the lure of attractive returns on

Venezuela opposition ups stakes

following PDVSA default
„ Emerging Markets Guaido-backed oil firm moves to make 2020 bonds invalid unconstitutional because they
were issued without approval from
BY MILUSKA BERROSPI of the value of the underlying creditors from laying claim the National Assembly. And, in
COLLATERALûnûSHARESûOFû0$63!Sû53û to the Citgo shares. using Citgo as collateral, the
Venezuela’s opposition unit Citgo. transaction constituted a matter of
government and holders of the The Guaido team’s decision to OVERPLAYING THEIR HAND national interest, and such matters
ûBONDûISSUEDûBYûOILûlRMû MISSûCLOSEûTOû53BNûINû “The bondholders know that need approval by the Assembly.
PDVSA looked to be on a collision amortisation and interest they pretty much hold all the The Guaido team also makes a
course last week after the payment due October 27 had cards,” said Russ Dallen, case that the Maduro
borrower missed a principal been widely expected. But few managing partner at Caracas government collateralised the
payment and upped the stakes had expected such forceful legal Capital Markets. PDVSA 2020s with Citgo shares
by seeking to make the security action just two days after the But others think the Guaido despite the objections of the
invalid. default. team may have overplayed its hand. democratically elected National
The aggressive move by the It was especially surprising “To ask that investors not be Assembly.
53 BACKEDûADMINISTRATIONûOFû as the move came soon after allowed to proceed on their By making such a case, the
opposition leader Juan Guaido, THEû53û4REASURYûHADûBANNEDû actual rights, it’s a really Guaido team may be shooting
who is battling for power against PDVSA bondholders from unhealthy position,” said a New itself in the foot as its case
President Nicolas Maduro and seizing the Citgo shares for 90 York-based lawyer. “It’s the resembles arguments that say
controls PDVSA, saw PDVSA seek days. opposite of good faith.” PDVSA is an alter-ego of the
AûJUDGEMENTûINûAû53ûCOURTûTOû 4HEûlLINGûWHICHûNAMESû It is also questionable whether sovereign state.
declare the 2020s “invalid, THEûBONDSûTRUSTEEû-5&'û its legal argument will stand up Canadian gold miner
illegal, null and void”. 5NIONû"ANKûANDûITSûCOLLATERALû in court or indeed ultimately Crystallex has already won a
The 2020 was the last bond in agent GLAS Americas as help it in its case to keep Citgo. JUDGEMENTûINûAû53ûCOURTûUSINGû
the Venezuela debt complex to defendants, also asks for an The Guaido team argues that the same reasoning to justify
remain current, mostly because injunction to prevent the PDVSA 2020s are seizing Citgo assets for

6 International Financing Review November 2 2019

 @ For daily news stories
visit www.ifre.com

deposits, with banks in July

offering up to 14% on large sums
Dollarisation of deposits has
been climbing. It rose to 71.5% in Battle brewing over
of money locked up for three June, up from 68% a year earlier.
YEARSû.ETûDEPOSITûOUTmOWSû
TOTALLEDû53BNûFORûTHEûlRSTû
The Lebanese pound is pegged
at 1,505.50 to the dollar. But a
Budweiser fees
eight months of 2019. disparity has arisen between the „ Equities JPM and Morgan Stanley set for outsized payday
Depositors have been driven OFlCIALûEXCHANGEûRATEûANDûTHEû
away by political gridlock in black market, with informal BY FIONA LAU totalling up to 1.5% of the funds
,EBANONûASûWELLûASûTIGHTENEDû53û prices ranging from 1,750 to 1,850 RAISEDû4HATû53MûPAYOUTûWILLû
sanctions against Hezbollah and pounds on Wednesday. The bookrunners on BUDWEISER be shared among the
renewed tensions with Israel. The central bank has promised BREWING COMPANY APAC@Sû(+BNû underwriting syndicate, in line
Relations with Saudi Arabia not to introduce formal capital 53BN û(ONGû+ONGû)0/ûAREû with market practice.
have also become strained as controls, but banking sources said lGHTINGûOVERûAû53Mû JP Morgan and Morgan
Saudi Arabia sought to limit the on Thursday that commercial commission after the issuer Stanley will share a further
INmUENCEûOFû)RANSû,EBANESEûALLYû banks would only allow transfers allocated the entire brokerage 53MûFEEûFORûSPONSORINGûTHEû
Hezbollah. abroad in a narrow set of cases. fee to the two sponsors. listing.
“Former friends have been The situation on the ground has Budweiser’s decision to award 4HEûADDITIONALû53Mû
pulling back from Lebanon,” said BECOMEûEXTREMELYûDIFlCULTû4WOû the 1% brokerage commission to brokerage fee is especially
an investor. “That has affected the weeks of anti-government JP Morgan and Morgan Stanley has important for banks in a weak
economic side. Hariri went to the protests triggered the resignation triggered outrage among the six year for equity issuance in Asia-
5!%ûINû/CTOBERûTOûASKûFORûSUPPORTû of Hariri, and banks were shut. other bookrunners, who argue it 0ACIlCû%XCLUDINGû*APANûSHAREû
and all he got was advice.” “The breadth of the protest breaks with convention in Hong sales were down 20% from
Outside help for Lebanon is helped to shake the political Kong. January to September compared
yet to be forthcoming. Besides establishment out of its stupor “I have been working in the to the same period last year.
the lack of support from GCC ANDûPROMPTEDûITûTOûTAKEûSIGNIlCANTû industry for years and have 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 lSCALûADJUSTMENTvûSAIDû$EHN the whole brokerage fee goes to usually shared along the same
last year on condition of reform, $EHNûSAIDûTHEûlSCALûADJUSTMENTû the sponsors,” said a person lines as the underwriting fees.
is still to be disbursed. had improved the credit worthiness familiar with the situation. “For example, if you get 30%
The outlook for Lebanon’s ability of the government, but that the Fees on Hong Kong IPOs are of the underwriting fee, you
to meet foreign obligations will only prices of Lebanese bonds have often hotly contested weeks will get more or less the same
worsen if the currency is devalued. fallen due to the political noise. „ after the deal has priced, with split for brokerage fee,” said an
bookrunners staking their claim ECM banker away from the
to the underwriting fees based deal. “Sometimes the issuer
compensation from the Holders of the bonds, which on the orders they brought in. will be in charge of
Venezuelan state. include big name investors such as The standard 1% brokerage fee, distributing the brokerage fee,
*USTIlCATIONSûFORûDEFAULTINGû Ashmore, Blackrock, and T Rowe paid by investors, is typically sometimes it will be the
on bonds issued by tyrannical 0RICEûAREûLIKELYûTOûlGHTûBACKû!LLû split along similar lines. sponsors, but it’s extremely
governments, or so-called three declined to comment. In Budweiser’s case, all the rare for it to all go to the
odious debt, have been made in Earlier this month, Ashmore’s banks on the deal are entitled to sponsors.
the past but have had little head of research Jan Dehn, told share the underwriting fee “I have only seen one such
success in the courts. IFR that while his fund kept based on their contribution, case in my entire career, and
Besides, the Guaido lines of communication open with JP Morgan and Morgan that was on a small IPO.”
administration earlier this year with the Guaido team, he did Stanley taking the lion’s share of A third person close to the
MADEûAû53MûINTERESTûPAYMENTû not really “see any reason to that pot – in line with market deal, however, argued that the
ONûTHEûSûAFTERû53ûSANCTIONSûINû negotiate”. practice. SPLITûREmECTEDûTHEûWORKûDONEûONû
effect allowed his government to With the cards seemingly The junior banks, however, the IPO, saying that banks
TAKEûCONTROLûOFûTHEû53ûRElNER stacked against success, last were stunned to discover that they should respect the issuer’s
By making that payment, some week’s legal action could would get none of the brokerage decision.
say, Guaido’s team has weakened potentially be a bargaining tool fees. Some are now lobbying the “The issuer is just rewarding
the claim that the bonds are to create momentum and company to overturn its decision, the banks according to their
somehow illegitimate. increase leverage ahead of a trying to convince it to follow contribution. They shouldn’t
possible settlement between the market practice. complain,” he said.
A LONG SHOT parties. “We don’t know what the two JP Morgan and Morgan
The move to invalidate the debt h4HEûlLINGûOFûTHEûLAWSUITûISû sponsors told the issuer, but we Stanley were the sponsors on
is highly unlikely to succeed, another way to create some want the issuer to understand Budweiser. They were also
said Mitu Gulati, a Duke law settlement leverage but also to what is the general practice in global coordinators with Bank
professor. create a process for settlement,” this market and stick with it,” of America and CICC. The other
“Such claims are always a said Mark Weidemaier, a law said another person with bookrunners were BNP Paribas,
long shot”, he said. “Creditors PROFESSORûWITHû5.#û#HAPELû(ILL knowledge of the matter. Citigroup, Deutsche Bank and
have given over the money and “It is not at all uncommon for HSBC.
the sovereign is seeking to avoid a judge presented with a case SMALLER PIE Budweiser and JP Morgan did
paying any of it back using the like this to try to encourage, According to its prospectus, not respond to requests for
argument that there was some maybe quite strongly, the Budweiser paid underwriting comment. Morgan Stanley
process violation.” parties to mediate.” „ fees and discretionary incentives declined to comment. „

International Financing Review November 2 2019 7

Top news
AT1 fires on despite sensitivity price
„ Bonds Books drop on tight level but demand expected to stay

BY TOM REVELL foray in the asset-class since books ended at €3bn, down from For the Swedish bank, that
2017. the €3.75bn-plus at the peak. meant that it ended up pricing
LANDESBANK BADEN- In both cases, books peaked at “We’re coming into a tricky ITSû53Mû2EGû3ûPERPETUALû
WUERTTEMBERG and over €3.25bn but as initial price time of the year for investors,” a non-call May 2025 in the middle
SKANDINAVISKA ENSKILDA BANKEN thoughts were tightened to leave DCM banker said. “For those of guidance at 5.125% but still
relished the opportunity of little on the table, demand who’ve been investing all year, tighter than the 5.375% area
raising Additional Tier 1 debt dropped by some €1.25bn and you look at these levels and you IPTs.
at ultra-tight levels last week OVERû53MûRESPECTIVELY have to question how tight The bank will also be able to
but with yields hovering close “There’s about €20bn of deals things can go from here.” lock-in a lower coupon than on a
to their all-time lows, coming up for call next year,” Coupons on Nordic AT1s have 53BNû!4ûTHATûISûDUEûTOûBEû
investors’ price sensitivity is said Steve Hussey, head of been shrinking throughout called in May next year.
becoming more pronounced. lNANCIALûINSTITUTIONSûCREDITû 2019, for example, mirroring the “It’s the tightest Nordic
For AT1 bondholders, 2019 research at AllianceBernstein. broader market. coupon that I can see”, the lead
has been a vintage year if the “As an investor, that means “You had Nordea at 6.625%, BANKERûSAIDûh)TSûRElNANCINGûAû
performance of the Bank of you can be a bit more careful you then had the Handelsbanken 5.75% coupon.”
America Merrill Lynch CoCo where you spend. You’re less that looked amazing at 6.25%, In the case of LBBW, the
index is anything to go by. likely to accept a bank being then the Swedbank at 5.625% and German lender priced its €750m
Having opened at a yield of really being aggressive on now we’ve printed at 5.125%. So trade at 4%, some 50bp tighter
6.498% in early January, it has pricing.” effectively we’re going half a THANûTHEûûAREAû)04SûANDûmATû
tightened by more than two percent tighter on a coupon basis to fair value.
points, and hit an all-time low of DROP IN DEMAND almost each time,” a lead banker
4.27% on October 25. Rabobank experienced a similar on SEB’s deal said. THROUGH DIFFERENT LENSES
Demand was nonetheless drop in demand in September “So you can see why investors But for all the price
swift to come by for AT1 market for its €1.25bn perpetual non- get a bit nervous and a bit sensitivity, the AT1 asset-class
DEBUTANTû,""7ûANDû3%"SûlRSTû call 7.25-year AT1 on which SENSITIVEûABOUTûAûûmOORv remains still well supported

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 The impact was made most and the company is refusing to Despite some pushback on
apparent when American power clean leakage-prone ash ponds SPECIlCûNAMESûTHEû
5TILITIESûFACEûAûWIDEûRANGEûOFû company AMEREN came to the that could impact water supply. environmental social and
well-known climate change market with two bonds in Sure enough, the risks proved governance effect has not yet
risks, but more traditional credit 3EPTEMBERûAû53MûûlVE real as a federal judge in late dented market conditions for
factors and an overall strong year on September 11 followed September found the plant in utilities in a broader sense.
ECONOMYûHAVEûALLOWEDû53û by AMEREN MISSOURISû53Mû violation of the Clean Air Act !VERAGEû53ûHIGH GRADEûUTILITYû
investors to push aside such 3.25% 30-year on September 23. and ordered the company to spreads remain relatively tight
challenges — until recently. Both seemed to perform OUTlTûITûWITHûhSCRUBBERvû at 118bp over Treasuries — 41bp
There was investor push back decently but the Ameren technology that will cost tighter on the year, according to
on the slew of utilities names -ISSOURIûPLANTûHASûSPECIlCûCOAL hundreds of millions of dollars. ICE BofA data.
that issued new bonds in recent related issues that may have “Maybe we’re on the brink of
months, according to two made it less attractive than its a greater price differential SOCIAL RISK
syndicate bankers close to the parent. between cleaner bonds in the 4HEûMULTIPLEûlRESûRAGINGûACROSSû
trades. The bond from Ameren utility base compared with more California last week, sparked by
“We are hearing increasing tightened 23bp through price black or brown utilities,” the utility electrical wires, serve as
chatter about shying away from - progression and garnered a syndicate banker said. another grim reminder of the
or having less appetite for - utilities 53BNûORDERûBOOKûûTIMESû DUKE ENERGY and SOUTHERN’s vast environmental risk tied up
that have heavy coal bases in terms over subscribed. The bond from subsidiaries ALABAMA POWER and in utility bonds.
of their generation portfolio,” one Ameren Missouri, however, GEORGIA POWER also came with Last year, the once Single A
syndicate banker said. tightened just 13bp from initial new bonds in September that rated California utility PACIFIC
“Investors have been price thoughts and built a caused some chatter among GAS & ELECTRIC was plunged into
discussing this for a while but SMALLERû53MûORDERûBOOKûû investors for their negative bankruptcy following a string
we hadn’t seen it manifested in times over subscribed. credit ratings and high coal OFûlRESûITûFAILEDûTOûPREVENTû
behaviour around orders and Ameren’s handling of its exposures. and this week SOUTHERN
pricing indications, but I think Missouri coal plant is under However, subsequently those CALIFORNIA EDISON’s bonds (rated
with these trades we were seeing scrutiny as fumes have polluted have all seen some support in Baa3/BBB/BBB-) widened by as
folks scale back their appetite.” the surrounding air for years secondary trading. much as 83bp after state

8 International Financing Review November 2 2019

 @ For daily news stories
visit www.ifre.com

given that unlike the yields,

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

International Financing Review November 2 2019 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 5NFORTUNATELYûFORû$EUTSCHEû nûlNANCINGûTOûCLIENTSû7ITHûTHATû has a loan book of just €71bn,
crest of a wave. After a period the bond market boom gone, DCM will go back to compared with €150bn at BNP
of post-crisis restraint, clients coincided with a deep crisis at basics. Paribas, number one in the
had once again begun to take the bank that has seen it work “Coverage teams were euro league table. To address
on debt to invest or make through four CEOs, umpteen prioritising these innovative that disadvantage, Deutsche
acquisitions. Deal volumes overhauls and a collapse in its lNANCINGûSOLUTIONSûASûOPPOSEDû has opted to grow its private
were surging and, with many share price. to doing core day-to-day DCM placement desk within the
rivals still distracted by 5NCERTAINTYûOVERûSTRATEGYûANDû work,” said Frazer Ross, head of bond syndicate.
ongoing clean-ups, Deutsche – at least for a time – even its %UROPEANûmOWûSYNDICATEûh7HATû “It’s a quirky little business,
SEEMEDûBESTûPLACEDûTOûPROlTû future existence hit the bank we’ve done is re-focus the but we have invested in it as
from the boom. hard; the bond franchise, like coverage. It is much better – in 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, have people at the coalface who STANDALONEûPROlTABLEûFORûUSvû
more than any other TURNING A CORNER? are paid to originate bond deals, said Henrik Johnsson, global co-
European bank and 50% up on After another strategy overhaul full stop.” head of capital markets.
three years earlier. With the in July, when the bank made its Mark Lewellen, Barclays’ h)FûYOUûGETûINTOûTHEûmOWûASûTOû
European Central Bank set to deepest cuts yet, shuttering former global co-head of DCM, what’s going on, and start
start a €1trn bond buying equity trading and earmarking has been brought in to help climbing the league tables, then
programme the following €288bn of assets for sale or revive the corporate bond ALLûOFûAûSUDDENûYOUûlNDû
spring, the future looked even winddown, the hope is that a franchise in Europe. Deutsche opportunities that you didn’t
better. Deutsche, the region’s corner has been turned. has long been a top player in think existed.”
pre-eminent bond house, was Debt capital markets will be at the region, but there are signs The bank hired David Costa
widely expected to be the the heart of a new slimmed- that the bank’s troubles have from Goldman Sachs to run the
BIGGESTûBENElCIARY down investment bank, with dented its standing. After team, which will be tasked with
But while the bond party has Deutsche’s bond bankers now ranking second for corporate identifying pockets of demand
got into full swing since then, tasked with recouping lost bond deals in euros for six years for particular maturities or
Deutsche seems not to have ground. running, it has slipped to third currencies and then presenting
been invited. Deal volumes and 4HEûlRSTûSTEPûINûTHATûPROCESSû this year. trades to clients. The hope is
fees hit new highs in 2017, and WASûTHEûCLOSUREûOFûTHEûlNANCINGû that such solutions will be not
banks are on track to break that and solutions group. Although PRIVATE PLACEMENTS just lucrative, but also might
record again this year. But, at only formally set up in 2015, the 5NDERûTHEûNEWûSTRATEGYû open the door to winning
Deutsche, the reverse has philosophy underlying it was a $EUTSCHEûFACESûTHEûDIFlCULTû future bond mandates from
happened: bond revenues fell by long-standing one at the bank, task of winning market share happy clients without Deutsche

Argentina losses, rates trading hurt Deutsche

„ People & Markets Political change in Argentina causes losses on EM debt desk

BY STEVE SLATER change in Argentina that repositioning,” von Moltke told Argentina in the third quarter
RATTLEDûlNANCIALûMARKETSû reporters on a conference call. too. Bankers said many desks
Losses on Argentina debt and a “caused some risk losses” in called the situation badly and
torrid time in rates trading for EM debt. He declined to MARKET TURMOIL got caught out.
DEUTSCHE BANK last quarter quantify the losses. Argentina’s markets crashed in HSBC said it took hits on three
compounded the impact from its “We believe the performance August after then-President fronts in Argentina: a negative
LATESTûOVERHAULûANDûCUTûPROlTSûINû has now stabilised under new Mauricio Macri was surprisingly one-off “due to the macro
its investment bank by 73% from leadership with improved defeated in a presidential situation”, which it did not
a year earlier. results in September,” he said. primary. That hit currency and QUANTIFYûAû53MûHITûTOûPROlTSû
The German bank picked out “In the investment bank, of stock markets and prompted FROMûHYPERINmATIONûACCOUNTINGû
rates trading and emerging course there have been pockets currency controls. Peronist ANDûAû53BNûINCREASEûINûITSû
markets debt as two particular of challenges, but that is where candidate Alberto Fernandez risk-weighted assets due to the
trouble spots, and both are areas the restructuring has fallen most won a general election last impact of a credit downgrade of
it is restructuring. heavily and you’d expect some week. Argentina.
#HIEFûlNANCIALûOFlCERû*AMESû degree of revenue loss when The market turmoil left other Goldman Sachs said its
von Moltke said political YOUREûINVOLVEDûINûAûSIGNIlCANTû banks nursing losses from currencies revenues were hurt

10 International Financing Review November 2 2019

 @ 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 WILLûALSOûHELPûITûINûTHEû53û behind only JP Morgan. But pullback from emerging
private placements desk has WHEREûITûISûHARDûTOûlGHTûTOE low rates, the ongoing search markets in 2015 – in part
struck some big deals. In the TO TOEûTHEûBIGû53ûBANKSû for yield and an explosion in linked to past scandals and
sovereign space, it did a Deutsche once ranked PRIVATEûEQUITY LEDûlNANCINGSû increased pressure from
€500m 50-year deal for Israel, SEVENTHûFORû53ûINVESTMENTû has tempted many banks into regulators to have better
the country’s longest tenor, grade bonds but has steadily the space. While Deutsche oversight over its clients – has
and a €105m 100-year deal for dropped back in recent years, remains a leader in European led to it losing a lot of
Ireland. In corporates, it falling to 13th last year with high-yield, globally it has business in once-lucrative
placed big Norwegian krone just half the market share it FALLENûTOûlFTHûTHISûYEAR places like Mexico and Russia.
deals for Deutsche Bahn and had in 2014. This year is The bank is looking at
Aroundtown – as well as a slightly better, but the bank is PRIVATE EQUITY LINKS tentatively – and carefully –
Hong Kong dollar placement still outside the top 10. For Johnsson, a former high- moving back into those
for the latter. The strategy has yield banker, the space needs to countries.
“The team is incredibly nonetheless yielded some remain a focus for the bank Third-quarter results on
proactive, they understand the fruit: last year, Deutsche was despite the increased Wednesday indicate the
investor base very well, and sole books on a €2bn private competition. He believes that bank is moving in the right
have very good direct access,” placement for AT&T. It Deutsche’s long and deep direction – DCM revenues at
said Lewellen. “It relies on believes that, rather than go history with private equity 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- raise equity capital. COMPLETEDûTHEIRû#"ûOFFERINGSvû8Uû bonds begin to trade. Investors
linked product in China’s Chinese banks are not allowed said, “We cannot compare the CBs’ are hoping for a similar
onshore market. to sell shares below book value, fundraising amount from state- performance to Citic Bank’s
The six-year CBs attracted an and follow-on offerings for any owned banks with small banks in Rmb40bn CB offering earlier this
overwhelming response from onshore-listed company come previous years.” year, which is now trading at
investors, with total with long lock-up periods and SPDB’s CB issue is the fourth 106.98, after being issued at par.
subscriptions reaching arduous approval processes. major offering from a bank this According to a research report
Rmb7.86trn. After a priority “Other fundraising methods, year, following new issues in the from Guosen Securities, the CBs
offer for existing shareholders such as private placements or lRSTûQUARTERûFROMû#HINAû#ITICû offer a “reasonable” initial
took 52.7% of the bonds, the rights issues, may price Bank (Rmb40bn), Ping An Bank 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 OWNEDûASSETSvûSAIDû8U 2MBBNûISSUEûBUTûHASûlLEDûTOû months of 2019 and said
mandatory convertible into Chinese banks have already extend the mandate after failing revenue grew 15.4% year-on-year
Alibaba in 2016. sold more convertible bonds this to complete the offering within to Rmb146bn. Its total assets
The CBs pay an initial coupon YEARûTHANûINûTHEûPREVIOUSûlVEû SIXûMONTHSûOFûTHEû#32#SûlNALû reached Rmb6.79trn by the end
of 0.2%, stepping up each year to years combined, with the 2019 approval. of Q3.
reach 4% in year six. The initial total standing at Rmb139bn. In SPDB allotted 40.4% and 6.9%
conversion price is Rmb15.05, a 2014–18, seven banks issued CBs DOWNSIDE PROTECTION of the CBs to institutional and
premium of 17% to the with a combined size of Analysts are optimistic about retail investors, respectively,
company’s closing price of Rmb53bn. SPDB’s converts, which one said with the remainder going to

China-to-US pipeline balloons family”, and hence should be

able to make it through.
Existing shareholders of 36Kr,
„ Equities Glut of IPO applicants hoping to list before the end of the year 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. come despite the disappointing some of the above deals. especially given the abysmal
3IXûCOMPANIESûPUBLICLYûlLEDû debuts of online education 4HEû53ûSTOCKûMARKETûALSOû outcome of a similar rush to list
WITHûTHEû53û3ECURITIESûANDû portal YOUDAO and cosmetic performed well in the past last year.
Exchange Commission for IPOs surgery provider AESTHETIC month, with the benchmark 4HEûSEVENû#HINA TO 53û)0/SûINû
last week: bitcoin mining MEDICAL on October 25. The S&P 500 index up 2.35%, mainly the fourth quarter of 2018 had
equipment maker CANAAN former plummeted 26.5% on its on the consensus that China and 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. BY ROBERT VENES "HATTACHARYYAûHEADûOFû5+û)0/û most of the year and is now
Investors failed to settle about origination at Peel Hunt. mATûTOûWHEREûTHEûDEALûWASû
3.8% of the retail tranche, or 5+û%#-ûBANKERSûWEREûLEFTû “However, we will get priced.
0.25% of the CBs, with those wondering why they bother companies in front of The impetus to follow a
notes taken up by the trying when the latest investors in the interim, similar path for the rest of this
bookrunners. EXTENSIONûOFûTHEû5+Sû where it makes sense. In 2020 year and in early 2020,
The CB has received an AAA membership of the European we can see the cycle starting according to advisers, will be
rating from Shanghai Brilliance. 5NIONûTOû*ANUARYûûûWASû again. But with the current necessity.
The bank will use the lNALISEDûLASTûWEEKûJUSTûAHEADû uncertainty, we expect “The overall attitude is that
proceeds to replenish core Tier OFûTHEû5+ûPARLIAMENTûOPTINGûTOû corporates to wait until 2020 you don’t do something unless
1 capital. use the period to hold a for IPOs.” you have to do it,” said Adam
Citic Securities and Guotai Junan general election on December Film special effects business Young, co-head of equity
Securities are the joint sponsors 12. DNEGûISûTHEûONLYûCURRENTû5+û)0/û advisory at Rothschild. “We do
on the deal and joint 5+ûBANKERSûSTRUGGLEDû in the market. have clients who need to raise
bookrunners with Huatai United through 2019 unable to 4HEREûHASûBEENûAûDROPûINû5+û money, so there will be some
Securities, Haitong Securities, and CONlDENTLYûADVISEûCLIENTSû IPOs in 2019 but the fall in transactional activity in the
CICC. when there would be several volume has been reduced by 5+û)FûITSûAûSITUATIONûWHEREû
There are more CBs down the weeks of stability to enable foreign companies opting to DOMESTICû5+ûPOLITICSûDOESûNOTû
road. The CB proposals from their IPOs to proceed and they LISTûINû,ONDONûSUCHûASû5!%û have a massive impact, the
Qingdao Rural Commercial now face the same problem - payments company Network numbers ‘work’ and there’s a
Bank (Rmb5bn) and Jiangsu potentially for another six International. Bankers have strong strategic rationale,
Zijin Rural Commercial Bank months if another extension is started to talk about reviving then one proceeds with
(Rmb4.5bn) have been approved required. Amsterdam for international caution. But one proceeds.”
by shareholders and are seeking Activity is focused on LISTINGSûINû%UROPEûSOû5+û)0/û Listed companies have an
regulators’ approval. The two preparation work for next issuance could fall again in easier path to market for
banks listed on the A-share year, but with no idea if it will 2020. rights issues or follow-on deals
MARKETûINûTHEûlRSTûQUARTERûOFû be in vain. ,AWûlRMû$7&û'ROUPû as a lot of the risks are
this year. “Our advice on IPOs has managed to complete its LSE effectively priced in to their
Minsheng Bank also said in been to wait until after the IPO in February ahead of the valuation so they need only
2017 that it would sell a Brexit extension and then see then March 29 Brexit deadline, avoid certain days, such as
Rmb50bn CB issue, though little where we are,” said Indranil but the stock has struggled for around December 12. „
progress has been made since
then. „
Cellnex rights issue attracts €100bn
currently trading around „ Equities Clamour for paper leads to 0.000125% allocations
53ûAFTERûAûûSURGEûINû
the days after Chinese President BY LUCY RAITANO Cellnex remains the issuer of 19.58% discount to TERP of
8Iû*INPINGûENDORSEDûBLOCKCHAINû the largest rights issue of the €35.87, on a 9-for-31 basis.
technology. The leading Spanish tower owner CELLNEX year in Europe, pushing its Banks earned a 170bp base
cryptocurrency is still well TELECOM was overwhelmed €1.2bn rights issue in March fee and will expect to be paid
below the year’s high of with around €100bn of into second place. the 50bp incentive fee.
53ûREACHEDûINû*UNEû orders for its €2.5bn rights Its March rights issue saw Morgan Stanley took 20% of the
however. ISSUEûTOûlNANCEûTHEû take-up of 98.8% and was more underwriting while fellow
The Canaan deal could decide ACQUISITIONûOFû!RQIVASû5+û than 17 times subscribed. global coordinators Goldman
the fate of two peers currently telecoms division. A measure of how Cellnex’s Sachs and JP Morgan had 15% of
waiting in the wings. If it is a Take-up for the rights issue, share price has developed the risk each.
success, EBANG INTERNATIONAL and Cellnex’s second this year, was through the year is that both Of the bookrunners,
BITMAIN TECHNOLOGIES will feel 99.53% leaving a tiny amount of rights issues represented a 29% CaixaBank and Santander
MOREûCONlDENTûABOUTûTHEIRûOWNû shares to meet the excess capital increase at a 20% TERP had 9% each, BNP Paribas 6%
prospects. demand. discount but the second deal and Banca IMI, Citigroup,
All three bitcoin mining Pro rata allocation meant RAISEDûMOREûTHANûDOUBLEûTHEûlRSTû Deutsche Bank, HSBC and
EQUIPMENTûMAKERSûlRSTû investors vying for additional Demand was again bound to Mediobanca 4% each. Final
applied for Hong Kong IPOs new shares received just be high as Cellnex’s share price bookrunner UniCredit had
BEFOREûTURNINGûTOûTHEû53ûASû 0.000125% of their requests. reached all-time highs of €42.05 2% of the risk, the same as
regulatory scrutiny was too )NVESTORSûMASSIVELYûINmATEDû on October 17, around 18.5% co-leads Banco de Sabadell
burdensome in Hong Kong. their orders due to the pro rata higher than when the and Societe Generale.
Ebang and BitMain, which approach to unsubscribed acquisition and rights issue 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 according to a banker at one of BEHINDûTHEû53ûANDûTHEû%5ûISû The new euro bonds will be
sovereign bond issue in 15 the euro trade’s lead managers. China’s biggest trading partner. unrated.
years, in a bid to further expand China, now the world’s While the structure of the Investors are likely to
its global presence amid slowing second-largest economy, is tranches has yet to be decided, consider Israel (A1/AA–/A+) and
domestic growth and persistent expanding its footprint in the the sovereign is likely to avoid Chile (A1/A+/A) as the best
TRADEûTENSIONSûWITHûTHEû53 international bond markets. It CLASHESûWITHûITSû53ûDOLLARûBONDSû comps.
The multi-billion euro bond ended a decade-long absence Currently, China has dollar All three similarly rated
offering is set to be priced on FROMûTHEû53ûDOLLARûMARKETûINû benchmarks maturing in 2022, sovereigns have dollar bonds
November 5 and is likely to October 2017, when it printed 2023, 2027, 2028 and 2048. maturing in 2028. China’s
comprise three benchmark 53BNûOFûSOVEREIGNûBONDSûTOû In a net roadshow, China said October 2028s are bid at a
tranches as China seeks to overwhelming demand. it is considering issuing senior Z-spread of 56bp; Israel’s
become the latest emerging It returned in October last UNSECUREDûlXED RATEûBONDSûWITHû January 2028s are at plus 56bp,
markets sovereign to take YEARûFORûAûFURTHERû53BNûAGAINû TENORSûOFûlVEûTOûûYEARSûWITHû while Chile’s February 2028s are
advantage of the attractive attracting strong demand seven, 12 and 20-year tenors at plus 73bp, according to
coupons in the euro market. despite a global market sell-off preferred. The bonds will be Tradeweb.
The Chinese government during bookbuilding. listed in London and Paris. In euros, Israel’s January
plans to host a ceremony on -O&ûOFlCIALSûINû*ULYûHELDû 2029s, the closest maturity to its
November 6 in Paris to celebrate lXED 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 speculating that a potential likely to seek very tight pricing. China’s October 2028 dollar
4HEûISSUEûWILLûBEûTHEûlRSTûTIMEû sovereign euro bond was on the When the sovereign returned to bonds are bid at the equivalent
the sovereign has accessed the cards. the dollar market two years ago, of plus 29bp in euros.
single currency since 2004. Several EM sovereigns across it printed so tightly that it Depending on the tenors
“It is a good time to issue as the ratings spectrum, such as repriced the dollar curves of chosen, euro investors should
trade talks seem to be Saudi Arabia, Kazakhstan, Ivory Chinese state-owned still get a positive yield from the
progressing well,” said Leo Hu, #OASTûANDû5KRAINEûHAVEûTAPPEDû enterprises, though SOEs’ euro deal.
senior portfolio manager for the euro this year attracted by paper tends to be closely held Bank of China, Bank of
emerging markets debt at NN compelling yields. and is less liquid. Communications, China
Investment Partners. “China Building a euro curve will In its October 2017 offering, International Capital Corp, Bank of
CDS is trading close to its enable China to diversify its #HINAûPRICEDûITSû53BNûOFû America, Citigroup, Commerzbank,
historic lows for the last 10 investor base, having already SûANDû53BNûOFûSûATû Credit Agricole, Deutsche Bank,
years, and euro benchmark ISSUEDûINû53ûDOLLARSûOVERûTHEû 15bp and 25bp over Treasuries, HSBC, Societe Generale, Standard
bonds are still at negative rates.” past two years. respectively. That was inside the Chartered and UBS are joint lead
4HEREûWILLûBEûAûPOTENTIALû53û 0RICINGûANDûDIVERSIlCATIONû secondary curve of Triple A managers and joint
dollar-denominated sovereign aside, China has a natural need rated Sweden. 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 TOûûREDUCTIONSûANNOUNCEDûINû!UGUST (EûSAIDû(3"#ûALSOûNEEDSûTOûSIMPLIFYûITSû
QUARTERûANDûITSûINVESTMENTûBANKû STRUCTUREûTOûREMOVEûCOMPLEXITYûANDûCOSTSû
UNDERPERFORMEDûRIVALS LONG SLOG 4HATûHASûBEENûAûFAMILIARûPROBLEMûFORûTHEûBANK
4HATûMEANSûMAJORûJOBûCUTSûANDû 1UINNûSAIDûTHEûBUSINESSESûINûTHEû53ûANDû "UTûTHEûRESTRUCTURINGûOFûTHEû5+ûINVESTMENTû
RESTRUCTURINGûAREûONûTHEûWAYûFORûTHEûBANKSû #ONTINENTALû%UROPEûNEEDûhDECISIVEûACTIONvû BANKû ûORûNON RINGûFENCEDûBANKû.2&" û ûANDû53û
BUSINESSESûINû%UROPEûANDûTHEû53ûESPECIALLYû TOûIMPROVEûALTHOUGHûKEEPINGûAûPRESENCEûINû OPERATIONSûCOULDûBEûAûLONGûSLOGûANALYSTSûSAID
INûITSûGLOBALûBANKINGûANDûMARKETSûDIVISION BOTHûAREASûWASûIMPORTANT h7EûEXPECTûRESTRUCTURINGûOFûUNDERPERFORMINGû
h)TûISûCLEARûTHATûWHILEûWEûHAVEûMANYûPARTSû h7EûWILLûPROBABLYûHAVEûTOûREDUCEûTHEû 5+û.2&"ûANDû53ûBUSINESSESûûTOûTAKEûAûLONGû
OFûOURûPORTFOLIOûTHATûAREûPERFORMINGûWELLûWEû 27!SûINûBOTHûTHOSEûMARKETSûANDûTHENû TIMEûINCURûSIGNIlCANTûCHARGESûANDûMEANû
ALSOûHAVEûPARTSûWHEREûTHEûPERFORMANCEûISû REDEPLOYûSOMEûOFûTHATûCAPITALûINTOûTHEûHIGHERû REPORTEDûRETURNSûAHEADûOFûCOSTûOFûEQUITYûAREû
UNACCEPTABLEvûSAIDû.OELû1UINNûWHOûTOOKû GROWTHûOPPORTUNITIESvûHEûTOLDûREPORTERSûONû LIKELYûTOûTAKEûSEVERALûYEARSûTOûACHIEVEvû"ARCLAYSû
OVERûASûINTERIMûCHIEFûEXECUTIVEûINû!UGUST. AûCONFERENCEûCALL ANALYSTû#HRISû-ANNERSûSAIDûINûAûNOTE
1UINNûTOOKûCHARGEûAFTERûCHAIRMANû-ARKû 4HATûWILLûINCLUDEûSHIFTINGûASSETSûTOû!SIAû -ANNERSûESTIMATEDûTHEûRESTRUCTURINGûCOULDû
4UCKERûUNEXPECTEDLYûOUSTEDûPREVIOUSû#%/û EVENûTHOUGHûTHEûREGIONûALREADYûACCOUNTEDû TAKEûOUTû53BNûOFû27!SûANDû53BNûINûCOSTSû
*OHNû&LINTûONLYûûMONTHSûINTOûTHEûJOBû1UINNû FORûûOFûADJUSTEDûPROlTSûLASTûQUARTER FROMûTHOSEûTWOûBUSINESSESûBUTûALSOûSEEûANNUALû
SAIDûHEûWOULDûLIKEûTHEûJOBûPERMANENTLYûANDû REVENUESûDECLINEûBYû53BNûANDûINVOLVEû
MIXED BAG IN EUROPE AS HSBC, DEUTSCHE
MANYûSEEûHISûACTIONSûNOWûASûHISûAUDITION 53BNûOFûRESTRUCTURINGûCHARGESûBYû
STRUGGLE; Q3 REVENUE % CHANGES VS YEAR
(EûWASûUNUSUALLYûSCATHINGûANDûBLUNTû
ABOUTûTHEûBANKûNEEDINGûTOûRESTRUCTUREûANDû AGO; DEUTSCHE NO LONGER DISCLOSES GBM STRUGGLE
CHANGEûSTRATEGY EQUITIES REVENUES (3"#ûSAIDûPRE TAXûPROlTûFORûTHEûQUARTERûENDEDû
(3"#ûDROPPEDûITSûRETURNûONûTANGIBLEû 70 3EPTEMBERûûWASû53BNûDOWNûFROMû
EQUITYûTARGETûOFûûFORûû)TSû2O4%ûINû1û 60 53BNûAûYEARûEARLIERû)TûWASûWELLûBELOWûANû
WASûJUSTûûANDûISûûSOûFARûTHISûYEAR 50 AVERAGEûFORECASTûOFû53BNûFROMûANALYSTSû
(3"#SûNEAR TERMûOUTLOOKûHASûBEENûCLOUDEDû 2EVENUESûWEREûDOWNûûATû53BN
40
BYûMONTHS LONGûANTI GOVERNMENTûPROTESTSûINû !DJUSTEDûPROlTûINû'"-ûFELLûûFROMûAû
30
(ONGû+ONGûITSûSINGLEûLARGESTûPROlTûCENTREû YEARûAGOûTOû53BNû2EVENUESûFROMûlXEDû
COMPOUNDINGûANûALREADYûDIFlCULTûENVIRONMENTû 20 INCOMEûCURRENCIESûANDûCOMMODITIESûWASû
FORûTHEûBANKûAMIDûSLOWINGûGLOBALûGROWTHûANDû 10 DOWNûûFROMûAûYEARûEARLIERûTOû53BNû
THEûCONTINUEDû3INO 53ûTRADEûDISPUTE WITHû&8ûRATESûANDûCREDITûALLûFALLINGû%QUITIESû
0
4HEû!NGLO !SIANûBANKûSAIDûITSûEXPECTEDû REVENUESûFELLûûTOû53M
-10
CREDITûLOSSESûINCREASEDûBYûALMOSTû53Mû 4HATûWASûONEûOFûTHEûWORSTûPERFORMANCESûINû
INû1ûPARTLYûDUEûTOûTHEûCHANGEûINûECONOMICû -20 BOTHû&)##ûANDûEQUITIESûTRADINGûOFûANYûOFûTHEû
OUTLOOKûFORû(ONGû+ONG -30 MAJORûBANKSûHIGHLIGHTINGûTHEûNEEDûFORûTHEû
Barclays

Credit Suisse
US big 5
banks avg

UBS

HSBC

BNPP

weighted avg
Deutsche

Europe

)TûALSOûWARNEDûITûFACESûSIGNIlCANTûCHARGESû -40
BANKûTOûTAKEûACTIONûTOûIMPROVEûSEEûCHART 
INûTHEûFOURTHûQUARTERûFROMûPOTENTIALûCOSTSû 'LOBALûBANKINGûWHICHûINCLUDESû-!û
FORûLAYINGûOFFûSTAFFûEXITINGûBUSINESSESû ADVISORYûANDûDEBTûANDûEQUITYûUNDERWRITINGû
RESTRUCTURINGûANDûGOODWILLûWRITEDOWNSûASû FICC Equities Advisory/underwriting FAREDûBETTERûWITHûREVENUESûUPûûFROMûAû
WELLûASûFROMûANYûDETERIORATIONûINûTHEû Source: Company results, IFR calculations; not all divisions YEARûEARLIERûATû53M
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

CREDIT SUISSEûWANTSûTOûHIREûTECHNOLOGYûANDû !MINEûHEADûOFûINVESTMENTûBANKINGûANDû !NûINVESTIGATIONûBYû#REDITû3UISSEûFOUNDû
HEALTHCAREûINVESTMENTûBANKERSûINûAûPUSHûTOû CAPITALûMARKETSûh4HEûBUSINESSûHASû THATû"OUEEûHADûORDEREDûTHEûBANKSûHEADûOFû
TURNûAROUNDûITSûMISlRINGûUNDERWRITINGûANDû UNDERPERFORMEDûOURûEXPECTATIONSûTHISûYEARû SECURITYûTOûDEPLOYûPRIVATEûINVESTIGATORSûTOû
ADVISORYûUNIT BUTûTECHNOLOGYûANDûHEALTHCAREûAREûDOINGû FOLLOWû+HANûFEARINGûHEûMIGHTûPOACHûSTAFFû
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BANKSûINVESTMENTûBANKINGûANDûCAPITALû MARKETSûTWOûFASTESTûGROWINGûAREASvûSAIDû APPROPRIATEvûANDûAûONE OFFûINCIDENT
MARKETSûDIVISIONûFELLûûTOû53MûFROMûAû !MINE h4HEREûISûNOûEVIDENCEû)ûKNEWûABOUTûTHISû
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TOûAûPRE TAXûLOSSûOFû53Mû4HEû3WISSûBANKû AREASûnûINDUSTRIALSûANDûSPONSORSûnûWEREûBOTHû
BLAMEDûhSIGNIlCANTLYûFEWERû-!û BELOWûlVE YEARûAVERAGESûBUTûVOLUMESûAREû FICC SURGE
COMPLETIONSûANDû;A=ûREDUCEDûLEVELûOFû)0/Sv STARTINGûTOûRECOVER #REDITû3UISSEûENJOYEDûAûREBOUNDûINûTRADINGû
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AFTERûTHREEûGOODûYEARSûTHEûDIVISIONûWASûNOWû SHAREûGAINSûINûTECHNOLOGYûANDûHEALTHCAREvû ADVISORYûREVENUESû3ALESûANDûTRADINGû
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SOMEûNOTABLEûDEALSûCANCELLEDû4HEûPIPELINEû "ANKûOFû!MERICAûAREûMAKINGûSIGNIlCANTû 53BNûINCLUDINGû!SIA 0ACIlC
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BUSINESSûTOûGAINûMARKETûSHAREûINûAREASû NO FALLOUT FROM SCANDAL WEAKûYEAR EARLIERûPERFORMANCEû4HEûBANKû
WHEREûITûSEESûMARKETûGROWTHûTAKINGûAû 4HIAMûSAIDûTHEûCONTROVERSIALûDEPARTUREûOFû SAIDûITûREmECTEDûhCONTINUEDûINVESTORûDEMANDû
DIFFERENTûTACKûTOûRIVALû5"3ûWHICHûISûCUTTINGû )QBALû+HANûASûHEADûOFûINTERNATIONALûWEALTHû FORûYIELDûPRODUCTSv
SENIORûINVESTMENTûBANKERSûTOûRESTOREûPROlTSû MANAGEMENTûTOû5"3ûHADûNOTûAFFECTEDû#REDITû !NDREWû#OOMBSûANALYSTûATû#ITIGROUPû
INûTHEûAREA 3UISSE SAIDûh4HEûBANKSûBUSINESSûMIXûDOESûAPPEARû
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ONûQUARTERLYûRESULTSû)TûISûAûVOLATILEûBUSINESSvû MANAGEMENT=ûDAILYûBUTûTHEREûHASûBEENûNOû FOR LONGERûRATESv
SAIDû4HIAMûh7EûHAVEûLOSTûGROUNDûBUTûWEû IMPACTûONûOURûCLIENTSvûHEûSAIDû(EûREITERATEDû
HAVEûPLANSûTOûINVESTûINûRECRUITMENTû4HATû THATûHEûWASûNOTûAWAREûOFûTHEûUNDERCOVERû BNPP BOUNCE
DOESNTûHAPPENûOVERNIGHTû)TûTAKESûTIMEûTOû SURVEILLANCEûOFû+HANûWHICHûLEDûTOûTHEû 2IVALûBNP PARIBASûALSOûHADûAûGOODûQUARTERûINû
BRINGûONûGOODûPEOPLEv RESIGNATIONûOFûCHIEFûOPERATINGûOFlCERû0IERRE lXEDûINCOMEûSEEINGûREVENUESûSURGEûûTOû
!ûBUDGETûHASûBEENûAGREEDûWITHû*IMû /LIVIERû"OUEEûONû/CTOBERû õMû4HEû&RENCHûBANKûREPORTEDûAûû

Coben to return to BofA

Craig Coben WILLûRESUMEûASûVICE CHAIRMANûOFû INVESTIGATEDûAûREPORTEDûACCIDENTALûDISCLOSUREû AûSURPRISEûaMûCAPITALûINCREASEûTHEû
GLOBALûCAPITALûMARKETSûATûBANK OF AMERICAûINû OFûINSIDEûINFORMATION FOLLOWINGûWEEKûCAUSINGûITSûSHARESûTOûFALL
.OVEMBERûFOLLOWINGûAûlVE MONTHûLEAVEûOFû 5+ûPUBLICATIONû0RIVATEû%YEûREPORTEDûINû-AYû
ABSENCE THATû#OBENûACCIDENTALLYûBROADCASTûAû THE INNOCENT
(ISûSTARTûDATEûHASûNOTûYETûBEENûlNALISEDû CONVERSATIONûINû&EBRUARYûONû0ERISCOPEûTHEû 4HEû&#!ûISûUNDERSTOODûLASTûMONTHûTOûHAVEû
BUTûITûISûEXPECTEDûTOûBEûINûTHEûNEXTûTWOûWEEKS LIVE STREAMINGûSERVICEûOFû4WITTERûDISCLOSINGû CLEAREDû#OBENûOFûWRONGDOINGûALLOWINGûHIMû
#OBENûHASûBEENûONûLEAVEûSINCEû-AYûWHILEû THATû-ETROû"ANKûWASûPLANNINGûAûCAPITALû TOûRETURNûTOûHISûPOSTû4HEû&#!ûDECLINEDûTOû
"RITAINSû&INANCIALû#ONDUCTû!UTHORITYû INCREASEû4HEû5+ûCHALLENGERûBANKûANNOUNCEDû COMMENT

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
5NLIKEûOTHERûBANKSû".0û0ARIBASûINCLUDESû lNANCIALûADVISORYûASSETûMANAGEMENTûANDû DEALSûACROSSû%UROPEûANDû!SIA
ALLûITSûPRIMARYûUNDERWRITINGûREVENUESûFROMû CORPORATEûOPERATIONSûEQUIVALENTûTOûABOUTûû h4RADEûANDûGEOPOLITICALûUNCERTAINTYûPERSISTEDû
DEBTûCAPITALûMARKETSûINûITSûlXEDûINCOMEû OFûITSûWORKFORCE ANDûGLOBALûEQUITYûMARKETSûWEREûVOLATILEvû*ACOBSû
DIVISIONûWHICHûALSOûINCLUDESûCURRENCIESûANDû 4HEûlRMûANNOUNCEDûTHEûCHANGESûASûITû SAIDûh.ONETHELESSûOURûlNANCIALûADVISORYû
COMMODITIES REPORTEDûLACKLUSTREûTHIRD QUARTERûRESULTSûANDû ACTIVITYûGAINEDûMOMENTUMv
h!ûYEARûAGOûTHISûWASûNOTûAûGREATûQUARTERû AFTERûAûmURRYûOFûSENIORûDEPARTURESû (EûSAIDûBEINGûAûGLOBALûADVISERûCANûBACKlREû
FORûUSûBUTûWEûHAVEûSEENûAûSTRONGûRECOVERYvû "UTûRATHERûTHANûSIGNALLINGûAûRETREATûINûTHEû WHENûSOMEûMARKETSûAREûSLOWû)NDEEDûRIVALû
SAIDûCHIEFûOPERATINGûOFlCERû0HILIPPEû FACEûOFûAûWEAKERû-!ûMARKETû,AZARDûSAIDûTHEû INDEPENDENTûBANKSûWHICHûRELYûONûTHEû53ûFORû
"ORDENAVE CUTSû ûORûREALIGNMENTû ûSIGNALLEDûTHEû THEûLARGESTûPORTIONûOFûTHEIRûREVENUEû
#OSTSûROSEûûACROSSû#)"ûASû".0û0ARIBASû INDEPENDENTûINVESTMENTûBANKûISûFOCUSINGûONû PERFORMEDûBETTERûINûTHEûQUARTER
PURSUEDûITSûSAVINGSûPROGRAMMEûWITHûõMû AREASûWHEREûITûSEESûGROWTH MOELISûREPORTEDûTHIRD QUARTERûREVENUEûOFû
OFûCOSTûSAVINGSûTAKENûOUTûOFûTHEû#)"ûINûTHEû 4HEûTOTALûNUMBERûOFûMANAGINGûDIRECTORSûISû 53MûUPûûFROMûTHEûYEARûAGOûQUARTERû
QUARTERû4HATûALLOWEDûPRE TAXûPROlTûTOûRISEû LIKELYûTOûINCREASEûNEXTûYEARûSAIDû,AZARDûCHIEFû and PJT PARTNERS’ûREVENUEûOFû53MûWASû
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/NûTHEûEQUITIESûSIDEû".00û WOULDûLIKELYûPICKûUPûBANKERSûINûSHAREHOLDERû
UNDERPERFORMEDûWITHûREVENUESûSLIPPINGû ANDûCAPITALûADVISORYûWITHûSOMEûhINCREMENTALû FRENCH CHIEF
ûTOûõM INVESTMENTvûINûTHEû53ûANDûSOMEûPLACESûINû %ARLIERûLASTûWEEKûLAZARDûAPPOINTEDûJean-Louis
4HATûCOULDûCHANGEûINûTHEûCOMINGû %UROPEûWHEREûTHEYûSEEûOPPORTUNITY GirodolleûASûHEADûOFûINVESTMENTûBANKINGûINû
MONTHSûASûTHEûBANKSûDEALûTOûBUYû &RANCEûTOûSUCCEEDû-ATTHIEUû0IGASSEûWHOûSAIDû
$EUTSCHEû"ANKSûELECTRONICûEQUITIESû “HARD LOOK” LASTûMONTHûHEûWOULDûLEAVEûATûTHEûENDûOFûTHEû
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ITSûPRIMEûSERVICESûACCOUNTSûISûEXPECTEDûTOû MONTHSûAGOû2USSOûSAID INVESTMENTûBANKING
COMPLETEûSHORTLYûACCORDINGûTOû h7EûSTARTEDûTOûTAKEûAûHARDûLOOKûATûTHEû 'IRODOLLEûJOINEDû,AZARDûINûûASûAû
"ORDENAVE BUSINESSûGIVENûTHEûCURRENTûENVIRONMENTûANDû MANAGINGûDIRECTORûFROMûTHEû&RENCHûMINISTRYû
4HEûDEALSûTERMSûWEREûAGREEDûATûTHEûENDû THEûRESULTSûONûTHEûREVENUESvûHEûSAIDûh7EûTOOKû OFûlNANCEûWHEREûHEûWASûDIRECTORûATû!0%ûTHEû
OFû3EPTEMBERûWHICHûCOULDûSEEûANû AûHARDûLOOKûATûOURûBUSINESSûTOPûDOWNûBOTHû &RENCHûGOVERNMENTûSHAREHOLDINGûAGENCYû(Eû
ESTIMATEDûõBNûOFûASSETSûTRANSFERREDûFROMû SIDESûOFûTHEûBUSINESSûûANDûDECIDEDûWHEREûWEû WASûPREVIOUSLYûANûADVISERûTOû,AURENTû&ABIUSû
$EUTSCHE WANTEDûTOûHAVEûOPPORTUNITIESûFORûGROWTHv WHENûHEûWASûlNANCEûMINISTERûBETWEENûû
Christopher Spink ,AZARDûCHIEFûEXECUTIVEû+ENû*ACOBSûTOLDû ANDûûAMONGûOTHERûROLES
ANALYSTSûTHATûFUTUREûGROWTHûOPPORTUNITIESû ,AZARDûALSOûAPPOINTEDûCharles-Henri Filippi
INCLUDEûTHEûEXPANSIONûOFûTHEûBANKSûFOOTPRINTû and Francois KayatûASûCO CHAIRSûOFûINVESTMENTû
4HEû%#-ûVETERANSûINPUTûWILLûBEûWELCOMEDûASû INû.ORTHû!MERICAûANDûBUILDINGûONû BANKINGûINû&RANCEû&ILIPPIûJOINEDûTHEûlRMûINû
THEû%UROPEANû)0/ûMARKETûISûINûTURMOILû!FRICANû MOMENTUMûINûITSûNON -!ûADVISORYû -ARCHûûFROMû#ITIGROUPûANDû+AYATûJOINEDû
%XPORT )MPORTû"ANKûBECAMEûTHEûLATESTûCASUALTYû PRACTICESûGLOBALLY THEûlRMûINû
LASTûWEEKûCANCELLINGûITSû53Mû,ONDONû'$2û 2EVENUEûATû,AZARDûFELLûûTOû53MûINû 0IGASSEûWASûALSOûDEPUTYûCHIEFûEXECUTIVEûOFû
mOATûANDûTAKINGûTHEûPOST SUMMERûCANCELLATIONSû THEûTHIRDûQUARTERûCOMPAREDûTOûTHEûYEARûAGOû lNANCIALûADVISORYûACROSSûTHEûWHOLEûlRMûANDû
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PRICEDûINû%UROPEûSINCEûTHEûENDûOFû!UGUSTûJUSTû QUARTERûINCLUDEDû53MûINûEXPENSESû WHOûMOVEDûTOû'REENHILLûANDû%RICû,ALOûWHOû
THREEûOFûWHICHûHAVEûSHARESûTRADINGûABOVEûTHEIRû RELATEDûTOûTHEûSTAFFûCUTS QUITûAFTERûûYEARSûATû,AZARDûANDûHASûSINCEû
)0/ûPRICES 2EVENUEûFROMûITSûlNANCIALûADVISORYûGROUPû JOINEDûARCH RIVALû2OTHSCHILDûû#O
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
Bellwether: n. From the practice of placing a bell around the OFûTHEû'ERMANû-ITTELSTANDû4HENûAGAINûTHEREûISûAû'ERMANû
neck of a castrated ram so that it might lead its flock TRADITIONûOFûHIDINGûMONEYûINû!RGENTINA
"UTûASûSURPRISESûGOûITûCOULDûHAVEûBEENûWORSEûh7Eû
./%,û15)..û3425#+ûAûBULLISHûNOTEûWHENûHEûPROMISEDû ASSUMEDûITûWASûGOINGûTOûTELLûUSûITûHADûSOMEHOWûGOTûITSELFû
hDECISIVEûACTIONvûTOûADDRESSû(3"#SûBLOATEDûCOSTûBASEûANDû INVOLVEDûINûTHEû#REDITû3UISSEûSPYINGûSCANDALûBUTûTHATûSEEMSû
TROUBLEDûOPERATIONSûINûTHEû53ûANDû%UROPEûWITHûITSûTHIRD TOûHAVEûBEENûAûSCANDALûITûMANAGEDûTOûAVOIDvûSAIDûONEûWAGû
QUARTERûRESULTS
1UINNûISûINTERIMû#%/ûBUTûWANTSûTHEûJOBûFULLûTIMEûANDû /.û4(!4û./4%û#REDITû3UISSESû-!ûADVISORYûBUSINESSûHADûAû
HESûPOSITIONEDûHIMSELFûASûAûMANûOFûACTIONûBYûANNOUNCINGû LOUSYûQUARTERûBUTû#%/û4IDJANEû4HIAMûSEEMEDûREMARKABLYû
THOUSANDSûOFûJOBûCUTSûANDûAûREVIEWûOFûTHEûGLOBALûEQUITIESû CALMû7HILEû5"3ûRESPONDEDûTOûAûTORRIDûQUARTERûBYûlRINGû
BUSINESS SOMEûOFûITSûMANAGINGûDIRECTORSû#REDITû3UISSEûHASûPLEDGEDûTOû
(ESûNOTûMESSINGûAROUNDûBUTûNORûISûHEûDAFTû(Eû INVESTûINûTALENT
PROMISEDûhJAMûTOMORROWvûBYûPLEDGINGûTOûGIVEûFULLûDETAILSû 4HIAMûPLAYEDûANûEQUALLYûSTRAIGHTûBATûREITERATEDûTHATûHEû
OFûHISûSTRATEGYûINû&EBRUARYûûTHEREBYûEXTENDINGûHISû HADûNOûKNOWLEDGEûhEITHERûDIRECTLYûORûINDIRECTLYvûOFû#REDITû
HONEYMOONûPERIOD 3UISSESûDECISIONûTOûHIREûSPIESûTOûFOLLOWûITSûFORMERûHEADûOFû
3ENSIBLYûHEûDIDNTûPUTûANYûPRECONDITIONSûONûHISûPLANSû WEALTHûMANAGEMENTû)QBALû+HANû
LIKEûAûPREFERENCEûTOûDIEûINûAûDITCHûIFûHEûDOESNTûDELIVER 3OûNOTHINGûTOûSEEûHEREû/RûISûTHEREû7HENûBANKSû
h)ûHOPEûTOûSEEûYOUûATû1vûHEûJOKEDûATûTHEûENDûOFû BRINGûNEWûFACESûINûTHEYûRARELYûMISSûTHEûOPPORTUNITYûTOû
THEûBANKSûRESULTSûPRESENTATIONû&ORûALLûHISûTALKûOFû PUSHûOTHERSûOUTûINûAûPROCESSûEUPHEMISTICALLYûKNOWNûASû
REMODELLINGûTHEûBANKûHESûPLAYINGûAûTACTICALûGAMEûNOTûAû hUPGRADINGvû!NDûBETWEENûNOWûANDûTHEûENDûOFûTHEûYEARûITû
LONGûONE WILLûBEû#REDITû3UISSESûINVESTMENTûBANKERSûWHOûMAYûGETûTHEû
FEELINGûTHEYûAREûBEINGûWATCHEDûnûANDûTHISûTIMEûITûWILLûBEûTHEû
!.$û3/û4/û$EUTSCHEû"ANKSûTHIRD QUARTERûRESULTSû BOSSûLOOKINGûOVERûTHEIRûSHOULDERû
PRESENTATIONûANDûTHEûQUARTERLYûGAMEûOFûhPINûTHEûTAILûONûTHEû
DONKEYvûWITHûTHEûDONKEYûINûQUESTIONûBEINGûWHOûORûWHATûISû "%,,7%4(%2û)3û$%,)'(4%$ûTHATû#RAIGû#OBENûISûRETURNINGûTOûHISû
RESPONSIBLEûFORûDRAGGINGûTHEûBANKûINTOûTHEûRED POSTûASûVICE CHAIRMANûOFûGLOBALûCAPITALûMARKETSûATû"ANKûOFû
!NDûYOUûHAVEûTOûADMIREûTHEûWAYû$EUTSCHEûCANûCONJUREû !MERICAûFOLLOWINGûAûlVE MONTHûLEAVEûOFûABSENCE
NEWûWAYSûOFûLOSINGûMONEY #OBENûISûRETURNINGûAFTERûTHEû&#!ûCLEAREDûHIMûOFûANYû
4HISûTIMEûTHEûPINûWASûSTUCKûlRMLYûINTOû!RGENTINAû WRONGDOINGûFOLLOWINGûAûREPORTEDûACCIDENTALûDISCLOSUREûOFû
ALTHOUGHû#&/û*AMESûVONû-OLTKEûWOULDNTûGOûINTOûTOOûMUCHû INSIDEûINFORMATIONû0ERHAPSûHEûSPENTûHISûTIMEûOFFûRE READINGû
DETAILûPRESUMABLYûWHATûGOESûONûTOURûSTAYSûONûTOUR  SOMEûOFûHISûBROTHERû(ARLANSûPAGE TURNERSû&ULLYûVINDICATEDû
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WITHû#HRISTIANû3EWINGSûVISIONûFORû$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
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regulators’ and policy makers’
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SOCIALûCHALLENGESûANDûITSûWORKûWITHûCLIENTSû TOûTHEûBANKSûSUSTAINABILITYûANDûCLIMATEû
LOOKINGûFORûSUSTAINABLEûlNANCING CHANGEûSTRATEGYûASûITûALIGNSûITSûCORPORATEû 4HEûMEMOûSAIDû%3'ûANDûSUSTAINABLEû
POLICYûWITHûCLIENT FACINGûTEAMS lNANCEûAREûINCREASINGLYûSIGNIlCANTûFORû
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“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
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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$IAMONDSû!TLASû
BACKûCASHûEQUITIESûINûTHEûWAKEûOFûSTIFFERû 2ESEARCHûFROMûTHEIRûCOMBINEDûûANALYSTSû -ERCHANTû#APITALûINVESTEDûINûTHEûlRMû
REGULATIONSûANDûTECHNOLOGYûDEVELOPMENTSû WILLûBEûCO BRANDEDûANDûDISTRIBUTEDûACROSSûTHEû WHICHûHASûEQUITYûTRADINGûANDû%#-ûJOINTû
CRIMPINGûMARGINS JOINTûPLATFORMû4HEûSERVICEûWILLûALSOûOFFERû VENTURESûWITHû#REDITû!GRICOLEû5NI#REDITû
4HEû!USTRALIANûBANKûSAIDûITûWILLûLARGELYû GLOBALûPROGRAMMEûTRADING 2ABOBANKûANDûSEVERALûOTHERû%UROPEANû
WITHDRAWûFROMûTHEûBUSINESSûOUTSIDEûITSûCOREû -ACQUARIEûSAIDûITûISûSEEKINGûSTRATEGICûPARTNERSû BANKS
!SIA 0ACIlCûREGION INûTHEû!MERICASûFORûAûSIMILARûJOINTûVENTURE 'UILLAUMEû#ADIOUûCHAIRMANûOFûTHEû
4HEûMOVEûCOULDûSEEûAROUNDûûJOBSûGOûINû 4HEûBANKûWILLûKEEPûANûEQUITYûCAPITALû MANAGEMENTûBOARDûSAIDûTHEûlRMûWASû
ITSûOPERATIONSûINû%UROPEûTHEû-IDDLEû%ASTûANDû MARKETSûSERVICEûACROSSûALLûTHREEûREGIONS GROWINGûHAVINGûSIGNEDûUPûûNEWûCLIENTSû
!FRICAûANDûTHEû!MERICASû'LOBALLYûûPEOPLEû -ACQUARIEûWILLûSTILLûSERVICEûGLOBALû TOûITSûRESEARCHûSERVICEûINûTHEûCURRENTûYEARû
WORKûINûCASHûEQUITIESûATûTHEûlRM INSTITUTIONALûCLIENTSûWITHû!SIA 0ACIlCûEQUITYû MOREûTHANûTHEûûSIGNEDûUPûFORûTHEûWHOLEû
-ACQUARIEûSAIDûITSûDECISIONûHADûBEENûMADEû STRATEGIESûANDûEXECUTIONûASûWELLûASûDEALûINû OFû
hINûRESPONSEûTOûSTRUCTURALûCHANGESûINûTHEû SECURITIESûGLOBALLYûONûBEHALFûOFûITSûCORPORATEû 2OBERTû"ULLERûGLOBALûHEADûOFûACCOUNTû
BROADERûMARKETv CLIENTSûINûITSûHOMEûREGION MANAGEMENTûSAIDû+EPLERû#HEUVREUXûWASû
%UROPEANû5NIONû-I&)$û))ûRULESûINTRODUCEDû )Nû!SIA 0ACIlCûITûWILLûCONTINUEûTOûPROVIDEûAû OFTENûTHEûLARGESTûPROVIDERûOFûRESEARCHûINûLOCALû
INûûREQUIREûBANKSûTOûCHARGEûSEPARATELYûFORû FULLûEQUITIESûSERVICEû4HEûCASHûEQUITIESû %UROPEANûEQUITYûMARKETSû
RESEARCHûANDûEXECUTIONûANDûHAVEûRESULTEDûINû BUSINESSûISûPARTûOFûAûWIDERûMARKETSûPLATFORMû h7EûAREûTHEûLARGESTûPROVIDERûOFû%UROPEANû
SEVERALûlRMSûCUTTINGûBACKûTHEIRûSERVICESûINû INTEGRATEDûWITHûITSûlXEDûINCOMEû&8ûANDû RESEARCHûCOVERINGûûSTOCKSû4HATSûû
%UROPEû"ERENBERGûLAIDûOFFûûSTAFFûANDûINû COMMODITIESûTRADING MOREûTHANûOTHERSûIFûYOUûINCLUDEûTHEû5+ûANDû
!PRILû.OMURAûCUTûSOMEû%UROPEANûPOSITIONSû -ACQUARIEûONû&RIDAYûREPORTEDûAûRECORDû DOUBLEûANYONEûELSEûIFûYOUûDONTvûHEûTOLDû)&2
ANDûINû*ULYû$EUTSCHEû"ANKûSAIDûITûWASûPULLINGû lRST HALFûPROlTûOFû!BNû53BN ûUPûû h&ORûLOCALûMARKETSûLARGEûASSETûMANAGERSû
OUTûOFûEQUITIESûGLOBALLY FROMûAûYEARûAGOû#OMMODITIESûANDûGLOBALû HAVEûTOûHAVEûUSûASûONEûTHEIRûMAJORûRESEARCHû
MARKETSûHADûAûSTRONGûlRSTûHALFûWITHûPROlTû PROVIDERSv
EUROPEAN PARTNER CLIMBINGûûTOû!BNû%QUITIESûREVENUESû #ADIOUûSAIDûTHEûlRMûWOULDûCONSIDERû
-ACQUARIEûWANTSûTOûRETAINûAûPRESENCEûINû WEREûUPûAûTHIRDûTOû!M OTHERûDEALSûh7EûAREûSTILLûOPENûTOûOTHERû
%UROPEûANDûHASûSTRUCKûAûPARTNERSHIPûDEALû COOPERATIONûBUTûAREûNOTûACTIVELYûLOOKINGûATû
WITHû+EPLERû#HEUVREUXûALLOWINGûCLIENTSûOFû KEPLER GROWTH THEûMOMENTv
EACHûENTITYûTOûACCESSûTHEûOTHERSûSERVICESû +EPLERû#HEUVREUXûHASûGROWNûSINCEû-I&)$û))û Christopher Spink
4OGETHERûTHEYûWILLûCOVERûûSTOCKS WASûIMPLEMENTEDû,ASTûYEARûFORMERû"ARCLAYSû Additional reporting by Thomas Blott

StanChart stays cautious

STANDARD CHARTEREDûEXPRESSEDûDOUBTûABOUTû PLANSûFORûMOREûMAJORûRESTRUCTURINGûOFûITSû BANKûLEVYûISûACCOUNTEDûFORû(EûALSOûWARNEDû
HITTINGûITSûMEDIUM TERMûTARGETûOFûLIFTINGû INVESTMENTûBANKûANDû%UROPEANûANDû53û THATûCOSTSûWILLûBEûHIGHERûINûTHEûFOURTHû
RETURNSûABOVEûûDESPITEûPOSTINGûONû OPERATIONSûSEEû0-ûFRONTûPAGEûSTORY  QUARTERûDUEûTOûINVESTMENTûSPEND
7EDNESDAYûAûFORECAST BEATINGûûINCREASEû )NûCONTRASTû3TAN#HARTûREPORTEDûITSûHIGHESTû
INûPRE TAXûPROlTûFORûTHEûTHIRDûQUARTER THIRD QUARTERûPROlTûINûFOURûYEARSûWITHû REVENUE GROWTH
#HIEFûEXECUTIVEû"ILLû7INTERSûINû&EBRUARYû UNDERLYINGûPRE TAXûPROlTûUPûûYEARûONûYEARûTOû !LLûFOURûBUSINESSûUNITSûGREWûDURINGûTHEûTHREEû
SETûOUTûHISûSECONDûTHREE YEARûTURNAROUNDû 53BNûEXCLUDINGû53MûRESTRUCTURINGû MONTHSûTOû3EPTEMBERûûWITHûCORPORATEûANDû
PLANûSINCEûHEûTOOKûUPûTHEûREINSûINûû COSTSûCOMFORTABLYûABOVEûTHEû53BNûAVERAGEûOFû INSTITUTIONALûBANKINGûWHICHûINCLUDESûDEBTû
WHICHûINCLUDEDûIMPROVINGûRETURNûONû ANALYSTûFORECASTSûCOMPILEDûBYûTHEûBANK CAPITALûMARKETSûADVISORYûTRADINGûANDûTHEû
TANGIBLEûEQUITYûTOûûBYû MAJORITYûOFûTHEûBANKSûTRANSACTIONûBANKINGû
#HIEFûlNANCIALûOFlCERû!NDYû(ALFORDûSAIDû MAKING PROGRESS BUSINESSûREPORTINGûAûûRISEûINûREVENUESûTOû
LOWERûINTERESTûRATESûANDûRISINGûGEOPOLITICALû /NûEACHûOFûTHEûTARGETSûOUTLINEDûINû&EBRUARYû 53BN
TENSIONSûWILLûMAKEûTHEûTURNAROUNDûPLANûANDû THEûBANKûMADEûHEADWAYû2EVENUESûGREWûATû &INANCIALûMARKETSûREVENUESûJUMPEDûû
2O4%ûTARGETûAûTOUGHERûASK THEûTOPûENDûOFûITSûnûTARGETûUPûûYEARû TOû53MûASûTHEûBANKûBENElTEDûFROMû
h#LEARLYûTHEûPEOPLEûWITHINûTHEûBUSINESSû ONûYEARûTOû53BNûWHILEûEXPENSESûWEREû INCREASEDûMARKETûVOLATILITYû#REDITûANDû
AREûVERYûFOCUSEDûONûTRYINGûTOûGETûTHATûDOUBLE mATûATû53BNûINûLINEûWITHûITSûTARGETûOFû CAPITALûMARKETSûREVENUESûMOREûTHANûTRIPLEDû
DIGITûNUMBERûBECAUSEûWEûSEEûITûASûBEINGûAû KEEPINGûCOSTSûBELOWûINmATION TOû53MûWHILEû&8ûANDûCOMMODITIESû
VERYûIMPORTANTûONEûBOTHûSPECIlCALLYûANDû &ORûTHEûFOURûMARKETSû7INTERSûHASûSINGLEDû WEREûUPûûANDûûRESPECTIVELYûWITHûRATESû
PSYCHOLOGICALLYûvû(ALFORDûSAIDûh7ELLûDOû OUTûFORûIMPROVEMENTû û)NDIAû)NDONESIAû3OUTHû FALLINGû
EVERYTHINGûWEûCANûDOûBUTûTHEûWORLDûOUTSIDEû +OREAûANDûTHEû5!%û ûAGGREGATEûPROlTûWASûUPû 7ITHINû#)"ûREVENUESûFROMûCORPORATEû
ISûMAKINGûTHATûAûLITTLEûBITûMOREûTRICKYûATûTHEû ûALTHOUGHûTHEûBANKûDIDûNOTûPROVIDEûAûFULLû lNANCEûROSEûûTOû53MûWHILEû
MOMENTv BREAKDOWNûOFûITSûRESULTSûINûEACHûCOUNTRY TRANSACTIONûBANKINGûREVENUESûINCREASEDûû
"IGGERûRIVALû(3"#ûLASTûWEEKûDROPPEDûITSû )TSûUNDERLYINGû2O4%ûSTRENGTHENEDûBYû TOû53MûWITHûTRADEûCASHûMANAGEMENTû
TARGETûOFûû2O4%ûINûûAFTERû BPûTOûûALTHOUGHû(ALFORDûSAIDûTHISû ANDûSECURITIESûSERVICESûALLûUP
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
#ASINOûISûEXPECTEDûTOûSECUREûAûLIFELINEûONû BYûULTRA LOWûlNANCINGûCOSTSûINûTHEûCURRENCYû FORMATûINûFAVOURûOFûCONTROVERSIALû3$'ûBONDS
4HURSDAYûWHICHûOWNERû*EAN #HARLESû.AOURIû 4HEûDEALûCOMESûAûYEARûAFTERû#HINAûPRINTEDûAû53
HOPESûWILLûPUTûANûENDûTOûMONTHSûOFûQUESTIONSû DOLLARûDENOMINATEDûBONDûONLYûITSûSECONDûDEALû PEDDLE BINS #ANADIANûREFUSEûCOLLECTORû'&,û
OVERûITSûFUTUREû.AOURIûPUTûTHEûCOMPLEXûWEBûOFû INûTHEûCURRENCYûINûTHEûPASTûûYEARSû %NVIRONMENTALûHOPESûTOûRAISEû53BNûFROMû
COMPANIESûTHATûOWNû#ASINOûUNDERûPROTECTIONû ITSûDUALû.EWû9ORK 4ORONTOû)0/ûONû7EDNESDAYû
FROMûCREDITORSûINûWHATûHASûWIDELYûBEENûSEENûAû PUT INTO EFFECT $.%'ûWHICHûMAKESû )TSûCOMINGûTOûMARKETûDESPITEûSOMEûTOUGHû
SHREWDûMOVEûINûAûLONGSTANDINGûSTANDOFFûWITHû COMPUTER GENERATEDûSPECIALûEFFECTSûFORûTHEûLIKESû CONDITIONSûFOLLOWINGûTHEûCANCELLATIONûOFûSOMEû
SHORTûSELLERSûTARGETINGûTHEûGROUP OFû$ISNEYû3ONYû0ICTURESû!MAZONûANDûTHEû""#ûISû HIGH PROlLEû)0/Sû"UTûASûONEûBANKERûCLOSEûTOû
!TûTHEûCENTREûOFûTHEûDEBTûPACKAGEûISûAû EXPECTEDûTOûOPENûBOOKSûONûITSûaMû,ONDONû THEûDEALûSAYSûh4HISûISûNOTûAûTECHûCOMPANYx
õBNûSENIORûSECUREDûLOANûFROMûBANKSûTHATû )0/û!BOUTûHALFûOFûTHEûFUNDSûWILLûGOûBACKûINTOûTHEû THISûISûGARBAGEûWHICHûGETSûPRODUCEDûINûANûUPû
COULDûBEûHEAVILYûEXPOSEDûIFûTHEû#ASINOû BUSINESSûWITHûTHEûREMAINDERûGOINGûTOûSELLINGû MARKETûANDûINûAûDOWNûMARKETv
OWNERSHIPûSTRUCTUREûWEREûTOûCOLLAPSEû SHAREHOLDERSû4HEûCOMPANYûWILLûBEûHOPINGûITSû
4HEYREûHOPINGûTOûWRAPûUPûTHEûFACILITYûONû WORKûONûTHEûUPCOMINGû*AMESû"ONDûlLMûWITHû MIND THE GAP &REIGHTûRAILROADûOWNERû'ENESEEû
4HURSDAYûTHEûSAMEûDAYûTHATû#ASINOûHOPESûTOû PROVIDEûINVESTORSûWITHûAûGOODûSTORYûTOûBUYûINTO û7YOMINGûHASûACCELERATEDûTHEûDEADLINEûFORûAû
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STRUCTUREûWILLûBEûANYûMOREûSUSTAINABLEû GASûGIANTû.AFTOGAZûISûHOPINGûTOûRAISEû53Mû BUYOUTûOFûTHEûCOMPANYû"ROOKlELDû!SSETû
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PROVIDESûTRADEûlNANCEûISûALSOûTARGETINGû
DOLLARSûANDû$4%+û2ENEWABLESûWILLûBEûHOPINGû SPIN THE BOTTLE #HINESEûBABYûFORMULAûMAKERû
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PUTûOUTûAûCOVEREDûMESSAGEûLASTûWEEKû)TSûTHEû
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53BNûBRIDGEûLOANûBACKINGûITSûACQUISITIONûOFû VENTUREûINûû TOWARDSûlNANCINGûAûBUYBACKûOFûSOMEûOFûITSû
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BEûTHEûLASTûBIGû-!ûBONDûTRADEûOFûTHEûYEAR 53MûOFûTHEûBONDS

POST HASTE #HINAûISûBRACEDûFORûITSûBIGGESTû)0/û LAST WEEK IN NUMBERS

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DENOMINATEDûBONDûINûûYEARSû)TSûTHEûLATESTû FORûTHEûGREENûMARKETûFOLLOWINGûTHEûDECISIONûOFû

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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MANAGEMENTûBOSSûFabrizio CampelliûTOûAûNEWûROLEû CHIEFûEXECUTIVE MEMOûSEENûBYû)&2
OFûCHIEFûTRANSFORMATIONûOFlCERûRESPONSIBLEûFORû !SûPARTûOFûTHEûREORGANISATIONûMichael Ilgner ,INSENMAIERûWILLûREPORTûTOû-ARKû,EWELLENû
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BANKvûSAIDû0AULû!CHLEITNERûCHAIRMANûOFûTHEû BANKû)LGNERûJOINEDûFROMû$EUTSCHEû3PORTHILFEû Claes HomeniusûHASûBEENûAPPOINTEDûHEADûOFû
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RESPONSIBILITIESûONûTHEûBOARDû ûOVERSEEINGû Achim LinsenmaierûHASûBEENûAPPOINTEDû lLLEDûBYûSabine Nass.
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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5"3ûSAIDûINû3EPTEMBERûITûWOULDûCOMBINEû 5+û%#-ûVETERANûChris Smith ISûANOTHERûTOû 5"3ûDECLINEDûTOûCOMMENTûONûTHEû
%#-ûANDû$#-ûUNDERû"RENDANû#ONNOLLYû LEAVEûANDûSOûTOOûISûFORMERûGLOBALûHEADûOFû DEPARTURES
HEADûOFûLEVERAGEDûDEBTûCAPITALûMARKETSû %#-ûSam Kendallû+ENDALLûWASûMADEûHEADûOFû Owen Wild

Nomura bounces back

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2ESEARCHû)NSTITUTEûTHEûGROUPSûMANAGEMENTû AûMIXEDûPERFORMANCEûWITHûINVESTMENTû ANNOUNCEDû53BNûOFûCUTSûTOûADDRESSû
CONSULTINGûANDûRESEARCHûARMûINû*ULY BANKINGûPARTICULARLYûDEBTûCAPITALûMARKETSû UNDERPERFORMANCEûINûTHEûWHOLESALEû
4HISûYEARSûUNDERLYINGûRESULTSûWEREûBETTERû ANDû-!ûADVISORYûHOLDINGûUPûWELLûDURINGûAû BUSINESSû
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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ORDERûAPPOINTINGûRETIREDûBANKRUPTCYûJUDGEû NOWûRIPPINGûTHROUGHû#ALIFORNIAûCOULDûUPENDû #ALIFORNIAûGOVERNORû'AVINû.EWSONûSAIDûTHEû
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4HEûMEDIATIONûCOMESûASûBOTHûSIDESûMAYû CURRENTûlRESûASûAûTHREATûTOûTHEIRûRECOVERYvû "OTHûSIDESûWILLûNOWûRE EXAMINEûTHEIRû
BEûWILLINGûTOûTAKEûAûSTEPûBACK THEûADVISERûSAID RECOVERYûESTIMATESûASûTHEYûHEADûTOûCOURTû
!SûWILDlRESûBURNûACROSSûNORTHERNû 0'%ûSOUGHTûBANKRUPTCYûTOûDEFENDûITSELFû ORDEREDûMEDIATION
#ALIFORNIAûINVESTORSûlGHTINGûFORûCONTROLûOFû AGAINSTûOUTSIZEDûLIABILITYûFROMûFORESTûlRESûINû Philip Scipio

Mozambique Tuna bond restructuring gets go-ahead

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AUTHORISATIONSûANDûAPPROVALSvûHAVEûBEENû PARLIAMENTARYûELECTIONSûHADûBEENû UPûAûTUNAûlSHINGûmEETû4HEûCOUNTRYSûHIGHESTû
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4HEûDEALûHADûALREADYûBEENûBACKEDûBYûû WHEREûTHEYûSTOODûBEFOREûTHEûOFFERûTERMSû OBLIGATIONSûUNDERûTHEûNEWûNOTESvû4HEû
OFûBONDHOLDERS WEREûPUBLISHED ADMINISTRATIVEûCOURTûMUSTûALSOûCONlRMûTHEû
"UTûONû3EPTEMBERûûTHEûlNANCEûMINISTRYû 4HEûGENEROUSûDEALûWHICHûBARELYûGIVESûTHEû NEWûNOTESûLEGALITY
DELAYEDûFORMALûCOMPLETIONûOFûTHEûOFFERûBYûAû BONDSûANYûHAIRCUTûISûCONTROVERSIALûASûTHEûNOTESû Christopher Spink

Credit Suisse Asia loans head departs bankrupcty

Sergio MoritaûCREDIT SUISSE@SûHEADûOFû!SIA COMBINEDûDESKû-ORITASûRESPONSIBILITIESûWILLû !PRILûTOûCREATEûTHEû!0!#ûTRADINGûSOLUTIONSû
0ACIlCûLOANûSYNDICATIONSûHASûLEFTûAFTERûû MOVEûTOû#HIAûANDûTHEREûAREûNOûPLANSûTOûAPPOINTûAû GROUPûREPORTINGûTOû9VES !LAINû
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PEOPLEûWITHûKNOWLEDGEûOFûTHEûMATTER #REDITû3UISSEûDECLINEDûTOûCOMMENT )Nû*UNEû6ICKYû(EûHEADûOFûSYNDICATEûFORû
-ORITASûDEPARTUREûCOMESûTWOûMONTHSûAFTERû 4HEûMOVEûISûTHEûLATESTûINûAûSERIESûOFû .ORTHû!SIAûLEFTûAFTERûLESSûTHANûAûYEARû(ERû
#REDITû3UISSEûMERGEDûITSûLOANûANDûBONDûSYNDICATEû CHANGESûINûTHEûBANKSû!SIAûlNANCINGû REPLACEMENTûISûNOTûYETûINûPLACEû
TEAMSûINû!SIAûNAMINGû4ERENCEû#HIAûHEADûOFûTHEû DIVISIONûWHICHûWASûMERGEDûWITHûMARKETSûINû Prakash Chakravarti

24 International Financing Review November 2 2019

 SSAR  Corporates  FIG  Covered Bonds  High-Yield  Structured Finance 
BONDS

„ 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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7HILEûENERGYûCREDITSûACROSSûTHEûBOARDû PRESSUREûONûASSETûVALUESûMAKINGûTHATû MOREûTHANûAûFEWûQUARTERSv
HAVEûHADûAûROUGHûYEARûINVESTORSûAREû FUNDRAISINGûAVENUEûMOREûDIFlCULT 4HEûQUESTIONûTHATûREMAINSûISûHOWûDEEPû
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THEûNEXTûCOUPLEûOFûYEARS SOUTHWESTERN ENERGY 7.5% 2026 BONDS EMERGE
h'IVENûWHEREûUNSECUREDûSPREADSûAREûTHEû (US$ PRICE) 3OMEûANALYSTSûARGUEûTHATûWHILEûRISKû
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MANAGERûATû!MUNDIû0IONEERû!SSETû WHICHûCOULDûCHANGEûTHEûOUTLOOKûFORûGASû
105
-ANAGEMENTû COMPANIES
100 "UTûOTHERSûARGUEûTHATûRECENTûMARKETû
PERMIAN BOOM WEAKNESSûPOINTSûTOûAûMOREûFUNDAMENTALû
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THEûPRICEûOFûNATURALûGASûTOûPLUMMET h)TSûAûTREADMILLûTYPEûBUSINESSûWHEREûTHEREû
4HEûBENCHMARKû(ENRYû(UBûNATURALûGASû 80 ISûAûNEEDûFORûCAPITALûINûPERPETUITYvûSAIDû
02/08/19
02/03/19

02/10/19
02/06/19

02/07/19

02/09/19
02/05/19
02/04/19
02/02/19

02/11/19

SPOTûPRICEûHASûDROPPEDûFROMûOVERû53ûPERû 4EMPLEû
MILLIONû"RITISHûTHERMALûUNITSûINû-ARCHûTOû h4HEûLONG TERMûFUNDAMENTALSûOFûTHEûSHALEû
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.ATURALûGASûSUPPLYûHASûSURGEDûBECAUSEûOFû THANûEVERûBEFOREv
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
EASING, ACCORDING TO BOFA, WHICH
VERIZON COMMUNICATIONSûSHOWEDûTHEREûISû 4HEû!Mûû YEARûNOTEû BEGAN LAST WEEK. UTILITIES ACCOUNT
PLENTYûOFûLIFEûINûTHEûCORPORATEû+ANGAROOû PRICEDûATûûTOûYIELDûûINSIDEûTHEû FOR €160bn OF THAT UNIVERSE
MARKETûWITHûAû!BNû53M û BPûAREAûGUIDANCEûATûASSETûSWAPSûPLUSû
THREE PARTûTRADEûLASTû7EDNESDAYûTHATû
INCLUDEDûAûGROUNDBREAKINGû YEARû
TRANCHE
BP
/NûAûRELATIVEûPRICINGûBASISûTHEûNEWû
BONDSûPAIDûMODESTûCONCESSIONSûAGAINSTû
1.77%
„ THE YIELD ON 10-YEAR TREASURIES
4HEû53ûTELECOMSûCOMPANYûRATEDû"AA 6ERIZONSû53ûDOLLARûANDûEUROûCURVESûANDû FOLLOWING THE FOMC’S DECISION TO CUT
"""!nûPLAYEDûTOûINVESTORSûSEARCHûFORû CAMEûmATûTOûITSûOUTSTANDINGû!USTRALIANû THE BASE RATE BY A FURTHER 25bp. IT
YIELDûANDûOFFEREDûLONGERûMATURITIESû DOLLARûBONDSûACCORDINGûTOûTHEûLEADS HAD BEEN AS HIGH AS 1.86% IN THE DAYS
INCLUDINGû!USTRALIASûlRSTûPUBLICû YEARû 6ERIZONûISûTHEûTHIRDû53ûMULTINATIONALû BUILDING UP TO THE MEETING
CORPORATEûBOND WITHINûûMONTHSûTOûRAISEû!BN PLUSû
%
h4HEûUNIQUEû YEARûNOTEûOPENEDûUPûAû FROMûMULTI TRANCHEûTRADESûINûTHEû 2.0
NEWûWAYûFORûCREDITûINVESTORSûTOûGETûYIELDû !USTRALIANûDOLLARûMARKETûCALMINGû
INTOûTHEIRûPORTFOLIOSûANDûUNDERLINEDûTHEû SHUTDOWNûFEARSûFOLLOWINGûTHEû53û 1.9

INCREASINGûDEPTHûANDûBREADTHûOFûTHEû CORPORATEûTAXûREFORMûINû$ECEMBERû
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LARGESTûOFûTHEûTHREEûTRANCHESûATû!Mû)Tû credit investors to get yield 1.5

WASûUNDERPINNEDûBYûCOUPON FOCUSEDû into their portfolios and 1.4
4AIWANESEûINVESTORSûWHOûAREûCOMFORTABLEû underlined the increasing

15/10/19
08/10/19

29/10/19
22/10/19
03/09/19

17/09/19

01/10/19
24/09/19
10/09/19
WITHû6ERIZONûASûAûREGULARûVISITORûTOûTHEû
&ORMOSAûMARKETû
depth and breadth of the
Australian market”
INSIDE GUIDANCE
6ERIZONSû!Mûû.OVEMBERûû
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„ THE AMOUNT OF SUPPLY IN THE US
SWAPSûPLUSûBPûANDûALMOSTûBPû ûTHEREBYûREMOVINGûORûWATERINGûDOWNû CORPORATE BOND MARKET CROSSED THE
TIGHTERûTHANûTHEûBPûAREAûGUIDANCE AûKEYûINCENTIVEûFORû!MERICANûlRMSûTOû US$1trn LINE ON OCTOBER 30, ALTHOUGH
#OMBINEDûORDERSûINûEXCESSûOFû!BNû ISSUEûBONDSûOFFSHOREûANDûBRINGûTHEûFUNDSû VOLUMES ARE A TOUCH BELOW THE LEVEL
COMPAREûWITHûRESPECTIVEû!BNûANDû RAISEDûBACKûHOMEûTAXûFREE ûTOûPAYû REACHED BY THE SAME POINT IN 2018. THE
!BNûBOOKSûFORû/RIGINû%NERGYSû DIVIDENDSûANDûlNANCEûSHAREûBUYBACKS FULL YEAR RECORD WAS SET IN 2017 AT
!MûEIGHT YEARûANDû#OLESû'ROUPSû 5NDERûTHEûOLDûTAXûREGIMEûAûCOMBINEDû US$1.33trn
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THEûISSUES )NûTHATûSALEûINû!UGUSTûûTHEû SUPPOSED TO HAVE LEFT THE EU,
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BPûAREAûGUIDANCEûATûASSETûSWAPSûPLUSû WEEKSûDEAL
BP John Weavers

26 International Financing Review November 2 2019

 BONDS SSAR/CORPORATES

WELLûFUNDEDû4HEYVEûDONEûQUITEûAûBITûOFû (.:ûAûCROWNûAGENCYûTHATûPROVIDESû

.OKKIEûRECENTLYûANDûTHATûMIGHTûREMOVEû HOUSINGûSERVICESûFORû.EWû:EALANDERSûINû
SSAR THEûNEEDûFORûTHEMûTOûDOûAûLASTû NEEDûBENElTSûFROMûBEINGûAûRAREûHIGHû
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TRADEûTHROUGHûAûCLUBûDEALûTHATûWASûSOLDû SAFA TO TAP MAY 2030 LINE
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TRADEûVERYûDISCREETûINûANDûOUTûQUICKLYvû WASûPRICEDûATûMID SWAPSûPLUSûBPûANDû BEFOREûTHEûOFFERINGûWOULDûARRIVEû!NDûWHENû
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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

h4HEûSTABLEûOUTLOOKûONûTHEûBACKûOFûTHEû GLOBALLYûOVERûTHEûNEXTûûMONTHSûANDûWEû 3KINNY0OPûPOPCORNûMAKERûAMPLIFY SNACK

DOWNGRADEûWASûREALLYûKEYûBECAUSEûTHEREûWASû EXPECTûTHATû&ORDûWILLûMAINTAINûAûSTRONGû BRANDSûINû$ECEMBERû
AûRISKûTHEREûTHATûITûWOULDûGETûAûONE NOTCHû LIQUIDITYûPOSITIONûASûITûFUNDSûTHEû )Nû*ANUARYû(ERSHEYûAGREEDûTOûAû53BNû
DOWNGRADEûANDûCONTINUEûTOûBEûONûNEGATIVEû RESTRUCTURINGûACTIONSvû30ûWROTEûINûITSû  DAYûCREDITûAGREEMENTûTHROUGHûBofA and
OUTLOOKvûSAIDû*ASONû3HOUPûHEADûOFûGLOBALû REPORTû RBC TOûFUNDûTHEûACQUISITIONûOFû!MPLIFYû
CREDITûSTRATEGYûATû,EGALûû'ENERALû h4HESEûFACTORSûSHOULDûPROVIDEûSOMEû ACCORDINGûTOû,0#
)NVESTMENTû-ANAGEMENTû!MERICAû STABILITYûDESPITEûTHEûSIGNIlCANTûCHALLENGESû 2ECENTû-!ûACTIVITYûISûEXPECTEDûTOûHELPû
&ORDûSPREADSûCONTRACTEDûBYûASûMUCHûASû FACEDûBYû&ORDv BROADENûWHATûHASûBEENûAûNARROWûPRODUCTû
BPûONûTHEûBACKûOFûTHATûNEWSûANDûHELPEDûITû MIXûnûAûPROCESSûTHATûISûNEARINGûANûENDûANDû
ACHIEVEûFAVOURABLEûPRICINGûONûTHEû53BNû INVESTORS WITH SWEET TOOTH DEVOUR SHOULDûPUTû(ERSHEYûONûAûPATHûTOWARDû
lVEûYEAR HERSHEY’S US$1bn BOND DELEVERAGINGûTHANKSûTOûSTRONGûCASHmOWSûSAYû
h4HEûSTABLEûOUTLOOKûRESTOREDûSOMEû ANALYSTS
INVESTORûCONlDENCEûINûTHEûNAMEûTHATûITû )NVESTORSûPROVEDûTOûHAVEûASûBIGûAûSWEETûTOOTHû 30ûWHICHûREVISEDûITSûOUTLOOKûFORûTHEû
COULDûSTAYûINVESTMENTûGRADEûANDûTHEûWAYû ASûEAGERûTRICK OR TREATERSûASûTHEYûINDULGEDûINû COMPANYûTOûSTABLEûFROMûNEGATIVEûTHISû
SECONDARYûSPREADSûTIGHTENEDûITûOPENEDûUPûAû Aû53BNûTHREE PARTûBONDûFROMû MONTHûSAIDûLEVERAGEûCOULDûJUMPûTOûTHEûLOWû
PATHWAYûTOûDOINGûAûDEALvû3HOUPûSAID CONFECTIONERYûCOMPANYûHERSHEYûLASTû XûDUEûTOûACQUISITIONSûBUTûLONGûTERMûITûSEESû
3PREADSûTIGHTENEDûBYûBPûTHROUGHû -ONDAY ITûSTAYINGûATûXûORûBELOW
PRICEûPROGRESSIONûTOûOFFERûINVESTORSûBPû 4HEû2EESESû0EANUTû"UTTERû#UPûMAKERûSAWû h7EûEXPECTûMANAGEMENTûWILLûPRIORITISEû
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ABOUTûBPûWIDEûOFûITSûEXISTINGûûSû ONEûOFûTHEûFEWûHIGHûCREDITûQUALITYûNAMESûINû ENDûOFûlSCALûvû30ûSAIDûINûAûREPORT
TRADINGûATûAû' SPREADûOFûBP THEûFOODûANDûBEVERAGEûSECTOR h7EûEXPECTû(ERSHEYûTOûCONTINUEûTOû
)MPORTANTLYûTHEûCOUPONûONûTHEûNEWûBONDû (ERSHEYûRATEDû!!ûCAMEûWITHûAû GENERATEûHEALTHYûCASHmOWSûANDûMAINTAINûATû
ATûûWASûûPERCENTAGEûPOINTSûTIGHTERû 53MûlVE YEARûAû53Mû YEARûANDû LEASTû53BNûINûFREEûOPERATINGûCASHmOWv
THANûTHEûPREVIOUSûûNOTE Aû53Mû YEARûTHATûPRICEDûATû4REASURIESû
)NVESTORSûBACKEDûTHEûBONDûTOûTHEûTUNEûOFûAû PLUSûBPûBPûANDûBPûRESPECTIVELY
53BNûORDERûBOOKû "OOKRUNNERSûBank of AmericaûCitigroupûJP EUROS
#REDIT3IGHTSûNOTEDûINûAûREPORTûTHATûTHEREû Morgan and Royal Bank of CanadaûTIGHTENEDû
WOULDûBEûBUYERSûEVENûASûTHEûNEW ISSUEû SPREADSûBYûASûMUCHûASûBPûTHROUGHûPRICEû E.ON PICKS PERFECT TIMING FOR HASTY
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&ORDSûNON 53ûOPERATIONSûANDûITSûSUCCESSûWILLû SPURREDûAûSLEWûOFûACQUISITIONSûINûTHEûSECTOR %UROPEANûISSUERûWHOûJUSTûCANTûTURNûDOWNû
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h4HEûSTABLEûOUTLOOKûREmECTSûOURûVIEWûOFû /VERûTHEûPASTûTWOûYEARSûTHEûCOMPANYûHASû RESTARTEDû%#"û!SSETû0URCHASEû0ROGRAMMEû
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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
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%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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ACCORDINGûTOû30 û
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NO GROWûOFû YEARûFUNDINGûTHROUGHûBank of õMûû-ARCHû LEVERAGEûBELOWûXûINûTHEûMEDIUM TERMû
AmericaûBNP ParibasûHSBC and Westpac ,ASTû-ONDAYSûISSUEûEXTENDEDû3%3SûSENIORû +0.SûANNUALûCAPEXûFROMûûTOûûISû
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MID SWAPSûPLUSûBPûAREAû/RDERSûPEAKEDû 0RIORûTOûTHEûDEALûITSûLONGESTûWASûAûõMû Barclays and Goldman SachsûWEREû
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SAWûFAIRûVALUEûATûAROUNDûBP APPEARANCEûINûTHEûBENCHMARKûMARKETû GRIDûOPERATORûSTEDINûISûPREPARINGûAûGREENû
h4HOSEûLESSER KNOWNûORûNEWûISSUERSû ISSUEDûINû-ARCHû BONDûDEBUT
MIGHTûSTRUGGLEûMOREûTHANûTHEûVERYûPOPULARû Goldman SachsûHSBCûJP MorganûMUFGû 4HEûCOMPANYû! ûAPPOINTEDûLEADSûFORûAû
NAMESûLIKEû5NIBAILûGIVENûSOMEûOFûTHEû SMBC Nikko and Societe GeneraleûTHEûLATESTû YEARûEUROûBENCHMARKû-EETINGSûTOûMARKETû
PROBLEMSûINûTHEûSECTORvûSAIDûAûSECONDû TRADE THEûISSUEûWILLûBEGINûONû-ONDAY
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International Financing Review November 2 2019 31

 3TEDINûISûINTEGRATINGûMOREûRENEWABLEû 3WEDISHûBEARINGûANDûSEALûMANUFACTURERû NAMESûINûTHEûSECTORûANDûSOûHASûAûBROADERû
ENERGYûINTOûTHEûGRIDû)TûWILLûUSEûTHEûPROCEEDSû SKFûISûLOOKINGûTOûEXTENDûITSûDEBTûMATURITYû FOLLOWINGvûSAIDûAûLEAD
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PROJECTSûRELATEDûTOûRENEWABLEûENERGYûENERGYû INCOMEûINVESTORûMEETINGSûFORûAûNEWûISSUEû DEALûDREWûAûBOOKûOFûMOREûTHANûaBNû
EFlCIENCYûCLEANûTRANSPORTûANDûGREENû ALONGSIDEûAûTENDERûOFFERûFORûOUTSTANDINGû SUBSTANTIALûFORûAûHOUSINGûASSOCIATIONûBONDû
BUILDINGSû)33 /EKOMûHASûPROVIDEDûAûSECOND BONDS ISSUEûALLOWINGûLEADSûLloyds and NatWest
PARTYûOPINION 4HEûBORROWERûANNOUNCEDûTHEûMANDATEû MarketsûTOûTIGHTENûPRICINGûTOû'ILTSûPLUSûBPû
ING and NatWest MarketsûAREûGREENûBONDû WITHûDeutsche BankûNordea and SEBûASûLEADû FROMûINITIALûGUIDANCEûOFûPLUSûBPû
STRUCTURINGûADVISERSûANDûBOOKRUNNERSû MANAGERSûWITHû3%"ûASûGREENûSTRUCTURINGû (OUSINGûASSOCIATIONûBORROWERSûWILLûOFTENû
ALONGSIDEûABN AMRO and BNP Paribas ADVISOR SEEKûTOûSELLûBENCHMARKûBONDSûBECAUSEûTHEYû
!û YEARûEURO DENOMINATEDûSENIORû PROVIDEûMOREûCOST EFFECTIVEûFUNDINGûTHANû
AURELIUS EQUITY SEEKS OPPORTUNITIES UNSECUREDûõMûNO GROWûDEBUTûGREENû BANKûLOANSû(OWEVERûTHEûSIZEûREQUIREDûCANû
IN SENIOR TRANSACTIONûTOûBEûRATEDû"AA.2"""ûWILLû BEûMOREûTHANûTHEûISSUERûACTUALLYûNEEDS
FOLLOWûWHILEûTHEûCORPORATEûISûTARGETINGûITSû h4HISûISûWHYûWEûSEEûTHEûRETAINEDû
AURELIUS EQUITY OPPORTUNITIESûHASûMANDATEDû õMûû/CTOBERûûANDûõMû ELEMENTvûSAIDûAûBANKERûAWAYûFROMûTHEû
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INûTHEûISSUEûOFûITSûlRSTûSENIORûEUROûBOND $UTCHûELECTRICITYûANDûGASûGRIDûOPERATORû h4HEûMINIMUMûFORûAûBENCHMARKûISûAROUNDû
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SPANû.ORTHERNûANDû7ESTERNû%UROPEû!û INûTRANSPORTûLOGISTICSûCOMMUNICATIONSûANDû LASTûSOLDûAûBENCHMARKûINûûWHENûITûRAISEDû
õMûlVE YEARûSENIORûUNSECUREDûmOATERû ELECTRICITYûSTORAGEûHASûAPPOINTEDûCredit aMûVIAûAûû*UNEûûBIDûLASTûWEEKû
MAYûFOLLOW Agricole, Citigroup, HSBC and ING TOûARRANGEû ATûBPûOVERû'ILTS
4HEûTRADEûWILLûMARKûTHEûPRIVATEûEQUITYû INVESTORûMEETINGSûFORûAûlVE YEARûEUROûlXED /NEûOFûTHEûBENElTSûFORûHOUSINGû
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%BITDAûOFûTHEûCOMBINEDûGROUPûINCREASEDû FACESûACUTEûLIQUIDITYûDISTRESS
lVE FOLDûCOMPAREDûTOûTHEûPREVIOUSûYEARû SOVEREIGN FLIES ON RESILIENT 3TILLûTHEûBANKERûSAIDûTHATûTHOSEûISSUERSû
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DEALS PILE UP IN NOVEMBER PIPELINE SOVEREIGN HOUSINGûDEMONSTRATEDûTHEûSTRENGTHû "REXIT
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ISSUERSûTOûADDûTHEIRûNAMESûTOûANûALREADYû h4HEûLONGERûENDûOFûTHEûSTERLINGûMARKETû THEIRûDEBTûMAYûBECOMEûMOREûEXPENSIVEûFORû
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ALL INTL AUSTRALIAN DOLLAR BONDS ALL INTL SWEDISH KRONA BONDS GLOBAL DIM SUM BONDS
BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues A$(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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THEû3COTTISHû0OWERûSERVICEûAREAûHASû 4HEû!MûûSEVEN YEARûNOTEûTRANCHEû US DOLLARS
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ISSUE TIGHTERûTHANûBPnBPûGUIDANCEûATûASSETû CITI PROPS UP SOFR TRANSITION WITH
4HEûNAMEûHASûSELECTEDûBarclaysûTOûARRANGEû SWAPSûPLUSûBP THREE-PART BOND
INVESTORûMEETINGSûFROMû.OVEMBERûûWITHûAû !USTRALIANûANDû.EWû:EALANDûINVESTORSû
ûANDû YEARûSTERLINGûBONDûEXPECTEDûTOû BOUGHTûû!SIAûûANDû%UROPEûû!SSETû CITIGROUPûWASûBACKûINûTHEûMARKETûLASTû
FOLLOW MANAGERSûWEREûALLOTTEDûûBANKSûû -ONDAYûWITHûAû53BNûTHREE PARTûBONDû
HEDGEûFUNDSûûANDûTHEûMIDDLEûMARKETû THATûADDSûTOûTHEûBANKSûSUPPLYûOFû53ûDOLLARû
4HEû!MûOFûû YEARûNOTESûWEREû ISSUANCEûLINKEDûTOûTHEû3ECUREDû/VERNIGHTû
NON-CORE CURRENCIES PRICEDûATûûFORûAûYIELDûOFûû &INANCINGû2ATE
WHICHûWASûALSOûBELOWûBPnBPû "ANKSûHAVEûOFFEREDûAûDIZZYINGûAMOUNTûOFû
ORIGIN GENERATES EXTRA DEMAND GUIDANCEûATûASSETûSWAPSûPLUSûBP FORMATSûTHISûYEARûINûAûBIDûTOûlNDûAû
!NTIPODEANûACCOUNTSûTOOKûûOFûTHEû REPLACEMENTûFORûSCANDAL PLAGUEDû,IBORû
ORIGIN ENERGYûRATEDû"AA"""û-OODYS30 û LONGER DATEDûNOTESû!SIAûûANDû%UROPEûû WHICHûWILLûLOSEûREGULATORYûSUPPORTûAFTERû
SECUREDûAûWHOPPINGû!BNûORDERûBOOKûLASTû !SSETûMANAGERSûRECEIVEDûAûûALLOCATIONû 
7EDNESDAYûFORûAûCAPPEDû!MûEIGHT YEARû BANKSûûHEDGEûFUNDSûûANDûTHEûMIDDLEû 3OMEûBANKSûHAVEûUSEDû4REASURIESûINûTHEû
SENIORûUNSECUREDû-4.ûSALE MARKETû BACKûENDûWHILEûOTHERSûSTICKûBYû,IBORûUSINGû
4HEûSCALEûOFûDEMANDûENABLEDûJOINTûLEADSû #OLESû'ROUPûHASûMOREûTHANûûOUTLETSû FALLBACKûLANGUAGEû"UTûIFûITûWASûNOTûALREADYû
ANZûCitigroup and CBA TOûPRICEûTHEûû NATIONALLYûANDûWASûSPUNûOFFûFROMû CLEARû#ITISûNEWûBONDSûPOSITIONûITûlRMLYûINû
.OVEMBERûûSûBPnBPûTIGHTERûTHANû 7ESFARMERSûINû.OVEMBERûûTOûFORMûAû THEûEARLYû3/&2ûADOPTERûCAMPûASûAûWAYûTOû
INITIALûBPnBPûGUIDANCEûATûASSETûSWAPSû SEPARATEûLISTEDûCOMPANY ADVOCATEûFORûTHEûNEWûRATE
PLUSûBPûFORûTHEûBIGGESTûSPREADû h)TSûHARDûTOûSAYûEXACTLYûWHYûSOMEûBANKSû
COMPRESSIONûBYûANû!USTRALIANûDOLLARûISSUEûINû ENDEAVOUR COMPLETES CORPORATE AREûCHOOSINGûTOûMOVEûTOû3/&2ûASûEARLYû
RECENTûMEMORY RUSH ADOPTERSûONûTHEûBACKûOFû4,!# ELIGIBLEûBONDSû
!USTRALIANûANDû.EWû:EALANDûINVESTORSû ANDûOTHERûAREûNOTvûSAIDûONEûBANKûlNANCIALSû
BOUGHTûûWITHû!SIAûALLOTTEDûûANDû .ETWORKû&INANCEû#OMPANYûTHEûlNANCINGû ANALYSTûAWAYûFROMûTHEûTRADEû
%-%!ûû!SSETûMANAGERSûTOOKûûBANKS ENTITYûOFûENDEAVOUR ENERGY GROUPûRATEDû"AAû h!ûLOTûOFûITûCOMESûDOWNûTOûPRACTICALû
PRIVATEûBANKSûûINSURANCEûCOMPANIESû -OODYS ûCOMPLETEDûONEûOFûTHEûBUSIESTû DECISIONSûOFûWHETHERûTHEûCOMPANYûFEELSûNOWû
ANDûPENSIONûFUNDSûûMIDDLEûMARKETûû WEEKSûONûRECORDûINûTHEû!USTRALIANûCORPORATEû ISûTHEûTIMEûTOûGOûTHROUGHûTHEûDOCUMENTATIONû
ANDûOTHERSû BONDûMARKETûWITHûAû!MûlXED RATEû ANDûOPERATIONALûWORKûREQUIREDûTOû
4HEûTRADEûBENElTEDûFROMûTHEûBULLED UPû SEVEN YEARû-4.ûSALEûLASTû&RIDAY INCORPORATEûTHISûINTOûTHEûPROGRAMMEû
PRIMARYûMARKETûASûWELLûASûCREDIT SPECIlCû 4HEûMARKETûWASûCLEARLYûNOTûSATURATEDûBYû ESPECIALLYûCONSIDERINGûTHATûTHESEûSTRUCTURESû
SCARCITYûVALUEûFORûTHEû!USTRALIANûENERGYû SUPPLYûASûORDERSûWEREûSTRONGûENOUGHûFORûJOINTû AREûINûmUXvû
RETAILERûANDûPOWERûGENERATORûWHICHûHASûNOû LEADûMANAGERSûANZûCBA and HSBCûTOûPRICEûTHEû 4HEûNEWû#ITIGROUPûNOTESû!"""! û
OTHERûDOMESTICûBONDSûOUTSTANDING û.OVEMBERûûSûBELOWûBPûAREAû INCLUDEûTWOûlXED TO mOATûTRANCHESûASûWELLûASû
GUIDANCEûATûASSETûSWAPSûPLUSûBP Aû53MûTHREE YEARûNONûCALLûTWOûmOATERû
COLES CHECKS OUT WITH A$600m %NDEAVOURû%NERGYû'ROUPûISûAûREGULATEDû THATûPRICEDûATûBPûOVERû3/&2
ELECTRICITYûDISTRIBUTIONûBUSINESSûLOCATEDûINû )TûISû#ITISûlRSTû3/&2 REFERENCEDûmOATERûOUTû
COLES GROUPûATTRACTEDûANûIMPRESSIVEûEVENLYû .EWû3OUTHû7ALES OFûTHEûHOLDINGûCOMPANYûANDûTHEûSECONDûSUCHû
SPLITû!BNûORDERûBOOKûFORûLASTû mOATERûSINCEûTHEûOPERATINGûCOMPANYûCITIBANK
7EDNESDAYSûINAUGURALû-4.ûOFFERINGû DAIMLER LOOKS TO GO PRIVATE IN CHINA N.A.ûISSUEDûTHEûlNANCIALûINSTITUTIONSûDEBUTû
WHICHûENABLEDû!USTRALIASûSECONDûLARGESTû 3/&2ûNOTEûINû-ARCHû
RETAILERûTOûPRINTûAû!Mû53M ûDUAL DAIMLERûRATEDû!!!!!û#HINAû"OND 4HEûNEWûNOTEûISûHALFûTHEûSIZEûANDûONEû
TRANCHERûWELLûBELOWûINDICATIVEûGUIDANCEû -OODYS30 ûISûPLANNINGûTOûISSUEû2MBBNû YEARûLONGERûTHANûTHEû53BNûTWO YEARûNONû
RANGES 0ANDAûBONDSûTHROUGHûAûPRIVATEûPLACEMENTûINû CALLûONEûOFFEREDûINû-ARCHûATûBPûOVERû
#OLESûRATEDû"AA"""û-OODYS30 û TWOûTRANCHES 3/&2
INITIALLYûFOCUSEDûONûTHEûSEVEN YEARûSEGMENTû 4HEûISSUEûWILLûBEûSPLITûINTOûAû2MBBNûTWO "ACKûINû*UNEû-ORGANû3TANLEYû!"""! û
BEFOREûADDINGûAû YEARûNOTEûTRANCHEûTOûTAKEû YEARûTRANCHEûANDûAû2MBBNûTHREE YEARû WASûABLEûTOûPRICEûAûSIMILARû53MûTHREE
ADVANTAGEûOFûRISINGûAPPETITEûFORûLONGER DATEDû TRANCHE YEARûNONûCALLûTWOûmOATERûATûBPûOVERû3/&2

International Financing Review November 2 2019 33

 4HEûFUNDINGûWILLûCOUNTûTOWARDûTOTALûLOSS RBS GETS RESOUNDING RESPONSE FOR THEûTRANSACTIONûSAIDûh)TSûBEENûPOSITIVEûFORû
ABSORBINGûCAPACITYûREGULATORYûNEEDSûANDû TIER 2 COMEBACK 5+ûRISKûRECENTLYv
THEûHOLDCOûISûEXPECTEDûTOûEXERCISEûTHEûCALLû 2"3ûISûONLYûTHEûTHIRDû5+ûLENDERûTOûRAISEû
OPTIONûINûTHEûlNALûYEARûTOûMATURITYû ROYAL BANK OF SCOTLANDûSEIZEDûONûAûRELATIVEû 4IERûûDEBTûINûEUROû53ûDOLLARSûORûSTERLINGûINû
BECAUSEûTHATûISûWHENûTHEûNOTESûLOSEû4,!#û LULLûINû"REXITûHEADLINESûTOûBRINGûITSûlRSTû4IERû ûACCORDINGûTOû)&2ûDATA
ELIGIBILITY ûINûlVEûYEARSûAû53MûDEALûTHATûGIVESû 4HEûONLYûOTHERûTOûTAPûTHEû9ANKEEûMARKETû
!DDITIONALLYû#ITIûONû-ONDAYûPRICEDûTWOû INVESTORSûAûRAREûOPPORTUNITYûTOûBUYû5+û4IERûû WASû"ARCLAYSûPRINTINGûAû53BNû.#û
lXED TO mOATûBONDSûAû53BNûTHREE YEARû CAPITAL INû*UNE
NONûCALLûTWOûANDû YEARûNONûCALLûûATû 5+ûLENDERSûHAVEûNOTûALWAYSûHADûTHEû )NûCONTRASTû5+ûLENDERSûHAVEûRAISEDûOVERû
4REASURIESûPLUSûBPûANDûBPû LUXURYûTOûPICKûTHEIRûMARKETûWINDOWSûINû 53BNûACROSSûSENIORûHOLDCOûOPCOûANDû
RESPECTIVELY RECENTûTIMESûASûTHEûPERSISTENTûNOISEûAROUNDû !DDITIONALû4IERûû)NûTHEûCASEûOFû2"3ûITSûLASTû
3PREADSûTIGHTENEDûINûSOMEûBP BPû "REXITûMADEûTIMINGûTHEûMARKETûTOûPERFECTIONû 4IERûûINûANYûCURRENCYûDATESûBACKûTOû-AYû
THROUGHûPRICEûPROGRESSIONûTOûENDûUPûNEARLYû AûTRICKYûTASK 
mATûTOûCOMPARABLEûBANKSûWITHûTHEû (OWEVERûTHISûTIMEûAROUNDûTHEYûAREû h4HEûBIDûFORû5+ûCREDITûHASûBEENûFAIRLYû
TRANSACTIONûGARNERINGûORDERûBOOKSûOFû EMERGINGûOUTûOFûTHEIRûBLACKOUTûPERIODSûJUSTû STRONGûINûTHEûLASTûCOUPLEûOFûWEEKSvûAûBANKERû
53BNûACROSSûALLûTHREEûTRANCHES ASûTHEûPROSPECTSûOFûANûIMMINENTûNO DEALûORû AWAYûSAIDû
%VENûIFûTHEûBONDûHADûTIGHTENEDûINûBPû HARDû"REXITûAREûEBBINGûAWAY h53ûDOLLARSûINûPARTICULARûGIVESûYOUû
FROMûINITIALûPRICEûTHOUGHTSûITûSTILLûWOULDû ,EADSûBank of AmericaûCredit SuisseûNatWest DEPTHûANDûCONSISTENCYûANDûTHEûFURTHERû
HAVEûOFFEREDûINVESTORSûINCREMENTALûSPREADû Markets and RBCûPRICEDûAû53MûûYEARû AWAYûYOUûAREûFROMû%UROPEûTHEûLESSû
PICK UPûOVERûITSûLOWû3INGLEû!ûPEERSû NON CALLûlVEû"AA""! ûRATEDûDEALûATûBPû THEû"REXITûNOISEûSEEMSûTOûIMPACTû
#REDIT3IGHTSûNOTEDûINûAûREPORT OVERû4REASURIESû CREDITSv
h7EûVIEWûTHEûOFFERINGSûASûMODESTLYû 4HEûSPREADûTIGHTENEDûSOMEûBPûFROMû 4HEû3%#ûFORMATûMEANSûTHATûTHEû5+û
ATTRACTIVEûENTRYûPOINTSûTOûTHEûNAMEûANDûWEû INITIALûPRICEûTHOUGHTSûANDûTHEûTRADEûGARNEREDû BANKûCANûNOTûONLYûTAPû53ûDEMANDûBUTû
STILLûTHINKû#ITIûOFFERSûFUNDAMENTALûVALUEû 53BNûOFûINVESTORûORDERSû ûMOREûTHANûNINEû ALSOûREACHûOTHERûINVESTORSûBASESûINû%UROPEû
RELATIVEûTOûTHEûBROKERSûSUCHûASû'OLDMANû TIMESûSUBSCRIBEDû ANDû!SIA
3ACHSûANDû-ORGANû3TANLEY vûTHEûREPORTû h!ûNO DEALû"REXITûHASûBEENûTAKENûOFFûTHEû h3%#ûGIVESûYOUûTHEûOPPORTUNITYûTOûEXPLOREû
STATEDû TABLEûANDûAû5+ûELECTIONûISûNOTûREALLYûAû EVERYûANGLEûWHENûITûCOMESûTOûINVESTORSvûTHEû
h7EûCONTINUEûTOûBELIEVEû#ITISûRISKûPROlLEû SIGNIlCANTûFACTORvûAûBANKERûFAMILIARûWITHû SECONDûBANKERûSAID
ANDûBUSINESSûMODELûSHOULDûSEEûITûTRADEû
INSIDEûTHEûBROKERSûGIVENûTHEûFUNDAMENTALû ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION
STRENGTHSûOFûTHEûDEPOSITûFRANCHISEFUNDINGû BOOKRUNNERS: 1/1/2019 TO DATE BONDS (ALL CURRENCIES)
MODELûANDûLESSûRELIANCEûONûINHERENTLYûMOREû Managing No of Total Share BOOKRUNNERS: 1/1/2019 TO DATE
VOLATILEûMARKETSûBUSINESSESvû bank or group issues €(m) (%) Managing No of Total Share
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
3/&2ûmOATERSûSINCEûTHEûNEWûREFERENCEûRATEû 4 Credit Agricole 67 13,946.09 6.5 3 HSBC 43 6,132.44 7.3
WASûINTRODUCEDûLASTûYEARûBUTûTHEREûAREûMANYû 5 Deutsche Bank 59 12,657.21 5.9 4 JP Morgan 37 5,230.40 6.3
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

 BONDS FIG

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 INTERNATIONALE A LUXEMBOURG is readying a under the ECB’s QE programme, which got
market at both ends of the capital spectrum, sub-benchmark AT1 and tender, UNICAJA BANCO under way again last Wednesday.
with issuers eyeing low sub-debt funding is marketing a sub-benchmark Tier 2, and RCI While some analysts had forecast the
costs and others potentially rethinking BANQUE will hit the road this Monday ahead of its Eurosystem’s bid for covereds would increase to
covered plans on the back of rekindled ECB first Tier 2 outing. around 15%-20% of issue sizes, others thought it
bond buys. AUSTRALIA AND NEW ZEALAND BANKING might grow nearer to 30%.
Bankers expect heavy supply this week as the GROUP, meanwhile, will start a roadshow from But bankers involved in the DEUTSCHE
market heads into the last issuance window of November 11 for a sustainable developments KREDITBANK and BPCE deals said the bid was
2019. goals Tier 2 euro benchmark. higher than even the upper end of expectations,
The pipeline is said to be particularly full in Other issuers are likely to emerge with putting it at around 40%.
the capital space. subordinated trades this week, bankers said. “The good placement results of recent new
The strength of the Additional Tier 1 market issues could significantly boost issuance activity
was shown last week by LBBW and SEB, which ECB MAY PROMPT COVERED RETHINK in November,” said Ted Packhmohr, head
encountered some price sensitivity but were still The pipeline is well-filled in the covered sector of covered bonds and financials research at
able to lock in attractive funding levels. too. CAFFIL and CREDIT MUTUEL ARKEA are set Commerzbank.
Tier 2 also looks a good option, as to bring euro trades this week, while DEUTSCHE “The pipeline is filled quite well already.
demonstrated by RBS with a book of over BANK and DANISH SHIP FINANCE will also begin Further mandates should follow in the wake of
US$7bn for its US$750m deal on Tuesday. marketing benchmarks. the ECB news as soon as the reporting season
Four issuers have already announced Other issuers may be tempted into the permits.”
subordinated euro trades: BANQUE market by bigger-than-expected purchases Tom Revell

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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
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PREFERREDûINû*UNEûEFlCIENTLYûSUPPLEMENTINGû REACHINGûITSû-2%,ûTARGETûWITHûTHEûISSUANCEû BONDSûTRADEûJUSTûBPûBACKûOFûITSûCONVENTIONALû
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h"ANKSûCANûCOUNTûSOMEûOFûTHEIRûSENIORû SENIORûNON PREFERREDûANDûTHATûITûONLYû h)TûISûINTERESTINGûTOûSEEûTHATûTIGHTûNAMESû
PREFERREDûASûPARTûOFûTHEIRû-2%,ûUPûTOûAû INTENDEDûTOûDOûONEûMOREûBENCHMARKûINû ATûTIGHTûSPREADSûAREûSTILLûWORKINGvûSAIDûAû
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DEBTvûTHEûBANKERûSAID DURATION IN FAVOUR AS BHH, JP GETûDONEûANDûTHATûISûTHEûMOSTûIMPORTANTû
,EADSûBanco Sabadell, Barclays, Natixis, MORGAN HIT SENIOR MARKET MESSAGEv
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THEûNO GROWûTRADEûATûBP BPû"UTû BERLIN HYP and JP MORGAN CHASE & COûHITûTHEû GETûTHEûDEALûGOINGv
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PRICINGûATûBP INTERMEDIATEûMATURITIESûINûTHEûSENIORûSPACEû SUFlCIENTûTOûENSUREûINVESTORûINTEREST
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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

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$EVELOPMENTû"ANKûBONDûYIELD Credit Suisse, DZ Bank and Santander.
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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 INVESTORûAPPETITEûFORûTHEûLONGûENDûANDûINû
WHILEûOTHERSûAWAITûTHEûRETURNûOFûNETû%#"û1% 3PARE"ANKûSûCASEûMEANTûINVESTORSûCOULDû
COVERED BONDS 4HEûTWOûISSUERSûBROUGHTûTHEûlRSTûEUROû PICKûUPûPAPERûFROMûAûHIGH QUALITYû%UROPEANû
BENCHMARKûCOVEREDSûSINCEû/CTOBERûû4HEû NAMEûWITHûAûPOSITIVEûYIELD
MARKETûHADûBEENûQUIETûWHILEûEUROZONEû 4HEûDEALûWASûPRICEDûWITHûAûCOUPONûOFû
EUROS ISSUERSûWEREûAWAITINGûTHEûRESTARTûOFûNETû%#"û ûTOûYIELDû
COVEREDûBONDûPURCHASESûWHICHûKICKEDûINû "ANKERSûSAIDûITûOFFEREDûAûNEWûISSUEû
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STRUCTUREDûCOVEREDûBONDûBENCHMARKûASûITû BONDûSPREADSûONûTHEûWHOLEûTIGHTENûWHILEû
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BONDûPROGRAMMESûFORûPUBLICûBENCHMARKû EMPTEDûTHEûEXPECTEDûWAVEûOFûSUPPLY
ISSUANCEûISûAûRARITYûINûTHEûCOVEREDûBONDû 3-"#ûREMAINSûTHEûONLYûISSUERûOFûCOVEREDû UNITED STATES
SPACEûANDûMOSTLYûLIMITEDûTOûCOUNTRIESûWHEREû BONDSûFROMû*APANûHAVINGûOPENEDûTHEû
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International Financing Review November 2 2019 37

RANGEûASûTHEûCOMPANYûPURSUESûACQUISITIONSû STOCKûBUYBACKSûORûDEPLOYEDûTOûADDITIONALû LASTû-ONDAYûREmECTINGûTHEûLOWERûRECOVERYû
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PRIORITIESvûSAIDû#REDIT3IGHTSûANALYSTSûINûAû INDICATINGûAûYIELDûOFûûACCORDINGûTOû EXISTINGû53MûSENIORûUNSECUREDûNOTESû
REPORTûONû4UESDAY -ARKET!XESSûDATA DUEûûLOWERINGû&ITCHSûRECOVERYû
4HEûCOMPANYûLOOKSûFORûACQUISITIONSûANDûIFû 4HEûNEWûûNOTESûDUEûûTRADEDûATû EXPECTATIONSûONûTHEûNOTES
THEREûAREûNOûSUITABLEûCANDIDATESûOFFERSû ûONû4HURSDAY &ITCHûALSOûNOTEDûTHATûTHEREûISûhMINIMALû
EQUITYûINVESTORSûSPECIALûDIVIDENDSûORûSHAREû *OINTûBOOKRUNNERSûONûTHEûNEWûDEALûWEREû HEADROOMûFORûEXECUTIONûCHALLENGESûORûAû
BUYBACKS Morgan Stanley, Goldman Sachs, Citigroup, JP BROADERûSLOWDOWNvûATûTHEûlRMûALTHOUGHû
h4HISûSTRATEGYûENTAILSûAûHIGHûLEVELûOFû Morgan, Credit Suisse, KKR, RBC, Barclays, Credit THEûlNANCINGûISûSEENûASûTAKINGûTHEû
lNANCIALûLEVERAGEûALTHOUGHûTHEûSTRONGû Agricole, HSBC and PNC IMMEDIATEûLIQUIDITYûPRESSUREûOFFûTHEû
MARGINSûANDûFREEûCASHmOWûCHARACTERISTICSû COMPANY
AREûABLEûTOûSUPPORTûSUCHûAûSTRATEGYvûSAIDû FITCH PUTS WEWORK HIGH-YIELD BOND 4HEûSENIORûUNSECUREDûBONDûWASûTRADINGû
#REDIT3IGHTS ON NEGATIVE WATCH AROUNDûûONû4HURSDAYûUPûFROMûAûLOWû
h.ETûLEVERAGEûNATURALLYûTRENDSûLOWERûOVERû OFûûITûTOUCHEDûONû/CTOBERûûAFTERûTHEû
THEûYEARûASûCASHûBUILDSûWHICHûTHENûISû &ITCHûPUTûWEWORK@Sû53MûSENIORû 3OFT"ANKûlNANCINGûPACKAGEûWASûANNOUNCEDû
TYPICALLYûDISTRIBUTEDûINûAûSPECIALûDIVIDENDû UNSECUREDûNOTESûONûRATINGûWATCHûNEGATIVEû 4HEûûNOTESûOFFERûAûYIELDûOFûûATû
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

 BONDS HIGH-YIELD

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

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International Financing Review November 2 2019 39

 ,ETTER/NEûNOWûOWNSûûOFû$)!û &RIDMANûDENIEDûTHEûACCUSATIONSûSAYINGû
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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

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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
ALREADYûHAVEûAûCREDITûOPINIONûTHATSûNOTûTHEûCASEû SINCEûûANDûSOLDûAûFULLûCAPITALûSTRUCTURE ALSOûUNRATEDûISûSHOWNûASûhCALLûDESKvûATû
FORûTHEûSMALLûUNRATEDûCOMPANIESûINû!LHAMBRA !NDû"E 3POKEûITSELFûHASûGROWNûALMOSTû BPûOVER
.OTûACHIEVINGû%UROSYSTEMûELIGIBILITYûMAYû DOUBLINGûITSûSTAFFûNUMBERSûSINCEûLASTûYEARûTOû %URIBORûISûmOOREDûATûZEROûFORû#LASSESû!ûANDû"
HAVEûFORCEDûSENIORûINVESTORSûINTOûAûRETHINKû AROUNDûûBASEDûINû3PAINûANDûINû,ONDON 4HEûõMûPORTFOLIOûISûSTATICûANDûITSûû
BUTû,ARSû3CHMIDT /TTûMANAGINGûDIRECTORûATû h!ûKEYûAIMûOFûEXPANDINGûTHEûTEAMûWASûTOû LOANSûAREûMADEûTOûûBORROWERûGROUPSû
"E 3POKEûSAIDûINVESTORûINTERESTûREMAINEDû ALLOWûUSûTOûSEPARATEûSERVICINGûANDûMONITORINGû ORIGINATEDûWITHûTHEûINTENTIONûTOûSECURITISEû
STRONGûTHROUGHûTHEûRESTûOFûTHEûSTACK FROMûUNDERWRITINGvû3CHMIDT /TTûSAID THEMû4HEYûHAVEûBEENûWAREHOUSEDûBYû
h4HEûINVESTORSûWEûWEREûTALKINGûTOûINû /NEûCHANGEûTOûTHEûSTRUCTUREûINVOLVESûTHEû .AT7EST
$ECEMBERûAREûSTILLûTHEREvûHEûSAIDûh4HEYû lRST LOSSûWHICHûSEESû"E 3POKEûTAKINGûMOREû 4HEûAVERAGEûLOANûSIZEûISûõMûANDû
HAVEûHADûTIMEûTOûSEEûTHEûPORTFOLIOûEVOLVINGû SKINûINûTHEûGAMEûTHANûITûPREVIOUSLYû AVERAGEûSEASONINGûnûPUSHEDûOUTûTHANKSûTOû
HADûMOREûTIMEûFORûUNDERWRITINGv INTENDEDû)TûWILLûRETAINûTHEûBOTTOMûûOFû THEûDELAYûnûISûûYEARSûWITHûAû
/NEûOFûTHOSEûINVESTORSûWHICHûWASûALREADYû THEûCAPITALûSTRUCTURE REMAININGûTERMûOFûûYEARSû4HEû
COMMITTEDûLASTûYEARûISûTHEû%)"û4HEûDEALSû !NOTHERûCHANGEûISû*0û-ORGANûCOMINGûINûASû WEIGHTEDûAVERAGEûSPREADûOVERûONE MONTHû
#LASSû#ûHASûBEENûPRE PLACEDûWITHûTHEû AûJOINTûLEADûnûSOMETHINGûTHATûNECESSITATEDû %URIBORûISû
SUPRANATIONALûBANK THEûFORMALûRELAUNCHûOFûTHEû#$/ûTHISûWEEK 3CHMIDT /TTûWASûPREVIOUSLYûAûCO FOUNDERû
!NDûTHEûCAPITALûSTRUCTUREûRELEASEDûONû h!FTERûTHEûDELAYûANDûWITHOUTûAû-OODYSû OFû'ERMANY BASEDû#APITALû%FlCIENCYû'ROUPû
-ONDAYûSHOWEDû#LASSESû!û"ûANDû$ûCONTAINû RATINGûWEûFELTûITûWOULDûBEûSENSIBLEûTOûADDûAû WHICHûSOLDûSIXû3-%ûSECURITISATIONSûUNDERûTHEû
PROTECTEDûORDERS SECONDûBANKûTHATûCOULDûCOMEûTOûTHEû 02%03ûLABELûFROMûûTOûûUSINGûAû
.AT7ESTSû(UNTûSAIDûSENTIMENTûAROUNDû TRANSACTIONûWITHûAûFRESHûPAIRûOFûEYESûANDû SIMILARûPLATFORM
THEû3PANISHûECONOMYûHADûALSOûIMPROVED REVALIDATEûTHEûWHOLEûHYPOTHESISûOFûTHEû 4HOSEûDEALSûMAINLYûSECURITISEDû
h4HEREûHASûBEENûAûLOTûMOREûGOODûNEWSûOUTû TRADEvû3CHMIDT /TTûSAID 'ERMANûASSETSûANDûTHEûLOANSûEARNEDûAû
OFû3PAINûSINCEûLASTûYEARvûHEûSAIDûh!PPETITEû #LASSESû!ûTOû#ûAREûRATEDûBYû$"23ûANDû MUCHûLOWERûSPREADûOFûAROUNDûû4HEû
FORû3PANISHûDEALSûISûCLEARLYûSTRONGERûANDûWEû !XESORûATû!!!!!!û!!!!ûANDû"",""nû LASTûOFûTHEMû02%03û ûFAILEDûTOû
HAVEûSEENûINVESTORSûBASEDûINû3PAINûSTARTINGû )04SûAREûONE MONTHû%URIBORûPLUSûBPn REPAYûNOTEHOLDERSûINûFULLû$EALSûUNDERûAû
TOûGETûACTIVEûAGAINv BPûONûTHEûõMû#LASSû!ûBPûONûTHEû RIVALûPROGRAMMEûMANAGEDûBYû(3"#û
(UNTûHIGHLIGHTEDûSTRONGûDEMANDûINû õMû#LASSû"ûANDûBPûONûTHEûPRE PLACEDû 4RINKAUSûû"URKHARDTûALSOûSTRUGGLEDû
3EPTEMBERûFORû"ANCOû3ABADELLSûlRSTûPUBLICû õMû#LASSû# DURINGûTHEûCRISIS

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

 SECURITISATIONûMARKETûWHEREûLENDERSûHAVEû 7!,SûPRICEDûBPûANDûBPûWIDEûOFû
US ABS GONEûTOûFUNDûTHEIRûLOANS ONE MONTHû""37ûVERSUSûBPûAREAûANDû
3UB PRIMEûAUTOûISSUANCEûHASûREACHEDû BPûAREAûPRICEûTALK
SOME INVESTORS SEE BUMPS FOR 53BNûINû/CTOBERûFORûITSûBIGGESTûMONTHûINû )NûCONTRASTûTHEû!Mû#LASSû!ûANDû
SUB-PRIME US AUTO SECTOR THREEûYEARSû4HISûRISKIERûPORTIONûOFûTHEûAUTOû !Mû#LASSû!"ûNOTESûCAMEûBPûTIGHTERû
SECTORûHASûACCOUNTEDûFORûAûTHIRDûOFûTHEû THANûGUIDANCEûATûONE MONTHû""37ûPLUSû
4HEû53ûSUB PRIMEûAUTOûSECURITISATIONû MONTHSûTOTALûCAR RELATEDû!"3ûSUPPLY BPûANDûBP
MARKETûHASûHUMMEDûALONGûINûûASû h2IGHTûNOWû!"3ûINûTHEûPRIMEûANDûSUB 4HEû!Mû#LASSû"û!Mû#LASSû#û
INVESTORSûCHASEDûTHEûSECTORûFORûHIGHERûYIELDS PRIMEûSPACEûWEûAREûEXPECTINGûSTABLEû !Mû#LASSû$û!Mû#LASSû%ûANDû!Mû
2ECENTLYûHOWEVERûAûFEWûBUMPSûHAVEû PERFORMANCEûINTOûYEAR ENDûANDûNEXTûYEARvû #LASSû&ûNOTESûPRICEDûBPûBPûBPû
EMERGEDûRAISINGûCONCERNSûAMONGûSOMEûOFû SAIDû4HERESAû/.EILLû!"3ûSTRATEGISTûATû"ANKû BPûANDûBPûWIDEûOFûONE MONTHû
THOSEûINVESTORS OFû!MERICAû-ERRILLû,YNCH ""37
,ATEûPAYMENTSûINûAUTOûLOANSûHAVEûBEENû 4HISûYEARûTHEûNON BANKûLENDERûISSUEDûAû
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44 International Financing Review November 2 2019

 STRUCTURED FINANCE

NO GROWû!MûEQUIVALENTûTRIPLE 4HEûOFFERINGûSHOULDûENJOYûSOMEûSCARCITYû BPûANDûBPûOVERûONE MONTHû""37ûORû

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#LASSû"ûNOTESûWITHûAû YEARû7!, ANDû$ûNOTESûPRICEDûBPûBPûBPû GREENûTRANCHES

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

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 they may have had to allocate to some OFûFAIRûVALUEûWITHûTHEûlVE YEARûSTARTINGûATû
once it was free to trade. weaker hands to get to US$3.5bn,” said the 120bp area over swaps, the 10-year at 145bp
Mamoura, formerly known as Mubadala, banker on Wednesday. area and the 30-year at 205bp area.
SOLDû53BNûlVE 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 performance needed to be taken in context Pricing was subsequently tightened by
capture interest from Taiwanese life of the FOMC meeting, which was taking 25bp on the 2024s, 20bp on the 2029s and
insurers as it was listed on both the London place on Wednesday. 30bp on the 2049s. That meant concessions
and Taipei exchanges. “It’s Fed day. Asia’s down. Europe’s down. ranging from 5bp to 15bp. Abu Dhabi paid a
The overall size of the transaction was a US equity futures are down. Who wants to 10bp-15bp premium for its deal.
big jump on the company’s recent deals. A buy risk going into the FOMC?” Citigroup, Deutsche Bank, First Abu Dhabi
year ago, for example, Mamoura (Aa2/AA/ By Friday the bonds were back above Bank, HSBC, JP Morgan and SMBC Nikko were
AA) raised US$800m through a November reoffer, helped by a rally in Treasuries after BOOKRUNNERSûONûTHEûlVEûANDû YEARûNOTESû
ûNOTEûTHATûlNANCEDûAûTENDERûONûITSû the Federal Reserve cut the funds rate by 25bp, On the Formosa bond, Citigroup, Deutsche
2021s and 2022s. though in spread terms they were still wider. Bank and HSBC were bookrunners, while
The jumbo size was criticized by some. The 10-year tranche, for example, was the other three were structuring agents
“They clearly outsized it,” said one banker 99.569 bid, according to Tradeweb prices, only.
away after spotting the bonds down 50 cents having priced at 98.918. On a spread basis Sudip Roy

South Africa hits road with tales to tell

Sovereign to update investors after another difficult week
SOUTH AFRICA will have plenty to discuss with However, analysts were critical at the slow cannot be contested later on, otherwise
investors during a non-deal roadshow that pace of the planned reforms and lack of credibility runs thin,” said the analysts.
begins on November 7 after headlines details on how the government will tackle But Mboweni’s budget failed to dispel the
around Eskom’s future and a faltering Eskom’s debt burden. blues. Citigroup described the budget as
ECONOMYûSIGNALLEDûANOTHERûDIFlCULTûWEEKûFORû “The market had hoped for a clear “disappointing”, adding that the R10bn of
the country. separation of the three businesses debt relief for Eskom was “far below
Investors were also waiting on a review by (transmission, generation, distribution) with expectations”.
Moody’s on Friday with the agency the only the government taking a large portion of “We also believe the company may have
one of the big three to still have the Eskom’s debt in order for the companies to trouble accessing capital markets in 2020–
sovereign at investment grade. begin with a clean slate,” said Citigroup 2021 without a stronger plan of support
Moody’s rates South Africa at Baa3 with a analysts in a note. absent a government guarantee,” said
stable outlook. S&P and Fitch rate the “The debt restructuring was not analysts at the US bank.
sovereign at BB+. addressed, and as of now, the only clarity is The picture looked no better when taking
Sovereign bonds widened by 25bp-35bp with the transmission business, which will in the broader economy. Mboweni forecast
over the course of the week as the be spun out to an Eskom Holdings subsidiary WIDERûBUDGETûDElCITSûANDûSOARINGûDEBTû4HEû
government failed to appease concerns by the end of March 2020.” economy is barely growing and is also
about the direction of reforms. Finance minister Tito Mboweni was saddled with chronically high
On Tuesday a paper setting out plans to expected to outline further details the unemployment.
overhaul the power sector disappointed following day in his medium-term budget, The National Treasury’s meetings, which
analysts. The government is seeking to break including a debt restructuring strategy for will take place in Europe and the US, are part
up loss-making state utility Eskom over the state-owned enterprises – estimated by of a regular investor relations schedule and
next three years and open up the industry to Citigroup at about R450bn (US$30bn). will run until November 13.
more competition. “The trick is to come up with options that Robert Hogg, Sudip Roy

International Financing Review November 2 2019 53

 still has US$450m remaining from its offshore CMB International, BoCom International, Orient
debt issuance quota from the National Securities (Hong Kong), CMB Wing Lung Bank and
ASIA-PACIFIC Development and Reform Commission that TF International.
will expire at the end of this year. The proposed Reg S notes will be issued
by Hongkong International (Qingdao) with
CHINA LANZHOU LGFV READIES FOR DEBUT THEûBENElTûOFûAûKEEPWELLûDEEDûAûDEEDûOFû
equity interest purchase undertaking and an
KAISA REVISITS THE 144A MARKET LANZHOU CONSTRUCTION INVESTMENT (HOLDING) irrevocable cross-border US dollar standby
GROUP has hired banks for a proposed debut facility agreement issued by Qingdao City
KAISA GROUP HOLDINGS, rated B1/B/B, has offering of US dollar senior guaranteed Construction.
reopened its 11.95% senior notes due notes. The bonds have expected ratings of BBB/
October 22 2022 for a tap of US$200m, China International Capital Corp, Bank of A– (Fitch/Lianhe Global).
bringing the total to US$600m. China and SPDB International are global 4HEûINVESTMENTûANDûlNANCINGûARMûOFûTHEû
The additional bonds were sold at 100.79 coordinators as well as bookrunners and eastern Chinese coastal city of Qingdao last
to yield 11.625%, inside initial guidance of lead managers with BoCom International, CMB tapped the market with a US$300m 4.00%
the 12% area. International, Haitong International, Industrial lVE YEARûBONDûPRICEDûONû3EPTEMBERû
The 144A/Reg S notes have expected Bank Hong Kong branch and Orient Securities QINGDAO WEST COAST DEVELOPMENT (GROUP)
ratings of B2/B (Moody’s/Fitch). (Hong Kong). mandated arrangers for investor meetings
Final statistics were not available at the 4HEûGOVERNMENTûlNANCINGûVEHICLEûOFû in Hong Kong on October 31 and Singapore
time of writing but orders were said to be in Lanzhou city in China’s northwestern on November 1, ahead of a proposed US
EXCESSûOFû53BNûATûTHEûTIMEûOFûlNALû province of Gansu met investors in Hong dollar bond offering.
guidance. Kong and Singapore last week. CLSA, CICC, Bank of China and Industrial Bank
The Hong Kong-listed Chinese real estate The proposed Reg S notes will be issued Hong Kong branch are global coordinators.
company plans to use the proceeds to by subsidiary City Development Company They are also bookrunners with China
RElNANCEûMEDIUMûTOûLONG TERMûDEBTû of Lan Zhou (CDL) and the state-owned Minsheng Banking Corp Hong Kong branch,
coming due within one year. parent company will provide a guarantee. BoCom International and Guotai Junan
Credit Suisse was sole global coordinator as The notes have expected ratings of Baa3/ International.
well as lead manager and bookrunner with BBB– (Moody’s/Fitch), on par with the An offering of senior unsecured Reg S
Barclays and Kaisa Financial Group. guarantor. bonds may follow.
The original notes were priced on October Lanzhou Construction Investment has Wholly owned subsidiary Xi Hai An 2019
15 at 99.265 to yield 12.25%, inside initial businesses in water, gas and heating supply, will issue the proposed bonds with a
guidance of the 12.50% area. public transport, strategic grain and oil guarantee from the parent.
4HEûDEALûWASûTHEûlRSTû!ûOFFERINGûFROMû reserves, social housing and urban The proposed bonds have expected
a Chinese high-yield property developer development, according to Fitch. ratings of Baa3/BBB– (Moody’s/Fitch), in line
since Country Garden raised US$550m in 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

 EMERGING MARKETS ASIA-PACIFIC

developments, and the construction and

operation of public assets and community
facilities. China property bond rush resumes
BEIJING CAPITAL PLANS PERP ISSUE „ CHINA Rebound in prices triggers busiest day for new issues since July

BEIJING CAPITAL GROUP, rated Baa3/BBB–/BBB, Chinese property developers are rushing to sell Chinese high-yield property bonds despite the
has hired banks for a proposed offering of offshore bonds to take advantage of improving recent rally.
US dollar subordinated perpetual securities market conditions and use up offshore debt “Double B names are offering a 6% handle
and will start to meet investors in Hong issuance quotas before the end of the year. while B+ names are offering a 7%–8% handle,
Kong and Singapore on Monday. SUNAC CHINA HOLDINGS, CIFI HOLDINGS (GROUP) which are not easy to find in other sectors under
China Citic Bank International, Haitong and KAISA GROUP HOLDINGS raised a combined the current low-yield environment,” she said.
International and HSBC are global US$1.25bn from US dollar bonds last Tuesday. “Although China’s property sales showed
coordinators as well as lead managers and ZHENRO PROPERTIES GROUP continued the trend some signs of weakness, for those developers
bookrunners with Bank of Communications, on Wednesday with a US$300m issue, followed that have issued dollar bonds, most of them
China Everbright Bank Hong Kong branch, China a day later by CENTRAL CHINA REAL ESTATE, which still reported growth in pre-sales in the past few
International Capital Corp, CLSA, CMB sold a US$200m bond. months.”
International, CMB Wing Lung Bank, Guotai An improvement in sentiment in October on Moreover, supply risk from the sector has
Junan International, ICBC International, Nomura, signs that US-China trade tensions are easing reduced after the National Development and
Silk Road International and Standard Chartered. has opened a window for developers that are Reform Commission imposed new rules on the
The proposed Reg S securities will be able to come to market quickly, said a DCM use of offshore bond proceeds in July, she added.
issued by Central Plaza Development and banker from a European bank. The NDRC said at the time that developers
guaranteed by International Financial “Chinese US dollar high-yield property bonds could only use the funds from any new offshore
Center Property. The perp will have a on average rebounded 1.5–2.0 points in cash bond issues to refinance medium or long-term
keepwell and liquidity support deed and a prices in October, following some weakness seen offshore borrowings due to mature within a year.
deed of equity interest purchase in the past two to three months,” the banker said. The DCM banker from the European bank said
undertaking from Beijing Capital Group. “Most of these developers are repeat issuers some developers were keen to use up the quotas
The perps have an expected BB+ rating that have issued bonds multiple times earlier this that they received before the new rule came into
from Fitch. year. Hence, for documentation, it only takes one force as these give them more flexibility on the
Beijing Capital Group, which is 100% week or even a few days.” use of proceeds. Moreover, if they increase their
owned by the Beijing municipal Demand for Chinese high-yield property amount of offshore bonds it will make it easier
government, is active in water and bonds remains strong as investors seek yield in a to apply for a new quota if the policy remains
environmental protection, infrastructure, low-rate environment, and all of last week’s new unchanged, he said.
REALûESTATEûANDûlNANCIALûSERVICES issues attracted strong oversubscription. Some developers have already used up their
Sunac’s US$650m issue was 6.8 times entire quota, such as Sunac and Ronshine China
CHENGDU JIAOZI FINANCIAL PLANS covered, Zhenro’s US$300m bond was 5.3 times Holdings, he said.
DEBUT subscribed, CCRE’s US$200m deal 4.75 times Sunac has raised US$3.4bn from five deals
covered and CIFI’s US$400m deal 2.4 times. this year while Ronshine visited the markets eight
CHENGDU JIAOZI FINANCIAL HOLDING GROUP, rated With such robust demand, developers can times to raise a total of US$1.83bn.
BBB+ by Fitch, has hired banks for a now offer a thinner premium and print at longer The banker expects supply from China’s
proposed debut offering of US dollar senior tenors than earlier in the year. property sector will remain strong next year
unsecured notes and met investors in Hong On average, they only need to give a new issue despite the new NDRC rules.
Kong and Singapore last week. premium of about 10bp–20bp compared with “Supply is unlikely to be as strong as this year,
Haitong International is sole global 25bp–30bp in July-August, the banker said. but the sector will remain the main supplier
coordinator as well as lead manager and in the high-yield segment as there are a large
bookrunner with ICBC, CCB International, ATTRACTIVE YIELDS amount of outstanding offshore property bonds
China Citic Bank International, China Securities Judy Kwok-Cheung, director of fixed-income maturing in the next two years,” he said.
International, CMB Wing Lung Bank, Haitong research at Bank of Singapore, still sees value in Carol Chan
Bank, Orient Securities (Hong Kong), Shanghai
Pudong Development Bank Hong Kong branch
and Winsome. RElNANCINGûANDûGENERALûCORPORATEûPURPOSESû maturities of one month or longer. Dealers of
The proposed Reg S notes have an according to Fitch. the programme include ANZ, Barclays, BNP
expected BBB+ rating from Fitch. Paribas, Bank of America, Citigroup, Credit Agricole,
Jiaozi is wholly owned by the Chengdu Deutsche Bank, Goldman Sachs, HSBC, JP Morgan,
SASAC and serves as an investment holding HONG KONG Mizuho Securities, Morgan Stanley, MUFG, Nomura,
arm to consolidate the municipality’s Standard Chartered, UBS and Westpac.
lNANCIALûASSETSûACCORDINGûTOû&ITCHû4HEû MTR SETS UP US$5bn DEBT PROGRAMME The programme is listed on the Stock
company is the largest shareholder of Bank Exchange of Hong Kong.
of Chengdu and Jintai Insurance, and the MTR has set up a US$5bn debt issuance Rating agencies have taken negative
second-largest shareholder of Chengdu programme with HSBC as arranger, actions on MTR recently due to months of
Rural Commercial Bank. It also established according to a stock exchange statement. persistent unrest and protests in the city.
the second licensed local asset-management MTR Corp (CI) Limited is the issuer under On September 10 Fitch cut MTR’s issuer
company in the province. the programme with the Hong Kong-based rating to AA from AA+ following the
Proceeds from the proposed notes will be mass transit operator as guarantor. 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 31 ahead of a proposed Singapore dollar Bharti (Ba1/BBB–/BBB–) said it would delay
Aa2 rating outlook to negative from stable, bond offering. the publication of its quarterly results until
following the change in outlook on Hong HSBC is sole global coordinator. It is also November 14 while it assessed the impact of
Kong’s Aa2 rating to negative from stable on bookrunner with ANZ. a Supreme Court decision on October 24
September 16. A Singapore dollar perpetual non-call that is expected to cost Indian telecoms
30ûONû3EPTEMBERûûALSOûmAGGEDûTHATû three Reg S securities offering may follow. companies billions of dollars.
-42SûSTANDALONEûCREDITûPROlLEûMAYûWEAKENû Wholly owned subsidiary Tata International The telecoms operator on October 8 sold
if recent protests continue to adversely Singapore will issue the proposed bonds with US$750m subordinated perpetual non-call
impact on passenger numbers and retail a guarantee from the parent company. TATA 5.5 securities at par to yield 5.65%, but the
sentiment in Hong Kong. S&P has a AA+ SONS and other Tata Group companies own a notes dropped 3.7 points on October 24, after
rating on the company with stable outlook. combined 99.87% stake in Tata International. THEûCOURTûREJECTEDûTHEûDElNITIONûTELECOMSû
companies use to calculate adjusted gross
COURT RULING DEALS BHARTI BLOW revenue (AGR), on which the Department of
INDIA Telecommunications imposes their licence
Investors in Indian telecommunications fees and spectrum usage charges. The DoT
TATA EYES SINGAPORE DOLLARS operator BHARTI AIRTEL‘s US dollar perpetual has demanded the telecoms industry pays a
bonds are nursing a six-point paper loss total of US$19bn, according to Fitch.
Indian conglomerate TATA INTERNATIONAL held after an unexpected court ruling that may On Wednesday, Fitch said that it had put
investor meetings in Singapore on October lead to a downgrade. 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 Bharti had been due to table results for which has no offshore bonds, will be most
said would cost Bharti US$3bn in licence the second quarter ended September 30 at affected, leaving Bharti and Jio to battle it
fees and potentially US$2.9bn in unpaid its board meeting last Tuesday, but said it out for supremacy.
dues on spectrum usage charges. Interest would seek further explanation of the Last Wednesday, domestic rating agency
and penalties amount to about 75% of the ruling from the DoT. The company Care cut the issuer rating of Vodafone Idea
total. said that the court decision “may further from A to A– and placed it under watch with
Bharti’s perps were bid at a cash price of weaken the viability of the sector as a negative implications in light of the
94 on Thursday after the Fitch whole”. Supreme Court’s decision.
announcement, implying a yield of 7%. Fitch warned that incumbent operators
Telecoms companies argued that AGR would be unlikely to participate in India’s
should comprise only revenue earned from planned 5G spectrum auction, expected to INDONESIA
telecoms services, but the DoT said it should be held in the next 12-18 months, if they
include all revenue. The dispute dates back had to disburse the unpaid dues in the short PLN MAKES RAPID OFFSHORE RETURN
to 2005, and many of the operators involved term. It questioned whether the
have gone out of business since then, due to government would provide any relief to PERUSAHAAN LISTRIK NEGARA on Tuesday printed
intense competition in the sector – not least telecoms affected by the ruling. more than US$1.5bn-equivalent across two
from Reliance Jio Infocomm, which started Bharti’s share price has actually risen currencies in its third G3 bond offering in
business in 2016 by offering aggressive since the court ruling, as investors assume three months, paying no new issue
discounts. that smaller competitor Vodafone Idea, 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

 their tightest this year, and 85bp–90bp at

Fosun brings China HY to Europe 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
„ HIGH-YIELD Conglomerate broadens investor base with competitively priced deal widest was 105bp–110bp.
The deal showed there remains solid
FOSUN INTERNATIONAL last Wednesday became including France-headquartered package demand for PLN, even after its printing
the first Chinese high-yield issuer to sell euro holiday operator Club Med, English Premier US$1.4bn of dollar bonds and a ¥23.2bn
currency bonds in a public offering, showing that League club Wolverhampton Wanderers and a (US$215m) debut Samurai trade in
there is a hungry investor base in Europe for the stake in Portuguese bank BCP. In 2018 alone, September.
right credits. Fosun jointly acquired French health food Orders for the 10.25-year dollar tranche
The Hong Kong-listed Chinese conglomerate company St Hubert, and bought fashion brands were over US$1.8bn from more than 120
was targeting an issue size of at least €300m, Lanvin from France and Wolford from Austria. accounts. Asia took 58% of the 144A/Reg S
but ended up printing €400m (US$447m) of European investors naturally questioned bonds, EMEA 16% and the US 26%.
3.5-year bonds and tightening strongly from Fosun’s investment in collapsed British travel By investor type, fund managers and asset
initial guidance. agent Thomas Cook, which entered liquidation managers booked 66%, bank treasuries 10%,
The Reg S notes, to be issued through in September. Fosun had been increasing its sovereign wealth funds, sovereigns,
subsidiary Fortune Star (BVI), with a guarantee stake and offered a rescue package before the supranationals and agencies 10%, insurers
from Fosun, have expected ratings of Ba2/BB company failed. and pension funds 9% and private banks and
(Moody’s/S&P). However, the impact was minor in the context others 5%.
Initial price thoughts started at the 4.875% of Fosun’s business. It held a 18.6% stake in Books were over US$2.7bn for the 30.25-
area, before guidance tightened to 4.500%– Thomas Cook, valued at about Rmb327m year tranche from more than 150 accounts.
4.625%. By the time the final yield of 4.35% was (US$46m) at the time of the collapse. Asia took 45%, EMEA 27% and the US 28%.
announced, books were around €2.5bn. Proceeds from the bond will be used to Fund managers and asset managers
Fosun overcame fears that it would need to refinance offshore debt and for working capital booked 78%, insurers and pension funds
rely on Chinese demand, finding ample interest and general corporate purposes. 11%, bank treasuries 6% and private banks
from Europe. Chinese investors have a deep Credit Suisse, Deutsche Bank, Fosun Hani, and others 5%.
enough pool of US dollars to support Reg S-only HSBC, Natixis, Standard Chartered and UniCredit EMEA investors took 63% of the euro
dollar bond offerings and drive pricing, but have were bookrunners and joint lead managers. currency tranche, the US 27% and Asia 10%.
far fewer holdings in euros. This is not the first time an Asian high-yield By investor type, fund managers and asset
While there was demand from some Chinese issuer has accessed the euro market. Japan’s managers booked 84%, corporates 5%, banks
offshore accounts, European real-money SoftBank is the most regular visitor, but there 4% and private banks and others 7%.
investors were also active participants. have been occasional prints from elsewhere in The senior unsecured bonds have
Final orders were over €2.3bn from more than the region. expected ratings of Baa2/BBB/BBB, in line
200 accounts, with investors from Continental Mianyang Investment Holding Group, which with the issuer.
Europe taking 47%, the UK 24%, Hong Kong builds infrastructure and develops land in Mianyang Bank of America, Credit Suisse, Citigroup,
21%, Singapore 6% and Taiwan 2%. Asset city in southwest China, sold €100m 364-day notes HSBC, Mandiri and MUFG were bookrunners.
managers and insurers booked a combined 82%, at 5% in September, but the offering was a club deal Bahana, BNI and Danareksa were co-
and banks and private banks 18%. and the issuer was not rated at the time. It obtained managers.
Fosun was thought to have paid 60bp–70bp a BB rating from Fitch the following month when it Proceeds will be used for capital
over its dollar curve, but some Chinese state- visited the US dollar market. expenditure in relation to electricity
owned enterprises have paid 100bp more to print In 2014, India’s Samvardhana Motherson infrastructure development projects, and
in euros. It was expected that Fosun would find Automotive Systems Group, a maker of for general corporate purposes.
euros slightly more expensive than dollar bonds, components for vehicles, printed €500m seven-
but given the scale of its businesses in Europe it year non-call three bonds, rated BB+ by S&P, PRESSURE RISES ON GEO ENERGY
made sense for it to start issuing in the currency. then returned to the euro market three years
Fosun has businesses covering finance, later as a cross-over credit. Indonesian coal producer GEO ENERGY
leisure and health, with European investments, Daniel Stanton RESOURCES faces an increased chance of an
early redemption of its US$300m bonds due
2022 after a planned acquisition was
A US$500m 3.375% 10.25-year tranche respectively, but added a euro tranche this postponed.
was priced at 99.775 to yield 3.4%, time. Geo Energy in September announced
equivalent to Treasuries plus 156bp. This emulated the Indonesian sovereign, plans to acquire a 100% stake in Titan Global
A US$500m 4.375% 30.25-year tranche which a week earlier sold 30-year dollar Energy and effective 51% stakes in two
was priced at 99.567 to yield 4.4%, bonds at 3.75% alongside a 12-year euro mines in South Sumatra from Titan and Jaya
equivalent to Treasuries plus 206.6bp. tranche priced at mid-swaps plus 130bp. Utama Indonesia for US$25m.
Initial guidance for the respective PLN’s July 2029 and July 2049 bonds were The two mines produced a combined 3.8
tranches was 3.70% area and 4.75% area. seen at around 3.4% and 4.4%, respectively, in million tonnes in 2018 and have estimated
A €500m (US$556m) capped 12-year secondary trading, meaning that the issuer paid coal tonnage of 89 million tonnes, which
tranche was priced at mid-swaps plus 175bp, no premium for the extra six months maturity. would have brought Geo Energy’s coal
inside initial price thoughts of mid-swaps The respective spreads were about 50bp reserves to around 122 million tonnes.
plus 185bp area. and 85bp over the sovereign’s dollar bonds However, on Wednesday, Geo Energy
The Indonesian state-owned power of the same maturity. announced that the owners had postponed
distributor previously sold 10 and 30-year PLN’s 10-year dollar bonds have paid a the sale process and the transaction had
dollar bonds in July, at 3.95% and 4.95%, 30bp–35bp spread over the sovereign at been put on hold.

58 International Financing Review November 2 2019

 EMERGING MARKETS EUROPE/AFRICA

Lucror Analytics warned that holders of POSCO EYES 144A/REG S DEAL The lead said he expects HCFB to
Geo Energy’s US dollar bonds can put their ultimately trade slightly wide of Tinkoff.
bonds at par after 3.5 years, in April 2021, South Korean steelmaker POSCO, rated Baa1/ Demand for HCFB made the trade more
unless at any time prior to that date the BBB+, has hired banks for a proposed straightforward than recent Tier 2 issues
issuer has at least 120 million tonnes of total offering of a short to intermediate US dollar- from Alfa-Bank and Sovcombank. The lead
reserves with licences with at least eight denominated 144A/Reg S senior unsecured said that opening with a yield above 9% had
years to run, or on the put date it has 80 bond in the near future. helped grab investors’ attention.
million tonnes of total reserves with Bank of America, BNP Paribas, Citigroup, “In a perverse way, AT1s are an easier
licences that expire no earlier than 2025. HSBC and Standard Chartered are the leads on sell,” he said.
“With only US$200m cash on hand, Geo the proposed deal. “If you look at the history in Russia, then
Energy will need to raise additional cash to when banks get in trouble, they do so
pay back the notes,” wrote Lucror. “With its spectacularly. All the capital gets written off.
track record, it could be challenging to tap the You can argue therefore there shouldn’t be
market to cover the shortfall, in our view.” much trading differential between AT1s and
The bonds, rated B2/B–/B were bid at a EUROPE/AFRICA Tier 2, but you are getting more yield.”
cash price of 71.5 on Friday, according to The deep liquidity of the rouble market
Tradeweb. means that Russian lenders can match their
S&P cut its rating by a notch to B– in July, RUSSIA loan books with domestic liabilities.
WARNINGûOFûRElNANCINGûRISKSûSINCEûTHEû But those looking to raise capital, while
company had not invested in its coal HCFB SHUNS SIZE FOR PRICE TAG keeping in mind the Russian regulator’s
reserves. In April Fitch revised its outlook on push towards higher capital buffers, must
the rating to negative, and said Geo Energy #ONSUMERûlNANCEûLENDERûHOME CREDIT AND turn their sights to the US dollar market.
would not meet the minimum reserve FINANCE BANK left a larger trade on the table HCFB is a subsidiary of Home Credit
requirements unless it made an acquisition. on Thursday in order to aggressively Group.
squeeze pricing. #ZECHûCONSUMERûlNANCEûCOMPANYû(OMEû
The Russian bank sold a US$200m 8.80% Credit has a large business in China, accounting
SOUTH KOREA perpetual non-call 5.25-year AT1 bond. The for about 64% of its €20.9bn outstanding loan
issuance fell US$100m short of what leads book, according to the prospectus for a planned
DOOSAN INFRACORE EYES KDB BACKING said to expect, despite books at one point Hong Kong IPO. It had assets of more than
passing US$650m. €23.6bn as of December 31.
South Korean construction equipment “The reduction of the issue amount is a The Czech Republic’s richest
manufacturer DOOSAN INFRACORE has hired strange decision in our view and will 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 2022 bond alongside a €600m 7.125% July
manifested in the sovereigns’ yields. 2024 note. REGIONAL
Serbia June 2029s are bid at 1.16%, The euro note is yielding 6.02%, according
while Croatia’s June 2029s are quoted at to Tradeweb, while the dollar bond is quoted PPF ARENA 1 BACK FOR MORE
0.59%. at 6.85%.
“People might also look at Romania from Bankers at the time of pricing were PPF ARENA 1 is returning to the market for the
a curve perspective when it comes to puzzled by the dollar tranche, which was second time this year, following up a €550m
PRICINGûBUTû3ERBIASûSûWILLûBEûTHEûlRSTû added as the roadshow was coming to a seven-year trade from March.
port of call,” said the banker. close. The CEE telecoms provider, which is the
The dealer managers are BNP Paribas, A lead said that the dollar bond was added holding company of O2 Czech Republic,
Citigroup, Deutsche Bank and JP Morgan. to mop up dollar demand, but sign off to CETIN and Telenor CEE, is looking at a euro
raise at most €900m-equivalent meant it was BENCHMARKûWITHûAûMATURITYûOFûBETWEENûlVEû
not possible to do a benchmark trade in and eight years.
UKRAINE both currencies. Moody’s published a note on PPF Arena
Naftogaz’s deal comes while Russia and 1’s upcoming bond issue, which it said will
FRESH SUPPLY WAVE BREAKS Ukraine remain locked in talks over gas BEûUSEDûTOûPARTIALLYûRElNANCEûBANKûDEBT
OVER PRIMARY transit for Europe, with one of the obstacles 4HEûlRMûHASûASSIGNEDûANûEXPECTEDû"Aû
to a new deal being litigation between rating to the notes, with a stable outlook.
Investors are preparing for another wave of Gazprom and Naftogaz. Moody’s said that PPF Arena 1’s issues are
Ukrainian supply, and issuers will be hoping The talks will continue at the end of structurally subordinated to debt at its
for cleaner results than those achieved by November, just a month before the current operating companies as the parent relies on
their forebears in autumn. gas transit deal expires. dividends from them to service its debt.
Metinvest, Kernel and MHP have all Citigroup is sole lead for Naftogaz. “Because of PPF Arena 1’s complex group
printed deals since September. Metinvest There should be even further supply from structure, upward ratings pressure is
and Kernel were both seen as a struggle and the corporate sector, as DTEK RENEWABLES UNLIKELYûUNTILûTHEREûISûAûSIMPLIlCATIONûINûTHEû
MHP sold off badly after pricing. MHP’s lNISHEDûMEETINGSûONû&RIDAYûFORûITSûPROPOSEDû debt allocation within the broader group
US$350m September 2029 bond is four EURO DENOMINATEDûlVE YEARûGREENûBOND structure and a clearer policy on the debt
points down from reoffer. On the banking side, state-owned UKREXIM distribution between PPF Arena 1 and the
State-owned gas company NAFTOGAZ has has appointed JP Morgan and Morgan Stanley operating subsidiaries to minimise
nevertheless pushed on with plans for a FORûAûDOLLARû YEARûNON CALLûlVEûSUB structural subordination,” wrote Moody’s.
trade, signalling that it wants to place a benchmark Tier 2 offering. PPF’s 3.125% 2026s are bid at 2.31%,
US$500m seven-year bullet bond as early as A banker away from the Basel II trade according to Tradeweb.
Monday. thinks there should be good appetite for the -EETINGSûlNISHEDûONû&RIDAY
4HEûMATURITYûISûATûTHEûLONGERûENDûOFûAûlVEû bonds given that it will be an old-style note. 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 BRAZIL prepping a new dollar note together with an
fully organized into two separate creditor any and all tender offer for its 11% 2021
COMMITTEESûSOMETIMEûWITHINûTHEûlRSTûTWOû BANCO ORIGINAL MANDATES BANKS bonds.
weeks of November, an investor told IFR. AHEAD OF NEW BOND The transaction is being arranged by BB
The two committees are expected to Securities, Banco Bradesco BBI, and HSBC
comprise investors holding more than 25% Brazilian bank BANCO ORIGINAL has mandated securities.
of the debt, the source involved in the ahead of a new dollar deal. Andrade Gutierrez is offering a buyback
process said. BCP Securities, Santander, and XP Investments price of 100.25 for the notes.
Organization of the committee has began meeting with investors on October Leads started meeting with investors on
progressed beyond the early stages as a 30. The new note is expected to price this October 29 and will wrap up on November
critical mass of investors interested in week. 6. The bond is being offered in a 144A/Reg S
participating have come together. The senior unsecured 144A/Reg S note private placement format.
4HEYûAREûALSOûRETAININGûPROFESSIONALûlNANCIALû will have short to intermediate maturity Proceeds of the transaction will go
and legal advisers, according to the investor. and is rated B/B+ by S&P and Fitch. towards funding the tender.

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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 ûNETûBUTûITSûDIFlCULTûFORûASSETûALLOCATIONû FORûAûPOTENTIALûSLOWDOWNûOFûTHEû53ûECONOMYû
that the private debt market will continue to If you want broader acceptance you need to was another recurrent topic at the
grow, but questions remain how have something that benchmarks all models SuperReturn conference.
performance is measured in an asset class and it’s not 8%,” she said. Private credit managers have for years
that is deeply opaque and lacks direction. stated they are building a portfolio to protect
The absence of a pricing benchmark is a MORE RUNWAY themselves against a downturn, avoiding
key concern, said participants at the $ESPITEûPRIVATEûCREDITûlRMSûHOLDINGûRECORDû non-cyclical industries such as retail or oil
conference. While there is agreement that amount of dry powder, investors and lenders and gas.
the spread premium for middle market alike remain bullish about the market’s
loans is 250bp over leveraged loans, this future growth, citing development of private
STANDARDISATIONûDOESNTûACCURATELYûREmECTûTHEû equity fundraising activities as a source of “We are long in a business cycle
risk in other strategies also labelled as increasing opportunities for lenders. and concerned about when the
private debt. With bigger funds being raised some of music is going to stop”
Private debt managers operate within the top lenders, such as Ares Management,
specialised niches and beyond the traditional Antares Capital and Golub Capital, are
middle market loan. Some prioritise lending lNDINGûOPPORTUNITIESûATûTHEûHIGHERûENDûOFû
to private equity borrowers, while others the market and syndicating loans
prefer non-sponsored deals. Lenders split themselves. While other lenders want to
themselves among the upper middle maintain a sole focus on the core middle
market, core middle market and lower MARKETûORûlNDûOPPORTUNITIESûATûTHEûLOWERû
market, and others have moved into end. In the last few months, the prospect of a
SPECIALTYûlNANCE 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. "OSWELLûCHIEFûINVESTMENTûOFlCERûATû#ARLYLEû /THERSûSAIDûTHEYûEXPECTûAûhSOFTûLANDINGvû
Direct Lending, on a panel. ANDûTHATûANYûEXPECTEDûVOLATILITYûWILLûBEûAKINû
“As the industry gains scale, private credit to the ripples through the energy markets in
“A good benchmark for most lRMSûAREûTAKINGûAûLOTûOFûSHAREûFROMûTHEû ûANDûûRATHERûTHANûTHEûlNANCIALû
managers is an absolute return broadly syndicated leverage market. The crisis a decade ago.
trend has a got a long way to run,” he said. Investors in private credit funds echoed
of 7% to 9% net, others 12%
“It’s a signal that the market is fragmented, similar points at the SuperReturn
net, but it’s difficult for asset not saturated.” CONFERENCEûEXPLAININGûWHYûTHEYûCONTINUEû
allocation” 0RIVATEûCREDITûlRMSûFORûTHEûLASTûFEWûYEARSû to make big bets on private credit
have sought to diversify their offering to stay more than ten years after the last
ahead in a competitive market. Now scale is downturn.
becoming a more important factor. “We are long in a business cycle and
Randy Schwimmer, head of origination at concerned about when the music is going to
Some private debt returns are closer to Churchill Asset Management, said on a panel stop. But we’re focused on the middle
private equity double-digit returns, others that we’ve moved beyond this “cargo pants” market segment where the risk return is
AREûSLIGHTLYûHIGHERûTHANûSINGLE DIGITûlXED phase of providing different types of debt to more attractive than broadly syndicated
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. h)NûTHISûMARKETûûlRMSûCANûDOû53Mû Quebec, speaking at a conference panel.
“Let’s use a common language,” said Mary PLUSû4HEûNEXTûBENCHMARKûWILLûBEû53Mû “And we avoid deploying capital in broadly
Bates, senior vice president at Meketa holds and you’re not going to be in the syndicated loans when there is market
Investment Group, at a panel at the game if you can’t do that,” Schwimmer volatility.”
SuperReturn Private Credit conference. said. 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 -ELBOURNEûISûRAISINGû!MûFROMûAûlVE THREE YEARûCLUBûLOANûOFûABOUTû53M
Asia and commitments were scaled back year loan. HSBC is the coordinator of the deal, which
SIGNIlCANTLY DBS Bank is the mandated lead arranger is likely to offer an interest margin of 248bp
HSBC, National Australia Bank and Westpac and bookrunner of the transaction, which over Libor.
were the mandated lead arrangers and pays an interest margin of 200bp margin 0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû
bookrunners of the deal, which now over BBSY. general corporate purposes.
COMPRISESûAû!MûFOUR YEARûREVOLVERû Banks joining as MLAs with commitments 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 The borrowing represents a loan-to-value 4HATûLOANûAVAILABLEûINû53ûORû(ONGû+ONGû
Bank, Rabobank, Bank of Communications, China ratio of about 50%. dollars, offered a top-level all-in pricing of
Construction Bank, China Everbright Bank and 0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû 312bp, based on an interest margin of
ANZ. Lead arrangers are Agricultural Bank of CAPITALûEXPENDITUREûFORûASSETûENHANCEMENT 256.5bp over Hibor/Libor and an average life
China, MUFG, SMBC, Hua Nan Commercial Bank, !USTRALIANûREALûESTATEûINVESTMENTûlRMû!SHEû of 2.7 years. It was increased from an
E Sun Commercial Bank, Mega International Morgan and Singapore-based private equity ORIGINALû53M EQUIVALENTûTARGET
Commercial Bank and Norinchukin. fund SC Capital Partners own the property. (ONGû+ONG LISTEDû'REENTOWNûISûONEûOFû
Co-arrangers are DBS Bank, Citigroup, China China’s major property developers, with a
Merchants Bank and Tai Fung Bank. Senior lead PRIMARYûFOCUSûINû(ANGZHOUûCITYûANDû
arrangers are Shinsei Bank, BNP Paribas, Credit CHINA Zhejiang province.
Industriel et Commercial, Goldman Sachs, Chang
Hwa Commercial Bank, Chugoku Bank, Taipei FIVE JOIN CARREFOUR CHINA
Fubon Commercial Bank, Taiwan Cooperative HONG KONG
Bank, Metrics Credit Partners, Nishi-Nippon City &IVEûBANKSûHAVEûJOINEDûTHEû53MûTHREE
Bank, Bank Sinopac, Taishin International Bank year loan backing Chinese retail giant LANGHAM NETS DEBUT SLL
and Bank of Taiwan. Suning.com’s acquisition of a controlling
Lead managers are Taiwan Business Bank, stake in French retailer Carrefour’s China LANGHAM HOSPITALITY INVESTMENTS, a spin-off of
Commonwealth Bank of Australia, Shin Kong business. (ONGû+ONGûDEVELOPERû'REATû%AGLEû(OLDINGSû
Commercial Bank, Shinhan Bank, Sumitomo Several other banks are processing credit HOTELûASSETSûISûLOOKINGûTOûRAISEû(+BNû
Mitsui Trust Bank, First Commercial Bank, Land APPROVALSû3YNDICATIONûISûEXPECTEDûTOûCLOSEû
Bank of Taiwan, Shanghai Commercial & Savings in early November. ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY
Bank and Taichung Commercial Bank. Managers Standard Chartered is the sole mandated SYNDICATED VOLUME (INCLUDING JAPAN)
are Bank of Kaohsiung, Eastspring Investments lead arranger, bookrunner and underwriter 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 SIME DARBY PLANTATIONS has sent a request for 2022, according to Refinitiv LPC data. The facility
and EarthCheck achievement level. proposals for a refinancing, shortly after Moody’s is part of a larger US$830m financing closed in
The interest margin will step up by 8bp if revised the credit outlook of the borrower to February 2015. HSBC, OCBC, Mizuho Bank and
THEûBORROWERSû%BITDAûTOûlNANCIALûCHARGEû negative. MUFG were the lenders of the club.
ratio falls below 2 times. The company, which is the plantation and The company also has an outstanding
,(),SûTHREEûPORTFOLIOûHOTELSûINû(ONGû+ONGû agribusiness arm of Malaysian conglomerate M$2.2bn (US$526.5m) Islamic perpetual non-
nû4HEû,ANGHAMû#ORDISûANDû%ATONûnûWILLû Sime Darby, did not specify a size or tenor for the call 10 bond, which it raised in 2016. Maybank
serve as security for the loan. financing, which is likely to close as a club. was the sole lead manager of the notes, which is
0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûAû The deadline for proposals was Wednesday. part of a M$3bn Islamic perpetual programme.
(+BNûLOANûMATURINGûINû-ARCHûNEXTûYEAR On October 9, Moody’s affirmed Sime Darby The borrower’s scheduled debt maturities include
That four-year facility which closed in Plantations’ Baa1 issuer ratings, but revised the US$750m in term loans with a bullet maturity in
March 2016 had offered a top-level all-in outlook to negative from stable owing to its weak June 2020, according to the rating agency.
pricing of less than 120bp based on a margin credit metrics. Despite mounting debt concerns, Moody’s
of 98bp over Libor. Citigroup and HSBC were Following Sime Darby Plantations’ weak expects Sime Darby Plantations to proactively
the mandated lead arrangers, bookrunners operating results to end June, the company’s refinance these maturities in the coming months.
and underwriters of that transaction, which adjusted debt-to-Ebitda increased to around 5 “Sime Darby Plantations’ refinancing risk is
attracted 15 other lenders. times as of June 30 from around 4 times as of partially offset by its strong access to funding
March 31, Moody’s said. from domestic and international banks,
“While the soft second quarter 2019 results particularly due to its government of Malaysia-
INDIA were primarily driven by weaker palm oil prices, linked shareholders – Permodalan Nasional and
the lower earnings and increase in debt mean Employees Provident Fund of Malaysia,” the
OIL ENDS THREE-YEAR HIATUS that despite its planned M$1bn debt reduction, rating agency said.
Sime Darby Plantations’ adjusted leverage will The borrower last raised a US$430m six-
State-owned OIL INDIA has sent a request for only decline to around 4x by the end of 2019,” month bridge loan in May 2017. The financing
PROPOSALSûFORûAû53MûlVE YEARûLOANûAFTERû said Maisam Hasnain, analyst at Moody’s. “This closed as a club and was equally split between
a three-year hiatus from the offshore loan level of leverage exceeds our previous estimate OCBC and Standard Chartered, according to
markets. of 3.3x and will continue to exceed the 3.5x Refinitiv LPC data.
The deal carries a greenshoe option of up downward rating trigger for its Baa1 ratings.” Listed on Bursa Malaysia, Sime Darby has core
TOû53M Sime Darby Plantations has more than businesses in the industrial, motors, logistics,
4HEûBORROWERûLASTûRAISEDûAû53MûONE US$1.5bn of debt outstanding, including a healthcare, insurance and retail sectors.
YEARûBRIDGEûLOANûINû!UGUSTûûTOûlNANCEûITSû US$500m seven-year term loan due in February Chien Mi Wong
purchase of a stake in two Russian oil and gas
lELDSû$"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
offered a top-level all-in pricing of 78bp Commercial Bank and Musashino Bank.
FOUR JOIN HDFC LOAN based on an interest margin of 63bp over The transaction paid a top-level all-in
yen Libor and a remaining life of 4.75 years. PRICINGûOFûBPûOFFSHORE ûORûBPû
Mortgage lender HOUSING DEVELOPMENT FINANCE ONSHORE ûBASEDûONûINTERESTûMARGINSûOFûBPû
CORPûHASûCLOSEDûITSû53MûTHREE YEARûTERMû OFFSHORE ûORûBPûONSHORE ûOVERû,IBORûANDû
loan, which attracted four other lenders in INDONESIA an average life of 4.1 years.
general syndication. The borrowing follows PLN’s debut foreign-
First Abu Dhabi Bank, Korea Development PLN US$1bn LOAN ATTRACTS EIGHT currency loan last year, which was increased
Bank, Standard Chartered and Sumitomo Mitsui TOû53BNûFROMûAû53BNûTARGETûAFTERû
Trust Bank were the mandated lead arrangers State-owned electric utility PERUSAHAAN attracting 13 banks in general syndication.
and bookrunners. Bank of China had joined as LISTRIK NEGARAûHASûCLOSEDûAû53BNûlVE YEARû 4HATûLOANûCOMPRISESûAû53BNûlVE YEARû
an MLA before the launch. term loan following commitments from amortising term loan Tranche A, which
Lead arranger is Norinchukin Bank. eight lenders in general syndication. offered a top-level all-in pricing of 107.87bp
Arrangers are Bank of Taiwan, Hua Nan Bank of China, Cathay United Bank, DBS Bank, OFFSHORE ûORûBPûONSHORE û4HEû
Commercial Bank and Hokkoku Bank. Korea Development Bank, MUFG, OCBC Bank, 53MûTHREE YEARûREVOLVINGûCREDITûFACILITYû
The transaction paid a top-level all-in SMBC and United Overseas Bank were the 4RANCHEû"ûPAYSûBPûOFFSHORE ûORûBPû
pricing of 106.1bp based on an interest mandated lead arrangers and bookrunners ONSHORE ûANDûHASûANûAVERAGEûLIFEûOFûûYEARS
margin of 85bp over Libor and an average of the facility.
life of 2.61 years assuming transfers take Mandated lead arrangers are China ADIRA RETURNS WITH NEW-MONEY LOAN
place this month. Development Bank and China Construction Bank.
The borrowing is HDFC’s second offshore Lead arranger is Norinchukin Bank, while Chang ADIRA DINAMIKA MULTI FINANCE has launched a
loan this year. In April, it raised a ¥53.2bn Hwa Bank is an arranger. Lead managers are 53MûTHREE YEARûAMORTISINGûFACILITYû

International Financing Review November 2 2019 65

RETURNINGûTOûTHEûLOANûMARKETSûSIXûMONTHSû underwriters of the borrowing, which at signing
after its last visit. JAPAN COMPRISEDûAû53MûTERMûLOANûANDûAû
ANZ, DBS Bank, Maybank, MUFG and United 53MûDEBTûSERVICEûLETTERûOFûCREDITûFACILITY
Overseas Bank are the mandated lead SEKISUI HOUSE REIT RENEWS Standard Chartered Bank and SMBC had
arrangers and bookrunners of the new joined as MLABs prior to launch into general
transaction, which pays the same pricing as SEKISUI HOUSE REITûSIGNEDûAûcBNû53M û syndication.
its previous loan from April. one-year commitment line on Wednesday to Mandated lead arranger is China
The new-money deal offers an interest RENEWûANûEXISTINGûFACILITY Construction Bank. Lead arrangers are China
margin of 90bp over Libor and has an MUFG was the arranger and agent and Minsheng Banking Corp and First Abu Dhabi
average life of 1.625 years. took ¥5.5bn, while Mizuho Bank and SMBC Bank. Arrangers are State Bank of India, BDO
Lead arrangers receive a top-level all-in committed ¥5bn and ¥4.5bn. Unibank, KGI Bank, Yuanta Commercial Bank
pricing of 106bp for commitments of Funds are for real estate acquisitions and and Bank SinoPac. Co-arrangers are Woori
53MûORûMOREûVIAûAûPARTICIPATIONûFEEû RElNANCINGûPURPOSES Bank, Taipei Fubon Commercial Bank, CTBC Bank,
of 26bp, while arrangers earn an all-in The borrower, which invests in residential Taiwan Shin Kong Commercial Bank and Taishin
OFûBPûFORû53MnMûVIAûAûFEEû and commercial buildings mainly in the International Bank.
of 21bp. Tokyo, Osaka and Nagoya areas, increased The term loan pays an interest margin of
Funds are for general corporate purposes. the annual facility to ¥15bn from ¥10bn last 150bp over Libor and has a remaining life of
The borrower’s previous loan was an October. 2.1 years, while the LC facility offers a
INCREASEDû53MûTHREE 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 The top-level all-in pricing for lenders
which offered a top-level all-in pricing of WASCO ENERGY EYES US$100m DEAL participating only in the term loan tranche
106bp based on a margin of 90bp over Libor is 181bp, based on a 65bp fee.
and an average life of 1.625 years. Engineering, procurement and construction MONG DUONG FINANCE HOLDINGS is the
The Jakarta-based company, a unit of Bank company WASCO ENERGY is seeking an up to borrower.
Danamon Indonesia, provides consumer 53MûDUAL 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 revolver’s unutilised principal portion. !%3û û0/3#/û%NERGYû ûANDû#HINAû
ONSHORE ûFORûCOMMITMENTSûOFû53MûORû Proceeds from the borrowing will be used )NVESTMENTû#ORPû ûANDûHASûBEENûINû
more via a participation fee of 40bp, while FORûRElNANCINGûANDûWORKINGûCAPITALû operation since 2015.
ARRANGERSûEARNûANûALL INûOFûBPûOFFSHORE û purposes.
ANDûBPûONSHORE ûFORûTICKETSûOFû53Mn Malaysia-headquartered Wasco is a wholly
MûVIAûAûFEEûOFûBP owned subsidiary of listed entity Wah Seong
The deadline for commitments is and serves the global oil and gas industries
November 22. A roadshow was held in worldwide. EUROPE/MIDDLE
Tokyo on Wednesday. EAST/AFRICA
The borrower’s previous loan was a
53MûTHREE YEARûCLUBûDEALûINû*ULYû VIETNAM
ANZ, Bank of China, BNP Paribas, Citigroup, BELGIUM
$"3û"ANKû(3"#û+OREAû$EVELOPMENTû MONG DUONG LOAN DRAWS 13
Bank, OCBC Bank and Standard Chartered UCB LINES UP LOAN FOR RA PHARMA BUY
Bank were the lenders of the self-arranged #OAL lREDûPOWERûPLANTûOPERATORû!%3 6#-û
deal. 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

 LOANS EMEA

The loans are being arranged and estate and mechanical engineering. The 2016 and 2017, of which around €580m was
underwritten by BNP Paribas Fortis and Bank of group had assets of more than €45bn as of outstanding in 2018.
America. BNP Paribas is facility agent. December 2018.
Pro forma net debt to Ebitda on the TOM TAILOR UPS LOAN TO €375m
acquisition will be in the range of between
1.5 and 2.0 times with a rapid deleveraging FRANCE Clothing retailer TOM TAILOR has closed a
ALLOWINGû5#"ûTOûMAINTAINûSIGNIlCANTû €375m syndicated loan after increasing the
BALANCEûSHEETûmEXIBILITY BANIJAY TAPS FOR ENDEMOL BUY facility by €10m.
4HEûACQUISITIONûISûEXPECTEDûTOûCLOSEûBYûTHEû The loan, which matures in September
ENDûOFûTHEûlRSTûQUARTERû Entertainment production and distribution 2022, comprises a €145m revolving credit
Ra Pharma is a clinical-stage company BANIJAYûISûlNANCINGûITSûACQUISITIONû facility, a €160m guarantee facility and a
biopharmaceutical company leveraging a of Endemol Shine with a committed debt €70m term loan.
proprietary peptide chemistry platform. The lNANCINGûANDûAûCAPITALûINCREASE Majority shareholder Fosun International
COMPANYûISûACTIVEûINûTHEûlELDûOFû 4HEûlNANCINGûINCLUDESûAûFULLûRElNANCINGû ISûPROVIDINGûAûlXEDûLOANûOFûõMûUNTILûTHEû
complement biology developing therapies OFû"ANIJAYSûANDû%NDEMOLSûEXISTINGûDEBT end of 2022.
to patients with rare diseases. Deutsche Bank, Natixis and Societe Generale As part of the agreement, CFO Thomas
HAVEûUNDERWRITTENûTHEûlNANCING Dressendoerfer resigned from Tom Tailor’s
Banijay is acquiring Endemol from The management board on October 31. His
CZECH REPUBLIC Walt Disney Co and Apollo Global successor is Christian Werner with effect
Management. from November 1.
PPF LINES UP €1.15bn FOR CME Post-closing, the combined group will be Tom Tailor signed a term sheet for the
HELDûBYû,$(ûWITHûAûûSTAKEûANDû6IVENDIû lNANCINGûINûEARLYû/CTOBERûSECURINGûTHEû
Financial investment group PPF GROUP has with a 32.9%. LONG TERMûlNANCINGûOFûTHEûCOMPANY
LINEDûUPûAûõBNûLOANûlNANCINGûTOûBACKûITSû The combined group will own almost 200
acquisition of media and entertainment production companies in 23 territories and
company Central European Media the rights for close to 100,000 hours of LUXEMBOURG
Enterprises. content.
The senior secured term loan and Pro-forma revenue of the combined group NEXA NETS US$300m RCF
revolving credit facilities have been fully ISûEXPECTEDûTOûBEûAROUNDûõBNûFORûTHEûYEARû
underwritten by BNP Paribas, Credit Agricole, ending December 31 2019. Zinc producer NEXA RESOURCES has signed a
Credit Suisse, HSBC, Societe Generale and 53MûlVE YEARûREVOLVINGûCREDITûFACILITYû
UniCredit as mandated lead arrangers and with a syndicate of lenders.
bookrunnners. GERMANY 4HEûlNANCINGûWILLûBEûUSEDûFORûGENERALû
BNP Paribas and Societe Generale are corporate purposes, providing the company
GLOBALûCOORDINATORSûONûTHEûlNANCING SARTORIUS TAPS FOR DANAHER with increased liquidity and additional
Societe Generale and Komercni banka are mEXIBILITY
facility agent and security agent, Biopharmaceutical laboratory technology The RCF pays a margin of 100bp over
respectively. company SARTORIUSûISûBACKINGûITSû53Mû three-month Libor.
4HEû53BNûACQUISITIONûWILLûBEûFUNDEDû 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 Khaimah as bookrunners and mandated lead has also been recovering in secondary to
Eurobonds. arrangers. China Construction Bank is 98.84% of face value on October 31 from
mandated lead arranger. 98.87% on October 11.
Citi was documentation agent and “Turkish deals are still getting done, there
SAUDI ARABIA #OMMERZBANKûWASûFACILITYûAGENT MIGHTûBEûAûLITTLEûMOREûOFmOADINGûINû
The two-year facility has a one-year secondary but that is all,” said one banker.
PIF SIGNS US$10bn BRIDGE EXTENSIONûOPTIONûANDûLAUNCHEDûATû53Mû There has also been corporate activity in
BEFOREûCLOSINGûATû53MûFOLLOWINGûANû recent weeks with Turkish glass
Saudi Arabia’s PUBLIC INVESTMENT FUND, has oversubscription. manufacturer TRAKYA CAM SANAYII tapping the
SIGNEDûAû53BNûONE YEARûSYNDICATEDû Proceeds will be used for general market for €200m dual-tranche syndicated
bridge loan. corporate purposes. loan.
Proceeds will be used for general The Investec group is dual-listed on the
corporate purposes and will enable the ,ONDONûANDû*OHANNESBURGûSTOCKûEXCHANGES
sovereign wealth fund to accelerate the Investec Bank has been assigned long- UK
implementation of its investment term ratings of Baa3, BB and BB+ by
programme. Moody’s, S&P and Fitch, respectively. CONVATEC REFINANCES
The syndicated bridge loan, which
bankers said pays around 30bp over Libor, Medical products company CONVATEC has
will be repaid following completion of the TURKEY SIGNEDûAû53BNûlVE YEARûLOANûTOûRElNANCEû
agreed sale of PIF’s stake in Saudi Basic 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, FAVOURABLEûTERMSûCOMPRISESûAû53BNû
launched in October 2017, its four sources The price of syndicated loans for Turkish TERMûLOANûANDûAû53MûREVOLVINGûCREDITû
of funding are capital injections by the banks has been rising again in Europe’s facility.
government, asset transfers from the secondary loan market, as AKBANK, TURK 4HEûlNANCINGûREPLACESûAROUNDû53BNû
government, retained investment returns, EKONOMI BANKASI and YAPI KREDI all successfully of outstanding term loans and an undrawn
and PIF loans and debt instruments SECUREDûTHEIRûLATESTûRElNANCINGSûATûLOWERû 53Mû2#&
independently issued by PIF. pricing than their previous loans. The previous originally totalled around
The syndicated bridge loan has been Pricing fell in the secondary market in 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 BANKûLOANSûWHICHûAREûRElNANCEDûTWICEûAû Euribor with a commitment fee of 37.5bp-
syndicated loan. year in the international syndicated loan 50bp on undrawn funds, depending on
The loan was agreed with 15 banks - JP market, rose to 99.37% of face value after leverage.
Morgan, Citigroup, HSBC, BNP Paribas, falling to 99.28% on October 23 from an 4HEûPREVIOUSûlNANCINGûWASûPROVIDEDûBYûAû
Standard Chartered, Bank of China, average of 99.82% of face value on October 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 ,ASTûWEEKû9APIû+REDIûSIGNEDûAû53M
Generale and Bank of America. equivalent loan paying 225bp over Libor and DERWENT NETS £300m GREEN RCF
)TûWASûTHEûlRSTûCOMMERCIALûLOANûRAISEDûBYû 210bp over Euribor for the dollar and euro
the fund and paid a margin of 75bp over tranches, respectively. It is cheaper than the Real estate investment trust DERWENT LONDON
Libor. BANKSû53BN EQUIVALENTûLOANûTHATû HASûBECOMEûTHEûlRSTû5+û2%)4ûTOûAGREEûAû
signed in May, which paid 250bp over Libor green revolving credit facility that meets the
and 240bp over Euribor. Loan Market Association’s Green Loan
SOUTH AFRICA Yapi’s deal secured the same pricing Principles.
BENCHMARKEDûBYû!KBANKSû53Mû The £300m facility is part of a wider
INVESTEC BANK GETS US$300m LOAN RElNANCINGûTHATûCLOSEDûTHEûDAYûBEFOREû aMûlVE YEARû2#&ûBEINGûPROVIDEDûBYû
Turkey’s offensive into Syria. HSBC, Barclays and NatWest.
INVESTEC BANK has signed an increased TEB, which only taps the market once a 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 continued focus on sustainability across the led by JP Morgan.
on measurable improvements and positive real estate sector,” said David Stephens, Lenders also include Banca Transilvania,
environmental impacts. (3"#û5+SûHEADûOFûCORPORATEûREALûESTATE Bank of China, BRD Groupe Societe Generale,
4HEûFRAMEWORKûHASûBEENûEXTERNALLYû Deutsche Bank, Intesa Sanpaolo and Raiffeisen
reviewed to ensure compliance with the GLOBALWORTH AGREES Bank International.
Green Loan Principles. €200m RCF JP Morgan Europe is facility agent.
5NDERûTHEûlNANCINGû$ERWENTûISûREQUIREDû Globalworth acquires, develops and
TOûPUBLISHûANûINDEPENDENTLYûVERIlEDûREPORTû #ENTRALûANDû%ASTERNû%UROPEANûOFlCEû MANAGESûOFlCEûANDûLOGISTICSLIGHT INDUSTRIALû
ANNUALLYûCONlRMINGûTHATûTHEûGREENûLOANSû investor GLOBALWORTH REAL ESTATE INVESTMENTS real estate assets in Central and Eastern
and the framework continue to satisfy the has signed a €200m 4.5-year unsecured Europe.
requirements of the Green Loan Principles. revolving credit facility. The company is listed on the AIM
The company will also provide qualitative 4HEûlNANCINGûHASûBEENûSTRUCTUREDûTOû segment of the London Stock
and quantitative environmental align with Globalworth’s euro medium-term %XCHANGE

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 The company, which had already done an European banks or companies leading
facing a steep learning curve as they turn to international green bond, was confident it would the charge on sustainable finance that have
sustainable lending as a viable financing tool. apply the green standard to the loan. subsidiaries in the region can export their
As tackling climate change becomes a Other investment-grade borrowers in the knowledge to Latin America, leading to a
vital priority in the region, so does aligning region, whose revenues depend on tapping cascade of sustainable lending transactions.
environmental, social and governance strategies natural resources - particularly those within the Spanish utility IBERDROLA signed the first
with borrowing needs. Issuers are seeking advice paper, utilities, energy and mining sectors — green loan in Latin America: a US$400m
from banks on green and sustainable financings are under pressure to implement increasingly financing for Iberdrola Mexico in April 2018 that
as lenders also educate themselves on the sustainable practices, presenting both a was led by BBVA.
opportunities and challenges ahead. challenge and an opportunity for ESG financiers. US subsidiary of Iberdrola Avangrid signed
Green and ESG lending remains in its infancy Mining companies recognise the need to align a US$2.5bn sustainable credit facility in
in Latin America. Just US$18bn in green or their financing to more sustainable practices. June 2018. In March 2019, BBVA coordinated
sustainable loans has been issued across the The January 25 collapse of a tailings dam at Iberdrola’s €$1.5bn sustainable credit facility.
region since March 2018, according to LPC data. Brazilian miner VALE‘s Corrego do Feijao iron ore “When the parent company goes green, they
More exposure to these products could set mine in Brumadinho ramped up the pressure have subsidiaries that are doing the same,” said
off rapid growth in a region that is positioned to to provide safer conditions for employees and Jorge Gonzalez Jacob, global head of corporate
keep growing while ESG norms become more nearby communities. loans at BBVA.
prominent. ESG or key performance indicator-linked loans Still, some banks are tip-toeing around the
“There needs to be more education around may provide a means for mining companies to asset class, asking questions and observing
it. Sustainable finance is still very new to a lot implement more sustainable practices and to be how competitors are executing the loans before
of people,” said Tess Virmani, associate general held accountable on a financial level, by linking diving in.
counsel and senior vice president of the Loan the interest rate of the loan to the benchmarks One banker said more regulation and
Syndications and Trading Association. set by a third-party agency. standardisation on sustainable loans will be
“There could be a lot of opportunities. crucial before the practice is adopted on a
Lenders are in the best position to let their GREEN SHOOTS wide scale. It is a matter of time, as lenders are
clients know that this loan product is available.” As interest increases toward sustainable increasingly prioritising sustainable finance for
Solutions are as varied as the corporations financing in the region, the dialogue between their own bottom line.
and the banks that fund their operations. banks and issuers has heightened. “The financial industry is waking up at a
Some banks are strategically offering “We have had dozens of conversations with rapid pace to the risk and opportunities from
sustainable loans to close clients that already interested borrowers over the past few months, the changing climate and the transition to a
have an ESG strategy in place and have a specific and so far much of it is still about educating lower-carbon economy,” said Joseph Lake, COO
goal in mind, such as getting access to a new the market,” said Charlotte Peyraud, vice of The Climate Service, a climate change risk-
investor and client base. MUFG was mandated by president of sustainable banking at Credit assessment technology firm.
Chilean paper and pulp company CMPC to lead a Agricole CIB. “We’ve moved from this information being a
five-year US$100m green Shogun loan, raised in “We are seeing a lot of interest in Latin ‘nice to have’ to a ‘need to have’,” Lake said.
dollars and granted by Japanese banks. America in the early stages of this product.” Daniela Guzman

International Financing Review November 2 2019 69

 All other terms for the loan remained and from day 91 onwards the fee is equal to
unchanged. The loan is priced at 92bp over the full coupon.
NORTH AMERICA Libor with an 8bp facility fee. Jefferies, Golub Capital and Ares Capital are
Bank of America, Wells Fargo, Citigroup and arranging the funding.
US Bank are lead arrangers and bookrunners. Help/Systems provides IT operations
UNITED STATES 4HEûCOMPANYSû53BNûlVE YEARû management and monitoring, cybersecurity
revolving credit is unchanged with a and business intelligence software.
US STEEL UPS RCF TO US$2bn maturity date of October 25 2022. Fuel station and convenience store
Starbucks is rated BBB+ by S&P and Fitch operator ALLSUP’SûHASûLAUNCHEDûAû53Mû
US STEEL has increased its asset-based revolving and Baa1 by Moody’s. S&P and Moody’s term loan B that will support the acquisition
CREDITûFACILITYûTOû53BNûTOûBACKûTHEû downgraded the company by one notch in of the company by convenience store chain
acquisition of a 49.9% stake in Big River Steel. June 2018. Yesway.
4HEûlNANCINGûWASûINCREASEDûFROMû The seven-year TLB is being offered at 550bp-
53BNûWHILEûTHEûMATURITYûWASûEXTENDEDû BPûOVERû,IBORûWITHûAûûmOORûû/)$ûANDû
to October 25 2024 from February 2023. 101 soft call protection for 12 months.
4HEûAMENDEDûlNANCINGûCOMPRISESûAû The debt will be governed by a covenant
53BNû2#&ûANDûINTRODUCESûAû53Mû LEVERAGED LOANS ensuring that total net leverage ratio does
lRST INûLAST OUTûFACILITY NOTûEXCEEDûûTIMES
Pricing on the RCF remains at 125bp over !LLSUPSûISûALSOûRAISINGûAû53MûREVOLVINGû
Libor, rising by 25bp for reference UNITED STATES credit facility, according to Moody’s.
availability of less than 30%. Goldman Sachs and RBC Capital Markets are
The FILO facility pays a margin of 225bp MORE BANKS FOR SOPHOS coordinating the transaction.
over Libor, also rising by 25bp for reference #ORPORATEûANDûlRST LIENûRATINGSûAREû""
availability of less than 30%. 53ûSOFTWAREûANDûTECHNOLOGY FOCUSEDûPRIVATEû 9ESWAYûISûEXPECTEDûTOûMAINTAINûDEBTûTOû
JP Morgan is administrative agent on the 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 ACQUISITIONûOFû5+ûCYBERûSECURITYûCOMPANYû 4HEûACQUISITIONûISûVALUEDûATû53MûTHEû
arrangers and bookrunners. SOPHOS. ratings agency said.
BMO, Citigroup, Fifth Third Bank, Goldman Bank of America, Barclays, Credit Suisse and Yesway is a portfolio company of private
Sachs, PNC Bank, SunTrust, Citizens Bank, Credit HSBC have joined Goldman Sachs as lenders to EQUITYûlRMû"ROOKWOODû&INANCIALû0ARTNERS
Suisse, ING and Morgan Stanley are co- PROVIDEû53BNûOFûLOANSûTOûlNANCEûTHEû
documentation agents. buyout. FINANCING FOR ANIXTER
53û3TEELûAGREEDûTOûACQUIREûTHEûû The interim facilities comprise a
ownership interest in Big River Steel for around 53BNûSEVEN YEARûlRST 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

 LOANS LEVERAGED LOANS

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 Credit Suisse, Morgan Stanley, Citigroup, would be one of the strongest ones,” said a
for fibre optic cable company ZAYO may launch Deutsche Bank, SunTrust and TD Bank provided second portfolio manager.
into the leveraged finance market before the the approximately US$8.2bn in debt for the In June 2017, the company repriced a then
end of this year, a move that will test an investor acquisition. Credit Suisse will lead any potential US$1.1bn term loan to 225bp over Libor from
base that has grown hesitant over Single B institutional Term Loan B or secured bond sale 250bp. Since then, however, the average spread
credits exposed to a cooling US economy. and Morgan Stanley is expected to coordinate for Single B rated borrowers has gapped out as
Zayo, which will use the funds to support any unsecured bond deal for Zayo. investors have scrutinised private equity-backed
its take-private buyout by investment firms LBOs. In October, new Single B loans were
Digital Colony Partners and EQT, is expected to HAPPY MEDIUM offered at roughly 450bp over Libor compared
raise the lion’s share of the US$6bn from the Sceptical investors in the past three months have with 380bp a year earlier, according to LPC data.
institutional term loan market with B2 or B3 balked at Single B rated loans, pushing companies “For exceptional B3 names there is demand,
rated leveraged loans, bankers said. for pricing and documentation concessions in but they are requiring a premium,” said one senior
CLOs, the biggest buyers of leveraged loans, exchange for commitments to riskier loans. leveraged loan banker, citing Cole-Parmer and Hub
have limited baskets for Single B rated (B1/B+, In October, winery COOPER’S HAWK and font International as examples of sponsor-backed deals
B2/B and B3/B–) debt, but Zayo’s potential software firm MONOTYPE IMAGING became the that pushed through October’s difficult marketplace.
transaction is considered a “must-own” that can latest Single B rated borrowers to accommodate On October 28, lab equipment provider
serve as a shock-absorbing credit capable of investor demands, following amended COLE-PARMER priced a US$1.09bn credit facility
performing in a downturn, the sources said. transactions from auction house Sotheby’s and that supports its buyout by investors GTCR and
“Zayo is a strong, defensive play in a non- digital imaging firm SHUTTERFLY in September. Golden Gate Capital. The B3/B rated company’s
cyclical industry. That stability goes a long CLO managers are also reluctant to buy US$770m first-lien loan priced at 425bp over
way,” one portfolio manager said. “And internet Single B rated debt that they may be forced to Libor, while a US$75m revolving credit facility
bandwidth is only going to grow. Zayo’s shed if these loans are downgraded one notch to and privately placed US$245m second-lien loan
deal should have natural tailwinds with the Triple C status. CLOs hold more than 60% of the rounded out the financing.
investment community.” roughly US$1.2trn leveraged loan market and On October 18, insurance broker HUB, also
Zayo has grown its long-haul fibre routes are typically limited on the number of loans they rated B3/B, offered a US$1.27bn incremental
throughout the US and Europe in recent years. can hold with that rating. loan at 400bp over Libor that partially financed
Its service is considered an integral connection And while Zayo, rated B2/B+, has historically a shareholder distribution.
between data centres and high-growth borrowed money at cheaper levels and more “Not all B3s are equal. A deal like Hub, the
companies such as Netflix and Google that flexible terms than other Single B rated credits, market is tripping over itself to own,” a managing
require reliable internet connectivity. it may be compelled to offer more spread and director at an investment bank said. “If you’re going
Digital Colony and EQT in May agreed to pay possibly tighter documentation to win over to be long in the B3 market, then Zayo is one you’d
US$35 for each Zayo share and assume the investors with more bargaining power. back. It’s hard to know exactly where it will price,
company’s US$5.9bn of net debt, valuing the “[Zayo] will have to pay up more than usual. but there is enough depth in the market at a price.”
leveraged buyout at US$14.3bn. But when you look at the pantheon of B3s, this Aaron Weinman

Publishing company HOUGHTON MIFFLIN implemented a series of changes to the Morgan Stanley, Goldman Sachs, BMO Capital
HARCOURTûHASûLAUNCHEDûAû53MûlVE YEARû loan’s documentation. Markets, Credit Suisse, MUFG and RBC arranged
Term Loan B that will be used for The seven-year TLB priced at 375bp over the transaction. Morgan Stanley is also
RElNANCING Libor, the wide end of a 350bp-375bp range administrative agent.
The deal is guided at 600bp over Libor at launch. Proceeds will repay debt, fund a
WITHûAûûmOORûAûnû/)$ûANDûûSOFTûCALLû !ûû,IBORûmOORûHASûALSOûBEENûINTRODUCEDû shareholder distribution and pay fees and
for 12 months. to the transaction, while the OID remained EXPENSESûRELATEDûTOûTHEû4,"
(OUGHTONû-IFmINSû4,"ûWILLûAMORTISEûATû at 99 and soft call protection is still 101 for Granite operates roughly 4,800 MW of
5% per year and be repaid on a quarterly SIXûMONTHS NATURALûGAS lREDûPOWERûGENERATORSûACROSSû
basis. Documentation changes include a cap on THEû53
Joint lead arrangers are Citi LEADûLEFT û Ebitda add-backs, a 50bp most-favoured The company is backed by LS Power,
Morgan Stanley, BofA and Wells Fargo. Citizens is nation clause for the life of the loan and which invests, develops and operates power
co-manager. Administrative agent is Citi. restricted payments baskets have been generation assets.
%XPECTEDûCORPORATEûRATINGSûAREû#AA"n"û RECLASSIlED Winery and restaurant COOPER’S HAWK has
ANDûTHEûlRST LIENû4,"ûISûRATEDû#AA"""n Granite Energy will be limited in its ability COMPLETEDûAû53Mû4ERMû,OANû"
TOûOFmOADûASSETSûAWAYûFROMûLENDERSûANDûTHEREû The seven-year TLB priced at 650bp over
GRANITE ENERGY PRICES TLB are also imitations on the company’s ability ,IBORûWITHûAûûmOORûû/)$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 “People really liked the company and the Earlier in the summer, ION GROUP tapped
and risk management firm, has agreed a opportunity to get really good allocations in Goldman Sachs Private Credit and HPS to
US$1.6bn unitranche loan from a group of 10 a credit they like with a sponsor they know,” a provide a US$1.25bn unitranche loan for its
direct lenders, making it one of the largest ever direct lender said. takeover of financial media and data firm Acuris,
such loans arranged to date. Risk Strategies is a portfolio company of and Golub provided a US$950m unitranche
The accelerating pace of large-scale direct Kelso. The private equity sponsor acquired a loan to cloud-based supply chain management
lending deals this year, including a raft of billion- majority stake in the brokerage firm in 2015 company E2OPEN to buy Amber Road.
dollar plus unitranche loans, underscores the from Kohlberg & Company. On October 29, Risk Typically unitranche loans have been used
depth and maturity of the private credit market. Strategies said in a release that it acquired Dash to finance private equity-backed mergers and
It also reflects a drop in bank appetite for risk. & Love, a specialty brokerage based outside of acquisitions for small and mid-sized companies,
The uptick comes at a time when increased Philadelphia. Terms of the acquisition were not but more than 40% of last quarter’s unitranche
execution risk in the broadly syndicated loan disclosed. volume was arranged for large borrowers.
market -- where leveraged borrowers have As direct lenders explained, if before they
traditionally raised funding -- is prompting OPPORTUNITY KNOCKS were focused on US$30m Ebitda companies,
private equity sponsors to seek certainty in the Private credit is no longer solely the domain of now US$100m Ebitda companies are in play.
arms of direct lenders. small to mid-sized companies and direct lenders With a significant group of private credit
“Direct lenders have become incredibly are benefiting from the repricing of risk in the players able to hold positions of roughly
valuable,” said one private credit investor. broader loan market. US$100m in a single transaction, it is easier than
“Sponsors are not willing to bet on the uncertainty Sponsors are increasingly turning to direct ever to club up a billion-dollar plus loan among
in the broadly syndicated loan market right now.” lenders to fund large sized transactions with a group of buy and hold investors.
Year-to-date at least a dozen unitranche loans unitranche loans. The structure, which combines Nor is the broadly syndicated market currently
sized at US$500m or more have been arranged senior and subordinated risk into a single offering any meaningful pricing discount
by direct lenders, according to public and private tranche of debt, is favoured for its certainty and relative to the direct lending market. At least
data tracked by LPC, roughly double the seven ease of execution. 17 companies tapping the broadly syndicated
deals completed in all of 2018. Direct lenders said sponsors are regularly market in September and October saw pricing
In this latest example, the US$1.6bn showing them deals before going to bank flex up, all of them single-B rated borrowers,
unitranche loan, which includes a US$400m arrangers or at the same time, and they expect after investors demanded higher yields to invest.
delayed draw component, was provided by the dynamic to continue. In a dislocated market, the ability of direct
administrative agent Golub Capital, together A record US$10.7bn in unitranche loans was lenders to move quickly and offer competitive terms
with Goldman Sachs, Apollo Global Management, booked in the third quarter, surpassing the mitigates certain factors, including pricing and flex
KKR, Oak Hill Advisors, Ares, Carlyle, Owl Rock US$9.2bn tally for the second quarter. risk. The direct lending deals also do not require
Capital Partners, Antares Capital and Partners Last quarter, INTEGRITY MARKETING GROUP, ratings. A sponsor may pay up incrementally in the
Group. The company also lined up a US$50m which sells life and health insurance products to direct lending market, but sponsors are willing to
revolving credit facility. the senior market, raised a US$945m unitranche swallow that to lock in pricing.
The unitranche loan priced at 550bp over loan in a deal backing private equity firm Harvest In other words, sponsors know what terms
Libor. Proceeds are slated to refinance the Partners’ strategic growth investment in the they are going to get, and that is an attractive
company’s existing capital structure, including a company. Owl Rock, Crescent Capital and proposition.
first-lien term loan priced at 425bp over Libor. Antares provided the loan. Leela Parker

600bp over Libor and a 99 OID. 0ROCEEDSûWILLûRElNANCEûANûEXISTINGûBRIDGEû 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 days 0-60, before kicking in at 50% of the RElNANCEûTHEûCOMPANYSûCAPITALûSTRUCTUREû
Promontory provides deposit allocation margin from days 61-120 and 100% of the lNANCEûITSûTERMINATIONûOFûOBLIGATIONSûUNDERû
SERVICESûANDûOTHERûlNANCIALûSERVICESûTOû53û margin from day 121 onwards. ITSûTAXûRECEIVABLEûAGREEMENTûANDûPAYûFEESû
banks. Goldman Sachs was the sole lead arranger ANDûEXPENSESûRELATEDûTOûTHEûTRANSACTION
Healthcare provider INNOVACARE sweetened on the transaction. Bank of America, Citigroup, RBC, Barclays,
THEûTERMSûONûAû53Mû4ERMû,OANû" 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûTHEû 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 For those investors that were able to play, greater than 5.2 times on a look through basis,
44% stake in publicly-listed German publisher they needed to get comfortable with having an to 575bp, when leverage is greater than 5.7
AXEL SPRINGER has closed, overcoming a number opco/holdco structure in place, when there is times and to 600bp, when leveraged is more
of hurdles including investor reservations only a minority stake in the operating company. than 6.2 times.
regarding security over the asset and a large A financing like this depends on dividends being A ticking fee was also added, which pays 50%
number of CLOs that were prevented from streamed out an operating company to pay of the margin after 45 days and 100% of the
participating after the deal was unable to secure interest on a loan in a holding company. margin after 90 days.
a Moody’s rating. The financing was offered with a €125m revolving Most investors that went into the deal were
A €725m Term Loan B closed to pay 500bp, credit facility that can be used to cover around 3.25 attracted by the prospect of KKR taking the
from initial guidance of 475bp-500bp with a years of interest payments. It was initially launched company private in the future and the subsequent
99.5 OID, after the loan attracted significant at €175m and could still reach this level. relocation of the financing to the opco level. KKR
interest from credit funds and banks. “The large revolver is an insurance policy at also added some weight to the deal, as one of the
The loan was placed in a holdco structure, the holdco if there is a scenario where dividends larger, more well-known players in the market.
after the private equity firm only managed to don’t come in. It is an additional source of liquidity “The quality of the company, the potential
secure a minority stake in Axel Springer. Moody’s to give investors further piece of mind and helps push down of the loan to the opco in due course,
was unable to give a rating as it cannot rate a them sleep better at night,” a senior banker said. and the KKR name certainly helped gained
holdco that owns a minority sharing in an opco, The financing was also offered with a debt momentum,” a second senior banker said.
when there is a single dividend stream, sources incurrence covenant at the opco level, that the KKR, UniCredit, Barclays, BNP Paribas, Credit
said. opco won’t relever above 4 times. Agricole, Helaba, LBBW, JP Morgan and Societe
This was a blow during syndication as it Generale led the financing.
prevented a large number of CLOs, dependant INVESTOR-FRIENDLY KKR, acting in concert with main shareholders
on a Moody’s rating, going into the deal. To make the loan more attractive, an upward Friede Springer and Doepfner, tendered to buy
However, some of the newer CLOs could invest margin ratchet was added during the out minorities for €63 a share, putting an equity
as the deal was assigned a Single B rating from syndication process on the Term Loan B. The value on Springer €6.8bn.
Fitch and S&P. margin will step up to 550bp when leverage is 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/)$û
Goldman Sachs, Bank of Ireland, Rabobank and equivalent of loans that form part of a is guided at 99.75.
ABN AMRO have been mandated as physical 53BNûDUAL CURRENCYûRElNANCINGû 4HEûREPRICINGûCOMESûJUSTûlVEûMONTHSû
BOOKRUNNERSûONûTHEûlNANCINGûANDûInvestec as package. after Masmovil secured its €1.45bn seven-
bookrunner, alongside SMBC, which is !û53BNûTERMûLOANû"ûISûGUIDEDûATûBPû year covenant-lite term loan B in May. The
leading the deal as global coordinator. OVERû,IBORûWITHûAûûmOORûANDûANû û RElNANCINGûPAIDûBPûOVERû%URIBORûWITHûû
4HEûBANKSûAREûEXPECTEDûTOûLAUNCHû /)$ûWHILEûAû53BN EQUIVALENTûEURO mOORûANDûAûû/)$
syndication of a senior loan to investors in denominated TLB is guided at 225bp-250bp That deal included €280m of capital
mid-November. OVERû%URIBORûWITHûAûûmOORûANDûANûû/)$ EXPENDITUREûANDûREVOLVINGûCREDITûFACILITIESû
A second-lien loan that was underwritten 4HEûTRANSACTIONûALSOûINCLUDESû53BN with a margin ratchet based on
by SMBC has been pre-placed with funds. equivalent euro senior secured notes. environmental, social and governance ratings.
Bridgepoint agreed in October to buy The loans will mature in eight years and 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 lNANCINGûONûTHEûDOLLARSûANDûTHEûEUROSû around 6.5 times based on Moody’s adjusted
term loan was issued at 425bp over Libor with a respectively, alongside ING and BNP Paribas gross debt and Ebitda.
ûmOORûANDûAûDISCOUNTûOFû as bookrunners and arrangers. Barclays, Fifth 4HATSûHIGHERûTHANûTHEûCOMPANYSûlGURESû
Third Bank, Goldman Sachs, KBC and Citizens According to marketing materials, net
TAGHLEEF LAUNCHES €340m REFI 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
0ACKAGINGûlLMSûCOMPANYûTAGHLEEF INDUSTRIES acquisition of a 40% stake in Belron in 2018. last twelve months pro forma adjusted
has launched a €340m Term Loan B to Belgian peer D’Ieteren and Belron’s Ebitda of €214m.
AMENDûANDûEXTENDûANûEXISTINGûEURO management hold the remaining 60%. Apart from the Term Loan B, there is also
denominated term loan. Corporate family and facility ratings are a €248m, eight-year second-lien loan. A
The loan, which will mature November Ba3/BB. €180m revolving credit facility rounds off
2026, is guided at 275bp over Euribor with a THEûlNANCING
ûmOORûANDûANû/)$ûOFû PAR INSPIRED EDUCATION CLOSES Goldman Sachs is left lead, with BNP Paribas,
The deal includes 101 soft call protection Fortis, Bank of America, Credit Suisse, MUFG,
FORûSIXûMONTHS Private school chain INSPIRED EDUCATION has NatWest Markets and SMBC as bookrunners.
Corporate and issuer ratings are Ba3/BB-. completed a €150m add-on loan. The unit, which provides cement, asphalt
Credit Suisse is physical bookrunner. 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 GUIDANCEûWITHûAûûmOORûANDûATûPARû4HEû/)$û 2018 pro forma revenues of €3.7bn and 2018
add-on at 300bp over Euribor with a 0% was guided at 99.75. pro forma Ebitda of €173m.
mOORû4HATûDEALûWASûISSUEDûATûPARû The €465m term loan B was also repriced
4HEûADD ONûWASûTOûlNANCEûTHEûlRMSû at 325bp over Euribor, down from pricing of EUROPEAN LEVERAGED LOANS
ACQUISITIONûOFû"IOlLMûWHICHûMANUFACTURESû 350bp, after a positive market response. BOOKRUNNERS: 1/1/2019 TO DATE
BIAXIALLYûORIENTEDûPOLYPROPYLENEûlLMSûANDû The add-on is fungible with the term loan Managing No of Total Share
is based in Bogota, Colombia. B, which is due in May 2026. bank or group issues US$(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 their private equity sponsors on ESG matters. and their performance is comparable to peers,
the deal as MLAs and underwriters. Hermes is aiming to raise sustainability according to Moody’s.
Mandated lead arrangers are MUFG, Intesa awareness by having in-depth talks with CLO CLO managers argue it is difficult to measure
Sanpaolo, Korea Development Bank, Sumitomo managers in pitch meetings. ESG risk in leveraged loans due to the absence of
Mitsui Trust Bank, Siemens Bank, Woori Bank, “We are engaging with CLO managers on ESG ESG-related information on the issuers.
Taipei Fubon Commercial Bank, Bank Sinopac, KGI and how they factor it in to each loan investment “We barely get enough transparency from
Bank and E.Sun Commercial Bank. decision, rather than simply asking them about the company and private equity sponsors. When
The loan paid all-in pricing in the low to their ESG policy. If a loan is scoring poorly on you call the CFO and ask ‘Oh by the way, what is
mid-300s and has an average life of 4.9 certain ESG metrics, we want to understand what your recycling policy?’ The guy will hang up the
years. the manager is doing to address this and what phone,” said a CLO manager.
Epsilon Bidco, the acquiring entity, is the conversations they are having with the sponsor,” For well-resourced CLO managers, they might
BORROWERûOFûTHEû,"/ûLOANûWHICHûlNANCESû said Andrew Lennox, ABS portfolio manager at subscribe ESG data from several providers such
Blackstone’s purchase of a 75% stake in Essel Hermes Investment Management. as MSCI and Sustainalytics instead of doing by
Propack. “There is an increasing amount of data that themselves, but still the data is limited in the
India-listed shares of the target form the supports the positive impact of engagement on leveraged loan market.
collateral for the loan, which represents a investment performance, but we believe the CLO MSCI, which provides ESG ratings for 8,100
leverage of 3.9 times. space is lagging.” equity issuers and 5,000 fixed income issuers,
Essel Propack manufactures collapsible The ultimate goal is to see a wave of CLO admitted the challenges of leveraged loan
laminated and plastic tubes. managers that will ramp up efforts to hold coverage.
issuers or sponsors to account on their ESG “Some leveraged loan issuers are very small,
EVOLUTION WELLNESS NETS responsibilities, Lennox said. private companies. Nobody has that data,”
US$200m The majority of private equity firms are not said Elisabeth Seep, head of fixed income ESG
paying attention to ESG matters in their portfolio Products at MSCI.
EVOLUTION WELLNESSûHASûCLOSEDûAû53Mû companies because immediate cost cuttings Without full ESG coverage on the leveraged loans,
FOUR YEARûMULTI TRANCHEûlNANCINGû and earning enhancements are the priority the CLO managers will struggle to show investors
with two other lenders joining in following a buyout, rather than long-term ESG how well they integrate ESG in their investments.
syndication. improvement planning. “If we don’t rate all of the underlying
Lead left Standard Chartered Bank and collateral, then we won’t have access to sufficient
Kiatnakin Bank were the mandated lead LACK OF DATA information to form an overall view on the
arrangers and bookrunners of the deal, To address growing demands from CLO investors 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

 LOANS LEVERAGED LOANS

slashed as coal companies have struggled shares it does not already own in the
due to growing use of renewables and cheap company.
RESTRUCTURING natural gas. #ARPETRIGHTûSAIDûITûNEEDSûAPPROXIMATELYû
%IGHTûOTHERûCOALûCOMPANIESûHAVEûlLEDûFORû £80m to repay its debt facilities, meet its
bankruptcy over the last two years as ongoing working capital requirements and
UNITED STATES natural gas has taken over as the primary 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 with roughly 25% this year. As recently as outstanding debt under the debt facilities
ally of President Donald Trump, became the 2003, coal accounted for half of the into equity and provide the company with
LATESTûINûAûSTRINGûOFûCOALûCOMPANIESûTOûlLEûFORû country’s electricity generation, according additional capital,” Carpetright said.
bankruptcy on Tuesday as generators shift TOûTHEû53û%NERGYû)NFORMATIONû In September Meditor acquired
to cleaner burning natural gas and Administration. Carpetright’s £40.7m revolving credit
renewable energy. Robert Moore will take over as president FACILITYûFROMû.AT7ESTûANDû!)"ûTHATûEXPIRESû
As part of a restructuring, founder Robert and CEO of the company while Murray will on December 31 2019.
Murray, a Trump ally and climate change head up the board of directors. The company’s overdraft facilities
DENIERûWILLûSTEPûDOWNûASûCHIEFûEXECUTIVEû PROVIDEDûBYû.AT7ESTûANDû5LSTERû"ANKûBUTû
and a lender group will take on more than FUNDEDûBYû-EDITORûAREûALSOûDUEûTOûEXPIREûONû
ûOFûABOUTû53BNûINûCLAIMS EUROPE/MIDDLE EAST/ December 31 2019.
The company intends to continue AFRICA A £25.7m unsecured loan provided to the
operating during the Chapter 11 company by Meditor on May 11 2018 is due
reorganisation with cash on hand and access CARPETRIGHT PLANS DEBT PAYDOWN for repayment on July 31 2020.
TOûAû53Mû$)0ûlNANCINGûFROMûLENDERS Carpetright said its statutory net debt as
The bankruptcy comes even after the 5+ûmOORINGûRETAILERûCARPETRIGHT is in at October 26 2019 was around £27m and is
Trump administration weakened or discussions to sell itself to its largest EXPECTEDûTOûRISEûTOûBETWEENûaMûTOûaMû
ELIMINATEDûDOZENSûOFûENVIRONMENTALû shareholder Meditor European Master Fund in December 2019.
regulations that Murray and other in order to pay down debt and secure its Carpetright is one in a long list of
EXECUTIVESûHADûCALLEDûBURDENSOMEûFORûTHEû future. household name retailers which have run
coal industry. Meditor, which currently owns around INTOûTRADINGûDIFlCULTIESûINûTHEûLASTûYEARûASûAû
Early in the Trump presidency, Murray 29.99% of Carpetright’s share capital, is in result of a fall in consumer demand powered
presented the administration with a wish talks with the group to convert its debt into by a move to online shopping, high rents
list of environmental regulations he wanted equity as it looks to purchase the remaining ANDûOVERûEXPANSIONûINûTHEûLASTûDECADE

Interpipe completes drawn out restructuring

„ UKRAINE Process began in 2013

Ukrainian steel company INTERPIPE has finally a US$45.8m new senior term loan facility due have contributed US$50m of extra cash equity
completed a debt restructuring of its bonds and December 31 2020. to the group and provided a further US$20m
loans, which began in late 2013. Creditors will also get a portion of a one-off stand-by equity commitment to help its post
All the creditors had a portion of their debt US$103m cash payment – a restructuring fee – restructuring operational performance.
written off as part of the restructuring deal, which is based on accrued and unpaid interest Interpipe has been impacted by the fall in
which includes a reduction, amendment and on the pre-restructured debt, according to one oil prices as well as political tensions between
restatement of the debt as a series of new notes source close to the situation. Russia and the Ukraine.
and loan facilities. Separately, and as a condition to the Between 2012 to 2016, the group’s Ebitda
Interpipe’s existing US$200m 10.25% secured restructuring, the group’s existing working declined by 85%, leading to pressure on the
notes that were due in 2017 have been cancelled capital debt facilities have also been written group’s debt repayment ability. In 2013 it
in exchange for a US$82m portion of new down and the balance refinanced into two breached certain financial covenants and missed
US$309.1m 10.25% guaranteed notes due in restructured working capital facilities totalling scheduled principal repayments of US$106m.
2024 and 3,054 units of performance securities. US$45m, also due December 31 2020. Between 2014 and 2017 it failed to make
The total size of Interpipe’s post restructuring The performance securities will give lenders US$545m of the scheduled principal repayments.
syndicated and bilateral facilities is not clear, but and bondholders a proportion of the company’s However, Ebitda has since recovered, with a
they include a US$334m tranche of a term loan Ebitda, “effectively giving them an upside of the 158% increase in 2017 from 2016.
that matured in November last year, according business going forward, like an insurance policy,” Interpipe is the largest vertically integrated
to LPC data. the source said. manufacturer of steel billets, steel pipes and
Part of the existing syndicated credit It would also give them a portion of the proceeds railway wheels in Ukraine. All of its manufacturing
facilities were written down and refinanced with of any disposals which are made, although none operations are located in Ukraine, where it
lenders. In return they were issued the balance are planned at present, the source said. operates four production sites and one scrap-
(US$227.1m) of the new notes. Another part The portion of this Ebitda or disposal upside processing company. It supplies its products to
of the existing syndicated credit facilities were will decrease once the debt is refinanced. customers in more than 70 countries globally.
also written down, amended and restated as In addition, Interpipe’s existing shareholders Sandrine Bradley

International Financing Review November 2 2019 77

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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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BENCHMARKû&43%û3TRAITSû4IMESû)NDEXûWHICHû STILLûTURNûOFFûINVESTORSv Anuradha Subramanyan

Winnebago opts for US$270m CB deal

RV maker had considered high-yield
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AûDERIVATIVEûTOûBOOSTûITSûEFFECTIVEûPREMIUMûTOû INûMARKETINGûTHEû#"S 'RANITEûWASûFORCEDûTOûAMENDûAGREEMENTSû
DOUBLEûTHEûCURRENTûSHAREûPRICE (IGH YIELDûSAIDûBANKERSûONûTHEû#"SûWOULDû ONûITSûBANKûLOANûTOûALLOWûFORûTHEû#"ûISSUEûANDû
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ATû53ûCOMPAREDûWITHûTHEû53û 4HEûûCOUPONû7INNEBAGOûACHIEVEDûONû Stephen Lacey

International Financing Review November 2 2019 79

 !ûSPOKESPERSONûFROMû!LIBABAûDECLINEDûTOû 4HEûISSUERûSAYSûINûTHEû)0/ûlLINGûTHATûITû
COMMENT PLANSûTOûEXPANDûANDûOPTIMISEûTHEûBULLETû
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(ONGû+ONGûSECONDARYûLISTINGûINCLUDINGûANû BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE
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
-INISOSûGLOBALûSALESûVOLUMEûREACHEDû
3HANGHAIûANDû(ONGû+ONG LISTEDûCHINA WUXI UPSIZES FOLLOW-ONS 53BNûINûûUPûûFROMû53BNû
MERCHANTS SECURITIESûHASûWONûAPPROVALûFROMû THEûPREVIOUSûYEAR
THEû#HINAû3ECURITIESû2EGULATORYû WUXI BIOLOGICS (CAYMAN) and its largest ,ASTû/CTOBERû#HINESEûINTERNETûGIANTû
#OMMISSIONûFORûTHEû( SHAREûPORTIONûOFûAû SHAREHOLDERû7UXIû"IOLOGICSû(OLDINGSûHAVEû 4ENCENTû(OLDINGSûANDûPRIVATEûEQUITYûlRMû
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4HEûCOMPANYûISûPLANNINGûTOûSELLûUPûTOûBNû UPSIZEDûFOLLOW ONS OFû2MBBNû53M ûINûTHEûCOMPANY
RIGHTSûSHARESûCOMPRISINGûBNû! SHARESû 4HEYûORIGINALLYûPLANNEDûTOûSELLûMûSHARESû 4HATûWASû-INISOSûlRSTûEXTERNALûlNANCINGû
ANDûMû( SHARESûONûAû FOR ûBASISû4HEû EACHûINûANûINDICATIVEûPRICEûRANGEûOFû SINCEûITûWASûFOUNDEDûINû
( SHAREûISSUEûSTILLûNEEDSûAPPROVALûFROMûTHEû (+nûEACHûORûAûDISCOUNTûOFû #HINESEûENTREPRENEURû9Eû'UOFUûANDû
(ONGû+ONGûSTOCKûEXCHANGE nûTOûTHEûCOMPANYSûCLOSEûOFû *APANESEûDESIGNERû-IYAKEû*UNYAûFOUNDEDû
4HEûCOMPANYûWILLûUSEûTHEûPROCEEDSûTOû (+ûLASTû4HURSDAY -INISOûINûû)TSûBUSINESSûMODELûHASû
FUNDûCAPITALûINCREASESûATûITSûSUBSIDIARIESûANDû 3UPPORTEDûBYûSTRONGûDEMANDû7UXIû ALLOWEDûTHEûCOMPANYûTOûEXPANDûRAPIDLYûINû
PURSUEûITSûDIVERSIlCATIONûSTRATEGYûFORûITSû "IOLOGICSû#AYMAN ûSOLDûMûPRIMARYû RECENTûYEARSûTHROUGHûSELLINGûLOW COSTû
INTERMEDIARYûANDûINVESTMENTûBUSINESSESû SHARESûORûûOFûTHEûENLARGEDûSHAREûCAPITALû LIFESTYLEûANDûCONSUMERûGOODSûINCLUDINGû
ANDûTOûREPLENISHûWORKINGûCAPITAL ATû(+ûEACHû7UXIû"IOLOGICSû(OLDINGSûSOLDû COSMETICSûFASHIONûKITCHENWAREûANDû
4OûCOMPLYûWITHû#HINESEûREGULATIONSûTHEû MûSECONDARYûSHARESûATûTHEûSAMEûPRICEû STATIONERYûPRODUCTS
! SHAREûRIGHTSûISSUEûISûNON UNDERWRITTENû WHICHûREPRESENTEDûAûDISCOUNTûOFûûTOûTHEû
4HEû(ONGû+ONGûPORTIONûISûFULLYû PRE DEALûCLOSE SDIC GDR WINS APPROVAL
UNDERWRITTEN 4HEREûISûAûTHREE MONTHûLOCK UPûONûTHEû
#ONTROLLINGûSHAREHOLDERû#HINAû-ERCHANTSû VENDORûANDûTHEûCOMPANY 3HANGHAI LISTEDûSDIC POWER HOLDINGSûHASûWONû
&INANCEû)NVESTMENTûANDûITSûCONNECTEDû 0ROCEEDSûWILLûBEûUSEDûTOûSUPPORTûANûENTRYû APPROVALûFROMûTHEû#HINAû3ECURITIESû
PARTIESûHAVEûCOMMITTEDûTOûFULLYûTAKEûUPû INTOûTWOûNEWûBUSINESSûAREASûnûVACCINESûANDû 2EGULATORYû#OMMISSIONûFORûAûPLANNEDûSALEû
THEIRûENTITLEMENTûOFûûOFûTHEûRIGHTû MICROBIAL BASEDûPRODUCTSûnûANDûAû OFûGLOBALûDEPOSITARYûRECEIPTSûINû,ONDON
ISSUEûORûMûSHARES CORRESPONDINGûEXPANSIONûOFûGLOBALûFACILITIES 0RE MARKETINGûWILLûSTARTûINûTHEûSECONDûHALFû
4HEû3TATE OWNEDû!SSETSû3UPERVISIONûANDû Morgan Stanley WASûTHEûBOOKRUNNER OFû.OVEMBERûATûTHEûEARLIESTûAFTERûTHEû
!DMINISTRATIONû#OMMISSIONûOFûTHEû3TATEû COMPANYûANNOUNCESûITSûTHIRD QUARTERû
#OUNCILûHASûAPPROVEDûTHEûPLANûWHICHûISûSTILLû MINISO HIRES DUO FOR IPO RESULTSûACCORDINGûTOûPEOPLEûCLOSEûTOûTHEûDEAL
AWAITINGûAPPROVALûFROMûTHEû#32#ûFORûTHEû 4HEû#HINESEûPOWERûGENERATIONûCOMPANYû
! SHAREûPORTION MINISOûAûBUDGETûSTOREûCHAINûHASûHIREDûBank PLANSûTOûSELLûUPûTOûûOFûITSûOUTSTANDINGû
Citic SecuritiesûISûTHEûSPONSOR of America and Goldman Sachs TOûARRANGEûANû SHAREûCAPITALûORûNOTûMOREûTHANûMû
)0/ûOFû53MnBNûNEXTûYEARûSAIDûPEOPLEû ! SHARESûINûTHEûFORMûOFû'$2S
BOOKS COVERED FOR FEIHE WITHûKNOWLEDGEûOFûTHEûMATTER 4HEûDEALûISûEXPECTEDûTOûRAISEûABOUTû
4HEûCOMPANYûHASûNOTûDECIDEDûWHEREûTOû 53MnMûGoldman SachsûHSBC and
"OOKSûAREûCOVEREDûFORûCHINA FEIHE@Sû(ONGû LISTûANDû(ONGû+ONGûANDûTHEû53ûAREûAMONGû UBSûAREûTHEûGLOBALûCOORDINATORS
+ONGû)0/ûOFûUPûTOû(+BNû53BN  THEûOPTIONS !SûOFû/CTOBERûû3$)#û0OWERûHADûAû
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MûPRIMARYûSHARESûORûAûûFREE mOATûINûANû LIKELYûTOûCHOOSEûTHEû53ûASûTHEûLISTINGûVENUEû 53BN û3ELLINGûAûûSTAKEûINûTHEORYû
INDICATIVEûRANGEûOFû(+nûPERûSHARE GIVENûITSûINTERNATIONALûFOOTPRINT WOULDûPUTûTHEûDEALûSIZEûATûABOUTû53M
4HEûRANGEûREPRESENTSûANûIMPLIEDûMARKETû 4HEû*APANESE STYLEûLIFESTYLEûRETAILERûHASû (OWEVERûGIVENûTHEûVALUATIONûDIFFERENCEû
CAPITALISATIONûOFû53BNnBNûANDûAû OVERûûSTORESûINûMOREûTHANûûCOUNTRIESû INûTHEû! SHAREûANDû,ONDONûMARKETSûTHEû
û0%ûOFûn INû!SIAû%UROPEû!USTRALIAû!FRICAûANDû '$2SûWILLûBEûPRICEDûATûAûDISCOUNTûTOûTHEû
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4HEûDEALûWILLûPRICEûONû.OVEMBERûûANDûTHEû MEDIUM TERMûSTRATEGICûGOALûISûTOûENTERûû )Nû*UNEû(UATAIû3ECURITIESûTHEûlRSTû
SHARESûWILLûBEGINûTRADINGûONû.OVEMBERû COUNTRIESûANDûREGIONSûBYûûWITHûANNUALû #HINESEûCOMPANYûTOûSELLû'$2SûINû,ONDONû

International Financing Review November 2 2019 81

THROUGHûTHEû3HANGHAI ,ONDONû3TOCKû BOOKBUILDINGûLASTû4UESDAYûFORûTHEIRû(ONGû 2+%ûISûALSOûLIKELYûTOûINCLUDEûTWOûNEWLYû
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ûDISCOUNTûTOûITSû! SHARESû4HEû#HINESEû 3INICûISûSELLINGûABOUTûMûPRIMARYûSHARESû PROPOSEDûLISTINGûSAIDûTHEûPEOPLE
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OFFER (+nûPERûSHAREûTOûRAISEûUPûTOû COMPANYûTHROUGHû2+%ûWOULDûACQUIREûAûû
(+BNû53M  STAKEûEACHûINûTHEû3OLO .GAWIûTOLLûROADûANDû
BITMAIN FILES FOR US IPO 4HEûRANGEûREPRESENTSûAûû0%ûOFûn .GAWI +ERTOSONOûTOLLûROADûFROMû)NDONESIASû
ûANDûAûDISCOUNTûTOûADJUSTEDû.!6ûOFû 7ASKITAû4OLLû2OAD
BITMAIN TECHNOLOGIESûHASûlLEDûCONlDENTIALLYû n
FORûAû53û)0/ûTHATûISûEXPECTEDûTOûHITûTHEû 4HEREûISûAûûGREENSHOE CANAAN FILES FOR US$400m
MARKETûEARLYûNEXTûYEARûSAIDûPEOPLEûWITHû 4HEûDEALûWILLûPRICEûONû.OVEMBERûûANDû NASDAQ IPO
KNOWLEDGEûOFûTHEûMATTER THEûSHARESûAREûDUEûTOûBEGINûTRADINGûONû
%ARLIERûTHISûYEARûAûSOURCEûFAMILIARûWITHûTHEû .OVEMBERû #HINESEûBITCOINûMININGûEQUIPMENTûMAKERû
SITUATIONûSAIDûTHEû)0/ûCOULDûRAISEû53Mn ABC International and Huatai Financial are CANAANûHASûlLEDûTOûTHEû53û3ECURITIESûANDû
Mû0EOPLEûCLOSEûTOûTHEûDEALûSAIDûITûISû THEûSPONSORS %XCHANGEû#OMMISSIONûFORûAû.ASDAQû)0/ûOFû
HARDûTOûSAYûHOWûMUCHûTHEûCOMPANYûCOULDû 4HEûCOMPANYûPOSTEDûAûûNETûPROlTûOFû 53M
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PEOPLEûCLOSEûTOûTHEûDEAL ABC International and Guotai Junan ûWHICHûFELLûBELOWû53ûINû.OVEMBER
4HEûCOMPANYûWHICHûOPERATESûUNDERûTHEû InternationalûAREûTHEûJOINTûSPONSORS 0EOPLEûCLOSEûTOûTHEû#ANAANû(ONGû+ONGû)0/û
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THISûYEARûATûAûVALUATIONûOFûABOUTû53BN WITHûKNOWLEDGEûOFûTHEûMATTER Credit Suisse, Citigroup, China Renaissance and
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and CHINA TIANBAO GROUP DEVELOPMENT started ûUPûûFROMûTHEûSAMEûPERIODûOFû BLOODûLIVERûANDûGALLBLADDERûDISEASES

82 International Financing Review November 2 2019

 EQUITIES ASIA-PACIFIC

4HEûCOMPANYûISûTHEûlRSTûTECHûBOARDû NEW SPACE TECH FILES FOR 4HEû'UANGZHOU BASEDûCOMPANYûWHICHû

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REQUIREMENTS SHOWSûANDûSCENERYûHASûlLEDûFORûAû SPEEDSûOFûUPûTOûûKILOMETRESûPERûHOURû
!NûISSUERSûMAINûBUSINESSûORûPRODUCTSû 2MBBNû53M û3HANGHAIû)0/ ACCORDINGûTOû%(ANGSûWEBSITE
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International Financing Review November 2 2019 83

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84 International Financing Review November 2 2019

 EQUITIES ASIA-PACIFIC

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International Financing Review November 2 2019 85

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ûONûREVENUESûOFû"TBN Citigroup, Goldman Sachs and JP Morgan WEREû
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!LTHOUGHûTHEûMARKETûSAWû#ERBERUSûASûAû 0RE MARKETINGûSTARTEDûONû/CTOBERûû BLOODûGLUCOSEûMETERSûISûMOREûTHANû53BNû
NATURALûSELLERûTHEûTIMINGûOFûTHEûSELL DOWNûCAMEû FOLLOWINGûTHEûlLINGûOFûTHEûREGISTRATIONû INû
ASûAûSURPRISEûDUEûTOûTHEûCONCURRENTûBUYBACKûAû DOCUMENTûTHEûPREVIOUSûWEEKûANDûBASEDûONû
BANKERûINVOLVEDûSAIDû4HEûOFFERûPERIODûFORûTHEû AûTYPICALûFOUR WEEKûSTRUCTUREûBOOKBUILDINGû DEUTSCHE INDUSTRIE REIT APPROVES
BUYBACKûRUNSûUNTILû.OVEMBERû WASûEXPECTEDûTOûBEGINûAROUNDûTHEûMIDDLEûOFû RIGHTS ISSUE
!NOTHERûBANKERûSAIDûTHATûTHEûSHAREûSALEû LASTûWEEKû
WASûVIEWEDûASûTHEûLASTûSIGNIlCANTûLIQUIDITYû JP Morgan and HSBC WEREûBOOKRUNNERSûONû DEUTSCHE INDUSTRIE REIT@SûMANAGEMENTûBOARDû
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EMEA EQUITIES CO LEADûMANAGER UPûTOûõMûRIGHTSûISSUE
BOOKRUNNERS: 1/1/2019 TO DATE )TûISûTHEûNINTHû53M PLUSû%-%!û)0/ûTOû 3UBSCRIPTIONûISûDUEûTOûSTARTûONû/CTOBERûû
Managing No of Total Share CANCELûINû/CTOBERûWITHûPOSTPONEMENTSû ANDûCONCLUDEûONû.OVEMBERûûWITHûPRICINGû
bank or grou p issues US$(m) (%) COMINGûATûTHEûENDûOFûPRE MARKETINGûANDû ONû.OVEMBERûû!ûTOTALûOFûMûSHARESûAREû
1 JP Morgan 64 9,452.10 10.7 AFTERûBOOKSûHADûOPENED BEINGûOFFEREDûONûAû FOR ûBASISû
2 Morgan Stanley 42 9,017.31 10.2 !FREXIMBANKûISûTHEûSECONDû,ONDONû'$2û 4HEûNEWûSHARESûWILLûBEûSOLDûATûATûLEASTûõû
3 Goldman Sachs 45 7,874.16 8.9 LISTINGûTOûSTOPûAFTERûPRE MARKETINGûFOLLOWINGû EACHûWITHûTHEûlNALûLEVELûTOûBEûDETERMINEDû
4 Citigroup 50 5,526.86 6.3 +AZAKHûPAYMENTSûGROUPû+ASPIûEARLIERûTHISû BASEDûONûTHEûCOMPANYSû67!0ûBETWEENû
5 BofA 22 4,087.42 4.6 MONTHû NOWûANDûPRICINGûWITHûAûDISCOUNTûOFûUPûTOû
6 Credit Suisse 29 3,930.07 4.5 3OMEûBANKERSûHAVEûSUGGESTEDûTHATûTHEû û$EUTSCHEû)NDUSTRIEû2%)4ûSHARESûCLOSEDû
7 UBS 25 3,813.56 4.3 LACKûOFûINDEXûELIGIBILITYûANDûCONCERNSûOVERû 4UESDAYûATûõûPERûSHAREûANDûFELLûAROUNDû
8 Barclays 25 3,322.63 3.8 LIQUIDITYûCANûHINDERû'$2ûLISTINGSûCOMPAREDû ûONû7EDNESDAYûTOûCLOSEûATûõû"YûLASTû
9 Jefferies 32 2,866.19 3.2 WITHûEMERGINGûMARKETûISSUERSûTHATûOPTûFORû &RIDAYûATûAMûINû,ONDONûTHEYûWEREûAROUNDû
10 BNP Paribas 18 2,060.51 2.3 MAINûMARKETûLISTINGSû õûEACHû
Total 693 88,215.53 %-ûISSUERSû.ETWORKû)NTERNATIONALû 4HEûRIGHTSûISSUEûISûOPENûTOûSHAREHOLDERSû
Including all domestic and international deals and rights issues &INABLRû!IRTELû!FRICAûANDû(ELIOSû4OWERSû ANDûHOLDERSûOFûTHEûCOMPANYSûû
Source: Refinitiv SDC code: C4cr OPTEDûFORûMAINûMARKETûLISTINGSûBUTûTHEREû CONVERTIBLEûBONDSû

86 International Financing Review November 2 2019

 EQUITIES EMEA

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International Financing Review November 2 2019 87

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ACQUISITION 4HEû)0/ûCALENDARûINûTHEûCOMINGûWEEKûISû 0%ûlRMû)NVUSû'ROUPûWHICHûISûALSOûTOPû
DOMINATEDûBYûTHEûUPûTOû53BNû.93%438û SHAREHOLDERûINû77û)NTERNATIONALûFORMERLYû
0UBLISHINGûCOMPANYûFUTUREûRAISEDûaMû )0/ûOFûSOLIDûWASTEûCOLLECTORû'&,û 7EIGHTû7ATCHERSûLEDûTHEûCROSSOVERûROUNDû
THROUGHûANûACCELERATEDûBOOKBUILDûLASTû %NVIRONMENTALûAûDEALûUNDERWRITERSûHOPEû WITHûAû53MûINVESTMENTûTHATûGAVEûITûANû
7EDNESDAYûEVENINGûAFTERûANNOUNCINGûTHEû WILLûOFFERûBATTEREDûINVESTORSûAûDEFENSIVEû ûPRE )0/ûSTAKEûFALLINGûTOûûPOSTû
ACQUISITIONûOFû4)û-EDIAûFORûaMû ANTIDOTEûTOûTHISûYEARSûHIGH PROlLEû)0/û OFFER
!ûTOTALûOFûMûSHARESûAROUNDûûOFû MISlRES .EWû%NTERPRISEû!SSOCIATESûANDû6ERSANTû
&UTURESûPRE MONEYûSHAREûCAPITALûWEREûSOLDû '&,ûISûSCHEDULEDûTOûPRICEûPOST CLOSEû 6ENTURESûTHEûCOMPANYSûTOPûSHAREHOLDERSû
ATûaûEACHûAûûDISCOUNTûTOû 7EDNESDAYû.OVEMBERûûBYûFARûTHEûBIGGESTû SAWûTHEIRûSTAKESûDILUTEDûTOû
7EDNESDAYSûCLOSEûOFûaû OFûEIGHTûDEALSûSLATEDûTOûPRICEûINûTHEûCOMINGû /YSTERû0OINTûWILLûUSEûTHEûPROCEEDSûTOûFUNDû
Numis and N+1 Singer WEREûBOOKRUNNERSû WEEK THEû0HASEû)))ûTRIALûOFûITSûTREATMENTûFORûDRYûEYEû
ONûTHEûPLACING 4HEûBALANCEûINCLUDESûFOURûBIOTECHSûTWOû DISEASE
#HINA TO 53ûDEALSûANDûAûSMALLûBANKû 4HEûDRUGûISûAûNASALûSPRAYûTHATûSTIMULATESû
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 discount on a US$247m block sale of its Blackstone could have opted for a slightly
INûPLASTICûANDûRECONSTRUCTIVEûSURGERIESûANDû remaining stake in CROCS but still crystallised a smaller deal size (around 6m) in order to instead
4ELAûLAUNCHEDûCOMMERCIALûSALESûAûMONTHû substantial gain nearly six years since bankrolling undertake an unregistered trade. But the firm
LATER the lightweight clog shoe maker’s turnaround. ultimately felt it better to sell out of Crocs
4HEûCOMPANYûISûALSOûWORKINGûWITHûTHEû Morgan Stanley beat other banks in an auction completely via the block, another ECM banker
&$!ûONûDEVELOPINGûAûPROTOCOLûFORûTESTINGûTHEû for Blackstone’s holding of 6.9m Crocs shares or said.
SAFETYûANDûEFFECTIVENESSûOFû/VITEXûFORûBREASTû 10% of the company. Blackstone’s original investment in January
RECONSTRUCTIONûSURGERY The bank then reoffered the shares to 2014 saw it invest US$200m in Crocs via
4ELAû"IOûHASûRAISEDû53MûPRIVATELYû investors overnight Wednesday at US$36 each, convertible preferred stock carrying a 6%
INCLUDINGûAû53Mû3ERIESû"ûROUNDûINû the bottom of a US$36-$36.50 marketing dividend rate and a US$14.50 a share conversion
!UGUSTû4HEû3ERIESû"ûPREFERREDûSHARESû range and a 6.6% discount to the prior close of price, equivalent to 13.8m shares or a 13% stake
CONVERTûINTOûCOMMONûSTOCKûATû53ûAû US$38.53. at the time.
SHAREûPLUSûAûPORTIONûOFûTHEû53MûOFûUNPAIDû Blackstone opted to sell fresh from a 15.6% The terms required conversion of the
DIVIDENDSûTHATûHAVEûACCRUEDûATûAûRATEûOFûû surge in Crocs’ shares during Wednesday’s preferreds into common stock after three years if
PERûYEAR session, the biggest one-day move in the stock Crocs shares traded above US$29.
since November 8 last year. In December last year, Crocs bought back half
SILVERGATE BRINGS CRYPTO TO The rally came as the company delivered of the converted holding at US$26.64 a share for
IPO MARKET better-than-expected third quarter earnings and proceeds to Blackstone of US$184m.
raised its 2019 sales guidance, triggering a short This left Blackstone with a 6.9m-share
!BOUTûûMONTHSûSINCEûITûlLEDû squeeze. 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 “When a stock is squeezed up 16%, it’s not Crocs reported its third quarter revenues grew
HAVINGûlRSTûlLEDûCONlDENTIALLYûINûEARLYû easy to price a block,” said one ECM banker 19.8% year-on-year to US$312.8m and raised its
!UGUSTûLASTûYEARûBEFOREûSHOWINGûITSûHANDû whose firm put in a losing bid for the block. “It forecast for 2019 revenue growth to 11%-12%.
PUBLICLYûLASTû.OVEMBER traded where we thought it would.” Anthony Hughes
9ETûINûAûMARKETûWHEREû)0/ûINVESTORSûAREû
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 PRESENCEûPUBLICLYûlLEDûONû/CTOBERûûFORûAû
.ASDAQû)0/ûTHATûSHAPESûUPûASûONEûOFûTHEûLASTû
Biotechs continue to test the boundaries of-concept” data. It expects to report top-line TECHûNEWûISSUESûOFûTHEûYEAR
between private and public fundraising through data from the Phase II trial by the second half of Goldman Sachs and Morgan Stanley are slated
heavy reliance on insiders. 2020. TOûLEADûAûSIX lRMûUNDERWRITINGûSYNDICATEû
Last week saw two deals being launched, GALERA THERAPEUTICS is in the home stretch of THATûCOULDûLAUNCHûTHEûDEALûASûEARLYûASû
both with hefty commitments from existing developing its treatment for a painful side effect .OVEMBERûûAFTERûTHEûREQUIREDû DAYûWAITû
shareholders. of cancer radiation therapy. 'OLDMANûISûALSOû3PROUTSûBIGGESTûINVESTORû
Of the US$80m being targeted by The biotech hopes to raise US$80m from its WITHûAûûPRE )0/ûSTAKE
89BIO,insiders pledged to put in US$40m. The IPO to complete a Phase III trial of the drug and &OUNDEDûINûûANDûLEDûBYûCO FOUNDERSû
company focuses on drugs for nonalcoholic seek FDA approval. *USTYNû(OWARDûANDû!ARONû2ANKINû3PROUTûISû
steatohepatitis (NASH) and other liver and Bank of America, Citigroup and Credit Suisse GENERATINGû53MûINûANNUALISEDû
metabolic disorders. are marketing 5m shares at $14-$16 each for RECURRINGûREVENUE
Bank of America, SVB Leerink and RBC Capital pricing on Wednesday, November 6. 3UBSCRIPTIONSûGENERATEûNEARLYûALLûOFûTHEû
Markets are marketing 4.7m shares at US$15- Of the US$80m target, insiders are in for COMPANYSûREVENUES
$17 each for pricing on Tuesday, November 5, a US$40m. 4HEûCOMPANYSûLASTûPRIVATEûROUNDûWASûAû
compressed seven-day roadshow. Galera’s lead drug has been designated by the 53Mû3ERIESû$ûROUNDûINû$ECEMBERûû
89bio’s story should be familiar to investors. FDA as breakthrough treatment for severe oral LEDûBYû'OLDMANûANDû.EWû%NTERPRISEû
The biotech was formed last April by former mucositis. !SSOCIATESûANDûPRICEDûATû53ûAûSHARE
Teva Pharmaceutical executives around a portfolio Galera launched the Phase III trial last 3PROUTûlRSTûlLEDûCONlDENTIALLYûINû*UNEû
of drugs acquired from their former employer. October but does not expect top-line data until 4HEûLATESTûlLINGûISûAû53MûPLACEHOLDER
89bio raised US$60m last October to fund a early 2021.
Phase I trial of its lead NASH drug. The biotech has funded development with
OrbiMed anchored that Series A round with US$150m raised privately, including a US$70m BRAZIL
a US$15.8m investment to give it a 41.2% pre- Series C financing round and concurrent
IPO equity stake, and was joined by Longitude US$80m royalty agreement with Clarus MAGAZINE LUIZA TO ACCELERATE
Venture Partners and RA Capital. Therapeutics. EXPANSION
The US$15-$17 IPO range represents a hefty Clarus also anchored the Series C along with
step up from the US$6.22 mark on the Series A other new investors Adage Capital Management, (IGHûINVESTORûEXPECTATIONSûAREûGROWINGû
round. HBM Healthcare and known-crossover investors, EVENûHIGHERûFORûMAGAZINE LUIZAûAFTERûANOTHERû
Since then, 89bio has advanced a drug into including RA Capital and Rock Springs Capital. STRONGûQUARTERûBYûTHEûFAST GROWINGû"RAZILIANû
Phase II trials that it hopes will provide “proof- Robert Sherwood RETAILERûANDûTHEûLAUNCHû4HURSDAYûOFûAû
2BNû53M ûALL PRIMARYûFOLLOW ONû
STOCKûSALE
#ITIGROUPûEARLIERûMARKETEDûTHEûSHARESûATû -ICHIGAN BASEDûFLAGSTAR BANCORPûBYû ,UIZAûSHARESûCLOSEDû"OVESPAûTRADINGû
53 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 û/UTRIGHTû
NUMBERSûTHEûSTOCKûTRADESûATû TIMESûû ONûTHEû3HENZHENû3TOCKû%XCHANGEûTOûRAISEû INVESTORSûWEREûQUICKûTOûRESPONDûTOûTHEû%"û
%6 TO %BITDAûANDû TIMESûEARNINGS 2MBMûINû*ANUARY DESPITEûNOûPRE SOUNDINGûANDûPRICINGûCAMEû
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WORLDLINE PROlLEûTOûTHEû#"ûANDûINVESTORSûSAWûSOMEû
VALUEûATûlNALûPRICINGûSAIDûAûBANKERûINVOLVEDû
STRUCTURED EQUITY WORLDLINEûSHARESûHELDûTHEIRûOWNûONû THOUGHûTHEûIMPLIEDûVOLûLEVELûISûABOVEû
7EDNESDAYûFOLLOWINGûTHEûPLACINGûOFûõBNû REALISEDûLEVELS
OFûEXPOSUREûOFû4UESDAYûEVENINGûINûAûCOMBOû 7HILEûTHEREûWASûAPPETITEûFORûAûBIGGERû
CHINA EQUITYûANDûEQUITY LINKEDûTRANSACTION BONDûITûWOULDûHAVEûREQUIREDûMOREûHEDGEû
-AJORûSHAREHOLDERSû!TOSûANDû3)8û'ROUPû FUNDûPARTICIPATIONûANDûPUTûMOREûPRESSUREûONû
TWO CLEARED FOR CB OFFERINGS HAVEûAûSHAREHOLDERûAGREEMENTûINûPLACEûANDû THEûSTOCKû)NûTHEûEVENTûSHARESûSLIPPEDûTOû
WORKEDûTOGETHERûTOûACHIEVEûTHEIRûDIFFERENTû õûONû7EDNESDAYûANDûBANKERSûSAWû
3HENZHEN LISTEDûZHEJIANG HAILIANGûHASû AIMSû7HILEû!TOSûISûLOOKINGûTOûWINDûDOWNûITSû 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 PERûSHAREûGUIDANCEûAûûDISCOUNTûTOû and Societe Generale WEREûADDEDûASûJOINTû
BREEDINGûPROJECTSûINûSEVENû#HINESEûCITIES 4UESDAYSûCLOSE BOOKS
)TûPOSTEDûAûûNETûPROlTûOFû2MBBNû !TOSûSECUREDûAûFURTHERûõMûTHROUGHûAû "OTHû!TOSûANDû3)8ûHAVEûAGREEDûTOûAû
ONûREVENUEûOFû2MBBN lVE YEARûEXCHANGEABLEûOFFEREDûWITHûAûlXEDû DAYûLOCK UP

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