IFRASIA

INTERNATIONAL FINANCING REVIEW ASIA

APRIL 13 2019 ISSUE 1085 www.ifrasia.com

Asian issuers in control as manic week

for bond sales goes off without a hitch

Sustainable finance thrives Down Under

with debuts for Woolworths and IDB

Japan Post set for third and final state

sell-down after government invites bids

BONDS BONDS EQUITIES PEOPLE & MARKETS

First 50-year yen Societe Generale Sporting goods Citigroup’s Asia
bond highlights bid capitalises on store MAP Active Pacific chief adds to
for duration in Singapore savings revives interest in flurry of leadership
low-rate Japan with first AT1 Indonesian ECM changes
05 07 08 12
MOBILIZING CAPITAL MARKETS
FOR SUSTAINABLE 9.2*
INFRASTRUCTURE 52×52
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IFR presents a panel discussion on the role of the institutional 2&>
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2TIJWFYJIG^.+7&XNF*INYTWSteve Garton, this seminar will &)'2**9.3,
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The seminar includes a buffet lunch and is FREE TO ATTEND for all delegates at the
52nd ADB Annual Meeting in Fiji.

8UTSXTWJIG^
Upfront
Race to the top
I
rrational exuberance may be making a comeback in
Asia's bond markets.
Last week alone, Asian issuers printed a massive
US$14bn of US dollar bonds, including over US$5bn of high-
yield debt, with barely a whisper about oversupply.
Investors moaned about Indian high-yield borrowers not
paying enough, but then bought their deals anyway. Bank
OFû#HINAûOFFEREDûlVEûDIFFERENTûCURRENCIESûATûONCEûWITHOUTû
cannibalising demand. A Mongolian miner that defaulted
THREEûYEARSûAGOûMANAGEDûTOûRElNANCEûWITHûEASEûINûTHEû
international bond market.
Indian non-bank lenders are now queuing up to sell US
dollar bonds because onshore investors won’t lend to them
at attractive rates anymore. Low-rated companies like
Bollywood producer Eros International have resurrected
It’s fair to say there are
warning signs that the
market is approaching a top.
plans for dollar bonds that failed to take off two years ago,
and perpetual bonds are back on the table.
Add to that the longest ever corporate bond in Japan and
a record SoftBank retail offering and it's fair to say there are
warning signs that the market is approaching a top.
It's also notable that there hasn’t really been much
positive news to drive investors into risk-on mode. Global
growth is slowing and there is no progress at all on the
China-US trade talks. The only thing driving demand is
low rates and the hope that Trump will bully the Fed into
cutting rates later this year.
It's a similar story in equities, where investors piling
money into loss-making tech stocks got a reality check from
the second-day slide in newly listed Lyft.
In the absence of good news to sustain the rally, there is a
real risk that market conditions will take a sudden turn for the
worse, either when the US economy starts to justify talk of a
recession or the Fed starts talking about raising rates again.
International Financing Review Asia April 13 2019
OPINION INTERNATIONAL FINANCING REVIEW ASIA
With all that in mind, it’s no wonder Asian issuers want
to get their deals done as quickly as they can.
Cheques in the post
T
he Japanese government is doing its part for Asia's
equity capital markets again this year, with more
giant offerings from the Japan Post group set to
dominate 2019 volumes. Even these multi-billion-dollar
deals, however, are no guarantee of liquidity.
The three-pronged listing of Japan Post's banking,
insurance and holding companies in 2015 did a masterful
job of generating excitement around the gradual
privatisation of a low-growth state enterprise.
Since the initial enthusiasm - especially around JP Insurance,
arguably the most promising growth story of the three -
interest has waned. The stable prices and thin volumes suggest
the bulk of the shares have ended up with the kind of long-
TERMûHOLDERSûWHOûVISITûTHEûPOSTûOFlCEûMOREûOFTENûTHANûTHEYû
trade shares. Mrs Watanabe probably used some of her postal
SAVINGSûACCOUNTûTOûBUYûTHEûSHARESûINûTHEûlRSTûPLACEû
Low liquidity makes it challenging for the government to
pare its stake further, but it also shows a way forward for
future offerings.
Only JP Holdings, the parent company, trades in any
kind of volume, and that is more because of the US$11.5bn
follow-on in September 2017 than the initial public offering.
!VERAGEûDAILYûTRADINGûSLIDûTOûMûSHARESûINûTHEûlRSTûEIGHTû
months of 2017; the following year's average was over 8.2m.
At close to 700 days' trading, the roughly US$3bn
secondary follow-on in JP Insurance, due to price this week,
should have a similar impact on that stock's liquidity.
The government's next JP Holdings sale will also be
massive, at around 175 days' trading if it sells the full
US$12bn. But JP Holdings could also buy back stock to
support the placement, as it did in 2017. At some point
the holding company also needs to sell some of its stake in
Japan Post Bank, raising a similar challenge.
The next JP Holdings sell-down will also take the
government's stake below 50%, completing the privatisation
process. That will move Japan closer to its goal of creating a
deeply liquid group of attractive stocks that will encourage
more savers to invest in the market, but there are no
shortcuts.
1
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2 International Financing Review Asia April 13 2019

Contents
INTERNATIONAL FINANCING REVIEW ASIA
APRIL 13 2019 ISSUE 1085

COVER STORIES COUNTRY REPORT

BONDS
04 Manic week for Asian bond sales 17 AUSTRALIA
Asian international bond issuance is at fever pitch, as Troubled Australian financial
AMP Group returned to the
borrowers rush to use falling credit spreads and global Swiss market with a SFr140m
investors chase returns in a low-yield environment. 0.8% 4.25-year senior
unsecured bond issue.
BONDS
05 ESG bonds thrive Down Under 19 CHINA
Australia showcased its ESG credentials again last 21Vianet Group last Tuesday
priced US$300m of 2.5-year
week with two original bond offerings from the Inter- senior unsecured bonds to fund
American Development Bank and Woolworths Group. a tender offer, drawing orders of
over US$1.4bn.
BONDS
05 Japan welcomes first 50-year bond 30 HONG KONG
Hong Kong conglomerate CK
With the first 50-year senior bond of ¥15bn, Mitsubishi
Hutchison Holdings has priced
Estate took the yen bond market into new territory, US$1.5bn dual-tranche senior
tapping demand for duration in low-rate Japan. unsecured bonds after drawing
over US$2.8bn final orders.
39 PHILIPPINES
Marlow Foods, a unit of Monde
Nissin, has closed a debut
£123m five-year borrowing, with
Asian banks largely supporting
the deal.
40 SINGAPORE
DBS Group Holdings priced a
US$750m three-year senior
unsecured bond offering at
99.946 with a coupon of 2.85%
to yield 2.869%.
42 SOUTH KOREA
Korea Resources Corp priced
US$400m five-year senior
unsecured bonds at Treasuries
plus 102.5bp, drawing orders of
over US$2.85bn.

NEWS 33 INDIA 42 TAIWAN

Bollywood film company Eros
06 Japan’s postman rings thrice International has hired two to
Japan’s government has started its third and final arrange fixed income investor
mammoth sell-down in the postal and financial giant meetings in Hong Kong,
Singapore, London and the US.
Japan Post Holdings in a deal worth around US$12bn.
07 SocGen capitalises on Singapore savings SocGen sold its first 2019 36 INDONESIA
bank capital deal to a rousing reception in Singapore. Semen Indonesia plans to raise
08 MAP re-activates Indonesian ECM MAP Aktif Adiperkasa wrapped up a Rp4.9trn from two-part bonds,
Rp4.2trn re-IPO in Indonesia, reviving major share sales in the country. with ranges of 8.50%–9.25%
08 Indian NBFCs target dollar funding India’s non-banking financial sector for a five-year and 8.75%–
is lining up USD issues with tight spreads offshore and falling hedging costs. 9.50% for a seven-year tranche.
Grand River Development has
launched a US$100m three-
year mezzanine to part-finance
the construction of Taipei Sky
Tower in Taipei’s Xinyi district.
43 THAILAND
Thailand’s state-owned
Government Housing Bank is
planning to market bonds in
tenors of three to 15 years to
raise up to Bt20bn.

37 JAPAN
PEOPLE & MARKETS SMBC Aviation Capital last
Monday priced a US$500m
12 Citi loses Asia Pacific CEO five-year bond at 99.868 with
Citigroup’s Asia Pacific chief executive resigned a coupon of 3.55% to yield
unexpectedly after almost four years in the role, adding 3.579%, at the tight end. 14
to a string of leadership changes at the US bank. 38 MALAYSIA
13 StanChart fined US$1.1bn for Iran breaches StanChart has been fined Maybank Islamic has raised
US$1.1bn by the US and UK for Iran sanctions and other compliance flaws. M$1bn from the sale of 10 non-
14 JP Morgan, Nomura plot different JV paths JP Morgan and Nomura are call five Islamic bonds that will
pursuing very different strategies for their new Chinese securities JVs. qualify as Tier 2 capital. The
12 Who’s moving where JP Morgan has selected Takenori Yoneda to head notes will pay 4.5%.
up corporate banking in Japan after Takasuke Sekine left earlier this year.
16 In brief MUFG is set to scale back its bond and equity operations in 38 NEW ZEALAND
London and New York as part of a restructuring of its global markets division. Asian Development Bank
priced a NZ$200m seven-year
Kauri bond on April 5 with joint
ASIA DATA lead managers ANZ and TD
Securities.
44 This week’s figures

International Financing Review Asia April 13 2019 3

NewsJapan Post sell-down 06
Manic week for Asian bond sales
„ Bonds New issues hold up in secondary, despite glut of supply
BY DANIEL STANTON,
FRANCES YOON
Asian international bond
issuance has reached fever
pitch, as borrowers rush to
take advantage of falling credit
spreads and global investors
continue to chase returns in a
low-yield environment.
Asian issuers sold US$14bn of
G3 bonds last week, excluding
Japan and Australasia, the most
since the second week of April
2018, according to Refinitiv
data.
April is typically a busy
period for bond issues as
companies return to the market
with refreshed financial results,
and bankers say this month
could be the busiest April on
record, rivalling the US$38bn
sold in the same month last
year.
“People realise that markets
are good,” said an origination
banker who worked on
multiple deals that priced
last week. “The current
environment is sustainable
4 International Financing Review Asia April 13 2019
SocGen AT1 07
because of fund inflows, and
it doesn’t seem like the Fed is
going to raise rates soon.”
Emerging-market debt funds
recorded inflows in 12 of the
past 13 weeks, according to
research from Bank of America
Merrill Lynch.
Issuers from Asia rushed
to the bond market on
Monday as they tried to seize
a brief window before Saudi
Aramco’s expected US$12bn
offering and key central bank
announcements.
Eight Asian issuers printed
US$7.3bn of bonds on Monday,
including a US$2bn multi-
tranche offering from CHINA
EVERGRANDE GROUP and US$1.5bn
from Hong Kong conglomerate
CK HUTCHISON HOLDINGS.
Perhaps surprisingly, there
were no casualties among the
primary offerings, and most
performed well in secondary
on Tuesday as Aramco gathered
orders.
LG CHEM’s dollar bonds
tightened 5bp–8bp, while
China Evergrande Group’s
MAP Active re-IPO 08
bonds were seen slightly above
reoffer.
“The market is mature
enough that it can handle
US$7bn in one day,” said a DCM
syndicate banker. “I don’t think
anyone’s deal got damaged as a
result of all the supply. It shows
Asia is developing into a very
liquid, deep market.”
Monday’s activity followed
issuance of US$11.9bn the
previous week, according to
IFR data.
Deal activity sped up again
on Wednesday, when BANK
OF CHINA priced a US$3.8bn-
equivalent transaction across
five currencies and eight
tranches.
Six deals priced the same day,
raising US$5.4bn, but a banker
on the BOC deal said that did
little to curb appetite for the
Chinese lender.
“This deal blew out the door,”
he said. “Markets are hot. There
is pent-up demand from a lack
of quality paper, including
Chinese financials.”
Indian mining group VEDANTA
RESOURCES rounded out the
week with a US$1bn high-yield
bond late on Thursday that
also priced well inside initial
guidance. (See India Debt capital
markets.)
HERE TO STAY?
With the European Central
Bank and Federal Reserve
signalling a dovish outlook
for interest rates, bankers are
confident that the conducive
backdrop for primary supply
will continue.
The first banker did note that
secondary levels have tightened
aggressively since the start of
the year, and that gains could
slow from now on.
“It’s hard to see a spread rally
from here. It’ll only happen
if we see a let-up in primary
supply,” he said.
The JP Morgan US dollar Asia
Credit Index, which has around
a five-year average maturity,
has rallied since the start of
the year, with the Z spread
tightening 53bp to 197bp.
The rally has stalled recently,
however, since hitting 195bp
on March 19.
The iTraxx Asian investment-
grade CDS index has also
retreated 2bp since hitting
a 12-month tight of 63.75bp
on March 19, but is still 32bp
tighter since the start of the
year.
Signs of strain in the Chinese
high-yield property sector are
also showing, as aggressive
pricing strategies have tripped
up a few deals so far this
month.
“There is some degree of
indigestion already especially
in the Chinese property sector,
although markets are still
conducive for primary supply,”
said a Hong Kong-based
investor. “There is reinvestment
demand, but deals have priced
without much of a concession
for the past month.” „

Evergrande forever 09
ESG bonds thrive Down Under
„ Bonds Soaring Aussie demand attracts more Green and Social issues
BY JOHN WEAVERS
The Australian capital market
showcased its environmental,
social and governance (ESG)
credentials again last week with
two original bond offerings from
the INTER-AMERICAN DEVELOPMENT
BANK and WOOLWORTHS GROUP.
Woolworths, rated Baa2/
BBB (Moody’s/S&P), attracted a
stunning order book in excess of
A$2bn (US$1.42bn) for Friday’s
debut Green bond, the first such
issuance by an Australian retailer
and the first by a supermarket
globally under the Climate Bonds
Initiative’s recently approved
framework for that sector.
Demand was such that the
A$400m 2.85% five-year note
priced at 99.965 for a yield of
2.8575%, well inside 130bp–
135bp guidance at asset swaps
plus 120bp.
The size of the bond was
limited only by the green assets
Japan greets first 50-year bond
„ Bonds Mitsubishi Estate pushes boundaries as yield curve flattens
BY TAKAHIRO OKAMOTO
Japanese property developer
MITSUBISHI ESTATE took the yen
bond market into uncharted
territory last week with the
first 50-year senior bond.
Mitsubishi Estate, rated A2/
A+/AA– (Moody’s/S&P/R&I), sold
¥15bn (US$134m) of 50-year
bonds on Friday, tapping into
growing demand for duration
in low-rate Japan.
The ultra-long maturity breaks
new ground in the yen market,
where even the government has
yet to go beyond a 40-year tenor.
Only hybrid securities have
priced with longer maturities,
but the shorter call dates and
subordinated structures are not
directly comparable.
Mongolian Mining 10
it is funding, primarily solar
panels and in-store LED lighting.
ANZ, Citigroup and JP Morgan were
joint leads.
“Australia’s large green
investor base and elevated
demand for non-discretionary
retailers in times of slower
economic growth underpinned
the transaction,” said a banker
on the deal. “It also enjoyed
plenty of scarcity value as a rare
corporate issue and, specifically,
Woolworths’ first local offering
in over seven years.”
Woolworths previously sold
a A$500m seven-year domestic
MTN in 2012, the 6.0% March 21
2019, which matured last month.
Two days earlier the Triple
A rated IDB printed its first
Kangaroo bond under the
EYE programme, a social
financing platform that aims to
promote education, youth and
employment.
The proceeds of the A$500m
Coming in the wake of a
flattening in the Japanese
government yield curve, the
deal attracted investors looking
to extend the duration of their
portfolios and allowed the
issuer to lock in cheap funding
for longer.
Since 50-year JGBs do not
exist, market participants were
keen to see how the bonds
would price. While there are
many complicated ways to
extrapolate the yield curve, a
banker on the deal explained
that arrangers had simply used
the compound yields on the
current 30 and 40-year JGBs to
estimate the 50-year level.
The bonds priced at a
compound yield of 1.132%,
or 54bp over a hypothetical
International Financing Review Asia April 13 2019
India’s Samurai snub 10
five-year bond, via ANZ, CBA and
JP Morgan, will finance eligible
projects in Latin America and the
Caribbean.
The 1.95% April 23 2024s
priced at 99.929 for a yield of
1.965%, 35bp wide of asset swaps
and 50.5bp over the April 2024
ACGB. Pricing was also in line
with IDB’s standard Kangaroo
curve and its existing EYE US
dollar curve.
“The Kangaroo market
was chosen for IDB’s first
EYE issuance outside of the
US dollar market because it
offers diversity and volume,
underpinned by a rapidly
expanding investor base,” said a
syndication manager involved in
the transaction.
The fourth biennial review
by the Global Sustainable
Investment Alliance released
on April 2 showed Australasia
has the world’s highest uptake
of responsible investing, with
0.592% 50-year JGB yield (based
on the 30-year yield of 0.518%
and 40-year of 0.551%).
That was a pleasant surprise
for the issuer, as the yield came
below that of two of the three
40-year bonds Mitsubishi Estate
issued in 2016, 2017 and 2018.
Demand also exceeded
expectations. The inital target,
when Mitsubishi Estate started
sounding out investors at mid-
50bp on April 8, was around
¥10bn. The size was raised to
¥11bn when marketing started
at 54bp–55bp on April 10, and
the books ultimately slightly
exceeded ¥15bn.
The banker on the deal
declined to disclose which types
of investors, or how many, had
participated. Three sources
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63% of total assets under
management across Australia
and New Zealand following
a responsible investment
approach.
The Responsible Investment
Benchmark Report 2018
previously reported A$866bn of
responsible investments under
management in Australia as of
December 31 2017, ahead of
further substantial growth in
2018.
Last week’s two trades take
this year’s ESG issuance in
Australia to A$3.24bn following
the record A$1bn five-year
SSA Green Kangaroo by Asian
Development Bank, a A$1.25bn
Green five-year from Queensland
Treasury Corp and A$90.9m
of Green ABS originated by
Flexigroup.
Green, Social and Sustainable
issuance from Australia,
including Aussie dollar deals
and Australian credit bond
sales offshore, reached A$8.4bn-
equivalent in 2018 from 11
issuers in the state government,
banking, education, SSA and
consumer lending sectors. „
suspected the bonds were
bought by life insurers, especially
foreign ones, who they think
need to extend the duration of
their portfolios as yen rates have
shown no sign of going higher.
“If you simply seek yield, all
you need to do is buy [much
shorter-dated] bail-in-able bonds
or subordinated bonds issued
by banks,” said a bond investor
at a major domestic insurance
company. “So, yield hunt is
probably not the reason.”
The spread between 30 and
40-year JGB yields has been
tightening since the beginning
of the year and has even
accelerated since early April.
On a simple yield basis, the
spread had narrowed to a mere
0.5bp as of Friday.
Nomura was the bookrunner
on the deal, underwriting
¥13bn, with SMBC Nikko and
Mitsubishi UFJ Morgan Stanley
taking ¥1bn each. „
5
News
Japan's postman rings thrice
„ Equities Up to US$12bn stake on offer in last of three mega-sales
BY CANDY CHAN
The Japanese government
has set the ball rolling on its
third and final mammoth sell-
down in the country’s postal
and financial giant JAPAN POST
HOLDINGS in a deal which could
be worth around US$12bn.
The Finance Ministry last
Tuesday invited banks to bid for
a role in the share sale, which
is expected to hit the market as
early as this autumn.
The sell-down will be the
government’s last disposal in
JP Holdings. Since it is required
by law to hold at least a one-
third stake, there is a high
chance that it will look to cut
its stake from the current 56.9%
to 33.3%.
Based on JP Holdings’ market
capitalisation of ¥5.61trn
(US$50.5bn) as of last Thursday,
selling a 23.6% stake will be
worth around US$12bn. At that
size, the deal is likely to be the
largest equity offering in Asia
Pacific this year.
6 International Financing Review Asia April 13 2019
JP Holdings shares dropped
to an all-time low of ¥1,200
last Wednesday in reaction
to the potential sale. Despite
rebounding to ¥1,248 a day
later, the stock is still well
below the 2015 IPO price of
¥1,400 and the government’s
latest sell-down price of ¥1,322
in 2017.
A sell-down at the current
prices will not please investors
who bought into the company
at IPO and in the 2017
follow-on, but bankers believe
this will not discourage the
government from proceeding
with the sale.
“Banks will have to present
the best size, method and
timing to launch the deal,” said
one ECM banker.
Banks have until April
19 to apply, and a round of
interviews will take place
by May 8. The MoF plans to
select four bookrunners for
the domestic tranche and
two bookrunners for the
international tranche.
The sell-down is expected to
be similar to the 2017 follow-on
led by Daiwa, Goldman Sachs
and Nomura.
“It would be a big event.
There will likely be oversupply
of stocks in the market when
the share sale comes,” said
another banker.
“As the process moves
forward and with more
certainty on the timeline,
(other) issuers will have a
better idea not to launch their
deals neck and neck with the
government’s,” the banker said.
The first ECM banker,
however, does not expect the
JP Holdings sell-down to distort
the market as issuers generally
are cash-rich and the pipeline
for capital raisings this year is
light.
The government took in
US$12bn from a three-pronged
listing of JP Holdings and its
subsidiaries Japan Post Bank
and Japan Post Insurance in
November 2015. It then raised
US$11.5bn in 2017 from a
follow-on share offering in JP
Holdings.
Ultimately, the state plans to
raise a total of US$35bn from
the sell-down of its stake in the
holding company to one-third,
helping fund reconstruction
for areas damaged in the 2011
tsunami.
INSURANCE BOOKBUILD
Separately, JP Holdings itself
is on track to raise around
¥331bn (US$2.9bn) from part of
its stake in JAPAN POST INSURANCE
through a secondary follow-on
offering, after retail and
institutional books were fully
covered last week.
The international portion, at
30% of the total deal size, was
covered early last week, and
the 67% domestic retail tranche
filled ahead of Friday’s close.
The 3% for Japanese insitutions
was also covered.Bookbuilding
finished last Friday. Pricing
will be between April 15-17 at
a 2%-4% discount to the share
price on the day.

Shares in JP Insurance
fell 1.1% during the four-day
bookbuild, underperforming
a 0.5% gain in the benchmark
Nikkei 225 Index, but are still
up 6.3% since it announced the
offering on April 4 – mainly
because of a ¥100bn buyback.
The sale is attractive to
investors because of the
company’s strong brand,
nationwide franchise and range
of insurance products, according
to a person close to the deal.
“It is a trusted brand
especially for the older
population,” said the person.
Based on the closing price
on April 10, JP Insurance was
valued at an Price/EV of 0.37x,
according to the person. Peers
Dai-ichi Life, Sony Financial and
T&D traded at 0.3x, 0.46x and
0.28x respectively.
The base deal is an offer
of up to 130.8m secondary
shares, and there is a 15%
overallotment option of up to
19.6m shares. That is around
30m down on the original
announcement on April 4, after
JP Holdings sold some of its
shares in the buyback, but still
a massive 696 days’ trading,
based on average volumes
since the start of the year. The
original terms proposed the
sale of up to 161m shares with
an overallotment option of up
to 24m shares.
The sale is expected to cut
the stake held by parent JP
Holdings to about 66% from
89% before the announcement.
JP Insurance said the deal
would advance the privatisation
of Japan’s postal services and
lift liquidity in the group’s
shares.
Both JP Holdings and JP
Insurance are subject to a 180-
day lock-up.
Daiwa, JP Morgan and
Mitsubishi UFJ Morgan Stanley are
the joint global coordinators on
the deal, and also international
joint bookrunners and lead
managers with Bank of America
Merrill Lynch.
Daiwa, JP Morgan, Mitsubishi
UFJ Morgan Stanley, Mizuho,
Monex, Nomura, SBI and SMBC
Nikko are on the domestic
tranche. „
SocGen bags Singapore savings
„ Bonds Competitive funding lures more European banks to local AT1 market
BY KIT YIN BOEY
SOCIETE GENERALE sold its first
bank capital deal of the year
to a rousing reception in
Singapore, burnishing the
island state’s reputation as the
go-to place for global banks
looking to sell subordinated
paper.
The French bank, rated A1/
A/A, raised S$750m (US$554m)
from its first Additional Tier 1
offering in Singapore dollars,
pricing a perpetual non-call five
at par to yield 6.125%.
The choice of Singapore
dollars saved the issuer 50bp–
70bp in funding costs compared
to a US dollar deal, according to
the lead managers.
Uncertainties over whether
the European Union would
agree to extend the UK’s
exit beyond April 12 had no
impact on bookbuilding last
Tuesday, showing how little the
SocGen’s significant
saving, thanks to a
yield-hungry investor
community amenable
to highly structured
bonds, continues a
theme that has been
running through
the Singapore bond
market since last year.
Brexit issue mattered to local
investors. The EU eventually
granted an extension to end-
October early on Thursday.
SocGen’s significant saving,
thanks to a yield-hungry
investor community amenable
to highly structured bonds,
continues a theme that has
been running through the
Singapore bond market since
last year. UBS, which sold
S$700m of perpNC5 notes at
International Financing Review Asia April 13 2019
5.875% in November, obtained
similar benefits.
Banks said market technicals
have improved in Singapore
since UBS visited at the end of
last year. Bank hybrids have
all rallied strongly since they
were sold in the second half of
last year. UBS’s 5.875% notes
have tightened to 5%, while
HSBC’s 5% AT1 notes, sold in
September, have firmed to 4%.
“Singapore is the market
for AT1 bonds at the moment,
more than the US dollar market
where spreads are wider,” said
one lead on the deal.
“The arbitrage is a big
advantage for European banks
at the moment… It is not for
all European banks, but for
those in need of capitalisation
or replacement of capital, it
is an opportunity to obtain
competitive funding here.”
Another lead manager
agreed, adding that there has
been an increase in discussions
with European banks on AT1
bond offerings, “and we hope
to get more off the ground”.
A major appeal for investors
is the 6.125% coupon, the
highest ever on an AT1 issue in
Singapore, though SocGen has
little reason to be disappointed
as the references used showed
the pricing was inside its
existing curve.
UBS’s 5.875% AT1 bonds
callable 2023 were used as
the main reference. The notes
were quoted at 5% on Monday,
which was 80bp–90bp inside
its US dollar curve. SocGen’s
outstanding US dollar AT1
notes callable 2023 were at
7.31%, so the same 80bp–90bp
differential would imply a yield
of 6.25% in Singapore dollars
for a shorter 2023 call date.
Investors piled more than
S$1.7bn into the book at initial
guidance of 6.5% area, and few
dropped out after the leads
pulled guidance 37.5bp tighter.
Final orders were over S$1.55bn
from more than 61 accounts.
Private banks bought 81%,
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visit www.ifrasia.com
leaving 11% for fund managers
and 8% for banks and corporate
investors. Singapore accounted
for 85% of the deal, with others
taking 15%.
Demand was less impressive
in Australia two days later
when SocGen immediately
“Singapore is the
market for AT1 bonds
at the moment,
more than the US
dollar market where
spreads are wider.
The arbitrage is a
big advantage for
European banks at the
moment ‘… It is not for
all European banks,
but for those in need
of capitalisation or
replacement of capital,
it is an opportunity
to obtain competitive
funding here.”
followed its Singapore deal
with a A$300m 15-year non-
call 10 Tier 2 that priced flat
to guidance at 4.5%. The deal
pulled in A$390m of orders at
final terms.
SocGen’s first Singapore
AT1 is its second bank capital
deal in Singapore, following a
S$425m 10NC5 Tier 2 at 4.3% in
May 2016.
The deeply subordinated
AT1 bond, expected to be rated
Ba2/BB+ by Moody’s/S&P, will
have a 5.125% CET1 temporary
write-down trigger. The coupon
will reset in year five to the
prevailing Singapore dollar SOR
plus the initial credit spread of
420.7bp. There is no step-up.
Settlement is on April 16.
SocGen was global coordinator
and sole structuring adviser as
well as joint bookrunner with
DBS, Standard Chartered Bank and
UOB. „
7
News
MAP re-activates Indonesian ECM
„ Equities Share sale boosts liquidity while Malaysian deals struggle
BY S ANURADHA
MAP AKTIF ADIPERKASA (MAP
Active) wrapped up a Rp4.2trn
(US$298m) re-IPO in Indonesia
last week, reviving major share
sales in the country at a time
when other floats in South-East
Asia are facing challenges.
Montage, a subsidiary of
funds advised by CVC Asia
Pacific, sold 648.5m shares,
representing 22.8% of the sports
goods retailer’s capital, at the
bottom of a Rp6,500–Rp7,750
range. Before the sale, CVC
owned 29.5% of the company.
“The backing of CVC, a
presence in the right sector and
the positive economic outlook
for Indonesia have worked in
its favour,” a banker on the deal
said.
A reasonable valuation also
helped attract investors given
the lack of ECM activity in
Indonesia and the impending
April 17 elections. There have
been no major IPOs since last
NBFCs target dollar funding
„ Bonds Shadow banks look at offshore markets as domestic credit squeeze continues
BY KRISHNA MERCHANT
India’s non-banking financial
companies are lining up US
dollar bond issues to take
advantage of tight spreads in
the offshore market and falling
hedging costs, as domestic
funding remains tight.
The queue of potential deals
will test foreign demand for
the sector in the wake of last
year’s default at Infrastructure
Leasing & Financial Services,
and bankers said that smaller
NBFCs may struggle to get any
deals done.
SHRIRAM TRANSPORT FINANCE,
which priced a US$400m three-
year debut in February, started
meeting investors in New
York, Boston and Los Angeles
last week to return with a
8 International Financing Review Asia April 13 2019
May, when a falling currency
and stock market drove away
investors. Things are beginning
to look up, however, with
the Jakarta Stock Exchange
Composite Index up 3.8% year
“The backing of CVC,
a presence in the right
sector and the positive
economic outlook for
Indonesia have worked
in [MAP Active’s]
favour.”
to date and the rupiah up 6.9%
from its October lows.
Banks had visibility on the
book at launch with demand
coming firmly at the lower end
of the range.
benchmark 144A/Reg S senior
secured dollar bond.
BAJAJ FINANCE, HERO FINCORP,
PIRAMAL CAPITAL AND HOUSING
FINANCE and MAHINDRA AND
MAHINDRA FINANCIAL SERVICESare all
understood to have had talks
with banks ahead of potential
dollar debuts, according to
DCM bankers.
“All non-banking financial
companies are trying to access
the dollar debt market,” said
Shantanu Sahai, head of debt
finance and DCM for India at
Nomura.
“In the pecking order, NBFCs
of large business groups will
be able to raise funds from
offshore dollar bonds/loans
first, followed by private equity-
owned NBFCs,” he said. “The
second phase of NBFCs might
“The bankers wanted to push
investors higher on the range
but they [investors] backed
away,” a banker away from the
deal said.
The final price translates to
a 2019 P/E of 20.2x. Regional
speciality retailers trade in the
high 20s and low 30s.
LOWER VALUATIONS
IPO investors are becoming
more price-sensitive in South-
East Asia, as QSR BRANDS, another
CVC-backed issuer, found out.
The Malaysia-based KFC and
Pizza Hut franchisee decided to
defer its IPO of up to US$500m,
even though the deal was only
at the pre-marketing stage,
when investors indicated they
were not comfortable with the
valuation. The company was
targeting a 2019 P/E multiple
of 25 but investors were only
interested below 20, especially
after QSR’s recent weak first-
quarter earnings.
Books were scheduled to
start with smaller sizes like
US$100m–$200m as they want
a degree of certainty that the
deal will go through.”
Sahai expects a sustained
pipeline because of low interest
rates offshore, decent appetite
among global investors seeking
returns in emerging markets,
low rupee hedging costs and
expectations the rupee may
appreciate further.
Hedging costs for Indian
companies have dropped by
60bp–70bp after the Reserve
Bank of India announced on
March 16 that it would conduct
long-term forex swaps to
increase liquidity. The RBI will
hold a second US$5bn forex
swap auction on April 23 after
it completed the first one on
March 26.
open in late April.
Citigroup, Credit Suisse,
Maybank and RHB are global
coordinators, and bookrunners
with Affin Hwang, AmInvestment
Bank, CIMB and CLSA.
Meanwhile, poultry breeder
LEONG HUP INTERNATIONAL is
banking on cornerstone
investors to bankroll a
downsized US$250m Malaysian
IPO it is marketing at a 2019 P/E
multiple of 20.
The company is likely to sell
almost the entire institutional
tranche, excluding the portion
reserved for investors approved
by the Ministry of International
Trade and Industry Malaysia, to
cornerstone investors.
“A cornerstone tranche of
more than 50% is not a good
sign. It just shows lack of
confidence in building the
book,” a Hong Kong-based ECM
banker said.
Pre-marketing is currently
under way and books are
scheduled to open in the third
“It is a perfect time for any
company to borrow from the
dollar bond market,” said a credit
analyst from a foreign bank.
“The market is hot right now.”
Some market participants
are cautious about lower-rated
NBFCs, however, with Shriram
Transport’s swift return raising
questions. “Investors would
rather see companies establish
themselves in the capital
markets gradually,” said a
second credit analyst.
Some fund managers feel
the pricing of recent high-yield
issues has not reflected the
underlying credit risk.
“Shriram’s bonds are
currently trading at expensive
levels to what we would deem
as fair value,” said Dhiraj Bajaj,
head of Asia credit at Lombard
Odier. “Most of the similar Asian
high-yield credits, especially
from Indonesia and China, are
trading at around 7% levels.”
Shriram Transport’s 2022

week of April.
The company was originally
looking at an IPO of up to
US$600m, but poor stock
market conditions in Asia have
led to lower valuations.
Credit Suisse, Maybank and RHB
are joint global coordinators
and bookrunners with AmInvest,
DBS, Hong Leong, HSBC and OCBC.
PIPELINE BUILDING
In Indonesia, the IPO pipeline
is slowly building. State-
owned port terminal operator
PELABUHAN TANJONG PRIOK is
planning to launch a US$100m–
$200m IPO to the third quarter.
The company had originally
planned the issue for April but
wants the general elections to
be over before launching.
Copper and gold miner
AMMAN MINERAL NUSA TENGGARA is
planning a US$500m–$600m
IPO later this year or next year.
Healthcare company SOHO GLOBAL
and JAKARTA EYE CENTRE are also
planning IPOs this year but the
offer sizes have not yet been
disclosed.
For MAP Active, around
50 accounts, comprising
international long-only
dollar notes were trading at
a cash price of 100.5 to yield
5.51% last Thursday, according
to Refinitiv data. The three-year
notes were issued at par to
yield 5.7% in February.
Analysts at DBS and Emkay
expect Shriram Transport
Finance to deliver growth of
10%–12% over the medium to
long term, much slower than
what it used to be, according to
an April 9 research note.
ONSHORE SQUEEZE
NBFCs are still facing higher
funding costs in the domestic
market. Local AAA rated
NBFCs pay around 121bp
over government securities,
compared with 80bp before
IL&FS defaulted, according
to Jefferies. Domestic banks
are already heavily exposed
to the sector, which accounts
for around 7%-8% of their total
loan books, and are already
huge buyers of their securitised
institutions and local investors,
participated in the transaction
with the top 15 accounts
allocated around 80% of the
deal. The majority of the
investors were foreigners.
The company floated in
Jakarta in July 2018, selling a
15% stake in an all-primary deal
to raise Rp898bn at Rp2,100 a
share. CVC did not sell shares at
the time, prefering to hold out
for better market conditions.
As well as providing an exit
route at more than three times
the IPO price, the secondary
offering will improve liquidity
in the stock.
MAP Active is a unit of
Jakarta-listed Mitra Adiperkasa,
which runs the Topshop, Marks
& Spencer, Sogo and Seibu
department stores in Indonesia.
It has over 850 shops in
Indonesia selling sports
and children’s goods. The
company sells over 50 local
and international brands such
as Adidas, Converse, Levi’s,
Hasbro, Reebok and Timex.
Deutsche Bank and UBS were
the joint global coordinators and
bookrunners with Credit Suisse
and Indo Premier Securities. „
portfolios, said Karthik
Srinivasan, group head of
financial sector ratings at Icra.
The shift to the dollar
market, however, comes with
risks attached.
“With tighter onshore and
commercial paper markets for
the sector, these companies
are keen to have longer debt
maturity profiles and new
lenders,” said Bajaj.
“If the dollar funding route
shuts for NBFCs because of
a sell-off in the high-yield
market, first-time issuers may
find it difficult to refinance
because they do not have
diversified funding sources.”
At the same time, some
NBFCs are still tapping the
domestic market, with SREI
INFRASTRUCTURE FINANCE, MUTHOOT
HOMEFIN INDIA, L&T FINANCE, SHRIRAM
CITY UNION FINANCE and MAGMA
FINCORP lining up public bond
issues totalling Rs30.50bn
(US$440m). „
International Financing Review Asia April 13 2019
Evergrande sails
through HY crowd
„ Bonds Latest high-yield benchmark takes 2019 proceeds to
US$5.6bn
BY FRANCES YOON, CAROL CHAN
CHINA EVERGRANDE GROUP raised a
further US$2bn in a crowded
high-yield bond market last
Monday, highlighting the depth
of demand for big, liquid deals at
near double-digit yields.
The B1/B+ (Moody’s/S&P) rated
developer priced a US$1.25bn
9.5% three-year, a US$450m
10.0% four-year non-call two and
a US$300m 10.5% five-year non-
call three, all at par.
The bonds, which priced in
line with final guidance, held
above reoffer in secondary
trading, even as the market
digested a deluge of primary
deals, including Saudi Aramco’s
US$12bn offering.
The three tranches were bid at
100.125, 100.513 and 101.275 on
Tradeweb on Thursday, with the
smallest tranche outperforming.
That was a marked contrast
to the poor early performance
of Evergrande’s new issues in
2018, when it drew criticism for
pricing deals that were too big
for the weaker market to absorb.
A banker on the deal said that
the announcement of a capped
US$2bn deal size and the early
release of final guidance added
an extra touch of transparency
to the deal, catering to investor
feedback that asked for more
clarity on deal sizes.
Evergrande is one of China’s
most frequent offshore issuers,
and has now raised US$5.6bn
from overseas investors since the
beginning of the year.
“People realise that this is the
behemoth of China property,
and they cannot be ignored,”
said the banker. “Their bonds
are so liquid, and it’s really a
case of investing in Evergrande
as a proxy to China property, as
opposed to looking at it as an
individual risk play.”
The banker said he was
surprised to see international
institutional investors, including
For daily news stories
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those in Europe, place chunky
orders even with the competing
supply. Friends and family
appetite was also said to have
come via private bank orders.
Order books were said to have
peaked at US$3bn.
“Sunac was also in the market.
With both issues offering some
new issue premium, Evergrande
decided to go straight with final
guidance and enough premium
to attract investors,” said another
banker on the deal. Sunac China
sold US$750m of 4.5-year non-
call 2.5 bonds on Monday.
Evergrande’s orders from
bookrunners, including interest
from friends and family, were
around US$1bn, the second
banker said. He also stressed
that Evergrande Chairman Hui
Ka Yan did not buy the bonds
this time, unlike an offering in
October last year in which he
supported more than half the
deal.
The banker said that of the
three tranches, the five-year non-
call three tranche was the most
generous, with an estimated
50bp–60bp of new issue
premium.
As in Evergrande’s previous
deals, however, the company’s
outstanding bonds had sold off
heavily as rumours of a deal hit
the market. The 8.25% March
2022s – a higly liquid US$2bn
benchmark maturing just three
weeks ahead of the new 9.5%
notes – had been quoted at
7.92% on March 22, and were bid
around 9.1% when the new issue
finally emerged.
The new Reg S notes have
expected ratings of B2/B
(Moody’s/S&P).
Credit Suisse, Bank of China,
CEB International, Haitong
International and UBS were joint
global coordinators, joint lead
managers and joint bookrunners.
Bank of America Merrill Lynch
was added to this list after the
marketing of the bonds began. „
9
News
Mongolian Mining lifts burden
„ Bonds Coal miner takes out restrictive covenants, lengthens maturity
BY DANIEL STANTON
MONGOLIAN MINING CORP has turned
the page on its 2017 debt
restructuring with a new issue
and bond tender that lifted
onerous covenants and freed
up cashflow.
After pricing a US$440m
unsecured new issue on April
3, MMC wrapped up a tender
issue last week that will take
out almost all of its senior
secured bonds.
The response beat the
issuer’s expectations, allowing
it to take advantage of surging
demand for high-yield debt to
give it more flexibility.
“We considered a bond
exchange in the beginning,
driven by factors including
market conditions, since the
market was quite choppy at
that time and we thought a
new issue might be difficult,”
said Ulemj Baskhuu, chief
financial officer at Mongolian
Mining Corp.
The coking coal miner
defaulted on its debt, including
Indian Samurai market fizzles
„ Loans Long-term loans find few takers after recent Japanese borrowing spree
BY CHIEN MI WONG, WAKAKO SATO
Indian companies are
finding it harder to raise yen-
denominated Samurai loans as
Japanese lenders show signs of
fatigue after a borrowing spree
targeting Japan’s low borrowing
rates and abundant bank
liquidity.
Top firms from the sub-
Continent have raised
US$2.65bn of Samurai loans
in the last 18 months, mostly
at maturities of seven years
or more, to reduce borrowing
costs and extend maturities,
but appetite for the deals is
waning.
“Everyone has had enough
of Indian Samurai deals,” said a
10
US$600m of offshore bonds,
in 2016. The following year it
came to an agreement with
creditors, which included
issuing dollar-denominated
senior secured bonds and
perpetual securities.
Since then, a recovery in the
the price of coking coal and
rebound in MMC’s secured
bonds left it in a position to
return to the offshore bond
market and take out debt with
restrictive covenants.
MMC priced US$440m of
five-year non-call three senior
unsecured bonds at par to
yield 9.25%, via bookrunners
JP Morgan and Morgan Stanley,
which also managed the
tender.
Price guidance started at
9.5% area, before tightening
to 9.375% area on the way
to a final order book of over
US$740m.
The 144A/Reg S notes have
expected ratings of B–/B (S&P/
Fitch) and will be issued by
MMC and its wholly owned
subsidiary Energy Resources.
Tokyo-based senior banker said.
NTPC, India’s largest power
utility, started the rush for
Samurai loans in late 2017, but
its second visit in early April
was tougher. Only Aozora Bank
joined its US$300m-equivalent
10-year Samurai loan in general
syndication.
In March, state-owned POWER
GRID CORP OF INDIA also drew a
weak response to its debut
¥22bn (US$201m) 12-year term
loan, the longest maturity seen
on a Samurai loan to date. Only
Aozora and Bank of Yokohama
committed to the deal in
general syndication.
Both deals point to a
slowdown in Samurai loans as
Japanese lenders struggle with
International Financing Review Asia April 13 2019
The final yield meant that
MMC’s new five-year non-call
three issue priced inside the
secondary yield of 9.3% for
like-rated Mongolian Mortgage
Corp’s three-year bonds sold in
March. It then jumped a point
in secondary trading.
SWITCH AND SAVE
The new issue funded a tender
offer for MMC’s US$412.5m
senior secured bonds due 2022
and US$195m perpetual bonds.
At the same time, MMC ran a
consent solicitation to amend
the senior notes, eliminating
some covenants, restrictive
provisions and events of
default.
MMC accepted around
US$397.8m in principal
amount of senior secured
bonds under the tender offer,
equal to 96.46%, and US$23.9m
of perps, it said on Tuesday. It
will pay US$1,050 per US$1,000
of senior bonds and US$510
per US$1,000 of perps, so the
total cash outlay, including
accrued interest, is a little over
Indian country limits.
“We are asking regional
banks to expand their country
limits for India but it is not so
easy,” the Tokyo-based senior
banker said.
As a result, POWER FINANCE CORP
and INDIAN RAILWAY FINANCE CORP
have postponed syndication
of loans totalling US$450m
indefinitely.
Japan’s four megabanks
prefunded a five-year US$150m-
equivalent Samurai loan for
Power Finance Corp and a
US$300m-equivalent seven-
year deal for IRFC, but general
syndication is now on hold.
The next test of demand is
likely to come from privately-
owned Indian conglomerate
US$430m. Holders of around
50% of the old bonds chose to
roll into the new issue.
“It was a fantastic result,”
said Florian Schmidt, founder
of Frontier Strategies, which
advised MMC. “The objectives
of the company were achieved,
terming out their debt into
a new five-year maturity and
releasing the hard collateral
they had posted for the
restructured notes, relaxing
ultra-tight covenants and
effectively eliminating the cash
sweep.
“Investors got paid a fair
net present value of the
cash sweep premium, and in
addition they get assurance of
a cash coupon, instead of a PIK
toggle linked to the coal price.”
CASH SWEEP
Price discovery for the tender
was a complex process because
the senior secured bonds came
with contingent value rights
and could be repaid by a cash
sweep mechanism depending
on the company’s performance
Reliance Industries, which is
currently testing the market
with a US$2.25bn deal.
The deal includes tranches
totaling ¥55.5bn and pays
all-in pricing of 88.5bp and
91.5bp based on interest
margins of 72.5bp and
75.5bp over yen Libor, with
average lives of 5.25 and 5.5
years respectively. (See India
Syndicated loans.)
“There is some sense of
fatigue,” a Singapore-based
loans banker said. “We will
have to time the launch of
future transactions properly to
ensure we will be able to draw
liquidity and close a successful
deal.”
LONG TENORS LANGUISH
Japanese lenders continue to
seek overseas assets in search
of higher returns, but tightly-
priced loans with long 10-year

– a component that was hard
to value because investors had
to calculate the probability
of it paying out over the
remaining life of the bonds.
Nomura’s sales and trading
desk wrote that since MMC
had generated free cashflow
in 2018 and was growing its
cash balance, it expected the
company to start paying the
cash sweep premium from this
year.
The issuer initially offered
to pay US$1,010 per US$1,000
in principal amount for the
senior bonds, including a
US$50 early bird premium, but
raised the offer after hearing
bondholders’ feedback. On
March 25, MMC announced
that holders of US$303.176m,
or 73.5%, of the senior bonds
had agreed to participate
in the tender, after raising
the offer price by US$40 per
US$1,000.
It was not possible to speak
to major bondholders about
the tender terms before the
announcement, as that would
have meant wall-crossing them
and preventing them from
trading the bonds. As three or
four investors held the majority
of the bonds, trading would
plus tenors are losing their
appeal.
“The 10-year tenor is too
long and pricing is no longer
attractive,” a banker at a
Japanese regional bank said.
India’s state owned
companies have
enthusiastically embraced long-
term fundraising in Japan’s
cheap and highly liquid loan
market. Tightening cross-
currency swaps and pent-up
demand for higher-yielding
assets also opened a window for
international borrowers to save
on their funding costs.
Power Grid’s 12-year loan is
the longest unsecured Samurai
loan for an Indian company.
The deal offered top-level all-in
pricing of 110.8bp based on an
interest margin of 98bp over
yen Libor and an average life of
9.75 years.
NTPC’s latest deal pays top-
have ground to a halt.
That concentration was also
one of the reasons for doing
the tender, which gave existing
bondholders an opportunity to
exit if they wanted.
“By doing this exercise, we
also wanted diversification,”
said MMC’s Baskhuu. “We
appreciate our investors, but
the restructured bonds have
been very illiquid and some
investors complained they
couldn’t get hold of the bonds.”
The handful of outstanding
2022s will still be eligible for
the cash sweep.
There is a benefit to having
some of the senior secured
bonds outstanding: if all of
them had been taken out, the
coupon on the perps would
have stepped up to 10%, from
zero at present.
The outcome of the new
issue and bond tender leaves
MMC able to build up its cash
reserves.
“We don’t have any major
capex investment required,
we don’t have major payment
obligations and loans that need
to be refinanced, so we are
comfortable and don’t expect to
raise funds in the near future,”
said Baskh. „
level pricing of 114.5bp based
on a margin of 102bp and
weighted average remaining
life of 10 years.
The company’s ¥39.42bn
(then US$370m) 10-year
Samurai loan of April 2018
previously had the longest
tenor, and attracted eight banks
in general syndication.
The strong response to that
loan contrasts with the weak
response to NTPC’s current
loan, despite a 10bp uplift in
pricing.
The yen-denominated loan
had the minimum 10-year
tenor required to raise funds
via offshore debt in compliance
with the Reserve Bank of
India’s external commercial
borrowing rules at the time.
The RBI lowered its minimum
maturity requirement for most
borrowers to five years in
December 2018. „
International Financing Review Asia April 13 2019
BOC back with
biggest BRI bond
„ Bonds Fifth Silk Road deal bolsters confidence in China’s
infrastructure initiative
BY CAROL CHAN, FRANCES YOON
BANK OF CHINA signalled ongoing
support for China’s Belt and
Road Initiative on Wednesday
with its fifth ‘Silk Road bond’,
raising US$3.8bn-equivalent
across five currencies and eight
tranches.
State-owned BOC, rated
A1/A/A, sold Reg S senior bonds
in US dollars, euros, Australian
dollars, offshore renminbi and
Hong Kong dollars through five
branches, ranging from Sydney
to Luxembourg.
The deal is the largest
multi-currency offering from
a financial institution in Asia
Pacific so far this year, and the
biggest international bond from
any bank in Asia ex-Japan. It is
also the biggest offshore senior
deal on record from a Chinese
commercial bank.
“Launching eight tranches
in five currencies and
coordinating with five branches
simultaneously was challenging.
We’ve worked from around
6am yesterday until around 4am
this morning. But overall the
deal went through smoothly
and the robust order book also
showed the strong support from
investors,” said a banker on the
deal.
The response to BOC’s fifth
Silk Road bond comes as a vote
of confidence in China’s massive
infrastructure initiative.
Demand for the deal was
also helped by the thin supply
of senior bonds from Chinese
banks this year, robust market
conditions and BOC’s sound
credit profile, which allowed the
bank to price all the tranches
inside its secondary curve. (See
China Debt capital markets.)
BOC claims to have extended
over US$130bn of credit to BRI
countries and worked on over
600 major projects from 2015
to 2018. It first issued Silk Road
bonds in June 2015, raising
For daily news stories
visit www.ifrasia.com
US$3.55bn-equivalent in US
dollars, euros, Singapore dollars
and offshore renminbi, and
followed up with multi-currency
deals in April 2017 and April
2018, as well as a US dollar issue
in May 2017.
BOC’s Hong Kong branch sold
a US$550m 3.125% five-year
and US$300m 3.625% 10-year at
Treasuries plus 88bp and 120bp,
respectively, well inside initial
guidance of 120bp area and
160bp area.
The 10-year dollar tranche
priced at the tightest spread
for a 10-year Reg S deal from
a Chinese bank, according to
a second banker. The 40bp
tightening from initial guidance
relected the small issue size,
with final orders more than
six times the final print. The
tranche was also the first
10-year note offering from a
Chinese commercial bank since
March 2018.
The Hong Kong branch also
sold HK$6bn (US$765m) of 2.45%
two-year notes at par, 25bp
inside initial guidance of 2.70%
area. This is the largest Hong
Kong dollar deal from a Chinese
commercial bank.
BOC also through
Luxembourg branch sold
US$500m three-year floating-
rate note at three-month Libor
plus 72bp and the Frankfurt
branch sold €500m (US$564m)
0.25% three-year senior note at
mid-swaps plus 48bp.
The Sydney branch issued
A$600m (US$430m) of 3.5-year
floating-rate notes at three-
month BBSW plus 100bp.
The Macau branch issued
Rmb2.5bn (US$372m) 3.10%
one-year and Rmb2bn 3.30%
three-year offshore renminbi
notes.
The bonds, to be issued
off the bank’s US$40bn MTN
programme, all have expected
ratings of A1/A/A, on par with
BOC. „
11
 People
& Markets
TOP STORY PEOPLE MOVES

Citi loses Asia Pacific CEO

US bank’s president Jamie Forese also steps down
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"EFOREûBECOMINGû!SIAû#%/ûINû*UNEûû GLOBALûCONSUMERûBANKING THOMAS BLOTT

Who’s moving where...

„ JP MORGAN has Australia. „ Soon Jin Lim, head with responsibility
selected Takenori Yoneda previously of structuring for for hedge funds
Yoneda to head up worked at Sumitomo South-East Asia, India and institutional
corporate banking in Mitsui Banking and Australia in the investor sales, and
Japan after Takasuke Corporation. Asia Pacific financing Jinzi Huang, a vice
Sekine left the US He will take up his group at CREDIT SUISSE, president with
bank earlier this year. new role on June is leaving the bank. responsibility for loan
Yoneda has been 1 and reports to Lim’s departure is syndication, mainly
with JP Morgan since Oliver Brinkmann, the third in recent for Greater China,
2011, where he has Asia Pacific head of weeks from Credit resigned. Both were
focused on coverage corporate banking, Suisse’s APAC based in Hong Kong.
of Japanese corporate and Steve Rinoie, financing group. In A Credit Suisse
clients in South-East senior country officer mid-March, Juliet spokesperson
Asia, India, China and for Japan. Siette, a director declined to comment.

12 International Financing Review Asia April 13 2019

 Please send job moves to
peoplemarkets@thomsonreuters.com

StanChart fined EQUIPMENTûINCLUDINGûTOûPLACESûWHEREû

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WHOûCOULDûHAVEûBEENûEXPORTINGûMILITARYû THANûûOFûITSûREVENUESûINû!SIAûSETûASIDEû STEVE SLATER

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

„ DEUTSCHE BANK has of global transaction „ Flavian Sim, a for corporate and
hired Jennifer Scott- banking for Asia former loans banker institutional banking.
Gray from Westpac Pacific. She is due to with BNP Paribas, Around a year ago,
Banking Corporation start in May. has joined NATIONAL Sim left BNP Paribas
to head up Scott-Gray was BANK OF KUWAIT after a 15-year
transaction banking previously global as vice president stint, where he was
in Australia. head of trade finance for corporate and managing director in
Based in Sydney, she sales as well as institutional banking. loan capital markets
will report to Anthony global head of trade Sim started work origination, with
Miller, Deutsche’s finance for Australia last week in responsibility for
Australia CEO, and at Westpac. She Singapore and Singapore, South
David Lynne, head previously worked at reports to Michael Korea, Vietnam and
of fixed income and Citigroup and BNY Lim, assistant other South-East
currencies and head Mellon. general manager Asian countries.

International Financing Review Asia April 13 2019 13

 People
& Markets

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LITTLEûCLAMOURûAMONGûINTERNATIONALûBANKSû #ENTREû ûANDû"EIJINGû,ANGXINû THOMAS BLOTT

14 International Financing Review Asia April 13 2019

 Please send job moves to
peoplemarkets@thomsonreuters.com

BNP Paribas !SIAû0ACIlCûANDûLEFTûAûFEWûWEEKSûAGOûAFTERû

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 THOMAS BLOTT THOMAS BLOTT

International Financing Review Asia April 13 2019 15

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IN BRIEF
Mitsubishi UFJ Financial Group
Global markets restructuring
MITSUBISHI UFJ FINANCIAL GROUP is considering
scaling back its bond and equity sales and
trading operations in London and New York
as part of a broader restructuring of its global
markets division, Reuters reported citing two
sources.
MUFG, Japan’s biggest bank by assets, will also
overhaul its Japanese equity business at home
and overseas.
MUFG has yet to finalise the plans, the sources
said, declining to be identified because the
information was not yet public. The size of
the likely reductions was not clear. It was also
unclear how many people are employed in the
affected divisions.
A representative for MUFG said the bank was
16
lNANCEûANDûRISKûOFlCERûATû!0'û!SSETû
progressing in its structural reform plans but
declined to comment further.
The bank aims to redeploy staff elsewhere,
avoiding a material reduction in headcount, the
sources said.
Under its mid-term plan announced last year,
MUFG has been focused on strengthening its
global markets business, which offers bonds,
stocks, currencies and derivative sales and
trading to institutional and corporate clients.
It has been working to bring the group, which
falls under its core banking unit, under the same
management as its Mitsubishi UFJ Morgan
Stanley Securities joint venture and build its
global presence.
However, MUFG’s ambitions have been stymied
by tough competition from US and European
banks and, particularly for bond trading, a
difficult market after years of low interest rates.
International Financing Review Asia April 13 2019
CHRIS WHITTALL
Vietnam
S&P raises sovereign rating one notch
S&P said on April 5 it had raised VIETNAM’s
sovereign credit rating to BB from BB–. It
maintained its stable outlook.
The US rating agency cited strong economic
growth, improvements in the government’s
institutional framework, growing foreign
direct investment inflows and a manageable
external debt burden as reasons for the
upgrade.
S&P’s upgrade brings its issuer rating for
Vietnam in line with that of Fitch and one notch
higher than that of Moody’s.
Last August, Moody’s raised the Vietnam’s
sovereign credit rating to Ba3 from B1 with a
stable outlook.
Last May, Fitch raised the country’s sovereign
rating to BB from BB–. The outlook is also
stable.

AUSTRALIA
DEBT CAPITAL MARKETS
› AMP PRINTS UNDERWHELMING SWISSIE
Troubled Australian financial AMP GROUP,
rated A2/A– (Moody’s/S&P), returned to the
Swiss market on April 3 with a SFr140m
(US$140m) 0.8% 4.25-year senior unsecured
bond issue via Credit Suisse and UBS.
The leads were unable to move on
from initial mid-swaps plus 125bp–130bp
guidance before pricing at the tight end
of the range for a sizeable new issue
concession of 15bp–20bp over AMP’s 0.75%
December 19 2022 bond.
AMP Group raised SFr110m from the
original sale of December 2022s in June
2018. This priced 85bp wide of mid-swaps
having met some pushback from Swiss
investors given the offering’s initial 65bp–
70bp soundings.
The bond was subsequently tapped for
SFr50m in September last year, also with a
85bp mid-swaps margin.
Swiss investors were allotted all of the
new bond with asset managers taking
42.5%, private banks 30%, insurance
companies 11.8%, bank treasuries 9.7%,
pension funds 5.8% and corporates 0.2%.
AMP has struggled to get domestic and
offshore bond deals away as investor baulk
at the financial group’s prominent role in
Australia’s financial scandals.
AMP Group finally got a US dollar deal
over the line on March 7, but it had to pay
up for a modest-sized, short-dated single
note rather than the dual-tranche offering
that was abruptly pulled eight days earlier.
AMP sold a revived US$300m 2.5-year Reg
S bond after a planned accompanying five-
year note was withdrawn when S&P cut the
issuer’s rating from A to A– on March l, while
maintaining the credit’s negative outlook.
AMP, a non-profit life insurer and mutual
society before it was demutualised in 1998, is
widely seen as the biggest casualty of the Royal
Commission inquiry in terms of lost business,
reputation and management fallout.
› SUNCORP NAVIGATES BUSY MARKET
Leading non-major bank SUNCORP-METWAY
(A1/A+/A+) returned to the US market for
the first time in 17 months last Monday
with a well received US$500m 144A/Reg S
COUNTRY REPORT
Australia 17 China 19 Hong Kong 30 India 33 Indonesia 36 Japan 37 Malaysia 38
New Zealand 38 Philippines 39 Singapore 40 South Korea 42 Taiwan 42 Thailand 43
five-year sale via Citigroup, HSBC, JP Morgan
and RBC Capital Markets.
Despite a glut of competing supply, Suncorp
attracted a sizeable US$1.2bn order book,
which allowed the leads to move on from
120bp area initial price thoughts and price the
3.3% April 15 2024s at Treasuries plus 103bp.
This represented a 5bp new issue
concession over Suncorp’s 2.8% May 2022s
and was around 15bp-20bp back of Aa3/
AA–/AA– rated Australian major bank
secondary levels.
It was also close to the high 90s area
where a A1/AA–/AA– rated New Zealand
major would currently come, according to
syndication desks.
Suncorp previously visited the 144A
market in November 2017 with a US$500m
2.375% three-year note. This priced at
Treasuries plus 68bp, or around 18bp wide
of major Australian bank secondary levels.
› VW AUSTRALIA ENGINEERS A$500M DEAL
VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA, rated
A3/BBB+ (Moody’s/S&P), issued a chunky
A$500m four-year senior unsecured bond
last Wednesday arranged by joint lead
managers Mizuho and TD Securities.
The 3.1% April 17 2023s priced at 99.935
for a yield of 3.1175%, inside 160bp area
guidance at asset swaps plus 155bp.
The regular issuer raised A$350m last
August from a sale of 3.5-year medium-term
notes having printed a A$400m three-year
note four months earlier.
› GERMAN AGENCIES RAISE A$200M
Two triple A rated German government-
guaranteed agencies raised a combined
A$200m from the Kangaroo market last
week, with both trades arranged by sole
lead Nomura.
On Monday, RENTENBANK tapped its 3.25%
April 12 2028 bond for A$50m to increase
the size of the line to A$955m.
The reopening priced at 107.296 to yield
2.346%, 41bp wide of asset swaps and
49.5bp over the May 2028 ACGB.
Two days later KFW added A$150m to the
now A$1.7bn 4.0% February 2025 line. This
priced at 110.591 for a yield of 2.0725%,
41bp and 47.75bp wide of asset swaps and
the April 2025 ACGB.
› QUEBEC OPENS 10-YEAR LINE
The PROVINCE OF QUEBEC (Aa2/AA–/AA–) priced
an upsized A$100m 10-year Kangaroo bond
International Financing Review Asia April 13 2019
last Thursday via RBC Capital Markets and TD
Securities.
The 2.6% October 18 2029s priced at
99.317 to yield 2.675%, equivalent to 62bp
over semi-quarterly asset swaps and 80bp
over the November 2029 ACGB.
The deal was increased from a minimum
size of A$65m.
› SOCGEN TIER 2 NETS A$300M
SOCIETE GENERALE (A1/A/A) raised A$300m
from a 15-year non-call 10 subordinated
Tier 2 note sale last Thursday off the bank’s
EMTN programme.
The subordinated note, which is expected
to be rated Baa3/BBB/A–, pays a 4.5% coupon
and priced at par, equivalent to a 10-year
mid-swaps spread of 245.4bp.
Societe Generale was global coordinator
and joint bookrunner with ANZ, Nomura
and TD Securities.
STRUCTURED FINANCE
› LA TROBE SELLS EIGHTH RMBS
Non-bank lender LA TROBE FINANCIAL sold
its eighth non-conforming RMBS last
Thursday, the A$750m (US$535m) LA TROBE
FINANCIAL CAPITAL MARKETS TRUST 2019-1, whose
size was increased from an indicative
A$500m.
Macquarie was arranger and joint lead
manager with CBA, HSBC, NAB, Natixis and
UOB.
The A$135m Class A1S and A$90m Class
A2S notes with 0.33 and 1.30-year WALs
were pre-placed at one-month BBSW plus
85bp and 185bp.
The A$390m A1L and A$38.25m A2L
notes, with 2.72 and 3.98-year WALs priced
142bp and 220bp wide of one-month BBSW.
The A$30.75m Class B, A$24.75m Class
C and A$17.25m Class D, all with 3.65-year
WALs, priced 245bp, 330bp and 425bp over
one-month BBSW.
The retained A$11.25m Class E and
A$6.75m Class F notes, with 2.83 and 4.02-
year WALs, priced at one-month BBSW plus
630bp and 800bp.
The structure was completed by A$6m of
equity notes.
The Class A1 and A2 notes have 30%
and 12.9% credit support. The Class B to F
notes have 8.8%, 5.5%, 3.2%, 1.7% and 0.8%
support, respectively.
La Trobe issued its previous non-
conforming RMBS last November, a no-
17
grow A$750m offering through La Trobe
Financial Capital Markets Trust 2018-2.
The Class A1L notes of La Trobe’s new
RMBS paid 2bp more than the A1L notes
sold five months ago while the new Class B,
C, D and E note spreads came 10bp, 20bp,
15bp and 15bp wider than their equivalent
tranches.
› AFG UPSIZES PRIME ISSUE
AUSTRALIAN FINANCE GROUP issued its seventh
prime RMBS offering on April 5, the
upsized A$500m AFG 2019-1 TRUST.
NAB was arranger and joint lead manager
with ANZ and UOB for the securitisation,
which had an indicative size of A$350m.
The A$95m Class A1 and A$355m Class
A2 notes, with 0.4 and 3.1-year WALs,
priced inside initial 85bp–95bp area and
130bp area guidance at one-month BBSW
plus 83bp and 128bp.
The A$32.5m Class AB, A$7m Class B,
Aussie RMBS spree continues
„ Structured Finance Mortgage specialists step up funding despite house-price fall
Australian mortgage lenders continue to
enjoy easy access to the securitisation market
despite concerns over falling house prices
and surging supply, with only junior RMBS
tranches commanding higher spreads.
The lighter-regulated non-bank sector has
dominated the Australian RMBS market in
2019, in part because of slower credit growth
among the country’s major banks in the wake
of the Royal Commission.
So far this year five non-banks have raised
A$4.3bn (US$3.1bn) from seven prime
and non-conforming RMBS, including two
A$750m offerings last week from PEPPER and
LA TROBE.
Two more firms, LIBERTY and RESIMAC, are
currently in the market with plans to raise
A$700m and A$730m, respectively.
In stark contrast there has been only one
bank issue in 2019 – Westpac’s jumbo A$3bn
funding-only print – with nothing from
regional or mutual banks that have access
to alternative sources of funding through
deposits and senior and covered bond
issuance.
“Securitisations are most non-banks’
primary funding tool which they have been
actively accessing following a slow start
to 2019 as Australian issuers adjusted
to meet new European regulations
introduced on January 1,” said Sarah
Samson, head of securitisation at National
Australia Bank.
18
A$5.5m Class C and A$2.25m Class D notes,
all with 4.4-year WALs, priced 215bp, 250bp,
310bp and 400bp wide of one-month BBSW
versus respective guidance in the 220bp,
250bp. low 300bp and 400bp areas.
Pricing was not disclosed for the A$1.25m
Class E notes, while the transaction was
completed by A$1.5m of retained Class F
notes.
The non-bank lender previously accessed
the market in June 2018 with a A$350m
AFG 2018-1 Trust prime RMBS issue.
The 2018-1 Trust Class A1, Class A2, Class
AB, Class B, Class C and Class E notes priced
70bp, 120bp, 175bp, 195bp, 290bp and
390bp wide of one-month BBSW or 13bp,
8bp, 40bp, 55bp, 20bp and 10bp tighter
than the latest equivalent tranches.
› PRIME PEPPER SELLS A$750M
Non-bank mortgage lender PEPPER GROUP
returned to the RMBS market last Thursday
HOUSE PRICE PAIN
The latest spike in supply has met little
pushback from investors, despite concerns that
non-banks are expanding their share of the
mortgage market at a time when house prices
have started to decline after years of gains.
Prices are down 9.3% nationally from
the peak in 2017, according to Moody’s, and
the rating agency sees more pain ahead,
especially in Sydney and Melbourne where it
now forecasts 9.3% and 11.4% falls in 2019
compared to the 3.3% and 6% reductions
predicted in January.
“We have seen a flurry of pre-Easter issues
that have gone well with many oversubscribed
and upsized deals where senior notes often
priced inside guidance,” Samson said.
Senior notes remain supported by a
reliable and sizeable bid from bank balance
sheet managers looking for a Triple A rated,
repo-eligible asset that offers a bit of juice.
The state of the housing market, however,
has created more caution among real money
investors in subordinated RMBS tranches –
as last week’s deals illustrate.
The Class A1L notes within La Trobe’s
non-conforming RMBS paid 142bp over one-
month BBSW, just 2bp more than the same
tranche last November, while the Pepper
I-Prime 2019-1 Class A1a note priced at 130bp
or 5bp more than last October’s Pepper
I-Prime 2018-2 sale.
There was more price movement in the
International Financing Review Asia April 13 2019
with a capped A$750m-equivalent dual-
currency issue through PEPPER I-PRIME 2019-1.
NAB was arranger and joint lead
manager with CBA and Standard Chartered
Bank for the Australian dollar tranches
and joint lead with Citigroup for the US
dollar note.
The A$225m Class A1a and US$266.5m
Class A1-ul notes with 2.6 and 1.0-year
WALs priced at one-month BBSW plus
135bp and three-month Libor plus 35bp,
respectively.
The A$90m Class A2, A$18.5m Class B,
A$15.5m Class C, A$10.5m Class D, A$7m
Class E and A$4.5m Class F notes priced
210bp, 235bp, 300bp, 400bp, 600bp and
750bp wide of one-month BBSW.
The A$4m Class G notes were retained.
The A1 notes have 20% credit support
while the Class A2 to F notes have 8%,
5.53%, 3.47%, 2.07%, 1.13% and 0.53%
support, respectively.
The new Class A1a note priced 5bp wide
sub tranches with La Trobe’s new Class
B, C, D and E note spreads coming 10bp,
20bp, 15bp and 20bp wider than its previous
offering at 245bp, 330bp, 425bp and 630bp,
respectively.
The new Pepper A2, B, C, D, E, F notes
priced at 210bp, 235bp, 300bp, 400bp,
600bp and 750bp over bank bills or 25bp,
15bp, 25bp, 25bp, 25bp and 75bp more than
the equivalent spreads six months earlier.
ARREARS STAY LOW
Analysts see little risk of further widening
unless falling house prices translate into a
surge of missed mortgage payments. So far,
arrears remain stable and low in comparison
to global peers with prime home-loan arrears
of just 1.45% in January, according to S&P.
Arrears – and, ultimately, mortgage
defaults – are expected to stay low in the
absence of any spike in unemployment and/
or rising interest rates, neither of which
seems likely.
The jobless rate has fallen to an eight-year
low of 4.9% while the next Reserve Bank of
Australia rate move is now predicted to be
downwards.
“RMBS investors are well protected from a
loss perspective while most portfolios tend to
be well diversified across the country and not
solely focused on Sydney and Melbourne,”
Samson said.
JOHN WEAVERS

of last October’s Pepper I-Prime 2018-2 sale.
The new A2, B, C, D, E, F notes paid 25bp,
15bp, 25bp, 25bp, 25bp and 75bp more than
the equivalent spreads six months earlier.
SYNDICATED LOANS
› PERSEUS SIGNS LOAN FOR GOLD MINE
Australian gold miner PERSEUS MINING has
signed a term sheet for a US$150m loan
from three banks to fund its Yaoure Gold
Mine in West Africa, the company said last
Monday.
The US$150m revolving cash facility is
from Macquarie Bank, Nedbank and Societe
Generale.
The interest on the loan will vary with
the company’s leverage and is initially set
at 425bp over Libor.
The company declined to provide details
on the tenor of the loan.
The estimated capital cost for developing
the gold mine is US$265m and will be
funded from the loan, US$80m of cash and
bullion on hand, additional contributions
from future operational cash flows and up
to US$40m in proceeds from exercising of
warrants maturing on April 19.
The funding is subject to Perseus being
granted with the exploration permit from
the government of Cote d’Ivoire, which is
expected to be considered on Wednesday,
and final board approval.
Besides the Yaoure Gold Project in
central Cote d’Ivoire, Perseus has one other
gold mine in operation – the Sissingue Gold
Project – and has licences for exploring
Mahale, Mbengue and Napie.
The company plans to begin full-scale
development of the Yaoure Gold project in
late April, and expects first gold production
in December 2020. In January, it awarded
an engineering and supply contract to
Lycopodium for US$95.1m.
Perseus had US$44.5m of existing debt
with Macquarie Bank as of March 31 2019.
› SAMSON TAPS MORE EXPENSIVE REFI
SAMSON OIL & GAS has raised US$33.5m
through a much more expensive loan
to refinance an existing facility with a
covenant breach since December 2016, the
company said in a statement.
AEP I FINCO LLC, a unit of US-based
middle-market lender Anvil Energy
Partners, is providing the five-year loan to
Samson Oil & Gas.
The interest margin on the new loan
is 1,050bp over Libor, far higher than the
600bp margin on the US$23.9m facility
from Mutual of Omaha Bank that was
refinanced.
Samson Oil & Gas first reported the
breach on general and administrative
covenants on the old loan in early 2017
and managed to win an extension of its
maturity to October 2018 from October
2017. Mutual of Omaha Bank did not take
any action against the borrower despite a
forbearance agreement between the two
expiring on January 15 this year.
› AMP CAPITAL TAPS CLUB FOR ANU BUY
AMP CAPITAL is raising about A$600m
(US$426m) from a club of at least 10 banks
for its acquisition of the Australian National
University’s student accommodation
concession.
The loan has a tenor of seven years and
offers 130bp–135bp over BBSY.
The 10 banks are ANZ, Agricultural Bank of
China, Bank of China, Hana Bank, Industrial &
Commercial Bank of China, ING Bank, KEB HANA
Bank, MUFG, National Australia Bank and
Sumitomo Mitsui Banking Corp.
AMP Capital said last week that two
of its funds – AMP Capital Diversified
Infrastructure Trust and AMP Capital
Core Infrastructure Fund – are buying
the ANU’s student accommodation
concession in a transaction valued at
over A$700m.
The deal includes a 34-year concession
for over 4,184 beds across 10 residences
on the ANU campus in Canberra. The
concession was originally established
in 2016 and includes existing long-term
outsourced facilities and management
arrangements, while the ANU retains
responsibility for operations.
AMP is buying the concession from
equal owners Infratil and Commonwealth
Superannuation Corp.
The deal is expected to be completed in
mid-April.
› GWA ADDS A$25M TO REVOLVER
Building fixtures supplier GWA GROUP has
added A$25m to an existing three-year
syndicated revolving credit facility to fund
its acquisition of METHVEN, the company said
last Wednesday.
The expiry date of the original A$225m
facility is October 2020.
GWA paid A$112m to buy all of the
shares in Methven. The acquisition
was announced in December and was
completed Wednesday.
Following the acquisition, GWA expects
its net debt to Ebitda to be around 1.6x.
As of December 31, Methven had drawn
NZ$30.8m (US$21m) from two loans from
Bank of New Zealand for NZ$30m and £2.5m
(US$3.2m) respectively and maturing in July
2021.
International Financing Review Asia April 13 2019
COUNTRY REPORT CHINA
EQUITY CAPITAL MARKETS
› READYTECH TO RAISE A$50M FROM IPO
READYTECH, an Australian maker of
educational and payroll software, is set to
raise A$50m (US$35.6m) from an ASX IPO
after downsizing the deal from an earlier
proposal of up to A$98.5m.
At A$50m, the float will be the biggest
Australian IPO so far this year.
The deal, which now comprises 11.3m
new shares and 21.9m secondary shares,
is being marketed at A$1.51 a share. The
offer price translates to a 2019 forecast EV/
Ebitda of 10.9 and a market capitalisation
of A$121m.
The original terms were A$17m of
primary shares and A$73m–$82m of
secondary shares in an indicative price
range of A$1.90–$2.54 apiece.
ReadyTech’s owner, private equity firm
Pemba Capital Partners, will keep a stake of
about 43.2% after the IPO.
ReadyTech CEO Marc Washbourne will
cut his stake from 7.3% to 5% post IPO.
Trading in the shares will start on April
23.
ReadyTech operates four software-as-a-
service platforms in areas such as predictive
analytics and behavioural science. It has
over 3,600 clients in the education and
employment sectors, according to the
company’s website.
Macquarie Capital and Wilsons Corporate
Finance are lead managers on the float.
CHINA
DEBT CAPITAL MARKETS
› 21VIANET FUNDS TENDER
21VIANET GROUP last Tuesday priced US$300m
of 2.5-year senior unsecured bonds to fund
a tender offer, drawing orders of over
US$1.4bn.
The new issue priced at 99.722 with a
coupon of 7.875% to yield 8.000%, inside
initial guidance of 8.5% area.
Asian accounts bought 96% of the new
Reg S bonds and European accounts 4%.
By investor type, asset managers and fund
managers took 92%, banks 5%, private
banks and corporates a combined 2%, and
insurers 1%.
The Reg S benchmark bonds are
expected to be rated B1/B+/B+, in line with
the issuer.
Credit Suisse and Barclays were joint
global coordinators. They were also joint
19
 BOC prints eight-tranche BRI bond
„ Bonds Five-currency offering draws strong demand across all tranches
BANK OF CHINA, rated A1/A/A, sold US$3.8bn-
equivalent of Reg S senior bonds in US
dollars, euros, Australian dollars, offshore
renminbi and Hong Kong dollars through five
branches last week to support projects under
China’s Belt and Road Initiative. ( See News.)
The lender’s Hong Kong branch sold a
US$550m 3.125% five-year and US$300m
3.625% 10-year at Treasuries plus 88bp
and 120bp, respectively, well inside initial
guidance of 120bp area and 160bp area.
BOC, Citigroup, Credit Agricole, Mizuho
Securities, China Construction Bank (Asia),
ICBC, JP Morgan, MUFG, Scotiabank and
UBS were joint lead managers and joint
bookrunners.
The five-year tranche attracted final orders
of over US$1.8bn from 55 investors. Asia took
97% of the notes and Europe 3%. By investor
type, 84% went to banks and 16% to asset
managers and fund managers.
Final orders for the 10-year tranche
exceeded US$2bn from 54 accounts.
Geographically, 93% went to Asia and 7% to
Europe. By investor type, 57% went to banks,
19% to central banks, sovereign wealth funds
and insurance, and 24% to asset managers
and fund managers.
The 10-year dollar tranche priced at the
tightest spread for a 10-year Reg S deal
from a Chinese bank, according to a banker.
The 40bp tightening from initial guidance
reflected the small issue size, with final
orders more than six times the final print.
The Hong Kong branch also sold HK$6bn
(US$765m) of 2.45% two-year notes at par,
25bp inside initial guidance of 2.70% area.
This is the largest Hong Kong dollar deal
from a Chinese commercial bank.
bookrunners with Orient Securities (Hong
Kong).
The Chinese internet data centre
services provider will use part of the
proceeds to refinance offshore debt,
including funding a cash tender for its
US$300m 7.0% notes due August 17 2020.
The issuer accepted US$150.839m of bonds
under the offer and will pay US$1,006.25
per US$1,000 in principal amount.
CS and Barclays were also dealer
managers for the tender offer.
State-owned science park operator Tus-
Holdings, which is controlled by Tsinghua
University, held a 21.4% stake in Nasdaq-
listed 21Vianet and 51.0% of its voting
rights at the end of December.
20
Final orders for the tranche passed
HK$9.3bn from 48 buyers. Asia took 99% of
the notes and offshore US 1%. By investor
type, 63% went to banks, 25% to central
banks, 11% to funds and insurance, and 1% to
private banks.
BOC, Citigroup, Bank of Communications,
Commonwealth Bank of Australia, ICBC,
Nomura and Wells Fargo Securities were joint
lead managers and joint bookrunners.
DIVERSE DEMAND
Meanwhile, the Luxembourg branch priced
a US$500m three-year floating-rate note at
three-month Libor plus 72bp, inside initial
95bp area guidance. BOC, Citigroup, Credit
Agricole, Mizuho Securities, Bank of America
Merrill Lynch, Commerzbank and ING were
joint lead managers and joint bookrunners.
Final orders for this tranche were over
US$2bn from 50 investors. Geographically,
85% went to Asia, 13% to Europe and 2%
to offshore US. By investor type, 57% went
to banks, 29% to central banks, sovereign
wealth funds and insurance, and 14% to asset
managers and fund managers.
The Frankfurt branch raised €500m
(US$564m) from a 0.25% three-year senior
note at mid-swaps plus 48bp, inside initial
70bp area guidance. BOC, Citigroup, BNP
Paribas, Commerzbank, Deutsche Bank, LBBW
and UniCredit were joint lead managers and
joint bookrunners. Books were said to have
hit €1.8bn at final spread, excluding interest
from leads. European investors took up 83%
of the bonds.
The Sydney branch priced A$600m
(US$430m) 3.5-year floating-rate notes
at three-month BBSW plus 100bp, inside
› FANTASIA RAISES US$200M
FANTASIA HOLDINGS GROUP, rated B2/B (Moody’s/
S&P), has raised US$200m from a bond
offering for debt refinancing and general
corporate purposes.
The Hong Kong-listed Chinese real estate
company priced the 11.750% three-year
non-call two senior notes at 98.472 to yield
12.375%, the tight end of final guidance of
12.375%-12.500% and inside initial guidance
of 12.625% area.
The Reg S issue has expected ratings of
B3/B (Moody’s/S&P).
UBS, Barclays, CMBC Capital, Guotai Junan
International and Haitong International were
joint global coordinators as well as joint
International Financing Review Asia April 13 2019
initial 104bp area guidance. BOC, Citigroup,
ANZ, Commonwealth Bank of Australia and
Macquarie Bank were joint lead managers
and joint bookrunners.
Final books were over A$1bn from 49
investors. Australia took 78% of the notes
and Asia 22%. By investor type, 90% were
bank balance sheets, 5% middle market and
private banks, 3% asset managers, and 2%
trading and hedge funds.
The Macau branch issued Rmb2.5bn
(US$372m) 3.10% one-year and Rmb2bn
3.30% three-year offshore renminbi notes,
both at par and 30bp inside initial guidance
of 3.40% area and 3.60% area, respectively.
The issue was the largest credit bond
issuance in the Dim Sum bond market since
China’s exchange rate regime reform in
August 2015.
Orders for the one-year tranche finished
at over Rmb3.4bn from 43 investors.
Geographically, 88% went to Asia and 12% to
EMEA. By investor type, 66% went to banks,
16% to funds and insurance, 12% to central
banks, and the rest to private banks.
For the three-year tranche, final orders
exceeded Rmb2.5bn from 38 accounts.
Asia took 67% of the notes, EMEA 31%,
and offshore US 2%. By investor type, 52%
were banks, 32% were funds and insurance
companies, and 16% were private banks and
others.
BOC, Citigroup, China Citic Bank
International, China Construction Bank (Asia),
Credit Agricole, DBS Bank, HSBC, KGI Asia
and Standard Chartered Bank were joint lead
managers and joint bookrunners on the Dim
Sum tranches.
CAROL CHAN, FRANCES YOON
lead managers and joint bookrunners with
China Everbright Bank Hong Kong branch, CMB
International and Deutsche Bank.
› FITCH FLAGS YUHUANG REFI RISK
Fitch said last Thursday that SHANDONG
YUHUANG CHEMICAL faces a heightened
refinancing risk on its onshore and offshore
bonds that mature later this year and early
in 2020.
The Chinese chemicals producer has
Rmb1.5bn (US$223m) of onshore bonds that
will be due or put by bondholders between
May and December 2019 and US$300m
6.625% offshore bonds due in March
2020. But the credit rating agency said

its liquidity on hand is not enough for its
repayment needs, while the bond markets
still appear be closed to the company.
Yuhuang has been repaying its maturing
onshore bonds with internal cash since
a liquidity crisis emerged in mid-2017 at
Hongye Chemical Group, with which it has
an agreement under which both companies
guarantee the other’s bank loans. The
rating agency noted that Yuhuang has
not been able to tap onshore or offshore
debt capital markets since the crisis
unfolded at Hongye, which is undergoing a
restructuring process.
The chemicals producer’s liquidity on
hand will be just enough to cover domestic
bond repayments, with little margin for
error, Fitch said.
It said that Yuhuang plans to re-tap the
onshore bond market in the second half
of this year after Hongye’s restructuring is
completed. But its ability to raise funds will
depend on market conditions and investor
sentiment, including how they respond to
the restructuring.
It said it is likely to downgrade Yuhuang’s
rating if it fails to make progress towards
refinancing its offshore US dollar bond
by mid-2019 or if its 1H19 free cashflow
generation falls short of its expectations.
Fitch currently has a B rating with a
negative outlook on Yuhuang.
› TEWOO PLACED ON RATINGS WATCH
Fitch has placed TEWOO GROUP’s BBB issuer
rating on rating watch negative to reflect
the potential deterioration in the state-
owned Chinese commodities trader’s access
to funding in the short to medium term.
The action follows media reports that
Tewoo is seeking to extend maturities
of debt owed to its key lenders to ease a
liquidity crunch. The news caused some
selling of Tewoo’s US dollar bonds.
Fitch has also placed the BBB ratings on
Tewoo’s three outstanding US dollar senior
unsecured notes and the BBB– rating on its
US$450m 5.80% senior perpetual capital on
ratings watch negative.
The rating agency says that Tewoo’s
management has informed it that it does
not face immediate liquidity needs and no
banks have deemed loans to Tewoo as non-
performing, and as a result, its business
operations remain normal.
However, Fitch notes that even a
temporary curtailment of access to
liquidity “may disproportionately affect
the operations of a commodities trader like
Tewoo”. Hence, the ratings watch negative
will remain in place until Tewoo “provides
satisfactory evidence that its liquidity
position has not materially worsened,”
Fitch said.
According to Fitch, Tewoo has received
reform instructions in early April from the
Tianjin State-Owned Assets Supervision
and Administration Commission and this
will affect some of Tewoo’s subsidiaries.
It is currently in the process of separating
bank loans for each subsidiary that will
be restructured, with terms of the loans
currently being renegotiated.
Fitch said it may downgrade Tewoo’s
rating if there is evidence that its access
to funding has deteriorated and/or there is
weaker likelihood of support from Tianjin
SASAC.
Tewoo’s 5.80% perp, which had slumped
10 points when the news came out on April
3, were quoted at 73.00/74.00 on April 10
afternoon, according to Refinitiv data. Its
4.50% 2019s were quoted at 90.50/91.00,
and its 4.625% 2020s at 88.75/89.25 while its
5.50% 2022s were at 81.001/82.00.
› FOUNDER GROUP PRINTS 3.5-YEAR
PEKING UNIVERSITY FOUNDER GROUP has priced
US$300m 3.5-year senior unsecured notes
at par to yield 7.45%, tightening from initial
guidance of 7.875% area.
Nuoxi Capital is the issuer of the unrated
Reg S notes while Founder Group is the
guarantor.
The Chinese state-owned conglomerate
plans to use the proceeds for general
corporate purposes.
Final statistics were not available at
the time of writing but orders were said
to be over US$1.5bn, including interest
from leads, at the time of releasing final
guidance.
Founder Securities (Hong Kong) Capital, China
International Capital Corp, Barclays, CLSA,
DBS Bank, Guotai Junan International, Haitong
International and CMBC Capital were joint
global coordinators. They were also joint
lead managers and joint bookrunners with
Central Wealth Securities Investment, Orient
Securities (Hong Kong) and China Securities
International.
Peking University owns 70% of Founder
Group and Beijing Zhaorun Investments
Management, a holding company of the
group’s employees, controls the remaining
30%. Founder Group has interests in
information technology, healthcare and
pharmaceuticals, finance and securities,
bulk commodities trading, education and
training.
› GREENLAND FINANCIAL SELLS 364-DAY
GREENLAND FINANCIAL HOLDINGS GROUP has priced
US$200m 364-day senior unsecured notes
at par to yield 6.375%, the tight end of final
guidance of 6.4% (+/-2.5bp) and well inside
initial 6.875% area guidance.
International Financing Review Asia April 13 2019
COUNTRY REPORT CHINA
The Reg S unrated notes will be issued
by indirect wholly owned subsidiary Lv’an
Chuangxing. The bonds will have the
benefit of two separate keepwell deeds
provided by Greenland Financial Holdings
and Greenland Holding Group (Ba1/BB/BB–).
Proceeds will be used for general
working capital purposes.
Final statistics were not available at the
time of writing but orders were said to be
over US$1.2bn at the time final guidance
was released.
Hong Kong-listed China Fortune Financial
Group said in a stock exchange filing that it
has subscribed to US$15.9m of the notes.
Haitong International, HSBC, CMB
International and CMBC Capital were joint
global coordinators as well as joint lead
managers and joint bookrunners with
China Industrial Securities International,
Orient Securities (Hong Kong), China Securities
International, China Citic Bank International and
BOSC International.
› HUAI'AN WATER TAPS FOR DOLLAR BOND
HUAI’AN WATER CONSERVANCY HOLDING GROUP, rated
BBB– (stable) by Pengyuan International,
has hired banks for a proposed offering of
US dollar senior unsecured fixed-rate notes,
subject to market conditions.
Shenwan Hongyuan HK is sole global
coordinator as well as joint lead manager
and joint bookrunner with Huatai Financial
Holdings (Hong Kong) and Industrial Bank Hong
Kong branch.
The issuer, which undertakes water
conservancy, greening, and engineering
project construction, met investors in Hong
Kong and London last week.
The proposed notes have an
expected rating of BBB– from Pengyuan
International.
› HUAIBEI CITY CONSTRUCTION RETURNS
HUAIBEI CITY CONSTRUCTION INVESTMENT HOLDING
GROUP has priced US$150m three-year credit-
enhanced bonds at par to yield 5%, in line
with price guidance.
The deal was its second offshore bond
offering after last November’s debut
US$300m 5.2% three-year bond issue.
The Reg S unrated bonds have the benefit
of an irrevocable standby letter of credit
to be issued by Huishang Bank, the same
structure as last year’s issue.
Proceeds will be used to refinance
onshore debt and for other general working
capital purposes.
Guotai Junan International was the sole
global coordinator and joint bookrunner
with Mizuho Securities, Guoyuan Capital and
Industrial Bank Hong Kong branch.
Huaibei City Construction is the
21
investment and financing vehicle for
urban development under the State-owned
Assets Supervision and Administration
Commission of Huaibei city in Anhui
province.
› MIE GOES AHEAD WITH EXCHANGE
MIE HOLDINGS is proceeding with a bond
exchange offer that will delay an April
redemption despite receiving insufficient
approval from bondholders.
The company said in an exchange
filing that it received valid tenders of
US$265,251,000 in aggregate principal
amount of the existing notes, representing
approximately 84% of the US$315.916m
7.5% bonds.
MIE had said the offer required 90%
approval to go ahead with the exchange,
which would switch bondholders into new
13.75% senior notes due 2022.
The Chinese oil and gas explorer and
producer extended the deadline four times
and sweetened the deal in order to reach
the required threshold ahead of an April 25
maturity.
It had warned that a failure to reach
the approval threshold could prompt it to
pursue alternative arrangements that could
include a debt restructuring, which could
result in bondholders receiving less than
they would under the exchange offer.
The company will now issue
US$248,394,000 in new notes last Friday,
leaving US$50,665,000 in existing notes
remaining. Those notes will have to be
redeemed on April 25.
MIE had struggled to amass sufficient
approvals since the offer was first
announced on March 1.
Originally, MIE offered US$100 in cash
and US$900 in principal amount of new
notes, plus accrued interest, for each
US$1,000 of bonds tendered by the early
bird deadline of March 15, and US$20 in
cash and US$980 in new notes for those
who tendered after that but before the
offer deadline expired on March 22.
On March 25, MIE extended both
deadlines to March 29, meaning that all
bondholders who submitted would be
given the terms originally offered to those
who submitted by the early bird deadline.
It also said it would make an offer to buy
back up to US$30m of the new notes after
completing the sale of a Canadian business.
DF King is information and exchange
agent.
› MODERN LAND SETS MINIMUM YIELD
MODERN LAND (CHINA),
rated B2/B (Moody’s/
Fitch), has announced the tenor and
minimum yield for a new US dollar bond
22
issue, part of an exchange offer for its
senior notes due 2019.
The tenor of the new issue is 2.5 years
and the minimum yield is 12.85%.
Modern Land has invited holders of
its US$500m 6.875% senior notes due
October 20 to exchange them at par, plus
accrued interest, for new notes. It is also
considering raising new money from the
offering.
The Hong Kong-listed Chinese developer
has set the maximum acceptance amount
under the exchange at US$200m, having
previously said it would be US$300m.
Any new money raised will be used to
refinance bonds, finance acquisitions or
development, and for general corporate
purposes.
The deadline for the exchange offer is
April 16 and settlement is expected on or
about April 25.
Credit Suisse, Guotai Junan International and
Morgan Stanley are dealer managers and DF
King is information and exchange agent for
the exchange offer.
Modern Land (China) said the exchange
offer would help to extend its debt maturity
profile and strengthen its balance sheet and
cashflow management.
› PHILIPPINES EYES SECOND PANDA BOND
The Philippines is considering raising
up to US$500m in the Chinese domestic
market from its second Panda bond issue
with tenors of three to five years, National
Treasurer Rosalia V. de Leon said.
The issue might come next week or
the week after. Bank of China is the lead
underwriter, according to people with
knowledge of the matter.
The country is awaiting approval from
China’s National Association of Financial
Market Institutional Investors for the issue.
In March last year, the Philippines sold
Rmb1.46bn three-year Panda bonds at 5%.
› REDSUN PAYS DOUBLE DIGITS
REDSUN PROPERTIES GROUP, rated B/B/BB– (S&P/
Fitch/Lianhe Global), has raised US$300m
from a bond offering for debt refinancing
and general corporate purposes.
The 9.95% three-year non-call two senior
unsecured notes were priced at 97.071 to
yield 11.125%, inside initial guidance of
11.375% area.
The deal drew over US$1.25bn in orders
from 61 accounts, including those from the
joint lead managers. Asia bought 99% of
the notes, and the rest went to European
accounts.
By investor type, asset and fund
managers and insurers bought 71%,
banks and financial institutions 22% and
International Financing Review Asia April 13 2019
corporates and private banks 7%.
The Reg S issue has expected ratings of B/
BB– (Fitch/Lianhe Global).
China International Capital Corp, Barclays,
Credit Suisse and Guotai Junan International
were joint global coordinators. They
were also joint lead managers and joint
bookrunners with UBS, Deutsche Bank, HSBC,
Haitong International, CMB International, Bank
of East Asia, Orient Securities (Hong Kong),
HeungKong Financial and SPDB International.
› SW SECURITIES INTL SELLS NOTES
Hong Kong-listed brokerage SOUTHWEST
SECURITIES INTERNATIONAL SECURITIES has priced
US$200m two-year senior unsecured notes
at par to yield 6.9%, inside initial guidance
of 7.25% area.
The Reg S unrated issue drew final orders
of over US$670m from 45 accounts. Asia
took 99% of the notes and Europe 1%. By
investor type, 75% went to fund managers,
23% to banks and 2% to private banks.
The notes will have the benefit of a
keepwell deed provided by Shanghai-listed
parent company Southwest Securities,
which is indirectly owned by Chongqing
SASAC.
Proceeds will be used for offshore debt
refinancing and to supplement working
capital.
Southwest Securities International, BNP
Paribas, Haitong International, CLSA and
Standard Chartered Bank were joint global
coordinators. They were also joint
bookrunners and joint lead managers
with BoCom International, China Citic Bank
International, China Everbright Bank Hong Kong
branch, CMBC Capital, CMB International,
Founder Securities (Hong Kong) Capital,
Huatai Financial Holdings (Hong Kong), ICBC
International and Orient Securities (Hong Kong).
› SUNAC CHINA PRICES SENIOR BONDS
SUNAC CHINA HOLDINGS, rated Ba3/BB–/BB,
has priced US$750m senior bonds after
drawing over US$1.5bn final orders from 71
accounts.
The 7.95% 4.5-year non-call 2.5 bonds
were priced at 98.891 to yield 8.25%, inside
initial guidance of 8.50% area.
The Reg S issue has expected ratings of
B1/B+/BB.
Asia took 86% of the notes and Europe
14%. By investor type, 50% went to fund
managers, 27% to banks and financial
institutions, and 23% to private banks.
The Hong Kong-listed Chinese real estate
company plans to use the proceeds mainly
for debt refinancing.
HSBC, Morgan Stanley, China Citic Bank
International, China Industrial Securities
International, CMB International, Deutsche Bank,

Guotai Junan International, ICBC International
and Nomura were joint global coordinators,
joint lead managers and joint bookrunners.
› WUXI CONSTRUCTION PRINTS
WUXI CONSTRUCTION AND DEVELOPMENT INVESTMENT,
rated BBB/BBB+ (S&P/Fitch), last Wednesday
priced US$300m 4.5% senior unsecured Reg
S bonds at 99.723 to yield 4.6%, in line with
final guidance.
Orders were over US$3.2bn from 62
accounts, including demand from the
leads. Asia took 99% of the Reg S notes and
Europe 1%.
By investor type, banks and financial
institutions booked a combined 79%, fund
managers and sovereign wealth funds a
combined 19%, and private banks 2%.
Xihui Haiwai I Investment Holdings is
the issuer of the notes, which will carry a
guarantee from Wuxi Construction and are
expected to be rated BBB+ by Fitch.
Standard Chartered, OCBC, China Minsheng
Banking Corp Hong Kong branch, Cinda
International, Industrial Bank Hong Kong
branch, CNCB HK Capital and Shanghai Pudong
Development Bank Hong Kong branch were
joint global coordinators. They were also
joint bookrunners with BoCom International,
Bank of China, Huatai Financial Holdings
(Hong Kong), BOSC International and Bank of
Communications.
Proceeds will be used to refinance
offshore debt.
Wuxi Construction is wholly owned by
the Wuxi municipal government and is the
main government-related entity that carries
out urban infrastructure construction in
the city.
› XINYUAN ISSUES TO FUND TENDER
XINYUAN REAL ESTATE, rated B/B (S&P/Fitch),
on April 4 priced US$200m of 2.5-year
senior unsecured notes at par to yield
14.2%, having tightened from initial price
guidance of 14.5% area.
Strong anchor interest was received after
meetings last Wednesday, according to
leads.
The benchmark Reg S issue has expected
ratings of B–/B (S&P/Fitch).
Proceeds will mainly be used to fund
a concurrent tender offer to buy back
its US$276.6m of 8.125% senior notes
due August 30, or other purchases or
redemptions of outstanding notes, and for
general corporate purposes.
Xinyuan later said it had accepted
US$119.989m of bonds under the tender
offer. The NYSE-listed Chinese property
developer will pay US$1,005 per US$1,000
in principal amount.
UBS, Bank of America Merrill Lynch, Barclays,
Guotai Junan International and Haitong
International were global coordinators and
bookrunners for the new issue, and dealer-
managers for the tender offer.
› YICHANG LGFV SELLS ADDITIONAL BONDS
Chinese local government financing vehicle
YICHANG HIGH-TECH INVESTMENT DEVELOPMENT, rated
BB+ by Fitch, has reopened its 7.50% senior
unsecured notes due December 20 2021
for a tap of US$150m, bringing the total
outstanding to US$200m.
It sold the additional bonds at 100.704 to
yield 7.2%, inside initial guidance of 7.50%
area.
Proceeds from the tap will be used for
general corporate purposes.
The original notes were priced at par last
December. The Reg S notes are rated BB+
by Fitch.
China Minsheng Banking Corp Hong Kong
branch was the sole global coordinator
on the reopening. It was also joint lead
manager and joint bookrunner with Societe
Generale, Haitong International, Huatai Financial
Holdings (Hong Kong), Industrial Bank Hong
Kong branch and Tensant Securities.
YHID, which is owned by the Yichang
municipal government, invests in and
builds public works, such as land and
urban development, industrial parks and
social housing, in the Yichang High-Tech
Development Zone in Hubei province.
› YUYAO IN DOLLAR MARKET
YUYAO ECONOMIC DEVELOPMENT ZONE CONSTRUCTION
INVESTMENT AND DEVELOPMENT was last Friday
marketing US dollar three-year bonds at
initial guidance of 6.2% area.
Final pricing had yet to be announced
when IFR went to press.
The unrated Reg S issue was capped
at US$100m. Yuyao Shuncai Investment
Holding is guaranteeing the senior
unsecured bonds.
Guotai Junan International and Haitong Bank
were joint global coordinators. They were
also joint bookrunners with Giraffe Capital
and BOSC International.
Proceeds will be used to refinance
existing debt and for onshore project
development.
Yuyao Shuncai Investment Holding is
the main asset management and capital
operation platform of Yuyao municipal
government in Zhejiang province, and is
directly controlled by Yuyao State-owned
Assets Supervision and Administration
Commission. The issuer is a wholly owned
subsidiary focused on land development
and property construction in Yuyao,
mainly within the Yuyao Economic
Development Zone.
International Financing Review Asia April 13 2019
COUNTRY REPORT CHINA
› EVERBRIGHT SECURITIES PLANS CP
EVERBRIGHT SECURITIES is planning a Rmb3bn
90-day commercial paper offering this
week, according to a filing on the Shanghai
Clearing House.
The paper, to be issued in China’s
interbank market, will be available to
offshore investors through the Bond
Connect link.
The CP is part of a Rmb12bn debt
programme the issuer registered with the
National Association of Financial Market
Institutional Investors.
Proceeds will be used to replenish capital.
China Merchants Bank is the lead
underwriter. Bank of China, Industrial and
Commercial Bank of China and China Bohai Bank
are joint underwriters.
Bookbuilding will take place on April 16
and settlement will be on April 17.
China Chengxin International assigned
a AAA rating to the issuer and a A-1 rating
to the CP.
› ZHENJIANG CITY ISSUES CP
ZHENJIANG CITY CONSTRUCTION INDUSTRY GROUP,
a local government financing vehicle in
Jiangsu province, issued Rmb500m 240-day
unsecured short-term commercial paper at
4.5% last Monday.
China Everbright Bank is the lead
underwriter and lead bookrunner. Bank of
Nanjing is joint underwriter.
Proceeds will be used for general
corporate purposes and debt repayment.
Shanghai New Century Credit Rating has
assigned AA+ to the issuer.
Financing costs for the issuer have
fallen 30bp compared with short-term
CP of the same maturity issued on
February 19, as the market expects China
Development Bank to provide some
support to the Zhenjiang government
to deal with its debt problems, said a
Beijing-based manager with a securities
company.
China Development Bank has been in
talks with the Zhenjiang government on
providing loans as cheap as 4.9% per year
to help repay debt built up mainly by its
LGFVs, according to people familiar with
the matter.
SYNDICATED LOANS
› ALIBABA SEEKS PRICING CUT, EXTENSION
Chinese e-commerce giant ALIBABA GROUP is
seeking an amendment and extension of its
US$4bn five-year bullet term loan signed in
May 2016.
Credit Suisse, the sole coordinator of the
23
A&E exercise, sent invitations to lenders
earlier this month.
Alibaba is looking to cut the interest
margin to 85bp over Libor, a 25bp
reduction from the current margin of
110bp.
Lenders are being offered a 25bp fee for
the A&E exercise, which will extend the
maturity date by a further five years from
the amendment date.
The deadline for responses is April 26.
The original facility had 25 lenders,
including the eight original MLABs ANZ,
Citigroup, Credit Suisse, Deutsche Bank,
Goldman Sachs, JP Morgan, Mizuho Bank
and Morgan Stanley, when it closed
syndication in 2016. Citigroup was the
facility agent. Lenders were offered a top-
level all-in pricing of 123bp based on the
margin of 110bp over Libor.
Alibaba’s last visit to the loan market
was in May 2017 with a US$5.15bn
five-year club loan. ANZ, BNP Paribas,
Citigroup, Credit Suisse, DBS Bank,
Deutsche, Goldman Sachs, HSBC, ING
Bank, JP Morgan, MUFG, Mizuho and
Morgan Stanley were the lenders on that
deal, which offered an all-in pricing of
102bp based on a margin of 95bp over
Libor.
› BOCOM LEASING PAYS TIGHTER MARGIN
BOCOM LEASING MANAGEMENT HONG KONG, a unit of
Bank of Communications Financial Leasing,
is paying a tighter margin on a US$200m
three-year Green loan than on its parent’s
onshore US$275m loan currently in the
market.
The US$200m bullet term loan pays
100bp over Libor, against 108bp for the
paren’ts loan.
Banks have been invited to join as
mandated lead arrangers with tickets
of US$30m or more for a top-level all-in
pricing of 118bp based on an upfront fee of
54bp, as lead arrangers with commitments
of US$20m–$29m for an all-in of 115bp
through a fee of 45bp and as arrangers with
tickets of US$10m–$19m for an all-in of
113bp based on a 39bp fee. Commitments
are due by April 26.
Mizuho Bank is the sole MLAB, while
BoCom Financial Leasing is providing a
keepwell agreement for the Green loan.
The onshore US$275m three-year term
loan for the parent pays a higher interest
margin of 108bp over Libor and a top-
level all-in pricing of 120bp based on a
remaining average life of 2.675 years.
However, the top-level fee of 32bp is lower.
The MLABs on that deal are HSBC, Standard
Chartered and Sumitomo Mitsui Banking
Corp, and syndication is ongoing.
The US$200m loan will be used in
24
accordance with BoCom Leasing’s Green
Finance Framework. A pre-issuance stage
certificate from the Hong Kong Quality
Assurance Agency will be obtained prior to
the first drawing of the facility.
BoCom Financial Leasing is rated A2
(Moody’s), while both BoCom Financial
Leasing and BoCom Leasing Management
(ONGû+ONGûAREûRATEDû!¦!û30&ITCH 
› CDB FL UNIT WANTS BIGGER NINJA
METRO EXCEL, a fully owned unit of China
Development Bank Financial Leasing, is
expected to increase its three-year Ninja
loan to US$300m from a US$200m target.
Bank of Communications Tokyo branch has
joined as mandated lead arranger and
Shinkin Central Bank as a lender. A few more
banks are in the process of obtaining
internal approvals.
Mizuho Bank is the sole mandated
lead arranger and bookrunner of the
transaction, which comprises a yen tranche
and a US dollar portion.
The all-in pricing is in the low 100s. An
investor presentation meeting was held
in Tokyo last Tuesday. The deadline for
responses is April 25.
Funds are for Metro Excel’s general
funding requirements. CDB Financial
Leasing is providing a keepwell agreement.
Hong Kong-based Metro Excel is CDB
Financial Leasing’s core operating platform
for its overseas non-aircraft leasing
business.
CDB Financial Leasing is rated A1/A/A+.
› CCB LEASING SEEKS US$300M REFI
CCB LEASING (INTERNATIONAL) CORP has launched
an unsecured US$300m three-year bullet
term loan.
Funds are for refinancing a bridge loan
signed by the borrower on January 24 and
for general corporate purposes.
HSBC, Mizuho Bank and Sumitomo Mitsui
Banking Corp are the mandated lead
arrangers and bookrunners of the latest
financing, which pays an interest margin
of 92bp over Libor. CCB Financial Leasing is
providing a keepwell deed.
Banks have been invited to join as lead
arrangers with commitments of US$50m
or more for a top-level all-in pricing of
113bp based on an upfront fee of 63bp, as
arrangers with tickets of US$30m–$49m for
an all-in of 110bp through a fee or 54bp and
as senior managers with US$10m–$29m for
an all-in of 105bp based on a 39bp fee.
A bank presentation was held on April 11
in Hong Kong and commitments are due by
May 10.
CCB Leasing (International), which is
rated A (S&P), is a sister company of the
International Financing Review Asia April 13 2019
keepwell provider, which is in turn rated
A1/A/A.
Shanghai and Hong Kong-listed China
Construction Bank owns both the borrower
and the keepwell provider.
› AGILE SEEKS US$200M LOAN
Hong Kong-listed property developer AGILE
GROUP HOLDINGS is seeking a US$200m three-
year amortising term loan.
Industrial & Commercial Bank of China
Singapore branch is sounding banks on the
deal, which is expected to have an average
life of 2.5 years.
Last December, Agile raised a HK$1.75bn
(then US$224m) three-year term loan from
five banks. ICBC Macau was the MLAB
of the deal, which paid a top-level all-in
pricing of 538bp based on an interest
margin of 380bp over Hibor and an average
life of 2.65 years.
Agile, which has projects in Hong Kong,
cities in China and Kuala Lumpur, is rated
Ba3/BB (Moody’s/S&P).
› SINO BIOPHARM SIGNS US$1BN LOAN
Hong Kong-listed pharmaceutical company
SINO BIOPHARMACEUTICAL signed a US$1bn
three-year term loan on April 9, according
to a stock exchange filing.
Change of control covenants require
Tse Ping and his family members, Cheng
Cheung Ling, and Theresa Y Y Tse and her
family members to together remain the
largest shareholder, owning at least 35%
of the borrower, and Tse Ping to remain
a member of the company’s board of
directors.
The role of chairman must also be
taken up by a family member of Tse Ping
or Theresa Y Y Tse. Theresa Y Y Tse is
currently chairwoman of Sino Biopharm.
Bank of China (Hong Kong), Bank of
Communications Hong Kong branch, Hang Seng
Bank and HSBC were the mandated lead
arrangers and bookrunners on the deal,
which attracted 32 banks in syndication.
The top-level all-in pricing was 185bp based
on an interest margin of 135bp over Libor
and an average life of 2.7 years.
Funds are to refinance a US$300m loan
signed in September 2016 and for general
corporate purposes.
› CPI RONGHE SIGNS US$232M LOAN
signed a two-year
CPI RONGHE FINANCIAL LEASING
loan at US$232m with nine lenders last
Monday.
BNP Paribas, Sumitomo Mitsui Banking Corp and
Westpac were the mandated lead arrangers
and bookrunners of the bullet financing,
which has a one-year extension option.

Twenty-one file for tech board
„ Equities Aspirants plan to raise a combined US$2.5bn from IPOs on new board
Twenty-one more companies filed for IPOs
on the Shanghai tech board between April 4
and April 11, to raise a combined Rmb16.9bn
(US$2.5bn).
BLOOMAGE BIOTECHNOLOGY, which delisted
from the Hong Kong bourse in November
2017, has filed to the Shanghai Stock
Exchange for a proposed Rmb3.2bn
(US$470m) tech board IPO.
The deal is set to be the second largest
proposed float on the new board behind that
of cloud service provider Ucloud Technology,
which plans to raise Rmb4.7bn.
Bloomage, which produces hyaluronic
acid used in medical and skin care products,
is offering 49.6m A-shares, or not less than
10% of its enlarged capital. There is a 15%
greenshoe.
Proceeds will be used to renovate an R&D
centre, build a new production centre in
Tianjin province, and expand the company’s
headquarters in Jinan, Shandong province.
According to its pre-prospectus,
Bloomage’s net profit was Rmb424m in
2018, a 91% increase year on year, on revenue
of Rmb1.26bn.
Huatai United Securities is the sponsor.
VISIONVERA INFORMATION TECHNOLOGY,
a provider of high-definition video
communication products and services, has
filed to the SSE for a proposed tech board
IPO.
The company plans to raise Rmb1.8bn
The interest margin is 120bp over
Libor, but it will step up to 150bp if the
one-year extension is exercised. Lenders
were offered a top-level all-in pricing of
145bp via a 50bp management fee.
The deal was launched at US$300m on a
best-efforts basis.
Funds are for refinancing and general
corporate purposes.
The borrower last raised a US$305.6m-
equivalent debut loan last November.
Deutsche Bank was the MLAB of that
financing, which offered a top-level all-in
pricing of 150bp based on a margin of
120bp and a 60bp fee.
CPI Ronghe is a subsidiary of SPIC
Capital Holdings, which in turn is a fully
owned subsidiary of China’s state-owned
State Power Investment.
CPI Ronghe is mainly engaged
in leasing power and clean-energy
equipment.
For full allocations, see www.ifrasia.com.
through an offer of 40.01m A-shares, or 10%
of its enlarged capital.
According to its pre-prospectus, Visionvera’s
net profit was Rmb475m in 2018, up 585%
year on year, on revenue of Rmb1.15bn.
Proceeds will be used to replenish
a reserve fund for development and
technology, to fund three HD video
communication projects and marketing, to
build or rent a new building for headquarters,
and to replenish working capital.
China Securities is the sponsor.
BEIJING ROBOROCK TECHNOLOGY, backed by
Hong Kong-listed Xiaomi, has filed to the
Shanghai Stock Exchange for a proposed
Rmb1.3bn tech board IPO.
The company plans to offer 16.7m
A-shares, or 25% of its enlarged capital.
Roborock Tech designs and develops
intelligent hardware such as smart cleaning
robots and authorises third-party production.
The proceeds will be used on a data
platform, the launch of a new cleaning robot
project, the development of commercial
cleaning robot products, and to replenish
working capital.
Roborock Tech received an investment
from Xiaomi five months after its founding in
July 2014, becoming one of the members of
the so-called Xiaomi ecological chain.
Founder Chang Jin has a 30.99% stake in
the company, followed by Shunwei Capital
and Tianjin Jinmi as the next two largest
› AOYUAN SIGNS FOUR-BANK CLUB
Hong Kong-listed property developer CHINA
AOYUAN GROUP signed a three-year term
loan at US$164m-equivalent on April 9,
according to a stock exchange filing on
April 12.
Nanyang Commercial Bank was the
coordinator and facility agent. The other
lenders are Bank of East Asia, Hang Seng Bank
and Industrial Bank.
All lenders are mandated lead arrangers
and bookrunners.
The currency splits are HK$1.131bn
(US$144m) and US$200m.
The all-in pricing was 555.6bp based on
an interest margin of 495bp over Libor
or Hibor, an upfront fee of 150bp and an
average life of 2.475 years.
Certain subsidiaries of Aoyuan are
providing joint and several guarantees.
At least 80% of the funds drawn from
the loan must be used for refinancing and
International Financing Review Asia April 13 2019
COUNTRY REPORT CHINA
shareholders. Shunwei Capital, which was
co-founded by Xiaomi founder Jun Lei, owns
a 12.85% stake, while Tianjin Jinmi, an entity
controlled by Xiaomi, owns 11.85%.
Citic Securities is the sponsor.
SHANGHAI MICROPORT ENDOVASCULAR MEDTECH is
the first tech board aspirant that is a spin-off
of a Hong Kong-listed MICROPORT SCIENTIFIC.
The endovascular devices manufacturer
plans to raise Rmb651m through the offer
of 18m A-shares, or not less than 25% of its
enlarged capital. There is a 15% greenshoe.
Proceeds will be used on two artery related
medical instrument projects, a marketing
network and IT service, and to replenish
working capital.
MicroPort Scientific holds a 62% stake in
the company.
The parent company said it would not give
assured entitlements to the majority of its
shareholders for the proposed spin-off as
they are not classified as qualified investors
for the tech board under Chinese regulations.
Guotai Junan and Huajing Securities are
the joint sponsors of the deal.
As of April 11, within 19 working days
since the tech board started accepting
applications, 65 companies have filed to the
SSE to raise a combined Rmb62bn.
Twenty-seven companies have received
the first enquiries from the SSE on their
applications.
KAREN TIAN, FIONA LAU
the remainder will be for working capital,
capital expenditure and general corporate
purposes.
Ownership covenants require Guo Zi
Wen and Guo Zi Ning to remain chairman
and vice chairman, respectively, of
Aoyuan and together to remain the largest
shareholder owning at least 40% of the
borrower and maintain management
control over it.
!OYUANûISûRATEDû""""¦
EQUITY CAPITAL MARKETS
› AB INBEV NEARS HK FILING
ANHEUSER-BUSCH INBEV,the world’s largest
brewer, may apply to the Hong Kong stock
exchange as early as this month for a listing
of its Asian operations, according to people
familiar with the situation.
The company plans to raise at least US$5bn
25
 Hollysys tumbles on ADS sale
„ Equities Surprise sale and vague use of proceeds worry investors
Nasdaq-listed HOLLYSYS AUTOMATION
TECHNOLOGIES saw its shares tumble 23% to
US$17.97 last Tuesday after it announced
a follow-on offer of 7.8m new American
depositary shares.
While multiple Chinese companies have
been successfully raising funds in the US on
the back of strong stock markets, Hollysys
left the market perplexed as to why it needs
the money and its plan backfired.
In a research report, JP Morgan cut
the automation systems maker from
“overweight” to “neutral” as the “the
surprising equity issuance plan may cast
doubt on capital discipline”.
It said the proposed issue would lead to a
13% dilution for existing shareholders, and
expressed surprise at the fundraising plan
since Hollysys has an underutilised balance
sheet and decent cash generation.
The company had a net US$240m of
cash on hand at the end of 2018. Its forecast
annual operating cashflow for the financial
year ending in June 2019 is US$120m,
against insignificant capex plans based on
existing guidance, said the report.
In a filing, Hollysys said it planned to use
the proceeds to expand its product offerings,
invest in research and development and
production capacity, broaden its sales
before the summer holidays, the people said.
The size of the float has not been determined,
and will depend on the stake on offer and the
valuation of the business.
Banks have pitched for a valuation of
as high as US$70bn for the Asia Pacific
operations, said the people. Analysts at
Jefferies, however, valued the regional
business at US$45bn in a report in January.
AB InBev said Asia Pacific generated Ebitda
of US$3.08bn in 2018, up 12.8% on the
previous year. The region accounted for
18% of the group’s business by volume and
14% of its profit.
“The company is likely to sell about
a 20% stake so as to raise a meaningful
amount of funds to ease its debt burden,”
said a banker who pitched for the float.
“In line with our culture, we always look
at opportunities to optimise our business
and drive long-term growth. There is,
however, no decision as to whether we might
undertake an IPO or any other potential
transaction relating to our Asia Pacific
business,” a representative for AB InBev said
in a statement. “We are very committed to
26
and marketing channels, for potential
acquisitions or investments and other general
corporate uses.
JP Morgan expects the market to react
negatively until further clarity is provided on
the intentions behind the equity raising.
Hollysys shares rebounded 4.3% last
Wednesday.
The deal, which was originally scheduled
to price after the US market closed last
Tuesday, will now price on April 16. There is
also a 15% greenshoe.
Citigroup is the sole bookrunner.
TWO MORE DEALS
Hollysys’s troubles contrast with recent
capital raisings in the US, where investors
have welcomed a string of Chinese follow-
ons and convertible bonds this year.
Another two Chinese companies, HUYA and
BAOZUN, raised a combined US$717m in the
US in the past two weeks.
Last Tuesday, a follow-on in NYSE-listed
game streaming company Huya raised
US$442m. The offer, comprising 18.4m ADSs
(74% primary/26% secondary), was priced at
US$24 per share. NYSE-listed social media
company YY was the seller.
The final price represents a discount of
1.4% to the close of US$24.33 last Tuesday.
our business as a long-term investor in the
Asia-Pacific region and remain excited about
the potential of this geography.”
Belgium-based AB InBev, the company
behind Budweiser, Corona and Stella Artois,
had a market capitalisation of €129bn
(US$145bn) on Monday. It is looking to
deleverage towards an “optimal capital
structure” of around 2x net debt to Ebitda,
from 4.6x at the end of 2018.
JP Morgan and Morgan Stanley are leading
the proposed float.
› SHENWAN HONGYUAN LAUNCHES HK IPO
Chinese brokerage SHENWAN HONGYUAN
GROUP last Thursday started bookbuilding
for a Hong Kong IPO of up to HK$9.8bn
(US$1.25bn).
The Shenzhen-listed company is selling
2.5bn shares, or 10% of the enlarged share
capital, in an indicative range of HK$3.63–
$3.93 per share.
The price range represents a 2018 P/B of
1.01–1.08 and a 2019 forecast P/B of 0.91–
0.98. It also represents a 41%–45% discount
International Financing Review Asia April 13 2019
There is a 15% greenshoe with the same
primary and secondary split.
Huya raised US$180m from an IPO last
May. As of last Wednesday, the shares were
up 93% from the IPO price.
Citigroup, Credit Suisse, Goldman Sachs
and Jefferies were the joint bookrunners.
Meanwhile, Nasdaq-listed e-commerce
solutions provider Baozun raised US$275m
through a five-year put-three convertible
bond on April 5. The base deal was
US$225m with an upsize option of US$50m
that was fully exercised.
Baozun loaned ADS to bond purchasers to
enable a US$90m delta placement.
The coupon on the CB was fixed at 1.625%
from the 1.375%–1.875% range and the
conversion premium at the bottom of the
30%–35% range. The company will use
the proceeds for working capital and other
general corporate purposes, including debt
repayment and potential acquisitions.
The delta placing comprised 2.25m shares
sold at US$40 each. The placement price
was at a 9.6% discount to the pre-deal close
of US$44.25. The stock loan facility for the
bonds extends to up to 4.23m ADS.
Credit Suisse and Deutsche Bank were the
joint bookrunners.
FIONA LAU
to the company’s A-share closing price of
Rmb5.66 (US$0.84) last Wednesday.
The institutional books have been
covered after the first day of bookbuilding,
according to people close to the deal.
There is a 15% greenshoe.
There are 13 cornerstone investors taking
up a combined US$829m or about 69% of
the float based on the mid-point of the
price range.
They are ICBC Asset Management
Scheme Nominee (US$300m), Huaxia
Life Insurance (US$100m), China Life
Insurance (Group) (US$80m), China
Reinsurance (Group) (US$50m), New
China Life Insurance (US$50m), State-
Owned Enterprise Structural Adjustment
China Merchants Buyout Fund (US$50m),
Suning International (US$50m), Sichuan
Development (US$49m), Taiping Life
Insurance (US$30m), China Saite (HK)
(US$30m), Changjiang Pension Insurance
(US$20m), Pacific Asset Management
(US$10m) and PICC (US$10m).
The deal is scheduled to price on April 18
and the shares will start trading on April 26.

SZSE questions tech board spin-off
„ Equities Exchange enquiry highlights incomplete regulatory framework
The Shenzhen Stock Exchange has raised
concerns over a company’s plan to spin
off a fast-growing unit for a listing on the
new Shanghai tech board, saying that rules
regarding spin-offs in China are not yet
ready.
Shenzhen-listed printer TUNGKONG said last
Monday that it was considering a separate
listing for wholly owned cloud storage unit
TUNGKONG RUIYUN DATA TECHNOLOGY, with the
Shanghai tech board its preferred venue.
The new board, which was announced
in November by President Xi Jinping to
encourage domestic listings of innovative
companies, has attracted a long list of
IPO candidates since it started accepting
applications last month.
Although the queue includes other
companies with shareholders that are
already listed in China, TungKong is the first
to disclose plans for a spin-off on the new
tech board.
The proceeds will be used to replenish
working capital and fund business
development.
ABC International, Goldman Sachs, ICBC
International and Shenwan Hongyuan HK are
the joint sponsors.
› GUOTAI JUNAN SEC BUILDS WAR CHEST
GUOTAI JUNAN SECURITIES has raised HK$3.17bn
from an upsized primary share placement
in Hong Kong.
The Hong Kong and Shanghai-listed
Chinese brokerage sold 194m shares at a
fixed price of HK$16.34 per share.
The deal was launched with a base size of
166m shares and an upsize option of 73m
share that was partially exercised.
The placement price represents a 7.4%
discount to the company’s pre-deal close of
HK$17.64 last Tuesday.
Books were comfortably oversubscribed
with support from existing shareholders
and new investors. There was participation
from international long-only funds,
hedge funds, family offices and Chinese
institutional investors.
There is a 90-day lock-up on the company.
Proceeds will be used to supplement the
brokerage’s capital base, replenish working
capital and support business development.
Guotai Junan International was the sole
global coordinator and joint bookrunner
with UBS.
The statement from the company raised
eyebrows as China has not yet issued
regulations covering plans by A-share
companies to spin off a business and list it on
another domestic bourse.
There have been a few cases in which
listed companies have floated a business
on another board, but only after the parents
trimmed their stakes to well under 50%.
The establishment of the Shanghai tech
board has raised expectations that China will
soon allow spin-offs.
The China Securities Regulatory
Commission said in a document on the tech
board in January that “a listed company that
reaches a certain scale can legally spin off its
independent and qualified subsidiaries for a
listing on the tech board”.
But no detailed spin-off rules have been
announced since then.
The Shenzhen Stock Exchange has
asked TungKong to explain its plan for the
› VIVA BIOTECH PRE-MARKETS IPO
VIVA BIOTECHstarted pre-marketing for a Hong
Kong IPO of about US$200m–$300m last
Thursday.
Pre-marketing will run until April 17.
The Chinese company provides drug
discovery or incubation services to biotech
startups.
According to a regulatory filing, Viva
Biotech’s offerings includes research,
hit screening, lead optimisation and
drug candidate determination. It also
makes equity investments in potential
biotechnology startups.
As of the end of 2018, it had over
350 early-stage biotechnology and
pharmaceutical clients worldwide.
The company posted a profit and total
comprehensive income of Rmb91m in
2018, up 19% year on year.
CICC is the sole sponsor.
› YUNJI PRE-MARKETS NASDAQ IPO
Social e-commerce company YUNJI started
pre-marketing last Wednesday for a Nasdaq
IPO of about US$200m, according to people
close to the deal.
Credit Suisse, CICC, JP Morgan and Morgan
Stanley are the joint bookrunners.
The company is following in the
footsteps of Pinduoduo, a Chinese discount
e-commerce site which raised US$1.63bn
International Financing Review Asia April 13 2019
COUNTRY REPORT CHINA
subsidiary when there is no clarity yet on the
rules for spin-offs.
The exchange also asked the company
to clarify whether TungKong Ruiyun would
continue to be profitable, whether it would
have a competing relationship with its parent
company and whether it is a core business of
the parent.
In a written response to the stock
exchange last Thursday, TungKong said
the company decided to propose a spin-off
even though rules on spin-offs are not ready
because fast-growing TungKong Ruiyun
Data has continuous funding needs. As such,
getting the unit ready for a listing could help
speed up the spin-off process once rules are
in place.
TungKong’s shares, which rose 2.2% to
Rmb21.80 on Tuesday, fell during the three
subsequent sessions to trade at Rmb20.52
shortly before the close on Friday.
KAREN TIAN, FIONA LAU
from a Nasdaq IPO in July.
Founded in 2015, Yunji had more than 23
million buyers on its platform in 2018. Its
gross merchandise value was Rmb22.7bn in
2018, up 136% from 2017.
The company posted a net loss of
Rmb60m in 2018, compared with a
Rmb106m loss in 2017.
Yunji allows registered users to open
stores on its systems. The users promote
their stores via WeChat and do not have to
hold inventory as Yunji handles the supply
chain.
› DUIBA PRE-MARKETS HK IPO
DUIBA, a Chinese mobile advertising
company, last Monday started pre-
marketing a Hong Kong IPO of about
US$100m.
Pre-marketing will run until April 18,
according to a term-sheet.
Founded in 2014, Duiba is a user
management software as a service (“SaaS”)
provider for online business and an
interactive advertising platform operator
in China.
The company posted a loss of Rmb292m
in 2018 mainly because of incurred fair value
losses on redeemable preference shares.
Adjusted profit for the year was Rmb205m,
compared with Rmb118m in 2017.
CMB International and HSBC are the joint
sponsors.
27
› HEBEI HIGHWAY PLANS US$400M IPO
HEBEI HIGHWAY DEVELOPMENT is planning to raise
about US$300m–$400m from a Hong Kong
IPO this year, according to people close to
the deal.
CCB International, CICC and HSBC are
leading the transaction.
The company operates and invests in six
highways in Hebei. It posted a net profit
of Rmb68m for the first half of 2018, up
17.7% year on year. Its total assets stood at
Rmb51bn at the end of June last year.
› SO-YOUNG FILES FOR US IPO
SO-YOUNG INTERNATIONAL, a Chinese social
network focused on plastic surgery, has
filed for a US IPO to raise up to US$150m.
The Beijing-based company, founded
in 2013, allows customers to share and
rate their cosmetic surgeries through its
app and websites and to select cosmetic
surgeons to book procedures.
It had over 240 million average monthly
viewers in the fourth quarter of 2018 and
facilitated medical aesthetic treatment
worth Rmb2.1bn last year, according to a
filing.
The company posted a net income of
Rmb55m in 2018, up from Rmb17m a year
before.
So-Young counts Tencent Holdings, CDH
Investments, Trustbridge Partners and Apax
Partners among its shareholders.
Deutsche Bank and CICC are the
underwriters of the float.
› CHINA NEW HIGHER EDUCATION TOPS UP
Hong Kong-listed CHINA NEW HIGHER EDUCATION
GROUP has raised HK$393m from a top-up
placement after pricing the deal at HK$3.57
a share.
The company sold 110m primary shares,
or 7.1% of the enlarged share capital, at a
discount of 9.2% to the pre-deal close of
HK$3.93 on April 9.
The deal was marketed in an indicative
price range of HK$3.54–$3.64 each.
The books were oversubscribed multiple
times with participation from international
institutions and existing shareholders.
Demand mainly came from Asia.
There is a 60-day lock-up on the company
and the top-up vendor.
Proceeds will be used for debt repayment
and general corporate purposes.
CLSA is the sole placing agent.
› HANSOH PHARMA RE-FILES HK IPO
HANSOH PHARMACEUTICAL GROUPhas refiled an
application for a Hong Kong IPO of about
US$1bn and aims to list by the summer,
28
according to people close to the deal.
The Chinese drugmaker’s earlier listing
application to the Stock Exchange of Hong
Kong was filed in September and has
expired.
Hansoh first planned a listing of up to
US$1.5bn in 2016 via Morgan Stanley and
UBS but it did not proceed with the deal.
The company has 13 main products
focusing on the central nervous system,
oncology, anti-infectives and diabetes.
The company posted a net profit of
Rmb1.9bn last year, up from Rmb1.6bn in
2017.
Hansoh founder Zhong Huijuan and
her daughter Sun Yuan own a 78% stake
in the company. Zhong is the wife of
Sun Piaoyang, who owns a 24% stake in
Shanghai-listed Jiangsu Hengrui Medicine,
the largest pharmaceutical company in
Lianyungang, Jiangsu province.
Citigroup and Morgan Stanley are joint
sponsors.
› ZENGAME TECHNOLOGY PRICES IPO
Mobile games developer ZENGAME TECHNOLOGY
has raised HK$221m from a Hong Kong
IPO after pricing the deal slightly above
the mid-point of the indicative price range,
according to people close to the deal.
The company sold 180m primary shares,
or 18% of the enlarged share capital, at
HK$1.23 each, versus the range of HK$1.12–
$1.32.
The books were multiple times covered,
with participation from long-only, strategic
buyers, hedge funds and high-net-worth
investors, according to one of the people.
There was a good mix of international and
domestic investors.
There is an overallotment option of 15%
of the base deal.
The shares are slated to be listed on April
16.Cornerstone investors Li Weiwei and Yao
Shuobin each committed HK$10m to the
deal.
Most of the proceeds will be used
to strengthen the company’s R&D and
marketing capabilities, as well as to acquire
other games businesses and expand into
overseas markets. The remainder will be
used for general corporate purposes and
working capital.
Guotai Junan International is the sole
sponsor of the deal.
› ZHONGGU LOGISTICS PLANS IPO
SHANGHAI ZHONGGU LOGISTICS, a container
shipping company specialising in the
domestic Chinese market, plans to raise
Rmb1.5bn from a proposed Shanghai IPO.
The company is offering 81.9m A-shares,
or not less than 10% of its enlarged capital.
International Financing Review Asia April 13 2019
Proceeds will be used to buy six container
ships and more containers.
According to the French research
institute Alphaliner, as of December 31
2018, the company ranked 15th in the
world and in the top three in China for
total shipping capacity.
CICC is the sponsor.
› HYET FILES FOR SHENZHEN IPO
HUNAN YUSSEN ENERGY TECHNOLOGY plans to raise
Rmb1bn from a proposed Shenzhen IPO.
The company, which mainly engages in
R&D and sales of chemical products based
on LPG, plans to issue 28.4m A-shares, or
25% of its enlarged capital.
Proceeds will be used to replenish
working capital and add a new chemical
production line for its subsidiary, Yussen
New Material.
Essence Securities is the sponsor.
› CANSINO BIO EXERCISES GREENSHOE
Chinese vaccine manufacturer CANSINO
BIOLOGICS has fully exercised an
overallotment option following its Hong
Kong IPO, lifting the total deal size to
HK$1.35bn.
CanSino’s share price has almost doubled
since its debut on March 28, closing at
HK$42.20 last Wednesday, up 92% from the
offer price of HK$22.00 a share.
The company fully exercised an
overallotment option of 4.45m shares,
representing about 7.8% of the base deal, at
the issue price of HK$22 apiece. The base
deal comprised 57.2m shares.
Tianjin-based CanSino, established in
2009, is developing 15 vaccine candidates
in 12 disease areas. It has three near-
commercial assets covering meningococcal
diseases and the Ebola virus.
CLSA and Morgan Stanley are the sponsors.
› CSRC RESUMES REVIEW OF GYT
The China Securities Regulatory
Commission has resumed its review of the
proposed A-share IPO of Hong Kong-listed
GUANGDONG YUEYUN TRANSPORTATION, according
to an announcement from the company.
The review was suspended on February
18 because of an ongoing investigation
by the CSRC of Beijing China Enterprise
Appraisals, which had provided the
company an asset valuation report in 2012.
According to local media reports, China
Enterprise allegedly breached securities
laws and regulations at the time of the
acquisition of Advision Media by Guangdong
Guangzhou Daily Media in 2014.
The bus service provider filed for a
proposed Shenzhen IPO last September.

It plans to sell 88.9m A-shares to raise
Rmb1bn. Citic Securities is the sponsor.
Yueyun Transportation shares closed at
HK$3.22 on April 11, up 1.9%.
› THREE IPOS GET CSRC'S FINAL APPROVAL
The China Securities Regulatory
Commission has given final IPO approvals
to three companies with a combined
fundraising target of Rmb2.5bn.
LAKALA PAYMENT, backed by Hong Kong-
listed Lenovo Group, has the largest target
of the three aspirants. The Chinese third-
party payment company aims to raise
Rmb1.3bn from a proposed Shenzhen
ChiNext IPO by issuing 40.01m A-shares, or
10% of its enlarged capital.
The company cut its fundraising target
from Rmb2bn, according to its prospectus.
Proceeds will be used to upgrade
online payment channels and offline POS
machines.
According to its pre-prospectus, Lakala’s
net profit was Rmb606m in 2018 on
revenue of Rmb5.7bn. This compares with
net profits of Rmb464m and Rmb326m on
revenues of Rmb2.8bn and Rmb2.6bn in
2017 and 2016, respectively.
The company is set to conduct pricing
consultation on April 10 and 11.
The IPO price of the offer will be
announced on April 12 and books will open
for a day on April 16.
China Securities is the sponsor.
NANJING CHERVON AUTO PRECISION TECHNOLOGY,
an automotive key component
manufacturer, and wind turbine producer
ZHEJIANG WINDEY plan Shanghai and Shenzhen
ChiNext listings to raise Rmb651m and
Rmb590m, respectively. CICC and Caitong
Securities are their respective sponsors.
› FOUR CLEAR CSRC IPO HEARING
Four out of five companies attending a
China Securities Regulatory Commission
hearing on April 11 were cleared for
A-shares IPOs worth a combined Rmb9.2bn.
The fundraising target of NINGXIA BAOFENG
ENERGY GROUP is the highest among the five.
The coal chemicals producer plans to
raise Rmb8bn from a proposed Shanghai
IPO, issuing up to 733m A-shares, or not
less than 10% of its enlarged capital.
It plans to use Rmb7.4bn of the proceeds
to upgrade a coke gasification production
unit and Rmb600m to repay bank loans.
Baofeng Energy posted a net profit of
Rmb3.7bn in 2018, up 26% from a year
earlier, according to a filing.
Its controlling shareholder and
chairman of the board Dang Yanbao also
controls Hong Kong-listed China Baofeng
(International).
Citic Securities is the sponsor.
The other three companies which
cleared the hearing are QINGDAO HUICHENG
ENVIRONMENTAL TECHNOLOGY (Rmb348m),
SHENZHEN NEW LAND TOOL PLANNING & ARCHITECTURAL
DESIGN(Rmb434m) and GUANGDONG SONGYANG
RECYCLE RESOURCES (Rmb456m). Their sponsors
are Zhong De Securities, Haitong Securities and
Yingda Securities, respectively.
SUZHOU PLANNING & DESIGN RESEARCH INSTITUTE
was rejected at that hearing. It plans
to raise Rmb270m from a ChiNext IPO.
Soochow Securities is the sponsor.
› YUEXIU REIT EB GOES LOW
Yuexiu Property has raised HK$1.1bn from
the sale of a bond exchangeable into shares
of YUEXIU REAL ESTATE INVESTMENT TRUST.
The 363-day EB was marketed at a
coupon/yield-to-maturity of 1%–2% and
exchange premium of 2.5%–5.0%.
It was priced at a 1.875% coupon/yield-to-
maturity and a 2.5% exchange premium.
The EB was sold at attractive terms for
investors after a few REIT equity-linked
deals in Asia Pacific had to be reoffered
below par to attract demand.
Two weeks ago, Keppel Real Estate
Investment Trust reoffered a S$200m
(US$147m) five-year put-three CB at 98.5. In
March, ASX-listed REIT Dexus had to reoffer
a A$425m (US$302m) issue at 99.
Link REIT, which sold a HK$4bn Green
CB a week earlier than Dexus, was believed
to have exhausted most of the demand for
REIT paper.
“We have too many REIT deals out there
that are not working. We need something
that works well for the issuers and
investors,” said a person close to the Yuexiu
deal.
Yuexiu Property needs to trim its position
in Yuexiu REIT and an EB with such a low
exchange premium basically means a very
high chance of conversion. An EB also
allows the issuer to offload its position at a
premium to market prices.
In an announcement, Yuexiu Property
said the EB is an attractive way to dispose
of a certain number of units in Yuexiu
REIT as it is expected to receive additional
units from the REIT in the form of deferred
consideration units in connection with the
sale of Guangzhou International Finance
Center to the REIT in 2012.
The stake which Yuexiu Property,
together with its subsidiaries, holds in
Yuexiu REIT will be lowered to 30.2% from
36.4% if the EB is fully exchanged.
The books were about three times
covered with around 30 investors
participating. The top 10 investors took
about 75% of the deal.
Credit spread was assumed at 120bp,
International Financing Review Asia April 13 2019
COUNTRY REPORT CHINA
stock slippage at 5% and bond floor at 98.8.
DBS, HSBC and Nomura were the joint
bookrunners.
The EB traded at 100.6/100.8 in the
secondary market last Wednesday.
› CNNP TO LAUNCH SIX-YEAR CB
Shanghai-listed CHINA NATIONAL NUCLEAR POWER
plans to issue a six-year convertible bond to
raise Rmb7.8bn.
Books will open on April 15.
The CB will pay a coupon of 0.2% in year
one before stepping up to 2.0% in year six.
The initial conversion price has been set at
Rmb6.32, representing a discount of 0.15%
to the company’s closing price of Rmb6.33
on April 10.
The CB has a AAA rating from United
Ratings.
China National Nuclear Corporation
holds a 70.4% stake in the company and
has committed to subscribe to Rmb5.4bn or
69% of the CB.
The state-owned company will use the
proceeds to expand two nuclear power
plants in the coastal provinces of Jiangsu
and Fujian.
Its shares closed at Rmb6.33 on April 11,
unchanged from the previous day.
Citic Securities is the sponsor of the deal
and joint bookrunner with CICC.
› SKYWORTH LAUNCHES SIX-YEAR CB
Shenzhen-listed SKYWORTH DIGITAL plans to
open the books for a Rmb1.04bn six-year
convertible bond on April 15.
The CB will pay a coupon of 0.4% in year
one before stepping up to 4.0% in year six.
The initial conversion price has been set at
Rmb11.56, representing a discount of 0.3%
to the company’s closing price of Rmb11.60
last Wednesday.
The CB has a AA rating from China
Chengxin Securities Rating.
The multimedia terminal manufacturer
will use the proceeds to upgrade TV
terminal and intelligent driving assistance
system projects.
Its shares were down 1.38% at Rmb11.44
on Thursday afternoon.
Citic Securities is the sponsor.
› SHENNAN CIRCUITS PLANS SIX-YEAR CB
SHENNAN CIRCUITS, a manufacturer of printed
circuit boards, plans to offer a Rmb1.5bn
six-year convertible bond.
The Shenzhen-listed company will use
the proceeds on a printed circuit board
investment project and to replenish
working capital.
The CB proposal still needs approval
from shareholders.
29
 Home Credit Group launches €650m refi
„ Loans Multi-national consumer finance company taps banks in Asia and Europe
Netherlands-based financial services provider
HOME CREDIT GROUP launched a €650m
(US$733m) bullet term loan last Monday.
HSBC is the global coordinator and
mandated lead arranger and bookrunner,
while Goldman Sachs International, ING
Bank and Societe Generale are MLABs of the
financing, which is split between a two-year
tranche (tranche A) and a three-year portion
(tranche B).
The interest margins are 350bp and
380bp over three-month Euribor for tranches
A and B, respectively.
Banks have been invited to join tranche A
or B or both tranches with commitments of
€90m or more for the MLA title, €51m–€89m
for the lead arranger title and €50m or less
for the arranger title.
Tranche A pays upfront fees of 100bp
(MLAs), 75bp (lead arrangers) and 35bp
(arrangers). Portion B offers fees of 125bp,
97.5bp and 47.5bp for the respective
commitment levels.
Both tranches pay commitment fees of
› XIANHE PLANS SIX-YEAR CB
Chinese paper manufacturer XIANHE has
said it plans to issue a Rmb1.25bn six-year
convertible bond. The initial conversion
price will be not less than the average
A-share price in the 20 trading days before
the final CB prospectus is issued, it said.
Xianhe produces speciality paper, pulp,
paper products, and relevant chemical
additives. It will use the proceeds on a new
material paper products and to replenish
working capital.
The company raised Rmb583m from a
Shanghai IPO last April.
The shares of the company opened at
Rmb19.19 on April 10, down 2%. The CB
proposal needs approval from shareholders.
HONG KONG
DEBT CAPITAL MARKETS
› CK HUTCHISON PRINTS DUAL-TRANCHE
Hong Kong conglomerate CK HUTCHISON
HOLDINGShas priced US$1.5bn dual-tranche
senior unsecured bonds after drawing
30
35% of the respective margins and have a
one-year extension option. The entire deal
has a €200m greenshoe option.
A bank presentation will be held in Prague
on April 16. Commitments are due by May 10.
Funds are for refinancing a €650m facility
raised in June 2017 and to fund equity
injections into Home Credit Group’s Asian
subsidiaries.
Home Credit BV, a Netherlands-
incorporated subsidiary of Home Credit
Group, raised the €650m two-year term loan
in June 2017 from 16 lenders, including a few
banks in Asia, according to LPC data. The
MLABs were HSBC, Industrial & Commercial
Bank of China, ING and SG. The facility pays
an interest margin of 400bp over Euribor and
offered a top-level upfront fee of 100bp.
Last year, Home Credit Group became the
ultimate holding company of Home Credit
group companies, which it holds through
Home Credit BV, the previous ultimate
holding company of the group. The Home
Credit group comprises consumer finance
over US$2.8bn final orders.
A US$750m 3.250% five-year tranche and
a US$750m 3.625% 10-year tranche were
priced at Treasuries plus 95bp and 120bp,
respectively, inside initial guidance of
115bp and 145bp area.
The five-year tranche attracted final
orders of over US$1.4bn from 90 accounts.
Asia took 38% of the notes, the US 40% and
Europe 22%. By investor type, 36% went to
asset managers and fund managers, 36%
to banks, 14% to insurers, pensions and
central banks, 12% to corporate treasury,
and 2% to private banks.
Final orders for the 10-year tranche
were over US$1.4bn from 85 accounts.
Asia took 36% of the notes, the US 34% and
Europe 30%. By investor type, 45% went to
asset managers and fund managers, 13%
to banks, 38% to insurers, pensions and
central banks, 3% to corporate treasury, and
1% to private banks.
CK Hutchison International (19) Limited
is the issuer and the Hong Kong-listed
parent company is the guarantor.
The 144A/Reg S issue has expected
ratings of A2/A/A–, on par with the
guarantor.
Proceeds will be used for debt
refinancing and general corporate
purposes, including capital expenditure.
Citigroup, Credit Agricole, Goldman Sachs,
International Financing Review Asia April 13 2019
companies operating in China, Vietnam,
India, Indonesia, the Philippines, Russia,
Kazakhstan, the Czech Republic, Slovakia
and the US.
Last October, Home Credit Group replaced
Home Credit BV as the issuer of a Kc1.998bn
(US$88m) bond due in 2020.
The Asian operations of Home Credit Group
are also regular borrowers in the loan market.
In February, Tianjin-based Home Credit
Consumer Finance launched a one-year term
loan of up to Rmb1.8bn (then US$268m).
In the same month, Home Credit Vietnam
Finance launched a US$50m three-year term
loan.
Home Credit Indonesia made its debut in
the syndicated loan markets in January with a
Rp800bn (then US$57m) one-year loan.
Last October, HC Consumer Finance
Philippines signed a Ps6.5bn (US$124m)
one-year term loan with eight banks.
European investment company PPF Group
holds 88.62% of Home Credit Group.
APPLE LAM
Mizuho Securities and Morgan Stanley were
joint bookrunners.
› IFC DEVELOPMENT PRINTS 10-YEAR
IFC DEVELOPMENT, rated A2/A (Moody’s/S&P),
has priced US$500m senior unsecured notes
after drawing over US$1.1bn final orders
from 79 accounts.
The 3.625% 10-year bonds were priced at
98.933 to yield 3.754%, or Treasuries plus
125bp, well inside initial guidance of 145bp
area.
IFC Development (Corporate Treasury)
is the issuer and IFC Development is the
guarantor.
The Reg S issue has expected ratings of
A2/A (Moody’s/S&P).
Asia took 94% of the notes and Europe
6%. By investor type. 51% went to fund
managers, 32% to banks, 10% to insurers
and the public sector, and 7% to private
banks and corporates.
IFC Development is a joint venture
of Sun Hung Kai Properties, Henderson
Land Development and Hong Kong and
China Gas. Its principal asset is the IFC
commercial complex in Hong Kong’s
Central waterfront district.
Proceeds from the bond offering will
be used to refinance borrowings and for
general corporate purposes.

Longreach seeks funding to buy stake
„ Loans Hong Kong-based PE firm taps loan for purchase of stake in medical devices manufacturer
Hong Kong-based private equity firm
Longreach Group has launched a US$42.5m
five-year facility to back its acquisition
of a majority stake in medical devices
manufacturer QUASAR ENGINEERING.
Mandated lead arranger and bookrunner T
aishin International Bank has fully underwritten
the deal. It pre-funded the facility on April 2
after signing it on January 30.
The deal comprises a US$38m amortising
term loan (tranche A) and a US$4.5m
revolving credit facility (tranche B). It pays an
interest margin of 375bp over Libor and has a
remaining blended average life of 3.58 years.
Banks have been invited to join tranches
A and B on a pro-rata basis as MLAs with
commitments of US$10m or more for a
The company’s US$500m 2.375% bonds
are due next month.
Bank of China, DBS Bank, HSBC, Mizuho
Securities and Morgan Stanley were joint
global coordinators and joint bookrunners
on the transaction. They were also joint
lead managers with SMBC Nikko.
SYNDICATED LOANS
› LOAN ADDED FOR CITYPLAZA BUY
Private equity firm GAW CAPITAL PARTNERS
and HENGLI GROUP have signed a HK$1.57bn
(US$200m) three-year mezzanine loan to
partially finance their acquisition of office
towers Cityplaza Three and Four in Hong
Kong’s Taikoo district.
A group of investors including Standard
Chartered, ICBC International and individual
investors provided the mezz financing last
week. It complements a HK$8.33bn three-
year leveraged buyout senior facility that
closed last month.
Ten banks joined mandated lead
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top-level all-in pricing of 416.9bp based on
an upfront fee of 150bp and lead arrangers
with tickets of US$5m–$9.5m for an all-in of
402.9bp through a fee of 100bp.
Commitments are due by May 10.
Tranche A was for financing the acquisition,
which was completed on April 2, and tranche
B is for general corporate purposes.
The family of Israeli entrepreneur and
Quasar Engineering’s founder, Boaz Amitai,
has retained a minority stake in the company.
Established in Hong Kong in 1988, Quasar
Engineering makes medical devices such as
cardiovascular diagnostic and therapeutic
catheters. It has a factory in Shenzhen and
another in Dongguan. QIL Engineering,
the company’s subsidiary based in Israel,
arrangers and bookrunners StanChart and
United Overseas Bank on the senior loan
and are expected to be substituted into the
deal in May.
The senior loan paid a top-level all-in
pricing of 168bp based on an interest margin
of 130bp over Hibor. The target properties
form the security for the financing.
The borrower is Harmony Lotus, which is
incorporated in Hong Kong.
The two sponsors announced that the
HK$15bn acquisition was completed last
Thursday.
Hong Kong-based Gaw Capital is focussed
on real estate, while Hengli Group develops
hotels, residential and commercial
properties, refines oil and produces textiles.
› CHEUNG KEI PAYS UP ON FIVE-YEAR CLUB
Shenzhen-headquartered Cheung Kei Group is
offering higher pricing for its HK$4.615bn five-
year club loan than it did for a loan in 2016.
The latest facility offers all-in pricing
of 190.9bp based on an interest margin of
180bp over Hibor, an upfront fee of 50bp
International Financing Review Asia April 13 2019
COUNTRY REPORT HONG KONG
designs the group’s products and develops
manufacturing processes for new products.
Longreach Group, which also has
operations in Tokyo, invests in the
technology, food and beverage, business
process outsourcing, manufacturing, financial
and logistics sectors in Japan and Greater
China. It is also a shareholder of EnTie
Commercial Bank.
In February 2015, Longreach Group
raised a six-year loan of about ¥15bn (then
US$126m) to support its buyout of Japanese
bridal jewellery maker Primo Japan. MLAB
Mizuho Bank brought three banks into
the deal, which pays an interest margin of
slightly more than 200bp over yen Libor.
APPLE LAM
and an average life of 4.6075 years.
Funds are to refinance a HK$3.15bn
five-year term loan signed in December
2016, which paid a lower all-in pricing of
150.75bp based on a margin of 140bp over
Hibor and an average life of 4.65 years.
Both deals are secured by Cheung Kei
Center in Hung Hom.
Hang Seng Bank is the coordinator of the
latest club deal, which is ongoing. The
borrower is CHEUNG KEI CENTER.
Repayments will take place through 17
quarterly instalments after a year’s grace
period: 1% (12th, 15th, 18th, 21st, 24th,
27th, 30th, 33rd, 36th and 39th months),
2% (42nd, 45th, 48th, 51st, 54th and 57th
months) and 78% (60th month).
Mandated lead arranger and bookrunner
CMB Wing Lung Bank and three other
banks participated in the 2016 loan, which
comprised a HK$1.8bn portion for buying
the property – then known as the East
Office Tower and the East Retail Villa of One
HarbourGate – for HK$4.5bn from Wheelock
Properties (Hong Kong), while the remaining
HK$1.35bn was for working capital.
31
 The property was renamed Cheung Kei
Center after the acquisition was completed.
Cheung Kei Group, a financial and
property investment company owned
by tycoon Chen Hongtian, has invested
in properties in Hong Kong, Shenzhen,
Shanghai, Foshan, Zhuhai and London.
› NEW WORLD CHINA LAND SEEKS LOAN
Property developer NEW WORLD CHINA LAND, the
mainland Chinese property arm of Hong
Kong-listed New World Development, has
launched an unsecured HK$4.5bn facility.
New World Development is providing a
guarantee for the loan, which is mainly for
refinancing.
China Construction Bank (Asia) is the
mandated lead arranger and bookrunner of
the financing, which comprises a HK$1.5bn
three-year bullet term loan, a HK$1.5bn
five-year term loan and a HK$1.5bn five-
year revolving credit facility. The MLAB is
not syndicating the five-year tranches.
The three-year tranche pays an interest
margin of 85bp over Hibor. Banks have
been invited to join this portion as lead
arrangers with commitments of HK$300m
or more for a top-level all-in pricing of
103bp based on an upfront fee of 54bp or
as arrangers with HK$100m–$290m for
an all-in of 101bp through a fee of 48bp.
Commitments are due by April 18.
The entire facility can be increased up to
HK$6bn.
New World China Land raised a
HK$4.5bn term loan in June 2015. MLABs
Bank of China Hong Kong, DBS and HSBC
brought in 12 banks. The three-year
tranche of that deal paid a margin of 185bp
over Hibor, while the five-year portion pays
a margin of 215bp over Hibor. The blended
all-in pricing was 220bp.
In September 2018, Hotelier Finance
– a 50:50 joint venture between New
World Development and Abu Dhabi
Investment Authority – closed a HK$9.25bn
amendment-and-extension exercise of a
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32
five-year term loan of the same size, which
had been originally signed in June 2015.
Sole MLAB Credit Agricole CIB brought in
nine new banks and six existing lenders.
The deal was extended to mature in June
2023 from June 2020 and the all-in pricing
was slashed to around 110bp over Hibor
from around 200bp. Three Hong Kong
hotels are providing security for that deal.
› WHEELOCK CLOSES CLUB
WHEELOCK FINANCE, a wholly owned unit
of Hong Kong-listed Wheelock & Co,
has completed a HK$2bn five-year
sustainability-linked facility, according to a
press release on April 4.
BNP Paribas and Mizuho Bank signed the
borrowing, which is equally split into a
term loan and revolving credit facility,
as a two-bank club on March 29. The two
lenders provided HK$1bn each.
According to the press release, both
banks received the mandated lead arranger
and bookrunner title, while BNP is also the
sustainability coordinator and facility agent.
Funds are for general corporate purposes.
The borrower’s environmental, social
and governance performance will be
assessed by Sustainalytics, a provider of ESG
research and ratings.
Wheelock & Co raised a HK$5.8bn five-
year construction loan in June 2016 for
developing the ninth phase of MTR Corp’s
Lohas Park residential development in Hong
Kong’s Tseung Kwan O district. The self-
arranged club loan, which pays an interest
margin of 90bp over Hibor, attracted Bank of
China, Bank of East Asia, China Construction
Bank, Standard Chartered and Sumitomo
Mitsui Banking Corp.
Headquartered in Hong Kong, Wheelock
& Co mainly develops properties in
Hong Kong and invests in and develops
properties in Singapore. Its Hong Kong-
listed subsidiaries include Wharf (Holdings)
and Wharf Real Estate Investment, while
its other units are Wheelock Properties and
International Financing Review Asia April 13 2019
Wheelock Properties (Singapore). Wheelock
Properties Singapore delisted from the SGX
in October 2018 and Wheelock & Co owned
about 97% of the Singaporean company at
the end of 2018.
Wharf Holdings’ wholly owned unit
Wharf Finance completed a HK$8bn five-
year facility last month. MLABs DBS Bank,
Mizuho and StanChart brought in four
banks, including SMBC that joined as an
MLAB. The top-level all-in pricing was 90bp
based on a margin of 80bp over Hibor.
› JUNEYAO AIRLINES LAUNCHES LOAN
Shanghai-listed Juneyao Airlines has
launched a HK$1.8bn three-year term loan.
The company is the guarantor, while its
indirect wholly owned subsidiary SHANGHAI
JUNEYAO AIRLINE HONG KONG is the borrower.
Standard Chartered is the mandated lead
arranger and bookrunner of the financing,
which pays an interest margin of 160bp
over Hibor and has an average life of 2.5
years.
Banks have been invited to join as
MLAs with tickets of HK$300m or more
for a top-level all-in pricing of 185bp
based on an upfront fee of 62.5bp, as lead
arrangers with HK$200m–$290m for an
all-in of 180bp through a fee of 50bp and
as arrangers with HK$100m–$190m for an
all-in of 175bp based on a 37.5bp fee.
A site visit to Shanghai will be held on April
16 and commitments are due by May 31.
Headquartered in Shanghai, the
privately owned guarantor operates short-
haul flights between Shanghai and Hong
Kong, Macau, Taiwan, Korea, Japan and
Singapore.
Juneyao Airlines is about 63%-owned
by Shanghai Juneyao (Group), which
also invests in the financial, education,
technology, real estate and food and
beverage sectors. Juneyao Group also
owns Guangzhou-based budget airline 9
Air that operates domestic flights within
China.

INDIA
DEBT CAPITAL MARKETS
› DOLLAR IS IN THE AIR FOR EROS
Bollywood film producer and distributor
EROS INTERNATIONAL has hired Barclays and
Citigroup as joint lead managers to arrange
fixed income investor meetings and calls
in Hong Kong, Singapore, London and the
United States.
A US dollar 144A/Reg S note offering may
follow, subject to market conditions.
The Indian company has expected
corporate ratings of B1/B+ (Moody’s/S&P)
with a stable outlook.
In a press release, S&P said its
preliminary B+ rating on Eros is
predicated on the company’s refinancing
of its upcoming maturities and other
Vedanta continues Indian HY spree
„ Bonds Strong backdrop helps another junk-rated company slash new issue concessions
VEDANTA RESOURCES sold a US$1bn dual-
tranche bond last Thursday despite growing
concerns of aggressive pricing on recent
Indian high-yield deals.
The 144A/Reg S deal comprised a
US$400m four-year note and a US$600m
seven-year non-call four that priced at par to
yield 8% and 9.25%, respectively.
Early responses were mixed. A Hong-Kong
based investor told IFR during bookbuilding
on Thursday that initial guidance of 8.25%
area and 9.375% area offered minimal new
issue concessions.
But increasing appetite for diversification
from global funds overrode concerns over
price, helping the Indian resources company
print tight to its secondary curve.
A banker on the deal said the 2023s still
offered one-eighth of a percent in new issue
concessions, based on the company’s 7.125%
May 2023s which were trading around
7.6% on April 4 when the mandate was
announced. He admitted that the 7NC4s paid
a minimal concession, based on calculations
that drew a two-year extension from its
existing August 2024s.
“There’s not much supply out of India,
compared to what we have seen from
China,” said the banker. “If investors want
diversification they don’t have a choice. It also
helps that Indian names are well regarded
among global investors, particularly the big
corporations.”
high-cost borrowings through its
proposed senior unsecured notes of up to
US$250m.
S&P said the stable outlook reflects its
expectation that Eros’ adequate liquidity
post refinancing and increasing share of
recurring revenue from streaming service
Eros Now will temper the impact of volatile
operating cashflows and content spending
over the next 12-24 months.
Eros accounts for roughly 30% of
Bollywood box-office collections and about
40% of all Indian language films released in
theatres in the UK and the US, according to
the rating agency.
› INDUSIND SETS PRIVATE BENCHMARK
INDUSIND BANK,acting through its GIFT City
branch, priced a US$400m three-year
3.875% bond at Treasuries plus 185bp.
Orders exceeded US$1.4bn from 130
investors. Asia bought 66% of the notes, and
the rest went to EMEA.
He also brushed off concerns of a crowded
maturity schedule in 2023, given that the
new bonds mature or become callable a
little more than a month before a US$500m
maturity on May 31. The banker said the
company may consider liability management
options, as it has done in the past.
“The focus of this exercise was really to
manage financing costs,” he said.
Another investor said that although he
owned other Vedanta bonds, he decided not
to buy the new issue because of concerns
about the structure. He was also irritated
by Vedanta’s recent decision to buy a stake
in Anglo-American from Volcan, the family
trust of Vedanta founder and chairman Anil
Agarwal.
Moody’s changed the company’s outlook
to negative from stable in February, citing
the heightened risk of cash movement
outside Vedanta following a US$561m
structured payment by the company’s
operating subsidiary to ultimate
shareholder Volcan.
The rating agency added that its
expectations for underlying operating
earnings have been lowered, which will lead
to elevated leverage for the ratings.
Moody’s did say, however, that the latest
offering proactively refinances Vedanta’s
amortising term debt maturities with a long-
term bond with bullet repayment, which
further reduces its cost of debt.
International Financing Review Asia April 13 2019
COUNTRY REPORT INDIA
Fund managers and insurers bought 46%
of the notes, banks 42%, private banks 8%
and the the public sector took up the rest.
Guidance was tightened from Treasuries
plus 210bp area.
The privately owned Indian lender’s Reg
S notes have ratings on par with the Baa3
(Moody’s) rated issuer.
Bank of America Merrill Lynch, Barclays,
Citigroup, CLSA, HSBC, JP Morgan and
Standard Chartered were joint bookrunners.
› HDFC SELLS BONDS FOR INFRASTRUCTURE
India’s HDFC BANK is targeting up to Rs500bn
(US$7.1bn) from perpetual bonds, Tier 2
bonds and long-term bonds to be used for
infrastructure and affordable housing,
according to a filing on the exchanges.
India’s largest private sector bank plans
to raise the funds in one or more tranches
within the next year.
The bank’s board will consider the
fundraising plan on April 20.
Vedanta’s deal comes as a flurry of Indian
high-yield deals have hit the market to take
advantage of regulatory changes that made
it easier for the country’s borrowers to go
offshore.
JSW Steel printed last week, while Eros
International and Shriram Transport Finance
have also mandated banks for proposed US
dollar offerings.
But the pace of tightly priced deals raises
the risk of more investor pushback in the
future.
“We feel the price levels for Indian high-
yield companies are at tight levels, similar to
those in 2014,” said Dhiraj Bajaj, head of Asia
credit at Lombard Odier.
“As deal supply from India increases,
investors will pick and demand a premium.”
Vedanta Resources Finance II is the
issuer and a wholly owned subsidiary
of Vedanta Resources, which will act as
guarantor.
The notes have expected ratings of B2/
B+ (Moody’s/S&P). The guarantor is rated
Ba3/negative by Moody’s and B+/negative
by S&P.
Distribution statistics were not available at
the time of writing.
Credit Suisse, JP Morgan and Standard
Chartered Bank were joint global
coordinators, joint lead managers and joint
bookrunners.
FRANCES YOON
33
 JSW Steel cuts through picky HY market
„ Bonds Five-year draws strong demand despite pushback on some high-yield offerings from India
JSW STEEL last Wednesday priced a US$500m
five-year senior unsecured bond offering at
par to yield 5.95%, having tightened from
initial guidance of 6.25% area.
Orders were over US$920m from 130
accounts, a solid result, despite signs that
investor appetite for some Indian high-yield
deals has been cooling lately.
For instance, GMR Hyderabad
International Airport fell short of its
US$350m target size and priced at the
higher end of guidance in its US$300m five-
year deal priced at 5.375% on April 3.
“In spite of the international debt
capital markets opening up, we have
seen instances of investor pushback on
price and tenor which wasn’t evident on
oversubscription levels for JSW Steel
› JSW STEEL READIES RUPEE COMEBACK
JSW STEEL is planning to return to the
domestic bond market after a gap of four
years to issue a Rs30bn three-year notes
through a special purpose vehicle for the
acquisition of Bhushan Power & Steel,
according to sources aware of the plans.
The deal will mark the first time that
rupee bonds have been sold to acquire
stressed assets under India’s insolvency
and bankruptcy code. Bhushan Power was
among the first companies referred by the
Reserve Bank of India to a bankruptcy court
for a debt resolution process under the new
insolvency law.
Details on the exact structure of the
deal have yet to be disclosed, but JSW
Steel will issue the bonds through an SPV
or a holding company that will part-fund
the acquisition, sources said. The SPV will
eventually be merged with JSW Steel.
“Investors will have ultimate recourse to
JSW Steel because of its creditworthiness
and to an extent will not be exposed to the
risk at Bhushan Power which is a weaker
credit,” a market source said.
JSW Steel recently raised US$700m from a
five-year cash-for-steel pre-payment deal with
global trading firm Duferco International,
under which the company will repay the loan
with steel cargo at the end of five years.
The Duferco deal will help fund JSW’s
planned acquisition of Bhushan Power
for Rs197.5bn. The bankruptcy court is
holding a hearing for the power company’s
operational creditors and is set to give a
final ruling on the acquisition this month,
34
and their ability to price the instrument
under the 6% handle,” said Amrish Baliga,
managing director and head of financing
from Deutsche Bank.
The bonds have expected ratings of Ba2/
BB (Moody’s/Fitch), in line with the issuer.
GMR Hyderabad’s bonds, rated a notch
higher at BB+/BB+ (S&P/Fitch), were quoted
at 5.5% in secondary trading, providing a
pricing reference.
Bankers said with so many Indian high-
yield issuers coming to market lately,
investors could afford to be selective.
A second source noted that JSW’s bonds
had been steady performers in secondary
trading recently, even as some others
fell below a cash price of 90, increasing
the credit’s appeal to real-money funds,
said a source aware of the developments.
JSW Steel still needs to raise funds to
buy the stressed asset, so it will be looking
at all funding options including domestic
and offshore bonds and equity financing,
according to a source.
In the offshore market, JSW Steel
recently raised US$500m from five-year
dollar bonds at par to yield 5.95%.
JSW Steel is yet to make an official
announcement on the planned rupee bond
sale.
› L&T RETURNS AFTER NEARLY FOUR YEARS
Indian industrial conglomerate LARSEN &
TOUBRO is planning to raise up to Rs15bn
from three-year bonds at 7.87%, according
to a market source.
The company is coming to the market
after nearly four years. It last raised Rs10bn
from five-year bonds at 8.4% in September
2015.
Crisil has assigned a AAA rating to the
non-convertible debentures of L&T.
Axis Bank is heard to be the arranger for
the deal.
The company is yet to make an official
announcement on the planned bond sale.
› MUTHOOT HOMEFIN TO ISSUE BONDS
MUTHOOT HOMEFIN plans to raise up to Rs3bn
from a public bond issue, according to the
prospectus on the BSE.
The non-banking financial company has
fixed the coupons at 9.25%, 9.50% and 9.75%
for two, three-year two months and five-
International Financing Review Asia April 13 2019
including Chinese investors.
“Yields are tight, but in a liquid
environment, 6% has become the new 8%,”
said the second source. “It’s also a proper
size and so it will be liquid in secondaries.”
Asian investors took 57% of the Reg S
bonds, EMEA accounts 36% and US offshore
accounts 7%. The bonds were bid at a cash
price of 100.15 on Friday.
By investor type, funds booked 81%, private
banks 10%, insurers and pension funds a
combined 5%, and banks 4%.
Deutsche Bank, ANZ, BNP Paribas,
Citigroup, Credit Suisse, First Abu Dhabi
Bank, JP Morgan, Mizuho, SBI and Standard
Chartered were joint bookrunners.
DANIEL STANTON, KRISHNA MERCHANT,
FRANCES YOON
year tenors, payable monthly. The coupons
are 9.50%, 9.75% and 10.00%, respectively,
for same tenors, payable annually.
Muthoot is targeting Rs1.5bn, plus a
greenshoe option of the same amount.
Edelweiss Financial Services is the lead
manager for the issue.
Crisil has assigned a AA rating to the
notes.
› PFC SCRAPS TWO-PART BOND ISSUE
POWER FINANCE CORP scrapped the sale of
Rs40bn two-part bonds after it did not get
bids at the desired levels, according to
market sources.
The state-owned issuer was seeking bids
for three-year and five-year tranches on April
8. It was targeting Rs5bn, plus a greenshoe
option of Rs15bn, from each tranche.
Crisil, Icra and Care assigned AAA ratings
to the bonds.
The issuer is yet to make an official
announcement on the withdrawal of the
bond sale.
On March 27, PFC raised Rs10bn from
Tier 2 bonds at 8.98%.
› REC INVITES BIDS FOR 10-YEAR BONDS
REC, formerly known as Rural Electrification
Corporation, aims to raise up to Rs20bn
from 10-year bonds, according to sources
close to the plans.
It has asked investors to place bids on
BSE’s electronic platform on April 15 from
10:00am to 11:00am India time in a closed
bidding session.

It is eyeing Rs5bn, plus a greenshoe of
Rs15bn.
Care, Crisil, Icra and India Ratings have
assigned AAA ratings to the notes.
On March 29, REC printed Rs21.51bn
subordinated Tier 2 bonds at 8.97%.
REC is yet to make an official
announcement on the planned bond sale.
› SIDBI PRINTS BONDS AT 7.59%
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
has raised Rs7.5bn from three-year six-
month bonds at 7.59%, according to a
filing on National Securities Depository
Limited.
The notes have a put and call option on
October 7 2020.
Care has assigned a AAA rating to the
bonds.
On April 2, Sidbi scrapped the sale of
three-year six-month bonds before the
submission of bids.
Reliance launches part of financing
„ Loans A US$750m portion of Jio’s jumbo US$2.25bn facility not being syndicated
Conglomerate RELIANCE INDUSTRIES has
launched into general syndication a
US$1.5bn-equivalent facility, which is part of
a larger US$2.25bn jumbo financing.
ANZ, Bank of America Merrill Lynch,
Barclays, Credit Agricole CIB, DBS Bank, First
Abu Dhabi Bank, HSBC, Mizuho Bank, MUFG,
Scotiabank, Standard Chartered, State Bank of
India, Sumitomo Mitsui Banking Corp, United
Overseas Bank and Westpac are the senior
mandated lead arrangers and bookrunners of
the deal, which has been fully underwritten.
Korea Development Bank joined the facility
as SMLAB, while Taipei Fubon Commercial
Bank and Bank of China have participated
as MLABs prior to the launch into general
syndication. JP Morgan joined as MLA.
RIL is the borrower of the US$1.5bn-
equivalent deal, while Reliance Jio Infocomm
is the borrower of the remaining US$750m
piece, which is not expected to be launched
into general syndication.
RIL’s financing comprises two facilities
– facility 1 has a US$650m tranche and a
¥38.85bn (US$350m) piece, while facility
2 has a US$350m portion and ¥16.65bn
tranche.
The US dollar and Japanese yen
tranches former facility – which has an
average life of 5.25 years – pays interest
margins of 106bp over Libor or 72.5bp
over yen Libor, respectively, while the
latter – which has an average life of 5.5
years – pays margins of 108bp over Libor
SYNDICATED LOANS
› QUARTET FUNDING NIIT STAKE PURCHASE
Four banks are underwriting a leveraged
buyout loan of up to US$306m for
Baring Private Equity Asia’s purchase of
a significant stake in India’s NIIT TECHNOLOGIES.
Deutsche Bank, ING Bank, Nomura and
Standard Chartered are equally underwriting
the five-year amortising loan, which
supports BPEA’s purchase of an initial
30% stake in NIIT Technologies and an
additional 26% through an open offer.
BPEA and its affiliated funds agreed on
April 7 to buy the 56% stake for a total
consideration of Rs48.90bn (US$704m) at
Rs1,394 per share, NIIT Technologies said
in an announcement. BPEA is buying the
initial stake from parent company and
Indian information technology giant NIIT
and promoter entities.
The loan represents a leverage (net debt-
or 75.5bp over yen Libor, respectively.
Lenders receive the lead arranger title
for commitments of US$35m–$49m-
equivalent, the co-arranger title for tickets
of US$20m–$34m-equivalent or the lead
manager title for US$10m–$19m-equivalent
for participants in either facility 1 or 2.
For the facility 1, lead arrangers receive
top-level all-in pricings of 128.5bp and
88.5bp for the US dollar and yen tranches,
respectively, based on participation fees of
118.13bp and 84bp; co-arrangers get all-ins
of 126.5bp and 86.5bp, respectively based
on fees of 107.63bp and 73.5bp; while lead
managers receive all-ins of 124.5bp and
84.5bp based on fees of 97.13bp and 63bp,
respectively.
For the facility 2, lead arrangers receive
top-level all-in pricings of 131bp and
91.5bp for the US dollar and yen tranches,
respectively, based on participation fees of
126.5bp and 88bp; co-arrangers get all-ins of
129bp and 89.5bp, respectively based on fees
of 115.5bp and 77bp; while lead managers
receive all-ins of 127bp and 87.5bp based on
fees of 104.5bp and 66bp, respectively.
Bank presentations will be held in
Singapore on April 15, Taipei on April 17
and Tokyo on April 19. The deadline for
commitments is May 17, with signing slated
for early June.
Proceeds will be used for capital
expenditure purposes.
The group’s previous visit to the loan
International Financing Review Asia April 13 2019
COUNTRY REPORT INDIA
to-Ebitda) of mid 3x to low 4x, depending
on the outcome of the open offer and the
amount of debt required.
The underwriters could launch the loan
into senior syndication before reaching
out wider to retail lenders in general
syndication.
The acquisition is conditional upon
receipt of required regulatory approvals,
including anti-trust and competition
clearances from the Competition
Commission of India.
Additionally, NIIT Technologies
announced on April 7 its agreement to
acquire WHISHWORKS IT Consulting,
an IT services and consulting company
specialising in MuleSoft and Big Data
technologies. NIIT Technologies will buy
a 53% stake initially, with the remaining
equity to be acquired over the next two
years through pay-outs linked to financial
performance.
NIIT Technologies also signed an
market was in early November for a
US$2.63bn financing for RIL that had 44
banks participating, including 17 senior
MLABs. That deal comprised a US$187m
two-year and 11-month bullet loan tranche A,
which was not syndicated, a US$966m three-
year amortising tranche B and a US$1.48bn
four-year and 11-month amortising tranche
C. The top-level all-in pricing was 91.5bp or
111bp based on the margin of 69bp and 90bp
over Libor and remaining average lives of
2.792 and 4.392 years for tranches B and C,
respectively.
A year earlier in December 2017, RIL and
Jio together raised a US$2.5bn-equivalent
refinancing with 30 banks, including 17
MLABs. The deal was split into a 2.5-
year loan of US$815m and €150m (then
US$185m) (facility 1) for RIL, and separate
US$1bn 4.75-year (facility 2) and US$500m
5.58-year (facility 3) portions for Jio. RIL is
guarantor on the Jio tranches.
RIL’s US dollar and euro tranches paid
top-level all-in pricing of 76bp and 46bp
based on margins of 56bp and 37bp over
Libor and Euribor, respectively, and a
remaining average life of 2.375 years. Jio’s
facility 2 and facility 3 offered top-level
all-in pricing of 105bp and 110bp based on
margins of 84bp and 92.5bp over Libor, and
remaining average lives of 4.33 and 5.42
years, respectively.
RIL is rated Baa2/BBB+/BBB−.
EVELYNN LIN, CHIEN MI WONG
35
agreement to sell its entire 88.99% stake
in Esri India Technologies, a geographic
information system software and solutions
provider, to the other existing equity
shareholder Environmental Systems
Research Institute.
NIIT Technologies provides data
& analytics, automation, cloud, and
digital services to the banking and
financial services, insurance, travel and
transportation sectors.
› NTPC SAMURAI ATTRACTS ONE
India’s largest power utility company, NTPC,
has signed a US$300m-equivalent 10-year
Samurai loan, attracting only Aozora Bank in
general syndication. (See News.)
Mizuho Bank, MUFG and Sumitomo
Mitsui Banking Corp were the mandated
lead arrangers and bookrunners of the
financing, which offered a top-level
all-in pricing of 114.5bp based on an
interest margin of 102bp over Tibor and
a weighted average remaining life of 10
years.
Pricing on the latest loan is higher than
that on a ¥39.42bn (then US$370m) facility
completed in April last year. That loan
offered a top-level all-in pricing of 105bp
based on a margin of 95bp over Tibor and
a weighted average remaining life of 10
years. It was the first unsecured decade-
long borrowing in the offshore loan market
for an Indian credit. Mizuho, MUFG and
SMBC were the MLABs of the Samurai loan,
which attracted eight lenders in general
syndication.
Established in 1975, NTPC – formerly
National Thermal Power Corp – is rated
"AA"""¦"""¦
› PFC SENDS RFP FOR FACILITY
State-owned POWER FINANCE CORP has sent
out a request for proposals for an up to
US$500m financing.
The deal, which has a US$300m
greenshoe option, could comprise tenors
ranging from three to five years. The
borrower is also open to a Green loan.
The deadline for proposals is April 22.
PFC signed a US$150m-equivalent five-
year Samurai loan in January. Mizuho Bank
and MUFG are the mandated lead arrangers
of the bullet facility, which has been
equally pre-funded and will launch into
general syndication at a future date.
PFC is rated Baa3/BBB–/BBB–. In
December, Moody’s put the company
on review for a downgrade, while S&P
put it on negative watch after the Indian
government approved in principle PFC’s
proposed acquisition of the government’s
52.6% stake in REC.
36
› YES BANK HOLDS NON-DEAL ROADSHOW
YES BANK held a non-deal roadshow in Taipei
last Monday.
CTBC Bank was the coordinator of the
exercise.
In September last year, Yes Bank raised
a US$400m three-year loan. BayernLB,
Commerzbank, CTBC Bank, First Abu Dhabi
Bank, Korea Development Bank, State
Bank of India, United Overseas Bank and
Westpac were the mandated lead arrangers
and bookrunners of the financing, which
paid a top-level all-in pricing of 114.48bp
based on an interest margin of 95bp over
Libor and an average life of 2.67 years.
Yes Bank, rated Ba1 (Moody’s), is India’s
fourth-largest private sector bank in terms
of assets.
EQUITY CAPITAL MARKETS
› BAJAJ ENERGY PLANS IPO LATER IN 2019
BAJAJ ENERGY has filed a draft prospectus for
an IPO of up to Rs55bn (US$792m) and is
targeting the launch for later this year.
The company said in the draft prospectus
that Rs52bn of primary shares and Rs3bn
secondary shares would be sold. Owner
Bajaj Power Ventures is the vendor of the
secondary shares.
Edelweiss, IIFL Holdings and SBI Capital are
the bookrunners and IDBI Capital is the co-
bookrunner.
Bajaj Energy owns power capacity of
2,430 megawatts.
The company’s revenue in the financial
year that ended on March 31 2018 was
Rs9bn versus Rs14bn in 2017. Net profit fell
to Rs417m from Rs883m. A delay in tariff
payments by Uttar Pradesh Power Corp and a
shortfall in fuel supplies affected earnings.
ReNew Power (US$1bn–$1.3bn),
Sembcorp Energy (Rs50bn) and Acme Solar
Holdings (Rs15bn) have also announced
IPOs, but none of them have materialised
because of volatile stock market conditions
and a lack of investor interest in Indian
power companies.
› POLYCAB IPO BOOKS COVERED 52 TIMES
Wire and cable maker POLYCAB INDIA’S up to
Rs13bn IPO was covered 52 times when the
books closed last Tuesday.
Data on the National Stock Exchange
show the institutional tranche was covered
92.44 times, the high-net-worth investor
tranche 110.42 times and the retail tranche
4.65 times.
The offering is the latest Indian IPO to
see its books covered ahead of the closing
date.
International Financing Review Asia April 13 2019
Around Rs4bn primary shares and 17.6m
secondary shares were sold at Rs533–Rs538
per share. The IPO is likely to be priced at
the top of the price range.
The top of the range implies a 2020 P/E
multiple of 14.5, compared with the sector
average of 22.
Founders Inder Jaisinghani, Ajay
Jaisinghani, Ramesh Jaisinghani and
Girdhari Jaisinghani are among the
vendors of the secondary shares along with
International Finance Corp. IFC currently
owns 15% of the company.
The company’s revenue from operations
rose to Rs69bn in the financial year that
ended on March 31 2018, from Rs60bn
in 2017. Net profit rose to Rs3.7bn from
Rs2.3bn.
Axis, Citigroup, Edelweiss and Kotak are the
joint global coordinators and bookrunners
with IIFL Holdings and Yes Securities.
› METROPOLIS IPO BOOKS COVERED
The books for METROPOLIS HEALTHCARE’s Rs12bn
IPO were subscribed 5.84 times when they
closed on April 5.
Data on the National Stock Exchange
show the institutional tranche was covered
8.88 times, the high-net-worth investor
tranche 3.03 times and retail 2.21 times.
The IPO was priced at the top of a Rs877–
Rs880 range.
Around 13.7m secondary shares were
sold in the IPO.
Credit Suisse, Goldman Sachs, HDFC Bank, JM
Financial and Kotak are the bookrunners.
INDONESIA
DEBT CAPITAL MARKETS
› SEMEN INDONESIA PLANS TWO-TRANCHE
SEMEN INDONESIA is planning to raise Rp4.9trn
(US$240m) from two-part bonds, according
to a source close to the plans.
The cement maker has given indicative
coupon ranges of 8.50%–9.25% for a five-
year tranche and 8.75%–9.50% for a seven-
year piece.
The company has mandated BNI, CGS-
CIMB, Danareksa, Mandiri and Indo Premier as
lead arrangers.
The books have opened and will close on
April 15.
The notes are rated AA+ by Pefindo.
In February, LPC reported that Semen
Indonesia had closed a US$1.037bn loan
with eight lenders in syndication to fund
the purchase of an 80.64% shareholding

that Lafarge Holcim owned in Holcim
Indonesia and a mandatory tender offer for
the remaining stake.
Semen Indonesia is yet to make an official
announcement on the planned bond sale.
› EXIMBANK READIES MULTI-TRANCHE DEAL
INDONESIA EXIMBANK plans to raise Rp4.3trn
from bonds and sukuk in various tranches,
according to the offer document.
It is planning to raise Rp3.86trn from six-
part bonds. It is eyeing Rp147bn, Rp935bn,
Rp1.52trn, Rp278bn, Rp349bn, Rp625bn
from one, three, five, seven, 10 and 15-year
tranches at 7.35%, 8.4%, 8.9%, 9.25%, 9.5%
and 9.8%.
The bank is also targeting Rp441bn from
a sukuk portion at floating and variable
rates. It plans to raise Rp230bn, Rp145bn
and Rp66bn from one, three and five-year
tranches.
Bahana, BCA, BNI, CGS-CIMB, Danareksa, DBS
Vickers, Indo Premier, and Mandiri Sekuritas are
the lead managers for the deal.
The rupiah notes are rated AAA by
Pefindo.
The deal opens on April 15 and closes on
April 16.
Recently, Indonesian Eximbank said it
was planning to raise Rp32trn from bond
sales in up to four stages, according to a
Reuters report citing statements from the
director.
› OTO MULTIARTHA SETS COUPONS
OTO MULTIARTHA has set the coupons for a
triple-tranche bond offering to raise Rp1trn,
according to a source close to the plans.
The car finance firm has fixed the
coupons at 7.75% for one year, 8.75% for
SYNDICATED LOANS
› PTPN POSTPONES MAIDEN LOAN
PERKEBUNAN NUSANTARA III (PTPN) has
postponed the launch of a US$200m two-
year debut offshore facility.
Bank presentations were postponed to
the week of April 22. The roadshow was
initially scheduled for Singapore on April
10, Hong Kong on April 11, Taipei on April
12 and Tokyo on April 15.
Deutsche Bank and Sumitomo Mitsui Banking
Corp are the mandated lead arrangers and
bookrunners of the deal, which is available
in either euros or US dollars. The interest
margin is 185bp over Euribor/Libor and
the average life is 1.8 years. Funds are
for working capital requirements of the
borrower and its subsidiaries.
In March 2017, Perkebunan Nusantara V
raised a Rp4.866trn (US$363m) 10-year loan.
Bank Mandiri, Malayan Banking and Bank
Central Asia were the MLABs on that deal,
which offered an interest margin of 315bp
over Jibor, according to LPC data.
State-owned PTPN, which regularly
taps the Indonesian rupiah market, is a
producer of palm, rubber, sugar and related
commodities.
› PGN TO MANDATE BORROWING
PERUSAHAAN GAS NEGARA is tipped to mandate
Bank Mandiri on a one-year new-money loan
of about US$350m.
The borrower’s previous offshore loan
was a US$650m five-year financing in
August 2014. ANZ, Citigroup, HSBC, MUFG
and Sumitomo Mitsui Banking Corp were
the MLABs of the deal, which attracted
three other lenders in general syndication.
COUNTRY REPORT JAPAN
offered a top-level all-in pricing of 100bp
based on a margin of 90bp over Libor and
an average life of 1.625 years.
The Jakarta-based company, a unit
of Bank Danamon Indonesia, provides
consumer financing and finance leasing
services for cars, motorcycles, durable
goods and other products.
For full allocations, see www.ifrasia.com.
JAPAN
DEBT CAPITAL MARKETS
› SMBC AVIATION PRINTS FIVE-YEAR NOTE
SMBC AVIATION CAPITAL last Monday priced a
US$500m five-year bond at 99.868 with a
coupon of 3.55% to yield 3.579%.
This was equivalent to Treasuries
plus 125bp, the tight end of guidance
of Treasuries plus 130bp, plus or minus
5bp, and inside initial price thoughts of
Treasuries plus 145bp area. The new issue
concession was estimated at 3bp.
The deal size was capped at US$500m
and orders were heard to reach US$2.3bn.
The 144A/Reg S bonds will be issued
by SMBC Aviation Capital Finance, and
guaranteed by the parent company. The
notes have expected ratings of A– by both
S&P and Fitch.
Citigroup, Credit Agricole, Goldman Sachs,
JP Morgan, RBC and SMBC Nikko were
bookrunners.
› TOYOTA MOTOR CREDIT PRINTS
three years and 9.25% for five years.
It has appointed BCA Sekuritas, Mandiri
Sekuritas, IndoPremier and Nikko Sekuritas
Indonesia as lead arrangers.
Pefindo recently affirmed a AA+ rating
on the bonds.
Oto Multiartha is yet to make an official
announcement on the planned bond sale.
› WASKITA KARYA PLANS TWO-PART BONDS
WASKITA KARYA is marketing dual-tranche
domestic bonds to raise Rp1.85trn.
The state-owned developer has
announced indicative coupon ranges of
8.5%–9.5% for a three-year tranche and
9.00%–9.75% for a five-year piece, according
to the offer document.
The books opened on April 9 and close
on April 22.
Bahana, BNI, Danareksa, DBS, IndoPremier
and Mandiri Sekuritas are the lead arrangers
of the deal.
2ATEDû"AA"""¦"""¦û0'.û
is Indonesia’s largest natural gas
transportation and distribution company.
› ADIRA CLOSES NEW-MONEY LOAN
ADIRA DINAMIKA MULTI FINANCE has closed a
US$350m three-year amortising facility,
increasing it from a targeted size of US$250m.
BNP Paribas, DBS Bank, Maybank, MUFG and
United Overseas Bank were the mandated lead
arrangers and bookrunners of the new-money
deal, which attracted 20 lenders in general
syndication. The signing was on April 5.
The borrowing paid a top-level all-in
pricing of 106bp based on an interest
margin of 90bp over Libor and an average
life of 1.625 years. Funds are for general
corporate purposes.
The borrower’s previous loan was an
increased US$300m three-year financing
last June. ANZ, BNP, Citigroup, DBS and
MUFG were the MLABs of the loan, which
International Financing Review Asia April 13 2019
TOYOTA MOTOR CREDIT CORP, rated Aa3/AA–
(Moody’s/S&P), priced a US$2bn two-part
senior offering last Tuesday.
A US$1.25bn 1.5-year floater priced at par
with a coupon of three-month Libor plus
15bp, tightening from initial price thoughts
of low 20s.
A US$750m three-year fixed-rate tranche
priced at 99.937 with a coupon of 2.65% to
yield 2.672%, equivalent to Treasuries plus
38bp. This was at the tight end of final
guidance of Treasuries plus 40bp, plus or
minus 2bp, and inside IPTs of low 50s.
Citigroup, RBC Capital Markets, Mizuho and
MUFG were active bookrunners for the SEC-
registered deal.
› AFLAC JAPAN PRIVATELY PLACES PERP
AFLAC LIFE INSURANCE JAPAN, rated AA by
JCR, raised ¥30bn (US$268m) by selling
a perpetual non-call five in a private
placement.
37
 The bonds were issued by Aflac Japan,
not by Aflac Inc, which had issued Global
yen bonds in 2017 and 2018. As the issuer
converted from a branch of Aflac Inc into
a legal subsidiary a year ago, the deal is
classified as a domestic bond offering and
does not have a guarantee from Aflac Inc.
The PerpNC5 carries a 0.963% coupon for
the first five years, which is equivalent to
93bp over yen offer-side swaps. The coupon
will change to a floater rate of six-month
Libor plus 93bp if not called and will step
up 100bp after 10 years.
Unlike the Global yen deal done by Aflac
Inc, this deal was marketed in a typical
Japanese way. The marketing period was
seven trading days, a lot longer than the usual
three or sometimes two days in international
yen deals. The marketing method, however,
was not the traditional retention system but
the transparent Pot system.
The guidance range narrowed slowly
over the course of marketing. It was at
90bp–100bp on April 3–4, then 90bp–98bp
on April 5–8, 93bp–97bp last Tuesday, and
93bp–95bp on Wednesday before landing at
the tightest end.
The books swelled to near ¥60bn,
according a banker on the deal.
Mitsubishi UFJ Morgan Stanley, Mizuho and
SMBC Nikko are the lead managers on the
deal, rated A+ by JCR.
› SOFTBANK GROUP SETS RETAIL RECORD
SOFTBANK GROUP has raised ¥500bn from its
biggest retail bond, once again turning to
Japanese savers to lock in low-cost funding.
The six-year retail bonds, priced at
par, carry a 1.64% coupon, just above the
mid-point of the initial guidance range of
1.30%–1.90%.
The issue underlines the continued
appeal of the SoftBank brand in Japan,
where individual investors have bankrolled
much of its expansion in recent years.
The mobile phone and technology
investment giant raised ¥700bn from
domestic retail bonds in 2013, ¥1.1trn in
2014, ¥920bn in 2015, ¥400bn in 2016,
¥400bn in 2017 and ¥410bn in 2018,
according to DealWatch, IFR’s sister
publication. Its retail offerings have
included both senior debt and more risky
25-year non-call five-subordinated paper.
In addition to this, its mobile phone unit
raised ¥2.6trn from last year’s IPO, sold
mainly to Japanese retail buyers.
www.ifrasia.com
38
Of the proceeds of the new trade, ¥300bn
will be allocated to refinance bonds maturing
on May 30, and the rest will be used to
refinance debt maturing in September.
Nomura underwrote 28.8% of the issue,
Daiwa 18%, SMBC Nikko 16%, Mizuho and
Mitsubishi UFJ Morgan Stanley 12% each, SBI
Securities 8%, and the rest was taken by five
other brokerages. Underwriting fees are a
quite rich 125bp.
The bonds are rated A– by JCR.
SYNDICATED LOANS
› JBIC BACKS TORAY'S TENCATE ACQUISITION
Japan Bank for International Cooperation
has signed a loan for TORAY INDUSTRIES to
back its €930m (US$1.05bn) acquisition
of Netherlands-based TenCate Advanced
Composites Holding, JBIC said in a
statement last Tuesday.
The size of the loan, which was co-financed
with commercial banks, is undisclosed.
Last July, the world’s largest maker of
carbon-fibre composite materials completed
the acquisition of TenCate, which makes
thermoplastic prepreg, a material that
improves efficiency of moulding.
Toray last tapped the syndicated loan
markets in March for a ¥39.8bn (then
US$358m) loan with Sumitomo Mitsui
Banking Corp as arranger.
› JOGMEC SIGNS ZERO-INTEREST LOAN
JAPAN OIL GAS & METALS NATIONAL signed a
¥544.65bn (US$4.95bn) one-year bullet
term loan last Thursday following a heavy
oversubscription, the state-backed company
said in a statement.
The government-guaranteed loan was
priced at a zero interest rate through
conventional auctions that saw bids of up
to ¥3.195trn.
Sumitomo Mitsui Banking Corp was the
agent. Drawdown is slated for April 26, and
proceeds will be for operating funds.
JOGMEC, which visits the loan market
multiple times in a year, typically raises a
large loan in April. The company completed
a ¥393.536bn one-year term loan with a
similar structure in April last year.
In February, it obtained a ¥35.989bn one-
year term loan, which also priced at zero
interest following strong demand from
lenders such as regional banks.
International Financing Review Asia April 13 2019
MALAYSIA
DEBT CAPITAL MARKETS
› MAYBANK ISLAMIC SELLS T2
MAYBANK ISLAMIC has raised M$1bn
(US$247.7m) from the sale of 10 non-call
five Islamic bonds that will qualify as Tier
2 capital.
The notes, rated AA1 by RAM, will pay
4.5%.
Settlement was on April 5. Proceeds
from the self-led issue were used to redeem
a 4.75% Tier 2 bond that matured on the
same day. The Islamic bank is a unit of
Malayan Banking.
NEW ZEALAND
DEBT CAPITAL MARKETS
› ADB KAURI RAISES NZ$200M
ASIAN DEVELOPMENT BANK (Aaa/AAA/AAA) priced
a NZ$200m (US$136m) seven-year Kauri
bond on April 5 with joint lead managers
ANZ and TD Securities.
The 2.375% April 16 2026s priced at
99.647922 for a yield of 2.43%, in line with
mid-swaps plus 43bp guidance and 77.25bp
wide of the April 2025 NZGB.
ADB previously accessed the Kauri
market in October 2018 with a NZ$400m
increase to its 2.875% April 28 2021 bond.
› HEARTLAND BANKS NZ$125M
HEARTLAND BANK (formerly Heartland Building
Society), rated BBB (Fitch), has raised an
upsized NZ$125m from a five-year note
offer.
The 3.55% April 12 2024s priced at par on
April 5, at the tight end of mid-swaps plus
175bp–190bp guidance.
BNZ was arranger and joint lead
manager with CBA, Deutsche Craigs and
Westpac.
Heartland Bank previously issued a
NZ$150m 4.5% five-year retail note in
September 2017.

› TOYOTA NZ PARKS NZ$100M
TOYOTA FINANCE NEW ZEALAND, rated Aa3/
AA– (Moody’s/S&P), priced a capped 2.71%
NZ$100m five-year senior unsecured bond
last Thursday at mid-swaps plus 88bp.
The margin was at the wide end of final
83bp–88bp guidance which had been
revised from the initial 82bp–92bp range.
ANZ was sole lead manager.
The issuer, which raised NZ$100m from
a five-year bond sale last September, has
NZ$75m of dual-tranche notes maturing on
April 23.
SYNDICATED LOANS
› TRADE ME CUTS PRICING ON LOAN
New Zealand-based online classified operator
TRADE ME last Thursday increased a proposed
term loan to US$605m from US$575m term
and cut the pricing on the deal.
The debt will be used to support the
company’s buyout by private equity firm
Apax Partners.
The upsized loan allowed the company
to cut the size of a privately placed second-
lien loan to NZ$276m (US$186m) from
NZ$320m.
Guidance on the first-lien loan is now
at 425bp over Libor with a 0% floor and
discount of 99.5 after circulating in the
450bp-475bp over Libor range with a 0%
floor and a discount of 99.
The seven-year loan will have six months
of soft call protection at 101.
Credit Suisse leads alongside Nomura, UBS,
Macquarie and Jefferies. Commitments were
Aboitiz Power signs loan for thermal assets
„ Loans Power group to increase stakes in Mariveles and Dinginin plants
ABOITIZ POWER CORP has signed an up to
US$300m five-year facility backing its
acquisition of a stake in AC Energy Holdings
Inc’s thermal platform in the Philippines.
DBS Bank, Mizuho Bank, MUFG and
Standard Chartered are the lenders of the
financing, which will be launched into
general syndication at a later date.
Funds will be used to partially finance
the acquisition of a 49% voting stake and
60% economic stake in AA Thermal, which
is owned by AC Energy – a wholly owned
subsidiary of Ayala Corp.
Arlington Mariveles Netherlands Holding,
an affiliate of AC Energy, is the seller of AC
Energy, which is valued at US$579.2m.
AA Thermal’s assets initially consist of
due Thursday and have been extended to
Friday.
The borrower is also raising NZ$88m
through a revolving credit facility, pricing
on which is expected to be the same as the
first-lien term loan.
The acquisition was announced
December 12 2018 and carried an equity
value of NZ$2.56bn.
The issuer and the debt are rated B1/B.
The borrower is TRADE ME GROUP (TITAN
ACQUISITIONCO NEW ZEALAND).
› SPARK EXTENDS 2017 REVOLVER
Telecommunications company SPARK NEW
ZEALAND has extended the maturity of a
NZ$200m revolving credit facility it signed
in April 2017 by one year, the company said
in a stock exchange filing on April 4.
The new maturity of the undrawn
revolver from domestic and international
banks is April 30 2022. The original three-
year loan was already extended once in
April 2018 by a year.
Spark’s other loans include a NZ$100m
three-year committed revolver from HSBC
due on November 30 2021. The facility
replaced NZ$100m of loans with Bank of New
Zealand that matured in October last year.
Spark also has a NZ$200m committed
revolver with Westpac that matures on
November 30 2020, and a NZ$125m
revolver with MUFG maturing on
November 30 2022.
The facilities from BNZ and MUFG were
fully drawn as of December 31 2018 and
NZ$60m of the Westpac facility was drawn.
Spark Finance is the borrower of these
facilities.
AC Energy’s limited partnership interests in
GNPower Mariveles Coal Plant, the owner
and operator of an operating 2x316 MW coal
plant in Mariveles, Bataan, and in GNPower
Dinginin, the developer and owner of a 2x668
MW supercritical coal plant project under
construction in Dinginin, Bataan.
The agreement will increase Aboitiz
Power’s beneficial ownership in the Mariveles
project to 78.325% and in the Dinginin
project to 70%. The former project has been
operating since 2013, while the first unit of
the latter project is scheduled to go online
this year.
Aboitiz Power last signed a US$650m two-
year bridge loan that backed its purchase of
an indirect partnership interest in GNPower
International Financing Review Asia April 13 2019
COUNTRY REPORT PHILIPPINES
PHILIPPINES
SYNDICATED LOANS
› MONDE NISSIN UNIT WRAPS UP DEBUT
MARLOW FOODS, a unit of Philippine food
company Monde Nissin, has closed a debut
£123m (US$158m) five-year borrowing,
with Asian banks largely supporting the
deal.
Citigroup was originally mandated as sole
bookrunner of the dual-tranche facility,
before HSBC joined at the top as equal-
status arranger.
Six other lenders joined the deal, which
was syndicated on a best-efforts basis.
Marlow Foods is the borrower on the
non-recourse financing, which carries a
letter of comfort from parent Monde Nissin.
The deal comprises a £113m amortising
term loan with an average life of four years
and a £10m revolving credit facility. It
offered a top-level all-in pricing of 220bp
based on an interest margin of 195bp over
sterling Libor.
Funds will be used for capital
expenditure, refinancing of shareholder
loans and general corporate purposes.
Marlow Foods owns vegetarian and vegan
food manufacturer Cauldron Foods and
meat substitute producer Quorn Foods,
both of which are based in the United
Kingdom.
Monde Nissin acquired Quorn Foods
in October 2015 from Exponent Private
Equity and Intermediate Capital Group
Mariveles Coal Plant and GNPower Dinginin
from Blackstone. DBS, HSBC, Maybank,
MUFG, Mizuho and StanChart were the
mandated lead arrangers, bookrunners and
underwriters of the financing, which attracted
11 lenders in general syndication. That loan
paid a top-level all-in pricing of 126.67bp
based on an interest margin of 110bp over
Libor and an average life of 1.8 years. Therma
Power Inc is the borrower of the financing,
which has a corporate guarantee from parent
Aboitiz Power.
Incorporated in 1998, Aboitiz Power is the
holding company for the Aboitiz Group’s
investments in power generation, distribution
and retail electricity services.
CHIEN MI WONG
39
for £550m. At the time, Banco de Oro
Unibank, Bank of the Philippine Islands
and Metropolitan Bank & Trust Co
provided a US$650m seven-year loan to
finance the acquisition.
For full allocations, see www.ifrasia.com.
SINGAPORE
DEBT CAPITAL MARKETS
› DBS GROUP DOES DOLLARS
DBS GROUP HOLDINGS last Tuesday priced a
US$750m three-year senior unsecured bond
offering at 99.946 with a coupon of 2.85% to
yield 2.869%, equivalent to Treasuries plus
58bp.
This was at the tight end of guidance of
Treasuries plus 60bp, plus or minus 2bp, and
inside initial price thoughts of 75bp area.
Olam signs incentive loans for digital growth
„ Loans Agribusiness company breaks new ground with D-loan
Singapore-headquartered agribusiness OLAM
INTERNATIONAL has obtained an innovative new
type of corporate loan that links pricing to
the borrower’s progress towards its digital
transformation.
The US$350m three-year revolving credit
facility is a digital loan (D-loan), a form of
positive incentive loan (PIL), which rewards
borrowers that achieve pre-arranged targets.
The rise in PILs over the past two years
has so far been dominated by credit facilities
linked to environmental, social and corporate
governance goals.
Increasing numbers of companies,
especially in Europe, are looking to achieve
improved terms on their corporate facilities
by linking pricing to pre-existing ESG
commitments.
“Positive incentive loans are really taking
off. Clients are busy looking at their options.
There has been a broadening away from
purely environmental and social elements
to more business related developments,” a
senior banker said.
“These types of loans help communicate
a message to the world, showing companies
moving in the right direction, while lenders
can demonstrate their support for a
particular strategy.”
Like ESG-linked RCFs, D-loans are for
general corporate purposes and are not
40
The 144A/Reg S offering attracted over
US$2.2bn of orders from 140 accounts, with
North America taking 47%, Asia Pacific 39%
and EMEA 14%.
By investor type, fund managers
booked 50%, insurers and pension
funds a combined 20%, banks 18%,
official institutions 8% and private
banks 4%.
The bonds will be issued off the
Singaporean bank’s US$30bn Global MTN
programme and are expected to be rated
Aa2/AA– (Moody’s/Fitch).
Compatriot United Overseas Bank’s
dollar bonds due April 2021, rated Aa1/
AA–/AA–, were seen at Treasuries plus
55bp, while National Australia Bank had
May 2022 bonds, rated Aa3/AA– (Moody’s/
S&P), at Treasuries plus 65bp, indicating
that DBS paid little or no new issue
premium.
DBS was sole global coordinator. It was
also joint bookrunner with Barclays, JP
Morgan, RBC Capital Markets, Societe Generale
and Wells Fargo Securities.
earmarked for a specific kind of investment.
The financing for Olam, which refinances
existing loans, is the first time that a credit
facility has been linked to the digital maturity
of a borrower.
Olam and its lenders agreed on digital
score targets to be reached during the life of
the financing. If Olam meets those targets, it
sees a reduction in loan pricing.
This is an important financial incentive to
borrowers to significantly improve their digital
maturity as fast as possible, said BBVA, digital
coordinator and facility agent on Olam’s deal.
Olam’s digital maturity score will be
determined using Boston Consulting Group’s
Digital Acceleration Index methodology,
assessing Olam across four digital criteria
comprising business strategy driven by
digital; digitising the core; new digital
growth; and enablers.
The financing is being provided on an equal
basis by mandated lead arrangers BBVA, DBS
Bank, First Abu Dhabi Bank, JP Morgan, Mizuho
Bank, Natixis and Standard Chartered.
“We believe that companies that
undertake a digital transformation will be
the winners in their sector in the long term,”
Ricardo Laiseca, BBVA’s head of global
finance, said.
“Digitisation translates into greater
competitiveness and profitability, which will
International Financing Review Asia April 13 2019
› UOB MAKES A SPLASH ON US T2 DEBUT
Singapore’s UNITED OVERSEAS BANK (Aa1/
AA–/AA–) drew considerable demand
across the Atlantic for its first US dollar-
denominated capital deal sold via 144A/
Reg S format.
UOB allocated 40% of the subordinated
bonds to US investors, overshadowing the
35% distribution to Asia and the 25% lot
given to Europe.
The US$600m Tier 2 10-year non-call
five bond priced at Treasuries plus 150bp,
or 25bp inside initial price guidance. Final
pricing was seen as offering a minimal
new issue concession despite issuing at the
tightest spread for a Basel III-compliant US
dollar-denominated Asian Tier 2, according
to Refinitiv data.
This is the first Singapore bank Tier 2
since the city state revised its bail-in rules
in 2018, which clarified when a bank
becomes non-viable, at which point holders
of the Tier 2 notes face a writedown in
their principal bond amount. By reducing
allow these companies to stay ahead of the
competition.”
Olam’s deal shows that the range of
targets around which PILs are structured is
expanding.
Already PILs have been tied to a wide
range of goals including carbon emissions,
fuel and water usage, employment,
renewable energy, access to affordable
energy, child labour, and the empowerment
of women.
In February, UK-based educational
technology group Pearson agreed a
US$1.19bn sustainability-linked loan
refinancing, the first syndicated loan globally
with targets linked to education.
The margin on the 5+1+1-year loan
is linked to Pearson’s commitment to
extend its vocational educational reach
internationally in support of the United
Nations’ sustainability goals, especially Goal
4 on education.
Bank of America Merrill Lynch and
Barclays coordinated the RCF as
bookrunning mandated lead arrangers. ANZ,
BNP Paribas, Citigroup, HSBC, JP Morgan,
MUFG and TD Bank were mandated lead
arrangers.
BNP advised on the sustainability element
of the loan, while Barclays is facility agent.
ALASDAIR REILLY
 COUNTRY REPORT SINGAPORE

uncertainty, the subordinated notes carry
lower credit risks.
The clarity prompted Moody’s to
upgrade T2 subordinated bonds issued
by Singaporean banks to A2 from A3 last
December.
UOB’s notes, which are expected to be
rated A2/BBB+/A+, drew over US$3bn in
orders from 176 accounts.
By investor type, fund managers took
58%, insurers and pensions 27%, the public
sector bought 8%, private banks and
corporates 4% and banks 3%.
Citigroup, Credit Suisse, HSBC, Standard
Chartered and UOB were joint bookrunners.
› FRASERS BUILDS PERPETUAL MOMENTUM
FRASERS PROPERTY priced a S$400m (US$295m)
perpetual non-call five bond on April 4,
Singapore’s largest corporate perp since 2017,
on the back of an investor-friendly structure
and heavy demand from private banks.
The bonds were priced at 4.98%, 27bp
inside initial guidance of 5.25% area, after
orders reached over S$900m.
The deal was the largest non-FIG
perpetual since Mapletree Investments sold
S$700m 3.95% perpetual non-call 5.5-year
notes in May 2017.
Demand was driven by private banks,
which took 90% of the bonds, leaving 10%
to asset managers, banks and corporate
investors. Singapore accounted for 94% of
the allocations.
The property developer offered a call in
year five, as well as a reset at the end of year
five to the prevailing Singapore SOR rate
plus the initial credit spread of 304bp, with a
100bp step-up at the year five as well.
This is a less aggressive structure than
previous Singapore dollar perpetual non-
call five bonds, which had resets and
step-ups only in year 10. For example, ST
Telemedia sold S$350m 5% perpetual notes
in January this year with a call in year five
but a reset and a step-up in year 10.
Fraser achieved a lower coupon and a
larger size than STT’s deal. However it offered
a good pick-up over the STT perpetuals,
which were quoted at around 4%.
Fraser Property settled its unrated
subordinated notes on April 11 off a S$5bn
multi-currency debt issuance programme.
Proceeds will be used for general corporate
needs and for debt refinancing.
Frasers Property Treasury was the issuer
of the notes, which are guaranteed by
parent Frasers Property.
OCBC Bank was sole lead manager and
bookrunner.
RESTRUCTURING
› E&Y WITHHOLDS PAC RADIANCE OPINION
The independent auditor of financially
strapped PACIFIC RADIANCE has withheld
its opinion on the company’s latest
annual results because of the uncertainty
surrounding its debt restructuring.
The Singaporean oil services company
reported last Thursday that its current and
total liabilities exceeded current and total
assets by US$486.75m and US$158.48m,
respectively, as at end-December 2018.
Auditor Ernst & Young said the
information provided for its audit
reflected Pacific Radiance’s assumption
that it was a going concern, but that there
were “material uncertainties” about the
appropriateness of that assumption.
The group’s assets, with a carrying value of
US$300.3m, are secured against bank loans,
on which certain covenants were breached in
2017. Banks agreed to temporarily suspend
certain debt obligations while discussions are
being held to restructure the loans.
In late August last year, holders of
S$100m (US$73.2m) 4.3% bonds consented
to a deferred cash payment and a debt-to-
equity swap.
In December, the company signed a
binding term-sheet with unidentified
parties for an investment of assets in
exchange of shares. The parties control
vessel-owning and logistics services
entities. This restructuring option is subject
to various approvals, including from
regulatory agencies and shareholders.
“These factors give rise to material
uncertainties on the appropriateness of the
use of the going concern assumption in the
preparation of the accompanying financial
statements of the group and the company,”
said Ernst & Young in a disclaimer to the
annual report.
As a result, it was not able to obtain
enough evidence to provide a basis for an
opinion on the results.
For the 2018 financial year, Pacific
Radiance reported a net loss of US$101.2m
(including impairment charges of US$53.6m).
Meanwhile, a Singapore High Court
moratorium on legal proceedings against
Pacific Radiance and subsidiaries Pacific
Crest and CSI Offshore is due to end on
April 18. The companies are expected to
apply to the court for further extensions.

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International Financing Review Asia April 13 2019 41


SOUTH KOREA
DEBT CAPITAL MARKETS
› KORES GOES OFFSHORE
KOREA RESOURCES CORP last Wednesday priced
US$400m five-year senior unsecured bonds
at Treasuries plus 102.5bp, drawing orders
of over US$2.85bn from more than 145
accounts.
Initial guidance was Treasuries plus
130bp area, before tightening to 105bp
area, plus or minus 2.5bp.
Asia took 88% of the Reg S notes and
EMEA 12%. Fund managers booked 63%,
central banks and banks took a combined
21%, insurers 10%, and private banks and
others a combined 6%.
Majority-owned Mexican subsidiary
MINERA Y METALURGICA DEL BOLEO will issue the
notes, which have expected ratings on par
with guarantor Korea Resources at A1/A
(Moody’s/S&P).
The senior unsecured notes have a
change of control put at par if the Korean
government ceases to own and control at
least 51% of the company.
LG Chem adds to green credentials
„ Bonds Korean petrochemical company funds Green business ventures
LG CHEM has burnished its environmentally
friendly credentials with a US$1.56bn-
equivalent 144A/Reg S Green bond offering
in two currencies.
The Korean petrochemical producer last
Monday priced a US$500m 3.25% 5.5-year
note at 99.855 to yield 3.279%, equivalent
to Treasuries plus 95bp. Initial guidance was
125bp area.
A US$500m 3.625% 10-year tranche
priced at 99.419 to yield 3.695%, equivalent
to Treasuries plus 117.5bp, inside initial
guidance of 145bp area.
LG Chem also sold €500m (US$563m)
0.5% four-year Green bonds at 99.61 to yield
0.599%. This was equivalent to mid-swaps
plus 65bp, inside initial price thoughts of
mid-swaps plus 90bp–95bp.
Orders were over US$2.2bn from 159
accounts for the 5.5-year dollar tranche.
Asia took 63% of the bonds, US accounts
20% and Europe 17%. By investor type, asset
managers and insurers booked a combined
67%, banks 26%, central banks 5% and
private banks 2%.
The 10-year drew orders of over US$2.6bn
42
Kores is a mineral resources developer
with a national policy role to secure
resources for Korean industries.
Citigroup, Credit Agricole, HSBC and JP
Morgan were joint bookrunners.
TAIWAN
SYNDICATED LOANS
› GRAND RIVER LAUNCHES MEZZANINE LOAN
GRAND RIVER DEVELOPMENT has launched a
US$100m three-year mezzanine to part-
finance the construction of Taipei Sky
Tower in Taipei’s Xinyi district.
Sole mandated lead arranger and
bookrunner Huatai Securities pre-funded the
deal in early March and is expected to close
syndication in late May or early June.
The project will cost about US$1bn to
develop and is expected to be completed in
2020.
The tower will house the Park Hyatt
Taipei and Andaz Taipei hotels, as well as
retail stores.
The project site was formerly that of
from 182 accounts, with Asia taking 63%,
Europe 22% and the US 15%. By investor
type, asset managers and insurers took 75%,
banks 18%, central banks 4% and private
banks 3%.
The bonds have expected ratings of A3/A–
(Moody’s/S&P), in line with the issuer, which
is a subsidiary of Korean chaebol LG Group.
Price references came from like-rated KT
Corp, which had August 2022 and July 2026
dollar bonds quoted at Treasuries plus 80bp
and 101bp, respectively, and SK Telecom,
which had April 2023 and July 2027 dollar
bonds seen at Treasuries plus 87bp and
103bp.
Pricing was in line with those companies,
although the 10-year arguably came inside
fair value, which was seen in the context of
100bp–120bp. The issuer benefited from
rarity value, as well as the relative scarcity
of Asian investment-grade issues this year,
helping it stand out in a crowded field of
over US$7bn in Asian emerging market bond
offerings on Monday. The green angle gave
it an extra appeal, especially for European
investors, some of whom bought both the
International Financing Review Asia April 13 2019
CTBC Bank’s headquarters. Taiwan-listed
CTBC Financial Holding sold 95% of the
site and building to Grand River in October
2015 and the tower was demolished in
2016.
In February 2016, Grand River raised a
NT$10.11bn (then US$304m) seven-year
loan to build Taipei Sky Tower. MLAB CTBC
Bank brought in nine lenders. The interest
margin was 210bp over Taibor and the top-
level upfront fee was 25bp. Green Heaven
Investments is the guarantor.
The latest mezzanine financing will
provide additional capital for building the
tower.
Project manager Riant Capital is a real
estate fund with more than US$1.5bn of
assets under management in North Asia.
› MULTIBANK INVITES ASIAN BANKS
Panama’s MULTIBANK has launched a
US$100m three-year bullet term loan,
tapping Asian loan market liquidity.
Standard Chartered and Sumitomo
Mitsui Banking Corp are the mandated
lead arrangers and bookrunners of the
financing, which pays an interest margin of
170bp over Libor.
Banks have been invited to join as MLAs
with commitments of US$25m or more for
euro and dollar tranches for their green
portfolios.
LG Chem is a petrochemical producer,
but it has diversified into manufacturing
rechargeable batteries, which includes
batteries for electric vehicles.
“It’s one of those issuers that is not
traditionally green, but is trying to green up
its operations with the bond proceeds,” said a
source close to the deal.
LG Chem has been investing heavily in
its battery business, and Moody’s wrote that
revenue from that division is expected to more
than double by 2020 from W6.5trn (US$5.7bn)
in 2018. This month, it set up a joint venture
with VinFast Trading and Production, a
subsidiary of Vingroup, to produce lithium ion
battery packs for the Vietnamese carmaker’s
electric scooters and cars.
Bank of America Merrill Lynch, BNP
Paribas, Citigroup, HSBC, Morgan Stanley
and Standard Chartered Bank were joint
bookrunners for both tranches.
The bonds were seen 5bp–8bp tighter in
secondary trading on Tuesday.
DANIEL STANTON

a top-level all-in pricing of 190bp through
an upfront fee of 60bp, lead managers with
US$15m–$24m for an all-in of 186.7bp
based on a fee of 50bp and participants
with US$10m–$14m for an all-in of 183.3bp
through a 40bp fee.
A bank presentation was held last week
in Taipei. Commitments are due by May 17.
There is a US$100m greenshoe option.
According to LPC data, Commerzbank
and StanChart provided a US$50m two-year
term loan for Multibank in October 2015.
4HEûBORROWERûISûRATEDû"""¦û30&ITCH 
› CHAILEASE HOLDING BACK FOR REVOLVER
CHAILEASE HOLDING is back for a US$150m
three-year revolving credit, less than a
month after one of its units raised a smaller
facility.
Mega International Commercial Bank
and Sumitomo Mitsui Banking Corp are the
mandated lead arrangers and bookrunners
of the new loan, which has a US$100m
tranche A led by Mega and a US$50m
tranche B led by SMBC.
Tranches A and B offer interest
margins of 126bp and 130bp over Libor,
respectively. For tranche A, the borrower
will pay any excess interest rate beyond a
35bp difference between TAIFX and Libor.
Banks are being invited to join as co-
arrangers with commitments of US$25m
or more for an upfront fee of 18bp, as
managers with US$18m–$24m tickets
for a 12bp fee, or as participants with
US$12m–$17m for a 7bp fee. The deadline
for commitments is April 19.
Funds are to refinance a US$100m three-
year loan the borrower raised in April 2016
and for working capital purposes. Mega
was the MLAB on that deal, which offered
a margin of 134bp over Libor, according to
LPC data.
At the end of March, US-based Grand
Pacific Finance, a unit of Chailease Holding,
raised a US$100m three-year financing.
Bank of Taiwan was the MLAB of that deal,
which offered margins ranging from 150bp
to 250bp over Libor.
› CIP SEEKS PROPOSALS FOR WIND FARM PF
Danish infrastructure fund management
company COPENHAGEN INFRASTRUCTURE PARTNERS
has sent out a request for proposals for a
loan of up to NT$69.8bn (US$2.3bn) to back
offshore wind projects in Taiwan.
CTBC Bank and MUFG are the financial
advisers on the loan, which has an 18-year
tenor.
Potential lenders are being asked to
submit indicative pricing, commitment
levels and other details by the April 26
response deadline.
The total cost of the projects in Taiwan’s
Changhua county is around NT$93bn.
Last April, Taiwan’s Ministry of
Economic Affairs awarded CIP a contract
for projects with a combined capacity of
900MW, including 600MW for projects
in Changfang and Xidao, located off the
coast of Changhua county, and 300MW
for Site 29, which CIP will develop with
partners China Steel and Diamond
Generating Asia.
The same month, Danish wind energy
developer Orsted A/S won a contract to
install 900MW of offshore wind capacity
at its Changhua 1 and 2a projects with
completion slated for 2021. Orsted is
expected to launch a NT$25bn five-year
wind farm loan into general syndication
soon. Bank of Taiwan, BNP Paribas and
Cathay United Bank are the mandated lead
arrangers and bookrunners. A Taiwan-
based unit of Orsted is the borrower on the
NT$25bn loan, while the parent company is
the guarantor.
Separately, German developer Wpd and
Taiwan’s Formosa II OWF are also in the
market for multi-billion US dollar project
financings for offshore wind farms, which
are also part of Taiwan’s target to install
5.5GW of offshore wind power capacity by
2025.
THAILAND
DEBT CAPITAL MARKETS
› GHB PLANS CHUNKY BOND
Thailand’s GOVERNMENT HOUSING BANK is
planning to market bonds in tenors of
three to 15 years to raise up to Bt20bn
(US$630m).
The state-owned financial institution,
locally rated AAA by Fitch, will offer three,
five, 10 and 15 years. Institutional investors
will be invited to subscribe to the notes
from April 24-26.
CIMB Thailand is sole lead manager for
the deal.
› TPI POLENE PLANS RETURN
TPI POLENE plans to return to the bond
market to raise up to Bt5bn three months
after it sold Bt3.5bn three-year bonds in
January.
CIMB Thai will reprise its role as sole lead
manager for the latest offering of bonds,
rated BBB+ by Tris.
The deal comes at an opportune time.
Last Wednesday, Tris upgraded its outlook
International Financing Review Asia April 13 2019
COUNTRY REPORT THAILAND
on the issuer’s rating to positive from stable
to reflect a potential improvement in its
financial profile when its power plants are
all at full operation.
The company is Thailand’s third largest
cement manufacturer and also has interests
in power generation. Its power plants sell
their entire electricity output to state-
owned Electricity Generating Authority of
Thailand.
TPI Polene plans to privately place
the notes to a small group of investors.
Proceeds will be used to refinance
Bt4.75bn of bonds that will mature this
year.
› BEM ROLLS OUT BOND PLANS
BANGKOK EXPRESSWAY AND METRO is planning to
sell up to Bt5bn of bonds in tenors of three
to 10 years over the next few weeks.
Bank of Ayudhya and Government Savings
Bank are joint lead managers for the deal.
Preliminary pricing indications are at
spreads of 80bp–90bp for the three-year
tranche, 105bp–115bp for the five-year
tranche, 125bp–135bp for the seven-year
tranche and 127bp–137bp for the 10-year
tranche.
The pre-marketing ranges offered by the
Thai mass rapid transit company are tighter
than those offered by THAI AIRWAYS, although
both issuers are rated the same by Tris, at A
with a stable outlook.
Thai Airways, which is due to hold
bookbuilding for a Bt10bn deal on April 23,
is indicating 40bp–50bp more than BEM
for the same tenors, mainly because of
the national air carrier’s higher leverage.
Bangkok Bank, Kasikornbank and Krungthai
Bank are joint lead managers for Thai
Airways’ deal.
BEM plans to open bookbuilding for
institutional and high-net-worth investors
in late April or early May.
› PERFECT PROPERTY BONDS
PROPERTY PERFECT, rated BB+ by Tris, will
invite institutional and high-net-worth
investors to subscribe next month to
four-year bonds to raise up to Bt2.5bn
(US78.8m).
The unrated bonds will pay 6.25% for the
first two years and 7.00% for the last two
years.
Subscription will be on May 7-9.
Globlex Securities, KT Zimco Securities, Capital
Nomura Securities, KGI Securities Thailand
and Yuanta Securities Thailand are joint lead
managers.
The Thai property developer will use
the proceeds to repay debt as well as fund
business expansion and working capital
needs.
43
 ASIA DATA
LAST WEEK’S ECM DEALS
Stock Country Date Amount Price Deal type Bookrunner(s)
Huya China 10/04/19 US$442m US$24 Follow-on (primary/ secondary) Citigroup, Credit Suisse, Goldman Sachs, Jefferies
Guotai Junan Securities China 10/04/19 HK$3.17bn HK$16.34 Follow-on (primary) Guotai Junan International, UBS
Zengame Technology China 10/04/19 HK$221m HK$1.23 IPO (primary) Guotai Junan International
China New Higher Education Group China 10/04/19 HK$393m HK$3.57 Follow-on (primary) CLSA
ReadyTech Australia 09/04/19 A$50m A$1.51 IPO (primary) Macquarie Capital, Wilsons Corporate Finance
Source: IFR Asia

LAST WEEK’S EQUITY-LINKED ISSUANCE

Issuer Country Date Amount Greenshoe Maturity Coupon (%) Premium (%) Bookrunner
Yuexiu Real Estate Investment Trust China 09/04/2019 HK$1.1bn 363 days 1.875% 2.5% DBS, HSBC, Nomura
Baozun China 08/04/19 US$275m 5 years 1.625% 30% Credit Suisse, Deutsche Bank
Source: IFR Asia

MERRILL LYNCH ASIAN DOLLAR INDEX

Index Description Index level 1 week total return 1 month total return 3 months total return OAS
ADIG Asian-dollar high-grade index 407.629 0.142 1.520 3.748 135
ADHY Asian-dollar high-yield index 644.372 0.046 2.097 7.344 500
AGIG Asian-dollar government high-grade index 379.921 0.213 1.857 3.690 115
AGHY Asian-dollar government high-yield index 768.292 0.243 2.853 7.087 371
ACIG Asian-dollar corporate high-grade index 434.126 0.117 1.408 3.788 144
ACHY Asian-dollar corporate high-yield index 528.373 0.008 1.954 7.373 525
Source: Merrill Lynch

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