IFR - Asia 19.march.2022

IFRASIA
INTERNATIONAL FINANCING REVIEW ASIA
March 19 2022 ISSUE 1228 www.ifre.com
Chinese trio lines up Swiss IPOs

as Beijing backs overseas listings
Mainland and HK stocks crash,

then surge amid delisting saga
Indonesia’s GoTo braves market

with expensive domestic IPO
INSIDE: Outlook for Asian Credit roundtable
LOANS BONDS BONDS PEOPLE & MARKETS

Taiwanese lenders While others take Macquarie prints Seen this movie
shift focus from fright, LGFVs US dollar deal at before? Banks pile
China to other keep G3 primary a premium before on in crowded
Asian markets issuance open FOMC decision Australian market
07 08 08 12
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Upfront
OPINION INTERNATIONAL FINANCING REVIEW ASIA
Neutral haven weak until it becomes clear whether China has finished
its regulatory overhaul of sectors like technology, and
C
hinese companies looking for an offshore listing whether the variable interest entity structure that Chinese
venue as US authorities close off opportunities there companies use to list offshore is officially encouraged.
have found an unlikely haven: Switzerland. A bigger step towards opening Chinese companies up to
Sany Heavy Industry on Tuesday said it planned to offer foreign capital would be to clear up the uncertainty that has
global depository receipts on the SIX Swiss Exchange, in made them uninvestable in the eyes of some institutions.
an offering that could raise US$1bn. The heavy equipment
manufacturer was swiftly followed by lithium-ion battery
maker Gotion High Tech and medical equipment company Far fetched
Lepu Medical Technology (Beijing), which made similar
G
announcements. oTo, the Indonesian ride-hailing and delivery app
In fact, they weren't just similar but identical in places. whose motto is “go far, go together”, might have
All three companies made the same references to deepening gone too far with the valuation of its domestic IPO.
capital market connections between China and Europe. It is aiming to raise up to Rp16.6trn (US$1.2bn) at a 2023
Announcements of this nature tend to be stage-managed, price-to-revenue multiple of 17–18, about four times the
and it is not hard to see the development as a message to valuation that other similar companies command after the
the US that there are alternative listing venues if it doesn't global sell-off in tech stocks.
want to cooperate with China. The Indonesian stock market is no stranger to rich
And yet the Americans won't be too worried. The London- valuations, and e-commerce company Bukalapak pushed
Shanghai Stock Connect mechanism has been a flop, with the limits in its IPO last year. After pricing at a hefty
excitement around the opening swiftly followed by a rapid valuation of 16 times EV/sales its shares defied gravity for a
few weeks and then crashed to earth. They now trade 68%
below the IPO price.
It's a similar story for GoTo's closest regional competitor,
As trading in the few Chinese Grab Holdings, which has seen its shares tumble 65%
GDRs listed in London has since listing on Nasdaq in December as it struggles to
demonstrate a path to profitability.
dried up why would Zurich be In India, the market regulator is proposing that
any more vibrant? companies planning to list should have their key
performance indicators audited and explain how they
arrived at their IPO valuation, following the high-profile
flop of payments company Paytm.
cooling in relations between the UK and China. As trading GoTo may argue that the market position of its business
in the few Chinese GDRs listed in London has dried up why and the opportunities for growth in a population of 270
would Zurich be any more vibrant? It is not a hot bed of million with a burgeoning middle class justify taking a long-
ECM – in fact it is nearly three years since a US$1bn IPO term view.
took place on SIX Swiss Exchange. Still, it looks unlikely that its IPO, comprising just over
And expectations have hardly been raised by the a 4% stake in a technical listing, is going to reflect market
appointment of mainly Chinese banks to lead these listings, realities. The trade is led by two Indonesian securities firms,
with UBS the only international bank employed by one of and suspicions are that it will be heavily supported by
the three. friends and family. That will give it a couple of years to sell
Certainly there is no way Switzerland will ever replace a further 3% stake to meet the exchange's minimum free
New York or London as a key listing destination for Chinese float.
companies, but Chinese companies are feeling cut off from GoTo has plans to list in the US later and that could be
international equity markets. the point at which foreign investors force it to accept a
China made it clear it wants Didi Global to delist from the more realistic valuation.
US, but its authorities have been slow to grant it approval It's hard to see how it will be able to justify a much
to list in Hong Kong. Even the introduction of new rules higher multiple than other US-listed tech stocks, especially
to encourage so-called “overseas listings” from Chinese when Grab offers such a clear reference point as well as a
companies in Hong Kong have not yet borne fruit. reminder of the big writedown at risk for investors.
In any case, enabling the supply of overseas-listed Chinese Indonesian investors may well know the company better
equities is only one part of the equation. than anyone else, but it's hard to argue that the tech
Investor demand for these companies is likely to be specialists in the US don't know the sector.
International Financing Review Asia March 19 2022 1

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2 International Financing Review Asia March 19 2022

Contents
INTERNATIONAL FINANCING REVIEW ASIA
March 19 2022 ISSUE 1228
TOP NEWS STORIES COUNTRY REPORT

EQUITIES
04 Chinese trio heads for the Alps 19 AUSTRALIA
Switzerland emerges as new destination as
Beijing pledges to support overseas listings
21 CHINA
EQUITIES 27 HONG KONG

05 Delisting risk rocks China stocks
Scramble to list in Hong Kong despite
soothing noises on US accounting issue 29 INDIA
31 INDONESIA
EQUITIES
06 GoTo IPO seeks peak valuation
Friends and family expected to be the main 33 JAPAN
buyers of Indonesian superapp’s US$1.2bn
domestic float
34 MALAYSIA
LOANS
07 Taiwan banks widen horizons
34 NEW ZEALAND
Island’s lenders look for opportunities in
South-East Asia while shying away from China
35 PHILIPPINES
08 BONDS LGFV supply endures unabated

08 BONDS Macquarie pays up for size 35 SINGAPORE
09 EQUITIES Two Singapore REITs delay IPOs
10 BONDS Indonesian miners face ESG test
36 SOUTH KOREA
10 EQUITIES Korean companies postpone IPOs
11 BONDS BOC sells first Tonar floater
36 TAIWAN
PEOPLE & MARKETS
INVESTMENT BANKING
38 THAILAND
12 Banks in Australia crowded out
New entrants leave some struggling
for market share 38 VIETNAM
13 REGULATION India tightens IPO valuation scrutiny 14 Reg S

14 IN BRIEF Japan’s financial regulator is set to delay the implementation of the final part of
the Basel III bank capital rules, following in the footsteps of the European Union.
14 WHO’S MOVING WHERE? Hannah Malter, head of equity capital markets Asia syndicate
at UBS, has resigned and is joining private equity firm KKR.

News GoTo braves market 08 Taiwanese lenders diversify 09 Steady LGFVs 08
Chinese trio heads for the Alps

Equities Switzerland emerges as new destination as Beijing pledges to support overseas listings

By KAREN TIAN, FIONA LAU as soon as possible”. European countries such as The SIX Swiss Exchange
The developments came Switzerland and Germany spokesman said there has been
Three Chinese companies are after massive sell-offs in US- into the Shanghai-London a lot of interest from both sides
preparing IPOs in Switzerland, listed Chinese shares in the Stock Connect trading link in the planned trading link, but
in a sign that the country’s past few days. The rout started last December by the CSRC. cautioned that the exchange
issuers are looking for after the US Securities and Eligibility criteria were also “will officially communicate
alternative offshore listing Exchange Commission last extended to some Shenzhen- together with the relevant
venues beyond the US and week identified the first batch listed companies. Chinese exchange once the
Hong Kong. of companies whose audits US A spokesman for SIX Swiss Stock Connect is ready”.
Heavy machinery regulators are unable to inspect Exchange told IFR that China Sany said in a statement on
manufacturer SANY HEAVY under the Holding Foreign and Switzerland kicked off Tuesday that the offering could
INDUSTRY, lithium-ion batteries Companies Accountable Act the cooperation three years help promote its international
producer GOTION HIGH TECH and and that may be forcibly ago. “SIX is working with strategy and brand, expand
medical equipment maker LEPU delisted as a result, causing US- the relevant authorities and fundraising channels, and
MEDICAL TECHNOLOGY (BEIJING) said listed Chinese stocks to plunge. partner exchanges to progress optimise the equity structure.
last week they are planning to Prior to Liu’s comments, on the journey started in 2019, The offering size and the use
offer global depository receipts Chinese stocks had slumped to after signing of the MoUs with of proceeds are still under
on Zurich’s SIX Swiss Exchange. 21-month lows and mainland Shanghai and Shenzhen, to be discussion, it said.
Sany is working with Citic firms listed in Hong Kong able to establish an attractive Europe is Sany’s second-
Securities and UBS on the plumbed 2008 lows. After Stock Connect framework biggest international market
planned GDR offer which he spoke, Hong Kong’s Hang with Chinese exchanges that behind Asia Pacific. Revenue
could raise about US$1bn in Seng Index surged 9.1% on will allow Chinese companies generated from Europe
the second quarter, said people Wednesday and China’s blue to tap into the Swiss capital amounted to Rmb3.75bn, up
with knowledge of the matter. chip index CSI300 jumped 4.3% market, while ensuring the 46.8% year on year. Asia Pacific
Meanwhile, CICC is leading the same day. highest standards of investor contributed Rmb5.67bn, the
the deals of Gotion and Lepu, protection,” he said. US Rmb1.96bn and Africa
according to people familiar THREE-YEAR JOURNEY The three companies Rmb1.07bn.
with the situation. The SIX Swiss Exchange planning GDR offerings would “In the past, South-East Asia
In their respective GDR listing plans follow become the first from China to was the main source of our
announcements, the three the inclusion of more be listed on the Swiss bourse. overseas income, and now the
companies all said their
planned listings are “to respond
to the call of China’s capital
market policies to deepen
the interconnection of capital
markets between China and
Europe, and the overseas
capital markets will help
promote the development of
the Chinese real economy”.
On Wednesday, Chinese
Vice Premier Liu He said at
a State Council conference
that China will continue to
support overseas listings
by its companies. The
China Securities Regulatory
Commission announced
afterwards that it will
“conscientiously implement
the arrangements by the State
Council conference, and will
promote the implementation
of the new regulations on the
overseas listing of enterprises

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Shy Singapore REITs 09 Indonesian issuers under green pressure 10 BOC’s Tonar coup 11
income from Europe is also

growing rapidly,” a spokesman
for Sany told IFR.
Delisting risk rocks China stocks
He said that choosing Equities Scramble to list in Hong Kong despite soothing noises on US accounting issue

Switzerland as the listing venue
is “a result of comprehensive By FIONA LAU and livestreaming platforms STRONG REBOUND
considerations”, such as local implement protection for Then, on Wednesday, the
policies and financial markets, Chinese stocks experienced a minors, while TENCENT HOLDINGS, tide turned after Chinese
as well as investors. roller-coaster ride last week as the largest of those platforms, Vice Premier Liu He made a
Sany acquired German investors woke up to the risk of is reportedly facing a potential series of pledges to soothe the
manufacturer of concrete major blue chips being delisted fine for violations of People’s markets. He said that China
pumps Putzmeister in January from the US, while China’s Bank of China regulations by its and US regulators are working
2011 and German truck mixer- top economic official vowed to WeChat Pay app. on specific cooperation plans
maker Intermix in July 2012. support foreign listings. Investors also had to worry on the accounting issue, that
The biggest shareholder in There were massive sell-offs about the economic effects of China will keep capital markets
Shenzhen-listed Gotion High on Monday and Tuesday, with a spike in Covid-19 cases in stable and continue to support
Tech is Volkswagen with a China’s blue-chip CSI300 Index China, coupled with the impact foreign listings, that it will
26.5% stake. Gotion said it slumping to a 21-month low and of Russia’s invasion of Ukraine step up coordination with
will build a new generation Hong Kong’s Hang Seng Index as some media reported regulators in Hong Kong and
of power battery production sinking to a 10-year low. Beijing had received a request that the “rectification” of big
lines in Europe, North America The rout started after the for military hardware from platform companies will be
and Asia, and the GDR offering US Securities and Exchange Moscow. completed as soon as possible.
will optimise its shareholding Commission on March 10 “We waited the whole He also promised to support
structure to bring in more identified the first batch of weekend for China to say the economy and struggling
international investors. companies whose audits US something positive other than property developers.
ChiNext-listed Lepu Medical regulators are unable to inspect the weak CSRC statement, but Hong Kong and Chinese
Tech said that it will build and that may be forcibly delisted there was nothing. So we just markets rebounded strongly on
production plants in overseas as a result under the Holding continued to sell,” said a Hong the news on Wednesday and
countries or regions to help Foreign Companies Accountable Kong-based fund manager. Thursday, clawing back all the
with production, sales, and Act, causing US-listed Chinese The Hang Seng Index fell lost ground.
marketing, and the GDR stocks to plunge. 5% on Monday and the Hang With no details revealed yet
offering will introduce more The China Securities Seng Tech index plunged on how the two superpowers
international institutional and Regulatory Commission issued 11%. Tech giants Tencent and are going to reach an
industry investors. a statement immediately, Alibaba Group Holding fell 9.8% agreement, Nasdaq-listed
In June 2019, Huatai repeating what it has been and 10.9% respectively, while BILIBILI opted to play safe by
Securities raised US$1.7bn from saying over the past year – that JD.com, Kuaishou and Meituan announcing on Wednesday it
a landmark sale of GDRs in it has been in touch with the slid 13%–17%. plans to shift from a secondary
London, marking the launch of SEC to solve the issue and has The market woes continued listing in Hong Kong to a dual
the long-awaited trading link made positive progress. on Tuesday with the HSI sliding primary listing.
between Shanghai and London A day later, shares in NYSE- another 5.72% and the Hang A dual primary listing will
that opened a new channel for listed DIDI GLOBAL crashed 44% on Seng Tech index sinking 8.1%. require the video-streaming
Chinese companies to raise a media report that the Chinese “The magnitude of sell-downs site to make more disclosures,
funds. Since then, three more ride-hailing giant has halted its will undoubtedly scare some but at the same time allow it
Chinese companies – China Hong Kong listing plan because US-listed Chinese companies, to be included in the Stock
Pacific Insurance Company, China’s cybersecurity watchdog who have thought they could Connect trading links between
China Yangtze Power and SDIC is dissatisfied with its proposed wait before seeking a listing on exchanges in the mainland and
Power – have also listed in overhaul of the way it handles another exchange,” said another Hong Kong.
London via this route. sensitive user data. ECM banker. “Hong Kong’s market liquidity
However, the trading of “Investors interpreted both Nasdaq-listed KINGSOFT CLOUD is much lower than that of the
the London-listed Chinese sets of news together. Their reacted quickly after its shares US. The liquidity in Hong Kong
companies is very thin understanding is the US is going plummeted 53% over two days. may not be able to support the
compared to the home market. to delist Chinese companies but The Chinese cloud services kind of valuations these Chinese
For instance, the 30-day average Chinese regulators won’t let provider said on Tuesday it is companies are currently trading
trading volume of SDIC Power’s them list at home. They then exploring a secondary listing at in the US. Domestic funds
A-shares is 16.7m shares while, rushed to dump their holdings in Hong Kong to provide channelled through the stock
in the past 30 days, there as quickly as possible,” said an shareholders with greater connects could help boost the
was only one day (March 2) ECM banker. liquidity and protection amid an city’s liquidity,” said an analyst.
when there was any trading Adding to the negativity, evolving market and regulatory Bilibili said it will remain as
in London with 790 shares, a China’s cyberspace regulator environment. a dual-listed company on the
volume of US$12,320, changing issued draft rules on Monday The CSI300 Index fell 3.1% on Stock Exchange of Hong Kong
hands.  demanding online gaming Monday and 4.6% on Tuesday. and Nasdaq. 

News
GoTo IPO seeks peak valuation
Equities Friends and family expected to be the main buyers of Indonesian superapp’s US$1.2bn domestic float

By S ANURADHA region’s largest flops.” company has identified local increase the free float to 7.5% in
GoTo is expected to make institutional investors who the local exchange.
Unfazed by the global operating profits only in 2024. are taking a long-term view of Data from the prospectus
technology stock meltdown, “The market is impatient the investment. The scarcity show shareholders with
Indonesia’s GOTO GROUP has with companies that have a of listed technology stocks in multiple voting rights (Series
launched an expensive long runway to profitability,” Indonesia will also prompt B) currently have 6.29% of
domestic IPO of Rp15.2trn– Tiruchelvam said. investors to buy a company the shares and 59.17% of the
Rp16.6trn (US$1.1bn–$1.2bn). which plays an important voting rights. After the IPO
The transaction is the first to TECHNICAL LISTING role in the country’s digital they will have 6.02% of the
be launched under the multiple A banker away from the economy. shares and 58.01% of the voting
voting rights scheme approved deal said it is unlikely that “At some point, GoTo will rights. Series B shares, owned
by the regulator last year. by co-founder and CEO Andre
The issuer, born from Soelistyo, co-founder and
the merger of ride-hailing “At some point, GoTo will get into the director Kevin Bryan Aluwi,
firm Gojek and e-commerce benchmark indices on account of the large co-founder and commissioner
company Tokopedia in May last William Tanuwijaya, director
year, is offering 48bn Series A
market capitalisation and investors cannot Melissa Siska Juminto and
shares, or 4.03% of the enlarged ignore the opportunity to buy the IPO.” corporate entity Saham Anak
capital, in a Rp316–Rp346 Bangsa, are subject to a two-
range, with an option to upsize year lock-up.
to 52bn shares. institutions or retail investors get into the benchmark indices The relative outperformance
At the base deal size the will subscribe to the issue given on account of the large market of the local stockmarket may
price range implies a market the high chance of a sharp fall capitalisation and investors have encouraged the company
capitalisation of US$27.2bn– upon listing. cannot ignore the opportunity at a time when most large
$29.7bn. In November, the “This is just a technical to buy the IPO,” said the banker. Asian IPOs are being shelved.
company raised equity at a listing and will be bought by As a locally incorporated State-owned Life Insurance
valuation of around US$28bn friends and family,” he said. company, GoTo needs to list Corporation of India has put
and was said to be targeting However, a banker with first in the domestic market on hold a local IPO of up
US$30bn–$40bn for the knowledge of the transaction before implementing a planned to US$8bn and Japan’s SBI
domestic IPO. said the issue will find listing of 10% of shares in the Sumishin Net Bank a US$1bn
The global technology sell- sufficient demand as the US. It has two more years to float. Listing in the US via
off has forced it to pare its
expectations – but its valuation
still looks rich compared to its
peers.
GoTo’s nearest rival in
South-East Asia, Nasdaq-listed
Grab Holdings, has a market
capitalisation of US$14.1bn.
GoTo’s price range represents
a price to revenue multiple of
17–18 for 2023 while regional
and global mobility and
e-commerce companies trade
in a 2.6x–4.4x range. Local
e-commerce player Bukalapak
trades at 9.6x.
Nirgunan Tiruchelvam, head
of consumer sector equity
research at research house
Tellimer, said GoTo’s valuation
seemed extravagant.
“The valuation has ignored
the paradigm shift in tech
in 2022 and we have grave
concerns about the IPO. This
could be one of the largest
Indonesian IPOs, but we fear its
pricing may make it one of the

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mergers with existing SPACs Exchange Composite Index shares once the GoTo shares Proceeds from the IPO will
is also getting affected by was up 0.7% month to date as start trading. be used for working capital
the current volatile market of Friday noon while the main Books will close on March 21. purposes.
conditions. Indonesia’s FinAccel stock indices in the Philippines, The retail offer will run from Indo Premier Sekuritas, Mandiri
and SPAC VPC IMPACT ACQUISITION Malaysia and Thailand have March 29–31. The shares start Sekuritas and Trimegah Sekuritas
HOLDINGS II have terminated a fallen 2.7%, 1.4% and 0.2% trading on April 4. are the bookrunners on the
US$2.5bn merger plan given during the same period. GoTo said its pro forma local IPO.
the adverse market conditions. In addition to GoTo’s upsize gross transaction value was Alibaba Group, SoftBank
FinAccel is the parent of buy option, which may be exercised Rp414.2trn and pro forma gross Vision Fund and Singapore’s
now, pay later platform KREDIVO. during bookbuilding, there is revenue was Rp15.1trn in the GIC are among the investors in
The benchmark Jakarta Stock a greenshoe option of 7.8bn 12-months to September. the company. 
Taiwan banks widen horizons some of their bigger regional

competitors, especially in
Vietnam.
Loans Island’s lenders look for opportunities in South-East Asia while shying away from China
They have also been raising
their game and taking a leading
By EVELYNN LIN slowdown on the mainland. second Taiwanese loan banker. role in loan syndications
So far this year, Taiwanese A further push into South- in the frontier markets of
Taiwanese banks are banks have not been involved East Asia is underlining the Cambodia and Laos, where
increasingly limiting their in the US$5.98bn in offshore determination of Taiwanese few international banks have
credit exposure to China and loans for Chinese borrowers. lenders to diversify beyond country limits.
shifting focus to other parts of Last year, Chinese borrowers Chinese risk. Taiwanese banks In February, Vietnamese
Asia, due to fears around rising raised US$96.60bn from have been actively expanding financial services firms SSI
defaults and the economic offshore loans, of which their footprint and stepping Securities and Techcom
fallout of the pandemic. allocations were available for up lending in the region, Securities, a subsidiary of
Overall exposure of US$59.66bn of transactions. in line with Taiwan’s “New Vietnam Technological &
Taiwanese banks to China Commercial Joint Stock Bank,
dropped to NT$1.34trn launched 364-day loans for up
(US$46bn), a historic low ratio to US$200m each that were
of 33.6% of their combined net
“Competition is fierce among lenders in the mandated to Taiwanese banks.
worth in the fourth quarter of region as we remain hungry for assets. We Taishin International Bank and
2021, according to data from are eager to play for the bookrunning and Union Bank of Taiwan are the
Taiwan’s Financial Supervisory syndication of deals in South-East Asia on the mandated lead arrangers and
Commission. back of our sizeable balance sheets.” bookrunners of SSI Securities’
“The scrutiny of the risks borrowing, while Cathay
of exposure to China has United Bank, CTBC Bank,
increased and we can’t lend to Taipei Fubon Commercial Bank
any Chinese names for now,” The share of Taiwanese banks Southbound Policy” announced and Taishin are the MLABs
said a senior Hong Kong-based in those loans was US$1.84bn, in December 2016. for the loan for Techcom
loan banker from a Taiwanese or 3.08%, compared with 3.42% Since last year, the FSC Securities.
bank. “We are concerned about in 2020, according to Refinitiv has approved seven overseas The same month Bank of the
the growing credit defaults, LPC data. expansion plans of Taiwanese Lao PDR raised a US$50m four-
especially among cash-starved banks, four of which are for year term loan. Cathay United
developers such as Chinese DRIFTING SOUTH South-East Asia. was the MLAB of the borrower,
real estate giant Evergrande The shift has caused a free-for- State-owned Mega which pulled in five other
Group, and we are concerned all within Taiwanese banks. International Commercial Bank Taiwanese banks.
that more defaults outside the The Hong Kong-based branches has been cleared to open one Last November, Acleda Bank,
property sector in China could that normally handle Chinese sub-branch in Phnom Penh, Cambodia’s biggest lender,
be on the way due to ongoing offshore loans, the overseas the capital of Cambodia. Hua raised a US$79m three-year
liquidity constraints.” branches located in other Nan Commercial Bank has loan with Cathay and Taishin as
Appetite among Taiwanese countries and the parents’ received approval to set up a the MLABs. All six banks joining
banks for lending to China has offshore banking units back in representative office in Jakarta. in syndication were Taiwanese
soured due to the struggles Taiwan are now tussling with E. Sun Commercial Bank is banks.
of Chinese developers in each other for rare mandates. opening representative offices “Competition is fierce among
servicing their debts and the “We face fierce internal in Bangkok and Ho Chi Minh lenders in the region as we
recent lockdowns in Shanghai competition among different City. remain hungry for assets,” said
and Shenzhen due to rising branches as we all need to meet The moves are benefiting a third Taiwanese loan banker.
Covid cases. This adds to the our return targets. The existing small and mid-sized borrowers “We are eager to play for the
cutback in lending to Chinese clients usually go to existing in South-East Asia. Taiwanese bookrunning and syndication
companies since 2019 due to branches, and we are eager to banks are shaking up the of deals in South-East Asia on
the trade war between the US win deals for new names to market with competitive the back of our sizeable balance
and China and the economic put our money into use,” said a terms that have squeezed out sheets.” 

News
LGFV supply endures unabated
Bonds Family and friend orders, plus indirect government support, keep borrowers active in offshore market

By MORGAN DAVIS bank-heavy syndicate teams Zeng, senior research analyst at was cheap and they could swap
and anchor orders from friends CreditSights. back to renminbi, which was
The challenging market and family accounts. CreditSights does not appreciating, said Alicia Garcia
backdrop has kept most Asian Issuers have been squeezing recommend buying LGFV issues Herrero, chief economist for
borrowers away from the the price of their notes in the in the primary market. “The Asia Pacific at Natixis. “This was
primary US dollar market, a trade that was played under
but Chinese local government different circumstances.”
financing vehicles have Even though the swap
continued to raise funds and “The situation for the LGFVs is still pretty good. dynamic has unravelled,
allay refinancing concerns. We see increasing willingness by the central the LGFVs are not deterred.
Some US$8.9bn worth of “They may still do it. Many in
LGFV notes have been sold
government to support local governments. China think the renminbi will
in the US dollar market since They cannot afford another sector to go down.” continue to appreciate,” said
the start of the year, making Garcia Herrero. “Because they
up a significant portion of have an ecosystem in the Hong
the US$14.1bn raised from all Kong offshore market … they
Chinese corporate dollar bond primary market, and many pricing process is not very sometimes underestimate the
sales. But the LGFV offerings bonds have dropped below par market-based,” said Zeng. change in financial conditions
are rarely market-driven, in secondary trading within the LGFV borrowers started globally.”
instead leaning on Chinese first couple of days, said Zerlina selling US dollar bonds when it The LGFVs that began coming
Macquarie pays up for size widened 12bp to 201bp

over Treasuries on Tuesday,
according to MarketAxess.
Bonds Bank prices US$2.75bn of senior bonds ahead of Fed decision
“Concessions lately have
gotten overly generous to
By KIT YIN BOEY, MORGAN DAVIS, tranches. This was similar to before borrowing costs rise any the point of being disruptive
SUNNY OH what other investment-grade further. to secondary markets in the
US issuers had been paying, The final pricing was past week or so, at least in
Macquarie was the lone issuer said one of the bankers. above fair values estimated bank paper,” said Dan Bruzzo,
on Tuesday to brave the US No distribution data were by analysts. CreditSights managing director at Amherst
markets a day before the released but the banker said estimated fair values of Pierpont.
FOMC announced its policy the 6.25-year non-call 5.25 FRN the three-year tranches The Macquarie notes held
decision, paying a premium to was dropped during New York at 112bp based on a new up in secondary markets on
get a jumbo US$2.75bn multi- hours as demand was weaker issue concession of 15bp, of Wednesday with the three-year
tranche deal across the line. than for the other notes, the 6.25-year non-call 5.25 about 3bp–4bp inside reoffer
Holding company MACQUARIE allowing the issuer to focus on tranche at 193bp based on a levels as Taiwanese investors
GROUP priced US$650m of 6.25- building the sizes of the other 25bp–30bp NIC, and of the were seen topping up, while
year non-call 5.25 fixed-rate tranches. 11.25-year non-call 10.25 the other two tranches were
notes at Treasuries plus 200bp “It was a pretty challenging tranche at 225bp on a 20bp around reoffer spreads in
and a US$600m 11.25-year non- market as they wanted to NIC. narrow ranges.
call 10.25 tranche at 230bp, come to market before the “They had to pay to get it All the notes tightened 10bp
after dropping a 6.25-year non- FOMC decision,” said the done,” said a Singapore-based following the Fed’s widely
call 5.25 floating-rate tranche. banker. trader. “But the deal widened expected move to raise its
The notes are to be rated A3/ Up to four issuers had the rest of the Macquarie benchmark rate by 25bp.
BBB+/A–. been expected to come to the secondaries by about 10bp– The 3.231% three-year
Operating entity MACQUARIE investment-grade primary 20bp.” tranche, the 4.098% 6.25-year
BANK set US$1bn of three-year on Tuesday, but the sole Borrowers have been paying non-call 5.25 fixed-rate tranche
fixed-rate notes at Treasuries offering ended up coming extra concessions on new and the 4.442% 11.25-year
plus 120bp and a US$500m from the Australian bank issues in a bid to draw demand non-call 10.25 tranche were
three-year FRN at SOFR as borrowers stood down from investors worried about all priced at par. Settlement
plus 131bp. The notes have ahead of the Federal Reserve secondary performance. But is on March 21 with proceeds
expected ratings of A2/A+/A. meeting, according to market this tactic has sometimes targeted for general corporate
Bankers on the deal participants. forced a repricing of an issuer’s needs.
reckoned a new issue Macquarie had indicated yield curve in the secondary Bank of America, Citigroup,
concession of 25bp was paid it would raise more than market. Macquarie’s 2.871% Goldman Sachs, HSBC, Macquarie
on the three-year tranches and US$2.5bn, possibly to achieve 2033 fixed-to-floating senior and MUFG were joint lead
about 30bp on the longer-dated as much funding as it could notes, issued in October, bookrunners. 

visit www.ifre.com
to the US dollar market around probably still going to be ok,” Central government support that the funds could be used for
2019 included many with lower said Zeng, adding that LGFVs is essential for the survival refinancing weaker borrowers’
ratings than previous issuers. will be focused on refinancing, of LGFVs, though it may not debt, such as the YUNNAN HEALTH
Given that the most common but not widening their funding necessarily be monetary. There AND CULTURAL TOURISM US$800m
tenor of issuance is three years, channels. Managing LGFV debt have been policy measures bond that is due in April.
that means that there will be is a priority for China, and the that stabilise the sector and “This kind of news
some weaker names needing to country is relying on LGFVs to allow the borrowers access is boosting the market
refinance offshore bonds from fill spending gaps, including to financing through local confidence, even though the
this year. stepping into local land financial institutions, said Yang. size of the bailout fund is pretty
Despite the lack of auctions now that property “The situation for the LGFVs small,” said Zeng.
international orders, and companies are strapped for is still pretty good,” said LGFVs across the country
the slipping quality of LGFVs funds. CreditSights’ Zeng. “We see have been weakened by
seeking funding offshore LGFVs have so far never increasing willingness by the sluggish land sales, thanks to
to meet their refinancing defaulted on any publicly sold central government to support the ongoing property crisis
needs, market experts are US dollar bonds, and market local governments. They cannot in China. Without land sales,
not anticipating any US dollar experts believe that the central afford another sector to go local government incomes are
bond defaults from the sector. government has a strong down.” dented, and LGFVs may face
If and when defaults happen, incentive to keep the sector For example, the Yunnan additional financial stress, said
they are expected to be related afloat. If LGFVs fail, state-owned provincial government this Yang.
to onshore trust products enterprises will be shut off year set up a debt contingency That could see some
where issuers will not face the from the market, said Cindy fund to support LGFVs and borrowers from smaller and
same negative publicity and Yang, senior analyst at Moody’s. SOEs. The initial injection poorer provinces shut out of
scrutiny. “The final objective of the was Rmb5bn (US$786m), with the capital markets, given
“In the short term, the Chinese government is to avoid another Rmb15bn to follow. investor caution towards them,
funding conditions for LGFVs is any systemic risk,” she said. CreditSights wrote in February said Yang. 
Two Singapore REITs delay IPOs US$$600m and S$464m from

their respective SGX IPOs and
both are trading above their
Equities Mapletree and GLP hold off as rising rates impact investors’ yield expectations
issue prices.
M Star will be Mapletree’s
By FIONA LAU, S ANURADHA to rise globally after the US immediately respond to an first REIT listing since the
central bank on Wednesday email seeking comment. S$1.68bn Mapletree North Asia
Singaporean real estate raised the federal funds rate by GLP New Economy REIT Commercial Trust IPO in 2013.
investment trust IPOs are facing 25bp, the first increase since was targeting a yield of 5.7% DBS, HSBC, OCBC and UBS are
delays due to fears around 2018. The Fed is thought likely for 2022 and was planning to working on M Star’s IPO.
rising interest rates, with two to raise rates further during the start pre-marketing in March, Mapletree is owned by
high-profile sponsors last week Singapore state investment
deciding to postpone their fund Temasek Holdings and
deals. its other REITs listed on SGX
Property developer and “The sponsors and assets of both REITs are include Mapletree Commercial
manager Mapletree Investments Trust, Mapletree Industrial
first class, but investors want to see more
has put on hold a REIT IPO of Trust, Mapletree Logistics Trust
around S$1bn (US$737m) while
cash on the table.” and MNACT.
GLP-sponsored GLP NEW ECONOMY GLP REIT will comprise 12
REIT has delayed the launch of a properties in China including
S$1.1bn float as it is waiting for high-tech manufacturing parks,
rates to stabilise, according to year, affecting investors’ pricing subject to winning regulatory technology parks and modern
people with knowledge of the expectations for yield products approval. logistics centres. The properties
transactions. like REITs. “GLP REIT’s timeline is are located in 10 cities
Mapletree’s M STAR, a Mapletree reckons interest slightly delayed,” said a person including Shanghai, Guangzhou
REIT holding student rates may rise faster than close to the deal, but added and Zhongshan.
accommodation assets in the expected and is not keen on that the IPO process was still Citigroup and DBS are working
US, Canada and the UK, was offering a sharply higher yield proceeding. on the transaction.
set to be the first student on the REIT, said one of the The M Star and GLP REIT Founded in 2009, investment
accommodation REIT on the people. It was earlier looking at IPOs were expected to kick-start manager GLP has interests
Singapore Exchange. a yield range of 5%–6%. the IPO season in Singapore, in logistics, real estate,
IFR reported in February that “The sponsors and assets of which remains one of Asia’s infrastructure, finance and
M Star had started meeting both REITs are first class, but most active REIT markets. So related technologies across
potential cornerstone investors investors want to see more cash far this year there have been no markets including China,
ahead of a float expected as on the table,” a banker working mainboard listings. Singapore, India, Japan,
soon as the first half. on one of the IPOs said. Last year DIGITAL CORE REIT and Vietnam, the US, Brazil and
Interest rates are expected Mapletree did not DAIWA HOUSE LOGISTICS TRUST raised Europe. 

News
Indonesian miners face ESG test
Bonds ‘High impact’ borrowers face steep premiums, smaller investor pools as investor scrutiny grows

By KRISHNA MERCHANT, Good quality, repeat eased a bit from all-time high India Clean Energy Holdings
MORGAN DAVIS borrowers may be able to get levels of 8.99% and 9.97% on and Greenko Energy have US
deals done, but they will still March 9 to 8% and 9.46%, dollar bonds due 2027 and
Indonesian producers of coal, pay a premium. In November according to Refinitiv data. 2028 trading at 7.1% and 6.1%,
oil and gas are facing higher last year, oil and gas company Adaro Energy’s 4.25% bonds due respectively, while JSW Steel’s
borrowing costs and potentially MEDCO ENERGI INTERNASIONAL paid a October 2024, rated Ba1/BBB– sustainability-linked bonds due
reduced access to funding as 2032, rated Ba2/BB– (Moody’s/
investors begin to step back “There will be fewer investors willing to put Fitch), were quoted at 6.9%.
from what are perceived to be their money in coal companies and subscribe The push-back that
dirty businesses. to the bonds of such issuers, unless the coal companies face comes from all
While bond and loan volumes sides. Some banks, largely from
from Indonesia have been
companies are able to transition away from Europe and the US, have taken
muted for the last year or so, coal to greener business such as what Indika a hard line about which kinds
bankers said that companies Energy is trying to do.” of companies and projects
from “high impact” sectors will they are willing to fund. And
face smaller pools of investors, hefty concession of 75bp and (Moody’s/Fitch), are trading at investors want to know about
demands to pay a premium, and settled for a smaller size of 5.92%, easing a bit from an all- companies’ ESG practices,
fewer options for bank funding US$400m compared to a target time high of 6.99% on March 9. even when they are selling
should they seek to raise debt. of US$800m for seven-year Yields for Asian high-yield conventional bonds.
Coal mining companies like non-call three bonds priced at bonds have generally risen “The universe of banks
INDIKA ENERGY and ADARO ENERGY 98.376 to yield 7.25%. recently, but bonds from green working on these [thermal
may struggle to access the As of March 17, the yields sectors tend to trade at lower coal] transactions has reduced,”
market, or pay a very high cost, on Indika Energy’s 5.875% and yields than those from the coal said Manoj Agarwal, managing
said a syndicate head. “The coal 8.25% bonds due November industry. director and co-head of DCM
sector is obviously a bad place 2024 and October 2025, rated Double B rated Indian origination for Asia Pacific at
to be,” he said. Ba3/BB– (Moody’s/Fitch), had renewable energy companies BNP Paribas, noting that the
Korean companies postpone IPOs matter.

A domestic banker said that
IPOs originally planned for the
Equities Sizeable deals may wait until the second half as weak conditions affect demand
second quarter are now likely
to be postponed.
By SUNNY TSE are cautious about adding new 21–22. The shares were due to “The IPO demand is just not
positions, said an ECM banker. list on March 30. good at all,” said the banker.
Dented market sentiment Construction company Korea Investment & Securities “Some small IPOs even priced
has caused the postponement HYUNDAI ENGINEERING, which and Mirae Asset Securities were below the range.”
of at least three Korean IPOs was planning an IPO of up to leading the float. The unit of Kakao Corp
originally planned for the first W1.2trn, and renewable energy is targeting a market
quarter, and sizeable deals are capitalisation of over US$10bn,
unlikely to come in the first said people which knowledge
half, given the backdrop. “The IPO demand is just not good at all. Some of the deal.
Biotech company VORONOI, Kakao Mobility had already
which had already delayed its
small IPOs even priced below the range.” delayed its underwriter
schedule until after the March selection after its parent
9 South Korean presidential company faced intensifying
election, last week decided to power plant operator DAEMYUNG RIGHT TIMING pressure from regulators last
pull its IPO of up to W130bn ENERGY, which had aimed for a South Korea still has a number September.
(US$105m). W130.5bn float, cancelled their of large IPOs in the pipeline Founded in 2017, Kakao
The decision came on March listing plans in January and looking for the right market Mobility’s Kakao T app,
16, the day the book was due to February respectively, saying window. previously called Kakao Taxi,
close, making it the third Korea that investors were not valuing Car-hailing service KAKAO has more than 30 million
Exchange float to be withdrawn the companies properly. MOBILITY, which could raise registered users. It also runs
in the first quarter. The Voronoi marketed 2m new about US$1bn, initially aimed other brands including Kakao
company said the challenging shares in an indicative price to list in the first half. However, Driver and Kakao Navi.
market conditions had made it range of W50,000–W65,000. it has found it hard to stick Citigroup, Credit Suisse, Morgan
difficult to appraise its value. Bookbuilding started on March to the original plan given the Stanley, Korea Investment &
IPO demand has cooled 15 and retail subscription was weak market conditions, said Securities and Daishin Securities
because long-only investors scheduled to run from March a person familiar with the are working on the float. 

visit www.ifre.com
differentiation between ESG increased its stake in Nusantara and subscribe to the bonds and family and private banks,
compliant and non-compliant Resources, a gold mining of such issuers, unless the with only a couple of market
companies is becoming more company, to 100% from 45.8%. coal companies are able to investors buying into the
apparent. “The continued deviation transition away from coal to original deal.
from coal mining activities greener business such as what Looking into this year’s
GREENER PASTURES could drive greater interest Indika Energy is trying to do,” pipeline, miner BUMI RESOURCES,
Some companies, like Indika from ESG-conscious investors,” said Lakshmanan R, senior rated Caa3/CCC (Moody’s/S&P),
Energy, are divesting their coal said CreditSights in a note on research analyst at C
reditSights. may find it difficult to refinance
assets and diversifying into “Unless that happens, and bonds worth US$1.6bn by
cleaner businesses, though this more companies bring a track December 2022.
has yet to feed through to an “Issuers are aware record of that transition, it Bumi’s ESG credit impact
improved cost of funding in the that ESG as a business will be much harder for the score is highly negative (CIS-
bond market. strategy is important, issuers from the coal sector to 5), reflecting the company’s
“Issuers are aware that ESG as and not just because refinance over a long-term.” very high exposure to
a business strategy is important, environmental and social
and not just because investors
investors want to hear FINDING FUNDING risks stemming from thermal
want to hear about it,” said about it. [An ESG plan] Companies that cannot coal mining operations, and
Agarwal. “[An ESG plan] will be will be key from a communicate an effective to governance risks from its
key from a growth perspective.” growth perspective.” transition plan are expected to unsustainable capital structure,
On March 1 Indika Energy face a dearth of investors. said Moody’s in a note on
announced that it had sold For instance, coal company November 18 last year.
its entire 70% stake in coal- March 1. GOLDEN ENERGY AND RESOURCES, Still, while issuers are facing
servicing company Petrosea. Indika Energy may also raise which operates in Indonesia pressure to reform, it seems
Indika aims to increase the sustainable bonds or green and Australia, sold a US$285m unlikely there will be many
revenue contribution of non-coal financing to support its goal 8.5% 2026 secured bond in May defaults in the market, at least
businesses to over 50% by 2025 of diversification when the US 2021 and subsequently tapped for now.
and become carbon neutral by dollar bond markets settle, said the deal for another US$90m “These coal mines generate
2050. In the past year, it has bankers. earlier this month, but investor so much money,” said the
entered into joint ventures “There will be fewer demand was limited. The syndicate head. “They don’t
for an electric vehicle project investors willing to put their syndicate head said the bonds need to go to the markets to
and a solar power project, and money in coal companies were bought up by friends fund.” 
BOC sells first Tonar floater accounts bought 15%.

A banker away from the deal
said his firm decided not to be a
Bonds Chinese bank sets new benchmark, but pays up compared to US dollar curve
bookrunner because the issuer
asked if his affiliated bank
By TAKAHIRO OKAMOTO BOC had been exploring the first from China to print a would buy the paper.
opportunities to sell a yen bond Sonia-linked note. Guidance at the start of
BANK OF CHINA has introduced the for a while, but came at this To minimise the additional marketing on Wednesday was
first Tonar floating-rate notes time because of unfavourable funding cost, it kept the deal Tonar plus 26bp–31bp and
in Japan on its return to the market conditions earlier and size much smaller than its was revised to 26bp–27bp
yen market after a three-year because it took the issuer a long other branches usually raise in on Thursday morning before
absence. time to prepare to sell a bond the US dollar market. landing at the final pricing
The bank’s Tokyo branch that is based on Tonar, not the Last month, its Hong Kong level in the afternoon.
on Friday priced a ¥10bn traditional Libor. branch raised US$1bn from a The Chinese bank last visited
(US$84m) two-year Reg S senior Both bankers on the deal three and five-year dual-tranche the yen market in November
unsecured euroyen note under and away said the pricing deal, followed by its Sydney 2018 with a ¥30bn three-year
its EMTN programme. The level was higher than the branch offering a US$400m euroyen note.
coupon is compounded Tonar bank’s US dollar curve in three-year note. Bank of China, CCB Asia, CLSA
plus 26bp with the floor set at the secondary market. BOC, Orders for the yen deal and SMBC Nikko were joint
0%. however, decided to do this exceeded the issue size, but global coordinators and lead
Unusually, it priced the bond deal because it wanted to be the final book size was not managers for the new deal,
on the day when the Bank of the first to sell a Tonar FRN in disclosed. which will settle on March 24.
Japan announced its policy Japan, just as in 2019 it was Japanese investors bought The bond, to be rated A1/A/A,
decision – though the central the first Asian issuer to sell US 65% of the notes and foreign will be listed on the Stock
bank maintained a dovish tone dollar bonds linked to the new accounts the rest. Banking Exchange of Hong Kong and
and did not spring any surprises. SOFR benchmark and in 2021 accounts took 85%, while other the Tokyo Pro-bond market. 
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People
& Markets
TOP STORY INVESTMENT BANKING
Banks in Australia crowded out

New entrants leave some struggling for market share
As more banks expand into Australia or start-ups. It is one of the most crowded raided CLSA for a number of its equities
look to scale up their operations there, banking markets in the world.” staff a few years ago and picked up a
some are beginning to question whether number of bankers who were let go from
there is enough room for all of them in EXPANSION MODE Deutsche Bank under a retrenchment.
what has been described as the “most It is hard to think of any bank that is not Australia also has a number of successful
crowded banking market in the world”. expanding in Australia at the moment. One homegrown boutiques such as LUMINIS
Earlier this year, CREDIT AGRICOLE became headhunter estimated that the number of PARTNERS, MST FINANCIAL and LAZARD AUSTRALIA,
the latest to announce a push into Australia new front-office roles across the industry which was spun out last year from the US
as it said it had opened a licensed bank. may have risen by more than 50 last year, parent under the leadership of well-known
The French lender already has a presence which is high considering MACQUARIE GROUP, rainmaker Andrew Leyden.
in Australia and has carved out a niche which is the biggest investment bank in
in structured finance including hedging Australia by far, has around 200 investment ALL THINGS
services related to those financing bankers. What is also noticeable is that banks are
activities, although the new bank is part of The two other investment banks that expanding in practically every sub-segment.
a renewed push Down Under. generally top the rankings alongside CITIGROUP, for example, is growing its
IFR understands that this will focus in Macquarie, UBS and GOLDMAN SACHS, have coverage of mid-sized Australian clients and
particular on growing its M&A footprint,
although the bank is also expected to
target everything from investor solutions
“A lot of banks are entering the market for the second or third
to capital markets, while it will have a time. You can definitely run a successful business in Australia
particular focus on clients in the telecoms, in certain pockets like inbound private equity M&A or leveraged
healthcare and renewables sectors. finance, but we have found in the past that these businesses that
The strategy could well pay off, don’t have scale are usually the first to exit when banks are cutting
particularly if it sticks to niches it excels at
globally, which inevitably happens at some point.”
like ESG, according to market observers.
Fees in Australia are higher than the rest
of Asia and generally more comparable to around 600 and 450 staff altogether in plans to increase the team covering them
Europe, according to bankers. Australia and New Zealand respectively, within its banking, capital markets and
At roughly A$3.4trn (US$2.5trn), though the number of front-office advisory group to 35 by the end of 2024,
Australia’s superannuation sector is the investment banking roles is much lower. from 22 currently, according to its Australia
world’s fourth-largest pool of savings The big reason for the increase has been CEO Marc Luet.
globally, underpinning its capital markets. the build-out of JARDEN and BARRENJOEY, two Jefferies has staked a lot of its growth
It has also had an exceptionally strong recent entrants that turned a lot of heads around expanding its offering in cash
period for M&A. Volumes last year hit after prising away some of the country’s equities and research, two businesses that
almost US$400bn, according to Refinitiv top investment bankers, particularly from have struggled since the global financial
data, making it the second-largest M&A UBS. Jarden launched in May 2020, while crisis, prompting a number of banks to pull
market in Asia Pacific after China, Barrenjoey opened in September that year, back from offering these services.
surpassing even Japan. although both are still building out their Jarden and Barrenjoey also launched as
However, the number of competitors operations. full-service investment banks, rather than
looking to grow their market share has led Barrenjoey has been particularly as corporate advisory boutiques as many
to concerns of overbanking and questions aggressive in hiring in equity capital had expected them to.
over which banks will come out on top. markets, according to rival bankers and “I think it’s partly the fact that a small
“You have to put it in the context of headhunters, as it looks to build out its number of banks have made a lot of
what has happened in the past several block trading business. It pulled off a money in this market being all things to
years, where it has been a very healthy coup last year when it hired Jabe Jerram all people, which is not the trend we have
investment banking market, particularly and Dyson Bowditch from JP Morgan as seen elsewhere since the crisis,” said the
in M&A last year,” said Angad Chhatwal, co-heads of ECM. Both helped grow JP Australia head of one bulge-bracket bank.
senior research manager at Coalition Morgan’s ECM business to rival the top “It also reflects the sophistication of the
Greenwich. three banks and also worked together at Australian institutional investor, who
“There are a lot of new entrants looking Goldman. increasingly demands the best-in-class
to ride that wave, but that will not In addition, a number of global banks advisory, the best-in-class distribution, the
necessarily be so straightforward. It is not including BARCLAYS and SOCIETE GENERALE have best-in class research, etc, if they are going
just the European banks that are looking been growing since reopening offices in to do business with you.”
to expand, but also the US banks, the local recent years, mostly in coverage roles. Rival bankers note that Jarden and
banks, the boutiques and some well-funded JEFFERIES has also been expanding having Barrenjoey may struggle because of the

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investment required to achieve scale, that these tie-ups rarely last as usually one before,” said one buyside analyst. “A lot
although they both are backed by major party inevitably feels it has got the worse of banks are entering the market for the
institutions. Barrenjoey is part owned by end of the deal. second or third time. You can definitely run
Barclays and Magellan Financial Group, There are bigger questions for some a successful business in Australia in certain
while Jarden is a storied name in New of the global banks expanding into pockets like inbound private equity M&A
Zealand’s capital markets. Australia, where market observers said or leveraged finance, but we have found
Rival bankers also questioned their lack they risk getting caught between acting as in the past that these businesses that don’t
of international distribution. While Jarden a niche player and investing in full-scale have scale are usually the first to exit when
has an alliance with Nomura and Barclays operations. banks are cutting globally, which inevitably
said it will make its balance sheet available “I’m sceptical with a lot of the new happens at some point.”
to Barrenjoey, one rival banker pointed out entrants because I’ve seen this movie THOMAS BLOTT
India tightens Regulators in major markets including

Hong Kong do follow practices that subject
GROWING CONCERNS
The tighter scrutiny comes when India’s
IPO valuation companies to tighter scrutiny about their

business practices and financials, but they
start-ups and other companies have
become a darling for foreign investors and
scrutiny do not usually make granular checks on

valuation metrics.
increasingly hit the markets.
Last year, more than 60 companies –
One document from February containing including high-profile tech ones – made
(Reuters) India has tightened scrutiny Sebi’s remarks to an Indian IPO-bound their market debut and raised more than
of IPO-bound firms by questioning how company, seen by Reuters, asked for US$13.5bn, with many like ride-hailing
key internal business metrics are used to “explanation regarding how KPIs form firm OLA and hotel aggregator OYO still in
arrive at valuations, unsettling bankers basis” for arriving at the IPO issue price, pipeline.
and companies which fear delays in listing The Paytm listing, though, raised
plans, sources with direct knowledge told concerns about valuations. After tanking
Reuters.
Indian digital healthcare on listing day, the Indian payment firm’s
India’s push comes after the flop listing platform PharmEasy, shares are currently trading 64% below
of SoftBank-backed payments firm PAYTM’s which had filed papers for a their issue price, and some fund managers
US$2.5bn IPO in November which sparked US$818m IPO in November, had said the episode will “hopefully bring
criticism of lax oversight of how loss- is one company which was hit some realism to valuations.”
making companies price issues at what The concerns are widespread among
by such scrutiny: one source
some say are lofty valuations. bankers, lawyers and companies as the
The Securities and Exchange Board
with direct knowledge said scrutiny is ongoing, even as Sebi’s proposal
of India last month flagged concerns in the company raised concerns on whether such KPI-related disclosures
proposing stricter disclosures, saying with Sebi about auditing and should be enforced or not was open for
more and more new-age tech firms which supplying such details, and is public comments until March 5, three
“generally remain loss-making for a likely to get some relaxations. sources added.
longer period” were filing for IPOs, and The proposal stated key accounting
traditional financial disclosures “may not ratios like price-to-earnings were not
aid investors.” adding they should be “certified by a enough to assess loss-making firms’
But even before the proposal is finalised, statutory auditor.” businesses, adding Sebi wanted to get
Sebi has in recent weeks asked many Indian digital healthcare platform audit and disclosure of “all material KPIs”
companies to get their non-financial PHARMEASY, which had filed papers for a shared with pre-IPO investors for three
metrics – KPIs, or key performance US$818m IPO in November, is one company years.
indicators – audited, and then explain which was hit by such scrutiny: one source “Many investors, founders and merchant
how they were used to arrive at an IPO’s with direct knowledge said the company banks have reservations with Sebi’s
valuation, five banking and legal sources raised concerns with Sebi about auditing proposal,” said Vivek Gupta, National Head
said. and supplying such details, and is likely for M&A at KPMG in India.
Typically for a tech or app-based start-up, to get some relaxations. PharmEasy didn’t Investment bankers from Bank of
KPIs could be figures like the number respond to a request for comment. America and India’s Kotak Mahindra both
of downloads or average time spent on It is not clear if the additional have raised concerns with Sebi about such
a platform – metrics sources said are information requested by Sebi would be planned scrutiny of IPOs, according to
disclosed but difficult to audit or link to a released to potential investors. sources. They declined comment.
company’s valuation. Pranav Pai, founding partner at Indian One senior executive at an Indian
Sebi is asking us to “justify the VC firm 3one4 Capital, said Sebi was not start-up planning an IPO said his company
valuation,” said one Indian lawyer advising setting any limits on valuations and only was worried.
several companies eyeing IPOs, adding it “bringing parity of information” between “This will further encourage future
was “creating uncertainty and increasing profitable and loss-making companies generations of start-ups to incorporate
cost of compliance.” targeting IPOs. outside India so they can easily list
Sebi did not respond to a request for “Sebi is not asking for anything out of overseas.”
comment. the ordinary,” said Pai. ADITYA KALRA, ADITI SHAH, ABHIRUP ROY

People
& Markets
IN BRIEF WHO’S MOVING WHERE...
Financial Services Authority a US-style registration-based system this year. Hannah Malter, head of equity capital markets
Basel III implementation delayed Currently, only Shanghai’s Star board and Asia syndicate at UBS, has resigned and is joining
Shenzhen’s ChiNext board use a registration private equity firm KKR to lead its Asian public
Japan’s financial regulator is set to delay the system. ECM business, according to people familiar with
implementation of the final part of the Basel III “A comprehensive securities civil compensation the situation.
bank capital rules, following in the footsteps of system is an important part to offer legal Malter joined UBS in Sydney in 2007 as an
the European Union, IFR understands. protection for the full implementation of the stock analyst and became syndicate head in 2018.
The Financial Services Agency is set to delay the issuance registration system,” said the China She declined to comment when contacted by
new rules for the second time in just six months Securities Regulatory Commission in a statement. IFR and UBS also declined to comment.
after it already said last September that Japan’s The draft rules released by the CSRC and the Malter will join KKR in late June. The hire adds
mega-banks – MITSUBISHI UFJ FINANCIAL GROUP, Ministry of Finance state that when multiple to KKR’s effort to broaden its capital markets
MIZUHO FINANCIAL GROUP and SUMITOMO MITSUI fines cause fraudulent issuers and individuals advice and solutions to clients and portfolio
FINANCIAL GROUP – would have an extra year to to go bankrupt, or put them on the brink of companies in the region, said one of the
implement the market risk capital framework, bankruptcy, investors will receive compensation people.
notably the floor at which banks need to set ahead of administrative and criminal fines. If Selina Cheung, co-head of ECM Asia at UBS,
aside capital against certain assets. the fines have been handed over to the national will take up the role of acting head of ECM Asia
Last September, the FSA said that all banks with treasury, the MOF will help withdraw the money syndicate, said the people.
international operations plus any that use an from the treasury and compensate investors Within Asia ECM syndicate, Carlo Agostinelli
internal model-based approach for measuring first. and Kevin Cui will continue to assume their
risk would have until March 2023 to implement The proposed rules also outline how to handle syndicate responsibilities, while Ranjan Sharma
the changes, while those that use a standardised the situation if fraudulent issuers and individuals will be relocating to Singapore to cover South-
approach would have until March 2024. do not have enough assets to deal with civil East Asian deals.
In December, the FSA said that the smaller lawsuits after paying fines to regulators.
banks would have a further year, in other words The rules state that if the remaining property CITIGROUP has promoted Ollie Williams to head
until March 2025. is insufficient to cover the civil compensation of debt capital markets for Australia and New
The FSA is now expected to give the mega-banks liability after the issuers and individuals pay Zealand.
until March 2024 to meet the new requirements. fines to the regulators, the investors can apply Williams reports to Tony Osmond, head of
The EU already gave most of its banks until 2025 to the CSRC for compensation from the national Citigroup’s banking, capital markets and
to meet the new requirements, citing the impact treasury within a year after the court issues a advisory function in Australia and New Zealand,
of the Covid-19 pandemic among other reasons. final ruling. and to Adrian Khoo and Ben Ng, heads of DCM
The draft is open for feedback until April 10. in Asia.
China Securities Regulatory Commission To increase investor protections, China revised Williams, who has been at Citigroup for
New investor compensation rules its securities laws and criminal laws in the more than a decade, is a replacement for Ian
past two years. For instance, issuers will be Campbell, who has been appointed head of
China’s regulators on March 11 published draft fined 5%–100% of any illegal income, or up sustainability and corporate transitions for
rules that will give investors priority in getting to Rmb20m (US$3.1m) for a deal, depending BCMA in Australia and New Zealand.
compensation in civil cases related to securities on the status of the deal, increased from In this newly created role, he will lead the
fraud, paving the way for the implementation Rmb600,000 previously. Individuals working division’s sustainability and ESG strategy
of an IPO registration system for all stock for issuers that commit financial fraud can be and client engagement in Australia and New
exchanges in the mainland. sentenced to 10–15 years in prison, instead of Zealand. He will report to Osmond and to
China has said it plans to gradually move away 3–5 years, and there is no longer any cap for Rapheal Erasmus, head of the sustainability and
from an approval system for IPOs and roll out fines on the individuals. corporate transitions group in the region.

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Campbell will continue to work with the DCM Andrew John Morton, global co-heads of Wong was executive director for loan
team locally as vice chairman. markets, in her new role. syndication and distribution in Greater China,
Raiskin was most recently APAC head of based in Hong Kong.
AUSTRALIA AND NEW ZEALAND BANKING GROUP has equities. Since joining Citigroup in 2007, she has She is taking a break from her career to spend
appointed Chris Raciti as country head of China, held various APAC roles such as head of investor more time with her family. Her last day with the
subject to regulatory approval. sales and relationship management, head of bank was March 14.
Raciti has spent the past two decades in Asia G10 rates sales, and head of fixed-income retail Wong joined StanChart in January 2005 as an
with ANZ. Since 2017, he has held the role of structured product. associate director for the North-East Asia loan
country head for Korea and prior to that he led distribution team. Prior to that, she was vice
ANZ’s loan syndications and specialised finance RBC CAPITAL MARKETS hired Kara Price as a president in debt capital markets at Sumitomo
business for North Asia, based in Hong Kong. managing director in its Australian power and Mitsui Banking Corp since 2000.
Raciti will relocate to Shanghai in the coming utilities practice in Sydney.
months and will report to Simon Ireland, Price joins RBC from Wells Fargo, where she BARRENJOEY, the Australian start-up boutique
managing director for the international business. worked in the power, utilities and renewables backed by Barclays and ex-UBS bigwig
He is a replacement for Huang Xiaoguan, who is sector in Houston, Texas. She will relocate to Matthew Grounds, has hired Jo Masters as chief
retiring next month. Sydney and officially join RBC in June, reporting economist.
to Antony Steinberg, head of power, utilities and Masters, who started at Barrenjoey earlier
CITIGROUP has appointed Julia Raiskin as Asia- infrastructure in Australia. this month, was most recently Oceania chief
Pacific head of markets, replacing Stuart Staley, Price began her investment banking career in economist at consulting firm EY. She has also
who was recently named co-head of global Sydney 20 years ago. previously worked at Australia and New Zealand
foreign exchange. Banking Group as a senior economist and at
Raiskin reports to Peter Babej, APAC chief Loan market veteran Joanne Wong has left Macquarie Group, both as a currency strategist
executive officer, and to Carey Lathrop and STANDARD CHARTERED after a 17-year stint. and senior economist.
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Outlook for Asian Credit ROUNDTABLE
FOREWORD
I
ssuers, bankers and investors ended Russia’s invasion of Ukraine in February,
last year with the certainty that things two days after this roundtable took place,
could only get better in Asia’s bond weakened risk sentiment globally. On top
market. Instead, in the first two months of of that, the Covid-19 pandemic has seen
2022 they somehow got worse. a resurgence in parts of China, which is
Asia had often seemed like a safe likely to weigh on economic growth.
haven in emerging markets, but last year Global macroeconomic events will take
Chinese credit managed to roil global their course, but if China were to finish
markets, to the extent that the Federal revamping its latest industry regulations
Reserve had to answer questions about or introduce supportive policies it would
how Chinese property bond defaults be a welcome boost.
might impact the US economy. Predicting how the rest of the year will
Major changes to Chinese regulations look in Asian credit is a daunting task,
in sectors like technology and education, but market watchers would be justified
along with policies that crimped liquidity in thinking that the current environment
to property developers, shook investor represents a nadir. Many issuers, including
confidence and sent yields higher. sovereigns, have stayed on the sidelines
In a region where China accounts for due to volatility instead of beginning the
more than half of the offshore issuance, year by frontloading issuance, so when
that weakness even affected spreads for markets stabilize there is sure to be a
deals from other countries. rush of activity, as delayed supply meets
Investors hate uncertainty, and much pent-up demand.
of it has yet to lift. China seems close to The high levels of issuance in recent
finalising regulations for the tech sector, years means, inevitably, that many issuers
but it is still possible more companies have refinancing needs. Many will wait
might find themselves singled out for for a few months in the hope that global
closer scrutiny if their footprints become market conditions will settle down again,
too sprawling. but in the end they will have to return to
Meanwhile, investors are anxiously the market.
waiting for China to announce some The Asian G3 bond market has often
supportive policies for the property sector, swung between famine and feast, with as
as more developers default or ask for many as 10 deals a day when conditions
maturity extensions. are good.
The Fed’s expected string of rate hikes The boom times will be back, but the
this year was already expected to dampen shocks of 2021 provided a valuable reminder
demand for emerging markets, but that some risks had been mispriced.
Moderator: Daniel Stanton

Participants: Koh Chin Chin, Gary Lau, Alan Roch, Feng Zhi Wei
Deputy editor: Vincent Baby Sub-editor: David Holland Event producer: Paul Holliday
Head of production: Victor Ng Production assistant: Mike Tsui
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International Financing Review Asia Outlook for Asian Credit Roundtable March 2022 1
ROUNDTABLE Outlook for Asian Credit
Roundtable participants
KOH CHIN CHIN GARY LAU ALAN ROCH

United Overseas Bank Moody’s Credit Agricole
Koh Chin Chin is managing director for group Gary Lau is the Managing Director for Moody’s Alan Roch was appointed Head of Credit for
central treasury at United Overseas Bank. corporate finance group in Hong Kong. Asia-Pacific at Credit Agricole CIB in August
Chin Chin has more than 20 years of practitioner Gary manages analytical teams in Hong 2021 and oversees the global market division’s
and Big Four experience in the financial services Kong, covering corporate ratings in North overall credit products activities in Asia-Pacific
industry. In her current role at UOB, Chin Chin Asia ex-Japan. He has extensive experience across origination, syndicate, trading and sales.
is responsible for the group’s strategic asset- with Moody’s in analytical and management Alan brings 20 years of experience gained in
liability management function, funding strategy positions with responsibilities across different London and Asia including in debt syndicate.
and debt issuance activities. industries and geographies. He joined Credit Agricole CIB from Standard
Her strategy over the last seven years He has been with Moody’s since 1998. Before Chartered Bank where he was head of Asia bond
established UOB as a frequent issuer in both joining Moody’s, Gary worked for Barclays Bank syndicate, based in Hong Kong. Prior to that
international and regional local currency debt and Bank of America in the financial institutions he was head of debt syndicate for Asia-Pacific
markets. and corporate banking divisions. at ANZ, following various positions at RBS and
Chin Chin holds a Bachelor of Accountancy He holds an MBA and a Bachelor of Social ABN Amro, in both Asia and London.
(Hons) from the Nanyang Technological Science, both from The Chinese University of
University, Singapore and a Masters of Applied Hong Kong.
Finance from Macquarie University, Australia.
FENG ZHI WEI DANIEL STANTON

Loomis Sayles Editor, IFR Asia (Moderator)
Feng Zhi Wei is a senior credit research analyst Daniel Stanton is the editor of IFR Asia and is
at Loomis Sayles Investments Asia in Singapore, based in Singapore. He has been with IFR Asia
covering the Chinese corporate sector. She since 2009, during which time he has held roles
joined Loomis Sayles in 2018, where she plays including Asia bond editor and Asia equities
an integral role in driving strategy and selection editor.
for its Asia Bond Plus fund, and has 24 years IFR Asia has a team of reporters and editors
of experience in the investment and real estate in Hong Kong, Singapore, Tokyo, Beijing,
sectors. Melbourne and Mumbai, covering onshore and
Previously, Zhi Wei was executive director offshore capital markets transactions across
of credit research at Standard Chartered Asia Pacific.
Bank, associate director of credit research at Before joining IFR, Daniel worked for other
Barclays Capital, and director of research and financial publications in Singapore, Dubai and
consultancy for Jones Lang LaSalle Property London.
Consultants. She earned a BSc from Shanghai He has a MA in International Journalism from
Jiaotong University and a CDipAF from the Cardiff University, UK.
Association of Chartered Certified Accountants.
2 International Financing Review Asia Outlook for Asian Credit Roundtable March 2022
IFR ASIA: ASIAN BOND VOLUMES HIT A RECORD LAST YEAR, of corporates materialises. Many of the corporates (mostly IG-
REACHING $432BN, UP ABOUT 7% FROM THE PREVIOUS YEAR rated) have enjoyed a long period of accommodative market
ACCORDING TO REFINITIV DATA, BUT THAT DOESN’T REALLY access, and they have locked in low interest rates on most of their
GIVE THE TRUE PICTURE OF QUITE HOW DIFFICULT CONDITIONS debt. The rise in the interest rate will only affect the marginal
IN THE BOND MARKET HAVE BEEN. APART FROM CONCERNS cost of borrowing. It will take several years before we see a
ABOUT WHEN THE US FEDERAL RESERVE MIGHT RAISE RATES AND material impact of a marginal rate increase on the average cost of
HOW QUICKLY, THERE HAS ALSO BEEN PLENTY OF ASIA-CENTRIC borrowings.
EVENTS THAT HAVE BEEN MOVING MARKETS, AND MOST OF THOSE So, in summary, from a credit perspective the outlook for
RELATE TO CHINA. IN MARCH LAST YEAR CHINA HUARONG ASSET corporate earnings, the margins, the profitability, as well as
MANAGEMENT ROCKED THE MARKET BY ANNOUNCING IT WOULD continued access to funding for refinancing, particularly for high
BE LATE PUBLISHING ITS ANNUAL RESULTS, AND WARNED OF A yield credits, will be more important than the impact of higher
POTENTIAL RESTRUCTURING TRANSACTION. interest rates for corporates.
THAT TURNED OUT TO BE A WHITE KNIGHT INVESTMENT BY
STATE-LINKED COMPANIES BUT IT MADE MARKETS RE-THINK STATE IFR ASIA: ZHI WEI, NORMALLY RISING RATES ARE NEGATIVE FOR
SUPPORT. THEN BY SUMMER CHINESE PROPERTY COMPANIES EMERGING MARKETS, HISTORICALLY, BUT WHAT EFFECT DO YOU
WERE STRUGGLING AND CHINA EVERGRANDE GROUP EVENTUALLY THINK THE RATE RISE IS GOING TO HAVE ON ASIAN OFFSHORE
DEFAULTED IN DECEMBER. EVEN NOW THERE ARE MORE CHINESE BONDS?
PROPERTY COMPANIES GETTING INTO DIFFICULTIES.
CHINESE REGULATORS HAVE ALSO BEEN CLAMPING DOWN ON FENG ZHI WEI, LOOMIS SAYLES: There is really no simple answer. We
INDUSTRIES LIKE TECHNOLOGY TO BREAK UP MONOPOLIES AS currently are in the tale of two cycles – China easing and the USA
PART OF THE COUNTRY’S COMMON PROSPERITY GOALS, LEAVING tightening. Within Asia we also have a story of two halves: China
INVESTORS TO FIGURE OUT WHICH KINDS OF CREDITS COULD BE and Asia ex-China. In general, inflation pressure for most Asian
AFFECTED NEXT. countries is still manageable. So we would like to break down the
WITH THE 10-YEAR US TREASURY YIELD RISING ABOUT 40 BASIS Asia offshore bond market by rating investment grade and high
POINTS SINCE THE START OF THE YEAR, ISSUERS AND INVESTORS yield credits by duration, country and sector.
HAVE TO DEAL WITH ALL THESE FACTORS AS WELL AS A RISE IN COST In general, investment grade is the most vulnerable to a US
OF ISSUANCE. Treasury hike, especially on a total return basis. But, again, total
[THIS ROUNDTABLE TOOK PLACE ON FEBRUARY 22, TWO return for short duration bonds should likely be isolated from a lift-
DAYS BEFORE RUSSIA INVADED UKRAINE, WORSENING MARKET off in long-end rates, and by country and issuer credit profiles.
CONDITIONS FURTHER.] Some Treasury impact could be cushioned by spread tightening
GARY, HOW WILL FACTORS LIKE THE END OF QUANTITATIVE from a credit quality improvement and stronger business prospects
EASING, RISING INFLATION AND HIGHER RATES AFFECT CREDIT for Asia credit. We also see opportunities from risk-adjusted relative
QUALITY FOR ASIAN CORPORATES? value and supply-demand dynamics in Asia. If we have more policy
stability or we have more supportive policies, we would also see
GARY LAU, MOODY’S: Certainly the elevated commodity prices, some opportunities for spread compression from Chinese credit.
inflation pressure and volatile financial market are key challenges Compared to investment grade, I think Treasury movement is
facing Asian companies in 2022, putting aside the regulatory less an issue for Asia high yield bond performance. But within high
scrutiny on certain sectors and also geopolitical risk. yield, I think those currently trading closer to investment grade
To begin with cost pressure has emerged as the next challenge level are the ones who will be the more vulnerable to a rate hike,
of the pandemic. The impact on corporate revenues and margins but these are also the strongest names within Asia high yield.
in the region certainly would vary across different sectors. For The other asset class that probably will be affected by higher
example, the commodity and raw materials producers such as rates is fixed-for-life perpetual bonds, but I would say it is already
those in upstream oil and gas or in the mining sector are benefiting reflected in the bond prices. Asian currencies could also be affected
from the current period of high prices. Similarly the steep rise by a rate hike, but compared to the early years, I think the Asian
in transportation costs has supported the margins of container currencies are more stable now and I do not think a rate hike will
shipping companies. result in significant fund outflows from Asia.
On the other hand, manufacturers of goods which depend on I think the least affected by the rate hike will be Chinese high
raw materials, transportation and logistics services which face yield property because this sector is trading at distressed levels, and
capacity shortages, now have the added pressure of high energy most are trading at more than 10% yield.
costs. Not all the companies will be able to fully pass on the cost Lastly, I think geopolitical issues will also complicate the market.
increases to the end consumer, resulting in margin compressions. So, in short, I would expect some short-term volatility in the Asia
We also see that supply bottlenecks and input shortages are offshore bond market.
constraining the production of goods and services in many sectors,
such as motor vehicles, electrical equipment and machinery, where IFR ASIA: OBVIOUSLY UOB HAS GOT A VERY HIGH RATING AND WHEN
a shortage of semiconductors has caused manufacturers to scale IT ISSUES IT PAYS A LOW SPREAD. SO WHAT EFFECT WILL THE RATE
down their production. But that said, we expect the supply chain HIKE AND WITHDRAWAL OF FISCAL MEASURES HAVE FOR ISSUERS
disruption to ease later in 2022. LIKE UOB?
The post-pandemic economic recovery, the labour market
recovery and the current inflation dynamics means that monetary KOH CHIN CHIN, UOB: With an improved outlook and the rise in
policy of central banks is set to tighten in many countries globally, inflationary expectations, generally the market has probably
and strengthen the case for a quicker normalisation of monetary anticipated rate hikes on the horizon globally, and for most
policy than we previously expected. countries and central banks to be tapering their asset purchase
In our view, the credit impact of a 75 to 100 basis points Fed programmes. However, it is the pace of the tightening cycle
rate hike in 2022 will be limited if the expected earnings growth that has created a lot of uncertainties, given the rising inflation
numbers and the increasingly hawkish tone from 1.75%? You have seen pretty much all these outcomes
the central banks. Investors are currently trying to in the last six weeks.
grapple with the current market dynamics. Euroland which was a beacon of stability in the
Some investors are stepping away on the sidelines, past has really witnessed a lot of volatility as well
waiting for more clarity. Some investors are with 10-year swaps moving pretty much within the
expecting higher new issue premiums, as we have same 50 basis points range, which was even more
seen in the market earlier this year. unexpected.
Another point about tapering that affects the The greater hawkishness of central banks has
non-eurozone issuers like us when we issue our caused a lot of uncertainty and, therefore, the only
covered bonds would be the European Central Bank’s way you can really pre-empt that is by trying to come
covered bond purchase programme, the CBPP3. This to the market as early as possible, even if that means
implies normalisation of the artificially compressed there is some new issue concession.
spreads of the non-eurozone covered bonds that Added to the mix you have geopolitical headwinds.
“The greater we have seen, and that will also reduce the relative It really goes to show that it is very difficult to
attractiveness of the non-eurozone paper from the predict how geopolitical events may unfold, in
hawkishness eurozone investors’ perspective. particular, with the one that is ongoing in Ukraine at
Looking at the withdrawal of the fiscal measures the moment.
of central that were put in place during the pandemic, for From our perspective we are pleading for a
example, we talk about the A$210bn Australian term cautious approach for issuers that are deal-ready and
banks has funding facility that expired last year in June, and have financials and documentation ready. Our advice
also the more than €2trn TLTRO3 in Europe that is to take a close look at the market. That applies
caused a lot expired in December last year. pretty much to everybody in investment grade, and
Now banks who have had the benefit of drawing for those who are in the high yield space, of course,
of uncertainty down from these programmes will have to find a it is more idiosyncratic. Yields still remain quite
way back to the wholesale debt markets to refinance, elevated, so that recommendation probably doesn’t
and, therefore, even on a partial basis, to repay these obligations apply to everybody in that sector but in investment
going forward. This normalisation of bond supply grade it really does.
the only way will actually push spreads wider over time. The last point though is to retain some flexibility.
In all I feel that it is a more challenging set of What we have seen within a given market is one day
you can really inherent market conditions for issuers, whether or sentiment can be really poor and on the next day
not they are high grade issuers like us. That also sentiment can be very strong. The ratio of go/no-go
pre-empt that explains why issuers globally have been frontloading. calls quite often ends up in no-go, and that can be
As can be seen earlier this year, markets had been frustrating to issuers but we would recommend to
is by trying to really busy and also new issue premiums have been have a little bit of flexibility within a given window
paid. The geopolitical tensions that we are seeing to ensure executions are timed perfectly.
come to the now, such as the Russia-Ukraine tensions, add to The final point I would make is there is a first
another layer of uncertainties for issuers. mover advantage when the market does open up. We
market as early Going forward, I believe that the issuers have to definitely would recommend to seize and grab that
be even more nimble than ever to navigate around market window and get ahead of the curve.
as possible, volatility, market events, geopolitical tensions and
to be more considered in the way we assess our true IFR ASIA: OBVIOUSLY CHINA IS A PRETTY BIG
even if that execution risk, given all these structural headwinds. INFLUENCE ON THE ASIAN CREDIT MARKET. HOW
IS THE CHINA COMMON PROSPERITY DRIVE AND
means there is IFR ASIA: ALAN, YOU’RE AT THE CENTRE OF ISSUANCE THE REGULATORY CRACKDOWN ON SECTORS LIKE
IN ASIA. HOW HAVE RATE EXPECTATIONS CHANGED TECHNOLOGY AFFECTING CREDIT?
some new issue THE USUAL FRONT-LOADING APPROACH FOR ASIAN
ISSUERS? GARY LAU, MOODY’S: A lot of the themes of common
concession.” prosperity that we have seen in the national policy
ALAN ROCH, CREDIT AGRICOLE: When you think of so far have focused on addressing longstanding issues
whether to recommend an issuer to frontload its related to housing affordability and the burden of
issuance or not, you think of the risk factors and after-school tutoring on children and parents, with
rates really comes as factor number one. When the aim to reduce the financial burden on general
you go back to the end of last year, the market was households, in particular younger couples given the
expecting two-plus hikes from the Fed across 2022. low birth rate in the country.
Now the consensus is that they hike pretty much at We also see specific policies to curb anti-
every meeting this year. That is a step change in a competitive behaviour in the internet platform area
very short period of time and it argues for trying to which has grown rapidly in the last decade, with
frontload and to come ahead of that wave. clear market leaders in a number of segments.
That obviously has had a big impact on term dollar The tightening regulations relating to the property
rates as well, 10-year Treasuries moving in a 50 basis and education sectors have certainly resulted in
point range. It is obviously causing uncertainty as significant negative impact in terms of a major
well in the investor community. At what point do shift in the operating and business models for
they come in and buy the market? Is 2% for the 10- most companies in the education sector. For the
year Treasury the right number? Is it 2.25%? Is it property sector we see tightening funding access
and, subsequently, financial distress for a number of REGULATORY CHANGES UPON THE ASIAN CREDIT
property developers nowadays. MARKET?
For the tech sector, let us focus on the internet
names. The tighter regulations have definitely FENG ZHI WEI, LOOMIS SAYLES: I think the keyword so
raised uncertainty which has been negative. The far is uncertainty. As an investor we really do not like
impact of regulation has been to slow down internet uncertainty, whatever kind of uncertainty it is. For
companies’ revenue growth by limiting their the Chinese credit market now, I think the policy
ability to increase market share through mergers uncertainty is really a key issue for every investor
and acquisitions. Their Ebitda margins will also now, be it in the tech sector or the property sector.
contract because the new regulations that encourage Even if the policy intention is good and it is for
competition will push those companies to raise the long-term benefit of the sector, the issuers and
investment in developing new products and services, the people, uncertainty is not good for investors in
and marketing spend will also rise. the short-term. It really affects market dynamics and
One question we may want to ask is whether the the investors’ views. Taking the Chinese property
worst is over in terms of regulation of the internet sector as an example, we have the longest, restrictive
sector. We believe the tighter regulatory stance is measures, in terms of policies, since about five years
here to stay because in the last two years-plus of ago. Each year we were wondering if there would be
the pandemic, online services and products have some relaxation, but it didn’t happen, and actually
become an increasingly important part of China’s the policy or the measures are getting stricter each
consumption economy. That is probably why the year.
regulators need to assert more scrutiny, particularly In mid-2020 we started with the three red line
on the leading, large internet platforms. But there ratios to restrict the developers, then we moved to
could also be more, but not necessarily new, areas of the lending cap for the banks, and then we have the
focus: for example, correct and appropriate content centralised land auction for the local governments.
relating to the protection of minors, the protection They want the developers to have better credit
of workers’ welfare and rights, and how companies quality. They also want to reduce the leverage in the
treat and use the consumer data they collect online. system to the property sector.
Despite all these challenges, we see the rated That is a good thing in the long run, but I think
internet companies have a very strong financial execution-wise, there is some issue and the good
buffer and are mostly in a net cash position to absorb policy intention does not translate into good results
the negative impact in the near-term. They also have from the property sector. For the very capital-
experience of dealing with regulators and instituting intensive property sector now, it is in a liquidity
changes as required. crisis.
So the near-term impact should be manageable. Since last year we are more frequently looking
However, there could be changes along the way in at credit events or defaults. That is why, when you
areas that were touched upon previously, which we go into the market, nobody is looking at every
will closely monitor. developer’s three red line ratios, we are talking about
liquidity, and whether they can survive.
IFR ASIA: ZHI WEI, WHAT DO YOU THINK WILL BE The property market is not functional in a normal
THE IMPACT OF CHINESE POLICY MEASURES AND way. In addition to that, because of the rumours and
RATED HIGH-YIELD ISSUANCE IN ASIA EX-JAPAN HAS HAD PEAKS AND TROUGHS (US$BN)
90
80
70
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: Refinitiv
social media, there is no trust between the investors do you benefit as a Singapore credit when investors
and the issuers. I think the investor confidence and are diversifying away from Chinese credit?” I will
trust has gone. Looking at it now, I would think the say no. Investors have essentially gone and re-
offshore new issuance market is totally shut for the focused attention to markets like India and to a
Chinese developers. certain extent South-East Asia because the yields of
Policy for the tech sector is totally different. Tech Singapore credits are still viewed as too tight for such
companies are in good, strong liquidity positions and investors.
have strong credit profiles. But I think that kind of
uncertainty has still affected investors’ confidence IFR ASIA: GARY, ZHI WEI TOUCHED ON THIS BUT
in those tech companies, and eventually all those WHAT DO YOU THINK THE OUTLOOK FOR DEFAULTS IS
uncertainties will also affect their credit profile in GOING TO BE THIS YEAR?
the end. It will take time, but it will happen if the
uncertainty continues. GARY LAU, MOODY’S: What we expect is that the
“One of the In summary, with the uncertainties on different high yield default rate in Asia will remain high,
policy fronts, the new issuance market would similar to what we saw in 2021. The weakened
trends in 2021 definitely be muted especially for the non-SOE access to debt capital markets reduced issuance and
Chinese companies, and in the longer-term it will increased refinancing risk for a number of financially
defaults in the have a credit impact. weakened companies, particularly Chinese property
developers in the high yield space.
region was IFR ASIA: OBVIOUSLY UOB IS FIRST AND FOREMOST A In our rated universe, the share of debt on the
SINGAPOREAN CREDIT BUT HOW DOES IT AFFECT UOB B3 negative list, which is at the lowest end of our
that a large WHEN THERE IS UNCERTAINTY AROUND CHINA AND ratings scale, has remained high since October 2021,
VOLATILITY IN CHINESE CREDITS? largely reflecting a difficult operating environment
proportion of and tight funding conditions for the Chinese
KOH CHIN CHIN, UOB: The potential debt default property developers. They made up around 50% of
the defaults around the Chinese developers and the regulatory the list at the end of 2021, compared with just 3% a
crackdown indeed weakened the onshore investor year earlier.
were payment sentiments in China. For our Panda bonds issuances We forecast a high yield default rate in APAC of
into the onshore market, as well as the onshore about 6.2% level in 2022. This is slightly lower than
defaults. financial bonds issued out of our subsidiary, our the 7.4% trailing 12-month rate at the end of 2021,
primary investor market is really the bank treasuries but higher than the pre-pandemic level and the
But in 2022, where we understand that they do not buy into such average level of 3.9% for the past 10 years.
high yield issuances issued by the private property The default forecast reflects our expectation that
the year-to- companies. the global and Asian economies will continue to
The asset managers and the insurance companies recover steadily, and the monetary policy will change
date defaults are not really the primary investor base for us in this from accommodative to neutral stance. But it also
market because of the higher absolute yield hurdle reflects that Chinese property companies will remain
supported our that they expect, and also their preference for longer under pressure with high default risks. Already, in
duration, beyond three years, when three years is January this year there were four reported defaults
expectation probably our tenor sweet spot. in Moody’s rated universe and they were all Chinese
In the offshore markets the sentiment was property developers, mainly in the form of distressed
of a rise in similarly affected: credit spreads widened, liquidity debt exchange, which by our definition is a default.
conditions tightened. However, investors in this One of the trends in 2021 defaults in the region
distressed market do not directly compare between a Chinese was that a large proportion of the defaults were
credit and a Singapore credit. payment defaults. But in 2022, the year-to-date
exchanges.” Despite that, in our annual roadshows where we defaults supported our expectation of a rise in
meet our investors we have always been talking distressed exchanges. It is more difficult to predict a
about such topics in a very comprehensive manner distressed exchange because in addition to ability, it
about our credit profile. Nevertheless, during such also comes down to the willingness of the issuer and
times, we do get investors coming back to us, asking the intention of the company to preserve liquidity by
for more updates on our potential exposure to such extending maturity date to avoid default, rather than
companies. They would like to ascertain whether to honour their repayment obligations on time.
there is any second order contagion effects on the In summary, our estimated higher than global
investments. default rate in Asia is due to the distressed situation
As UOB is predominantly deposit-funded and we in Chinese property sector which accounts for a large
have access to the other funding markets we have part of the rated high yield portfolio in the region.
that flexibility to navigate around such market However, we expect the remaining portfolio will
volatilities. During such times we had the flexibility track the global trend.
to stay out of this market, or alternatively if we
really want to tap the market we can always go for IFR ASIA: LOOKING AT THE PRIMARY ISSUANCE SIDE,
the more insulated markets such as the Aussie bond WHAT DO YOU EXPECT THE ISSUANCE VOLUMES
market or the covered bond market. WILL BE THIS YEAR, AND WHICH COUNTRIES OR
In short, the Chinese volatility had very limited INDUSTRIES DO YOU EXPECT TO BE PARTICULARLY
impact on us. However, some people ask me, “So ACTIVE?
ALAN ROCH, CREDIT AGRICOLE: With the start we have markets closes, markets opens. We are going to see
had I think it is hard to make any other expectations lumpy issuance, and that will affect volumes and
than a decrease in volumes versus last year. We are new issue concessions. When the market is open you
down, quite significantly, so far this year, about tend to see five or six borrowers at a time.
30%. That is in contrast with other regions, as US At the moment for transactions which are short-
investment grade is flattish and euros are up. So we dated, ie, up to five years, usually concessions are
are definitely undershooting. anywhere from flat to 10bp. For 10 years they are
We do think there will be a catch-up from the anywhere between 10 to 15 basis points and they
weak start of the year and we will probably end can be higher in the longer end. So they are higher
up 10%, 15% lower. The reason why we are quite for our region compared to historical averages, but,
optimistic is we have got to keep in mind that the again, they have to be put in context of rates which
absolute terms of funding in dollars or euros remain remain quite low.
super compelling. Paying 10 basis points more new When we think of the outlook and markets
issue concession here and there against a steepening which are choppy, we need two things. One is
of the curve or higher yields isn’t going to change a greater engagement of issuers and investors
the fact the markets remains attractive in terms of in private placements. For those issuers that are
levels. We still have, from a historical standpoint, specifically sensitive to new issue concessions or
a market in which it is attractive to fund. Even the publicity coming in the public markets, then private
large corporates did quite a lot of pre-funding in 2021 placements can be a very good alternative for them.
and we think they will be likely to continue to do We have seen a very strong dialogue, and perhaps
some pre-funding in 2022. We do think there will be more so than in the past, around private placement
a catch-up in supply but we do think we are going products.
to fall short year-on-year versus what we scored last We think you will see private deals being struck
year. at a greater frequency than in the past for a greater
In terms of other variables in the outlook I think volume. For non-G3 currencies and local currency
one of the big considerations is duration. It has been deals you can have arbitrages, and as the basis
harder this year for issuers to get duration in Asia. market dislocates then you will see issuers hunting
About 10% of the supply in Asia, so far, has been over for these sort of transactions, and particularly in the
10 years. That is in contrast in the US, where you investment grade space. Lower volumes in the public
have had regular 20-year and 30-year deals. But once market probably means also greater volumes in PPs,
the market stabilises we will see issuers, sovereigns, as well as in non-G3 currencies.
strong corporates accessing that lifer bid across the From a country perspective and topology we think
region and into duration. The duration play at the ESG is obviously going to be a major theme across
moment has been to favor short-dated transactions sectors, across jurisdictions, across ratings, and while
and FRNs – more defensive maturities in the face of that is not new, that will continue to accelerate. And
central banks which have been much more hawkish. within countries, Chinese corporates, we expect
We do think that the bid for duration will return issuance will reduce somewhat, lesser M&A activity.
once the landscape for interest rates stabilises. They will continue to do the refinancing but there is
The other variable is the pattern of issuance – less reason to do offshore transactions than perhaps
CHINA ACCOUNTED FOR MOST OF ASIAN G3 ISSUANCE BY COUNTRY IN 2021
Australia/New Zealand
US$41.1bn
Greater China
US$218.7bn
South Korea
US$34.8bn
India
US$15.3bn
Indonesia
US$14.8bn
Singapore
US$8.6bn
Other
Total US$389.9bn US$56.6bn
Source: Refinitiv
in the past. to be a Reg S product. In terms of the Tier 2 market,

Also the PBoC has been cutting rates onshore so US investors used to be more receptive to a 10-year
these issuers do have very good funding onshore and bullet structure unlike the Reg S market where they
that gap between onshore and offshore probably are receptive to the 10-year non-call five. However,
favours onshore financing. So we think volumes in recent years we have seen convergence on that as
there are going to reduce. However, for China FIG, witnessed in last year’s sustainability bond issuance
the G-SIBs will start TLAC issuance probably in the and also other market transactions.
second half of the year so we do think there will be Both markets have the typical investor segments
greater volume of issuance coming from that sector. such as bank treasuries, the asset managers, the
Otherwise, in other regions, we are calling for fairly pension funds, lifers, and money market funds.
similar volumes in South Korea or South-East Asia, However, if you look at the depth of the investor
and from sovereigns. base, we will be able to expect a larger consolidated
ticket size in the 144A market coming from an asset
“If you are IFR ASIA: CHIN CHIN, YOU MENTIONED FUNDING IN manager where they have US-domiciled funds.
SOME DIFFERENT CURRENCIES BUT HOW DO YOU The other interesting investor base in the US is
looking LOOK AT THE 144A AND REG S MARKETS? DO YOU SEE municipal funds. There is also the corporate cash
ANY PARTICULAR DIFFERENCES IN THE INVESTOR pool from the tech companies, and increasingly
for larger BASES THERE? pharmaceutical companies, where they have
accumulated sizeable cash resources. Private bank
prints and KOH CHIN CHIN, UOB: Our objective to assess the 144A investors onshore in the US typically do not gain
market primarily is from the investor engagement bond exposure through the direct primary market,
want added angle, with a long-term view to build a diversified but rather through managed funds, unlike the Reg S
global investor base to deepen our market funding investor base.
insurance capacity. So while we can test opportunistically and However, in recent years we have seen PB demand
conveniently in the Reg S market for funding, we in the Reg S market decline, partly because of the
given the still prefer to engage the US dollar market through less attractive bond yields versus the equity market
the 144A format on an annual basis, subject to during the low yield environment.
difficult market market conditions.
However, there are times where it is not practical IFR ASIA: ALAN, YOU MUST HAVE A GOOD VIEW OF
environment for an issuer to continue to stick to the 144A plan THE ASIAN INVESTOR BASE. HOW DO YOU THINK THE
in a volatile market environment where you have a INVESTOR BASE HAS DEVELOPED IN RECENT YEARS?
and the fact 135-day restricted market window, and when there
is huge market volatility you do not know when you ALAN ROCH, CREDIT AGRICOLE: The first thing to keep
there could be can actually access the market. So if you go beyond in mind is the investor base for our product has
the 135 days window you will incur more costs, but considerably grown in recent years. It is considerably
much smaller more importantly, more time is needed to update deeper than it was only two, three years ago.
financials and conduct further legal due diligence to That being said, in the last couple of weeks and
investor extend the issuance windows. months we have seen transactions benefit from a
A case in point was in 2020 when we experienced bid which is closer to home, a bigger emphasis on
demand in volatility throughout the most part of the year. local demand. We have seen this in, for example,
Finally in September we decided that we should China deals and the China bid and we have seen
the Reg S just offer our US dollar Tier 2 offering in Reg S-only that pattern in other jurisdictions as well, which
format to achieve our deal-specific objectives. is understandable. When there is a little bit more
market because If you are looking for larger prints and want added volatility there is always value in keeping a bit close
insurance given the difficult market environment to home.
investors are and the fact there could be much smaller investor The other point is that issuers that have done
demand in the Reg S market because investors are consistent investor work in the last few years have
still on the still on the sidelines, it is good to be able to access managed to build an extremely good investor
the 144A market, given the depth of the market. dialogue. In the current market environment there is
sidelines, it is Other considerations that we have usually will a big differentiation between those issuers that have
be what is the intended objective of the planned done that work in the last couple of years versus
good to be able issuance? What is the target audience and the key those that, perhaps, overlooked that aspect of that
messaging? One good example that I can share was execution.
to access the the US$1.5bn sustainability bond that we launched The large and best in class issuers do have access
last year. We set up our sustainable bond framework now to the Asia dollar liquidity pool, the global dollar
144A market. ” in March last year, and we wanted to engage the liquidity pool in the 144A market, and the euro
global investors to share our sustainability strategy, markets. That ability to access the largest pool of
our ESG profile and the progress that we have made liquidity provides issuers with choice, and choice in
on this journey. We deliberately structured a dual the current market environment is a great luxury.
tranche senior Tier 2 144A/Reg S format to maximise From a short-term technical standpoint, investors
the investor coverage across geographies, and also are keeping high levels of cash or a higher cash
across the key investor segments. balance than usual. We have seen that in our survey
Senior and Tier 2 are the two relevant products and in some asset classes, in particular high yield,
for our 144A investor base, while AT1 will continue there has been some outflows. So the technical bit
isn’t that strong today but that obviously will turn at another layer on the liquidity impact.
some point, and then cash will need to be invested. If you are looking at Chinese high yield property,
We mentioned earlier the absolute level of issuance now we have a price curve instead of a yield curve.
this year is probably going to be lower than it was You have prices going from the 80s and 60s to
last year, and you have coupons and redemptions. the 20s and the teens. When the price moves the
That technical picture which today is negative but holders’ profiles will change, which also affects
will be an advantage as we progress in the year. secondary liquidity. So combined, I would say we are
in a circular flow of illiquidity at this moment. For
IFR ASIA: LOOKING AT THE ASIAN INVESTOR BASE liquidity to be improved, we need to have reduced
FROM A DIFFERENT ANGLE, ZHI WEI, HOW IS THE market volatility, or reduced uncertainty for the
SECONDARY LIQUIDITY SITUATION THESE DAYS FOR market. Then we need the new issuance market to
ASIAN BONDS? DOES IT MAKE SELL-OFFS WORSE reopen, and then we will see an improvement in
WHEN THERE IS THIN LIQUIDITY? secondary liquidity.
FENG ZHI WEI, LOOMIS SAYLES: Liquidity in the IFR ASIA: WE WILL TALK IN MORE DEPTH ABOUT THE
secondary market has been very, very challenging CHINESE PROPERTY SECTOR IN A MINUTE BUT CHIN
since mid-last year, but it is for a variety of reasons CHIN LOOKING AT THE LOCAL CURRENCY MARKETS IN
within different market segments. I think broadly ASIA, HAVE YOU SEEN THOSE DEEPENING RECENTLY?
for investment grade it’s demand, especially for
duration, in both primary and secondary markets KOH CHIN CHIN, UOB: Let me touch on the key South-
that is the main factor for liquidity, because of the East Asian markets. Generally the issuance activities
US rate hike. in Singapore, Malaysia, Indonesia and Thailand
In terms of high yield, Chinese high yield over the last five years have largely been stable.
probably has the most deterioration in secondary Government and FI issuers continue to dominate
liquidity, since mid-last year. The sector has the domestic issuances, and the higher government
witnessed extreme swings in levels on an intraday supply for infrastructure financing offset the decline
basis. We have a lot of news reports, whether fake or in private sector issuances due to the pandemic.
real, affecting the individual credit perspective on an The Singapore dollar and Malaysian ringgit
intraday basis. markets are relatively more mature. About 15%–30%
Going into the end of last year, it became a sector of the issuances are in the subordinated bond format
issue. With that kind of intraday volatility it can be but that is to a much lesser extent in the Indonesian
in both directions. Sometimes you have a bond going rupiah and Thai baht market. All the typical investor
up in the morning and then when London opens the segments are present in these markets, but there is
bond will go down when the sellers come. a very limited investor universe that can invest into
The intraday volatility is high in addition to the subordinated bond space.
the already very weak liquidity. There is a kind of Despite the fact that these markets are not
investor fear of sectors like China property high yield growing in a material way over the last few years,
with all those large intraday price movements. This however, we do see very encouraging developments,
volatility together with the investor fear makes it that we believe will propel further developments
very, very difficult for dealers to pick risk, so that is of the local currency markets. For example, in
CHINA’S FIVE-YEAR CDS SPREAD HAS SEEN VOLATILITY THIS YEAR (BP)
70
65
60
55
50
45
40
3 Jan 17 Jan 31 Jan 14 Feb 28 Feb 14 Mar
Source: Refinitiv
Singapore we are seeing a growing ESG issuances buyers with a state-owned background to buy assets
it jumped from less than S$700m over the last few from distressed developers, but these state-owned
years to about S$4.2bn last year. enterprises are selective and mostly will act in a
There are also efforts in the industry to leverage commercialised manner, so our expectation is that
on blockchain technology to digitise the bond it will take time for a massive asset disposal to
market. This is starting with the bond market materialise. We also do not expect the government
processes such as post-trade demonstration, hoping will ask state-owned companies to bail out individual
to minimise operational risks and expedite the distressed property developers.
settlement frequency, and with the eventual view to There are a large amount of bond maturities in the
build a robust digital capital markets infrastructure next six to 12 months: around US$40bn in offshore
that can support Singapore’s aspiration to become a US dollar bonds and also around US$30bn-equivalent
regional hub. onshore bonds for our rated property developers. The
We believe in ASEAN’s potential and therefore majority of maturing bonds are issued by high yield
“Both the we believe that these local currency markets will names so refinancing risk is still high and we will not
continue to grow and deepen over time. We hope be surprised to continue to see defaults, including
onshore and that the local authorities will continue to enhance distressed exchanges, in the next few months.
their market infrastructure, reduce the time to
offshore market for market participants, improve the issuance IFR ASIA: ZHI WEI, THERE IS A BIG MATURITY WALL
activities in the primary market and also deepen the FOR CHINESE PROPERTY DEVELOPERS THIS YEAR,
refinancing secondary market liquidity. SO WHAT DO YOU THINK THE CHANCES ARE OF THEM
BEING ABLE TO REFINANCE EVERYTHING?
markets need IFR ASIA: LAST YEAR WAS A PRETTY AWFUL YEAR FOR
A LOT OF HIGH YIELD CHINA PROPERTY DEVELOPERS. FENG ZHI WEI, LOOMIS SAYLES: Looking at the current
to open, but GARY, DO YOU THINK CREDITS FROM THE CHINESE market situation and what we see day in day out in
PROPERTY SECTOR ARE IN FOR MORE PROBLEMS the headlines, it is difficult for them to issue and
we are looking THIS YEAR, OR IS IT POSSIBLE THEY CAN BENEFIT then refinance.
FROM SUPPORTIVE POLICY MOVES? Offshore investors have no trust, no confidence.
for a couple of So I think if they cannot issue what can the
GARY LAU, MOODY’S: Investors’ weak confidence and developers do? They are fighting for survival. They
signals first. risk averse sentiment are overhanging the property need to live first before they can think about any
sector. Despite some signs of policy easing in the other things.
Number one sector, we expect the financial and liquidity profile That is why you can see in the past few months
of the rated developers to remain under stress, we see a lot of exchange offers and maturity
is the asset particularly those lowly rated names. extensions. The developers will be trying to extend
The overall policy direction remains tight and maturities from this year to next year, but that only
disposal for the policy target of “housing is for living, not for kicks the can down the road. That will not solve the
speculation” will remain unchanged. We have seen problem because the obligation is still there.
the developers recently the lending to developers and home buyers I think investors are now more receptive of
has been relaxed, together with lower down-payment exchange offers compared to the early days. When,
or for M&A requirement and mortgage interest rate in order to for example, China Fortune Land or even Fantasia
support the declining sales in the broader market. tried to do an exchange, people may not have been
transactions However, investor sentiment remains weak and risk really receptive, but now I think investors are more
averse sentiment prevails particularly in the offshore realistic about the market.
to go up to a bond market. We also know how bad the situation is for the
Traditionally January is a very active bond issuing developers to refinance. There is no other better
meaningful month for property companies but this year, in choice compared to an exchange offer to avoid a hard
January, we have only seen US$700m offshore default. That is why I think we still see the exchange
volume, and bonds and US$1.3bn-equivalent onshore bonds offers going through. Going forward, whether they
issued by our rated property companies, the lowest exchange or not, using cash to pay every liability is
also at a level in the last 10 years. So this tight funding and not normal for any business.
liquidity situation hasn’t turned around, despite the We will need to have the refinancing market
reasonable government providing some easing policy. open for the developers. Both the onshore and
Among the relaxation measures, the offshore refinancing markets need to open, but we
price. ” standardisation of control over the cash in the are looking for a couple of signals first. Number one
escrow account at project level is still developing. It is the asset disposal for the developers or for M&A
could potentially return some more control and give transactions to go up to a meaningful volume, and
the developer some more flexibility in mobilising also at a reasonable price.
cash at the project level, but we do not expect Meaningful M&A will help the developers
substantial cash to be released for debt servicing generate some cashflow, and reduce immediate debt.
at the holding company level because the primary The other thing is the sales market needs to recover.
objective of the government is still to ensure Sales is the main cash generating source for the
timely delivery of pre-sold residential units to the developers, and if the sales are down they still need
homebuyers. to pay their opex, their capex, their tax, interest, and
We also see the government coordination for everything.
We would also like to see them normalise the use words initial price guidance then for sure it has got
of proceeds from sales, so we can see their escrow impact on the investor psyche. So the clouds are
accounts, and know which cash is restricted or which definitely still there.
is not. Even so, say, ensuring project completion is All these liability management terms and
the key for the government. extensions are drawing so much time and effort from
We will need to see onshore refinancing markets the investor community, and they are extremely
open for the developers. In the early days, other important decisions for the investor base to get right.
than project financing or construction loans, the If you want to generate performance in 2022 in your
developers had access to onshore bonds, ABS, trust high yield portfolio getting Chinese property right
loans, and wealth management products. will be absolutely critical. So that is drawing a lot of
We have news that the onshore market is opening energy away from the new issue markets.
to the SOEs, so I think whether they will open to the In our view we are not too far away from a market
POEs, the private developers, from the stronger ones outside of China property re-opening. We actually
to the provincial ones, is another signal we need to have seen some transactions so far this year. I think
monitor. the recipe book for these deals is quite simple. You
There is still a long way to go for the offshore need to keep it quite short, at least, at the moment,
refinancing market to open for developers at this and you need to make sure that covenant packages
moment. are really well thought through. That sounds like
an obvious thing to say, but we have seen covenant
IFR ASIA: GARY, IF CHINESE PROPERTY COMPANIES packages being lighter and lighter in the last couple
KEEP HAVING PROBLEMS, IS THERE A SPILL-OVER of years. I think the ability to compromise on these
EFFECT TO THE REST OF THE ASIA HIGH YIELD today is nil.
MARKET? We do feel there will be more transactions out
of India which is now the second largest high yield
GARY LAU, MOODY’S: We already see the spillover market in Asia, and has a big renewable story there.
impact. The Chinese property developers are the Indonesia has a few names which the investor base is
largest group of issuers in Asia high yield space and very comfortable with. You have also names outside
account for nearly 70% of the total issuance over the of Asia, and then within China itself the renewable
last five years. story, the tech story, the datacentre story.
With the turmoil in the sector, the high yield All of these are worthy of a lot of investor interest.
issuance is shrinking. In 2021 we see less than When these clouds, which are very present at the
US$30bn in our rated universe, down 23% from moment, start to drift away, these conversations
2020. Investors are shying away from the Chinese will begin in earnest, and the price or the cost that
developers. We see such negative sentiment is required for these issuers to come to market will
extended to other high yield companies in the region reduce accordingly. There are reasons to feel a little
as well. bit more optimistic in the months to come.
January is usually a strong issuance month in
the offshore market, but what we have seen is only IFR ASIA: LET’S TALK ABOUT SOMETHING A BIT MORE
two tap issuances in the month. A few new high OPTIMISTIC THAT IS GROWING: ESG ISSUANCE.
yield issuers in the region, outside China, who were ZHI WEI, HOW DO YOU SEE THE ESG BOND TREND
looking to launch bond issuance but decided to put it CONTINUING THIS YEAR?
on hold due to pricing and weak market sentiment.
We believe this situation will continue for a little FENG ZHI WEI, LOOMIS SAYLES: ESG is really the hot
while and increase the refinancing risk in the high topic and the only certainty for demand.
yield portfolio. I think we will see growth in issuance from ESG
Overall the impact is obvious, not only for bonds in this year and going forward. ESG issuance
refinancing risk but also rising funding cost. No is also a very demand driven process, currently,
doubt the Fed rate hike is one driver, but investors for investors. Funds that focus on sustainability
also demand a higher risk premium due to the are gaining more and more attention. They also
volatile market conditions, looking for higher yields play a very important role in terms of integrating
and shorter tenors. sustainability factors into portfolios, and encouraging
On the other hand, the slowdown in supply from companies to incorporate ESG elements into their
the Chinese property sector could potentially open business plans.
the door for companies from other countries to come Companies are talking to us, and they want
to the high yield US dollar bond market when the to know what they can do to improve their ESG
market conditions stabilise. presentation. When we embrace sustainable
investing from our end, there also needs to have
IFR ASIA: ARE THE CLOUDS FROM THE CHINESE some internationally recognised standard to check
PROPERTY SECTOR HANGING OVER THE REST OF THE accountability from the issuers. For example,
ASIAN HIGH YIELD SECTOR AND MAKING IT HARD TO we need to vet the companies, like their carbon
ISSUE? emissions and screen them from their ESG
compliance and also disclosures.
ALAN ROCH, CREDIT AGRICOLE: When you hear the When the market is growing we also have the
words missed coupon more often than you hear the rising concern of greenwashing. Investors, regulators
and the general public, need to see and track how from fossil fuel driven sectors will face higher
companies act on their plans. Companies will need transition risk and credit pressures.
to set executable goals and also be transparent about In other markets like Indonesia where the
all this. domestic financial markets are more limited and
On the one hand we expect to see more depend more heavily on foreign funding, the issuers
interesting investment opportunities with continued from this sector will face more near-term funding
growth in ESG bonds. On the other hand, we will pressures as global investors are accelerating the
need to preserve the legitimacy of this financing decarbonisation of their portfolios.
instrument. While some Indonesian coal companies were
still able to raise new bonds and loans last year,
IFR ASIA: GARY, DO COMPANIES WITH HIGH we expect their access to credit, especially from
EXPOSURE TO ESG RISKS FACE DIFFICULTIES IN THE international market, to decline over the next
CREDIT MARKET RIGHT NOW? few years as global initiatives like GFANZ grow in
“When the popularity, and an increasing number of financial
GARY LAU, MOODY’S: The answer isn’t very clear cut institutions or fund houses announce restrictions
market is because the implication can vary significantly across on lending to carbon intensive sectors, such as coal
different markets and different sectors. But no doubt, mining.
growing we ESG consideration is becoming more important Generally speaking, over time we expect investors
for issuers, investors and also rating agencies like will become more vigilant when taking exposure to
also have Moody’s. Last year we started to roll out our ESG issuers with high ESG exposure, especially those in
score for rated entities. the high carbon-emitting sectors.
the rising We have two sets of scores. We first assign what
we call issuer profile score to assess the E, S and G IFR ASIA: CHIN CHIN YOU MENTIONED THE BIG
concern of exposure separately on a five-points scale, from very SUSTAINABILITY BOND LAST YEAR, WHAT KINDS OF
highly negative on a score of 5 to positive exposure QUESTIONS ARE INVESTORS ASKING NOW? WHAT
greenwashing. on score of 1. We also assign a credit impact score, KIND OF DISCLOSURES ARE THEY LOOKING FOR
again on a five-points scale, which is an output AROUND ESG?
Investors, of the rating process that more transparently
communicates the impact of ESG considerations on KOH CHIN CHIN, UOB: There have been several forces
regulators and the rating. at play in relation to this topic that are collectively
Assigning ESG scores itself is not going to driving all of us to a common goal of promoting
the general change any rating, because ESG is always part more transparency and more robust disclosures in
of the considerations embedded into our rating the sustainable finance market. A few years ago
public, need assessment. We just provide more granular view on issuers probably anticipated a trend where ESG
the exposure and credit impact of ESG on a rated would become a hygiene factor for everyone and not
to see and entity. just for the sustainability focused investors. Issuers
From a credit perspective the net zero carbon including ourselves have been proactively engaging
track how emission goal will continue to raise pressure for investors to share our sustainability strategy or ESG
decarbonisation across different industries. Some profile and what we are thinking and how we intend
companies act sectors we see already undergoing a rapid transition to walk this journey.
in certain markets while others are under mounting We also tried to adopt the best practices
on their plans. pressure to articulate a trajectory to net zero in terms of voluntary disclosures, such as the
emissions. Gathering momentum behind the energy recommendations of the Task Force on Climate-
Companies transition has intensified, putting the spotlight on related Financial Disclosures in addition to the
longer term credit challenges, especially for the current mandatory reporting requirements which
will need to hydrocarbon industries. vary from jurisdictions.
We have also seen increasing awareness from The industry has also made an effort to improve
set executable issuers in those high carbon emitting sectors such on the impact reporting but the problem is that
as steel or cement, through their own articulation the fast pace of growth in the sustainable finance
goals and also of the path towards reducing carbon emissions, if market has created room and concerns in regard to
not carbon neutrality, and issuing sustainability potential greenwashing. Investors and regulators will
be transparent linked notes or bonds through their commitment definitely demand more transparency on this front
to sustainable productions and better disclosure. and rightly so.
about all this.” The impact varies. For example, the coal mining Progress on better disclosures at the same time
and oil and gas sectors in China and India may not is also being accelerated by regulators worldwide.
face imminent financing pressure considering the For example, EU companies are required to adopt
government support, the booming demand and mandatory reporting under the EU taxonomy
the sufficient support from the domestic financial regulations on environmental objectives in 2030 and
markets. investors are asked to adopt a phased-in approach
However, in the longer term the pressure to reach to comply with the sustainable finance disclosure
net zero targets will grow for companies from China regulations by the same year as well.
and India. The policy easing now could mean stricter What this means is that EU investors will be
requirements and higher costs to transition in the increasingly screening all investments against the
future. Eventually Chinese and Indian companies EU taxonomy, and to disclose what percentage of the
funds mix is in compliance with the EU taxonomy, official taxonomies. We have had a China taxonomy
because non-EU issuers are currently not within in November last year, Korea in December, common
the scope. EU investors will have to, eventually, ground taxonomy in November as well. So plenty
request issuers to provide gap analysis or otherwise has happened in the last few months and I think that
they may be leaning towards replenishing maturing is really going to boost the growth of this market,
investments with the EU taxonomy aligned formats and obviously the green market is very mature in
that will allow them to avoid the hassle of doing Asia. But as to the extent of the growth there has
the gap analysis to facilitate their own disclosure been very little by way of sustainability-linked bonds.
requirements. I think there have been 10 bonds in Asia Pacific
Different jurisdictions are also developing their that are sustainability-linked, and that is fairly
own domestic green taxonomies: for example, mainstream in Europe or in the US.
Singapore, Korea, Indonesia and so on. If the capital So we would expect this market to grow. We are
is only mobilised onshore, that is not a problem very thoroughly engaging issuers and borrowers
given that the domestic green taxonomy will serve on that topic, and we are quite optimistic on the
its purpose. But there has been increasing interest near-term growth prospect of sustainability linked
and also a willingness to mobilise capital across bonds, overall. The other driver is the expectation
borders. So we believe that investors will be looking of the Asia investor base. I think it is very noticeable
at the need for green harmonisation in terms of that they have sharpened their pencil around
standards and redefinitions. everything which is ESG, and we have really felt
The international platform for sustainable that trend. As for other geographies, investors
finance has formulated a draft of Common Ground that are committed to responsible investment will
Taxonomy which compares the EU criteria and the ask for more transparency of our sustainability
Chinese criteria and that is, primarily, because these commitments from issuers. There remain in our
two markets are two of the largest green financing region a lot of issuers that haven’t really published
markets. I suspect that the common ground concrete sustainability targets or, where relevant,
taxonomy will also be used eventually to broaden the decarbonisation roadmaps that are ambitious
global harmonisation efforts. enough. They are being held accountable more so
The International Sustainability Standard Bond has today than in the past by investors.
also been announced, following COP26, to streamline There is a lot of focus that is no longer being top-
global sustainability reporting. So in all I think all down or issuer-driven, but also investor-driven. That
these forces are coming all together to drive more is a positive dynamic of the investor having high
robust disclosures and transparency. expectations. As Zhi Wei mentioned, larger delegated
investable funds are ready to be invested, but the
ALAN ROCH, CREDIT AGRICOLE: I would like just criteria for investment, or the bar, has gone higher as
to respond on a comment Chin Chin made on time has passed.
harmonisation, because I think that is a really In a nutshell, the focus now is on sustainability-
important point. Harmonisation and standardisation linked bonds and with all the publication of official
are two super-important points for that market to taxonomies a lot of groundwork has been achieved. So
continue to grow. we are very optimistic here that this market is really
Very recently we have had the publications of going to go from strength to strength in 2022. 
People cross the street

on a rainy day.
Photo 150964992
© Vtt Studio | Dreamstime.com
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COUNTRY REPORT
Australia 19 China 21 Hong Kong 27 India 29 Indonesia 31 Japan 33 Malaysia 34
New Zealand 34 Philippines 35 Singapore 35 South Korea 36 Taiwan 36 Thailand 38 Vietnam 38
›EIB PRINTS CLIMATE AWARENESS BOND rating from S&P, raised A$409.2m. The bonds
have a 1.5-year weighted average life, and
AUSTRALIA The EUROPEAN INVESTMENT BANK has printed a were sold at par or a spread of 100bp over
A$200m climate awareness bond at 3%. BBSW. They have an initial credit support of
The 10-year trade was sold at par, or an 7.35% and required support of 6%.
DEBT CAPITAL MARKETS asset swap spread of 30bp. The Class B through G notes, which
The proceeds will be lent to activities were all sold at par, each have a weighted
›UNIVERSITY OF TASMANIA GOES LONG that contribute to climate change average life of 2.5 years.
mitigation, in line with the EU sustainable The Class B, rated AA, netted A$8.8m
The UNIVERSITY OF TASMANIA, rated Aa2 by finance framework. at 175bp over BBSW. The notes have an
Moody’s, priced 10 and 20-year senior Deutsche Bank was the sole lead. initial credit support of 5.35%, and required
unsecured green bonds to raise a total of support of 4.6%.
A$350m (US$251.3m). The A$4.4m Class C portion, rated A+,
A A$280m 10-year note was set at asset STRUCTURED FINANCE priced at 195bp over. The tranche has
swaps plus 125bp, pricing at par for a yield an initial credit support of 4.35% and a
of 3.97%. Pricing was inside guidance of ›MACQUARIE PRICES PUMA RMBS required support of 4.3%.
130bp–135bp area. The Class D tranche, rated A–, also raised
A A$70m 20-year piece was priced at par MACQUARIE SECURITISATIONhas priced the A$4.4m. The notes, which were priced
to yield 4.45%, in the middle of guidance of A$2.174bn (US$1.6bn) funding-only prime at 215bp over, have 3.35% initial credit
4.4%–4.5% area. RMBS offering, PUMA SERIES 2022-1 TRUST. support and 3.2% required credit support.
Both tranches were upsized from The Class A notes, rated AAA/AAA The Class E notes, BBB–, nabbed A$4.4m
indicative sizes of A$100m for the (S&P/Fitch), raised A$2bn, upsized from at 275bp over. The notes have initial credit
10-year note and A$50m for the 20-year a minimum A$690m. The notes, with a support of 2.35% and required support of
paper. weighted average life of 2.9 years and 8% 2.3%.
The senior unsecured green bonds are credit support, were set at 104bp over one- The A$2.2m Class F tranche, rated BB,
to be rated Aa2 by Moody’s and will be month BBSW, flat to guidance. was closed at 480bp over. The bonds have
issued under the university’s Australian The transaction is completed by A$174m initial credit support of 1.85% and required
dollar debt issuance programme. Proceeds of retained Class B notes with a 9.1-year support of 1.8%.
will be used for assets and projects aligned WAL. The unrated Class G bonds were closed
to ICMA’s green bond principles under The trade is backed by a pool of 100% full with A$6.6m at 1,000bp over. They have an
the higher learning institute’s green documentation, first-ranking mortgages initial credit support of 0.35%.
bond framework. DNV is the second-party secured over residential property in ANZ was arranger and joint lead manager
opinion provider. Australia. with NAB for the deal. Settlement is set for
Settlement is on March 24. CBA and NAB Settlement is on March 24. March 24.
were joint lead managers. Macquarie Bank was the arranger as well
as lead manager with ANZ, Bank of China,
›NIB MAKES KANGAROO FORAY CBA, NAB, SMBC Nikko and Westpac. SYNDICATED LOANS
Last July, Macquarie broke several
NORDIC INVESTMENT BANK,rated Triple A by records with its largest prime RMBS print, ›MAC TAPS DEBT FOR GLENCORE MINE
Moody’s and S&P, has sold A$300m 3.5-year the A$3.804bn funding-only Puma 2021-2
Kangaroo bonds at asset swaps plus 20bp or Trust, which included A$304.35m of US-listed special purpose acquisition
ACGB plus 59.2bp. retained Class B notes. company METALS ACQUISITION CORP is seeking
The 2.4% notes were priced at 99.808 for The transaction was the biggest RMBS to raise US$580m through senior and
a 2.4575% yield. by a non-major bank and the largest from subordinated debt to fund its proposed
Settlement is on March 22 with a any issuer since Commonwealth Bank of acquisition of a Glencore copper mine in
maturity on September 22 2025. Australia’s A$4bn Medallion trade in August Australia.
Daiwa Capital Markets, RBC Capital Markets 2014. Citigroup and Commonwealth Bank of
and TD Securities were joint lead managers. Australia have underwritten a US$405m
›BOQ PRICES A$440M REDS MHP ABS senior secured three-year loan, which is
›CENTURIA FUNDS SELLS MTN split into a US$350m acquisition term
BANK OF QUEENSLAND has priced an asset- loan, a US$25m revolving credit facility
CENTURIA FUNDS MANAGEMENT,as trustee of backed securities transaction, the capped for working capital, and A$40m (US$30m)
unrated Centuria Capital No 2 Fund, has A$440m REDS MHP SERIES 2022-1. in letters of credit, including performance
priced a A$70m three-year senior secured The deal is backed by prime finance guarantees.
MTN at asset swaps plus 335bp. fixed-rate leases and goods mortgages MAC is also raising US$175m through a
The transaction was upsized from a originated by the Australian bank that five-year mezzanine convertible debt led
minimum A$40m and sold at par for a yield include auto, equipment, fixtures and by Sprott Resource Lending Corp and investors,
of 5.4632%. fittings provided to medical and health and US$90m through a silver streaming
Settlement is on March 25. Westpac was professionals. agreement with a subsidiary of Osisko Gold
sole arranger and lead manager. The Class A notes, which have an AAA Royalties.

A US$41.75m equity financing will also ›ATI TAPS A$1BN TLB FOR REFI loan backing private equity firm
fund the acquisition. Livingbridge’s buyout of the Australian
MAC emerged as the top contender Legal technology and information services waste management, procurement and
for the Cornish, Scottish and Australian provider ATI Global is seeking a Term loan management services provider.
copper mine in New South Wales after B of about A$1bn. The loan is the first private credit-backed
Perth-based IGO dropped out of the Goldman Sachs is leading the borrowing, SLL in Australia and includes a margin
exclusive deal talks. which is split into a seven-year first-lien ratchet whereby the interest rate is directly
Citigroup is financial adviser, while portion and an eight-year second-lien piece. correlated to WSG achieving certain pre-
Squire Patton Boggs and Paul Hastings are The first-lien loan was being guided at determined ESG performance targets.
legal advisers to MAC. Citigroup, Canaccord around 450bp over BBSY. A fund managed by Ares Credit Group
Genuity and Ashanti Capital are placement LEGAL SEARCH and ATI US HOLDINGS are co- is the lender on the unitranche, which
agents in connection with the equity borrowers. marks the first financing for the alternative
fundraising. Proceeds of the latest loan will be used investment manager’s Australian direct
The US$1.1bn transaction is expected to to refinance debt at LEAP Legal Software, lending team, according to its press release
be completed in 2022, subject to approval a wholly owned subsidiary of Australian on March 14.
from MAC’s shareholders and regulatory Technology Innovators, and for general The ESG targets will be aligned to
approvals. corporate purposes and acquisitions. WSG’s long-term strategy to support
Moody’s has assigned corporate family the development of greener and more
›MOODY’S NEGATIVE ON ADANI’S NQXT ratings of B2 to Legal Search and its first- sustainable services in Australia.
lien loan, and Caa1 to its second-lien Livingbridge is acquiring the business
Adani Group’s NORTH QUEENSLAND EXPORT portion, with stable outlook. from Riverside Co, Silverfern Group and
TERMINAL will draw down a subordinated In September 2017, ATI, which owns other shareholders.
shareholder loan from its sponsor to InfoTrack and LEAP Legal Software, priced
repay a US$500m bond maturing in a A$350m five-year TLB at 575bp over BBSY ›TRANSGRID SEEKS PROPOSALS FOR REFI
December, according to a Moody’s report and an original issue discount of 98.5.
on March 14. Goldman Sachs and JP Morgan were joint Energy transmission firm TransGrid is
Moody’s affirmed NQXT’s Ba2 senior lead arrangers and bookrunners. seeking proposals for a refinancing, advised
secured rating, while revising the outlook In 2020, LEAP Legal Software raised a by RBC Capital Markets.
to negative from rating under review, A$50m first-lien term loan and a A$100m In August 2020, TransGrid raised a
citing uncertainty associated the terminal’s second-lien financing. A$800m dual-tranche club loan from
ongoing capital structure and ESG risks nine lenders – Canadian Imperial Bank
associated with coal-related assets. ›EQT FUNDS RETIREMENT VILLAGE BUY of Commerce, Commonwealth Bank of
The agency said it regards NQXT’s Australia, Hua Nan Commercial Bank, ING
development of a refinancing plan as EQT INFRASTRUCTURE has launched a A$915m Bank, National Australia Bank, Societe
a supporting factor reducing the risk five-year loan to back its acquisition of Generale, Sumitomo Mitsui Banking Corp,
associated with the refinancing exercise of STOCKLAND RETIREMENT LIVING. United Overseas Bank and Westpac Banking
the 144A/Reg S notes. Goldman Sachs and Westpac Banking Corp.
Moody’s pointed out that the coal mining Corp are joint mandated lead arrangers, That borrowing is split into a A$600m
and coal terminal sectors exhibit very bookrunners and underwriters of the loan, three-year capex facility and a A$200m
high exposure to environmental and social which is split into a A$365m core facility, a seven-year tranche with interest margins
risks, with risk factors including declining A$500m development portion and a A$50m of around 110bp and 120bp over BBSY,
demand for coal over time. It also noted working capital tranche. respectively.
challenges certain coal mines and their The loan offers an interest margin of NSW ELECTRICITY NETWORKS FINANCE is the
contractors in Australia face in raising 225bp over BBSY and fees of 50bp. borrower.
finance and obtaining insurance. A presentation for prospective lenders is In February last year, TransGrid Services,
Factors supporting the ratings include scheduled for March 22. a unit of TransGrid, signed a A$600m
the agency’s expectation that operating On February 22, EQT announced that five-year loan to support the delivery of a
conditions for the Queensland coal sector EQT Infrastructure V fund has agreed to pipeline of renewable connection assets.
will remain favourable into 2023 as well as acquire Stockland Retirement Living from Bank of China, BNP Paribas, CBA,
its estimations that the majority of NQXT’s Stockland Group. Mizuho, NAB, RBC, SMBC, UOB and
coal volumes comprise metallurgical coal, The transaction valued Stockland Westpac were the lenders to the club loan,
which faces less immediate ESG challenges Retirement Living at A$987m and is according to Refinitiv LPC data.
than thermal coal. expected to close in the second quarter.
The proportion of thermal coal at Goldman Sachs and King & Wood ›EARLYPAY GROWS INVOICE FINANCE
NQXT, formerly known as Adani Abbot Mallesons advised EQT Infrastructure.
Point Terminal, is likely to grow with the Stockland Retirement Living hosts EARLYPAY has increased its invoice finance
ramp-up of exports from the Carmichael over 10,000 residents in 58 villages warehouse facility to up to A$200m from
mine developed by Bravus Mining & across Australia’s eastern seaboard. It A$125m.
Resources, a wholly owned subsidiary of has a pipeline of 1,300 new units to be The facility will support the growth in
Adani Group, Moody’s said. developed. Earlypay’s invoice finance product, the
The controversial Carmichael coal company said in an ASX filing on March 15,
mine commenced limited production ›WSG TIES ESG TO BUYOUT LOAN without disclosing terms or lenders of the
at the end of 2021 and is scheduled to financing.
ramp up to over nine million tonnes per WASTE SERVICES GROUPhas raised a A$280m In November, Earlypay launched a new
annum. sustainability-linked unitranche four-year senior unsecured medium-term

COUNTRY REPORT CHINA
note offering of A$10m–$30m to provide In December, Plenti obtained an development of the Horizon uranium mine
growth capital, including funding support automotive warehouse facility with an in South Australia and for working capital.
for the trade finance product, and to initial limit of A$250m for funding electric Macquarie, Aitken Murray and Canaccord
refinance an existing senior unsecured vehicles in Australia. Genuity are the joint lead managers.
MTN. Westpac Banking Corp was the senior
The notes offered a margin of 90-day lender, while Australia’s Clean Energy ›ECOGRAF PLANS SPIN-OFF
BBSW plus 6.5%. Finance Corp provided the mezzanine
Last March, the company said it financing. ASX and Frankfurt-listed diversified battery
was expected to refinance a long-term anode materials maker ECOGRAF plans to
amortising loan from embattled supply demerge and list nickel-focused battery
chain finance firm Greensill Capital that EQUITY CAPITAL MARKETS minerals company INNOGY separately on
funded a small portfolio of equipment ASX.
finance contracts. ›ABACUS PROPERTY RAISES A$200M It did not specify the deal size or timing.
An existing bank warehouse facility was The demerger of the wholly owned
to cover the contracts, which represented ABACUS PROPERTY GROUP has raised A$200m subsidiary gives “shareholders an
less than 10% of Earlypay’s total loan (US$147.7m) through a fully underwritten opportunity for direct exposure to a nickel
portfolio, the company said at the time. institutional placement. focussed battery minerals company in
Greensill filed for insolvency last year The offer received support from existing one of the world’s most exciting nickel
after losing insurance coverage for its debt shareholders and new institutional regions,” the company said.
repackaging business. investors, the company said. Canaccord Genuity is leading the float.
Earlypay provides finance to small to The placement comprised 59.17m new
medium sized businesses in the form of shares, or 7.1% of issued shares, at A$3.38 ›WESTGOLD MINES INSTITUTIONAL FUNDS
secured invoice, trade and equipment each or a 5.1% discount to the last closing
financing. price of A$3.56 on March 17. WESTGOLD RESOURCES has raised A$101m from
The REIT is also planning to raise up to a non-underwritten institutional placement.
›GENUSPLUS LIFTS GUARANTEE FACILITY A$15m from a non-underwritten share The deal received support from new and
purchase plan which will run from March existing institutional and other investors.
Power and communications infrastructure 24 to April 14. The company sold 48m new shares, or
provider GENUSPLUS GROUP has increased Proceeds will be used to replenish 11.2% of issued shares, at A$2.10 per share
a loan to A$88m and established a new investment capacity for acquisitions yet or a 13.9% discount to the last closing price
A$10m surety bond. to settle and the company’s portfolio of A$2.44 on March 9.
The borrowing from Commonwealth expansion. Founded in 1987, Westgold is a gold
Bank of Australia comprises a A$60m bank Founded in 1996, the REIT has an exploration and mining company, active
guarantee, a A$10m working capital investment portfolio mainly concentrated primarily in Western Australia.
facility, and acquisition and asset finance in the office and self-storage sectors in Proceeds will be used for business
facilities of A$18m. Australia. expansion and general working capital.
The guarantee facility was increased by Barrenjoey and Shaw and Partners were the Canaccord Genuity was the lead manager.
A$25m. joint lead managers.
A global insurance firm provided the
surety bond, which adds to GenusPlus’ ›BOSS ENERGY FUNDS URANIUM PROJECT
existing facility with another global
insurer, the company said in an ASX filing BOSS ENERGY has raised A$120m from a two- CHINA
on Thursday. tranche non-underwritten institutional
The company’s surety bonds now total placement.
A$100m, of which A$48m is drawn. The offer received strong demand from DEBT CAPITAL MARKETS
existing shareholders as well as new
›PLENTI SIGNS ABS-LINKED FACILITY domestic and global institutional investors, ›CENTRAL CHINA SECURITIES TAKES THREE
the company said.
Consumer lender PLENTI GROUP has signed a It sold 55.8m shares, or 16.9% of issued CENTRAL CHINA SECURITIES has raised US$100m
corporate debt facility, the size of which is shares, at A$2.15 each, or an 11.2% discount from the sale of a three-year bond at 4%.
linked to the company’s securitised loan to the last close of A$2.42 on March15. The Reg S trade, which was priced at par,
portfolio. Boss Energy raised A$92.1m in tranche was initially marketed at 4.25%.
The facility from an unnamed Australian 1 and A$27.9m from tranche 2, which is The senior notes were issued by WENDING
credit fund will be initially drawn to A$18m subject to approval by shareholders in ZHONGYUAN and guaranteed by Central China
and available for two years, Plenti said in an April. Securities.
ASX filing on March 18. Concurrently, four directors have raised Central China International, CMB
“Securing this facility provides a cost- about A$5m in aggregate through a sell- International, CCB International, CNCB
effective, flexible and non-dilutive solution down of part of their shares, which had Capital, CMB Wing Lung Bank, China Galaxy
to funding our ongoing loan portfolio no impact on the proceeds raised by the International Securities (Hong Kong) and TF
growth,” said Daniel Foggo, Plenti’s CEO. company. International were the global coordinators.
“Consistent with Plenti’s general approach, Boss Energy is planning to raise a further They were also bookrunners and lead
this facility has been structured in an A$5m through a non-underwritten share managers with China Industrial Securities
innovative way, and provides us with much purchase plan which will run from March International, China International Capital
greater flexibility than more traditional 25 to April 7 at the same price. Corp, Shenwan Hongyuan (HK), Soochow
corporate debt funding structures.” Proceeds will be used to fund the Securities International, ICBC International,

Donghai International, Changjiang Securities morning that the price surge was likely The bank also priced a HK$1.2bn
(HK), Guoyuan Capital, Haitong International, due to the State Council announcing that it (US$153.3m) two-year Reg S note at par
Sheng Yuan Securities, CMBC Capital and ABC would ensure stability in the market. for a yield of 1.8%, inside 2.05% area,
International. The State Council did not reveal details through joint lead managers Bank of
or timelines for its plans, but its pro-market Communications, ABC, Bank of China, CCB
›SUNAC RATINGS DROP AGAIN message seemed to somewhat placate Asia, China Everbright Bank HK, CMB Wing
investors for at least the near term. Lung Bank, Guotai Junan International,
SUNAC CHINA HOLDINGS’ratings continue to HSBC, ICBC, SPDB HK and Standard
slide as the Chinese property developer ›BOCOM TAKES MULTI-PRONG ROUTE Chartered.
faces liquidity problems. A two-year Rmb2.8bn Dim Sum note
S&P on Thursday downgraded Sunac to BANK OF COMMUNICATIONS HONG KONG BRANCH, rated from BOCOM HK was also priced is par for
B– from BB–, after Fitch downgraded the A2/A–/A, on Monday priced US$993.3m- a yield of 3.2%, well inside initial 3.6% area.
company to B– from BB– on Tuesday. equivalent in a multi-currency foray that Joint leads were Bank of Communications,
S&P wrote that Sunac’s liquidity is “less tapped the market for short tenors. ABC, Bank of China, CCB Asia, China
than adequate” and market confidence in It sold US$400m three-year Reg S notes Everbright Bank HK, CICC, CLSA, CMB
the company is slipping quickly. at Treasuries plus 45bp, tightened sharply Wing Lung Bank, Credit Agricole CIB,
Sunac has about Rmb24bn (US$3.78bn) from an initial 85bp area. The 2.375% bonds HSBC, ICBC, SPDB HK and Standard
of offshore and onshore public bond were at reoffer price of 99.767 for a reoffer Chartered.
maturities coming in the next 12 months, yield of 2.456%. All the BOCOM HK notes are to be
including two US$600m notes due in Books for this tranche were over rated A2/A (Moody’s/Fitch) and will settle
June and August. S&P estimated that the US$1.3bn, including US$925m from lead on March 21. Proceeds will be used for
company had about Rmb13bn–Rmb14bn banks, when guidance tightened. working capital and general corporate
of accessible cash at the holding company Bank of Communications, Agricultural Bank needs.
level as of the end of 2021. of China, Bank of China, BOCOM International,
Sunac’s US dollar notes received a China Construction Bank Asia, China Everbright ›CHINA EDUCATION GRABS A DIM SUM
surprise bump in price following the Bank HK, CICC, China Merchants Bank, CLSA,
downgrades, with the June 2022 bond Credit Agricole CIB, Guotai Junan International, has priced
CHINA EDUCATION GROUP HOLDINGS
spotted at a cash price of 41.5 and the HSBC, ICBC, Industrial Bank HK, Shanghai Rmb500m three-year Dim Sum bonds at
August 2022 at 38 on Friday morning. Pudong Development Bank HK and Standard 99.302 to yield 4.25%.
Analysts at Lucror Analytics wrote on Friday Chartered were joint lead managers. The 4% senior unsecured trade is backed
Redco attempts to manage debt

Bonds Embattled company launches consent solicitation and purchase offer
Debt-laden Chinese developer REDCO sector will remain under pressure for the rest The offers will expire at 4pm London time
PROPERTIES GROUP has launched a consent of the year. on March 21. The consent fee will be paid on
solicitation and offered to purchase a chunk Investors have been offered a consent fee March 25, and the new notes will settle on
of its US dollar bonds. of US$2.50 for each US$1,000 of principal the same day.
The consent solicitation pertains to the of the 2024 bonds and Rmb25 for each Haitong International is the dealer
company’s US dollar 9.9% 2024 bonds Rmb10,000 of the 2023 notes. manager and Morrow Sodali is the
and its renminbi-denominated 10.5% 2023 For the offer to purchase, holders of information and tabulation agent.
notes. the April 2022 bonds may receive US$10 On Wednesday, Fitch downgraded Redco
The offer to purchase covers at per US$1,000 in principal amount, plus to C from CCC–. It had already downgraded
least US$177.276m of the company’s US$1,000 in principal of new March 2023 the company from B+ earlier this month.
US$196.974m April 2022 8% bonds, bonds, which pay a coupon of 8%. Fitch called the attempt to lengthen the
US$274.67m of its US$305.189m August August 2022 holders can opt to receive maturities a “distressed debt exchange”.
2022 11% notes and US$135m of its US$10 per US$1,000 in principal, plus The initial downgrade reflected Redco’s
US$150m May 2023 13% bonds, which are US$1,000 in principal of new August 2023 limited ability to repay its offshore bonds that
puttable in May this year. 11% bonds. are due in April and August, as well as an
The April 2022 bonds were trading around The May 2023 holders will receive US$10 onshore loan the company has due in March,
a cash price of 21.75 and the August 2022 per US$1,000 in principal, plus US$1,000 in Fitch wrote. Because access to the capital
notes around 19.5 on Thursday. principal of new March 2023 13% bonds. markets remains limited for Chinese property
The borrower is seeking to amend the Redco plans to redeem 5% in principal companies, Redco will need to use its own
events of default provisions through its amount of the 8% March 2023s, 11% August cash to make the payments, but it is unclear
consent solicitation. Redco noted in a stock 2023s and 13% March 2023s in April, July how much the company has available, Fitch
exchange filing that the ongoing Chinese and May, respectively. It will also redeem a said.
property crisis has cut off access to capital, portion shortly after that to the value of the At the end of February, S&P downgraded
and property sales have been dented. This accrued interest on the old bonds. Redco to B– from B, also citing the
has affected the company’s ability to address The minimum acceptance for the three company’s refinancing risks.
upcoming maturities, and Redco believes the bonds has been set at 90% each. MORGAN DAVIS

by a guarantee from Credit Guarantee and Country Garden said it will continue to solicitation which expired on March 11.
Investment Facility. The bonds will be rated repurchase and cancel its senior notes as In a statement to the Hong Kong stock
AA by S&P, in line with the guarantor. and when appropriate. exchange, Zhenro said it had received
Standard Chartered was the sole global valid instructions in favour of the consent
coordinator for the Reg S deal and joint ›ZHENRO GETS CONSENT proposals of more than the requisite
lead bookrunner and manager with Bank of majority of the total principal amount of
Communications, CMB Wing Lung, HSBC and ZHENRO PROPERTIES GROUP has received majority the perpetual notes.
UBS. votes from bondholders to waive potential Under the exchange offer, Zhenro said
Settlement is on March 22. Proceeds from breaches or defaults in its outstanding those who opted to swap existing notes
the Singapore-listed transaction will be notes. into new notes so far comprised investors
used for the acquisition of universities and/ A majority of investors also voted to holding US$43m or 86% of the total
or higher education institutions in China, exchange notes in five senior bonds due outstanding amount of March 2022 bonds
for the construction of a new campus for this year for new bonds due in March next issued via ZhenAn, US$192.4m or 88.1% of
Guangzhou College of Applied Science year. the April 2022 notes, Rmb1.57bn or 98.1%
and Technology and for working capital The issuer had sought approval from of the June 2022s, US$268.3m or 91.6% of
offshore. holders of a US$200m senior perp that was the August 2022s and US$211.86m or 89.7%
callable on March 5 to waive and forgive of the September 2022s.
›COGARD BUYS BACK MORE BONDS any default that might occur when the Zhenro said the expiration dates for the
company did not redeem the perp on the exchange offer and consent solicitation for
COUNTRY GARDEN HOLDINGS has repurchased call date, and allow it to maintain the these outstanding bonds had been extended
another US$9.6m of its 4.75% senior notes distribution rate at 10.25% until March to March 18.
due July 2022 and 4.75% senior notes due 2023, without any step-up.
January 2023. Zhenro on February 21 also sought
From March 4 to March 13, the Chinese waivers of breaches and defaults as SYNDICATED LOANS
property developer bought back US$1.6m well as proposed to exchange five of its
of the 2022s and US$8m of the 2023s. The offshore bonds due this year with a total of ›SHIMAO SEEKS TO AMEND SCHEDULE
notes will be cancelled. US$1.05bn outstanding for new bonds due
This brings the total repurchases of the in March 2023. Cash-strapped developer SHIMAO GROUP
2022s, 2023s and the 7.25% senior notes due No details were disclosed on the votes HOLDINGS is seeking to amend the repayment
April 2026 to US$45.7m since December 30. for the waiver proposal under the consent schedule and extend the final maturity
CICC HK gives up on floater

Bonds Investment bank goes for sizeable fixed-rate print as investors shy away from SOFR option
CHINA INTERNATIONAL CAPITAL CORP (HONG KONG) we barely saw any market orders.” with the Baa1/BBB+/BBB+ ratings of the
priced a US$600m three-year fixed-rate The demand for the FRN was weaker guarantor and keepwell provider.
bond on Monday, but dropped a floating-rate than anticipated. The issuer had lined up its The proceeds from the Hong Kong-listed
tranche it had offered in the morning. anchor orders, but had also counted on a trade will be used to repay debt, as well as
The senior fixed-rate notes were sold stronger market and demand from Western for working capital and general corporate
at 99.476 with a 2.875% coupon to yield accounts. purposes.
3.059%, or 105bp over Treasuries, inside Deal statistics were not available at CICC, Citigroup, Standard Chartered, Bank
initial guidance of 135bp. the time of writing, but the book reached of Communications, China Merchants Bank
The bonds offered some premium, as US$1.3bn, including US$616m from the and ICBC are the global coordinators. They
analysts at Nomura estimated fair value to be leads, when final price guidance was are also the bookrunners and lead managers
around 95bp over Treasuries. announced. alongside BNP Paribas, China Construction
CICC HK had marketed a three-year The orders had reached US$1.2bn, Bank, China Everbright Bank, China Citic Bank
FRN at the SOFR equivalent of 135bp over including US$855m from the leads, around International, China Minsheng Bank Hong
but the tranche was dropped before final noon, before the FRN portion was dropped. Kong branch, CNCB Capital, Industrial Bank
price guidance for the fixed-rate bonds was The deal was supported by family and Hong Kong branch and Yue Xiu Securities.
announced. friends, said the banker. Shanghai Pudong Development Bank
The floater was cut from the deal as there “They had a choice between doing two Hong Kong branch was moved to global
was not enough demand to support the smallish tranches or doing a bigger fixed,” coordinator from bookrunner during the day.
trade, said a banker on the transaction. said the banker of the final size. “US$600m ABC International was moved from global
“Asia has historically not been a big buyer of was a good outcome, and based on the book coordinator to bookrunner. China Galaxy
floaters. For bank treasuries and their anchors, they probably couldn’t have printed more if International was added as a bookrunner.
there’s a natural demand for fixed,” said the they wanted.” Agricultural Bank of China Hong Kong
banker. The anchor orders for CICC HK’s trade The Reg S deal was issued by CICC Hong branch, Bank of China, Bank of East Asia,
leaned toward the fixed-rate notes as well, she Kong Finance 2016 MTN and guaranteed by DBS and OCBC Bank were dropped from the
said. “With quite limited interest from Asia, and CICC (Hong Kong). CICC provided a keepwell. syndicate team.
[only] a handful of guys who can buy SOFR ... The bonds will be rated BBB+ by S&P, in line MORGAN DAVIS

of an existing US$1.35bn syndicated loan HK$5.53bn-equivalent four-year club loan offshore syndicated loan market for a debut
barely a month after winning unanimous from 15 banks, including Bank of China US$294m three-year loan.
consent from lenders to defer an (Hong Kong), CMB Wing Lung Bank, Hang CCB was also the sole MLAB of that
instalment repayment. Seng Bank, HSBC, Industrial Bank, Ping An deal, which attracted four other lenders
Consent from all lenders to the Bank, Shanghai Pudong Development Bank in syndication. It offered a top-level all-in
borrowing is required for the latest and United Overseas Bank as mandated of 250bp based on a margin of 220bp over
proposed changes. lead arrangers and bookrunners, according Libor.
The company is looking to extend the to Refinitiv LPC data. State-owned policy lender China
maturity of the loan to 2025 from 2023. Sino-Ocean Group’s majority shareholder Development Bank owns 54.98% of CNTD,
According to the proposed repayment is state-owned China Life Insurance. which develops large-scale new towns in
schedule, the company will make a 10% It is rated Baa3/BBB− (Moody’s/Fitch). the suburbs of China’s big cities.
instalment repayment upon signing of the
supplemental agreement. ›XINJIANG GOLDWIND CLOSES GREEN REFI ›PING AN LEASING RETURNS
Subsequent repayments will take place
via three unequal annual instalments: 20% Hong Kong and Shenzhen-listed XINJIANG Ping An International Financial Leasing is
(2023), 30% (2024), 40% (2025). GOLDWIND SCIENCE & TECHNOLOGY has closed a raising a US$400m three-year borrowing,
The amendment fee to be offered to US$270m four-year loan for refinancing returning to the loan market for its third
lenders is still to be finalised. after attracting eight banks in syndication. financing in nine months.
Last month, Shimao won unanimous Banco Santander and China Citic Bank China Construction Bank Hong Kong branch
consent from lenders on the same loan International were the mandated lead is the sole mandated lead arranger and
to defer the repayment of a US$202.5m arrangers, bookrunners, underwriters bookrunner of the bullet transaction,
instalment from February 9 to the end of and global green loan coordinators of the which offers an interest margin of 130bp
April. transaction, which pays an interest margin over SOFR.
The US$1.35bn-equivalent four-year loan of 210bp over Libor. MLAs committing US$50m or above
had closed with 14 lenders in August 2019. Xinjiang Goldwind is the guarantor, receive a top-level all-in pricing of 165bp
At signing, it comprised a US$837.85m while the borrowers are its subsidiaries via a 96bp fee, while lead arrangers coming
tranche and a HK$3.994bn (US$512m) PARQUE EOLICO LOMA BLANCA I, PARQUE EOLICO LOMA in for US$30m–$49m earn an all-in of
portion. HSBC was the mandated lead BLANCA II, PARQUE EOLICO LOMA BLANCA III, PARQUE 162bp via a 87bp fee.
arranger, bookrunner and coordinator of EOLICO LOMA BLANCA VI and PARQUES EOLICOS The all-in calculations include a 9bp
that borrowing. MIRAMAR. early-bird fee for banks committing on or
In January, the borrower extended the All five wind power projects of Goldwind before March 31.
maturity of a separate HK$10bn club loan in Argentina, acquired in 2017, have come The final deadline for commitments is
backing its residential development at the into commercial operation. The wind April 7.
Tai Wo Ping area of Hong Kong’s Kowloon farms are equipped with GW 3S smart PING AN LEASING HONG KONG HOLDINGS is
district. wind turbines, with a total of 109 units and the borrower, while parent Ping An
Shimao, which has put all its property 354.6MW installed capacity, according to International Financial Leasing is the
holdings up for sale to repay debt, has had Goldwind’s website. guarantor.
a helping hand from Shanghai municipal Xinjiang Goldwing is partially state- Proceeds will be used for general
authorities, Reuters reported on March 16. owned and China’s largest wind turbine corporate purposes, including debt
Twenty-seven of Shimao’s creditors manufacturer. refinancing.
were asked to maintain lending positions For full allocations, see www.ifre.com. Last June, the borrower obtained a
and to not publicly undermine Shimao’s US$700m three-year loan from 18 banks,
creditworthiness, the report said, citing a ›CHINA NEW TOWN TAPS NEW-MONEY LOAN including CTBC Bank, Deutsche Bank,
source who attended a creditor meeting. Standard Chartered and Sumitomo Mitsui
On March 3, Fitch downgraded Shimao Hong Kong-listed China New Town Banking Corp as the MLABs.
Group to CCC from B– on rising refinancing Development has returned to the market That facility paid a top-level all-in pricing
risk. That followed the Chinese company’s with a US$100m three-year new-money of 165bp via a margin of 135bp over Libor.
downgrade by Moody’s on February 23 to financing. In December, the company raised a
Caa1 from B2. China Construction Bank Hong Kong branch ¥17.5bn (US$137m) three-year loan that
is the sole mandated lead arranger and was increased from ¥15bn, after attracting
›SINO-OCEAN GROUP LOOKS AT REFI bookrunner of the facility, which can be four lenders in syndication.
increased to up to US$200m via a greenshoe
Property developer SINO-OCEAN GROUP HOLDING option. ›FOSUN HIGH TECH TAPS SEVEN LENDERS
has approached relationship banks for The bullet loan offers an interest margin
a loan of approximately US$700m for of 190bp over SOFR. SHANGHAI FOSUN HIGH TECHNOLOGY (GROUP) has
refinancing. MLAs taking US$30m or above will earn raised a Rmb1.528bn three-year loan from
The borrowing is expected to be a top-level all-in pricing of 220bp via a seven lenders.
completed as a self-arranged club. 90bp fee, while lead arrangers committing Hang Seng Bank, HSBC, Natixis, Societe
The company has a US$693m-equivalent US$10m–$29m receive an all-in of 210bp Generale and Standard Chartered are the
four-year club loan maturing in June, via a 60bp fee. mandated lead arrangers and bookrunners
according to Refinitiv LPC data. Hong Kong-registered CHINA NEW TOWN of the transaction, while Bangkok Bank and
Ten lenders participated in that loan, HOLDING is the borrower, while Hong Kong- Korea Development Bank came in as MLAs.
which offered an all-in pricing of 250bp listed China New Town Development and Funds will be used for general corporate
over Libor/Hibor. one of its subsidiaries are guarantors. purposes.
In June 2021, the company obtained a In April 2018, the borrower tapped the The borrower’s previous visit to the

loan market was in January 2019 for an Hong Kong in October 2019 via a HK$9bn in 2020. It posted a loss of Rmb2.8bn,
increased Rmb993m three-year loan. (US$1.15bn) IPO. compared with a Rmb1.1bn loss in 2020.
Hang Seng, HSBC, StanChart and SocGen Belle Fashion houses the footwear and Its investors include Sequoia Capital,
were the MLABs on that deal, which offered apparel businesses, with brands such as CICC, Shanghai Electric HK and Hangzhou
an all-in pricing of over 120% of the PBoC Belle, Staccato, Tata and Basto. For the nine State-owned Assets Management.
rate based on an interest margin of 118% of months ended November 30, 86.6% of its Apart from Leapmotor, Chinese EV
the benchmark. revenue came from the footwear business makers WM Motor and Hozon Auto are also
The borrower is a subsidiary of Hong and 13.4% from apparel. planning Hong Kong IPOs this year.
Kong-listed Fosun International, which As of November 30, it had 9,153 stores
is also in the market with a US$550m- across China, while revenue from online ›A SPAC FILES FOR HK IPO
equivalent three-year loan for refinancing. channels for the nine preceding months
BNP Paribas, China Bohai Bank Shanghai accounted for more than 25% of total A SPAC (HK) ACQUISITION,
a blank-cheque
Pilot Free Trade Zone branch, China revenue. company targeting consumer companies in
Citic Bank International, Commerzbank The company posted a net profit of China, has filed for a Hong Kong IPO.
Singapore branch, Hang Seng and Industrial Rmb2.3bn (US$362m) for the nine months Hong Kong-listed Arta TechFin, backed by
Bank Shanghai branch are the MLABs of to November 30, up 18% year on year. New World Development chief executive
that bullet transaction, which offers top- Adrian Cheng Chi-kong, owns 16.05% of the
level all-in pricing of 210bp, 180bp and ›CALB FILES IN HONG KONG SPAC. Other promoters are A SPAC (Asia)
190bp via interest margins of 165bp over Holdings and family office JVSakk Asset
the SOFR, 135bp over Euribor and 145bp Electric vehicle battery maker CALB has Management.
over Hibor for the US dollar, euro and Hong filed for a Hong Kong IPO with Huatai The deal could raise about US$150m,
Kong dollar pieces, respectively. International as sponsor. said people with knowledge of the matter.
IFR reported in January the deal could Haitong International is the sponsor.
›WUXI LONG CHEN RAISES RMB660M raise about US$1bn.
The company posted a net profit of ›ARRAIL WRAPS UP HK IPO
WUXI RONGCHENG ENVIRONMENTAL PROTECTION Rmb1.1bn in 2021, compared with a loss of
TECHNOLOGY (Wuxi Long Chen) has raised a Rmb18.3m in 2020. Chinese dental services provider ARRAIL
Rmb660m three-year term loan, according Established in 2015, CALB, or China GROUP has wrapped up a Hong Kong IPO of
to a filing from its Taiwan-listed parent Aviation Lithium Battery Technology, HK$680m despite the stock market rout.
Long Chen Paper. makes lithium-ion batteries that are used The company sold 46.5m shares at a
First Commercial Bank was the mandated in electric vehicles and other products. Its fixed price of HK$14.62 per share.
lead arranger and bookrunner of the term customers include GAC Aion, Changan Five cornerstone investors joined with a
loan, which attracted seven banks in Auto and Geely Automobile. total investment of US$65m or 75% of the
general syndication. Shenzhen-listed Sichuan Chengfei proceeds. They are Abax (US$25m), Harvest
The loan offers an interest margin of Integration Technology, in which Aviation (US$20m), Hudson Bay (US$10m), OrbiMed
30bp over the five-year loan prime rate, Industry Corporation of China (AVIC) is the (US$5m) and Modern Dental Group (US$5m).
which is currently at 4.6%. largest shareholder, owns 10% of CALB. The shares will start trading on March 22.
Lenders were offered a top-level upfront Asian EV companies from China to Morgan Stanley and UBS are the sponsors.
fee of 32bp. Vietnam are planning equity raises this The company posted a loss of Rmb464m
Funds are for working capital purposes. year, riding on increasing demand for for the six months to September 30,
Long Chen Paper is the guarantor. emissions-free transport and favourable compared with a Rmb188m loss a year
The borrower’s last onshore loan was government policies. earlier.
in May 2019 for a Rmb690m three-year South Korean EV battery maker Arrail operates the Arrail Dental and
facility, which pays a margin of 112.5% of LG Energy Solution in January raised Rytime Dental brands in China. Arrail
the PBoC rate. W12.8trn (US$10.8bn) from a Korean IPO, Dental operates 51 clinics and Rytime
For full allocations, see www.ifre.com. while Chinese lithium-ion battery giant Dental has seven hospitals and 53 clinics.
Contemporary Amperex Technology plans
a Rmb45bn follow-on. ›DEEP GLINT DEBUTS POORLY
EQUITY CAPITAL MARKETS
›LEAPMOTOR REVS UP HONG KONG IPO AI company BEIJING DEEP GLINT TECHNOLOGY
›BELLE STEPS BACK IN TIME closed underwater Thursday on its debut at
Electric-vehicle maker ZHEJIANG LEAPMOTOR Rmb37.46 a share against the issue price of
Footwear retailer BELLE FASHION is planning TECHNOLOGY has filed a Hong Kong IPO with Rmb39.49 after it completed a Rmb1.83bn
to raise about US$750m–$1bn from an IPO CCB International, CICC, Citigroup and JP Shanghai Star IPO.
this year, said people with knowledge of Morgan as sponsors. The shares plunged another 10% to
the matter. IFR reported in January the deal could Rmb33.75 on Friday afternoon.
The company filed for a Hong Kong IPO raise about US$1bn. The pre-profit company, which
on Wednesday with Bank of America and Founded in 2015, Leapmotor focuses on specialises in computer vision among other
Morgan Stanley as sponsors. the mid to high-end segment in China’s AI products and services, sold 46.2m shares,
Belle International, which owns sportswear new energy vehicle market with a price or 25% of the enlarged capital.
and footwear businesses, was taken private range of Rmb150,000–Rmb300,000. It The issue price is equivalent to a 2020 P/S
in 2017 by its private equity shareholders delivered 43,748 vehicles in 2021, a 444% of 30.10, higher than the average of 27.62
Hillhouse Capital and CDH Investments leap from 2020. of competitors Hong Kong-listed Sensetime
in a US$6.8bn deal. The company listed its Leapmotor’s revenue was Rmb3.06bn Group (50.76), Star-listed ArcSoft Corp (20.68)
sportswear unit Topsports International in in 2021, almost five times the Rmb616m and Hangzhou Arcvideo Technology (11.39).

Agricultural Bank of China has been its Securities Regulatory Commission on float which raised more than double the
top client for three years. Monday for the proposed overseas listing. original target of Rmb2.2bn.
Venture capital firms Sequoia Capital, Pagoda in 2020 filed to the CSRC for a The gains narrowed to 6.8% at Rmb185.82
Ceyuan Ventures and Zhen Partners have Hong Kong IPO but then changed its plan and when it closed.
invested in the company via private equity kicked off work with Minsheng Securities to The metal products producer sold 31.5m
rounds and held a combined 32.4% stake seek a listing on Shenzhen’s ChiNext instead. shares at Rmb173.98 each, which translates
prior to the offering. The A-share IPO has seen little progress. to a 2020 P/E of 63.05, higher than the
Proceeds will be used to upgrade systems Founded in 2001, Shenzhen-based Pagoda industry’s 54.07 in the last month.
and for R&D, marketing and sales, and had 80 million members and 5,000 stores Proceeds will be used to fund the
working capital. The original target was in China as of August 2021, according to its production and replenish working capital.
Rmb1bn. website. It posted a net profit of Rmb1.14bn for
The company posted a net loss of 2021, up 123%, on revenue of Rmb4.16bn, up
Rmb84.5m for Q1–Q3 2021, narrowing ›RECBIO GIVES A SHOT AT HK IPO 133%.
22.3% from a Rmb109m net loss a year Dongxing Securities is the sponsor.
earlier, on revenue of Rmb139m. Vaccine maker JIANGSU RECBIO TECHNOLOGY has
Haitong Securities is the sponsor. started pre-marketing a Hong Kong IPO of ›TWO DEBUTANTS TRADE UNDERWATER
around US$100m.
›DONGFANG PRECISION HIRES AVIC SEC Books are expected to open as early as Two Chinese companies which recently
this week with listing in late March. completed IPOs opened underwater on
Shenzhen-listed GUANGDONG DONGFANG CMB International, Citic Securities and their debuts on March 15 amid a sell-off in
PRECISION SCIENCE & TECHNOLOGY has hired AVIC Morgan Stanley are the sponsors. Chinese shares.
Securities as financial adviser for the spin- The company is developing 11 vaccines ISOFTSTONE INFORMATION TECHNOLOGY GROUP
off of SUZHOU PARSUN POWER MACHINE on the including an HPV vaccine and a Covid-19 closed at Rmb60.60, 16.9% below the issue
Shenzhen ChiNext board. vaccine. It posted a loss of Rmb247m for price of Rmb72.88 for its Rmb4.63bn
Parsun manufactures gasoline-powered the first quarter of 2021, compared to a Shenzhen ChiNext IPO.
and electric outboard motors, gasoline- Rmb44m loss a year earlier. The information technology services
powered water pumps, generators and Legend Capital owns 10.7% of the provider sold 63.5m shares, or 10% of the
other gasoline-powered products. company and Singapore’s Temasek enlarged capital.
The parent holds a 75% stake in the Holdings owns 2.7%. Meanwhile, ZHUHAI COMLEADER INFORMATION
company. SCIENCE & TECHNOLOGY closed at Rmb46, 11%
›SANYOU CHEMICAL TO SPIN OFF UNIT below the issue price of Rmb51.68, after a
›HEBANG BIOTECH TO DIVEST GLASS UNIT Rmb1.2bn Shanghai Star IPO. The company
Shanghai-listed TANGSHAN SANYOU CHEMICAL sells military telecommunication network
Shanghai-listed SICHUAN HEBANG BIOTECHNOLOGY INDUSTRIES plans to spin off SANYOU SILICON communication equipment. Great Wall
plans to spin off SICHUAN WUJUN SOLAR on the INDUSTRY on an undisclosed A-share board. Securities was the sponsor.
main board of the Shanghai Stock Exchange. The parent owns 95.07% of the proposed The Shanghai Composite Index fell
Sichuan Wujun Solar produces glasses for spin-off. 4.95% to 3,063.97 on Tuesday, and the
photovoltaic equipment. It posted a profit of Sanyou Silicon posted a net profit of Growth Enterprise Index was down 2.55%
Rmb492m on revenue of Rmb1.39bn in 2021. Rmb693m on revenue of Rmb3.44bn in 2021. to 2,504.78.
The parent holds 88.4% of the spin-off. The proposal still needs approval from iSoftstone’s issue price was equivalent to
Oriental Securities is working on the deal. shareholders and regulators. a 2020 P/E of 27.9, lower than the average
industry P/E of 56.5 in the last month, and
›ORIENT SEC RIGHTS ISSUE APPROVED ›SHANGHAI PHARMA FOLLOW-ON CLEARED also lower than the average P/E of 37.1 of
six competitors including Hong Kong-listed
Hong Kong and Shanghai-listed ORIENT Hong Kong and Shanghai-listed SHANGHAI Chinasoft International and Shanghai-listed
SECURITIES has won the final written approval PHARMACEUTICALS has passed a hearing with the Neusoft.
from the China Securities Regulatory China Securities Regulatory Commission for a Proceeds will be used to build and
Commission for an up to Rmb16.8bn rights Rmb14.4bn private share placement. enlarge delivery centres in nine Chinese
issue. It will offer up to 853m shares in total cities, expand IT services, set up an R&D
The brokerage will sell up to 1.79bn to two strategic investors, Yunnan Baiyao centre, upgrade service platforms and
A-shares and 308m H-shares. Group and Shanghai Tandong Enterprise internal services, and replenish working
It has earmarked Rmb6bn of the proceeds Consulting Service, at Rmb16.87 each. capital. The original target was Rmb3.5bn.
for investment banking, with the remainder Yunnan Baiyao will buy 666m shares and It posted a net profit of Rmb454m on
to be invested in its wealth management and Tandong the rest. revenue of Rmb7.63bn for H1 2021.
securities finance businesses as well as for The company will use Rmb3bn of the iSoftStone’s main clients include Huawei,
sales and working capital. proceeds to repay debts and the rest for Alibaba, Tencent, Baidu and Bank of China.
CICC and Orient Securities are joint sponsors. working capital. Its income from Huawei represented more
Essence Securities is the sponsor. than 53% of annual revenue from 2017–2020.
›PAGODA PLANS HONG KONG LISTING China Securities was the sponsor.
›TENG YUAN COBALT SURGES ON DEBUT
Chinese fruit retail chain PAGODA INDUSTRIAL ›ZHESHANG BANK RIGHTS GET GREEN LIGHT
GROUP is planning to raise at least US$500m Shares in GANZHOU TENG YUAN COBALT NEW
from a Hong Kong IPO this year, said people MATERIAL opened up 25% to Rmb217.50 on Hong Kong and Shanghai-listed CHINA ZHESHANG
with knowledge of the matter. Thursday on their debut on the Shenzhen BANK has been approved by the China Banking
The company filed to the China ChiNext board, following a Rmb5.48bn and Insurance Regulatory Commission for an

COUNTRY REPORT HONG KONG
up to Rmb18bn rights issue. The proposal still needs approval from Standard Chartered is the ESG coordinator.
The local bank will offer up to 5.01bn shareholders and regulators. The dual-currency borrowing pays
A-shares and 1.37bn H-shares on a 3-to-10 interest margins of 175bp over Euribor and
basis. ›KELUN PHARMACEUTICAL SELLING CB 240bp over SOFR for the euro and US dollar
Proceeds will be used to replenish core portions, respectively.
Tier 1 capital. Shenzhen-listed SICHUAN KELUN PHARMACEUTICAL MLAs committing €40m or US$45m and
Zhejiang Provincial Financial Holdings opened subscription for a Rmb3bn six-year above receive a top-level all-in pricing of
owns a 12.49% stake and has committed to convertible bond on March 18. 225bp and 290bp for the euro and US dollar
subscribe to its full entitlement. It is the The initial conversion price for the CB, tranches respectively via a participation fee
second biggest shareholder in the bank rated AA+ by China Chengxin Credit Rating of 50bp.
behind HKSCC Nominees’ 21.4% holding. Group, is Rmb17.11. Lead arrangers taking €30m–€39m or
The bank posted a net profit of The initial coupon is 0.2% in year one, US$35m–$44m earn all-ins of 215bp and
Rmb6.99bn on revenue of Rmb25.9bn for stepping up each year until it reaches 2% in 280bp respectively via a fee of 40bp.
H1 2021. year six. Arrangers coming in for €15m–€29m or
The proposal still needs approval from The company plans to use the proceeds US$18m–$34m are offered all-ins of 210bp
shareholders and the China Securities for production, IT services, and working and 275bp via a fee of 35bp, while lead
Regulatory Commission. capital. managers committing €15m or US$18m
Changjiang Financing Service is the sponsor. and below receive 205bp and 270bp via a
›CHINA GALAXY SEC GETS GREEN LIGHT fee of 30bp.
Commitments are due by April 19, with
Hong Kong and Shanghai-listed CHINA GALAXY signing slated for May 17.
SECURITIES has won the final written approval Funds will be used to finance the exports
from the China Securities Regulatory HONG KONG of Turk Eximbank’s clients.
Commission for a Rmb7.8bn six-year In November last year, Turk Eximbank
convertible bond. raised a €558m-equivalent one-year
Proceeds will be used for its equities, SYNDICATED LOANS facility.
bond and precious metal investment Mizuho Bank was the mandated lead
business, the capital intermediary business, ›FAR EAST HORIZON IN TALKS FOR REFI arranger and bookrunner of that financing,
investment banking and working capital. which offered top-level all-ins of 190bp
The original target was Rmb11bn. Hong Kong-listed financial services and 230bp based on margins of 145bp over
The brokerage posted a net profit of company FAR EAST HORIZON is in talks with Euribor and 185bp over Libor for the euro
Rmb7.4bn for Q1–Q3 2021, up 30.9%, relationship banks for a loan of around and dollar tranches, respectively.
on revenue of Rmb26.1bn. Income from US$500m.
investment banking totalled Rmb181m for Funds will be used to refinance a US$1bn- ›BEIJING CAPITAL RAISES GREEN CLUB
H1 2021, down 15.9%. equivalent three-year loan the borrower
Zheshang Securities and China Securities are raised in June 2019. Shanghai-listed water utility company
joint sponsors. China Everbright Bank Hong Kong Beijing Capital Eco-Environment
branch, CMB Wing Lung Bank, CTBC Bank, Protection Group, formerly known as
›FLAT GLASS GROUP CB CLEARS HEARING Hang Seng Bank, MUFG and Westpac Beijing Capital, has obtained a HK$1.8bn
Banking Corp were the mandated lead (US$230m) one-year green facility
Hong Kong and Shanghai-listed FLAT GLASS arrangers and bookrunners of that following a similar smaller borrowing
GROUP has cleared a hearing with the China borrowing, which paid a top-level all-in earlier in the year.
Securities Regulatory Commission for a pricing of 160.18bp based on an interest Bank of China (Hong Kong), China
Rmb4bn six-year convertible bond. margin of 140bp over Libor or Hibor and an Construction Bank (Asia) and HSBC are the
The glass producer plans to use the average life of 2.775 years. lenders to the borrowing, which closed as
proceeds for solar equipment production, Late last year the borrower completed an a club.
photovoltaic power station construction, increased US$575m three-year loan. BEIJING CAPITAL (HONG KONG), a unit of Beijing
technical improvement and working China CITIC Bank International, Emirates Capital Eco-Environment Protection, is
capital. NBD Bank, First Abu Dhabi Bank and MUFG the borrower, while the parent is the
The company completed a Rmb2.5bn were the MLABs of the transaction, which guarantor.
private share placement in January 2021. offered a top-level all-in of 185.05bp via a Funds are to refinance a HK$1.8bn three-
Guotai Junan Securities is the sponsor. margin of 140bp over Libor and an average year term green loan the borrower raised
life of 2.775 years. in March 2019. That deal pays an interest
›HUNAN CHANGYUAN LICO PLANS CB Sinochem Group owns about 23% of the margin of 140bp over Hibor.
Hong Kong-listed borrower, which is rated The borrower’s most recent visit to the
Star-listed HUNAN CHANGYUAN LICO plans to raise BBB− by S&P. loan market was in January for a HK$1.3bn
Rmb3.25bn from a six-year convertible one-year green club loan.
bond. ›TURK EXIMBANK SEEKS ESG-LINKED LOAN Agricultural Bank of China Hong Kong
Proceeds will be used to expand branch and HSBC were the lenders to that
production of lithium battery materials and TURK EXIMBANK has launched a transaction.
replenish working capital. €450m-equivalent (US$496m) one-year Beijing Capital is engaged in water
The company completed a Rmb2.73bn sustainability-linked loan, barely four projects investment, water business chain
IPO in August 2021 and posted a net profit months after raising a larger borrowing. integration and value enhancement,
of Rmb487m on revenue of Rmb4.54bn for MUFG and The Commercial Bank are the as well as innovative environmental
Q1–Q3 2021. bookrunners and coordinators, while technologies.

›GUANGDONG INV SIGNS BILATERAL Hong Kong-based unit of Japanese leasing Riva, and owns six shipyards in Italy.
company Mitsubishi HC Capital, has signed Approximately 68% of proceeds are slated
Hong Kong-listed Guangdong Investment a HK$500m two-year debut sustainability- for expansion of its portfolio and improving
has raised HK$1.3bn through two 360-day linked loan. operations, with new super yacht flagship
bilateral term loans, according to stock MUFG is the sole lender of the loan that models to be developed. The rest of the
exchange filings on March 11 and March 17. was signed on March 14, the bank said in a proceeds will go towards ancillary services,
GUANGDONG LAND HOLDINGS, a subsidiary of statement. including yacht brokerage, chartering and
Guangdong Investment, is the borrower on Funds are for working capital. management services.
the loans of HK$1bn and HK$300m. Hong Kong Quality Assurance Agency The company posted a net profit of €32m
Funds are to finance the investment provided the third-party evaluation for the SLL. for the first nine months of 2021, almost
projects of GD Land, refinancing, and six times the €5.7m profit a year earlier.
general working capital purposes. Chinese conglomerate Weichai owns
Guangdong Holdings, the controlling EQUITY CAPITAL MARKETS 86.1% of the company, and F Investments,
shareholder of Guangdong Investment, has controlled by Piero Ferrari, owns 11.1%.
to own at least 51% of the latter throughout ›FERRETTI SETS SAIL FOR HONG KONG Pre-marketing ran until Friday.
the tenor of the facility and also remain Scheduling on the bookbuild has not been
ultimately under the control of the Italian luxury yacht maker FERRETTI has confirmed but is expected to last less than
Guangdong provincial government. started pre-marketing for an all-primary two weeks, most likely around a week and
Guangdong Investment has to remain the Hong Kong IPO of about US$300m that a half, suggesting pricing around March 30.
single largest shareholder of GD Land and could value the company in the region of CICC is the sponsor for the Hong Kong
hold not less than 50% of the latter. US$1bn. float and a joint global coordinator
Guangdong Holdings currently owns The float is expected to comprise around alongside BNP Paribas and Intesa Sanpaolo.
56.49% of Guangdong Investment, which in 25% of the company. Having a Chinese majority shareholder
turn holds a 73.82% stake in GD Land. Ferretti, part-owned by the Ferrari provided the impetus for a Hong Kong
In May last year, GD Land raised a family, attempted a €174m Milan IPO in listing and it is believed there was no desire
HK$3bn three-year bilateral term loan. 2019 but a mismatch between the valuation to attempt a European listing.
Guangdong Investment is an investment expectations of the market and the selling There had been strong feedback from
holding company mainly engaged in water shareholders prevented the deal from Asia, where there is a long list of customers
distribution and sewage treatment. happening. Ferretti’s previous private for the company’s yachts, for a local
equity owners had also fruitlessly tried to offering. A desire to attract money from the
›MITSUBISHI HC CAPITAL UNIT DEBUTS IPO the business in 2006 and 2008. region that would not usually participate in
The company produces vessels under a European deals in size made Hong Kong an
MITSUBISHI HC CAPITAL MANAGEMENT (CHINA), the variety of brands, including Pershing and obvious destination.
HK’s first SPAC makes weak debut

Equities New product sees extremely thin trading, due partly to absence of retail investors
Shares in AQUILA ACQUISITION CORP, Hong Kong’s investment tool,” said one of them. more important role in fueling the aspirations
first SPAC IPO, made a lacklustre debut on Hong Kong’s decision to bar retail of the companies of tomorrow.”
Friday with the stock only seeing its first trade investors from participating in blank-cheque After Aquila, nine other SPACs are lining
on the exchange in the afternoon session. companies’ IPOs or buying the shares in the up for Hong Kong IPOs. They are mainly
About 210,000 shares changed hands at secondary market also affected trading. backed by the asset management arms of
HK$9.70 each, 3% below the issue price of “Hedge funds, the main buyers of SPAC Chinese lenders, as well as private equity firms
HK$10, at 2:26pm. IPOs, normally would like retail investors and billionaires, and aim to invest in China’s
There was no trading on the exchange in the to participate so as to generate sufficient technology, healthcare and consumer sectors.
morning session as bids and offers were too far trading liquidity,” said another banker. Aquila sold 100m shares at HK$10 each.
apart. In the morning, two trades were crossed Aquila attracted 99 investors for its Every two shares come with a warrant,
off the exchange at substantially lower prices, HK$1bn (US$128m) float. Among them, 40 exercisable at HK$11.50.
which is unusual for an IPO. Around 1.05m are institutional professional investors who in It plans to use the proceeds to invest in
shares were crossed at HK$8.88 each and total took around 75% of the deal. new economy sectors such as green energy,
735,000 shares at HK$8.38. Most of the deal went to Chinese hedge life sciences and advanced technology and
Challenging market conditions, no retail funds, Chinese private bank accounts and manufacturing.
participation and unfamiliarity with a new other Chinese investors. There was also China Merchants Bank-backed CMB
product explain the uneventful debut, participation from global hedge funds. International Asset Management and AAC
according to bankers working on the IPOs of Welcoming Hong Kong’s first SPAC listing, Mgmt Holding are the promoters.
other special purpose acquisition companies. Hong Kong Exchanges and Clearing’s CEO CMB International and Morgan Stanley
“Markets have been extremely volatile and Nicolas Aguzin said: “The introduction of were the joint sponsors and joint global
the recent sell-offs have dragged the valuations Hong Kong SPAC listings is an exciting coordinator with BNP Paribas. The three
of many large caps to a very attractive level. development for HKEx. It adds a new route banks were also joint bookrunners with
It’s natural for investors to buy into something to market for issuers, further diversifies our Yuexiu Securities.
they are familiar with instead of trying a new listing offering and helps us to play an even FIONA LAU

COUNTRY REPORT INDIA
three-month treasury bills, which currently three-year bonds at 6.3%, according to a

yield 3.74%. The initial coupon is fixed filing on BSE.
INDIA at 6.85% and will be payable and reset The non-bank lender was eyeing Rs1bn
quarterly. plus a greenshoe amount of Rs5.75bn.
Delhi-Mumbai Expressway Project, or Crisil and Care have assigned AAA ratings
DEBT CAPITAL MARKETS DME Development, is a special purpose to the senior secured bonds.
vehicle created by the NATIONAL HIGHWAYS
›BHARAT LAUNCHES CONSENT EXERCISE AUTHORITY OF INDIA to construct one of the ›HOUSING FINANCIERS SELL FLOATERS
largest infrastructure projects in India.
BHARAT PETROLEUM is seeking approval from The eight-lane, 1,277km high-speed Housing finance companies ADITYA BIRLA
investors holding its 4.625% 2022s, 4% corridor, will connect the north to the west HOUSING FINANCE and GIC HOUSING FINANCE have
2025s and 4.375% 2027s to amend certain and southern parts of the country. raised a combined Rs5.65bn from floating-
terms that will clear the way for a proposed Care, Crisil and India Ratings have assigned rate bonds, according to a filing on BSE.
amalgamation of two subsidiaries. AAA ratings to Delhi-Mumbai Expressway, Aditya Birla Housing Finance sold
The consent solicitation, launched reflecting the financial support from NHAI. Rs3.4bn from three-year notes. The bonds
on March 11, asks bondholders to are issued at a spread of 181bp over the
approve revisions to terms such that the ›ASHOK LEYLAND RAISES SMALL TRANCHE three-month treasury bill. The initial
amalgamations will not constitute an event coupon is fixed at 5.57%.
of default, and to instruct the bond trustees ASHOK LEYLAND has raised Rs2bn from five- Icra and India Ratings have assigned a
to vote in favour of the proposals at the year non-call three bonds at 7.3%, according AAA rating to the bonds.
creditor meetings. to a filing on NSE. GIC Housing Finance printed Rs2.25bn
Bharat Petroleum is in the midst of Icra has assigned a AA rating to the from floating-rate bonds due October 20
folding wholly owned subsidiaries Bharat secured bonds. 2023. The bonds are issued at a spread of
Oman Refineries and Bharat Gas Resources Kotak Mahindra Bank is the arranger. 300bp over the three-month treasury bill.
into the company. The coupon will step up by 25bp for The initial coupon is fixed at 6.77%. It was
Under the consent exercise, a quorum every notch downgrade below AA–. eyeing Rs1bn plus a greenshoe of Rs1.25bn.
of creditors holding over 50% of the If the bonds are downgraded to A– or Crisil and Icra have assigned a AA+ rating
outstanding notes is required for the below, bondholders will have the right to to the bonds.
creditor meeting to take place. The accelerate payments, including accrued InCred Capital Wealth Portfolio Managers is
resolutions will be passed if more than 75% interest and principal, within 30 days from the arranger.
vote in favour at the meeting. such a downgrade.
Noteholders who submit votes by March On June 25 2020, the issuer raised Rs2bn ›INDIA FIRST LIFE EYES SUB DEBT
24 to pass the resolutions will receive a fee from three-year bonds at 7.65%.
of US$1 per US$1,000 principal amount of plans to raise
INDIAFIRST LIFE INSURANCE
each of the 2022s, 2025s and 2027s. No fee ›ASHOK LEYLAND SELLS FIVE-YEAR BONDS Rs1.25bn from 10-year non-call five
will be paid if noteholders vote in favour unsecured subordinated bonds at 8.4%,
after that early deadline. The consent ASHOK LEYLAND has raised Rs2bn from five- according to market sources.
solicitation ends on March 30. year non-call three bonds at 7.3%, according Care and Icra have assigned a AA rating
Citigroup and HSBC are solicitation agents to a filing on NSE. to the notes.
while Morrow Sodali is information and Icra has assigned a AA rating to the Trust Investment Advisors is the arranger.
tabulation agent. secured bonds. The issuer has asked investors to place
Kotak Mahindra Bank is the arranger. bids on NSE’s electronic bidding platform
›DME ATTRACTS STELLAR DEMAND The coupon will step up by 25bp for on March 22.
every notch downgrade below AA–. It is yet to make an official
DELHI-MUMBAI EXPRESSWAY (DME) has printed If the bonds are downgraded to A– or announcement on the planned bond sale.
Rs50bn (US$653m) debut 15-year floating- below, bondholders will have the right to
rate notes that were covered more than accelerate payments, including accrued ›INDIABULLS FILES FOR RETAIL BONDS
20 times, according to data on National interest and principal, within 30 days from
Securities Depository Limited. such a downgrade. INDIABULLS HOUSING FINANCE has filed a draft
Investors are keen on floating-rate bonds On June 25 2020, the issuer raised Rs2bn shelf prospectus with the market regulator
as they expect interest rates to rise in the from three-year bonds at 7.65%. to raise up to Rs14bn from a public issue of
near term. bonds, according to a filing on BSE.
“There was a mad rush for the bidding ›CITICORP FINANCE PRINTS SHORT TENOR Edelweiss Financial Services, AK Capital
of DME bonds as the total number of bid Services, IIFL Securities and Trust Investment
amount crossed over Rs1trn for an issue CITICORP FINANCE INDIA has
raised Rs5.25bn Advisors are the arrangers for the deal.
size of just Rs50bn,” said Venkatakrishnan from bonds due March 29 2024 at 5.5%, Brickwork and Crisil have assigned
Srinivasan, bond market veteran and according to a filing on NSE. respective ratings of AA+ and AA ratings to
founder of Rockfort Fincap, a financial It was eyeing Rs500m plus a greenshoe the bonds.
services company. of Rs7bn.
DME was targeting a base size of Rs10bn Crisil has assigned a AAA rating to the ›LIC HOUSING EYES JUMBO DUAL-TRANCHER
and a greenshoe of Rs40bn in a separately bonds.
transferable redeemable principal part plans to raise up to R80bn
LIC HOUSING FINANCE
format. The notes will be redeemable from ›HDB FINANCIAL SEALS THREE-YEAR PRINT from a two-part bond offering, according to
years six to 15. market sources.
The notes were issued at 311bp over HDB FINANCIAL SERVICES has raised Rs4bn from The housing finance company is eyeing

Rs5bn plus a greenshoe of Rs55bn from Uttar Pradesh’s five power distribution The non-banking financial company
10-year bonds and Rs7.5bn plus a Rs12.5bn companies, known as discoms. had sent a request for proposals late last
greenshoe from 39-month bonds. It is eyeing Rs20bn plus a greenshoe year for a yen borrowing of up to US$1bn-
The issuer is seeking bids on the NSE’s of Rs60bn in separately transferable equivalent.
electronic bidding platform on March 21. redeemable principal part format. The In January IRFC raised US$500m from a
Crisil and Care have assigned a AAA bonds will be redeemable in three to 10 10-year 144A/Reg S green bond priced at
rating to the bonds. years. Treasuries plus 185bp.
The non-bank lender is yet to make an India Ratings and Crisil are expected to The latest loan is significantly larger than
official announcement on the planned assign a A+ (credit enhancement) rating to IRFC’s recent yen loans.
bond sale. the bonds in light of an irrevocable guarantee Last year, the financing unit of India’s
by the state government of Uttar Pradesh. Ministry of Railways mandated SMBC on a
›NEEPCO TO RAISE EIGHT-YEAR BONDS UPPCL is likely to seek bids in the week US$325m-equivalent 10-year term loan.
starting March 21. It followed a US$300m-equivalent 10-
NORTH EASTERN ELECTRIC POWER CORPplans “The bonds will be issued at a high single year yen borrowing in 2020 that attracted
to raise Rs2bn from eight-year bonds, digit yield,” said a source close to the plans. German state-owned development bank
according to market sources. Trust Capital, AK Capital and Tip Sons KfW in senior syndication. Original MLABs
It is eyeing Rs1bn plus a greenshoe of the Financial Services are the arrangers. State Bank of India and SMBC had pre-
same amount. UPPCL last raised Rs54bn from rupee funded the deal, committing the equivalent
Icra and India Ratings have assigned a bonds in March 2018 which were priced of US$150m apiece.
AA+ rating to the unsecured bonds. at around 10.15%. The bonds comprised The borrowing offered top-level all-in
The issuer has asked investors to place nine series of two to 10 years at a quarterly pricing of 100.3bp in general syndication
bids on BSE’s electronic bidding platform interest. based on a margin of 93.5bp over yen Libor
on March 22 from 11:30am to 12:30pm The issuer is yet to make an official and a remaining life of 9.5 years.
India. announcement on the planned bond sale. IRFC also raised large US dollar loans
NEEPCO is yet to make an official last year. In March, it tapped SBI for two
announcement on the planned bond sale. ›VADODARA TO SELL MUNI BONDS bilateral loans – a US$1bn 10-year facility
and a US$2bn 7.5-year borrowing, according
›NUCLEAR POWER CORP SEEKS BIDS VADODARA MUNICIPAL CORP plans to raise Rs1bn to Refinitiv LPC data.
from five-year unsecured bonds, according IRFC funds the acquisition of
NUCLEAR POWER CORPORATION OF INDIAplans to market sources. rolling stock assets, leasing of railway
to raise Rs36.75bn from 15-year bonds, The coupon will be payable semi- infrastructure assets, and lending to other
according to market sources. annually. entities under the Ministry of Railways. It is
It is eyeing Rs20bn plus a greenshoe of Crisil and India Ratings have assigned rated Baa3/BBB−/BBB−.
Rs16.75bn. AA and AA+ provisional ratings to bonds of
Icra and India Ratings have assigned a Vadodara, which is located in the western ›ASK LBO LOAN DRAWS STRONG RESPONSE
AAA rating to the unsecured bonds. Indian state of Gujarat.
The state-owned issuer is seeking bids on It is seeking bids on BSE’s electronic A US$180m five-year loan backing private
NSE’s electronic bidding platform on March bidding platform on March 24 from 11am equity giant Blackstone’s planned acquisition
23 from 11:30am to 12:30pm India time. to 12pm India time. of a controlling stake in Indian asset and
It is yet to make an official SBI Capital Markets is the arranger. wealth management firm ASK INVESTMENT
announcement on the planned bond sale. The issuer is yet to make an official MANAGERS has attracted a strong response with
announcement on the planned bond sale. 11 banks joining in general syndication.
›SHRIRAM ISSUES FLOATING-RATE NOTES All lenders joining in general syndication
are Taiwanese banks and accounted for
SHRIRAM TRANSPORT FINANCE hasraised SYNDICATED LOANS US$115m, or around 64% of the final size.
Rs2.5bn from two-year floating-rate bonds, Deutsche Bank, Investec and Nomura
according to a filing on NSE. ›IRFC TAPS MEGA-BANKS FOR YEN LOAN were the mandated lead arrangers and
The commercial vehicle financier was bookrunners of the transaction, which
eyeing Rs2.5bn plus a greenshoe of Rs7.5bn. State-owned INDIAN RAILWAY FINANCE CORP offered a top-level all-in pricing of 374.51bp
The notes are issued at a spread of 311bp has agreed a yen loan of up to US$1.1bn- via an opening interest margin of 349bp
over three-month treasury bills, which equivalent from the three Japanese over Libor and an average life of 4.9 years.
currently yield 3.77%, and will be reset mega-banks. Funds are to back Blackstone’s leveraged
quarterly. The initial coupon is fixed at Mandated lead arrangers and buyout of a 71.25% stake in ASK.
6.25%. bookrunners Mizuho Bank and MUFG have Blackstone affiliate BCP TOPCO XII will
Care has assigned a AA+ rating to the committed US$225m-equivalent each, acquire the stake from Advent International
senior secured bonds. while fellow MLAB Sumitomo Mitsui Banking and ASK Group’s founders.
Deutsche Bank is the arranger for the deal. Corp’s allocation is US$650m. For full allocations, see www.ifre.com.
The loan is split into a US$400m-
›UPPCL PLANS JUMBO BOND SALE equivalent seven-year tranche and a ›GLENMARK PHARMA BAGS DEBUT SLL
US$700m-equivalent 10-year portion paying
UTTAR PRADESH POWER CORPORATION LIMITED respective interest margins of around 98bp GLENMARK PHARMACEUTICALS has signed a
(UPPCL) plans to raise up to Rs80bn from a and 110bp over Tonar. US$228m debut sustainability-linked loan
bond sale, according to sources close to the The loan was signed on March 11 and is in a short timeframe of slightly over a
plans. expected to be launched into syndication in month, paying significantly less than the
UPPCL is the holding company for the coming weeks. borrowing it is refinancing.

COUNTRY REPORT INDONESIA
Bank of America was the sole mandated Madagascar, Niger, the Republic of the The IPO comprises a primary component
lead arranger, bookrunner, underwriter and Congo and Zambia. of Rs2bn and 8.5m secondary shares.
lead SLL structuring agent of the borrowing, Last April, Airtel Africa signed a Controlling shareholders Venkatraman
which attracted nine other banks that were US$500m four-year borrowing with a group Srinivasan and Kaushik Srinivasan are
scaled back due to oversubscription. of relationship banks. among the vendors.
MUFG was also MLAB and co-SLL Bank of America, BNP Paribas, Citibank, Revenue in the year to March 31 2021
structuring agent. HSBC, JP Morgan, Standard Chartered and was Rs1.3bn, up 8.3% from Rs1.2bn in
Syndication was launched soon after the two Indian relationship banks – Axis Bank FY2020. Net profit rose 35% to Rs311.8m
Lunar New Year holidays in early February and Kotak Mahindra Bank – provided the from Rs230.2m.
and signing with all lenders took place on revolving credit facility and term loans. eMudhra is the country’s largest licensed
March 14. Proceeds were to be used to partially certifying authority and provides digital
Around the time of the launch, Mumbai- refinance the group’s €750m (US$831m) signature certificates.
based Glenmark posted strong results for bond due in May 2021. IIFL Securities, Indorient Financial and Yes
the fourth quarter of 2021, with Ebitda Airtel Africa, majority owned by India’s Securities are the lead managers.
jumping 30.8% to Rs6.93bn (US$91m) Bharti Airtel, is listed on the London Stock
compared with Rs5.3bn a year earlier. Exchange and the Nigerian Stock Exchange. ›KALPATARU HIRES IPO BANKS
Revenues rose 13.9% to Rs31.73bn from It provides services in 14 countries across
Rs27.87bn. sub-Saharan Africa. Property developer KALPATARU has hired
The SLL has a five-year door-to-door Axis Capital, ICICI Securities, JM Financial and
maturity and an average life of 4.5 years. Nomura to work on a US$200m–$300m
The interest margin is 175bp over EQUITY CAPITAL MARKETS domestic IPO, people with knowledge of
SOFR, which decreases by 2.5bp if the the transaction said.
manufacturer of generic drugs and ›NAVI FILES FOR IPO Only primary shares will be sold.
pharmaceutical ingredients meets both Kalpataru is part of the Kalpataru Group
sustainability metrics relating to emissions Digital financial services company NAVI which has interests in real estate, power
reduction and water consumption. TECHNOLOGIES has filed for a domestic IPO of transmission, logistics and engineering.
Banks were invited to join as MLABs with up to Rs33.5bn (US$437m). Chairman Mofatraj P Munot is the
commitments of US$30m–$50m for a top- Only primary shares will be sold. The founder of the company.
level all-in pricing of 195bp via upfront fees company is planning a pre-IPO share sale
of 90bp, while MLAs were offered an all-in of up to Rs6.7bn and, when completed, the
of 187.5bp via fees of 56.25bp. IPO size will be reduced accordingly.
Proceeds will refinance a US$182.5m Revenue in the year to March 2021 rose
syndicated loan closed in November 2020 150% to Rs1.4bn from Rs559.5m in FY2020. INDONESIA
that attracted five banks other than MLABs Net profit was Rs711.9m compared with a
Barclays and ING Bank. net loss of Rs80.7m.
The 3.5-year amortising loan paid a top- Axis Capital, Bank of America, Credit Suisse, DEBT CAPITAL MARKETS
level all-in of 358.33bp based on a margin Edelweiss and ICICI Securities are the lead
of 315bp above Libor and a three-year managers. ›SAKA ENERGI INCREASES BUYBACK
average life. Chairman Sachin Bansal is the
In March last year, Glenmark obtained controlling shareholder. SAKA ENERGI INDONESIAhas increased the
a US$40m loan from International Finance amount of repurchases of its outstanding
Corp to boost its generic drug production ›RUCHI SOYA TO LAUNCH FOLLOW-ON 4.45% 2024 bonds to US$220m from a
capacity under the multilateral agency’s previous target of US$200m.
US$8bn fast-track Covid-19 facility. Edible oil producer RUCHI SOYA INDUSTRIES will As of March 11, investors holding a total
For full allocations, see www.ifre.com. open books for a follow-on offer of up to of US$377.578m of the notes had applied to
Rs43bn on March 24–28. sell back to the issuer under a tender offer.
›AIRTEL AFRICA DIALS FOR US$194M LOAN The offer price is likely to be disclosed on The tender offer officially ends on March
March 21. 25, but since the targeted repurchase
Telecommunications and mobile money In 2019 Patanjali Ayurved Group acquired amount has been reached, no other
services group AIRTEL AFRICA is in talks with 98.9% of the company under an insolvency submissions will be accepted.
the International Finance Corporation to raise resolution process. The follow-on will help The oil and gas company said it will
debt of up to US$194m. increase the free float. make payment for the notes validly
The proposed financing comprises up to Around 50% of the offer will be sold tendered on March 16 in an amount of
US$150m from the IFC’s own account, the to institutions, 15% to high-net-worth US$985 per US$1,000 principal amount.
majority of which will be in local currency, investors and 35% to retail investors. The accepted notes will be cancelled,
and up to US$44m from the multilateral The funds will be used to repay loans and leaving a balance of US$405m in
agency’s Managed Co-Lending Portfolio expand its business. outstanding amount.
Programme. Axis Capital, ICICI Securities and SBI Capital BNP Paribas, HSBC and Mandiri Securities were
Proceeds will support Airtel Africa’s are the lead managers. the dealer managers. Lucid Issuer Services
capital expenditure requirements for the was the information and tender agent.
next two years for subsidiaries in seven ›EMUDHRA GETS NOD FOR IPO
countries as well as refinancing existing ›MODERNLAND LAUNCHES TENDER
loans. Digital signature services provider EMUDHRA
The subsidiaries are in Chad, the has got regulatory approval for an IPO of Property developer MODERNLAND REALTY has
Democratic Republic of the Congo, Kenya, around US$100m. launched a tender offer for its restructured

US dollar bonds due 2025 and 2027. ›PTPP PLANS TO SELL TWO-PART BONDS US$500m 359-day tranche, a US$200m two-
The cash buyback offer will be conducted year piece and a US$300m five-year portion.
through a reverse Dutch auction for an PEMBANGUNAN PERUMAHAN (PTPP) plans to raise Tranches A, B and C paid top-level
aggregate amount of up to US$26m of each up to Rp3trn from a two-tranche bond all-in pricing of 91bp, 115bp and 157.6bp
note. offering, according to the offer document. respectively based on interest margins
The outstanding amount of the amended The state-owned construction company of 55bp, 95bp and 145bp over Libor and
and restated guaranteed senior 2025s and has announced yield ranges of 3.75%–4.5% remaining lives of 0.75, 1.75 and 4.75 years.
the guaranteed senior PIK toggle 2025s is for a one-year tranche and 5.5%–6.5% for a
US$179.35m, while that of the 2027s is three-year piece. ›SEVEN JOIN TRANSMEDIA LOAN
US$268.48m. Pefindo has assigned an A rating to the
Modernland has set a bid range of bonds. TRANS MEDIA CORPORA and subsidiary TELEVISI
US$0.53–US$0.60 per US$1 of principal Mandiri Sekuritas, BRI Danareksa Sekuritas, TRANSFORMASI INDONESIA have closed a five-year
amount for the 2025s, and US$0.47– BNI Sekuritas and Samuel Sekuritas are the loan at US$250m-equivalent after attracting
US$0.55 for the 2027s. underwriters. seven lenders in general syndication.
The repurchase, launched on March The books opened on March 14 and close Mandated lead arrangers and
14, will end on March 25. Both the 2025s on March 24. bookrunners BNP Paribas, CIMB Bank and
and 2027s can be tendered in minimum The bonds will be allotted on April 21. Maybank, along with MLA Bank Negara
denomination of US$200,000 in principal Indonesia, had pre-funded the transaction,
and in integral multiples of US$1. which comprises a US$147.5m tranche
Standard Chartered is dealer manager and SYNDICATED LOANS and a Rp1.48trn (US$102.5m) piece. There
Lucid Issuer Services is information and tender was an option to increase to US$300m-
agent. ›PERTAMINA SEEKS LOAN OF UP TO US$3BN equivalent.
Under a restructuring scheme Only the US dollar tranche was
implemented last year, the maturity of State oil company PERTAMINA is seeking a syndicated, while CIMB and BNI took the
the 2025s via subsidiary JGC Ventures multi-tenor borrowing of around US$2bn– rupiah portion. The syndication agreement
had been extended by four years from $3bn. was signed on March 14.
2021, while the 2027 note via subsidiary Banks have submitted proposals but the The amortising loan paid a top-level
Modernland Overseas was extended from tenors have not been decided yet. all-in pricing of 357.8bp based on an
2024. Proceeds will be used for general interest margin of 325bp over Libor and a
corporate purposes and upstream oil and remaining average life of 3.51 years.
›OKI PULP & PAPER MILLS SETS YIELDS gas investments. Trans Media and Televisi Transformasi
Last October, Pertamina, via its subsidiary Indonesia, both units of Indonesian
OKI PULP & PAPER MILLS has set the yields for Pertamina International Shipping, raised conglomerate CT Corp, are the borrowers.
Rp4trn (US$278m) three-tranche bonds a US$134m dual-tranche club loan to Chairul Tanjung, the ultimate beneficial
at 5.75% for a 370-day tranche, 9% for a fund the procurement of two large crude owner of CT Corp, is providing a personal
three-year piece and 9.75% for a five-year carriers. guarantee. Trans Rekan Media and Trans
portion. Bank Mandiri, Bank Negara Indonesia Digital Media are also providing guarantees.
The books closed on March 15. It is yet to and Sumitomo Mitsui Banking Corp are Trans Media owns and operates television
announce the size of each tranche. the lenders of the five-year deal, which channels via free-to-air, pay-TV broadcasting
Aldiracita Sekuritas, BCA Sekuritas, BNI comprises a US$66.59m tranche and a and digital platforms. Televisi Transformasi
Sekuritas, Indo Premier Sekuritas, Mandiri US$67.42m piece. Indonesia operates the free-to-air Trans TV
Sekuritas, Sucor Sekuritas and Trimegah station.
Sekuritas are the underwriters. ›BRI SOUNDS FOR UP TO US$1BN LOAN Proceeds from the latest loan will be used
OKI Pulp & Paper plans to use 60% of the to refinance existing facilities, for capital
funds to repay debt and the rest to meet State-owned lender BANK RAKYAT INDONESIA is expenditure and working capital.
working capital requirements. sounding the market for a multi-tranche Trans Media’s previous visit to the loan
Pefindo has assigned a A+ rating to the financing of up to US$1bn, returning to the market was in April 2018 for a US$300m-
bonds. loan market 18 months after completing its equivalent financing, which offered a top-
largest offshore borrowing. level all-in pricing of 357.03bp via a margin
›PNM PLANS TWO-PART BONDS The borrower is eyeing tenors of one, of 325bp over Libor and a remaining
three and four years, but is open to average life of 3.59 years for the US dollar
PERMODALAN NASIONAL MADANI plans to raise proposals from lenders. portion.
up to Rp3trn from two-tranche bonds, A formal request for proposals has not
according to a prospectus. been sent yet. ›INTI INDOSAWIT TAPS DEBUT SLL
The state-owned finance company is BRI last tapped the market in September
eyeing yield ranges of 3.75%–4.5% for a one- 2020 when it raised a US$1bn multi-tranche Privately owned palm oil company INTI
year tranche and 5.5%–6.5% for a three-year facility after attracting 23 lenders in INDOSAWIT SUBUR INDONESIA has raised a
portion. general syndication. US$120m debut sustainability-linked loan
Books opened on March 14 and close on Bank of China (Hong Kong), BNP Paribas, with three lenders joining in syndication.
March 24. China Development Bank, Citigroup, CTBC MUFG was the mandated lead arranger
Pefindo has assigned a AA rating to the Bank, Mizuho Bank, MUFG, Standard and bookrunner of the SLL, which
notes. Chartered, Sumitomo Mitsui Banking comprises a US$30m two-year term loan, a
CGS-CIMB Sekuritas, Danareksa Sekuritas, Corp and United Overseas Bank were the US$10m four-year term loan and a US$80m
Indo Premier Sekuritas and Mandiri Sekuritas mandated lead arrangers and bookrunners two-year revolving credit facility.
are the underwriters. on the financing, which comprised a Mitsubishi HC Capital Singapore came in as

COUNTRY REPORT JAPAN
an arranger, while Bank KEB Hana Indonesia term loan, a ¥182bn bullet term loan and a a sustainability-linked loan portion and a
and Bank JTrust Indonesia joined as senior ¥20bn revolving credit. sustainability derivative, the TSE-listed real
managers. Mizuho Bank, MUFG and Sumitomo Mitsui estate investment trust said in a statement.
The SLL has set certain quantifiable Banking Corp were the mandated lead It said the sustainability derivative
environmental, social and governance arrangers. Mizuho is the bookrunner and linked to the SLL is the first of its kind
targets, which would allow the borrower to agent. in the world and has been evaluated by
benefit from a reduction in the interest rate Roadmap Holdings, a special purpose rating agency JCR. Nomura Securities is the
if it meets these targets annually. company owned by Goldman, completed counterparty for the derivative.
Inti Indosawit will engage with a third- a ¥4,000 offer per share offer for Nippo in The loan is split into a ¥2.6bn three-
party independent sustainability consultant December. year-and-seven-month portion, a ¥8.6bn
to provide lenders with annual verification Goldman completed the ¥476bn five-year-and-seven-month piece, a ¥5.1bn
reports. acquisition of Nippo with Eneos Holdings seven-year-and-seven-month SLL with
Proceeds are for working capital and in January, investing equity of ¥39bn and sustainability derivative and a ¥3bn nine-
refinancing purposes. ¥21bn, respectively. year-and-seven-month facility.
Apical Group, Apical Agri Group and Nippo will be delisted from the Tokyo The four tranches pay interest margins
Asian Agri, the Indonesian palm plantation Stock Exchange on March 29. of 27bp, 41bp, 60bp and 79bp over three-
businesses of Singapore-based RGE Group, month Tibor, respectively.
are guarantors of the SLL. ›HANWA SIGNS SIX-MONTH CRISIS LOAN Mizuho Bank, Sumitomo Mitsui Banking Corp
Indosawit Subur is a subsidiary of and Sumitomo Mitsui Trust Bank were the
Indonesian-based palm oil producer Asian HANWA has signed a ¥120bn six-month arrangers of the loan, while 77 Bank, Aeon
Agri. loan to deal with the impact of the Russia- Bank, Daiwa Next Bank, Development Bank of
Headquartered in Singapore, RGE Ukraine conflict, the Osaka-based trading Japan, Gunma Bank, Hiroshima Bank, Hyakugo
produces sustainable natural fibres, edible firm said in a statement on March 14. Bank, Kansai Mirai Bank, Mizuho Trust &
oils, green packaging and clean natural gas. Mizuho Bank, MUFG, Sumitomo Mitsui Banking, MUFG, Norinchukin Bank, San ju San
Another member of the RGE Group, Banking Corp and Sumitomo Mitsui Trust Bank Bank, Shinsei Bank and Yamaguchi Bank.
Sao Paolo-based Bracell, recently raised a are the lenders of the loan, which was Funds, to be drawn on March 22, are to
US$1.8bn seven-year syndicated loan to signed on March 8. refinance a one-year loan of the same size
fund the establishment of a pulp mill in Funds are to pay an increased guarantee completed last August. Mizuho, SMBC and
Brazil. deposit for derivative transactions due to a SMTB were the lenders.
surge in futures prices on the London Metal Meanwhile, AEON REIT said that it would
Exchange as a result of the conflict. not proceed with an issue of sustainability
EQUITY CAPITAL MARKETS The borrower last tapped the syndicated bonds that it had envisaged earlier because
loan market last March when it raised a of the current market environment.
›TELADAN PRIMA AGRO LAUNCHES IPO ¥30bn 3.5-year revolving credit arranged by The borrower, which invests in shopping
Mizuho Bank and SMBC. malls, previously tapped the loan market
Palm oil company TELADAN PRIMA AGRO has Tokyo-listed Hanwa is engaged in trading in October when it raised a ¥19.1bn bullet
launched a domestic IPO of up to Rp1.3trn of various products including steel, metal, term loan for refinancing.
(US$91m) in a Rp520–Rp600 range, food, oil, chemicals and machinery.
according to a term-sheet.
Up to 2.2bn primary shares, or 15% of the ›GLP’S JAPAN FUND TAPS ¥154BN LOAN EQUITY CAPITAL MARKETS
expanded capital, are on offer.
Books close on March 25 and the shares GRAVITY AH, an investment vehicle of GLP ›INFORMETIS PLANS IPO IN APRIL
start trading on April 11. Japan Income Fund, has signed a ¥154.1bn
The company will use the proceeds to multi-tranche loan. INFORMETIS has set an indicative price of
repay loans and for working capital. Mizuho Bank was the sole mandated lead ¥1,150 per share for an up to ¥4.3bn
CIMB Niaga Sekuritas and BNI Sekuritas are arranger and bookrunner of the deal, which (US$36.1m) TSE IPO.
the bookrunners. is split into four tranches with tenors The deal comprises 3.73m shares
ranging from one to eight years. (1.04m primary/2.69m secondary) with an
MUFG, Sumitomo Mitsui Banking Corp overallotment option of 560,300 secondary
and Sumitomo Mitsui Trust Bank came in as shares.
arrangers. The selling shareholders are JAFCO SV4
JAPAN GLP Japan Income Fund, established Investment and JAFCO Group.
by logistics, real estate and infrastructure There is a 90-day lock-up for the selling
developer GLP Japan in August 2020, owns shareholders and 180-day lock-up for the
SYNDICATED LOANS 14 assets valued at over ¥420bn at the issuer.
end of December and plans to acquire The indicative split between institutions
›NIPPO LBO LOAN ATTRACTS ONE additional six assets worth ¥260bn this and retail will be determined on April 6.
month, according to Japan Credit Rating Bookbuilding will run from April 8–14.
A ¥272bn (US$2.29bn) seven-year loan Agency. The deal will price on April 15 and the
backing Goldman Sachs’s leveraged buyout Gravity AH is rated AA− by JCR. shares are due to be listed on April 25.
of roadbuilder and property developer NIPPO Proceeds will be used to develop new
has closed with only one bank joining in ›AEON REIT PIONEERS ESG DERIVATIVE technologies and businesses, expansion and
limited syndication. relocation of office space and repayment
Norinchukin Bank joined the borrowing, signed a ¥19.3bn
AEON REIT INVESTMENT of debt.
which is split into a ¥70bn amortising bullet term loan on Thursday, including Founded in 2013, the company produces

smart energy sensors and offers energy- Founded in 2014, the company provides ›TAN CHONG DRIVES SUKUK SALE
focused data analysis and cloud services. consulting and technology services for real
Mizuho is the sole lead manager. estate businesses. It raised ¥11.9bn via an Automobile distributor TAN CHONG MOTOR
SBI, Rakuten, Tokai Tokyo, Ichiyoshi, IPO in December 2019. HOLDINGS has sold M$300m of three and five-
IwaiCosmo, Toyo, Matsui and Monex are the SMBC Nikko and Daiwa were the joint lead year notes, rated A+ by Marc.
underwriters. managers. The M$200m three-year tranche was
priced at 5% and the M$100m five-year
›SRE HOLDINGS COMPLETES FOLLOW-ON tranche at 5.58%. The notes will be
drawn from a M$1.5bn sukuk murabaha
SRE HOLDINGS,formerly known as Sony Real programme.
Estate, has priced a ¥8bn follow-on. MALAYSIA RHB Investment Bank, sole principal
The international book was more than adviser and lead arranger for the
10x covered with around 70 investors programme, was also sole lead manager
participation and no price sensitivity. The DEBT CAPITAL MARKETS for the deal.
top 10 investors took more than 75% of the
book. ›KL KEPONG PRINTS SUKUK
Allocations were highly skewed
towards long-only investors and roadshow KUALA LUMPUR KEPONG, rated A3 by RAM,
participants. has printed M$2bn (US$476.2m) of 10 NEW ZEALAND
Due to the strong demand, 10% of the and 15-year sukuk, fully utilising a newly
shares were shifted from the domestic to established Islamic MTN programme set up
the international tranche, resulting in a in January. DEBT CAPITAL MARKETS
50%/50% split. The M$1.5bn 10-year tranche was priced
SRE sold 3.23m shares (380,100 at 4.17% and the M$500m 15-year tranche ›ANZ NZ COVERS IN EURO
primary/2.85m secondary) at ¥2,473 at 4.55%. The notes, rated AA1, settled on
each, or 4% discount to the March 14 March 16. ANZ NEW ZEALAND (INT’L) LIMITED,
acting through
close of ¥2,577, from a discount range of The palm oil plantation owner, its London branch, on Monday priced
4%–6%. Malaysia’s third-largest planter and among €750m (US$820m) five-year covered bonds
There is an overallotment option of up to the top 10 worldwide, plans to use the at mid-swaps plus 15bp with a reoffer price
484,800 shares. proceeds to refinance a M$1bn 4% sukuk at par for a reoffer yield of 0.895%.
The selling shareholder is Z Holdings. that will mature on September 2. Final books were over €930m, including
There is a 180-day lock-up for the issuer Maybank Investment Bank was lead €40m lead bank interest. Pricing was inside
and the selling shareholder. manager while AmInvestment Bank and earlier guidance of 17bp area.
Proceeds will be used for research RHB Investment Bank were co-managers for The notes, to be rated Aaa/AAA (Moody’s/
and development, equity investment, the deal. All three banks are principal Fitch), will be backed by 100% New Zealand
development and sales, personnel and financial advisers and lead arrangers for prime residential mortgages. ANZ Bank
marketing. the programme. New Zealand is the guarantor.
Allegro funds Gull New Zealand buy

Loans Australian investment manager bags funding from Ares Capital and ASB Bank
Australian investment manager ALLEGRO FUNDS its acquisition of Z Energy, which was stations and Terminals New Zealand owns
has obtained funding from Ares and ASB Bank announced last October. and operates a 91ML fuel import terminal
for its proposed acquisition of Gull, the New Ampol committed to divest Gull to ensure at Mount Maunganui. ALD NZ Property
Zealand-based petroleum distribution business any potential competition issues were fully Holding, another wholly owned unit, owns six
of Ampol, the former Caltex Australia. addressed as part of its application to the retail properties leased to Gull New Zealand,
The size and terms of the financing were NZCC for approval to acquire New Zealand’s and these will be transferred to Gull as part
not disclosed. Z Energy. of the sale.
In an ASX filing on March 14, Ampol NZCC’s decision on the Z Energy Ampol is raising A$1.299bn (US$945m)
said it is selling Gull to Allegro for net cash acquisition is still pending. The deal is in new loans to support its acquisition of Z
proceeds of approximately NZ$509m expected to be completed in the first half. Energy, after extending its existing bilateral
(US$346m), as well as the assumption of Ampol intends to use the proceeds of the facilities and increasing the total size by
about NZ$63m of leases and debt-like items. sale of Gull towards funding its acquisition of A$160m combined to A$1.612bn.
Ampol has committed to a five-year fuel Z Energy. As at December 31, Ampol had committed
supply agreement with Gull, subject to The Gull business comprises wholly owned funding facilities of A$3.6bn, excluding the new
annual price reviews and termination rights. subsidiaries of Ampol, ALD Group Holdings acquisition loans, and net debt to Ebitda of 1.2x.
Allegro’s acquisition of Gull is subject to NZ, Gull New Zealand, and Terminals New Ampol has bilateral loans maturing in 2023
approvals from New Zealand’s Commerce Zealand. (A$145m), 2024 (A$465m), 2025 (A$150m),
Commission and Overseas Investment Office, Gull New Zealand operates a network 2026 (A$1.242bn) and 2028 (A$75m).
as well as Ampol successfully completing of 112 primary unmanned fuel service MARIKO ISHIKAWA

COUNTRY REPORT SINGAPORE
ANZ, BNP Paribas, Deutsche Bank and DZ Commonwealth Bank of Australia (NZ$150m), The issue price is slightly below the
Bank were joint lead managers. HSBC (NZ$130m) and Westpac Banking Corp maximum price of Ps12.50.
(NZ$105m) are the lenders. Up to 280.6m shares are on offer. There
›BNZ TAKES TWO The refinancing and increase of the is a greenshoe option of 42m.
trust’s loan was provided at competitive The retail and non-institutional tranche
BANK OF NEW ZEALAND, rated A1/AA– (Moody’s/ pricing levels, according to a stock is open for subscription from March 16–22
S&P), has priced NZ$750m (US$506m) exchange filing on March 14 from and the shares will list on the local stock
two-year fixed and floating-rate senior Goodman (NZ), the manager of the trust exchange on March 31.
unsecured notes. and a subsidiary of Australia’s Goodman The bank is part of San Miguel Group.
The NZ$150m fixed tranche was set at a Group. Its total assets rose 18% to Ps170.9bn
yield of 3.62% with a spread of 56bp over The loan is split into a NZ$160m tranche in 2020 from Ps145bn in 2019. Net
BKBM, while the NZ$600m FRN was priced due June 2023, NZ$130m portions each profit rose 20% to Ps784.4m from
at 56bp over BKBM. maturing in June 2024 and June 2025, and a Ps652.7m.
The notes were offered to institutional NZ$150m piece due June 2026. The IPO proceeds will be used to fund
investors before settlement on March 18. In December, Goodman Property Trust lending, acquire investment securities and
Bank of New Zealand was sole lead raised NZ$300m from a combination of a finance capital expenditure.
manager. loan and a bond. BDO Capital, China Bank Capital, Philippine
The NZ$100m 12-month loan was from Commercial Capital and PNB Capital are the
BNZ, which was also the lead arranger of joint issue managers.
STRUCTURED FINANCE a NZ$200m six-year bond for Goodman
Property Trust’s wholly owned subsidiary,
›BLUESTONE TAKES RMBS PATH GMT Bond Issuer.
Non-bank lender BLUESTONE on Friday priced SINGAPORE

the NZ$280m (US$192.6m) BLUESTONE NZ PRIME
2022-1 TRUST notes.
Collateral comprises fully amortising PHILIPPINES SYNDICATED LOANS
New Zealand dollar floating and fixed-rate
loans made to prime borrowers secured ›KEPPEL REIT RAISES S$127M REVOLVER
by registered first-ranking mortgages on DEBT CAPITAL MARKETS
residential property in the country. A wholly owned subsidiary of Keppel Real
Deustche Bank Sydney was arranger and ›ABOITIZ POWER PRINTS TWO-TRANCHER Estate Investment Trust has obtained
joint lead manager with Bank of New Zealand a S$127m (US$93m) revolving credit
and Westpac New Zealand. Settlement is on ABOITIZ POWER has raised Ps10bn (US$192m) facility.
March 28. from two-part fixed-rate retail bonds, KEPPEL REIT FIN CO is the borrower of the
Bluestone is owned by America according to a filing on the Philippine Stock loan, signed on March 14, according to a
private equity firm Cerberus Capital Exchange. stock exchange filing on the same day.
Management. The renewable and thermal energy utility Keppel REIT Management is the
The NZ$100m of Class A1 and NZ$138m company sold a Series D five-year tranche manager, while RBC Investor Services Trust
of Class A2 notes with 2.2-year WAL each at 5.3066% and a Series E seven-year piece is the guarantor.
priced 85bp and 160bp over one-month at 5.7388%. Under the terms of the facility
BKBM. It is yet to announce the size of each agreement, the borrower is required to
The NZ$23.52m of Class A3, NZ$5.6m of tranche. repay all outstanding loans within 10
Class B, NZ$5.04m of Class C, NZ$3.36m of PhilRatings has assigned a Aaa rating to business days in the event the manager
Class D, NZ$2.1m of Class E and NZ$1.4m the bonds. ceases to be a manager of Keppel REIT.
of Class F notes, with 2.2, 3.6, 3.6, 3.6, 3.6 The proceeds will be used to refinance A similar event would occur if a wholly
and 3.4-year WALs priced at one-month bonds, build renewable projects and for owned subsidiary of Keppel Capital
BKBM plus 200bp, 215bp, 260bp, 300bp, other general corporate purposes. Holdings and a wholly owned subsidiary
500bp and 725bp. BDO Capital, ChinaBank Capital and First of Keppel Capital are not appointed as
The transaction was completed by Metro Securities Brokerage Corporation are a replacement or substitute manager of
NZ$0.49m of Class G 1 and NZ$0.49m of joint issue managers, as well as joint lead Keppel REIT in accordance with the terms
Class G 2 notes. underwriters and joint bookrunners with of the trust deed.
Respective credit support for the Class A1 Security Bank Corp. In a mandatory pre-payment event, the
to G 1 notes is 64.29%, 15%, 6.6%, 4.6%, 2.8%, This is the company’s third issue of aggregate level of facilities that may be
1.6%, 0.85%, 0.35% and 0.175%. fixed-rate retail bonds under a Ps30bn shelf affected is approximately S$2.746bn as of
registration programme filed in March last the date of the announcement.
year. Keppel REIT Fin Co is also raising loans
SYNDICATED LOANS of unspecified sizes denominated in
Australian dollars to fund its acquisition of
›GOODMAN PROPERTY LIFTS FACILITY EQUITY CAPITAL MARKETS a freehold office building in North Sydney
for A$150m (US$107m) and to develop it
GOODMAN PROPERTY TRUST has increased its ›BANK OF COMMERCE PRICES IPO into an office building.
main bank facility to NZ$570m (US$388m) The total estimated cost of the Blue &
from NZ$400m. BANK OF COMMERCE is
to raise Ps3.4bn (US$65m) William project is A$342.9m, including
Bank of New Zealand (NZ$185m), from an IPO priced at Ps12 per share. A$327.7m for development.

revolving credit tranche B. refinancing to NT$51.6bn (US$1.8bn),
The interest margins are 180bp and closing syndication in a remarkably
SOUTH KOREA 170bp for tranches A and B, respectively, short timeframe of a month following an
and the average life for tranche A is 1.85 overwhelming response from lenders.
years. The borrowing attracted 23 banks,
DEBT CAPITAL MARKETS MLAs committing US$30m and above will including eight foreign lenders, in general
receive top-level all-in pricing of 207.02bp syndication, which was launched in mid-
›DIM SUM FOR KEXIM and 220bp for tranches A and B respectively February with a target of NT$43bn.
via a participation fee of 50bp, while lead Mega International Commercial Bank was
The EXPORT-IMPORT BANK OF KOREA, rated Aa2/ arrangers joining with US$20m–$29m earn the sole mandated lead arranger and
AA/AA–, has issued Rmb450m (US$71m) all-ins of 201.62bp and 210bp via a 40bp bookrunner of the transaction.
one-year senior unsecured Dim Sum notes fee. Arrangers taking US$10m–$19m will ESigning took place on March 15.
at 2.9%. receive all-ins of 193.51bp and 195bp via a The loan now comprises a NT$25.8bn
In a Singapore Exchange filing last week, 25bp fee. term loan tranche A, a NT$25.8bn revolving
Kexim said the notes settled on March 2. CJ INTERNATIONAL ASIA, a Singapore-based credit tranche B1 and a NT$25.8bn
Kexim also raised £36m (US$47m) from unit of CJ CheilJedang, is the borrower, guarantee tranche B2. Tranches B1 and B2
a placement of seven-year bonds priced at while the parent is providing a letter of cannot exceed NT$25.8bn combined.
1.93% which settled on March 7. comfort. Tranches A and B1 offer interest margins
Both bonds are listed on the SGX. Commitments are due by April 15, with of 48bp over Taibor, with pre-tax interest
signing slated for the week of April 25. rate floors of 1.7%.
›KHFC COVERS WITH SOCIAL BOND Funds are for general corporate purposes. Tranche B2 pays an annual guarantee fee
CJ CheilJedang last tapped the loan of 48bp.
KOREA HOUSING FINANCE CORPORATION, rated Aa2/ market in September 2008 for a US$150m Lenders were offered a top-level upfront
AA/AA–, on Monday sold €600m (US$657m) three-year borrowing. fee of 25bp.
three-year social covered bonds at mid- Proceeds are to refinance a NT$43bn
swaps plus 18bp with a reoffer price at par five-year loan signed in March 2018 and for
for a yield of 0.723%. working capital purposes.
Books were over €720m including €30m For full allocations, see www.ifre.com.
from lead bank interest. Guidance was TAIWAN
shown at 20bp area earlier. ›SYNNEX TO END EIGHT-YEAR HIATUS
Settlement of the bond, to be rated AAA
by S&P, is on March 22 with proceeds to be SYNDICATED LOANS Taiwan-listed IT distributor SYNNEX
used to facilitate access to housing finance TECHNOLOGY INTERNATIONAL is returning to the
for low and middle income earners in ›U-MING MARINE RETURNS FOR SLL syndicated loan market for a NT$12bn five-
Korea through a diverse range of mortgage year facility after an eight-year hiatus.
loan products as detailed in KHFC’s social A Singaporean unit of Taiwanese bulk Mega International Commercial Bank is
financing framework. carrier company U-Ming Marine Transport tipped to win the mandate on the loan,
Citigroup, Credit Agricole CIB, ING, Societe Corp has signed a US$50m sustainability- which is expected to be launched within
Generale and Standard Chartered were joint linked loan with ANZ Bank Taiwan. the next two weeks.
lead managers with KB Securities as co- The SLL will be used to fund U-Ming’s The borrowing comprises a NT$12bn
manager. fleet renewal plan, which includes the revolving credit tranche A, a NT$9.6bn
delivery of 11 new bulk carriers by the end guarantee tranche B and a NT$6.06bn
›HYUNDAI HEAVY INDUSTRIES MANDATES of 2022, U-Ming Marine Transport Corp, guarantee tranche C. The three tranches
said in a press release on Wednesday. cannot exceed NT$12bn combined.
Shipbuilder HYUNDAI HEAVY INDUSTRIES has The vessels come with optimised full Tranche A pays an interest margin of
mandated banks to lead a US dollar five- design, energy-saving main engines and 48bp over Taibor, with a pre-tax interest
year green bond sale. devices, ultra-low friction paint hull-coating rate floor set at 1.7%, while tranches B and
BNP Paribas, HSBC, KDB and Standard and a fleet safety management system C offer annual guarantee fees of 45bp each.
Chartered hosted investor calls that began designed by U-Ming. Funds are for working capital purposes.
on March 17. U-MING MARINE TRANSPORT (S) is the borrower. In March 2014, Synnex raised a
The senior notes will be guaranteed by DNV is the external reviewer. US$412.3m-equivalent five-year borrowing
the Korea Development Bank. The bonds The latest borrowing follows on the heels from nine banks, including Bank of
will be rated Aa2 by Moody’s. of a US$70m SLL U-Ming obtained from Taiwan as sole mandated lead arranger and
OCBC Bank in February. bookrunner.
Proceeds of that SLL were to be used to The unsecured revolving credit was
SYNDICATED LOANS fund U-Ming’s shipping fleet renewal plan, split into a NT$8.7bn tranche A and a
including the construction of two new US$127.5m tranche B.
›CJ CHEILJEDANG PREPS US$150M SLL 210,000 deadweight bulk carriers in China. Tranche A paid an interest margin of
The company was formerly known as 65bp over the secondary CP rate, while
Food company CJ CheilJedang has launched Yue Ming Transportation and is a subsidiary tranche B offered 140bp over Libor.
a US$150m sustainability-linked loan. of the Far Eastern Group. Lenders were offered a top-level upfront
KEB Hana Bank and Mizuho Bank are the fee of 15bp.
mandated lead arrangers and bookrunners ›TAIWAN CEMENT WRAPS UP QUICK REFI In January, the borrower obtained a
of the transaction, which comprises a two- NT$1.5bn bilateral three-year sustainability-
year term loan tranche A and a one-year TAIWAN CEMENT has increased its five-year linked loan from MUFG Bank.

COUNTRY REPORT TAIWAN
›CHENG LOONG MANDATES LOAN FOR REFI Taibor, with a pre-tax interest rate floor of of 140bp over Taibor. Tranches A and B
1.7%, and an annual guarantee of 60bp. have pre-tax interest rate floors set at 1.8%.
Paper products maker CHENG LOONG has The margin and guarantee fee on the CATHAY SUNRISE ELECTRIC POWER ONE is the
mandated First Commercial Bank on a NT$8bn loan will decrease by 1bp if the borrower borrower of the NT$4.9bn loan, which
(US$281m) loan. meets one of the two ESG metrics and by backs the construction of a 95MW solar
The borrowing is expected to be up to 2bp for meeting all criteria. power plant in Cigu district in Tainan city.
launched into general syndication early For full allocations, see www.ifre.com. NEO CATHAY ELECTRICITY is the borrower
next month. of the NT$3.3bn loan, which funds a
Funds are to refinance a NT$7.2bn five- ›CHUANG JU LAUNCHES DEBUT LOAN neighbouring 63MW solar power plant.
year loan raised in April 2018, and for SanTi’s units, North-Star International
working capital purposes. CHUANG JU LIMITED PARTNERSHIP,
an instalment and Nan Ren Lake Leisure Amusement, are
FCB, Hua Nan Commercial Bank sales and leasing subsidiary of Chailease the sponsors of the NT$4.9bn and NT$3.3bn
and Taipei Fubon Commercial Bank Finance, has launched a NT$4bn debut facilities respectively.
were the mandated lead arrangers and loan. The two Taipei Exchange-listed
bookrunners of the 2018 loan, which Bank SinoPac is the mandated lead companies are providing letters of support
comprises a NT$7.2bn term loan tranche arranger and bookrunner of the three-year for their respective loans.
A, a NT$2.16bn term loan tranche B and facility, which pays an interest margin of SanTi, founded by Taiwanese business
a NT$4.32bn guarantee tranche C. The 85bp over Taibor, with a pre-tax interest tycoon Chung Chia-tsun in 2008 for urban
three tranches cannot exceed NT$7.2bn rate floor of 1.7%. rezoning projects, has expanded into
combined. MLAs joining with NT$1bn or more sectors such as energy, property, snack
Tranches A and B offer interest margins will earn an upfront fee of 25bp, while food, transportation and tourism and
of 60bp over Taibor, with pre-tax interest arrangers taking NT$800m–$999m recreation in Taiwan.
rate floors of 1.7%, while tranche C pays an receive 20bp. Managers committing with Chung is the guarantor on the two loans.
annual guarantee fee of 55bp. NT$500m–$799m are offered 15bp. For full allocations, see www.ifre.com.
Cheng Loong last visited the loan market The deadline for responses is April 15.
in December 2020 for a NT$8bn five-year Proceeds are for working capital
facility, which pays a margin of 50bp over purposes. EQUITY CAPITAL MARKETS
Taibor and an annual guarantee fee of Chailease Finance is providing a letter of
50bp. support. ›GDR ISSUANCE GATHERS PACE
Chuang Ju’s immediate parents are
›CHAILEASE FINANCE SIGNS REDUCED SLL Chailease Consumer Finance and Chailease Five Taiwanese companies are planning
Credit Services, which are units of Taiwan- to offer global depositary receipts to raise
CHAILEASE FINANCE signed a NT$5.2bn listed leasing giant Chailease Holding. up to US$1.89bn in total, with SHIN KONG
sustainability-linked loan on Friday, cutting FINANCIAL and WT MICROELECTRONICS expected
the size from an original target of NT$6bn. ›SANTI CLOSES SOLAR PROJECT FINANCINGS to receive regulatory approval later this
Four banks joined the borrowing in month.
general syndication. SanTi Group has closed two solar project Shin Kong Financial is expected to
First Commercial Bank was the original financings totalling NT$8.2bn with both receive approval on March 24 for the sale
mandated lead arranger and bookrunner of borrowings attracting 11 banks in general of 1bn–1.3bn shares in a GDR offer, which
the three-year facility, which was launched syndication. could raise around US$464m based on its
at the end of last year. Bank SinoPac was the original mandated closing price of NT$10.20 on Wednesday.
Taiwan Cooperative Bank joined as MLAB. lead arranger and bookrunner of both The company plans to use the proceeds as
The loan now comprises a NT$5.2bn transactions, while KGI Bank, Land Bank of capital for its subsidiaries.
revolving credit tranche A for funding Taiwan, Taiwan Cooperative Bank and Taipei Semiconductor maker WT
working capital requirements and a Fubon Commercial Bank joined with the same Microelectronics is expected to receive
NT$2.626bn guarantee tranche B for titles. approval on March 25. It plans to sell 58m–
backing a corporate bond issuance. The Signing is scheduled for March 29. 78m shares to repay debts. Based on its
two tranches cannot exceed NT$5.2bn The loans comprise term facilities of closing price of NT$82.60 on Wednesday,
combined. NT$4.9bn and NT$3.3bn. the deal could raise some US$226m.
Tranche A pays an interest margin of The NT$4.9bn term facility is split into POWERCHIP SEMICONDUCTOR MANUFACTURING is
70bp over Taibor, with a pre-tax interest a NT$4.9bn 2.5-year tranche A for the planning to sell up to 350m shares in the
rate floor of 1.7%, while tranche B offers an construction period and a NT$4.9bn six- offering, which could raise US$630m based
annual guarantee fee of 60bp. year tranche B for repaying tranche A on Wednesday’s closing price of NT$51.40.
The margin and guarantee fee on the after the commencement of commercial The company plans to use the proceeds for
loan will decrease by up to 3bp if the operations. The two tranches cannot exceed business development and the purchase of
borrower’s parent, Chailease Holding, is NT$4.9bn combined. machinery.
included in the Dow Jones Sustainability The NT$3.3bn term facility is split WIWYNN, which produces servers for cloud
Index World and reaches the 85th into a NT$3.3bn 2.5-year tranche A and a services and data centres, intends to sell
percentile in the index’s three key NT$3.3bn six-year tranche B for the same up to 17m shares. The deal could raise
assessment scores: environmental, social purposes. Both tranches cannot exceed US$569m based on Wednesday’s closing
and governance, and economic. NT$3.3bn combined. price of NT$956. The company said it may
Last month, Chailease Finance raised a Tranches B can be extended twice with sell the shares in either common share
NT$6.036bn seven-year loan linked to ESG each extension being five years. format or as GDRs, or both.
metrics from seven banks. Tranches A pay interest margins of 150bp Finally, Taiwanese leasing giant CHAILEASE
That loan pays a margin of 65bp over over Taibor, while tranches B offer margins HOLDING is also planning to sell GDRs but the

size will be determined in a shareholder A minimum size is targeted at Bt1bn, In senior syndication, some banks have
meeting in May. unusually low for the frequent issuer. It also been approached to join the deal,
raised Bt12bn in a multi-tranche deal in which offers an interest margin of 88bp
May last year and another Bt12bn in a over SOFR.
multi-tranche deal in September 2020. Both In November, Vietinbank closed a
offerings included tranches offered to retail US$1bn one-year financing after attracting
THAILAND investors. 16 banks in general syndication.
Fitch rates the company, 45% owned by HSBC, Sumitomo Mitsui Banking
state oil company PTT, and its new senior Corp, Taipei Fubon Commercial Bank and
DEBT CAPITAL MARKETS unsecured bonds at A–. IRPC said it will use UOB were the MLABUs of the transaction,
the proceeds to repay a portion of a Bt2bn which offered a top-level all-in pricing of
›CPN SELLS ACROSS TENORS bond due on September 11. 103.07bp via an interest margin of 85bp
Guidance on the new bonds is shown over Libor and a 0.83-year average life.
Property company CENTRAL PATTANA, rated at 2.8%–3.1% with subscription to run That loan was a result of reverse
AA by Tris, has raised Bt5.5bn (US$164.5m) from May 17–19. The notes will be sold enquiries following a strong response
from the sale of three to 10-year bonds. via digital technology using sole lead to a US$790m dual-tranche borrowing
The Bt1.5bn three-year tranche was manager Krungthai Bank’s “Pao Tang” digital completed in August last year from 21
priced at 1.49%, a Bt1bn five-year tranche application. banks joining in general syndication.
at 2.01%, a Bt1bn seven-year tranche at The August 2021 borrowing is split
2.64% and the Bt2bn 10-year tranche at ›KRUNGSRIAYUDHYA CARD SWIPES SHORT into a US$340m two-year tranche A and a
3.03%. US$450m three-year tranche B that paid a
Bankers said the largest tranche with the KRUNGSRIAYUDHYA CARD, rated AAA by Tris, blended all-in of 121bp based on a blended
longest maturity reflected ongoing appetite has printed one and 2.5-year senior margin of 105bp over Libor.
from Thai investors for long duration unsecured bonds to raise its targeted size Separately, VIETINBANK SECURITIES, a unit of
despite global geopolitical tension and of Bt10bn. Vietinbank, is also in the offshore market
pending US Federal Reserve rate increases. The Bt4.5bn one-year tranche was priced for a debut dual-tranche loan of up to
Settlement was made on March 11 at 0.9% and the Bt5.5bn 2.5-year was at US$100m.
via joint lead managers CIMB Thai Bank, 1.38%. Deutsche Bank is the MLAB of that
Kasikornbank, Kiatnakin Phatra Securities and The notes, also rated AAA by Tris, were facility, which is equally split into a
UOB Thai. marketed only to institutional investors via two-year tranche A and a three-year
sole lead manager Bank of Ayudhya. tranche B.
›FRASERS PROPERTY BUILDS A TRIPLER The credit card services company, owned That borrowing offers a top-level all-in of
by Bank of Ayudhya, has a Bt3bn 1.89% 245bp via a blended margin of 225bp and a
FRASERS PROPERTY (THAILAND) hassold a triple- bond maturing on September 26. blended average life of 2.5 years.
tranche bond to raise Bt4bn – its first VietinBank, one of the four largest state-
since Tris upgraded its credit rating to A owned commercial banks in the country, is
from A–. rated Ba3/BB− (Moody’s/Fitch).
A Bt1bn three-year tranche was set at
1.89%, a Bt2bn 3.75-year tranche at 2.32% VIETNAM
and a Bt1bn five-year piece at 2.78%. EQUITY CAPITAL MARKETS
Tris promoted the Thai property
developer in mid-October to reflect its SYNDICATED LOANS ›VINFAST HIRES TWO MORE FOR IPO
strategic importance to parent Singapore-
based Frasers Property and its leading ›VIETINBANK LAUNCHES LOAN INTO SENIOR Citigroup and Morgan Stanley have joined
position as an integrated property Credit Suisse in the syndicate for VINFAST’s
development company in Thailand. VIETNAM JOINT STOCK COMMERCIAL BANK FOR US$2bn–$3bn US IPO, people with
Kasikornbank and UOB Thailand were joint INDUSTRY AND TRADE(Vietinbank) has launched knowledge of the transaction said.
lead managers for the deal which settled on a US$1bn 364-day loan into senior The Vingroup subsidiary is planning the
March 11. Frasers Property Thailand builds syndication, close on the heels of signing launch the deal in the second half. If it
residential, warehousing and logistics the country’s largest syndicated loan four goes through, it will be the first US IPO of a
facilities across Thailand. months ago. Vietnamese company.
BNP Paribas and United Overseas Bank are VinFast produces electric cars,
›IRPC PLOTS RETAIL RETURN the coordinators of the borrowing and are motorbikes and buses. It has also obtained
expanding the arranger group. a permit to test autonomous vehicles on
Petrochemical producer IRPC, locally rated Potential mandated lead arrangers, public streets in California.
A– by Fitch, is planning to return to the bookrunners and underwriters are Vingroup is Vietnam’s largest
bond market with a public offering of five- in the process of obtaining credit conglomerate with interests in real estate,
year bonds. approvals. automobiles and retail.
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IFRASIA

INTERNATIONAL FINANCING REVIEW ASIA

March 19 2022 ISSUE 1228 www.ifre.com

Chinese trio lines up Swiss IPOs

Mainland and HK stocks crash,

Indonesia’s GoTo braves market

LOANS BONDS BONDS PEOPLE & MARKETS

For more information, email: [email protected] or phone: +65 9755 5031

International Financing Review Asia March 19 2022 1

HONG KONG, HEAD OFFICE TOKYO SINGAPORE LONDON NEW YORK

2 International Financing Review Asia March 19 2022

TOP NEWS STORIES COUNTRY REPORT

EQUITIES 27 HONG KONG

08 BONDS LGFV supply endures unabated

13 REGULATION India tightens IPO valuation scrutiny 14 Reg S

International Financing Review Asia March 19 2022 3

Chinese trio heads for the Alps

4 International Financing Review Asia March 19 2022

income from Europe is also

International Financing Review Asia March 19 2022 5

6 International Financing Review Asia March 19 2022

Taiwan banks widen horizons some of their bigger regional

International Financing Review Asia March 19 2022 7

Macquarie pays up for size widened 12bp to 201bp

8 International Financing Review Asia March 19 2022

Two Singapore REITs delay IPOs US$$600m and S$464m from

International Financing Review Asia March 19 2022 9

Korean companies postpone IPOs matter.

10 International Financing Review Asia March 19 2022

BOC sells first Tonar floater accounts bought 15%.

Banks in Australia crowded out

12 International Financing Review Asia March 19 2022

India tightens Regulators in major markets including

IPO valuation companies to tighter scrutiny about their

scrutiny do not usually make granular checks on

International Financing Review Asia March 19 2022 13

14 International Financing Review Asia March 19 2022

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International Financing Review Asia March 19 2022 15

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OUTLOOK FOR ASIAN CREDIT

…reason for Asia

Moderator: Daniel Stanton

KOH CHIN CHIN GARY LAU ALAN ROCH

FENG ZHI WEI DANIEL STANTON

CHINA ACCOUNTED FOR MOST OF ASIAN G3 ISSUANCE BY COUNTRY IN 2021

in the past. to be a Reg S product. In terms of the Tier 2 market,

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Connect to the global syndicated loan market with Refinitiv LPC.

International Financing Review Asia March 19 2022 19

20 International Financing Review Asia March 19 2022

International Financing Review Asia March 19 2022 21

Redco attempts to manage debt

22 International Financing Review Asia March 19 2022

CICC HK gives up on floater