JULY 4 2020 ISSUE 2340 www.ifre.

com

Call that a bazooka? Bond market pros

underwhelmed by Fed’s primary bond facility

Investor pushback sees €10.3bn ThyssenKrupp

Elevator buyout set post-Covid standard

Debt underwriting leads US$58bn first-half

fee bonanza for investment banks
PLUS: H1 LEAGUE TABLES

PEOPLE & MARKETS STRUCTURED EQUITY EMERGING MARKETS EMERGING MARKETS

JP Morgan set Right product, Ukraine pulls Pakistan plans
for outsized right time: CBs bond deal after US$1.5bn bond
equity derivatives on track for central banker market return
gains record year quits despite debt freeze
04 06 08 08
Building a better experience.
PFI is the leading source of global project finance intelligence, and PFI’s
online service – www.pfie.com – offers that news, data and analysis along
with intra-day updates and a suite of tools that make researching faster
and easier.

PFIe.com has just be redesigned, The site’s comprehensive and

authoritative coverage of the project finance sector now features a clean
new look and a slate of enhancements, including customisable alerts, faster
data updates, a personalised “My PFI” function, powerful new search
functionality and more intuitive navigation.

https://pfie.com/extra/pfi-help
Upfront
„ OPINION INTERNATIONAL FINANCING REVIEW

Meet the new normal… OFûAûPRIMARYûBONDûBUYINGûFACILITYûWHENûTHEREûREALLYûISûNOû

need for one.

W ho won in the latest round of the eternal battle

between sponsors and investors – aka the €10.3bn
lNANCINGûPACKAGEûBACKINGûTHEûBUYOUTûOFû4HYSSEN+RUPPSû
.OûBORROWERûWOULDûWANTûTOûACCESSûTHEûFUNDSûEARMARKEDû
FORûTHEûPRIMARYûFACILITYûnûANDûITSûNOTûCLEARûWHETHERûTHEYûCANû
ANYWAYûSUCHûAREûTHEûRESTRICTIONSûANDûINCONVENIENCESûBUILTû
elevator business? INTOûTHEûPROGRAMME
)TSûPROBABLYûFAIRûTOûSAYûITûWASûAûSCORE DRAW 2EADINGûBETWEENûTHEûLINESûTHATûISûNOTûAûMISTAKEû4HEû&EDûISû
4HEûlNANCINGûOFû!DVENTû#INVENûANDû'ERMANYSû2!'û HAPPYûTOûBIDEûITSûTIMEûANDûSAVEûITSûlREûPOWERûINûAûCOUNTRYûTHATû
&OUNDATIONSûõBNûACQUISITIONûOFû4+%ûWASûUNDERWRITTENûINû COULDûWELLûSEEûAûSELL OFFûAMIDûANOTHERûSPIKEûINû#OVID û
&EBRUARYûWHILEûTHEûMARKETûWASûSTILLûRUNNINGûHOT INFECTIONSûANDûTHEûDISJOINTEDû53ûRESPONSEûTOûTHEûHEALTHûCRISISû
3OûWHENûINVESTORSûOPENEDû4+%SûOFFERINGûMEMORANDUMûINû
*UNEûHAVINGûSEENûAGGRESSIVEûRESTRUCTURINGSûFOLLOWINGû
-ARCHSûMARKETûCOLLAPSEûTHEYûWEREûHORRIlED Mysterious ways
4HEûTERMSûWEREûAûHOMAGEûTOûCLEVERûLAWYERSûAGGRESSIVEû
SPONSORSûANDûABOVEûALLûAûPRE CORONAVIRUSûMARKETûWHEREû
YIELDSûHADûBEENûCRUSHEDûBYûCENTRALûBANKûACTIVITYûENABLINGû
SPONSORSûTOûGETûAWAYûWITHûSTRIPPINGûINVESTORûPROTECTIONS
I TSûHARDûNOTûTOûWONDERûWHATû5ûFRONTMANû"ONOûMIGHTû
MAKEûOFû0AKISTANSûPLANSûTOûRETURNûTOûTHEûINTERNATIONALû
BONDûMARKETS
"UYSIDERSûPUSHEDûBACKûKNOWINGûTHATûTHEûlNALûSHAPEûOFûTHEû 4HEû)RISHûROCKûSTARûHASûBEENûAûVOCALûSUPPORTERûOFûDEBTûRELIEFû
DOCUMENTATIONûWILLûBECOMEûAûNEWûBENCHMARKûFORûALLûMAJORû FORûTHEûWORLDSûPOORESTûNATIONSûOVERûTHEûYEARSûTHROWINGûHISû
BUYOUTûlNANCINGSûINûAûPOST #OVIDûWORLD WEIGHTûBEHINDûTHEûSUCCESSFULûh$ROPûTHEû$EBTvûCAMPAIGNûINû
(OWEVERûWHILEûTHEûCHANGESûCURTAILEDûSOMEûOFûTHEûDEALSû THEûEARLYûS
WORSTûEXCESSESûTHEûTERMSûAREûSTILLûFAIRLYûBORROWER FRIENDLY 0AKISTANûHASûSIGNEDûUPûnûALONGSIDEûMOREûTHANûûOTHERû
)NVESTORSûASKEDûFORûûCHANGESû4HEYûGOTû BORROWERSûnûTOûAûLANDMARKû0ARISû#LUBûANDû'ûINITIATIVEûTHATû
4HEûDOCUMENTSûAREûSTILLûHEAVILYûSTACKEDûINûFAVOURûOFûTHEû ALLOWSûPOORûCOUNTRIESûTOûSUSPENDûDEBTûSERVICINGûFORûTHEûRESTû
BORROWERûINûTERMSûOFûCARVE OUTSûBASKETSûANDûEXEMPTIONS OFûûWHILEûTHEYûlGHTûTHEû#OVID ûPANDEMIC
)TûMAYûLOOKûLIKEûTHEûSPONSORSûCONCEDEDûGROUNDûTOûINVESTORSû !TûTHEûSAMEûTIMEûASûSEEKINGûOFlCIALûDEBTûRELIEFûHOWEVERû
BUTûTHEYûWILLûSTILLûBEûSMILINGû)TûLOOKSûLIKEûTHISûhNEWûNORMALvû THEûCOUNTRYûISûPREPARINGûTOûISSUEûUPûTOû53BNûOFûSOVEREIGNû
MIGHTûNOTûBEûSOûNEWûAFTERûALL BONDSûASûEARLYûASûNEXTûMONTHû)TSûHARDûTOûIMAGINEûTHATû"ONOû
ORûANYûOFûTHEû0ARISû#LUBûCREDITORSûWOULDûBEûIMPRESSEDûBYûTHATû
OUTCOMEûESPECIALLYûASûTHEû'ûHASûCALLEDûFORûTHEûPRIVATEû
On hold SECTORûTOûSHAREûTHEûBURDENûTOO
!ûSUCCESSFULûBONDûMARKETûRETURNûHOWEVERûWOULDûBEûAû

4 HEûLAUNCHûOFûTHEû53û&EDERALû2ESERVESûPRIMARYûCORPORATEû
BONDûBUYINGûFACILITYûHARDLYûCAUSEDûAûSTIRûLASTûWEEKûASû
SYNDICATEûDESKSûFEASTEDûONûTHEûFEESûTHATûHAVEûCOMEûFROMû
SIGNIlCANTûVOTEûOFûCONlDENCEûINû0AKISTANSûPROSPECTSûANDû
MAYûBEûONCEûAGAINûAûVIABLEûOPTIONûFORûTHEûLOWû3INGLEû"û
COUNTRYûNOWûTHATûEMERGINGûMARKETûYIELDSûHAVEûRETREATED
RECORDûISSUANCEûVOLUMESûOVERûTHEûPASTûMONTHS &ORû0AKISTANûTOûISSUEûBONDSûWHILEûSEEKINGûDEBTûRELIEFûWOULDû
/FûCOURSEûTHOSEûSYNDICATEûBANKERSûnûANDûMOREû BEûUNUSUALûBUTûMAYûNOTûBEûIMPOSSIBLEûCOUNTRIESûSUCHûASû
IMPORTANTLYûTHEIRûISSUINGûCLIENTSûnûHAVEû*EROMEû0OWELLûTOû -ONGOLIAûHAVEûJUGGLEDû)-&ûBAILOUTSûANDûCOMMERCIALû
THANKûFORûTHEûTHRIVINGûMARKETSû.OTûASûLASTûWEEKûMADEûCLEARû BORROWINGSûINûTHEûPASTû4HEû0ARISû#LUBûSUSPENSIONûISûALSOû
BECAUSEûTHEû&EDûISûBUYINGûBONDSûINûTHEûPRIMARYûORûSECONDARYû LIMITEDûINûSCOPEûSINCEûITûONLYûDEFERSûPAYMENTSûDUEûBEFOREûTHEû
MARKETSûITûHARDLYûIS ûBUTûBECAUSEûITûMIGHT ENDûOFûûANDûDOESûNOTûEXPLICITLYûREQUIREûBORROWERSûTOû
4HEûMEREûANNOUNCEMENTûTHATûTHEû&EDûHADûSETûASIDEû WRITEûDOWNûPRIVATEûCREDITORS
53BNûTOûBUYûCORPORATEûBONDSûnûSOMETHINGû !ûCOMMERCIALûNEWûISSUEûWOULDûOFFERûLONGER
TERMûFUNDSû
UNPRECEDENTEDûINûTHEû53ûnûWASûSUFlCIENTûTOûREVERSEûSPREAD
ANDûANû!UGUSTûLAUNCHûWOULDûNOTûLEAVEû0AKISTANûWITHûANYû
WIDENINGûANDûOPENûTHEûPRIMARYûMARKETSûTOûAûWHOLEûSLEWûOFû ADDITIONALûûDEBTûSERVICINGûREQUIREMENTSûASûTHEûlRSTû
CORPORATESûINCLUDINGûTHOSEûHITûHARDESTûBYûTHEû#OVID
û COUPONûWOULDûFALLûINû
PANDEMIC )NûTHESEûEXTRAORDINARYûTIMESûVULNERABLEûCOUNTRIESûSUCHûASû
5NLIKEûTHEû%#"ûWHICHûHASûWADEDûFULLYûINTOûTHEûMARKETû 0AKISTANûNEEDûTOûBEûABLEûTOûACCESSûFUNDINGûFROMûASûMANYû
THEû&EDûHASûSTOODûBACKûPURCHASINGûJUSTûOVERû53BNûOFû
CORPORATEûBONDSûANDû%4&SûASûOFû*ULYûûANDûBARELYûMAKINGûAû
DENTûINûPRICES
)TûWASûAûNICEûSLEIGHTûOFûHANDûBYûTHEû&EDûCHAIRMANû"UTûASûINû
TERMûDEBTûBURDENû
SOURCESûASûPOSSIBLEû2ESTORINGûACCESSûTOûTHEûCAPITALûMARKETSû
WOULDûBEûAûSIGNIlCANTûSTEPûFORWARDû"UTûITûWOULDûALSOû
HIGHLIGHTûTHEûTRICKYûSITUATIONûTHATûTHESEûPOORERûBORROWERSûAREû
TRAPPEDûINûTRYINGûTOûLESSENûTHEIRûSHORT
ALLûMAGICûSHOWSûTRUSTûISûIMPORTANTûANDû0OWELLûREALISEDûHEû DURINGûANûUNPRECEDENTEDûCRISISûWHILEûKEEPINGûANûEYEûONû
HADûTOûFOLLOWûTHROUGHûONûPROMISESûMADEûnûHENCEûTHEûLAUNCHû RETAININGûMARKETûACCESSûINûTHEûLONGERûTERM

International Financing Review July 4 2020 1

Top news
DCM leads fee bonanza 04 CBOs coming back 05 Converts on track for record 06

Fed launches primary bond facility

„ Bonds Call that a bazooka? Bond market pros underwhelmed by Fed’s primary backstop

BY PAUL KILBY, WILLIAM HOFFMAN, in contrast to the European to make use of the Primary “American Airlines raised
DAVID BELL #ENTRALû"ANKûWHICHûHASûAûPOLICYûOFû -ARKETû#ORPORATEû#REDITû&ACILITYû MONEYûAûWEEKûAGOûBUTûATûû
regularly buying corporate bonds WHICHûWASûLAUNCHEDûONû-ONDAY There is a decent amount of
The launch of the US Federal in both primary and secondary. h)ûTHINKûITûISûWORTHLESSvûTHEû AMBIGUITYûTHEREv
Reserve’s primary corporate
bond purchasing facility and the
unveiling of more details of its
secondary purchases left
û
BANKERSûSHRUGGINGûLASTûWEEK
Bankers say that the backstops
Nor has the Fed made much of
a dent in the secondary markets
WHEREûITûHASûONLYûINCREMENTALLYû
BEENûBEINGûBUYINGûnûlRSTû%4&Sû
ANDûNOWûINDIVIDUALûBONDS
And even then it appears to have
SYNDICATEûBANKERûSAIDûh)TûWONTû
DOûANYTHINGv
That is largely because the Fed
has insisted on keeping the
requirement that only
BORROWERSûhUNABLEûTOûSECUREû
)NDEEDûINûAûMARKETûTHATû
REMAINSûWIDEûOPENûnûINCLUDINGû
for those corporates most
IMPACTEDûBYûTHEû#OVID
PANDEMICûnûFEWûISSUERSûSEEMûTOû
qualify to use the primary facility.
currently serve little purpose in FOCUSEDûLARGELYûONûLIQUIDûNAMESû adequate credit And those that do may have
AûTHRIVINGûMARKETûWHILEû INCLUDINGû9ANKEEûISSUERSûACCORDINGû ACCOMMODATIONSvûCANûACCESSûTHEû second thoughts about the
ACKNOWLEDGINGûTHATûTHEû&EDSû TOûDATAûRELEASEDûLASTûWEEK primary facility. POTENTIALûWHIFFûOFûDESPERATIONû
promise to provide liquidity h4HEYûAREûBUYINGûBONDSûWITHû Those parameters may be that comes from leaning on
WHENûNEEDEDûWASûTHEûCATALYSTû less than a three-year duration at HARDûTOûDElNEûAGAINSTûISSUERSû WHATûAPPEARSûTOûBEûAûLENDINGû
for a record surge in issuance JUSTû53MnMûATûAûTIMEvûSAIDû relentless march to market over facility of last resort.
volumes across the US high- a syndicate banker. “There are THEûPASTûFEWûMONTHS 0ARTICIPATIONûWILLûALSOûCOMEûATû
GRADEûANDûJUNKûBONDûMARKETS about 20 accounts out there that “If I am being asked to provide AûCOSTû4HEû0-##&ûREQUIRESûAû
,ASTûWEEKSûANNOUNCEMENTSû AREûBIGGERûTHANûTHESEûGUYSv AûSTATEMENTûTHATûAûBORROWERû 100bp facility fee to be paid by
about the primary and secondary doesn’t have access to ‘adequate THEûBORROWERû&ORûEXAMPLEûIFû
BONDûBUYINGûFACILITIESûSHOWûTHEû NO RUSH CREDITûACCOMMODATIONSûISûITûAû THEû0-##&ûBUYSû53MûOFûAû
Fed is treading carefully and !NDûBARRINGûAûMARKETûDOWNTURNû QUESTIONûOFûPRICEvûASKEDûAû 53BNûBONDûTHEûBORROWERûWILLû
limiting the scope of its activity – FEWûBELIEVEûCORPORATESûWILLûRUSHû second syndicate banker. PAYûAûFEEûOFû53MûATûCLOSE

TKE buyout sets post-Covid standard

„ Bonds/Loans Deal flies over the line after covenant capitulation

BY ELEANOR DUNCAN, BEFOREûYIELDSûROCKETEDûFOLLOWINGû Leads ended up making 25 order to optimise the success of
CLAIRE RUCKIN THEûGLOBALûSPREADûOFû#OVID  changes to the covenants. Investors THEûTRANSACTIONvûSAIDûTHEûSOURCE
7HENûTHEûDEALûWASû had requested 75 changes. Loan investors pushed back
THYSSENKRUPP ELEVATOR’s ANNOUNCEDûLASTûMONTHûTHEû “TKE took an amalgamation of more strongly on the
leveraged buyout pulled in more COVENANTSûWEREûDESCRIBEDûBYû all precedents and created a doc documentation than bond
than €25bn in investor demand some analysts as some of the RIDDLEDûWITHûHOLESûTHATûAFFORDEDûNOû BUYERSû)NûTHEûENDûTHEûCHANGESû
despite a standoff over the deal’s WEAKESTûTHEYûHADûEVERûSEENûINû PROTECTIONSûWHATSOEVERvûSAIDûAû WEREûMOREûIMPORTANTûFORûTHEû
aggressive covenant package. the market. syndicate head. “[With the changes] oversubscription of the deal as
The €10.3bn bond and loan 4HEûTERMSûWOULDûHAVEûGIVENû it still has reasonably aggressive OPPOSEDûTOûITSûDO ABILITYûSAIDûTHEû
lNANCINGûCLOSEDûLASTûWEEKûBUTû THEûSPONSORSûVASTûmEXIBILITYûTOû docs but it has reined in many of BANKERûFAMILIARûWITHûTHEûDEAL
ONLYûAFTERûTHEûBORROWERûMADEû pay themselves dividends and to THEûEXCESSESûANDûSHOWNûTHATûTHEû
substantial investor-friendly TRANSFERûASSETSûAWAYûFROMûTHEû INVESTORSûWONTûJUSTûROLLûOVERv VERY AGGRESSIVE
TWEAKSûTOûITSûDOCUMENTATION bondholder group. Analysts at high-yield The changes to documentation
3PONSORSû!DVENTû#INVENûANDû The proposed aggressive ANALYTICSûlRMûlNûWHOûHADû WILLûBECOMEûTHEûNEWûBENCHMARKû
RAG Foundation agreed a €17.2bn LANGUAGEûWASûSIMILARûTOûTHATûONû been very critical of the original FORûOTHERûDEALSûTOûFOLLOWûINûAû
acquisition of ThyssenKrupp’s deals from certain highly TERMSûSAIDûTHEûTWEAKSûLEFTûTHEû POST #OVIDûWORLD
elevators division in February. As CONTROVERSIALû53ûISSUERSûSUCHûASû BONDûFARûMOREûINûLINEûWITHû h%VENûWITHûTHEûCHANGESûTHEû
WELLûASûBEINGûONEûOFûTHEûLARGESTû *û#REWûALTHOUGHûBANKERSûSAWû market precedent for large docs are still stacked heavily in
,"/SûINûAûDECADEûITûWASû some of the reaction to the sponsor transactions. favour of issuers and I don’t think
UNDERWRITTENûWITHûAûDEBTûlNANCINGû terms as hyperbolic. Another source close to the deal ITûWILLûEVERûMOVEûAWAYûFROMûTHATû
put together before the coronavirus “Was it an aggressive SAIDûITûWASûINûVERYûSTRONGûSHAPEû SITUATIONvûSAIDûANûINVESTOR
pandemic disrupted the markets. covenants package? Yes. That’s THROUGHOUTûANDûTHATûITûWASû “The toothpaste is out of the tube
That meant banks had ABSOLUTELYûFAIRû"UTûWASûITûTHEû DEBATABLEûWHETHERûTHEûCOVENANTû and it’s not going back in. There are
committed to the aggressive terms WORSTûTHEûMARKETûHASûEVERûSEENû CHANGESûWEREûNECESSARY SOûMANYûBASKETSûCARVE OUTSûANDû
nûWITHûSOMEûmEXûnûWHENûTHEû !BSOLUTELYûNOTvûSAIDûAûBANKERû h;,EADS=ûWEREûJUSTûRESPONDINGûTOû EXEMPTIONSûONû4+%ûTHATûITûISû
MARKETûWASûSTILLûQUITEûBULLISHûANDû FAMILIARûWITHûTHEûDEAL WHATûTHEûMARKETûHASûASKEDûFORûINû ridiculous. From day one they can

2 International Financing Review July 4 2020

 @ For daily news stories
visit www.ifre.com

D&B continues IPO hot streak 07 Ukraine pulls bond 08 Pakistan plans bond return 08

Further restrictions include BUTûCLEARLYûWEûAREûWAITINGûONû SELL OFFûPOTENTIALLYûPROVIDINGûANû lNANCINGûYOUûCOULDûRINGûUPûTHEû

the fact that eligible issuers must second-quarter results and INCENTIVEûFORûBORROWERSûTOûTAPû &EDûANDûTHEYûWOULDûTAKEûûOFû
be rated at least investment ECONOMICûRESULTSûWHICHûAREûBOTHû the facility given the substantial THEûDEALvûSAIDûTHEûSECONDû
grade as of March 22 and carry at GOINGûTOûBEûWEAKûINûANûHISTORICALû cost savings. syndicate banker.
least a BB–/Ba3 rating at the time CONTEXTûANDûCOULDûCAUSEûSOMEû h"UTûCERTIlCATIONûHASûTOû
the facility buys their debt. VOLATILITYvûSAIDû.ICHOLASû%LFNERû REMAINING GLITCHES HAPPENûSOûINûEFFECTûYOUûAREû
Bonds or loans must also have co-head of research at )NûTHEûMEANTIMEûTHEû taking the trade overnight. That
AûMATURITYûOFûFOURûYEARSûORûLESSû "RECKINRIDGEû#APITALû!DVISORS mechanics of selling bonds under ISûHOWû)ûWOULDûTHINKûABOUTûTHEû
and the Fed cannot buy more )NûAûREPORTûRELEASEDûLASTûWEEKû 0-##&ûAREûSTILLûAûWORKûINû SYNDICATIONûPROCESSv
THANûûOFûANYûSYNDICATEDû Barclays pointed out that the PROGRESSûANDûITûAPPEARSûTHATûAûFEWû Other issues that could cause
bond or loan issuance. primary facility carries spread glitches need to be ironed out. hiccups include the types of
caps on pricing that could come h)FûORDERûBOOKSûWEREûNOTû covenants the Fed requires on
READY AND WAITING LOWERûTHANûMARKETûLEVELSûINûAû SUFlCIENTLYûSIZEDûTOûGETû BONDSûPOSSIBLYûSUBORDINATINGû
%VENûSOûSHOULDûMARKETSûSEIZEûUPû other bondholders in the process.
AGAINûTHEû&EDûISûNOWûREADYûTOû FED'S WEEKLY CORPORATE BOND PURCHASES
RESPONDûANDûWITHûSUBSTANTIALûlREû US$bn
POWERûnûWITHûAûTOTALûOFûUPûTOû 2.0
1.770
53BNûFROMûTHEûCOMBINEDû
1.496
secondary and primary facilities. 1.5
1.301
)TûAPPEARSûTHATûTHEû0-##&ûISû
designed to act as a backstop for 1.0
Even then it remains unclear
WHETHERû&EDûPARTICIPATIONûWOULDû
ULTIMATELYûLUREûAûSUFlCIENTû
1.683 number of investors into a
1.528
struggling order book to make
1.296
1.220 for a successfully priced deal.
h7EûWOULDNTûINVESTûJUSTû
EXACTLYûSUCHûCIRCUMSTANCESûANDû BECAUSEûTHEû&EDûISûINVOLVEDvû
could in fact provide relatively
0.5
CHEAPûlNANCINGûIFûSPREADSûGAPû
out to similar levels to those
0
SAIDû$AVIDû.ORRISûHEADûOFûCREDITû
0.305 for North America at
4WENTY&OURû!SSETû-ANAGEMENT
seen in March. 13/05 20/05 27/05 03/06 10/06 17/06 24/06 01/07 h)ûSEEûTHEûBENElTûTOûTHEûISSUERû
“The near term need for the 2020 BUTûFROMûOURûSIDEûTHATûWOULDNTû
0-##&ûMIGHTûNOTûBEûAPPARENTû Source: Federal Reserve BEûAûCONSIDERATIONv „

raise more debt so there are no real for banks to be more ambitious PRICING DETAILS  û4+%ûALSOûLANDEDûTWOû53ûDOLLARû
CONTROLSûONûTHISûTIGHTENEDûORûNOTv ABOUTûUNDERWRITINGûLEVERAGEDû 4HEûlNALûBREAKDOWNûFORûTHEû tranches: a €1.404bn-equivalent
)NVESTORSûHAVEûWITNESSEDûSTEADYû buyouts. LOANûPORTIONûWASûAûEUROû4,"û seven-year non-call three senior
covenant erosion in sponsor-led The bumper orders enabled increased to €1.015bn (from SECUREDûATûûFROMû ûANDûAû
BONDSûOVERûTHEûPASTûDECADEû arrangers to optimise the capital €1bn) and a dollar TLB increased €401m-equivalent eight-year non-
thanks to market intervention by STRUCTUREûTIGHTENûPRICINGûANDû to €2.588bn-equivalent (from CALLûTHREEûSENIORûATûûFROMû
THEûCENTRALûBANKûWHICHûHASûTHEû STAYûWITHINûTHEûmEXûTOûMAKEûFULLû €2.05bn).   
BUYSIDEûSCRAMBLINGûFORûINCOMEû FEESûALLAYINGûANYûFEARSûOVERû While margins remained the 4HEûlNANCINGûALSOûINCLUDEDû
said a second investor. selling such a large deal during same at 425bp over Euribor/ õBNûOFûUNFUNDEDûFACILITIESû
Those technicals mean that THEû#OVID ûPANDEMIC ,IBORûTHEûLOANSûPRICEDûATûû comprising a €1bn 6.5-year
INVESTORSûAREûALWAYSûJUGGLINGûTHEû “People can be a little more /)$ûAFTERûLAUNCHINGûATûnû REVOLVINGûCREDITûFACILITYûPAYINGû
MERITSûOFûAûCREDITûAGAINSTûHOWûLOOSEû FORWARD LOOKINGûNOWûnûTHEREûISû guidance. 300bp over Euribor/Libor and a
the legal terms are for the deal. clearly a deep bid for the right Goldman Sachs WASûLEFT LEADûONû õBNû YEARûGUARANTEEû
"UTûSINCEûTHEûCORONAVIRUSûCRISISû CREDITvûSAIDûTHEûBANKERûFAMILIARû THEûDOLLARûTRANCHEûWITHûUBSû FACILITYûPAYINGûû4HEREûISû
buysiders are more focused on WITHûTHEûDEALûh!REûWEûMOREû BarclaysûCredit SuisseûDeutsche Bank also a €650m-equivalent private
their ability to recoup value from COMFORTABLEûWITHûUNDERWRITINGû and RBC as arrangers. On the euro SENIORûUNSECUREDûNOTEûSOMEûOFû
BUSINESSESûIFûTHINGSûGOûWRONG leveraged buyouts post- TRANCHEû5"3ûWASûLEFT LEADûWITHû WHICHûWASûPLACEDûWITHûINVESTORSû
h#OVENANTSûAREûAûHUGELYû 4HYSSEN+RUPPûTHANûWEûWEREû "ARCLAYSû#REDITû3UISSEû$EUTSCHEû in March.
important part of our BEFOREû9ESûABSOLUTELYv 'OLDMANûANDû2"#ûASûARRANGERS The three global coordinators
investment thesis as they Banks took some pressure off Pricing on the bond and bookrunners for the bonds
DICTATEûHOWûMUCHûAûCOMPANYûISû themselves early on in the COMPONENTûWASûALSOûTIGHTENEDû WEREû"ARCLAYSû#REDITû3UISSEûANDû
ABLEûTOûHURTûBONDHOLDERSûWITHû EXECUTIONû3HORTLYûAFTERûTHEûDEALû prior to close. Pricing on a €1.1bn 'OLDMANû3ACHSû$EUTSCHEû2"#û
VARIOUSûTRANSACTIONSvûSAIDûTHEû WASûAGREEDûINû&EBRUARYûLEADSû seven-year non-call three senior ANDû5"3ûWEREûBOOKRUNNERS
second investor. PLACEDûAûõBNû0)+ûWITHûAû SECUREDûWASûûPREVIOUSLYû h4HEREûWASûSOMETHINGûFORû
“Ultimately it creates a higher NUMBERûOFûINVESTORSûINCLUDINGû n ûANDûAûõMûSEVEN everyone in this deal – loans and
hurdle for the fundamental GS MBD. year non-call one senior secured BONDSûSECUREDûUNSECUREDû
STORYûTOûGETûOVERvûHEûSAID “After [leads] placed the mOATING RATEûNOTEûPRICEDûATûBPû euros and dollars. They raised a
riskiest part of the capital OVERû%URIBORûATûAûû/)$û!û massive amount and it traded
LBO AMBITIONS structure [they] felt that [they] €650m eight-year non-call three UPûNICELYûWHICHûSUGGESTSûTHEû
Bankers say the success of the had derisked the transaction SENIORûWASûPRICEDûATûûFROMû WORLDûISûALIVEûANDûWELLûFORûNOWvû
TKE LBO has opened the door SOMEWHATvûSAIDûTHEûBANKER nûAFTERûWHISPERSûOFûn the second investor said. „

International Financing Review July 4 2020 3

Top news
Debt underwriting leads US$58bn
first-half fee bonanza
„ People & Markets First-half fees up 9% versus a year ago as debt power houses reap rewards

BY STEVE SLATER 4HEûRECOVERYûWASûSPEARHEADEDû 4HEûSECONDûQUARTERûWASûTHEû THINKûWILLûBEûVERYûACTIVEû3OVEREIGNSû

BYûDEBTûCAPITALûMARKETSûWHEREû busiest three months ever for WILLûBEûISSUINGûDEBTûANDûFUNDINGûFORû
Global investment banks pulled 53TRNûWASûISSUEDûGLOBALLYûINû $#-ûANDû53ûINVESTMENTûGRADEû AûLONGûPERIODûGOINGûFORWARDvû$RURYû
INûALMOSTû53BNûMOREûINûFEESû THEûlRSTûSIXûMONTHSûUPûû DEBTûISSUANCEûOFû53TRNûWASû SAIDûCITINGûRECORDûISSUANCEûFROMû
from debt and equity from a year earlier and the more than double a year ago and the likes of Spain and Italy.
UNDERWRITINGû-!ûADVISORYûANDû STRONGESTûlRST HALFûSINCEûRECORDSû HASûALREADYûSURPASSEDûALLûOFûû So too supranationals and
LOANûSYNDICATIONSûINûTHEûlRSTûHALFû BEGANûINûû2ElNITIVûSAID after the three busiest months lNANCIALSû$RURYûSAIDûONûAû
OFûTHISûYEARûTHANûAûYEARûEARLIERû EVERûINû!PRILû-AYûANDû-ARCHûINû WEBCASTûBRIElNGûh4HEûlNANCIALû
led by record debt issuance. UP, UP AND AWAY: H1 FEES JUMP order of issuance volume). SECTORûRELATIVEûTOûCORPORATESûHASû
4HEûFEESûBONANZAûWILLûADDûTOû VS YEAR AGO "ANKERSûRECKONûTHATûWHILEûTHATû been relatively quiet in the
bumper trading revenues and US$m MAYûSLOWûINûTHEûSECONDûHALFûOFûTHEû SECONDûQUARTERûBUTû)ûTHINKûTHEû
5,000
HELPûBANKSûWITHSTANDûANOTHERû YEARû$#-ûDESKSûSHOULDûSTAYûBUSYû FUNDINGûFROMûBANKSûWILLû
EXPECTEDûJUMPûINûPROVISIONSûINû 4,500 as countries need to fund the costs increase quite meaningfully in
second-quarter results for bad 4,000 of support programmes and THEûREMAINDERûOFûTHEûYEARv
loans due to the coronavirus 3,500 lNANCIALûlRMSûCOULDûMAKEûUPûFORû
PANDEMICûANDûLOCKDOWNûANDû 3,000 LOWERûISSUANCEûBYûCORPORATES US BANKS LEAD
THEûNEGATIVEûIMPACTûOFûLOWû 2,500 h)ûTHINKûVOLUMESûWILLûCONTINUEû 4HEûBIGû53ûBANKSûAREû$#-û
interest rates. 2,000 TOûBEûELEVATEDûBUTûTHEûMIXûWILLû POWERûHOUSESûANDûSOûREAPEDûTHEû
Global fees for debt and equity 1,500 SHIFTûSLIGHTLYvûSAIDû0HILû$RURYû REWARDûANDûINVESTMENTûBANKINGû
UNDERWRITINGûADVISORYûANDû 1,000 HEADûOFûBANKINGûCAPITALûMARKETSû FEESûROSEûBYûûORûMOREûATûEACHû
SYNDICATEDûLOANSûWASû53BNû 500 and advisory for EMEA at OFûTHEûTOPûlVEûlRMSû!TûCITIGROUPû
INûTHEûlRSTûSIXûMONTHSûOFûTHISû 0 #ITIGROUPûh7HENûYOUûSEEûTHEû FEESûROSEûûTOû53BN
Barclays
Citigroup
JPM

BofA

MS
CS

Wells Fargo

BNPP
Goldman

Deutsche

YEARûUPûûFROMû53BNûAû heightened activity of Q2 then JP MORGAN remained the

YEARûEARLIERûACCORDINGûTOû the natural assumption is that a MARKETûLEADERûFORû$#-ûANDû
2ElNITIVûDATAû4HATûWASûAûSTARKû lot of corporates have front-end OVERALLûFEESûBRINGINGûINû
2019 2020
TURNAROUNDûFROMûMID -ARCHûASû loaded their funding needs. 53BNûUPûûFROMûAûYEARû
Source: Refinitiv fees for debt and equity
FEESûWEREûDOWNûûINûTHEûlRSTû underwriting, M&A advisory and “But there are other segments of AGOûFORûAûûSHAREûOFûTHEû
quarter from a year earlier. syndicated loans THEûDEBTûCAPITALûMARKETSûTHATûWEû global market. It advised on

JP Morgan set for equity derivatives gains

„ People & Markets Equity flow trading powers substantial rise in revenues

BY CHRISTOPHER WHITTALL BEENûPIVOTALûTOûTHISûYEARSûGAINSûASû said in late May that trading 4HATûCONTRASTSûWITHûTHEû
JP Morgan’s traders have managed revenues in its markets division DIFlCULTIESûATûSOMEûLARGEû%UROPEANû
JP MORGAN is set to report another TOûREAPûHEFTYûPROlTSûAMIDûSOMEû WEREûONûTRACKûTOûRISEûûANNUALLYû BANKSûWITHûEQUITYûDERIVATIVESûUNITSû
impressive quarter in equity SIZEABLEûSWINGSûINûSTOCKûMARKETS INûTHEûSECONDûQUARTERûLEDûBYûlXEDû that are more heavily geared
DERIVATIVESûFOLLOWINGûTHROUGHûONû The bank has made more than INCOMEûASûWELLûASûAûhVERYûSOLIDû TOWARDSûCOMPLEXûINVESTMENTû
substantial gains it made earlier this 53MûINûEQUITYûmOWûTRADINGûINû PERFORMANCEûINûEQUITYv PRODUCTSûWHICHûPROVEDûCOSTLYûTOû
year in its stock-trading division. THEûlRSTûHALFûOFûTHEûYEARûWITHûATû %QUITIESûACCOUNTEDûFORûûOFû manage during the March turmoil.
The US’s largest bank made least half of that coming in the *0û-ORGANSû53BNûINûlRST ".0û0ARIBASûANDû3OCIETEû'ENERALEû
NEARLYû53BNûINûTHEûlRSTûHALFûOFû SECONDûQUARTERûSOURCESûSAYûnû quarter markets revenues. TWOûOFûTHEûMOSTûPROMINENTûBANKSû
THEûYEARûINûEQUITYûDERIVATIVESû ALREADYûSURPASSINGûITSûûREVENUEû INûTHESEûACTIVITIESûBOTHûREPORTEDû
ACCORDINGûTOûSOURCESûFAMILIARûWITHû haul several times over in this area. IN THE FLOW HEAVYûWRITE DOWNSûONûSTRUCTUREDû
THEûMATTERûAûGROUPûOFûACTIVITIESû Trading convertible bonds has been Equity derivatives have helped PRODUCTSûINûTHEûlRSTûQUARTER
THATûINCLUDESûTRADINGûSTOCKûOPTIONSû ANOTHERûBRIGHTûSPOTûFOLLOWINGûAû propel US banks’ stock-trading JP Morgan had the largest market
selling equity-linked investment RUSHûOFûNEWûISSUANCE UNITSûFORWARDûTHISûYEARûAMIDûAûSURGEû share in equity derivatives of the
products and lending against A spokesman for JP Morgan INûTRADINGûVOLUMESûFOLLOWINGûTHEû top 12 investment banks at the end
portfolios of shares. declined to comment. The bank novel coronavirus-induced market OFûûACCORDINGûTOûTHEûMOSTû
JP Morgan’s equity trading is scheduled to report earnings slump and subsequent rally. recent available rankings from
VOLUMESûWEREûTHREEûTIMESûHIGHERûINû on July 14. #ITIGROUPûANDû'OLDMANû3ACHSû ANALYTICSûlRMû#OALITIONû"UTû
the second quarter than the same 4HEûEQUITYûGAINSûCOMEûINûWHATû JOINEDû*0û-ORGANûINûCITINGû INDUSTRYûEXECUTIVESûSAYûTHEû53ûBANKû
PERIODûINûûONEûSOURCEûSAID ISûEXPECTEDûTOûBEûANOTHERûSTRONGû derivatives as an important HADûSOMETIMESûPUNCHEDûBELOWûITSû
%QUITYûmOWûTRADINGûnûAûTEAMû quarter for JP Morgan’s trading DRIVERûINûSIGNIlCANTûREVENUEû WEIGHTûINûEQUITYûmOWûTRADINGûnûANû
overseen by head of global volatility DIVISIONû$ANIELû0INTOûHEADûOFûTHEû gains in equities trading in the AREAûTHATûCANûBEûHUGELYûPROlTABLEû
2ACHIDû!LAOUIûINû.EWû9ORKûnûHASû CORPORATEûANDûINVESTMENTûBANKû lRSTûQUARTER WHENûMARKETSûAREûCHOPPY

4 International Financing Review July 4 2020

 @ For daily news stories
visit www.ifre.com

ûDEALSûUPûFROMûûINû

THEûlRSTûHALFûOFû
up after the summer as
companies look to improve Volcker revision
)TûWASûFOLLOWEDûBYûGOLDMAN THEIRûABILITYûTOûWITHSTANDûAû
SACHSûBANK OF AMERICAû#ITIGROUPû
and MORGAN STANLEY.
TOUGHûECONOMYûWITHûGREATERû
SIZEûANDûSCOPE
means CBOs are back
WELLS FARGOûANOTHERûBIGû “It is very clear that coming „ Structured Finance Change will allow CLOs to hold bonds
PLAYERûINû53ûDEBTûMARKETSûROSEû OUTûOFûTHISûCOMPANIESûWILLûNEEDû
to eighth from ninth in global to focus on being part of BY KRISTEN HAUNSS Volcker is part of the Dodd-
RANKINGSûANDûWASûSIXTHûFORûFEESû SOMETHINGûBIGGERûANDûSTRONGERû &RANKûREFORMSûAûSWEEPINGû
in the Americas. particularly in industries hit A revision to the so-called package of rules enacted in
Wells overtook DEUTSCHE BANK in HARDESTûBYûTHISûCRISISvûSAIDû 6OLCKERû2ULEûLASTûMONTHûWILLû RESPONSEûTOûTHEûûlNANCIALû
THEûGLOBALûRANKINGSûASûTHEû'ERMANû !LISONû(ARDING
*ONESû ALLOWû#,/SûTOûPURCHASEûBONDSû CRISISû#URRENTLYûITûPROHIBITSû
bank continues to struggle in the #ITIGROUPSûHEADûOFû-!ûFORû WHICHûCOULDûBOOSTûRETURNSû BANKSûFROMûOWNINGûhOWNERSHIPû
midst of a deep restructuring and EMEA. TOûTHEûFUNDSûMOSTûJUNIORû INTERESTSvûOFûCOVEREDûFUNDSû
WASûTHEûONLYûTOPûûlRMûWHEREû She said there could be more INVESTORSûHELPûBUTTRESSû WHICHûINCLUDEûMOSTû
revenues fell from a year earlier – all-share transactions due to ISSUANCEûANDûPAVEûTHEûWAYû SECURITISATIONSû/WNERSHIPû
DOWNûûCREDIT SUISSEûWASûTHEû lNANCINGûISSUESûMOREûPRIVATEû for the return of collateralised INTERESTûISûBROADLYûDElNEDûTOû
LEADINGûNON
53ûBANKûINûSIXTHûPLACEû equity deals as buyers have dry bond obligations. include not only the equity of a
FOLLOWEDûBYûBARCLAYS. POWDERûATûTHEIRûDISPOSALûANDû 2EGULATORSûINCLUDINGûTHEû53û SECURITISATIONûBUTûALSOûTHEûDEBTû
MOREûNON
COREûDISPOSALSûSUCHû &EDERALû2ESERVEûANDûTHEû/FlCEû of the funds because those
ECM AND M&A ASû"0Sû53BNûSALEûOFûAû OFûTHEû#OMPTROLLERûOFûTHEû holdings can include the right to
Bankers said equity capital petrochemicals unit to Ineos #URRENCYûWILLûREWORKûTHEû remove and replace a manager.
markets activity has picked up LASTûWEEKû%UROPEûCOULDûBEû hCOVEREDûFUNDûPROVISIONvûOFûTHEû ,OANûSECURITISATIONSûWEREû
INûTHEûLASTûSIXûWEEKSûLEDûBYû53û busier than the US due to the US Volcker Rule after years of EXCLUDEDûFROMûTHEûORIGINALû
DEALSû!CTIVITYûHASûBEENûSLOWERû presidential election in lobbying pressure from the DElNITIONûASûLONGûASû#,/SûONLYû
INû%UROPEûALTHOUGHûAûRISEûINû5+û November. lNANCEûINDUSTRYû!SûITûSTANDSû held loans.
%#-ûDEALSûFORûMID
CAPûANDû 4HEûSTRONGûlRST
HALFû the rule bars banks from
SMALLERûlRMSûSIGNALSûAûGREATERû INVESTMENTûBANKINGûFEESûWILLû INVESTINGûINû#,/SûTHATûCONTAINû WORKOUT WIN
appetite may be building. add to bumper income from BONDSûESSENTIALLYûMEANINGû#,/û )NûADDITIONûTOûALLOWINGûFUNDSûTOû
-!ûHASûBEENûTHEûWEAKûSPOTû trading revenues. US bank managers have little choice but PURCHASEûBONDSûTHEûCHANGEûMAYû
of investment banking activity chiefs have predicted second- to avoid buying bonds. ALSOûALLOWû#,/SûTOûACCEPTû
as buyers and sellers slammed QUARTERûTRADINGûREVENUESûWILLûBEû h)TûISûAûHOMERUNvû*û0AULû different types of assets in a
on the brakes once the UPûBYûBETWEENûûANDûû &ORRESTERûAûPARTNERûATûLAWûlRMû RESTRUCTURINGûORûWORKOUTû
coronavirus crisis hit.
Deal appetite is likely to
remain cautious but could pick
)TûISûPARTICULARLYûSIGNIlCANTûTHENû
that much of JP Morgan’s revenue
FROMûAûYEARûAGOûWITHûBONDûANDû
equities trading both up
strongly. „
fuel for large gains for bank
trading desks.
-AYERû"ROWNûSAIDûOFûTHEû
CHANGEûh)TûWASûAûSTRANGEûRESULTû
[of the original rule] that has
BEENûCLARIlEDûANDûCORRECTEDv
#,/SûHAVEûBEENûUNDERû
PRESSUREûASûTHEYûGRAPPLEûWITHû
SITUATIONûWITHOUTûCONCERNûITû
WOULDûBEûAû6OLCKERûVIOLATION
“The changes may prove to be
QUITEûHELPFULûTOûTHEû#,/ûMARKETû
in order to remove a regulatory
hurdle to managers being able
gains this year have come from 4HEû6IXû#"/%Sû6OLATILITYû DOWNGRADESûANDûDEFAULTSûINû to purchase non-loan assets in
mOWûTRADINGû4HEûTEAMû!LAOUIû )NDEXûOFTENûREFERREDûTOûASû7ALLû their loan holdings as an ORDERûTOûMAXIMISEûRECOVERIESûINû
OVERSEESûHADûMADEûALMOSTûTWICEû 3TREETSûFEARûGAUGEûDECLINEDû increasing number of US CONNECTIONûWITHûAûDEFAULTûORû
ASûMUCHûMONEYûINûEQUITYûmOWû from 54 points to 30 points over COMPANIESûDEALûWITHûTHEû WORKOUTûOFûAûLOANvûSAIDû
derivatives as their peers in the the course of the second economic fallout from the ,AWRENCEû"ERKOVICHûAûPARTNERû
second quarter up until the end of quarter. That is roughly double coronavirus pandemic. ATûLAWûlRMû!LLENûû/VERY
-AYûACCORDINGûTOûONEûSOURCE SûAVERAGEûOFûûPOINTSûBUTû 2OLLINGûBACKûTHEûRULEûWILLû Earlier this year Goldman
4HATûSTRONGûSHOWINGûCAMEû STILLûFARûBELOWûTHEûPEAKûCLOSEûOFû ALLOWû#,/SûTOûPURCHASEûBONDSû 3ACHSû#REDITû3UISSEûANDûTHEû
despite a rallying market that 83 points in mid-March. WHICHûCOULDûBOOSTûRETURNSûTOûTHEû Loan Syndications and Trading
LEDûTOûAûDROPûINûEQUITYûVOLATILITYû Additional reporting by Owen MOSTûJUNIORûINVESTORSûTHEûEQUITYû !SSOCIATIONûWEREûAMONGûTHOSEû
WHICHûTYPICALLYûPROVIDESûTHEû Wild „ HOLDERSûBECAUSEûJUNKûBONDSû that stressed to regulators the
often offer better yields. The IMPORTANCEûOFûTHEû53û#,/û
THE VIX, CBOE's VOLATILITY INDEX
average yield for Double B rated market to the broader economy
90
LOANSûINûTHEûlRSTûQUARTERûWASû and requested additional
80
ûWHILEûTHEûAVERAGEûYIELDû mEXIBILITYûUNDERû6OLCKER
70
FORûBONDSûWITHûTHATûSAMEûRATINGû h#,/SûAREûAûVITALûPARTûOFûTHEû
60 WASûûACCORDINGûTOû2ElNITIVû loan securitisation market as
50 ,0#ûDATA they have for many years been
40 !ûHEALTHYû#,/ûMARKETûCANû the single largest source of
30 SUPPORTûMOREûLOANûVOLUMEû capital that supports syndicated
20 WHICHûMAYûBOOSTûMERGERûANDû corporate loans to non-
10 ACQUISITIONûACTIVITYûANDûALLOWû investment grade US
0 COMPANIESûTOûCUTûBORROWINGû COMPANIESvû%LLIOTû'ANZûGENERALû
2/5/20

2/7/20
2/2/20

2/4/20
2/1/20

2/6/20
2/3/20

costs. COUNSELûATûTHEû,34!ûWROTEûINûAû

The change takes effect on letter from the trade group to
Source: Refinitiv October 1. regulators earlier this year. „

International Financing Review July 4 2020 5

Top news
Convertibles on track for record year
„ Structured Equity Continued volatility and growing investor base should sustain record volumes

BY OWEN WILD, STEPHEN LACEY three times the previous June transaction designed to provide THEûBIGGESTûDEALSûINûTHEû53BNû
ANDûTOOKûlRST
HALFûVOLUMEûTOû funding for at least 12 months. of EMEA issuance in the second
#ONVERTIBLEûBONDSûOUTPERFORMEDû 53BNûEASILYûONûTRACKûTOûTOPû 4HEû#ARNIVALû#"ûNOWûTRADESûATû quarter came from sectors likely
EQUITIESûONCEûAGAINûINû*UNEû THEû53BNûPEAKûOFû ûOFûPARûILLUSTRATINGûTHEû to be impacted by the pandemic
ensuring that the golden period for “With the measures taken by potential upside participation. for years – steelmaker
the equity-linked market should &EDERALû2ESERVEûANDû#ONGRESSûTOû Shares have more than doubled !RCELOR-ITTALû53BN ûAEROû
continue into the third quarter as PUTûAûmOORûUNDERûTHEûCREDITû TOû53ûASûINVESTORSûWARMEDû engine maker Safran (€800m)
increasing numbers of investors CONCERNSûCONVERTIBLEûBONDSû TOû#ARNIVALSûPROSPECTSûONûAû and travel bookings company
are attracted to the asset class. WEREûONEûOFûTHEûlRSTûASSETûCLASSESû resumption of operations – pre- Amadeus IT Holding (€750m).
Structured equity has been a
0ACIlCûFAREDûBETTERû
vital piece of the funding pie for
corporates in the US and Europe
through the second quarter.
TOûOPENûUPvûSAIDû$AVIDû(ULMEûAû CORONAVIRUSû#ARNIVALûSHARESû !SIA
portfolio manager at Advent FETCHEDûASûMUCHûASû53 during the coronavirus crisis and
#APITALû-ANAGEMENTûh"UTûTHEREû h#ARNIVALûBROKEûOPENûTHEû has not seen a pick-up in equity-
WEREûSTILLûCOMPANIESûTHATûNEEDEDû NEW
ISSUEûMARKETvûSAIDû(ULME LINKEDûISSUANCEû#ONVERTû
Global issuance in June totalled capital to see them through bankers in the region said
53BNûFROMûûDEALSû SHUTDOWNSûOFûTHEIRûBUSINESSESv MEANWHILE, IN EUROPE BALANCEûSHEETSûWEREûLESSûSTRESSEDû
making it the most active month #RUISEûOPERATORû#ARNIVALSû 4HEû%UROPEANûMARKETûISûSMALLERû than those of European and US
since September 2015. 53BNûTHREE
YEARû#"ûINûEARLYû but issuers have also found the PEERSûANDû!SIANûlRMSûCANûALSOû
Issuance has come from !PRILûASûPARTûOFûAû53BNû MARKETûWELCOMINGûOFûDIFlCULTû SEEûGROWTHûAROUNDûTHEûCORNERû
strongly performing sectors keen FUNDRAISEûWASûAûLANDMARKû OFTENûUNRATEDûNAMESû.OTABLYû making convertibles a less
to monetise market volatility attractive funding option.
WHILEûCOMPANIESûSTRUGGLINGûTOû NOT SO ESOTERIC NOW: CB ISSUANCE SETS NEW RECORD It all added up to global
survive the coronavirus Proceeds US$bn SECOND
QUARTERûISSUANCEûFORû#"Sû
pandemic and beyond – such as 80 EXCLUDINGû#HINESEû!ûSHARESûATûAû
travel and leisure names – have 70 NEWûRECORDûOFû53BNûnûBYûFARû
been embraced by investors 60
the largest since 2010.
LOOKINGûOUTûlVEûYEARSûORûMORE
50
Thanks to a burst of issuance MONETISING VOLATILITY
as the coronavirus crisis took 40 “It’s pretty easy for issuers to tap
HOLDû53ûISSUANCEûINûMID
-AYû 30 THEû#"ûMARKETû4HEYûCANûREDUCEû
WASûONûTRACKûTOûSETûAûNEWûANNUALû 20
coupon costs by issuing a
RECORDûFORûCONVERTSûALTHOUGHû CONVERTIBLEûWHICHûISûVERYû
10
FEWûREALLYûBELIEVEDûTHATûTHEû attractive especially for those
TRAJECTORYûCOULDûBEûMAINTAINEDû 0 companies suffering a lot and
1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q
And yet June’s US issuance of 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 being desperately in need of
53BNûFROMûûDEALSûISûNEARLYû Source: Refinitiv CASHvûSAIDû3TEPHANIEû:WICKû

Germany green debut draws nearer

„ Bonds Country joins growing ranks of eurozone sovereign green issuers

BY HELENE DURAND It had previously said that “on AûSPOKESWOMANûFORû'ERMANYSû BEûPLACEDûATûAûSPECIlCûTIMEvûTHEû
THEûPRIMARYûMARKETûAûNEWûGREENû lNANCEûAGENCYûTHEû SPOKESWOMANûSAID
Once a reluctant user of the FEDERALûSECURITYûWILLûBEûSOLDû &INANZAGENTUR
SYNDICATIONûMETHODûTHEûFEDERAL through the federal government’s h)NûTHEûTHIRDûQUARTERûTHEû CATCHING UP
REPUBLIC OF GERMANYûSAIDûITûWOULDû WELL ESTABLISHEDûTENDERûPROCESSûATû initial issue of a green German Germany has lagged some of its
use it for the third time so far in a date and at a volume initially GOVERNMENTûSECURITYûWASû EUROZONEûPEERSûINûPLACINGûGREENû
ûTHISûTIMEûTOûISSUEûAûDEBUTû designated for increasing the SUITABLEûFORûAûSYNDICATEûASûTHEû BONDSû4HEûLIKESûOFû&RANCEû
green bond. CONVENTIONALûTWINv FEDERALûGOVERNMENTûWOULDûLIKEû Ireland and Belgium have started
)NûAûSTATEMENTûLASTû-ONDAYûTHEû )TûWILLûBEûTHEûTHIRDûTIMEûTHISûYEARû TOûENTERûAûNEWûMARKETûSEGMENTv to establish themselves in the
SOVEREIGNûSAIDûITûWASûPLANNINGûTOû that Germany has strayed from its She added that the FORMATûINûRECENTûYEARSûWITHûALLû
ISSUEûAûhTWINvûGREENûBONDûINû previous use of the auction process involvement of a bank syndicate three using syndications for their
September through a syndicate. in its domestic market. could be particularly helpful in inaugural green transactions.
4HEûBONDûWILLûHAVEûANûIDENTICALû h4HISûYEARûTHEûIMMENSEû pricing longer maturities. Germany might get ahead of
maturity and coupon to Germany’s INCREASEûINûlNANCINGû 'ERMANYûSOLDûõBNûOFûAûNEWû 3PAINûHOWEVERû7HILEûTHEû
VANILLAûû!UGUSTûû requirements has prompted the 15-year in early May and a €6bn kingdom said in early June that
The adoption of the federal government to introduce tap of an August 2050 in June. bringing its inaugural green bond
syndication method for the NEWûMATURITYûSEGMENTSûANDûTOû h)NûADDITIONûBYûAPPROACHINGû WASûSTILLûAûPRIORITYûITSûEMERGENCEû
offering marks a change of use syndicates in addition to investors directly via a DEPENDSûONûWHETHERû3PAINûCANû
approach for the sovereign. AUCTIONSûTOûISSUEûITSûBONDSvûSAIDû SYNDICATEûAûLARGERûVOLUMEûCANû pass a budget this year or not.

6 International Financing Review July 4 2020

 @ For daily news stories
visit www.ifre.com

head of convertible bonds at

Fisch Asset Management.
h0RIORûTOû#OVID
ûINû%UROPEû
issuers had lots of funding
Dun & Bradstreet
h)TSûAûREALLYûFASTûWAYûOFû
RElNANCINGûMUCHûFASTERûTHANû
issuing a straight corporate bond.
alternatives in the capital
MARKETSvûSAIDû!RMINû
(EUBERGERûHEADûOFû%-%!û
continues IPO hot streak
0LUSûITûISûTHEûONLYûWAYûTOûMONETISEû equity-linked at UBS. “Some „ Equities Whirlwind turnaround as data firm goes public
the volatility. For those companies CANNOTûNOWûACCESSûDEBTûMARKETSû
that are suffering from the ANDûOTHERSûHAVEûEXHAUSTEDûTHEIRû BY ROBERT SHERWOOD ,OWERûLEVERAGEûINûTURNû
AFTERMATHûOFûTHEû#OVID
û bank debt. So current provides capacity for
PANDEMICûISSUINGûAûCONVERTIBLEûISû CONVERSATIONSûWITHûCORPORATESû ,ESSûTHANûTWOûYEARSûREMOVEDû ACQUISITIONSûAûKEYûGOALûOFûTHEû
AûGREATûWAYûTOûMONETISEûTHEIRû about convertibles are to the from a buyout led by veteran )0/û$"ûHASûCOMPLETEDûTHREEû
STOCKSûUPSIDEûPOTENTIALv
/NEûEXAMPLEûISû3AFRANûWHICHû
had a 100-day realised volatility of
ûATûTHEûTIMEûOFûITSûõMû#"ûINû
MID
POINTûABOUTûWHATûCANûBEûDONEh DEALMAKERû"ILLû&OLEYûDATAû acquisitions since being taken
4HEûSHARPûINCREASEûINûNEWû ANALYTICSûlRMûDUN & BRADSTREET private to bolster its credentials
issuance could be an issue if RETURNEDûTOûTHEû.93%ûLASTûWEEKû INûAREASûSUCHûASûARTIlCIALû
THEREûISûNOTûAûGROWINGû INûAûTEXTBOOKû53BNû)0/ intelligence and big data.
-AYûILLUSTRATINGûTHEûDISTRESSûOFû INVESTMENTûBASEûTOûSUPPORTûITû $"SûmOATûTICKEDûALLûTHEû 7HILEûPRIVATEûTHEû
YEARûOLDû
aerospace. At pricing the implied BUTûTHEûTEXTBOOKûBEHAVIOURûOFû BOXESû)TûWASûUPSIZEDûANDûPRICEDû COMPANYûWASûTRANSFORMEDûINTOû
volatility on the seven-year bonds convertibles this year is above range yet still maintained AûMODERNûDATAûANALYTICSûlRMû
WASûûAûTHIRDûHIGHERûTHANûITSû ATTRACTINGûNEWûFUNDSû53û enough momentum to deliver a UNDERûNEWûMANAGEMENTûANDûANû
NORMALISEDûVOLûOFûûINû&EBRUARY convertibles outperformed US HANDSOMEûPROlTûTOûBUYERS incentivised sales force focused
EQUITIESûONûBOTHûTHEûWAYûUPûANDû 3HARESûOPENEDûATû53ûUPû on upselling clients into multi-
TEXTBOOK BEHAVIOUR DOWNûINûTHEûlRSTûQUARTERû FROMû53ûPRICINGûANDûCLOSEDû year subscriptions.
The equity-linked market is often )Nû*UNEûGLOBALLYûEQUITIESûWEREû THEûlRST
DAYûATû53ûORû Delaying the IPO because of
THEûLASTûlNANCINGûOPTIONûLEFTû UPûNEARLYûûEARLYûONûBUTûENDEDû ûABOVEûOFFER #OVID
ûWASûARGUABLYûHELPFULûTOû
WHENûCOMPANIESûAREûINûDISTRESSû THEûMONTHûUPûLESSûTHANûû"Yû Joint books Goldman Sachsû $"ûSINCEûTHEûPLUNGEûOFûTHEû53û
and can be the turning point to COMPARISONûTHEû2ElNITIVûGLOBALû Bank of AmericaûJP Morgan and economy into recession and
open up other funding avenues. #"ûINDEXûPEAKEDûUPûûANDû Barclays placed 78.3m shares at a DEALSûSUCHûASû:OOM)NFOû
4HEûEXPECTATIONûISûTHATûISSUANCEû gains by the end of the month dollar above the top of the 4ECHNOLOGIESûWHICHûWENTû
from European companies is set WEREû 53nûMARKETINGûRANGEûANDû public in May) have only
to increase further as they h!TûTHEûMOMENTûWEûHAVEû up from 65.75m shares at heightened recognition of the
WITNESSûTHEûEXPERIENCEûOFûOTHERSû many clients looking to include launch. importance of data and analytics
Finnish steelmaker OUTOKUMPU Aû#"ûALLOCATIONûWITHINûTHEIRû $"SûPLANSûTOûGOûPUBLICûINû TOûITSûSIZEABLEûSTABLEûOFûCORPORATEû
RAISEDûõMûTHROUGHûlVE
YEARû asset allocation. So this is a nice May stalled due to the clients.
CONVERTSûATûAûûCOUPONûONû PREDICTORûOFûWHATûISûTOûCOMEvû coronavirus. The stunningly 3PEAKINGûTOûTHEûMEDIAû$"û
Thursday night – not bad for a SAIDû:WICKûh)ûTHINKûTHEûMAJORITYû quick recovery of equity markets #%/û!NTHONYû*ABBOURûWASûQUICKû
COMPANYûWHICHû-OODYSûRATESû OFûINVESTORSûAREûNOWûSTARTINGûTOû and associated reopening of the to point out that the company’s
ATûJUSTû"ûWITHûAûNEGATIVEû recognise the strength of the IPO market left the company and revenues have historically
OUTLOOKûANDûWHICHûWOULDû asset class and are considering ITSûUNDERWRITERSûSCRAMBLINGûTOû proven more resilient to
probably need a double-digit HOWûITûMIGHTûlTûINTOûTHEIRû price the deal in the second ECONOMICûDOWNTURNSûTHANûMOSTû
coupon to sell straight debt. OVERALLûASSETûALLOCATIONv „ quarter. OTHERûCOMPANIESûPERHAPSû
From its LBO in February because companies tend to seek
"UTûWHILEûTHEû&INANZAGENTURû BONDSûANDûMARKETûPARTICIPANTSû ûTOûCONlDENTIALLYûlLINGûFORû out more information about
HASûCHANGEDûTACKûONûHOWûITûWILLû demand preferences for various THEû)0/ûINû*ANUARYûANDûONTOû WHOûTHEYûAREûDOINGûBUSINESSû
DISTRIBUTEûTHEûDEBUTûGREENûBONDû GREENûBONDûMATURITIESvûTHEû 7EDNESDAYSû)0/û$"SûPATHû WITHûINCLUDINGûTHEIRû
ITûISûKEEPINGûTOûTHEûTWINûCONCEPTû &INANZAGENTURûHASûPREVIOUSLYû back to public markets has been CREDITWORTHINESS ûDURINGûTOUGHû
it mooted last year. said. a rapid one. times.
5NDERûTHEûCONCEPTû Germany said on Monday it 4HEû)0/ûVALUESû$"ûATûNEARLYû $"ûALSOûOFFEREDûECHOESûOFû
'ERMANYSûNEWûGREENûSECURITIESû WASûPLANNINGûTOûRAISEûBETWEENû 53BNûALMOSTûDOUBLEûTHEû SUCCESSFULûlNTECHû)0/SûOFûYEARSû
WILLûALWAYSûBEûISSUEDûALONGSIDEû €8bn and €12bn in 2020 via 53BNûATûITSûBUYOUTûLASTû PASTûSUCHûASû4RANS5NIONû)(3û
ANûEXISTINGûCONVENTIONALûFEDERALû GREENûBONDSûANDûWASûPLANNINGûTOû February. -ARKITû"LACKû+NIGHTûANDû
SECURITYûWITHûTHEûSAMEû SELLûAûlVE
YEARûAFTERûTHEû
YEAR $"ûISûSPENDINGû53BNûOFû #ERIDIANû(#-û!LLûHAVEûTHRIVEDû
CHARACTERISTICSûnûCREATINGûTWINû !SûWELLûASûTHEûGREENû the money raised to redeem as public companies.
BONDSûIDENTICALûINûMATURITYûANDû SYNDICATIONû'ERMANYûHASûNOTû PREFERREDûSTOCKûHELDûBYûlNANCIALû "LACKû+NIGHTûWASûPARTûOFûTHEû
coupon. ruled out using the method SPONSORSûTHOUGHûSOMEûOFûTHOSEû CONSORTIUMûTHATûBOUGHTû$"û
4HEIRûVOLUMESûWILLûDIFFERû again for conventional issues. same sponsors are reinvesting WITHû&OLEYSû#ANNAEû(OLDINGSû
HOWEVERûWITHûCONVENTIONALû Issuance plans for the fourth 53MûVIAûAûCONCURRENTûPRIVATEû #HINHû#HUSû##û#APITALûANDû
issues being placed at QUARTERûWILLûBEûRELEASEDûATûTHEû placement. It is also repaying Thomas H Lee. Black Knight is
SIGNIlCANTLYûLARGERûVOLUMESûTHANû ENDûOFû3EPTEMBERûANDûWILLû 53MûOFûBUYOUTûDEBT ANOTHERû#ANNAEûALUM
THEIRûGREENûTWINSû4HEYûWILLûALSOû include details regarding 4HEûENLARGEDûDEALûSIZEûSAWû Foley has had quite a month.
differ in their ISIN codes. possible further syndications. leverage drop to 4.4-times Ebitda )NûADDITIONûTOû$"Sû)0/û&OLEYû
h4HEûCONCEPTûOFûTWINûBONDSû 5NI#REDITûANALYSTSûNOWûEXPECTû ORû
TIMESûWITHûTHEûGREENSHOE MINTEDûTWOûNEWû30!#SûINû&OLEYû
PROVIDESûINVESTORSûWITHûAûDEEPû gross issuance of Bubills to be “Leverage is not as high as a Trasimene and Trebia
INSIGHTûINTOûMARKETûSTRUCTURESûASû õBNûNETûSUPPLYûõBN ûANDû LOTûOFûPEOPLEûTHOUGHTûITûWOULDû !CQUISITIONûANDûHELPEDûRAISEû
regards both the price difference gross issuance of Bunds to be BEvûAûBANKERûWITHûKNOWLEDGEûOFû PRIMARYûCAPITALûFORûBOTHû#ANNAEû
BETWEENûCONVENTIONALûANDûGREENû õBNûNETûSUPPLYûõBN  „ the situation told IFR. and Black Knight. „

International Financing Review July 4 2020 7

Top news
Ukraine pulls bond deal after
central banker quits
„ Emerging Markets Sovereign scraps new issue hours after successful placement

BY SUDIP ROY, ROBERT HOGG “In light of the recent h)FûTHEYûHADûGONEûONûWITHûTHISû h)ûDONTûTHINKûSENTIMENTûWILLû
HEADLINESû5KRAINEûISûCANCELLINGû deal and those that had bought change dramatically. Investors are
UKRAINEûWASûFORCEDûTOûPULLûAûBONDû THEûNEWû53BNû-ARCHû ITûWOULDûHAVEûSEENûAûnûLOSSû OVERWEIGHTûTHEûCOUNTRYûANDûWILLû
THATûWASûPRICEDûONû7EDNESDAYû ûOFFERINGûASûWELLûASûTHEû INûAûDAYûTHENû)ûDONTûTHINKûMANYû LIKELYûREMAINûSOû4HEYûWILLûLIKELYû
JUSTûONEûDAYûLATERûAFTERûTHEûSHOCKû ASSOCIATEDûSWITCHûTRANSACTIONSvû OFûTHESEûWOULDûBEûWANTINGûTOû come back to the market once a
resignation of central bank READûANûOFlCIALûSTATEMENTû lend money to Ukraine again in NEWûCENTRALûBANKûCHIEFûISû
governor Yakiv Smoliy meant published on Thursday. The THEûFUTUREv INSTALLEDû(OWEVERûTHEû."5ûWASû
BUYERSûWEREûSUDDENLYûFACINGû lNANCEûMINISTRYûDIDûNOTû !NOTHERûINVESTORûSAIDûNEWSûOFû seen as a very strong institution in
substantial paper losses. immediately respond to a THEûDEALSûPOSTPONEMENTûWASû Ukraine and a good replacement
The sovereign had priced a request for further comment. received positively by the market. WILLûBEûNEEDEDûTOûRESTOREûMARKETû
53BNû-ARCHûûNOTEûATûAû 7HILEûSOMEûINVESTORSûWEREû h7EûOPENEDûDOWNûABOUTûTHREEû CONlDENCEvûHEûSAID
YIELDûOFûûSIGNALLINGû happy for the deal to go through TOûFOURûPOINTSûAFTERûTHEûNEWSû;OFû !NOTHERûINVESTORûHOWEVERû
INVESTORSûCONlDENCEûINûTHEûNEWû to settlement – and a minority the resignation] last night but said the saga summed up
53BNû)-&ûAGREEMENTû WEREûEVENûWILLINGûTOûTAKEûAû have since rebounded to being Ukraine’s inability to break a
RENEWEDûHOPEûINûTHEûECONOMICû bigger allocation if need be – DOWNûABOUTûONEûPOINT,” he said. cycle of hope and despair.
outlook and belief in the MOSTûWANTEDûITûTOûBEûPULLED h)ûGUESSûALLûEYESûWILLûBEûONûTHEû h&UNDAMENTALLYûTHEûNEWSûISû
governing class’ ability to keep 7ITHûTHEûBONDSûTRADINGûDOWNû NEXTûAPPOINTMENTûASûTHEû)-&ûHASû NEGATIVEûANDûWOULDûPROVEûTHEû
moving in a reformist direction. more than three points in the already come out saying [the typical Ukrainian cycle: do the
But Smoliy’s resignation GREYûMARKETûFOLLOWINGûNEWSûOFû Ukrainians] need to keep the REFORMSûTOûGETûTHEû)-&ûMONEYû
around 30 minutes after the bond THEûRESIGNATIONû5KRAINEûHADû CENTRALûBANKûINDEPENDENTûBUTû)û UNWINDûASûSOONûASûYOUVEûGOTûTHEû
HADûPRICEDûCITINGûhSYSTEMATICû little choice. don’t believe that the market MONEYvûSAIDû0AVELû-AMAIû
POLITICALûPRESSUREvûONûTHEûCENTRALû “The Ukrainian Ministry of WILLûTURNûNEGATIVEûONû5KRAINEû partner at Promeritum
bank’s activities and attempts to &INANCEûDIDûTHEûRIGHTûTHINGûEVENû and start selling en masse.” Investment Management.
CURBûITSûINDEPENDENCEûMEANTûTHEû though it leaves a hole in their -AXû7OLMANûSENIORûINVESTMENTû
WRITINGûWASûONûTHEûWALLûFORûTHEû POCKETvûWROTEû4IMû!SHûSENIORû manager at Aberdeen Standard BIG RISK
DEALûWHICHûINCLUDEDûAûSWITCHû EM sovereign debt strategist at )NVESTMENTSûWHOûPARTICIPATEDûINû The big risk for Ukraine (B/B;
tender. asset manager BlueBay. THEûBONDûDEALûAGREED 30&ITCH ûISûIFû3MOLIYSûDECISIONû

Pakistan plans bond market return

„ Emerging Markets Delayed deal could come as soon as August, despite debt service freeze

BY JIHYE HWANG, DANIEL STANTON LEVELSûHAVEûCOMEûDOWNûFROMûTHEû 0ARISû#LUBûANDû'ûINTRODUCEDûTHEû Pakistan is also one year into a
March highs prompted by the #OVIDûû$EBTû3ERVICEû3USPENSIONû 53BNûTHREE
YEARûPROGRAMMEû
The ISLAMIC REPUBLIC OF PAKISTAN is CORONAVIRUSûOUTBREAKûALTHOUGHû )NITIATIVEû$33) ûINû!PRILûALLOWINGû WITHûTHEû)-&ûANDûREQUESTEDû
PLANNINGûAûNEWû53ûDOLLARûBONDû NOûlNALûDECISIONûHASûBEENûMADE poorer nations to defer debt ADDITIONALûEMERGENCYûlNANCINGû
OFFERINGûEVENûTHOUGHûITûISû 0AKISTANSûûûBONDSû servicing for the remainder of 2020 from the Fund in March to help
seeking additional assistance plunged more than 26 points in on condition that the freed-up DEALûWITHûTHEûCORONAVIRUSûOUTBREAK
from the International Monetary -ARCHûTOûASûLOWûASûûBUTû resources are used to support 0AKISTANSûOBLIGATIONSûTOû#HINAû
Fund and recently suspended partially recovered in May and healthcare and social spending. have been a sticking point for
some debt payments to a group *UNEûANDûAREûNOWûHOVERINGû Details of Pakistan’s DSSI SOMEû)-&ûMEMBERSûNOTABLYûTHEû
of developed countries. AROUNDûûFORûAûYIELDûOFûû arrangement have not been 53ûWHICHûHASûOPPOSEDûUSINGû
The B3/B–/B– rated sovereign ACCORDINGûTOû2ElNITIVûDATAû4HEû RELEASEDûBUTûTHEûSCHEMEûCOULDû multilateral funds to repay loans
is looking at a Reg S bond CURRENTûLEVELSûHOWEVERûAREûSTILLû APPLYûTOû53BNûOFûINTERESTûANDû TOû"EIJINGû4HEû)-&ûSAIDûINû!PRILû
OFFERINGûWITHûAûTARGETûISSUEûSIZEû ABOUTûûPOINTSûLOWERûTHANûATûTHEû PRINCIPALûPAYMENTSûACCORDINGûTOû THATû0AKISTANûHADûPROVIDEDûITûWITHû
OFû53BNûTHATûCOULDûCOMEûASû STARTûOFûTHEûYEARûWHENûTHEûSAMEû World Bank estimates. information on loans from
SOONûASû!UGUSTûAûDEBTûPOLICYû BONDSûWEREûYIELDINGûLESSûTHANû Moody’s placed Pakistan’s COUNTRIESûINCLUDINGû#HINAû2ATHERû
OFlCIALûTOLDû)&2 A sovereign offering from local and foreign currency long- THANûDEMANDINGûFULLûREPAYMENTû
0AKISTANûISûEXPECTEDûTOûVISITû 0AKISTANûWOULDûBEûAûSTRONGûVOTEûOFû term issuer B3 ratings under #HINAûHASûAGREEDûTOûLENDûMORE
the international bond market CONlDENCEûINûTHEûFRONTIERûMARKETû REVIEWûFORûDOWNGRADEûINû-AYû “The authorities have received
WITHûAûCONVENTIONALûOFFERINGûANDû BUTûWOULDûALSOûHIGHLIGHTû citing a potential default on commitments from key bilateral
POSSIBLYûAûSUKUKûPORTIONûSUBJECTû
to market conditions.
4HEûOFlCIALûSAIDûTHEû
government is looking for the
RIGHTûWINDOWûNOWûTHATûYIELDû
inconsistencies in the treatment of
public and private-sector creditors.
Pakistan is one of the 32
emerging market countries that
have applied for relief since the
private-sector debt and
mentioning the G20’s desire for
private sector creditors to
participate in the DSSI on
similar terms.
PARTNERSûINCLUDINGû#HINAûTOû
MAINTAINûTHEIRûEXPOSUREû
throughout the programme
PERIODûANDûTOûENSUREûTHATûTHEûNEWû
lNANCINGûWILLûBEûCONSISTENTûWITHû

8 International Financing Review July 4 2020

 @ For daily news stories
visit www.ifre.com

LEADSûTOûANYûPROBLEMSûWITHûTHEû
IMF agreement. The multilateral
3EPTEMBERûSûWHICHûWEREû
QUOTEDûINûTHEûMID
ûAREAûATûTHEû Indonesia Samurai
urged Ukraine on Thursday to
maintain the independence of
the central bank.
,ONDONûOPENûONû4UESDAYûAHEADû
of the deal’s announcement.
The curve then rallied
hits the mark
h5NDERû;3MOLIYS=ûLEADERSHIPû SIGNIlCANTLYûWITHûTHEûSû „ Emerging Markets Benchmark priced at tight end of ranges
Ukraine has made important CLOSINGûTHEûDAYûATû
STRIDESûINûACHIEVINGûPRICEûSTABILITYû They then continued to rally BY TAKAHIRO OKAMOTO The banker made a
amply demonstrating that an THROUGHOUTûTHEûEXECUTIONû comparison to a domestic yen
independent central bank is a key PROCESSûTOûFALLûTOûASûLOWûASûû The REPUBLIC OF INDONESIA DEALûTOûILLUSTRATEûHOWûATTRACTIVEû
element of modern ACCORDINGûTOû4RADEWEBûBUTûTHENû ACHIEVEDûAûBENCHMARKûSIZEûOFû Indonesian Samurai bonds are
MACROECONOMICûPOLICYMAKINGvûANû SHOTûBACKûUPûTOûûFOLLOWINGû cBNû53M ûONû4HURSDAYû to Japanese investors. One day
IMF spokesman said in a statement. Smoliy’s resignation. The yield on its return to the Samurai AFTERûTHEû3AMURAIûBONDûOFFERINGû
h4HATûISûWHYûTHEûINDEPENDENCEû THENûWENTûBACKûDOWNûTOûû BONDûMARKETûRAISINGûSORELYû 4OYOTAû)NDUSTRIESûRATEDû!!
of the NBU is at the centre of AFTERûTHEûDEALSûCANCELLATIONûWASû NEEDEDûFUNDSûASûITûBATTLESû#OVID
!!nû-OODYS302) ûPRICEDûAû
Ukraine’s Fund-supported
YEARûBONDûISSUEûWITHûAû
PROGRAMMEûANDûWHYûITûMUSTûBEû
MAINTAINEDûUNDERûHISûSUCCESSORv
President Volodymyr
CONlRMED ûANDûAûLARGEûBUDGETûDElCIT THREE
If market prices stabilise and While some Japanese ûCOUPONûATûAûPRICEûOFû
INVESTORSûAREûCONlDENTûTHEû)-&û investors are avoiding emerging ûTOûYIELDû
AGREEMENTûWILLûNOTûBEû market bonds because of the Pension funds participated in
:ELENSKIYSûOFlCEûINûAûSTATEMENTû UNDERMINEDûTHEûSOVEREIGNû uncertain economic fallout of )NDONESIASûTHREE
YEARûTRANCHEû
on Wednesday gave reassurances COULDûTRYûTOûRETURNûQUICKLYû THEûCORONAVIRUSûDECENTûDEMANDû WHILEûLIFEûINSURERSûBOUGHTû
that safeguarding the central given the strong response it got. FROMûPENSIONûFUNDSûLIFEû longer-dated tranches. Foreign
bank’s independence remained The order book peaked at more INSURERSûANDûFOREIGNûBUYERSû INVESTORSûWEREûPRESENTûACROSSûALLû
ITSûhUNCONDITIONALûPRIORITYv THANû53BN HELPEDûBOOKSûREACHûTHEû
lGUREû tranches.
But the political landscape is SUMûANDûALLûlVEûTRANCHESûWEREû
GREAT OUTCOME TRICKYû:ELENSKIYûSAIDû!SHû priced at the tight end of ranges. FUNDING COSTS
The bond deal appeared to be a needs “to prove [his] A banker on the deal said the The outcome vindicated
great outcome for the sovereign. commitment to an independent Baa2/BBB/BBB rated sovereign Indonesia’s decision to delay the
5KRAINEûRAISEDû53BNûOFûNEWû central bank by nominating a WASûFOCUSEDûMOREûONûACHIEVINGû TRANSACTIONûTWICEûHAVINGû
CASHûWHILEûALSOûUNDERTAKINGûITSû really credible person to replace favourable funding costs than previously looked to launch in
lRSTûEVERûSWITCHûASûITûTARGETEDû 3MOLIYvûALTHOUGHûHEûADDSûTHATû ONûSIZEûBUTûINûTHEûENDûACHIEVEDû mid-May and late June.
BUYINGûBACKûUPûTOû53MûOFû it may be hard to get that person both. “The issuer could have offered
its 2021 and 2022 notes. approved by parliament. A ¥50.7bn three-year tranche MUCHûWIDERûSPREADSûIFûITûWENTû
The best pricing reference Goldman Sachs and JP Morgan WASûPRICEDûWITHûAûûCOUPONûATû AHEADûINû-AYvûTHEûlRSTûBANKERû
POINTûWASûTHEûSOVEREIGNSû WEREûTHEûLEADSûONûTHEûBONDûDEAL „ YENûOFFER
SIDEûSWAPSûPLUSûBPûAû SAIDûNOTINGûTHATûCREDITûMARKETû
cBNûlVE
YEARûWITHûAûû sentiment improved markedly
DEBTûSUSTAINABILITYûOBJECTIVESvû UNLIKELYûTHATûTHEûBONDSûWILLûBEû COUPONûATûSWAPSûPLUSûBPûAû in the second half of May.
THEû)-&ûSAIDûINû!PRILûh#HINAûWILLû labelled as social bonds. cBNûSEVEN
YEARûWITHûAûû &URTHERMOREûTHEûSPREADSûONû
CONTRIBUTEû53BNûINûlNANCINGû Pakistan mandated banks in COUPONûATûSWAPSûPLUSûBPûAû THEû3AMURAIûBONDSûWEREû
INûTHEûNEXTûûMONTHSv November for an international cBNû
YEARûWITHûAûû COMPETITIVEûCOMPAREDûWITHûTHEû
BONDûOFFERINGûWITHûAûTARGETûSIZEû COUPONûATûSWAPSûPLUSûBPûANDû issuer’s US dollar curve. According
DELAYED DEAL OFû53BNûBUTûTHEûDEALûHASûNOTû AûcBNû
YEARûWITHûAûû TOûTHEûlRSTûBANKERSûCALCULATIONû
-OODYSûEXPECTSûTHEûCORONAVIRUSû GONEûTHROUGHûUNTILûNOWû COUPONûATûSWAPSûPLUSûBP THEûTHREE
YEARûTRANCHEûWASûALMOSTû
OUTBREAKûTOûCAUSEûAûSIGNIlCANTû according to the debt policy Initial guidance on Tuesday mATûTOûTHEû53ûDOLLARûCURVEûANDû
shock to Pakistan’s domestic OFlCIALûh4HEûGOVERNMENTû WASûBPnBPûBPn BOTHûTHEûlVEûANDûSEVEN
YEARû
ECONOMYûANDûHASûFORECASTûAûû DECIDEDûTOûWAITûFORûTHEûNEXTû BPûBPnBPû TRANCHESûWEREûLESSûTHANûBPû
CONTRACTIONûINû'$0ûFORûTHEûlSCALû lNANCIALûYEARûTHATûSTARTSûINû*ULYvû BPnBPûANDûn above the US dollar curve.
YEARûTOû*UNEûûDOWNûFROMû HEûSAIDû!û53BNûSUKUKûISSUEû 4HEû
PLUSûCOUPONSûEVENûONû Indonesia’s efforts to
ûGROWTHûINûlSCALûû4HEû matured in December. THEûSHORTESTûTRANCHEûATTRACTEDû minimise funding costs can also
COUNTRYûISûEXPECTEDûTOûGROWûBYû Five banks are rumoured to Japanese investors as yields in be seen in the fees it paid to the
nûINûlSCALûûWHICHûISû have been mandated as the domestic market have been bookrunners. According to the
BELOWûITSûPOTENTIALûACCORDINGûTOû bookrunners for the delayed PUSHEDûLOWERûBYûTHEû"ANKûOFû lLINGûITûPAIDûJUSTûBPûLOWERû
-OODYSû4HEûlSCALûDElCITûISû DEALûINCLUDINGû#ITIGROUPû *APANSûEXPANDEDûCORPORATEû than the 10bp it paid for last
EXPECTEDûTOûHAVEûRISENûTOûCLOSEûTOû $EUTSCHEû"ANKû*0û-ORGANûANDû bond purchases. YEARSûTRADEûANDûAûLOTûLOWERûTHANû
ûOFû'$0ûINûlSCALûûFROMû 3TANDARDû#HARTERED. h4HOSEûWHOûBUYûANDûHOLDû the 25bp–35bp typically charged
ûTHEûPREVIOUSûYEAR 4HEûTARGETûSIZEûFORûTHEû until maturity have no choice for a Samurai transaction.
Nomura’s trading desk said in potential issue has been halved but to go out the curve or buy DaiwaûMUMSSûNomura and
ITSûSECOND
HALFû!SIAû#REDITûOUTLOOKû INûLIGHTûOFûMARKETûCONDITIONSû BONDSûFROMûFOREIGNûISSUERSvûSAIDû SMBC NikkoûWEREûTHEû
REPORTûTHATûITûISûUNDERWEIGHTû THEûOFlCIALûSAID a second banker on the deal. bookrunners for the senior
0AKISTANûCITINGûTHEûSOVEREIGNSû Pakistan previously visited “Indonesia is an easy choice for UNSECUREDûBONDûOFFERINGûWHICHû
WORSENINGûCREDITûMETRICS the international bond market Japanese investors because it WASûRUNûUSINGûTHEûPOTûSYSTEM
4HEûNEWûPROPOSEDûBONDSû INûûWHENûITûRAISEDû53BNû regularly visits the Samurai Indonesia last tapped the
could help fund the FROMûAûTWO
TRANCHEûOFFERINGûTHATû bond market once a year and 3AMURAIûBONDûMARKETûWITHûAû
government’s virus-relief INCLUDEDûAû53BNûSUKUKû THISûTIMEûPAIDûANûOVER
û cBNûSIX
TRANCHEû
EFFORTSûBUTûTHEûOFlCIALûSAIDûITûISû tranche. „ COUPONûEVENûONûTHEûTHREE
YEARv transaction in May last year. „

International Financing Review July 4 2020 9

Top news
PTT shows off green credentials
„ Emerging Markets Second bond offering in a month comes with novel conservation tranche

BY KIT YIN BOEY #LIMATEû"ONDSû)NITIATIVEûUNDERû PTT set up a Reforestation and for forestry restoration and
the land conservation and Ecosystem Institute as a CONSERVATIONûPROJECTSûAROUNDû
3TATE OWNEDû4HAIûOILûANDûGASû restoration category of its RESULTûOFûAûPROJECTûTOûRESTOREû THEûCOUNTRYûSAIDû-AKû5NDERû#")û
company PTTûWILLûLAUNCHûAû forestry criteria. one million rai – equivalent to RULESû044ûWILLûHAVEûTOûMANAGEû
pioneering green bond issue h044ûISûLEADINGûTHEûWORLDvû ûSQUAREûKILOMETRESûnûOFû ANDûTRACKûTHEûUSEûOFûPROCEEDSû
WHENûITûRETURNSûTOûTHEûMARKETû #ARMANû-AKû#")SûCERTIlCATIONû DEGRADEDûLANDûINûûAHEADûOFû submitting annual reports
LATERûTHISûMONTHûDRAWINGû MANAGERûTOLDû)&2 the 50th anniversary of the throughout the life of the bonds.
attention to its forest 4HEû#")ûRELEASEDûITSûFORESTRYû former king’s accession to the As is typical for public bond
conservation efforts and criteria in November 2018 and throne. SALESûINû4HAILANDûPRICINGûISû
responding to resurgent HASûONLYûCERTIlEDûONEûOTHERû Other forest conservation ALREADYûSETûAHEADûOFûTHEûOFFERINGû
DEMANDûFORûlXED INCOMEû issue in that category so far PROGRAMMESûFOLLOWEDûINCLUDINGû WHICHûISûSCHEDULEDûFORû*ULYûn
investments. nûAûDEALûFORû-EXICOSû the involvement and education 23. Pricing for the three-year
4HEûISSUEûISûEXPECTEDûTOû Fideicomisos Instituidos en of local communities and young TRANCHEûWITHûAû"TBNûTARGETûISû
SOAKûUPûEXCESSûDEMANDûFROMû Relacion con la Agricultura last people. lXEDûATûPARûTOûYIELDûû4HEû
044SûSUCCESSFULûJUMBOû November. PTT-managed reforested areas SEVEN YEARûTRANCHEûWHICHû
"TBNû53M ûSALEûINû !SûWELLûASûSHOWCASINGû044Sû WEREûCAPABLEûOFûABSORBINGûASû TARGETSû"TBNûWILLûYIELDû
late June. sustainability and conservation much as 2.18 million tonnes of
The planned Bt15bn public POLICIESûTHEûGREENûBONDûOFFERINGû CARBONûDIOXIDEûEQUIVALENTûPERû DEMAND RETURNS
OFFERINGûWILLûCOMPRISEûAûTHREE also aims to diversify its investor YEARûDURINGûnû "ANKERSûEXPECTûSTRONGûINTERESTû
year green tranche and a base. according to a study by Kasetsart in the offering given that
conventional seven-year PTT’s reforestation efforts University’s forestry research INSTITUTIONALûANDûHIGH NET WORTHû
tranche. AREûAûLITTLE KNOWNûPARTûOFû centre. INVESTORSûWEREûUNDER ALLOCATEDû
4HEûGREENûTRANCHEûISûTHEûlRSTû Thailand’s dominant oil Proceeds from the three-year INûTHEû*UNEûBONDûISSUEûWHICHû
BONDûTOûBEûCERTIlEDûBYûTHEû and gas company’s activities. TRANCHEûWILLûBEûUSEDûEXCLUSIVELYû WASûFOURûTIMESûCOVERED

UN report calls for firm biodiversity

targets for finance industry
„ People & Markets Finance industry needs to consider impact as well as risk

BY TESSA WALSH WORLDSû'$0ûnûISûDEPENDENTûONû resources. strategy at Lombard Odier.

NATUREûACCORDINGûTOûAûRECENTû h4HEûlNANCEûSECTORûNEEDSûTOû “There are some leaders in this
Strict targets are urgently report by the World Economic strengthen risk management SPACEûTHEREûAREûLAGGARDSûANDû)û
needed to reduce biodiversity &ORUMûANDû0W#ûANDû and develop opportunities to THINKûTHATûISûNOTûWHEREûITûSHOULDû
LOSSûINûNINEûSECTORSûWHEREûTHEû biodiversity loss is increasing ALIGNûPORTFOLIOSûWITHûGLOBALû be in our perspective. A lot of
lNANCIALûSECTORûISûEXPOSEDû operating costs and risks for BIODIVERSITYûGOALSûTOûFULlLûITSû IMPROVEMENTûISûWARRANTED
THROUGHûLOANSûINVESTMENTSûORû lNANCIALûINSTITUTIONSûACCORDINGû critical role in contributing to “Banks have to take into
UNDERWRITINGûACTIVITIESû TOûTHEû/%#$ halting and reversing the account material considerations
according to a report by The h4HEûEMERGENCEûOFû#OVID û current global crisis facing to their business and to the
United Nations Environment HASûUNDERSCOREDûTHEûFACTûTHATû NATUREûANDûSOCIETYvûTHEûREPORTû business that they provide and
Programme and the Natural WHENûWEûDESTROYûBIODIVERSITYû said. SHOWûTOûCLIENTSû)ûTHINKûWHATû
#APITALû&INANCEû!LLIANCE WEûPUTûOURûLIVESûLIVELIHOODSûANDû WEVEûSEENûOVERûTHEûLASTûFEWû
"ANKSûINVESTORSûANDûINSURERSû ECONOMIESûATûRISKvûSAIDû%RICû CALL FOR ACTION YEARSûISûANûINCREASINGûREALISATIONû
have made progress on setting 5SHERûHEADûOFû5.ûENVIRONMENTû Investors calling for action THATûNATUREûBIODIVERSITYû
climate and sustainability PROGRAMMEûlNANCEûINITIATIVE include Lombard Odier ECOSYSTEMûSERVICESûNATURALû
TARGETSûBUTûFEWûHAVEûBEGUNûTOû 4HEûREPORTûLOOKSûATûHOWû )NVESTMENTû-ANAGERSûTHEûASSETû capital and climate change are
ADDRESSûBIODIVERSITYûLOSSû lNANCIALûINSTITUTIONSûCANû management business of the MATERIALûISSUESûTOûlNANCIALû
ACCORDINGûTOûTHEûREPORTû mitigate risk by helping to stop 3WISSûPRIVATEûBANKûANDûONEûOFû MARKETSûTOûSECURITIESûANDûCOULDû
although the issue is gaining BIODIVERSITYûLOSSûANDûRESTOREû the top 25 green bond investors EVENûBEûTOûlNANCIALûSTABILITYv
impetus as the coronavirus crisis BIODIVERSITYûBYûlNANCINGûLOWERû WITHûMOREûTHANû53BNûINû
HIGHLIGHTSûTHEûLINKûBETWEENû impact sectors and holdings. RISKY BUSINESS
human health and biodiversity OPPORTUNITIESûINCLUDINGû “I think it’s still very The report outlines nine sectors
loss. ECOSYSTEMûRESTORATIONû PIECEMEALvûSAIDû#HRISû WITHûLARGEûlNANCIALûmOWSûTHATû
!ROUNDû53TRNûOFûECONOMICû BIODIVERSITYûCONSERVATIONûANDû +AMINKERûHEADûOFûSUSTAINABLEû are either dependent on
value – more than half of the the sustainable use of natural investment research and biodiversity or are high impact

10 International Financing Review July 4 2020

 For daily news stories
@ visit www.ifre.com

h$EMANDûWASûVERYûVERYû
STRONGvûSAIDûAûBANKERûONûTHEû
AFTERû044SûlVE YEARûABSENCEû
from the local bond market. Oman takes a second
*UNEûDEALûADDINGûTHATûEVERYû Bankers caution that investor
MAJORûINSTITUTIONALûINVESTORû
including those from mutual
DEMANDûWILLûNOTûRECOVERûFORûALLû
issuers.
bite at loan deal
FUNDSûANDûSAVINGSûCOOPERATIVESû “It is still very tough selling „ Loans Sultanate lines up US$2bn bridge
had returned to the market for ANYûBONDSûRATEDû!nûANDûBELOWvû
the deal. SAIDûONEû$#-ûBANKER BY SANDRINE BRADLEY initial panic caused by the
Bond investors got cold feet in The June bond sale comprised pandemic eases and oil prices
4HAILANDûOVERûTHEûPASTûFEWû AûTWO YEARûTRANCHEûPRICEDûATûPARû OMAN is back in the market for a RISEûHELPEDûBYû/0%#Sû
months after the closure of four TOûYIELDûûAûlVE YEARûATû 53BNûBRIDGEûLOANûFROMû AGREEMENTûLASTûMONTHûTOûEXTENDû
funds managed by TMBAM ûAû YEARûATûûAû international and regional oil production cuts until the end
%ASTSPRINGûINû-ARCHûFOLLOWEDû YEARûATûûANDûAû YEARûATû LENDERSûWHICHûBANKERSûEXPECTû of July.
by the Bt71bn default of Thai û0RICEûGUIDANCEûFORûTHEû the sultanate to complete “The market is getting better.
!IRWAYSûINû-AY respective tranches had been successfully despite having The sentiment is more positive
The TMBAM Eastspring nûnû RECENTLYûBEINGûDOWNGRADEDû and lenders’ cost of funds have
episode prompted mutual funds nûnûANDû FURTHERûINTOûJUNKûTERRITORY COMEûDOWNvûAûSECONDûBANKERû
to pull back from bond n )Nû-ARCHû/MANûWASûFORCEDûTOû said.
PURCHASESûTOûPRESERVEûCASHû The upcoming public offering PUTûAû53BNûSOVEREIGNûLOANûONû
WHILEû4HAIû!IRWAYSûENTRYûINTOû of three and seven-year tranches HOLDûAFTERûITûWASûHITûBYûFALLINGûOILû “The market is getting
rehabilitation hit savings MEANSûTHATû044ûWILLûHAVEûRAISEDû PRICESûTHEûIMPACTûOFû#OVID û better. The sentiment
COOPERATIVESûWHICHûHELDûABOUTû debt across the yield curve this ANDûAûDOWNGRADEûBYû&ITCHûTOû""û is more positive and
Bt35bn of the national carrier’s year. FROMû""
outstanding bonds. &ORûTHEûPUBLICûOFFERING Bank of (OWEVERûASûMARKETû
lenders’ cost of funds
PTT’s subsequent deal AyudhyaûKasikornbankûKrungthai conditions have improved since have come down”
CHECKEDûALLûTHEûRIGHTûBOXESûTOû Bank and Siam Commercial Bank THENû/MANûnûONEûOFûTHEûWEAKESTû
lure both investor groups back WILLûREPRISEûTHEIRûROLESûHAVINGû economies in the oil-rich Gulf – Decent pricing and the loan’s
into the market – a Triple A BEENûJOINTûLEADûMANAGERSûFORûTHEû HASûNOWûRETURNEDûFORûAûONE YEARû SHORTûTENORûAREûALSOûEXPECTEDûTOû
rating from Tris and rarity value June deal. „ LOANûEVENûTHOUGHûITûSUFFEREDûAû help generate interest from
DOWNGRADEûBYû-OODYSûnûTOû"Aû relationship lenders.
from Ba2 – on June 23. h)ûTHINKûTHEREûWILLûBEûENOUGHû
Banks have been asked for APPETITEûFORû5BNû4HEûPRICINGû
through direct operations or NETûLOSSvûINûNATURALûANDûCRITICALû TICKETSûOFû53MûFORû ISûATTRACTIVEûBUTûITûWILLûBEû
supply chains. HABITATSûBIODIVERSITYûhNETûGAINvû BOOKRUNNERûROLESûANDûTWOû LIMITEDûTOûTHOSEûWHOûKNOWûTHEû
ZEROûDEFORESTATIONûORûZEROûNETû regional banks are in the /MANIûGOVERNMENTvûTHEûSECONDû
“The emergence deforestation. running for the coordinator role. banker said.
of Covid-19 has 4HISûISûEXPECTEDûTOûCHANGEû h4HEREûWILLûBEûAûMIXûOFû Oman is certainly more
LENDINGûSECTORûPOLICIESûANDûCLIENTû regional and international VULNERABLEûTOûOILûPRICEûSWINGSû
underscored the fact RELATIONSHIPSûOVERûTIMEûANDûALLOWû BANKSvûAûBANKERûSAID THANûMOSTûOFûITSûWEALTHIERû'ULFû
that, when we destroy lNANCIALûINSTITUTIONSûTOûREPORTûONû 4HEûLOANûWHICHûWILLûBEûTAKENû neighbours and some banks are
biodiversity, we put our PROGRESSûANDûPLANSûWITHûlXEDû OUTûINûTHEûBONDûMARKETûMAYûBEû still cautious about further
lives, livelihoods and TIMEFRAMESûASûPARTûOFû#ORPORATEû SYNDICATEDûFURTHERûORûWILLûBEû /MANIûEXPOSUREûHAVINGûLENTûAû
economies at risk” 3OCIALû2ESPONSIBILITYûFRAMEWORKS provided as a club loan. SIGNIlCANTûAMOUNTûALREADY
'REENûBONDSûIMPACTû h)TûDEPENDSûWHATûINTERESTûTHEYû )Nû-ARCHû"ANKû-USCATûCLOSEDû
INVESTINGûANDûBLENDEDûlNANCEû GETûANDûWHATûBANKSûAREûWILLINGû Aû53MûLOANûWHILEûINû
also have the potential to be to do. It could end up a club of February Oman Gas signed a
/FûTHEûNINEûSECTORSûTHOSEûTHATû EXPANDEDûANDûSCALEDûUPûTOû AROUNDûûLENDERSvûTHEûBANKERû 53MûFACILITYû)NûTHEûTHIRDû
are most dependent on ADDRESSûBIODIVERSITYûLOSSû said. QUARTERûOFûû/MANSû
hECOSYSTEMûSERVICESvûAREû according to the report. -INISTRYûOFû&INANCEû/MANû/ILû
AGRICULTURALûPRODUCTSûAPPARELû Banks focusing on CRITICAL STAGE #OMPANYû%XPLORATIONûû
ACCESSORIESûANDûLUXURYûGOODSû sustainability are lobbying for 4HEREûWASûSOMEûDOUBTûTHATûTHEû Production and National Bank of
BREWERSûANDûELECTRICûUTILITIESû the creation of a biodiversity SOVEREIGNûWOULDûBEûABLEûTOûAGREEû Oman also agreed loans of
ANDûSECTORSûWITHûTHEûHIGHESTû data-sharing platform for the a loan this year as it is burdened 53BNû53BNûANDû
impact through land use and banking sector. by high levels of debt and a 53MûRESPECTIVELY
pollution are headed by Lenders such as ING are DElCITûTHATû&ITCHûSAIDûINû-AYû h)TûWILLûBEûVERYûCHALLENGINGûFORû
AGRICULTURALûPRODUCTSû TESTINGûTHEûWEB BASEDû COULDûCLIMBûTOûAROUNDû53BNû SOMEûBANKSû4HEûISSUEûISûNOTûJUSTû
distribution and mining. h%.#/2%vûTOOLûWHICHûASSESSESû INûûEQUATINGûTOûûOFû'$0 about credit deterioration and
The report recommends NATURALûCAPITALûOPPORTUNITIESû 4HEREûWASûALSOûCONCERNûTHATû DOWNGRADESûITûISûALSOûTHEû
MAPPINGûEXPOSUREûTOûSECTORSûANDû RISKSûANDûEXPOSUREûANDûWORKINGû GOVERNMENTûlNANCESûCOULDûHITûAû amount of paper that has come
the most harmful production WITHûNON PROlTSûSUCHûASû'LOBALû critical stage and the currency’s OUTûOFûWHATûISûNOTûAûVERYûBIGû
processes before setting targets #ANOPYûTOûTESTûTHEûABILITYûOFû 53ûDOLLARûPEGûWOULDûBECOMEû COUNTRYûINûTHEûLASTûFEWûYEARSû
and gathering data to produce open-access information system UNSTABLEûWITHINûAûYEARûIFûITûCOULDû (AVEûWEûRUNûOUTûOFûSPACEûINûOURû
NEWûTARGETSûAIMEDûATûREDUCINGû Trase Finance to assess NOTûACCESSûEXTERNALûFUNDING country limits? We have to
impact and restoring deforestation and biodiversity (OWEVERûLENDERSûHAVEûBEENû CONSIDERûCAREFULLYvûAûTHIRDû
biodiversity. These include “no risks. „ WILLINGûTOûRESUMEûTALKSûASûTHEû banker said. „

International Financing Review July 4 2020 11

Intelligence, enhanced.
For over 40 years, IFR has been clarifying the complex global
capital markets by providing intelligence on current deals
and new opportunities, along with reliable data and trusted
opinions.

The IFR website at www.ifre.com has been redesigned. It now

features improved search capabilities, expanded navigation,
powerful personalization tools and a more intuitive layout. It
combines IFR’s industry-leading content from across all the
global capital markets asset classes onto a single, consolidated
platform.

When you’re looking for clarity on the global capital markets,

look to the new IFR.

ifre.com/new-ifr-website
 People

15
&
Regulators
urge UK
Markets
 Susana
Leith-Smith 21 Citigroup is
growing in
banks to analyse is appointed head Saudi Arabia but is
and disclose risks of EME leveraged not near to elevating
and opportunities finance for Barclays its capital markets
of climate change, as it rejigs levfin and licence to a full
a potential spur for financial sponsors banking licence
green finance leadership

„ FRONT STORY RESTRUCTURING

Lazard reaps sovereign rewards

French advisory team picks up four key mandates despite departures
Highly volatile markets and desperate need
for capital has meant investment banks
have had an extremely busy second quarter
as the world has reacted to the coronavirus
pandemic.
Advisory bankers have been less active –
except in restructuring, particularly those
EXPERTûINûADVISINGûSTATESûWHOSEûlNANCIALû
vulnerabilities may have been shown up by
ANDûlNANCEûMINISTRIESûAROUNDûTHEûWORLDû
GIVESûTHEûlRMûTHEûEDGEûINûAûTIGHTûlGHTûFORûAû
MANDATEûh)TSûVERYûANNOYINGûFORûTHEûRESTûOFû
us,” said one.
There could be more mandates to come.
Many of those who have already sought help
were looking vulnerable before March, said
Thomas Lambert, another Lazard managing
director.
requested relief and 18 have been granted it.
Several of them, such as Ethiopia, Grenada
and Pakistan, have outstanding Eurobonds.
That is a complicating factor as private
sector lenders have only been asked to
PROVIDEûVOLUNTARYûRELIEFû)FûPRIVATEûSECTORû
lenders do not agree to offer equivalent
relief, which is a normal stipulation of
bilateral debt relief deals agreed at the Paris
the emergency. “We could see an even bigger wave of debt #LUBûOFûCREDITORûNATIONSûTHENûTHEûOFlCIALû
That has been good news for Lazard Freres, restructuring discussions but we are not there sector could in effect be subsidising
the French arm of New York-listed LAZARD. The yet. We have to see how the recovery phase payments to commercial investors.
lRMûHASûLONGûBEENûPRE
EMINENTûINûADVISINGû PLAYSûOUTû)TûCOULDûBEûSTRONGERûTHANûANTICIPATEDv “The tension is hard to handle as there is
sovereigns on discussions with their creditors Many other countries are also seeking aid, no simple solution to make sure public
on how to restructure debts, and it has largely through tapping the group of 20 SECTORûLIQUIDITYûSUPPORTûDOESûNOTûlNANCEû
shrugged off the loss of several top advisers
and won four of the biggest mandates to
surface in the wake of the coronavirus crisis.
Over the past decade under head of
sovereign advisory Matthieu Pigasse, Lazard
advised Greece in 2012, Ukraine in 2015 and
others on critical talks. But at the end of last
YEARû0IGASSEûLEFTûTHEûlRM
Several other senior members of the team
had also quit, including Eric Lalo, who left in
June after 30 years to join arch-rival Rothschild
& Co as head of sovereign advisory.
But the departures do not appear to have
DENTEDûTHEûlRMSûREPUTATIONû)Nû-ARCHûITû
WASûSELECTEDûAFTERûlERCEûCOMPETITIONûTOû
advise ARGENTINA, LEBANON and ECUADOR and
last month it was retained by ZAMBIA.
“We have been in this business for
decades. We know most of the stakeholders
and have a very strong level of access,”
Pierre Cailleteau, a managing director of the
LEADINGûECONOMIESûOFFERûTOûSUSPENDû PRIVATEûCAPITALûOUTmOWSvûSAIDû#AILLETEAUû
SERVICINGûOFûDEBTSûFORûTHEûWORLDSûûPOORESTû who used to be head of global sovereign
nations until the end of the year. RATINGSûATû-OODYS
“The initiative is of great use to our clients,” (EûSAIDûTHEûOFlCIALûSECTORSûSTANCEûMAYû
said Lambert. So far 32 countries have CHANGEûh)NûTHEûNEXTûPHASEûOFûTHISûCRISISû
countries will need public sector support
DEBT BURDENS RISE: EXTERNAL DEBT FOR THE and this will more likely be provided on
73 COUNTRIES ELIGIBLE FOR THE G20’s DEBT
condition that private sector creditors also
SERVICE SUSPENSION INITIATIVE (DSSI) ROSE
TO MORE THAN US$700bn IN 2019 VS US$305bn provide relief, otherwise these countries
IN 2009 WILLûGOûTHROUGHûDIFlCULTIESv
US$bn % China, which is a member of the G20 but
800 25
not the Paris Club, is now believed to be the
700 biggest individual lender to poorer countries.
600 20 Lazard has acted for a client, the Republic
of Congo, which agreed with China to
500
extend its loans in a restructuring
400 15
NEGOTIATIONûBLESSEDûBYûTHEû)NTERNATIONALû
300 Monetary Fund. Lambert expects many
200 10 more discussions ahead.
“Most Chinese lending to African
100
countries is through state-owned enterprises
0 5
SOVEREIGNûADVISORYûTEAMûTOLDû)&2
“VERY ANNOYING”
#OMPETITORSûCONCEDEDûTHATû,AZARDSûCONTACTSû
in the French treasury, multilateral bodies
2009 2014 2019 or commercial banks with a state guarantee,
Long term external public debt* RATHERûTHANûVIAûTHEûSOVEREIGNûDIRECTLYû)TûISû
Other types of external debt possible to see this debt extended but it will
Share of private creditors in long-term external public
ultimately be agreed on a case-by-case basis,”
debt (rhs)
Source: World Bank, IIF estimates
he said.
SUCHûASûTHEû)NTERNATIONALû-ONETARYû&UNDû *includes publicly guaranteed debt Christopher Spink

International Financing Review July 4 2020 13

h4HESEûPOLICYûANNOUNCEMENTSûDEMONSTRATEûTHEûGOVERNMENTSû
willingness to depart from some of the least industry-friendly EU rules”
LAW FIRM CLEARY GOTTLIEB ON BREXIT, P20

Goldman lifts capital close to Fed’s demands

GOLDMAN SACHS has already boosted capital Goldman said it would maintain its !LTHOUGHû'OLDMANSûIMPROVEDûRATIOûISûAû
measures and is working to meet the US dividend, but its loan portfolio suffered good sign, it does not satisfy all the
&EDERALû2ESERVESûBENCHMARKûFORû/CTOBERû much higher hypothetical loss rates than outstanding concerns, analysts said.
the Wall Street bank said last week. PEERSû)TSûKEYûMEASUREûOFûCOMMONûEQUITYû The bank has been trying for years to
Goldman fared worse than most rivals on capital as a portion of assets dropped to transform itself into a full-service commercial
THEû&EDSûSTRESSûTESTûWHICHûWASûRELEASEDûONû
*UNEûûANDûSENTû'OLDMANSûSHARESûSKIDDINGû
ûONûTHEûFOLLOWINGûDAY
4HEû&EDûEXAMINEDûBIGûBANKSûBALANCEû
sheets to see if they had enough funds on
hand to handle losses during two years of
severe economic and market stress.
WELLS FARGO was forced to cut its dividend
AFTERûTHEûTESTû)TûSAIDûTHEûPAYOUTûFORûTHEûSECONDû
quarter would be reduced from 51 cents per
share, but did not say by how much.
ûINû-ARCHûCOMPAREDûWITHûTHEû&EDSû
REQUIREMENTûTHATûITûHAVEûûBYûTHEûSTARTû
of October.
“We have a track record of rebuilding
capital when necessary, and have brought
OURûSTANDARDISEDû#%4ûRATIOûABOVEûûASû
this quarter comes to a close,” chief
executive David Solomon said.
3OLOMONûSAIDûTHEûlRMûREMAINEDû
committed to the medium and long-term
strategic direction he presented at its
bank: unveiling a consumer brand called
Marcus, launching a cash-management
business and promising to generate more, and
less volatile, revenue from its investment
banking and trading arms.
Those changes remain a work in
progress with an unclear trajectory,
analysts said.
Goldman is still so exposed to trading that
its recent success in the business probably
helped it build capital so quickly, Wolfe
“We expect our second-quarter results investor day in January, “including 2ESEARCHûANALYSTû3TEVENû#HUBAKûSAIDû)Tû
will include an increase in the allowance for strengthening existing businesses, also still has meaningful exposure to private
credit losses substantially higher than the expanding into new and adjacent equity and leveraged loans, which were
INCREASEûINûTHEûlRSTûQUARTERvû#%/û#HARLIEû businesses, and operating with greater TREATEDûMOREûHARSHLYûINûTHISûYEARSûSTRESSû
Scharf said in a statement. EFlCIENCYv test, he said.

Standard Bank looks to exit ICBC Standard JV

STANDARD BANK has proposed selling down its
stake in its investment banking joint
venture with Chinese state lender ICBC, but
has yet to reach an agreement on winding
up the partnership.
COULDûHAPPENûINûSTAGESûWITHûûOFûTHEûJOINTû
venture being sold initially by Standard
"ANKûTOû)#"#
“We may exit the business.
and any timetable for carrying out the
proposed reorganisation.
At its full year results in March, Standard
"ANKSûCHIEFûEXECUTIVEû3IMû4SHABALALAûSAIDû
HEûWANTEDûTOûIMPROVEûTHEûJOINTûVENTURESû
)#"#û3TANDARDû"ANKûWASûSETûUPûINûû PROlTABILITYûWHICHûHADûSLIPPEDûINTOûTHEûREDû
It is not core to Standard
WITHû)#"#ûTAKINGûAûûSTAKEûINûTHEû3OUTHû last year due to an exceptional loss of
!FRICANûGROUPSûGLOBALûMARKETSûBUSINESSû
Bank” US$198m from a single client.
based in London. The dual-branded group h!SûAûûSHAREHOLDERûWEûHAVEûLIMITEDû
SPECIALISEDûINûTRADINGûCOMMODITIESûlXED
INmUENCEûOVERû)#"#3û.ORûCANûWEûSIMPLYûCUTû
income, currencies and equities as well as OURûLOSSESû)NûTERMSûOFûOURûAGREEMENTSûWITHû
distributing African deals to clients. )#"#ûWHICHûALSOûHOLDSûAûûSTAKEû )#"#ûTHEûOPTIONûTOûTAKEûAûFURTHERûSHAREHOLDINGû
h7EûMAYûEXITûTHEûBUSINESSû)TûISûNOTûCOREûTOû directly in Standard Bank, did not respond ISûTHEIRSû)TûISûUNLIKELYûTHATû)#"#ûWILLûDOûTHISû
Standard Bank,” Kenny Fihla, head of to requests for comment. UNTILûSUCHûTIMEûASû)#"#3ûISûPROlTABLEvûHEûSAID
corporate and investment banking at Both the joint venture and Standard Bank “We continued to have robust discussions
3TANDARDû"ANKûTOLDû)&2û(EûSAIDûTHEûEXITû declined to comment further on discussions WITHû)#"#ûABOUTûTHEûWAYûFORWARDûFORû)#"#3û

Who’s moving where…

CREDIT AGRICOLE transformation and MORGAN STANLEY capital markets team
appointed Mariano digitalisation. This hired Alessandro in London. Mazza
Goldfischer as head will now be absorbed Mazza as a reports to Ian Gilday,
of global markets for within global managing director head of leveraged and
the UK, replacing Ian markets. Prior to that, in its leveraged acquisition finance for
Rowland, who has left Goldfischer was global and acquisition EMEA.
the bank. Goldfischer head of syndicate finance business. He
joined Credit Agricole and trading, based in joined from Credit
in New York in 2007 London. He worked Suisse, where he
and most recently across all asset worked for 15 years,
worked with global classes and secondary most recently as a
markets management trading for all credit managing director in
on initiatives around products. its leveraged finance

14 International Financing Review July 4 2020

 People
& Markets
h'OLDMANûDIDNTûHAVEûTHEûBESTûMIXûFORû
THISûYEARSûTESTvû#HUBAKûSAID
Goldman was already pulling back on
private equity and leveraged loans. Speeding
UPûTHATûPROCESSûWOULDûHELPûMEETûTHEû&EDSû
capital measure, but also hurt earnings.
“We have a track record
of rebuilding capital when
necessary, and have brought
our standardised CET1 ratio
above 13% as this quarter comes
to a close”
UK pushes banks to disclose
climate risk
4HEû"ANKûOFû%NGLANDûANDû5+ûlNANCIALû
regulators have published a guide to help
THEûlNANCIALûSERVICESûSECTORûANALYSEûANDû
disclose the risks and opportunities of
climate change, which could encourage
GREENûlNANCEûANDûLAYûTHEûFOUNDATIONSûOFûAû
green economic recovery.
The Climate Financial Risk Forum, set
up in March 2019 by the Prudential
Regulation Authority and Financial
Conduct Authority, has published a guide
)TûFOCUSESûONûRISKûMANAGEMENTûTOûINFORMû
business decisions and improve resilience,
scenario analysis to understand future
risks in the transition to a net-zero
economy and also pushes for disclosure to
improve transparency and innovation to
create new products.
“Most regulations make requirements
on reporting and disclosing, banks need to
report and there are initiatives by central
banks for stress testing,” said Leonie
Other major banks made no changes.
MORGAN STANLEY CEO James Gorman said the
UPDATEDûCAPITALûRULESûhPROVIDEûUSûmEXIBILITYû
to deploy our excess capital, and we will re-
evaluate our capital actions when we have
MOREûCONlDENCEûINûTHEûSHAPEûANDûPATHûOFû
the economic recovery”.
David Henry, Steve Slater
to help banks, insurers and asset managers
understand the risks of climate change and
add them to their strategy and decision-
making processes.
Adoption of the guide is not mandatory,
BUTûITûSETSûOUTûTHEû"ANKûOFû%NGLANDSû
EXPECTATIONSûFORûlRMSûITûREGULATESû)TûHOPESû
to encourage innovation and the
development of new green products that
could help the UK meet its 2050 goal of
carbon neutrality.
Sarah Breeden, the PRA co-chair of the
3CHREVEû).'SûGLOBALûHEADûOFûSUSTAINABLEû
lNANCE
h)TûISûIMPORTANTûTHATûWHATûWEûSEEûWITHû
regulatory developments that the
approaches of stress testing and reporting
are aligned, so there are not additional
requests on top of regulation. Otherwise
sustainability will be a burden and we
want to make it easier and facilitate it,”
Schreve said.
The guide follows work by the PRA
ONûBANKSûANDûINSURERSûMANAGEMENTûOFû
7EûAREûFORûTHEûTIMEûBEINGûSATISlEDûWITHûTHEû CFRF and executive sponsor for climate THEûlNANCIALûRISKSûOFûCLIMATEûCHANGEû
management actions that have been taken CHANGEûSAIDûTHEûGUIDEûWASûhAûSIGNIlCANTû ANDûTHEû&#!SûPROPOSALSûTOûIMPROVEû
THISûYEARûINCLUDINGûSIGNIlCANTûREDUCTIONSû
in business lines and in headcount.
“As shareholders we agree that much
CLOSERûINTEGRATIONûOFû)#"#3ûINTOûTHEû
)#"#ûGROUPûWILLûBEûREQUIREDûINûORDERûFORû
this business to achieve a sustainable
STEPûFORWARDûINûBUILDINGûAû5+ûlNANCIALû
system resilient to the risks from climate
change and supportive of the transition to
a net-zero economy”.
The Bank of England is encouraging
companies to push ahead with climate
ISSUERSûCLIMATEûRISKûDISCLOSURESûBYû
applying the recommendations of the
Taskforce on Climate-related Financial
Disclosures.
h4HEûlNANCIALûSERVICESûINDUSTRYûHASûAû
SIGNIlCANTûROLEûTOûPLAYûIFûWEûAREûTOûMEETû
PROlTv thinking despite delaying the launch of its THEû5+SûTARGETûOFûNETûZEROûBYûvûSAIDû
Standard Bank wrote down its investment own climate stress test until mid-2021 as Sheldon Mills, the FCA co-chair of the CFRF
INû)#"#û3TANDARDû"ANKûBYû53MûINû THEûlNANCIALûSECTORûGRAPPLESûWITHûTHEû and interim executive director of strategy
September to US$220m. That indicates it coronavirus crisis. and competition.
should receive US$110m from the sale of The guide gives recommendations to “The CFRF is a positive example of
HALFûITSûSTAKEûTOû)#"# lRMSûONûDISCLOSINGûCLIMATE
RELATEDû collaboration between regulators and
The joint venture also cut 150 jobs at the lNANCIALûRISKSûINCLUDINGûRISKûMANAGEMENTû INDUSTRYûTOûlNDûCOMMONûWAYSûTOû
same time, mostly in its equities and metals scenario analysis, and innovation in overcome barriers to meeting this
division. consumer products, by sharing tools, challenge.”
Christopher Spink experience, knowledge and case studies. Tessa Walsh

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

Daniel Leon joined global solutions. DEUTSCHE BANK Achim Linsenmaier’s

HSBC‘s asset He will be based in promoted Neal appointment as global
management arm London and report Ganatra to head head of public sector
from AXA Investment to Joanna Munro, of sovereign, origination at the end
Management to lead chief investment supranational and of last year as part of
trading and treasury officer. Leon was agency syndicate a broader reshuffle.
management. most recently head desk. Ganatra, a Ganatra reports to
HSBC Global Asset of trading, security director on the SSA Frazer Ross, head of
Management financing and desk in London, EMEA investment-
appointed Leon derivatives at AXA IM. has worked at the grade syndicate.
as global head of He previously worked bank since 2010.
trading, treasury at BNP Paribas. His promotion to
management and desk head follows

International Financing Review July 4 2020 15

Bellwether
Bellwether: n. From the practice of placing a bell around the )TûWASû'OLDMANû3ACHSû0ROOFûTHATûWHENûITûCOMESûTOû
neck of a castrated ram so that it might lead its flock INmUENCINGûWORLDûLEADERSû'OLDMANSûSTILLûGOTûITû)TûMAYû
SANTANDER HAS SHOWN that the infamous Andrea Orcel
SNAFUûHASNTûKILLEDûITSûAPPETITEûFORûHIRINGûINVESTMENTû
bankers by moving to appoint William Vereker as its UK
chairman.
6EREKERûLIKESûAûCHALLENGEû(EûSPENTûSEVERALûYEARSûASû/RCELSû
investment banking lieutenant at UBS before jumping from
THATûFRYINGûPANûTOûTHEûBLAZINGûCHIP
lREûOFûSERVINGûASû4HERESAû
-AYSûBUSINESSûENVOYûWITHûTHEûJOBûOFûSELLINGû"REXITûTOû5+û
PLC. Once May stepped down as prime minister, Vereker
sought solace at JP Morgan, but clearly decided that after
lVEûMONTHSûHESûHADûASûMUCHûSTABILITYûASûHEûCOULDûTAKE
Santander should provide some thrills and spills, not least
the added bonus of getting one over on his old boss. Orcel
hand-picked Vereker to run the investment bank at UBS but
THEûPAIRûCLASHEDûANDû6EREKERûLEFTûAFTERûAûBIGûFALLINGûOUTûINû
(ISûSMOOTHûMOVEûINTOûTHEûCHAIRMANSûSEATûATû3ANTANDERû5+û
ISûINûSTARKûCONTRASTûTOû/RCELSûABORTIVEûMOVEûTOûBECOMEûGROUPû
CEO of the Spanish lender, which resulted in a €100m case
NOûLONGERûBEûAûVAMPIREûSQUIDûBUTûITSûSTILLûLOOKINGûTOûWRAPû
around the face of humanity – in a good way this time.
./û")'û35202)3%3ûINûTHEûMANAGEMENTûRESHUFmEûATû"ERENBERGû
Bank, where Tom Jones, the long-standing head of
healthcare research, stepped up to become co-head of
%UROPEANûRESEARCHû4HATSûNOTûUNUSUAL
)4û7!3û! case of Holy Smoliy on Thursday when Ukraine was
forced to pull a sovereign bond offering after the head of its
central bank resigned.
9AKIVû3MOLIYSûEXITûMAKESûAûMOCKERYûOFûTHEûPLEDGEûBYû
former TV funny man-turned Ukrainian president Volodymyr
Zelenskiy to clean up corruption in the banking sector.
So maybe Zelenskiy will appreciate another joke: how
many former comedians does it take to change the head
OFûAûCENTRALûBANKû.ONEû*USTûAPPLYûhSYSTEMICûPOLITICALû
pressure” and the rest will take of itself.
for unfair dismissal that is due to wend its way to a Madrid
courtroom soon. The court case will be open to the public, so
Vereker will be able to keep an eye on developments.
h)-û!,,û&/2masks,” said Donald Trump in a U-turn on his
stance on face coverings as he struggles to tackle a surge in
coronavirus cases.
Trump had previously been anti-face mask, refusing to wear
one and calling them confusingly a “double edged-sword”.
He changed his mind following a report that masks
COULDûSAVEûALMOSTûûOFû'$0û"UTûWHOûWROTEûITû%STEEMEDû
PHYSICIANûANDûLEADERûOFûTHEû53SûEFFORTSûAGAINSTûTHEûDISEASEû
WELCOME BACK TOû'ARTHû2ITCHIEûTHEûFORMERûHEADûOFû#)"ûATû
Deutsche Bank who left last summer.
The straight-talking South African is hooking up with
some old Deutsche Bank colleagues at Centricus, an asset
MANAGEMENTûlRMûTHATûADVISEDû3OFT"ANKûONûTHEûRAISINGûOFû
its US$100bn Vision fund.
Ritchie is going to set up a capital markets and advisory
BUSINESSûANDûITûSOUNDSûLIKEûHESûMISSEDûTHEûCUTûANDûTHRUSTû
of markets. On March 9, as the Covid-19 pandemic sent
markets into meltdown, he tweeted: “You can only buy
from sellers – all the better when they are indiscriminate.
Generational #opportunity.” And one that he has now
!NTHONYû&AUCIû.OûOBVIOUSLYûNOT seized. „

Who’s moving where…

„ UBS has banking. Ngie joined „ Dennis Bon has Morgan, where his „ STANDARD the Middle East, North
established a new from Deutsche Bank, been appointed head roles included head CHARTERED has Africa, and Pakistan
corporate finance where he spent 12 of Americas for BNP of global custody for named Yazaid al- region for the bank,
team within its years, most recently as PARIBAS’ securities the Americas. He will Salloom as chief will start his new role
Greater China global head of the corporate services business. He be based in New York executive officer of on August 1. Salloom
banking division. advisory group in Asia. will start the role on and replaces Claudine its business in Saudi has been instrumental
Johnson Ngie has He previously worked September 1. Bon is Gallagher, who has Arabia, as it seeks in building and
joined to spearhead at UBS and Credit currently global head been appointed to expand in the strengthening the
the new team. Based Suisse. of depositary and chief conduct and kingdom after getting bank’s relationships
in Hong Kong, he fiduciary services. controls officer for a banking licence last with key clients in the
reports to John Lee, He joined the French BNPP’s corporate and year. Salloom, who kingdom.
head of Greater bank at the end institutional banking was head of financial
China within global of 2018 from JP unit in the Americas. institutions’ sales for

16 International Financing Review July 4 2020


Janssens to head Berenberg European equities
Laura Janssens has been promoted to head
European equities at German broker
BERENBERG.
Janssens is currently head of European
People
& Markets
have been appointed co-heads of European regional head of syndicate, and Arnd
markets, a new business unit including FX, Grimm, head of capital markets advisory,
lXEDûINCOMEûANDûTRADEûSUPPORT will report to de Smet.
&8ûANDûlXEDûINCOMEûREMAINSûHEADEDûBYû David Mortlock, global head of
research and will keep that role together
with new co-head Tom Jones, head of
healthcare research. As well as research, all
the sales team in London and Continental
Europe will report to her.
Philipp Wiechmann, head of trading, and
Stewart Cook, head of sales trading in Europe,
Turner named Barclays leveraged finance chairman
BARCLAYS has appointed Chris Turner as
Arne Rahner, with trade support managed
by Sandra Bode.
Fabian de Smet, head of syndicate globally,
is additionally appointed head of
Continental Europe investment banking.
Stefan Ries, head of ECM and DCM, Silke
Krueger, head of M&A, Bastian Schiedat,
Barclays has appointed Susana Leith-Smith
"ERENBERGSûINVESTMENTûBANKûSAIDûTHEû
business had had a “strong performance in
THEûlRSTûHALFv
At the end of 2018, Berenberg cut 100 jobs
in its equities business as a result of the
%UROPEANû5NIONSû-I&)$û))ûRULES
Christopher Spink
business since 2014 and is responsible for
CHAIRMANûOFûGLOBALûLEVERAGEDûlNANCEûASûPARTû ASûHEADûOFû%-%ûLEVERAGEDûlNANCEûBASEDûINû some major clients, after previously heading
OFûSEVERALûCHANGESûINûITSûLEVERAGEDûlNANCEû London. Leith-Smith has been leading the lNANCIALûSPONSORSûCOVERAGEûINû!SIAû(EûWILLû
ANDûlNANCIALûSPONSORSûBUSINESS LEVERAGEDûlNANCEûTECHNOLOGYûMEDIAûANDû report to Chris Sullivan, global head of
4URNERûHASûBEENûHEADûOFûLEVERAGEDûlNANCEû
ANDûlNANCIALûSPONSORSûFORû%UROPEûANDûTHEû
Middle East for the past three years and
will relocate to New York from London
0ACIlC
for the new role. He will report to Jean-
Francois Astier, global head of capital
markets.
Standard Life Aberdeen picks ex-Citi exec Bird as CEO
STANDARD LIFE ABERDEEN chief executive Keith
Skeoch ISûSTEPPINGûDOWNûAFTERûlVEûYEARSûATûTHEû
helm and former Citigroup executive
technology team in EME for several years.
She will report to Astier and Reid Marsh,
head of banking for Europe, the Middle East
ANDû!SIA
coverage. McGrath was previously head of
Andrew Richards has been appointed as head
OFû%-%ûlNANCIALûSPONSORûCOVERAGEû2ICHARDSû
HASûHELPEDûTOûGROWûTHEû%-%ûlNANCIALûSPONSORSû
strength, this appointment launches the
next phase of evolution aimed at developing
and expanding the revenue opportunities
lNANCIALûSPONSORSûANDû-ARSH
Barclays has also appointed Ken McGrath as
CHAIRMANûOFû%-%ûlNANCIALûSPONSORû
THEû%-%!ûlNANCIALûSPONSORSûGROUPû(EûWILLû
report to Sullivan and Marsh.
Steve Slater
“The current crisis has highlighted the
importance of active asset management as
well as building greater resilience into
Stephen Bird will replace him, the British
asset manager said.
The announcement marks the end of a 14-
year career as an SLA director for Skeoch, during
WHICHûHEûOVERSAWûTHEûûMERGERûOFû3TANDARDû
Life and Aberdeen Asset Management to create
available to SLA,” the company said.
)TûPUTSûTWOûFORMERûBANKERSûATûTHEûHELMûOFû
the asset manager. Douglas Flint, former
HSBC chairman, joined as chairman last year.
Bird joined the board as CEO-designate on
July 1 and Skeoch will serve out the remainder
PERSONALûlNANCIALûPLANNINGvû"IRDûSAID
SLA said it expected the transition to take
place by the end of the third quarter.
Bird spent 21 years at Citi and was most
recently CEO of its global consumer banking
business from 2015 to November 2019. Prior
ONEûOFû"RITAINSûBIGGESTûFUNDûMANAGERS of his contract, which runs until July 2021, as TOûTHATûHEûWASû#%/ûFORû#ITIGROUPSû!SIA

“With integration well progressed and non-executive chairman of Aberdeen Standard 0ACIlCûBUSINESS
HAVINGûBUILTûSIGNIlCANTûBALANCEûSHEETû )NVESTMENTSû2ESEARCHû)NSTITUTE Simon Jessop

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

„ HSBC appointed two „ CREDIT SUISSE „ Chris Scott has „ NATIONAL „ Ian Long has joined „ JARDEN has
former Deutsche Bank hired European rejoined UBS as co- AUSTRALIA BANK has ICBC INTERNATIONAL continued its raid
executives, Edward Central Bank head of equities in poached Andrew Irvine as co-head of equity of UBS in Australia,
Lee and Joy Wang, communications Australasia alongside from Canada’s Bank capital markets, making its first senior
to its Singapore- chief Christine Graeff Steve Boxall. Scott of Montreal to head sources said. Long is debt capital markets
based Southeast Asia as its new group is effectively a direct business and private co-heading the team hire with Enrico
equities division. Lee head of corporate replacement for Chris banking, its largest with Jian Wu. Long was Musso joining the
will be the regional communications, Williams, who left last division. Irvine, a former previously head of ECM New Zealand-based
head of equity capital effective January 1. year. Scott previously McKinsey consultant and corporate finance boutique. Musso
markets, while Graeff will leave the spent more than 20 who led the business for Asia ex-Japan at worked at UBS for
Wang will helm the ECB at the end of years at UBS, split banking division at Bank Mizuho Securities nearly a decade, most
Southeast Asia equity September. between Sydney, of Montreal, will take the and also worked at recently as co-head
research department. Tokyo and Hong Kong. helm on September 1. Deutsche Bank. of DCM.

International Financing Review July 4 2020 17

“Financial institutions are concerned about the legislation principally
because of uncertainty about how the sanctions will be used”
HONG KONG LAWYER NICK TURNER, P21

Capital markets week ahead:

Oman, China Bohai Bank
AND … BREATHE After a frantic quarter for BANK ON IT China Bohai Bank hopes to SOAP BOX Cathay Media, which produces
issuance – the busiest ever for bonds, and raise HK$14bn (US$1.8bn) from its Hong popular Chinese television dramas
the biggest in a decade in equities – we +ONGû)0/ûONû4HURSDAYû4HEû4IANJINûLENDERû Demi-Gods and Semi-Devils and
head into what would traditionally be the WASûTHEûlRSTûNATIONALûJOINT STOCKû The Heaven Sword and Dragon Sabre,
quiet part of the year, when bankers and commercial bank to be approved in the ISûEYEINGû(+BNû53M ûFROMû
their clients (at least in the northern 1990s and counts Standard Chartered as a its Hong Kong listing a day later.
hemisphere) head to the beach. The major shareholder. Bankers on the deal Proceeds will be used to invest in
calendar certainly appears much quieter have already lined up nine cornerstone production, as well as the possible
in the weeks ahead, which should give investors to buy almost a third of the acquisition of education or training
some a chance for a breather. shares on offer. institutions – it already operates one
But with many governments and university.
companies still in need of repairing their
balance sheets, the quiet is unlikely to
hold for long. Many of those that maxed
out on their revolvers are under pressure
to take them out in the bond market, and
many others are weighing up rights
issues. With markets still holding up
despite the uncertainty, it makes little
sense to wait and see.

OH, MAN! A US$2bn loan for Oman is set
GAME PLAN Archosaur Games wraps up its
(+BNû53M û(ONGû+ONGû)0/ûONû
Tuesday. The Chinese developer has
developed games such as Fantasy Zhuxian
and Dragon Raja and boasts internet giant
Tencent as one of its main shareholders.
Five cornerstone investors have
committed to support the deal with a
total of more than US$100m.
CHICKEN FEED Shandong Fengxiang will
PREMIUM BONDS CCR Re, the French
government-owned reinsurer, is expected
to hit the market with a Tier 2 bond
deal in euros, which looks set to raise
more than €250m for the company.
)TûMADEûAûSERIESûOFûONLINEûPRESENTATIONSû
to investors last week in a bid to tempt
them into the upcoming deal. The
securities are expected to be rated BBB+
by S&P.
TOûBEûlNALISEDûTHREEûMONTHSûAFTERûTHEû
sultanate was forced to ditch the deal
after it was downgraded further into junk
status by Fitch on the back of the
coronavirus pandemic and falling oil
prices. Despite another downgrade from
price its Hong Kong listing the same
day. The chicken farm operator is
hoping to raise HK$1.8bn (US$230m)
from the deal, which it will use to expand
its breeding and broiler production
capacities, repay borrowing, develop
-OODYSûSINCEûTHENû-USCATûISûHOPINGûTHATû sales channels for processed chicken
improved market conditions will buoy the products and for research and
deal. development.
LAST WEEK IN NUMBERS
OUT ON BAIL The European Financial RAISING THE ROOFû3)'ûONEûOFûTHEû5+Sû US$11bn – Proceeds for Japanese drug
Stability Fund, which alongside its sister SUPPLIERSûOFûINSULATIONûANDûROOlNGû MAKERû4AKEDAû0HARMACEUTICALSûDUAL

European Stability Mechanism funded the MATERIALSûWRAPSûUPûAûaMûEQUITYûRAISEû currency bond deal
BAILOUTSûOFûlVEûCOUNTRIESûDURINGûTHEû ONû7EDNESDAYû)TûISûDOINGûTHEûCASHûCALLûTOû €25bn – Demand for ThyssenKrupp
eurozone crisis, kicks off its third-quarter
OFFû
funding programme with a bond deal.
The EFSF was last in the market in April
when it raised €4.5bn in a deal that was
three-times subscribed, allowing it to
wrap up its Q2 funding early.
18
strengthen its capital structure, with
proceeds set to go towards repaying £48m
of debt. An accelerated bookbuild for the
lRMûPLACINGûANDûPLACINGûLAUNCHEDûLASTû
month, and the open offer closes this
week.
International Financing Review July 4 2020
%LEVATORûlNANCINGûDESPITEûAûSTAND
over aggressive covenants
US$1.75bn – Bond deal from Ukraine
that was pulled after shock resignation
of its central bank chief
 People

FEE TABLES
& Markets
JUNE 2020

JP Morgan keeps top spot after Q2 surge

GLOBAL INVESTMENT BANKING FEES JP MORGAN was the leading global investment JP Morgan was the leading bank in the
Managing No of Total Share BANKûFORûFEESûINûTHEûlRSTûHALFûOFûTHISûYEARûASû !MERICASûWITHûAûûSHAREûOFûTHEûMARKETû
bank or group issues US$(m) (%) THEûRANKINGûOFûTOPûlRMSûKEPTûAûFAMILIARû but was beaten in Europe, the Middle East
1 JP Morgan 2,747 4,557.6 7.9 LOOKûWITHûTHEûTOPûSEVENûlRMSûHOLDINGûTHEû ANDû!FRICAûBYû'OLDMANûWHICHûHADûAûû
2 Goldman Sachs 1,634 3,927.7 6.8 same rankings as a year ago. share of fees in the region. BANK OF CHINA
3 BofA Securities 2,474 3,625.8 6.3 *0û-ORGANûPULLEDûINû53BNûINûFEESû TOPPEDûTHEûRANKINGSûINû!SIAûWITHûûOFû
4 Citigroup 2,089 3,248.7 5.6 from debt and equity underwriting, M&A FEESû2ElNITIVûSAID
5 Morgan Stanley 1,929 3,211.9 5.5 advisory and syndicated loans through to Goldman also topped fees from equity
6 Credit Suisse 1,050 2,002.4 3.5 THEûENDûOFû*UNEûUPûûFROMûAûYEARûEARLIERû UNDERWRITINGûDEALSûINûTHEûlRSTûHALFûOFûTHEû
7 Barclays 1,712 1,798.4 3.1 ANDûGIVINGûITûAûûSHAREûOFûGLOBALûFEESû YEARûTAKINGûAûûSHAREûJUSTûAHEADûOFû
8 Wells Fargo 1,714 1,280.5 2.2 2ElNITIVûDATAûSHOWED Morgan Stanley and JP Morgan. JP Morgan
9 Deutsche Bank 1,624 1,180.4 2.0 GOLDMAN SACHS ranked second with fees of was the leading bank for debt underwriting
10 BNP Paribas 1,359 1,166.7 2.0 53BNûUPûûFROMûAûYEARûAGOûFORûAû and loan syndication fees.
11 HSBC 1,644 1,026.0 1.8 ûSHAREûOFûTHEûWALLETû53ûBANKSû Some of the smaller US banks fared even
12 Mizuho Financial 1,868 986.8 1.7 DOMINATEDûTHEûTOPûlVEûASûBANK OF AMERICA, BETTERûFORûFEESûTHANû7ALLû3TREETSûBIGGESTû
13 RBC CM 1,381 961.0 1.7 CITIGROUP and MORGAN STANLEY followed, guns. EVERCORE showed the greatest rise in
14 UBS 610 788.5 1.4 thanks to year-on-year fee increases FEESûAMONGûTHEûTOPûûlRMSûWITHûAûûYEAR
15 Jefferies 528 780.9 1.3 OFûûûANDûûRESPECTIVELYû ON YEARûJUMPûTOû53MûFROMûûDEALSû
16 MUFG 1,404 728.2 1.3 2ElNITIVûSAID That lifted it to 19th in the global rankings,
17 Sumitomo Mitsui 1,501 718.6 1.2 &EESûACROSSûTHEûINDUSTRYûWEREûUPûûFROMû FROMûTHûAûYEARûEARLIERû2ElNITIVûSAID
18 Bank of China 2,263 650.6 1.1 AûYEARûEARLIERûTOû53BNûMAKINGûUPûFORûAû JEFFERIES moved up to 15th from 18th on
19 Evercore Partners 128 616.4 1.1 slow start to the year on the back of record THEûBACKûOFûAûûJUMPûINûFEESûFROMûTHEûlRSTû
20 Credit Agricole CIB 846 616.1 1.1 debt issuance since mid-March (see Top half last year.
Total 29,624 57,895.5 News story). Steve Slater

AMERICAS INVESTMENT BANKING ASIA-PACIFIC & JAPAN INVESTMENT BANKING EMEA INVESTMENT BANKING
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 1,936 3,308.9 10.9 1 Bank of China 2,166 588.9 4.2 1 Goldman Sachs 330 1,070.2 7.9
2 BofA Securities 1,864 2,797.5 9.2 2 Citic 2,866 562.8 4.0 2 JP Morgan 609 953.5 7.0
3 Goldman Sachs 1,048 2,551.2 8.4 3 Mizuho Financial 1,052 553.0 3.9 3 BNP Paribas 645 699.4 5.1
4 Citigroup 1,381 2,265.6 7.5 4 Morgan Stanley 565 500.8 3.6 4 Citigroup 460 678.3 5.0
5 Morgan Stanley 1,107 2,144.4 7.1 5 Sumitomo Mitsui 988 383.4 2.7 5 Credit Suisse 301 584.9 4.3
6 Wells Fargo 1,636 1,208.3 4.0 6 ICBC 1,976 381.5 2.7 6 BofA Securities 401 572.9 4.2
7 Barclays 1,054 1,144.2 3.8 7 Credit Suisse 146 345.4 2.5 7 Barclays 506 567.1 4.2
8 Credit Suisse 605 1,072.2 3.5 8 MUFG 712 326.7 2.3 8 Morgan Stanley 259 566.7 4.2
9 RBC CM 1,213 797.2 2.6 9 CICC 1,050 323.8 2.3 9 Deutsche Bank 430 491.6 3.6
10 Jefferies 469 642.4 2.1 10 Goldman Sachs 258 306.3 2.2 10 HSBC 603 481.5 3.5
Total 9,908 30,280.0 Total 14,614 14,003.9 Total 5,339 13,611.6

GLOBAL BONDS GLOBAL EQUITIES GLOBAL LOANS

Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 1,734 1,806.5 7.9 1 Goldman Sachs 264 1,256.5 10.8 1 JP Morgan 636 773.7 7.7
2 BofA Securities 1,425 1,446.6 6.3 2 Morgan Stanley 254 1,071.2 9.2 2 BofA Securities 717 715.1 7.1
3 Citigroup 1,360 1,310.5 5.7 3 JP Morgan 261 1,055.7 9.0 3 Citigroup 443 526.5 5.2
4 Morgan Stanley 1,389 956.0 4.2 4 BofA Securities 232 834.7 7.1 4 Goldman Sachs 263 491.1 4.9
5 Goldman Sachs 964 940.2 4.1 5 Citigroup 179 707.7 6.1 5 Mizuho Financial 595 450.8 4.5
6 Barclays 1,208 871.5 3.8 6 Credit Suisse 137 522.0 4.5 6 MUFG 798 391.1 3.9
7 Wells Fargo 1,184 826.2 3.6 7 UBS 115 307.8 2.6 7 BNP Paribas 434 389.7 3.9
8 Credit Suisse 626 707.8 3.1 8 Barclays 122 292.1 2.5 8 Sumitomo Mitsui 637 364.8 3.6
9 Deutsche Bank 1,253 687.3 3.0 9 Jefferies 110 291.8 2.5 9 Credit Suisse 212 360.4 3.6
10 BNP Paribas 830 570.3 2.5 10 Cowen 68 195.6 1.7 10 Barclays 315 321.2 3.2
Total 18,354 22,846.0 Total 2,844 11,687.0 Total 4,763 10,075.8

1/1/2020 to 30/6/2020
Source: Refinitiv

International Financing Review July 4 2020 19

“We could see an even bigger wave of debt
restructuring discussions but we are not there yet”
LAZARD MANAGING DIRECTOR THOMAS LAMBERT, P13

China to expand securities competition

"EIJINGûISûPLANNINGûTOûALLOWûSOMEûOFû#HINASû up a securities unit in mainland China with ownership, although thus far none have
largest commercial banks to expand into paid-in capital of Rmb100bn (US$14.1bn). By APPLIEDûTOûINCREASEûTHEIRûOWNERSHIPûTOûû
INVESTMENTûBANKINGû#HINESEûlNANCIALûNEWSû contrast, Chinese brokerage giant Citic under the new rules.
provider Caixin reported, citing unnamed Securities has registered capital of China has long sought to create an
sources. Rmb13bn. investment bank to rival the major
At least two major commercial banks
will be granted securities licences to begin
with, it reported, without naming any
banks that would be involved in the pilot
scheme.
Practically all commercial banks are
currently barred by regulators from
competing head-to-head in mainland China
WITHûLOCALûSECURITIESûlRMSûANDûFOREIGNû
investment banks, although several
OWNEDûCOMPANIESûHASûDRIEDûUPû)Nû
)#"#ûSAIDûITûWOULDûTARGETûAûNETûPROlTûOFû
2MBBNûDURINGûITSûlRSTûYEARûOFûOPERATIONSû
on the back of Rmb40bn of revenues.
The CSRC said in a statement it was
DISCUSSINGûhMULTIPLEûPATHûOPTIONSvû)Tû
cautioned that any change to allow
commercial banks to start operating as
investment banks as well would require
sign-off from the State Council.
The move comes as Beijing has been
%UROPEANûANDû53ûlRMSûALTHOUGHûSOûFARûITSû
EFFORTSûHAVEûFALLENûmAT
#HINAû)NTERNATIONALû#APITALû#ORPûHADû
CARVEDûOUTûAûREPUTATIONûASûTHEûCOUNTRYSû
strongest investment bank on the back of
bringing the biggest state-owned enterprises
and red chips to the equity and debt
markets. But its crown has slipped in the
PASTûFEWûYEARSûASûTHEûmOWûOFûBIGû)0/SûFROMû
STATE
including INDUSTRIAL AND COMMERCIAL BANK OF
CHINA, BANK OF CHINA, CHINA CONSTRUCTION BANK
and BANK OF CHINA provide a range of
investment banking services offshore,
primarily through their Hong Kong units.
opening up its domestic securities market to
global investment banks, scrapping the cap
on foreign ownership altogether earlier this
year.
Several foreign banks including HSBC,
ûITûMERGEDûWITHû#HINAû)NVESTMENTû
Securities as part of its plan to shift towards
retail brokerage.
Citic Securities made arguably the most
ambitious push when it acquired CLSA from
#AIXINûALSOûSAIDûTHATû)#"#ûTHEûWORLDSû
largest bank by assets, had already
submitted proposals to the China Securities
BRACKETûlRMS
Regulatory Commission in late 2018 to set
UK reserves right to plough own financial
regulation furrow
Britain has indicated it is prepared to set
DIFFERENTûlNANCIALûREGULATIONSûTOûITSû%UROPEANû
Union counterparts once it leaves the trading
bloc, but legal experts do not reckon many
major changes will be made in the short term.
At the end of June the UK Treasury issued
updates on how it would transpose existing
UBS, Nomura, JP Morgan, Goldman Sachs
and Credit Suisse have already increased
THEIRûSHAREHOLDINGSûINûSECURITIESû*6SûTOûû
or set up new JVs from scratch with majority
Conduct Authority, is part of the Bank of
England, which also houses the Prudential
Regulatory Authority.
DEPARTURE FROM PAY RULES?
The new regulations regarding investment
lRMSûALSOûHAVEûPROPOSALSûTOûINTRODUCEûEXTRAû
Credit Agricole in 2013, outlining plans to
build a global investment bank to compete
WITHûTHEûTHEûBULGE
Thomas Blott
“This is a bit of a test. The one obvious
DEVIATIONûNOTûTOûRECOGNISEûINVESTMENTûlRMSû
as banks makes sense as the UK already
REGULATESûSYSTEMICûINVESTMENTûlRMSûASûIFû
they are banks,” he said.
h)TûISûNOTûENTIRELYûCLEARûIFûGROUNDSûAREû
being laid for deviations which could be
lNANCIALûREGULATIONSûSUCHûASûTHEû"ANKINGû
Resolution and Recovery Directive and
Capital Requirements Regulation and
Directive, into UK law.
“The EU is naturally already making
decisions on amending its current rules
WITHOUTûREGARDûFORûTHEû5+SûINTERESTSû7Eû
will therefore also tailor our approach to
rules banks already face, such as on
remuneration by forcing the disclosure of the
pay of senior staff and capping the proportion
of variable pay such staff can receive.
The FCA has launched a consultation on
the proposals that closes in September,
giving scope to make further deviations
from the EU plans.
MINORûBUTûMAYûBEûSIGNIlCANTûFORûEXAMPLEû
regarding remuneration and how
proscriptive the rules might be between the
RATIOûOFûVARIABLEûTOûlXEDûPAYv
When the bonus cap for bankers came in,
the FCA resisted banks based in the UK
having to follow the rules, fearing it would
lead to complaints from non-EU banks
implementation to ensure that it better suits “These policy announcements OPERATINGûINû,ONDONû)NûTHEûENDûTHEûBONUSû
the UK market outside the EU,” said Rishi DEMONSTRATEûTHEûGOVERNMENTSûWILLINGNESSû CAPûWASûDOUBLEDûTOûTWOûTIMESûlXEDûPAYûIFû
Sunak, UK chancellor. to depart from some of the least industry- shareholders approved the increase.
The Treasury also said what line it might friendly EU rules and its desire to preserve Katz said it was doubtful if the FCA would
take on future regulations and directives, such THEûOPENNESSûOFûTHEû5+ûlNANCIALûCENTREvû deviate too much from the EU regarding
ASûTHOSEûCOVERINGûINVESTMENTûlRMSûWHICHûAREû
currently being discussed but not due to come
into effect until next year, after the post-Brexit
transition period has come to an end.
Unlike the EU guidelines, it would not
REQUIREûINVESTMENTûlRMSûALSOûTOûBEû
authorised as credit institutions. This is
largely because their regulator, the Financial
20
SAIDûLAWûlRMû#LEARYû'OTTLIEBûINûAûNOTE
But others questioned how possible this
might be.
h)ûWOULDûBEûSURPRISEDûIFûTHEREûWEREûMAJORû
deviations,” said Etay Katz, partner at law
lRMû!LLENûû/VERYûh4HEû5+ûWANTSûTOûBEûASû
aligned as possible without kicking up a
lGHTûWITHûTHEû%5
International Financing Review July 4 2020
INVESTMENTûlRMSûREGULATIONûSINCEûITûHADû
been “a key architect” of this regime, which
meant it had “a strong incentive for it to be
implemented”.
h)FûYOUûSTARTûTOûDEVIATEûTHENûITûBECOMESû
hard to manage any knock-on effects,”
he said.
Christopher Spink

Citi upbeat on Saudi but
no full licence yet
CITIGROUP is positive on prospects for banking
in Saudi Arabia but is not near to elevating
its capital markets licence into a full
banking licence, its head of EMEA said.
“The question about getting a full licence
AGREEMENTûISûSOMETHINGûWEREûFULLYû
conscious of as a potential step but there is
no timetable around that,” said David
seen as a potential step toward asking the
Saudi central bank for a full bank branch
licence, which several rivals have.
Banks have increased their activities in
Saudi Arabia in recent years, encouraged by
THEûKINGDOMûASûITûDIVERSIlESûITSûECONOMYû
away from oil. But deals and revenues have
not been as plentiful for Western banks in
People
& Markets
„ IN BRIEF
HONG KONG CONCERN
International banks are seeking details of the scope
of US legislation that would penalise them for doing
business with Chinese officials who implement
Beijing’s sweeping new national security law on Hong
Kong. The US Senate passed the bill unanimously on
Thursday, a day after it saw full support in the House
of Representatives, in a rare example of bipartisan
support that reflects politicians’ concern over the
erosion of the Hong Kong’s autonomy following
China’s imposition of the law on Tuesday.
,IVINGSTONEû#ITISûCHIEFûEXECUTIVEûFORû
Europe, the Middle East and Africa.
“We are very positive on the outlook of
lNANCIALûSERVICESûACTIVITYûINû3AUDIû!RABIAû
ANDûITSûSOMETHINGûWEûWANTûTOûPARTICIPATEû
very strongly in,” he told reporters on a
BRIElNGûHOSTEDûBYûTHEûBANK
Saudi Arabia awarded a licence to Citigroup
INûûTOûALLOWûITûTOûPROVIDEûAûRANGEûOFû
investment banking and capital markets
recent years as many had hoped.
“We do a lot of activity, in capital markets
primarily, with both international
companies operating in the kingdom and
with many of the major Saudi companies
and government entities,” Livingstone said.
He said Citi has been growing its team in
Riyadh and now has more than 24 people
there. That has included growing its direct
custody and clearing services businesses in
The bill calls for sanctions on Chinese officials
and others who help violate Hong Kong’s
autonomy, and financial institutions that do
business with those who are found to have
participated in any crackdown on the city.
But it does not lay out which individuals might
be included, nor what they would be forbidden
from doing.
Banks including Citigroup and Bank of America
were among those holding calls on Friday with
SERVICESûWHICHûMARKEDûTHEû53ûBANKSûRETURNû
to the country after a 13-year absence and was
German finance firms
commit to climate actions
Sixteen institutions operating in the
'ERMANûlNANCIALûSECTORûHAVEûSIGNEDûUPûTOû
align the structure of their lending and
investment portfolios with the Paris
Agreement on climate change.
The signatories have agreed to jointly
collect emissions data as well as devise and
the past year.
Steve Slater
climate targets for their portfolios by the
end of 2022.
The joint agreement only applies to
investment portfolios that are not the object
of fund or mandate business, which will be
included gradually by the group but there is
NOûlXEDûSCHEDULE
US colleagues to discuss the potential fallout
from the legislation, but few conclusions could be
drawn at this stage, sources said.
“Financial institutions are concerned about the
legislation principally because of uncertainty about
how the sanctions will be used,” said Nick Turner,
a lawyer specialising in sanctions and anti-money-
laundering at Steptoe and Johnson in Hong Kong.
Turner said the main area of uncertainty was
around what would constitute a significant
transaction, and whether that would prevent a
bank providing retail or private banking services to
a sanctioned person, as well as which individuals
might be named.
FAMILY MAN
Hedge fund manager John Paulson, whose multi-
implement tools that gauge the climate 4HEûûSIGNATORIESûAREû".0û0ARIBASû billion pay-off on a bet against the overheated
impact of their portfolios. They will also Commerzbank, Deutsche Bank, Edeka Bank, housing market a decade ago turned him into an
report annually on individual progress. Evangelische Bank, GLS Bank, UniCredit industry superstar, will stop managing money for
“We expect growing focus [on (6"û).'û(ANNOVERSCHEû+ASSENû+$
"ANKû outside clients and turn his firm into a family office.
SUSTAINABILITYûlNANCE=ûGLOBALLYûOVERûTHEûNEXTû
months, given progress of regulatory reform
and reporting initiatives as well as a broader
focus on sustainability in the wake of the
Covid pandemic,” said Gerald Podobnik,
CHIEFûlNANCIALûOFlCERûOFû$EUTSCHEû"ANKSû
corporate banking arm and one of the
signatories.
“We are proud to be part of this initiative
ASûITûISûKEYûTHATûTHEû'ERMANûlNANCIALûSECTORû
works together to develop methods and
SPECIlCûTARGETSûFORûCLIMATEûlNANCEv
The group is working on methodologies
and has committed to putting initial
measures in effect in the next 12 months
and to report on the advances made. The
signatories have also agreed to set and
PUBLISHûSECTOR
SPECIlCûSCENARIO
BASEDû Malicka Danna Sielinou
LBBW, Standard Chartered Bank, Steyler
Ethik Bank, Triodos Bank, UmweltBank and
Verka.
They hold combined assets of more than
õTRNûANDûHAVEûMOREûTHANûûMILLIONû
customers across Germany.
“The wide range among the initial
signatories ... shows that these tasks are
widely accepted and can be implemented by
lNANCIALûACTORSûREGARDLESSûOFûSIZEûORûSPECIlCû
asset classes,” the banks said in a statement.
The signatories also said they view the
scheme as a means to strengthen the
competitiveness and resilience of the
'ERMANûlNANCIALûSECTORûWITHûTHEûAIMûOFû
CREATINGûAûSUSTAINABLEûlNANCEûHUBûASûWELLûASû
reducing default risks.
restructuring a concern for German banking unions.
International Financing Review July 4 2020
The news had been expected for some time
after Paulson & Co’s assets had been shrinking,
prominent employees left the firm, and
performance had been mixed. Paulson joins a
number of prominent fund managers – Carl Icahn,
George Soros, Stanley Druckenmiller – who have
all returned outsiders’ money and freed themselves
from the pressures of dealing with clients.
COMMERZ CUTS
CERBERUS wants COMMERZBANK to cut far more
than a reported 7,000 jobs as part of plans by
Germany’s second-biggest bank to reduce costs, a
person familiar with the matter told Reuters.
The US activist investor, one of Commerzbank’s
largest shareholders with a stake of more than 5%,
has been pressing for big changes, with a dramatic
21
THE MORE
YOU LOOK,
THE MORE
YOU SEE.
Test your investment strategies with our
unrivalled range of data and research.
refinitiv.com
 BONDS
SSAR 27 Corporates 31 FIG 35 Covered Bonds 38 High-Yield 39 Structured Finance 42

„ FRONT STORY EUROPEAN CORPORATES

Bayer litigation jumbo rounds up buyers

Yield trumps costs for investors
ECB support important to outcome
The promise of a little extra yield on a super-
sized bond was all it took for investors to
overlook German pharmaceutical company
BAYER‘s mountain of debt and bumper
Roundup settlement.
Accounts placed more than €17.5bn of
multi-tranche bond issues in the euro
market from the likes of Exxon Mobil or
Takeda Pharmaceutical. The key difference,
according to a second lead on Bayer, was the
participation of the ECB.
“Look at Exxon, look at Takeda, they did
DEBT MOUNTAIN
One investor said the concessions did not
look so high, considering the hurdles the
company is facing in terms of its debt
MOUNTAINûANDû%3'ûCONCERNS
Bayer has €8bn of debt maturities coming
orders for the €6bn four-tranche litigation
bond.
Buyers hoped Bayer would be able to
draw a line under the legal maelstrom that
has dogged the company for more than a
year over claims its weed killer Roundup
caused cancer.
0ROCEEDSûWILLûlNANCEûAû53BNû
settlement Bayer is paying to end the nearly
100,000 lawsuits the company inherited
with its takeover of Monsanto in 2018.
“Generically, the company has had a
torrid time,” said a banker away from the
lNEûBUTûJUSTûlNEûREALLYûNOTHINGûSPECIALvûHEû
said.
“What do they have in common? Neither
was ECB eligible. I think we can say broadly
that if you are not ECB eligible you will
suffer. Now look at Bayer. It was eligible for
the different ECB programmes and they got
a very strong result.”
The additional support of the ECB, while
not key in ensuring the successful execution
of a deal does help to anchor interest and
bring in more investors, especially when it
comes to issues from troubled sectors or
UPûINûûTHEûRElNANCINGûOFûWHICHûWILLû
push leverage over four times, according to
Moody’s analysts. The company has more
than €30bn in bonds outstanding, according
TOû2ElNITIVû%IKONûDATA
The investor said he was passing on the
deal – more because he could not get over
Bayer’s debt hurdle rather than any
CONCERNSûONûTHEû%3'ûFRONT
“It’s an easy [deal] to dodge if you want
cleaner pharmaceutical exposure, but
MAYBEûGIVESûMANAGERSûJUSTûENOUGHû
mEXIBILITYûFORûTHEMûTOûJUSTIFYûCONTINUINGûTOû
deal.
However, in a market where yields have
been crushed by central bank participation,
a large deal with a hefty concession is too
good to pass up for investors looking to beat
WITHûDIFlCULTûCREDITûSTORIESûHEûADDED
In the days following the trade, several
bankers noted the secondary market
performance of the four tranches.
h4HEYVEûDONEûWELLû3OMEûOFûTHATû)ûTHINKûISû
take exposure,” said the investor.
h%3'ûCONCERNSûAREûAûDISCUSSIONûPOINTûHEREû
but many are working round the issues,”
said the lead banker.
Despite the sizeable costs incurred by the
benchmarks, he said. THEûMARKETûlRMINGûUPûSOMEûOFûTHATûISûTHEû LITIGATIONû-OODYSû30ûANDû&ITCHûHAVEûSTABLEû
“[Investors] would rather buy a troubled premiums they came at, but regardless, they outlooks on their Baa1/BBB/BBB+ ratings.
credit with a big spread than a quality credit have performed,” said a second banker off -OODYSûANDû&ITCHûSAIDûTHEûSETTLEMENTû
with a low spread in this environment,” said the deal. removes the substantial uncertainty that
the banker away from the trade.
Leads Citigroup, Deutsche Bank, Mizuho and
UniCredit approached investors with four,
6.5, 9.5, and 12-year maturities.
DATEDû “The agencies still have fairly optimistic
At IPTs, the deal, telegraphed as a size of
€4bn-plus, was offering concessions of
45bp–55bp, according to a lead.
The banker away from the transaction
saw the starting premiums as high as 50bp–
60bp over Bayer’s curve.
“Bottom line, they have to pay an extra
large premium not only for the size but also
because of the circumstances around
Monsanto,” said the banker away from the
The shortest tranche, the July 2024s, had WASûHANGINGûOVERûTHEûCOMPANYSûlNANCESû
tightened more than 12bp by Thursday, although both also noted it will delay
according to Tradeweb. The performance Bayer’s deleveraging plans.
WASûNOTûASûSIGNIlCANTûONûTHEûLONGER
bonds. The longest leg, the July 2032s, had forecasts on their deleveraging, which
COMEûINûBYûJUSTûBP doesn’t leave Bayer much manoeuvring
space if they miss on any guidance,” said the
investor.
BAYER SWAP SPREAD
2.125% DECEMBER 2029s
The lawsuit liability is added directly to net
bp
debt from a ratings perspective – regardless
250 of the expected payout dates, he said.
230 Last Wednesday’s bond came two years
210 AFTERû"AYERSû53BNûACQUISITIONûOFû
190 agrochemicals group Monsanto, which
deal. 170 REQUIREDûAûMAMMOTHûlNANCINGûEFFORTû
However, massive demand allowed leads 150 INCLUDINGûAû53BNû53ûDOLLARûBONDûISSUEû
to tighten 25bp–35bp from IPTs, cutting 130 and a €5bn euro offering.
110
those concessions by more than a half. Less than 12 months after the acquisition,
90
Bayer launched at swaps plus 85bp, "AYERûBEGANûlGHTINGûTHEûLEGALûBATTLESû
70
115bp, 130bp and 145bp, respectively – each around claims that the glyphosate-based
50
€1.5bn in size. Jan Feb Mar Apr May Jun Jul
herbicides produced by Monsanto under the
The new deal from Bayer appeared to gain 2020 brand name Roundup caused cancer.
much greater traction than other recent Source: Refinitiv Ed Clark, Eleanor Duncan

International Financing Review July 4 2020 23

ALL INTERNATIONAL BONDS (1/1/2020–30/6/2020) COUNTRY VS TYPE OF INSTRUMENT
All issues Straights FRNs Convertibles
No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m)
Germany 368 281,178 315 260,501 48 17,106 5 3,571
France 232 219,569 209 202,576 19 14,926 4 2,067
United Kingdom 212 164,031 166 137,117 41 25,717 5 1,197
Spain 75 113,341 65 109,370 8 2,881 2 1,090
Italy 54 107,645 44 103,030 8 3,701 2 914
Luxembourg 112 91,377 100 84,533 11 5,594 1 1,250
Netherlands 86 59,034 80 55,532 4 3,039 2 462
Belgium 25 38,978 24 38,412 — — 1 566
Austria 56 36,982 55 36,928 1 55 — —
Switzerland 37 33,613 32 31,684 2 1,256 3 673
Finland 70 31,623 62 30,909 8 714 — —
Ireland 19 30,755 18 29,605 — — 1 1,150
Sweden 82 27,910 58 25,831 23 2,070 1 10
Norway 40 25,310 28 22,794 11 2,514 1 3
Portugal 6 12,306 6 12,306 — — — —
Denmark 19 10,422 16 8,861 3 1,561 — —
Greece 7 9,763 7 9,763 — — — —
Russian Federation 11 9,756 10 8,506 — — 1 1,250
Romania 2 6,916 2 6,916 — — — —
Turkey 5 5,895 5 5,895 — — — —
Slovenia 5 5,535 5 5,535 — — — —
Slovak Republic 2 4,851 2 4,851 — — — —
Cyprus 5 4,769 5 4,769 — — — —
Hungary 3 4,558 3 4,558 — — — —
Lithuania 2 2,469 2 2,469 — — — —
Croatia 1 2,241 1 2,241 — — — —
Serbia 1 2,128 1 2,128 — — — —
Jersey 8 2,064 5 1,388 3 677 — —
Estonia 2 1,945 2 1,945 — — — —
Czech Republic 6 1,938 6 1,938 — — — —
Poland 2 1,830 2 1,830 — — — —
Ukraine 2 1,783 2 1,783 — — — —
Latvia 2 1,682 2 1,682 — — — —
Belarus 1 1,244 1 1,244 — — — —
Iceland 3 975 3 975 — — — —
Macedonia 1 759 1 759 — — — —
Albania 1 732 1 732 — — — —
Azerbaijan 1 500 1 500 — — — —
Liechtenstein 1 328 1 328 — — — —
Armenia 1 300 1 300 — — — —
Guernsey 1 183 — — 1 183 — —
Kazakhstan 1 164 1 164 — — — —
Europe 1,570 1,359,382 1,350 1,263,185 191 81,992 29 14,204
United States 1,125 1,218,685 897 1,021,458 137 149,796 91 47,431
Canada 113 95,486 93 85,596 14 8,077 6 1,813
North America 1,238 1,314,170 990 1,107,054 151 157,873 97 49,244
Australia 37 27,237 30 21,303 7 5,934 — —
New Zealand 1 66 1 66 — — — —
Australasia 38 27,303 31 21,369 7 5,934 — —
Brazil 14 18,532 14 18,532 — — — —
Mexico 12 16,719 12 16,719 — — — —
Chile 15 10,939 15 10,939 — — — —
Venezuela 6 3,845 5 2,728 1 1,117 — —
Colombia 6 3,783 6 3,783 — — — —
Cayman Islands 9 3,733 8 3,285 1 448 — —
Bermuda 6 3,704 5 3,254 1 450 — —
Panama 2 2,850 1 2,500 — — 1 350
Uruguay 2 2,589 2 2,589 — — — —
Dominican Republic 1 2,475 1 2,475 — — — —
Peru 4 2,183 4 2,183 — — — —
Honduras 4 1,882 3 1,507 1 375 — —
Bahamas 4 1,318 4 1,318 — — — —
Guatemala 1 1,200 1 1,200 — — — —
Paraguay 1 519 1 519 — — — —
Trinidad and Tobago 1 500 1 500 — — — —
Ecuador 2 432 2 432 — — — —

24 International Financing Review July 4 2020

ALL INTERNATIONAL BONDS (1/1/2020–30/6/2020) COUNTRY VS TYPE OF INSTRUMENT CONTINUED
All issues Straights FRNs Convertibles
No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m)

British Virgin Islands (UK) 2 342 2 342 — — — —

Jamaica 1 225 1 225 — — — —
Bolivia 1 99 1 99 — — — —
LatAm/Caribbean 94 77,870 89 75,130 4 2,390 1 350
United Arab Emirates 27 22,655 23 21,770 4 885 — —
Saudi Arabia 9 18,564 8 18,540 1 24 — —
Qatar 22 16,843 19 13,943 3 2,900 — —
Israel 11 15,883 11 15,883 — — — —
Bahrain 6 3,638 5 3,202 1 436 — —
Kuwait 1 1,600 1 1,600 — — — —
Middle East 76 79,182 67 74,937 9 4,245 — —
China 191 82,598 169 74,004 14 5,037 8 3,557
Japan 49 45,377 40 41,202 4 3,720 5 455
Hong Kong 98 36,808 91 33,342 3 1,840 4 1,626
Philippines 29 24,094 28 23,570 1 524 — —
South Korea 49 20,510 39 17,140 10 3,370 — —
Indonesia 18 20,247 18 20,247 — — — —
India 20 11,615 17 10,047 2 568 1 1,000
Singapore 13 7,320 11 5,756 1 564 1 1,000
Malaysia 4 6,525 4 6,525 — — — —
Thailand 5 2,143 4 1,868 — — 1 275
Taiwan 4 1,024 1 144 — — 3 880
Asia-Pacific 480 258,263 422 233,847 35 15,623 23 8,793
Egypt 1 5,000 1 5,000 — — — —
Ivory Coast 20 4,702 20 4,702 — — — —
Ghana 1 2,979 1 2,979 — — — —
South Africa 1 1,250 1 1,250 — — — —
Gabon 1 1,000 1 1,000 — — — —
Nigeria 1 696 1 696 — — — —
Africa 25 15,628 25 15,628 — — — —
Total 3,521 3,131,798 2,974 2,791,149 397 268,057 150 72,591
Source: Refinitiv

ALL INTERNATIONAL BONDS (1/1/2020–30/6/2020) CURRENCY VS TYPE OF INSTRUMENT

All issues Straights FRNs Convertibles
No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m)
US Dollar 1,740 1,810,524 1,449 1,578,214 177 173,234 114 59,076
Euro 1,101 1,122,272 965 1,052,938 119 58,968 17 10,366
British Pound 165 123,496 131 100,555 31 22,449 3 492
Australian Dollar 96 11,675 88 7,465 8 4,210 — —
Swiss Franc 44 9,959 41 9,286 — — 3 673
Norwegian Krone 72 9,633 41 6,771 30 2,859 1 3
Swedish Krona 70 9,466 46 6,500 23 2,956 1 10
Chinese Renminbi 39 6,918 39 6,918 — — — —
Canadian Dollar 15 6,402 8 4,221 4 2,155 3 27
Japanese Yen 21 6,271 13 4,682 3 1,134 5 455
Hong Kong Dollar 52 5,326 49 3,838 — — 3 1,488
New Zealand Dollar 12 2,245 12 2,245 — — — —
Uruguayan Peso 1 1,625 1 1,625 — — — —
Russian Rouble 15 1,261 15 1,261 — — — —
Singapore Dollar 6 733 6 733 — — — —
Polish Zloty 5 722 5 722 — — — —
Indian Rupee 11 613 11 613 — — — —
South African Rand 23 586 22 562 1 24 — —
Indonesian Rupiah 16 511 16 511 — — — —
Danish Krone 3 436 2 369 1 67 — —
Turkish Lira 19 386 19 386 — — — —
Mexican Peso 10 264 10 264 — — — —
Kazakhstan Tenge 1 164 1 164 — — — —
Macau Pacata 1 125 1 125 — — — —
Brazilian Real 5 96 5 96 — — — —
South Korean Won 1 25 1 25 — — — —
Egyptian Pound 1 21 1 21 — — — —
Thai Baht 1 19 1 19 — — — —
Colombian Peso 1 14 1 14 — — — —
Bangladeshi Taka 1 10 1 10 — — — —
Total 3,548 3,131,797 3,001 2,791,149 397 268,057 150 72,591
Source: Refinitiv

International Financing Review July 4 2020 25


Fed bond buying shows preference
for liquid household names
7.27%
Non-US names also in the frame
4HEû&EDERALû2ESERVEûBOUGHTû53MûOFû
53ûCORPORATEûBONDSûINûTHEûSECONDARYû
market during two days in June, revealing
some of the purchase trends markets can
expect from the programme.
bond market were to materially
deteriorate it is willing to buy such bonds,
Belton said.
“Liquidity in the front of the curve isn’t
deep and many of these issues are now
WEEK IN NUMBERS
„ THE YIELD ON UKRAINE’S SEPTEMBER
2032s AFTER IT PULLED A DEAL FOLLOWING
THE SHOCK RESIGNATION OF THE
COUNTRY’S CENTRAL BANK GOVERNOR.
THE YIELD HAD GONE FROM MID-7% TO
7.03% BEFORE GOING BACK UP AGAIN
%
13
12
11
!ûBREAKDOWNûOFûTHEû&EDSûPURCHASESûONû QUITEûSMALLvû#REDIT3IGHTSûNOTED
10
June 16-17 was released on June 28, h7EûHADûTOûSEARCHûTOûlGUREûOUTûWHOû
9
ALONGSIDEûAûBREAKDOWNûOFû%4&ûPURCHASESû some of the issuers are, and we do not
8
showing a preference for safer, highly EXPECTûTHEû&EDûTOûBEûABLEûTOûSOURCEû
7
liquid paper in healthcare, consumer paper in some of these small, off-the-run
6
goods, tech and energy sectors. names, all while limited to the front of
5
4HEû&EDûBEGANûBUYINGû%4&SûINû-AYûANDû the curve.”

02/01/20

02/02/20

02/03/20

02/04/20

02/05/20

02/06/20

02/07/20
individual corporate bonds on June 16
through its Broad Market Index, which NON-US PAPER
allows the central bank to purchase bonds The Broad Market Index requires that
from companies that did not seek ISSUERSûBEûCREATEDûORûORGANISEDûINûTHEû53û
CERTIlCATIONû)NSTEADûTHEû&EDûINVESTSûINûANû
index of bonds.
but drops a requirement from the
CERTIlCATIONûPROCESSûTHATûSAYSûAûCOMPANYû
US$59.78bn
„ THE AMOUNT ISSUED IN THE US
4HEû&EDûCREATEDûITSûOWNûINDEXûWHICHû
FOCUSESûONûSPECIlCûBUYINGûCRITERIAûSUCHûASû
the exclusion of bank paper, only buying
companies that had investment-grade
RATINGSûASûOFû-ARCHûûANDûBONDSûWITHûlVEû
years to maturity or shorter.
53ûPAPERûTOûBEûBOUGHTû
MUSTûHAVEûhSIGNIlCANTûOPERATIONSvû HIGH-YIELD MARKET IN JUNE, SETTING A
ANDûAûMAJORITYûOFûEMPLOYEESûBASEDûINû MONTHLY RECORD FOR THE MARKET
THEû53
The removal of that distinction is likely
TOûLEADûTOûMOREûNON
BYûTHEû&EDûTHANûPREVIOUSLYûTHOUGHTû
US$429m
„ THE AMOUNT OF US CORPORATE
7ITHûTHOSEûCRITERIAûINûMINDûTHEû&EDû &ORûEXAMPLEûTHEû&EDûBOUGHTûTWOû4OYOTAû BONDS THE FEDERAL RESERVE BOUGHT
bought the most debt from AT&T, -OTORû#REDITûBONDSûFORû53Mû THROUGH ITS SECONDARY MARKET
UNITEDHEALTH, ANTHEM, COMCAST and IBM over “While our initial cut named many PROGRAMME ON JUNE 16 AND 17
THOSEûTWOûDAYSûACCORDINGûTOûAû#REDIT3IGHTSû of the large issuers on the list, we excluded IN ITS FIRST DATA RELEASE OF THE
report. many of the big auto players given our PROGRAMME
4HEûMAJORITYûOFûDEBTûWASûBOUGHTûFROMû more stringent reading of the country of
the Triple B bucket, which accounted for RISKûWORDINGvû#REDIT3IGHTSûSAIDû
some 53% of the total purchases.
Another 2% was allocated to high-yield
Double B paper, 42% went to bonds rated
3INGLEû!ûORûHIGHERûANDûûWEREûISSUERSûTHATû
do not have bond sizes that qualify for
either the ICE BofA Index or Bloomberg
h(OWEVERûTHEû&EDûPUTSûTHOSEûNAMESûASû
the largest weights in its index.”
4HEû&EDûPUTûOUTûANûADDITIONALûDOCUMENTû
that highlights a list of eligible issuers
under the programme, of which more
than 82% have a country of risk listed as
US$1.199trn
„ THE US HIGH-GRADE MARKET ISSUANCE
VOLUME FOR THE FIRST HALF, A RECORD
FOR THE FIRST SIX MONTHS OF ANY YEAR.
ISSUANCE IS POISED TO SMASH THE
OVERALL ANNUAL RECORD OF US$1.333trn
)NDEXûACCORDINGûTOû#REDIT3IGHTSû THEû53ûANDûSOMEûûAREûLISTEDûASûNON
53û SET IN 2017
Those allocations are roughly in line
with stated goals of the index but show a
preference for more liquid, household
names in the market, such as MICROSOFT,
BASEDûACCORDINGûTOû#REDIT3IGHTS
Germany accounts for the greatest
NON
53ûEXPOSUREûWITHûNAMESûSUCHûASû
COCA-COLA and MCDONALD’S.
“We’ve been saying for a while that we
53û JUNE 26 AS PART OF ITS CSPP COMPARED
THOUGHTûTHEû&EDûWOULDûBEûFAVOURINGûMOREû
liquid product and it looks like if this trend
continues they will be favouring the safer
stuff and more liquid stuff within the
BAYER, BMW, DAIMLER, and VOLKSWAGEN
eligible for purchase.
5+ûPAPERûISûTHEûSECONDûBIGGESTûNON
category and includes companies such as
BP, DIAGEO, BAT and GLAXOSMITHKLINE followed
BYû3WISSûCOMPANIESûNESTLE, NOVARTIS, ROCHE
and SWISS RE.
€900m
„ THE AMOUNT OF CORPORATE BONDS
THE ECB BOUGHT (NET) IN THE WEEK TO
WITH €1.927bn THE WEEK EARLIER
In total, it has bought €37.524bn
€bn
3.0

index of eligible debt,” said Daniel Belton, The report that was released included 2.5
2.0
VICE PRESIDENTûOFûlXEDûINCOMEûSTRATEGYûATû ALLû3ECONDARYû-ARKETû#ORPORATEû#REDITû
1.5
BMO. &ACILITYûPURCHASESûTHROUGHûTOû*UNEûûANDû
1.0
4HEû&EDûISûALSOûDIGGINGûINTOûILLIQUIDûAREASû THEû&EDûISûEXPECTEDûTOûRELEASEûITSûNEXTû 0.5
of the bond market to purchase riskier report in another 30 days, per 0.0
credits or ones that trade infrequently. Congressional disclosures for a special -0.5
By doing so, it avoids criticism that it purpose funding facility, according to -1.0
May 29

June 5

June 12

June 19

June 26

only supports the largest companies and BMO’s Belton.

shows that if the liquidity situation in the William Hoffman

26 International Financing Review July 4 2020


SSAR
US DOLLARS
EBRD GETS STRONG DEAL DESPITE
RAZOR SHARP PRICING
The EUROPEAN BANK FOR RECONSTRUCTION AND
DEVELOPMENT managed to increase the size of
AûTHREE
YEARûBENCHMARKûBYû53MûLASTû
Tuesday despite pricing the deal at a level
NOTûSEENûSINCEûTHEû#OVIDûCRISISûBEGANûANDûmATû
to fair value.
Interest in the deal appeared to be slow at
THEûSTARTûWITHûTHEûlRSTûUPDATEûSHOWINGûAû
53MûPLUSûBOOKûFORûANûINDICATEDû53BNû
deal. However, demand steadily increased
Being an infrequent issuer and only
needing a small trade worked in favour of
the issuer according to a syndicate banker
away from the transaction.
“They don’t need to come back and they
are the name that does test the tights in the
market generally speaking. They’re always
willing to forgo any momentum in their
deals, so it’s not a big surprise.”
(EûADDEDûTHATûTHEû53ûDOLLARûMARKETûHASû
been incredibly strong with recent pricing
at levels not seen in months.
4HEûPRIORûWEEKSûRAREû-UNIlNû53ûDOLLARû
transaction was brought up as an example,
with the three-year note pricing through
fair value although it trades much wider
than supranational issuers such as EBRD.
“Euros has been completely manipulated
by QE. It’s completely distorted values in the
secondary market,” he said.
BONDS SSAR
EUROS
PORTUGAL DRAWS RECORD DEMAND ON
BUMPER DAY FOR 15-YEAR DEALS
The PORTUGUESE REPUBLIC‘s €4bn October
2035 deal stole the limelight on a busy day
of 15-year issuance last Wednesday, hitting
a record level of demand for its euro
benchmark.
Portugal topped the billing, emerging on
the same day as BNG and the Thuringia,
with demand swelling to €41bn plus,
INCLUDINGûõBNûFROMûJOINTûLEADû
managers beating its previous best order
book set back in April.
The interest enabled the leads CaixaBI,
Credit Agricole, Deutsche Bank, Goldman Sachs,
JP Morgan and Nomura to tighten pricing
WITHûORDERûBOOKSûCLOSINGûABOVEû53BNû h53ûDOLLARSûISûAûFARûMOREûCONSENSUSû CONSIDERABLYû4HEûlNALûSPREADûOFûBPûOVERû
allowing for the upsizing. approach, it’s not as distorted so you can mid-swaps came 4bp inside initial
“It was the only game in town, we did track the market tighter step by step. You guidance.
53BNûONûAû53BNûBOOKûANDûTHEûISSUERû don’t get these massive moves like in euros, h4OûGETûAûlNALûCONCESSIONûOFûBPûITSû
wasn’t looking to tighten by 3bp,” a lead said. which leave you guessing whether investors obviously very tight for a peripheral
h4HEûFACTûTHATûTHEYûWEREûTHEûONLYû33!û will turn up.” credit,” said a lead on the deal. He added
dollar helped focus the market and also
ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS
we’ve not seen a lot of three-years recently
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
ANDûTHEREFOREûHADûAûLOTûOFûOFlCIALû
Managing No of Total Share Managing No of Total Share
institutions.” bank or group issues €(m) (%)
bank or group issues US$(m) (%)
Bookrunners BMO, Citigroup, HSBC and
1 JP Morgan 989 271,368.11 8.8 1 BNP Paribas 291 85,283.06 8.4
Morgan StanleyûSETûTHEûlNALûSPREADûATûBPû
2 Citigroup 772 226,372.05 7.4 2 JP Morgan 240 71,974.06 7.1
over mid-swaps from IPTs of the 7bp area.
3 BofA Securities 799 223,625.62 7.3 3 HSBC 246 64,223.45 6.3
No other supranational has priced a three-
4 Barclays 668 205,923.15 6.7 4 Barclays 224 62,401.76 6.2
year benchmark this tight since January
5 Goldman Sachs 544 163,286.60 5.3 5 Credit Agricole 214 61,462.42 6.1
ACCORDINGûTOû)&2ûDATA
6 HSBC 622 153,612.17 5.0 6 Deutsche Bank 204 56,745.86 5.6
“In the end quality shone through,” said a
7 BNP Paribas 522 145,838.61 4.8 7 SG 178 50,981.85 5.0
second lead.
8 Deutsche Bank 517 139,560.32 4.5 8 UniCredit 190 50,748.75 5.0
“Really the initial IoIs were almost
9 Morgan Stanley 432 134,828.98 4.4 9 Citigroup 166 48,963.20 4.8
entirely high quality and a lot of the growth
10 Credit Agricole 376 94,972.30 3.1 10 BofA Securities 172 47,370.86 4.7
was like that throughout the trade. It was a
Total 3,365 3,069,886.72 Total 1,069 1,011,580.46
very good outcome for a trade that’s priced
Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt,
mATûTOûFAIRûVALUEûANDûISûTHEûTIGHTESTûPRINTû US Global ABS/MBS. US Global ABS/MBS.

we’ve seen post crisis.” Source: Refinitiv SDC code: J1 Source: Refinitiv SDC code: N1

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING JULY 3 2020

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Jun 30 2020 Germany €2.5203bn 0.000 Nov 15 2027 -0.620 2.61
Jun 30 2020 Italy (FRN) €1.25bn 0.187 Dec 15 2023 0.560 1.74
Jun 30 2020 Italy €3bn 1.850 Jul 1 2025 0.680 1.31
Jun 30 2020 Italy €1.292097bn 0.950 Aug 1 2030 1.200 2.07
Jun 30 2020 Italy €2.207903bn 1.650 Dec 1 2030 1.280 1.60
Jul 1 2020 UK £3bn 0.125 Jan 31 2028 0.104 1.84
Jul 1 2020 UK £2.25bn 0.625 Oct 22 2050 0.668 1.68
Jul 2 2020 Spain €1.963bn 0.000 Jan 31 2025 -0.153 1.79
Jul 2 2020 Spain €1.78bn 0.800 Jul 30 2027 0.146 1.58
Jul 2 2020 Spain €2.113bn 1.250 Oct 31 2030 0.451 2.06
Jul 2 2020 Spain (€i) €893m 1.000 Nov 30 2030 -0.361 1.44
Jul 2 2020 France €5.554bn 0.000 Nov 25 2030 -0.09 2.73
Jul 2 2020 France €2.205bn 1.250 May 25 2034 0.110 2.14
Jul 2 2020 France €1.618bn 1.750 Jun 25 2039 0.310 2.51
Jul 2 2020 France €2.371bn 0.750 May 25 2052 0.640 1.82
Jul 2 2020 UK £3.5bn 0.625 Jun 7 2025 -0.033 2.53
Jul 2 2020 UK £2bn 4.500 Sep 7 2034 0.408 2.14
Source: IFR

International Financing Review July 4 2020 27


ECB largesse proves a boon
YEARû
for Germany’s KfW
„ SSAR Funding target cut by €10bn
KFW has slashed its annual funding target by
€10bn after the German development bank took
advantage of ultra-cheap funding offered by the
KfW was doing the pre-funding on the short-time
side and now, in Q3, we start to take liquidity
from the WFS.”
POSITIVE ABOUT YIELD
Dutch agency BNG and the German STATE OF
THURINGIAûJOINEDûINûTHEûACTIONûATûTHEû
part of the curve, with investors’ search for
yield cited as the main factor behind the
deals seeing healthy levels of demand while
improving economics lured issuers to the
tenor.
“After the EIB did their 15-year CAB, we
knew that there was strong demand for
paper in that part of the curve. However, the
spread differential between names like EIB
European Central Bank.
In its mid-year announcement, the issuer said
it had revised its annual funding target down to
€65bn from the previously announced €75bn
after it “expanded its sources of funding in an
extraordinary year”.
KfW participated in the targeted long-term
refinancing of the Eurosystem through TLTRO
III for the first time in June with a volume of
€13.4bn.
The German government guaranteed issuer
joined banks across the eurozone that borrowed
RESTARTING
With some clarity on what its funding needs
now look like for the second half, KfW will finally
return to issuing large benchmarks.
In a typical year, the agency would be in the
market on a regular basis with a benchmark
trade in various currencies. However, it has not
done a large benchmark in a core currency since
April 1 and has instead diversified into Swedish
krona or done small Australian dollar deals.
It has around €29bn left to issue for the
ANDûTHEûLIKESûOFû".'ûWASûJUSTûTOOûMUCHvû
said a DCM banker.
“We’ve seen some decent performance
OVERûTHEûLASTûWEEKûORûSOû3UPRAûNAMESûWEREû
looking overbought and we’ve seen
investors switch into agency names which
have made the levels more tolerable from an
issuer perspective.”
The deals came the day after NRW.Bank
brought 15-year paper, and received a strong
reception for an inaugural social bond that
was more than three times covered.
a record €1.31trn last month under the generous
liquidity scheme.
It was the first tender for the loans which
were offered at even more generous terms than
before, with three-year loans offered as low as
minus 1%.
“When we saw this big task was coming up
with regards to the coronavirus, we looked at
what it meant for KfW, and we teamed up with
the Bund,” said Tim Armbruster, treasurer of KfW
Group.
“We looked at the different measures provided
by the central bank. The TLTRO is nothing new
but here, there was the additional 50bp benefit,
something that didn’t exist in the past. So our
participation was driven from an economic
perspective.”
KfW is also planning to take advantage
of the Economic Stabilisation Fund
(Wirtschaftsstabilisierungsfonds, WSF) set up by
the German federal government.
The issuer plans to draw down up to €30bn
in the third quarter, with the possibility of
borrowing up to €100bn overall, as it looks to
support the German economy.
Armbruster said loan applications under the
programme had reached 70,000, around €50bn,
98.5% of which were for €3m or below.
“The impact of the coronavirus is a special
task beyond our normal business,” he said.
“That’s why the WFS was created and said it
could lend up to €100bn for this special task.
that the long-dated nature of the issuance,
€4bn deal size and large order book made
remainder of 2020, having raised €36bn.
Of that, a big chunk could come from
green bonds with KfW still aiming to issue
up to €8bn in the format. Issuance, though,
will be contingent on the development of the
underlying loan programmes for financing
projects in renewable energy and energy-efficient
construction. It has issued €435m so far.
The issuer also said it would step up its activity
in the US dollar market again.
Petra Wehlert, head of capital markets at the
agency, said it would look at the longer end of
the euro curve once more.
“We still have an important benchmark
outstanding,” she said. “We do usually issue a large
10-year euro every year so that’s one of the projects
we have on our mind for the second half of the year.”
In sterling, the issuer will continue its usual
issuance, but is also looking at doing a debut
trade linked to the Sonia risk-free rate.
“We had planned a sterling Sonia trade for the
second quarter,” Wehlert said.
“However, markets have changed. And also,
there are discussions in the Sonia market on how
to come up with a new calculation methodology,
so we thought we would take a little bit more
time to investigate further.
“From an internal perspective, we are
prepared, but it’s also a function of investor
demand. Especially as the sterling market has
been pretty quiet over the last month.”
Helene Durand
beginning of April, despite the maturity
being more than twice as long.
h&IFTEENûYEARSûRESONATESûWITHûMEvûSAIDûAû
syndicate banker away. “We’ve seen some
really good trades in that part of the curve.”
BNG brought a 0.125% July 2035 euro
benchmark deal that began with initial
guidance of mid-swaps plus 16bp area via
BNP Paribas, Commerzbank, HSBC and Nomura.
Order books in excess of €2.1bn allowed
for 3bp of tightening. The deal landed at
13bp with a 0.155% yield.
Bart van Dooren, head of funding and
investor relations at BNG, said he was pretty
pleased with the outcome, drawing a
comparison to the 15-year deal from NRW.
Bank the previous day.
“They are zero risk-weighted and we as a
bank are not, but we decided to start at the
same point,” said van Dooren.
“Within an hour, we had an order book
that was north of €1.3bn, but we only had
appetite for €1bn, so we moved to plus 14bp.
At pricing we were pleased to move to plus
13bp, which is quite an achievement for a
15-year deal.”
There were two reasons for the choice of
maturity, he added: internal demand for a
longer-dated maturity and the positive yield.
“As well as the increased investor demand
for a positive yield, we are also focusing on
longer-dated funding at the moment due to
the long maturities we are lending to our
Dutch public sector institutions,” said van
Dooren.
Thuringia issued a no-grow €500m
transaction with the 0.1% July 2035 note
SEEINGûAûDECENTûLEVELûOFûDEMANDû&INALûORDERû
for an impressive result. The latest result is given a further gloss when BOOKSûWEREûABOVEûõMûEXCLUDINGûJOINTû
In what was arguably the highlight of recent outlook downgrades are taken into lead manager interest.
THEûDEALûTHEûlNALûSPREADûWASûJUSTûBPû ACCOUNTû30ûANDû&ITCHûCUTûTHEIRûOUTLOOKSûONû Bookrunners DekaBank, Deutsche Bank, DZ
wider than the pricing level for Portugal’s Portugal (Baa3/BBB/BBB) to stable from positive Bank, Helaba, NordLB and UniCredit were able
€5bn October 2027 issuance at the in April. Moody’s maintains a positive outlook. to tighten the spread by 1bp from initial

28 International Financing Review July 4 2020


guidance to land the deal at mid-swaps
plus 8bp, giving a yield of 0.104%.
“Obviously the positive return –
the positive yield – was the key selling
point for investors,” said a lead on
Thuringia.
“After several recent transactions with
shorter maturities up to 10 years, I think
now the time is right to push for a bit of an
extension along the yield curve.”
In the week prior, Laender issuance
included a seven-year note from the City of
"REMENûANDû
YEARûPAPERûFROMûTHEû3TATEû needs, central bank support and
of Berlin, with both deals not fully
subscribed.
“A lot better than recent Laender
trades,” was the verdict from a second
lead. “What made the difference was a
plus yield, and I think that’s why this has
fared better than others which came in
negative territory.”
IMPRESSIVE SOCIAL DEBUT FOR
MORE GERMAN ISSUERS SEIZE
THEIR CHANCE
The state of BADEN-WUERTTEMBERG and the CITY
OF HAMBURG added two more deals on
Thursday to what continues to be a busy
period for German issuance, respectively
bringing a 12-year trade and a tap of a 29-
year note .
There have been eight euro deals from
'ERMANû33!ûNAMESûINûTHEûPASTûTWOûWEEKSû
as pportunistic timing, increased funding
eight-year, Berlin’s 10-year and Bremen’s
seasonality contributed to heightened
levels of activity.
“As we’ve seen in the past week, there’s
headline risk for all deals as well as
geopolitical risk, so the key window is
open at the moment and we’re seeing
issuers use it,” said a banker.
û4HEûmURRYûOFûACTIVITYûCOMESûASû'ERMANû
states and cities raise funds to aid the
country’s response to the coronavirus
BONDS SSAR
BADEN-WUERTTEMBERG FALLS FLAT
Aggressive pricing has been a characteristic
of recent deals in this space, with Baden-
Wuerttemberg’s €1bn no-grow July 2032
ISSUEûJOININGûTHEûLISTûOFûTRANSACTIONSûTHATû
were not fully subscribed.
DekaBank, DZ Bank, JP Morgan, LBBW, TD
and UniCredit priced the deal at 1bp over
mid-swaps, with no movement seen from
initial guidance. It landed at a negative yield
of 0.055%.
Towards the end of June, Hamburg’s
seven-year transactions were all met with
order books below the deal size, suggesting
investors were pushing back on increasingly
tight spreads and negative-yielding deals.
A subsequent move further along the
curve into positive yield territory has seen
more interest, with Tuesday’s inaugural
social offering from NRW.Bank and a
comfortably covered Thuringia note the day
after, both 15-year deals.
NRW.BANK
NRW.BANK made a successful debut in social
bond issuance with a 15-year no-grow €1bn
deal that was more than three times
covered, impressing bankers who had not
expected such a strong reception.
The positive reaction to a longer
maturity illustrated the depth of demand
for that part of the curve and with more

PANDEMICûWITHûJUSTûOVERûONEûMONTHûSINCEû
lockdown measures were eased in the
country.
“There must be a new funding plan by
German Laender,” said another banker,
adding that there are still around 6.5
million Germans receiving short-term
UNEMPLOYMENTûBENElTSûDUEûTOûTHEû
pandemic.
“I think many Laender are observing the
“If you look where Thuringia came ... it
paid a bit more spread,” said the second
banker. “Compared to that, the 12-year
Baden-Wuerttemberg seems a bit expensive
and it’s also not a standard maturity.
“We have the PEPP, which is buying
secondaries, and so while it was not fully
subscribed, it was still a solid trade.”
Heightened levels of issuance are no
doubt in part due to the policy response
YEARû33!ûISSUANCEûSETûTOûFOLLOWûONEû
banker said “duration is coming back”.
“NRW.Bank was a very strong deal,” said
a second banker. “A tier two name in 15-
year; we haven’t seen that much
long-dated supply really apart from the
ODDû&RENCHûAGENCYûANDûSOMEûSOVEREIGNSû!û
lot of the German Laender used to be 15,
20, 30-year issuers but they’re all doing 10s
and shorter.”
market and asking themselves ‘what will from the ECB, with the pandemic
happen if a second wave arrives?’. If this emergency purchase programme
does occur, the market will of course price supplementing the asset purchase
in these risks and spreads would rise again.” programme in buying up public and private
Ongoing uncertainty will keep volatility sector securities.
high until an effective vaccine is Elsewhere, Hamburg ventured into the
developed, and current prices could be as euro market for the second time in less than
good as it gets in the interim, said the two weeks, with a €250m tap of its 0.2%
second banker. 3EPTEMBERûS
“Maybe they are anticipating that these 4HEûNO
GROWûDEALûRATEDû!!!ûBYû&ITCHûWASû
In the week prior, Laender issuance sort of levels are the lowest we will see led by BayernLB, DekaBank, HSBC, Natixis and
included a seven-year note from the City of during the pandemic. And with the TD ANDûLANDEDûATûAûlNALûSPREADûOFûBPûOVERû
"REMENûANDû
YEARûPAPERûFROMûTHEû3TATEû pandemic still going, we still don’t know mid-swaps, tightening 1bp from initial
of Berlin. when this will be over.” guidance.
Books opened for NRW.Bank at mid-
swaps plus 16bp area. The offering saw ALL INTERNATIONAL GREEN BONDS ALL SOVEREIGN BONDS IN EUROS
plenty of interest, with demand topping BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
€3.1bn, excluding leads. Managing No of Total Share Managing No of Total Share
That allowed Credit Agricole, DekaBank, bank or group issues US$(m) (%) bank or group issues €(m) (%)
HSBC and NatWest Markets to tighten by a 1 BNP Paribas 25 4,469.51 7.0 1 BNP Paribas 29 29,228.76 11.1
couple of basis points and land the deal at 2 JP Morgan 25 4,381.71 6.8 2 JP Morgan 40 26,791.43 10.2
14bp. 3 Citigroup 16 3,907.11 6.1 3 Citigroup 23 17,589.57 6.7
4HEûlNALûSPREADûOFFEREDûONLYûAûSMALLû 4 Credit Agricole 18 3,514.27 5.5 4 Barclays 28 15,823.63 6.0
new issue premium of 2bp, according to 5 ING 21 3,257.14 5.1 5 HSBC 16 15,413.47 5.8
THEûlRSTûBANKERûWHOûNOTEDûTHEûHEALTHYû 6 BofA Securities 23 3,138.88 4.9 6 Credit Agricole 17 14,276.63 5.4
looking order books. 7 Barclays 18 3,128.05 4.9 7 SG 16 13,932.02 5.3
Recent deals for Laender had 8 SG 13 2,979.50 4.6 8 BofA Securities 29 13,594.35 5.2
underwhelmed but a third banker was also 9 HSBC 21 2,955.69 4.6 9 UniCredit 9 13,211.29 5.0
impressed, calling it a strong trade. 10 Deutsche Bank 12 2,380.79 3.7 10 Goldman Sachs 16 12,106.66 4.6
“I thought it would go okay given it’s a Total 118 64,276.93 Total 109 263,678.88
social, but I didn’t expect such a response,” Excludes social bonds and mixed use of proceeds. Excluding ABS/MBS.
he said. Source: Refinitiv SDC code: JG1 Source: Refinitiv SDC code: N4

International Financing Review July 4 2020 29

 Order books of more than €370m, “This is what everyone’s been waiting for since The note issue is structured to pay
excluding leads, meant the deal was the initial announcement,” said the banker. step-up coupons, ranging from an initial
comfortably subscribed. “The reason for doing the call now is so 1.15% to a minimum 1.45% from year
“They may also be trying to get deals done everyone has the news pre-summer. They’ve eight. Banca IMI and UniCredit are dealers,
BEFOREûTHEûSUMMERûBREAKvûSAIDûTHEûlRSTû got time to think about it, time to reinstate with Banca Sella and Banca Akros co-dealers.
banker. “Although I’m not sure that there or expand existing credit lines, and do The EUROPEAN FINANCIAL STABILITY FACILITY
will be much of one due to the coronavirus.” whatever they need to do.” (Aa1/AA/AA) is considering a transaction,
The programme, which has a €100bn having sent a request for proposals to
EU SET FOR SURE THING CEILINGûISûSUBJECTûTOûADDITIONALûGUARANTEESû banks on Wednesday.
from member states being in place for 25% A couple of agencies are expected soon,
The EUROPEAN UNION has taken the next step of the overall amount. in the shape of a transaction from
towards launching a loan programme The European Commission, on behalf of NIEDERSACHSEN INVEST and a sustainable
designed to help member states fund THEû%5ûALREADYûOPERATESûTHREEûCAPITALû seven to 10-year euro benchmark from
measures to support the labour market in markets-funded programmes: Balance of AGENCE FRANCE LOCALE.
the wake of the Covid-19 pandemic. 0AYMENTSû%UROPEANû&INANCIALû3TABILISATIONû Niedersachsen Invest, guaranteed by
)SSUANCEûUNDERûTHEûh3UPPORTûTOûMITIGATEû -ECHANISMûANDû-ACROû&INANCIALû!SSISTANCEû ,OWERû3AXONYûHASûSEENûFEEDBACKûCENTREû
5NEMPLOYMENTû2ISKSûINûANû%MERGENCYvûORû 352%ûWILLûBECOMEûTHEûFOURTH AROUNDûTHEûlVEûTOûSEVENûANDû YEARû
352%ûPROGRAMMEûISûSCHEDULEDûTOûBEGINûINû 4HEû%5ûRAISEDûõMûVIAûTWOûBONDûOFFERINGSû maturities, pointing to a potential dual-
3EPTEMBERûBarclays, Deutsche Bank, DZ Bank and in 2019 and has so far in 2020 printed only one tranche outing.
HSBCûONû&RIDAYûANNOUNCEDûAûGLOBALûINVESTORû trade - a €500m 15-year in June. Deutsche Bank, DZ Bank, HSBC and LBBW
CALLûONûBEHALFûOFûTHEû%5ûSCHEDULEDûFORû*ULYû are lead managers for the notes, which are
h4HEREûAREûNOûSPECIlCûDETAILSûREALLYûBUTûITû ITALY LEADS PIPELINE EXPECTEDûTOûBEûRATEDû!!!ûBYû&ITCH
ISûBIGûITûREALLYûISûSIGNIlCANTûSOûTHEREûWILLûBEû While the end of last week was quiet in !GENCEû&RANCEû,OCALEû!A!! ûISû
ATTENTIONûONûJUSTûTHEûFACTûTHEûCALLûISû terms of issuance, there are several deals LOOKINGûTOûTAPûTHEûRAPIDLYûEXPANDINGû%3'û
happening,” said a banker. waiting in the pipeline. market with a debut issue under its newly
352%ûWHICHûWASûlRSTûPROPOSEDûINûEARLYû Topping the bill is ITALY (Baa3/BBB/BBB-/ established sustainability framework via
April, was adopted by the European Council BBBH) with its 10-year July 2030 retail BTP Societe Generale (structuring adviser), Credit
on May 19. &UTURAûWHICHûWILLûBEûPLACEDûTHISûWEEK Agricole and Natixis.

ALL US DOLLAR FIXED-RATE GLOBALS ALL INTERNATIONAL US$ BONDS

BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020 SWISS FRANCS
Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) OLD AND RARE RHAETISCHE
1 JP Morgan 259 89,714.93 11.4 1 JP Morgan 669 184,328.25 10.5
BAHN RETURNS
2 BofA Securities 255 87,132.81 11.1 2 Citigroup 579 162,751.46 9.3
3 Citigroup 228 84,724.10 10.8 3 BofA Securities 595 162,382.74 9.2 Old but rare issuer RHAETISCHE BAHN
4 Goldman Sachs 148 59,429.09 7.6 4 Barclays 380 123,958.77 7.1 GRACEDûTHEû3WISSûFRANCûMARKETûONû4UESDAYû
5 Morgan Stanley 135 49,467.55 6.3 5 Goldman Sachs 414 120,461.14 6.9 WITHûAû3&RMû53M ûNO GROWû
6 Wells Fargo 158 45,782.52 5.8 6 Morgan Stanley 333 103,363.25 5.9 30-year.
7 Barclays 123 41,712.95 5.3 7 Wells Fargo 321 84,064.70 4.8 Guidance came at the 0.05% yield area,
8 Deutsche Bank 85 32,906.17 4.2 8 Deutsche Bank 291 69,333.61 3.9 with an expected 0.05% coupon and par
9 RBC 87 26,703.15 3.4 9 HSBC 270 65,111.98 3.7 reoffer price. It priced at that level, which
10 TD Securities 71 24,094.25 3.1 10 Credit Suisse 261 50,750.52 2.9 was equivalent to mid-swaps plus 29.5bp,
Total 450 787,021.72 Total 1,619 1,757,735.64 ORû3WISSûGOVERNMENTSûPLUSûBP
Including Euro, foreign and global issues. Excluding equity-related debt, !NûALL 3WISSûGROUPûOFûûINVESTORSûWASû
Note: All deals submitted as of 2pm GMT as of Mar 31 2020 US Global ABS/MBS.
Excluding equity-related debt, ABS/MBS. made up of an almost equal split of asset
Source: Refinitiv SDC code: O5 Source: Refinitiv SDC code: O1 managers, insurers and pension funds.

ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%)
1 HSBC 31 10,500.90 12.2 1 JP Morgan 12 5,517.23 9.8 1 UniCredit 36 11,283.47 16.5
2 JP Morgan 26 9,169.86 10.6 2 Credit Agricole 13 5,239.34 9.3 2 JP Morgan 17 4,931.54 7.2
3 Credit Agricole 25 6,740.65 7.8 3 Goldman Sachs 7 4,685.00 8.3 3 Barclays 21 4,835.38 7.1
4 Barclays 18 6,535.15 7.6 4 HSBC 7 4,420.76 7.9 4 DGZ-DekaBank 27 4,317.44 6.3
5 Deutsche Bank 14 5,642.12 6.5 5 BNP Paribas 11 4,317.13 7.7 5 BayernLB 19 4,089.24 6.0
6 BNP Paribas 23 5,413.06 6.3 6 SG 8 4,089.88 7.3 6 Nord/LB 26 3,998.09 5.9
7 BofA Securities 12 5,071.60 5.9 7 Deutsche Bank 9 4,041.09 7.2 7 Deutsche Bank 20 3,957.55 5.8
8 SG 19 4,861.31 5.6 8 BofA Securities 9 3,767.92 6.7 8 HSBC 25 3,626.49 5.3
9 NatWest Markets 13 4,651.06 5.4 9 UniCredit 6 3,751.63 6.7 9 LBBW 15 2,490.57 3.7
10 Natixis 14 4,196.77 4.9 10 Natixis 5 3,323.08 5.9 10 TD Securities 13 2,338.01 3.4
Total 108 86,245.20 Total 41 56,136.18 Total 116 68,222.70
Excluding equity-related debt. Including publicly owned institutions. Excluding ABS/MBS. Excluding ABS/MBS.
Source: Refinitiv SDC code: N6 Source: Refinitiv SDC code: N5 Source: Refinitiv SDC code: N7

30 International Financing Review July 4 2020

 BONDS CORPORATES

The issuer’s only previous public bond In December, the Treasury had forecast are again putting the green bond topic high on
market foray was four years ago, when it ISSUANCEûOFû.:BNûFORûTHEûûlNANCIALû the agenda,” one lead banker said.
ISSUEDûAûDUAL
TRANCHEûTRANSACTIONûnû3&RMû YEARûBUTûRAISEDûITSûPROJECTIONSûDUEûTOûTHEû "OOKSûBUILTûTOû53BNûROUGHLYûHALFûOFû
EACHûOFûû3EPTEMBERûûANDû3EPTEMBERû economic impact of the coronavirus which came from dedicated green investors,
ûPAPERû4HEûNEWûBONDSûCAMEûmATûTOûTHEû pandemic as well as increasing 2020 said Christophe Dugardyn, director of global
CURVEûACCORDINGûTOûAûLEADûOFlCIALû ISSUANCEûBYû.:BNûTOû.:BN capital markets at ING.
The unrated rail transport company, “I was impressed with the quality of the
which dates back to 1895, appointed Credit book and the incremental demand it
Suisse as sole bookrunner, with its local generated,” he said.
CANTONALûBANKû'RAUBUENDNERû+"ûASûCO
LEADû “The level of sophistication, the amount
RhB is 51.3% owned by the government of CORPORATES of critical questions they have formulated
'RAUBUENDENûûBYûTHEû3WISSû
Confederation, 4.6% by private shareholders
and 1% by a collection of local communities.
The bonds came with a federal guarantee.
NON-CORE CURRENCIES
AOFM PLANS NEW TREASURY LINES
US DOLLARS
THREE ISSUERS TEST US DEMAND FOR
GREEN BONDS
4HREEûISSUERSûCAMEûTOûTHEû53ûBONDûMARKETû
over the past two weeks to price a total of
for us during the marketing process has
been astounding and it highlights the shift
we’ve seen from investors as they ramp up
THEIRû%3'ûANALYSISv
4HEûPROCEEDSûWILLûFUNDûGREENûPROJECTSû
outlined in a sustainability report that help
improve water accessibility, water
affordability and water system resilience,
according to a press release.
The AUSTRALIAN OFFICE OF FINANCIAL MANAGEMENT
plans to sell a 30-year Treasury bond
offering next year, according to its latest
issuance plan.
A new 30-year benchmark Treasury
53BNûOFûNEWûGREENûBONDSûINûAûSIGNû
that investor demand is ramping up in the
3TATES
Water technology and parts manufacturer
XYLEM (Baa2/BBB/BBB) was one of the most
WATCHEDûNAMESûASûITSû53BNûTWO
Investors were keen to back the goals as
THEYûAREûINTRINSICALLYûALIGNEDûWITHû8YLEMSû
existing technologies and products that
already address clean water initiatives.
8YLEMûHASûISSUEDûOTHERûGREENûlNANCINGûINû
PARTû THEûPASTûINCLUDINGûAû53MûREVOLVINGû
maturing in June 2051 will be sold in inaugural green bond was the largest ever credit facility with a sustainability-linked
SYNDICATIONûBYû3EPTEMBERûûûSUBJECTû from an industrial name in this market, pricing mechanism in March 2019.
to market conditions. according to leads. While the new green bond offering had
It will also establish new Treasury bond On June 24, bookrunners BNP Paribas, been in the works since 2017, now was a
lines maturing in 2025, 2026, 2031 and 2032 Citigroup, JP Morgan and ING priced a particularly rich time to price the deal amid
BYûSYNDICATIONû4HEû!/&-ûWILLûALSOûCONSIDERû 53MûSEVEN
YEARûATûBPûOVERû an uptick in demand for green notes in the
syndicated taps of long-dated Treasury bond 4REASURIESûANDûAû53Mû
YEARûATûBPû 53û$UGARDYNûSAID
lines. over. It also sets a precedent for other names in
4HEû!/&-ûPLANSûTOûSELLû!BNnBNû 3PREADSûTIGHTENEDûBPûFROMûINITIALûPRICEû the industrial sector and could help other
53BNnBN ûOFû4REASURYûBONDSûBYû thoughts but still gave up a sizeable 23bp issuers understand how they could be
tender most weeks. This week it will offer concession over its outstanding curve due to ELIGIBLEûSAIDû$ANû3HUREYû).'SûVICE

!BNûOFûû-AYûûSûONû7EDNESDAYû market volatility on a day that had average PRESIDENTûOFûSUSTAINABLEûlNANCEûFORûTHEû
ANDû!BNûOFûû!PRILûûSûONû&RIDAY credit spreads trading 4bp wider to 160bp Americas.
Treasury bond issuance totalled over Treasuries, according to ICE BofA data. “It serves as a reminder of how this is
!BNûINûTHEûlNANCIALûYEARûENDEDû*UNEû &ORûEXAMPLEû8YLEMSûûSûWEREû something that is possible for companies
ûû4HEû!/&-ûWILLûUPDATEûGUIDANCEû trading around a G-spread of 115bp on the that are doing a lot of work around
when the Treasury announces its 2020/21 DAYûACCORDINGûTOû)&2ûCALCULATIONSûANDû sustainability.”
budget in October. MarketAxess data.
“There were peaks of Covid-19 cases in the ING AND METLIFE
NZ GOVT SETS OUT ISSUANCE PLANS 53ûWHICHûADDEDûAûBITûOFûHESITANCEûTHEREûABOUTû Even as ING was serving as a bookrunner on
slowing of the market, but many companies THEû8YLEMûTRADEûTHEûBANKûITSELFûWASûINûTHEû
NEW ZEALAND plans to syndicate a new May 15
2041 local currency bond issue in the week ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS
beginning July 13 and tap its April 15 2027 BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
LINEûINû!UGUSTûSUBJECTûTOûMARKETûCONDITIONS Managing No of Total Share Managing No of Total Share
The New Zealand Treasury expects to sell bank or group issues US$(m) (%) bank or group issues €(m) (%)
.:BNû53BN ûOFûGOVERNMENTû 1 BNP Paribas 153 29,492.68 9.6
1 JP Morgan 451 153,677.00 12.5
securities in the year ending June 30 2021, 2 HSBC 112 21,921.11 7.1
2 BofA Securities 435 142,130.32 11.6
according to the funding strategy published 3 Deutsche Bank 89 20,664.67 6.7
3 Citigroup 362 119,585.03 9.8
BYûITSûDEBTûMANAGEMENTûOFlCE 4 Barclays 79 18,580.17 6.0
4 Morgan Stanley 277 96,827.88 7.9
)TûPLANSûTOûRAISEû.:BNnBNûOFûTHEûTOTALû 5 BofA Securities 80 17,407.61 5.7
5 Wells Fargo 257 90,046.16 7.4
FROMûINmATION
LINKEDûSECURITIESû.ETû 6 SG 92 16,220.70 5.3
6 Goldman Sachs 253 89,474.32 7.3
ISSUANCEûISûFORECASTûATû.:BNûACCOUNTINGû 7 Barclays 184 57,561.54 4.7 7 Citigroup 82 15,930.32 5.2
for bond maturities and buybacks. 8 Deutsche Bank 124 40,731.84 3.3 8 JP Morgan 90 15,625.26 5.1
NZGBs on issue are expected to rise to 57% 9 Mizuho 155 36,448.92 3.0 9 Credit Agricole 81 14,449.34 4.7
of GDP for the year ending June 30 2024, 10 HSBC 114 35,110.84 2.9 10 ING 60 10,506.66 3.4
from 31% as of June 30 2020. Total 836 1,224,968.64 Total 319 307,431.51
The Treasury said it has no current plans Excluding equity-related debt. FIGs, ABS/MBS.
TOûISSUEûGOVERNMENTûBONDSûINû%3'ûFORMAT Source: Refinitiv SDC code: F9 Source: Refinitiv SDC code: N8

International Financing Review July 4 2020 31

 Despite some questionable demand in the

Takeda raises US$11bn to primary market, the notes tightened in

secondary and allowed METLIFE to try its hand
at the green space on June 29.

finance Shire acquisition 4HEûINSURERûPRICEDûAû53MûlVE YEARû

green note at 70bp over Treasuries, which
landed the coupon at 0.95%. Books built to
„ CORPORATES Pharmaceutical company adopts dual-pronged strategy for M&A financing 53BNûWITHûNEW
ISSUEûCONCESSIONû
ESSENTIALLYûmATûTOûTHEûOUTSTANDINGûCURVE
Japanese drug maker TAKEDA PHARMACEUTICAL At those levels, the notes gave up some The success of these deals is likely to lead
finalised an US$11bn dual-currency transaction 4bp–8bp of new issue concession over its to more green issuance this year, according
on Monday in order to pay down loans related to curve, where, for example, the 5% 2028s were TOû,EONIEû3CHREVEû).'SûGLOBALûHEADûOFû
its acquisition of biotechnology company Shire. trading at a G-spread of 130bp, according to SUSTAINABLEûlNANCE
The funding package started with a €3.6bn MarketAxess data and IFR calculations. “There are a number of green bond
four-part bond issue in London and concluded Takeda intends the deal to be leverage- mandates in the making and issuance is
with a US$7bn four-part offering in New York.
Bonds will help pay down the US$30.9bn in bank
loans the Japanese pharmaceutical took on as part
of the US$59bn acquisition of London-listed Shire.
The takeover won shareholder approval in
December 2018 and stands to transform Takeda
into a top-10 global pharma company with newly
acquired expertise in rare diseases.
Robust indications of interest encouraged
leads Bank of America and Morgan Stanley to
bring the euro leg out on Monday’s open despite
acknowledging the poorer market tone.
“Marketing, IoIs and feedback were strong, so
we did not need a strong day to go. Monday’s
open was good enough,” said a banker.
Based on pre-announcement comparables,
syndicates started marketing the Japanese
pharma’s (Baa2/BBB+) July 2027s, July 2029s,
July 2032s and July 2040s all roughly 50bp–
55bp back from fair value, although the banker
did note that because of the weakening backdrop
and the deal announcement itself, on Monday it
looked more like 35bp–45bp back.
Takeda was able to tighten spreads by
20bp–30bp through price progression to land
at spreads of mid-swaps plus 105bp, 125bp,
neutral, according to a lead banker on the dollar
leg.
Although the borrower has €4.5bn and
US$2.75bn of bonds due to mature during the
rest of 2020 and 2021, it will repay those with
free cashflow and instead use the proceeds from
the new issue to pay down term loans maturing
in its financial year 2024–25.
“We have significant combined cashflow that
will be directed to de-leveraging rapidly while
maintaining strong liquidity through diversified
funding sources,” said Costa Saroukos, CFO of
Takeda Pharmaceutical on an investor call.
The leverage-neutral aspect of the new deal
is key, as the borrower is still committed to its
deleveraging plan targeting two times net debt/
Ebitda, said the lead banker. In March, leverage
stood at 3.8 times, according to an investor
presentation.
“The affirmation of Takeda’s Baa2 ratings
reflects its being on track to deleveraging as
expected following its transformative Shire
acquisition,” wrote Moody’s analysts ahead of
the deal.
As part of this, the issuer has announced five
asset divestments since April 2019 of around
GROWINGûINûTHEû53vûSHEûSAID
h4HEREûISûDElNITELYûAûGROWINGûDEMANDû
now, despite less regulatory developments
and a political environment that is focused
differently, but you see corporates really
SEEINGûTHEûBENElTSûOFûGOINGûGREENv
EUROS
NEW ISSUE PREMIUMS RISE BUT
CORPORATES RUSH IN
Impending blackouts and a shorter week
drove a number of corporate issuers into the
primary market last week despite investors’
growing price sensitivity.
As names such as crossover credit FIAT
CHRYSLER demonstrated, although the overall
tone was weaker, investors’ persistent
search for yield meant that those names
offering a little extra spread tended to attain
better execution.
“If you are optimistic and have the view
that spreads will continue to compress you
have to look at those sectors that have
150bp and 200bp, paying some 20bp–25bp of
concession, with a book of €7.95bn, down from a
peak of over €8.5bn.
Takeda raised €750m through the seven-year
notes, €850m through the nine-years and a €1bn
each through the 12 and 20-year bonds.
AND STATESIDE
In the US, spreads tightened by 30bp across the
board as order books swelled to US$20bn at
pricing, with most demand in the 10-year part of
the curve where investors saw a greater premium
over the secondary curve.
Bookrunners landed a US$2.5bn 10-year at
145bp over Treasuries, a US$1.5bn 20-year at
US$7.7bn, accelerating the deleveraging process.
The company is targeting divestments of
US$10bn.
Although market conditions have not been
as strong as in previous weeks, they have been
stable enough for issuers to return their attention
to longer-term projects and away from the dash
for liquidity that characterised April and May,
said a DCM banker away from Takeda’s new deal.
“Strong markets in recent weeks have
encouraged anyone with refinancing ahead of
them into the market,” he said.
Wordline, EnBW, Upjohn and Capgemini are
among those that have sold bonds in the euro
market to refinance or pre-finance acquisitions
LAGGEDûINûTERMSûOFûRECOVERYvûSAIDû&RAZERû
Ross, head of investment-grade debt
syndicate EMEA at Deutsche Bank.
“We now have much better data on how
different areas have been affected so
investors can look at those sectors where
spreads haven’t recovered as much and
make a decision about where there is value.”
An active primary market combined with
a poorer overall tone also meant that euro
new issue premiums paid by corporate
borrowers increased substantially.
“We had a soft market end of last week,
and this week’s market will close early due
TOû53ûNONFARMûPAYROLLSûONû4HURSDAYûANDûAû
165bp over, a US$2bn 30-year at 180bp over and recently. 53ûHOLIDAYûONû&RIDAYûSOûPEOPLEûAREûJUSTû
a US$1bn 40-year at 200bp over. Ed Clark, William Hoffman going for it,” said a syndicate banker.

OFFER YIELD, SECURE DEMAND

market on June 24 to price its own green 53BNûSIX YEARûNON CALLûlVEûSENIORûGREENû "ORROWERSûRATEDû3INGLEû!ûTOûTHOSEûSTRADDLINGû
bond. bond at 110bp over Treasuries. the IG/HY divide tapped the market last
Issuing at group holdco level, rated The issuer only gave up some 6bp of new- Tuesday. At the lower end of that spectrum
Baa1/A–/A+, it tightened the spread by 20bp ISSUEûCONCESSIONûASûBOOKSûBUILTûTOûJUSTû &IATû#HRYSLERû!UTOMOBILESû"A"""""n û
from initial price thoughts to land the 53BN brought three tranches, starting spreads

32 International Financing Review July 4 2020

 BONDS CORPORATES

more than 120bp back from fair value by ABSENCE OF ECB CLIPS û)NûûANDûûITûEXPECTSûTRAFlCûTOû
some estimations to ensure successful FRAPORT’S WINGS be 15%–20% below 2019’s peak.
execution.
The strategy proved wise as the yields
needed to land the trade were substantial.
3YNDICATESûPRINTEDûõBNû*ULYûSûATû
3.375%, €1.25bn January 2026s at 3.875% and
€1bn July 2028s at 4.50%.
FRAPORTûTOUCHEDûDOWNûINTOûAûlRMERûPRIMARYû
market last Thursday for a rare bond issue,
but its unrated status and lack of eligibility
for the ECB’s bond buying programmes
subdued price progression and
3IMILARLYû!EROPORTSûDEû0ARISûûSTATEû
ownership helped underpin demand for the
combined €1.5bn 1% January 2029s and 1.5%
July 2032s it sold recently. AdP, however, is
RATEDû3INGLEû!ûBYû30ûANDûWASûTHEREFOREû
eligible for ECB participation. Books for its
&AIRûVALUEûWASûSEENûAROUNDûûûANDû
3.75% by bankers on the deal, although
others argued it could be placed up to 25bp
higher for each tranche.
Although eye-catching, these yields
helped the issuer avoid the collapse in book
bookbuilding.
Buoyant off the back of a continued rally
in equities and positive results from Covid-
19 vaccine trials, the European corporate
primary market improved as the week
progressed.
bonds peaked at €4.25bn.
0ROCEEDSûFROMû&RAPORTSûBONDûISSUEûWILLûBEû
USEDûFORûDEBTûRElNANCINGûASûWELLûASûGENERALû
corporate purposes.
Although it has no outstanding public
benchmarks, the corporate has been an active
sizes seen in some recent corporate deals. At “Recent deals have performed well and 3CHULDSCHEINûISSUERûTAPPINGûTHEûMARKETûATû
the last update the book was around €9.4bn. the relentless performance of the stock least twice last year. As of the start of the year,
The issuer, described by a banker as market is helping,” said a syndicate banker. &RAPORTûHADûõMûOFûDEBTûCOMINGûDUEûINû
“solidly crossover”, targets both investment- However, it appears that the participation 2020, according to an investor presentation.
GRADEûANDûLEVERAGEDûlNANCEûACCOUNTSûBUTû of the ECB is still a key factor in ensuring a 4HEû5+SûNATIONAL GRID ELECTRICITY
the deal was run off IG desks with a distinct smooth execution for corporate borrowers TRANSMISSION (A3/A–/A) also brought a euro
IG execution. looking at the euro market, especially those tranche on Thursday not eligible for either
In a similar vein, MERCIALYS (BBB), the from sectors severely disrupted by Covid-19. THEû#300ûORû0%00ûANDûSIMILARLYûSAWûAûLOWERû
&RENCHûSHOPPINGûMALLûOPERATORûBROUGHTûAû
€300m no-grow July 2027 at IPTs of 5%–
5.25% yield, based on investor feedback, to
allay concerns surrounding the sector. Leads
were able to cut this down to 4.875% on a
book in excess of €725m.
“The fact that deals are being marketed in
yield terms at the moment gives you a sense
'ERMANûAIRPORTûOPERATORû&RAPORTû
demonstrated as much, when it moved the
SPREADSûONûITSû*ULYûSûANDû*ULYûSûJUSTû
10bp from IPTs of mid-swaps plus 220bp
area and 260bp area.
h3OMEûOFûTHEûDEALSûRECENTLYûHAVEûSHOWNû
the importance of the ECB,” said a second
banker. “If you don’t have the support, then
book size than other deals.
The €750m of July 2032s were announced
at IPTs of 115bp–120bp over mid-swaps and
landed at 90bp with a book of around
€1.8bn. The utility also tapped the sterling
market with a £350m July 2028 tranche sold
at 110bp over Gilts.
of what investors are looking for and where
we are,” said the banker.
Pre-announcement comparables such as
the issuer’s 1.787% March 2023s and 1.8%
&EBRUARYûSûWEREûBIDûATûYIELDSûOFûû
and 4.267%.
Although all of Mercialys’ shopping
centres had opened by May 11, as with the
wider sector, footfall has been greatly
reduced by the global spread of Covid-19
causing retail-focused REITs to fall out of
favour with bond investors.
Alongside the new bond the company is
running a tender offer on its 1.787% March
SOMETIMESûYOUûJUSTûHAVEûTOûCHEAPENûUPû
close your eyes and hope it goes well.”
4HEûlNALûBOOKûUPDATEûSHOWEDûORDERSû
north of €1bn, with a skew to the seven-
year. The two tranches were sized at €300m
and €500m, respectively, and the spreads at
210bp and 250bp.
&RAPORTûDOESûBENElTûFROMûBEINGûNEARLYû
one-third owned by the state of Hesse,
lending the issuer an element of implied
support that would have helped demand
given the hard impact of Covid-19 on the
sector.
)NûMID
REAL ESTATE HITS THE SPOT
Hitting all the right notes in terms of real
estate exposure, logistics-orientated LOGICOR
(BBB) and residential-focused VONOVIA (BBB+)
each brought deals on the same day.
“I think, if you ask investors where they
want to go in real estate, its either
residential or logistics,” said a third banker.
“Which, of course, isn’t to say they won’t
touch others, but they are their favourites
for sure.”
Books for Vonovia’s July 2026s and July
2030s closed above €5.7bn, with the issuer
*UNEû&RAPORTûANNOUNCEDûITûWASû deciding to take an evenly split €1.5bn.
2023s. cutting up to 4,000 of its workforce and that 3PREADSûWEREûSETûATûBPûANDûBPûOVERû
ISS, also rated BBB, was in the market with ITûEXPECTEDûTRAFlCûVOLUMESûTHISûYEARûTOûBEû mid-swaps, erasing any new issue premium
€500m no-grow July 2025s, setting the 30%–40% of normal and be down by 50% in from IPTs, according to bankers.
spread on the deal at 170bp, in from IPTs of
ALL INV-GRADE US CORPORATE BONDS ALL INVESTMENT-GRADE BONDS IN EUROS
200bp–205bp and offering a single-digit
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
premium according to bankers.
Managing No of Total Share Managing No of Total Share
Although the guarantor of the new bonds
bank or group issues US$(m) (%) bank or group issues €(m) (%)
ISû$ANISHûPARENTû)33û'LOBALûTHEûNEWûNOTESû
1 BofA Securities 64 15,814.73 11.4 1 BNP Paribas 236 75,639.06 8.4
WEREûISSUEDûVIAûTHEû$UTCHûSUBSIDIARYû)33û
2 JP Morgan 68 15,303.23 11.1 2 JP Morgan 194 64,427.80 7.2
&INANCE
3 Morgan Stanley 45 13,501.79 9.8 3 HSBC 211 59,430.78 6.6
RTEûTHEû&RENCHûELECTRICITYûTRANSMISSIONû
4 Citigroup 42 8,576.80 6.2 4 Credit Agricole 192 55,795.54 6.2
company, was the only A rated name to
5 Barclays 34 8,537.96 6.2 5 Barclays 177 55,153.16 6.1
enter Tuesday’s euro corporate market,
6 Wells Fargo 47 8,009.33 5.8 6 Deutsche Bank 168 49,266.39 5.5
bringing deals due in July 2032 and July
7 Goldman Sachs 33 7,062.46 5.1 7 SG 160 48,749.88 5.4
2040.
8 Mizuho 26 4,949.98 3.6 8 UniCredit 161 46,796.59 5.2
4HEûBONDSûTHEûISSUERSûlRSTûSINCEû
9 MUFG 25 4,772.32 3.5 9 Citigroup 123 41,643.58 4.6
3EPTEMBERûCAMEûATû)04SûOFûTHEûBPûANDû
10 HSBC 13 4,231.86 3.1 10 BofA Securities 143 41,241.65 4.6
135bp area, but the credit quality of the
Total 139 138,161.94 Total 893 898,220.64
utility stood it in good stead with investors,
Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Excluding ABS/MBS, equity-related debt.
allowing it to price the €500m and €750m and non corporates.
tranches at spreads of 77bp and 110bp. Source: Refinitiv SDC code: F6a Source: Refinitiv SDC code: N9

International Financing Review July 4 2020 33

 The momentum behind Logicor’s €500m Investor demand was strong, with orders
no-grow July 2026s proved similarly strong, peaking at over €2bn at guidance, though books
with leads taking in the spread to 185bp closed slightly lower at more than €1.9bn.
from 220bp IPTs, landing with a 0bp–1bp “We’ve had some successful trades from
premium. issuers in the aerospace sector, including
Airbus,” said the lead.
ITALIAN CROSSOVER CREDITS FIND “It shows the defence sector is still seen as
FAVOUR WITH INVESTORS strategic, although it has been under
pressure because of the coronavirus crisis.”
Two crossover Italian credits entered the Leonardo suspended its full-year guidance
corporate bond market last Wednesday, as for 2020 in the aftermath of the coronavirus
investors continue to dial up risk in the face crisis, and said it was too early to assess the
of yield compression. impact of the pandemic, according to an
They placed some €1.9bn in orders for INVESTORûPRESENTATIONûSEENûBYû)&2
aerospace company LEONARDO‘s no-grow Coronavirus has had an impact on the
õMû
Proceeds from the deal will help take out
a €1.5bn bridge facility due March 2022,
according to a lead on the trade.
Investors placed €4.25bn in orders for the
deal, allowing leads to launch the bond at
220bp over mid-swaps, cutting the spread
from IPTs of 260bp–270bp.
The best comparable was Cellnex, which
carries the same rating, said the banker.
Cellnex’s most recent 2027s were seen
trading at 200bp over.
h;)NWIT=ûISûPRINTINGûJUSTûBPûOUTSIDEûOFû
that despite being smaller, a debut, and less
geographically diverse,” said the second
banker. “I personally think they are paying
YEARûANDûTOWERûlRMû
INFRASTRUTTURE WIRELESS ITALIANE saw demand
of €4.25bn for its debut €1bn six-year bond.
“Any concerns we’ve had a couple of
months ago for Italian credit is behind us,”
said a lead on Leonardo.
That deal was launched at 290bp over
mid-swaps, 40bp tighter than initial price
thoughts of the 330bp area. The company
has a €600m 1.5% June 2024 bond seen bid
pre-announcement at 218bp, and €500m
4.875% March 2025s seen bid at 246bp,
according to Tradeweb.
ALL CORPORATE BONDS IN STERLING
BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of
company’s production, programme execution
and deliveries, according to the presentation.
However, the company said it had
mitigating actions and recovery plans
already in place.
Proceeds from the bond will be used to
RElNANCEû,EONARDOSûEXISTINGûDEBT
Leonardo has no pressing funding needs
but decided to take advantage of the
favourable market conditions, according to
a source at the company.
h7EûHAVEûAûSMALLûAMOUNTûTOûRElNANCEû
this year and about €750m in 2021,” said the
source. “We have more than €5bn liquidity
on our hands, including the €2bn revolving
credit facility we secured in May.”
Leonardo carries Ba1/BB+/BBB– (stable/
Total Share
no new-issue premium.”
Global coordinators BNP Paribasû"$ ûANDû
Mediobanca were initially looking at a
€500m–€750m bond, but demand allowed
them to upsize the transaction to €1bn.
“As a debut trade, it’s a strong
achievement to get €1bn done. They had a
€4.25bn book, which is quite a tough thing
to achieve in this market,” said a banker
away from the deal.
More than 80 investors were involved in the
roadshow. Inwit marketed a six to seven-year
transaction. It ended up plumping for the six-
year, as there was no strong investor preference
and the tenor is seen as a good inclusive
maturity for a debut issuer, said the lead.
Tower assets are seen as providing steady
bank or group issues £(m) (%) STABLENEGATIVE ûRATINGSûFROMû-OODYSû30û returns to investors at a time of uncertainty
ANDû&ITCH due to the coronavirus emergency.
1 Barclays 21 2,566.72 14.6 The company could soon lose its last h&ORûAûNEWûNAMEûINûAûDIFFERENTûCOUNTRYû;TOû
2 HSBC 20 2,211.94 12.6 INVESTMENT
GRADEûRATINGû&ITCHûREVISEDûITSû Cellnex] but in the same operational sector,
3 NatWest Markets 17 1,562.22 8.9
outlook to negative in May, citing its view it offers rare value play which is one of the
4 BNP Paribas 14 1,490.31 8.5
THATû,EONARDOSûCASHmOWSûOVERûTHEûNEXTû reasons we’ve seen strong response from
5 JP Morgan 9 1,480.43 8.4
12–24 months are likely to come under investors,” said the banker away.
6 Citigroup 8 1,016.71 5.8
material pressure as a consequence of the Inwit, which has a €9bn market
7 RBC 9 901.03 5.1
Covid-19 pandemic. capitalisation, is now 33% owned by Vodafone
8 Goldman Sachs 5 819.96 4.7
Europe and 30% owned by a partnership of
9 Lloyds Bank 7 720.56 4.1
INWIT LANDS DEBUT Telecom Italia and a consortium led by private
10 Santander 8 652.14 3.7
Elsewhere, Infrastrutture Wireless Italiane equity group Ardian.
Total 40 17,623.98
"""""nû30&ITCHûBOTHûSTABLE ûLANDEDûITSû The company was upscaled after
Source: Refinitiv SDC code: N8a debut bond, a €1bn six-year. Vodafone agreed in July 2019 to fold its
mobile tower assets in Italy into Telecom
ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS INCLUDING
Italia subsidiary Inwit.
EXCLUDING SECURITISATIONS SECURITISATIONS
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
SSE HYBRID REFIS CAPITALISE ON
Managing No of Total Share Managing No of Total Share
RESILIENT DEMAND FOR YIELD
bank or group issues £(m) (%) bank or group issues SFr(m) (%)
1 NatWest Markets 56 10,567.36 12.1 1 Credit Suisse 85 10,911.7 32.0 5+ûENERGYûUTILITYûSSE brought fresh hybrid
2 HSBC 59 10,404.22 12.0 2 UBS 64 7,317.4 21.5 capital to the euro and sterling primary
3 Barclays 62 9,460.54 10.9 3 Verband Schweiz 15 5,084.5 14.9 MARKETSûLASTû-ONDAYûTOûRElNANCEûUPCOMINGû
4 RBC 30 7,302.38 8.4 4 Zuercher KB 39 4,814.4 14.1 calls, demonstrating that a chunky yield is
5 Citigroup 23 5,580.77 6.4 5 Raiffeisen Schweiz 26 2,421.4 7.1 enough to overcome market softness and
6 Lloyds Bank 21 5,567.27 6.4 6 Deutsche Bank 9 1,357.6 4.0 lure investors to higher-beta instruments.
7 BofA Securities 23 4,914.22 5.6 7 Basler KB 7 501.0 1.5 h4OûBEûHONESTûCREDITûMARKETSûFEELûlNEû
8 BNP Paribas 20 4,642.59 5.3 8 Commerzbank 4 373.2 1.1 We were not really looking at the equity
9 Deutsche Bank 18 4,432.84 5.1 9 BNP Paribas 5 365.4 1.1 markets,” said a banker on the trade.
10 TD Securities 16 3,462.48 4.0 10 Luzerner KB 1 180.0 0.5 “In addition, for assets with such large
Total 139 86,988.71 Total 136 34,054.6 spreads, there is basically an extra cushion
Including preferreds. Excluding equity-related debt.
Including preferreds. Excluding equity-related debt. naturally built in to absorb wider market
Source: Refinitiv SDC code: K05a Source: Refinitiv softness.”

34 International Financing Review July 4 2020

 BONDS FIG

While credit markets proved strong This being said, the company is also
ENOUGHûFORû33%ûTOûBRINGûITSûNEWûTRADEûTHEû
cost of raising subordinated debt has ticked
up in recent weeks.
4HEûAVERAGEûYIELDûONûTHEûI"OXXû%52û.ONû
&INANCIALSû3UBORDINATEDû)NDEXûWASûABOVEû
2.75% at the start of last week, compared
YEARû+ANGAROOûISSUEûWASûSOLDû
COMMITTEDûTOûREDUCINGûCASHûOUTmOWSûTOû NON-CORE CURRENCIES
mitigate against the effects of Covid-19,
aiming for a £250m reduction in 2020/21. DEUTSCHE BAHN STEAMS AHEAD
Railway company DEUTSCHE BAHN@Sû!Mû
YEN 53M û
WITHûûONû*UNEûûACCORDINGûTOû2ElNITIVû entirely to investors in Japan, according to
data. TOYOTA INDUSTRIES PRICES ABOVE PAR distribution statistics.
!GAINSTûTHISûBACKDROPû33%ûBROUGHTûAûEUROû The bonds were priced at par last
PNC7 and a sterling PNC5.75, offered Japanese industrial vehicle and textile Wednesday to yield 1.987%, equivalent to
initially at yields of the 3.25% area and machinery manufacturer TOYOTA INDUSTRIES 113bp over asset swaps and 105.9bp over
3.875%–4%.
Leads were able to squeeze the levels
DOWNûTOûûANDûû&INALûDEMANDû
was around €785m and £1bn.
The tranches were sized at €500m and
inquiries, following Deutsche Bahn’s
£600m and proceeds will be used to
RElNANCEûBONDSûDUEûTOûBEûCALLEDûLATERûTHISû
YEARûANDûINûEARLYûû33%ûHASûAûaMû
3.875% subordinated bond with an
PRICEDûAûBONDûISSUEûABOVEûPARûONû&RIDAYûAû the May 2030 ACGB.
very rare event in Japan’s domestic Life insurers took 57.5%, banks 37.5%
market, as a way to keep the yield positive and other insurers 5%.
while paying a minuscule coupon. The deal arose from investor reverse
4HEûcBNû53M ûOFûûTHREE
year bonds were priced at 100.002 for a recent investor roadshow focusing on Asia
yield of 0.0003%, according to a banker on and Australia.
the deal. $EUTSCHEû"AHNû&INANCEûISûTHEûISSUERû4HEû
The deal from A2/A+/AA bonds are guaranteed by Deutsche Bahn,
upcoming call in October, followed by a call -OODYS302) ûRATEDû4OYOTAû RATEDû!A!!nû-OODYS30 ûWHICHûISû
date in April 2021 for its €600m 2.375% Industries provides a fresh example ûOWNEDûBYûTHEû&EDERALû2EPUBLICûOFû
hybrid. that yields on domestic corporate bonds Germany.
have become razor-thin but that many Proceeds were swapped into euros and
YEARNING FOR YIELD *APANESEûINVESTORSûAREûSTILLûREJECTINGû will be used by the issuer to increase its
Although demand for riskier assets has been negative yields. lNANCIALûmEXIBILITY
UNDERMINEDûBYûmARE
UPSûINûCASESûOFû#OVID
û Nomura was bookrunner, with SMBC Daiwa, HSBC and RBC Capital Markets were
ACROSSû%UROPEûANDûTHEû53ûMANYûINVESTORSû
are still looking to pick up yield where they
can.
YEARû
“Whether markets are soft or not, credit
investors are still looking for yield because
there really isn’t much out there, so, on that
basis, anything higher yielding should go
Nikko, Mitsubishi UFJ Morgan Stanley and JOINTûBOOKRUNNERS
Mizuho acting as lead managers.
$OMESTICûYIELDSûUPûTOûTHEûlVE
sector have been under pressure since the
Bank of Japan expanded its corporate bond
purchases. FIG
Prior to Toyota Industries, the last
DOWNûlNEvûSAIDûAûBANKERûAWAYûFROMû
Monday’s deal.
At IPTs, the spread offered by both the
euro and sterling hybrids was around 250bp
OVERû33%SûSENIORûDEBT
corporate bond issue sold above par was a
three-year note offering from Toyota US DOLLARS
&INANCEûLASTû/CTOBERû4HEûDEALûCAMEûWITHûAû
0.001% coupon and was priced at 100.003 EUROPEAN BANKS TEST US APPETITE
for a yield of around zero, according to FOR TIER 2 PAPER
&AIRûVALUEûFORûBOTHûLEGSûWASûHARDûTOû $EAL7ATCHû)&2SûSISTERûPUBLICATIONûINû
calculate, according to bankers, but hybrid Japan. DEUTSCHE BANK and SOCIETE GENERALE seized
ISSUESûFROMû%NELû"AA""" ûANDû3UEZû"AA û 4HOUGHûMANYûINVESTORSûREJECTûCORPORATEû their chance last week to raise Tier 2
were suggested for the euros and hybrids bonds with negative yields, some buy them to CAPITALûINûAûBUOYANTû53ûPRIMARYûMARKETû
from National Grid (Baa1/BBB+/BBB+) for the SELLûTOûTHEû"O*ûATûAûPROlTû4HEûCENTRALûBANKûLASTû where subordinated bank paper has grown
sterling. month bought corporate bonds of up to three in popularity among an investor base on
The additional safety of a utility issuer, YEARSûATûnûmATûTOûGOVERNMENTûBONDS the hunt for yield.
coming from one of the least volatile
ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION
corporate sectors, helped to underpin
BOOKRUNNERS: 1/1/2020–30/6/2020 BONDS (ALL CURRENCIES)
demand for an otherwise higher-beta
product. Managing No of Total Share BOOKRUNNERS: 1/1/2020–30/6/2020
bank or group issues €(m) (%) Managing No of Total Share
“We like utility hybrids at the moment
1 Credit Agricole 41 11,979.75 10.2 bank or group issues US$(m) (%)
precisely because the issuers are very high
2 SG 29 8,923.07 7.6
quality and well rated, but obviously the 1 Citigroup 19 3,584.57 12.5
3 Natixis 22 6,904.43 5.9
hybrids offer us spread,” said an asset manager. 2 JP Morgan 16 2,455.76 8.6
4 JP Morgan 38 6,889.57 5.9
33%ûRATEDû"AA"""ûATûTHEûSENIORûLEVELû 3 Credit Agricole 9 2,438.77 8.5
5 Deutsche Bank 33 6,822.69 5.8
expects the new subordinated debt to be 4 BofA Securities 15 2,414.46 8.4
6 BNP Paribas 26 6,600.89 5.6
RATEDû"AA"""nûANDûBOTHû-OODYSûANDû30û 5 HSBC 14 2,089.98 7.3
7 Barclays 27 6,499.07 5.5 6 Barclays 12 1,781.89 6.2
will award the new hybrid capital 50%
8 UniCredit 26 4,760.48 4.0 7 Morgan Stanley 11 1,523.13 5.3
equity credit.
9 HSBC 30 4,673.93 4.0 8 UBS 7 1,370.45 4.8
Coupons on the new bonds are
10 BofA Securities 24 3,368.86 2.9 9 Goldman Sachs 8 1,190.07 4.1
cumulative if deferred and will have to be
Total 188 117,610.23 10 NatWest Markets 5 1,008.94 3.5
paid should the borrower pay a dividend,
THEûCONTINUEDûPAYMENTûOFûWHICHû33%ûHASû Including banks, insurance companies and finance companies. Excluding Total 40 28,684.24
equity-related and covered bonds. Excluding publicly owned institutions.
INDICATEDûISûAûKEYûOBJECTIVE Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a

International Financing Review July 4 2020 35

 Even so, the two European banks banker, who noted that this spread 4HATûSENTIMENTûISûREmECTEDûINûAVERAGEû
elicited different responses from buyside differential has been slowly tightening high-grade bank spreads, which at 128bp
accounts who appeared to make a clear over the past few months from an average over as of Tuesday, were some of the
distinction between the two credits. of around 200bp across the European bank lowest sector spreads in this space,
)Nû3OCIETEû'ENERALESûCASEûTHEû&RENCHû
BANKûGARNEREDûAû53BNûORDERûBOOKûFORûAû
53Mû
YEARûNON
CALLûû4IERûûBONDû
with Baa3/BBB–/BBB ratings.
The spread tightened some 10bp
space.
Even so, it was a different story for
Deutsche Bank, the troubled German
lNANCIALûINSTITUTIONûTHATûHASûBEENû
undergoing a restructuring process to
according to ICE Bank of America data.
Indeed, more European banks may take
advantage of that backdrop.
“They want to get in the market before
53ûBANKSûBRINGûTHEIRûTHIRD
QUARTERûSUPPLYvû
through price progression to land at 300bp IMPROVEûPROlTABILITY SAIDû$AVIDû+NUTSONûHEADûOFûCREDITûSTRATEGYû
over Treasuries, which was 175bp inside ,IKEû3OCIETEû'ENERALEû$EUTSCHEû"ANKû FORû3CHRODERS
WHEREû5NI#REDITûLANDEDûAûLOWERûRATEDû reached up the curve to price Tier 2 capital “Now is the time to fund and build
(Baa3/BB+/BB) 15-year non-call 10 Tier 2 the THROUGHûAû53Mû
YEARûNON
CALLûû capital because winter is coming and that
week before. lXED
TO
mOATûBONDûWITHû"A""""û ISûWHENûYOULLûlNDûQUALITYûDETERIORATIONû
At the same time, the bank also raised a ratings that came at 525bp over Treasuries and it will be harder and more costly to
53MûlVE
YEARûSENIORûPREFERREDûBULLETû on Monday. source Tier 2 and Tier 1 capital.”
(rated A1/A/A) at 115bp over Treasuries,
tight to IPTs of 125bp–130bp, with an APPEASEMENT
53MûORDERûBOOK 4HEûBANKûWASûSEENûAPPEASINGû53ûINVESTORSû EUROS
4HATû3OCIETEû'ENERALEûOPTEDûFORûAû
with the 11NC10 format, which is more
YEARûRATHERûTHANûTHEûPERPETUALûNON
CALLûlVEû COMMONûFORûDOMESTICûISSUERSû.ON
53û UNIQA SCOOPS ACQUISITION,
FORMATûTYPICALLYûUSEDûBYû53ûBANKSûALSOû banks typically prefer the 10NC5 or GREEN FINANCING IN DOUBLE DEBUT
spurred demand for the deal. 15NC10 format to optimise Tier 2
h"ANKSûAREûlNDINGûTHATûTOûBEûAû eligibility, which falls off with less than Rare Austrian issuer UNIQA INSURANCE GROUP
marketable part of the curve,” said Dan lVEûYEARSûTOûMATURITY RAISEDûlNANCINGûFORûAûhTRANSFORMATIONALvû
"RUZZOûMANAGINGûDIRECTORûOFûBANKûlNANCEû
at broker dealer Amherst Pierpont.
“There is a complete absence of 10-year
SUBSûFROMû53ûBANKSû4HEREûISûAûLOTûOFû
pent-up demand from investors to own
that type of paper.”
Despite the structural concession, the
spread failed to budge from IPTs and found
little support at that level on the break,
where the bond traded below par at a
weighted average of 99.766 on Tuesday,
according to MarketAxess data.
acquisition with an inaugural senior issue
ANDûSIMULTANEOUSLYûSOLDûITSûlRSTûGREENûBONDû
in a dual-pronged offering on Thursday.
The deal, which comprised a €600m 10-
year senior unsecured tranche and a €200m
October 2035 non-call 2025 green Tier 2
3OCIETEû'ENERALEûLANDEDûTHEûDEALûSOMEû “The fact that they are trading wider TRANCHEûWASû5NIQASûlRSTûAPPEARANCEûINûTHEû
90bp wide to its senior curve, said a today suggests the market still has a primary market since 2015.
problem with that name and they are The senior unsecured was marketed with
ALL SAMURAI BONDS forcing Deutsche to pay top premium initial price thoughts of mid-swaps plus
BOOKRUNNERS: 1/1/2020–30/6/2020 dollar to issue into this market,” Bruzzo 200bp area, before guidance was set at
Managing No of Total Share said. 170bp area. The spread was subsequently set
bank or group
1 Sumitomo Mitsui
2 Mizuho
3 Credit Agricole
4 Nomura
5 Daiwa Securities
6 Mitsubishi UFJ MS
Total
Excluding equity-related debt.
Source: Refinitiv
ALL GLOBAL AND EUROMARKET YEN BONDS
BOOKRUNNERS: 1/1/2020–30/6/2020
issues ¥(m) (%) h&ORûTHEMûTOûISSUEû4IERûûPAPERû at 160bp on the back of a book in excess of
6 81,250.00 44.4 investors are demanding a premium, and €3.3bn (pre-rec).
3 20,350.00 11.1 even at that level they priced at it doesn’t The green Tier 2 tranche was marketed
3 20,350.00 11.1 seem there is a lot of demand in the with IPTs of mid-swaps plus 435bp area,
3 20,350.00 11.1 secondary on the follow.” before guidance was set at 390bp.
3 20,350.00 11.1 Both deals priced against a positive It was ultimately launched at 370bp
3 20,350.00 11.1 backdrop for credit, including banks, with the book in excess of €2bn (pre-rec)
6 183,000.00 which are still largely considered low risk by leads HSBC, JP Morgan and Raiffeisen Bank
among investors willing to reach down the International.
SDC code: K11 capital structure. Bankers said demand was boosted by
5NIQASûRARITYûINûTHEûMARKETûANDûTHEûFACTûITû
ALL INTERNATIONAL YEN BONDS
offers a pick-up versus many more
BOOKRUNNERS: 1/1/2020–30/6/2020
established issuers.
Managing No of Total Share Managing No of Total Share 5NIQAûHASûONLYûTWOûBONDSûOUTSTANDINGûAû
bank or group issues ¥(m) (%) bank or group issues ¥(m) (%)
€350m 6.875% Tier 2 issued in 2013 and a
1 Mizuho 7 109,441.67 24.5 1 Sumitomo Mitsui 11 134,216.67 21.3 €500m 6% Tier 2 issued in 2015.
2 Goldman Sachs 2 60,275.00 13.5 2 Mizuho 10 129,791.67 20.6 "ANKERSûSAIDûITûWASûDIFlCULTûTOûPINPOINTû
3 Sumitomo Mitsui 5 52,966.67 11.9 3 Goldman Sachs 2 60,275.00 9.6 fair value for the new issue given its sub-
4 JP Morgan 1 48,875.00 10.9 4 Mitsubishi UFJ MS 6 53,816.67 8.5 benchmark size and the relative illiquidity
5 BofA Securities 1 48,875.00 10.9 5 JP Morgan 1 48,875.00 7.8 of the bonds.
6 Mitsubishi UFJ MS 3 33,466.67 7.5 6 BofA Securities 1 48,875.00 7.8 The 6.875% July 2043 non-call 2023s
7 Nomura 3 27,833.33 6.2 7 Nomura 6 48,183.33 7.7 were bid at 338bp at Thursday’s open and
8 BNP Paribas 1 12,500.00 2.8 8 Credit Agricole 5 32,100.00 5.1 its 6% July 2046 non-call 2026s at 391bp,
9 MUFG 1 12,500.00 2.8 9 Daiwa Securities 4 28,683.33 4.6
ACCORDINGûTOû4RADEWEBûlGURESû
10 Credit Agricole 2 11,750.00 2.6 10 MUFG 1 12,500.00 2.0
&AIRûVALUEûFORûTHEûSENIORûTRANCHEûWASû
Total 10 446,550.00 Total 16 629,550.00
JUDGEDûTOûBEûAROUNDûBPûBASEDûONûTHEû
Excluding equity-related debt. Including preferreds. Including all Euro, foreign and global issues. Excluding equity-related
debt.
secondary levels of similarly rated senior
Source: Refinitiv SDC code: K10 Source: Refinitiv SDC code: K12 bonds from other insurers.

36 International Financing Review July 4 2020

 BONDS FIG

EXPANSION GENERALI READIES GREEN TIER 2 WAKEûOFûTHEûANNOUNCEMENTûOFûAûMAJORû

The senior tranche of the deal is aimed at transfer of bad loans from Italy’s BANCA MONTE
RAISINGûlNANCINGûFORû5NIQASûACQUISITIONûOFû GENERALI is readying its second green bond DEI PASCHI DI SIENA.
#%%ûSUBSIDIARIESûOFû!8!û'ROUPûINûAûõBNû and launching a second round of tender !MCOûANNOUNCEDûONû&RIDAYûTHATûITûHASû
DEALûANNOUNCEDûINû&EBRUARYû offers on its subordinated debt, in an exercise mandated JP Morgan and UBS as global
It therefore stands out among the recent partly aimed at reducing its interest costs. coordinators along with Equita, Morgan
mOODûOFûSUPPLYûFROMû%UROPEANûINSURERSû
which has in large part been focused on
bolstering issuers’ capital positions amid
the uncertainty of the coronavirus
pandemic.
h!USTRIANûlNANCIALSûAREûSTRATEGICALLYûVERYû
focused on their connectivity with the CEE
ûWILLûBEûLAUNCHEDûINûCONJUNCTIONûWITHû
The Italian insurer has mandated Bank of
America, Barclays, Citigroup, Deutsche Bank,
Mediobanca and Natixis for the 11-year deal,
which is expected to be launched in the
near future.
The new issue - Generali’s second green
BONDû
The mandate comes after Banca Monte
Stanley, Societe Generale and UniCredit as
bookrunners to arrange a series of investor
calls starting on Monday.
A single or dual-tranche euro benchmark
senior unsecured offering with short to
intermediate maturities may follow.
REGIONûANDûTHISûTRANSACTIONûISûDElNITELYû a tender offer for three of its subordinated DEIû0ASCHIûDIû3IENAûLASTû-ONDAYûAPPROVEDûAû
TRANSFORMATIONALûFORû;5NIQA=ûINûTERMSûOFû SECURITIESûALLûWITHûlRSTûCALLûDATESûINûû PLANûTOûOFmOADûõBNûOFûBADûLOANSûTOû!MCO
expanding their international and The size of the issue and the aggregate Amco, which is 100% owned by the Italian
particularly their CEE footprint,” said a
banker close to the deal.
5NIQAûSAIDûINû&EBRUARYûTHEûACQUISITIONûOFû
the companies in Poland, the Czech
2EPUBLICûANDû3LOVAKIAûWOULDûINCREASEûITSû
amount of notes tendered are expected to be
capped at €600m. Priority will be given to
the 7.75% Tier 2 notes due for call in
December 2022, of which €984m is
outstanding.
-INISTRYûOFû%CONOMYûANDû&INANCEûISûRATEDû
""""""nû30&ITCH û"OTHûOFûTHEûRATINGSû
AGENCIESûVIEWSûREmECTûTHEûEXPECTATIONûTHATû
the Italian government would support Amco
IFûITûWEREûINûlNANCIALûDISTRESS
CUSTOMERSûBYûlVEûMILLIONûITSûPREMIUMSû It is the second such transaction launched "OTHûAGENCIESûAFlRMEDûTHEûRATINGSûAFTERû
written by €800m and its employees by BYû'ENERALIû)Nû3EPTEMBERûTHEûINSURERû THEû-03ûTRANSACTIONûWASûANNOUNCEDû
around 2,100. bought back €1bn of the same three 2022 The new issue will be Amco’s second euro
4HEû4IERûûTRANCHEûnûTHEûlRSTûGREENû notes and issued a €750m green bond. BENCHMARKûDEALû)TûSOLDûITSûlRSTûLASTû/CTOBERû
subordinated transaction from an insurer in “The transaction aims to achieve a more PRINTINGûAûõMûLONGûlVE
YEAR
THEû'ERMANY!USTRIA3WITZERLANDûREGIONûnû BALANCEDûMATURITYûPROlLEûANDûREDUCEû That 1.375% January 2025 deal was bid at
INAUGURATESû5NIQASûGREENûBONDûFRAMEWORKû interest costs in future years,” said Generali BPûOVERûSWAPSûATû&RIDAYSûOPENû
4HEûBONDûRAISESûlNANCINGûFORûINVESTMENTû #&/û#RISTIANOû"OREANû according to Tradeweb.
in eligible assets relating to renewable
energy, pollution prevention and control,
clean transportation and sustainable water
and wastewater management.
“The issuance of the group’s second green
bond represents another important step in
FULlLLINGûTHEûGROUPSûSUSTAINABILITYû
commitments.”
Raymond Tam, senior European
!MCOûSAIDûTHEûTRANSFERûOFû-03SûBADûLOANSû
which is awaiting ECB approval, will
accelerate its growth and strengthen its role
in the Italian non-performing exposure
market, increasing its assets under
MATURITIES MULTIPLY INSURANCEûANALYSTûATû#REDIT3IGHTSûCALCULATEDû management by 35% versus 2019.
The 15.25-year non-call 5.25 structure also that the exercise will reduce Generali’s &ORû-03ûTHEûSALEûWILLûSIGNIlCANTLYûDE
RISKû
TAKESûADVANTAGESûOFûCHANGESûINû30Sû annual interest costs by up to €47m. its balance sheet. Its gross NPE ratio is
insurance methodology that allows issuers “It would appear the current purchase forecast to fall from 12.4% to 4.3%.
to use shorter call periods and still get equity premiums are more attractive than the -03ûWHICHûWASûBAILEDûOUTûBYûTHEû)TALIANû
credit for their capital trades. previous tender, which ranged around 1.5 government in 2017, is now exploring
h3OûTHEûDEALûISûSTILLû30
COMPLIANTûANDû percentage points, which is why we think it
obviously doing something in this format
produces a more attractive yield for the
issuer,” said the banker close to the deal.
The shift is prompting European insurers
to diversify away from the 30-year non-call
10 structure they have typically used for sub
debt.
HANNOVER RE on Monday issued a €500m
20-year non-call 10 Tier 2.
Leads Deutsche, JP Morgan, Societe Generale
merger options, including a potential tie-up
would be wise for bondholders to tender,”
said Tam.
Tam said the purchase price for the 7.75%
Tier 2 provides the most attractive
premium, of around 2.65 points over the
bond’s mid-price.
“At best, we think Generali has room to
launch one more buyback for these
expensive 2022 subordinated notes as the
total outstanding remaining after this
with Banco BPM, according to Reuters. The
government has promised the European
Commission it will re-privatise the bank
next year.
Amco is also taking a €2bn portfolio of
NPEs from Banca Popolare di Bari.
SWISS FRANCS
and UniCredit opened books for the €500m
no-grow October 2040 non-call 2030
transaction with initial price thoughts of
mid-swaps plus 225bp area.
Guidance was set at 200bp–205bp, before
TENDERûWOULDûBEûJUSTûSHYûOFûõBNvûHEûSAIDû
“However, we are not expecting a future
buyback exercise to be as generous as we
NEARûTHEIRûlRSTûCALLûDATESûINûv
The tender offer expires on July 6.
VALYO GETS FIRST PLATFORM
BOND DONE
4HEû3WISSûlNANCIALSûWEEKûWASûCAPPEDûOFFûONû
&RIDAYûWITHûTHEûlRSTûDEALûFROMûNEWûBONDû
THEûSPREADûWASûlXEDûATûTHEûTIGHTûENDûOFûTHATû
RANGEûWITHûTHEûlNALûBOOKûSTANDINGûATû
€1.45bn.
On Thursday, CCR RE announced investor
calls ahead of a potential €250m–€300m 20-
year non-call 10 transaction.
“These structures are probably going to
multiply,” said a syndicate banker away
FROMû5NIQASûDEALû
YEARûONû&RIDAYûMORNINGûWITHûGUIDANCEûATû
The transaction comes shortly after
Generali said it had agreed to buy 24.4% of
smaller rival Cattolica Assicurazioni.
AMCO READIES SENIOR RETURN
AMCO ASSET MANAGEMENT COMPANY, the Italian
government-owned “bad bank”, is preparing
its second benchmark bond offering, in the
International Financing Review July 4 2020
issuance group ValyoûBILLEDûASûTHEûlRSTû
European deal to be issued off a platform
where issuers put in their proposed bonds at
AûSPREADûLEVELûANDûCANûADJUSTûTHEûRESULTûTOû
optimise spread or size.
The issuer was RAIFFEISEN SCHWEIZ, which set
up Valyo and is its main shareholder. Books
OPENEDûFORûAûMINIMUMû3&RMû53M û
TWO
37
mid-swaps plus 60bp–65bp, closing after little
MOREûTHANûTWOûHOURSûWITHû3&RMûPRICINGûATû
plus 64bp. The coupon and yield were 0%.
4HEûLEVELûPUTûTHEûBONDSûmATûTOû2AIFFEISENSû
Caixa, Sparebanken Vest
curve, and the bonds went to the usual
crowd of banks, asset managers, insurers
show ESG pricing perks
and pension funds.
Insurer BALOISE HOLDING had kicked off the „ FINANCIALS/COVERED BONDS Social aspect adds to execution certainty
3WISSûWEEKûWITHûAûDUAL
TRANCHEûSENIORû
unsecured domestic public deal. A trio of new issues from banks highlighted the Leads ABN AMRO, Credit Agricole,
Books opened on Monday for a long six-year pricing advantage of ESG issuance in a slowing Commerzbank, DZ Bank and LBBW marketed the
(December 2026)at mid-swaps plus 66bp–68bp market last week, as CAIXABANK sold an inaugural €500m no-grow mortgage Pfandbrief with initial
and long 10-year (December 2030) at 74bp– Covid-19 bond and SPAREBANKEN VEST BOLIGKREDITT guidance of mid-swaps plus 8bp area.
BPûBOTHûINûMINIMUMû3&RMûSIZESû made its green covered debut. Guidance was revised to 6bp area (+/–1bp),
&INALûTERMSûSAWû3&RMûANDû3&RMû Most of the major currency deals brought to the before the spread was fixed at 5bp with the final
price at the wide end of guidance, putting market or added to the pipeline by financials last book standing above €950m.
BOTHûTRANCHESûmATûTOûTHEûISSUERSûCURVEû
ACCORDINGûTOûAûLEADûOFlCIAL
4HEûBONDSûPERFECTLYûP RElNANCEû"ALOISESû
UPCOMINGû3&RMûREDEMPTIONûDUEûONû
October 10.
Credit Suisse and UBS WEREûJOINTû
week were green or social bonds. Bankers said the
timing could partly be explained by the relatively long
preparation time that goes into ESG deals, meaning
issuers get to them later in their annual funding plan.
“But also, if you’ve got a green deal to do it
makes sense to do it when markets are perhaps
Berlin Hyp was deemed to have paid a new issue
concession of about 1bp over its secondary curve.
Bankers highlighted that as being an
impressive outcome at such tight spread levels,
in particular given covered bond premiums have
been rising in recent weeks.
BOOKRUNNERSûWITHû".0û0ARIBASû3UISSE ûASû
co-manager.
"ALOISEûISûRATEDû!nûSTABLEûBYû30ûANDû
2AIFFEISENû3CHWEIZûISûRATEDû!ûBYû-OODYSû
not as frothy, as it can support execution certainty
that bit more,” said a DCM banker.
“We’ve hit July 1, there’s a big rally behind us,
so it makes sense to see these deals now.”
BERLIN HYP came to market on Tuesday with an
eight-year green covered bond issue.
Bankers suggested the additional green
demand will have been important in allowing
Berlin Hyp to secure the 5bp level while still
building a well oversubscribed book.
“Even if you deduct the order you would
expect from the central bank, the book stands

COVERED BONDS Coming from a bank in the CPT structure’s #04ûCOVEREDSûAREûDElNEDûINûTHEû

homeland of the Netherlands, the decision
underlines the reversal in fortunes of the
EUROS product since a change in its treatment by the
European Central Bank, and rating methodology
NN REWARDED FOR BULLET changes that have decreased its appeal.
Netherlands as covered bonds with an
extension period longer than 24 months, with
EXTENSIONSûOFûUPûTOûûYEARSûPOSSIBLEû3OFTû
bullets, much more widely used and accepted,
typically feature a 12-month extension.
STRUCTURE SWITCH
NN BANKûISSUEDûITSûlRSTûSOFTûBULLETûCOVEREDû
bond on Tuesday, ditching the conditional
pass-through (CPT) structure for a more
&OLLOWINGûINVESTORûCALLSûONû-ONDAYûLEADSû
BNP Paribas, ING, LBBW, Rabobank and
UniCredit opened books for a €500m (no-
grow) 10-year soft bullet with guidance of
the mid-swaps plus 20bp area.
NN Bank said the new soft bullet
programme will allow further
DIVERSIlCATIONûOFûITSûINVESTORûBASEûANDû
ENHANCEûITSûmEXIBILITYûWITHûRESPECTûTOûTENORS
!NûOFlCIALûATûTHEûBANKûELABORATEDûTHATûTHEû
“future-proof” product, and making clear
THEûPRICINGûADVANTAGEûITûENJOYS
..û"ANKûISûTHEûlRSTûCOVEREDûBONDûISSUERû
to switch from CPT covereds to bullets for
public issuance, having set up a €7.5bn soft
bullet programme in June alongside its
4HEûSPREADûWASûSUBSEQUENTLYûlXEDûATûBPû
WITHûTHEûlNALûBOOKûSTANDINGûABOVEûõBN
The new issue was priced some 10bp
inside NN Bank’s CPT curve. The bank’s
û3EPTEMBERûSûWEREûTRADINGûATû
24.5bp, mid, on Tuesday, according to
depth of the market for soft bullet covered
bonds is much greater than for conditional
pass-throughs.
“The bank intends to be a regular issuer,
so we see that the soft bullet market is
perhaps a more future-proof market for our
existing €5bn CPT programme. 4RADEWEBûlGURES FUTUREûISSUESûOFûCOVEREDûBONDSvûSHEûTOLDû)&2
“There was always a question mark as to “We still have some CPTs outstanding,
ALL COVERED BONDS (ALL CURRENCIES) whether their existing curve would hold and they’re doing well – we’re very happy
BOOKRUNNERS: 1/1/2020–30/6/2020 them back, but this went really well,” said a with those. But we think the soft bullet
Managing No of Total Share DCM banker away from the deal. market provides a more sustainable
bank or group issues US$(m) (%) CPTs have underperformed other platform for covereds going forward.”
1 Credit Suisse 22 8,606.06 7.2 structures in recent months. Their spreads It is expected that NN Bank will no longer
2 Barclays 39 8,355.15 7.0 remain elevated while most the market has issue from its CPT programme.
3 BNP Paribas 29 6,645.45 5.5 closed in on pre-Covid-19 levels. Issuing soft bullets will allow the bank to
4 HSBC 30 6,443.20 5.4 On June 9, Dutch bank Achmea sold a issue longer-dated covereds, which will
5 Credit Agricole 25 6,191.15 5.2 õMûlVE
YEARûnûTHEûONLYû#04ûBENCHMARKû better match its growing mortgage loan
6 Commerzbank 24 5,180.80 4.3 since October – at 24bp. book.
7 Natixis 23 5,012.83 4.2 Bankers said NN Bank paid a new issue The CPT product had steadily gained
8 ING 22 4,666.30 3.9 concession of 1bp–2bp, based on the soft acceptance since its inception in 2013, and
9 NatWest Markets 15 4,050.06 3.4 bullets of fellow Dutch issuer De Volksbank. was adopted by issuers from Portugal to
10 Santander 16 3,889.30 3.2 h3OûITûWASûMISSIONûACCOMPLISHEDûINûTERMSû Australia, although some investors refused
Total 140 119,971.10 of anchoring it with more established soft to participate due to misgivings over the
Source: Refinitiv SDC code: J15a bullet peers,” said a lead banker. structure.

38 International Financing Review July 4 2020


nicely on its own two feet,” added a syndicate
banker at one of the leads.
Also supportive was a recent tender
offer for four of Berlin Hyp’s shorter-dated
covered bonds, in which the German lender
repurchased a combined €303m of the
securities.
The proceeds of the deal will be used
to finance the acquisition, construction or
refurbishment of green buildings.
BACK ON THE TABLE
CaixaBank and Sparebanken Vest Boligkreditt
followed on Wednesday.
Books were opened for CaixaBank’s six-
year non-call five transaction with initial price
thoughts of 150bp area.
Leads CaixaBank, HSBC, ING, Natixis and
UniCredit then set guidance at 120bp area
(+/–3bp) and fixed the size at €1bn, before
launching the deal at 117bp.
The final book topped €2.8bn, having
peaked above €3.35bn.
“It is a bit better than some of the trades
last week, where we saw more minimal
oversubscription,” said a syndicate banker. “It’s
nice to see €3bn books are back on table.”
The deal – CaixaBank’s first senior issue with a
callable maturity structure – was priced roughly
flat to the bank’s conventional senior preferred
curve. Its 1.125% March 2026s were bid at 118bp at
Wednesday’s open, according to Tradeweb figures.
Issuers typically have to pay 5bp–10bp
additional premium versus bullets to issue a
callable maturity.
Sparebanken Vest’s leads Credit Suisse, ING,
LBBW, Natixis, SEB and Swedbank marketed the
€500m no-grow deal with initial price thoughts
of mid-swaps plus 15bp area.
Guidance was revised to 12bp area (+/–1bp),
before the spread was fixed at 11bp. Books were
last reported around €1bn.
Fair value for a conventional seven-year
Sparebanken Vest covered bond was about 11bp,
based on the issuer’s secondaries.
Bankers suggested the additional ESG
demand was one of the key drivers of the deals’
tight pricing – alongside the high quality of the
issuers and a slowing pace of issuance.
“Take the Caixa deal, which offers a decent
spread, is a good name and has the social angle,”
said the DCM banker. “Everything points to
investors, quite rightly, differentiating a bit more
at this point in cycle.
BONDS COVERED BONDS
“The big rally is behind us, the summer slowdown is
ahead, and investors don’t need to chase every deal.”
The proceeds of CaixaBank’s deal will be
used to provide financing to micro-enterprises
and SMEs to mitigate the economic and social
impacts of Covid-19 in the most economically
disadvantaged regions of Spain.
CaixaBank’s €4bn portfolio of assets eligible
for its social bond programme includes €1.7bn of
new loans granted to address Covid-19 pandemic
issues, as at the end of May.
The deal is expected to be rated Baa1/BBB+/
A–/A (Moody’s/S&P/Fitch/DBRS).
Sparebanken Vest’s deal, which followed
investor calls held on Tuesday, inaugurates the
Norwegian issuer’s green bond framework.
The proceeds of bonds issued under the
framework will be allocated to new and existing
mortgages for energy-efficient residential and
commercial buildings in Norway and loans to
renewable energy projects.
Further ESG supply is in the pipeline. South
Korea’s Kookmin Bank is preparing its first
sustainable covered bond, following a €500m
social covered for Korea Housing Finance last
Monday (seeing Emerging Markets).
Tom Revell

&ROMûûTHEû%#"ûJOINEDûTHOSEûINVESTORSû The DCM banker said that and other CHOOSESûTOûCONVENEûAûFOLLOW
UPûADJOURNEDû
excluding CPTs from its purchase programmes, factors means at least some issuers are likely meeting.
and the product’s spread has halted. to stick to their CPT programmes. 3KIPTONûNEEDSûATûLEASTûûOFûVOTESûINû
3OFTûBULLETSûINûCONTRASTûAREûELIGIBLEûFORû “It comes down to each bank,” he said. favour, with a minimum two-thirds of
the ECB’s purchases. “Would they have rating stability for soft bondholders required to participate in the
Analysts at Commerzbank said NN Bank’s bullets, do they need that extra investor lRSTûMEETINGûANDûONLYûONEûTHIRDûNEEDEDûFORû
switch underscores a broader shift in the DIVERSIlCATIONv ANYûADJOURNEDûMEETING
perception of the CPT product in recent
years, driven mainly by the ECB’s treatment.
They noted that industry representatives
ûCOVEREDûBONDSû4HEûlRSTûMEETINGûDIDû
have reopened a debate about the treatment
h4HEREûISûDElNITELYûAûPRICINGûBENElTûBUTû )Nû-AYû43"û"ANKûLAUNCHEDûAûSIMILARû,IBORû
there is also a cost of operating multiple TOû3ONIAûCONSENTûSOLICITATIONûFORûITSûaMû
programmes – so is it worth it?” 
not achieve a quorum but consent was
of CPT bonds with the central bank, seeking ACHIEVEDûATûTHEûADJOURNEDûMEETINGûWHEREûAû
to highlight their importance. STERLING FORWARDûADJUSTMENTûSPREADûOFûBPûWASû
“Yet new CPT programmes for use in the ADDEDûTOûTHEûADJUSTEDûMARGIN
benchmark segment are barely launched SKIPTON SEEKS CONSENT FOR 3KIPTONûALSOûANNOUNCEDûTHEûRESULTSûOFûAû
ANYûMOREûTHESEûDAYSûANDûWITHûTHEûlRSTû
departure of an issuer like NN Bank, pass-
through structures are likely to remain
CONlNEDûTOûAûNICHEûPRODUCTûINûTHEûLONGERû
term,” they said.
However, bankers said Achmea’s deal
earlier this month – albeit in a stronger
market – showed a space still exists for CPTs.
The €500m deal attracted more than €2.8bn
of demand.
They also argued CPT programmes could
still suit the needs of less frequent issuers,
FORûWHOMûmEXIBILITYûONûTENORSûISûLESSû
important.
COVERED SWITCH TO SONIA tender offer on its £350m 1.75% 2022 senior
unsecured bonds last week.
SKIPTON BUILDING SOCIETY has announced a It is buying back £283.424m of the notes.
consent solicitation proposal to switch its
£400m 2018-1 covered bond from Libor to
3ONIAûNatWest Markets is the solicitation
agent.
The deadline for votes is July 20, and the HIGH-YIELD
bondholder meeting will follow on July 23,
when pricing to the new benchmark is
slated to take place. US DOLLARS
The bond matures in May 2023 and
currently pays 31bp over three-month Libor. ISSUANCE SURGES, SPURS RECORD JUNE
3KIPTONûPROPOSESûTOûCHANGEûTHEûCOUPONûTOû
CPTs were invented to provide issuers
with greater rating stability. As covered
rating methodologies have changed in the
past seven years, that need has declined. But
the argument is still relevant to some banks,
in Greece or Italy, for example.
COMPOUNDEDûDAILYû3ONIAûWITHûANûADJUSTEDû
MARGINûOFûBPûPLUSûTHEû,IBORûVERSUSû3ONIAû
interpolated basis.
!NûEXTRAûSPREADûnûTHEûFORWARDûADJUSTMENTû
nûCANûBEûADDEDûBYû3KIPTONûIFûITûDOESûNOTû
ACHIEVEûCONSENTûATûTHEûlRSTûMEETINGûANDû
International Financing Review July 4 2020
High-yield corporate borrowers printed a
record amount of debt in June ahead of the
summer bond market slowdown and as
concerns over a resurgence of Covid-19 cases
prompt companies to lock in liquidity while
they can.
39
 *UNEûSUPPLYûINûTHEûJUNKûBONDûMARKETû Corporate leverage ratios are expected to “We have seen an incredible rebound in
ended on Tuesday with four deals climb from already elevated levels and high- retail demand and dealer demand since
contributing to a monthly record of yield default rates are expected to climb into early May across all our businesses.”
53BNûSURPASSINGûTHEûPREVIOUSûRECORDû the double digits. Bookrunners JP Morgan, Goldman Sachs and
SETûINû3EPTEMBERû “On the one hand it’s a concern, but on Bank of Montreal took advantage of this
Borrowing costs are at their lowest level the other it is actually needed for this positive swing to issue the debut bond,
since early 2018, according to MarketAxess’ scenario we’re in right now,” said Hayes. “I WHICHûWILLûREPAYûINûFULLûTHEû53Mû
high-yield bond index. The average yield on do think [issuance] is probably going to slow outstanding on a term loan facility and be
THEûINDEXûISûATûJUSTûûDOWNûFROMûAûHIGHû down into the second half.” used for general corporate purposes.
of 9.70% in April. This is creating more of a sector focus Leads priced the bonds at 6.25%, the tight
That has helped encourage a surge in among high-yield investors as the longer- end of price talk of 6.25%–6.5%. That had
borrowing as companies look to plug term economic impact of the Covid-19 been tightened from initial thoughts of
CASHmOWûNEEDSûCAUSEDûBYûTHEûDROPûOFû become clearer. 6.5%–6.75%.
revenues during the Covid-19 pandemic as “The post-Covid environment is going to 30ûRATEDûTHEûNEWûNOTESû""ûANDûMOVEDû
WELLûASûRElNANCEûDEBT be very different,” said Parmi Chadha, high- THEûOUTLOOKûONûTHEûlRMSû"ûCORPORATEû
7ITHûMARKETSûSTABILISEDûBYû&EDERALû yield portfolio manager at Newton rating from negative to positive.
Reserve bond purchase programmes, issuers Investment Management. “We are not in the “Evidence increasingly suggests
of both high-yield and investment-grade camp of everything going back to normal. consumers perceive RV travel as an effective
corporate bonds are taking advantage while Certain business models are going to be way to practice social distancing and
they can. A resurgence of Covid-19 cases and fundamentally impacted. vacation during the Covid-19 pandemic,”
upcoming second-quarter earnings raise the “A lot of companies’ capital structures, the agency said.
potential for volatility in credit markets especially in the high-yield space, may not “In contrast to previous recessions when
down the road. be sustainable in the mid to long term.” RV demand dropped precipitously on very
“A lot of companies are gearing up now to HIGHûUNEMPLOYMENTû30û'LOBALû2ATINGSû
anticipate any other turmoil that might take WINNEBAGO BOLSTERS LIQUIDITY AS believes RV demand may grow at least over
place over the next weeks, months and VACATIONERS TAKE TO THE ROADS the next few months as new buyers entering
quarters,” said Manuel Hayes, senior the market offset very high
PORTFOLIOûMANAGERûOFû-ELLONSû%FlCIENTû"ETAû WINNEBAGO INDUSTRIESûRAISEDû53MûINûAû unemployment.”
&ALLENû!NGELSûSTRATEGY debut bond issue on Tuesday, as the The company’s net debt-to-Ebitda ratio
Issuance since the pandemic took hold recreational vehicle maker seeks to WASûXûATûTHEûENDûOFûTHEûTHIRDûlSCALû
has been characterised by an increase in RElNANCEûDEBTûANDûLEVERAGEûAûPICK
UPûINû QUARTERû#&/û"RYANû(UGHESûSAIDûONûTHEû
secured debt as companies dangle collateral SOCIALûDISTANCINGûVACATIONSûINûTHEû53û recent earnings call, up from a previous
to incentivise investors. The eight-year non-call three secured target range of 0.9x–1.5x.
0RIORûTOûTHEûPANDEMICûONûAVERAGEûlVEû BONDûOFFERINGûWASû7INNEBAGOSûlRSTûINûTHEû 30ûEXPECTSû7INNEBAGOûTOûBEûABLEûTOûKEEPû
secured bonds were priced each month, high-yield corporate bond market and came LEVERAGEûINûTHEûXnXûRANGEûINûlSCALû
making up roughly 20% of issuance, after a bruising quarter during which 2020 and 2021, below the 5x threshold to
according to a report by Moody’s on production was shut down. maintain its B+ corporate rating.
Tuesday. )TûREPORTEDûANû53MûLOSSûFORûTHEûlSCALû Including the new bond and term loan
In April and May, 46 secured tranches of third quarter on June 25, compared with repayment, Winnebago is expected to have
notes were issued by 41 companies, OPERATINGûINCOMEûOFû53MûINûTHEûSAMEû 53MûOFûTOTALûLIQUIDITYûADEQUATEûFORû
constituting 57% and 40% of April and May quarter last year. the next 12 months, even in a low revenue
issuance, respectively, the agency said. Excluding the results of Newmar, which ENVIRONMENTûACCORDINGûTOû30
Investors have had to balance company was acquired in November 2019, consolidated
liquidity needs and collateral coverage REVENUEûOFû53MûWASûDOWNû SHALE DRILLER CHESAPEAKE FILES
against predictions of when economic But the company resumed manufacturing FOR BANKRUPTCY PROTECTION
activity will return to some kind of normal in early May and, despite the severe
to help them service their debt. economic impact of the Covid-19 pandemic, Bonds issued by CHESAPEAKE ENERGY are now
demand for RVs is expected to pick up as JUSTûWORTHûAûFEWûCENTSûONûTHEûDOLLARûAFTERûTHEû
ALL US$ DENOMINATED HIGH-YIELD BONDS Americans look for socially distant ways of oil and gas company and fracking innovator
BOOKRUNNERS: 1/1/2020–30/6/2020 ENJOYINGûAûVACATIONûTHISûYEAR lLEDûFORû#HAPTERûûBANKRUPTCYûPROTECTIONû
Managing No of Total Share The company’s backlog for motorhomes on June 28.
bank or group issues US$(m) (%) increased 99.2% in units compared with the Bond investors had long expected the
1 JP Morgan 181 26,616.71 12.2
prior year during the quarter as demand company to seek court protection as it
2 BofA Securities 171 21,037.08 9.7
rebounded. struggled with a heavy debt load amid a
3 Citigroup 134 16,497.82 7.6 Company executives said on a June 24 slump in energy prices this year.
4 Goldman Sachs 133 15,401.41 7.1 earnings call they were seeing an increase in Most of the company’s bonds have been
5 Barclays 127 14,946.93 6.9 DEMANDûFROMûlRST
TIMEûBUYERSûINûTHEûSECTOR trading at cash prices of around 3–4 cents on
6 Morgan Stanley 85 11,687.05 5.4 “All recent and current indicators signal a the dollar after the company skipped
7 Wells Fargo 102 11,271.64 5.2 very strong recovery for outdoor recreation 53MûOFûINTERESTûPAYMENTSûDUEûONûTWOû
8 Deutsche Bank 104 10,166.87 4.7 product demand is in process this summer,” of its bonds on June 15.
9 Credit Suisse 101 10,010.23 4.6 said CEO Michael Happe on the earnings call. 4HEûSHALEûDRILLERûHASûOBTAINEDû53MûOFû
10 RBC 65 6,372.27 2.9 h&ROMûCAMPINGûINû26SûTOûlSHINGûINûBOATSû DEBTOR
IN
POSSESSIONûlNANCINGûANDûHASû
Total 330 217,655.95 consumer interest in the outdoors and reached an agreement with creditors to
Including US domestics, Euro, foreign, globals. Excluding equity-related debt. investments in these discretionary durable SLASHû53BNûOFûDEBTûFROMûTHEûCOMPANYSû
Source: Refinitiv SDC code: B5 goods products have been robust. capital structure post-bankruptcy.

40 International Financing Review July 4 2020

 BONDS HIGH-YIELD

)TûHASûAGREEDûTOûTERMSûFORûAû53BNûEXITû add a supplement to the existing offering õBN
EQUIVALENTûDUAL
CURRENCYûlVE
YEARû
lNANCINGûPACKAGEûTHATûCONSISTSûOFûAû circular, which detailed the extra risk factor, non-call two offering that was set to fund its
53BNûREVOLVINGûCREDITûFACILITYûANDûAû according to a source familiar with the deal. purchase of German lighting group Osram.
NEWû53MûTERMûLOANû The planned deal was split between a )TûHADûLAUNCHEDûAûõMûlVE
YEARûNON
CALLû
Chesapeake also said the company had õMûSIX
YEARûNON
CALLûONEûmOATERûANDûAû TWOûNOTEûATûûANDûAû53MûlVE
YEARû
the support of its term-loan lenders and õMûSIX
YEARûNON
CALLûTWOûlXED
RATEûBOND non-call two bond at 6.75%. Initial price talk
SECUREDûNOTEûHOLDERSûTOûBACKSTOPûAû53Mû Prior to the new disclosure, price was 5.75%–6% and 6.75%–7%, respectively.
rights offering upon exit. WHISPERSûFORûTHEûlXEDûNOTESûWEREûINûTHEûLOWû But on June 26 leads were forced to push
“We are fundamentally resetting 5% range, said the source. After the news PRICINGûINTOûTHEûNEXTûWEEKûASû!-3ûGRAPPLEDû
Chesapeake’s capital structure and business broke, investors demanded a yield in the with the fallout from the news that it had
TOûADDRESSûOURûLEGACYûlNANCIALûWEAKNESSESû low 6% range to compensate for the come under investigation.
and capitalise on our substantial operational increased reputational risk, he said. !ûSPOKESMANûFORû!USTRIASû&-!ûSAIDûONû
strengths,” Doug Lawler, Chesapeake’s “The pricing was not appropriate for this 4HURSDAYûTHATûITûWASûINVESTIGATINGû!-3SûTOPû
PRESIDENTûANDûCHIEFûEXECUTIVEûOFlCERûSAIDûINû
a statement.
ûh"YûELIMINATINGûAPPROXIMATELYû53BNûOFû
debt and addressing the legacy contractual
obligations that have hindered our
performance, we are positioning
Chesapeake to capitalise on our diverse
operating platform and proven track record
credit. The company has been growing
during the coronavirus lockdown, because
the move to a digital economy has been
accelerated,” said the source.
Companies that are charged yields of 6%
and above are generally those credits that
have been severely affected by coronavirus
lockdowns, he said.
management on suspicion of illegal share
transactions during the ongoing takeover of
Osram.
Books were reopened to give investors the
chance to amend orders after news of the
investigation broke. This extra time did not do
the trick and on the afternoon of June 26 leads
issued a statement saying they needed yet more
of improving capital and operating h&ROMûANûINVESTORûPOINTûOFûVIEWûTHEûNEWSû time. The bond ended up pricing on Tuesday.
EFlCIENCIESûANDûTECHNICALûEXCELLENCEv WASûQUITEûDIFlCULTûTOûDIGESTûINûONEûDAYû Nonetheless, European high-yield primary
#HESAPEAKEûTHEûLARGESTû53ûOILûANDûGASû [Leads] decided it was worthwhile taking a remains open for business, said bankers, who
NAMEûTOûlLEûFORûBANKRUPTCYûTHISûYEARûISûJUSTû
one of many energy producers feeling the
strain of a drop in commodity prices and
overleveraged balance sheets.
CALIFORNIA RESOURCESûALSOûMISSEDû53Mû
of interest payments due on its 2022 8%
second-lien notes on June 15 and is in
negotiations with creditors regarding a
restructuring.
pause and clarifying what happened. The
company will reapproach the market when
the situation is clearer.”
BNP Paribasû"$ ûANDûCredit Suisse were
PHYSICALûBOOKRUNNERSûANDûJOINTûGLOBALû
coordinators alongside Banca IMI.
Leads thanked investors for participating
INûTHEûROADSHOWûANDûSAIDûITûBENElTEDûFROMû
strong investor engagement and demand for
POINTEDûTOûTHEûSUCCESSûOFû4HYSSEN+RUPPû
Elevator’s €10.3bn leveraged buyout.
RETAIL RETURNS TO EUROPEAN
HIGH-YIELD
B&M EUROPEAN VALUE RETAIL gave European
high-yield investors a rare chance to
increase exposure to an unloved sector last
4HEûlRMûHADû53BNûOUTSTANDINGûONû the offering. WEEKûLANDINGûAûaMûlVE
YEARûNON
CALLû
the notes as of March 31 this year among “But in light of recent developments as TWOûBONDû"A""
ûTHEûlRSTûOFFERINGûFROMû
TOTALûDEBTûOFû53BN
California Resources has struggled ever
SINCEûITûTOOKûONûDEBTûTOûFUNDûAû53BNû
dividend to Occidental Petroleum as part of
described in the updated OM and current this part of the market since November,
price expectations, the offering is not ACCORDINGûTOû)&2ûDATAû
proceeding at this time,” said an update sent Lead managers BNP Paribas and HSBC
ONû&RIDAY "$ ûONû4HURSDAYûRELEASEDûINITIALûGUIDANCEû
a spin-off from the oil company in h4HEûSPONSORSûMANAGEMENTûANDûJOINTû ATû
ûONûAûaMûTRADEûFROMûTHEû5+û
December 2014. bookrunners are currently considering discount retailer.
options for completing the offering and will Demand allowed banks to upsize the deal
provide an update in due course.” by £50m and the bond landed at 3.625%.
EUROPE/MIDDLE EAST/ Engineering Group is only the second “Pricing is getting quite aggressive but
AFRICA borrower to pull a deal since the European there is not much worth buying in this
high-yield market reopened after the sector in HY - or IG, to be fair,” said one bond
HIGH-YIELD M&A PIPELINE GETS CORONAVIRUSûCRASHû3OUTHû!FRICANûPAPERûANDû investor during execution.
CLOGGED BY BAD NEWS PULPûMAKERû3APPIûPULLEDûAûõMûSENIORû
ALL ASIAN HIGH-YIELD ISSUERS
5NC2 offering in May.
1/1/2020–30/6/2020
4HEû%UROPEANûHIGH
YIELDû-!ûlNANCINGû
Managing No of Total Share
pipeline was thrown a curveball after two AMS SPRUCES UP BOND
bank or group issues US$(m) (%)
out of three issuers looking to fund Meanwhile, Austrian sensor company AMS
acquisitions in the market were forced to was forced to reduce the size and increase 1 Credit Suisse 31 3,008.96 10.0
either postpone or cancel their deals. the yield on its delayed dual-tranche 2 UBS 25 2,334.81 7.8
Italian IT company the ENGINEERING GROUP offering as it grapples with the fallout from 3 BofA Securities 12 1,885.41 6.3
on June 26 pulled its proposed €640m dual- the news that it has come under 4 Goldman Sachs 16 1,605.34 5.3
tranche euro bond (B2/B/B+) backing its INVESTIGATIONûFROMûTHEû!USTRIANûlNANCIALû 5 Haitong Secs 41 1,540.01 5.1
buyout by Bain Capital and Neuberger markets watchdog. 6 Citic 28 1,516.00 5.0
Berman after reports that executives were The company ended up pricing a €1bn- 7 Tianfeng Securities 4 1,320.00 4.4
among 13 people arrested by Italian tax equivalent dual-currency 5NC2 bond, down 8 Standard Chartered 13 1,103.74 3.7
police in an investigation into alleged from the €1.3bn previously announced. 9 Deutsche Bank 23 1,053.62 3.5
bribery relating to Milan subway contracts. !-3ûALSOûBOOSTEDûTHEûYIELDûONûITSûEUROû 10 HSBC 21 982.44 3.3
The news, which was reported on June 23 tranche to 6% and an OID of 99, up from 5.75%. Total 76 30,068.38
– the day the credit’s three-day investor The transaction was been resurrected Excluding equity-related debt.
roadshow began – meant that leads had to FROMû*UNEûûWHENû!-3ûSETûlNALûTERMSûONûAû Source: Refinitiv SDC code: B06d

International Financing Review July 4 2020 41

 The investor said he was using Co-
operative Group as a comparable, which is
HIGHERûRATEDûATû""û30 û)TûHASûû-AYû
2024 and 7.50% July 2026 sterling bonds,
using which pointed to fair value of around
3.70% for a Co-op Group 2025, he said.
"-SûBONDûISûPARTûOFûAûRElNANCINGû
package to take out its senior secured notes.
The company is also looking to raise a new
£300m senior secured term loan A and a
£155m revolving credit facility, both due in
April 2025.
“This is discount retail and a great
opportunities due to lower valuations amid
the pandemic,” Lucror Analytics wrote.
“It may also be a somewhat opportunistic
move, with Algeco possibly seeking to tap
the market before the potential impact of
the downturn is felt.”
Both factors mean that the company
would likely have to offer a material
discount to attract investors to the bond,
wrote the analysts.
!LGECOSûûSECUREDû&EBRUARYûSû
were seen bid in the secondary market at
96.50, according to MarketAxess data.
December 2022s, 1.94% senior April 2023s,
2.03% senior March 2024s and 2.03% senior
May 2024s.
It will pay a cash price of 100.50 for the
two subordinated bonds and 100 for the
others.
The Japanese technology conglomerate
will repurchase the bonds through the
securities companies that originally sold
them.
The offer runs until July 17 and the
repurchase amount could be increased at
3OFT"ANKSûDISCRETION
business,” said a lead. It performed super- Elsewhere, debut issuer German 3OFT"ANKûWHICHûINû-ARCHûANNOUNCEDûITû
well in the latest crisis.” transmissions company Renk landed a would sell or monetise ¥4.5trn of assets to
"-ûREPORTEDûAûûINCREASEûINûFULL
YEARû õMûlVE
YEARûNON
CALLûTWOûSENIORûSECUREDû pay down some debt and fund a massive
PROlTûANDûSAIDûITûWASûBETTERûPOSITIONEDûANDû bond at 5.75% on Thursday. stock buyback, said it might also buy back
more resilient than most to deal with the Price talk for the bond, rated B1/B other bonds in the secondary market.
consequences of the coronavirus. -OODYS30 ûWASû
ûWHILEûINITIALû The company also said it would record a
The group, which sells furniture,
electricals and food, closed 49 stores for
three weeks but had reopened all by May.
The European high-yield market saw a
burst of activity in the latter part of last
week, with three other bonds landing from
RENK, TITAN and ALGECO.
Demand for new paper is being aided by
the erosion of equity dividends in Europe, as
COMPANIESûPRESERVEûCASHmOWûORûAREûFORCEDû
guidance was 6%-6.25%.
Leads Goldman Sachs, Commerzbank, Credit
Suisse, Deutsche Bank and UniCredit kicked off a
four-day telephone roadshow for the bond
on June 29.
While Renk produces autoparts, the
company’s large exposure to the defence
industry - which it supplies with
transmissions for tanks and gear units for
SHIPSû
gain of ¥600bn on the sale of T-Mobile
shares in its income statement for the three-
month period ended June 30.
30ûHASûAûNEGATIVEûOUTLOOKûONû3OFTBANKSû
senior unsecured BB+ rating. On March 25,
Moody’s downgraded the company to Ba3
from Ba1 on concerns about the size of the
planned share repurchases, prompting
3OFT"ANKûTOûWITHDRAWûFROMû-OODYSûRATINGû
ûFORMSûTHEûMAJORITYûOFûITSûREVENUESû
to curtail shareholder distributions, said
Bank of America analysts.
That is driving a greater focus from
traditional income investors into the high-
yield debt market.
“Industrial bonds, for instance, now offer
yields 4% higher than the expected dividend
yields on European industrial equities. We
think the demand side in high-yield markets
will blossom because of this,” the analysts
PROCESSû*APANû#REDITû2ATINGûRATESû3OFT"ANKSû
AROUNDûû3OURCESûCLOSEûTOûTHEûBONDûSAIDû
the company should be considered a
relatively defensive credit.
“It is also performing very well in this
crisis, which is probably less the case for
other ‘cyclicals’, although I would note that
building materials and some industrials
have fared quite well,” said one source.
4HEûNOTESûWILLûHELPûlNANCEû4RITONSû
purchase of a 76% stake in Renk from
senior bonds A–.
NATIONAL GROUP PLANS YANKEE
NATIONAL GROUP, a supplier of heavy
earthmoving equipment to the Australian
mining sector, mandated Morgan Stanley and
Deutsche Bank to arrange investor calls last
week.
!û53ûDOLLARûSENIORûSECUREDû!2EGû3û
wrote. Volkswagen, signed for €530m in January. BONDûOFFERINGûMAYûFOLLOWûSUBJECTûTOûMARKETû
However, the market may be nearly over
this crest of supply, as summer liquidity
CONDITIONSûAREûLIKELYûTOûSETûINûAFTERûTHEû53û
July 4 holiday, said JP Morgan analysts.
Buildings supplier ALGECO (B2/B-/B) looked
like an opportunistic entrant to the high-
yield market.
The company announced €150m mirror
notes of its €685m 6.50% senior secured
2023s on Wednesday. By Thursday, it had
&INALLYû'REEKûBUILDINGûMATERIALSû conditions.
producer Titan Cement (BB) priced a €250m National Group is rated B2/B by Moody’s/
seven-year non-call life bond at 2.75%. 30
Price talk was 2.875% area, while initial
price thoughts were 2.875%-3.125%.
Physical bookrunners on the bond were
HSBCû"$ ûANDûSociete Generale, which are
also global coordinators alongside Citigroup. STRUCTURED FINANCE
Proceeds from the deal will be used to
fund a tender offer for the company’s 3.50%
upsized the deal to €175m and landed the
bond at 6.50% and an issue price of 94.
Goldman Sachs ran the deal as sole physical
bookrunner, along with bookrunners Bank of
America and Deutsche Bank.
The mirror bond offering was
TO
LETû2-"3û
unexpected, given that the company’s
LIQUIDITYûWOULDûBEûSUFlCIENTûEVENûBEFOREûTHEû
transaction, said Lucror Analytics.
Proceeds from the deal include funding
investments and add-on acquisitions,
according to leads.
“We believe the deal is aimed at putting
THEûCOMPANYûONûAûBETTERûFOOTINGûFORû-!û
SENIORûNOTESûDUEû*UNEûûANDûTOûRElNANCEû
some bank debt.
ASIA-PACIFIC
SOFTBANK TO REPURCHASE BONDS
SOFTBANK GROUP last Monday said it would
REPURCHASEûUPûTOûcBNû53BN ûOFû
onshore corporate bonds as part of its
efforts to pay down debt.
The offer covers its 2.50% subordinated
bonds due December 2021, 2.50%
EMEA MBS
CITI STRUCTURES NEW CANADA
SQUARE RMBS
CITIGROUPûHASûSTRUCTUREDû5+ûBUY
CANADA SQUARE 2020-2, backed by mortgages
Citi bought from three non-bank
originators, according to Moody’s, which
released a pre-sale report for the deal.
A pair of new issues two weeks ago from
-ORGANû3TANLEYûANDû+ENSINGTONû-ORTGAGESû
SHOWEDûINVESTORûAPPETITEûFORû5+ûPAPERû
certainly includes bonds backed by
activities, as there may be more SUBORDINATEDû&EBRUARYûSûûSENIORû mortgages originated by non-bank lenders –

42 International Financing Review July 4 2020


which may be all they can expect given the
PREFERENCEûOFû(IGHû3TREETûBANKSûFORûCENTRALû
BANKûFUNDINGûOVERû2-"3
But it is not known whether the new
#ANADAû3QUAREûISSUEûWILLûBEûPUBLICLYûSOLDû
and there has been no announcement from
Citi about the deal.
The portfolio is expected to total £170m
ANDûSECURITISEûMORTGAGESûBOUGHTûFROMû&LEETû
Mortgages (which originated 37% of the
pool), Landbay Partners (49%) and Topaz
&INANCEû 
The current vacancy rate for the property
has increased to 17.5% from 10.3% following
the administration of one tenant, The
Devonshire Club, and that also contributed
to a fall in net rent to £22.8m from £25.4m
per annum.
Market participants are nervous about an
increase in vacancy rates across the sector,
either if social distancing measures continue
to be encouraged for many more months, or
if workers choose to make the recent
adoption of remote working a permanent
STRUCTURED FINANCE
to remain shut and new lending restricted
until the current crisis is resolved”,
according to a BofA Research report.
BofA highlighted analysis from property
management platform Re-Leased which
INDICATEDûONLYûûOFûOFlCEûRENTSûDUEûFORûTHEû
June quarter (ending June 24) had been paid.
That is down from 31.2% for the March
quarter, although Re-Leased said that 60
DAYSûAFTERûTHEûDEADLINEûTHEûlGUREûROSEûTOû
67%.
&IGURESûFORûRETAILûAREûMUCHûLOWERûTHEû*UNEû
Mortgages on payment holidays made up one even after the Covid-19 pandemic lGUREûISûûFROMûûTHEûPREVIOUSû
4.22% of the pool as of May 31. abates. quarter, Re-Leased said, while industrial
#ITIûlRSTûISSUEDûUNDERûITSû#ANADAû3QUAREû But uncertainty of the impact is rents were 16.2% for June and 23% for
programme last year, securitising mortgages WIDESPREADûFORûINSTANCEûmEXIBLEûOFlCEû -ARCHûMAKINGûOFlCEûASSETSûTHEûMOSTû
ORIGINATEDûBYû&LEETû4HATûDEALûWASûPRE
PROVIDERSûSUCHûASû7E7ORKûCOULDûBEûlRSTûTOû resilient of the three sectors.
PLACEDûBUTû#ANADAû3QUAREûWASûEXPECTEDûTOû come under pressure given the short-term
become a more broadly distributed NATUREûOFûTHEIRûLEASESû"UTûASû30ûPOINTSûOUTû
programmatic issuer over time. “they may also represent a credible EMEA ABS
However, the Covid-19 pandemic was ALTERNATIVEûTOûLONG
TERMûTRADITIONALûOFlCESû
already shuttering asset-backed markets by for corporate tenants that are on the path to QANDER ANNOUNCES AURORUS
the time the second deal emerged in March. recovery”. 2020 VIA ABN/DB
Citi said it placed that transaction, without 3PEAKINGûONûANû30ûWEBINARûONû4UESDAYû
any public marketing process. 30ûANALYSTû%DWARDû4WORTûSAIDûTHEûAGENCYû #HENAVARI
OWNEDû$UTCHûCONSUMERûlNANCEû
That deal securitised mortgages originated had not taken any ratings actions purely as a lender QANDER announced a €345m full-stack
BYûTHEûSAMEûTHREEûlRMSûASûINûTHEûLATESTûDEAL RESULTûOFûVACANCYûRATEûADJUSTMENTSûALTHOUGHû CONSUMERûLOANû!"3ûONû4HURSDAYûTOû
&ORûTHEûNEWûISSUEû-OODYSûRATESûlVEû these did make up one of the factors that fed RElNANCEûAûû!"3ûNEARINGûITSû!UGUSTûlRSTû
TRANCHESûFROMû!AAûTOû"ûASûWELLûASûAû#LASSû8û INTOûTHEûDOWNGRADEûOFûTHEû4AURUSû#-"3 optional redemption date.
rated Caa3. It shows the capital structure h3HOULDûTHEREûBEûANYûSIGNIlCANTû ABN AMRO and Deutsche BankûAREûJOINTû
with step-up coupons but not initial coupons. movement in vacancy rates, given the ARRANGERSûANDûJOINTûLEADSûFORûTHEû343

Those step-up coupons are little changed NATUREûOFûTHEûLEASEûPROlLESûTHEûNATUREûOFûTHEû compliant AURORUS 2020, and are targeting
at the top of the stack compared with the underlying leases generally and the pricing for the week of July 13.
TWOûEARLIERûDEALSûBUTûATûTHEû3INGLEû"ûRATINGû properties in the transactions that we The deal’s €220.8m Triple A (Moody’s/
the two 2020 deals have step-up margins monitor, I wouldn’t expect [vacancies] to be $"23 ûHASûITSûCOUPONûPRE
SETûATûONE
MONTHû
THATûAREûINûFACTûWELLûINSIDEûTHEûû2-"3 an overnight impact, it would be a more Euribor plus 70bp and is expected to be
4HEû
û#LASSû&ûRATEDû"ûBYû-OODYSû gradual softening of vacancies over the priced above par. The equivalent tranche in
PAYSû3ONIAûPLUSûBPûBEFOREûSTEP
UPûANDû medium term,” Twort said. THEûû!"3ûCAMEûATûBPûOVER
530bp after step-up. Those seniors from the new issue as well
The equivalent tranches in the 2020-1 and RELATIVE RESILIENCE as the AA/AA Class B are shown as offered.
2020-2 deals, which are rated B2, have step- )NûAûREPORTûLASTûWEEKû30ûSAIDû!!!ûANDû!!û 4WO
THIRDSûOFûEACHûOFûTHEû3INGLEû!û"AA"""û
ups of 410bp and 445bp, respectively.
OFFICE VACANCY WORRIES GROW
WITH TAURUS DOWNGRADE
5+û#-"3ûTAURUS 2018-2 lost its Triple A rating
FROMû30ûONû-ONDAYûINûAûFURTHERûSIGNûOFû
FRAGILITYûINûTHEû%UROPEANû#-"3ûMARKETSû
,ONDON
FOCUSEDûOFlCEûSEGMENTû
30ûDOWNGRADEDûTHEûDEALSûTWOûTRANCHESû
by one notch each, taking the Class A to AA+
from AAA and the Class B to A+ from AA–.
TRANCHESûFROMû5+ûOFlCEû#-"3ûCOULDû and Ba3/BB Classes C to E are also available,
withstand increasing vacancy rates with with the remaining portions already pre-
little risk of downgrade. placed.
Its analysis showed even a 10 percentage- &URTHERûDOWNûTHEûSTACKûTHEû"",û#LASSû&û
point increase in vacancy rates could see ANDûUNRATEDû#LASSESû'ûANDû8ûHAVEûBEENûFULLYû
those ratings unchanged, while A ratings pre-placed.
could lose one notch and BBB ratings could
GLOBAL STRUCTURED FINANCE IN US$
lose two notches.
BOOKRUNNERS: 1/1/2020–30/6/2020
But the ratings agency is not making such
Managing No of Total Share
a prediction itself: it notes that vacancies
bank or group issues US$(m) (%)
peaked at 10% to 12% in 2003 and 7% to 10%
in 2009, but says forecasters expect Covid-19 1 JP Morgan 100 49,077.28 15.0

Taurus 2018-2 securitises a loan from TOûCAUSEûANûINCREASEûTOûJUSTûûTOû 2 Credit Suisse 84 42,034.87 12.8
3 Wells Fargo 83 38,376.22 11.7
"ANKûOFû!MERICAû3ECURITIESûBACKEDûBYûTHEû #URRENTûREPORTEDûVACANCYûlGURESûAREûû
4 Citigroup 87 31,927.53 9.7
lVE ACREû$EVONSHIREû3QUAREûSITEûINûTHEû#ITYû across central London, with the City at
5 Morgan Stanley 61 26,535.37 8.1
OFû,ONDONûWHICHûISûRENTEDûBYûOFlCEûRETAILû 5%–6% and Canary Wharf at 7.5%–9%.
6 BofA Securities 72 24,882.51 7.6
and leisure tenants – all sectors heavily 4AURUSû ûISûALSOûRATEDûBYû&ITCHûWHICHû
7 Goldman Sachs 79 22,345.42 6.8
impacted by Covid-19. still has the Class A at AAA and the Class B at
8 Barclays 56 14,101.70 4.3
WeWork is the largest tenant, accounting AA. It placed both tranches on rating Watch
9 Nomura 46 13,298.51 4.1
for 40% of the rent and 30% of the total Negative in April, highlighting its concern
10 Deutsche Bank 53 9,415.32 2.9
LETTABLEûSPACEûACCORDINGûTOû30û7E7ORKûISû over the importance for debt service on
Total 532 327,945.34
ALSOûPARTûOFûTHEûJOINTûVENTUREûALONGSIDEû4(û WeWork-operated co-working space.
Including securitisations (Euro, foreign, global and domestics, excluding
2EALû%STATEûANDû0&!û'LOBALû2EALû%STATEûTHATû #-"3ûINûGENERALûISûUNDERûPRESSUREûASûANû CDOs) and PFI bonds.
SPONSORSûTHEû#-"3 asset class, with the primary market “likely Source: Refinitiv SDC code: B16b

International Financing Review July 4 2020 43

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 3/7/2020
Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type
AFFM 2020–Z1 US$150 1.30 3.460 Barclays NR/NR/NR ABS
BHLD 2020–1 US$135.244 2.12 1.724 Barclays NR/AAA/NR RMBS
BHLD 2020–1 US$12.535 5.05 3.253 Barclays NR/A/NR RMBS
BHLD 2020–1 US$10.461 5.05 4.353 Barclays NR/BBB/NR RMBS
BHLD 2020–1 US$7.163 5.05 5.215 Barclays NR/BB/NR RMBS
BHLD 2020–1 US$9.331 5.05 2.600 Barclays NR/AA/NR RMBS
CNART 2020–1 US$66.91 0.52 1.760 Deutsche Bank NR/NR/NR ABS
CNART 2020–1 US$11.84 1.52 2.710 Deutsche Bank NR/NR/NR ABS
CNART 2020–1 US$20.73 2.11 3.840 Deutsche Bank NR/NR/NR ABS
CNART 2020–1 US$12.95 2.67 7.360 Deutsche Bank NR/NR/NR ABS
Northwoods Capital 21 Euro €106 – 3mE+150bp BofA Securities Aaa/AAA/NR CLO
Northwoods Capital 21 Euro €25.6 – 3mE+220bp BofA Securities Aa2/AA/NR CLO
Northwoods Capital 21 Euro €11.8 – 3mE+320bp BofA Securities A2/A/NR CLO
Northwoods Capital 21 Euro €15.5 – 3mE+450bp BofA Securities Baa3/BBB/NR CLO
Northwoods Capital 21 Euro €13.1 – 3mE+686bp BofA Securities Ba3/BB–/NR CLO
Northwoods Capital 21 Euro €4 – 3mE+809bp BofA Securities B3/B–/NR CLO
Northwoods Capital 21 Euro €28.7 – – BofA Securities NR/NR/NR CLO
NZES 2020–FNT1 US$265.5 2.90 5.437 Credit Suisse/Citigroup/JP Morgan/Goldman Sachs NR/NR/NR RMBS
Sapphire XXIII Series 2020–1 A$70 – 1mBBSW+95bp NAB/CBA/Macquarie Bank NR/BBB/NR RMBS
Sapphire XXIII Series 2020–1 A$175 – 1mBBSW+165bp NAB/CBA/Macquarie Bank NR/AA/NR RMBS
Sapphire XXIII Series 2020–1 A$61.250 – 1mBBSW+210bp NAB/CBA/Macquarie Bank NR/A/NR RMBS
Sapphire XXIII Series 2020–1 A$15.750 – 1mBBSW+300bp NAB/CBA/Macquarie Bank Aaa/AAA/NR RMBS
Sapphire XXIII Series 2020–1 A$10.500 – 1mBBSW+400bp NAB/CBA/Macquarie Bank Aaa/AAA/NR RMBS
Sapphire XXIII Series 2020–1 A$7 – 1mBBSW+525bp NAB/CBA/Macquarie Bank Aaa/AAA/NR RMBS
STACR 2020–DNA3 US$336 2.10 1mUSL+150bp Barclays/BofA Securities NR/A–/BBB– RMBS
STACR 2020–DNA3 US$420 5.19 1mUSL+300bp Barclays/BofA Securities NR/BBB–/B RMBS
STACR 2020–DNA3 US$250 9.28 1mUSL+510bp Barclays/BofA Securities NR/B/NR RMBS
STACR 2020–DNA3 US$100 9.96 1mUSL+935bp Barclays/BofA Securities NR/NR/NR RMBS
VOLT 2020–NPL6 US$127 1.48 3.967 Credit Suisse NR/NR/NR RMBS
VOLT 2020–NPL6 US$33 2.98 4.949 Credit Suisse NR/NR/NR RMBS
VOLT 2020–NPL6 US$15 2.98 6.414 Credit Suisse NR/NR/NR RMBS

Dutch consumer loans make up a very
rare asset class: the only deal since Qander’s
2017 trade was Magoi from Credit Agricole
at the end of last year.
And Dutch securitisation in general has
been largely shut since the coronavirus
crisis began.
EIB GUARANTEES SANTANDER
LEASING POLISH ABS
The EIB will guarantee a synthetic
securitisation of Polish lease receivables
originated by SANTANDER LEASING, part of the
3ANTANDERû"ANKû0OLSKAû'ROUP
Pricing has been steadily tightening in
recent weeks, and two deals the previous
WEEKûnûFROMû-AC+AYû3HIELDSûANDûFROMû
European debutant AlbaCore Capital – printed
their seniors at 155bp and 153bp, respectively.
Despite the tightening, securitisation
research analysts at Barclays said last week
!SûINûTHEû5+ûWHEREûTHEû(IGHû3TREETûBANKSû The deal references a Z2bn (around €450m) that Triple As in primary still looked
HAVEûSHUNNEDûTHEûPRIMARYûMARKETû$UTCHû2-"3û portfolio of lease receivables and is designed attractive, with the recovery from the Covid
mainstay Obvion, which is owned by Rabobank, TOûFREEûUPûCAPITALûFORûNEWûLENDINGûTOû3-%Sû lows still lagging behind that for
has kept away too. There has only been a pre- and mid-caps in Poland in the context of the investment-grade bonds.
PLACEDûAUTOûLEASEû!"3ûFROMû,EASE0LAN Covid-19 outbreak, the EIB said. !NDûCOMPAREDûWITHû53û4RIPLEû!Sû
Like the 2017 deal, Qander’s trade is backed The EIB will guarantee the Z1.7bn senior although the European product is now
by a mix of loans, mainly revolving (48% of the tranche and a Z284m mezzanine layer. BPnBPûINSIDEû53ûLEVELSûITûBENElTSûFROMû
OUTSTANDINGûBALANCE ûlXED
RATEûAMORTISINGû The deal is the third synthetic securitisation THEûVALUEûOFûTHEûEMBEDDEDû%URIBORûmOORû
 ûANDûCREDITûCARDSû û3EASONINGûFORûTHEû ORIGINATEDûBYûTHEû3ANTANDERû"ANKû'ROUPûINû Barclays puts that at around 40bp for a
revolving loans and credit cards is long, at 6.9 Poland and supported by the EIB. Triple A tranche, and after factoring in
YEARSûANDûûYEARSûRESPECTIVELYû3EASONINGûISû
1.4 years for the amortising loans.
The investor presentation says there have
been no changes to Qander’s arrears
management procedure as a result of Covid-
19 but tailor-made solutions are possible
WHEREûNEEDEDûFORûBORROWERSûINûDIFlCULTY
As of June 30, 34 payment arrangements
have been granted to borrowers impacted
by Covid-19. There are 59,333 loans to
54,400 borrowers in the pool.
44
EMEA CLO
ANGELO GORDON GETS CLO
SENIORS TO 150bp
ANGELO GORDON last week took European CLO
senior spreads down to 150bp over Euribor with
pricing of its €204.7m NORTHWOODS CAPITAL 21 EURO
CLO. Bank of America Securities was arranger.
International Financing Review July 4 2020
hedging costs too, estimates an all-in spread
difference of around 50bp, some 40bp wide
of the historical average.
Barclays prefers seniors from primary
issuance rather than those available in
secondary: new deals are structured with
more credit enhancement, typically
reinvestment periods are usually shorter,
THEûVALUEûOFûTHEû%URIBORûmOORûOPTIONûISû
currently higher and the new issues come
with a higher coupon.

“While the higher coupon tranches could
OBVIOUSLYûBEûSUSCEPTIBLEûTOûAûRElNANCINGûINû
AûYEARûIFûTHEREûISûSIGNIlCANTûSPREADû
tightening, we think the higher coupon
could still provide attractive downside
protection should spreads actually widen
Blackstone declined to comment on the
details of the funding.
Most of the proceeds Hudson receives
WOULDûBEûUSEDûTOûPAYûDOWNû53MûONû
its revolving credit lines and to retire
53MûINûTWOûUNSECUREDûTERMûLOANSûDUEû
STRUCTURED FINANCE
!LLûFOURûTRANCHESûINû&REDDIESûLATESTû
offering were multiple times
oversubscribed. The biggest class was a M-2
NOTEûWHICHûTOTALLEDû53MûANDûWASûû
times oversubscribed at launch, a source
familiar with the deal said.
SIGNIlCANTLYûAGAINûONûMACROûCONCERNSvû
Barclays said.
Angelo Gordon’s CLO last week printed its
$OUBLEû!SûATûBPûANDû3INGLEû!SûATûBPû
The Baa3/BBB tranche came at a 467bp
discount margin and the Ba3/BB– at a 750bp
DM.
in 2022.
All this is expected to improve covenant
metrics and reduce the company’s net
debt-to-market-capitalisation ratio to 30.4%
from 42.1%.
The rest of the cash could be used for
future investments, share buybacks and
&REDDIEûAPPEALEDûTOûINVESTORSûBYû
excluding loans in forbearance from its
LATESTû34!#2ûISSUE
“They took out all the forborne loans so
it was a clean deal,” the source said.
4HEûSHAREûOFû&REDDIEûANDû&ANNIEûLOANSû
in forbearance declined for a third week
5NLIKEûTHEûTWOûPREVIOUSûNEWûISSUESûTHEû general corporate purposes. in a row to 6.26% as of June 21, the
deal was also structured down to a B3/B– Moreover, Hudson is expected to collect Mortgage Bankers Association said last
#LASSû&ûWHICHûWASûPRICEDûATûAûBPû$-
The deal has a one-year non-call and
three-year reinvestment period. The
manager will retain vertical interest under
%5ûRISKûRETENTIONûRULES
53MûINûFEESûFORûMANAGINGûLEASINGûANDû
construction of the three studio lots and
lVEûOFlCEûTOWERSû
h/URûLATESTûJOINTûVENTUREûWITHû
Blackstone unlocks a portion of the value
we’ve created for our shareholders and
PROVIDESûUSûWITHûSIGNIlCANTûCAPITALûTOûGROWû
Monday.
Barclays and Bank of America were the lead
underwriters, which is expected to settle
on July 8.
&REDDIEûALSOûENTICEDûINVESTORSûBYû
marketing the deal wide of levels in the
secondary market.
US MBS BOTHûOURûSTUDIOûANDûOFlCEûPORTFOLIOSû The price guidance on the BBB–/B rated
including the build-out of additional M-2 tranche was 315bp–325bp over one-
BLACKSTONE, HUDSON PACIFIC EYE development rights at our existing month Libor.
FINANCING FOR HOLLYWOOD STUDIOS
û
BLACKSTONE and real estate investment trust
HUDSON PACIFIC PROPERTIES are considering
TAPPINGûDEBTûMARKETSûTOûFUNDûAûJOINTûVENTUREû
to operate and develop Hudson’s media
û
STUDIOûLOTSûANDûADJACENTûOFlCEûPROPERTIESûINû
Hollywood, California.
The two companies said last Monday that
$.!û
Blackstone Property Partners would acquire
a 49% stake of Hudson’s media portfolio
properties, while the REIT will retain a 51%
interest and oversee operations, leasing and
STUDIOSvû(UDSONû0ACIlCûCHAIRMANûANDû
CEO Victor Coleman said in a statement.
4HISûDEALûCOMESûASûlLMûANDûTELEVISIONû
productions in California reopened earlier
this month after they were halted to stem
the transmission of Covid-19.
(UDSONûSAIDûITSûTHREEû3UNSETû3TUDIOSû
remained open during the pandemic,
resulting in the REIT collecting 98% of its
rent from studio tenants in April and May.
“These properties are in a very desirable
part of the country,” a fund manager said.
Eastdil SecuredûWASû(UDSONû0ACIlCSûLEADû
3ECONDARYûSPREADSûONûAGENCYû#24û-
paper were being quoted at that point at a
spread of 292bp, which tightened by
753bp from its peak seen in late March,
ACCORDINGûTOû'OLDMANû3ACHS
"ANKSûWEREûABLEûTOûPRICEû&REDDIESû-
note at 300bp over Libor. But that was still
wider than the 185bp spread on a similar
TRANCHEûINû&REDDIESû34!#2û
DEALûSOLDûINû&EBRUARY
Another feature that drew buying
interest was the increase in credit
enhancement on the offered notes.
development.
Hudson’s Hollywood portfolio covers a
total 2.2m square feet and has a gross
VALUATIONûOFû53BN.
.ETmIXûISûTHEûBIGGESTûTENANTûINûTHREEûOFû
$.!û
THEû(UDSONûOFlCEûBUILDINGS
lNANCIALûADVISERûFORûTHISûDEALûWITHûBofA
SecuritiesûCOMINGûINûASûANOTHERûlNANCIALû
adviser.
Goldman Sachs and Barclays served as
"LACKSTONESûlNANCIALûADVISERS
Credit protections on the M-1, M-2, B-1
and B-2 notes were increased to 3.00%,
1.75%, 0.75% and 0.25%.
They were higher than the 2.50%, 1.10%,
ûANDûûINûTHEû34!#2û
issue.
4HEûJOINTûVENTUREûISûINITIALLYûHOPINGûTOû FREDDIE’S WARM RETURN TO 5NTILû&REDDIESûLATESTûDEALûONû4UESDAYû
RAISEûUPûTOû53MûINûhASSET
LEVELû CRT MARKET agency CRT issuance had been frozen since
lNANCINGvûONûORûAROUNDûTHEûCLOSINGûDATEûOFû -ARCHûAFTERûREACHINGû53BN
3EPTEMBERûûACCORDINGûTOûANûINVESTORû Investors gave a warm welcome to FREDDIE
presentation. MAC‘s return to the credit risk transfer market, ALL INTL ISSUERS (EXCLUDING SELF-FUNDED)
Anticipated cash proceeds to Hudson which was battered by investor worries about BOOKRUNNERS: 1/1/2020–30/6/2020
0ACIlCûAREû53MûORûUPûTOû53BNû the Covid-19 pandemic in March. Managing No of Total Share
WITHûTHEûPOSSIBLEûASSETûlNANCING ,ASTû4UESDAYûTHEûSECOND
BIGGESTû53û bank or group issues US$(m) (%)
It is unclear how much, if any, of the MORTGAGEûlNANCEûAGENCYûPRICEDûAû 1 Goldman Sachs 37 8,686.0 9.2
lNANCINGûWILLûENDûUPûINûTHEû#-"3ûMARKET 53BNûSINGLE
FAMILYûMORTGAGEû#24û 2 Credit Suisse 46 8,515.7 9.0
One possible scenario is that the studio offering, STACR 20202-DNA3ûMARKINGûITSûlRSTû 3 Barclays 45 7,954.7 8.4
LOTSûANDûTHEûOFlCEûTOWERSûMIGHTûlNANCEDû SUCHûTRANSACTIONûSINCEûTHEûlRSTûQUARTER 4 Citigroup 42 7,603.5 8.1
differently, a market source said. 3TRONGûDEMANDûFORûTHEûOFFERINGûWHICHû 5 JP Morgan 41 7,599.7 8.1
The studio lots, which are seen more WASûUPSIZEDûFROMû53MûBUTTRESSEDû 6 BofA Securities 34 6,753.6 7.2
esoteric, would be funded directly by banks VIEWSûOFûAûREBOUNDûINûTHEûHOUSINGûlNANCEû 7 Deutsche Bank 37 6,610.7 7.0
as the Hudson-Blackstone venture plans to market and hopes that mortgage 8 Wells Fargo 25 5,294.8 5.6
develop them, the source said. delinquencies may not surge in the second 9 Morgan Stanley 24 4,495.3 4.8
A bank syndicate could underwrite a loan half of 2020. 10 Nomura 26 4,030.6 4.3
TOûlNANCEûTHEûOFlCEûTOWERSûSEPARATELYûANDû It also helped to restore an avenue for Total 204 94,198.9
SECURITISEûTHEûMORTGAGEûINûTHEû#-"3û &REDDIEûANDûFANNIE MAEûTOûOFmOADûCREDITûRISKû Includes securitisations, PFI bonds and credit-linked notes. Excludes US
global ABS/MBS, CDOs and self funded issues.
market, the source added. to private investors.
Source: Refinitiv SDC code: J10d

International Financing Review July 4 2020 45

 Agency CRT supply, which totalled “The new surge hasn’t weighed on the paper is trading around 350bp, which has
53BNûINûûISûNOWûFORECASTûTOûTOTALû market so far. The recent economic data narrowed by 75bp from a month ago,
JUSTû53BNûTHISûYEARû"ANKûOFû!MERICAû have been encouraging,” the fund manager ACCORDINGûTOûAû7ELLSû&ARGOûREPORTûLASTû
analysts said on Monday. said. Wednesday.
The latest positive news was the record
MGM, MANDALAY CASINO LOAN TO TAKE MûJUMPûINû53ûJOBSûINû*UNEûFOLLOWINGûAû
SECOND SPIN IN CMBS MARKET
"ANKERSûAREûPLANNINGûTOûTAKEûTHEû53û
commercial mortgage-backed securities
market for another spin with a loan backed
by two MGM casinos in Las Vegas.
A syndicate group that includes Citigroup,
Barclays, Deutsche Bank and Societe Generale is
planning to securitise another portion of a
53BNûLOANûTHEYûEXTENDEDûTOûBLACKSTONE
and MGM GROWTH PROPERTIES for their
53BNûPURCHASEûOFû-'-û'RANDûANDû
MûINCREASEûTHEûMONTHûBEFOREûTHEû53û
Labor Department said last Thursday.
3TILLûTHEûRECOUPEDûJOBSûSOûFARûAREû
equivalent to 34% of the total workers laid
off and furloughed due to the pandemic.
JUNIOR NOTES SOLD
On May 5, the same syndicate group
managed to sell two lower-rated investment-
grade tranches from the single-asset,
single-borrower transaction, BX 2020-VIVA, as
the Covid-19 pandemic has caused casino
US ABS
US ABS SUPPLY SEEN ON SIMMER
THIS SUMMER
"ANKERSûEXPECTû!"3ûISSUANCEûTOûSLOWûTOûAû
typically slow simmer over the next couple
of months after deal volume picked up in
June with issuers clearing the pipeline of
deals which was held back at the height of
the Covid-19 pandemic.
“A lot of the backlog has been worked
Mandalay Bay in January, according to a 15G revenues to plunge. DOWNvûAûSENIORû!"3ûBANKERûSAIDûh&ORû*ULYû
lLINGûLASTû4UESDAY 4HEûLEADSûRAISEDû53MûFROMûTHEû and August, the cadence will be pretty
4HEûBANKSûPRICEDû53MûOFûJUNIORû JUNIORûNOTES similar to what we have seen in past years.”
notes in a deal backed by part of the loan in Their spreads came in much wider (ISTORICALLYûMONTHLYû!"3ûSUPPLYûINû*ULYû
early May, but they had to downsize the spreads than those on similar tranches in ANDû!UGUSTûHASûAVERAGEDû53BNûANDû
initial deal structure and sell the notes at a
steep discount as investors showed caution
on investing in casino risk.
The new debt sale, BX 2020-VIV2, comes as
Las Vegas casinos have reopened after they
were shut from mid-March to May in a bid
to curb the transmission of Covid-19.
TO
DATEû!"3ûISSUANCEûHASûTOTALLEDû
THEû53BNû3!3"ûISSUEûBACKEDûBYûTHEû
Bellagio casino in December, BX TRUST 2019-
OC11.
4HEû"ELLAGIOû#-"3ûHELPEDûlNANCEû-'-û
ANDû"LACKSTONESû53BNûJOINTûPURCHASEûTOû
ACQUIREûTHEûCASINOûONûTHEû6EGASû3TRIPû
The Class D note, which was rated Baa3 by
53BNûRESPECTIVELYû7ELLSû&ARGOû
analysts said.
“We are not going to see a summer lull,
but we are not going to see a deluge either,”
said Invesco senior portfolio manager Philip
Armstrong.
9EAR
Recent data suggesting an economic Moody’s, priced at a spread of 525bp over 53BNûTHROUGHûLASTûWEEKûABOUTûû
rebound is under way have underpinned a swaps for a yield of 5.891%, while the E LOWERûTHANûTHEûSAMEûSPANûAûYEARûEARLIERû)&2û
PICK
UPûINû#-"3ûDEMANDûTIGHTENINGûTHEIRû Tranche that carries a Ba2 Moody’s rating data showed.
spreads in recent weeks. This is paving the cleared at swaps plus 625bp, yielding JP Morgan analysts earlier this month
way for a second go-around for the MGM- 6.891%. SLASHEDûTHEIRûPROJECTIONûFORû53û!"3ûISSUANCEû
Mandalay securitisation. In the Bellagio deal, the Baa3 rated D note TOû53BNûFORûûWHICHûWASû53BNû
“The market will likely be willing to give this came in at a spread of 205bp for a yield of lower than their earlier forecast, prompted
deal levels that work,” a fund manager said. 3.816%, while the Ba3 rated E note priced at by an expected lending slowdown in a
3TILLûTHEûRECENTûSURGEûINûINFECTIONûACROSSû a spread of 265bp for a yield of 4.416%. recession.
MOREûTHANûHALFûOFûALLû53ûSTATESûHASûRAISEDûTHEû
risk that stringent social distancing
measures may be introduced.
It is too early to tell whether this negative
RATEû4RIPLEû 2ESERVESû4ERMû!SSET
"ACKEDû3ECURITIESû,OANû
development in the health crisis would curb
3INCEûTHENûTHEû#-"3ûMARKETûHASû
improved with spreads tightening from
their wides during its March rout.
3ECONDARYûSPREADSûONûmOATING
!ûRATEDûHOTELû3!3"ûNOTESûAREûATûBPûOVERû
4HEû53û!"3ûMARKETûSAWû53BNûOFû
issuance in 2019, JP Morgan said.
.OTûEVENûTHEûREBOOTûOFûTHEû&EDERALû
&ACILITYûTHISûMONTHûWILLûADDûMUCHûSIZZLEûTOû
investor appetite for the new portion of the Libor, which has tightened by 35bp from a !"3ûISSUANCEûTHISûSUMMERûMARKETû
MGM-Mandalay securitisation. month earlier, while Triple B rated hotel participants said.

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 3/7/2020

Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

SSAR
US DOLLARS
Jun 30 2020 EBRD US$1.5bn Jul 10 2023 0.25 99.89 MS+7 / T+12.15 0.287

Jul 2 2020 Eurofima US$110m incr Nov 15 2021 3mL+9 100 DM+8 -
(US$610m)
EUROS
Jun 29 2020 Bremen €500m Jul 6 2027 0.01 102.1 MS+1 / B+39.2 -0.28
Jun 30 2020 NRW.BANK €1bn Jul 9 2035 0.1 99.91 MS+14 / B+39.9 0.106

Jul 1 2020 BNG €1bn Jul 9 2035 0.125 99.56 MS+13 / B+35.7 0.155

46 International Financing Review July 4 2020


h4!,&ûISûNOTûGOINGûTOûBEûAûRELEVANTû
factor,” the senior banker said.
)NVESTORSûREQUESTEDû53MûINûlRSTû
ROUNDûOFû4!,&ûLOANSûTWOûWEEKSûAGOû4HATû
WASûFARûBELOWûTHEû53BNûTAPPEDûINûTHEû
lRSTûROUNDûOFû4!,&ûFUNDINGûWHENûTHEû
programme was rolled out in 2009,
remain anxious about the coronavirus’
lingering economic impact.
“If monthly issuance volumes remain
on pace with last year, we believe
the market can easily absorb the
expected issuance volume and may
provide a positive technical as funds
BONDS SUMMARY DETAILS
COLUMBUS EYES POTENTIAL RMBS
COLUMBUS CAPITAL has mandated Credit Suisse,
NAB, Natixis, Standard Chartered and Westpac
TOûENGAGEûWITHûINVESTORSûREGARDINGûAû3-3&û
4RITONû2-"3ûOFFERINGû.!"ûISûARRANGER
!ûPOTENTIALû!USTRALIANûDOLLARû2-"3ûTRANSACTIONû
according to Bank of America. STEADILYûmOWûINTOûTHEûSECTORvû7ELLSû MAYûFOLLOWûSUBJECTûTOûMARKETûCONDITIONS
!ûFAIRLYûRAPIDûREBOUNDûINû!"3ûPRICESûHASû &ARGOûSAID
MADEûITûLESSûPROlTABLEûFORûINVESTORSûTOû
BORROWûFROMû4!,&ûANDûUSEûTHEûMONEYûTOû ASIA-PACIFIC ABS
BUYû!"3ûANALYSTSûANDûINVESTORSûSAID
Robust investor demand for paper has
narrowed spreads in recent weeks and
helped restore some issuance in smaller,
RISKIERû!"3ûSECTORS
ASIA-PACIFIC MBS
BLUESTONE PRICES SAPPHIRE RMBS
Non-bank lender BLUESTONE last Tuesday
METRO PRICES AUTO ABS
METRO FINANCEûONû4HURSDAYûPRICEDûAû!Mû
53M ûAUTOûANDûEQUIPMENTû!"3û
&ORûEXAMPLEûDRIVEN BRANDS priced PRICEDûITSû!Mû53M ûSAPPHIRE offering, METRO 2020-1.
53MûINûFRANCHISEûFEE
BACKEDûDEALûONû 2020-1 RMBS offering. 4HEûSIZESûOFûTHEû!3ûANDû!,ûTRANCHESûWEREû
&RIDAYûMARKINGûTHEûlRSTûWHOLE
BUSINESSû 4HEû!Mû#LASSû!,3ûTRANCHEûWASû SETûATû!MûANDû!MûRESPECTIVELYû
securitisation since March. PRICEDûATû""37ûPLUSûBPûTHEûTIGHTû HAVINGûBEENûINDICATEDûATû!MûANDû
3PREADSûONûRISKIERûASSETSûANDûLOWER
RATEDû end of 95bp–100bp guidance. The !MûTHEûPREVIOUSûWEEKû4HEYûWEREû
tranches have been recovering, although !Mû#LASSû!,ûTRANCHEûWASûPRICEDû PRICEDûATû""37ûPLUSûBPûANDûBPûTHEû
UNLIKEûPRIMEûAUTOûANDûCREDITûCARDû!"3ûTHEYû at plus 165bp, from 165bp–170bp tight ends of respective guidance of 105bp–
are not quite back to their pre-Covid 19 GUIDANCEûWHILEûTHEû!Mû#LASSû!û 110bp area and 170bp–175bp area.
levels. tranche was priced at 210bp, inside The weighted average life of the two
3PREADSûONûTWO
YEARû4RIPLEû!ûRATEDûSUB
guidance of 220bp area. tranches was also changed to 0.7 years for
PRIMEûAUTOû!"3ûWEREûBPûOVERûSWAPSû 4HEû!Mû#LASSû"ûWASûPRICEDûATû THEû!3ûANDûûYEARSûFORûTHEû!,ûFROMûûANDû
which tightened from the 665bp wide set BPûTHEû!Mû#LASSû#ûATûBPûANDû 2.7 years during pre-marketing. All other
in March but remain wider than the 17bp THEû!MûATûBPûALLûINûLINEûWITHû tranches had WALs of 3.1 years.
seen earlier in the year, Deutsche Bank guidance. !û!Mû#LASSû"ûTRANCHEûWASûPRICEDûATû
analysts said. Pricing was not disclosed for the ""37ûPLUSûBPûINSIDEûBPnBPûAREAû
“Despite the substantial tightening seen !Mû#LASSû$û!Mû#LASSû%û!Mû GUIDANCEûAû!Mû#LASSû#ûATûBPûFROMû
in spreads over the last three months, #LASSû&ûANDû!Mû#LASSû'ûTRANCHESû4HEû BPnBPûAREAûANDûAû!Mû#LASSû$ûATû
POSITIVEûTECHNICALSûSHOULDûKEEPû!"3û latter three were retained. 440bp, from 440bp–450bp area. They have
trading sideways to incrementally tighter 4HEû#LASSû!3û!,ûANDû!ûTRANCHESûAREû respective ratings of Aa2, A2 and Baa2.
in the near term,” they wrote in their mid- RATEDû!AA!!!û-OODYS30 û4HEû"û#û$û !û!Mû#LASSû%ûTRANCHEûRATEDû"AûWASû
year outlook on Wednesday. %ûANDû&ûNOTESûAREûRATEDû!!û!û"""û""ûANDû originally shown at guidance of 600bp–650bp
They cautioned the spread recovery "ûRESPECTIVELYûBYû30 AREAûBUTûlNALûPRICINGûWASûNOTûDISCLOSEDû
could be short-lived. The weighted average life is 0.6 0RICINGûFORûTHEûUNRATEDû!Mû#LASSû'!û
“Risks to this view include a substantial YEARSûFORûTHEû!3ûTRANCHEûANDûû ANDû!Mû'"ûTRANCHESûWASûNOTûDISCLOSED
worsening in the Covid epidemic in the years for the A1L and A2 tranches. NABûWASûARRANGERûANDûJOINTûLEADûMANAGERû
53ûANDûTHEûNEEDûFORûADDITIONALûlSCALû 4HEû7!,ûFORûTHEû&ûTRANCHEûISûû with Deutsche Bankû3ETTLEMENTûISûONû*ULYû
SUPPORTûTOûKEEPûCONSUMERSûAmOATvûTHEYû years and it is three years for all other -ETROû&INANCEûWASûESTABLISHEDûINûûASûAû
said. tranches. commercial auto/equipment lender. It targets
3TILLûLIGHTûSUPPLYûTHISûSUMMERûMAYûENDû NABûWASûARRANGERûANDûJOINTûMANAGERû prime borrowers for small-ticket auto and
up being a positive offset as investors with CBA and Macquarie. equipment assets in low-volatility industries.

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+7 area, MS+7 - >US$1.7bn Aaa/AAA/AAA BMO / Citi / HSBC / MS EMEA 37%, Asia 33%, Amers 30%. CB/
OI 41%, Bks/Tsy 39%, Ins/PF/Other 13%,
AM 7%.
DM+8 (#) - - Aa2/AA DB / JPM / HSBC -

MS+1 area - - -/-/AAA BLB / LBBW / Natx / NordLB / RBI -

MS+16 area 1 >€3.1bn, 100acs Aa1/AA/AAA CA-CIB / HSBC / Deka / NatWest Ger 35%, Switz/Aus 15%, Fr 11%, S.Eur
9%, UK 8%, Asia 8%, Benelux 7%,
Scandi 7%. Bks/Tsy 39%, FM 39%, CB/
OI 22%. ESG 40%.
MS+16 area, MS+14 0 >€2.1bn, 82acs Aaa/AAA/AAA BNPP / CMZ / HSBC / Nomura Ger 48%, Fr 17%, Switz/Aus 10%,
(+/-1) Benelux 9%, S.Eur 6%, UK/Ire 6%,
Scandi 2%. AM 45%, CB/OI 25%, Bks/
Tsy 25%, Ins/PF 5%, Other 2%.

International Financing Review July 4 2020 47

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 3/7/2020 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Jul 1 2020 Thuringia €500m Jul 9 2035 0.1 99.94 MS+8 / B+31.9 0.104

Jul 1 2020 Portugal €4bn Oct 12 2035 0.9 99.6 MS+88 / B+111 0.928

Jul 2 2020 Baden-Wuerttemberg €1bn Jul 9 2032 0.01 100.8 MS+1 / B+33.8 -0.06
Jul 2 2020 Hamburg €250m incr Sep 3 2049 0.2 96.64 MS+26 / B+29.9 0.321
(€750m)
STERLING
Jul 1 2020 PRS Finance £63m incr Nov 24 2026 1.75 106.7 G+70 0.671
(£644.94m)
SWISS FRANCS
Jun 29 2020 Rhatische Bahn SFr100m Aug 3 2050 0.05 100 MS+29.5 / Eidg31.2 0.05

NON CORE
Jun 26 2020 Statnett NKr2.25bn Jun 30 2023 0.518 100 - 0.518
Jun 26 2020 Statnett NKr1.25bn Jun 30 2023 3mN+48 100 3mN+48 -
CORPORATES
US DOLLARS
Jun 30 2020 Mondelez International US$1bn Jul 1 2022 0.625 99.986 T+48 0.632

Jun 29 2020 AEP Texas US$600m Jul 1 2030 2.1 99.597 T+150 2.145
Jun 29 2020 Takeda Pharmaceutical US$2.5bn Mar 31 2030 2.05 99.804 T+145 2.072

Jun 29 2020 Takeda Pharmaceutical US$1.5bn Jul 9 2040 3.025 100 T+165 3.025

Jun 29 2020 Takeda Pharmaceutical US$2bn Jul 9 2050 3.175 100 T+180 3.175

Jun 29 2020 Takeda Pharmaceutical US$1bn Jul 9 2060 3.375 100 T+200 3.375

EUROS
Jun 29 2020 SSE €500m Perpetual (Apr 2026) 3.125 100 MS+341.5 / 3.125
B+380.9
Jun 29 2020 Takeda €750m Jul 9 2027 0.75 99.63 MS+105 / B+141.8 0.753

Jun 29 2020 Takeda €850m Jul 9 2029 1 99.4 MS+125 / B+159.3 1.023

Jun 29 2020 Takeda €1bn Jul 9 2032 1.375 99.47 MS+150 / B+188.9 1.385

Jun 29 2020 Takeda €1bn Jul 9 2040 2 98.65 MS+200 / B+225.8 2.043

Jun 30 2020 FCA €1.25bn Jan 7 2026 3.875 100 MS+421.8 / 3.879
B+458.1

Jun 30 2020 FCA €1.25bn Jul 7 2023 3.375 100 MS+376.5 / 3.375
B+407.6

Jun 30 2020 FCA €1bn Jul 7 2028 4.5 100 MS+474.5 / B+511.1 4.5

Jun 30 2020 ISS Finance €500m Jul 7 2025 1.25 99.62 MS+170 / B+203.9 1.329

Jun 30 2020 Mercialys €300m Jul 7 2027 4.625 98.55 MS+518.3 / 4.875
B+555.6
Jun 30 2020 RTE €500m Jul 8 2032 0.625 99.54 MS+77 / B+115.7 0.665

Jun 30 2020 RTE €750m Jul 8 2040 1.125 99.38 MS+110 / B+140.8 1.16

Jun 29 2020 SSE £600m Perpetual (Apr 2026) 3.74 99.96 G+375.6 3.75

Jul 1 2020 Bayer €1.5bn Jul 6 2024 0.375 99.55 MS+85 / B+114.7 0.489

48 International Financing Review July 4 2020

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+9 area - >€750m -/-/AAA Deka / DB / DZ / Helaba / NordLB Ger 86%, Aus/Switz 6%, Other 8%. Bks
/ Uni 31%, CB/OI 35.5%, AM 16.7%, Ins 16.8%.
MS+92 area, MS+89 - €41bn, 380acs Baa3/BBB/BBB/ CaixaBI / CA-CIB / DB / GS / JPM / Fr/It/Sp 32.6%, UK 20.4%, N/Amer
area BBBH Nomura 13.6%, Nordics 10.8%, Ger/Aus/Switz
9.8%, Port 5%, RoEur 4.3%, Asia 0.4%,
RoW 3.1%. FM 48.4%, Bks/PB 25.2%,
Ins/PF HF 5.5%, CB/OI 3.5%, Other
1.7%.
MS+1 area - - Aaa/AAA/NR Deka / DZ / JPM / LBBW / TD / Uni -
MS+27 area - >€370m -/-/AAA BLB / Deka / HSBC / Natx / TD -

0 - - Aa2 HSBC / NatWest -

0.05% area 0 12acs - CS Switz 100%. Ins 37.65%, AM 31.76%, PF

30.59%.

- - - Cicero 2nd Opinion SEB -

- - - Cicero 2nd Opinion SEB -

T+80/+85, -6.5 US$3bn Baa1/BBB BBVA/Citi/TD -

T+50 (+/-2)
T+162.5 area 5 US$950m Baa1/A- Barc/CA-CIB/MUFG/RBC -
T+175 area, 11 US$6bn Baa2/BBB+ BofA/MS -
T+150 (+/-5)
T+195 area, 7 US$5bn Baa2/BBB+ BofA/MS -
T+170 (+/-5)
T+210 area, 8 US$5.5bn Baa2/BBB+ BofA/MS -
T+185 (+/-5)
T+230 area, 8 US$3.2bn Baa2/BBB+ BofA/MS -
T+205 (+/-5)

3.25% area, 3.125% 38 ~€785m Baa3/BBB- Barc / NatWest / BNPP / BofA / MS / -

(#) MUFG / Santan
MS+130 area, 25 >€1.35bn Baa2/BBB+ BofA / MS -
MS+110 area
MS+150 area, 25 >€1.25bn Baa2/BBB+ BofA / MS -
MS+130 area
MS+180 area, 25 >€1.75bn Baa2/BBB+ BofA / MS -
MS+155 area
MS+225 area, 25 >€1.9bn Baa2/BBB+ BofA / MS -
MS+205 area
4.25% area, 4% 88 ~€2.9bn Ba2/BB+/BBB- Citi / GS / Barc / BofA / UBS / BcaIMI -
area, 3.875% / BNPP / CMZ / CA-CIB / CS / RBC
/ SG / Uni
3.75% area, 3.5% 88 ~€3bn Ba2/BB+/BBB- Citi / GS / Barc / BofA / UBS / BcaIMI -
area, 3.375% / BNPP / CMZ / CA-CIB / CS / RBC
/ SG / Uni
5% area, 4.75% 75 ~€3.5bn Ba2/BB+/BBB- Citi / GS / Barc / BofA / UBS / BcaIMI -
area, 4.5% / BNPP / CMZ / CA-CIB / CS / RBC
/ SG / Uni
MS+200/+205, 9 >€1.9bn Baa2/BBB BNPP / Danske / Nordea / SEB / SG -
MS+180 area
5%/5.25%, - ~€700m -/BBB CA-CIB / SG / BNPP / CIC / HSBC / -
4.875%/5% LBP / Natx
MS+105 area, 6 >€1.3bn, 95acs -/A CA-CIB / HSBC / Natx / NatWest / Fr 34%, UK/Ire 23%, Ger/Aus 13%,
MS+85 area SMBC Nikko / SG Benelux 10%, Asia 8%, Nordics 5%,
Switz 4%, S.Eur 3%. AM 44%, Ins 38%,
OI 12%, Bks/PB 5%, Other 1%.
MS+135 area, 20 >€1.6bn, 105acs -/A CA-CIB / HSBC / Natx / NatWest / Ger/Aus 31%, UK/Ire 27%, Fr 11%,
MS+115 area SMBC Nikko / SG Nordics 10%, Benelux 7%, Asia 7%, Switz
3%, S.Eur 3%, Other 1%. AM 49%, Ins
40%, OI 6%, Bks/PB 4%, Other 1%.
3.875%/4%, 3.75% - ~£1bn Baa3/BBB- Barc / NatWest / BNPP / BofA / MS / -
(#) MUFG / Santan
MS+120 area, 15 >€4.1bn Baa1/BBB/BBB+ Citi / DB / Miz / Uni -
MS+95 area

International Financing Review July 4 2020 49

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 3/7/2020 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Jul 1 2020 Bayer €1.5bn Jan 6 2027 0.75 99.28 MS+115 / B+148.3 0.865

Jul 1 2020 Bayer €1.5bn Jan 6 2030 1.125 99.92 MS+130 / B+159.8 1.134

Jul 1 2020 Bayer €1.5bn Jul 6 2032 1.375 99.9 MS+145 / B+181.1 1.384

Jul 1 2020 Infrastrutture Wireless €750m Jul 8 2026 1.875 99.81 MS+220 / B+252.8 1.909
Italiane

Jul 1 2020 Leonardo €500m Jan 8 2026 2.375 98.9 MS+290 / B+322.5 2.59

Jul 2 2020 Fraport €300m Jul 9 2024 1.625 99.61 MS+210 / B+242.1 1.727

Jul 2 2020 Fraport €500m Jul 9 2027 2.125 99.41 MS+250 / B+285 2.217

Jul 2 2020 Logicor €500m Jul 13 2026 1.5 99.83 MS+185 / B+219.5 1.529

Jul 2 2020 National Grid Electricity €750m Jul 7 2032 0.823 100 MS+90 / B+127.5 0.823
Transmission
Jul 2 2020 Vonovia €750m Jul 9 2026 0.625 99.68 MS+100 / B+134.1 0.679

Jul 2 2020 Vonovia €750m Jul 9 2030 1 99.19 MS+125 / B+155 1.086

STERLING
Jul 2 2020 National Grid Electricity £350m Jul 7 2028 1.125 99.53 G+110 1.186
Transmission
NON CORE
Jul 1 2020 Deutsche Bahn A$200m Jul 8 2030 1.987 100 ASW+113 / 1.987
ACGB+105.9
Jul 1 2020 Deutsche Bahn SKr500m Jul 3 2035 1.52 100 - 1.52
Jul 2 2020 Kungsleden SKr250m incr Jun 13 2023 3mS+180 100.9 3mS+150 -
(SKr450m)
Jul 2 2020 Vasakronan SKr150m incr Jun 4 2025 1.165 101.1 - -
(SKr350m)
FINANCIALS
US DOLLARS
Jun 29 2020 AIG Global Funding US$500m Jul 7 2023 0.8 99.923 T+65 0.826

Jun 29 2020 Equitable Financial Life US$650m Jul 7 2025 1.4 99.817 T+115 1.438
Global Funding
Jun 29 2020 Metropolitan Life Global US$750m Jul 2 2025 0.95 99.825 T+70 0.986
Funding
Jun 29 2020 Sumitomo Mitsui Financial US$1.5bn Jul 8 2025 1.474 100 T+120 1.474
Group
Jun 29 2020 Sumitomo Mitsui Financial US$1.5bn Jul 8 2030 2.13 100 T+150 2.13
Group
Jun 30 2020 Guardian Life Global US$400m Jul 6 2027 1.4 99.834 T+93 1.425
Funding
Jun 30 2020 Societe Generale SP US$500m Jul 8 2025 1.375 99.721 T+115 1.433

Jun 30 2020 Societe Generale T2 US$500m Jul 8 2035 3.653 100 T+300 3.653
(Jul 2030)
EUROS
Jun 29 2020 Hannover Re €500m Oct 8 2040 (Oct 2030) 1.75 99.27 MS+200 1.829

Jun 30 2020 Euroclear Bank €500m Jul 7 2025 0.125 99.51 MS+58 / B+92.1 0.223

Jul 1 2020 CaixaBank €1bn Jul 10 2026 (Jul 2025) 0.75 99.58 MS+117 / B+148.2 0.835

Jul 2 2020 UNIQA €600m Jul 9 2030 1.375 99.44 MS+160 / B+190.2 1.436

Jul 2 2020 UNIQA €200m Oct 9 2035 (Oct 2025) 3.25 99.51 MS+370 / B+403.1 3.356

50 International Financing Review July 4 2020

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+140 area, 15 >€3.3bn Baa1/BBB/BBB+ Citi / DB / Miz / Uni -

MS+120 area
MS+160 area, 5 >€3.8bn Baa1/BBB/BBB+ Citi / DB / Miz / Uni -
MS+140 area
MS+180 area, -5 >€4.6bn Baa1/BBB/BBB+ Citi / DB / Miz / Uni -
MS+155 area
MS+260/+270, - >€4bn -/BB+/BBB- BNPP / Medio / Akros / BBVA / BofA -
MS+230 area / CA-CIB / HSBC / BcaIMI / SMBC
Nikko / Uni
MS+330 area, 20 >€2bn Ba1/BB+/BBB- BcaIMI / BNPP / CA-CIB / HSBC / SG -
MS+300 area / Uni / Akros / NatWest / UBI
MS+220 area, - ~€375m - DB / Helaba / HSBC / Uni -
MS+210(#)
MS+260 area, - ~€640m - DB / Helaba / HSBC / Uni -
MS+250(#)
MS+220 area, 1 >€2.2bn -/BBB JPM / MS / BoC / BNPP / GS / UBS -
MS+195 area
MS+115/+120 - >€1.7bn A3/A-/A BoC / Barc / Citi / ING / Lloyds -

MS+145/+150, -7 >€1.8bn -/BBB+/-/A- Scope CS / MS / SG / Uni -

MS+115 area
MS+165/+170, 0 >€1.25bn -/BBB+/-/A- Scope CS / MS / SG / Uni -
MS+135 area

G+125/+130 - >£750m A3/A-/A BoC / Barc / Citi / ING / Lloyds -

- - - Aa1/AA- Daiwa / HSBC / RBC -

- - - Aa1/AA- SEB -
- - - Baa3 Danske -

- - - CICERO Danske -

T+90 area, 1 US$1.8bn A2/A+ DB/GS/JPM

T+70 (+/-5)
T+137.5 area, - US$1.9bn A2 BNPP/Citi/JPM
T+120 (+/-5)
T+90 area, 1 US$1.35bn Aa3/AA-/AA- BofA/HSBC/JPM/MS
T+70 (the #)
T+145 area, 11 US$3.4bn A1/A- SMBC/GS/Citi/JPM
T+120 (the #)
T+175 area, 9 US$2.7bn A1/A- SMBC/GS/Citi/JPM
T+150 (the #)
T+105-110, 7 US$600m Aa2/AA+ DB/JPM/MS
T+95 (+/-2)
T+125/+130, - US$1bn A1/A/A SG/CS/JPM/MS/WFS USA 66%, Eur 17%, Asia 16%, Other 1%.
T+115 (the #) AM 60%, Bks 21%, Ins/PF 11%, CB/OI
6%, HF 2%.
T+310 area, - US$1.5bn Baa3/BBB-/BBB SG/CS/JPM/MS/WFS USA 55%, Asia 32%, Eur 11%, Other 2%.
T+300 (the #) AM 50%, Ins/PF 35%, Bks 9%, HF 6%.

MS+225 / B+229.9, - >€1.45bn, 107acs -/A DB / JPM / SG / Uni Fr 43.4%, Ger/Aus/Switz 23.3%, UK/
MS+200/+205 Ire 14.1%, Scandi 6.1%, Benelux 6.3%, It
4.6%, Other 2.3%. AM/PF 66.5%, Ins
24.3%, Bks 4.2%, OI 3.6%, Other 1.4%.
MS+80/+85, MS+60 -2 >€2.3bn, 140acs -/AA/AA+ Barc / CA-CIB / GS / JPM / SG Ger/Aut/Switz 44%, Benelux 21%, UK/
(+/-2) Ire 17%, Fr 9%, S.Eur 6%, Asia 2%, Other
1%. AM 61%, Ins/PF 18%, Bks/PB 12%,
CB/OI 9%.
MS+150 area, 0 >€2.8bn Baa1/BBB+/A-/A Caixa / HSBC / ING / Natx / Uni Fr 40%, UK/Ire 15%, Iberia 15%, Ger/
MS+120 (+/-3) Aus 8%, Asia/ME 8%, Benelux 6%, It
3%, Nordics 3%, Other 2%. FM 67%, Bks
12%, CB/OI 11%, Ins/PF 9%, Other 1%.
MS+200 area, - >€3.3bn -/A- HSBC / RBI / JPM -
MS+170 area
MS+435 area, - >€2bn -/A- HSBC / RBI / JPM -
MS+390 area

International Financing Review July 4 2020 51

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 3/7/2020 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

STERLING
Jul 1 2020 Shawbrook Group £75m Oct 10 2030 (Oct 2025) 9 100 G+903.7 9
SWISS FRANCS
Jun 29 2020 Baloise Holding SFr175m Dec 16 2026 (Sep 2026) 0.25 100.2 MS+68 / Eidg+78 0.215

Jun 29 2020 Baloise Holding SFr125m Dec 16 2030 (Sep 2030) 0.5 100.1 MS+77 / Eidg+90.6 0.49

Jul 3 2020 Raiffeisen Schweiz SFr112m Jul 15 2022 0 100 MS+64 0

NON CORE
Jul 1 2020 MyState A$25m Jul 10 2030 (Jul 2025) BBSW+435 100 BBSW+435 -

Jul 1 2020 Sparbanken Sjuharad SKr300m Jan 3 2023 0.763 100 - 0.763
Jul 3 2020 Nykredit Realkredit NKr1.75bn Jul 7 2025 3mN+125 100 3mN+125 -
Jul 3 2020 Swedbank NKr200m Jul 7 2025 3mN+74 100 3mN+74 -
COVERED BONDS
EUROS
Jun 30 2020 Berlin Hyp €500m Jul 7 2028 0.01 101.9 MS+5 / B+40.8 -0.23

Jun 30 2020 NN Bank €500m Jul 8 2030 0.01 100.6 MS+15 / B+45.8 -0.54

Jul 1 2020 Sparebanken Vest €500m Jun 28 2027 0.01 101.2 MS+11 / B+45.5 -0.16
Boligkreditt
SWISS FRANCS
Jun 30 2020 PfZ SFr287m incr Apr 23 2032 0.125 100.5 MS+32 / Eidg+50.8 0.084
(SFr696m)
Jun 30 2020 PfZ SFr587m incr Apr 9 2029 0.3 102.6 MS+36.5 / 0
(SFr936m) Eidg+52.7
Jun 30 2020 PfZ SFr335m Jul 13 2035 0.2 100.5 MS+31 / Eidg+50.6 0.167
HIGH YIELD
US DOLLARS
Jun 29 2020 Garda World Security US$120m Feb 15 2027 4.625 98 - 4.982
(Feb 2022)
Jun 29 2020 Enviva Partners US$150m Jan 15 2026 6.5 103.75 - 5.261
inc (outs (Nov 20211)
US$736.735m)
Jun 30 2020 AMS AG US$400m Jul 31 2025 (Jul 2022) 7 99 7% at 99.00 -

Jun 30 2020 PowerTeam Services US$150m Dec 4 2025 9.033 100.25 - 8.962
inc (outs (Dec 2023)
US$736.735m)
Jun 30 2020 ThyssenKrupp Elevator US$1.56m Jul 15 2027 (Jul 2023) 5.25 100 T+475 5.25
Jun 30 2020 ThyssenKrupp Elevator US$445m Jul 15 2028 (Jul 2023) 7.625 100 T+707 7.625
Jun 30 2020 Winnebago Industries US$300m Jul 15 2028 6.25 100 T+570 6.25
(Jul 2023)
Jul 1 2020 Fortera US$500m Jul 15 2025 6.5 100 T+619 6.5
(Jul 2022)
Jul 1 2020 New Enterprise Stone & Lime US$200m Jul 15 2028 9.75 100 T+918 9.75
(Jul 2023)
EUROS
Jun 30 2020 AMS AG €650m Jul 31 2025 (Jul 2022) 6 99 - -

Jun 30 2020 ThyssenKrupp Elevator €500m Jul 15 2027 (Jul 2021) E+475bp, 0% floor 99.5 - -
Jun 30 2020 ThyssenKrupp Elevator €1.1bn Jul 15 2027 (Jul 2023) 4.375 100 T+501bp 4.375

Jun 30 2020 ThyssenKrupp Elevator €650m Jul 15 2028 (Jul 2023) 6.625 100 T+721bp 6.625
Jul 2 2020 Algeco €175m Feb 15 2023 6.5 94 B+983 9.14
Jul 2 2020 Renk €320m Jul 15 2025 (Jul 2022) 5.75 100 B+641 5.75

Jul 2 2020 Titan Global Finance €250m Jul 9 2027 (Jan 2027) 2.75 100 B+332 2.75

STERLING
Jul 2 2020 B&M Retail £400m Jul 15 2025 (Jul 2022) 3.625 100 G+365 3.625

52 International Financing Review July 4 2020

 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

9% yld (the #) - - - ABN / DB -

MS+66/+68 0 - -/A- CS / UBS Switz 100%. AM 90.66%, Ins 3.81%, PB

2.99%, PF 2.54%.
MS+74/+77 0 - -/A- CS / UBS Switz 100%. AM 64.37%, PF 17.24%, Ins
11.56%, Tsy 3.56%, PB 3.27%.
MS+60/+65 0 - A3 Valyo -

BBSW+450/+460, - - Baa3 NAB -

BBSW+435/+450
- - - - SEB -
- - - -/BBB+/A SEB -
- - - Aa3/A+/AA- SEB -

MS+8 area, MS+6 - €950m Aaa ABN / CA-CIB / CMZ / DZ / LBBW -

(+/-1)
MS+20 area 3 €1.7bn -/AAA BNPP / ING / LBBW / Rabo / Uni Ger/Aus 32%, Benelux 26%, Nordics
17%, Fr 10%, UK/Ire 8%, Switz 3%, Other
4%. AM 46%, Bks 31%, CB/OI 18%, Ins/
PF 5%.
MS+15 area, MS+12 - €1bn Aaa ING / CS / LBBW / Natx / SEB / Swed -
(+/-1)

MS+32 - - Aaa/-/-/ZKB AAA SKB -

0 - - Aaa/-/-/ZKB AAA SKB -

MS+31 - - Aaa/-/-/ZKB AAA SKB -

98.00-98.50 - - B1/B BofA/Barc/JPM/Apollo/TD/Jeff/ -

RBC/ Scotia/UBS
103.50-104.00 - - B1/B+/BB- Barc/BMO/Citi/GS/HSBC/JPM/RBC -

- - - Ba3/BB-/BB- UBS / HSBC / BofA / Citi / CMZ / CA- -

CIB / DB / MS
- - - B3/B- BNPP/UBS/BMO/MUFG/DB/Miz/ -
BofA

5.5% area, 5.25% - - B1/B/B+ Barc / CS / GS / DB / RBC / UBS -

7.75%/8%, 7.625% - - Caa1/CCC/CCC+ Barc / CS / GS / DB / RBC / UBS -
6.50%/6.75%, - - B2/BB JPM/GS/BMO -
6.25%/6.5%
6.75% area - - B3/B- BofA/GS/STRH/CS/DB/RBC -

9.75%/10% - - Caa1/CCC+ GS -

6% area - - Ba3/BB-/BB- UBS / HSBC / BofA / Citi / CMZ / CA- -

CIB / DB / MS
E+475 @99.50, - - B1/B/B+ Barc / CS / GS / DB / RBC / UBS -
4.5%/4.75%, - - B1/B/B+ Barc / CS / GS / DB / RBC / UBS -
0.04375
6.75%/7%, 0.06625 - - Caa1/CCC/CCC+ Barc / CS / GS / DB / RBC / UBS -
94.00 px - - B2/B-/B+ GS / BofA / DB -
6%/6.25%, - - B1/B/- GS / CMZ / CS / DB / Uni -
5.75%/6%
2.875%/3.125%, - - -/BB/- HSBC / SG / Citi / ABN / BNPP / RBI -
2.875% area

3.75%/4%, 3.75% - - Ba3/BB-/- BNPP / HSBC / Barc / BofA / CMZ / -

(+/-12.5), 3.625% GS / Lloyds

International Financing Review July 4 2020 53

GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (3/7/2020)
Moody’s S&P Fitch Moody’s S&P Fitch
Sovereign 1 2 3 4 5 6 Sovereign 1 2 3 4 5 6
Abu Dhabi Aa2 – AA AA+ AA AA+ Laos – – – – B– n BBB+
Albania B1 Ba2 B+ BB – – Latvia A3 Aaa A AAA A– AAA
Andorra – Ba2 BBB AAA BBB+ A+ Lebanon Caa2 Caa1 CCC n CCC CC CCC
Angola B3 B2 B– n B– Bn B Lesotho – – – – B B+
Argentina Caa2 Caa1 CC n B– RD CCC Liechtenstein – Aaa AAA AAA – –
Armenia Ba3 Ba1 – – BB– BB Lithuania A3 p Aaa A AAA A– p AAA
Aruba – – BBB+ n BBB+ BBB– n BBB Luxembourg Aaa Aaa AAA AAA AAA AAA
Australia Aaa Aaa AAA AAA AAA n AAA Macau Aa3 Aa2 – – AA n AAA
Austria Aa1 Aaa AA+ AAA AA+ AAA Macedonia (FYR) – – BB– BB BB+ n BBB–
Azerbaijan Ba2 Ba2 BBn BB+ BB+ BB+ Malaysia A3 A1 A– n d A+ A– A
Bahamas Ba2 n Baa1 BB+ BBB– – – Maldives B2 n Ba3 – – Bn B
Bahrain B2 Ba3 B+ p BB– BB– BBB– Malta A2 Aaa A– p AAA A+ AAA
Bangladesh Ba3 Ba2 BB– BB– BB– BB– Mauritius Baa1 A2 – – – –
Barbados Caa1 B2 B– B– – – Mexico Baa1 n A1 BBB+ n A+ BBB– BBB+
Belarus B3 B3 B B B B Moldova B3 B2 – – – –
Belgium Aa3 Aaa AA AAA AA– AAA Mongolia B3 n B1 B B+ B B+
Belize Caa1 n B1 CC n CC d – – Montenegro B1 p Ba1 B+ n AAA – –
Bermuda A2 Aa3 A+ AA+ – – Montserrat – – BBB– BBB– – –
Bolivia Ba3 Ba2 B+ B+ B+ B+ Morocco Ba1 Baa2 BBB– BBB+ BBB– n BBB
Bosnia Herzegovina B3 B3 B BB– – – Mozambique Caa2 Caa1 CCC+ CCC+ CCC B–
Botswana A2 n Aa3 A– A+ – – Namibia Ba2 n Baa3 – – BB BB+
Brazil Ba2 Ba1 BB– BB+ BB– n BB Netherlands Aaa Aaa AAA AAA AAA AAA
Bulgaria Baa2 A3 BBB A BBB p A– New Zealand Aaa Aaa AA p AAA AA AAA
Cambodia B2 B1 – – – – Nicaragua B2n B1 B– B– B– n B–
Cameroon B2 Ba2 Bn BBB– Bn BB+ Nigeria B2 n B1 B B+ B+ n B+
Canada Aaa Aaa AAA AAA AA+ AAA Norway Aaa Aaa AAA AAA AAA AAA
Cape Verde – – B BB– B– B Oman Ba3 n Baa3 BB n BB+ BB+ BBB–
Cayman Islands Aa3 Aa2 – – – – Pakistan B3 B2 B– B– B– B–
Chile A1 Aa2 A+ AA A AA Panama Baa1 A2 BBB+ n AAA BBB A
China A1 Aa3 A+ A+ A+ A+ Papua New Guinea B2 B1 B– B– – –
Colombia Baa2 A3 BBB– BBB+ BBB n BBB+ Paraguay Ba1 Baa3 BB BB+ BB+ BB+
Congo (DR) B3 n B3 CCC+ CCC+ – – Peru A3 A1 BBB+ A BBB+ A–
Congo (Rep) Caa2 n B2 B– BBB– CCC B+ Philippines Baa2 A3 BBB+ A– BBB p BBB+
Cook Islands – – B+ AAA – – Poland A2 Aa3 A– A A– AA–
Costa Rica B2 n Ba2 B– n BB– Bn B+ n Portugal Baa3 p Aa3 BBB AAA BBB AA
Cote d’Ivoire Ba3 Baa3 – – B+ p BBB– Qatar Aa3 Aa3 AA– AA AA– AA
Croatia Ba2 p Baa3 BBB BBB+ BBB– p BBB+ Ras al–Khaimah A AA+ A AA+
Cuba Caa2 Caa2 – – – – Romania Baa3 n A3 BBB– A– BBB– n BBB+
Curacao – – BBB+ BBB+ – – Russia Baa3 Baa2 BBB– BBB BBB BBB
Cyprus Ba2 p A2 BBB– AAA BBB– p A Rwanda B2 B1 B+ B B+ B+
Czech Rep Aa3 Aa1 AA– AA+ AA– AAA St Vincent & Gren B3 Ba3 – – – –
Denmark Aaa Aaa AAA AAA AAA AAA San Marino – – – – BBB– n BBB+
Dominican Rep Ba3 Ba1 BB– n BB+ BB– BB– Saudi Arabia A1 n A1 A– A A A+
Ecuador B3 n B2 B– B– RD CCC Senegal Ba3 Baa1 B+ BBB– – –
Egypt B2 B1 B B B+ B+ Serbia Ba3 Ba1 BB+ BBB– BB+ BBB–
El Salvador B3 B1 B– AAA B– n B Seychelles – – – – B+ BB
Estonia A1 Aaa AA– AAA AA– AAA Singapore Aaa Aaa AAA AAA AAA AAA
Ethiopia B2 B1 B B Bn B Slovakia A2 Aaa A+ AAA A AAA
Fiji Ba3 n d Ba3 BB– BB– – – Slovenia Baa1 p Aa1 AA– AAA A AAA
Finland Aa1 Aaa AA+ AAA AA+ p AAA Solomon Islands B3 B2 – – – –
France Aa2 p Aaa AA AAA AA n AAA South Africa Baa3 n A3 BB– BB+ BB+ n BBB–
Gabon Caa1 p B1 B BB+ South Korea Aa2 Aa1 AA AAA AA– AA+
Georgia Ba2 Baa3 BB BBB– BB n BBB– Spain Baa1 Aa1 A AAA A– AAA
Germany Aaa Aaa AAA AAA AAA AAA Sri Lanka B2 Ba3 B– B– B– n B–
Ghana B3 n B1 Bn B+ B B Suriname B2 Ba3 B B+ Cd CCC d
Greece B1 Baa1 BB– AAA BB BBB+ Sweden Aaa Aaa AAA AAA AAA AAA
Guatemala Ba1 Baa3 BB– BB+ BB n BB+ Switzerland Aaa Aaa AAA AAA AAA AAA
Honduras B1 Ba2 BB– BB – – Tanzania B1n Ba3 – – – –
Hong Kong Aa2 n Aaa AA+ AAA AA– AAA Taiwan Aa3 Aa2 AA– AA+ AA– AA+
Hungary Baa3 Baa1 BBB A– BBB A Thailand Baa1 A2 BBB+ A BBB+ p A–
Iceland A3 p A3 A A An A+ Trinidad & Tobago Ba1 n Baa3 BBB BBB+ – –
India Baa3 n Baa1 BBB– BBB+ BBB– BBB– Tunisia B2 n Ba3 – – B B+
Indonesia Baa2 A3 BBB n BBB+ BBB BBB Turkey B1n B1 B+ BB– BB– BB–
Iraq Caa1 B3 B– AAA B– n B– Turks & Caicos – – BBB+ AAA – –
Ireland A2 Aaa AA– AAA A+ AAA Uganda B2 Ba3 BB A– B+ n B+
Israel A1 Aa3 AA– AA+ A+ AA Ukraine B3 B3 B B Bp B
Italy Baa3 Aa3 BBB n AAA BBB– AA– UAE Aa2 Aa2 – – – –
Jamaica B2 Ba3 B+ n BB– B+ BB– UK Aa2 Aaa AA + AAA AA n AAA
Japan A1 p Aaa A+ AA+ A AAA USA Aaa Aaa AA+ AAA AAA AAA
Jordan B1 Ba1 B+ BB BB– n BB Uruguay Baa2 A2 BBB A– BBB– n BBB+
Kazakhstan Baa3 p Baa2 BBB– BBB BBB BBB+ Uzbekistan – – BB– n BB–
Kenya B2 n Ba3 B+ BB– B+ BB– Venezuela C Ca SD CC – –
Kuwait Aa2 Aa2 AA AA+ AA AA+ Vietnam Ba3 Ba1 BB BB BB p BB
Kyrgyzstan B2 Ba3 – – – – Zambia Caa2 n B3 CCC+ CCC+ CCC B–

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

54 International Financing Review July 4 2020

 EMERGING MARKETS China 56 India 56 Philippines 56 South Korea  Poland 60 Russia 60
South Africa  Israel û Jordan  Brazil  Mexico  Uruguay 

„ FRONT STORY TURKEY

Akbank paves the way for Turkish supply

Timing and pricing on deal surprises some
AKBANKûONû4UESDAYûBECAMEûTHEûlRSTû4URKISHû almost as good a time as it has been in 2020. CURVEûWASûTHEûû-ARCHûûBONDû
borrower in the international bond markets 4HEYûHAVENTûISSUEDûWHOLESALEûFUNDINGûFORûAû WHICHûTHEYûSPOTTEDûATû
SINCEûTHEûGLOBALûOUTBREAKûOFû#OVID ûASûITû LONGûWHILEûSOûTHEYûFELTûITûMADEûSTRATEGICû !ûPEAKûBOOKûOFûMOREûTHANû53BNû
TOOKûADVANTAGEûOFûTHEûLACKûOFûSUPPLY SENSEûTOûOPPORTUNISTICALLYûBEûINûTHEûMARKETû ENABLEDûTHEMûTOûRElNEûPRICINGûTOûn
4URKISHûISSUANCEûHADûCOMEûTOûSTANDSTILLû PARTICULARLYûATûAûTIMEûWHENû4URKISHûISSUANCEû ûBEFOREûLAUNCHINGûATûTHEûTIGHTûENDû
THANKSûTOûAûCOMBINATIONûOFûTHEûCORONAVIRUSû HASûBEENûQUIETv 'IVENûTHEûSTEEPNESSûOFû4URKISHûCURVESûTHEû
RISINGûINmATIONûAûPOORLYûPERFORMINGû !LTHOUGHûTHEûLIRAûISûONEûOFûTHEûWORST LEADûSAIDûTHEûlNALûYIELDûIMPLIEDûTHEREûWASûNOû
CURRENCYûANDûGEOPOLITICALûUNCERTAINTYû performing emerging market currencies concession.
"UTûDESPITEûALLûOFûTHISûTHEû53Mû THISûYEARûANDûINmATIONûISûRISINGûAGAINûSOMEû h)TûWASûAGGRESSIVEûPRICINGvûSAIDûTHEû
&EBRUARYûûNOTEûWASûPRICEDûAGGRESSIVELYû OTHERûMACROECONOMICûINDICATORSûHAVEû BANKERûAWAYûADDINGûTHATûITûWASûGOODûSEEûAû
WITHûONEûLEADûSAYINGûITûCAMEûWITHûNOûISSUEû offered a more hopeful outlook for the 4URKISHûBANKûINûTHEûMARKET
PREMIUMû4HEûBONDSûTHENûTRADEDûTIGHTERûINû COUNTRY 4HEûBIGûQUESTIONûISûNOWûWHETHERûOTHERû
THEûSECONDARYûMARKETûDESPITEûTHEûBOOKû 4URKISHûMANUFACTURINGûACTIVITYûEXPANDEDû 4URKISHûlNANCIALûINSTITUTIONSûWILLûFOLLOWû
BEINGûONLYû53BNûATûLAUNCH INû*UNEûFORûTHEûlRSTûTIMEûSINCEû&EBRUARYû 4HEREûISûAûPIPELINEûANDûBANKERSûSAIDûCALLSû
h4HEûDEALûWORKEDûVERYûWELLvûSAIDûTHEû WHILEûTHEûCOUNTRYSûECONOMICûCONlDENCEû were being held with their clients.
LEADûh)TûISûTRADINGûBPûTIGHTERûINûSECONDARYû INDEXûINCREASEDûTOûûPOINTSûINû*UNEûUPû !LLOCATIONûSTATISTICSûHAVEûYETûTOûBEû
SOû)ûTHINKû;WEûHITûTHE=ûBULLSEYEûFROMûAû ûONûAûMONTHLYûCOMPARISONûBASIS ANNOUNCEDûTHOUGHûABOUTûONE lFTHûOFûTHEû
PRICINGûSTANDPOINTv Akbank’s deal came out of the blue to BONDSûWENTûTOû53ûACCOUNTSûWITHûSOLIDû5+û
He said strong technicals as well as better SOMEûh)ûWASûSURPRISEDvûSAIDûONEûBANKERû ANDû%UROPEANûPARTICIPATIONûTOO
SENTIMENTûTOWARDSû4URKISHûASSETSûINûRECENTû AWAYûWHOûHADNTûBEENûCONTEMPLATINGû Bank of America, Citigroup, Emirates NBD
WEEKSûWORKEDûINûTHEûDEALSûFAVOUR 4URKISHûBANKûISSUANCE Capital, ICBC, SMBC Nikko and Standard Chartered
h7HENûYOUûTHINKûABOUTûTHEûALIGNMENTûOFû ,EADSûBEGANûMARKETINGû!KBANKû"n" û WEREûTHEûLEADSûONûTHEû!2EGû3ûISSUEû
GOODûMACROûANDû4URKEYûTRADINGûWELLûTHISûISû INûTHEûLOWûûAREAû4HEûNEARESTûPOINTûONûTHEû Sudip Roy

Rumo debuts in green bond space

Rare issuer gets its green account rolling
Brazilian railroad operator RUMO brought h(OWEVERûYOUûTRIANGULATEûITûYOUûGETûINûTHEû &ITCHûSAIDûEARLIERûTHISûMONTHûTHATû#OVID
ITSûlRSTûEVERûGREENûBONDûLASTû4UESDAYû LOWûSvûSAIDûTHEûBANKER ûWOULDûHAVEûAûLIMITEDûIMPACTûONû2UMOSû
RAISINGû53MûTHROUGHûAûSEVEN YEARû !NDûTHEûBONDûCOULDûRALLYûIFûANALYSTSûFAIRû BUSINESSûWHICHûWILLûBENElTûFROMûTHEû
issue that saw order books hit US$2.2bn. VALUEûCALCULATIONûANDûTHEûTIGHTERûYIELDSûTHATû CONTINUEDûEXPANSIONûOFû"RAZILIANû
Proceeds from the dollar deal – Rumo’s AREûEXPECTEDûFROMûGREENûISSUESûPLAYûOUT agribusiness.
lRSTûSINCEûûnûWILLûGOûTOWARDSûUPDATINGû h)ûSEEûFAIRûVALUEûATûAROUNDûûTOûû h)TûISûPRETTYûWELLûTHEûONLYûWAYûYOUûCANû
ITSûRAILWAYûSYSTEMûTOûIMPROVEûFUELû PARTICULARLYûGIVENûTHEûGREENûBONDû TRANSPORTûCOMMODITIESû;INû"RAZIL=ûSOûTHEYû
EFlCIENCYûANDûLOWERûGREENHOUSEûEMISSIONS CHARACTERISTICSûOFûTHEûNEWûISSUEûWHICHû HAVENTûBEENûIMPACTEDûBYû#OVIDvûSAIDûTHEû
With strong demand from around 200 USUALLYûCOMMANDûAûPREMIUMvûSAIDû).4,û banker.
ACCOUNTSûLEADSûWEREûABLEûTOûTIGHTENûPRICINGû &#34/.%ûANALYSTû2AFAELû%LIASûINûAûREPORT “People need to eat and there is
from initial thoughts of mid to high 5% to /THERSûHOWEVERûWEREûLESSûCERTAINûABOUTû a huge demand for agriculture
LANDûTHEûDEALûATûPARûTOûYIELDû THEûIMPROVEDûPRICINGûDYNAMICSûFORûGREENû PRODUCTSv
&INALûPRICINGûPUTûITûmATûTOûBPûOVERûITSû BONDSûATûLEASTûINû,ATINû!MERICA Fitch estimates that Rumo can maintain
CURVEûWHEREûTHEûSûWHICHûAREûCALLABLEû “I wasn’t counting on the [green element] LOWûTOûMODERATEûLEVERAGEûOVERûTHEûMEDIUMû
INûTWOûYEARSûWEREûTRADINGûATûAROUNDûû AFFECTINGûTHEûPRICEûMUCHûITSûHARDûTOûTELLvû TERMûJUMPINGûTOûXûNEXTûYEARûWHENûTHEû
SAIDûONEûBANKERûWHOûCALCULATEDûAûBPn SAIDûAû.EWû9ORK BASEDûANALYST COMPANYSûCAPEXûSPENDINGûWILLûREACHûITSû
BPûEXTENSIONûTOûGETûFROMûTWOûTOûSEVENû h)NûOTHERûGREENûBONDSûINû,ATINû!MERICAûITû peak.
YEARS looked like the green bond characteristic 4HEûDEALûWASûLEDûBYûItau BBA, Morgan
/THERSûWEREûTAKINGûTHEûSûISSUEDûBYû DIDNTûIMPACTûTHEûPRICEûMUCHv Stanley and Santander as global coordinators.
Rumo’s parent Cosan – which were trading %ITHERûWAYûASûONEûOFûTHEûLARGESTûRAILWAYû Bradesco BBI, BTG Pactual, Citigroup, Goldman
ATûAROUNDûûnûANDûCALCULATINGûFORûTHEû OPERATORSûINû"RAZILûTHEûCREDITûWASûSEENûASûAû Sachs and JP MorganûWEREûJOINTûBOOKRUNNERSû
difference between holdco and opco debt RELATIVELYûSAFEûPLAYûINûAûCOUNTRYûTHATûHASû 4HEûDEALûISûRATEDû""n""
and the shorter tenor. BEENûHITûHARDûBYûTHEû#OVID ûPANDEMIC Miluska Berrospi

International Financing Review July 4 2020 55

 Hilong has hired Admiralty Harbour Capital
ASûlNANCIALûADVISERûANDûSidley Austin as legal PHILIPPINES
ASIA-PACIFIC ADVISERûTOûHELPûWITHûTHEûTALKS
4HEûûANDûSûWEREûSEENûATû JG SUMMIT PRICES FLAT TO CURVE
RESPECTIVEûCASHûPRICESûOFûûANDûûFOLLOWINGû
CHINA the announcement. Philippine conglomerate JG SUMMIT last
4HURSDAYûPRICEDûAû53Mû
YEARûBONDû
RESTRUCTURING LOOMS FOR HILONG mATûTOûITSûCURVEûBENElTINGûFROMûTHEûRARITYû
INDIA of the credit and its strong presence in the
HILONG HOLDINGS is looking for a “consensual DOMESTICûECONOMY
RESOLUTIONvûWITHûBONDHOLDERSûAFTERûANû VEDANTA AMENDMENTS APPROVED 4HEûSENIORûUNSECUREDûNOTESûWASûPRICEDû
EXCHANGEûOFFERûFORûITSû53ûDOLLARûBONDSûFAILED ATûPARûTOûYIELDûûINSIDEûINITIALû
4HEû(ONGû+ONG
LISTEDû#HINESEûOILlELDû Holders of VEDANTA RESOURCES‘ US dollar GUIDANCEûINûTHEûûAREAûAFTERûDRAWINGû
EQUIPMENTûANDûSERVICESûPROVIDERûHADûBEENû BONDSûHAVEûAGREEDûTOûAMENDMENTSûOFû lNALûORDERSûOFûOVERû53BNûFROMûû
TRYINGûTOûCONVINCEûHOLDERSûOFû53Mû CERTAINûCOVENANTSûTOûGIVEûTHEûCOMPANYû ACCOUNTSû"OOKSûEXCEEDEDû53BNûWHENû
OFûûSENIORûUNSECUREDûNOTESûMATURINGû MOREûmEXIBILITYûTOûINCURûDEBTûASûCHAIRMANû lNALûGUIDANCEûWASûANNOUNCED
ONû*UNEûûTOûEXCHANGEûTHEMûFORûNEWûNOTES !NILû!GARWALûTAKESû)NDIA
LISTEDûINDIRECTû 4HEû2EGû3ûDEALûPAIDûNOûNEW
ISSUEû
)TûREQUIREDûHOLDERSûOFûûOFûTHEûNOTESûTOû SUBSIDIARYûVEDANTA LIMITEDûPRIVATE CONCESSIONûACCORDINGûTOûBANKERSûONûTHEû
AGREEûTOûTHEûEXCHANGEûBUTûFELLûSHORTûEVENûAFTERû 4HEû)NDIANûENERGYûANDûMETALSûPRODUCERû DEALûEVENûTHOUGHûITûWASûUNRATEDûANDû
EXTENDINGûTHEûDEADLINEûANDûSWEETENINGûTHEû obtained the consent from holders of its DESPITEûTHEûHEAVYûTOLLûTHEûCORONAVIRUSû
TERMSû!TûTHEûLASTûUPDATEûHOLDERSûOFûûOFû 53MûûSû53BNûû crisis is taking on the borrower’s
THEûBONDSûHADûAGREEDûTOûEXCHANGE Sû53MûûSû53BNû petrochemicals and airline businesses.
5NDERûTHEûIMPROVEDûVERSIONûOFûTHEûOFFERû ûSû53MûûSûANDû *'û3UMMITSûlRST
QUARTERûREVENUEû
BONDHOLDERSûCOULDûEXCHANGEû53ûINû US$600m 9.25% 2026s. DROPPEDûûFROMûAûYEARûEARLIERûWHILEûNETû
principal of the 2020 notes for US$900 in (OLDERSûOFûTHEûSûWILLûRECEIVEûAû INCOMEûPLUNGEDûûTOû0SBNû53M û
PRINCIPALûAMOUNTûOFûNEWû
YEARû53ûDOLLARû PAYMENTûOFû53ûPERû53ûOFû ACCORDINGûTOûITSûlRST
QUARTERûINVESTORû
SENIORû2EGû3ûNOTESûDUEûûANDû53ûINû PRINCIPALûIFûTHEYûAGREEDûTOûTHEûCHANGESûBYûANû PRESENTATIONû4HEûCOMPANYûSAIDûTHEû
cash as an upfront consideration plus US$5 EARLY
BIRDûDEADLINEûOFû*UNEûûWHILEûHOLDERSû decline was due to the disruption caused
INûCASHûASûANûEARLY
BIRDûINCENTIVEû4HEû of the other bonds will get US$5.00. BYûTHEûCORONAVIRUS
MINIMUMûYIELDûFORûTHEûNEWûSûWASû 4HEûOFFERûDROPPEDûTOû53ûPERû h*'û3UMMITûISûONEûOFûTHEûBEST
IN
CLASSû
INDICATEDûATû 53ûFORûALLûBONDSûTENDEREDûAFTERûTHEû names in the Philippines and there was a
/Nû*UNEûû(ILONGûSAIDûTHEûDEFAULTûONûTHEû EARLY
BIRDûDEADLINEû4HEûOFFERûCLOSEDûONû HIATUSûOFûSEVENûYEARSûTHATûFURTHERû
ûSûHADûTRIGGEREDûAûCROSS
DEFAULTûONû June 26. SUPPORTEDûINVESTORûDEMANDvûSAIDûAûBANKERû
53MûûSENIORûNOTESûDUEûû)NûAû Credit Suisse and JP Morgan were on the deal.
STOCKûEXCHANGEûlLINGûONû4UESDAYûEVENINGûITû SOLICITATIONûAGENTSûANDûMorrow Sodali was 4HEûISSUERûPREVIOUSLYûVISITEDûTHEû
SAIDûITûHADûNOTûYETûRECEIVEDûANYûNOTICEûOFû information agent. INTERNATIONALûBONDûMARKETûINûûTOûRAISEû
ACCELERATIONûFORûTHEûSûORûANYûOTHERûDEBT )Nûû3TERLITEûMERGEDûWITHû3ESAû'OAû 53MûFROMûAû
YEARûBOND
(ILONGûSAIDûITûHADûRECEIVEDûAûLETTERûONû*UNEû TOûCREATEû3ESA
3TERLITEûLATERûRENAMEDû &AIRûVALUEûWASûEXTRAPOLATEDûBYûREFERENCEû
ûFROMûAûGLOBALûLAWûlRMûPURPORTINGûTOû 6EDANTAû,IMITEDûBEFOREûCOMBININGûWITHû TOûTHEûISSUERSûûSûANDûTHEûRECENTû
represent holders of more than 25% of the #AIRNû)NDIAûINûû6EDANTAû2ESOURCESû 
YEARûISSUESûFROMû0HILIPPINEûBORROWERSû
ûBONDSûWHOûHAVEûFORMEDûANûADûHOCû
committee.
4HEûCOMPANYûSAIDûITûENCOURAGEDûHOLDERSû
OFûTHEûSûANDûSûTOûJOINûTHEû
COMMITTEEûSOûTHATûTHEYûCOULDûWORKûTOWARDSû
a resolution.
DELISTEDûFROMûTHEû,ONDONû3TOCKû%XCHANGEû
INû
6EDANTAû2ESOURCESûANDûITSûAFlLIATESûHOLDû
AûûSTAKEûINû6EDANTAû,IMITED
*0û-ORGANûISûADVISINGû6EDANTAûONûTHEû
delisting.
SUCHûASû)NTERNATIONALû#ONTAINERû4ERMINALû
3ERVICESûANDû*OLLIBEE
4HEûLATESTûDEALûWASûANûOPPORTUNISTICû
TRADEûTOûCAPTUREûAûCONSTRUCTIVEûMARKETû
WINDOWûASûTHEûCOMPANYûWASûNOTûFACINGû
ANYûIMMEDIATEûRElNANCINGûNEEDS
h)NTERESTûRATESûCOULDûMOVEûLOWERûLATERûINû
ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS THEûYEARûBUTûTHEREûAREûALSOûMOREû
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020 uncertainties around the US presidential
Managing No of Total Share Asia-Pacific ELECTIONûASûWELLûASûTENSIONSûOVERûTHEû
bank or group issues US$(m) (%) Managing No of Total Share WORLDSûTWOûSUPERPOWERSvûSAIDûANOTHERû
1 Citigroup 142 36,943.81 8.9 bank or group issues US$(m) (%) banker on the deal.
2 HSBC 190 32,253.57 7.8 1 HSBC 149 18,036.10 9.3 4HEûBONDSûTRADEDûUPûINûAFTERMARKETûONû
3 JP Morgan 139 31,473.54 7.6 2 Citigroup 83 12,946.05 6.7 THEIRûlRSTûTRADINGûDAYûLASTû&RIDAYûATûAûBIDû
4 Standard Chartered 113 22,951.12 5.5 3 Standard Chartered 82 10,004.70 5.2 CASHûPRICEûOFûûONûTHEûBACKûOFûSTRONGû
5 Deutsche Bank 74 21,937.58 5.3 4 UBS 70 8,119.33 4.2 onshore demand that was secured after
6 Goldman Sachs 74 19,455.75 4.7 5 Bank of China 90 7,476.61 3.9 WALL
CROSSING
7 BNP Paribas 85 18,534.25 4.5 6 BofA Securities 42 7,295.61 3.8 Credit SuisseûStandard Chartered and UBS
8 BofA Securities 75 17,740.05 4.3 7 Credit Suisse 65 7,117.43 3.7 were lead managers and bookrunners.
9 Credit Agricole 73 12,868.83 3.1 8 JP Morgan 62 7,099.84 3.7 #ONTROLLEDûBYûTHEû'OKONGWEIûFAMILYû*'û
10 Barclays 70 12,191.54 2.9 9 Credit Agricole 54 6,287.36 3.2 3UMMITûISûAûHOLDINGûCOMPANYûWITHû
Total 625 413,637.57 10 BNP Paribas 55 6,028.06 3.1 SUBSIDIARIESûINûVARIOUSûSECTORSûINCLUDINGû
Excluding equity-related debt. Total 410 193,781.30 FOODSûPETROCHEMICALSûBANKINGûANDûREALû
Excluding equity-related debt. ESTATEû!IRLINEû#EBUû0ACIlCûISûALSOûONEûOFûITSû
Source: Refinitiv SDC code: L1 Source: Refinitiv SDC code: L4 business units.

56 International Financing Review July 4 2020

 EMERGING MARKETS ASIA-PACIFIC

RCBC MANDATES FOR AT1 BONDS

RIZAL COMMERCIAL BANKING CORP has mandated

Credit Suisse as the sole global coordinator for
Asian bond sales dip
on HY slowdown
ANû!DDITIONALû4IERûûBONDûISSUEûACCORDINGûTOû
AûlLINGûONûTHEû0HILIPPINEû3TOCKû%XCHANGE
)TSûBOARDûOFûDIRECTORSûAPPROVEDûAûPROPOSALû
TOûISSUEûUPûTOû53MûOFûBONDS
4HEûPROCEEDSûFROMûTHEûUNSECUREDû „ BONDS Virus uncertainties depress second-half outlook
subordinated bonds will be used to support
loans to customers and for other general International bond sales from Asia in the first March lows, especially for investment-grade
CORPORATEûPURPOSESûINûLINEûWITHûELIGIBLEû half edged down from the previous year as borrowers offering longer tenors.
green and social categories under the bank’s the Covid-19 pandemic weighed on issuance “Some of the early market reopening
SUSTAINABLEûlNANCEûFRAMEWORK of high-yield bonds and bank senior debt in issuance in April was anchored in the long end,
4HEûISSUANCEûOFû!4ûSECURITIESûISûSUBJECTû particular. where insurance money supported successful
TOûCENTRALûBANKûGOVERNMENTûANDûREGULATORYû G3 currency bond issuance from Asia, transactions in the 30-year, 40-year, and even
APPROVALS excluding Japan and Australasia, dropped 50-year spaces,” said Henderson.
3EPARATELYû2#"#ûISûPLANNINGûTOûRETURNûTOû
THEûLOCALûBONDûMARKETûATûTHEûENDûOFû*ULYûORû
INû!UGUSTûTOûRAISEûATûLEASTû0SBNû53M û
FROMûTWO
YEARûBONDSûDEPENDINGûONûINVESTORû plunged by 11.4% from the same period
appetite.
4HEûPROCEEDSûFROMûTHEûPESOûBONDûISSUEû
WILLûBEûUSEDûTOûSUPPORTûDOUBLE
DIGITûLOANû US$8.1bn.
growth.
METRO BANK EYES SENIOR BOND
METROPOLITAN BANK & TRUST has mandated
banks for a US dollar bond.
1.6% year on year to US$188.5bn in the The REPUBLIC OF INDONESIA sold its first
first six months, according to Refinitiv data. US dollar 50-year bond in April, the longest
New-issue volumes in the second quarter tenor for a public deal in the region, while
Malaysia’s state oil company PETROLIAM
last year to US$94.5bn, with bond sales by NASIONAL (Petronas) and Chinese technology
high-yield corporates falling almost 60% to firm TENCENT HOLDINGS extended their curves
to 40 years by pricing multi-tranche jumbo
Supply from Chinese property developers, deals in the second quarter. Hong Kong-based
which makes up the majority of high-yield conglomerate CK HUTCHISON also priced a rare
bond issuance from Asia and 30%–40% of 30-year tenor in May.
the fee pool for all G3 issuance, according Social bonds gained momentum in the
to a regional DCM head, was hit hard during first half, driven by thematic bonds related to
the second quarter. Many investors sat on the Covid-19. The equivalent of over US$20bn was
4HEûBANKûRATEDû"AAû"""nû-OODYS sidelines amid the coronavirus outbreak and raised to help address the crisis, according to
&ITCH ûHASûHIREDûUBS and First Metro after having digested record supply earlier in Henderson.
Investment Corporation as global goordinators the year. “We also have a pipeline of further ESG
ANDûBOOKRUNNERSûANDûMUFG and SMBC Nikko During January and February, Chinese G3 transactions in the second half, particularly
as lead managers. bond volume rose 13% from the previous year Covid-19 relief-related bonds.”
!û2EGû3ûONLYû
YEARûNOTEûMAYûFOLLOWû to US$32bn, but the figure was down 33% to Supply in the second half will be linked to
-ETROPOLITANû"ANKûû4RUSTûISûTHEû US$38.3bn in the second quarter. how the pandemic develops, bankers said.
0HILIPPINESûSECOND
LARGESTûBANKûBYûASSETSû “Many issuers in the China high-yield space “I would be cautiously optimistic on the
WITHûAûMARKETûSHAREûOFûABOUTûûASûOFûTHEû were well funded going into April and were second-half bond issuance volume as all-in
ENDûOFûLASTûYEAR happy to sit out the volatility. They have made borrowing costs are likely to remain at
up a relatively smaller proportion of issuance historical lows and investors continue to put
in Q2 than in the first few months of the year,” money to work especially in investment-grade
SOUTH KOREA said Sean Henderson, co-head of DCM for bonds. There are some headwinds, however,
Asia-Pacific at HSBC. including the US election in Q4 and virus
KHFC SCORES COVERED HAT TRICK The drop in international bond sales in the uncertainties that market participants would
first half also stems from weak senior issuance need to keep an eye out for,” said Citigroup’s
KOREA HOUSING FINANCE CORPORATION last week by banks after the pandemic caused spreads to Jalan.
RAISEDûlNANCINGûTOûSUPPORTûHOUSEHOLDSû widen from mid-March. Another DCM banker, on the other
VULNERABLEûTOûTHEû#OVID
ûPANDEMICSû G3 bond issuance from Asian financials, hand, expected international bond sales
ECONOMICûFALLOUTûWITHûAûõMûlVE
YEARû excluding Japan and Australasia, dropped 24% to slow down a little bit in the second
SOCIALûCOVEREDûBONDûTHOUGHûDEMANDûFORû year on year in Q2 to US$39.7bn whereas Q1 half, saying that issuers able to do jumbo
THEûDEALûWASûCURBEDûBYûITSûLOWûYIELDû sales were up 15% to US$45.4bn. transactions have already come to the market,
4HEûDEALûISûTHEûSTATE
OWNEDûHOUSINGû Still, Q2 volume exceeded expectations, said while supply from Chinese property names will
lNANCEûPROVIDERSûTHIRDûEURO
DENOMINATEDû Rishi Jalan, co-head of Citigroup’s Asia-Pacific be limited to refinancing by quotas granted
SOCIALûCOVEREDûBONDûANDûTHEûlRSTûINû!SIAûTOû DCM syndicate desk. by the National Development and Reform
LINKûPROCEEDSûTOûCORONAVIRUSûRECOVERYû “The bond issues were driven by a build-up Commission.
EFFORTSû,IKEûTHEûPREVIOUSûTWOûITûRAISEDû
lNANCINGûFORûMORTGAGEûLOANûPRODUCTSû
aimed at low to moderate income
households.
+(&#ûSAIDûITûEXPECTEDûTHEûPROCEEDSûTOûBEû
USEDûTOûHELPûHOUSEHOLDSûANDûDISADVANTAGEDû
GROUPSûINû3OUTHû+OREAûWHOûAREûVULNERABLEû
TOûTHEûSOCIO
ECONOMICûDIFlCULTIESûCAUSEDûBYû allowed the market to reopen quickly after the
THEûCORONAVIRUSûPANDEMIC
in global borrowings prompted by lower
interest rate yields that made all-in borrowing
costs similar, if not better, compared to pre-
Covid 19 levels.”
LONG TENORS, COVID-19 BONDS
The rescue package from global central banks
Jihye Hwang
International Financing Review July 4 2020
HSBC topped the first-half league table
for Asian G3 bonds, excluding Japan and
Australia, with US$16.9bn of volume from 118
issues. Citigroup was second with US$13.7bn
and Standard Chartered third with US$9.6bn.
Bank of America climbed 12 places year on year
to rank fourth.
57
GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 3/7/2020
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Jun 29 2020 KHFC covered €500m Jul 7 2025 0.01 100 MS+35 / B+70.4 0.003

Jun 29 2020 Golden Wheel Tiandi US$170m Jan 9 2023 (Jan 2022) 14.25 100 - 14.25

Jun 29 2020 Times China US$300m Jul 8 2025 (Jul 2023) 6.75 100 - 6.75

Jun 29 2020 Zhejiang Changxing US$160m Jul 3 2023 5.5 100 - 5.5
Financial

Jun 30 2020 Neijiang Investment Holding US$75m Jul 15 2023 4.5 100 - 4.5
Group

Jun 30 2020 Weibo US$750m Jul 8 2030 3.375 99.34 T+280 3.454

Jul 1 2020 Prasarana Malaysia M$1.5bn Perpetual 0 0 - -

Jul 2 2020 JG Summit US$600m Jul 9 2030 4.125 100 - 4.125

Jul 2 2020 Indonesia ¥1.5bn Jul 6 2040 1.8 100 OS+143 -

Jul 2 2020 Indonesia ¥50.7bn Jul 7 2023 1.13 100 OS+110 -

Jul 2 2020 Indonesia ¥24.3bn Jul 8 2025 1.35 100 OS+130 -

Jul 2 2020 Indonesia ¥10.1bn Jul 8 2027 1.48 100 OS+140 -

Jul 2 2020 Indonesia ¥13.4bn Jul 8 2030 1.59 100 OS+145 -

Jul 2 2020 KNOC SFr100m Jul 30 2027 0.263 100 MS+68 / Eidg+80 0.263

Jul 3 2020 Wuhan Dangdai Science & US$200.5m incr Jan 16 2023 10.5 103.874 - 8.75
Technology Industries (US$283.893m)
Jun 30 2020 Akbank US$500m Feb 6 2026 6.8 99.99 CT5 + 651.5 6.8

Jun 30 2020 Sibur US$500m Jul 8 2025 2.95 100 MS+262.4 / T+266 2.95

Jun 30 2020 Poland €2bn Jul 7 2023 0 100.3 MS+29 / B+62 -0.11

Jul 1 2020 SID Banka €350m Jul 8 2025 0.125 99.92 MS+47 / B+79.3 0.141

Jul 1 2020 Hikma Pharmaceuticals US$500m Jul 9 2025 3.25 98.86 MS+316 / T+319.5 3.5

Jul 2 2020 ENBD AT1 US$750m Perpetual (Jul 2026) 6.125 100 T+570.2 6.125

Jun 30 2020 Interbank del Peru US$300m Jul 8 2030 4 100 - 4

(Jul 2025)
Jun 30 2020 Rumo US$500m Jul 1 2028 5.25 100 - 5.25

Jul 1 2020 Raizen Fuels Finance US$225m incr Jan 20 2027 5.3 103.768 4.625 4.625
(outs
US$725m)

+(&#ûHELDûINVESTORûCALLSûFROMû*UNEûû "ANKERSûATTRIBUTEDûTHEûMODESTûLEVELûOFû !ûBANKERûATûONEûOFûTHEûLEADSûSAIDû+(&#û

AHEADûOFûTHEûDEALûWHICHûISûEXPECTEDûTOûBEû DEMANDûANDûINVESTORSûAPPARENTûPRICEû ACHIEVEDûITSûOBJECTIVESû(EûSAIDûITûWASûALSOû
RATEDû!!!ûBYû30 RESISTANCEûTOûTHEûLOWûYIELDûINûCOMBINATIONûWITHû POSITIVEûTHATûTHEûlRSTûEUROûCOVEREDûBONDû
"OOKSûOPENEDûLASTû-ONDAYûANDûTHEû +(&#ûHAVINGûAûMOREûLIMITEDûINVESTORûFOLLOWINGû ISSUEDûOUTûOFû!SIAûSINCEûTHEûCORONAVIRUSû
!ûREGISTEREDûISSUEûWASûMARKETEDûWITHû THANûMOREûFREQUENTû%UROPEANûISSUERS crisis began was priced with a concession of
INITIALûPRICEûTHOUGHTSûINûTHEûMID SWAPSû !û+(&#ûFUNDINGûOFlCIALûSAIDûTHEû JUSTûBPnBP
PLUSûBPûAREAûVIAûLEADSûBNP Paribas, DBS CORONAVIRUSûOUTBREAKûMADEûMARKETINGûEVENû "ANKERSûSAWûFAIRûVALUEûATûAROUNDûBPû
Bank, HSBC, and ING. MOREûDIFlCULTûASûONLYûINVESTORûCALLSûWEREû ROUGHLYûINûLINEûWITHûWHEREûTHEûISSUERSûû
'UIDANCEûWASûSETûINûTHEûBPûAREAûPLUSû POSSIBLEûWITHû%UROPEANûINVESTORSûWHOûTENDû &EBRUARYûûSOCIALûCOVEREDûBONDûWASû
ORûMINUSûBPûWITHûBOOKSûINûEXCESSûOFû TOûPREFERûFACE TO FACEûMEETINGS trading.
õMûBEFOREûTHEûSPREADûWASûlXEDûATû 4HEûDEALûULTIMATELYûPRICEDûWITHûAûCOUPONû +(&#SûEURO DENOMINATEDûCOVEREDûBONDSû
BPû OFûûANDûAûYIELDûOFû HAVEûLAGGEDûTHEûPERFORMANCEûINûCOREû

58 International Financing Review July 4 2020

 EMERGING MARKETS ASIA-PACIFIC

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+37 area, MS+35 4 €590m, 42acs -/AAA BNPP / DBS / HSBC / ING Nordic 24%, Benelux 20%, Ger 12%, Fr
(+/-1) 8%, Switz 8%, UK 7%, RoEMEA 13%,
Asia 8%. FM 40%, CB/OI/PF 33%, Bks
26%, Other 1%.
14.25% area, 14.25% - - B2/-/-/B+ (Lianhe BOCI / Guotai Junan / Haitong / -
Global) CLSA / HSBC / DB / Heungkong /
Orient / Kaisa
7% area, 6.75% (#) - - B1/B+/BB- UBS / Guotai Junan / DB / Barc / CISI -
/ GS / Haitong / JPM / BEA / MS
5.5% area - - - Guoyuan / Zhongtai / Haitong / -
Guotai Junan / CNCB HK / BOCOMI /
CISI Hung Sing Securities / HK Sinoko
Capital
4.5% (#) - - - Central / Guosen / BoC / ABCI / -
HaitongBk / Zhongtai Goldbridge
Securities / Po Tai Securities
T+320 area, T+280 - - Baa1/BBB GS -
(the #)
- - - - Affin / AMBG / CIMB / Kenanga / -
Maybank
4.50% area, 4.125% - US$2.6bn, 120acs - CS / UBS / StCh China Bank Capital Asia 86%, EMEA 14%. FM/AM/Ins 61%,
(the #) Corporation Bks/FI 16%, PB/Trust/Corp 23%.
1.8%/1.9%, 1.8% - - Baa2/BBB/BBB Daiwa / MUMSS / Nomura / SMBC -
Nikko
OS+110/120, OS+110 - - Baa2/BBB/BBB Daiwa / MUMSS / Nomura / SMBC -
Nikko
OS+130/140, - - Baa2/BBB/BBB Daiwa / MUMSS / Nomura / SMBC -
OS+130 Nikko
OS+140/150, - - Baa2/BBB/BBB Daiwa / MUMSS / Nomura / SMBC -
OS+140 Nikko
OS+145/155, - - Baa2/BBB/BBB Daiwa / MUMSS / Nomura / SMBC -
OS+145 Nikko
MS+68 -10 - Aa2/AA UBS Switz 100%. AM 40%, Bks/PB 23%, Ins
15%, Tsy 14%, PF 9%.
9% area, 8.75% - - - CLSA/TF/CMBC/SPDB/ICBCI/CSI -

Low 7% area, - US$1.25bn B2/-/B+ BofA / Citi / ENBD / ICBC / SMBC -

6.8%/6.85%, 6.8% Nikko / StCh
3.125%/3.25%, 3% - US$975m Baa3/BBB-/BBB- Citi / Gaz / GS / JPM / VTB Bks/PB 77%, AM/FM 23%.
(+/-5)
MS+high 30s, - €5.8bn, 90acs A2/A-/A- BNPP / Citi / GS / HSBC / PKO Ger/Aus 23%, UK 20%, Poland 20%,
MS+33 area / SG Switz 9%, RoE 23%, RoW 5%. AM 49%,
Bks/PB 30%, CB/OI (Sup/SWF/Gov)
17%, Ins/PF/Other 4%.
MS+60/+65, MS+55 - €700m -/AA- DB / JPM -
area, MS+50 (+/-3)
3.875%/4%, 3.5% - US$1.3bn Ba1/BBB- Citi / HSBC / BofA / Miz -
(#)
6.5% area, - >US$2.3bn - ENBD / HSBC / StCh / BofA / Citi / -
6.125%/6.25% 1ADB
4.375% area, - - Baa3/BB+ BofA/JPM
4.125% (+/-12.5)
Mid/High 5%, - - BB-/BB Itau/MS/Bradesco/BTG/Citi/GS/JPM
5.375% (+/-12.5),
5.25%
High 4% area 27.5 US$565m BBB-/BBB BNPP/Citi/JPM/MUFG/Scotia/
4.625% ( the #) Bradesco/Santan

%UROPEANûCOVEREDûBONDSûTHEûSPREADSûOFû
WHICHûHAVEûRECENTLYûRETURNEDûTOûPRE
ACCORDINGûTOû2ElNITIVûDATA
#OVID
ûLEVELSûINûSOMEûCASESû
SûWEREûBIDûATûAROUNDûûLASTûWEEKû but aims to maintain the larger issuance size
INûEUROSûINû
h4HERESûALSOûMOREûUNCERTAINTYûAROUNDû 4HEûDEALûRECEIVEDûlNALûORDERSûOFûOVERû
)NûCONTRASTû3OUTHû+OREANûEUROûCOVEREDSû THEûCORONAVIRUSûINûTHEûSECONDûHALFûTHATûCOULDû õMûFROMûûACCOUNTSû
REMAINûATûLEASTûBPûWIDEûOFûPRE
#OVID
û SHUTûTHEûMARKETûWINDOWvûSAIDûTHEû+(&#û !NOTHERû3OUTHû+OREANûISSUERûKOOKMIN BANKû
LEVELSûANDûAREûSOMEûOFûTHEûWIDESTûCOVEREDSû FUNDINGûOFlCIAL RATEDû!A!!ûHASûHIREDûBANKSûFORûAûlVE
YEARû
INûTHEû4RIPLEû!ûSECTORûTRADINGûAROUNDûTHEû +(&#ûHASûISSUEDûEURO
DENOMINATEDûBONDSû EURO
DENOMINATEDûSUSTAINABILITYû2EGû3ûCOVEREDû
MID
S EVERYûYEARûSINCEûûBUTûITSûõBNûOFû BONDûBACKEDûBYû+OREANûRESIDENTIALûMORTGAGES
+(&#ûHASûNOûNEEDûFORûFOREIGNûCURRENCYû SUPPLYûINûûISûALREADYûTRIPLEûITSûBORROWINGû !û+OOKMINûFUNDINGûOFlCIALûSAIDûTHEû
FUNDINGûBUTûWASûABLEûTOûRAISEûFUNDSûATûAû INûEACHûOFûTHEûPREVIOUSûTWOûYEARS PROPOSEDûISSUEûCAMEûASûTHEûBANKûSEESûEURO

LOWERûCOSTûINûEUROSûTHANûITûCOULDûHAVEû 4HEûFUNDINGûOFlCIALûSAIDû+(&#ûHADûNOû denominated loan growth that needs a
ONSHOREû+(&#Sû+OREANû7ON
DENOMINATEDû PLANSûTOûREVISITûTHEûMARKETûLATERûINûTHEûYEARû STABLEûANDûLONG
TERMûFUNDINGûSOURCE

International Financing Review July 4 2020 59

 “We are considering to raise around "AA"""""" û4HEû0HILIPPINESûSOLDûAû !NDREYû3OLOVYEVûGLOBALûHEADûOFû$#-ûATû
õMvûHEûSAID õMûûTHREE YEARûBONDûASûPARTûOFûAû 64"û#APITALûSAIDûTHATûINTERNATIONALû
+OOKMINûHOWEVERûHASûDELAYEDûITSûPLANSû DUAL TRANCHEûEUROûTRADEûINû*ANUARY INVESTORSûACTIVELYûPARTICIPATEDûINûTHEû
TOûIMPROVEûITSûCAPITALûADEQUACYûRATIOûBYû h)FûYOUûASKEDûMEûWHOû)ûPREFERûOUTûOFû PLACEMENTûANDûTHATûTHEREûWASûALSOûDEMANDû
PRINTINGûUPûTOû53MûOFû4IERûûBONDSûINû 0OLANDûANDûTHEû0HILIPPINESûATûû)DûRATHERû FROMû#ONTINENTALû%UROPEûANDû!SIAû
the second quarter. OWNû0OLANDvûSAIDûTHEûBANKERûAWAY "UTûOTHERSûSAIDûITûLOOKEDûLIKEûAûTYPICALû
)NûAûlLINGûONû*UNEûûTHEûBANKûSAIDûTHEû 4HEûLEADûSAIDûTHATûDESPITEûTHEûNEGATIVEû 2USSIANûCORPORATEûDEALûINûWHICHûTHEûLOCALû
FOREIGNûCURRENCYûFUNDINGûENVIRONMENTûHADû YIELDû0OLANDûSTILLûOFFEREDûGOODûRELATIVEû bid was crucial.
WORSENEDûDUEûTOû#OVID ûANDûTHATûITûHASûNOTû VALUEûTOûAûBUYERûBASEûOFû%UROPEANû /NEûBANKERûAWAYûTHOUGHTûDEMANDûHADû
DECIDEDûYETûWHENûTOûTAPûTHEûMARKET INVESTORSûINCLUDINGûBANKûTREASURIESûANDû COMEûUPûAûLITTLEûSHORTûOFûEXPECTATIONSûWITHû
+OOKMINûPRICEDû3OUTHû+OREASûINAUGURALû OFlCIALûINSTITUTIONS the bond around twice subscribed.
53 DOLLARûDENOMINATEDû4IERûûBONDûOFFERINGû h)TSûSTILLûBPûOVERû"UNDSûANDûYOUûAREû h)TûWASûAûBITûOFûAûLACKLUSTREûBOOKûANDûTHEû
INûSUSTAINABLEûFORMATûINû*ANUARYûLASTûYEAR GETTINGûAûGOODûPREMIUMûOVERûOTHERûCOREû 'AZPROMûBOOKûWASNTûBIGûEITHERvûHEûSAID
%UROPEANûNAMESûWITHûGOODûCREDITû 'AZPROMûHITûFAIRûVALUEûWITHûITSû53BNû
APPRECIATIONvûHEûSAID SEVEN YEARûNOTEûEARLIERûINû*UNEû/RDERSû
4HEûBOOKSûATûlNALûGUIDANCEûWEREûOVERû PEAKEDûATû53BNûBUTûDEMANDûDROPPEDû
õBN BACKûTOû53BNûATûPRICING
EUROPE/AFRICA 4HEûTIMINGûOFûTHEûDEALûWASûINTERESTINGû “I don’t think it’s a function of credit
coming in the middle of the presidential QUALITYûINû2USSIAvûSAIDûTHEûBANKERûAWAYû
election. h4HESEûAREûVERYûWELLûPOSITIONEDûCORPORATESû
POLAND 0RESIDENTû!NDRZEJû$UDAûGOTûTHEûMOSTû WITHûSTRONGûPROlLESûBUTû2USSIAûTRADESûVERYû
VOTESûINûTHEûlRSTûROUNDûOFûELECTIONSûlNALû TIGHTû3OûFROMûAûRELATIVEûVALUEûPERSPECTIVEû
SOVEREIGN MINES NEGATIVE TERRITORY RESULTSûSHOWEDûONû4UESDAYûASûTHEûFOCUSû there’s not much upside to get out of the
TURNSûTOûWHATûLOOKSûSETûTOûBEûAûCLOSE FOUGHTû JURISDICTIONv
POLANDûHITûTHEûSHORTûENDûONû4UESDAYûANDû RUN OFFûVOTEûONû*ULYû 3IBURûSTARTEDûMARKETINGûTHEûNO GROWûBONDû
CAMEûAWAYûWITHûAûNEûGATIVEûYIELDûANDûû $UDAûANûALLYûOFûTHEûRULINGûNATIONALISTû ATûnû"ASEDûONûTHEûCOMPANYSû
COUPONûFORûITSûõBNû*ULYûûBONDûASûITû ,AWûANDû*USTICEû0I3 ûPARTYûWILLûNOWûFACEû CURVEûAûSECONDûBANKERûAWAYûPUTûFAIRûVALUEû
kept a tight leash on funding costs. OFFûAGAINSTûLIBERALû7ARSAWûMAYORû2AFALû ATû)04SûATûAROUNDû
4HEûSOVEREIGNSûCHOICEûOFûAûTHREE YEARû 4RZASKOWSKIûAûMEMBERûOFûTHEûCENTRISTû h)ûGUESSûTHEYûWILLûTARGETûAûûCOUPONû
TENORûWASûAûWAYûOFûCOUNTERBALANCINGû OPPOSITIONû#IVICû0LATFORM BUTûûISûPROBABLYûTHEûRIGHTûPRICEvûHEû
heightened spending requirements in the h4HEûELECTIONSûWEREûALMOSTûTHEûTHIRDûORû said.
FACEûOFû#OVID ûACCORDINGûTOûAûLEAD FOURTHûFACTORûFORûINVESTORSûTOûFOCUSûONûGIVENû Sibur landed the note a touch short of
h0OLANDûKEPTûAûLIDûONûFUNDINGûCOSTSvûSAIDû so much focus on the economic impact of THATûYIELDûh4HEûCOUPONûONûTHEûPLACEMENTû
THEûLEADûh!ûTHREE YEARûWITHûAûûCOUPONû THEûCORONAVIRUSûANDûWHATûCENTRALûBANKSûAREû WASûATûHISTORICALLYû;LOW=ûLEVELSûFORûAûlVE YEARû
ANDûNEGATIVEûYIELDûISûBASICALLYûFREEûCASHû GOINGûTOûDOvûSAIDûTHEûLEADû DOLLAR DENOMINATEDû%UROBONDûISSUEûAMONGû
4HEûLIQUIDITYûCANûBEûDEPLOYEDûFORû h%VENûTHOUGHûTHEûPOLITICALûRAMIlCATIONSû 2USSIANûCORPORATESvûSAIDû3OLOVYEV
TEMPORARYûMEASURESûBUTûWITHOUTû AREûIMPORTANTûTHEYûAREûNOTûGOINGûTOû 3OMEûINVESTORSûSAWûMOREûVALUEû
NECESSARILYûINCREASINGûTHEûDEBTûBURDENûSOû CHANGEû0OLANDSûTRAJECTORYûMUCHv elsewhere.
ITSûOPTIMISINGûHOWûYOUûRAISEûYOURû 0OLANDSûMINISTRYûOFûlNANCEûSAIDûONû “I think there are better opportunities out
RESOURCESv 4UESDAYûTHATûITûWASûPOSSIBLEûTHEûSOVEREIGNû THEREûFORûBETTERûRATEDûISSUERSvûSAIDû5DAYû
4HEûSOVEREIGNûPRICEDûTHEûBONDûATûSPREADû would issue bonds in foreign markets and 0ATNAIKûHEADûOFû%-ûDEBTûATû,')-ûAFTERûPRICEû
OFûSWAPSûPLUSûBPûINSIDEû)04SûINûTHEûHIGHû ASûPRIVATEûPLACEMENTSûINûTHEûTHIRDûQUARTERû thoughts were announced.
Sû OFûTHEûYEAR h&ORûEXAMPLEû)ûWOULDûPREFERûHOLDING
!ûBANKERûAWAYûSAWûTHEû0OLANDû! BNP Paribas, Citigroup, Goldman Sachs, BUYINGû%QUATEû0ETROCHEMICALû"AA""" û
!n!n ûISSUEûASûCOMINGûmATûTOûTHEûCURVEû HSBC, PKO BP and Societe Generale were which is higher rated and offers a better
and drew a comparison to the Philippines bookrunners for the bond. YIELDûTHANûTHEûPROPOSEDû3IBURûNEWûISSUEv
3IBURûISûRATEDû"AA"""n"""nû-OODYSû
ALL INTL EMERGING MARKETS BONDS AFlRMEDûTHEûRATINGûWITHûAûSTABLEûOUTLOOKû
BOOKRUNNERS: 1/1/2020–30/6/2020 RUSSIA ONû*UNEûûSTATINGûTHATû3IBURSûRATINGûCANû
Europe/Africa sustain the moderate deterioration in the
Managing No of Total Share SIBUR SLIDES IN UNDER 3% COMPANYSûlNANCIALûPROlLEûWITHûDEBT
bank or group issues US$(m) (%) %BITDAûINCREASINGûTOûABOVEûXûINûû
1 JP Morgan 31 10,839.40 16.4 0ETROCHEMICALSûCOMPANYûSIBUR tested h4HEûCOMPANYûWILLûBEûWELL POSITIONEDûTOû
2 Citigroup 18 8,088.06 12.2 DEMANDûFORûSUB ûlNANCINGûWHENûITû RECOVERûITSûKEYûMETRICSûINûnûOWINGûTOû
3 BNP Paribas 13 5,535.96 8.4 PRICEDûAû53Mû*ULYûûNOTEûONû ITSûSTRONGûBUSINESSûANDûLIQUIDITYûPROlLEûANDû
4 Deutsche Bank 9 4,533.00 6.8 4UESDAYûATûAûYIELDûOFûûASû2USSIANû SUCCESSFULûCOMPLETIONûOFûACTIVEûINVESTMENTû
5 SG 11 3,961.97 6.0 CORPORATESûCONTINUEûTOûENJOYûTHEûBENElTSû STAGEûINûEARLYûûTHATûWILLûCONTRIBUTEû
6 Barclays 9 3,520.29 5.3 of a strong local bid. INCREMENTALû%BITDAûINûvûSAIDû-OODYS
7 UniCredit 8 2,986.41 4.5 /NEûBANKERûSAIDûTHEREûWASûAûHEAVYû 3IBURSûNEWûISSUEûWASûPRICEDûATûPARûBUTû
8 HSBC 10 2,905.94 4.4 2USSIANûINTERESTûFORûTHEûBONDûALTHOUGHû TRADEDûAûTOUCHûDOWNûINûTHEûAFTERMARKETû
9 ING 7 2,565.83 3.9 SOMEûINTERNATIONALûINVESTORSûWEREûPRICEDû SEENûBYûTHEûSECONDûBANKERûATûnû
10 Banca IMI 6 2,019.98 3.1 OUTûGIVENûTHEûLACKûOFûVALUEûCOMPAREDûWITHû ONû7EDNESDAY
Total 54 66,188.91 OTHERûSIMILARLYûRATEDûCORPORATES CitigroupûGazprombankûGoldman SachsûJP
Excluding equity-related debt. 4HEûALLOCATIONûOFûNOTESûINTOû2USSIANûHANDSû Morgan and VTB Capital were lead
Source: Refinitiv SDC code: L2 was not disclosed in the deal statistics. managers.

60 International Financing Review July 4 2020

 EMERGING MARKETS MIDDLE EAST

h*ORDANû)04SûLOOKûATTRACTIVEûANDûITSûAû
SLOVENIA RELATIVELYûSCARCEûISSUERûWHICHûISûANû%-")û
MIDDLE EAST CONSTITUENTvûSAIDûONEûINVESTOR
SID BANKA MAKES INROADS h3HOULDûDOû/+ûTHEYûNORMALLYûGETûGOODû
INTO PRICING SUPPORTûOUTûOFûTHEû53v
ISRAEL "UTûAûSECONDûINVESTORûSAIDûHEûWASûLIKELYûTOû
3LOVENIANûSTATE OWNEDûLENDERûSID BANKA skip the issue.
MOVEDûPRICINGûBYûNEARLYûBPûFROMûTHEûWIDEû DELEK DRILLING EXPLORES h)TSûTOOûSMALLûAûPARTûOFûTHEûINDEXû)TSûNOTûAû
ENDûOFûINITIALûGUIDANCEûASûITûSOLDûAûõMû BOND POSSIBILITY STORYûWEûHAVEûEVERûBEENûKEENûONûANDûITû
*ULYûûNOTEûONû7EDNESDAY TRADESûINSIDEû%GYPTûWHICHûWEû;DONT=ûLIKEvû
4HEûBANKSû#OVID ûRESPONSEûBONDûWASû Israel’s DELEK DRILLINGûWANTSûTOûRElNANCEû he said.
INITIALLYûMARKETEDûATûBPnBPûOVERûSWAPS about US$2bn in loans it had taken to 4HEûSOVEREIGNûLANDEDûTHEû53MûlVE
!ûBANKERûAWAYûFROMûTHEûDEALûSAWûTHEû DEVELOPûTHEûMAJORû,EVIATHANûNATURALûGASû YEARûATûûANDûTHEû53BNû YEARûATû
LENDERSûSûATûAROUNDûBPûNOTINGûITSû lELDûEITHERûBYûISSUINGûBONDSûORûTHROUGHû 
ILLIQUIDûNATUREû(EûPUTûFAIRûVALUEûFORûTHEûNEWû BANKûlNANCE !ûBANKERûAWAYûPUTûTHEûlNALû.)0SûATûBPû
ISSUEûROUGHLYûATûBPû 4HEûCOMPANYûSAIDûINûAûSTATEMENTûLASTû on the shorter leg and 5bp on the longer
3)$û"ANKAû!!n ûTIGHTENEDûTHEû -ONDAYûITûAPPROACHEDûINTERNATIONALûCREDITû bond.
GOVERNMENT GUARANTEEDûOFFERINGûTOûBPû ratings agencies regarding a possible bond “For me it showed there is still a lot of
A lead said the bonds had come around ISSUANCEûOFûABOUTû53BNûWHICHûWILLûBEû APPETITEûFORûDURATIONvûSAIDûTHEûBANKERûAWAYû
BPûOVERûTHEûSOVEREIGNûCURVEû(EûADDEDû BACKEDûBYûh,EVIATHANûPROJECTûASSETSvû)TûSAIDû h4HEûlVE YEARûSEEMEDûTOûGOûNOWHEREûNEARûASû
THATûTHEûûCOUPONûWASûTHEûJOINTûLOWESTû ITûRECEIVEDûANûINDICATIVEûRATINGûOFûh""vû well. Printing two and a half times the size
ACHIEVEDûBYû3)$û"ANKA WHICHûISûSIMILARûTOûAûRATINGûOFûh!!vûINû)SRAEL ONûTHEû YEARûSHOWSû%-ûINVESTORSûWANTû
%UROPEANûRATESûBUYERSûPROVIDEDûTHEûBULKû $ELEKû$RILLINGûAûSUBSIDIARYûOFûENERGYû DURATIONv
OFûDEMANDûWITHûINTERESTûCLOSINGûABOVEû CONGLOMERATEû$ELEKû'ROUPûHASûTOTALû 4HEûlNALûBOOKûFORûTHEûSHORTERûNOTEûWASû
õMû lNANCIALûDEBTûOFû53BNû)TûISûAûPARTNERûINû OVERû53BNûWHILEûTHEûLONGERûBONDûSAWû
3)$û"ANKAûSAIDûITûMIGHTûUSEûPARTûOFûTHEû two of Israel’s largest offshore natural gas DEMANDûOFûMOREûTHANû53BN
PROCEEDSûTOûlNANCEûCOMPANIESûHITûBYûTHEû lELDSû4AMARûANDû,EVIATHAN h)NVESTORSûTENDûTOûPREFERûLONGERûASSETSûANDû
#OVID ûPANDEMICûCRISIS /Nû*UNEûûTHEûCOMPANYûREPORTEDûlRST CURVEûSTEEPNESSûSUPPORTSûTHEûLONGERû
Deutsche Bank and JP Morgan were leads. QUARTERûNETûPROlTûOFû53MûUPûû TRANSACTIONvûSAIDûAûLEADûWHOûADDEDûTHATûTHEû
FROMûAûYEARûEARLIERû2EVENUEûJUMPEDûûTOû ISSUEûARGUABLYûPRICEDûINûLINEûWITHûFAIRûVALUEû
53MûFORûTHEûPERIODûBOOSTEDûBYûTHEû h;4HEûSKEWûINûDEMAND=ûISûKINDûOFûWHATûWEû
SOUTH AFRICA STARTûOFûPRODUCTIONûATû,EVIATHANûWHICHû EXPECTEDûANDûTHEûISSUERûHADûmEXIBILITYûONû
SUPPLIESû)SRAELû*ORDANûANDû%GYPT SIZINGv
SOVEREIGN OPENS û&INANCEû-INISTERû-OHAMMADû!L )SSISSû
INVESTOR DIALOGUE SAIDûTHEûOVERSUBSCRIPTIONûANDûhRELATIVELYûLOWû
JORDAN INTERESTûRATEvûOFû*ORDANSû%UROBONDSûWASûAû
SOUTH AFRICAûHELDûAûNON DEALûRELATEDûCALLûWITHû hTESTAMENTûTOûITSûlSCALûSTABILITYv
INVESTORSûONû4UESDAYûASûTHEûCOUNTRYSû FINDING FAVOUR AT THE LONG END !L )SSISSûSAIDûTHEûFUNDSûWOULDûGOûTOWARDSû
grapples with an economic recession. COVERINGûAû53BNû%UROBONDûMATURINGûINû
!NûANALYSTûWHOûLISTENEDûTOûTHEûINVESTORû JORDANûRAISEDû53BNûTHROUGHûAûDUAL /CTOBERûANDûINJECTINGûLIQUIDITYûINTOûTHEû
update said that South Africa could be TRANCHEûISSUEûLASTû4UESDAYûWITHûTHEûLONGERû PRIVATEûSECTORûBYûPAYINGûARREARSû
CONTEMPLATINGûAû%UROBONDûANDûAûBANKERû BONDûlNDINGûMOSTûRESONANCEûWITHûINVESTORS ACCUMULATEDûBYûBOTHûPRESENTûANDûPREVIOUSû
SAIDûITûWASûAûPOSSIBILITY 4HEûSOVEREIGNûBEGANûMARKETINGûAû*ULYû GOVERNMENTS
h4HEYûALWAYSûHAVEûITûINûTHEIRûBUDGETvûSAIDû ûATûTHEûûAREAûANDûAû*ULYûûATû 5NDERûAûNEWûFOUR YEARû53BNû)-&ûDEALû
the banker. THEûûAREAûTARGETINGûAûBENCHMARKûSIZEû WHICHûWASûSIGNEDûINû-ARCHûTHEûKINGDOMû
3OUTHû!FRICASûBUDGETûDElCITûWILLûBEûTHEû in both. has to proceed with structural reforms and
HIGHESTûINûTHEûPOST APARTHEIDûERAûANDûTHEû
lNANCEûMINISTERûWARNEDûINûHISûEMERGENCYû ALL INTL EMERGING MARKETS BONDS INTERNATIONAL ISLAMIC FINANCE DEBT
BUDGETûSPEECHûONû*UNEûûTHATûDEBTûHADû BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
become a hippo eating their children’s Middle East Managing No of Total Share
inheritance. Managing No of Total Share bank or group issues US$(m) (%)
4HEûCOUNTRYSûRECESSIONûMEANWHILEû bank or group issues US$(m) (%) 1 Standard Chartered 14 2,552.21 16.7
DEEPENEDûINûTHEûlRSTûQUARTERûOFûûWITHû 1 Standard Chartered 26 11,149.71 14.5 2 HSBC 11 1,871.25 12.3
OFlCIALûDATAûONû4UESDAYûSHOWINGûTHATû'$0û 2 Citigroup 19 9,331.97 12.2 3 Dubai Islamic 9 1,369.63 9.0
CONTRACTEDûûFROMûTHEûPREVIOUSûTHREEû 3 HSBC 20 7,936.77 10.3 4 Natixis 3 785.53 5.2
MONTHSûLEDûBYûDECLINESûINûMININGûANDû 4 Goldman Sachs 6 7,411.87 9.7 5 First Abu Dhabi 7 780.25 5.1
manufacturing. 5 Deutsche Bank 10 5,878.94 7.7 6 Citigroup 6 770.24 5.1
4HEûECONOMYûWASûALREADYûFRAILûBEFOREûTHEû 6 JP Morgan 14 4,057.13 5.3 7 Islamic Dev Bank 6 746.75 4.9
CORONAVIRUSûPANDEMICûHITû3OUTHû!FRICAûINû 7 Credit Agricole 12 3,725.24 4.9 8 Emirates NBD 8 650.58 4.3
-ARCHûWITHû*ANUARYn-ARCHûBEINGûTHEûTHIRDû 8 BofA Securities 4 3,659.54 4.8 9 Malayan Banking 1 500.00 3.3
CONSECUTIVEûQUARTERûOFûCONTRACTIONû 9 First Abu Dhabi 12 3,357.67 4.4 10 BNP Paribas 1 500.00 3.3
FOLLOWINGûAûûDECLINEûINû'$0ûINû/CTOBER 10 Barclays 6 2,494.03 3.3 Total 17 15,242.60
$ECEMBER Total 75 76,727.77 Excluding equity-related debt.
4HEûCALLûFORû3OUTHû!FRICAû"A""n"" ûWASû Excluding equity-related debt.
ARRANGEDûBYûDeutsche Bank and Rand Merchant Bank. Source: Refinitiv SDC code: L5 Source: Refinitiv SDC code: J27

International Financing Review July 4 2020 61

 lSCALûCONSOLIDATIONûTOûREDUCEûPUBLICûDEBTûOFû

ENBD signals calls coming 53BNûWHICHûNOWûSTANDSûABOVEûûOFû

'$0ûANDûHASûSPIRALLEDûINûTHEûLASTûDECADEûDUEû
TOûEMPLOYMENTûINûAûBLOATEDûPUBLICûSECTOR
„ MIDDLE EAST Bank expected to call AT1 after issuing new note *ORDANSûûGROWTHûWASûALSOûEXPECTEDûTOû
PLUNGEûBYûûTHISûYEARûASûAûRESULTûOFû#OVID

EMIRATES NBD‘s US$750m perpetual non-call six A second investor said that the risk of major ûCOMPAREDûTOûTHEû)-&SûûFORECASTû
Additional Tier 1 on Thursday showed growing Gulf banks extending AT1s appeared to be before the crisis.
investor bullishness that the Gulf’s biggest banks fading. ENBD (A3/–/A+) is one of the largest *ORDANûISûRATEDû""""nû)TûISûONûAûSTABLEû
are leaning towards calling their subordinated
debt.
ENBD’s new unrated issue came ahead of a
US$500m 6.375% AT1 bond becoming callable
in September. The bank hasn’t said whether or
not it will call that bond but market players took
the announcement of the new AT1 issue as a
banking groups in the GCC by total assets. It
is 55.8% owned by Investment Corporation
of Dubai, the principal investment arm of the
Government of Dubai.
“To some extent it moves away from event risk
to just a carry trade,” said the second investor.
“The flip side to it is that issuing an AT1 at
OUTLOOKûWITHû-OODYSûANDû30ûBUTûAû
NEGATIVEûOUTLOOKûWITHû&ITCH
Citigroup, Goldman Sachs and HSBC were leads.
HIKMA HITS FIVE-YEAR POINT
HIKMA PHARMACEUTICALSûPLACEDûAû53Mû*ULYû
positive sign that it will do. 5.5%–6% is still a juicy instrument. [But] you ûBONDûATûûONû7EDNESDAYûWITHûTHEû
It followed First Abu Dhabi Bank earning can’t really apply the same argument to Omani DEALûNEARLYûTHREEûTIMESûSUBSCRIBED
praise from bankers for its investor-friendly or Bahraini banks as they’re the dogs.” (IKMAûISûHEADQUARTEREDûINû*ORDANûBUTûITû
stance after it redeemed its US$750m AT1 bonds AT1 issuance has picked up over the past ISûINCORPORATEDûANDûLISTEDûINûTHEû5+û)TSûBONDû
on their first call date of June 17. few weeks with a number of European lenders OFFERINGûWHICHûWASûATûTHEûSHORTERûENDûOFûTHEû
“FAB was the big talking point, and they issuing new notes to refinance upcoming calls. lVEûTOûSEVEN
YEARûRANGEûEXPLOREDûWITHû
decided to call even though it was highly
economical not to,” said a lead on ENBD.
“That certainly helped this transaction.
Investors have taken it as a positive sign that
the big GCC banks are treating this product in a
The most recent was RBS, which has
confirmed it will call its US$2bn 7.5% Additional
Tier 1 notes this month, after refinancing the
capital with a US$1.5bn new issue last month.
“Because bond yields have fallen so low,
INVESTORSûCAMEûINSIDEû)04SûOFûn
$EMANDûlNISHEDûABOVEû53BN
4HEûBONDûPROCEEDSûWILLûMAINLYûBEûUSEDûTOû
REPAYûMONEYûDRAWNûUNDERû(IKMASû53BNû
COMMITTEDû2#&ûMATURINGûINû$ECEMBERû
certain way.” economic cost might not be an issue even if ûSAIDû30û4HEûRATINGSûAGENCYûSAIDûTHEû
The moves from FAB and ENBD stand in banks have to pay a higher spread,” said Faisal 2#&ûWASûCURRENTLYûDRAWNûBYû53Mû
contrast to Oman’s Bank Dhofar, which in April Ali, senior portfolio manager at asset manager MAINLYûBECAUSEû(IKMAûUSEDûITûTOûREPAYûAû
became the first lender from the region to Azimut. US$500m bond on April 9.
announce it wasn’t redeeming an AT1 at its first “In my view, UAE banks should muddle 30ûUPGRADEDû(IKMAûBYûONEûNOTCHûTOû
opportunity because of economic reasons – in through the current period of economic """nûONû*UNEûûSAYINGûTHEûCOMPANYûHADû
line with the likes of Santander, Deutsche Bank downturn and as a result, maintain market CONTINUEDûTOûDELIVERûROBUSTûOPERATINGû
and Aareal Bank.
“Clearly FAB calling has put pressure on the
PROTECTIONûMETRICS
other UAE banks to follow suit,” said Abdul
Kadir Hussain, head of fixed-income asset
access. As a result, they should be able to PERFORMANCEûWHILEûMAINTAININGûVERYû
refinance maturing AT1 issues.” CONSERVATIVEûDEBT
Hussain said one area of focus was on the 4HEûRATINGSûAGENCYûEXPECTSû(IKMAûINûTHEûLONGû
fundamental challenges for the banking industry TERMûTOûMAINTAINûDEBTûTOû%BITDAûBELOWûX
management at Arqaam Capital, as the ENBD
deal was being marketed.
“But I believe that it does not necessarily
mean that all will do. I think the success of this
ENBD issue might give some indication of what
in the region, including lower credit growth, asset
quality and retail banking challenges given a
stagnating market.
Emirates NBD was one of eight UAE banks
to be put on a negative outlook by Moody’s on
(IKMAûPRIMARILYûOPERATESûINûTHEû53ûWITHû
THEûCOUNTRYûCONTRIBUTINGûûOFûREVENUESûOFû
53BNûINûû-%.!ûCONTRIBUTEDû
AROUNDûûANDû%UROPEûû
4HEûCOMPANYûISûRATEDû"AûBYû-OODYS
we might expect for future calls.”
ENBD drummed up demand of more than
US$2.3bn. Pricing came at 6.125%, compared to
IPTs of 6.50% area.
Leads saw the final level as offering a pick-up
of 12.5bp, over ENBD’s US$1bn 6.125% note
June 18.
“Vulnerabilities in the banking sector have
been brewing for some time as subdued
economic activity has led to a steady rise in
the non-performing loans ratio to levels close
to the highs following the 2009 crisis,” said
)NûLATEû*UNEû'ERMANûPHARMACEUTICALû
GROUPû"OEHRINGERû)NGELHEIMûEXITEDûITSûSTAKEû
INû(IKMAûTHROUGHûAûCOMBINEDûEQUITYû
placing to institutional shareholders and a
BUYBACKûBYû(IKMA
Boehringer acquired a stake in Hikma in
callable in March 2025, quoted at 6%.
“They had an existing AT1 which was trading
at 6% but the reset in 2025 is lower than this
new one,” said the lead.
The US$1bn 6.125% note callable in March
YEARûREVENUEûFORECASTûFORûITSûGENERICû
James Swanston, Middle East and North Africa
economist at Capital Economics.
“The coronavirus outbreak may exacerbate
problems of overcapacity in Dubai, causing bad
loans to rise even further. What’s more, relative
ûASûWELLûASûCASHûWHENû(IKMAûBOUGHTû
its US generic pharmaceuticals business
2OXANEû,ABORATORIESûFORû53BN
At the end of April Hikma maintained its
FULL
2025 has a reset margin of Treasuries plus to other banking sectors in the region, the UAE DRUGûBUSINESSûENCOURAGEDûBYûHIGHûDEMANDû
365.6bp. The margin on the new issue is relies more heavily upon wholesale financing for some of its medicines during the
570.2bp. which may become more difficult to roll over CORONAVIRUSûPANDEMICûDESPITEûTHEûHIGHûLEVELû
“That 2025 AT1 had traded very well even during the current crisis.” OFûUNCERTAINTY
during the pandemic volatility, so on that basis Emirates NBD Capital, HSBC and Standard )NûEARLYû-AYû(IKMAûLAUNCHEDûAûPRODUCTû
you could see investors were quite comfortable,” Chartered are global coordinators and structuring in the US to help sedate patients on
said the lead. agents for ENBD’s issue. They were joined as VENTILATORSûFOLLOWINGûAPPROVALûBYûTHEû&$!
“Not every bank has the ability to do AT1, and lead managers and bookrunners by Bank of Citigroup and HSBC were global
others will have to evaluate if they have market America, Citigroup and First Abu Dhabi Bank. COORDINATORSûFORûTHEûBONDûANDûTHEYûWEREû
access, their capital position and balance sheet.” Robert Hogg JOINEDûASûLEADSûANDûBOOKRUNNERSûBYûBank of
America and Mizuho.

62 International Financing Review July 4 2020

 EMERGING MARKETS AMERICAS

AMERICAS Argentine bondholder

BRAZIL group makes new offer
RAIZEN PRINTS UPSIZED TAP „ LATIN AMERICA ACC tries to build broad support as deadline looms

"RAZILIANûENERGYûCOMPANYûRAIZEN upsized a One of ARGENTINA‘s main creditor groups has willing to bring forward its proposed payment
TAPûOFûITSû53ûMûûNOTESûLASTû submitted a new offer to the government in the schedule on restructured debt to make its
7EDNESDAYûAPPROACHINGûINVESTORSûONûAû country’s US$65bn debt talks in a bid to secure a latest offer of around 50 cents per dollar plus
RELATIVELYûQUIETûDAYûACROSSûPRIMARYûBONDû deal by a deadline later this month, bondholder sweeteners, proposed on June 8, more attractive
markets. sources have told Reuters. to creditors.
4HEûCOMPANYûPRICEDûAû53Mû The Argentina Creditor Committee (ACC), The ACC bondholders who spoke to Reuters
REOPENINGûOFûTHEûBONDûATûAûYIELDûOFûû which includes more than 30 funds and said the 54.5 cents per bond value of the deal
after launching the deal tight to initial investment firms, made the new offer of about included so-called past-due interest (PDI) on
PRICEûTHOUGHTSûOFûTHAûHIGHûûAREA 54.5 cents per dollar after smoothing out recent defaulted bonds which has been building up at
/RIGINALLYûTHEûCOMPANYûWASûEXPECTEDûTOû internal tensions, the sources said. around US$10m-15m a day since late May.
ADDû53MûTOûTHEûBONDûBUTûUPSIZEDûTHEû The offer is a modest shift down from the Under the new ACC proposal, the PDI is
DEALûDESPITEûAûRELATIVELYûMODESTûORDERûBOOKû 55–56 cents that bondholders would have recognised 100% until July 29 and is given via a
of US$565m. received for their securities under the ACC’s bond that matures in 2030 with extremely low
h)TûDIDNTûSEEMûLIKEûAûBLOWOUTû)TûONLYû previous proposal. The ACC hopes it could also coupons, said one of the ACC bond holders.
TIGHTENEDûMARGINALLYûSOû)MûSUREûINVESTORSû get the backing of the two other main creditor The offer also has 66 two-thirds eligibility
LOVEûITvûSAIDûAûSENIORûBANKERûAWAYûFROMû groups involved in the debt talks. clause, meaning that the exchange should only
the deal. “The idea is to try and get broad support,” one go ahead if this amount of bonds tender.
4HEûNOTESûWEREûTRADINGûATûAûYIELDûOFûYIELDû bondholder told Reuters. “It requires only some date adjustments and
ûACCORDINGûTOû-ARKET!XESSûDATAû The move comes at a crucial stage in talks a reduction in the haircut from 3% to 2% on the
PROVIDINGûBPûPICK
UPûFORûINVESTORSû with the Argentine government. front-end bonds with respect to Argentina’s offer
“I would not be surprised if the Raizen The debt negotiations have been extended from the June 8,” the person added.
TAPûWEREûTOûEVENûPRICEûATûAROUNDûû a number of times in an effort to reach a deal, A creditor source with knowledge of the talks
WHICHûWOULDûBEûEXPENSIVEûINûMYûVIEWûBUTû though the other two main creditor groups, the said the Ad Hoc bondholder group, including
consistent with the recent pricing Ad Hoc and Exchange groups, complained last names like BlackRock and Fidelity would not
BEHAVIOURûWEVEûSEENvûSAIDû).4,û&#3TONEû week of a lack of “meaningful engagement” from support the new ACC proposal.
ANALYSTû2AFAELû%LIASûINûAûREPORTûEARLIERûINû the government since mid-June. The person added there had been no
THEûDAYû Pressure is building with the next deadline engagement by Argentina with the Ad Hoc group
%LIASûESTIMATEDûFAIRûVALUEûTOûBEûû
SAYINGûINITIALûPRICEûTHOUGHTSûWEREûOVERLYû
GENEROUSûINûTHEûBEGINNINGûOFûTHEûDAY
4HEûDEALûWASûISSUEDûVIAûTHEûCOMPANYSû
DEBT
for an agreement looming on July 24 and the since talks stalled in mid-June: “The government
coronavirus compounding a long recession that seems to be doing everything possible to avoid
has already battered the government’s capacity negotiating with the country’s most significant
to repay its debts. creditors.”
ISSUINGûVEHICLEû2AIZENû&UELSû&INANCEû A source close to the government’s thinking Additional reporting by Karin Strohecker
WHICHûHADûNOTûCOMEûTOûMARKETûSINCEûû told Reuters earlier on Thursday that it was Marc Jones
WHENû2AIZENûSOLDû53MûOFûTHEûû
ûNOTEû
4HEûDEALûWASûGUARANTEEDûBYû2AIZENû3!û HEALTHûANDûSANITISINGûINITIATIVESûINCREASEvû
INCLUDINGûTHEûCOMPANYSûFUELûDISTRIBUTIONû MEXICO THEûRATINGûAGENCYûSAID
BUSINESSû2AIZENû#OMBUSTIVEISû3!ûANDûITSû 3KIPPINGûPAYMENTûONûTHEûBONDûISûDESIGNEDû
SUGARûETHANOLûANDûENERGYûCOGENERATIONû GRUPO POSADAS’ 2022 BOND SLUMPS IN TOûMAXIMISEûTHEûCOMPANYSûlNANCIALû
COMPANYû2AIZENû%NERGIAû3!û FACE OF MISSED PAYMENT mEXIBILITYûALLOWINGûITûTOûBETTERûFACEûTHEû
2AIZENûISûJOINTLYûOWNEDûBYû"RAZILIANû CHALLENGESûPRESENTEDûTOûTHEû-EXICANûHOTELû
SUGARûANDûENERGYûCOMPANYûCOSAN and -EXICANûHOTELûCOMPANYûGRUPO POSADAS has INDUSTRYûASûAûRESULTûOFûTHEû#OVID
ûPANDEMICû
!MERICANûOILûCOMPANYûSHELL. SEENûAû
POINTûDROPûINûITSûûSû Grupo Posadas said in a statement.
)TûISû"RAZILSûFOURTH
LARGESTûCOMPANYûBYû since it said it would miss an interest %ARLIERûTHISûYEARûTHEûCOMPANYûWASûFORCEDû
REVENUEû"RAZILSûSECOND
LARGESTûFUELû PAYMENTûONûTHEûBOND TOûSHUTûûOFûITSûHOTELSûASû#OVID
ûCASESû
DISTRIBUTIONûCOMPANYûANDûONEûOFûITSû 4HEûBONDûSAWûLOWSûOFûûLASTûWEEKû SPIKEDûINûTHEûCOUNTRY
LARGESTûINDIVIDUALûSUGARûEXPORTERSû DOWNûFROMûûONû*UNEûûWHENûTHEû 7ITHûCASESûINû-EXICOûCONTINUINGûTOûRISEûITû
ACCORDINGûTOûTHEûCOMPANYûWEBSITE ISSUERûSAIDûITûWOULDûMISSûAû53Mû is unclear how the hotel and lodging
,ASTûWEEKûANOTHERû#OSAN
OWNEDû PAYMENTûDUEûONû*UNEûûACCORDINGûTOû INDUSTRYûWILLûFAREûLEAVINGûINVESTORSûWITHû
COMPANYû"RAZILIANûRAILROADûOPERATORûRUMO, -ARKET!XESSûDATA LITTLEûINSIGHTûINTOûAûLIKELYûRESTRUCTURING
ALSOûTAPPEDûTHEûDOLLARûMARKETûBYûISSUINGûAû &OLLOWINGûTHEûCOMPANYSûANNOUNCEMENTû h)ûBELIEVEûTHATûINûTHEûENDûITûWILLûBEûANû
debut green bond. BOTHû30û2ATINGSûANDû&ITCHûDOWNGRADEDûTHEû EXCHANGEûFORûAûNEWûBONDûWITHûEXTENDEDû
2AIZENSûDEALûISûRATEDû"""n"""ûANDûWASû COMPANYûTOû##ûANDû#ûRESPECTIVELY MATURITIESûAûCOUPLEûOFûYEARSûOFûGRACEûPERIODû
LEDûBYûBOOKRUNNERSûAREûBNP Paribas, “Fitch estimates Posadas will generate CAPITALISATIONûOFû0$)ûAûREDUCTIONûINûCOUPONû
Citigroup, JP Morgan, MUFG, Scotiabank, NEGATIVEû&#&û;FREEûCASHmOW=ûINûûASû ANDûPROBABLYûEVENûAûHAIRCUTvûWROTEû).4,û&#û
Bradesco BBIûANDûSantander. OCCUPANCYûLEVELSûAREûLOWûANDûCOSTSûFORû 3TONEûANALYSTû2AFAELû%LIASûINûAûREPORT

International Financing Review July 4 2020 63

 h7ITHOUTûANYûCLARITYûONûTHEûTIMINGûTHEû 7HILEû5RUGUAYûWILLûBEûFOCUSEDûONû 4HEûDOLLARûTRANCHEûWASûPRICEDûATûAûYIELDûOFû
SHAPEûANDûTHEûLEVELûOFûRECOVERYûOFû0OSADASû RAISINGûDEBTûINûITSûLOCALûMARKETûFORûTHEûYEARû ûWITHûAûNEGATIVEûISSUEûPREMIUMû
BUSINESSûCREDITORSûWILLûBEûATûAûLOSSûASûTOû and does not need to access international MAKINGûHISTORYûASûTHEûCOUNTRYSûLOWESTûYIELDû
WHATûTOûDEMANDûANDûTHEûCOMPANYûASûTOû MARKETSûGIVENûTHEûRIGHTûCONDITIONSûITû EVERûSINCEûITûBEGANûISSUINGûDEBTûSOMEûû
WHATûITûCANûOFFERv COULDûSEIZEûTHEûOPPORTUNITY YEARSûAGOûACCORDINGûTOûTHEûlNANCEûMINISTRY
“If market conditions continue to .EIGHBOURINGûCOUNTRIESû0ERUû!""" û
IMPROVEûDURINGûTHEûSECONDûHALFûOFûTHISûYEARû ANDû#HILEû!! ûISSUEDû YEARûPAPERûATû
URUGUAY ANDûWEûSEEûAûWINDOWûOFûOPPORTUNITYûWEû YIELDSûOFûûANDûûRESPECTIVELYû
don’t rule out tapping the global markets EARLIERûTHISûYEAR
SOVEREIGN EYES POSSIBLE MARKET AGAINvûSAIDû+AMIL “Our goal was to raise new funding in
RETURN THIS YEAR 4HEûCOUNTRYûISûALSOûLOOKINGûTOûDIVERSIFYû INTERNATIONALûMARKETSûBUTûTOûDOûITûINûAûWAYû
sources of funding across currencies and THATûAVOIDEDûAûSIGNIlCANTûRE DOLLARISATIONûOFû
&RESHûOFFûAûSUCCESSFULû53BNûEQUIVALENTû MARKETSûINCLUDINGûPOSSIBLEûTRANSACTIONSûINû ITSûDEBTûSTACKvûSAIDû+AMIL
TRANSACTIONûINûTHEûDOLLARûMARKETûLASTûMONTHû *APANESEûYENûHEûADDED h4HATûMEANTûRAISINGûNEWûFUNDINGûINûLOCALû
URUGUAY could return in the second half of the /Nû*UNEûûTHEûSOVEREIGNûISSUEDûTHEû CURRENCYûONûAûLARGEûSCALEv
YEARûIFûMARKETûCONDITIONSûALLOWûTHEûCOUNTRYSû REGIONSûlRSTûLOCALûCURRENCYûLINKEDûBONDSû Proceeds of the deal will be allocated
HEADûOFûDEBTû(ERMANû+AMILûTOLDû)&2 SINCEûTHEû#OVID ûPANDEMICûHITûGLOBALû TOWARDSûCURBINGûTHEûEFFECTSûOFûTHEû#OVID û
MARKETSûANDûTHEûCOUNTRYSûlRSTûINmATIONû pandemic as well as the repurchase of
ALL INTL EMERGING MARKETS BONDS LINKERûSINCEû 53MûOFûITSûûANDûûBONDS
BOOKRUNNERS: 1/1/2020–30/6/2020 )NûAûTWO PARTûDEALûITûAPPROACHEDû
Latin America
INVESTORSûWITHûAû53MûTAPûOFûITSûû
Managing No of Total Share
SûANDûAûNEWûINmATION LINKEDû0SBNû REGIONAL
bank or group issues US$(m) (%) 53BN ûûBONDûOFFERING
1 JP Morgan 29 8,743.15 12.5 4HEûDEALûMARKEDûTHEûlRSTûLOCAL CURRENCYû CAF HEADS TO SAMURAI RETAIL MARKET
2 Deutsche Bank 10 6,311.66 9.0 deal for 2020.
3 BofA Securities 24 5,757.38 8.2 h7EûAREûVERYûSATISlEDûWITHûTHEûROBUSTû CORPORACION ANDINA DE FOMENTO is planning a

4 Citigroup 16 5,725.18 8.2 OUTCOMEûOFûTHEûTRANSACTIONûINûTERMSûOFûTHEû lVE YEARû3AMURAIûBONDûOFFERINGûTOû*APANESEû

5 Goldman Sachs 21 4,945.88 7.1 LEVELûOFûDEMANDûANDûAMOUNTûISSUEDûTHEû RETAILûINVESTORS
6 BNP Paribas 11 4,663.02 6.6 RATESûACHIEVEDûTHEûCURRENCYûMIXûOFûTHEû According to the amended shelf
7 Itau Unibanco 14 4,577.98 6.5 BONDSûANDûTHEûQUALITYûOFûTHEûINVESTORSûTHATû REGISTRATIONûTHEû,ATINû!MERICANû
8 Scotiabank 14 4,203.77 6.0 PARTICIPATEDvûSAIDû+AMIL DEVELOPMENTûBANKûISûAIMINGûTOûPRICEûTHEû
9 HSBC 10 3,292.82 4.7 Books on the transaction peaked BONDûINûEARLYû*ULYû4HEûCOUPONûWILLûBEûSETû
10 Credit Suisse 9 3,048.39 4.3 ATû53BNûEQUIVALENTûANDûTHEûORDERû BETWEENûûANDû
Total 76 70,147.33 BOOKûSAWûTHEûPARTICIPATIONûOFûOVERûû Proceeds will be used for general business
Excluding equity-related debt.
ACCOUNTSûWITHûûOFûTHEMûINûTHEûLOCALû purposes. DaiwaûISûLEADûMANAGERû4HEû
Source: Refinitiv SDC code: L3 tranche. DEVELOPMENTûBANKûISûRATEDû!A!

Make the most of

your success stories
Reinforce your marketing message
with reprints from IFR
If your company has been singled out for praise by one of IFR’s independent
journalists, a high quality reproduction of the article will make a valuable
addition to your marketing collateral.
IFR reprints act as a powerful reinforcement of your sales message by providing
a credible and authoritative third-party endorsement.
Reprints can be provided in hard copy or elecronic format and we can tailor the
design to include logos, adverts and contact details.

For more information on the various advertising and sponsorship opportunities available within IFR,
email: gloria.balbastro@refinitiv.com

64 International Financing Review July 4 2020

 LOANS
Australia 66 China 66 Hong Kong 68 Japan 69 Singapore 70 Vietnam 71 Bulgaria 71 Netherlands 71
Spain 72 UK 72 United States 74 Leveraged Loans 75 Restructuring 79

„ FRONT STORY EUROPE, MIDDLE EAST AND AFRICA

Liquidity charge lifts lending

Only a 4% drop in loan volume despite coronavirus crisis
Volume boosted as large blue-chip borrowers secure sizeable loans
Syndicated lending in Europe, the Middle French train maker ALSTOM completed related deals, with the launch of a €775m
%ASTûANDû!FRICAûOFû53BNûFORûTHEûlRSTûSIXû €3.9bn of loans backing its acquisition of buyout loan for French mortgage broker
months of the year was just 4% down on the Canada’s Bombardier Transportation in FINANCIERE CEP, followed a week later by a
previous year as corporates worked quickly April, while a £4bn investment-grade bridge €1.61bn acquisition loan backing the buyout
to raise billions of dollars of short-term loan backing the US$38bn merger of the OFû$UTCHûEQUIPMENTûRENTALûlRMûBOELS.
liquidity and weather the immediate Covid- British businesses of LIBERTY GLOBAL and To attract lenders, borrowers had to pay
19 storm. TELEFONICA closed in May. up to get loans away, including higher
Government-enforced lockdowns across 7ITHûLONGER
TERMûlNANCINGûMOSTLYû MARGINSûANDûWIDERû/)$SûCOMPAREDûTOûTHEû
the region to limit the spread of the virus UNAVAILABLEûRElNANCINGûFELLûTOû53BNûINû end of 2019 and the start of 2020.
left many companies unable to operate
normally, with borrowers in sectors such as
leisure, travel and automotive, suffering
from severe cash-burn through months of
DATEDû market and received positive responses.
near inactivity. The oil and gas sector was
worst affected by falling demand and low oil
prices.
The number of deals slumped to 585
THEûlRSTûHALFûûLOWERûTHANû53BNûAû
YEARûEARLIERû"ORROWERSûUSEDûEXTENSIONû
OPTIONSûORûEXTENDEDûEXISTINGûFACILITIESû
INSTEADûOFûOPTINGûFORûEXPENSIVEûSHORT
RElNANCINGS
“We have got a grip on the immediate
situation, but we’re not out of the woods
yet,” a senior banker said.
In June, the market picked up momentum
to launch jumbo buyout deals, including
TKE and MasMovil, which re-energised the
h)TûSHOWEDûTHEûMARKETûHASûSUFlCIENTû
liquidity to digest billion-plus deals,” a
LEVERAGEDûlNANCEûBANKERûSAID
The average price of European leveraged
DURINGûTHEûlRSTûHALFûFROMûûINûTHEûlRSTûHALFû
of 2019. However, the average size of deals
increased as investment-grade companies
scrambled to put in place sizeable credit
facilities, in case the wider capital markets
became inaccessible during the crisis.
Meanwhile, smaller companies facing
substantial hikes in loan pricing turned to
amendments and covenant waivers to
SECUREûTHEIRûlNANCES
The biggest deals in the second quarter
“While borrowers are still in survival
mode, we are unlikely to see a huge uptick
INûDEMANDûFORû-!ûORûRElNANCINGû/NCEûWEû
return to a semblance of normality, we can
refocus on the types of activity we saw pre-
crisis and press on with the transition to
GREENûANDûSUSTAINABLEûlNANCEv
LEVERAGED FALL
First-half volume in Europe’s leveraged loan
market was dragged lower to US$74.59bn,
loans in the secondary market also gained
some ground from May onwards, to above
90% of face value, having plummeted to
under 80% in late March, the lowest level
since 2009.
However, bankers remain cautious about
the outlook for the rest of the year.
“There are lots of uncertainties out there.
There could be a second wave of coronavirus
infections and hard economic fallout. Also,
the US election is a key focus to watch out
were additional liquidity facilities, led by a
€12bn short-term loan for German car
maker DAIMLER that closed in late April with
a group of 15 banks.
Earlier in April, oil giant BP secured a
US$10bn two-year credit facility to provide
the lowest level since 2012, as it dealt with
the fallout from the pandemic.
Second-quarter volume plummeted by
53% to US$21.87bn, from US$46.59bn during
the same period last year.
The data did not take into account a
FORûASûWELLvûTHEûLEVERAGEDûlNANCEûBANKERû
said. “It might take some time to go back to
pre-Covid status.”
The pandemic hit lending activity in
Central and Eastern Europe, the Middle East
and Africa region, where half-year volume
it with additional liquidity headroom during
MONTHû
the crisis, while industry peer TOTAL agreed a
US$6.35bn short-term loan.
In May, AIR FRANCE-KLMûlNALISEDûõBNûOFû
couple of jumbo deals, including a €3.565bn- WASû53BNûTHEûLOWESTûSIX
equivalent buyout loan for THYSSENKRUPP volume since 2009.
ELEVATOR, which closed on June 30 and a The Middle East saw the largest fall in
€1.5bn buyout loan for Spanish telecoms volume, down 23% to US$27.08bn compared
French state-backed funding, including a company MASMOVIL which closed on July 1. TOûTHEûlRSTûHALFûOFûûASûTHEûIMPACTûOFû
€4bn loan from a syndicate of nine banks, Europe’s leveraged loan market was all Covid-19 and the dramatic fall in oil prices
while in June its Dutch subsidiary KLM but shut during April as a result of the kept many borrowers and lenders out of the
agreed a €3.4bn state-backed loan package, lockdown implemented across the globe, market.
INCLUDINGûAûõBNûlVE
YEARûFACILITYûFROMûû prompted by the coronavirus pandemic. /NEûBRIGHTûSPOTûWASûTHEûCLOSINGûOFûAûLONG

banks. It reopened tentatively in early May with awaited US$10bn one-year loan for SAUDI
!CQUISITIONûANDûRElNANCINGûACTIVITYû ANûAMEND
AND
EXTENDûPROCESSûBYû%UROPEANû ARAMCO, the world’s largest oil producer.
usually the main drivers of loan market lab operator SYNLAB and a US$1bn term- Russia also continued to be muted with
volume, were severely limited as borrowers LOANûRElNANCINGûBYû53ûDATAûANALYTICSûlRMû ONLYû53BNûOFûDEALSûDONEûINûTHEûlRSTûHALFû
focused on survival. NIELSEN. despite hopes at the beginning of the year
M&A lending slumped 30% to US$72.5bn It was only in late May that the European that 2020 would see an uptick in deal
INûTHEûlRSTûHALFûDOWNûFROMû53BNûINû LEVERAGEDûLOANûMARKETûMADEûTHEûlRSTûSTEPSû activity.
THEûlRSTûHALFûOFû since March to reopen for acquisition- Alasdair Reilly, Prudence Ho

International Financing Review July 4 2020 65

 The borrowing, which attracted 26 become available due to the economic
lenders in syndication, comprises A$550m slowdown, the Melbourne-based company said.
ASIA-PACIFIC and A$850m tranches due July 2022, “We are seeing a number of high-quality
A$850m, US$385m and A$500m portions sites come to market because of the change
AUSTRALIA
ORIGIN ENERGY COMPLETES A&E
ORIGIN ENERGY has amended A$1.17bn-
YEARû the occasional additional site if the
equivalent (US$807m) of loans signed in
ûANDûEXTENDEDûTHEIRûMATURITIESûBYûTWOû
years to July 2024.
due July 2023, and a A$500m piece due July
2025.
LENDLEASE LIFTS LOAN TO A$800m
,ENDLEASEû'ROUPûHASûINCREASEDûITSûTWO
loan to A$800m from an initial target of
A$500m after 13 banks joined in general
syndication.
INûMACROûCONDITIONSvûSAIDû,IFESTYLEû
Communities managing director James
+ELLYûh/URûINTENTIONûREMAINSûTOûCONTINUEûTOû
acquire two new sites every 12 months with
the additional funding available to support
opportunity arises.”
,IFESTYLEûHASûAGREEDûTOûPURCHASEûAûNINE
hectare site located in Clyde in Victoria
ANZ, Mizuho Bank and Westpac were the The deal is split equally into a term loan STATEûWITHûSETTLEMENTûEXPECTEDûINûMID
û
coordinating mandated lead arrangers and and a revolving credit facility. and construction set to begin soon
BOOKRUNNERSûOFûTHEûEXERCISEûWHICHûDREWûû The loan offers an opening interest afterwards.
other lenders.
Bank of America, Bank of China Hong Kong,
Bank of China Sydney branch, China Construction
Bank, Citigroup, Commonwealth Bank of
Australia, DBS Bank, DNB Bank, Goldman Sachs,
ICBC, MUFG, Oversea Chinese Banking Corp,
Royal Bank of Canada, Societe Generale, SMBC
and UBS joined in syndication.
The company was initially seeking to
AMENDûANDûEXTENDû!BN
EQUIVALENTû Standard Chartered Bank. Lead arrangers are
loans comprising a A$550m-equivalent
working capital facility (in Australian and
US dollars) and a A$700m Tranche A, which
margin of 250bp over BBSY and an upfront
fee of 20bp. The deal was originally
launched at A$500m split into a A$300m
term loan portion and a A$200m revolver.
LENDLEASE FINANCE is the borrower.
Mandated lead arrangers and bookrunners are
ANZ, Commonwealth Bank of Australia, HSBC,
National Australia Bank and SMBC. Mandated
lead arrangers are DBS Bank, MUFG and
EIGHT BANKS LEND TO ZTE
China Everbright Bank and Morgan Stanley.
Arrangers are United Overseas Bank, Citigroup,
Goldman Sachs, ICBC, Sumitomo Mitsui Trust
,IFESTYLEûDEVELOPSûOWNSûANDûMANAGESû
affordable independent living residential
land lease communities. It has 22 residential
land lease communities at the planning or
development stage or under management.
CHINA
Telecoms equipment group ZTE has raised a
US$300m three-year loan from eight
has been reduced to A$621.6m.
The company is offering interest margins
based on a credit ratings grid. Where ratings
assigned by S&P and Moody’s are not the
same, the lower rating will apply.
Bank, Shinsei Bank, Taipei Fubon Bank and Taishin
International Bank.
In April, the company said loans for about
A$900m with terms ranging from 12 to 24
months were in the works and subject to
LENDERSûTHEûlRSTûTIMEûITûHASûMANAGEDûTOû
attract multiple lenders since being caught
up in the US-China trade war.
Bank of China Macau, Bank of Communications
Hong Kong and Shanghai Pudong Development
/RIGINûISûCURRENTLYûRATEDû"AA""""""û documentation. Bank London were the mandated lead
based on which the opening margin would The company has raised equity and loans arrangers of the transaction, which will be
BEûBPû""39,IBORû&ORûHIGHERûRATINGSûOFû totalling about A$2.05bn to boost its balance used for general corporate purposes.
"AA"""ûANDû!!nûANDûABOVEûTHEûMARGINû sheet in response to the market volatility Credit Agricole CIB is the only foreign bank
drops to 165bp and 155bp respectively. For caused by the coronavirus pandemic, it said providing the loan.
LOWERûRATINGSûOFû"AA"""nûANDûBELOWû at the time. Lead arrangers are China Everbright Bank,
investment-grade the margin steps up to )Nû*ANUARYû,ENDLEASEûRAISEDûAû!Mû China Minsheng Banking Corp and Bank of
190bp and 220bp respectively. SELF
ARRANGEDûlVE
YEARûCLUBûLOANûBACKINGûTHEû Beijing. Arrangers are Bank of Shanghai and
4HEûOPENINGûMARGINûOFûBPûOVERû""39 DEVELOPMENTûOFûANûOFlCEûTOWERûINû3YDNEYû Credit Agricole CIB.
,IBORûISûRICHERûTHANûTHATûONûTHEûLOANSûSIGNEDû from 10 banks. Bank of China, CBA, DBS ZTE (HK), a wholly owned subsidiary of ZTE,
in 2019 and 2018, which were linked to Bank, HSBC, ICBC, MUFG Bank, Mizuho is the borrower, while ZTE is providing a
/RIGINSû"AA"""n"""ûRATINGSûATûTHEûTIME "ANKû/#"#û"ANKû3-"#ûANDû5NITEDû guarantee.
)Nû&EBRUARYûû/RIGINûCOMPLETEDûAû /VERSEASû"ANKûPROVIDEDûTHEûLOAN
A$554m-equivalent loan that attracted a ,ENDLEASEû'ROUPûAûCONSTRUCTIONûREALû ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY
dozen lenders in syndication. MUFG led the estate and infrastructure company, is rated SYNDICATED VOLUME (INCLUDING JAPAN)
deal, which was was split into a A$410m Baa3 by Moody’s. BOOKRUNNERS: 1/1/2020–30/6/2020
seven-year Tranche A, a US$20m seven-year Managing No of Total Share
Tranche B and a A$116m 7.4-year Tranche C. LIFESTYLE COMMUNITIES UPS LOAN bank or group issues US$(m) (%)
The margins on Tranches A and C were 1 Mizuho 247 53,687.88 20.2
155bp and 162.5bp over BBSY, respectively, LIFESTYLE COMMUNITIES has increased an 2 MUFG 402 40,828.31 15.4
WHILEû4RANCHEû"ûOFFEREDûBPûOVERû,IBOR EXISTINGûLOANûTOû!MûANDûEXTENDEDûITSû 3 Bank of China 179 35,307.02 13.3
)Nû*UNEûû/RIGINûCOMPLETEDûANû!%û maturity. 4 Sumitomo Mitsui 306 29,946.48 11.3
for loans of about A$3.8bn-equivalent, with The facility, which was increased by 5 ANZ 34 7,277.93 2.7
ANZ, SMBC and Westpac as coordinating A$50m, comprises a A$165m tranche due 6 HSBC 38 5,380.06 2.0
-,!"S March 2024 and a A$110m portion maturing 7 DBS Group 24 5,309.96 2.0
4HEûFOURûANDûlVE
YEARûTRANCHESûWEREû June 2025. 8 China Merchants 12 5,101.16 1.9
EXTENDEDûTOû*ULYûûANDû*ULYûû Commonwealth Bank of Australia, National 9 Citigroup 16 4,543.92 1.7
offering margins of 130bp and 140bp over Australia Bank and HSBC are the lenders to 10 ICBC 14 4,294.06 1.6
""39,IBORûRESPECTIVELY the facility under the common terms deed. Total 1,462 265,460.63
A new seven-year tranche pays 160bp The loan will help provide balance sheet Proportional credit
OVERû""39,IBORûANDûMATURESûINû*ULYû capacity to acquire additional sites that may Source: Refinitiv SDC code: S3a

66 International Financing Review July 4 2020


APAC lending tumbles to eight-year low
„ ASIA Second quarter shows gradual improvement in liquidity
Syndicated lending in Asia-Pacific, excluding
Japan, slumped to its slowest first half in eight
years, as the shock of the coronavirus pandemic
weighed on activity.
Loan volumes in the first six months of 2020
tumbled nearly 17% to US$195.74bn from
US$235.58bn in the same period a year ago with
the number of deals dropping to 589 compared
with 726 in the first six months of 2019.
In a sign that some confidence is returning,
however, lending in the second quarter this
year grew marginally to US$101.19bn from
US$94.19bn raised in the preceding three
months.
“In the first quarter through to the beginning
of the second quarter, most banks were focusing
on preserving their capital to support existing
clients, so there had been less interest to look at
new transactions or new credits, unless for really
attractive names,” said Benjamin Ng, co-head
of debt capital markets for Asia at Citigroup in
Hong Kong.
Coronavirus containment measures across the
region have impacted syndicated lending activity
in other ways.
“Syndications are taking longer to close,
partly driven by the work-from-home measures,
but there is also increased scrutiny by target
lenders,” said Andrew Ashman, head of APAC
loan syndicate at Barclays in Singapore. “Banks
are taking their time to do their due diligence,
particularly for new relationships, so it is taking
longer to get things done.”
Debt repayment and refinancing continued
to be the main driver of activity in the market,
accounting for US$75.02bn, or 38% of the total
syndicated loan volumes in the first half of 2020.
Syndications from the hard-hit aviation sector
stalled. Australia’s QANTAS AIRWAYS was the only
Separately, ZTD is applying for credit lines
totalling US$6.8bn-equivalent from two
state-owned banks. It is seeking US$4bn
from China Development Bank Shenzhen branch
and a Rmb20bn (US$2.8bn) credit line from
Bank of China.
ZTE tapped similar credit lines totalling
US$10.7bn-equivalent from the same two
lenders in June 2018 following the company’s
request for a waiver of a covenant breach on a
US$450m loan signed in July 2014.
The waiver request was related to a
suspension of trading in ZTE’s shares and
the consent from lenders helped avert an
event of default on the four-year loan, which
was ZTE’s last syndicated borrowing.
It paid top-level all-in pricing of 265bp via
ANûINTERESTûMARGINûOFûBPûOVERû,IBOR
airline in Asia-Pacific to brave market turbulence
in the second quarter, closing an increased
A$450m (US$312m) 10-year amortising loan in
May with nine banks, including five in general
syndication.
Most other airlines landed bilateral or club
deals – or emergency funding from their
governments – while aircraft leasing companies
completed loan syndications totalling a mere
US$289.9m, down from US$2.65bn in the same
period a year ago.
M&A STANDSTILL
Event-driven financings also took a significant
hit, with the volume in the first six months of
2020 plummeting more than 25% year-on-year
to US$16.84bn from US$22.7bn. The number of
event-driven deals nearly halved, falling to 24
from 46.
Major M&A lending markets such as Hong
Kong and Taiwan suffered significant year-
on-year declines as a result, with Hong Kong
tumbling 75% to US$2.40bn.
Event-driven loans from China rocketed 171%
to US$3.74bn, albeit from a depressed base,
largely thanks to a Rmb20bn (US$2.83bn)
loan in February for Hillhouse-backed Zhuhai
Mingjun’s acquisition of a 15% stake in
Shenzhen-listed Gree Electric Appliances Inc
of Zhuhai, a deal which was first announced
in October 2019. Geopolitical tensions and an
ongoing trade war with the US have reined in
Chinese acquisitions and related financings in
recent years.
Australia was a standout, bucking the
regional trend with US$5.46bn of event-driven
loans in the first half of 2020. The bulk of
this volume was accounted for by the jumbo
A$5.25bn financing supporting the merger
In May, US President Donald Trump
EXTENDEDûFORûANOTHERûYEARûANûEXECUTIVEûORDERû
signed in May 2019 declaring a national
emergency and barring US companies from
USINGûTELECOMSûEQUIPMENTûMADEûBYûlRMSû
posing a national security risk.
US lawmakers said Trump’s order was
aimed squarely at Chinese companies
Huawei Technologies and ZTE.
GREENLAND SIGNS US$200m REFI
Hong Kong-listed GREENLAND HONG KONG
HOLDINGS has raised a US$200m dual-
currency three-year loan with two banks
joining in syndication.
Nanyang Commercial Bank joined China
Everbright Bank and HSBC with equal titles as
International Financing Review July 4 2020
LOANS ASIA-PACIFIC
of VODAFONE HUTCHISON AUSTRALIA with TPG
TELECOM.
Leveraged financings, mainly in the form of
Term Loan B deals, were still going through in
Australia with a US$327m-equivalent add-on
backing infrastructure services company
VENTIA‘s acquisition of Broadspectrum closing
successfully in June. The deal was the first TLB
to be launched and closed in the region after the
Covid-19 outbreak.
Despite the decline in activity, bankers are
optimistic about a pick-up in M&A dealflow.
“I would expect well-capitalised and liquid
corporates as well as private equity sponsors to
be very well-placed to take advantage of further
acquisition opportunities that will no doubt present
themselves in the coming year,” said James Poulos,
head of loan markets and syndications for Australia
and New Zealand at MUFG.
ROAD TO RECOVERY?
Market participants believe Asia is better placed
than the rest of the world to rebound from the
impact of Covid-19 in the second half of the year.
Loan bankers see a busy pipeline of deals ahead
and expect appetite for Asian assets to remain
strong.
“Foreign banks have been more supportive
this time around than they were during the 2008
global financial crisis, when there was a greater
retreat back to their home markets,” said Gavin
Chappell, head of syndications for Australia at
ANZ.
But he cautioned that a recovery could be
delayed because of capital requirements for
banks should there be broader global economic
fallout and corporate downgrades and defaults
over the next six to 12 months.
Apple Li
mandated lead arrangers and bookrunners,
while Tai Fung Bank came in as a lead
arranger.
The facility, which is available in either
US or Hong Kong dollars, offered top-level
all-in pricing of 343.33bp based on an
INTERESTûMARGINûOFûBPûOVERû,IBORûORû
Hibor.
0ROCEEDSûWILLûBEûUSEDûTOûRElNANCEûAû
US$250m three-year loan the borrower
obtained in June 2017, which paid top-level
all-in pricing of 313bp based on an interest
MARGINûOFûBPûOVERû,IBORûORû(IBORûANDûANû
average life of 2.85 years.
Greenland Hong Kong Holdings is
majority owned by Shanghai-based state-
owned developer Greenland Holding
Group.
67
 Separately, Gluon Xima International, an Hong Kong-listed parent company. The Shanghai Pudong Development Bank was the
indirect wholly owned subsidiary of parent is providing a guarantee. sole coordinator, mandated lead arranger
Greenland Holding Group, is raising a loan &UNDSûAREûFORûRElNANCINGûANDûGENERALû and bookrunner of the transaction, which
OFûAPPROXIMATELYû53MûALSOûFORû
RElNANCING
Credit SuisseûISûTHEû-,!"ûOFûTHEû
transaction. Greenland Holding will
provide a guarantee.
ZHENRO RETURNS FOR US$100m
corporate purposes.
AMVIG BACK FOR HK$1.35bn REFI
Hong Kong-listed cigarette packaging maker
AMVIG HOLDINGS has launched a HK$1.35bn
THREE
will fund general corporate purposes.
Mandated lead arrangers and bookrunners are
Bank of China, China Zheshang Bank, Huaxia
Bank, ICBC, China Construction Bank and China
CITIC Bank International. Mandated lead
arrangers are Bank of Shanghai, Nanyang
YEARûLOANûBARELYûSIXûMONTHSûAFTERû
Hong Kong-listed property developer ZHENRO
PROPERTIES GROUP is returning to the market
with a US$100m three-year loan.
Bank of China (Hong Kong) is the mandated
lead arranger and bookrunner of the
transaction, which offers an interest margin
OFûBPûOVERû,IBORûANDûHASûANûAVERAGEûLIFEû
of 2.5 years.
,EADûARRANGERSûJOININGûWITHû53MûORû
above receive top-level all-in pricing of
520bp via a 275bp fee, while arrangers
TAKINGû53MnMûEARNûALL
INûPRICINGûOFû guarantors.
500bp via a 225bp fee.
0ROCEEDSûWILLûBEûFORûRElNANCINGûANDû
general corporate purposes.
Commercial Bank, China Everbright Bank and
obtaining a smaller borrowing.
ANZ is the mandated lead arranger and
bookrunner of the bullet facility, which
offers an interest margin of 150bp over
Hibor.
-,!SûCOMMITTINGû(+MûORûMOREûWILLû
receive all-in pricing of 180bp via a
participation fee of 90bp, while lead
ARRANGERSûJOININGûWITHû(+MnMû
earn all-in pricing of 175bp via a 75bp fee.
The borrower’s subsidiaries, AMVIG
Investment and AMVIG Group, are the
Huijin Investment as a controlling
&UNDSûAREûFORûRElNANCINGûPURPOSES
In December last year, the borrower
raised a HK$1.15bn one-year loan. ANZ was
Luso International Banking. Lead arranger is Ping
An Bank.
The loan, to be available in Hong Kong
and US dollars, offered a top-level all-in
pricing of 155bp based on an interest
MARGINûOFûBPûOVERû(IBOR,IBOR
Shenzhen-listed parent company
Shenwan Hongyuan Securities is providing a
letter of comfort for the facility.
4HEûBORROWERûISûTHEûmAGSHIPûCOMPANYûOFû
Shenwan Hongyuan Group, which counts
state-owned investment company Central
shareholder.
Zhenro’s previous visit to the market was ALSOûTHEû-,!"ûONûTHATûDEALûWHICHûPAIDûALL
INû INDIA
in July last year for a US$120m-equivalent pricing of 170bp based on a margin of
DEBUTûOFFSHOREûLOANûFROMûlVEûLENDERSû 150bp. RELIANCE INDUSTRIES’ SAMURAI FLOPS
including Hang Seng Bank as the original AMVIG is engaged in the printing of
-,!" cigarette packages and the manufacturing A ¥38.45bn (US$350m) Samurai loan for
That three-year facility offered top-level OFûTRANSFERûPAPERûANDûLASERûlLMûWHICHûAREû Indian conglomerate RELIANCE INDUSTRIES has
all-in pricing of 610bp, based on an interest the major raw materials for cigarette failed to garner any interest in senior
MARGINûOFûBPûOVERû,IBOR(IBOR packages. syndication amid risk-aversion stemming
The Shanghai-headquartered borrower from the coronavirus pandemic.
has 167 development projects in 31 cities SHENWAN HONGYUAN CLOSES DEBUT LOAN Credit Agricole CIB, Mizuho Bank, MUFG and
across China. SMBC are the mandated lead arrangers and
(ONGû+ONG
LISTEDûlNANCIALûSERVICESûlRMû bookrunners on the loan, which was
SHENWAN HONGYUAN (HK) has closed its debut launched into senior syndication in March
HONG KONG HK$3bn-equivalent (US$385m) one-year OFFERINGûALL
INûPRICINGûOFûABOUTûBPnBP
bridge loan after attracting 11 lenders in The three Japanese megabanks ended up
SINO-OCEAN LAND RAISES US$754m syndication. with ¥10.437bn each, and Credit Agricole
,ENDERSûJOININGûTHEûDEALûHAVEûBEENû CIB with ¥7.141bn.
State-owned real estate company Sino- heavily scaled back as the loan was 4HEûlVE
YEARûFACILITYûISûPARTûOFûAûLARGERû
/CEANû'ROUPû(OLDINGûHASûOBTAINEDûAû oversubscribed and the borrower decided 53BNûDUAL
CURRENCYûlNANCINGûTHATû
US$754m-equivalent four-year term loan not to increase the size. includes a US$1.1bn 3.5-year tranche.
from 14 banks.
Bank of China (Hong Kong), CMB Wing Lung GLOBAL LOANS BOOKRUNNERS – FULLY GLOBAL LOANS BOOKRUNNERS – FULLY
Bank, HSBC, Ping An Bank and Shanghai Pudong SYNDICATED VOLUME SYNDICATED VOLUME (EX US)
Development Bank Hong Kong branch were the BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
mandated lead arrangers. BoC (Hong Kong) Managing No of Total Share Managing No of Total Share
was also the facility agent. bank or group issues US$(m) (%) bank or group issues US$(m) (%)
Bank of East Asia, China Citic Bank 1 BofA Securities 586 153,741.21 8.9 1 BNP Paribas 122 64,380.29 9.1
International, China Guangfa Bank Macau 2 JP Morgan 510 153,177.42 8.9 2 Mizuho 274 58,074.78 8.2
branch, DBS Bank, Fubon Bank (Hong Kong), 3 Citigroup 323 113,983.71 6.6 3 MUFG 427 46,005.27 6.5
Hang Seng Bank and Nanyang Commercial Bank 4 BNP Paribas 220 89,188.65 5.2 4 Sumitomo Mitsui 343 40,198.08 5.7
joined as lead arrangers, while Bank of 5 Wells Fargo 351 82,765.88 4.8 5 Bank of China 186 37,432.77 5.3
Shanghai (Hong Kong) and China Merchants Bank 6 Mizuho 391 81,532.87 4.7 6 Credit Agricole 94 31,974.82 4.5
Hong Kong branch came in as arrangers. 7 MUFG 568 71,110.31 4.1 7 HSBC 106 26,729.84 3.8
The loan, which comprises a US$130m 8 Sumitomo Mitsui 415 53,868.26 3.1 8 Citigroup 62 22,906.80 3.2
tranche and a HK$4.836bn (US$624m) 9 Goldman Sachs 176 44,687.73 2.6 9 Santander 65 21,858.11 3.1
tranche, offers an interest margin of 210bp 10 Barclays 198 43,985.41 2.5 10 JP Morgan 56 20,519.24 2.9
OVERû,IBOR(IBOR Total 3,648 1,725,519.00 Total 2,076 705,896.08
The borrower is SINO-OCEAN LAND (HONG Proportional credit Proportional credit
KONG), a wholly owned subsidiary of the Source: Refinitiv SDC code: R1 Source: Refinitiv SDC code: R4

68 International Financing Review July 4 2020

 LOANS ASIA-PACIFIC

ANZ, Bank of America, Barclays, BNP Paribas, The state-owned company, plagued by the from securing the assets of state-controlled
Citigroup, DBS Bank, First Abu Dhabi Bank, HSBC, softer outlook for commodities, is still in entities or projects.
Scotiabank, Standard Chartered Bank, State Bank discussions with lenders to defer the State-owned PTPN, which regularly taps
of India and United Overseas Bank are the repayment of about US$9.8m. the Indonesian rupiah market, is a producer
-,!"SûONûTHEûDOLLARûPIECEûWHICHûATTRACTEDû
lVEûLENDERSûINûSENIORûSYNDICATION
The US dollar tranche offered all-in pricing of
101.5bp based on an interest margin of 79bp
OVERû,IBORûANDûANûAVERAGEûLIFEûOFûûYEARS
About US$1.1bn of the new loan will
RElNANCEûTWOûEXISTINGûFACILITIESûnûAû53Mû
3.5-year club loan signed in January 2017
and a US$550m syndicated tranche of a
LARGERû53BNûlNANCINGûCOMPLETEDûINû
March that year.
The club loan comes due this month,
while the syndicated facility matured on
April 27. The latter offered a top level all-in
of 106bp based on a margin of 83.5bp over
,IBORûANDûANûAVERAGEûLIFEûOFûûYEARS
Ten banks committed to the club loan,
while a total of 26 lenders participated in
the US$550m syndicated portion of the
March 2017 borrowing.
INDONESIA
The discussions were started in early May
when PTPN sought to obtain consent from
lenders on deferring part of the interest
payment of more than US$3m and the
principal repayment.
However, lenders rejected PTPN’s
PROPOSALûTOûEXTENDûTHEûPRINCIPALûREPAYMENTû
due in June plus US$2m, or 60% of the
interest, due in May, until the end of this
year.
Following the failure to obtain consent
from lenders, the borrower managed to
settle in full the interest payment due in late
May.
Sole mandated lead arranger and
bookrunner Sumitomo Mitsui Banking Corp
sent out the waiver request in late April,
which required consent from all lenders.
The deal, which closed general
syndication in August last year with 17
banks joining, paid top-level all-in pricing of
207bp (offshore) and 227bp (onshore) based
on interest margins of 180bp (offshore) and
of palm, rubber, sugar and related
commodities.
JAPAN
NEXTERA ENERGY UPS SAMURAI LOAN
Florida-based utility NEXTERA ENERGY has
increased its three-year Samurai loan to
¥57.1bn (US$530m) after attracting 20
lenders despite tough market conditions
due to the coronavirus pandemic.
The deal was increased from the original
target of ¥30bn.
Mizuho Bank and MUFG were the original
mandated lead arrangers of the new loan, which
PAYSûANûINTERESTûMARGINûOFûBPûOVERûYENû,IBOR
SMBC joined the leads as mandated lead
arranger and bookrunner.
Joint lead arrangers are Japan Post Bank and
Sumitomo Mitsui Trust Bank. Participants are
NomuraTrust and Banking, 77 Bank, Gunma
PTPN MISSES REPAYMENT
PERKEBUNAN NUSANTARA III has missed a
principal repayment on a US$390.6m two-
year offshore debut loan it raised last year.
BPûONSHORE ûOVERû,IBORûRESPECTIVELYûANDû
an average life of 1.65 years.
The deal is unsecured as all offshore
currency loans to Indonesian state-owned
enterprises are bound by the World Bank
Negative Pledge, which prevents lenders
Bank, San-in Godo Bank, Chugoku Bank, Iyo Bank,
Joyo Bank, Hyakugo Bank, Bank of Iwate,
Development Bank of Japan, Nanto Bank, Oita
Bank, Shiga Bank, Shizuoka Bank, Yamagata
Bank, Bank of Saga, Fukui Bank and Yamanashi
Chuo Bank.

TOTAL NUMBER AND VOLUME OF SIGNED SYNDICATED CREDITS BY COUNTRY

1/1/2020–30/6/2020
No of Volume No of Volume No of Volume
Country issues US$(m) Country issues US$(m) Country issues US$(m)
Saudi Arabia 4 11,964.7 Vietnam 8 1,359.7 Italy 44 22,090.7
United Arab Emirates 10 10,793.0 Nepal 1 889.2 Luxembourg 12 11,347.8
Nigeria 4 3,338.5 Thailand 3 819.2 Denmark 6 10,238.0
South Africa 3 1,964.0 South Korea 4 707.6 Sweden 11 8,107.6
Tanzania 1 1,641.1 Cambodia 3 200.0 Turkey 18 7,752.0
Egypt 3 1,636.1 Bangladesh 3 191.6 Russian Federation 7 6,796.2
Oman 3 1,605.0 Laos 1 179.9 Belgium 6 6,482.9
Qatar 1 1,230.0 Pakistan 1 148.9 Norway 14 4,616.2
Angola 2 1,205.0 Myanmar (Burma) 1 50.0 Ireland 4 3,767.4
Bahrain 2 800.0 Asia-Pacific 1,664 338,977.7 Poland 7 3,045.6
Uganda 2 666.9 USA 1,594 1,020,850.0 Czech Republic 3 2,133.9
Ghana 2 276.3 Canada 208 76,945.4 Iceland 2 1,389.7
Ivory Coast 1 163.7 Mexico 8 2,258.8 Finland 3 1,265.0
Burkina Faso 1 111.4 Brazil 3 1,555.0 Hungary 2 1,261.1
Africa/Middle East 39 37,395.7 Bermuda 3 1,050.0 Austria 3 1,052.0
Japan 1,006 130,242.9 Colombia 2 771.0 Kazakhstan 1 1,000.0
China 229 54,088.5 Peru 4 687.1 Monaco 1 555.9
Australia 88 45,073.0 Chile 2 625.0 Cyprus 1 508.1
Hong Kong 80 36,301.7 Argentina 1 145.0 Portugal 3 342.5
Taiwan 88 19,947.4 Panama 1 100.0 Romania 1 216.6
India 75 17,857.1 Americas 1,826 1,104,987.3 Greece 1 110.0
Singapore 23 14,519.1 United Kingdom 85 82,280.2 Bulgaria 2 83.5
Indonesia 13 5,007.7 France 91 75,584.1 Europe 543 433,282.1
New Zealand 29 4,787.0 Germany 77 75,569.3 Total 4,072 1,914,642.8
Malaysia 6 2,564.9 Netherlands 22 50,755.5
Source: Refinitiv
Philippines 1 2,126.2 Switzerland 18 30,299.0
Macau 1 1,916.1 Spain 98 24,631.3

International Financing Review July 4 2020 69

 &UNDSûAREûTOûPARTIALLYûRElNANCEûAûcBNû
three-year Samurai loan completed in June
2017, which paid similar pricing.
4HEûBORROWERûISûRATEDû"AA!n!¦û
-OODYS30&ITCH 
NIPPON STEEL FORGES ¥450bn HYBRID REFI
NIPPON STEEL is raising ¥450bn (US$4.19bn)
VIAûAû
YEARûSUBORDINATEDûLOANûTOûRElNANCEû Signing and funding of the above loans
AûSMALLERûHYBRIDûlNANCINGûCOMPLETEDûlVEû
years ago, the Tokyo-listed steelmaker said
in a statement on Thursday.
Bank of Fukuoka, Development Bank of Japan,
Hyakujushi Bank, Mizuho Bank, Nishi-Nippon City
Bank, Resona Bank, Shinsei Bank and Sumitomo
Mitsui Trust Bank joined SMBC on the former
piece, while Mizuho joined the latter
portion.
SMBC is also providing ¥880m and ¥400m
one-year loans as bilaterals, which pay
margins of 30bp over one-month Tibor.
Singapore-headquartered food and agri-
totalling ¥9.28bn are slated for July 9 and
July 13, respectively. Funds are for property
acquisitions.
US dollar tranche due to rising funding costs
as a result of which the deal closed as a
Samurai loan.
SINGAPORE
OLAM SECURES US$375m RCF
business OLAM INTERNATIONAL has secured a
US$375m 364-day revolving credit facility
for its European subsidiary OLAM HOLDINGS.
The deal is split between a ¥300bn Term Separately, SMBC is the arranger of a 4HEûlNANCINGûWHICHûISûGUARANTEEDûBYû
,OANû!ûANDûAûcBNû4ERMû,OANû"ûWHICHû ¥2.55bn 6.5-year loan with a margin of /LAMû)NTERNATIONALûREPLACESûANû2#&ûOFûTHEû
CANûBEûREPAIDûAFTERûlVEûANDûSEVENûYEARSû
respectively.
The interest margins on both tranches
will step up by 25bp after 10 years, and 75bp
after 25 and 27 years respectively, according
MONTHûBILATERALûLOANûWITHûAû lNANCING
to S&P.
Four relationship banks are providing the
loan, which has received 50% equity
treatment from rating agencies.
4HEûSTEELûMAKERûISûRATEDû"AA"""!!¦!û
-OODYS30*#22) 
0ROCEEDSûAREûTOûRElNANCEûAûcBNû
facilities.
year hybrid loan completed in July 2015 and
for operating funds.
TOWA PHARMACEUTICAL has raised a
¥39.9bn loan from Japan Bank for
International Cooperation and commercial
banks to back its acquisition of Spain’s
Pensa Investments.
JBIC is funding ¥17bn, while commercial
52.5bp over three-month Tibor. Mizuho,
Nishi-Nippon City and Resona joined in
syndication.
Meanwhile MUFG is also providing a
cBûSIX
margin of 30bp over one-month Tibor.
Signing and funding of the above two
loans totalling ¥3.7bn are slated for July 29
and July 31, respectively. Funds are for
RElNANCING
The REIT invests solely in logistics
EXISTINGûREVOLVINGûCREDITûFACILITYûFROMûDBS
PHILIPPINES
PETRON DRILLS FOR US$350m REFI
/ILûRElNERûPETRON CORp is reaching out to
relationship banks for a three-year
same size agreed in July 2019.
KfW IPEX-Bank, Erste, Intesa Sanpaolo, ABC
International Bank, Bank of Baroda, SMBC and
AKA Ausfuhrkredit are providing the
KfW IPEX-Bank is facility agent.
KRISENERGY EXTENDS RCF
Cash-strapped upstream oil and gas
COMPANYû+RIS%NERGYûHASûEXTENDEDûANû
Bank BYûSIXûMONTHSûTOû$ECEMBERû
KRISENERGY (ASIA) is the borrower of the
revolver, which was due on June 30. It owes
an outstanding principal payment of around
US$177.3m under the RCF.
Parent company Keppel holds an indirect
interest in the RCF through a bilateral
contract with DBS. The contract has also
banks are providing the remainder. The RElNANCINGûOFûAROUNDû53MûRETURNINGû BEENûEXTENDEDûUNTILûTHEûENDûOFûTHEûYEARûhTOû
details of the lenders are undisclosed. to the loan market for its second borrowing facilitate a consensual restructuring and to
)Nû*ANUARYûTHEû/SAKA
BASEDûGENERICSû this year. support KrisEnergy’s management whilst
drugs maker acquired the generics drugs 4HEûSIZEûOFûTHEûBORROWINGûISûNOTûlRMEDû they discuss and obtain feedback from
division of Spain’s Esteve for €320m. up yet. stakeholders on its debt restructuring plan”,
ANA HOLDINGS has signed a ¥85.6bn aircraft 4HEûRElNANCINGûWHICHûCOULDûBEû Keppel said.
lNANCINGûWITHûAûGUARANTEEûFROMûJBIC. syndicated, needs to be completed this year. 4HEû2#&ûBENElTSûFROMûAûCOMPREHENSIVEû
A total of 31 lenders, including SMBC, are 0ETRONûHASûAû53MûlVE
YEARûTERMûLOANû lRSTûRANKINGûSECURITYûPACKAGEûOVERûTHEû
PROVIDINGûTHEûLOANûTOûBUYûSIXûAIRCRAFTûFROMû due in November. MUFG, CTBC Bank, DBS assets of the KrisEnergy group.
Boeing Co and Airbus SE. Bank, Maybank, Mizuho Bank, Standard In June, KrisEnergy obtained approval
4HEûPRESIDENTûANDû#%/ûOFû!.!û3HINYAû
Katanozaka, said at the annual shareholder
meeting on Monday that the company
raised ¥535bn of funding in the three
months to June and also secured ¥500bn in
committed lines.
In January, the Japanese airline obtained a
Chartered and SMBC were the mandated
lead arrangers and bookrunners of the
facility, which attracted 25 other lenders in
general syndication.
The November 2015 deal paid a top-level
all-in pricing of 211.92bp based on an
INTERESTûMARGINûOFûBPûOVERû,IBORûANDûANû
FROMûTHEû3INGAPOREû(IGHû#OURTûTOûEXTENDûAû
moratorium against legal proceedings to
August 27.
4HEûOILûEXPLORATIONûANDûPRODUCTIONû
company is restructuring debt, including
the revolver from DBS Bank, a S$130m
(US$93m) 4% bond issue due 2022, a S$200m
cBNûAIRCRAFTûlNANCINGûALSOûWITHûAû*")#û average life of 3.25 years. 4% bond issue due 2023 and a S$139.5m
guarantee. In March, Petron signed a ¥15bn zero-coupon note issue due 2024.
53M ûDEBUTûlVE
YEARû3AMURAIûLOANû In April, Singapore-listed conglomerate
CRE LOGISTICS REIT RAISES ¥13bn increasing it from an original US$100m- Keppel agreed to lend US$87m through a
equivalent target. FOUR
YEARûPROJECTûlNANCINGûTOû+RIS%NERGYûFORû
is raising bullet term loans
CRE LOGISTICS REIT Development Bank of Japan came in to the development of an offshore oil and gas
totalling ¥12.98bn. SHAREûTHEû-,!ûTITLEûWITHû-IZUHOû-5&'ûANDû asset in Cambodia.
SMBCûISûTHEûARRANGERûOFûTHEûlNANCINGû SMBC, while Shinsei Bank joined as lead As at December 31 2019, KrisEnergy’s
WHICHûCOMPRISESûAûcBNûSIX
YEARûTERMû arranger. gearing was 140.8% and its total debt was
LOANûANDûAûcMûSIX
MONTHûFACILITYûTHATû The loan was originally available in both 53Mû)TûHASûEXPLORATIONûDEVELOPMENTû
pay interest margins of 50bp over three- US dollars and yen with margins of 110bp and production assets in Bangladesh,
month Tibor and 30bp over one-month OVERû,IBORûANDûBPûOVERûYENû,IBORû Cambodia, Thailand, Indonesia and
Tibor, respectively. respectively. However, no bank joined the Vietnam.

70 International Financing Review July 4 2020


ADQ nears up to US$3bn club loan
„ UAE State-owned holding company likely to secure thin pricing
Abu Dhabi state-owned holding company
ADQ is in the market for a US$2bn-$3bn loan,
which is expected to be provided by a club of
international lenders.
It is ADQ’s first club loan from international
banks and is part of a wider fundraising spree to
shore up liquidity for the business, which owns
some of Abu Dhabi’s most important non-oil
related assets.
The deal is being self-arranged by ADQ
and is expected to involve a group of five or six
banks. The borrower was originally looking for a
five-year tenor but is likely to end up with three
years.
“Five years would be a bit of a stretch, I think
three years is more likely,” one banker said.
Banks are keen to deploy cash into Abu Dhabi,
the largest emirate in the UAE, rated AA by S&P
and Fitch and Aa2 by Moody’s, but pricing is very
VIETNAM
VPBANK FINANCE SEEKS US$200m LOAN
VPBANK FINANCE has launched an up to
US$200m borrowing into general
tight, meaning all but a handful lenders will be
excluded.
“Appetite for an Abu Dhabi deal like this
is not limited to the five or six banks that will
eventually do the deal, but they are the only
ones who can afford to do it. It’s where everyone
wants to be but the borrower has high pricing
expectations,” said a second banker.
Alongside the club loan, ADQ, formerly known
as Abu Dhabi Developmental Holding Company,
has also been raising a number of jumbo
dirham-denominated bilateral loans.
“There are definitely two bilaterals being
discussed and it might end up being three. One
of them is bigger than the club loan,” the second
banker said.
ADQ¸ chaired by Sheikh Tahnoon Bin Zayed
Al Nahyan, is raising cash to shore up funds for
its portfolio companies, the second banker said.
BNP Paribas is the sole mandated lead
arranger and bookrunner on the one-year
borrowing, which is split into a US$50m
facility A that is being syndicated and a
US$50m uncommitted facility B.
Facility A pays an interest margin of
BPûABOVEû,IBOR
LOANS EMEA
They include some of the UAE’s biggest assets,
including Abu Dhabi Securities Exchange, Abu
Dhabi Airports and Senaat, one of the UAE’s
largest industrial investment holding companies.
“They now have quite a few critical
government entities under them. They don’t
need immediate support but I guess having and
keeping liquidity is key for when they might need
it and to help any businesses which might have
suffered due to Covid,” he said.
Cash could also be needed to fund ADQ’s
ongoing acquisition spree. In March it acquired a
50% stake in Abu Dhabi-based agriculture firm
Al Dahra Holding and it is among the bidders for
Jordanian food producer Al Jazeera Agriculture
Company. It is also close to acquiring Jordan’s
Al-Nabil Food Industries, which produces frozen
foods.
Sandrine Bradley
"34$"ûPROVIDEDûAûõMûTRADEûlNANCEû
loan as part of the €90m syndicated facility,
with the rest coming from a group of banks,
including BNP Paribas as lead arranger.
4HEûlNANCINGûWILLûSUPPORTûTHEûCOMPANYSû
working capital needs for operating its new
SUNmOWERûANDûRAPESEEDûCRUSHINGûANDû
syndication, returning to the syndicated Banks joining as mandated lead arrangers EXTRACTIONûPLANTûINû6ARNAûDOUBLINGû/LIVASû
LOANûMARKETSûSIXûMONTHSûAFTERûOBTAININGûAû for US$15m and above earn a top-level all-in production capacity.
same-sized deal.
Credit Suisse and Bank SinoPac are the
mandated lead arrangers and bookrunners
of the new one-year loan, which comes with
AûONE
YEARûEXTENSIONûOPTION
The loan offers an interest margin of
pricing of 270bp via a 20bp participation fee. /LIVAûPARTûOFû"UILDCOMû'ROUPûISûTHEû
,EADûARRANGERSûTAKINGû53MnMû BIGGESTûPRODUCERûANDûTRADERûOFûSUNmOWERûOILû
receive an all-in of 265bp with a 15bp fee, while in Bulgaria.
ARRANGERSûWITHûCOMMITMENTSûOFû53MnMû
earn an all-in of 260bp via a 10bp fee.
Facility B may be available one month NETHERLANDS
BPûOVERû,IBORûANDûHASûANûAVERAGEûLIFEûOFû FROMûTHEûlNALûMATURITYûDATEûOFûFACILITYû!ûIFû
1.408 years. lenders get the necessary internal approvals. SBM NETS US$600m BRIDGE
-,!"SûCOMMITTINGû53MûORûMOREûWILLû The borrower will use the loan for
receive an all-in pricing of 350bp via a WORKINGûCAPITALûANDûCAPITALûEXPENDITURE /ILûANDûGASûSERVICESûlRMûSBM OFFSHORE has
PARTICIPATIONûFEEûOFûBPûWHILEû-,!Sû
JOININGûWITHû53MnMûEARNûANûALL
INû mobile phones, consumer goods and
PRICINGûOFûBPûVIAûAûBPûFEEû,EADû
ARRANGERSûCOMMITTINGû53MnMû
receive an all-in pricing of 337bp via a
87.5bp fee.
Funds are for working capital purposes.
In December, the borrower raised a
US$200m one-year loan. Maybank was the
sole coordinator for that loan, which paid a
top-level all-in pricing of 320bp based on an
Mobile World operates retail stores for CLOSEDûAû53MûBRIDGEûLOANûTOûlNANCEûTHEû
CONSTRUCTIONûOFûAûmOATINGûPRODUCTIONûSTORAGEû
groceries at over 3,000 locations in Vietnam. ANDûOFmOADINGûVESSEL
The bridge loan, which is being
provided by a group of four international
banks, is for a special purpose vehicle
OWNINGû&03/û3EPETIBAûTHATûISûMAJORITYû
EUROPE/MIDDLE owned by SBM (64.5%) together with
EAST/AFRICA Mitsubishi Corp (20%) and Nippon Yusen
Kabushiki Kaisha (15.5%).
4HEûLOANûHASûANûINITIALûMATURITYûOFûSIXû
INTERESTûMARGINûOFûBPûOVERû,IBOR
MOBILE WORLD DIALS FOR US$100m LOAN
Retailer MOBILE WORLD INVESTMENT CORP has
launched part of an offshore borrowing
of up to US$100m into general
syndication.
BULGARIA
OLIVA RAISES US$90m
Vegetable oil producer OLIVA has raised a
€90m syndicated loan from Black Sea Trade
and Development Bank alongside a group of
international commercial banks.
International Financing Review July 4 2020
MONTHSûEXTENDIBLEûBYûSIXûMONTHS
The loan will be drawn in July to fund the
construction of the vessel and will be repaid
ONûTHEûCLOSINGûANDûlRSTûDRAWDOWNûOFûAû
project loan, which is progressing towards
completion.
The bridge has sponsor guarantees, which
will be released on repayment.
71
 Weighted average interest margin on the
and SMBC were mandated lead arrangers on
BRIDGEûLOANûISûINûLINEûWITHûTHEûEXPECTEDû
YEARûEXTENSIONû THATûlNANCINGû
margin of SBM’s US$1bn revolving credit
facility for the second half of 2020.
4HEûlVE
YEARûSUSTAINABILITY
LINKEDû2#&û The margin in the loan is linked to key
was agreed in February 2019 and was the
lRSTûSUSTAINABLEûLOANûINûTHEûOILûANDûGASû
services sector.
SPAIN
EL CORTE INGLES GETS STATE-BACKED LOAN
Privately held department store operator EL
CORTE INGLESûHASûAGREEDûAûõMûlVE
YEARû Svensk Exportkredit as mandated lead
loan backed with a guarantee from state-
owned bank )NSTITUTOûDEû#REDITOû/lCIAL.
4HEûlNANCINGûALLOWSûPARTûOFûAûõBNû
revolving credit facility, which was arranged
in April, to be transferred to the new loan.
Santander, BBVA, CaixaBank, Sabadell,
Bankia, Credit Agricole, Ibercaja, KutxaBank and
Liberbank are providing the loan.
,ENDERSûNOTûPARTICIPATINGûINûTHEûLOANûWILLû
remain in the RCF until maturity in March.
The RCF was placed to ensure liquidity
during the Spanish government’s lockdown
INûITSûlGHTûTOûCONTAINûANDûLIMITûTHEûSPREADûOFû
the coronavirus.
The RCF was provided by Banco
4HEûlNANCINGûWHICHûHASûANûINITIALûTWO
YEARûMATURITYûWITHûAûONE
option, comprises a SKr725m term loan and
a SKr1.2bn revolving credit facility.
headroom of £662m. The company also has
performance indicators with annual targets,
HELPINGû/ATLYûTOûDELIVERûONûITSûCOMMITMENTSû
to growth in the plant-based category, lower
#/ûEMISSIONSûANDûCONTINUINGûTOûCHALLENGEû
to the norms of the traditional food
industry.
Rabobank is sole sustainability coordinator
and bookrunning mandated lead arranger
ONûTHEûlNANCINGûNordea acted as a
coordinator together with BNP Paribas and
crisis, on top of the £100m drawn in March.
arrangers.
/ATLYûWASûFOUNDEDûINûTHEûSû
developing products based on Swedish
RESEARCHûFROMû,UNDû5NIVERSITY
UK
FORWARD STARTS RETURN VIA MEGGITT
Aerospace and defence engineering
company MEGGITT has secured a US$575m
multicurrency forward start facility to
EXTENDûITSû53MûREVOLVINGûCREDITûFACILITYû
when it matures in September 2021.
At the end of May, Meggitt had £1.63bn of
committed facilities in place providing
access to additional liquidity under the Bank
of England’s Covid Corporate Financing
Facility.
HAMMERSON BUILDS AGAIN
Retail real estate investment trust
HAMMERSON has drawn a further £300m of its
£1.2bn revolving credit facilities to improve
its cash position during the coronavirus
Hammerson has also received approval to
issue up to £300m of commercial paper
under the Bank of England’s Covid
Corporate Financing Facility, bringing the
company’s potential liquidity to £1.5bn.
The company has amended an
unencumbered asset ratio covenant on its
£689m private placement notes to increase
headroom.
The covenant of minimum
unencumbered assets of 150% of net
UNSECUREDûBORROWINGûHASûBEENûRELAXEDûTOû
ûFORûTHEûNEXTûTHREEûTESTûPERIODSûINû*UNEû
2020, December 2020 and June 2021, rising
TOûûATûAûNEWûTESTûDATEûINû/CTOBERû
3ANTANDERû""6!û#AIXA"ANKû3ABADELLû The FSF, which was signed in May has a The ratio was 189% at the end of 2019.
Bankia, BNP Paribas, Credit Agricole, Societe one-year maturity to September 2022. A temporary covenant has been added,
'ENERALEû'OLDMANû3ACHSû+UTXA"ANKû A substantial uptick in loan pricing and requiring Hammerson to maintain at least
#OMMERZBANKû)BERCAJAû,IBERBANKûANDû the lack of available longer-term loan £100m of 12-month forward liquidity.
Confederacion Espanola de Cajas de lNANCINGûDUEûTOûTHEû#OVID
ûPANDEMICû As part of the amendment, if Hammerson
Ahorros. may see FSFs become more frequent as makes disposals or raises capital of more
borrowers will want to secure future than £50m it will offer to pre-pay at par for
LIQUIDITYûATûAûlXEDûPRICEûANDûEFFECTIVELYû 30% of the proceeds.
SWEDEN ELIMINATEûRElNANCINGûRISK
FSFs were last seen in the aftermath of the ENERGEAN AGREES RBL DEAL
OATLY SIGNS SLL GLOBALûlNANCIALûCRISISûWHENûTHEûCREDITû
crunch meant that many borrowers were Mediterranean-focused oil and gas company
/AT
BASEDûFOODûCOMPANYûOATLY has signed a WORRIEDûTHATûTHEYûWOULDûlNDûITûDIFlCULTûTOû ENERGEANûHASûSIGNEDûAû53MûSIX
YEARû
SKr1.925bn (US$206.5m) sustainability- RElNANCEûATûAFFORDABLEûRATES reserve-based lending facility to replace a
linked club loan. Under an FSF, borrowers put a facility in US$255m bridge loan backing its acquisition
place well ahead of the maturity of an of Italy’s Edison E&P.
EMEA LOANS BOOKRUNNERS – FULLY EXISTINGûLOANû4HEû&3&ûBECOMESûAVAILABLEûTOû 4HEû2",ûHASûSEMI
ANNUALû
SYNDICATED VOLUME the borrower on the maturity of the loan, in redeterminations and pays a margin of
BOOKRUNNERS: 1/1/2020–30/6/2020 EFFECTûRElNANCINGûTHEûFACILITY BPûOVERû,IBORûINûTHEûlRSTûTHREEûYEARSûAFTERû
Managing No of Total Share In return for providing the FSF, closing, rising to 575bp thereafter.
bank or group issues US$(m) (%) PARTICIPATINGûLENDERSûBENElTûFROMûTOP
UPû There is an accordion option of up to
1 BNP Paribas 103 61,196.27 17.1 FEESûONûTHEûEXISTINGûFACILITYûUNTILûMATURITYû US$200m, for a total facility limit of up to
2 Credit Agricole 80 28,143.82 7.9 increasing the margin and commitment fee US$420m.
3 Santander 62 21,571.60 6.0 PAYABLEûONûTHEûLOANû/NCEûTHEû&3&ûBECOMESû 4HEû2",ûISûPROVIDEDûBYûING, Natixis and
4 HSBC 60 19,099.45 5.3 AVAILABLEûLENDERSûBENElTûFROMûHIGHERû Deutsche Bank as mandated lead arrangers.
5 JP Morgan 42 18,226.11 5.1 margins on the new facility. ING is also facility agent, documentation
6 SG 50 17,907.03 5.0 4HEû&3&ûREMOVESûRElNANCINGûRISKûFORû BANKûANDûTECHNICALûBANKûWHILEû.ATIXISûISû
7 UniCredit 68 16,996.44 4.8 borrowers, providing certainty over pricing. technical bank and modelling bank.
8 Citigroup 38 16,994.04 4.8 -EGGITTûSECUREDûAû53MûlVE
YEARû2#&û Deutsche is account bank.
9 Deutsche Bank 45 16,231.71 4.5 in September 2014. The facility was Energean has also agreed a £80m
10 Natixis 31 9,917.13 2.8 EXTENDEDûBYûONEûYEARûINûûANDûûANDû standalone bilateral letter of credit facility
Total 387 357,480.05 was reduced to US$750m in 2017. from ING. The facility will be used to issue
Proportional credit Bank of America, Bank of China, Barclays, letters of credit for UK decommissioning
Source: Refinitiv SDC code: R17 BNP Paribas, CIC, HSBC, JP Morgan, MUFG obligations and obligations under the UK

72 International Financing Review July 4 2020


Issuance plummets as market takes
stock of new normal
„ US Investors flock to quality as defaults rocket
Issuance across the US syndicated loan market
plummeted in the second quarter as the asset
class navigated a slow recovery from the
coronavirus that left borrowers scrambling
for cash to keep their businesses alive while
economies around the world gradually reopen.
Companies from beleaguered sectors, including
UNITED AIRLINES and cruise operator CARNIVAL,
collectively raised billions of US dollars in new,
costly loans to bolster liquidity amid a pandemic
that forced many consumers to shelter at home
throughout most of the second quarter.
Investors, concerned about defaults and
downgrades, flocked to quality, preferring deals for
companies with higher credit ratings and strong
collateral packages. The wary buyside limited
its exposure to low, Single B rated loans that are
subject to fall to Triple C, which is just above default.
Default volume for US leveraged loans
through mid-June totalled US$36.9bn, including
US$14.6bn in May, which was the most defaults
in a month since April 2014, according to Fitch.
“The loan market is healing and getting back
to more normal terms,” said Michael Marzouk,
managing director for bank loan strategies at
Pacific Asset Management. “Loan volumes are
lower, but the secondary market has tightened and
there is much more fluidity in the asset class.”
The Refinitiv LPC 100, a cohort of the 100
most liquid US leveraged loans, recovered to
93.1 cents on the dollar on June 29, from a nadir
of 77.87 cents on March 23.
REACHING HIGHER
Leveraged loan issuance was roughly
US$113.8bn for the second quarter, a sharp drop
from the US$271.5bn raised in the first quarter.
licences but does not affect the availability
Of the second-quarter figure, only US$11.4bn
of the loans carried a Single B rating,
underscoring investor reluctance to commit to
borrowers exposed to potential downgrades to
Triple C. In the first quarter, US$94.7bn of loan
issuance was Single B.
CLOs, the single-largest buyer of new
leveraged loans, can only hold a certain portion
of Triple C facilities before triggering tests within
the fund. Investing in higher-rated loans allows
CLOs to improve the average rating of their
portfolios.
“Some of these downgrades happened amid
market uncertainty,” said Lauren Basmadjian, a
senior portfolio manager at The Carlyle Group.
“And Covid-19 was the straw that broke the
camel’s back for companies that had already
been struggling.”
UNCERTAIN FUTURE
Investment-grade and leveraged M&A financing
fell to US$52.4bn in the second quarter from
US$79.3bn in the first.
The dip in M&A comes as market players
struggle to evaluate risk in a global economy still
grappling with the consequences of the economic
slowdown brought on by the pandemic.
However, bond-buying intervention from the
US Federal Reserve has buoyed credit markets.
Bankers leveraged that momentum in the
second quarter to syndicate bonds and loans for
M&A deals that were underwritten before the
pandemic halted new issuance, leaving banks
stuck holding onto the debt.
In June, technology services provider
TECH DATA raised roughly US$2bn in loans
to fund its buyout by private equity firm
to Neptune Energy Group for up to
LOANS EMEA
Apollo Global Management. Casino operator
CAESARS ENTERTAINMENT raised US$1.8bn
in loans that backed its acquisition by peer
Eldorado Resorts and German conglomerate
THYSSENKRUPP‘s elevator unit finalised
roughly US$4bn in loans to back its buyout
by a consortium led by Advent International
and Cinven.
COSTLY EXERCISE
In order to offload these loans, underwriters
sold the debt with steeper original issue
discounts and juicier coupons. The average
three-year yield on first-lien loans widened
to 7.55% in the second quarter from 5.04%
in the first three months of the year. And
throughout June, the average discount for
new first-lien leveraged loans was 97.1 cents,
compared with 99.7 cents for loans issued in
February.
In particular, a US$537m loan supporting
energy business APERGY‘s tie-up with Ecolab’s
upstream business cleared at a discount of
94.5 cents on the dollar in early June. Just days
later, entertainment technology firm XPERI‘s
US$1.05bn loan supporting its merger with
TiVo was offloaded at a discount of 90.5 cents
as sceptical investors pushed back on new
money transactions amid heightened economic
uncertainty.
“We’re hopeful of moving beyond the
crisis, but each day the headlines change
and prognostications about a recovery or a
second lockdown create uncertainty for the
marketplace,” said a senior banker.
(Additional reporting by Daniela Guzman)
Aaron Weinman
Revised cash payable at completion of
OFûTHEû2",
The bridge loan, which was put in place in
July 2019 via underwriters ING and Morgan
Stanley, originally totalled US$600m but was
REDUCEDûINû-AYûTOûMATCHûTHEûAPPROXIMATEû
SIZEûOFûTHEû2",ûAFTERûSOMEûMAJORûCHANGESûTOû
the acquisition.
Algerian and Norwegian assets, originally
included in the acquisition, will now be
US$280m, however Neptune withdrew from
the acquisition in May as markets were hit
by oil price volatility and the impact of the
Covid-19 crisis.
The UK assets will now be retained by
Energean.
As a result of the adjustments, the
purchase price has reduced to US$284m
from an original enterprise value of
THATûACQUISITIONûISûEXPECTEDûTOûBEûMû
down from an initial US$625m.
B&M LAUNCHES REFINANCING
Discount store operator B&M EUROPEAN VALUE
RETAILûHASûLAUNCHEDûAûRElNANCINGûOFûITSûLOANSû
and bonds.
4HEûRElNANCINGûINCLUDESûAûaMûSENIORû
EXCLUDEDûREDUCINGûTHEûACQUISITIONûPRICEûBYû US$750m. secured bond due 2025, a new £300m term
US$355m. The revised price shows how the collapse loan A and a £155m revolving credit facility.
The purchase price will be reduced by a of crude prices is forcing sellers of oil and Proceeds from the bond and term loan A
FURTHERû53MûREmECTINGûTHEûCHANGESûINû gas asset to compromise on deals. as well as cash on hand will be used to
the macro environment since July 2019. ,ASTûMONTHû5+ûOILûMAJORû"0ûAGREEDûTOû RElNANCEûALLûOFû"-SûSENIORûLOANSûANDû
)Nû/CTOBERûû%NERGEANûAGREEDûTOûSELLû discount the price of the North Sea assets it repay in full its £250m 4.125% senior
Edison E&P’s UK and Norwegian subsidiaries ISûSELLINGûTOû0REMIERû/IL secured bonds due in 2022.

International Financing Review July 4 2020 73

 B&M’s loans comprised a £300m term 4HEûAMENDMENTûADDSûAûBPû,IBORûmOORû
loan and a £150m RCF, which were put in to all the loans.
place in January 2021. Both facilities were NORTH AMERICA It also adds a minimum liquidity
set to mature in August 2021. requirement of US$300m at the end of each
"OOKRUNNERSûONûTHATûlNANCINGûWEREû"ANKû month until the end of the covenant relief
of America and HSBC with Barclays, BNP UNITED STATES period.
Paribas, Commerzbank, and Goldman Sachs
as mandated lead arrangers.
WELCOME BREAK TOPS UP LIQUIDITY
Motorway services area operator WELCOME
BREAK has secured access to additional credit
facilities, increasing its liquidity during the
coronavirus crisis.
The company has repurposed £25m of a
DEDICATEDûWORKINGûCAPITALûEXPENDITUREû
facility into a revolving credit facility, which
is available to draw down for any purpose.
,ENDERSûHAVEûALSOûAGREEDûTOûRELAXûORûWAIVEû
covenant conditions for tests up to and
HOST HOTELS AMENDS US$2.5bn LOANS
Real estate investment trust HOST HOTELS,
which has hotel properties from brands
including Hyatt and Marriott in its portfolio,
has amended its US$2.5bn credit agreement.
Bank of America is the administrative agent
FORûTHEûlNANCINGûJP Morgan and Wells Fargo
are co-syndication agents.
The credit agreement comprises a
US$1.5bn revolving credit facility and a
US$500m term loan, both scheduled to
mature on January 11 2024, and a US$500m
term loan that matures on January 9 2025.
/Nû*UNEûûTHEûCOMPANYûREPAIDû
APPROXIMATELYû53MûOFûBORROWINGSû
under the RCF.
The company is rated BBB- by S&P and
BBB- by Fitch.
DGO COMPLETES REDETERMINATION
DIVERSIFIED GAS & OIL has completed its semi-
annual redetermination of its US$1.5bn
senior secured revolving credit facility
REAFlRMINGûTHEûEXISTINGû53Mû
borrowing base.
The RCF matures in July 2023 and pays an
initial margin of 275bp over one-month
including June 2021. The agreement was signed on August 1 ,IBORûSUBSEQUENTLYûRANGINGûFROMûBPûTOû
In May, Welcome Break’s owner, Irish 2019. 325bp depending on utilisation.
petrol forecourt retailer Applegreen, tapped The amendment suspends requirements $'/ûDIVERSIlEDûITSûDEBTûCAPITALûSTRUCTUREû
€52.5m of an accordion facility on its bank TOûCOMPLYûWITHûlNANCIALûCOVENANTSûFROMû in November through a US$200m
loans to secure its liquidity during the crisis. *ULYûûUNTILûTHEûREQUIREDûlNANCIALûSTATEMENTû SECURITISATIONûlNANCINGûREDUCINGûTHEû
Applegreen’s lenders also agreed to reporting date for the third quarter of 2021. borrowing base on the RCF to US$650m.
SUBSTANTIALLYûRELAXûORûREMOVEûCOVENANTû Financial covenants will be reinstated for "YûINCLUDINGûAûPORTIONûOFûlXED
TERMû
conditions for quarterly tests up to and
including June 2021.
Welcome Break completed a £370m
SEVEN
YEARûRElNANCINGûOFûITSûDEBTûINû/CTOBERû
the quarter ending September 30 2021, lNANCINGûINûITSûCAPITALûSTRUCTUREû$'/ûWASû
although instead of using the results from ABLEûTOûREDUCEûITSûEXPOSUREûTOûREDUCTIONSûINû
the prior four quarters, only results for the borrowing base levels on redetermination.
second quarter of 2021 and thereafter will )Nû!PRILû$'/ûCOMPLETEDûAûSECONDû
via AIB, Santander, Bank of Ireland, CIBC, be used for calculations. 53MûSECURITISEDûlNANCINGûFURTHERû
#REDITû!GRICOLEû,LOYDSûANDû3COTIABANK
Building products maker FORTERRA has
RElNANCEDûITSû2#&ûTHROUGHûANûAMENDMENTû
and restatement, increasing the facility by
£20m to £170m.
4HEûAMENDEDûlNANCINGûISûCONDITIONALûONû
a £55m equity placing, which was
completed on Wednesday.
Under the amendment, the RCF has been
EXTENDEDûBYûTWOûYEARSûTOû*ULYûûANDû
4HEûMAXIMUMûLEVERAGEûRATIOûFORûTHEû
initial three quarters after reinstatement of
lNANCIALûCOVENANTSûHASûBEENûINCREASEDûTOû
ûTIMESûFROMûûTIMESûFORûTHEûlRSTû
quarter, 8 times for the second quarter and
7.75 times for the third quarter.
The amendment increases the interest
rate applicable to outstanding borrowings
during the covenant relief period by 40bp.
The interest rate, based on the company’s
reducing the borrowing base on the RCF to
US$425m.
The bank syndicate on the RCF is led
by KeyBanc and includes BBVA, Branch
Banking & Trust, Citizens Bank, DNB Bank,
Huntington Bank, Royal Bank of Canada,
CIBC, ING, US Bank, CIT Bank, Credit
Agricole, First Tennessee Bank and IberiaBank
as well as Credit Suisse, Goldman Sachs and
Morgan Stanley.
COVENANTSûHAVEûBEENûRELAXEDû#OVENANTSû RATINGSûINCREASEDûTOûBPûOVERû,IBORûFORû $'/ûISûAû53
BASEDûINDEPENDENTûGASûANDû
include a temporary minimum liquidity THEû2#&ûANDûBPûOVERû,IBORûFORûTHEûTERMû oil producer focused on the Appalachian
test, interest cover and leverage. loans. Basin.
An additional covenant says Forterra can
declare a dividend if leverage is equal to or US AND CANADA LOANS BOOKRUNNERS – AMERICAS LOANS BOOKRUNNERS – FULLY
less than 3.0 times and is projected to FULLY SYNDICATED VOLUME SYNDICATED VOLUME
remain so. BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
HSBC, NatWest, Santander and Bank of Managing No of Total Share Managing No of Total Share
Ireland are providing the facility. Royal Bank bank or group issues US$(m) (%) bank or group issues US$(m) (%)
of Scotland is facility agent. 1 BofA Securities 554 144,575.73 13.2 1 BofA Securities 556 144,740.73 13.1
Forterra fully drew its £150m RCF in 2 JP Morgan 466 134,021.11 12.2 2 JP Morgan 471 134,643.29 12.2
March in response to the coronavirus crisis. 3 Citigroup 272 92,245.75 8.4 3 Citigroup 273 92,445.75 8.4
In addition, the company can access up 4 Wells Fargo 348 82,116.18 7.5 4 Wells Fargo 348 82,116.18 7.4
to £175m of the Bank of England’s Covid 5 Barclays 166 37,398.51 3.4 5 Barclays 166 37,398.51 3.4
Corporate Financing Facility, although it 6 Goldman Sachs 154 36,829.32 3.4 6 Goldman Sachs 155 36,914.32 3.3
has no current intention to draw on the 7 Morgan Stanley 87 33,758.12 3.1 7 Morgan Stanley 88 33,843.12 3.1
facility. 8 RBC 153 32,367.60 3.0 8 RBC 153 32,367.60 2.9
The company is now looking to raise 9 Credit Suisse 102 30,737.78 2.8 9 Credit Suisse 103 30,804.45 2.8
equity to support its investment 10 US Bancorp 190 28,139.33 2.6 10 US Bancorp 190 28,139.33 2.6
programme, including the completion of a Total 1,793 1,096,568.36 Total 1,813 1,102,578.32
new brick factory at Desford in Proportional credit Proportional credit
,EICESTERSHIRE Source: Refinitiv SDC code: R9 Source: Refinitiv SDC code: R7

74 International Financing Review July 4 2020


ONEOK AMENDS US$2.5bn RCF
Natural gas midstream services provider
ONEOK has amended its US$2.5bn revolving
credit facility via administrative agent
Citigroup.
It provides military transportation and
hauling services to the government and
provides 68% of less-than-truckload services
to the US Department of Defense.
The loan will be disbursed in two
US$350m tranches.
LOANS LEVERAGED LOANS
contracts, and when possible, to begin
writing contracts using Sofr instead of USD
,IBORv
In “hardwired” language, the steps to
MOVEûAWAYûFROMû,IBORûANDûTOûAûNEWû
benchmark are predetermined in the
The credit agreement requires the
company to maintain a leverage ratio of no
more than 5 times at the end of each
quarter.
4HEûAMENDMENTûMODIlESûTHEûLEVERAGEû
ratio so the company can net up to
4RANCHEû!ûWILLûPAYûBPûOVERû,IBORû
which comprises 200bp through a payment-
in-kind structure and 150bp in cash.
That portion of the loan will cover short-
term contractual obligations, as well as
pension and healthcare payments.
document. Most loan documents currently
include an “amendment” approach, which
OFFERSûMOREûmEXIBILITYûTOûNEGOTIATEûAû
benchmark replacement.
ARRC had previously recommend the
HARDWIREDûWATERFALLûlRSTûMOVEûTOûAûTERMû
US$700m in unrestricted cash. 4RANCHEû"ûWILLûALSOûPAYûBPûOVERû,IBORû Sofr rate plus a spread adjustment. If that
The loan is scheduled to mature on June
30 2024.
The company is rated BBB by S&P and
Baa3 by Moody’s.
AVANGRID NETS US$500m
Renewable energy and utility company
AVANGRID signed a US$500m 364-day
revolving credit facility.
Mizuho Bank is the administrative agent.
but all in cash. Proceeds will be invested in
trailers and tractors.
Both tranches will mature on September
30 2024.
4HEû#!2%3ûLOANûISûEXPECTEDûTOûENABLEû92#û
to maintain roughly 30,000 trucking jobs
and support military supply chain
operations.
92#SûEXISTINGûCREDITûFACILITYûISûALSOû
EXPECTEDûTOûBEûAMENDEDûTOûALLOWûFORûTHEû
new loan.
OPTIONûDIDûNOTûEXISTûTHENûTHEûBENCHMARKû
would move to compounded Sofr plus a
spread adjustment. Now, if term Sofr is not
available, the ARRC says the rate would be a
daily simple Sofr plus an adjustment.
The ARRC previously said no business
LOANSûUSINGû,IBORûANDûMATURINGûAFTERûû
should be originated as of June 30 2021, and
NOû#,/SûPEGGEDûTOû,IBORûSHOULDûBEûISSUEDû
after September 30 2021. The group says US
DOLLARûCASHû,IBORûPRODUCTSûSHOULDûINCLUDEû
Scotiabank and BBVA are co-syndication )Nû3EPTEMBERûTHEûCOMPANYûRElNANCEDû ARRC-recommended hardwired or similar
agents. debt with a new term loan from funds fallback language by September 30.
The agreement contains certain negative managed by private equity shop Apollo
COVENANTSûINCLUDINGûAûMAXIMUMûALLOWEDû
consolidated debt-to-consolidated total
capitalisation at 0.65 to 1.00.
The company will pay an annual facility
PARTûDEBTûlNANCINGûTHATûWASû
fee ranging from 15bp to 30bp, depending
on the company’s credit ratings.
The company also signed an amendment
TOûANûEXISTINGû53BNûCREDITûFACILITY
Global Management.
That US$600m facility priced at 750bp
OVERû,IBORûANDûMATURESûINû*UNEû
Under the terms of the Apollo-led loan,
YRC has to maintain at least US$200m in
,4-ûADJUSTEDû%BITDA
ARRC UPDATES FALLBACK LANGUAGE
TECH DATA WRAPS US$2.07bn LOAN
Technology services provider TECH DATA
WRAPPEDûAûTWO
increased to US$2.07bn from US$2bn.
4HEûlNANCINGûNOWûCOMPRISESûAû53BNû
asset-based loan, up from US$1.5bn, and a
53MûlRST
INûLAST
OUTû!",ûTHATûWASû
JP Morgan is the administrative agent for
THEûEXISTINGûFACILITYûANDû"ANKûOFû!MERICAûISû
the syndication agent.
As of March 31 2020, the facility fee on
decreased from US$500m.
The Alternative Reference Rates Committee A US$3bn revolving credit facility has
has released updated fallback language for been lowered to US$2.8bn.
leveraged loans to help with the transition 4HEû!",ûPRICEDûATûBPûOVERû,IBORûANDûAû
THEûEXISTINGûCREDITûRANGESûFROMûBPûTOû away from a key lending benchmark. û/)$ûVERSUSûPREVIOUSûGUIDANCEûOFû

17.5bp. The facility is set to mature on June ,IBORûISûSETûTOûBEûPHASEDûOUTûATûTHEûENDûOFû 4HEû&),/û!",ûPRICEDûATûBPûOVERû,IBORû
29 2024. 2021 and the Federal Reserve-backed ARRC WITHûAûû/)$ûHAVINGûLAUNCHEDûATû

!VANGRIDûISûRATEDû"""ûBYû30ûANDû&ITCHû is pushing markets to begin introducing "OTHûTRANCHESûHAVEûlVE
YEARûTENORSûNOû
and Baa1 by Moody’s. fallback language to deal documents to ease
the transition to a new lending benchmark.
The group recommends transitioning to
Sofr.
The group updated language for the so-
LEVERAGED LOANS called “hardwired” fallback option for loans.
It recommends the use of simple daily Sofr
in arrears as the second step of a waterfall of
,IBORûmOORûûSOFTûCALLûPROTECTIONûFORûû
months and will amortise at 1% per year.
Proceeds will support the company’s
ACQUISITIONûBYûPRIVATEûEQUITYûlRMû!POLLOû
Global Management.
Citigroup LEDûTHEû!",ûANDûJP Morgan led on
&),/ûTRANCHEûWells Fargo, Barclays, RBC Capital
Markets, Credit Suisse, MUFG, Mizuho, Goldman
UNITED STATES OPTIONSûTOûMOVEûAWAYûFROMû,IBORûANDû Sachs, Deutsche Bank, BNP Paribas, Nomura and
includes a more permissive early opt-in PNC Bank are also part of the arranging
YRC NETS US$700m FROM TREASURY trigger, which allows parties to switch to an group.
ALTERNATIVEûBEFOREû,IBORûISûOFlCIALLYû Citi is also the administrative agent.
YRC WORLDWIDE will receive US$700m from discontinued. #ORPORATEûRATINGSûAREû"A""""ûTHEû!",û
the US Treasury Department through the “Refreshing this language has been a near- ISûRATEDû"A"""
"""
ûANDûTHEû&),/ûTRANCHEû
government’s Coronavirus Aid, Relief and term priority for the ARRC in 2020, and we are ISûRATEDû"A"""
"""

Economic Security Act. pleased to share these updates, which will 4HEûDEBTûISûSECUREDûBYûAûlRSTûPRIORITYû
)NûEXCHANGEûFORûTHEûLOANûTHEû4REASURYû HELPûREDUCEûTHEûRISKûOFûDISRUPTIONûWHENû,IBORû interest on the company’s receivables and
will receive a 29.6% equity stake in the is no longer available,” Tom Wipf, ARRC chair inventory.
trucking company that will be held in a and vice-chairman of institutional securities at Tech Data must perform regular collateral
voting trust. Morgan Stanley, said. reporting including monthly borrowing
The Treasury said that YRC is critical to “We encourage market participants to BASEûCERTIlCATESûONEûlELDûEXAMINATIONûANDû
maintaining the country’s national security. incorporate this language into new one inventory appraisal per year. This can

International Financing Review July 4 2020 75

 AVI-SPL loan finalised with steepest
discount in four years
„ US Investors balk at LBO loan for Covid-hit audiovisual firm
AVI-SPL needed two tries and the steepest
discount in four years to syndicate a US$370m
leveraged loan to an investor base concerned
about the viability of an audiovisual company
reliant on businesses that are forced to remain
closed during the coronavirus.
A group of arrangers led by Bank of America
was able to sell the loan backing the company’s
buyout by private equity firm Marlin Equity
Partners at a discount of 85.5 cents on the dollar
in late June, four months after its initial attempt.
The sale price was the lowest discount offered
on a leveraged loan since June 2016, when the
loan to back the buyout of software company
Veritas was sold at 85 cents.
The coronavirus has slashed growth
prospects and immediate cashflow generation
for AVI-SPL, which derives a portion of its
revenue through on-site audiovisual services,
according to Moody’s. Certain audio and video
collaboration projects have also been halted
indefinitely, dealing a potential blow to the
company’s second-quarter results as offices
remain largely empty and workers shelter at
home.
spring to two meetings if inventory drops
below a certain level.
In November, Tech Data agreed to be
acquired by Apollo for an enterprise value of
roughly US$6bn.
ANGUS INCREASED, TIGHTENS TERMS
#HEMICALSûlRMûANGUS CHEMICAL CO completed
US companies contemplating a smaller office
space in the aftermath of the pandemic may
also negatively impact AVI-SPL’s vast network of
teleconferencing installation services, the ratings
firm said.
Still, the second half of 2020 may see a
turn in AVI-SPL’s fortunes as offices seek to
reopen, leading Moody’s to hold the company’s
corporate and first-lien loan ratings at B2,
though with negative outlook.
TOUGH SELL
AVI-SPL’s loan was launched into the syndicated
loan market for a second time on June 10, after
the initial attempt was withdrawn in early March
as the pandemic hampered deal sell-downs.
Lenders had until June 24 to commit to
terms of 525bp over Libor and a discount of
94 cents. Investor pushback, however, led
the arranging banks to reoffer the seven-year
loan at the 525bp margin with the wider 85.5
discount.
In February, AVI-SPL shopped the loan at
475bp over Libor and a discount of 99. At the
time, a more borrower-friendly market allowed
0ROCEEDSûFROMûTHEûLOANûWILLûRElNANCEûANû
EXISTINGûFACILITYûMATURINGûINû
In 2017, Angus Chemical repriced its
then €246m term loan to 325bp with a
ûmOOR
0RIVATEûEQUITYûlRMû'OLDENû'ATEû#APITALû
bought Angus Chemical from Dow
Chemicals in 2015 for US$1.215bn.
MATERIAL HANDLING SYSTEMS has increased its
companies to raise cheap new debt and slash
interest rates on loans.
But as coronavirus began to spread and the
scale of the health crisis began to take hold,
investors flocked to less risky assets and some
syndicated loans were withdrawn. Leveraged
loans backing acquisitions, in particular,
struggled to gain traction with a buyside
attempting to assess risk as government-
mandated shelter-in-place restrictions were put
into place.
“It was bad timing. Covid happened and
the deal got pulled the first time around,” said
one investor that looked at the loan. “Then the
company’s bookings for April and May were soft
and this made folks a bit uncomfortable during
the second syndication.”
Bank of America, Barclays, Guggenheim, KKR
Capital Markets and Macquarie arranged the
loan.
Marlin said in April that it had completed the
acquisition and planned to merge AVI-SPL with
Whitlock, another audiovisual services provider
and portfolio company.
Aaron Weinman
MITCHELL NEARS US$675m LOAN
Technology and information services
company MITCHELL INTERNATIONAL was
scheduled to close last week a US$675m
incremental term loan that will support its
acquisition of Coventry Workers’ Comp
Services.
4HEûLOANûWASûOFFEREDûATûBPûOVERû,IBORû
Aû53MûTERMûLOANûTHATûWILLûRElNANCEû incremental loan by US$20m to US$145m WITHûAûûmOORûû/)$ûANDûûSOFT
CALLû
EXISTINGûDEBT ANDûlNALISEDûTHEûTERMSûOFûTHEûFACILITY protection for 12 months.
The loan, which was increased from The loan priced in line with guidance at KKR Capital Markets WASûLEADINGûTHEûlRST

53MûWASûPRICEDûATûBPûOVERû,IBOR BPûOVERû,IBORûWITHûAûûmOORûAûû/)$û lien transaction. Jefferies, Morgan Stanley and
%URIBORûWITHûAûû/)$ûVERSUSûBPûANDû
ANû/)$ûOFûnûATûLAUNCH
LIENû
4HEûlVE
YEARûLOANûISûSPLITûBETWEENûAû
US$251m dollar tranche and a €248m
portion. It includes 101 soft-call protection
FORûSIXûMONTHS
LIENûRATINGSûAREû""n inject US$200m in equity to support its
A 25bp margin step-down will be
and 101 hard-call protection for 12
months.
RBC Capital Markets led the deal, which will
MATUREûALONGSIDEûANûEXISTINGûTERMûLOANûDUEû
in May 2024.
#ORPORATEûANDûlRST
In April 2017, the company launched a
SunTrust were joint lead arrangers.
-ITCHELLûISûRATEDû""nûANDûTHEûlRST
loan is rated B2 by Moody’s.
4HEûACQUISITIONûISûWORTHûAPPROXIMATELYû
US$850m. Mitchell International will
purchase.
implemented on both tranches once senior,
secured net debt to Ebitda is at 2.5 times or
less.
Soft-call protection was unchanged at 101
for 12 months, while the US dollar tranche
CAMEûWITHûAûûmOORûANDûTHEûEUROSûHASûNOûmOOR
JP Morgan LEDûTHEûlNANCING
%XISTINGûCORPORATEûRATINGSûAREû""nûANDû
lRST
LIENûRATINGSûAREû""
76
US$240m seven-year term loan that
SUPPORTEDûITSûSALEûTOûPRIVATEûEQUITYûlRMû
4HOMASû(û,EEû0ARTNERS
4HEûLOANûWASûPRICEDûATûBPûOVERû,IBORû
WITHûAûûmOOR
Material Handling Systems provides
parcel sorting systems for logistics and
e-commerce companies, including UPS,
&ED%XûANDû$(,
International Financing Review July 4 2020
0ROûFORMAûWITHûTHEûPROPOSEDûlNANCINGû
adjusted debt to Ebitda will be 8.0 times,
according to Moody’s.
Coventry was under-invested by its
previous owner CVS Health and has
EXPERIENCEDûREVENUEûDECLINESûOVERûTHEûLASTû
few years, Moody’s said.
Mitchell is a portfolio company of private
EQUITYûlRMû3TONEû0OINTû#APITAL

Coventry provides care and cost
LIENûLOANûISû
management programmes for workers’
compensation and auto insurance carriers,
third-party administrators and self-insured
employers.
In November 2017, Mitchell International
RAISEDûAû53MûlRST
LIENûSEVEN
LOANS LEVERAGED LOANS
MASMOVIL UPS LBO LOAN TO €2bn 3TARTINGûLEVERAGEûONûTHEûlRST
4.9 times and the equity cushion makes
Spanish telecoms company MASMOVIL has up around 50% of the capital structure.
increased a buyout loan by €500m to €2bn, Societe Generale, BNP Paribas, ING and
after a positive response from investors. Natixis are joint physical bookrunner,
The seven-year term loan B priced at alongside Bank of Ireland and RBC as joint
YEARûTERMû BPûOVERû%URIBORûTHEûTIGHTûENDûOFûBPn bookrunners.
loan, a US$75m delayed-draw loan and a BPûGUIDANCEûWITHûAûûmOORû!Nû/)$ûWASû Ardian announced in December 2019
US$450m second-lien loan to fund a unchanged at 98. that it agreed to buy Cerelia from IK
SHAREHOLDERûDIVIDENDûANDûRElNANCEûDEBT 4HEûCORPORATEûRATINGSûAREû"""ûWHILEû Investment Partners.
ISSUEûRATINGSûAREû"""" Cerelia raised €300m of senior debt to
0ROCEEDSûWILLûBEûUSEDûTOûFUNDûTHEûlRMSû back an acquisition of North American
EUROPE/MIDDLE EAST/ ACQUISITIONûBYûPRIVATEûEQUITYûlRMSû++2û cookie specialist English Bay Batter in
AFRICA #INVENûANDû0ROVIDENCEûRElNANCEûEXISTINGû û!TûTHEûSAMEûTIMEûITûRElNANCEDûITSû
DEBTûANDûTRANSACTIONûEXPENSESû)TûWILLûALSOûBEû EXISTINGûDEBTû4HATûLOANûWASûPROVIDEDûBYû
BASF UNIT SEEKS €850m LBO LOAN used for working capital and general Bank of Ireland, BNP Paribas, Credit
corporate purposes. -UTUELû#)#û#REDITû!GRICOLEû).'û.ATIXISû
BASF‘s construction chemicals business is Barclays, BNP Paribas, Morgan Stanley and and Societe Generale.
RAISINGûAûõMûBUYOUTûlNANCINGûTOûBACKû Deutsche Bank were joint global coordinators,
ITSûACQUISITIONûBYûPRIVATEûEQUITYûlRMû,ONEû while Credit Agricole, Mizuho and Santander KANTAR UPS ADD-ON
Star. were bookrunners.
4HEûlNANCINGûCOMPRISESûAûõMûSEVEN
KKR, Cinven and Providence said on June Data provider KANTAR has increased the
YEARû4ERMû,OANû"ûANDûAûõMû
YEARû 1 they agreed a bid for MasMovil, equating size of an add-on loan to €155m from
revolving credit facility. to €22.50 per share. It gives the company an €135m following strong investor demand.
The term loan is guided at 500bp over enterprise value of around €6bn and is the The loan will be used to repay a portion
%URIBORûWITHûAûûmOORûANDûAûû/)$û lRSTû%UROPEANûTAKE
PRIVATEûATTEMPTûBYû of drawn revolving credit facility, and will
A €775m-equivalent seven-year dollar- MAJORûBUYOUTûlRMSûSINCEûTHEûCORONAVIRUSû pay 500bp over Euribor, the same as an
DENOMINATEDû4,"ûWHICHûWILLûALSOûBEûUSEDûTOû pandemic put Europe in lockdown. EXISTINGûEUROûTERMûLOAN
support the buyout, has been preplaced
ahead of the syndication. GSO has taken the
û/)$ûGUIDANCE
loan, sources said in December.
The term loans both have 101 call
PROTECTIONûFORûSIXûMONTHSû
Financial covenant applies to RCF.
Deutsche Bank is physical bookrunner. UBS,
UniCredit, Banca IMI, Barclays, JP Morgan and
SMBC are passive bookrunners.
CURRENCYû
,ONEû3TARûAGREEDûTOûBUYûTHEûUNITûFROMû
BASF in December 2019, as the German
chemicals company seeks to focus on more
YEARû
MasMovil last tapped the loan market in )TûPRICEDûATûû/)$ûTHEûWIDERûENDûOFû
November 2019 when it repriced a €1.45bn 
term loan at 262.5bp over Euribor. The add-on will be fungible with the
EUROûTERMûLOANûONûTHEûNEXTûINTERESTû
CERELIA DETAILS LBO LOAN payment date.
Goldman Sachs and Morgan Stanley were
CERELIA, a French company that makes pizza bookrunners.
dough and cookies, has detailed a Kantar last tapped the loan market in
€520m-equivalent loan to back its /CTOBERûWHENûITûRAISEDûAûDUAL
ACQUISITIONûBYûPRIVATEûEQUITYûlRMû!RDIAN loan to back its acquisition by Bain
A €382.5m seven-year covenant-lite Term Capital.
,OANû"ûISûGUIDEDûATûBPnBPûOVERû 4HATûLOANûCOMPRISEDûAû53MûlVE
PROlTABLEûOPERATIONSû4HEûTRANSACTIONûISû %URIBORûWITHûAûû/)$û TERMûLOANû!ûPRICEDûATûBPûOVERû,IBORûWITHû
EXPECTEDûTOûCLOSEûINûTHEûTHIRDûQUARTERûOFû A €37.5m-equivalent dollar-denominated AûûmOORûATûû/)$ûAû53MûSEVEN

2020. tranche, which will be also used to support YEARûTERMûLOANû"ûPAYINGûBPûOVERû,IBORû
The construction chemicals unit has the buyout, was preplaced ahead of the WITHûAûûmOORûATûû/)$ûANDûAûõMû
PRODUCTIONûSITESûANDûSALESûOFlCESûINûMOREû syndication. seven-year term loan B paying 500bp over
than 60 countries and has more than 7,000 4HEûlNANCINGûALSOûINCLUDESûAûõMû %URIBORûWITHûAûûmOORûATûû/)$
employees. revolving credit facility.
EMEA SPONSORED LOANS
US LEVERAGED LOANS EUROPEAN LEVERAGED LOANS BOOKRUNNERS: 1/1/2020–30/6/2020
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020 Europe, Middle East, Africa
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 BofA Securities 310 50,624.00 11.6 1 HSBC 19 5,161.57 7.4 1 HSBC 10 2,557.16 6.9
2 JP Morgan 229 38,285.31 8.8 2 BNP Paribas 28 5,027.53 7.2 2 BNP Paribas 13 2,297.64 6.2
3 Wells Fargo 184 35,722.31 8.2 3 JP Morgan 25 4,590.85 6.5 3 JP Morgan 13 2,226.55 6.0
4 Citigroup 121 27,360.09 6.3 4 Goldman Sachs 20 4,570.18 6.5 4 Morgan Stanley 9 2,073.63 5.6
5 Credit Suisse 87 24,563.65 5.6 5 Credit Agricole 22 4,493.48 6.4 5 Deutsche Bank 13 2,041.11 5.5
6 Goldman Sachs 120 23,860.46 5.5 6 Barclays 19 4,177.21 6.0 6 SG 7 2,007.09 5.4
7 Barclays 111 22,012.98 5.0 7 Deutsche Bank 22 3,741.68 5.3 7 Credit Agricole 12 1,866.30 5.1
8 Morgan Stanley 66 17,798.27 4.1 8 Citigroup 11 3,446.14 4.9 8 UniCredit 8 1,758.86 4.8
9 RBC 72 14,514.55 3.3 9 Natixis 8 3,018.13 4.3 9 Barclays 11 1,722.40 4.7
10 Deutsche Bank 76 13,330.81 3.0 10 UniCredit 14 2,950.48 4.2 10 BofA Securities 8 1,700.42 4.6
Total 872 437,216.56 Total 108 70,131.94 Total 57 36,869.03
Excluding Project Finance. Excluding project finance. Western Europe only included. Excluding project finance.
Source: Refinitiv SDC code: P2 Source: Refinitiv SDC code: P10 Source: Refinitiv SDC code: P13

International Financing Review July 4 2020 77

 Direct lenders turn on firepower amid Covid jitters
„ MIDDLE MARKET Opportunity arises for private debt funds to pick up larger borrowers
Direct lenders are turning on their firepower
to provide financing for European companies,
taking advantage of jitters in the leveraged
finance market caused by the coronavirus.
Despite the loan and high-yield markets
gradually reopening, with the launch of a couple
of jumbo buyout financings for THYSSENKRUPP
ELEVATOR and Spanish telecoms company
MASMOVIL, markets have not fully recovered to
syndicate deals with competitive terms seen
before the pandemic.
As such, it has created a great opportunity for
private debt funds to pick up larger borrowers
that are in need of liquidity to keep business
afloat.
“Clearly, it’s an unprecedented opportunity
for direct lenders to further disintermediate the
investment banks and entrench themselves
as an alternative option for larger transactions
now, as the bond and loan markets are still in
recovery,” said Floris Hovingh, partner and head
of alternative capital solutions at Deloitte.
Bankers said direct lenders are increasingly
looking into larger borrowers in the term
loan B market, rather than just focusing on
€150m-€300m debt deals in the middle market.
“There’s no doubt we have seen them sniffing
around,” said a syndicated loan banker. “When
the pricing level of the syndicated loan market
was at 350bp-400bp at the beginning of the
year, direct lenders were struggling to find
Bain Capital acquired a 60% stake in
Kantar from advertising and public relations
company WPP. The transaction valued
Kantar at an enterprise value of roughly
US$4bn.
In May, Moody’s changed the
YEARûBULLETûTRANCHEûBACKINGûBGH
company’s outlook to negative from
assets. But because the market now has moved
towards close to 500bp, they find it a way more
interesting pricing point.”
CERTAINTY AND SPEED
The key advantage for direct lenders in the crisis
is the ability to provide much-needed certainty
to borrowers.
“The Covid environment is acting as an
accelerant for private credit growth. One of
the great attributes of this market is we offer
certainty in terms and our financings are not
contingent on the ratings agencies, which are
now quite hawkish,” said Craig Packer, co-
founder of Owl Rock Capital Partners.
Owl Rock was one of the debt funds to join
Ares Management providing a £1.875bn loan
financing to the UK’s biggest independent
insurance broker, THE ARDONAGH GROUP.
The largest-ever unitranche deal, announced
on June 22, highlighted the depth of liquidity
available from direct lenders.
MV Credit, which recently provided a loan
facility for a private equity-backed company
to refinance a bond, is also one of the funds to
seize the market opportunity.
“We were familiar with both the credit and the
sponsor, which meant we could execute the deal
very quickly after the opportunity was presented
to us,” said Nicole Downer, managing partner at
MV Credit.
h4HISûNEWûmEXIBILITYûINûOURûDEBTû
covenants, along with a strong
balance sheet and ample liquidity,
will enable us to weather this
DIFlCULTûTIMEûANDûWEûAREûEXCITEDûTOû
start the season in Austria on July
3-5,” said Chase Carey, chairman and
“Previously the bond markets had provided
terms and documentation that we weren’t able
to do. Those markets aren’t really open for
business at the moment.”
DEEP POCKETS
Fundraising in the private debt market has been
booming over last few years, leaving them to sit
on a record-high amount of dry powder.
According to research company Preqin,
direct lending funds focused on Europe
raised US$32.9bn in 2019, 29% higher
than 2018, and the market has US$53.3bn
capital available for investment as of June
2020.
That has allowed direct lenders to place a
bigger ticket in deals to compete with banks.
“When direct lenders are able to raise larger
funds, it naturally follows to deploy a larger
amount of capital in a larger ticket,” said Faisal
Ramzan, partner at Proskauer Rose.
In the near term, as the coronavirus pandemic
continues to weigh on the global economy,
bankers believe the continued volatility in the
leveraged markets will continue to benefit the
direct lenders.
“I don’t think pricing in the syndicated market
will go ever back to the level that will make
private lenders completely uncompetitive,” said
the syndicated loan head.
Prudence Ho, David Brooke
ASIA-PACIFIC
PRICE TALK OUT FOR HEALIUS LBO LOAN
!ûlVE
CAPITAL‘s proposed leveraged buyout of
STABLEûCITINGûSIGNIlCANTûPRESSURESûFROMû #%/ûOFû&ORMULAû Healius’s medical centres business is
the global outbreak of coronavirus on The covenant will be replaced with a offering an opening interest margin of
+ANTARSûREVENUEûANDûPROlTABILITYûBUTûTHEû minimum liquidity test of US$200m during around 450bp over BBSY for an opening
RATINGSûAGENCYûAFlRMEDûITSûCORPORATEû the waiver period. There are restrictions on leverage of about 4.25 times.
rating at B2.
F1 GETS GREEN LIGHT ON LOAN WAIVER
,IBERTYû'LOBALSûMOTORûSPORTûFRANCHISEû
FORMULA 1 has secured a covenant waiver
on US$3.4bn of its loans to give it greater
mEXIBILITYûDURINGûTHEûCORONAVIRUSûCRISISû
dividends, other payments and taking on
additional debt.
Formula 1 can recommence the
requirement to comply with the net
LEVERAGEûlNANCIALûCOVENANTûBEFOREû*ANUARYûû
2022, in which case the additional
conditions will no longer apply.
4HEûMOVEûCOMESûAFTERû&ORMULAû/NEûTEAMû
4HEûLOANûISûPARTûOFûAû!MûlNANCINGû
which Morgan Stanley and Natixis are
partially underwriting.
National Australia Bank, ING Bank, SMBC
and Westpac Banking Corp are also
PROVIDINGûPARTûOFûTHEûlNANCINGûONûAûTAKE
and-hold basis as mandated lead
arrangers.
in preparation for a return to racing on
July 3.
The waiver covers the leverage covenant
ONû&ORMULAûSû53BNûlRSTûLIENûTERMû
LOANûANDû53MûlRSTûLIENûREVOLVINGûCREDITû
facility. The covenant will not be tested until
January 2022.
78
ANDûSUPERCARûMANUFACTURERû-C,ARENûAGREEDû
a £150m loan from National Bank of Bahrain
TOûSHOREûUPûITSûlNANCESûDURINGûTHEû
pandemic.
Bahrain’s sovereign wealth fund
-UMTALAKATû(OLDINGûISû-C,ARENSûMAJORITYû
shareholder.
International Financing Review July 4 2020
/Nû*UNEûû(EALIUSûANNOUNCEDûITûHADû
agreed to sell HEALIUS PRIMARY CARE, which
comprises 69 large medical centres, 13
Health & Co practices and 62 dental clinics,
to BGH-managed funds for an enterprise
value of A$500m on a cash and debt-free
basis.

The sale is subject to approval from the
Foreign Investment Review Board.
Healius will retain Day Hospitals and
IVF, which currently sit within its Medical
Centres division. The company will
LIENûLENDERSûTOû
CONTINUEûTOûOPERATEûITSûEXISTINGûPATHOLOGYû
collection centres and imaging clinics
located within the medical centres under
long-term leases at rents consistent with
current levels.
In March, the company turned down a
A$2.12bn takeover offer from another PE
MISSION GROUP BIDCO is the borrower.
Madison Dearborn is acquiring the
stake in APM, a disability employment
services provider, from Australia’s
Quadrant Private Equity and APM
management for around A$1bn.
,AWûlRMû'ILBERTûû4OBINûISûADVISINGûTHEû
SELLERSûINûTHEûDEALûTHATûWASûEXPECTEDûTOûBEû
completed before the end of June.
APM was founded in Perth in 1994 and
provides employment, outplacement,
training, health and rehabilitation
LOANS RESTRUCTURING
use cash collateral to fund its business
OPERATIONSûAFTERûlLINGûFORû#HAPTERûû
bankruptcy protection.
The company said that it received
PERMISSIONûFROMûITSûlRST
USEûTHEûCASHûCOLLATERALûINûEXCHANGEûFORû
adequate protection to shield against any
potential decline in the value of the
collateral.
The cash collateral, together with cash
generated from operations, will be
SUFlCIENTûTOûFUNDûITSûBANKRUPTCYûPROCESS
lRMû0ARTNERSû'ROUPûSAYINGûITû
undervalued the medical centre operator.
LIENûSUPER
Partners had offered A$3.40 per share
in cash after buying China’s Jangho
services. It operates in 700 locations NPC’s US$903m pre-petition debt
across 10 countries. INCLUDESû53MûUNDERûAûlRST
priority term loan, US$63m under a
CHINA BIOLOGIC LBO LOAN ON HOLD lRST
LIENûREVOLVINGûCREDITûFACILITYû
Group’s 15.9% stake in Healius.
LIENûSECUREDûTERMû
CRESCENT TAPS LOAN FOR PRP BUY
!USTRALIANûPRIVATEûEQUITYûlRMûCRESCENT
CAPITAL PARTNERS is raising debt for its
proposed leveraged buyout of a majority
stake in radiology business PRP DIAGNOSTIC
!û53BNûlNANCINGûBACKINGûTHEû
proposed privatisation of Nasdaq-listed
CHINA BIOLOGIC PRODUCTS HOLDINGS has been
put on hold because of the buying
consortium’s links to troubled coffee
CHAINû,UCKINû#OFFEE
Centurium Capital, a Chinese private
53MûUNDERûAûlRST
loan, and US$160m under a second-lien
term loan.
Even before the coronavirus pandemic
disrupted the restaurant business, NPC,
which has 1,600 franchised Pizza Hut and
Wendy’s restaurants, struggled with
LAGGINGûPROlTABILITYûDUEûTOûHIGHERûCOSTSû
IMAGING. EQUITYûlRMûLEADINGûTHEûCONSORTIUMûISûTHEû and a lack of sales growth, chief
Barings and Goldman Sachs Special
Situations Group are providing the debt
funding.
4HEû0%ûlRMûISûPOISEDûTOûSIGNûAû!Mû
deal to acquire about 75% of PRP,
MAINûBACKERûOFû,UCKINû#OFFEEûWHICHûHASû
been hit by an accounting scandal and
was forced to delist from the Nasdaq
because of its failure to adhere to listing
rules.
RESTRUCTURINGûOFlCERû%RICû+OZAûSAID
The company was particularly affected
by declines in Pizza Hut’s performance,
which resulted in a “dramatic” increase in
leverage over the past two years, he said.
EXCLUDINGûDEBTûANDûRAISINGûABOUTû!Mû
in debt.
In November, China’s Hengkang
Medical Group announced that it planned
to sell its Australian unit that owns 70.3%
LIENûDEBT
of PRP.
PRP has a network of more than 25
practices across Sydney, the Central Coast,
the Hunter and Central West in New
South Wales.
MADISON DEARBORN PRICES TLB
A A$725m-equivalent (US$500m) Term
,OANû"ûBACKINGû#HICAGO
BASEDûPRIVATEû Centurium Capital-backed Beachhead
EQUITYûlRMû-ADISONû$EARBORNû0ARTNERSû
In April, Centurium had to put on hold
its plans to raise US$2.5bn from a second
fund after news broke out that an internal
INVESTIGATIONûFOUNDû,UCKINû#OFFEEûTOûHAVEû
fabricated as much as Rmb2.2bn
(US$310m) in sales, according to media
reports.
China Merchants Bank and Ping An Bank
were earlier tipped to win the mandate on
a US$1.6bn multi-tranche loan to help
take China Biologic private, in a deal
which valued the company at US$4.59bn.
The consortium proposing to take
China Biologic Products private comprises
process, Koza said. However, it is also
Holdings, Citic Capital China Partners IV,
/Nû*ANUARYûûTHEûCOMPANYûENTEREDû
into a forbearance agreement with
creditors in anticipation of skipping
January 31 interest payments totalling
53MûONûITSûlRSTûANDûSECOND
It used its forbearance period to carry
out discussions with creditors and signed
a restructuring support agreement on
7EDNESDAYû.0#ûEXPECTSûTOûEMERGEûFROMû
bankruptcy within 144 days of the
petition date.
The company is open to selling the
Wendy’s and Pizza Hut franchised
businesses in a court-supervised sales
prepared to restructure its two businesses
acquisition of a majority stake in
Australia’s ADVANCED PERSONNEL MANAGEMENT
INTERNATIONAL has closed after pricing was
widened and a US dollar portion was
YEARûLOANûWILLûBEû
added.
07û-EDTECHû'ROUPû0ARlELDû
International, HH Sum-XXII Holdings and
V-Sciences Investments.
China Biologic Products manufactures
plasma-based therapies. It listed on the
on its own.
.0#ûWILLûRECEIVEûAûNEWû53MûlRST
lien term loan upon emergence from
BANKRUPTCYû4HEûlVE
PRICEDûATûBPûOVERû,IBORûWITHûAûûmOOR
Bank of America LEDûTHEûlNANCINGûWHICHû Nasdaq in 2009.
ISûSPLITûINTOûAû!M
EQUIVALENTûSIX
YEARû COVIA SEEKS CASH COLLATERAL USE
lRST
LIENûTERMûLOANûANDûAû!MûSEVEN

year second-lien portion. Metals and mining supplier COVIA is
4HEûlRST
LIENûPORTIONûOFûWHICHû seeking court approval to use cash
around US$80m is in US dollars, priced RESTRUCTURING collateral to fund its business operations
ATûBPûOVERû""39,IBORûWITHûAûû AFTERûlLINGûFORû#HAPTERûûBANKRUPTCYû
mOORûANDûANûORIGINALûISSUEûDISCOUNTûOFû protection on June 29.
ûAFTERûBEINGûGUIDEDûATûû/)$û)Tû
comes with a 101 soft call protection
FORûSIXûMONTHS
The second-lien facility was guided at
BPûOVERû""39ûWITHûAûûmOORûANDûANû
/)$ûOFû
UNITED STATES
NPC AIMS TO USE CASH COLLATERAL
Pizza Hut and Wendy’s franchisee NPC
INTERNATIONAL is seeking court approval to
International Financing Review July 4 2020
0RIORûTOûlLINGûTHEûCOMPANYûHADû
sought and received permission from
lenders under a pre-petition loan
facility to use the cash collateral in
EXCHANGEûFORûCERTAINûFORMSûOFûADEQUATEû
protection to shield against any
79
potential decline in the value of the The loan will also be subject to a &ORûHIGHERûTHANû"A""""ûTHEûMARGINû
collateral. minimum liquidity covenant of US$50m. ISûBPûFORû"A""""ûITûISûBPûFORû
Its pre-petition debt includes a Covia’s bankruptcy is the largest in the "A""n""nûITûISûBPûFORû"""ûITûISû
US$1.56bn term loan and US$16m in metals and mining sector. BPûFORû"""ûITûISûBPûANDûFORûLOWERû
SECUREDûDEBTûACCORDINGûTOû#&/û!NDREWû
Eich.
Covia will not seek debtor-in-possession
lNANCINGûANDûINTENDSûTOûEXITûBANKRUPTCYû
in 150 days after the petition date.
The company provides materials for
PG&E OUTLINES US$7bn LOANS
PACIFIC GAS AND ELECTRIC has emerged
from Chapter 11 bankruptcy protection
and outlined US$7bn in loans that will
THANû"""ûITûISûBP
,ENDERSûONûTHEû2#&SûAREûJP Morgan, Bank
of America, Barclays, Citi, Goldman Sachs, BNP
Paribas, Credit Suisse, Mizuho, MUFG, Wells
Fargo, Bank of Montreal and BNY Mellon.
Borrowings under the 364-day term
industrial and energy companies,
PARTICULARLYûINûTHEûEXPLORATIONûANDû
production segment. Demand for its
products was adversely affected when
E&P companies were hit with falling oil
and gas prices.
#OVIAûHADûALREADYûBEENûEXPERIENCINGû
DECLININGû%BITDAûANDûFREEûCASHmOWûBEFOREû
THEûCORONAVIRUSûPANDEMICûEXACERBATEDûITSû
lNANCIALûSTRUGGLES
make up part of its revised capital
structure.
The electric utility signed a US$3.5bn
three-year revolving credit facility with JP
Morgan and Citigroup as co-administrative
agents, a US$500m RCF with JP Morgan as
administrative and collateral agent, and a
US$3bn term loan split between a
US$1.5bn 364-day loan and a US$1.5bn 18-
month loan.
LOANûWILLûBEûCHARGEDûATûBPûOVERû,IBORû
while the 18-month facility will pay 225bp
OVERû,IBOR
,ENDERSûONûTHEûTERMûLOANSûAREûTHEûSAMEû
as the RCFs, with the addition of Bank of
China.
The facilities will rank pari passu with
the company’s mortgage bonds. Both the
RCFs and the short-term loans are
SECUREDûBYûlRSTûMORTGAGEûBONDSûANDûALSOû
,ASTûMONTHû#OVIAûSIGNEDûAû
LIENûONûSUBSTANTIALLYûALLûOFûTHEû
restructuring support agreement with an
ad hoc group of lenders. As part of the
RSA terms, the company will receive an
The US$3.5bn RCF is priced against a BYûAûlRST
ratings-based grid ranging between utility’s real property and certain
BPûANDûBPûOVERû,IBOR tangible personal property related to
&ORûHIGHERûTHANû"AA""""""ûTHEû PG&E’s facilities.
US$825m term loan and a US$100m MARGINûISûBPûFORû"AA""""""ûITû 0'%ûSAIDûITûISSUEDû53BNûINûlRSTû
revolving credit facility when it emerges ISûBPûFORû"AA""""""ûITûISûBPûFORû MORTGAGEûBONDSûTOûRElNANCEûCERTAINûPRE

from bankruptcy. "AA"""n"""nûITûISûBPûFORû"A"" petition, senior unsecured debt.
The term loan, which matures in July ""ûITûISûBPûANDûFORûLOWERûTHANû"A ,ASTûMONTHû0'%ûRAISEDû53BNû
ûISûPRICEDûATûBPûOVERû,IBORûWITHûAû
ûmOORû4HEûINTERESTûISûPAYABLEûINûCASHû
unless the company opts for a payment-
YEARûLOANûWASûOFFEREDûATûBPû
in-kind and cash option.
""""ûITûISûBP from the syndicated loan market that was
The US$500m three-year RCF is also USEDûTOûSUPPORTûITSûEXITûFROMû#HAPTERûû
tied to the ratings-based grid, and will pay 4HEûlVE
BETWEENûBPûANDûBPûOVERû,IBOR OVERû,IBORûWITHûAûûmOOR

Reach the people

who matter
Advertising and sponsorship
opportunities in IFR
The most senior professionals in the world’s capital markets rely on IFR for authoritative and
independent news, data and analysis – and have done for more than 40 years.
IFR provides an unrivalled opportunity for advertisers to reach the people who drive and
shape the industry and gives them the chance to associate their company with the world’s
number one source of global capital markets intelligence.

For more information on the various advertising and sponsorship opportunities available within IFR,
email: gloria.balbastro@refinitiv.com

80 International Financing Review July 4 2020


The company also issued US$8.925bn in
investment-grade bonds at the operating
company level, and a further US$2bn in
high-yield bonds secured at the holding
company level.
0'%ûlLEDûFORû#HAPTERûûBANKRUPTCYû
protection in January 2019 after
succumbing to liabilities stemming from
WILDlRESûINû.ORTHERNû#ALIFORNIAûINûû
and 2018. It received court approval for a
53BNûDEBTOR
IN
POSSESSIONûlNANCINGû artists.
in March 2019.
economic development of its assets,
$ELL/SSOûSAID
CIRQUE DU SOLEIL GETS PROTECTION
CIRQUE DU SOLEIL ENTERTAINMENT GROUP has
received initial protection from its
creditors in a Quebec court, after the
Covid-19 pandemic forced the famed
circus operator to cancel shows and lay off
boost liquidity, including potential sale-
Cirque has been forced to slash about
LOANS RESTRUCTURING
LOANûISSUEDûBYû%XPORTû$EVELOPMENTû
Canada.
!EROMEXICOûISûTHEûTHIRDûAIRLINEûINû,ATINû
!MERICAûTOûlLEûFORûBANKRUPTCYûPROTECTIONû
AFTERû#HILESû,!4!-û!IRLINESûANDû
#OLOMBIASû!VIANCAûlLEDûFORûBANKRUPTCYû
in May.
$ELTAû!IRû,INESûHOLDSûAûûSTAKEûINû
!EROMEXICO
4HEûAIRLINEûISûEXPLORINGûOTHERûOPTIONSûTOû
leaseback transactions for its aircraft. The
CHESAPEAKE SEEKS APPROVAL
FOR DIP
/ILûANDûGASûCOMPANYûCHESAPEAKE ENERGY is
seeking court approval for US$1.68bn in
DEBTOR
IN
POSSESSIONûlNANCINGûAFTERûlLINGû protection from its creditors for 10 days.
for Chapter 11 bankruptcy protection.
The DIP includes a US$925m revolving
credit facility and a roll-up of US$750m in
pre-petition debt. The revolver has a sub-
facility that allows for the issuance of up
to US$200m in letters of credit.
95% of its workforce and suspend its
shows due to the pandemic. The
COMPANYûlLEDûFORûBANKRUPTCYûPROTECTIONû
on June 29.
1UEBECû3UPERIORû#OURTû*UDGEû,OUISû
Gouin agreed to give the company
Baker said the spread of the coronavirus
Cirque will seek its immediate provisional
recognition in the US under Chapter 15 in
the US Bankruptcy Court.
The company has signed an agreement
WITHûEXISTINGûINVESTORSûPRIVATEûEQUITYû
fund TPG Capital, China’s Fosun
COMPANYûOPERATESûAûmEETûOFûûAIRCRAFTû
of which 91 are leased.
A sale-leaseback transaction involves
the sale of an asset to a party to raise
capital. The company then leases the asset
back.
and government-imposed travel
RESTRICTIONSûSIGNIlCANTLYûIMPACTEDûTHEû
AIRLINESûPROlTABILITYû)TûALSOûWORKEDûWITHû
CREDITORSûTOûDEFERûAPPROXIMATELYû
US$83.3m worth of payments.
“Unfortunately, despite the company’s
Upon interim court approval, US$325m )NTERNATIONALû,TDûANDû#ANADIANûPENSIONû previously strong balance sheet and
of the DIP will be available to the fund Caisse de depot et placement du recent cost-savings and liquidity-
company. Quebec under which the consortium will PRESERVINGûMEASURESû!EROMEXICOSû
MUFG, Bank of America, BMO, Morgan take over Cirque’s liabilities and invest liquidity position has deteriorated
Stanley, Wells Fargo, DNB Markets, Mizuho, US$300m to support a restart. SIGNIlCANTLYûCULMINATINGûINûTHEû
Citigroup and Goldman Sachs are joint lead
arrangers of the DIP.
Under the terms of a restructuring
support agreement signed last month, a
group of creditors will also provide
The agreement will serve as the ;BANKRUPTCYûlLING=vû"AKERûSAID
“stalking horse” bid in a sale and
investment solicitation process, subject to
court approval. EUROPE/MIDDLE EAST/
But creditors are unlikely to agree to AFRICA
53BNûINûEXITûlNANCINGûCOMPRISINGûAû THEûDEALûWHICHûCOULDûRESULTûINûEXISTINGû
53BNû2#&ûANDûAû53MûlRSTûLIENû debt holders getting about 45% equity in DUBAI WORLD MAKES FINAL
LASTûOUTûTERMûLOANû#&/û$OMENICû the restructured company. REPAYMENT
$ELL/SSOûSAIDû!SûPARTûOFûTHEû23!ûAûGROUPû Goodmans lawyer Joe Pasquariello, a
of term loan lenders and secured legal adviser to creditors, dismissed the State-owned conglomerate DUBAI WORLD, at
noteholders agreed to slash US$7bn in stalking horse bid as inadequate. the centre of Dubai’s debt crisis a decade
debt, he said.
Chesapeake has been struggling with
more than US$20bn of legacy
commitments including US$9.17bn of
pre-petition debt. They include a
US$1.93bn reserve-based lending facility,
As part of the investment, government
body Investissement Quebec will provide
53MûINûDEBTûlNANCING
AEROMEXICO IN DIP TALKS
AGOûSAIDûONû4UESDAYûITûHADûMADEûAûlNALû
payment of US$8.2bn to creditors.
The payment, made ahead of its
September 2022 maturity, was an
“important milestone” for the company
and Dubai, Dubai World chairman
Aû53BNû&,,/ûTERMûLOANû53BNûINû
second-lien notes and US$3.34bn in
UNSECUREDûDEBTû4HEû&,,/ûTERMûLOANûWASû
ISSUEDûINû$ECEMBERûATûBPûOVERû,IBORû
WITHûAûû/)$
The 2014 collapse in oil and natural
gas prices had already hurt Chesapeake’s
-EXICANûAIRLINEûAEROMEXICO is in the
process of arranging debtor-in-possession
lNANCINGûAFTERûlLINGûFORû#HAPTERûû
bankruptcy protection.
The airline is negotiating a delayed-
draw DIP loan facility, which would either
be structured as a single or dual-tranche
Sheikh Ahmed bin Saeed al-Maktoum
said.
The company made the payment using
a US$3bn loan from Dubai Islamic Bank,
asset sales and dividend payments.
Dubai World, whose assets include port
operator DP World, said it had paid
PROlTSûASûITûSTRUGGLEDûWITHûITSûDEBTûPILEûAû FACILITYû)TûWILLûlLEûAû$)0ûMOTIONûWITHINûû US$18.9bn to creditors since 2011.
LEGACYûOFûITSûRAPIDûEXPANSIONûUNDERû DAYSûOFûTHEûPETITIONûDATEû#&/û2ICARDOû Dubai World restructured US$23.5bn in
FORMERû#%/û!UBREYû-C#LENDONû Baker said. debt about 10 years ago after the global
-C#LENDONûONEûOFûTHEûlRSTûTOûREALISEûTHEû !EROMEXICOûHASû53BNûANDû lNANCIALûCRISISûANDûCOLLAPSEûINûOILûPRICESû
potential for fracking technology to Ps.7.89bn (US$350m) in pre-petition debt. took its toll on the Middle East trade and
EXTRACTûOILûANDûGASûFROMûSHALEûLEFTûTHEû Its US dollar-denominated loan debt tourism hub.
company in 2013. He died in a car crash includes US$268.8m under a loan issued As elsewhere, Dubai has been hit by the
in 2016, a day after being charged with by Deutsche Bank and ICBC Bank, coronavirus pandemic that brought many
breaking federal anti-trust laws. US$4.3m under a loan issued by IBM parts of the global economy to a near halt.
An oil price war between Saudi Arabia #APITALû-EXICOû53MûUNDERûAûLOANû Dubai’s debt stood at US$124bn, a
and Russia in March also hurt the issued by BBVA, and US$9.98m under a GOVERNMENTûADVISERûSAIDûINû/CTOBER

International Financing Review July 4 2020 81

 WANT A GLOBAL PERSPECTIVE ON THE
SYNDICATED LOAN MARKET?
FIND IT WITH LPC

LPC is the premier global provider of information on the syndicated loan market. Our first-to-
the-market news and comprehensive real-time and historical data help industry players stay
informed about market trends and facilitate trading and investment decisions.

LPC’s publications, end-of-day valuations, online news, analysis, and interactive databases are
used every day by banks, asset managers, law firms, regulators, corporations and others to drive
valuation, syndication, trading, research and portfolio management activities.

CONNECT TO THE GLOBAL SYNDICATED LOAN MARKET WITH LPC.

www.loanpricing.com
lpc.info@tr.com
 EQUITIES
China 84 Hong Kong 87 India 88 South Korea 88 Belgium 88 Finland 89 Germany 89 Norway 90
Russia 90 Sweden 91 UK 92 United States 93 Canada 98 Structured Equity 99

„ FRONT STORY SOUTH KOREA

DoubleDown folds on Nasdaq IPO

Investors unconvinced by online casino developer’s pandemic growth story
A failed IPO last week by South Korea’s
DOUBLEDOWN INTERACTIVE made it clear that
investors are not persuaded that the
coronavirus pandemic has opened up new
avenues of growth for all tech companies.
û It is uncertain whether DoubleDown will
DoubleDown, which would have been the
lRSTû3OUTHû+OREANûCOMPANYûTOûmOATûINûTHEû
US since 2006, postponed its US$86m
Nasdaq IPO last Wednesday, a day after
downsizing it from US$209m.
The company revised the offering last
Tuesday to 5.5m primary shares at US$15.60
each to give a market capitalisation of
US$777m. It cut the deal size from the original
11m American Depositary shares – equally
split between primary and secondary – with a
price range of US$17–$19 and dropped the
secondary tranche of 5.5m shares from South
+OREANûPRIVATEûEQUITYûlRMû34)#û)NVESTMENTS
KRX-listed parent company DoubleU Games
argued that online gaming would continue to
BENElTûFROMûLOCKDOWNSûIMPOSEDûTOûLIMITûTHEû
spread of the virus. The company had
described itself in the prospectus as an
hUNINTENDEDûBENElCIARYvûOFû#OVID
restrictions.
The Nasdaq 100 Index traded up 1.4%
from the beginning of bookbuilding on June
18 until the scheduled pricing day last
Wednesday, reaching an all-time high of
10,425 on Thursday.
Shares of DoubleU Games fell as much as
15% last Thursday morning to W65,300 on
news of DoubleDown’s postponed IPO,
before recovering to close the day down 5.3%
at W72,700.
NOT FAST ENOUGH
Investors may have been turned off as
DoubleDown is not growing that fast for this
in 2018, this modest gain failed to convince
investors that DoubleDown is a fast-growing
business. All of its four games together
attract 2.9 million players per month.
make a Nasdaq comeback as the parent said
it will re-examine the listing in the future,
taking consideration of market conditions.
This was DoubleU Games’ second attempt
to list its subsidiary. It did not follow
through on a planned 2018 Kosdaq IPO for
the unit, formerly known as The8Games,
without disclosing the reason.
The original DoubleDown Interactive was
founded in Seattle in 2010. It was acquired
by International Game Technology in 2012
for US$500m and later sold to The8Games, a
Seoul-based subsidiary of DoubleU Games,
for US$825m in April 2017. DoubleU Games
renamed the enlarged unit DoubleDown
said in a statement that “uncertainty over the TYPEûOFûCOMPANYûALTHOUGHûITûISûPROlTABLEû Interactive last year ahead of the planned US
GLOBALûECONOMYûDUEûTOûTHEû#OVID
ûPANDEMICû and recorded net income of US$36.4m last listing.
has weakened investor sentiment”. year on revenues of US$274m. JP Morgan and Bank of America were
But the pandemic also featured heavily in Although the percentage of paying bookrunners and Macquarie co-manager.
the company’s marketing for the IPO, which players increased to 5.2% last year from 5% Candy Chan

Capstar and Pimco team up for US$240m SPAC

Steven Hicks and asset manager join forces
CAPSTAR SPECIAL PURPOSE ACQUISITIONûAû30!#û horizon and 100% of proceeds held in trust. The 9EAR TO DATEû30!#û)0/ûVOLUMESûAREûNOWû
AFlLIATEDûWITHûlXED INCOMEûASSETûMANAGERû vehicle is targeting a company in the consumer, US$11.5bn, just shy of the US$13bn in all of 2019.
Pimco, launched and priced an upsized healthcare and TMT verticals with an enterprise
US$240m IPO on Wednesday, continuing a value of US$600m–$1.5bn. BIG BACKLOG, BIG POTENTIAL
trend of accelerated public bookbuilds on #APSTARû0ARTNERSûANDû0IMCOûPURCHASEDû 4HEûBACKLOGûOFû30!#SûWAITINGûTOûGOûPUBLICûISû
30!#û)0/SûINûTHEûTIMEûOFû#OVID  US$6m of warrants to help fund the trust. huge.
4HEû30!#ûISûCO SPONSOREDûBYû#APSTARû 4HEYûOWNûAûCOMBINEDûûSTAKEûINûTHEû30!#û 7ITHûTHEûADDITIONSûOFûTHEû53Mû)0/ûlLINGû
Partners, a mid-market private equity shop purchased for US$25,000, known as the OFû$EERlELDû(EALTHCAREû4ECHNOLOGYû!CQUISITIONû
headed by radio magnate Steven Hicks. sponsor promote. ANDûTHEû53Mû)0/ûlLINGûOFû'/û!CQUISITIONû
4HEûMARKETûFORû30!#SûISûWHITEûHOT (ICKSûTHEûFORMERû#%/ûOFûRADIOûSTATIONû THEREûAREûû30!#SûINûTHEûCURRENTû)0/ûBACKLOGû
)NûTHEûCASEûOFû#APSTARûCitigroup, UBS and operators AMFM and SFX Broadcasting, will seeking to raise US$5.2bn combined.
BTIG were able to upsize the offering to 24m lead the search for an acquisition. Jamie 3IGNIlCANTLYû30!#SûAREûGAININGûTRACTIONûASû
units priced at US$10, from 20m at launch. Weinstein, Pimco’s head of corporate special a viable alternative to traditional IPOs.
They were already covered at the time of the SITUATIONSûISûONû#APSTARSûBOARD h7EûAREûlELDINGûQUESTIONSûFROMûPRIVATEû
public launch from earlier pre-marketing #APSTARûFOLLOWSû-ONDAYSû53Mû)0/ûOFû COMPANIESûTHATûAREûLOOKINGûFORû30!#SûASûAû
and saw demand build from there. 'OLDMANû3ACHS AFlLIATEDûGS ACQUISITION WAYûTOûGOûPUBLICvûSAIDûAû30!#ûBANKER
#APSTARûCLOSEDûlRST DAYûTRADINGû4HURSDAYû HOLDINGS II and the US$125m IPO on Tuesday )NûAûSOMEWHATûUNUSUALûMOVEû30!#ûLANDCADIA
at US$10.16, a somewhat tepid debut given of PANACEA ACQUISITIONûAû30!#ûSPONSOREDûBYû HOLDINGS II on Monday agreed to buy GOLDEN
THEûSTRONGûRECEPTIONûFORûOTHERûRECENTû30!#Sû LIFEûSCIENCE FOCUSEDû6#û%CO2û#APITAL NUGGET ONLINE GAMINGû#ASINOûANDûRESTAURANTû
– however nonsensical that is. GS Acquisition closed at US$10.51 on BILLIONAIREû4ILMANû&ERTITTAûISû#%/ûOFûBOTHû
#APSTARSûSTRUCTUREûISûONEûSHAREûANDûONE HALFû DEBUTûWHILEû0ANACEAû!CQUISITIONûlNISHEDûITSû Landcadia and GNOG parent Golden Nugget.
warrant per unit with a 24-month investment debut on Tuesday at US$11.30. Stephen Lacey

International Financing Review July 4 2020 83

 SEMICONDUCTOR MANUFACTURING INTERNATIONAL on
the Shanghai Star market with a Rmb20bn
ASIA-PACIFIC (US$2.8bn) target, the biggest so far on the
technology-focused board.
The approval came just 29 days after
BOHAI BANK LAUNCHES HK IPO
CHINA BOHAI BANK has opened books for a Hong
Kong IPO of up to HK$14.3bn (US$1.85bn).
The national joint-stock commercial
CHINA
GAN & LEE PHARMA SURGES 44% ON DEBUT
GAN & LEE PHARMACEUTICALS‘ A-shares surged 44%
TOû2MBûONûTHEIRûlRSTûDAYûOFûTRADINGûONû
June 29, hitting the limit for a debut stock.
3-)#SûlRSTû)0/ûlLINGûONû*UNEûûTHEûQUICKESTû
APPLICATIONûPROCESSûINûTHEûHISTORYûOFû#HINASû
capital markets.
The Hong Kong-listed chipmaker
conducted price consultation on July 2 and
was to set the price in the evening of July 3.
Bookbuilding will run for one day on July 7.
BANKûINûWHICHû3TANDARDû#HARTEREDûISûTHEû
second-largest shareholder with a 19.99%
stake, is selling 2.88bn shares at HK$4.75–
$4.98 per share.
The price range represents a 2019 price to
book ratio of 1–1.05.
Nine cornerstone investors are in with a
The insulin manufacturer raised 3-)#ûWHICHûISûSETûTOûBEûTHEûlRSTûOVERSEAS
TOTALûINVESTMENTûOFû53Mû9ICHANGû(%#û
Rmb2.54bn (US$359m) from a Shanghai IPO LISTEDûREDûCHIPûTOûmOATûINûTHEû!
SHAREûMARKETû Health Pharmaceutical has committed
at Rmb63.32 per share. It sold 40.2m plans to offer 1.69bn A-shares, or 25% of its US$200m, Wah Li (Hong Kong), Zhejiang
A-shares or 10% of the enlarged capital, enlarged capital, with a 15% greenshoe. 2ONGSHENGû6ENTUREû#APITALû2ISESUNû,ANDû
EQUIVALENTûTOûAûû0%ûOFû Proceeds will be used to upgrade its $EVELOPMENTûANDû3HENZHENû#UILINû
The biopharmaceutical company will use capacity to manufacture advanced chips at Industrial Development have each
the proceeds for the mass production of sizes of 14-nanometres and below, fund committed US$50m, while Jinlian (Tianjin)
insulin, research, marketing, working
capital, to register insulin products in the
US and to build an R&D centre.
)TûPOSTEDûAûûNETûPROlTûOFû2MBBNû
on revenue of Rmb2.89bn.
Its shares surged 10% to Rmb133.50 last
Friday, hitting the daily cap and causing a
trading halt until Monday.
Citic Securities is the sponsor and joint
bookrunner with Orient Securities.
KANGJI EXERCISES IPO GREENSHOE
Medical equipment maker KANGJI MEDICAL
said it had exercised the 33.8m-share
greenshoe from its IPO, bringing the total
size to HK$3.6bn (US$464m).
Last month the company sold 225m
shares, or 18% of the enlarged share capital,
at HK$13.88 per share. The shares closed at
HK$29.80 last Tuesday.
Bank of America, CLSA and Goldman Sachs
were sponsors.
The proceeds will be used to invest in media
research and development and replenish
working capital.
The company’s H-shares rocked 270% in
the past year.
Haitong Securities and CICC are joint
sponsors and joint bookrunners with Guotai
Junan Securities, China Securities, China
Development Bank Securities and Morgan Stanley
Huaxin Securities.
WUXI BIOLOGICS BUILDS WAR CHEST
WUXI BIOLOGICS (CAYMAN) has raised HK$6.17bn
(US$796m) from an upsized primary
placement.
The company sold 45m shares, or 3.3% of the
enlarged share capital, at HK$137 per share or a
discount of 7.9% to the pre-deal close.
The company marketed 37m shares in a
HK$136–$138 range.
There is a six-month lock-up.
Proceeds will be used to build commercial
MANUFACTURINGûFACILITIESûINûTHEû53ûFORû#OVID
19 treatments and other projects, to acquire
&INANCEû,EASEû#HENGDEû*IANLONGû3PECIALû
Steel, Shenghong Holding Group, and Xinao
Group are each in for US$30m.
The deal is scheduled to price on July 9
and the shares will start trading on July 16.
ABC International, CCB International, CLSA
and Haitong International are sponsors.
4HEû#HINESEûLENDERûPOSTEDûAûNETûPROlTûOFû
Rmb8.2bn (US$1.2bn) for 2019, up 15.7% on
the previous year.
CATHAY MEDIA GROUP LAUNCHES IPO
CATHAY MEDIA GROUP has opened the books for
a Hong Kong IPO of up to HK$1.24bn
(US$160m).
It is offering 400m shares, or 25% of the
enlarged share capital, in an indicative price
range of HK$2.86–$3.10, representing a
FORECASTûû0%ûVALUATIONûOFûnûTIMES
There is a greenshoe option of 60m shares
or 15% of the base size.
content, equipment, acquisitions of education
SMIC IPO WINS FAST-TRACK APPROVAL MANUFACTURINGûFACILITIESûOUTSIDEû#HINAû or training institutions and for working capital
BUILDûMICROBIALûFACILITIESûINû#HINAûANDûFORû and other general corporate purposes.
4HEû#HINAû3ECURITIESû2EGULATORYû#OMMISSIONû general corporate purposes. Four investors will make a cornerstone
has approved the IPO registration of Morgan Stanley was the bookrunner. investment of US$72.5m combined. They

ASIA-PACIFIC IPOs
ASIA-PACIFIC EQUITIES ASIA-PACIFIC EQUITIES (EX-JAPAN)
BOOKRUNNERS: 1/1/2020–30/6/2020
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of Total Share
Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%)
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 CICC 20 3,029.62 9.9
1 Morgan Stanley 52 12,309.88 10.2 1 Morgan Stanley 48 12,098.26 10.6
2 China Secs 14 2,809.03 9.2
2 Goldman Sachs 44 8,612.50 7.2 2 JP Morgan 29 7,100.47 6.2
3 Citic 10 2,142.32 7.0
3 JP Morgan 29 7,100.47 5.9 3 Goldman Sachs 42 7,080.89 6.2
4 Sinolink Secs 7 1,050.21 3.4
4 UBS 43 5,762.15 4.8 4 UBS 43 5,762.15 5.1
5 Huatai Secs 9 972.90 3.2
5 China Secs 21 5,610.09 4.7 5 China Secs 21 5,610.09 4.9
6 Morgan Stanley 10 918.13 3.0
6 CICC 34 5,556.23 4.6 6 CICC 34 5,556.23 4.9
7 Everbright Secs 13 862.65 2.8
7 Citic 27 4,998.48 4.2 7 Citic 27 4,998.48 4.4
8 China Merchants Secs 9 853.58 2.8
8 Credit Suisse 25 4,939.23 4.1 8 Citigroup 23 4,456.12 3.9
9 Haitong Secs 20 828.28 2.7
9 Macquarie Group 26 4,584.31 3.8 9 Macquarie Group 25 4,434.96 3.9
10 Kasikornbank 2 781.15 2.5
10 Citigroup 24 4,556.01 3.8 10 HSBC 20 4,212.09 3.7
Total 332 30,674.29
Total 1,096 120,111.33 Total 1,026 113,727.10
Including all domestic and international deals
Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues Proportional credit
Source: Refinitiv SDC code: C4a1 Source: Refinitiv SDC code: C4a2 Source: Refinitiv SDC code: C04a6

84 International Financing Review July 4 2020

 EQUITIES ASIA-PACIFIC

are Orchid Asia (US$40m), Snow Lake Funds Five cornerstone investors have Baozun has not yet decided how much to
(US$20m), Foresight Orient Global Superior committed to support the deal with a total raise, said one of the people. At its current
#HOICEû30#û53M ûANDû/CEANICû OFû53Mû4HEYûAREû')#û0RIVATEû VALUATIONûAûnûmOATûINû(ONGû+ONGû
(US$2.5m), a unit indirectly owned by Hong (US$80.5m). Zilong Games (US$10m), SNK would raise about US$250m–$500m.
Kong telecom tycoon Richard Li.
The deal will price on July 8 and the
shares are set to list on the Hong Kong
bourse on July 15.
China Merchants Securities and Macquarie are
the joint sponsors.
#ATHAYû-EDIAûPRODUCESûANDûDISTRIBUTESû46û
PROGRAMMESûANDûlLMSû4HEûCOMPANYûALSOû
MANAGESûTHEû#OMMUNICATIONû5NIVERSITYûOFû
LISTEDû#HINESEûHOTELûCHAINûOPERATORû
#ORPORATIONû53M û#OSMICû"LUEû
Investments (US$7m) and Soft-World
)NTERNATIONALû#ORPORATIONû53M 
There is a six-month lock-up period on the
company, controlling shareholders and
cornerstone investors.
The deal will price on July 7 and the
shares are expected to list on July 15.
CICC is the sole sponsor and joint
Shares of Baozun closed at US$46.16 last
Thursday, giving the company a market
capitalisation of US$2.65bn. The stock was
up 27% this year.
Baozun did not respond to emails seeking
comment.
New York-listed YUM CHINA is preparing a
53BNû(ONGû+ONGûmOATûLATERûTHISûYEARû
.ASDAQ
#HINAûINû.ANJINGûWHICHûTEACHESûMAJORSû bookrunner with Haitong International and HUAZHU GROUP and data centre company GDS
related to media and the arts to about 12,000 CMB International. are both planning share sales that could
students. reach as much as US$1bn.
)TûPOSTEDûAûNETûPROlTûOFû2MBMû HK IPO PIPELINE BUILDS DONGGUAN RURAL COMMERCIAL BANK is
(US$27.5m) for 2019, up 31% from 2018. planning to raise up to US$1bn from a Hong
Nasdaq-listed e-commerce solutions Kong IPO this year, according to people close
ARCHOSAUR GAMES LAUNCHES HK IPO provider BAOZUN is considering a secondary to the deal.
listing in Hong Kong, joining a growing ABC International, China Merchants Securities,
#HINESEûMOBILEûGAMESûDEVELOPERûARCHOSAUR QUEUEûOFû53
LISTEDû#HINESEûCOMPANIESû CMB International and ICBC International are
GAMES has launched a Hong Kong IPO to raise seeking to list closer to home amid rising the sponsors.
up to HK$2.2bn (US$280m). 53
#HINAûTENSIONS $2#û"ANKûPOSTEDûAûûNETûPROlTûOFû
It is issuing 187.4m shares for a 23.8% 4HEûCOMPANYûISûWORKINGûWITHûlNANCIALû Rmb4.87bn (US$689m), up 9.3% from a year
FREE
mOATûINûAûPRICEûRANGEûOFû(+n advisers for a potential share sale in the city, earlier. At the end of 2019, the lender had
$11.60. There is an overallotment option of which could happen as early as the end of total assets of Rmb461bn and its non-
15% of the base size. the year. performing loan ratio stood at 1%.
#HINESEûBIOTECHûREMEGEN plans to raise
TOTAL NUMBER AND VOLUME OF EQUITY AND EQUITY-RELATED ISSUES BY COUNTRY about US$400m from a Hong Kong IPO this
1/1/2020–30/6/2020 year.
Volume No of Volume No of 4HEûCOMPANYûlLEDûAûLISTINGûAPPLICATIONûONû
Country US$(m) issues Country US$(m) issues Monday with Huatai International, JP Morgan
South Africa 1,056.8 9 Antigua 9.3 1 and Morgan Stanley as sponsors.
Saudi Arabia 779.4 2 Americas 215,678.1 683 RemeGen has a pipeline of 10 drug
Israel 615.1 19 United Kingdom 22,820.9 221 candidates and focuses on therapies for the
Morocco 83.3 1 Germany 11,450.3 32 treatment of autoimmune, oncological and
Malawi 28.7 1 Switzerland 9,617.9 19 ophthalmic diseases.
Egypt 13.1 1 Netherlands 7,784.7 14 It posted a loss of Rmb99.6m (US$14m) for
Africa/Middle East 2,576.4 33 France 5,488.5 20 THEûlRSTûTHREEûMONTHSûOFûûCOMPAREDû
China 73,677.0 395 Italy 4,595.8 17 with a Rmb87.7m loss for the same period a
India 20,074.8 43 Sweden 3,572.5 60 year earlier. It had a full-year loss of
Australia 18,867.7 393 Ireland 3,567.1 12 Rmb430m in 2019.
Hong Kong 6,729.6 68 Luxembourg 3,024.2 5 JHBP (CY) HOLDINGS, also known as Genor
Japan 6,613.8 73 Austria 2,146.0 4 Biopharma, is planning to raise about
Singapore 4,036.9 23 Spain 2,143.1 6 US$300m from a Hong Kong IPO this year.
Thailand 3,788.8 11 Norway 2,025.5 38
South Korea 3,546.9 40 Denmark 2,017.0 12 GLOBAL BLOCK TRADES AND
Taiwan 1,862.7 42 Russian Federation 2,006.3 6 ACCELERATED BOOKBUILDS
Malaysia 900.5 79 Belgium 1,727.7 12 BOOKRUNNERS: 1/1/2020–30/6/2020
New Zealand 877.9 12 Finland 814.5 6 Managing No of Total Share
Philippines 283.3 2 Guernsey 607.5 3 bank or group issues US$(m) (%)
Indonesia 259.9 30 Turkey 509.5 2 1 Morgan Stanley 73 17,979.08 15.7
Mauritius 234.4 1 Portugal 318.6 1 2 Goldman Sachs 78 13,577.30 11.8
Cambodia 87.5 1 Poland 230.2 5 3 JP Morgan 72 10,432.72 9.1
Macau 9.1 1 Kazakhstan 206.7 1 4 Citigroup 49 9,688.24 8.5
Bangladesh 3.1 1 Monaco 87.0 1 5 BofA Secs 69 9,494.24 8.3
Sri Lanka 0.3 1 Bulgaria 32.7 5 6 Credit Suisse 43 9,158.19 8.0
Asia-Pacific 141,854.2 1,216 Cyprus 22.6 2 7 UBS 33 5,173.59 4.5
United States 191,397.0 490 Greece 20.7 2 8 Barclays 39 4,691.28 4.1
Canada 11,011.3 165 Jersey 15.7 3 9 HSBC 24 3,361.50 2.9
Brazil 9,898.7 17 Isle of Man 1.1 1 10 Jefferies 28 1,996.61 1.7
Bermuda 2,942.8 8 Europe 86,854.3 510 Total 521 114,608.66
Panama 350.0 1 Total 446,962.8 2,442 Global, including all domestic and international deals
British Virgin Islands (UK) 69.0 1 Source: Refinitiv Source: Refinitiv SDC code: C2a

International Financing Review July 4 2020 85

 4HEûCOMPANYûHASûlLEDûAûLISTINGû
application with Goldman Sachs, Jefferies and
JP MorganûASûSPONSORSû4HEûlLINGûDIDûNOTû
mention the size or timing of the deal.
4HEû(ILLHOUSEû#APITAL
BACKEDûBIOTECHû
company has 19 oncology and autoimmune
drug candidates. It posted a 2019 loss of
Rmb523m (US$74m), compared with a
Rmb288m loss in 2018.
(ILLHOUSEû#APITALûOWNSûAûûSTAKEûINû
Genor, while Singapore’s state investor
Temasek Holdings owns 6.3%.
#HINESEûPROPERTYûMANAGEMENTûCOMPANYû
SHIMAO SERVICESûLASTû-ONDAYûlLEDûAû(ONGû
Kong listing application, with CICC and
Morgan Stanley as sponsors.
In January, IFR reported that Shimao
Services planned to raise US$500m–$600m
from a Hong Kong IPO this year.
Hong Kong-listed parent company Shimao
Group said earlier that Shimao Services had
attracted a US$114m investment from
COMMERCEûSERVICESûPROVIDERû
Tencent and a US$130m investment from
3EQUOIAû#APITAL
)NDUSTRIALû#APITALû2MBMûORû53M û
and Lucky Advent (US$8m).
The shares will start trading on July 10.
Credit Suisse and Deutsche Bank are sponsors.
Proceeds will be used to scale up the aims to raise HK$1.8bn (US$234m) from its
business, develop commercial projects,
repay debts of about Rmb540m and for
working capital.
'REENTOWNûPOSTEDûAûNETûPROlTûOFû
Rmb296m for the nine months ended
September 30 2019, up 25% from the same
period in 2018.
As of September 30 2019, the company
had 262 projects under management in the
02#ûANDûONEûCITYûINû#AMBODIA
SMOORE IPO LIKELY TO PRICE AT TOP
SMOORE INTERNATIONAL, one of the world’s
largest e-cigarette makers, is guiding pricing
of its up to HK$7.1bn (US$918m) Hong Kong
IPO towards the top of the HK$9.60–$12.40
per share range, a person with knowledge of
the transaction said.
SHANDONG FENGXIANG OPENS BOOKS
ON US$234m HK IPO
#HINESEûBROILERûPRODUCERûSHANDONG FENGXIANG
Hong Kong IPO.
It is issuing 355m primary shares, or
25.4% of the enlarged share capital, in an
indicative price range of HK$3.33–$5.10,
representing an implied market
capitalisation of HK$4.7bn–$7.1bn.
There is an overallotment option of 15% of
the base size.
Proceeds will be used to expand its
breeding and broiler production capacities,
repay existing borrowing, develop sales
channels for processed chicken meat
products and for research and development.
The deal will price on July 7 and the
shares are expected to be listed on July 16.
Southwest Securities is the sole sponsor.
#HINESEûE
UNQ is planning to raise US$100m–$150m
from a Hong Kong IPO this year, according
!CCORDINGûTOûTHEû)0/ûlLINGû4ENCENTûOWNSû
a 4.7% stake in Shimao Services while
Sequoia owns 5.3%.
Hillhouse-backed liquid detergent maker
BLUE MOON GROUPûLASTûWEEKûlLEDûFORûITSû(ONGû
The company is selling 574m shares, or
10% of the enlarged share capital. The price
RANGEûIMPLIESûAûû0%ûOFûn
Ten cornerstone investors are in with a
total investment of US$340m. They are
to people close to the deal.
4HEûCOMPANYûlLEDûAûLISTINGûAPPLICATIONû
last Tuesday with CICC as sole sponsor.
The business connects brand partners,
e-commerce platforms and consumers in
Kong IPO with Bank of America, CICC and (UANENGû4RUSTû53M û0RIMEû#APITALû #HINAûMAINLYûFOCUSINGûONû*APANESEûBEAUTYû
Citigroup as joint sponsors. (US$50m), Stoneylake Asset Management and personal care products.
The IPO is expected to raise up to US$1bn. (US$35m), IvyRock Asset Management
(ILLHOUSEû#APITALûINVESTEDûINû"LUEû-OONû (US$35m), 3W Fund (US$30m), Yong Rong JINKE SMART FILES FOR IPO
in 2010 and owns 10% of the company. !SSETû-ANAGEMENTû53M û#HAOSû
Investment (US$30m), Foresight Fund JINKE SMART SERVICES GROUP, the property
GREENTOWN MANAGEMENT LAUNCHES IPO 53M û1IANHEû#APITALû53M ûANDû'&û management unit of Shenzhen-listed Jinke
Fund (US$15m). Property Group, plans to raise about
GREENTOWN MANAGEMENT has opened the books There is a 15% greenshoe. US$500m from a Hong Kong IPO.
for a Hong Kong IPO of up to HK$1.43bn The shares will start trading on July 10. 4HEûCOMPANYûlLEDûAûLISTINGûAPPLICATIONû
(US$185m). CLSA is the sponsor. last Monday with Citic Securities and Huatai
The project management arm of Hong 3MOOREûPOSTEDûPROlTûANDûTOTALû International as sponsors.
+ONG
LISTEDû'REENTOWNû#HINAûISûSELLINGû comprehensive income of Rmb2.17bn According to an announcement from
478m shares, or 25% of the enlarged share (US$307m) for 2019, almost threefold the Jinke Property in April, the IPO will
capital, in an indicative range of HK$2.20– Rmb734m earned in 2018. comprise H-shares equivalent to 25% of the
$3.00 per share. Its clients include Japan Tobacco, enlarged capital, with a 15% greenshoe.
Two cornerstone investors are in with a 2EYNOLDSû!SIA
0ACIlCû"RITISHû!MERICANû Jinke Property holds a 75% stake in the unit,
total investment of US$27m – Supor 4OBACCOû2%,8ûANDû.*/9
ASIA-PACIFIC SECONDARY OFFERINGS
ASIA-PACIFIC SECONDARY OFFERINGS ASIA-PACIFIC IPOs (EXCLUDING JAPAN) (EXCLUDING JAPAN)
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 Morgan Stanley 42 11,391.75 12.7 1 CICC 20 3,029.62 10.1 1 Morgan Stanley 39 11,198.70 13.4
2 Goldman Sachs 41 8,303.32 9.3 2 China Secs 14 2,809.03 9.4 2 JP Morgan 26 6,882.20 8.2
3 JP Morgan 26 6,882.20 7.7 3 Citic 10 2,142.32 7.1 3 Goldman Sachs 39 6,771.71 8.1
4 UBS 36 5,049.38 5.6 4 Sinolink Secs 7 1,050.21 3.5 4 UBS 36 5,049.38 6.0
5 Macquarie Group 25 4,569.38 5.1 5 Huatai Secs 9 972.90 3.2 5 Macquarie Group 24 4,420.03 5.3
6 Citigroup 20 4,307.83 4.8 6 Morgan Stanley 9 899.55 3.0 6 Citigroup 19 4,207.94 5.0
7 Credit Suisse 19 4,209.77 4.7 7 Everbright Secs 13 862.65 2.9 7 HSBC 18 3,880.59 4.6
8 HSBC 18 3,880.59 4.3 8 China Merchants Secs 9 853.58 2.8 8 BofA Secs 21 3,396.76 4.1
9 BofA Secs 23 3,498.44 3.9 9 Haitong Secs 20 828.28 2.8 9 Citic 17 2,856.16 3.4
10 Citic 17 2,856.16 3.2 10 Kasikornbank 2 781.15 2.6 10 China Secs 7 2,801.06 3.3
Total 763 89,433.64 Total 296 29,981.44 Total 729 83,742.25
Including all domestic and international deals and rights issues Including all domestic and international deals Including all domestic and international deals and rights issues
Proportional credit Proportional credit Proportional credit
Source: Refinitiv SDC code: C04a7 Source: Refinitiv SDC code: C04a4 Source: Refinitiv SDC code: C04a5r

86 International Financing Review July 4 2020

 EQUITIES ASIA-PACIFIC

and the remaining shares belong to a private It offered 87.1m A-shares, for a 10% free- #HENû&UûANûANALYSTûATû'&û3ECURITIESûSAIDû
EQUITYûlRMûWHICHûPLANSûTOûSELLûPARTûOFûITSû mOATûATû2MBûEACH lower returns from traditional securities
holding. It sold 16.7% of the offering to strategic trading had forced brokerages to launch
Proceeds will be used to expand the size investors, and allotted 70.8% and 29.2% of capital intermediary businesses involving
of the business, acquire other property
management companies, replenish working
capital and for spending on IT services.
*INKEû3MARTû3ERVICESûPOSTEDûAûNETûPROlTûOFû
Rmb374m (US$53m) for 2019, up 128% on
2018.
HUAWEI SUPPLIER FILES FOR STAR IPO
JIANGSU CAI QIN TECHNOLOGY, a Huawei supplier
the remainder to institutional and retail
investors, respectively.
Proceeds will be used for R&D, to build a
production unit, repay bank loans and for
working capital.
CICC is the sponsor, and bookrunner with
Guotai Junan and Haitong Securities.
Junshi raised HK$3.08bn (US$393m) from
a Hong Kong IPO in December 2018.
MARGINûlNANCINGûSTOCKûPLEDGESûANDûPRIVATEû
equity investments.
“The transition of the business model
means that the core of the competition in
the securities industry has changed from
sales channels to capital, and raising capital
has naturally become an important task for
securities companies,” he added.
Shanxi Securities sold 761m shares on a
3-for-10 basis at Rmb5 each. As is usually the
SPECIALISINGûINû'ûCOMPONENTSûHASûlLEDû
WITHûTHEû3HANGHAIû3TOCKû%XCHANGEûFORûAû
proposed Rmb3.94bn (US$557m) IPO on the
Star board.
The company plans to offer up to 100m
OCUMENSION TO PRICE IPO AT TOP
OCUMENSION THERAPEUTICS is likely to price its
up to HK$1.55bn (US$200m) IPO at the top
of the HK$13.16–$14.66 per share range,
CASEûWITHûRIGHTSûISSUESûINû#HINAûTHEû
proceeds were lower than the originally
planned Rmb6bn through the sale of up to
849m shares.
“The initial target in a rights issue plan is
shares, or 25% of the enlarged capital.
Proceeds will be used to build a factory
ANDûFUNDûAûWAVEGUIDEûlLTERSûPRODUCTIONû
project for 5G communications, and for
working capital.
#AIû1INû4ECHûPRODUCESûCERAMICû
INCOMEûBUSINESSESû
microwave components for the TMT sector.
)TûPOSTEDûAûNETûPROlTûOFû2MBMûINûû
when it became a supplier to Huawei, on
according to a person with knowledge of the
transaction.
The company is selling 106m shares, or
18.4% of its enlarged share capital. The top
of the range represents a valuation of
US$1.1bn.
Books are well oversubscribed.
)NVESTORSûAREûmOCKINGûTOûHEALTHCAREû)0/Sû
after previous deals from the sector
THEûUPPERûLIMITûOFûTHEûFUNDRAISINGvûANû%#-û
banker said.
Shanxi Securities, which owns 66.7% of
the Zhong De Securities JV with Deutsche
Bank, will use the funds to expand its
INTERMEDIARYûANDûlXED
and to increase the capital of a subsidiary.
Citic Securities was the sponsor and joint
bookrunner with Zhong De Securities.
REVENUESûOFû2MBBNûlVEûTIMESûTHEû delivered quick and sizeable returns. In the #HINESEûBROKERAGESûHAVEûBEENû
revenues of Rmb271m in 2018. LATESTûEXAMPLEû+ANGJIû-EDICALûAû#HINESEû encouraged by the relaxation of follow-on
China Securities is the sponsor. medical equipment maker, soared 99% on rules in mid-February, which made it easier
!LONGûWITHû#AIû1INû4ECHNOLOGYûANOTHERû its Hong Kong debut last Monday after a for listed companies to raise capital.
ûCOMPANIESûALSOûlLEDûFORû3TARû)0/SûLASTû HK$3.1bn IPO. Since February, listed brokerages
week with a combined target of Rmb11bn. Ocumension specialises in the treatment including Haitong Securities, Nanjing
AI chipmaker CAMBRICON TECHNOLOGIES will of eye disorders and has 16 drug assets in its 3ECURITIESû#ENTRALû#HINAû3ECURITIESûANDû
price a proposed Rmb2.8bn (US$394m) Star portfolio, three of which are at the #HINAû3ECURITIESûHAVEûREVISEDûTHEIRû
board IPO on July 6 and books will open for commercial stage and four are in clinical fundraising plans based on the new rules.
a day on July 8. trials. h!MONGûTHEûMANYûlNANCINGûMETHODSûTHEû
#AMBRICONûWHICHûCOUNTSû!LIBABAû'ROUPû Fourteen cornerstone investors are advantages of the rights issue are obvious.
Holding as a shareholder, plans to offer committing a total of US$100m. The review process for rights issues is very
MûNEWûSHARESûFORûAûûFREEûmOATû
Proceeds will be used for three chip projects
and to replenish working capital.
The company’s net loss ballooned to
Rmb1.18bn in 2019 from Rmb41m a year
earlier, though revenues almost quadrupled
to Rmb444m from Rmb117m. Its Q1
revenues dropped 18.9% year-on-year to
Rmb11.5m after former partner turned rival
HiSilicon, a Huawei subsidiary, cut all of its
LINKSûWITHû#AMBRICONûLASTûYEAR
The company was asked about the impact
of losing a major customer and the risk of
LONG
TERMûUNPROlTABILITYûATûTHEû33%ûHEARINGû lucrative but capital-intensive businesses.
for the IPO, but it was given the green light
JUSTûTWOûMONTHSûAFTERûITSûlLINGûONû-ARCHû
Citic Securities is the sole sponsor of the
deal, and joint bookrunner with CICC, Guotai
Junan Securities, and Essence Securities.
JUNSHI BIOSCIENCES COMPLETES IPO
The shares will start trading on July 10.
Goldman Sachs and Morgan Stanley are
sponsors. The two banks are also joint global
coordinators and joint bookrunners with UBS.
It posted a loss of Rmb1.32bn for 2019,
more than six times its loss of Rmb209m in
2018.
BROKERS LOAD UP ON CAPITAL
#HINASûSECURITIESûBROKERSûAREûRUSHINGûTOû
raise over Rmb150bn (US$21.2bn) of equity
as they compete for market share in
Shenzhen-listed SHANXI SECURITIES,
$EUTSCHEû"ANKSû#HINESEûSECURITIESûJOINTû
venture partner, completed a Rmb3.8bn
rights issue last week, the fourth brokerage
to raise capital this year. Another 15 are
looking to raise a total of Rmb128bn
through rights issues and placements.
EFlCIENTûTHEûISSUANCEûISûLESSûAFFECTEDûBYû
market conditions, and the use of proceeds
is less restricted. Proceeds can be fully used
to replenish working capital and repay
debt,” he said.
A rights offering can go through only if
shareholders subscribe to at least 70% of
their entitlements.
Listed companies are also looking at
convertible bonds and private placements.
With the latter, issuers are now allowed to
offer a discount of up to 20% in order to
attract investors.
HONG KONG
D8 PLANS NYSE IPO
D8 HOLDINGS, a blank cheque company
targeting global and regional consumer
%ARLIERûTHISûYEARûSEALAND SECURITIES, BRANDSûHASûlLEDûFORûAû53Mû.93%û)0/
Hong Kong-listed SHANGHAI JUNSHI BIOSCIENCES TIANFENG SECURITIES and SOOCHOW SECURITIES The Hong Kong-based special purpose
has raised Rmb4.83bn (US$684m) from a raised a combined Rmb19.1bn from rights acquisition company plans to sell 25m units
Shanghai Star IPO. issues. ATû53ûEACHû%ACHûUNITûCOMPRISESûONEû

International Financing Review July 4 2020 87

share and one-half of a warrant, exercisable Investors will have to pay Rs55 per rights HUGEL BLOCK TRIGGERS SHARE SLIDE
at US$11.50. share on application, Rs27.5 on January
$AVIDû#HUûTHEûFOUNDERûOFûCLOTHINGûLINEû 2021 and Rs27.5 on July 2021. Shares in KRX-listed HUGEL fell as much as
.AUTICAûISûTHEûCHIEFûEXECUTIVEûOFlCERûOFû$û Birla Group Holdings, which holds a 22.29% 9.3% last Tuesday after two shareholders
$ONALDû4ANGûAûFORMERû!SIA
0ACIlCû#%/ûOFû stake, and Aditya Birla Group, with 17.49%, sold a combined W106bn (US$88.6m) 5.2%
INVESTMENTûlRMû$%û3HAWûISûTHEûPRESIDENT
UBS is the sole bookrunner.
VIVA BIOTECH PRICES SHARE PLACEMENT
VIVA BIOTECH HOLDINGShas raised HK$1.06bn
(US$137m) through the sale of 130m new
shares at the bottom of a HK$8.15–$8.40 per
share range.
4HEûlNALûPRICEûREPRESENTSûAûû
discount to the pre-deal close of HK$9.04.
The shares are up 98% this year.
will be subscribing to their entitlements and
any unsold part of the rights issue.
The company is raising the funds to repay
debt and strengthen its balance sheet.
Shares of the fashion retailer have fallen
46% in the year to-date.
ABFR owns 4,363 stores in India.
Axis, BNP Paribas, CLSA, ICICI Securities and
SBI Capital Markets are the banks on the
transaction.
ARVIND FASHIONS UPSIZES RIGHTS ISSUE
stake in the biopharmaceuticals company.
The overnight block trade of 224,871
shares priced at W471,562 per share, a 9%
discount to the pre-deal close of W518,200,
from an indicative discount range of 7%–10%
at launch.
Buyers were mostly overseas investors,
according to a person close to the
transaction.
4HEûVENDORSûAREûAFlLIATESûOFû+IMû"YUNG
Gun, a plastic surgeon turned investor. They
held a combined stake of 6.34% before the
Books were multiple times covered with
about 35 accounts participating. Hedge
funds formed the bulk of the investment,
while the top 10 investors were allocated
70% of the deal.
The shares sold are equal to 7.28% of the
company’s expanded capital.
The funds will be used for downstream
consolidation and working capital.
There is a 90-day lock-up on the company.
CICC and JP Morgan are the joint
placement agents.
ARVIND FASHIONS has launched an upsized
rights offer of up to Rs4bn (US$53m) at a 62-
for-91 ratio at Rs100 per share.
In a public announcement, the company
said up to 40m shares were on offer and the
issue would close on July 17.
The company had deferred the rights
issue in March because of weak stock
market conditions. It was then planning to
sell up to 19.98m shares in a 16-for-47 ratio
at Rs150 each.
Arvind Fashions shares have fallen 46%
year-to-date.
DEALûACCORDINGûTOû2ElNITIVûDATA
Shares in Hugel dropped to as low as
W470,000 Tuesday before recovering to
close at W472,500. The stock ended the
week at around W473,000, still up 19% this
year.
NH Investment and Securities is the
bookrunner.
IGIS RESIDENCE REIT COMPLETES IPO
has raised W89.5bn
IGIS RESIDENCE REIT
(US$75m) from a KRX IPO.
It issued 17.9m shares for an 87% free-
INDIA
AXIS PLANS RS150bn CAPITAL RAISING
AXIS BANKis planning to raise up to Rs150bn
(US$1.9bn) through the sale of shares/
depositary receipts or any other convertible
instrument.
The shares will be sold through a
QUALIlEDûINSTITUTIONALûPLACEMENTûORû
preferential share issue.
Axis Bank is raising the funds to shore up
its balance sheet as bad loans are likely to
INCREASEûBECAUSEûOFûTHEû#OVID
ûPANDEMICû against its IPO price of W49,000, the top of
and India’s nationwide lockdown since
March.
Last week, S&P downgraded Axis Bank to
junk at BB+ (stable) from BBB– (negative) on
expectations of higher bad loans.
The bank raised Rs125bn last year
through a QIP at Rs629 per share. The shares
have fallen 44% this year.
ADITYA BIRLA FASHION SETS TERMS
ADITYA BIRLA FASHION AND RETAIL plans to sell 9-for-
77 rights shares at Rs110 each to raise
Rs9.95bn (US$132m), according to a term-
sheet.
Up to 90.5m shares are being sold.
Shareholders on the company’s books as
of July 1 are eligible for the rights offer,
which will be open between July 8 and
July 22.
88
Vivro Financial Services is the lead manager.
SOUTH KOREA
SK BIOPHARMA SOARS ON DEBUT
SK BIOPHARMACEUTICALS more than doubled on
its KRX market debut last Thursday after its
W959bn (US$794m) IPO priced at the top of
the range.
The shares opened at W98,000 and
further climbed to close at W127,000,
4HEûISûTHEûSECONDû2%)4ûLISTINGûTHISûYEARûBYû
its marketed price range. The stock rose as
much as 29.6% from its opening price,
compared with a 1.2% rise in the benchmark
KOSPI 200.
The drugmaking unit of conglomerate SK
'ROUPûCOMPLETEDûTHEûCOUNTRYSûLARGESTûmOATû
since biopharmaceutical distributor
#ELLTRIONû(EALTHCARESû7TRNû+28ûLISTINGûINû
July 2017.
Investors are betting on the popularity of
the biotech and healthcare sectors amid the
coronavirus pandemic.
SK Biopharm, which was founded in 2011,
last year received regulatory approval from
the US Food and Drug Administration for
two of its drugs, Sunosi and Xcopri. The
former is a treatment for sleep disorders and
the latter for epilepsy.
Citigroup, Morgan Stanley and NH Investment
& Securities are the joint bookrunners.
International Financing Review July 4 2020
mOATûATû7ûEACHûVALUINGûTHEûCOMPANYû
at W103bn.
About 30% of the offering will be allocated
to institutions and the rest to retail
investors.
The shares will start trading on the South
Korean bourse in late July or mid-August,
PENDINGû+28ûlNALûAPPROVAL
4HEû2%)4ûWILLûFOCUSûONûINVESTINGûINû
government-supported retail and apartment
complexes.
Samsung Securities is leading the deal with
DB Investment & Securities and Yuanta Securities.
South Korea’s largest real-estate asset
management company. IGIS priced a
7BNû)0/ûFORû)')3û6ALUEû0LUSû2%)4ûLASTû
month at W5,000 each. The unit will list on
July 16.
That deal was also led by Samsung Securities.
EUROPE/MIDDLE
EAST/AFRICA
BELGIUM
HYLORIS SHARES STRUGGLE ON DEBUT
Shares in HYLORIS PHARMACEUTICALS were
trading below the IPO price within an hour
 EQUITIES EMEA

of the Belgian pharma’s debut in Brussels Brockhaus focuses on Mittelstand The sellers are locked up for 90 days.
FOLLOWINGûITSûõMûmOATû4HEYûCLOSEDûATû acquisitions of high-margin and high- Thursday’s trade was equal to around 21
€10.39, 3.35% below pricing. growth B2B technology companies. DAYSûTRADINGûACCORDINGûTOû2ElNITIVûDATAû
Having priced at €10.75 the previous The technology investor is expected to be Shares in Flatex plunged on Friday and
Friday, the middle of the €10.00–€11.50 valued at €400m–€500m, suggesting a free- spent most of the day below ABB pricing,
RANGEûTHEûSTOCKûOPENEDûONû-ONDAYûmATûTOû
PLUSû4HEREûISûAûûPRIMARYû closing down 10.9% at €42.
pricing, swiftly rising to €11.15 before just
as swiftly dropping below pricing.
Shares had traded lower earlier in the day,
SEVERALûTIMESûlNDINGûRESISTANCEûAROUNDû
€10.25, before rising slightly into the close.
The soft trading must be viewed in
conjunction with the modest volume of a
little over 500,000 shares on debut,
representing just 8.7% of the 5.75m shares in
the base deal. There is a 15% greenshoe.
On Thursday, the stock closed at €10.52.
The IPO found strong demand from retail
investors, with individuals allocated 18.4%
mOATûTOû
of the offer.
Hyloris makes new formulations of
existing drugs, with proceeds to develop its
portfolio and establish a commercial
presence in the US.
KBC Securities and Kempen & Co were
BOOKRUNNERSûONûTHEûmOAT
FINLAND
FINNAIR RIGHTS ISSUE GETS 98% TAKE-UP
FINNAIR had 98% take-up for its €511.7m fully
underwritten rights issue that will provide
much-needed headroom as it weathers to
fallout from the coronavirus.
During the subscription period from June
17–July 1, rights were exercised for 1.25bn
shares out of 1.28bn, but there was excess
demand for 162.7m shares covering the
whole deal.
Shares were offered on a heavy 10-for-1
mOATûOFû
greenshoe.
As with the handful of IPOs to launch
during the coronavirus outbreak, Brockhaus
is being marketed entirely virtually, with
pre-marketing and bookbuilding through
teleconferencing and phone calls. A small
number of German investors met
management physically before lockdown
measures were introduced.
There is no retail tranche, so the
timetable can be accelerated as much as
required, but the expectation is that the
whole process will take less than three
weeks. Pre-marketing and bookbuilding are
likely to be equally balanced, although any
acceleration is likely to be around
bookbuilding and based on coverage and
momentum. That would suggest books
opening around July 8 and wrapping up by
July 17.
Brockhaus acquired aerosol technology
business Palas in December 2018 and IT
INFRASTRUCTUREûGROUPû)(3%ûINû$ECEMBERû
2019. It also has stakes in travel software
specialist Peakwork and data management
provider Auvesy.
Majority stakes have previously been
realised in a diverse collection of companies,
including semiconductor company DMS,
J&S Automotive Technology and surgical
products business Resorba.
Its best known former portfolio company
was payments platform Wirecard, which
Brockhaus exited in 2007.
Citigroup and Jefferies are global
coordinators, and bookrunners with
Jefferies was global coordinator, and
bookrunner with -AINlRST.
ITALY
GVS FULLY EXERCISES GREENSHOE
Shares trading nearly 24% above IPO pricing
after more than a week led to a full exercise
OFûTHEûGREENSHOEûFORûlLTERûCOMPANYûGVS last
week, taking the IPO size to €570.5m and
THEûFREE
The shares closed up 21.7% on debut at
€9.92 from IPO pricing of €8.15. A strong
start was expected after the IPO attracted
€3.4bn of orders and shares had held onto a
20% gain since. Shares ended Monday at
€10.09 and the 9m secondary share
greenshoe was triggered after the close.
GVS shares continued to climb on Tuesday,
closing at €10.35. They had touched €11 by
Thursday’s close, a near 35% gain on the IPO.
Goldman Sachs and Mediobanca were
bookrunners, with Mediobanca handling
stabilisation, and Lazard advising.
LUXEMBOURG
ADO PRICES €450m RIGHTS ISSUE AT 33%
DISCOUNT TO TERP
ADO PROPERTIES is pressing ahead with a
slightly downsized €450m rights issue, with
proceeds reducing its debt load as it acquires
BASISûATûõûAûûDISCOUNTûTOû4%20ûOFû
€0.73 according to IFR calculations, based on
the €4.078 June 9 close.
Citigroup and Nordea were bookrunners,
with OP Corporate Bank, SEB and Swedbank/
Kepler Cheuvreux as co-lead managers.
The capital increase was backed by the
Commerzbank.
MAIN SHAREHOLDERS SELL 11.7% OF
FLATEX
The two largest shareholders in German
lNTECHûCOMPANYûFLATEX sold 11.7% of the
'ERMANûPEERû#ONSUSû2EALû%STATE
The rights issue comes as ADO consolidates
German residential real estate companies
following last December’s merger with Adler
2EALû%STATEûANDûPRICINGûWASûSETûONû4HURSDAYûATû
AûûDISCOUNTûTOû4%20
When ADO merged with Adler in
Finnish state, which irrevocably committed company on Thursday evening, cashing in $ECEMBERûITûAGREEDûTOûACQUIREûûOFû#ONSUSû
for its 55.9% stake, with the balance an aggregate €98.9m. for €294m and had a call option on 51% from
UNDERWRITTENûBYû#ITIGROUPûANDû.ORDEA Largest shareholder GfBk, which is Aggregate Holdings in exchange for ADO
Shares in Finnair closed 6.2% down on controlled by German entrepreneur and shares. ADO is now exercising that call option
Friday at €0.741 each. publisher Bernd Fortsch, sold 1.8m shares in
the placing for €77.4m, cutting its stake to
around 18.6%.
GERMANY Heliad sold 500,000 shares for €21.5m,
leaving a holding of about 7.3% of Flatex.
BROCKHAUS TARGETS UP TO €500m IPO Pricing was €43 per share, representing
VALUATION an 8.8% discount to Thursday’s close of
€47.15.
BROCKHAUS CAPITAL MANAGEMENT is targeting 4HEûFREE
FORûMûSHARESûINû#ONSUSûEXPECTEDûTOûBEû
settled before the rights issue begins.
At the start of the week, ADO said that it
would not pay a €50m dividend for 2019 in
order to cut sizing on a planned €500m
rights issue down to €450m.
Terms set on Thursday comprise an
offering of 30.8m shares on a 5-for-12 basis
mOATûINCREASESûTOûûAFTERûTHEû ATûõûAûûDISCOUNTûTOû4%20ûOFû
proceeds of €100m from its Frankfurt sell-down. The company is planning to €21.83, based on the July 1 close of €24.84.
listing, with proceeds to fund migrate from Deutsche Boerse’s Scale ADO Properties’ stock closed down 2.66%
acquisitions. segment to the Prime Standard in Q4. at €24.18 on Thursday.

International Financing Review July 4 2020 89

 -AJORûSHAREHOLDERSûHAVEûPROVIDEDûlRMû
commitments to exercise rights covering an
aggregate 36% of the rights issue, which is
fully underwritten.
Subscription runs from July 6–20, with
rights trading wrapping up on July 16 and
any rump on July 21. The record date is July 3.
ADO will make an offer to acquire all
REMAININGûSHARESûINû#ONSUSûTHROUGHûAû
voluntary public tender offer and has
already received irrevocable
commitments for a shareholding of more
than 80%.
ADO will become the fourth largest
RESIDENTIALûREALûESTATEûCOMPANYûINû%UROPEûBYû
gross asset value, with a focus on the top
seven German cities around a build-to-hold
investment strategy.
Deutsche Bank and JP Morgan are global
coordinators, and bookrunners with Barclays
and Kempen & Co.
NORWAY
BKK HALVES FJORDKRAFT STAKE
NKr596m (US$62.6m), halving its stake in an The deal was a rare auctioned mandate
ABB run by ABG Sundal Collier. THATûlNISHEDûWITHûMorgan Stanley as sole
A total of 8m shares were sold at bookrunner. The US bank had garnered
NKr74.50, a 5.6% discount to Tuesday’s close SIGNIlCANTûREVERSEûENQUIRYûINûPREVIOUSû
of NKr78.90 per share. weeks and, while the deal had not been pre-
A wall-cross was held beforehand and the announced, the rise in gold prices and
deal was covered on indications. The 100- Polymetal’s share price meant the buyside
line book contained orders predominantly was primed for a deal.
from the UK, followed by Norway and Gold prices passed US$1,800 per ounce on
Sweden. Tuesday and are up around 17% for the year
The last time BKK cut its stake in so far.
Fjordkraft was in June 2019, when it sold Within minutes of launching the offering
15% for NKr666.2m. of 12.54m secondary shares with guidance
Shares in Fjordkraft closed down 4.82% on of £15.75 to the £16.155 Tuesday close, two
Wednesday at NKr75.10 each. very substantial orders came in and
BKK remains the largest shareholder in COVERAGEûWASûANNOUNCEDûAFTERûAROUNDûlVEû
Fjordkraft with a 7.6% stake. minutes. There were other outsized orders
in a high single-digit book.
Pricing came at the bottom of the range
RUSSIA for a 2.5% discount and £198m deal. The
offering represented approximately four
POLYMETAL SALE FOLLOWS GOLD SURGE days’ trading.
The shares had risen more than 16% on
#ZECHûINVESTMENTûGROUPû0&&û'ROUPûPOUNCEDû Tuesday and were up more than 35% year-to-
on heavy reverse enquiry and gold futures date.
reaching their highest level since 2011 on The top 10 accounts took 80% of a very
4UESDAYûOFmOADINGûAûûSTAKEûINû,ONDON
concentrated book, dominated by existing
Power company BKK sold 7.6% of electricity listed Russian gold miner POLYMETAL fundamental shareholders but with some
supplier FJORDKRAFT on Tuesday evening for INTERNATIONAL for £198m. new money, including a substantial order.

EMEA EQUITIES EMEA COMMON STOCK ISSUER LEGAL ADVISERS EMEA COMMON STOCK MANAGER LEGAL ADVISERS
BOOKRUNNERS: 1/1/2020–30/6/2020 1/1/2020–30/6/2020 1/1/2020–30/6/2020
Managing No of Total Share No of Total Share No of Total Share
bank or group issues US$(m) (%) Legal adviser issues US$(m) (%) Legal adviser issues US$(m) (%)
1 Goldman Sachs 41 7,125.70 9.4
1 Allen & Overy 3 3,501.8 4.6 1 Linklaters 18 8,655.2 11.5
2 Citigroup 33 6,991.87 9.3
2 Freshfields Bruckhaus 9 2,551.4 3.4 2 Freshfields Bruckhaus 5 2,756.2 3.7
3 Morgan Stanley 26 6,396.97 8.5
Deringer Deringer
4 JP Morgan 43 5,916.55 7.8
3 Davis Polk & Wardwell 5 2,521.6 3.3 3 White & Case 13 2,341.6 3.1
5 BofA Secs 29 5,618.17 7.4
4 Slaughter and May 7 2,514.4 3.3 4 Allen & Overy 4 2,039.7 2.7
6 Credit Suisse 23 5,395.47 7.2
5 Bar & Karrer 1 2,402.5 3.2 5 Latham & Watkins 9 2,002.7 2.7
7 Barclays 30 3,611.92 4.8
6 Arthur Cox 3 2,278.2 3.0 6 Bar & Karrer 1 1,821.0 2.4
8 UBS 17 2,997.41 4.0
7 Linklaters 3 2,127.8 2.8 7 Cooley 6 1,595.7 2.1
9 HSBC 21 2,152.63 2.9
8 Carey Olsen 2 1,251.3 1.7 8 NautaDutilh 3 1,322.7 1.8
10 BNP Paribas 20 1,943.03 2.6
9 Goodwin Procter 4 1,068.8 1.4 9 Cahill Gordon & Reindel 1 1,150.0 1.5
Total 515 75,460.83
10 Sullivan & Cromwell 2 1,040.9 1.4 10 Baker Mckenzie 12 937.8 1.2
Note: All deals submitted as of 2pm GMT as of Mar 31 2020
Including all domestic and international deals and rights issues Total 515 75,460.8 Total 515 75,460.8
Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues
Source: Refinitiv SDC code: C4cr Source: Refinitiv SDC code: AX3 Source: Refinitiv SDC code: AX4
EMEA IPOs ALL FRENCH EQUITIES
EMEA RIGHTS ISSUE UNDERWRITING
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of Total Share Managing No of Total Share
Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
bank or group issues US$(m) (%)
1 Goldman Sachs 3 632.96 9.7 1 Morgan Stanley 3 808.25 19.1 1 Credit Suisse 2 412.19 12.0
2 BofA Secs 2 328.02 5.0 2 JP Morgan 2 647.17 15.3 2 JP Morgan 2 405.77 11.9
3 Mediobanca 1 321.28 4.9 3 Citigroup 2 366.83 8.7 3 BNP Paribas 4 389.78 11.4
4 Citigroup 2 311.69 4.8 4 Nordea 5 309.14 7.3 4 SG 5 369.19 10.8
5 HSBC 2 311.69 4.8 5 Deutsche Bank 2 221.58 5.2 5 Goldman Sachs 3 318.65 9.3
6 Santander 2 244.69 3.8 6 HSBC 2 213.67 5.1 6 UBS 1 243.46 7.1
7 Mitsubishi UFJ Fin 1 238.83 3.7 7 Renta 4 Banco SA 1 163.18 3.9 7 Natixis 2 166.27 4.9
8 JP Morgan 1 238.83 3.7 8 Commerzbank 1 161.08 3.8 8 BBVA 1 162.30 4.7
9 ING 1 238.83 3.7 9 UBS 1 161.08 3.8 9 Deutsche Bank 1 162.30 4.7
10 UniCredit 1 238.83 3.7 10 BofA Secs 1 161.08 3.8 10 Commerzbank 1 162.30 4.7
Total 29 6,514.56 Total 37 4,222.90 Total 16 3,421.22
Note: All deals submitted as of 2pm GMT as of Mar 31 2020 Including all domestic and international deals and rights issues
Including all domestic and international deals
Source: Refinitiv SDC code: C7c Source: Refinitiv SDC code: C8fr Source: Refinitiv SDC code: C4c2r

90 International Financing Review July 4 2020


A banker involved said that the deal had
been expected to be quickly and heavily
covered, based on the reverse enquiry, but
that the level of quick demand had still been
a surprise, possibly because of a lack of
competing deals on the night and being a
quieter week for ABBs.
PFF Group is left with a 3.8% stake, subject
to a relatively short 60-day lock-up.
Polymetal shares opened well above
pricing on Wednesday but fell through
pricing to close at £15.605 each.
SAUDI ARABIA
MID-RANGE PRICING FOR AMLAK AHEAD
OF RETAIL OFFERING
UPûAFTERûTHEûmOAT
2EALûESTATEûlNANCINGûCOMPANYûAMLAK
INTERNATIONAL set mid-range pricing for its
SR435.2m (US$116.1m) all-secondary Riyadh
IPO ahead of a retail tranche that opened
last Thursday.
Final pricing is SR16 per share, from a
A maximum of 27.2m shares are up for
sale in the IPO, with up to 10% to be clawed
back and allocated to retail investors.
The company said the offer was already
lVEûTIMESûCOVEREDûFOLLOWINGûTHEû
institutional offering.
NCB Capital is running the IPO for 30% of
Amlak.
%ACHûOFûTHEûCOMPANYSûûSHAREHOLDERSûISû
selling 30% of their stake.
Saudi Investment Bank, which is selling
9.6% of Amlak, will reduce its stake to
22.41%.
The second-largest shareholder, Dubai-
based Amlak Finance, is selling 7.86% and
will be left with 18.35%.
The sellers will be under a six-month
LOCK
subject to the progress of the other
A date for shares to begin trading on the
Tadawul exchange has not yet been decided.
SOUTH AFRICA
SASOL PAVES WAY TO US$2bn RIGHTS
EQUITIES EMEA
business by disposing of assets, paving the
way for a potential rights issue to raise up to
US$2bn.
The company said last Wednesday that it
HADûSIGNEDûANûAGREEMENTûWITHû#HEVRONûTOû
SELLûANûINDIRECTûBENElCIALûINTERESTûINûAû
Nigerian plant.
Announcements of further disposals are
likely, with advanced discussions around
divesting interests in two Mozambique
assets and a US asset.
Sasol’s two-year turnaround strategy,
which is a response to the coronavirus crisis
and lower oil prices, was announced in
March. It includes asset disposal and a cash
conservation programme and a possible
fully underwritten rights issue, which is
initiatives.
Bank of America and Citigroup are global
coordinators on the rights issue with JP
Morgan as bookrunner, with the three banks
underwriting on a volume basis.
The rights issue is likely to come in the
second half of 2020, but timing has not been
SR15–SR17 range. ISSUE CONlRMEDûAûBANKERûINVOLVEDûSAID
Books for institutions opened on June 22 Shares in Sasol ended Wednesday down
and closed last Monday. Now that pricing is South African oil and chemicals company 1.7% at R13.
lNALISEDûAûRETAILûTRANCHEûRUNSûFROMû*ULYûn SASOL is advancing plans to streamline its

ALL ITALIAN EQUITIES

ALL GERMAN EQUITIES
BOOKRUNNERS: 1/1/2020–30/6/2020
SWEDEN
BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of Total Share Managing No of Total Share SAS GETS STATE BACKING FOR US$1.3bn
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
RECAPITALISATION
1 Morgan Stanley 4 1,667.82 21.2 1 Goldman Sachs 4 833.83 22.6
2 BofA Secs 4 1,319.87 16.8 2 Banca IMI 3 512.55 13.9 The Swedish and Danish governments have
3 Goldman Sachs 4 1,186.30 15.1 3 Mediobanca 3 471.90 12.8 put aside their Scandinavian rivalry, heavily
4 Credit Suisse 2 598.24 7.6 4 Barclays 2 296.86 8.1 backing a SKr12bn (US$1.28bn) fundraising
5 Berenberg 5 556.03 7.1 5 Citigroup 3 276.34 7.5 airline SAS that includes a SKr4bn rights
6 UBS 2 542.22 6.9 6 Morgan Stanley 2 268.32 7.3 issue, in a bid to keep the airline aloft.
7 BNP Paribas 3 351.65 4.5 7 BofA Secs 2 248.28 6.7 4HEûmAGûCARRIERSûOFû3WEDENû$ENMARKûANDû
8 JP Morgan 2 323.95 4.1 8 UBS 1 215.69 5.9 Norway merged in 1951, with each state
9 Mid-Capital 4 293.10 3.7 9 HSBC 1 171.87 4.7 becoming a stakeholder. The Norwegian
10 UniCredit 3 244.88 3.1 10 UniCredit 1 171.87 4.7 GOVERNMENTûSOLDûITSûSTAKEûINûAûlNALûSALEûOFû
Total 27 7,879.17 Total 15 3,681.84 9.88% of the carrier for SKr642m in June 2018.
Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues SAS said that cost-cutting measures,
Source: Refinitiv SDC code: C4c3r Source: Refinitiv SDC code: C4c5r including furlough schemes, suspension of

ALL UK EQUITIES
ALL NORDIC EQUITIES ALL SPANISH EQUITIES
BOOKRUNNERS: 1/1/2020–30/6/2020
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of Total Share
Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%)
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 Carnegie 37 1,143.42 13.6 1 Credit Agricole 1 270.20 25.7 1 JP Morgan 17 2,531.40 11.7

2 Nordea 16 941.87 11.2 2 JP Morgan 1 270.20 25.7 2 Barclays 18 2,410.65 11.1

3 SEB 10 767.70 9.1 3 Citigroup 1 270.20 25.7 3 Morgan Stanley 9 2,278.54 10.5

4 Danske Bank 16 677.90 8.1 4 Renta 4 Banco 1 163.18 15.5 4 Goldman Sachs 11 1,854.90 8.6

5 ABG Sundal Collier 24 591.60 7.0 5 Santander 1 56.70 5.4 5 BofA Secs 6 1,710.98 7.9

6 DNB 20 510.40 6.1 6 Jefferies 1 11.22 1.1 6 Numis 26 1,577.44 7.3

7 BofA Secs 1 495.06 5.9 7 Kempen 1 11.22 1.1 7 Citigroup 7 1,180.70 5.5

8 Morgan Stanley 3 460.78 5.5 Total 4 1,052.92 8 HSBC 10 833.34 3.9

9 Goldman Sachs 5 385.14 4.6 9 Credit Suisse 6 807.69 3.7

Including all domestic and international deals and rights issues
10 Sparebank 1 SMN 12 381.81 4.5 10 Investec 11 713.69 3.3

Total 114 8,416.28 Total 216 21,624.33

Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues
Source: Refinitiv SDC code: C4c6 Source: Refinitiv SDC code: C4c4r Source: Refinitiv SDC code: C4c1r

International Financing Review July 4 2020 91

projects and non-essential spending,
payment holidays with suppliers and
deferral of aircraft orders and other
investments would not be enough to see it
through.
Although countries are starting to reopen
borders, the ramp-up phase is expected to
last until 2022 before demand is expected to
return to pre-coronavirus levels.
The airline will focus on its Scandinavian
3HARESûHADûENDEDûTHEûlRSTûDAYûOFûTRADINGû
on Tuesday nearly 17% above the SKr65
lXEDûPRICINGûONûITSû3+RMû53M û
Nasdaq Stockholm IPO. Shares ended Friday
at SKr82.
4HEûmOATûWASûCOVEREDûONûTHEûFULLûDEALûSIZEû
after just two days of bookbuilding.
Shares surged as much as 40% on debut
when under 1m shares changed hands,
representing 10% of the IPO offering.
UK
HIPGNOSIS TO RAISE £200m FOR
MUSIC PIPELINE
Music catalogue owner HIPGNOSIS SONGS FUND
has launched a £200m fundraising after
saying in June that it is in active discussions
over a pipeline of music catalogues totalling
FOOTPRINTûCONTINUEûmEETûRENEWALûBYûû Primary proceeds were SKr500m, with more than £1bn.
and carry out SKr4bn of cost savings by OWNERSû-ICAELû"ILEûANDû!NDREASû%NESKJOLDû The placing involves 200m new shares at
2022, including cutting up to 5,000 of its also selling a combined 2.3m shares. There 100p each, to be issued under the company’s
nearly 11,500 employees, and reducing sales is a 15% greenshoe, comprising mostly placing programme. There is also a separate
and marketing spending. PRIMARYûSTOCKûWITHûAûFREE
mOATûOFûûONû PrimaryBid offer for retail investors for
The revised business plan has the backing full exercise. additional fundraising, capped at either €8m
of the governments of Sweden and A cornerstone tranche from (£7.2m) or 20% of the placing size.
Denmark as the company’s two largest Lansforsakringar Fondforvaltning, %XISTINGûSHAREHOLDERSûANDûOTHERûINVESTORSû
shareholders, and from third largest ,ANCELOTû!SSETû-ANAGEMENTû#APITALû can also participate in the PrimaryBid offer,
shareholder the Knut and Alice Wallenberg Research and Management, and Skandia with the company expecting to give
Foundation.
The rights issue totals SKr3.994bn and has
commitments totalling 81.5% of the deal.
Approximately SKr3bn is covered by pro
rata subscription commitments from the
Swedish and Danish government, and
SKr259m from KAW.
The capital increase comprises 3.44bn
new shares on a 9-for-1 basis at SKr1.16 per
share, a near 87% discount to the SKr8.885
Monday close.
&ONDERûTOOKû3+RMûOFûTHEûmOATû4HEREû
were around 8,000 new shareholders
through the IPO, which included a retail
tranche.
With approximately 70% going to the
cornerstone investors, there was not that
much stock left to go around, with 85% of
the deal going to the top 10 orders. The
deal was supported by mostly Swedish
money and international real-estate
specialists.
preference to existing shareholders.
The placing programme launched in
September comprised 1bn shares, with
230m issued the following month in a
£230m placing.
Proceeds from this fundraising are
expected to be deployed within three
months.
To-date, Hipgnosis has acquired 54
catalogues, comprising hit songs with a
track record of producing predictable and
The Swedish and Danish governments Pricing represented estimated 2021 price- RELIABLEûCASHmOWûVALUEDûATûaMûASûATû
will also put up SKr2bn for a directed share to-book on a pre-money basis of 1.2 and 1.1 March 31.
issue, also at SKr1.16, and subscribe for post-money versus peer Trianon trading at Although live music income streams have
SKr6bn of new hybrid notes.
SAS will hold talks with holders of its
3+RBNûlXED
RATEûBONDûISSUEûDUEû bookrunner with Swedbank/Kepler Cheuvreux.
November 2022 about a debt-for-equity
swap at 81.3% of par, and with holders of its
SKr1.5bn perpetual hybrids about
conversion into stock at 70.8% of par. The
meetings will take place on July 17.
The Swedish and Danish governments’
involvement is conditional on conversion of
the bonds and hybrid notes, as well as
APPROVALûBYûTHEû%UROPEANû#OMMISSIONûANDû
exemption from a mandatory bid obligation.
KAW’s participation is conditional on
participation by Sweden and Denmark.
The recapitalisation plan requires shareholder
APPROVALûATûANû%'-ûONû!UGUSTûû4HEûRECORDû
date for the rights issue is September 2, with
subscription running from September 7–22,
with a result on September 25.
SAS shares closed 12.55% lower at SKr7.77
on Tuesday, down 50% this year.
SEB is advising SAS and is global
coordinator of the recapitalisation plan.
Danske Bank and Swedbank are bookrunners
on the rights issue.
ûFORûûACCORDINGûTOû2ElNITIVûDATAû
Carnegie was global coordinator, and
particularly with consumers re-discovering
CALLIDITAS PARTIALLY EXERCISES
GREENSHOE AFTER STOCK POPS
Stockholm-listed biotech CALLIDITAS
THERAPEUTICS has partially exercised the
primary greenshoe on its US$90m Nasdaq
listing after its share price jumped last
week.
A total of 353,338 ADS, representing
706,676 new common shares, were
exercised. That amounts to just over half the
15% greenshoe option.
The greenshoe adds approximately
US$6.89m to proceeds that increase to
US$96.89m as a result. The company
placed 4.15m ADS at US$19.50 and
924,000 common shares at SKr89.70 in
the base deal.
The ADS closed below the issue price
EIGHTûTIMESûINûTHEûlRSTûTHREEûWEEKSûOFû
trading, but last Tuesday jumped 16.3% to
US$23.20. On the same day Jefferies initiated
been impacted by the coronavirus,
Hipgnosis believes it is well positioned,
classic hits. Annual results for the year to
March 31 are due on Friday.
Hipgnosis shares were up more than 6%
this year as of the 116p Wednesday close
and are up nearly 9% in the last month.
The placing and retail offer wraps up at
1pm on July 10.
JP Morgan and N+1 Singer are bookrunners
and brokers to Hipgnosis.
LIONTRUST RAISES £66m FOR ARCHITAS
UK BUY
Fund manager LIONTRUST ASSET MANAGEMENT
raised £66.17m in an intraday accelerated
bookbuild on Wednesday, backing its
purchase of the UK arm of investment
lRMû!RCHITASûFROMû&RENCHûINSURERû!8!û
for £75m.
The enlarged company will have assets
under management of £6.6bn.
An offering of 5.09m shares,
representing 9.17% of share capital, had
GENOVA PROPERTY UP A QUARTER
Shares in GENOVA PROPERTY GROUP ended up
more than 25% on Friday from its IPO price.
92
coverage with a target price of US$44 and
Stifel at US$28.
Stabilisation manager Citigroup was
bookrunner with Jefferies and Stifel on the
IPO.
International Financing Review July 4 2020
lXEDûPRICINGûOFûaûAûSLIMûûDISCOUNTû
to the £13.05 Tuesday close. BlackRock,
which has a stake of just over 10%,
subscribed for 500,000 shares in line with
its shareholding.

Liontrust shares rose through the day to
close at £14.15, up 8.4%. The stock is up 28%
in 2020.
Panmure Gordon was bookrunner.
FORTERRA RAISES £55m TO BUILD
BALANCE SHEET
Building products manufacturer FORTERRA
raised £55m on Wednesday evening in a
primary ABB run by Deutsche Bank and Numis.
The proceeds will strengthen the
brickmaker’s balance sheet and see it
through uncertainty in the housing market
in the UK during the coronavirus pandemic.
The extra cash will also position it for
EQUITIES AMERICAS
day-one double in the past seven days,
underscored the exuberant atmosphere in
AMERICAS the IPO market.
There was a big incentive to get as much
done now while there is a captive audience
UNITED STATES and before the election season threatens to
pull the rug from under the market, one
US ECM ROARS INTO SUMMER SENIORû%#-ûBANKERûSAID
Second-quarter earnings could slow
%ARNINGSûANDûTHEûLUREûOFûAûSUMMERûBREAKû follow-on activity in the coming weeks but
MIGHTûNORMALLYûSTARTûTOûSLOWû53û%#-û maybe only a little because companies can
ACTIVITYûAROUNDûTHISûTIMEûOFûYEARû3UFlCEûTOû ALWAYSûRELEASEûmASHûNUMBERSûAROUNDûAûDEALû
say there is nothing normal about 2020. launch.
With markets humming and deals S&P 500 constituents are expected to
working bankers do not expect the report a blended 43% decline in earnings
MOMENTUMûTHATûSAWû53û%#-ûVOLUMESûTOPûAû (but “only” an 11.7% decline in revenues),
opportunities as the market recovers and record US$184bn in the second quarter to ACCORDINGûTOû)"%3ûDATAûFROMû2ElNITIVû
increase how much it can borrow from banks. ease up much during the window starting quantifying the damage wrought by the
%XISTINGûSHAREHOLDERSûTHREWûTHEIRûWEIGHTû Monday and running through at least to shutdown of large swathes of the US
behind the transaction, with the book mid-August. economy during the period.
heavily skewed towards names already in
the register. This led to high concentration
with the top 15 orders taking more than 90%
of the offering.
%VENûHEDGEûFUNDSûTHATûTURNEDûUPûFORûTHEû
GOHEALTHûN#INOû4REANû)NSURANCEû'ROUPû
and Poseida Therapeutics are among ACCOLADE CHEERS INVESTORS WITH
prospective IPOs that could launch as soon DEBUT GAINS
as Monday.
!ûSPATEûOFû)0/ûlLINGSûINûRECENTûWEEKSûISûALSOû ACCOLADE drew strong demand for its Nasdaq
deal were mostly accounts already familiar hitting the new issue market could be about to )0/ûENABLINGûTHEûHEALTHCAREûANDûBENElTSû
with Forterra, a banker involved said. move into a much more frenetic phase. platform to increase the size of the offering
Wall-crossing took place in the days Thursday’s 139.3% debut gain for home by 14% to US$220.5m before staging an
before launch and led to full coverage from insurance disruptor Lemonade, the second impressive debut on Thursday.
INDICATIONSû#ALLSûWEREûALSOûHELDûWITHû
management to go through the rationale US EQUITIES US IPOs
behind the capital raise. BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
A total of 28.2m new shares were sold at Managing No of Total Share Managing No of Total Share
195p, a 5.6% discount to Wednesday’s close bank or group issues US$(m) (%) bank or group issues US$(m) (%)
of 206.5p. 1 Goldman Sachs 90 18,542.72 13.4 1 BofA Secs 15 1,893.87 11.0
The new shares increase Forterra’s share 2 Morgan Stanley 81 17,907.53 13.0 2 Morgan Stanley 15 1,798.65 10.4
capital by 14%. 3 JP Morgan 98 16,837.95 12.2 3 JP Morgan 14 1,788.85 10.4
All seven of Forterra’s directors 4 BofA Secs 95 15,498.70 11.2 4 Goldman Sachs 11 1,540.15 8.9
participated in the placing. 5 Citigroup 65 13,102.27 9.5 5 Jefferies 17 1,344.27 7.8
Shares in Forterra fell through the placing 6 Barclays 49 9,842.40 7.1 6 Credit Suisse 10 1,323.83 7.7
price on Thursday and closed down almost 7 Credit Suisse 39 5,827.19 4.2 7 Citigroup 13 1,302.60 7.5
10% at 186p. By Friday afternoon they had 8 Jefferies 61 3,824.77 2.8 8 Barclays 7 851.48 4.9
fallen further to 176p each. 9 Evercore Partners 24 3,513.08 2.5 9 Cowen 9 838.28 4.9
10 Wells Fargo 44 3,444.40 2.5 10 Evercore Partners 5 669.99 3.9
WHEELS COME OFF ASTON, AGAIN Total 400 138,222.64 Total 43 17,266.38
Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues
On Monday it looked like ASTON MARTIN Source: Refinitiv SDC code: C3r Source: Refinitiv SDC code: C6
LAGONDA had recovered from the previous
session’s £152m primary ABB at 50p, but US SECONDARY OFFERINGS LATIN AMERICA EQUITY, EQUITY-RELATED
shares fell below that level on Tuesday and BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020
ended the week even lower. Managing No of Total Share Managing No of Total Share
Shares rallied to a close of 53p on Monday bank or group issues US$(m) (%) bank or group issues US$(m) (%)
having held just above pricing the previous 1 Goldman Sachs 79 17,002.57 14.1 1 Morgan Stanley 5 1,352.8 13.2
week. 2 Morgan Stanley 66 16,108.88 13.3 2 Banco Bradesco 11 1,335.6 13.0
Shares touched 55.1p in Tuesday 3 JP Morgan 84 15,049.10 12.4 3 XP Investimentos 6 981.1 9.6
morning’s session but soon returned to a 4 BofA Secs 80 13,604.83 11.2 4 BofA Secs 4 932.9 9.1
familiar pattern. The stock reversed to end 5 Citigroup 52 11,799.66 9.8 5 Banco do Brasil 5 909.3 8.9
the day at 49.4p, ensuring that the carmaker 6 Barclays 42 8,990.93 7.4 6 Goldman Sachs 4 894.2 8.7
extended its remarkable record of 7 Credit Suisse 29 4,503.36 3.7 7 Credit Suisse 4 840.9 8.2
delivering losses following its IPO, rights 8 Wells Fargo 37 2,965.40 2.5 8 Citigroup 2 766.7 7.5
ISSUEûBRIEmYûINTRADAY ûRUMPûPLACINGûANDû 9 Evercore Partners 19 2,843.08 2.4 9 Itau Unibanco 10 765.7 7.5
NOWûlRSTûACCELERATEDûFUNDRAISING 10 Deutsche Bank 12 2,650.92 2.2 10 Banco BTG Pactual 9 548.4 5.4
By the end of the week shares were at Total 357 120,956.27 Total 18 10,248.7
47.2p, handing investors a 5.6% loss on the Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues

ABB after one week. Source: Refinitiv SDC code: C8ar Source: Refinitiv SDC code:C1f

International Financing Review July 4 2020 93

 Lemonade IPO leaves sweet taste for SoftBank
„ US Tech-enabled home insurer doubles on NYSE debut
LEMONADE underscored the exuberant
atmosphere in the US IPO market when its
shares doubled on debut on Thursday even after
upping the asking price during the marketing
phase to boost proceeds to US$319m.
The SoftBank-backed “insurtech” drew 25
times-plus demand for the sale of 11m primary
shares at US$29.00, above a US$26–$28 range
upped from US$23–$26 on the morning before
it was due to be priced.
Goldman Sachs, Morgan Stanley, Allen & Co
and Barclays were joint bookrunners.
In its opening NYSE session, Lemonade
shares surged 139.3% to US$69.41, a move that
surprised even bankers close to the deal.
“I don’t know if Lemonade can hold these
levels but it may be able to grow into this
valuation over time,” one syndicate banker
said.
It was the second US IPO in a week to jump
more than 100% on debut, the other being
Chinese communications software company
Agora.
A syndicate led by Goldman Sachs, Morgan
4ûDRUGSûINûCLINICALû ACCELERON FUELS UP ON EQUITY
Stanley and Bank of America late on
Wednesday priced the sale of 10.02m shares,
up from 8.75m at launch, at US$22, above
the US$19–$21 marketing range.
)NûlRST
The gains attributed Lemonade a market
capitalisation of US$3.8bn versus run-rate
sales of about US$100m (mainly net earned
premiums) based on its most recent quarterly
results.
SQUEEZE
The intentionally limited supply of stock partly
drove investor enthusiasm.
Asset manager Baillie Gifford agreed from the
outset to buy US$100m of shares in the offering.
“With Baillie Gifford buying a third of the deal,
it created a technical squeeze,” the banker said.
The commitment limited the free-float to just
13% of outstanding.
Co-founded by Daniel Schreiber and Shai
Wininger in 2015, Lemonade is a loss-making
provider of home and renters insurance mostly
to under 35s.
The company uses data analytics to effectively
price insurance and assess risk and cedes 75%
of its premiums to reinsurers to help smooth its
results.
DEVELOPMENTûOFûITSû#!2
trials and, eventually, commercial sales.
Joint bookrunners Goldman Sachs, Bank of
America and Jefferies placed 6.43m primary
shares at US$70.00 each on Tuesday night
The final IPO terms represented a down-
round versus a US$300m private funding round
at US$42.21 last year, though the company’s
spectacular debut quickly made that academic.
SoftBank, the Japanese conglomerate led by
Masayoshi Son, holds 21.8% post-IPO, while VC
Sequoia Capital is an 8.3% shareholder.
The level of demand for Lemonade shares
was all the more surprising given the company
seemed to have delayed the IPO amid less than
ideal conditions last year.
Lemonade first filed confidentially in June last
year in anticipation of going public later in 2019.
It had to cool its heels as investors turned
against so-called unicorns (private tech
companies valued at more than US$1bn), most
notably forcing the abandonment of the IPO of
WeWork, another SoftBank investment.
“I thought people were a little sceptical about
it, but in the IPO market now all you have to do
is participate and the performance is there,” one
banker away from the deal said.
Anthony Hughes
ACCELERON PHARMAûCELEBRATEDûTHEû%5ûAPPROVALû
of its already FDA approved treatment for an
inherited form of anaemia last week by
DAYûTRADINGûONû4HURSDAYû!CCOLADEû after a day of marketing a deal originally raising US$450m from an upsized stock sale.
shares jumped 35% to US$29.70. sized as a US$325m offering. JP Morgan, SVB Leerink, Cowen, Barclays,
&OUNDEDûINûûANDûBACKEDûBYû6#ûlRMSû
including Andreessen Horowitz, Accolade
has 60 corporate customers comprising
1.7m members and generates contractually
recurring per-member-per-month fees to
help them navigate the US healthcare
system to keep costs down.
Accolade was “a good business with a big
TAM and more fairly priced” than other
recent tech IPOs, one banker close to the
deal said.
The IPO terms attributed Accolade a
market cap of about US$1.1bn and left it
with nearly US$300m of cash versus sales of
US$132.5m for the year ended February 28
#2)302ûSHARESûFELLûûTOû53û
while the deal was being marketed but
recovered quickly on Wednesday, setting
a new record high of US$81.09 before
closing at US$78.50.
#2)302ûUNVEILEDûPLANSûLASTûWEEKûTOûBUILDûAû
new cell therapy manufacturing facility in
Massachusetts and hire up to 100 full-time
employees.
That announcement capped a series of
recent successes in clinical trials that
highlighted the long-held potential of
#2)302SûREVOLUTIONARYûGENEûEDITINGû
technology.
)NûWHATûWASûTHEûlRSTûCLINICALûTESTINGûOFû
Credit Suisse and Piper Sandler placed 4.86m
shares at US$92.50, a 3.7% all-in discount
after two days of marketing and up from the
US$400m target at launch.
Acceleron shares rose 1.1% to US$96.28 at
Wednesday’s close.
2EBLOZYLûWASûlRSTûAPPROVEDûBYûTHEû&$!ûINû
April for patients with beta thalassemia that
would otherwise have to manage their
anaemia through blood transfusions.
Though Reblozyl does not eliminate the
need for blood transfusions, patients taking
the drug in a Phase III trial were able to go
for 12 weeks or more without needing
transfusions.
2020.
Though the latter represented year-on-
year growth of 40%, the company lost
US$51.4m in the same period.
CRISPR THERAPEUTICS RAISES US$450m
FOR CAR-T BUILDOUT
Biotech CRISPR THERAPEUTICS landed US$450m
last week from an upsized follow-on stock
sale to help fund construction of a new
manufacturing facility to support
94
#2)302ûGENEûEDITINGûINûHUMANSû#2)302û
released data earlier this month from a
Phase I/II trial on two patients of a potential
CUREûFORûSICKLEûCELLûDISEASEû3#$ ûANDûBETAû
thalassemia, two inherited forms of
anaemia.
4HEûPATIENTûBEINGûTREATEDûFORû3#$ûWASû
able to stop receiving blood transfusions
after 15 months on the drug and the beta
THALASSEMIAûPATIENTûAFTERûlVEûMONTHS
#2)302ûISûCOLLABORATINGûWITHû6ERTEXû
Pharmaceuticals on the anaemia drug.
International Financing Review July 4 2020
Acceleron developed the drug in a
collaboration with Bristol-Myers Squibb,
which is overseeing the commercial launch.
The agreement is potentially lucrative for
Acceleron and could provide about
US$145m in sales by 2022 in the form of
milestone payments and royalties,
ACCORDINGûTOû(#û7AINRIGHTûRESEARCHû
analysts.
The proceeds from last week’s offering
and future income from Reblozyl will help
fund other drugs in Acceleron’s pipeline.

NEOLEUKIN WARRANTS ATTENTION
NEOLEUKIN THERAPEUTICS, a pre-clinical
developer of cancer drugs, continues to rely
on a thin layer of investors as evidenced by
the disappointing outcome of its US$76.3m
equity raise last week.
Neoleukin shares closed on Thursday’s
trading at US$14.00, 8.2% below the
ûONû*UNEû ago period, but its net loss narrowed and
put it to bed,” one banker close to the deal
said.
The latest in a string of stock sales by US
restaurant chains during the pandemic,
Denny’s capitalised on a more than doubling
of its share price from a March 18 low of
US$4.50.
Denny’s hinted at an equity offering
WHENûITûlLEDûANû3
EQUITIES AMERICAS
ORDERSû4RAVEL#ENTERSûTEMPORARILYûCLOSEDû
most of its full-service restaurants and
limited product offerings at some
restaurants and travel stops.
In April, the company also furloughed
3,000 employees.
In the two months through May 31, sales
and non-fuel margins fell versus the year-
US$15.25 offer price on the 5m new shares
sold and versus the US$17.01 last sale on
Wednesday.
Bank of America, Piper Sandler and
Guggenheim Securities had marketed the deal
overnight at US$15.25–$16.00.
Of the 5m shares sold, 1.7m were in the
form for pre-funded warrants, a telltale sign
of heavy reliance on top shareholders – any
holder above 9.99% is deemed an insider and
therefore required to disclose any future
stock sales or purchases.
TIMEûSECONDARYûOFFERINGûTHATûWASû
.EOLEUKINSûlVEûLARGESTûSHAREHOLDERSû
TO
OFFERûDISCOUNTûINû downsized after the stock fell hard on news
owned a combined 45.1% stake, led by
lifescience specialists Redmile Group
)NûANû3%#ûlLINGû$ENNYSûREVEALEDûTHATû
94% of its restaurants were open as of June
10 but system-wide same store sales were
down 40% year-on-year in the most recently
reported week (the week ended June 10).
This is a vast improvement on the 79%
decline in late March/early April.
TRAVELCENTERS SLUMPS ON US$85.4m
STOCK SALE
Truck-stop operator TRAVELCENTERS OF AMERICA
TOOKûAûHEFTYûûlLE
order to raise US$85.4m of fresh equity, the
latest step in new management’s
FREEûCASHmOWûIMPROVED
The company had reopened 76 of the 169
full-service and quick-service restaurants
that were partially or fully closed in recent
months.
SUNNOVA DOWNSIZES SECONDARY TO
US$100.3m
SUNNOVA ENERGY INTERNATIONAL‘s private equity
backers cut their stakes via a US$100.3m
lRST
of the deal.
After two days of marketing, a syndicate
 û%CO2û#APITALû ûANDû"AKERû turnaround efforts. led by JP Morgan, Bank of America, Credit Suisse
"ROTHERSû ûACCORDINGûTOû2ElNITIVûDATAû
Neoleukin had previously issued 10.9m
prefunded warrants, nearly one-third of
TO
OFFERûDISCOUNT
outstanding upon conversion, as part of
EARLIERûlNANCINGû
After two days of marketing, joint
bookrunners Citigroup, BMO Capital Markets,
B. Riley FBR and BTIG priced the sale of 6.1m
4RAVEL#ENTERSûSHARESûORûMOREûTHANûûOFû
expanded shares outstanding at US$14.00
and Goldman Sachs priced the sale of 6.1m
Sunnova shares, down from 8m at launch, at
53ûORûAûûlLE
4HEûOFFERINGûSAWû%NERGYû#APITALû0ARTNERSûSELLû
5.1m shares to leave it with 33m shares or 39%
This is not all bad news for Neoleukin and
its shareholders – any losses are only on
paper and concentrated with existing
holders.
Neoleukin has been on a tear since
ûLOWSûINûMID
-ARCHûTOûAû
WEEKû deal said. “They wanted to start the
announcing plans last month to showcase
development of its de novo protein
each, well below the stock’s pre-launch
close of US$21.88.
4RAVEL#ENTERSûWASûTAKINGûADVANTAGEûOFûAû
bounce in its stock price from US$5.51 at the
#OVID
high of US$23.26 in late June just ahead of
the launch of the offering.
WHILEû4ORTOISEû#APITALû!DVISORSûSOLDûû
shares to leave it with 1.65m shares or 1.9%.
h%NERGYû#APITALû0ARTNERSûREMAINSûVERYû
bullish on the company,” a banker on the
divestiture process, but were not interested
in selling as many shares at these levels.”
therapeutics. Ahead of the June 15
COVEREDûAFTERûTHEûlRSTû
announcement, its shares traded at
US$12.80 and at US$15.59 after the
presentation a week later.
Neoleukin now has US$215m of cash. It
plans to seek regulatory approval later this
year for a Phase I trial of its lead cancer drug.
5NDERûNEWû#%/û*ONATHANû0ERTCHIKû
4RAVEL#ENTERSûISûLOOKINGûTOûBECOMEûAûLEANERû
operation, having in recent times sold its
convenience stores and franchised some of
its sites.
That effort has been complicated by
#OVID
4HEûDEALûWASûHALF
day of marketing (the shares fell 6.9% in that
session) but ended up three times covered at
the reduced deal size, another banker close
to the deal said.
The stock rebounded to US$17.51 in the
ûWHICHûFORCEDûTHEûCOMPANYûTOû
DENNY’S BETTER LATE THAN NEVER
WITH EQUITY RAISE
DENNY’S raised US$73.2m from an overnight
stock sale last week, becoming the latest
session after the offering priced.
conserve cash by pulling back its planned
2020 capex budget to US$62m from
US$118m.
Service Properties Trust (formerly
Hospitality Property Trust) and its external
manager RMR, which jointly own a 11.8%
h4HESEûSORTSûOFûDEALSûTENDûTOûlNDûTHEûRIGHTû
clearing price,” the second banker said.
3UNNOVAûlRSTûlLEDûCONlDENTIALLYûFORûTHEû
secondary in early March just before the
pandemic struck.
The stock’s dramatic slump from more
restaurant chain to raise equity to shore up
ITSûBALANCEûSHEETûWHILEûITûWEATHERSû#OVID
 shares in the offering to avoid dilution.
A syndicate led by Wells Fargo, SunTrust
Robinson Humphrey, Citizens Capital Markets
and Regions Securities priced the sale of 8m
shares or 12.6% of expanded shares
outstanding at US$9.15, the bottom of the
US$9.15–$9.60 marketing range and a 9.4%
discount to last sale.
The shares traded slightly below the
ûHASûHADûBOTHûAûPOSITIVEûANDû
offering price in Wednesday’s aftermarket
but rebounded above that mark in
Thursday’s session.
“There were a number of large anchor
orders and that pretty much allowed us to
STAKEûINû4RAVEL#ENTERSûPURCHASEDûû
US$6.12 on March 17 frustrated plans to
4HEûlNALûPROSPECTUSûALSOûREVEALEDûTHEû
syndicate went to extra lengths to support
the deal.
One of the banks bought 50,000 shares at
US$15.37 each on June 30 (the session ahead
of pricing) in “stabilising transactions”, the
lLINGûDISCLOSED
#OVID
The company has continued to install
NEGATIVEûIMPACTûONû4RAVEL#ENTERSû)TSûSITESûWEREû
deemed essential infrastructure and it initially
saw an increase in diesel fuel sales to truckers.
But demand for gas slumped in the
second half of March due to stay-in-place
International Financing Review July 4 2020
than US$20.87 on March 4 to as low as
bring the deal around that time.
Yet Sunnova staged a quick recovery to
US$18.85 just prior to the launch of the
offering.
The offering comes inside the 12-month
anniversary of Sunnova’s late July 2019 IPO,
which priced at US$12.00 a share.
residential solar systems during the
pandemic since this was deemed an
essential service in all its service territories.
3UNNOVAûALSOûGOTûSOMEûlNANCINGûDONEû
during the pandemic, raising US$130m from
95
Aûû#"ûSOLDûVIAûAûPRIVATEûPLACEMENTûINû
May and via the issuance earlier this month
of US$158.5m of solar loan-backed notes
through one of its subsidiaries.
!NALYSTSûNOTEûTHEûCOMPANYûREMAINSûCONlDENTû
OFûMEETINGûITSûPRE
In May AdaptHealth agreed to acquire
diabetes specialist Solara Medical for
US$425m (US$362.5m in cash and US$62.5m
in stock) and urology/incontinence specialist
ActivStyle for US$62m in an all-cash deal.
DEERFIELD HEALTHCARE TECHNOLOGY ACQUISITIONS
with Deutsche Bank and UBS as the joint
bookrunners.
GS ACQUISITION II LOWERS GEARING ON
#OVIDûûGUIDANCEûTHOUGHû Deutsche Bank advised AdaptHealth on US$700m IPO
without the pandemic it probably would have both M&A transactions.
exceeded those expectations. AdaptHealth already reached an GS ACQUISITION HOLDINGS II, a Goldman Sachs-
agreement with its bank lenders on a
FORMER SPAC ADAPTHEALTH RAISES US$240m expansion on its credit facility
US$124m WHILEû/NEû%QUITYû0ARTNERSûANDû$EERlELDû
Management are investing US$190m and
&ORMERû30!#ûADAPTHEALTH raised US$124m US$35m to help fund the purchases.
FROMûANûUPSIZEDûFOLLOW
AFlLIATEDû30!#ûPUTûTHEûWRAPSûONûITSû
US$700m IPO on Monday night after just
one day of public marketing.
GS Acquisition II marks a turn towards a
more aggressive, acquisition-friendly
ONûLASTûWEEKûITSûlRSTû The acquisitions, expected to close in the
public offering since its merger with DFB
Healthcare Acquisitions last summer.
Jefferies, Deutsche Bank and UBS placed 8m
shares at US$15.50 on Tuesday, an 8% all-in
discount after two days of marketing a deal
originally sized at 6.5m shares.
Investors easily absorbed 50 days’ new
trading volume as AdaptHealth soared 16.5%
to US$18.78 on Wednesday versus a
US$22.57 all-time high last month.
structure, with the underlying units
third quarter, offer cross-selling
opportunities as AdaptHealth looks to
expand its suite of in-home patient
monitoring devices.
The acquisitions are expected to add
53MûTOûADJUSTEDû%BITDAûINûû
$EERlELDûISûLOOKINGûTOûREPLICATEû
AdaptHealth’s success.
4HEûSPONSORûlLEDûDOCUMENTSûFORûAûNEWû
53Mû30!#û)0/ûAPPROPRIATELYûNAMEDû
structured as one-share and one-quarter
warrant, providing investors lower gearing
on acquisition.
GS Acquisition II had structured the
offering as one-share, one-third warrant on
THEûORIGINALûlLING
Bookrunners Goldman Sachs and Citigroup
priced 70m units at US$10 each. The
vehicle’s sponsors purchased 8m at-risk
warrants for US$2 each, slightly higher than

ECM DEALS: WEEK ENDING 3/7/2020

Stock Country Date Amount Price Deal type Bookrunner(s)
Home Consortium Australia 02/07/2020 A$140m A$2.88 Follow-on (Primary) Jarden, Goldman Sachs
XP Brazil 01/07/2020 US$830.2m US$42.50 Follow-on (Secondary) XP, Morgan Stanley, Goldman Sachs, JP Morgan
Ocumension Therapeutics China 03/07/2020 HK$1.55bn HK$14.66 IPO (Primary) Goldman Sachs, Morgan Stanley
Redsun Services China 29/06/2020 HK$415m HK$4.15 IPO (Primary) ABC International
Shenzhen Hepalink Pharmaceutical China 30/06/2020 HK$4bn HK$18.40 IPO (Primary) Goldman Sachs, Morgan Stanley
Smoore International China 03/07/2020 HK$7.1bn HK$12.40 IPO (Primary) CLSA
Viva Biotech China 02/07/2020 HK$1.06bn HK$8.15 Follow-on (Primary) CICC, JP Morgan
WuXi Biologics (Cayman) China 30/06/2020 HK$6.17bn HK$137 Follow-on (Primary) Morgan Stanley
Finnair Finland 01/07/2020 €511.7m €0.40 Rights issue Citigroup, Nordea
Flatex Germany 02/07/2020 €98.9m €43 Accelerated bookbuild (Secondary) Jefferies
Sosei Group Japan 02/07/2020 ¥5.3bn ¥1,595 Follow-on (Primary) BofA
Fjordkraft Norway 30/06/2020 NKr596m NKr74.50 Accelerated bookbuild (Secondary) ABG Sundal Collier
Polymetal Russia 30/06/2020 £198m £15.75 Accelerated bookbuild (Secondary) Morgan Stanley
Hugel South Korea 30/06/2020 W106bn W471,562 Follow-on (Secondary) NH Investment and Securities
IGIS Residence REIT South Korea 01/07/2020 W89.5bn W5,000 IPO (Primary) Samsung Securities
Genova Property Group Sweden 29/06/2020 SKr650m SKr65 IPO (Primary, Secondary) Carnegie, Swedbank/Kepler Cheuvreux
CRISPR Therapeutics Switzerland 30/06/2020 US$450m US$70 Follow-on (Primary) Goldman Sachs, Bank of America, Jefferies
Forterra UK 30/06/2020 £55m 195p Accelerated bookbuild (Primary) Deutsche Bank, Numis
Liontrust Asset Management UK 01/07/2020 £66.17m £13 Accelerated bookbuild (Primary) Panmure Gordon
Acceleron Pharma US 30/06/2020 US$450m US$92.50 Follow-on (Primary) JP Morgan, SVB Leerink, Cowen, Barclays,
Credit Suisse, Piper Sandler
Accolade US 01/07/2020 US$220.5m US$22 IPO (Primary) Goldman Sachs, Morgan Stanley, BofA
AdaptHealth US 30/06/2020 US$124m US$15.50 Follow-on (Primary) Jefferies, Deutsche Bank, UBS
BioLife Solutions US 01/07/2020 US$75m US$14.50 Accelerated bookbuild (Primary) Cowen, Oppenheimer, Stephens
Capstar Special Purpose Acquisition US 01/07/2020 US$240m US$10 SPAC IPO (Primary) Citigroup, UBS, BTIG
Chiasma US 30/06/2020 US$70m US$4 Accelerated bookbuild (Primary) Jefferies, Piper Sandler, Cantor
Denny’s US 30/06/2020 US$73.2m US$9.15 Accelerated bookbuild (Primary) Wells Fargo, Citizens CM, Regions Securities
Dun & Bradstreet US 30/06/2020 US$1.72bn US$22 IPO (Primary) Goldman Sachs, BofA, JP Morgan, Barclays
GS Acquisition Holdings II US 29/06/2020 US$700m US$10 SPAC IPO (Primary) Goldman Sachs, Citigroup
II-VI US 01/07/2020 US$400m US$43 Follow-on (Primary) Bank of America, JP Morgan, Citigroup
Innovative Industrial Properties US 29/06/2020 US$225m US$83.85 Accelerated bookbuild (Primary) BTIG
Lemonade US 01/07/2020 US$319m US$29 IPO (Primary) GS, Morgan Stanley, Allen & Co, Barclays
Liquidia Technologies US 29/06/2020 US$75m US$8 Accelerated bookbuild (Primary) Jefferies
Neoleukin Therapeutics US 01/07/2020 US$76.3m US$15.25 Accelerated bookbuild (Primary) BofA, Piper Sandler, Guggenheim Securities
Panacea Acquisition US 30/06/2020 US$125m US$10 SPAC IPO (Primary) Cowen
Sunnova Energy International US 30/06/2020 US$100.3m US$16.50 Follow-on (Secondary) JP Morgan, BofA, Credit Suisse, Goldman Sachs
TravelCenters of America US 30/06/2020 US$85.4m US$14 Follow-on (Primary) Citigroup, BMO Capital Markets, B. Riley FBR, BTIG

96 International Financing Review July 4 2020

 EQUITIES AMERICAS

THEû53ûONûTHEûORIGINALûlLINGûTOûHELPû LIQUIDIA POURS US$75m OF EQUITY during the transition to the subscription
fund the trust proceeds. revenue model preferred by investors.
Before the public launch, the banks were LIQUIDIA TECHNOLOGIES paved the way for the Sponsor-backed software IPOs in recent
oversubscribed and were multiple-times COMMERCIALûLAUNCHûOFûITSûlRSTû&$!
APPROVEDû YEARSûSUCHûASû#ERIDIANû(#-ûANDû$YNATRACEû
covered when they closed bookbuilding. drug by raising US$75m last week from an have still proved big winners as software
'3û!CQUISITIONû))ûCLOSEDûITSû.93%ûDEBUTûONû overnight stock sale. multiples have returned to record levels in
Tuesday at US$10.51 on volume of just 9.7m Jefferies, the sole bookrunner, placed 9.3m recent months.
units. shares at US$8 after overnight marketing at Subscriptions already comprised 78% of
)TûISûJUSTûTWOûMONTHSûAGOûTHATû#HAMATHû AûlXEDûPRICEûAûûDISCOUNTûFORûANûEQUALû Jamf’s revenue last year, up from 68% in
0ALIHAPITIYASû3OCIALû#APITALû))ûANDû)))ûOPTEDû percentage of shares outstanding. 2018 and with the balance being services
to reverse gearing from one-quarter to one- %SHELMANû6ENTURESû,IQUIDIASûTOPû and perpetual software licences.
third warrants in response to cooling shareholder, had indicated an interest in *AMFûlRSTûlLEDûCONlDENTIALLYûINû$ECEMBERû
market conditions.
ûLIKELYûDELAYEDû
Now, the momentum is going the other
WAYûWITHû"ILLû!CKMANSûRECENTLYûlLEDû
US$3bn Pershing Square Tontine Holdings
bifurcating warrants to one-third total, one-
ninth on the IPO and the remaining
two-ninths available to investors that vote in
favour of acquisition.
purchasing up to US$15m of the public
offering in order to protect its 18.2% equity
stake in the biotech.
Liquidia’s lead drug is currently under
FDA review as a potential treatment for
pulmonary arterial hypertension, a rare
breathing disorder that is caused by high
blood pressure in the lungs.
LASTûYEARûSUGGESTINGû#OVID
THEûPUBLICûlLINGûANDûITSûDEBUTûFROMûAû-ARCH
April timeframe.
An IPO as early as next month or in
August would still mark a quick turnaround
for Vista, which bought majority control of
Jamf in October 2017 for US$733.8m.
Jamf goes into the IPO carrying US$200m
3O#APû))ûWHICHûRAISEDû53MûINûITSû The FDA has until November 20 to rule on of total debt and had US$23m of cash at
April IPO, now trades at US$12.70; the larger the drug’s approval. March 31. The IPO proceeds will be used to
3O#APû)))ûATû53ûANDû6IRGINû'ALACTICû In anticipation, Liquidia intends to merge repay this debt, suggesting the offering will
3O#APû) ûATû53
GS Acquisition II is a follow up to the GS
!CQUISITIONû(OLDINGSû)Sû30!#û4HEûDEBUTû
30!#ûRAISEDû53MûONûITSû*UNEûû)0/û
and went onto acquire IT provider Vertiv
Holdings in February for US$5.3bn, partially
WITHû2ARE'ENûAûlRMûTHATûSPECIALISESûINû
marketing newly approved treatments for
rare diseases, in an all-stock deal by the end
of this year.
Jefferies advised Liquidia on the merger,
which is due to close in the fourth quarter.
be at least US$200m.
CHIASMA MIASMA
Winning FDA approval of its acromegaly
drug last month was a pyrrhic victory for
FUNDEDûWITHûAû53BNû0)0%ûTHEûTHIRD
!TûTHISûPOINTû0"-û#APITALûWILLûBECOMEûAûTOPû CHIASMA, which faced the challenge last week
LARGESTû0)0%ûBYûAû30!# shareholder of Liquidia, along with of funding the drug’s commercial launch, at
GS Acquisition II has a broad mandate to %SHELMANûANDûWILLûHAVEûAûNOMINEEûONûTHEû the expense of diluting its shares at knock-
target acquisitions spanning industrial, board of directors. down prices.
healthcare, TMT and alternative asset #HIASMAûRAISEDû53MûEQUITYûFROMûANû
MANAGEMENTûVERTICALSûTHOUGHûlNANCIALû VISTA SEEKS MONEY FOR JAMF overnight stock sale on Tuesday. Jefferies,
SERVICESûHAVEûBEENûSPECIlCALLYûCARVEDûOUT Piper Sandler and Cantor tried to mitigate
Aside from the one-third warrants, GS 3OFTWARE
FOCUSEDûPRIVATEûEQUITYûlRMû6ISTAû DILUTIONûWHILEû#HIASMAûSHARESûAREûTRADINGûATû
Acquisition is typically structured with 100% %QUITYû0ARTNERSûWILLûBEûHOPINGûTOûREPEATûTHEû distressed prices.
of IPO proceeds held in trust, a 24-month success of last year’s Ping Identity IPO by They offered investors a mix of 12.5m
investment horizon, and warrant bringing another of its portfolio companies shares of common stock and 5m pre-funded
redemption above US$18 per share after an to public markets as soon as this month. warrants at US$4.00, a hefty 25% discount to
acquisition. JAMF HOLDING, an enterprise management the US$5.38 last sale.
The vehicle is chaired by Raanan Agus, cloud software platform for Apple products Investors often use the warrants to avoid
THEûGLOBALûCO
HEADûANDûCO
#)/ûOFû'3!-Sû and apps that grew revenues 37% to tripping the 9.99% threshold that would
alternative investments and manager 53MûANDûREPORTEDûADJUSTEDû%BITDAûOFû make them insiders, and therefore required
selection group, with GSAM head of 53MûINûTHEûlRSTûQUARTERûPUBLICLYûlLEDû to disclose any future stock sales or
permanent capital strategies Tom Knott as on June for a US$100m IPO (likely a purchases.
chief executive. placeholder sum). #HIASMAûISûUSINGûTHEMûTOûLIMITûDILUTIONû
Former US senator William Frist, now Founded in 2002, Jamf is yet to choose an until its stock price either recovers or it gets
AûPARTNERûATû0%ûlRMû#RESSEYûû#OMPANYû
lRMû bought out.
FORMERû0EPSI#Oû#%/ûANDûCHAIRMANû
Steven Reinemund, former NBA player
David Robinson, and former Sensata
4ECHNOLOGIESû#%/û-ARTHAû3ULLIVANû
round out GS Acquisition II’s board of
directors.
GS Acquisition II is a bet on the
investment banking prowess of Goldman
EXCHANGEûBUTûISûWORKINGûWITHûAû
syndicate led by Goldman Sachs, JP Morgan,
Bank of America and Barclays.
0INGûWASû6ISTASûlRSTû)0/û'OLDMANûWASû
lead-left on that one too), more than
doubling since it went public at US$15.00 in
September last year. Vista was able to cut its
Ping holding in a secondary last month.
Ping ranked as one of the few software
4HEûLATTERûSEEMSûMOREûLIKELYûASû#HIASMAû
prepares for the commercial launch of its
acromegaly drug, called Mycappsa, later this
year.
h7EûBELIEVEûTHATû#HIASMAûPROVIDESûAû
favourable risk reward following approval
and foresee takeover interest from
pharmaceutical companies as launch
Sachs. IPOs in recent years that did not price at the ADVANCESvûSAIDû"ROOKLINEû#APITALû-ARKETSû
Unlike GS Acquisition I, which had top end of the original range or above (it analaysts in a note to their clients.
ENLISTEDûEX
(ONEYWELLû#%/û$AVIDû#OTEûATû priced at the midpoint). û&ORûNOWû#HIASMAûHASûMOREûTHANû
the time of its IPO, GS Acquisition II lacks Leveraged-backed software IPOs are often US$140m of cash to ramp up production of
SPECIlCûMANAGEMENTûWITHûDIRECTûINDUSTRYû LOWERûGROWTHûTHANûYOUNGERû6#
BACKEDû Mycapssa.
EXPERTISEû4HEûPLANûISûTOûHIREûAûNEWû#%/û software companies, often because of 4HEûDRUGûISûTHEûlRSTûORALûTHERAPYûTOûBEû
after an acquisition. declining legacy licensed software sales FDA approved for acromegaly, an inherited

International Financing Review July 4 2020 97

disease that causes an uncontrolled release CONGLOMERATESûlRSTûSTOCKûSALEûSINCEûGOINGû "$2SûCAMEûATûSIGNIlCANTûPREMIUMûTOûTHEû
of growth hormones, as opposed to public in December. TSX reference.
injectable drugs that have been the standard The all-secondary sale of 19.5m shares Trading on Brazil’s B3 exchange is
treatment for acromegaly. INCREASEDû80SûFREE
mOATûTOûMûSHARESûJUSTû scheduled to begin on Monday.
û"ROOKLINEûANALYSTSûESTIMATEû#HIASMASû
worth at US$17.00 a share, based on
Mycapassa’s market opportunity, though it
certainly could fetch more in a buyout.
CANNABIS REIT DEFIES SECTOR WOES
INNOVATIVE INDUSTRIAL PROPERTIES returned to
sell an upsized US$225m of equity just a
month after its last stock sale.
4HEû.93%
20% of outstanding.
General Atlantic, an early investor, sold
14.5m shares to reduce its stake to 10.9% and
management the other 5m, reducing their
combined stake to 22%. Notably, as was the
case on XP’s US$2.25bn IPO, Itau Unibanco
held on to all its 254.1m shares (46.1%).
“There is a strong desire to place as much
of this with global institutions,” said a
banker involved. “Investors continue to
Aura sold 331,033 BDRs and selling
shareholders the remaining 626,090.
Aura chairman Paulo Brito is lending Itau
143,568 BDRs, or 15% of the offering, to help
stabilise trading.
With producing mines in Honduras,
Brazil and Mexico, the miner plans to use
the primary proceeds to help develop new
ANDûEXISTINGûMININGûPROJECTSû)NûTHEûlRSTû
quarter, the miner reported a net loss of
LISTEDûCANNABISû2%)4ûSHOWEDû WANTûTOûOWNû"RAZILûANDûlNANCIALûSERVICESû
again that it has ready access to capital
markets to fund its acquisition pipeline at a
time when many listed cannabis operators
are trading at a fraction of their 2018 highs
in part because of an oversupply of product.
Sole bookrunner BTIG priced the sale of
2.7m Innovative shares, up from 1.8m at
TO
OFFERûDISCOUNT
launch, at US$83.85, within the US$83.20–
$86.20 marketing range and a 7.3% discount
to last sale.
4HEûOFFERINGûEQUATEDûTOûûOFûTHEû2%)4
HEADQUARTEREDû!%8û'OLDûAIMSûTOû
Innovative remains well below its record
high of US$139.53 struck last July, but the
offering still came at prices well above the
US$74.16 mark on its late May offering (also
via BTIG) that raised US$115m.
According to a BTIG analyst report,
Innovative’s pipeline of potential real estate
acquisitions has expanded substantially in
the past month as cannabis operators look
US$17.7m on revenue of US$48.6m.
particularly tech-enabled, is a good way to
gain exposure.”
XP, Morgan Stanley, Goldman Sachs and JP
Morgan conducted two full days of marketing,
as is required of newly US-listed companies,
ahead of pricing a fully sized deal at US$42.50,
AûûlLE
Against a positive market backdrop, XP’s
Nasdaq-listed shares closed on Thursday
trading at US$45.00.
In conjunction with the deal launch, XP
pre-announced second-quarter results that
for adjusted net income of R$420m–
$520m on gross revenue of R$1.85bn–
$1.98bn, above the R$265m and R$1.5bn
consensus and representing year-over-year
growth of 106% and 155%, respectively.
AURA MINERALS MINES BRAZILIAN
EXCHANGE FOR MONEY
CANADA
AEX TO REOPEN GREENLAND MINE WITH
£45m AIM FLOAT CASH
Greenland-focused mining company AEX
GOLD is targeting a £45m AIM IPO, with
listing expected in late July.
4ORONTO
leverage its licences covering 3,356 square
kilometres in Greenland, building a full-
cycle gold mining company focused on the
Nanortalik and Tartoq gold belts.
Proceeds will be used to bring a Nalunaq
mine back into operation, having previously
produced approximately 350,000 ounces of
gold between 2004 and 2009. Nalunaq has
an updated inferred mineral resource
to meet rising demand. ASSUMEDûBUTûNOTûVERIlEDûTONNAGEûGRADEû
Including its rather modest US$67m IPO TSX-listed gold miner AURA MINERALS and mineral content) covering 422,770
in late 2016, Innovative has been a bankers’ COMPLETEDûITSû2Mû53M#M û tonnes at 18.5 grams of gold per tonne, or
dream, raising US$1.13bn of capital since "RAZILIANû)0/ûBECOMINGûTHEûlRSTûGOLDûMINERû more than 250,000 ounces of gold.
inception. to list on the country’s benchmark B3 !%8ûHASûALSOûIDENTIlEDûAûNEAR
MINEû
Buyers in the offering do not get the exchange. exploration target of between 2.5 million and
US$1.06 a share second-quarter dividend The listing marked the culmination of a 10 million tonnes at between 2.4–6 grams of
payable on July 15 to holders of record as of long and complicated process that was gold per tonne, representing between 200,000
June 30. POSTPONEDûINû-ARCHûDUEûTOû#OVID
 and 2 million ounces of gold.
On Wednesday morning, Credit Suisse, Itau, Drilling since 2017 has increased the
XP Investimentos and Safra priced 963,533 known extent of the gold mineralised
BRAZIL Brazilian depositary receipts (BDRs) at structure at Nalunaq. Production is based on
XP FLOATS HIGH ON US$830.2m
SECONDARY SELL-DOWN
XP INCreturned on Wednesday with a
US$830.2m secondary sell-down on behalf
of General Atlantic and management, the
FAST
2#ûAPIECEûTHEûBOTTOMûOFû
the R$820–$920 marketing range.
However, the actual offer price was based
ONûTHEû2#ûEXCHANGEûRATEûATû4HURSDAYSû
close.
Aura’s TSX-listed shares, which trade less
than 3,000 shares daily, closed Thursday
THEûESTIMATEûOFûMINERALûRESERVESûWITHû!%8û
intending to conduct a feasibility study
ahead of the commencement of operations.
Around £29m of proceeds is for
development of the Nalunaq mine, £6m is
for exploration, and £10m for general
corporate purposes, transaction costs and
GROWINGû"RAZILIANûlNANCIALûSERVICESû TRADINGûATû#2ûIMPLYINGûTHEû any additional contingencies.

EQUITY-LINKED DEALS WEEK ENDING: 3/7/2020

Issuer Country Date Amount Greenshoe Tenor Coupon/YTM % Premium (%) Bookrunner(s)
Webjet Australia 01/07/2020 €100m - 7 yrs 2.5 20 Goldman Sachs, HSBC
Outokumpu Finland 02/07/2020 €130m - 5 yrs 5.0 32.5 Citigroup, BNP Paribas, Credit Agricole,
SEB, Swedbank/Kepler Cheuvreux
Sosei Group Japan 30/06/2020 ¥16bn - 5 yrs 0.5 15 BofA
II-VI US 01/07/2020 US$400m US$60m 3 yrs 6.0 20 BofA, JP Morgan, Citigroup

98 International Financing Review July 4 2020

 STRUCTURED EQUITY

The IPO is due to complete by July 24, There is an investor put option in July At launch, the deal was indicated at
with a listing on July 29. 2024 and an issuer call after four years. 3.3m–4.9m primary shares in a ¥1,595–
&OUNDERûANDû#%/û%LDURû/LAFSSONûSAIDûTHATû
there was “strong support from important
stakeholders such as the Danish and
Greenland state development funds”.
Stifel Nicolaus Europe is bookrunner, broker
and nominated adviser, with Cormark
Securities and Paradigm Capital as co-
managers.
#ONCURRENTLYûTHEREûWASûAûDELTAûPLACINGûOFû
11m shares at A$3.41, a 4.5% discount to the
previous close.
Goldman Sachs was the sole global
coordinator, and joint bookrunner with HSBC.
JAPAN
SOSEI GROUP PRICES CB AND FOLLOW-ON
¥1,648 range.
Proceeds will be used to fund acquisitions
or investments in complementary
technology companies, expand drug
candidate discovery, license pipeline
products for the Japanese market, and for
research and working capital.
There is a 90-day lock-up for the company.
Bank of America was the sole bookrunner.

Biopharmaceutical company SOSEI GROUP FINLAND

STRUCTURED EQUITY has completed a ¥16bn (US$150m)
convertible bond and a ¥5.3bn follow-on to
fund growth.
AUSTRALIA 4HEûlVE
YEARûPUTûTWOû#"ûWASûPRICEDûATûTHEû
best terms for investors at the top of a 0.10%–
WEBJET RAISES €100m FROM 2.5% CBS 0.50% coupon range and the bottom of a
YEARûCONVERTIBLEû
15%–23% conversion premium range. The issue
Online travel company WEBJET has priced a price is 100 and the offer price is 102.5.
€100m convertible bond issue due 2027 at There is a call option after the third year if
the top of a 2%–2.5% coupon range. the prevailing stock price is higher than
4HEûINITIALûCONVERSIONûPRICEûHASûBEENûlXEDû 130% of the conversion price.
EQUITY-LINKED GIVES OUTOKUMPU A
€130m BOOST
Finnish stainless steel producer OUTOKUMPU
RAISEDûõMûTHROUGHûlVE
bonds on Thursday evening, following a
lengthy three days of pre-sounding.
A banker involved said that the steel sector
presents a fair number of challenges as prices
and demand are falling across the world
at A$4.092, a 20% premium to the reference #ONCURRENTLYûTHEûGROUPûHASûISSUEDûMû EXCEPTûFORû#HINAûWHICHûCONTINUESûTOûBEû
share price of A$3.41. The conversion shares at ¥1,595 each, or an 8% discount to involved in a trade war with the US. However,
premium was marketed at 20%–25%. the pre-deal close of ¥1,734. Outokumpu is the number one player in
STAINLESSûINû%UROPEûANDûNUMBERûTWOûINûTHEû53û
GLOBAL CONVERTIBLE OFFERINGS GLOBAL CONVERTIBLE OFFERINGS – US and management spoke to investors, a
BOOKRUNNERS: 1/1/2020–30/6/2020 BOOKRUNNERS: 1/1/2020–30/6/2020 RELATIVELYûRAREûPARTûOFû#"ûMARKETING
Managing No of Total Share Managing No of Total Share 4HEûCOMPANYSûHEADWINDSûAREûREmECTEDûINû
bank or group issues US$(m) (%) bank or group issues US$(m) (%) its rating. Moody’s downgraded Outokumpu
1 JP Morgan 68 13,323.51 14.1 1 Goldman Sachs 46 9,785.73 17.5 to B3 from B2 at the end of March and
2 Goldman Sachs 64 13,057.70 13.8 2 JP Morgan 47 9,457.30 16.9 changed its outlook to negative.
3 BofA Securities 54 10,750.72 11.4 3 BofA Securities 44 9,251.68 16.6 The terms demanded by convertible
4 Morgan Stanley 53 10,562.22 11.2 4 Morgan Stanley 40 8,233.77 14.8 investors were tough, but the company got
5 Citigroup 33 5,909.55 6.3 5 Citigroup 22 3,675.66 6.6 the funds it wanted within the marketed
6 Barclays 22 3,452.32 3.7 6 Wells Fargo 17 2,795.28 5.0 ranges.
7 Credit Suisse 21 2,957.87 3.1 7 Credit Suisse 13 2,238.43 4.0 Outokumpu is not new to equity-linked
8 Wells Fargo 17 2,795.28 3.0 8 Barclays 15 2,089.84 3.7 but its most recent issue matured in
9 UBS 15 2,250.94 2.4 9 RBC 7 834.30 1.5 February. The company has a €250m high-
10 BNP Paribas 12 1,989.76 2.1 10 Jefferies 8 734.73 1.3 yield bond maturing in 2024, which
Total 255 94,294.29 Total 97 55,817.14 provided the input for a credit assumption
Including exchangeables and domestic offerings. of 900bp, taking into account the straight
Source: Refinitiv SDC code: C9 Source: Refinitiv SDC code: C9a BONDûISûSECUREDûANDûTHEû#"ûISûNOTû

ALL INTERNATIONAL ASIAN CONVERTIBLES ALL INTERNATIONAL ASIAN CONVERTIBLES GLOBAL CONVERTIBLE OFFERINGS – EMEA
BOOKRUNNERS: 1/1/2020–30/6/2020 (EXCLUDING JAPAN) BOOKRUNNERS: 1/1/2020–30/6/2020
Managing No of Total Share BOOKRUNNERS: 1/1/2020–30/6/2020 Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
Managing No of Total Share
1 Goldman Sachs 4 1,455.78 16.6 bank or group issues US$(m) (%) 1 JP Morgan 13 2,707.10 19.1
2 UBS 7 1,370.77 15.6 1 Goldman Sachs 4 1,455.78 17.2 2 Goldman Sachs 12 1,623.69 11.4
3 Citigroup 6 1,127.81 12.8 2 UBS 7 1,370.77 16.2 3 Barclays 5 1,084.98 7.6
4 Morgan Stanley 6 1,121.18 12.7 3 Morgan Stanley 7 1,172.96 13.9 4 BNP Paribas 8 1,067.26 7.5
5 BofA Securities 3 818.65 9.3 4 Citigroup 6 1,127.81 13.4 5 Credit Agricole 6 897.57 6.3
6 JP Morgan 5 715.78 8.1 5 JP Morgan 5 715.78 8.5 6 Morgan Stanley 4 885.13 6.2
7 Credit Suisse 6 609.48 6.9 6 BofA Securities 2 666.18 7.9 7 HSBC 7 854.30 6.0
8 HSBC 3 325.78 3.7 7 Credit Suisse 4 515.00 6.1 8 Citigroup 3 740.24 5.2
9 CICC 3 225.00 2.6 8 HSBC 3 325.78 3.9 9 UBS 6 719.45 5.1
10 BNP Paribas 1 200.00 2.3 9 CICC 3 225.00 2.7 10 SG 6 661.63 4.7
Total 23 8,793.76 10 BNP Paribas 1 200.00 2.4 Total 29 14,204.16
Including exchangeables. Total 19 8,441.83
Including exchangeables.
Including exchangeables.
Source: Refinitiv SDC code: M10 Source: Refinitiv SDC code: M11 Source: Refinitiv SDC code: C09d

International Financing Review July 4 2020 99

 It has a market cap of just over €1bn and
around €1.2bn of debt, which is secured.
The bonds were offered with a decent
coupon of 4.25%-5.25% with a premium of
32.5%-37.5% over the reference price set in a
delta placing with a launch size of €50m.
On those marketed terms implied vol was
both wide and low at 17%-26.4% with
normalised historic vol typically around
40%, but running at around 60% due to
macro issues and the coronavirus.
The banker said that the focus for
investors was the equity upside so were
sensitive around the premium and the
achievable share price level.
The stock was down a relatively modest
8.7% for the year as of the €2.63 Thursday
close and the shares were trading just below
€3 a year ago.
Pricing was set at €2.47 in the delta placing, a
discount of 6.1% to the close, and there were
TAKERSûFORûTHEû@HAPPYûMEALûWITHûAûlNALûSIZEûOFû
€38m. The bonds priced towards best ends for
investors at a coupon of 5% and premium of
32.5% for a conversion price of €3.273.
The banker said that sizing and the sector
meant that this was not a deal for everyone,
but comfort was provided by knowledge of
supported by those pre-sounded and with a
good showing from Finnish and Nordic
investors as well as those already holding
the high-yield paper.
The bonds were trading around 101.5%-
102% around midday on Friday on an equity
neutral basis as the shares were down 6% at
€2.472.
Proceeds are for general corporate
purposes and for debt prepayment.
Citigroup was global coordinator, and
bookrunner with BNP Paribas, Credit Agricole,
SEB and Swedbank/Kepler Cheuvreux.
GERMANY
AUCTION OF WIRECARD CB THIS WEEK
Credit Suisse announced late on Thursday an
auction for the €900m 1.9% convertible
bonds issued by WIRECARD that are the
collateral for the €900m exchangeable
bonds issued by ARGENTUM into Wirecard last
October.
The convertibles were issued to SoftBank,
which concurrently recycled the risk into
the exchangeable. Argentum, a repackaging
SOUTH AFRICA
TENDER FOR €150m 1.5% REDEFINE EB
INTO PARENT
JP Morgan carried out a tender offer last
week for the €117.2m outstanding of South
African real estate group REDEFINE PROPERTIES‘
€150m 1.5% September 2021 exchangeable
bond into UK parent REDEFINE INTERNATIONAL.
The tender was priced at 101 plus accrued
interest, versus a bid/ask of 98.15/99.15 last
Monday. Interest due is an expected €464.67
per €100,000 of bonds.
The tender was conditional on reaching the
15% clean-up call, so €94.7m of bonds needed to
be secured. That threshold was expected to be
met as there were irrevocable commitments to
tender €90.4m of bonds from bondholders at
launch and by Friday afternoon more than 90%
of bonds had been tendered.
UNITED STATES
II-VI EQUALS US$800m RAISE
the name from its previous foray into PLATFORMû306 ûMANAGEDûBYû#REDITû3UISSEûISû II-VI, a maker of high-performance
EQUITY
LINKEDûNOTûFORGETTINGûTHEûSIGNIlCANCEû NOWûLIQUIDATINGûTHEûCONVERTû7IRECARDûlLEDû electronics for telecommunications, raised
of a supportive 21% shareholder in the for insolvency proceedings on June 25 and US$800m from the two-part sale of stock
Finnish government via state-owned the converts were accelerated on July 1. and mandatory convertible bonds.
holding company Solidium. 4HEûBIDDINGûPERIODûFORûTHEû#"ûAUCTIONûWILLû 4HEûlNANCINGûEQUALLYûSIZEDûBETWEENûTHEû
On pricing, implied was 19% and the bond be 10am to 2pm on July 8. Pricing will be set three-year mandatory plus straight equity,
mOORûûFROMû
ûGUIDANCE û2ElNITIVû VIAûAûMODIlEDû$UTCHûAUCTION follows the US$2.65bn acquisition late last year
calculations put fair value of the bonds at 110.7 Wirecard issued 1.9% convertibles due of optical networking gear maker Finisar.
using a 900bp spread and 40% vol. October 2024 that convert at €130 per share The purchase was initially viewed as a
One observer said that straight debt and were in the money before they were potential drag on the business, but it seems
would have needed a double-digit coupon to issued. The exchangeable paid a 0.5% it has not slowed II-VI’s momentum at all.
get done. coupon but was issued at 107 so the yield to II-VI, or two-six, continued an impressive run,
The top 10 investors took more than half maturity was –0.886%. The conversion price with stock up 40% this year and pre-announcing
of a very concentrated book, heavily was €229.3163, a 50% premium to the VWAP lSCALûFOURTH
QUARTERûûRESULTSûOFûEXPECTEDû
on the day they were sold. revenue of US$710m–$740m, well above both
EMEA CONVERTIBLE, LEGAL ADVISER TO ISSUER The process meant that SoftBank faced no the US$675m analyst consensus and
1/1/2020–30/6/2020 credit exposure to Wirecard, retained much management’s guidance of US$650m–$700m.
No of Total Share of the equity upside and walked away with Bank of America, JP Morgan and Citigroup set
Legal adviser issues US$(m) (%) cash due to proceeds of €963.9m on the pricing on Wednesday on 9.3m shares at
1 Davis Polk & Wardwell 2 1,591.0 11.2 exchangeable. 53ûAûSIZEABLEûûlLE
TO
OFFERû
2 Cleary Gottlieb 2 1,437.1 10.1 discount, and the mandatory at a 6%
Steen & Hamilton EMEA CONVERTIBLE, LEGAL ADVISER TO dividend and 20% conversion premium to
3 Morgan Lewis & Bockius 1 1,250.0 8.8 MANAGER the reference price on the common.
4 Arthur Cox 1 1,150.0 8.1 1/1/2020–30/6/2020 “The Finisar acquisition helped diversify their
=4 Carey Olsen 1 1,150.0 8.1 No of Total Share business, but also increased debt leverage,” said
6 Freshfields Bruckhaus Legal adviser issues US$(m) (%) ONEû#"ûFUNDûMANAGERûh)NVESTORSûWOULDûPREFERû
Deringer 1 810.6 5.7 1 Linklaters 6 3,162.3 22.3 THEMûTOûHAVEûMOREûmEXIBILITYv
7 Linklaters 2 793.8 5.6 2 Freshfields Bruckhaus 1 1,948.6 13.7 ))
6)ûWHICHûHASûAû53Mûû#"û
8 Latham & Watkins 1 400.0 2.8 Deringer maturing in 2022 that is convertible at
9 Homburger 1 359.7 2.5 3 Shearman & Sterling 1 1,250.0 8.8 US$47.06, is using proceeds to repay the
10 De Brauw Blackstone 1 323.3 2.3 4 Cahill Gordon & Reindel 1 1,150.0 8.1 US$716.4m drawn on a Term Loan B,
Westbroek 5 White & Case 2 633.9 4.5 reducing net leverage to US$1.1bn, or 3.6
=10 Fried Frank Harris 1 323.3 2.3 6 Hogan Lovells 1 189.7 1.3 TIMESû44-û%BITDA
Shriver & Jacobson 7 Bar & Karrer 1 181.7 1.3 II-VI is continuing momentum from the
Total 29 14,204.2 Total 29 14,204.2 March quarter that saw it post record
Including exchangeables and domestic. Including exchangeables and domestic. bookings of US$840m and end the quarter
Source: Refinitiv SDC code: AX7 Source: Refinitiv SDC code: AX8 with a record backlog of US$893m.

100 International Financing Review July 4 2020

BEFORE THE
MARKETS MOVE,
MAKE YOURS.
Stay ahead of the commodities markets with
real-time news, data and analytics in Eikon.
refinitiv.com
Clarity, increased.
For over 40 years, IFR has been clarifying the complex global
capital markets by providing intelligence on current deals and new
opportunities, along with reliable data and trusted opinions.

The IFR website at www.ifre.com has been redesigned. It now

features improved search capabilities, expanded navigation, powerful
personalization tools and a more intuitive layout. It combines IFR’s
industry-leading content from across all the global capital markets
asset classes onto a single, consolidated platform.

When you’re looking for clarity on the global capital markets, look to
the new IFR.

ifre.com/new-ifr-website
 INTERNATIONAL FINANCING REVIEW CONTACTS

EDITOR SENIOR REPORTERS: LONDON NEWS EDITORS TOKYO

Matthew Davies Fixed-income/Structured Finance: *ULIANû"AKERû Wakako Sato
+44 (0)20 7542 7504 Chris Moore +44 (0)20 7542 7432 +813 6441 1876
DEPUTY EDITOR +44 (0)20 7542 5018 DESK EDITORS REPORTER: LONDON
Equities/Structured equity: Fixed-income: Jon Penner 6INCENTû"ABY Prudence Ho
Owen Wild +44 (0)20 7542 7348 +852 2912 6612 +44 (0)20 7542 2875
+44 (0)20 7542 8541
NEW YORK )ANû%DMONDSON NEW YORK
AMERICAS BUREAU CHIEF +44 (0)20 7542 9703 Daniela Guzman
Fixed-income: -ILUSKAû"ERROSPI
Jack Doran +1 646 223 7586 +1 646 223 6667
David Holland
+1 646 223 6302
People & markets: Philip Scipio +852 2912 6676 Andrew Hedlund
ASSOCIATE EDITORS +1 646 223 5558
+1 646 223 8767 CHIEF SUB-EDITOR
Features and analysis: Gareth Gore
HONG KONG Richard Stanbury Sasha Padbidri
+44 (0)20 7542 4279
People & markets: 4HOMASû"LOTT EDITORIAL ASSISTANT
+1 646 223 4442
US editor: Stephen Lacey +852 2841 5878 Anna Farish PRINT/WEB PRODUCTION, LONDON
+1 646 223 8808
Fixed-income: Carol Chan +44 (0)20 7542 3474 Head of production: Clive George
Fixed-income, Emerging markets: +852 2912 6604 +44 (0)20 7542 3869
LOANS EDITOR
Sudip Roy
SYDNEY Chris Mangham IFR production manager:
+44 (0)20 7542 4617
Fixed-income: John Weavers )&2û!SSOCIATEû%DITOR Carole Styles
People & markets: Steven Slater +612 9373 1655 +44 (0)20 7542 3582 !NDREASû-ICHAELû.ITAû7EBBû
+44 (0)20 7542 4367
TOKYO BUREAU CHIEF: LONDON Gavin White
Green/ESG Financing Editor: Claire Ruckin
Fixed-income: Takahiro Okamoto GLOBAL HEAD – ADVERTISING &
Tessa Walsh +813 6441 1773 +44 (0)20 7542 1891 SPONSORSHIP SALES
+44 (0)20 7542 4048
REPORTERS: LONDON BUREAU CHIEF: HONG KONG Shahid Hamid
Derivatives: Christopher Whittall Fixed-income: Edward Clark Prakash Chakravarti +65 9755 5031
+44 (0)20 7542 3256 +852 2912 6671
+44 (0)207 542 7630 ADVERTISING & SPONSORSHIP
MANAGING EDITOR
Fixed-income: Eleanor Duncan BUREAU CHIEF: NEW YORK SALES DIRECTOR
Philip Wright +44 (0)207 542 5016 Michelle Sierra Leonie Welss
+44 (0)20 7542 8144 +1 646 223 8592 +44 (0)20 7542 7752
Fixed-income: Tom Revell
IFR ASIA EDITOR
+44 (0)207 542 2794 DEPUTY EDITOR: ASIA-PACIFIC GLOBAL ADVERTISING
Steve Garton Chien Mi Wong PRODUCTION MANAGER
+852 2912 6670 Equities: Lucy Raitano
+852 2912 6611 'LORIAû"ALBASTRO
+44 (0)20 7542 4282
HEAD OF US CREDIT SENIOR REPORTERS: LONDON
+44 (0)20 7542 4348
Paul Kilby Fixed-income: Malicka Sielinou
3ANDRINEû"RADLEYû SUBSCRIPTION SALES ENQUIRIES
+1 646 223 4733 +44 (0)207 542 6907
+44 (0)20 7542 0651 UK/EMEA: +44 (0)20 7542 4569
NEW YORK Americas: +1 646 223 5543
HEAD OF ASIA CREDIT Alasdair Reilly
Daniel Stanton Fixed-income: William Hoffman China, Hong Kong, Japan, Korean, Taiwan
+44 (0)20 7542 3197
+65 6417 4548 +1 646 223 6141 Alan Wong +852 2912 6606
NEW YORK
EQUITIES EDITOR, ASIA
Equities: Robert Sherwood Australia, India, Indonesia, Malaysia,
$AVIDû"ROOKEû
Fiona Lau +1 646 223 8792 Singapore, Thailand
+1 646 223 4697
+852 2912 6673 High-yield: $AVIDû"ELL Samantha Harris +612 9373 1749
Kristen Haunss
ASSISTANT EDITORS: LONDON
+1 646 223 8388 CLIENT SERVICES
+1 646 223 6790
Emerging Markets: Robert Hogg HONG KONG IFR.Clientsupport@refinitiv.com
Aaron Weinman
+44 (0)20 7542 9077 Equities: Candy Chan NEW ISSUES LEAGUE TABLE & DATABASE
+1 646 223 6278
People & markets: +852 2912 6672 Loans: )OLANDAû"ARBATI
HONG KONG +44 (0)20 7542 0971
Christopher Spink Fixed-income: Jihye Hwang
Aileen Chuang
+44 (0)20 7542 3814 +852 2843 1679 ECM: Rebecca Cox
+852 3761 1934
Equities/Structured equity: SINGAPORE +44 (0)20 7542 7376
Apple Li
Robert Venes Fixed-income: Krishna Merchant DCM: )ANû7ILLMOTT
+852 2912 6685
+44 (0)20 7542 8326 +91 9833847353 +44 (0)20 7542 4376
Evelynn Lin
NEW YORK BEIJING REPRINTS OR LICENCE TO COPY
+852 2912 6607
Equities: Anthony Hughes Equities: Karen Tian 'LORIAû"ALBASTRO
+1 646 223 8174 +86 10 6627 1045 SINGAPORE +44 (0)20 7542 4348
Mirzaan Jamwal
SINGAPORE Credit: Yanfei Wang E-MAIL ADDRESSES
+65 6417 4541
Equities: Anuradha Subramanyan +86 10 6627 1104 lRSTNAMELASTNAME REFINITIVCOM
+65 6417 4547 SYDNEY
CREDIT EDITOR
-ARIKOû)SHIKAWA
SENIOR CREDIT CORESPONDENT Alex Chambers
+61 2 9321 8179
+ITû9INû"OEY +44 (0)20 7542 8389
+65 6417 4549 DEPUTY CREDIT EDITOR
Helene Durand
+44 (0)20 7542 3469

LONDON, HEAD OFFICE NEW YORK HONG KONG SINGAPORE

5 Canada Square 3 Times Square THûmOORû)#"#û4OWER 18 Science Park Drive
London 18th Floor Three Garden Road Singapore 118229
E14 5AQ New York Central Tel +65 6775 5088
Tel +44 (0)20 7250 1122 NY10036 Hong Kong
Tel +852 3761 1800

4HEûCONTENTSûOFûTHISûPUBLICATIONûEITHERûINûWHOLEûORûPARTûMAYûNOTûBEûREPRODUCEDûSTOREDûINûAûDATAûRETRIEVALûSYSTEMûORûTRANSMITTEDûINûANYûFORMûORûBYûANYûMEANSûELECTRONICûMECHANICALû

PHOTOCOPYINGûRECORDINGûORûOTHERWISEûWITHOUTûWRITTENûPERMISSIONûOFûTHEûPUBûLISHERSû!CTIONûWILLûBEûTAKENûAGAINSTûCOMPANIESûORûINDIVIDUALûPERSONSûWHOûIGNOREûTHISûWARNINGû4HEû
INFORMATIONûSETûFORTHûHEREINûHASûBEENûOBTAINEDûFROMûSOURCESûWHICHûWEûBELIEVEûTOûBEûRELIABLEûBUTûISûNOTûGUARANTEEDû3UBSCRIPTIONSûTOû)&2ûAREûNON REFUNDABLEûAFTERûTHEIRûCOMMENCEMENTû
ISSUEûDATEûÊû2EFINITIVûû2EGISTEREDûASûAûNEWSPAPERûATûTHEû0OSTû/FlCEû2EGISTEREDû/FlCEû2EFINITIVûû3OUTHû#OLONNADEû#ANARYû7HARFû,ONDONû%û%0û2EGISTEREDûNOûû
%NGLANDû0RINTEDûINû%NGLANDûBYû7ALSTEADû2OCHEû,TDû)33.û û5NAUTHORISEDûPHOTOCOPYINGûISûILLEGAL

International Financing Review July 4 2020 103

 INTERNATIONAL FINANCING REVIEW INDEX

Acceleron Pharma 94 Comcast 26 JG Summit 56 Rhaetische Bahn 30

Accolade 93 Commerzbank 21 JHBP (CY) Holdings 85 Rizal Commercial Banking Corp 57
AdaptHealth 96 Corporacion Andina de Fomento 64 Jiangsu Cai Qin Technology 87 Roche 26
Aditya Birla Fashion and Retail 88 Cosan 63 Jinke Smart Services Group 86 RTE 33
ADO Properties 89 Covia 79 Jordan 61 Rumo 55
ADQ 71 Credit Suisse 5 JP Morgan 4, 19 Santander Leasing 44
Advanced Personnel Management Intl 79 CRE Logistics REIT 70 Kangji Medical 84 SAS 91
Aeromexico 81 Crescent Capital Partners 79 Kantar 77 Sasol 91
AEX Gold 98 CRISPR Therapeutics 94 KfW 28 Saudi Aramco 65
Agence France Locale 30 D8 Holdings 87 KLM 65 SBM Offshore 71
Air France-KLM 65 Daimler 26, 65 Kookmin Bank 59 Sealand Securities 87
Akbank 55 Delek Drilling 61 Korea Housing Finance Corporation 57 Semiconductor Manufacturing Intl 84
Algeco 42 Denny’s 95 KrisEnergy (Asia) 70 Shandong Fengxiang 86
Alstom 65 Deutsche Bahn 35 Landcadia Holdings II 83 Shanghai Junshi Biosciences 87
Amco Asset Management Company 37 Deutsche Bank 5, 35 Lazard 13 Shanxi Securities 87
Amlak International 91 Diageo 26 Lebanon 13 Shell 63
AMS 41 Diversified Gas & Oil 74 Lemonade 94 Shenwan Hongyuan (HK) 68
AMVIG Holdings 68 Dongguan Rural Commercial Bank 85 Lendlease Finance 66 Shimao Services 86
ANA Holdings 70 DoubleDown Interactive 83 Leonardo 34 Sibur 60
Angelo Gordon 44 Driven Brands 47 Liberty Global 65 SID Banka 61
Angus Chemical Co 76 Dubai World 81 Lifestyle Communities 66 Sino-Ocean Land (Hong Kong) 68
Anthem 26 Dun & Bradstreet 7 Liontrust Asset Management 92 SK Biopharmaceuticals 88
Apergy 73 Ecuador 13 Liquidia Technologies 97 Skipton Building Society 39
Archosaur Games 85 El Corte Ingles 72 Logicor 33 Smoore International 86
Argentina 13, 63 Emirates NBD 62 MasMovil 65, 77, 78 Societe Generale 35
Argentum 100 Energean 72 Material Handling Systems 76 SoftBank Group 42
Arvind Fashions 88 Engineering Group 41 McDonald’s 26 Soochow Securities 87
Aston Martin Lagonda 93 European Financial Stability Facility 30 Meggitt 72 Sosei Group 99
AT&T 26 European Union 30 Mercialys 33 South Africa 61
Aura Minerals 98 Evercore 19 MetLife 32 Sparebanken Vest Boligkreditt 38
Australian Office of Financial Management 31 Fannie Mae 45 Metro Finance 47 SSE 34
Avangrid 75 Federal Republic of Germany 6 Metropolitan Bank & Trust 57 Standard Bank 14
AVI-SPL 76 Fiat Chrysler 32 MGM Growth Properties 46 Standard Life Aberdeen 17
Axis Bank 88 Financiere CEP 65 Microsoft 26 State of Thuringia 28
Baden-Wuerttemberg 29 Finnair 89 Mission Group BidCo 79 Sunnova Energy International 95
Baloise Holding 38 Fjordkraft 90 Mitchell International 76 Swiss Re 26
Banca Monte dei Paschi di Siena 37 Flatex 89 Mobile World Investment Corp 71 Synlab 65
Bank of America 5, 19 Formula 1 78 Morgan Stanley 5, 15, 19 Takeda Pharmaceutical 32
Bank of China 19, 20 Forterra 74, 93 National Grid Electricity Transmission 33 Tech Data 73, 75
Baozun 85 Fraport 33 National Group 42 Telefonica 65
Barclays 5, 17 Freddie Mac 45 Neoleukin Therapeutics 95 Tencent Holdings 57
BASF 77 Gan & Lee Pharmaceuticals 84 Nestle 26 The Ardonagh Group 78
BAT 26 GDS 85 New Zealand 31 ThyssenKrupp Elevator 2, 65, 78
Bayer 23, 26 Generali 37 NextEra Energy 69 Tianfeng Securities 87
Berenberg 17 Genova Property Group 92 Niedersachsen Invest 30 Titan 42
Berlin Hyp 38 GlaxoSmithKline 26 Nielsen 65 Total 65
BGH Capital 78 GoHealth 93 Nippon Steel 70 Towa Pharmaceutical 70
Blackstone 45, 46 Golden Nugget Online Gaming 83 NN Bank 38 Toyota Industries 35
Blue Moon Group 86 Goldman Sachs 5, 14, 19 Novartis 26 TPG Telecom 67
Bluestone 47 Greenland Hong Kong Holdings 67 NPC International 79 TravelCenters of America 95
B&M European Value Retail 41, 73 Greentown Management 86 NRW.Bank 29 Ukraine 8
BMW 26 Grupo Posadas 63 Oatly 72 Uniqa Insurance Group 36
BNG 28 GS Acquisition Holdings II 83, 96 Olam Holdings 70 United Airlines 73
Boels 65 GVS 89 Olam International 70 UnitedHealth 26
BP 26, 65 Hammerson 72 Oliva 71 UNQ 86
Brockhaus Capital Management 89 Hannover Re 37 Oman 11 Uruguay 64
Caesars Entertainment 73 Healius Primary Care 78 Oneok 75 Vedanta Limited 56
CaixaBank 38 Hikma Pharmaceuticals 62 Origin Energy 66 Vedanta Resources 56
California Resources 41 Hilong Holdings 56 Outokumpu 7, 99 Ventia 67
Calliditas Therapeutics 92 Hipgnosis Songs Fund 92 Pacific Gas and Electric 80 Viva Biotech Holdings 88
Cambricon Technologies 87 Host Hotels 74 Panacea Acquisition 83 Vodafone Hutchison Australia 67
Capstar Special Purpose Acquisition 83 Huazhu Group 85 Perkebunan Nusantara III 69 Volkswagen 26
Carnival 73 Hudson Pacific Properties 45 Petroliam Nasional 57 Vonovia 33
Cathay Media Group 84 Hugel 88 Petron Cor 70 VPBank Finance 71
CCR Re 37 Hyloris Pharmaceuticals 88 Poland 60 Webjet 99
Cerberus 21 IBM 26 Polymetal International 90 Welcome Break 74
Cerelia 77 ICBC 14 Portuguese Republic 27 Wells Fargo 5, 14
Chesapeake Energy 40, 81 IGIS Residence REIT 88 PRP Diagnostic Imaging 79 Winnebago Industries 40
Chiasma 97 II-VI 100 PTT 10 Wirecard 100
China Biologic Products Holdings 79 Industrial and Commercial Bank of China 20 Qander 43 WuXi Biologics (Cayman) 84
China Bohai Bank 84 Infrastrutture Wireless Italiane 34 Qantas Airways 67 Xperi 73
China Construction Bank 20 ING 31 Raiffeisen Schweiz 37 XP Inc 98
Cirque du Soleil Entertainment Group 81 Innovative Industrial Properties 98 Raizen 63 Xylem 31
Citigroup 4, 19, 21, 42 Islamic Republic of Pakistan 8 Redefine International 100 YRC Worldwide 75
City of Hamburg 29 ISS 33 Redefine Properties 100 Yum China 85
CK Hutchison 57 Italy 30 Reliance Industries 68 Zambia 13
Coca-Cola 26 Jamf Holding 97 RemeGen 85 Zhenro Properties Group 68
Columbus Capital 47 Jefferies 19 Renk 42 ZTE (HK) 66

104 International Financing Review July 4 2020

IFR’s
ESG Financing Briefing
IFR’s ESG Financing Briefing is a subscription
service offering daily news, data and analysis
on green and ESG financing from across the
Refinitiv Capital Markets Insight Team.

To subscribe or learn more, e-mail

ifr.clientsupport@refinitiv.com
 THE FIRST STEP IN CLO ANALYSIS:
DETAILED, ACCURATE, AND TRANSPARENT
LPC COLLATERAL
LPC COLLATERAL OFFERS CLO INVESTORS, MANAGERS & TRADERS A COMPETITIVE EDGE

CLO market professionals use LPC Collateral to run market value coverage analysis on CLO
tranches and to compare holdings, asset breakdowns and overlap across CLOs.

LPC Collateral also includes LPC’s loan market news and data, enabling users to dive into the
underlying collateral of CLOs. The historical performance of CLOs can be analysed using
LPC Collateral’s charting function, then benchmarked against other deals and market segments.

CONNECT TO THE GLOBAL SYNDICATED LOAN MARKET WITH LPC

lpc.info@tr.com
www.loanpricing.com