IFR Magazine March 24 2018

MARCH 24 2018 ISSUE 2226 www.ifre.
com
Lenders clamour for Uber’s upsized US$1.5bn

self-arranged loan despite fatal car crash
US$9.8bn Tencent block smashes records as

Naspers cashes in world’s best investment
Dropbox’s US$756m IPO heralds tech revival:

38% pop comes after above-the-range pricing
EMERGING MARKETS STRUCTURED EQUITY BONDS LOANS

Philippines’ Glencore pushes Italy’s struggling Hong Kong’s
Rmb1.46bn bond hard on US$500m Carige plans HKBN hits redial
rewrites Panda convertible Triple C rated with tighter
playbook bond Tier 2 bond HK$4.1bn loan
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Upfront
OPINION INTERNATIONAL FINANCING REVIEW
original guidance, leading rivals to speculate that it was

Bankerless deal backstopped – and that banks were left holding the bonds.
Non-dilutive convertible bonds have been a boon for the
U ber last week brought its contemptuous attitude to

established norms to the loan market, successfully
pricing a US$1.5bn deal with only limited involvement from
equity-linked market in recent years. The 100% debt
structure has attracted a long list of blue-chip names that
would otherwise not be interested in convertibles, including
bank syndication teams. BP, LVMH and Vodafone.
The disruptive taxi app company needed to be creative, But it has been a double-edged sword, as such deals have
because its debut loan from 2016 was criticised by regulators. also been responsible for closing the market at times. The
This meant that its existing relationship banks could not pricing of NDCBs needs to be aggressive to ensure the CB
underwrite a new deal – at least not without getting into trouble. and derivative together cost less than a straight bond. Not
Rather than turn to institutions that are not subject to the surprisingly, investors quickly tire of bonds with so little
guidelines, such as Jefferies and Nomura, to arrange a juice and as a result, on several occasions the deals have
traditional syndicated loan, Uber came up with the novel gone wrong.
solution of self-arranging the deal, using Morgan Stanley as Yes, the EMEA equity-linked market was open last week,
an adviser and Macquarie to deal with CLOs. but if you blinked you missed it.
The tactic proved highly successful and the deal raked in
cash, even after news broke that that one of the company’s
driverless cars had killed a pedestrian in Arizona. Filipino fashion
So successful, in fact, that the commitment deadline was
accelerated and the deal was increased by US$250m.
While groundbreaking, the unique set of circumstances
around Uber and its deal will make it hard for other highly
C hina’s global ambitions for its onshore bond market
RECEIVEDûTWOûBIGûBOOSTSûLASTûWEEKû7HILEûCONlRMATIONûOFû
index inclusion from one of the big index providers has long
leveraged or “criticised” companies to replicate the self- been on the cards, a surprise Panda bond issue holds more
arranged structure and placement. SIGNIlCANCEûnûATûLEASTûINûTHEûSHORTûTERM
-OREûTRADITIONALûBORROWERSûMAYûALSOûlNDûLENDERSûLESSû Global investors are clearly getting over their fear of the
willing to fund billions of dollars of cash-burn in the run-up renminbi. After the shock devaluation of August 2015 and a
to an IPO based on negative Ebitda. dismal run against the US dollar the following year, the
So just as few companies other than Spotify could replicate currency is up more than 9% since the start of 2017.
THEûMUSIC STREAMINGûOUTlTSûUPCOMINGûDIRECTûLISTINGûFEWERû Renminbi bonds are back in demand, as recent Dim Sum
still have the name recognition and reputation to follow offerings from the property sector have illustrated.
Uber’s example in the loan market. The Philippines extended that interest to the onshore bond
Not that Uber will care much about that. With the loan MARKETûLASTûWEEKûWITHûTHEûlRSTû0ANDAûBONDSûSOLDûMAINLYûTOû
topping its balance sheet cash up to US$6bn, Uber is now offshore investors.
sitting pretty with plenty of funds to burn through as it Manila’s Treasury is a rare international issuer, with a
cruises towards its planned equity market debut in 2019. POSITIVEûECONOMICûSTORYûTOûTELLûBUTûTHISûISûTHEûlRSTûTIMEûTHATû
overseas investors have outbid Chinese buyers in their home
market, which says a lot about the growing appeal of
Open and shut onshore renminbi bonds.
For overseas buyers, the Panda bond issue offered a chance
T he gloom in European equity-linked was momentarily

lifted on Tuesday when Glencore issued a US$500m
seven-year convertible bond with a 1% yield to maturity and a
to diversify currency exposure at an attractive 5% coupon and
an investment-grade sovereign credit. But it also showed that
offshore funds have different pricing expectations than their
conversion price 25% higher than the stock’s current level. onshore peers, which are still recovering from last year’s
Considering the shares are already up 35% in the past six liquidity squeeze.
months, and the conversion price is set at a level not seen for That contrast is good news for China, which is looking to
six years, it was a handsome result. global investors to improve standards and price discovery in
Convertibles have been so scarce in 2018 that banks had its domestic debt markets.
resorted to repackaging risk on their balance sheets into Another leg-up in foreign demand is coming, after the
exchangeable bonds just to keep the lights on. compilers of the massive bond index known as the Global
!ûNEWûDEALûFROMûAûHIGH PROlLEûINVESTMENT GRADEûNAMEû Agg said they would start phasing in renminbi bonds next
cheered everyone up, but the good mood didn’t last. April.
Two days later, Carrefour followed with its own That alone promises to add about US$100bn of demand
convertible. As with Glencore’s deal, the trade came as a from index tracking funds over time. A similar move from
non-dilutive issue whereby call options are purchased to the other big global benchmarks – the WGBI and GBI-EM –
give the effect of issuing straight debt. could add a further US$150bn.
Unfortunately, Carrefour’s bankers had misjudged what As more overseas investors open Chinese lines and prepare
was possible. for the rebalancing, Panda bonds from international credits
The bonds were underwater in the grey market from the are a logical place to start. The Philippines may have just
start and never recovered. Yet the deal was still priced within started a trend.
International Financing Review March 24 2018 1

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Contents
INTERNATIONAL FINANCING REVIEW
MARCH 24 2018 ISSUE 2226
TOP NEWS 04
LOANS Groundbreaking Uber Technologies’ self-arranged Term Loan B was increased
to US$1.5bn, justifying its unconventional approach to raising the loan. 04
EQUITIES Record deal Tencent Holdings’ largest shareholder trimmed its stake in a record
block trade during a market sell-off. 04
EQUITIES Revival Dropbox made a splash in its Nasdaq debut, with its shares jumping 38%
after it priced its US$756m IPO to overwhelming demand. 05
EMERGING MARKETS Rewritten The Philippines shook up the Panda bond market with an exceptionally
tight debut that underscored the growing role of overseas investors. 06
Rapturous response Glencore pushes hard on US$500m CB pricing. 07
Rebuilding Italy’s Carige eyes new Tier 2 bond as it embarks on roadshow. 08
Expensive deal Pay to play for borrowers as rates stack up. 09
On a roll HKBN hits redial with tighter loan. 10
PEOPLE & Snapped up Sherborne Investors, a specialist fund led by activist investor 11
MARKETS Edward Bramson, has bought voting control of 5.2% of Barclays.
Painful divorce Europe’s capital markets revenue is set to shrink as a result of
Brexit, Morgan Stanley president Colm Kelleher warned. 12
Hit A strong euro and higher internal funding costs will have a €450m (US$553m)
impact on Deutsche Bank in the first quarter. 13
Strong start M&A races over US$1trn with mega-deals surge. 17
Case-by-case Hong Kong keeps flexible for biotech IPOs. 19
Fall from grace Noble defaults and faces lawsuits. 19
BONDS Buyers’ strike Investors step back from bloated market. 21

Teflon Italian bond market puzzles. 24 On the up Prosper sells biggest bond. 42
EMERGING Refi plans Metinvest takes aim at debt pile. 55

MARKETS Unprecedented HDFC Bank in Masala. 57 Awkward Mozambique debt talks start. 61
LOANS Battle for yield Banks, funds compete for second-lien. 65

No lift African private debt struggles. 71 Jumbo Coty launches refinancing. 84
EQUITIES IPOs Streaming websites entice investors despite recent disappointments. 87

Turbulent HAL stumbles on take-off. 90 Bad timing ForeScout takes hit on return. 99
STRUCTURED Oz deal Cromwell raises €230m from CBs. 101

EQUITY Downgrade Carrefour synthetic slumps. 101 War chest Blackstone Mortgage funds pipeline. 102

Top news
Philippines Panda 06 Tech giants bond pushback 06 Glencore pushes hard on CB 07
Uber lands loan, despite fatal car crash

Loans Groundbreaking Term Loan B increased to US$1.5bn and pricing cut
BY ANDREW BERLIN News of the accident emerged “I’m guessing the pullback [in unable to be paid down by half
the following day, and Uber pulled that investment] will be WITHûCASHmOWûOVERûlVEûTOûSEVENû
UBER TECHNOLOGIES’ self-arranged forward the commitment temporary,” one investor said. years.
Term Loan B was increased to DEADLINEûONûITSûLOANûTOû-ARCHûû Another investor said: “I do Uber reported roughly
53BNûJUSTIFYINGûTHEûTAXIûAPPû from an original deadline of not think the death changes NEGATIVEû53BNûOFû%BITDAûINû
company’s unconventional -ARCHûû5BERûSAIDûTHATûITû ANYTHINGû3IXûTHOUSANDû ûTWOûSOURCESûSAIDûLEAVINGû
approach to raising the loan and planned to accelerate the deadline pedestrians are killed a year. potential investors without the
succeeding despite news that one even before the accident, due to People are thinking, if traditional debt-to-Ebitda credit
of the company’s self-driving cars the oversubscription. everything craps out, will ratio that they rely on to conduct
had killed a pedestrian. Uber was still able to capitalise someone buy this money-losing analysis.
The groundbreaking seven-year on strong investor demand and operation for more than my loan “It’s just too hard to do a ‘real’
new-money loan was placed with THEûDEALûSIZEûWASûINCREASEDûBYû balance?” analysis on it,” said the second
investors directly through Uber’s 53MûFROMû53BNûATû The loan ultimately cleared at investor.
capital markets team, rather than launch. BPûWITHûAûû,IBORûmOORûATû Unusually, the loan was
through a syndication process led After the accident, Uber said it 99.5, versus opening guidance of marketed on a loan-to-value
by arranging banks, and also would halt the self-driving AûBP BPûOVERû,IBORûRANGEû ratio. Uber is touting an equity
priced tight of guidance. PROGRAMMEûINû!RIZONAû WITHûAûûmOORûANDûû/)$ value of US$75bn, which would
It is largely a bridge loan Pittsburgh, San Francisco and provide ample coverage for
designed to fund Uber’s steep cash Toronto and continue to assist LEVERAGELESS lenders, although that valuation
BURNûUNTILûITSûPLANNEDûû)0/û local, state and federal The direct placement strategy is only implied.
and also required investors to get authorities as concern rippled was intended to avoid attracting The current valuation follows
comfortable with unusual credit through the auto industry. scrutiny from US banking the purchase of a 17.5% stake in
metrics, including negative Ebitda. Proceeds were earmarked for regulators because the loan the company in January by an
The Uber car hit and killed general corporate purposes – a might breach leveraged lending investor consortium led by
%LAINEû(ERZBERGûINû!RIZONAûLATEû generic use that includes guidelines. The rules raise Japan’s Softbank that included a
on March 18, in what is believed investment in autonomous concerns about transactions TENDERûOFFERûFORûEXISTINGûSHARESû
TOûBEûTHEûlRSTûFATALITYûINVOLVINGûAû vehicle technology, investors having a debt-to-Ebitda ratio of at a US$48bn valuation and new
self-driving vehicle. said. OVERûSIXûTIMESûORûDEALSûTHATûAREû equity at a US$68bn valuation.
Tencent block smashes Asia record

Equities Three bookrunners share big league-table boost, as South Africa’s Naspers cuts stake
BY FIONA LAU Thursday, before the sell-down allows a market price to be set guidance of HK$400–$410 per
was announced. effectively,” said a person close share or a discount of 6.7%–9%.
TENCENT HOLDINGS’ largest After months of preparations, to the deal. The shares were eventually
shareholder trimmed its stake in joint bookrunners Bank of “The auction process allows priced at HK$405 each, or a 7.8%
a record HK$76.95bn (US$9.8bn) America Merrill Lynch, Citigroup the banks to navigate the discount to the pre-deal spot of
block trade on Thursday during and Morgan Stanley nevertheless transaction more easily, HK$439.40.
a global market sell-off as the US went ahead and launched the especially under volatile Allocations were heavily
opened a trade war with China. offer of about 190m secondary market conditions. You can CONCENTRATEDûWITHûTHEûTOPûû
South African online media SHARESûORûABOUTûûOFû4ENCENTSû lRSTûBUILDûTHEûSIZEûTHENû investors taking around 60% of
and entertainment company shares outstanding. build the price,” said another the deal and the top 10 buying
.ASPERSûLAUNCHEDû!SIAû0ACIlCSû Unlike a typical block trade in person familiar with the 40%. Each of the top 10 investors
largest overnight block after the Asia, the deal was launched situation. PLEDGEDûORDERSûINûEXCESSûOFû
Hong Kong market close, a day without a price range. This $ESPITEûAûûDROPûINûTHEû US$500m.
after Tencent announced its allowed a full price discovery Dow Jones Industrial Average Demand came from all
quarterly results. process and gave the leads more during bookbuilding, the deal investor types including global
Although the Chinese internet mEXIBILITYûONûPRICING was covered a few hours after top-tier long-only funds,
GIANTSûNETûPROlTûOFû2MBBNû “Tencent is a very liquid and launch and ended well sovereign wealth funds and
53BN ûBEATûFORECASTSû well-known stock. Instead of oversubscribed with more than hedge funds. Geographically,
Tencent fell short on sales setting a price range according 300 investors participating. about 50% of the demand came
because of slowing gaming to the banks’ and issuer’s own About an hour before the from Asia, 40% from the US and
revenues. Its shares fell 5% on judgment, the bidding process books closed, the leads issued 10% from Europe.
4 International Financing Review March 24 2018

@ For daily news stories
visit www.ifre.com
Carige eyes Tier 2 08 Challenges for M&A financing 08 HKBN hits redial 10
)NCLUDINGûCAPITALûEXPENDITUREû
ANDûINTERESTûEXPENSEûTHEû
company burned through
did not serve as administrative
agent.
Macquarie is also serving as
Dropbox IPO heralds
roughly US$3bn of cash last
year. The loan will boost
ANûINTERMEDIARYûTOû#,/Sû
seeking to play the deal. As
tech sector revival
balance sheet cash to nearly OFFSHOREûVEHICLESû#,/SûAREû Equities Buyside embraces file-sharing company
US$6bn. prohibited from investing
in US loans directly because BY ANTHONY HUGHES Salesforce is paying nearly US$45
CLO TRADE doing so would be construed a share, well above MuleSoft’s
Uber’s leveraged loan market as origination, which DROPBOX made a splash in its -ARCHûû)0/ûPRICEûOFû53
DEBUTûINûûWASûCRITICISEDûBYû could otherwise subject Nasdaq debut on Friday, its 3ALESFORCEûANDû$ROPBOXû
regulators. Morgan Stanley led them to US corporate income shares jumping 38% after the announced a deeper partnership
the US$1.15bn TLB with TAXES POPULARûlLE SHARINGûCOMPANYû DAYSûBEFOREû$ROPBOXSû)0/ûLAUNCHû
Barclays, Citigroup and #,/SûMUSTûWAITûFORûAû PRICEDûITSû53Mû)0/ûTOû Salesforce followed up by agreeing
Goldman Sachs. The deal priced seasoning period – typically overwhelming demand. TOûINVESTû53MûINû$ROPBOXûONû
at 400bp over Libor with a 1% around 48 hours – during $ROPBOXûPRICEDûITSûMûSHAREû TOPûOFûTHEû)0/ûPROCEEDS
mOOR which the originator closes DEALûATû53ûPERûSHAREûWELLû h7HATûPUTû$ROPBOXûINTOûAûWHOLEû
2EGULATEDûBANKSûCOULDûNOTû and funds the loan, before north of the US$16-$18 range new league was the very fortuitous
play a direct role in the new ITûISûMOVEDûINTOûTHEû#,/û originally targeted due to a concurrent private placement and
deal as Uber is a “criticised via assignment. The process buyside pile-on that left the deal the agreement with Salesforce,”
name”, and Uber was AVOIDSûANYûPOTENTIALûTAXû MOREûTHANûûTIMESûCOVERED SAIDû)0/û"OUTIQUESûMANAGINGû
reluctant to go outside its liabilities. "UTûROBUSTûDEMANDûONûTHEûlRSTû director Scott Sweet.
relationship bank group to Macquarie, which is day of trade saw the shares open $ROPBOXûWASûALSOûREWARDEDû
an unregulated lead arranger, nonregulated and therefore ATûûEVENûASûMANYûOTHERûTECHû for its strategy of starting with a
which led to the unconventional not subject to the leveraged stocks - notably Facebook - were RELATIVELYûCONSERVATIVEû)0/û
structure. lending guidance, is funding pummelled during the week. valuation – at least by the tech
Morgan Stanley was the some of the loan that will be “Investors are pretty eager to sector’s lofty standards – and
only bank to play an active ASSIGNEDûTOû#,/ûACCOUNTSû get into these tech growth deals, walking up investors from there.
role in the new deal, but as Cortland Capital Market and there is the prospect the 4HEûlNALûTERMSûVALUEDû$ROPBOXû
5BERSûlNANCIALûADVISORû Services is the administrative company could be acquired down ATû53BNûBELOWûTHEû53BNû
rather than a conventional agent. the track,” said Josef Schuster of MARKûONûAûûPRIVATEûROUNDûBUTû
arranger. Unlike in the (Additional reporting by Kristen INDEXûPROVIDERû)0/8û3CHUSTER the gap closed somewhat when
ûTRANSACTIONûTHEûBANKû Haunss) $ROPBOXûEARLIERûUPPEDûTHEû $ROPBOXûSHARESûBEGANûTRADING
TARGETûRANGEûTOû53 ûYETûSTILLû $ROPBOXûSTILLûCAMEûATûAûFORWARDû
priced the deal higher as investors sales multiple discount to its
BIG PAYOFF YEAR TO DATEû!SIAû0ACIlCûEQUITYû embraced the possibilities for a SOFTWAREûPEERSûNEARLYûSIXûTIMESû
Naspers’ sell-down in Tencent and equity-linked league company with 500m users. EV/sales versus seven times-plus
REPRESENTSûANûEXTRAORDINARYû table with US$7.17bn The outcome was a big win for for the sector), but was pitched at
payoff for the South African proceeds raised, according tech ECM bankers, coming a few AûPREMIUMûTOûRIVALû"OXûAûBANKERû
group, which bought its TOû4HOMSONû2EUTERSûDATAû weeks ahead of music-streaming close to the deal said.
Tencent stake for just Goldman Sachs ranked SPOTIFY’s NYSE direct listing on !NYû53ûTECHû)0/ûREVIVALûDOESû
53MûINûûANDûHADûNOTû SECONDûWITHû53BNû April 3 and just a week after not come without challenges in
sold any shares before last while Citigroup followed NETWORKûSECURITYûlRMûZSCALER light of the ongoing debate about
week. After the sell-down, CLOSELYûWITHû53BNû doubled on its Nasdaq debut. THEûEFlCIENCYûANDûTRANSPARENCYû
ITûISûSTILLûLEFTûWITHûûOFû Bank of America Merrill A recovery in software OFûTHEûTRADITIONALû)0/ûPROCESS
the Chinese internet giant, Lynch ranked fourth with MULTIPLESûTOûTHEIRûûPEAKû At times this has led to heavily
worth US$165bn at current US$3.81bn. and the tech sector’s clear oversubscribed offerings structured
prices. Naspers’ own There is a 180-day lock-up on outperformance versus the S&P WITHûAûMINIMALûFREEûmOATûEITHERû
CAPITALISATIONûISûONLYû53BN the vendor. Naspers said it had 500 this year, has left the disappointing on debut, shortly
The trade is also a big win no intention of selling any more SECTORSû)0/ûWINDOWûWIDEûOPENû after a company goes public or
for the three bookrunners, Tencent shares for at least three notwithstanding the share price WHENûSUBJECTûTOûAûWIDERûmOAT
who leveraged their strong years. pressure last week. The poor performance of
relationships with the seller Tencent shares opened “We are at the front end of a tech HIGH PROlLEû)0/SûSUCHûASû3NAPû
to clinch the mandate. at the placement price of REVIVALûLEDûBYû:SCALERû$ROPBOXûANDû and Blue Apron helped snuff out
Although a trophy block of HK$405 on Friday but rose Spotify,” one ECM banker said. ANYûTECHû)0/ûRECOVERYûLASTûYEAR
SUCHûSIZEûOFTENûDOESûNOTûPAYû quickly from there. The Another boost was provided Spotify’s decision to opt for a
particularly well, the sale will CLOSINGûPRICEûOFû(+ûWASûAû by last week’s US$6.5bn cash- direct NYSE listing and not raise
give each of the trio a big 4.4% drop on the day, but left and-stock purchase by any money is partly premised on
league-table boost. investors who took part in the software-as-a-service bellwether criticism of the “built-in” pop
After the Tencent sale, block trade comfortably in the Salesforce of application that often accompanies the
Morgan Stanley topped the money. software company MuleSoft. TRADITIONALûTECHû)0/ûPROCESS

Top news
Philippines rewrites Panda playbook
Emerging Markets Sovereign surprises with very tight pricing as offshore buyers dominate
BY INA ZHOU PREMIUMûATûALLûOVERûTHEû2MBBNû Sovereign wealth funds and Further distribution statistics
three-year issue of Central Huijin, Philippine banks contributed were not available.
The REPUBLIC OF THEPHILIPPINES a unit of sovereign wealth fund SIGNIlCANTLYûTOûTHEûOFFSHOREûBID “The Philippines is a frequent
shook up the Panda bond China Investment Corp, also “It is likely that Philippines issuer in the international market
MARKETûWITHûANûEXCEPTIONALLYû priced at 5% last week. banks supported the sovereign and it hadn’t issued offshore
tight debut last week that /FûTHEûlVEûSOVEREIGNû0ANDAû deal, just like Chinese banks back bonds with tenors of less than 10
underscored the growing role of bond issuers so far, only South their sovereign deals,” said a YEARSû;RECENTLY=û3OûITSûlRSTûTHREE
overseas investors in onshore +OREAû!A!!!!n ûRATEDûlVEûTOû DCM banker away from the deal. year offering found demand
RENMINBIûlNANCINGS SIXûNOTCHESûHIGHERûTHANûTHEû /RDERSûCAMEûINûMUCHûSTRONGERû among offshore investors,” said a
4HEû"AA""""""ûRATEDû Philippines, has priced at a THANûEXPECTEDûAFTERûBOOKSû banker on the deal.
SOVEREIGNûPRICEDûTHEû2MBBNû tighter spread over CDB. opened last Tuesday, according The Panda bonds even managed
53M ûOFûûTHREE YEARû Less than two months ago, the to sources familiar with the deal. to be priced inside the Philippines’
notes in China’s interbank government of the Emirate of h4HEûISSUERûWASûCONlDENTûABOUTû US dollar curve. The 5.0% yield
market at the low end of 5.0%– Sharjah, rated A3/BBB+ (Moody’s/ demand, following the roadshow swapped to a hypothetical 3.0%
5.6% indicative guidance. S&P), offered a 103bp premium the previous week. Still, the yield in US dollars, according to
)NûAûlRSTûFORûTHEû0ANDAûMARKETû OVERû#$"ûFORûITSû2MBBNûTHREE momentum of the bookbuilding traders, while the sovereign’s US
most of the bonds went to year Panda at 5.80%. FARûEXCEEDEDûOURûEXPECTATIONSvû DOLLARûûSûWEREûBIDûATûû
overseas buyers, helping the The other two sovereign issuers, said one of the sources. last Tuesday. The achievement
Philippines smash through 0OLANDû!"""!n ûANDû(UNGARYû The offering was 6.3 times caused some soul-searching among
PRICINGûEXPECTATIONSûANDûLEAVINGû (Baa3/BBB–/BBB–), paid 60bp and COVEREDûBYû2MBBNûOFûORDERSû some participants in previous
other issuers scrambling to 83bp over CDB, respectively. the biggest book and the largest sovereign Panda bonds, who were
understand the achievement. oversubscription of any of the SCRAMBLINGûTOûEXPLAINûWHYûTHEIRû
/FFSHOREûINVESTORSûTOOKûANû HOME SUPPORT sovereign Pandas to-date. deals had paid a higher spread.
auspicious 88% of the notes. The stunning pricing was the 4HEûlNALûALLOCATIONûTOû#HINESEû The DCM banker away from
Final pricing represented a result of overwhelming offshore onshore investors was just over the deal said he was drafting a
spread of only about 35bp over demand via the Bond Connect û/NSHOREûBIDSûMADEûUPûHALFû report to clients “hopefully in a
the three-year notes of China link, which gives international of the total order book, but most tactful way”.
Development Bank, rated Aa3/ investors direct access to China’s of them were outpriced by Bankers on the deal said the
AA– (Moody’s/S&P), and no domestic market from Hong Kong. offshore accounts, sources said. offering demonstrated the
Tech giants suffer bond pushback

Emerging Markets Baidu, Lenovo, SoftBank find long tenors a hard sell against rising rate backdrop
BY FRANCES YOON premiums of about 15bp for a such as Alibaba, Baidu and markets are so risk averse,” said
US$1bn 5.5-year and around 10bp Lenovo, have widened more a debt syndicate banker away
Asian credit investors are for a US$500m 10-year, while than 10bp in secondary trading from these deals.
becoming so wary of rising Japan’s SoftBank Group Corp in the past two months. “The only reason why it makes
interest rates that even popular decided against raising new funds “Market conditions are weak, sense to buy a 10-year is if the credit
tech giants such as SOFTBANK ALONGSIDEûANûEXCHANGEûOFFERû&ORû and liquid names like these tech improves substantially, helping to
GROUP CORP, LENOVO GROUP and full details of the deals, see Bonds/ issuers are getting hit harder offset the rising rate cycle, but, with
BAIDU are having a hard time Emerging Markets sections). THANûILLIQUIDû;#HINESE=û3/%SvûSAIDû SoftBank, that’s not the case. They
raising long-term debt. “It’s not a great market for a Hong Kong-based credit analyst. are highly levered.”
Investors pushed back against new issues,” said a banker on the 4HEû53û&EDERALû2ESERVEûRAISEDû
the trio’s attempts to lock in long SoftBank trade. ITSûBENCHMARKûINTERESTûRATEûBPû TESTING THE WATERS
maturities last week as the era of Bankers said longer maturities last week and forecast at least SoftBank still managed to
low interest rates draws to a close. now appealed to a smaller group two more increases this year, PERSUADEûINVESTORSûTOûEXCHANGEû
Lenovo had considered selling a of investors. SIGNALLINGûTHATû53ûINmATIONû shorter-dated US dollar and euro
new US dollar 10-year bond, but “These issuers have been SHOULDûlNALLYûMOVEûHIGHERûAFTERû notes into new 10-year notes.
feedback from investors put such opportunistic and wanted to get YEARSûBELOWûITSûûTARGET )NûEXCHANGEûITûWILLûISSUEû
a tenor at too much of a premium, as much duration as possible,” Although widely anticipated, 53MûOFûNEWûû
said a banker on the deal. said a banker on the Lenovo deal. the move adds to the cautious year bonds and €1.17bn of new
The Chinese computer-maker “A lot of the fast money has MOODûAMONGûlXED INCOMEû 5% 10-year bonds.
INSTEADûPRICEDûAû53MûlVE evaporated for long tenors and investors, who are trying to Holders of the euro notes were
year unrated bond at Treasuries that gives us less momentum to balance the appeal of higher more willing to roll into longer
PLUSûBPûONû4HURSDAYûFORûAûBPû tighten. Still, the quality of books coupons on longer maturities maturities than holders of the US
new-issue premium, according to has improved, since a lot of guys WITHûTHEûTHREATûOFûRISINGûINmATION dollar notes, given that the
Nomura’s trading desk. that come in are buy-and-hold.” “You don’t ask people to European Central Bank has not
Search engine Baidu paid Bonds from Asian tech names, EXTENDûDURATIONûNOWûWHENûTHEû yet started raising rates this cycle.

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importance of offshore support

at a time when China’s onshore
METICULOUS PLANNING
The sovereign had started Glencore pushes
bond market held little pricing preparing the ground for the
advantage for foreign Panda
bond issuers.
offering very early. In late
3EPTEMBERû0HILIPPINEûOFlCIALSû
hard on CB pricing
“The deal shows that reaching VISITEDû#HINAûTOûDELIVERûAûlRSTû Structured Equity Company saved 50bp versus straight debt
out to offshore orders was a good pitch and to discuss investment
idea for Panda bonds, which we opportunities in domestic BY OWEN WILD Commodities are under-
did not think about before,” said infrastructure projects. represented in the CB universe,
another Beijing-based DCM In November, during Chinese GLENCORE’s US$500m seven-year while Glencore is a big name
banker away from the deal. Premier Li Keqiang’s visit to convertible bond met a rapturous and one investors know from its
Despite cheaper funding in the Manila, the country signed an response on Tuesday despite eye- PRE )0/û#"û
offshore renminbi debt market, agreement with Bank of China wateringly aggressive pricing.
potential sovereign issuers would for the offering. The response was ‘OW MUCH?
stick with the Panda bond In February, the sovereign unsurprising, given the scarcity Glencore’s bond priced with an
market, bankers said. received approval from the of equity-linked deals in recent IMPLIEDûVOLATILITYûOFûûFROMûAû
“Panda bonds have a much People’s Bank of China and the months. Such is the paucity of RANGEûOFû ûnûIFûUSINGûAû
better marketing effect for National Association of Financial issuance in Europe that just over convertible bond model. Even in
sovereign issuers, whose Market Institutional Investors. a week earlier Morgan Stanley the short term, Glencore’s
primary goal is to build/enhance Then, a week before the deal, itself had issued an realised vol is only 31, falling to
relations with the Chinese a Philippine delegation, led by EXCHANGEABLEûBONDûINTOû$AIMLERû ûOVERûTHEûLONGERûTERM
government,” said a banker. NATIONALûTREASURERû2OSALIAûDEû for the sake of the market - As a US dollar bond with a
Like other recent Panda Leon and Bangko Sentral ng providing much-needed new sterling underlying, another
issuers, the Philippines also Pilipinas deputy governor Diwa paper for investors and its option was to use a bonds-plus-
made a play on the Belt and Guinigundo, met potential trading desk plus a fresh data warrants model, where the
2OADûTHEME investors in Singapore, Hong point for the bank’s own implied leapt to 35 at best for
The prospectus said proceeds Kong and mainland China. marketing of convertibles. investors.
would be remitted offshore as Bank of China was lead Glencore’s deal got off to an Long-only names used a CB
part of the country’s underwriter on the offering, unconventional start as it model and hedge funds on the
international reserves. Some of with Standard Chartered Bank launched in the afternoon. It whole opted for the bond-with-
the funds may be converted to (China) as joint lead underwriter. had been planned for later in warrants approach. About 70%
pesos to fund budget The Philippines and the notes the week but when the company of the bonds went to outright
EXPENDITURESûANDûTOûSUPPORTû have AAA ratings from China announced a US$1.7bn coal investors, including sovereign
"ELTûANDû2OADûPROJECTS Lianhe Credit. acquisition on Tuesday morning, wealth funds, dominated by
the plan was accelerated. Swiss, UK, French and German
4HEûEXCHANGEûADDEDûPRESSUREû to limit the premium offered for Bankers had been pitching a buyers.
TOû3OFT"ANKSû53BNûûANDû the tender,” said the banker on non-dilutive convertible bond - Hedge funds ignored their
US$1.75bn 6.875% perpetual the Lenovo deal. “We were where the issuer purchases call models to buy nearly a third of
NOTESû4HEûPERPSûCALLABLEûINûû working on this trade back in options matching those embedded the deal, showing that the leads
WIDENEDûTOûûONû-ARCHûû January, and markets have in the bond - for two years. were correct in predicting they
ANDûTHEûPERPSûCALLABLEûINûûTOû turned a bit since then.” Issuers are attracted to NDCBs could sell US$500m of Glencore
7.83% on March 19, respectively, Baidu’s US$1.5bn benchmark if the combination of convert on aggressive terms. The deal is
their highest yields since pricing used its entire approved issuance and the cost of the option is less a minnow compared with a
last July, according to Thomson quota, but paid a premium over than the cost of straight debt, £53bn market capitalisation.
2EUTERSûDATA a secondary curve that had which requires aggressive Combined with very good
Lenovo also tried to move already widened month to date. pricing. pricing achieved from banks on
SOMEûHOLDERSûOFûEXISTINGûBONDSû The Treasury spread on its 3.5% Secondary market valuations the derivative, following an
into its new issue. Proceeds SûHADûRISENûABOUTûBPûANDû for convertibles have declined in auction conducted by sole global
from the new money will be ONûITSûSûABOUTûBPûSINCEûTHEû recent weeks, so the timing coordinator Bank of America Merrill
used to fund a tender offer for start of March, according to could have been better. Yet Lynch, Glencore made an estimated
THEû53BNûûSûANDû 4HOMSONû2EUTERSûDATA 'LENCORESûNAMEûMEANTûITûDElEDû saving of about 50bp-60bp
53MûûS “Marrying the US investor any doubts on investors’ part – compared with straight debt.
Lenovo had offered to accept base and Asian investor base was just. BAML was joined by BNP
up to US$1.5bn of bonds in the somewhat more challenging The bonds were offered at Paribas, Barclays, HSBC and JP
tender, with priority given to than it used to be,” said a banker ûTOûGIVEûAûYIELDûTOû Morgan as joint bookrunners.
HOLDERSûOFûTHEûSûTHATû on the deal. MATURITYûOFû û4HEû The only downside was that
subscribed to the new issue. In “We saw some lumpy, triple- PREMIUMûWASûlXEDûATûLAUNCHûATû banks misjudged just how much
the end, it accepted digit tickets. For rare tech names, û ûABOVEûAûSHAREûPRICEûTHATûISû JUICEû'LENCOREûHADûSQUEEZEDûOUTû
53MûOFûTHEûSûFROMû there’s still a bid out there, and already up about 35% since last of investors. That became clear
holders that bought the new we can still see that people are June. when another bank group
ISSUEû53MûFROMûOTHERû warehousing their cash. !TûûTHEûDEALûWASû brought a NDCB for CARREFOUR
HOLDERSûOFûTHEûSûANDûNONEû However, new-issue concessions multiple times covered with two days later. The deal was
FROMûHOLDERSûOFûTHEûS are higher than people are used over 100 names in the book, but mispriced and traded below
“The tender was also slightly to, and the move from initial to demand fell off a cliff above that issue price (see Structured
BELOWûEXPECTATIONSûASûTHEYûTRIEDû lNALûGUIDANCEûHASûSLOWEDv level. Equity section for details).

Top news
Italy’s Carige eyes new Tier 2 bond
Bonds Italian bank sounds out investors, but may have to pay up
BY ALICE GLEDHILL WHICHûPUTTINGûEXPENSIVEûDEBTûONû common equity Tier 1 ratio to “If they are willing and able to
the balance sheet doesn’t make ûATûYEAR ENDûFROMûûATû pay - which historically they
Italy’s BANCA CARIGE embarked on sense, no matter what the the end of the third quarter. never were - they will manage.”
a roadshow last week to see if a regulatory capital structure
4IERûûTRADEûISûVIABLEûASûITûTRIESûTOû DICTATESvûONEûBANKERûTOLDû)&2 PAYING UP
“If you’re just killing
rebuild its subordinated debt “If you’re just killing your [net Carige would almost certainly
stack after an emergency capital interest margin] with very
your net interest have to pay a premium over
raising last year. EXPENSIVEûDEBTûxûTHATSûNOTûAû margin with very Banca Monte dei Paschi di Siena,
Carige, one of the last weak good thing for your credit or expensive debt … the former symbol of the Italian
links in the Italian banking your shareholders.” that’s not a good banking crisis.
SECTORûISûSTILLûSHORTûOFûITSûû "ANKûOFlCIALSûMETûINVESTORSûINû thing for your credit BMPS priced a €750m 5.375%
total capital ratio requirement of London and Milan from Monday YEARûNON CALLûlVEû#AA###û
û ûITûHASûûCURRENTLYû û to Wednesday, looking to engage
or your shareholders” by Moody’s/Fitch) in January that
THOUGHûTHEûNEWûBONDûEXPECTEDû with a larger pool of investors was almost four times covered,
TOûBEûSUB BENCHMARKûINûSIZEû and highlight Carige’s progress. though that bond was bid at
WOULDûlLLûTHATûGAP The bank’s €544m capital 6.69% on Thursday.
"UTûWITHûANûEXPECTEDû###û increase last year certainly “They managed to complete There is arguably less implicit
rating from Fitch, the bond proved painful. But together their capital increase, but I think state support for Carige than
would be among the lowest- with the conversion of Tier 1 there is some concern in the BMPS, however. BMPS is one of
RATEDû4IERûûTRANSACTIONSûINû ANDû4IERûûSECURITIESûINTOûAûû market, if not to the point that Italy’s largest banks and partly
recent years - and an unpalatable lVE YEARûSENIORûNOTEûASûWELLûASû the new deal is not feasible,” said government-owned.
price could put the deal on ice. asset sales and bad loan a second banker not involved “We believe that should the
“There is a point beyond disposals, Carige upped its with the transaction. bank fail, Carige is at risk of
M&A bond financing poses new challenge

Bonds Financing US$100bn M&A pipeline in the bond market set to get trickier
BY ELEANOR DUNCAN latter got a lukewarm reception Take drugmaker TEVA ON TRIAL
and its bonds are now as much PHARMACEUTICAL INDUSTRIES. But that’s not all that’s worrying
Bankers warn it may get harder as 15bp wider in secondary, )TûlNANCEDûITSûACQUISITIONûOFû bankers staring down a
to raise billions of dollars in ACCORDINGûTOû-ARKET!XESSûDATA !LLERGANû'ENERICSûINûûWITHû roughly US$100bn M&A
-!ûBONDûlNANCINGûINûTHEû “Investors are really homing OVERû53BN EQUIVALENTûINû bond pipeline, which includes
coming months as investors in on the strategic merit of high-grade bonds, increasing lNANCINGSûFORûGENERAL MILLS’s
grow leery about acquisitions transactions,” one senior M&A debt nearly four-fold, and US$8bn acquisition of Blue
and market conditions get banker said. “The future is pretty bringing its ratings down to Buffalo, UNITED TECH’s US$30bn
tougher. uncertain. They’re asking: why "AA""""""ûFROMû!! """ PURCHASEûOFû2OCKWELLû
The buyside has typically do you need to own this It promised investors “rapid Collins, and BAYERSû53BNû
poured into high-grade M&A company?” DELEVERAGINGvûTOûûTIMESû deal to buy seed company
deals in the past few years, lured within three years to secure a Monsanto.
by the promise of chunky bonds PAY DOWN OR PAY UP “solid” Triple B rating. The uncertain regulatory
that offer better liquidity and Increased leverage is a chief Instead, the company is now climate is also giving the buyside
potential yield pick-up. investor concern. rated junk by all three major more ammunition to win better
But as the credit cycle gets Some companies that loaded rating agencies after terms.
longer in the tooth, and some UPûONûDEBTûANDûSACRIlCEDûRATINGSû competition for its generic drugs #63ûLAIDûONûANûEXTRAûINVESTOR
M&A deals have not panned out to make acquisitions in the past hit revenues - and its bond friendly redemption provision to
ASûEXPECTEDûSOMEûBONDûBUYERSû couple of years have not spreads have tripled. ensure strong demand for its
are becoming pickier about the delivered on promises to bring “People were making 53BNûBONDûTOûlNANCEûITSû
DEALSûTHEYûWILLûlNANCEûANDûAREû leverage back down. assumptions about merger with healthcare insurer
asking for better terms when “It used to be the case where deleveraging, and then the Aetna, and Campbell was later
they participate. companies used to promise to bonds underperformed punished partly because it didn’t
2ECENTûBONDûSALESûFROMûCVS get their leverage from M&A when things didn’t play out as do the same.
and CAMPBELL SOUP show the down in two years,” said Tom EXPECTEDvûONEû$#-ûBANKERû CVS sold some of its nine-
buyside has become more Murphy, senior portfolio said. tranche deal at a discount, while
discerning. manager at Columbia “It’s logical to be a bit more still undertaking to buy those
The former was inundated Threadneedle. “Now it’s four to selective about some of these bonds back at 101 if the merger
with investor demand, but the lVEûYEARSv M&A stories.” did not happen.

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being placed into outright ûTHATûWASûWIPEDûOUTûWHENû

liquidation and that an
intermediary solution prior to
resolution such as a second debt
the lender failed last year.
More successfully, Bank of
#YPRUSûSOLDûAû#AAûRATEDûõMû
Pay to play as
RESTRUCTURINGûxûISûLESSûLIKELYvû
Fitch wrote in a note.
According to its presentation,
YEARûNON CALLûlVEûATûû
last January, drawing
€600m-plus in orders. That bond
rates stack up
the bank intends to sell the deal now yields around 6.65%. Bonds Widening Libor/OIS spread makes life tricky
before the end of the quarter - But Carige also has to deal
and it is coming to market with a political backdrop BY SHANKAR RAMAKRISHNAN its own effect on the market.
AGAINSTûAûSOMEWHATûDIFlCULTû following the recent elections h4HEûWIDENINGû,IBOR/)3ûSPREADû
backdrop for credit. that has left domestic investors Investment-grade borrowers in has effectively tightened
2ECENTû!DDITIONALû4IERûû “quite cautious” about Italian the US have had to adapt to a conditions by the equivalent of an
bonds from Santander and RISKûTHEûlRSTûBANKERûSAID new landscape in recent weeks, additional rate hike,” said analysts
#AIXA"ANKûAREûTRADINGûBELOWû Still, the day-to-day whims of with investors demanding more at Bank of America Merrill Lynch.
par, despite pricing with markets can be less relevant for compensation for risk than they Buyside demand has also been
roughly 50bp in concessions. restructuring stories such as did at the start of the year. affected by a variety of other
Despite its less subordinated Carige’s. Deals that were priced last factors.
format, Carige’s deal is also “I’d be more worried if they week averaged a new-issue 4AXûREFORMSûHAVEûENCOURAGEDû
lower rated than the €350m no- were looking for €500m,” said concession of almost 9.5bp, or corporates to repatriate overseas
grow perpetual non-call the second banker. “In general, roughly three times the going cash, diminishing the need to
lVE YEARû!4û" "ûBYû30&ITCH û the backdrop in Italy is not too rate in January before the current raise fresh debt.
that Spanish lender IBERCAJA negative. It becomes an risk-off attitude took hold. And as rates have ticked up, US
announced last Monday. idiosyncratic play. Do you like But since the beginning of the credit has become less appealing
Veneto Banca was among the Carige - or not?” year, Libor has spiked and its to foreign investors, who hold
last banks to sell a Triple C rated Credit Suisse, Deutsche Bank, JP spread over the overnight some 40% of US dollar bonds,
BONDûAûõMûû YEARûNON Morgan and UBS are bookrunners INDEXEDûSWAPSûRATEûHASûGAPPEDû according to data from Citigroup.
CALLûlVEû4IERûûINû.OVEMBERû on the deal. out – a key sign that short-term Matt King, senior analyst at
liquidity has been drying up. Citigroup, argues that the main
Combined with heightened driver of Japanese and other
geopolitical risks and the foreign investors’ hedge costs is
Campbell also offered a so- it sold in July to pay for the EXPECTEDûSCHEDULEûOFû&EDERALû not the cross-currency basis but
called special mandatory acquisition, and had to 2ESERVEûRATEûHIKESûTHEûMOVESû the difference in short rates.
redemption clause, but not at a UNDERTAKEûANûEXCHANGEûONû have nudged investors to “Even if current Libor and
discount or with CVS’s generous some euro-dominated debt demand more when high-grade basis pressures were to subside
pricing. THATûALSOûlNANCEDûTHEûDEALû deals hit the market. rather than to increase, further
If the takeover doesn’t go At the same time, the US Fed rate hikes seem likely to
through, that will prove Treasury has unleashed heavy DRIVEûHEDGEûCOSTSûUPvûHEûTOLDû)&2
“People were making
costly. issuance, which has further “In the case of Japanese
assumptions about “The AT&T trial is very absorbed cash that might investors, [that’s] from around
deleveraging, and important to the M&A otherwise get put to work in the ûNOWûTOûOVERûûBYûYEAR ENDû
then the bonds landscape going forward,” Matt corporate primary. This consumes almost all of the
underperformed Brill, senior portfolio manager -UCHûOFûTHEûEXPECTEDû yield on all but the lowest-
when things didn’t ATû)NVESCOûTOLDû)&2 53BNûTOû53BNûINûû quality dollar investments.”
“If a deal goes forward, we’ll Treasury issuance has already Moreover, said BNPP’s High, the
play out as expected” see a pick-up in M&A activity, been printed so far this quarter. ,IBOR/)3ûSPREADûISûUNLIKELYûTOûSEEûAû
particularly in the TMT space. If “The overriding catalyst for SIGNIlCANTûREDUCTIONûFORûAûWHILEûASû
not, it could serve as a warning the widening of spreads between it will take the Treasury time to
sign to other potential acquirers ,IBORûANDûOVERNIGHTûINDEXEDû normalise its balance sheet after
President Trump’s decision and really limit the amount of swaps has been the dramatic the recent spate of issuance.
to block BROADCOM’s planned M&A in the space.” increase in the net level of In the meantime, corporate
US$117bn takeover of In turn, it has become more issuance of Treasury bills,” said borrowers have had either to
Qualcomm on national DIFlCULTûFORûBANKERSûTOûKNOWû Timothy High, US interest rate postpone issuance plans or pay
security grounds earlier this when to pull the trigger on strategist at BNP Paribas. up to get deals done.
month, and pushback on AT&T’s lNANCINGS “This spate of supply has “Issuers are advised to be
US$85bn acquisition of Time “People have seen what crowded out the bank more tactical and pragmatic
Warner, have also added to the happened to AT&T and the commercial paper market, when considering issuing in this
sense of hesitancy about new recent actions by the pushing these yields higher to environment,” said Peter
M&A deals. administration, and instead of attract investors and shifting Aherne, head of North America
4HEû*USTICEû$EPARTMENTûlLEDû lNANCINGûFOURûTOûlVEûMONTHSû some demand towards the capital markets, syndicate and
a lawsuit in November to stop before closing, they are interbank lending market.” new products at Citigroup.
the latter deal, and a trial began waiting,” said the DCM banker. Even after the US Federal “Demand dynamics have
last week. “There could be a big M&A 2ESERVESûDECISIONûTOûRAISEûRATESû changed, and volatility is likely
AT&T has been paying calendar all coming at once, or by a quarter of a point last week to be a prevailing theme in the
INTERESTûONûTHEû53BNûBONDSû nothing at all.” THEû,IBOR/)3ûDYNAMICûISûHAVINGû near-to-intermediate term.”

Top news
HKBN hits redial with tighter loan

Loans Telecom operator’s latest refinancing targets yield-starved lenders
BY PRAKASH CHAKRAVARTI, liquidity and we don’t have based on an interest margin of 0%ûlRMSûANDûLEDûTOûMULTI BILLIONû
EVELYNN LIN many other choices. We would 65bp over Hibor. DOLLARû,"/ûLOANS
like to book the assets in the Meanwhile, HKBN had
(ONGû+ONGSûLEVERAGEDûlNANCEû lRSTûHALFûOFûTHISûYEARûTOûMEETûOURû PUSHING IT already notched up more than
market is on a roll, with local target returns,” said a Hong Still, some bankers believe ûSUBSCRIBERSûTOûITSû
broadband and telecoms Kong-based senior banker at a HKBN is pushing pricing too far mobile services as of last July
services provider HKBN the latest 4AIWANESEûBANKûANûEXISTINGû this time. They are wary of since launching 10 months
borrower to take advantage of lender to HKBN. HKBN’s business prospects in an earlier.
lenders’ seemingly insatiable HKBN has been down the ultra-competitive sector Its latest deal will add to the
appetite for high-yielding RElNANCINGûROADûBEFOREûSINCEû requiring frequent capital MANYûLEVERAGEDûlNANCINGSûINû
lNANCINGS PRIVATE EQUITYûlRMû#6#û!SIAû EXPENDITURE Hong Kong in recent months.
Just over a year after agreeing 0ACIlCûlRSTûACQUIREDûITûFROMû “The competitive landscape in They include a HK$13.8bn
TOûAû(+BNûlVE YEARûBULLETû Hong Kong Television Network, Hong Kong’s telecom sector is three-year bullet loan
LOANûINû.OVEMBERûû(+".û formerly City Telecom (Hong GETTINGûlERCERûANDûTHEûCHALLENGEû supporting the buyout of
is seeking an amendment and +ONG ûFORû(+BNûINûû FORûOPERATORSûISûTOûlNDûNEWûWAYSû commercial properties of Link
EXTENSIONûTOûCUTûTHEûINTERESTû 4HEû(+BNûDEBTûSUPPORTINGû to diversify revenues, while 2EALû%STATEû)NVESTMENTû4RUSTûAû
margin and lengthen the tenor. the leveraged buyout was constantly upgrading their HK$16bn three-year senior loan
BNP Paribas is coordinating the RElNANCEDûTWICEûTHROUGHûAû networks and offerings to keep PARTIALLYûlNANCINGûAûCONSORTIUMû
EXERCISE bond and a loan before HKBN up pace with evolving of investors buying Hong Kong
HKBN aims to reduce its listed on the Hong Kong stock technologies,” said one leveraged skyscraper The Center and a
interest margin to 105bp over EXCHANGEûINû-ARCHûûANDû lNANCEûBANKERûINû3INGAPORE 53MûlVE YEARûlNANCINGû
Libor, based on its total net then completed the HK$4.1bn HKBN acquired the BACKINGû!FlNITYû%QUITYû
leverage of 3.38 times as of LOANûINû.OVEMBERû telecommunications and online Partners’ purchase of a majority
August 31 last year, from 135bp /NûEACHûRElNANCINGû(+".û marketing solutions businesses stake in garment label maker
ONûTHEûûLOANûBASEDûONû has managed to win favourable OFû.EWû7ORLDû4ELEPHONEûINûû Trimco International Holdings.
gearing of around 3.30 times. terms from lenders looking for and made an aggressive bid a few Those three loans offer much
4HEûMATURITYûWILLûBEûEXTENDEDû richer yields than their usual months later for Wharf T&T, the more generous pricing than the
by around 18 months for staple of tightly priced loans telecom business of Wharf ONEûFORû(+".û,INKû2%)4Sû
EXISTINGûLENDERSûWHOûAGREEûTOû from high-grade borrowers, Holdings. Last year, HKBN also borrowing pays a top-level all-in
ROLLûOVERûTHEIRûEXPOSURE such as property sector credits. entered the fray for Hutchison PRICINGûOFûBPûBASEDûONûANû
HKBN’s ability to push for Earlier this month, Hong Global Communications, the interest margin of 185bp over
improved terms so soon Kong real-estate giant SUN HUNG lXED LINEûUNITûOFû,Iû+A SHINGSû Hibor in senior syndication,
underlines the depth of demand KAI PROPERTIES more than Hutchison Telecommunications while The Center’s new owners
for higher-margin assets among QUADRUPLEDûAûSELF ARRANGEDûlVE Hong Kong. sweetened terms on the loan
lenders looking to boost their YEARûRElNANCINGûTOû(+BNû HKBN lost out in the race for last month and now offer an
returns. from a HK$5bn target after Wharf T&T and withdrew early interest margin of 160bp over
“We still have interest in attracting 16 banks. The loan from the bidding for HGC. Both Hibor. Trimco’s loan pays all-in
LENDINGûASûWEûFACEûEXCESSû offered an all-in pricing of 75bp, targets ended up in the hands of pricing in the high 300s.
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People
12
&
Brexit could
cause Europe’s
Markets
13 Deutsche
Bank’s 18 JP Morgan’s
purchase of
capital markets investment bank Bear Stearns 10 years
revenue to shrink, faces a €450m hit ago was described
Morgan Stanley from a strong euro by one official as
president Colm and higher internal “the robbery of the
Kelleher warns funding costs decade”
FRONT STORY STRATEGY
Activist Sherborne snaps up 5% of Barclays

Adds to pressure on CEO Staley to revive investment bank
SHERBORNE INVESTORS, a specialist fund led by Analysts at KBW called Barclays the UNDERVALUED?
activist investor Edward Bramson, has perfect activist target. “In our opinion, there Barclays shares have fallen 8% in the past
bought voting control of 5.2% of BARCLAYS, is clearly substantial opportunity for YEARûUNDERPERFORMINGûAûmATû%UROPEANûSHAREû
ramping up pressure on the British bank to shareholder value creation from a change in sector and leaving the stock trading at more
turn around its fortunes. DIRECTIONvûTHEYûSAIDûINûAûRESEARCHûNOTE than 30% below book value.
Activist investors have become a growing News of the stake sent Barclays shares up Staley took over as CEO in December 2015.
THREATûFORûLARGEûLISTEDûlRMSûASûTHEYûCANûUSEû more than 5% but the rally faded and the He has eliminated 56,000 jobs and slashed
minority stakes to push through major stock was back at 203p by midday on Friday, £95bn of risk-weighted assets and Barclays
changes in strategy or on the board. down 3% on the week. has cut £6bn of annual costs since 2013. But
Barclays could face renewed calls to sell or The Barclays stake has been bought by PROlTABILITYûHASûREMAINEDûDEPRESSEDûBYûLOWû
spin off its investment bank if Sherborne Sherborne Investors (Guernsey) C Limited, a interest rates, weak trading revenues and
takes an aggressive approach or the business specialist fund that raised £700m in July last tougher capital regulations.
fails to improve its performance by the end YEARû3HARESûINûTHEûFUNDûWEREûmATûOVERûTHEûWEEK Staley told analysts and investors at a
of this year, bankers said. There has been The prospectus for that fundraising said CONFERENCEûLASTûWEEKûHEûWASûCONlDENTûAû
speculation in the past Barclays could proceeds would be invested in a public restructured Barclays was now well
achieve a better valuation of its investment company that Sherborne considered “to be positioned to “generate attractive and
bank by separately listing it in New York. undervalued as a result of operational DISTRIBUTABLEûRETURNSv
Chief executive Jes Staley was already DElCIENCIESvûTHATûCANûBEûRECTIlEDûBYû He said trading revenues at the start of
under pressure to improve Barclays’ returns, Sherborne’s active involvement. ûWEREûUPûFROMûTHEûDECENTûlRSTûQUARTERû
especially at its investment bank. After years “Accordingly, the investment will not be of 2017. The banking business was also
of cost-cutting and disposing of non-core PASSIVEvûITûSAIDûINûTHEûPROSPECTUS winning major mandates, including as M&A
assets investors say they want to see evidence )TûHADûNOTûIDENTIlEDûTHEûTARGETûATûTHATûSTAGEû adviser to CVS Health and leading its
of improvement by the end of this year. and the prospectus said the investment was US$40bn M&A bond issue this month.
Sherborne, which describes itself as “a likely to be for at least one year. The average “Based on what we’re already seeing then,
TURNAROUNDûINVESTMENTûlRMvûHASûBEENû holding period for Sherborne’s four previous I’m increasingly positive that we’ll be able to
building its Barclays stake since late 2017 – UK turnarounds has been 28 months. deliver demonstrably improved performance
potentially buying in at under 200 pence per in the corporate and investment bank over
share. ROE: MIND THE GAP THEûNEXTûTWOûYEARSvû3TALEYûSAID
It has had meetings with the bank’s RETURN ON EQUITY FOR INVESTMENT BANKS Sherborne, which is based in New York,
investor relations team but has not met % HASûPREVIOUSLYûTARGETEDû5+ûlNANCIALûlRMSû
management or board members and has not 18 3i, F&C Asset Management, and Electra with
MADEûSPECIlCûREQUESTSûFORûAûCHANGEûINû 16 ACTIVISTûCAMPAIGNSû)TûFORCEDû%LECTRAûTOûlREû
strategy or a seat on the board, people 14 its management team.
familiar with the matter said. 12 Sherborne’s website says it concentrates
10
It has spent £580m on its Barclays its activities as a minority shareholder in
8
position. It owns 1.94% in shares, and a PUBLICLYûQUOTEDûCOMPANIESûANDûhBYûOFFERINGû
6
further 3.21% via derivatives, notably OURûPARTICIPATIONûONûTHEûBOARDvûRATHERûTHANû
4
contracts for difference. 2
seeking majority ownership or control of a
“As with all its shareholders, Barclays will 0 target. Bramson co-founded New York-based
Barc DB JPM GS MS
continue to engage with Sherborne, and CIB CIB CIB
Hillside Capital in 1977 and founded
WELCOMESûTHEMûASûAûSHAREHOLDERvû"ARCLAYSû 2016 2017 Sherborne in 1986.
said after the disclosure of the holding. Source: Company results; figures may not directly compare Steve Slater

h)ûSTARTEDûLOOKINGûATûTHISûTHROUGHûAûlNANCEûGUYSûEYESû
ANDûSAWûTHATûMAYBEûTHEREûWASûSOMETHINGûGOINGûONûHEREv
FORMER BANKER DEREK PETERSON, NOW CEO OF MEDICAL MARIJUANA FIRM TERRA TECH CORP, P20
Brexit may shrink Europe revenues, MS chief warns

Europe’s capital markets revenue is set to ADDûûJOBSûINû0ARISûAFTERû"REXITû2EUTERSû CANNOTûBEûBYûDElNITIONvû+ELLEHERûSAID
shrink as a result of Brexit, MORGAN STANLEY reported last week. But there have been comments from US
president Colm Kelleher warned this week. Kelleher said regulators in Europe were Fed chairman Jerome Powell, top Fed bank
Kelleher said he was less worried about being more conservative as they assess the REGULATORû2ANDALû1UARLESûANDû3%#ûCHAIRMANû
competition in Europe than the size of the impact of Brexit. “My experience of Jay Clayton, among others that suggest some
region’s revenues available for banks to regulators is that when things are uncertain regulatory relief may be forthcoming.
share once Britain leaves the European they stay very prudent, and I think that is “They’ve said duplication of regulations
Union in March 2019. THEûENVIRONMENTûINû%UROPEûATûTHEûMOMENTv has caused constraints and heaviness of
“My big concern will be that when Brexit The US regulatory landscape is more touch is something that needs to be reversed
actually happens and you end up moving positive, although Kelleher said banks need SOMEWHATvû+ELLEHERûSAID
people back and forth, the sum of the parts TOûlRSTûGETûTHROUGHûAûTOUGHûSTRESSûTESTû !SûAûRESULTûCHANGESûCOULDûlLTERûTHROUGHû
– ie, what goes on in the EU plus what goes known as comprehensive capital analysis FROMûhSUPERVISORYûTOUCHvûRATHERûTHANûFROMû
on in the UK – my guess is that will be less ANDûREVIEWû##!2 ûWHICHûCOULDûLIMITûTHEû changes in legislation. This could include
THANûWHATûWASûGOINGûONûBEFOREvû+ELLEHERû amount of shares banks can buy back. CHANGESûINûDElNITIONûOFûLEVERAGEûRATIOSû
told investors on Tuesday at a Morgan ##!2ûWILLûAPPLYûASSUMPTIONSûINCLUDINGû53û LIQUIDITYûRULESûANDûTHEû##!2ûPROCESSûHEûSAID
Stanley conference in London. UNEMPLOYMENTûJUMPINGûTOûûANûEQUITYû
“Let’s not forget Europe, and London in market sell-off and a steepening Treasury yield GOING ELECTRONIC
particular, got a massive dividend out of the US curve. Banks need to submit results and capital In a wide-ranging discussion, Kelleher said he
when Sarbanes-Oxley was applied, and what PLANSûTOûTHEû53û&EDERALû2ESERVEûBYû!PRILûûANDû was looking forward to technology shaking
YOUREûGOINGûTOûSEEûISûSOMEûREVERSALûOFûTHATvûHEû results will be released by the end of June. up bond trading, among other areas.
said, referring to US regulatory changes in 2002. “This is a very hard test … so we’ll have to h7EûCANTûWAITûFORûlXEDûINCOMEûTOûGOû
h3Oû)ûTHINKû%UROPEûWILLûBEûAûSMALLERûPLACEv get through this. That will have implications ELECTRONICûWEûDONTûSEEûITûASûAûTHREATvûHEûSAID
Morgan Stanley is planning to transfer for people’s buyback programmes; they will %QUITIESûTRADINGûHASûSHIFTEDûTOûELECTRONICû
about 200 people to Frankfurt and could also not be like they were in previous years, they trading over the past 18 years and Kelleher
Investment banking lifts Jefferies in Q1 53MûINûTHEûlRSTûQUARTERûENDEDû&EBRUARYû

ûDOWNûûFROMûTHEûYEAR AGOûQUARTER
JEFFERIES was not able to capitalise on the same. CREDIT SUISSE warned last week, however, “Activity in December and January was
VOLATILITYûTHATûRIVALSûSAYûSUPER CHARGEDûlXEDû that trading was strong until mid-February, but STRONGvûSAIDû*EFFERIESû#%/û2ICHû(ANDLER
income trading at the start of this year. then fell back (see story right). 2EVENUEûFROMûEQUITYûTRADINGûWASû
Trading revenue for the independent Analysts have been raising their 53MûmATûCOMPAREDûWITHûTHEûYEARûAGO
INVESTMENTûBANKûFELLûABOUTûûINûITSûlRSTû expectations for trading revenue by roughly h6OLUMESûDURINGûTHEûlRSTûHALFûOFû&EBRUARYû
QUARTERûCOVERINGû$ECEMBERûTOû&EBRUARYû 5% as the period comes to a close. were more muted in a period of increased
Although Jefferies often offers a peek at the $ESPITEûTHEûDIPû*EFFERIESûlRST QUARTERû VOLATILITYûFOLLOWINGûAûSELL OFFûINûTHEûGLOBALûEQUITYû
direction of results for its larger rivals, PERFORMANCEûWASûRELATIVELYûSOLIDû4HEûlRMûISû MARKETSvû(ANDLERûSAIDû3OûFARûINû-ARCHûEQUITYû
which report on a standard calendar, other STILLûlGHTINGûGHOSTSûOFûPASTûDISASTROUSû secondary activity has returned to levels the
banks have been giving more upbeat TRADINGûQUARTERSûANDûITSûlRSTûQUARTERûAûYEARû bank experienced in December and January.
ASSESSMENTSûONûTHEûQUARTER ago was strong, making for a tough
JP MORGAN has said it is expecting markets comparison. ECM REBOUND
revenue could be up in the middle to high single- 4HEûBANKûREPORTEDûREVENUEûFROMûlXEDû Investment banking outperformed
digits, and CITIGROUP said it expects roughly the income, commodity and currency trading of markets again at Jefferies, led by a strong
Who’s moving where…

CREDIT SUISSE has previously head of UK brokerage firm previous collaboration
promoted Joe Lai to Greater China real PEEL HUNT has hired with debt advisory
co-head of China estate and industrials, Scott Beattie (left) firm JC Rathbone
investment banking a position he retains from Oppenheimer Associates – the two
and capital markets. following his Europe as head of firms will collaborate
Lai becomes co-head promotion. He will debt capital markets. on potential DCM
alongside Honggui Li, remain based in Hong It has also hired David deals in future on a
who moved from UBS Kong. Kent from case-by-case basis.
in 2016 to become Oppenheimer Europe Beattie was European
China IBCM head. Lai and Stuart Galvin from head of DCM at
joined Credit Suisse in Cenkos Securities. Oppenheimer Europe.
2014 from Deutsche Peel Hunt said the
Bank and was hires replace its

People
& Markets
SAIDûûOFûEQUITYûTRADINGûINûTHEû53ûISûNOWû
electronic and in Europe it’s about 87%. A
Deutsche Bank sees US$550m
majority of bond trading volume is still done
by phone or over a messaging system.
Q1 impact from euro, funding
h)NûûWHENûEQUITIESûWENTûELECTRONICûTHEû A strong euro and higher internal funding dollars or linked to the US currency, von
bid/offer did get crushed, but we got 15 times the costs will have a €450m (US$553m) impact Moltke said when explaining the negative
volume. So we can’t wait for technology to kick on DEUTSCHE BANKûINûTHEûlRSTûQUARTERûTHEû currency effect of a stronger euro.
INûINûlXEDûINCOMEûSOûWEûCANûTAKEûADVANTAGEûOFû 'ERMANûLENDERSûlNANCEûCHIEFûSAID The euro is currently worth US$1.23,
THATûANDûREDUCEûREDUNDANTûCOSTSvûHEûSAID CFO James von Moltke said a stronger compared with about US$1.06 a year ago.
Kelleher echoed comments from some euro was turning out to be a €300m drag on Other European banks active in the United
bank executives that trading revenues had the investment bank, while the impact of States, including Barclays, have also said
been good so far this year, though he was changes to how internal funding costs are THEYûFACEûAûCURRENCYûHEADWINDûINûTHEûlRSTû
cautious about predicting it would be up calculated will add an additional €150m hit. QUARTERûDUEûTOûTHEûWEAKû53ûDOLLAR
FROMûAûSTRONGûlRSTûQUARTERûOFû “We do have a headwind on a year-on-
v1ûWILLûPROBABLYûBEûASûSTRONGûASû1ûOFûLASTû year comparison before you get to business “FEBRUARY WAS STRANGE”
YEARûROUGHLYûACROSSûTHEû3TREETvû+ELLEHERûSAID PERFORMANCEûOFûABOUTûõMvûVONû-OLTKEû CREDIT SUISSE’s global markets net revenues
h,ASTûYEARûTHEûlRSTûQUARTERûWASûVERYû said at an investor conference in London. were comparable with last year in US dollar
STRONGûTHISûYEARûTHEûlRSTûQUARTERûISûSTRONGû The comments signalled Deutsche would terms, CEO Tidjane Thiam said at the same
We’ve had a pick-up in revenues from a very again lag behind rivals in its reported conference in London last week. But he
DEPRESSEDûFOURTHûQUARTERûANDûTHEREûCLEARLYû REVENUEûPERFORMANCEûINûTHEûlRSTûQUARTERû said revenues had weakened since mid-
AREûSTRUCTURALûTAILWINDSûINûPLACEv Executives at several rivals have said February.
Long-term positives include the TRADINGûHASûPICKEDûUPûANDûSHOULDûBEûmATûORû In fact, Thiam went further and showed
WITHDRAWALûFROMûQUANTITATIVEûEASINGûANDûAû SLIGHTLYûUPûONûAûSTRONGûlRSTûQUARTERûOFû a graph of Credit Suisse’s weekly trading
pick-up in market volatility, but Kelleher Deutsche Bank shares tumbled 11% in performance. Up to mid-February, weekly
said it was too early to know if they would the three days after the comments to as low net revenues were well up on a year ago,
buoy trading through the year. as €11 apiece, their lowest level since but they slumped in the following two
Steve Slater November 2016. weeks and after that were similar to a year
Corporate and investment bank ago, the chart showed.
REVENUESûINûTHEûlRSTûQUARTERûWEREûEXPECTEDû “January was a strong month, February
REBOUNDûINûEQUITYûCAPITALûMARKETS TOûBEûõBNûmATûFROMûAûYEARûEARLIERû was strange and March is a bit all over the
h/URûINVESTMENTûBANKINGûRESULTSûREmECTûAû according to the average of 10 analysts PLACEvû4HIAMûWASûREPORTEDûASûSAYINGûATûTHEû
GOODûNEW ISSUEûEQUITYûANDûDEBTû polled before von Moltke’s comments. event when describing trading conditions.
ENVIRONMENTvû(ANDLERûSAID Deutsche Bank has posted three But in contrast to euro and sterling, the
The bank reported ECM revenue of consecutive years of losses, including a Swiss franc has weakened against the
NEARLYû53MûINûTHEûQUARTERûUPûûFROMû õMûDElCITûLASTûYEARû"UTûITûLASTûWEEKûALSOû dollar in the past year, so that should
AûYEARûEARLIERû2EVENUEûFROMûDEBTû expressed cautious optimism about 2018 provide more of a tailwind to reported
underwriting was up 4% at US$169m. and said it was aiming to deliver a net results.
2EVENUEûFROMû-!ûADVISORYûWASûALSOûUPûû PROlTûANDûAûCOMPETITIVEûDIVIDENDûPAYOUTûINû Thiam said there had been strong
at US$191m. 2018. performances in International Trading
Jefferies reported overall revenues of 6ONû-OLTKEûSAIDûTHEûlRSTûQUARTERûOFûLASTû Solutions – the collaboration to sell more
US$821m, up 3% on a year ago. It made a net year was a strong one, complicating the trading products to wealth management
loss of US$61m after a one-time charge of PICTUREûWHENûCOMPARINGûTHEûlRSTûQUARTERû CLIENTSûnûANDûEQUITYûDERIVATIVESû&IXEDû
US$164m related to changes in the US tax of this year. INCOMEûHADûBEENûRESILIENTûANDûEQUITYû
system. Some 40% of the revenue base of Deutsche underwriting activity was lower.
Philip Scipio Bank’s investment bank is denominated in Steve Slater, Tom Sims
Please contact us if you have information about job moves: [email protected]
LAZARD has named for economic and Veteran US ECM industrial origination.
Corso Bavagnoli as a financial affairs in the banker Frank Maturo is He made the transition
managing director in cabinet of then prime calling it quits. Maturo to Bank of America
its financial advisory minister Francois is retiring as vice- Merrill Lynch in 2009,
group based in Paris. Fillon. He also headed chairman of ECM at moving to co-head of
Bavagnoli was most several offices at the UBS at the end of Americas ECM, before
recently an assistant French Shareholding March, ending a 34- joining UBS in 2015.
secretary for the Agency and the French year career. After
financial sector at the Treasury between starting his career at
French Treasury, a 2005 and 2009. Salomon Brothers in
position he had held 1984, Maturo moved to
since 2015. He was Merrill Lynch in 1999 to
previously an adviser oversee TMT and later

Bellwether
Bellwether: n. From the practice of placing a bell around the 4(%û#!-0!)'.û&/2ûDIVERSITYûANDûGENDERûEQUALITYûLASTûWEEKû
neck of a castrated ram so that it might lead its flock GOTûAûSTARKûREMINDERûOFûWHATûWOMENûAREûlGHTINGûINûTHEû
WORLDûOFûlNANCEû)NûAûSPEECHûTOûTHEû7OMENûINû&INANCEû
3/54(û+/2%!.û+ 0/0ûSENSATIONû2EDû6ELVETûTOOKûAûBREAKû Summit, Megan Butler, one of the most senior executives
from entertaining their fanatical teenage fan base to ATû"RITAINSûlNANCIALûREGULATORûSAIDûTHEû0RESIDENTSû#LUBû
perform for an audience old enough to be their parents dinner was not the only recent event to show there was
as they took top billing at the Credit Agricole Asian much to do.
investment conference. “One of our female supervisors was recently referred
The four-day event began on March 20 and as if to as ‘little lady’ by a senior leader from one of the UK’s
trying to entertain a roomful of bankers staring at BIGGESTûBANKSvû"UTLERûSAID
THEIRûPHONESûWASNTûTOUGHûENOUGHû2EDû6ELVETûMAYû She did not name names. But you know who you are.
have felt out of place on a bill that also included
2EIBUSû0RINCEûTHEûFORMERûCHIEFûOFûSTAFFûOFû53ûPRESIDENTû 7)4(û302).'û&).!,,9 arriving, many of us regard getting
Donald Trump, and Standard Chartered CEO Bill through winter as a challenge in itself, but while
Winters. Bellwether was cowering from the Beast from the East,
But if they thought that was a tough crowd, they bankers from JP Morgan and HSBC were involved in a
ain’t seen nothing yet: their next stop is Pyongyang genuinely awesome winter endurance event.
in North Korea, where they will play two gigs specially They were part of a 28-strong team that completed the
organised “to continue the goodwill established Everest in the Alps Challenge – an uphill ski-touring event
between the two nations during the Pyeongchang spanning four days in which they climbed 8,488m, the
/LYMPICSvû&INGERSûCROSSEDûTHEYûDOûAûGREATûJOBûANDûKEEPû height of Mount Everest, in temperatures that plummeted
the peace. If not, Winter’s coming – and this time it’s as low as minus 34 degrees Celsius.
not Bill. 4HEûTEAMSûINSPIRATIONûISû4OBYû2ITCHIEûSONûOFû2OBERTû
4HISûISNTûTHEûlRSTûTIMEû+ 0OPûORû+OREANûPOPûTOûTHEû 2ITCHIEûnûTHEûHEADûOFû5+ûINVESTMENTûBANKINGûATû(3"#
uninitiated) has been used as a way to attract investors. Toby was diagnosed with a tumour in his brainstem
Earlier this year Dennis Ip, a power sector analyst at AGEDûlVEûANDûHASûSHOWNûINCREDIBLEûCOURAGEûDURINGûHISû
Daiwa Capital Markets, inexplicably posted a picture of various treatments.
himself dancing to a song by South Korean boy band Big The challenge is raising money for The Everest Centre
Bang in order to get votes in the annual Institutional FORû2ESEARCHûINTOû0AEDIATRICû,OWû'RADEû"RAINû4UMOURSû
Investor survey. a new £5m research centre that aims to develop
Have markets got so frothy that investors are now improved and safer treatments for children. The team is
behaving like X-Factor judges, throwing cash at novelty closing in on raising £1m through this event. For more
turns? And when the markets crash, will Ip, like Chuck information, go to https://www.everestinthealps.com.
Prince a decade ago, still be dancing? Huge congratulations to everyone involved.
Who’s moving where…

CITIGROUP has with BAML. She has Chris Marschall has (Asia Pacific) as well as Investment firm 2015, after which the
rehired Michela Ferrulli previously worked at been appointed head Olivier Jacquet, global CERBERUS CAPITAL Bank of Italy appointed
as head of equities JP Morgan and Daiwa of equity capital head of ECM. MANAGEMENT has him as chairman of
sales and sales trading Securities. Ferrulli will markets for Asia Pacific Marschall moved from hired veteran Italian four small banks
for Central and Eastern be based in London at CREDIT AGRICOLE CIMB Securities, where banker Roberto rescued from
Europe and the Middle and report to Mark corporate and he was most recently Nicastro as senior bankruptcy and put up
East. Ferrulli worked Robinson, head of cash investment bank. head of ECM and adviser as it targets for sale.
for Citigroup from equities for EMEA. Hong Kong-based equity syndicate for opportunities in the
2001 until 2012 in Marschall will report to North Asia. He was European banking
EMEA and Latin Aurelien Lasjunies and with CIMB between sector. Nicastro was
America sales, and Keisuke Kasagi, co- 2012 and 2017. group general
since then has spent heads of global manager at Italy’s
almost seven years investment banking UniCredit from 2010 to

People
& Markets
Blackstone’s GSO co-founder Smith to leave firm
Tripp Smith, one of the three co-founders of BEINGûACQUIREDûBYû"LACKSTONEûINû FOOTBALLûCLUBû7ESTû(AMû5NITEDû2EPORTSûINû
BLACKSTONE’s credit unit GSO, plans to leave Douglas Ostrover, who created GSO with September said he had bought the stake
the alternative asset manager to pursue Smith and Goodman in 2005, left Blackstone in from CB Holding, an Icelandic group. West
other opportunities, according to an ûTOûHELPûCREATEû/WLû2OCKû#APITALû0ARTNERSû (AMûDIDûNOTûRETURNûREQUESTSûFORûCOMMENT
INTERNALûMEMOûSEENûBYû)&2 a direct lender to middle-market companies. As part of GSO’s succession plan, Dwight
3MITHûWILLûREMAINûWITHûTHEûlRMûUNTILû “I remain fully committed to GSO as its Scott was promoted to president of the
June 30 to ensure a smooth transition of his chairman, as well as to Blackstone, and business almost a year ago, assuming
responsibilities, GSO chairman Bennett intend to focus my time on important oversight over the unit’s day-to-day
Goodman said in the memo. strategic initiatives, investment committees activities.
Smith’s departure will leave Goodman as ANDûDEALINGûWITHû,0ûRELATEDûMATTERSvû Blackstone has agreed to buy a 55% stake
the only co-founder still at the helm of the Goodman wrote in the memo. INûTHEû4HOMSONû2EUTERSû&INANCIALûû2ISKû
alternative credit platform, which has Smith is reported to have last year bought UNITûWHICHûINCLUDESû)&2
grown to manage US$138bn in assets after a 10% stake in English Premier League Davide Scigliuzzo
UKFI chief Holbourn to leave deputy chairman of UKGI and will remain
ACTIVELYûINVOLVEDûINûTHEû2"3ûSELLDOWNûSTRATEGYû
Oliver Holbourn, the banker who disposed of He joined UKFI from Bank of America Merrill Leigh-Pemberton joined UKFI in 2013 from Credit
the UK government’s stake in Lloyds Lynch, where he spent 13 years, including as Suisse, where he was UK CEO and was previously
Banking Group, is to shortly step down from HEADûOFûEQUITYûSYNDICATEûFORû%UROPEûANDûHEADûOFû head of investment banking in Europe.
his role with the government body. 5+ûEQUITYûCAPITALûMARKETSûORIGINATIONû(EûCOULDû Britain sold its last shares in Lloyds last
Holbourn is to leave as chief executive of not be reached for comment. YEARûSELLINGûTHEûSTAKEûATûAûPROlT
UK FINANCIAL INVESTMENTS in the coming UKFI is being folded into a wider body called "UTûITûFACESûAûBIGûLOSSûONûITSû2"3ûHOLDINGû4HEû
months, a spokesman for UKFI said. UK Government Investments at the end of this GOVERNMENTûSOLDûAûaBNûSTAKEûINû2"3ûATûAûLOSSû
Holbourn was appointed UKFI’s CEO in April month, which will make the role of UKFI CEO in 2015, but still owns 72% of the bank. Further
2016 after joining in 2013 as head of capital redundant. UKGI brings together UKFI and the SALESûAREûNOTûEXPECTEDûUNTILûAFTERû2"3ûREACHESûAû
markets. In both roles he helped set the strategy Shareholder Executive and advises and settlement with the US Department of Justice
and implement the sale of the government’s handles asset sales and major corporate over the past mis-selling of mortgage-backed
STAKESûINû,LOYDSûANDû2OYALû"ANKûOFû3COTLAND lNANCEûMATTERSûFORûTHEû5+ûGOVERNMENT securities, which is expected to result in a
Holbourn is expected to return to a role in James Leigh-Pemberton, the former MULTI BILLIONûDOLLARûlNEûFORûTHEûBANK
the City. investment banker who chairs UKFI, is also Steve Slater
Three Credit Suisse bankers leave in LatAm rejig

Three bankers have left CREDIT SUISSE as part trading group that sits under its spent 13 years at Citigroup, according to his
of a reorganisation of the bank’s emerging international trading solutions unit, the Finra registration statement.
markets trading business, a source familiar source said. Separately in Europe, two debt capital
WITHûTHEûMATTERûTOLDû)&2 John Azzara, a veteran of emerging market markets bankers – Vitaliy Krekhovetskyy and
The departures are related to the Swiss sales, is among those departing, according Giuseppe Cosulich – have been put at risk of
bank’s decision to combine its Latin to the source. redundancy, the source said.
America hard currency bond trading He joined Credit Suisse less than a year Credit Suisse declined to comment.
desk with the emerging markets ago from Cantor Fitzgerald and prior to that Davide Scigliuzzo
Please contact us if you have information about job moves: [email protected]
Joe Reece, head of STANDARD services company. DEUTSCHE BANK WESTPAC has who stepped down at
corporate client CHARTERED has Simon Cooper, CEO for has named Lok Yim appointed Michael the end of last year.
solutions for the reorganised reporting corporate and chief country officer for Correa general manager Correa joined Westpac
Americas at UBS, is lines for its commercial institutional banking, Hong Kong. Yim for Asia Pacific. Based in in 2011 and was most
leaving the Swiss banking and private will assume oversight replaces Peter Lo, who Singapore, he will recently head of
lender after just four banking businesses of the commercial is retiring, and will oversee all of Westpac’s corporate and
months in the role. after Anna Marrs quit banking division, report to Werner business operations in institutional distribution
UBS has appointed as CEO of the business effective immediately. Steinmueller, CEO for Asia and report to Lyn and origination for
Sam Kendall to in south Asia. Marrs Asia Pacific. He Cobley, group executive financial markets, based
replace Reece on an will leave on remains head of for Westpac’s in Sydney. He previously
interim basis. Reece September 9 to return wealth management institutional banking spent 17 years with ANZ.
moved to the CCS role to London with for Asia Pacific. division. Correa replaces
in November. another financial Bala Swaminathan,

“January was a strong month, February was
STRANGEûANDû-ARCHûISûAûBITûALLûOVERûTHEûPLACEv
CREDIT SUISSE CEO TIDJANE THIAM, P13
Capital markets week ahead:

Chinese companies flock to US, Coty nears US$8bn
leveraged deal, HNA cashes in on Gategroup
ENTER THE DRAGONS It is a busy week in New business it bought only two years ago. HOTEL BOOKING Lemon Tree Hotels is
York for Chinese listings, with four IPOs set Gategroup will also raise additional primary TARGETINGûPROCEEDSûOFûASûMUCHûASû2SBNû
to raise US$3.5bn between them. Hotel chain proceeds to buy the remainder of Servair from (US$160m) from its IPO, which prices on
'REEN4REEû(OSPITALITYûISûlRSTûINûLINEû(AVINGû !IRû&RANCE +,-ûANDûTOûlLLûAûPENSIONûHOLE Wednesday. The Indian hotel operator had
ditched plans for an IPO seven years ago, it is planned on listing back in November, but
seeking US$350m to fund expansion. Video- had to delay its plans because of a hold-up in
streaming service Bilibili and OneSmart regulatory approval for the deal.
International Education follow on Tuesday. Shareholders, including Warburg Pincus
But the main event comes on Wednesday, AFlLIATEû-APLEWOODû)NVESTMENTûAREûUSINGû
WHENûVIDEO STREAMINGûSERVICEûI1IYIûHOPESûTOû the IPO to reduce their holdings.
raise US$2.4bn. That would make it the
biggest Chinese IPO in the US since the JUST THE MEDICINE Two US biotechnology
US$25bn listing of e-commerce giant Alibaba companies are launching their IPOs alongside
INûûI1IYIûWHICHûHASûABOUTûMûAVERAGEû each other on Wednesday. Homology
monthly active users, plans to use half the Medicines is targeting US$107m from the deal.
proceeds to expand and enhance content and THIS TIME IT’S DIFFERENT Banca Carige is The gene therapy specialist, which has raised
to strengthen technologies. expected to launch the sale of a Tier 2 bond, US$137m privately since 2015, has the
just months after holders of a previously backing of shareholders with interest in
issued Tier 2 debt were pushed into taking buying US$50m of shares. Unum Therapeutics
part in a bond exchange to avoid the is targeting just over US$80m from its IPO.
collapse of the lender. With its balance sheet
in better condition, the Italian bank is now BULL MARKET More Spanish Additional Tier
attempting to rebuild its subordinated debt 1 supply is on the cards from Ibercaja, which
stack. Will investors make it pay up? has mandated Barclays as structuring
adviser and joint lead manager for a €350m
SAFE AS HOUSES UK real estate investment trust NO GROWûPERPETUALûNONûCALLûlVE YEARû4HEû
Secure Income hopes to raise £315.5m in a DEALûEXPECTEDûTHISûWEEKûWILLûBEûTHEûlRSTû
placing that closes on Monday. The capital raise from Spain to be structured in a temporary
HAVING A MAKEOVER Coty will return to the WILLûPART lNANCEûTHEûaMûACQUISITIONûOFûTWOû writedown format. The bonds are expected
BONDûMARKETûFORûTHEûlRSTûTIMEûINûOVERûû off-market portfolios, and will help deleverage to be rated B-/B (S&P/Fitch).
YEARSûASûPARTûOFûEFFORTSûTOûRElNANCEû53BNû the trust’s balance sheet and reduce its cost of
of bank loans. The beauty products maker DEBTû4HEûBOARDûANDû2%)4ûMANAGERû0RESTBURYû ONE LUMP OR TWO Serbian sugar producer AEC
TOOKûONûSIGNIlCANTûDEBTûTWOûYEARSûAGOûTOû will be investing £5.25m at the placing price. !GRINVESTMENTûISûEXPECTEDûTOûLAUNCHûAûlVE YEARû
ACQUIREûSEVERALûBRANDSûFROMû0ROCTERûû euro bond, following meetings with investors to
Gamble, and is keen to bring debt costs TOY STORYû"RAZILIANûTOYûRETAILERû2Iû(APPYû market the sale last week. While the company’s
down. Commitments are due tomorrow for HOPESûTOûRAISEûASûMUCHûASû2Mû53M û main activities are sugar and crop production, it
THEû53BNûLOANûPIECEûOFûTHEûRElNANCING from its IPO on Tuesday. The Carlyle Group, ISûPARTûOFûAûDIVERSIlEDûGROUPûTHATûALSOûOPERATESû
which bought the chain in 2012, hopes to banking and hotel business. S&P has assigned a
FILLING UP Bahrain is set to revisit bond markets partially cash out through the deal. It might preliminary BB- rating to the issuer.
TOûBORROWûINûDOLLARSûASûTHEûKINGDOMûSEEKSûTOûlLLû have picked better timing though, coming in
a gaping budget hole – expected to be around the wake of the bankruptcy of US peer Toys
ûOFû'$0ûTHISûYEARûnûCAUSEDûBYûmAGGINGûOILû @2û5SûANDûAFTERû!MAZONûANNOUNCEDûPLANSûTOû LAST WEEK IN NUMBERS
prices. Five banks helped the country to sell increase its Brazilian presence. US$21 – Price per share of Dropbox at
US$3bn of bonds last September, including IPO, up from initial range of US$16–$18
US$1.25bn of 12-year notes, US$900m with a 30- 288bp – Spread between two-year US
year tenor and an US$850m Islamic bond. Treasuries and two-year Bunds, the
highest in 21 years
TAKING FLIGHT HNA hopes to pocket almost US$35.2bn – Orders for AB InBev’s six-
US$1.2bn from the IPO of Gategroup on part bond offering, which raised US$10bn
Monday. The cash-strapped Chinese 30% – Percentage of investors who think
CONGLOMERATEûWHICHûNEEDSûTOûlNDû53BNû a potential trade war is the biggest threat
to pay creditors before the end of the month, to markets
is selling out of the Swiss airline catering

People
& Markets
M&A races over US$1trn with mega-deals surge
Deal value for global M&A broke through FORû#ITIGROUPûh4HEûQUALITYûANDûSIZEûOFûTHEû There were 42 deals above US$5bn, up from
53TRNûINûTHEûlRSTûQUARTERûEVENûBEFOREûTHEû business, and the ambition of the clients is ûINûTHEûlRSTûQUARTERûOFûLASTûYEAR
sun set on March. It was the strongest start for very strong right now.
-!ûSINCEûûANDûPUTSûTHEûCURRENTûQUARTERû “It’s a function of synchronised growth, FRONT-LOADING?
ONûTRACKûTOûBEûTHEûBESTûlRSTûQUARTERûEVER money being available and relatively cheap. When Deloitte did its survey, volatility had
4HEûVALUEûOFûMERGERSûANDûACQUISITIONSû h%QUITYûVALUESûAREûREASONABLYûHIGHûBUTûTHATû not yet made its return and the Federal
through to March 21 was US$1.056trn, up is in a funny way driving a lot of the activity. 2ESERVEûHADûNOTûBEGUNûITSûMARCHûTOû
54% from the same period a year ago, There’s a lot of pressure on boards and CEOs normalise interest rates.
ACCORDINGûTOû4HOMSONû2EUTERSûDATA to keep delivering growth to sustain those !ûSHIFTûINûTHEûENVIRONMENTûINûTHEûlRSTû
4HATûMAKESûITûONLYûTHEûNINTHûQUARTERûTOûSEEû STOCKûPRICESvû(ARDING *ONESûSAID QUARTERûBEGSûTHEûQUESTIONûISûûSIMPLYû
deal value exceed US$1trn and only the second front-loaded with transactions or can the
time that mark has been topped for consecutive EIGHTEEN US$10BN DEALS level be sustained? “We continue to expect
QUARTERSû4HEûOTHERûTIMEûWASûûYEARSûAGOûWHENû In Deloitte’s 2018 State of the Deal M&A the M&A market to remain strong in terms
AûHOTûFOURTHûQUARTERûINûûWASûFOLLOWEDûBYûANû survey, 68% of corporate respondents and OFûBOTHûVALUEûANDûVOLUMEûTHROUGHûvû
EVENûHOTTERûlRSTûQUARTERûINû ûOFûPRIVATEûEQUITYûRESPONDENTSûSAIDûTHEYû SAIDû2USSELLû4HOMSONûMANAGINGûPARTNERûOFû
Deal value hit US$1.03trn in the most expected a rise in the number of transactions. Deloitte’s US M&A services practice.
RECENTûFOURTHûQUARTERû3TARTINGûOFFûTHEûYEARû The survey also found high expectations “While there are a few potential disruptors,
WITHûANOTHERûMASSIVEûQUARTERûCONlRMSûTHEû for more mega-deals. Sixty-three percent of including potential for trade wars, many
bullish comments from bankers about a respondents said they expected the average FUNDAMENTALSûREMAINûPOSITIVEvûHEûSAID
robust pipeline and optimism for a good 2018. enterprise size of transactions this year to The return of mega-deals is shaking up
Activity has been strong in North America exceed 2017, and executives from bigger the advisory league tables as well.
and Europe, driven by the need for innovation lRMSûWEREûCONSIDERABLYûMOREûCONlDENTû MORGAN STANLEY is still at the top of the
and business disruption driving companies to there would be bigger deals this year. heap, but arch rival GOLDMAN SACHS has
buy technology or digital assets, plus US tax So far this year deals above US$5bn SLIPPEDûTOûlFTHûPLACEûFROMûSECONDûAûYEARûAGOû
reform, strong economic fundamentals and accounted for 56% of the total value, and deals THEû4HOMSONû2EUTERSûDATAûSHOWûJP MORGAN
READILYûAVAILABLEûCHEAPûlNANCING above US$10bn accounted for 40% of the total moved into second, followed by BANK OF
“I haven’t seen these levels of activities for value. There have been 18 transactions of AMERICA MERRILL LYNCH and CITIGROUP.
SOMETHINGûLIKEûûYEARSûINû%UROPEvûSAIDû US$10bn-plus, double the number in the Philip Scipio
Alison Harding-Jones, head of M&A in EMEA FOURTHûQUARTERûANDûTHEûlRSTûQUARTERûOFûû Additional reporting by Alex Chambers
StanChart CEO talks up revenue growth

STANDARD CHARTERED chief executive Bill been particularly problematic after building more deliberate, a little bit more thoughtful
Winters said last week the bank was now up massive loans to its biggest clients during … which means that something like a third
growing across all divisions and regions as the commodities boom, many of which of our income is going to be suppressed for a
HEûSOUGHTûTOûPUTûBEHINDûHIMûTHEûDIFlCULTIESû SUBSEQUENTLYûTURNEDûSOUR PERIODûWHILEûWEûREPOSITIONvûHEûSAID
of the last several years, particularly for the Overall, CIB income for 2017 of US$6.5bn “It’s a growth story. Of course, you can be
investment bank. WASûmATûFROMûTHEûYEARûBEFOREûANDûEXCLUDINGû discouraged … about the fact that our
“What we indicated when we announced LOSSESûINCURREDûINûITSûPRINCIPALûlNANCEû income actually only grew 3% year-on-year,
our full-year earnings was that 2018 had business in 2016, revenue slipped 3%. BUTûYOUVEûGOTûTOûLOOKûATûTHEûPIECESv
started very well for us. We had growth that StanChart’s performance was also He said the bank was still on course to
was in double digits and it was across all our hampered last year due to the downturn in MEETûITSû2/%ûTARGETûEMPHASISINGûTHEû
REGIONSûANDûALLûOURûBUSINESSûLINESvû7INTERSû TRADINGûVOLUMESûTHATûAFmICTEDûALLûGLOBALû strength of its transaction banking offering
TOLDûREPORTERSûATûAûBRIElNGûATûTHEû#REDITû BANKSû2EVENUEûFROMûlNANCIALûMARKETSûFELLû and its emerging-markets footprint,
Suisse Asian Investment Conference in 16% to US$2.54bn. particularly in relation to China’s Belt and
Hong Kong. 2OADûINITIATIVE
“It is very encouraging to be able to PATIENCE He also cited improvements to its lending
capitalise on a good external environment, Winters has previously said he is targeting portfolio. Last year, the bank launched a
BUTû)ûTHINKûITûALSOûREmECTSûTHEûINVESTMENTSû 5%-7% annual growth in CIB and has set a new capital structuring and distribution
THATûWEVEûBEENûMAKINGûASûAûBANKv medium-term goal of an 8% return on group, headed by Cristian Jonsson and
7INTERSûWHOûSPENTûHISûlRSTûTWOûYEARSû EQUITYû)TSû2/%ûWASûûLASTûYEAR (ENRIKû2ABERûTOûSTRENGTHENûDISTRIBUTION
since joining in 2015 grappling with bad But StanChart, which makes around 85% h7EûKNOWûTOûGETûTOûTHATûû2/%ûWITHûAû
debts, job cuts and overhauling lending of its revenue out of Asia, Africa and the nû#%4û;COMMONûEQUITYûTIERû=ûRATIOû
standards, has struck a more upbeat tone -IDDLEû%ASTûHASûDRAWNûSOMEûmAKûFORûNOTû … we need to double more or less our
since mid-2017, seeking to assure investors keeping pace with the GDP growth in the OPERATINGûPROlTSv
that growth would return to the emerging markets where it operates. “There’s nothing that diminishes my
markets-focused lender. Winters called for patience. enthusiasm or my sense that we achieve
Its corporate and institutional banking “We elected to pursue a programme at THATv
division, effectively its investment bank, has Standard Chartered where we’re a little bit Thomas Blott

“This is a very hard test ... so we’ll have to get through this.
4HATûWILLûHAVEûIMPLICATIONSûFORûPEOPLESûBUYBACKûPROGRAMMESv
MORGAN STANLEY PRESIDENT COLM KELLEHER ON THIS YEAR’S CCAR, P12
Citi rehires Maskell to co-head EMEA financial sponsors

CITIGROUP has rehired Alexis Maskell as co-head *UNEû(EûWILLûCO HEADûITSûlNANCIALûSPONSORSû 2EVENUESûFROMûlNANCIALûSPONSORSûROSEû
of its alternative assets group in Europe, group in EMEA with Shawn Borisoff, who 24% last year to US$12.2bn, according to
Middle East and Africa, to lead its dealings joined Citi last year from UBS. 4HOMSONû2EUTERSûDATAû4HATûWASûBELOWûTHEû
WITHûPRIVATEûEQUITYûlRMSûANDûSOVEREIGNû Maskell will report to Christian Anderson record of US$15.7bn in 2014, but still
wealth funds in the region. and Anthony Diamandakis, co-heads of accounted for about 12% of investment
News of Maskell’s return comes just 14 global asset managers, which deals with banking fees, compared with 5% in 2009.
months after he joined HSBC as global head of PRIVATEûEQUITYûSOVEREIGNûWEALTHûANDûPENSIONû Goldman Sachs was the top revenue
ITSûlNANCIALûSPONSORSûFRANCHISEû(EûJOINEDû(3"#û FUNDSûANDûSOMEûFAMILYûOFlCEûCLIENTS earner in the segment, earning about
from Deutsche Bank, where he spent 10 years, #ITIûANDûOTHERûlRMSûAREûBULKINGûUPûTEAMSû US$1.1bn in fees, followed by Morgan
including covering sponsor clients in Europe. as revenues from advising those clients on Stanley and JP Morgan. Citi ranked seventh
He worked at Citi between 2004 and 2007. buyouts, fundraisings and sales or listings of LASTûYEARû4HOMSONû2EUTERSûDATAûSHOWED
Citi said Maskell would rejoin the bank in portfolio companies grows. Steve Slater
FROM THE ARCHIVE: 10 years ago this week

THE FINANCIAL CRISIS
“If [the discount window had JPM’s takeover, own about 35% of spend at least US$200bn on new
been opened] on the Friday, we Bear, though they will not be able to mortgages as the US authorities
would have been fine,” said the exercise a full vote as about half of continue to grapple with the crisis
Bear executive. “The Fed saved that stock is unvested, with voting in the country’s mortgage finance
Lehman and the others by opening rights controlled by Bear itself. system.
its discount window when it did The move was greeted with
– there’s no doubt that Lehman Visa’s grand slam enthusiasm by holders of the two
would have been in terrible shape The world’s largest credit card government sponsored enterprises’
otherwise.” processor achieved a stunning debt and CDS. Clearly, the market
There was also dismay at success in its transition to a has judged that by using the GSEs at
the lack of consultation about public company last week. The the centre of their attempts to rescue
the deal, with Schwartz said to IPO soared on its debut, giving the US housing finance system,
From March 22 2008 issue have involved just a handful of investors something to cheer the US authorities have turned an
“Robbery of the decade” colleagues. That ensured that New about and providing its former implicit government guarantee into
Staff at Bear Stearns last week York-based managers shared their member banks with a financial something more concrete.
reacted with fury to the deal struck international colleagues’ anger at windfall. The strength of the Visa
between CEO Alan Schwartz, JP the situation. brand facilitated a novel marketing FSA pledges action on
Morgan Chase and the US Federal Senior Bear executives were in strategy that drew upon demand suspicious trading
Reserve, which saw their employer meetings with JPM management all from around the world. The Financial Services Authority,
sold to JP Morgan for just US$2 per last week, with JPM attempting to The once sleepy credit card the UK market regulator, last week
share compared with an estimated establish the size of Bear’s positions processing network Visa Inc pledged to investigate trading in
book value of about US$85. and exposure to risk. Meetings have completed the latest step in its UK financial institution stocks.
That anger stretched to been cordial, but Bear bankers said organisational restructuring Its actions are thought to have
the ranks of top Bear Stearns that JPM officials could not hide through its US$17.9bn IPO, which been prompted by extraordinary
executives. “The Fed wanted us to their own amazement at the terms was increased to US$19.1bn with price movements in HBOS, which
go down – it wanted a scapegoat,” of the deal. Thursday’s exercise of a greenshoe. plummeted by 20% on Wednesday
said one very senior official at The fallout for staff is certain to The offering, the largest-ever in morning on rumours that it had
the firm, who did not want to be be very severe. Bear employs about the US, benefited from a unique sought emergency funding from
named. “This has been the robbery 12,000 people in the US, some transactions-based business model the Bank of England, only for the
of the decade.” 1,500 in London and a further 500 and a brand name recognisable stock to recover somewhat when
The level of anger felt across the in Asia. There is already talk of around the globe. the rumours were denied.
business was sparked in part by the some staff having left, though it is “We will not tolerate market
fact that the Fed opened its crucial unclear whether they have decided Implied US agency guarantee participants taking advantage of
discount window just after the to take their chances in a tough job The US government’s implicit the current market conditions to
Bear/JP Morgan deal was signed market ahead of a massive exodus, guarantee of Fannie Mae and commit abuse by spreading false
on Sunday night. That opened the or whether they have been forced Freddie Mac became significantly rumours and dealing on the back
way for competing broker-dealers to go. more explicit last week. The two of them,” said Sally Dewar, MD of
to seek support, but it came too Staff, who are estimated to have agencies were permitted to reduce wholesale and institutional markets
late for Bear. lost about US$5.5bn as a result of their capital cushion by a third and at the FSA.

People
& Markets
Hong Kong keeps flexible for biotech IPOs
Less than a month after issuing proposals to The proposals also outline enhanced FORûAû53MûmOAT û3HANGHAIû&OSUNû
attract biotech listings to Hong Kong, the stock DISCLOSUREûREQUIREMENTSû4HESEûINCLUDEû Pharmaceutical subsidiary SHANGHAI HENLIUS
exchange made a plea last week to potential publishing all material communications BIOTECH (for US$500m), US-based cancer-
CANDIDATESûTOûNOTûGETûlXATEDûONûTHEûSMALLûPRINT with relevant authorities in relation to the detection start-up GRAIL (for up to US$500m)
h!ûLOTûOFûYOUûAREûALREADYûRAISINGûQUESTIONSû companies’ core product, disclosing and China’s HUA MEDICINE (for at least US$400m).
about certain elements and certain aspects information on their operating costs, capital The reforms, which also include plans to
OFûOURûREGIMEvûSAIDûHONG KONG EXCHANGES AND expenditure and working capital, and ALLOWûhINNOVATIVEvûCOMPANIESûTOûISSUEû
CLEARING chief executive Charles Li at the detailing any patents granted relating to shares with weighted voting rights, have
bourse’s inaugural biotech summit. their core products. DRAWNûmAKûFROMûSOMEûINVESTORSûWHOûHAVEû
“Don’t worry about it. I think the regime is HKEx has said it will recognise the US accused the exchange of cherry-picking IPOs
NOWûBUILTûmEXIBLEûENOUGHûTOûALLOWûUSûTOûTAKEû Food and Drug Administration, the China and diluting investor protections.
it on a case-by-case basis, even if the rules Food and Drug Administration and the But the Securities and Futures
THEMSELVESûDOûNOTûCOVERûYOUûSPECIlCALLYv European Medicines Authority as competent Commission of Hong Kong has thrown its
Li’s comments came on the penultimate authorities, while reserving the right to weight behind the proposals.
day of the consultation period on draft rule recognise other entities at its discretion. “From the SFC’s perspective, we do want
changes, which include plans to introduce a to see a broader range of companies listing
new chapter on the main board for biotech CHERRY-PICKING here and we want to see companies listing
companies that to do not meet the standard Li’s comments came as several mainland HEREûTHATûHAVEûSIGNIlCANTûGROWTHûPOTENTIALvû
lNANCIALûELIGIBILITYûTESTS biotech companies are mulling Hong Kong said SFC CEO Ashley Alder.
The consultation document proposes to allow IPOs, following the announcement of the He said there needs to be good investor
biotech companies to list, subject to certain proposed rule changes. education and a regulatory framework that is
criteria. These include that a company has an Shanghai-listed TASLY PHARMACEUTICAL GROUP rigorous without putting barriers in the way.
expected minimum market capitalisation of plans to list its biopharma unit in Hong The consensus on listing reforms comes
HK$1.5bn (US$191m), that it has developed at Kong to raise about US$1bn in what is likely as China has stepped up its efforts to grab
least one core product beyond the concept stage, TOûBEûTHEûLARGESTûBIOTECHûmOATûINûTHEûCITYûTHISû GREATERûMARKETûSHAREûINûEQUITYûRAISINGSûFROMû
ANDûTHATûITûBEûPRIMARILYûENGAGEDûINû2$ûFORûTHEû year, according to people close to the deal. the technology sector.
purpose of developing its product. Among other hopefuls are China’s ASCLETIS Thomas Blott
Noble defaults, faces lawsuits China Renaissance

NOBLE GROUP missed a bond redemption last Noble said it was consulting its legal
hires for HK IPO push
week and was hit by two lawsuits, as it ADVISERSûANDûINTENDEDûTOûhVIGOROUSLYûRESISTvû CHINA RENAISSANCE has hired Dennis Leung as
continued to work to restructure its debt. Goldilocks’ allegations and claims. managing director as it looks to capture
The commodities trader missed the The other people named in the writ are more deals from Hong Kong’s burgeoning
redemption payment for its US$379m of 7ILLIAMû2ANDALLû#%/ûOFû.OBLEû*EFFREYû&RASEû IPO pipeline.
3.625% bonds on March 20, placing it in former co-CEO; Louis Tang, former chief Leung, who reports to Jason Lam, president
default. Holders of around 50% of its senior ACCOUNTINGûOFlCERûANDûGROUPûlNANCEû OFû#HINAû2ENAISSANCEû)NTERNATIONALûHASûMOREû
debt have signed a restructuring-support director; and Paul Jackaman, group chief than 20 years’ experience in investment
agreement, under which they cannot take lNANCIALûOFlCER banking, in particular advising on IPOs and
steps to wind up the company. Abu Dhabi-based investment group follow-on transactions.
Holders of a combined 25% of the 2018 Goldilocks built up an 8.2% shareholding in He was most recently with Dongxing
NOTESûWILLûNEEDûTOûMAKEûAûREQUESTûTOû Noble in early to mid-2017. It stands to be Securities and has also worked at ICBC
the trustee to begin winding-up proceedings heavily diluted if a proposed restructuring International and BoCom International.
against the company. Noble said it believed scheme goes ahead. ,AMûSAIDûTHEûlRMSûEXPANSIONûCAMEûATûAû
the chances of that happening were low, As part of the suit, Goldilocks is seeking to critical time for the Hong Kong market.
due to the time and cost involved, and claim on behalf of other Noble shareholders the “Many companies that had previously
revealed that it had been advised that a US$169.4m in remuneration paid to the board considered New York listings have switched
court would probably adjourn such and management between 2011 and 2017, and and are now planning Hong Kong listings.
proceedings until the restructuring was the difference between book values and the We expect this trend to pick up if the listing
completed. amount received for certain transactions. REFORMSûAREûENACTEDvûHEûSAID
Noble also faced two separate legal claims. On Friday, Noble Group said Atlas #HINAû2ENAISSANCEûFOCUSESûONûPRIVATEû
On Wednesday, shareholder Goldilocks 2ESOURCESûANû)NDONESIANûCOALûPRODUCERûHADû placement advisory, M&A advisory, securities
)NVESTMENTûlLEDûAûLAWSUITûAGAINSTûTHEû lLEDûAûLAWSUITûAGAINSTûITûINû)NDONESIAûSEEKINGû underwriting, research, sales and trading and
company and certain of its executives, compensation in excess of US$260m. The investment management. Its other recent
INCLUDINGûFOUNDERû2ICHARDû%LMANûANDû commodities trader said it had not been hires include Joe Lai, who joined from CIMB
chairman Paul Brough, alleging the past and served with a writ and was not aware of the and specialises in healthcare, and Henry Tsai,
PRESENTûEXECUTIVESûBREACHEDûTHEIRûlDUCIARYû grounds, but intended to defend any claim. who joined from Morgan Stanley.
duties. Daniel Stanton Thomas Blott

“There’s a lot of pressure on boards and CEOs to
KEEPûDELIVERINGûGROWTHûTOûSUSTAINûTHOSEûSTOCKûPRICESv
CITI M&A BANKER ALISON HARDING-JONES ON WHAT’S DRIVING DEAL ACTIVITY, P17
IN BRIEF
From Wall Street to weed: bankers
BACKING DOWN
jump to marijuana firms UK insurer AVIVA abandoned a plan to cancel
high-yielding preference shares that had been
As a senior vice-president at WACHOVIA and lVEFOLDûINCREASEûFROMûABOUTû53BNûINû opposed by investors and drawn scrutiny from the
then MORGAN STANLEY during the dark months 2011, according to estimates from trade country’s financial watchdog. Aviva was looking
OFûTHEûûANDûûlNANCIALûCRISISû$EREKû publication Marijuana Business Daily. at cancelling the shares at par because they will
Peterson watched as colleagues lost their jobs Some 250,000 people work in the sector, no longer count as regulatory capital after 2026
and life savings and wondered if he was next. and both jobs and revenues are expected to under new European rules.
At the time, he was managing about double or triple over the next four years, the Cancelling the securities, which have a face
US$120m in client assets, but was growing publication estimates. value of £450m and were described as being
disenchanted with what he saw as a US stock “irredeemable”, would have saved Aviva £38m
MARKETûDRIVENûBYûHIGH FREQUENCYûTRADINGûANDû LINGERING FEARS a year in coupon payments. But the proposal
algorithms rather than fundamentals. He Despite the growth prospects, many to cancel them was slammed by investors and
started looking for other opportunities, and lNANCIALûPROFESSIONALSûAREûSTILLûLEERYûOFû the Financial Conduct Authority also last week
SOONûSTUMBLEDûONûSOMEûOFûTHEûlRSTûLEGALû federal law, which considers marijuana an asked Aviva to explain the legal basis for its
medical marijuana dispensaries that had illegal drug, to take a job in the industry. plan.
opened in the San Francisco Bay Area. In January, the Justice Department Aviva subsequently said it had decided to take
“I started looking at this through a reversed a policy from the Obama no action over the shares after consulting with a
lNANCEûGUYSûEYESûANDûSAWûTHATûMAYBEûTHEREû administration that allowed states to large number of investors and receiving “strong
WASûSOMETHINGûGOINGûONûHEREvûHEûSAID legalise marijuana without fears of a federal feedback and criticism”.
He soon discovered that dispensaries were crackdown.
bringing in sales of more than US$4,000 per “People have really been scared away TOO COSY?
SQUAREûFOOTûAûRATEûHIGHERûTHANûANYû53û from investing and to a large extent that Germany’s appointment last week of a GOLDMAN
retailer but Apple, and more than 12 times SAMEûMENTALITYûISûKEEPINGûTHEûTALENTûAWAYvû SACHS executive to a senior finance ministry
THEûAVERAGEû53ûPERûSQUAREûFOOTûAMONGû SAIDû2UTHû%PSTEINûAûPARTNERûATûBUSINESSû post drew accusations the government was
all companies in the sector. ADVISORYûlRMû"'0û!DVISORSûWHOûSPENTû once again cosying up to the banking sector
“You had places the size of Starbucks nearly 10 years on Goldman’s corporate that caused the 2008 economic crash. Joerg
bringing in US$15m a year, which is lNANCEûDESKû"UTûTHATûHASûhCREATEDûAûMASSIVEû Kukies, formerly the co-head of Goldman in
ABSURDvû0ETERSONûSAID opportunity for someone who understands Germany, was named deputy finance minister
(EûQUITûHISûDAYûJOBûATû-ORGANû3TANLEYûINû lNANCEûANDûISûWILLINGûTOûBEûOUTûONûTHEû with responsibility for financial market policy and
late 2010, and in 2012 became chief VANGUARDvûSHEûSAID European issues.
EXECUTIVEûOFlCERûANDûPRESIDENTûOFûTERRA TECH Morgan Paxhia, co-founder of San It is the first time a German government has
CORP, which is now a US$247m company Francisco-based Poseidon Asset Management, hired a Goldman banker and signals a recovery
that cultivates medical marijuana and a US$25m hedge fund that focuses of the sector’s influence after the crash when it
whose shares trade on the over-the-counter exclusively on the marijuana sector, was a was shunned by politicians including Chancellor
market, making it one of the few publicly trader on the municipal debt desk at UBS in Angela Merkel. Prior to that, Germany had a
traded pot stocks. .EWû9ORKûDURINGûTHEûlNANCIALûCRISISû(Eû long tradition of using bankers to help steer the
Peterson is not alone in the jump from would pass by the Lehman Brothers building economy.
Wall Street to weed. on the way to work and said it felt as if “the Timo Lange of Lobby Control, which campaigns
4ENûYEARSûAFTERûTHEûSTARTûOFûTHEûlNANCIALû BUILDINGûWEREûJUSTûCRATERINGûAROUNDûYOUv for transparency in lobbying, said the appointment
crisis, what was once the province of shady He was laid off in March 2009 and started “strengthens the impression that politicians and
stoners and drug cartels is now a thriving Poseidon with his sister, Emily, in 2013. the elite are working hand in hand and that there
industry, with recreational marijuana legal h)FûTHEûlNANCIALûCRISISûNEVERûHAPPENEDûWEû is little left for the ordinary person”.
in states ranging from California to would have banks in this industry already,
Massachusetts. but they won’t push this industry forward PAY CHANGE
BECAUSEûTHEYREûTOOûAFRAIDvûHEûSAIDûh)TSû CREDIT SUISSE is revising pay for top management,
WALL STREET ALUMNI opened up huge opportunities for those who hoping to ease shareholder concerns with a
Powering the expansion of the industry are AREûWILLINGûTOûCOMEûINûANDûCAPITALISEûITv returns-focused policy. CEO Tidjane Thiam also
former Wall Street executives like Peterson Terra Tech’s Peterson said he now routinely earned slightly less for 2017 after cuts to his long-
THATûHAILûFROMûlRMSûINCLUDINGû"LACK2OCKûANDû lELDSûCALLSûFROMûEMPLOYEESûOFûBANKSûANDû term share bonuses trimmed his pay to SFr9.7m
Goldman Sachs, all of whom say they might INVESTMENTûlRMSûINTERESTEDûINûMOVING (US$10.2m).
NOTûHAVEûEVERûLEFTûTRADITIONALûlNANCEûIFûNOTû h7HENû)ûlRSTûSTARTEDûOUTûTHEûFACTûTHATû)û Changes to the bonus scheme for the current
for the lingering damage of the 2008 crisis. had worked on Wall Street made me seem year’s pay come amid increasing scrutiny of
There are few reliable numbers on how like a real outsider, to the point where executive pay, including a “Fat Cat” referendum
many former investment bankers now work PEOPLEûWOULDûASKû!REûYOUûAûNARCvûHEûSAIDû in 2013 giving shareholders a veto power over
in the cannabis industry, though those in REFERRINGûTOûAûFEDERALûNARCOTICSûOFlCERûh)TSû management and board pay in Switzerland.
the sector say they expect the migration to in the last two years that we’ve seen a But the proposal could also mean a significant
accelerate as revenue growth attracts talent. TREMENDOUSûINmUXûOFûPEOPLEûFROMû pay rise for several executives if the bank beats
Companies in the US marijuana market TRADITIONALûBUSINESSûBACKGROUNDSv its targets and delivers rising rewards to its
posted revenues of about US$6bn in 2017, a David Randall shareholders.

BONDS
SSAR 23 Corporates 26 FIG 30 Covered Bonds 34 High-Yield 34 Structured Finance 38
FRONT STORY CORPORATES
Investors step back from bloated market

Some German accounts on buyers’ strike in fickle market
Signs of recovery as recent issues perform
Some investors have gone on a buyers’ With over €24bn of supply between NEW WAY OF THINKING
strike as they wait for greater clarity about March 12 and March 19 - the busiest period 4HEûGOODûNEWSûISûTHATûLASTûWEEKSûNEWûISSUESû
the outlook for credit, though the mid- for two years - a banker said that a were performing.
March week’s near-record volumes show combination of indigestion and wider /FûTHEûlVEûTRADESûTHATûCAMEûONû-ONDAYû
that most accounts are still engaged when spreads was stopping some investors from GENERAL MOTORS’ €500m seven-year tranche
juicy concessions are on offer. considering new paper. WASûBPûTIGHTERûFROMûREOFFERûONû4HURSDAYû
Bankers say a couple of German accounts h)NVESTORSûHAVEûLESSûCASHûTOûPUTûINûPRIMARYû while DANONE’s €300m seven-year Social
in particular have recently declined to because they’ve put everything in last week bond was 6bp tighter, after trading 9bp
engage with new issues as the market is so and therefore need to free up cash in wider on Wednesday.
lCKLEûh)TSûKINDûOFûUNUSUALvûSAIDûONEû secondary. But they can’t because the SANOFI, which came the week before, was
banker, about the stance adopted. secondary market is weaker and everything quoted marginally tighter across all its
Others say it is understandable, however. is widening, and they can’t sell their tranches apart from its 20-year, which was
h)TSûNOTûSURPRISINGûTOûSEEûPEOPLEûPUTTINGû position. People are not only waiting for BPûWIDERûONû4HURSDAY
BUYINGûONûHOLDûGIVENûTHEûVALUATIONSvûSAIDû more stability but also for the secondary But the indices suggest it is still too early
Puneet Sharma, head of credit strategy, MARKETûTOûTIGHTENûAûBITvûHEûSAID TOûREACHûAûGENERALûCONCLUSIONû4HEûI"OXXû
investment management at Zurich 4OMû-OULDSûSENIORûPORTFOLIOûMANAGERû EUROûNON lNANCIALSûSENIORûINDEXûWASûTRADINGû
)NSURANCEû'ROUP investment-grade, at BlueBay Asset ATûBPûATû4HURSDAYSûCLOSEûLASTûWEEKûONEû
h4HEûFUNDAMENTALSûANDûTECHNICALSûARENTû Management, said the shake-out from the of its highest levels since October 2017.
GREATû4HERESûBEENûAûFAIRûBITûOFûINVESTORû repricing will eventually be healthy for the 4HEûSOFTERûSENTIMENTûINûSECONDARYûANDû
nervousness since the correction in late market. RECENTûTRICKYûEXECUTIONSûHAVEûDETERREDûMOSTû
January and early February in the equity h!CCOUNTSûWEREûDElNITELYûONûSTRIKEûFROMû BORROWERSûFROMûISSUINGûSINCEûLASTû4UESDAYû
MARKETûTHATûHASûAFFECTEDûCREDITû4HEûSUPPLY buying bonds in the secondary market, But bankers say the window is still open to
demand balance, which was the last major INCLUDINGûINSURANCEûCOMPANIESû4HEIRû low-beta single-tranche trades, and
support for the market, is threatened and behaviour is very much dictated by how anticipate supply to pick up after Easter and
LOOKINGûVULNERABLEv VOLATILEû"UNDûYIELDSûAREvûHEûSAID the start of a new quarter.
While books were often several times h"UTû)ûDOûTHINKûWEREûATûTHEûBEGINNINGû h3OMEûACCOUNTSûMAINLYû'ERMANûANDû
subscribed throughout 2017 and at the of a much more stable credit market here. French, have been saying they want to see
beginning of this year, accounts have With less supply, CSPP will be more more constructiveness in the market before
become much more selective in recent active in the secondary market and we’ll PARTICIPATINGû"UTûATûTHEûENDûOFûTHEûDAYû)û
weeks, making trades unpredictable. see more engagement from some of the still think it depends on the name and what
Jorgen Kjaersgaard, head of European insurance companies that have been less ISûONûOFFERvûSAIDûAûTHIRDûBANKER
CREDITûATû!LLIANCE"ERNSTEINûCONlRMEDûAû ACTIVEû)TSûQUITEûHEALTHYûTOûHAVEûTHATûKINDû Danone saw its books over twice covered
certain fatigue among investors. OFûREPRICINGv last Monday for its €300m seven-year
h4HEREûHASûBEENûAûLACKûOFûINTERESTûFROMû debut Social bond, a feat that few have
CERTAINûBUYERSûTHATûISûAûFACTvûHEûSAIDûh)û achieved recently, but it left a double-digit
wouldn’t call it a strike but you need to WIDER CORPORATE BOND SPREADS PREMIUMûONûTHEûTABLEû)Nûû4RIPLEû"û
think a little bit differently. Many of the IBOXX EUROPEAN NON-FINANCIAL CORPORATES names rarely offered more than 10bp of
deals in Q4 2017 and January were sounded SENIOR INDEX concession.
at a certain level and were brought to the bp h4HERESûBEENûSOMEûSORTûOFûNORMALISATIONû
MARKETûTIGHTERv 46 Markets have been great for such a long
)NûCERTAINûINSTANCESûORDERûBOOKSûHAVEû 44 time, with deals sometimes coming with
either struggled to grow or have shrunk 42 negative new issue premiums, and until the
SIGNIlCANTLYûASûPRICINGûHASûTIGHTENEDû 40 summer there should still be a constructive
On March 15, RELX FINANCE announced a 38 WINDOWvûTHEûTHIRDûBANKERûSAID
€600m no-grow long nine-year bond at 36 h"UTûAFTERûTHATûITSûGOINGûTOûBEûTRICKYû
60bp area over mid-swaps but only 34 BECAUSEûOFûTHEûEXPECTEDû1%ûTAPERINGû)SSUERSû
MANAGEDûTOûRAISEûõMûWITHûPRICINGûmATû 32 need to brace themselves for more elevated
to initial levels. 30 spreads going forward and for investors to
More generally, new issue premiums have 05/10/17 05/11/17 05/12/17 05/01/18 05/02/18 05/03/18 BEûEVENûMOREûPICKYû)TSûGOINGûTOûBEûAûNEWû
become juicier, sometimes surpassing the WAYûOFûTHINKINGv
20bp mark. Source: Thomson Reuters Pauline Renaud

HSBC braves tough WEEK IN NUMBERS
dollar market 2.88%

THE SPREAD BETWEEN TWO-YEAR
TREASURIES AND TWO-YEAR BUNDS,
Demand aplenty for biggest European Yankee AT1 THE HIGHEST IN 21 YEARS
%
HSBC last week brought the largest Additional above par on Friday, according to 3.0
4IERûû9ANKEEûTRADEûFROMûAû%UROPEANû 4RADEWEBûDESPITEûWIDERû#$3ûINDICES
2.5
bank, beating its own record while making h!TûTHEûRIGHTûLEVELSûTHEREûISûVERYû
2.0
a dent in the up to US$7bn target it aims to GOODûCAPACITYûFORûISSUERSvûTHEûTHIRDû
RAISEûFROMûTHEûPRODUCTûINûTHEûlRSTûHALFûOFû banker said. 1.5
2018. h"ANKSûLIKEû(3"#û$EUTSCHEû"ANKû 1.0

4HEû53BNûDUAL TRANCHEûTRADEûTOOKûTHEû Barclays and the French guys have got a 0.5
issuer one step closer to being able to restart FAIRûAMOUNTûOFûRElNANCINGûTOûDOûSOûYOUVEû
0.0
share buybacks, given that it is not allowed got to get to levels where you can clear
-0.5
TOûISSUEû!4SûANDûREPURCHASEûSHARESûATûTHEû multi-billion deals. And that isn’t at 3% or
25/3/ 25/03/ 25/03/ 25/03/ 25/03/
same time. 4% in euros, or 5% in dollars, especially if the 2013 2014 2015 2016 2017
)TûWASûTHEûlRSTûTIMEûSINCEû.OVEMBERûû 53ûISûGOINGûTOûPUTûRATESûUPûINûTHEûNEXTûTWOû
that a European bank had sold the deepest YEARSû4HEREûHASûTOûBEûAûSENSIBLEûPRICINGû
form of subordinated debt in the US market, DYNAMICv
ANDûTHEûlRSTûTESTûOFûINVESTORûAPPETITEûAFTERûAû
recent sell-off buffeted the asset class.
)SSUERSûHAVEûALSOûPAIDûBIGGERûCONCESSIONSû
due to a renewed focus in Europe on back-
US$35.2bn
THE LEVEL OF DEMAND FOR AB INBEV’S
4RANSACTIONSûPRICEDûINûTHEûEUROûANDû53û end spreads, which are a major determinant US$10bn SIX-PART BOND OFFERING,
dollar Reg S markets earlier this year are of the coupon level should a bond not be WHICH HELPED THE BREWER TIGHTEN
lingering well below par, and after hitting a called. SPREADS BY UP TO 25bp
yearly low of 4.35% in January the Bank of (3"#ûWASûHAPPYûTOûCOMPENSATEûINVESTORSû
!MERICAû-ERRILLû,YNCHû#O#OûINDEXûHASûSINCEû handsomely even though back-end resets
crept up, closing above 5% on March 22.
h4HEREûISûAûPRICEûFORûRISKvûSAIDûONEû
are less of a focus in the US.
h4HEû53ûMARKETûISûLESSûSENSITIVEûTOûITû
30%
THE PERCENTAGE OF INVESTORS
,ONDON BASEDûBANKERûh4HEû(3"#ûTRADEû partly because there’s not that many deals SURVEYED BY BAML WHO THINK A
shows you there is a deep, liquid market and investors can’t really pick and choose POTENTIAL TRADE WAR IS THE BIGGEST
THEREû4HEûPROBLEMSûHAVEûCOMEûWHENû WHEREûTHEYûWANTûTOûBEûINvûTHEûlRSTûBANKERû THREAT TO MARKETS, TOPPING THE LIST
issuers have not reacted to where the said. OF TAIL RISKS
MARKETûISûANDûTRIEDûAûLITTLEûBITûTOOûTIGHTv h!LSOûIFûYOUûLOOKûATûTHEû(3"#ûCURVEûTHEû
4HEûBANKûOPTEDûFORûAûSIMILARûSTRATEGYûASû new deals didn’t come massively inside the BIGGEST RISKS
3ANTANDERûANDû#AIXA"ANKûINûEUROSûTHEû OLDûONESv %
previous week, offering investors big new- 4HEûRESETûONûTHEû53BNûNON CALLûûISûAû 30
issue concessions to get the US$2.25bn WHISKERûAWAYûFROMû(3"#SûPERPûNON CALLû 25

PERPETUALûNON CALLûlVEûANDû53BNû 2027 priced in May last year - at 360.6bp over
20
perpetual non-call 10 away. swaps versus 374.6bp.
h)TûWASûGENEROUSûBUTûTHEYûHAVEûSOûMUCHû 4HEûBANKûDIDûNOTûWANTûTOûRAISEûALLûOFûITSû 15
OUTSTANDINGûANDûHAVEûAûLOTûTOûDOvûANOTHERû lRST HALFû!4ûTARGETûINû53ûDOLLARSû53BNû
10
BANKERûSAIDûh4HEYVEûTAKENûOUTû53BNû was seen as a good balance between
WHICHûISûAûBIGûSTEPûTOWARDSûTHEIRûTARGETû4HEYû breaking the back of the requirement and 5
probably paid one eighth to 25bp more than leaving a small stub to do.
0
maybe a much smaller issuer, but they have Some bankers said it was hard to see more Trade war Inflation Slowdown in
global growth
AûBIGûPROGRAMMEûSOûITûMAKESûSENSEv BANKSûFOLLOWINGû(3"#SûPATHûUNLESSûTHEYûHADû
At initial price thoughts of 6.375% area an urgent need. Source: BAML
and 6.625% area, the trades offered 40bp- )SSUERSûRECENTLYûHAVEûHELDûBACKûASûMANYû
50bp of concession, although the premiums trades have performed poorly in secondary,
shrank to around 25bp after pricing was
TIGHTENEDûTOûûANDûûANDû(3"#Sû!4û
limiting investor appetite.
h)NVESTORSûAREûCALLINGûTHEûSHOTSûNOWûANDû
MS-6bp
THE SPREAD ON NORDIC INVESTMENT
CURVEûWIDENEDûDURINGûEXECUTION many large money managers have become BANK’S US$500m APRIL 2020 BOND,
h4HISûISûGOODûFORûTHEûOVERALLûMARKETû very selective while hedge funds are simply THE TIGHTEST SPREAD FOR AN SSA IN US
THEYVEûDONEûAûFAIRLYûDECENTûJOBvûAûTHIRDû not buying much, which compounds the DOLLARS IN 2018. THE DEAL STRUGGLED
BANKERûSAIDûh4HEYVEûGOTûTOûCOMEûBACKûSOû liquidity problems as foreigners are absent TO GENERATE ANY MOMENTUM
are not in a position to do a deal that ANDûCORPORATESûAREûALSOûOUTvûSAIDûONEû
UNDERPERFORMSv syndicate banker.
4HEûTRADEûATTRACTEDûABOUTû53BNûOFû
demand, eclipsing the appetite seen for
h$EALSûTHATûPERFORMûLIKEûTHEû(3"#ûONEûINû
that sense are good for this market as it will
€1.263bn
THE AMOUNT THE ECB BOUGHT
OTHERû%UROPEANû!4ûISSUESûTHISûYEAR ENCOURAGEûMOREûBUYINGv THROUGH ITS CSPP IN TRADES SETTLED
4HISûHELPEDûUNDERPINûPERFORMANCEûINûTHEû Shankar Ramakrishnan, Helene Durand IN THE WEEK UP TO MARCH 16
aftermarket, with both tranches trading (Additional reporting by Alice Gledhill) In total, it has bought €146.243bn

BONDS SSAR
of demand for the April 2020 via BMO, a US$2bn two-year on over US$2.15bn of
Citigroup and TD, a strong outcome, demand.
SSAR especially given the spread at 1bp through h)TSûDIFlCULTûTOûEXPLAINûWHATSûCHANGEDû
mid-swaps. SINCEûTHENvûAûBANKERûSAID
(OWEVERûTHEûGOINGûWASûNOTûASûSMOOTHûFORû h4HEûSWATHESûOFûCENTRALûBANKûDEMANDû
US DOLLARS the NORDIC INVESTMENT BANK, which struggled there was on Rentenbank hasn’t been that
to sell a US$500m two-year, with books last strong of late. Secondaries feel like they’re
SSA ISSUERS PUSH ON AS VOLATILITY heard at US$430m via Bank of America Merrill much more distorted than they were in
BITES Lynch, RBC and TD. &EBRUARYû!LSOûBECAUSEûITSûDIFlCULTûTOû
Public sector issuers have been caught up pinpoint what’s driving the moves in the
KOMMUNALBANKEN managed to navigate volatility in the moves in the underlying markets off market, investors don’t know where things
in the US dollar market to bring its second US WHICHûTHEYûPRICEûTHEIRûBONDSû4HREE MONTHû are going and don’t want to catch a falling
dollar benchmark of the year. But success is far 53ûDOLLARû,IBOR/)3ûOPENEDûATûITSûWIDESTûLEVELû KNIFEv
FROMûBEINGûAûGIVENûASû.)"ûTHENûSHOWEDûWITHû SINCEû-AYûûLASTû4UESDAY "ANKERSûONûANDûOFFûTHEû.)"ûDEALûESTIMATEDû
THEûTRICKYûBACKDROPûEXPECTEDûTOûREMAIN 4HISûHASûTAKENûSOMEûOFûTHEûMOMENTUMû the new issue concession to be anywhere
4HEû.ORWEGIANûLOCALûGOVERNMENTûFUNDINGû out of a market that has weakened since BETWEENûmATûANDûBPû"UTûATûMID SWAPSûLESSû
agency printed US$1.25bn on over US$1.5bn February when the likes of Rentenbank sold 6bp, the deal was the tightest print against
ALL EURODOLLAR STRAIGHTS ALL INTERNATIONAL US$ BONDS ALL SOVEREIGN BONDS IN EUROS
BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 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 48 10,156.04 14.3 1 JP Morgan 177 51,443.34 10.1 1 Citigroup 13 8,121.10 12.1
2 Wells Fargo 43 6,869.18 9.7 2 Citigroup 187 43,606.15 8.6 2 Barclays 9 7,748.03 11.6
3 BAML 42 5,955.88 8.4 3 BAML 152 41,016.60 8.0 3 JP Morgan 9 7,150.75 10.7
4 Goldman Sachs 28 5,413.91 7.6 4 Barclays 111 37,989.96 7.4 4 NatWest Markets 4 5,400.28 8.1
5 Deutsche Bank 30 5,185.72 7.3 5 Goldman Sachs 101 34,811.40 6.8 5 BNP Paribas 8 4,397.49 6.6
6 Credit Suisse 29 5,021.14 7.1 6 Wells Fargo 91 27,466.31 5.4 6 SG 6 3,430.40 5.1
7 Citigroup 30 4,784.94 6.7 7 Morgan Stanley 104 26,125.69 5.1 7 Santander Global 4 3,428.70 5.1
8 Morgan Stanley 21 3,675.47 5.2 8 HSBC 104 22,094.59 4.3 8 HSBC 5 3,426.15 5.1
9 Mizuho 12 3,380.07 4.7 9 Deutsche Bank 89 18,839.15 3.7 9 ING 3 3,087.00 4.6
10 Barclays 21 3,295.06 4.6 10 Credit Suisse 86 16,602.49 3.3 10 Goldman Sachs 5 2,858.95 4.3
Total 129 71,175.53 Total 580 509,965.85 Total 20 66,989.04
Including Euromarket preferreds. Excluding equity-related debt. Including Euro, foreign and global issues. Excluding equity-related debt, Excluding ABS/MBS.
US Global ABS/MBS.
Source: Thomson Reuters SDC code: J12 Source: Thomson Reuters SDC code: O1 Source: Thomson Reuters SDC code: N4
ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS ALL US DOLLAR FIXED-RATE GLOBALS
bank or group issues US$(m) (%) bank or group issues €(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 266 79,791.26 7.5 1 SG 83 25,082.05 6.9 1 JP Morgan 48 22,835.14 12.5
2 Barclays 202 67,331.74 6.4 2 BNP Paribas 94 23,824.10 6.6 2 BAML 50 21,766.46 11.9
3 Citigroup 260 66,375.04 6.3 3 Barclays 68 20,880.07 5.8 3 Goldman Sachs 34 19,758.91 10.8
4 BAML 205 58,419.37 5.5 4 Deutsche Bank 95 20,615.95 5.7 4 Barclays 28 18,146.84 9.9
5 Goldman Sachs 151 55,589.15 5.3 5 Credit Agricole 73 20,521.52 5.7 5 Wells Fargo 29 13,761.36 7.5
6 HSBC 252 53,588.99 5.1 6 UniCredit 85 20,230.29 5.6 6 Citigroup 46 13,168.38 7.2
7 Deutsche Bank 212 47,223.59 4.5 7 HSBC 98 19,173.52 5.3 7 Morgan Stanley 26 8,761.58 4.8
8 BNP Paribas 178 45,451.53 4.3 8 JP Morgan 62 18,696.33 5.1 8 TD Securities 19 6,690.25 3.7
9 SG 124 37,282.10 3.5 9 Goldman Sachs 45 16,267.15 4.5 9 Deutsche Bank 17 6,663.75 3.7
10 Morgan Stanley 148 33,929.57 3.2 10 Citigroup 58 16,256.93 4.5 10 HSBC 17 5,798.61 3.2
Total 1,412 1,058,838.54 Total 439 363,046.19 Total 100 182,425.46
Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt, Excluding equity-related debt, ABS/MBS.
US Global ABS/MBS. US Global ABS/MBS.
Source: Thomson Reuters SDC code: J1 Source: Thomson Reuters SDC code: N1 Source: Thomson Reuters SDC code: O5
EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING MARCH 22 2018

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Mar 19 2018 Belgium €945m 0.20 Oct 22 2023 0.158 2.34
Mar 19 2018 Belgium €1.698bn 0.80 Jun 22 2028 0.851 1.78
Mar 19 2018 Belgium €570m 1.45 Jun 22 2037 1.37 2.12
Mar 19 2018 Belgium €368m 2.15 Jun 22 2066 1.875 1.46
Mar 20 2018 Germany €3.24bn 0.00 Mar 13 2020 -0.59 1.41
Mar 21 2018 Germany €2.446.5bn 0.50 Feb 15 2028 0.60 1.281
Source: IFR

swaps for an SSA issuer in the US dollar
Teflon Italian bond market market in 2018.

-EANWHILEûTHEû.ORWEGIANûLOCALû
government funding agency printed at 1bp
puzzles investors through mid-swaps, which was its tightest

US dollar benchmark since 2013.
4HEûDEEPûSUB ,IBORûSPREADûRULEDûOUTû
SSAR Market resilient even as end of ECB stimulus looms investors such as bank treasuries that have
been big providers of momentum on SSA
ITALY’s borrowing costs continue to slide even “When they finish they will own one-third of trades in recent years.
though many big investors are singling the Italian bonds and at maturity they will buy back h9OUREûRULINGûOUTûBANKûTREASURIESûBUTû
country out as the eurozone member most (reinvest). For me, the stock is a very strong there’s still good demand from central
vulnerable to a withdrawal of European Central argument,” said Roberto Coronado, senior banks who are looking at the spread versus
Bank stimulus, Reuters reports. portfolio manager, investment-grade credit at 53û4REASURIESvûTHEûBANKERûSAIDûh9OUûALSOû
The third largest of the 19 economies that use PineBridge Investments. GETû53ûREALûMONEYûLOOKINGûATûTHISv
the euro is second only to Greece as the bloc’s But for others, the declining “flow” of ECB .)"ûPRICEDûATûBPûOVERû4REASURIESû
most indebted, and is seen as fragile even after bond purchases cannot be ignored and as that WHILEû+".ûCAMEûATûPLUSûBP
recovering from a decade in or near recession. occurs, investors are likely to pay more attention 4HEûMARKETûMOVESûHAVEûMEANTûTOUGHERû
But as expectations grow that the ECB will wind to individual country risks - putting widening conversations between the various
down its €2.55trn bond-buying programme late pressure on bond spreads. participants.
this year and start lifting interest rates in 2019, Bond market heavyweight Pimco’s chief h"ECAUSEûOFûTHEûMOVEMENTSûWEVEûSEENû
Italian bonds continue to surprise with strong gains. investment officer Andrew Balls identified Italy we’re ending up having conversations with
The yield premium investors demand for holding as the “long-term challenge” as the eurozone ISSUERSûEXPLAININGûTHATûSECONDARYûLEVELSûAREû
Italian 10-year bonds over top-rated German debt moves out of the stimulus era. NOTûREALLYûWHEREûTHEûMARKETûISvûANOTHERû
stood at 133bp last Wednesday - less than before “If you have a recession and a deterioration in banker said.
inconclusive March 4 elections delivered a surge for terms of fiscal metrics, you have the ECB out of QE
populist, high-spending parties. by that point … you could have a rerun of a lender IDA NEARS BREAKTHROUGH DEAL
“The question is, if the idiosyncratic issues of last resort type crisis,” Pimco’s Balls said.
won’t impact Italian bonds, what will? I think According to Jefferies, ECB asset purchases in Italy 4HEûINTERNATIONAL DEVELOPMENT ASSOCIATION,
what will impact them is the broader withdrawal have fallen to around €3.5bn at the start of 2018, the part of the World Bank that helps
of monetary stimulus across the euro area,” said from around €9bn between April and December last the world’s poorest countries, is
Scott Thiel, deputy chief investment officer for year and €12bn in the first three months of 2017. preparing the ground to make its
fixed income at BlackRock. The programme has helped Italy’s economy debut entry into the international
Thiel is underweight Italian bonds, and mend - it has enjoyed 13 consecutive quarters of markets, having met dealers in London on
believes the ECB’s withdrawal of stimulus growth and made progress tackling bad loans. 4UESDAY
will not be as smooth as the winding down of But over a tenth of the workforce is unemployed h4HEYûWEREûOPENLYûSAYINGûTHEYûWILLûDOûAû
quantitative easing in the United States. Not only and growth lags eurozone peers, while debt TRADEûAFTERû%ASTERvûSAIDûONEûBANKERûWHOû
is the ECB’s US$5.6trn balance sheet larger than equivalent to 130% of annual economic output ATTENDEDûTHEûEVENTûh)TSûNOTûGOINGûTOûBEûTHEû
the US Federal Reserve’s US$4.4trn, it is, unlike makes Italy particularly vulnerable. same size to begin with as the World Bank,
the Fed’s, still expanding. A slowing in that bond “flow” means Italian but it’s not every day you get a new supra
The ECB also has to be wary of individual bonds, which benefited disproportionately from ISSUERv
country risks, as withdrawing stimulus may have stimulus, should slowly return to reflect investor 4HEû)$!ûCOMPLEMENTSûTHEû7ORLDû"ANKSû
differing impacts within the bloc. pricing of relative country risks. ORIGINALûLENDINGûARMûTHEû)NTERNATIONALû"ANKû
Some factors explain the resilience of Italian Because of QE, Italy’s 10-year bonds - rated in the FORû2ECONSTRUCTIONûANDû$EVELOPMENTû4HEû
bonds. Data suggests Asian investors are Triple B category, at the lower end of investment- )"2$ûISSUESûAROUNDû53BNûINûBONDSûEVERYû
returning to European bond markets thanks to grade - carry yields below 2%. That is almost 100bp year.
a strong economy and positive yields, while the below 10-year bond yields in the United States, 4HEû)$!ûISûONEûOFûTHEûLARGESTûSOURCESû
increasing cost of dollar investments encourages which has a top Triple A credit rating with Moody’s. of assistance for the world’s 75 poorest
a switch to eurozone assets. “In 2019, we will move from abnormality in countries and lends money on
bond markets to normality and that means wider concessionary terms. Donors meet
STOCK VS FLOW bond spreads,” said Francois Savary, CIO at Prime EVERYûTHREEûYEARSûTOûREPLENISHû)$!û
The slow pace at which the ECB is set to run Partners. “Italy’s high debt levels, unstable political resources and review its policy
down its balance sheet - by letting its stock of situation, and reforms that have not followed those framework.
bonds mature rather than selling them off - in Spain and Portugal are why Italy is on the radar.” 4HEûMOSTûRECENTûREPLENISHMENTû)$!û
should also continue to support debt markets for And that is before any new coalition starts WASûlNALISEDûINû$ECEMBERûûANDûRESULTEDû
some time after new asset purchases end. to loosen purse strings. Ratings agency Fitch INûAûCOMMITMENTûOFû53BNûTOûlNANCEû
In addition, the central bank plans to reinvest forecasts more fiscal loosening in 2019. projects over a three-year period ending 30
cash from maturing bonds back into debt markets, Ten-year Italian yields could rise to 2.75% by June 2020.
helping limit upward pressure on bond yields. year-end, Capital Economics predicts. /FûTHATûlGUREûTHEûINSTITUTIONûWILLûRAISEû
The ECB is estimated to hold up to 28% of “Italy remains a zone of incertitude, so we prefer US$22.3bn-equivalent through the capital
Italian government bonds. According to Capital to be exposed to Spanish bonds than Italy,” said markets.
Economics, a shortage of eligible bonds in the Gaelle Mallejac, active management investment 4HEû7ORLDû"ANKû4REASURYûWILLûMANAGEûTHEû
eurozone has forced the ECB to buy €15bn extra director at Groupama Asset Management. funding programme, which could comprise
of Italian debt since 2015 for QE. Sujata Rao dollars, euros, renminbi, yen and sterling
issuance.

BONDS SSAR
4HEûTRANSACTIONûWILLûBEûTHEûlRSTûTIMEûTHEû While public-sector issuers have

)$!ûLEVERAGESûITSûEQUITYûTOûBLENDûDONORû previously been focused on the Green bond NON-CORE CURRENCIES
contributions with its own resources and format, there has been growing appetite
funds raised through debt markets. from the issuer base to look at the Social SSAs TARGET 10-YEAR KANGAROOS
)TûREPORTEDûANûEQUITYûBASEûOFû53BNû bond structure.
as of June 2017, the largest of any h)TûCANûBEûEASIERûFORûISSUERSûTOûlNDûSOCIALû Four European agencies and two
supranational. ASSETSûTOûlNANCEûTHOUGHûITûDEPENDSûONûTHEIRû supranationals accessed the 10-year
On Friday, Moody’s assigned a BUSINESSûMODELvûTHEûLEADûSAID Kangaroo segment last week to raise a
PROGRAMMEûRATINGûOFû!AAûTOûTHEû)$!SûGLOBALû h!LSOûSOMEûOFûTHEûBIGGERûINVESTORSûINûTHEû combined A$775m (US$600m).
debt issuance facility, mirroring its long- sector have got quite high standards that German agriculture agency RENTENBANK
term issuer rating and matching S&P’s AAA they need to meet to be able to invest in the !AA!!!!!! ûKICKEDûTHINGSûOFFûONû-ONDAYû
score. product and the ability to track what the with a A$125m tap of its 3.25% April 12 2028
4HEû)$!ûISûNOTûTHEûONLYûDEVELOPMENTûBANKû IMPACTûISûWHICHûCANûBEûMOREûDIFlCULTûIFû line to lift the outstanding size to A$625m.
looking to the capital markets as a way to you’re promoting things like housing or 4HEûJP Morgan-led reopening priced at
scale up replenishment resources and EDUCATIONv 100.533 for a yield of 3.1875%, 42bp wide of
optimize the use of balance sheet. Last year, CEDB printed an inaugural €500m asset swaps and 49bp over the May 2028
THEû#HINA LEDû!SIANû)NFRASTRUCTUREû SEVEN YEARû3OCIALû)NCLUSIONûBONDûINû ACGB.
)NVESTMENTû"ANKûSAIDûITûWOULDûSEEKûTOûISSUEû ûONûINTERESTûOVERûõBNû4HEûPROCEEDSû INTER-AMERICAN DEVELOPMENT BANKû!AA!!!
in dollars, although a deal is yet to appear. of that trade were reserved for AAA) added A$200m to its 3.10% February 22
lNANCINGûELIGIBLEûLOANSûTOûSUPPORTû 2028 bond the following day, taking the
social housing, education and vocational outstanding size up to A$540m.
EUROS training, and job creation and preservation 4HEûTAPûVIAûSOLEûLEADûTD Securities, priced
in micro, small and medium-sized at 99.575 for a yield of 3.15%, 41bp and
CEDB BUILDS SOCIAL BOND CURVE enterprises. 47.75bp wide of asset swaps and ACGBs.
WITH SECOND OUTING CEDB plans to build its curve in the !LSOûONû4UESDAYû$UTCHûAGENCYû
format with a yearly outing. NEDERLANDSE WATERSCHAPSBANKûRATEDû!AA!!!û
4HEûCOUNCIL OF EUROPE DEVELOPMENT BANK added -OODYS30 ûTAPPEDûITSûû*ULYûû
AûNEWûPOINTûONûITSû3OCIALû)NCLUSIONûBONDû 2028s for A$100m to increase the
CURVEûLASTû4UESDAYûBRINGINGûAûõMûSEVEN STERLING outstanding amount to A$465m.
YEARûmATûTOûFAIRûVALUEûTHOUGHûDEMANDûOVERû HSBC arranged the tap, priced at 101.342
€700m was not as strong as for its previous UK DMO ANNOUNCES Q1 GILT PLANS for a yield of 3.29%, 54bp and 61bp over
outing in the format. asset swaps and ACGBs.
4HEûSUPRANATIONALûPRICEDûTHEûDEALûATûBPû 4HEûUK DMO has announced one long .7"ûADDEDûAûFURTHERû!MûTOûTHEûLINEû
THROUGHûMID SWAPSûBPûTIGHTERûTHANû)04Sû conventional syndication for Q1 of its new three days later, also through HSBC, pricing
via joint leads Credit Agricole, DZ Bank, lNANCIALûYEARû4HEûDEALûMATURINGûINûTHEû it at 101.639 for a yield of 3.261%, 53bp and
Goldman Sachs and Rabobank. 2070-2073 range, is scheduled for mid to late 62bp wide of asset swaps and ACGBs.
h4HEYûDIDNTûOFFERûAûPREMIUMûOVERûWHEREû May. ASIAN DEVELOPMENT BANKû!AA!!!!!! û
WEûSAWûFAIRûVALUEvûAûLEADûSAIDûh4HEYûWEREû #ONVENTIONALûSYNDICATIONSûAREûEXPECTEDû tapped its 3.3% August 8 2028s for A$100m
able to achieve this level as a result of the to total £9bn and linkers £8bn - a combined ONû4HURSDAYûINCREASINGûTHEûSIZEûOFûTHEûLINEû
choice of format and also the fact that it’s a 16.5% of the DMO’s planned £102.9bn of Gilt to A$700m.
smaller issuer. Council of Europe tends to do sales in 2018-2019. Nomura was sole lead on the addition,
õBNûTRADESv 4HEREûWILLûBEûûAUCTIONSûINû1ûSTARTINGû which priced at 101.359 for a yield of
4HEûLEADSûLOOKEDûATûTHEûBORROWERSû on April 4 with a tap of the 0.75% July 2023s. 3.145%, 41bp and 47.25bp wide of asset
OUTSTANDINGû!PRILûû3OCIALû)NCLUSIONû Auctions are planned to total £79.3bn, or swaps and ACGBs.
bond but also its normal curve in order to 77.1% of total requirements. /UTSIDEûTHEû4RIPLEû!ûSEGMENTû3WEDENSû
establish fair value, with the level coming in 4HEûREMAININGûaBNûORûûISûSOûFARû state-owned SVENSK EXPORTKREDITûRATEDû!A
at around less 21bp-22bp. hUNALLOCATEDv !!û-OODYS30 ûSOLDûAû!Mû YEARû
ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS
bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%)
1 HSBC 11 3,498.07 10.8 1 Credit Agricole 7 3,952.63 12.5 1 DGZ-DekaBank 13 2,165.88 17.9
2 SG 9 3,061.50 9.5 2 UniCredit 5 3,719.95 11.8 2 UniCredit 12 1,570.45 13.0
3 UniCredit 4 2,726.56 8.4 3 Barclays 5 3,581.26 11.3 3 LBBW 9 1,241.86 10.2
4 BNP Paribas 5 2,425.45 7.5 4 Commerzbank 5 3,511.72 11.1 4 HSBC 8 1,187.97 9.8
5 Goldman Sachs 3 2,099.74 6.5 5 JP Morgan 3 2,302.06 7.3 5 Nord/LB 8 952.94 7.9
6 Commerzbank 2 1,965.90 6.1 6 Goldman Sachs 3 2,218.37 7.0 6 Deutsche Bank 7 688.21 5.7
7 Credit Agricole 7 1,889.06 5.8 7 Deutsche Bank 5 1,941.70 6.2 7 JP Morgan 3 443.59 3.7
8 JP Morgan 7 1,879.68 5.8 8 SG 3 1,905.44 6.0 8 Cooperatieve Rabobank 1 403.77 3.3
9 Deutsche Bank 7 1,618.75 5.0 9 BAML 3 1,695.69 5.4 =8 Credit Agricole 1 403.77 3.3
10 Natixis 5 1,458.04 4.5 10 NatWest Markets 1 1,481.08 4.7 10 BBVA 2 400.01 3.3
Excluding equity-related debt. Including publicly owned institutions. Excluding ABS/MBS. Excluding ABS/MBS.
Source: Thomson Reuters SDC code: N6 Source: Thomson Reuters SDC code: N5 Source: Thomson Reuters SDC code: N7

Kangaroo via joint lead managers RBC Capital Matt Brill, senior portfolio manager at )NITIALûPRICEûTHOUGHTSûONûTHEûlXED RATEû
Markets and TD Securities. )NVESCOûh)FûYOUûWANTûTOûREDUCEûRISKûYOUû TRANCHESûWEREû4REASURIESûPLUSûBP BPû
4HEûû3EPTEMBERûûûPRICEDûATû WANTûTOûOWNû#63ûANDû)N"EVû4HEYREûBETTERû 130bp-135bp, 145bp-150bp, 165bp area and
99.603 for a yield of 3.295%, 54bp and to trade than any of the other positions you 185bp area. By launch, those levels had
62.25bp over asset swaps and ACGBs. HAVEûINûYOURûPORTFOLIOvûHEûADDED narrowed to 90bp, 120bp, 135bp, 150bp and
On Friday, KOMMUNALBANKEN NORWAY, rated )TûWASûTHEûCOMPANYSûlRSTûFORAYûINTOûTHEû 165bp.
!AA!!!û-OODYS30 ûTAPPEDûITSûû market since 2016, when it priced a 4HEûACTIVEûBOOKRUNNERSûWEREûBank of
July 24 bond for A$100m to lift the US$46bn behemoth of a deal - the second America Merrill Lynch, Barclays, Deutsche Bank,
outstanding size to A$505m. largest corporate bond in market history. JP Morgan and Mizuho.
HSBC was sole lead for the reopening, !"û)N"EVûLAUNCHEDûlVEûlXED RATEûTRANCHESû
priced at 100.260 to yield 3.255%, 52bp and WITHûMATURITIESûOFûlVEûûûûANDûû UNILEVER PUSHES BOND THROUGH
60.5bp over asset swaps and ACGBs. YEARSûASûWELLûASûAûlVE YEARûmOATER NERVOUS MARKET
)NûTHEûDOMESTICû33!2ûMARKETûNORTHERN )TûPAIDûINVESTORSûAû.)#ûOFûBPûONûITSûNEWû
TERRITORY TREASURY CORP, rated Aa2 by 10-year, compared with outstanding bonds, UNILEVER muscled a US$2.1bn four-part deal
Moody’s, tapped its 3.75% April 21 2033 ACCORDINGûTOû)&2SûCALCULATIONS OVERûTHEûlNISHûLINEûONû-ONDAYûASûTHEûHIGH
BONDûFORû!MûLASTû4HURSDAYûTOûINCREASEû h3PREADSûAREûWIDERûTHANûTHEYûWEREû grade new-issue market continued to
the outstanding size to A$205m. PREVIOUSLYvûSAIDû3COTTû+IMBALLûSENIORû languish in the wake of increased volatility.
4HEûREOPENINGûVIAûSOLEûLEADûUBS, priced at portfolio manager at BMO Global Asset 4HEûMAKERûOFû$OVEûSOAPûANDû"ENûû*ERRYSû
101.236 for a yield of 3.6425%, 75bp over the -ANAGEMENTûh)FûYOUûADDûTHATûONûTOPûOFû ice cream approached investors with new
April 2033 ACGB. rising US benchmark yields, you have a lXED RATEûBONDSûCARRYINGûMATURITIESûOFû
high-quality defensive name that probably THREEûlVEûSEVENûANDûûYEARS
lTSûAûPRETTYûBROADûAUDIENCEûTHATûWANTSûTOû By launch, the company had managed to
PUTûMONEYûTOûWORKv squeeze in pricing by up to 17bp from initial
Proceeds from the trade will be used for talk.
CORPORATES general corporate purposes, including the But investors remained price-sensitive
repayment of upcoming debt maturities in and orders dropped by about US$1.5bn as
2019 and 2020. levels were tightened - a large drop relative
US DOLLARS /Nû4HURSDAYûTHEûCOMPANYûANNOUNCEDûITû to the deal size.
would be redeeming four series of notes Final books were US$3.3bn, making the
INVESTORS DRINK UP AB INBEV’S totalling US$7.8bn with those maturities. deal less than twice covered.
JUMBO BOND #REDIT3IGHTSûSAIDûITûHASûANûhOUTPERFORMvû h)NûTHISûENVIRONMENTûWEûAREûLOSINGûMOREû
RATINGûONûTHEûBONDSûOFû!"û)N"EVûWHICHûISû ANDûMOREûPEOPLEûANDûAûLOTûQUICKERvûAû
)NVESTORSûGUZZLEDûANHEUSER-BUSCH INBEVSûSIX the midst of a deleveraging programme, BANKERûONûTHEûDEALûSAIDûh)TûUSEDûTOûBEûTHATû
PARTû53ûDOLLARûBONDûOFFERINGûONû4UESDAYû relative to its European food and beverage you could move pricing 15bp and no one
placing US$35.2bn of orders and allowing peers. WOULDûBLINKû4HATSûJUSTûNOTûTRUEûANYûMOREv
the brewery giant to tighten spreads by up h7EûCONCEDEûTHEûOPTICSûOFûTODAYSûLARGEû With four tranches pricing, Unilever was
to 25bp. NEWûISSUANCEûTOûPRE lNANCEûONEûTOûTWO YEARû able to get to its size despite the dropouts.
4HEûORDERûBOOKSûAREûTHEûLARGESTûSEENûSINCEû FUTUREûMATURITIESûMAYûBEûMILDLYûTROUBLINGvû And it did so paying new-issue premiums of
CVS shattered records earlier this month at THEûRESEARCHûlRMûSAIDûINûAûNEWûREPORT just 2bp-4bp compared with outstanding
US$114.6bn for its US$40bn trade. h4HEû!"û)N"EVûDELEVERAGINGûPLANûISûDRIVENû ISSUESûACCORDINGûTOû)&2ûCALCULATIONS
!"û)N"EVûlRSTûTELEGRAPHEDûAûMINIMUMû by projected improvement in Ebitda rather h4HEûBOOKûWASûMOREûTHANûENOUGHûTOû
size for the trade of US$5bn, a banker on the THANûSIGNIlCANTûREDUCTIONûOFûTHEûCOMPANYSû SUPPLEMENTûWHATûTHEYûWANTEDûTOûDOvûTHEû
deal said. But demand allowed the company 53BNûGROSSûDEBTûLOADv banker said.
to price a whopping US$10bn in bonds. 4HEûREPORTûSAIDû!"û)N"EVûMANAGEMENTû )NûSECONDARYûTRADINGûTHREEûOFûTHEûFOURû
h!SûTHEûMARKETûGETSûCHOPPIERûINVESTORSû HADûDELIVEREDûONûhSIGNIlCANTû%BITDAûGROWTHû tranches tightened immediately, the
WANTûTOûBEûINûBIGGERûMOREûLIQUIDûDEALSvûSAIDû DURINGû&9v EXCEPTIONûBEINGûTHEû YEARûWHICHûWASû
ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS
BOOKRUNNERS: 1/1/2018 TO DATE (EXCLUDING SOLE SELF FUNDED DEALS) BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share BOOKRUNNERS: 1/1/2018 TO DATE Managing No of Total Share
bank or group issues US$(m) (%) Managing No of Total Share bank or group issues €(m) (%)
1 BAML 21 5,552.12 10.5 bank or group issues US$(m) (%) 1 BNP Paribas 41 7,640.39 9.0
2 JP Morgan 22 5,207.83 9.9 1 JP Morgan 97 31,376.68 12.0 2 Goldman Sachs 20 6,322.34 7.4
3 Citigroup 15 4,323.13 8.2 2 BAML 89 26,815.98 10.2 3 SG 32 6,157.19 7.2
4 Barclays 13 3,841.25 7.3 3 Citigroup 87 23,049.70 8.8 4 UniCredit 27 5,872.08 6.9
5 Wells Fargo 20 3,094.05 5.9 4 Goldman Sachs 61 23,028.80 8.8 5 Deutsche Bank 32 5,170.20 6.1
6 Morgan Stanley 12 2,909.06 5.5 5 Barclays 45 20,113.06 7.7 6 HSBC 33 4,557.77 5.4
7 Goldman Sachs 12 2,603.24 4.9 6 Wells Fargo 62 17,333.07 6.6 7 Credit Agricole 27 4,552.85 5.4
8 MUFG 11 2,209.52 4.2 7 Morgan Stanley 66 16,882.91 6.5 8 JP Morgan 23 4,136.13 4.9
9 Mizuho 14 2,082.75 4.0 8 Mizuho 39 8,458.82 3.2 9 BAML 20 3,651.68 4.3
10 BNP Paribas 7 1,876.92 3.6 9 Deutsche Bank 30 8,256.28 3.2 10 ING 19 3,637.10 4.3
Total 52 52,659.51 10 MUFG 38 8,118.42 3.1 Total 124 85,001.11
Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Total 216 261,661.58 Excluding equity-related debt. FIGs, ABS/MBS.
and non corporates.
Source: Thomson Reuters SDC code: F6a Source: Thomson Reuters SDC code: F09a Source: Thomson Reuters SDC code: N8

BONDS CORPORATES
wrapped around reoffer, according to the latter were able to tighten the pricing )TSû/CTOBERûSûANDû/CTOBERûSû
-ARKET!XESS level by 12bp for a launch at 58bp. widened by 12bp on the mandate
Despite the slender book, it was a good 4HEûNEAR RECORDûSUPPLYûSEENûBETWEENû announcement before settling back to some
RESULTûFORûTHEûBORROWERûINûTHEûCONTEXT March 12 and March 15 has had a huge 10bp offside.
Average investment-grade spreads have IMPACTûONûTHEûYEARSûVOLUMESû)NûEARLYû IBERDROLASûõMûPERPETUALûNON CALLûSIXû
widened over 20bp since the asset class hit a March, volumes were down 30% year-on- Green hybrid and DANONE’s €300m seven-
new post-credit crisis low of 90bp over YEARûTHEYûAREûNOWûONLYûDOWNûû%VENûONû year Social bond issue were the other two
4REASURIESûATûTHEûBEGINNINGûOFû&EBRUARYû Monday last week, issuers were still hitting trades out last Monday, attracting a bit more
ACCORDINGûTOû)#%û"!-,ûDATA screens despite concerns around attention, with their books being around
And high-grade borrowers paid an average indigestion. twice covered.
.)#ûTHEûPREVIOUSûWEEKûOFûNEARLYûBPû ûBYû h)ûWASûSURPRISEDûTOûSEEûSOûMANYûISSUERSû h!ûLOTûOFûISSUERSûAREûNOWûREGRETTINGûNOTû
far the highest weekly level this year. COMINGûTOûTHEûMARKETû;ONû-ONDAY=û)TûWASûAû coming in January when the market
One syndicate banker away from the deal BITûOFûAûSHOCKûTOûTHEûSYSTEMvûONEûBANKERû CONDITIONSûWEREûINCREDIBLYûSUPPORTIVEvûSAIDû
said investors could get comfortable with said. a second banker.
high-quality, well-known credits. Unilever h)ûTOLDûANûISSUERûTHATûIFûTHEYûWANTEDûTOûGOû At the time, new issue concessions were
CARRIESû!!ûRATINGS THEYûSHOULDûBEûPREPAREDûTOûPRICEûATûTHEû)04û mostly in the single digits and books were
Unilever has been making headlines LEVELû4HEûONESûTHATûCAMEûPROBABLYûREALISEDû often more than three times subscribed.
recently after announcing it would make ITûWASNTûTHEûRIGHTûMARKETûTOûDOûSOv
Rotterdam its sole legal base, ending 88 ,ASTû-ONDAYûlVEûBORROWERSûADDEDûõBNû DANONE, IBERDROLA KICK OFF BUSY
years of a two parent-ownership structure. of supply, jumping in ahead of quarter-end SRI WEEK
4HEûCOMPANYûHASûHISTORICALLYûOPERATEDûWITHû and Easter.
two parent companies - a British plc GENERAL MOTORS brought the largest deal, a DANONE and IBERDROLA were at the spearhead
HEADQUARTEREDûINû,ONDONûANDûAû$UTCHû.6û õBNûDUAL TRANCHERûBUTûTHEûlNALûõBN OFûAûBUSYûWEEKûINûTHEû'REEN3OCIALûBONDû
based in Rotterdam. PLUSûBOOKûCONlRMEDûTHATûINVESTORSûWEREû sector, ahead of the COUNCIL OF EUROPE
Still, investors were not too bothered struggling to make room for more paper. DEVELOPMENT BANK, which surfaced on
about the move, the banker said. Launching at three-month Euribor plus 4UESDAYûWITHûAûSECONDû3OCIALûBONDûTRADE
Unilever began the review of its dual- BPûFORûTHEûFOUR YEARû&2.ûANDûMID SWAPSû 4HEûTRANSACTIONSûTIMINGûCOINCIDEDûWITHû
HEADEDûSTRUCTUREûLASTûYEARûAFTERûREBUFlNGûAû PLUSûBPûFORûTHEûSEVEN YEARûlXEDûTHEû THEû#LIMATEû"ONDû)NITIATIVESûANNUALû
53BNûTAKEOVERûOFFERûFROMû+RAFTû(EINZû pricing level barely moved from the tight CONFERENCEûWHICHûBEGANûONû4UESDAYûLASTû
At the time, it said a single entity would ENDûOFû)04SûONûTHEûSHORTûLEGûANDûDIDûNOTû week in London.
BENElTûTHEûCOMPANYûANDûSHAREHOLDERSû û budge at all on the longer portion. 4HEûDEALSûHELPEDûBOLSTERûVOLUMESûINûTHEû
partly by facilitating big-ticket M&A deals, A lead saw fair value in the high 40s on corporate sector, which is lagging far behind
according to Reuters. THEûmOATERûANDûINûTHEûHIGHûSûONûTHEûlXEDû the more than €11bn printed by public
h7EûCONTINUEûTOûBELIEVEûTHATû5NILEVERûWILLû 4HATûWASûBASEDûONû'-ûANDû&ORDûANDûIMPLIEDû sector issuers in the single currency year-to-
need to undertake large M&A to protect its premiums of about 8bp and 22bp. date.
LONG TERMûFUTUREvû#REDIT3IGHTSûANALYSTSû DEUTSCHE BOERSE and IMCD also failed to get Up until Monday last week, investment-
wrote. their books more than twice subscribed grade corporates had only raised €1.55bn in
Unilever could also be an acquisition despite coming with juicy starting THEûGREEN32)ûFORMATûACCORDINGûTOû)&2ûDATA
target itself - and some investors asked for a premiums – of around 15bp for the former h4HEûFOCUSûONûGREENûISûMASSIVEûNOWvûSAIDû
change-of-control clause in the new bonds, and up to 35bp for the latter. AûBANKERûh)NVESTORSûAREûACTIVELYûASKINGû
the banker said. Deutsche Boerse’s €600m 10-year printed about green supply. Some investors that
+RAFTû(EINZûMADEûAû53BNûOFFERûFORû at swaps plus 20bp, 5bp inside the tight end wouldn’t necessarily buy certain credits buy
Unilever in 2017, which was rejected. OFû)04SûONûBOOKSûOFûSOMEûõMûWITHûLEADSû them because it’s green, especially in the
h4HEûBOARDûMUSTûSURELYûSTILLûBEûINûDEFENCEû Commerzbank, Deutsche Bank and HSBC not .ETHERLANDSû)TûISûSOMETHINGûYOUûCANû
mode until it is beyond doubt that Kraft managing to move pricing from the leverage upon - if you can do green, of
(EINZûHASûDElNITELYûMOVEDûONvûANALYSTSû guidance stage. COURSEûITSûVERYûHELPFULv
wrote.
Citigroup, Deutsche Bank, HSBC and Morgan ALL SWISS FRANC BONDS EXCLUDING ALL INTERNATIONAL STERLING BONDS
Stanley were bookrunners. SECURITISATIONS EXCLUDING SECURITISATIONS
BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share Managing No of Total Share
EUROS bank or group issues SFr(m) (%) bank or group issues £(m) (%)
1 Credit Suisse 34 3,486.76 27.3 1 HSBC 27 4,062.03 12.6
BORROWERS LET DUST SETTLE 2 UBS 29 2,977.68 23.3 2 NatWest Markets 27 3,988.83 12.3
3 Verband Schweizerischer 3 2,221.72 17.4 3 Lloyds Bank 16 2,973.00 9.2
Only two corporates dipped their toes into 4 ZKB 16 1,194.61 9.4 4 RBC 19 2,917.95 9.0
the European investment-grade market 5 Raiffeisen Schweiz 7 875.44 6.9 5 Barclays 18 2,353.47 7.3
after last Monday, as the recent torrent of 6 BNP Paribas 8 734.06 5.8 6 JP Morgan 7 2,307.84 7.1
supply started taking its toll, impacting 7 Deutsche Bank 6 583.36 4.6 7 BAML 8 2,169.84 6.7
premiums and books, and pushing spreads 8 Commerzbank 3 204.47 1.6 8 Santander Global 5 1,726.29 5.3
wider in the secondary market. 9 HSBC 4 182.83 1.4 9 Nomura 11 1,548.46 4.8
DNA came with a €250m no-grow seven- 10 Kantonalbank Schwyz 1 98.06 0.8 10 TD Securities 12 1,495.68 4.6
YEARûRElNANCINGûDEALûONû4UESDAYûFOLLOWEDû Total 59 12,756.81 Total 71 32,318.77
by German leasing company GRENKE with a Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt.
õMûlVE YEARûONû7EDNESDAYû,EADSûONû Source: Thomson Reuters SDC code: K06b Source: Thomson Reuters SDC code: K05a

)BERDROLAûBROUGHTûITSûSECONDûGREENû agriculture, healthy foods entrepreneurship )04SûOFûBPûAREAûOVERûMID SWAPSûFORûAû
corporate hybrid, following its inaugural and social inclusiveness. launch at 72bp.
ûõBNûPERPETUALû.# YEARûPRICEDûINû h4HERESûNOTHINGûTOûREADûINTOûTHATûTRADEû
.OVEMBERû CONSORTIUM LAUNCHES NEW GREEN )TSûFAIRLYûSMALLûANDûWILLûGETûPLACEDûWITHûLOCALû
4HEû3PANISHûUTILITYûNAVIGATEDûAûTRICKYû INITIATIVE &INNISHûACCOUNTSvûAûBANKERûSAID
market backdrop for corporates, where )NûAûWIDERû'REENûBONDûPUSHûINTERNATIONALû )NûTHEûBUYBACKûOFFERûõMûOFûNOTESû
new-issue concessions have been going up climate organisations have rallied together WEREûVALIDLYûTENDEREDûATûTHEûEXPIRATIONû
and the sizes of order books shrinking. to launch a new initiative which will DEADLINEûONû-ARCHûûTHEûlNALûACCEPTANCEû
4HEûõMûPERPETUALûNON CALLû-ARCHûû initially target the US market. AMOUNTûISûEXPECTEDûTOûBEûSETûATûõMûFORûTHEû
attracted over €1.3bn of demand and priced 4HEûh'REENû"ONDû0LEDGEvûWASûANNOUNCEDû 2018s and €90m for the 2021s.
at 2.625%, the tight end of the 2.625%-2.75% BYûFORMERû5.ûCLIMATEûCHIEFûANDûCONVENERûOFû Land Securities is also planning a new
)04S Mission 2020, Christiana Figueres, at issuance together with a tender offer,
Food product company Danone brought a 4UESDAYSû#LIMATEû"ONDSû)NITIATIVEû marketing a potential dual-trancher in
debut social bond, which have not been that conference. sterling to repurchase some outstanding
common in the corporate sector relative to 4HEûINITIATIVEûAIMSûTOûSPURûFURTHERûGREENû bonds.
the SSA space. lNANCINGûINûBOTHûTHEûSHORTûANDûMEDIUMû TELEFONICA, which sold a €2.25bn dual-
)TûPRICEDûTHEûõMûSEVEN YEARûBONDûONû TERMûINITIALLYûFROMû53ûCITIESMUNICIPALITIESû TRANCHEûHYBRIDûINûMID -ARCHûTOûlNANCEûTHEû
books that closed over €650m, with the deal ANDûSTATESûANDûTOûAûLESSERûEXTENTû53û BUYBACKûOFûSIXûEUROûANDûSTERLINGû
coming at 32bp over mid-swaps, the tight corporates. subordinated bonds, has said it will accept
ENDûOFûTHEûBPû BP ûREVISEDûGUIDANCE )TûISûBASEDûONûTHEûPREMISEûTHATûPUBLICûANDû €1.776bn equivalent of the notes tendered,
h7EVEûBEENûPIONEERINGûAûDIFFERENTû PRIVATEûSECTORûBONDSûWHICHûlNANCEûLONG including €1.125bn of the priority two
number of initiatives that have a positive term infrastructure and capital projects, NOTESû4HEûEUROûûNOTESûTENDEREDûWILLûNOTû
impact and create sustainable value, and it’s must incorporate climate risk and impacts. be accepted for purchase.
important that we also lead the way with More than a dozen organisations, Meanwhile, a few corporates have
REGARDSûTOûTHEûlNANCIALûCOMMUNITYvû including Mission 2020, the Climate Bonds announced tender offers without a new
$ANONEû#&/û#ECILEû#ABANISûTOLDû)&2 )NITIATIVEûANDûTHEû#ûGROUPûOFûMAJORûCITIESû issuance, including STATKRAFT and RIO TINTO in
h)ûTHINKûITSûIMPORTANTûTHATûYOUûGETû around the world tackling climate change, euro and WALES & WEST in sterling.
DIVERSITYûINûTHEûWAYûYOUûlNANCEûYOURûMODELû are participating in the initiative. Statkraft is targeting its €500m 6.625%
and in your investor base somehow. Some 4HEûINITIALûAIMûOFûTHEûPLEDGEûISûTOûGATHERû NOTESûDUEû!PRILûûûANDû2IOû4INTOûISû
investors that participated were ESG SIGNIlCANTûMOMENTUMûINûTHEûRUNûUPûTOûTHEû looking to repurchase up to US$850m
investors we hadn’t seen before. And then, Global Climate Action Summit, due to be equivalent of its €750m 2% May 2020 and
we were able to get attractive conditions HELDûINû3ANû&RANCISCOûINû3EPTEMBERû4HEû €500m 2.875% December 2024 notes.
overall to continue improving the cost of campaign will then run into 2019. Wales & West Utilities launched on
OURûDEBTv -ONDAYûLASTûWEEKûAûMAXIMUMûaMûCASHû
.EWû3OCIALû"ONDû0RINCIPLESûWEREûRELEASEDû DNA JOINS LM FRAY TENDERûFORûITSûSUB CLASSû"ûaMûlXEDûTOû
ATû)#-!SûTHIRDû'REENû"ONDû0RINCIPLESû mOATINGûRATEûGUARANTEEDûBONDSûDUEû
annual general meeting in Paris last year, Finnish telecoms operator DNA made a timid 4HEûSECONDûBANKERûNOTEDûTHATû@DRYûTENDERû
aimed at helping bringing new issuers and APPROACHûTOûTHEûMARKETûONû4UESDAYûLASTû offers, once mainly done by Southern
ASSETûCLASSESûTOû32)ûINVESTORS week, coming with a €250m no-grow seven- Europe corporates, have become more
But corporates, especially non-utility YEARûTHATûWILLûRElNANCEûITSûOUTSTANDINGû common across Europe because they are
ones, have lagged behind other borrowers in õMûû.OVEMBERûSûANDûITSû better understood by both issuers and
adopting the format. €150m 2.875% March 2021 notes, which investors.
Danone said the proceeds of the bond were subject to a tender offer. h&ORûISSUERSûITSûNOTûNECESSARILYûMOREû
would be used for eligible social projects as Although the deal was less than twice EXPENSIVEûTOûLAUNCHûAûTENDERûOFFERûWITHOUTûAû
DElNEDûINûTHEûSOCIALûBONDûFRAMEWORKû covered - books were over €460m - leads NEWûISSUANCEûPREMIUMSûTENDûTOûBEûTHEû
PREPAREDûBYûTHEûCOMPANYû4HESEûINCLUDEû Nordea (B&D) and OP Corporate Bank were able SAMEvûHEûSAIDûh"UTûTHEûTAKE UPûANDûSUCCESSû
among others, responsible farming and to tighten the pricing level by 13bp from RATEûTENDûTOûBEûLOWERûINû@DRYûTENDERûOFFERSû
4HEûDECISIONûTOûDOûONEûORûTHEûOTHERûREALLYû
ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN STERLING depends on the cash position of the
BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE COMPANYv
Managing No of Total Share Managing No of Total Share Meanwhile, investors are in some cases
bank or group issues €(m) (%) bank or group issues £(m) (%) happy to give up bonds for more cash given
1 SG 62 19,552.95 6.9 1 HSBC 4 439.11 15.7 how tight spreads still are.
2 Barclays 52 18,124.20 6.4 2 Lloyds Bank 4 374.49 13.4 h/URûGENERALûBIASûINûOURûPORTFOLIOûOVERûTHEû
3 BNP Paribas 62 17,779.93 6.3 3 Barclays 4 366.47 13.1 past several quarters has been risk reduction
4 Credit Agricole 55 17,264.18 6.1 4 MUFG 3 248.53 8.9 INûTHEûFACEûOFûTIGHTERûSPREADSvûSAIDûANû
5 JP Morgan 47 16,759.37 5.9 5 NatWest Markets 3 238.82 8.5 investor last week.
6 Deutsche Bank 67 15,943.82 5.6 6 RBC 2 174.49 6.2 h/BVIOUSLYûTHEûTENDERSûWHENûTHEYûDOû
7 HSBC 76 15,802.65 5.6 7 Morgan Stanley 1 160.00 5.7 come, are typically at a premium to the
8 UniCredit 57 15,773.29 5.6 8 Deutsche Bank 1 149.34 5.3 market, so we’re very happy to see tenders
9 Goldman Sachs 32 14,506.54 5.1 9 BNP Paribas 2 134.05 4.8 ATûAûGOODûLEVELûANDûEFFECTIVELYûTAKEûPROlTSû
10 Citigroup 42 12,049.62 4.3 10 Mizuho 2 115.52 4.1 4HEûONLYûCONCERNûISûFORûCERTAINûRAREûISSUERSû
Total 327 283,223.40 Total 10 2,796.31 )FûTHEYREûONûAûGOODûTRAJECTORYûYOUûMIGHTû
Excluding ABS/MBS, equity-related debt. not want to tender because you might not
Source: Thomson Reuters SDC code: N9 Source: Thomson Reuters SDC code: N8a BEûABLEûTOûGETûBONDSûBACKûFROMûTHEMv

BONDS CORPORATES
EUROCLEAR EYES HYBRID TRANCHE of the proceeds to subsidiary Euroclear Bank Unfortunately, market conditions were
IN SECOND OFFERING INûAûFORMûTHATûQUALIlESûFORûTHEûREGULATORYû AGAINSTûTHEûDEALûANDûONû4UESDAYûITûWASû
minimum requirement for own funds and postponed until further notice.
EUROCLEAR INVESTMENTS is gearing up for a ELIGIBLEûLIABILITIESû-2%,vû30ûWROTEûINûAû Credit Suisse was sole lead. Proman is rated
MAXIMUMûõMûTWO PARTûOUTINGûTHATû press release. "A ûBYû3WISSûRATINGûAGENCYûFEDAlN
could come this week and will include a h4HEûDOWNSTREAMûINSTRUMENTSûAREû )NDUSTRIALûSYSTEMSûMAKERûGEORG FISCHER,
hybrid tranche. intended to protect the bank’s senior DESCRIBEDûBYûAûLEADûOFlCIALûASûAûhHIDDENû
4HEûHOLDINGûCOMPANYûFORû%UROCLEARû"ANKû CREDITORSûBYûlNANCINGûAûRECAPITALISATIONûINûAû JEWELvûINûTHEû3WISSûCORPORATEûMARKETûFAREDû
has only come to market once before, and is RECOVERYûORûRESOLUTIONûSCENARIOv BETTERûTHEûNEXTûDAY
targeting a minimum €300m 12-year senior )TûMANDATEDûCommerzbank, UBS and ZKB to
unsecured and a minimum €300m 30-year PIPELINE FILLS WITH REITS lead a new minimum SFr150m (US$158m)
non-call 10 hybrid via Citigroup as global 10-year.
coordinator and structurer, joined by MUFG 4HEûSUPPLYûmOODûTHATûDOMINATEDûTHEû 4HEûLEADSûSOUNDEDûOUTûTHEûMARKETûATû
as lead manager. European corporate market a week ago mid-swaps plus 55bp-60bp, before opening
7ITHûMEETINGSûONû-ONDAYûANDû4UESDAYûAû turned into a trickle but the deal pipeline is books at plus 55bp area (equivalent to
deal could come as early as Wednesday, STILLûlLLINGûUPûANDûINCLUDESûAûNUMBERûOFû GOVERNMENTûBONDSûPLUSûBPûAREAû
although a lead stressed that timing would 2%)4SûTHREEûOFûWHICHûAREû!USTRALIAN area yield).
depend on the market and how eager the Shopping centre owner STOCKLAND joined 4HATûALLOWEDûFORûANûALL IMPORTANTû PLUSû
issuer was to come before the Easter THEûQUEUEûONû4UESDAYûLASTûWEEKûHAVINGû yield and coupon, and it eventually came
weekend. mandated Commonwealth Bank of Australia, with a 1.05% coupon and 100.331 reoffer
/Nû-ONDAYûLASTûWEEKû)BERDROLAûBROUGHTû HSBC and JP Morgan for a European price for a 1.015% yield.
its second Green hybrid, a €700m perp non- ROADSHOWûSTARTINGûONû-ARCHûû4HEû2%)4ûISû /NEûLEADûOFlCIALûSAIDûTHEûBP BPûNEWû
call March 2024, which attracted over targeting a seven to 12-year minimum issue premium was a key selling point to get
€1.3bn of demand and was priced at 2.625%, €300m transaction. THEûlNALû3&RMûSIZEûDONEûINûAûVOLATILEû
THEûTIGHTûENDûOFûTHEûûTOûû)04Sû"Yû Peers Vicinity and Scentre Group both market.
&RIDAYûITûWASûBIDûmATûTOûITSûPARûREOFFERûPRICEû started roadshows on March 12, the 4HEREûWASûSOMEûINVESTORûPUSH BACKûBUTû
ACCORDINGûTOû4HOMSONû2EUTERSûDATA former targeting a seven to 10-year euro or more on the longer duration than on any
4ELEFONICASûDUAL TRANCHEûHYBRIDûWHICHû US dollar transaction and the latter a seven pricing matters.
printed the week prior, has fared less well, to 12-year offering, either in euros or Georg Fischer has a SFr150m 1.50% deal
bid a point lower than reoffer on its perp sterling. coming due in September 2018, and
non-call December 2023 and 1.375 points h!USTRALIANû2%)4SûOFTENûCOMEûTOGETHERû management wanted to get in with an early
down on the non-call September 2026s. it’s the same with Australian banks. When RElNANCINGûFORESEEINGûHIGHERûRATESûANDû
Jorgen Kjaersgaard, head of European one shows that the market is open, others more volatility later in the year.
credit at AllianceBernstein, said there was SEEûANûOPPORTUNITYûASûWELLvûSAIDûTHEûlRSTû )NûTHEûENDûTHEûDEALûSAWûAûFAIRLYûHIGHû
still appetite for hybrid paper. banker. granularity, with 84 accounts taking part for
h4HERESûDEMANDûFORûHYBRIDSûYOUûJUSTû h"UTûWHATEVERûPRICEûTHEYûWEREûEXPECTINGû a very small SFr2.4m average ticket size.
need to do much more work around the when they announced the roadshow, it has Asset managers, private banks and insurers
structures and where you are in the capital CERTAINLYûGONEûWIDERûNOWv took most of the paper.
STRUCTUREvûHEûSAID Away from Australia, Swedish residential 4HEûCOMPANYûISûRATEDû:+"û"""5"3û"""
h4HEûDEDICATEDûFUNDSûINûTHEûMARKETûHAVEû property company AKELIUS ended its FEDAlNû"""#3û"""6ONTOBELû"""ûSTABLE
grown rapidly and haven’t seen much roadshow on Wednesday for a potential
OUTmOWû4HEûTIMINGûISûMAYBEûAûBITû €300m-€500m hybrid offering through
questionable with the market being a bit Deutsche Bank as sole structuring adviser and NON-CORE CURRENCIES
WIDERûBUTûTHEûDEMANDûWILLûBEûTHEREv joined by Barclays and Danske Bank as
Euroclear’s only bond issue is a €600m 10- bookrunners. VPN MAKES 10-YEAR RETURN
year, which printed at mid-swaps plus 52bp Overall softer sentiment in the market
INû.OVEMBERûû)TûWASûQUOTEDûATûBPû has deterred the company from coming VICTORIA POWER NETWORKS, rated A- (S&P),
over on Friday last week, according to quite yet. had the local corporate market all to
4RADEWEBûPRICES itself last week when it raised A$225m
4HEûLEADûWHOûSAIDûAûMIXûOFûINVESTORSûHADû (US$174m) from a 10-year medium-term
STARTEDûLOOKINGûATûTHEûDEALûFROMûlNANCIALû SWISS FRANCS note via joint lead managers ANZ, CBA and
and corporate angles, pinpointed Deutsche Mizuho.
Boerse as the closest comparable for the A TALE OF TWO SWISS CORPORATES 4HEûû-ARCHûûSûPRICEDûONû
senior tranche. Friday at 99.511 for a yield of 4.06%, at the
Deutsche Boerse’s €600m 10-year came PROMAN HOLDING looked to open the week for tight end of 135bp area guidance, 133bp
on Monday at swaps plus 20bp, 5bp inside corporate borrowers in Swiss francs with a wide of asset swaps.
THEûTIGHTûENDûOFû)04SûONûBOOKSûOFûSOMEû lVE YEARûMARKETEDûATûûAREA /Nû!UGUSTûûLASTûYEARû60.ûSOLDûAû
õMû)TûWASûBIDûBPûWIDERûONû&RIDAY )TSûOUTSTANDINGûûûHADûDROPPEDû !Mûû YEARû-4.ûPRICEDûBPû
h)NûTHEûSUBORDINATEDûSPACEûCOMPARABLESû from a par bid early the previous week to wide of asset swaps.
AREûAûMATTERûFORûDEBATEvûSAIDûTHEûBANKER 99.00 on Monday after news of the new
%UROCLEARûISûRATEDû!!ûMINUS!!ûBOTHû bond broke, sending the yield from 3.50% to WYUNA WATER READIES A$123m SALE
STABLE ûBYû30&ITCHûATûTHEûSENIORûLEVELûWITHû 3.76%.
THEûHYBRIDûEXPECTEDûTOûBEû!! On a Z-spread basis, the 2022s were bid at WYUNA WATER is readying a A$123m offering
h7EûUNDERSTANDûTHATû%UROCLEARû plus 391bp, putting the new paper very of senior secured amortising bonds to be
)NVESTMENTSûWILLûDOWNSTREAMûTHEûMAJORITYû much in line with its curve. fully amortised by December 2034.

Aquasia is debt adviser on the sale to the While investors were again price-sensitive notes priced 150bp and 180bp wide of
Australian institutional market. WHENûEVALUATINGûTHEûOFFERINGSûFROMû!)'û 4REASURIESûBPûINSIDEûANDûINûLINEûWITHûINITIALû
Moody’s has assigned a A1 rating to the MetLife and Prudential Financial, some THOUGHTSûRESPECTIVELYû!û53MûSIX YEARû
bonds, which will rank pari passu with order books seemed to be healthier than NON CALLûlVEûmOATING RATEûNOTEûPRICEDûBPû
Wyuna Water’s other senior secured debt. those seen a week earlier. wide of three-month Libor.
4HEûPROCEEDSûWILLûRElNANCEûAûMAJORITYûOFû AMERICAN INTERNATIONAL GROUP’s US$2.5bn 4HEûTOTALûORDERûBOOKûOFû53BNûWASûLESSû
THEûISSUERSûEXISTINGûDEBTûCOMPRISINGû three-part trade of 10 and 30-year senior than half the US$5.1bn of demand secured
A$133m of June 2021 nominal annuity unsecured and 30-year non-call 10 junior FORûLASTû.OVEMBERSûIDENTICALûTHREE TRANCHEû
amortising bonds, A$22m of March 2022 subordinated notes on Monday faced a -ACQUARIEû'ROUPûOFFERINGû4HATûPRINTûRAISEDû
INmATION LINKEDûANNUITYûAMORTISINGûBONDSû tougher issuance environment than the 53BNûATû4REASURIESûPLUSûBPûANDû
and A$30m of March 2021 non-amortising other issuers, but it got a solid reception. BPûBOTHûBPûINSIDEû)04S
CAPITALûINDEXEDûBONDS 4HEûPRICINGûPROGRESSIONûTHROUGHû 4HISûTIMEûAROUNDû-ACQUARIEûALSOûHADûTOû
Wyuna Water is a special purpose vehicle, bookbuilding on the tranches was 12.5bp- PAYûSIGNIlCANTLYûHIGHERûNEWûISSUEû
with a contract from state-owned Sydney 15bp and order book coverage was about 2.5 CONCESSIONSûOFûBPûANDûBPûFORûTHEûNEWûSIX
7ATERûTOûOPERATEûTWOûWATER lLTRATIONûPLANTSû TIMESû4HEûNEW ISSUEûCONCESSIONûWASûALSOû YEARûNON CALLûlVESûANDû YEARûNON CALLûSû
until 2036. roughly 3bp-7bp - not in the double digits, as VERSUSûJUSTûBPûANDûBPûLASTû.OVEMBER
ONûRECENTûDEALSû4HEûBONDSûWEREûTRADINGû Macquarie Group was met with another
INVESTORE SETS TIGHT MARGIN AROUNDûBPûTIGHTERûBYû4HURSDAY lukewarm reception for its inaugural euro
Optically, the response looked solid, senior unsecured bond printed on February
INVESTORE PROPERTY has set the margin at the although one banker argued that books û4HEûõMûSEVEN YEARûNON CALLûSIXûBONDû
tight end of mid-swaps plus 150bp-170bp could have been larger, but there were some then priced at the wide end of guidance on
GUIDANCEûFORûANûUNRATEDû.:MûûSIX drop-outs after the spreads were tightened tepid demand.
year retail note offer. DURINGûBOOKBUILDINGû ûAûREmECTIONûOFûPRICEû US bank holdcos have been issuing
Westpac is arranger and joint lead sensitivity among investors. callable euro-denominated bonds to comply
manager, with ANZ, Deutsche Craigs and Optics were not as good on METLIFE’s with the country’s total loss-absorbing
Forsyth Barr on the offer, which closes on 53MûlXED TO mOATûPREFERREDûDEALûONû capacity regime, but Macquarie Group’s use
April 12. 4UESDAYûWITHûITSûPRICINGûLEVELûOFûû OFûTHEûINSTRUMENTûREmECTSûITSûCONSERVATIVEû
merely in line with initial price talk of 5.875% internal liquidity rules, under which bonds
AREAû4HEûlNALûBOOKûWASûJUSTû53M are no longer treated as term debt when
4HEREûHASûNOTûBEENûMUCHûRECENTûSUPPLYû maturities fall below 12 months.
from insurance companies, so MetLife Meanwhile, compatriot QBE INSURANCE
FIG should have got a lot of attention - but it GROUP, rated A- (S&P), bought back US$291m
followed similar structures from other of its US$300m 3.0% May 25 2023 Reg S bond
issuers, which may have sapped some through a tender offer arranged by dealer
US DOLLARS liquidity for the deal, said one investor. manager HSBC.
h)TûSHOULDûHAVEûHADûAûSIXûHANDLEûONûTHEû 4HEûREPURCHASEûOFûTHEûSûJUSTûSIXû
MIXED RESULTS FOR DOLLAR FIG DEALS YIELDû;FORûAûBETTERûRESPONSE=vûSAIDûTHEû months after issuance, helps reduce QBE’s
investor. debt-to-equity ratio from 40.8% towards its
)NVESTORûRESPONSESûTOûTHEû&)'ûBONDSû Bankers said the market was still target range 25%-35%.
ANNOUNCEDûLASTûWEEKûWEREûAûMIXEDûBAGûINûAû constructive in terms of liquidity but money
US high-grade primary market that was was only available at a price.
seeking to brave through a squeeze in short- /Nû4HURSDAYûPRUDENTIAL FINANCIAL tested EUROS
term liquidity. that theory with US$1bn of 10 and 30-year
Most of these issuers got a decent senior unsecured notes that started the IBERCAJA TO BRING “ONE-AND-DONE”
reception for their transactions, although bookbuilding process with up to 25bp in AT1
pricing progression and demand varied. new-issue concession.
4HISûPROMPTEDûINTERESTûANDûTHEûTRADEû IBERCAJA BANCO will have scarcity value on its
ALL FINANCIAL INSTITUTION BONDS IN EUROS ENDEDûUPûPRICINGûBPûINSIDEû)04SûBRINGINGû SIDEûASûITûSELLSûANûINAUGURALû!DDITIONALû4IERûû
BOOKRUNNERS: 1/1/2018 TO DATE THEûlNALûCONCESSIONûDOWNûTOûBP BP bond which is also likely to offer an
Managing No of Total Share 4HEûORDERûBOOKûWASû53BNûGIVINGû attractive yield given its Single B ratings.
bank or group issues €(m) (%) Prudential’s deal coverage of 2.7 times - a 4HEû3PANISHûBANKûEMBARKEDûONûAû
1 BNP Paribas 24 6,284.77 9.3 decent result in a tight market. ROADSHOWûFORûTHEûPERPETUALûNON CALLûlVE
2 Deutsche Bank 20 6,039.63 9.0 year note on Wednesday with meetings
3 SG 16 5,700.19 8.5 MACQUARIE TACKLES CHALLENGING wrapping up last Friday.
4 UBS 14 5,328.52 7.9 MARKET 4HEûDEALûWILLûONLYûBEûõMûINûSIZEûASû
5 Natixis 7 4,591.85 6.8 THATûISûALLû)BERCAJAû û3PAINSûNINTHûLARGESTû
6 Credit Agricole 7 3,710.32 5.5 MACQUARIE GROUPû!"""! ûOVERCAMEûAû bank by assets - needs to raise in this format.
7 HSBC 19 2,916.22 4.3 challenging market last Monday to sell a 7HILEû)BERCAJAûISûUNTESTEDûINûTHEû!4û
8 Barclays 13 2,673.32 4.0 53BNûTHREE PARTû!2EGû3ûBONDû sector, it brought a€500m 10-year non-call
9 Lloyds Bank 4 2,486.61 3.7 through a blue-chip line-up of US bookrunners lVE YEARû4IERûûINû*ULYûû4HATûBONDûWASû
10 NatWest Markets 8 2,368.28 3.5 comprising Bank of America Merrill Lynch, less than twice covered and priced at the
Total 89 67,276.67 Citigroup, HSBC, JP Morgan and Wells Fargo, as wide end of the 4.875%-5% guidance but has
Including banks, insurance companies and finance companies. Excluding well as the issuer’s own syndication team. since rallied to around 3%.
equity-related and covered bonds. Excluding publicly owned institutions.
4HEû53MûûSIX YEARûNON CALLûlVEû At the time, the bank still had a high level
Source: Thomson Reuters SDC code: N11 and US$500m 4.654% 11-year non-call 10 OFûNON PERFORMINGûASSETSûAûLOWû#%4ûRATIOû

BONDS FIG
ANDûAûHUGEûRELIANCEûONûDEFERREDûTAXûASSETSû joint lead manager alongside BBVA, 4HEûPRICINGûALSOûHADûTOûENTICEûINVESTORSû

though it has made decent progress since. JP Morgan and UBS. into a non-investment-grade security –
3INCEûûITûHASûREDUCEDûITSû.0!SûBYû EXPECTEDûATû"A"""""ûMINUSûALLûPOSITIVEû
ûWHILEûITSûFULLYûLOADEDû#%4ûRATIOûHASû AIB USHERS IN IRISH SENIOR HOLDCO outlook).
increased to 11% from 9.6% over that period. WITH FIVE-YEAR BLOWOUT h)TûDOESûIMPACTûTHEûDEALûATûTHEûMARGINûBUTû
4HEûBANKûRATEDû"A""""ûISûONûPOSITIVEû for most big investors, they will have an off-
watch at both S&P and Fitch. AIB GROUPûOPENEDûTHEûMARKETûFORû)RISHûSENIORû INDEXûBUCKETûWHEREûTHISûCANûGOvûTHEûLEADû
/NEûBANKERûEXPECTEDûITûTOûPRICEûINûTHEûMIDû holding company debt in style last said.
TOûHIGHûSûTHOUGHûSOMEû)O)SûWEREûSAIDûTOûBEû 4HURSDAYûBRINGINGûAûõMûlVE YEARûTRADEû !)"ûWASûALSOûCLEARûONûTHEûDEALûSIZEûFROMû
inside that. that lured in more than €2.25bn of demand the start, indicating a no-grow €500m
$EMANDûFORû!4ûPAPERûISûNOTûINûDOUBTû despite a challenging market backdrop. amount.
after recent trades from Santander and 4HEûPERFORMANCEûCONTRASTEDûWITHûSOMEû h7EûKNOWûITSûAûBUYERSûMARKETûANDûTHISûISû
#AIXA"ANKû(OWEVERûBOTHûHADûTOûSTUMPûUPû recent trades, which have struggled to ONEûWAYûTOûADJUSTvûAûSECONDûLEADûSAIDû
50bp premiums as investors demanded generate multi-billion books as investors h3UPPLYûISûTHEûENEMYûRIGHTûNOWûNOTûYIELDSv
better compensation compared to tightly drag their feet in the new issue market.
PRICEDûTRADESûINû*ANUARYûSUCHûASû"ELlUSû Senior non-preferred and holdco debt in MANAGEABLE NEEDS
WHICHûISûNOWûBIDûSIXûPOINTSûBELOWûPAR particular have come under pressure, !)"ûWASûABLEûTOûKEEPûITSûDEALûSIZEûMODESTû
caught up in the wider market sell-off. A GIVENûRELATIVELYûSMALLû-2%,ûNEEDSû)TûPLANSû
DIFFERENT ANIMAL ".0û0ARIBASûõMûûSEVEN YEARûPRICEDû to issue between €3bn and €5bn to build its
)BERCAJASûLIMITEDûNEEDSûMAKEûITSûTRANSACTIONû in mid-March is 10bp wider than its swaps buffers of loss-absorbing debt.
a completely different animal to those from PLUSûBPûREOFFERûLEVELûFORûEXAMPLE "ANKûOFû)RELANDûWHICHûALSOûHASûMODESTû
repeat issuers, however, when investors can 4HEûSHEERûQUANTITYûOFûSUCHûSUPPLYûHASûALSOû MREL needs, priced a dual-tranche sterling
PICKûANDûCHOOSEûBETWEENûTRADESû)BERCAJASû undermined performance. Banks have ANDû53ûDOLLARûHOLDCOû4IERûûINûûATûTHEû
bond will be less liquid, but that should be issued just under €30bn this year, up 30% TIMEûTHEûlRSTû)RISHûBANKûDEALûSINCEû*ANUARYû
factored into the pricing. versus the same period in 2017. 2016.
h)FûYOUûWANTûTOûOWNûTHISûYOUûHAVEû h)ûTHINKûTHEûWEIGHTûOFû3.0ûANDûHOLDCOû )SSUANCEûHADûBEENûTHINûONûTHEûGROUNDûASû
BASICALLYûONEûCHANCEvûSAIDûAûLEAD ISSUANCEûISûINTERESTINGû)MûJUSTûTRYINGûTOû the country’s two largest lenders spent time
4HATûISûNOTûTHEûONLYûDIFFERENCEû4HEûBACK ENDû AVOIDûITûFRANKLYvûONEûINVESTORûSAID setting up holding companies. Bank of
spread - which determines the new coupon h4HEREûISûJUSTûSOûMUCHûOFûITû)ûCANTûREALLYû )RELANDûISûALSOûEXPECTEDûTOûBRINGûSENIORû
should the bond not be called - has re-emerged see it performing that well. Even in a bad holdco debt.
ASûAûMAJORûPOINTûOFûFOCUSûINûTHEû!4ûSECTOR market, banks are issuing, and they’ll come For some, that rarity value is not enough,
!SûITûWILLûBEûHIGHERûFORû)BERCAJAûITûWILLû back in a good market. however.
likely be less of a point of contention than h)TSûOKAYûATûTHEûVERYûSHORTûENDûANDûYOUû h)ûTENDûTOûlNDû)RISHûBANKSûOVERVALUEDvû
its larger, better-rated peers. can opportunistically pick up stuff like that THEûINVESTORûSAIDûh)MûNOTûNECESSARILYûAûFANû
h4HEREûISûAûKINDûOFûPERVERSEûSET UPûATûTHEû 3ANTANDERû5+ûmOATERûTHEûSTUFFûTHATûISûVERYû ANDûAMûGENERALLYûNOTûINû)RISHûBANKSv
moment, whereby the better names are the cheap. But the bonds that are not that BNP Paribas, Goldman Sachs, JP Morgan,
ONESûSLIGHTLYûTOUGHERûTOûEXECUTEû ûTHEûBACK cheap, and further out along the curve – it’s Morgan Stanley and UBS were lead managers.
ENDûQUESTIONûISûSOûMUCHûMOREûSIGNIlCANTû MOREûDIFlCULTûTOûGETûINVOLVEDv
because their spreads are in general so much !)"ûTOOKûAûCAUTIOUSûAPPROACHûOFFERINGûAû AXA TACKLES €3bn SUB DEBT TARGET
TIGHTERvûTHEûLEADûSAID concession of around 40bp at the 130bp to FOR XL ACQUISITION
4HEREûISûALSOûPOTENTIALLYûFARûMOREûUPSIDEû BPû)04ûLEVELû0RICINGûWASûLATERûWHITTLEDû
in this type of credit than in tight core DOWNûTOûBPûAREAûANDûTHENûTOûAûlNALûBP AXA took a chunk out of the €3bn
names, where there is little room to rally h4HISûISûANûINTERESTINGûONEûITSûCOMINGû subordinated debt target it announced as
further. Many believe the market is unlikely CHEAPûVERSUSûTHEIRûOLDû4IERûvûAûBANKERû PARTûOFûTHEûlNANCINGûPACKAGEûFORûITSû
to return to January’s tights. AWAYûFROMûTHEûDEALûSAIDûATû)04Sûh)TSûNOTûAû US$15.3bn acquisition of XL Group, pricing
4HEûCHOPPYûMARKETûBACKDROPûSHOULDûNOTû DYNAMICûYOUûSEEûEVERYûDAYv AûõBNû4IERûûBONDûLASTû7EDNESDAY
BEûAûMAJORûHINDRANCEûTHOUGHû#AIXA"ANKSû !)"SûûõMû.OVEMBERûû
õBNûû0.#ûWASûBIDûALMOSTûTWOû .#ûWASûQUOTEDûATûBPûOVERûSWAPSû ALL SUBORDINATED FINANCIAL INSTITUTION
POINTSûBELOWûPARûLASTû&RIDAYû)TALYSû#ARIGEû ONûTHEûDAYûOFûEXECUTIONûACCORDINGûTOû BONDS (ALL CURRENCIES)
has also been undeterred by the volatility, 4HOMSONû2EUTERSûDATA BOOKRUNNERS: 1/1/2018 TO DATE
announcing plans the week before last to h4HEûSTARTINGûPOINTûWASûWIDERûTHANûTHEû Managing No of Total Share
SELLûAû4RIPLEû#ûRATEDû4IERûûBOND OLDû4IERûûBUTûTHATû4IERûûISûCALLABLEûINûTWOû bank or group issues US$(m) (%)
h4HESEûGUYSûHAVEûCAPITALûTOûDOûANDû years and it was issued at the opco level, not 1 BNP Paribas 10 2,534.99 9.4
whether it’s a good day or bad day in the the resolution entity, and from the issuer’s 2 SG 4 2,219.88 8.3
market doesn’t necessarily swing it either PERSPECTIVEûITSûFAIRLYûUSELESSvûAûLEADûSAID 3 BAML 8 1,669.00 6.2
WAYvûSAIDûAûTHIRDûBANKER h3OûWHILEûITSûAûNICEûTAGLINEûITSûNOTûAûVERYû 4 Barclays 8 1,641.25 6.1
h)TûMIGHTûHAVEûANûIMPACTûATûTHEûMARGINSû WELL INFORMEDûCOMMENTv 5 UBS 7 1,474.61 5.5
ONûTHEûlNALûYIELDûBUTûINûTERMSûOFûTHEûOVERALLû 4HEûDEALûISûALSOûCOMINGûCHEAPûVERSUSû 6 Credit Agricole 3 1,429.96 5.3
project, it’s much more important to get out some UK bank holdco paper, such as RBS, 7 Lloyds Bank 3 1,377.19 5.1
THEREûANDûSPEAKûTOûINVESTORSv and also Spanish issuance. 8 HSBC 6 1,336.77 5.0
3HOULDûAûDEALûEMERGEûITûWOULDûBEûTHEûlRSTû v!)"ûISûAûBETTERûCREDITûTHANûBPûBACKûOFû 9 Goldman Sachs 6 1,336.23 5.0
from Spain to be structured in a temporary 2"3ûWOULDûIMPLYûBUTûOVERûTIMEû)ûWOULDû 10 JP Morgan 6 1,275.97 4.8
writedown format. EXPECTûTHEûLEVELSûOFû5+3PANISHûBANKSûTOû Total 32 26,830.28
4HEûNOTESûAREûEXPECTEDûTOûBEûRATEDû" "û CONVERGEûWITHû)RISHûBANKSvûANOTHERûBANKERû
Barclays is structuring adviser, as well as said. Source: Thomson Reuters SDC code: J3a

4HEû8,ûDEALûWHICHûWOULDûBOOSTû!8!Sû h)TSûAûBOLT ONûACQUISITIONûMOREûTHANû Deutsche Bank, HSBC and Societe Generale were
property and casualty insurance business, ANYTHINGûELSEû)ûDONTûlNDûITûWHOLLYû active joint lead managers. Barclays, Credit
WILLûALSOûBEûlNANCEDûTHOUGHûCASHûANDûTHEû TRANSFORMATIONALûFORûTHEûCREDITûPROlLEvûHEû Agricole, Citigroup, ING, Natixis and UniCredit
PROCEEDSûOFûTHEû)0/ûOFûITSû53ûBUSINESS said. were passive joint lead managers.
"UTûITûDREWûAûMIXEDûRECEPTIONûWHENû h)TûADDSûAûLITTLEûBITûOFûINCREMENTALûRISKûBUTû
announced on March 5. Some analysts were ITSûEASILYûABSORBABLEû4HEYREûPAYINGû UK BANKS GET MORE RUNS ON THE
sceptical about the price, arguing also that US$15bn for it, and the market cap of AXA is BOARD
THEûACQUISITIONûINCREASESûlNANCIALûRISKûANDû õBNû)TûDOESûCHANGEûTHEûMIXûFROMûLIFEûTOû
earnings volatility. 0#ûANDûHONESTLYû)ûTHINKûTHATSûNOûBADû )SSUANCEûFROMû5+ûBANKSûANDûBUILDINGû
AXA’s share price fell sharply and its THINGû ûTHEûMOREûDIVERSIlEDûTHEûBETTERv societies has far outstripped last year’s
õBNûû.#ûBONDûFORû volume over the same period, with Lloyds
EXAMPLEûWIDENEDûBPûONûTHEûDAYû!LLûTHREEû LARGER PREMIUMS and Santander UK the latest to raise fresh
MAJORûRATINGSûAGENCIESûHAVEûPUTû!8!û!A !TûMID SWAPSûPLUSûBPûAREAû)04SûTHEûBONDû debt last week.
!! !! ûONûNEGATIVEûWATCH was coming around 40bp-50bp back of fair Euro supply from the sector is nearing
h4HEûDEALûISûAûCREDITûNEGATIVEûGIVENûTHEû value, a lead said. €12.5bn year-to-date, almost three times the
(temporary) rise in leverage from the Concessions for subordinated debt in €4.5bn sold at the same point last year.
transaction and the acquisition of a more particular have increased in a weak market - Sterling is also ahead, at £6.3bn versus
volatile business, whilst disposing of its US 3ANTANDERûANDû#AIXA"ANKûFORûEXAMPLEûHADû 2017’s £4.48bn.
life operations business, which has a more OFFEREDûROUGHLYûBPûFORû!DDITIONALû4IERûû Only US dollars is lagging, even after
PREDICTABLEûEARNINGSûSTREAMvûSAIDû2OBERTû trades the previous week. a US$4bn dual-tranche Additional
Montague, senior investment analyst at Large premiums are pushing secondary 4IERûûDEALûFROMû(3"#ûLASTû-ONDAYû
Wells Fargo Asset Management. CURVESûWIDERûTHOUGHû û!8!Sû.#Sû Supply stands at US$13.25bn versus
(OWEVERûTHEû.#û!"""""" û jumped 17bp to swaps plus 188bp as it US$15.6bn last year.
offered on Wednesday had found plenty of opened books on the new trade. 4HEûINCREASEûINûVOLUMEûREmECTSûTHEû
INTERESTûATûTHEûlRSTûUPDATEûWITHûBOOKSû 4HEûPROSPECTûOFûFURTHERûSUPPLYûGIVESû termination of cheap funding via the Bank
passing €2.5bn. investors additional pricing power - AXA was OFû%NGLANDSû4ERMû&UNDINGû3CHEMEûLASTû
,LOYDû(ARRISûAûFUNDûMANAGERûATû/LDû never intending to meet its €3bn target via month, as well as the need to make headway
-UTUALû'LOBALû)NVESTORSûSAIDûTHEû8,û this transaction alone, and as such this bond INûBEElNGûUPûLOSS ABSORBINGûCAPACITYûTOû
acquisition will be positive for AXA once it needs to perform. meet incoming regulation.
has been absorbed. 4HEûSAMEûWASûTRUEûFORû(3"#ûWHICHûPAIDûAû 3PREADSûHAVEûWIDENEDûSIGNIlCANTLYûINû
generous concession on a US$4bn dual- recent weeks, however, with the chunky
ALL INTERNATIONAL YEN BONDS TRANCHEû!4ûDEALûLASTûWEEKûGIVENûITSûNEEDûTOû premiums required in a tough market
BOOKRUNNERS: 1/1/2018 TO DATE return before the end of the second quarter. pushing secondary wider.
Managing No of Total Share /LDû-UTUALSû(ARRISûSAIDûHEûWOULDûBEû SANTANDER UKûHOLDCOûSENIORûFORûEXAMPLEû
bank or group issues ¥(m) (%) INCLINEDûTOûPASSûONûAûSPREADûINSIDEûBPû)Tû has widened in both euros and sterling -
1 Nomura 14 69,786.67 20.8 later priced at 220bp on a €4.1bn-plus book BETWEENû-ARCHûûANDûLASTû4UESDAYSûOPENû
2 Mizuho 16 57,661.67 17.2 and went on to tighten more than 3bp by its €1bn 1.125% September 2023s went from
3 Daiwa Securities 13 56,536.67 16.9 4HURSDAYûAFTERNOON swaps plus 46bp to 61bp, while its £500m
4 Mitsubishi UFJ MS 11 46,011.67 13.7 h4HEREûISûALWAYSûAûRISKûTHATûTHEûMARKETû 3.625% January 2026s moved from Gilts plus
5 Sumitomo Mitsui Finl 8 42,791.67 12.8 just moves to meet the new issue, which it 127bp to 132bp.
6 Natixis 6 23,220.00 6.9 has been doing as the market is quite weak, 4HEûWEIGHTûOFûOVERALLûlNANCIALSûSUPPLYûISû
7 BNP Paribas 3 16,125.00 4.8 SOûYOUûNEEDûTOûBEûPAIDûFORûTHATûDYNAMICvû surprising given these moves in spreads,
8 Barclays 4 11,650.00 3.5 SAIDû(ARRISûh-YûASSUMPTIONûISûTHATûTHEûNEXTû said a banker not involved on either deal.
9 Chugoku Bank 2 6,666.67 2.0 DEALûWOULDûBEûINûDOLLARSv Euro issuance the previous week passed
10 Dev Bank of Japan 1 5,000.00 1.5 )NûTHEûEVENTûTHEûACQUISITIONûDOESûNOTûGOû €19bn.
Total 20 335,450.00 ahead, proceeds will be used for general h7EûREALLYûHAVEûMOVEDû;INûSPREADûTERMS=vû
Including all Euro, foreign and global issues. Excluding equity-related corporate purposes. HEûSAIDûh)FûISSUERSûHAVEûTOûGOûOUTûWITHûAû
debt.
BNP Paribas and JP Morgan were global 30bp concession on top of these elevated
Source: Thomson Reuters SDC code: K12 coordinators and active joint lead managers. spreads, there must be a point where some
will wait at least until after Easter, or until
ALL GLOBAL AND EUROMARKET YEN BONDS ALL SAMURAI BONDS THEûSUMMERv
BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE But many funding teams, particularly
Managing No of Total Share Managing No of Total Share those with larger targets, will take a longer-
bank or group issues ¥(m) (%) bank or group issues ¥(m) (%) term view.
1 Nomura 8 46,566.67 37.3 1 Mizuho 9 39,345.00 18.7 h)ûTHINKûFORûAûLOTûOFûTHEûGUYSûWHOûHAVEû
2 Daiwa Securities 6 18,316.67 14.7 =1 Mitsubishi UFJ MS 9 39,345.00 18.7 -2%,ûTOûDOûITSûTRICKYvûSAIDûAûSECONDû
=2 Mizuho 7 18,316.67 14.7 3 Daiwa Securities 7 38,220.00 18.1 banker. While conditions are far choppier
4 Sumitomo Mitsui Finl 4 11,666.67 9.3 4 Sumitomo Mitsui Finl 4 31,125.00 14.8 than last year, there is no guarantee they
5 Barclays 4 11,650.00 9.3 5 Nomura 6 23,220.00 11.0 may not get uglier.
6 Chugoku Bank 2 6,666.67 5.3 =5 Natixis 6 23,220.00 11.0 h/VERALLûLEVELSûAREûSTILLûVERYûDECENTvûHEû
=6 Mitsubishi UFJ MS 2 6,666.67 5.3 7 BNP Paribas 3 16,125.00 7.7 SAIDûh!ûLOTûOFûTHESEûBIGûFUNDERSûHAVEûTHREEû
8 Dev Bank of Japan 1 5,000.00 4.0 Total 10 210,600.00 TOûlVE YEARû-2%,ûPLANSûTHEYûHAVEûTOû
Total 10 124,850.00 Excluding equity-related debt. EXECUTEûSOûTHEYûWONTûNECESSARILYûLOOKûATûITû
Excluding equity-related debt. Including preferreds. on an intra-week basis. On a longer-term
Source: Thomson Reuters SDC code: K10 Source: Thomson Reuters SDC code: K11 HORIZONûITûSTARTSûTOûMAKEûSENSEv

BONDS FIG
PRUDENT APPROACH 4RIPLEû"ûANDûAûHOLDCOûSOûNOTûEVERYONEûISû 7EDNESDAYSûSELF LEDûSALEûOFûlVE YEARû

3ANTANDERû5+ûPICKEDûEUROSûFORûITSû.#û COMFORTABLEûWITHûTHATv medium-term notes.
HOLDCOûSENIORû"AA"""! ûPRICINGûAûõMû )TûISûRATEDû"AA""" """( ûBYû-OODYS 4HEûû-ARCHûûSûWHICHûHADû
deal on a €900m-plus book via Deutsche Bank, 30$"23 ANûINDICATIVEûISSUEûSIZEûOFû.:Mû
Santander and Societe Generaleû)TûREVISEDûBPû &AIRFAXûALSOûHADûTOûCONTENDûWITHûAûTOUGHû were sold at par, at the wide end of the
AREAû)04SûTOûAûlNALûBPûOVERûTHREE MONTHû BACKDROPû4HEûTONEûWASûWEAKûLASTû4HURSDAYû mid-swaps plus 95bp–100bp price
Euribor. THEûI4RAXXûSENIORûlNANCIALSûNEARLYûBPû guidance range.
h)TSûCHEAPERûTHANûWHEREûTHEYDûCOMEûINû wider and the subordinated 7.5bp wider by 4HEûLASTû+IWIûMAJORûBANKûTOûISSUEû
lXEDvûSAIDûTHEûSECONDûBANKERûh&2.ûSPREADSû mid-afternoon. DOMESTICûlVE YEARû-4.SûWASû!.:û"ANKû
HAVEûHELDûUPûAûLOTûBETTERûTHANûlXEDûINû &AIRFAXûDESCRIBESûITSELFûASûBEINGûGLOBALLYû .EWû:EALANDûONû!UGUSTûû
holdco and non-preferred formats over the engaged in property and casualty insurance !.:ûALSOûWENTûFORûSIZEûOVERûPRICINGûWITHû
LASTûWEEKûORûTWOûSOûITûDOESûMAKEûSENSEv ANDûREINSURANCEû4HEûLEADSûLOOKEDûATûAûRANGEû ANûINCREASEDû.:MûPRINTûPRICEDûATûTHEû
A 25bp concession helped the trade. OFûCOMPARABLESûFROMûOTHERû4RIPLEû"û wide end of mid-swaps plus 105bp–110bp
Bonds sold with higher premiums the lNANCIALSûSUCHûASû!)'ûORû,IBERTYû-UTUALûTOû guidance.
previous week were holding up better in 4RIPLEû"ûCORPORATESûSUCHûASû+INDERû-ORGAN Elsewhere in Kiwi dollars, HSBC,
secondary - a Goldman Sachs €750m 2% 4HEYûWEREûQUOTEDûANYWHEREûBETWEENûTHEû ACTINGûTHROUGHûITSû!A!!nûRATEDû.EWû
March 2028 was well inside its 105bp reoffer high 90s and low 100s. Zealand branch, raised an enlarged
LEVELûATûBPûFORûEXAMPLEûWHILEû)NTESASû h)TSûQUITEûAûBESPOKEûNAMEûANDûYOUûCANû .:MûFROMû4HURSDAYSûSALEûOFû
€1.25bn 10-year was 12bp wider at 89bp. position it between holding company three-year medium-term notes, priced
LLOYDS BANK returned with its third trade in corporates and insurance companies, but at the tight end of three-month BKBM
LESSûTHANûAûWEEKûTAKINGûaBNûOUTûVIAûAûlVE there isn’t really a like-for-like name in plus 75bp–77bp guidance.
YEARûCOVEREDû&2.û!AA!!! ûONûAûaBN PLUSû %UROPEvûANOTHERûLEADûSAID BNZ, CBA and the issuer’s own syndication
BOOKû)TûLAUNCHEDûATûTHREE MONTHû,IBORûPLUSû h7EûTOOKûINVESTORûFEEDBACKûINTOûACCOUNTû team were joint lead managers on the trade,
BPûINSIDEûBPûAREAûGUIDANCEû-OSTû5+ûlVE )ûWOULDûSAYûFORûTHOSEûWHOûSPENTûTIMEû which had an indicative minimum size of
YEARûCOVEREDû&2.SûTRADEûAROUNDûBPûTOûBP looking at it, they should be rewarded with .:M
)TûWASûTHEû5+ûBANKSûSECONDûSTERLINGû GOODûPERFORMANCEûOVERûTHEûMEDIUMûTERMv Pricing compares with the 70bp margin
covered of the year, having brought a THATû+IWIûMAJORûBANKû!3"û!!!n!!n ûPAIDû
aBNûTHREE YEARû&2.ûINû*ANUARYû!ûSECONDû FORûITSû.:MûTHREE YEARûmOATERûONû
trade made sense given the slightly uneven SWISS FRANCS January 16.
market backdrop, said Peter Green, head of
public senior funding and covered bonds at BUSY WEEK FOR SWISS FIG SMALL FARE IN OZ
Lloyds Bank.
h)TûISûAûRAINYûDAYûTRADEûIFûYOUûLIKEûBUTûYOUû !ûFAIRLYûBUSYûWEEKûINûTHEû3WISSûlNANCIALSû 7HILEû!USTRALIANûlNANCIALûINSTITUTIONSû
can’t argue with the cost of funding that it sector saw SFr510m (US$538m) taken down were active from the short to the long end
GIVESûUSvûHEûSAID over four deals (and over SFr1bn when last week, none issued much in terms of
4HEûBANKûHADûALSOûPRICEDûAûõBNûSEVEN adding in Valiant’s covered bond). size.
year covered and a US$1.5bn holdco senior 4HEûMOSTûINTERESTINGûCAMEûFROMûKIWIBANK, INSURANCE AUSTRALIA GROUP raised
YEARûTHEûPREVIOUSû4HURSDAYûBUTûTHEûJUMPû WHICHûEXTENDEDûITSûCURVEûOUTûFROMûû A$350m (US$270m) from a 26-year
INûACTIVITYûISûMOREûAûREmECTIONûOFûANû with a 5.5-year senior, pricing broadly in NON CALLûSIX YEARûTOûSEVEN YEARû4IERûûNOTEû
upcoming closed period than concerns line with comparables in the Swiss market ISSUEû)TûWASûPRICEDûLASTû4HURSDAYûINSIDEû
about further deterioration in markets. at mid-swaps plus 23bp, mid-range of initial 215bp area guidance at three-month BBSW
h7EûTAKEûAûPRUDENTûAPPROACHûTOûFUNDINGû 22bp-25bp guidance. plus 210bp.
and will look to size and price deals sensibly UBSûWASûSOLEûLEADûONûTHEû3&RMû!!!û JP Morgan and Westpac were joint lead
INûTHEûCONTEXTûOFûTHEûMARKETûBACKDROPûTHATû rated deal, which was upsized from the MANAGERSûONûTHEûISSUEûWITHûANûEXPECTEDû
WEûlNDvû'REENûADDED initial SFr100m minimum. S&P rating of BBB.
HSBC, Lloyds, RBC and TD Bank ran the deal. )TûFOLLOWSûITSûCOMPATRIOTSûDEALûINûLATEû HERITAGE BANKûRATEDû"AA"""û-OODYS
*ANUARYûWHENûSLIGHTLYûBETTERûRATEDû!.:û.:û &ITCH ûISSUEDû!MûOFûTHREE YEARûmOATING
FAIRFAX GETS DEBUT AWAY IN !!! !! ûBROUGHTûAû3&RMûLONGûSIX RATEûNOTESûLASTû4UESDAYûATûTHREE MONTHû
TOUGH MARKET year at mid-swaps plus 13bp. BBSW plus 123bp, the tight end of 125bp
Kiwibank is a subsidiary of state-owned area guidance.
FAIRFAX FINANCIAL HOLDINGS made its bond .EWû:EALANDû0OSTûTHEû.EWû:EALANDû On the same day, Australia’s largest
MARKETûDEBUTûINûEUROSûLASTû4HURSDAYû Superannuation Fund and Accident mutual bank repurchased A$17.2m of its
pushing ahead despite volatile conditions Compensation Corp. A$200m May 7 2018s at 100.083, or a 30bp
and a lack of familiarity among European Elsewhere, BASLER KB brought a tightly priced discount margin over the new three-year
investors with the credit. 3&RMûSELF LEDûDUAL TRANCHEûFOURûANDûSIX YEARû note.
4HEû#ANADIANûHOLDINGûCOMPANYûPRICEDûAû and SANTANDER tapped its July 2027 senior non- ANZ and NAB were joint lead managers on
€600m 10-year via Bank of Merrill Lynch, preferred by SFr60m via Credit Suisse. the sale and buyback.
Barclays, BNP Paribas, Deutsche Bank, and RBC, )NûBETWEENûTIMESûBANK OF QUEENSLANDû!
WITHûTHEûLOFTYûlNALûSPREADûOFûBPûOVERû """!n ûTAPPEDûITSû!PRILûûû
swaps, 10bp inside initial price thoughts, NON-CORE CURRENCIES mOATING RATEûNOTESûFORû!MûLASTû
helping to spur a book of over €1bn. Wednesday to increase the outstanding size
h)TSûNOTûTHEûMOSTûWELL KNOWNûNAMEûINû ENLARGED KIWIS to A$600m.
Europe but it offered a pick-up versus 4HEûREOPENINGûVIAûSOLEûLEADûCBA, was
European names, such as CSPP-eligible WESTPAC NEW ZEALANDû!!!n!! ûRAISEDûANû priced at 101.017, equivalent to 62bp over
CORPORATEûISSUERSvûONEûLEADûSAIDûh"UTûITûISû ENLARGEDû.:Mû53M ûFROMûLASTû 90-day BBSW.

clients, whereas covereds are reliant on the
CENTRALûBANKûBIDvûHEûSAID SWISS FRANCS
COVERED BONDS h7EûSEEûHOWûCOVEREDSûWORKûTHEû
syndicates open the book, wait for the VALIANT COVERED HIGHLIGHTS
central banks to come and if they don’t, you SWISS STRENGTH
EUROS BASICALLYûDONTûHAVEûAûDEALv
4HEû%#"ûBOUGHTûõMûOFûCOVEREDûBONDSû While the euro covered bond market has
AAREAL STUMBLES AS ECB HITS BRAKES in trades settled in the week to March 16, recently been showing signs of strain,
down from €1.041bn the week before. Switzerland’s VALIANT BANK managed to price
AAREAL BANK failed to fully sell a €500m h7EûTHINKûITûISûJUSTûASûLIKELYûTHATûITûHASû ANûUPSIZEDûSIX YEARû3WISSûFRANCûTRANSACTIONû
covered bond issue last week after the applied the brakes because the covered at the tight end of guidance.
previously reliable ECB bid that has allowed bond supply to-date and its rising allocations Books opened for a minimum SFr250m
issuers to get away with tight prints showed HAVEûEXCEEDEDûTHEûTARGETSvû#OMMERZBANKû (US$265m) at mid-swaps less 3bp-5bp,
SIGNSûOFûmOUNDERINGûANDûREALûMONEYû analysts wrote last week. BEFOREûSTRONGûDEMANDûALLOWEDûTHEûlNALûSIZEû
investors continue to stay away. h!FTERûALLûAûRELATIVELYûLARGEûNUMBERû TOûBEûSETûATû3&RMû"OOKSûWEREûINûEXCESSûOFû
Books on the July 2024 deal closed above of new deals have had to make greater use that amount, meaning that some of the
€500m – but only after including a €60m of the CBPP3 this year than was usual in more than 20 accounts involved had their
contribution from the joint leads. 2017 in order to secure an adequate orders scaled back a bit.
While German covereds have at times PLACEMENTv At less 5bp, the bonds came in line with
struggled to gain traction in the primary 4HEYûWENTûONûTOûWARNûTHATûTHEûRISKûOFû Valiant’s own curve and only 3bp back of
market this year, Aareal’s failure was a new failures or issues with weak secondary THEû03(YPO0&ZûCURVES
nadir for the asset class, which had market performance had risen considerably. BNP Paribas (Suisse) and ZKB were joint
previously managed to scrape through with 4HEûPROBLEMûFORûISSUERSûISûTHATûTHEYûAREû bookrunners, with Valiant Bank itself as
the help of the ECB. hamstrung by tight secondary levels. Aareal joint lead no books.
(OWEVERûTHEREûAREûSIGNSûTHATûTHEûCENTRALû was priced with a 2bp premium at 14bp Valiant’s covered bonds are rated Aaa by
bank is scaling back orders. through mid-swaps, in line with less 14bp Moody’s.
h7EûWEREûLEANINGûAûBITûMOREûONûTHEûBIDûOFû area guidance.
THEû%#"vûSAIDûAûLEAD. h.OWûTHATûTHEû%#"ûISû h4HEYûJUSTûWENTûOUTûWAYûTOOûTIGHTvûSAIDû
not buying as much as they used to, which another banker, who struggled to remember
was around 50% or 60%, people are getting the last time a covered bond issue was not
AFRAIDv FULLYûSUBSCRIBEDûh4HEûNEWûGAMEûISûTHATûYOUû HIGH-YIELD
#ENTRALûBANKSûANDûOFlCIALûINSTITUTIONSû HAVEûTOûPUTûSOMEûJUICEûINûITûTOûGETûITûDONEv
took 46% of Aareal’s trade, a much smaller )TûWASûNOTûJUSTû!AREALûTHATûSTRUGGLEDû4HEû
portion than the 63% of Commerzbank’s lacklustre €650m-plus turnout for UNITED STATES
€500m 0.625% March 2025 offering, for LANSFORSAKRINGAR HYPOTEK’s €500m March
EXAMPLE 2025 showed that even a rare Swedish TRIPLE C BORROWERS FIND WINDOW
h7HEREASûTHEûWEEKûPRIORûYOUûCOULDû covered was not safe from investor apathy. AMID RATE FEARS
almost guarantee that the central bank may h)TSûNOTûTHEûMOSTûACTIVEûNAMEûSOûMAYBEû
take about a half of it, there is more there were a number of accounts who 4HEûRECENTûVOLATILITYûINûRATESûHASûCREATEDû
sensitivity at the moment and some COULDNTûBUYûITvûSAIDûTHEûlRSTûBANKERûAWAYû a window for some of the riskiest
borrowers are getting slightly caught out by from the deal. borrowers to issue debt as investors move
THATvûSAIDûAûBANKERûAWAY ,EADSûHADûTOûLEAVEûTHEûlNALûSPREADûATûTHEû away from safer and more rate-sensitive
One SSA banker highlighted how central mid point of revised guidance, unable to credits.
bank withdrawal was more of a problem in stretch to the tight end of the less 1bp area A number of companies with bottom
covereds and corporates rather than SSA, nBP ûRANGE 4RIPLEû#ûRATINGSûHAVEûSUCCESSFULLYûTAPPEDûTHEû
which did not rely on central bank primary For borrowers prepared to adjust to the US bond market over the past few weeks
orders. conditions, however, there was still plenty and more have joined the pipeline of
h7EREûNOTûDISCONNECTEDûFROMûREALûMONEYû of demand. would-be issuers.
BANK OF NOVA SCOTIA’s cautious approach to h7HATûISûWORKINGûPERFECTLYûlNEûISûLOWER
ALL COVERED BONDS (ALL CURRENCIES) PAYûAûHIGHERû.)0ûOFûBPûPAIDûOFFûWITHûTHEû RATEDûMOREûSPREADûSTUFFvûSAIDûONEûLEVERAGEDû
BOOKRUNNERS: 1/1/2018 TO DATE bank getting over €1.6bn of demand. lNANCEûBANKERûh4ALKINGûTOûACCOUNTSûTHEYû
Managing No of Total Share 4HEû#ANADIANûLENDERûPRICEDûITSûõBNû AREûREALLYûCONCERNEDûABOUTû4REASURYûRATESû
bank or group issues US$(m) (%) of September 2022s at swaps minus 2bp, and therefore anything that is very tight
1 UniCredit 25 4,897.68 6.8 2bp back from where it sold a spread and high quality, that is what they
2 LBBW 22 4,355.58 6.0 longer-dated 0.5% €1bn January 2025 issue AREûNERVOUSûABOUTv
3 Natixis 17 4,318.60 6.0 in January. &ORûSOMEûBORROWERSûLOOKINGûTOûRElNANCEû
4 HSBC 22 4,189.62 5.8 h)ûTHINKûTHISûISSUER TO INVESTORûSHIFTûINû debt, investors’ demands for higher
5 Deutsche Bank 17 3,964.22 5.5 pricing power will continue through 2018, compensation are proving too much,
6 Credit Suisse 15 3,857.83 5.4 particularly as we begin to see little bouts of LEADINGûTOûTWOûDEALSûBEINGûUNEXPECTEDLYû
7 Barclays 17 3,561.86 4.9 VOLATILITYûCREEPINGûINûEVERYûSOûOFTENvûSAIDû yanked from the market this month.
8 Commerzbank 19 3,476.66 4.8 THEûlRSTûBANKERûAWAYûFROMûTHEûDEAL Oil and gas company CNX RESOURCES, rated
9 SG 15 3,310.01 4.6 h)FûYOUREûAûBIGûBORROWERûANDûYOUû """ ûPULLEDûAû53MûEIGHT YEARûNON CALLû
10 Credit Agricole 19 3,241.84 4.5 understand the market is turning, and you three offering and the tender offer
Total 90 72,087.89 offer a few more basis points, it’s really associated with it, after setting price talk of
Source: Thomson Reuters SDC code: J15a QUITEûAPPRECIATEDv 6.5% area on the deal.

BONDS HIGH-YIELD
Canadian developer BROOKFIELD RESIDENTIAL INVESTORS FIND SPACE FOR Many investors say they are generally
PROPERTIESûRATEDû""ûSIMILARLYûDECIDEDûNOTû IRIDIUM BOND DEAL wary of satellite operators. But compared
to proceed with its own US$600m eight-year WITHûTHEûOLDûDAYSû)RIDIUMûNOWûHASûPLENTYû
non-call three issue, according to three IRIDIUM returned to the junk-bond market GOINGûFORûITûEXECUTIVESûTOLDûINVESTORSûDURINGû
sources. THISûMONTHûFORûTHEûlRSTûTIMEûSINCEû the roadshow.
/NEûOFûTHEûSOURCESûTOLDû)&2ûTHATû"ROOKlELDû bankruptcy two decades ago, raising While leverage will reach a staggering 8.1
decided it was unwilling to pay a 6.75% US$360m to maintain liquidity through times on a gross basis after the bond sale,
coupon on its deal. delays in new satellite launches. MANAGEMENTûEXPECTSûCAPITALûEXPENDITUREûTOû
h4HOSEûCOMPANIESûWEREûPRICE SENSITIVEvû 6IRGINIA BASEDû)RIDIUMûHASûINVESTEDû drop from US$400m to just US$35m after
SAIDûONEûHIGH YIELDûINVESTORûh4HEYûDIDNTû US$3bn in the past eight years to launch the the constellation is completed, freeing up
LIKEûWHATûTHEYûWEREûOFFEREDû4HEYûHADûTIMEû NEXTûGENERATIONûOFûSATELLITESûTHATûPROVIDEûTHEû cash to repay debt.
ANDûPULLEDûBACKv worldwide grid for its sat-phone service. h%FFECTIVELYûTHEûCOMPANYûISûMARKETINGû
Lower down in the credit spectrum, But manufacturing delays - and a launch this deal as a roughly one-year bridge to free
where borrowers are less willing to put failure by SPACEX, the Elon Musk-founded CASHmOWûTHATûITSûBANKSûARENTûWILLINGûTOûGIVEû
UPûAûlGHTûFORûAûFEWûBASISûPOINTSûINûEXTRAûYIELDû ROCKET MAKERûTHATûHURLSû)RIDIUMSûSATELLITESû THEMûATûTHISûPOINTvû"AIRDûANALYSTû-ATTû
and investors feel more protected against into space - have left it behind on the 3WOPEûWROTEûINûAûNOTEûTOûCLIENTSûSEENûBYû)&2
rate moves, plenty of deals are sailing upgrade. 4HEû53ûGOVERNMENTûISû)RIDIUMSûSINGLEû
through. Long a business-school case study for its largest customer, accounting for around 10%
.INEûOUTûOFûTHEûûNEWûISSUESûFROMûJUNK SPECTACULARûSûERAûmAME OUTû)RIDIUMûHADû of total revenue, according to the roadshow
rated borrowers priced over the past two TOûPAYûûTOûGETûTHEûlVE YEARûNON CALLû presentation.
WEEKSûCARRIEDûATûLEASTûONEû4RIPLEû#ûRATINGû two bond over the line. Deutsche Bank was the lead bookrunner on the
ACCORDINGûTOû)&2ûDATA 4HATûCAMEûATûTHEûTIGHTûENDûOFûPRICEûTALKû 4RIPLEû#ûRATEDûOFFERINGûSociete Generale and
4HEû53ûARMûOFûTELECOMSûlRMûALTICE made a but a touch wider to the 10% area initially Santander were also involved with smaller roles.
quick drive-by in the primary market on circulated among investors.
4HURSDAYûTHROUGHûITSûCEQUEL COMMUNICATIONS 4HEûNEWûBONDûSALEûISûPARTûOFûAûDEALû)RIDIUMû
subsidiary, which operates Suddenlink, to negotiated with banks that lent it money EUROPE/MIDDLE EAST/
RElNANCEûEXISTINGûDEBT UNDERûAû53BNûEXPORTûCREDITûFACILITYû AFRICA
Cequel’s new US$1.05bn 10-year non-call backed by the French government put in
lVEûOFFERINGûWHICHûISûRATEDû#AA"ûPRICEDû place in 2010. LKQ FINDS BID FOR DURATION
ATûAûYIELDûOFûûONû4HURSDAY 4HATûWASûWHENûDEVELOPMENTûOFûITSûNEXT
4HATûWASûATûTHEûWIDEûENDûOFûPRICEûTALKûBUTû generation satellite programme began. A longer-end trade for US auto parts
still an impressive outcome considering that !SûPARTûOFûAûDEALûWITHûEXISTINGûLENDERSû company LKQ showed that investors are still
the Dow plunged over 700 points that day. )RIDIUMûPOSTPONEDû53MûOFûPRINCIPALû keen to go long for the right credit in their
4HEûWEEKûBEFOREûAû53MûEIGHT YEARû PAYMENTSûANDûOBTAINEDûLOOSERûlNANCIALû hunt for yield despite softer market
non-call three bond deal backing PLATINUM covenants on the bond, according to an conditions.
EQUITY’s acquisition of HUSKY INJECTION MOLDING INVESTORûPRESENTATIONûSEENûBYû)&2 h)ûTHINKûTHISûDEALûILLUSTRATESûTHATûATûTHEû
SYSTEMS, crossed the line at a yield of 7.75%. )RIDIUMûPLANSûTOûUSEûTHEû53Mû right price for a good-quality credit, the
4HEûNOTEûWHICHûISûRATEDû#AA###ûALSOû proceeds to shore up its cash balance, fund a market is prepared to invest in eight and 10-
priced at the wide end of talk after being debt service account it is required to YEARûDEALSvûSAIDû4IMû-ORGANûHEADûOFû
downsized by US$100m, but the company’s maintain under its credit facility and pay high-yield syndicate at HSBC, which led the
ability to get the deal done was still seen as a amounts due to satellite manufacturer deal alongside Bank of America Merrill Lynch.
sign that investors are not shying away from 4HALESû!LENIAû3PACE 4HEûCOMPANYûRAISEDûõBNûACROSSûTWOû
risky paper. 4HEûCOMPANYûFOUNDEDûINûûHASûTRIEDû TRANCHESûAûõMûû.#ûANDûAû
h4HEREûISûCERTAINLYûAPPETITEûFORûHIGHER repeatedly to establish a thriving base of õMûû.#û"OTHûTRANCHESûCAMEû
YIELDINGûSTUFFûOUTûTHEREvûSAIDûAûSECONDû customers for its satellite phones, which at the midpoints of talk of 3.50%-3.75% and
high-yield portfolio manager. have truly global coverage but with high ûINûLINEûWITHû)04Sû-ORGANûSAIDûTHEû
4RIPLEû#ûBONDSûHAVEûREWARDEDûINVESTORSû device and usage fees. TRANCHEûSIZESûWEREûINûLINEûWITHûEXPECTATIONSû
RETURNINGûûTHISûYEARû4HATûCOMPARESû
with a 0.9% loss for all US high-yield bonds ALL US$ DENOMINATED HIGH-YIELD BONDS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS
on average and an even steeper 1.7% loss for BOOKRUNNERS – 1/1/2018 TO DATE 1/1/2018 TO DATE
$OUBLEû"ûCREDITSûACCORDINGûTOûDATAûFROMû)#%û Managing No of Total Share Managing No of Total Share
Bank of America Merrill Lynch. bank or group issues US$(m) (%) bank or group issues €(m) (%)
4HEûSOLIDûPERFORMANCEûHASûENCOURAGEDû 1 JP Morgan 43 6,538.50 11.1 1 BNP Paribas 12 1,187.81 8.3
more issuers to come to market with new 2 Credit Suisse 36 4,895.96 8.3 2 Deutsche Bank 11 977.65 6.8
debt sales. 3 Barclays 29 4,064.37 6.9 3 JP Morgan 11 883.11 6.2
0RIVATEûEQUITYûlRMûCLAYTON, DUBILIER & RICE 4 Deutsche Bank 31 3,954.73 6.7 4 Goldman Sachs 10 878.95 6.1
on Friday announced a US$645m bond sale 5 BAML 38 3,947.77 6.7 5 Credit Suisse 9 857.56 6.0
backing its acquisition of PLY GEM HOLDINGS 6 Citigroup 34 3,687.85 6.3 6 Natixis 7 722.39 5.0
and ATRIUM WINDOWS & DOORS, which will 7 Wells Fargo 29 3,686.80 6.3 7 ING 6 652.07 4.6
CREATEûANûEXTERIORûBUILDINGûPRODUCTSû 8 Goldman Sachs 30 3,537.37 6.0 8 HSBC 8 614.56 4.3
company with US$2.4bn in sales. 9 Morgan Stanley 26 3,076.47 5.2 9 Barclays 7 605.18 4.2
4HEûCOMPANYûWILLûBEûONûTHEûROADûUNTILû 10 RBC 17 1,809.28 3.1 10 Credit Agricole 4 582.43 4.1
4HURSDAYûTOûMARKETûTHEûEIGHT YEARûNON CALLû Total 106 58,804.07 Total 34 14,323.28
THREEûDEALûWHICHûISûEXPECTEDûTOûBEûRATEDû Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt.
#AA### Source: Thomson Reuters SDC code: B5 Source: Thomson Reuters SDC code: B6

4HEû YEARûISûINûLINEûWITHûTHEûBIDûYIELDûONû
Coty announces jumbo "ELDENSûRECENTûõMû YEARûNON CALLûlVEû

the latest 10-year note from a traditional
HIGH YIELDûISSUERû4HATûBONDûRATEDû"A"" û
cross-border debut was bid at a yield of around 4.10%, after

selling off from its reoffer yield at 3.875%.
HIGH-YIELD Beauty company seeks to issue jumbo dual-currency trade CORESTATE EXTENDS COVENANT
PUSHBACK TO HIGH-YIELD LITE
US-listed beauty products maker COTY is looking facing operating challenges, according to
to add bonds to its capital structure as part of a Moody’s, which downgraded Coty to Ba3 last CORESTATE had to amend the covenant
broader US$8bn-equivalent refinancing of its all- week. PACKAGEûTOûGETûAûõMûlVE YEARûTRADEûOVERû
loan debt stack, demonstrating further appetite A fund manager said his account would the line, showing that investors are also
for cross-border jumbo high-yield deals. compare the name to Sally Beauty, Revlon and willing to push back on higher-rated names
The bond sale includes eight-year non-call Avon. The lead, from a European perspective, with high-yield lite documentation.
three and a 10-year non-call five notes in US added that he expects investors to compare the 4HEû,UXEMBOURG BASEDûREALûESTATEûASSETû
dollars and five-year non-call two and eight-year name with other Double B issuers more broadly. manager made a series of amendments to
non-call three notes in euros, with the exact split Israeli pharmaceutical Teva demonstrated the terms including offering a change of
still to be determined. capacity for cross-border, jumbo financings with control put at 101 rather than par and
The US dollar eight-year is being whispered a similar deal earlier this month, which was the WIDENINGûITSûDElNITIONûOFûTHEûCHANGEûOFû
in the high fives and the 10-year at 6% area. The largest since Wind Tre’s outing in October. The control, and reducing the leverage threshold
euro five-year is being whispered at 3% area, Ba2/BB/BB rated US$4.5bn-equivalent deal to pay unlimited dividends.
while the eight-year is being whispered at 4% came with two US dollar and two euro tranches. 4YPICALLYûINVESTORûPUSHBACKûANDû
area, sources told IFR. The euros have outperformed the dollars, which documentation changes in recent times
“The bond market will give them better pricing are bid below reoffer, according to Tradeweb have centred on lower-rated credits with
across the structure. There’s also an element of data. storied histories, but Corestate, rated BB+ by
wanting fixed-rate debt,” a lead told IFR. Coty held a US roadshow on Thursday and S&P, showed that stronger credits aren’t
The issuer last came to market in 1995 with a Friday, which will be followed by a European necessarily spared.
coupon of 10%, according to IFR data, but two roadshow this week that ends on March 28. h)ûTHINKûTHEûCHANGESûCOMEûWHENûTHEYû
decades later, the new trade is being seen as a Coty’s refinancing includes a US$1.25bn term HAVEûDIFlCULTYûSELLINGûTHEûDEALûORûSELLINGûITûATû
debut. loan A and a US$2.25bn euro-denominated term THEûPRICEûTHEYûWANTvûSAIDû2OSSû(ALLOCKû
The company accumulated a significant loan A, for which commitments are due on March ANALYSTûATûCREDITûRESEARCHûlRMû#OVENANTû
amount of debt in 2016 when it acquired the 27 [see Loans for more]. Review.
beauty products division of Procter & Gamble. Morgan Stanley is leading the US dollar One investor said the buyside had a hard
But it has struggled to reduce leverage as it tranches and BNP Paribas is leading the euros. time making sense of the company’s
continued to pay generous dividends despite Yoruk Bahceli, Davide Scigliuzzo business model. Corestate is an investment
manager for real estate equity and debt in
the German, Austrian and Swiss markets,
which were €700m-€750m on the eight year Ba2 because it will have priority claim over rather than a property manager like other
and €250m-€300m on the 10-year. US debt on the assets and cash of LKQ’s real estate issuers.
h!ûNUMBERûOFûINVESTORSûPREFERREDûTHEû European operations, Moody’s said. h4HEûANALYSTSûTHATûWENTûTOûTHEûINVESTORû
year tranche, taking the view that if they LKQ is 3.1 times leveraged, according to meetings were your standard real estate
were comfortable with the credit risk then an investor presentation. ANALYSTSûTHATûWANTûTOûSEEûPORTFOLIOSûANDû,46Sû
they would rather take the higher-yielding h)TSûAûDECENTûSTORYûBUTûAûBITûLEVEREDûANDû and a call on German property, but that’s
PAPERûANDûHEDGEûTHEûDURATIONvûHEûADDED their M&A strategy is a risk. But if they stick NOTûWHATûTHISûISvûHEûSAID
Many longer-dated notes issued since late to their guided leverage, it should suggest 4HEûDEALûCAMEûWITHûHIGH YIELDûLITEû
2017 have struggled to perform and fund THEYûWONTûDOûANYTHINGûBIGûFORûAûWHILEvûSAIDû documentation, which lacks typical
managers are lukewarm on duration as fears one fund manager. protections such as limits on making
of rising rates loom, but LKQ managed to Moody’s said in a note that its downgrade distributions away from creditors and the
offset those concerns given investor WASûBASEDûONûhTHEûEXPECTATIONûTHATû,+1ûWILLû amount of debt an issuer can raise subject to
CONlDENCEûINûTHEûCREDIT CONTINUEûTOûMAKEûLARGELYûDEBT lNANCEDû leverage ratio tests.
h)ûTHINKûTHERESûAûDEGREEûOFûEXISTINGû ACQUISITIONSûASûITûCONTINUESûTOûEXPANDûITSû Covenant Review deems the format a
credibility in the LKQ story which garners global footprint and breadth of aftermarket hCHIMERAvûSAYINGûTHEYûAREûAûhSTRANGEûBLENDû
INTERESTûFROMûEXISTINGûINVESTORSvûSAIDûANû and replacement products, and generally of investment-grade and high-yield covenant
investor. operate at a higher level of leverage than in CONCEPTSvûTHATûhPROVIDEûILLUSORYûPROTECTIONv
h4HEûNAMEûALSOûCARRIESûMOREûEXPOSUREûTOû the past with somewhat lower margins h.OWûTHATûWEVEûSEENûENOUGHûOFûTHESEû
AûLESSûCYCLICALûAUTOMOTIVEûAFTERMARKETvûHEû DRIVENûBYûTHEûINCREMENTALûACQUISITIONSv @CHIMERASûPEOPLEûAREûSTARTINGûTOûWAKEûUPûTOû
added. A banker away from the deal said he was THISûNEWûPHENOMENONvû(ALLOCKûSAIDû
While the deal, which funds the LKQ’s surprised by the tight spread between the pointing to a recent deal for Avolon.
acquisition of German peer Stahlgruber, led eight and 10-year tranches. !IRCRAFTûLEASINGûCOMPANYû!VOLONû"A""û
to a one-notch Moody’s downgrade to Ba2, 4HEûEIGHT YEARûCAMEûWIDEûCOMPAREDûWITHû RAISEDû53MûTHROUGHûAûlVE YEARûTRADEû
investors are unconcerned by the company’s recent offerings in the same tenor from earlier this year, but only after making
acquisitive strategies. Unlike the rest of Progroup and Elis, which were trading similar covenant tweaks.
LKQ’s unsecured debt, which was around 3% while LKQ’s deal was closing, Corestate (BB+ from S&P) was on the road
downgraded to Ba3, the new issue was rated ACCORDINGûTOû4RADEWEB Monday to Wednesday with the deal

BONDS HIGH-YIELD
eventually pricing on Friday at a yield of (OWEVERûAûSECONDûBANKERûAWAYû

3.75%, a relatively high level for the rating. disagreed with that view, arguing that ASIA-PACIFIC
A source with knowledge of the matter on the best indicator for sentiment in the
4HURSDAYûSAIDûTHEûDEALûWASûNOTûHELPEDûBYûAû sterling high-yield market was the SOFTBANK EXCHANGES BUT NO
volatile market backdrop. performance of the euro high-yield market. NEW-MONEY ISSUE
Credit Suisse and Morgan Stanley were joint (EûADDEDûTHATûTHEûMARKETûWOULDûSEEûAû
global coordinators. PICK UPûWITHûMOREûRElNANCINGûDEALSûINû SOFTBANK GROUP CORP announced the results of
April and May. ANûEXCHANGEûOFFERûFORûSOMEûOFûITSû53ûDOLLARû
VIRGIN MEDIA REVIVES STERLING Virgin Media will use proceeds from the and euro bonds, and said it had decided not
HIGH-YIELD 2&.SûTOûFUNDûTHEûCOMPANYSûVENDORû to launch a concurrent new-money issue.
lNANCINGûPROGRAMMEû4HEûNOTESûAREûSENIORû 4HEûCOMPANYûACCEPTEDûFORûEXCHANGEû
VIRGIN MEDIA revived the sterling high-yield to Virgin Media’s senior unsecured notes, 53MûOFûITSû53BNûûSû
MARKETûWITHûAûNEWûRECEIVABLESûlNANCINGû but junior to its credit facilities and secured 53MûOFûITSû53BNûûSû
notes offering last week. notes. õMûOFûITSûõMûûSû
4HEûSTERLINGûHIGH YIELDûMARKETûHADûBEENû 4HEûNOTESûPRICEDûVIAûJOINTûPHYSICALûBOOKSû õMûOFûITSûõBNûûSûANDû
DEADûSINCEû*ANUARYûWHICHûSAWûAûmURRYûOFû BNP Paribas, Credit Suisse and ING. €289.380m of its €500m 5.25% 2027s.
ISSUANCEûFROMûCONSUMERûNAMESû)SSUERSûINû )NûRETURNû3OFT"ANKûWILLûISSUEû
the currency have raised a mere £320m TEAMSYSTEM GOES FOR PRIVATE US$499.956m of new 6.25% 10-year bonds
through taps since then. PLACEMENT and €1.17bn of new 5% 10-year notes, both
h)TûWILLûBEûANûINTERESTINGûTESTûOFûDEMANDvû MATURINGûONû!PRILûûû4HEûSETTLEMENTû
said a banker away from the deal early in )TALIANûSOFTWAREûCOMPANYûTEAMSYSTEM sold a DATEûFORûTHEûEXCHANGEûOFFERûISû!PRILûû
marketing. PARTûOFûITSûõMûDUAL TRANCHEûmOATERûASûAû Earlier, indicative guidance was for
h#ERTAINLYûFROMûTHEûTONEûINûSECONDARYû private placement, a rarity in this type of minimum coupons of 6.000% and 4.625%,
sterling has felt softer across the board, EXERCISE respectively.
through from investment-grade down to 4HEûõMûlVE YEARûNON CALLûONEûTRANCHEû 4HEûDOLLARûSûWILLûEXCHANGEûATûAûRATEûOFû
high-yield. A lot of the sterling high-yield was sold publicly, pricing at 400bp over US$1,047.50 per outstanding US$1,000 in
MARKETûISûRETAILûSOûTHATûWEIGHSûINvûHEûSAID Euribor, the tight end of 400bp-425bp talk, principal amount and the 2025s at
!ûCOMPANYûOFlCIALûTOLDûANûINVESTORûCALLû while the €200m seven-year non-call one US$1,075.
EARLIERûONû4UESDAYûTHATûTHEûSHORTERûMATURITYû tranche has been pre-placed at the same 4HEûEUROûSûWILLûEXCHANGEûATûAûRATEûOFû
was chosen to optimise borrowing costs and TERMSûASûTHEûlVE YEARûGoldman Sachs and €1,098.75 per €1,000 in principal amount,
tap demand from short-duration funds. UniCredit ran the trade. the 2025s at €1,093.75 and the 2027s at
6IRGINû-EDIAûISSUEDûITSûlRSTû2&.SûINûû h)TSûAûRELATIVELYûLARGEûmOATERûALREADYû €1,126.25.
ASûAûaMûû3EPTEMBERûûNOTEû)TSû SOûYOUûWOULDûEXPECTûIFûYOUûREMOVEûAû 4HEû*APANESEûTECHNOLOGYûGROUPûALSOûSAIDûITû
last market outing was a tap that increased portion of it into a private placement you HADûRECEIVEDûSUFlCIENTûCONSENTûFROMûHOLDERSû
the outstanding to £800m in September. might be able to get better price tension on to amend certain terms on its dollar notes
4HEûaMûTAPûWASûUPSIZEDûTWICEûFROMûTHEû THEûREMAINDERûOFûTHEûDEALvûSAIDûAûBANKERû due 2022 and 2025, and its euro notes due
original £200m mandated. away. 2022, 2025 and 2027.
4HEûNEWûaMûNOTESûAREûJUSTûOVERûAûYEARû (OWEVERû4EAM3YSTEMSûLASTûDEALûINû-AYû (OLDERSûOFûûOFûTHEûNOTESûAGREEDûTOû
shorter, with an April 2023 maturity, 2016 was also a private placement. amend certain terms to bring them in line
though they have the same September 2019 Originally planned as a public syndication, it with those on its paper sold in September
CALLûDATEûASûTHEûOUTSTANDINGû2&.Sû4HEû was allocated to two Goldman Sachs funds 2017. One of the changes to the terms will
offering priced at a 5.75% coupon, the wide ANDûAûHANDFULûOFûTHIRD PARTYûINVESTORSû)&2û allow the group to release the guarantee on
end of 5.5%-5.75% guidance. reported at the time. its US dollar bonds due 2025 from telecom
h4HISûDEALûISûINTERESTINGûBECAUSEû /NEûINVESTORûTOLDû)&2ûDURINGûMARKETINGû subsidiary SoftBank Corp, which is
normally, Virgin Media and Liberty Global that the deal was marketed to investors EARMARKEDûFORûANû)0/
companies take every penny off the table ASûAûSINGLE TRANCHEûlVE YEARûNON CALLûONEû )TûWILLûPAYû53ûPERû53ûINû
ANDûLEAVEûYOUûWITHûVERYûLITTLEûCONCESSIONvû mOATER principal amount to consenting holders of
said an investor.
h4RYINGûTOûSECONDûGUESSûWHEREûWEûAREû ALL ASIAN HIGH-YIELD ISSUERS ALL EUROPEAN HIGH-YIELD ISSUERS
WITHû"REXITûHASûAûPRICEû)FûTHEYûCOULDûHAVEû 1/1/2018 TO DATE 1/1/2018 TO DATE
done a longer deal for the same price, they Managing No of Total Share Managing No of Total Share
WOULDûHAVEûDONEûITûBUTûTHEYûCANTv bank or group issues US$(m) (%) bank or group issues US$(m) (%)
4HEû"ANKûOFû!MERICAû-ERRILLû,YNCHû 1 Bank of China 6 698.90 6.7 1 BNP Paribas 14 1,573.59 7.4
STERLINGûHIGH YIELDûINDEXûHASûWIDENEDûNEARLYû 2 Citic 8 695.18 6.6 2 Deutsche Bank 13 1,354.97 6.4
60bp since the end of January, trading at 3 Credit Suisse 8 595.01 5.7 3 Credit Suisse 11 1,337.14 6.3
362bp against asset swaps on Monday when 4 Citigroup 5 423.92 4.1 4 Goldman Sachs 10 1,187.68 5.6
the deal was announced, according to 5 Haitong Securities 10 413.94 4.0 5 ING 9 1,148.10 5.4
4HOMSONû2EUTERSûDATA 6 Morgan Stanley 6 392.20 3.7 6 JP Morgan 12 1,082.07 5.1
4HEûBANKERûAWAYûFROMûTHEûDEALûSAIDûTHATû 7 BAML 5 377.50 3.6 7 Natixis 9 1,006.06 4.7
while a sterling pipeline is in the making, 8 Guotai Junan Securities 10 360.54 3.4 8 Barclays 10 995.70 4.7
ISSUERSûAREûBEINGûCAUTIOUSûh/NCEûYOUûSEEû 9 Deutsche Bank 5 332.33 3.2 9 Morgan Stanley 3 865.57 4.1
more investment-grade supply come out, 10 VTB Capital 4 324.99 3.1 10 BAML 6 827.12 3.9
maybe some of the more opportunistic Total 26 10,463.43 Total 37 21,192.69
STERLINGû;HIGH YIELD=ûTRADESûWILLûFOLLOWvûHEû Excluding equity-related debt. Excluding equity-related debt.
said. Source: Thomson Reuters SDC code: B06d Source: Thomson Reuters SDC code: B06c

the dollar bonds and €10 per €1,000 to redemption of a 2016 securitisation which DEALvûTHEûSECONDûINVESTORûSAIDûh!SûFORûHOWû
holders of the euro bonds. THEûNEWûISSUEûRElNANCES they manage the non-performing loans, you
Deutsche Bank, Bank of America Merrill Lynch 4HEûDEALûCOMESûAMIDûPRESSûCRITICISMûINû AREûTAKINGûAûVIEWûONûTHEûRECOVERYûOFûTHEû)RISHû
and Morgan StanleyûLEDûTHEûEXCHANGEûANDû )RELANDûABOUTûPRIVATEûEQUITYSûROLEûINûBUYINGû ECONOMYûWHICHûWEûTHINKûWILLûCONTINUEv
consent process. and working out non-performing mortgage 4HEû306ûOFFEREDûTWOûTRANCHESû4HEû!!û
portfolios. -OODYS$"23 û#LASSû!ûWASûSIZEDûATû
0ERMANENTû43"ûISûSELLINGûAûõBNû €215.377m and shown with a coupon pre-set
portfolio while Ulster Bank said in February at 100bp over one-month Euribor, while the
it could sell around 7,000 non-performing """"Aû#LASSû"ûOFûõMûHADûAûPRE SETû
STRUCTURED FINANCE MORTGAGESû!)"ûISûWIDELYûREPORTEDûTOûBEû coupon of plus 275bp.
selling a €3.75bn portfolio. Both tranches were priced below par.
)NVESTORSûSAIDûEUROPEAN RESIDENTIAL LOAN After talk heard at a discount margin of plus
EMEA MBS SECURITISATION (ERLS) 2018-1ûHADûBEENûEXPECTEDû 160-165bp on the Class A, that tranche came
TOûPRICEûTHEûPREVIOUSû&RIDAYû)TûSECURITISESû ATûPLUSûBPû)TûWASûûTIMESûCOVERED
RMAC NO.1 PRICING PUSHED BACK performing, re-performing and non- 4HEû#LASSû"ûWASûHEARDûATûPLUSûBPûAREAû
TO THIS WEEK PERFORMINGû)RISHûRESIDENTIALûMORTGAGESû and came at plus 485bp where it was 1.7
ORIGINATEDûBYûCOLLAPSEDû)RISHû.ATIONWIDEû times covered.
Pricing for PARATUS’ UK non-conforming Building Society and bought by Lone Star in 4HEû#LASSû!ûANDû"ûCOUPONSûSTEPûUPûONû
RMBS RMAC NO.1 has been pushed back to 2014. March 2021 to plus 200bp and plus 400bp
-ONDAYûORû4UESDAYûTHISûWEEKû)TûWASû h9OUREûREALLYûBUYINGûINTOû,ONEû3TARSû respectively.
INITIALLYûSLATEDûFORûASûEARLYûASû4HURSDAYûLASTû ABILITYûTOûWORKûOUTûORûSELLûTHEûLOANSvûSAIDû 4HEûPORTFOLIOûHASûANûINDEXEDû#,46ûOFû
week. ONEûINVESTORûh)FûYOUûBELIEVEûINûTHATûITSûANû 95.64%, with seasoning at 13.05 years, an
)04SûWEREûRELEASEDûONû4UESDAYûWITHûTHEû INTERESTINGûDEALûIFûYOUVEûGOTûRESERVATIONSû average remaining term of 14.7 years and
4RIPLEû!û#LASSû!SûATûTHREE MONTHû,IBORûPLUSû then you would conclude it’s an aggressive AVERAGEûCOUPONûATûû)NTEREST ONLYûLOANSû
HIGHûS ûTHEû!A!!û#LASSû"ûATûPLUSû RElNANCINGûINûAûTIGHTûMARKETv make up 13.58%.
BPûTHEû!!! û#LASSû#ûATûPLUSû BPû 4HEûDEALûWASûMARKETEDûUNDERûDIFFERENTû
ANDûTHEû"AA!û#LASSû$ûATûPLUSû BP weighted average life scenarios, with the BLACKSTONE BRINGING FINNISH
Average lives are 3.74 years for the Class As at one to two years if Lone Star is CMBS FROSN-2018
seniors and 5.21 years for the mezz. able to continue selling mortgages from the
4RANCHEûSIZESûHAVEûNOTûBEENûGIVENû4HEû portfolio, another investor said. With no A new CMBS from Finland, the chilly-
portfolio is around £650m but a book status SALESûTHEûEXPECTEDûAVERAGEûLIFEûEXTENDSûTOû sounding FROSN-2018, was announced on
update on Friday showed subscription levels around 2.6 years, with a call date in March 4HURSDAYû4HEûDEALûSECURITISESûAûSINGLEûLOANû
based on a £400m total deal size. 2021. BACKEDûBYû&INNISHûOFlCEûANDûRETAILûPROPERTIESû
4HOSEûPUTûTHEû#LASSû!ûûTIMESûCOVEREDûATû 4HEûMORTGAGESûWEREûlRSTûSECURITISEDûTWOû advanced by Citigroup and Morgan Stanley to
)04Sû#LASSESû"û#ûANDû$ûWEREûûTIMESûû years ago in ERLS 2016-1, as a €558m BLACKSTONEûTOûlNANCEûPARTûOFûTHEûPRIVATEû
times and 9.9 times covered. PORTFOLIOûCOMPRISINGûûLOANSû4HEûNEWû EQUITYûlRMSûACQUISITIONûOFû3PONDA
!LSOûOFFEREDûANDûMARKEDûhCALLûDESKvûAREû deal securitises 1,940 loans for €356.1m, and Blackstone bought real estate company
TWOû8ûNOTESûRATEDû#A### includes loans which are now re-performing Sponda in 2017.
&ORMALûGUIDANCEûISûEXPECTEDûONû-ONDAYû after work-out. Around two-thirds remain 4HEû#-"3ûISûFORûõMû4HEûROADSHOWû
BAML and Natixis are the leads. non-performing, with performing assets started on Friday and will run to
making up 37.9%. Wednesday, with joint leads Citigroup and
LONE STAR SQUEEZES OUT ERLS PRICING 4HEûPORTFOLIOûISûSERVICEDûBYû0EPPERû!SSETû Morgan Stanley EXPECTEDûTOûPRICEûTHEûDEALû
3ERVICINGûWHILEû(UDSONû!DVISORSûACTSûASû NEXTûWEEK
Morgan StanleyûRUSHEDûTOûPRICEûANû)RISHû2-"3û consultant. 4HEûCAPITALûSTRUCTUREûRUNSûFROMû4RIPLEû!û
from LONE STAR on Monday, leaving just two h,ONEû3TARûHAVEûTHEûABILITYûTOûSELLûASSETSû TOûAû"" "",û&ITCH$"23 û#LASSû%û4HEREûISû
days for settlement before the March 21 they have already done so in the 2016-1 also a Class X, which is not offered.
ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS ALL INTL ISSUERS (EXCLUDING SELF-FUNDED)
bank or group issues US$(m) (%) bank or group issues €(m) (%) bank or group issues US$(m) (%)
1 SG 4 3,030.38 13.5 1 SG 4 2,476.26 22.6 1 JP Morgan 29 7,483.98 9.8
2 BAML 6 1,968.42 8.8 2 Cooperatieve Rabobank 1 1,074.57 9.8 2 Wells Fargo 24 7,311.88 9.6
3 Lloyds Bank 8 1,658.33 7.4 3 Credit Agricole 3 966.80 8.8 3 BAML 24 6,850.09 9.0
4 BNP Paribas 7 1,432.50 6.4 4 Commerzbank 1 769.35 7.0 4 Citigroup 25 5,044.52 6.6
5 MUFG 1 1,398.52 6.2 =4 BAML 1 769.35 7.0 5 Credit Suisse 17 4,308.77 5.6
6 Cooperatieve Rabobank 1 1,309.36 5.8 6 UniCredit 3 690.39 6.3 6 Goldman Sachs 11 4,221.06 5.5
7 Credit Agricole 3 1,196.56 5.3 7 Standard Chartered 1 675.22 6.2 7 SG 8 4,213.22 5.5
8 Citigroup 4 1,122.43 5.0 8 ING 2 477.84 4.4 8 Deutsche Bank 20 3,862.77 5.1
9 Commerzbank 1 946.60 4.2 9 RBC 1 428.56 3.9 9 Barclays 15 3,852.77 5.0
10 HSBC 5 891.21 4.0 10 Deutsche Bank 1 383.50 3.5 10 RBC 13 3,014.83 3.9
Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, PFI bonds and credit-linked notes. Excludes US
domestics) and excludes CDOs. domestics) and excludes CDOs. global ABS/MBS, CDOs and self funded issues.
Source: Thomson Reuters SDC code: B16n Source: Thomson Reuters SDC code: B16g Source: Thomson Reuters SDC code: J10d

STRUCTURED FINANCE
Paratus foils Clifden raid but deals in play

RMBS Spat played out via exchange announcements
Asset management company PARATUS will The mortgage sale, named Project Grosvenor, RMACs and his inability to prove any holdings to
this week sell a new deal (called RMAC No.1) never concluded but the bids from investors the issuers and the trustee”.
to refinance the legacy RMAC series of non- gave Clifden a clear idea of the portfolio’s market However a source close to the transaction said
conforming residential mortgage securitisations value. that those exchange announcements were made
at the centre of an attempted raid by real estate On January 8 Clifden wrote to Fortress, at 5pm and Clifden supplied proofs of holding
investor Clifden. offering to buy Paratus. Fortress did not reply. later the same evening.
The securitised mortgages were originated The same day Clifden announced its tender Clifden declined to make any official comment.
by GMAC-RFC before the financial crisis. GMAC- offer, which it called Project Medusa, for the Although the RMAC bonds are now called,
RFC was later bought by Fortress and renamed RMAC deals and also a related series called the RMACS remain outstanding and so does
Paratus. RMACS, which is not yet callable. Clifden’s tender for those deals. An early tender
Paratus could have called, and refinanced, People involved said that if the tender offer deadline was extended to March 23 and the
these residential mortgage-backed had been successful it could have cost Paratus tender prices in effect bumped up to par.
securitisations many years ago but did not as around £40m - mainly made up of excess cash Market participants are still unsure whether
they were issued at levels tighter than prevailing it was due as owner of residual certificates - Clifden will be able to take control of those deals
post-crisis spreads. which entitle investors to cash left over in a SPV and their mortgages even if it acquires voting
But little-known real estate player Clifden once bondholders have been paid back. Other rights via a successful tender offer.
IOM No.1 – run by former securitisation banker investors who own residuals stood to lose a total Hussain, who appears to be the key mover
Rizwan Hussain – announced a hostile tender of around £20m, the people said. at Clifden, is a former securitisation banker
offer for the RMBS deals in January in a move On January 26 Paratus, while scrambling to at StormHarbour, ABN AMRO/RBS and
that would have seen Clifden seize control of discover if a deep-pocketed hedge fund stood WestLB and is listed as a director at Clifden
them from Paratus, the deals’ administrator and hidden behind the bid, announced the RMAC on the company’s website, which also shows
servicer. deals would be called on March 12, their next securitisation market veteran Robert Palache, a
Since then an increasingly ugly spat between interest payment date. lawyer turned investment banker, as adviser.
the two companies has played out in public via The call took place at par despite a last- The five other directors shown on the website
stock exchange announcements. minute attempt by Clifden to change the terms are employees of another company, Mann Made
The spat actually dates back to November of the tender and amend deal documents to Group, which is based on the Isle of Man and
2017 when, according to a source with increase the redemption amount. offers corporate trust and advisory services.
knowledge of the situation, Paratus joined other Clifden is also based there and shares both
investors bidding for a portfolio of mortgages “HAPHAZARD APPROACH” its Isle of Man address and a London one with
Clifden put up for sale. A senior official at Paratus accused Clifden of Mann Made.
Paratus did not realise these were in fact the a “haphazard approach to the entire tender In 2014, a related Clifden entity, Clifden
mortgages still securitised in Paratus’s own process” and suggested that on three of the Holdings, structured a securitisation of equity
RMAC deals. RMAC deals it had sought to amend the wrong release products. It had bought a £87.6m
redemption condition. portfolio from property company Grainger,
TIPPED OFF The official also referred to stock exchange deferring 40% of the purchase price.
The source said Paratus was tipped off that the announcements by eight RMAC issuers on The securitisation did not take place and
mortgages Clifden was selling were identical to March 7, which said the issuers had not received Clifden did not pay Grainger the remaining
the RMAC ones. any proof that Clifden had holdings in the £35m, according to Grainger and Companies
According to correspondence seen by IFR, deals. The official said there was a “discrepancy House documents that detail the liquidation of
Paratus then wrote to Clifden saying the between Rizwan Hussain’s statements about the Clifden Holdings.
mortgages were not Clifden’s to sell. size of Clifden’s holdings across the redeemed Chris Moore
4HEûUNDERLYINGûLOANûHASûAûû,46ûANDû CLIFDEN MODIFIES FAIRHOLD TENDER, PREMIUMûOFûû4HEûPREMIUMSûAREûONûTOPûOFû

is valued at €887.7m. Gross rental income is EXTENDS EARLY DEADLINE the purchase price for the Class As of 40%.
€79.6m and the senior debt yield is 10.2%. 4HATûPRICEûWILLûNOWûDROPûTOûJUSTûûFORûTHOSEû
)TûISûBACKEDûBYûûPROPERTIESûWITHûû Real estate investor CLIFDEN has changed the who tender after the March 28 early deadline.
OCCUPANCYûANDûAû7!ûUNEXPIREDûLEASEûTERMû terms of its tender for the FAIRHOLD 4ENDERûTERMSûFORûTHEû#LASSû"ûHAVEûNOTû
TOûBREAKûOFûûYEARSû4HEûLETTABLEûAREAûISû SECURITISATION, a CMBS backed by ground been changed.
524,060 square metres and there are 762 RENTûEXTENDINGûTHEûEARLYûTENDERûDEADLINEû Clifden’s Wednesday announcement also
tenants. from March 2 to March 28. REFERSûTOûAûhMAXIMUMûREQUIREDûHOLDINGvû
/FlCESûMAKEûUPûûRETAILûûANDûOTHERû Fairhold Securitisation is backed by cash Without specifying the size, Clifden says
types 21%. mOWûFROMûSHELTEREDûHOUSINGûAPARTMENTSû)Tû that once tendered notes reach that amount
"YûGEOGRAPHYûTHEû(ELSINKIûMETROPOLITANû was due to repay in 2017 but defaulted. it can reject further tenders from
AREAûACCOUNTSûFORûû4AMPEREûûANDû 4HOSEûWHOûTENDEREDû#LASSû!ûNOTESûBEFOREû NOTEHOLDERSûNOTIFYINGûTHEMûTHEûNEXTû
other locations 3%. the initial deadline will receive the early business day.
(Blackstone is buying a 55% stake in tender premium of 20%, as originally stated. )TûALSOûSAYSûITûMAYûATûITSûDISCRETIONûBRINGû
4HOMSONû2EUTERSû&INANCIALûANDû2ISKûUNITû But those who tender after that date but FORWARDûTHEûlNALûEXPIRATIONûDEADLINEûOFû-AYû
WHICHûINCLUDESû)&2 before the new early deadline will get a lower 18 and the settlement date of May 21.

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 23/3/2018
Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type
BBCMS 2018-TALL US$564.205 6.96 1mUSL+72.2bp Barclays/Deutsche Bank Aaa/NR/NR CMBS
BBCMS 2018-TALL US$127.015 6.96 1mUSL+97.1bp Barclays/Deutsche Bank Aa3/NR/NR CMBS
BBCMS 2018-TALL US$105.735 6.96 1mUSL+112.1bp Barclays/Deutsche Bank A3/NR/NR CMBS
BBCMS 2018-TALL US$136.8 6.96 1mUSL+144.9bp Barclays/Deutsche Bank Baa3/NR/NR CMBS
BBCMS 2018-TALL US$212.04 6.96 1mUSL+243.7bp Barclays/Deutsche Bank Ba3/NR/NR CMBS
BBCMS 2018-TALL US$112.955 6.96 1mUSL+323.5bp Barclays/Deutsche Bank B2/NR/NR CMBS
BLACKROCK EUROPEAN CLO V DAC €216 - E+72bp BAML Aaa/NR/AAA CLO
BLACKROCK EUROPEAN CLO V DAC €32 - 1.340 BAML Aaa/NR/AAA CLO
BLACKROCK EUROPEAN CLO V DAC €42 - E+110bp BAML Aa2/NR/AA CLO
BLACKROCK EUROPEAN CLO V DAC €24 - E+115bp BAML A2/NR/A CLO
BLACKROCK EUROPEAN CLO V DAC €21 - E+230bp BAML Baa2/NR/BBB CLO
BLACKROCK EUROPEAN CLO V DAC €25 - E+4444bp BAML Ba2/NR/BB CLO
BLACKROCK EUROPEAN CLO V DAC €12 - E+618bp BAML B2/NR/B- CLO
Contego CLO III €2 - 3mE+30bp BNP Paribas Aaa/NR/AAA CLO
Contego CLO III €181.50 - 3mE+77bp BNP Paribas Aaa/NR/AAA CLO
Contego CLO III €7 - 1.9 BNP Paribas Aa2/NR/AA CLO
Contego CLO III €28.16 - 3mE+115bp BNP Paribas Aa2/NR/AA CLO
Contego CLO III €18.24 - 3mE+155bp BNP Paribas A2/NR/A CLO
Contego CLO III €15.90 - 3mE+230bp BNP Paribas Baa2/NR/BBB CLO
Contego CLO III €19.95 - 3mE+455bp BNP Paribas Ba2/NR/BB CLO
Contego CLO III €8.25 - 3mE+610bp BNP Paribas B2/NR/B- CLO
DTRT 2018-1 US$275 0.20 2.200 BofA Merrill Lynch/Societe Generale/SMBC Nikko P1/NR/F-1+ ABS
DTRT 2018-1 US$355 0.84 2.600 BofA Merrill Lynch/Societe Generale/SMBC Nikko Aaa/NR/AAA ABS
DTRT 2018-1 US$297 1.75 2.850 BofA Merrill Lynch/Societe Generale/SMBC Nikko Aaa/NR/AAA ABS
DTRT 2018-1 US$110.883 2.54 3.030 BofA Merrill Lynch/Societe Generale/SMBC Nikko Aaa/NR/AAA ABS
Erls 2018-1 €215.377 1.1 1mE+100bp Morgan Stanley A2/NR/A RMBS
Erls 2018-1 €18.69 2.1 1mE+275bp Morgan Stanley Ba3/NR/BBB RMBS
GFORT 2018-1 US$168.79 1.97 0.30 JP Morgan/BAML/BMO/RBC CM Aaa/AAA/NR ABS
GFORT 2018-1 US$11.56 1.97 3.06 JP Morgan/BAML/BMO/RBC CM Aa2/AA/NR ABS
GFORT 2018-1 US$10.40 1.97 3.25 JP Morgan/BAML/BMO/RBC CM A2/NR/A ABS
GFORT 2018-1 US$9.2 1.97 3.50 JP Morgan/BAML/BMO/RBC CM Baa2/NR/BBB ABS
GFORT 2018-2 US$436.25 2.96 – JP Morgan/BAML/BMO/RBC CM Aaa/NR/AAA ABS
GFORT 2018-2 US$70.1 2.97 – JP Morgan/BAML/BMO/RBC CM Aaa/NR/AAA ABS
GFORT 2018-2 US$34.686 2.98 – JP Morgan/BAML/BMO/RBC CM Aa2/NR/AA ABS
GFORT 2018-2 US$31.218 2.99 – JP Morgan/BAML/BMO/RBC CM A2/NR/A ABS
GFORT 2018-2 US$27.746 2.10 – JP Morgan/BAML/BMO/RBC CM Baa2/NR/BBB ABS
NAVSL 2018-2 US$222 1.00 1mUSL+24bp RBC CM/Barclays/JP Morgan Aaa/AAA/NR ABS
NAVSL 2018-2 US$278 3.50 1mUSL+38bp RBC CM/Barclays/JP Morgan Aaa/AAA/NR ABS
NAVSL 2018-2 US$484.1 8.37 1mUSL+75bp RBC CM/Barclays/JP Morgan Aaa/AA+/NR ABS
NAVSL 2018-2 US$14.5 11.66 1mUSL+115bp RBC CM/Barclays/JP Morgan Aaa/A/NR ABS
OSCAR US FUNDING VIII LLC US$64.9 - n/a Mizuho Aaa/NR/NR ABS
Quarzo CQS 2018 S.r.l €598 2.41 1mE+37bp Banca IMI/Mediobanca/SCH/UniCredit Aa2/NR/NR ABS
STACR 2018-HQA1 US$225 1.39 1mUSL+70bp Wells Fargo/Credit Suisse NR/NR/BBB- RMBS
STACR 2018-HQA1 US$620 5.95 1mUSL+230bp Wells Fargo/Credit Suisse NR/NR/B RMBS
STACR 2018-HQA1 US$140 9.99 1mUSL+435bp Wells Fargo/Credit Suisse NR/NR/NR RMBS
Clifden appears to have made a RMAC RMBS, infuriated some investors ONû&EBRUARYûû)NûANûUPDATEûONû-ONDAYû
concession to investors holding back for fear earlier in March. Clifden said Deloitte had been giving it
THEIRûBONDSûCOULDûBEûTIEDûUPûINDElNITELYûINû Wednesday’s announcement for the advice on enforcement and restructuring
THEûPROCESSû)TûSAYSûHOLDERSûOFûNOTESûWHOû Fairhold tender offer said the amendments options in respect of the issuer.
tendered after March 2 will be able to revoke are not materially prejudicial to noteholders 4HEûPREVIOUSûWEEKû#LIFDENûHADûWARNEDûOFû
their tender instructions if the settlement who have already tendered, implying they possible legal action against the Fairhold
DATEûISûEXTENDED do not provide grounds for investors to NOTEûTRUSTEEû)TûSAIDûITûRESERVEDûTHEûRIGHTûTOû
#LIFDENSûUNEXPECTEDûCHANGESûTOûTHEû revoke their tenders. seek injunctive relief and bring a claim
terms of another tender offer, involving 4HEû&AIRHOLDûTENDERûOFFERûWASûANNOUNCEDû AGAINSTûITûFORûANYûBREACHûOFûDUTYû)TûALSOû

STRUCTURED FINANCE
threatened to seek a declaration that the !ûLEADûSAIDûTHEREûWASûSIGNIlCANTû ANOTHERûlXED RATEûTRANCHEûANDûPAYSûTHEû

trustee could not rely on any indemnity involvement from accounts either new to same 2.75% as the Class A1.
from the issuer or noteholders. ABS or absent for several years. 4HEREûISûALSOûANûUNRATEDû#LASSû"ûATûõMû
)NVESTORSûINû)TALYûTOOKûû&RANCEûû which will be retained.
'ERMANYûûTHEû"ENELUXûREGIONûûANDû 4HEûPORTFOLIOûHASûANû MONTHûREVOLVINGû
EMEA ABS Switzerland 3%. Asset managers bought 55%, PERIODû)TûISûWORTHûõMûANDûHOLDSûû
CENTRALûBANKSûANDûOFlCIALûINSTITUTIONSûû leases, with an average initial car purchase
FUTURO CUTS PREMIUM OF CDQ and banks 20%. PRICEûOFûõû4HEûTOTALûRESIDUALûVALUEûTOû
CONSUMER LOAN ABS 4HEûNOTESûAREûBACKEDûBYûAûõMûSTATICû initial purchase price is 36.9%, and the WA
portfolio of fully performing CDQ loans annual depreciation rate is 13%.
!ûSTRONGûBIDûFORû)TALIANûCONSUMERûlNANCEû with average outstanding principal of Some 85% of the portfolio is made up of
lRMûFUTURO’s securitisation of Cessione del õû4HEûWEIGHTEDûAVERAGEûINTERESTûRATEû diesel cars. Rater Scope says diesel vehicle
Quinto consumer loans allowed a tight print is 8.3%, seasoning 17.6 months and residual values could come under pressure as
and cut the premium over regular consumer remaining term 97.1 months. Retirees make diesel registrations decline in some European
LOANû!"3û4HEûDEALûWASûûTIMESûCOVEREDû up 40%, public employees 37% and private countries and some cities restrict their use.
and went to around 30 investors. employees 23%. (OWEVERûTHEûAGENCYûSAYSûITûDOESûNOTû
h)NûTHEûPASTûTHEûPICKUPûFORûTHISûTYPEûOFû 4HEREûISûALSOûAûõMûUNRATEDû#LASSû"û EXPECTûUSEDûCARûPRICESûFORûDIESELûANDûNON
loan was punishing, but this time the deal which was retained. diesel cars in Greece to diverge materially
PROVIDEDûREALLYûCOMPETITIVEûFUNDINGvûSAIDû Futuro is a subsidiary of Compass Banca during the life of the deal.
one of the leads. ANDûPARTûOFûTHEû-EDIOBANCAû'ROUPû)TSûLASTû
QUARZO CQS 2018 securitised secured CDQ ABS was in 2015. AMAG LEASING MANDATES CREDIT
lXED RATEûCONSUMERûLOANSûKNOWNûASû SUISSE FOR SWISS AUTO ABS
Cessione del Quinto, where payments are HERTZ’S GREEK FRANCHISEE
directly debited from the salaries or AUTOHELLAS READIES AUTO LEASE ABS AMAG LEASING is readying a securitisation of
PENSIONSûOFûOBLIGORSû4HEûLOANSûAREûINSUREDû 3WISSûAUTOûLEASEûRECEIVABLESû)TûHASûMANDATEDû
against the death or unemployment of HERTZ’s Greek franchisee AUTOHELLAS is Credit Suisse to arrange investor meetings in
obligors. readying a securitisation of Greek :URICHûONû4UESDAYûAHEADûOFûAû3WISSûFRANC
Unlike regular consumer loan deals, operational car leases. StormHarbour is denominated new issue, SWISS CAR ABS 2018-1.
INVESTORSûINû#$1ûSECURITISATIONSûAREûEXPOSEDû arranger for the deal, AUTOWHEEL 4HEû&ITCHûPRE SALEûREPORTûSAYSûTHEûDEALûWILLû
to the failure of the employees and the SECURITISATIONûWHICHûISûEXPECTEDûTOûBEû ISSUEûAûlXED RATEû4RIPLEû!ûSENIORûTRANCHEû
companies providing insurance. PLACEDûWITHûINVESTORSû3TORM(ARBOURû sized at SFr275m.
)NVESTORSûALSOûFACEûGREATERûUNCERTAINTYû declined to outline a timeline for its 4HEûPORTFOLIOûHASûAûTHREE YEARûREVOLVINGû
around prepayment speeds. CDQ borrowers EXECUTION period. Residual value is securitised and can
have the option to prepay once their loan 4HEûDEALûSECURITISESûOPERATIONALûCARûLEASESû MAKEûUPûAûMAXIMUMûûOFûTHEûPORTFOLIOû
REACHESûTWO lFTHSûOFûITSûMATURITYûANDûTHEREû to Greek corporates and SMEs, and future Car dealers are supposed to pay RV to the
are a number of smaller companies who sales proceeds from the underlying vehicles. issuer.
SPECIALISEûINûHELPINGûBORROWERSûRElNANCEûATû )TûWILLûACCOUNTûFORûAROUNDûHALFûOFû!UTOHELLASû 4HEREûAREûûLOANSûINûTHEûPORTFOLIOû
that point. lease book. with an average outstanding balance of
4HESEûVARIABLESûUSEDûTOûMEANûINVESTORSû Residual values comprise up to 40% of the SFr27,000. Seasoning is seven months and
demanded a lumpy premium for CDQ balance. THEû7!ûREMAININGûTERMûISûûMONTHSû4HEû
SECURITISATIONSû4HEûLASTûSIZEABLEûDEALûWASû 4HEREûAREûFOURûTRANCHESûTOTALLINGû NEWUSEDûSPLITûISûûANDûTHEûPRIVATE
4OWERSû#1ûFROMû)NTESAû3ANPAOLOûINû*UNEû €101.5m, according to a pre-sale report from COMMERCIALûSPLITûISû
2016, which sold €800m notes at 95bp over Scope Ratings. 4HEûORIGINATORûLASTûCAMEûTOûMARKETûWITHû
three-month Euribor, a 30bp premium over Classes A1, A2 and A3 are rated BBB-. Class Swiss Car ABS 2016-2 in April 2016. AMAG’s
a regular consumer loan deal that priced !ûISûõMûANDûPAYSûAûlXEDûûCOUPONû main business is the import of VW group
one week later off Agos Ducato’s Sunrise Class A2 is €35m and will pay 270bp over vehicles and marketing them in Switzerland
platform. ONE MONTHû%URIBORû4HEûõMû#LASSû!ûISû through a dealer network.
4HEûNEWûISSUEûFROMû&UTUROûPRICEDûITSû
€598m senior notes at plus 37bp, GLOBAL SECURITISATIONS IN STERLING SECURITISATIONS – ALL EUROPEAN RMBS
representing just a 10bp premium over BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE
where paper from another Sunrise deal, Managing No of Total Share Managing No of Total Share
Sunrise 2017-2, was heard bid in the bank or group issues £(m) (%) bank or group issues €(m) (%)
secondary market. 1 MUFG 1 1,006.20 19.2 1 Cooperatieve Rabobank 1 1,074.57 13.5
4HEûAVERAGEûLIFEûFORû1UARZOûISûûYEARSû 2 Lloyds Bank 8 817.76 15.6 =1 SG 1 1,074.57 13.5
while the Sunrise deal has a remaining WAL 3 Citigroup 4 668.78 12.7 3 Citigroup 4 917.77 11.5
of around 1.9 years. One of the leads said the 4 BNP Paribas 5 581.55 11.1 4 BAML 5 829.25 10.4
new Quarzo was already bid at plus 35bp in 5 BAML 5 482.85 9.2 5 Lloyds Bank 5 772.04 9.7
secondary. 6 HSBC 3 374.33 7.1 6 BNP Paribas 3 672.44 8.4
4HEû#LASSû!ûWASûTHEûONLYûTRANCHEûONûOFFERû 7 RBC 3 227.10 4.3 7 Barclays 2 445.28 5.6
)TûISûRATEDû!A!!,ûBYû-OODYSûANDû$"23 8 Natixis 2 214.10 4.1 8 HSBC 2 434.75 5.5
Joint leads Banca IMI, Mediobanca, Santander 9 Barclays 2 197.50 3.8 9 Deutsche Bank 1 383.50 4.8
and UniCredit WENTûOUTûWITHû)04SûONû-ONDAYû 10 JP Morgan 1 175.00 3.3 10 Goldman Sachs 1 248.72 3.1
at 40bp area before tightening to 37-38bp Total 14 5,250.28 Total 12 7,963.27
WPIR ûGUIDANCEûONû4UESDAYûAHEADûOFû Including Euro, foreign, global and domestics, excluding CDOs. Including Euro, foreign, global and domestics, excluding CDOs.
pricing the same day. Source: Thomson Reuters SDC code: B16i Source: Thomson Reuters SDC code: B10a

4HEûDEALûSIZEûWASûõM
Prosper sells biggest bond Deal terms include a two-year non-call

period and a reinvestment period of 4.5
years.
deal yet
US MBS
ASSET-BACKED Introduces new loan funding feature
US CMBS AND RMBS DEAL PRICINGS
PROSPER’s fortunes in the bond market have been Prosper since has taken more control over
on the rise ever since it took control nearly a year the structure - and timing - of deals that spin its CMBS PRICED
ago over how its loans are securitised - and now loans into bonds.
it has its biggest bond yet. BBCMS 2018-TALL
The internet lender cleared a US$650m NEW TWISTS BLACKSTONE REAL ESTATE PARTNERS priced a
securitisation of personal loans last week that The online lender now has four bonds from its 53BN PLUSûSINGLE ASSETSINGLEûBORROWERû
saw high demand and tight pricing. Prosper Marketplace Issuance Trust shelf under mOATING RATEû#-"3ûTRANSACTIONûBBCMS 2018-
“We saw a very strong book of nearly 40 its belt, and the company has secured a windfall TALL MORTGAGE TRUST. Barclays and Deutsche Bank
investors,” a person familiar with the sale told investment. are joint bookrunners and co-lead managers.
IFR. “And we were oversubscribed on the subs It inked a US$5bn loan purchase agreement #OLLATERALû&IRSTûMORTGAGEûONûTHEû
right out of the gate.” in February 2017 with a group of funds and borrower’s fee simple interest in the
Demand narrowed pricing on the biggest Jefferies to help shore up more capital for the PROPERTYû4HEû7ILLISû4OWERûFORMERLYûKNOWNû
0.79-year class of A-/A+ rated notes to 70bp company. ASûTHEû3EARSû4OWERûAû STOREYû#LASSû!û
over iSwaps, or 10bp inside Prosper’s prior deal Kroll’s pre-sale report said the company has OFlCEûBUILDINGûINû)LLINOIS
in October. incurred losses in all but two quarters since its ,ARGESTûTRANCHEû#LASSû!û53Mû
But the highest-risk class of subordinate notes inception in 2005. WITHû YEARû7!,ûRATEDû4RIPLEû!ûPRICEDûATû
was the real standout. To help fund more loans, Prosper introduced a one-month Libor plus 85bp.
The 3.03-year B+ rated tranche priced at a new feature in its latest bond sale that allows the
spread of 300bp over iSwaps to yield 5.774%. lender to use proceeds to fund about 15% of the GS MORTGAGE TRUST
Two years ago when Citigroup was packaging final collateral pool. GOLDMAN SACHS priced a US$762.464m CMBS
Prosper loans into bonds, investors demanded a Fitch said certain limits apply to the purchase conduit transaction called GS MORTGAGE TRUST
heavy 12.5% yield to take up the BB-/B rated paper. of additional loans for the pool, including a 2018-GS9. Goldman Sachs is lead manager.
Prosper’s president at the time, Ron Suber, minimum credit score of 715 and a weighted #OLLATERALûûLOANSûSECUREDûBYûû
told an industry conference shortly thereafter average interest rate of 14.2%. properties.
that his company had been too quick to And while bond investors typically like to know ,ARGESTûTRANCHEû#LASSû! û53Mû
relinquish control in the securitisation market. exactly what they are buying, Prosper’s new bond WITHû YEARû7!,ûRATEDû4RIPLEû!ûPRICEDûATû
Prior to establishing its own shelf, Prosper had sale went off without a hitch. swaps plus 79bp.
little say about how deals with its collateral were The deal was quickly oversubscribed last
put together or when to come to market for best Tuesday, only a day after it was announced, the RMBS PRICED
pricing. person familiar with the trade told IFR.
“When we don’t have alignment with our “We didn’t get any questions on it.” FREDDIE MAC
investors, when groups sell our loans into Credit Suisse structured the bond, called PMIT FREDDIE MAC priced a US$985m structured
the market no matter what – if the market’s 2018-1, and was a joint bookrunner with Jefferies. agency credit risk transaction, called STACR
not ready, it’s not good,” Suber said at the Prosper declined to comment. 2018-HQA1. Wells Fargo structured the deal and
conference. Joy Wiltermuth was a lead manager with Credit Suisse.
Largest tranche: Class M-2 US$620m, with
YEARû7!,ûRATEDû"""ûPRICEDûATûONE
Credit Suisse is arranger and bookrunner with respective discount margins of 484bp month Libor plus 230bp.
for the new ABS. UBS and Zürcher and 685bp.
Kantonalbank are senior co-managers. 4HEREûISûAûTWO YEARûNON CALLûPERIODûANDûAû
reinvestment period ending in July 2022. US ABS
EMEA CLO BLACKROCK EUROPEAN CLO V PRICED ABS APPETITE STILL RUNNING HIGH
VIA BAML
CONTEGO CLO III IS RESET FOR DAIMLER, GM FINANCIALand NAVIENT came to
FIVE ARROWS European leveraged loan deal BlackRock market after one of the busiest weeks for
%UROPEANû#,/û6ûWASûPRICEDûONû4UESDAYûVIAû ABS in years, and still managed to pull off
Lead manager BNP Paribas has priced a "ANKûOFû!MERICAû-ERRILLû,YNCHû4HEû BIGGERûDEALSûTHANûEXPECTED
€300m reset of European leveraged loan CLO MANAGERûISû"LACK2OCKû)NVESTMENTû Books were slower to build on some
CONTEGO CLO IIIû4HEûPORTFOLIOûMANAGERûISûFIVE Management. TRADESûTHANûTHEûRAPID lREûPACEûSEENûEARLIERû
ARROWS MANAGERS, part of the Rothschild 4HEûMARGINûOVERû%URIBORûWASûBPûONûTHEû this year. But syndicate bankers said the
group and formerly known as Elgin Capital. 4RIPLEû!SûBPûONûTHEû$OUBLEû!SûBPûONû wait was worth it.
4HEû4RIPLEû!SûCAMEûATû%URIBORûPLUSûBPû THEû3INGLEû!SûANDûBPûONûTHEû4RIPLEû"Sû h4HEûMARKETûGETSûSOFTERûTOWARDûQUARTERû
Double As at plus 115bp, Single As at plus 4HEû$OUBLEû"ûANDû3INGLEû"ûTRANCHESûWEREû ENDvûSAIDûONEûSYNDICATEûCHIEFûh"UTûATûTHEû
BPûANDû4RIPLEû"SûATûPLUSûBPû4HEû priced below par to give respective discount end of the day, we were able to upsize
Double Bs and Single Bs priced below par margins of 485bp and 690bp. SEVERALûDEALSv

STRUCTURED FINANCE
$AIMLERû4RUCKSû.ORTHû!MERICAûBUMPEDû 4HEûAVERAGEûWEEKûINûûHASûSEENû includes four classes with a 1.97-year

up its inaugural truck loan deal to some US$1.95bn of consumer ABS put 7!,ûANDûRATINGSûFROMû!AA!!!ûTOû
US$1.03bn from US$753.6m. And the out for bids, or a 21% jump in activity "AA"""û4HEû ûTRANSACTIONû
biggest slice of the trade, called DTRT 2018-1, versus the same period last year, according INCLUDESûlVEûDIFFERENTûCLASSESûWITHûAû
came tighter. to Empirasign, a company that tracks YEARû7!,ûANDûRATINGSûFROMû!AA!!!û
4HEû53MûSLUGûOFû YEARû4RIPLEû!Sû trading in asset-backed and mortgage TOû"AA"""
priced at EDSF plus 18bp, 2bp inside of bonds. #OLLATERALû$EALERûmOORPLANûRECEIVABLES
guidance. h4HERESûBEENûAûLOTûOFûSUPPLYûOFûNEWûISSUESû ,ARGESTû&2.ûTRANCHEû'&/24û û!û
GM also increased its GFORT 2018-1/2 dealer ANDûAûLOTûINûSECONDARYvûANOTHERûSYNDICATIONû 53MûWITHû YEARû7!,ûRATEDû!AA
mOORPLANûTRADEûBYû53MûTOû53Mû banker said. !!!ûPRICEDûATûONE MONTHû,IBORûPLUSûBPû
but saw some give on pricing. )SSUERSûSOMETIMESûHAVEûTOûGIVEûUPûAûFEWû versus guidance at one-month Libor plus 25-
)TSû53Mû4RIPLEû!ûRATEDû YEARû EXTRAûBASISûPOINTSûTOûGETûINVESTORSûINTERESTEDû 28bp.
mOATERSûPRICEDûATûBPûOVERûONE MONTHû in deals at quarter end but paying slightly $IRECTûCOMPû#LASSû!û û53Mû
Libor after being guided in the 25bp-28bp more spread is not seen as a threat to doing '&/24û ûWITHû YEARû7!,ûRATEDû
area. business. !AA!!!ûPRICEDûATûONE MONTHû,IBORûPLUSû
)NûTHATûVEINû3TUDENTûLENDERûNAVIENT also h'ENERALLYû)ûTHINKûTHEREûISûVERYûSTRONGû 35bp.
opted for a bigger US$998.6m deal after DEMANDvûANû!"3ûINVESTORûTOLDû)&2
testing appetite for US$748.6m. h$EALSûAREûGETTINGûDONEûATûGOODûLEVELSv NAVIENT CORPORATION
)TSûLARGESTû53Mû4RIPLEû!ûCLASSûOFû NAVIENT CORPORATION priced an upsized
YEARûmOATING RATEûNOTESûPRICEDûATûBPû US ABS DEAL PRICINGS US$998.6m (increased from US$748.6m)
over one-month Libor, versus talk in the private FFELP student loan-backed
75bp-80bp area. DAIMLER TRUCKS RETAIL TRUST transaction called NAVIENT STUDENT LOAN TRUST
h7EREûACTUALLYûSEEINGûMOREûINTERESTûINû DAIMLER priced an upsized US$1,037.833m (NAVSL) 2018-2. RBC structured the deal and
mOATERSvûTHEûSYNDICATEûBANKERûSAID (increased from US$753.587m) truck was a joint lead with Barclays and JP Morgan.
h/RDERûBOOKSûAREûALWAYSûMOREûlXEDûTHANû equipment loan securitisation, called #OLLATERALû3TUDENTûLOANS
mOATINGû"UTûRECENTûmOATING RATEûBOOKSûHAVEû DAIMLER TRUCKS RETAIL TRUST (DTRT) SERIES 2018. ,ARGESTûTRANCHEû#LASSû!û53Mû
been marginally better. Bank of America Merrill Lynch structured the WITHû YEARû7!,ûRATEDû!AA!!!!!û
deal and was a joint lead with SocGen and priced at one-month Libor plus 75bp versus
SECONDARY FLURRY SMBC. guidance at one-month Libor plus 75-80bp.
Volatility that hit other parts of the #OLLATERALû4HEûPOOLûISûMADEûOFûlXED RATEû $IRECTûCOMPû#LASSû!û û53Mû
markets has yet to dampen appetite for loans secured by primarily new and some .!63,û ûWITHû YEARû7!,ûRATEDû
ABS. used trucking and transport equipment 4RIPLEû!ûPRICEDûATûPLUSûBP
Online lender Prosper last week also including tractors, trailers, buses and vans,
sold its biggest securitisation yet of according to Moody’s presale. PROSPER
personal loans, a segment prone to ,ARGESTûTRANCHEû#LASSû! û53MûWITHû PROSPER priced a US$647.5m unsecured
widening. YEARû7!,ûRATEDû!AA!!!ûPRICEDûATû consumer loan ABS securitization called PMIT
4HEûDEALûSAWûSOLIDûDEMANDûEVENûTHOUGHû EDSF plus 18bp versus guidance of EDSF 2018-1. Credit Suisse structured the deal and
investors have had plenty of options to place plus 20bp area. was a joint bookrunner with Jefferies.
bets elsewhere. #OLLATERALû#ONSUMERûLOANS
Earlier this month investors took down a GM FINANCIAL ,ARGESTûTRANCHEû#LASSû!û53MûWITHû
US$16bn deluge of fresh ABS supply all in GM FINANCIAL priced an upsized US$800m YEARû7!,ûRATEDû! !ûPRICEDûATû%$3&û
one week - the sector’s busiest since at least (increased from US$700m) Floorplan Owner plus 70bp versus guidance at EDSF plus 70bp
ûACCORDINGûTOû)&2 2EVOLVINGû4RUSTûCALLEDûGFORT 2018-1 and GFORT area.
Secondary market activity in consumer- 2018-2. JP Morgan structured the deal and was $IRECTûCOMPû#LASSû!û û
based ABS also has been running high all a joint lead with Bank of America Merrill Lynch, 53Mû0-)4û ûWITHû YEARû
year. BMO and RBC.û4HEû ûTRANSACTIONû 7!,ûRATEDû! !ûPRICEDûATû%$3&ûPLUSûBP
US ASSET-BACKED SECURITIES GLOBAL STRUCTURED FINANCE IN US$ STRUCTURED FINANCE – ALL INTL ISSUERS
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 Citigroup 38 15,738.92 20.3 1 Citigroup 62 23,882.84 14.7 1 Wells Fargo 25 7,493.94 9.2
2 BAML 26 7,381.56 9.5 2 Wells Fargo 54 18,472.00 11.4 2 JP Morgan 29 7,483.98 9.2
3 JP Morgan 28 6,922.52 8.9 3 JP Morgan 57 16,920.66 10.4 3 BAML 26 7,384.01 9.0
4 RBC 20 5,662.21 7.3 4 BAML 47 15,963.63 9.8 4 Citigroup 26 5,345.36 6.5
5 Deutsche Bank 23 4,859.42 6.3 5 Credit Suisse 31 13,103.06 8.1 5 Barclays 18 4,721.24 5.8
6 Mizuho 14 4,733.50 6.1 6 Morgan Stanley 22 9,446.81 5.8 6 Deutsche Bank 21 4,488.03 5.5
7 Barclays 19 4,604.39 5.9 7 Goldman Sachs 26 8,564.55 5.3 7 Credit Suisse 17 4,308.77 5.3
8 Wells Fargo 21 4,394.56 5.7 8 Deutsche Bank 31 7,628.86 4.7 8 SG 9 4,223.35 5.2
9 Goldman Sachs 12 3,452.81 4.5 9 Barclays 29 7,527.46 4.6 9 Goldman Sachs 11 4,221.06 5.2
10 MUFG 11 3,251.49 4.2 10 RBC 23 6,750.96 4.2 10 RBC 14 3,764.82 4.6
Excludes MBS. Including securitisations (Euro, foreign, global and domestics, excluding Includes securitisations, PFI bonds, self-funded issues and credit-linked
CDOs) and PFI bonds. notes. Excludes US global ABS/MBS and CDOs.
Source: Thomson Reuters SDC code: F14 Source: Thomson Reuters SDC code: B16b Source: Thomson Reuters SDC code: J10c

Association, the trade group representing NAB was arranger on the offering, which
US CLO the US CLO and leveraged loan markets, had an indicative issue size of A$700m, and
sued the Federal Reserve and Securities and joint lead manager with CBA and Westpac.
MID-MARKET CLOS STILL ON THE HOOK %XCHANGEû#OMMISSIONûARGUINGûRISKû
FOR RISK RETENTION RETENTIONûWASûhARBITRARYûCAPRICIOUSvûANDû LA TROBE WORKS ON RMBS
hANûABUSEûOFûDISCRETIONv
Managers of CLO funds that lend to mid- !û53ûCOURTûRULEDûINûTHEû,34!SûFAVOURûINû Oldest Australian non-bank lender LA TROBE
market US companies must continue to February and agreed that CLOs that invest in FINANCIAL has released initial price guidance
MEETû@SKINûINûTHEûGAMEûRULESûDESPITEûAûCOURTû BROADLYûSYNDICATEDûLOANSûAREûEXEMPTûFROMû for an indicative A$500m offering of non-
ruling which let most of the investment the rule, because they do not originate the CONFORMINGû2-"3û,Aû4ROBEû&INANCIALû
lRMSûOFFûTHEûHOOK debt that they invest in. #APITALû-ARKETSû4RUSTû
Middle-market balance sheet CLOs will Regulators had 45 days from the February Macquarie is sole arranger and joint lead
NOTûBENElTûFROMûAûRECENTûEXEMPTIONûTOû 9 ruling to seek a review from the Appeals manager with CBA, NAB, Natixis, Westpac and
Dodd Frank regulation that is helping the #OURTû4HEREûISûALSOûAûSEPARATEû DAYû HSBC on the issue, to be launched on
rest of the US$511bn US CLO market to window to request a Supreme Court review. Monday.
thrive, as they often securitise the loans that Although the court ruling will not impact Price guidance for the A$100m Class A1s
they originate. most middle-market CLOs, there may be notes, with a 0.34-year weighted-average
4HEûMID MARKETûFUNDSûWHICHûAREûUSEDûBYû grey areas for some funds depending upon life, is one-month BBSW plus 70bp area,
LENDERSûINCLUDINGûCOMMERCIALûlNANCEû how they were set up, according to Matt while that for the A$250m Class A1L and
companies and private credit asset :OLAûHEADûOFûlXEDûINCOMEûATû.ATIXIS A$89m Class A2 notes, both with 2.7-year
managers for funding, will still have to fund h4HEREûAREûSOMEûSTRUCTURESûWHEREûTHEREûISû WALs, is one-month BBSW plus 120bp–
the retention, despite a victory for the asset ANûAFlLIATEûTHATûDOESûTHEûORIGINATIONûANDû 125bp and 160bp–165bp, respectively.
class in a US Court of Appeals last month. ANOTHERûAFlLIATEûTHATûISûTHEûACTUALûMANAGERû For the A$20m Class B, A$15.5m Class C,
h2ISKûRETENTIONûSTILLûAPPLIESûTOûMIDDLE and in those circumstances, that’s where it A$11m Class D, A$6.5m Class E and A$4.5m
MARKETû#,/Sû4HEûRULINGûONLYûAPPLIESûTOû gets a little less clear whether or not the Class F notes, price talk is one-month BBSW
participation vehicles, but does not apply to #IRCUITû#OURTû;DECISION=ûAPPLIESvûHEûSAID plus 200bp area, low 300s, low 400s, 600bp
THOSEûWHOûDOûDIRECTLYûORIGINATEDûDEALSvûAû h)NûTHOSEûCIRCUMSTANCESûWHEREûTHEREûISûANû AREAûANDûBPûAREAûRESPECTIVELYû4HEû
middle-market lender said. origination entity and then a separate transaction is completed with A$3.5m of
Most CLOs are investment vehicles that management entity, there might be some equity notes.
sell tranches of varying risk to investors DAYLIGHTûFORûTHEû#IRCUITûRULINGûTOûAPPLYv 4HEû"SûTOû%SûHAVEû YEARû7!,SûWHILEû
backed by a pool of loans made to large US the Fs have a 2.9-year WAL.
companies. Balance sheet CLOs, in contrast, 4HEû!ûNOTESûHAVEûûCREDITûSUPPORTûANDû
SERVEûPRIMARILYûTOûOFmOADûAûPORTFOLIOûOFû ASIA-PACIFIC MBS THEû!SûHAVEûû4HEû"SûTOû&SûHAVEû
middle-market loans originated by the respective support of 9.2%, 5.1%, 2.9%, 1.6%
manager. PEPPER NON-CON RAISES A$1bn and 0.7%.
h)NûWHATûTHEûMARKETûISûREFERRINGûTOûASû 4HEûTRANSACTIONûHASûûOFûLOANSûTOû
@BALANCEûSHEETû#,/SûTHEREûISûTYPICALLYûAûSALEû .ON BANKûLENDERûPEPPER GROUP issued last credit impaired borrowers, well under the
or transfer of assets from an entity that Wednesday an enlarged A$1bn equivalent industry standard within the specialist
organises and initiates the related dual-currency non-conforming RMBS, called lending sector, according to the leads.
TRANSACTIONû)TûISûTHATûSALEûORûTRANSFERûTHATûISû 0EPPERû2ESIDENTIALû3ECURITIESû4RUSTû.Oû ,Aû4ROBEûSOLDûITSûlFTHûANDûLARGESTûNON
going to make the entity effectuating such 4HEû!Mû#LASSû! 3ûNOTESûWITHûAû conforming RMBS last September through
sale or transfer subject to the US risk- weighted-average life of 0.4 year, priced in THEûENLARGEDû!Mû,Aû4ROBEû&INANCIALû
RETENTIONûRULESvûSAIDû3EANû3OLISûAûPARTNERûATû line with guidance at one-month BBSW plus #APITALû-ARKETSû4RUSTû
LAWûlRMû$ECHERT 65bp.
Middle-market lenders often held the 4HEû!Mû! Aû!Mû!ûANDû!Mû
equity in balance sheet CLOs, even before B notes, with WALs of 2.7, 2.7 and 3.8 years, ASIA-PACIFIC ABS
the Dodd-Frank rules were implemented. priced at one-month BBSW plus 120bp,
Many managers use the transactions as a 155bp and 190bp, respectively. LATITUDE ABS NETS A$500m
funding portfolio and historically have held 4HISûCOMPARESûWITHûlNALûGUIDANCEûOFû
the equity of their deals, according to David 120bp area, 160bp area and 190bp–200bp LATITUDE FINANCE AUSTRALIA issued its third
"URGERûAûVICEûPRESIDENTûATû-OODYSû)NVESTORSû area, with talk for the A2 notes having been securitisation of credit card receivables last
Service. cut from the initial 160bp–165bp area. 4HURSDAYûWITHûAû!MûSALEûVIAû,ATITUDEû
h2ISKûRETENTIONûDIDNTûREALLYûCHANGEû 4HEû53Mû! UûNOTESûWITHûAû YEARû !USTRALIAû#REDITû#ARDû,OANû.OTEû4RUSTû3ERIESû
MUCHûTHATSûTHEûNATUREûOFûTHEIRûBUSINESSvû WAL, priced 50bp wide of one-month US 2018-1.
HEûSAIDû-IDDLE MARKETûMANAGERSûhHELDûTHEû Libor. 4HEû!Mû#LASSû!û!Mû
equity, so not a big deal in the switch to risk 4HEûSTRUCTUREûALSOûINCLUDESû!Mû#LASSû Class A2, A$28.8m Class B, A$26.175m Class
RETENTIONv Cs and A$20m Class Ds, both with 3.8-year C, A$20.93m Class D and A$18.32m Class E
4HEûSWEEPINGû$ODD &RANKûRULESûWEREû WALs, A$15m Class Es, with a 3.6-year WAL, notes, all with 5.0-year weighted-average
signed into law in 2010 in response to the A$10m Class Fs, with a 2.6-year WAL, and lives, priced at one-month BBSW plus
credit crisis and include risk-retention rules A$10m Class Gs, with a 5.0-year WAL. 110bp, 145bp, 195bp, 225bp, 310bp and
that force managers to hold 5% of their 4HEû! 3û! AûANDû!ûNOTESûAREûRATEDû!AA 425bp.
funds, a requirement that was hotly !!!û-OODYS30 û4HEû"SûTOû&SûHAVEû!!û!û 4HESEûLEVELSûWEREûINSIDEûORûATûTHEûTIGHTû
contested by CLO managers. """û""ûANDû"ûFROMû30ûRESPECTIVELYû4HEû ends of initial price talk of one-month BBSW
!FTERûTHEûlNALûRELEASEûOFûTHEûRULEûINûû ! UûNOTESûAREûRATEDû0 ! û plus 110bp–115bp, 150bp–160bp, low 200s,
THEû,OANû3YNDICATIONSûANDû4RADINGû -OODYS30 mid 200s, mid 300s and high 400s.

STRUCTURED FINANCE
The A1, A2, B, C, D and E notes have GLOBAL CDOs ALL EUROMARKET CDOs
respective credit support of 32.5%, 22.5%, BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE
17%, 12%, 8% and 4.5%. Managing No of Total Share Managing No of Total Share
Class A1 notes of A$200m were pre-placed. bank or group issues US$(m) (%) bank or group issues US$(m) (%)
Bank of America Merrill Lynch was sole 1 Citigroup 19 10,487.95 59.1 1 Citigroup 4 2,112.91 26.3
arranger and joint lead manager on the 2 Deutsche Bank 2 1,088.69 6.1 2 Credit Suisse 2 930.17 11.6
issue with Deutsche Bank and NAB. 3 Credit Suisse 2 930.17 5.2 3 BNP Paribas 2 909.95 11.3
Last March, Latitude, Australia’s biggest 4 BNP Paribas 2 909.95 5.1 4 Deutsche Bank 1 632.95 7.9
consumer retail finance group, sold the 5 BAML 2 536.76 3.0 5 BAML 2 536.76 6.7
country’s first master-trust securitisation 6 Goldman Sachs 1 504.24 2.8 6 Goldman Sachs 1 504.24 6.3
with a A$1bn credit card ABS, Credit Card 7 Natixis 1 460.05 2.6 7 Natixis 1 460.05 5.7
Loan Note Trust Series 2017-1. It returned in 8 Morgan Stanley 1 458.54 2.6 8 Morgan Stanley 1 458.54 5.7
August for a A$500m issue through Credit 9 Daiwa Securities 1 245.16 1.4 Total 17 8,043.26
Card Loan Note Trust Series 2017-2. Total 35 17,750.44 Excludes global and domestic.
Including Euro, foreign, global, US domestics.
VOLKSWAGEN HIRES FOR NEW DRIVER Source: Thomson Reuters SDC code: B12 Source: Thomson Reuters SDC code: J11
VOLKSWAGEN FINANCIAL SERVICES has hired ANZ The three senior tranches have AAA approval from the bourse to sell accounts
and Bank of America Merrill Lynch to arrange ratings from China Chengxin. payable-backed securities of up to Rmb10bn.
an update for ABS debt investors ahead of a The underlying assets are 1,818
potential offering under the Driver Australia mortgages with a total balance of DIDI CHUXING PLANS ABS
ABS programme. Rmb2.23bn on commercial and residential
Volkswagen Financial Services raised properties in five cities. Ride-hailing service DIDI CHUXING TECHNOLOGY,
A$466m from the Driver Australia Four The Shenzhen-listed company intends to China’s rival to Uber Technologies, plans to
Trust Auto ABS in May 2017. use the proceeds to repay bank loans and to issue Rmb10bn (US$1.58bn) of asset-backed
replenish capital. securities on the Shanghai Stock Exchange.
COGARD GOES BIG ON ABS China Citic Bank is lead underwriter on the The originator of the notes will be Didi
offering with China Merchants Bank as joint unit Dirun (Tianjin) Technology, according
COUNTRY GARDEN HOLDINGS has received lead underwriter. to a preliminary filling to the SSE.
clearance from the Shenzhen Stock The securities will be against leasing
Exchange for an asset-backed securities ABS OKAY FOR ANT FINANCIAL contracts of rental car companies, which are
programme of up to Rmb40bn (US$6.3bn). Didi’s business partners.
The securities will be backed against Alibaba-backed ANT FINANCIAL has received Citic Securities is sole lead on Didi’s
accounts receivable, according to a clearance from the Shanghai Stock proposed offering.
preliminary filing to the SZSE. Exchange for an asset-backed securities The plan is subject to approval from the
Founder Securities is sole lead. programme of up to Rmb2bn (US$316m). SSE.
The originator of the securities is In December, Didi said it had raised
SUNSHINE CITY PRINTS ABS Shangrong (Shanghai) Commercial US$4bn to support an overseas expansion.
Factoring, a subsidiary of Ant Financial,
Chinese property developer SUNSHINE CITY according to a SSE press release. BYD WORKS ON ABS ISSUE
GROUP has raised Rmb1.49bn (US$235m) The securities are backed against accounts
from a public offering of securities, backed receivable of selected merchants, including China’s BYD plans to raise up to Rmb10bn
against mortgage receivables in the the Tmall brand store, on Alibaba’s (US$1.57bn) from the sale of asset-backed
interbank bond market. e-commerce platforms. The accounts securities in the Shenzhen Stock Exchange.
The trade was split into four. A Rmb272m receivable have been sold to Shangrong The electric vehicle and battery maker’s
senior Class A tranche, expected to mature (Shanghai) Commercial Factoring. securities will be backed against government-
on March 21 2019, priced at par to yield Tebon Securities is sole lead on the offering. granted subsidies for new energy vehicles
6.60%, a Rmb400m senior Class A2 piece, SSE said the structure offered an efficient (NEVs), according to a filing to the SZSE.
expected to mature on March 21 2020, and convenient funding channel for merchants The ABS tenor is for up to three years, the
priced at 7.20%, while a Rmb680m senior and suppliers on Alibaba’s platforms. filing states. The proceeds are meant to
Class A3 portion, expected to mature on The exchange has been encouraging the replenish capital and repay debt.
March 21 2021, priced at par to yield 7.50%. development of “supply chain finance The plan has received clearance from the
The originator retained a Rmb140m securitisation”. Earlier this month, Chinese company’s board and is now subject to
unrated subordinated tranche. smartphone maker Xiaomi obtained approval from shareholders.
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GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 23/3/2018
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)
SSAR
US DOLLARS
Mar 19 2018 Rentenbank US$100m incr Aug 18 2020 1.625 97.849 - 2.557
(US$2.2bn)
Mar 20 2018 KBN US$1.25bn Apr 17 2020 2.5 99.756 MS-1 / T+29.9 2.623
Mar 20 2018 NRW.BANK US$250m incr Mar 5 2021 3mL+6 100.053 3mL+4 -
(US$1.1bn)
Mar 21 2018 NIB US$500m Apr 28 2020 2.5 99.796 MS-6 / T+25.3 2.602
Mar 22 2018 CPPIB US$500m Dec 27 2019 3mL+1 100 3mL+1 -
EUROS
Mar 20 2018 CEDB (Social bond) €500m Mar 27 2025 0.375 99.149 MS-21 / B+27.2 0.499
Mar 20 2018 EIB €350m incr Mar 14 2031 1 99.77 MS-23 / B+28.9 -
(€3.05bn)
STERLING
Mar 23 2018 KfW £200m incr Mar 15 2022 0.875 98.416 G+29 1.285
(£1.25bn)
NON CORE
Mar 19 2018 Rentenbank A$125m incr Apr 12 2028 3.25 100.533 ASW+42 / 3.188
(A$750m) ACGB+49
Mar 20 2018 EIB Ps500m incr Jan 23 2023 5.5 91.798 MBONO+5 7.446
(Ps2.05bn)
Mar 20 2018 NWB A$100m incr Jul 17 2028 3.45 101.324 ASW+54 / 2.297
(A$465m) ACGB+61
Mar 20 2018 IADB A$200m incr Feb 22 2028 3.1 99.575 ASW+41 / 3.15
(A$540m) ACGB+47.75
Mar 20 2018 EIB TL250m Mar 27 2021 12.5 98.218 TGB-28.5 13.339
Mar 20 2018 Toronto, City C$300m incr Jun 7 2027 2.4 95.566 GOC+76 2.955
(C$700m)
Mar 22 2018 ADB A$100m incr Aug 8 2028 3.3 101.359 ASW+41 / 3.145
(A$700m) ACGB+47.25
Mar 22 2018 NTT A$55m incr Apr 21 2033 3.75 101.236 ACGB+75 3.643
(A$205m)
Mar 22 2018 SEK A$50m Sep 29 2028 3.25 99.603 ASW+54 / 3.295
ACGB+62.25
Mar 22 2018 KfW SKr250m Mar 29 2028 1.33 100 - 1.33
Mar 23 2018 KBN A$100m Jul 24 2028 3.4 100.26 ASW+52 / 3.255
(A$505m) ACGB+60.5
Mar 23 2018 NWB A$100m incr Jul 17 2028 3.45 101.639 ASW+53 / 3.261
(A$565m) ACGB+62
CORPORATES
US DOLLARS
Mar 19 2018 Connecticut Light & Power US$500m Apr 1 2048 4 99.76 T+93 4.014
Mar 19 2018 Unilever Capital US$400m Mar 22 2021 2.75 99.49 T+48 2.929
Mar 20 2018 Anheuser-Busch InBev US$1.5bn Jan 12 2024 3.5 99.51 T+90 3.596
Mar 20 2018 Anheuser-Busch InBev US$500m Jan 12 2024 3mL+74 100 3mL+74 3mL+74

BONDS SUMMARY DETAILS
Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution
- - - Aaa/AAA BMO -
MS flat area(I), 2.5 >US$1.69bn, >45 acs Aaa/AAA BMO/Citi/TD Eur 49%, Amers 34%, Asia 10%, MEA
MS flat area(G) 7%. CB/OI 73%, AM 14%, Banks 12%,
Ins/PF 1%.
3mL+6 area(I), - >US$425m Aa1/AA-/AAA/ JPM/RBC/TD -
3mL+6 area(G) Dagong AA+
MS-6 area 0 US$430m Aaa/AAA BAML/RBC/TD -
- - - Aaa/AAA/AAA Citi/RBC -
MS-20 area 0 >€700m Aa1/AA+/AA+ CA-CIB/DZ/GS/Rabo Benelux 33.5%, Asia 16.1%, Ger/Aus
12.1%, Nordics 10.9%, UK/Ire 10.2%, It/
Sp/Por 9.1%, Fr 8.1%. FM 37.7%, Bks/PB
28.6%, CB/OI 20.1%, Ins/PF 13.6%.
- - - Aaa/AAA/AAA BAML/CMZ/DB/ING/JPM/LBBW -
G+29 area - >£190m Aaa/AAA/Scope NatWest/RBC/TD -

AAA
- - - Aaa/AAA JPM -
- - - Aaa/AAA RBC -
- - - Aaa/AAA HSBC -
- - - Aaa/AAA/AAA TD -
- - - Aaa/AAA/AAA JPM -
- - - Aa1/AA/AA CIBC -
- - - Aaa/AAA Nomura -
ACGB+75 - - -/Aa2 UBS -
- - - Aa1/AA+ RBC/TD -
- - - Aaa/AAA/Scope Nomura -
AAA
T+110 area, 5 US$1.1bn A2/AA-/A+ BAML/Barc/Miz/MUFG -

T+95 (+/-2)
T+65 area, 2 US$600m A1/A+ Citi/DB/HSBC/MS -
T+50 (+/-2)
T+75 area, 4 US$800m A1/A+ Citi/DB/HSBC/MS -
T+65 (+/-2)
T+85 area, 3.5 US$600m A1/A+ Citi/DB/HSBC/MS -
T+77 (+/-2)
T+95 area, 4 US$1.3bn A1/A+ Citi/DB/HSBC/MS -
T+85 (+/-2)
T+110/115, 4 US$6.2bn A3/A- BAML/Barc/DB/JPM/Miz -
T+95 (+/-5)
3mL equiv, FRN US$2.5bn A3/A- BAML/Barc/DB/JPM/Miz -
3mL equiv

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 23/3/2018 (CONTINUED)
Mar 20 2018 Anheuser-Busch InBev US$2.5bn Apr 13 2028 4 99.22 T+120 4.096
Mar 20 2018 Anheuser-Busch InBev US$1.5bn Apr 15 2038 4.375 98.56 T+135 4.485
Mar 20 2018 Entergy Louisiana US$750m Mar 15 2033 4 99.84 T+112.5 4.014
Mar 20 2018 Metlife US$500m PERPNC10 5.875 100 5.88 5.875
Mar 20 2018 Ohio Power US$400m Apr 1 2048 4.15 99.27 T+107 4.193
Mar 20 2018 Virginia Electric & Power US$700m Apr 1 2028 3.8 99.77 T+95 3.828
Mar 22 2018 Assurant US$300m Mar 26 2021 3mL+125 100 3mL+125 3mL+125
Mar 22 2018 Assurant US$300m Sep 27 2023 4.2 99.77 T+162.5 4.248
Mar 22 2018 Assurant US$300m Mar 27 2028 4.9 99.62 T+212.5 4.949
Mar 22 2018 Assurant US$400m Mar 27 2048 7 100 - 7
Mar 22 2018 Brown-Forman US$300m Apr 15 2025 3.5 99.55 T+80 3.572
Mar 22 2018 Brown-Forman US$300m Apr 15 2038 4 98.86 T+100 4.084
Mar 22 2018 Mississippi Power US$300m Mar 27 2020 3mL+65 99.72 3mL+65 3.984
Mar 22 2018 Mississippi Power US$300m Mar 30 2028 3.95 99.72 T+115 3.984
EUROS
Mar 19 2018 Deutsche Boerse €600m Mar 26 2028 1.125 99.036 MS+20 / B+63.9 1.228
Mar 19 2018 Danone (social bond) €300m Mar 26 2025 1 99.805 MS+32 / B+79.5 1.029
Mar 19 2018 GM FInancial €600m Mar 26 2022 3mE+55 100 3mE+55 -

Mar 19 2018 GM FInancial €500m Mar 26 2025 1.694 100 MS+100 / B+147.7 1.694
Mar 19 2018 IMCD €300m Mar 26 2025 2.5 99.481 MS+187.5 / 2.582
B+234.9
Mar 19 2018 Iberdrola €700m Perpetual (Mar 2024) 2.625 100 MS+206.1 / 2.625
B+254.4
Mar 20 2018 DNA Oyj €250m Mar 27 2025 1.375 99.663 MS+72 / B+119.8 1.426
Mar 21 2018 Grenke €200m Apr 5 2023 1 99.927 MS+58 1.015
SWISS FRANCS
Mar 21 2018 Georg Fischer SFr200m Apr 20 2028 1.05 100.331 MS+55 / Eidg+95 1.015
NON CORE
Mar 20 2018 Investore Property NZ$100m Apr 18 2024 4.4 100 MS+150 4.4
Mar 20 2018 NAV Canada C$275m Mar 30 2048 3.293 100 GOC+97 3.293
Mar 20 2018 Fastighets AB Förvaltaren SKr200m Mar 28 2023 1.01 100 - 1.01
Mar 21 2018 Volvofinansbank SKr400m Apr 11 2028 (Apr 2023) 3mSt+145 100 3mSt+145 -
Mar 22 2018 Pembina Pipeline C$400m Mar 27 2028 4.02 99.992 OTC+180 -
Corporation
Mar 22 2018 Pembina Pipeline C$300m Mar 26 2048 4.75 99.936 GOC+243 -
Corporation
Mar 23 2018 Victoria Power A$225m Mar 29 2028 4 99.511 ASW+133 4.06
Mar 23 2018 VW Credit Canada C$500m Mar 30 2020 3mCDOR+50 100 3mCDOR+50 -
Mar 23 2018 VW Credit Canada C$500m Mar 29 2021 2.9 99.897 OTC+95 2.936
Mar 23 2018 VW Credit Canada C$500m Mar 29 2023 3.25 99.881 OTC+120 3.276


T+125 (+/-5)
T+140 (+/-5)
T+165 area, 5 US$9.4bn A3/A- BAML/Barc/DB/JPM/Miz -
T+155 (+/-5)
T+185 area, 4 US$4.6bn A3/A- BAML/Barc/DB/JPM/Miz -
T+170 (+/-5)
T+130 area, 6.5 US$2.6bn A2/A JPM/Miz/MS/Scotia/WFS -
T+115 (+/-2.5)
5.875% area, N/A US$900m Baa2/BBB/BBB BAML/Citi/JPM/WFS -
5.875% (the #)
T+115 area, 4 US$725m A2/A- MS/RBC/Scotia -
T+105/110
T+100/105, 13 US$1.1bn A2/BBB+/A- BNP/CS/USB -
T+95/100
- N/A US$600m Baa3/BBB JPM/MS/WFS(a)/USB(p) -
- N/A US$600m Ba1/BB+ JPM/MS/WFS(a)/USB(p) -
T+95/100, 6 US$1bn A1/A-/A BAML/Barc/Citi/USB -
T+85 (+/-5)
T+110/115, 11 US$900m A1/A-/A BAML/Barc/Citi/USB -
T+105 (+/-5)
3mL+90/95, FRN US$1.3bn Ba1/A-/BBB+ BAML/Barc/JPM/Miz -
3mL+75 (+/-5)
T+145 area, 7 US$800m Ba1/A-/BBB+ BAML/Barc/JPM/Miz -
T+125 (+/-5)
MS+25/30, 8 >€750m -/AA CMZ/DB/HSBC(a) DZ/Lloyds/Uni (p) Ger/Aus 52%, Fr 22%, Switz 8%, UK/
MS+20 area Ire 8%, Benelux 6%, Asia 2%, Other 2%.
FM 46%, OI/Agcy 28%, Ins/PF 19%, Bks/
PB/WM 6%, Other 1%.
MS+45 area, 12 >€650m Baa1/BBB+ CA-CIB/Natx Fr 41%, Asia 25%, Ger/Aus/Switz 13%,
MS+35 (+/-3) S.Eur 7%, UK 5%, Nordics 4%, Benelux
3%, Other 2%. AM 50%, Bks/PB 25%, OI
13%, Ins/PF 12%.
3mE+60/65 7 >€1.7bn combined Baa3/BBB/BBB Barc/BNPP/IMI/JPM/NatWest/Uni -
MS+100 area 22 >€1.7bn combined Baa3/BBB/BBB Barc/BNPP/IMI/JPM/NatWest/Uni -
MS+200 area, 22 >€470m - DB/HSBC/ING Ger/Aus 31%, Benelux 28%, Fr 18%,
MS+187.5/200 S.Eur 12%, UK/Ire 8%, Other 3%. FM
75%, Ins 23%, Bks 2%.
2.625%/2.75%, - ~€1.1bn Baa3/BBB-/BBB- BAML/IMI/BNPP/Caixa/Citi/DB/GS/ -
2.625% Lloyds/Miz
MS+85 area, - >€460m -/BBB Nordea/OP -
MS+75 (+/-3)
MS+70 area, - >€350m -/BBB+ BLB/DB/DZ/HSBC -
MS+60 (+/-2)
MS+55/60, 7 SFr200m, 84 acs ZKB BBB+ / UBS CMZ/UBS/ZKB Switz 98%, Other 2%. AM 44.5 %, PB
MS+55 area BBB / Fedafin 26.5 %, Ins 16 %, PF 8 %, Tsy 5 %.
BBB+ / CS BBB+ /
Vontobel BBB+
MS+150/170 - - - WBC/ANZ//Deutsche Craigs/Forsyth -

Barr
GOC+98 (+/-1) - - Aa2/AA-/-/AAL RBC/TD -
- - - -/AA- HCM -
- - - Baa3 Swed -
OTC+185 (+/-5) - - -/-BBB/-/BBB BMO/CIBC -
GOC+245 (+/-5) - - -/-BBB/-/BBB BMO/CIBC -
ASW+135 area - - -/A- ANZ/CBA/Miz

3mCDOR+50 area - - A3/BBB+ RBC/Scotia/TD -
OTC+95 area - - A3/BBB+ RBC/Scotia/TD -
OTC+120 area - - A3/BBB+ RBC/Scotia/TD -

FINANCIALS
US DOLLARS
Mar 19 2018 American International US$750m Apr 1 2028 4.2 99.63 T+140 4.246
Group
Mar 19 2018 American International US$1bn Apr 1 2048 4.75 99.41 T+170 4.787
Group
Mar 19 2018 American International US$750m Apr 1 2048 (Apr 2028) 5.75 100 5.75% 5.75
Group
Mar 19 2018 HSBC Holdings US$2.25bn Perpetual (Mar 2023) 6.25 100 0.06 6.25
Mar 19 2018 HSBC Holdings US$1.75bn Perpetual (Mar 2028) 6.5 100 0.07 6.5
Mar 19 2018 Macquarie Group US$700m Mar 27 2024 4.15 100 T+150 4.15
Mar 19 2018 Macquarie Group US$550m Mar 27 2024 3mL+135 100 3mL+135 3mL+135
Mar 19 2018 Macquarie Group US$500m Mar 27 2029 4.654 100 T+180 4.654
Mar 20 2018 Metlife US$500m Perpetual (Mar 2028) 5.875 100 5.88 5.875
Mar 22 2018 Prudential Financial US$600m Mar 27 2028 3.878 100 T+105 3.878
Mar 22 2018 Prudential Financial US$400m Mar 27 2048 4.418 100 T+135 4.418
EUROS
Mar 20 2018 Santander UK Group €750m Mar 27 2024 ( Mar 2023) 3mE+85 100 3mE+85 -
Holdings
Mar 21 2018 Axa (T2) €2bn May 2049 (May 2029) 3.25 99.207 MS+220 / B+274.2 3.337
Mar 22 2018 AIB holdco €500m Mar 29 2023 1.5 99.823 MS+115 / B+167.3 1.537
Mar 22 2018 Fairfax €600m Mar 29 2028 2.75 98.791 MS+190 / B+236.5 2.891
STERLING
Mar 21 2018 Westpac £200m Apr 3 2020 3mL+25 100 3mL+25 -
SWISS FRANCS
Mar 21 2018 Basler Kantonalbank SFr150m Apr 11 2022 0 100.862 MS-5 / Eidg+38 -0.215
Mar 21 2018 Basler Kantonalbank SFr150m Apr 11 2024 0.125 100.314 MS-2 / Eidg+40 0.072
Mar 21 2018 Santander (SNP) SFr60m incr Jul 20 2027 1.125 101.066 MS+60 / 1.004
(SFr190m) Eidg+96.9
Mar 22 2018 Kiwibank SFr150m Oct 18 2023 0.3 100 MS+23 / Eidg+69 0.25
NON CORE
Mar 19 2018 NBC C$500m incr Jun 30 2022 1.957 97.087 GOC+74 2.682
(C$1.25bn)
Mar 20 2018 Heritage Bank A$200m Mar 29 2021 3mBBSW+123 100 3mBBSW+123 -
Mar 22 2018 Insurance Australia T2 A$350m Jun 15 2044 3mBBSW+210 100 3mBBSW+210 -
Mar 22 2018 Swedbank (Green) SKr500m Mar 29 2023 3mSt+100 102.683 3mSt+47 -
Mar 22 2018 Swedbank (Green) SKr1.5bn Mar 29 2023 1 99.927 MS+47 1.015
Mar 22 2018 Manulife Bank C$200m Jan 27 2020 (Sep 2019) 3mCDOR+23 100 3mCDOR+23 -
Mar 22 2018 SBAB Bank SKr300m incr Mar 29 2021 3mSt+75 - - -
(SKr1.5bn)
Mar 22 2018 BMO C$650m Mar 30 2020 3mCDOR+17 100 3mCDOR+17 -
Mar 23 2018 Svea Ekonomi SKr300m Perpetual (2023) 3mSt+550 100 3mSt+550 -
Mar 23 2018 SBAB Bank SKr500m Jul 5 2021 0.453 - - -

T+155 area, 3 US$2.2bn Baa1/BBB+/BBB+ BAML/CS/MS/RBC/WFS/USB -

T+140 (the #)
T+185 area, 7 US$2.4bn Baa1/BBB+/BBB+ BAML/CS/MS/RBC/WFS/USB -
T+170 (the #)
5.875% area, N/A US$1.75bn Baa2/BBB-/BBB- BAML/USB/CS/MS/RBC/WFS -
5.75% (the #)
6.375% area, N/A US$12.5bn combined Baa3/BBB HSBC -
6.25% (the #)
6.625% area, N/A US$12.5bn combined Baa3/BBB HSBC -
6.50% (the #)
T+155 area, 8 US$1bn A3/BBB/A- BAML/Citi/HSBC/JPM/MQB/WFS -
T+150 (+/-5)
3mL equiv, FRN US$800m A3/BBB/A- BAML/Citi/HSBC/JPM/MQB/WFS -
3mL+135 (+/-5)
T+180 area, 15 US$700m A3/BBB/A- BAML/Citi/HSBC/JPM/MQB/WFS -
T+180 (the #)
5.875% area, N/A US$900m Baa2/BBB/BBB BAML/Citi/JPM/WFS -
5.875% (the #)
T+120 area, 9 US$1.6bn Baa1/A BNP/DB/HSBC/JPM/WFS -
T+110 (+/-5)
T+150 area, 12 US$1.1bn Baa1/A BNP/DB/HSBC/JPM/WFS -
T+140 (+/-5)
3mE+90 area 25 >€900m, 127 acs Baa1/BBB/A DB/Santan/SG UK/Ire 38%, Iberia 15%, Ger/Aus 11%,
Switz 9%, It 9%, Fr 4%, Nordics 3%,
Other 11%. AM 62%, Bks/PB 26%, Ins/
PF 6%, Other 6%.
MS+230 area - >€4.1bn A3/BBB+/BBB (a) BNPP/JPM/DB/HSBC/SG, (p) -
Barc/CA-CIB/Citi/ING/Natx/Uni
MS+130/135, 15 >€2.25bn, c.200 acs Ba2/BB+/BBB- BNPP/GS/JPM/MS/UBS UK/Ire 43%, Nordics 13%, Ger/Aus 12%,
MS+120 area S.Eur 11%, Fr 9%, Benelux 5%, Switz 5%,
Other 2%. FM 79%, OI 9%, Bks/PB 6%,
Ins/PF 6%.
MS+200 area, - >€1bn Baa3/BBB-/BBBH BAML/Barc/BNPP/DB/RBC -
MS+190/195
- - - Aa3/AA- Nomura -
MS-5 area - - -/AA KBBS -

MS-2 area - - -/AA KBBS -
- - - Baa2/BBB+/A- CS -
MS+22/25 0 (vs comps) >SFr150m, 32 acs A1/A/AA- UBS Switz 100%. AM 51%, PB 17.5%, Tsy
14.2%, Ins 11.3%, PF 6%.
GOC+75 (+/-1) - - A1/A/-/AAL NBF -
3mBBSW+125 area - - Baa1/BBB+ ANZ/NAB -

3mBBSW+215 area - - -/BBB JPM/WBC -
- - - Aa3/AA-/AA- Swed -
- - - Aa3/AA-/AA- Swed -
3mCDOR+23 - - -/A+/-/AH RBC -
- - - A2/A Danske -
3mCDOR+17 - - A1/A+/-/AA BMO -

3mSt+550/600, - >SKr300m - DNB -
3mSt+550/575,
3mSt+565/575
- - - A1/A Danske -

COVERED BONDS
EUROS
Mar 20 2018 Aareal Bank €500m Jul 30 2024 0.375 99.315 MS-14 / B+35.4 0.485
Mar 20 2018 Lansforsakringar Hypotek €500m Mar 27 2025 0.625 99.483 MS-1 / B+47.1 0.701
Mar 21 2018 BNS €1.25bn Sep 28 2022 0.25 99.679 MS-2 / B+48.4 0.322
STERLING
Mar 20 2018 Lloyds £1bn Mar 27 2023 3mL+25 100 3mL+25 -
SWISS FRANCS
Mar 20 2018 Valiant Bank SFr500m Apr 23 2024 0.125 100.494 MS-5 / Eidg+40 0.043
NON CORE
Mar 21 2018 Swedbank Hypotek SKr200m Mar 28 2030 1.795 - - -
HIGH YIELD
US DOLLARS
Mar 16 2018 Titan Acquisition Limited US$650m Apr 15 2026 (Apr 2021) 7.75 100 T+492 7.75
(Husky Injection Molding
Systems)
Mar 16 2018 Parkland Fuel Corp US$500m Apr 1 2026 (Apr 2021) 6 100 T+317 6
Mar 16 2018 Iridium Communications US$360m Apr 15 2023 (Apr 2020) 10.25 100 T+760 10.25
Mar 16 2018 Prestige Brands US$250m Mar 1 2024 (Mar 2020) 6.375 101 T+345 6.171
Mar 22 2018 Cequel Communications US$1.05bn Apr 01 2028 (Apr 2023) 7.5 100 T+468 7.5
Holdings
Mar 23 2018 REC Silicon US$110m Apr 13 2023 (Apr 2021) 11.5 100 - 11.5
Mar 23 2018 KCA Deutag US$375m Apr 1 2023 (Apr 2020) 9.625 100 T+700 9.625
EUROS
Mar 19 2018 SRV €75m Mar 27 2022 4.875 100 - 4.875
Mar 22 2018 LKQ European Holdings €750m Apr 1 2026 (Apr 2021) 3.625 100 B+334.1 3.625
Mar 22 2018 LKQ European Holdings €250m Apr 1 2028 (Apr 2023) 4.125 100 B+360.3 4.125
Mar 22 2018 Teamsystem €550m Apr 15 2023 (Apr 2019) E+400 100 E+400 -
Mar 22 2018 Teamsystem €200m Apr 15 2027 (Apr 2019) E+400 100 E+400 -
Mar 23 2018 Corestate €300m Apr 15 2023 3.75 100 B+282 3.75
STERLING
Mar 21 2018 Virgin Media RFNs £300m 5NC1.5 5.75 100 G+447 5.741
NON CORE
Mar 19 2018 Pandion Energy NKr400m Apr 4 2023 (Oct 2021) 3mN+725 100 3mN+725 -
Mar 19 2018 Kungsleden (Green) SKr750m Mar 21 2022 2.375 99.989 MS+205 -
Mar 19 2018 Kungsleden (Green) SKr1.25bn Mar 21 2022 3mSt+205 100 3mSt+205 -
Mar 20 2018 Samhallsbyggnadsbolaget SKr300m incr Perpetual (Mar 2023) 3mSt+700 106.1 3mSt+600 area -
i Norden (SKr1bn)
Mar 20 2018 Kungsleden (Green) SKr750m incr Mar 21 2022 2.375 100.158 - -
(SKr1.25bn)

MS-14 area 2 >€500m, 27 acs Aaa/-/AAA BLB/BNPP/CMZ/Deka/Uni Ger/Aus 92%, Nordics 6%, UK/Ire 2%.
CB/OI 46%, Bks 39%, FM/AM 11%, Ins/
PF 4%.
MS flat area, 5 >€650m, 40 acs Aaa/AAA Danske/DB/NordLB/SG/UBS Ger/Aus 67%, Nordics 17%, UK 5%, Asia
MS-1 (+/-1) 4%, Benelux 3%, Fr 3%, Other 1%. Bks
39%, AM 33%, CB/SSA 25%, Ins 3%.
MS flat area 5 €1.6bn, >70 acs Aaa/-/AAA/AAA BNPP/DB/HSBC/LBBW/Scotia Ger/Aus 57%, Benelux 9%, Nordics 9%,
Fr 7%, Switz 5%, Asia 5%, CEEMA 4%,
UK/Ire 2%, Iberia/It 1%. Bks 43%, FM
25%, CB/OI 20%, Ins/PF 12%.
3mL+27 area 2.5 £900m Aaa/-/AAA HSBC/Lloyds/RBC/TD UK/Ire 79%, Eur/Other 21%. Bks/PB
74%, FM 19%, CB/OI 6%, Other 1%.
MS-3/-5 0 >SFr500m, >20 acs Aaa BNPP/ZKB Switz 100%. Bks/PB 52.5%, Ins/PF
37.5%, AM 11%.
- - - Aaa/AAA Danske -
7.5%/7.75% - - Caa2/CCC+ BAML/DB/GS/Barc/BMO -
High 5% area, - - B1/BB- BAML/RBC/JPM/WFS -

6%
10.25%/10.5% - - Caa1/CCC DB/SG/Santan -
100.50-101.00 - - Caa1/B- MS/Barc/Citi/DB/RBC -
7.25%/7.5% - - Caa1/B GS/Barc/BNPP/CS/JPM/MS/RBC/ -
TD
10% area, - - - Arctic/DNB -
11.5%
9.75% area, - - B3/B- Citi/HSBC/1ADB/GS/JPM -
9.625%
- - - - OP/Swed -
3.5% area, - - - GCs HSBC/BAML, Bks BBVA/CS/ -
3.5%/3.75%, MUFG/WFS
3.625%
4% area, - - - GCs HSBC/BAML, Bks BBVA/CS/ -
4%/4.25%, MUFG/WFS
4.125%
E+400/425 - - B3/-/B+ GS/Uni (p), JBs UBS/HSBC/JPM/ -
Medio/MS
- - - B3/-/B+ GS/Uni (p), JBs UBS/HSBC/JPM/ -
Medio/MS
3.75% (the #) - - - CS/MS -
5.5%/5.75% - - B1/B/B+ BNPP/CS/ING(phys), IMI/DNB JBs -
3mN+700/800, - >NKr400m - DNB/Pareto -

3mN+725/775,
3mN+725/750
- - - Ba1 SEB/Swed -
- - - Ba1 SEB/Swed -
3mSt+600 area - >SKr300m - DNB/Nordea -
- - - Ba1 SEB -

THE FIRST STEP IN CLO ANALYSIS:
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EMERGING MARKETS
China 56 India 58 South Korea 59 Thailand 61 Romania 61 Ukraine 62 Bahrain 62 UAE 63
Argentina 63 Brazil 63 Colombia 63 Guatemala 63 Mexico 64
n FRONT STORY UKRAINE
Metinvest takes aim at debt pile

Metals company hoping to put past behind it with new deal and tender
Ukraine metals and mining group METINVEST paper among investors who already have separatist eastern regions were seized by
is seeking to refinance a significant chunk positions in the credit.” pro-Russian rebels. Metinvest said
of a US$2.3bn debt pile that emerged A banker away from the trade said that a Yenakiieve Iron and Steel Works was among
following a restructuring last year. successful deal for fellow Ukrainian the seized assets.
The company is eyeing a bond issue as well corporate MHP last week would give The completion of the refinancing is
as a new loan to refinance the restructured confidence to those leading the trade, but subject to consent from the different debt
debt. That debt comprises a pre-export that Metinvest would have to pick its holders, including 75% of noteholders.
financing of around US$1.1bn that matures window carefully in an unstable market. Following the transaction the notes and the
in June 2021 and US$1.2bn 9.373% senior “It’s a credit with a more uncertain PXF will rank pari passu.
secured notes due December 2021. demand dynamic than MHP, which is liked Metinvest is rated Caa1/B-/B. Fitch
As well as a new dual-tranche bond by everybody and the shareholding upgraded its outlook to positive from stable
transaction, the company is undertaking an structure is clean,” he said. on March 19, in anticipation of a successful
any-and-all buyback for the US$1.2bn notes “In Metinvest some don’t like the completion of the proposed deal, which
with investors that tender by the early shareholder, and some of the assets have would provide liquidity headroom and
deadline offered a price of 105.25. been affected by the events in eastern moderation of refinancing risks.
The 2021s were offered at 104.358 ahead Ukraine. It’s a more difficult story.” “If the refinancing is successful, an analogous
of the deal announcement, according to The company is part of the business offer may be forthcoming from DTEK, a similar
Tradeweb. empire of Ukraine’s richest man, Rinat Ukrainian issuer,” wrote Bulgakov.
“The company’s aim appears to be to fully Akhmetov. “Compared with Metinvest, however, we
replace the issue [which has] a high coupon, Metinvest has benefited from a rise in see DTEK’s chances at significantly
amortized redemption structure and rigid iron ore prices over the last six months and improving its debt structure using only
covenants with a standard “bullet” issue,” its 2017 financial results published on external market instruments as not
wrote Alexey Bulgakov, analyst at Sberbank. March 19 reported a 44% increase in revenue particularly high.”
“Because the Metinvest 2021s can be year-on-year to US$8.9bn. Deutsche Bank and ING are joint global
called at par at any time, a buyback offer at a The improved financial performance coordinators, and are joined as bookrunners
price above par is a friendly move that is came despite the loss of some production in by Natixis and UniCredit.
aimed at supporting interest in the new early 2017 after steel and coal assets in Robert Hogg, Sandrine Bradley
First Quantum bonds find floor In a note on Wednesday, analysts at

CreditSights recommended investors buy
the miner’s bonds on the recent lows on
Mining company hit by tax bill but analysts expect compromise expectation that the two parties will settle
for a fraction of the assessment.
Bonds of FIRST QUANTUM MINERALS rebounded on Those notes were both trading on “We believe that there is no apparent basis
Wednesday amid hopes that the company will Wednesday afternoon at 94.25 cents on the for this tax assessment and believe Zambia is
pay only a fraction of the US$8bn that Zambia’s dollar to yield 7.7% and 7.9% respectively, again trying to extract concessions from
tax agency says the Africa-focused miner owes. according to MarketAxess. That was off the (First Quantum),” the analysts said.
The bonds - five of which were the most day’s highs, but still 1.5 and 2.25 points In a note sent to clients after the call and
actively traded in the US high-yield market higher respectively on the day. seen by IFR, Jefferies’ fixed-income trading
on Wednesday morning - were as much as 3 First Quantum executives hosted a lengthy analysts Matt Vittorioso and Robert Vaughan
points higher on the day, according to conference call with analysts on Wednesday said investors had been underestimating
MarketAxess data. morning to answer questions about the risks for the company.
That followed a slump of more than 5 US$8bn assessment, which amounts to more “The market has always known that as
points for some of the notes on Tuesday after than 80% of the miner’s market things improve at (First Quantum), Zambia is
the company confirmed Zambia had slapped capitalisation. going to want more – we just decided not to
it with the massive bill, which relates to While executives said it will take four to price that in to the company’s recent new
unpaid import duties. six months to review relevant documents, issue or previous bond trading levels,” they
Among the biggest movers were First several analysts and investors took the view wrote.
Quantum’s 6.5% 2024s and 6.875% 2026, that the final tally will be much lower. Their equity colleagues at the investment
which the company issued only a month ago “The headline risk is way worse than the bank estimate First Quantum will derive
to finance the development of a mining actual payment, in my opinion,” one high- almost 80% of its pre-tax earnings this year
project in Panama and repay debt, raising a yield portfolio manager closely following the from its Zambian copper mines.
combined US$1.815bn. matter told IFR. Davide Scigliuzzo

The market for Dim Sum bonds has been took a hit from President Donald Trump’s
more stable than the one for dollar bonds in move to impose tariffs on Chinese imports.
ASIA-PACIFIC recent weeks. Also, as some Chinese fund The SEC-registered offering was split into
managers have favoured Dim Sum bonds of a US$1bn 3.875% 5.5-year tranche priced at
late, it was a natural choice for Beijing Treasuries plus 125bp, inside initial
CHINA Capital to include a renminbi tranche. guidance of plus 140bp, and a US$500m
“Dim Sum investors still have cash and 4.375% 10-year tranche at plus 160bp, inside
BEIJING CAPITAL DRAWS pressure to buy, and they are looking for the initial plus 180bp area.
DIM SUM DEMAND yield,” said a bookrunner. Books reached a total of US$7.1bn, with
However, while that is providing support US$3.5bn going to the 5.5-year and the
BEIJING CAPITAL GROUP has priced a dual- for Dim Sum issues now, the pool of remainder to the 2028s.
currency US$600m-equivalent offering to offshore renminbi is not deep enough for all Fair value was based on the outstanding
take advantage of appetite for Green bonds, issuers to access it. 2.875% 2022s, which were spotted at a
as well as for offshore renminbi notes. “People in the Dim Sum market have G-spread of 101bp, and the 4.125% 2025s,
A US$500m three-year Green tranche was limited cash and, once they spend it, it’s estimated to be around G+137bp.
priced at Treasuries plus 187.5bp, versus harder for the next issuer,” said the Proceeds will be used to repay a US$1bn
initial guidance of 210bp area, while a bookrunner. “The later they come, the 3.25% bond issue due August 6, and also
Rmb630m (US$100m) two-year Green Dim higher the yield they pay.” meet general corporate needs.
Sum tranche was priced at 5.2%, down from Beijing Capital Polaris Investment is the The 5.5-year and 10-year notes widened by
the earlier 5.5% area. issuer of the bonds and Beijing Capital Group is 3bp and 2bp, respectively, as Asian equity
As the issuer was understood to be guarantor. The notes are expected to be rated markets digested the Wall Street sell-off,
targeting total proceeds of US$600m, it was Baa3/BBB–/BBB, in line with the guarantor. which was the biggest daily drop since
able to adjust the size of each tranche to Beijing Capital Group, a wholly owned February 8.
match demand and drive pricing tension. subsidiary of Beijing SASAC, focuses on water Despite difficult marketing conditions,
Orders at final guidance came to about and environmental protection, infrastructure, the offering was still said to have attracted
US$2.3bn for the dollar tranche and real estate and financial services. three-digit tickets as investors chased an
Rmb2.1bn for the Dim Sum piece, though This includes operating several Beijing issue with SEC-registered documentation
final book statistics had yet to be released. subway lines, as well as running sewage that earned the comfort of global investors.
The dollar portion was said to have attracted treatment plants and managing the water Its rarity also drove appetite for the issue,
some dedicated green investors in Europe. supply – the kinds of services crucial to the said a banker on the trade.
The dollar tranche was priced at the same smooth running of the city. These factors US-listed Baidu’s new notes have expected
spread as the US$500m three-year issue in raise chances of the group receiving ratings of A3/A (Moody’s/Fitch), in line with
January from Central Plaza Development, government support in difficult times. the issuer (see Top News for more).
which had a keepwell deed from Beijing HSBC and China Citic Bank International were The joint bookrunners were Bank of America
Capital Group with one of its subsidiaries as joint global coordinators, as well as joint Merrill Lynch, Goldman Sachs and JP Morgan.
a guarantor. bookrunners with ICBC International,
Those bonds were a direct pricing Agricultural Bank of China, Hong Kong branch, LENOVO FIVE-YEAR BOOKS US$1.1bn
reference, although notes with keepwell Bank of China, CCB International, Bank of
arrangements typically pay a higher yield Communications, Standard Chartered, ANZ, LENOVO GROUP priced US$750m of five-year US
than those with direct guarantees, and were Commonwealth Bank of Australia and Natixis. dollar senior unsecured bonds after pulling
seen at a G-spread of 174bp during in final orders of US$1.1bn from 56
bookbuilding, pointing to a double-digit BAIDU PAYS FOR DUAL-TRANCHER accounts.
new-issue concession. The Chinese computer maker priced the
Beijing Capital Group’s dollar tranche was Chinese internet search provider BAIDU 4.750% five-year Reg S unrated notes at
bid at Treasuries plus 188bp on Tuesday, managed to price a US$1.5bn dual-tranche 99.921 to yield 4.768%, or Treasuries plus
according to Tradeweb. bond issue on Thursday even as equity markets 215bp, inside the initial guidance of 230bp
area.
ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS Asia took 96% of the notes, while Europe
BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE and US offshore got the rest. In terms of
Asia-Pacific Managing No of Total Share investor types, 75% were asset managers,
Managing No of Total Share bank or group issues US$(m) (%) fund managers and public, 23% were banks,
bank or group issues US$(m) (%) 1 Citigroup 77 19,087.31 10.9 and 2% were private banks.
1 HSBC 56 5,844.81 7.2 2 HSBC 81 12,267.67 7.0 Proceeds will be used to fund a tender
2 Standard Chartered 42 4,514.61 5.6 3 JP Morgan 41 11,493.98 6.6 offer, as well as to meet working capital and
3 Bank of China 41 4,481.32 5.5 4 Standard Chartered 64 10,374.37 5.9 general corporate needs (see Top News for
4 Citigroup 34 4,352.95 5.4 5 BNP Paribas 45 8,100.28 4.6 more).
5 BNP Paribas 28 3,274.23 4.0 6 BAML 37 7,614.14 4.4 BNP Paribas, Citigroup, DBS Bank, ANZ, Bank
6 Credit Suisse 21 2,977.07 3.7 7 Deutsche Bank 31 6,323.45 3.6 of China, Morgan Stanley, MUFG, Santander and
7 Citic 25 2,914.44 3.6 8 Credit Suisse 32 5,783.43 3.3 Societe Generale are joint global coordinators,
8 BAML 19 2,660.10 3.3 9 Barclays 25 4,879.70 2.8 joint lead managers and joint bookrunners
9 UBS 20 2,328.31 2.9 10 VTB Capital 12 4,836.10 2.8 on the new notes issue.
10 MUFG 16 2,320.38 2.9 Total 265 174,966.33 Credit Agricole, China Construction Bank (Asia),
Total 163 81,166.72 Excluding equity-related debt. Goldman Sachs, Maybank, Natixis and Westpac
Excluding equity-related debt. are joint lead managers and joint
Source: Thomson Reuters SDC code: L4 Source: Thomson Reuters SDC code: L1 bookrunners.

EMERGING MARKETS ASIA-PACIFIC
YANGO RAISES 1.5-YEAR FUNDS
Chinese property developer YANGO GROUP, Indian bank tucks into

Masala
rated B2/B/B, has sold US$200m of 1.5-year
US dollar senior unsecured bonds at par to
yield 9.5%.
The amount raised was short of its initial
target of up to US$250m and there was also n INDIA HDFC Bank finds strong offshore demand for longer duration
no tightening in the final price from initial
guidance of 9.5% area. HDFC BANK has become the first Indian bank “If we were to issue bonds in the domestic
Yango Justice International is the issuer to sell Masala bonds, paving the way for market, the levels would be similar to the rate
and Shenzhen-listed parent is guarantor. other lenders to tap the offshore rupee bond market. that we have been able to access through the
The Reg S notes are expected to score a B– India’s second-largest private-sector lender Masala route,” said Parthasarthy.
S&P rating. raised Rs23bn (US$353m) at a seven-year Although HDFC Bank has not issued any
Final orders were not disclosed, but maturity, the minimum tenor under rules seven-year senior bonds recently, the lender’s
statistics showed that all the bonds were allowing banks to sell offshore rupee bonds for rupee bonds maturing in March 2025 were
allocated to Asian investors. In terms of infrastructure and affordable housing. It was trading at 8.32%, according to Thomson
investor types, 63.1% were fund managers also the first Indian issuer to sell Masala bonds Reuters data.
and asset managers, 19.9% were private at that tenor.
banks and 17% were banks. The deal was priced at a yield of 8.1%, on par FPI SELLING
Proceeds will be used for debt with the bank’s onshore funding costs. While Masala bonds appeal to foreign
refinancing. “HDFC Bank’s Masala will set a precedent portfolio investors that do not have access
Haitong International was sole global for other lenders to raise senior offshore rupee to the onshore market, some investors that
coordinator, as well as joint bookrunner bonds in the future,” said Ajay Marwaha, already have access to India see little reason to
with CNCB HK Capital, China Citic Bank director of investments and investment participate.
International, Guotai Junan International, Huatai advisory at Sun Global Investments, who “Masala issuance is still coming at a
Financial Holdings (Hong Kong), Oceanwide expects the notes to trade actively in the slow pace and generally yields are not that
Securities and Orient Securities (Hong Kong). secondary market. different to onshore India,” said Manu George,
The latest issue was Yango Group’s second The deal demonstrated that there is a senior investment director for fixed income at
attempt to sell dollar bonds in less than large pool of liquidity offshore just as funds Schroder Investment Management.
three months. are becoming more scarce in the domestic In the past two months sentiment
In January, it pulled a US$250m three- market. towards local currency bonds has turned
year offering that had been marketed at “For us, it is always advantageous to have a sour. Foreign portfolio investors have sold a
initial price guidance of 8.875% area. larger set of investors, hence we went offshore,” net Rs91.1bn of rupee bonds since February,
said Ashish Parthasarthy, treasurer at HDFC according to data from National Securities
SHANDONG I&S PRINTS TWO-YEAR Bank. “The objective was to look at a different Depository Ltd as of March 23, as concerns
investor base through the Masala route.” over currency depreciation and rising fiscal
SHANDONG IRON & STEEL GROUP priced US$150m There is tepid demand for longer-maturity and trade deficits have forced them to reassess
of 6.90% two-year US dollar senior bonds in the domestic market at the moment, their exposure.
unsecured bonds at 99.816 to yield 7.00%, in as mutual funds are seeing slower flows into The rupee’s 2% fall against the US dollar this
line with initial guidance of 7% area. longer-duration funds due to the hawkish year highlights the currency’s vulnerability to
This was the Chinese state-owned interest rate outlook. the sell-off in the local equity market, according
steelmaker’s second dollar offering in four “The domestic market is quite dysfunctional to a DBS note on March 20. India needs capital
months after it sold US$200m of 3.5-year at the moment because it has a limited inflows to fund its current account deficit,
bonds at par to yield 6.50% in December. appetite for longer tenors,” said a debt capital which more than doubled year-on-year to 1.9%
Despite two issues, the company has not markets banker. of GDP between April and December, and its
used up its entire US$800m offshore debt- increasing financing requirements will keep
issuance quota from the National CREDIT VIEW the rupee vulnerable to rising US rates, DBS
Development and Reform Commission, Parthasarthy said the Baa2/BBB– (Moody’s/ analysts wrote.
according to a banker on the deal. The quota S&P) rating also helped drive demand, as few The banker expects these pressures
will expire at the end of this month. Masala issues have international ratings. to weigh on Masala bonds, too, warning
“The market has been very weak recently The trade drew orders of over Rs28bn from that investors should be prepared to lose
and an industrial name is not easy to sell,” more than 40 accounts. In terms of investor money if they have taken a short-term
the banker said. types, 82% were fund managers, 15% were trading view.
The issuer decided to issue two-year bonds banks and 3% were private banks. Barclays, HSBC, Standard Chartered and Sun
instead of three-year notes planned initially Some investors described the bonds as an Global were joint bookrunners for the Masala
as investors, especially Chinese asset- attractive carry product. deal.
management companies, wanted shorter “We are taking both a currency and credit HDFC Bank’s net profit rose 20% to
tenors to limit duration risk, he pointed out. view in HDFC Bank,” said Jenny Zeng, portfolio Rs46.43bn for the quarter to end-December
Wholly owned subsidiary Shandong Iron manager and head of credit research for Asia at from Rs38.65bn a year earlier. Gross bad loans
and Steel Xinheng International is the issuer AllianceBernstein. as a percentage of total assets were at 1.29% at
of the Reg S unrated bonds and the state- The cost for the issuer was the same the end of December, versus double digits for
owned parent company is the guarantor. as onshore rates after absorbing the 5% public-sector banks.
Proceeds will be used to repay debt at the withholding tax. Krishna Merchant
guarantor’s offshore subsidiaries.

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 23/3/2018
Mar 16 2018 Qinghai Provincial US$250m Mar 22 2021 (Mar 2020) 7.875 100 - 7.875
Investment Group
Mar 19 2018 Orient Securities (tap) US$250m Nov 30 2022 3.625 96.501 T+180 4.459
(US$750m)
Mar 19 2018 Beijing Capital (Green) US$500m Mar 26 2021 4.25 99.758 T+187.5 4.337
Mar 19 2018 Beijing Capital (Green) Rmb630m Mar 26 2020 5.2 100 - 5.2
Mar 19 2018 Shinhan Bank (Tier 2) US$400m Mar 26 2028 4.5 99.896 T+165 4.516
Mar 19 2018 Malayan Banking US$100m Mar 19 2023 3mL+70 100 3mL+70 -
Mar 20 2018 Ratchaburi Electricity US$300m Mar 27 2028 4.5 99.976 T+162.5 4.503
Mar 22 2018 Baidu US$1bn Sep 23 2023 3.875 99.902 T+125 3.895
Mar 22 2018 Baidu US$500m Mar 29 2028 4.375 99.432 T+160 4.446
Mar 22 2018 Lenovo Group US$750m Mar 29 2023 4.75 99.921 T+215 4.768
Mar 22 2018 Xuzhou ETDZ US$400m Mar 27 2021 6.75 99.334 - 7
Mar 22 2018 Tsinghua Tongfang US$300m Mar 29 2021 5.375 98.307 - 6
Mar 22 2018 Shandong Iron & Steel US$150m Mar 29 2020 6.9 99.816 - 7
Mar 22 2018 Land Transport Authority of S$300m incr Mar 19 2048 3.35 100 - 3.35
Singapore (S$1.2bn)
Mar 22 2018 MHP US$550m Apr 3 2026 6.95 100 T+418.5 6.95
Mar 22 2018 Globalworth US$600m Mar 29 2025 3 99.225 B+295.2 3.125
Mar 22 2018 ADCB US$750m Mar 29 2023 4 99.65 MS+130 4.078
Mar 22 2018 Sigma Alimentos US$500m Mar 27 2028 4.875 99.34 T+212.5 4.96
Zhongtai International, DBS Bank, CEB state-owned parent China Poly Group Corp Chartered as joint global coordinators, joint
International, Bank of China, Guotai Junan will provide. lead managers and joint bookrunners for a
International and Silk Road International were proposed offering of Dim Sum bonds.
joint global coordinators, joint bookrunners ENVISION EYES DOLLAR GREENS The Hong Kong-listed car rental company
and joint lead managers. plans to use proceeds from the offshore
ENVISION ENERGY INTERNATIONAL, rated BBB– renminbi Reg S issue for debt repayment
POLY LOOKS TO DOLLAR SENIOR (Fitch), has hired banks for a proposed and business development.
offering of US dollar senior Green bonds. The proposed bonds have an expected BB
Hong Kong-listed POLY PROPERTY GROUP has HSBC, Bank of America Merrill Lynch, CMB rating from S&P.
hired banks for a proposed offering of US International and China Citic Bank International
dollar senior unsecured bonds. are joint global coordinators, as well as joint
BOC International has been hired as left- bookrunners and joint lead managers with INDIA
lead global coordinator and DBS Bank as joint SPD Bank Singapore.
global coordinator. The two are also joint The China-headquartered wind-turbine RCOM BONDHOLDERS APPROVE
lead managers and joint bookrunners with maker and wind-farm specialist met ASSET SALES
Guotai Junan International, Haitong investors in Hong Kong, Singapore and
International, ICBC (Asia), UBS and Wing Lung London, starting March 20. RELIANCE COMMUNICATIONS said last week it had
Bank. Bank of East Asia is co-manager. The proposed Reg S bonds will be issued won approval for its planned asset sale to
The Chinese property developer has held through wholly owned subsidiary Envision Reliance Jio Infocomm from the required
meetings with investors in Hong Kong and Energy Overseas Capital, while Envision majority of holders of its US$300m 6.5%
Singapore, as well as conference calls with Energy International will be the guarantor. senior secured notes due 2020.
international fixed-income investors, The bonds have an expected BBB– rating It will, nevertheless, need to address legal
starting March 22. from Fitch. hurdles to complete the divestment.
The Reg S unrated notes will be issued Holders of 44% of the principal amount of the
through wholly owned BVI subsidiary Ease CAR INC LOOKS TO DIM SUM 2020 bonds were present, and 81% of votes cast
Trade Global with Poly Property Group as were in favour of the move to substitute the
the guarantor. The notes will also have the China-based CAR INC, rated Ba3/BB collateral backing the notes and grant
benefit of a keepwell deed, which ultimate (Moody’s/S&P), has hired CICC and Standard redemption payments, subject to certain triggers.

EMERGING MARKETS ASIA-PACIFIC
8% area, - - -/BB- CS/GF Sec/Orient -

7.875%
T+190 area - - Baa3 Orient/BOCI/Citi/CNCBI/CISI/ -
CMBCHK/Haitong/HSBC/Ping An
HK/SPDBI
T+210 area, - - Baa3/BBB-/BBB HSBC/CNCBI/ICBCI/ABCHK/BoC/ -
T+190 +/-2.5 CCBI /BoCom/StCh/ANZ/CBA/Natx.
5.5% area - - Baa3/BBB-/BBB HSBC/CNCBI/ICBCI/ABCHK/BoC/ -
CCBI /BoCom/StCh/ANZ/CBA/Natx
T+180 area - US$700m Baa1/BBB+ BAML/BNP/CMZ/CS/HSBC/Miz Asia 82%, Eur 18%. FM/AM 64%, Bks/
PB 16%, Ins 20%.
- - - A3/A-/A- Maybank -
T+180 area - US$500m Baa1/BBB+ BNPP/MUFG Asia 84%, EMEA 15%, o/s US 1%. Ins
57%, AM/FM 35%, Bks 5%, Other 3%.
T+140 area 15 US$3.5bn A3/-/A GS/JPM/BAML -
T+180 area 10 US$3.6bn A3/-/A GS/JPM/BAML -
T+230 area 5 US$1.1bn Unrated BNPP/Citi/DBS/ANZ/BoC/MS/ Asia 96%, Eur/offshore US 4%. AM/FM/
MUFG/Santander/SG/CA-CIB/CCBA/ Public inst 75%, Bank 23%, PB 2%.
GS/Maybank/Natx/Westpac
7% area - - -/-/BB+ Haitong/Orient/Zhongtai Asia 100%. Bank 83.8%, AM/FM 13.9%,
PB 2.3%.
Low 6% area - - Unrated DBS/BoC/UBS/Cinda Intl/CISI/ -
Orient
7% area - - Unrated Zhongtai/DBS/CEB Intl/BoC/Guotai -
Junan/Silk Road
100.00 price - - Unrated DBS/UOB -
7.25%/7.375%, - >US$1.35bn -/B/B ING/JPM/UBS -

7.125%/7.25%,
7% (+/-5),
6.95%
3.375% area, - >€1.3bn Ba1/-/BBB- DB/JPM/MS/UBS -
3.125%/3.25%,
3.125%
MS+145 area, 10 >US$1.6bn A1/A/+A Barc/BAML/JPM/Miz/SMBCNikko -
MS+130/+135
T+225 area, - US$1.1bn Baa3/BBB/BBB Citi/HSBC/JPM -
T+212.5/225
As an earlier meeting was adjourned, sale to Reliance Jio; and 4–19 cents cannot under any circumstances rank in
holders of just a quarter of the notes needed depending on the outcome of a legal case higher priority than the undisputed claims
to be present to form a quorum. involving RCom unit Sistema Shyam of secured domestic and international
The approved resolutions do not amend Teleservices. lenders and any stay granted in this regard is
any payment terms on the notes, with the RCom agreed in December to sell its not defensible in law and is liable to be
restructuring details to be addressed at a later wireless, spectrum, tower, fibre and media vacated,” RCom wrote in a stock exchange
stage, but RCom has set some milestones. convergence node assets to Reliance Jio. The filing on March 14.
The telecoms company said its meeting with transaction is required to close by March 31,
advisers to the noteholders to discuss the but some of RCom’s trade creditors have
restructuring should happen no later than tried to block the telco from selling assets SOUTH KOREA
April 15, with a restructuring-support until they are repaid.
agreement to be signed by June 30 and the Ericsson India filed a petition with the DEMAND COOLS FOR SHINHAN T2S
workout to be completed by August 31. Bombay High Court to block RCom from
An ad hoc committee of holders of about transferring assets, and won a stay. RCom South Korea’s SHINHAN BANK (Aa3/A+/A)
19% of the 2020 notes has signed a said on March 14 that the Bombay High attracted a modest order book in a soft
restructuring-support deed. The deed states, Court had rejected an appeal against the market for a US$400m offering of Tier 2
among other things, that accrued interest stay. Avaya India has also filed a claim bonds.
will be included in the consideration for against RCom in the National Company Law The Reg S notes, priced on Monday at
restructuring the notes, and that the ad hoc Tribunal, with a final hearing due to be held Treasuries plus 165bp, drew orders of
group will receive cash equivalent to 1% of on March 23. US$700m from 50 accounts. That was
the principal amount outstanding on their In addition, holders of a 4.26% stake in smaller than the US$1.1bn for its US$350m
notes by June 30, to be taken from an subsidiary Reliance Infratel have won a stay Tier 2 offering last September, issued in a
expected future payment. on the sale of the tower and fibre-optic 144A/Reg S format.
RCom has offered to pay holders cash in assets, after filing a petition to the NCLT in On the latest issue, Asia accounted for 82%
three parts: 21 cents on the dollar, once Mumbai. RCom said it planned to appeal. of the book, and Europe for the rest. In
bondholders and regulators approve the “As legally advised, the claims of minority terms of investor types, 64% were funds and
restructuring proposal; 4–5 cents within 12 investors of Reliance Infratel, subsidiary of asset managers, 16% were banks and private
months of the completion of RCom’s asset the company and/or unsecured vendors banks, while 20% were insurers.

Feedback from investors was that they
Tenors diverge in Asian credit preferred the issue size to be capped at US$400m.
Shinhan had announced plans to raise up to
US$500m, according to an exchange filing.
n ASIA Average maturity rises for high-grade credits, but shrinks for junk bonds Shinhan paid a new-issue premium of
around 10bp–12bp over its US$350m Tier 2
Asia’s investment-grade borrowers are SOFTBANK GROUP CORP and LENOVO GROUP 2027s, which were spotted at around
selling longer-dated bonds while their high- both announced that they were considering G+147bp, while curve adjustment for
yield peers issue shorter maturities, as rising raising funds from 10-year bonds, before another year put fair value at about 155bp.
rates pull issuers and investors in opposite choosing not to last week, with Lenovo printing The outcome shows that even price-
directions. only a five-year issued under the Reg S format. sensitive issuers, such as South Korean
An IFR analysis of rated US dollar bonds “You’re really going to need to do a 144A borrowers, are paying higher premiums to
shows the average maturity for investment- offering to do a 10-year now, or you’ll be leaving attract investor demand in volatile credit
grade issues so far this year has risen to a lot of value on the table,” said the Singapore- markets.
around 6.9 years, compared with 5.4 years based banker. “The US investor base always “Overall, the reception wasn’t the
in the first quarter of 2017. In contrast, Asian takes on more duration than Asia.” strongest, but the quality of the book was
high-yield maturities shrank to 3.6 years, from In high yield, a proposed US$500m-plus quite high,” said a debt syndicate banker on
4.4 years. 15-year deal from Indonesia’s STAR ENERGY the issue, pointing out the top half featured
The data reflect final maturities, excluding GEOTHERMAL has yet to be launched, after long-only global asset managers, life
perpetuals, as of March 22. starting roadshows on February 28. insurers and bank treasuries.
The change is indicative of investors’ Since last year, many Chinese high-yield “Given how soft this market was, I was
increasingly conservative approach to duration. issuers have seized on a loophole in regulations surprised that we were able to tighten that
“People are getting allergic to tenor,” said a to issue offshore bonds at tenors of less than much, but it’s turning into an investor’s
Singapore-based banker. “Issuers might need a year, which do not require prior approval, market. Headline book sizes aren’t massive,
to temper their expectations.” but even those with offshore quotas are now and it’s less impactful on execution.”
Resistance from investors is being seen this learning they can only find demand at an The 10-year bullet was tightened 15bp
year in higher new-issue premiums from Asian acceptable price if they issued at short tenors. inside initial price guidance. Shinhan
bond issuers – unimaginable this time last Double B rated SHANDONG IRON & STEEL tightened pricing more than Australian peer
year, when many issuers succeeded in pricing priced a two-year bond issue last week, rather Macquarie Group, which was unable to
inside their existing curves. Premiums of 10bp– than a three-year as originally intended, after narrow guidance on a US$500m 11-year non-
25bp are now common for investment-grade Chinese asset managers gave feedback that call 10 bond on the same day of marketing.
issuers in Asia. they would prefer to limit duration risk. Before The bonds were spotted 2bp wider in the
Meanwhile, the better-rated issuers see the that, Single B rated Xinyuan Real Estate had aftermarket.
era of cheap money drawing to an end and are to pay 9.875% to complete a 1.5-year issue on The Reg S offering is the first Asian Tier 2
trying to sell long-tenor bonds before rates rise March 12, having issued a three-year at 9.125% print in the G3 markets this year. Despite
any further. just four months earlier. weak market conditions, bankers said
“From a valuation perspective, the five- In the past, many high-yield issuers favoured demand for bank capital remained robust at
to-10-year spread differential for Asian short tenors to keep coupons low, but they the right price.
investment-grade does look too flat, and we are now starting to see the value of locking in “Investors are still looking for higher
can expect regional corporations are still eager longer-term funding – just as the market has yields from strong high-grade names in
to print long-tenor paper to lock in cheaper turned against longer tenors and raised the places like Australia and South Korea,” said
funding,” said Jimond Wong, managing cost of funding for junk-rated credits. another banker on the deal.
director for Asia fixed income at Manulife Asset “Last year, we were trying to get high-yield The notes have initial ratings of Baa1/
Management. issuers to push out to seven years and they BBB+ (Moody’s/S&P). The bonds will be
“This supply bias may continue to pressure wanted to go shorter,” said the syndicate head. written off if the bank is declared insolvent.
the long end of the credit curve. Besides, as “Now, it’s reversed.” S&P said South Korean banks were likely
spreads are now lingering at multi-year tights The rate environment is creating buying to receive extraordinary support from the
and room for further compression is arguably opportunities in secondary credit. government in a pre-emptive manner and at
less than before, investors may be less inclined “We feel that, while US rates can continue a relatively early stage. Such government
to sit on longer tenors unless adequately to move higher, the pace will moderate,” said support would not constitute a non-viability
compensated with wider spreads.” Wan Howe Chung, head of Asian fixed income event in the country.
at Amundi. “This means there are potential Shinhan’s Basel III-compliant CET1 and
DURATION GAMES opportunities in investment grade, which have capital adequacy ratios stood at 12.7% and
The US Federal Reserve is expected to raise sold off purely due to duration.” 15.4%, respectively, at the end of last year,
rates twice more this year, after Wednesday’s Wan said the flatness of the rates curve according to its website.
25bp increase, with three hikes in prospect meant that Amundi would wait until long- Bank of America Merrill Lynch, BNP Paribas,
next year. That has made investors wary of dated bonds cheapened further before shifting Commerzbank, Credit Suisse, HSBC and Mizuho
longer tenors, which are more sensitive to rate its focus to that part of the credit curve. were joint bookrunners.
movements. “We like short-end high yield bonds for
“In the past, selling a 10-year investment- stable carry, though we are beginning to see SK TELECOM READIES DOLLAR ISSUE
grade bond was easier than selling a five-year, very stable short-end investment-grade names
because of the higher yield,” said a syndicate cheapening up, but we expect more selling to SK TELECOM, rated A3/A–/A–, will begin
head. “Now, the sentiment is completely come,” he said. meetings with fixed-income investors in
opposite.” Daniel Stanton Asia, Europe and the US on Monday for an
offering of US dollar bonds.

EMERGING MARKETS EUROPE/AFRICA
The South Korean wireless telecoms Orders totalled over US$500m from 41 The benchmark Reg S notes are expected
operator has mandated Bank of America Merrill accounts. Asia bought 84% of the Reg S to be rated Baa1/BBB+ (Moody’s/S&P), in line
Lynch, BNP Paribas, Goldman Sachs, JP Morgan, notes, while EMEA accounts purchased 15% with the guarantor.
Mizuho Securities and Standard Chartered Bank. and offshore US investors 1%. BNP Paribas and MUFG were joint
A 144A/Reg S issue with intermediate The offering attracted a high-quality order bookrunners for the new issue and dealer-
maturities may follow. book due to the scarcity value of the issuer managers for the tender offer.
SKT has US$700m of 5.5-year bonds due and the defensive nature of the credit. In
on May 1. terms of investor types, 57% were insurers,
35% were asset managers and fund
KORES TO MEET BOND INVESTORS managers, 5% were banks and 3% were
others. EUROPE/AFRICA
KOREA RESOURCES, rated A1/A (Moody’s/S&P), Demand also had support from a tender
will meet investors in Asia and Europe from offer for Ratchaburi’s US$300m 3.5% bonds
April 3, with a US dollar Reg S short-to- maturing on May 2 2019, its only ROMANIA
intermediate maturity bond issue to follow. outstanding dollar issue. Under the offer, it
Bank of America Merrill Lynch, BNP Paribas, accepted US$193m of bonds, paying a cash GLOBALWORTH BUILDS ON FOUNDATIONS
Citigroup, Credit Agricole and HSBC are price of 101.3% of face value, as many
mandated, as IFR reported earlier this participants in the tender subscribed to the GLOBALWORTH repeated the success of its last
month. new issue. outing in the international markets on
Government-owned Kores is a mineral The tender, as well as the knowledge Thursday, as the firm increased the size of a
resources developer with a national policy that the new issue was capped at seven-year offering to €550m.
role to secure resources for South Korean US$300m, helped create price tension, but The company, whose business is
industries. there were varying opinions on the right commercial real estate investment in
pricing level. Romania and Poland, started marketing the
Opinions among real-money investors notes at 3.375% area.
THAILAND varied from 160bp to 180bp, while a note Pricing was tightened to a guidance range
from Nomura estimated fair value at of 3.125%-3.25%, for a print at the tight end.
RATCHABURI SHINES IN BARREN Treasuries plus 169bp. Comparable A banker close to the deal said that
PRIMARY references in the Thai credit complex were investors had communicated 3.25% as fair
PTT Global Chemical’s 2022s at a G-spread of value, although there was debate around
RATCHABURI ELECTRICITY GENERATING HOLDING 105bp, Thai Oil’s 2023s at 104bp, and PTT’s that level given that Globalworth only has
made the most of a barren primary market 2035s at 159bp, with extra spread needed one other issue outstanding.
in Asian G3 on Tuesday to complete a fresh for Ratchaburi’s longer maturity. “There was probably a little bit of posturing
offering, which, unlike most recent prints, The bonds traded up to Treasuries plus from investors, as I doubt they would buy at a
did not need to offer a high new-issue 158bp early last Wednesday, though many -12.5bp new issue premium,” he said.
premium. investors had decided to buy and hold. The books closed at over €1bn, excluding
Thailand’s largest independent power RH International (Singapore) will issue the lead manager interest. The interest allowed
producer printed US$300m of 10-year senior notes, which have a guarantee from the issuer to increase the trade’s initial
unsecured bonds at Treasuries plus 162.5bp, Ratchaburi. Electricity Generating Authority target by €50m, as it had done in its
tightening from initial price guidance of of Thailand, a wholly owned unit of the inaugural offering in June, when it sold a
180bp area. state, is Ratchaburi’s parent company. €550m June 2022 note at a yield of 3%.
Mozambique debt talks take awkward first steps

n AFRICA Sovereign outlines restructuring scenarios but investors want more talks
A group of MOZAMBIQUE’s international The disclosure prompted the International in form of a Eurobond or loan again, restructuring
creditors said on Wednesday it hopes to soon Monetary Fund and foreign donors to cut off adviser Lazard told journalists at a briefing.
start constructive debt restructuring talks support, triggering a currency collapse and The response from the Global Group of
with the heavily indebted African country, with leading to a default in what was already one of Mozambique Bondholders, which represents
follow-up high-level meetings scheduled for the world’s poorest countries. or has the backing of more than 80% of those
April. Tuesday’s scenarios, presented 17 months who hold the country’s main Eurobond, was
Mozambique tabled the key outlines of a since Maputo said its debt was unsustainable that it was “a non-starter”. Following a second
three-pronged proposal to restructure roughly and needed restructuring, included extending meeting on Wednesday, GGMB said it hoped with
US$2bn in debt during a meeting with creditors maturities on the outstanding defaulted debt to some adjustments there could be “good faith
in London on Tuesday. However, creditors were between eight and 16 years and a 50% haircut negotiations to reach a fair and equitable solution”.
swift to reject the advance, which included some on owed interest and penalty payments. The group’s legal adviser, Thomas Laryea at
steep writedowns. Slides also had two options with haircuts on Cooke Robotham, told Reuters the group and
Shortly after restructuring a Eurobond in the principal with shorter maturity debt getting finance minister Adriano Maleiane and his team
2016, Mozambique’s government admitted hit hardest. would meet again for talks in four weeks on the
to US$1.4bn of previously undisclosed loans, The options were open to all commercial sidelines of the IMF World Bank Group spring
many of which went on upgrading maritime and Eurobond and loan holders, with creditors able to meetings starting in mid-April.
military security. chose if they wanted to swap into the new issue Karin Strohecker, Marc Jones

EXOTIC DEBT PRICES: 22/3/2018 Globalworth (Ba1/BB+/BBB-) is on an tendered US$409.8m, some 83%, of the
Bid Offer upwards ratings trajectory. Earlier in notes.
Americas March, Moody’s upgraded the company Investors will receive US$1,095 for every
Cuba (€) 19.00 20.00 from Ba2 and assigned a positive outlook, US$1,000 of principal submitted. The notes
Cuba (¥) 18.00 20.00 while S&P also assigned a positive outlook. were trading at 107.25-109.25, according to
Guyana/PD–trade 80.00 90.00 Fitch also gave the company its first rating Thomson Reuters, before the deal was
Honduras trade 30.00 40.00 on the company this month. announced on March 9.
Nicaragua/Loans 16.00 19.00 That had helped broaden the deal’s The level of participation exceeded leads’
Suriname trade 10.00 12.00 appeal, the banker said, although the expectations and contrasted with a buyback
Africa positive impact from the rating moves had offer on the notes last year when MHP
Angola 99.25 100.25 been dampened to an extent by a weak received tenders of just over US$245m. At
Benin 10.00 15.00 backdrop. the time the 2020s had US$750m
Burkina-Faso 8.00 10.00 “It suddenly became a crossover credit, outstanding.
Cameroon trade 22.00 32.00 although unfortunately the full effect of “The tender price was interesting. You get
Cape Verde trade 75.00 85.00 the upgrade was not felt due to the to a tipping point where holders think ‘this
Central African Rep trade 0.50 1.50 market,” said the banker. looks attractive then everyone will tender.
Congo/trade 25.00 30.00 “But it meant that if an investment- Therefore if I don’t tender, I will be stuck in
Congo (Dem Rep) 3.75 6.75 grade investor had any kind of leeway, an illiquid bond.’ So we had that dynamic,”
Cote d’Ivoire 101.50 103.50 then given the ratings momentum, they said a lead.
Equatorial Guinea trade 85.00 90.00 could buy into this as a compression The tender also helped provide
Ethiopia 2.00 4.00 trade.” momentum for the new issue. Although
Gabon PD-Trade 70.00 78.00 Globalworth’s portfolio is valued at MHP is a popular name, it’s not an easy sell
Ghana 88.00 92.00 €1.8bn. because it trades well inside the sovereign - a
Guinea-Bissau trade 7.00 10.00 Deutsche Bank, JP Morgan, Morgan Stanley disparity that has become even more
Guinea 8.00 13.00 and UBS were joint lead managers and marked recently because of a sell-off in the
Kenya trade 45.00 55.00 bookrunners. sovereign’s curve.
Liberia PD trade 9.00 12.00 MHP’s 7.75% May 2024s trade on the bid
Madagascar (trade) 27.00 34.00 side in the mid 6s, while the sovereign’s
Mali PD trade 2.00 6.00 UKRAINE 7.75% Sep 2024s are quoted at 7.35%.
Mozambique (trade) 6.00 12.00 Leads began the execution process with a
Senegal 24.00 26.00 TENDER PROPELS MHP INTO NEW BOND healthy pick-up over MHP’s curve, though a
Sierra Leone PD-trade 1.00 5.00 final book of US$1.35bn enabled them to
Tanzania 12.00 16.00 MHP took advantage of a tender on price with a 5bp concession.
Uganda trade 16.00 18.00 outstanding bonds to price a new issue The company recently released 2017
Zambia PD-trade 15.00 22.00 with a minimal concession even though financial results, which saw revenues rise
Asia the Ukrainian poultry producer trades well 13% and adjusted Ebitda grow 11%, while the
Bangladesh 70.00 80.00 inside the sovereign. bottom line more than tripled due to
Cambodia trade 6.00 12.00 The company sold a US$550m April smaller forex losses.
Mongolia 27.00 38.00 2026 note on Thursday at par to yield One big thing in MHP’s favour with
Myanmar trade 27.00 32.00 6.95%. Despite tough conditions, that was bondholders is that despite all the hardships
Nepal trade 13.00 16.00 the tight end of guidance and inside IPTs of it suffered following Russia’s invasion of
North Korea/Loans 0.03 1.50 7.25%-7.375% area. Crimea, and unlike other corporates from
Papua New Guinea 85.00 95.00 The deal came after the early deadline Ukraine, it did not undertake a debt
Vietnam 102.00 103.00 had expired on a buyback of its US$495.6m restructuring and continued to service its
Source: Wesbruin Capital 8.25% 2020 bonds. The offer proved debt.
popular with investors, who validly MHP is rated B/B. ING, JP Morgan and UBS
were the leads.
ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE
Europe/Africa Middle East
Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) MIDDLE EAST
1 Citigroup 17 6,214.61 18.0 1 Citigroup 10 3,834.20 13.5
2 VTB Capital 6 4,476.85 13.0 2 Standard Chartered 16 3,647.15 12.8
3 HSBC 7 2,368.65 6.9 3 HSBC 14 3,397.63 12.0 BAHRAIN
4 Deutsche Bank 7 2,342.86 6.8 4 JP Morgan 5 2,127.86 7.5
5 Standard Chartered 5 2,306.24 6.7 5 Sumitomo Mitsui Finl 2 1,437.93 5.1 GULF SOVEREIGN BACK FOR TRIPLE
6 JP Morgan 9 2,243.28 6.5 6 Credit Suisse 5 1,401.16 4.9 TRANCHE
7 SG 10 2,068.54 6.0 7 Barclays 3 1,287.65 4.5
8 BNP Paribas 7 1,824.19 5.3 8 BAML 4 1,175.19 4.1 BAHRAIN has announced banks for a triple-
9 UniCredit 7 1,050.70 3.0 9 Deutsche Bank 6 1,154.06 4.1 tranche offering that echoes a US$3bn
10 First Abu Dhabi Bank 2 907.87 2.6 10 BNP Paribas 5 915.80 3.2 transaction from last year.
Total 29 34,559.36 Total 36 28,396.55 The Gulf sovereign hit the road on
Excluding equity-related debt. Excluding equity-related debt. Friday ahead of offering a long seven-year
Source: Thomson Reuters SDC code: L2 Source: Thomson Reuters SDC code: L5 sukuk alongside 12-year and/or 30-year

EMERGING MARKETS AMERICAS
conventional bonds. Meetings will wrap up National Bank (A1/-/A+) earlier in March. CELSE MEETS INVESTORS
in New York and Singapore on Tuesday. UNB’s trade also came a fraction wider at
A banker reckons the trade should be swaps plus 135bp, resulting in a reoffer CENTRAIS ELETRICAS DE SERGIPE (CELSE) kicked
popular with investors given that Bahrain yield of 4.089%. The reoffer yield for ADCB off meetings last week for a possible Real-
is a frequent issuer and typically offers a was 4.078%. denominated 14-year amortising bond, with
generous concession for participation. Although the ratings on the banks are a targeted nine-year weighted-average life.
The sovereign offered decent yields last broadly similar, one marked difference Meetings in the US and Europe started on
time round, which comprised a seven-and- between the trades was that ADCB (A/A+) March 20, and Goldman Sachs has been
a-half year sukuk as well as 12 and 30-year benefited from the additional buyer base mandated as global coordinator and
conventional notes. That offering raised a offered through the 144A format. bookrunner.
total of US$3bn in September through a The order books were more than two Proceeds will fund project financing,
US$850m sukuk at 5.25%, a US$1.25bn 12- times subscribed. which is expected to be insured by Swiss
year at 6.75%, and a US$900m 30-year at Barclays, Bank of America Merrill Lynch, JP Export Risk Insurance.
7.50%. Morgan, Mizuho and SMBC Nikko were joint CELSE, owned by Eletricidade do Brasil and
The country’s economy relies on lead managers. Golar Power, was created to build and operate
implicit Saudi Arabian support, so for the Porto de Sergipe LNG-to-power project.
many investors evaluating the trade it is a
question of how much faith they place in MINERVA EYES PERP
that crutch.
The sukuk 2025s widened by 16bp on AMERICAS Brazilian beef producer MINERVA will be on
the day of the announcement to Z-spread the road until March 26 to market a
of 273bp, according to Tradeweb, the potential fixed-rate US dollar perpetual
conventional 2029s went out 22bp to plus ARGENTINA senior unsecured bond.
492bp and the conventional 2047s The company concurrently announced a
widened by 15bp to plus 541bp. VRIO PLANS BOND AHEAD OF IPO tender offer and consent solicitation for
Bahrain (B+/BB-) is likely to lead a wave US$300m of outstanding 8.75% perps.
of sovereign issuance from MENA so it VRIO, a wholly-owned AT&T subsidiary that Holders are being offered an early deadline
makes sense for the Kingdom to get ahead owns and operates DirecTV Latin buyback price of 105.50 on the notes.
of the pack. America’s South American and Caribbean The early tender date has been set for
BNP Paribas, Citi, Gulf International Bank, assets, has kicked off investor meetings April 3, while the tender expires on April 16.
National Bankof Bahrain and Standard ahead of a bond sale. Bank of America Merrill Lynch, HSBC, Itau,
Chartered are the leads. The company has mandated Citigroup, Bradesco BBI and BTG Pactual are dealer
Goldman Sachs, JP Morgan and Morgan Stanley managers and leads on the potential bond.
to arrange the meetings, which will wrap
UAE up on March 27.
Vrio is considering the issuance of a new COLOMBIA
ADCB BACK IN THE PUBLIC EYE senior note with intermediate maturity in
US dollars and could also add a peso- GILEX EYES DEBUT
ABU DHABI COMMERCIAL BANK expunged the denominated tranche to the offering,
memories of a past, bruising, encounter according to a message sent to investors. GILEX HOLDING,a holding company that owns
with the primary sector with a successful Expected ratings are Ba2/BB/BB+. Colombia’s GNB SUDAMERIS, should issue a
return to the public markets on Thursday. Vrio publicly filed for an IPO on the New short-to-intermediate US dollar bond this
The bank, which is 62.52% indirectly York Stock Exchange earlier this month. week.
owned by the Abu Dhabi government, was AT&T plans to sell a minority stake in the The borrower wrapped up meetings last
last in the public markets in 2015 when it unit to pay down its own debt. week and pricing is expected as soon as
printed a US$750m five-year. But later that Monday.
year an attempt at a drive-by was Deutsche Bank and Goldman Sachs are the
scuppered by poor liquidity conditions in BRAZIL leads.
the Gulf.
ADCB therefore took a safety-first BANBRA LAUNCHES TENDER
approach this time round, completing a GUATEMALA
four-day roadshow across New York, BANCO DO BRASIL has launched an up to
Boston and London, and waiting for any US$700m bond tender as it seeks to lower CENTRAL AMERICAN SOVEREIGN EYES
dust to settle from the FOMC meeting on borrowing costs and increase the RETURN TO DOLLAR
Wednesday. efficiency of its capital structure.
It then began marketing what is the first The bank is targeting up to US$600m of GUATEMALA may return to the dollar bond
144A transaction from a UAE financial its 8.5% perps and up to US$100m of its markets as soon as June, but much will
institution since the financial crisis. 9.25% perps. depend on the approval of multilateral
Initial price thoughts went on screens at Holders are being offered an early bird loans, the country’s credit chief told IFR.
swaps plus 145bp area for a dollar five-year buyback price of 111.00 on the 8.5% perps Ideally the country would like to tap 30-
benchmark. Guidance was set at plus and 109.50 on the 9.25% perps. year money with a size of between
130bp to 135bp and the print came at the The tender offer expires on April 16 and US$500m-$700m to qualify for index
tight end. the early bird date has been set on April 3. inclusion, Rosa Maria Ortega, Guatemala’s
The size of US$750m was a touch above BB Securities, Citigroup, HSBC and JP Morgan director of public credit, said on the
the US$500m five-year printed by Union are acting as dealer managers. sidelines of the IDB meeting in Argentina.

But tenor will depend on market In October, S&P lowered Guatemala’s than 700 points by the close while credit
appetite and costs, said Ortega, noting that rating to BB- from BB, citing the impact on widened.
Guatemala’s last two forays involved 10- growth from political volatility and weak That volatility meant the deal, a US$500m
year bonds. government institutions. no-grow trade, launched at 212.5bp over
Ultimately the sovereign may not need Fitch, on the other hand, sees limited Treasuries. That was the tight end of
to raise money among international impact on growth from the political scandal, 212.5bp-225bp guidance, but just 12.5bp
investors if Congress approves loans from noting that the economy has been resilient inside initial pricing.
the World Bank and the IDB totaling in the face of such shocks in the past. The deal was just over two times covered
US$500m. The sovereign’s 4.375% 2027 bonds, issued with books heard to be about US$1.1bn.
But prospects of that approval are low in in May last year, saw its yield jump from Sigma will use proceeds refinance a
a country that has suffered a series of 4.45% to 4.944% in February but they have €400m 3.375% 2022 bond issued by its
political scandals, so the government has since settled back at 4.827%, according to Spanish subsidiary Campofrio Food Group.
been preparing a dollar bond just in case. Thomson Reuters data. Citigroup, HSBC, and JP Morgan were active
Requests for proposals are ready but Guatemala, rated BB-/BB, has about bookrunners.
have yet to be sent to banks, she said. US$1.6bn-equivalent in funding needs this
The government has been under year and can easily access much of that in
pressure as the country’s attorney general the local markets, where it has been raising PERU
seeks to investigate the president amid eight, 12 and 15-year money at yields of
allegations of illegal campaign financing. 6.40%-6.65%, Ortega said. INRETAIL PLANS BOND, TENDER
The Odebrecht corruption probe has “We are the only county in Central
also extended to Guatemala, where America that issues in 15 years (in our local Peru’s INRETAIL SHOPPING MALLS has hired banks
prosecutors revealed that the ex- market),” she said. for a series of investor meetings in Europe,
infrastructure minister had taken bribes But a dollar bond allows the country to the US and Latin America ahead of a
from the Brazilian construction company, raise larger sums in one fell swoop rather potential US dollar bond deal.
according to Reuters. than through a series of smaller issues in the The company is the largest owner,
local market. developer and operator of shopping malls
ALL INTL EMERGING MARKETS BONDS based on gross leasable area, number of
BOOKRUNNERS: 1/1/2018 TO DATE shopping malls and tenants’ sales.
Latin America MEXICO It has mandated Citigroup and JP Morgan as
Managing No of Total Share global coordinators for the potential issue.
bank or group issues US$(m) (%) SIGMA BREAKS LULL IN LATAM The two banks are joined by Credit Suisse as
1 JP Morgan 14 5,076.17 17.2 bookrunners on the deal.
2 Citigroup 15 4,726.25 16.1 Food company SIGMA ALIMENTOS broke a lull in The meetings kicked off on March 21 and
3 BAML 13 3,728.85 12.7 Latin American primary issuance on will wrap up on March 26.
4 BNP Paribas 5 2,086.05 7.1 Thursday with a 10-year bond to refinance The company is considering a senior
5 BBVA 2 1,308.69 4.4 debt. unsecured bond sale with an intermediate
6 Credit Suisse 4 1,258.78 4.3 The deal, the first from the region since maturity, according to a message sent to
7 Santander Global 6 1,202.77 4.1 last Friday, was also the first from Sigma in investors. Expected ratings are Ba2/BB+ by
8 Barclays 5 1,181.46 4.0 the US dollar market in almost two years, Moody’s and Fitch.
9 Itau Unibanco 7 1,071.39 3.6 according to IFR data. In addition, an any-and-all tender offer and
10 Deutsche Bank 1 1,000.00 3.4 Its timing was unfortunate as it coincided consent solicitation directed to holders of
Total 32 29,438.00 with another volatile day in financial InRetail’s existing 6.5% senior notes due 2021
Excluding equity-related debt. markets as worries about trade wars saw the was launched on March 13 with an early
Source: Thomson Reuters SDC code: L3 Dow Jones Industrial Average plunge more tender and consent date set of March 26.
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LOANS
China 66 Hong Kong 67 India 68 Japan 69 Malaysia 69 Singapore 70 Thailand 70 Austria 71 France 72
Luxembourg 73 Saudi Arabia 74 South Africa 74 United States 76 Leveraged Loans 78
n FRONT STORY EUROPEAN LEVERAGED MARKET
Banks, funds compete for second-lien

Second-lien is more attractive than bonds from yield perspective
EG Group is syndicating second-lien rather than preplacing
Banks and funds are competing for second- is much more attractive than bonds when it there might be a slight cost premium, but
lien leveraged loans as they battle for comes to yield,” a senior investor said. this is compared to a downside of materially
higher-yielding assets to bolster their TMF’s €200m eight-year second-lien more than that,” a third syndicate head said.
returns. facility closed in December to pay 687.5bp
Borrowers renewed their appetite for over Euribor, with a 0% floor at 99.5 OID,
second-lien loans in 2017 as a means of while Paysafe’s US$200m and US$250m-
“Syndicating second-lien can
increasing overall leverage on a deal, while equivalent euro-denominated second-lien save 50bp-100bp for a sponsor
maintaining control over who holds the loans closed at the end of November to pay if it goes well”
paper - something that could not be 725bp over Libor with a 1% floor and 700bp
achieved via the public high-yield market. In over Euribor with a 0% floor, respectively, at
addition, these loans didn’t come with the 99 OID.
restrictive call protection associated with “Syndicating second-lien can save 50bp- At the same time UK forecourt operator EG
bonds. 100bp for a sponsor if it goes well,” a GROUP has syndicated a second-lien loan and
For most of 2017, private equity firms syndicate head said. Advent’s £1bn public-to-private buyout of
shunned banks to pre-place second-lien The success of TMF and Paysafe listed UK electronics and technology
loans directly with cash-rich funds, encouraged confidence among sponsors of business LAIRD includes a £100m second-lien
guaranteeing placement on the most smaller financings to syndicate second-liens. facility that is set to be syndicated.
expensive and risky part of a capital An €80m second-lien loan backing Citic
structure and avoiding any costly risks that Capital’s buyout of French packaging firm LOSS IN FEES
could arise during a syndication process. AXILONE closed in February to pay 775bp over After a deliberation process, Clayton,
Euribor, with a 1% floor at 98. Dubilier & Rice has decided to preplace
“TMF and Paysafe helped smaller a £285m second-lien loan, which forms
“CLO investors have
syndicated second-lien deals get over the part of a wider £1.75bn-equivalent
subordinated buckets to fill line,” a second syndicate head said. leveraged loan financing backing
and second-lien is much more MOTOR FUEL GROUP’s £1.2bn acquisition
attractive than bonds when it MIXING IT UP of MRH, the UK’s largest petrol station
comes to yield” In 2018, however, funds have fought back and convenience retail operator.
and proved competitive on pricing, Syndicating it had been an option.
But, in deeply technical and liquid preventing a wholesale trend for syndicated The preplacing of MFG’s second-lien
markets, banks offered increasingly second-liens. Now the market is seeing a delivered an approximate €5.7m loss in
attractive terms; two large second-lien loans mix of syndicated and preplaced second-lien underwriting fees to the banks, based on a
for Netherlands-headquartered business loans. 2% fee.
services firm TMF GROUP and UK-based Funds available to take pre-placed second- Despite banks losing out on 2%-3%
payment processing company PAYSAFE were lien loans include Alcentra, Apollo Capital underwriting fees on second-liens, sponsors
syndicated at the end of last year. Management, MV Credit, Ares, Park Square are having to pay out that same amount to
Despite some caution from institutional Capital, EQT, GSO and Partners Group. the funds with which they are preplacing the
investors, some of which had been burnt on “There is a trade-off to be done between a paper, in the form of an arrangement fee. So
subordinated debt in the financial crisis, market that has an appetite for second-lien in order to be competitive, funds need to be
many have appetite for second-lien loans as but isn’t certain until placed, versus cheaper than the margins and flex offered on
a way of boosting returns, especially when someone coming in and doing it in one go to an underwrite. Flex can put a sponsor on the
pricing has come down significantly on remove any threat of flex or widening,” the hook for an additional 150bp.
senior paper. second syndicate head said. “Sometimes the downside of underwriting
Second-lien is also more attractive from a In March German-based wheelchair is just too great; other times they make sense,
yield perspective than bonds, offering manufacturer SUNRISE MEDICAL and especially for the more well-known, larger
average margins of 750bp-775bp, compared Luxembourg-headquartered investor credits. If the preplaced funds push back and
with bond yields of 550bp. services firm SGG both preplaced second-lien want higher pricing, then we may see even
“It is arguably a lot safer to take a strip of loans. more underwrites - there is a natural
second-lien on a deal you like than take a “Locking down costs, fixing margins and competition between the two liquidity
higher margin on senior paper in a less getting rid of expensive flex by preplacing sources that is keeping them both on their
credit-worthy deal. CLO investors have the most junior pieces of the capital toes,” the third syndicate head said.
subordinated buckets to fill and second-lien structure to de-risk can be attractive. Yes, Claire Ruckin

WICET was built to service a consortium a management fee of 82.5bp, or as lead
of eight coal companies. It was funded arrangers with US$15m–$24m for an all-in
ASIA-PACIFIC entirely with debt backed by port fees on of 230bp, via a 55bp fee.
27m tonnes of coal a year, whether that CJEH is the borrower on Tranche A, while
volume was shipped or not. China-based fully owned subsidiary Green
AUSTRALIA Three of the eight original partners have Energy (Hangzhou) Corporate Management
folded, and WESFARMERS last year sold its is the borrower on Tranche B. CJEH’s units
WICET GETS EXTENSION interest in the project to Texas-based incorporated outside China and India will
CORONADO COAL GROUP. Other owners include provide unconditional and irrevocable
Lenders to Queensland’s debt-laden WIGGINS NEW HOPE CORP, China’s YANCOAL and Baosteel’s corporate guarantees.
ISLAND COAL EXPORT TERMINAL have agreed to AQUILA RESOURCES. CJEH operates waste-to-energy projects in
extend for eight years about US$3bn due on The remaining five partners must China.
an outstanding loan. shoulder the port’s debt and fees, meaning
The extension was a lifeline to owners, they now pay debt and loading fees of about ZTE TURNS TO RELATIONSHIP BANKS
who would have had to repay the hefty debt US$25 per tonne of coal, including financing
from September. charges. That is about five times the US$5- Telecoms equipment group ZTE has
“There is a structure on the table to per-tonne port fees at the adjacent RG Tanna approached relationship banks to refinance
extend the loan,” a banking source said. coal terminal. a US$450m loan due later this year.
Agreement had been reached on the The US$450m four-year bullet facility,
extension, but the parties had yet to sign it. signed in July 2014, paid top-level all-in
Mining giant GLENCORE and its partners – CHINA pricing of 265bp via an interest margin of
owners of the world’s most expensive coal 225bp over Libor and an upfront fee of
terminal – faced a September deadline to BJCE DEBUTS FOR US$220m 160bp.
refinance the loan or pay it off in full over Bank of China (Hong Kong), Credit
the next 15 years. BEIJING JINGNENG CLEAN ENERGY is seeking a Agricole, BNP Paribas and Societe Generale
Under the tabled agreement, all free US$220m-equivalent three-year term facility were mandated lead arrangers and
cashflow from the project would be used to on its debut in the offshore loan market. bookrunners on the maturing loan, which
pay down the loan. HSBC is the mandated lead arranger, attracted eight other lenders in general
The lenders want the coal export terminal bookrunner and green structuring adviser syndication.
to cut its debt in half to less than US$1.5bn, on the bullet loan, which can be drawn in ZTE, which is also a major smartphone
a level comparable to an investment-grade either Hong Kong or US dollars. maker in China, returned to the black in
company. This will make it easier for WICET Based on an interest margin of 143bp over 2017, posting a net profit of Rmb4.57bn
to get a credit rating to refinance some of Libor, banks can join as lead arrangers with (US$724m), according to a stock filing on
the loan in bond markets at a later stage. US$30m-equivalent or more for top-level all-in March 15. The company is listed in
The outstanding balance of the loan is pricing of 160bp, via a management fee of Shenzhen, where it is headquartered, and
slightly under US$3bn. 51bp, or as arrangers with US$15m–$29m- Hong Kong.
WICET’s lenders had not increased the equivalent for an all-in of 153bp, via a 30bp fee.
interest margin of the loan or charged a fee so The borrower is BJCE subsidiary Beijing HAITONG UNITRUST BACK FOR MORE
as not to burden the troubled project further. Jingneng Clean Energy (Hong Kong), with
The lending syndicate comprises about 17 the parent company as the guarantor. HAITONG UNITRUST INTERNATIONAL LEASING CORP is
banks, including Australia’s four largest Funds are for general corporate purposes. returning to the loan markets for a
banks, Asian and European lenders, and a This is a green loan raised under the US$200m two-year financing, with Deutsche
couple of hedge funds. parent’s green finance framework. Bank as sole mandated lead arranger and
Australian coal-rail operator Aurizon Hong Kong-listed BJCE is the largest gas- bookrunner.
Holdings had been in talks to acquire the fired power provider in Beijing and a leading The loan pays an interest margin of 120bp
coal terminal. wind-power operator in China. The over Libor and banks committing on or
company is a subsidiary of Beijing Energy before April 27 receive an early-bird fee of
ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY Holding, which, in turn, is a fully owned 10bp.
SYNDICATED VOLUME (INCLUDING JAPAN) entity of Beijing’s municipal government. MLAs with US$25m or above receive
BOOKRUNNERS: 1/1/2018 TO DATE upfront fees of 90bp for top-level all-in
Managing No of Total Share CJEH SEEKS DEBUT LOAN pricing (including early-bird fees) of 170bp,
bank or group issues US$(m) (%) lead arrangers with US$15m–$24m receive
1 Mizuho 85 15,412.09 20.9 Singapore-listed CHINA JINJIANG ENVIRONMENT fees of 75bp for an all-in of 162.5bp, and
2 Bank of China 40 12,347.23 16.7 HOLDING is seeking a maiden three-year loan arrangers with US$10m–$14m receive fees
3 Sumitomo Mitsui 91 8,787.42 11.9 of US$150m-equivalent, via mandated lead of 65bp for an all-in of 157.5bp.
4 MUFG 119 8,098.26 11.0 arranger and bookrunner Standard Chartered Haitong UniTrust last tapped the onshore
5 ANZ 10 2,393.73 3.2 Bank. markets in 2016 for a Rmb910m (US$137m
6 Standard Chartered 7 1,601.17 2.2 The loan is split into a Tranche A of then) dual-tranche loan from seven banks. It
7 Mega Financial 11 1,599.65 2.2 US$120m and Tranche B of Rmb200m pays margins of 93% of the PBoC rates for
8 DBS Group 9 1,593.51 2.2 (US$30m). tranches of one and three years.
9 Citigroup 3 1,492.50 2.0 Only Tranche A is being syndicated. The The borrower last visited the offshore
10 Oversea-Chinese 5 1,350.33 1.8 interest margin is 210bp over Libor and the markets in 2015 for a US$80m three-year
Total 414 73,768.59 average life is 2.75 years. offshore bullet loan offering top-level all-in
Proportional credit Banks can join as MLAs with US$25m or pricing of 320bp, based on a margin of
Source: Thomson Reuters SDC code: S3a more for top-level all-in pricing of 240bp, via 275bp over Libor.

LOANS ASIA-PACIFIC
The Shanghai-based borrower carries Banks were invited to join at a top-level participation fee of 50bp, all-in pricing of
Triple A domestic ratings from Shanghai all-in pricing of 292.78bp, based on a margin 87bp and the lead arranger title for
Brilliance Credit Rating & Investors Service. of 270bp and a 3.95-year average life. US$20m–$29m, via a fee of 35bp, and an
all-in of 85bp and the arranger title for
GCL SEEKS THREE-YEAR FUNDS SCE SIGNS US$415m REFINANCING US$10m–$19m, via 25bp. The deadline for
commitments is April 11.
Hong Kong-listed GCL NEW ENERGY HOLDINGS is CHINA SCE PROPERTY HOLDINGS has increased a Funds are for refinancing purposes.
in the market for a US$150m three-year 3.5-year loan to US$415m-equivalent from The borrower is Shangri-La Asia Treasury,
term loan through mandated lead arranger US$300m after eight banks joined in general a wholly owned subsidiary of Shangri-La
and bookrunner Credit Suisse. syndication. Asia. Shangri-La Treasury raised a US$110m
The loan, which has a US$100m Bank of China (Hong Kong), Hang Seng Bank four-year senior loan in September 2016.
greenshoe option, offers an interest margin (facility agent) and HSBC were the mandated MUFG was also the MLAB on that loan,
of 500bp over Libor and has a 2.5-year lead arrangers and bookrunners. Industrial which attracted two other lenders.
average life. Bank joined as MLA. The parent, an investment holding
Banks can join with US$50m or more for Lead arrangers are Nanyang Commercial company, owns and operates hotels and
top-level all-in pricing of 550bp, via a Bank, Nanyang Commercial Bank Shenzhen associated properties in China, Singapore,
management fee of 125bp, or with branch, Bank of East Asia and Luso International Malaysia and other countries.
US$30m–$49m for an all-in of 530bp, via a Bank, while arrangers are Tai Fung Bank, Wing
fee of 75bp, or with US$10m–$29m for an Lung Bank, Taiwan Cooperative Bank and EnTie CTFE SIGNS US$1.3bn FACILITY
all-in of 520bp via a fee of 50bp. Commercial Bank.
The loan comes nearly two months after The Hong Kong-listed developer’s facility CHOW TAI FOOK ENTERPRISES signed a US$1.3bn-
the solar-power company, rated Ba2/BB– comprises a HK$3.172bn (US$406m) Tranche equivalent five-year term loan with six
(Moody’s/S&P), raised US$500m from A and a US$9m Tranche B. The interest margin mandated lead arrangers and bookrunners.
three-year Reg S bonds priced at 7.1% in late is 330bp over Hibor/Libor, and lenders were Bank of Taiwan, Bank of East Asia, Mega
January. offered top-level all-in pricing of 390bp. International Commercial Bank, Shanghai Pudong
GCL New Energy Holdings, a subsidiary of China SCE Property Holdings, rated B Development Bank, Tai Fung Bank and Taipei
Hong Kong-listed GCL-Poly Energy Holding, (S&P), is the borrower, while some of its Fubon Commercial Bank are the six MLABs on
develops and manages solar power plants in subsidiaries are guarantors. Funds are for the loan, comprising a US$1.02bn piece and
China. refinancing and general corporate purposes. a HK$2.185bn (US$279m) portion. SPDB was
Last August, GCL-Poly Energy Holding the coordinator.
raised a US$200m three-year loan. It paid a JEWELLER SIGNS DEBUT LOAN Lead arrangers are Cathay United Bank Hong
top-level all-in of 305.34bp over Libor, based Kong branch and Shanghai Commercial Bank,
on an interest margin of 250bp and an Jeweller Lao Feng Xiang has signed a debut while First Commercial Bank Hong Kong branch
average life of 2.53 years. three-year loan of US$200m, with ANZ as is arranger. Senior managers are Far Eastern
original mandated lead arranger and International Hong Kong branch, Chang Hwa
CHINA WATER AFFAIRS LOAN DRAWS 19 bookrunner. Commercial Bank, Shanghai Commercial &
China Construction Bank, Shanghai branch, Savings Bank OBU, Taichung Commercial Bank
A US$200m five-year loan for Hong Kong- China Minsheng Banking Corp, Shanghai OBU, Taiwan Cooperative Bank and Hwatai Bank.
listed CHINA WATER AFFAIRS GROUP has been branch, Hang Seng Bank and ICBC, Shanghai The loan carries an interest margin of
allocated to 19 lenders, with ANZ as branch, came in for the same title. 120bp over Hibor or Libor. In general
mandated lead arranger and bookrunner. Arrangers are Korean Development Bank, syndication, lenders were offered a top-level
The bullet loan offers an interest margin Taishin International Bank and Taiwan all-in pricing of 138.55bp via a 77bp
of 195bp over Libor. Cooperative Bank. participation fee. In senior syndication,
Banks joining as MLAs were offered top- The facility, split into a US$150m term loan MLABs were offered a top-level all-in pricing
level all-in pricing of 210bp, via an upfront and a US$50m revolving credit facility, pays an of 150bp or 145bp via a management fee of
fee of 75bp. interest margin of 120bp over Libor. Banks 88bp and underwriting fees of 44bp or 22bp,
Mandated lead arrangers are Bank of East joining as MLABs get a top-level all-in pricing respectively.
Asia, Korean Development Bank, Industrial & of 150bp over Libor, via an upfront fee of 90bp. Funds are for working capital purposes.
Commercial Bank of China Macau branch, Chiyu The borrower is LAO FENG XIANG JEWELLERY
Banking Corp, Kookmin Bank, State Bank of India HONG KONG, while Shanghai-listed parent Lao NWD OPTS FOR GREEN LOAN
Hong Kong branch, Taipei Fubon Commercial Feng Xiang is the guarantor.
Bank, Taiwan Cooperative Bank, CTBC Bank and Hong Kong-listed NEW WORLD DEVELOPMENT has
Tokyo Star Bank. signed an amendment to a HK$3.6bn
Lead arrangers are Mega International HONG KONG financing with six banks, making the
Commercial Bank OBU, Shinhan Asia, Sumitomo borrowing the first Green loan under the
Mitsui Trust Bank, Chang Hwa Commercial Bank, SHANGRI-LA LOAN HITS SYNDICATION developer’s green finance framework
First Commercial Bank OBU, NEC Capital launched last Wednesday.
Solutions Hong Kong branch, Shin Kong Hotel operator SHANGRI-LA ASIA has launched a The lenders are ANZ, Bank of China (Hong
Commercial Bank and Tai Fung Bank. US$150m five-year bullet loan into limited Kong), Credit Agricole, Hang Seng Bank, HSBC
In January 2016, the borrower increased syndication, with MUFG as the coordinator. and Sumitomo Mitsui Trust Bank, Hong Kong
to US$200m from US$100m its seven-year The loan offers an interest margin of 80bp branch.
syndicated B loan. ANZ was MLAB on the over Libor. The loan was originally signed in March
facility, which complemented a US$100m Lenders are being offered top-level all-in 2016 with the first five banks. SMTB joined
10-year A loan the Asian Development Bank pricing of 90bp and the mandated lead the financing subsequently, via a secondary
had provided in May 2014. arranger title for US$30m or more, via a market transaction, with Credit Agricole.

The amendment requires the loan’s use of Meanwhile, Yuexiu Property, a subsidiary of MUFG, Mizuho Bank and State Bank of India
proceeds to adhere to a slew of conditions Yue Xiu Enterprises, is slated to close general are mandated lead arrangers, bookrunners
under the company’s green finance syndication of its HK$1.5bn three-year term and equal underwriters on the new bullet
framework. The terms of the loan, including loan. Wing Lung Bank is the MLAB on that loan, loan. The three banks are also MLABs on the
the interest margin and the final maturity of which has attracted commitments from Bank US$300m five-year bullet loan, which is in
March 2021, remain unchanged. of East Asia, China Minsheng Banking Corp, Chong syndication and has drawn commitments
The facility finances the redevelopment of Hing Bank and OCBC Wing Hang. from a handful of lenders.
a commercial real-estate project at King’s The bullet loan offered top-level all-in That loan pays top-level all-in pricing of
Road in Hong Kong’s North Point district. pricing of 140bp, based on a margin of 100bp, based on an interest margin of 70bp
Construction has started and is slated for 120bp over Hibor and a 60bp participation and a 4.5-year remaining life.
completion by the end of 2019. fee. Yuexiu Property is the guarantor and PFC had sent out a request for proposals on
The building has received various wholly owned subsidiary Leading Affluence the new loan in late January, a couple of weeks
certificates, including the WELL Building is the borrower. after putting out an RFP for an issue of five-year
Standard pre-certification and BEAM Plus Yue Xiu Enterprises itself is a wholly Masala, or offshore rupee, bonds. The Masala
New Building Version 1.2, a pre-requisite for owned subsidiary of the Yue Xiu Group, a issue proposed to raise Rs12.5bn (US$196m),
the loan to be defined as green. major state-owned enterprise with the with a greenshoe option of up to Rs20bn.
While the entire loan qualifies as a green Guangzhou government as its main Earlier this month, PFC raised Rs33bn
financing, only a partial drawdown has shareholder. from the sale of one-year three-month rupee
taken place. notes at 7.8% in India’s domestic bond
The borrower is Full Asset Enterprises, markets.
while parent NWD is the guarantor. INDIA
REC TAKES CLUB, BILATERAL PATH
HUI XIAN UNIT CLUBS HK$5bn REFI IRFC PICKS TRIO FOR YEN LOAN
State-owned RURAL ELECTRIFICATION CORP has
Hui Xian Investment, a wholly owned State-owned INDIAN RAILWAY FINANCE CORP has raised US$400m through club and bilateral
subsidiary of Hong Kong-listed HUI XIAN REIT, picked three banks for its US$250m- loans.
has closed a HK$5bn three-year refinancing equivalent 10-year loan. HSBC and MUFG have provided US$240m
with six banks. Mizuho Bank, MUFG and SMBC are mandated combined through a club loan, while Mizuho
Bank of China (Hong Kong), China Construction lead arrangers and bookrunners of the yen- Bank lent US$160m through a bilateral facility.
Bank (Asia), Hang Seng Bank and Shanghai denominated loan, which has a bullet The tenor on both loans is three years.
Pudong Development Bank, Hong Kong branch, maturity and is expected to be launched into REC had sent out a request for proposals
committed HK$1bn each, while DBS Bank syndication in the coming weeks. in January for the loan with a February 12
and HSBC came up with HK$500m apiece. The loan has a base size of US$100m and deadline for responses. Banks were required
The unsecured bullet loan pays all-in comes with a greenshoe option of US$150m. to submit bids for a minimum US$100m.
pricing of 125bp, via an interest margin of Banks had until March 1 to submit HSBC had submitted an extremely tightly
105bp over Hibor. proposals. Proceeds will finance the priced bid of 71bp all-in pricing, while rival
Funds will refinance a loan of a similar company’s acquisition of rolling stock. bids had come in around 80bp. In the end,
size the company signed with the same six IRFC’s mandate for the 10-year loan REC took the club and bilateral routes.
banks in December 2014. That three-year follows another US$350m-equivalent Funds refinance a US$400m five-year loan
loan paid a margin of 215bp. borrowing of the same tenor for Indian signed in June 2015. That borrowing paid
state-owned NTPC, which is wrapping up top-level all-in pricing of 145bp, based on a
YUE XIU RETURNS FOR HK$3bn LOAN general syndication. 4.75-year average life and a margin of 117bp
Mizuho, MUFG and SMBC are MLABs on over Libor. Mizuho, State Bank of India and
YUE XIU ENTERPRISES (HOLDINGS) is returning after NTPC’s ¥39.4bn (US$350m) financing, which SMBC were mandated lead arrangers and
two years for a HK3bn three-year transferable pays top-level all-in pricing of 105bp, based on bookrunners of the loan, while nine others
term loan, while its real estate subsidiary is an interest margin of 95bp over Tibor and a joined in syndication.
wrapping up a smaller borrowing. remaining weighted-average life of 10 years.
Bank of Communications, Hong Kong IRFC is returning to the loan markets after TWO ON BPRL BORROWING
branch, Bank of East Asia, Nanyang Commercial more than two years. In November 2015, it
Bank and Taipei Fubon Commercial Bank are the raised a three-year financing of US$400m to BHARAT PETRORESOURCES has mandated DBS
mandated lead arrangers, bookrunners and refinance a five-year loan closed in Bank and Standard Chartered on its five-year
underwriters of the loan, which pays an November 2013. Mizuho, MUFG and SMBC loan, after increasing the size to US$250m.
interest margin of 140bp over Hibor. were the MLABs. The borrower had sent out a request for
Lenders are being offered top-level all-in Last December, IRFC raised US$500m proposals in January for a loan of up to
pricing of 153.33bp and the senior arranger from 10-year Green dollar bonds at 3.835%. US$150m, with a greenshoe option of
title for HK$150m or more, via a It followed up in late February to sell Rs25bn US$50m.
participation fee of 40bp, or an all-in of of three-year and one-month rupee bonds, A letter of comfort from parent Bharat
150bp and the arranger title for HK$70m– priced at 7.65%. Petroleum backs the loan. Funds are for
$149m, via a fee of 30bp. capital expenditure, debt servicing for oil
Funds will be used for refinancing, general PFC HIRES TRIO FOR NEW FACILITY and gas blocks, as well as potential
corporate purpose and working capital. acquisitions or investments.
The borrower last tapped the market in State-owned POWER FINANCE CORP has Last November, the borrower, via wholly
January 2016 for a US$400m three-year bullet mandated three banks on a US$250m five- owned unit BPRL International, raised a
term loan. It offered a top-level all-in of 206bp, year loan even as it wraps up syndication of US$400m dual-tranche term loan. DBS and
based on a margin of 196bp over Libor. a US$300m borrowing with the same tenor. State Bank of India were mandated lead

LOANS ASIA-PACIFIC
arrangers and bookrunners on the loan, The loan will be repaid in five years after The guarantor is Bank of the Lao PDR, the
which comprised a US$100m five-year drawdown on March 26. The interest margin central bank of the Lao People’s Democratic
Tranche A and US$300m seven-year Tranche will step up by 100bp after five years. The Republic. BCEL’s shareholders include the
B. A handful of other lenders joined the initial margin was not disclosed. Ministry of Finance of Laos (70%) and
loan, which had the backing of a standby Japan Credit Rating Agency and Rating & Compagnie Financière de la BRED (10%), a fully
letter of credit, in syndication. Investment Information have assigned ratings owned subsidiary of France’s Groupe BPCE.
of BBB+ and BBB to the loan and are treating it
as 75% and 70% equity, respectively.
INDONESIA Funds refinance a ¥15bn 60-year hybrid MALAYSIA
facility completed in March 2014. Mizuho
TELKOM SCRAPS EURO DEBUT was mandated lead arranger on the 2014 PETRONAS WRAPS US$8bn DEAL
loan, while SMBC joined in syndication.
TELEKOMUNIKASI INDONESIA has cancelled plans Oil and gas giant PETRONAS has wrapped up a
for a €1bn loan as it no longer needs RENTAL HOUSING WRAPS UP REFI US$8bn loan for its Refinery and
acquisition financing. The loan would have Petrochemical Integrated Development
been its first in the European currency. Tokyo-listed JAPAN RENTAL HOUSING INVESTMENTS (RAPID) project, almost two years after the
Telkom was in the running to buy on Monday signed two bullet term loans financing first emerged.
London-based fibre and cloud networks totalling ¥17.4bn for refinancing purposes. Petronas has managed to lure 19 banks to
business Interoute, but lost out to US MUFG was the arranger and also an agent the loan, which has a 364-day tenor and an
network company GTT Communications, on both a ¥3bn seven-year loan, paying an extension option of six months.
which said on February 26 it would buy its interest margin of 46.25bp over one-month Lenders are Mizuho Bank Labuan branch,
European peer for €1.9bn. Tibor, and a ¥14.4bn borrowing split into Standard Chartered (Hong Kong), HSBC offshore
Seven banks are financing GTT’s four pieces with tenors ranging from six to banking unit Labuan, United Overseas BankLabuan
Interoute acquisition. eight years and margins of 43.75bp to branch, DBS Bank Labuan branch, OCBC Bank Labuan
Telkom had also sent a request for proposals 51.25bp over one-month Tibor. branch, SMBC Labuan branch, MUFG Labuan branch,
in December for a Rp7trn (US$490m) multi- Existing lenders Aozora Bank, Bank of Bank of China (Hong Kong), Bank of China (Malaysia),
tranche new-money loan. That financing is Fukuoka, Development Bank of Japan, Mizuho BNP Paribas Labuan branch, CitibankLabuan branch,
likely to close as a series of bilateral facilities Bank, Nomura Trust & Banking, Resona Bank and First Abu Dhabi Bank Singapore branch, Industrial &
with a handful of Indonesian and international SMBC joined the loan in syndication. Commercial Bank of China, ING Bank Singapore
banks. It was to comprise tenors ranging from The ¥3bn facility was drawn on March 23, branch, JP Morgan ChaseLabuan branch, Maybank
one to seven years. while the ¥14.4bn loan will be drawn on International Labuan branch, ANZ, CIMB Bank and
Meanwhile, two units of Telkom are June 22. Intesa Sanpaolo Singapore branch.
seeking separate loans totalling up to The borrower invests in rental housing Over the course of the past 21 months
US$1bn-equivalent. properties across Japan with a focus on the since June 2016 when the Malaysian
TELEKOMUNIKASI SELULAR (Telkomsel), 23 wards of Tokyo and three main bellwether initiated discussions with
Telkom’s mobile phone unit, has sent out an metropolitan areas. lenders, it has whittled down pricing on the
RFP for a multi-tranche financing up to jumbo borrowing to about 40bp over Libor.
US$900m-equivalent, while TELEKOMUNIKASI This interest margin will step up to 55bp
INDONESIA INTERNATIONAL (Telin) is reaching out LAOS over Libor after the initial 364-day period.
to banks for a US$100m debut loan. Petronas first sounded the deal at
Telkomsel’s borrowing comprises a BCEL LURES 16 LENDERS ON DEBUT US$7.2bn with an 18-month maturity and a
Rp11trn tranche and a US$20m piece, and is five-month extension option and sought all-
expected to have tenors ranging from one to State-owned BANQUE POUR LE COMMERCE EXTERIEUR pricing of around 80bp.
five years, while Telin is eyeing a loan of up LAO has allocated to 16 lenders its enlarged The loan is expected to be taken out through
to seven years. four-year debut term loan of US$150m. a combination of long-term project and export
Funds raised for both borrowers will be The facility was increased from an initial credit agency financings as well as bonds.
used for general corporate purposes. target of US$100m after the borrower PRPC Refinery and Cracker Sdn Bhd and
Telin, an Indonesian carrier services and exercised the greenshoe option. Signing will PRPC Polymers Sdn Bhd are the borrowers
investment company, is a wholly owned take place in the next few weeks. on the loan, which will have separate – not
subsidiary of Telkom. Cathay United Bank was the mandated lead joint – guarantees from Petronas and its
arranger and bookrunner on the loan, which joint venture partner Saudi Aramco.
offers an interest margin of 400bp over Libor Last October, the Middle Eastern oil giant
JAPAN and has a 3.1-year average life. Banks joining agreed to take a US$900m stake in
as MLAs were offered a top-level all-in of petrochemicals projects in the RAPID
EIGHT JOIN TOYOBO HYBRID 413bp, via a participation fee of 35bp. complex, expanding an agreement it signed
Mandated lead arrangers are Industrial & in February last year to buy a US$7bn stake
A ¥15bn (US$141m) 60-year hybrid loan for Commercial Bank of China, First Commercial Bank in the US$27bn project.
fibre and textile maker TOYOBO to refinance a and Taiwan Cooperative Bank. Lead arrangers Petronas had said at the time that the deal
hybrid facility of the same size saw eight are Bank Sinopac, FCB Leasing, Hua Nan could take up to a year to close.
lenders come aboard. Commercial Bank, Union Bank of Taiwan and BNP Paribas is the financial adviser of
The eight are Daido Life Insurance, Yuanta Commercial Bank. RAPID, which is Malaysia’s largest project
Development Bank of Japan, Mitsubishi UFJ Lease Arrangers are Bank of Panhsin, Taipei Fubon and located in Johor. It will contain a
& Finance, Mizuho Bank, SMBC, Sumitomo Mitsui Commercial Bank, Bank of Taiwan, Cathay Life 300,000 barrel-per-day oil refinery and a
Finance & Leasing, Sumitomo Mitsui Trust Bank Insurance, EnTie Commercial Bank, Grand petrochemical complex with a capacity of
and Tokyo Century. Capital International and Sunny Bank. 7.7m metric tonnes a year. Refinery

operations are set to begin in 2019, with They were joined by participants Industrial Tranche B offers a margin of 180bp–235bp
petrochemical operations to follow six to 12 & Commercial Bank of China, Kiwibank, Bank of over Libor, based on the lender’s leverage ratio.
months afterwards. China Auckland and Bank of China Sydney. The MLABs will hold Tranche A1 and have
Private-equity firm Trilogy International invited banks to join Tranches A2 and B.
TOP GLOVE SIGNS ACQUISITION LOAN Partners owns Two Degrees. Lenders get the MLA title for joining
Tranches A2 and B for US$40m and above, the
TOP GLOVE has signed a US$310m loan with lead arranger title for US$20m–$39m, and the
eight lenders to fund its proposed PHILIPPINES arranger title for US$10m–$19m. MLAs must
acquisition of a surgical glove maker. lend at least US$15m to Tranche B.
Citigroup was the sole coordinating and SMG HIRES TRIO FOR BUY LOAN Tranche A2 offers 47.5bp arrangement
underwriting bank for the debut acquisition and participation fees for US$40m or above,
financing, while Bangkok Bank, Bank of China, Conglomerate SAN MIGUEL has mandated 42.5bp for US$20m–$39m and 40bp for
BNP Paribas Malaysia, Hong Leong Bank, Mizuho Mizuho Bank, Standard Chartered and SMBC for US$10m–$19m.
Bank Malaysia, MUFG Malaysia, SMBC Malaysia a US$1.6bn five-year loan to fund its Tranche B offers 90bp arrangement and
are lenders to the facility. acquisition of an operator of power plants in participation fees for US$45m and above,
Funds are to finance the cash the Philippines. 85bp for US$30m–$44m, 80bp for US$15m–
consideration for Top Glove’s M$1.37bn The three banks have equally $29m and 75bp for US$10m–$14m.
(US$345m) purchase of Malaysian peer underwritten and pre-funded the loan. The The borrower is PUMA INTERNATIONAL
Aspion from Adventa Capital. facility’s launch into general syndication is FINANCING, while Puma Energy Holdings is
The acquisition will make Top Glove one expected in the coming weeks. the guarantor.
of the world’s largest surgical glove makers, San Miguel Group and SMC GLOBAL POWER
on top of being the largest rubber glove HOLDINGS are the borrowers. SMC Global
maker globally. Power will be the acquirer. TAIWAN
Besides the borrowing, Kuala Lumpur and On December 17, the group signed a
Singapore-listed Top Glove is also issuing share-purchase agreement with AES Phil POWERCHIP SIGNS NT$25bn LOAN
20.5m new shares on the Malaysian stock Investment and Gen Plus for their respective
exchange at M$6.6813 each to finance the 51% and 49% stakes in Masin-AES, AES POWERCHIP TECHNOLOGY has signed a NT$25bn
acquisition, the company said in early January. Corp’s 100% equity interest in AES (US$844m) five-year term loan, via original
The US$310m loan is split equally into a Transpower and AES Phil’s 100% equity mandated lead arrangers and bookrunners Chang
two-year conventional term loan and a five- interest in AES Philippine. Hwa Commercial Bank and Land Bank of Taiwan.
year Islamic financing. Masin-AES owns and operates two DBS Bank, Hua Nan Commercial Bank, Mega
The conventional facility carries a bullet 315MW coal-fired power plants, a 335MW International Commercial Bank and Taiwan
maturity and an interest margin of 82.5bp power project expansion unit, known as Cooperative Bank came in to share the MLAB
over Libor for the first 12 months before Unit 3 and under construction, and a 10MW title. Chang Hwa was the facility agent.
stepping up to 132.5bp from the 13th battery energy storage plant, all located in They were joined by participants First
month. The blended interest margin is the province of Zambales in Central Luzon. Commercial Bank, Taiwan Business Bank, Yuanta
107.5bp over Libor. The transaction gives Masin-AES an Commercial Bank, O-Bank, Taipei Fubon
The Islamic tranche has an amortising enterprise value of about US$2.4bn, while Commercial Bank, Bank of Taiwan, EnTie
repayment with an average life of 3.5 years the consideration for the entire acquisition Commercial Bank, Taishin International Bank,
and a profit rate of 125bp over Libor. is US$1.9bn. Bank SinoPac and Shin Kong Commercial Bank.
Banks joining as mandated lead arrangers The loan, split into a NT$14.2bn Tranche
and bookrunners were offered upfront fees A, a NT$4.3bn Tranche B and a NT$6.5bn
of 20bp on the conventional portion and SINGAPORE Tranche C, offers an interest margin ranging
30bp on the Islamic piece for all-in pricing from 82bp to 112bp over Taibor, based on
of 117.5bp and 133.57bp, respectively. PUMA REFINANCING HITS GENERAL the borrower’s pre-tax net profit margin,
Hong Leong Investment Bank is with a pre-tax interest rate floor of 1.7%.
transaction and principal adviser to Top PUMA ENERGY HOLDINGS, rated Ba2/BB (Moody’s/ Banks were offered a top-level upfront fee
Glove, while Credit Suisse is the sole Fitch), has launched a US$1.1175bn dual- of 25bp.
financial adviser to Adventa Capital. tranche refinancing into general The borrower’s factory and machinery
syndication. serve as security.
The mid-and-downstream oil company Funds refinance a NT$13bn loan signed
NEW ZEALAND hired ANZ, Emirates NBD, First Abu Dhabi Bank, last June, as well as help meet capital
ICBC London, ING Bank, MUFG, Natixis, Nedbank expenditure and working capital needs.
TWO DEGREES SEALS REFINANCING London, Rand Merchant Bank, Societe Generale, The borrower provides wafer-foundry
Standard Bank of South Africa and UniCredit services to semiconductor companies.
Mobile phone operator TWO DEGREES MOBILE Bank as mandated lead arrangers and
has refinanced a NZ$200m (US$144m) loan bookrunners.
for two years with existing lenders. The facility comprises a US$467.5m one- THAILAND
The two-year loan, which expires in year revolving credit Tranche A and a
January 2020, pays an opening interest US$650m three-year term loan Tranche B. SOLID DEBUT FOR CP FOODS UNIT
margin of 240bp over BKBM and a 30bp Tranche A, split further into a US$67.5m
participation fee. Tranche A1 (loans and off-balance-sheet CPF Investment, a wholly owned subsidiary
Bank of New Zealand and ING Bank, instruments) and a US$400m Tranche A2 of CHAROEN POKPHAND FOODS, has raised a five-
Singapore branch, were the mandated lead (loans), pays an interest margin of 125bp year loan of US$1bn in an impressive debut,
arrangers on the latest deal. over Libor. attracting 24 lenders in general syndication.

LOANS EMEA
Kasikornbank and Mizuho Bank were

mandated lead arrangers and bookrunners
on the loan, launched at US$350m last Private debt struggles to find
lift-off in Africa
September.
The amortising loan offers an interest
margin of 250bp over Libor and has an
average life of 3.5 years.
Banks were invited to join as lead n AFRICA Investors wary of bankruptcy regime
arrangers with US$30m or more for top-
level all-in pricing of 257.14bp, via a Private debt funds wanting to lend to African businesses to seek financing domestically or
management fee of 25bp, or as arrangers small and medium-sized enterprises are finding from development financial institutions (DFI).
with US$15m–$29m for an all-in of it hard to overcome a reluctance from investors However, DFIs face restrictions on acquisition
254.29bp, via a 15bp fee. to commit to the region because of a lack of and refinancing lines, while local banks are
The parent, CP Foods, issued a letter of confidence in the regulatory framework. restricted in terms of the amount of dollar loans
undertaking to support all repayments from In the still nascent market, many international they can provide.
CPF Investment, which is based in the investors are still wary of funds’ ability to enforce With high interest rates across Africa, many
British Virgin Islands. their rights in legal regimes that have largely business owners are turning to private debt
Funds will be used to refinance debt and/ been untested by alternative lenders. options to provide dollars as an attractive form of
or invest in the agriculture business. “People hear credit and they start to ask financing and without the need to cede control of
about bankruptcy regimes, but if you’re local the company to a private equity firm.
and you know the background then you bridge Okunbo said: “The problem is that banks
the gap of perceived risk and actual risk,” said offer loans at short tenors and in local currency
Adesuwa Okunbo, head of Africa at private debt rates above 20%. Taking a two-year loan that is
EUROPE/MIDDLE investment firm Syntaxis. amortising does not sustain growth.”
EAST/AFRICA Investors’ reluctance to commit to Africa was Furthermore, a smaller team managing a
illustrated in a recent survey of international portfolio of assets means funds can delve further
investors by the African Private Equity and into the company’s history and offer more
AUSTRIA Venture Capital Association (AVCA), which said bespoke terms compared with the banks.
they are more focused on growth, direct investing “We go to commercial banks and DFIs, but we get
RHI MAGNESITA WRAPS REFINANCING and venture capital strategies ahead of credit. the same three types of loan structures,” said Sophie
This is at a time when, on a global basis, Papasavva, a founding partner of EMFC. “What
RHI MAGNESITA, which makes heat-proof record amounts are pouring into the private comes back seems to be a copy and paste job.”
materials for blast furnaces, has signed a credit market. Last year, US$107bn was raised
€305.6m five-year revolving credit facility to by funds, according to Preqin, and the record is COMPLEMENTARY
refinance its existing €477.2m syndicated expected to be beaten again this year. Market sources estimate there are between 10
loan that was agreed in July 2017. “Progress is being made, but Africa is a few and 12 funds with a pure Africa focus active in
The financing, which matures in June years away from private debt emerging as a the middle market, dwarfed by the size of the
2023, pays an initial margin of 75bp over standalone asset class,” said Enitan Obasanjo- banking sector.
Euribor with no floor and improves the Adeleye, head of research at the AVCA. This is why many funds establish partnerships
company’s free cashflow and reduces its “Fund managers have identified the alongside banks. While funds can provide the
interest expenses. opportunity, but they need to show the track term loan and take an active involvement with
The refinanced loan was arranged to back record for private credit to become more the borrower, banks provide ancillary services
RHI’s merger with Brazilian refractory and compelling for institutional investors. More such as contingent liabilities, overdrafts and
industrial minerals firm Magnesita. will have the appetite once they can see the letters of credit.
The financing comprised €377m of term established track record,” she said. “We don’t consider ourselves a competitor to
loans and a €100m revolving credit facility, However, managers themselves are less banks. Instead we complement each other,” said
paying an average interest rate of 2.4%, optimistic about the market. A survey from Preqin Samia Tnani, head of credit origination at SFC
based on the OeKB financing rate and found that only 1% of managers think that Sub- Finance.
varying according to leverage. Saharan Africa provided the best opportunities “We offer borrowers non-standard structures,
UniCredit coordinated that financing as across the world, a drop from 6% a year before. and focus on adding value, including creating
bookrunner and mandated lead arranger an action plan to reach certain milestones. We
with Commerzbank, Erste, ING, Helaba, COPY AND PASTE remain close to companies by taking, when it is
Raiffeisen Bank International and SEB also Many commercial banks active in the region possible, an observer seat on the board for the
acting as mandated lead arrangers and have since pulled back from the continent duration of the loan,” she said.
bookrunners. following the global financial crisis, leaving small David Brooke
Banco Itau, Bank of China, IKB Deutsche
Industrie Bank, NordLB, Raiffeisenlandesbank
Oberosterreich and Santander were mandated The acquisition financing also included a VERBUND NETS FIRST DIGITAL
lead arrangers. €178m Schuldschein, which was led by Helaba. GREEN SSD
Bank fur Tirol und Vorarlberg, Deutsche Bank, The Schuldschein comprised a €63m five-
Hypo Bank Burgenland, Raiffeisenlandesbank year fixed-rate tranche paying 1.739%; an Electricity company VERBUND is issuing a
Niederosterreich-Wien and Sparkasse €89m five-year variable-rate tranche paying €100m 10-year Schuldscheindarlehen,
Oberoesterreich were lead arrangers. 160bp over Euribor; and a €26m seven-year becoming the first company to issue a Green
Austrian Control Bank OeKB also participated variable-rate tranche paying 190bp over SSD on a digital, blockchain-capable
in the financing. Euribor. platform.

Funds from the SSD will be wholly the transaction in June, adding that The LMA is working on expanding the
invested in grid renewal. the acquired units would retain the GLP to alternative models of green finance,
Helaba arranged the financing which was right to use the Telenor brand until which will allow a wider range of borrowers
launched on the VC Trade platform. mid-2021. to access alternative funding sources.
VC Trade aims to replace traditional “With this purchase, PPF Group is “The LMA will continue to work with
transaction processes with a real-time digital expanding its telecommunications portfolio market participants and other trade bodies
algorithmic-based issuance mechanism, to four more countries, and fulfilling our to expand the range of loan products that
speeding up issuance and reducing long-held goal to become a mid-sized can follow the GLP,” said Clare Dawson,
individual handling costs for all transaction European operator and to use our chief executive of the LMA.
participants. experience to strengthen our market
“This transaction is another milestone in position,” said Ladislav Bartonícek, PPF
the group’s digitisation and sustainability Group’s shareholder responsible for FRANCE
strategy for Verbund. We are a driver of telecoms assets within PPF.
innovation and see the first digital green PPF Group - which owns assets of almost MICHELIN TAPS FOR FENNER BUY
note as the logical next step after issuing the €35bn - invests across sectors including
first green bond of a company in the banking and financial services, telecoms, Tyre maker MICHELIN is backing its acquisition
German-speaking world in 2014,” Peter biotechnology, insurance, real estate and of UK-based heavy-duty conveyor belt maker
Kollmann, chief financial office of Verbund agriculture, in Europe, Russia, the US and Fenner with a £1.2bn one-year bridge loan.
said. across Asia. The loan has been fully underwritten by
Funds will be used to renew a high-voltage Morgan Stanley as bookrunner and mandated
network in Upper Austria, which is fed lead arranger.
mainly by the Aschach Danube hydropower EMEA The bridge, which has a six-month extension
plant and several wind turbines. option, will be replaced with a loan arranged by
Construction is expected to last from 2018 LMA SETS GREEN GUIDELINES Michelin’s existing syndicated banks or by
to 2021. available cash after the acquisition.
The growing market in Green loans has The loan pays an initial margin of 20bp
been formalised with a new set of Green over Libor with a zero floor. The margin
CZECH REPUBLIC Loan Principles that have been created by steps up to 30bp after six months, to 40bp
industry’s trade associations, with the after nine months, to 50bp after 12 months,
PPF NETS €3.025bn FOR TELENOR ACQN support of the International Capital Market and to 60bp after 15 months.
Association. Under market flex provisions the margin
Financial investment group PPF has secured The principles, which were launched on may only be increased by 10bp, while fees
a €3.025bn loan to back its acquisition of the Wednesday by the Loan Market Association may only be increased by 5bp.
Central and Eastern Europe assets of and the Asia Pacific Loan Market Ticking fees start at 10% of the applicable
Norwegian telecoms business Telenor for Association, create a framework of market margin after one month after the offer or
€2.8bn. standards and guidelines aimed at creating scheme press release, increasing to 20% of
The loan has been underwritten by BNP consistency across the wholesale Green loan the applicable margin after two months,
Paribas Fortis, Credit Agricole, Ceska Sporitelna, market. and to 30% of the applicable margin after
HSBC, Societe Generale and Unicredit as global The Green loan market is growing after a three months.
coordinators and mandated lead arrangers. slower start than its bond market Arrangement fees are 5bp on signing, 5bp
Societe Generale and Komercni Banka are counterpart, with increasingly large deals due 15 business days after signing, and 10bp
acting as facility agent and security agent, that take volume to around €19bn to date. due 20 business days after signing.
respectively. This contrasts sharply with a record There is also a 10bp utilisation fee on
PPF is acquiring Telenor’s mobile US$199bn of Green bond issuance in 2017 drawdown.
operators in Hungary, Bulgaria, Serbia and and a forecast of around US$130bn this year, Under the recommended all cash
Montenegro. PPF said it aimed to complete according to UniCredit. acquisition, Michelin will acquire Fenner for
French food company Danone raised a £6.10 per share, representing an enterprise
EMEA LOANS BOOKRUNNERS – FULLY €2bn Green loan in mid-February and value of £1.3bn.
SYNDICATED VOLUME Spanish utility Iberdrola raised a record The debt is consistent with Michelin’s
BOOKRUNNERS: 1/1/2018 TO DATE €5.3bn deal in late January, which was the financing policy and will preserve the
Managing No of Total Share biggest Green loan issued by a European companies A-/A3 rating.
bank or group issues US$(m) (%) company at that time. The acquisition is expected to close at the
1 SG 28 10,918.26 9.8 The GLP build on ICMA’s Green Bond end of the second quarter.
2 Deutsche Bank 21 10,540.86 9.5 Principles – voluntary guidelines that
3 BAML 15 8,601.99 7.7 recommend transparency and disclosure
4 Credit Agricole 37 7,278.39 6.6 and clarify the approach to issuing a Green GERMANY
5 BNP Paribas 37 7,096.35 6.4 bond, bringing consistency across financial
6 Goldman Sachs 11 7,045.32 6.3 markets. VW REAL ESTATE GOES GREEN
7 ING 21 5,645.50 5.1 The principles set out a framework to be
8 Citigroup 14 5,518.53 5.0 applied to deals around using and managing VOLKSWAGEN IMMOBILIEN is in the market for a
9 HSBC 19 4,583.54 4.1 proceeds, project evaluation, and selection €100m Green Schuldscheindarlehen to
10 UniCredit 25 4,103.23 3.7 and reporting, and were developed by finance its sustainable and environmentally
Total 121 111,101.42 lenders with assistance from the Association friendly projects.
Proportional credit of Corporate Treasurers, ICMA and the The financing is being arranged by ING
Source: Thomson Reuters SDC code: R17 European Banking Federation. and LBBW.

LOANS EMEA
Investors are being offered tranches of The financing was led by JP Morgan as Aegon is rated A- by S&P, A3 by Moody’s
seven, 10, 12 and 15 years. mandated lead arranger. Lenders also and A- by Fitch.
The tranches of up to 10-years are offered included Barclays, Credit Suisse, Deutsche Bank,
with variable and fixed rates of interest, Komercni banka and UniCredit Bank. JP Morgan
while the 12 and 15-year maturities are is also facility agent. OMAN
being offered exclusively with fixed rates of Real estate investor CPI Property Group
interest. focuses on long-term investments and BANK SOHAR CLOSES US$300m LOAN
Proceeds will be used for the financing or property leases, especially in Central and
refinancing of Green projects meeting Eastern Europe and Germany. The BANK SOHAR has closed a US$300m three-
guidelines and certification from the ICMA company’s shares are traded on the year term loan facility with a group of 14
Green Bond Principles and Oekom Research. Frankfurt Stock Exchange. banks from Emea and Asia.
The facility was underwritten and pre-
funded in December 2017 by Bank ABC and
IRELAND NETHERLANDS Commerzbank as initial mandated lead
arrangers and bookrunners.
GOSHAWK AVIATION LAUNCHES INTERXION SIGNS €225m RCF Axis Bank joined the facility as initial
US$300m LOAN mandated lead arranger prior to general
Data centre operator INTERXION has signed a syndication, which was launched in
Dublin-based aircraft leasing company €225m unsecured subordinated revolving January 2018.
GOSHAWK AVIATION has launched a US$300m credit facility. The loan, which pays a margin of 200bp
unsecured five-year term loan. The facility will be used for general over Libor, will be used for general funding
Agricultural Bank of China Hong Kong branch corporate and working capital purposes. purposes.
is the mandated lead arranger and Mandated lead arrangers on the financing “The loan will enhance the bank’s long-
bookrunner of the transaction, which offers are ABN AMRO and Bank of America Merrill term liquidity and extend the liability
an interest margin of 160bp over Libor. Lynch. ABN AMRO is facility agent. maturity profile to three years. This loan
Lenders are being offered a top-level all-in The facility has an initial maturity of also will enable the bank’s plan to expand
pricing of 168.5bp and the lead arranger December 2018, with the option to extend medium- and long-term assets,” said Bank
title for commitments of US$40m or more up to December 2019. Sohar’s acting CEO, Sasi Kumar.
via a participation fee of 42.5bp, an all-in of The financing pays an initial margin of Bank Sohar was last in the market in
167bp and the arranger title for US$30m– 300bp over Euribor, stepping up to 325bp June 2017 when it closed a US$250m three-
$39m via a fee of 35bp, an all-in of 165.5bp after three months, and to 350bp after six year loan with Bank ABC acting as sole
and the senior manager title for US$20m– months. There is a zero Euribor floor. bookrunner and coordinator. That facility
$29m via a 27.5bp fee, and an all-in of 164bp If the deal is extended and the company also paid a margin of 200bp.
and the manager title for US$19m or below refinances or extends €200m of existing Bank Sohar is rated Baa3 by Moody’s, BB+
via 20bp. RCFs, the facility pays 375bp over Euribor, by Fitch and BBB- by Capital Intelligence.
The borrowers are Dionysus Aviation rising to 400bp from April 2019.
Designated Activity Co and Maguey Dutch If the facility is extended and the existing
Aviation BV. The guarantor is Goshawk facilities have not been refinanced, the RUSSIA
Aviation. facility will pay 450bp from January 2019.
Funds are for general corporate purposes. Undrawn amounts pay a commitment fee CBM SIGNS US$400m LOAN
Last December, Goshawk raised a of 40% of the applicable margin.
US$100m five-year Schuldscheindarlehen CREDIT BANK OF MOSCOW has signed a US$400m
via Commerzbank and BNP Paribas. Lenders AEGON NETS €2bn REFINANCING syndicated loan with a group of banks from
were offered spreads of 160bp to 180bp on across Europe, North America, Middle East
the five-year financing. Insurer AEGON has completed the refinancing and Asia.
Goshawk manages a fleet of 114 aircraft of its existing €2bn syndicated revolving The deal, which refinances a US$500m
on lease to 41 airlines in 29 countries, credit facility. one-year syndicated loan signed in April
bringing the total fleet value to US$5.5bn. Proceeds back the company’s commercial 2017, was coordinated by ING.
Established in November 2013, the paper programme and liquidity position. ING was joined by Commerzbank and
company counts Hong Kong’s Chow Tai The financing, which matures in February Rosbank as mandated lead arrangers and
Fook Enterprises Ltd and NWS Holdings Ltd 2023, was coordinated by Bank of America bookrunners.
as equal shareholders. Merrill Lynch as bookrunner and mandated ICBC acted as senior lead arranger, while
lead arranger. Citibank, Harbin Bank, The National Bank of Ras
ABN AMRO, Barclays, BNP Paribas, Citigroup, Al Khaimah, Intesa Sanpaolo and AKA
LUXEMBOURG Deutsche Bank, Goldman Sachs, HSBC, ING, JP Ausfuhrkredit-Gesellschaft acted as lead
Morgan, Morgan Stanley, NatWest, Rabobank, arrangers. UniCredit, Credit Suisse, Landesbank
CPI AGREES €150m LOAN Royal Bank of Canada and Societe Generale were Baden-Wurttemberg and Expobank are
mandated lead arrangers. arrangers.
CPI PROPERTY GROUP has agreed a €150m two- BAML is also facility agent on the ING was also documentation and facility
year unsecured revolving credit facility. financing. agent.
CPI intends to draw and repay the facility The company also has a US$2bn letter of The facility can be extended by a further
for general corporate purposes, including credit facility that matures in 2021, as well year and will be used to finance the trade
short-term cash needs. The financing also as shorter-term bilateral backup liquidity related operations of the bank’s customers.
replaces existing facilities totalling around facilities and committed and uncommitted Credit Bank of Moscow said that pricing
€45m, which were signed in 2017. letter of credit facilities. on the new deal was lower than last year.

The original cost of the MBAC project was
Formerly detained businessmen around SR13bn (US$3.5bn), with debt

financing, agreed in 2011, of more than
in talks for loans

SR8bn.
Funding came through project financing
facilities provided by commercial banks,
n SAUDI ARABIA Alwaleed and Alhokair seek more than US$3bn Saudi Arabia’s Public Investment Fund and
the Saudi Industrial Development Fund.
Two businessmen formerly detained as part of Kingdom Holding’s plans to borrow funds for Ma’aden aims to complete the MBAC
Saudi Arabia’s anti-corruption campaign are new investments stalled last November when refinancing by the end of the second
now in talks with banks for loans for their firms in the prince was detained, indicating that the quarter.
excess of US$3bn, suggesting that bank markets crackdown had slowed down new Saudi business Last month Ma’aden Phosphate Company
are open again for those who have reached activity. sold SR3.5bn sukuk, to replace some of the
financial settlements with the government. Discussions on the SR8bn loan for Fawaz unit’s existing debt.
Saudi Prince Alwaleed bin Talal’s investment Alhokair had also started before the anti-graft
firm KINGDOM HOLDING is in talks for a loan campaign, but the financing was held up when
worth up to US$1bn. A firm belonging to Fawaz he was detained. SOUTH AFRICA
Alhokair, who was also detained, is in discussions The loan is now about to be completed. It will
with banks for a loan of around SR8bn be used to refinance existing debt and will be INVESTEC SIGNS US$300m LOAN
(US$2.13bn). provided by a group of local banks including Al
Local banks are expected to provide most of Rajhi Bank and Samba Financial Group. INVESTEC BANK has signed a US$300m two-year
the debt, while international banks appear to Kingdom Holding is working with a group of term loan, coordinated by Bank of China,
be more cautious given the lack of clarity over banks including Arab National Bank and Samba Commerzbank and Mizuho Bank. They were joined
the terms of settlements the business figures Financial Group for the new financing, which by BayernLB, Citibank, Commerzbank, HSBC, Industrial
reached with the Saudi authorities. would be backed by the company’s shares in and Commercial Bank of China, ING, JP Morgan, Lloyds
Kingdom Holding confirmed in an email to Banque Saudi Fransi. Bank, Standard Chartered Bank and MUFG as
Reuters that it has started talks again with local The planned loan has no recourse to Kingdom bookrunners and mandated lead arrangers.
and international banks in order to raise up to Holding itself. “Ultimately the financing was Commerzbank was also documentation
US$1bn. never dependent on the credit worthiness of agent and BayernLB was facility agent.
Mohammed Ahmed Abbaoui, chief financial Alwaleed himself, the loan was always going to The facility, which includes a 12-month
officer of Alkohair’s retail firm Fawaz Abdulaziz be secured against the shares in Saudi Fransi extension option at the borrowers
Alhokair, which is traded on the Saudi bourse, and probably some top-up shares in Citigroup. discretion, will be used for general corporate
said the publicly listed company was not seeking But with him in detention, banks put everything purposes including the refinancing of the
the loans, but they were being sought on behalf on hold, obviously,” one source said. remaining balance of the US$635m term
of an unlisted firm also owned by Alhokair. He Alwaleed is a longstanding major shareholder loan facility signed in April 2016.
declined to comment further. in Citigroup. The syndication was launched to a targeted
Saudi Arabia’s Crown Prince Mohammed Two bankers working in the region at group of existing relationship banks and
bin Salman launched a sweeping anti-graft international banks said, however, that too many closed oversubscribed. Despite raising a
crackdown last November, arresting dozens of questions have remained unanswered regarding substantial amount in syndication, Investec
princes, senior officials and top businessmen Prince Alwaleed’s release and his financial chose not to increase the transaction owing
accused of crimes such as money laundering, settlement, and that international lenders to their strong liquidity position.
bribing and extorting officials. are likely to be more cautious than their local Investec Bank was last in the market in
Saudi officials said earlier this year that counterparts in dealing with Kingdom Holding. January when it closed a US$450m term
several detained businessmen had reached “Further clarity is still required about the loan with a group of 25 new and existing
financial settlements with the government future. The only thing I know is that they might lenders from North America, Europe and
amounting to over US$100bn in total. Among split the assets into two. That’s not enough Asia. Bank of America Merrill Lynch, Lloyds
them were prince Alwaleed – Saudi Arabia’s information to convince me to lend,” one of them Bank and Standard Chartered Bank were
most prominent business figure – and Alhokair, said. joint coordinators for that loan.
released from detention at the end of January. Davide Barbuscia, Tom Arnold, Marwa Rashad
UAE
refinancing facility expected to be
SAUDI ARABIA denominated in riyals and US dollars. DUBAI METRO LOAN SIGNED
Sources said the transaction was expected
MA’ADEN APPROACHES BANKS to be in the region of US$1bn but it had not The government of DUBAI has completed a
been finalised. project financing worth about US$2.45bn
SAUDI ARABIAN MINING COMPANY(Ma’aden) is MBAC, which is 74.9% owned by Ma’aden for the extension of the city’s metro rail
seeking to refinance around US$1bn of and 25.1% by Alcoa, was set up in 2009 and is system.
bank debt raised for subsidiary Ma’aden one of three ventures owned jointly by the The project envisages a 15km extension
Bauxite and Alumina Company, Reuters companies through which Ma’aden carries of the Dubai Metro’s Red Line, from Nakheel
reported. out its aluminium operations. Harbour and Tower station up to the site of
State-controlled Ma’aden has hired BNP The other two subsidiaries, as well as the World Expo, which the city will host in
Paribas and National Commercial Bank to advise other parts of Ma’aden’s business, have 2020.
it on the fundraising and has been in talks raised financing through various debt The metro extension is one of a number
with banks over recent weeks for a instruments over the past few years. of significant infrastructure projects linked

LOANS EMEA
to the development of the Expo exhibition secured notes totalling approximately

centre. US$1.2bn that mature in December 2021. UK
Dubai is also expanding the Al Maktoum Metinvest is expected to refinance the
International Airport, for which it US$1.2bn bonds with new five-year and HAMMERSON SIGNS £1.5bn LOAN
borrowed US$3bn last year and on which it eight-year tranches of notes.
plans to invest roughly US$35bn in total. With regard to the bank debt, Metinvest Shopping centre owner HAMMERSON has
The metro extension financing intends to repay 20% of the existing loan signed a £1.5bn three-year revolving credit
comprises a US$1.42bn 17-year loan upfront and swap up to US$300m of that facility that will be used to refinance near-
backed by guarantees provided by French facility into the new notes, on a non-cash term debt of Intu, which Hammerson
and the Spanish export credit agencies, basis. agreed to acquire in December.
and a US$1.1bn 10-year loan provided by “So many banks sold their debt to The unsecured financing was been agreed
commercial banks. distressed investors prior to the with 12 of Hammerson’s relationship banks
Banco Santander, First Abu Dhabi Bank, restructuring. These investors may not coordinated by MUFG.
HSBC Middle East, Intesa Sanpaolo and want to go into the new PXF and they Bank of China, Barclays, BNP Paribas, Deutsche
Standard Chartered Bank arranged and might transfer to the bond,” a banker said. Bank, HSBC, JP Morgan, Lloyds Bank, Mizuho Bank,
provided the financing. The new PXF will include a 14-month NatWest, Santander, MUFG and Wells Fargo are
The loan guaranteed by the agencies maturity extension to October 2022, as bookrunners and mandated lead arrangers on
amortises over a 14-year period starting in well as the release of the cash sweep the financing. HSBC is facility agent.
2020, while the conventional loan mechanism and the common security. It The loan pays an initial margin of 100bp
amortises over a six-year period starting in will also include a different set of over Libor.
2022. covenants including removing the “This new facility supports our
limitation on dividends, allowing the acquisition of Intu and is illustrative of the
company to distribute up to 50% of net future refinancing opportunities in
UKRAINE income once 35% of the PXF is repaid. bringing Intu’s secured debt structure onto
Deutsche Bank, ING, Natixis and Unicredit Hammerson’s unsecured debt platform,”
METINVEST CLOSE TO REFINANCING have MLA roles on the loan. said Hammerson group treasurer Richard
The completion of the refinancing is Sharp.
Metals and mining group METINVEST is subject to consent from debtholders, Intu has around £1.487bn of near-term
expected next month to complete a including 75% of noteholders. Following maturities, including a £160m convertible
refinancing of its US$2.3bn debt that was the transaction, the notes and the PXF will bond maturing in 2018, a £352m secured
put in place as part of the company’s debt rank pari passu. group structure bank loan maturing in 2021,
restructuring in March 2017. Metinvest has benefited from a rise in a £600m revolving credit facility maturing
Following the restructuring, Metinvest’s iron ore prices over the past six months and in 2021, and a £375m convertible bond
debt comprises one pre-export financing of in its 2017 financial results published on maturing in 2022.
around US$1.1bn that matures in June March 19 the group reported a 44% increase The annual interest cost for those loans is
2021 and pays 416bp over Libor, and senior in revenue year-on-year to US$8.9bn. around £38.5m.
Mothercare and Carpetright seek loan

amendments
n UK Latest example of struggling bricks and mortar retail
MOTHERCARE and CARPETRIGHT are looking The financing includes an accordion facility The company also intends to raise
to amend bank loans, the latest sign that allowing the company to drawdown up to £75m. £40m-£60m through an equity issue to reduce
pressure continues to mount on the UK The facility pays a margin ranging from debt, cover the cost of the CVA and fund the
retail sector as consumers rein in high street 200bp to 300bp over Libor. company’s on-going strategy.
spending. Meanwhile, Carpetright is also seeking Carpetright has a £45m revolving credit
Baby and child product retailer Mothercare to amend its existing bank loans, including facility maturing at the end of July 2019 and
has agreed to defer the March 24 testing the relaxation of covenants and extension of annually renewable overdraft facilities of £7.5m
date of its financial covenants as it continues maturities as it looks to turnaround its business in the UK and €2.4m in the rest of Europe. The
discussions with its lenders over the terms of and strengthen its balance sheet. revolver pays an effective interest rate of 3.5%
the existing bank facilities. The company has agreed a £12.5m while the overdraft facilities pay 4%.
The company also said it is in talks over shareholder loan with Meditor Master Fund NatWest is Carpetright’s principal banker.
securing additional sources of financing to to provide it with short-term working capital. Earlier this month UK fashion retailer NEW
support its transformation programme. The unsecured financing matures at the end of LOOK sought a CVA that could include the
Mothercare has a £62.5m revolving credit August and pays 3% interest. potential closure of 60 out of its 593 stores and
facility from HSBC and Barclays, comprising Carpetright is also looking at a possible a reduction in rental costs and revised lease
a £50m tranche maturing in May 2020, with company voluntary arrangement to help terms across 393 stores.
two one-year extension options; and a £12.5m rationalise its property portfolio. The company received consent for a default
tranche maturing in November 2018, with two The loan amendments are expected to be waiver on its high-yield bonds.
six-month extension options. conditional on approval of the CVA. Alasdair Reilly

Under the new financing annual interest existing overdraft facilities, provide Scripts’ US$15bn debt, is the latest tie-up
costs are estimated to be £23.4m. additional working capital and support aimed at cutting costs and fending off
contract wins. potential competition from companies
ED&F MAN GETS US$1.128bn REFI The facility has a bullet repayment at including online retailer Amazon.
maturity. Changes to the Affordable Care Act,
Agricultural commodities and brokerage A US$208.5m tranche, which will be drug distribution threats from Amazon,
group ED&F MAN has closed US$1.128bn of used to finance new acquisitions, includes and the merger between US drugstore
revolving credit facilities with a group of a US$35m Islamic murabaha facility has an operator CVS Health and health insurer
27 international banks. 18-month grace period followed by the Aetna are leading companies in the
ED&F Man started talks over the repayment of 67.72% of the loan in semi- healthcare sector to consolidate to expand
refinancing in December after reporting a annual instalments and a final payment of their reach and competitiveness.
pretax loss of US$144.6m, Reuters reported, the remaining 31.28% at maturity. Cigna is rated Baa1 by Moody’s, A by S&P
citing significant under-performance in the The remaining loan has an 18-month and BBB+ by Fitch.
sugar and grains businesses. grace period followed by the repayment of All three agencies warned that they
The new facilities, which will be used 75.25% of the loan in semi-annual could downgrade their ratings because of
for general corporate purposes, comprise a instalments and a final payment of the the added debt taken on with the
364-day RCF; a three-year RCF remaining 24.75% at maturity. acquisition.
incorporating a US dollar swingline; and a Bank of America Merrill Lynch and the
364-day RCF for ED&F Man’s brokerage European Bank for Reconstruction and BAML BACKS SALESFORCE
business that was provided by a select Development arranged the financing, which
number of lenders. saw the participation of 11 multi-lateral, Software maker SALESFORCE.COM has lined
The financing was led by BNP Paribas, regional and local banks. EFG Hermes up commitments for a US$3bn bridge loan
Rabobank and ING Bank as bookrunners and Investment Banking acted as the ADES’ facility from Bank of America Merrill Lynch to
mandated lead arranger with Banco do financial adviser. support its acquisition of US software
Brasil as senior early bird mandated lead ADES, which completed its IPO in May maker MuleSoft.
arranger. 2017, had a US$170m five-year loan The acquisition is for an enterprise value
ABN AMRO, HSBC, Natixis, Nedbank, arranged in November 2015 by the EBRD. of US$6.5bn. MuleSoft shareholders would
Raiffeisen Bank International, Societe Generale That loan comprised a conventional and get US$36 in cash and 0.0711 of a
and Standard Chartered Bank are early bird murabaha facility. The conventional loan Salesforce share for each share.
mandated lead arrangers. paid 450bp over Libor, while the Islamic Salesforce said it expects to fund the
After the refinancing ED&F Man will tranche paid a mark-up equivalent to the cash portion from its balance sheet and
have total committed funds of over conventional interest rate. about US$3bn in proceeds from term loans
US$2.4bn, including existing committed In addition, the company had a US$55m and/or the issuance of debt securities, with
facilities and medium term note five-year syndicated loan arranged by EFG the mix hinging on market conditions.
programme. Hermes in October 2016. That loan paid The transaction is not subject to any
ED&F Man agreed an around US$2.1bn 550bp over Libor. financing condition.
loan financing in March 2017 to refinance ADES also had overdraft facilities from BAML is exclusive financial advisor to
its existing loans. Egyptian Gulf Bank and Arab International Salesforce. Goldman Sachs is exclusive
That financing comprised a US$1.49bn Bank. financial advisor to MuleSoft.
one-year revolving credit facility and a
US$606m three-year RCF. APACHE AGREES REVOLVER
ADES INTL SIGNS US$450m LOAN Oil and gas exploration and production
NORTH AMERICA company APACHE CORP has agreed a US$4bn
London-listed oil and gas services company five-year revolving credit facility that can
ADES INTERNATIONAL has signed a US$450m be increased to US$5bn.
syndicated loan to provide the company UNITED STATES The company can twice request that the
with flexibility to make further acquisitions March 14 2023 maturity date be extended
in line with its post-IPO growth strategy. CIGNA FINANCING DETAILED for one-year periods.
The financing will also be used to JP Morgan is administrative agent and
refinance the company’s existing debt and Health insurer CIGNA’s US$52bn acquisition joint lead arranger and joint bookrunner
finance future working capital. of Express Scripts Holding is expected to along with Bank of America Merrill Lynch,
ADES provides offshore and onshore oil be backed by a US$23.7bn 364-day bridge Citigroup, RBC, HSBC, MUFG, Wells Fargo,
and gas drilling and production services in loan, a US$3bn three-year term loan and a Goldman Sachs, TD Securities and Mizuho.
the Middle East and Africa through its US$3.25bn five-year revolver. With the new funds, the company
subsidiaries, Cigna said on March 8 that it had terminates existing US$3.5bn and £900m
The five-year loan includes a US$200m obtained committed debt financing from commitments under two syndicated
tranche to refinance ADES’ existing loans. Morgan Stanley and MUFG for the merger, facilities.
The facility has an 18-month grace period and on March 9 said it was supporting the The new US$4bn revolver includes a
followed by the repayment of 75.25% of the purchase with a US$26.7bn 364-day senior letter of credit subfacility of up to US$3bn,
loan in semi-annual instalments and a final unsecured bridge term loan facility. of which US$2.08bn is currently
payment of the remaining 24.75% at The insurer said it would back the cash committed.
maturity. portion with cash on hand, Express Scripts Proceeds will be used for general
There is also a US$41.5m tranche that debt and new debt issuance. The merger, corporate purposes. Committed
will be used to refinance the company’s valued at about US$67bn including Express borrowings support the company’s

LOANS NORTH AMERICA
US$3.5bn commercial paper program. 17.5bp; and for BB+/Ba1 it is 140bp and The financing comprises a £7.7bn
Current pricing is 107.5bp over Libor 22.5bp. tranche that matures 364 days after the
with a 17.5bp facility fee. Tyson Foods is rated Baa2 by Moody’s and closing of the acquisition and a £4.5bn
Apache is rated Baa3 by Moody’s and BBB by S&P. tranche that matures 180 days after
BBB by S&P. closing.
AMERICAN WATER INCREASES RCF
GENERAL DYNAMICS GETS US$7.5bn RCF
AMERICAN WATER CAPITAL CORP has amended its
GENERAL DYNAMICS has sealed a US$7.5bn revolving credit facility to extend the
364-day revolving credit facility, to be used maturity and increase total commitments to LATIN AMERICA
for general corporate purposes including US$2.25bn from US$1.75bn.
the company’s planned merger with CSRA Wells Fargo, JP Morgan, Mizuho, PNC Bank
Inc. and US Bank led the deal. BRAZIL
The US defence contractor raised its They were joined by BAML, RBC, MUFG, TD,
offer to buy CSRA to US$9.7bn, including BB&T, Regions, CoBank and BNY Mellon. SUZANO TAPS FOR US$9.2bn LOAN
US$2.8bn of debt, as a way to thwart an The facility, which primarily supports a
unsolicited bid from CACI International commercial paper program, has a US$150m Pulp and paper company SUZANO PAPEL E
Inc. sub-limit for letters of credit. CELULOSE is backing its acquisition of Fibria
General Dynamics’ offer now represents The revolving facility’s maturity was Celulose with a US$9.2bn syndicated loan
an equity value of US$6.9bn for the extended to March 2023 from June 2020, to cover the R$29bn (US$8.8bn) cash part
provider of information technology and and can be extended for two one-year of the offer.
related services to the US defence periods. Under the offer Fibria shareholders will
department, up from its previous In conjunction with the commitments receive 0.4611 Suzano shares and R$52.50
US$6.8bn offer. increase, the company said it also increased in cash per share tendered.
JP Morgan is administrative agent for the its commercial paper program to a Proceeds will also finance the exports of
revolver. JP Morgan, Wells Fargo, Bank of maximum of US$2.1bn from US$1.6bn both companies.
America Merrill Lynch and RBC are joint lead previously. As of Wednesday, there was The financing, which is led by BNP
arrangers and joint bookrunners. US$1.183bn of commercial paper Paribas, JP Morgan, Mizuho and Rabobank,
The commitments will not be reduced outstanding. comprises a US$6.9bn three-year facility
below US$2bn. Pricing is linked to ratings. For AA-/Aa3 and a US$2.3bn six-year facility.
The lead banks were joined by BBVA, the margin is 69bp over Libor and the The three-year loan pays 116bp-133bp
Lloyds, Mizuho and MUFG. facility fee is 6bp; for A+/A1 it is 80bp and over Libor, while the six-year loan pays
Advances will be made in US dollars in 7.5bp; for A/A2 it is 90bp and 10bp; for A-/A3 165bp-175bp over.
the case of floating-rate funds, or in US it is 100bp and 12.5bp; and for BBB+/Baa1 it Suzano is targeting long-term leverage
dollars, British sterling, Canadian dollars, is 107.5bp and 17.5bp. of 2.0-3.0 times backed with strong cash
Swiss francs, euros or other currencies as American Water Capital Corp is the generation and a focus on an investment-
General Dynamics may request in case of finance subsidiary of American Water grade rating.
other advances. Works Co, which is rated A3 by Moody’s and Under the merger, Suzano will become
Pricing is linked to ratings. For Aa3/AA- A by S&P. controlling shareholder of the combined
it is 55bp over Libor with a 2bp company with a 46.4% stake, while Fibria’s
commitment fee; for Aa3/AA- it is 62.5bp 21ST CENTURY FOX REPLACES BAML existing controlling shareholders,
and 3bp; and for lower than that it is 75bp development bank BNDES and
and 4bp. Rupert Murdoch’s TWENTY-FIRST CENTURY FOX Votorantim, will hold stakes of 11.1% and
The company is rated A2 by Moody’s and has changed the group of banks lined up to 5.6%, respectively.
A+ by S&P. help finance its proposed takeover of
European pay-TV company Sky, replacing
TYSON FOODS UPS RCF TO US$1.75bn Bank of America with Citibank.
The company said on Friday it had AMERICAS LOANS BOOKRUNNERS – FULLY
TYSON FOODS has extended its five-year requested the change because Merrill Lynch, SYNDICATED VOLUME
revolving credit facility and increased the part of Bank of America, is an adviser to US BOOKRUNNERS: 1/1/2018 TO DATE
loan to US$1.75bn from US$1.5bn. cable company Comcast, which has Managing No of Total Share
The revolver matures in March 2023 and gatecrashed Fox’s agreed offer for Sky with a bank or group issues US$(m) (%)
the company has the option of twice rival US$31bn bid. 1 BAML 225 64,165.84 13.6
extending for a year. Twenty-First Century Fox is backing its 2 JP Morgan 184 51,359.48 10.9
Proceeds will be used for general bid for Sky with a £12.2bn bridge loan 3 Wells Fargo 162 37,835.20 8.0
corporate purposes. originally arranged by Deutsche Bank, 4 Citigroup 98 34,528.41 7.3
JP Morgan leads, joined by Barclays, Bank Goldman Sachs and JP Morgan in December 5 Barclays 78 19,993.39 4.3
of America Merrill Lynch, Morgan Stanley, 2016. Both Bank of America and Citibank 6 Credit Suisse 76 19,596.08 4.2
Cobank, Rabobank and RBC as joint lead were additional lenders to the financing and 7 RBC 74 18,519.61 3.9
arrangers and joint lead managers. Citi has doubled its commitment to cover 8 Goldman Sachs 73 17,080.39 3.6
Pricing is linked to ratings. For A-/A3 the BAML’s commitment. 9 Deutsche Bank 69 16,747.69 3.6
margin is 91bp over Libor and the facility Under the change, Citibank’s 10 Scotiabank 40 13,332.04 2.8
fee is 9bp; for BBB+/Baa1 it is 102.5bp and commitment to the financing will total Total 711 470,359.29
10bp; for BBB/Baa2 it is 112.5bp and £3.05bn, the same level as the arranging Proportional credit
12.5bp; for BBB-/Baa3 it is 120bp and banks. Source: Thomson Reuters SDC code: R7

The company is looking to reprice the Greeting card and stationer AMERICAN
existing term loan to 350bp over Libor with GREETINGS outlined price talk, timing and
LEVERAGED LOANS a 0% floor. The incremental loan is guided at credit ratings for the US$695m loan that will
the same level. fund private equity firm Clayton, Dubilier &
The existing loan is offered at par, while Rice’s purchase of a 60% ownership stake in
UNITED STATES the new money, which is fungible with the the company.
term loan, is offered at a 99.5 issue price. Lead left Barclays is arranging with
AIRXCEL BACKED BY US$540m LOANS Soft call protection at 101 is in place for Deutsche Bank, Citizens Bank, ING, Bank of
six months. America Merrill Lynch, HSBC, SMBC, KeyBanc
Climate control products manufacturer Plaskolite is also increasing the size of its Capital Markets and CIBC.
AIRXCEL’s leveraged buyout by private equity revolver by US$20m to US$60m, while the Pricing of 375bp over Libor with a 1%
firm L Catterton will be backed by US$540m second-lien term loan is increasing by Libor floor and 99.5 OID are expected.
in loans. US$40.5m to US$160.5m. There will be 101 soft call protection for
L Catterton is acquiring Airxcel from Second-lien pricing is expected to six months.
private equity owner One Rock Capital decrease to 800bp over Libor from 900bp. Corporate ratings are B2/B and term loan
Partners, which has owned the company Proceeds from the incremental loan and ratings are Ba3/B+.
since 2014. the increased second-lien loan will be used The deal comprises a US$250m revolver
The financing is structured as a US$360m to fund several near-term acquisitions and a and a US$445m term loan B.
secured term loan with a first priority claim shareholder distribution. Technology provider CDW launched a
and a US$120m secured term loan with a Antares Capital leads with KeyBanc Capital US$1.47bn term loan B via Morgan Stanley,
second priority claim. Markets as joint lead arranger. Barclays, JP Morgan, BAML, Wells Fargo, MUFG,
The debt package will include a US$60m Power generator AES CORP is repricing its Capital One, Goldman Sachs, RBC Capital Markets
asset-based revolving credit facility, which existing roughly US$521m senior secured and US Bank.
will be undrawn at close. term loan B due May 2022. Barclays leads the Proceeds from the loan will be used to
Jefferies, Morgan Stanley and Citizens Capital transaction. reprice the company’s existing term loan B
Markets are providing the debt commitments. The company is looking to reprice the due 2023.
Jefferies will lead the senior loan and Morgan loan to 175bp over Libor with a 0% floor, The loan is guided at 175bp over Libor
Stanley will lead the junior loan. offered at par. Existing pricing is 200bp over with a 0% floor. The loan is offered at par. It
Syndication is expected to launch by mid- Libor with a 0.75% floor. is expected to have 101 soft call protection
April. The deal also resets 101 soft call for six months and to amortise at an annual
L Catterton is paying roughly US$640m protection for six months, and the loan will rate of 1%.
for Airxcel, eight times its last 12-months’ now mature on May 31 2022 versus the The company’s existing loan was repriced
Ebitda. existing May 24 2022 date. in February 2017 to 200bp over Libor with a
The company will be capitalised with around The repricing excludes the pending 0.25% 0% Libor floor.
US$180m of equity, including a new cash equity amortisation on March 29 2018. In August 2016, CDW extended the
contribution from L Catterton and rollover Senior secured pro forma leverage will be maturity of the loan to 2023 from 2020 and
amounts from the existing shareholders. 0.8 times and 4.3 times total. cut the Libor floor to 0.75%. The spread was
The debt will bring leverage to 4.5 times Corporate family ratings are Ba2/BB+. 225bp over Libor.
through the senior tranche and 6.0 times Senior secured debt ratings are Ba1/BBB-. Corporate ratings are Ba2/BB+. Facility
total. ratings are Ba1/BBB-.
Plastics manufacturer PLASKOLITE is in the PRICE TALK FOR INOVALON
market with a transaction that reprices its PLY GEM SEEKS US$1.755bn
existing US$374m term loan and raises Price guidance has emerged for healthcare
US$246m in incremental term loan debt. data analytics company INOVALON HOLDINGS’ Building products maker PLY GEM HOLDINGS,
Pro forma the transaction, the term loan US$1.08bn senior credit facility backing a which in January agreed to be acquired by
will be approximately US$620m in size. The portion of its acquisition of Ability Network, private equity firm Clayton, Dubilier & Rice,
maturity is unchanged at November 3 2022. a provider of information technology. is in the market with a US$1.755bn
The deal comprises a US$100m five-year acquisition loan.
US LEVERAGED LOANS revolver and a US$980m seven-year term JP Morgan leads the seven-year term
BOOKRUNNERS: 1/1/2018 TO DATE loan B. loan B.
Managing No of Total Share Pricing for both tranches is in the 275bp- CD&R will combine the company with
bank or group issues US$(m) (%) 300bp over Libor range with a 0% floor. The Atrium Windows & Doors.
1 BAML 126 26,685.88 12.5 term loan B has a 99.5 OID, 101 soft call The loan is expected to price in the 300bp-
2 JP Morgan 104 20,018.92 9.4 protection for six months and amortises at 325bp over Libor range with a 0% Libor floor
3 Credit Suisse 69 17,210.54 8.1 1% annually. at a 99.5 discount.
4 Wells Fargo 83 14,044.79 6.6 The revolver has a springing leverage There will be 101 soft call protection for
5 Goldman Sachs 64 13,832.54 6.5 covenant. The term loan is covenant-lite. six months.
6 Citigroup 51 13,057.59 6.1 Inovalon is buying Ability for US$1.2bn, Corporate and facility ratings are B2/B.
7 Deutsche Bank 60 11,701.86 5.5 including US$1.1bn in cash and US$100m in Canadian gaming and online gambling
8 Barclays 59 11,677.64 5.5 restricted Inovalon stock. company THE STARS GROUP launched an
9 Morgan Stanley 51 8,960.58 4.2 Proceeds will also be used to refinance amendment to reprice and extend the
10 RBC 42 6,201.31 2.9 Inovalon and Ability debt and pay related maturity of its existing covenant-lite
Total 409 213,495.19 fees and costs. US$2.37bn-equivalent first-lien term loan
Excluding Project Finance. Morgan Stanley, Citigroup, Goldman Sachs due in 2021, alongside a US$425m-
Source: Thomson Reuters SDC code: P2 and JP Morgan are leading the deal. equivalent add-on to the facility.

LOANS LEVERAGED LOANS
Deutsche Bank leads with Macquarie. The company is offering to pay lenders DUFF & PHELPS DETAILS ADD-ON
The company is seeking to increase its 425bp-450bp over Libor with a 1% floor and
existing US$1.896bn TLB by US$300m and a 99.5 OID. The deal has 101 soft call Corporate financial adviser DUFF & PHELPS
US$474m-equivalent euro-denominated protection for six months. has set price talk on a US$300m add-on
TLB to US$599m-equivalent. It is asking Vyaire is also seeking a US$90m second- loan backing its purchase of risk
lenders to extend the maturity of the lien term loan. management and cybersecurity services
tranches to 2025 from 2021. Bank of America Merrill Lynch, RBC, ING, company Kroll.
Guidance on the dollar tranche is 300bp- Natixis and Mizuho are arranging the UBS and Goldman Sachs are leading the
325bp over Libor with a 0% floor. Existing financing, which will also be used to deal.
pricing is 350bp over Libor with a 1% floor. finance contemplated acquisitions. The add-on is fungible with the existing
Guidance on the euro tranche is 325bp- SHAPE TECHNOLOGIES set price guidance on loan at 325bp over Libor with a 1% floor
350bp over Euribor with a 0% floor. Existing a US$300m covenant-lite refinancing loan. and a 101 soft call that rolls off on August
pricing is 375bp over Euribor with a 0% floor. The seven-year first-lien loan is guided at 13. It is offered at 99.5.
Both tranches are offered at 99.75 325bp-350bp over Libor with a 0% floor. Private equity firm Permira Funds in
discount. The loan is offered at a 99.5 OID and has November agreed to acquire Duff & Phelps
Lenders who extend via a cashless roll 101 soft call protection for six months. from an investor group led by The Carlyle
will receive a 25bp fee in lieu of the Credit Suisse leads along with Deutsche Group for US$1.75bn.
discount. Bank and Barclays. Proceeds from the loan Insurance brokerage ASSUREDPARTNERS
The tranches will includes six months of will be used to refinance existing debt. has launched a repricing of its US$1.268bn
soft call protection at 101. Corporate family and facility ratings are term loan B4 along with a US$250m
Proceeds from the US$425m add-on, B2/B. add-on.
balance sheet cash and US$85m of new In 2013, American Industrial Partners Bank of America Merrill Lynch leads with
issued common shares to be issued, will be purchased KMT Waterjet to form Shape Barclays, JP Morgan, Morgan Stanley, RBC and
used to fund the acquisition of 80% of Technologies and later added companies Macquarie.
CrownBet Holdings and William Hill including waterjet technologies business Guidance on the entire US$1.518bn
Australia Holdings, repay the company’s Flow. Shape, along with strategic partners, tranche is 300bp over Libor with a 0% floor,
existing US$95m second-lien term loan provides manufacturing process services. compared with existing pricing of 350bp
due in 2022 and cover related fees and Infrastructure software company ROCKET over Libor with a 0% floor.
expenses, according to Moody’s. SOFTWARE is in the market with a US$667m Existing lenders are offered the debt at
The financing includes a US$300m term loan repricing and an US$85m 99.875-100, while new lenders are offered
revolving credit facility due in 2023. incremental loan via Credit Suisse. the debt at 99.75-99.75.
Ratings are B2/B+ corporate and facility. Proceeds from the loans will be used to The debt will mature in October 2024, in
Alternative asset manager GROSVENOR reprice existing first-lien term debt and line with the existing term loan B4, and
CAPITAL MANAGEMENT is in the market with an finance tuck-in acquisitions. includes six months of soft call protection
amendment to extend the maturity of its Pricing on both tranches is guided at a at 101.
covenant-lite US$466m term loan B due in range of 375bp-400bp over Libor with a 1% Proceeds from the incremental loan will
August 2023 by 18 months. floor. The existing spread on the existing be used to pay down borrowings under the
The company is asking lenders to push loan is 425bp over Libor. revolving credit facility, fund acquisitions
out the maturity of the term loan B to There is no discount on the existing expected to be completed before the
March 2025 from August 2023. loan, while the new money is expected to transaction closes, and reset liquidity for
Guidance is 275bp-300bp over Libor be issued at a 99.5 discount. The future acquisitions.
with a 1% floor. The Goldman Sachs-led loan transaction also resets 101 soft call for six Existing ratings are B3/B corporate and
is offered at a 99.5 discount. months. B2/B first-lien.
Lenders will receive a six-month reset of Both the existing loan and the Beverage products maker TRILLIANT is
their 101 soft call protection. incremental will mature in October 2023. repricing its covenant-lite US$270m term
The amendment will also cover an 18- TRAVELCLICK launched a US$446m first- loan B due in September 2024. Wells Fargo
month extension of the maturity of the lien term loan repricing and a US$34m leads.
company’s $50m revolving credit facility incremental term loan via Credit Suisse. Price talk is 325bp-350bp over Libor
due in August 2021 to March 2023. Both loans, due May 6 2021, are guided with a 25bp stepdown when the corporate
Private equity firm Hellman & Friedman at 325bp-350bp over Libor with a 1% floor family rating is revised to B2/B or greater
owns 29% of the company, while the and 101 soft call protection for six months. with stable outlooks and a 1% floor.
remaining 71% is owned by Grosvenor The existing loan is offered at par, while Existing pricing is 400bp over Libor with a
employees. the new money is offered at a 99.75 OID. 1% floor.
The transaction will be leverage neutral, Proceeds from the loans will reprice the The loan is offered at par with six
with net leverage remaining at 2.8 times, company’s existing first-lien term loan and months of soft call protection at 101. It
based on roughly US$369m of net debt and repay a portion of the company’s second- amortises at 1% per year.
US$134m 2017 consolidated Ebitda. lien facility. The loan documents require 100% of net
The company raised in April 2017 proceeds from asset sales and non-
VYAIRE MARKETS US$360m TL US$450m of first-lien debt, including a permitted debt issuance to be used for
US$385m first-lien term loan and a US$65 prepayment, with a stepdown to 75% if
Medical device company VYAIRE MEDICAL set incremental first-lien loan. The loans first-lien leverage is less than 4.0 times.
price talk on a US$360m seven-year term priced at 400bp over Libor with a 1% Libor The loan also requires a 50% excess cash
loan to fund sponsor Apax’s acquisition of floor. flow sweep that steps down to 25% when
the existing minority shareholder’s stake in TravelClick provides marketing and first-lien net leverage reaches 4.0 times
the company. reservation technology to hotels. and to 0% when first-lien net leverage falls

to 3.5 times, at which point the sweep will proceeds will be used for additional trading Bank of America Merrill Lynch leads with
be automatically reduced by US$5m. capital and general corporate purposes. Barclays, Deutsche Bank, Credit Suisse, Goldman
Ratings are B3/B- corporate and facility. Ratings are Ba2/BB- corporate and Sachs, Wells Fargo, SunTrust, Scotia, MUFG and
facility. US Bank.
LIONS GATE REVISES REFINANCING Global resort developer LAS VEGAS SANDS The seven-year covenant-lite loan is
has repriced its US$2.16bn term loan B due guided at 200bp over Libor with a 0% floor
Film studio LIONS GATE made changes to the in March 2024. and 99.75 OID.
amendment allowing for the retranching, Scotiabank led with Bank of America Merrill Lenders will receive six months of soft
maturity extension and relocation of its Lynch, Barclays, BNP Paribas, Citigroup, Fifth call protection at 101.
existing credit facility. JP Morgan led the Third and Goldman Sachs. Wyndham has reached an agreement to
deal. The repricing amendment now includes acquire La Quinta’s hotel franchise and
The company originally sought to a one-year extension of the maturity of the hotel management business for US$1.95bn
increase its US$1bn revolver due in 2021 loan to March 2025. in cash, including US$715m of La Quinta
by US$500m to US$1.5bn, reduce its The loan priced at 175bp over Libor with debt.
US$950m term loan A due in 2021 by a 0% floor, in line with guidance, versus Ratings are Ba1/BB+ corporate and Baa3/
US$450m to US$500m and upsize its previous pricing of 200bp with a 0% floor. BBB- facility.
US$825m term loan B due in 2023 by It sold at par, at the tight end of 99.75-
US$200m to US$1.025bn. par guidance. GI READIES US$615m LOAN
The TLA has now been cut by just Lenders will receive six months of soft
US$200m to US$750m while the TLB was call protection at 101. GI Partners, a private investment firm, is
increased by US$425m to US$1.25bn. Existing ratings are Ba1/BBB- corporate lining up a US$615m first and second-lien
The company had originally planned to and facility. credit facility that funds the acquisition
draw down the revolving credit facility to and subsequent combination of two
bridge the funding gap. WEST TAPS FOR NASDAQ businesses, CONSILIO and ADVANCED DISCOVERY.
Additional proceeds will be used to Jefferies is leading with SunTrust, Goldman
reduce borrowings under the revolving Communication and network Sachs and KKR. A bank meeting is scheduled
credit facility and add cash to the balance infrastructure services provider WEST CORP for Monday.
sheet. launched a US$350m incremental first-lien The deal comprises a US$50m five-year
The amendment refreshes the tenor on term loan to finance its acquisition of revolver, a US$415m seven-year first-lien
the revolving credit facility and TLA for Nasdaq’s public relations and digital media term loan and a US$150m eight-year
five years and on the TLB for seven years. services businesses. second-lien term loan.
It will also move the existing loans from The company is offering to pay lenders The first-lien loan will have 101 soft call
Canadian parent Lions Gate Entertainment 400bp over Libor for the loan with a 1% protection for six months, while the
Corp to US subsidiary Lions Gate Capital floor on the benchmark, the same terms as second-lien tranche will have hard call
Holdings LLC. the existing loan. protection at 102, 101.
The transaction is leverage neutral at 2.6 The loan is expected to sell at a discount Consilio is a provider of eDiscovery, or
times secured and 3.4 times total, based on in the 99.75-par area. electronic information discovery,
US$1.827bn of secured debt, US$2.407bn The Credit Suisse-led loan, which matures document review, and legal consulting
of total debt and the last 12 months’ Ebitda in October 2024, has 101 soft call services. Advanced Discovery is a provider
at December 31 2017 of US$712m. protection until October 2018. of eDiscovery and risk management.
The TLA priced at 175bp over Libor, FILTRATION GROUP launched a US$1.653bn- DOLE FOOD detailed price talk for a
subject to a leverage-based grid. equivalent first-lien term loan backing a repricing of its existing US$938.13m Term
Existing lenders were offered a 12.5bp refinancing and two acquisitions. Loan B.
upfront fee and new lenders were offered a Goldman Sachs co-leads with JP Morgan. The loan, led by Morgan Stanley, is
37.5bp upfront fee. BMO and HSBC are co-managers. expected to price at 250bp over Libor with
The TLB priced at 225bp over Libor with The seven-year term loan will include a a 1% Libor floor and 99.875 discount. There
a 0% floor. It sold at par, compared with a euro carve up to €250m. will be 101 soft call protection for six
discount of 99.75-99.875 at launch. Price talk on the dollar tranche has been months.
There is soft call protection at 101 until set in the 325bp-350bp over Libor range The company raised a US$950m Term
June 11 2018, in line with the existing TLB. with a 0% floor and 99.5 OID. Loan B a year ago. The proceeds, along
Trading firm HUDSON RIVER TRADING Price talk on the euro tranche has been with US$300m of notes, were used to
finalised terms for its first-lien term loan set in the 350bp-375bp over Euribor range refinance Dole’s existing Term Loan B,
backing its acquisition of market maker with a 0% floor and 99.5 OID. second-lien notes and borrowings under its
SunTrading. Lenders will receive six months of soft asset-based lending facility.
JP Morgan led the seven-year loan, which call protection at 101. The loan will The seven-year loan priced at 300bp over
was increased by US$50m to US$300m. amortise at 1% per year. Libor with a 1% floor and a 25bp stepdown
Pricing firmed at 425bp over Libor with Filtration Group is acquiring a company when first-lien leverage reached 3.75 times.
a 0% floor and 99 discount, at the tight end that will be folded into its Industrial The loan was scheduled to amortise at
of guidance of 425bp-450bp with a 0% floor Technologies Group and Multisorb 2.5% annually for the first four years
and 99 discount. Technologies for US$500m, Moody’s said. followed by 5% for the remainder of the
The six months of 101 soft call Ratings are B2/B corporate and facility. loan. This schedule will remain under the
protection is unchanged. WYNDHAM HOTELS & RESORTS circulated price repriced loan.
Proceeds will be used to fund the talk on the US$1.6bn term loan backing its Educational services firm ADTALEM GLOBAL
acquisition, repay existing loans and for purchase of peer La Quinta’s franchising EDUCATION is launching a US$300m Term
general corporate purposes. Additional and management business. Loan B on Monday to back a refinancing.

Bank of America Merrill Lynch is leading between 6% and 6.25% at 99.5. The loan Proceeds, along with US$180m of new
with BMO and Northern Trust. Additional will be noncall in year one, then hard call equity from sponsor The Energy &
arrangers are expected to join the at 102/101. Minerals Group, will be used to finance the
syndicate. Corporate ratings of B1/B and facility US$473m acquisition of the Curragh coal
The seven-year loan will be covenant- ratings of Ba3/B+ are expected. mine in Queensland, Australia, repay
lite. Coronado’s existing debt, and put more
Proceeds will be used to refinance HUSKY INCREASES LBO LOAN than US$200m of cash on the balance
existing revolver borrowings and fund sheet, according to Moody’s.
cash to the balance sheet for general HUSKY INJECTION MOLDING SYSTEMS increased Ratings are B1/B corporate and B1/B+
corporate purposes. the term loan backing its leveraged facility.
buyout by Platinum Equity by US$100m Outsourced clinical care provider
CONVERGEONE MARKETS REFI to a total of US$2.1bn and tightened SPECIALTYCARE has repriced its existing
pricing. US$229m first-lien term loan, and
Price guidance is circulating for The seven-year covenant-lite term loan increased an incremental first-lien and
information technology provider priced at 300bp over Libor with a 0% floor second-lien debt raising to US$45m.
CONVERGEONE’s US$650m covenant-lite term and 99.75 discount, having been guided at Antares Capital led the transaction.
loan that will be used to refinance existing 325bp-350bp with a 0% floor and 99.5 Proceeds from the incremental funding
debt. discount. will be used to fund a distribution to
Credit Suisse leads the seven-year term Deutsche Bank led with Bank of America shareholders.
loan, which is guided at 375bp over Libor Merrill Lynch, Goldman Sachs, Barclays and The company repriced the existing first-
with a 1% Libor floor and 99.5 issue BMO. lien term loan to 375bp over Libor with a
discount. Lenders were offered six months of soft 1% floor from 425bp. The 25bp stepdown
There will be 101 soft call protection for call protection at 101. remains in place.
six months. Additional financing for the buyout will A US$29m fungible incremental term
Corporate and facility ratings are B2/B. come from US$650m of senior unsecured loan was added to the first-lien term loan,
KLA-TENCOR CORP, which is buying notes, reduced by US$100m from earlier upsized from the proposed US$22m,
semiconductor equipment maker guidance. bringing the total tranche size pro forma
Orbotech in a US$3.4bn deal, will finance Husky provides engineered tooling, the transaction to about US$258m.
the cash segment of the purchase price services and systems to the plastic The first-lien loan will have 101 soft call
with funds from the combined company’s injection molding industry. protection for six months.
balance sheet. Ratings are B3/B corporate, B2/B first- The new money sold at a discount of
In addition, KLA-Tencor plans on raising lien and Caa2/CCC+ unsecured. 99.875 versus 99.5 offered at launch.
about US$1bn in new long-term debt to Fleet and mobile enterprise software A US$16m fungible incremental second-
complete a US$2bn share repurchase. provider OMNITRACS set final terms on a lien term loan was also agreed. The debt
The acquisition is expected to close US$745m term loan to repay the company’s priced at 825bp over Libor with a 1% floor,
before the end of this year. existing first-lien and second-lien term in line with guidance and with the existing
JP Morgan acted as exclusive financial loans. second-lien tranche, which was not
adviser to KLA-Tencor. The company will pay lenders 275bp repriced. The second-lien add-on sold at a
Packaging company TEKNI-PLEX is seeking over Libor from previous guidance of discount of 99, as proposed.
a US$126m incremental covenant-lite term 300bp. A 0% floor is unchanged. Consenting first-lien and second-lien
loan to finance tuck-in acquisitions. The loan will now be sold at a discount lenders will be paid a 12.5bp amendment
The deal is guided at 325bp over Libor of 99.75 from previous guidance of 99.5. fee.
with a 25bp leverage-based step, a 1% Libor Six months of soft call protection of 101 No changes are being made to the
floor at 99.75 to par. is unchanged. company’s revolver.
Soft call protection of 101 on the loan, The financing also includes a US$50m
which matures in October 2024, will be revolver. LINDBLAD WRAPS REFINANCING
reset for six months. Barclays was lead left, joined by Credit
The loan will be US$78m drawn and Suisse, Macquarie, ING, Vista and Guggenheim. Adventure travel agency LINDBLAD
US$48m delayed-draw, with ticking fees Miner CORONADO COAL widened pricing on EXPEDITIONS finalised pricing on a US$200m
for the delayed-draw portion. a dual-tranche US$700m term loan first-lien term loan.
Credit Suisse is leading the transaction. backing an acquisition. Deutsche Bank led The loan, which will refinance existing
Corporate ratings of B3/B- and facility with Goldman Sachs. debt and add cash to the balance sheet,
ratings of B2/B are expected. The seven-year loan is split between a priced 350bp over Libor with a 25bp
Clothing retailer MEN’S WEARHOUSE is US$550m term loan B and a US$150m ratings-based step. Pricing had been guided
looking to refinance existing fixed and term loan C. at 375bp-400bp.
floating-rate first-lien term loans due in Pricing on both tranches is 650bp over The 0% Libor floor remains, while the
June 2021. Libor with a 1% floor and 97 discount. new issue discount was tightened to 99.75
A US$600m floating-rate term loan B due Guidance was 625bp with a 1% floor and 99 from 99.5.
2025 and US$300m fixed-rated term loan B discount. The seven-year loan offers 101 soft call
due 2025 are in the market. The TLB will amortise at 1% per year, protection for six months and is governed
Pricing is guided at 325bp-350bp over while the TLC will not amortise. by a maximum total net leverage
Libor with a 1% floor and 99.5 discount for Call protection, which had been covenant.
the floating-rate loan. There will be 101 expected at 101 soft call for six months, is The financing, led by Credit Suisse, JP
soft call protection for six months. now 101 hard call for 12 months with an Morgan and Citigroup also includes a
The fixed-rate loan is expected to price excess cash flow sweep at par. US$45m revolving line of credit.

Corporate credit ratings are B2/BB- and The deal comprises a US$40m revolver, a margin on the second-lien loan is 800bp
facility ratings are B2/BB. US$495m first-lien term loan and a over Libor, at 99.
WELLS ENTERPRISES wrapped a US$175m US$200m second-lien term loan. Park Place offers data storage and server
covenant-lite term loan refinancing led by First-lien pricing cleared at the wide end support.
BMO. of guidance of 350bp-375bp over Libor
The privately held family-owned ice with a 0% floor. The issue price tightened FOGO DE CHAO UPS LBO LOAN
cream manufacturer priced the loan at to 99.75 from the 99.5 proposed at launch.
275bp over Libor with a 0% floor compared Second-lien pricing is unchanged at Steakhouse chain FOGO DE CHAO
with the earlier guided range of 300bp- 775bp over Libor with a 0% floor. The issue CHURRASCARIA’s leveraged buyout loan has
325bp. price also tightened to 99.5 from 99 been increased to US$325m from
The discount on the covenant-lite term previously. US$300m and pricing tightened.
loan due 2025 also tightened to 99.75 from The seven-year first-lien loan has 101 The seven-year loan was priced at 450bp
99.5. soft call protection for six months. The over Libor with a 1% Libor floor and 99.5
It has 101 soft call protection for six eight-year second-lien tranche is callable at discount, having been guided at 500bp to
months and will amortise at 1% annually. 102 in year one, then at 101. 525bp with a 1% floor and a 99 discount.
Corporate family ratings are Ba3/BB-. Jefferies led the first and second-lien deal, Credit Suisse led the covenant-lite loan,
First-lien facility ratings are B1/BB. joined by Antares Capital and Ares Capital. which offered 101 soft call protection for
Kitchen and bath manufacturer DIMORA International drilling contractor KCA six months.
BRANDS has wrapped up the repricing of its DEUTAG has wrapped up its amendment to The company is being acquired by
US$254m first-lien term loan due in extend the maturity of its covenant-lite private equity firm Rhone Capital in a deal
August 2024. term loan B by roughly three years, after that values Fogo de Chao at US$560m.
Deutsche Bank, Antares and Bank of Ireland increasing the tranche and flexing pricing. Expected corporate and facility ratings
were bookrunners. Deutsche Bank is HSBC led with JP Morgan, Goldman Sachs are B2/B.
administrative agent. and First Abu Dhabi Bank. Goldman Sachs is Surfwear retailer BOARDRIDERS has agreed
The loan cleared at 350bp over Libor the administrative agent. a US$450m Term Loan B backing its
with a 1% floor, at par, at the wide end of The amendment also sought permission acquisition of Australian peer Billabong
guidance of 325bp-350bp. to issue US$425m of senior secured debt, International.
It previously paid 400bp over Libor with proceeds from which will be used along Deutsche Bank led the deal with Bank of
a 1% floor. with cash on hand to back the company’s America Merrill Lynch and Macquarie.
Lenders will receive a six month 101 soft cash-and-stock acquisition of Dalma Pricing on the six-year term loan cleared
call refresher. Energy for roughly US$660m, including at 650bp over Libor with a 1% floor and 98
Existing ratings are B3/B corporate and debt. The company announced on March OID, compared with guidance of 625bp to
facility. 12 it would issue a US$425m secured bond. 650bp with a 1% floor and 98 OID.
Wood pellet grill maker TRAEGER GRILLS The new secured debt offering was cut A ticking fee has been added to the deal,
has sealed the repricing of a US$254m first- by US$50m to US$375m in favour of a opening at 325bp for 30 days starting
lien loan and US$40m delayed draw term US$50m upsize to the term loan B to March 26 and increasing to 650bp
loan as well as US$47m of incremental fist- US$415m from US$365m. thereafter until funding and closing. The
lien term debt. The transaction pushes the maturity on fee will be paid at closing, expected next
Pricing on all three tranches cleared at the loan to March 2023 from May 2020. month.
the tight end of guidance in the 425bp- The extended loan contains a springing Documentation now includes a 25% cap
450bp over Libor range. This represents a maturity, given the company has bond on Ebitda adjustments and add-backs,
75bp spread reduction for the existing maturities in 2021 and 2022. excluding the US$90m of run-rate cost
loan. In exchange, the company increased the savings and US$110m of one-time costs to
The Credit Suisse-led loans have a 1% Libor coupon to 675bp over Libor with a 1% floor, achieve them. The exclusions can be added
floor and 101 soft call protection for six from opening guidance of 600bp-625bp. back to Ebitda for 24 months following the
months. Existing lenders received a 50bp consent deal’s closing.
The exiting debt was issued at par and fee. New lenders were issued the loan at a Additionally, the general restricted
pays a 25bp amendment fee. The 99.5 discount. Both terms were in line with payments basket has been capped at
incremental loans sold at 99.75. guidance. US$10m in the first year following closing.
Proceeds will also be used to fund an The loan includes 12 months of soft call The available amount for permitted
earn out payment. In an earn out, the protection at 101. investments will be subject to closing total
seller of a business receives added The amendment refreshes all covenant net leverage. Non-credit party debt
payment if the business achieves certain baskets. capacity will be capped at US$100m.
financial goals. PARK PLACE TECHNOLOGIES has syndicated a The call schedule is unchanged at NC-
The loans mature September 2024. US$395m first and second-lien credit 1/102/101 and the loan will contain a total net
Corporate ratings of B3/B- and facility facility that refinances the company’s leverage covenant, as originally proposed.
ratings of B2/B- are expected. existing facility and funds a dividend to The financing includes a US$150m asset-
shareholders. based revolving credit facility.
HELPSYSTEMS WRAPS US$735m CREDIT Jefferies, Golub Capital and Ares Capital Ratings are B3/B minus corporate and
arranged the funding, which comprises a facility.
IT management software company US$30m revolver, a US$250m first-lien PRINCE MINERALS, which manufactures and
HELPSYSTEMS has sealed a US$735m loan term loan, and US$115m second-lien term distributes mineral-based products, agreed
backing middle-market private equity firm loan. terms for its first and second-lien loan
HGGC’s recapitalisation and acquisition of The spread on the first-lien loan is 400bp package backing its leveraged buyout by
a majority stake in the company. over Libor with a 99.5 discount. The American Securities

Goldman Sachs led with Credit Suisse, Proceeds from the funded tranches will Corporate family and facility ratings are
Deutsche Bank, Jefferies and Morgan Stanley. be used to refinance existing debt, add B3/B.
The seven-year first-lien term loan was cash to the balance sheet, and pay
increased by US$10m to US$515m. transaction fees and expenses, while the ENGILITY SEALS REPRICING, ADD-ON
Pricing on the tranche is 350bp over delayed draw tranche is earmarked for
Libor with a 1% floor, at 99.5, the tight end future acquisitions, according to Moody’s. Defence contractor ENGILITY completed the
of guidance of 350bp to 375bp, Ratings are B2/B corporate and B1/B first- repricings of a US$100m term loan B1 due
It has six months of 101 soft call lien and Caa1/CCC+ second-lien. in August 2020, US$528m term loan B2
protection. Canadian broadband provider XPLORNET due in August 2023 and US$75m add-on
The eight-year second-lien term loan has COMMUNICATIONS has completed the TLB2. Morgan Stanley led.
been cut by US$10m to US$150m. repricing of its roughly US$410m term The B1 loan priced at 225bp over Libor
It was priced at 775bp over Libor with a loan B due in September 2021. SunTrust led. with a 0% floor at par. Guidance was 225bp-
1% floor, at 99, the wide end of 750bp to The loan cleared at 400bp over Libor 250bp with a 0% floor and par offering
775bp guidance. There is a 102/101 hard with a 1% floor, wide to guidance of 375bp. price. The tranche had paid 275bp over
call schedule. It was issued at par. Libor with a 0% floor prior to repricing.
The loans include 75bp of MFN The loan previously paid 475bp over The B2 tranche and incremental priced
protection for life, versus a 12-month Libor with a 1% floor. at 275bp over Libor with a 1% floor at par,
sunset originally. Lenders will receive six months of soft after being guided at 275bp-300bp with a
The asset sale sweep provision will no call protection at 101. 1% floor. The loan had paid a spread of
longer include stepdowns. 325bp over Libor with a 1% floor before the
Documentation now places a 25% cap on LIVE NATION NEARS REPRICING repricing.
add-backs to Ebitda for expected cost The B2 loan was expected to price at par
savings with a 18-month look forward Ticket and concert company LIVE NATION while the incremental was seen at 99.75-
period. Initially, add-backs were uncapped was scheduled to close on Friday a 100.
with a 24-month look forward period. repricing of its US$963m term loan due The B1 amortises at 10% per year while
The financing includes a US$85m five- October 2023. the B-2 amortises at 1% per year.
year revolving credit facility. JP Morgan was leading the deal, which is Lenders will receive six months of soft
American Securities is acquiring Prince guided at 175bp-200bp over Libor with a call protection at 101.
for an enterprise value of US$915m, or 8.6 0% floor, offered at a 99.875 discount. The loans are structured with a 6.125
times 2017 adjusted Ebitda of US$106m. The loan was repriced in June 2017 to times first-lien net leverage covenant,
American Securities and management 225bp from 250bp. which steps down to 5.625 times at 1Q18,
will contribute US$315m of equity, Corporate family ratings are Ba3/BB-. to 5.125 times at 1Q19 and to 4.625 times
comprising roughly 32% of total Facility ratings are Ba1/BB. at 1Q20.
capitalisation. Global asset manager RUSSELL INVESTMENTS Ratings are B2/B+ corporate and B1/BB-
Ratings are B2/B minus corporate and was scheduled to close on Friday a facility.
first-lien and Caa1/CCC+ second-lien. repricing of its existing US$838m first-lien Real estate investment trust MGM GROWTH
term loan B. PROPERTIES set final terms on the repricing
OSG BILLING REVISES TLB Barclays is lead left joined by Macquarie and maturity extension of its US$1.818bn
and Credit Suisse. term loan B.
Technology-enabled services company Pricing is guided at a range of 325bp- The loan, led by Bank of America Merrill
OUTPUT SERVICES GROUP made changes to its 350bp with a 1% Libor floor. The loan is Lynch, priced at 200bp over Libor with a 0%
first- and second- lien loan package offered at par. The transaction will also reset floor and a step to 175bp over Libor upon a
backing a refinancing. 101 soft call protection for six months. corporate family credit rating upgrade.
SunTrust led the deal. The loan matures on June 1 2023. Guidance on the covenant-lite facility
The six-year first-lien term loan was Internet infrastructure services provider was circulated at 175bp-200bp. The loan
originally split between a US$230m funded INTERNAP CORP was also expected to close on previously pays 225bp with a 0% floor.
tranche and a US$50m delayed-draw tranche. Friday a US$433.5m term loan repricing, The loan sold at a 99.75 discount, as
The funded tranche has been increased by led by Jefferies. proposed at launch. The transaction also
US$12.5m to US$242.5m, while the delayed- The company was looking to cut pricing resets 101 soft call protection for six
draw tranche is unchanged. on the first-lien loan to 550bp-575bp over months.
Pricing on the tranche has been lowered Libor with a 1% floor. The loan was offered The company also asked lenders to push
to 425bp over Libor with a 1% floor, from at par and the transaction would reset 101 out the maturity of the loan by two years
450bp with a 1% floor at launch. The OID soft call protection for six months. to April 25, 2025 from April 25 2023.
was tightened to 99.5 from 99. The company last month sealed a Legal software provider EPIQ finalised
Ticking fees will apply to the delayed- US$135m incremental term loan that terms on a US$1.18bn term loan to
draw tranche. funded the company’s acquisition of refinance an existing loan.
The second-lien term loan, which was SingleHop. The BAML-led loan, which matures in
privately placed, was cut by US$12.5m to The loan priced at 700bp over Libor with September 2023, pays 475bp over Libor
US$52.5m. a 1% floor and a 99.5 OID. with a 1% floor, at par.
Pricing was unchanged at 850bp over The add-on, which is fungible with the Soft call protection of 101 is reset for six
Libor with a 1% floor and 98.5 discount. existing term loan, brought the total first- months.
There is also a US$15m revolving credit lien tranche size to US$433.5m. Consumer products company
facility. Soft call protection of 101 expires in PRESTIGE BRANDS reduced the size of its
The deal includes a total net leverage April 2018. The facility matures on April 6 term loan B4 post paydown from bond
covenant. 2022. proceeds.

The US$1.7bn and €175m incremental
Coty launches jumbo refinancing covenant-lite term loan Bs both pay of

400bp over Libor/Euribor, in line with the
existing facilities.
n US/EUROPE Loan includes US$1.25bn TLA and US$2.25bn euro-denominated TLA The discount on the euro tranche is now
99, changed from 99.5, with the dollar
Beauty products maker COTY has launched a debt 2016 to pay 250bp on the dollars and 275bp on tranche unchanged at 99.5.
refinancing to increase its euro borrowings and the euros. A new eight-year US$490m second-lien
add bonds to its all-loan capital structure. Prior to the refinancing the TLB included facility, denominated in euros and dollars,
Bank of America Merrill Lynch and JP Morgan an approximately US$1.59bn tranche and a pays 775bp over Euribor and 800bp over
are leading the financing alongside Morgan €1.158bn tranche. Libor, respectively. It has a discount of 99
Stanley, BNP Paribas, Credit Agricole, Deutsche The deal also refinances around €1.15bn of having launched at 98.5-99.
Bank, HSBC, UniCredit, ING, Mizuho and RBC. drawn outstandings from an approximately A US$150m revolving credit facility pays
The deal will refinance Coty and Galleria’s US$3bn revolving credit facility. 300bp over Libor. The term loans and the
outstanding debt. Galleria is the collective name revolver have a 0% floor, while the second-
for the 40-plus brands sold to Coty by Procter & DEBUT BONDS lien facility has a 1% floor.
Gamble in 2016 for US$12bn, including CoverGirl, Coty is also offering US$2bn of debut senior The TLB includes 101 soft call for six
Max Factor and Wella Professional. unsecured notes, denominated in dollars and months, while the second-lien tranche is
The refinancing includes a US$1.25bn term euros. callable at 102, 101. The TLB amortises at
loan A and a US$2.25bn-equivalent euro- The deal is expected to better match Coty’s 1% per year.
denominated term loan A. debt profile with its cash flows and simplify its Moody’s and S&P forecast EG Group’s
Prior to the refinancing the company had capital structure, one banker said. leverage to rise to seven times its Ebitda of
around US$3.4bn of TLA and a small €150m TLA. Coty has been trying to keep pace with €815m following the deal. The amount of
The refinancing also includes a US$1bn rivals Estee Lauder and LVMH’s Sephora, and additional debt EG will incur through the
seven-year term loan B and a US$1.5bn euro- has paid billions to acquire brands and take deal led S&P to downgrade its outlook on
denominated seven-year term loan B. minority stakes in firms that appeal to younger the company’s B corporate rating.
Pricing is guided at 200bp-225bp Libor on the consumers, most notably skincare brand Bank of America Merrill Lynch, Barclays and
dollar TLB and 225bp-250bp over Euribor on the Younique and ghd, which makes popular hair Morgan Stanley are physical bookrunners on
euro TLB. Both TLBs are offered with a 0% floor straighteners. the euro term loan and second-lien facility.
at 99.75 OID. Coty is now the third-largest beauty company BAML is sole physical bookrunner on the
The new loans will potentially shave up to in the world. dollar loan. The banks are also global
50bp off Coty’s existing TLB, which repriced in Claire Ruckin coordinators with Deutsche Bank and UBS.
EG announced the NRG Value deal last
month, and brings the total number of
The loan totals US$975m, compared HSE24 on the Frankfurt stock exchange stations under its ownership in the
with the US$1.222bn repricing. before the summer. Netherlands to 595.
Pricing is 200bp over Libor with a 0% Some €950m of debt financing It also agreed in February to buy US
Libor floor at par. The company was represents around 6.25 times HSE24’s grocery chain Kroger’s 800 stores, days
looking to cut pricing to 200bp-225bp with expected 2018 Ebitda of €140m, including after closing a €2.85bn-equivalent loan
a 0% floor at par. undrawn facilities. financing to fund its acquisition of over
The loan offers 101 soft call protection At that leveraged level, senior leveraged 2,000 Esso sites in Italy and Germany.
for six months. loans and junior debt in the form of either The Kroger acquisition will be financed
The loan will still amortise at an annual second-lien loans or high-yield bonds will entirely with debt as EG Group’s existing
rate of 1%. It will remain governed by be considered. credit agreement enables it to do so.
maximum total leverage covenant and a Other bankers are working on all-senior EG Group’s aggressive expansion comes
minimum consolidated cash interest financings at 5.25 times. after TDR Capital bought a €1.3bn
coverage ratio. Suitors, including private equity firms minority stake in the business, formerly
Morgan Stanley, Barclays, Citigroup, Advent, Apax, BC Partners, Cinven and known as Euro Garages, in 2016. It
Deutsche Bank and RBC Capital Markets led PAI, are expected to hand in tentative bids subsequently merged with European
the deal, which matures on January 2, worth around €1.5bn before Easter, in the Forecourt Retailer, formerly called Delek,
2024. first round of an auction process. later that year, creating a group with 1,450
Corporate family ratings are B2/B+. HSE24 raised €265m of leveraged loans stations throughout Europe.
Facility ratings are Ba3/BB. in 2012, to back Providence’s buyout. In The co-founders of Euro Garages,
2016, it agreed an additional €171m loan brothers Moshin and Zuber Issa, started
to pay a dividend to shareholders. It the business with a single filling station in
EUROPE/MIDDLE EAST/ repriced its original buyout loan in 2017 Bury, Greater Manchester, in 2001.
AFRICA on more attractive terms.
CIRCET UPS PRICING, TWEAKS DOCS
BANKS PREP HSE24 DEAL EG GROUP WRAPS LOANS
French telecom network service provider
Bankers are working on debt financings of UK fuel retailer EG GROUP has finalised terms CIRCET GROUPE widened pricing on its €570m
almost €1bn to back a potential sale of on US$2.55bn-equivalent of loans backing seven-year term loan B, changing some
German home shopping TV network HSE24. its acquisition of US food retailer Kroger’s documentation on the deal in the process.
Buyout group Providence is moving 800 stores and 97 Esso-branded petrol The loan priced at 375bp over Euribor,
ahead with plans to either sell or float stations from Dutch peer NRG Value. from a previous range of 325bp-350bp. The

offer price at 99.5 and a 0% floor were both Citigroup, Credit Agricole and JP Morgan 5.01–5.5 times; 230bp for 4.51–5.00 times;
unchanged. Hong Kong, when it closed syndication in 190bp for 4.01–4.50 times; 150bp for 3.51–
A €110m 6.5-year revolving credit 2016. 4.00 times; 135bp for 2.51–3.50 times and
facility priced at 300bp over Euribor with a That facility, split into a HK$3.9bn term 120bp for 2.5 times or below.
0% floor, at par. loan and a HK$200m revolving credit, HKBN’s net leverage at the time was
There is six months soft-call protection offered top level all-in pricing of 148bp via around 3.30 times.
at 101 on the term loan. an interest margin of 135bp over Libor and Wholly owned HKBN subsidiaries Hong
A senior portfolio manager said that the a 65bp upfront fee. Kong Broadband Network and HKBN
margin ratchet clause and the ability to The margin on that loan was also tied to a Group were the borrowers.
take dividend recapitalisations out of the leverage grid of 325bp for total net leverage HKBN provides broadband and mobile
deal were particularly aggressive. greater than 5.5 times; 275bp for leverage of telephony services in Hong Kong.
Changes will now see the margin
ratchet kick in after six months as opposed EUROPEAN LEVERAGED LOANS EMEA SPONSORED LOAN BOOKRUNNERS
to the three months initially guided. Six BOOKRUNNERS: 1/1/2018 TO DATE BY VOLUME: 1/1/2018 TO DATE
months is still seen as aggressive as most Managing No of Total Share Europe, Middle East, Africa
deals typically have a 12 month period bank or group issues US$(m) (%) Managing No of Total Share
before margins can ratchet down. The 1 Deutsche Bank 14 3,169.87 7.9 bank or group issues US$(m) (%)
margins can also only ratchet down when 2 Goldman Sachs 9 2,804.71 7.0 1 Deutsche Bank 7 1,317.21 7.6
leverage falls to 4 times rather than the 3 Credit Agricole 12 2,761.12 6.9 2 Goldman Sachs 6 1,263.85 7.3
4.25 times initially guided. 4 BNP Paribas 14 2,755.73 6.9 3 SG 7 1,239.00 7.2
The test for taking dividends was also 5 ING 11 2,495.29 6.2 4 Natixis 8 1,158.80 6.7
tightened. 6 SG 11 2,132.75 5.3 5 Credit Agricole 8 1,145.57 6.6
Proceeds back Advent International’s 7 Credit Suisse 8 1,958.61 4.9 6 ING 6 1,145.18 6.6
buyout of Circet from CM-CIC 8 HSBC 8 1,954.02 4.9 7 BNP Paribas 7 1,079.68 6.3
Investissement. The group has pro-forma 9 Natixis 10 1,806.36 4.5 8 RBC 4 1,009.34 5.9
sales revenue for 2017 of €640m. 10 UniCredit 7 1,676.30 4.2 9 Credit Suisse 4 921.36 5.3
Deutsche Bank, UBS, Natwest and Societe Total 38 40,144.00 10 HSBC 4 856.02 5.0
Generale are physical bookrunners. Natixis, Excluding project finance. Western Europe only included. Total 22 17,233.87
Credit Agricole, ING, Bank of Ireland, Unicredit Excluding project finance.
and Credit Lyonnais are bookrunners. Source: Thomson Reuters SDC code: P10 Source: Thomson Reuters SDC code: P13
ASIA-PACIFIC
Unitranche at ‘exceptional’
levels as top funds tighten grip
HKBN SEEKS A&E FOR BULLET
HKBN is seeking an amendment and

extension for a HK$4.1bn (US$528m) five-
year bullet loan signed in November 2016. n EUROPE Alcentra and Ares led the most deals in 2017
(See Top News.)
BNP Paribas is the coordinator on the The number of unitranches in Europe reached a AGGRESSIVE PRICING
exercise, which involves a reduction in the record high last year at 157 deals, a 69% year- Alternative lenders found increasing success in
loan’s interest margin and a lengthening on-year increase, according to a report from Germany as the number of deals there more than
of its tenor. AlixPartners. tripled to 21 in 2017, from six in 2016. The report
The new margin is tied to a leverage grid This also surpassed a 2015 high by 31%, in attributed this growth to “aggressive pricing”
of 325bp for total net leverage greater than what the report described as an “exceptional” and an increasing number of partnerships
5.5 times; 275bp for leverage of 5.01–5.5 year for the instrument, as demand for non- between funds and banks.
times; 220bp for 4.51–5.00 times; 170bp bank lending grew. The UK continued to remain the largest
for 4.01–4.50 times; 120bp for 3.51–4.00 While the number of alternative lenders market by far for private debt funds and deal
times; 105bp for 2.51–3.50 times and 95bp increased to meet the demand, it was the count hit 67 in 2017, up from 44 in 2016 and 61 in
for 2.5 times or below. larger, more established funds that saw the 2015. France, the second largest market, saw 32
The company had net leverage of 3.38 most action. deals in 2017, up from 25 deals in 2016.
times as of August 31 2017. Alcentra and Ares led the way, completing “We continue to see innovation in the mid-
The new maturity date is five years from 21 and 20 unitranche deals respectively, while market with stretched senior and ABL plus
the day all lenders receive approval for Permira followed with 18. unitranche structures making headway as funders
renewal of commitments. AlixPartners noted that a consolidation in seek to flex structures to deploy capital,” said Jacco
Existing lenders are being offered a 30bp the market among the ten largest funds saw Brouwer, head of debt advisory at AlixPartners.
fee for the A&E exercise. Those their market share across mid-market lending Meanwhile, in the banking sector, HSBC
committing more than HK$200m above increase to 61% in 2017, from 53% in 2016. maintained its position as the number one lender in
their current exposure earn 55bp in fees, Across the entire mid-market, which takes the UK mid-market, despite a 12% fall in total number
while those taking up to HK$200m above into account all lending and not just unitranche of deals. RBS, in second place, saw a drop of 30%.
their current exposure receive 45bp. facilities, deal count among non-bank lenders Lloyds and Santander, however, were able to increase
The original facility had 25 lenders, was up 35% from the previous year, the report mid-market deal count by 25% and 29%, respectively.
including mandated lead arrangers and said. David Brooke
bookrunners BNP Paribas Hong Kong,

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EQUITIES
Bangladesh 88 China 88 Hong Kong 89 India 89 Malaysia 91 Singapore 91 Egypt 92 Finland 92
France 92 Netherlands 94 Norway 95 UK 96 United States 97 Structured Equity 101
n FRONT STORY IPOs
US buyers lap up latest China issues

Streaming websites entice investors despite recent disappointments
The US IPOs of Chinese video-streaming market, triggering a sell-off in US-listed It is selling 125m primary American
companies IQIYI and BILIBILI have drawn a Chinese consumer finance firms. depositary shares at an indicative price
strong response from investors keen to bet range of US$17–$19 each. The price range
on the rapid growth of the country’s online NOT YET PROFITABLE represents a 2018 P/S of 3.4–3.8 and a 2019
entertainment industry. iQiyi and Bilibili are not yet profitable, but P/S of 2.5–2.8, and a post-shoe market
The up-to-US$2.38bn Nasdaq IPO of iQiyi investors see the two floats as opportunities capitalisation of US$13.2bn–$14.8bn.
was covered on the first day of bookbuilding to buy into the robust growth of China’s Existing shareholders Baidu and Hillhouse
last Monday and is on course to become the online entertainment sector. This is Capital have each indicated interest in
biggest Chinese listing in the US since especially true for iQiyi, which is often seen subscribing for up to US$200m of the IPO shares.
Alibaba’s US$25bn float in September 2014. as the Chinese version of Netflix. Bilibili saw its 2017 net loss narrow to
At the top end of the range, the unit of “People are seeing strong growth in the Rmb184m from Rmb911m in 2016. It is selling
search engine Baidu could raise 59% more sector. If you believe such growth will 42m primary ADS at an indicative price range
than the US$1.5bn it originally filed for. continue, buying in the IPOs now can allow of US$10.50–$12.50 each, representing a 2019
Bilibili’s NYSE IPO of up to US$525m has you to position early,” said a person close to P/E of 25.8–30.7 and a 2020 P/E of 12.5–14.9.
also drawn strong support with books one of the floats. “It’s hard to say whether these deals are
quickly covered after bookbuilding started According to a report from consulting firm expensive as you are actually betting on their
last Monday. iResearch, the online entertainment industry ability to monetise their huge subscriber base,”
The upbeat demand shows US investors’ in China more than tripled in size from about said an ECM banker away from both IPOs.
interest in Chinese IPOs remains strong, Rmb50.8bn (US$8bn) in 2012 to Rmb156.9bn Netflix, with a market cap of over
despite several disappointing listings late in 2016, and is expected to reach about US$130bn, trades at more than 11 times its
last year. Rmb688.4bn in 2022. Of the total time users 2017 revenues and more than 200 times
“US investors are still interested in spent on online entertainment in China in historical earnings.
Chinese IPOs in high-growth sectors. They 2016, more than 80% was on internet videos. At least three other Chinese live-streaming
are just avoiding those that are more iQiyi’s net loss widened to Rmb3.74bn in platforms plan to go public. HUYA, the game-
vulnerable to regulatory risks,” said a source 2017 from Rmb3.07bn in 2016. The company streaming unit of Nasdaq-listed YY, plans to
close to the iQiyi float. is expected to turn profitable in 2021, raise at least US$200m from a US IPO.
Shares of Chinese peer-to-peer online according to two people close to the float. Tencent-backed DOUYU and INKE, meanwhile,
lender Ppdai Group, for example, closed at iQiyi, which competes with Tencent and are looking at Hong Kong IPOs of US$400m
US$8.17 last Wednesday, 37% below the Alibaba’s Youku Tudou, had about 421m and US$300m, respectively, this year.
November IPO price of US$13. Soon after average mobile monthly active users and Bilibili will price its IPO on Tuesday and
the company’s listing, China introduced about 126m average mobile daily active users iQiyi a day later.
rules to clamp down on the micro-loan in the three months ended December 31 2017. Fiona Lau
Alibaba mulls CDR issuance “The new rules on CDRs may be introduced
as soon as the end of next month,” said the
source. “The first batch of issuers may launch
A-share listing could be weeks away CDRs as soon as mid-2018.”
Alongside Alibaba, a number of overseas-
Chinese e-commerce giant ALIBABA GROUP is market capitalisation of US$472.9bn. listed Chinese companies, including JD.com,
mulling an A-share listing through an issue “Since our IPO in the US, we have stated Tencent, Baidu, Weibo and Sogou, are
of Chinese Depositary Receipts as soon as that, if regulations allowed, we would considering CDR issues.
the middle of this year, according to a source consider a listing in China,” an Alibaba Smartphone maker Xiaomi Technology is
familiar with the situation. spokesperson told IFR in an email. also considering a domestic listing through
The fundraising size was yet to be China has stepped up efforts to entice CDRs alongside a Hong Kong IPO later this
determined, but might be more than overseas-incorporated entities, including year, sources told IFR earlier.
Rmb10bn (US$1.58bn), said the source. major Chinese technology companies, to list According to a March 19 post on Shanghai
The China Securities Regulatory in the domestic stock market. Stock Exchange’s official channel on Weibo,
Commission has been tightly controlling the the bourse has studied issues related to CDR
sizes and prices for domestic IPOs. The size LISTING CAMPAIGN issuance since 2001 and has sorted out the
of Alibaba’s fundraising will thus depend As part of that campaign, the CSRC plans to business rules for the listing and trading of
heavily on regulatory guidance. CICC and introduce CDRs as soon as this year to allow high-quality and innovative companies on
Citic Securities are working on the issue. qualified overseas listcos to list in the the SSE.
As of March 22, US-listed Alibaba had a domestic market. Ken Wang, Fiona Lau

WEEK IN NUMBERS The float, with Credit Suisse, Goldman Sachs
and JP Morgan as joint bookrunners, was
ASIA-PACIFIC
US$9.8bn
n NASPERS COMPLETED ITS FIRST SALE OF
multiple times covered.
ONESMART EMBARKS ON US LISTING

SHARES IN TENCENT TO RAISE US$9.8bn BANGLADESH
FOR A 2% STAKE. NASPERS INVESTED ONESMART INTERNATIONAL EDUCATION GROUP has
US$32m IN TENCENT IN 2001, AND POST SUMMIT POWER SETS IPO TARGET started bookbuilding for a NYSE IPO of up to
SALE STILL HAS A 31.2% SHAREHOLDING US$212m.
SUMMIT POWER INTERNATIONAL aims to open The company is selling 16.3m primary
books for a US$350m Singapore Exchange American depositary shares at an indicative
SFr6
n MEDARTIS PRICED ITS IPO AT SFr48 PER
IPO in the first week of April, according to a
person with knowledge of the plans.
The Bangladeshi power producer is
price range of US$11-$13 each, representing
a forecast 2019 P/E of 19.6-23.2.
There is an option for a size increase of up
SHARE DESPITE BEING MULTIPLE TIMES currently pre-marketing the IPO and tying to 2.45m primary ADS, representing 15% of
COVERED AT SFr54, THE TOP OF THE PRICE up the cornerstone tranche. the base deal.
GUIDANCE. THE IPO WAS ALL PRIMARY It will offer around US$300m of primary The IPO, with Deutsche Bank, Morgan Stanley
SHARES AND THE MAJOR SHAREHOLDER shares and US$50m of secondary shares. and UBS as leads, will price on Tuesday.
OPTED TO LEAVE IMMEDIATE UPSIDE FOR There is also a greenshoe option of up to For the year to August 31 2017, OneSmart
INVESTORS RATHER THAN FOCUS ON 15% of the base offer. posted net profit growth of 30% to
DILUTION. SHARES OPENED UP 12.5% ON The shares will be denominated in US Rmb243m (US$38m). For the three months
THE FIRST DAY OF TRADING ON FRIDAY dollars. to November 30, its net income amounted
The IPO is set to be the first overseas to Rmb18m.
listing for a Bangladeshi company. It will Private equity firm Carlyle Group owns
US$21
n DROPBOX CAPTURED INVESTOR
also be the country’s largest float, beating
the US$70m listing of mobile phone
operator Grameenphone on the Dhaka
15.8% of OneSmart, while Goldman Sachs
controls 11.4%.
OneSmart is a Shanghai-based K-12 after-
ATTENTION WITH A MODEST VALUATION – Stock Exchange in 2009. school education company involved in
FOR THE TECHNOLOGY SECTOR – ON Summit Power owns 15 power plants in tutoring and education tourism services.
ITS IPO THAT SAW INITIAL GUIDANCE OF Bangladesh with a total capacity of 1,201
US$16-$18 INCREASED TO US$18-$20 AND megawatts. XINHUA EDUCATION COMPLETES IPO
FINAL PRICING AT US$21 Citigroup, DBS and UBS are joint global
coordinators on the IPO. CHINA XINHUA EDUCATION GROUP has raised
HK$1.3bn (US$166m) from a Hong Kong IPO
27.27%
n VIVENDI SOLD ITS ENTIRE 27.27% STAKE IN
CHINA
after selling shares at the midpoint of the
indicative price range.
The private provider of higher education
UBISOFT HAVING GIVEN UP ON ITS ATTEMPT SUNLANDS COMPLETES US IPO in China sold 400m primary shares, or 25%
TO TAKE OVER THE GAMING GROUP. THE SALE of the enlarged company, at HK$3.26 each,
INCLUDED A BUYBACK BY UBISOFT, SALE SUNLANDS ONLINE EDUCATION raised US$149.5m off a marketed range of HK$2.83–$3.69.
TO THE UBISOFT FOUNDING FAMILY PLUS A from a NYSE IPO at the bottom of the The final price represents a pre-shoe 2018
€882.9m ACCELERATED BOOKBUILD THAT US$11.50-$13.50 indicative price range. P/E ratio of 16.9 and a post-shoe 2018
ALSO INCLUDED HEDGING OF A COLLAR WITH The final price represents a 2019 P/E of multiple of 17.6.
THE GUILLEMOT FAMILY BY CREDIT AGRICOLE 16.5. The IPO drew strong demand as a good
The Chinese post-secondary and mix of international and China funds
professional education company sold 13m participated. Long-only and cornerstone
£125m
n CONVIVIALITY BEGAN MEETINGS WITH
American depositary shares.
ASIA-PACIFIC EQUITIES
investors took most of the shares.
ASIA-PACIFIC EQUITIES (EX-JAPAN)

INVESTORS LATE LAST WEEK TO RAISE BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE
£125m TO KEEP THE FRANCHISED OFF- Managing No of Total Share Managing No of Total Share
LICENCE CHAIN AND DRINKS WHOLESALER bank or group issues US$(m) (%) bank or group issues US$(m) (%)
AFLOAT. IF THE FUNDS ARE NOT RAISED THE 1 Morgan Stanley 21 7,586.06 12.4 1 Morgan Stanley 15 7,114.84 13.1
COMPANY SAID IT IS UNLIKELY TO BE ABLE 2 Citigroup 23 6,683.29 11.0 2 Citigroup 20 6,365.98 11.7
TO TRADE ON A GOING CONCERN BASIS 3 UBS 19 4,152.99 6.8 3 UBS 17 3,912.29 7.2
4 BAML 5 3,767.52 6.2 4 BAML 4 3,745.67 6.9
5 Goldman Sachs 14 3,567.47 5.8 5 Goldman Sachs 13 3,514.90 6.5
3.3 points
n CARREFOUR ISSUED A US$500m SIX-
6 Huatai Securities
7 Citic
8 Sumitomo Mitsui Finl
9
9
23
2,075.44 3.4
1,559.44 2.6
1,485.85 2.4
6 Huatai Securities
7 Citic
8 Axis Bank
9
9
8
2,075.44 3.8
1,559.44 2.9
1,274.36 2.3
YEAR NON-DILUTIVE CONVERTIBLE BOND 9 Nomura 27 1,392.36 2.3 9 Guotai Junan Securities 10 1,069.65 2.0
ON THURSDAY. THE NEW ISSUE HIT THE 10 Mizuho 17 1,387.17 2.3 10 Daishin Securities 5 920.85 1.7
OUTSTANDING NDCB ISSUED LAST YEAR Total 587 61,009.68 Total 528 54,442.11
HARD AS IT FELL 3.3 POINTS IN THE Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues
MORNING TO 88.1% BID Source: Thomson Reuters SDC code: C4a1 Source: Thomson Reuters SDC code: C4a2

EQUITIES ASIA-PACIFIC
The retail tranche was more than 30x WuXi Biologics raised HK$3.99bn from SHENZHEN NEPTUNUS TO SELL RIGHTS
covered, triggering the clawback system the sale of 57m shares, while shareholder
with 30% of the IPO shares allocated to that G&C VII took in HK$700m from the sale of SHENZHEN NEPTUNUS BIOENGINEERING has secured
portion versus the original 10%. The 10m shares. board approval for a proposed rights issue of
institutional tranche was multiple times The placement price was set at HK$70, the up to Rmb5bn (US$791m).
oversubscribed after clawback. upper half of the indicative range of The manufacturer and distributor of
China New City Commercial HK$68.50-$71.00, representing a discount of pharmaceuticals plans to offer up to 794m
Development and BoCom International 6.7% to the pre-deal spot. rights shares on a 3-for-10 basis.
Prosperity Investment, the cornerstone The placement was multiple times China Galaxy Securities is the sole
investors, each pledged US$10m. covered with a good quality book. There bookrunner. Proceeds will be used to repay
Trading in the stock will start on Monday. were more than 100 lines in the book and debts and replenish working capital.
Macquarie was sole sponsor and joint the top 10 investors took about two-thirds of Shareholders will review the proposal on
global coordinators with ABC International. the allocation. April 4.
The two were also joint bookrunners with There is a three-month lock-up on the SHENZHEN WENKE LANDSCAPE has launched a
CMB International and First Capital Securities. company, the vendor and WuXi Biologics rights issue of up to Rmb851m, with Zhong
Holdings. De Securities as the sole bookrunner.
51 CREDIT CARD FILES FOR IPO The company will use the proceeds to Bookbuilding will start on Monday.
fund expansion. The company plans to offer up to 74m
51 CREDIT CARD has applied to the Stock Morgan Stanley was the sole bookrunner. rights shares on a 3-for-10 basis. The price
Exchange of Hong Kong for a proposed IPO. G&C VII is a controlling shareholder of has been set at Rmb11.50, or at a discount of
The Chinese online credit card WuXi Biologics controlled by WuXi Biologics 39.1% to the March 20 close of Rmb18.87.
management company plans to raise at least chairman Ge Li. Proceeds will be used for construction
US$500m from the listing, people close to projects, research and development, and
the deal told IFR earlier. COUNTRY GARDEN UNIT AVOIDS IPO working capital.
Founded in 2012, 51 Credit Card helps
users manage their credit card bills, invest in Country Garden Holdings, which withdrew
wealth management products and access a planned Shanghai listing of its property HONG KONG
other personal credit-based financial services. management arm last December, will now
CEO Sun Haitao told mainland media last list the unit in Hong Kong without raising QIA SELLS STAKES IN LIFESTYLE
September that the company was valued at any funds.
more than Rmb10bn (US$1.6bn). The Chinese property company initially Qatar Investment Authority has raised a
As of December 31, it had 81 million planned to raise about Rmb1.13bn from the combined HK$5.2bn (US$663m) from the sale
registered users on its apps. A-share plan, but withdrew its application of all its shares in Hong Kong-listed LIFESTYLE
In 2017, the company posted a net loss of due to a regulatory change in the review INTERNATIONAL HOLDINGS and LIFESTYLE CHINA GROUP.
Rmb1.38bn on total revenue of Rmb2.27bn. Its process of such transactions in China. It did QIA sold 371m shares in Lifestyle
operating profit, however, rose about 11 times not give details of the policy change. International at a fixed price of HK$12 each,
to Rmb706m last year from Rmb60m in 2016. Country Garden last week said it would a discount of 3.8% to the pre-deal spot. It also
Citigroup and China Merchants Securities are list COUNTRY GARDEN SERVICES by introduction sold 371m shares in Lifestyle China at a
joint sponsors on the IPO. through the distribution of CGS shares to fixed price of HK$2.03 each, a discount of
the parent’s shareholders. No funds will be 4.7% to the pre-deal spot.
HOPE EDUCATION APPLIES FOR IPO raised. For Lifestyle International’s HK$4.45bn
block, Lau Luen Hung, the controlling
HOPE EDUCATION GROUP filed an application to NOTHING ASSURED FROM PING AN shareholder of the company, committed to
the Stock Exchange of Hong Kong for a purchase 280m shares.
proposed IPO of about US$400m. PING AN INSURANCE (GROUP) will not provide an For Lifestyle China’s HK$753m block, Lau
The Chinese company is backed by assured entitlement to any shareholder for committed to purchase 186m shares.
several high-profile shareholders, including its proposed spin-off and separate Hong There were 50 investors across both
Citic Limited, China Everbright and Kong listing of Ping An Healthcare and blocks and the top 10 got 80% of the deals.
Prudential Group. Technology. Demand came from existing institutional
Established in 2007, it owns and operates This is because A-shareholders voted investors and wealth management clients.
colleges and institutes for primary, against a provision that would have given UBS was the sole bookrunner.
secondary, higher, vocational, and assured entitlements to H-shareholders for
continuing education. the proposed IPO.
It is a member of the Hope Group, which The Chinese insurer intends to raise INDIA
was founded by Chinese agribusiness tycoon about US$1bn from a Hong Kong IPO as
Liu Yonghao and his brothers. early as the first half of this year, people LEMON TREE SETS IPO GOAL
Hope Education posted 2017 profit of close to the deal told IFR earlier.
Rmb209m on revenue of Rmb752m. Ping An Healthcare, formerly known as Hotel chain LEMON TREE HOTELS will raise up to
Citigroup and China Merchants Securities are Ping An Good Doctor, is the largest online Rs10bn (US$160m) from an IPO at a price
joint sponsors for the proposed IPO. healthcare and medical destination in China range of Rs54-Rs56 per share, according to a
in terms of the number of users. term sheet.
COMPLETION OF WUXI PLACEMENT Citigroup and JP Morgan are joint sponsors. The IPO will be open for subscription on
Following the transaction, Ping An March 26-28 and will comprise 185.5m
A share placement in Hong Kong-listed WUXI Insurance will remain a controlling secondary shares, down from the 196m
BIOLOGICS has raised HK$4.69bn (US$597.7m). shareholder of Ping An Healthcare. mentioned in the draft prospectus.

HAL stumbles on take-off
n INDIA Private sector buyers steer clear of government sell-down in crowded market
India completed its long-delayed Rs41bn “While institutional investors were able to Hotels have lined up Rs40bn and Rs10bn floats,
(US$632m) IPO of HINDUSTAN AERONAUTICS last understand the workings of a state-owned defence respectively, for March. The Indian government
week, but even heavy support from public-sector company that depends on the government entirely also wanted to meet its divestment target for the
buyers was not enough to cover the original for orders, individual investors stayed away because current financial year.
target in a crowded market. they don’t see frequent price drivers,” said a banker The poor response to the IPO is expected
HAL fell just short of its 34.1m-share target away from the float. to make the going hard for other state-owned
with 99% of the deal covered, becoming the Eventually, it was left to state-owned Life defence IPOs, especially in an overall weak market.
first undersubscribed Indian IPO since privately Insurance Corporation of India to bid for more “Some private mutual funds, which
owned Prabhat Dairy in September 2015. than half the deal, according to people with subscribed to the BHARAT DYNAMICS IPO, didn’t
The government, however, was able to close knowledge of the IPO. buy the HAL IPO once they realised they were
the offer on schedule as the rules allow an “We hardly saw any private mutual funds the only private-sector players in the deal. Now,
undersubscribed IPO to go ahead as long as it and bank treasuries in the IPO,” said one ECM more institutions will drop out,” said a banker
achieves a 10% free-float that totals at least Rs4bn. banker. working on a state-owned defence company IPO.
The institutional tranche was 1.73 times Axis and SBI Capital were joint bookrunners. State-owned missile maker Bharat Dynamics
covered, the high-net-worth individual piece completed its Rs9.6bn IPO in mid-March after
3% and the retail portion 39%, according to CROWDED MARKET investors subscribed for 1.3 times the shares on
National Stock Exchange data. Investors also had other choices in a crowded offer, but the shares plunged 15% early on their
The government offered 34.1m shares, or primary market, with Bandhan Bank out with a Friday debut. Shares closed at Rs389.80, down
10.2% of the share capital, at a Rs1,215–Rs1,240 Rs45bn IPO and Sandhar Technologies looking 8.9% from the Rs428 offer price.
price range, and received bids for 33.73m shares, for Rs5.1bn. Investors clearly preferred the The government was also looking to close
just meeting the 10% free-float requirement. The private-sector listings, covering Bandhan’s IPO the Rs4.2bn IPO of specialised alloy-maker
shares were priced at the bottom of the range. 14.63 times and Sandhar 6.19 times. MISHRA DHATU NIGAM on Friday. The deal was
At final pricing, the deal appeared reasonably Major shareholders and private equity 1.2 times subscribed by the close. State-owned
priced with a forward P/E multiple of 18, lower investors are rushing out IPOs before the end of MAZAGON DOCK SHIPBUILDERS and GARDEN REACH
than Bharat Electronics’ 25, and retail investors the financial year on March 31, in part to avoid a SHIPBUILDERS & ENGINEERS also plan to file for their
were in line for a Rs25 per share discount. Still, new 10% long-term capital gains tax that kicks respective Rs9bn and Rs7bn IPOs this month.
investors were not impressed. in from April 1. ICICI Securities and Lemon Tree S Anuradha
Vendor Citron’s technical inability to There is a 90-day lock-up period on the The Indian state-owned petrochemical
tender its shares led to a smaller offer, said company. company is looking to increase its free-float
people with knowledge of the plan. Axis Capital, JM Financial, ICICI Securities and SBI to 25% from 11.4%.
The shares sold represent 23.59% of the Capital Markets were bookrunners on the sale. The shares will be sold through a qualified
Lemon Tree’s capital. institutional placement or an institutional
Warburg Pincus affiliate Maplewood SANDHAR IPO PROVES BIG DRAW placement programme.
Investment, director Ravi Kant Jaipuria, RJ Corp, In a QIP, shares are sold to institutions
Swift Builders, Whispering Resorts and Five Star SANDHAR TECHNOLOGIES’ Rs5.1bn (US$79m) IPO via an overnight accelerated bookbuild
Hospitality are among vendors of the shares. was 6.19 times subscribed when books after the close of the market, whereas,
Citic CLSA, JP Morgan and Kotak are joint closed last Wednesday. in an IPP, shares are sold to institutions on
global coordinators and joint bookrunners The institutional tranche was 14.49 times the local stock exchanges. Only primary
with Yes Securities. covered, the high-net-worth individual piece shares can be sold in a QIP whereas both
Delhi-based Lemon Tree is a mid-market 6.39 times covered and retail 1.42 times. primary and secondary shares can be sold in
chain with two main brands, Lemon Tree The IPO involved the sale of Rs3bn of primary an IPP.
and Red Fox. shares and an offer for sale of up to 6.4m Last year, the Securities and Exchange
secondary shares from private equity firm GTI Board of India allowed companies to use
JINDAL SELLS RS12bn OF SHARES Capital at a price range of Rs327–Rs332. QIPs to increase the minimum public
Sandhar makes components for the shareholding to 25%.
JINDAL STEEL AND POWER has raised Rs12bn automobile industry. If MRPL decides to sell shares through a
(US$184m) from a sale of shares priced at Axis Capital and ICICI Securities were IPO QIP, it will be the first state-owned company
the top of a Rs225—Rs233 range. bookrunners. to do so after the rule change.
The sale comprised a base size of Rs9bn At current market prices, the share sale
and an option for an increase of Rs3bn, MRPL HIRES FOR SHARES SALE will bring a total of Rs27bn.
which was fully exercised. Oil and Natural Gas Corp owns a
The final price represented a 0.2% MANGALORE REFINERY AND PETROCHEMICALS is hiring 71.63% stake in the company, while
discount to the pre-deal close of Rs233.55 on banks for a share sale of up to Rs27bn Hindustan Petroleum Corp holds
the National Stock Exchange. (US$411m). 16.96%. Both companies are state-owned
Around 14 investors participated and the Axis, Citigroup and SBI Capital are among entities.
top five bought 90% of the shares. Foreigners the banks that responded to a request for MRPL refines and manufactures
accounted for 70% of the investors. proposals in mid-March. petroleum products.

EQUITIES ASIA-PACIFIC
BANDHAN IPO SETS RECORD ¥18bn (US$172m) through the sale of 18.4m
secondary shares at ¥979.8 apiece. PHILIPPINES
BANDHAN BANK’s IPO of Rs45bn (US$692m) was The shares were priced at a discount of 8%
14.63 times subscribed when books closed to the pre-deal close of ¥1,065. The discount SMPFC DELAYS FOLLOW-ON
last Monday, according to stock exchange was near the top end of the 5%-9% indicative
data. range. SAN MIGUEL PURE FOODS has deferred a planned
India’s largest bank IPO on record is set to Books were covered twice and the top five Ps100bn-Ps150bn (US$1.9bn-$2.9bn)
be priced at the top of the Rs370–Rs375 range. investors bought 40% of the deal. Investors were follow-on share offer to the second half of
The institutional tranche was 38.67 times a mix of international long-only institutions, this year from the first.
covered, while the high-net-worth hedge funds and existing shareholders. In a stock exchange announcement, SMPFC
individual piece was 13.89 times covered After the sell-down, Hirao’s stake in has confirmed as accurate a news report that
and the retail portion 1.2 times. Criticism Zigexn falls to 49.9% from 66.5%, allowing the offer may take place in the third or fourth
that the IPO was priced expensively led to the company to enjoy a lower tax rate as a quarter to give investors “a chance to digest”
the subdued retail interest. single stakeholder will own less than 50% of multiple stock offerings in the market.
Up to 119.3m shares will be sold in the its shares. Metropolitan Bank & Trust (Metrobank) is
IPO. Of these, 97.7m are primary and 21.6m An increase in the free-float to 49% from currently raising Ps60bn through a rights
secondary. 32.5% will also make Zigexn eligible for offer, while Bank of the Philippine Islands’
Axis, Goldman Sachs, JM Financial, JP Morgan transfer to the TSE First Section from the Ps50bn rights offer will open in mid April.
and Kotak were bookrunners. TSE Mothers market. Rizal Commercial Banking also plans a
There is a 180-day lock-up on the issuer Ps15bn rights offer.
RELIANCE GENERAL DELAYS IPO and selling shareholder. Late last year, parent San Miguel
Deutsche Bank and Nomura were joint announced plans to merge its beverages
RELIANCE GENERAL INSURANCE has pushed back bookrunners. business into SMPFC (to be renamed San
the launch of its planned IPO to the second Miguel Food and Beverage), in a deal that
half after failing to obtain the valuation it TECHNOPRO SHARES FETCH ¥12.9bn would push its free-float below the 5% mark.
wanted, people with knowledge of the The aim of the follow-on offer is to increase
transaction have said. TECHNOPRO HOLDINGS has raised ¥12.9bn the free-float and to fund capital
The company was earlier targeting a (US$123m) from the sale of 2m primary expenditure.
launch before March 31 for the expected shares at ¥6,439 each, according to people Philippine companies must have a
Rs12bn–Rs15bn (US$184m–$230m) float. with knowledge of the transaction. minimum free-float of 15%.
Reliance General has been looking at a The shares were priced at the top of the SMPFC is currently in the process of
valuation of Rs70bn, whereas investors are 2%-6% discount range. hiring banks for the offer.
more comfortable with Rs50bn–Rs55bn. The Japanese staffing company will use
The overall fall in the market is the proceeds to repay debt and for capital MITSUBISHI SELLS AYALA BLOCK
prompting investors to seek lower prices for expenditure.
new issues. The benchmark S&P BSE Sensex The shares, representing 5.8% of the MITSUBISHI has sold an upsized Ps7.94bn
is down 4.5% in the year to-date after rising company’s capital, were sold to international (US$152m) block of AYALA shares at the bottom
by 28% in 2017. investors. Around 50 accounts participated of an indicative price range of Ps934–Ps964.
In the draft prospectus, Reliance General and the top 10 got 50% of the shares. The Japanese trading house disposed of
said 16.76m primary shares and 50.3m There is a 90-day lock-up period on the 8.5m shares, or 1.37% of the Philippine
secondary shares would be sold in the IPO. company. property group’s capital, as opposed to the
Parent Reliance Capital is the vendor of the Nomura and UBS arranged the sale. originally planned 6.2m.
secondary shares. Around 40 accounts participated and the
The shares are to be listed on the BSE and top 10 were allocated two-thirds of the shares.
National Stock Exchange. MALAYSIA The final price represented a 7.5%
Credit Suisse, Motilal Oswal, Edelweiss and discount to the pre-deal close of Ps1,010.
UBS are the joint global coordinators, and UMW AIMING FOR M$1.1bn RIGHTS Ayala shares closed 7.2% lower at Ps937 on
bookrunners with Haitong Securities and IDBI the Philippine Stock Exchange last Tuesday.
Capital Markets. UMW HOLDINGS plans to undertake a Before the stake sale, Mitsubishi owned
Reliance General posted a net profit of M$1.1bn (US$281m) rights issue, subject to 10.15% of Ayala.
Rs1.28bn for the financial year to March 31 the acquisition of a 50.07% stake in MBM There is a 90-day lock-up period on the
2017, up 28% from 2016. Resources. vendor.
The company is the latest Indian insurer UMW has said in a stock exchange UBS was the sole bookrunner.
to plan an IPO after SBI Life Insurance, announcement that the entitlement ratio
General Insurance Corporation of India, The and price will be decided later.
New India Assurance, HDFC Standard Life The proceeds will be used to repay loans SINGAPORE
and ICICI Lombard listed last year. and meet working capital needs.
Government-linked asset management SASSEUR IPO PULLS IN 50
firm Permodalan Nasional is expected to
JAPAN take up its entitlement as a 57.47% owner of SASSEUR REIT’s S$396m (US$301m) Singapore
the company. Exchange IPO drew 50 accounts at the close of
CEO SELLS ¥18bn ZIGEXN BLOCK Maybank is the adviser on the offer. institutional books last Wednesday, according
UMW is an investment holding to people with knowledge of the float.
Joe Hirao, the president and CEO of Japanese company with interests in the automobile, The investors were a mix of real estate
online media company ZIGEXN, has raised oil-and-gas and heavy-equipment businesses. funds, long-only institutions and private

banking clients. The top 20 accounts took up suggesting the companies to be privatised On Friday, the stock was again flat to
70% of the placement tranche. are worth E£430bn and it would sell 15%- pricing.
The REIT is selling 495m units at a fixed 30% of each. Danske Bank was global coordinator and
price of S$0.80, implying yields of 7.5% for The flotations should be completed in the joint bookrunner with Handelsbanken.
2018 and 7.8% for 2019. next two to two-and-a-half years with the
Of the available units, 13 cornerstone aim of increasing the market capitalisation ALTIA PRICED AT BOTTOM THEN
investors have committed to buy 228.4m. of the Egyptian stock exchange and raising TRADES UP
Around 252.8m units were sold in the retail share ownership. The initial list of
institutional tranche and 13.75m units will over 20 companies covers oil and refiners, Drinks company ALTIA priced its €150m
be sold to retail investors. petrochemicals, logistics, financial services, Helsinki float at the bottom of the €7.50 to
The retail tranche opened last Thursday real estate, consumer and industry. €9.00 price range for a deal size of €150m on
and closes on Monday. The Egyptian government has a Friday.
There is a greenshoe option of 32m units. prominent place in recent ECM history as it The deal was almost entirely secondary,
The 13 cornerstone investors are JD.com was the only major seller to follow Google’s with selling from the Finnish state and a
subsidiary Adriot Ideology, CKK Holdings, Secoo route to market using an auction-based tiny employee offering of 180,485 shares
Holding, Entrepolis, Bangkok Life Assurance, pricing mechanism in the December 2005 priced at €6.75.
TMB Asset Management, Great Achievement privatisation IPO of Telecom Egypt. The shares debuted just above pricing at
and Success, Haitong International Financial In that IPO investors submitted orders €7.55 and had pushed up to €7.72 in the
Products (Singapore), Sparkling Gateway, DBS with price and volume and then the VWAP run-up to the close, up nearly 3%.
Bank, Credit Suisse (Singapore), Credit Suisse of the final book was used to set the price, The market capitalisation is €271.1m and
(Hong Kong) and DBS Vickers. meaning it was not a process to maximise the free-float 56%, rising to 64.3% on full
The REIT will comprise four Chinese price but rather to reflect all orders received. exercise of a 15% secondary greenshoe.
outlet malls. Sasseur REIT, part of Shanghai- Considering it hasn’t been used in a deal of Nordea was adviser, sole global
based mall operator Sasseur, has backing note over the past decade it is unlikely Egypt coordinator and joint bookrunner with
from investment funds L Catterton Asia and will revive it. Carnegie, with OP Corporate Bank as co-lead
Ping An Real Estate. This will rank as the manager.
first pure retail outlet mall REIT IPO in Asia.
BOC (Singapore) and DBS are the joint FINLAND TAMARES TRIMS STAKE IN OUTOTEC
global coordinators, and bookrunners with
CICC, Citigroup, Credit Suisse, Haitong Securities HARVIA FEELS THE HEAT BUT STAYS Real estate investment group Tamares sold a
and Maybank. AFLOAT 5.57% stake in technology group OUTOTEC on
Wednesday night for a €77.5m return.
Sauna group HARVIA is a feel-good investment, The offering launched following a wall-
TAIWAN according to the investor relations section of crossing earlier in the day that had provided
its website, but buyers in its €51.3m Helsinki indications of interest for approximately
SHIN KONG PLANS CAPITAL-RAISING float would have felt the heat as the shares 90% of the 10.2m shares on offer. Books
opened on Thursday 2% above €5 pricing at were formally covered within half an hour
SHIN KONG FINANCIAL has announced a long-term €5.10 but inched down as the day progressed and pricing came at €7.60, a 3.57% discount
capital-raising plan, involving either a domestic to close at the issue price. to the €7.882 close.
offering of rights shares or an overseas issuance At pricing, Harvia had a market The shares closed the following day at
of global depositary receipts. capitalisation of €93.5m and a free-float of €7.452.
According to an announcement from the 55%, rising to 63.1% on full exercise of a Deutsche Bank was sole bookrunner.
Taiwanese firm, it plans to issue up to 1bn secondary greenshoe. Primary was fixed at
shares. Its shares closed at NT$11.35 on €45m, with CapMan selling just 1.25m
Friday, which would put potential proceeds shares in the base deal. FRANCE
at up to NT$11.35bn (US$389m). The bulk went to institutional investors,
Shin Kong did not specify the use of the with retail comprising only 7.3% of the deal ALTRAN RIGHTS ISSUE TO FINANCE
potential funds raised. The proposed issuance and an employee offering 1.2%. The ARICENT BUY
is now awaiting shareholder approval. company said that more than 20% of
employees in Finland and Austria are now IT consultancy ALTRAN set terms on a €750m
shareholders, having paid a slightly rights issue that will refinance a portion of
discounted €4.50 per share. the company’s debt following the
The institutional book was highly acquisition of California-based design and
EUROPE/MIDDLE concentrated, with two-thirds taken by the engineering services business Aricent in a
EAST/AFRICA top 10 accounts, bolstered by significant €1.7bn deal.
domestic interest – “it’s a sauna business, The capital increase comprises 81.22m
this is what Finns do” – and long-only new shares on an 8-for-17 basis at €9.23, a
EGYPT demand, with hedge funds allocated just 25.6% discount to TERP of €12.41 based on
10%. The one-on-one conversion rate was the March 20 close of €13.90. Apax Partners,
EGYPT TARGETS US$4.5bn FROM above 60%. which holds 8.4% through Altrafin
PRIVATISATIONS At €5, Harvia has an estimated 2018 Participations, said it intends to subscribe on
dividend yield of 7.4%, while imperfect a pro rata basis.
The Egyptian government has outlined a comps such as car roof box maker Thule Rights trading runs to April 5, with
privatisation programme to raise E£80bn trade at around 3.8% and fitness equipment subscription finishing on April 9 and a result
(US$4.5bn), with the finance ministry maker Technogym at 1.15%. on April 13.

EQUITIES EMEA
The rights issue is fully underwritten by cost of around €794m for a stake acquire a 5% stake through the IPO and
joint bookrunners Credit Agricole-CIB, accumulated over three years. Tikehau Capital had indicated a €250m
Goldman Sachs and Morgan Stanley. The main component of the transaction order without price limits during the
was a fixed-price ABO of 13.38m Ubisoft bookbuild.
DBV HAS BAKED IN DEMAND shares, which comprised 10.5m shares At €32.50, DWS has estimated 2019
provided by Vivendi, plus 2.89m shares sold consensus P/E of 11 and a dividend yield of
Taking a page from recent biotech IPOs, by Credit Agricole-CIB as part of a hedging 6.3%. That compares with peers Amundi,
French immunotherapy specialist DBV strategy. The number of shares sold by BlackRock and Schroeders, which trade
TECHNOLOGIES backed its US$150m overnight Vivendi in the bookbuild included an upsize respectively with P/E of 13.54, 18.26 and 14.17,
equity raising with insider commitments for of 1.5m shares. and dividend yield of 4.64%, 2.21% and 3.6%.
half of the deal. The hedging is related to a collar Deutsche Bank was sole global coordinator
Morgan Stanley, Goldman Sachs, Barclays and financing used by the Guillemot Brothers, and joint bookrunners with Barclays, BNP
Deutsche Bank priced 7.1m shares at the family behind Ubisoft, to acquire 3.03m Paribas, Citigroup, Credit Suisse, ING, Morgan
US$21.26, a 3.4% discount to last sale. shares from Vivendi. Stanley, UBS and UniCredit. Banca IMI,
Existing shareholders led by Baker Sole global coordinator JP Morgan and Commerzbank, Daiwa, Nordea and Santander
Brothers Investments and DBV CEO Pierre- joint bookrunner Credit Agricole-CIB launched were co-lead managers.
Henri Benhamou agreed to invest up to the bookbuild at 5:10pm London time, and
US$73.5m. Baker Brothers is well known for there was a covered message within 30 TRITON BREAKS LOCK-UP FOR BEFESA
investing in follow-on stock sales of minutes. SELL-DOWN
portfolio holdings to avoid being diluted. The book was closed at 7:10pm. The ABO
After recently completing Phase III trials is valued at €882.9m. Private equity group Triton sold 8.8% of
on its peanut allergy drug, DBV expects to In addition, Vivendi’s disposal provided recycling company BEFESA in an accelerated
file for FDA approval. an entry point for two anchor investors sell-down on Tuesday evening, six weeks
The company will use proceeds to fund identified by Ubisoft, the biggest of which before the expiry of a six-month lock-up put
the commercial launch of its ViaSkin Peanut was Tencent with the acquisition of 5.59m in place when the shares were listed last
drug as well to support clinical trials on shares, and Ontario Teachers’ Pension Plan, November.
other drugs. which acquired 3.79m shares. The selling shareholder came to the
DBV shares trade on both Euronext Paris The remaining 7.59m shares, market after the close with 3m shares
and Nasdaq. representing 6.8% of the share capital, were without price guidance. A wallcrossing
sold to Ubisoft as part of the company’s exercise earlier in the day generated interest
VIVENDI CHOREOGRAPHS UBISOFT EXIT share buyback programme. that covered around 50% of the deal.
There was a covered message after around
Vivendi has called a halt to a distracting 25 minutes, with pricing later confirmed at
attempt to take over gaming group UBISOFT GERMANY €38.50, which represents a 7.23% discount to
and distributed its entire 27.27% stake in a Tuesday’s €41.50 closing price. The sale is
series of sales along with an accelerated DWS SLOWLY RISES ON DEBUT valued at €115.5m.
bookbuilt offering, all priced at €66 per Following the sale, Triton retains 40.7% of
share. DWS stock initially threatened to ruin Befesa’s share capital, subject to a 60-day
Ubisoft has fiercely resisted Vivendi’s everyone’s weekend, opening on Friday lock-up agreement.
efforts at building a stake, refusing to cede above pricing at €32.55 but then dropping The Ratingen, Germany-based group
seats on the board, and arguing that a quickly as low as €32.265 before very collects hazardous dust from steel mills and
hostile takeover by Vivendi would “kill slowing inching up. extracts the zinc, which it sells to companies
creativity” and destroy shareholder value. Shares in the Deutsche Bank asset such as Glencore. Triton bought the
In a surprisingly elegant but complicated management unit closed up 1.78% at €33.08, company from Abengoa in 2013 for €1.1bn
exit, Vivendi sold 30.49m Ubisoft shares on with just over 6m shares changing hands, including debt.
Tuesday evening for €2.01bn, which representing just over 15% of the IPO In November, Triton sold 14.308m shares
represents a significant gain on an entry offering. - around 42% of the share capital – at €28 per
The other big German IPO to list pre- share. A greenshoe was exercised in full
EMEA EQUITIES Easter was Siemens Healthineers, which increasing the free-float to 48.3%.
BOOKRUNNERS: 1/1/2018 TO DATE finished last week more than 12% above IPO The selldown was managed by the global
Managing No of Total Share pricing. coordinators for the IPO, Citigroup, Goldman
bank or group issues US$(m) (%) Pricing for DWS came at €32.50, as had Sachs, and JP Morgan.
1 Goldman Sachs 19 4,752.79 11.8 been indicted during the day on Thursday
2 JP Morgan 12 2,926.19 7.2 when bookbuilding had wrapped up. The RIB RAISES CASH FOR INVESTMENTS
3 Deutsche Bank 16 2,600.39 6.4 €30-€36 range had been narrowed to €32-
4 Citigroup 14 2,493.27 6.2 €33 on Wednesday and to €32.50-€33 first RIB SOFTWARE raised €131m for investments
5 UBS 7 2,248.26 5.6 thing on Thursday. in service providers on Thursday night,
6 Morgan Stanley 16 1,792.47 4.4 At €32.50, the base deal size is €1.3bn and pricing an offering of 4.68m shares at €28, a
7 Credit Suisse 9 1,788.03 4.4 the market capitalisation was €6.5bn, with a 9.7% discount to the €30.02 close.
8 Investec 8 1,477.69 3.7 free-float of 20%. On full exercise of a 15% The offering represented 10% of share
9 SG 8 1,467.08 3.6 secondary greenshoe, the free-float rises to capital and approximately 15 days’ trading.
10 Barclays 8 1,431.37 3.5 22.25%. There was also an upsize option that The shares opened at €27.42 on Friday and
Total 214 40,430.60 went untouched. plummeted more than 23% to €23.82 in the
Including all domestic and international deals and rights issues The top 20 accounts took 75% of a book of run-up to the market close.
Source: Thomson Reuters SDC code: C4cr around 200 lines. Nippon Life said it would Berenberg was sole bookrunner.

SERVICEWARE TO FLOAT AFTER IGD is offering 29m shares at €5.165, a Varo intends to pay a dividend of 30% to
EASTER BREAK 24.75% discount to TERP of €6.8634, based 50% of underlying annual profit after tax on
on last Wednesday’s €7.47 close. a semi-annual basis, with the first expected
SERVICEWARE, an enterprise service Coop Alleanza has irrevocably committed in the second half of 2018 for the six months
management business, is targeting primary to subscribe pro rata to its 40.92% to June 30 2018.
proceeds of €60m in a Frankfurt IPO shareholding, representing €61.37m. The Credit Suisse, Deutsche Bank and ING are joint
expected to straddle the Easter break. balance is underwritten by joint global coordinators, and joint bookrunners
The founders, CEO Dirk Martin and CFO bookrunners Banca IMI, BNP Paribas and with Bank of America Merrill Lynch and
Harald Popp, will also sell shares in the float. Morgan Stanley. Citigroup. ABN AMRO is advising and The ECM
There is a 15% secondary greenshoe. Rights trading begins on Monday, March Team is transaction manager.
Proceeds from the float will finance 26 and runs to April 9, with subscription
growth via M&A, as well as a scaling-up of closing on April 13. NIBC STRUGGLES ON DEBUT
the company’s sales force to increase
penetration with large enterprise Mid-tier bank NIBC struggled on debut on
customers. NETHERLANDS Friday, opening at €8.30, more than 5%
Pre-marketing began on Monday March below pricing in its €320m Amsterdam IPO
19, suggesting bookbuilding will begin after VARO ENERGY IPO TO STRADDLE EASTER of €8.75.
the Easter break and finish around April 13. The stock rose a little during the day in
Commerzbank and Hauck & Aufhauser are Fuel supplier VARO ENERGY has begun pre- the run-up to a close of €8.43.
joint bookrunners. marketing a Euronext Amsterdam IPO, At €8.75, NIBC’s market capitalisation was
taking the less-well-trodden path of €1.28bn. The free-float is 25%, rising to 27%
straddling the Easter holidays. on full exercise of the greenshoe, which
ISRAEL Pre-marketing will run up to Good Friday appeared unlikely given Friday’s trading
at the end of the week, with bookbuilding woes.
ENERGEAN SLIPS BUT BARELY TRADES and roadshows kicking off in early April A banker that worked on the float said
following Easter Monday. that NIBC had not been helped by difficult
Trading remained extremely light in The IPO is all-secondary, with selling markets for banking stocks and a generally
ENERGEAN OIL AND GAS last week, underlining coming from Carlyle, Reggeborgh Invest weak tape on Friday.
just how tightly allocated the £330m IPO and Vitol Holding. The expectation is that The top 10 accounts took approximately
was earlier this month. the free-float will be 30% to 40%. 80% of the deal, including a sizeable anchor
Clal Insurance was the largest buyer Management has already been through a order that will probably lead to a disclosable
taking a 10.3% stake in the company and couple of rounds of pilot-fishing and the position.
highlighting the Israeli interest in the deal. business is expected to be valued at €2bn to Pricing represents estimated 2018 book
The other three buyers with disclosed stakes €3bn, which would suggest a deal size of up value on consensus of 0.74, with a dividend
show breadth even if the order book was not to €1.2bn. yield of 5.8%. Peers ABN AMRO and ING
long. Capital acquired a 7.1% stake, Pelham Varo is one of the few IPOs that will run trade at 1.1 and 5.7% and 1 and 5.34%,
Capital 4.7% and sector specialist Kerogen across the Easter break and Germany’s respectively.
3.6%. Serviceware is another. Citigroup, Deutsche Bank and Morgan Stanley
Together those four account for 54% of “It plays to our advantage as the were joint global coordinators and joint
the deal, and 80% went to the top 10 proposition takes time to understand, so the bookrunners with ABN AMRO and ING.
investors. The short book ensured that break is not a problem,” said a banker
when the deal needed to be re-cut it could working on the Varo deal. SLOWLY BUT SURELY FOR B&S
be done at the last minute without causing “They were keen to get to market as
delay to the listing. quickly as possible and with others pricing Wholesaler B&S made an inauspicious start
The shares debuted on Friday March 16 ahead of the break, we may well have the to public life, with the shares debuting in
with nearly 445,000 shares traded, versus a market largely to ourselves.” Amsterdam on Friday at €14.10, 2.75% below
75.6m primary share deal size. Activity was Varo produces and supplies oil products the €14.50 IPO pricing.
more muted last week with just 13,929 for cooking, the plastics industry, transport, By the early afternoon, however, the
shares changing hands on Tuesday and as and bitumen for road construction in north- stock was trading above at €14.51, with just
much as 231,258 on Thursday. Shares closed west Europe, specifically Switzerland, over 2m shares changing hands,
on Friday at 418p, versus the 455p offer Germany, the Benelux countries and France. representing approximately 8% of the IPO
price. There is no greenshoe. Varo operates two refineries, a bitumen offering. The stock closed at €14.5020.
plant, 144 distribution outlets (both owned At €14.50, B&S had a market capitalisation
and leased), 232 retail outlets comprising of €1.221bn. Founder and member of the
ITALY fuel service stations and supply outlets, as supervisory board Willem Blijdorp, CEO Bert
well as 12 river bunker stations. Meulman and members of management sold
IGD TARGETS €150m FOR PROPERTY The company reported revenues of 24.69m shares at the bottom of a €14.50-
PORTFOLIO US$13.4bn in 2017, up from US$10.47bn in €17.75 price range for a €358m deal size.
2016 and US$7.65bn in 2015, with Pricing for B&S represents an estimated
Property group IMMOBILIARE GRANDE underlying Ebitda increasing to US$371m in EV/Ebitda on consensus for 2018 of 12,
DISTRIBUZIONE SIIQ is raising €150m through a 2017 from US$328m in 2016. As of the end compared with Bunzl at 12.5, DKSH and
5-for-14 rights issue to finance the of 2017, the leverage ratio was 0.6. DCC at around 13-13.5 and the significantly
acquisition of a portfolio of four shopping CEO Roger Brown said that the company larger IMCD at 16.
galleries and a retail park in northern Italy had expanded through investments, The free-float is 29.3%, rising to 33% on
from Eurocommercial Properties. including nine acquisitions since 2014. full exercise of a 12.5% secondary greenshoe.

EQUITIES EMEA
Blijdorp and Meulman are left with 52.8% support from France, Germany, Benelux and around NKr28.30 in the early afternoon
and 17.5% stakes respectively, dropping to Sweden. UK funds were in attendance, but less before a close at the IPO price of NKr29.
50.8% and 15.9% if the greenshoe is fully visibly than is often the case. At NKr29, the deal size was NKr7.27bn
exercised. Both are subject to 360-day lock-ups. Pricing at €10 represents estimated 2018 (US$940m), of which NKr5.2bn was fixed
The top 10 accounts took 70% of the deal, EV/sales of two times, a discount to peers primary proceeds. Bluestar sold 42.5m shares
with expectation that there will be a couple Aumann, Varta and Voltabox, which trade and retains a 61.8% stake, dropping to 56.1%
of investors declaring positions. on 2.58, 2.62 and 4.23, respectively. Notably, on full exercise of a 15% secondary
Approximately 80% of the deal went to long- both Varta and Voltabox have come off their greenshoe. The free-float is 38%, rising to 44%
only accounts, with retail taking around 5%. early trading highs when they were up on full exercise of the greenshoe. At NKr29
“It was a very crowded calendar and that’s around 25% and 35%, respectively, trading per share the market cap was NKr16.86bn.
the only reason I can see for hedge funds on Thursday afternoon up approximately Although there was a retail tranche, just
paying so little attention to this and a few 8.46% and 5% versus their IPO prices. 0.6% went to retail, with the top 10 orders in
other deals that suffered all of the attention ABN AMRO and Barclays are joint global the institutional tranche taking 50% of the
being absorbed by [Siemens] Healthineers, coordinators and joint bookrunners with shares on offer and the top 20 orders
DWS and the big Tencent block this week,” Rabobank/Kepler Cheuvreux. accounting for 70%.
said a banker working on B&S. “The only ABG Sundal Collier and Morgan Stanley were
question people had on B&S was whether joint global coordinators and joint
they can achieve their organic growth NORWAY bookrunners with Carnegie, Citigroup and
ambitions, and the proof of that will be Nordea.
when results come out.” FJORDKRAFT HANGS AROUND TOP OF
“Generalists and hedge funds will have to RANGE PRICING NORWEGIAN RAISES NKr1.3bn AFTER
pick and choose when there are more than a WARNING ON LOSSES
dozen IPOs in the market - they can’t price FJORDKRAFT stock opened up 3.2% at NKr32 on
into all of them. If it’s a high-quality Wednesday after pricing at the top of a Low-cost airline NORWEGIAN AIR SHUTTLE raised
business, it will find an audience. Most deals NKr28-NKr31 range for its NKr1.214bn NKr1.3bn (US$168m) on Tuesday night after
got done, perhaps with less oversubscription (US$157m) Oslo IPO. warning of a larger-than-expected loss in the
than you might have with just a handful of The shares pushed up to NKr32.90 in early current quarter.
deals in the market at once, but you also get trading but drifted down to just above Arctic Securities, Carnegie, Danske Bank and
more fundamental believers as they tend to pricing in the early afternoon. The shares Pareto were joint lead managers on an offering
pick the ones they really believe in.” closed flat to pricing, with 9.46m shares of 8.38m shares that priced at NKr155, a 9.67%
ABN AMRO, ING and Morgan Stanley were changing hands, representing discount to the NKr171.60 close. The offering
joint global coordinators and joint approximately 24% of the IPO offering. was split into two tranches, with 2.95m shares
bookrunners with Deutsche Bank and The stock hung around NKr31, closing at that will settle on March 23 and 5.43m shares
Rabobank. that level again on Thursday and remaining conditionally placed and subject to approval at
there for much of Friday. an EGM on April 4.
REPRICED ALFEN INCHES UP Pricing at NKr31 represents a market Following wall-crossing to existing
capitalisation of NKr3.239bn. shareholders since the previous Friday, the
Energy group ALFEN joined the below-the- Selling came from BKK and Skagerak, trade launched with indications of interest
range club on Wednesday, after opting for a which retain stakes of 31.5% and 31%, for all of the shares on offer. HBK Holding,
fixed price of €10 versus an original range of respectively, dropping to 28.7% and 28.2% on controlled by CEO Bjorn Kjos and chairman
€11.25-€15 on the final day of bookbuilding. full exercise of a 15% secondary greenshoe. Bjorn Halvor Kise, committed at launch to
The number of shares on offer did not The free-float is 37.5%, rising to 43.1% if the invest pro rata to its 25.38% shareholding.
change, with Infestos selling 8.5m shares for greenshoe is fully exercised. The top 20 orders represented 90% of a
a deal size of €85m. Infestos is also providing In total, there were 1,400 new multiple times covered book of around 200
a 1.275m greenshoe, which if exercised shareholders including retail, which lines that was dominated by domestic money.
would lift the free-float to 48.88% from represented just 5.4% of the float. The shares closed at NKr169 on
42.5% on the base deal. ABG Sundal Collier was sole global Wednesday, down 1.52% on the day.
The bookbuild was extended to 4:30pm in coordinator and joint bookrunner with
London from 1pm originally and books were SpareBank 1 Markets. BORR FUNDS PARAGON ACQUISITION
covered on the full deal size at €10 including
the greenshoe. BOTTOM PRICING ELKEM RECOVERS BORR DRILLING raised US$250m on Thursday
Alfen shares opened at €10.066 on AFTER FALLS ON DEBUT night to finance its acquisition of Paragon
Thursday, and despite ticking up to €10.44 Offshore.
in the morning, the stock was in reverse in Shares in chemicals and materials business The fundraising comprised 54.34m
the afternoon, shifting down for a close of ELKEM opened down on debut on Thursday, shares, representing 11.36% of share capital,
€10. On Friday afternoon, the shares were having priced at the bottom of a NKr29- at US$4.60.
just above pricing at €10.04. NKr35 price range, but recovered by Friday’s The offering was split into two tranches,
“The market is a bit soft today [Thursday], close. with the first comprising 46.7m shares
but downsizing the transaction was the The stock opened at NKr27.95, down 3.6%, which the company had permission to issue
right thing to do,” said a banker involved in and drifted further down during the day for on a non pre-emptive basis. A second
the float. a close of NKr27.80. Over 100m units tranche of 7.64m shares has been
The top five accounts took more than 60% of changed hands from a deal size of 221.8m conditionally placed and requires
a book heavily skewed to long-only accounts, shares. authorisation by an EGM on April 5.
with the top 20 orders taking approximately Opening at the same level on Friday, the Borr Drilling stock closed up 2.75% on
80%. Continental Europe dominated, with good shares made a minor recovery, trading at Friday.

ABG Sundal Collier, Clarksons Platou, Danske, Sensirion is the third IPO this year to price The company has raised £75m since an
DNB, Fearnley Securities, SEB and Pareto were at the top of the range following IntegraFin April 2016 IPO, deploying all proceeds
joint bookrunners. and Fjordkraft. At that pricing the deal size alongside debt financing in acquisitions
was SFr276m (US$291m) and the market cap worth in excess of £125m.
was SFr504m. Primary was fixed at SFr55m, Final details of the placing will be
SOUTH AFRICA with secondary selling coming from announced on or before March 29.
majority shareholder Gottlieb Knoch. Canaccord Genuity is sole bookrunner, with
SOUTHERN PALACE CLEARS On full exercise of a 15% primary Radnor Capital and Kinmont Advisory as placing
GROWTHPOINT STAKE greenshoe, the free-float rises to 58.33% agents.
from 54.85% on the base deal and the
Southern Palace Properties sold a 5.4% stake market cap to SFr545m. Local versus SIRIUS REAL ESTATE PLACES SHARES TO
in GROWTHPOINT PROPERTIES on Thursday night, international demand was split 60/40. RAISE £35m
with pricing coming at R27.20 for a deal size Sensirion stock closed at SFr46.345, up
of R4.33bn (US$370m). Pricing was a 5.58% 28.7% and approximately 2.8m shares London and Johannesburg-listed SIRIUS REAL
discount to the R28.81 close. changed hands on Thursday. ESTATE raised £35m on Tuesday by placing
Books were covered at around 4.30pm in Credit Suisse and JP Morgan were joint new shares to part-finance the €77m
London, about an hour after launch, with bookrunners, with Vontobel as co- acquisition of a portfolio of assets with a net
guidance of R27.10-R27.20 coming ahead of bookrunner. Lazard advised. initial yield of 7.3% and a vacancy rate of
the book closing at 6pm and investors were 17%.
warned shortly after that orders below MEDARTIS HANDS INVESTORS A GIFT The company placed 58.333m new shares
R27.20 risked missing out. at 60p per share, which represents a 12.54%
The shares represented Southern Palace’s Senior management at MEDARTIS left money discount to Monday’s 68.6p closing price.
entire holding in Growthpoint. Southern on the table in the SIX IPO of the medical The placing shares correspond to around
Palace acquired an 8% stake from the Public devices business in the interest of a strong 6.25% of the existing share capital.
Investment Corporation in July 2014. aftermarket and share register. It worked. “The portfolio assets offer an attractive
Growthpoint shares opened at R27.45 on The SFr123.9m (US$130m) IPO was priced combination of a stable income stream
Friday. at SFr48, just below the midpoint of a SFr44 together with excellent scope to create
Bank of America Merrill Lynch and Standard to SFr54 price range, despite being more additional value and will fit well within our
Bank were joint bookrunners. than 10 times covered at the top and more existing portfolio,” CEO Andrew Coombs
than 15 times subscribed at pricing. said in a statement.
The stock opened at SFr54 on Friday, up Sirius Real Estate provides workspaces in
SWEDEN 12.5% on pricing, pushing up further to a Germany, where it has a portfolio of
close of SFr61.96, up nearly 15% on the day approximately 40 business parks.
BYGGHEMMA TO PRICE AT THE MID-POINT and up 29% from pricing. Just over 1m units The company said it is trading in line with
had changed hands, approximately a third market expectations for the year to the end
Investors were guided to pricing of SKr47.50 of the IPO offering. of March.
on Thursday for the Nasdaq Stockholm IPO Primary proceeds will finance growth. Berenberg, Peel Hunt and PSG Capital are
of building supplies and home furnishings The market cap was SFr563m at pricing and joint bookrunners.
business BYGGHEMMA, ahead of books closing the free-float is around 22%, rising to 24.6%
at 4pm in London on Friday. on full exercise of a primary greenshoe, TRIPLE POINT SCALES DOWN AMBITIONS
The deal is covered throughout the which will also lift the deal size to
SKr45-SKr50 price range but owner FSN SFr142.6m. has raised
TRIPLE POINT SOCIAL HOUSING REIT
Capital intends to keep a major stake and is The split was 50/50 between domestic and £47.5m for investment opportunities,
focused on the aftermarket with trading on international accounts, with the latter substantially below the maximum
Tuesday March 27, hence pricing at the mid- segment seeing strong representation from fundraising ambition of £200m, with up to
point. US and UK funds, supported by French, 200m shares offered at 100p.
Accounts meeting management on the German and Scandinavian money. A total of 47.5m C shares were placed, of
roadshow have until 12pm on Monday to Bryan Garnier and Zurcher Kantonalbank which 33m were issued in a 2-for-3 open
place orders. were joint bookrunners, with Kepler offer. The open offer comprises 133.3m
At SKr47.50, the base deal size is SKr1.45bn Cheuvreux as co-manager. Quarton shares, suggesting take-up of around 25%.
(US$177m), increasing to SKr1.71bn if a International advised. Proceeds are expected to be deployed
5.38m share upsize is exercised. before year end.
Carnegie is sole bookrunner and joint Canaccord Genuity was sole bookrunner.
bookrunner with Berenberg and SEB. UK
CONVIVIALITY BEGINS TALKS ON
PACIFIC PLAN FOR PIPELINE FUNDRAISING
SWITZERLAND
PACIFIC INDUSTRIAL & LOGISTICS REIT is raising Franchised British off-licence chain and
SENSIRION UP MORE THAN 30% ON £50m to fund a pipeline of UK urban drinks wholesaler CONVIVIALITY has begun
DEBUT logistics assets with a gross cost of £73.6m. discussions with investors about a £125m
A placing will fund the acquisition of two equity fundraising that is needed to save the
Books were double-digit oversubscribed for portfolios and a single asset totalling 16 company.
sensor maker SENSIRION, as illustrated on urban logistics properties. Following the Proceeds from the offering, if secured,
Thursday by an open of SFr47, up more than acquisition, the company will be renamed will be used to resolve overdue payments to
30% above top-of-the-range pricing of SFr36. as Urban Logistics REIT. creditors, pay £30m to HM Revenues and

EQUITIES AMERICAS
Customs on March 29, the last working day volatility and difficult ECM conditions. ahead of the latest Fed funds rate rise.
of the tax year, and repay a £30m revolver. But huge demand for DROPBOX’s US$756m A syndicate led by JP Morgan, Wells Fargo,
There should then be some proceeds left to IPO and its strong Nasdaq debut Friday Bank of America Merrill Lynch, Morgan Stanley,
provide headroom on working capital. meant the week was far from a write-off for Raymond James, RBC Capital Markets, KBW,
The company said it began talking to US ECM bankers. Citigroup and Goldman Sachs found buyers for
investors on Wednesday and warned that Another IPO, SUNLANDS ONLINE EDUCATION, the stock at a spot reoffer price of US$17.45,
without the necessary funds it would be priced at the bottom of the range for a 2.5% discount to last sale but a comfortable
unlikely to be able to trade on a going- proceeds of US$149.5m and traded up 13.9% premium to NAV of US$16.09 at December
concern basis. on its opening trade Friday, though Israeli 31 2017.
The company had already warned in the biotech POLYPID was forced to postpone its The US$65.4m of offering proceeds will
previous week that it was considering an US$86.3m IPO. pare debt and allow TPG Specialty to reload
equity issue. The stock has been suspended The week ahead brings seven IPOs for new investments, but the BDC also has
since March 14. seeking a total of US$3.7bn, led by Chinese strategic ambitions in the space.
Investec is broker and PwC led a review of streaming service IQIYI’s US$2.4bn Nasdaq TPG Specialty has been accumulating a
the business and its funding requirements. IPO slated to price late Wednesday. stake in troubled BDC TRIANGLE CAPITAL at a
Early indications suggest iQiyi, which discount to NAV.
BURFORD FOUNDERS SLASH STAKE would rank as one of the biggest US IPOs of Yet, as CEO Josh Easterly told analysts last
the year (PagSecuro Digital in January was a month, it opted not to formally participate
The co-founders of investment manager similar size), is drawing strong interest. in Triangle’s strategic review, citing onerous
BURFORD CAPITAL sold 33% of their combined Yet with Chinese stocks under pressure in and non-customary provisions in Triangle’s
shareholdings on Tuesday afternoon in an recent sessions, the timing of the week’s non-disclosure.
accelerated sale managed by Berenberg and four China-to-US IPOs (the others are Not averse to corporate battles in the past,
Numis. GREENTREE HOSPITALITY, ONESMART INTERNATIONAL TPG Specialty bought 1.4m shares or 3% of
CEO Christopher Bogart and CIO EDUCATION and BILIBILI) looks far from ideal. Triangle during the fourth quarter.
Jonathan Molot came to the market IBEX, a Bermuda-incorporated business A successful play for Triangle would result
immediately after the close with 8.68m process outsourcing provider, is seeking up in a radical change in TPG Specialty’s
shares and price guidance of £13-£13.50 per to US$64m from the sale of 4m shares at portfolio mix and capitalization.
share. A group of potential investors was US$14-$16 apiece. The deal is slated to price As BDC Reporter noted last month, TPG
wall-crossed earlier in the day, generating post-close Wednesday. Specialty has proved a canny buyer and
good interest. Two biotech companies, HOMOLOGY “would not push the envelope too far”.
The book was covered by 5:10pm London MEDICINES and UNUM THERAPEUTICS, make up the Easterly said last month that TPG
time, with investors guided to the top of the balance and are the week’s only US- Specialty was cautiously optimistic this year
range half an hour later. domiciled IPOs. and noted the BDC had had some success in
Pricing at £13.50, which represents a 9.4% The shortened trading week (US markets taking advantage of volatility to earn
discount to Tuesday’s £14.90 closing price, are closed for Good Friday) mean that outsized returns from investments in
was confirmed when the book closed at activity will be confined to the first half of companies “where we have a differentiated
6:15pm. the week and few if any deals will price after perspective”.
The top five allocations accounted for Wednesday night. TPG Specialty, externally managed by the
around 43% of the transaction, which is Follow-on activity was light given market special situations and credit platform of
valued at £117.18m. conditions and Wednesday’s weather private equity firm TPG, holds a portfolio of
Following the sale, Bogart, who sold about interruptions, the largest offering being investments in 45 companies with a fair
4.4m shares, retains approximately 8.8m biotech ARENA PHARMACEUTICALS’ US$352.8m value of US$1.7bn.
shares which are subject to a one-year stock sale. The BDC has a US$112m exposure to the
lock-up agreement. Molot, who sold about Several deals launched but failed to price, crippled iHeart Communications,
4.3m shares, holds approximately 8.6m including a US$105m follow-on from constituting 11.6% of net assets, though says
shares, subject to the same lock-up terms. NORTHERN OIL & GAS and a US$63m follow-on this is a “well-protected” asset-backed loan.
from PROTEOSTASIS THERAPEUTICS.
TPG SPECIALTY FUNDS AT US EQUITIES

PREMIUM TO NAV BOOKRUNNERS: 1/1/2018 TO DATE
AMERICAS Managing No of Total Share
Competitive underwriting conditions, bank or group issues US$(m) (%)
earnings pressure and unsustainable asset 1 Morgan Stanley 37 7,701.66 16.7
UNITED STATES quality metrics have kept ratings agency 2 JP Morgan 45 5,752.17 12.5
Fitch negative on the business development 3 Goldman Sachs 37 5,122.25 11.1
HEAVY IPO CALENDAR BRAVES company (BDC) sector’s outlook for 2018, 4 Barclays 24 4,768.44 10.3
ROCKY MARKET and limited opportunities for the capital- 5 Citigroup 29 3,741.32 8.1
hungry but rate-sensitive sector to raise 6 BAML 31 3,077.22 6.7
The shortened trading week ahead brings equity in recent times. 7 RBC 18 2,056.19 4.5
seven US IPOs, but rocky market conditions But not every BDC has no access to ECM. 8 Credit Suisse 21 1,993.60 4.3
may make it tough for every deal to price. Though trading well down from its 12- 9 Deutsche Bank 15 1,441.18 3.1
The past week saw tech stocks tumble, month high of US$21.55, TPG SPECIALTY 10 UBS 13 1,268.03 2.8
the Federal Reserve raise interest rates and LENDING took advantage of its trading Total 185 46,077.49
the Trump Administration slap tariffs on premium to NAV to sell 3.75m shares Including all domestic and international deals and rights issues
China, contributing to greater market overnight on Tuesday, getting in a day Source: Thomson Reuters SDC code: C3r

BIOTECHS FUND DRUG DEVELOPMENT
Cancer drug developer XENCOR raised Biotech IPOs propped up by

insider support
US$226m to support an acceleration of
clinical trials this year.
Leerink Partners and Piper Jaffray priced an
upsized offering of 7.3m shares at US$31.00
on Tuesday, a slight discount to the n US Insiders soak up nearly half of IPO funding
US$31.73 last sale and a substantial increase
from the 5m shares launched. Biotechnology companies have long relied on but could seek to re-up on the IPO.
In February, Xencor dosed its first patient the support of existing investors to go public. The IPO marketing range represents a 1.85x
in a Phase I trial of its antibody to treat Some are extending the practice further, raising to 2.1x step-up in valuation from the November
neuroendocrine and gastrointestinal questions about the definition of what is truly crossover round, higher than is typical on biotech
tumours, leading to a near-30% increase in public as well as the sustainability of the current IPOs.
its shares. funding boom. Also in November, Homology signed a
The company expects to kick off clinical HOMOLOGY MEDICINES, a gene therapy collaborative agreement with Novartis that
trials on three other drugs later this year. specialist, and immunotherapy drug developer netted it a US$35m upfront payment and a
With US$625m cash post-offering, the UNUM THERAPEUTICS are both planning to go US$10m investment on the crossover round.
company has enough funding to see it public this week, with hefty insider support for Homology is planning to use the IPO proceeds
through to 2020. both IPOs. on a Phase I/II clinical trial on its lead drug as
Success in the lab does not always lead to Of the up to US$106.7m Homology is seeking well as to build out manufacturing capacity to
success in the capital markets. Cancer drug on its IPO, insiders have committed to invest support clinical trials.
developer GLYCOMIMETICS raised US$76.5m of up to US$50m. Insiders have put in for up Unum Therapeutics is pressing ahead with
funding for a pivotal trial of its leukaemia to US$37.5m of the US$81.2m that Unum is its offering after the FDA last month removed a
drug, but did so under less than ideal targeting on its IPO. clinical hold on development of its lead drug. The
conditions. Significantly, those indications of interest (IOI) regulator forced it to halt trials in December after
Jefferies and Cowen priced 4.5m shares at include only investors with board representation. two patients died during a Phase I study.
US$17.00 apiece on Tuesday, far below the Other investors are not covered by the Morgan Stanley and Cowen are marketing
US$25.01 level it traded at last month. commitment but frequently participate in IPOs. 5.8m shares at US$12-$14 apiece, with pricing
The negative reaction reflects In the case of Homology, Bank of America also planned for March 28.
disappointment that endpoints for the Merrill Lynch, Cowen and Evercore are joint In addition to the US$37.5m IOI from insiders,
upcoming clinical trial of the leukaemia bookrunners on the proposed sale of 6.67m collaborative partner Seattle Genetics will invest
drug are more onerous than expected. shares at US$14-$16 each with pricing expected US$5m in a concurrent private placement.
GlycoMimetics still needs to fund the on March 28. Unum founder Dario Campana is the
study. It now has north of US$200m of cash 5AM Ventures, a 24.8% pre-IPO investor, Arch company’s largest shareholder with a 21.7%
to do so. Ventures (22.4%) and Deerfield Management stake, followed by Atlas Venture (13.9%) and
(14.7%) are among the investors included in the Fidelity Investments (9.9%).
CISION SPONSOR CUTS STAKE IOI. Unlike Homology, Unum has not raised money
Fidelity Management and Rock Springs privately in a US$65m series B round in June
There are some signs that the SPAC boom of Capital, which anchored a US$93.5m private 2015, so it has not done a true crossover round.
recent years is running out of steam, but round in November, are not included in the IOI Robert Sherwood
that still leaves ECM bankers with work to
do at the back end.
A US$61.8m follow-on sale of shares in what is now called FGL HOLDINGS). US$250m-$256m of adjusted Ebitda this
CISION, the Chicago-based PR technology/ The Cision merger not only provided a year, up from US$225.5m last year and
“communications cloud” company merged backdoor means of going public: Cision’s versus about US$1.1bn of net debt.
with Capitol Acquisition Corp III last year, sponsor, GTCR, took majority ownership
proved a tough exercise. (68.2%) of the combined entity. TERRAFORM READIES TO FUND US$1.2bn
The deal was downsized to 5.6m shares from Now it has begun to monetize that stake, SAETA PURCHASE
8m at launch and priced at US$10.75, a 15.2% potentially a long process judging by its
all-in discount after two days of marketing. initial effort, which cut its holding to 64%. BROOKFIELD ASSET MANAGEMENT-backed yieldco
Cision’s original sponsor, private equity The shares sold equated to about 5% of Cision TERRAFORM POWER filed on March 19 for a
firm GTCR, sold 5m shares, the vast bulk of and 15 days’ volume, but volumes broke out to US$400m stock sale that will help to fund
those in the offering. nearly 4.8m shares in the aftermarket. the US$1.2bn purchase of publicly traded
On the bright side, the buyers of the The offering price was well below Cision’s Spain-based wind and solar power company
offering got a good deal. Cision shares high of US$13.68 struck in October. SAETA YIELD announced last month.
rebounded 3.9% to $11.86 in Wednesday’s JP Morgan, Deutsche Bank, Credit Suisse and TerraForm is yet to name bookrunners or
aftermarket session. RBC Capital Markets led the stock sale, though launch the deal but, as flagged last month,
At the time it was struck, the US$2.4bn Citigroup, Deutsche Bank and Credit Suisse the raise is fully backstopped by Brookfield
Cision/Capitol Acquisition merger ranked as advised on the SPAC/Cision merger. anyway.
the biggest US SPAC transaction since 2010. There is a 90-day lock-up on further sales. Brookfield plans at the very least to
There have been some big ones since Cision notionally looks cheap based on its maintain its controlling 51% stake in
then, among them CF Corp’s acquisition of 2018 adjusted net income forecast of 87-89 TerraForm. If requested by TerraForm,
Fidelity & Guaranty Life for about the same cents a share. Brookfield would backstop the whole
amount in enterprise value terms (creating The company expects to generate amount to provide certainty and ensure a

EQUITIES AMERICAS
minimum issue price of US$10.66 a share. offer, to be completed in the second quarter. ALZHEON, a biotech that is readying for
This is modestly below TerraForm’s Phase III trials on its lead Alzheimer’s drug,
Thursday closing price of US$10.70. ZUORA READIES FOR APRIL IPO also filed on March 16 for a US$80.5m IPO
TerraForm shares had risen from that could also come in April.
US$10.27 just before the Saeta acquisition ZUORA, a cloud-based software company that Citigroup and Piper Jaffray lead a four-firm
was announced on February 7 to as high as helps businesses launch and manage underwriting syndicate.
US$12.14 at the end of that month, but they subscriptions, is shaping up to be the next Alzheon first filed confidentially on
have struggled since then. US tech IPO of note amid the nascent revival December 21.
The price action suggests investors are in sector issuance.
still getting comfortable with the former The company filed on March 16 for a ARENA FUNDS OPPORTUNISTICALLY
SunEdison vehicle’s return from the capital NYSE IPO that could launch in early April.
markets cold. Backed by VC Benchmark Capital Partners ARENA PHARMACEUTICALS predictably followed a
The last time TerraForm raised equity was (11.1%) and mutual fund Wellington positive data read from a Phase II trial of its
in June 2015 when it priced a US$598.5m Management (9.4%) and led by co-founder ulcerative colitis drug with an opportunistic
follow-on at a lofty US$38.00 a share. Tien Tzuo, Zuora last year posted a 49% gain stock sale.
A lot has happened since, including the in revenues to US$167.9m but lost US$47.2m. Citigroup, Leerink Partners, Cantor, Credit
collapse of former sponsor SunEdison in The company has 950 customers, including Suisse and RBC Capital Markets priced an
2016 and Brookfield’s assumption of control 15 of the Fortune 100, in 30 countries. upsized US$352.8m follow-on offering on
in October last year. As a result of slumping Goldman Sachs, Morgan Stanley, Allen & Co Wednesday night after a day of marketing.
share prices across the sector, the yieldco and Jefferies are slated to lead a six-firm The banks priced 8.5m shares, up from
sector as a whole has found it difficult to underwriting syndicate. 7.5m shares at launch, at US$41.50 each.
access ECM in recent years. Zuora, which first filed confidentially on The offering price was a 5.7% discount to
TerraForm expects the Saeta acquisition December 12, publicly filed a US$100m last sale but a 4.4% premium to Tuesday’s
to be highly accretive, adding 24% to annual placeholder sum but the actual amount closing price of US$39.75.
cash available for distribution. raised may be higher. Arena was already up 29% when the deal
TerraForm also increased its dividend GRAFTECH INTERNATIONAL, a maker of graphite launched on Tuesday night.
target to 76 cents a share, up from 72 cents, electrodes for steel arc furnaces, is hoping to The company earlier reported patients
in the wake of the deal. ride a tariff-driven steel revival with a NYSE with ulcerative colitis that took its drug
This puts TerraForm on a circa-7% yield, IPO that could also launch next month. etrasimod in a Phase II trial showed
wider than NextEra Energy Partners (4.1%) The deal, filed publicly on March 20, will improved symptoms.
but less than Pattern Energy (9.2%). see major shareholder Brookfield Capital Patient responses after 12 weeks of
TerraForm is also getting its balance sheet Partners reduce its stake. treatment with etrasimod were similar to
in order, having recently scored an upgrade Founded in 1886, GrafTech has graphite what Celgene’s FDA-approved colitis drug
in its outlook from stable to positive from electrode factories in Spain, Mexico and the ozanimod achieved at 32 weeks, according
Moody’s in anticipation of the transaction. US. Last year it generated an US$8m net to a LifeSci Capital report.
The deal will help to lower corporate debt to profit from sales of US$550.8m. Etrasimod is considered to be safe and
cashflow towards a stated goal of 4–5 times. JP Morgan, Credit Suisse, Citigroup, RBC effective for UC and Cantor analysts believe
TerraForm expects the acquisition, which Capital Markets and HSBC are slated to lead FDA approvability was firmly established in
is being consummated by way of a tender the offering. the study.
ForeScout takes hit on ECM return

n US Cybersecurity firm prices first add-on inside lock-up but timing proves less than ideal
Cybersecurity firm FORESCOUT TECHNOLOGIES took The offering was three times oversubscribed shares while selling shareholders including
a wide discount on a US$127.9m follow-on stock with 85% of the shares going to the top 10 VC backers Accel, Amadeus Capital, Meritech
sale, its first since its IPO last October. accounts, one banker close to the deal said. Capital Partners and Pitango offloaded 3.9m
Coming ahead of lock-up expiry on April 25, “It was a highly concentrated book,” the shares. The primary proceeds will fund tax
ForeScout late Tuesday priced the sale of 4.41m banker said. withholding obligations on employee restricted
shares, or 11% of outstanding, at US$29.00, a Morgan Stanley, JP Morgan, Citigroup, stock units (RSUs).
15.9% file-to-offer discount after two days of UBS and KeyBanc Capital Markets acted as The secondary component was “intended
marketing. bookrunners. to facilitate an orderly distribution of shares
The deal appeared well timed following rival for selling shareholders”, ForeScout said in a
Zscaler’s impressive doubling on debut after its EARLY RELEASE statement.
US$180m Nasdaq IPO the previous Friday. Despite the wide discount, ForeScout was still There is a 90-day lock-up on further insider
However, ForeScout’s marketing effort able to price the deal at a big mark-up from its sales.
coincided with tech sector underperformance US$22.00 IPO price. In February, ForeScout reported a 33% increase
earlier in the week amid Facebook’s user data Morgan Stanley, on behalf of the IPO in fourth quarter revenues to US$66m but a wider
scandal. underwriters, allowed early release from the GAAP net loss of US$49.2m and negative free
ForeScout shares enjoyed some relief in lock-up, reflecting the stock’s strong post-IPO cash flow of US$7.4m. The company expects 24%
Wednesday’s aftermarket, rebounding 5.5% to performance and demand for the shares. revenue growth in the first quarter.
US$30.87 to deliver gains for new investors. The deal saw ForeScout sell 500,000 new Anthony Hughes

ECM DEALS: WEEK ENDING 23/3/2018
Stock Country Date Amount Price Deal type Bookrunner(s)
China Xinhua Education Group China 19/03/18 HK$1.3bn HK$3.26 IPO (Primary) Macquarie, ABC International, CMB International,
First Capital Securities
Sunlands Online Education China 22/03/18 US$149.5m US$11.50 IPO (Primary) Credit Suisse, Goldman Sachs, JP Morgan
Tencent Holdings China 22/03/18 HK$76.95bn HK$405 Follow-on (Secondary) BAML, Citigroup, Morgan Stanley
WuXi Biologics China 21/03/18 HK$4.69bn HK$70 Follow-on (Primary/Secondary) Morgan Stanley
Altia Finland 22/03/18 €180m €7.50 IPO (Secondary) Nordea, Carnegie
Harvia Finland 21/03/18 €51.25m €5.00 IPO (Primary/Secondary) Danske Bank, Handelsbanken
Outotec Finland 21/03/18 €77.5m €7.60 Accelerated follow-on (Secondary) Deutsche Bank
Ubisoft France 20/03/18 882.9m €66 Accelerated follow-on (Secondary) JP Morgan, CA-CIB
Befesa Germany 20/03/18 €115.5m €38.50 Accelerated follow-on (Secondary) Citigroup, Goldman Sachs, JP Morgan
DWS Germany 22/03/18 €1.3bn €32.50 IPO (Secondary) Deutsche Bank, Barclays, BNPP, Citigroup,
Credit Suisse, ING, Morgan Stanley, UBS, UniCredit
RIB Software Germany 22/03/18 €131m €28 Accelerated follow-on (Primary) Berenberg
Bandhan Bank India 19/03/18 Rs45bn Rs375 IPO (Primary/Secondary) Axis, Goldman Sachs, JM Financial, JP Morgan,
Kotak
Bharat Dynamics India 15/03/18 Rs9.6bn Rs428 IPO (Secondary) IDBI Capital, SBI Capital, Yes Securities
Hindustan Aeronautics India 20/03/18 Rs42bn Rs1,240 IPO (Secondary) Axis, SBI Capital
Jindal Steel and Power India 20/03/18 Rs12bn Rs233 Follow-on (Primary) Axis, ICICI Securities, JM Financial, SBI Capital
Sasseur REIT Singapore 20/03/18 S$396m S$0.80 IPO (Primary) BOC Limited (Singapore), DBS, CICC, Citigroup,
Credit Suisse, Haitong Securities, Maybank.
Lifestyle China Group Hong Kong 20/03/18 HK$753m HK$2.03 Follow-on (Secondary) UBS
Lifestyle International Holdings Hong Kong 20/03/18 HK$4.45bn HK$12 Follow-on (Secondary) UBS
Alfen Netherlands 21/03/18 €85m €10 IPO (Secondary) ABN AMRO, Barclays, Rabobank/
Kepler Cheuvreux
B&S Netherlands 22/03/18 €358m €14.50 IPO (Secondary) ABN AMRO, ING, Morgan Stanley, Deutsche Bank,
Rabobank
NIBC Netherlands 22/03/18 €334m €8.75 IPO (Secondary) Citigroup, Deutsche Bank, Morgan Stanley,
ABN AMRO, ING
Borr Drilling Norway 22/03/18 US$250m US$4.60 Accelerated follow-on (Primary) ABG Sundal Collier, Clarksons Platou,
Danske Bank, DNB, Fearnley Securities, SEB,
Pareto
Elkem Norway 21/03/2018 NKr7.27bn NKr31 IPO (Primary/Secondary) ABG Sundal Collier, Morgan Stanley, Carnegie,
Citigroup, Nordea
Fjordkraft Norway 20/03/2018 NKr1.21bn NKr31 IPO (Secondary) ABG Sundal Collier, SpareBank 1
NAS Norway 20/03/2018 NKr1.3bn NKr155 Accelerated follow-on (Primary) Arctic Securities, Carnegie, Danske Bank, Pareto
Growthpoint Properties South Africa 22/03/2018 R4.33bn R27.20 Accelerated follow-on (Secondary) BAML, Standard Bank
Medartis Switzerland 21/03/2018 SFr123.19m SFr48 IPO (Primary) Bryan Garnier, Zurcher Kantonalbank
Sensirion Switzerland 21/03/2018 SFr276m SFr36 IPO (Primary, Secondary) Credit Suisse, JP Morgan
Burford Capital UK 20/03/2018 £117.18m $13.50 Accelerated follow-on (Secondary) Berenberg, Numis
Sirius Real Estate UK 20/03/2018 £35m 60p Accelerated follow-on (Primary) Berenberg, Peel Hunt, PSG Capital
Triple Point Social Housing REIT UK 22/03/2018 £47.5m 100p Follow-on (Primary) Akur, Canaccord
Credit Suisse responded to the data by The company is going public via Mexico’s Global coordinator Credit Suisse marketed
increasing its price target for Arena to US$58 new Fibra-E structure, a preferred-like class 272.7m shares at Ps100 each.
from US$44 previously. of shares that promises investors a 10% fixed
Arena expects etrasimod to advance into return. GLOBAL CONVERTIBLE OFFERINGS
Phase III trials soon, but the timeframe has The Fibra-E structure is designed to BOOKRUNNERS: 1/1/2018 TO DATE
not been set. reduce investors’ exposure to market Managing No of Total Share
The company has nearly US$600m of pro volatility while funding long-term bank or group issues US$(m) (%)
forma cash to fund etrasimod’s infrastructure projects. 1 Goldman Sachs 17 4,188.88 13.8
development and possibly a new drug GACM is using some of its IPO proceeds to 2 Morgan Stanley 14 1,896.95 6.2
application further down the road. fund construction of a new airport in Mexico 3 BAML 12 1,714.82 5.6
City. The company raised another US$6bn in 4 JP Morgan 16 1,703.35 5.6
a bond offering that priced before GACM 5 Citic 3 1,413.99 4.6
MEXICO filed to go public. 6 Deutsche Bank 6 1,366.03 4.5
The guaranteed return is resonating with 7 BNP Paribas 7 1,192.85 3.9
AIRPORT OPERATOR FIELD TESTS NEW local pension funds and global 8 China International Capital 2 1,080.66 3.6
IPO STRUCTURE infrastructure investors. 9 CSC Financial 2 941.03 3.1
GACM is also generating interest among 10 China Merchants Securities 2 785.42 2.6
Mexico City airport operator GRUOPO LatAm dedicated funds. The deal was Total 102 30,413.88
AEROPORTUARIO DE LA CIUDAD DE MEXICO (GACM) is oversubscribed ahead of expected pricing on Including exchangeables.
poised to price a US$1.6bn IPO. Friday. Source: Thomson Reuters SDC code: C9

STRUCTURED EQUITY
GACM is only the second Mexico BMV IPO The company plans to use the proceeds Again bankers away from the deal said
to test Fibra-E. Electric utility CFE broke the for acquisitions and expansion. Guotai Junan that the bonds were quoted below that level
ice with its US$879m in its IPO last month. Securities and AVIC Securities are joint in the grey market. One saw levels as low as
A successful outcome for GACM could set bookrunners. 95 bid.
the stage for Mexico’s state-owned Pemex to The issuance still needs written CSRC One model gave the bonds a fair value of
bring its own Fibra-E IPO this year, or early approval. 95.2% based on a credit spread of 80bp,
next year. LONCIN HOLDING has applied to the Shanghai borrow of 40bp and 26% volatility. On Friday
Stock Exchange to make a private the bonds were quoted by one bank at
placement of three-year exchangeable 95.75/96.25 with the underlying stock down
bonds of up to Rmb3bn with shares of LONCIN 1% on the day.
MOTOR as underlying. Non-dilutive convertible bonds
STRUCTURED EQUITY Loncin Holding holds 1.04bn Loncin periodically struggle and are either pulled or
Motor shares, or 49.32% of the company’s restructured though neither happened in
issued capital. this case, leading to speculation from rival
AUSTRALIA First Capital Investment Banking is the sole banks that the deal had been backstopped
bookrunner. and banks were left holding bonds.
CROMWELL RAISES €230m FROM CBS TAIYUAN IRON & STEEL has proposed a private The negative impact of the new issue was
placement of EBs of up to Rmb1.5bn with clear on the day as the 2023s issued in 2017
Australia’s CROMWELL PROPERTY GROUP has shares of SHANXI SECURITIES as the underlying. dropped 3.3 points to 88.1.
raised €230m (US$284m) from a seven-year Taiyuan Steel holds 283m Shanxi Natixis was global coordinator and joint
convertible bond issue. Securities shares, or 9.99% of the company’s bookrunner with Citigroup, Deutsche Bank,
The CB offering was launched with a base issued capital. Goldman Sachs and HSBC.
size of €230m and an option for a €20m The placement still needs regulatory
increase. approval.
The CBs, with an investor put after 4.4 years, UNITED STATES
were marketed at a coupon of 2.0%–2.5% and a
conversion premium of 7.5%–12.5%. FRANCE HERBALIFE STEPS OUT OF ACKMAN’S
They were priced at a coupon of 2.5% and SHADOW
a conversion premium of 7.5%. CARREFOUR SYNTHETIC SLUMPS
The company will use the proceeds to HERBALIFE went on the offensive last week
repurchase up to €150m of a CB issue due S&P put CARREFOUR on negative outlook on with the sale of a new US$550m, six-year CB
2020. It will also use the funds raised to March 16 and the French supermarket after activist Bill Ackman conceded defeat in
repay debts and for general corporate chain’s share price was down 11% in the 15 a long-running battle against the nutritional
purposes. days since its results at Wednesday’s close. It supplements retailer.
Credit Suisse and Goldman Sachs were the also issued an aggressively priced non- Through Pershing Square, Ackman
joint bookrunners. dilutive convertible bond in June 2017. recently closed out a long-standing bet
Against that backdrop - and just two days against Herbalife, marking hefty losses on
after Glencore had squeezed all the juice out the short position and contributing to a
CHINA of CB investors with its own US$500m short-squeeze that has seen Herbalife shares
synthetic CB - Carrefour struggled on its run up 42% year-to-date through to Tuesday.
CB APPROVAL FOR AVIC ELECTRO return to market. Herbalife pounced with the new
The bonds were offered at 96.75%-98.00% US$550m CB overnight on Tuesday that it
AVIC ELECTROMECHANICAL SYSTEMS has cleared a China with a fixed 20% premium. Bankers away used to buy back a portion of a US$1.15bn
Securities Regulatory Commission hearing for a from the deal said that the book closed principal 2% CB that matures in August
proposed issuance of six-year convertible bonds around 12:30pm London time yet pricing 2019. Because the 2019s are in the money,
of up to Rmb2.1bn (US$332m). was not fixed until 5pm. Pricing was set at existing holders were able to roll over
96.75%. existing hedges into the new deal.
ALL INTERNATIONAL ASIAN CONVERTIBLES Bank of America Merrill Lynch and Credit
(EXCLUDING JAPAN) GLOBAL CONVERTIBLE OFFERINGS – EMEA Suisse priced the new CB at a 2.625% coupon
BOOKRUNNERS: 1/1/2018 TO DATE BOOKRUNNERS: 1/1/2018 TO DATE and 30% conversion premium, the midpoint
Managing No of Total Share Managing No of Total Share of talk and an increase from the US$500m
bank or group issues US$(m) (%) bank or group issues US$(m) (%) targeted at launch. They confidentially
1 Goldman Sachs 2 2,136.01 44.5 1 Deutsche Bank 3 922.29 19.4 marketed the deal on Monday and Tuesday
2 BNP Paribas 2 475.42 9.9 2 SG 5 607.79 12.8 to provide certainty of execution, sources
3 China Merchants Securities 1 333.33 6.9 3 BNP Paribas 4 584.09 12.3 close to the situation told IFR.
=3 Citic 1 333.33 6.9 4 HSBC 3 343.25 7.2 Herbalife shares gained 1.8% post pricing
5 Credit Suisse 2 205.48 4.3 5 JP Morgan 3 326.58 6.9 on Wednesday to US$97.88.
6 Morgan Stanley 1 200.00 4.2 6 Goldman Sachs 2 243.58 5.1 Herbalife issued the 2% CB in 2014,
7 JP Morgan 1 160.40 3.3 =6 Citigroup 2 243.58 5.1 shortly after Ackman went public with his
=7 CIMB Group Holdings Bhd 1 160.40 3.3 8 Credit Agricole 2 204.21 4.3 short position and to buy back stock as a
9 Nomura 1 142.09 3.0 9 Barclays 2 203.25 4.3 defence. The 2% notes are eligible to convert
10 Yuanta Financial Hldg 1 100.00 2.1 10 Natixis 2 181.54 3.8 at US$86.27 and the new 2.625% notes at
Total 10 4,796.89 Total 14 4,758.89 US$124.96.
Including exchangeables. Including exchangeables. Ackman, a vocal critic, capped losses on
Source: Thomson Reuters SDC code: M11 Source: Thomson Reuters SDC code: C09d the US$1bn short position at 3% of his

EQUITY-LINKED DEALS WEEK ENDING: 23/3/2018
Issuer Country Date Amount Greenshoe Tenor Coupon (%) Premium (%) Bookrunner(s)
Cromwell Property Group Australia 21/03/18 €230m €20m 7y 2.5 7.5 Credit Suisse, Goldman Sachs
Carrefour France 22/03/18 US$500m None 6y zero 20.0 Natixis, Citigroup, Deutsche Bank,
(0.55% YTM) Goldman Sachs, HSBC
Glencore Switzerland 20/03/18 US$500m None 7y zero (1% YTM) 25.0 BAML, BNP Paribas, Barclays, HSBC,
JP Morgan
Apptio US 20/03/18 US$125m US$18.8m 5y 0.9 30.0 Goldman Sachs, JP Morgan, Morgan Stanley,
Barclays
Herbalife US 21/03/18 US$550m None 6y 2.6 30.0 BAML, Credit Suisse
Blackstone Mortgage Trust US 22/03/18 US$220m US$33m 5y 4.8 15.0% BAML, Barclays, Citigroup, JP Morgan,
Morgan Stanley, Wells Fargo
Plug Power US 22/03/18 US$100m US$15m 5y 5.5% 20.0 Morgan Stanley, Barclays
Pershing Square Capital hedge fund by US$1.19 as part of an agreement to use its insignificant relative to its US$3.4bn current
purchasing puts. fuel cells in forklifts. That agreement was equity market capitalisation.
Carl Icahn, an equally boisterous expected to add US$70m of revenue last The funding strategy is straightforward.
supporter, told CNBC earlier this month year, the companies said at the time. By issuing a CB, Blackstone Mortgage is
that he hasn’t sold a single share of his 11% In July, the company expanded its paying less than the 7.8% yield it would pay
long stake and has made more than US$1bn relationship with Wal-Mart that saw it offer the if it sold common stock.
in clear profit. retail giant 55.3m warrants exercisable at For investors, the CB provides higher
US$2.11. That agreement added 30 stores, on top current income relative to other CBs with a
PLUG POWER PAYS IT FORWARD WITH of 22, that would install new charging stations. high bond floor.
US$100m CB Both the Amazon and Wal-Mart Blackstone Mortgage has US$1.5bn of
agreements are subject to US$600m of commercial loans it expects to close in coming
PLUG POWER believes in its future even as its spending before the warrants vest. months and strong pipeline of origination
critics do not. All in, there are 139.8m shares underlying opportunities, management told investors on
The hydrogen fuel cell manufacturer the Amazon/Wal-Mart warrants and CB. That the fourth quarter earnings call in February.
entered into a series of derivative contracts compares with 228.6m shares outstanding,
in conjunction with the sale of a new CB even after factoring in 14.4m shares in APPTIO SECURES PREMIUM OUTCOME ON
that will offset future stock dilution. bought back in conjunction with the CB. US$125m CB
The basic terms of the US$100m, five-year
CB will allow investors to convert at share BLACKSTONE MORTGAGE FUNDS APPTIO, a fast-growing software-as-a-service
prices above US$2.29, a 20% premium to the US$1.5bn PIPELINE provider, is the latest tech company to take
US$1.91 reference price. advantage of the hot CB market.
Plug Power used a portion of the proceeds on BLACKSTONE MORTGAGE TRUST continued its The company raised US$125m from the
a call spread to offset economic dilution from practice of utilising convertible bonds to sale of a five-year CB that priced at a 0.875%
the CB to share prices above US$3.82, a 100% fund new investments by selling a coupon and 30% conversion premium,
premium. It also entered into a five-year prepaid US$220m, five-year CB Thursday. toward the aggressive ends of 0.875%-1.375%
forward that will allow it to buy back US$27.5m Bank of America Merrill Lynch, Barclays, and 27.5%-32.5% price talk.
worth of stock at the current share price. Citigroup, JP Morgan, Morgan Stanley and Wells Goldman Sachs, JP Morgan, Morgan Stanley
In addition to offsetting dilution, the Fargo marketed the CB for one day Thursday and Barclays were joint bookrunners.
forward purchase created synthetic borrow before pricing at a 4.75% coupon and 15% Apptio, which went public in September
for technical investors. There were 33.7m conversion premium, inline with fixed talk. 2016 at US$16.00 a share, used a portion of
shares, nearly 15% of outstanding, on loan to The mortgage REIT now has US$795m of the proceeds on a call spread to offset
short sellers at the end of February. convertible debt in its capital structure, not economic dilution to share prices above
The size of the forward was increased US$60.44, a 100% premium.
from US$20m at launch to US$27.5m. ALL INTERNATIONAL ASIAN CONVERTIBLES
Morgan Stanley and Barclays marketed the BOOKRUNNERS: 1/1/2018 TO DATE ALL INTERNATIONAL US CONVERTIBLES
CB Thursday before pricing at a 5.5% coupon Managing No of Total Share BOOKRUNNERS: 1/1/2018 TO DATE
and 20% conversion premium, the investor- bank or group issues US$(m) (%) Managing No of Total Share
friendly ends of 5%-5.5% and 20%-25% talk. 1 Goldman Sachs 3 2,289.76 37.5 bank or group issues US$(m) (%)
The financing is expensive, despite being 2 Daiwa Securities 3 524.29 8.6 1 BAML 10 1,557.95 17.0
highly engineered. 3 BNP Paribas 2 475.42 7.8 2 Morgan Stanley 12 1,553.37 17.0
Plug Power, a once high-flying company 4 Sumitomo Mitsui Finl 2 401.79 6.6 3 JP Morgan 12 1,216.37 13.3
on the prospects for fuel cells, reported a 5 Nomura 3 375.42 6.1 4 Goldman Sachs 10 1,020.87 11.2
net loss last year of US$130.2m on net 6 China Merchants Securities 1 333.33 5.5 5 RBC 4 610.54 6.7
revenue US$103.3m. It had just US$24.8m of =6 Citic 1 333.33 5.5 6 Barclays 3 560.54 6.1
unrestricted cash at the end of 2017. 8 Credit Suisse 2 205.48 3.4 7 Credit Suisse 3 341.67 3.7
Plug Power has aggressively used stock 9 Morgan Stanley 1 200.00 3.3 8 Wells Fargo 5 323.75 3.5
dilution as a bridge to a hoped for 10 JP Morgan 1 160.40 2.6 9 Citigroup 3 238.33 2.6
operational turnaround. Total 16 6,110.05 10 Jefferies 3 229.20 2.5
Last April, Plug Power granted Amazon. Including exchangeables. Total 25 9,153.57
com warrants to purchase 55.3m shares at Source: Thomson Reuters SDC code: M10 Source: Thomson Reuters SDC code: C9a

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INTERNATIONAL FINANCING REVIEW INDEX
Aareal Bank 34 Country Garden Services 89 Japan Rental Housing Investments 69 Salesforce.com 76
Abu Dhabi Commercial Bank 63 CPI Property Group 73 Jefferies 12 Sandhar Technologies 90
ADES International 76 Credit Bank of Moscow 73 Jindal Steel and Power 90 San Miguel 70
Adtalem Global Education 80 Credit Suisse 12, 13, 15, 20 JP Morgan 12, 17 San Miguel Pure Foods 91
Advanced Discovery 80 Cromwell Property Group 100 KCA Deutag 82 Sanofi 21
Aegon 73 CVS 8 Kingdom Holding 74 Santander 33
AES Corp 78 Daimler 42, 43 Kiwibank 33 Santander UK 32
AIB Group 31 Danone 21, 27 KLA-Tencor Corp 81 Saudi Arabian Mining Company 74
Airxcel 78 DBV Technologies 93 Kommunalbanken Norway 26 Sensirion 96
Akelius 29 Deutsche Bank 13 Korea Resources 61 Serviceware 94
Alfen 95 Deutsche Boerse 27 Laird 65 SGG 65
Alibaba Group 87 Didi Chuxing Technology 45 Lansforsakringar Hypotek 34 Shandong Iron & Steel 57, 60
Altia 92 Dimora Brands 82 Lao Feng Xiang Jewellery Hong Kong 67 Shanghai Henlius Biotech 19
Altice 35 DNA 27, 28 Las Vegas Sands 80 Shangri-La Asia 67
Altran 92 Dole Food 80 Latitude Finance Australia 44 Shanxi Securities 101
Alzheon 99 Douyu 87 La Trobe Financial 44 Shape Technologies 79
AMAG Leasing 41 Dropbox 5, 97 Lemon Tree Hotels 89 Shenzhen Wenke Landscape 89
American Greetings 78 Dubai 74 Lenovo Group 6, 56, 60 Sherborne Investors 11
American International Group 30 Duff & Phelps 79 Lifestyle China Group 89 Shinhan Bank 59
American Water Capital Corp 77 DWS 93 Lifestyle International Holdings 89 Shin Kong Financial 92
Anheuser-Busch InBev 26 ED&F Man 76 Lindblad Expeditions 81 Sigma Alimentos 64
Ant Financial 45 EG Group 65, 84 Lions Gate 80 Sirius Real Estate 96
Apache Corp 76 Elkem 95 Live Nation 83 SK Telecom 60
Apptio 102 Energean Oil and Gas 94 LKQ 35 SMC Global Power Holdings 70
Aquila Resources 66 Engility 83 Lloyds Bank 33 SoftBank Group Corp 6, 37, 60
Arena Pharmaceuticals 97, 99 Envision Energy International 58 Loncin Holding 100 SpaceX 35
Ascletis 19 Epiq 83 Loncin Motor 100 SpecialtyCare 81
Asian Development Bank 25 Euroclear Investments 29 Lone Star 38 Spotify 5
AssuredPartners 79 Fairfax Financial Holdings 33 Macquarie Group 30 Standard Chartered 17
Atrium Windows & Doors 35 Fairhold Securitisation 39 Mangalore Refinery and Petrochemicals 90 Star Energy Geothermal 60
AT&T 9 FGL Holdings 98 Mazagon Dock Shipbuilders 90 Statkraft 28
Autohellas 41 Filtration Group 80 Medartis 96 Stockland 29
AutoWheel Securitisation 41 First Quantum Minerals 55 Men’s Wearhouse 81 Summit Power International 88
AVIC Electromechanical Systems 100 Five Arrows Managers 42 Metinvest 55, 75 Sun Hung Kai Properties 10
Aviva 20 Fjordkraft 95 MetLife 30 Sunlands Online Education 88, 97
AXA 31 Fogo de Chao Churrascaria 82 MGM Growth Properties 83 Sunrise Medical 65
Axilone 65 ForeScout Technologies 99 MHP 62 Sunshine City Group 45
Ayala 91 Freddie Mac 42 Michelin 72 Suzano Papel e Celulose 77
Bahrain 62 Futuro 41 Minerva 63 Svensk Exportkredit 25
Baidu 6, 56 GCL New Energy Holdings 67 Mishra Dhatu Nigam 90 Taiyuan Iron & Steel 101
Banca Carige 8 General Dynamics 77 Mitsubishi 91 Tasly Pharmaceutical Group 19
Banco do Brasil 63 General Mills 8 Morgan Stanley 12, 17, 20 TeamSystem 37
Bandhan Bank 91 General Motors 21, 27 Mothercare 75 TechnoPro Holdings 91
Bank of America Merrill Lynch 17 Georg Fischer 29 Motor Fuel Group 65 Tekni-Plex 81
Bank of Nova Scotia 34 Gilex Holding 63 Mozambique 61 Telefonica 28
Bank of Queensland 33 Glencore 7, 66 Navient 42, 43 Telekomunikasi Indonesia International 69
Bank Sohar 73 Globalworth 61 Navient Corporation 43 Telekomunikasi Selular 69
Banque pour le Commerce Exterieur Lao 6 9 GlycoMimetics 98 Nederlandse Waterschapsbank 25 Tencent Holdings 4
Barclays 11 GM Financial 42, 43 New Hope Corp 66 TerraForm Power 98
Basler KB 33 GNB Sudameris 63 New Look 75 Terra Tech Corp 20
Bayer 8 Goldman Sachs 17, 20, 42 New World Development 67 Teva Pharmaceutical Industries 8
Befesa 93 Goshawk Aviation 73 NIBC 94 The Stars Group 78
Beijing Capital Group 56 GrafTech International 99 Noble Group 19 TMF Group 65
Beijing Jingneng Clean Energy 66 Grail 19 Nordic Investment Bank 23 Top Glove 70
Bharat Dynamics 90 GreenTree Hospitality 97 Northern Oil & Gas 97 Toyobo 69
Bharat PetroResources 68 Grenke 27 Northern Territory Treasury Corp 26 TPG Specialty Lending 97
Bilibili 87, 97 Grosvenor Capital Management 79 Norwegian Air Shuttle 95 Traeger Grills 82
Blackstone 15, 38 Growthpoint Properties 96 NTPC 68 TravelClick 79
Blackstone Mortgage Trust 102 Gruopo Aero de la Ciudad de Mexico 100 Omnitracs 81 Triangle Capital 97
Blackstone Real Estate Partners 42 Guatemala 63 OneSmart International Education 97 Trilliant 79
Boardriders 82 Haitong UniTrust Intl Leasing Corp 66 OneSmart Intl Education Group 88 Triple Point Social Housing REIT 96
Borr Drilling 95 Hammerson 75 Outotec 92 Twenty-First Century Fox 77
Broadcom 9 Harvia 92 Output Services Group 83 Two Degrees Mobile 70
Brookfield Asset Management 98 HDFC Bank 57 Pacific Industrial & Logistics REIT 96 Tyson Foods 77
Brookfield Residential Properties 35 HelpSystems 82 Paratus 38, 39 Uber Technologies 4
B&S 94 Herbalife 101 Park Place Technologies 82 Ubisoft 93
Burford Capital 97 Heritage Bank 33 Paysafe 65 UK DMO 25
BYD 45 Hertz 41 Pepper Group 44 UK Financial Investments 15
Bygghemma 96 Hindustan Aeronautics 90 Petronas 69 UMW Holdings 91
Campbell Soup 8 HKBN 10, 85 Philippines 6 Unilever 26
CAR Inc 58 Homology Medicines 97, 98 Plaskolite 78 United Tech 8
Carpetright 75 Hong Kong Exchanges and Clearing 19 Platinum Equity 35 Unum Therapeutics 97, 98
Carrefour 7, 101 Hope Education Group 89 Plug Power 101 Valiant Bank 34
CDW 78 HSBC 22, 33 Ply Gem Holdings 35, 78 Varo Energy 94
Centrais Eletricas de Sergipe 63 HSE24 84 PolyPid 97 Verbund 71
Cequel Communications 35 Hua Medicine 19 Poly Property Group 58 Victoria Power Networks 29
Charoen Pokphand Foods 70 Hudson River Trading 80 Powerchip Technology 70 Virgin Media 37
China Jinjiang Environment Holding 66 Hui Xian REIT 68 Power Finance Corp 68 Volkswagen Financial Services 45
China Renaissance 19 Husky Injection Molding Systems 35, 81 Prestige Brands 83 Vrio 63
China SCE Property Holdings 67 Huya 87 Prince Minerals 82 Vyaire Medical 79
China Water Affairs Group 67 Ibercaja 9 Proman Holding 29 Wachovia 20
China Xinhua Education Group 88 Ibercaja Banco 30 Prosper 42, 43 Wales & West 28
Chow Tai Fook Enterprises 67 Iberdrola 27 Proteostasis Therapeutics 97 Wells Enterprises 82
Cigna 76 IBEX 97 Prudential Financial 30 Wesfarmers 66
Circet Groupe 84 IMCD 27 Puma Energy Holdings 70 West Corp 80
Cision 98 Indian Railway Finance Corp 68 Puma International Financing 70 Westpac New Zealand 33
Citigroup 12, 17, 18 Inke 87 QBE Insurance Group 30 Wiggins Island Coal Export Terminal 66
Clayton, Dubilier & Rice 35 Inovalon Holdings 78 Ratchaburi Electricity Generating 61 WuXi Biologics 89
Clifden 39 InRetail Shopping Malls 64 Reliance Communications 58 Wyndham Hotels & Resorts 80
CNX Resources 34 Insurance Australia Group 33 Reliance General Insurance 91 Wyuna Water 29
Consilio 80 Inter-American Development Bank 25 Relx Finance 21 Xencor 98
ConvergeOne 81 Internap Corp 83 Rentenbank 25 Xplornet Communications 83
Conviviality 96 International Development Association 24 RHI Magnesita 71 Yancoal 66
Corestate 36 Interxion 73 RIB Software 93 Yango Group 57
Coronado Coal 81 Investec Bank 74 Rio Tinto 28 Yue Xiu Enterprises (Holdings) 68
Coronado Coal Group 66 Investore Property 30 Rocket Software 79 Zigexn 91
Coty 36, 84 iQiyi 87, 97 Rural Electrification Corp 68 Zscaler 5
Council of Europe Dev Bank 25, 27 Iridium 35 Russell Investments 83 ZTE 66
Country Garden Holdings 45 Italy 24 Saeta Yield 98 Zuora 99

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MARCH 24 2018 ISSUE 2226 www.ifre.

Lenders clamour for Uber’s upsized US$1.5bn

US$9.8bn Tencent block smashes records as

Dropbox’s US$756m IPO heralds tech revival:

EMERGING MARKETS STRUCTURED EQUITY BONDS LOANS

Thomson Reuters Building in London. ECM ROUNDTABLE

original guidance, leading rivals to speculate that it was

U ber last week brought its contemptuous attitude to

T he gloom in European equity-linked was momentarily

International Financing Review March 24 2018 1

The answer is Eikon.

Learn more about our trusted answers for

© 2015 Thomson Reuters S027976/12-15

BONDS Buyers’ strike Investors step back from bloated market. 21

EMERGING Reﬁ plans Metinvest takes aim at debt pile. 55

LOANS Battle for yield Banks, funds compete for second-lien. 65

EQUITIES IPOs Streaming websites entice investors despite recent disappointments. 87

STRUCTURED Oz deal Cromwell raises €230m from CBs. 101

International Financing Review March 24 2018 3

Uber lands loan, despite fatal car crash

Tencent block smashes Asia record

4 International Financing Review March 24 2018

International Financing Review March 24 2018 5

Tech giants suffer bond pushback

6 International Financing Review March 24 2018

importance of offshore support

International Financing Review March 24 2018 7

M&A bond ﬁnancing poses new challenge

8 International Financing Review March 24 2018

being placed into outright ûTHATûWASûWIPEDûOUTûWHENû

International Financing Review March 24 2018 9

HKBN hits redial with tighter loan

Reach the people who matter

IFR provides an unrivalled opportunity for advertisers to reach

10 International Financing Review March 24 2018

 FRONT STORY STRATEGY

Activist Sherborne snaps up 5% of Barclays

International Financing Review March 24 2018 11

Brexit may shrink Europe revenues, MS chief warns

Investment banking lifts Jefferies in Q1 53MûINûTHEûlRSTûQUARTERûENDEDû&EBRUARYû

Who’s moving where…

12 International Financing Review March 24 2018

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

International Financing Review March 24 2018 13

Who’s moving where…

14 International Financing Review March 24 2018

Three Credit Suisse bankers leave in LatAm rejig

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

International Financing Review March 24 2018 15

Capital markets week ahead:

16 International Financing Review March 24 2018

StanChart CEO talks up revenue growth

International Financing Review March 24 2018 17

Citi rehires Maskell to co-head EMEA ﬁnancial sponsors

FROM THE ARCHIVE: 10 years ago this week

18 International Financing Review March 24 2018

Noble defaults, faces lawsuits China Renaissance

International Financing Review March 24 2018 19

20 International Financing Review March 24 2018

 FRONT STORY CORPORATES

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