DECEMBER 11 2021 ISSUE 2413 www.ifre.

com

Hanging in the balance: SenseTime is

blacklisted on the day its IPO was due to price

Abrdn takes AT1s into new territory: rapturous

reception for asset manager’s £210m deal

Gradually, then suddenly: Evergrande

defaults at last on US$19bn of offshore bonds
PLUS: GERMAN MITTELSTAND FINANCING ROUNDTABLE

EQUITIES BONDS BONDS EQUITIES

Vietnamese EV Basket cases: Denmark to join Nu recovers
maker VinFast riskier hybrids set sovereign green US$50bn market
gears up for for comeback in bond club via value after
US$3bn US listing 2022 auction reinvigorated IPO
02 04 08 09
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Upfront
„ OPINION INTERNATIONAL FINANCING REVIEW

Losing face )NûTHEûENDûABRDNSûPEERSûANDûTHEûBROADERûMARKETûSEEMEDû

SUITABLYûCONVINCEDûASûDEMANDûFORûTHEûaMûDEALûSURPASSEDû

U S-China geopolitical jostling via the capital markets

took a surprising turn last week when it became clear
that China is not the only government willing to wreck
aBNûWITHûASSETûMANAGERSûANDûFUNDûMANAGERSûTAKINGûTHEû
lion’s share with an 84% allocation.
No doubt the deal was helped by its 5.25% coupon – higher
foreign IPOs. than almost anything else available in sterling with
4HEû53û4REASURYûBLACKLISTEDû#HINESEûARTIlCIALûINTELLIGENCEû investment-grade ratings – but bankers also pointed to some
company SenseTime Group – thereby putting it off limits for advantageous features of the deal versus traditional bank
US investors – on the day it was due to price a HK$5.99bn !4SûSUCHûASûAûLACKûOFûCERTAINûRESTRICTIONSûONûCOUPONû
Hong Kong listing. payments and the absence of rules on loss absorption applied
The Treasury said SenseTime “was sanctioned because of the to AT1s from banks.
role its technology plays in enabling human rights abuses &ANSûOFûTHEûNEWûFORMATûOUGHTûNOTûGETûTOOûEXCITEDûHOWEVERû
against the Uyghurs and other Muslim minorities in Xinjiang”. !BRDNSûNEEDSûWEREûLIMITEDûTOûTHEûCIRCAûaMûITûHASûNOWû
The deal was on life support late on Friday night in Hong RAISEDûWITHûITSûCAPITALûSTRUCTUREûNOWûOPTIMISEDûASûITûLOOKSûTOû
+ONGû)TûHADNTûOFlCIALLYûBEENûCALLEDûOFFûBUTûITûWASûHARDûTOû acquire online investment platform (and fellow capital letter
SEEûITûSURVIVINGûATûLEASTûINûITSûPRESENTûFORM refusenik) interactive investor.
The timing of the announcement was ostensibly to mark Other asset managers are said to have expressed tentative
Human Rights Day but there will be no shortage of people INTERESTûINûJOININGûTHEû!4ûMARKETûBUTûEVENû$#-ûBANKERSû
WHOûSUSPECTûITûWASûINTENDEDûTOûRUINû3ENSE4IMESûDEALûJUSTûASû AREûHESITANTûTOûPREDICTûAûLARGEûVOLUMEûOFûSUPPLYû4RUTHûISû
the Chinese authorities had blown up the US listing of Didi DESPITEûABRDNSûTRIUMPHANTûDEALû!4SûFORûASSETûMANAGERSû
Global in July. will remain a niche product.
)NûANYûEVENTûTHEûTIMINGûWASûUNFORTUNATE
)NDEEDûTHEû3ENSE4IMEûBLACKLISTINGûCAMEûDAYSûAFTERûTHEû
China Securities Regulatory Commission said the US and State of uncertainty
China were working towards a solution to avoid Chinese
companies being delisted from US exchanges.
!NYûCHANCEûOFûlNDINGûCOMMONûGROUNDûINûTIMEûTOûAVERTûAû
wave of delistings now looks slim. The market awaits the
H olders of China Evergrande Group’s bonds have been
HOPINGûFORûGOVERNMENTûINTERVENTIONûTOûSAVEûTHEûDAYûBUTû
the type that arrived won’t help their recovery prospects
inevitable response from China. after Asia’s biggest offshore default.
Whatever happens it won’t be good news for those caught /FlCIALSûFROMûSTATE LINKEDûENTITIESûLASTûWEEKûJOINEDû
INûTHEûMIDDLEû#HINESEûCOMPANIESûTHEIRûBANKSûANDûTHEIRû %VERGRANDESûNEWûRISKûMANAGEMENTûCOMMITTEEûHOURSû
investors. before it defaulted on US$19bn of offshore bonds.
)TûNOWûSEEMSûTHEûCENTRALûGOVERNMENTûASûWELLûASûTHEû
PROVINCIALûAUTHORITIESûINû'UANGDONGûWHEREûTHEûDEVELOPERûISû
Stupid name, great deal BASEDûWILLûPLAYûAûKEYûROLEûINûDECIDINGûHOWûTHEûDEBTû
restructuring plays out.

Y ou can’t accuse UK asset manager abrdn of not putting

itself out there in 2021.
"UTûITûISûSAFEûTOûSAYûTHATûITSûLATESTûINNOVATIONûTHEûISSUANCEûOFû
This apparent government intervention looks focused on
ensuring Evergrande delivers the projects it promised to
Chinese home buyers and limiting the economic – and
THEûlRSTû!DDITIONALû4IERûûFROMûANûASSETûMANAGERûWASûBETTERû political – impact.
received than its disemvowelling rebrand from Standard Life The authorities will be less concerned about the impact on
Aberdeen earlier this year. offshore fund managers and it is not clear they will have
4HEûNEWûNAMEûWASûWIDELYûPANNEDûNOTABLYûBEINGûDUBBEDû much of a voice.
an “act of corporate insanity” in responses to one poll. Finishing projects under construction could still require
Some observers might also have questioned the wisdom of selling off more assets to raise cash. So Evergrande could be a
abrdn approaching the market with a new structure of much smaller company by the time creditors are in a
SUBORDINATEDûDEBTûINûTHEûDEPTHSûOFû$ECEMBERûWITHûLIQUIDITYû position to stake their claims on its remaining assets.
DRYINGûUPûASûYEAR ENDûAPPROACHEDûANDûAFTERû4IERûûPRODUCTSû 7ITHû53BNûOWEDûTOûTRADEûCREDITORSûANDûAûPOSSIBLEû
had been hit hard by recent volatility. KNOCK ONûEFFECTûONû#HINASûBANKSûIFûTHOSEûBILLSûAREûNOTûPAIDû
)NûTHEûRUNûUPûBANKERSûALSOûRAISEDûQUESTIONSûABOUTûWHETHERû bondholders are hardly foremost in the authorities’
asset managers – among the key supporters of the AT1 thoughts. They will have to be content with whatever
market – would buy bonds issued by their rival. remains when the dust settles.

International Financing Review December 11 2021 1

Top news
Abrdn’s innvtv AT1s 04 Riskier hybrids set for comeback 04 Evergrande defaults at last 06

SenseTime blacklisted by US on
the day its IPO was due to price
„ Equities China’s largest AI company was supposed to price its deal on Friday

BY FIONA LAU h/Nû)NTERNATIONALû(UMANû 3PEAKINGûDURINGûTRADINGûHOURSû YETvûSAIDûAûPERSONûWITHû

2IGHTSû$AYû4REASURYûISûUSINGûITSû INû(ONGû+ONGûPEOPLEûWITHû KNOWLEDGEûOFûTHEûMATTERûh!TûTHEû
SENSETIME GROUPSû(ONGû+ONGû)0/û tools to expose and hold KNOWLEDGEûOFûTHEûSITUATIONûSAIDû SAMEûTIMEûITûWASû
OFûUPûTOû(+BNû53M û ACCOUNTABLEûPERPETRATORSûOFû 3ENSE4IMEûWASûAWAITINGûTHEû COMMUNICATINGûWITHûTHEû3TOCKû
WASûINûLIMBOûONû&RIDAYûAFTERûTHEû SERIOUSûHUMANûRIGHTSûABUSEvû OFlCIALûANNOUNCEMENTûFROMûTHEû %XCHANGEûOFû(ONGû+ONGûONûHOWû
#HINESEûARTIlCIALûINTELLIGENCEû DEPUTYûSECRETARYûOFûTHEû4REASURYû 53ûBEFOREûDECIDINGûWHATûITSûNEXTû to handle the IPO once the
COMPANYûWASûPUTûONûAûBLACKLISTû Wally Adeyemo, said in a STEPûWOULDûBE BLACKLISTûISûFORMALLYûANNOUNCEDv
THATûBARSû!MERICANSûFROMû statement. 4HEûDEALSûBOOKSûWEREû
investing in it. The statement said that “On International COVEREDûWITHûSUPPORTûMAINLYû
!û&INANCIALû4IMESûREPORTûONû h3ENSE4IMEûWASûSANCTIONEDû Human Rights Day, COMINGûFROMû#HINESEûINVESTORSû
4HURSDAYûTHATûTHEû53û4REASURYû BECAUSEûOFûTHEûROLEûITSû INûADDITIONûTOûSOMEûPARTICIPATIONû
WILLûPLACEûTHEûCOMPANYûONûTHEû technology plays in enabling
Treasury is using its FROMûINVESTORSûINû%UROPEûANDû
BLACKLISTûLEDûTOûAûDAYûOFûTENSIONû HUMANûRIGHTSûABUSESûAGAINSTûTHEû tools to expose and 3OUTH %ASTû!SIAû4HEûDEALûWASû
ANDûSPECULATIONûDURINGû(ONGû 5YGHURSûANDûOTHERû-USLIMû hold accountable MARKETEDûUNDERûTHEû!û
+ONGûTRADINGûHOURSûONû&RIDAYûASû MINORITIESûINû8INJIANGv perpetrators of serious FORMATûBUTû53ûINVESTORSûDIDûNOTû
ALLûINVOLVEDûWAITEDûFORûANû SenseTime, it added, “has human rights abuse” SHOWûMUCHûINTERESTûASûTHEû
ANNOUNCEMENTûFROMûTHEû53û DEVELOPEDûFACIALûRECOGNITIONû COMPANYûWASûALREADYûONûAû
4REASURY PROGRAMSûTHATûCANûDETERMINEûAû SEPARATEû53ûLISTûTHATûRESTRICTSû
4HATûANNOUNCEMENTûCAMEûJUSTû TARGETSûETHNICITYûWITHûAû COMPANIESûFROMûUSINGû!MERICANû
BEFOREûMIDNIGHTû(ONGû+ONGû PARTICULARûFOCUSûONûIDENTIFYINGû SUPPLIERS
TIMEûWITHûTHEû4REASURYûSAYINGû ETHNICû5YGHURSû7HENûAPPLYINGû "YûMIDNIGHTû(ONGû+ONGûTIMEû
THATû3ENSE4IMEûWASûONEûOFûlVEû FORûPATENTûAPPLICATIONSû ONû&RIDAYûSHORTLYûAFTERûTHEû53û
INDIVIDUALSûANDûûENTITIESû [SenseTime] has highlighted its h4HEûCOMPANYûWASûSTILLû 4REASURYûSTATEMENTûTHEûPICTUREû
SANCTIONEDûFORûhTHEIRûCONNECTIONû ABILITYûTOûIDENTIFYû5YGHURSû MEETINGûINVESTORSûASûOFû&RIDAYû WASûHARDLYûANYûCLEARERûh4HEREû
TOûHUMANûRIGHTSûABUSEûANDû WEARINGûBEARDSûSUNGLASSESûANDû MORNINGû;(ONGû+ONGûTIME=ûANDû WILLûBEûAûMILLIONûCALLSûOVERûTHEû
REPRESSIONv MASKSv THEYûHAVENTûPULLEDûTHEûPLUGû WEEKENDvûSAIDûAûPERSONû

Vietnamese EV maker VinFast gears up

for jumbo US listing
„ Equities Electric carmaker plans US$2bn–$3bn IPO in the second half of 2022

BY S ANURADHA h4HEûNEWûCOMPANYû6IN&ASTû .ORTHû!MERICAûANDû%UROPEûTHISû WHICHûISûUPûûSINCEûTHEûENDûOFû

3INGAPOREûISûAûSTEPûTOûTURNû YEARûANDûNEXTû ûANDûûTHISûYEARûALONE
VINFASTûPLANSûTOûBECOMEûTHEûlRSTû 6IN&ASTûINTOûAûGLOBALûCOMPANYû 6INGROUPûSAIDûITûWOULDûREMAINû &OREIGNûINVESTORSûHAVEûLONGû
Vietnamese company to list in ANDûPREPAREûFORûITSû53û)0/vû AûMAJORûSHAREHOLDERûINû6IN&ASTû demanded changes to the
THEû53ûHOPINGûTHATûSTRONGû 6IETNAMSûLARGESTûCONGLOMERATEû 3INGAPOREûAFTERûTHEû)0/ COUNTRYSûCOMPLICATEDû)0/û
DEMANDûFORûTHEûSTOCKSûOFûELECTRICû said in a statement. 4HEûDECISIONûTOûGOûFORûANû SETTLEMENTûANDûTRADINGûRULESû
VEHICLEûMAKERSûWILLûENABLEûAû 6IN&ASTûWHICHûWASûFOUNDEDûINû OFFSHOREû)0/ûCOMESûAFTERûTWOû INCLUDINGûAûGAPûOFûOVERûTWOû
US$2bn–$3bn IPO in the second ûANDûCOUNTSûVETERANûFORMERû OTHERû6INGROUPûCOMPANIESûnû MONTHSûBETWEENûTHEûTIMEûTHEû
half of 2022. 'ENERALû-OTORSûANDû6OLKSWAGENû Vincom Retail and Vinhomes SHARESûAREûSOLDûANDûLISTEDû"UTû
!SûAûlRSTûSTEPûPARENTû EXECUTIVESûINûITSûTOPû nûFOUNDûMIXEDûRESULTSûWITHûTHEIR THEûNEWû,AWûONû3ECURITIESû
6INGROUPûHASûSETûUPûAû3INGAPORE MANAGEMENTûTEAMûPRODUCESû DOMESTICûLISTINGSû4HEûFORMER IMPLEMENTEDûATûTHEûSTARTûOFûTHISû
BASEDûHOLDINGûCOMPANYûTHATûWILLû CARSûE SCOOTERSûANDûBUSESû)Tû RAISEDû$TRNûTHENû53M ûIN YEARûIGNOREDûTHESEûPLEASûMAKINGû
OWNû6IN&ASTSûOPERATIONSûINû OBTAINEDûAûPERMITûTOûTESTû ûANDûTHEûLATTERûAûRECORD OFFSHOREûLISTINGSûMOREûATTRACTIVEû
6IETNAMû4HISûISûNECESSARYû AUTONOMOUSûVEHICLESûONûPUBLICû $BNûINûû"OTHûSHARESûARE TOûLARGEûISSUERS
BECAUSEû6IETNAMESE STREETSûINû#ALIFORNIAûEARLIERûTHISû TRADINGûBELOWûTHEIRûISSUEûPRICE "ANKERSûALSOûWANTûLOCK UPSûONû
INCORPORATEDûCOMPANIESûCANû YEARûANDûISûDUEûTOûLAUNCHûTHREEû ANDûHAVEûUNDERPERFORMEDûTHE SMALLûSHAREHOLDERSûSUCHûASû
only list in Vietnam. NEWûELECTRICû356SûINû6IETNAMû BENCHMARKû6IETNAMû)NDEX COMPANYûEMPLOYEESûWHOûHAVEû

2 International Financing Review December 11 2021

 For daily news stories
@ visit www.ifre.com

EV fundraising frenzy 07 Denmark plans green auction  Nu moves to US$50bn 

INVOLVEDûWITHûTHEûDEALûh7EVEû ABOUTûISûTHEIRûROLEûONûANYû ALTHOUGHûITûISûCONSIDERINGûAû ANNOUNCEDûEARLIERûTHISûMONTHû

GOTûAûLOADûOFûSTUFFûWEûNEEDûTOû ATTEMPTûTOûPUSHûONûWITHûnûORû SMALLERûTRANSACTION #HINESEûCOMPANIESûTHATûLISTûONû
THINKûABOUTv RESHAPEûnûTHEû)0/ %VENûINûTHATûCASEûADDITIONALû 53ûSTOCKûEXCHANGESûMUSTû
3OMEûINVESTORSûINûTHEûBOOKû )TûISûCERTAINLYûPOSSIBLEûTHATû DISCLOSURESûWILLûNOWûBEû DISCLOSEûWHETHERûTHEYûAREû
BEFOREû&RIDAYûCHOSEûTOûWITHDRAWû SOMEûORûALLûOFûTHEû)0/SûSPONSORSû REQUIREDûLEADINGûTOûSOMEûDELAYû OWNEDûORûCONTROLLEDûBYûAû
THEIRûORDERSû%IGHTûCORNERSTONEû ANDûBOOKRUNNERSûWILLûFEELû ATûAûMINIMUMû)FûAûSMALLERûDEALû GOVERNMENTûENTITYûANDûPROVIDEû
INVESTORSûHAVEûCOMMITTEDû UNABLEûTOûCONTINUEûWITHûTHEû ISûPURSUEDûTHENûTHATûCOULDûMEANû EVIDENCEûOFûTHEIRûAUDITINGû
53MûTOûTHEûDEALû DEALûIFûTHEIRûLAWYERSûDEEMûTHATû HAVINGûTOûRUNûTHEûRETAILûOFFERû inspections.
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mOAT REGULATORYûACTION PRICINGûFORûSEVERALûWEEKSû “If any of the sponsors
h)FûANYûOFûTHEûSPONSORSûDROPû drop the deal, the
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delay could take
MONTHSvûSAIDûANOTHERûPERSONû 3ENSE4IMESûBLACKLISTûINCLUSIONû
calls over the weekend. FAMILIARûWITHûTHEûSITUATIONû4HEû COMESûAFTERû#HINESEûRIDE HAILINGû
months”
We’ve got a load of SHARESûWEREûORIGINALLYû GIANTû$IDIû'LOBALûANNOUNCEDûITû
stuff we need to think SCHEDULEDûTOûSTARTûTRADINGûONû WOULDûDELISTûFROMûTHEû.EWû9ORKû
about” $ECEMBERû 3TOCKû%XCHANGEûlVEûMONTHSû
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JOINTûGLOBALûCOORDINATORSû #HINASûCYBERSPACEûREGULATORû
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is listed. SAIDûTHEREûWOULDûBEûDEMANDûFORû HASûEMERGEDûISûTHATûREGIONALû %ûFUNDRAISINGûROUNDûWASû
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EXCLUDESûMANYûTECHNOLOGYûANDû WEREûFULLYûSUBSCRIBEDû'LOBALû !)!û)NSURANCEû-IRAEû!SSET
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ELECTRICûVEHICLESûISûEXPECTEDûTOû ANDûFOREIGNûINVESTORSûAREûBULLISHû 6IN&ASTûCOULDûBEûAûCATALYSTûFORû 30!# „

International Financing Review December 11 2021 3

Top news
Abrdn takes AT1s into new territory
„ Bonds Debut deal exceeds expectations as asset manager capitalises on new format’s features

BY TOM REVELL 7HILEûTHEûACQUISITIONûWILLûBEû HAVEûSUFFEREDûWITHûTHEûYIELDûOFû KNOWNûINûTHEûDEBTûMARKETûANDû

FUNDEDûBYûAVAILABLEûCASHûFROMû THEû"ANKûOFû!MERICAû#O#OûINDEXû THEûBUSINESSûMODELSûYOUREûLESSû
4HEûlRSTûISSUANCEûOFû!DDITIONALû ABRDNSûCAPITALûRESERVESûTHEû!4û HITTINGûAûYEAR TO DATEûHIGHûOFû USEDûTOûSEEINGv
4IERûûCAPITALûBYûANûASSETû is aimed at optimising the asset ûONû.OVEMBERûûBEFOREû !BRDNûANDûITSûLEADSûWEREû
MANAGERûWASûRAPTUROUSLYû MANAGERSûCAPITALûUNDERûNEWû TRADINGûBACKûIN HOWEVERûABLEûTOûSIGNIlCANTLYû
RECEIVEDûBYûINVESTORSûASûABRDN )NVESTMENTû&IRMSû0RUDENTIALû !ûMODESTûREBOUNDûINûBROADERû REDUCEûTHEûSIZEûOFûTHATûPICK UPû
OVERCAMEûRECENTûVOLATILITYûINû 2EGIMEûRULESûTHATûWILLûAPPLYû CONDITIONSûTEEDûUPûAûSWIFTûENTRYû THANKSûTOûSTRONGûDEMANDû
4IERûûPRODUCTSûANDûCAPITALISEDû FROMû*ANUARYûû TOûTHEûMARKETûONû-ONDAYû 'UIDANCEûWASûSETûATûTHEûû
ONûSOMEûOFûTHEûNEWûFORMATSû FOLLOWINGûTHEûCONCLUSIONûOFûTWOû AREAûANDûTHEûSIZEûATûaMû
ADVANTAGEOUSûFEATURESûTOû “I was thinking a 6% DAYSûOFûMARKETINGûEFFORTSû BEFOREûTHEûCOUPONûWASûlXEDûATû
COMPRESSûTHEûSIZEûOFûTHEûPICK UPû land would be about ,EADSûBarclays, Bank of America, ûWITHûTHEûlNALûBOOKû
OFFEREDûVERSUSûCONVENTIONALû fair, taking a view from HSBC and JP Morgan SHOWEDûTHEû STANDINGûABOVEûaBNû
BANKûBONDS PERPETUALûNON CALLû*UNEûû 0RIORûTOûTHEûEXECUTIONû
4HEûANNOUNCEMENTûOFûTHEû
OSB, but clearly I was TRANSACTIONûWITHûINITIALûPRICEû BANKERSûHADûSUGGESTEDûTHEûTWOû
deal came on the same day that wrong and it’s gone THOUGHTSûOFûTHEûûAREAûFORûANû BOOK ENDSûFORûTHEûPRICEûWEREûTHEû
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FROMû3TANDARDû,IFEû!BERDEENûINû would have thought” !NûINVESTORûSAIDûTHEû)04Sû BANKûISSUERSûCITEDûINûTHEûHIGHû
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CAPITALûLETTERS ûFORûaBNû !BRDNûNOTûONLYûHADûTOû bond is going to be investment WOULDûBEûABOUTûFAIRûTAKINGûAû
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INCREASEûITSûASSETSûUNDERû FORMATû)TûALSOûHADûTOûNAVIGATEûAû ITûTOûSIMILARLYûRATEDû!4SûBASEDû WRONGûANDûITSûGONEûMUCHûBETTERû
MANAGEMENTûlVEFOLDûTOûaBNû MARKETûTHATûHADûSEENûLIQUIDITYû ONûTHEû)04SûITûDOESûSEEMûYOUREû THANû)ûWOULDûHAVEûTHOUGHTvûSAIDû
ANDûMOREûTHANûDOUBLEûITSû DRYûUPûTOWARDSûTHEûYEAR ENDûANDû GETTINGûAûPREMIUMûFORû AûSYNDICATEûBANKERûAWAYûFROMû
REVENUEûTOûaM INûWHICHûSOMEû4IERûûPRODUCTSû SOMETHINGûTHATûISûLESSûWELL the leads.

Riskier hybrids set for comeback

„ Bonds Surge of corporate hybrid bond issuance could open the door to the return of debt with higher equity content

BY ED CLARK CANûBEûVULNERABLEûDURINGûPERIODSû BRINGûNEWûISSUERSûINTOûTHEû BECAUSEûTHEûDEFERRALûISûTRIGGEREDû

of volatility. MARKETûSOMETHINGûLIKEû ITûISûNON CUMULATIVE
#ORPORATEûDEBTûSPECIALISTSûAREû !LLûOFûTHOSEûDEALSûWEREû ESTABLISHINGûAûHIGHERûEQUITYû
HOPINGûTHATûûWILLûSEEûTHEû STRUCTUREDûTOûACHIEVEûûEQUITYû INSTRUMENTûCOULDûMAKEûAû HIGHER YIELD, LESS COST
RETURNûTOû%UROPEûOFûHYBRIDSû CREDITûORûLOWERûnûTHEûLASTûONEû MASSIVEûDIFFERENCEû7EûGOTûVERYû !LTHOUGHûTHESEûFEATURESûMAKEû
WITHûAûHIGHERûEQUITYûCONTENTû WITHûAûHIGHERûTHANûûEQUITYû VERYûCLOSEûTOûANNOUNCINGûAû "ASKETû$ûHYBRIDSûLESSûINVESTOR
WITHûBANKERSûPUSHINGûTHEû CREDITûWASûMOREûTHANûAûDECADEû "ASKETû$ûDEALûTHISûYEARv
PRODUCTûTOûWHATûTHEYûHOPEûWILLû AGOûnûBUTûATûLEASTûONEûISSUERû 4HEû"ASKETû$ûPRODUCTûISûAûLESSû EURO CORPORATE HYBRID SUPPLY
BECOMEûAûNEWûGENERATIONûOFû SERIOUSLYûCONSIDEREDûISSUINGûAû INVESTOR FRIENDLYûSTRUCTUREûTHANû €bn
ISSUERS HYBRIDûWITHûûEQUITYûCONTENTû THEûNOWûSTANDARDû"ASKETû#ûORû 50
#ORPORATEûHYBRIDSûHAVEû INûû!NDûWHILEûTHATûDEALûDIDû ûEQUITYûCREDIT ûOFFERINGû/NûAû
BECOMEûAûKEYûTOOLûFORûBORROWERSû NOTûCOMEûTOûFRUITIONûSUCHû "ASKETû#ûHYBRIDûTHEûISSUERûHASû
40
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FORûYIELDûINûAûLOWûRATEû -OODYSûCLASSIlCATIONûSYSTEMû OPTIONALûDEFERRALSûBUTûALSOû 10

ENVIRONMENTûHYBRIDSûAREûAûWAYû GIVESûTOûBONDSûWITHûûEQUITYû FEATUREûPRE DElNEDûDEFERRALû

TOûGETûEXPOSUREûTOûTHEûMOREû content. TRIGGERSûUSUALLYûBASEDûONûSOMEû 0
SUBORDINATEDûPARTûOFûANûISSUERSû h)TûISûHARDûTOûBRINGûNEWûISSUERSû FORMûOFûCASHmOWûORûLEVERAGEû 2017 2018 2019 2020 2021

DEBTûSTACKûEVENûIFûSUCHûBONDSû INTOûTHEûHYBRIDûMARKETû4OûREALLYû METRICû)FûAûCOUPONûISûMISSEDû Source: IFR

4 International Financing Review December 11 2021

 For daily news stories
@ visit www.ifre.com

h)TSûVERYûWELLûRATEDûWHICHûISû GETûTHATûSAMEûBPûLEVERAGEû BETTERûQUALITYûTHANûTHEûAVERAGEû WANTINGûTOûDOûSIMILARûDEALSû

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WOULDûHAVEûTAKENûAûBITûMOREû 4HEûLEADûBANKERûSAIDûTHEû DEALSûPERFORMANCEû)TûWASûBIDûATû "ANKERSûSAIDûOTHERûASSETû
advantage given the time of COMPOSITIONûOFûTHEûORDERûBOOKû AûCASHûPRICEûOFûûONû&RIDAYû MANAGERSûHADûEXPRESSEDû
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MARKETv h/NEûTHINGûITûDOESNTûHAVEûISû WILLûBEûAûRAFTûOFûTHESEûDEALSû SUPPLYû
some of the fast money COMINGûBEHINDû%VENûIFûTHEREû "ANKERSûSUGGESTEDûAûSIZEABLEû
MUSEUM PIECE ACCOUNTSûnû)ûTHINKûITSûSLIGHTLYû WEREûFOURûORûlVEûASSETûMANAGERSû BUFFERûTOûTHEûDEALSûEQUITYû
"ANKERSûSAIDûTHEREûWEREûFEWû CONVERSIONûTRIGGERûHELPEDû
INVESTMENT GRADEûALTERNATIVESû INVESTORSûTOûGETûCOMFORTABLEû
BOFA COCO INDEX TRADES BACK IN
THATûOFFERûAûYIELDûOFûMOREûTHANû BID YIELD OF THE BANK OF AMERICA COCO INDEX WITHûTHEûNEWûPRODUCTû4HEû
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RATEDû"AA"""nûBYû 4.4 ûOFûABRDNSûRISK WEIGHTEDû
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4.0
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4/12/21
4/5/21
4/4/21

4/7/21

4/9/21

4/10/21
4/2/21
4/1/21

4/6/21

4/11/21
4/3/21

4/8/21

AGE OLDûDEBATEûnûIFûYOUûSTARTûATû DEALûDOESûNOTûFEATUREûSTATUTORYû

ûYOUûCANûGETûBPûBUTûIFûYOUû POINTûOFûNON VIABILITYûLOSSû
STARTûATûûAREûYOUûGOINGûTOû Source: Refinitiv Eikon ABSORPTION „

FRIENDLYûTHANûHYBRIDSûWITHû COUPONûWOULDûREMAINûNON A TRICKLE NOT A WAVE DIFFERENCEûESPECIALLYûASûITûWOULDû

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MEANûHIGHERûYIELDS 4HEûPRODUCTûCANûOFFERû ANDûGIVENûTHEûHIGHERûRISKSû SAIDû3TEPHANIEû"ESSEûGLOBALûHEADû
h7EûBELIEVEû;THEûRE EMERGENCEû SIGNIlCANTûBENElTSûTOû INVESTORSûWILLûBEûVERYûSELECTIVEû OFûDEBTûCAPITALûMARKETSûFORû
OFûHIGHERûEQUITYûCREDITû CORPORATESûANDûTHEûHIGHERûYIELDû WHENûITûCOMESûTOûTHEûISSUERû CORPORATESûATû.ATIXIS
HYBRIDS=ûWOULDûBEûAûPOSITIVEû MAYûNOTûNECESSARILYûTRANSLATEû 3TILLûBANKERSûSAIDûTHATû
DEVELOPMENTûINûTHEûMARKETû INTOûAûHIGHERûCOSTûTOûTHEûISSUER “It is hard to bring new UTILITIESûANDûTELECOMSû
ASûITûWOULDûINTRODUCEûAûHIGHERû h)FûYOUûNEEDûõMûOFûEQUITYû issuers into the hybrid COMPANIESûAREûTHEûMOSTûLIKELYû
YIELDINGûPRODUCTûTOûTHEû CREDITûAREûYOUûBETTERûOFFûISSUINGû CANDIDATESûTOûISSUEûSUCHûDEALSû
market. To really bring
MARKETûWHICHûWEûTHINKûCOULDûBEû AûõBNû"ASKETû$ûHYBRIDûORûAû ALTHOUGHûWHENûTHEûFORMATûWASû
WELCOMEDûBYûINVESTORSvû õBNû"ASKETû#ûHYBRIDvûASKEDû
new issuers into the INûREGULARûUSEûMOREûTHANûAû
SAIDû!NDREAû3EMINARAû#)/ûû +APILû$AMANIûHEADûOFûCAPITALû market something like DECADEûAGOûTHEREûWEREûOTHERû
#%/ûOFûTHEûASSETûMANAGERû PRODUCTSûATû".0û0ARIBASûWHOûISû establishing a higher SECTORSûONûSHOWûWHICHûALSOû
2ED(EDGE KEENûONûTHESEûINSTRUMENTSû equity instrument INCLUDEDûMOREûVOLATILEû
!SûTHEûPRODUCTûISûHIGHLYû RETURNINGûh)FûYOURûSTRESSûISûMOREû could make a massive INDUSTRIESûSUCHûASûCOMMODITIESû
TAILOREDûTOûTHEûISSUERûTHEûEXACTû WITHû-OODYSûTHANûITûISûWITHû TRADING
ADDITIONALûCOSTûISûHARDûTOû 30ûTHENûTHEû"ASKETû$ûHYBRIDûISû
difference. We got h7EûTHINKûTHISûCANûBEûTAKENû
GENERALISEûBUTûBANKERSûHAVEû GOINGûTOûBEûMOREûATTRACTIVEûFROMû very, very close to ADVANTAGEûOFûBYûSTRONGû)'û
SUGGESTEDûITûWOULDûBEûANYTHINGû AûCOSTûPERSPECTIVEv announcing a Basket D ISSUERSûSUCHûASûESTABLISHEDû
FROMûBPûTOûBPûOVERûWHATûAû 4HEûPRODUCTûISûIDEALûFORû deal this year.” ISSUERSûINûTHEûHYBRIDûMARKETû
BORROWERûWOULDûPAYûFORûAû"ASKETû ISSUERSûTHATûAREûCOMMITTEDûTOû THATûDOûNOTûHAVEûAûFUNDINGûNEEDû
#ûDEAL MAINTAININGûTHEIRûHIGH GRADEû !NDûSOMEûREMAINû ANDûAREûWILLINGûTOûUSEûTHEû
4HEREûAREûALSOûWAYSûTOû RATINGSûBUTûAREûINûSOMEûFORMûOFû UNCONVINCEDûOFûITSûVALUEûh!û STRUCTUREûTOûDELEVERAGEvûSAIDû
AMELIORATEûINVESTORûCONCERNSû DISTRESSûANDûTHEIRû-OODYSûCREDITû HYBRIDûISûLIKEûAûCUSHIONûTHATû 3EMINARAûh4HOSEûWITHûSTRONGû
OVERûMISSEDûCOUPONûPAYMENTSû RATINGûINûPARTICULARûISûATûRISKû HELPSûYOUûTOûGOûTHROUGHûAû CREDITûFUNDAMENTALSûANDû
!NûISSUERûCOULDûSELLûORDINARYû 30ûHASûNOûûBASKETûANDûTHEû TOUGHûPERIODûORûACQUISITIONû CASHmOWSûASûWELLûASûVERYûLOWû
SHARESûTOûPAYûCOUPONSûFORû EXTRAûFEATURESûWOULDûTHEREFOREû lNANCINGûANDû)ûAMûNOTûSUREû DEFAULTûRISKûAREûBESTûSUITEDûTOû
INSTANCEûALTHOUGHûTHISûWOULDû NOTûGETûANYûADDITIONALûEQUITYû THATûADDINGûûOFûEQUITYû ISSUEûûEQUITYûCREDITûHYBRIDû
not be legally binding and the RECOGNITIONûFROMûTHEûAGENCY CONTENTûMAKESûAûHUGEûAMOUNTûOFû BONDSv „

International Financing Review December 11 2021 5

Top news
Evergrande defaults at last
„ Emerging Markets Authorities join the property company’s restructuring to safeguard stability, but uncertainty remains

BY MORGAN DAVIS, CAROL CHAN PRINCIPALûANDûRELATEDûINTERESTû 3EPTEMBERû%VERGRANDEû PROPOSALûTOûTHEûOFFSHOREûGUYSû

FOLLOWINGûAûDEFAULT BONDHOLDERSûINCLUDEDû%ASTSPRINGû ;BONDHOLDERS=ûTHATûINCLUDESûALLûOFû
CHINA EVERGRANDE GROUP is in 4HEûNEXTûSTEPSûFORû%VERGRANDEû )NVESTMENTSû"LACK2OCKû THEûOFFSHOREûBONDSûINûONEûGOvû
TECHNICALûDEFAULTûMARKINGûTHEû AREûUNCLEARûASûTHEûCOMPANYûHASû !LLIANCE"ERNSTEINûANDû!SHMOREû SAIDûTHEûLAWYERûh)MûPERSONALLYû
LARGESTûOFFSHOREûBONDûDEFAULTû YETûTOûMAKEûANûOFlCIALûSTATEMENTû ACCORDINGûTOû2ElNITIVûDATAû.ONEû STRUGGLINGûTOûSEEûTHEMûFORMULATEû
FROMûANû!SIANûISSUER ABOUTûITSûMISSEDûPAYMENTûANDû OFûTHEûlRMSûRESPONDEDûTOû THISûPROPOSALûINûTHEûNEARûTERMû
4HEûDEVELOPERûFAILEDûTOûPAYûANû DIDûNOTûIMMEDIATELYûRESPONDûTOû REQUESTSûFORûCONlRMATIONûTHATû BECAUSEûTHEYûDONTûKNOWûYETû
OVERDUEû53MûBONDûCOUPONû AûREQUESTûFORûCOMMENT THEYûSTILLûHOLDû%VERGRANDEûNOTES WHATûISûGOINGûONûONSHOREûHOWû
BYû$ECEMBERûûTHEûENDûOFûAû %VERGRANDEûHADûSAIDûINûAûlLINGû h)MûNOTûSUREûWHATûAû@RISKû MUCHûTHEYûCANûKEEPûCONTROLûOVERû
DAYûGRACEûPERIOD ONû$ECEMBERûûTHATûITûMAYûNOTû MANAGEMENTûCOMMITTEEûISûBUTû the completion of ongoing
4HEûFAILEDûPAYMENTûMARKSûTHEû BEûABLEûTOûFULlLûITSûPLEDGEûTOû MYûGUESSûISûTHATûTHISûISûAûUNIQUEû PROJECTSvûORûHOWûMUCHûTHEYûWILLû
COMPANYSûlRSTûOFFSHOREûDEFAULTû GUARANTEEûPAYMENTûONû53Mû CASEûGIVENûTHEûSIZEû;OFûTHEûDEBT=û SELLûORûDISPOSEûOFûTHESEûPROJECTS
ONûAûPUBLICûBONDûANDûWILLû OFûDEBTûDETAILSûOFûWHICHûITûDIDû ANDûTHEûCENTRALûANDûPROVINCIALû
TRIGGERûCROSS DEFAULTûPROVISIONSû NOTûPROVIDEûANDûITûPLANNEDûTOû GOVERNMENTûISûASKINGû GOVERNMENT INTERVENTION
ONûAROUNDû53BNûOFû RESTRUCTUREûITSûOFFSHOREû %VERGRANDEûTOûPROACTIVELYû 'OVERNMENTûINVOLVEMENTûDOESû
INTERNATIONALûBONDS OBLIGATIONSû4HEû'UANGDONGû MANAGEûTHEûFALLOUTûANDûNOTûHAVEû NOTûNECESSARILYûBENElTû
%VERGRANDEûONCEû#HINASûTOPû PROVINCIALûGOVERNMENTû AûMESSYûDEFAULTvûSAIDûAûPORTFOLIOû BONDHOLDERSûANDûMARKETû
PROPERTYûDEVELOPERûHASûMOREû SUMMONEDû%VERGRANDESû MANAGERûWHOûDOESûNOTûHOLDû WATCHERSûTHINKûAûBAILOUTûISû
THANûûREALûESTATEûPROJECTSû CHAIRMANû(UIû+Aû9ANûANDûSENTûAû %VERGRANDEûBONDSûh)ûDONTûREALLYû UNLIKELY
ANDûAROUNDû53BNûINû WORKINGûGROUPûTOûTHEûCOMPANYû THINKûITûWILLûWORKv )NSTEADûTHEû#HINESEû
LIABILITIESûBUTûHASûBEENû TOûhOVERSEEûRISKûMANAGEMENTû /NEû$#-ûSYNDICATEûBANKERû GOVERNMENTûISûKEENûTOûKEEPû
STRUGGLINGûTOûSERVICEûITSûBONDSû STRENGTHENûINTERNALûCONTROLSûANDû RECKONEDûTHEûLACKûOFûINVESTORû MAINLANDûPROPERTYûBUYERSûHAPPYû
SINCEû3EPTEMBER MAINTAINûNORMALûOPERATIONSv NOISEûAROUNDûTHEûDEFAULTûISûAûSIGNû BYûCOMPLETINGû%VERGRANDESû
%VERGRANDESûMISSEDûPAYMENTû /Nû$ECEMBERûûTHEûLASTûDAYûOFû THATû%VERGRANDEûISûALREADYûINû UNlNISHEDûPROJECTSûSAIDûTHEû
WASûCONlRMEDûBYûAûSOURCEûCLOSEû THEûGRACEûPERIODûFORûTHEûMISSEDû NEGOTIATIONSûWITHûITSû SYNDICATEûBANKERû
TOûTHEûBONDHOLDERSûASûWELLûASû COUPONûPAYMENTû%VERGRANDEû BONDHOLDERSû4HEûCOMPANYûISû h4HEûGOVERNMENTûULTIMATELYû
&ITCHû4HEûRATINGSûAGENCYûONû SAIDûITûHADûSETûUPûAûRISKû LIKELYûTOûMAKEûAûFORMALû HASûLIMITEDûLOVEûFORûTHEûOFFSHOREû
$ECEMBERûûDOWNGRADEDû management committee that ANNOUNCEMENTûAFTERûITûHASû BONDHOLDERSvûSAIDûTHEûLAWYERû
%VERGRANDEûANDûITSûSUBSIDIARIESû INCLUDESûOFlCIALSûFROMûSTATE lNALISEDûMOREûDETAILSûSHEûSAID h4HATûSAIDû)MûNOTûNECESSARILYûOFû
HENGDA REAL ESTATE GROUP and OWNEDûENTITIESûWHICHûhWILLûPLAYû !û(ONGû+ONG BASEDûLAWYERû THEûVIEWûTHATûTHEûGOVERNMENTûISû
TIANJI HOLDINGûTOû2$ûRESTRICTEDû ANûIMPORTANTûROLEûINûMITIGATINGû SAIDûAûSLOWERûANNOUNCEMENTû OUTûTHEREûWITHûAûMISSIONûTOû
DEFAULT ûFROMû#ûFOLLOWINGûTHEû ANDûELIMINATINGûTHEûFUTUREûRISKSû MAYûBEûBETTERûFORûBONDHOLDERSûASû INmICTûPAINûONûTHEûOFFSHOREû
NON PAYMENTû&ITCHûAFlRMEDûTHEû OFûTHEûGROUPv ITûPROVIDESûMOREûTIMEûFORû BONDHOLDERSû&ORûTHEMûITSûAûBITû
SENIORûUNSECUREDûRATINGSûOFû -ARKETûPARTICIPANTSûHAVEûBEENû %VERGRANDEûTOûASSESSûITSûASSETSûINû OFûANûAFTERTHOUGHTv
BONDSûISSUEDûBYû%VERGRANDEûANDû LEFTûTOûSPECULATEûABOUTûHOWûTHEû PARTICULARûITSûMOREûOPAQUEû !NDREWû3HENGûAû
ITSûSUBSIDIARIESûATû#ûWITHûAû GOVERNMENTûWILLûCONTROLûTHEû ONSHOREûHOLDINGSûTOûBETTERû DISTINGUISHEDûFELLOWûATûTHEû!SIAû
RECOVERYûRATINGûOFû22û %VERGRANDEûIMPLOSIONûANDûIFû TACKLEûITSûDEBT 'LOBALû)NSTITUTEûOFûTHEû5NIVERSITYû
(ISTORICALLYû22ûSECURITIESûONLYû BONDHOLDERSûHAVEûANYûHOPEûOFû h)ûWOULDûEXPECTûTHATûTHEû OFû(ONGû+ONGûSAIDû%VERGRANDEû
RECOVERûUPûTOûûOFûTHEIRû CURTAILINGûLOSSESû!SûOFûTHEûENDûOFû COMPANYûCOMESûFORWARDûWITHûAû had systemic implications on the
HOUSINGûMARKETûGIVENûITSûSIZEû
ASIAN BONDS ISSUED THIS YEAR THAT HAVE ALREADY DEFAULTED hSOûITûWOULDûNOTûBEûSURPRISINGû
Issuer Pricing date Size (US$m) Tenor Yield (%) Ratings at issue THATûIFûTHEûLARGESTûLIABILITIESûOFû
Kaisa Aug-31 300 364-day 11.00 NR THEûBORROWERûISûTOûHOUSEBUYERSû
Kaisa Jul-15 200 364-day 8.65 NR THENûTHEûCONTRACTUALûOBLIGATIONSû
Sunshine 100 Jun-29 219.6 364-day 13.00 NR OFûTHEûCOMPANYûWOULDûNEEDûTOû
Kaisa Jun-08 280 2023 tap 8.90 B2/–/B BEûTAKENûINTOûCONSIDERATIONv
Kaisa May-24 300 5NC3 11.65 B2/–/B !û'REATERû#HINAû$#-ûHEADû
Kaisa Apr-27 500 4.5NC2.5 11.75 B2/–/B FROMûAû%UROPEANûBANKûSAIDûITû
Kaisa Apr-20 200 2023 tap 9.15 B2/–/B WASûCLEARûTHATûCREDITORSûCLOSERûTOû
Fantasia Feb-25 250 3yr 11.35 –/–/B+ THEûASSETSûWOULDûGETûPAIDûlRSTû
Fantasia Feb-04 150 2023 tap 10.10 B3/–/– h!LLûOTHERûBONDSûHAVEûSIMILARû
Xinyuan Feb-03 100 2024 tap 14.00 –/–/B– TERMSûYOUûCANTûSAYûTHATûIFûTHEû
Sunshine 100 Jan-29 120 2.75yr 12.00 NR GOVERNMENTSûPRIORITYûISûTOû
Modern Land (China) Jan-25 71 2023 tap 9.95 B3/–/B ENSUREûPROJECTûCOMPLETIONûANDû
Modern Land (China) Jan-25 77 2024 tap 11.25 B3/–/B DELIVERYûITûISûPUTTINGû
Kaisa Jan-19 300 2023 tap 9.85 B2/–/B BONDHOLDERSûATûAûDISADVANTAGEv
Xinyuan Jan-18 170 3NP2 14.00 –/–/B– !ûPERSONûCLOSEûTOû%VERGRANDEû
Sinic Jan-18 250 364-day 8.50 –/–/B+ said the company intended to
Modern Land (China) Jan-05 250 2.25yr 10.40 B3/–/B FOLLOWûINTERNATIONALûMARKETû
Source: IFR STANDARDSûANDûPRINCIPLESûINû

6 International Financing Review December 11 2021

 For daily news stories
@ visit www.ifre.com

DEALINGûWITHûITSûRESTRUCTURINGû
ANDûAIMEDûTOûhFORMULATEûANDû
GOVERNMENTûDEPARTMENTSû
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implement a viable SAIDûAû$#-ûHEADûFROMûAû#HINESEû
RESTRUCTURINGûPLANvûOFûITSû INVESTMENTûBANKûh3TABILITYûISû „ Equities Issuers plan to raise billions of dollars
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STRUCTURALLYûANDûCONTRACTUALLYû DELIVERYûTOûHOMEBUYERSû4HEû !SIANûELECTRICûVEHICLEûCOMPANIESû LASTûWEEKûFORûANûUPûTOû7TRNû
SUBORDINATEDûTOûTHOSEûONSHOREû ULTIMATEûOUTCOMEûOFûTHEû FROMû#HINAûTOû6IETNAMûAREû 53BN û+28û)0/û3OUTHû
WITHûOPERATIONALûANDûlNANCIALû RESTRUCTURINGûHOWEVERûISûHARDû PLANNINGûEQUITYûRAISESûOFûATûLEASTû +OREASûLARGESTûEVERû4HEû
EXPOSUREûWHENû%VERGRANDEû TOûSAYv 53BNûNEXTûYEARûRIDINGûONû COMPANYûISûAûMAJORûSUPPLIERûTOû
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MID SûTOûMID SûHANDLEû THEû%VERGRANDEûCASEûBECAUSEûOFû FAVOURABLEûGOVERNMENTûPOLICIES MANUFACTURERûVINFAST is also
REmECTINGûTHEûMARKETSûWEAKû THEûCOMPANYSûSIZEû4HEû -AJORû#HINESEû%6û planning a US$2bn–$3bn US IPO
EXPECTATIONSûFORûRECOVERY GOVERNMENTûWASûLIKELYûTOûALLOWû MANUFACTURERSûBATTERYûMAKERSû in the second half of 2022.
#HINAûHASûYETûTOûVOICEûAûCLEARû SMALLERûPLAYERSûTOûGOûBANKRUPTû ANDûBATTERYûMATERIALSûPROVIDERSû h4HEûFUNDINGûNEEDSûFORûTHEû%6û
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EMBATTLEDûPROPERTYûSECTORûBUTû he said. THISûYEARûACCORDINGûTOûDATAû TOûRAMPûUPûPRODUCTIONûANDû
THEREûHAVEûBEENûSIGNSûTHATûITSû COMPILEDûBYû)&2 STRENGTHENûRESEARCHûANDû
tone is softening. KAISA DEFAULTS 4HEûDEALSûINCLUDEDû"9$Sû development to fend off
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BPûAûMOVEûWIDELYûVIEWEDûASûAû DEFAULTûONûOTHERûNOTESû FORûAû53MnMû(ONGû ANDûAREûEXPECTEDûTOûRISEûTOûû
signal of policy easing. The +AISAûHASûABOUTû53BNûOFû +ONGûLISTING MILLIONûUNITSûPERûYEARûBYû
MESSAGEûSENTûOUTûFROMûTHEû OFFSHOREûDEBT 4HEûFUNDRAISINGûFRENZYûISû 4HEûBIGûDEALSûFROMû#HINAûNEXTû
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#OMMUNISTû0ARTYSûTOPûDECISION TOûMAKEûANûOFlCIALû WITHûATûLEASTûûCOMPANIESûINû giant CONTEMPORARY AMPEREX
MAKINGûBODYûALSOûFUELLEDû ANNOUNCEMENTûABOUTûTHEû !SIAûPLANNINGû)0/SûORûFOLLOW TECHNOLOGYSû2MBBNû
SPECULATIONûTHATûTHEû missed payment. The company ONSû-OSTûOFûTHEûDEALSûWILLûBEû 53BN ûFOLLOW ONûANDû(ONGû
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MOREûDOVISHûAPPROACHûTOWARDSû AûREQUESTûFORûCOMMENT SIZEABLEûOFFERINGSûFROMûOTHERû EACHûFROMû%6ûMAKERSûLEAPMOTOR,
PROPERTYûCOMPANIES &ITCHûONû$ECEMBERûûCUTû Asian companies. WM MOTOR and HOZON AUTO. „
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THEûSENIORûUNSECUREDûRATINGSûOFû Company Deal type Fundraising

EVERGRANDE SHARES HIT A NEW LOW

+AISASûBONDSûATû#ûWITHûAû LG Energy Solution KRX IPO US$10.8bn
CLOSING PRICE RECOVERYûRATINGûOFû22 VinFast US IPO US$2–3bn
HK$ 'IVENûTHEûSIZEûOFû%VERGRANDEû Leapmotor HK IPO US$1bn
30
ANDû+AISAûINûTERMSûOFûTHEIRû WM Motor HK IPO US$1bn
PROPERTYûPROJECTSûANDûDEBTûBOTHû Hozon Auto HK IPO US$1bn
25 visible and invisible Tianqi Lithium HK listing US$1bn
INTERVENTIONûFROMûTHEû CATL Follow-on Rmb45bn
AUTHORITIESûISûEXPECTEDûDURINGû Yunnan Energy New Material Follow-on Rmb12.8bn
20
ANYûRESTRUCTURINGûPROCESSûTOû Farasis Energy Gan Zhou Follow-on Rmb5.2bn
LIMITûCONTAGIONûRISKûSAIDû Jiangsu Azure Follow-on Rmb2.5bn
15 MARKETûPARTICIPANTSû Mianyang Fulin Precision Follow-on Rmb1.5bn
h4HEûMARKETûHASûALREADYû Hunan Zhongke Electric Follow-on Rmb2.2bn
10 ANTICIPATEDûTHEûDEFAULTûOFû Shenzhen Dynanonic  Follow-on Rmb3.2bn
%VERGRANDEûANDû+AISAûREmECTEDû Shenzhen Senior Technology Material Follow-on Rmb6bn
INûBOTHûTHEûSTOCKûANDûBONDû Cangzhou Mingzhu Plastic Follow-on Rmb1.37bn
5
PRICESvûSAIDûTHEû%UROPEANû Nuode Investment Follow-on Rmb2.29bn
BANKSû'REATERû#HINAû$#-û Guangdong Jia Yuan Technology Follow-on Rmb4.9bn
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2020 2021 INûTHEMSELVESûTHISûWEEKûHAVEû Anhui Tongguan Copper Foil Group A-share IPO Rmb1.2bn
Source: Refinitiv MUCHûIMPACTûONûTHEûMARKETv „ Source: IFR

International Financing Review December 11 2021 7

Top news
Denmark drops green bond
certificates for auction entry
„ Bonds Long-awaited green bond debut will blend Dutch and German approaches into a new formula

BY JULIAN LEWIS #ICEROû3HADESûOFû'REENûASSIGNEDû %XPENDITURESûONûTHEûCOUNTRYSû 7HILEûITûISûhREASONABLEûTOû

ITSûSTRONGESTûh$ARKû'REENvûRATINGû WORLD LEADINGûSUSTAINABLEû ASSUMEvûTHATûTHEûDEALûWILLû
DENMARKûONEûOFûTHEûLASTû%UROPEANû nûPERMITSûTHEûCURRENTûANDû AGRICULTUREûSECTORûAREûEXCLUDEDû ACHIEVEûAûGREENIUMûTHEû
SOVEREIGNSûSTILLûOUTSIDEûTHEûGREENû PREVIOUSûYEARSûEXPENDITURESûTOûBEû FROMûTHEûFRAMEWORKû2ENEWABLEû SOVEREIGNSûPRIMARYûREASONûFORû
BONDûMARKETûHASûDUMPEDûAû FUNDEDûTHROUGHûGREENûBONDS ENERGYûESPECIALLYûWIND ûELECTRICû ISSUINGûISûTOûBEûhPARTûOFû
COMPLEXûPLANûTOûOFFERûSTRIPPABLEû ,IKEûTHEû%UROPEANû5NIONSû VEHICLESûANDûRAILûTRANSPORTûAREûTHEû ESTABLISHINGûAûGREENûCAPITALû
GREENûCERTIlCATESûINûANûINAUGURALû .EXT'ENERATION%5ûPROGRAMMEû MAINûELIGIBLEûAREASûALTHOUGHû MARKETvû7AGNERû4OFTDAHLûADDED
GREENûBONDûDEALûANDûWILLûINSTEADû THEû$ANISHûFRAMEWORKûSEEKSûTOû $ENMARKSûSUBSIDIESûFORûELECTRICû $ENMARKûALSOûHOPESûTOûWIDENû
ADOPTû'ERMANYSûTWINûBONDû be aligned as closely as possible VEHICLESûCOULDûSTILLûBEûCHALLENGEDû ITSûINVESTORûBASEûBYûATTRACTINGûNEWû
APPROACHû(OWEVERûTHEûCOUNTRYû TOûTHEû%5SûTAXONOMYûOFû OVERûMANUFACTURERSûSUPPLYûCHAINSû BUYERSû5NLIKEûTHEûONLYûOTHERû
WILLûENTERûTHEûMARKETûNEXTûMONTHû SUSTAINABLEûACTIVITIESûANDû'REENû UNDERûTHEûTAXONOMYSûh$Oû.Oû SOVEREIGNûTOûENTERûTHEûMARKETûVIAû
THROUGHûANûAUCTIONûINûCONTRASTûTOû "ONDû3TANDARDûnûTHOUGHûNEITHERû 3IGNIlCANTû(ARMvûREQUIREMENT ANûAUCTIONûTHEû.ETHERLANDSûITû
ITSûNEIGHBOURSûDEBUTûDEALûWHICHû OFûTHESEûISûlNALISED WILLûGIVEûNOûPREFERENTIALû
came via syndication. h)TûWASûIMPORTANTûTOûSECUREû DUTCH DIVERGENCE ALLOCATIONSûTOû%3'ûINVESTORS
$ENMARKûWILLûADDûAûGREENû THATûTHEûFRAMEWORKûWEûCAMEûOUTû !UCTIONEDûGREENûBONDSûMAYûTAKEû BNP Paribas, Danske Bank and
TWINûTOûITSûû.OVEMBERûû WITHûISûALSOûRELEVANTûINûTHEû LONGERûTOûESTABLISHûGREENIUMSû NordeaûACTEDûASûADVISERSûWITHû
BENCHMARKûBONDûONû*ANUARYûû FUTUREvûSAIDû-ARTINû7AGNERû BANKERSûARGUEû$EMANDûCANûALSOû .ORDEAûASûSTRUCTURINGûADVISER
4HISûWILLûFOLLOWûTHEûSOVEREIGNû 4OFTDAHLûHEADûOFûMONETARYû be inconsistent. Recently
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ITSûGREENûBONDûPROGRAMMEûINûITSû GOVERNMENTûDEBTûATû$ANMARKSû HALFûOFûAûGREENû"UNDûAUCTION !SûAûSMALLERûSOVEREIGNûWITHû
USUALûPRE #HRISTMASûFUNDINGû .ATIONALBANKû(EûADDEDûTHATûTHEû "UTû$ENMARKûISûUNCONCERNEDû LIMITEDûBORROWINGûNEEDSû
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)TSûDISCLOSEDû$+RBNû EFFORTvûTOûENSUREûALIGNMENT IMPACTûONûINVESTORûAPPETITEûORû APPROACHûTOûAVOIDûGREENûBONDSû
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European SPACs move away from US structure

„ Equities Switzerland opens for SPACs as Mustier and De Giorgi return for more

BY ROBERT VENES FUNDûINITIATEDûINû!PRILûûTHATû "OOKSûOPENEDûONû4HURSDAYû have something completely

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8 International Financing Review December 11 2021

 @ For daily news stories
visit www.ifre.com

alongside conventional
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DRIVINGûTHEûlRSTû7ORLDû"ANKûISSUEû
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MONTHSûTOûlNDûAûTARGETû COMBINATIONû!TûLAUNCHûTWOû 4HOUGHûTHEûSYNDICATEûFOUNDû ABOUTûûVERSUSûABOUTûûFORûTHEû
EXPECTEDûTOûBEûAû%UROPEAN INVESTORSûHADûSIGNEDûUPûTOû ENOUGHûINVESTORûDEMANDûTOû comp set.
HEADQUARTEREDûBUSINESSûWITHûAû INVESTûANûAGGREGATEûõM PRICEûTHEûDEALûATûTHEûTOPûOFûTHEû h)ûDONTûTHINKûPEOPLEûWEREû
TRACKûRECORDûOFûHIGHûGROWTHû !ûSECONDûBANKERûINVOLVEDûSAIDû 53nûRANGEû.UûPREVIOUSLYû RUSHINGûTOûOVERPAYûFORûITûBUTû
4HEREûISûANûOPTIONûOFûAûSIX THEûûINCENTIVEûBOLSTEREDû CUTûTHEûRANGEûFROMû53nû THEREûWASûAûLOTûOFûINTERESTûFROMû
MONTHûEXTENSIONûSUBJECTûTOû INTERESTûBUTûTHEREûWASû TOûACCOUNTûFORûAûROUGHLYûû THEûBIGûGUYSûBECAUSEûITûISûANû
SHAREHOLDERûAPPROVAL SIGNIlCANTûFRIENDS AND FAMILYû AVERAGEûDECLINEûINûTHEûSHAREû ASSETûYOUûHAVEûTOûOWNvûTHEû
.OTABLYû0EGASUSû%UROPEûHASû INTEREST PRICESûOFû,AT!MûANDû53ûlNTECHû BANKERûSAID
YETûTOûMAKEûANûACQUISITIONû h4HEûLIKESûOFû4IKEHAUûANDûOTHERSû PEERSûDURINGû.OVEMBER !TûLAUNCHûHALFûOFûTHEû)0/ûWASû
HOWEVERûTHEûSECONDû30!#û INVOLVEDûINû0EGASUSûAREûWELLûTRUSTEDû !ûTIMELYûREBOUNDûINûGROWTHû ALREADYûSPOKENûFORûBYûAûGROUPûOFû
RAISEDûMOREûTHANûITSûTARGETûOFû ANDûSEASONEDûANDûHAVEûAûTRACKû STOCKSûINûTHEûTHREEûSESSIONSû HIGH POWEREDûCORNERSTONEû
õM RECORDvûHEûSAIDûh)FûYOUûDONTûCOMEû AHEADûOFûPRICINGûGAVEûSOMEû INVESTORSûAMONGûTHEMû3EQUOIAû
4HEûSPONSORSûINVESTEDûõMû WITHûTHATûSAMEûDEPTHûOFûEXPERIENCEû ADDITIONALûMOMENTUMûANDû.Uû #APITALû"AILLIEû'IFFORDû
ONû)0/ûTERMSûPLUSûõMûFORû ANDûCREDIBILITYûUNLESSûYOUûAREû SHARESûCLOSEDûTHEIRûlRSTûDAYû 3OFT"ANKû$RAGONEERû
THEIRûûPROMOTEû4HEREûISûALSOû BRINGINGûINûMONEYûYOURSELFûYOUûDOû INSIDEûTHATûINITIALûRANGEûENDINGû )NVESTMENTû'ROUPûANDû4IGERû
ANûUPûTOûõMûFORWARDûPURCHASEû NEEDûTOûHAVEûTHEûOVERFUNDINGûANDû 4HURSDAYûUPûûATû53û 'LOBALû-ANAGEMENTû.OTû
AGREEMENTûWITHû4IKEHAUûANDû OTHERûFEATURESûTHATûAREûMOREû AFTERûTRADINGûASûHIGHûASû NAMEDûAMONGûTHEMûWASû
!RNAULTû INVESTOR FRIENDLYv US$12.24. "ERKSHIREû(ATHAWAYûTHOUGHû
4HOUGHûAûFAIRLYûTRADITIONALLYû 0EGASUSûSHARESûDEBUTEDûONû THEûLEGENDARYûINVESTMENTûlRMû
STRUCTUREDû30!#ûTHEûSPONSORSû &RIDAYûANDûCLOSEDûUPûûATûõ DISRUPTOR REPORTEDLYûDIDûPARTICIPATEûINûTHEû
OFFEREDûTOûSHAREûSOMEûOFûTHEIRû BNP Paribas, Citigroup and 4HURSDAYSûCLOSINGûPRICEûVALUEDû )0/ûAFTERûINVESTINGû53MûINû
INVESTMENTûFORûINVESTORSûPUTTINGû Goldman SachsûWEREûJOINTû THEûEIGHT YEAR OLDûCOMPANYû .UûINûAû*UNEûPRE )0/ûlNANCINGû
INûATûLEASTûõM BOOKRUNNERS „ at US$47.6bn, topping the ROUNDû „

International Financing Review December 11 2021 9

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An LSEG Business
 People

13
&
Oil major Shell
looks set to be
Markets
15 A Madrid
court orders 18 Wall Street is
unsettled by
among the European Santander to pay a spate of Covid-19
companies targeted Andrea Orcel €68m cases at Jefferies, but
by activist investors for withdrawing an the bank says it is just
offer to make him CEO being cautious

„ FRONT STORY STRATEGY

UniCredit targets advisory and ECM growth

CEO Orcel aims to distribute €16bn in 2022–24 strategic plan
UNICREDIT plans to selectively build up its of solutions to our clients, which is plan is based on organic growth, although
M&A advisory and equity capital markets something we were not able to do as well as he will keep an eye on acquisitions which
businesses in its investment bank as part of we would have wished in advisory and could add value.
a new three-year plan announced by CEO equity capital markets, given we were His plan aims to increase net revenues by
Andrea Orcel to increase revenues, improve under-invested in the business,” Orcel said. 2% per year through 2024 and deliver a net
PROlTABILITYûANDûRAMPûUPûPAYOUTSûTOû He said the cost of origination and risk PROlTûOFûATûLEASTûõBNûINûûFROMûABOUTû
shareholders. would be lower as the business will be with €3.3bn expected for 2021.
Orcel said his plan aimed to “unlock the existing clients, and rivals are not the bulge- The bank intends to distribute at least
potential” of UniCredit across its footprint bracket banks Orcel used to work for and €16bn for 2021–24 through dividends and
of 13 countries, spanning Italy, Germany, compete with. He said UniCredit did well in share buybacks, and keep excess capital of
and Central and Eastern Europe. He wants to debt capital markets and “we punch above 100bp–150bp. It aims to distribute €3.7bn
lift the Italian bank’s return on allocated our weight”. for 2021 and a similar or higher amount for
capital to at least 10% by 2024, from about 2022, and higher payouts after that.
7% in 2021. DIVIDENDS AND BUYBACKS That payout was higher than expected,
That includes increasing revenues in the Orcel made his name as a star M&A banker ANDû5NI#REDITSûSHARESûJUMPEDûûONû
advisory and capital markets business by at Bank of America and then headed UBS’s Thursday to €12.80, their highest level since
11% per year until 2024, from about €500m investment bank, and took over at UniCredit February 2020.
in 2021, indicating an extra €180m in fees to in April. The payout equates to 56% of UniCredit’s
about €680m in 2024. This represents easily Earlier this year UniCredit was in talks to market capitalisation, even after the rally.
the punchiest growth ambitions for any unit buy troubled Italian rival Banca Monte dei h#APITALûRETURNSûREPRESENTûAûSIGNIlCANTû
in the new corporate solutions division, Paschi di Siena, but Orcel spurned the terms short and mid-term support for UniCredit,”
which also includes client risk management, on offer and said on Thursday his 2021–24 said Barclays analyst Paola Sabbione in a
specialised lending, and transactions and note. “The P&L goals seem reasonable, based
payments. UNICREDIT BOUNCEBACK PLAN on both revenue (fees) and cost
%
“Where we can do a lot more is on the €bn improvements. However, we miss clarity on
14
advisory and equity capital markets area, so 6 detailed drivers, and it will take time to
12
WEûAREûINVESTINGûSIGNIlCANTLYûINûTHATû 5 DELIVERûPROlTABILITYûRECOVERYv
10
business, but always with a view of keeping 4
Orcel is targeting €1.5bn of gross cost
it targeted and focused to our existing 8 savings by 2024 and a net cost reduction of
3
clients,” Orcel said on a media conference 6 €500m. He intends to invest €2.8bn in digital
call. “It’s a business that needs developing 2 4 and data investments to establish UniCredit
and we are hiring, and we have quite a lot of 1 as a leading digital bank, which will include
2
EXPECTATIONûFORûITû4HEûPLANûHASûSIGNIlCANTû hiring 2,100 extra staff. He has already
0 0
growth rates we are assuming for it, albeit named a new digital and information
–1 –2
from quite a low base.” OFlCERû*INGLEû0ANGûWHOûOVERSAWûTHEûlNTECHû
UniCredit has more than one million –2 –4 transformation of China’s Ping An Insurance
corporate clients, mostly small and mid- –6 Group.
–3
SIZEDûlRMSûBUTûALSOûMAJORûCORPORATESûANDûITû –8 Like many rivals, Orcel is also planning to
–4
has longstanding relationships with most. 2017 2018 2019 2020 2021E 2024
ramp up business related to sustainability,
“Our ambition is not to go out there and Target and is targeting €150bn of new ESG lending
compete with everyone. Our ambition is to Net profit €bn (lhs) RoTE % (rhs) volumes in the next three years.
improve our penetration and our provision Source: UniCredit results, Strategy Day December 9 Steve Slater

International Financing Review December 11 2021 11

“This is unprecedented. We’ve never
seen this level of activity in Asia”
MORGAN STANLEY’S SAURABH DINAKAR ON FUNDED COLLARS, P17

Central banks test settlement risks of digital currencies

Central banks have tested the resilience of using INTERNATIONALûSETTLEMENTSûBETWEENûlNANCIALû h*URAûDEMONSTRATESûHOWûWHOLESALEû#"$#Sû
digital currencies in typical cross-border institutions. can optimise cross-currency and cross-
wholesale transactions, signalling how seriously That has long been a key risk monitored border settlements, which are a key facet of
they are taking the use of such products. BYûlNANCIALûSUPERVISORSûWHOûFEARûTHATûAû international transactions,” said Sylvie
The SWISS NATIONAL BANK and the BANK OF counterparty could fail before a transaction Goulard, deputy governor of the Bank of
FRANCE conducted a series of transactions to is completed, as happened with Lehman France.
settle foreign exchange payments and a Brothers’ failure in September 2008. Some smaller central banks, such as the
€200,000 10-day euro commercial paper deal The deals tested settling FX transactions Bahamas, have already issued CBDCs but
to see how central bank digital currencies in euro and Swiss franc CBDCs, and issuing, larger ones are at different stages of
would work in such scenarios. transferring and redeeming tokenised euro- assessing them. Goulard said the eurozone
The daily turnover in global FX markets denominated French commercial paper had not yet decided on whether to introduce
can be more than US$6trn and international BETWEENû&RENCHûANDû3WISSûlNANCIALû a euro CBDC.
arrangements only cover a small range of institutions. h7EûCANNOTûPREJUDGEûTHEûDECISIONûOFûTHEû
currencies, assets and participants in the h0ROJECTû*URAûCONlRMSûTHATûAûWELL [EU] governing council,” she said. “But we
market, meaning cross-border settlements designed wholesale CBDC can play a critical are convinced we need to dig deeper and
are riskier, slower and more costly than role as a safe and neutral settlement asset MAKEûSUREûSYSTEMSûAREûEFlCIENTûANDûSAFEû7Eû
domestic ones. FORûINTERNATIONALûlNANCIALûTRANSACTIONSvû AREûNOTûATûTHEûENDûOFûTHEûJOURNEYû4HISûISûANû
The BANK FOR INTERNATIONAL SETTLEMENTS was said Benoit Coeure, head of the BIS IMPORTANTûlRSTûSTEPv
also involved in the experiment, called Innovation Hub. Coeure said: “The ultimate ambition is to
0ROJECTû*URAû4HEûPARTICIPANTSûSAIDûAûKEYû 0RIVATEûSECTORûlRMSûWEREûINVOLVEDûINûTHEû make cross-border transactions simpler and
outcome was that such currencies might be PROJECTûINCLUDINGûCREDIT SUISSE, UBS and faster.”
USEDûBYûlNANCIALûINSTITUTIONSûTHATûAREûNOTû NATIXIS. The banks directly transferred
RESIDENTûINûTHEûJURISDICTIONûWHEREûTHEû CBDCs between each other on a single “HUGE IMPACT”
transactions took place. platform based on distributed ledger Mohamed Kallala, co-head of corporate and
The three institutions concluded that technology in a near real-time situation that investment banking at Natixis, told IFR the
CBDCs could be used effectively for met regulatory requirements. use of blockchain technology and CBDCs

Oudea takes on risk and compliance at SG but is still way below the €82 level at the
beginning of 2008.
SOCIETE GENERALE’s longstanding chief accusations it dodged sanctions against Now the DPA has been completed, Oudea
executive Frederic Oudea, who has been in the Cuba and other countries. will be responsible for risk and compliance
position since 2008, is adding to his SG’s three-year deferred prosecution INûADDITIONûTOûAUDITûlNANCEûHUMANû
extensive responsibilities by taking over agreement from the case recently ended. resources and communications.
direct supervision of risk and compliance Earlier in 2018 the bank paid US$1.3bn to US Diony Lebot, who was responsible for the
across the French bank. and French authorities over transactions with remediation programme with US
SG has faced several risk issues during Libya and rigging Libor. That saw former authorities, will now be in charge of ESG
Oudea’s tenure. His reign started in the investment banking head Didier Valet go. policies across the bank. She remains
same year as the bank lost nearly €5bn from The bank’s fortunes have improved over RESPONSIBLEûFORûSPECIALISEDûlNANCIALûSERVICESû
AûSERIESûOFûROGUEûTRADESûBYû*EROMEû+ERVIELû the last year and its shares are up 72% this and insurance activities.
and in 2018 the bank paid US$1.4bn in a year to €29.28. That makes it one of the best Gaelle Olivier, chief executive for Asia, has
settlement with US authorities following performing European bank shares this year, been appointed group chief operating

Who’s moving where…

ROTHSCHILD & institutions group in Lenaig Trenaux has SG in 2006. Trenaux
CO has hired John investment banking been promoted to previously worked
Brennan from after joining the SOCIETE GENERALE’s for Natixis and BNP
Goldman Sachs as bank in 2005 and global head of mining, Paribas. She will
head of UK financial becoming partner in metals and industries replace Stephanie
institutions and co- 2020. He previously finance, based in Clement de Givry, who
head of European spent two years at Paris. She has been is moving to head
financial institutions Deutsche Bank and regional head of the global banking and
in its global advisory three years at JP mining, metals and advisory for Asia-
team, based in Morgan. industries finance Pacific in Hong Kong.
London. Brennan team for the Americas
was a partner in in New York since
Goldman’s financial 2016 after joining

12 International Financing Review December 11 2021

 People
& Markets
more widely could have “a huge impact on
THEûlNANCIALûINDUSTRYv
Shareholder activists set sights on Europe
He said stablecoin initiatives of this kind Shareholder activism is roaring back after a While not a formal proposal, the call is being
would have “more impact than bitcoin and brief pause following the outbreak of a taken as an activist threat, according to bankers.
related crypto assets”. Such assets account global pandemic and companies and their “Shell has too many competing
for 95% of the total market value of all advisers are expecting the coming season to stakeholders pushing it in too many
cryptocurrencies, currently over US$2trn. be busy – including a potential “golden age” different directions, resulting in an
“This will provide additional services to for activism in Europe. INCOHERENTûCONmICTINGûSETûOFûSTRATEGIESû
INVESTORSûBEYONDûBEINGûJUSTûANOTHERûASSETû It is unclear if the pause in activism was attempting to appease multiple interests but
class,” he said, noting that stablecoins linked out of respect for a global crisis or because satisfying none,” Third Point CEO Daniel
to real currencies would have a wide impact soaring equity markets left little to agitate Loeb said in an open letter. “Some
on banks. for, but the gloves now seem to be off. governments want Shell to decarbonize as
“There is a lot of serious work looking at “Our refreshed outlook predicts a rapidly as possible. Other governments want
the impact of stablecoins. With CBDCs you SIGNIlCANTûINCREASEûINûTHEûNUMBERûOFûPUBLICû it to continue to invest in oil and gas to keep
may see central banks growing deposits, activist campaigns across Europe during energy prices affordable for consumers.
which are guaranteed direct by the central 2022,” said Alvarez and Marsal in its latest Europe paradoxically wants both!”
BANKûRATHERûTHANûBEINGûPLACEDûWITHûlNANCIALû ACTIVISMûSURVEYû4HEûADVISORYûGROUPûIDENTIlEDû Activist hedge fund Elliott Advisors is
institutions.” 58 companies at risk of becoming targets over MEANWHILEûPUSHINGûFORû5+ûENERGYûlRMûSSE
That could change how banks are funded, the next year, up from 53 earlier in the year. to split up.
with them having to rely more on wholesale The predicted increase in activism marks Both campaigns come in the wake of a
markets if some of their deposits are lost. a continuation of the trend. STUNNINGûUPSETûSUFFEREDûBYû%XXONû-OBILûINû*UNEû
“We will be prepared for this and we are !FTERûAûSUBDUEDûlRSTûQUARTERûINûWHICHû as activist investors won three board seats.
ADVISINGû;lNANCIAL=ûCLIENTSûONûTHEûIMPACTûOFû public campaigns were down 35% compared Europe is set to enter a “Golden Age for
this as deposits move to central banks and WITHûTHEûlRSTûQUARTERûOFûûACTIVITYûHASû Activism” with a surge in activity during
HOWûTHISûWILLûIMPACTûHOWûTHEYûlNANCEû ramped up as uncertainty caused by the 2022, A&M said.
themselves,” said Kallala. pandemic is gradually giving way to greater “As the fog gradually clears and corporate
The European Central Bank is understood corporate visibility, A&M said. visibility improves following the acute
to be studying this aspect. Between March and September, activist phase of the pandemic, investors will look
Christopher Spink campaigns in Europe rebounded strongly and to capitalise on this target-rich environment
were up 22% year-on-year. However, over the to generate ever greater returns.”
same period the number of US campaigns fell by The companies predicted to be at risk over
OFlCERûINûCHARGEûOFû)4ûANDûDIGITALû 26%, demonstrating the growing importance of the next 12 to 18 months have a larger
transformation, another key strategic Europe for activist investors, A&M said. average market capitalisation – £20.2bn or
initiative for the group. “We also predict a continued shift in focus €23.6bn – than those targeted in 2021 to-
Cecile BartenieffûCHIEFûOPERATINGûOFlCERûFORû among activists that will see them date (£16.9bn/€19.8bn) and during 2020
global banking and investor solutions, concentrate on slightly fewer but larger (£12.3bn/€14.4bn).
where the investment bank sits, will take companies and hold their investments on A&M is predicting that activist campaigns
over from Olivier as Asia CEO. She has been average for longer periods,” A&M said. will focus on a slightly smaller number of
in her role for four years. larger targets over the next 18 months. The
Oudea said creating two posts at general BREAKING SHELLS lRMûSAIDûRECENTûCAMPAIGNSûAGAINSTû'3+ûANDû
management level for ESG and IT was Indeed, before the campaign season kicked Shell highlight the strength of this trend.
important as these two areas “will affect all into gear in December, hedge fund Third In Europe, activists will continue to focus
our businesses and functions”. Point unveiled a stake in ROYAL DUTCH SHELL and on the UK, but Germany will continue to be a
4HEûCHANGESûAREûEFFECTIVEû*ANUARYû pushed for the oil company to break itself up key market.
Christopher Spink and create a standalone renewables business. Philip Scipio

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

HOULIHAN LOKEY investment banking Giovanni Galvani from Caius Capital,

hired Geoff Wilson as a practice. He previously (left) has joined where he was head
managing director in spent 15 years at BLUEBAY ASSET of marketing and
its power and utilities McManus & Miles, MANAGEMENT as investor relations for
group, focusing and has also worked an analyst and James four years. Galvani
on the renewable at Merrill Lynch and Rous has joined as an was a distressed debt
power sector, based Bank of America. institutional portfolio and special situations
in New York. Wilson manager, to bolster analyst at SC Lowy,
joined from boutique the firm’s leveraged where he spent six
investment bank finance and special years, after previously
Whitehall & Co situations capabilities. spending a year at
where he shaped its They are based in Fidelity.
renewable energy London. Rous joined

International Financing Review December 11 2021 13

Bellwether
Bellwether: n. From the practice of placing a bell around the protocol from the moment I entered the country on November
neck of a castrated ram so that it might lead its flock 28 2021 until I left,” Horta-Osorio said in a statement.
Except that he violated the rules on December 1. So his
IN THE MOST recent episode of Succession, the multi-award “strict” adherence lasted three days.
winning comedy-drama about a dysfunctional corporate That’s even shorter than Bellwether’s usual attempt at
family, foul-mouthed proprietor Logan Roy is discussing a $RYû*ANUARY
potential acquisition by his entertainment conglomerate In fairness, it was an unintentional breach and in the grand
7AYSTARû2OYCOûOFûAûSHINYûTECHûCOMPANYûCALLEDû'O*O SCHEMEûOFû#REDITû3UISSEûTHINGSûITûPALESûINTOûINSIGNIlCANCEû
The Credit Suisse logo features prominently in the state- against “the surveillance matter”, or the “prime brokerage
of-the-art meeting room as the family discusses mergers of matter”, not to mention the “Greensill matter”. In fact,
equals and takeover tactics. After some to and fro, Logan compared with those, it doesn’t matter at all.
decides there’s the chance of a deal.
The whole thing has the air of smart product placement THE EIGHT-HOUR speech given by Indian politician VK Krishna
– right up until Logan turns to a speaker phone underneath Menon in 1957 in which he explained his country’s position
the Credit Suisse logo and barks “Bring ‘em in. Let’s get the on Kashmir is listed by Guinness World Records as the
banker fucks in here on this”, and the shot holds on the longest speech delivered at the United Nations.
Credit Suisse logo before the deal team trots in. When Andrea Orcel emerged alone with a steely glint in
For anyone in the Credit Suisse marketing department his eye to present UniCredit’s new strategy single-handedly,
who’s not aware of this piece of TV gold, it takes place in many will have feared the worst and worried he might be
the 60th minute of episode 8, series 3. You’re welcome. looking for a place in the history books.
Given the sort of scandal-hit year Credit Suisse has After laying down his solo vision, he paused for a break and
endured, is it showing it has a sense of humour, or is this a RE EMERGEDûINûAûMOREûRECOGNISABLEû1!ûFORMATûmANKEDûBYûHISû
SIGNALûFROMûONûHIGHûABOUTûWHATûTHEûlRMûREALLYûTHINKSûABOUTû fellow executives, some of whom got a word in during Orcel’s
its investment bankers? second back-to-back 90-minute session of the day.
4HEûlNALûQUESTIONûCAMEûFROMûANûANALYSTûATû3ANTANDERûAûBANKû
CREDIT SUISSE PROVIDED some real-life fun too last week when that Orcel was set to run until a row over his pay ended up in
its chairman Antonio Horta-Osorio did what some prime the courts and prompted his eventual move to UniCredit.
MINISTERSûANDûBUSINESSûEXECUTIVESûlNDûNEARLYûIMPOSSIBLEûHEû Would the word “Santander” cause Orcel to twitch like
made an apology. an actor hearing the word “Macbeth”? Not at all. Asked
Horta-Osorio apologised for unintentionally breaking about which markets he would grow in, Orcel said: “Life
Covid-19 rules during a recent visit to Switzerland by has the habit of showing you opportunities when you least
leaving the country during a 10-day quarantine period. expect them, or when you are least ready.” It was almost
But on closer inspection, his apology is not exactly fulsome. “I poetic... especially when Orcel found himself €68m richer
aim to abide by Swiss quarantine rules and strictly followed the the next day. „

Who’s moving where…

„ Boutique government services „ NUMIS has hired equity analyst; and „ WILLIAM BLAIR to IGP head Elliot
investment bank team. He recently three people for Rachel Stott joined has nabbed Jim Farkas. IGP focuses
DC ADVISORY has worked on BAE its growth capital after being strategy Conniff as a managing on tech-enabled
hired Ellis Chaplin as Systems’ acquisition solutions team in manager at drinks director to beef up applications such as
managing director for of Bohemia Interactive London in recent company Fever-Tree, its industrial growth robotics, motion and
its aerospace, defence Simulations. months. Gbolahan after four years in products investment flow control, sensors
and government Ladipo joined from equity research at banking team. and automation, and
services team, based Nomura, where he JP Morgan. Numis Conniff, who joined energy and power.
in Washington, DC. spent seven years; has also hired from Lazard after prior
Chaplin joins from Matt Wisniewski Tiina Winnan from stints at Goldman
Raymond James, joined after seven Goldman Sachs as Sachs and Robert
where he worked years at Barclays, head of operations. W Baird, is based in
in the defence and most recently as an Chicago and reports

14 International Financing Review December 11 2021

 People
& Markets
JP Morgan sees Q4 IB fees up 35% Pinto said. Still, performance in 2021 was a
better outcome than he was planning for.
A record year for investment banking fees Brian Moynihan. That would represent a rise Pinto said FICC revenues could be down
is likely to end on a high note, according in revenues of at least 7% from a year ago, about 10% in the fourth quarter compared
to guidance from bank bosses last week. when it reported US$1.86bn in investment WITHûTHEûlNALûQUARTERûOFûûWHENûTHEû
JP MORGAN is expecting fee revenues in the banking revenues. bank reported FICC revenues of nearly
fourth quarter to be up about 35% from a CITIGROUP CHIEFûlNANCIALûOFlCERû-ARKû US$4bn. Revenues from equities trading are
year earlier. Mason said he expects to see “good fee LIKELYûTOûBEûmATûWITHûAûYEARûAGOûWHENûTHEYû
*0û-ORGANûREPORTEDûRECORDû/CTOBERn revenue growth” in the quarter. The bank came in at about US$2bn.
December investment banking revenues a reported a 5% decline in investment banking Revenues from equities trading have
year ago of nearly US$2.6bn, which was up revenues in Q4 2020 compared with 2019. surged this year for most banks to make up
34% compared with the end of 2019. for the reduction in FICC trading levels, but
“When you compare the fourth quarter of TRADING BUST next year equities trading revenues are
2021 with the fourth quarter of 2020, While investment banking fees are likely to likely to begin a slide back to more
investment banking fees are going to be up continue a record run at most banks – normalised levels, Pinto said.
in the mid-30s, plus or minus,” said Daniel propelled by a record-setting pace for M&A Equities trading revenues across the
0INTOû#%/ûOFû*0û-ORGANSûCORPORATEûANDû transactions – trading revenues will continue to industry will have reached about US$77bn
investment bank. stabilise at below the robust pace set in 2020. this year, well above the normal range of
Pinto said the pipeline across M&A, debt 0INTOûESTIMATEDûTHATûTOTALûINDUSTRYûlXEDû US$55bn to US$65bn, Pinto said.
and equity underwriting looks quite strong income trading revenues are likely to be Citi expects fourth-quarter trading to be
into next year. Executives were speaking at about US$125bn this year, down from mATûTOûDOWNûMODESTLYûFROMûAûYEARûAGOûWHENû
'OLDMANû3ACHSûlNANCIALûSERVICESûCONFERENCE US$147bn in 2020. That’s still well above the trading revenues were US$3.9bn, up 14%
BANK OF AMERICA is also expecting a strong trough of about US$100bn in 2019. FROMûTHEûlNALûQUARTERûOFû
lNISHûTOûTHEûYEARû4HEûBANKûISûEXPECTINGû “Some of the normalisation has already BofA is expecting to match year ago levels
“another US$2bn quarter” from investment happened … and probably we’re going to in trading, Moynihan said.
banking fees in the fourth quarter, said CEO see some more normalisation next year,” Philip Scipio

Santander told to pay Orcel €68m over job offer

A Madrid court has ordered SANTANDER to pay damage,” the ruling, dated December 9 but The case revolved around whether a four-
Italian banker Andrea Orcel €67.8m (US$76.4m) released on Friday, said. page offer letter to Orcel in September 2018
over an offer to make him CEO that the Santander and Orcel’s legal team declined was a binding contract or a non-binding
Spanish bank withdrew, Reuters reported. to comment. initial offer, as Santander chairman Ana
4HEûCOURTûSAIDûTHEûBANKSûJOBûOFFERûLETTERûTOû The court said Santander has to pay Orcel "OTINûASSERTEDûINûTHEûlRSTûSESSIONûOFûTHEû
Orcel was a binding contract and Santander €17m for a sign-in bonus, €35m for a buyout Madrid court hearing in May.
will have to pay him the compensation. clause, €5.8m for two years’ salary and €10m )Nû*ANUARYûû3ANTANDERûSAIDûTHEûBANKû
“The contract was unilaterally and for moral and reputational damage. could not meet Orcel’s pay demands, which
arbitrarily rescinded by Banco Santander,” The court said that Santander would also have included covering up to €35m (US$41m)
the court said in its ruling, which can be TOûPAYûLEGALûINTERESTûSINCEûTHEûDATEûOFûlLING of a €55m compensation package he
appealed before a Madrid regional court. Orcel sued Spain’s largest bank after it was due to receive in future years
“The situation created by Banco WITHDREWûTHEûJOBûOFFERûALMOSTûTHREEûYEARSû from UBS.
Santander caused Mr Orcel clear moral ago in a dispute over his pay package. Jesus Aguado, Emma Pinedo

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

„ Denis Vucina, become head of Swiss „ HSBC has poached „ CREDIT SUISSE’s state-controlled „ BLACKSTONE has
head of Swiss franc and alternative Ajinkya Mukhopadhyay Brazilian unit lender Banco do hired two executives
franc syndicate at currency syndicate, from UBS to head named former Brasil from 2009 for its US$81bn hedge
DEUTSCHE BANK in and will assume its TMT group for Petrobras CEO to 2015. fund. David Ben-Ur
Zurich, is retiring after responsibility for the Southeast Asia and Ivan Monteiro and will join as chief
21 years in syndicate Zurich debt syndicate India within its global wealth management investment officer
and more than a desk from January 1. banking division, executive Marcello of the hedge fund
decade at the bank, based in Singapore. Chilov as interim solutions business.
a source said. Vucina Mukhopadhyay ran co-CEOs, replacing Atish Nigam will join
will leave at the end UBS’s TMT franchise Jose Olympio Pereira, as CIO of the special
of 2021. Christian in Southeast Asia and Reuters reported. situations investing
Spahn, director in India for two years. Monteiro was also business.
DCM syndicate, will previously CFO of

International Financing Review December 11 2021 15

“Green bonds will require EM issuers to disclose how the
capital raised will be deployed and ring-fence the capital”
BNP PARIBAS REPORT ON GREEN BONDS, P18

Capital markets week ahead:

Samsara, Evergrande, Hungary
‘TWAS THE WEEK BEFORE CHRISTMAS STUFFING THE TURKEY Italian football club SLEIGH BELLS RING MTN Nigeria, which
3AMSARAûTHEûmEETûMANAGEMENTûPLATFORMû *UVENTUSûISûDUEûTOûWRAPûUPûITSûõMûRIGHTSû operates the largest mobile phone network
that bills itself as one of the fastest-growing issue on Thursday, a deal that’s critical to in Africa’s most populous country, looks set
TECHNOLOGYûlRMSûINû3ILICONû6ALLEYûLOOKSûSETû STEADYINGûTHEûCLUBSûlNANCESûFOLLOWINGûTHEû to complete a N97bn (US$240m) share sale
TOûBEûTHEûlNALûCOMPANYûTOûGOûPUBLICûINû.EWû bruising impact of the pandemic. It’s on Tuesday. Parent MTN Group is selling
York this year. It is due to price its US$800m unclear how an ongoing investigation into 575m shares as part of plans to gradually
NYSE listing on Tuesday, proceeds from alleged false accounting will affect the deal. REDUCEûITSûHOLDINGûANDûCOMESûJUSTûTWOû
which will go towards plugging ongoing 0OLICEûRAIDEDûTHEûCLUBSûOFlCESûJUSTûHOURSû months after it listed MTN Uganda.
losses – and fund future growth. before subscription began two weeks ago.
The deal caps the biggest year on record
for the US IPO market, with more than 300
companies going public and raising around
US$115bn between them. That’s about 70%
higher than the previous record. In Europe,
historically a much smaller market, growth
has also been dramatic – IPO volumes have
quadrupled from last year.

MULLED WINE Swedish vintner Viva Wine is

PARTY GAMES Mobile gaming platform Skillz set to close books on Friday for its Nasdaq
is set to make its bond market debut with a Stockholm IPO in a deal that looks set to
JUNKûOFFERINGûTHATûWILLûTESTûINVESTORûAPPETITEû raise SKr1.2bn (US$130m). Proceeds from
FORûCOMPANIESûYETûTOûTURNûAûPROlTûORûGENERATEû the IPO will repay loans taken out to fund
FREEûCASHmOWû4HEûCOMPANYûMERGEDûWITHû the acquisition of Vicampo.de, its 11th
Flying Eagle Acquisition Corporation in a acquisition since 2009. Its produces and sells
US$3.5bn deal a year ago and operates a its own and partner wines in the Nordics,
platform that allows players to compete Germany, Switzerland, Austria, France and
ALL IS CALM, ALL IS BRIGHT The fallout from across the world via their phones. the Netherlands.
troubles at Evergrande continues, after the
Chinese real estate developer was declared NAUGHTY OR NICE? A French court is expected
technically in default on its offshore bonds to give its ruling on Monday on whether UBS The Capital Markets Week Ahead briefing will be
last week. The decision triggered cross- helped clients evade taxes, which could taking a short break and will return in January.
default clauses on around US$19bn of debt, RESULTûINûAûlNANCIALûPENALTYûOFûUPûTOûõBNû IFR wishes its readers a Merry Christmas and
creating further stress on the company as it The case has been rumbling for years, and Happy New Year.
SEEKSûTOûMANAGEûûREALûESTATEûPROJECTSû UBS has only provisioned €450m against the
and around US$300bn in liabilities. case. But it has plenty of cash in reserve, and
investors hope that resolution of the case will
HO HO HOû(UNGARYûISûSETûTOûLAUNCHûTHEûlRSTû open the door to higher payouts. LAST WEEK IN NUMBERS
green sovereign Panda bond on Tuesday in US$50bn – Valuation for Brazilian online
China’s interbank bond market. The Eastern JINGLE BELLS India is braced for three IPOs bank Nu, after its US$2.6bn dual listing
European sovereign is looking to raise in Mumbai. First up is CE Info Systems, also 5.25% – Coupon on £210m bond sale
Rmb1bn (US$160m) from the three-year known as MapmyIndia, which is expected to FROMûABRDNûTHEûlRSTûEVERû!4ûFROMûANû
deal, proceeds from which will help fund its price its Rs10bn (US$130m) offering on asset manager
transition to a low-carbon economy. Monday. Metro Brands, formerly called €16bn – Amount UniCredit plans to
Hungary has twice previously sold debt in Metro Shoes, prices its Rs13.7bn deal on return to shareholders over the next
the Panda market – in 2017 and then a year Tuesday, and MedPlus Health Services three years
later. follows with a Rs14bn deal on Wednesday.

16 International Financing Review December 11 2021

 People
& Markets
Funded collars hit record in Asia equity capital markets banker at a European
bank said there were fewer banks in Asia
WITHûSTRONGûmOWûDERIVATIVESûBUSINESSESûANDû
Funded collars, a relatively rare type of and equity-linked solutions at Morgan the reduced competition means banks can
SHARE BACKEDûlNANCINGûINû!SIAûHISTORICALLYû Stanley. “This is unprecedented. We’ve never charge more than in Europe and the US.
AREûENJOYINGûTHEIRûBESTûYEARûONûRECORDûINûTHEû seen this level of activity in Asia.” The lack of liquidity is the main reason
region, according to bankers. why collars have been used less commonly
These structures involve banks selling “HERE TO STAY” in Asia, but there are several reasons why
investors a put option and buying a call /VERALLûDEALûVOLUMESûAREûDIFlCULTûTOûQUANTIFYû volumes are expected to continue growing.
option and then lending against the ASûTHEûVASTûMAJORITYûOFûTRANSACTIONSûAREû More unicorns in the region are listing.
“collared” shares. private, although one banker said the Since a lot of founders and early stage-
This is providing a lucrative source of new number of deals at his bank had risen investors will look to monetise their
business for banks and also helping reduce threefold this year. There is some debate shareholdings at some point, many will opt
their risk compared with more traditional about whether overall volumes are up as last FORûCOLLARûlNANCINGSûRATHERûTHANûBLOCKû
margin lending. YEARSûlGURESûWEREûSKEWEDûBYû3OFT"ANKSû trades because investors in some of the
Traditionally associated with highly HUGEû53BNûlNANCINGûONûTHEûBACKûOFûITSû region’s fast-growing tech companies are
acquisitive companies such as China’s shareholding in Alibaba Group Holding. usually reluctant to sell their shares
recently restructured HNA Group, the use of 4HEREûHAVEûBEENûFEWERûHIGH PROlLEûPUBLICû IMMEDIATELYûWITHOUTûBENElTINGûFROMûANYû
FUNDEDûCOLLARSûISûUPûSIGNIlCANTLYûEVENûONû deals this year. The most notable involved potential upside.
last year, which was already a bumper year, China’s ENN GROUP, which raised A$650m The expected rebound in cross-border M&A
bankers say. 53M ûTHROUGHûAûCOLLARûlNANCINGûONûITSû activity is also expected to see more investors use
They attribute this to market volatility, in 9.97% stake in Australian oil and gas producer collars to build up stakes in target companies as
particular following the regulatory SANTOS via Morgan Stanley and UBS. HNA did to build up its shareholding in Deutsche
crackdown in China across several sectors. Investors in Asia have tended to eschew Bank, while Geely Automotive did the same for
As a result, more investors are opting for collars in the past given that the upside is its stake in Daimler.
these structures instead of margin loans capped. They are also usually more And bankers said they expected investors
because there is no risk of having to post expensive than borrowing on margin unless to keep the more prudent approach they
more collateral if share prices dip. they are structured as zero-cost collars, have taken in response to market volatility
At the same time, banks are pitching which is rare. this year, even when bull market conditions
these products more aggressively, having “One product is not necessarily more risky return.
less risk appetite for providing margin than the other, as there can be well-structured “Eventually, once things stabilise a bit, the
lending after the collapse of Archegos margin loans and poorly structured collars margin loan business will come back, but the
Capital Management, which defaulted on a and vice versa; but all things being equal, it’s POPULARITYûOFûCOLLARûlNANCINGSûISûHEREûTOûSTAYvû
series of margin calls, led to massive losses generally true that the maximum loss in a tail said Morgan Stanley’s Dinakar. “I think some
at a number of banks this year. RISKûEVENTûFORûTHEûSAMEûlNANCINGûAMOUNTûONûAû of the volatility we have seen this year has
h)TûISûDIFlCULTûTOûGETûANYûVISIBILITYûONûOVERALLû collar would be lower,” said Aaron Oh, head of come as a bit of a shock to investors. A lot of
numbers, but anecdotally, the number of THEû!SIA 0ACIlCûSTRUCTUREDûSOLUTIONSûGROUPûATû wealth has evaporated and it’s across all asset
DEALSûISûUPûSIGNIlCANTLYûTHISûYEARûANDûTHISûHASû Credit Suisse. CLASSESûSOûHAVINGûAûDIVERSIlEDûPORTFOLIOû
more than made up for the reduction in They are also lucrative for banks, which hasn’t helped much. I expect current
margin lending,” said Saurabh Dinakar, head make money on trades by pricing the two attitudes towards risk to remain.”
OFû!SIA 0ACIlCûlXED INCOMEûCAPITALûMARKETSû options at different volatility levels. One Thomas Blott

Indonesia woos tech companies “The MVR facility has been put in place to
keep all the technology company founders
and investors happy. In return, Indonesia is
Indonesia has allowed companies with assets of at least Rp2trn (US$139m) and must hoping they will list locally and improve the
multiple voting rights to list domestically, as have been operational for a minimum of visibility of the domestic market,” said the
it targets more IPOs from the country’s three years. It must also never have made a *AKARTA BASEDû%#-ûBANKER
burgeoning technology sector. public offering of shares. Among the companies likely to use the
&OUNDERSûOFûE COMMERCEûlNTECHûANDû MVR shares can total only 47.3% of a MVR facility to list locally are GOTO, which
other tech companies often use the MVR company’s capital. was created after the merger in May of ride-
structure to retain control after they bring “The issuance of this regulation is an HAILINGûCOMPANYû'OJEKûANDûE COMMERCEû
in new investors. EFFORTûTOûENCOURAGEûlNANCIALûMARKETû lRMû4OKOPEDIAû)NDONESIASûTWOûBIGGESTû
“Global investors know that without the deepening, especially in the capital market unicorns.
founders’ vision, these companies can’t sector, by accommodating companies that GoTo is planning an Indonesian IPO of up
grow. Hence there has been intense create new innovations,” the Financial TOû53BNûINûTHEûlRSTûHALFûOFûNEXTûYEARûAHEADû
lobbying to get the MVR facility off the Services Authority said. of its plan for a larger US listing.
GROUNDvûAû*AKARTA BASEDû%#-ûBANKERûSAIDû Indonesia is not alone in wooing technology /NLINEûTRAVELûlRMûTRAVELOKA is also
Under the new regulations, which went companies through special rights; Hong Kong, PLANNINGûAû53MnMûDOMESTICûmOATû
into effect on December 1, a company India and Singapore also have a framework for next year before going to the US market.
planning to issue MVRs should have total issuing dual-class shares. S Anuradha

International Financing Review December 11 2021 17

“Where we can do a lot more is on the advisory and equity capital
MARKETSûAREAûSOûWEûAREûINVESTINGûSIGNIlCANTLYûINûTHATûBUSINESSv
UNICREDIT CEO ANDREA ORCEL, P11

Green bond boom has further to go “Green bonds will require EM issuers to
disclose how the capital raised will be
Green bond new issues should rise a further ONEûINûlVEûOFûTHEûWORLDSûCOMPANIESûHAVINGû deployed and ring-fence the capital to ensure
60% in 2022 even after doubling this year, committed to achieving carbon neutrality, the transparency. We think this transparency
according to BNP Paribas. The French bank bank sees household and corporate demand for will help reduce risk for investors.”
expects corporate and emerging markets renewable energy ramping up. BNPP expects the EU to issue US$35bn–
issuers to drive global volume of nearly In turn, this will create the need to develop $40bn in NGEU green bonds next year. This
53BNûNEXTûYEARûWHILEûTHEûlRSTûFULLûYEARû ANDûlNANCE ûMOREûRENEWABLEûCAPACITYûITû will maintain government-related credits as
of the European Union’s unprecedented JUDGESûnûPARTICULARLYûASûBOTHûONSHOREûWINDû the green bond market’s largest sector with
€250bn NextGenerationEU green bond and solar have gained competitiveness in key some US$180bn of new supply.
programme should also contribute. markets such as China, the EU and the US as Without the EU’s borrowing to fund loans
".00ûIDENTIlESûCAPITALûEXPENDITURESûONû coal and natural gas prices have risen. ANDûGRANTSûTOûGREENûPROJECTSûUNDERûITSû
renewable energy as the most important BNPP is also bullish on the potential for member states’ “Recovery and Resilience
factor behind the further growth. “We 2%ûCOSTSûTOûFALLûINû*APANûTHOUGHûTHEYûREMAINû Plans”, however, the government-related
EXPECTûAûSIGNIlCANTûPICK UPûINûISSUANCEûBYû expensive there relative to coal and nuclear. AREAûWOULDûHAVEûSLIPPEDûBEHINDûlNANCIALSû
corporates looking to build more green (forecast to reach US$160bn) and been
electricity, develop batteries, increase EM MOMENTUM barely ahead of or even in line with
ENERGYûEFlCIENCYûANDûGENERALLYû@GREENûTHEIRû BNPP sees a strong outlook for EM green bond corporates (US$140bn).
supply chains,” it said in analysis by Trevor issuance. In the absence of committed EM Corporates, though, are also the near-
Allen, sustainability research analyst, and transition funding and with investors still exclusive issuers in a second ESG debt product
3UMATIû3EMAVOINE *AINû'ûRATESûSTRATEGIST hunting for yield, the product should help where the bank forecasts strong growth:
It said capex represents 75%–80% of attract funding to EM countries and corporates. sustainability-linked bonds. BNPP anticipates a
development costs for onshore wind and The product’s use of proceeds doubling of SLB new issues to US$200bn in
solar. commitments should reassure buyers. These 2022, up from around US$100bn this year and
Net zero commitments are the key drivers of could include new accounts that do not a very modest total in 2020.
this expansion. With 120 countries and about typically invest in EM credit, BNPP said. Julian Lewis

Jefferies Covid outbreak unsettles Wall St

A spate of Covid-19 cases at JEFFERIES FINANCIAL Two sources familiar with the matter also BOOSTERS
GROUPûWASûNOTûCAUSEDûBYûAûSPECIlCûINCIDENTûTHEû said on Thursday that the recent outbreak Most banks are strongly recommending staff
Wall Street investment bank said on Thursday, was not believed to be the result of a get booster shots, sources said.
and its decision to reinstate home working was “superspreader” event. *EFFERIESûWILLûREQUIREûEVERYONEûWHOûWANTSû
erring on the side of caution, Reuters reported. 3OMEû*EFFERIESûSTAFFûWEREûSURPRISEDûBYû TOûENTERûANYûOFûITSûOFlCESûTOûHAVEûTHEIRû
*EFFERIESûONû7EDNESDAYûSENTûSTAFFûHOMEû Wednesday’s news and had been unaware BOOSTERûADMINISTEREDûBYû*ANUARYûûUNLESSû
and cancelled client parties and virtually all of any fresh wave of cases, they told they are not yet eligible to do so, Handler
but essential travel after nearly 40 new Reuters. wrote in a staff memo on Wednesday.
#OVID ûCASESûWEREûREPORTEDûATûTHEûlRMû Handler said in a memo to staff on Deutsche Bank has made Covid-19 boosters
prompting speculation about the cause of Wednesday that more than 95% of all available to staff at its new headquarters in
the spike and whether other banks will employees were vaccinated, and 100% of Columbus Circle since early November,
follow suit. THOSEûWHOûENTERûITSûOFlCESûWEREûVACCINATEDû according to a source familiar with the matter.
4HEû*EFFERIESûSPOKESMANûSAIDûTHEûNUMBERû *EFFERIESûHADûCALLEDûITSûSTAFFûBACKûTOûITSûOFlCESû Wells Fargo said on Wednesday it was
of cases was small – the Manhattan- in October. providing all employees with four hours of
headquartered bank has 4,500 employees The company did not specify the location PAIDûLEAVEûTOûGETûTHEûBOOSTERûSHOTû*0û-ORGANû
WORLDWIDEûWITHûOFlCESûINû!SIAûANDû%UROPEûASû of the 40 infected employees, nor whether and Bank of America also provide employees
well as the United States – but it was getting the return to working from home had been with paid time off to receive vaccines and
out in front of the issue. He said the bank IMPOSEDûATûALLûOFlCES booster shots.
does not do routine staff Covid-19 testing. 3EVERALû7ALLû3TREETûlRMSûAREûINCREASINGû "ANKSûANDûOTHERûlNANCIALûlRMSûAREû
“Throughout the pandemic, we have worked efforts to ensure staff get coronavirus reluctant to reverse efforts since the summer
to put the health and safety of our employees booster shots, as countries and industries to move staff who had been working from
lRSTvû*EFFERIESûCHIEFûEXECUTIVEû2ICHARDû(ANDLERû grapple with how to respond to the spread HOMEûBACKûINTOûTHEûOFlCEû(OWEVERûTHEYûAREû
said in a statement to Reuters on Thursday. of the Omicron variant. conscious that workers are increasingly
“Given the time of year and the increase in Daily Covid-19 cases in New York City concerned about the Omicron variant.
#OVIDûCASESûHAPPENINGûEVERYWHEREûITûJUSTû have surged in recent days and "ANKSûANDûOTHERûlNANCIALûlRMSûAREû
made sense to encourage people to work from hospitalisations in the city are at their mostly allowing smaller teams to hold
home, be with their families, and avoid any highest level since April, according to holiday parties to help maintain morale, but
unnecessary travel or large social events.” data from the US Centers for Disease AVOIDINGûLARGE SCALEûlRM WIDEûGATHERINGSû
The bank has felt the pandemic’s impact Control and Prevention. While the Delta 3EVERALûlRMSûAREûREQUIRINGû#OVIDûTESTSû
ACUTELYûASûITSûCHIEFûlNANCIALûOFlCERû0EGû variant is still dominant in the US, Omicron before parties, the sources said.
Broadbent died due to coronavirus has been detected in many states including Matthew Scuffham, Jessica Dinapoli,
complications in March 2020. New York. Noor Zainab Hussain

18 International Financing Review December 11 2021

 BONDS
SSAR 21 Corporates 23 FIG 27 Covered Bonds 30 High-Yield 31 Structured Finance 33

„ FRONT STORY FINANCIALS

Risks and opportunities in AT1s

Additional Tier 1 market takes stock of record-breaking year
Deals may endure secondary suffering but investors upbeat
As 2021 nears its close, many issuers will “From that perspective, it does justify FREQUENTûBOUTSûOFûVOLATILITYûAREûEXPECTEDûTOû
look back with satisfaction on a year of LOWERûRESETûSPREADSû"UTûBYûDElNITIONûIFû be a feature of the coming year.
record-breaking Additional Tier 1 supply. you come into a bout of higher volatility “One of the issues we’ve seen with
But for investors, this year’s vintage poses with risk assets moving lower, those will [AT1s with] low back ends in previous
DIFlCULTûQUESTIONSû behave with a higher beta because of that cycles, in 2018 or during Covid, they tend
Issuers from across Europe set new lows extension risk,” Stacey said. “We’re very TOûGETûDESTROYEDûlRSTûANDûONLYû
for AT1 coupons as they made the most of comfortable with the issuers we own and outperform at the end of the recovery,”
hot market conditions, printing some the bonds we own … with the resets we said Romain Miginiac, head of research at
€11.1bn in the single currency, while reset have and with owning those bonds into Atlanticomnium.
spreads were also at historically low levels. perpetuity.” h)TûISûDIFlCULTûESPECIALLYûFORûLONG TERMû
But when the tone turned sour, those deals “So there is an opportunity for a number investors like us, to get performance from
were hard hit in the secondary market, with of these bonds given the sell-off, because I those, as you need to time the market very
investors perceiving a higher risk that think over time spreads will continue to well, buying when they are getting
issuers will keep them outstanding as cheap compress, particularly versus lower Tier 2s. absolutely destroyed or buying at the end of
perpetual capital rather than calling and That differential between AT1 and lower the recovery when they outperform, seeing
replacing them. Tier 2 shouldn’t be anywhere close to 290bp it as a beta trading instrument rather than a
“Some of the recent vintage of AT1s are [at current levels] if you think about the long-term investment.”
MOREûVULNERABLEûTOûNOTûBEINGûCALLEDûINûlVEû inherent risks to each tranche.” AT1s priced at even lower spreads in early
to 10 years’ time, so we’re being cautious,” Bankers emphasised that non-call 2018 illustrate just how long the recovery
said Peter Stage, senior managing director, decisions remain rare and said issuers prefer CANûTAKEû"ELlUSûFORûEXAMPLEûLANDEDûAû
Europe at EJF Capital. TOûCALLûANDûRElNANCEûASûLONGûASûANYû €500m 3.625% PNC2025 AT1 with a 293.8bp
A €750m perpetual non-call November additional cost is manageable – sticking to reset in January 2018. The bond has
û,Aû"ANQUEû0OSTALEû!4ûISSUEûWASû long-held convention. languished below par for most of its life,
priced in September at 3% – an all-time “I think the majority of issuers would look only trading above par for a brief spell
low in the euro market – and with a reset to call if it is within 50bp or so, but if it’s between late July and September this year.
SPREADûOFûBPûEXEMPLIlESûTHEûSTRUGGLESû triple digits you’ve got to consider the More broadly, participants are upbeat on
of some of the class of 2021 in the economics ... and regulators have to have the prospects for the AT1 market and
secondary market. At the peak of last their say,” said a DCM banker. investors cite multiple reasons to keep
MONTHSûVOLATILITYûTHEûDEALûWASûQUOTEDûATû buying the asset class in 2022.
a yield of 4.52% and a cash price of 90.80, DISCERNING AND SOPHISTICATED Stacey said that in a year of expected
according to Tradeweb. But in spite of the recent repricing, there are higher volatility and rising rates, BlueBay
still reasons for caution around 2021’s low- will be cautious on taking a lot of credit risk,
OPPORTUNITY BECKONS? reset bonds, in particular given more DURATIONûRISKûORûLIQUIDITYûRISK
Some investors saw buying opportunities in In that context, the European AT1 space
the widening, and prices have come back in. 3.625% BELFIUS AT1 FALLS BACK BELOW PAR still presents a big opportunity, he said,
,Aû"ANQUEû0OSTALESûDEALûFORûEXAMPLEûWASû providing investors stick to national
Bid price
bid at 4.08% a cash price of 93.30 on 110
champions and systemically important
Thursday. banks, whose capital positions have only
The yield of the Bank of America CoCo 100 grown stronger during the pandemic era –
index hit a 2021 high of 4.21% on November with CET1 ratios at all-time highs.
26 but has fallen back to 3.77%, still some 90 AT1s also offer relatively low duration risk
way off the record low of 3.24% reached in due to their call structures and, with a deep
80
early August. and diverse buyer base, the product’s
Marc Stacey, senior portfolio manager at 70 LIQUIDITYûHASûBEENûPROVENûINûTIMESûOFûSTRESSû
BlueBay Asset Management, said that while Stacey said.
the new generation of low-coupon, low- 60 Investors and bankers also expect tight
reset AT1s comes with a higher extension valuations to be supported by negative net
50
RISKûTHOSEûLOWERûLEVELSûAREûJUSTIlEDûTOûAû AT1 supply next year, particularly after
30/01/18

31/01/19

31/01/21
30/04/18
31/07/18
31/10/18

30/04/19
31/07/19
31/10/19
31/01/20

31/07/20

30/07/21
30/04/21
30/10/20

31/10/21
30/04/20

large degree by banks’ huge buffers over SOMEûISSUERSûRElNANCEDûûCALLSûALREADYû

Maximum Distributable Amount and this year.
coupon restrictions and triggers. Source: Refinitiv Eikon Tom Revell

International Financing Review December 11 2021 19

PE cash stash to trigger wave of WEEK IN NUMBERS
‘super-jumbo’ buyouts 1.537% „ THE YIELD ON 10-YEAR TREASURIES AS
OF DECEMBER 8, 11bp HIGHER THAN THE
Private equity set to turn to debt market to fund bids  DAY BEFORE’S LOW AS INVESTORS WEIGH
VACCINE BOOSTERS VERSUS THE SPREAD
%UROPESûLEVERAGEDûlNANCEûHEADSûSAYûTHEYû banks cutting back on asset purchases. OF THE OMICRON VARIANT
%
expect the market to be supportive for the And while bankers say that they expect
1.8
return of “super-jumbo” leveraged buyouts the market to continue to be supportive,
1.7
next year, which are expected to pick up PRIVATEûEQUITYûSPONSORSûMAYûFACEûSOMEû
1.6
despite potential challenges around new constraints on the size of the debt
1.5
Covid-19 variants and central bank rate packages for the deals they are targeting.
1.4
hikes.
1.3
"ANKERSûSAYû53ûPRIVATEûEQUITYûGROUPû++2Sû NOT JUST DEBT
1.2
õBNûlNANCINGûPACKAGEûBACKINGûITSû “The constraints on [the mega-buyouts]

1/9/21
8/9/21
15/9/21
22/9/21
29/9/21
6/10/21

20/10/21

1/12/21
8/12/21
13/10/21

27/10/21
3/11/21
10/11/21
17/11/21
24/11/21
proposed buyout bid for TELECOM ITALIA could REALLYûWILLûBEûTHEûAMOUNTûOFûEQUITYûTHATûWILLû
trigger a wave of similar blockbuster deals in need to come into them,” said Henrik
ûASûPRIVATEûEQUITYûBUYERSûLOOKûTOûDEPLOYû Johnsson, co-head of investment banking at
their vast piles of capital and corporates
strive for growth.
“There will be more super-jumbo
Deutsche Bank. “There is simply no more
leverage available given the regulation that
is out there – but also in terms of what the
–1.06%
„ THE YIELD ON 10-YEAR TREASURY
buyouts,” said Daniel Rudnicki market can absorb. I don’t think you could INFLATION-PROTECTED SECURITIES
3CHLUMBERGERûCO HEADûOFûLEVERAGEDûlNANCEû see a €40bn debt issuance being absorbed by ON THURSDAY, INDICATING THAT
FORû%-%!ûATû*0û-ORGANûh0RIVATEûEQUITYûFUNDSû the [euro] market today – it would be too THE 10-YEAR BREAKEVEN RATE WAS
HAVEûUNMATCHEDûlREPOWERûANDûTHEûDEBTû large.” ROUGHLY 2.55%
MARKETûCANûSUPPORTûõBN PLUSûlNANCINGû To that end, a lot of these mega-deals are %
0
packages across the euro and dollar markets, expected to be backed by cross-border –0.2
as well as the bond and loan markets.” lNANCINGûPACKAGESûSAIDûBANKERSû –0.4
Rudnicki Schlumberger, who co-heads the “In addition to the recent rapid growth in –0.6
53ûBANKSûLEVERAGEDûlNANCEûBUSINESSûWITHû THEûSIZEûOFûTHEû%UROPEANûLEVERAGEDûlNANCEû –0.8
–1.0
Ben Thompson, says the bank’s pipeline is as market, one of the reasons that we are able
–1.2
active as it has ever been, with the desk to see these larger deals for European –1.4
1/9/21
8/9/21
15/9/21
22/9/21
29/9/21
6/10/21

20/10/21

1/12/21
8/12/21
13/10/21

27/10/21
3/11/21
10/11/21
17/11/21
24/11/21
looking at very large situations for the companies is that the US investor base is
beginning of next year. always looking for new opportunities in the
“This is the time of the cycle when you global debt market,” said Thompson. “The
can do €10bn to €20bn to even €40bn
buyouts, as long as current conditions last,”
said Rudnicki Schlumberger.
US dollar market unlocks huge amounts of
capital for deals – and we’ve already seen
THATûMARKETûmEXINGûITSûMUSCLESûONûTHEû
US$57bn
„ THE AMOUNT OF US HIGH-GRADE
The driver of the potential buyout Medline deal.” CORPORATE BOND ISSUANCE THIS MONTH
bonanza is the sheer amount of cash held by US investors snapped up almost AS OF DECEMBER 7, SETTING A NEW
PRIVATEûEQUITYûFUNDSûnûTHEûUPSHOTûOFûOVERûAû US$15bn of high-yield bonds and loans in RECORD FOR SUPPLY FOR THE MONTH.
DECADESûWORTHûOFûQUANTITATIVEûEASINGû September to back medical product IT SURPASSED THE US$56bn OF SUPPLY
Global buyout funds were sitting on a record company Medline’s US$34bn leveraged IN DECEMBER 2014
US$2.74trn in assets under management as buyout by Blackstone, The Carlyle Group
OFû1ûûACCORDINGûTOû0REQUINûDATAûWHICHû and Hellman & Friedman. The deal was
has already led to record M&A volumes this
year.
h!LLûLARGEûPRIVATEûEQUITYûFUNDSûAREûTRYINGû
the biggest leveraged buyout in the US
SINCEûTHEûûlNANCIALûCRISIS
Still, while bankers say they still have
US$32bn
„ THE AMOUNT OF ORDERS
to deploy cash and are looking for situations appetite for taking on underwriting risk, PHARMACEUTICAL MERCK GOT FOR AN
where they can put money to work,” said desks are cognisant that there are a lot of US$8bn FIVE-PART DEAL ON TUESDAY
Rudnicki Schlumberger. “There are only two potential factors to trigger volatility. With AS IT RAISED FUNDS TO SUPPORT ITS
kinds of transaction for that: super-large that in mind, they say they will be ACQUISITION OF ACCELERON
corporate disposals or take-privates.” approaching deals with longer lead times
Just like this year, bankers are expecting with some caution.
most buyout activity to take place in
technology and healthcare, two of the most
resilient sectors of the economy during the
“We will be more thoughtful around how
long potential commitments might be on
our books, and how we structure those
€590m
„ THE AMOUNT OF CORPORATE BONDS
pandemic. commitments – the longer you’re exposed to THE ECB BOUGHT (NET) IN THE WEEK
However, capital markets execution is the market, the higher the chance that TO DECEMBER 3 AS PART OF ITS CSPP
not expected to be as simple as it has been another variant will emerge or that a COMPARED WITH THE €185m IT SOLD THE
over the past year, with 2022 likely to different macro factor will introduce market WEEK EARLIER
present challenges in the form of volatility,” said Thompson. In total, it has bought €309.208bn since
INmATIONûPOTENTIALûLOCKDOWNSûANDûCENTRALû Eleanor Duncan the programme began in 2016

20 International Financing Review December 11 2021

 BONDS SSAR

“This is the second step in the process. For these PSI bonds and exchanged them into
THEûlRSTûLIABILITYûEXERCISEûTHEYûBOUGHTûBACKû BIGGERûLINESû3UBSEQUENTLYûTHEYûHAVEû
SSAR a large chunk of this PSI stuff, which had concentrated on single lines and looked to
been created by the exchange of the old bring them up to €5bn–€6bn sizes.”
Greek bonds for new ones for the private The previous exchange also occurred
EUROS sector,” said the lead. towards year-end, in late November 2017,
“Since the previous liability exercise, but the timing of the latest offer is not based
GREECE SET TO END IMPRESSIVE YEAR there has been just over €4bn outstanding of on seasonality, according to the lead.
WITH LME these PSI bonds. In most cases, they are “Supply from elsewhere or how the
relatively small leftovers, like market looks otherwise is not really a big
GREECE has announced the terms of a debt €150m–€250m per maturity year, and consideration. It is more a consideration of
exchange as the sovereign seeks to round off THEREFOREûEXTREMELYûILLIQUIDv whether you want to get out of that sort of
an impressive year in capital markets with a BNP Paribas, Deutsche Bank, Goldman Sachs, STUFFûTHATûISûEXTREMELYûILLIQUIDûORûWHETHERû
deal that will tie up some of the few HSBC, JP Morgan and Piraeus Bank are joint you don’t want to,” he said.
remaining loose ends from its turbulent dealer-managers. “Generally, it is positive doing it late in
period during the eurozone debt crisis. The bonds have maturities in every single the year, as people don’t have much else to
“It is a great opportunity for investors that year from 2023 to 2042 and can be do. At the same time, if they had done it one
HAVEûBEENûHOLDINGûEXTREMELYûILLIQUIDûSECURITIESû exchanged for existing euro-denominated or two months ago, it would probably have
TOûGETûOUTûANDûEXCHANGEûINTOûLIQUIDûON THE RUNû benchmarks – a 2% April 2027 note issue, a offered the same dynamics to the investors.”
bonds,” said a lead on the exchange. 3.9% January 2033 note issue, a 4% January The invitation was extended on December
Greece has recorded several notable 2037 note deal and a 4.2% January 2042 note 6 and had a 5pm CET December 10 deadline.
highlights in 2021, raising some €14bn offering. A cash consideration is also
across six successful syndications, landing a available for the outstanding 2023, 2024 and BANKERS LAUD ESM MOVE TO MORE
lVE YEARûWITHûAûûCOUPONûPRICINGûAûû 2025 PSI paper, as well as for US FLEXIBLE APPROACH
10-year tap through Italy and bringing its bondholders of the 2042s.
longest deal tenor in 15 years – a wildly The decision made by the EUROPEAN STABILITY
popular 1.875% 2052 note offering. There is NORMALISING THE CURVE MECHANISM and the EUROPEAN FINANCIAL STABILITY
little doubt the sovereign has now “It is in order to give investors the chance to FACILITY to ditch issuance windows and take a
completed its rehabilitation story with get out of these bonds, which have hardly MOREûmEXIBLEûAPPROACHûTOûISSUANCEûWASû
international investors and the latest move any trading in them. Talking to our traders, lauded by bankers last week.
is merely the icing on the cake. THEYûHAVEûBEENûEXTREMELYûILLIQUIDûINûSOMEû A calendar of potential issuance weeks
The exchange and tender offer relates to cases trading with 50bp bid/offer spreads. FORûTHEûSUCCESSIVEûQUARTERûHASûBEENû
THEûREMAININGûILLIQUIDû03)ûBONDSûTHEû So, for someone wanting to get out of this, it published since 2012 in an effort to
majority of which were retired just over is a really good opportunity,” said the lead. provide a greater degree of transparency –
four years ago via a liability management “This follows on from the attempt in 2017 something that was particularly
exercise when €25.47bn, or 86.1%, of those to normalise the curve. They wanted to have important in the euro SSA space following
outstanding were swapped for new larger bonds in terms of size and less bonds the European sovereign debt crisis a
benchmark notes. in terms of number, so they bought back decade ago.

ALL INTERNATIONAL GREEN BONDS ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 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 150 26,411.23 7.2 1 JP Morgan 1,758 415,816.01 8.5 1 BNP Paribas 520 117,352.42 8.2
2 BNP Paribas 126 25,471.41 6.9 2 Bank of America 1,361 332,315.51 6.8 2 JP Morgan 402 92,081.56 6.4
3 Credit Agricole 105 22,537.24 6.1 3 Citigroup 1,340 327,124.86 6.7 3 Deutsche Bank 359 85,066.95 5.9
4 Citigroup 117 21,547.43 5.9 4 Goldman Sachs 1,055 269,999.93 5.5 4 Barclays 311 77,584.82 5.4
5 Deutsche Bank 102 19,726.72 5.4 5 Barclays 1,116 250,919.75 5.1 5 Credit Agricole 344 73,855.88 5.1
6 HSBC 116 19,048.51 5.2 6 Deutsche Bank 994 235,264.31 4.8 6 Societe Generale 284 69,938.78 4.9
7 Bank of America 103 18,154.84 4.9 7 BNP Paribas 1,024 230,132.11 4.7 7 HSBC 339 69,180.23 4.8
8 Barclays 78 13,798.68 3.8 8 Morgan Stanley 869 229,657.57 4.7 8 Bank of America 257 67,526.80 4.7
9 NatWest Markets 47 10,557.29 2.9 9 HSBC 1,045 217,613.62 4.5 9 Goldman Sachs 270 64,360.15 4.5
10 Goldman Sachs 65 10,489.80 2.9 10 Credit Suisse 760 136,770.58 2.8 10 UniCredit 303 63,963.50 4.5
Total 548 367,370.57 Total 6,687 4,878,027.86 Total 1,786 1,434,545.80
Excludes social bonds and mixed use of proceeds. Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt,
US Global ABS/MBS. US Global ABS/MBS.
Source: Refinitiv SDC code: JG1 Source: Refinitiv SDC code: J1 Source: Refinitiv SDC code: N1

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING DECEMBER 10 2021

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Nov 30 2021 Italy €2bn 0 Aug 1 2026 0.19 1.52
Dec 7 2021 Netherlands €2.1bn 2 Jul 15 2024 -0.688 –
Dec 7 2021 UK £1.5bn 1.25 Jul 31 2051 0.871 2.42
Dec 7 2021 Germany €3.277bn 0 Dec 15 2023 -0.71 1.4
Dec 8 2021 Germany €2.497bn 0 Aug 15 2031 -0.38 1.3
Source: IFR

International Financing Review December 11 2021 21

 However, as of next year, ESM/EFSF will responsibilities and tasks. With this in mind, “They are not a really big issuer any more,
no longer communicate execution windows we will stop publishing potential windows demonstrated by fact that it is possible for
for potential issuance in advance, a move for bond issuance,” continued Weiss, who them to come intraday. As a huge issuer that
that is intended to provide the duo with a was appointed as head of funding and needs to do size, you can’t come intraday,”
GREATERûDEGREEûOFûmEXIBILITYûINûCOMINGûTOû investor relations in September. said the banker.
market. Annual funding targets for bond issuance
“It is a good move and makes a lot of MAKING WAY FOR NGEU will still be announced and there remains an
sense,” said a banker. “If you continue to The size of its funding operations and the far aim to issue on all parts of the curve.
publish these windows, it is restrictive and more benign market backdrop in recent Auction dates for bill issuance will
REDUCESûTHEûmEXIBILITYûTOûSELECTûMOREû years has reduced the need for the continue to be announced. These will now
favourable windows. At the end of the day, it additional communication, and scrapping be for the next six months instead of per
is taxpayer money too, so you should be issuance windows will leave the calendar QUARTER
looking at savings where possible.” completely clear for the much larger NGEU, The Luxembourg-based institution
Since 2018, when its last programme which adopted the strategy recently. celebrated its 10-year anniversary earlier
concluded, ESM and EFSF funding activity “The European Union have taken their this year, with the landmark coinciding with
has been reduced to the rollover of existing place, really, but it makes sense as the EU a big change in its remit. Subject to the
debt. They now plan to issue around €20bn– programme is so big they should take COMPLETIONûOFûTHEûRATIlCATIONûPROCESSûITûWILLû
€25bn in combined rollover debt each year priority. If the EU announce issuance take on new responsibilities linked to bank
for the foreseeable future. WINDOWSûTOûTHEûMARKETûITûISûBENElCIALû resolution and economic monitoring. The
“As we approach the new year, the ESM is because other issuers can avoid them,” said transformation will leave it looking more
evolving and our funding operations will a banker. like a European version of the International
REQUIREûNEWûDIMENSIONSûOFûmEXIBILITYû!ûNEWû “Announcing windows can often work Monetary Fund, with a vastly expanded
mandate established by the ESM reform will against you if you are not that big an issuer. You mandate.
lead to a broader mission for the institution LOSEûmEXIBILITYûANDûCANûBEûFORCEDûTOûCOMEûWHENû h/NCEûTHEûRATIlCATIONûPROCESSûOFûTHEû
THATûREQUIRESûNEWûWAYSûOFûTHINKINGvûSAIDû the market is not as conducive, which means amended ESM Treaty has been completed,
Silke Weiss in an ESM/EFSF investor you end up paying a higher concession.” the ESM will become the backstop to the
newsletter. In 2021, the six transactions from the Single Resolution Fund, making it the last
“Going forward, adaptability will be EFSF and the three from ESM came intraday resort safety net. The support provided will
crucial in the execution of our new on a Monday. be aligned to the size of the SRF, up to a

ALL US DOLLAR FIXED-RATE GLOBALS ALL INTERNATIONAL US$ BONDS ALL SOVEREIGN BONDS IN EUROS
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 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 288 85,843.80 10.8 1 JP Morgan 1,209 284,072.20 10.3 1 JP Morgan 45 27,420.00 10.8
2 Bank of America 283 80,420.48 10.1 2 Citigroup 1,011 238,400.53 8.7 2 BNP Paribas 42 22,266.95 8.8
3 Citigroup 235 78,839.28 9.9 3 Bank of America 1,034 233,818.53 8.5 3 Citigroup 30 18,318.30 7.2
4 Morgan Stanley 155 54,989.06 6.9 4 Goldman Sachs 758 183,492.57 6.7 4 Barclays 25 16,922.58 6.7
5 Goldman Sachs 153 50,715.97 6.4 5 Morgan Stanley 615 156,274.51 5.7 5 Deutsche Bank 25 16,469.33 6.5
6 Barclays 131 39,639.77 5.0 6 Barclays 669 133,268.44 4.8 6 Credit Agricole 24 15,448.36 6.1
7 Wells Fargo 186 38,470.23 4.8 7 Deutsche Bank 558 117,174.74 4.3 7 UniCredit 18 14,854.69 5.9
8 Deutsche Bank 93 37,745.65 4.8 8 Wells Fargo 614 113,175.26 4.1 8 Bank of America 21 13,588.02 5.4
9 TD Securities 86 29,626.81 3.7 9 HSBC 513 101,891.30 3.7 9 Societe Generale 17 12,909.53 5.1
10 HSBC 68 27,223.49 3.4 10 Credit Suisse 551 101,187.92 3.7 10 HSBC 18 12,259.54 4.8
Total 523 793,909.38 Total 3,431 2,748,932.13 Total 95 253,313.47
Excluding equity-related debt, ABS/MBS. Including Euro, foreign and global issues. Excluding equity-related debt, Excluding ABS/MBS.
US Global ABS/MBS.
Source: Refinitiv SDC code: O5 Source: Refinitiv SDC code: O1 Source: Refinitiv SDC code: N4

ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%)

1 BNP Paribas 41 15,017.50 10.6 1 Deutsche Bank 14 14,739.01 7.9 1 JP Morgan 23 5,023.99 14.1
2 Credit Agricole 37 11,478.74 8.1 2 Morgan Stanley 8 13,565.49 7.3 2 HSBC 25 4,407.55 12.3
3 JP Morgan 35 9,875.55 7.0 3 BNP Paribas 9 12,864.23 6.9 3 Deutsche Bank 20 3,319.83 9.3
4 Barclays 28 9,274.79 6.5 4 Goldman Sachs 12 12,247.01 6.6 4 UniCredit 13 2,827.41 7.9
5 HSBC 29 8,408.66 5.9 5 Bank of America 12 11,574.83 6.2 5 LBBW 15 2,779.83 7.8
6 Commerzbank 21 8,099.83 5.7 6 Barclays 12 11,360.24 6.1 6 Nord/LB 12 2,143.57 6.0
7 Deutsche Bank 23 7,983.60 5.6 7 Credit Agricole 15 10,657.60 5.7 7 Natixis 8 1,506.60 4.2
8 Goldman Sachs 22 7,928.18 5.6 8 DZ Bank 9 10,581.93 5.7 8 Credit Agricole 8 1,043.87 2.9
9 Bank of America 16 7,885.17 5.6 9 HSBC 16 10,345.68 5.5 9 DGZ-DekaBank 7 950.62 2.7
10 Natixis 18 7,822.25 5.5 10 UniCredit 9 9,414.89 5.0 10 TD Securities 4 941.90 2.6
Total 210 141,612.03 Total 70 186,958.65 Total 73 35,749.90

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

22 International Financing Review December 11 2021

 BONDS CORPORATES

nominal cap of €68bn,” Weiss said in the )NmATIONûHASûBECOMEûANûINCREASINGLYû July 2020. The programme began with an
newsletter. pressing theme in the second half of 2021. initial transfer of €20bn in the second half of
Widely viewed metrics on price pressures 2020.
SOVEREIGNS UNVEIL 2022 FUNDING continued to come in well above central The amortisation objective voted for by
PLANS BANKûTARGETSûDESPITEûINmATIONûBEINGûLABELLEDû parliament as part of the Social Security
by many as transitory. Financing Act for 2022 has been set at
A trio of sovereigns has announced their “We have consistently challenged the €18.3bn for 2022, representing the largest
funding plans for 2022, with BELGIUM and transitory narrative from other economists amount since its inception, with €17.4bn in
IRELAND planning smaller issuance volumes and central banks,” said Luigi Speranza, 2021 and €16.7bn in 2020.
than some expected, while the €260bn OAT chief global economist at BNP Paribas. By year-end the agency will have
target for FRANCE is unchanged from this h/URûVIEWûISûTHATûHEADLINEûINmATIONûWILLû AMORTISEDûANDûRElNANCEDûõBNûOFûTHEû
year and last. slow next year but underlying price €320.5bn of social debt assumed since its
Ireland’s plans come as the biggest PRESSURESûWILLûCONTINUEûTOûBUILDû)NmATIONûISû inception.
surprise of the three, with the National partially supply driven but it is also due to The average maturity of its outstanding
Treasury Management Agency looking to STRONGûDEMANDû)TûHASûLASTEDûSUFlCIENTLYû debt has risen to 3.87 years, compared with
issue €10bn–€14bn next year, after raising long and been a sizeable enough shock to 2.95 years in 2019, while the average
€18.5bn in 2021. trigger second-round effects, which means lNANCINGûRATEûHADûFALLENûTOûûBYû
“Ireland’s plans are lower than market there will be a more lasting effect.” November 30 2021, compared with 1.44% as
expectations; they were seen announcing The longest new conventional OAT at December 31 2020 and 1.99% as at
something closer to €20bn,” said a banker. planned for 2022 will be in the 20-year to 30- December 31 2019.
“The news has helped Irish bonds to year range.
perform and they have rallied today.”
Yields dropped across the curve for Irish CADES TARGETS SIMILAR FUNDING
bonds on Thursday, with the biggest drop LEVEL FOR 2022
seen in the 10-year, which by mid- CORPORATES
AFTERNOONûHADûFALLENûBYûBPûTOûBEûQUOTEDû CADES has announced a funding target of
at 0.079%. €40bn in medium and long-term bonds in
The NTMA will issue a statement at the 2022, of which €35bn will be in social US DOLLARS
BEGINNINGûOFûEACHûCALENDARûQUARTERû format in euros, US dollars or sterling. The
outlining the bond auction plans for that amount is in line with earlier guidance and JUMBO M&A BONDS PUSH SUPPLY TO
period. It also intends to issue at least one follows €39.4bn of issuance this year. RECORD
syndicated bond during the year. It will be supplemented by the issuance of
“The reduced borrowing range for 2022 DIVERSIlCATIONûBONDSûFORûANûAMOUNTûUPûTOû 4WOûLARGEûACQUISITIONûlNANCINGSûFROMûMERCK
REmECTSû)RELANDSûIMPROVINGûlSCALûPOSITIONû €7bn, in the form of taps of existing bonds, and ECOLAB led a crowded investment-grade
and our long-standing strategy of pre- &RENCHûINmATION INDEXEDûBONDSûBONDSû primary market last week, helping to set a
funding liabilities,” said Frank O’Connor, denominated in non-strategic currencies or new record for high-grade bond supply in
NTMA director of funding and debt private placements. the month of December.
management, in a statement. The French agency has brought 10 social As of Wednesday, investment-grade
In 2021, the sovereign brought two bond issues in 2021. Half of those were in US corporate bond issuance this month hit
syndications: a €5.5bn long 10-year at the dollars and raised a combined US$19.5bn. US$62.6bn, surpassing the US$56bn of
start of January and a €3.5bn 20-year in Four euro transactions accounted for €18bn, supply recorded in December 2014,
April. while a solitary a £1.5bn 0.125% December according to IFR calculations.
h7ITHûONEûOFûTHEûLONGESTûMATURITYûPROlLESû 2025 social note issue came early in the year. Execution for the M&A-driven jumbo
in Europe and lower redemptions over the 4HEREûWEREûALSOûSEVENûDIVERSIlCATIONûBONDû offerings was strong, suggesting demand
medium term, we have considerable offerings – tap issues, private placements – had recovered since the end of November.
mEXIBILITYûINûMEETINGû)RELANDSûFUTUREû for a total of €3.4bn. Market participants had been wary of
BORROWINGûREQUIREMENTSvû/#ONNORûSAIDû ESG investors in particular largely participating in the primary market after
Though Belgium plans to increase its subscribed to the issues over the course of some bond offerings priced before the
2021 OLO funding target slightly to €41.2bn the year, accounting for up to 45% of Thanksgiving holidays traded poorly on
from €39.3bn this year, the increase is less allocations, according to lead manager the break. Easing concerns around the
than expected, according to a estimates. Omicron variant’s economic impact
Commerzbank research note. “While the health context linked to the helped restore risk appetite, reversing
"ELGIUMûHASûmAGGEDûTHREEûSYNDICATIONSû Covid-19 epidemic continues to weigh some of the widening in credit spreads in
for 2021, including a 10-year and a 30-year. HEAVILYûONûSOCIALûSECURITYûlNANCESû#ADESûISû November.
This year, it brought a €6bn 10-year in paramount in the amortisation of social -ERCKûSOLDûANû53BNûlVE PARTûSENIORû
January and €5bn 50-year in early February. debt in France,” said Jean-Louis Rey, unsecured note on Tuesday to support its
chairman of the Cades board of directors. US$11.5bn purchase of another
LINKER TARGET h)NûûOURûlNANCINGûANDûAMORTISATIONû pharmaceutical company, Acceleron,
There were no real surprises with the size of mechanisms have once again demonstrated drawing US$32bn of orders. New issue
France’s OAT target, but one thing of note their effectiveness by enabling the concessions ranged between 2bp and 3bp
WASûTHEûFOCUSûONûINmATION LINKEDûBONDS assumption of €40bn of additional social for the tranches.
Approximately 10% of total issuance is debt.” &ORûITSûACQUISITIONûOFûRESINûMAKERû0UROLITEû
planned to be in linker format, with a The funding was part of the assumption water treatment specialist Ecolab raised a
potential new green linker in the 10-year to by Cades of €136bn of social debt, which US$2.5bn bond last Monday, backed by an
15-year range. was voted for by the French parliament in order book of US$8.25bn.

International Financing Review December 11 2021 23

 Newmont raises US$1bn with
transition ‘template’
„ CORPORATES Gold miner ties bond coupon to Scope 3 emissions

Colorado-based NEWMONT on Monday priced a Roose, referring to earlier SLBs. “I would say The offering did come with a discount for the
US$1bn offering of 10-year notes the coupon of that at the beginning of the year, if you look at issuer, and while banks often use these savings
which is tied to gender diversity and – a rarity for a the SLBs that have been done globally, there’s as one way to help convince issuers to come to
precious-metal miner – its “entire carbon footprint” been Scope 1 and Scope 2 and now you are the ESG market, they are not usually the prime
including hard-to-measure Scope 3 emissions. just starting to see Scope 3 absolute metrics reason a company is willing to do all the extra
More companies in the so-called transition dovetailing with a net-zero focus – that’s where I paperwork required of sustainable debt.
sectors, such as mining, energy and think the trend is going.” “There was about a 5bp savings, but I
transportation, are seeking to tap the growing That the Newmont bond’s targets were don’t think that is the key driver for why these
market for sustainability-linked bonds. ESG- backed by the Science Based Target initiative companies are doing ESG financings,” said Roose.
focused investors have, at the same time, often (SBTi), which recommends including Scope 3 if Savings aside, for companies such as
balked at the terms offering by companies in it is 40% or more of total emissions, also helped Newmont, an SLB also shows the market a
sectors with poor environmental records, if they attract investors. Newmont’s Scope 3 comprised commitment to environmental and social issues
expressed interest at all. about 60% of total emissions, according to ISS that have become much more important for all
Emissions targets have not been ambitious ESG, which provided the second-party opinion kinds of investors over the past couple of years.
enough; penalties for missing them – like the for the deal. The deal specifically comes with three
standard 25bp step-up – have not been steep Science-based targets, according to market performance targets, all with a 2030 deadline:
enough. As a result, the SLBs from high emitters participants, will probably be requirements Newmont aims reduce Scope 1 and 2
that have priced have often gone into portfolios for other transition issuers in the SLB market, greenhouse gas emissions 32% from a 2018
of their usual investors rather than those of the especially if they want to attract a greater base; reduce absolute Scope 3 emissions, the
growing crop of environmentally focused funds. portion of ESG-focused money. biggest portion of its footprint, 30% from 2019;
“The most important thing is for companies to “The other element is having SBTi targets,” and have 50% representation of women in
articulate decarbonisation related to their entire Roose said. “Newmont is one of the only miners senior leadership.
carbon footprint,” said Scott Roose, global head globally to have this ambition. This adds validity If the first two emissions targets are not met
of ESG financing at Credit Suisse. to the company’s pursuit of decarbonisation and verified, the coupon increases 50bp, and if
The Baa1/BBB rated gold producer’s first SLB emissions targets by 2030 and then net zero by the third is not met and verified, Newmont pays
goes beyond many of the earlier bonds issued by 2050.” another 10bp more.
transition companies in this format. Its inclusion Newmont priced a 2.6% bond to yield “We advised them to have a substantial
of Scope 3 emissions – from activities not 2.611%, or 117bp over Treasuries, following step-up,” Roose said. “These targets are
owned or controlled by the issuer – in the bond guidance in the area of plus 120bp. Credit important to Newmont, and they wanted to
framework and a coupon step-up of as much as Suisse was SLB structuring adviser and, make sure the structure was appropriate for the
60bp helped convince some ESG investors. along with BMO Capital Markets, Goldman investor community. This is an ideal template for
“I think the problem is that not many of these Sachs and JP Morgan, a joint bookrunning transitionary companies to follow for an SLB.”
companies have focused on Scope 3,” said manager. Timothy Sifert

Market participants had been anticipating down a build-up in leverage from a chunky the debt may not have risen much, as they
SOMEûLARGEûACQUISITIONûlNANCINGûPACKAGESû ACQUISITION were issuing new bonds when Treasury
hitting the US primary sector. Banks were “M&A bond issues can go well, but yields remained historically low and credit
under pressure to bring any M&A bonds to management has got to have credibility. traded at tight spreads.
avoid having to carry risk on their balance They’ve got to show they’ve cleaned up their “The actual debt service is getting better
sheets through the turn of the year. And balance sheet before,” said a senior credit even as leverage is ticking up,” said Coons.
market volatility in late November made it analyst. “It’s easier to manage debt loads when
tricky to clear the decks before December Indeed, Ecolab underlined its capital markets are wide open. We joke that
got underway. commitment to cut down on its debt you could probably issue debt at a lemonade
“Banks taper [their balance sheets] before following its purchase of Purolite, which is stand right now.”
going into year-end, so there’s [typically] not expected to lift net leverage to 3.2 times
a lot of supply in general sloshing around,” from two times, according to CreditSights. WESTERN DIGITAL PIVOTS TO
said Adam Coons, portfolio manager at The company said it would divert cash to UNSECURED DEBT
Winthrop Capital Management. pay down incoming short-term maturities,
based on an investor presentation. WESTERN DIGITAL made use of its freshly
M&A In the end, the willingness of investors to minted investment-grade rating to sell a
The improvement in corporate balance absorb these large M&A bonds came down new senior unsecured bond on Tuesday,
sheets and earnings throughout this year to the vibrancy of primary markets and scrapping its earlier plans to sell a secured
has meant investors have been more cheap borrowing costs. Even after corporate note.
FORGIVINGûOFûDEBT lNANCEDû-!ûESPECIALLYû debt levels swelled from the purchase of a 4HEûMAKERûOFûHARDûDRIVESûANDûmASHûDATAû
for companies with a history of whittling new business, their overall cost of servicing storage devices issued US$1bn of senior

24 International Financing Review December 11 2021

 BONDS CORPORATES

unsecured notes split evenly across a seven- NEXTERA’S HYBRID RIDES RISK-ON Bolstering its popularity among the
year and a 10-year tranche via Bank of REVIVAL buyside, NextEra is ploughing billions into
America, JP Morgan and MUFG. Strong demand the build-out of renewable energy
helped leads tighten pricing aggressively by NEXTERA ENERGY came to the investment-grade infrastructure across the US, making it one
35bp for each tranche from initial thoughts, primary market for the second time last of the highest rated utilities on ESG scoring
eventually printing the notes at 145bp and week with a new hybrid offering amid frameworks.
165bp over Treasuries, respectively. renewed appetite for riskier debt “It’s a good energy transition story.
Bookrunners, encouraged by the upward instruments. $ElNITELYûAHEADûOFûJUSTûABOUTûALLûLARGEû53û
trajectory of Western Digital’s credit rating, Out of its holding company, the utility utilities,” said an investor.
pushed for an unsecured format. PRINTEDûAû53Mû YEARûNON CALLûlVEû NextEra had already come to the
Western Digital initially marketed a subordinated junior note on Thursday at investment-grade bond market earlier with
potential secured bond offering on its Friday 3.8%, moving sharply in from initial price a US$2.5bn senior unsecured deal on
roadshow. But when the deal hit the thoughts of the 4.375% area. Bookrunners Tuesday. Funds raised from the new
primary market, the company switched to were Barclays, BNP Paribas, Citigroup, Credit corporate hybrid and senior notes will help
an unsecured bond instead after Fitch Agricole, Morgan Stanley, RBC Capital Markets take out senior debt maturing between 2022
upgraded it to BBB– from BB+ on Friday, said and Wells Fargo. and 2026 and junior notes coming due in
a lead banker. “It’s one of the biggest moves we’ve seen 2076.
Fitch’s upgrade put the company solidly from where we’ve started [in price thoughts] The utility is expected to lean heavily on
in investment-grade bond indices, as to where we’ve landed,” said a lead banker. capital markets next year, as it signalled it
Moody’s had already given the company a NextEra came tighter than a recent batch would spend around US$60bn on capital
Baa3 rating, with only S&P leaving Western of new corporate hybrids. On Tuesday, expenditures in the four years through
Digital at junk. property investor BROOKFIELD landed a 2022, 57% of which will go towards
“We think an unsecured bond deal makes US$260m perpetual hybrid note at 4.875% renewable energy projects. Yet this deluge of
more sense given the company’s desire to through its Canadian holding entity. Other debt issuance is likely to be offset by the
strengthen its balance sheet, particularly as borrowers including British utility’s prudence, in the eyes of debt
its entire structure will now be unsecured Telecommunications, DTE Energy and investors, in raising funds with plenty of
and its bonds will be in IG indices,” said Sempra Energy jumped into the market in new stock and issuance of hybrid debt
CreditSights analysts. “The switch to an November, all printing above 4%. instruments, said CreditSights. Around 56%
unsecured bond deal is also favourable for Strong execution in NextEra’s new of the company’s capital structure is
the existing notes, since they will no longer OFFERINGûREmECTEDûHOWûWANINGûCONCERNSû COMPOSEDûOFûEQUITY
BEûLAYEREDûBEHINDûAûSIGNIlCANTûAMOUNTûOFû around the Omicron variant aided the h4HEYûDElNITELYûHAVEûBEENûBONDHOLDER
secured debt.” performance of riskier debt instruments last friendly, which really is to their advantage
Western Digital will pay down a chunk of week, with credit spreads reversing some of in the long run, since it is a very capital-
its nearly US$4.3bn term loan A with the the widening seen at the end of November. intensive business and cost of debt capital
proceeds from the new bond. It is also really matters,” said the investor.
replacing the remainder of its term loan A HUNGRY FOR HYBRID
with a new US$3bn term loan B maturing in The paucity of preferred notes and
2027. corporate hybrid structures that carried EUROS
The company had also triggered investment-grade ratings also helped to
provisions on a loan agreement to change its attract yield-starved investors with high- NTT TAKES THE PLUNGE
outstanding US$944m term loan B into grade mandates that were otherwise fenced
unsecured obligations, removing all secured out of those markets. NTT FINANCE decided to pull the trigger on a
instruments from its capital structure, “When you’ve got a good corporate credit much-awaited €1.5bn dual-tranche green
ACCORDINGûTOûAûCORPORATEûlLINGûFROMû-ONDAYû going way out in the curve and into bond issue last Monday, having been kept on
The move would give Western Digital the subordinated debt, that incremental yield the sidelines by market volatility for almost
mEXIBILITYûTOûRAISEûSECUREDûlNANCINGûINûTIMESû they offer to the marketplace gets sucked up THREEûWEEKSûSINCEûlRSTûANNOUNCINGûTHEûDEALû
of distress. in this environment,” said the banker. on November 12.

ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 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 Bank of America 99 17,301.34 10.8 1 JP Morgan 604 178,808.37 12.4 1 BNP Paribas 252 33,320.54 8.3
2 JP Morgan 104 16,990.14 10.6 2 Bank of America 581 166,201.21 11.6 2 Deutsche Bank 174 24,993.38 6.2
3 Citigroup 74 13,053.11 8.1 3 Citigroup 487 133,190.19 9.3 3 JP Morgan 175 23,849.11 5.9
4 Goldman Sachs 57 10,700.52 6.7 4 Goldman Sachs 348 122,301.75 8.5 4 Citigroup 134 20,324.61 5.0
5 Wells Fargo 87 9,408.34 5.9 5 Morgan Stanley 329 94,639.39 6.6 5 Bank of America 122 20,322.68 5.0
6 Barclays 49 9,057.04 5.6 6 Wells Fargo 385 72,417.00 5.0 6 HSBC 141 18,327.23 4.5
7 Morgan Stanley 62 8,545.69 5.3 7 Barclays 248 60,737.61 4.2 7 Societe Generale 121 17,742.76 4.4
8 Deutsche Bank 35 8,278.70 5.2 8 Deutsche Bank 177 53,895.47 3.7 8 Credit Agricole 149 16,792.18 4.2
9 Mizuho 40 7,175.55 4.5 9 HSBC 152 45,896.86 3.2 9 Goldman Sachs 134 16,390.62 4.1
10 MUFG 44 7,125.81 4.4 10 MUFG 209 45,123.37 3.1 10 Morgan Stanley 103 15,532.89 3.9
Total 241 160,616.15 Total 1,242 1,437,323.81 Total 577 403,203.38
Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Excluding equity-related debt. FIGs, ABS/MBS.
and non corporates.
Source: Refinitiv SDC code: F6a Source: Refinitiv SDC code: F9 Source: Refinitiv SDC code: N8

International Financing Review December 11 2021 25

 Given how much spreads had widened And the company, which acts as the The issuer and the deal had a number of
SINCEûTHEûPOTENTIALûDEALûWASûlRSTûmAGGEDûTOûTHEû INTERNATIONALûlNANCINGûANDûLEASINGûARMû factors working in its favour. It features
market, there was some speculation that the of Japan’s Nippon Telegraph and green use-of-proceeds and this was the
issuer, which multiple bankers described as Telephone, was rewarded with a BORROWERSûlRSTû%3'ûOUTINGûINûTHEû%UROPEANû
being particularly price-sensitive, would substantial book. Orders for the €650m market; the issuer is both well rated and
shelve the new issue until the new year. four-year senior unsecured tranche rare in the euro market; and in absolute
But with rates relatively low and broader peaked at €3bn, while the €850m seven- terms the spread it was offering, given its
markets fairly stable last week, the issuer year tranche saw demand in excess of ratings, was decent.
(rated A by S&P) decided to take the plunge, €3.5bn. In a sign of the extent to which market
given the expectation that while new issue The issuer was also able to partially avoid conditions had shifted during the three
concessions may come down at the start of THEûSIGNIlCANTûPREMIUMSûTHATûISSUERSûATûTHEû weeks the issuer had been waiting to issue,
2022, rates are likely to be going up. end of November were paying to access the NTT’s curve had widened meaningfully
“They had been monitoring the market market. Prior to last Monday, some bankers since mid-November, especially at the short
and they saw over the last couple of sessions had suggested that it would not be end.
the market looking a bit more stable and surprising to see NTT paying concessions of When leads announced pre-
constructive,” said a banker at one of the over 20bp. announcement comparables on November
leads. “They knew what was achieved and In the end, spreads on the two tranches 12, they highlighted a €1bn 0.01% March
they decided to go.” were set at 27bp and 45bp versus mid-swaps, 2025 issue and a €1bn 0.342% March 2030 at
Rival bankers also seemed to agree that representing new issue premiums of 1bp- 5bp and 27bp. These same bonds were seen
issuing now, rather than delaying, was the 2bp and 10bp, based on the estimates of at 24bp and 38bp at the start of last week.
right choice. SYNDICATEûOFlCIALSûINVOLVEDûINûANDûAWAYû
h9OUûHAVEûINmATIONû/MICRONûANDûMOREû from the transaction. ORANGE JUMPS IN AHEAD OF JANUARY
hawkish central banks,” said one syndicate “This deal ticks a lot of boxes,” said the RUSH
banker away from the deal. “You can totally lead. “Just because you have had two or
understand a scenario where an issuer is three weeks of market instability, it doesn’t French telecoms operator ORANGE decided to
looking at the market and thinking that mean investors shy away from the things bring forward a new issue and tap into the
rates remain relatively low, but aren’t going that they have been looking for for most of primary last Tuesday, rather than wait until
to be for very much longer, so go now.” this year.” January, when heavy supply means that
borrowers are often jostling for the
ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN STERLING attention of investors.
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE /NLYûAûDAYûBEFOREûTHEûlNANCINGûARMûOFû
Managing No of Total Share Managing No of Total Share Japan’s Nippon Telegraph and Telephone
bank or group issues €(m) (%) bank or group issues £(m) (%) demonstrated that although it is late in the
1 BNP Paribas 372 94,985.13 8.1 1 Barclays 51 4,955.41 16.8 year, accounts are still there for new issues,
2 JP Morgan 280 76,560.00 6.5 2 HSBC 35 3,321.08 11.3 even at relatively limited premiums,
3 Deutsche Bank 237 66,792.73 5.7 3 NatWest Markets 29 2,696.50 9.1 providing the credit and product are right.
4 Credit Agricole 254 64,889.41 5.5 4 Lloyds Bank 31 2,481.83 8.4 /RANGEû"AA"""""" ûCLEARLYûlTSûTHEû
5 Barclays 211 60,905.71 5.2 5 BNP Paribas 21 1,760.68 6.0 bill. Its €1bn 12-year senior unsecured
6 HSBC 259 60,117.82 5.1 6 Goldman Sachs 17 1,271.56 4.3 amassed orders of over €5.5bn, with leads
7 Societe Generale 219 59,034.67 5.0 7 Santander 12 1,234.69 4.2 THENûABLEûTOûlXûTHEûSPREADûATûBPûFORûAû
8 UniCredit 207 53,954.39 4.6 8 Bank of America 15 1,231.07 4.2 concession of just 5bp.
9 Bank of America 169 53,407.48 4.6 9 RBC 14 1,175.52 4.0 “Investors’ cash positions continue to be
10 Citigroup 190 49,391.66 4.2 10 Morgan Stanley 12 1,090.21 3.7 ROBUSTûANDûNEWûISSUEûSUPPLYûINûTHEûlNALû
Total 1,329 1,170,824.15 Total 86 29,515.32 couple of weeks of the year is low,” said one
Excluding ABS/MBS, equity-related debt. banker involved, as an explanation for why
Source: Refinitiv SDC code: N9 Source: Refinitiv SDC code: N8a the issue was so sought-after.
In addition, Orange is a well-known and
ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS INCLUDING liked credit that does not actually appear in
EXCLUDING SECURITISATIONS SECURITISATIONS the market that often. The issuer has raised
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE €2bn in the primary this year, although
Managing No of Total Share Managing No of Total Share €500m of that was subordinated debt.
bank or group issues £(m) (%) bank or group issues SFr(m) (%) “The [new issue] was actually more
1 HSBC 111 17,613.96 11.3 1 Credit Suisse 131 13,907.03 26.7 planned for early 2022,” said a second
2 NatWest Markets 110 16,745.52 10.7 2 UBS 108 10,927.38 21.0 banker at one of the leads. “But they just
3 Barclays 123 16,481.50 10.6 3 Verband Schweiz 18 7,044.73 13.5 wanted to ride the NTT momentum and do
4 RBC 70 9,908.32 6.3 4 ZKB 68 5,924.73 11.4 THISûNOWûINûAûQUIETERûMARKETûVERSUSûWHATûISû
5 JP Morgan 46 9,650.46 6.2 5 Raiffeisen 43 3,980.73 7.7 expected to be a busy January.”
6 BNP Paribas 46 8,403.69 5.4 6 Deutsche Bank 29 2,827.00 5.4 Bankers have been debating since
7 Deutsche Bank 44 8,231.94 5.3 7 BNP Paribas 13 1,547.98 3.0 November whether to get clients to go into a
8 Lloyds Bank 60 8,046.92 5.2 8 Commerzbank 14 1,136.65 2.2 market that has, until this week, demanded
9 Nomura 26 7,551.00 4.8 9 Basler KB 11 727.91 1.4 some steep premiums, at least at the start,
10 Bank of America 47 7,420.99 4.8 10 SKB Banka 3 610.74 1.2 or hold off until January. While premiums
Total 309 156,044.27 Total 245 51,996.31 may be lower then, rates could well be
Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt. higher and there would be considerable
Source: Refinitiv SDC code: K05a Source: Refinitiv SDC code: K06c competing supply.

26 International Financing Review December 11 2021

 BONDS FIG

With concessions now falling, the balance Like the other issuers last week, raised A$350m (US$252m) from a debut, six-
of things may be changing, though in a sign Aroundtown paid some premium. Estimates YEARûlXED RATEûRATEûSENIORûUNSECUREDûNOTEû
THATûSYNDICATEûOFlCIALSûSTILLûNEEDûTOûBEûCAREFULû varied given the steepness of the issuer’s offering.
about the way they approach the market, curve. At the lower end, some suggested a The notes pay a 3.026% coupon and priced
Orange’s IPTs of 80bp–85bp incorporated a premium of 3bp, while at the upper 8bp was at par, at the tight end of revised 135bp–
starting concession of 30bp–35bp. put forward. 140bp area guidance, which had been
That was broadly in line with what was seen One factor that probably supported reduced from the initial 145bp area price
at the end of November, when syndicate demand for Thursday’s deal is the lack of talk.
OFlCIALSûWEREûEMPHASISINGûHOWûIMPORTANTûITû supply out of Aroundtown in recent years. CBA and Westpac were joint lead managers.
was to widen IPTs to offer an initial concession Although the REIT was once a highly “Our inaugural MTN issuance was well
of 30bp or more, demonstrating to investors at active issuer in the bond market – in 2019 it supported by both domestic and
the outset that the issuer was willing to pay up issued multiple transactions across euros, international investors. The issuance
IFûREQUIRED sterling, Swiss francs and US dollars – its last strengthens CIP’s balance sheet, increasing
euro benchmark came in January, when it debt duration and is illustrative of the REIT’s
FALLING YIELDS COAX AROUNDTOWN issued a €600m 1.625% perpetual non-call improved access to a broader range of
BACK TO EUROS 5.5-year hybrid. capital sources,” said Jesse Curtis, CIP fund
It had not issued a senior benchmark in manager and Centuria’s head of industrial.
AROUNDTOWN raised €1.25bn last Thursday, 12 months and has been much less active Centuria Industrial REIT is one of
with an opportunistic deal that took than other Germany-focused REITs. Australia’s largest pure-play industrial REITs
advantage of the recent tightening in the In a sign that bankers think investors will listed on the ASX.
real estate company’s curve. continue to be willing to engage with
The trade, which came alongside a tender borrowers to some degree in the build up to
offer, found good traction and underscored Christmas, French pharmaceutical SANOFI
the fact that while it is late in the year, (A1/AA) on Thursday announced the
investors have still been looking to pick up mandate for a non-deal roadshow to talk FIG
new paper. accounts through its new sustainability-
“I think what we are seeing is some linked bond framework.
pent-up demand coming through,” said one Calls will take place on December 15 and US DOLLARS
syndicate manager away from Aroundtown. 16.
“Late November and early December are 4HEREûAREûFOURû+0)SûINCORPORATEDûINTOûTHEû ABN AMRO PRINTS LONG-DATED TIER 2
always expected to be busy so investors keep framework. Two of these are linked to
some cash aside, but because of the climate mitigation and cover Scope 1, 2 and ABN AMRO jumped into the subordinated debt
VOLATILITYûTHISûPERIODûWASûACTUALLYûVERYûQUIETû 3 emissions and two provide targets to MARKETûASûITûTOOKûADVANTAGEûOFûTHEûmATTERû
and now some investors have been telling improve access to medicine. yield curve to raise Tier 2 regulatory capital
us they want some supply.” “What I think investors want are before the end of the year.
Aroundtown (BBB+ from S&P) was able to FRAMEWORKSûTHATûAREûREmECTIVEûOFûEACHû The Dutch bank last Monday priced a
make use of this supply/demand imbalance business,” said a banker away from the US$1bn 15-year non-call 10 subordinated
with an opportunistic liability management roadshow. “If you have a company like a note at 190bp over Treasuries, tightening
exercise. pharmaceutical, investors are not only going sharply from price thoughts in the 215bp
“We recognised the tighter yields in our to want to see emissions targets, but social area.
bonds and decided to take the opportunity ones, because ultimately that is what is The offering also included a new US$1bn
for a liability management exercise,” said a really relevant to the company.” eight-year non-call seven senior non-
source at the company. In a similar fashion, when Novartis issued preferred note in green bond format, which
To give some sense of the level of a €1.75bn 0% September 2028 SLB last year, landed at 110bp over. Earlier in September,
tightening that had occurred, the yield on it linked a coupon step-up to two targets the bank had printed an identical structure
Aroundtown’s €800m 1.625% January 2028s relating to greater access to medicine. in euros. By issuing in an extended maturity,
has come in from 1.03% at the end of Whether Aroundtown’s deal was the last ABN AMRO’s subordinated offering was
November to 0.86% towards the end of last of the year remains to be seen, especially as ACCESSINGûAûLESSûLIQUIDûANDûSMALLERûSEGMENTû
week, according to Tradeweb. the latter half of this week is dominated by of the market for FIG borrowers.
The real estate company set the spread on central bank meetings. But the long-dated structure has gained
the €1.25bn April 2027 senior unsecured All this said, some bankers have said that traction in the subordinated market among
note at 88bp over mid-swaps, well inside the given the apparent demand that new issues Yankee banks. Australian bank Westpac last
115bp–120bp IPTs, while also announcing a have been met with last week, they would month raised a 15-year non-call 10
tender offer targeting its €600m 0.375% not be entirely surprised if some subordinated note at 153bp over Treasuries,
September 2022s and €500m 1.875% January opportunistic issuers, looking at deals that drawing strong interest from investors
2026s. DOûNOTûREQUIREûINVESTORûENGAGEMENTû looking to pick up some yield from a highly
“It’s been a pretty positive outcome beforehand, were contemplating a trade. rated borrower.
today,” said a DCM banker at one of the “Not an altogether unusual structure for a
leads. “We’re printing €1.25bn at 88bp, Tier 2 Yankee sub given that eligibility for
which I think has gone better than the base NON-CORE CURRENCIES REGULATORYûCAPITALûAMORTISESûOVERûTHEûlNALû
case. The market tone today was pretty lVEûYEARSûTOûMATURITYûOFûTHEûBONDû7HILEûWEû
strong.” CENTURIA DEBUTS haven’t necessarily seen it from Dutch
4HEûlNALûBOOKûFORûTHEûTRANSACTIONû banks, we have seen it from French and
exceeded €3.7bn and it priced at a yield of CENTURIA INDUSTRIAL REIT, rated Baa2 (Moody’s), Australian banks,” said Dan Bruzzo,
0.766%. VIAûITSûlNANCINGûSUBSIDIARYû#)0û&UNDINGû managing director at Amherst Pierpont.

International Financing Review December 11 2021 27

 Still, ABN AMRO’s decision to go long trade, abrdn with the AT1 and today we had PERFECT FIT
shows FIG borrowers were eager to bring Westpac.” Bankers added that the short-dated, well-
forward issuance to hedge against the A banker at one of Westpac NZ’s leads said rated nature of the deal – which is
prospect of higher bond yields next year. the issuer decided to push ahead after expected to be A1/AA– (Moody’s/S&P) –
That was despite the recent pull-back in weighing up the likely outcomes in terms of perfectly suited investors’ needs at
long-dated Treasury rates, sparked by volume and concession for a transaction year-end.
mounting concerns that the Omicron now versus a deal launched in a busier “For us, that trade has always been there,”
variant could dent the progress of the global January market, concluding that there was SAIDûTHEûLEADûBANKERûh)TûWASûJUSTûAûQUESTIONû
economic recovery. little downside to going on this side of the of were [issuers] willing to pay the entry
The 10-year Treasury, which closed on Christmas break. fee?”
December 3 at 1.35%, was at 1.43% last Leads Barclays, HSBC, JP Morgan and Westpac The deal is Westpac NZ’s second euro
Monday, after hovering above 1.60% in late marketed the deal with IPTs of mid-swaps benchmark senior offering of 2021,
November. plus 75bp area. following a €750m six-year deal which
“Long-dated issuance is always a positive The spread was ultimately set at 55bp on priced at 42bp in July.
for capital ratios. If you think the market is the back of more than €2.85bn of orders – In line with broader market moves, that
giving away the window to print long-dated which bankers noted was an unprecedented 0.01% transaction widened sharply in late
debt and you have a view rates are going to level of demand for a New Zealand issuer in November to a peak of 58bp on November
be higher, then now is a good time,” said the euro market. 26, before tightening back in to trade at
3COTTû+IMBALLûCO HEADûOFû53ûlXEDûINCOMEûATû h4HATûREmECTSûWHATûWEûHAVEûSEENûONûTHEû 48bp on Tuesday morning.
BMO Global Asset Management. SECONDARYûMARKETûWITHûmOWSûSTRONGLYû Some bankers saw fair value for the new
Bookrunners for the two-part offering skewed to buying, showing that there is still ISSUEûmATûTOûTHATûREFERENCEûPOINTûWHEREASû
were ABN AMRO, Bank of America, Citigroup, cash to be deployed by year-end,” said a others put it slightly tighter at 45bp,
Morgan Stanley, RBC, Goldman Sachs and second banker away from the deal. IMPLYINGûAûlNALûCONCESSIONûOFûEITHERûBPûORû
Standard Chartered. “The fact is the macro is still very strong 10bp.
even if it’s the end of the year and we have “Overall, some of these issuers are paying
SEENûAûVERYûSUBSTANTIALûSQUEEZEûONûTHEû up a little bit, but who knows what people
EUROS secondary market and very substantial will be paying in January, so I understand
tightening, so there are still pre-funding the rationale,” said a third banker away
WESTPAC NZ GRABS LAST-MINUTE trades that can be done.” from the deal.
SENIOR PRE-FUNDING
ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION
BOOKRUNNERS: 1/1/2021 TO DATE BONDS (ALL CURRENCIES)
Westpac NZ launched a well-timed senior
Managing No of Total Share BOOKRUNNERS: 1/1/2021 TO DATE
unsecured pre-funding exercise last week as
bank or group issues €(m) (%) Managing No of Total Share
ITûLANDEDûAûBLOWOUTûõMûlVE YEARû
1 BNP Paribas 86 15,622.43 7.4 bank or group issues US$(m) (%)
transaction off an almost four times
2 Societe Generale 64 13,446.18 6.3 1 HSBC 61 12,140.40 8.5
subscribed book.
3 Goldman Sachs 51 11,592.64 5.5 2 JP Morgan 65 11,232.06 7.8
Away from the US dollar market, FIG
4 Credit Agricole 57 11,118.83 5.2 3 Citigroup 65 10,914.76 7.6
issuance prior to Westpac NZ’s deal had
5 Natixis 50 10,561.19 5.0 4 Barclays 48 9,029.59 6.3
been limited to opportunistic covered bonds
6 JP Morgan 66 10,524.17 5.0 5 Goldman Sachs 48 8,012.15 5.6
and strategic capital trades in December.
7 Deutsche Bank 59 9,983.15 4.7 6 Bank of America 46 7,799.16 5.4
While the market tone was dictated by the
8 Barclays 62 9,876.36 4.7 7 BNP Paribas 42 7,018.02 4.9
NEWSûmOWûONûTHEû/MICRONûVARIANTûSOMEû
9 UniCredit 62 9,713.53 4.6 8 Deutsche Bank 26 6,943.06 4.8
market participants suggested the window
10 HSBC 67 9,070.34 4.3 9 Morgan Stanley 36 6,303.60 4.4
for senior issuance had already closed for
Total 350 211,883.59 10 UBS 29 5,400.27 3.8
the year.
Including banks, insurance companies and finance companies. Excluding Total 205 143,375.59
But, on Tuesday, Westpac’s deal, the equity-related and covered bonds. Excluding publicly owned institutions.
lRSTûBANKûSENIORûUNSECUREDûISSUANCEûINû Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a
euros since late November, showed
ALL GLOBAL AND EUROMARKET YEN BONDS ALL INTERNATIONAL YEN BONDS
CONDITIONSûHADûRECOVEREDûSUFlCIENTLYûTOû
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
put such pre-funding transactions back on
Managing No of Total Share Managing No of Total Share
the table.
bank or group issues ¥(m) (%) bank or group issues ¥(m) (%)
“The senior market has been untested in
euros since November 25, when we had 1 Mizuho 13 196,883.33 19.1 1 Sumitomo Mitsui 31 430,612.33 25.0
BFCM with a 3.25-year senior preferred and 2 Mitsubishi UFJ MS 25 157,709.05 15.3 2 Mizuho 30 287,000.00 16.7
SocGen with a social 6NC5 SNP,” said a 3 Sumitomo Mitsui 11 130,591.67 12.7 3 Mitsubishi UFJ MS 33 209,075.71 12.1
syndicate banker away. “Those transactions 4 JP Morgan 8 97,500.00 9.5 4 Nomura 29 178,891.67 10.4
went well but, overall, issuers have shied 5 MUFG 4 76,858.33 7.5 5 Daiwa Securities 21 129,366.67 7.5
away from the senior market given all the 6 Nomura 7 63,775.00 6.2 6 JP Morgan 8 97,500.00 5.7

recent volatility.” 7 Bank of America 2 63,333.33 6.1 7 MUFG 4 76,858.33 4.5

“The activity we’ve seen in secondary 8 Goldman Sachs 2 49,733.33 4.8 8 Bank of America 2 63,333.33 3.7

where a lot of real money accounts have 9 Daiwa Securities 4 43,750.00 4.2 9 Goldman Sachs 2 49,733.33 2.9
10 BNP Paribas 2 27,125.00 2.6 10 Natixis 6 34,500.00 2.0
been buying – spreads have been tightening
Total 56 1,029,842.38 Total 88 1,723,446.38
considerably since the wides in November –
Excluding equity-related debt. Including preferreds. Including all Euro, foreign and global issues. Excluding equity-related
is translating into primary with strong debt.
EXECUTIONSûWEûHADûTHEû5NIQAûINSURANCEû Source: Refinitiv SDC code: K10 Source: Refinitiv SDC code: K12

28 International Financing Review December 11 2021

 BONDS FIG

The new issue performed strongly in the Next year’s issuance could come in the Initial price guidance when the
secondary market, trading 7bp inside reoffer form of Additional Tier 1 capital or senior marketing started on Tuesday was 33bp
at 48bp on Thursday. paper, said Slape, adding that the bank may FORûTHEûlVE YEARû30ûBPnBPûFORûTHEû
issue further MREL-eligible debt in 2023. year SP, 54bp–55bp for the six-year
NON CALLûlVEû3.0ûANDûBPnBPûFORûTHEû
STERLING 10-year non-call nine. IPG for the Tier 2
YEN sub debt was 1.05%–1.1% for the 10-year
MOODY UPGRADES CO-OP SENIOR NON CALLûlVEûANDûûFORûTHEû YEARû
UNSECURED BPCE TIER 2 SAMURAI IN DEMAND non-call 10.
Books closed in Europe at the close of
Moody’s has upgraded the senior unsecured BPCEûRETURNEDûTOûTHEûYENûMARKETûFORûTHEûlRSTû business that day, and in Asia at 11am Tokyo
DEBTûOFûTHEû5+SûCO-OPERATIVE BANK to B1 from time in a year to sell ¥138bn (US$1.21bn) of time the following day.
B3, citing progress in the bank’s efforts to multi-tranche Samurai bonds, with a Tier 2
RETURNûTOûSUSTAINEDûPROlTABILITYûWHILEû portion setting a record for its size. TONAR REFERENCE
noting the likely cost of its plans to raise “This deal has set a new trend,” said a A noteworthy aspect of the transaction is
MREL-eligible debt next year. banker away from Thursday’s trade, who that BPCE will use Tonar swaps to reset the
Moody’s also lifted Co-op Bank’s deposit expects other foreign issuers to follow suit coupons for the callable tranches if not
ratings to Ba3 from B2 and upgraded the and sell subordinated bonds in the yen called. The coupon on the six-year non-call
holding company to B1 from B3 on market. lVEû3.0ûTRANCHEûWILLûRESETûATûAûlXEDûRATEû
Thursday, while maintaining a positive 4HEûcBNû YEARûNON CALLûlVEû4IERûû EQUALûTOûTHEûONE YEARû4ONARûPLUSûBPûTHEû
outlook on the senior unsecured debt rating tranche of the six-part offering was the coupon on the 10-year non-call nine will be
and the deposit ratings. biggest subordinated bond deal ever in the one-year Tonar plus 70bp, the coupon on the
The ratings agency said the upgrades international yen market, according to  YEARûNON CALLûlVEûSUBûWILLûBEûlVE YEARû
REmECTEDûTHEûBANKSûPROGRESSûTOWARDSûAû 2ElNITIVûDATA Tonar plus 112.8bp and the coupon on the
more sustainable business model and It priced with a 1.1% coupon at 112.8bp  YEARûNON CALLûûWILLûBEûlVE YEARû4ONARû
IMPROVEMENTSûINûITSûPROlTABILITYûASûWELLûASû over Tonar mid-swaps. Pension funds were plus 120.1bp.
the bank’s plans to issue MREL-eligible debt, key investors, with Japanese regional BNP Paribas, Credit Agricole and Barclays
which provides additional protection to accounts, life insurers, universities and for their yen deals priced earlier this year
depositors and bondholders and results in others also participating. will use JGBs to reset the coupons if the
an additional notch of uplift under Moody’s The 1%-plus absolute yield level and the bonds are not called.
analysis. Samurai format were important factors Mitsubishi UFJ Morgan Stanley, Mizuho, Natixis
After 10 years of losses, Co-op Bank has behind the demand. and Nomura were the bookrunners for the
REPORTEDûSUCCESSIVEûQUARTERLYûPROlTSûTHISû 4HEûOTHERûTRANCHESûWEREûlVEûANDû YEARû BPCE deal. The expected ratings were A1/A/
year. Together with capital generation, that SENIORûPREFERREDûNOTESûSIX YEARûNON CALLûlVEû A+/A+ (Moody’s/S&P/Fitch/R&I) for the SP
has already seen the bank rewarded with and 10-year non-call nine senior non- tranches, Baa1/BBB+/A/A for the SNP
upgrades from Moody’s and Fitch in July – preferred bonds, and 15-year non-call 10 portions and Baa2/BBB/A–/A for the
when Moody’s raised the senior debt rating Tier 2 debt. The French bank marketed a subordinated bonds.
to B3 from Caa1 and Fitch upgraded its seven-year SP tranche but dropped it.
Issuer Default Rating to B+ from B. 4HEûlVE YEARû30ûPRICEDûWITHûAûû
Moody’s said on Thursday it believed the coupon at 33bp over Tonar swaps. Books had NON-CORE CURRENCIES
risk that Co-op Bank would remain loss- built up to over ¥30bn, but the size was
making has reduced. capped at ¥25bn because the issuer was pre- AMP PAYS DOWNGRADE PREMIUM
“The ratings agency believes that, funding as it had already raised enough
following the restructuring over the last funds for the year. AMP BANK, rated Baa2/BBB (Moody’s/S&P),
several years, charges for exceptional items The ¥8.7bn 10-year SP priced with a returned to the local senior market for the
will reduce and moderate loan growth and 0.439% coupon at 39bp over, the ¥9bn six- lRSTûTIMEûINûOVERûTHREEûYEARSûONû4HURSDAYû
POTENTIALLYûHIGHERûBASEûRATESûINûTHEû5+ûWILLû YEARûNON CALLûlVEû3.0ûWITHûAûûCOUPONû with a A$125m (US$90m) three-year
support the bank’s revenue.” at 54bp over, the ¥14.9bn 10-year non-call mOATING RATEûNOTEûPRICEDûATûTHREE MONTHû
Moody’s added, however, that it expected nine with a 0.728% coupon at 70bp over, and BBSW plus 90bp. CBA, UBS and Westpac were
#O OPû"ANKSûPROlTABILITYûTOûREMAINûVERYû the ¥5.8bn 15-year non-call 10 Tier 2 with a joint lead managers.
weak and said achieving returns in excess of 1.25% coupon at 120.1bp over. The issue AMP Bank previously sold a A$400m
the bank’s cost of capital is highly unlikely price was 100 for all tranches. three-year FRN at three-month BBSW plus
in the next 12–18 months, while 108bp in September 2018 when it was
acknowledging an uncertain operating DELAYED DEAL rated three notches higher at A2/A
ENVIRONMENTûINûTHEû5+ The issuer held a roadshow in the week (Moody’s/S&P).
The anticipated issuance of MREL-eligible of November 15 and was initially looking 4HEûISSUERûSUFFEREDûSEVERALûSUBSEQUENTû
debt, while positive for bondholders and to sell the bonds in the week beginning downgrades due to its prominent role in
depositors, will also increase the bank’s cost November 29. But the bank opted to sit !USTRALIANûlNANCIALûSCANDALS
of funding, said Moody’s. on the sidelines because of volatility One recent comparable which may
Nick Slape, chief executive of Co-op Bank, caused by the discovery of the more indicate where AMP Bank would have
said during an investor event in October the contagious Omicron variant. Conditions cleared with its former Single A ratings was
bank expected to issue up to £200m of then started to stabilise, but not THEû!MûTHREE YEARûmOATERûONû.OVEMBERû
-2%, ELIGIBLEûDEBTûINûûBEFOREûITSûlNALû completely, so the issuer marketed 23 from Agricultural Bank of China, Sydney
-2%,ûREQUIREMENTûKICKSûINûFROMû*ANUARYûû QUICKLYûLASTûWEEKûWITHûRELATIVELYûTIGHTû branch (A1/A/A), which priced 53bp wide of
2023. guidance ranges. three-month BBSW.

International Financing Review December 11 2021 29

 BOQ GOES SHORT HAVEûTHEûlELDûOFûPLAYûTOûTHEMSELVESûEVENûIFû which sold a £350m December 2024
not everyone is keen to play in December,” transaction in July at 39bp over Gilts.
BANK OF QUEENSLAND (A3/BBB+/A–) revisited the banker said. MunHyp’s deal, priced when swaps
the senior unsecured market on Wednesday Canada, where issuers have been weaned SPREADSûWEREûTIGHTERûWASûQUOTEDûATûBPûBIDû
with a A$275m (US$197m) sale of one-year off central bank funding, has been one of on Friday, but bankers argued that bond was
SENIORûUNSECUREDûmOATING RATEûNOTESûWHICHû the key jurisdictions driving covered TOOûILLIQUIDûANDûARTIlCIALLYûTIGHTûTOûBEûAû
priced in line with three-month BBSW plus issuance this year. BNS came hot on the relevant reference point.
27bp guidance via sole lead manager ANZ. heels of CIBC, which launched a successful h7EVEûSEENûTHEûOTHERûlXEDûFROMû-UN(YPû
BoQ has raised a lot of funds this year to £1bn four-year Sonia-linked covered bond earlier in the year, but given the very
help pay for its A$1.3bn purchase of ME issue on Tuesday. SIGNIlCANTûMOVEûINûSWAPSûSPREADSûTHISûISû
Bank, which was completed on July 1. “It’s good to see a couple of Canadian banks COMINGûQUITEûAûLOTûWIDERûONûAû'ILTûBASISvû
In October, Bank of Queensland issued an getting good execution this week. We’ll said the syndicate banker away from the
!MûDUAL TRANCHEûlVE YEARûSENIORû probably continue to see that trend of deal. “But, actually, versus where I would see
UNSECUREDûNOTEûOFFERINGûlVEûMONTHSûAFTERûAû Canadian banks accessing markets in them in Sonia-linked format, it’s potentially
!MûTWO PARTûlVE YEARûSALE January,” said the banker away from the deal. even a little bit inside.”
4HEûBANKûSUBSEQUENTLYûSETûAûNEWûREGIONALû The banker close to the deal agreed,
bank clearing rate benchmark for Tier 2 CALCULATINGûTHATûTHEûlNALûSPREADûOFû'ILTSûPLUSû
notes in November with a A$400m 10.5-year STERLING BPûWASûEQUIVALENTûTOû3ONIAûPLUSûBPû
non-call 5.5-year wholesale print. “From our point of view, three-year
BAYERNLB LANDS UPSIZED STERLING Canadian or Aussie paper fair value is 22bp–
COVERED REFI 23bp, so I think this is a negative concession
here by a basis point or so,” he said.
BAYERISCHE LANDESBANK made a well-received The bond, like the deal it replaced, was
COVERED BONDS return to the sterling covered bond market issued to match BayernLB’s sterling-
on Friday with a £300m three-year public denominated assets.
sector Pfandbrief, with strong demand Some bankers predicted BayernLB’s deal
EUROS allowing it to increase the size of the deal will be the last FIG issuance of 2021,
and price inside the level it could have although others were hesitant to rule out
BNS CROSSES FINISH LINE WITH LARGEST ACHIEVEDûWITHûANûEQUIVALENTû3ONIA LINKEDû further covered bond supply.
EURO COVERED OF 2021 transaction. “There’s probably a window [for more
4HEûDEALûWASû"AYERN,"SûlRSTûFORAYûINTOû covered issuance] at the start of next week,
Wednesday saw yet another Canadian credit the sterling covered bond market since but it doesn’t seem like anyone is rushing to
in pre-funding mode, with BANK OF NOVA January 2017, when it sold a £250m deal grab it,” said the syndicate banker.
SCOTIA printing a €1.75bn six-year mortgage- that matures on December 20. “If someone had wanted to do something,
backed deal, the largest euro covered bond “The whole thesis was [BayernLB] had that they might have done it by now, and
issue since April 2020. bond coming up to maturity on December obviously there are central bank meetings
“They’ve done the largest US dollar 20 and saw an opportunity,” said a banker next week, starting from Wednesday.”
[covered] ever in October and now the close to the deal. “The issuer avoided pre- A second syndicate banker said investors,
largest euro [covered] of the year – it’s funding to not pay the carry and has now SPECIlCALLYûCENTRALûBANKSûAREûSTILLûhHUNTINGû
phenomenal for Scotia. Overall, it’s a very match-funded and match-settled and were us down” for opportunities to put their
pleasing result that rounds up their funding able to upsize the deal.” MONEYûTOûWORKûINûPARTICULARûINûTHEûlVE YEARû
very well,” one lead manager said. The new public sector Pfandbrief was part of the curve in euros.
A banker away from the trade said the marketed with initial guidance of the Gilts plus
deal was of notable size, adding that an 72bp area and indicated at £250m (no-grow). CIBC BEATS JANUARY RUSH WITH
ORDERûBOOKûOFûMOREûTHANûõBNûWASûEQUALLYû The spread was set at 68bp on £545m of CHUNKY COVERED
impressive considering how late in the year orders, before the size was increased to
it came. £300m as the order book grew to £785m. CANADIAN IMPERIAL BANK OF COMMERCE achieved
Commerzbank, HSBC, ING, Natixis and Credit Suisse was sole bookrunner and size in the sterling covered space on
Scotiabank opened books at mid-swaps plus BayernLB was joint lead manager.
10bp area for the December 2027 “Demand was overwhelming, and given ALL COVERED BONDS (ALL CURRENCIES)
benchmark. Fair value was estimated at plus the allocations and given the number of BOOKRUNNERS: 1/1/2021 TO DATE
5bp. new sterling investors for the issuer, we Managing No of Total Share
“The six-year tenor clearly didn’t hurt,” wanted to make sure we looked after them bank or group issues US$(m) (%)
the banker away from the deal said. “It was and gave them bonds,” said the banker close 1 HSBC 43 10,881.38 7.2
offering a positive yield to investors at IPTs, to the deal. 2 Commerzbank 45 7,836.90 5.2
but that has been somewhat wiped out by a Those away from the deal said it went 3 Natixis 37 6,595.56 4.4
combination of mid-swaps levels reducing well. “It’s a good trade,” said a syndicate 4 UBS 32 6,553.85 4.3
this morning as well as the spread move.” banker. “It’s taking advantage of a late but 5 NatWest Markets 30 6,379.88 4.2
The leads were able to land the bond at plus very strong window for sterling, particularly 6 Credit Suisse 26 6,250.29 4.1
6bp. for well-rated and short-dated [bonds], a safe 7 Barclays 36 6,079.12 4.0
“I think BNS were smart to be moving bid into the end of the year.” 8 UniCredit 40 5,885.58 3.9
forward in December rather than taking 9 BNP Paribas 29 5,831.83 3.9
their chances in January alongside a dozen FIRST SINCE JULY 10 LBBW 37 5,740.74 3.8
sovereign transactions and a load of The last German Pfandbrief issuer to target the Total 184 150,813.89
agencies all targeting euros – electing to currency was Muenchener Hypothekenbank, Source: Refinitiv SDC code: J15a

30 International Financing Review December 11 2021

 BONDS HIGH-YIELD

Tuesday, seizing the earliest available post- “For CIBC to get £1bn done is testament
earnings window and beating the January to the fact that people are looking for
rush to execute a £1bn four-year Sonia- defensive short-dated assets, and HIGH-YIELD
linked covered bond. SOMETHINGûINûmOATING RATEûFORMûATûTHISûSORTû
“A successful transaction despite it being of spread is appealing. We saw no real
QUITEûLATEûINûTHEûYEARvûONEûLEADûMANAGERû attrition on the 2bp move – in fact, orders UNITED STATES
said. “Generally at this time of year, we start picked up a little bit, as folks were pleased
seeing a number of investors pulling back, WITHûTHEûDElNITIONûAROUNDûTHATûSPREADvû SKILLZ BRINGS MOBILE GAMING
but this was one of the few opportunities to the second lead said. PLATFORM TO JUNK MARKET
buy Sonia in recent months, from a “All-in-all, this is a very good
renowned issuer.” demonstration that the sterling market, Mobile gaming platform SKILLZ is looking to
4HEûTRADEûWASûTHEûlRSTû#ANADIANûCOVEREDû DESPITEûHAVINGûITSûOWNûCASHmOWûQUIRKSûANDû price a debut junk bond issue this week,
in sterling since October. CIBC itself last technicalities on occasion, is a very viable testing investor appetite for a fast-growing
visited the space in June with a £1.25bn June new issue product, particularly at this time gaming platform that is burning cash to
2026 covered FRN that came at 28bp over of the December calendar,” he said. grow revenues.
Sonia. With Canadian issuers having a lot of Skillz, which merged in a US$3.5bn deal
CIBC, NatWest Markets, Nomura and RBC funding to do for 2022, market participants WITHûSPECIALûPURPOSEûACQUISITIONûCOMPANYû
opened books at Sonia plus the 30bp area for expect further supply to come out of this &LYINGû%AGLEû!CQUISITIONû#ORPORATIONûINû
the December 2025 benchmark and landed jurisdiction soon. December 2020, operates a multiplayer
at plus 28bp on the back of demand over “I’m sure we will see Canadian banks video game competition platform that
£1.25bn by the time they closed. continue to be active across all of the allows players to compete across the world
Bankers close to the trade gauged the new covered markets, including sterling. CIBC on Apple and Android mobile games. It is
issue concession within a 0bp–2bp range did a good job of being pretty nimble, LOOKINGûTOûISSUEû53MûOFûlVE YEARûNON
ANDûSAIDûITûATTRACTEDûHIGH QUALITYûACCOUNTS enough to get themselves ahead of the pack CALLûTWOûlRSTûLIENûSECUREDûNOTESûFORûGENERALû
A second lead manager said the four-year in December rather than in January when corporate purposes.
tenor played a key role in the deal’s they may be up against more in the way of The company held a non-deal roadshow
outcome, noting that RBC was only able to other Triple A supply from sovereigns, several weeks ago, according to a portfolio
SECUREûAûaMûSIZEûTHROUGHûAûlVE YEARû agencies and the like,” the second lead manager. It held an investor call last
covered bond in October. manager said. Thursday and expects to price the bonds this
Wednesday via Citigroup (lead left), Goldman
ALL US$ DENOMINATED HIGH-YIELD BONDS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS Sachs, Bank of America, Jefferies, RBC and Silicon
BOOKRUNNERS – 1/1/2021 TO DATE 1/1/2021 TO DATE Valley Bank. S&P assigned a B– rating to the
Managing No of Total Share Managing No of Total Share company and secured bond offering.
bank or group issues US$(m) (%) bank or group issues €(m) (%) Skillz is the latest debut borrower to try to
1 JP Morgan 395 52,264.19 10.5 1 Goldman Sachs 96 8,939.82 7.3
raise cash in the junk bond market despite
2 Bank of America 367 43,441.37 8.8 2 Barclays 74 8,827.84 7.2 NOTûYETûGENERATINGûANYûPROlTûORûFREEû
3 Goldman Sachs 242 28,618.14 5.8 3 JP Morgan 89 8,730.71 7.1 CASHmOWûTHOUGHûINVESTORSûHAVEûBEENû
4 Citigroup 256 28,238.71 5.7 4 Deutsche Bank 84 7,912.38 6.4 willing to overlook this in cases such as Tesla
5 Wells Fargo 232 26,089.39 5.3 5 BNP Paribas 94 7,685.44 6.3 ANDû.ETmIXûINûRECENTûYEARS
6 Barclays 238 26,059.44 5.2 6 Bank of America 59 7,273.55 5.9 “No earnings, no Ebitda – it’s going to be
7 Deutsche Bank 225 24,695.26 5.0 7 HSBC 72 6,928.07 5.6 tough,” said the portfolio manager.
8 Morgan Stanley 181 23,519.76 4.7 8 Morgan Stanley 51 5,232.70 4.3
9 Credit Suisse 221 22,286.39 4.5 9 Credit Suisse 62 4,861.03 4.0 PROFIT SHARE
10 RBC 172 18,588.59 3.7 10 Credit Agricole 66 4,726.57 3.8 Skillz generates revenues by receiving a
Total 754 496,392.26 Total 223 122,931.85 percentage of player entry fees in paid
Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt.
competitions, after deducting user prize
Source: Refinitiv SDC code: B5 Source: Refinitiv SDC code: B6 MONEYûANDûTHEûPROlTûSHAREûPAIDûTOû
developers. Revenues have soared in the
ALL ASIAN HIGH-YIELD ISSUERS ALL EUROPEAN HIGH-YIELD ISSUERS past three years, reaching US$230m in 2020
1/1/2021 TO DATE 1/1/2021 TO DATE up from US$50.8m in 2018.
Managing No of Total Share Managing No of Total Share However, expansion has come at a steep
bank or group issues US$(m) (%) bank or group issues US$(m) (%) cost. The company generated net losses of
1 JP Morgan 113 14,722.88 8.1 US$145.5m in 2020, up from losses of
1 HSBC 59 3,616.37 7.1
2 Barclays 86 12,585.59 6.9 US$23.6m in 2019. Adjusted Ebitda was
2 Deutsche Bank 61 3,537.67 6.9
3 JP Morgan 28 2,849.32 5.6 3 Goldman Sachs 106 12,490.94 6.9 negative US$18.5m in 2018, which dropped
4 Credit Suisse 54 2,616.49 5.1 4 Bank of America 67 11,452.09 6.3 to negative US$66m in 2020.
5 Citic 68 2,515.19 4.9 5 BNP Paribas 104 11,282.65 6.2 S&P said it expects Skillz’s Ebitda and free
6 Citigroup 22 2,292.47 4.5 6 Deutsche Bank 87 10,749.07 5.9 CASHmOWûTOûREMAINûNEGATIVEûFORûATûLEASTûTHEû
7 Guotai Junan Secs 77 2,239.34 4.4 7 Morgan Stanley 59 8,031.49 4.4 next two years due to high customer
8 Haitong Secs 73 2,032.19 4.0 8 HSBC 73 7,972.63 4.4 ACQUISITIONûCOSTS
9 UBS 54 1,709.91 3.4 9 Credit Suisse 71 7,954.29 4.4 In contrast to traditional gaming
10 Bank of America 21 1,689.43 3.3 10 Citigroup 65 6,912.78 3.8 companies such as Activision Blizzard,
Total 151 51,031.88 Total 250 181,598.11 Electronic Arts (EA), Playtika, and Zynga,
Excluding equity-related debt. Excluding equity-related debt. which make money from in-app purchases
Source: Refinitiv SDC code: B06d Source: Refinitiv SDC code: B06c and advertising, Skillz looks to make money

International Financing Review December 11 2021 31

by advertising games produced by remain challenged by its natural gas lenders from February 2023 to February
developers in return for a higher share of WEIGHTEDûPRODUCTIONûPROlLEûABOUTûûOFû 2024.
PROlT expected production) and high reserves In a statement on Tuesday, S&P said it
The company generates most of its concentration.” maintained a negative outlook on the
revenues from just three games, with The bond deal came ahead of an company’s CCC+ rating. While there is
Solitaire Cube, 21 Blitz and Blackout Bingo expected drop in natural gas prices, growing expectation that the company
accounting for 73% of its revenues in the which reached multi-year highs earlier in COULDûOFFERûAûUNIQUEûSOLUTIONûTOûLARGEûANDû
nine months ended September 30 2021, 2021. With mild weather in November, small businesses in a return-to-work
according to marketing materials. the US Energy Information environment, there is still considerable
“The goal is to create a virtuous cycle Administration said on Tuesday that the uncertainty about what decisions companies
where both the developer and the platform natural gas spot price at Henry Hub will take on their real estate footprint.
can grow its user base and the user remains averaged US$5.05 per million British “The adoption rates for all of WeWork’s
engaged with a multitude of games to thermal units (MMBtu), down from the offerings could be highly variable given its
compete in,” said S&P on Thursday. October average of US$5.51/MMBtu but concentration in urban areas,” said S&P.
However, the company’s platform is up from an average of US$3.25/MMBtu in “Gateway urban markets have been subject to
currently below the scale necessary to THEûlRSTûHALFûOFû shifting demographics as residents relocate to
achieve this virtuous cycle, S&P said. The EIA expects spot prices to drop to the suburbs to live and, in some cases, work
3KILLZûHASûNOTûYETûIDENTIlEDûAûSPECIlCû US$4.58/MMBtu from December 2021 FOLLOWINGûTHEûIMPOSITIONûOFûNEWûOFlCEûCAPACITYû
“material single use” for the proceeds but through to February 2022, then generally restrictions and reduction in real estate or due
could end up using the cash for funding decline through 2022, averaging US$3.98/ TOûTHEûPOTENTIALûRISEûOFûSATELLITEûOFlCESûWHICHû
working capital, capital expenditure, MMBtu in 2022 amid rising US natural gas could lead to a sustained decline in the density
operating expenses and expansion through production and slowing growth in LNG OFûCORPORATEûOFlCESûINûSUCHûAREASv
investments in other businesses and exports.
technologies, the marketing materials show. Joint bookrunners on Wednesday’s
In addition to the new junk bonds, the Southwestern bond issue were JP Morgan, EUROPE/MIDDLE EAST/
company intends to obtain additional debt Bank of America, Citigroup, RBC, Wells Fargo, AFRICA
lNANCINGûUNDERûAûNEWûREVOLVINGûCREDITû Mizuho, MUFG, PNC, Regions and Truist.
facility, which, if established, would be T-MOBILE NETHERLANDS FINALLY LANDS
secured by liens that have priority over the SOFTBANK OFFLOADS WEWORK BONDS BUYOUT BOND
new bonds.
3OFT"ANKûOFmOADEDû53MûOFûWEWORK T-MOBILE NETHERLANDS got the bond
SOUTHWESTERN ENERGY FUELS bonds in a secondary sale last week, after COMPONENTûOFûITSûlNANCINGûBACKINGûITSû
EXPANSION the co-working company struck a deal with BUYOUTûBYûPRIVATEûEQUITYûHOUSESû!PAXûANDû
SoftBank and a syndicate of lenders to Warburg Pincus across the line last week,
Natural gas exploration and production extend its credit facility for an additional vindicating leads’ decision to get the deal
company SOUTHWESTERN ENERGY COMPANY raised year. done before year-end.
US$1.15bn in the junk bond market on The notes for sale were originally part of a The telecoms company (B2/B) approached
7EDNESDAYûTOûHELPûFUNDûITSûACQUISITIONûOFû US$2.2bn package of 5% 2025 senior secured investors last Tuesday with a €1.35bn high-
GEP Haynesville and a tender offer for notes issued to StarBright WW LP, a yield bond issue, split into a €800m
existing debt. 3OFT"ANKûAFlLIATEûINû*ULYûû!SûPARTûOFû seven-year non-call three senior secured
4HEû YEARûNON CALLûlVEûSENIORûNOTEûISSUEû this transaction, SoftBank will split the tranche (B1/B) and €550m in eight-year non-
was priced at 4.75%, after bookrunners US$2.2bn notes into US$550m of “Series II” call three senior unsecured notes (Caa1/
tightened levels from initial price thoughts notes that were sold last week, and CCC+). Leads made the decision to pull the
of 5%–5.25% and price talk of 4.75%–5%. The designated the remaining US$1.65bn bonds trigger on the deal amid easing anxiety over
bonds were offered alongside a US$550m as “Series I” notes, according to marketing the Omicron variant of Covid-19.
term loan B to fund the US$1.325bn cash materials. “Launching into a market that hasn’t seen
consideration of the purchase and the Joint bookrunners JP Morgan, Goldman a bond in a week and a half is not an easy
US$300m tender offer for its 2025 and 2027 Sachs, Mizuho, Deutsche Bank and Citigroup decision but there’s so much uncertainty for
notes. priced the bonds on Thursday at 85.989 January 2022 that it felt like the right one,”
The new 2032 bonds will be the longest cents on the dollar to yield 9.75%. Initial said a banker familiar with the deal.
dated in the company’s capital structure. price thoughts had been for a yield of 9.875% Prior to Tuesday’s announcement,
The closest comparable is Southwestern’s which was tightened to talk of 9.625%– Europe’s high-yield bond market had not
5.375% 2030 senior note issue that was 9.875%. seen a deal launched since November 24 as
trading at a yield around 4.2% on Tuesday, WeWork’s existing CCC+/CCC– rated borrowers ran scared of Omicron, a new and
according to MarketAxess. 7.875% 2025 bonds were trading at a cash more infectious variant of Covid-19. But
Southwestern, rated Ba3/BB/BB, bolstered price of 96.125 to yield around 9.2% on screens turned green last week thanks in
its footprint in the Haynesville region with Monday before the secondary sale was PARTûTOûNEWSûTHATûTHREEûDOSESûOFûTHEû0lZERû
THEûACQUISITIONûOFû'%0ûWHICHûFOLLOWEDûTHEû announced, according to MarketAxess. and BioNTech vaccine should be effective
US$2.7bn merger with Indigo Natural WeWork will not receive any proceeds against the Omicron strain of Covid-19.
Resources in September. from the secondary note sale. The company And with no other deals in last week’s
h4HEûACQUISITIONSûOFû'%0ûANDû)NDIGOûAREû closed a merger with SPAC BowX in October European high-yield bond market, all eyes
favourable as they add higher margin that gave the company total gross cash were on T-Mobile Netherlands.
production and provide basin proceeds of US$1.283bn. On Monday, Price talk on the senior secured notes was
DIVERSIlCATIONvûSAIDû-OODYSûONû WeWork said it had extended its credit at 3.875% area, while on the senior
Wednesday. “However, Southwestern will facility with SoftBank and a syndicate of unsecured notes it came at 5.5%–5.75%.

32 International Financing Review December 11 2021

 STRUCTURED FINANCE

“I can get comfortable on a senior secured another Irish NPL RMBS, EUROPEAN RESIDENTIAL Initial price thoughts for the X (€2m), A
LEVELûBUTûGIVENûHOWûTHINûTHEûEQUITYûCUSHIONû LOAN SECURITISATION 2021-NPL1. õ û" õM ûlXEDûRATEû" ûõM û
is, you really need to get paid to own the The issuer is LSF11 BOSON INVESTMENTS S.A R.L., C (€31.75m), D (€35.75m) and E (€30.25m)
subs,” said one investor on the pricing acting on behalf of Compartment 2, with notes were: plus 50bp area, 96bp area,
differential, noting that the two sponsors Hudson Advisors Spain acting as asset manager 175bp–180bp, 2.1%–2.2%, 240bp–250bp,
HAVEûONLYûPUTûAûTOTALûEQUITYûCHEQUEûOFû and back-up administrator facilitator. 260bp–370bp and 660bp–675bp.
€1.1bn into the deal. The servicer is Servihabitat Servicios The F note’s status was subject. The deal
A second investor put the differential Inmobiliarios, while the retention holder is emerged on Friday with the following levels:
down to the company’s outstanding loans Lone Star Capital Investments. 45bp, 96bp, 170bp, 2.2%, 365bp 647bp (98 price)
providing an anchor for pricing on the The A/A low rated A1 (€200m) and the A/BBB and 820bp for the F, with no price published.
unsecureds. high rated A2 (€20m) notes were both pre- The reinvestment period ends in January
Pricing was eventually set at 3.75% and placed at discount margins of three-month 2027; the non-call ends in January 2024
5.5%. Euribor plus 200bp (97.27 and 92.3 price) while WHILEûTHEûLEGALûlNALûISûINû*ANUARYûû
The high-yield bond issue’s execution was the rest of the capital structure was retained. Elsewhere, MEDIRECT BANK (MALTA), now
made simpler by the fact that the loan The €12m B, €16m C, €2m P and €376.8m operating under the FIL INVESTMENTS INTERNATIONAL
COMPONENTûOFûTHEûlNANCINGûHADûALREADYû D notes have margins of plus 300bp, plus brand gave noteholders notice of a planned
been placed, said bankers familiar with the 400bp N.A. and plus 500bp. Lone Star will RElNANCEûEXERCISEûFORûITSûGRAND HARBOUR CLO 2019-1.
deal. retain the Class D notes. Subordinated noteholders are exploring a
T-Mobile Netherlands was forced to split RElNANCINGûINûWHOLEûOFûTHEûRATEDûNOTES
the execution of the loan and bond
COMPONENTSûOFûITSûlNANCINGûPACKAGEûINû EMEA CLO
November after the company’s numbers US MBS
were not ready in time to be included in the CLO PRIMARY FINALLY SLOWS
offering memorandum for the high-yield FANNIE GREEN CMBS PROGRAMME HITS
bond component of the take-out. 4HEû#,/ûPRIMARYûMARKETûlNALLYûSLOWEDûLASTû MILESTONE
Leads landed a €2.4bn seven-year term week with the most notable development
loan B in November, which saw good coming from PGIM LOAN ORIGINATOR MANAGER Fannie Mae has reached US$100bn in green
demand and was upsized from €2bn. The which priced a reset of its €503.35m DRYDEN multi-family mortgage securitisation since it
seven-year TLB was priced at 400bp over 79 EURO CLO 2020 via arranger, Credit Suisse. launched this programme a decade ago.
%URIBORûWITHûAûûmOORûATûPAR
ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS
“The fact that there’s a loan out there
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
meant that the bond was essentially pre-
Managing No of Total Share Managing No of Total Share
marketed,” said a second banker familiar
bank or group issues US$(m) (%) bank or group issues €(m) (%)
with the deal. “That allowed leads to have a
1 BNP Paribas 36 11,586.05 17.2 1 BNP Paribas 22 7,078.12 19.2
very accurate read for the market for this
2 Bank of America 22 6,222.57 9.2 2 Societe Generale 13 5,045.76 13.7
transaction.”
3 Societe Generale 15 6,151.63 9.1 3 Santander 9 2,957.26 8.0
Bond buyers said they liked the TMT
4 Citigroup 25 6,029.41 8.9 4 Credit Agricole 7 2,211.45 6.0
sector as a Covid-19 hedge, but voiced
5 Santander 15 4,530.46 6.7 5 Deutsche Bank 9 2,027.96 5.5
concerns about the company’s initial net
6 Morgan Stanley 9 2,844.55 4.2 6 Citigroup 8 1,917.47 5.2
leverage, which will sit at almost 6x, and the
7 Deutsche Bank 11 2,714.63 4.0 7 Bank of America 8 1,857.80 5.0
deal’s covenant package.
8 Barclays 15 2,641.75 3.9 8 Morgan Stanley 5 1,665.31 4.5
“The covenants are ridiculously
9 Credit Agricole 7 2,605.49 3.9 9 ING 6 1,612.01 4.4
AGGRESSIVEvûSAIDûTHEûlRSTûINVESTOR
10 Lloyds Bank 9 2,250.34 3.3 10 UniCredit 6 1,585.73 4.3
#REDITûRESEARCHûlRMû#OVENANTû2EVIEWû
Total 122 67,463.80 Total 70 36,893.06
called the deal’s debt covenant
Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, credit-linked notes (Euro, foreign, global and
“extraordinarily permissive”. domestics) and excludes CDOs. domestics) and excludes CDOs.
h%NORMOUSûlXEDûBASKETSûANDûAûLONGû Source: Refinitiv SDC code: B16n Source: Refinitiv SDC code: B16g
laundry list of uncapped baskets will permit
an eye-watering amount of incremental GLOBAL SECURITISATIONS IN STERLING SECURITISATIONS – ALL EUROPEAN RMBS
debt,” wrote analysts. BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
Managing No of Total Share Managing No of Total Share
bank or group issues £(m) (%) bank or group issues €(m) (%)

1 Bank of America 14 2,856.90 17.3 1 Citigroup 15 3,329.18 16.1

2 BNP Paribas 17 2,780.26 13.4
STRUCTURED FINANCE
2 Citigroup 17 2,632.18 16.0
3 BNP Paribas 14 2,273.78 13.8 3 Lloyds Bank 7 1,595.52 7.7
4 Lloyds Bank 8 1,134.27 6.9 4 Barclays 10 1,534.78 7.4
5 NAB 8 1,133.86 6.9 5 Bank of America 7 1,400.84 6.8
EMEA MBS 6 Barclays 8 1,001.26 6.1 6 NAB 8 1,312.40 6.3
7 JP Morgan 4 787.67 4.8 7 Morgan Stanley 4 1,283.48 6.2
ERLS 2021-NPL1 PRE-PLACES LATEST 8 Santander 6 725.36 4.4 8 Natixis 6 842.55 4.1
NPL TRADE 9 StanChart 7 684.54 4.2 9 ABN AMRO 3 656.96 3.2
10 Morgan Stanley 4 642.74 3.9 10 HSBC 5 647.16 3.1
Issuers continued to opt for pre-placement Total 51 16,492.54 Total 49 20,733.48
execution strategies in the face of choppy Including Euro, foreign, global and domestics, excluding CDOs. Including Euro, foreign, global and domestics, excluding CDOs
market conditions. Morgan Stanley brought Source: Refinitiv SDC code: B16i Source: Refinitiv SDC code: B10a

International Financing Review December 11 2021 33

 4HEûBIGGESTû53ûMORTGAGEûlNANCEûAGENCYû “The multi-family business is strong. The US$1.37bn offering, COLOGIX SERIES 2021-1,
said last Wednesday it has issued US$12.7bn We think that trend will continue well comes after the record-sized US$2.1bn issue from
in green CMBS as of November this year, into 2022,” she said. rival Flexential that was priced in November.
compared with US$13bn for all of 2020. In addition to green funding for The Cologix transaction features four
$URINGûTHEûlRSTûYEARûOFûTHEûPROGRAMMEûINû apartments, Fannie Mae launched in April tranches: US$100m of A-1 variable funding
2012, it issued US$55.7m in green multi- 2020 a green MBS programme for new notes; a US$845m A-2 class; a US$127m B
family bonds. single-family homes with green building note tranche and US$64.5m of C paper,
“Fannie Mae’s Multifamily green CERTIlCATIONSûTHATûMEETûORûEXCEEDûTHEû ACCORDINGûTOû+ROLLû4HEûRATINGûAGENCYûISû
lNANCINGûHASûHELPEDûPRESERVEûANDûIMPROVEû NATIONALûPROGRAMMEûREQUIREMENTSûFORû expected to assign A– ratings for A-1 and
existing housing stock, supporting our %NERGYû3TARûû#ERTIlEDû(OMESû!TûTHEûENDû A-2; BBB– for B and BB– for C.
efforts to bolster the nation’s supply of of November, Fannie has issued 44 green Cologix, which is majority-owned by
housing affordable to low- and moderate- deals for new single-family homes, totalling PRIVATEûEQUITYûlRMû3TONEPEAKû)NFRASTRUCTUREû
income households,” Michele Evans, Fannie US$486m. Partners, and other data centre companies
Mae’s executive vice-president of multi- have been growing even during a pandemic
family said in a statement. because of rising data usage.
Fannie will probably issue US$10bn– US ABS Deutsche Bank is the sole structurer and
$15bn in green multi-family bonds in 2022, JOINTûBOOKRUNNERû+ROLLûSAIDû4HEûBANKûCOULDû
Lisa Bozzelli, Fannie Mae’s senior director of COLOGIX PREPS DATA CENTRE ABS DEBUT not immediately be reached for comment.
multi-family, told IFR. Co-location service providers such as
Fannie’s overall funding activity is Data centre operator COLOGIX is preparing to Cologix, DataBank and Flexential lease to
keeping pace with the continued ISSUEûITSûlRST EVERûSECURITISATIONûSECUREDûBYû many smaller customers that may only need
strong apartment demand since the CASHmOWSûFROMûûFACILITIESûPROMPTEDûBYû a shelf, an individual rack or private cage at
pandemic. Rents have risen at an growing investor demand for this type of their data centres under short-term
average 9% clip in 2021, Evans told IFR. digital asset. contracts.

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 10/12/2021

Issuer Amount (m) WAL DM Bookrunner(s) Rating Asset type
Acres 2021-Fl2 US$385 4.56 1mUSL+140bp JP Morgan/Barclays/Morgan Stanley Aaa/NR/NR CMBS
Acres 2021-Fl2 US$30.625 4.80 1mUSL+175bp JP Morgan/Barclays/Morgan Stanley NR/NR/NR CMBS
Acres 2021-Fl2 US$38.5 4.84 1mUSL+225bp JP Morgan/Barclays/Morgan Stanley NR/NR/NR CMBS
Acres 2021-Fl2 US$47.25 4.90 1mUSL+310bp JP Morgan/Barclays/Morgan Stanley NR/NR/NR CMBS
Acres 2021-Fl2 US$51.625 4.98 1mUSL+310bp JP Morgan/Barclays/Morgan Stanley NR/NR/NR CMBS
Acres 2021-Fl2 US$14 4.98 1mUSL+400bp JP Morgan/Barclays/Morgan Stanley NR/NR/NR CMBS
BINOM 2021-INV1 US$152.484 2.59 IntS+97bp Credit Suisse NR/AAA/NR RMBS
BINOM 2021-INV1 US$15.668 2.59 IntS+130bp Credit Suisse NR/AA/NR RMBS
BINOM 2021-INV1 US$27.136 2.59 IntS+155bp Credit Suisse NR/A/NR RMBS
BINOM 2021-INV1 US$12.942 5.03 IntS+210bp Credit Suisse NR/BBB/NR RMBS
BMARK 2021-B31 US$19.800 2.68 USL+25bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/AAA/AAA CMBS
BMARK 2021-B31 US$138.050 4.90 USL+55bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/AAA/AAA CMBS
BMARK 2021-B31 US$23.220 6.90 USL+73bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/AAA/AAA CMBS
BMARK 2021-B31 US$215.000 9.80 USL+71bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/AAA/AAA CMBS
BMARK 2021-B31 US$575.676 9.94 USL+73bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/AAA/AAA CMBS
BMARK 2021-B31 US$23.526 7.36 USL+65bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/AAA/AAA CMBS
BMARK 2021-B31 US$142.182 9.98 USL+95bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/AA-/AAA CMBS
BMARK 2021-B31 US$63.981 9.98 USL+115bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/NR/AA- CMBS
BMARK 2021-B31 US$60.428 9.98 USL+160bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/NR/A- CMBS
BMARK 2021-B31 US$37.322 9.98 USL+260bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/NR/BBB CMBS
BMARK 2021-B31 US26.659 9.98 USL+375bp Citigroup/JP Morgan/Deutsche Bank/Goldman Sachs NR/NR/BBB- CMBS
BSPRT 2021-FL7 US$508.500 2.79 USL+132bp Wells Fargo/Barclays Aaa/NR/NR CMBS
BSPRT 2021-FL7 US$13.500 3.55 USL+165bp Wells Fargo/Barclays Aaa/NR/NR CMBS
BSPRT 2021-FL7 US$52.875 4.32 USL+205bp Wells Fargo/Barclays Aaa/NR/NR CMBS
BSPRT 2021-FL7 US$66.375 4.39 USL+230bp Wells Fargo/Barclays Aaa/NR/NR CMBS
BSPRT 2021-FL7 US$67.500 4.64 USL+275bp Wells Fargo/Barclays Aaa/NR/NR CMBS
BSPRT 2021-FL7 US$13.500 4.73 USL+340bp Wells Fargo/Barclays Aaa/NR/NR CMBS
CRVNA 2021-N4 US$163.932 0.86 EDSF+45bp BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/AAA/NR ABS
CRVNA 2021-N4 US$60.686 3.49 IntS+62bp BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/AAA/NR ABS
CRVNA 2021-N4 US$52.44 1.39 EDSF+62bp BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/AA/NR ABS
CRVNA 2021-N4 US$52.877 2.06 IntS+85bp BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/A/NR ABS
CRVNA 2021-N4 US$53.751 2.77 IntS+125bp BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/BBB/NR ABS
CRVNA 2021-N4 US$53.314 3.82 IntS+335bp BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/BB/NR ABS
CRVNA 2021-N4 US$20.102 0.63 EDSF+270bp BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/BB/NR ABS
CRVNA 2021-N4 US$28.718 - 9% yld BNP Paribas/Citigroup/Wells Fargo/CS/DB NR/NR/NR ABS

34 International Financing Review December 11 2021

 STRUCTURED FINANCE

While the asset class is still relatively new, LEASESû+ROLLûSAIDû#OLOGIXSûCUSTOMERûCHURNû SMBC Nikko was sole arranger for the
deals from this kind of data centre provider or turnover rate has averaged 0.8% since Japanese yen tranche and joint lead
have tended to be priced with higher yields 2018, which is below the industry’s average manager with NAB.
than those from wholesale, or hyper-scale, of 1%. The ¥16bn (US$140m) Class A1 notes
data centres where companies rent a large The emergence of co-location issuers has with a four-year weighted-average life and
part or even the entire facility under long- bolstered data centre ABS supply this year. It 10% credit support priced at one-month
term leases. has totalled US$5.5bn so far this year, which yen TONA plus 35bp.
“What you are seeing in the data centre has far surpassed the US$2.4bn total for all The senior A$700m Class A2 notes with
space is that there is a clear differentiation of 2020, according to IFR. a two-year WAL priced 85bp wide of one-
between deals backed by longer-term month BBSW.
CONTRACTSûWITHûREALûHIGH QUALITYûTENANTSûONû The A$65.9m of Class A3, A$14.8m of
the hyper-scale side and those backed by co- ASIA-PACIFIC MBS Class B, A$10.9m of Class C, A$3.9m of
location data centres, which are emerging a Class D, A$2.2m of Class E and A$1.2m of
tier behind,” an ABS banker away from the RESIMAC TAPS JAPANESE DEMAND Class F notes, all with 3.8-year WALs,
deal said. priced 110bp, 130bp, 140bp, 235bp,
The weighted average remaining term of Non-bank lender RESIMAC raised A$1bn 450bp and 600bp over one-month BBSW.
contracts in the Cologix transaction, which 53M ûEQUIVALENTûFROMûTHEûDUAL Respective support for the Class A2 to F
covers 1,064 customers, is 1.5 years. This currency RESIMAC PREMIER SERIES 2021-3 RMBS notes is 10%, 3.41%, 1.93%, 0.84%, 0.45%,
compared with 9.0 years on a US$530m nûTHEûlRSTû2-"3ûBACKEDûBYû!USTRALIANû 0.23% and 0.11%.
wholesale data centre offering in October mortgages this year to include a yen The transaction was completed by
from Vantage Data Centers backed by leases tranche. A$1.1m of Class G notes.
to 14 tenants. NAB and SMBC Nikko were arrangers for There were three such trades last year,
While short-term contracts carry greater the Australian dollar notes and lead including the Resimac Premier Series
risks if customers do not to renew their managers with Standard Chartered Bank. 2020-3 in December. This followed the

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 10/12/2021 (CONTINUED)

Issuer Amount (m) WAL DM Bookrunner(s) Rating Asset type
ERLS 2021-NPL1 €200 2.23 3mE+200bp Morgan Stanley NR/A/NR RMBS
ERLS 2021-NPL1 €20 2.96 3mE+200bp Morgan Stanley NR/A/NR RMBS
GCAT 2021-NQM7 US$213.216 1.96 EDSF+95bp Credit Suisse NR/AAA/NR RMBS
GCAT 2021-NQM7 US$12.558 4.01 IntS+135bp Credit Suisse NR/AA/NR RMBS
GCAT 2021-NQM7 US$14.672 4.01 IntS+155bp Credit Suisse NR/A/NR RMBS
GCAT 2021-NQM7 US$9.121 4.01 IntS+200bp Credit Suisse NR/BBB/NR RMBS
GCAT 2021-NQM7 US$6.874 4.01 IntS+315bp Credit Suisse NR/BB/NR RMBS
FREMF 2021-KSG2 US$51.300 6.65 S+16bp JP Morgan/Citigroup NR/NR/NR CMBS
FREMF 2021-KSG2 US$575.408 9.81 S+30bp JP Morgan/Citigroup NR/NR/NR CMBS
FREMF 2021-KSG2 US$626.708 9.29 T+140bp JP Morgan/Citigroup NR/NR/NR CMBS
FREMF 2021-KSG2 US$32.985 9.69 T+320bp JP Morgan/Citigroup NR/NR/NR CMBS
Freddie Mac Spc Series K-F126 US$759.622 9.58 SOFR+24bp Morgan Stanley/PNC CM NR/NR/NR CMBS
Freddie Mac Spc Series K-J36 US$37.44 3.93 SOFR+24bp Morgan Stanley/Wells Fargo NR/NR/NR CMBS
Freddie Mac Spc Series K-J36 US$177.683 7.56 SOFR+54bp Morgan Stanley/Wells Fargo NR/NR/NR CMBS
Freddie Mac WI-K748 US$175 7.28 IntN+27bp Barclays/Goldman Sachs NR/NR/NR CMBS
SEMT 2021-9 US$252.98 4.99 2-00 bk UMBS 2.5% Wells Fargo NR/NR/AAA RMBS
SEMT 2021-9 US$103 2.81 2-10 bk DW 2.5% Wells Fargo NR/NR/AAA RMBS
SEMT 2021-9 US$32 2.81 2-06 bk DW 2.0% Wells Fargo NR/NR/AAA RMBS
SEMT 2021-9 US$45 11.52 ISwaps+100bp Wells Fargo NR/NR/AAA RMBS
SEMT 2021-9 US$56.053 4.99 3-00 bk UMBS 2.5% Wells Fargo NR/NR/AAA RMBS
STACR 2021-HQA4 US$445 2.55 1mSOFR+95bp Barclays/BofA Baa3/NR/NR RMBS
STACR 2021-HQA4 US$222 5.04 1mSOFR+235bp Barclays/BofA Ba3/NR/NR RMBS
STACR 2021-HQA4 US$148 5.04 1mSOFR+375bp Barclays/BofA NR/NR/NR RMBS
STACR 2021-HQA4 US$148 5.04 1mSOFR+700bp Barclays/BofA NR/NR/NR RMBS
VALET 2021-1 US$324.5 0.14 IntL+3bp Wells Fargo/JP Morgan/Santander/TD Securities P1/A1+/NR ABS
VALET 2021-1 US$630 0.88 EDSF+8bp Wells Fargo/JP Morgan/Santander/TD Securities Aaa/AAA/NR ABS
VALET 2021-1 US$630 2.18 IntS+7bp Wells Fargo/JP Morgan/Santander/TD Securities Aaa/AAA/NR ABS
VALET 2021-1 US$165.5 3.24 IntS+6bp Wells Fargo/JP Morgan/Santander/TD Securities Aaa/AAA/NR ABS
VCC 2021-4 US$214.925 2.71 IntS+140bp Barclays/Citigroup NR/NR/NR RMBS
VCC 2021-4 US$17.073 3.16 IntS+170bp Barclays/Citigroup NR/NR/NR RMBS
VCC 2021-4 US$14.998 3.74 IntS+205bp Barclays/Citigroup NR/NR/NR RMBS
VCC 2021-4 US$27.125 3.43 IntS+255bp Barclays/Citigroup NR/NR/NR RMBS
VCC 2021-4 US$11.328 4.01 IntS+315bp Barclays/Citigroup NR/NR/NR RMBS
VCC 2021-4 US$6.383 4.74 IntS+430bp Barclays/Citigroup NR/NR/NR RMBS
VCC 2021-4 US$27.284 3.77 7.5% Barclays/Citigroup NR/NR/NR RMBS

International Financing Review December 11 2021 35

A$1bn Liberty Series 2020-1 RMBS in May, plus 130bp, 145bp, 175bp, 270bp, 500bp 2.6-year WALs, priced 125bp, 145bp,
WHICHûINCLUDEDûTHEûlRSTûYENûTRANCHEû and 620bp. 225bp, 415bp and 630bp wide of one-
within an Australian RMBS since 2011, The transaction was completed by month BBSW.
ANDûTHEûSUBSEQUENTû!BNû&IRSTMACû A$2m of Class G 1 and A$2.5m of Class G 2 Respective credit support for the A1-a
2020-3 in October. notes. to F notes is 25.8%, 13.9%, 9.5%, 5.3%, 2.9%
Yen-denominated tranches target Respective credit support for the Class and 1%.
Japanese appetite for Australian A1 to G 1 notes is 25%, 11.6%, 7.1%, 4.5%, The A$8m of Class G notes were
mortgage-backed assets by developing 2.6%, 1.8%, 0.9% and 0.5%. retained, while the total excludes the
new investors who are not yet ready to A$25.25m of Class A1-x notes, which are
buy Australian dollars. repaid senior in the income waterfall in
Previously, RMBS bought by Japanese ASIA-PACIFIC ABS accordance with its controlled
investors were swapped from Australian amortisation schedule. The A1-x notes
dollars into yen, but these new structures PEPPER PARKS AUTO AND EQUIPMENT with a 1.1-year WAL priced at one-month
provide a way to invest directly in yen- ABS BBSW plus 85bp.
denominated notes. Pepper previously sold the no-grow
PEPPER MONEY raised an upsized A$800m !MûAUTOûANDûEQUIPMENTû!"3û
BLUESTONE MAKES NON-CON RETURN FROMûITSûLATESTûAUTOûANDûEQUIPMENTû!"3û offering, Pepper Sparkz 3, in December
offering, PEPPER SPARKZ 4. 2020.
Non-bank mortgage lender BLUESTONE NAB was arranger and joint lead The Sparkz 3 Class A1-a, A1-x, B, C, D, E
accessed the Australian non-conforming manager with Bank of America, MUFG, RBC and F notes priced at one-month BBSW
RMBS market for the 32nd time last Capital Markets, Societe Generale and Westpac plus 105bp, 100bp, 160bp, 190bp, 285bp,
Thursday with the no-grow A$500m for the securitisation, which had an 500bp and 700bp, or 15bp, 15bp, 35bp,
BLUESTONE SAPPHIRE 2021-1 TRUST. indicative minimum size of A$600m. 45bp, 60bp, 85bp and 70bp wider than the
Bluestone, owned by America private The A$593.6m of Class A1-a notes with LATESTûEQUIVALENTûTRANCHESû
EQUITYûlRMû#ERBERUSû#APITALû-ANAGEMENTû a 1.6-year WAL priced in line with This followed the public A$600m
since 2018, entered the prime RMBS guidance at one-month BBSW plus 90bp. Pepper Sparkz Trust No 2 auto ABS in
market in July via the A$700m Bluestone The A$95.2m of Class B, A$35.2m of January 2020 and the privately placed
Prime 2021-1 Trust, which followed on Class C, A$33.6m of Class D, A$19.2m of A$511.6m Reg S master trust Pepper
naturally from a strategic partnership Class E and A$15.2m of Class F notes, with Sparkz Trust No 1 in July 2019.
with Athena Home Loans signed two
US ASSET-BACKED SECURITIES GLOBAL STRUCTURED FINANCE IN US$
months earlier.
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
At the time Bluestone said it was likely
Managing No of Total Share Managing No of Total Share
to issue two or three prime RMBS deals a
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
year as well as an annual non-conforming
1 JP Morgan 143 40,777.12 9.6 1 JP Morgan 290 135,746.35 13.0
RMBS.
2 Wells Fargo 133 34,846.92 8.2 2 Credit Suisse 291 109,274.61 10.5
NAB was arranger and joint lead
3 Barclays 117 34,715.79 8.2 3 Citigroup 247 101,317.14 9.7
manager with CBA and Macquarie Bank for
4 Citigroup 121 31,956.71 7.5 4 Wells Fargo 265 97,067.30 9.3
Thursday’s transaction.
5 Bank of America 109 27,689.98 6.5 5 Goldman Sachs 278 90,851.93 8.7
The A$115m of Class A1S and A$260m
6 Credit Suisse 109 27,521.70 6.5 6 Morgan Stanley 204 83,300.43 8.0
of Class A1L notes with 0.6 and 2.9-year
7 RBC 92 25,828.83 6.1 7 Bank of America 238 78,204.48 7.5
WALs priced 60bp and 105bp wide of one-
8 Goldman Sachs 99 24,606.04 5.8 8 Barclays 211 55,628.89 5.3
month BBSW.
9 Deutsche Bank 106 23,690.01 5.6 9 Deutsche Bank 167 40,495.49 3.9
The A$67m of Class A2, A$22.5m of
10 Morgan Stanley 53 13,932.93 3.3 10 Nomura 106 29,657.06 2.8
Class B, A$13m of Class C, A$9.5m of Class
Total 719 424,468.40 Total 1,649 1,042,805.08
D, A$4m of Class E and A$4.5m of Class F
Excludes MBS. Including securitisations (Euro, foreign, global and domestics, excluding
notes, with 4.2, 4.2, 4.2, 4.2, 3.8 and 1.9- CDOs) and PFI bonds.
year WALs priced at one-month BBSW Source: Refinitiv SDC code: F14 Source: Refinitiv SDC code: B16b

STRUCTURED FINANCE – ALL INTL ISSUERS

GLOBAL CDOs ALL EUROMARKET CDOs
BOOKRUNNERS: 1/1/2021 TO DATE
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
Managing No of Total Share
Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%)
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 Credit Suisse 179 35,641.33 9.1
1 JP Morgan 49 17,895.22 10.7 1 JP Morgan 49 17,827.21 11.6
2 Barclays 145 33,731.74 8.6
2 Barclays 40 14,660.89 8.8 2 Barclays 40 14,660.89 9.5
3 Citigroup 126 33,524.23 8.5
3 Jefferies 37 14,045.93 8.4 3 Jefferies 35 13,656.96 8.9
4 Goldman Sachs 150 33,421.52 8.5
4 Citigroup 36 13,968.86 8.4 4 Goldman Sachs 36 12,525.90 8.1
5 Bank of America 125 30,094.62 7.6
5 Goldman Sachs 37 12,733.19 7.6 5 Morgan Stanley 34 12,249.64 7.9
6 JP Morgan 106 28,041.66 7.1
6 Morgan Stanley 36 12,607.44 7.6 6 Citigroup 31 12,147.20 7.9
7 Deutsche Bank 125 25,386.26 6.4
7 Wells Fargo 37 11,997.11 7.2 7 Natixis 20 10,363.99 6.7
8 Wells Fargo 97 24,452.92 6.2
8 Natixis 20 10,363.99 6.2 8 Bank of America 24 9,532.16 6.2
9 Morgan Stanley 99 21,539.51 5.5
9 Bank of America 24 9,532.16 5.7 9 BNP Paribas 19 8,761.29 5.7
10 BNP Paribas 61 15,443.86 3.9
10 BNP Paribas 19 8,761.29 5.3 10 Credit Suisse 18 7,675.21 5.0
Total 731 393,594.65
Total 355 166,567.61 Total 326 154,132.83
Includes securitisations, PFI bonds, self-funded issues and credit-linked
Including Euro, foreign, global, US domestics. Excludes global and domestic. notes. Excludes US global ABS/MBS and CDOs.
Source: Refinitiv SDC code: B12 Source: Refinitiv SDC code: J11 Source: Refinitiv SDC code: J10c

36 International Financing Review December 11 2021

 STRUCTURED FINANCE

Kiwi RMBS market flies high

„ RMBS Increased deal flow boosts confidence as banks await new instrument

The New Zealand market for residential A1 notes with 40% support and a 2.0-year Banks have no interest in adding public RMBS
mortgage-backed securities has enjoyed, by weighted-average life priced 90bp wide of one- offerings to their wholesale funding tool kits
some distance, its busiest year on record with month BKBM. given the time and extra resources required to
five deals from four non-bank lenders raising a Basecorp’s first RMBS in March, the establish new programmes while they await
combined NZ$1.4bn (US$951m). NZ$250m Basecorp RMBS 2021-1 Trust, was the Reserve Bank’s stalled efforts to boost the
The total includes two new entrants, privately placed with no pricing disclosed. domestic mortgage securitisation market by
BLUESTONE and BASECORP, as their warehousing Bluestone opened its account on December introducing a new instrument.
facilities became large enough to be termed 2 with the NZ$250m BLUESTONE NZ PRIME In November 2017 the RBNZ proposed to
out with sufficient high-quality assets and their 2021-1 TRUST while Resimac sold the NZ$300m replace I-RMBS with residential mortgage
performance histories met the requirements to Resimac Prime Trust Series 2021-1 in September, obligations – a cross between covered bonds
obtain ratings. a month after Avanti Finance printed the and RMBS.
“The New Zealand ABS market spent a longer NZ$350m Avanti RMBS 2021-1. The consultation paper said RMOs would
time than others, including Australia, recovering Before this year, Resimac and Avanti had improve the risk position of the RBNZ by
from the global financial crisis which was been the only Kiwi RMBS issuers since 2010 promoting the use of higher-quality and more
blamed, rightly or wrongly, on the asset class,” with respectively four and three transactions liquid mortgage bonds as collateral in the bank’s
said Simon O’Connell, director of structured previously. lending operations.
finance at Westpac New Zealand, which has Resimac issued NZ$150m, NZ$250m, The proposal drew early criticism from the
been on every New Zealand ABS and RMBS deal NZ$250m and NZ$300m of RMBS in 2014, banks and the two sides continue to argue over
since 2010. 2017, 2019 and 2020 while Avanti raised what the new instrument should look like and
“The buyside is becoming more comfortable NZ$200m, NZ$200m and NZ$250m from its whether it will offer sufficient cost benefits.
with securitisations again, in part reassured first three deals in 2018, 2019 and 2020. In July this year the RBNZ deferred
by the reserve bank’s greater interest in the development of RMOs until after the borrowing
market and a more consistent deal flow which WAITING FOR RMOS window for the Funding for Lending Programme
encourages more investor research, knowing Non-banks, which despite recent growth sell closes in December 2022 because I-RMBS are
that further issues are in the pipeline.” only 2.5% of New Zealand mortgages, dominate the primary source of collateral in exchange for
O’Connell noted that New Zealand’s rapidly RMBS as the country’s four major banks and the term funding provided via the FLP.
expanding retirement investment funds, most Kiwibank continue to use offshore covered bonds “The bank recognises the importance of
notably KiwiSaver, are increasing their exposure and self-securitised or internal RMBS (I-RMBS) a robust mortgage bond collateral standard
to ABS, which provide a better return than other for their mortgage-backed funding needs. in New Zealand and remains committed to
high-quality assets. ASB Bank, Westpac New Zealand and Bank contribute to a sustainable securitisation market
Beside local investors, O’Connell said of New Zealand accessed the deep European over the long term,” the RBNZ said.
Australian and Asian accounts had participated covered bond market in May and June with A local DCM banker believes the RBNZ is
in recent transactions, though deal sizes are still respective €850m (US$960m) 10-year, committed to ending I-RMBS. “This will leave
too small to target US or European investors. €750m seven-year and €750m seven-year banks with little option but to adopt RMOs
Basecorp sold its second RMBS on Monday, trades while Kiwibank issued a A$500m in order to maintain sufficiently high liquidity
the NZ$250m BASECORP 2021-2 TRUST non- (US$360m) five-year covered Kangaroo in ratios,” he said.
conforming offering. The NZ$150m of Class September 2020. John Weavers

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GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 10/12/2021
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

SSAR
EUROS
Dec 8 2021 Schleswig-Holstein €300m incr Oct 29 2026 0.01 - - -
(€800m)
Dec 9 2021 EIB €250m incr May 15 2026 0.375 103.258 MS-21 -0.357
(€1.85bn)
NON CORE
Dec 8 2021 Stockholms Lans Landsting NKr2bn Dec 10 2027 1 105.562 ~3mN+7 -
Dec 8 2021 Norrkopings kommun SKr600m Dec 15 2026 0.605 100 - 0.605

Dec 9 2021 NTTC A$70m incr Mar 21 2051 3 99.98 ACGB+72 3

(A$150)
CORPORATES
US DOLLARS
Dec 6 2021 BAKER HUGHES CO- US$600m Dec 15 2026 2.061 100 T+85 2.061
OBLIGOR
Dec 6 2021 BAKER HUGHES CO- US$650m Dec 15 2023 1.231 100 T+60 1.231
OBLIGOR
Dec 6 2021 Dell International US$1bn Dec 15 2041 3.375 99.668 T+155 3.398

Dec 6 2021 Dell International US$1.25bn Dec 15 2051 (Jun 2051) 3.45 99.963 T+170 3.452

Dec 6 2021 Ecolab US$500m Dec 15 2023 0.9 99.931 T+30 0.935

Dec 6 2021 Ecolab US$850m Dec 15 2051 2.7 99.755 T+95 2.712

Dec 6 2021 Ecolab US$500m Feb 1 2027 1.65 99.97 T+45 1.656

Dec 6 2021 Ecolab US$650m Feb 1 2032 2.125 99.962 T+70 2.129

Dec 6 2021 Newmont Mining US$1bn Jul 15 2032 (Apr 2032) 2.6 99.898 T+117 2.611

Dec 6 2021 Roche Holding US$2bn Dec 13 2028 1.93 100 T+55 1.93

Dec 6 2021 Roche Holding US$2bn Dec 13 2031 2.076 100 T+65 2.076

Dec 6 2021 Roche Holding US$2bn Dec 13 2051 2.607 100 T+85 2.607

Dec 6 2021 Wisconsin Energy Corp US$500m Dec 15 2028 (Oct 2028) 2.2 99.761 T+85 2.237

Dec 7 2021 Emerson Electric US$1bn Dec 21 2028 (Oct 2028) 2 99.779 - 2.034

Dec 7 2021 Emerson Electric US$1bn Dec 21 2031 (Sep 2031) 2.2 99.688 - 2.235

Dec 7 2021 Emerson Electric US$1bn Dec 21 2051 (Jun 2051) 2.8 99.778 - 2.811

Dec 7 2021 GLP Capital US$800m Jan 15 2032 (Oct 2031) 3.25 99.376 T+185 3.323

Dec 7 2021 Merck & Co US$1bn Dec 10 2028 (Oct 2028) 1.9 99.824 - 1.927

Dec 7 2021 Merck & Co US$2bn Dec 10 2031 (Sep 2028) 2.15 99.794 - 2.173

Dec 7 2021 Merck & Co US$2bn Dec 10 2051 (Jun 2051) 2.75 99.756 - 2.762

Dec 7 2021 Merck & Co US$1.5bn Dec 10 2061 (Jun 2061) 2.9 99.718 - 2.912

Dec 7 2021 Merck & Co US$1.5bn Jun 10 2027 (May 2027) 1.7 99.958 - 1.708

Dec 7 2021 Western Digital Corporation US$500m Feb 1 2029 (Dec 2028) 2.85 99.816 - 2.879

Dec 7 2021 Western Digital Corporation US$500m Feb 1 2032 (Nov 2031) 3.1 99.726 - 3.132

Dec 8 2021 Athene Holding US$500m May 15 2052 3.45 99.983 - 3.451

Dec 8 2021 NextEra Energy Capital US$1bn Jan 15 2027 1.875 99.931 T+62 1.889
Holdings
Dec 8 2021 NextEra Energy Capital US$1bn Jan 15 2032 2.44 99.972 T+92 2.443
Holdings
Dec 8 2021 NextEra Energy Capital US$500m Jan 15 2052 3 99.781 T+112 3.011
Holdings

38 International Financing Review December 11 2021

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

- - - NR/NR/AAA Deka/LBBW -

- - - Aaa/AAA/AAA/AAA BofA/LBBW -

- - - - SEB -
- - - NR/AA+/-/ HCM -
Cicero:2PO
ACGB+72 - - Aa3 Daiwa -

T+110/+115, T+90 9 US$3bn A3/A- JPM/MS Adds books/NIC

area (+/-5), T+85
T+80 area, T+65 9 US$2.5bn A3/A- JPM/MS -
area (+/-5), T+60
IPT T+187.5, T+155 8 US$4.5bn Baa3/BBB/BBB Barc/BofA/Citi/JPM/CS/WFS -
(the #)
T+200 area, T+170 7 US$3.5bn Baa3/BBB/BBB Barc/BofA/Citi/JPM/CS/WFS -
(the #)
T+60 area, T+30 - US$2bn A3/A-/A- BofA/Barc/GS/JPM -
(the #)
T+115 area, T+95 11 US$2.5bn A3/A-/A- BofA/Barc/GS/JPM -
(the #)
T+70 area, T+45 - US$2bn A3/A-/A- BofA/Barc/GS/JPM -
(the #)
T+90 area, T+70 7 US$1.75bn A3/A-/A- BofA/Barc/GS/JPM -
(the #)
T+145 area, T+120 -3 US$3.5bn Baa1/BBB/- BMO/CS/GS/JPM -
area (+/-3), T+117
T+75 area, T+60 8 US$5.25bn Aa3/AA/AA BNPP/Citi/DB/JPM -
area (+/-5), T+55
T+85 area, T+70 8 US$4.75bn Aa3/AA/AA BNPP/Citi/DB/JPM -
area (+/-5), T+65
T+105 area, T+90 8 US$5bn Aa3/AA/AA BNPP/Citi/DB/JPM -
area (+/-5), T+85
T+110 area, T+90 3 US$1.25bn Baa1/BBB+/BBB+ JPM/PNC/Scotia/USB -
area (+/-5), T+85
T+80 area, T+65 -1 US$2.1bn A2/A Citi/GS -
area (+/- 5), T+60
T+95 area, T+80 -1 US$2.3bn A2/A Citi/GS -
area (+/-5), T+75
T+120/+125, T+105 1 US$2.6bn A2/A Citi/GS -
area (+/-5), T+100
T+220 area, T+190 3 US$3.3bn Baa1/BBB-/BBB- BofA/FITB/JPM/WFS -
area (+/-3), T+185
T+75 area, T+50 (the 3 US$5.8bn A1/A+/A+ DB/BofA/Barc/CS/GS -
#), T+50
T+90 area, T+70 (the 3 US$7.4bn A1/A+/A+ DB/BofA/Barc/CS/GS -
#), T+70
T+115 area, T+95 2 US$7.6bn A1/A+/A+ DB/BofA/Barc/CS/GS -
(the #), T+95
T+130 area, T+110 2 US$5.7bn A1/A+/A+ DB/BofA/Barc/CS/GS -
(the #), T+110
T+65 area, T+45 3 US$5.5bn A1/A+/A+ DB/BofA/Barc/CS/GS -
(the #), T+45
T+180 area, T+150 -1 US$4.4bn Baa3/BB+/BBB- BofA/JPM/MUFG -
area (+/- 5), T+145
T+200 area, T+170 -1 US$3.4bn Baa3/BB+/BBB- BofA/JPM/MUFG -
area (+/-5), T+165
T+180 area, T+160 - - None/A-/BBB BofA/MS/GS/WFS -
area (+/-3), T+157
T+90 area, T+65 - - Baa1/BBB+/A- BofA/MUFG/CS/GS/JPM/Scotia -
area (+/- 3) , T+62
T+120 area, T+95 - - Baa1/BBB+/A- BofA/MUFG/CS/GS/JPM/Scotia -
area (+/- 3), T+92
T+140 area, T+115 - - Baa1/BBB+/A- BofA/MUFG/CS/GS/JPM/Scotia -
area (+/- 3), T+112

International Financing Review December 11 2021 39

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 10/12/2021 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Dec 9 2021 NextEra Energy Capital US$600m Mar 15 2082 3.8 100 T+254.7 3.8
Holdings
Dec 9 2021 Qorvo US$500m Dec 15 2024 (Dec 2023) 1.75 99.814 - 1.814

EUROS
Dec 6 2021 NTT Corp €650m Dec 13 2025 0.082 100 MS+27 0.082

Dec 6 2021 NTT Corp €850m Dec 13 2028 0.399 100 MS+45 0.399

Dec 7 2021 Orange €1bn Dec 16 2033 0.625 98.741 MS+55 0.735

Dec 9 2021 Aroundtown €1.25bn Apr 15 2027 0.375 97.965 MS+88 0.766

NON CORE
Dec 10 2021 Centuria Industrial Reit A$350m Dec 2027 3.026 100 ASW+135 3.026

Dec 7 2021 Intea Fastigheter SKr150m incr Sep 1 2025 3mS+155 - - -

(SKr1.15bn)
FINANCIALS
US DOLLARS
Dec 6 2021 ABN Amro US$1bn Dec 13 2029 (Dec 2028) 2.47 100 T+110 2.47

Dec 6 2021 ABN Amro US$1bn Mar 13 2037 (Dec 2031) 3.324 100.003 T+190 3.324

Dec 7 2021 GA Global Funding Trust US$600m Dec 8 2023 1.25 99.931 - 1.285

Dec 7 2021 JPMorgan Chase & Co US$2.35bn Dec 10 2025 (Dec 2024) 1.561 100 T+60 1.561

Dec 7 2021 JPMorgan Chase & Co US$400m Dec 10 2025 (Dec 2024) SOFR+60 100 SOFR+60 -

Dec 8 2021 Brighthouse Financial Global US$500m Dec 15 2023 1.2 99.951 - 1.225
Funding
Dec 8 2021 Rabobank US$1.25bn Dec 15 2027 (Dec 2026) 1.98 100 T+73 1.98

Dec 8 2021 Toronto-Dominion Bank US$500m Dec 13 2024 1.25 99.927 T+33 1.275

EUROS
Dec 7 2021 Westpac Securities NZ €750m Dec 14 2026 0.427 100 MS+55 0.427
(London Branch)
JAPANESE YEN
Dec 9 2021 BPCE ¥25bn Dec 16 2026 0.302 100 Tonar swaps+33 0.302
(the #)
Dec 9 2021 BPCE ¥9bn Dec 16 2027 (Dec 2026) 0.512 100 Tonar swaps+54 0.512
(the #)

Dec 9 2021 BPCE ¥8.7bn Dec 16 2031 0.439 100 Tonar swaps+39 0.439
(the #)

Dec 9 2021 BPCE ¥74.6bn Dec 16 2031 (Dec 2026) 1.1 100 Tonar swaps+112.8 1.2

Dec 9 2021 BPCE ¥14.9bn Dec 16 2031 (Dec 2030) 0.728 100 Tonar swaps+70 0.728
(the #)

Dec 9 2021 BPCE ¥5.8bn Dec 16 2036 (Dec 2031) 1.25 100 Tonar swaps+120.1 1.25

40 International Financing Review December 11 2021

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

4.375% area, 3.8% - - Baa2/BBB/BBB CA-CIB/Barc/BNPP/Citi/MS/RBC/ -

WFS
Very low T+100s, - - Ba1/BBB-/BBB+ BofA/Citi/WFS -
T+90 area (+/-5),
T+85

MS+55 area, 1 €3bn NR/A/-/JCR AAA/ JPM/MS/BofA/GS/BNPP/ -

MS+30/+35, MS+27 R&I AA+ Nomura/Miz/SMBC Nikko/
Daiwa
MS+70 area, MS+50 10 €3.5bn NR/A/-/JCR AAA/ JPM/MS/BofA/GS/BNPP/ -
area, MS+45 R&I AA+ Nomura/Miz/SMBC Nikko/
Daiwa
MS+80/+85, 5 €5.5bn Baa1/BBB+/BBB+ CA-CIB/MS/BBVA/BNPP/CIC/Citi/ Ger/Aus 29%, UK 25%, Fr 21%,
MS+55/+60 WPIR, DB/ING Benelux 10%, Nordics 7%, Switz 3%,
MS+55 Other 5%. AM 57%, Ins/PFs 16%,
CB/OI 14%, Bks/PB 9%, HF 2%,
Other 2%.
MS+115/+120, 5 €3.7bn NR/BBB+ BNPP/Citi/DB/GS/Santan -
MS+90 area (+/-2
WPIR), MS+88

ASW+145 area, - - Baa2 CBA/WBC -

ASW+135/+140
area, ASW+135
- - - NCR BBB+ Nordea -

T+135 area, T+110 5 US$2bn Baa1/BBB/A/ ABN/Citi/GS/BofA/MS -

(the #), T+110 Sustainalytics:ESG
17.9/100,ISS
ESG:C+ Prime,
Env 1, Soc 1, Gov 3
T+215 area, T+190 5 US$2.5bn Baa2/BBB-/BBB+ ABN/Citi/GS/BofA/MS/StCh -
(the #), T+190
T+70 area, T+60 (the 5 US$750m A3/A-/A- DB/BNPP/MS/WFS -
#), T+60
T+175 area, T+60 4 - A2/A-/AA- JPM -
(the #), T+60
SOFR Equiv, - - A2/A-/AA- JPM -
SOFR+60
T+70 area, T+55 - - A3/A+ Barc/CS/GS/USB -

T+90/+95, T+73 (the - - Aa2/A-/A+ BofA/Barc/GS/MS/Rabo -

#), T+73
Mid-High T+40s, - - Aa3/A/- Academy/JPM/RSeelaus/TD/Siebert -
T+33

MS+75 area, MS+55 10 €2.85bn A1/AA- Barc/HSBC/JPM/WBC -

the #

Tonar swaps+33 - - A1/A/A+/R&IA+ MUMSS/Miz/Natx/Nomura -

(the #)
Tonar - - Baa1/BBB+/A/ MUMSS/Miz/Natx/Nomura -
swaps+54/+55, R&I:A
Tonar swaps+54
(the #)
Tonar - - A1/A/A+/R&IA+ MUMSS/Miz/Natx/Nomura -
swaps+39/+40,
Tonar swaps+39
(the #)
1.05%/1.1%, 1.1% - - Baa2/BBB/A-/R&I:A MUMSS/Miz/Natx/Nomura -
(the #)
Tonar - - Baa1/BBB+/A/ MUMSS/Miz/Natx/Nomura -
swaps+69/+70, R&I:A
Tonar swaps+70
(the #)
1.25% (the #) - - Baa2/BBB/A-/R&I:A MUMSS/Miz/Natx/Nomura -

International Financing Review December 11 2021 41

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 10/12/2021 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

STERLING
Dec 6 2021 abrdn £210m Perpetual (Dec 2026) 5.25 100 G+470.9 5.25

SWISS FRANCS
Dec 7 2021 Banque Cantonale Vaudoise SFr125m Dec 22 2033 0.2 100.148 Saron MS+20 0.188

NON CORE
Dec 3 2021 Skandiabanken SKr250m incr Nov 24 2026 3mS+75 102.94 3mS+15 -
(SKr2.45bn)
Dec 3 2021 Skandiabanken SKr700m incr Nov 24 2026 3mS+75 102.941 3mS+15 -
(SKr2.2bn)
Dec 3 2021 Skandiabanken SKr250m incr Nov 24 2026 3mS+75 103.014 3mS+15 -
(SKr2.7bn)
Dec 6 2021 Bluestep Bank SKr200m incr Oct 20 2026 3mS+100 - 6mS+30 -
(SKr1.7bn)
Dec 8 2021 Bank of Queensland A$275m Dec 15 2022 0 100 3mBBSW+27 -
Dec 9 2021 AMP Bank A$125m Dec 16 2024 0 100 3mBBSW+90 -
Dec 8 2021 SBAB SKr950m incr Sep 21 2026 75 101.053 3mS+53 -
(SKr2.4bn)
Dec 9 2021 Lansforsakringar Bank SKr750m incr Oct 5 2026 3mS+75 101.063 3mS+53 -
(SKr1.25bn)
Dec 9 2021 Resurs Bank SKr50m incr Nov 15 2024 3mS+107 - - -
(SKr600)
COVERED BONDS
EUROS
Dec 8 2021 BNS €1.75bn Dec 15 2027 0.01 100.084 MS+6 -0.004
STERLING
Dec 7 2021 CIBC £1bn Dec 15 2025 SONIA+100 102.86 SONIA+28 -

Dec 10 2021 BayernLB £300m Dec 14 2024 1 99.757 G+68 1.083

HIGH YIELD
US DOLLARS
Dec 6 2021 DIRECTV Holdings US$1.4bn Aug 15 2027 (Aug 2025) 5.875 101.75 T+425 5.444
LLC and DIRECTV
Financing Co
Dec 6 2021 Ritchie Bros auctioneers US$600m Dec 15 2031 (Dec 2026) 4.75 100 T+328 4.75
Dec 8 2021 Dun & Brad US$460m Dec 15 2029 (Dec 2026) 5 100 - 5

Dec 8 2021 II-VI Inc US$990m Dec 15 2029 (Dec 2026) 5 100 - 5

Dec 8 2021 Southwestern Energy US$1.15bn Feb 1 2032 (Feb 2030) 4.75 100 - 4.75
Company

Dec 8 2021 Standard Industries US$500m incr Jul 15 2030 (Jul 2028) 4.375 99.375 - 4.463
(US$1.6)
Dec 9 2021 HOWARD MIDSTREAM US$400m Jan 15 2027 6.75 100 T+551.9 6.75
ENERGY PARTNERS

EUROS
Dec 9 2021 WP/AP Telecom Holdings €550m Jan 15 2030 (Jan 2027) 5.5 100 B+597 5.5
III BV

Dec 9 2021 WP/AP Telecom Holdings €800m Jan 15 2029 (Jan 2027) 3.75 100 B+426 3.75
IV BV

NON CORE
Dec 6 2021 Ritchie Bros auctioneers C$425m Dec 15 2029 (Dec 2024) 4.96 100 GOC+346.2 4.95

42 International Financing Review December 11 2021

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

6% area, 5.5% area, - £1.65bn Baa2/BBB- Barc/BofA/HSBC/JPM UK 65%, US O/S 12%, Switz 8%,
5.25% Fr 5%, Nordics 3%, Other 7%.
AM/FM 84%, Bks 8%, Ins/PF 3%,
Other 5%.

Saron MS+19/+21, - - NR/AA BCV -

Saron MS+20

- - - Aaa SEB -

- - - Aaa SEB -

- - - Aaa Danske -

- - - Aa1 Danske -

3mBBSW+27 - - A3/BBB+/A- ANZ -

3mBBSW+90 - - Baa2/BBB CBA/UBS/WBC -
- - - Baa1/BBB+ Danske/Swed -

- - - A3/A- Danske/Swed -

- - - - SEB -

MS+10 area, MS+6 1 €2.4bn Aaa/NR/AAA/AAA CMZ/HSBC/ING/Natx/Scotia -

SONIA+30 area, 1 £1.1bn Aaa/NR/AAA CIBC/NatWest/Nomura/RBC -

SONIA+28
G+72 area 1 £785m Aaa CS -

101.50 (+/- 0.25), - - Ba3/BB/BBB- CS/DB/HSBC/GS/Miz/MUFG/UBS/ -

101.75 Barc/Jeff/TPG/Loop

4.75%/5%, 4.75% - - Ba3/BB+ GS/RBC/BofA -

5%/5.25% - - Caa1/B-/BB- GS/BofA/JPM/RBC/Barc/Citi/ -
Truist/WFS/Citizens/HSBC/Miz/
TD/MUFG/BMO/DB/SMBC/
Natx/Jeff
5.5% area, 5.25% - - B2/B+/BB JPM/PNC/Citizens/BMO/HSBC/Miz/ -
area, 5% MUFG/TD
5%/5.25%, 4.75%/5 - - Ba3/BB/BB BofA/Citi/JPM/Miz/MUFG/ -
% PNC/RBC/Truist/WFS/
Regions/CA-CIB/FITB/GS/
MS/CIBC/Citizens/CS/HSBC/
SMBC
Px 99.375 - - B1/BB Citi/DB/BNPP/JPM/Miz/TD -

6.75%/7%, 6.75% - - B3/B RBC/Southcoast/CIBC/Citizens/ -

MUFG/TD/Truist/ING/Regions/USB/
SMBC

5.5%/5.75%, 5.5% - - Caa1/CCC+ Barc/DB/MS/ABN/BNPP/ -

CMZ/CS/ING/Jeff/KKR/Miz/
MUFG/NatWest/Nomura/
Rabo/RBC/Santan/SMBC/
SG/Uni/StCh
3.875% area, 3.75% - - B1/B Barc/DB/MS/ABN/BNPP/ -
CMZ/CS/ING/Jeff/KKR/Miz/
MUFG/NatWest/Nomura/
Rabo/RBC/Santan/SMBC/
SG/Uni/StCh

5% area, 5% - - Ba3/BB+ GS/RBC/BofA -

International Financing Review December 11 2021 43

GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (10/12/2021)
Moody’s S&P Fitch Moody’s S&P Fitch
Sovereign 1 2 3 4 5 6 Sovereign 1 2 3 4 5 6
Abu Dhabi Aa2 – AA AA+ AA AA+ Laos Caa2 n Caa2 – – CCC B–
Albania B1 Ba2 B+ BB – – Latvia A3 Aaa A AAA A– AAA
Andorra – – BBB AAA BBB+ A+ Lebanon C Ca SD CC RD CCC
Angola B3 B3 CCC+ CCC CCC B Lesotho – – – – Bn B+
Argentina Ca Caa3 CCC+ CCC+ CCC B– Liechtenstein – Aaa AAA AAA – –
Armenia Ba3 Ba1 – – B+ BB– Lithuania A2 Aaa A AAA A AAA
Aruba – – BBB BBB BB BB+ Luxembourg Aaa Aaa AAA AAA AAA AAA
Australia Aaa Aaa AAA AAA AAA AAA Macau Aa3 Aaa – – AA AAA
Austria Aa1 Aaa AA+ AAA AA+ AAA Macedonia (FYR) – – BB– BB BB+ n BBB–
Azerbaijan Ba2 p Ba2 BB+ BB+ BB+ BB+ Malaysia A3 Aa2 A– n A+ BBB+ A
Bahamas Ba3 Baa3 B+ B– – – Maldives Caa1 B3 – – B– B
Bahrain B2 n B1 B+ BB– B+ BB+ Mali Caa1 B2 – – – –
Bangladesh Ba3 Ba2 BB– B– BB– BB– Malta A2 n Aaa A– p AAA A+ AAA
Barbados Caa1 B2 B– B– – – Mauritius Baa2 n A1 – – – –
Belarus B3 n B3 Bn B Bn B Mexico Baa1 n Aa3 BBB A BBB– BBB+
Belgium Aa3 Aaa AA AAA AA– AAA Moldova B3 B2 – – – –
Belize Caa3 n Caa2 B– B– – – Mongolia B3 B3 B B+ B B+
Benin B1 Ba1 B+ BBB– B+ BB– Montenegro B1 p Baa3 B AAA – –
Bermuda A2 Aaa A+ AA+ – – Montserrat – – BBB– BBB– – –
Bolivia B2 n B2 B+ B+ B B Morocco Ba1 Baa2 BB+ BBB BB+ BB+
Bosnia Herzegovina B3 B3 B BB– – – Mozambique Caa2 Caa1 CCC+ CCC+ CCC B–
Botswana A3 n A1 BBB+ A – – Namibia Ba3 Ba1 – – BB n BB+
Brazil Ba2 Baa2 BB– BB+ BB– n BB Netherlands Aaa Aaa AAA AAA AAA AAA
Bulgaria Baa1 Aa2 BBB A BBB p A– New Zealand Aaa Aaa AA+ AAA AA AAA
Cambodia B2 B1 – – – – Nicaragua B3 B2 B– B– B– B–
Cameroon B2 B1 Bn BBB– Bn B+ Nigeria B2 B2 B– B– B B
Canada Aaa Aaa AAA AAA AA+ AAA Norway Aaa Aaa AAA AAA AAA AAA
Cape Verde – – B– B+ B– B Oman Ba3 Ba2 B+ p BB– BB– n BB+
Cayman Islands Aa3 Aaa – – – – Pakistan B3 B2 B– B– B– B–
Chile A1 n Aaa A AA– A– A+ Panama Baa2 A1 BBB n AAA BBB– n A
China A1 Aa1 A+ A+ A+ A+ Papua New Guinea B2 n B1 B– B– – –
Colombia Baa2 A1 BB+ BBB BB+ BBB– Paraguay Ba1 Baa2 BB BB+ BB+ BB+
Congo (DR) Caa1 p Caa1 CCC+ p CCC+ – – Peru Baa1 Aa3 BBB+ n A BBB+ n A–
Congo (Rep) Caa2 B2 CCC+ BBB– CCC B– Philippines Baa2 A2 BBB+ A– BBB n BBB+
Cook Islands – – B+ AAA – – Poland A2 Aa3 A– A+ A– AA–
Costa Rica B2 ** Ba3 B– n BB– Bn B+ Portugal Baa2 Aa2 BBB AAA BBB AA
Cote d’Ivoire Ba3 Baa3 BB– BBB– BB– BB Qatar Aa3 Aa1 AA– AA AA– AA
Croatia Ba1 A2 BBB– BBB+ BBB p A– Ras al–Khaimah – – A– AA+ A AA+
Cuba Ca Ca – – – – Romania Baa3 n A2 BBB– A– BBB– n BBB+
Curacao – – BBB–n BBB– – – Russia Baa3 Baa2 BBB– BBB BBB BBB
Cyprus Ba1 A1 BBB– p AAA BBB– A Rwanda B2 n B1 B+ n B+ B+ n B+
Czech Rep Aa3 Aaa AA– AA+ AA– AAA St Vincent & Gren B3 Ba3 – – – –
Denmark Aaa Aaa AAA AAA AAA AAA San Marino – – – BB+n BBB
Dominican Rep Ba3 Ba1 BB– n BB+ BB– ** BB– Saudi Arabia A1 Aa2 A– A A A+
Ecuador Caa3 Caa2 B– B– B– B– Senegal Ba3 Baa3 B+ BBB– – –
Egypt B2 Ba3 B B B+ B+ Serbia Ba2 Baa1 BB+ BBB– BB+ BBB–
El Salvador Caa1 n B2 B– n AAA B– n B Seychelles – – – – B+ BB +
Estonia A1 Aaa AA– p AAA AA– AAA Singapore Aaa Aaa AAA AAA AAA AAA
Eswatini B3 B1 – – – – Slovakia A2 Aaa A+ AAA A AAA
Ethiopia Caa2 n Caa1 CCC n CCC CCC B Slovenia A3 Aaa AA– AAA A AAA
Fiji B1 n B1 B+ B+ – – Solomon Islands Caa1 B3 – – – –
Finland Aa1 Aaa AA+ AAA AA+ p AAA South Africa Ba2 Baa2 BB– BB+ BB– n BB
France Aa2 p Aaa AA AAA AA n AAA South Korea Aa2 Aaa AA AAA AA– AA+
Gabon Caa1 B3 – – B– B Spain Baa1 Aa1 An AAA A– AAA
Georgia Ba2 Baa3 BB n BBB– BB BBB– Sri Lanka Caa2 Caa2 CCC +n CCC+ CCC B–
Germany Aaa Aaa AAA AAA AAA AAA Suriname Caa3 n Caa2 SD CCC RD CCC
Ghana B3 n B1 B– B Bn B Sweden Aaa Aaa AAA AAA AAA AAA
Greece Ba3 A3 BB AAA BB BBB+ Switzerland Aaa Aaa AAA AAA AAA AAA
Guatemala Ba1 n Baa3 BB– BB+ BB– BB Taiwan Aa3 p Aaa AA p AAA AA AAA
Honduras B1 Ba3 BB– BB – – Tajikistan B3 B3 B– B– – –
Hong Kong Aa3 Aaa AA+ AAA AA– AAA Tanzania B2 B3 – – – –
Hungary Baa2 A1 BBB A– BBB A Thailand Baa1 A1 BBB+ A BBB+ A–
Iceland A2 Aa2 A A A A+ Trinidad & Tobago Ba2 Baa1 BBB– n BBB – –
India Baa3 A3 BBB– BBB+ BBB– n BBB– Tunisia Caa1 B3 – – B– n B
Indonesia Baa2 A3 BBB n BBB+ BBB BBB Turkey B2 n B2 B+ BB– BB– n BB–
Iraq Caa1 Caa1 B– B– B– B– Turks & Caicos – – BBB+ AAA – –
Ireland A2 p Aaa AA– AAA A+ AAA Uganda B2 Ba3 B B B+ n B+
Israel A1 Aa3 AA– AA+ A+ AA Ukraine B3 B2 B B Bp B
Italy Baa3 Aa3 BBB p AAA BBB c AA c UAE Aa2 Aaa – – AA– AA+
Jamaica B2 Ba3 B+ BB– B+ BB– UK Aa3 Aaa AA AAA AA– AAA
Japan A1 p Aaa A+ AA+ An AAA USA Aaa Aaa AA+ AAA AAA n AAA
Jordan B1 Ba1 B+ BB BB– ** BB Uruguay Baa2 A2 BBB BB– BBB– n BBB+
Kazakhstan Baa2 A3 BBB– BBB BBB BBB+ Uzbekistan B1 p B1 BB– n BB– BB BB
Kenya B2 n Ba3 B B+ B+ n B+ Venezuela C C SD CC – –
Kuwait A1 Aa2 A+ AA– AA n AA+ Vietnam Ba3 p Ba2 BB n BB BB– BB–
Kyrgyzstan B2 n B2 – – – – Zambia Ca Caa3 SD CCC– RD B–

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

44 International Financing Review December 11 2021

 EMERGING MARKETS China 46 Hungary 47 Turkey 47 Zambia 47 Chile 50 Mexico 50

„ FRONT STORY ESG

Investors mop up Latvia’s ESG debut

Sovereign strikes with upsized ESG bond
LATVIA opened books on its inaugural day to go,” said a second banker on Monday. with the spread set at 6bp over swaps. On
sustainability bond on Monday and had no h!Nû%3'ûLABELûALWAYSûHELPSûINûSOMEûSHAPEûORû Monday, that bond was seen at 24bp by leads
problem drawing in orders. That helped form, and did so here.” on the new issue.
leads ratchet in pricing for a minimal new ,ATVIAûHOLDSûMOREûAPPEALûTOû33!ûBUYERSû Also relevant for judging the pricing of
issue concession, with some even arguing than EM investors. Those accounts the new trade, Latvia has a €1.31bn 0%
the deal priced in line with fair value. considering the deal were happy to March 2031, which leads had at around
While it is late in the year and the ENGAGEûWITHûTHEûlNALûORDERûBOOKûTOPPINGû 23bp. Bonds from Lithuania were also used
opportunities to issue are fading fast, Latvia €2.35bn, only slightly down from the as comparables. Estimates for fair value for
decided to take to the market to make the most €2.5bn peak. The spread was set at 25bp. Monday’s deal centred on 24bp–25bp.
of the lack of supply and the relatively low rates Demand was also strong enough to allow Although the sovereign has not issued in
available, especially as conditions are expected the issuer to increase the size to €600m. THEû%3'ûBONDûMARKETûBEFOREûTHEREûHASûBEENû
to be less accommodating next year. Barclays, BNP Paribas and Credit Agricole led issuance from some of the country’s state-
“There are often pockets of liquidity left the transaction. owned corporates, such as Augstsprieguma
around at this time of year to mop up )NAUGURALû%3'ûDEALSûWORKûBESTûWHENû Tikls and Latvenergo.
anything that comes out,” said one banker. investors have time to engage with the ,ATVIAûISûFARûFROMûTHEûlRSTû#%%ûSOVEREIGNû
Following several days of marketing, both issuer and the framework, and therefore, TOûTAPûINTOûDEMANDûFORû%3'ûASSETSû4HISûYEARû
to talk investors through its framework and the fact that the borrower decided to tap the has seen several names enter the market. In
ENGAGEûDIRECTLYûWITHûlXED INCOMEûACCOUNTSû market now, when there is no competing *UNEû3LOVENIAû!!!n! ûISSUEDûAûõBNû
on the new issue, the Baltic sovereign (A3/ supply, would have likely worked in its 0.125% July 2031 sustainability bond and
A+/A–) announced a €500m January 2030 at favour, said a banker away from the trade. WASûFOLLOWEDûINTOûTHEûMARKETûBYû3ERBIAû"A
IPTs of mid-swaps plus low 30s. The sovereign last issued nearly six """" ûWHICHûINû3EPTEMBERûISSUEDûITSû
“The market has opened pretty months ago – a €500m no-grow January own €1bn 1% 2028 green bond.
constructively this morning, so it was a good 2029 bond that priced close to fair value, Ed Clark

January to usher in hunting season

New year supply from CEEMEA expected to get off to a fast start
Banks are boasting a stacked set of mandates saying a handful of sovereigns could be in them,” he said. “But it’s looking crazily busy,
from CEEMEA that are set to be unveiled line to print deals. with the pipeline getting busier every day
in the market as soon as January comes “People need to come, we’re waiting on while a lot of deals had been pushed back.
around. Kenya, potentially Ghana with a social bond We could be looking at a situation where the
“January is going to be crazy, we have and Angola has been talking about it too,” he level of supply far outpaces both demand
about 10 mandates or thereabouts and I’m said. “We could easily see new issuance from and the technical side, given we are seeing
hearing the big Americans have 25,” said a Africa early, although probably not in the OUTmOWSv
syndicate banker. “A lot of the trades lRSTûWEEKûASûTHEYûWILLûNEEDûTOûGIVEûTIMEûFORû %-ûDEBTûHASûRECORDEDûNETûOUTmOWSûFORû
which had been delayed were the the market to adjust to the new year.” the past four weeks, according to EPFR and
corporates, as the sovereigns always had Bank of America, with the latest weekly
access. I think we’ll see new issuers in lGURESûSHOWINGûABOUTû53MûLEFTûTHEû
euros and the other theme is going to be
“January is going to be crazy, asset class.
project bonds.” we have about 10 mandates or Investors will be hoping that January’s
A second syndicate banker is also thereabouts and I’m hearing the trades usher in a more productive year, after
preparing for a wave of deals. big Americans have 25” 2021 has proved to be a disappointment.
h7HOûCOMESûlRSTûWILLûBEûTHEûUSUALûLOWû “Total returns year-to-date are negative
beta suspects from CEE and the Middle East,” The second banker said the pipeline both in EM local markets and EM credit,
he said. “The question is which name will it features those that have been stuck in the roughly in line with those of 2018,” said
be from the high-yield front that wants to queue for a while, as well as fresh Barclays. “Also, low yielding EM FX
come to the fore – maybe Turkey, but then at entrants. underperformed in 2021, in line with G10
what price and at what yield?” “We are still in a very volatile rates high beta peers, while high yielding EM
One area that could provide some extra environment and so issuers have to be currencies just managed to break even.”
yield for investors is Africa, with a trader pragmatic about what windows are open to Robert Hogg

International Financing Review December 11 2021 45

 Last week, though, also saw CHINA !CCORDINGûTOûANû/CTOBERûNOTEûFROMû30û
EVERGRANDE GROUP and KAISA GROUP HOLDINGS 'REENLANDû(OLDINGû'ROUPûHASû53BNû
ASIA-PACIFIC enter technical default after both failed to of offshore notes due in 2022 and the
make interest payments due on bonds (see bond maturities are “still manageable”
Top News for more). given its cash balance and cash from
CHINA Greenland’s choice to use a very short tenor offshore projects.
was unusual in the offshore market, where most The company also maintains a cross-
GREENLAND BRAVES MARKET short-dated notes have a 364-day maturity. BORDERûCASHûPOOLûSUFlCIENTûFORû
The source said the tenor matched repatriating cash from onshore and
GREENLAND HOLDING GROUP braved the market investor demand and the issuer was also continues to have access to its major
ONû4UESDAYûWITHûAû53MûEIGHT MONTHû comfortable with it. In the onshore market, banks, the rating agency said.
NOTEûISSUEûTHATûBECAMEûTHEûlRSTûOFFSHOREû it is very common to issue commercial paper
deal from the struggling Chinese property with a tenor of less than one year. WUXI CONSTRUCTION SEALS
sector in more than a month, following “I do not expect this will become a trend GREEN BOND
recent positive policy signals. offshore,” said the source. But, “the issuer got
4HEûUNRATEDû2EGû3û!UGUSTûûûû the deal done. I think it is positive to the WUXI CONSTRUCTION AND DEVELOPMENT INVESTMENT
notes were priced at par to yield 8% (on an market, sending a message that developers are HASûPRICEDûAû53MûTHREE YEARûSENIORû
annual basis), unchanged from price guidance. still able to tap the current choppy market.” green bond offering at par to yield
The developer came out directly with The offshore bond market has been ûTHEûTIGHTûENDûOFûlNALûGUIDANCEûOFû
lNALûGUIDANCEûAFTERûlNDINGûSUPPORTûFROMû EFFECTIVELYûSHUTûSINCEûMID 3EPTEMBERûWITHû 1.95%–2% and well inside initial guidance
anchor investors. It achieved its targeted ONLYûAûFEWûDEVELOPERSûSUCHûASû3HIMAOû'ROUPû of the 2.5% area.
size, said a source familiar with the Holdings, Redsun Properties Group and 4HEû2EGû3ûTRANSACTIONûISûTHEûlRSTûGREENû
situation. He declined to comment on 3EAZENû'ROUPûABLEûTOûTAPûTHEûMARKETûVIAû bond issued by a local Chinese state-
whether the bond issue was fairly priced. PUBLICûDEALSû-OSTûOFûTHEûFEWû53ûDOLLARûBONDû owned corporate issuer to be listed in
The developer’s 5.75% bonds due issues from developers since then have been Hong Kong, Luxembourg and Macau
3EPTEMBERûûûCLOSEDûATûûONû private placements or club deals. simultaneously, according to a banker on
Tuesday, yielding 18.3%/11.1%, according to The last deal from the property sector was the deal.
2ElNITIVûDATA from Ganglong China Property Group, “A yield level of below 2% for a
The source said recent policy signals and WHICHûRAISEDû53MûFROMûAûNEWûMONEYû prefecture-level city enterprise was
Greenland’s state-owned background issue alongside an exchange offer in early remarkable,” he said, “Investors are
helped. “The deal attracted market orders in .OVEMBERûTOûRElNANCEûAûBONDûOFFERINGûDUEû familiar with the name given that it was
addition to anchors,” he said. on December 1, according to IFR data. Before already the third time it visited the
Before the transaction was launched, the THATû$A&Aû0ROPERTIESû'ROUPûSOLDû53Mû offshore market. The green bond nature
People’s Bank of China cut the bank reserve of 13.5% senior notes due April 2023 via a also helped to attract demand.”
ratio requirement by 50bp late on Monday. The private placement in late October. Deal statistics for the transaction were
move was viewed by the market as a signal of (EADQUARTEREDûINû3HANGHAIû'REENLANDû not available at the time of writing but
policy easing amid an economic slowdown. Holding Group was 46.37% indirectly owned orders were said to be in excess of
Also on Monday, the Politburo, the ruling BYûTHEû3HANGHAIû3!3!#ûASûATûEND 3EPTEMBER 53BNûATûlNALûGUIDANCEûINCLUDINGû
Communist Party’s top decision-making body, Greenland Global Investment is the issuer 53MûFROMûTHEûLEADS
said in a meeting chaired by President Xi Jinping and Greenland Holding Group, rated Ba2 Wholly owned subsidiary Xihui Haiwai
that it would “boost the healthy development (under review for downgrade) by Moody’s I Investment Holdings is the issuer and
and the virtuous cycle of the real estate sector”, ANDû"ûNEGATIVE ûBYû30ûISûTHEûGUARANTORû the Wuxi municipal government-owned
according to the state-run Xinhua News Agency. Proceeds will primarily be used for urban infrastructure constructor and
The meeting fuelled speculation that the OFFSHOREûDEBTûRElNANCING lNANCIALûSERVICESûPROVIDERûISûTHEû
government might adopt a more dovish BOC International was sole global guarantor.
approach towards property companies. coordinator, bookrunner and lead manager. The bonds are expected to be rated
BBB+ by Fitch, in line with the guarantor.
ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS 0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEû
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE group debt in accordance with a green
Asia-Pacific Managing No of Total Share lNANCEûFRAMEWORK
Managing No of Total Share bank or group issues US$(m) (%)
bank or group issues US$(m) (%)
1 JP Morgan 329 65,189.13 8.6
SUNSHINE 100 DEFAULTS
1 HSBC 312 32,365.61 8.2 2 Citigroup 334 62,843.13 8.3
2 Citigroup 173 23,448.34 5.9 3 HSBC 416 55,625.27 7.3
Real estate company SUNSHINE 100 CHINA
3 JP Morgan 144 20,468.62 5.2 HOLDINGS has defaulted on its 10.5% 2021
4 Bank of America 197 38,132.19 5.0
4 Standard Chartered 238 19,948.53 5.1 5 Standard Chartered 342 38,038.50 5.0 bonds.
5 Bank of America 111 15,751.59 4.0 6 BNP Paribas 225 34,426.81 4.5 The borrower was supposed to pay the
6 Credit Agricole 145 14,331.54 3.6 7 Goldman Sachs 124 29,981.84 4.0 53MûOUTSTANDINGûPRINCIPALûOFûTHEû
7 BNP Paribas 141 13,813.97 3.5 8 Morgan Stanley 103 21,356.75 2.8 3INGAPORE LISTEDûBONDSûONû$ECEMBERûûINû
8 Bank of China 232 13,738.86 3.5 9 Credit Agricole 183 20,185.43 2.7 ADDITIONûTOû53MûOFûUNPAIDûINTERESTû
9 Deutsche Bank 110 10,818.40 2.7 10 Deutsche Bank 143 19,367.96 2.6 But the company announced in a stock
10 Citic 258 10,588.07 2.7 Total 1,397 758,720.22 EXCHANGEûlLINGûTHATûLIQUIDITYûISSUESû
Total 918 394,811.62 related to the Chinese property sector’s
Excluding equity-related debt.
Excluding equity-related debt. woes has prevented it from meeting its
Source: Refinitiv SDC code: L4 Source: Refinitiv SDC code: L1 obligations.

46 International Financing Review December 11 2021

 EMERGING MARKETS ASIA-PACIFIC

The default will trigger cross-default resources for new infrastructure projects
provisions on other debt instruments, with different instruments,” Ekrem
meaning that the affected notes could EUROPE/AFRICA Imamoglu said when asked if a bond issue in
become immediately due if creditors want international markets was being considered.
TOûACCELERATEûPAYMENTû3UNSHINEûûNOTEDû 4HEûMUNICIPALITYûSECUREDû53MûINû
INûITSû-ONDAYûlLINGûTHATûITûHASûNOTûYETû HUNGARY %UROBONDûlNANCINGûLASTûYEARûTOûFUNDûTHEû
received any such demands from creditors. completion of four subway projects around
Monday’s announcement is only SOVEREIGN READIES GREEN PANDA Istanbul. The Eurobond, which has a
3UNSHINEûSûLATESTûMISSEDûPAYMENTû)Nû MATURITYûOFûlVEûYEARSûANDûAûûYIELDûSAWû
August, the company failed to repay its 6.5% HUNGARYûISûSETûTOûLAUNCHûTHEûlRSTûGREENû DEMANDûOFûMOREûTHANû53BN
convertible bonds. That default also sovereign Panda bond in China’s interbank Imamoglu did not say in the interview
triggered the cross-default provisions of the bond market on December 14 with a on Monday with Reuters, when the bond
ûûBONDSûASûWELLûASûTHEû3INGAPORE 2MBBNû53M ûTHREE YEARûDEAL might be launched. His comments come
LISTEDû53MûûSûANDûTHEû(ONGû The sovereign, rated AAA by China Lianhe as Turkey grapples with the fallout from
+ONG LISTEDû53MûûGREENûS and Baa2/BBB/BBB by global rating agencies, a 45% plunge in the value of the lira
plans to issue the bonds under its 2021 RMB against the dollar this year.
MORE DOWNGRADES FOR AOYUAN green bond issuance programme and its green After last year’s issue, Imamoglu said
bond framework (May 2020), which is aligned the city of 16 million people was only
Rating agencies have downgraded CHINA with the ICMA Green Bond Principles and was RESORTINGûTOûFOREIGNûlNANCINGûAFTERû
AOYUAN GROUP again after the developer said REVIEWEDûBYû#ICEROû3HADESûOFû'REENûASûTHEû repeated requests to obtain funds from
it is unable to make the immediate second-party opinion provider. Turkish state banks failed.
REPAYMENTûOFû53MûTHATûCREDITORSû Proceeds will be remitted offshore and Imamoglu, from the main opposition
demanded following previous downgrades. converted into euros for the issuer’s green Republican People’s Party (CHP), took
Fitch on December 7 lowered the Hong funding programme and will be used for OFlCEûINû*UNEûûAFTERûDEFEATINGûTHEû
Kong-listed Chinese real estate company’s eligible green expenditures in line with candidate of President Tayyip Erdogan’s
issuer and senior bond ratings to C from Hungary’s planned transition to a low AK Party in the mayoral election.
###nûTOûREmECTûITSûVIEWûTHATûhAûDEFAULTûORû carbon, climate-resilient and He is seen by some as a potential
default-like process has begun”. environmentally sustainable economy. contender to challenge Erdogan in the
!ûDAYûBEFOREû30ûCUTû!OYUANSûISSUERû ,IANHEû%QUATORûHASûCERTIlEDûTHATûTHEû 2023 presidential elections, although he
RATINGûTOû3$ûSELECTIVEûDEFAULT ûFROMû###û proposed issue complies with the says he is only focused on his job as
and its senior bond rating to CC from requirements of the Green Bond Endorsed mayor.
CCC–, citing a high vulnerability to non- Project Catalogue (2021 Edition), the ICMA After the election, Turkish state banks
repayment. It subsequently withdrew its Green Bond Principles (June 2021) and the stopped extending loans to Istanbul,
ratings at the company’s request. 3USTAINABLEû$EVELOPMENTû'OALSûANDûSELF which was run for 25 years by Erdogan’s
)NûAûlLINGûDATEDû$ECEMBERûû!OYUANû regulatory rules of the National Association AKP and its Islamist predecessor party,
said the non-payments of the obligations, of Financial Market Institutional Investors. Imamoglu said previously.
for which the company and/or members The senior unsecured bonds will be Aside from the subway, the
of the group are borrowers or guarantors, offered to onshore investors, and offshore municipality has invested €500m–€550m
may trigger the possible acceleration of institutional investors via Bond Connect. in other projects.
repayment by creditors of some of its Bank of China is bookrunner and lead Last month it opened an 85 megawatt
OTHERûOFFSHOREûlNANCINGûARRANGEMENTSû)Tû underwriter. waste incineration and power station, a
has not yet reached alternative payment Hungary made its debut in the Panda biomethanation plant to produce energy
arrangements with the creditors. bond market in 2017 with an offering of and fertiliser from food waste, and a
Fitch said it believes Aoyuan’s public Rmb1bn three-year notes at 4.85%. In 2018, WATERûPURIlCATIONûPLANT
BONDSûAREûNOTûAMONGûTHEû53MûOFû it issued Rmb2bn three-year notes at 4.3%. Imamoglu said work was continuing
lNANCINGûAFFECTEDûBYûTHEûDEMANDSûFORû In October, Poland, rated A2/A–/A–, priced a ONûSECURINGûlNANCEûFORûAûNEWûWASTEû
repayment, because an acceleration of Rmb3bn three-year Panda bond offering in incineration plant and a subway line
payment for Aoyuan’s public bonds China’s interbank market at par, to yield 3.2%. between the Istanbul districts of
cannot be triggered solely by rating 4HEûTRANSACTIONûWASûTHEûlRSTûSOVEREIGNû "EYLIKDUZUûANDû3EFAKOYûWHICHûISû
downgrades but must be accompanied by Panda issue since Portugal’s Rmb2bn three- expected to require a €1bn investment.
other events, including a change of year bond in May 2019. He said the municipality aimed for the
control. metro to carry 30% of the city’s passenger
!OYUANûHASû2MBBNû53BN ûOFû TRAFlCûUPûFROMûAûCURRENTûLEVELûOFû
public capital-market debt maturing or TURKEY
becoming puttable through to end-2022,
INCLUDINGû53MûINûSENIORûNOTESûDUEûINû ISTANBUL PREPARES INTERNATIONAL ZAMBIA
*ANUARYûûANDû53MûOFûNOTESûTHATû BOND TO FUND INFRASTRUCTURE
turn puttable in June 2022, according to BONDHOLDERS DEMAND DETAILS
Fitch. ISTANBUL’s mayor said the municipality was OF DEBT RELIEF
Moody’s has a Caa2 issuer rating on working on a possible international bond to
Aoyuan and a Caa3 rating on its bonds, fund new infrastructure projects, a year A group of ZAMBIA’s international
following a downgrade from B2 and B3, AFTERûTHEû4URKISHûCITYûCOMPLETEDûITSûlRSTû creditors said on Friday the country
respectively, on November 22. The Eurobond issue. would need to provide more details on
outlook was changed to negative from “We are working both on a bond issue its recently agreed IMF support
ratings under review. and our talks are continuing on foreign programme and its own economic

International Financing Review December 11 2021 47

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 10/12/2021
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

ASIA
Dec 7 2021 Weifang Binhai Investment €80m Dec 12 2022 5.1 100 - 5.1
Development
Dec 6 2021 BoCom HK branch HK$1.2bn Dec 13 2023 0.95 100 - 0.95

Dec 3 2021 Yi Hong International US$100m Dec 8 2024 3.5 100 - 3.5
Development Co
Dec 6 2021 Baoji Investment US$60m Dec 9 2024 3.35 100 - 3.35
Dec 6 2021 Junfeng International Co US$250m Dec 9 2024 2.2 100 - 2.2

Dec 6 2021 MingYang Smart Energy US$200m Dec 14 2024 1.6 100 Yld+1.6 % 1.6
(BVI) Company
Dec 7 2021 Greenko Power II US$1bn Dec 13 2028 (Dec 2027) 4.3 100 - 4.3

Dec 7 2021 Greenland Holding Group US$350m Aug 10 2022 7.974 100 - 8
Dec 7 2021 ITG Holding Investment (HK) US$300m Dec 12 2022 2.15 100 - 2.15

Dec 7 2021 Jinan Shuntong International US$100m Dec 12 2022 2 100 - 2

Co
Dec 7 2021 Wuxi Construction and US$300m Dec 14 2024 1.95 100 - 1.95
Development

Dec 8 2021 CEBI Splendid US$300m Dec 15 2024 2 99.336 T+125 2.23

Dec 8 2021 Sagicor Financial Corp US$150m incr May 13 2028 (May 2026) 5.3 101.5 - 5.023
(US$550)
Dec 8 2021 Yuyao Economic US$100m Dec 13 2024 2.5 100 - 2.5
Development Zone
Construction Investment and
Development
Dec 9 2021 Jingming Yuantong US$165m Dec 14 2024 2.9 100 - 2.9
Development Investment
(BVI) Co

Dec 9 2021 PINGDU CITY STATE- US$200m Dec 16 2024 5 100 - 5

OWNED ASSETS
MANAGEMENT CO LTD

EMEA
Dec 6 2021 Latvia €600m Jan 23 2030 0.25 99.896 MS+25 0.263

Dec 7 2021 Banca Comerciala Romana L600m Dec 9 2028 (Dec 2027) 5.98 100 ROMGB+65 5.98
LATAM
Dec 6 2021 Alsea US$500m Dec 14 2026 7.75 100 - 7.75

Dec 6 2021 Banco De Chile US$500m Dec 9 2031 2.99 97.578 T+185 3.276

Dec 7 2021 Pemex US$1bn Feb 16 2032 (Nov 2031) 6.7 99.976 - 6.7

plans if the two sides were to strike a “Inter-creditor equity should also be Committee expects the authorities to
debt relief deal. of paramount importance in the engage in simultaneous discussions
The group, made up of international authorities’ approach to restoring WITHûTHEû/FlCIALû#REDITORû#OMMITTEEû
funds that own the country’s now- debt sustainability,” the group, which for Zambia and the Bondholder
defaulted bonds, said it was also crucial calls itself the Zambia External Committee with equality of
that the likes of China, which has also Bondholder Committee, said in a information disclosure for both
leant heavily to cooper-rich Zambia, statement. groups.”
provided the same degree of debt relief, “To establish a process in which all :AMBIAûBECAMEû!FRICASûlRSTû
reports Reuters. PARTIESûHAVEûCONlDENCEûTHEû pandemic-era sovereign defaulter last

48 International Financing Review December 11 2021

 EMERGING MARKETS EUROPE/AFRICA

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

5.5% area, 5.1% - - - HaitongBk/Luso/Central/Haitong Intl -

1.3% area, 0.95% - - NR/A- BoCom/ABCHK/BoC/CCB/CMBCHK/ -

(the #) CA-CIB/HSBC/Industrial/StCh
- - - - Silk Road/Zheshang -

- - - - Fosun Hani/Dongxing/Wilson/TF -
2.7% area, 2.2% - - -/-/BBB+ Guotai Junan/Haitong Intl/Zhongtai/ -
Hua Xia/CMBC Cap/WingLung/CNCB
Capital /CMBCHK/SPDBI/ABCI/
Shenwan Hongyuan/Chiyu
1.9% area, 1.6% - - -/-/A BoC Macau/Luso/CCBA/CCB/
WingLung/SPDB/Industrial
4.625% area, 4.3% - US$2.47bn, 148acs Ba1/NR/BB Barc/BofA/DBS/DB/JPM/HSBC "Asia 39%, EMEA 34%, US 27%. FM
89%, Ins/PF/SWF 9%, Bks/PB 2%.
"
8% - - - BOCI
2.5% area, 2.15% - - - Luso/BoC Macau/ABCI/CISI/SPDBI/
Zheshang/Chiyu/CICC/Guotai Junan/
Xiamen International
2.4% area, 2% - - -/-/A- CCBI/BoC Macau/Luso/WingLung/
BOCOMI/Guotai Junan
2.5%, 1.95%/2% - - NR/NR/BBB+ StCh/CSI/CLSA/OCBC /Hua Xia/ -
WPIR, 1.95% CNCB Capital /BoCom/Industrial/
CMBCHK/Everbright HK/Zhongtai/
SPDB/WingLung
T+170 area, T+125 - US$1.2bn NR/NR/BBB CEB Intl/StCh/SPDB/CCBA/BoCom/ -
(the #) WingLung/Industrial/ABCI/ANZ/
BoC/BOCOMI/CCBI/CNCBI/CISI/
CICC/CMSHK/CMBCHK/CLSA/CMBC
Cap/CNCB Capital /Everbright Sec/
Guosen/Haitong Intl/Huatai/ICBCA/
Nanyang/Natx/Silk Road/SMBC
Nikko/Soochow/SPDBI/Tensant/BEA/
Zhongtai/CSI/Shenwan Hongyuan
- - - -/BB-/BB- JPM -

2.6% area, 2.5% - - Baa3/-/BBB- Guotai Junan/BOSC/Zheshang/ -

(the #) ChaoShang

3.2% area, 2.9% - - -/-/BBB- Central/ABCI/Industrial/Haitong -

Intl/CLSA/CNCB Capital /SunRiver
International/TF/CISI/Shenwan
Hongyuan
5.3% area, 5% - - - Orient/Hua Xia/CNCB Capital / -
Industrial/Donghai/Shenwan
Hongyuan/TF/Guoyuan/GLAM/
CICC/Zhongtai

MS+low 30s, MS+28 0 €2.35bn A3/A+/A-/ISS Barc/BNPP/CA-CIB -

area, MS+26 area ESG:2PO
(+/-1 WPIR), MS+25
- - - NR/NR/BBB+ BCRomana/Erste -

High 7%s - - B1/NR/BB- BBVA/BofA/Santan/Scotia/ -

BCPSecs/MUMSS/Rabo/SMBC
T+200 area, T+195 - US$1.5bn A1/A BofA/Citi/GS/JPM -
area (+/-5), T+185
6% area, 6.7% (the #) - US$5bn Ba3/BBB BofA/Citi/GS/HSBC -

November after years of chronic Zambia’s external debt includes IMF deal and a rise in copper prices,
government overborrowing had AROUNDû53BNûINûINTERNATIONALû which are now double the level they
already left it with far too much debt to BONDSû53BNûTOûMULTILATERALû WEREûWHENû#OVID ûlRSTûSAVAGEDûTHEû
repay. lending agencies such as the IMF and world economy.
After months of negotiations, last week ANOTHERû53BNûTOû#HINAûANDû#HINESEû “The Committee looks forward to
ITûPROVISIONALLYûAGREEDûAû53BNûTHREE entities. engaging with the authorities in a good
year IMF plan that will require it to slash The bonds that make up that debt faith and collaborative manner in the
spending and cut politically-sensitive have surged this year following the coming weeks,” the bondholder group
subsidies on power, fuel and farming. election of a new president keen on an added.

International Financing Review December 11 2021 49

 The bond offering received around ALSEA SEES GOOD DEMAND FOR
53BNûOFûORDERSûFROMûAûVARIETYûOFûINVESTORSû FIVE-YEAR NOTE
AMERICAS INCLUDINGûLARGEû53ûREALûMONEYûACCOUNTS
h)TûWASûWELLûRECEIVEDvûTHEûlRSTûSOURCEû Mexican restaurant operator ALSEA last week
said. The structure of the offering through PRICEDûAû53MûSENIORûUNSECUREDûNOTEû
CHILE RElNANCINGûANDûTENDERSûWASûEXPECTEDûTOû FETCHINGû53BNûINûORDERS
mATTENûTHEû0EMEXûYIELDûCURVE 4HEû!2EGû3ûlVE YEARûNON CALLûTWOû
BANCO DE CHILE HITS DOLLAR MARKET Initial price thoughts were in the high offering was priced at 7.75%. Initial price
6% area with the deal eventually landing thoughts were in the high 7% range. Books
BANCO DE CHILEûLASTûWEEKûPRICEDûAû53Mû at 6.70%. The bond was trading up above WEREûAROUNDû53BNûACCORDINGûTOûAû
10-year bond, attracting an order book of par by Friday. “If it had limped over the syndicate source.
AROUNDû53BN line and traded down it would have Alsea is rated B1 by Moody’s and BB– by
The deal was priced at a yield of 3.276% or eroded the economics of the exchange,” &ITCHûh!LSEASûRATINGSûREmECTûITSûSOLIDûPOSITIONûASû
spread of 185bp over Treasuries. Investors said the second source. The good ANûOWNERûANDûFRANCHISEûOPERATORûOFû123û
included high-grade and emerging market performance of the new issue “sets the cafeterias, and casual dining restaurants in
buyers, a syndicate member said. whole thing up.” Latin America and Europe,” said Fitch.
4HEûBANKûWHICHûISûAûFULLûSERVICEûlNANCIALû Pemex is offering to exchange 12 bonds !LONSOû3ANCHEZûAûVICE PRESIDENTûATû-OODYSû
institution providing credit and non-credit with maturities ranging from 2024 to 2030 said that one factor supporting its rating of Alsea
products and services and a broad retail for a combination of new securities and is “its diverse portfolio with leading brands that
network in Chile, was last in the market in cash, while it would make cash offers for six INCLUDEû3TARBUCKSûANDû$OMINOSûWHICHû
/CTOBERûWITHûAû3&RMûDUEûûBOND bonds with maturities between 2044 and ACCOUNTEDûFORûûOFûREVENUESûASûOFû3EPTEMBERv
The dollar offering, rated A1/A, was priced 2060. Alsea has a large presence in Mexico and
through Bank of America, Citigroupû"$ û Priority is being given to those bonds Europe, where it generates 87% of its revenues,
Goldman Sachs and JP Morgan. Initial price from 2024 to 2030 – the 12 bonds are ranked Moody’s said. The company also operates in
thoughts were in the low 200s over in order of priority of 1–11 (Pemex has two !RGENTINAû#HILEû#OLOMBIAûANDû5RUGUAY
Treasuries. 9.5% due 2027 bonds that will be considered BBVA, Bank of America, Santander and
Moody’s said its “debt rating as a single series for the purpose of the ScotiaBank were the active bookrunners.
ACKNOWLEDGESûTHEûBANKSûSOLIDûPROlTABILITYû exchange offer). The bonds ranked from
THATûISûSUPPORTEDûBYûAûDIVERSIlEDûREVENUEû 12–17 are the longer-dated ones subject to a ALL INTL EMERGING MARKETS BONDS
base and robust risk management”. cash tender only. BOOKRUNNERS: 1/1/2021 TO DATE
30ûSAIDû"ANCOûDEû#HILEûhHASûAûHIGHû “The liability management transaction Latin America
systemic importance for Chile, supported by does not target outstanding Pemex Managing No of Total Share
its sound market share as one of the largest securities maturing in 2022 and 2023, given bank or group issues US$(m) (%)
banks in the country and its ample banking the commitment from the government of
1 JP Morgan 67 16,817.92 13.0
access in the retail system”. Mexico to ensure budgetary allocations for 2 Bank of America 53 14,529.41 11.2
additional capital injections ... to cover said 3 Citigroup 54 13,535.88 10.4
maturities,” said Pemex. 4 Santander 53 10,947.04 8.4
MEXICO The early participation deadline for the 5 Morgan Stanley 35 9,693.48 7.5
offer to exchange old bonds for new 6 Goldman Sachs 39 9,336.40 7.2
PEMEX DRUMS UP BIG ORDERS AFTER securities or receive cash is December 20, 7 BNP Paribas 29 7,221.87 5.6
GOVERNMENT SHOWS SUPPORT WITHûAûlNALûDEADLINEûOFû*ANUARYûûFORûTHEû 8 HSBC 26 7,060.54 5.4
overall exercise. 9 Scotiabank 19 5,278.42 4.1
PEMEXûPRICEDûAû53BNû YEARûNOTEûOFFERINGû Bank of America, Citigroup, Goldman Sachs 10 BBVA 15 3,914.54 3.0
ONû$ECEMBERûûASûPARTûOFûAûLARGERûlNANCINGû and HSBC were the active bookrunners on Total 157 129,682.42
PACKAGEûTOûHELPûSTABILISEûITSûlNANCESûANDû the new issue and dealer managers on the Excluding equity-related debt.
manage its liabilities. liability management. Source: Refinitiv SDC code: L3
The Mexican state-owned oil and gas
company issued the bonds to support a ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS
liability management exercise, comprising BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE
exchange and cash tender offers, on a series Europe/Africa Middle East
OFûBONDSûTHATûHAVEûINûTOTALûABOUTû53BNûINû Managing No of Total Share Managing No of Total Share
principal outstanding. Pemex (Ba3/BBB) will bank or group issues US$(m) (%) bank or group issues US$(m) (%)
ALSOûRECEIVEû53BNûOFûCAPITALûFROMûTHEû 1 Standard Chartered 76 12,053.31 11.4
1 JP Morgan 73 19,028.32 15.1
Mexican government to support its 2 HSBC 57 11,175.73 10.6
2 Citigroup 60 16,495.86 13.1
RElNANCINGûEFFORTSû4HEûGOVERNMENTSû 3 Citigroup 41 10,612.93 10.0
3 BNP Paribas 33 8,482.75 6.7
assistance was a big factor in assuring 4 JP Morgan 40 10,005.63 9.5
4 Goldman Sachs 23 7,007.19 5.6
investors and driving demand, a source 5 Goldman Sachs 19 5,758.14 5.4
5 VTB Capital 22 5,747.25 4.6
close to the deal said. 6 BNP Paribas 18 4,380.71 4.1
6 Standard Chartered 24 5,581.09 4.4
The government’s outlay not only gives 7 First Abu Dhabi 25 3,938.87 3.7
7 Bank of America 20 5,107.22 4.1
clarity to the market around Pemex’s near- 8 MUFG 13 3,045.56 2.9
8 Societe Generale 23 4,864.94 3.9
TERMûFUNDINGûPROlLEûBUTûALSOûDEMONSTRATESû 9 UniCredit 21 4,780.76 3.8 9 Emirates NBD 23 2,604.01 2.5
to investors its commitment to the 10 HSBC 17 4,652.15 3.7 10 Mizuho 19 2,464.23 2.3
company, said another source. “It shows the Total 153 125,794.57 Total 148 105,850.90
market there is actual support. It’s a Excluding equity-related debt. Excluding equity-related debt.
powerful message,” he said. Source: Refinitiv SDC code: L2 Source: Refinitiv SDC code: L5

50 International Financing Review December 11 2021

 LOANS
Australia 52 Hong Kong 52 India 53 New Zealand 53 Taiwan 54 Vietnam 54 Czech Republic 55 Germany 56
Netherlands 56 Sweden 56 UK 57 United States 58 Leveraged Loans 58

„ FRONT STORY US MARKET

Lev loan rally set to continue in 2022

Loans expected to increase dominance over bonds in levfin next year
Leveraged loan volumes will continue to than high-yield bonds, given the acquisitions,” said Grant Moyer, head of
rise in 2022 as merger and acquisition REPAYMENTûmEXIBILITYûOFFEREDûBYûLOANSû leveraged capital markets at MUFG.
activity picks up and environmental, social DESPITEûTHEIRûHIGHERûPREMIUMSû0RIVATEû In 2021, private equity sponsors leaned
and corporate governance loans gain credit investors are increasingly chasing HEAVILYûONûLOANSûTOûlNANCEûBUYOUTSû4HEREû
traction, according to bankers speaking at lXED INCOMEûINVESTMENTSûTHROUGHOUTûTHEû were approximately 160 LBO loans issued
-5&'SûANNUALûLEVERAGEDûlNANCEûOUTLOOKû capital structure, which could further this year through the third quarter of 2021,
media roundtable in New York. bolster volumes. AûSIGNIlCANTûINCREASEûFROMûTHEûû,"/ûLOANSû
While both leveraged loans and high- “Second-lien provides a relatively ISSUEDûTHROUGHûTHEûlRSTûTHREEûQUARTERSûOFû
yield bonds have seen strong issuance in attractive return, and I think that the 2020.
2021, next year MUFG bankers anticipate [relative value] between second-lien and 4HEûAVERAGEû,"/ûLOANûSIZEûINûûCLOCKEDû
loans may be the asset class of choice. HIGH YIELDûWILLûNARROWvû-UNROûSAIDûh4HEû INûATûJUSTûUNDERû53MûWHILEûlFTYûOFû
Institutional loan issuance so far this dollars available in private credit and THESEûLOANSûEXCEEDEDû53BNûINûSIZEû4HESEû
year is US$798bn, while high-yield bond sponsors’ willingness to pay some included a sizable US$7.27bn term loan B to
volume is US$467.6bn, according to premium for second-lien will expand the fund the buyout of MEDLINE INDUSTRIES.
2ElNITIVû,0#ûDATAû4HISûCOMPRISESûANû TYPEûOFûlNANCINGSûTHATûSECONDûLIENSû Incorporating ESG features into leveraged
approximately 60/40 split between the two historically have encompassed from loans is expected to be one of the sector’s
asset classes, which bankers believe will modest-sized tranches to larger tranches.” SIGNIlCANTûTRENDSûDURINGûûASûITûWASûINû
likely widen in 2022. Average second-lien pricing in the third the investment-grade space during 2021.
“We’ll repivot to what has historically quarter was 680.88bp over Libor, down Interest among leveraged loan issuers in
been a two-thirds/one-third split between FROMûBPûINûTHEûlRSTûQUARTERû!VERAGEû ESG is increasing, especially among
leveraged loans and high-yield bonds in lRST LIENûPRICINGûINûTHEûTHIRDûQUARTERûWASû companies operating in more
terms of composition,” said Ryan Munro, 395.59bp over Libor, down from 402.78bp environmentally sensitive industries such as
head of leveraged capital markets INûTHEûlRSTûQUARTER the energy sector.
syndicate at MUFG. “I think we’ll start to COVANTA, a waste-to-energy company,
see some of the deals that were done as INCREASED M&A ACTIVITY grabbed attention in November when it
secured bonds [return] back to loan format, In addition, bankers anticipate increased agreed US$1.435bn of sustainability-linked
where they more naturally would have activity in mergers and acquisitions to LOANSûTOûlNANCEûITSûACQUISITIONûBYû%14û
been absent a dislocation in the loan bolster loan volume moving into next year, Infrastructure.
market when those deals were priced.” as prospects grow clearer for a further It included environmentally linked
According to Munro, the combination of return to normal from the height of the TARGETSûTHATûMAYûINmUENCEûPRICINGûANDûWASû
second-lien loans and unitranches will pandemic. THEûINDUSTRYSûlRSTûSUSTAINABILITY LINKEDû
LIKELYûSEEûAûSPIKEûINûVOLUMEû0RIVATEûEQUITYû “Absent any crazy variant, I think we’re LEVERAGEDûBUYOUTûlNANCINGûINûTHEû53û
sponsors favour second-lien loans more going to see more people want to do more Rhys Adams, Matthew Tracy

Investors pile into WOW! loan Fargo and M&T were joint-lead arrangers on
THEû7/7
ûlNANCING
h2IGHTûNOWûPARTICULARLYû#,/SûAREûGOINGûTOû
SOFR-based loan is latest to shun credit spread adjustment ASKûFORû;Aû#3!=ûBUTûIFûTHEYûOTHERWISEûLIKEûTHEû
DEALûTHEYREûGOINGûTOûBEûJUSTûlNEûWITHûAû
!û53MûlNANCINGûFORûTELECOMMUNICATIONSû oversubscribed, with only a handful of SIMPLERûCONSTRUCTûTHANûHAVINGûALLûTHEû#3!û
company WIDEOPENWEST saw heightened investors dropping out because of the mechanics in there,” the source said.
investor demand as accounts participating in ABSENCEûOFûAû#3! 4HEûLOANûCOMESûWITHûûSOFTûCALLûPROTECTIONû
the credit embraced the Secured Overnight “It priced at an appropriate level for the FORûSIXûMONTHSûANDûAMORTISESûATûûPERûANNUM
&INANCINGû2ATE PEGGEDûlNANCINGûTHATûDIDûNOTû rating,” a source said. “It looked like it had a 4HEûDEALûISûAMONGûAûSLEWûOFûRECENTû3/&2
include a credit spread adjustment. new issue concession to it, but it looked like based loans that priced without a credit
4HEûLOANûWHICHûMATURESûINû$ECEMBERû REGULARûWAYûONûTHATûPERSPECTIVEû4HEûmOORûISû spread adjustment, as lenders and bankers
ûlRMEDûATûBPûOVERû3/&2ûWITHûAûû 50 basis points, which is where everything is negotiate aspects of SOFR pricing ahead of
mOORûANDûANû/)$ûOFû GETTINGûDONEû4HATSûALSOûREGULARûWAYû)Tû $ECEMBERûûTHEûDATEûAFTERûWHICHûREGULATORSû
4HEûlRST LIENûlNANCINGûSLATEDûTOûRElNANCEû would be tough to argue that not having the say no new loans should be pegged to Libor.
existing debt does not include a separate #3!ûCOSTûTHISûISSUERûANYûMONEYv #ORPORATEûRATINGSûAREû"""nûANDûFACILITYû
spread compensation for the differential Morgan Stanley, KeyBank, Bank of America, ratings are B1/BB.
BETWEENû,IBORûANDû3/&2û4HEûDEALûWASûALSOû Credit Suisse, Goldman Sachs, Regions Bank, Wells Michelle Sierra

International Financing Review December 11 2021 51

 Commercial Bank, National Australia Bank, Although the new deal attracted two
SMBC, Taiwan Business Bank and Taiwan Japanese lenders, both joined from Hong
ASIA-PACIFIC Cooperative Banks are the banks joining the Kong.
facility. h#HINESEûCREDITSûAREûSTILLûCHALLENGINGûFORû
ANZ and Commonwealth Bank of Australia Japanese regional banks,” the source said.
AUSTRALIA were the mandated lead arrangers and Mizuho Bank was the mandated lead
bookrunners for the borrowing, which is ARRANGERûOFûTHEûDEALûWHICHûMARKSû0!)&,Sû
EBOS EYES LOAN FOR LIFEHEALTHCARE SPLITûINTOûAû!MûlVE YEARûTRANCHEû return a year after its debut in the Samurai
(facility A1) and a A$240m four-year piece loan market.
EBOS GROUP is seeking a A$540m (US$387m) (facility B). 4HEûLATESTûLOANûPAYSûAûlXEDûINTERESTûRATEûOFû
term loan for its proposed acquisition of 4HEûLOANûOFFERSûOPENINGûINTERESTûMARGINSû 
medical devices business LIFEHEALTHCARE OFûBPûANDûBPûOVERû""39ûFORûTHEûlVEû Earlier in the week, CMB INTERNATIONAL
FROMûPRIVATEûEQUITYûlRMû0ACIlCû%QUITYû and four-year tenors, respectively. LEASING MANAGEMENT, a wholly owned and
0ARTNERS (ONGû+ONG INCORPORATEDûUNITûOFû#-"û
Australia and New Zealand-listed BAPCOR COMPLETES REFI Financial Leasing, closed a ¥15bn three-year
HEALTHCAREûlRMû%BOSûISûALSOûRAISINGûUPûTOû Samurai green loan with four lenders.
A$742m in equity to fund the acquisition #ARûPARTSûSUPPLIERûBAPCORûHASûRElNANCEDû MUFG and SMBC were the mandated lead
and issuing A$23m of shares to part of a A$520m (US$371m) loan signed in ARRANGERSûBOOKRUNNERSûANDûGREENûlNANCEû
LifeHealthcare management. ûWITHûlVEûLENDERS structuring advisers of the transaction,
4HEûCOMPANYûEXPECTSûNETûDEBTLASTûû 4HREE YEARûTRANCHESûTOTALLINGû!Mû while Bank of Yokohama and Norinchukin Bank
months of pro forma Ebitda to be below 2.25 that were due in July 2022 have been joined as lead arrangers.
times at June 30 2022. extended into A$200m and A$70m tranches 0ROCEEDSûWILLûBEûUSEDûINûACCORDANCEûWITHû
Ebos has signed an agreement to acquire maturing in July 2025 and July 2026, #-"&,SûSUSTAINABLEûlNANCINGûFRAMEWORK
,IFE(EALTHCAREûFROMûFUNDSûADVISEDûBYû0%0û respectively. 4HEûLATESTû3AMURAIûISû#-"&,SûTHIRDûSUCHû
and other minority holders, comprising ANZ, HSBC, MetLife, MUFG and Westpac loan in as many years.
ûOFû,IFE(EALTHCARESû!USTRALIAûANDû.EWû Banking Corp are the lenders for the A$520m #-"û&INANCIALû,EASINGûHASûRAISEDûAûcBNû
:EALANDûSUBSIDIARIESûANDûûOFû borrowing, which also includes a A$150m (US$132m) three-year Samurai green loan
,IFE(EALTHCARESû!SIANûUNITû4RANSMEDICûFORû tranche maturing July 2024 and a A$100m from four lenders.
A$1.167bn. portion due July 2026.
#O FOUNDERSûOFû4RANSMEDICûWILLûRETAINûTHEû No changes were made to debt covenants
REMAININGû or security arrangements. HONG KONG
)Nû-AYûû0%0ûACQUIREDû,IFE(EALTHCAREû +0-'ûANDû!LLENSûADVISEDû"APCORûONûTHEû
VIAûITSûENTITYû0ACIlCû(EALTHû3UPPLIESû"IDCOû RElNANCING CHINA MERCHANTS UNIT LIFTS LOAN
backed by a A$139.65m buyout loan.
)Nû*ULYûTHATûLOANûWASûRElNANCEDûWITHûAû SOUTHERN CROSS AUSTEREO BAGS REFI 4HEûlNANCIALûLEASINGûUNITûOFûSTATE OWNEDû
!M EQUIVALENTûlVE YEARûLOAN CONGLOMERATEû#HINAû-ERCHANTSû'ROUPûHASû
Media company SOUTHERN CROSS AUSTEREO has increased its three-year loan to US$445.7m
HARVEY NORMAN INKS A$410m REFI signed a A$250m (US$179m) four-year from US$400m.
REVOLVINGûCREDITûFACILITYûFORûRElNANCINGûWITHû SMBC was the mandated lead arranger and
Electronics retailer HARVEY NORMAN has closed lVEûBANKS bookrunner of the transaction, which
a A$410m (US$292m) revolving credit ANZ, Mizuho Bank, National Australia Bank, offered an all-in pricing close to 140bp based
FACILITYûFORûRElNANCINGûAFTERûATTRACTINGûû SMBC and Westpac are the lenders on the on an interest margin of 108bp over Libor.
lenders in syndication. loan. Mandated lead arrangers are China Citic
Agricultural Bank of China, Bank of China, Westpac is the only new bank in the Bank and Shanghai Pudong Development Bank.
China Everbright Bank, First Commercial Bank, syndicate. 0ARTICIPANTSûAREûHang Seng Bank, Bank of East
Hua Nan Commercial Bank, Mega International +EYûlNANCIALûCOVENANTSûREMAINû Asia, DBS Bank, HSBC and OCBC Wing Hang.
unchanged, with the leverage ratio capped 4HEûBORROWERûISûCHINA MERCHANTS FINANCIAL
ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY at 3.5 times and the interest cover ratio LEASING (HONG KONG) HOLDING, a wholly owned

SYNDICATED VOLUME (INCLUDING JAPAN) required at a minimum of 3 times Ebitda. SUBSIDIARYûOFû#HINAû-ERCHANTSû#OMMERCEû

BOOKRUNNERS: 1/1/2021 TO DATE 0ROCEEDSûWILLûBEûUSEDûTOûREPAYûDRAWNûDEBTû &INANCIALû,EASINGûWHICHûISûTHEûMAINûlNANCIALû
Managing No of Total Share of A$128m. LEASINGûARMûOFû#HINAû-ERCHANTSû'ROUP
bank or group issues US$(m) (%) #HINAû-ERCHANTSû#OMMERCEû&INANCIALû
1 Mizuho 415 76,438.51 14.4 Leasing, rated Baa2/BBB/BBB+, is providing a
2 Bank of China 287 65,140.69 12.3 CHINA letter of comfort for the loan.
3 Sumitomo Mitsui 618 63,787.13 12.0 0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû
4 MUFG 651 51,512.22 9.7 PING AN INTL LIFTS SAMURAI general corporate purposes.
5 Ag Bank of China 36 17,911.85 3.4
6 HSBC 98 17,693.57 3.3 PING AN INTERNATIONAL FINANCIAL LEASING has PARKSON RETAIL BAGS HK$2.7bn LOAN
7 Standard Chartered 78 14,438.78 2.7 increased its three-year loan to ¥17.5bn
8 ANZ 49 13,563.50 2.6 (US$137m) after attracting four lenders in PARKSON RETAIL GROUP, a unit of Malaysia’s

9 CBA 47 10,311.12 1.9 syndication. Lion Group, has obtained a three-year loan
10 China Construction 43 10,264.30 1.9 4WOûNEWûLENDERSûFuyo General Lease and a OFûUPûTOû(+BNû53M ûFROMûlVEû
Total 2,694 530,275.86 Japanese regional bank, joined the existing lenders.
Proportional credit
LENDERSûTHEû4OKYOûBRANCHESûOFûAgricultural China Zheshang Bank is the facility agent of
Source: Refinitiv SDC code: S3a Bank of China and Bank of Communications. the borrowing, which attracted Chong Hing

52 International Financing Review December 11 2021

 LOANS ASIA-PACIFIC

Bank, Xiamen International Bank, China Bohai

Bank and Shanghai Rural Commercial Bank in
general syndication. Reliance makes green loan debut
0ROCEEDSûAREûFORûRElNANCINGûANDûGENERALû
corporate purposes. „ INDIA Financing backs acquisition of Norwegian firm
According to the facility agreement,
COMPANYûCHAIRMANû#HENGû(ENGû*EMûANDûHISû RELIANCE INDUSTRIES has signed a US$736m- It represents RIL’s largest overseas
WIFEû#HANû#HAUû(AûMUSTûREMAINûTHEû equivalent green loan to fund its acquisition of acquisition and a rare instance of an
LARGESTûULTIMATEûBENElCIALûOWNERSûOFû Norwegian solar panel manufacturer REC Solar Indian company acquiring assets from a
0ARKSONû2ETAILû4HEûDUOûHELDûAûSTAKEûOFû Holdings, marking the first such financing for the Chinese seller. China National Bluestar is
ûATûTHEûDATEûOFûTHEûANNOUNCEMENT Indian conglomerate. a unit of China National Chemical Corp
(ONGû+ONG LISTEDû0ARKSONû2ETAILûHASûû ANZ, Credit Agricole, DBS Bank, HSBC and (ChemChina).
DEPARTMENTûSTORESûINû-ALAYSIAûûINû#HINAû MUFG were the lenders on the borrowing, which On the same day, RNESL also announced
and nearly 20 others across Vietnam and is the first green acquisition financing from India. it was acquiring up to 40% in India’s Sterling
Indonesia. The borrowing is split into a US$250m six- and Wilson Solar. In August it had announced
year term loan, a US$150m working capital a US$50m investment in US energy storage
CABLE TV TOWER LOAN DRAWS FIVE facility and a S$460m (US$336m) five-year bank company Ambri.
guarantee facility. The acquisitions and the green loan mark
A consortium comprising real estate ANZ and MUFG took US$70m each of the RIL’s first steps in its goal to become a net
investment managers SCHRODER PAMFLEET and term loan, while DBS and HSBC took US$40m carbon zero company by 2035 and make India
BENTALLGREENOAK has closed a HK$1.614bn apiece. Credit Agricole was allocated US$30m. a hub for low-cost solar manufacturing.
(US$208m) four-year loan for the acquisition DBS, HSBC and MUFG took equal shares of The operator of the world’s biggest oil
of an industrial property from Hong Kong’s the working capital facility, while the first two refining complex at Jamnagar in western India
7HARFû$EVELOPMENT named banks split the bank guarantee facility said in June it would invest US$10.1bn in clean
Standard Chartered was the sole mandated equally. energy over three years.
lead arranger and bookrunner of the The term loan pays an interest margin of The conglomerate will invest Rs600bn
lNANCINGûWHICHûATTRACTEDûlVEûOTHERû around 120bp–125bp over Libor. (US$7.96bn) to build four giga factories at
lenders in syndication. MLA is Dah Sing Bank. Singapore-incorporated REC SOLAR is the Jamnagar to produce solar cells and modules,
Lead arrangers are China Construction Bank, borrower on the loan, while Reliance New Energy energy storage batteries, fuel cells and green
Cathay Bank, Mega International Commercial Solar, a wholly owned subsidiary of RIL and the hydrogen, Mukesh Ambani, RIL chairman and
Bank and E Sun Commercial Bank. acquiring entity, is the guarantor. one of Asia’s richest men, said at the time.
4HEû#ABLEû46û4OWERûAû STOREYûINDUSTRIALû The borrowing is also a rare acquisition REC Solar is a 25-year-old company with
PROPERTYûLOCATEDûINû(ONGû+ONGSû4SUENû7ANû financing from the Indian oil-to-telecoms three manufacturing facilities – two in Norway
district, serves as security for the deal, conglomerate, which opted for a term borrowing for making solar-grade polysilicon and one
which represents a loan-to-value ratio of instead of a short-term bridge facility as is in Singapore making photovoltaic cells and
ABOUTû typically employed in most M&A situations. modules.
4HEûLOANûOFFEREDûAûTOP LEVELûALL INûPRICINGû Drawdown of the loan took place on RIL plans to use REC Solar’s industry-
of 205.50bp via an interest margin of 198bp December 1 after which all outstanding liabilities leading technology in its fully integrated,
over Hibor. at REC Solar were settled and the acquisition metallic-silicon-to-PV-panel giga factory at
At the end of the maturity, the borrower was completed. Dhirubhai Ambani Green Energy Giga Complex
can choose to extend the loan for a year. On October 10, RNESL announced its in Jamnagar, initially starting with 4GW per
Lenders will be paid a 50bp extension fee. acquisition of 100% shareholding of REC Solar annum capacity and eventually growing to
On June 30, the consortium announced from China National Bluestar (Group) for an 10GW per annum.
the completion of the acquisition of an enterprise value of US$771m. Prakash Chakravarti
industrial property and parking spaces at
#ABLEû46û4OWERûANDû/NEû-IDTOWNû4HEû
premises comprise approximately 568,200 sq Axis Bank, Bank of Baroda, Bank of India,
ft of industrial space and 122 parking spaces. Canara Bank, DBS Bank, MUFG and SMBC are NEW ZEALAND
4HEû#ABLEû46û4OWERSûTENANTSûINCLUDEûAû the lenders on the US dollar portion.
television broadcasting station, telecoms "O)û3-"#ûANDûMizuho Bank are the banks LOAN EYED FOR HOSPITAL BUY
companies and logistics businesses. on the yen loan.
2%#ûHADûSENTûAûREQUESTûFORûPROPOSALSû Australian asset manager QIC and
in October for a US$100m-equivalent superannuation fund SUNSUPER are seeking a
INDIA lVE YEARûBORROWINGûINû53ûDOLLARSû LOANûOFûABOUTû!MnMû53Mn
ORûYENûWITHûANûUNSPECIlEDûGREENSHOEû $279m) backing their proposed acquisition
REC RETURNS FOR US$1.5bn LOAN option. of EVOLUTION HEALTHCARE in New Zealand.
4HEûINTERESTûRATEûONûTHEûLATESTûLOANûWILLû ANZ, Bank of China, Commonwealth Bank of
State-owned REC has picked eight banks for a BEûLINKEDûTOûTHEûDAILYûCOMPOUNDEDû4OKYOû Australia and ING BankûAREûARRANGINGûTHEûlNANCING
53BN EQUIVALENTûlVE YEARûBULLETûLOANû /VERNIGHTû!VERAGEû4ONAR ûBENCHMARKû 1)#ûONûBEHALFûOFû1)#û'LOBALû)NFRASTRUCTUREû
returning within weeks of closing a smaller WITHûAûlVEûWORKINGûDAYSûLOOK BACKûPERIODû Fund, and Sunsuper have signed a binding
US dollar borrowing that met a strong for the yen borrowing, and Libor for the US AGREEMENTûWITHûPRIVATEûEQUITYûlRMû0ACIlCû
response from the market. dollar loan. %QUITYû0ARTNERSûTOûACQUIREû%VOLUTIONû(EALTHCARE
4HEûLATESTûBORROWINGûISûSPLITûINTOûAû 4HEûLATESTûBORROWINGûISûTHEûFOURTHûVISITû )Nû-ARCHûû0%0ûBOUGHTûAûMAJORITYû
US$1.175bn facility and a US$325m- to the offshore loan market for the stake in Evolution Healthcare from funds
equivalent yen tranche. INFRASTRUCTUREûlNANCEûCOMPANYûTHISûYEAR AFlLIATEDûWITHûINVESTMENTûlRMû2/#û

International Financing Review December 11 2021 53

0ARTNERSû'OLDMANû3ACHSûFUNDûTHEûTARGETSû
founders and management.
Evolution Healthcare is a private hospital
network in New Zealand comprising 10
CPPIB sees Asian
comprehensive and day hospitals in addition
to a portfolio of ancillary healthcare
debt opportunity
facilities in the country and one private „ ASIA Canadian pension fund pursues new financings in China and India
hospital in Australia.
After committing over US$700m in debt to Asia Chan knows the Chinese market well,
DELEGAT GROUP RENEWS FACILITIES this year, the CANADA PENSION PLAN INVESTMENT having worked previously at SSG Capital with
BOARD is seeking opportunities to grow its credit responsibility for special situations investments
DELEGAT GROUP has renewed loans totalling portfolio in key markets such as China, India, and and secured lending in Greater China. He
NZ$333m (US$225m) with four existing Australia as the region opens up to non-bank has also worked as head of Greater China at
banks. lenders. Intermediate Capital Group and team head of the
Bank of New Zealand, China Construction Bank Canada’s largest pension fund manager real estate sector at HSBC.
(New Zealand), HSBC and Westpac are the is unfazed by recent developments in China, Prior to Chan’s hire in October 2019, CPPIB
lenders that have recommitted to the loans. particularly in the property sector which is facing invested Rmb704m (US$110m) in a loan to
4HEûLOANSûHAVEûTENORSûOFûTHREEûTOûlVEû a liquidity crunch. support an international sponsor’s purchase of
years, achieving a weighted average “Recent events in the real estate credit sector a non-performing loan portfolio in China. The
maturity of four years. have weighed on financing and lending activities portfolio is primarily backed by commercial
In 2019, the company extended the in China and we are watching the developments real estate properties in Guangzhou, one of the
maturity of its loan through to July 30 2022 closely,” said Raymond Chan, head of APAC country’s four tier-one cities.
with the four banks. credit at CPPIB. “While the events may have Globally, CPPIB invests across the credit
$ELEGATûISûAûPRODUCERûOFûBRANDEDû.EWû an impact on investor confidence in the credit structure, including term loans, high-yield bonds,
Zealand wine and markets its products in investments sector, we believe there are still many mezzanine lending, structured products and
Australia, New Zealand, Asia, North opportunities in China’s broader debt market.” other credit instruments for borrowers in all
America, Europe and the Middle East. “[In China], real estate continues to be the sectors.
most important sector in the credit market, given In Asia-Pacific, outside of public credits,
its market size and use of leverage,” said Chan. the investment manager is focused on sub-
SINGAPORE
OLAM RAISES SOFR CLUB LOAN Mandated lead arrangers are DBS Bank, KGI Commercial Bank are the mandated lead
Bank, Taipei Fubon Commercial Bank, O Bank and arrangers and bookrunners of the senior
Singapore-listed food and agri-business OLAM Shanghai Commercial & Savings Bank. Managers secured term loan.
INTERNATIONAL has raised a US$150m club loan are Hua Nan Commercial Bank and Taishin 4HEûTRANSACTIONûCOMPRISESûAû53Mû
pegged to the Secured Overnight Financing International Bankû0ARTICIPANTSûAREûKing’s Town tranche (facility A) for Vingroup and a US$100m
2ATEûAHEADûOFûTHEû$ECEMBER ENDûDEADLINEûTOû Bank and Taichung Commercial Bank. portion (facility B) for Vinfast. A US$100m
cease new US dollar Libor contracts. 4HEûDEALûOFFERSûANûINTERESTûMARGINûOFûBPûOVERû greenshoe option applies to both borrowers.
DBS Bank and Industrial and Commercial Bank ,IBORûANDûANûANNUALûFEEûOFûBPû4HEûBORROWERû Facility A pays an interest margin of
of China Singapore branch are the lenders on will pay any excess interest rate beyond a 40bp 302bp over Libor, while facility B offers
the one-year facility. DIFFERENCEûBETWEENû4!)&8ûANDû,IBOR BPû4HEûAVERAGEûLIFEûISûûYEARS
OLAM TREASURY is a co-borrower. 4HEûANNUALûFEEûWILLûBEûADJUSTEDûBASEDûONûTHEû Vingroup is guarantor on facility B for
0ROCEEDSûWILLûBEûUSEDûFORûGENERALû BORROWERSûAFTER TAXûNETûPROlTûMARGINûBPûFORû automotive manufacturer Vinfast.
corporate purposes. ANûAFTER TAXûNETûPROlTûMARGINûOFûûORûBELOWû Banks have been invited to lend to both
4HEûFACILITYûAGREEMENTûALSOûALLOWSûFORûTHEû BPûFORûABOVEûûANDûBPûFORûûORûHIGHER borrowers on a pro rata basis at three ticket
carve-out, separation, and proposed 4HEûBORROWERSûAREûCHAINWIN BIOTECH & levels.
DEMERGERûANDû)0/ûOFûONEûOFû/LAMSûUNITSû AGROTECH (CAYMAN ISLANDS)ûANDûITSûSIXû#HINA MLAs committing US$30m and above will
previously known as Olam Food Ingredients, based units, while Win Semiconductors is receive top-level all-in pricing of 338bp and
as per the company’s reorganisation plan the guarantor. 371bp based on fees of 150bp for both
announced on January 20 2020. Funds are for capital expenditure, facilities.
RElNANCINGûANDûWORKINGûCAPITALûPURPOSES ,EADûARRANGERSûJOININGûWITHû53Mn
$29m earn all-ins of 333bp and 366bp via
TAIWAN 130bp in fees, while arrangers taking
VIETNAM 53MnMûAREûOFFEREDûALL INSûOFûBPû
WIN SEMICONDUCTORS UPS LOAN and 362bp based via a 110bp fee.
VINGROUP, UNIT PAY UP 0ROCEEDSûWILLûBEûUSEDûFORûCAPITALû
4AIWAN LISTEDû7INû3EMICONDUCTORSûHASû ON GREEN DEBUT expenditure and general corporate purposes
increased a three-year loan for its units to INûLINEûWITHûTHEûû'REENû,OANû0RINCIPLESû
US$300m from a US$200m target after #ONGLOMERATEûVINGROUP and its subsidiary ISSUEDûBYûTHEû!SIAû0ACIlCû,OANû-ARKETû
attracting 10 banks in general syndication. VINFAST TRADING AND PRODUCTION have launched Association, and in compliance with
Far Eastern International Bank was the SYNDICATIONûOFûAûlVE YEARûDEBUTûGREENûLOANûOFû 6INGROUPSûSUSTAINABLEûlNANCEûFRAMEWORK
original mandated lead arranger and up to US$500m, offering slightly richer 0RICINGûONûTHEûLATESTûBORROWINGûISû
bookrunner of the transaction, while Mega pricing than their previous borrowing in 2019. marginally higher than on the previous
International Commercial Bank joined with the BNP Paribas, Cathay United Bank, Credit 53MûlVE YEARûDUAL TRANCHEûLOANûTHEû
same title. Suisse, HSBC, Maybank and Taipei Fubon two borrowers raised in late 2019.

54 International Financing Review December 11 2021

 LOANS EMEA

investment-grade corporate, structured, and India Credit Fund III, which lends in rupees to RAPID PROGRESS
real asset credit in both primary and secondary performing mid-market companies, and the The credit investments this year have helped
markets. distressed assets-focused India Resurgence CPPIB make rapid progress in Asia, with
Fund. sizeable individual holdings in a target range
INDIAN ALTERNATIVES It has played an active role in leveraged between US$50m and US$1bn-plus, and
Infrastructure credit is another theme CPPIB is financings from India, and is a lender on a private debt financing tenor usually ranging
actively pursuing in India as domestic players are US$165m deal completed in July for private between three and seven years.
increasingly looking for financing solutions from equity firm KKR’s acquisition of Vini Cosmetics. “The Asia-Pacific portfolio has more than
offshore investors. CPPIB lined up a US$185m mezzanine facility doubled in size since 2019,” said Chan. “We
In November CPPIB disclosed that it had to back Carlyle’s bid for Indian IT outsourcing expect the portfolio growth to continue as
committed C$115m (US$91m) in debt to a services provider Mphasis earlier this year, but Covid’s market impacts lessen and travel
portfolio of late-stage construction toll-roads the deal fell through after the acquisition hit a restrictions become less onerous.”
owned by Dilip Buildcon, a listed developer and valuation hurdle. However, the region accounts for a minuscule
operator of infrastructure assets in India. In September, CPPIB underwrote US$325m of portion of its global portfolio. As of March 31,
Chan also sees opportunities for alternative the US$500m unitranche loan backing BPEA’s CPPIB’s APAC credit assets totalled C$1.1bn,
lenders to provide financing to distressed and buyout of Singapore-headquartered business with C$300m in new investment activity since
mid-market companies in the country because process outsourcing company Straive. The deal April 2020 and a net return of 8.1% over that
financing conditions in domestic banking and is Asia’s biggest unitranche outside of Japan and period.
financial sectors have tightened since 2018 as a Australasia and represents a leverage multiple of CPPIB’s global credit portfolio totalled
result of a liquidity crunch at several non-bank 6.5 times–7 times with all-in pricing of 6.5%–7%. C$43.8bn at the end of March this year, while
financial companies. The target generates the majority of its revenues its net assets were C$497.2bn.
Last year subsidiary CPPIB Credit Investments from operations in India. Chan expects to grow CPPIB’s private credit
agreed to lend Rs7.25bn (US$98m then) to support CPPIB also committed HK$700m (US$90m) book further through opportunities not just in
JSW Project’s investment in distressed steelmaker alongside banks to a first-lien term loan that China and India, but Australia as well where it
BMM Ispat, which was the manager’s first Indian is part of a HK$2bn financing for CVC Capital is primarily focused on lending to companies
direct onshore rupee-denominated financing. Partners’ buyout of Hong Kong-based streetwear backed by both local and international
CPPIB also has exposure to India via apparel company IT and the subsequent carve- sponsors.
commitments to Baring Private Equity Asia’s out of its brands. Mirzaan Jamwal

Vinfast borrowed US$310m through Mirae Asset Finance (Vietnam) provides INûRIVALû)MMOlNANZûTOûABOUTûûFROMûû
facility A, while Vingroup raised US$265m RETAILûlNANCINGûSOLUTIONSûINCLUDINGûCASHû by way of a voluntary partial offer.
via facility B. instalment and secured loans, and
4HEûTRANSACTIONûPAIDûTOP LEVELûALL INûPRICINGû insurance.
of 369bp and 334bp based on margins of FAROE ISLANDS
335bp and 305bp over Libor for facilities A
ANDû"ûRESPECTIVELYû4HEûAVERAGEûMARGINûACROSSû BAKKAFROST LANDS €700m SLL
the loans for both borrowers was 325bp over
Libor, while the average life was 4.175 years. EUROPE/MIDDLE Salmon farming company BAKKAFROST has
EAST/AFRICA AGREEDûTERMSûFORûAûõMûlVE YEARû
MIRAE ASSET DOUBLES LOAN sustainability-linked revolving credit
facility.
MIRAE ASSET FINANCE (VIETNAM) has exercised the CZECH REPUBLIC 4HEûMULTICURRENCYûlNANCINGûWILLû
greenshoe on a dual-tranche loan launched BEûUSEDûTOûRElNANCEû"AKKAFROSTSû
in general syndication in July, doubling it to CPI PROPERTY TAPS BRIDGE existing bank facilities as well as for
US$100m after attracting four lenders in general corporate purposes including
general syndication. #ENTRALûANDû%ASTERNû%UROPEûFOCUSEDûCPI acquisitions.
Mizuho Bank was the mandated lead PROPERTY GROUP is backing its offer for 4HEû2#&ûINCLUDESûTHEûmEXIBILITYûTOûAGREEû
arranger and bookrunner of the transaction, !USTRIASû)MMOlNANZûWITHûAûõBNûBRIDGEû ANûUPûTOûõMûOFûADDITIONALûlNANCINGû
which is equally split into a two-year loan. during the life of the loan.
tranche A and a one-year tranche B. 4HEûBRIDGEûLOANûISûBEINGûPROVIDEDûBYûAû 0RICINGûONûTHEûFACILITYûWILLûBEûLINKEDûTOû
Bank of China, KEB Hana Bank, Kookmin Bank club of Banco Santander, Credit Suisse, Erste, the company’s performance on
came in as MLAs, while Woori Bank joined as Goldman Sachs, HSBC, Raiffeisen Bank sustainability key performance indicators
a lead arranger. International, Societe Generale-Komercni Banka aligned to Bakkafrost’s overall ESG targets
4HEûDEALûOFFEREDûTOP LEVELûALL INûPRICINGûOFû and UniCredit. and ambitions.
172.5bp and 335bp for tranches A and B, #0)0'ûISûAûLONG TERMûOWNERûOFûINCOME 0RINCIPALûlNANCIALûCOVENANTSûCOMPRISEû
respectively, based on interest margins of GENERATINGûREALûESTATEûINûTHEû#ZECHû2EPUBLICû ANûEQUITYûRATIOûOFûNOTûLESSûTHANûûANDû
155bp and 300bp over Libor. "ERLINûANDûTHEû#%%ûREGIONû4HEûCOMPANYûISû interest coverage of no less than two times.
4RANCHEû!ûCARRIESûAûGUARANTEEûFROMû-IRAEû headquartered in Luxembourg and its Rabobank, DNB Bank and Nordea have
!SSETû#APITALûTHEûDIRECTûPARENTûOFû-IRAEû shares are listed on the Frankfurt Stock agreed to continue their support as
Asset Finance (Vietnam), while tranche B Exchange. lenders.
comes with a letter of comfort, because of !FTERû#0)û0ROPERTYûANNOUNCEDûPLANSûFORûTHEû 4HEû2#&ûISûSUBJECTûTOûTHEûFACILITYû
which the longer-term piece pays a lower takeover offer, Austrian real estate company S agreement, which is expected during the
margin. Immo said it would increase its shareholding lRSTûQUARTERûOFû

International Financing Review December 11 2021 55

 0RICINGûONûTHEûFACILITYûWILLûBEûADJUSTEDû be supported by the company’s largest
GERMANY based on NSI’s performance on four key shareholders.
performance indicators comprising the $ESPITEûANûINCREASEûINûLEVERAGEû3ECURITASû
VW TAKES DEBUT SLL percentage of buildings labelled at least is committed to and expects to maintain its
BREEAM “very good”; the percentage of INVESTMENT GRADEûRATINGûWITHû30û"""! û
VOLKSWAGEN HASûAGREEDûAûõBNûTHREE YEARû BUILDINGSûWITHû%0#û!ûENERGYûLABELSû WITHûAûSTABLEûOUTLOOK û4HEûCOMPANYûWILLû
LOANûTHEûCOMPANYSûlRSTûSUSTAINABILITY sustainable investments as a percentage of focus on deleveraging over the short term.
linked loan with margins tied to the capex; and the company’s GRESB rating. 4HEûACQUISITIONûISûEXPECTEDûTOûCLOSEûINûTHEû
COMPANYûACHIEVINGûITSû#/ûmEETûEMISSIONû h4HEûINCLUSIONûOFûTHISûFRAMEWORKûCEMENTSû lRSTûHALFûOFû
reduction target in Europe. NSI’s strategy to fully integrate
0ROCEEDSûWILLûBEûUSEDûFORûRElNANCINGûANDû sustainability into all aspects of its business KARNOV INKS €160m BRIDGE
to cover new liquidity requirements. ANDûOPERATIONSvû.3)û#&/û!LIANNEûDEû*ONGû
Credit Agricole COORDINATEDûTHEûlNANCINGû said. “We believe this is critical as the Information services company KARNOV is
with Santander, BayernLB, Commerzbank, Intesa lNANCIALûPERFORMANCEûANDûLONG TERMû backing its acquisition of the information-
Sanpaolo and Societe Generale also participating. viability of assets and businesses become BASEDûBUSINESSESûOFû4HOMSONû2EUTERSûINû
h)NûTHEûFUTUREûWEûWILLûLINKûOURûlNANCINGû increasingly correlated to their Spain and Wolters Kluwers in Spain and
portfolio even more closely to these sustainability.” &RANCEûWITHûAûõM EQUIVALENTûBRIDGEûLOANû
ambitious decarbonisation targets,” said ABN AMRO, ING, Rabobank and "ELlUSûare from Nordea.
#&/û!RNOû!NTLITZûh&OLLOWINGûTHEûSUCCESSFULû PROVIDINGûTHEûlNANCINGûWITHû!".ûASû Karnov will repay part of the bridge loan
placement of green bonds, we are now also sustainability coordinator and documentation through an issue of new shares
meeting the growing demand for AGENTû.AUTA$UTILHûADVISEDû.3) CORRESPONDINGûTOûATûLEASTûûOFûITSûEXISTINGû
SUSTAINABLEûlNANCIALûINSTRUMENTSûINûTHEû shares.
area of loans.” After the share issue, expected pro forma
67ûBECAMEûTHEûlRSTûCARûMANUFACTURERûTOû NORWAY net debt would be round 4.5 times as of the
COMMITûTOûTHEû0ARISû!GREEMENTûCLIMATEû end of June 2021.
targets in 2018 and has set itself a goal of HEXAGON NETS REFINANCING Karnov provides information across the
becoming net carbon neutral by 2050. areas of legal, tax and accounting and
As part of its new auto e-mobility strategy, #OMPOSITEûCYLINDERûMAKERûHEXAGON environmental, health and safety.
the company has integrated decarbonisation COMPOSITES has signed a NKr1.7bn (US$168m) 4HEûACQUISITIONSûWHICHûAREûEXPECTEDûTOû
as part of its ESG, decarbonisation and LOANûRElNANCING be completed in 2022, will expand Karnov’s
integrity initiative. 4HEûlNANCINGûINCLUDESûAû.+RBNûTHREE legal information services from its Nordic
67ûISûAIMINGûFORûûOFûITSûGLOBALûVEHICLEû year term loan and a NKr350m BASEûINû$ENMARKûANDû3WEDENûANDûTOû
deliveries to be all-electric by 2030. multicurrency revolving credit facility with establish a strong market presence in Spain
an initial three-year maturity and two and France.
additional one-year extension options. 0RIVATEûEQUITYûlRMû'-4û#OMMUNICATIONSû
NETHERLANDS 4HEûlNANCINGûWASûAGREEDûWITHûTWOûBANKSû 0ARTNERSûACQUIREDû+ARNOVûINûûAFTERûITSû
including Hexagon’s existing lender DNB SEPARATIONûFROMû4HOMSONû2EUTERSûSELLINGûITû
NSI ADDS SUSTAINABILITY Bank, which is also providing a NKr250m TOû2OTHSCHILDSû&IVEû!RROWSû0RINCIPALû
bilateral overdraft facility. Investments in 2015. Five Arrows exited the
#OMMERCIALûPROPERTYûINVESTORûNSI has !SûPARTûOFûTHEûRElNANCINGû(EXAGONû COMPANYûINûûTHROUGHûANû)0/ûOFûTHEû
AMENDEDûITSûõMûREVOLVINGûCREDITûFACILITYû intends to call all its outstanding bonds. company.
to include a sustainability-linked margin. 0REVIOUSLYû(EXAGONûHADûAûBILATERALû
4HEû2#&SûMATURITYûHASûBEENûRESETûFORûAûNEWû NKr600m multicurrency senior secured ELECTROLUX BAGS DEBUT SLL
lVE YEARûTERMûWITHûTWOûONE YEARûEXTENSIONû revolving credit facility and overdraft
OPTIONSûGIVINGûTHEûCOMPANYûmEXIBILITYûTOû facility that was due to mature in March Home appliance maker ELECTROLUX has
execute its development programme. 2023. SIGNEDûAûõBNûSUSTAINABILITY LINKEDû
Hexagon makes high-pressure cylinders, REVOLVINGûCREDITûFACILITYûRElNANCINGûITSû
EMEA LOANS BOOKRUNNERS – FULLY FUELûSYSTEMSûANDûLOW PRESSUREû,0'ûCYLINDERS EXISTINGûõBNû2#&ûTHATûWASûDUEûTOûMATUREûINû
SYNDICATED VOLUME May 2023.
BOOKRUNNERS: 1/1/2021 TO DATE 4HEûMULTI CURRENCYûlNANCINGûHASûAûlVE
Managing No of Total Share SWEDEN year maturity with options to extend for up
bank or group issues US$(m) (%) to two years.
1 BNP Paribas 200 48,087.74 7.3 SECURITAS TAPS FOR B&D BUY 0RICINGûISûLINKEDûTOûTHEûCOMPANYSû
2 Societe Generale 115 42,801.39 6.5 sustainability goals, including being climate
3 Credit Agricole 184 37,460.56 5.7 Security services group SECURITAS is backing neutral in its operations by 2030; to be a
4 Deutsche Bank 114 34,234.06 5.2 its US$3.2bn transformative acquisition of LEADERûINûENERGY EFlCIENTûPRODUCTSûTHATû
5 Bank of America 90 33,696.09 5.1 3TANLEYû"LACKûû$ECKERSûELECTRONICûSECURITYû reduce carbon emissions while in use; and
6 JP Morgan 101 32,538.86 5.0 unit with a fully committed bridge loan to continue ensuring the health and safety
7 UniCredit 140 26,929.34 4.1 underwritten by SEB. of its employees.
8 Citigroup 77 24,010.69 3.7 4HEûBRIDGEûLOANûWILLûBEûRElNANCEDûAFTERû 4HEûTARGETSûAREûALIGNEDûWITHûTHEû
9 Morgan Stanley 32 23,371.29 3.6 the completion of the acquisition by a mix company’s “For the Better 2030”
10 HSBC 99 23,045.17 3.5 of equity and long-term debt. sustainability framework.
Total 734 655,443.05 4HEûEQUITYûCOMPONENTûOFûTHEûRElNANCINGû 4HEûlNANCINGûCLOSEDûOVERSUBSCRIBEDûWITHû
Proportional credit will come from the proceeds of an around syndicate of 11 banks and was increased
Source: Refinitiv SDC code: R17 US$915m-equivalent rights issue, which will FROMûõMûATûLAUNCH

56 International Financing Review December 11 2021

 LOANS NORTH AMERICA

Citigroup and SEB were coordinating 0RICINGûISûLINKEDûTOû%3'ûKEYûPERFORMANCEû DUNELM TAKES SLL

bookrunners and mandated lead indicators, focused on social and
arrangers. environmental targets aligned to Homeware retailer DUNELM has agreed a
Danske Bank, Deutsche Bank and HSBC EU.ETWORKSû%3'ûANDûlNANCIALûFRAMEWORKS £185m sustainability-linked revolving credit
joined as bookrunners and mandated lead 4HEûDEALûATTRACTEDûSIGNIlCANTûINTERESTû FACILITYûREPLACINGûITSûEXISTINGûaMû2#&û
arrangers, while Banco Bradesco, BNP from infrastructure investors with a group which was due to mature in March 2023.
Paribas, JP Morgan, Morgan Stanley, Svenska of 16 banks and blue-chip institutional 4HEûUNSECUREDû2#&ûWHICHûISû$UNELMSû
Handelsbanken and Swedbank joined as investors participating. lRSTû3,,ûHASûAûFOUR YEARûMATURITYûWITHû
mandated lead arrangers. Lenders comprise Allianz Global Investors, extension options for up to two further
#ITIGROUPûISûDOCUMENTATIONûAGENTûWHILEû Axa IM Alts, Edmond de Rothschild AM Bridge, years.
3%"ûISûSUSTAINABILITYûCOORDINATORû$ANSKEû MEAG, Schroders Capital, Vantage 0RICINGûONûTHEûFACILITYûISûLINKEDûTOûFOURû
Bank is facility agent. Infrastructure, Sabadell, DNB, Export sustainability performance targets aligned
Development Canada, Intesa Sanpaolo, Lloyds, to the company’s sustainability plans,
National Australia Bank, NatWest, NIBC, including its commitment to pursue a Net
SWITZERLAND Santander and Royal Bank of Canada. :EROû0ATHWAY
2"#ûWASûDEBTûADVISERûTOûEU.ETWORKSûWITHû 4ARGETSûCOMPRISEûAûûREDUCTIONûINû
MERCURIA UNITS NET US$2.2bn !LLENûû/VERYûWASûLEGALûADVISERû4HEûLENDERSû $UNELMSûGREENHOUSEûGASûEMISSIONSûBYûû
were advised by Latham & Watkins. against a 2019 base, in line with the Science
Energy trader MERCURIA’s North American 53ûPRIVATEûEQUITYûlRMû3TONEPEAKû "ASEDû4ARGETSûINITIATIVEûûDEGREESûSCENARIO
operating subsidiaries have closed a )NFRASTRUCTUREû0ARTNERSûACQUIREDûAûMAJORITYû 4HEûCOMPANYûISûAIMINGûFORûALLûOWNû
US$2.2bn senior secured borrowing base stake in euNetworks in 2018, backing the brand cotton products to meet its “More
facility, replacing a US$1.7bn one-year DEALûWITHûAûõMûLEVERAGEDûLOANûARRANGEDû Responsible Sourced” standard by 2025, as
lNANCINGûAGREEDûLASTûYEAR BYû"ARCLAYSûALONGSIDEû*0û-ORGANûANDû2"# WELLûASûAûûREDUCTIONûINûPLASTICû
4HEûFACILITYûWILLûBEûUSEDûTOûlNANCEûTHEû 4HATûlNANCINGûCOMPRISEDûAûõMû packaging of its own brand products by
working capital needs in North America, SEVEN YEARûTERMûLOANû"ûANDûAûõMûSIX YEARû 2024.
ASûWELLûASûBACKINGûITSûCAPACITYûTOûlNANCEû revolving credit facility. $UNELMûWILLûALSOûLOOKûTOûPROVIDEûAû
the ongoing transition into green energy CUSTOMERûTAKE BACKûSERVICEûFORûûOFûITSû
through its growing renewable portfolio in DIVERSIFIED ENERGY WRAPS PRODUCTSûBYûû4AKE BACKûSERVICESû
North America. BORROWING BASE involve collecting used products and
Borrowers under the facility are materials from consumers for
Mercuria Energy America, Minerva London-listed gas and oil producer reprocessing.
Bunkering (USA), and Mercuria DIVERSIFIED ENERGY has completed the semi- 0ROGRESSûONûTHEûTARGETSûWILLûBEûMEASUREDû
#OMMODITIESû#ANADAû#ORP annual redetermination of its senior ANNUALLYûANDûVERIlEDûBYûANûINDEPENDENTû
4HEûlNANCINGûCLOSEDûOVERSUBSCRIBEDû secured credit facility, increasing the external assurance provider and published
allowing Mercuria to increase the size by borrowing base on the loan by US$200m to INû$UNELMSûANNUALûREPORT
US$500m and add a two-year tranche. US$825m. Based on performance against these
Societe Generale, MUFG, Rabobank, ING and 4HEûINCREASEûCOMESûONûTHEûBACKûOFû targets, there will be a 2.5bp premium or
SMBC were joint lead arrangers and joint higher commodity prices and added reduction to the base margin.
bookrunners. Societe Generale acted as COLLATERALûFROMû$IVERSIlEDSûACQUISITIONûOFû
administrative agent and collateral agent, /KLAHOMA BASEDû4APSTONEû%NERGY HILTON EYES REFINANCING
while MUFG, Natixis, Rabobank, ING and h4HEûMOREûTHANûûINCREASEûINûTHEû
3-"#ûACTEDûASûCO SYNDICATIONûAGENTSûCredit CREDITûFACILITYûBORROWINGûBASEûAFlRMSûOURû Foods and meals producer HILTON FOOD is
Agricole CIB, Mizuho and UniCredit are BANKSûTRUSTûINû$IVERSIlEDSûSTEWARDSHIPû LOOKINGûTOûRElNANCEûaMûOFûDEBTû
participating as co-documentation agents ANDûCONlDENCEûINûOURûASSETSûTOûGENERATEû FACILITIESûAFTERûAGREEINGûTHEûõMû
with an additional 10 banks participating STRONGûFREEûCASHmOWûTOûSUPPORTûOURû ACQUISITIONûOFû$UTCHûSMOKEDûSALMONû
at various commitment levels. business, repay our borrowings, fund our producer Foppen.
ESG initiatives for our stakeholders and 4HEûRElNANCINGûTOGETHERûWITHûCASHû
sustain our dividends for investors,” Rusty balances, will provide funds for future
UK (UTSONû*Rû#%/ûOFû$IVERSIlEDûSAID capital investment and Hilton’s working
4HEûNEXTûREDETERMINATIONûOFûTHEûFACILITYû capital requirements.
EUNETWORKS INKS ESG-LINKED REFI is scheduled for the second quarter of 4HEûACQUISITIONûOFû&OPPENûINCLUDINGûAû
2022. £10m cash injection and working capital
"ANDWIDTHûlBREûNETWORKûOPERATORû 4HEûCREDITûFACILITYûWHICHûISûSECUREDûBYû FUNDINGûWILLûBEûMAINLYûlNANCEDûTHROUGHû
EUNETWORKS HASûCOMPLETEDûTHEûRElNANCINGû natural gas and oil properties, matures in an equity placing of about £75m, which
OFûITSûDEBTûTHROUGHûAûõMûSUSTAINABILITY July 2023 and pays a margin of 250bp over WILLûALSOûBEûUSEDûTOûPARTIALLYûRElNANCEûTHEû
LINKEDûLONG TERMûINFRASTRUCTUREûlNANCING one-month Libor with a pricing grid acquisition of UK meat supplier Fairfax
4HEûlNANCINGûINCLUDESûSIGNIlCANTû ranging between 200bp and 300bp Meadow which was announced in October.
undrawn, committed debt facilities to depending on utilisation. Rabobank and Ulster Bank are also
fund the construction and development 4HEûBANKûSYNDICATEûONûTHEûFACILITYûISûLEDû providing a committed acquisition bridge
of the company’s next generation critical by KeyBank and includes BBVA, Branch loan.
bandwidth infrastructure in Europe as Banking & Trust, Citizens Bank, DNB Bank, Hilton agreed two syndicated loans in
well as a large committed revolving Huntington Bank, RBC, CIBC, ING, US Bank, 2017 via Royal Bank of Scotland, Barclays
capital expenditure facility to CIT Bank, Credit Agricole CIB, First Tennessee ANDû(3"#û4HOSEûLOANSûWEREûUSEDûTOûPART
support organic growth opportunities Bank and IberiaBank, as well as Credit Suisse, lNANCEû(ILTONSûACQUISITIONûOFû5+ûCHILLEDû
and M&A. Goldman Sachs and Morgan Stanley. lSHûPRODUCERû)CELANDICû'ROUP

International Financing Review December 11 2021 57

 00,ûANDûTHEûBORROWINGûENTITIESûAREûALLû
RATEDû!nûBYû30
NORTH AMERICA LEVERAGED LOANS
DOLLAR GENERAL NETS RCF

UNITED STATES $ISCOUNTûRETAILERûDOLLAR GENERAL signed a UNITED STATES

53BNûlVE YEARûREVOLVINGûCREDITûFACILITYû
PPL UNITS SIGN RCFS that can be increased by up to US$500m. SS&C TAPS FOR BLUE PRISM BUY
0RICINGûONûTHEû2#&ûWHICHûREPLACESûAû
Subsidiaries of utilities company PPL have signed loan from 2019, is linked to the borrower’s 53 BASEDûlNTECHûCOMPANYûSS&C TECHNOLOGIES
US$2.8bn of amended and extended loans. debt rating. is backing its £1.24bn acquisition of UK
4HEûFACILITIESûCOMPRISEûAû53BNû &ORû!!nûTHEûFACILITYûFEEûISûBPûANDûTHEû SOFTWAREûGROUPû"LUEû0RISMûWITHû53BNû
REVOLVINGûCREDITûFACILITYûFORû00,û#APITALû margin is 79.5bp over Libor; for Baa1/BBB+ of senior secured incremental term loans
&UNDINGûAû53Mû2#&ûFORû00,û%LECTRICû it is 9bp and 91bp; for Baa2/BBB it is 11bp arranged by Royal Bank of Canada.
5TILITIESû#ORPûAû53Mû2#&ûFORû,OUISVILLEû ANDûBPûFORû"AA"""nûITûISûBPûANDû 4HEûSEVEN YEARûlNANCINGûPAYSûAûMARGINûOFû
'ASûANDû%LECTRICû#OûANDûAû53Mû2#&ûFORû BPûANDûFORûLOWERûTHANû"AA"""nûITûISû 200bp over Libor, or if closing occurs after
+ENTUCKYû5TILITIESû#O 17.5bp and 132.5bp. the end of 2021, SOFR with a maximum
4HEûFACILITYûFORû00,û#APITALû&UNDINGûWASû #OVENANTSûRESTRICTû$OLLARû'ENERALSû CREDITûSPREADûADJUSTMENTûOFûBPû4HEREûISûAû
decreased from US$1.45bn on the existing leverage ratio to a maximum of 3.75 times ûmOOR
DEALû4HATû2#&ûFEATURESû00,û#ORPûASû ANDûITSûlXEDûCHARGEûCOVERAGEûRATIOûTOûAû 4HEûACQUISITIONûISûEXPECTEDûTOûCOMPLETEûINû
guarantor and includes provisions for minimum of two times. 2022.
.ARRAGANSETTû%LECTRICû#OûTOûBEûADDEDûASûANû 4HEûNEWû2#&SûPRICINGûISûUNCHANGEDû 33#SûALL CASHûOFFERûOFûûPENCEûPERû
additional borrower. from the replaced US$1.25bn from 2019. "LUEû0RISMûSHAREûWASûHIGHERûTHANûITSûEARLIERû
Each of the facilities’ maturity dates has Citigroup is the administrative agent. possible bid of 1,200 pence, and above
BEENûEXTENDEDûTOû$ECEMBERûûûFROMû Additional lenders are US Bank, Wells Fargo, PRIVATEûEQUITYûlRMû6ISTASûlNALûOFFERûOFû
January 2024. Goldman Sachs, Fifth Third Bank, JP Morgan, 1,250 pence.
0RICINGûISûTHEûSAMEûFORûTHEûFOURûFACILITIESû PNC Bank, Regions Bank, Truist Bank, Bank of Vista backed its offer with a US$1.415bn
and is based on debt ratings. For A1/A+ the the West, Capital One, Huntington National term loan B2 raised in October. Nomura,
commitment fee is 7.5bp and the margin is Bank, KeyBank, BMO Harris Bank, First Horizon *EFFERIESû++2û-ACQUARIEû#APITALûANDû/AKû
87.5bp over Libor; for A2/A it is 10bp and Bank and Northern Trust. Hill were joint lead arrangers and joint
BPûFORû!!nûITûISûBPûANDûBPû $OLLARû'ENERALûISûRATEDû"AAûBYû-OODYSû bookrunners on that loan.
for Baa1/BBB+ it is 17.5bp and 125bp; for ANDû"""ûBYû30 Healthcare company SEVITA is in the
Baa2/BBB it is 20bp and 150bp; and for Baa3/ market with a fungible US$200m
"""nûITûISûBPûANDûBP CSC RAISES DEBT FOR INTERTRUST INCREMENTALûlRST LIENûTERMûLOANû"ûTHATûWILLû
#OVENANTSûFORûEACHûOFûTHEûREVOLVERSû fund an acquisition pipeline.
restrict the borrowers’ maximum US-based corporate, legal and tax services 4HEûLOANûWHICHûMATURESûINû-ARCHûû
consolidated debt to consolidated provider CORPORATE SERVICES COMPANY is ISûOFFEREDûATûBPûOVERû,IBORûWITHûAûû
CAPITALISATIONûRATIOûTOû BACKINGûITSûõBNûACQUISITIONûOFû$UTCHû mOORûINûLINEûWITHûANûEXISTINGûLOANû)TûCOMESû
Wells Fargo is the administrative agent for lNANCIALûSERVICESûlRMû)NTERTRUSTûWITHû WITHûAûû/)$
EACHûFACILITYû4HEûOTHERûLENDERSûAREûJP AROUNDûõBNûOFûSENIORûTERMûDEBTûFROMûAû 4HEûMARGINûISûTIEDûTOûAûBPûSTEPûDOWNû
Morgan, Bank of America, Barclays, Mizuho, Bank group of banks. WHENûTHEûlRST LIENûNETûLEVERAGEûISûûTIMESû
of Montreal, CIBC, Credit Suisse, Goldman Sachs, 4HEûDEBTûWHICHûISûFULLYûCOMMITTEDûONûAû and another 25bp step down at 4.4 times.
Morgan Stanley, MUFG, PNC, RBC, Bank of Nova certain funds basis, will be used, along It comes with 101 soft call protection for
Scotia, Truist, US Bank, Banco Santander, Bank of with available cash, to fund the SIXûMONTHSûANDûAMORTISESûATûûPERûANNUM
New York Mellon, TD, First National Bank of ACQUISITIONûTHEûRElNANCINGûOFû)NTERTRUSTSû Goldman Sachs is the lead-left arranger.
Pennsylvania and Huntington National Bank. existing debt; the settlement of fair value #ORPORATEûANDûTRANCHEûRATINGSûAREû""
of Intertrust’s derivatives; and the Real estate software provider REALPAGE
AMERICAS LOANS BOOKRUNNERS – FULLY payment of fees. launched a fungible incremental US$260m
SYNDICATED VOLUME *EFFERIESûISûACTINGûASûLEADû-!ûlNANCIALû lRST LIENûTERMûLOANûTOûFUNDûITSûACQUISITIONûOFû
BOOKRUNNERS: 1/1/2021 TO DATE ADVISERûTOû#3#ûWHILEû7ELLSû&ARGOûISû PEERû(OME7ISE$OCS
Managing No of Total Share ASSISTINGûlNANCIALûADVISER 4HEûTERMûLOANûISûGUIDEDûATûBPûOVERû
bank or group issues US$(m) (%) $EUTSCHEû"ANKûANDû'OLDMANû3ACHSûAREû ,IBORûWITHûAûûmOORûTHEûSAMEûASûTHEû
1 Bank of America 1395 397,984.49 12.8 ACTINGûASû)NTERTRUSTSûlNANCIALûADVISERSûWITHû EXISTINGûCOVENANT LITEûlRST LIENûLOANûANDûAû
2 JP Morgan 1210 359,426.79 11.6 2OTHSCHILDûACTINGûASûINDEPENDENTûlNANCIALû û/)$
3 Citigroup 612 226,698.73 7.3 adviser to Intertrust’s supervisory board. UBS and Credit Suisse are lead arrangers for
4 Wells Fargo 937 218,208.23 7.0 4HEûACQUISITIONûISûEXPECTEDûTOûCLOSEûINû the transaction.
5 Goldman Sachs 457 126,623.94 4.1 the second half of 2022.
6 RBC 491 113,364.08 3.7 4HEûALL CASH OFFERûVALUESû)NTERTRUSTû FLEETCOR SEEKS US$1bn ADD-ON
7 Barclays 492 112,884.71 3.6 SHARESûATûõûEACHûAûPREMIUMûOFûAROUNDû
8 BMO 491 83,495.25 2.7 ûONûTHEIRûVALUEûONû.OVEMBERûûWHENû #OMMERCIALûPAYMENTSûPROVIDERûFLEETCOR
9 MUFG 399 81,714.84 2.6 it had announced another possible offer TECHNOLOGIES is raising an incremental

10 US Bancorp 439 76,765.14 2.5 FROMûPRIVATEûEQUITYûlRMû#6#û#APITALû US$1bn term loan B.

Total 4,582 3,099,825.14 0ARTNERS 0ROCEEDSûREPAYûOUTSTANDINGûBALANCESû
Proportional credit (OWEVERû#6#ûLATERûSCRAPPEDûITSûõûPERû under the company’s revolving credit
Source: Refinitiv SDC code: R7 share bid. facility, provide cash to the balance sheet to

58 International Financing Review December 11 2021

 LEVERAGED LOANS

support general corporate purposes 4HEûSECOND LIENûLOANûWHICHûMATURESûONû*UNEû 4HEûCOMPANYSûPRIVATEûEQUITYûSPONSORSû

including future acquisitions and share 23 2029, is offered at 825bp over Libor with a AREû/AKû(ILLû#APITALû0ARTNERSûANDû#ANADAû
repurchases. ûmOORûINûLINEûWITHûTHEûEXISTINGûSECOND LIENû 0ENSIONû0LANû)NVESTMENTû"OARD
4HEûLOANûWHICHûMATURESûONû!PRILûû LOANû)TûISûOFFEREDûWITHûAûnû/)$ #ORPORATEûANDûFACILITYûRATINGSûAREû""n
2028, is offered at 175bp over Libor with a 4HEû53MûLOANûWILLûCOMBINEûWITHûTHEû Financial services company COWEN
ûmOORûINûLINEûWITHûANûEXISTINGûTERMûLOANû"û existing second-lien loan to form a lNALISEDûTERMSûONûAû53MûSENIORû
)TûISûALSOûOFFEREDûWITHûANû/)$ûOFû US$252.5m tranche. secured term loan B add-on that will fund
A 5bp fee amendment fee will be paid to 4HEûLOANSûHAVEûTHEûSAMEûCALLûPROTECTIONû THEûACQUISITIONûOFûPEERû0ORTICOû#APITALû
consenting lenders. TERMSûASûTHEûEXISTINGûlRST LIENûANDûSECOND Advisors.
Bank of America is the lead arranger. lien term loans. 4HEûLOANûWHICHûMATURESûONû-ARCHûû
4HEûCOMPANYûISSUEDûAû53BNûTERMû Jefferies is arranging the deal. 2028, was priced at 325bp over Libor with a
loan B in April to repay a portion of existing 4HEûCOMPANYûISSUEDûAû53MûlRST LIENû ûmOORû)TûWASûISSUEDûWITHûAûû/)$ûFROMû
revolver borrowings, an existing US$339m loan and a US$165m second-lien loan in GUIDANCEûOFûn
term loan B and fund the acquisition of peer *UNEû4HEûlRST LIENûLOANûCAMEûWITHûûSOFTû 4HEûLOANûAMORTISESûATûûPERûANNUM
Associated Foreign Exchange. call protection for six months and the 4HEûADD ONûLOANûWILLûBEûCOMBINEDûWITHûANû
Recreational vehicle manufacturer second-lien loan came with hard call existing loan to form a tranche size of
CAMPING WORLD is in the market with a protection that kicked off at 102 before US$447.75m. Soft call protection of 101 for
US$300m fungible incremental term loan B. decreasing to 101. six months will be refreshed on the entire
0ROCEEDSûWILLûBEûUSEDûFORûGENERALû It also priced a US$215m incremental tranche.
corporate purposes, including adding cash FUNGIBLEûlRST LIENûTERMûLOANûANDûAû53Mû Morgan Stanley led the deal and is the
to the balance sheet to fund future mergers incremental fungible second-lien term loan administrative agent.
and acquisitions. in September. #ORPORATEûRATINGSûAREû"A""nûANDûFACILITYû
4HEûLOANûWHICHûMATURESûINû*UNEûûISû MISTER CAR WASH has launched a US$290m RATINGSûAREû"""n
OFFEREDûATûBPûOVERû,IBORûWITHûAûû INCREMENTALûlRST LIENûTERMûLOANûTHATûWILLû
mOORûINûLINEûWITHûANûEXISTINGûTERMûLOANû"û)Tû lNANCEûTHEûACQUISITIONûOFûPEERû#LEANû3TREAKû AVEANNA SEALS SECOND-LIEN
ISûALSOûOFFEREDûWITHûANû/)$ûOFûn Ventures.
Soft call protection will be reset at 101 for 4HEûLOANûWHICHûMATURESûINû-AYûûISû Home care provider AVEANNA HEALTHCARE has
six months for the entire tranche. It will OFFEREDûATûBPûOVERû,IBORûWITHûAûûmOORû wrapped a US$415m senior secured second-
AMORTISEûATûûPERûANNUM ANDûANû/)$ûOFûn LIENûTERMûLOANûTOûlNANCEûITSûACQUISITIONûOFû
Goldman Sachs is the lead bookrunner. JP It does not have call protection. PEERSû#OMFORTû#AREûANDû!CCREDITEDû.URSINGû
Morgan is also a bookrunner. Jefferies is leading the transaction. Services.
4HEûCOMPANYûISSUEDûAûSEVEN YEARû 4HEûCOMPANYûREPRICEDûAû53MûlRST 4HEûEIGHT YEARûDEALûWASûPRICEDûATûBPû
53BNûLOANû4,"ûINû-AYûTOûRElNANCEûANû lien term loan in February 2020. OVERû,IBORûFROMûGUIDANCEûOFûBPnBPû
EXISTINGû4,"ûDUEûINû WITHûAûûmOORûANDûAûû/)$
#ORPORATEûRATINGSûAREû"A"ûANDûlRST LIENû AMEX GBT NETS US$1bn Hard call protection on the eight-year
TRANCHEûRATINGSûAREû"A""n loan kicks off at 102. It will decrease to 101
Healthcare company WCG PURCHASER 4RAVELûPLATFORMûAMERICAN EXPRESS GLOBAL and then par with respect to any
launched a fungible incremental US$200m BUSINESS TRAVEL has received a US$1bn term prepayments made in connection with any
lRST LIENûTERMûLOANûTOûREPAYûITSûREVOLVERûANDû loan B3 via sole arranger Morgan Stanley. equity issuance.
fund cash to its balance sheet. 4HEûCOMPANYûAGREEDûONû$ECEMBERûûTOû #ORPORATEûANDûlRST LIENûRATINGSûAREû""nû
0RICINGûONûTHEûLOANûWHICHûMATURESûONû merge with special purpose acquisition 3ECOND LIENûRATINGSûAREû#AA###
January 8 2027, is guided at 400bp over Libor COMPANYû!POLLOû3TRATEGICû'ROWTHû#APITALûTOû Barclays was the lead arranger and
WITHûAûûmOORûSAMEûASûTHEûCOMPANYSû create the world’s largest publicly traded administrative agent.
existing loan. business-to-business travel platform. Healthcare company CLOUDMED has upsized
4HEû/)$ûISûOFFEREDûBETWEENûûANDû 4HEûLOANûWHICHûMATURESûINû$ECEMBERû AûFUNGIBLEûINCREMENTALûlRST LIENûTERMûLOANû"û
Barclays is lead-left arranger and 2026, will repay US$600m of certain term TOû53MûFROMû53Mû0ROCEEDSûWILLû
administrative agent. loan facilities and provide US$400m of fund its acquisition of peer par8o.
lNANCINGûFORûGENERALûCORPORATEûPURPOSESû
FAIRBANKS MARKETS ADD-ON including backstopping potential US LEVERAGED LOANS
redemptions. BOOKRUNNERS: 1/1/2021 TO DATE
$EFENCEûEQUIPMENTûMAKERûFAIRBANKS MORSE #ORPORATEûANDûFACILITYûRATINGSûAREû"n Managing No of Total Share
DEFENSE has launched a fungible US$240m BERLIN PACKAGING has raised a US$160m bank or group issues US$(m) (%)
INCREMENTALûlRST LIENûTERMûLOANûANDûAû FUNGIBLEûlRST LIENû"ûTERMûLOANûADD ONûTOû 1 Bank of America 827 188,043.80 13.7
fungible US$40m incremental second-lien support acquisitions. 2 JP Morgan 657 118,068.56 8.6
term loan. 4HEûLOANûHASûTHEûSAMEû-ARCHûû 3 Wells Fargo 501 93,196.76 6.8
0ROCEEDSûWILLûBEûUSEDûTOûFUNDûANû maturity as the borrower’s US$1.07bn term 4 Goldman Sachs 376 71,639.71 5.2
undisclosed acquisition and pay down the loan B that was agreed in August. It also 5 Barclays 366 70,096.83 5.1
outstanding balance on an asset-based loan. carries the same pricing of 375bp over Libor 6 Credit Suisse 329 64,391.71 4.7
4HEûlRST LIENûLOANûWHICHûMATURESûONû*UNEû WITHûAûûmOOR 7 Citigroup 289 56,498.20 4.1
23 2028, is offered at 475bp over Libor with 4HEûADD ONûWASûISSUEDûWITHûAûû/)$ 8 Deutsche Bank 292 49,223.66 3.6
ûmOORûINûLINEûWITHûTHEûEXISTINGûlRST LIENû It comes with 101 soft call protection for 9 Truist Financial 290 43,348.45 3.2
LOANû)TûISûOFFEREDûWITHûANû/)$ûOFûn SIXûMONTHSûANDûAMORTISESûATûûPERûANNUM 10 Jefferies 196 41,784.62 3.0
4HEû53MûLOANûWILLûCOMBINEûWITHûTHEû Goldman Sachs was the lead-left arranger Total 2,431 1,372,857.04
EXISTINGûlRST LIENûLOANûTOûFORMûAû53Mû and agent. Barclays, Jefferies and MUFG were Excluding Project Finance.
tranche. also arrangers. Source: Refinitiv SDC code: P2

International Financing Review December 11 2021 59

 4HEûLOANûWHICHûMATURESûONû/CTOBERûû Swedish pest control group ANTICIMEX on It comes with 101 soft call protection for
2027, was priced at 425bp over Libor with a upsized an incremental, non-fungible senior SIXûMONTHSûANDûAMORTISESûATûûPERû
ûmOORûINûLINEûWITHûANûEXISTINGûTERMûLOANû secured term loan B to US$375m from annum.
"û4HEû/)$ûWASûTIGHTENEDûTOûûFROMû US$350m. !ûTICKINGûFEEûTHATûISûûOFûTHEûMARGINû
It comes with 101 soft call protection for 0ROCEEDSûWILLûRElNANCEûITSûREVOLVERûFUNDû kicks off on day 46 after the deal closes.
SIXûMONTHSûANDûAMORTISESûATûûPERûANNUM cash to the balance sheet and be used for 4HISûWILLûINCREASEûTOûûOFûTHEûMARGINûONû
Goldman Sachs was lead left arranger. general corporate purposes. day 91.
Deutsche Bank is also an arranger. 4HEûLOANûWHICHûMATURESûONû.OVEMBERûû Goldman Sachs was lead-left arranger. RBC
#LOUDMEDûREPRICEDûITSû53MûlRST LIENû 2028, priced at 400bp over Libor with a was also an arranger and administrative
TERMûLOANûINû/CTOBERû)TûlRMEDûATûBPû ûmOORûONûTHEûTIGHTûENDûOFûGUIDANCEû agent.
OVERû,IBORûWITHûAûûmOORûATûPAR OFûBPnBPû4HEû/)$ûWASûREVISEDûTOû Alcohol monitoring device
#ORPORATEûANDûTRANCHEûRATINGSûAREû""n 99.5 from 99. It now comes with a 25bp manufacturer SMART START has raised
US RADIOLOGY SPECIALISTS has sealed a STEPDOWNûWHENûTHEûlRST LIENûNETûLEVERAGEû US$465m of senior secured credit facilities
FUNGIBLEû53MûINCREMENTALûlRST LIENû ISûlVEûTIMES that will back its buyout by private equity
TERMûLOANûANDûREPRICEDûAû53MûlRST LIENû It comes with soft call protection of 101 for lRMû!POLLOû'LOBALû-ANAGEMENT
term loan. SIXûMONTHSûANDûAMORTISESûATûûPERûANNUM 4HEûlNANCINGûCOMPRISESûAûSEVEN YEARû
0ROCEEDSûWILLûFUNDûTHEûACQUISITIONûOFûPEERû Morgan Stanley was the sole arranger. 53MûlRST LIENûTERMûLOANûANDûANûEIGHT
Alpine and repay debt under a revolving Global Loan Agency Services is the YEARû53MûSECOND LIENûTERMûLOANû4HEREû
credit facility. administrative agent. ISûALSOûAûlVE YEARû53MûREVOLVINGûCREDITû
"OTHûLOANSûWHICHûMATUREûONû$ECEMBERû #ORPORATEûRATINGSûAREû""û&ACILITYûRATINGSû facility.
15 2027, were priced at 525bp over Libor are B2/B. 4HEûlRST LIENûLOANûWASûPRICEDûATûBPû
WITHûAûûmOORûUPûFROMûGUIDANCEûOFû Logistics services company AIT WORLDWIDE OVERû,IBORûFROMûBPnBPûWITHûAûû
BPû4HISûISûSTILLûBPûTIGHTERûTHANûTHEû upsized an incremental loan to fund its mOORûANDûANû/)$ûOFûû)TûINCLUDESûûSOFTû
existing loan, which was priced at 550bp acquisition of Select Express and pay down call protection for six months.
over Libor. its revolver. 4HEûSECOND LIENûLOANûPRICEDûATûBPû
4HEû/)$ûONûTHEûINCREMENTALûLOANûWASû 4HEû*ORDANû#OMPANY OWNEDû!)4û OVERû,IBORûFROMûBPnBPûWITHûAûû
REVISEDûTOûûFROMûû4HEûREPRICINGûWASû 7ORLDWIDEûINCREASEDûTHEûFUNGIBLEûlRST LIENû mOORûANDûAûû/)$û(ARDûCALLûPROTECTIONû
issued at par. TERMûLOANûTOû53MûFROMû53Mû4HEû kicks off at 102 before decreasing to 101.
4HEûLOANSûCOMEûWITHûûSOFTûCALLû increased proceeds will fund cash to the Jefferies, BNP Paribas, Barclays and RBC
protection for six months and amortise at company’s balance sheet for permitted were bookrunners.
ûPERûANNUM acquisitions and investments, as well as
Barclays was the lead-left bookrunner. other general corporate purposes. DAVIS-STANDARD RINGS THE CHANGES
Capital One, Deutsche Bank and Fifth Third were 0RICINGûONûTHEûLOANûWHICHûMATURESûONû
also bookrunners. !PRILûûûlNALISEDûATûBPûOVERû,IBORû Manufacturing company DAVIS-STANDARD
#ORPORATEûANDûlRST LIENûRATINGSûAREû""n WITHûAûûmOORû4HEû/)$ûlRMEDûATûû lNALISEDûAû53MûTERMûLOANû"ûTHATûWILLû
FROMûGUIDANCEûOFûn FUNDûITSûBUYOUTûBYû'AMUTû#APITALû
BROOK + WHITTLE TIGHTENS MARGIN 4HEûLOANûCARRIESûNOûCALLûPROTECTIONûANDû Management after making a number of
AMORTISESûATûûPERûANNUM investor-friendly changes.
Label manufacturer BROOK + WHITTLE tightened #ORPORATEûRATINGSûAREû""ûWHILEûlRST LIENû 4HEûLOANûlRMEDûATûBPûOVERû,IBORûWITHû
THEûMARGINûONûAûlRST LIENûLOANûTHATûWILLûFUNDû tranche ratings are B1/B. AûûmOORûANDûAûû/)$ûWIDENINGûTHEû
ITSûBUYOUTûBYûPRIVATEûEQUITYûlRMû'ENSTARû Goldman Sachs was lead-left arranger and TERMSûFROMûINITIALûGUIDANCEûOFûBPnBPû
#APITAL administrative agent. Credit Suisse, BMO, BNP WITHûAûûmOORûANDûAûû/)$û)NûADDITIONû
4HEûTRANSACTIONûALSOûINCLUDESûAûPRIVATELYû Paribas and Citizens were also arrangers. the leveraged-based pricing stepdowns
placed US$169m second-lien term loan and originally offered were removed.
a US$50m revolving credit facility. II-VI COMPLETES US$2.8bn LOAN It now comes with 101 hard call
4HEûlRST LIENûLOANûCOMPRISESûAû53Mû protection for 18 months, amended from
term loan and a US$100m delayed draw Optical components maker II-VI has priced a soft call protection for six months initially,
term loan. It priced at 400bp over Libor with 53BNûlRST LIENûTERMûLOANû"ûTHATûWILLû ANDûAMORTISESûATûûPERûANNUMûFROMûûATû
AûûmOORûDOWNûPREVIOUSûGUIDANCEûOFû lNANCEûITSûACQUISITIONûOFûPEERû#OHERENTûANDû launch.
450bp. RElNANCEûDEBT BMO led the transaction, which also
4HEûlRST LIENûLOANûNOWûCOMESûWITHûAûBPû 4HEûSEVEN YEARûLOANûlRMEDûATûBPûOVERû includes a US$55m revolving credit facility.
STEPDOWNûWHENûTHEûlRST LIENûNETûLEVERAGEûISû ,IBORûWITHûAûûmOORûANDûAûû/)$û)Tû $AVIS 3TANDARDûISûBACKEDûBYû/.#!0ûTHEû
4.75 times, and another 25bp stepdown comes with 101 soft call protection for six middle-market private equity platform of
WHENûTHEûCOMPANYûGOESûPUBLICû4HEûû/)$û months. /NEXû#ORPû#ORPORATEûANDû4,"ûRATINGSûAREû
was unchanged. JP Morgan led the deal and is B2/B.
4HEû$$4,ûCOMESûWITHûAûTICKINGûFEEûTHATû administrative agent. Fibre optic services provider METRONET
WILLûKICKûOFFûATûûOFûTHEûMARGINûONûDAYûû #ORPORATEûRATINGSûAREû"A""n""ûANDû CLOSEDûAûFUNGIBLEû53MûlRST LIENûTERMû
AFTERûTRANSACTIONûCLOSEû4HISûWILLûINCREASEûTOû SECUREDûRATINGSûAREû"A"""""n loan B.
ûOFûTHEûMARGINûONûDAYû 0AYROLLûSOFTWAREûPROVIDERûCAST & CREW 4HEûLOANûWHICHûMATURESûINû*UNEûû
It comes with 101 soft call protection for completed an incremental seven-year PRICEDûATûBPûOVERû,IBORûWITHûAûû
six months. 53MûlRST LIENûTERMûLOANû"ûTOûFUNDûITSû mOORûINûLINEûWITHûANûEXISTINGûlRST LIENû
Credit Suisse, Wells Fargo, Jefferies and BMO ACQUISITIONûOFûPEERûTHEû4EAMû#OMPANIES TERMûLOANû)TûWASûISSUEDûWITHûANû/)$ûOFû
were arrangers. 4HEûNON FUNGIBLEûLOANûWASûPRICEDûATû 99.75.
#ORPORATEûRATINGSûAREû""nûANDûFACILITYû BPûOVERû,IBORûWITHûAûûmOORûANDûANû )TûWILLûAMORTISEûATûûPERûANNUMûALSOûINû
RATINGSûAREû""n /)$ûOFûûTIGHTENEDûFROMûn line with the existing loan.

60 International Financing Review December 11 2021

 LEVERAGED LOANS

Goldman Sachs was the lead bookrunner.

TD, Citizens, Fifth Third and KKR Capital Markets
were also bookrunners.
4HEûCOMPANYûISûBACKEDûBYûPRIVATEûEQUITYû
Corporate distress rises to
sponsors Oak Hill and KKR Infrastructure.
#ORPORATEûRATINGSûAREû""nûWHILEûTRANCHEû highest level this year
RATINGSûAREû""n
MetroNet issued a deal in May comprising „ EUROPE Weil report says corporates with market cap lower than €5bn under pressure
Aû53MûlRST LIENûTERMûLOANû"ûAû53Mû
lRST LIENûDELAYEDûDRAWûTERMûLOANûAû53Mû Corporate distress has risen to its highest level SECTOR TRENDS
second-lien term loan and a US$175m this year, as stimulus measures by European The highest levels of distress are in the leisure
SECOND LIENû$$4, governments and central banks have begun to and hospitality sector, which was hit hardest by
0LASTICSûMANUFACTURERûPLASKOLITE was unwind, creating tighter conditions for business the pandemic. Although the sector recovered
scheduled to close on Friday a US$125m liquidity, according to the inaugural Weil Distress to some extent in recent months following the
INCREMENTALûlRST LIENûTERMûLOANûTHATûWILLû Index, published by law firm Weil, Gotshal & easing of lockdown rules, the emergence of
FUNDûTHEûACQUISITIONûOFûPEERû0LAZIT 0OLYGAL Manges. Omicron could reverse that.
4HEûLOANûWHICHûMATURESûONû$ECEMBERûû According to Weil, corporate distress can be Distress has also increased across the
2025, was offered at 425bp over Libor with a defined as uncertainty about the fundamental retail and consumer sector reflecting renewed
ûmOORûANDûANû/)$ûOFû value of financial assets, volatility and increases pressure on both liquidity and profitability,
It comes with 101 soft call protection for in perceived risk. the index report said. As the sector continues
SIXûMONTHSû4HEûLOANûISûFUNGIBLEûWITHûANû There are several common characteristics of to face challenges such as supply chain
EXISTINGûlRST LIENûLOANûWHICHûISûNOWûALSOû corporate distress: liquidity pressures, reduced disruptions, rising operating costs and high
being remarked to 425bp over Libor. profitability, rising insolvency risk, falling return volumes have been putting pressure
Goldman Sachs was the lead-left arranger. valuations and reduced return on investment. on margins.
Morgan Stanley and ING were also arranging The study, based on data from more than “There are sectors where there is a
the deal. 3,750 listed European corporates, concludes significant rise in the distress index, such as
4HEûCOMPANYûISSUEDûAû53MûlRST LIENû that contribution to distress from pressures on retail, travel, leisure and hospitality, reflecting
TERMûLOANûINû$ECEMBERûûASûPARTûOFû liquidity – defined as a company’s ability to pay the unwind of government support as well
53MûLOANûPACKAGEûTOûlNANCEûPRIVATEû off its current debt obligations – has not been as the damage done by the slow progress of
EQUITYûSPONSORû0RITZKERû0RIVATEû#APITALSû higher since 2008–09. the pandemic,” said Andrew Wilkinson, senior
acquisition of the company. This issue has become particularly problematic European restructuring partner and co-head of
#ORPORATEûANDûTRANCHEûRATINGSûAREû"" for corporates with a market cap lower than €5bn, Weil’s London restructuring practice.
Mobile satellite provider INMARSAT sought which are showing above average levels of distress “Higher distress levels will be reflected in
consent from its term loan B lenders to for the first time in over a year. higher costs of capital borrowing for companies
avoid triggering a change of control clause This follows a period of historically low corporate in these sectors. The only question is
under the credit agreement for its existing distress, underpinned by government intervention whether default rates will also rise at some
debt. and benign capital market conditions, with not future point.”
#OMMUNICATIONSûCOMPANYû6IASATûISûBACKINGû a single issuer of European investment grade or In contrast, distress in a number of other
its US$7.3bn acquisition of Inmarsat with junk-rated corporate bonds going bankrupt in 2021, sectors such as industrials has declined, as a
53BNûOFûNEWûDEBTûFACILITIESû4HEûTRANSACTIONû according to S&P Global Ratings. result of growing demand for a wider variety
will close in the second half of 2022. But markets have begun to respond in recent goods, including semi-conductors, autos,
4HEûACQUISITIONûWILLûTRIGGERûAûCHANGEûOFû weeks, partly driven by higher inflation and electronic equipment and chemicals.
control clause unless Inmarsat receives concerns over the Omicron variant. The ICE BoA Geographically UK corporates experienced
lender consent to waive the provision. Euro High Yield Index spread ended November the highest levels of relative distress during
#ONSENTINGûLENDERSûWILLûBEûPAIDûAûBPûFEEû at a high for the year of 371 having reached a low the pandemic compared with other European
by Inmarsat. of 285 on September 17 2021. markets. However, in Germany distress from
Bank of America was leading the “History shows that when credit markets liquidity is now at its highest level since
transaction, and consent was due by Friday. tighten, the outlook for a company can change 2012, while in France levels of distress across
4HEûCOMPANYûREPRICEDûAû53BNûlRST quickly,” said Neil Devaney, partner and co-head businesses reached their highest point
lien term loan B in January at 350bp over of Weil’s London restructuring practice. since February.
,IBORûWITHûAûûmOOR “Continuing supply-chain disruption and Corporate distress across Spain and Italy,
demand surges have meant that inflation has however, fell to decade lows in recent months,
been higher and more persistent than many declining sharply on last year’s levels as
EUROPE/MIDDLE EAST/ expected. When coupled with the potential initiatives to guarantee government-backed
AFRICA impact of Omicron on corporate liquidity and loans administered by the Italian Export Credit
profitability, the continued availability of cheap Agency SACE and Spain’s Official Credit Institute
CLINIGEN LINES UP LBO DEAL credit seems increasingly uncertain as we move underpinned stability throughout the period.
into next year.” Sandrine Bradley
4HEûBUYOUTûOFû5+ûPHARMACEUTICALûSERVICEû
lRMûCLINIGENûBYûPRIVATEûEQUITYûlRMû4RITONû
Investment Management is backed by 4HEûlNANCINGûWILLûINCLUDEûSENIORûDEBTû RECEIVEûAûPREVIOUSLYûDECLAREDûlNALûDIVIDENDû
LEVERAGEDûlNANCINGûFROMûJP Morgan, Credit facilities and second-lien debt facilities. It will OFûûPENCEûPERû#LINIGENûSHARE
Suisse, Barclays and HSBC. ALSOûINVOLVEûEQUITYûINVESTEDûBYûTHEû4RITONû&UNDS 4RITONûISûAû%UROPEANûPRIVATEûEQUITYû
4HEûACQUISITIONûVALUESû#LINIGENûATûABOUTû 4RITONûHASûOFFEREDûûPENCEûPERûSHAREûINû INVESTMENTûlRMûWITHûEXPERIENCEûINû
£1.2bn. cash, with shareholders also eligible to investing in healthcare companies.

International Financing Review December 11 2021 61

 INOVIE REVISES PRICING 4HEûMARGINûISûLINKEDûTOûTHEûSENIORûNETû 4HEûlNANCINGûHASûAûPORTABILITYûPROVISIONû
leverage ratio, paying 400bp for a ratio of that allows the loans to be available for
French medical laboratories company more than 5.1 times (up from 375bp), 375bp TWOûYEARSûAFTERûTHEûlRSTûUTILISATIONûOFûTHEû
INOVIEûREVISEDûPRICINGûFORûAûõMûFUNGIBLEû for more than 4.6 times (up from 350bp) and add-on, subject to senior secured net
term loan B add-on to repay revolving 350bp for 4.6 times or lower (up from LEVERAGEûOFûSIXûTIMESûORûLOWERûANDûAûû
credit facility drawings, fund acquisitions 325bp). minimum equity requirement.
and repay quasi equity. 4HEûADD ONûWILLûRESETûTHEûMARGINûRATCHETû BNP Paribas was the lead-left and physical
4HEûCOVENANT LITEûLOANûWHICHû holiday for six months and 101 soft call bookrunner along with Credit Agricole CIB.
will mature on March 3 2028, priced at protection for six months. Ratings are B/B2/B.
400bp on the whole tranche, up from 4HEREûAREûNOûTICKINGûFEESûUNTILû
BPû)TûCOMESûWITHûAûûmOORûANDûAû ACQUISITIONûCLOSESûINû$ECEMBERû4HEûWAIVERû CIRCET UPS ADD-ON
û/)$ fee is 25bp.
French telecoms infrastructure provider
EUROPEAN LEVERAGED LOANS EMEA SPONSORED LOAN BOOKRUNNERS CIRCETûHASûUPSIZEDûAûõMûTERMûLOANû"û
BOOKRUNNERS: 1/1/2021 TO DATE BY VOLUME: 1/1/2021 TO DATE ADD ONûFROMûõMûTHATûWILLûBEûUSEDûTOû
Managing No of Total Share Europe, Middle East, Africa back acquisitions with the additional
bank or group issues US$(m) (%) Managing No of Total Share õMûTOûREDUCEûREVOLVINGûCREDITûFACILITYû
1 BNP Paribas 95 18,031.80 9.9 bank or group issues US$(m) (%) drawing needs at closing.
2 JP Morgan 63 12,762.69 7.0 1 BNP Paribas 53 9,361.21 8.0 4HEûCOVENANT LITEûLOANûISûFUNGIBLEûWITHû
3 Credit Agricole 68 11,753.25 6.4 2 JP Morgan 43 9,179.00 7.8 THEûBORROWERSûõBNû4,"ûANDûMATURESû
4 Deutsche Bank 73 11,354.39 6.2 3 Deutsche Bank 53 8,461.47 7.2 on October 2028.
5 HSBC 53 9,472.53 5.2 4 Goldman Sachs 49 7,575.20 6.5 It pays 375bp over Euribor, the same as
6 Societe Generale 33 9,206.83 5.1 5 Credit Agricole 44 7,238.07 6.2 THEûEXISTINGûLOANûWITHûAûûmOORûANDûAû
7 Natixis 32 9,178.45 5.0 6 Barclays 33 6,969.82 6.0 û/)$ûVERSUSûINITIALûGUIDANCEûOFûn
8 Barclays 46 8,756.31 4.8 7 HSBC 32 5,555.39 4.7 99.5.
9 Goldman Sachs 60 8,459.44 4.6 8 Credit Suisse 32 5,193.06 4.4 %XPECTEDûCORPORATEûRATINGSûAREû""n"
10 Bank of America 52 6,949.91 3.8 9 Bank of America 37 5,085.12 4.3 B+, while expected instrument ratings are
Total 211 182,229.08 10 Natixis 19 3,945.65 3.4 ""n"""n
Excluding project finance. Western Europe only included. Total 138 117,099.89 BNP Paribas, Deutsche Bank and Natixis are
Excluding project finance. the joint physical bookrunners, ING is the
Source: Refinitiv SDC code: P10 Source: Refinitiv SDC code: P13 joint bookrunner and Natixis is an agent.

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62 International Financing Review December 11 2021

 EQUITIES
China 64 India 65 Japan 65 Philippines 67 South Korea 67 Denmark 68 Germany 68
Netherlands 69 Saudi Arabia 69 UK 70 United States 71 Structured Equity 78

„ FRONT STORY CHINA

Chinese developers scrape for funds

Hopson goes for CB while duo launches placements 
Chinese property developers are trying Hopson plans to use the proceeds to Logan raised HK$1.17bn from a top-up
every available avenue to raise funds, with RElNANCEûOFFSHOREûDEBTûINCLUDINGûTHEû placement of 172m shares, or 3% of the
HOPSON DEVELOPMENT sealing a US$250m repurchase of its outstanding 2022 notes, ENLARGEDûSHAREûCAPITALûATûAûlXEDûPRICEûOFû
convertible bond last week, alongside and as general working capital. HK$6.80 per share, a discount of 9.9% to
follow-ons from other companies. The deal was well covered with about 35 Monday’s close of HK$7.55.
After a few days of sounding investors, investors participating, and the top 10 The company will use the proceeds for project
Hopson (B2/B/B+) on Wednesday launched a investors taking about two-thirds of the investments and general working capital.
363-day CB with a base size of US$200m and transaction. About 60% of the deal went to The books were more than three times
a same-day upsize option of US$100m. outright investors and 40% to hedge funds. covered with about 40 investors
The coupon was marketed at a 7%–8% Around half of the demand came from CB participating. Around 40% of the deal went to
range. The conversion premium was INVESTORSûANDûHALFûFROMûlXED INCOMEû long-only investors and 60% to hedge funds.
LAUNCHEDûATûAûlXEDûûABOVEûTHEû investors. Demand mainly came from Asia BNP Paribas, Citigroup and UBS were the
reference share price of HK$17.16, which and there were also some orders from bookrunners.
was also the delta placement price. Europe. Shimao also raised HK$1.18bn from a
Bookrunner HSBC could conduct a delta To reduce potential dilution from the CB top-up placement to fund debt repayment
placement of up to 30m shares to facilitate to the issuer, and to solve the possible and general corporate purposes.
hedging. liquidity issue of the stock for the CB It sold 145m shares, or 3.8% of the
The CB was eventually upsized to holders, the deal is structured so that CB ENLARGEDûSHAREûCAPITALûATûAûlXEDûPRICEûOFû
US$250m and priced at the investor-friendly holders will be paid largely in cash upon HK$8.14 per share, an 8.5% discount to
ENDûATûANûûCOUPONû4HEûDEALûISûTHEûlRSTû#"û conversion. Monday’s close of HK$8.90.
from a Chinese property developer since Shares in Hopson fell 13.7% to HK$16.64 Books were multiple times covered with
Jiayuan International Group sold a US$100m on Thursday. Its CB traded at around 101 in about 50 investors participating, including
3.5-year non-put 2.5 green issue in July at a the secondary market. EXISTINGûSHAREHOLDERSûANDûMULTI STRATEGYû
yield-to-put/maturity of 9.8% and conversion funds. The top 10 investors took more than
premium of just 6%. STRAIGHT EQUITY 80% of the deal. The transaction also offered
“Many developers are looking around and Meanwhile some developers have chosen to some investors a chance to cover the short
evaluating different options to raise funds. rebuild their war chests through share positions that built around the stock.
Now with Hopson’s CB being done, there placements despite the dilution impact. Two HSBC, JP Morgan and Morgan Stanley were
could be more issuers going down this of them, LOGAN GROUP and SHIMAO GROUP joint bookrunners.
route,” said an equity-linked banker. HOLDINGS, tapped the market on Monday. Fiona Lau

China’s Didi plans to hire Goldman

Ride-sharing company to list in HK 
China’s Didi Global plans to hire Goldman Two sources said Didi was looking to Didi did not respond to a Reuters request
Sachs for its planned Hong Kong listing and appoint Goldman to work on the Hong Kong for comment. Goldman declined to
US delisting, three sources with knowledge listing before embarking on the New York comment. The sources were not authorised
of the matter told Reuters, as it moves to delisting. A separate source said Didi was to talk to the media and therefore declined
WITHDRAWûFROMûTHEû.EWû9ORKûEXCHANGEû also in talks with other investment banks TOûBEûIDENTIlED
AFTERûJUSTûlVEûMONTHS including some Chinese banks. Goldman was one of the main
Didi, which made its debut in New York Given the short time since its New York underwriters of Didi’s New York IPO, along
on June 30 after raising US$4.4bn via an IPO, debut, Didi will have to apply for a dual- with Morgan Stanley and JP Morgan.
said last week that it plans to delist from the primary listing in Hong Kong, instead of a Reuters reported last week, citing a source
US bourse and pursue a Hong Kong listing. secondary one which requires at least two with knowledge of the matter, that Didi aims
The company is under pressure from lNANCIALûYEARSûOFûGOODûREGULATORYû to complete the Hong Kong listing as soon as
Beijing to quit the New York Stock COMPLIANCEûONûANOTHERûQUALIFYINGûEXCHANGE INûTHEûNEXTûTHREEûMONTHSûANDûDELISTûFROMû
%XCHANGEûAFTERûRUNNINGûFOULûOFû#HINESEû The company, sometimes dubbed the Uber New York by June 2022.
authorities by pushing ahead with its IPO of China, has also asked the Wall Street Didi’s shares closed at US$6.66 on
despite being asked to put it on hold while investment bank to come up with proposals Thursday, more than 50% below their launch
a review of its data practices was on how a Hong Kong listing and New York price.
conducted. delisting would work, said two of the sources. Julie Zhu

International Financing Review December 11 2021 63

 )TûPOSTEDûAûûlRST HALFûLOSSûOFû2MBMû in Hong Kong that could raise up to US$1bn,
(US$14.7m), compared with a Rmb156m loss according to people with knowledge of the
ASIA-PACIFIC a year earlier. matter.
Before the IPO, Tencent, Alibaba and The out-of-home advertising company
Bilibili each owned 4.99% of Qingci. lLEDûWITHûTHEû#HINAû3ECURITIESû2EGULATORYû
CHINA CICC and Citic Securities are the sponsors. Commission on November 29 for its Hong
Kong listing.
HUABAO BUILDS WAR CHEST CANBRIDGE COMPLETES HONG KONG IPO &OCUSû-EDIAûlRSTûSAIDûITSûWOULDûLISTûINû
Hong Kong on November 4 without giving
HUABAO INTERNATIONAL has raised HK$2.18bn Biotech company CANBRIDGE PHARMACEUTICALS any details. It said the H-share IPO would
(US$280m) from an upsized top-up share has raised HK$686m (US$88m) from a Hong help with its internationalisation plans and
placement. Kong IPO. BROADENûITSûlNANCINGûCHANNELS
The company sold 122.1m shares, 3.78% The company sold 56.3m primary shares Focus Media was founded in 2003 and
of the enlarged share capital, up from 87.3m representing 13.3% of the company post- listed on Nasdaq in 2005. It was delisted
shares at launch. MONEYûATûAûlXEDûPRICEûOFû(+ûPERû from the US in 2013 and returned to China’s
Pricing came at HK$17.88 per share from share. A-share market in 2015. Its current market
the HK$17.86–$18.47 range. The price Seven cornerstone investors made a total capitalisation is around Rmb113bn
represents a discount of 11.9% to investment of US$60m. (US$17.8bn).
Wednesday’s close of HK$20.30. Jefferies and Morgan Stanley were the joint )TûPOSTEDûAûNETûPROlTûATTRIBUTABLEûTOûEQUITYû
The books were multiple times covered sponsors. holders of Rmb4.4bn for Q1–Q3, up 100.8%,
with more than 50 investors participating. on revenues of Rmb11.1bn, up 41.6%.
The top 10 investors took around 70% of GUSHENGTANG PRICES IPO AT TOP
the deal. RECBIO WINS IPO APPROVAL
The company will use the proceeds for GUSHENGTANG (CAYMAN), a chain of traditional
OVERSEASûEXPANSIONûANDûGENERALûWORKINGû Chinese medicine clinics, has priced its Vaccine maker JIANGSU RECBIO TECHNOLOGY has
capital. Hong Kong IPO at top of the price range to won listing approval from the Stock
(UABAOûMAINLYûENGAGESûINûmAVOURSûANDû raise HK$809m (US$104m). %XCHANGEûOFû(ONGû+ONGûFORûANû)0/ûOFûABOUTû
tobacco-related business. The company marketed 27.9m primary US$200m–$300m, said people with
Citigroup, CLSA and Nomura are the joint H-shares or 12% of its enlarged share capital knowledge of the matter.
bookrunners. at HK$25.80–$29 per share. 4HEûDEALûISûLIKELYûTOûHITûTHEûMARKETûNEXTûYEAR
Final pricing represents a 2022 forecast CMB International, Citic Securities and Morgan
QINGCI GAMES PRICES IPO AT BOTTOM P/E of 22.5. Stanley are the sponsors.
The deal drew four cornerstone investors The company is developing 11 vaccines
Chinese mobile game developer QINGCI GAMES with a combined US$42m. including an HPV vaccine and a Covid-19
has priced its Hong Kong IPO at the bottom Gushengtang operates 41 clinics in 11 vaccine. It posted a loss of Rmb247m
of the price range to raise HK$952m cities in China as well as online channels. It 53M ûFORûTHEûlRSTûQUARTERûOFûû
(US$122m). posted a loss of Rmb350m (US$55m) for the compared with a Rmb44m loss a year
The company marketed 85m primary lRSTûHALFûOFûûCOMPAREDûTOûAûLOSSûOFû earlier.
shares, or 12.4% of the enlarged share Rmb179m a year earlier. Legend Capital owns 10.7% of the
capital, in an indicative range of HK$11.20– Bank of America and Haitong International are company and Singapore’s Temasek Holdings
$14 per share. the joint sponsors. owns 2.7%.
3IXûCORNERSTONEûINVESTORSûMADEûAûTOTALû
investment of US$70m. FOCUS MEDIA PICKS DUO YONGHE COMPLETES IPO
The shares will start trading on
December 16. Shenzhen-listed FOCUS MEDIA INFORMATION Hair transplant clinic operator YONGHE
4HEûCOMPANYûOPERATESûSIXûMOBILEûGAMESû TECHNOLOGY has picked Haitong International MEDICAL has raised HK$1.49bn (US$191m)
and has a pipeline of 10 others. and Morgan Stanley to lead a proposed listing from its Hong Kong IPO.
The company sold 94.4m primary shares,
ASIA-PACIFIC EQUITIES ASIA-PACIFIC EQUITIES (EX-JAPAN) or 18.2% of enlarged share capital, at
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE HK$15.80 each or a 2022 P/E of 30.5 times.
Managing No of Total Share Managing No of Total Share Ten cornerstone investors put in US$97m.
bank or group issues US$(m) (%) bank or group issues US$(m) (%) The shares will start trading on December 13.
1 Citic 162 32,312.70 7.4 1 Citic 162 32,312.70 8.1 CICC and Morgan Stanley are joint sponsors.
2 Goldman Sachs 103 30,558.04 7.0 2 Goldman Sachs 96 28,353.21 7.1
3 Morgan Stanley 113 30,515.23 7.0 3 Morgan Stanley 88 26,249.70 6.6 SF INTRA-CITY PRICES AT BOTTOM
4 CICC 109 23,005.07 5.3 4 CICC 109 23,005.07 5.8
5 Citigroup 84 20,484.28 4.7 5 Citigroup 82 19,834.09 5.0 HANGZHOU SF INTRA-CITY INDUSTRIALûTHEûEXPRESSû

6 JP Morgan 80 19,830.14 4.6 6 JP Morgan 75 17,213.12 4.3 delivery unit of Shenzhen-listed SF Holding,
7 UBS 82 15,503.44 3.6 7 UBS 79 15,329.31 3.8 has raised HK$2.15bn (US$275m) from a
8 Bank of America 64 14,683.64 3.4 8 Bank of America 55 13,216.71 3.3 Hong Kong IPO that priced at the bottom of
9 Huatai Securities 71 12,796.64 2.9 9 Huatai Securities 71 12,796.64 3.2 the range.
10 China Secs 76 12,424.18 2.9 10 China Secs 76 12,424.18 3.1 The company sold 131m shares, or 14% of
Total 3,349 434,037.41 Total 3,148 399,967.12 the enlarged share capital, at the bottom of
Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues a HK$16.42–$17.96 range for a 2022 forecast
Source: Refinitiv SDC code: C4a1 Source: Refinitiv SDC code: C4a2 PRICE TO SALESûOFûX

64 International Financing Review December 11 2021

 EQUITIES ASIA-PACIFIC

Taobao China and Hello are cornerstones tranche was covered 8.4 times, the high-net- The primary and secondary share
with respective investments of HK$851m worth investor segment 42 times and retail composition of the IPO has not yet been
and HK$38.8m. 8.1 times. decided.
The shares will start trading on December New shares totalling Rs3.75bn are on Chairman and co-founder Sachin Bansal
14. offer, as well as 22.6m secondary shares also co-founded India’s pioneering
Bank of America and CICC are joint from investor Wagner and founder Bhanu e-commerce company Flipkart in 2007
sponsors, and joint global coordinators with Chopra, among others. before selling it to Walmart in 2018.
Credit Suisse and Huatai International. The company will use the IPO proceeds to
REPAYûLOANSûANDûlNANCEûACQUISITIONS
CHERVON PRE-MARKETS HK IPO For the year to March 31, RateGain JAPAN
reported revenues of Rs2.51bn, down 37%
CHERVON HOLDINGS, a maker of power tools from Rs3.99bn a year earlier. Its net loss FINATEXT LAUNCHES TSE IPO
and outdoor power equipment, has started widened 42% to Rs286m from Rs201m.
pre-marketing a Hong Kong IPO. IIFL Securities, Kotak and Nomura are lead Financial services provider FINATEXT HOLDINGS
IFR reported in August that the company managers. has started bookbuilding for a TSE IPO of up
was targeting a valuation of at least US$2bn to ¥20bn (US$176m).
ANDûTHEûmOATûCOULDûRAISEûABOUTû53MûATû FABINDIA CRAFTS IPO FILING The offer comprises 2.8m primary shares
its valuation target. and about 12.7m secondary shares, in an
CICC and Citigroup are the sponsors. Ethnic wear and furnishings retailer FABINDIA indicative range of ¥1,100–¥1,290 per share.
4HEûCOMPANYûPOSTEDûAûNETûPROlTûOFû PLANSûTOûlLEûFORûAû2SBNn2SBNû53Mn Singaporean state investor GIC has
53MûINûTHEûlRSTûQUARTERûOFûûUPû $663m) IPO as early as this month and aims indicated an interest in up to ¥2.3bn of the
more than 13 times from the US$4.18m to launch it by March, people with offering.
PROlTûAûYEARûEARLIER knowledge of the transaction said. There is a greenshoe of up to 2.3m
Chinese biotech SIRNAOMICS has also Both primary and secondary shares are secondary shares.
started pre-marketing a Hong Kong IPO of LIKELYûTOûBEûSOLDû0RIVATEûEQUITYûlRMSû The selling shareholders are UTEC 3,
about US$100m–$150m. PremjiInvest and Lighthouse Funds are JAFCO SV5 Investment, au Financial
Sirnaomics develops therapies targeting among the investors in the company. Holdings, JAFCO SV5-STAR Investment,
illnesses including skin cancer and liver FabIndia is one of India’s largest company co-founder Tsutomu Watanabe,
cancer. It has around 14 product candidates distributors of products made using company creative directors Yonosuke
in the pipeline. traditional techniques and fabrics. It links Yasuda and Atsushi Ishibashi, SMBC Trust
4HEûCOMPANYûLOSTû53MûFORûTHEûlRSTû over 55,000 craft-based rural producers to Bank, Satoshi Imai, Mitsuru Takahashi,
nine months of 2021, compared with a urban markets and has more than 300 stores Masashi Tsujinaka, Kota Watanabe, Yuki
US$33m loss a year earlier. in India and abroad. Saito and GCI Capital.
Credit Suisse, ICICI Securities, JP Morgan, There is a lock-up of 180 days for all
ASYMCHEM PRICES ABOVE MIDPOINT Nomura and SBI Capital are the banks on the EXISTINGûSHAREHOLDERS
transaction. The deal will be sold equally to retail and
Shenzhen-listed ASYMCHEM LABORATORIES institutional investors.
(TIANJIN) has raised HK$7.14bn (US$916m) DATA PATTERNS SETS IPO RANGE Books are open until December 9. The
from its Hong Kong listing after pricing it at deal will be priced on December 13 and the
above the midpoint of the indicative price Defence and aerospace electronics shares are due to be listed on December 22.
range. manufacturer DATA PATTERNS has set a Rs555– Daiwa and Mitsubishi UFJ Morgan Stanley are
The company sold 18.4m primary Rs585 range for an IPO of up to Rs5.88bn the joint lead managers.
H-shares, or 7% of its enlarged share capital, (US$78m).
at HK$388 per share from the HK$350–$410 Primary shares totalling Rs2.4bn and up NET PROTECTIONS PRICED AT THE TOP
range. to 5.95m secondary shares are on offer.
The price represents a 34% discount to Controlling shareholders Srinivasagopalan E-commerce payments company NET
Asymchem’s A-share close of Rmb478.60 on Rangarajan and Rekha Murthy Rangarajan PROTECTIONS HOLDINGS has priced its IPO at the
December 3. are among the vendors. top of the indicative range of ¥1,300–¥1,450
Asymchem provides contract Anchor books open on December 13 and per share for proceeds of ¥64.6bn
development and manufacturing services to the rest of the offer on December 14–16. (US$571.5m).
pharmaceutical and biotech companies. JM Financial and IIFL Securities are the The book of 4m primary and 40.56m
Citic Securities and Goldman Sachs are bookrunners. secondary shares was heavily oversubscribed
sponsors. Data Patterns reported revenues of with more than 130 lines. The top 20
Rs2.2bn for the year to March, up 38% from investors took over 75% of the book.
2SBNûAûYEARûEARLIERû.ETûPROlTûROSEûû Allocations were skewed towards long-
INDIA to Rs556m from Rs210m. only and tech specialist funds, and investors
that attended management meetings.
RATEGAIN LIKELY TO PRICE IPO AT TOP NAVI HIRES BANKS FOR IPO Due to the strong demand, 5% of the deal
was shifted from the domestic to the
Hospitality software company RATEGAIN $IGITALûlNANCIALûSERVICESûCOMPANYûNAVI international tranche. About 75% of the deal
TRAVEL TECHNOLOGIES is likely to price its IPO at TECHNOLOGIES is planning a domestic IPO of was sold to international and 25% to
the top of the Rs405–Rs425 range to raise AROUNDû53MûNEXTûYEARûANDûISûWORKINGû domestic investors.
Rs13.4bn (US$178m). with Axis Capital, Bank of America, Credit Suisse 4HEûCOMPANYûWASûEARLIERûEXPECTEDûTOû
The IPO was covered 17.41 times when and ICICI Securities, people with knowledge launch an up to ¥62.4bn IPO in a price range
books closed on Thursday. The institutional of the transaction said. of ¥1,100–¥1,400.

International Financing Review December 11 2021 65

 There is a greenshoe of 2.13m secondary Capital 2019 Private Equity Investment and The deal comprises 2.6m primary and
shares. directors Makoto Hirai and Yusuke Hattori. about 1.97m secondary shares.
The selling shareholders are company About 50% of the deal was sold to retail Tokyu Land Corporation, Renewable
CEO Shin Shibata, CFO Shiro Suzuki and and 50% to institutional investors. Japan Employee Stock Ownership
Advantage Partners. There is a greenshoe of 530,400 shares !SSOCIATIONûANDû/RIXû"ANKûHAVEûINDICATEDû
Proceeds will be used for software and a 180-day lock-up. interest for up to 774,000 shares, ¥0.2bn and
DEVELOPMENTûCOSTSûANDûMARKETINGûEXPENSES Daiwa was the bookrunner. ¥0.1bn of the offering, respectively.
There is a 180-day lock-up on the issuer There is a 685,600 primary share
ANDûSOMEûEXISTINGûSHAREHOLDERSûANDûAû TOPPAN OFFLOADS RECRUIT BLOCK greenshoe.
day lock-up on the sellers. The selling shareholders include
The shares are due to be listed on Printing business company Toppan has Shanghai Alliance Financial Services,
December 15. raised ¥105.8bn (US$933m) from a block in company director Yang Pang and president
The company provides online transaction RECRUIT HOLDINGS. and representative director Katsuhito
services including business-to-business and The 15m shares, representing 0.88% of Manabe.
credit card payments. outstanding, were priced at ¥7,053 each, a Books will be open until December 13.
Credit Suisse, Daiwa and SMBC Nikko are the 3.5% discount to Wednesday’s close of The deal will price on December 14 and the
joint global coordinators. ¥7,309. shares are due to be listed on December 15.
The books were multiple times covered, The deal will be split equally between
ZEAL CO LAUNCHES IPO ANDûTHEûTOPûlVEûINVESTORSûTOOKûûOFûTHEû retail and institutional investors.
deal. Proceeds will be used to develop solar
ZEAL CO, an e-commerce chatbot services There is 90-day lock-up for Toppan. power plants and acquire new plants.
provider, started bookbuilding on December Bank of America and Goldman Sachs were Established in 2012, the company
8 for a TSE IPO of up to ¥10.5bn (US$92.4m) joint bookrunners. develops and manages renewable energy
in a ¥1,220–¥1,420 price range. power plants.
The deal comprises 2.5m primary and KOHOKU KOGYO PRICES AT TOP SMBC Nikko is the lead manager.
about 4.9m secondary shares. There is a
greenshoe of 15% of the deal. Lead terminals manufacturer KOHOKU KOGYO ENECHANGE COMPLETES FOLLOW-ON
The selling shareholders are Jafco, has priced its TSE IPO at the top of the
company CEO Masahiro Shimizu, FreakOut ¥3,840–¥4,000 range to raise ¥10.4bn ENECHANGE, a provider of energy-related data,
Holdings, CyberAgent, FreakOut Shinsei (US$91.6m). has priced a ¥7.27bn (US$64m) follow-on.
Fund and Will Group. The book was more than 15 times covered The offering comprised 750,000 primary
There is a lock-up of 180 days on the with no price sensitivity across almost 80 and 552,000 secondary shares at ¥5,584
issuer, management and selling lines. The book also received strong demand each, or an 8.01% discount to the previous
shareholders. from global long-only and hedge fund close of ¥6,070, from a discount range of
The deal is structured as a rinpo, a investors, with almost 60% allocated to the 5%–8%.
domestic offering with a dedicated overseas long-only accounts. There is a 15% greenshoe of 195,000
placement for institutional buyers but no The domestic retail tranche was also well shares.
English language prospectus. oversubscribed. There is a 180-day lock-up on the issuer
Books will be open until December 13. The The base deal comprised 1m secondary and selling shareholders and a 90-day
deal will be priced on December 15 and the shares from CEO Futoshi Ishii and 1.6m lock-up on Daiwa Securities Group.
shares are due to be listed on December 23. treasury shares. The deal is structured as a rinpo, a
Proceeds will be used for labour costs, There is a 15% greenshoe. domestic offering with a dedicated overseas
RENTûFORûNEWûOFlCEûSPACEûSERVERûCOSTSû There is a 90-day lock-up for Ishii, his placement for institutional buyers but no
ADVERTISINGûEXPENSESû2$ûOVERSEASû asset management company and option English-language prospectus.
EXPANSIONûCOSTSûANDûDEBTûREPAYMENT holders, and a 180-day lock-up for the issuer The selling shareholders are the company
Daiwa and Credit Suisse are the joint and employees. CEO Yohei Kiguchi and COO Ippei Arita and
lead managers. Mitsubishi UFJ Morgan About 82.1% of the deal was sold to corporate investor EPCO.
Stanley, SBI, Matsui, Rakuten and Monex are domestic investors and 17.9% to Proceeds will be used for the company’s
the co-managers. international institutions. platform and data businesses, as well as
The shares will be listed on December 21. RECRUITMENTûANDûPERSONNELûEXPENSES
SUN* COMPLETES FOLLOW-ON Proceeds will be used for capital SBI and Credit Suisse are the joint
investment and investment in subsidiaries. bookrunners.
A group of shareholders in SUN* has raised The company manufactures lead
¥8.6bn (US$76m) through a follow-on terminals for aluminium electrolytic LINK AND MOTIVATION SEALS
offering priced at ¥2,380 per share. capacitors used in different kinds of PLACEMENT
The book was multiple times covered. electronics products.
Allocations were skewed towards long-only Nomura was the bookrunner. TSE-listed engineering services provider LINK
INVESTORSûANDûEXISTINGûSHAREHOLDERSû4HEûTOPû AND MOTIVATION has completed a ¥6.33bn
10 investors took over 90% of the book. RENEWABLE JAPAN LAUNCHES (US$55.5m) follow-on offering priced at ¥633
Sun* sold 3.6m secondary shares at a UP TO ¥8.22bn IPO per share.
3.53% discount to the closing price of ¥2,467 The company sold 10m shares (3.4m
on December 6, from a discount range of Renewable energy company RENEWABLE JAPAN secondary and 6.6m treasury shares) at a
3%–5%. has opened the books for an IPO of up to 3.06% discount to the closing price of ¥653
The selling shareholders were Kazunari ¥8.22bn (US$72.7m) in a ¥1,720–¥1,800 on December 7, from a discount range of
Fujimoto, Kenichi Takakura, Norinchukin price range. 3%–5%.

66 International Financing Review December 11 2021

 EQUITIES ASIA-PACIFIC

4HEûSELLINGûSHAREHOLDERSûAREû0HOENIXûANDû The acquisition values LifeHealthcare at The current South Korean IPO record is
company chairman Ozasa Yoshihisa. 11.5 times EV/CY22F Ebitda, the midpoint of held by Samsung Life Insurance, which
There is a 15% 1.5m share greenshoe. the forecast range. raised W4.88trn in 2010.
The proceeds will be used for LifeHealthcare mainly provides Australian, The LG Energy Solution deal comprises
DEVELOPMENTûANDûMARKETINGûEXPENSESû New Zealand and South-East Asian 42.5m shares (34m primary/8.5m
PERSONNELûEXPENSESûANDûTHEûREPAYMENTûOFû healthcare professionals with medical secondary), in an indicative price range of
long-term debt. devices, consumables, capital equipment and W257,000–W300,000 each.
Nomura was sole bookrunner. in-house manufactured allograft material. The company plans to sell 55%–75% of the
Macquarie Capital was the lead manager. shares to institutional investors, 25%–30% to
retail and 20% to an employee stock
MALAYSIA ownership plan.
PHILIPPINES The range implies a market capitalisation
TOP GLOVE PLANS Q1 of US$51bn–$59bn.
HONG KONG LISTING BANK OF COMMERCE PLANS IPO The selling shareholder is LG Chem. There
is no greenshoe.
TOP GLOVE has secured shareholder approval BANK OF COMMERCE is planning a Ps3.51bn Pre-marketing will end on December 17.
TOûLISTûINû(ONGû+ONGûANDûEXPECTSûTOûCOMPLETEû 53M û)0/ûNEXTûYEARûATûAûMAXIMUMûPRICEû Bookbuilding will run from January 3 to 12 and
THEûmOATûINûTHEûlRSTûQUARTER of Ps12.50. pricing is slated for January 14. Subscription for
It plans to sell 793.5m shares, or about 9% Up to 280.6m shares are on offer. There is the retail portion and employee stock
of the enlarged share capital, to raise a greenshoe of 42m shares. ownership plan will run on January 18–19 and
HK$3.68bn (US$473m), less than half its The bank is part of San Miguel Group. the shares will list on January 27.
target in October and less than a quarter of Its total assets rose 18% to Ps170.92bn in The EV battery unit, which was spun off
its original plan at the beginning of the year. ûFROMû0SBNûINûû.ETûPROlTû from chemical giant LG Chem in December
The company is listed on Bursa Malaysia and rose 20% to Ps784.4m from Ps652.7m during last year, is a major supplier to customers
HASûAûSECONDARYû3INGAPOREû%XCHANGEûLISTINGû the same period. including Tesla and General Motors.
The world’s largest rubber glove maker The IPO funds will be used to fund Proceedings will be used for capital
lLEDûAûSECONDûLISTINGûAPPLICATIONûINû(ONGû lending activities, acquire investment EXPENDITUREûPRODUCTIONûFACILITIESûTHEû
+ONGûONû/CTOBERûûAFTERûITSûlRSTûlLINGû SECURITIESûANDûlNANCEûCAPITALûEXPENDITUREû repayment of outstanding debt and general
LAPSEDûINû!UGUSTûATûTHEûENDûOFûAûSIX MONTHû requirements. working capital.
validity period. BDO Capital, China Bank Capital, Philippine KB Securities and Morgan Stanley are the
The planned share sale has been Commercial Capital and PNB Capital are the joint lead bookrunners. Bank of America,
repeatedly delayed by a US ban on joint issue managers. Citigroup, Daishin, Goldman Sachs and Shinhan
Malaysian-made gloves over alleged unfair Bank are the joint bookrunners.
labour practices.
CICC is the sole sponsor. SINGAPORE HYUNDAI ENGINEERING GETS
GREEN LIGHT
CICT UPSIZES PLACEMENT
NEW ZEALAND HYUNDAI ENGINEERING has received preliminary
CAPITALAND INTEGRATED COMMERCIAL TRUST has )0/ûAPPROVALûFROMûTHEû+OREAû%XCHANGEû4HEû
EBOS GROUP RAISES FUNDS FOR M&A raised S$250m (US$183m) through an mOATûCOULDûRAISEûABOUTû53MûANDûISûSETûTOû
upsized placement priced at S$1.96. BEûLAUNCHEDûEARLYûNEXTûYEARûWITHûTHEûSHARESû
Medical wholesaler EBOS GROUP has raised The shares were priced from a S$1.93– to be listed in February, said people with
NZ$674m (US$457.7m) from a fully $1.981 range. knowledge of the matter.
underwritten placement to fund the CICT increased the size of the deal to Established in 2001, the company is the
acquisition of medical devices distributor 127.5m shares from 103.6m. plant construction and infrastructure
LifeHealthcare. The issue price represents a 4.4% discount AFlLIATEûOFû(YUNDAIû-OTORû'ROUP
The deal received strong support from both to the last close of S$2.05. Hyundai Engineering and Construction,
EXISTINGûANDûNEWûSHAREHOLDERSûACROSSû.EWû Books were oversubscribed with demand the construction arm of the group, is the
Zealand and Australia as well as offshore money. from long-only investors, private wealth largest shareholder of Hyundai Engineering
The company sold 19.5m shares or 11.9% investors and multi-strategy investors. with a 38.62% stake. The group’s logistics
OFûEXISTINGûSHARESûATû.:ûORûAûû Around 40 accounts participated and the top arm, Hyundai Glovis, holds 11.67%.
discount to the last close of NZ$36.50 on 10 got 70% of the allocation. Other shareholders include carmaker Kia
December 8. JP Morgan and United Overseas Bank are the Motors and auto parts maker Hyundai
Ebos Group is also raising NZ$105m on banks on the transaction. Mobis.
the same terms from a non-underwritten Goldman Sachs, KB Securities and Mirae Asset
RETAILûOFFERûTOûELIGIBLEûEXISTINGûSHAREHOLDERSû Daewoo AREûLEADINGûTHEûmOAT
in New Zealand or Australia. SOUTH KOREA
The retail offer will run from December NETMARBLE EXITS KAKAO BANK
15 to January 17. LG ENERGY SOLUTION PRE-MARKETS FOR W481.6bn
Ebos Group is buying 100% of LARGEST EVER IPO
LifeHealthcare’s Australia and New Zealand Mobile games developer Netmarble has
subsidiaries and 51% of its Asian unit, Electric vehicle battery maker LG ENERGY raised W481.6bn (US$424m) through the
Transmedic, for a total consideration of SOLUTION has started pre-marketing a KRX sale of all its shares in KAKAO BANK.
about A$1.2bn (US$859.6m), representing IPO of up to W12.75trn (US$10.8bn), South The deal, comprising 7.62m shares or 1.6%
an enterprise value of about A$1.3bn. Korea’s largest ever. of the outstanding, was priced at W63,200

International Financing Review December 11 2021 67

per share, a 6.4% discount to the closing Shares in the company closed up 1.7% at Books were covered in less than 15
price of W67,500 on December 8. DKr283.20 on Tuesday. By Friday at 10am in minutes, and messaging before books
Morgan Stanley was sole bookrunner. London, they were lower at DKr273 each. were due to close at 9:15am in London
Kakao Bank was listed in August after it warned that orders below €49.50 risked
raised W2.55trn from a KRX IPO. missing out. Pricing at that level is a 2.2%
FRANCE discount to Tuesday’s close of €50.62 a
share.
ALTAREA REPORTS 97.4% Bank of America, Morgan Stanley, Societe
RIGHTS ISSUE TAKE-UP Generale are joint global coordinators and
EUROPE/MIDDLE each underwrote 20% of the deal.
EAST/AFRICA Real estate business ALTAREA has secured BNP Paribas, Citigroup, Commerzbank,
take-up of 97.4% on its €350m rights issue. Deutsche Bank, Goldman Sachs, ING, Intesa
A total of 2.37m shares were subscribed Sanpaolo, JP Morgan, LBBW, UBS and UniCredit/
DENMARK FROMûAPPROXIMATELYûMûONûOFFERû Kepler Cheuvreux were joint bookrunners and
Additional demand of 649,995 shares shared the remaining 40% equally.
BAVARIAN NORDIC RAISES FUNDING covered the balance of 63,954 shares. Fees to the syndicate totalled €119.5m,
FOR PHASE III TRIALS Shares were offered on a 3-for-22 basis at including discretionary elements.
€143.75 each, a 19.8% discount to the The completion of the capital increase is
Vaccine developer BAVARIAN NORDIC raised €179.17 TERP. the last stage in Vonovia’s acquisition of
DKr1.7bn (US$258m) in an accelerated Success was largely assured, with 83.6% Deutsche Wohnen, of which it owns 87.6%
bookbuild on Monday evening, having committed by shareholders at launch. following a takeover offer.
mAGGEDûTHEûFUNDRAISINGûTHATûMORNINGû Chairman and CEO Alain Taravella Proceeds will pay down €15.6bn
The company said it will initiate Phase III committed to subscribe for 48.4% with co- OUTSTANDINGûONûTHEûBRIDGEûlNANCINGûUSEDûTOû
trials of its RSV (respiratory syncytial virus) founder Jacques Nicolet and general back the acquisition. The rights issue
VACCINEûCANDIDATEûWITHûANûEXPECTEDûCOSTûOFû manager Jacques Ehrmann; Credit Agricole syndicate was the same as for the loan.
US$250m, subject to a capital increase. Assurances committed to 24.7%; APG for Vonovia shares closed down 0.75% at
The 10% capital increase was priced at 7.1%; supervisory board chair Christian de €50.24 on Wednesday. By Friday at about
DKr268 per share, a 3.8% discount to Gournay and Opus Investment for 1.48%; 11am in London they were slightly lower at
Monday’s close of DKr278.60. The shares and Sogecap and BPCE Vie for 1% each. €50.04 each.
had fallen 7.6% on Monday. The rest was underwritten by a syndicate of
Citigroup and Nordea were joint bookrunners Natixis, Societe Generale, BNP Paribas, Credit
on the trade, which saw 6.37m shares sold. Agricole/Kepler Cheuvreux and Morgan Stanley. The ISRAEL
Reverse enquiry built during Monday, and French banks are also providing an €800m loan.
no wall-crossing was needed, a banker Altarea will use the fresh cash to fund its ARISON SELLS 3.4% OF HAPOALIM
involved said. acquisition of real estate asset manager IN UPSIZED ABB
The deal was covered in about 45 minutes Primonial, announced in June.
and the book contained around 80 lines, led It is buying Primonial for an enterprise The holding company of Israel’s richest
by an anchor order. value of €1.9bn in two stages – 60% in Q1 woman Shari Arison sold 3.4% of BANK
4HEREûWASûAûGOODûMIXûOFûREGIONALûANDû and the rest in 2024. HAPOALIM on Tuesday evening in an upsized
international demand, and long-only names Altarea shares closed down 1.5% at accelerated bookbuild run by Bank of America
took more than 70%. €157.60 on Wednesday. as sole bookrunner.
Bavarian Nordic on Sunday also Barak Capital Underwriting was Israeli
announced positive results for Phase II trials selling agent and Rothschild advised the
of its Covid-19 vaccine candidate. The GERMANY seller.
company raised DKr1.14bn in March in an Unusually, considering the mandate was
ABB run by Danske Bank, Jefferies and VONOVIA COMPLETES JUMBO won through an auction, the NIS1.4bn
Nordea to fund its development. RIGHTS ISSUE (US$457m) sell-down was upsized by about
ûDURINGûTHEûBOOKBUILDû!TûTHEûlNALûCOUNTû
EMEA EQUITIES Real estate company VONOVIA has wrapped up 46m shares were sold in the deal, which
BOOKRUNNERS: 1/1/2021 TO DATE the largest rights issue of the year with a launched with 35.6m shares on offer, or 2.7%
Managing No of Total Share take-up of 98.59%, leaving a rump placing of of the bank.
bank or group issues US$(m) (%) just €140m following the €8bn fundraising. Final pricing was NIS30.90, a 3% discount
1 Goldman Sachs 121 22,241.28 8.7 Of the 201.3m shares offered 198.5m were to Tuesday’s NIS31.87 close and off the
2 Morgan Stanley 96 20,096.02 7.8 subscribed on a 7-for-20 basis at €40 each, a bottom of guidance of NIS30.75 to the
3 JP Morgan 132 19,410.70 7.6 22.5% discount to TERP of €51.64. market close.
4 Citigroup 95 15,811.97 6.2 About 15% of the rights issue was There was strong support from
5 Bank of America 76 15,181.84 5.9 guaranteed in advance by shareholders APG international and local investors, with
6 BNP Paribas 73 11,502.90 4.5 Asset Management and Norwegian wealth particularly robust local demand. About 80%
7 Jefferies 95 9,784.46 3.8 fund Norges Bank Investment Management, of the deal went to long-only accounts.
8 Barclays 58 8,835.72 3.4 which said they would maintain their Shares in Bank Hapoalim fell on
9 UBS 43 7,503.74 2.9 respective stakes of 4% and 11.1%. 7EDNESDAYûMORNINGûBUTûCLOSEDûmATûTOû!""û
10 Berenberg 78 6,462.47 2.5 The rump of 2.8m shares was quickly sold pricing.
Total 1,265 256,814.01 on Wednesday morning and represents less The seller retains about 7.95% of the bank,
Including all domestic and international deals and rights issues than 0.4% of the company’s total share ACCORDINGûTOû2ElNITIVûDATAûANDûISûLOCKEDûUPû
Source: Refinitiv SDC code: C4cr capital post-money. for 90 days.

68 International Financing Review December 11 2021

 EQUITIES EMEA

Arison last sold shares in Bank Hapoalim The deal is contingent on the SPAC
in April, shedding 4% for NIS1.5bn at holding €250m after redemptions and fees POLAND
NIS25.50 per share via Citigroup and to IPO banks. The deal could also fall foul of
Goldman Sachs. the UK’s National Security and Investment PRACUJ OPENS FLAT THEN DROPS
Act 2021, which comes into force on January
PERION RAISES US$156.5m 4 and allows the government to intervene in While Polish online recruitment company
FROM OVERNIGHT STOCK SALE ACQUISITIONSûINûARTIlCIALûINTELLIGENCEûANDû GRUPA PRACUJ was able to price its IPO close to
OTHERûSECTORSû4HEûCOMBINATIONûISûEXPECTEDû the middle of the range, the shares dropped
Capping a big year for issuance from the TOûCOMPLETEûINûTHEûlRSTûQUARTER to the bottom of the marketed guidance in
advertising technology sector, Nasdaq and Proceeds will be used to accelerate debut trading on Thursday.
4ELû!VIVû3TOCKû%XCHANGE LISTEDûPERION BenevolentAI’s development, scale up its As a result stabilisation may see the
NETWORK raised US$156.5m last week from clinical pipeline and invest in technology. Z1.1bn (US$270m) Warsaw IPO shrink as a
an upsized follow-on stock sale. Goldman Sachs and JP Morgan, joint books 1.5m-share brownshoe is used. Around
Oppenheimer & Co, Stifel and Raymond James on the SPAC IPO, are placement agents on 15.1m secondary shares were sold in the
led the sale of 7.3m Perion shares or 21% of THEû0)0%ûANDûAREûlNANCIALûADVISERSûONûTHEû IPO.
the outstanding at US$21.50, a 12.1% business combination. 3HARESûOPENEDûmATûTOû)0/ûPRICINGûOFû:û
discount to Wednesday’s close. Odyssey shares closed at €9.98 on Monday. apiece from a Z70–Z82 range, but closed
Despite the wide discount, good demand more than 5% down at Z70. On the day 2.2m
enabled the syndicate to upsize the offering shares changed hands, representing 16% of
by more than 50% from US$100m at launch. NORWAY the base deal.
“The book was multiple times covered, The IPO gives Pracuj a market cap of Z5bn
but more importantly we had new long-only NORVA24 MIRED ON DEBUT ONûADMISSIONûANDûAûûFREE mOAT
investors drive the strength of the book,” a On Friday, trading was far worse, with the
banker close to the deal said. Shares in Nordic sewerage business NORVA24 stock opening down at Z69.02 and falling to
In Thursday’s aftermarket, Perion shares were bogged down on their debut on Z65.59 by midday in London, more than 11%
fell to US$22.46, though they are still up 80% Thursday, opening more than 8% below below pricing.
this year. pricing and tanking by 18% in early trading. Citigroup, DMBH, Goldman Sachs and Trigon
In January, Perion priced a US$57.4m The SKr2.31bn (US$255m) Nasdaq were joint global coordinators, and joint
follow-on offering at the US$11.50 mark via 3TOCKHOLMû)0/ûCAMEûWITHûlXEDûPRICINGûOFû bookrunners with Numis. mBank was co-lead
Oppenheimer and Stifel. SKr36 per share and more than half the deal manager.
was covered by a SKr1.245bn cornerstone
TRANCHEû4HEûmOATûWASûCOVEREDûONûTHEûlRSTû
NETHERLANDS day of bookbuilding. SAUDI ARABIA
Norva24 shares opened below pricing at
BENEVOLENTAI TO LIST VIA ZAOUI SPAC SKr33, fell to a low of SKr29.525 in early PIF COMPLETES STC SELL-DOWN
trading and closed down 12.8% at SKr31.40.
Zaoui brothers-backed SPAC ODYSSEY More than 18.5m units changed hands, Public Investment Fund has wrapped up a
ACQUISITION is merging with London- nearly 29% of the base deal. SR1.2bn (US$320m) upsized sell-down in
headquartered clinical-stage AI drug 4HEûSHARESûOPENEDûmATûONû&RIDAYûBUTûHADû SAUDI TELECOM COMPANY, pricing 120m shares
discovery business BENEVOLENTAI having fallen to SKr30.995 by midday in London. at the bottom of SR100–SR116 guidance.
completed a €135m PIPE to add to IPO Primary proceeds totalling SKr920m will Retail investors took 10% of the deal, and
proceeds of €300m. be used to repay debt and for general the remainder was allocated equally
The healthcare-focused SPAC listed on corporate purposes. Secondary selling between domestic and international
%URONEXTû!MSTERDAMûINû*ULYûLEDûBYûFORMERû totalled SKr1.39bn from 38.7m shares from accounts.
-!ûBANKERSû-ICHAELûANDû9OELû:AOUI Valedo Partners. One particularly large international order
BenevolentAI has more than 20 in-house The valuation on admission was SKr6.9bn led the book, with the deal attracting strong
drug programmes and the company has a ANDûTHEûFREE mOATûISûûRISINGûTOûûONû international anchor demand.
commercial collaboration with AstraZeneca FULLûEXERCISEûOFûAûMûSHAREûPRIMARYû The book contained hundreds of lines,
for chronic kidney disease. BenevolentAI also greenshoe. according to a banker involved, and about
SUCCESSFULLYûIDENTIlEDû%LIû,ILLYSûRHEUMATOIDû A book of more than 70 lines saw over 80% of the institutional portion went to
arthritis drug baricitinib as a treatment for two-thirds go to Nordic money, and the top long-only accounts.
Covid-19. The company has a research facility 10 took more than 70% of the IPO, including More than 30 investors did not receive an
INû#AMBRIDGEûANDûANûOFlCEûINû.EWû9ORK the cornerstone tranche. There were also a allocation.
The merger values BenevolentAI at number of anchor orders in a book heavily The deal was upsized on Wednesday to 6%
€1.1bn pre-money. skewed to long-only accounts. of the company from 5% at launch.
)NVESTORSûINûTHEû0)0%ûINCLUDEûEXISTINGû Final pricing represents estimated EV/ The original deal was covered on Monday
BenevolentAI shareholder Temasek, Ebitda for 2022 of 24 and estimated EV/ afternoon after books opened on Sunday,
AstraZeneca, healthcare investors Ally Ebitda for 2022 of 15. and the upsized trade was covered on
Bridge Group and Invus, among others. Swedbank Robur Fonder, DNB Funds Thursday morning.
Before redemptions, Odyssey Management, Livforsakringsbolaget Skandia, HSBC, Goldman Sachs, Morgan Stanley and
shareholders including the sponsors will omsesidigt and Skandia Fonder, and Carnegie SNB CapitalûAREûJOINTûlNANCIALûADVISERSûANDû
own 23.5% of the company, with Fonder were the cornerstone investors. joint bookrunners with Citigroup and Credit
BenevolentAI shareholders owning 67.4%. Carnegie and Citigroup are joint global Suisse.
Investors in the PIPE will hold the coordinators, and joint bookrunners with Shares in STC closed on Thursday at
remainder. Danske Bank, DNB and SEB. SR110 per share.

International Financing Review December 11 2021 69

 PETRO RABIGH’S LONG-AWAITED A three-day wall-crossing was carried ASIA RENEWABLE FUND
RIGHTS ISSUE out to give investors a chance to get COMPLETES SMALLER LONDON IPO
comfortable with the primary issue,
PETRO RABIGH, a joint venture between Saudi leading to the deal being covered on THOMASLLOYD ENERGY IMPACT TRUST has raised
Aramco and Sumitomo Chemical, is indications. US$115.4m in a London IPO, below its target
planning to raise SR7.95bn (US$2.1bn) Formal coverage came within 15 of up to US$335m.
through a rights issue to reduce liabilities. minutes of launch and after 7:30pm in Shore Capital was bookrunner.
4HEûCOMPANYûWILLûlRSTûCOMPLETEûAûû London the deal was increased to 650,000 The fund will invest in renewable power,
capital reduction due to accumulated losses of shares from 600,000, representing 6.8% of transmission infrastructure, energy storage
SR1.2bn that will see one share cancelled per 7.3 share capital. and sustainable fuel production in Asia.
shares and then it will complete the rights issue. Pricing was SFr290, a 12.4% discount to Shares were offered at US$1 each.
A rights issue has been in the works since 2015, Wednesday’s SFr331 close. The shares A wide range of investors came into the
when the board recommended raising SR9.3bn ended 2020 at SFr283, though they were book, including institutional asset
TOWARDSûTHEûEXPANSIONûOFûITSûRElNERYûHSBC was BRIEmYûABOVEû3&RûINûMID &EBRUARY managers, banks, wealth managers, family
appointed to lead the rights issue in 2016. 4HEûlNALûBOOKûWASûCOVEREDûSEVERALûTIMESû OFlCESûANDûRETAILûINVESTORS
The company will seek approval for the The top 10 orders took more than 60% of the After the issue of 34.6m consideration
capital reduction and rights issue from the trade and the top 20 more than 85%, with shares related to an acquisition, the
Capital Market Authority and then seek around a quarter of orders zeroed. company will have a market cap of
shareholder approval. Zur Rose shares closed down 4.2% and US$150m.
well above pricing at SFr317. Trading in the shares starts on December 14.
JAHEZ IPO GROWS Bank of America and Jefferies were joint Trust chair Sue Inglis said that the deal
bookrunners. attracted large UK and European investors,
Saudi online food delivery company JAHEZ including a £25m investment from the UK
has received approval from the Capital government’s Mobilist initiative that is
Market Authority to increase the number of UK dedicated to investing in green
shares in its IPO to 1.9m, representing 18% infrastructure, technology and businesses.
of the company, up from 1.4m, or 13%. IDEAGEN RAISES £103.5m FOR GROWTH
Pre-marketing began on December 1. POD POINT PARTIALLY EXERCISES ‘SHOE
HSBC is lead bookrunner on the IPO, UK software company IDEAGEN raised
which will see the company list on £103.5m on Wednesday evening, having Electric vehicle charging business POD POINT
Tadawul’s junior Nomu market. launched with ambitions of £100m to HASûPARTIALLYûEXERCISEDûTHEûSECONDARYû
bolster the balance sheet and provide greenshoe on its London IPO, increasing the
TADAWUL TICKS UP ON DEBUT lREPOWERûFORûACQUISITIONSûANDû DEALûTOûaMûANDûTHEûFREE mOATûTOûû
investments. !ûTOTALûOFûMûSHARESûWEREûEXERCISEDû
Shares in SAUDI TADAWUL GROUP rose on their In total, 37.03m shares were sold in the adding £4.1m at IPO pricing of 225p per
trading debut on Wednesday after the stock institutional bookbuild and 1.29m went to share. It represents about 40% of the
EXCHANGEûOPERATORûWRAPPEDûUPûANûALL retail through PrimaryBid, representing an greenshoe that was available.
secondary SR3.78m (US$1bn) IPO last week. aggregate 15% of share capital. Pricing was The 10% ‘shoe was provided by EDF and
Shares closed on Wednesday at SR118, lXEDûATûPûANûûDISCOUNTûTOû ,EGALûû'ENERALû
12.4% up from IPO pricing of SR105 that Wednesday’s 306p close and a 1.6% EDF owns about 55% of Pod Point, and
came at the top of the SR95–SR105 range. discount to the VWAP over the 15 days to ,EGALûû'ENERALûOWNSûAROUNDûû
!CCORDINGûTOû2ElNITIVûDATAûABOUTûMû December 7. ACCORDINGûTOû2ElNITIVûDATAû
SHARESûCHANGEDûHANDSûONûTHEûlRSTûDAYû The deal was launched with coverage on Bank of America and Barclays were joint
representing just over half the 36m shares INDICATIONSûFROMûAûWALL CROSSINGûEXERCISEû global coordinators on the IPO, and joint
sold in the IPO. and soft pre-emption was observed. The bookrunners with Numis. Bank of America
Shares closed Thursday higher at SR126, TOPûûORDERSûTOOKûAPPROXIMATELYûû was stabilising manager.
20% up from IPO pricing. from a book of around 70 lines, with the The company sold 44.3m new shares in
The deal drew demand of SR458bn and top 20 taking just under 90% and more the IPO to raise £99.7m. Pricing came at the
was 121 times subscribed. than 90% of the deal going to long-only bottom of 225p–275p guidance.
A retail tranche wrapped up on December money. A number of shareholders came in Shares in Pod Point traded down on their
2 with about SR5bn in demand, and the with above pro rata orders. debut on November 4, closing 4% lower at
MAXIMUMûûWASûALLOCATEDûTOûMOREûTHANû Ideagen has spent the £48.7m raised last 216p. That proved to be the low close and a
598,000 individual investors. December alongside debt to make eight week later the shares were above water and
JP Morgan, Citigroup and SNB Capital were acquisitions for £141m. That has provided haven’t looked back since. More than 99% of
joint leads. £32.4m of annualised recurring revenues, stabilisation was on the debut, with BofA
with Ideagen targeting £200m of ARR by out of the market after four days (and on one
April 2025 and looking at several of those it bought a solitary share).
SWITZERLAND acquisition opportunities. Shares have since peaked at 291.5p and
Ideagen shares dropped sharply on closed at 254p on Monday.
ONLINE PHARMACY ZUR ROSE 4HURSDAYûANDûCLOSEDûmATûTOû!""ûPRICINGûATû By Friday at 11am in London they were
RAISES SFr188.5m 270p. The shares are now little changed for lower at about 241p each.
2021, having ended last year at 280p. In about a week they climbed to trade
Online pharmacy ZUR ROSE raised SFr188.5m Joint brokers Canaccord Genuity, lNN#AP, around IPO pricing, and hit the high of
(US$204m) on Wednesday night in an ABB and Numis were joint bookrunners with 291.5p on November 16, or 29.6% above IPO
to fund growth. Goldman Sachs. pricing.

70 International Financing Review December 11 2021

 EQUITIES AMERICAS

RECYCLING TECHNOLOGIES
PUSHES AIM IPO TO Q1

RECYCLING TECHNOLOGIES GROUP has postponed

HashiCorp prices US$1.22bn
its £40m all-primary AIM listing until early
INûTHEûlRSTûQUARTER Nasdaq IPO above range
Pricing was due on December 9, with
share trading set to begin on December 16. „ US Cloud infrastructure software firm delivers lean returns on debut
3OMEûSTRATEGICûINVESTORSûNEEDûEXTRAûTIMEû
TOûMAKEûAûlNALûINVESTMENTûDECISIONû Open-source cloud infrastructure software firm software IPOs in recent years, though the
according to a statement from the company HASHICORP brushed aside the recent sell-off of past month has seen a sharp decline in sector
on Friday. high-growth stocks to price its Nasdaq IPO well valuations as the prospect of higher interest
Orders received in the institutional offer above range for proceeds of US$1.22bn late on rates next year compresses sky-high multiples.
will remain valid, and the company will Wednesday, but could only deliver a subdued November’s correction in software multiples
update investors in due course regarding the debut in choppy market conditions on Thursday. (down about 25% by some measures before
new timetable. A syndicate led by Morgan Stanley, Goldman a strong rebound in the past week) probably
A broad range of investors have shown Sachs and JP Morgan priced the sale of 15.3m meant the final price was lower than it might
INTERESTûINûTHEû)0/ûINCLUDINGûhSIGNIlCANTû HashiCorp Class A primary shares, or about have been had the deal come earlier this year,
blue-chip funds”, the company said. 8% of the company, at US$80, above the the banker said.
A range of 150p–170p per share was set US$68–$72 marketing range and attributing the As it was, HashiCorp still did not come cheap,
when books opened on November 26, and company a market cap of US$14.5bn. the final terms valuing the company at roughly
the company was shooting for a market cap Debuting the next day, HashiCorp shares 35-times forward sales projections by analysts
of £102m–£111m. opened at US$81.16 and later traded as high from the syndicate banks.
Stifel is bookrunner. as US$89.50 before closing at US$85.19 for a HashiCorp grew revenues by 49% to
day-one gain of 6.5%. US$224.2m in the nine months ended October
HILTON FOOD GROUP RAISES £75m It was a lean return by the standards of the 31. While loss-making, the company has
FOR ACQUISITION usually white-hot software sector and despite the consistently generated gross margins of more
offering being heavily oversubscribed, though a than 80%. Analysts expect HashiCorp’s sales to
Meat-packing company HILTON FOOD GROUP banker close to the deal said it was important the grow to about US$400m next year and approach
raised £75m in an intraday ABB on Friday to offering did not lose money for investors in the US$530m in 2023.
part fund its acquisition of Dutch smoked often difficult final month of the year. Its IPO valuation still puts it in the same
salmon producer Foppen. The syndicate executed the IPO using league valuation-wise as some of the hottest
Hilton Food said on Friday that it has Morgan Stanley’s “ALPS” portal/hybrid auction software IPOs in the past year or two, among
agreed to buy Dutch Seafood Company, technology, requiring institutional investors to them GitLab, Toast and Snowflake. GitLab,
which trades as Foppen, for an enterprise lob orders at a specified price and size rather which went public in October, currently holds the
value of €90m. than the market orders that have previously record at 37.5-times, but its shares traded below
A total of 6.6m shares were placed at dominated bookbuild for tech IPOs. the offering price in the past week.
£11.40 each, a 4.7% discount to Thursday Though bankers argue this process provides HashiCorp counts venture capital firms
close of £11.96. a demand curve that improves transparency Mayfield (18.3% pre-IPO) and GGV Capital
The shares equate to a roughly 8% capital while leaving management with the discretion to (18.2%) as major shareholders.
increase. allocate stock to preferred investors, its increased Its four main commercial products (Terraform,
Numis was bookrunner. usage this year has coincided with record Vault, Consul and Nomad) help companies
The proceeds will also be used to partially multiples for software IPOs. undergoing digital transformation to automate
RElNANCEûTHEû/CTOBERûACQUISITIONûOFû5+û infrastructure provisioning, security, networking
MEATûSUPPLIERû&AIRFAXû-EADOW MULTIPLES and application deployment.
3HARESûFELLûBRIEmYûBELOWû!""ûPRICINGûATû Though well above the top-end of the marketing The firm competes with the big cloud services
2:40pm on Friday to about £11.34 each before range (11.1%), HashiCorp’s final IPO price was still players such as Amazon Web Services, Microsoft
closing at £11.78, down 1.5% on the day. not a material enough increase that it required Azure and Google Cloud, but also legacy
HashiCorp to re-file its terms ahead of pricing. providers such as Red Hat, CyberArk Software
Upping the range and pricing above range and VMWare.
has been a typical progression for high-growth Anthony Hughes

AMERICAS
The past week saw 17 companies raise public, raising nearly US$150bn of proceeds,
about US$10bn, led by the NYSE IPO of the latter up 80% from 2020 levels.
UNITED STATES Brazilian digital bank NU, plus a string of One banker said that while it was possible
SPAC IPOs as a record year for new issuance that some companies would bring follow-
US ECM WINDS DOWN FOR 2021 enters its twilight. ONSûINûTHEûCOMINGûWEEKûHISûlRMûHADû
The coming week’s calendar currently has already opted to postpone at least one deal
The coming week shapes up as effectively only one scheduled IPO, the up to US$805m as investors turn their focus to Wednesday’s
THEûlNALûOPPORTUNITYûFORûCOMPANIESûTOûRAISEû .93%ûDEBUTûOFûmEETûMANAGEMENTûSOFTWAREû FOMC statement.
equity in 2021, though Wednesday’s FOMC lRMû3AMSARAûBEINGûPRICEDûLATEûONû4UESDAYûANDû December activity levels have been
outcome and recent market volatility probably the last major US IPO of the year. complicated by a topsy-turvy market that
provide likely obstacles to a heavy week of !CCORDINGûTOû2ElNITIVûDATAûTHISûWOULDûCAPû saw stocks rally earlier in the past week
issuance. a year that has seen 386 companies go after a heavy sell-off of growth names

International Financing Review December 11 2021 71

 CANNABIS REIT YIELDS US$100m

Intel sets sights on IPO of FROM US IPO

CHICAGO ATLANTIC REAL ESTATE FINANCE, a

Mobileye unit cannabis-focused mortgage REIT, made an

unremarkable Nasdaq debut Wednesday
after raising US$100m from its IPO.
„ US Autonomous driving tech unit readies public markets return but Intel to retain control JMP Securities, Compass Point and
Oppenheimer led the sale of 6.25m shares, a
Intel is looking to bolster its under-performing The plan may also dovetail with Intel’s roughly 36% stake, at US$16.00, the bottom
stock price by returning MOBILEYE to public strategy unveiled earlier this year to become a of the US$16–$18 range and roughly in line
markets next year, roughly five years after major provider of chip-making capacity in the with book value of US$16.01 as of
buying the self-driving technology firm for US and Europe by building its own foundries, September 30.
US$15.3bn. starting with a US$20bn investment in two in Chicago Atlantic shares opened
The semiconductor giant revealed late on Arizona. However, Intel said it did not need the Wednesday’s session at US$16.40, later
Monday it was planning a mid-2022 US IPO Mobileye IPO to execute that strategy. trading as high as US$16.95 before closing at
of “newly issued Mobileye stock” in an effort to US$16.49, a modest 3.1% gain on its debut.
unlock value for its shareholders. RETURN The offering, which had been marketed
In what could rank as one of next year’s The Israel-based Mobileye went public via a for seven full days, was closely followed by
biggest IPOs, Intel would remain the majority US$1bn NYSE IPO at US$25 a share in 2014 led other investment banks looking to take
owner of Mobileye but still get some “cash by Goldman Sachs and Morgan Stanley before public other REITs focused on cannabis,
benefits” from the IPO, management said in a being acquired for US$15.3bn or US$63.54 a people told IFR.
conference call with analysts on Tuesday. share by Intel in 2017. The growth numbers The IPO valued Chicago Atlantic, a
Though Intel did not elaborate, one option Intel is citing suggest a significantly higher provider of secured loans for cannabis
instead of selling Mobileye would be to transfer IPO valuation (some say US$50bn), helped by GROWERSûANDûEXTERNALLYûMANAGEDûATûJUSTû
some debt to Mobileye alongside the IPO the fervour created by the uptake of electric under US$280m.
(probably in a tax-effective manner), freeing up vehicles. Chicago Atlantic plans to use US$31.7m of
Intel’s balance sheet. The two companies also plan to continue to the IPO proceeds to make loans already
Asked by an analyst whether it was collaborate on projects as they pursue committed. This represents about one-
taking Mobileye public because it wanted to the growth of computing in the automotive quarter of its US$120m in committed loans,
or it had to, Intel CEO Pat Gelsinger said he sector. including US$98m under non-binding term-
wanted to because Mobileye was in a “hot Mobileye grew revenue 40% this year, Intel sheets, and in addition to US$318.3m of
category” and an IPO would give it “greater said in a statement. The unit also shipped its loans outstanding as of November 22.
visibility”. 100 millionth EyeQ “system-on-chip”, unveiled
“We have a very unique asset with Mobileye, its production robo-taxi, and secured 41 new GLPI RAISES US$345m FOR
and we want to do everything we can to advanced driver-assistance system programme CASINO PURCHASES
accelerate its momentum in the marketplace, wins from more than 30 automakers globally.
and the visibility that this will have to Despite the IPO plans, Intel has no intention Eager to lock up funding by the end of the
customers, to shareholders, employees and of spinning off or otherwise divesting its year, GAMING AND LEISURE PROPERTIES secured
future talent,” Gelsinger said. majority ownership interest. US$344.6m from a stock sale late on Monday
“We do see it as a way to expose that value Intel shares rose 3.1% to US$52.57 on to help fund the US$1.8bn purchase of three
to the market and shareholders with what we the news on Tuesday but have significantly casino properties.
would expect is a different multiple range,” he underperformed the broader equity market this Bank of America, Wells Fargo, Citigroup and
said, hinting he expected Mobileye to trade at year, trading broadly flat this year even as other Mizuho led the sale of 7.7m shares or just
a materially higher valuation on a standalone chip stocks have soared. 2.6% of GLPI at US$44.75, towards the lower
basis than Intel does as a whole. Anthony Hughes end of the US$44.50–$45.65 marketing
range and a 3.7% discount to Monday’s
US$46.45 closing price.
US EQUITIES through November amid concerns about GLPI shares closed at US$46.85 on
BOOKRUNNERS: 1/1/2021 TO DATE the latest Covid variant and a more Tuesday.
Managing No of Total Share hawkish central bank. The sum raised will partly fund the
bank or group issues US$(m) (%) The average return from this year’s IPOs purchase of the property assets of Live!
1 Goldman Sachs 256 50,984.17 17.3
has also turned negative in recent weeks, #ASINOûû(OTELSûINû-ARYLANDû0HILADELPHIAû
2 JP Morgan 270 48,657.70 16.5
badly under-performing the nearly 25% and Pittsburgh.
3 Morgan Stanley 240 45,585.64 15.4 RETURNûOFûTHEû30û GLPI plans to lease back the real estate to
4 Bank of America 235 30,022.22 10.2 Another banker said syndicate desks privately held casino developer and operator
5 Citigroup 120 16,601.34 5.6 already had a busy pipeline of deals in Cordish, which will pay US$125m of annual
6 Barclays 114 15,320.81 5.2 store for 2022 including a good number of rent, equivalent to an initial 6.9% cap rate.
7 Jefferies 130 9,374.08 3.2 larger IPOs. Though strategists are The consideration for the acquisitions
8 Credit Suisse 81 7,715.09 2.6 forecasting leaner returns from stocks COMPRISESûAûMIXûOFû53MûINûASSUMEDû
9 Wells Fargo 64 5,745.30 1.9 NEXTûYEARûTHEûCONSENSUSûISûSUB  û debt, the issuance of US$323m of operating
10 RBC 49 4,419.80 1.5 after three straight years of outsized partnership units and the roughly US$700m
Total 1,047 295,297.96 gains, bankers are hopeful investors will balance in cash, half of which is coming
Including all domestic and international deals and rights issues TURNûTOûNEWûISSUESûAGAINûTOûlNDûSOURCESû from Monday night’s stock sale and the
Source: Refinitiv SDC code: C3r of alpha. other half from revolver borrowings.

72 International Financing Review December 11 2021

 EQUITIES AMERICAS

GLPI also inked a separate seven-year

agreement with Cordish to contribute 20%
of the equity on new gaming projects. Samsara’s US$805m NYSE IPO
SILVERGATE TAPS ‘CRYPTO-MAFIA’
FOR US$480m DEPOSIT
to cap record year for new issues
„ US Early demand strong despite pressure on growth multiples
In what is perhaps best described as a
volatility-squared investment, crypto- Fleet management/“connected operations In the long tradition of hot cloud IPOs,
banking specialist SILVERGATE CAPITAL cloud” software firm SAMSARA decided it was the company sports high growth, the right
secured US$480m from the sale of new better to go ahead with its IPO now than find out buzzwords (artificial intelligence, Internet of
stock overnight on Tuesday. what 2022 has in store for software multiples, Things and digital transformation), and big-
Goldman Sachs, JP Morgan and Keefe opting on Monday to launch an up to US$805m name sponsorship (Marc Andreessen is the
Bruyette & WoodsûLAUNCHEDûATûAûlXEDû NYSE offering in what may be this year’s final US biggest holder outside the founders).
US$400m marketed at US$145–$155, new issue. It is also structured to increase the chances of
versus a US$165.37 last sale on Wednesday, Morgan Stanley, Goldman Sachs, JP Morgan early gains given the IPO represents only 7% of
before upsizing to 3.3m shares priced at and Allen & Co are leading the sale of 35m the outstanding.
US$145.00, bumping gross proceeds raised Samsara primary shares at US$20–$23 for Yet Samsara comes as many high-growth tech
to US$480m. pricing post-close on December 14, meaning the companies that trade on high EV/sales multiples,
h4HISûISûAûNAMEûTHATûHASûAûBITûOFûAûMAlA stock will debut on the same day (December 15) many of them recent IPOs, have been hit hard
like following,” one banker involved in the that the increasingly hawkish FOMC hands down in recent weeks, while fellow cloud software firm
offering told IFR. “In addition to those its latest monetary policy decision. HashiCorp made a subdued debut in the past
investors, we did see participation from Despite investors’ typical reluctance to take week.
new accounts.” big bets on IPOs at this time of the year, bankers The Global X Cloud Computing ETF is down
Silvergate closed Wednesday’s session at close to the deal said there was already strong nearly 8% this quarter and down 3.3% this year,
US$168.05 only to fall on Thursday to interest in the offering. The deal is also being while Cathie Wood’s Ark Innovation ETF, which
US$148.12. The stock has realised near-100 executed as a hybrid auction, typically reserved holds stocks that reflect many of the market’s
vol over the past 90 days. for IPOs that are expected to draw strong hottest themes, is down 12.6% this quarter and
This is Silvergate’s second equity raise of investor demand. 22.5% this year.
the year following a US$287.5m overnight Founded in 2015 and now with more than
offering at US$63 in January and its third TIMING 13,000 customers, Samsara sells subscriptions
equity-linked raise including US$200m Other high-profile IPOs in the pipeline, such as to a cloud platform that helps business harness
raised from the sale of preferred stock in that of Greek yogurt maker Chobani and fashion Internet of Things data to improve their
August. e-commerce firm Rue Gilt Groupe, have yet to efficiency.
Silvergate is among the fastest-growing, launch their IPOs as planned and appear to have Samsara’s terms attribute the company a
best-capitalised banks specialising in run out of time to do so this year (and bankers market cap of up to US$12.4bn versus annualised
cryptocurrency and last week’s equity have postponed until next year a raft of other recurring revenue of US$492.8m at October 30.
raise provides it with a further buffer for deals). But if anything was going to jump over Actual revenues were US$302.6m, up 74%, in
continued growth. the higher bar that currently confronts new the first nine months of this year.
In the third quarter, the bank saw issues, it was probably Samsara. Anthony Hughes
customer deposits swell to US$11.2bn,
from US$9.9bn during the second quarter,
and the number of customers grow to the stablecoin initiative formerly known STARWOOD RETURNS TO ECM
1,305 from 1,224. Institutions use the as Facebook’s Libra project. WITH US$397m STOCK SALE
3ILVERGATEû%XCHANGEû.ETWORKûTOûTRANSACTû “I remain incredibly enthusiastic about
between crypto and US dollars at any time. Silvergate’s position and ability to After a long absence, STARWOOD PROPERTY
Silvergate generated third-quarter net contribute to the growing stablecoin TRUST, the Barry Sternlicht-led mortgage
income of US$23.5m or 88 cents per share. ecosystem,” Silvergate CEO Alan Lane said REIT, returned to US ECM on Tuesday
At 55 times earnings, Silvergate is ultra- on the Q3 earnings call in October. “Over night with a US$397m all-primary block
EXPENSIVEûBYûSTANDARDSûOFûAûTRADITIONALû time, we believe stablecoins have the trade.
bank, and for good reason. potential to become a meaningful Citigroup, Bank of America, Morgan Stanley
Silvergate pays no interest on the bulk payment rail for customers around the and Wells Fargo sold 16m shares at
of customer deposits, providing zero-cost world. US$24.82, a 3.5% discount to last sale and
funding and making it very sensitive to “We continue to have an open dialogue 1.2-times book value. Starwood shares
interest rates. In response to customer with our regulators and look forward to closed on Wednesday at US$24.79, slightly
demand for leverage, the bank rolled out keeping you updated on (Diem) in the below the offering price.
its SEN Leverage product in January 2020 coming months.” “Historically, Starwood has been
TOûPROVIDEû53ûDOLLARûlNANCINGûONûBITCOINû As an FDIC-insured bank, Silvergate has prudent when it comes to raising equity,”
deposits. a competitive advantage. BTIG analysts wrote in a note to clients. “It
Stablecoin provides it another avenue On November 1, the President’s has not tapped the capital markets just to
for growth. Silvergate already services the Working Group on Financial Markets capitalize on stock price appreciation or to
four leading US-based stablecoin issuers – REPORTûSEEMINGLYûlRMEDûUPûTHATûSTANDINGû fund growth for growth’s sake.”
#IRCLEû0AXû$OLLARû'EMINIû$OLLARûANDû by recommending potential legislation to Starwood last sold stock publicly in 2017
TrueUSD – and in May struck a deal to require stablecoin issuance be conducted INûTHEûFORMûOFûAû53MûlVE YEARû#"ûANDû
BECOMEûTHEûEXCLUSIVEûISSUERûOFû$IEMû53$û through FDIC-insured banks. straight equity in 2016.

International Financing Review December 11 2021 73

 Gensler sends signal on SPAC regulation
„ US SPACs raise US$3.3bn combined through new US listings

US SEC Commissioner Gary Gensler doubled down “There may be some who attempt to use by investors but below the US$10.20 placed in
on his long-running attack on SPACs last week by SPACs as a way to arbitrage liability regimes,” trust.
proposing more stringent regulations on the product. Gensler said. “Many gatekeepers carry out APx Acquisition will focus its search on
The regulatory noose has been tightening functionally the same role as they would in a Mexico, Spanish-speaking Latin America, and
around SPACs for the better part of a year, traditional IPO but may not be performing the Hispanic businesses in the US.
beginning with changes to the accounting of due diligence that we’ve come to expect. Make Riccardo Orcel, a former banker at Russia’s
SPAC warrants in April and the imposition in no mistake: When it comes to liability, SPACs do VTB Capital (and the younger brother of
June of minimum shareholder thresholds to list not provide a ‘free pass’ for gatekeepers.” UniCredit CEO Andrea), landed US$250m on
new SPACs on Nasdaq. Gensler said he had asked his staff to come up Wednesday from the Nasdaq IPO of EMERGING
“I first testified about SPACs in May, and this with proposals to better protect investors around MARKETS HORIZON, a SPAC domiciled in Cyprus
issue has been on the SEC’s Agency Rule List disclosures, marketing practices, and gatekeeper targeting tech/consumer assets in Russia and
since June,” Gensler told the Healthy Markets obligations. Central and Eastern Europe.
Association Conference. Citigroup and VTB Capital were joint
Gensler was careful to note the views were his BULL CONTINUES TO RUN bookrunners on the Emerging Markets SPAC,
own and he was not speaking on behalf of SEC SPACs raised US$3.3bn through 19 new US which also benefited from US$10.20 over-
staff or other commissioners. listings last week, with six new SPAC mergers funding.
He began his remarks by citing the announced at a combined enterprise value of Emerging Markets, which like APx has a
Aristotelian maxim to “treat like cases alike” to US$11.7bn. Year-to-date, 582 issuers have raised compressed 15-month tenor, closed its Nasdaq
highlight the need for SPACs to be treated the US$147.6bn through US-listed SPACs and 222 debut Thursday at US$10.05.
same way as traditional IPOs. mergers announced/completed with a total GENESIS GROWTH TECH ACQUISITION, a tech-
“Are SPAC investors – both at the time of value of US$575bn, according to Refinitiv and focused SPAC headquartered in Switzerland
the initial SPAC blank-cheque IPO and during IFR data. and sponsored by Swiss VC Eyal Perez’s Genesis
the SPAC target IPO – benefiting from the That compares with 321 companies that have Advisors, landed an upsized US$220m late on
protections they would get in traditional IPOs, gone public through traditional US-listed IPOs. Wednesday from its Nasdaq IPO.
with respect to disclosure, marketing practices, SPACs are now a global phenomenon, as four Nomura was sole bookrunner on Genesis
and gatekeepers?” he said. of the 19 SPAC IPOs that listed on US exchanges Growth, which like all SPAC IPOs that priced last
“Currently, I believe the investing public last week were foreign. week over-funded the trust at US$10.15.
may not be getting like protections between APX ACQUISITION, a SPAC sponsored by Mexico Genesis Growth closed its Nasdaq debut at
traditional IPOs and SPACs.” City-based alternative asset manager APx US$10.05.
A key difference between traditional IPOs Capital, on Monday raised US$150m from its FORBION EUROPEAN ACQUISITION, a life sciences
and SPACs is underwriting, specifically Nasdaq IPO, becoming only the fifth Mexican SPAC sponsored by Dutch VC Forbion, on
that the liability investment banks, lawyers SPAC to list in the US. Thursday raised US$110m from its IPO with
and accountants assume in underwriting a Bank of America was sole bookrunner on the incentive of a trust funded at US$10.25 per
traditional IPO be extended to SPACs, from the APx, which closed its US debut on Tuesday at US$10.00 unit sold.
blank-check IPO stage through to merger. US$10.06, above the US$10.00 per unit paid Stephen Lacey

SPAC SUMMARY: WEEK ENDING 10/12/2021

Warrant
Name Target Size coverage Term, % in trust Bookrunners
APX Acquisition LatAm US$150.0m 1/2 15 months, 102% in trust Bank of America
Athena Technology Acquisition II Technology US$250.0m 1/2 18 months, 101% in trust Citigroup
Crypto 1 Acquisition Cryptocurrency US$200.0m 3/4 12 months, 100.5% in trust B Riley Securities
Emerging Markets Horizon Tech/Consumer, Russia US$250.0m 1/2 15 months, 102% in trust Citigroup, VTB Capital
Financial Strategies Acquisition Fintech US$87.0m 1 plus 1/10 12 months, 101% in trust I-Banker Securities
Forbion European Acquisition Life sciences, Europe US$110.0m 1/3 18 months, 102.5% in trust UBS, Kempen
Genesis Growth Tech Acquisition Consumer internet US$220.0m 1/2 12 months, 101.5% in trust Nomura
Growth for Good Acquisition ESG US$220.0m 1/2 18 months, 100% in trust Credit Suisse, Barclays
Healthcare AI Acquisition Healthcare/pharma US$200.0m 1/2 18 months, 102% in trust Citigroup, Jefferies
Inception Growth Acquisition TMT US$90.0m 1/2 plus 1/10 right 15 months, 101% in trust EF Hutton, Brookline CM
Integrated Wellness Acquisition Consumer US$100.0m 1/2 15 months, 102% in trust BTIG
Jackson Acquisition Company Healthcare US$200.0m 1/2 18 months, 101.5% in trust Bank of America
Jupiter Wellness Acquisition Healthcare US$120.0m 1/2 plus 1/8 right 12 months, 101% in trust I-Banker Securities
Motive Capital II Fintech US$300.0m 1/3 18 months, 102% in trust UBS, JP Morgan
Power & Digital Acquisition II Energy transition US$250.0m 1/2 18 months, 101% in trust Barclays, Bank of America
Southport Acquisition Fintech US$200.0m 1/2 18 months, 102% in trust Bank of America
Target Global Acquisition I Tech, Israel US$200.0m 1/3 18 months, 102% in trust UBS, Bank of America
Trajectory Alpha Acquisition Tech US$150.0m 1/2 18 months, 101% in trust Guggenheim Partners
Source: IFR, securities filings

74 International Financing Review December 11 2021

 EQUITIES AMERICAS

ECM DEALS: WEEK ENDING 10/12/2021

Stock Country Date Amount Price Deal type Bookrunner(s)
Ebos Group Australia 10/12/2021 NZ$674m NZ$34.50 Follow-on (Primary) Macquarie Capital
Nu Brazil 08/12/2021 US$2,602.8m US$9 IPO (Primary & Secondary) MS, GS, Citigroup, NU
Magnet Forensics Canada 07/12/2021 C$74.4m C$30.30 Accelerated bookbuild (Primary) Cannacord Genuity, BMO CM
Bavarian Nordic Denmark 06/12/2021 DKr1.7bn DKr268 Accelerated Bookbuild (Primary) Citigroup, Nordea
Frey France 08/12/2021 €102m US$30m Rights issue BNPP, CA, Natixis
Vonovia Germany 07/12/2021 €8bn €40 Rights issue BofA, MS, SG, BNPP, Citigroup, Commerz, DB, GS,
ING, Intesa Sanpaolo, JPM, LBBW, UBS, UniCredit
Hangzhou SF Intra-City Industrial Hong Kong 08/12/2021 HK$2.15bn HK$16.42 IPO (Primary) BofA, CICC, CS, Huatai International
Logan Group Hong Kong 07/12/2021 HK$1.17bn HK$6.80 Follow-on (Primary) BNPP, Citigroup, UBS
Tsingtao Brewery Company Hong Kong 10/12/2021 HK$2.5bn HK$66.10 Blocktrade BofA
Huabao International Hong Kong 09/12/2021 HK$2.18bn HK$17.88 Follow-on (Primary) Citigroup, CLSA, Nomura
Shimao Group Holdings Hong Kong 07/12/2021 HK$1.18bn HK$8.14 Follow-on (Primary) HSBC, JPM and MS
HFCL India 05/12/2021 Rs6bn Rs68.75 Follow-on (Primary) ICICI Securities, JM, Monarch
Bank Hapoalim Israel 07/12/2021 NIS1.4bn NIS30.90 Accelerated Bookbuild (Secondary) BofA
Perion Network Israel 08/12/2021 US$157m US$21.50 Accelerated bookbuild (Primary) Oppenheimer, Stifel, Raymond James
Link and Motivation Japan 07/12/2021 ¥6.3bn ¥633 Follow-on (Primary) Nomura
Recruit Holdings Japan 10/12/2021 ¥105.8bn ¥7,053 Blocktrade BofA, GS
Sun Japan 06/12/2021 ¥8.6bn ¥2,380 Follow-on (Primary) Daiwa
Pegasus Entrepreneurial Acq Europe Netherlands 09/12/2021 €210m €10.00 IPO (SPAC) BNPP, Citigroup, GS
Norva24 Norway 08/12/2021 SKr2.31bn SKr36 IPO (Primary & Secondary) Carnegie, Citigroup, Danske Bank, DNB, SEB
Saudi Telecom Company Saudi Arabia 09/12/2021 SR12bn SR100 Follow-on (Secondary) HSBC, GS, MS, SNB Capital
Capitaland Integrated Com Trust Singapore 06/12/2021 S$250m S$1.96 Follow-on (Primary) JPM, UOB
Kakao Bank South Korea 09/12/2021 W481.6bn W63,200 Blocktrade MS
Zur Rose Switzerland 08/12/2021 SFr188.5m SFr290 Accelerated Bookbuild (Primary) BofA, Jefferies
Hilton Food Group UK 10/12/2021 £75m £11.40 Accelerated Bookbuild (Primary) Numis
Ideagen UK 08/12/2021 £103.5m 270p Follow-on (Primary) Canaccord Genuity, finnCap, GS, Numis
ThomasLloyd Energy Impact Fund UK 09/12/2021 US$115.4m US$1 IPO (Primary) Shore Capital
Adicet Bio US 07/12/2021 US$91m US$14 Accelerated bookbuild (Primary) Jefferies, Guggenheim Securities
Agree Realty US 08/12/2021 US$340.8m US$68.15 Accelerated bookbuild (Primary) Wells Fargo, BofA, MS
Blue Owl Capital US 06/12/2021 US$387.4m US$14.50 Follow-on (Secondary) GS, BofA, JPM
Chicago Atlantic Real Estate US 07/12/2021 US$100m US$16 IPO (Primary) JMP Securities, Compass Point, Oppenheimer
Energy Transfer US 07/12/2021 US$665.2m US$7.65 Accelerated bookbuild (Secondary) Citigroup, JPM, MS
Gaming and Leisure Properties US 06/12/2021 US$344.6m US$44.75 Accelerated bookbuild (Primary) BofA, Wells Fargo, Citigroup, Mizuho Securities
HashiCorp US 08/12/2021 US$1,224m US$80 IPO (Primary) MS, GS, JPM, BofA, Citigroup
Relmada Therapeutics US 08/12/2021 US$150m US$17 Accelerated bookbuild (Primary) GS, Jefferies, Guggenheim
Silvergate Capital US 06/12/2021 US$480m US$145 Accelerated bookbuild (Primary) GS, JPM, Keefe Bruyette & Woods
Verra Mobility US 07/12/2021 US$121.9m US$14.85 Accelerated bookbuild (Secondary) BofA
Starwood Property Trust US 07/12/2021 US$397.1m US$24.82 Accelerated bookbuild (Primary) Citigroup, BofA, MS, Wells Fargo

It has instead focused on debt funding pipeline owner at US$7.65, within the CenterPoint’s eagerness to quickly sell
that included a US$400m HY sustainable US$7.50–$7.80 range and an 8.5% discount about half of its ET holding is not
bond offering issued earlier this month. to last sale. surprising since it has been trying to shed
3TARWOODûAûDIVERSIlEDûMORTGAGEû2%)4û The block raised US$665.2m of gross THEû%NABLEûSTAKEûFORûMOREûTHANûlVEûYEARSû
that owns commercial as well as proceeds and proved a bargain for in a mostly moribund market for MLP
residential real estate loans, has invested investors, the shares changing hands at assets. Yet with the stronger energy
US$3.2bn across its investment strategies U$8.57 by Thursday’s close or well above COMPLEXûTHISûYEARû%4ûUNITSûAREûUPûBYûMOREû
so far in Q4, putting it on track for a record the reoffer price. than a third this year through Tuesday’s
quarter. The banks hold a 15% greenshoe option, close. Early in Wednesday’s session, ET
WHICHûIFûEXERCISEDûWOULDûINCREASEûTHEû units rose 2.9% to US$8.60, while
CENTERPOINT SELLS US$665.2m selldown to 100m units. #ENTER0OINTûSHARESûWEREûBROADLYûmATûATû
OF ENERGY TRANSFER UNITS %4ûANDûhCERTAINûAFlLIATESvûINCLUDINGû US$27.86.
management) agreed to buy 20.6m units in Still, CenterPoint’s remaining stake
Houston-based utility CenterPoint Energy the offering or nearly 24% of the deal at the remains an overhang on ET’s unit price, as
TOOKûAûBIGûSTEPûINûlNALLYûSHEDDINGûITSû banks’ block purchase price of US$7.45 are the 95.4m ET units received by
MIDSTREAMûEXPOSUREûBYûSELLINGûNEARLYûHALFû (the price less the underwriting spread), Oklahoma’s OGE Energy (the parent of
of the ENERGY TRANSFER units it inherited the company revealed in its later SEC Oklahoma Gas and Electric Company) for
from ET’s just-completed US$7.2bn lLING its minority holding in Enable.
acquisition of Enable Midstream Partners. The previous week’s formal completion OGE has said it wants to become a pure-
7ITHûTHEûINKûBARELYûDRYûONûTHEû-!û of the ET/Enable transaction saw play power company and will look to sell
Citigroup, JP Morgan and Morgan Stanley late CenterPoint collect 201m ET units (6.5% of ITSû%4ûUNITSûBYûTHEûENDûOFûNEXTûYEAR
on Tuesday priced the all-secondary block %4 ûINûEXCHANGEûFORûITSûMAJORITYûSTAKEûINû CenterPoint and OGE are subject to a
sale of 86.96m ET units or 2.8% of the Enable. new 60-day lockup on further selling.

International Financing Review December 11 2021 75

 PLATINUM COMPLETES FULL EXIT !CCORDINGûTOûAûlLINGûONû4UESDAYûTHEû US$1.3bn and US$1.4bn on acquisitions
FROM VERRA banks collected a US$13.4m spread from THISûYEARûTHOUGHûTHEûlNALûNUMBERûMAYûBEû
the base offering. even higher.
4OMû'ORESû0LATINUMû%QUITYûOFmOADEDûITSû Agree has already spent US$162m in Q4
remaining 5.3% stake in tolling and ADICET RAISES ASH CASH on 33 new properties and has letters of
VIOLATIONSûMANAGEMENTûSOFTWAREûlRMûANDû intent to buy another 100 properties for a
EX 30!#ûVERRA MOBILITY via a US$121.8m Cancer drug developer ADICET BIO raised an combined US$445m. Though some deals
block sale last week. upsized US$88m overnight on Tuesday in may be pushed into 2022, the pipeline is
Sole bookrunner Bank of America priced anticipation of its presentation at the 63rd fully funded with the offering proceeds
the sale of 8.21m Verra shares, or all of the ANNUALû!3(û-EETINGûANDû%XPOSITIONûOFûTHEû ANDûEXISTINGûSOURCESûOFûCAPITAL
PRIVATEûEQUITYûlRMSûREMAININGûSHARESûATû American Society of Hematologists.
US$14.85, the bottom of the US$14.85– Joint bookrunners Jefferies and RELMADA RAISES US$150m OVERNIGHT
$15.15 range and a 3.9% discount to Guggenheim SecuritiesûlRMEDûUPûSUPPORTû
Tuesday’s closing price. The stock closed at THROUGHûCONlDENTIALûMARKETINGûBEFOREû RELMADA THERAPEUTICS, a Phase III
US$14.83 or slightly below the reoffer pricing 6.25m shares at US$14.00, a 3.4% developer of a fast-acting
price in Wednesday’s aftermarket. discount to the last sale. antidepressant, raised an upsized
The deal marks Platinum’s fourth sell- Adicet shares closed above issue on US$150m overnight on Wednesday
down since Verra, previously known as Wednesday at US$15.29. ahead of a pivotal 2022.
!MERICANû4RAFlCû3OLUTIONSûWENTûPUBLICûINû The shares soared after it gave a preview Joint bookrunners Goldman Sachs, Jefferies
October 2018 following its US$2.4bn Monday morning of what investors can and Guggenheim Securities priced 8.8m
merger with SPAC Gores II, sponsored by EXPECTûFROMûITSû!3(ûPRESENTATIONû shares at US$17.00, a 7.8% discount to the
'ORESûTHEûPRIVATEûEQUITYûlRMûFOUNDEDûBYû A Phase I trial of its off-the-shelf CAR-T US$18.45 closing price.
Tom Gores’ older brother Alec. treatment for lymphoma is off to a fast Relmada shares rose 6.3% on Thursday
The merger left Platinum and other STARTû!FTERûTREATINGûSIXûPATIENTSûSOûFARûTWOû to US$19.70.
EXISTINGûOWNERSûOFû6ERRAûWITHûûOFûTHEû of them are cancer-free after a single Relmada, whose stock price is down
combined company. infusion of Adicet’s CAR-T treatment at the 38.5% this year, is using the proceeds to
The reoffer price on the latest sell-down lowest dose. complete two Phase III trials for its lead
was slightly better than the US$14.75 mark The drug has been well-tolerated, with product candidate, REL-1017
at which Platinum sold 8m shares in no cases so far of cytokine release (esmethadone).
August in a Goldman Sachs-led offering. It syndrome (a potentially deadly side effect The drug is a rapidly acting oral agent to
was also above the US$14.25 level at which of CAR-T therapy). treat major depression. Clinical trials have
it sold 15m shares via Morgan Stanley in The ASH Meeting is being held at the been a bit slower to develop.
late 2019, and the US$12.50 at which it Georgia World Congress Center in Atlanta. Relmada hoped to have top-line results
OFmOADEDûMûSHARESûINû*UNEû The event opened on Saturday and is and FROMûBOTHûSTUDIESûBYûEARLYûNEXTûYEARû!FTERû
Ahead of the offering, Verra shares had running until Tuesday, December 14. a careful patient selection process, the data
risen 15.1% this year. Visitors can attend in person or virtually. reads were pushed into H2 2022.
Adicet presented its Phase I results at Relmada has a good reason to be careful.
NEUBERGER CUTS BLUE OWL STAKE ASH on Sunday. Its drug works by activating receptors in
the brain that are also targets for
)NVESTMENTûMANAGEMENTûlRMû.EUBERGERû AGREE REALTY DIPS ON STOCK SALE psychedelic drugs.
Berman cut its stake in private capital asset
manager and former SPAC BLUE OWL CAPITAL Triple net lease REIT AGREE REALTY raised
via an accelerated US$387.4m stock sale. US$340m from an overnight stock sale CANADA
Though initially planning to market the structured as a forward sale.
offering for one day, a syndicate led by Wells Fargo, Bank of America and Morgan MAGNET FORENSICS OPENS EXIT
Goldman Sachs, Bank of America and JP Morgan Stanley led the offering of 5m borrowed FOR US PARTNER
early on Tuesday priced the overnight sale Agree shares at US$68.15, a 4.4% discount
of 26.72m Class A shares in Blue Owl at to Wednesday’s closing price of US$71.34. Cybercrime software provider MAGNET
US$14.50, a 6% discount to Monday’s Agree shares dipped below the offering FORENSICS raised C$74.4m (US$58.5m) from
US$15.42 close. The shares closed price in Thursday’s aftermarket, closing at a bought deal offering that provided an
Tuesday’s session at US$15.91, comfortably US$68.05. EXITûFORû)N 1 4ELû)14 ûITSûLONGTIMEû53û
above the offering price. The forward sale structure has become strategic partner.
!SSUMINGûEXERCISEûOFûTHEûGREENSHOEû standard for acquisitive REITs looking to A syndicate led by Canaccord Genuity and
NBSH Acquisition, an entity associated raise contingent capital but defer stock BMO Capital Markets priced an all-secondary
with Neuberger, will sell a 2.2% stake via dilution until they need the money. offering of 2.46m shares late on Tuesday at
the offering (or 30.7m shares in total). It Agree can physically settle arrangement C$30.30, a 6.5% discount to the C$32.40
will remain the largest Blue Owl for cash or net-share settle at any time over closing price on the Toronto Stock
shareholder via its separate ownership of THEûNEXTûûMONTHSû!SûCOUNTERPARTIESûTOû %XCHANGEû438 
Class C shares (Blue Owl has four share the forward sale, the underwriting banks Magnet shares closed above issue on
classes). are responsible for paying Agree’s monthly Wednesday at C$30.38 a share.
There is a 90-day lock-up on further dividend (currently 22 cents a share) until 4HEûOFFERINGûWASû-AGNETSûlRSTûSTOCKû
sales. the forward is settled. sale since raising C$115m from its TSX IPO
4HEûSALEûCAMEûAûLITTLEûMOREûTHANûSIXû The REIT bought 226 retail properties in late April. The same banks, though in
months after May’s NYSE debut of Blue WORTHû53BNûINûTHEûlRSTûNINEûMONTHSûOFû reverse order, sold 6.8m shares at C$17.00
Owl. û)TûEXPECTSûTOûSPENDûBETWEENû apiece.

76 International Financing Review December 11 2021

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EQUITY-LINKED DEALS WEEK ENDING: 10/12/2021

Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s)
Chemtrade Logistics Fund Canada 06/12/2021 C$120.0m C$18.0m 5.75y 6.25 35.0 RBC CM, National Bank, BMO CM,
CIBC CM, Scotia CM, TD Securities
Hopson Hong Kong 09/12/2021 US$250m — 363 days 8.00 17.5 HSBC
Confluent US 08/12/2021 US$1,000m US$100m 5y 0.00 45.0 MS, JPM, GS, BofA, Citigroup, Wells Fargo,
Barclays, CS, UBS, DB
Lucid Group US 09/12/2021 US$1,750m US$262.5m 5y 6.25 35.0 Citigroup, BofA
Patrick Industries US 07/12/2021 US$225m US$33.75m 7y 1.75 30.0 BofA, Truist, Wells Fargo
TechTarget US 08/12/2021 US$360m US$54m 5y 6.25 35.0 JPM, GS, DB

Magnet founder Jad Sabila and its CEO Adding to those funding costs, Lucid ABOUTûPROlTABILITYûITSûABOUTûTHEûEQUITYû
Adam Belsher led last week’s stock sale, shares fell 18.3% to US$36.52 over the cushion. The model tells you the CB is
each providing 900,000 subordinate voting Thursday marketing, suggesting a more cheap enough and you hope to attract
shares sold in the offering. IQT, a US-based hedge-fund oriented placement than had fundamental investors that are willing to
NON PROlTûENTITYûTHATûINVESTSûINû been hoped. take a long-term view.”
technologies for protecting US national ,UCIDûWHICHûONLYûDELIVEREDûITSûlRSTû%6û Citigroup was sole adviser to Lucid on
security interests, sold all of its 431,814 auto in October, sports a market cap of the SPAC merger, while Bank of America
Magnet shares in the offering. 53BNûVALUINGûITûINûCLOSEûPROXIMITYûTOû and Guggenheim Securities advised
IQT’s stake dates back to 2015 when it the roughly US$80bn market cap of Churchill. Citigroup and Bank of America
made a strategic investment in Magnet. General Motors and Ford Motor. The lack were co-placements agents on the
OFûAûDElNABLEûCREDITûSPREADûMADEûTHATû US$2.5bn PIPE priced at US$15.00.
heavy equity underpinning a key selling
point of the CBs. CONFLUENT PIVOTS FROM IPO TO
4HISûWASû,UCIDSûlRSTûCAPITALûRAISINGû US$1bn CB
STRUCTURED EQUITY since it went public in July by merging
with former Citigroup rainmaker Michael $ATAûINFRASTRUCTUREûSOFTWAREûlRMû
Klein’s Churchill Capital IV, a deal that CONFLUENT LAUNCHEDûAû53BNûlVE YEARû#"û
UNITED STATES netted it US$4.4bn of funding from the ahead of the US market open Wednesday
30!#ûANDûAûRELATEDû0)0%ûlNANCING at price talk of a 0%–0.5% coupon and
LUCID EQUITY AIRBAG CUSHIONS (AVINGûDELIVEREDûITSûlRSTû,UCIDû!IRû 37.5%–42.5% conversion premium.
US$1.75bn CB LUXURYû%6ûTOûCUSTOMERSûINû/CTOBERûTHEû By mid-afternoon, that talk was revised
company lost US$303m in the third TOûûlXEDûUPûnûANDûPRICINGû
With a market cap now rivalling legacy quarter on a non-GAAP Ebitda basis, lNALISEDûATûTHEûûCOUPONûUPûûTHEû
automakers, EV start-up LUCID took though it has 17,000 reservations and is aggressive end of already tightened talk.
advantage of its recent stock rally driven targeting production of 20,000 units in “There are a lot of long-only investors
by EV mania to raise US$1.75bn from the 2022 and 90,000 in 2023. that are seizing upon the opportunity to
SALEûOFûlVE YEARûCONVERTIBLEûBONDS The money-losing/high-growth buy in at lower stock prices,” said one
Citigroup and Bank of America launched the CB PROlLEûSAWûTHEûBANKSûMARKETûTHEû#"Sû banker. “The opportunity created by the
issue late on Wednesday at a 0.75%–1.25% at a credit spread and implied vol of sell-off in tech stocks is offset by losses
coupon and 50%–55% conversion premium, L+350bp and 48. THEYûHAVEûEXPERIENCEDûONûEXISTINGû
and marketed the deal for one day on “This security is not dissimilar to high- positions.”
Thursday. They priced the CBs late that growth tech issuance we have seen Morgan Stanley, Goldman Sachs, Bank of
evening at a 1.25% coupon and 50% conversion recently,” said one banker working on the America and Citigroup led a syndicate of 10
premium, the investor-friendly ends of talk. Lucid CB. “Theoretical valuation is not banks.

GLOBAL CONVERTIBLE OFFERINGS GLOBAL CONVERTIBLE OFFERINGS – EMEA GLOBAL CONVERTIBLE OFFERINGS – US
BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE BOOKRUNNERS: 1/1/2021 TO DATE

Managing No of Total Share Managing No of Total Share Managing No of Total Share

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

1 Goldman Sachs 11 2,392.25 11.5 1 Goldman Sachs 61 12,737.62 17.2

1 Goldman Sachs 88 21,802.52 12.9
2 Citigroup 11 2,233.39 10.8 2 JP Morgan 56 10,713.04 14.5
2 JP Morgan 78 15,872.40 9.4
3 HSBC 12 2,186.06 10.5 3 Morgan Stanley 42 9,110.19 12.3
3 Bank of America 78 15,290.07 9.1
4 Morgan Stanley 6 1,760.96 8.5 4 Bank of America 59 9,047.68 12.2
4 Morgan Stanley 63 13,780.33 8.2
5 BNP Paribas 14 1,596.50 7.7 5 Citigroup 29 6,618.10 8.9
5 Citigroup 47 11,662.23 6.9
6 Bank of America 11 1,518.73 7.3 6 Barclays 22 3,566.35 4.8
6 CICC 17 7,458.05 4.4
7 JP Morgan 11 1,402.93 6.8 7 Jefferies 14 3,152.43 4.3
7 Barclays 32 5,543.61 3.3
8 UniCredit 6 936.13 4.5 8 Wells Fargo 21 2,376.88 3.2
8 Huatai Securities 14 5,488.50 3.3
9 Barclays 8 915.21 4.4 9 Credit Suisse 16 2,116.63 2.9
9 Guotai Junan Secs 10 4,891.65 2.9
10 Deutsche Bank 4 727.53 3.5 10 RBC 12 1,758.53 2.4
10 Credit Suisse 28 4,434.24 2.6
Total 48 20,726.36 Total 137 74,023.06
Total 393 168,391.56
Including exchangeables and domestic offerings. Including exchangeables.
Source: Refinitiv SDC code: C9 Source: Refinitiv SDC code: C09d Source: Refinitiv SDC code: C9a

78 International Financing Review December 11 2021

 STRUCTURED EQUITY

“We have had a lot of go, no-go calls and 42, the former a bit wider than on The current window is not as
with companies in recent weeks,” said the recent CBs and the latter a bit higher. euphoric as the February-March
banker. “Issuers have been waiting for the #ONmUENTûISûTHEûLATESTûBENElCIARYûOFûAû period, when Peloton Interactive
green light.” reopening CB market. 3D animation achieved a 65% conversion premium
After rallying 6.3% to US$73.09 Tuesday software provider Unity Software, a late on its 0%, only to be outdone by
AHEADûOFûTHEû#"SûLAUNCHû#ONmUENTûSHARESû 2020 IPO, last month raised US$1.5bn at a %XPEDIAûû û%NPHASEû%NERGYû
fell 5.6% to US$69.01 on Wednesday while 0% coupon and 57.5% premium to its share (0%, 70%), Spotify Technology (0%, 70%)
the CB was marketed. That compares to price at the time, and buy-now-pay-later and Twitter (0%, 67.5%), but not too far
the above range US$36.00 price on PROVIDERû!FlRMû53BNûATûTHEûSAMEûû away.
#ONmUENTSû53Mû*UNEû)0/û4HEû)0/û coupon and an equally punchy 55% The CB market, it would seem, is ending
was structured with staggered insider lock- premium. the year where it had begun.
UPSûTWOûOFûTHREEûSINCEûHAVINGûEXPIREDû
WITHûTHEûTHIRDû DAYûEXPIRINGûLATERûTHISû ALL INTERNATIONAL ASIAN CONVERTIBLES ALL INTERNATIONAL ASIAN CONVERTIBLES
month. BOOKRUNNERS: 1/1/2021 TO DATE (EXCLUDING JAPAN)
#ONmUENTûHADûTRADEDûASûHIGHûASû53û Managing No of Total Share BOOKRUNNERS: 1/1/2021 TO DATE
in early November before a 12%-plus sell-off bank or group issues US$(m) (%)
Managing No of Total Share
in software stocks and roughly 6% decline in 1 Goldman Sachs 16 6,672.65 21.3 bank or group issues US$(m) (%)
US CBs, as measured by the Global X Cloud 2 Bank of America 7 3,834.10 12.2 1 Goldman Sachs 11 4,981.73 21.0
#OMPUTINGû%4&ûANDûTHEû2ElNITIVûUNHEDGEDû 3 JP Morgan 7 2,782.22 8.9 2 Bank of America 4 2,762.99 11.6
53û#"û)NDEXû4HEûFORMERûISûSTILLûDOWNûNEARLYû 4 Morgan Stanley 14 2,621.68 8.4 3 JP Morgan 6 2,643.26 11.1
8% on a one-month basis. 5 UBS 12 2,181.38 7.0 4 Morgan Stanley 10 2,216.80 9.3
#ONmUENTûSPENTûAûPORTIONûOFûTHEû 6 Daiwa Securities 8 1,908.42 6.1 5 UBS 11 1,996.86 8.4
proceeds on a capped call, off-putting 7 Credit Suisse 9 1,774.32 5.7 6 Credit Suisse 8 1,710.74 7.2
earnings dilution up to US$100.06 share 8 Nomura 5 1,515.65 4.8 7 HSBC 7 1,469.32 6.2
price though investors will be eligible to 9 HSBC 7 1,469.32 4.7 8 Citigroup 4 1,071.19 4.5
convert at prices above, as warrants sold 10 Citigroup 4 1,071.19 3.4 9 CICC 6 1,020.53 4.3
on the capped call were struck at a 100% Total 62 31,318.03 10 Bank of China 2 844.70 3.6
premium to reference. Including exchangeables. Total 44 23,719.78
High top-line growth and growing losses Including exchangeables.
led to a credit and vol pairing of L+300bp Source: Refinitiv SDC code: M10 Source: Refinitiv SDC code: M11

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International Financing Review December 11 2021 79

 INTERNATIONAL FINANCING REVIEW INDEX

ABN AMRO 27 ENN Group 17 Pegasus Entrepreneurial Acquisition Company Europe 8

abrdn 4 euNetworks 57 Pemex 50
Adicet Bio 73 European Financial Stability Facility 21 Pepper Money 36
Agree Realty 73 European Stability Mechanism 21 Pepper Sparkz 4 36
AIT Worldwide 60 Evolution Healthcare 53 Perion Network 69
Alsea 50 FabIndia 65 Petro
Rabigh, 70
Altarea 68 Fairbanks Morse Defense 59 PGIM Loan Originator Manager 33
American Express Global Business Travel 59 FIL Investments International 33 Ping An International Financial Leasing 52
AMP Bank 29 Finatext Holdings 65 Plaskolite 61
Anticimex 60 FleetCor Technologies 58 Pod Point 70
APx Acquisition 76 Focus Media Information Technology 64 PPL 58
Aroundtown 27 Forbion European Acquisition 76 QIC 53
Asymchem Laboratories (Tianjin) 65 France 23 Qingci Games 64
Aveanna Healthcare 59 Gaming and Leisure Properties 71 RateGain Travel Technologies 65
Bakkafrost 55 Genesis Growth Tech Acquisition 76 RealPage 58
Banco de Chile 50 GoTo 17 REC 53
Bank for International Settlements 12 Greece 21 Recruit Holdings 66
Bank Hapoalim 68 Greenland Holding Group 46 REC Solar 53
Bank of America 15 Grupa Pracuj 69 Recycling Technologies Group 71
Bank of Commerce 67 Gushengtang (Cayman) 64 Reliance Industries 53
Bank of France 12 Hangzhou SF Intra-City Industrial 64 Relmada Therapeutics 74
Bank of Nova Scotia 30 Harvey Norman 52 Renewable Japan 66
Bank of Queensland 30 HashiCorp 74 Resimac 35
Bapcor 52 Hengda Real Estate Group 6 Royal Dutch Shell 13
Basecorp 37 Hexagon Composites 56 Samsara 77
Bavarian Nordic 68 Hilton Food 57 Sanofi 27
Bayerische Landesbank 30 Hopson Development 63 Santander 15
Belgium 23 Hozon Auto 7 Santos 17
BenevolentAI 69 Huabao International 64 Saudi Tadawul Group 70
BentallGreenOak 53 Hungary 47 Saudi Telecom Company 69
Berlin Packaging 59 Hyundai Engineering 67 Schroder Pamfleet 53
Blue Owl Capital 73 Ideagen 70 Securitas 56
Bluestone 36, 37 Inmarsat 61 SenseTime Group 2
BPCE 29 Inovie 62 Sevita 58
Brook + Whittle 60 Ireland 23 Shimao Group Holdings 63
Brookfield 25 Istanbul 47 Silvergate Capital 72
Cades 23 Jahez 70 Sirnaomics 65
Camping World 59 Jefferies Financial Group 18 Skillz 31
Canada Pension Plan Investment Board 54 Jiangsu Recbio Technology 64 Smart Start 60
Canadian Imperial Bank of Commerce 30 JL Mag Rare-Earth 7 Societe Generale 12
Canbridge Pharmaceuticals 64 JP Morgan 15 Southern Cross Austereo 52
CapitaLand Integrated Commercial Trust 67 Kaisa Group Holdings 7, 46 Southwestern Energy Company 32
Cast & Crew 60 Kakao Bank 67 SS&C Technologies 58
Centuria Industrial REIT 27 Karnov 56 SSE 13
Chainwin Biotech & Agrotech (Cayman Islands) 54 Kohoku Kogyo 66 Starwood Property Trust 72
Chervon Holdings 65 Latvia 45 Sunshine 100 China Holdings 46
Chicago Atlantic Real Estate Finance 71 Leapmotor 7 Sunsuper 53
China Aoyuan Group 47 LG Energy Solution 7, 67 Swiss National Bank 12
China Evergrande Group 6, 46 LifeHealthcare 52 Telecom Italia 20
China Merchants Financial Leasing (Hong Kong) Holding 52 Link and Motivation 66 ThomasLloyd Energy Impact Fund 70
Circet 62 Logan Group 63 Tianji Holding 6
Citigroup 15 LSF11 Boson Investments S.a r.l. 33 Tiki 3
Clinigen 61 Lucid 75 T-Mobile Netherlands 32
Cloudmed 59 Magnet Forensics 74 Top Glove 67
CMB International Leasing Management 52 MeDirect Bank (Malta) 33 Traveloka 17
Cologix 34 Medline Industries 51 UBS 12
Contemporary Amperex Technology 7 Merck 23 UniCredit 11
Co-operative Bank 29 Mercuria 57 US Radiology Specialists 60
Corporate Services Company 58 MetroNet 60 Verra Mobility 72
Covanta 51 Mirae Asset Finance (Vietnam) 55 VinFast 2, 7
Cowen 59 Mister Car Wash 59 Vinfast Trading and Production 54
CPI Property Group 55 Mobileye 75 Vingroup 54
Credit Suisse 12 Natixis 12 VNG 3
Data Patterns 65 Navi Technologies 65 Volkswagen 56
Davis-Standard 60 Net Protections Holdings 65 Vonovia 68
Delegat Group 54 Newmont 24 VT5 Acquisition Company 8
Denmark 8 NextEra Energy 25 WCG Purchaser 59
Diversified Energy 57 Norva24 69 Western Digital 24
Dollar General 58 NSI 56 WeWork 32
Dunelm 57 NTT Finance 25 WideOpenWest 51
Ebos Group 52, 67 Nu 9, 71 WM Motor 7
Ecolab 23 Odyssey Acquisition 69 Wuxi Construction and Development Investment 46
Electrolux 56 Olam International 54 Yonghe Medical 64
Emerging Markets Horizon 76 Olam Treasury 54 Zambia 47
Enechange 66 Orange 26 Zeal Co 66
Energy Transfer 72 Parkson Retail Group 52 Zur Rose 70

80 International Financing Review December 11 2021

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