Budweiser serves up King of IPOs: US$9.8bn Hong Kong listing …dl.magazinedl.com/magazinedl/IFR...

JULY 6 2019 ISSUE 2291 www.ifre.com

EMERGING MARKETS

China woos overseas bond buyers on trip to Europe4

STRUCTURED FINANCE

ExteNet breaks new ground with US$368m 5G ABS8

LOANS

Global syndicated lending plummets to seven-year low9

EQUITIES

Record-breaking Saudi Aramco IPO coming by 2021. No, really10

Budweiser serves up King of IPOs: US$9.8bn Hong Kong listing comes without cornerstones

Pending ECB bond buying programme pushes even high-yield bonds into negative territory

Commerzbank smashes US$1bn AT1 out of the park, as BMPS and UBI also seize the moment

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Upfront OPINION INTERNATIONAL FINANCING REVIEW

Wassup, Hong Kong?

When it comes to a Hong Kong IPO, AB InBev’s spin-off of Budweiser Brewing Company APAC is looking like

the genuine article, to borrow one of the company’s old slogans.

Budweiser opened the books last week on a Hong Kong listing that will raise up to US$9.8bn. As well as helping the parent pay down debt and create a platform for future

business and the growing Chinese consumer sector.That alone is enough to warrant careful attention, after an

onslaught of technology IPOs that have failed to perform.

the wider market. Budweiser is selling shares without a single cornerstone investor. That is a big break from recent tradition in Hong Kong, where issuers and underwriters have been far too keen to lock away stock in return for a little less risk of a failed deal.

The cornerstone concept remains popular with Chinese companies that want to show off their strategic connections, or with biotechnology companies looking for specialist investors to validate the science behind their products.

But Hong Kong should not need to rely on a handful of big-name investors to price an IPO for a classic, cash-generating business such as Budweiser. Indeed, many bankers argue that the cornerstone concept has outlived its usefulness, with some calling for the exchange to scrap the lock-up requirement altogether.

The main problem with locking up cornerstone investors is, of course, the overhang that creates in the secondary market. Meituan Dianping, the Chinese online delivery service, is a case in point: already languishing below its IPO price, the

when six-month lock-ups for its IPO cornerstones expired.

time since the stabilisation period ended last October.

cornerstone tranches (and the inevitable lock-ups) can also mean that many otherwise eligible stocks are barred from the major indices, further reducing trading.

For all its recent reforms, Hong Kong still needs to convince global investors that it can offer the liquidity to rival that of US exchanges. A major, index-eligible offering from Budweiser looks like a step in the right direction and may prove considerably more appetising for investors than the brewer’s signature product.

Broadening the net

A debut securitisation from ExteNet Systems, backed by networks of antennas that carry wireless mobile signals,

could mark the beginning of a potentially huge new asset

The black boxes stuck on lampposts and road signs that

underpin the roll-out of 5G cellular networks – heralded by some as the fourth industrial revolution.

As well as giving smartphone users a big increase in connectivity speeds, 5G is also seen as the cornerstone of the developing “internet of things” connecting the next generation of self-driving cars and other kinds of smart technology.

Rolling out the infrastructure required to support this network will require a massive amount of capital investment.

earlier this year pegged the cost of upgrading telecoms infrastructure to accommodate 5G at US$1trn.

those costs, that would be a huge potential asset class – and new source of fees – for the industry, as well as another way

this technology.

have heralded a new asset class with huge potential. Some recently developed sectors such as mobile handsets and property-assessed clean energy loans have so far not lived up to their potential, in terms of deal volumes.

So it remains to be seen if the market can convert an impressive debut into a more substantial part of the market.

But if it can, putting securitisation at the heart of the rollout of 5G infrastructure would be a move in the right

always had a positive impact when it has innovated.

International Financing Review July 6 2019

Hong Kong still needs to convince global investors that it can offer the liquidity to rival that of US exchanges

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International Financing Review July 6 2019 3

Contents INTERNATIONAL FINANCING REVIEW

JULY 6 2019 ISSUE 2291

TOP NEWS 04EQUITIES Cheers Budweiser serves up King of IPOs. US$9.8bn Hong Kong listing

comes without cornerstone investors. 04

EMERGING MARKETS Profile China woos overseas bond buyers. Ministry of Finance sells

first CNH bonds in Macau and embarks on Europe meetings. 04

BONDS Distortion Pending ECB bond buying programme pushes even high-yield

bonds into negative territory. 05

BONDS Frenzy Commerzbank smashes US$1bn AT1 debut out of the park.

Investors can’t resist 7% coupon in falling rate environment. 06

Securitisation ExteNet breaks new ground with wireless infrastructure ABS. 08 Loss of appetite Global lending plummets to seven-year low. 09 About time Record-breaking Aramco IPO coming by 2021. No, really. 10 Change of plan iHeartMedia shuns IPO for direct listing. 12

PEOPLE & Strategy Ritchie quits as Deutsche Bank prepares a rejig. Supervisory board 13MARKETS to discuss CIB restructuring plan.

New thinking Societe Generale sets out top banking and advisory roles

as it aims to cut annual costs by €500m. 14 Fatigue Evercore keeps BAML out of the top five M&A banks, as global activity

falls in the first half of 2019 compared with the prior year. 15 Restructuring Commerzbank merges corporate finance with trading. 17 Shortfall EU banks face €135bn Basel IV headache. 19 Flop Investors shun China bond auction. 21

BONDS Too generous Prudential demerger T2 poses pricing questions. 23 Volume Lower rates boost US high-yield. 24 Caution Busy first half for yen but slowdown ahead. 38

EMERGING Hurdle cleared Ukrainian Railways enters new era. 53MARKETS External India eyes offshore sovereign bond issue. 53 Take off Air India plans jumbo bond sale. 58

LOANS Lacklustre US disappoints with lowest 2Q in seven years. 65 Pilot scheme Sonia benchmark makes debut. 73 UK Merlin buyout backed with £3.8bn of loans. 79

EQUITIES Biggest listing CRSC kicks off tech board IPO. 83 Float Game on for French national lottery IPO. 83 Premium Four beat tech board targets. 85

STRUCTURED Cut Risen Energy downsizes convertible bond target. 94EQUITY Repurchase SGL tenders for 2020 CBs. 94 Combined Cembra wraps up deal for acquisition. 94


Top news Commerzbank smashes AT1 06 Italians seize the day 06 ExteNet breaks ABS ground 08

China woos overseas bond buyers Emerging Markets China’s Ministry of Finance sells first CNH bonds in Macau and embarks on Europe meetings

BY CAROL CHAN, YANFEI WANG

China is expanding its footprint in the international bond markets as it looks to enhance

attention is focused on trade

government sold renminbi-denominated bonds in Macau

internationalisation of the Chinese currency and the development of the offshore

investors in Europe ahead of a potential foreign currency-denominated bond offering later

The MoF’s core team in charge

visit Frankfurt on July 12 and

the meetings is to update investors on China’s economic

Communications and Deutsche Bank are arranging the

Chartered Bank are setting up

China ended a decade-long

again attracting strong demand despite a global market sell-off

The MoF has not announced any plans for foreign currency-denominated bonds so far this

European cities has led some to speculate that China may be

continue to issue foreign currency-denominated bonds to

mean that the MoF is looking to

LOTUS BONDS

renminbi-denominated bond offering in the special

(Macao) Financial Asset

Budweiser serves up King of IPOs Equities Terrible beer but potentially decent IPO: AB InBev’s Asia arm comes with no cornerstone tranche

BY FIONA LAU, S ANURADHA

BUDWEISER BREWING COMPANY APAC

enlarged share capital at a pre-shoe

“The bottom of the price

Even at the bottom of the price

Technologies in May and stand as

“Feedback from pre-marketing

infrastructure company China

The index implications are

Market participants said there is demand for consumer companies

fair valuations in the consumer

these companies on a P/E multiple than a tech company that only has

CHINA PREMIUM

valuation is reasonable at the

The company is selling shares at

Resources Beer trades at a 2020 EV/

“The China business of

par or premium valuation to CR

the listing also includes non-China

The company posted a net

the normalised Ebitda for


For daily news stories visit www.ifre.com@

Global lending plummets Pension giants add leverage 10 Saudi transitions to euros 11

‘High-yield’ bonds turn negative

Bonds ECB move pushes yields into negative territory

BY ELEANOR DUNCAN

The distortion of the credit markets by central banks has produced the ultimate oxymoron: negatively-yielding

negative yielding high-yield

president hinted at a further dose of bond buying via the central bank’s corporate sector purchase

than 10 high-yield bonds in

expecting more stimulus in the

going to affect high-yield bonds

are either short-dated bullet maturities or have upcoming

negative yield is the effect of the bond trading above the call

and therefore genuinely

American metal packaging

also has bullet bonds in negative

UNPRECEDENTED

The move to negative yields for European high-yield credits is unprecedented; it didn’t even

began its bond buying

move a “remarkable fact in

surprising given the fall in

market has a high degree of

tight spreads and historically

same time that you have a super-

Citigroup analysts have been

credit prices match fundamentals -

currently dominating investor

central banks form a basis for

embark upon another round of

The offering comes ahead of the 20th anniversary of Macau’s return to China in December

for the development of the

note on June 25 that the deal could mark the beginning of regular CNH bond issuance by the Chinese government in

The Macau CNH bonds have

its presence in the offshore

European market as Europe has

The expanded supply could help support the development of the CNH by establishing a funding benchmark and increasing the availability of risk-free investable assets

BOC Macausole global coordinator on both the institutional and retail tranches of the MoF’s offering in

asset managers and fund

range the offering implies an

forecast market capitalisation of

continue to receive positive feedback from long-only institutions and hedge funds

DEBT REDUCTION

create an APAC consumer goods

used to repay loans due to AB

a debt stack that totals more

has been aggressively terming out

spreads did not react overly

in part because there is fear the company could use the funds

Bookbuilding for the Hong Kong

The deal offers an

JP Morgan and Morgan Stanley are

coordinators and bookrunners Bank of America Merrill Lynch

and Deutsche Bankbookrunners are BNP Paribas CICCCitigroup and HSBC


Top news

BMPS and UBI seize moment as credit markets go on a tear

Bonds Investors lap up Italian bank credits as market snaps tighter

BY HELENE DURAND

BANCO MONTE DI PASCHI DI SIENA and UNIONE DI BANCHE ITALIANE used the risk-on mode gripping European credit markets to their full advantage by substantially

issues on the back of heavy

been strongly bid for most

more circumspect around

over the country’s public

But a search for yield and helpful headlines have driven a big rally in the sovereign’s curve

a further boost after reports that

“The market is in a totally

for-longer [rates strategy] is creating headaches for money managers but it’s clearly an

ANOTHER STEP

another step in its capital markets rehabilitation after

“They did a covered in January

.

The bank’s chief executive said at the end of June it

not prepared to pay excessively

Marketing for the Caa1/B/BH rated senior preferred via sole books Morgan Stanley

they have access to the

OUT OF REACH

Given the bank converted its stack of subordinated debt into

Commerzbank smashes US$1bn AT1 debut out the park

Bonds Investors can’t resist 7% coupon in falling rate environment

BY TOM REVELL, HELENE DURAND

COMMERZBANK smashed its

rare chance to buy a national

conspicuous by its absence in

and one of the biggest order

books seen for an AT1 trade in

“A lot of the issuer base is very

issuers have taken the opportunity to get decent volumes of AT1

is also a function of the outlook

secondary market is challenged

GOOD TIMING

The issuer also picked its

banks go into reverse and rates

Leads Barclays, Commerzbank, HSBC, JP Morgan and UBS opened

“The market improved but

out of the park in terms of

MOVING DOWN

Bankers said the result demonstrates that the primary market is so strong that

for credits that do not have a

is able to achieve in the current

“It’s in their business plan to do senior unsecured wholesale funding and we told them there was a window”



subordinated debt remains out of

issuer might look to count the

percentage of your senior

protected alongside other senior preferred and depositors or is

MREL eligibility of such bonds

becoming more of a topic and it’s

for credits that have a perceived

that some senior preferred can

matures before the end of the ECB’s targeted longer-term

still senior to Tier 2 and non-

their government-guaranteed

not necessarily that you’re

ratings are such that there is less demand and some fund

and anybody else in this space is

NOTHING LEFT TO CHANCE

helped by the generous

Banca IMI, Goldman Sachs, Societe Generale and UBI Banca from initial pricing thoughts to

that struggles to get full

Broadening their investor base is one of the key hurdles they

need to address over the next

The trade received a much

The risk-on tone encouraged FINECO

BANK

BNP Paribas, UBS and UniCredit for the perpetual

begin investor meetings on

“That is an extraordinary

bank but then that’s not such a

added a third syndicate banker

also have been supported by a

the last issuer to print in the

WEIGHING UP FAIR VALUE

Bank is the only other German

market participants argued

focused on other capital

the instruments’ features to

another potential pricing

CET1 buffer … and the bank

director at Assenagon Asset

saying that the deal had come on the tight side but its timing

Source: Refinitiv Eikon

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

02/0

1/19

02/0

2/19

02/0

3/19

02/0

4/19

02/0

5/19

02/0

6/19

02/0

7/19

%

YIELD CRUNCH

YIELD ON BENCHMARK 10-YEAR BTP


4.0

4.5

5.0

5.5

6.0

6.5

7.0

02/0702/0502/0302/01/2019

FEELING THE SQUEEZE

BANK OF AMERICA COCO INDEX


Top news

ExteNet breaks new ground with wireless infrastructure ABS

Structured Finance Bankers look to put securitisation at heart of 5G roll-out

BY DAVID BELL

EXTENET SYSTEMS

to be a key funding tool for the

is an important step as issuers

infrastructure that supports the transmission of mobile data

Lead banks Barclays and Deutsche Bank tapped into

established market that has

“This can be a very important transaction for the continued use of securitisation technology

to urban infrastructure such as

skyscrapers and venues such as

data speeds than previous

small cell infrastructure to carry

A report in February this year

the cost of upgrading telecoms infrastructure to accommodate

are also seen as a key part of developing the “internet of

driving cars and other pieces of

is a massive need for additional infrastructure that all of the

FAMILIAR FACES

rating agencies comfortable

mounted on street infrastructure managed by

an array of permits before they could be transferred into the

Trade war hits Belt & Road financings Loans Chinese lenders turn cautious on landmark infrastructure initiative

BY APPLE LI

China is forcing lenders to

the biggest backers of President

deals that could be exposed to

Bankers are particularly concerned about a deterioration

lenders still see opportunities in

likely to be among the recipients of trade and investment

to a June 5 study by Japanese

Vietnam has so far been the

exports to both China and the

and Argentina also stand out as

the American subsidiary of state-

June and backs the construction of

public-private partnership and the

pledged to deepen cooperation

syndication and pays an interest

OPPORTUNISTIC LENDING

investments from China into 51

data from the Chinese Ministry

“We really like the space - it’s high-growth. There are a lot of reasons to like it on a technical as well as fundamental basis”



Global lending plummets to seven-year low

Loans Borrowers shy away from refinancings and M&A deals

BY CHRIS MANGHAM

Global syndicated lending

year and the market recorded its

The loan market suffered a

volume dropped to a seven-year

banks’ budget targets under pressure and many lenders are not expected to be able to close

a headline-grabbing year so far thanks to a mixture of cyclical

SLOW START

Leveraged lending got off to a

Global leveraged loans

lenders refocused their attention

dollar bridge loan on record and

opportunities to put money to

expect a huge explosion of back-to-

EMEA WOES

lenders are relying on a reversal of fortunes in the remainder of

German auto supplier ZF

Capgemini and French modelling

European leveraged loan

Bankers became more optimistic as activity rose in the

post-summer outlook is less positive and investors remain

“The pipeline visibility remains

The senior A-2 notes priced at

15bp inside guidance of 160bp-

20bp and 25bp inside the tight

securitised products at fund

reasons to like it on a technical

infrastructure in the

SPREAD PICKUP

the deal offered investors decent

CCI

2018-2

But for ExteNet the deal

according to the source familiar

intends to tap the market every

The debut should help encourage other issuers to tap

although no other deals are

to be an important tool for

component of the telecoms ecosystem that can be

Despite the fall in outbound

eyeing potential lending opportunities as uncertainties

pipelines in the infrastructure

Asia and in some parts of

and Chinese President Xi Jinping met on the sidelines of the G20

to restart stalled trade talks and

Although trade talks have

trade adviser Peter Navarro said

days after he made his statements

selective in our lending and

“We’re considering rejecting funding for some Belt & Road projects after analysing the potential impact the trade war might have on the sponsor”


Top news

Aramco IPO coming by 2021. No, really Equities Bankers remain cautious about record-breaking float

BY OWEN WILD

of SAUDI ARAMCO

chairman of Aramco Khalid al-Falih said on Tuesday that the company

in activity and such a long timeline means it is likely to

ECM bankers have long been cautious about trumpeting their roles in the deal as they consider the chances of it happening to

only about half of the mandates

has seen some of the biggest

already passed since Aramco’s

LARGEST EVER

is the largest ECM transaction

The valuation has been a

Pension giants add leverage as 30-year-old Canadian model flounders

People & Markets Canadian funds rush to market as they lever up to keep paying pensions

BY GARETH GORE

government set up a task force to

teachers and other public servants might one day place an insurmountable burden on state

The task force recommended a

proposing that public-sector pensions be spun off and managed independently by teams

that rapidly became a template for other public-sector pension

transformed the funds into

shareholders in companies such as

UNDER STRAIN

are expected to fall back into

shift has prompted several funds

element to the tried-and-tested

pace of issuance has steadily picked

manages the pensions of half a

outstanding bonds issued by

Canadian pension funds have more than trebled over the past

Canadians are really pioneers in

lot of the funds have already increased their investment

BACK INTO DEFICIT

the number of people claiming

the number of contributors stays

reliant on returns from its

The shift could hardly come at

making the industry annual

despite the move that many have made into alternative Source: IFR/Annual Reports

C$bn

0

10

20

30

40

50

60

201920182017201620152014

� CPPIB � CDP � OTPP � PSP � OMERS � OPB

CANADIAN PENSION FUNDS PILE UP DEBTS

OUTSTANDING BONDS



Saudi Arabia makes

smooth transition to euros Emerging Markets Sovereign opens up route to new investors

BY ROBERT HOGG

SAUDI ARABIA trained its efforts on

barely paid up for the cost of

intentions to branch out into

laying the foundations for a

but that the eight-year had

curve and the 20-year had priced

bonds had roughly come in line

sense given the attractive headline coupons in the euro market and the opportunity to diversify the country’s investor

DIVERSIFICATION

A number of emerging market sovereigns have tapped the currency over the past month

issued a 12-year note the

longer-dated maturities due to

concerns and the risks that

“Geopolitical risks remain

those uncertainties can be attributed to the rarity of the issuer and to the lack of positive-

see value in the offering

demonstrated that they have a good alternative in the euro

“For the 20-year you had an investor base looking for the

The bonds carried momentum

Goldman Sachs and Societe Generale coordinators and active

information making it easier to

postponed in the summer of

the company instead focusing its

transaction and a debut bond

NOT SUSPENDED

never stopped talking about the

the banks previously mandated are expected to retain their

JP Morgan, Morgan Stanley, HSBC, Moelis and Evercore mandated to prepare the

market conditions are challenging

Plans taking on prudent leverage is

approved by our board … about half in alternative assets and half in traditional assets such as

And adding a little bit of leverage

LEVERAGE ON LEVERAGE

Leverage isn’t restricted to bond

Bank of Canada has in the past voiced concern about the rise in

big shift in the funds’ asset

greater use of short-term leverage through repo and derivatives

vulnerability that could be tested

to comment on the rise in bond

removes regular short-term

Level 2 assets and investing in

could leave some funds exposed

up already leveraged investment


Top news

iHeartMedia shuns IPO for direct listing Equities Broadcaster follows lead of Spotify and Slack, but will selling pressure take a toll?

BY ANTHONY HUGHES

IHEARTMEDIA

months after iHeartMedia emerged from Chapter 11 bankruptcy protection and

both tech unicorns that could

existing shareholders to sell via

markets may have been forced to accept a sharp discount if it

(most recently Change Healthcare last month) have

“[iHeartMedia] probably

they carry and the pushback

had debt like that and did not come out of bankruptcy and

Commission in early April but

to diversify our investor base and give us improved access to public

NO UNDERWRITERS

Goldman Sachs and Morgan Stanley

advisers akin to their roles on the

no stabilisation (because there is

arguably more suited to companies emerging from bankruptcy that already have a

iHeartMedia has long

leveraged buyout of Clear Channel Communications in

Abrams Capital and Brigade

Their holdings arise from a

iHeartMedia separate Clear

restructure the remaining debt and issue common stock and

probably have sold shares in the offering but put the bulk of their shares into a six-month lock-up arrangement to limit

The challenge facing

direct listing these shareholders can sell all of their shares

trade on the thin over-the-counter

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FRONT STORY STRATEGY

Ritchie quits as Deutsche prepares rejigSupervisory board to discuss CIB restructuring planDEUTSCHE BANK said Garth Ritchie, head of its corporate and investment bank for the past two years, is leaving at the end of this month, heralding a major restructuring of the business.

Ritchie joined the bank 23 years ago and was named head of equities in 2009, before being put in charge of the markets division at the start of 2016. He then became co-head of the newly created CIB in 2017 before becoming sole head a year later.

But he has had a troubled time in charge. Upset at the continuing underperformance of CIB saw shareholders, unsuccessfully, attempt to remove Ritchie at May’s annual shareholder meeting, as well as chairman

Sylvie Matherat.Chief executive Christian Sewing, who

will now assume direct responsibility for CIB, tried to quell investor anger at that meeting by pledging to “rigorously” assess

with a view to making “tough cutbacks”.The axe is expected to fall on Deutsche’s

underperforming equities business, particularly in the US. A decision could be reached as soon as Sunday, when Deutsche’s supervisory board is expected to meet.

A source close to one major shareholder said Sewing and Achleitner had been leading a small group of board members in discussing the plan, which could see as

than €50bn of assets put into a non-core unit to be sold or run down.

One proposal being studied is transferring parts of the equities and equity derivatives business to other banks, such as BNP PARIBAS and CITIGROUP, which have expressed interest in growing their activities in this area. Citi’s co-head of global equities Murray Roos used to work at Deutsche.

Citi, in particular, is trying to gain market share in equities, and bankers and analysts previously told IFR it would make sense for the US bank to pick off Deutsche staff, or parts of the business in the US, where it employs 9,000 staff.

Citi and BNP Paribas declined to comment on whether they had any interest.

PRIME BROKERAGECutting in equities, and particularly prime brokerage, makes sense since loans made to clients here can tie up a lot of capital, sometimes without generating much return.

In the second half of 2016, Deutsche lost business in prime brokerage when doubts arose about whether it could continue to pay coupons on its additional Tier 1 notes as it faced

returned to the same extent, questioning whether it made sense to continue.

That has now come back to bite Ritchie, who is leaving “by mutual agreement”. He will continue to advise Deutsche until the end of November, including on issues related to Brexit.

“I believe the bank is now ready for further transformation, and it is the right time for new leadership to take the division forward,” Ritchie said in a statement released by Deutsche.

Transferring business to a third party could be cost-effective for Deutsche if it saves money from making people redundant. A senior executive at another European bank said rivals were reluctant to hire from Deutsche “as they are so highly paid.”

Other senior equities people to leave Deutsche recently include co-head of trading Brad Kutzman. Ritchie’s successor as global head of equities Peter Selman is also expected to leave, as is US head Tom Patrick. He could be replaced by Mark Fedorcik, co-head of CIB in the US.

Deutsche could also set up a corporate bank separate from CIB, which was only put together just over two years ago, as part of a restructuring that might cost as much as €5bn in one-off charges. The corporate bank would include transaction banking and commercial banking, possibly headed by Stefan Hoops, current head of transaction banking.

The bank, whose shares rose 3.3% to €7.24

plans. “We will update all stakeholders if and when required,” it said.Christopher Spink


People&Markets14 Jefferies CEO

Rich Handler

says trading surged

29% last quarter,

providing hope that

Q2 could beat lowly

expectations

19 The Financial

Stability

Board, based in

Basel, says its TLAC

standard is working

well and doesn’t need

changing

17 BAML

appoints Peter

Guenthardt as co-

head of Asia-Pacific

investment banking in

Hong Kong

Source: Coalition, based on revenues; firms ranked 4-6, 7-9 and 10-12 are grouped

10-12th

7-9th

4-6th

3rd

Ist

BNPPRBCWellsFargo

UBSDBCSBarcCitiBAMLGSMSJPM

AMERICAS EQUITIES RANKINGS 2018


GOLDMAN SACHS has hired Dawei Huang from Bank of America

Merrill Lynch as

managing director in its

technology, media and

telecommunications

team. Huang is based

in Hong Kong and

reports to Jung Min and

Raghav Maliah,

Goldman’s co-heads of

TMT in Asia Pacific ex-

Japan. Min relocated

from San Francisco

earlier this year to run

TMT in Asia alongside

Maliah, who was

promoted to global vice

chairman of investment

banking in October.

Adekunle Ademakinwa is returning to

DEUTSCHE BANK to

head up the European

financial institutions

debt syndicate desk.

Ademakinwa will join

the German bank

towards the end of

summer. He will be

based in London and

report to Frazer Ross,

head of European flow

syndicate.

Ademakinwa joined

Nomura from

Deutsche Bank in 2017.

He was EMEA head of

credit debt syndicate

at the Japanese bank.

Who’s moving where…

KEVIN INGRAM, PARTNER AT CLIFFORD CHANCE, P20

SG sets out top banking and advisory rolesSOCIETE GENERALE has announced further senior positions in its new combined global banking and advisory arm, making Thierry d’Argent and Alvaro Huete deputy heads reporting to Pierre Palmieri, head of the division.

The French bank said in April it wanted to cut annual costs by €500m primarily by targeting its global banking and investor solutions business. It envisaged that 1,600 jobs would go.

SG also appointed Sylvain Megarbane as head of investment banking, which is part of global banking and advisory covering M&A, capital

based in London and report to Palmieri.D’Argent, Huete and Megarbane have

worked at SG for a combined 41 years.

M&A banker d’Argent joined in 2009 and has been co-head of coverage and investment banking since 2015. Huete joined in 1997 and was global head of syndicate before becoming deputy head of

from JP Morgan in 2010 and became

MORE ADVISORY, LESS TRADINGOn the markets side, SG said new head of global markets Jean-Francois Gregoire will organise activities around equities and equity derivatives, run by Alexandre Fleury,

by Sylvain Cartier.Cartier’s appointment was announced

in May. He was previously head of global

markets for the Americas. Fleury rejoined SG from Bank of America Merrill Lynch a year ago in his current position.

SG wants to make global banking and advisory a greater proportion of its overall investment banking revenues. This is

€711m, up 16% from the same period a year ago.

Jefferies trading defies Q2 gloomJEFFERIES FINANCIAL GROUP’s revenue from sales and trading surged 29% to US$379m last quarter, contrasting with weakness seen by its larger rivals in April and May.

The investment bank reported revenue from equities trading in its second quarter to May 31 of US$206m, up 18% from the year-ago period.

commodities trading rose 44% to US$173m.“In equities, we are realising market share

gains globally, driven by our innovative electronic trading capabilities,” said Jefferies chief executive Richard Handler.

He said the bank is expanding its equities footprint with hires in research, sales and trading, particularly in Japan, Hong Kong and Australia.

the bank’s effort to restructure the group. Jefferies has appointed Rob Lynn as global

coverage for priority and focus clients.

The bank is also aligning its European and US FICC, emphasising the high yield, distressed and emerging markets areas, as well as structured credit. Jefferies recently combined its macro

businesses across FICC and equities into a cross-asset macro team, run by Pete Seccia.

“LAG EFFECT”Jefferies had a tougher time in investment banking, where revenue fell 12% to US$448m.

“normal levels.” Revenues from M&A advisory were also held back by a “lag effect”

December and the US government shutdown in December and January.

Revenue from advisory fell 18% to US$179m, while revenue from debt capital markets fell 14% to US$152m. Revenue from

“The concern is that you run through 30 or 40 pages of risk factors and miss the one buried at the end which is the real idiosyncratic risk”

“In equities, we are realising market share gains globally, driven by our innovative electronic trading”

SG has identified reducing its flow activities in trading as a key target; it wants to reduce RWAs by €8bn by the end of next year


People&Markets

NOMURA has also lost Francesco Cuccovillo, European head of structuring and head of structured financing for Europe, Middle East and Africa. Cuccovillo has been at the bank for over 10 years. He was previously co-head of credit structuring for EMEA at Lehman Brothers. Nomura

announced plans to axe around 100 jobs in London - the centre for its European investment banking business - as part of a programme to cut US$1bn in costs from its wholesale business.

Equity capital markets veteran Georg Hansel has retired as head of ECM for Germany, Austria and Switzerland at BANK OF AMERICA MERRILL LYNCH. Hansel joined BAML in 2016 following 26 years at Deutsche Bank, where he led a dominant business in

its home market. He was appointed co-head of ECM for Germany in 2005 and became sole head in 2007 before taking on broader roles across EMEA from 2008.

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

In the past, global markets has been a dominant part of the investment bank, accounting for around half the unit’s

pulled in €1.27bn of revenues, but that was 11% below the previous year’s level.

key target. It wants to reduce risk-weighted assets by €8bn by the end of next year, which it envisages will reduce annual revenues by €300m.

No further senior appointments for global banking and advisory are expected to be announced.

want to strengthen the alignment of our coverage teams to optimise the client portfolio in terms of capital allocation and to sell all our group offerings,” said Severin Cabannes, deputy chief executive responsible for global banking and investor solutions.Christopher Spink

BELLWETHER?Jefferies reports earlier than rivals, meaning it is often a bellwether for the big banks.

The big banks, including Citigroup, warned in June that their second quarter in trading would be weaker than last year.

Citi said second-quarter trading revenues could decline by about 5% from a year earlier and investment banking revenues could drop about 15%. JP Morgan previously warned that trading was running about 4%–5% behind last year.

month before the traditional quarter, but the results would capture the two months that caused top banks to issue warnings.

The major banks begin reporting second-quarter results on July 16, led by JP Morgan.Philip Scipio

Evercore keeps BAML out of the top five M&A banksThe roaring M&A market of the last couple of years may be showing signs of fatigue as the number of deals, the value of deals and

of the year.

2019 compared to the prior year, according

deals between January and the end of June

than US$5bn.And there was good news for some of the

smaller advisers too, notably EVERCORE. The boutique investment bank held on to its

BANK OF AMERICA MERRILL LYNCH scrambling to regain its position.

BAML down into ninth. BAML improved in the second quarter to rank sixth at the half-year mark, but it stayed behind Evercore.

GOLDMAN SACHS reclaimed its leading

behind JP MORGAN

Morgan was in second at the half-year, followed by MORGAN STANLEY and then CITIGROUP.

Canadian bank RBC CAPITAL MARKETS continued to surge in the rankings, taking

quarter and from 17th midway through last year.

BIG DEALSThe number of deals worldwide fell 16% to 22,053 midway through the year, hitting fees for banks, even though a good number

of mega-deals kept the value of deals relatively high.

The biggest drop was in the Americas, where the number of deals fell 23% - largely due to a 24% fall in the US market. The number of deals fell 16% in Europe, including a 12% fall in Britain.

Despite the drop in the number of deals in the US, the value of transactions in the world’s biggest economy has never been

M&A activity for US targets reached

of 19% compared to 2018 and more than half the total global deal value.

Bumper deals were behind that rise, and eight of the top 10 worldwide deals announced this year have been US domestic deals.

The value of global transactions larger than US$5bn totalled US$1trn during the

US$5bn accounted for half of announced M&A value during the period, the largest percentage ever.

Transactions for European targets totalled

from last year.Cross-border M&A activity slumped 45% to

year, equating to the slowest opening six-month period for cross-border M&A since

Philip Scipio

Fifty-three deals greater than US$5bn accounted for half of announced M&A value, the largest percentage ever

SO IT LOOKS like the B in Deutsche Bank’s Plan B stands for “bugger off” – at least when it comes to its US equities staff.

Still, if you’re going to have a career in limbo, best to do it when Wimbledon, the women’s football World Cup, the Tour de France and the cricket World Cup are on the telly in various welcoming bars.

One trader said: “It’s not yet at the point where they’re selling Bloomberg terminals on eBay, but once you see that you’ll know it’s over.”

The bank’s supervisory board is set to meet on Sunday to formally approve the restructuring plan, just in time for the

BANK OF ENGLAND Governor (and alleged Kylie Minogue fan)

Christine Lagarde as head of the IMF, but Credit Suisse’s CEO Tidjane Thiam is also in the mix at 10/1, according to Betway.

He might be an outsider for the job, but that may not stop Thiam feeling the need to publicly turn it down.

Last year, he was tenuously touted as a potential candidate for the presidency of the Ivory Coast, a role he was happy to rule himself out of but only after using the announcement as a platform to spell out all the reasons why he would be the best candidate for the job.

ONE MAN POSSIBLY hoping Thiam might jump ship is Iqbal Khan, who has just stepped down as CEO of Credit Suisse’s International Wealth Management business after losing a power struggle with Thiam.

Apparently, Khan wanted a bigger job. So if Thiam heads off to Washington, he might do what’s known

in the business as a “reverse Orcel” and rip up his resignation letter.

ONE MAN NOT mentioned as one of the IMF runners and riders is the aforementioned Andrea Orcel, who has launched legal proceedings against Santander. This is hardly a surprise.

From the moment Santander reversed its decision to appoint the UBS man as its next CEO in March, the episode had “legal action” written all over it.

The suit has not been made public, but reports say Orcel has asked Santander either to pay him €100m or honour its commitment and make him CEO, which would cost the bank half of that sum.

His alternative is to wait seven years before joining a rival if he wants to collect his full deferred comp from UBS.

To most people, being paid €50m to work or €100m not to don’t look like particularly painful options. But Orcel is not most people.

Perhaps the lawsuit might solve the mystery of why Santander actually reneged on its agreement to hire the volatile FIG rainmaker.

singled out Bruce Carnegie-Brown, a vice chairman at Santander who heads up the appointments and remunerations committees, for blame, saying that he “bears greater accountability than other directors for the failed recruitment of Orcel”.

But what did Carnegie-Brown know that Santander’s executive chair Ana Botin did not? Fun fact: Carnegie-Brown’s brother Ian runs the European consumer and retail investment banking team at UBS and was recruited in

investment bank.

Bellwether: n. From the practice of placing a bell around the neck of a castrated ram so that it might lead its flock

Bellwether


Who’s moving where… CREDIT SUISSE

wealth management

boss Iqbal Khan is

leaving Switzerland’s

second-largest bank

in the latest high-

level departure under

CEO Tidjane Thiam.

Khan’s surprise move

“to pursue other

opportunities” sparked

speculation the

43-year-old, who has

overseen solid growth

and profitability gains

at Credit Suisse, could

move to Swiss rivals

Julius Baer or UBS.

He will be replaced by

international wealth

management’s chief

financial officer, Philipp

Wehle.

Germany’s NORDLB has hired Marco Pidancet from UniCredit

as a senior director in its

debt capital markets

syndicate team, based

in Hanover. Pidancet

spent 16 years at

UniCredit’s corporate

and investment bank,

including as a director

for covered bonds and

SSA syndicate.

Asset manager CIFC,

which sold its first

European leveraged

loan CLO last week, has

hired Rinse Terpstra from Chenavari as a

senior analyst. CIFC

announced three other

recent analyst hires and

said it has completed

the first phase of

recruitment to its UK

research team.

Japan’s SMBC has

hired Sara Pirzada,

sources said. Pirzada,

currently a managing

director at Mizuho

Securities in New York,

is slated to start with

SMBC’s loan

syndication team in

the coming months,

the sources said. She

had been with Mizuho

for about seven years.

Emerging markets

traders Dean Cooper and Vinal Patel have

left ING, sources said.

Cooper joined ING in

November 2017 as a

credit market maker

focusing on Central

and Eastern Europe,

Turkey and the CIS.

Patel joined ING in

May 2016.


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

People&Markets

Laura Crosbie is

going back to NATWEST MARKETS

after a two-year stint

at ABN AMRO, a

source said. Crosbie

left NatWest Markets

in July 2017 to work in

ABN’s public-sector

DCM business. She

will work in NatWest’s

frequent borrower

group.

CREDIT SUISSE has

poached Erica Poon Werkun from UBS to

run its equity research

division in Asia Pacific,

with current head

Ernest Fong due to

retire. Poon Werkun

has spent 15 years at

UBS.

Chris Jones, HSBC’s

global head of local

currency syndicate, has

left the bank. Jones

joined in 2004 as head

of MTNs and

structured notes and in

2011 moved to the

non-core currency

group, responsible for

issuance in currencies

away from US dollars,

euros and sterling.

GOLDMAN SACHS

has promoted Philippe Perzi to run its financial

institutions group in

Australia and New

Zealand. Perzi is a

direct replacement for

Craig Murray, who

relocated to Hong

Kong last year to

become head of FIG

for APAC ex-Japan.

Kai Fang, is joining

CLSA as head of the

newly created financial

sponsors group,

sources said. Fang will

be based in Hong

Kong and joins from

China Renaissance,

where he was head of

China equity capital

markets.

BNP PARIBAS has

appointed Fumito Okuyama head of

global markets for its

securities business in

Japan. Okuyama

joined in August from

Citigroup and has

served as head of sales

for institutional

investors.

BAML names Guenthardt as Asia IB co-headBANK OF AMERICA MERRILL LYNCH has appointed Peter Guenthardtinvestment banking.

Guenthardt has been appointed co-head alongside Alex To and will relocate to Hong Kong to take up the role. He will continue as country executive for Singapore and South-East Asia until a successor is appointed.

He will report to Jiro Seguchi, head of APAC global corporate and investment banking, and Jack MacDonald and Thomas Sheehan, co-heads of global investment banking.

Guenthardt joined BAML in 2014 as co-head of APAC global capital markets after working at UBS, mostly in equity capital markets. He was appointed capital markets

sole head a year later when Jason Cox left for Deutsche Bank.

Guenthardt was named executive for Singapore and South-East Asia in 2016, swapping his position with Chris Gammons, who was appointed head of APAC global capital markets.Thomas Blott

Commerzbank merges corporate finance with tradingCOMMERZBANK

currency and commodities trading with its

capital markets unit that will be headed by Roman Schmidt, who has overseen the two separately since the start of the year.

The change is part of a restructuring of several parts of the German bank’s corporate clients division. Some of the changes were announced internally in October, one source said, but many only took effect last week.

for earnings in sales units for client groups and products.

Schmidt previously ran Commerzbank’s

oversight of FICC in January.Other new business units include:-A bonds division to keep primary,

secondary and sales all in one area. It includes all sectors - public sector, corporates and

Marie-Claire Ouziel, who reports to Schmidt.

-A new banks and public sector origination unit will be headed by Sylvia Moussalli and includes sovereigns, supranationals and

agencies, European banks and banks in international markets. Klaus-Peter Eitel will head SSA origination and syndication. Within banks origination, Anthony Vives de Montal will head European coverage, while Denis Rath will head the newly merged emerging markets and overseas coverage. Rath is currently based in Singapore in a DCM syndication and origination role, but will relocate to Frankfurt for the new role. Eitel, de Montal and Rath all report to Moussalli.

-A corporate origination and solutions unit, headed by Mirko Gerhold. Within that, Frank Nguyen heads the international corporate bond origination team and Karin Arglebe origination for German, Austrian and Scandinavian corporates.

COLLAPSED TALKSThe new capital markets division sits within the corporate clients business, and sits alongside a new transaction banking division that handles all payment transaction and trade products. That business will be headed by Stephan Mueller, who was previously the divisional board member for IT.

Commerzbank has pushed through the changes in the aftermath of the collapse of its merger talks with peer Deutsche Bank at the end of April.

In 2016, Commerzbank merged its corporate

German customers to form a unit with 70,000 corporate clients. The idea was to provide all investment products across corporate clients, the majority of whom are in the Mittelstand.

Michael Reuther, long-standing head of corporate clients, is due to leave the bank at the end of September. He has run the business since he joined Commerzbank in 2006, staying at the helm though several restructurings.Steve Slater, Daniel Stanton, Priscila Azevedo Rocha

The aim is to improve efficiency and profitability, and create clear responsibilities for earnings in sales units for client groups and products

Capital markets week ahead: Budweiser, CPPIB, WhataburgerKING OF IPOS Budweiser is set to go down as the biggest listing so far this year, with the

Busch InBev set to raise as much as HK$77bn (US$9.8bn) on Thursday. Even at the bottom of the range, the deal would pip the US$8.1bn listing of ride-hailing giant Uber in May and stand as the largest globally since SoftBank’s US$23bn Tokyo listing in October.

Unlike most jumbo IPOs in Hong Kong, the Budweiser deal comes with no cornerstone investors. However, the deal is nonetheless expected to generate decent demand – a consumer goods company that generates real earnings is something of a rarity in recent IPOs. Budweiser produces and sells more than 50 beer brands including Stella Artois, Skol and Corona. Cheers!

PENSION BOOK Canadian pension giant CPPIB hits the market with a 30-year euro-denominated bond. It’s the latest deal from the sector in recent months, as funds leverage up to meet targets as the 30-year-old Canadian model comes under strain. CPPIB, which manages the assets of 20 million members,

of extra leverage will help it plug that gap.

CHANGING THEIR TUNIS Tunisia is out with a

of what is expected to be a series of issues as

funding gap this year. The deal comes despite political opposition, with Tunisia’s parliament in May rejecting a plan to issue bonds, before eventually agreeing to the government’s plans a few weeks later.

YOU WANT FRIES WITH THAT? Banks will meet

buyout of Whataburger by BDT Capital

deal last month to take the burger chain, which traces its roots back to the 1950s, out of family control. The plan is to invest to allow it to expand and compete with the likes of Shake Shack.

SOLD DOWN THE RIVER Chinese real estate developer Zhongliang Holdings is targeting proceeds of HK$3.5bn (US$450m) from its Hong Kong IPO on Tuesday. Based in the Yangtze River Delta Economic Region, the company has projects in 124 cities across China, mainly

buyers and those who want an upgrade on their current homes. Shares begin trading on July 16.

TRADING PLACES Jefferies crosses the pond, as the US investment bank seeks to raise cash in the euro bond market. It will be hoping to get a helping hand from a decent set of second-quarter earnings last week. Revenues from sales and trading surged 29% to US$379m, contrasting with weakness seen by its larger rivals in April and May. The

string of research hires.

GET A LIFE! Swiss Re hopes to collect more than £850m from the London listing on Thursday of its life assurance arm ReAssure. It’s selling just over a quarter of its stake in the spin-off, which it hopes will help free the business to expand more aggressively in the UK’s £390bn closed life book industry. Investors are being tempted with generous dividends, with ReAssure set to

SUN, SEA AND SYNDICATED DEBT The Azores is hoping to capitalise on record low European government bond yields, as it comes to market with a 10-year euro deal. The mid-Atlantic archipelago, an autonomous region of Portugal, is seeking just over €220m. Conditions couldn’t be

better, with one banker saying: “The market has never been this supportive for smaller issuers to come to the market”.

WEEDING OUT DEMAND Canadian cannabis grower Flowr is expected to raise C$125m (US$95m) from a follow-on stock sale on Friday. The company’s Toronto-listed shares plunged by 20% in reaction to the deal, which is effectively an IPO that will aim to bring new investors into the register. The offering will also see Flowr, which has a market cap of C$500m, list its shares on Nasdaq.

SHEDDING A TIER Fineco Bank is out with a €200m Additional Tier 1. The Italian online lender, which was part of UniCredit before the country’s biggest lender was forced to sell off assets to fund a clean-up, is seeking to tap into the recent risk-on tone. The deal also comes against the backdrop of UniCredit wanting to further reduce its stake, which stands at just over 35%.

SECOND WIND Voltalia hopes to wrap up a €376m rights issue on Monday, proceeds from which will help the French renewable

capacity. The capital raise represents around 83.3% of Voltalia’s share capital and is not underwritten. It has already received subscription commitments for 75.3% of the targeted proceeds, equal to around €283m.

BANK BOOK Jinshang Bank hopes to raise HK$3.4bn (US$440m) from its Hong Kong listing on Thursday. The company will sell 860m primary shares, or 15% of the enlarged share capital.


“The bank is now ready for further transformation, and it is the right time for new leadership to take the division forward”DEUTSCHE BANK INVESTMENT BANK BOSS GARTH RITCHIE, P13

LAST WEEK IN NUMBERS€3bn – Amount raised by Saudi Arabia in

bond market–0.399% – New low for 10-year Bund yields after Christine Lagarde was nominated to head the ECB26bp – Widening in Broadcom’s bonds after fears the company could be downgraded to junk€100magainst Santander after the Spanish bank withdrew a job offer


People&Markets

No need to change TLAC standardGlobal regulators said the standard for major banks on how much loss-absorbing debt they should hold is working well and there is no need to change it, although more needs to be done to ensure it works better for home and host countries.

The Financial Stability Board last week said progress on setting the requirements for total loss-absorbing capacity (TLAC) and issuance by banks had been “steady and

It estimated global systemically important banks (G-SIBs) had issued between US$350bn and US$400bn each year for the past three years.

All relevant G-SIBs meet or exceed the TLAC target ratios of holding at least 16% of risk-weighted assets and 6% of the Basel III leverage ratio denominator.

“The FSB sees no need to modify the TLAC standard at this time,” it said in a technical review of implementation.

The FSB, which was set up in the wake

standard in November 2015. The aim is to

ensure major banks have enough loss-absorbing capacity to avoid needing taxpayer help if they run into trouble, and to minimise market disruption and keep critical functions working.

The capacity is often in the form of bonds that convert into equity or are wiped out if a capital ratio falls below a set level. The standard is in force in most major countries.

“JOB NOT COMPLETE”The FSB said more needs to be done to ensure banks are appropriately distributing the TLAC across their group, however. That is needed to keep both home and host regulators happy and reduce fragmentation of capital resources.

“The job is not complete,” said Mark Branson, chair of the FSB resolution steering group and CEO of Swiss regulator Finma. “Important challenges remain, particularly in ensuring that, in a crisis, TLAC will be available in the right amounts at all locations within a group,” he said.

The FSB said, as of 2018, about 67% of TLAC issued by major banks had been in US dollars and about 19% had been in euros. About two-thirds of G-SIBs issue TLAC out of a non-operating holding company and rely on structural subordination.

Most buyers have been asset managers, pension funds and insurers. It appeared banks had been able to issue TLAC in periods of increased market stress, albeit at higher spreads, the FSB report said.Steve Slater

EU banks face €135bn Basel IV headacheMajor European Union banks face a collective shortfall of €135bn (US$153bn) to meet global capital requirements by 2027, meaning they may need to use

their capital, the European Banking Authority said.

recommendations for the EU on meeting requirements for the Basel III accord - now referred to by the banking industry as Basel

crisis forced taxpayers to bail out many EU banks.

It said to fully implement the rules, banks would need to increase their capital by 24.4%, more than the 19% estimated by EBA

be lower if Basel’s recent amendments to capital rules for trading books are incorporated.

Basel III is an internationally agreed set of measures to strengthen regulation, supervision and risk management of banks.

The estimated €135bn capital shortfall is almost entirely among larger banks, and will be reduced to €58.7bn if banks were to

period.

gap, and for half of them the average minimum capital increase would be far lower at around 10%, and possibly even less

DIVIDEND THREAT?The Basel Committee on Banking Supervision, which drafted Basel III, and EU

capital requirements.

Bankers say an increase of about 20% counts as material, especially when lenders are under pressure from markets and investors to show they hold “management” capital buffers that put them well above the minimum requirements.

Gonzalo Gasos, head of banking supervision at the European Banking Federation, said the amount of capital European banks will need to raise would be higher to maintain these management buffers and avoid a drop in headline capital ratios.

He said banks might prove reluctant to

to pay dividends in a depressed market for valuations. “Banks need reassurance that they will be able to keep on paying dividends to attract investors,” he said.

March on the impact of Basel III, showing big European banks faced a 17.4% increase in minimum capital, while rivals in the US faced a minor hit or could see capital fall.

European lenders face a bigger challenge because European businesses tend to rely on

bond markets.Huw JonesSource: EBA

0

5

10

15

20

25

30

SmallMediumNext 67

big banks

Biggest 8

banks

0

5

10

15

20

25

30

%

Weighted average - 24.4%

IMPACT OF BASEL IV

ESTIMATED INCREASE IN CAPITAL FOR EU BANKS

It estimated global systemically important banks had issued between US$350bn and US$400bn each year for the past three years. All relevant G-SIBs meet or exceed their TLAC target


Nordea CEO to step downNORDEA, the Nordic region’s second biggest bank, said its chief executive Casper von Koskull will retire by the end of 2020 and it

successor for the former investment banker.

Koskull, 58, joined Nordea in 2010 after working at Goldman Sachs and UBS. He was appointed president and CEO of the Nordic

running its wholesale bank.Nordea said von Koskull, who will turn 60

in 2020, wanted to retire “following a long and intense career in banking”.

Von Koskull worked at Goldman from 1998 to 2010 as a managing director and partner, including as head of Nordic investment banking in London. From 1994 to 1998 he was a managing director at UBS in its Nordic investment banking division in London.

Nordea ranks as Europe’s 15th largest bank with a market capitalisation of US$29bn.

Last year it moved its headquarters to

domicile by a major bank in reaction to

crisis. It followed a dispute over what it

regarded as costly and unpredictable regulation in Sweden. Finland is part of the eurozone’s banking union.

But shares in Nordea and most other Nordic banks have tumbled this year as they came under intense scrutiny after Danske Bank became embroiled in a big money-laundering scandal at its Estonian branch.

Nordea booked a €95m (US$108m)

alleged money laundering, and also posted a

Steve Slater

New regs force a rewrite of ABS prospectusesEU rules for prospectuses, which take effect in two weeks, have forced securitisation bankers to rethink how they characterise the risks faced by investors buying their bonds.

Although much of the new EU Prospectus Regulation concerns offerings that target retail buyers, it will also require changes to the “risk factors” section of securitisation prospectuses - a part of deal documentation that has become increasingly bloated. The rules take effect from July 21.

It took Nationwide, for example, 45,000 words in the prospectus for its Silverstone RMBS vehicle in April to describe the risks in the deal.

That’s grown from the 28,000 words the Silverstone prospectus used in 2008.

And Nationwide is far from alone - the risk factors sections for all securitisation prospectuses are

strikingly obvious risks.For instance, redemption of notes “may

be affected by a high rate of default on the loans”, Nationwide told prospective buyers. It also warned how a decline in property values could affect loan to value ratios.

There are, of course, less straightforward factors laid out too, from set-off risks to Sonia.

But the new regulation aims to eliminate

masquerading as risk factors.ESMA says the risks described must be

Information which is not material or

relevant to the investment decision and thus undermine investor protection.”

IDIOSYNCRATIC RISK“The concern is that you run through 30 or 40 pages of risk factors and miss the one buried at the end which is the real idiosyncratic risk in the transaction - so a better way of sorting risks would help investors,” said Kevin Ingram, partner at Clifford Chance.

Issuers will need to decide whether to prioritise those bigger risks that are common to all securitisations, or prioritise a smaller risk that may be unique to a deal and therefore needs drawing to the attention of even experienced investors.

The process of redrafting prospectuses and getting regulatory approval could mean deals due to close after July 21 take longer to come to market.

“This won’t hold up a deal by weeks or months - it’s not like the introduction of Sonia when the market was waiting for a big player to come and set precedent,” said one securitisation banker.

“But you might need slightly more engagement with the listing authorities for

comfortable with what you’re putting out there,” the banker said.

For UK listings, the relevant authority is the UK Listing Authority, part of the FCA.

“In terms of actual engagement with the UKLA it’s a bit unknown how long it will take comments to come in, and what the

extent of those comments will be,” Ingram said.

“People who need to get a deal done in a particular time frame will probably leave a little longer in their timetables - that is just prudent deal management.”

SECURITISATION REGULATIONThe EU Securitisation Regulation that kicked in this year requires issuers to provide investors with a red prospectus before pricing, which is not supposed to have material changes waiting to be made.

Risk factors count as material, meaning

regulator is at least broadly comfortable with the language used before sending out the red.

Ingram said issuers were likely to follow one of two approaches to the risk factors section.

“One approach is to take comfort from securitisation being a wholesale market with professional investors and take the view it is therefore unlikely there will be a huge focus on restructuring securitisation risk factors by the listing authorities,” he said.

That suggests issuers who are simply focused on getting a deal out may just tweak prospectuses so they comply.

“But the big programmatic issuers especially may use it as an opportunity to rationalise things, by taking out a lot of the discursive language that has appeared, removing out of date risk factors and amalgamating others,” Ingram said.

Those issuers are under less time pressure - prospectuses for programmatic vehicles can be grandfathered from the new directive for a year.Chris Moore

“Important challenges remain, particularly in ensuring that, in a crisis, TLAC will be available in the right amounts at all locations”FINMA CEO MARK BRANSON, P19

It took Nationwide 45,000 words in the prospectus for its Silverstone RMBS vehicle to describe risks in the deal


People&Markets

Banks challenge NZ capital callMajor New Zealand banks and their Australian parents have cried foul over the last and most controversial of the Reserve Bank of New Zealand’s four capital review consultation papers, entitled “How much capital is enough?”

The central bank received 161 submissions and reported that many submitters, particularly from the general public, support higher capital requirements to ensure a safer banking system. But the country’s big four lenders – ANZ BANK, ASB, BNZ and WESTPAC – balked at what they say would be the huge cost of implementing the proposals.

The RBNZ estimated the four dominant banks would need to raise a combined NZ$20bn (US$13.43bn) of additional capital over the next

estimate given that Westpac and ANZ project an extra NZ$12.5bn or more between them.

The country’s biggest lender, ANZ New Zealand, said a capital requirement of this size would require the bank to “review, and reconsider the size, nature and operations of the New Zealand business”.

Westpac New Zealand warned that the “cumulative imposition of such high levels of regulatory capital on New Zealand banks will increase the cost to borrowers in New Zealand by more than 100bp”.

It also suggested that Australian parents may have to consider shrinking, demerging or selling their subsidiaries across the Tasman Sea if their returns on equity were

“COMMENSURATE WITH RISKS…”The RBNZ consultation paper called for the conservation buffer that all banks are required to hold to be raised to 7.5% of risk-weighted assets, from 2.5% currently, and for the introduction of a further 1.5% counter-cyclical buffer, alongside an extra 1.0% buffer for domestic systemically important banks.

Added to the existing requirement of Tier 1 capital equal to a minimum 6% of risk-weighted assets, this would translate to a new Tier 1 capital ratio requirement of 16% for D-SIBs and 15% for smaller banks, up

The regulator also proposed to maintain the current 2% minimum in Tier 2 capital that all banks are required to hold, though it is open to discussing whether Tier 2 capital should be dropped from the framework altogether given the expected hike in Tier 1 ratios.

The RBNZ said that, in general, respondents “support the Reserve Bank’s objective to ensure that New Zealand’s

economic and well-being impacts [social costs] of banking crises”.

The proposals have been welcomed by the International Monetary Fund.

“The new requirements would increase bank capital to levels that are

risks emanating from the dominance of the four large banks with similar concentrated exposure to mortgages, business models and funding structures,” the IMF said on June 25 following a regular consultation mission.

But the banks question the need for levels of capital well above other jurisdictions and the central bank’s own stress tests, in a country whose banking system proved

The banks also argued that some convertible debt instruments should be an option as a substitute for part of the proposed increase in equity capital, that they be given

new requirements, and for the impacts of the changes to be periodically assessed.

The RBNZ will continue to consider

period is due to begin next April.John Weavers

Investors shun China bond auctionlast week, dealing a setback to efforts to create a market for illiquid and non-performing assets.

An unnamed seller last Tuesday offered Rmb1.3bn (US$189m) of 7% perpetual notes and Rmb500m of three-year private placement notes due October 2020, both issued by HNA Group subsidiary TIANJIN

AIRLINES.The auction, however, failed to attract any

80% of the average last traded price.

bonds failed because of a lack of enough willing buyers,” said a bond trader.

Defaults on repo transactions have become more common in recent months, and have accelerated since the government takeover of Baoshang Bank in late May made it harder for smaller banks to access funding.

China Foreign Exchange Trading System introduced blind auctions last year to help

create a market for illiquid securities, but market participants do not think the format

as investors have no appetite for the underlying bonds.

The trader said there had been few trades in the Tianjin Airlines bonds ahead of the auction and they were bid at close to par before the auction.

A BETTER WAY?Some defaulted bond issues, including two from Wintime Energy, have been sold via

bonds.Tianjin Airlines is not in default, but

investors have long been concerned about

Group, which has already defaulted on some overseas loans.

“The discounted prices at 80% were still too high and it’s not worth it,” said the trader. “Defaulted bonds at steeper

discounts from face value look more attractive.”

A credit rating analyst said a blind auction is not enough to encourage counterparties to take more low-rated bonds or lower their standards for what they accept as collateral.

“A better way to mitigate credit risk is

risk evaluation on counterparties and bonds used as collateral, respectively,” he said.

“For instance, counterparties with high ratings but with low-rated bonds can be accepted, or counterparties with low ratings need to use high-rated bonds as collateral. It might take quite long because of China’s long-standing pricing distortion in the bond market.”

of Financial Market Institutional Investors said the blind auction system would be used for other types of illiquid bonds, including subprime asset-backed securities.Yanfei Wang, Daniel Stanton


“The new requirements would increase bank capital to levels

IMF ON PROPOSED STRICT NEW CAPITAL RULES IN NEW ZEALAND, P21

Morgan Stanley nears China JV controlMorgan Stanley’s partner in its Chinese securities joint venture has put a 2% stake up for sale, paving the way for the US bank to take majority control.

Huaxin Securities will sell a 2% stake from its 51% shareholding in MORGAN STANLEY HUAXIN

SECURITIES in an auction process that runs

last week.Morgan Stanley is looking to increase its

stake in the JV to 51% from 49%.UBS last year increased its stake in its

Chinese securities joint venture, UBS Securities, to 51% through a similar process. In that case, UBS completed the acquisition less than three months after the vendors announced an auction process.

Morgan Stanley is likely to receive regulatory approval for the majority stake in the second half of this year, Reuters reported last month, citing people with direct knowledge of the matter.

It is one of many international banks seeking either to acquire a majority stake in existing JVs

foreign partner holds a 51% stake, after foreign ownership rules were eased last year.

In April, Credit Suisse agreed with its partner Founder Securities to acquire a 51% interest and is currently awaiting regulatory approval. JP Morgan and Nomura have also received preliminary approval to set up JVs from scratch with majority control, although both are still

Despite much fanfare, the JVs have so far yielded only modest results. In 2018, the seven Sino-foreign JVs recorded a combined net loss of Rmb48.1m (US$7m). Morgan Stanley Huaxin was the second worst performer, reporting a net loss of Rmb99.8m.

HSBC Qianhai Securities was the worst performer, recording a net loss of Rmb122.1m. The JV was only launched in December 2017

a majority stake. HSBC was able to invest

China, Hong Kong and Macau.Steve Garton, Karen Tian

Singapore reviews REIT gearingSingapore is considering a relaxation of the 45% gearing limit on locally listed real estate investment trusts to give them more

The Monetary Authority of Singapore last week launched a consultation paper on raising the leverage limit to 50%, along with the introduction of a minimum interest coverage ratio.

The central bank is also proposing to ease equity fundraising for REITs by removing the requirement to obtain a “restricted scheme” status when making a share offer to accredited and other investors.

“It is a positive move,” said one debt origination banker. “It is not a big increase in the [gearing] limit but it will help a

bidding for a foreign asset that needs to be funded, especially against any foreign rivals

higher limits, or against private equity funds.”

Singapore and Hong Kong both impose a 45% gearing cap on REITs while Malaysia has a slightly higher 50% limit. In Thailand, investment-grade REITs can gear up to 60%,

while Belgium, Germany and the Netherlands have limits of 60% to 66.25%. REITs in the US, Canada, Australia, France and Japan face no such restrictions, while those in the UK are only subject to a minimum interest coverage ratio of 1.25x.

MORE FLEXIBILITYREITs in Singapore have argued for more

through the equity markets.“Funding through debt – either through

bonds or loans – is cheaper and faster than

REIT is competing for overseas assets,” said the banker. “The REIT can issue bonds many times a year, but you can’t issue that many units whether through public or private placements as that is very dilutive to shareholders.”

The MAS is asking for views on increasing the leverage limit to 50% with the addition of a minimum ICR of 2.5x. It is also asking whether REITs that have shown good

leverage further to 55%.Kit Yin Boey, S Anuradha

€100m CLAIMAndrea Orcel is making a €100m (US$113m) legal

claim against SANTANDER after the Spanish bank

withdrew an offer for him to be its chief executive,

a source said. The civil lawsuit claim is for breach

of contract.

The job offer was dropped in January as

Santander said it would not meet the Italian

banker’s pay expectations in an unusual U-turn for

such a high-level banking appointment. Orcels’s

claim has not been made public. Spanish online

website El Confidencial, citing sources, said the

lawsuit demanded Santander fulfil its contract

with Orcel or pay damages.

The newspaper said the €100m included the

salary he gave up at UBS and the earnings he

would have received from Santander.

LIFE BANHong Kong’s securities regulator has issued

a lifetime ban to Tim Leissner, the former

Goldman Sachs banker who has been embroiled

in a money-laundering scandal surrounding

Malaysian state investment firm 1MDB. THE

SECURITIES AND FUTURES COMMISSION said Leissner,

who has pleaded guilty to charges in the US

related to 1MDB and is awaiting sentencing, had

demonstrated “a serious lack of honesty and

integrity”.

Leissner has received similar bans elsewhere,

including Singapore and the United States.

Leissner was responsible for managing the

relationship with 1MDB when the fund hired

Goldman to arrange three bond issues in 2012-

13. The US Department of Justice estimates

US$4.5bn was misappropriated from 1MDB

between 2009-14, including some of the funds

that Goldman helped raise. The bank has denied

any wrongdoing and said certain members of

the former Malaysian government and 1MDB

lied to it about how the bond proceeds would

be used.

INDEPENDENCE DAYBNP PARIBAS will source the bulk of its Asia Pacific

equity research from independent research

provider MORNINGSTAR. The French bank said the

agreement includes coverage for about 150 stocks

from six industry sectors in China, Hong Kong,

Singapore, South Korea and Taiwan.

Most of BNP Paribas’ in-house equities research

team, mainly in Hong Kong and Singapore, will

depart as a result of the pact but the bank will

retain roughly half a dozen senior industry sector

specialists, a source said.

The bank said its total stock coverage in the

region as a result of the partnership will be around

330 companies including those listed in India,

where it will continue to undertake equity research

in-house.

IN BRIEF

FRONT STORY FINANCIALS

Pru demerger T2 poses pricing questions Insurer readies capital for future UK entity

IPT to reoffer spread move raises eyebrows

PRUDENTIAL PLC bolstered the future M&G Prudential with a £300m 30NC5 Tier 2 last Thursday, although observers criticised the pricing process as generous IPTs saw the deal more than 16 times covered at the peak and a 60bp leap to reoffer.

Prudential is spinning off the UK business from its US and Asian operations to create two separately listed companies.

The demerger may not be completed until the end of 2019 but Prudential has sought to effectively pre-capitalise the UK entity by issuing debt for the future M&G Prudential to take on when ready.

£1.63bn-equivalent triple-tranche Tier 2

The new issue - like the bigger deal in September - contains a substitution clause enabling the issuer to switch to M&G Prudential, or any subsidiary of M&G Prudential, once the group has split.

Unlike the previous trade, the deal had added call optionality for the issuer with a

sector, as well as the 10-year call.Although the issuer substitution option

is fully priced in, meaning Prudential’s

insurance comparables, these unusual

price discovery process.Even so, market participants away from

the deal said it was marketed at a surprisingly generous price.

Bookrunners Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Societe Generale marketed the £300m no-grow 2049 non-call 2024 deal at initial price thoughts of Gilts plus 410bp area.

By comparison, Prudential’s longer 5.625% 2051NC2031 - sold as part of September’s triple-trancher - was trading at around 365bp, bid.

“That is a phenomenally generous level

“The order book suggests it was cheap by either metric and people were piling in

to fair value for a conventional 30NC10, and that the issuer had paid nothing for added optionality of the

A lead manager defended the pricing strategy.

we’ve seen, so there’s no comps out there

“There was always an element of price

and inside where bank precedents are, inside of fair value, which tells you that the investors that bought it were not looking at the call optionality but the desire for yield. These are exceptional

He added that Prudential’s comparables had not moved in the recent rally.

“Insurance always lags the market in a rally and this is one of those catalysing

After the 410bp area IPTs, guidance was narrowed to 375bp area with books

at 350bp, with books peaking in excess of £5.25bn. They dropped to more than £4.8bn.

The sharp move tighter irked some investors.

“I don’t think they should have done

assistant portfolio manager at Merian Global Investors.

“I think a 12.5bp move would have been better, as they just got it hugely wrong at the start and should have worn some of

was designed with a view to a potential improvement in M&G Prudential’s funding costs once the entity is established and no longer shrouded by uncertainties, giving it the option of

level.

FUTURE UNCERTAIN

Prudential has been trying to present investors with a clear idea of the shape of the future M&G Prudential and to that end held an investor conference in London last Wednesday.

M&G Prudential said it will hold around £3.5bn of subordinated debt following the demerger, while its initial shareholder Solvency II ratio will be around 170%.

But Prior said it appeared from M&G Prudential’s latest roadshow that some uncertainty still exists and they are still

company’s capital plans.“Their [regulatory] 140% Solvency II

ratio is also obviously at the lower end of

“As yet I have not been able to ascertain the expected capital generation from the business, but I do recognise that the M&G business is a strong franchise.

“Evidently it will be interesting to watch how the insurance business develops and where capital generated

Earlier this year, Prudential further bolstered M&G Prudential’s future capital by adding an issuer substitution provision to two outstanding Tier 2 notes - the £600m 5% 2055NC2035 and the £700m 5.7% 2063NC2043 - via a consent solicitation.Tom Revell


BONDS SSAR 25 Corporates 30 FIG 36 Covered Bonds 39 High-Yield 40 Structured Finance 42


270

290

310

330

350

370

390

02/0702/0502/0302/01/2019

INSURERS LAG MARKET PERFORMANCE YTD

GBP IBOXX INSURANCE SUBORDINATED INDEX -

ASSET SWAP SPREAD


Lower rates boost US HY Volume surges as investors seek returns

Expectations of lower rates have helped drive an increase in high-yield bond volumes after a disappointing 2018, and buyside sources

activity in the second half of the year.A surge of deals in the past two months

has driven an increase of almost 20% in

year, IFR data show.“Issuance has probably beat expectations

given the slow start, as well as a couple of periods where the market has remained

Borrowers sold US$26.3bn and US$27.9bn of new bonds in May and June, respectively, taking year-to-date supply to US$132.678bn, making for a 19.31% increase on last year’s tally, according to IFR data.

Those months were the busiest since January 2018 and have helped volumes recover after a sluggish start to the year.

All this follows the lightest year for new supply since 2009, according to JP Morgan.

Volumes through April were running US$1.5bn behind last year’s slow pace, according to IFR data.

In total, 206 issuers have tapped the market so far this year, compared with 201 in 2018.

BONDS DRAW DEMANDHigh-yield borrowers were slow to step back into the market after a spike in volatility and bond yields in December last year.

But a more dovish Federal Reserve has

products such as leveraged loans in favour of

Corporate issuers have taken note.Until recently, the loan market had been a

cheaper source of merger and acquisition

more on the bond market this year. Average yields have dropped from around 8% in January to 5.9%, according to ICE BAML data.

This has supported deal volumes.

said one portfolio manager.That said, investors have appeared

cautious on investing in more aggressive and risky deals of late, meaning primary markets in the second half of the year are unlikely to see a wave of buyout deals.

“The market is not really in love with that

director of high-yield at Amundi Pioneer.“That’s making it harder for private equity

Secondary market spreads also indicate that Triple C rated bonds have lagged a broader rally in high-yield debt.

And a rising stock market may also keep a lid on merger and acquisition activity.

“With the stock market appreciating in a broad way, you would assume that making acquisitions becomes expensive even if you

manager.

MORE REFINANCING AHEADLower rates and a drop in high-yield credit spreads have also encouraged corporate

particularly on the back of a rally in Treasury rates that picked up pace in May and June.

According to JP Morgan, 67% of total high-yield volume this year has been for

proportion seen in 2018.IFR data show that issuers have looked to

term out their debt with 79% of new bonds sold with maturities from six to 10 years.

And with the market pricing in more rate

activity could remain strong in the second half.“Every Double B company should hit the

said Lale Topcuoglu, senior fund manager at J O Hambro Capital Management. “A decent amount of the market is trading at a yield

That could help keep deal volumes ahead of last year’s sluggish pace.

“If rates stay as low as they are and people feel good about credit and equity markets, the pace of issuance could - on a seasonally adjusted basis - continue through the

David Bell

WEEK IN NUMBERS

-0.058% THE YIELD THAT THE ITALIAN TWO-YEAR

BTP FELL TO LAST WEEK, THE FIRST TIME IT HAD GONE NEGATIVE SINCE MAY 2018

€100m THE SIZE OF THE CLAIM FILED BY

ANDREA ORCEL AGAINST SANTANDER AFTER THE SPANISH BANK WITHDREW AN OFFER FOR HIM TO BE ITS CHIEF EXECUTIVE. THE BANK’S BONDS WERE UNAFFECTED BY THE NEWS

13% THE DECLINE IN US HIGH-GRADE

ISSUANCE VOLUMES IN THE FIRST HALF COMPARED WITH THE SAME PERIOD LAST YEAR. IN TOTAL, VOLUMES REACHED US$601.7bn

-0.403% THE YIELD THAT 10-YEAR BUNDS

FELL TO LAST WEEK, YET ANOTHER LOW, AFTER REPORTS THAT CHRISTINE LAGARDE IS EXPECTED TO BE THE NEW HEAD OF THE ECB

26bp THE WIDENING IN SOME OF

BROADCOM’S BONDS AFTER FEARS THE COMPANY COULD BE DOWNGRADED TO JUNK FOLLOWING REPORTS IT IS IN TALKS TO BUY SYMANTEC

-0.5

0

0.5

1.0

1.5

2.0

2.5

2/1/

182/

2/18

2/3/

182/

4/18

2/5/

182/

6/18

2/7/

182/

8/18

2/9/

182/

10/1

82/

11/1

82/

12/1

82/

1/19

2/2/

192/

3/19

2/4/

192/

5/19

2/6/

192/

7/19

%

-0.4-0.3-0.2-0.10.00.1

0.20.30.40.50.60.70.8

2/1/

182/

2/18

2/3/

182/

4/18

2/5/

182/

6/18

2/7/

182/

8/18

2/9/

182/

10/1

82/

11/1

82/

12/1

82/

1/19

2/2/

192/

3/19

2/4/

192/

5/19

2/6/

192/

7/19

%

Source: IFR

0

5,000

10,000

15,000

20,000

25,000

30,000

20192018

JunMayAprMarFebJan

US$m

HIGHER GROUND

FIRST HALF ISSUANCE VOLUMES IN US HIGH-YIELD

2019 VS 2018

SSAR

US DOLLARS

KFW REOPENS US DOLLARS WITH BASIS HELP

KFW spotted a window to reopen the US dollar market with a three-year Global

currency for three weeks.Bankers said the German agency took

advantage of improved funding conditions for euro-based issuers: the three-year basis swap had widened from -18.5bp at the beginning of the previous week to -21bp last Wednesday, Eikon data showed.

Marketing for the SEC-registered August 2022s started at swaps plus 7bp area last Tuesday afternoon via Barclays, Morgan Stanley and RBC.

Books then opened last Wednesday morning at the same level, leads setting the spread at 6bp an hour and a half or so later and going on to size at US$4bn just after 2pm. Books closed over US$5.4bn.

impressive considering the US is half closed

away.The closest liquid maturities are a US$4bn

2.125% June 2022 bid on Tradeweb at 6.2bp and a US$3bn 2% October 2022 at 8.2bp.

KfW’s last three-year, US$5bn 2.5% due February 2022, was bid at 3.7bp at the time of the mandate but peaked at 5.3bp early last Wednesday afternoon as swap spreads ground tighter.

IFR calculations showed the reoffer level coming out at Euribor less 20bp - roughly

“When the costs look attractive they need

“If the basis remains where it is into next

The deal was KfW’s third last week and followed an oversubscribed sterling tap last Monday but a poorly received euro increase a day later.

EUROS

CPPIB PUSHES INTO THE FUTURE

CPPIB CAPITAL is set to sell its longest euro deal so far, a 30-year benchmark that is likely to price this Monday.

The Aaa/AAA/AAA issuer, owned and guaranteed by the Canada Pension Plan Investment Board, has mandated Bank of America Merrill Lynch, Citigroup, Goldman Sachs and JP Morgan for the trade.

“Just like many other issuers, they are

said a banker away from the deal.CPPIB last visited the euro market in

year Green bond at 16bp over swaps on

Tradeweb at plus 8.3bp on Friday afternoon.

March 2033, which was quoted just inside plus 9bp.

CPPIB this time is sticking to its tried-and-tested formula of mandating on a Friday for a Monday execution.

The market is also expecting a euro issue from the EUROPEAN FINANCIAL STABILITY FACILITY, which has sent a request for proposals for a deal this week.

“For EFSF it makes more sense to tap an existing line than to open a new one, or to open a new 10-year alongside a tap of one of

banker.A third banker agreed. “When you only

have working capital needs, it makes no sense to open a new 30-year-plus line, even

February 2056, bid on Tradeweb at 25bp over swaps.

in funding needs for the quarter, with the


BONDS SSAR

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING JULY 4 2019

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover

Jul 2 2019 UK £3bn 0.625 Jun 7 2025 0.620 1.91

Jul 3 2019 Germany €3.1665bn 0.000 Oct 18 2024 -0.660 1.51

Jul 4 2019 Spain (i) €434m 0.150 Nov 30 2023 -1.037 4.00

Jul 4 2019 Spain €549m 1.950 Apr 30 2026 -0.105 3.24

Jul 4 2019 Spain €1.556bn 0.600 Oct 31 2029 0.257 1.22

Jul 4 2019 Spain €2.069bn 2.700 Oct 31 2048 1.165 1.19

Jul 4 2019 France €4.972bn 0.500 May 25 2029 -0.130 1.96

Jul 4 2019 France €2.05bn 1.250 May 25 2034 0.230 2.22

Jul 4 2019 France €2.974bn 1.500 May 25 2050 0.800 1.47

Source: IFR

ALL INTERNATIONAL BONDS (ALL CURRENCIES)BOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share

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

1 JP Morgan 655 165,217.80 7.6

2 Citigroup 602 148,002.18 6.8

3 Barclays 501 134,575.39 6.2

4 HSBC 584 120,836.14 5.6

5 BAML 505 118,661.90 5.5

6 Goldman Sachs 402 101,724.53 4.7

7 Deutsche Bank 458 100,323.69 4.6

8 BNP Paribas 406 95,100.02 4.4

9 Credit Agricole 310 73,180.35 3.4

10 Morgan Stanley 330 73,087.84 3.4

Total 3,032 2,162,139.63

Including Euro, foreign, global issues. Excluding equity-related debt, US Global ABS/MBS.

Source: Refinitiv SDC code: J1

ALL BONDS IN EUROS BOOKRUNNERS: 1/1/2019–30/6/2019


bank or group issues €(m) (%)

1 BNP Paribas 226 53,030.25 7.1

2 JP Morgan 158 48,271.04 6.5


4 Barclays 155 44,468.02 6.0

5 SG 160 43,797.04 5.9

6 HSBC 206 43,219.23 5.8

7 Deutsche Bank 188 41,161.87 5.5

8 UniCredit 188 37,778.02 5.1

9 Citigroup 126 31,137.55 4.2

10 Goldman Sachs 108 30,439.21 4.1

Total 940 744,602.34

Including Euro-preferreds. Excluding equity-related debt, US Global ABS/MBS.

Source: Refinitiv SDC code: N1

ALL INTERNATIONAL GREEN BONDSBOOKRUNNERS: 1/1/2019–30/6/2019



1 HSBC 40 5,543.59 7.5


3 BAML 24 4,542.16 6.1

4 BNP Paribas 24 4,449.05 6.0

5 JP Morgan 24 3,757.83 5.1

6 Citigroup 24 3,564.79 4.8

7 SG 15 2,876.88 3.9

8 UniCredit 11 2,503.23 3.4

9 Barclays 15 2,305.17 3.1

10 ING 16 2,305.02 3.1

Total 141 74,139.40

Excludes social bonds and mixed use of proceeds.

Source: Refinitiv SDC code: JG1

AZORES TO CAPITALISE ON RECORD LOW YIELDS

The AUTONOMOUS REGION OF AZORES is hoping to capitalise on record low European government yields to tap the market with a potential 10-year euro.

The archipelago, which alongside Madeira is one of the autonomous regions of

Portugal, has mandated Beka Finance and Credit Agricole

“The market has never been this supportive for smaller issuers to come to the

“Just a year ago, a small deal like this would have struggled. Now everyone is trying to pick up some yield and supporting even the most

Portuguese bonds have rallied since Mario Draghi’s Sintra speech on June 18, when he

failed to increase. The yield on its 10-year reached a record low of 0.28% last Wednesday after Christine Lagarde was nominated to replace Draghi as head of the central bank.

Fitch assigned a BBB- (stable) rating last


ALL INTERNATIONAL BONDS (1/1/2019–30/6/2019) 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 320 211,448 267 192,992 52 18,410 1 45

France 219 165,008 193 152,069 24 11,808 2 1,131

United Kingdom 193 132,496 126 85,312 59 43,575 8 3,610

Spain 83 73,043 70 70,275 10 1,433 3 1,335

Italy 61 72,033 54 66,215 7 5,818 – –

Luxembourg 102 68,148 93 63,724 9 4,425 – –

Netherlands 106 56,222 89 49,549 15 6,321 2 351

Ireland 28 36,174 20 32,525 8 3,649 – –

Sweden 98 31,437 58 26,714 40 4,724 – –

Belgium 29 26,986 25 25,257 3 1,562 1 168

Norway 50 23,651 38 21,011 12 2,640 – –

Austria 30 22,677 27 21,836 3 841 – –

Finland 50 21,234 29 19,013 21 2,221 – –

Switzerland 31 21,229 24 14,882 6 5,043 1 1,304

Denmark 24 13,774 17 12,774 6 626 1 374

Turkey 12 10,608 12 10,608 – – – –

Russian Federation 8 10,334 8 10,334 – – – –

Portugal 5 6,597 5 6,597 – – – –

Greece 4 6,517 4 6,517 – – – –

Cyprus 6 4,377 6 4,377 – – – –

Romania 2 3,578 2 3,578 – – –

Poland 3 2,937 3 2,937 – – – –

Slovenia 3 1,997 2 1,941 1 56 – –

Jersey 3 1,958 2 1,574 1 385 – –

Lithuania 1 1,662 1 1,662 – – – –

Croatia 1 1,662 1 1,662 – – – –

Ukraine 2 1,478 2 1,478 – – – –

Iceland 9 1,265 3 916 6 349 – –

Latvia 2 1,127 2 1,127 – – – –

Slovak Republic 1 1,117 1 1,117 – – – –

Serbia 1 1,110 1 1,110 – – – –

Uzbekistan 1 1,000 1 1,000 – – – –

Isle of Man 2 948 2 948 – – – –

Belarus 2 600 2 600 – – – –

Guernsey 2 578 1 374 1 205 – –

Czech Republic 1 551 1 551 – – – –

Malta 1 540 1 540 – – – –

Liechtenstein 2 298 2 298 – – – –

Georgia 1 200 1 200 – – – –

Kazakhstan 1 83 1 83 – – – –

Monaco 1 77 1 77 – – – –

Europe 1,501 1,038,758 1,198 916,350 284 114,090 19 8,318

United States of America 804 658,511 649 573,084 117 71,226 38 14,202

Canada 113 81,228 75 71,478 14 8,267 24 1,482

North America 917 739,739 724 644,562 131 79,493 62 15,684

Australia 53 24,873 39 21,868 13 2,703 1 302

New Zealand 8 4,288 8 4,288 – – – –

Australasia 61 29,161 47 26,156 13 2,703 1 302

Mexico 16 14,098 15 13,753 – – 1 345

Brazil 12 13,057 11 12,457 1 600 – –

Chile 9 6,080 9 6,080 – – – –

Cayman Islands 6 3,359 5 2,932 1 427 – –

region’s high debt in relation to operating revenue.

The issuer is also rated by Moody’s, which raised it a notch in October to Ba1 (stable) shortly after upping the sovereign to Baa3.

According to an investor presentation, its debt stock as a percentage of GDP remains at a sustainable level, at 39.2% as of December 2017, well below the European Union

average of 81.6%. Portugal, for comparison, is rated Baa3/BBB/BBB/BBB by Moody’s/S&P/Fitch/DBRS.

RARE ASFINAG SHINES UNDER THE AGENCY SPOTLIGHT

Demand piled in for ASFINAG’s market return,

the scarcity of the name to shine on a bumper day for agency supply.

The Austria-guaranteed issuer had not tapped the market since October 2017, when

This time around, books closed at more

treasuries, according to a lead.


BONDS SSAR

ALL INTERNATIONAL BONDS (1/1/2019–30/6/2019) COUNTRY VS TYPE OF INSTRUMENT CONTINUED



Venezuela 5 3,340 5 3,340 – – –

Bermuda 7 3,048 5 2,241 2 807 – –

Dominican Republic 1 2,483 1 2,483 – – – –

Colombia 2 2,398 2 2,398 – – – –

Ecuador 2 2,246 2 2,246 – – – –

Panama 4 1,867 4 1,867 – – – –

Uruguay 1 1,240 1 1,240 – – – –

Bahamas 2 955 2 955 – – – –

Peru 1 750 1 750 – – – –

Paraguay 1 500 1 500 – – – –

Argentina 1 492 1 492 – – – –

British Virgin Islands (UK) 4 388 4 388 – – – –

Mauritius 1 260 1 260 – – – –

Honduras 1 200 1 200 – – – –

Bolivia 1 150 1 150 – – – –

Latin America/Caribbean 76 56,910 72 54,731 4 1,834 – 345

Saudi Arabia 5 21,362 4 21,062 1 300 – –

Qatar 9 15,817 7 14,817 2 1,000 – –

United Arab Emirates 25 7,531 20 5,311 5 2,220 – –

Israel 1 2,873 1 2,873 – – – –

Bahrain 3 1,055 2 643 1 413 – –

Kuwait 1 300 1 300 – – – –

Middle East 44 48,937 35 45,005 9 3,933 – –

China 242 106,357 217 94,320 12 7,040 13 4,997

Japan 60 42,530 47 38,032 10 4,149 3 348

Hong Kong 75 29,646 70 27,336 2 825 3 1,485

South Korea 45 21,839 36 19,645 9 2,195 – –

Philippines 40 13,253 35 11,229 5 2,024 – –

India 26 13,160 24 12,860 2 300 – –

Indonesia 16 8,454 16 8,454 – – – –

Singapore 22 8,144 17 7,024 4 975 1 145

Sri Lanka 3 4,574 3 4,574 – – – –

Malaysia 10 2,532 7 2,239 2 93 1 200

Taiwan 3 1,347 2 1,297 – – 1 50

Thailand 2 1,299 1 999 1 300 – –

Mongolia 3 740 3 740 – – – –

Macau 1 600 1 600 – – –

Laos 1 120 1 120 – – –

Asia-Pacific 549 254,594 480 229,469 47 17,900 22 7,226

Egypt 3 6,569 3 6,569 – – – –

Ghana 1 3,000 1 3,000 – – – –

Kenya 1 2,100 1 2,100 – – – –

South Africa 3 1,908 3 1,908 – – – –

Ivory Coast 6 1,442 6 1,442 – – – –

Gabon 3 1,192 3 1,192 – – – –

Nigeria 2 694 2 694 – – – –

Benin 1 561 1 561 – – – –

Togo 2 498 2 498 – – – –

Burundi 1 497 1 497 – – – –

Africa 23 18,460 23 18,460 – – – –

Total 3,171 2,186,559 2,579 1,934,733 488 219,952 104 31,873

Source: Refinitiv

“There was also high participation of domestic banks alongside non-domestic

The solid books could also be attributed to the characteristics of the issuer, a second lead said.

“There is demand because it is a very rare name, it is guaranteed and there are not many guaranteed agencies, it is HQLA

eligible, and it is positive yield, so it ticks a

Marketing started at 1bp area through swaps. But as orders grew, leads Credit Agricole, Goldman Sachs, JP Morgan and UniCredit tightened to less

For pricing references leads looked at

sovereign curve.

September 2025, bid on Tradeweb around

September 2030 at 5.5bp. Those equate to bid spreads in the mid-teens and high 20s over RAGBs.

Leads, however, estimated fair value in the high teens over the Austria curve, equating to swaps less 3bp-4bp.


ALL INTERNATIONAL BONDS (1/1/2019–30/6/2019) CURRENCY VS TYPE OF INSTRUMENT



US Dollar 1,461 1,137,683 1,207 1,005,697 201 111,587 53 20,399

Euro 958 841,214 801 777,806 145 59,133 12 4,275

British Pound 184 113,581 131 75,799 49 34,809 4 2,972

Japanese Yen 51 19,715 44 16,355 4 3,012 3 348

Australian Dollar 119 15,171 110 12,406 8 2,464 1 302

Swiss Franc 68 14,808 67 13,504 – – 1 1,304

Swedish Krona 100 12,315 50 7,043 50 5,272 – –

Norwegian Krone 73 7,473 42 4,872 31 2,601 – –

Canadian Dollar 32 5,471 7 3,689 1 750 24 1,033

Chinese Renminbi 25 4,710 25 4,710 – – –

Hong Kong Dollar 43 4,304 37 3,209 – – 6 1,095

Singapore Dollar 12 2,870 11 2,724 – – 1 145

New Zealand Dollar 9 1,408 9 1,408 – – – –

Dominican Repub Peso 1 1,001 1 1,001 – – – –

Polish Zloty 3 848 2 523 1 325 – –

South African Rand 17 571 17 571 – – – –

Danish Krone 2 547 2 547 – – – –

Indonesian Rupiah 13 531 13 531 – – – –

Peruvian Sol 1 516 1 516 – – – –

Russian Rouble 6 498 6 498 – – – –

Indian Rupee 2 314 2 314 – – – –

Brazilian Real 9 294 9 294 – – – –

Thai Baht 2 190 2 190 – – – –

Turkish Lira 6 153 6 153 – – – –

Philippine Peso 1 101 1 101 – – – –

Belarusian Ruble 1 100 1 100 – – – –

Romanian Lei 2 63 2 63 – – – –

Nigerian Naira 1 49 1 49 – – – –

Mexican Peso 3 42 3 42 – – – –

Zambian Kwacha 1 13 1 13 – – – –

Argentine Peso 1 7 1 7 – – – –

Total 3,207 2,186,558 2,612 1,934,733 490 219,952 105 31,873

Source: Refinitiv

ALL US DOLLAR FIXED-RATE GLOBALS BOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share bank or group issues US$(m) (%)

1 Citigroup 120 36,435.79 9.8

2 JP Morgan 135 35,536.06 9.5

3 Barclays 94 29,943.14 8.0

4 BAML 115 27,501.44 7.4

5 Goldman Sachs 94 27,168.47 7.3

6 Morgan Stanley 73 20,478.24 5.5

7 Wells Fargo 89 17,234.99 4.6

8 RBC 63 16,373.02 4.4

9 Deutsche Bank 44 13,702.03 3.7

10 Mizuho 55 12,720.72 3.4

Total 265 372,118.59

Excluding equity-related debt, ABS/MBS.

Source: Refinitiv SDC code: O5

ALL SOVEREIGN BONDS IN EUROSBOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share bank or group issues €(m) (%)

1 JP Morgan 20 14,848.97 12.2

2 BNP Paribas 16 11,080.68 9.1

3 HSBC 13 10,217.96 8.4

4 SG 14 10,016.74 8.2

5 Citigroup 15 8,619.74 7.1


7 Goldman Sachs 13 8,037.23 6.6

8 Barclays 10 6,970.63 5.7

9 Deutsche Bank 9 4,215.97 3.5

10 UniCredit 3 3,859.42 3.2

Total 41 121,536.01

Excluding ABS/MBS.


ALL INTERNATIONAL US$ BONDSBOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 447 104,084.39 9.3

2 Citigroup 436 99,719.13 8.9

3 BAML 365 76,820.25 6.9

4 Barclays 296 70,794.51 6.3

5 Goldman Sachs 290 65,247.79 5.8

6 Morgan Stanley 251 53,974.53 4.8

7 HSBC 258 51,774.94 4.6

8 Credit Suisse 241 48,304.27 4.3

9 Deutsche Bank 234 46,354.93 4.2

10 Wells Fargo 202 39,709.73 3.6

Total 1,363 1,116,422.63

Including Euro, foreign and global issues. Excluding equity-related debt,

US Global ABS/MBS.

Source: Refinitiv SDC code: O1

equivalent to 20.2bp over the bid side of the 0.5% February 2029 RAGB.

ROOM FOR EVERYONEBPIFRANCE FINANCEMENT was also in the market,

2026s.The tap came in the same week the

French government reopened its 2029s, 2034s and 2050s via auction, surprising two bankers away because this is not common market practice.

A lead, though, said this was not an issue.“Sometimes the Tresor has some problems

with agencies tapping the markets the same week as they have auctions, but this time around it was slightly different because the

priced at 28bp over the 0.5% May 2026 OAT, 1bp tighter than guidance, via Barclays, BNP Paribas, Goldman Sachs and Nomura.

“After Sintra, it has become clear that

to stimulate growth. And with a shortage of bonds in secondary, investors are relying on

banker regarding the oversubscribed books.That was not the case for KFW, where books

The deal priced in line with guidance at 18bp through swaps via Bank of America Merrill Lynch, Citigroup and Societe Generale.

“I don’t know what happened there - less

The outstanding was bid on Tradeweb at less 18bp before books opened and had softened almost 0.5bp by mid-afternoon.

LOWER SAXONY, MUNIFIN KEEP EUROS ROLLING

The euro market kept on buzzing on Wednesday, with two names navigating record low European government yields.

Ten-year Bunds touched -0.399% and EGB spreads tightened after Christine Lagarde was nominated to replace Mario Draghi as head of the ECB.

“It is spectacularly strong. Everyone is trying to pick up some yield before the

banker.Having announced the mandate on

Tuesday, LOWER SAXONY started marketing its seven-year at 7bp area through swaps via Deutsche Bank, JP Morgan, LBBW, NordLB and TD Securities.

away from the deal. “It is not the most common maturity and the pricing is super-tight to the bid side of the market, but it

A lead said the choice of maturity was not unusual for Lower Saxony. “They have a

June 2026, bid on Wednesday at 8bp through swaps.

MUNICIPALITY FINANCE was the other issuer in the market, pricing a four-times-subscribed

Credit Agricole, HSBC, Nordea and Rabobank.

said a banker away. “It is green, but investors have a lot of money to put to

The September 2029s came at 8bp through swaps, 3bp tighter than guidance.

bond was bid at swaps less 7.4bp.

STERLING

EIB CLONES KFW IN STERLING

EUROPEAN INVESTMENT BANK followed in the footsteps of KFW, coming to the sterling market a day after the German agency with a £400m increase of its £2bn 2.5% October 2022s.

a month - a £300m increase of its £1.45bn 1% December 2022.

Sterling issuance has slowed after a busy start to the year when public sector borrowers took advantage of favourable conditions to price almost £22bn.

KfW chose an increase given that the arbitrage, a banker said, has not improved by enough to justify a full benchmark.

“[KfW] are constantly looking at all the markets. So they probably felt that now

Books closed at over £410m. Leads Bank of America Merrill Lynch and Citigroup sized the tap at £300m, having gone out with a minimum £250m amount.

It priced in line with IPTs at 33bp over the 1.75% September 2022 Gilt, which IFR calculations put equivalent to around 15.5bp through Euribor.

December 2022 that was bid on Tradeweb at 20bp through swaps.

“It is not a benchmark deal, so there is not

The EIB, in comparison, took the opportunity to issue in a short tenor, a lead banker said.

“This is very challenging to do in the euro market given where yields are, but also in the US dollar market given the holidays this week. Sterling is therefore a natural source

Books were last seen at over £500m. Leads Bank of America Merrill Lynch, Citigroup and RBC sized the tap at £400m, having gone out with a minimum £250m.

Pricing came in line with guidance at 31bp over the 1.75% September 2022 Gilt, equating to around 17bp through Euribor.


BONDS SSAR

ALL SUPRANATIONAL BONDS IN EUROS BOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 10 4,240.41 10.9

2 Barclays 7 3,988.11 10.2

3 HSBC 9 3,881.76 10.0

4 Goldman Sachs 6 3,474.65 8.9

5 BAML 11 3,262.52 8.4


7 UniCredit 3 2,378.53 6.1


9 BNP Paribas 4 2,236.40 5.7

10 Commerzbank 5 1,949.60 5.0

Total 33 38,973.07

Excluding ABS/MBS.


ALL AGENCY BONDS IN EUROSBOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 19 7,892.92 10.3


3 BNP Paribas 18 5,585.74 7.3

4 Deutsche Bank 18 5,215.68 6.8

5 Goldman Sachs 12 5,148.15 6.7

6 NatWest Markets 9 4,932.72 6.4

7 Commerzbank 12 4,560.99 5.9

8 SG 14 4,503.21 5.9

9 BAML 9 3,987.59 5.2

10 Barclays 16 3,787.83 4.9

Total 97 76,773.36

Excluding equity-related debt. Including publicly owned institutions.


MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS BOOKRUNNERS: 1/1/2019–30/6/2019


1 UniCredit 24 5,411.55 14.9

2 DGZ-DekaBank 24 3,803.92 10.4

3 HSBC 23 3,302.02 9.1

4 LBBW 19 2,859.23 7.9

5 Barclays 10 1,834.33 5.0

6 DZ Bank 12 1,459.93 4.0

7 Nord/LB 11 1,430.88 3.9

8 SG 4 1,238.95 3.4

9 BayernLB 11 1,158.49 3.2

10 JP Morgan 6 1,153.93 3.2

Total 77 36,413.49

Excluding ABS/MBS.


2.25% October 2022 that was bid on Tradeweb at 22bp through swaps. Other nearby euro bonds, though, were less pricey, with its 0.375% March 2022s at less 19.6bp and 1.625% March 2023s at less 18bp.

NON-CORE CURRENCIES

AUCKLAND TAPS GREEN DEMAND

AUCKLAND COUNCIL, rated Aa2/AA (Moody’s/S&P), raised the maximum NZ$150m (US$101m) it was seeking from its second Green bond offering, which, like its inaugural issue, printed 2bp inside the municipality’s standard local secondary curve.

The new 2.013% six-year note issue was priced last Wednesday at the tight end of the mid-swaps plus 55bp–59bp guidance range.

ANZ was green coordinator and joint lead manager with BNZ.

The proceeds are to be allocated in accordance with the council’s Green bond

that supports eligible assets.Auckland Council debuted in the green

market in June 2018 with a capped

Besides Auckland, only the International Finance Corp and two domestic corporates – Argosy Property and Contact Energy – have issued Green bonds in New Zealand dollars.

A shortage of supply and the huge expansion in socially responsible assets under management helps explain the keen pricing results achieved by Auckland Council for these instruments.

On June 18, Westpac New Zealand sold

print.

HNZL DELAYS BOND TAPS

HOUSING NEW ZEALAND, rated AA+ (S&P), has delayed a proposed tap of its NZ$250m (US$167m) 3.36% June 12 2025 and/or NZ$250m 3.42% October 18 2028 bonds

changes in the housing ministry.HNZL, a crown agency that provides

housing services for New Zealanders in need, still held last Tuesday’s scheduled global investor call for the planned reopenings, which was arranged by ANZ and Westpac.

CORPORATES

US DOLLARS

HIGH-GRADE SUPPLY DECLINES IN FIRST HALF AS M&A SITS OUT

US investment-grade volume is down nearly

decline that is faster than many anticipated but at the same time remains a supportive factor for secondary spreads.

High-grade borrowers priced US$601.7bn of offerings across 695 tranches through the

across 831 tranches during the same period in 2018, according to IFR data.

There were headline grabbing M&A deals in 2019, but none as large as CVS HEALTH’s US$40bn bond that shook the market last year.

The key reasons for the decline in supply were, among other forces, fewer M&A trades, less bank funding needs and more reverse Yankee issuance in European markets, said Jason Shoup, head of global credit strategy at Legal & General Investment Management America

Steve Boothe, lead portfolio manager of global investment-grade corporate bond strategy for T. Rowe Price, told IFR: “We were expecting negative supply regardless, but it’s more negative than I would have thought.

“The surprise from my perspective is more non-dollar issuance from US issuers

Both FISERV and FIS opted to fund the bulk of their acquisitions in Europe, and forthcoming M&A deals, such as DANAHER’s purchase of GENERAL ELECTRIC’s healthcare unit, are expected to do the same.

back-to-back days: a US$19bn trade to fund BRISTOL-MYERS SQUIBB’s acquisition of CELGENE followed by IBM’s US$20bn deal to purchase RED HAT the next day.

Bristol-Myers built the largest order books of the year to US$63.55bn, compared with IBM’s US$36.5bn.

That strong investor demand carried over into the secondary market as well.

The US$3.75bn 4.25% 30-year note Bristol-Myers priced at 145bp over Treasuries and was 30bp tighter through June, trading at 115bp.

And it is not just the new issuance.Celgene’s long-dated notes were trading

at 242bp over Treasuries coming into the year before the merger was announced, but quickly tightened afterwards.

The outstanding 4.35% 2047s tightened 123bp through June and are changing hands at 119bp, according to MarketAxess data.

Tom Murphy, senior portfolio manager at Columbia Threadneedle, agreed that Bristol-Myers’ bonds have performed the best, but names such as AB InBev, GE, Charter, Time Warner Cable, Verizon and AT&T are close behind despite last year’s leverage and downgrade concerns.

“There are things they can do to rectify [leverage concerns] through things like asset sales, cutting dividends or reducing share


ALL INV-GRADE US CORPORATE BONDSBOOKRUNNERS: 1/1/2019–30/6/2019


1 BAML 37 6,259.88 10.7

2 Wells Fargo 33 4,861.40 8.3

3 Citigroup 24 4,797.33 8.2

4 JP Morgan 31 4,652.71 8.0

5 Barclays 17 3,844.08 6.6

6 Morgan Stanley 29 3,661.29 6.3

7 Goldman Sachs 17 2,870.88 4.9

8 Mizuho 18 2,708.49 4.6

9 MUFG 15 2,518.22 4.3

10 Deutsche Bank 12 2,143.20 3.7

Total 82 58,516.05

Excluding equity-related debt, ABS/MBS, all foreign issues, global issues and non corporates.

Source: Refinitiv SDC code: F6a

ALL US INVESTMENT GRADE CORPORATE DEBT

(EXCLUDING SOLE SELF FUNDED DEALS)BOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 239 53,277.09 9.6

2 Citigroup 195 49,764.12 9.0

3 BAML 224 47,922.02 8.6

4 Morgan Stanley 161 40,036.82 7.2

5 Goldman Sachs 148 38,781.21 7.0

6 Barclays 126 34,931.16 6.3

7 Wells Fargo 155 30,090.77 5.4

8 MUFG 90 24,281.54 4.4

9 Mizuho 96 22,227.49 4.0

10 Deutsche Bank 67 19,829.74 3.6

Total 499 555,859.79

Source: Refinitiv SDC code: F09a

ALL CORPORATE BONDS IN EUROSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Barclays 54 17,956.41 8.5

2 BNP Paribas 103 15,524.37 7.3

3 BAML 51 13,355.00 6.3

4 Deutsche Bank 64 12,729.87 6.0

5 Citigroup 61 12,439.85 5.9

6 JP Morgan 60 11,864.83 5.6

7 SG 64 11,214.05 5.3


9 UniCredit 60 9,508.21 4.5

10 HSBC 63 9,203.09 4.4

Total 264 211,554.05

Excluding equity-related debt. FIGs, ABS/MBS.


repurchases, which are all levers that those

“When pressed, they will take action as opposed to just sit there and watch bad things happen to their bond prices and their

HALFTIME HIGHLIGHTSShort-dated notes fell out of favour, with 35% of new bond issuance coming with tenors of

same period in 2018, according to IFR data.In its place, six to 10-year paper grew to

37% of issuance from 30%, while 20 to 30-

“One would think that the fall in 30-year corporate yields is motivating such

“Since the end of November, the yield on the long credit index has dropped from 5%

Borrowers that jumped into the volatile market in early January gave up the most new issue concessions, according to IFR.

FORD MOTOR CREDIT, ENTERGY TEXAS and AB

INBEV offered some of the highest concessions of the year, at 35bp, 28bp and 25bp, respectively, according to IFR data.

Underperformance crept back in June as AP MOLLER MAERSK and ARES CAPITAL CORP priced with respective premiums of 27bp and 22.5bp.

That coincided with the largest monthly supply drop of the year in June, with volumes down nearly 30% year-over-year on trade concerns.

narrative to concerns about global growth

BROADCOM FACES HY DOWNGRADE RISK ON SYMANTEC M&A

BROADCOM, currently rated Baa3/BBB-/BBB-, is stoking fears of a downgrade to high-yield following reports that the company is in advanced talks to buy security software company SYMANTEC.

The deal could come in at some US$18bn and, if fully funded with debt, would pose a risk that the company could be downgraded to junk, according to CreditSights.

of the deal and the amount of debt Broadcom would look to raise is unknown.

The US chipmaker’s bonds widened as much as 26bp Wednesday morning and were some of the most actively traded securities earlier in the session, according to MarketAxess.

The 4.75% 2029s were changing hands as high as 265bp over Treasuries — some 25bp wider since Tuesday.

Broadcom’s possible acquisition comes on the heels of its US$18.9bn acquisition of CA

TECHNOLOGIES.

To fund that acquisition, the company issued an US$11bn bond deal in March that garnered order books of US$25bn.

But the issuance did not perform well in the secondary market amid complaints from investors about razor-thin pricing and a lack of a coupon step-up to hedge against a downgrade to junk.

With the purchase of Symantec, Broadcom’s gross leverage could rise to low four times up from 3.3 times following the CA Technologies acquisition.

Broadcom made commitments to maintain investment-grade ratings but has yet to suspend shareholder returns in order to delever, CreditSights noted.

“[Broadcom] has opted to prioritise shareholder returns over debt reduction

yield will be over8% (based on pro forma FCF of ~US$10bn)

which is attractive given the company’s expected growth and might encourage management to prioritise share repurchases

SHIFTING TO SOFTWAREBoth acquisitions mark a pivot for the company towards software and away from its core chip-making business.

Symantec (rated Baa3/BB+/BB+) was tied to a potential leveraged buyout by equity fund Thoma Bravo late last year and has struggled to retain a CEO on a consistent basis.

The 3.95% Symantec 2022s were trading just 0.016 points tighter on Wednesday at a price of 101.992, according to MarketAxess data.

The last chipmaker to attempt an entry into the cyber security space was Intel with a US$7.68bn deal to purchase McAfee’s security technology in 2011.

But the effort to inject more security features into the rapidly expanding tech sector was ultimately unsuccessful as Intel later sold a majority stake in McAfee to

Today, that conversation about security is more prevalent than ever as the big tech giants seek to repair their damaged reputations on privacy.

Broadcom also faces headwinds from the

The trade war was largely to blame for

quarter earnings results, in which the company revised its yearly revenue estimate

US$1bn lower.Those results sent not only Broadcom’s

bond wider in the secondary in mid-June, but also the broader chip and semiconductor sector.

There was some relief from the June 28-29 G20 meeting, with US President Donald

Trump saying US companies can resume selling their equipment to Chinese phone manufacturer Huawei.

But in the days following there remained a lot of confusion, as the Commerce Department was telling staff that Huawei should still be treated as blacklisted, according to Reuters.

AT&T SEEKS DEBT REDUCTION WITH SALE OF REGIONAL SPORTS NETWORKS

AT&T is hoping to fetch US$1bn in the sale of its four regional sports networks as the highly levered US telecoms company seeks to bring down debt, according to reports.

of bonds outstanding, and the sale is part of a plan to reduce that debt load by around US$8bn by year-end, according to reports.

Bonds were mixed in secondary trading last Tuesday, as credit spreads across the market moved wider through the afternoon on a number of concerns, including proposed US tariffs on Europe and an

The 3.80% 2027s were AT&T’s most actively traded bonds on the day, moving just 1bp tighter on the news to 117bp over Treasuries, according to MarketAxess data.

But right behind it were the 4.35% 2029s, trading 2bp wider at 138bp over Treasuries.

“We recently recommended an overweight to that area and that’s because a lot of the large-cap names in that space are

and head of credit research investment research at Conning, told IFR.

“In an environment of low rates and compressed spreads you get an attractive carry in that space.

The four networks the company may put up for sale are AT&T SPORTSNET ROCKY MOUNTAIN serving areas of Utah, Nevada and Colorado; AT&T SPORTSNET SOUTHWEST broadcasting in parts of Texas and Louisiana; ROOT SPORTS

NORTHWEST in Alaska, Washington and Oregon; and AT&T SPORTSNET PITTSBURGH.

Combined, the networks hold rights to more than 24 college and professional sports teams, including hockey’s Pittsburgh Penguins, basketball’s Houston Rockets and baseball’s Seattle Mariners.

announce the sale, but potential buyers are names familiar to the recent bid for Walt Disney’s regional sports networks it acquired through the acquisition of Twenty-First Century Fox.

Disney raised US$14.1bn from the sale of 21 Regional Sports Networks to Sinclair Broadcast Group and New York’s YES Network.

Sinclair is likely to bid for AT&T’s networks as well, alongside other former


BONDS CORPORATES

Disney asset bidders including John Malone’s Liberty Media and Ice Cube’s Big3 basketball league.

AT&T already cut US$3.6bn in debt by selling assets, such as its stake in TV streaming service Hulu as well its New York

The company last tapped the high-grade credit market in February to push out maturities and pay down debt through a two-part US$5bn bond.

The 4.35% 10-year and 4.85% 20-year notes priced at 170bp and 220bp over Treasuries, respectively. As of Tuesday afternoon, they were trading at 138bp and 175bp, according to MarketAxess data.

Despite the leverage concerns the company faced coming into the year, investors have signalled that they are onboard with the company’s deleveraging plans as its bonds have been among the best performing on the year, said Tom Murphy, senior portfolio manager at Columbia Threadneedle.

“AB InBev, GE, Charter, Time Warner Cable, Verizon and AT&T were are names that were mentioned last year as the quote ‘bad actors’ that had too much leverage and

“The concerns of Triple Bs sliding to junk were overdone and we pushed back pretty

SUMITOMO PRINTS, PANASONIC PREPARES

SUMITOMO on Tuesday priced US$500m of

notes at 99.777 to yield 2.648%, equivalent to Treasuries plus 87.5bp.

of Treasuries plus 90bp, plus or minus 2.5bp, and inside initial guidance of 110bp area.

Orders were over US$2.25bn from more than 120 accounts, with Asia taking 82% of the Reg S bonds and EMEA 18%.

By investor type, asset managers booked 51%, banks 27%, insurers 14%, corporate treasuries 6%, and private banks and others 2%.

The issue has expected ratings of Baa1/A– (Moody’s/S&P).

The Japanese trading company plans to use the proceeds for general corporate

Goldman Sachs, Citigroup and Bank of America Merrill Lynch were active bookrunners, and Morgan Stanley was passive bookrunner.

Compatriot PANASONIC has mandated Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch to arrange investor meetings and calls in the US, Europe and Asia, which began on July 5.

Expectations are for a benchmark multi-tranche US dollar 144A/Reg S senior notes transaction with tenors of three to 10 years.

The Japanese electronics company’s bonds are expected to be rated A3/A– (Moody’s/S&P).

EUROS

INVESTORS PAY TO HOLD MERCK’S LONG FOUR-YEAR

MERCK

for the US$5.6bn takeover of Versum

Monday - and was rewarded with a negative yield on the long four-year tranche.

In an illustration of just how conducive the market is to issuance, the German pharmaceutical company returned just two

And it did so with an offering that

to carry a negative yield, according to a lead.

at 25bp over swaps, for a yield of -0.042%.“[Negative yields] are here for the

swaps are now negative up to seven years, he said.

“This market won’t last forever, but the ECB is set to be more accommodative going forward, and we’re pretty sure you’re going to

Deutsche Bahn had already breached that

2016 at -0.006% - but is considered by some as only a quasi-corporate credit given its state ownership.

Merck (Baa1/A/A-, all stable) also priced a

year at 60bp.

Demand allowed leads to tighten pricing by 25bp-30bp across the tranches.

Merck is a relatively rare issuer in the euro market. Before its hybrid in June, the company last made an appearance in the currency in 2015.

“The company doesn’t have much of a

lead said.The hybrid and seniors will take out

Merck’s US$4bn bridge facility for the acquisition. Merck is expected to close the deal in the second half of 2019.

Leads had been telegraphing that the senior trade would come later in the year.

“Merck might have looked later but our

second banker said.

agreed.“All of the central banks are on your side,

Draghi has indicated he’s willing to restart asset purchases and trade tensions are

STEEL TAPARCELORMITTAL (Baa3/BBB-/BBB-, all stable)

2024s at 125bp over swaps, 20bp inside IPTs.

at launch. A banker away said the price tightening was a great result for a tap.

Bankers said the investment-grade pipeline is starting to quieten down.

A2A

Green bond in July. The Italian utility (Baa2/BBB, both stable) mandated BBVA, BNP Paribas, Mediobanca and UniCredit to organise a series of investor meetings that began July 2.

And Louisiana-headquartered WESTLAKE

CHEMICAL held investor meetings last week to

expected to be rated Baa2/BBB/BBB (all stable).

The company hired Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs and JP Morgan.

“One of the problems that investors face is knowing that supply is tapering into the summer - and that they still have cash on

AROUNDTOWN RECEIVES WELCOME BACK TO EUROS

AROUNDTOWN made good on its promise to

the year, but returned almost as soon as the

offering.The German real estate company, rated

BBB+ by S&P, issued two tranches on

Demand allowed leads to move pricing by 20bp from the tight end of IPTs on the six-year and by 23bp on the nines. Investors saw initial concessions at 20bp-30bp - in line with where deals have started elsewhere in the market.

Proceeds will help repay existing debt, including an any-and-all tender for 2022 and 2023 notes.

Aroundtown announced the tender for its

morning.The deal came the day after Aroundtown

purchases likely to be completed this year.


“Aroundtown’s relentless growth continues which implies further senior/hybrid issuance in H2 and this has already started this

For their part, investors seem pleased to have Aroundtown back in euros.

“Aroundtown is a well-known and

“They’ve said they will continue to grow their portfolio, and while we’ll bear in mind the company’s issuance needs, they’ve been very cognisant of not saturating any given

Aroundtown relies heavily on access to the bond market for its growth strategy - and has been subject to grumbles in the past from investors who have seen it as a serial issuer.

The company told investors in February that it was not going to return to euros until the second half of the year because it felt its bonds were wider than they should be.

This year, Aroundtown has instead issued twice in Swiss francs, once via a US dollar Reg S deal, and most recently a sterling bond.

The strategy has seemed to work for its euro curve. By Tuesday, spreads on the

company’s 1.5% July 2024s had tightened to 86bp from last year’s wide of 225bp on December 5, according to Tradeweb.

Its 1% January 2025s had tightened by 133bp - from last year’s wide of 239bp in December, to 106bp.

Average corporate spreads had tightened by 25bp over the same time period, according to iBoxx data.

BERLIN FREEZEAroundtown invests in commercial and residential assets primarily in Germany and the Netherlands. The company acquires

increased occupancy rates and rent levels, while reducing operating costs.

News that Berlin city government is

the shares of German property stalwarts including Vonovia in recent weeks.

But the headlines are less of an issue for Aroundtown, the investor said. The bulk of Aroundtown’s assets are commercial, while its residential exposure comes via a 38% interest in Ground City Properties. GCP’s exposure to Berlin residential is around 20%, he said.

the investor said. “I can’t see investors being

A second investor noted a Monday report that said some German parliament lawyers consider the planned ban on rent increases in Berlin to be unlawful.

FERROVIE TRACKS POSITIVE ITALIAN SENTIMENT

Railway group FERROVIE DELLO STATO ITALIANE took advantage of a big rally in Italian risk to extend its curve with a seven-year Green bond issue.

Sovereign yields have fallen dramatically over the past month. Seven-year BTPs were as low as 1.11% on Wednesday, for example, having been as high as 2.24% on May 31,

While the economy remains vulnerable, the search for yield and helpful headlines, such as Mario Draghi’s dovish speech in Sintra last month, have sparked a surge in buying.

The latest piece of good news came on Wednesday when European Commission

propose disciplinary action against Italy over

The 10-year BTP/Bund spread narrowed to 194bp – the lowest in more than a year as investors cheered the EU’s reprieve.

The more attractive funding levels saw Italian issuers head to market on Thursday –

sector, and Ferrovie, a corporate/SSA crossover credit.

Leads started marketing the latter at IPTs of 140bp–145bp over swaps. They tightened to 130bp area (+/–2bp), then launched a

Leads used Ferrovie’s 1.5% June 2025 as a comparable. That was quoted at 120bp pre-announcement, while the extension was worth 5bp–10bp.

That put fair value in the mid to high 120s, a lead banker said.

The state-owned operator of Italy’s railways last tapped the euro public market two years ago. It is viewed as a similar type as credit as Deutsche Bahn, leads said.

Ferrovie is one of the largest industrial groups in Italy and manages rail and road networks and transport services – with more than 24,500km of railway lines under its oversight.

Proceeds will be used to renew passenger and freight rolling stock.

Ferrovie is spearheading an effort to set up a consortium of investors to buy troubled airline carrier Alitalia, which is being managed by administrators.

The group has the backing of Deputy Prime Minister Matteo Salvini, who said in June an infrastructure or transportation


BONDS CORPORATES

ALL INVESTMENT-GRADE BONDS IN EUROSBOOKRUNNERS: 1/1/2019–30/6/2019


1 BNP Paribas 186 46,288.63 7.2

2 JP Morgan 130 43,965.24 6.9

3 Barclays 136 41,431.46 6.5


5 SG 127 38,283.33 6.0

6 HSBC 172 38,030.22 5.9

7 Deutsche Bank 150 34,770.98 5.4

8 UniCredit 143 31,950.92 5.0

9 Citigroup 94 26,185.53 4.1

10 BAML 84 25,693.42 4.0

Total 764 639,340.26

Excluding ABS/MBS, equity-related debt.


ALL CORPORATE BONDS IN STERLINGBOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share bank or group issues £(m) (%)

1 Barclays 20 2,128.76 14.9


3 JP Morgan 9 1,213.45 8.5

4 HSBC 12 1,196.57 8.4

5 Santander 10 909.98 6.4

6 BNP Paribas 9 883.13 6.2

7 Morgan Stanley 6 801.49 5.6

8 RBC 8 784.62 5.5

9 Lloyds Bank 8 781.28 5.5

10 Goldman Sachs 7 773.11 5.4

Total 38 14,308.55

Source: Refinitiv SDC code: N8a

ALL SWISS FRANC BONDS INCLUDING

SECURITISATIONSBOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share bank or group issues SFr(m) (%)

1 Credit Suisse 80 9,415.98 32.4

2 UBS 69 7,568.05 26.0

3 Verband Schweizerischer 17 3,964.63 13.6

4 ZKB 37 2,424.62 8.3

5 Raiffeisen Schweiz 24 1,597.12 5.5

6 BNP Paribas 7 867.55 3.0

7 Commerzbank 8 777.73 2.7

8 Basler KB 12 653.76 2.2

9 HSBC 3 650.00 2.2

10 Deutsche Bank 3 291.97 1.0

Total 149 29,075.22

Including preferreds. Excluding equity-related debt.

Source: Refinitiv

ALL INTERNATIONAL STERLING BONDS

EXCLUDING SECURITISATIONSBOOKRUNNERS: 1/1/2019–30/6/2019


1 HSBC 60 10,186.84 14.5

2 Barclays 57 9,412.05 13.4


4 RBC 39 6,387.78 9.1

5 Citigroup 24 5,637.95 8.0

6 BAML 23 4,261.68 6.1

7 Deutsche Bank 18 3,883.27 5.5

8 TD Securities 21 3,646.65 5.2

9 Lloyds Bank 23 3,029.93 4.3

10 Santander 19 3,005.75 4.3

Total 146 70,436.53


Source: Refinitiv SDC code: K05a

group would be his preferred partner for Alitalia.

So far, Ferrovie has secured the commitment of Delta Air Lines but is

Reuters News.Ferrovie has also recently had talks with

infrastructure group Atlantia over Alitalia.A lead banker declined to comment on

how this may affect the deal, saying the

while.As for further Italian issuance before the

summer, bankers said that if it happens it will be opportunistic.

“Individual companies are in no rush to execute a trade – people know there’s still a

away from the Ferrovie trade.The next road bump for the corporate

market could be on July 25, the date of the ECB’s meeting.

“It’s unclear whether the market will see some dampening of the dovish comments from Sintra or a reiteration of the same, at which point those who can execute will do

deal said.

ATTRACTIVE MARKET DRIVES ABERTIS RETURN

ABERTIS INFRAESTRUCTURAS saw its dual-tranche

Wednesday.The six and 10-year notes began

marketing mid-swaps plus 120bp area and 185bp area respectively with one lead putting fair value at “around 90bp and

With the order book evenly split, the

respectively, with guidance 100bp area on the shorter tranche and at 165bp area on the longer piece.

This was then further tightened at launch, to 93bp and 158bp, via Bankia, Barclays, Credit Agricole, Commerzbank, HSBC, Mediobanca, NatWest Markets, Societe General and SMBC Nikko.

The issuer, rated BBB/BBB, is raising funds for general corporate purposes including

“It makes sense to do this now and take advantage of the really attractive market

“For the four year extension they are paying 65bp. In March for just over a three-year extension it was 58bp so it looks a little

in March printed at 140bp over mid-swaps

at 198bp.

acquisition by a group including Italy’s

collapse. But the connection was no hindrance for the deal, which received over

According to bankers on the new deal, the yield on offer and the issuer’s efforts to allay any investor concerns regarding links to Atlantia or Abertis’s reportedly high leverage helped generate strong demand.

“The company has been doing a lot of work to explain and work on these issues and I haven’t been seeing many investor

“As a credit it is stable, investors are interested and want to participate. The trade

lead.

MOODY’S TURNS THE HEAT ON ATLANTIA

Moody’s shunted the ratings of ATLANTIA and two subsidiaries on to a review for downgrade on Friday, following the publication of a report on July 2 into the collapse of the Polcevera viaduct.

The Italian government launched a formal procedure in August 2018 to revoke the concession for AUTOSTRADE PER L’ITALIA (ASPI) to operate toll highways, after a bridge it operates in Genoa collapsed that month, killing 43 people.

Atlantia is rated Baa3, while its ASPI and AEROPORTI DI ROMA unites are Baa2.

“Whilst the report includes various caveats, highlighting potential risks associated with the implementation of some of its conclusions, recent developments result in heightened downside risks for the

“Moody’s expects the rule of law to be applied with respect to the ASPI concession, which is an important factor underpinning current ratings, but the new report claims that the concession could be legitimately

CreditSights analysts said any revocation of ASPI’s concession would require

judgements or, in an extreme case, be refused.

Moody’s highlights potential protracted uncertainties around litigation risk for ASPI, as well as possible changes to the concession contract or other costs or losses detrimental

“Persistent uncertainties remain in respect of the ultimate consequences of the collapse of the Polcevera viaduct on the

the Atlantia group remains susceptible to heightened regulatory and political

Atlantia group.“Whilst not the current base case,

Moody’s cautions that any formal

compliance with its concession obligations and the commencement of a termination

said Moody’s.Moody’s will monitor the liquidity and

group, the continued ability to access new funding and measures aimed at preserving

bridge collapse.

STERLING

M&S SPARKS STERLING FRENZY

MARKS AND SPENCER caught a tailwind from a buoyant market as investors shrugged off worries about the UK retail sector to pile into a sterling deal.

Books for the no-grow £250m eight-year peaked at over £2.05bn.

But in a sign of how the market has been distorted by central bank intervention, some investors told IFR they were just participating in order to pick up some spread.

“I’m not a great fan - I think they have a lot of property provisions ahead as they close non-food stores. We have minimal

“Having said that, the market’s hot and

That sentiment was seen elsewhere in the book, a lead said.

“You can’t really buy much in the sterling investment-grade space with this kind of

“Given everything that’s going on in macro, everyone is buying everything and expecting it to rally. This bond has a way to rally given where it’s trading and M&S’s

Leads started marketing at 300bp-310bp over Gilts. But as demand grew, they slashed pricing to 270bp.

Another investor said she dropped out as talk tightened.

“At [IPTs] we felt we were paid for the risk, but that big NIP subsequently evaporated and we’re just not that bullish on the retail

£1.65bn.


M&S has a 4.75% June 2025 which was trading at 250bp pre-announcement. The

the lead banker.Other retail names including Co-op and

John Lewis offer a higher yield, she said.

period, where UK economic indicators which ticked up at the beginning of the year because of stockpiling are now slowing dramatically. Companies like M&S are going to be impacted by a hard Brexit and we need

M&S reported a third straight drop in

mainstay of Britain’s shopping streets has been trying to reboot: closing weaker stores, revamping ranges and investing online in order to avoid the fate of a string of UK chains that have collapsed amid competition from the internet and rising costs.

However, those efforts have not yet yielded fruit, and the company, which carries Baa3/BBB-(stable/negative) ratings, is on the brink of high-yield.

The bond provided investors with some protection from a downgrade as it contains a 125bp step-up.

M&S is a rare issuer - the deal was the

market since 2016. It came after a two-day roadshow.

Some bankers away raised their eyebrows at the lead line-up, which included just two UK banks.

Active bookrunners were Bank of China, Lloyds Bank, MUFG, NatWest (B&D) and SMBC Nikko.

TWO TRADES, DIFFERENT BOOKSWhile orders for M&S’s no-grow £250m eight-year peaked at over £2.05bn, BMW saw a more muted response on the day, with books of over £675m for its £350m three-year bond.

Investors treated the two trades very differently, a lead on M&S said.

“M&S was a completely different

The retail company landed with a still-attractive spread of 270bp, offering investors a much sought-after pick-up in a market that has seen spreads compressed.

In addition, M&S, rated Baa3/BBB- (stable/negative), was offering investors a 125bp step-up in the event of a sub-investment-grade downgrade.

BMW, on the other hand, carries A1/A+ ratings, both of which are stable. Its three-year trade landed at a spread of 85bp over

outstanding paper in euros.“BMW’s trade is always going to be the

kind of deal that doesn’t capture a huge

“It’s tight, it’s short, it’s a tactical deal. It’s

Both, however, offer evidence of an investor base that is still happy to participate in deals despite an uncertain backdrop, the banker said.

While concerns about Brexit still exist, investors say they have no choice but to ignore them.

“We’re currently living in limbo, where potential Brexit outcomes are pretty

“But we still have cash to put to work. The only position you can take is: Do I like the credit? Am I being compensated generously for taking on any risk? And do I mind

NEXT UPUK housing association ACCENT is meeting investors this week to market a sterling bond that would mark its debut in the asset class, according to IFR data.

The company will be marketing a £350m senior secured long-dated bond in meetings that are scheduled to begin on July 8.

The transaction will have a £125m retained element and is expected to be rated A+ by S&P. It will be issued under a standalone prospectus.

Accent owns and manages 20,000 affordable homes across the north, east and south of the UK.

SWISS FRANCS

BKW GOES GREEN

Swiss energy company BKW

Green bond on Monday morning, taking advantage of investor hunger both for yield and green assets to price an eight-year slightly inside its own curve.

The company held a one-day roadshow the previous week for either a seven or eight-year Green bond via BNP Paribas (Suisse) and UBS.

Feedback from those meetings saw the issuer plump for the longer tenor

morning with IPTs at mid-swaps plus 63bp-73bp for a maximum SFr200m (US$199m) deal.

Solid demand resulted in price guidance at mid-swaps plus 60bp-63bp and the bond printed in the maximum size at the tight end of the range, equivalent to 90bp over government bonds, with a 0.25% coupon and a 0.207% yield.

An all-Swiss contingent of investors was led by asset managers with just over half and insurers accounting for more than a quarter of the bonds, the rest

being taken up by (in descending order) private banks, pension funds and treasury accounts.

Some Swiss market-watchers expressed a modicum of incredulity at the prospect of a nuclear power station owner issuing a Green

more than 80 accounts taking part, the naysayers were obviously well outnumbered.

“The issuer capitalised on investors’ love for it as the ‘best in class’ energy company in Switzerland. As well, green is very en vogue head of Swiss franc syndicate at BNP Paribas (Suisse).

The issuer trades well inside its compatriot energy utilities AXPO and Alpiq, as it has lower exposure to nuclear, a better business model and a lower debt burden compared with the others.

BKW’s 2025s and 2030s were at Z-spreads of 59bp and 67bp ahead of the new issuance, pointing to fair value of mid-swaps plus 62bp and putting the new bonds 2bp inside the curve.

As well as those outstanding issues, BKW also has SFr200m April 2022s and SFr350m 3.375% July 2019s, with the new bonds part-

bond’s maturity date.The company and the bonds are rated A

(UBS, negative)/Mid A (CS, stable)/A (ZKB,

stable).

YEN

JR EAST TAKES 50-YEAR JOURNEY

EAST JAPAN RAILWAY (JR East), rated AA+ by R&I, priced an upsized ¥20bn (US$185m) 50-year bond issue last week, the second 50-year bond offering in Japan after Mitsubishi Estate’s issue in April.

According to DealWatch, IFR’s sister publication, the ultra-long bond offering, with a 0.809% coupon, was priced at 42bp over a hypothetical 50-year JGB, the tighter end of initial guidance range of 42bp–43bp. The longest JGB maturity is 40 years.

The railway company, which was initially targeting a ¥10bn fundraising amount for the 50-year tranche, exceeded the size of Mitsubishi Estate’s ¥15bn deal and priced its offering tighter than the 54bp over hypothetical JGBs with a 1.132% coupon achieved by that issuer.

JR East also sold ¥10bn of 0.10% 10-year and ¥10bn of 0.488% 30-year bonds.

Mizuho and SMBC Nikko were the leads.


BONDS CORPORATES


FIG

EUROS

BANK OF IRELAND STARS AS G20 BOOSTS PRIMARY MARKET

BANK OF IRELAND GROUP was the biggest

cheered by G20 headlines last Monday as it

almost six times covered at the peak.Markets were buoyed last Monday

morning by news from the weekend that the US and China were restarting trade talks.

Participants had feared that negative headlines stemming from the weekend’s G20 summit could spoil the primary market’s recent good run, but positive headlines teed up another busy day for

“It’s a good day with green on the screens

syndicate banker.Bank of Ireland moved quickly to take

advantage.

with initial price thoughts of mid-swaps plus 145bp area. Guidance was subsequently

Bookrunners Barclays, BNP Paribas, JP Morgan, NatWest Markets and UniCredit ultimately set the spread at 115bp.

“It was a particularly good backdrop in

at one of the leads. “[Bank of Ireland] was pleased with the choice of window and it’s

Bankers said the deal paid only a small concession on account of its callable maturity structure.

Bank of Ireland Group’s 1.375% August 2023s – its only other holdco senior benchmark in the single currency – was quoted at 113bp, bid, according to Tradeweb.

The size of the book, the biggest of any of

investors are seeking higher yielding, riskier paper, bankers said.

The Irish deal, expected to be rated Baa3/BBB– (Moody’s/S&P), offered the widest spread of Monday’s new issues.

Although the book would seemingly have allowed Bank of Ireland to print a

the issuer’s upper limit, said the lead DCM banker.

The issuer has only modest MREL needs,

year.

BFCM, NIBC TAKE PREFERRED ROUTEBANQUE FEDERATIVE DU CREDIT MUTUEL and NIBC

BANK were meanwhile offering senior preferred bonds, albeit at very different spreads.

over mid-swaps, down from IPTs of the high 50s area, by leads CM-CIC, Goldman Sachs, NatWest Markets and Societe Generale. The

Bankers said the deal offered a new issue premium of about 3bp, based on BFCM’s secondary curve. Many recent senior trades

outright level.“The book is quite a bit smaller for BFCM,

but that is a tight and quite impressive

the deal.Leads Credit Suisse, Goldman Sachs, JP

Morgan, NIBC and UBS marketed NIBC’s

140bp area.

allowing the leads to tighten the deal by

value, bankers said.

JEFFERIES, CNP IN PIPELINEBankers expect the primary market to remain active this week and potentially deeper into July before the traditional summer lull sets in.

JEFFERIES GROUP joined the pipeline last Monday, announcing a European roadshow commencing this Monday, ahead of an

senior unsecured issue.Jefferies International, HSBC and Natixis are

arranging the roadshow, which is scheduled to end on Wednesday.

CNP ASSURANCES remains in the pipeline

It completed a roadshow on June 28 and said last Monday that the timing of the deal

conditions, but the deal did not emerge last week.

The leads have already received IoIs above

LBP EYES MREL WITH DEBUT SENIOR PREFERRED

LA BANQUE POSTALE broke into the public senior preferred market with a seven-year

requirements.Marketing for the July 2026 benchmark

began at 60bp area over swaps via BNP Paribas, Commerzbank, Deutsche Bank, Morgan Stanley, Nomura and UBS.

Leads followed with guidance of 45bp

at the tight end of that range. Books closed

Pricing was not affected by the MREL eligibility, according to a lead banker.

“Depending on how things go, we could see the deal pricing in the same place as BFCM for a longer tenor so that gives you an

February 2024 senior at swaps plus 43bp.“They are also not the only one to get this

for example, also counts some senior preferred debt as MREL.

“It’s not surprising they are doing this now. With the tightening in the market it’s the perfect time to do something if you want

second lead.Fair value was hard to pinpoint, the

source said, coming out between 35bp and 40bp, depending on whether other French

ALL FINANCIAL INSTITUTION BONDS IN EUROSBOOKRUNNERS: 1/1/2019–30/6/2019


1 BNP Paribas 53 12,742.13 9.0

2 SG 34 10,336.02 7.3


4 HSBC 52 8,904.72 6.3

5 Deutsche Bank 45 8,817.25 6.2

6 JP Morgan 40 7,782.03 5.5

7 Natixis 27 7,769.23 5.5

8 Goldman Sachs 36 5,755.73 4.1

9 UniCredit 26 4,719.93 3.3

10 Barclays 29 4,601.79 3.2

Total 233 141,614.32

Including banks, insurance companies and finance companies. Excluding equity-related and covered bonds. Excluding publicly owned institutions.


ALL SUBORDINATED FINANCIAL INSTITUTION

BONDS (ALL CURRENCIES)BOOKRUNNERS: 1/1/2019–30/6/2019


1 Barclays 12 6,577.47 14.8


3 Citigroup 20 2,647.34 6.0

4 HSBC 18 2,580.85 5.8

5 Deutsche Bank 12 2,092.14 4.7


7 Goldman Sachs 12 1,903.03 4.3

8 JP Morgan 15 1,800.16 4.0

9 UBS 15 1,715.08 3.9

10 BAML 12 1,701.37 3.8

Total 72 44,454.57

Source: Refinitiv SDC code: J3a


BONDS FIG

senior or the issuer’s senior non-preferred is used.

While investors have been looking for higher yielding product, interest wasn’t dampened.

“We have seen a lot of demand from the

banker.

funding as of April 30, 6% was accounted for by senior preferred, driven by private placements in euros and US dollars, according to a recent investor presentation.

LBP is rated A/A- (positive/stable) by S&P/Fitch.

The bank is in the process of combining with CNP Assurances with the aim of forming a larger group headed by Caisse des Depots et Consignations before the end of the year. CNP has been marketing a Tier 2 Green bond but the deal has yet to emerge.

“Investors are very familiar with this story so there has not really been any question

LBP-CNP tie up.In public markets, LBP has focused on

senior non-preferred and covered bonds this

green SNP at 85bp over swaps in April and a similarly sized January 2026 covered at 15bp in January.

BANKIA BACK AGAIN TO EXTEND

BANKIA made a swift return to the market last Tuesday, taking advantage of a “great

Fresh from an SNP outing only a fortnight before, the Spanish lender announced a seven-year senior preferred benchmark with initial price thoughts at 110bp area over swaps.

Leads Bankia, BBVA, Citigroup, Credit Suisse (B&D) and NatWest Markets followed with

Pre-reconciled books at the reoffer level

“The conditions are great, so it is a good time to extend the curve, with fair value at around 80bp-85bp and no real new issue

A banker away saw the starting concession at 20bp-25bp, in line with recent trades, but said he had not been expecting Bankia to return with the paint barely dry on its last outing.

“I was surprised to see them come back so soon given they did a senior non-preferred

On June 18, the Spanish lender printed a

came at swaps plus 125bp and had subsequently tightened to 111bp, according to Tradeweb data.

its only other outstanding senior unsecured - a 0.875% March 2024 bond.

“I’m pretty sure nobody planned to bring three deals in the space of a couple of months, so I’d say issuers are bringing plans forward. UniCredit and Intesa doubled up

end of June, only a week after placing a

Thursday.“There’s always a bit of psychology with

came out of such a choppy and miserable 2018 that issuers are in a bit of a different mindset and will take stuff when it’s super

This year’s Spanish senior preferred

tickets from Banco Santander and its Consumer Finance entity.

STERLING

LLOYDS OPCO SENIOR JUMPS THE FENCE

Lloyds issued its inaugural opco senior from

a LLOYDS BANK CORPORATE MARKETS

Sole lead LBCM released IPTs at the 145bp area over mid-Gilts on Thursday, following up on investor meetings at the start of last week that had presented LBCM’s new £10bn EMTN programme. The benchmark Gilt for the deal is the 1% April 2024.

Guidance was set for an expected size of £500m at the plus 135bp area, with books around £1bn.

“We left the tenor pretty open between

end as investors showed a preference for

the trade. “We had some room for tightening and managed to maintain the

The spread was tightened to 132bp at launch with demand exceeding £1bn and the size set at £500m.

“For an inaugural trade it looks like it went really well – it got orders of £1bn and

away from the transaction. “For comparables I think you want to look at

LBCM sits at the same level as the ring-fenced Lloyds Bank within the group, but its ratings of A1/A/A are lower than Lloyds Bank’s Aa3/A+/A+.

“If you look at the new trade, it has come within the group levels and about 15bp

The DCM source also stressed that the credit should not be compared to NatWest Markets, Royal Bank of Scotland’s non-ring-fenced entity, rated Baa2/A/A–.

“Lloyds is smaller, has a different asset

“You want to be looking at opco and group

ALL GLOBAL AND EUROMARKET YEN BONDSBOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share bank or group issues ¥(m) (%)

1 Mizuho 11 188,316.71 22.3

2 Sumitomo Mitsui Finl 9 170,591.71 20.2

3 Nomura 6 99,941.67 11.9

4 Daiwa Securities 6 93,450.00 11.1

5 Mitsubishi UFJ MS 4 91,333.38 10.8

6 MUFG 3 45,975.00 5.5

7 BNP Paribas 2 40,050.00 4.7

8 SG 1 32,066.67 3.8

9 BAML 1 21,575.00 2.6

10 Natixis 1 15,525.00 1.8

Total 19 843,228.13

Excluding equity-related debt. Including preferreds.

Source: Refinitiv SDC code: K10

ALL SAMURAI BONDSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Mizuho 27 320,726.67 25.1


=2 Sumitomo Mitsui Finl 26 269,160.00 21.0

4 Nomura 16 177,200.00 13.8

5 HSBC 5 89,626.67 7.0


7 Natixis 5 40,900.00 3.2

8 BNP Paribas 4 18,460.00 1.4

9 Citigroup 1 17,500.00 1.4


Total 29 1,279,800.00

Excluding equity-related debt.


ALL INTERNATIONAL YEN BONDSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Mizuho 38 509,043.38 24.0



4 Nomura 22 277,141.67 13.1


6 HSBC 6 94,626.67 4.5

7 BNP Paribas 6 58,510.00 2.8

8 Natixis 6 56,425.00 2.7

9 MUFG 3 45,975.00 2.2

10 SG 1 32,066.67 1.5

Total 48 2,123,028.13

Including all Euro, foreign and global issues. Excluding equity-related

debt.



SWISS FRANCS

CEMBRA FINISHES FINANCING ACQUISITION WITH AT1

Originally known for its Swiss Auto Lease ABS deals and more recently its senior bank paper, CEMBRA MONEY BANK entered the AT1 space on Thursday to target retail and private banking accounts as part of its

Following a Zurich breakfast roadshow on Wednesday, IPTs were released in the afternoon at 2.75%-3% for a low-trigger perpetual Additional Tier 1 transaction with a November 2024 call.

That was revised to 2.5%-2.75% on Thursday morning for a no-grow SFr150m (US$149m) size, before pricing at the tight end of 2.5%, or 316.3bp over mid-swaps.

That was through Credit Suisse’s AT1 with a similar sub-investment-grade rating and only an eighth of a percent more than

the issue level on Julius Baer’s Triple B rated transaction from June 5.

As with all Swiss AT1s, most went to private banks, with asset managers taking a distant second place. Over 80 accounts took part - many more if the underlying orders from those private banks were available - with orders around SFr300m.

The securities were rated BB by S&P, which rates Cembra A- on a senior basis.

Joint lead managers were Credit Suisse and ZKB.

(see Structured Equity section for more on

YEN

SANTANDER CF PRINTS EUROYEN

SANTANDER CONSUMER FINANCE, rated A2/A–/A–, has raised ¥50bn (US$464m) from a dual-tranche Euroyen bond offering that marks its biggest deal in yen.

A ¥31.5bn three-year note tranche was priced at 40bp over yen offer-side swaps

note tranche was priced at 55bp over with a 0.482% coupon.

The issuer let both tranches be priced at the wider ends of initial guidance ranges to accommodate price-sensitive investors and new accounts. At the start of marketing last Monday, guidance ranges were 35bp–40bp and 50bp–55bp, respectively.

Price-sensitive investors were looking for absolute yields of 0.3% for the three-year and

The main buyers were megabanks, central public accounts and trust banks.

Both tranches were attractive on a relative value basis as they were priced about 20bp over the issuer’s euro curve.

was initially marketing 18-month and two-year tranches on a reverse enquiry basis, but dropped them.

Busy first half for yen but slowdown ahead YEN European banks, sovereigns boost yen issuance volumes

International yen bond issuance topped ¥2trn

(US$18.6bn) in the first half of 2019, a 57%

increase from the same period a year earlier, as

European banks and huge sovereign Samurai

transactions drove the busiest start to the

calendar year since 2008.

Volume is expected to drop in the second

half of the year as European lenders had rushed

to sell bail-in-able bonds before higher risk

weightings for regional investors kicked in on

April 1.

According to Refinitiv data, international yen

issuance reached ¥2.12trn in the first half, up

from ¥1.35trn a year earlier.

The key theme in January to March was

last-minute issuance from European banks.

Japanese regional investors were hungry for bail-

in-able bonds before the implementation by the

Financial Services Agency at the end of March

of a new risk weighting rule for investments in

bonds counting towards total loss-absorbing

capacity requirements.

BNP Paribas, BPCE, Rabobank, ING Group,

Societe Generale and Credit Agricole printed

bail-in-able bonds during the first quarter.

Notably, BPCE and ING were the only banks

not to choose a Euroyen format, as most of

the lenders wanted quicker funding than the

traditional Samurai format, which has a longer

marketing period.

Still, BNP Paribas was able to raise more

than ¥140bn from a dual-tranche callable senior

non-preferred bond offering, while BPCE used

the investor-friendly Samurai format to raise

¥163.6bn from a five-tranche senior preferred

and SNP transaction.

Issuance was expected to slow because of

the reduced demand for TLAC bonds from April

onwards, but sovereigns came to the rescue.

Malaysia printed in March a massive ¥200bn

10-year Samurai bond issue with a guarantee

from Japan Bank for International Cooperation,

and Indonesia raised ¥177bn without such

a guarantee from a six-tranche transaction.

Mexico drew more than ¥220bn of orders for a

capped ¥165bn four-trancher.

The issuers in the first half were more diverse

than usual, as the regular European banks were

joined by issuers from other regions.

From the US, Bank of America and MetLife

raised ¥86.3bn and ¥151.7bn, respectively.

From Asia came Korea National Oil, Korean

Air, Malayan Banking, HSBC and China

Construction Bank. From Latin America, Bladex

returned to refinance with a small three-year

Euroyen issue.

SLOWER SECOND HALFOne syndicate banker said he thinks volume

will slow down substantially in the second half,

partly because of reduced demand for TLAC

bonds. Indeed, SNP tranches from BPCE and

Credit Agricole in the second quarter only drew

¥55.6bn and ¥35.9bn, respectively.

Falling yen rates are also a new headache

for Japanese syndicate bankers. The five-year

yen swap rate dropped about 14bp in the first

half.

If Japanese investors stick with certain

absolute yield levels, foreign issuers will need

to pay a wide spread over yen swaps, probably

discouraging them from choosing the yen

market for funding.

The currency rates are also problematic for

bankers trying to bring new issuers to the yen

market.

Canadian banks are potential yen bond

issuers as they have been actively selling bail-

in-able bonds in dollars and euros and are

expected to do so in yen eventually. Last week,

Toronto-Dominion Bank issued its first bail-in-

able Kangaroo in Australia.

However, falling swap rates would make

Canadian bonds less attractive to Japanese

investors.

“The new five-year TD bond in Australian dollars

priced at a 100bp spread is equivalent to an absolute

yield level of just 0.06% in yen,” said a second

syndicate banker. “[At that level] I think investors

would choose to buy domestic municipal bonds.”

SNPs from Nordic banks would not be

attractive either.

”Their SNPs are currently trading about 50bp

over Libor in euros, which is about 20bp over in

yen and 0.14% in an absolute yield terms,” said

the syndicate banker. “I think investors would

go to domestic electric power companies, which

yield 0.18%.”

Takahiro Okamoto


BONDS COVERED BONDS

issue since 2017, when it printed a ¥20.8bn three-tranche Pro-bond deal. Its debut deal, printed in 2016 also in the Pro-bond market, was ¥12.7bn.

Daiwa, Mizuho and SMBC Nikko were the lead managers on the deal, which will not be listed on the Pro-bond market.

NON-CORE CURRENCIES

BNPP STUNS WITH AUSSIE AT1 FIRST

BNP PARIBAS (Aa3/A+/AA–) secured astonishing

Australian dollar AT1 note issue from a non-Australian bank.

Having taken indications of interest in the morning in the 5.25% area, guidance was

4.500%–4.625% before pricing at the tight end of that range.

The A$300m perpetual non-call 5.5-year Additional Tier 1 Reg S note offering attracted huge demand, including an order book in excess of A$3bn when guidance was

for yield in an increasingly low interest rate world.

A source close to the proceedings said the deal was opportunistic and driven by enquiries from private bank clients with Australian dollar funds to deploy and a desire for yield.

A 25bp cut in the Reserve Bank of Australia cash rate a day earlier, to a record low 1.0%, and the prospect of further easing

according to a lead manager on the trade.Asian investors were predominant with a

66% allocation while Australians bought 27% and EMEA 7%. Private banks took 65%, asset managers 19%, banks 9% and others 7%.

issuer’s perspective given that the 5.25%

issued in March.Australian dollar investors’ appetite for

foreign bank paper had been seen in a recent wave of deals, with Societe Generale pricing a 15-year non-call 10 Tier 2 issue at 4.5% in April, Credit Agricole selling a 15-year non-call 10 Tier 2 offering at 4.2% the following month, and Barclays and Standard

holdco Kangaroos in June.BNPP’s result can only encourage other

dollar market for some of their capital needs.

The subordinated notes have expected ratings of Ba1/BBB–/BBB– compared with

BNP Paribas’ senior ratings of Aa3/A+/AA–.Nomura and Westpac were global

coordinators and joint bookrunners with ANZ, CBA, NAB and TD Securities.

TD OPENS TLAC KANGAROO MARKET

TORONTO-DOMINION BANK, rated Aa1/AA– (Moody’s/S&P), raised A$1.25bn (US$875m)

by a Canadian bank.Last Wednesday’s transaction could

trigger copycat trades from other Canadian majors as long as comparative pricing stacks up, according to a banker on the deal.

tranche was priced inside 105bp area guidance at three-month BBSW plus 100bp

notes were priced at 99.776 for a yield of 2.0975%, 100bp wide of asset swaps.

The banker said this represented a modest single-digit new issue concession against where a new benchmark Toronto-

would be priced.Pricing was competitive despite an

approximate 10bp decline in the Australian

basis swap from March and April levels, to around 23bp last week.

ANZ, CBA, DBS, NAB, Standard Chartered and Westpac were joint lead managers for the notes, which have expected ratings of Aa3/A (Moody’s/S&P).

COVERED BONDS

EUROS

DEBATED PRICE EARNS SANTANDER CEDULAS BIG BOOK

BANCO SANTANDER secured the tightest spread for a Spanish covered bond in almost three

although some bankers questioned whether even that price was overly generous.

The 10-year Cedulas Hipotecarias was marketed at IPTs of mid-swaps plus 20bp area, before guidance of 16bp area (+/-1bp)

Demand continued to grow and the spread was set at the tight end on the back

Bankers away from the trade said the IPTs seemed generous, putting fair value at around 10bp based on Santander’s curve. Its 1.125% October 2028 was quoted at a mid-price of 7bp and its 0.875% May 2031 at 14bp, according to Tradeweb data.

Some bankers said this was understandable - Santander was targeting a

covered in April - but also unnecessary given the strength of the market.

said a syndicate banker away, “but when

another basis point and you get another

“I think they then didn’t want to twist

The spread is, nevertheless, the tightest on a benchmark Spanish covered since October 2016.

A syndicate banker at one of leads said they could have started tighter but argued the approach was appropriate as the deal is Santander’s third benchmark covered since October 2018.

“Fifteen basis points is an unbelievable

yields here, you don’t have insurance buyers, so the buying is driven by asset managers. That’s why the swap level

The deal follows a rally in Spanish government debt since mid-June and priced

Spanish covereds have also performed strongly in recent months. The iBoxx EUR Spain Covered index has tightened 20bp year-to-date, outperforming the overall iBoxx EUR Covered index by 9bp.

Demand for Spanish covereds is heightened because supply has been limited for some time. Before Santander’s trade, year-to-date issuance amounted to just

matured in June alone.Santander, at least, is stepping up Cedulas

issuance after focusing on TLAC instruments over the last two years. But it has already reached the lower end of its 2019 Cedulas

ALL COVERED BONDS (ALL CURRENCIES)BOOKRUNNERS: 1/1/2019–30/6/2019


1 HSBC 42 8,446.95 6.6

2 UniCredit 58 8,414.48 6.6

3 LBBW 44 8,042.19 6.3

4 Natixis 32 6,617.03 5.2


6 Deutsche Bank 30 5,835.79 4.6

7 Barclays 28 5,747.46 4.5

8 UBS 25 4,993.42 3.9

9 ING 24 4,905.88 3.8


Total 175 127,572.00



Banca IMI, Deutsche Bank, NatWest Markets, Nomura and Santander were leads.

CIBC EXTENDS CANADIANS WITH ‘COMMITMENT’ COVERED

CANADIAN IMPERIAL BANK OF COMMERCE pushed Canadian covereds further out along the curve as it tried to stay above negative yields for a well-received comeback trade.

benchmark covered bond in euros since January 2018.

“This trade is more a demonstration of

the leads.Leads ABN AMRO, BNP Paribas, CIBC, DZ

Bank and HSBC over mid-swaps last Wednesday, inside

“After 18 months away from the market, to take a yard at 9bp with no new issue

1bp back of fair value, citing Royal Bank of Canada June 2026s - the most recent euro benchmark from Canada - at 7.5bp, mid.

The deal extends CIBC’s euro covered bond curve by four years. Its 0.25% January 2023s, its longest dated outstanding, were quoted at 4.5bp.

The eight-year deal is the longest dated euro covered bond from Canada since the

Canadian banks tend to favour shorter tenors, but CIBC - like most covered bond issuers in recent times - had to move further out along the curve if it was to offer a positive yield. Euro swap rates are negative up to eight years.

CIBC is the only non-European issuer to have sold a negative-yielding covered bond,

2016, but was not keen to repeat the trick.

ARKEA COVERED QUICK OFF THE MARK

ARKEA HOME LOANS’ 10-year covered was done and dusted in short order on Friday,

little over two hours.

year, came in 5bp from guidance to a swaps plus 6bp reoffer.

although two bankers away saw it coming through the Arkea curve by 1bp–2bp.

The lead put the speed of execution down to a lack of competing supply.

“There’s not much else to focus on this morning. And don’t forget it’s [US nonfarm] payrolls this afternoon so people want to be

progress.Spreads in the sector have rallied well this

year, the iBoxx French Covered Bond index tightening to 6bp from a wide just north of

OATs have also performed with the 10-year yield turning negative at the end of last month and since extending to –0.11%.

In that context the lead said the initial guidance may have seemed too generous.

“If you look at what’s being issued and the 5bp tightening on the trade you could see

Compatriot AXA Home Loans, for instance, debuted late last month with a

Others, nevertheless, thought the starting point was reasonable given the ultra-low yields and less investor sensitivity to spreads.

“With people thinking more and more in terms of absolute return they don’t mind the tightening as long as something is left

“The 11bp looks unambitious and the trade

Credit Agricole, Credit Mutuel Arkea, LBBW, NykreditBank and Santander were bookrunners.

Meanwhile, SOCIETE GENERALE SFH readied

marketed last week, concluding on Friday, with Societe Generale as sole structuring adviser and a global coordinator, as well as ABN AMRO, Commerzbank, Danske Bank, ING and UniCredit.

Investor meetings started on July 3 with the deal targeting a 10-year maturity. The trade is expected as early as Monday.

mortgages for new residential buildings belonging to the top 15% low carbon buildings in their region.

bond from France, although country peer Caisse Francaise de Financement Local

SWISS FRANCS

VALIANT COVERED COMES HOT ON THE HEELS OF CSS

VALIANT BANK extended its covered curve out to 10 years on Wednesday, just a week after Credit Suisse (Schweiz) debuted its own covered bonds at remarkably similar terms.

CS had printed a SFr250m (US$248m) 0% coupon and yield 10-year at mid-swaps plus 21bp (51bp over government bonds), broadly in line with Valiant’s curve at the time.

Softsounding started Tuesday for a 10-year at 0%-0.05% (mid-swaps plus 23.5bp-28.5bp, Eidgenossenschaft plus 60bp-65bp).

Books opened on Wednesday morning for a no-grow SFr400m, set at a 0% coupon and yield. Pricing equated to swaps plus 27.75bp or govvies plus 66bp, as rates dropped overnight.

That 0% yield is a fairly hard limit for many investors that are unwilling or unable to buy negative-yielding 10-year paper.

Books hit SFr600m with 42 accounts represented, over a half being asset managers, more than a quarter insurers and an eighth private banks, with pension funds taking a scant 2%. Bank treasuries did not take part, as the bonds, in line with all Swiss banks, are not repo-eligible at the SNB.

The bonds are expected to be rated Aaa by Moody’s and are issued under Valiant Bank’s SFr5bn contractual covered bond programme, which is governed by Swiss law and guaranteed by Valiant Hypotheken.

The bonds tightened in the secondary market, quoted at swaps plus 24.2bp on Friday, according to Tradeweb.

Lead managers and joint bookrunners were Credit Suisse and ZKB, with Valiant Bank joint lead no books.

HIGH-YIELD

UNITED STATES

INTELSAT BONDS HIT ON C-BAND AUCTION PROPOSAL

Bonds issued by satellite company INTELSAT fell last week after a counter-proposal to its market-based C-band auction renewed concerns about the debt-laden company’s deleveraging plans.

The 5.5% 2023s issued by Intelsat Jackson Holdings were down a point at 91.00 on Tuesday, while the 8.125% 2023s issued by Intelsat Luxembourg fell 1.875 points to hit 75.75, according to MarketAxess data.

This came after an advocacy group including Charter Communications sent a letter on Tuesday to the Federal Communications Commission proposing one auction for all C-band spectrums with the use of proceeds being directed by Congress.

Intelsat has large holdings of C-band spectrum - airwaves primarily used for transmitting cable TV via satellites, which the Federal Communications Commission wants to open up to roll out 5G networks for US consumers.


BONDS HIGH-YIELD

The FCC is yet to decide how the spectrum capacity will be freed up.

Investors had been hoping that Intelsat would be able to cash in on a market-based sale of C-band spectrum to bring down leverage, which stands at around nine times.

Tuesday’s letter, however, called the market-based C-band auction proposed by the C-Band Alliance (CBA), which includes

The group added that its own approach “best serves the public interest by ensuring

applications are made available to consumers as quickly and as widely as

Luxembourg-based Intelsat had already come under pressure in March amid reports that US President Donald Trump would push for a bigger role in managing the country’s 5G wireless spectrum.

And some lawmakers in the US have

C-band spectrum.The company, along with several other

satellite providers, has been pushing for a voluntary market-based sale of C band spectrum to create space for 5G.

Despite some speed bumps, analysts at Citigroup in March had expected Intelsat to successfully complete the sale and use the approximately US$3bn in proceeds to bring

Moody’s, however, said in June that Intelsat’s capital structure is unsustainable with an increased potential for a debt restructuring.

In June, Intelsat Jackson Holdings tapped its 9.75% 2025s at par to raise another US$400m, in part to repay debt. Those bonds were still above reoffer at 101.875 on Tuesday but off the high of 104.063 seen on June 20, according to MarketAxess data.

Interest expense now consumes almost 65% of Ebitda, up from just over 50% four years ago, and with Ebitda declining liability

management has done little to dent leverage, said Moody’s.

company would subsequently be

EUROPE/MIDDLE EAST/ AFRICA

HIGH-YIELD SUPPLY LIKELY TO STAY MUTED IN JULY

European high-yield issuance is down nearly 40% from 12 months ago and bankers say volumes are likely to stay muted until after the summer.

six months of 2018, according to IFR data.Sterling volumes are also down this year,

though by much less. Issuance in the currency reached £2.4bn through to the end of June, compared with £2.7bn last year.

But despite helpful conditions and strong technicals - average yields for euro junk bonds have collapsed this year by 150bp to 3.5% as of July 2, according to iBoxx data - bankers do not expect a big pick-up in supply over the short term.

“The market is extremely one-

banker.“But the challenge for us is that a lot of

the next maturities coming up are 2023-

coupon bond and so the paybacks don’t look

In addition, the summer holidays are coming up and companies are opting to push any borrowing needs to September, when they believe the ECB will give more clarity on asset purchases.

“We’re going to Southern European and Scandinavian borrowers and saying: you should take the opportunity to issue in July

“But on the margin there is just no palpable sense of urgency, even though the

Despite compression in yields, it’s not a free-for-all. While Double B credits have rallied, Triple C rated bonds are getting left behind.

Double B yields had compressed to 2.1% by Friday afternoon - almost half the 4% at the start of the year, compared to iBoxx’s euro BB high-yield index.

In comparison, average yields on Triple C credits were at 14.5% compared with 12.6% at the start of the year.

ripping tighter, which makes Single Bs look

banker said. “But investors aren’t compromising on credit fundamentals to

In addition, bonds throughout the Triple C universe have been trading at a material spread premium as names such Thomas Cook and Nyrstar show signs of distress.

“There is a massive dispersion between Single B and Triple C, where a number of

LOAN GROANFresh supply in the euro high-yield market is also down this year because LBO transactions are favouring loans, Spread Research analysts wrote in a June 28 report.

“It’s been pretty underwhelming in terms

“Companies seem to be printing all they can

The sale of Nestle’s Skin Health business to a consortium led by EQT Partners and ADIA provides a recent example.

ALL COVERED BONDS (ALL CURRENCIES)BOOKRUNNERS: 1/1/2019–30/6/2019


1 HSBC 42 8,446.95 6.6

2 UniCredit 58 8,414.48 6.6

3 LBBW 44 8,042.19 6.3

4 Natixis 32 6,617.03 5.2


6 Deutsche Bank 30 5,835.79 4.6

7 Barclays 28 5,747.46 4.5

8 UBS 25 4,993.42 3.9

9 ING 24 4,905.88 3.8


Total 175 127,572.00


ALL US$ DENOMINATED HIGH-YIELD BONDS BOOKRUNNERS – 1/1/2019–30/6/2019


1 JP Morgan 114 15,750.97 9.4

2 Credit Suisse 94 11,933.50 7.1

3 Citigroup 98 11,626.19 6.9

4 BAML 95 10,803.62 6.4

5 Goldman Sachs 91 10,658.85 6.3


7 Deutsche Bank 96 9,236.38 5.5

8 Barclays 87 8,540.81 5.1

9 RBC 52 6,025.07 3.6

10 Wells Fargo 52 5,319.19 3.2

Total 291 168,303.20

Including US domestics, Euro, foreign, globals. Excluding equity-related debt.

Source: Refinitiv SDC code: B5

ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS1/1/2019–30/6/2019


1 Deutsche Bank 17 2,511.86 8.1

2 JP Morgan 16 2,090.74 6.8

3 BNP Paribas 20 2,079.06 6.7

4 Goldman Sachs 17 1,966.00 6.4

5 Citigroup 16 1,876.93 6.1


7 HSBC 17 1,630.37 5.3

8 UniCredit 12 1,313.47 4.3

9 Barclays 12 1,269.53 4.1

10 BAML 10 1,080.04 3.5

Total 64 30,832.11


Source: Refinitiv SDC code: B6


SFr3.5bn of senior leveraged loans, SFr1.3bn of pre-placed second-lien loans and a SFr500m revolving credit facility.

At SFr1.3bn, it will be the largest second-

high-yield bond market will miss out.A senior banker speaking to LPC in May

said: “High-yield bonds had been considered

This presents a problem for high-yield primary, Spread Research analysts said.

“We view loans dominating in LBO transactions as a key issue for high-yield accounts, as scarcity of true high-yield

they wrote.

MERLIN AT RISK OF BEING FURTHER JUNKED

Moody’s threatened to push MERLIN

ENTERTAINMENT further into junk on Thursday, saying the company’s Ba2 rating is at risk from an expected increase in leverage from its £5.91bn buyout.

UK theme park and attraction operator Merlin is being acquired by an investment vehicle of Lego’s founding family and

The purchase is being backed by a loan

Merrill Lynch and Deutsche Bank, who will provide the consortium a total of £3.8bn equivalent of debt - mostly in term loans.

Merlin’s debt levels are around £1.3bn, according to Moody’s. The ratings agency expects the acquisition debt to increase

downgrade trigger of 5x - from 3.9x in 2018.

growth in 2019 because of strong year-earlier comparables and rising payroll

As a result, Moody’s expects the group deleveraging pace to be lower and to only start in 2020.

2.750% senior note due 2022.That bond includes a change of control

clause, which allows bondholders to request full repayment at 101, analysts said.

“Moody’s understands that the buyer

amount of the notes and expects to withdraw the notes’ ratings should it be

“However, if the existing notes remain in the new capital structure, their credit quality will deteriorate due to the expected

It seems like investors expect the notes to be repaid. Merlin’s 2022s were seen bid at 105 on Wednesday afternoon, up from 104 the day before, according to Tradeweb.

Merlin also carries a BB rating from S&P, which was put on negative watch on July 2.

STRUCTURED FINANCE

EMEA MBS

BELMONT GREEN SELLS TOWER BRIDGE BTL

BELMONT GREEN became the latest UK specialist lender to price into a busy market last week when it sold UK buy-to-let RMBS TOWER BRIDGE FUNDING NO.4.

The book for the Triple As, which offered £391.875m bonds to investors, took time to build.

The tranche was 0.85 times covered after initial price thoughts of Sonia plus 125bp-130bp, and the next update said the tranche was approximately more than one time covered (it was shown at

The same update notifying investors of a lead order with a minimum guarantee on

the Class A, and said there were also 30% guarantees on Classes C, D, E and F.

Final pricing on the Class A came in the middle of the IPTs range, at Sonia plus 127bp, where the tranche was around 1.1 times covered.

The total tranche size was £421.5m, including the 5% which the originator retained as part of a vertical slice risk retention.

The mezzanine tranches were priced largely in line with IPTs. The Aa2/AAH Class B came 1.5 times covered at 200bp over Sonia, the A3/A Class C was 3.5 times covered at 250bp and the Baa3/BBBH Class D was four times covered at 275bp.

Below investment-grade, the Ba3/BBL Class E was three times done at 375bp and the B3/BBL Class F was twice done at 450bp.

Tranche sizes, excluding the 5% retention, were £25.887m, £20.425m, £12.587m, £7.6m and £6.65m.

Barclays, JP Morgan, Macquarie and Santander were joint leads.

OBVION AND VENN BOTH BACK WITH DUTCH RMBS

Two Dutch issuers, one owned by Rabobank and the other by investment manager Venn Partners, last week both came with Dutch RMBS trades structured to meet simple, transparent and standardised regulations.

Rabobank’s OBVION sold its fourth green

Triple As at a discount margin of 22bp over three-month Euribor.

GREEN STORM 2019 was lead-managed by Rabobank and Societe Generale and securitised a fully revolving portfolio of prime energy-

The notes were priced after a two-day execution process that left them 1.6 times covered.

Initial price thoughts had been 27bp area, matching the 27bp new issue print of Obvion’s previous RMBS offering, Storm

4.9-year, had come in to around 22bp in secondary trading.

Price guidance for the new issue was squeezed to 22bp–24bp (will print in range)

There were 29 accounts in the book, including some that were new to Obvion’s Storm series. Investors from Germany made up 32%, the Benelux region 30%, France 26%, the UK 10% and others 2%.

Banks bought 45%, asset managers 23%,

insurers 13% and pension funds 6%.VENN PARTNERS sold its Dutch trade,

CARTESIAN RESIDENTIAL MORTGAGES 4, on Friday. The deal securitises loans newly originated by its mortgage lender Venn Hypotheken

ALL ASIAN HIGH-YIELD ISSUERS1/1/2019–30/6/2019


1 Credit Suisse 35 3,933.80 8.6

2 Haitong Securities 56 3,087.09 6.7

3 Citic 41 2,925.59 6.4

4 UBS 34 2,467.84 5.4

5 Deutsche Bank 39 2,378.67 5.2

6 HSBC 35 2,235.16 4.9

7 Guotai Junan Secs 49 1,941.40 4.2

8 Goldman Sachs 14 1,808.56 3.9


10 JP Morgan 14 1,726.69 3.8

Total 120 45,898.67


Source: Refinitiv SDC code: B06d

ALL EUROPEAN HIGH-YIELD ISSUERS1/1/2019–30/6/2019


1 Citigroup 22 3,309.07 7.6

2 Deutsche Bank 16 3,039.48 7.0

3 BNP Paribas 22 2,887.04 6.6

4 JP Morgan 19 2,707.82 6.2

5 Goldman Sachs 17 2,338.75 5.4

6 HSBC 18 2,302.39 5.3


8 Barclays 13 2,024.41 4.7

9 Credit Suisse 12 1,942.39 4.5

10 BAML 12 1,902.49 4.4

Total 73 43,479.64


Source: Refinitiv SDC code: B06c


STRUCTURED FINANCE

and, unlike Green Storm, offered three mezzanine tranches below the Triple As.

Those 4.5-year Triple As were sized at

over three-month Euribor, in from high 50s IPTs and 55bp area guidance. There was a one-time test tighter on Friday at 52bp (+/-1bp).

3.7-year Triple As sold by Venn’s previous Cartesian RMBS in April, which came at 52bp over.

DBRS) Class B came 3.6 times covered at

at 135bp and 175bp, from mid-100s and high 100s IPTs. The two tranches were 2.8 and 3.2 times covered.

The notes are backed by a static portfolio that including a portion of pre-funding is

years and the average original loan to original mortgage value is 96.4%. Interest-only mortgages make up 33.7% and the average interest rate is 2.6%.

BNP Paribas and Citigroup were joint leads and BNP Paribas and Venn Partners were joint arrangers.

CANTERBURY 1 EXPECTED ON MONDAY

Specialist lender ONESAVINGS BANK’s UK buy-to-let RMBS CANTERBURY FINANCE NO.1 is expected to be priced on Monday, according to a message from the leads on Friday afternoon that reported the Class A1 covered at IPTs.

IPTs of Sonia plus 115bp-120bp were released on Wednesday. Pricing had been targeted for Friday last week.

The message said a number of accounts were still to revert. It did not mention the mezzanine tranches, which have been

announced.

The expected settlement date is Friday this week.

The deal’s 1.98-year Class A1 makes up 40% of the capital stack. The underlying portfolio is sized at £539.6m, indicating the tranche will be sized at around £215m.

Bank of America Merrill Lynch and Morgan Stanley are the leads.

FINANCE IRELAND MANDATES IRISH RMBS

FINANCE IRELAND has mandated its debut RMBS, FINANCE IRELAND RMBS NO. 1, which will securitise Irish owner-occupied and buy-to-let mortgages. Bank of America Merrill Lynch is arranger and is a joint lead with BNP Paribas and Citigroup.

A multi-tranche transaction is expected to follow. A four-day roadshow will visit London, Paris, Germany and the Netherlands this week.

in May, a CMBS called Pembroke Finance backed by a granular pool of CRE loans. Finance Ireland also has an established auto

Last year, the company began residential mortgage origination, funded by M&G, and

originated mortgages from Pepper Money.

IRISH RMBS SHAMROCK EXITS AS ERLS JOINS QUEUE

SHAMROCK RESIDENTIAL 2019-1

securitisation of performing and re-performing Irish mortgages bought by Lone Star, was priced last week and quickly replaced in the pipeline by a new Lone Star Irish RMBS, ERLS 2019-NPL1.

Morgan Stanley is sole lead on both deals.

were priced at a discount margin of 90bp over Euribor, in from initial price thoughts of 100bp–111bp.

mezzanine notes from AA/AA (S&P/DBRS) to B–/BL. Morgan Stanley Principal Funding took a 5% vertical slice for risk retention purposes.

The new announcement, ERLS 2019-NPL1, is backed by non-performing mortgages. Most of the portfolio, at 86%, is in arrears of 12 months or more.

There are 1,355 loans with a total balance

The indexed current LTV is 101.34%, the weighted average coupon is 3.01% and interest-only loans make up 36.06%.

The originators were Bank of Scotland (Ireland), Start Mortgage and Nua Mortgages. The mortgages were bought by Lone Star in 2014.

There are three tranches on offer: a

BB Class C.

FINSBURY SQUARE 2019-2 MANDATED

KENSINGTON MORTGAGE CO has mandated BNP Paribas as arranger and BNP Paribas, Citigroup, Deutsche Bank, NAB and Standard Chartered as joint lead managers for UK RMBS FINSBURY SQUARE 2019-2.

The deal will securitise specialist prime,

target UK placement.The issuer is available for investor

meetings or calls from Monday.

CO-OPERATIVE BANK RETAINS NEW SILK ROAD RMBS

THE CO-OPERATIVE BANK has issued a fully retained UK RMBS off its Silk Road Finance series.

SILK ROAD NUMBER FIVE was arranged by HSBC

tranche at Sonia plus 85bp. There are also two variable funding notes at £82.784m and £14.67m.

GLOBAL STRUCTURED FINANCE IN EUROSBOOKRUNNERS: 1/1/2019–30/6/2019




3 SG 5 1,092.28 10.6

4 HSBC 4 922.87 8.9

5 UniCredit 3 754.80 7.3

6 Lloyds Bank 2 659.35 6.4

7 BAML 3 643.78 6.2

8 SEB 1 481.13 4.7

9 Citigroup 3 434.04 4.2

10 ABN AMRO Bank 1 415.53 4.0

Total 26 10,346.39

Includes securitisations, credit-linked notes (Euro, foreign, global and domestics) and excludes CDOs.

Source: Refinitiv SDC code: B16g

ALL EUROPEAN ISSUERSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Citigroup 12 4,417.42 17.7

2 Lloyds Bank 9 2,346.40 9.4

3 BAML 11 2,307.46 9.2

4 HSBC 10 1,982.49 7.9

5 BNP Paribas 9 1,540.01 6.2



8 SG 4 1,188.72 4.8

9 UniCredit 3 846.10 3.4


Total 50 24,980.23

Includes securitisations, credit-linked notes (Euro, foreign, global and domestics) and excludes CDOs.

Source: Refinitiv SDC code: B16n

ALL INTL ISSUERS (EXCLUDING SELF-FUNDED)BOOKRUNNERS: 1/1/2019–30/6/2019


1 Credit Suisse 71 15,052.07 11.1

2 Citigroup 64 14,745.41 10.8

3 BAML 50 11,805.01 8.7

4 JP Morgan 52 10,554.77 7.8

5 Barclays 45 9,396.87 6.9

6 Wells Fargo 39 8,305.20 6.1

7 Goldman Sachs 39 7,584.90 5.6

8 Deutsche Bank 47 7,549.14 5.5

9 Nomura 26 6,401.23 4.7

10 Morgan Stanley 25 5,534.69 4.1

Total 276 136,159.78

Includes securitisations, PFI bonds and credit-linked notes. Excludes US global ABS/MBS, CDOs and self funded issues.

Source: Refinitiv SDC code: J10d


The portfolio comprises owner-occupied prime member mortgages originated by the Co-operative Bank’s subsidiary, Platform Funding.

EMEA ABS

MERCEDES-BENZ BANK SELLS FULL-STACK AUTO ABS

MERCEDES-BENZ BANK

balance-sheet auto ABS issue last week,

portfolio of German auto loans.The deal, SILVER ARROW 10, was upsized

full capital stack. It was arranged by HSBC, which was lead manager on all tranches. ING was joint lead on the Class A only.

That Triple A rated Class A, sized at

came at a discount margin of 19bp over one-month Euribor, well in from mid-20s initial price thoughts.

Three mezzanine tranches were also

4.34 years. They were priced at discount margins of 68bp, 130bp and 230bp.

privately placed after a competitive auction process.

German accounts took 51% of the bonds, France 17%, the Benelux countries 15%, the UK 12% and other Europe 5%. By type, banks took 43%, central banks and agencies 31%, fund managers 24% and insurance 2%.

The deal was structured to comply with simple, transparent and standardised regulations.

Mercedes-Benz was in the asset-backed market in May with Italian ABS Silver Arrow

tranche at 54bp over Euribor.Its most recent German auto deal was

Silver Arrow 9 in July 2018. That sold

discount margin over Euribor.The originator will comply with risk

retention rules for the new issue by holding a randomly selected portion of loans on its balance sheet.

MY MONEY BANK RETURNS WITH FRENCH OVERSEAS AUTOS

MY MONEY BANK, formerly GE Money Bank France and now owned by Cerberus, priced its second auto ABS from four French overseas territories on Wednesday.

SAPPHIREONE 2019-1 securitises auto loans and leases from the same four territories - Guadeloupe, Martinique, French Guyana and La Reunion - as in its 2017 debut.

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 5/7/2019

Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type

CFG 2019-1 US$196.5 2.90 5.560 Guggenheim Securities NR/BBB/NR ABS

CFG 2019-1 US$25.5 4.30 7.620 Guggenheim Securities NR/BB/NR ABS

Cifc European Funding CLO I €2 1.10 3mE+50bp Deutsche Bank Aaa/NR/AAA CLO

Cifc European Funding CLO I €248 5.80 3mE+114bp Deutsche Bank Aaa/NR/AAA CLO

Cifc European Funding CLO I €28.5 7.20 3mE+190bp Deutsche Bank Aa2/NR/AA CLO

Cifc European Funding CLO I €11.5 7.20 2.50 Deutsche Bank Aa2/NR/AA CLO

Cifc European Funding CLO I €28 7.70 3mE+270bp Deutsche Bank A2/NR/A CLO

Cifc European Funding CLO I €24 8.30 3mE+385bp Deutsche Bank Baa3/NR/BBB- CLO

Cifc European Funding CLO I €20 8.80 3mE+586bp Deutsche Bank Ba2/NR/BB CLO

Cifc European Funding CLO I €12 9.30 3mE+862bp Deutsche Bank B2/NR/B- CLO

Cifc European Funding CLO I €0.5 – N/A Deutsche Bank NR/NR/NR CLO

Cifc European Funding CLO I €33 – N/A Deutsche Bank NR/NR/NR CLO

FCT SAPPHIREONE AUTO 2019-1 €300 2.23 1mE+50bp Societe Generale/BNP Paribas/Credit Agricole Aaa/NR/AAA ABS

Limes Funding 2019-1 €671.2 1.46 1mE+0.50 Societe Generale NR/AAA/AAA ABS

Newstar Clarendon Fund CLO LLC US$25.5 – 3mUSL+305bp Citigroup A2/NR/NR CLO

Newstar Clarendon Fund CLO LLC US$188.38 – 3mUSL+130bp Citigroup Aaa/NR/AAA CLO

Newstar Clarendon Fund CLO LLC US$42.7 – 3mUSL+205bp Citigroup Aa2/NR/NR CLO

SBOLT 2019-2 £150.773 1.60 1mL+120bp Deutsche Bank Aa3/AA/NR ABS

SBOLT 2019-2 £3.479 2.20 1mL+180bp Deutsche Bank A3/AA/NR ABS

SBOLT 2019-2 £19.716 2.20 1mL+275bp Deutsche Bank Baa3/AA/NR ABS

SBOLT 2019-2 £19.716 2.20 1mL+380bp Deutsche Bank Ba3/A/NR ABS

Silver Arrow SA Compartment 10 €1,162.5 1.49 1mE+50bp HSBC/ING NR/AAA/AAA ABS

Silver Arrow SA Compartment 10 €52.5 3.67 1mE+70bp HSBC/ING NR/A+/A ABS

Silver Arrow SA Compartment 10 €17.5 4.09 1mE+135bp HSBC/ING NR/A+/A ABS

Silver Arrow SA Compartment 10 €11.2 4.34 1mE+230bp HSBC/ING NR/BB+/BB+ ABS

Silver Arrow SA Compartment 10 €6.3 0.50 N/A HSBC/ING NR/NR/NR ABS

STAR 2019-1 US$376.45 2.05 2.858 Credit Suisse/Deutsche Bank NR/AAA/NR RMBS

STAR 2019-1 US$30.302 2.05 3.058 Credit Suisse/Deutsche Bank NR/AA/NR RMBS

STAR 2019-1 US$55.689 2.05 3.208 Credit Suisse/Deutsche Bank NR/A/NR RMBS

STAR 2019-1 US$32.486 4.04 3.726 Credit Suisse/Deutsche Bank NR/BBB/NR RMBS

STAR 2019-1 US$24.296 4.04 4.726 Credit Suisse/Deutsche Bank NR/BB/NR RMBS

Tower Bridge Funding NO 4 £412.5 3.09 SONIA+127bp Barclays/JP Morgan/MQB/Santander Aaa/NR/NR RMBS

Tower Bridge Funding NO 4 £25.887 3.45 SONIA+200bp Barclays/JP Morgan/MQB/Santander Aa2/NR/NR RMBS

Tower Bridge Funding NO 4 £20.425 3.45 SONIA+250bp Barclays/JP Morgan/MQB/Santander A3/NR/NR RMBS

Tower Bridge Funding NO 4 £12.587 3.45 SONIA+275bp Barclays/JP Morgan/MQB/Santander Baa3/NR/NR RMBS

Tower Bridge Funding NO 4 £7.6 3.45 SONIA+375bp Barclays/JP Morgan/MQB/Santander Ba3/NR/NR RMBS

Tower Bridge Funding NO 4 £6.65 3.45 SONIA+450bp Barclays/JP Morgan/MQB/Santander B3/NR/NR RMBS


STRUCTURED FINANCE

securitise residual value risk.

less than 10% of the assets but meant it wasn’t eligible with the ECB [as repo collateral], which prevented some bank

Wakil, treasurer at My Money Bank.Stripping out residual value meant the

new deal is ECB eligible.It is also structured to comply with the

simple, transparent and standardised

ABS to do so.Around 20 investors participated.“There were many new accounts, and

around 80% of the 2017 book returned for

head of capital markets at My Money Bank. Robequain said banks, mainly treasuries of European banks, bought 40% of the new issue.

A notes at a discount margin of 31bp over one-month Euribor. Initial price thoughts

reoffer.“The territories are part of France; they

Wakil said. “But we do pay an additional premium of around 5bp-10bp because these are overseas territories and because we are a

The 31bp print is well inside the 38bp from the 2017 deal, which offered a

life of 1.13 years. The maturity was extended in the new deal by a one-year revolving period.

The unusual location of the assets means the portfolio is very geographically concentrated, and La Reunion makes up 53% of the pool.

Fitch notes in its pre-sale report that the two My Money Bank subsidiaries which originate the assets are key market players in French overseas regions. Car manufacturer captives are not present there.

rate loans (63%) and leases (37%) with an

seasoning of 10 months. The weighted average interest rate is 5.33%, and the new/used split is 85%/15%.

BNP Paribas, Credit Agricole and Societe Generale were joint leads.

FUNDING CIRCLE ABS PRICED AFTER GROWTH FORECASTS CUT

Peer-to-peer lender FUNDING CIRCLE announced it was halving its 2019 growth forecast and tightening lending criteria last Tuesday, shortly before its second UK SME ABS of the year was priced by lead manager Deutsche Bank.

results last Tuesday that it expected 2019

revenue growth to be 20% year-on-year, compared to the 40% it previously expected.

It said the economic outlook has lowered demand for loans.

“The uncertain economic environment has reduced demand from small businesses and led us to proactively tighten lending

Samir Desai in a statement.Deutsche Bank then set spreads for

Funding Circle ABS SBOLT 2019-2. The announcement said there was an undisclosed amount of lead manager interest in the bonds.

The £150.773m of 1.61-year Aa3/AA seniors came at 120bp over one-month Libor, in line with 120bp area IPTs.

The mezzanine tranches comprise a £3.479m A3/AA Class B, a £19.716m Baa3/AA Class C and a £22.036m Ba3/A Class D, all with 2.21-year WALs. They came at 180bp, 275bp and 380bp over one-month Libor, after IPTs of high 100s, high 200s and high 300s.

LLOYDS IN MARKET WITH PENARTH CARDS ABS

LLOYDS BANK has announced UK credit card ABS PENARTH 2019-1. The deal is structured to comply with simple, transparent and standardised regulations and is offering two-year US dollars and three-year sterling.

Last month Lloyds updated its Penarth prospectus to allow for issuance linked to benchmarks other than Libor. It can now sell bonds linked to Libor, Euribor, SOFR or Sonia.

The sterling tranche for the new issue is linked to Sonia, but the dollars still pay over one-month Libor. They reach expected maturity in July 2021, well inside the Libor cessation deadline of December 31 2021.

Investor meetings in London were scheduled for Thursday and Friday last week and US meetings are available this Tuesday and Wednesday.

Lloyds is sole arranger and lead manager.

FINDOMESTIC ANNOUNCES FULL-TRANCHE ITALIAN AUTO ABS

FINDOMESTIC, which is owned by BNP Paribas

auto loan securitisation last week.BNP Paribas is arranger and sole lead for

AUTOFLORENCE 1, which will test demand for a full capital stack offering to investors.

The announcement noted that the deal would be subject to it achieving “appropriate balance sheet optimisation

Investor meetings across the UK and the rest of Europe started last week and continue this week.

BAML cuts Europe supply forecast by 15%

EMEA ABS Placed issuance for 2019 now expected at €90bn

European securitisation volumes in 2019 will

be 15% lower than expected at the start of the

year, according to Bank of America Merrill Lynch

research analysts, who cut their forecasts to

€90bn placed supply this year.

“Supply YTD is lagging 2018 YTD by around

30% and we find it hard to believe that catch-up

is possible, unless pricy,” BAML said in a research

note last week.

At the start of the year, BAML had predicted

€105bn of placed issuance, little changed from

the €108bn recorded in 2018.

Some €40.8bn has been placed so far this

year, BAML said, and some of that supply,

particularly from the UK, may have been

frontloaded because of Brexit worries. Those

same worries will undermine supply of UK

corporate securitisations, BAML said.

After a protracted wait at the start of the year,

the new simple, transparent and standardised

regime is up and running, but it is too early

to judge whether it is facilitating EU market

recovery and growth.

“Even if it does, it will not be a 2019 event,”

BAML said.

And BAML expects a deepening bifurcation

between euro and sterling sectors.

“UK strong supply flow in the near term is

likely to put pressure on deal pricing and make

investors more selective which deals to consider

for investments.”

On the other hand, a delayed eurozone

pipeline will find pent-up demand there, keeping

a lid on spreads.

“Potential ECB participation and more negative-

yielding bonds in the eurozone will make euro

structured finance bonds attractive to investors and

attract demand - limitations to the ECB tools will

limit the upside of their application,” BAML said.

Chris Moore


WIZINK ANNOUNCES SPANISH CARDS ABS

WIZINK BANK has joined the eurozone consumer ABS pipeline with a new series off its Spanish credit card ABS vehicle WIZINK

MASTER CREDIT CARDS.

AA+/AAH (Fitch/DBRS) with a 2.84-year average life. Leads NatWest and Societe Generale ran a three-day roadshow last week, and are due to price the deal this week.

STRONG BOOK FOR DEUTSCHE SPARKASSEN LEASING DEBUT

DEUTSCHE SPARKASSEN LEASING

securitisation last week, coming twice covered after pulling in investors hungry for rare exposure to the German SME sector.

The deal was also a welcome opportunity to diversify away from the pure auto deals that dominate the German ABS market.

“German SMEs are always appealing but

very low historical defaults, good recovery rates

bid for euro-denominated paper from deals structured to meet simple, transparent and standardised regulations.

LIMES 2019-1, which securitises a static portfolio

year Triple A tranche. The notes were priced at a discount margin of 32bp over one-month

guidance of 35bp area (+/–2bp). The guidance message did not include the “will

LBBW and Societe Generale to take it 3bp

“It didn’t say it would price in range, but if you say plus or minus two, it should be

investor said.However, he acknowledged the leads were

working with a very oversubscribed book.

A banker involved in the deal said the book kept growing after guidance and pointed out that there would always be an element of price discovery for a new issuer in a rare asset class.

unrated Class B, which is retained.The portfolio contains 19,963 contracts to

15,605 lessees, with an average balance per

59.66% and leasing contracts 40.34%. Weighted average seasoning is 16.97 months and the discount rate is 4%.

EMEA CLO

CIFC PRICES DEBUT EUROPEAN CLO

CIFC paid a modest premium to more established issuers last week when it priced its debut European leveraged loan CLO.

CIFC EUROPEAN FUNDING CLO I

senior tranche at 114bp over Euribor, not far from the 111bp or 112bp expected from regular programmes.

Class Y bolted on which will receive part of the deal’s 25bp subordinated management fee.

Deutsche Bank was arranger.

US MBS

INVESTOR PROPERTY RMBS POISED FOR GROWTH

Analysts at Wells Fargo see value in the growing market for RMBS backed by investor property loans, one of several growing corners of the resurgent private label RMBS market.

Nine deals backed by investor property loans have been sold in the private label market this year, according to Bank of America Merrill Lynch.

June 28 saw the latest such deal hit the market, FWD 2019-INV1

backed by 100% investor properties.

The senior A1 tranche, rated Triple A, priced at 100bp over swaps.

in mid-2018 and the asset class has expanded since then as private lenders become more active in a sector usually dominated by pristine borrowers with large mortgages.

“We expect the investor 2.0 market to continue to grow in the coming years, as

analyst Vipul Jain in a report on July 1.The government sponsored enterprises

(GSEs) could potentially also shift away from non-owner-occupied housing, he said, and this could increase the opportunity available for private lenders in the sector.

“We believe as 2.0 investors get more comfortable with the product, it should provide an alternative investment with the potential to provide greater call protection

They offer a slight pick-up to bonds backed by owner-occupied homes, one securitised products investor said.

“They tend to price a little wider than

“Most people think that if it’s a primary house, a borrower will do what they can to afford the mortgage payment, but an investor may be more likely to jettison that

The trade-off is that investors loans have lower leverage and better credit metrics, he added.

The asset class is part of an expanding private label non-agency RMBS market, which BAML said had now grown to the point where the number of outstanding bonds was starting to increase.

This follows years of declining volumes in the private label RMBS market as the huge number of bonds sold in the pre-crisis boom steadily matured and few issuers came to the market with new deals.

“Overall, there exist conditions for further growth in outstanding as we continue to see

SECURITISATIONS – ALL EUROPEAN RMBSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Citigroup 9 3,458.55 30.6

2 Lloyds Bank 8 1,595.23 14.1

3 BAML 5 948.02 8.4

4 BNP Paribas 5 901.25 8.0


6 HSBC 4 707.52 6.3

7 ABN AMRO Bank 2 510.14 4.5

8 Barclays 2 488.57 4.3

9 SG 1 415.53 3.7

10 NAB 3 342.74 3.0

Total 22 11,307.00

Including Euro, foreign, global and domestics, excluding CDOs.

Source: Refinitiv SDC code: B10a

GLOBAL SECURITISATIONS IN STERLINGBOOKRUNNERS: 1/1/2019–30/6/2019


1 Citigroup 9 2,851.11 33.1

2 Lloyds Bank 7 1,198.63 13.9

3 BAML 7 987.44 11.5

4 HSBC 6 734.19 8.5

5 BNP Paribas 6 655.32 7.6

6 NAB 3 299.19 3.5


8 Natixis 2 257.83 3.0

9 Santander 1 200.00 2.3

10 Barclays 1 187.50 2.2

Total 21 8,615.38

Including Euro, foreign, global and domestics, excluding CDOs.

Source: Refinitiv SDC code: B16i

EUROPEAN CLOsBOOKRUNNERS: 1/1/2019–30/6/2019


1 Citigroup 8 3,415.69 25

2 Barclays 4 1,736.65 12

3 BAML 4 1,600.15 12

4 Morgan Stanley 3 1,269.90 9

5 BNP Paribas 3 1,268.43 9

6 Goldman Sachs 3 1,230.20 9

7 Deutsche Bank 3 1,103.60 8

8 Credit Suisse 2 933.95 7

9 JP Morgan 1 431.40 3

10 Natixis 1 408.50 3

Total 33 13,911.47

Including Leveraged Loans CLOs

Source: Refinitiv


STRUCTURED FINANCE

new issuers coming to market as well as previous new issuers return to the market

ASIA-PACIFIC ABS

METRO TAPS ABS SCARCITY DEMAND

Consumer lender METRO FINANCE achieved good traction for its second public auto and equipment prime ABS offering, METRO 2019-1, which was upsized to A$400m (US$281m) from an indicative A$300m while most tranches were priced inside initial guidance.

The transaction enjoyed some scarcity value as just the second auto ABS issue of the year in Australia following Macquarie Leasing’s A$1.1765bn funding-only trade in March, SMART ABS Series 2019-1 Trust, which, unlike Metro, only sold Triple A rated senior notes.

There has been one other non-RMBS securitisation in 2019, FlexiGroup’s Flexi ABS Trust 2019-1, which was backed by consumer receivables.

“Investors are keen to diversify away from mortgage-backed issues, which dominate

mezzanine tranches, which were not

The order book reached US$800m from

in Metro ABS and three from overseas.Domestic accounts were allotted 82% and

offshore 18%, while real money investors bought 90% and bank balance sheets 10%.

The subordinated tranches were particularly well bid, with the Class D and Class E Notes 4.7 times and 4.8 times subscribed, respectively.

The A$120m of Class AS notes with a 0.7-year weighted-average life were priced last

month BBSW plus 85bp–90bp area guidance, which was revised from initial 90bp area price thoughts.

The A$202m of Class AL notes with a 2.6-year WAL were priced inside 130bp area

130bp area guidance.The Metro 2019-1 A$30m Class B, A$14m

Class C, A$8m Class D, A$12m Class E and A$4.4m Class F notes, all with 2.8-year WALs, were priced below initial 225bp area, 270bp area, low 300bp area, mid-500bp area and 700bp area guidance at one month BBSW plus 215bp, 260bp, 300bp, 540bp and 690bp, respectively.

The A$4.6m of Class GA and A$5m of Class GB notes were pre-placed.

Credit support for the Class A notes is 19.5%. For the Class B to GA notes respective support is 12%, 8.5%, 6.5%, 3.5%, 2.4% and 1.25%.

NAB was arranger, having also brought

the A$300m Metro 2018-2 auto ABS to market last November.

Metro Finance privately placed a A$288m six-tranche prime commercial auto and equipment ABS offering in June last year, the Metro Finance 2018-1 Trust.

Metro Finance was established in 2011 as a commercial auto and equipment lender. It targets prime borrowers for small-ticket auto and equipment assets in low volatility industries.

PEPPER PLACES AUTO ABS

Consumer lender PEPPER GROUP

auto securitisation last Wednesday, the A$511.6m (US$353m) PEPPER SPARKZ TRUST

NO.1, which is backed by prime auto and equipment loans originated bt Pepper Asset Finance.

The privately placed Reg S master trust offering attracted good demand from Australian, Asian and European fund managers, headed by a couple of key investors, according to a banker on the deal.

Merrill Lynch International was arranger and joint lead manager with MUFG, NAB, RBC Capital Markets and Westpac.

The A$375m Class A1-a and A$11.6m Class A1-x notes, with respective weighted-average lives of 1.5 and 0.7 years, priced at one-month BBSW plus 118bp and 110bp.

The A$32.5m Class B, A$30m Class C, A$20m Class D, A$15m Class E and A$12.5m Class F notes, all with 2.2-year WALs priced 225bp, 275bp, 350bp, 525bp and 700bp wide of one-month BBSW, respectively.

Pricing was not disclosed for the A$15m Class G notes with a 3.0-year WAL.

Initial credit support for the Class A1-a note is 25%. For the Class B to F notes respective support is 18.5%, 12.5%, 8.5%, 5.5% and 3.0%.

FLEXIGROUP TO REFINANCE Q CARD ABS

FLEXIGROUP has mandated BNZ and Westpac New Zealand to

Q CARD TRUST ABS notes backed

receivables, ahead of the soft bullet maturity date on August 15.

Card Trust ABS notes maturing on February 15 with new NZ$89.5m (US$59m) Class A notes, NZ$37.5m Class B notes and NZ$26.25m Class C notes.

Q Card is a continuous issuer because,

credit-card balances are revolving in nature.Credit-card ABS are typically sold out of

master trusts, which purchase eligible receivables from the sellers on a revolving basis, and tend to have soft bullet maturities rather than weighted-average lives.

MTF PLANS FIFTH AUTO ABS

MOTOR TRADE FINANCE has mandated CBA and Westpac to arrange investor meetings in the week beginning July 22 for a potential New Zealand dollar auto ABS issue.

MTF has previously printed four auto-loan securitisations totalling NZ$740m (US$496m). The last of these was the NZ$220m MTF Sierra Trust 2017 trade in September 2017, via the same two lead managers.

ABSF TO PUBLISH PRINCIPLES

principles of the A$2bn (US$1.39bn) AUSTRALIAN BUSINESS SECURITISATION FUND by July 22, ahead of roundtable discussions in Sydney on July 23 and in Melbourne on July 25.

Last November, the government announced it would create the fund to help

enterprises on more competitive terms.

impact, transparency, good governance and reputational risk.

ALL INTL AUSTRALIAN DOLLAR BONDS BOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share bank or group issues A$(m) (%)

1 Nomura 32 3,940.26 18.7

2 TD Securities 35 3,454.65 16.4

3 Deutsche Bank 15 2,019.24 9.6

4 ANZ 11 1,805.39 8.6

5 Westpac 11 1,795.59 8.5

6 CBA 10 1,339.04 6.4

7 RBC 14 1,256.75 6.0

8 NAB 8 1,096.91 5.2

9 Mizuho 10 1,058.42 5.0

10 JP Morgan 6 917.07 4.4

Total 115 21,068.50



GLOBAL DIM SUM BONDSBOOKRUNNERS: 1/1/2019–30/6/2019

Managing No of Total Share bank or group issues Rmb(m) (%)

1 HSBC 57 15,312.78 42.2

2 Bank of Communications 4 4,670.78 12.9

3 Standard Chartered 15 4,488.56 12.4


5 Citigroup 3 863.64 2.4

6 DBS Group 3 843.69 2.3

7 KGI Finl Services Group 2 772.73 2.1

=7 China Construction Bank 2 772.73 2.1

=7 Bank of China 2 772.73 2.1

10 Citic 2 752.78 2.1

Total 80 36,262.14


Source: Refinitiv SDC code: AS24a


SSAR

US DOLLARS

Jul 3 2019 KfW US$4bn Aug 22 2022 1.75 99.949 MS+6 / T+6.9 1.767

EUROS

Jul 2 2019 Asfinag €600m Jul 9 2029 0.1 99.791 MS-4 / B+47.8 0.121

Jul 2 2019 Bpifrance €750m incr

(€1.25bn)

May 25 2026 0.625 104.836 OAT+28 -0.075

Jul 2 2019 KfW €1bn incr

(€5bn)

Sep 15 2025 0.25 103.772 MS-18 / B+28 -0.352

Jul 3 2019 Lower Saxony €1bn Jul 10 2026 0 101.511 MS-9 / B+39.3 -0.214

Jul 3 2019 Land Hessen €500m Jan 12 2022 0 101.41 - -

Jul 3 2019 Muni Fin Green €500m Sep 6 2029 0.05 99.97 MS-8 / B+43.8 0.053

STERLING

Jul 1 2019 KfW £300m incr

(£1.75bn)

Dec 15 2022 1 100.4 G+33 0.879

Jul 2 2019 EIB £400m incr

(£2.4bn)

Oct 31 2022 2.5 105.424 G+31 0.828

NON CORE

Jul 3 2019 Auckland Council Green NZ$150m Jul 10 2025 2.013 100 MS+55 2.013

Jul 5 2019 EIB NKr500m incr

(NKr7.5bn)

Jan 26 2024 1.5 99.727 - -

CORPORATES

US DOLLARS

Jul 2 2019 Sumitomo US$500m Jul 9 2024 2.6 99.777 T+87.5 2.648

EUROS

Jul 1 2019 ArcelorMittal €250m incr

(€1bn)

Jan 17 2024 2.25 105.591 MS+125 / B+196.1 0.984

Jul 1 2019 Merck €600m Dec 15 2023 0.005 100.209 MS+25 / B+68 -0.042

Jul 1 2019 Merck €600m Jul 5 2027 0.375 99.49 MS+45 / B+96.5 0.44

Jul 1 2019 Merck €800m Jul 5 2031 0.875 99.706 MS+60 / B+125.7 0.901

Jul 2 2019 Aroundtown €800m Jul 9 2025 0.625 98.039 MS+115 / B+162.1 0.963

Jul 2 2019 Aroundtown €600m Jul 9 2028 1.45 98.422 MS+157 / B+209.4 1.64

Jul 2 2019 Deutsche Telekom $1.25bn Jul 5 2027 0.5 99.353 MS+60 / B+111.7 0.583

Jul 2 2019 Deutsche Telekom €850m Jul 5 2034 1.375 98.716 MS+100 / B+183.9 1.471

Jul 3 2019 Abertis €700m Jul 15 2025 0.625 99.415 MS+93 / B+138.1 0.725

Jul 3 2019 Abertis €600m Jul 15 2029 1.625 99.407 MS+158 / B+207.3 1.69

Jul 4 2019 Ferrovie £700m Jul 9 2026 1.125 99.967 MS+128 / B+174.4 1.13

Jul 4 2019 Schneider Electric €200m incr

(€1bn)

Sep 9 2024 0.25 101.516 MS+23 / B+64.8 -0.043

STERLING

Jul 3 2019 BMW £350m Jul 11 2022 1.25 99.836 G+85 1.302

Jul 3 2019 M&S £250m Jul 10 2027 3.25 99.458 G+270 3.301

SWISS FRANCS

Jul 1 2019 BKW Green SFr200m Jul 29 2027 0.25 100.337 MS+60 / Eidg+90 0.207

Jul 3 2019 PSP SFr75m incr

(SFr300m)

Feb 16 2024 0.5 102.842 MS+59bp /

Eidg+81

-0.121

NON CORE

Jul 2 2019 Atrium Ljungberg SKr400m Jul 7 2023 3mS+70 100 3mS+70 -

Jul 3 2019 Samhällsbyggnadsbolaget

i Norden

SKr700m Jul 5 2021 3mS+93 100 3mS+93 -

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 5/7/2019

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


BONDS SUMMARY DETAILS

MS+7 area(I/G) 0 >US$5.4bn, >90acs Aaa/AAA/Scope

AAA

Barc/MS/RBC Eur 39%, Amers 32%, Asia 28%, Other

1%. CB/OI 50%, Bks 43%, AM 5%, Other

2%.

MS-1 area,

MS-3 (+/-1)

0 >€3.25bn Aa1/AA+ CA-CIB/GS/JPM/Uni -

OAT+29 area 0 >€1.25bn Aa2/-/AA Barc/BNPP/GS/Nomura Fr 44%, Other 56%. Bks 59%, AM 23%,

CB 11%, Other 7%.

MS-18 area 0 Aaa/AAA/Scope

AAA

BAML/Citi/SG -

MS-7 area,

MS-8 (+/-1)

0 >€1.7bn -/-/AAA DB/JPM/LBBW/NordLB/TD -

- - - -/AA+ Uni -

MS-5 area,

MS-7 area

0 >€2bn Aa1/AA+ CA-CIB/HSBC/Nordea/Rabo -

G+33 area - >£380m Aaa/AAA/Scope

AAA

BAML/Citi -

G+31 area - - Aaa/AAA/AAA BAML/Citi/RBC -

MS+55-59 - - Aa2/AA ANZ/BNZ -

- - - Aaa/AAA/AAA DNB -

T+110 area,

T+90 (+/-2.5)

- US$2.25bn Baa1/-/A- GS/Citi/BAML Asia 82%, EMEA 18%. AM 51%, Bank

27%, Ins 14%, Corp 6%, PB/Other 2%.

MS+145 area,

MS+125/130

- >€1.1bn Baa3/BBB-/BBB- BNPP/CA-CIB -

MS+50 area,

MS+25/30

- >€1.5bn Baa1/A/Scope A- CMZ/GS/JPM/SG/Uni Fr 27%, Ger/Aus 23%, UK/Ire 18%,

Benelux 13%, Nordics 9%, S.Eur 8%,

Other 2%. AM 75%, Bks/PB 13%, OI 8%,

Ins/PF 3%, Corp 1%.

MS+75 area,

MS+50 area

- >€2.3bn Baa1/A/Scope A- CMZ/GS/JPM/SG/Uni Ger/Aus 36%, UK/Ire 28%, Fr 11%,

Benelux 9%, Nordics 6%, S.Eur 5%,

Other 5%. AM 68%, Bks/PB 10%, OI 8%,

Ins/PF 7%, Corp 7%.

MS+90 area,

MS+65 area

- >€2.3bn Baa1/A/Scope A- CMZ/GS/JPM/SG/Uni Ger/Aus 35%, Fr 22%, UK/Ire 22%,

Nordics 8%, Benelux 7%, S.Eur 3%,

Other 3%. AM 75%, Bks/PB 10%, OI 9%,

Ins/PF 6%.

MS+135/140,

MS+115/120

- ~€2.25bn -/BBB+ Citi/DB/HSBC/JPM/Santan -

MS+180/185,

MS+160/165

- ~€1.9bn -/BBB+ Citi/DB/HSBC/JPM/Santan -

MS+80/85,

MS+60/65

- >€4bn combined Baa1/BBB+/BBB+ Barc/BNPP/Santan -

MS+115/120,

MS+100/105

- >€4bn combined Baa1/BBB+/BBB+ Barc/BNPP/Santan -

MS+120 area,

MS+100 area

- >€7bn combined -/BBB/BBB Bankia/Barc/CA-CIB/CMZ/HSBC/

Medio/NatWest/SG/SMBCNikko

-

MS+185 area,

MS+165 area

- >€7bn combined -/BBB/BBB Bankia/Barc/CA-CIB/CMZ/HSBC/

Medio/NatWest/SG/SMBCNikko

-

MS+140/145,

MS+130 (+/-2)

2 >€2.4bn -/BBB/BBB BcaIMI/BNPP/CA-CIB/Citi/Uni -

MS+40/45,

MS+25/30

- ~€700m -/A- HSBC/SG -

G+100 area,

G+85/90

- >£675m A1/A+ JPM/Lloyds -

G+300/310,

G+270/275

- >£2.05bn Baa3/BBB- BoC/Lloyds/MUFG/NatWest/SMBC

Nikko

-

MS+63/73,

MS+60/63

-2 SFr870m, >80acs CS/fedafin/ZKB/

Von A, UBS A-

BNPP/UBS Switz 100%. AM 53%, Ins 29%, PB 9%,

PF 8.5%, Tsy 1%.

- - SFr75m, 14acs -/-/A- UBS Switz 100%. AM 71%, Tsy 17%, Ins 7%,

Bks/PB 4%, PF 1%,

- - - Baa2 HCM -

- - - - SEB -

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution


GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 5/7/2019 (CONTINUED)


Jul 4 2019 GPT A$200m Jan 12 2026 2.525 100 ASW+130 2.525

Jul 5 2019 Willhem Fastighets SKr250m Sep 12 2024 3mS+73 100.01 3mS+73 -

FINANCIALS

US DOLLARS

Jul 2 2019 Commerzbank AT1 US$1bn Perpetual (Apr 2025) 7 100 T+522.8 7.009

EUROS

Jul 1 2019 Bank of Ireland Group €600m Jul 8 2024 (Jul 2023) 0.75 99.663 MS+115 / B+157.5 0.836

Jul 1 2019 BFCM €1bn Feb 5 2024 0.125 99.89 MS+43 / B+83.5 0.149

Jul 1 2019 NIBC €500m Jul 8 2025 0.875 99.738 MS+110 / B+157.3 0.92

Jul 2 2019 Bankia €750m Jul 9 2026 0.75 99.796 MS+88 / B+137.6 0.78

Jul 4 2019 Banca MPS €500m Jul 10 2022 4 100 MS+439 / B+478 4

Jul 4 2019 La Banque Postale €750m Jul 12 2026 0.25 99.765 MS+43 / B+90.1 0.284

Jul 4 2019 UBI Banca €300m Jul 12 2029 (Jul 2024) 4.375 99.613 MS+475 / B+515.9 4.463

STERLING

Jul 4 2019 Lloyds £500m Jul 11 2024 1.75 99.81 G+132 1.79

Jul 4 2019 Prudential £300m Jul 20 2049 (Jul 2024) 3.875 99.525 G+350 3.98

YEN

Jul 4 2019 Santander Consumer

Finance

¥31.5bn Jul 15 2022 0.325 100 OS+40 0.325

Jul 4 2019 Santander Consumer

Finance

¥18.5bn Jul 16 2024 0.482 100 OS+55 0.482

SWISS FRANCS

Jul 4 2019 Cembra Money Bank AT1 SFr150m Perpetual (Nov 2024) 2.5 100 MS+316.3 2.5

NON CORE

Jul 2 2019 Rabobank Australia A$150m incr

(A$650m)

Mar 3 2022 3mBBSW+108 101.22 3mBBSW+62 -

Jul 3 2019 Toronto-Dominion Bank A$700m Jul 10 2024 100 3mBBSW+100 -

Jul 3 2019 Toronto-Dominion Bank A$550m Jul 20 2024 2.05 99.776 ASW+100 2.098

Jul 3 2019 BNP Paribas A$300m Perpetual (Jan 10 2026) 4.5 100 4.5

Jul 4 2019 ME Bank A$400m Jul 18 2022 3mBBSW+98 100 3mBBSW+98 -

Jul 1 2019 Surnadal Sparebank T2 NKr100m Jul 1 2029 (Jul 2024) 3mN+205 100 3mN+205 -

Jul 1 2019 LeasePlan SKr500m Jul 5 2022 3mS+80 - - -

COVERED BONDS

EUROS

Jul 1 2019 Deutsche Hypo €250m incr

(€750m)

Jun 20 2025 0.375 103.183 MS flat / B+46.7 -0.157

Jul 3 2019 CIBC €1bn Jul 9 2027 0.04 99.992 MS+9 / B+58.6 0.041

Jul 3 2019 Santander €1.5bn Jul 10 2029 0.25 99.872 MS+15 / B+64.8 0.263

Jul 5 2019 Credit Mutuel Arkea €500m Jul 12 2029 0.125 99.544 MS+6 / B+53 0.171

SWISS FRANCS

Jul 3 2019 Valiant Bank SFr400m Jul 31 2029 0 100 MS+27.75 /

Eidg+66

0

HIGH YIELD

US DOLLARS

Jul 1 2019 CSC Holdings LLC US$1bn Jan 15 2030 (Jan 2025) 5.75 100 T+371 5.75

Jul 2 2019 Alpha Auto Group US$244m Jul 15 2024 9.75 93 T+989 11.638


BONDS SUMMARY DETAILS


ASW+140 area - - -/A- ANZ/CBA -

- - - -/A- HCM -

7.5%/7.75%,

7.125% (+/-0.125% ),

7% cpn

0 >US$10.5bn, >430acs Ba2/BB Barc/CMZ/HSBC/JPM/UBS UK/Ire 49%, Asia 25%, Switz 9%, Ger

4%, Fr 4%, RoEur 5%, US OS/Can 3%,

Other 1%. AM 54%, Bks/PB 19%, HF

18%, Ins/PF 8%, Other 1%.

MS+145 area,

MS+125 area,

- >€3.5bn Baa3/BBB- Barc/BNPP/JPM/NatWest/Uni -

MS+high 50s,

MS+45 (+/-2)

3 >€1.45bn Aa3/A/A+ CIC/GS/NatWest/SG -

MS+140 area,

MS+120 area

0 >€2.2bn -/BBB+/BBB+ CS/GS/JPM/NIBC/UBS Fr 23%, S.Eur 22%, Ger/Aus 22%,

Nordics 10%, Benelux 10%, UK 7%, Switz

5%, Other 1%. AM 47%, Bks/PB 25%,

CB/OI 14%, Ins/PF 12%, Other 2%.

MS+110 area,

MS+90/95

-2 >€2bn -/BBB/BBB/BBBH Bankia/BBVA/Citi/CS/NatWest Iberia 34%, Fr 19%, Ger/Aus 16%, UK/Ire

15%, It 6%, Switz 4%, Benelux 3%, Other

3%. AM 56%, Bks/PB 21%, Ins/PF 18%,

OI 2%, Other 3%.

4.25%/4.375%,

4%

- - Caa1/-/B/BH MS -

MS+60 area,

MS+45 (+/-2)

2 >€1.65bn -/A/A- BNPP/CMZ/DB/MS/Nomura/UBS -

MS+510 area,

MS+495 area

10 ~€1.3bn Ba3/BB/BB+/BBH BcaIMI/GS/SG/UBI -

G+145 area,

G+135 area

- >£1bn A1/A/A Lloyds UK 72%, Eur 21%, APAC 7%. AM 64%,

CB/OI 17%, Ins/PF 14%, Bks/PB 5%.

G+410 area,

G+375 area

- >£4.8bn A3/BBB/BBB BAML/GS/MS/SG UK 78%, Eur 15%, Asia 6%, Other 1%.

AM 82%, Ins/PF 7%, Bks/PB 5%, CB/OI/

Other 5%, HF 1%.

OS+35/40,

OS+38/40

- - A2/A-/A- Daiwa/Miz/SMBC Nikko -

OS+50/55,

OS+53/55

- - A2/A-/A- Daiwa/Miz/SMBC Nikko -

2.75%/3%,

2.5%/2.75%,

2.5%

- ~SFr300m, >80acs -/BB CS/ZKB Switz 100%. PB 72.5%, AM 17%, PF

6.5%, Ins 2%, Corp 2%.

- - - Aa3/A+/AA- ANZ -

3mBBSW+105 area - - Aa3/A ANZ/CBA/DBS/NAB/SCG/TD/WBC -

ASW+105 area - - Aa3/A ANZ/CBA/DBS/NAB/SCG/TD/WBC -

5.25% area, 5.0%

area, 4.5%-4.615%

- >A$2.3bn Ba1/BBB-/BBB- BNPP/Nomura/WBC/ANZ/CBA/

NAB/TD

-

3mBBSW+105 area - - Baa1/BBB ANZ/BBB -

3mN+200/205 - - - DNB -

- - - Baa1 Danske -

MS+1 area - >€275m Aa1 DB/DZ/HSBC/NordLB/Uni -

MS+13 area,

MS+10 (+/-1)

- >€1.8bn Aaa/-/AAA ABN/BNPP/CIBC/DZ/HSBC Ger/Aus 49%, Benelux 16%, Fr 16%, UK/

Ire 8%, Nordic 8%, Switz 2%, Other 1%.

Bks 55%, AM 25%, CB/OI 14%, Ins/PF

4%, Other 2%.

MS+20 area,

MS+16 (+/-1)

- >€3.7bn Aa1/-/AA BcaIMI/DB/NatWest/Nomura/

Santan

Ger 42%, Nordics 12%, Fr 10%, UK/Ire

10%, It 6%, Iberia 5%, Asia 4%, Benelux

3%, Switz 3%, Aus 2%, ME 2%, Other

1%. AM 44%, Bks/PB 35%, OI 18%, Ins/

PF 3%.

MS+11 area,

MS+7 (+/-1)

- >€2bn Aaa/-/AAA CA-CIB/CMArkea/LBBW/Nyk/Santan -

0%/0.05%,

0%

0 SFr600m, 42acs Aaa BNPP/ZKB Switz 100%. AM 56.5%, Ins 28.5%, PB

13%, PF 2%.

5.75%/5.875%,

5.75%

- - B3/B CITI/Barc/BNPP/CA-CIB/CS/DB/GS/

MS/Scotia/TDS/WFS

-

9.75% area cpn - - B3/B- JPM -


GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (5/7/2019)

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/

outlook

** Taken off negative watch/

outlook

Improvement in ratings,

outlook or watch status

Deterioration in ratings,

outlook or watch status

Moody’s S&P Fitch Sovereign 1 2 3 4 5 6

Moody’s S&P Fitch Sovereign 1 2 3 4 5 6

Abu Dhabi Aa2 AA AA+ AA AA+

Albania B1 Ba2 B+ BB

Andorra W BBB AAA BBB p A–

Angola B3 B1 B– n B– B B

Argentina B2 B1 B B+ B n B

Armenia B1 p Ba2 B+ p BB–

Aruba BBB+ BBB+ BBB– n BBB

Australia Aaa Aaa AAA AAA AAA

Austria Aa1 Aaa AA+ AAA AA+ p AAA

Azerbaijan Ba2 Ba2 BB+ BB+ BB+ BB+

Bahamas Baa3 n Baa1 BB+ BB–

Bahrain B2 Ba3 B+ BB– BB– BBB–

Bangladesh Ba3 Ba2 BB– BB– BB– BB

Barbados Caa1 Caa2 SD B-

Belarus B3 B3 B B B B

Belgium Aa3 Aaa AA AAA AA– AAA

Belize B3 B1 B– B–

Bermuda A2 Aa3 A+ p AA+

Bolivia Ba3 Ba2 BB– BB– BB– BB–

Bosnia Herzegovina B3 B3 B BB–

Botswana A2 Aa3 A– A+

Brazil Ba2 Ba1 BB– BB+ BB – BB

Bulgaria Baa2 A3 BBB– A– BBB A–

Cambodia B2 B1

Cameroon B2 Ba2 B n BBB– B BB+

Canada Aaa Aaa AAA AAA AAA AAA

Cape Verde B BB– B B+

Cayman Islands Aa3 Aa2

Chile A1 Aa1 A+ AA A AA

China A1 Aa3 A+ A+ A+ A+

Colombia Baa2 A3 BBB– BBB+ BBB n BBB+

Congo (DR) B3 n B3 B- BBB-

Congo (Rep) Caa2 n B2 CCC+ BBB– CCC BB-

Cook Islands B+ AAA

Costa Rica B1n Ba2 B+n BB B+n BB–

Cote d’Ivoire Ba3 Baa3 B+ BBB–

Croatia Ba2 p Ba3 BBB BBB+ BBB- BBB+

Cuba Caa2 Caa2

Curacao BBB+ BBB+

Cyprus Ba3 p A3 BBB- AAA BBB – A

Czech Rep A1 Aa2 AA– AA+ AA- AAA

Denmark Aaa Aaa AAA AAA AAA AAA

Dominican Rep Ba3 Ba1 BB– BB+ BB– BB–

Ecuador B3 n B2 B– B– B –n B –

Egypt B2 B1 B B B+ B+

El Salvador B3 B1 CCC+ AAA B– B

Estonia A1 Aaa AA– AAA A+ p AAA

Ethiopia B1 B1 B B B B

Fiji Ba3 Ba3 B+ B+

Finland Aa1 Aaa AA+ AAA AA+ p AAA

France Aa2 p Aaa AA AAA AA AAA

Gabon B3 n Ba3 B BB+

Georgia Ba2 Baa3 BB– BB+ BB BBB–

Germany Aaa Aaa AAA AAA AAA AAA

Ghana B3 B1 B B+ B B

Greece B3 p Ba2 B+ p AAA BB- BBB-

Guatemala Ba1 Baa3 BB– BB+ BB BB+

Honduras B1 Ba2 BB– BB

Hong Kong Aa2 Aaa AA+ AAA AA+ AAA

Hungary Baa3 Baa1 BBB A– BBB A

Iceland A3 A3 A A A A+

India Baa2 Baa1 BBB– BBB+ BBB– BBB–

Indonesia Baa2 A3 BBB BBB BBB BBB

Iraq Caa1 B3 B– B– B– B–

Ireland A2 Aaa A+ AAA A+ AAA

Israel A1 Aa3 AA- AA+ A+ AA

Italy Baa3 Aa3 BBB n AAA BBB n AA

Jamaica B3 Ba3 B p B+ B+ BB-

Japan A1 Aaa A+ p AA+ A AA

Jordan B1 Ba1 B+ BB

Kazakhstan Baa3 Baa2 BBB– BBB– BBB BBB+

Kenya B2 Ba3 B+ BB– B+ BB–

Kuwait Aa2 Aa2 AA AA+ AA AA+

Kyrgyzstan B2 Ba3

Latvia A3 Aaa A AAA A– AAA

Lebanon Caa1 B2 B– n B+ B– B–

Lesotho B+ BB+

Liechtenstein Aaa AAA AAA

Lithuania A3 Aaa A AAA A– p AAA

Luxembourg Aaa Aaa AAA AAA AAA AAA

Macau Aa3 Aa2 AA AAA

Macedonia (FYR) BB– BB BB p BB+

Malaysia A3 A1 A– A+ A– A

Maldives B2 Ba3 B+ BB–

Malta A3 p Aaa A– p AAA A+ AAA

Mauritius Baa1 A2

Mexico A3 n A1 BBB+ n A+ BBB A–

Moldova B3 B2

Mongolia B3 B1 B B+ B B+

Montenegro B1 Ba1 B+ AAA

Montserrat BBB– BBB–

Morocco Ba1 Baa2 BBB– n BBB+ BBB– BBB

Mozambique Caa3 n Caa2 SD CCC RD B–

Namibia Ba1 n Baa2 BB+ BBB–

Netherlands Aaa Aaa AAA AAA AAA AAA

New Zealand Aaa Aaa AA p AAA AA AAA

Nicaragua B2n B1 B-n B- B- n B-

Nigeria B2 B1 B B B+ B+

Norway Aaa Aaa AAA AAA AAA AAA

Oman Baa3 n Baa2 BB n BB+ BB+ BBB-

Pakistan B3 n B2 B– B– B– B–

Panama Baa2 p A3 BBB+ AAA BBB A

Papua New Guinea B2 n B1 B BB–

Paraguay Ba1 Baa3 BB BB+ BB+ BB+

Peru A3 A1 BBB+ A BBB+ A–

Philippines Baa2 A3 BBB+ A- BBB BBB+

Poland A2 Aa3 BBB+ A A– AA–

Portugal Ba1 p A1 BBB AAA BBB AA

Qatar Aa3 n Aa3 AA– AA AA– AA

Ras al–Khaimah A AA+ A AA+

Romania Baa3 A3 BBB– A– BBB– BBB+

Russia Baa3 Baa2 BBB- BBB BBB– p BBB–

Rwanda B2 B1 B p B B+ B+

St Vincent & Gren B3 Ba3

San Marino BBB– BBB+

Saudi Arabia A1 A1 A– A A+ AA

Senegal Ba3 Baa1 B+ p BBB–

Serbia Ba3 Ba1 BB p BB+ BB BB+

Seychelles BB– BB

Singapore Aaa Aaa AAA AAA AAA AAA

Slovakia A2 p Aaa A+ AAA A+ AAA

Slovenia Baa1 p Aa1 AA– AAA A– AAA

Solomon Islands B3 B2

South Africa Baa3 A3 BB BBB– BB+ BBB–

South Korea Aa2 Aa1 AA AAA AA– AA+

Spain Baa1 Aa1 A– p AAA A– AAA

Sri Lanka B2 Ba2 B B B B

Suriname B2 Ba3 B B+ B–

Sweden Aaa Aaa AAA AAA AAA AAA

Switzerland Aaa Aaa AAA AAA AAA AAA

Tanzania B1n Ba3

Taiwan Aa3 Aa2 AA– AA+ AA–

Thailand Baa1 A2 BBB+ A BBB+ A–

Trinidad & Tobago Ba1 Baa3 BBB+ n A

Tunisia B2 n Ba2 B+ BB–

Turkey B1n B3 B+ BB- BBn BB+

Turks & Caicos BBB+ AAA

Uganda B2 Ba3 B B B+ B+

Ukraine Caa1p B3 B– B– B– B–

UAE Aa2 Aa2

UK Aa2 Aaa AA n AAA AA n AAA

USA Aaa Aaa AA+ AAA AAA AAA

Uruguay Baa2 A2 BBB A– BBB– n BBB+

Venezuela C Ca SD CC RD CC

Vietnam Ba3 Ba2 BB BB BB p BB

Zambia B2 B1 B n B- CCC B –

India eyes offshore sovereign bond issue Finance minister hints at deal in budget speech

INDIA

international sovereign bond issue, according to comments from the country’s

Friday.

external markets in external currencies,” Finance Minister Nirmala Sitharaman said.

The country should look to raise funds in the offshore market because its external debt to GDP is the lowest globally at less than 5%. Offshore borrowing would also boost demand for government securities in the domestic market, she said.

domestic bond market.India’s 10-year government bond yield

An offshore sovereign bond issue from India has long been on the wish list of

search for yield.“The offshore sovereign bond issue will

which will be comforting for the onshore bond and currency market,” said Ajay Manglunia, managing director of JM Financial. He was formerly executive vice

“India’s 10-year bond yield would ease

an international sovereign bond, said a DCM banker.

It would also establish a benchmark for other Indian issuers. “On balance, some

limited sovereign bond issuance will be

establish a benchmark for other Indian

Ananth Narayan, an international banking

However, some advise caution on India’s

the global market at lower rates is high and it comes with risk. We have seen Latin American

stage,” said a trader from a foreign bank.“If the offshore sovereign bond issuance is

good move. It can bring India into a few global indices as well.”

.

Krishna Merchant

FRONT STORY CIS

Ukrainian Railways enters new era State-owned company prints 155bp back of the sovereign

UKRAINIAN RAILWAYS cleared a big hurdle for a

years on Monday, with the deal coming

began marketing.

had to restructure its debts in the wake of Russia’s invasion of Crimea - some were

One investor said while the roadshow was

A banker close to the deal said the

what leads thought was likely. He said that was largely down to a buoyant market that

meeting, as the threat of an imminent trade war receded.

the other being a three-year.

manage over the coming months, according

Ukrainian Railways also has ambitious

has a CCC+ rating on Creditwatch

B- by Fitch.While Ukrainian Railways has made

headway since restructuring its debts, there are still some big hurdles to overcome. Not least is a series of loans with a face value of

Prominvestbank, a Russian entity, but sold

Ukrainian Railways failed to make

PIB, which as a subsidiary of a Russian state entity fell under Ukrainian sanctions in

restructuring negotiations with Ukrainian Railways, according to the bond’s

though, there is no cross-default clause on the loans.

Dragon Capital and JP Morgan were the leads.Sudip Roy


EMERGING MARKETS China Hong Kong Indonesia South Korea Vietnam South Africa Tunisia Turkey

Bahrain Kuwait Argentina Brazil Colombia

ASIA-PACIFIC

CHINA

SHANDONG GUOHUI SWOOPS AT DAWN

SHANDONG GUOHUI INVESTMENT

three-year senior unsecured bond issue at

3am Hong Kong time, which is unusual for a Reg S issue. But two bankers on the deal said this was mainly due to “discussion of allocations” and insisted there was nothing unusual.

leads, one of the bankers on the deal acknowledged, although some foreign

Final statistics were not available at the time of writing but orders were said to be

demand from the leads, ahead of the release

time issuer ratings from Moody’s and Fitch

issues last year with tenors of less than one year in the international market, for which it did not need an issuance quota from the

offering, Shandong Guohui is likely to revisit the offshore bond market as it has a total US$1.5bn NDRC quota, according to a note from Nomura’s trading desk.

Nomura has suggested investors

Indirectly wholly owned subsidiary

the bonds with a guarantee from Shandong Guohui.

Central Wealth Securities Investment, Zhongtai International, Bank of China, China International Capital Corp and Standard Chartered Bank were global coordinators. They were also lead managers and bookrunners with BoCom

International, CMB Wing Lung Bank, China Minsheng Banking Corp Hong Kong branch, Industrial Bank Hong Kong branch, China Citic Bank International, China Everbright Bank Hong Kong branch, ABC International, Silk Road International, Haitong International, Huatai Financial Holdings (Hong Kong), Bank of East Asia and China Securities International.

has a strategic role in the reform and

TAHOE PAYS YEAR’S TOP YIELD

TAHOE GROUP

the year, in a US dollar deal that few investors seemed to have heard about.


Future Land faces uncertain prospects

CHINA Chairman’s detention prompts heavy sell-off, downgrade warnings

FUTURE LAND DEVELOPMENT HOLDINGS is facing

higher funding costs after the detention of

its founding chairman forced a change of

leadership.

In a stock exchange filing late on Wednesday,

Future Land said that its chairman Wang

Zhenhua was being held in criminal custody by

the Shanghai police for “personal reasons” and

has been removed from his position.

Wang Xiaosong, a non-executive director of

the company and the son of Wang Zhenhua,

has been appointed chairman of the board with

immediate effect.

S&P and Fitch on Friday placed the Hong

Kong-listed Chinese real estate company and its

outstanding senior unsecured notes on negative

watch, while Moody’s said the incident was credit

negative.

“In our view, the seriousness of the allegation

and sudden change in leadership could have

severe repercussions for Future Land’s reputation

and brand name. This could hurt the company’s

relationships with business partners and

financial institutions,” S&P said.

S&P has a BB issuer rating on Future Land

and BB– issuer rating on its bonds. Fitch has BB

ratings on the company and its bonds, as well

as Shanghai-listed unit SEAZEN HOLDINGS’ and its

offshore bonds. All are on negative watch.

Fitch warned that investor perception may

affect Future Land’s capital market or other

financing activities in the near term.

Future Land’s Hong Kong-listed shares

plunged 24% to close at HK$8.04 on Wednesday

and its US dollar bonds also dropped after

Chinese media reported that Wang Zhenhua had

been detained by the Shanghai police.

Future Land’s shares continued to slump on

Thursday and closed down 10.6% at HK$7.19.

The US dollar bonds of Future Land and

Seazen were down by 3 points at the short end

and 6-7 points at the long end on Wednesday.

They continued to trade weak on Thursday

morning but later drifted higher at the short end

while slipping a little further at the long end.

Future Land’s 7.5% 2021s priced in January

were quoted at 96.75–97.95 while its 6.15%

2023s, priced in April, were quoted at 90.375–

91.625 on Thursday afternoon, according to

Tradeweb. Seazen’s 6.75% 2022s priced in May

were quoted at 93.083–94.50.

S&P sees a potential risk involving shares

pledged by the former chairman if the group’s

share prices plummet for an extended period.

“That said, the company is unlikely to miss a

margin call, should it happen, given the current

liquidity position,” said the rating agency.

As of June 30, around 34% of Seazen’s

outstanding A-shares are pledged, out of the 67%

equity held by entities controlled by Future Land.

Research firm Lucror Analytics said the

development raised questions over the

company’s corporate governance and operations,

and to some extent its access to funding.

It changed its view on the company’s US dollar

bonds to “not recommended” from “hold”.

Wang Zhenhua is Future Land’s controlling

shareholder with a 71% stake.

Nomura’s trading desk said change of control

put options for the two companies’ onshore and

offshore bonds should not be triggered for now.

However, it said that there was still a lot of

uncertainty as to how the situation would evolve

and how long this would drag on.

“If we assume that he [Wang Xiaosong] will be

the new chairman going forward, there may be

doubts among banks, equity and bond investors

if he, at the age of 32, could lead such a sizeable

company against the backdrop of an industry

downturn,” it wrote.

On the other hand, even if Wang Zhenhua

eventually resumes his position, it is also

uncertain whether the banks and investors will

provide the same level of support to the group as

before, it said.

Carol Chan

This was the highest yield for an Asian US dollar bond offering this year, according to

Haitong was sole bookrunner for the Tahoe deal. Wholly owned subsidiary Tahoe

and CCC+ by Fitch, both one notch below

highest among the home-builders it rates. The rating agency said that Tahoe had

Tahoe’s rating to stable from negative, citing

including selling assets and scaling back land acquisitions.

downgrading both by a notch and warning that Tahoe’s reliance on debt funding was “unsustainable”.

GUANGZHOU STATE FIRM READIES DEBUT

GUANGZHOU DEVELOPMENT DISTRICT FINANCIAL

HOLDINGS GROUP

offering of US dollar senior unsecured bonds.

Guotai Junan International, Bank of China and CMB Wing Lung Bank are joint global coordinators on the Reg S issue. They are also joint bookrunners and joint lead managers with ABC International, Bank of Communications, Barclays, China Industrial Securities International, DBS Bank, Haitong International, Industrial Bank Hong Kong branch and OCBC Bank.

and investment vehicle started to meet investors in Hong Kong last week and will

week.

International Investment Holdings will be the issuer and GZDDFH is the guarantor.


EMERGING MARKETS ASIA-PACIFIC

BOC scales back offshore AT1 CHINA Chinese banks seek cheaper capital in onshore market

BANK OF CHINA, whose US$6.5bn Additional Tier

1 offering set a record for Chinese bank capital

issuance in 2014, will refinance less than half

of those securities in the offshore market later

this year as onshore funding has become more

attractive.

The Hong Kong and Shanghai-listed lender

said on July 2 it had received approval from

the China Banking and Insurance Regulatory

Commission to issue up to Rmb20bn

(US$2.9bn) of offshore preference shares. This

suggests that only some of the 6.75% preference

shares, which have a first call date this October,

will be refinanced in the international market.

The offshore quota is half what BOC had flagged

earlier. In January, the bank won shareholder

approval to issue up to Rmb120bn of preference

shares in the onshore and offshore markets, with up

to Rmb40bn to be raised offshore.

With onshore funding costs now far lower

than offshore, Chinese lenders are favouring the

onshore market for regulatory capital issuance.

China this year made it easier for banks to

issue AT1 capital in the onshore market, allowing

perpetual bonds for the first time and making

the securities eligible for repo transactions with

the central bank. Under previous rules, only

preference shares counted as AT1 capital, putting

the format off limits to unlisted banks.

BOC in late January issued the country’s

first onshore bank perpetual bonds, raising

Rmb40bn at 4.50%. China Minsheng Banking

Corp in May and Hua Xia Bank in June also

issued onshore perpetual note offerings of

Rmb40bn each, both at a yield of 4.85%.

The funding cost was much lower than what

the two banks would have paid offshore. For

example, Minsheng’s 4.95% offshore preference

shares issued in 2016 were trading at a yield of

6.1%–6.2% last week.

BOC was the first Chinese bank to issue

offshore AT1 bonds five years ago, and how it

deals with the call option is seen as a model for

others.

All subsequent Chinese bank offshore

AT1s are callable after five years and have

loss-absorption features that could see them

converted into equity in the worst-case scenario.

There was little bank capital issuance in

the offshore market in the first half, but that is

expected to increase towards the end of the year

as some banks either issue debut AT1 bonds or

refinance callable securities.

So far this year, China Construction Bank

has been the only PRC-incorporated bank to

sell Tier 2 bonds in the offshore market, with

a US$1.85bn 10-year non-call five issue in

February. Guangzhou Rural Commercial Bank

was the only one to issue offshore AT1s – a

tightly priced US$1.43bn debut at 5.90% in June.

BUOYANT OFFSHORE MARKET“Yield products like AT1s and corporate hybrids

are going to be in vogue in a world where

the 10-year US Treasury yield is around 2%,”

said Ed Tsui, head of Asia debt syndicate at

Deutsche Bank. “Most Chinese AT1s were sold

onshore earlier this year, but with the buoyant

offshore market I think discussions will be

refreshed.”

But for now, based on capital issuance plans

announced by Chinese banks, the onshore

market is likely to account for a large share of

the supply.

BOC has received approval from both the

CBIRC and the China Securities Regulatory

Commission to issue up to Rmb100bn of

onshore preference shares.

Moreover, it also plans to issue up to

Rmb40bn of perpetual capital bonds and up to

Rmb70bn of Tier 2 bonds onshore and offshore.

The onshore/offshore split was not specified.

INDUSTRIAL AND COMMERCIAL BANK OF CHINA’s

US$5.7bn-equivalent triple-currency offshore

AT1s will be callable this December, but it looks

like ICBC will only refinance some of them in the

international market.

ICBC last November won shareholder approval

to issue preference shares in both onshore and

offshore markets to raise up to Rmb100bn, with

no more than Rmb44bn to come offshore.

Earlier this year, ICBC received approval from

both the CBIRC and the CSRC to issue up to

Rmb70bn of onshore preference shares. So far

no approval has been received for its offshore

AT1 issuance plan.

In May, it received shareholder approval to

issue up to Rmb80bn of perpetual securities in

the onshore market.

Meanwhile, BANK OF COMMUNICATIONS and

CHINA CONSTRUCTION BANK have calls next year

on US$2.45bn and US$3.05bn of offshore AT1s,

respectively. Smaller joint stock commercial

banks, city commercial and rural commercial

banks have call dates on their offshore AT1s

mostly coming in late 2021 and in 2022.

CCB in June received shareholder approval to

issue up to Rmb40bn of onshore perpetuals and

up to Rmb80bn of Tier 2 bonds in the onshore

and offshore markets.

Carol Chan

management, technology investment,

services.

TIANJIN BINHAI PLANS THREE-YEAR

TIANJIN BINHAI NEW AREA CONSTRUCTION &

INVESTMENT GROUP

year US dollar senior bonds.Standard Chartered, Bank of China, CCB

International and HSBC are global coordinators on the Reg S issue.

They are also bookrunners and lead managers with BNP Paribas, China Citic Bank International, CMBC Capital, CMB Wing Lung Bank, Everbright Sun Hung Kai, Guotai Junan

International, Haitong International, Industrial Bank Hong Kong branch and Shanghai Pudong Development Bank Hong Kong branch.

Tianjin Binhai New Area Construction will meet investors in Hong Kong and

by Tianjin Binhai New Area Construction.

The guarantor is wholly owned by

investment management for major

infrastructure construction and

BLUESTAR HOLDS MEETINGS

CHINA NATIONAL BLUESTAR (GROUP)

offering.It has hired BNP Paribas, BOC International, Credit

Agricole and Morgan Stanley as global coordinators and, together with Industrial Bank, Hong Kong branch and Standard Chartered, bookrunners to arrange investor meetings in Hong Kong,

A Reg S offering of US dollar senior

Bluestar Finance Holdings will issue the

State-owned China National Chemical

manufacturer Bluestar, and Shandong International Trust owns the remainder.


Jul 1 2019 Rail Capital Markets (JSC

Ukrainian Railways )

US$500m Jul 9 2024 8.25 100 MS+645 / T+645 8.25

Jul 2 2019 Korea Development Bank

(Green)

€500m Jul 10 2024 0 99.905 MS+28 / B+70.7 0.019

Jul 2 2019 Yuzhou Properties US$400m incr

(US$650m)

Oct 25 2023 (Oct 25

2020)

6 93.872 - 7.7

Jul 2 2019 Shandong Guohui

Investment

US$800m Jul 9 2022 4.37 100 - 4.37

Jul 2 2019 Tsinghua Tongfang US$300m Jan 10 2022 6.8 99.548 - 7

Jul 2 2019 BBK US$500m Jul 9 2024 5.5 99.87 MS+375 5.53

Jul 2 2019 Burgan Bank AT1 US$500m Perpetual (2024) 5.749 100 T+400.7 5.75

Jul 2 2019 Saudi Arabia €1bn Jul 9 2027 0.75 99.753 MS+80 / B+131.4 0.782

Jul 2 2019 Saudi Arabia €2bn Jul 9 2039 2 99.316 MS+140 / B+200.8 2.042

Jul 2 2019 Turkey US$2.25bn Aug 10 2024 6.35 99.563 T+469.7 6.45

Jul 3 2019 Pingdingshan Tianan Coal US$100m Jul 9 2020 6.25 100 - 6.25

Jul 2 2019 Pampa Energia S.A. US$300m Apr 15 2029 9.125 98.449 T+50 9.375

Jul 4 2019 Guangzhou R&F Properties US$450m Jul 11 2024 (Jul 11 2022) 8.125 100 - 8.125

Jul 4 2019 Dafa Properties Group US$180m Jul 11 2021 12.875 98.095 - 14

Jul 4 2019 FWD Group US$550m Jul 9 2024 5.75 100 - 5.75

Jul 4 2019 BOC Aviation A$200m Jul 11 2029 3.15 99.679 MS+173 3.188

Jul 5 2019 Jiayuan International US$225m Mar 11 2022 (put 2021) 13.75 100 - 15

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 5/7/2019


HONG KONG

FWD BRINGS RARE SUB NOTES

Insurer FWD GROUP sold what is thought to be

bonds with a bullet maturity from an Asian

higher yield than it would have done for a senior unsecured bond, but bankers said it

announced. Private banks were said to have been the main drivers of the deal.

The notes are unrated, as is the issuing entity, so FWD did not need to sell subordinated bonds to defend a rating, but a

FWD had only issued subordinated

has only bank debt.“We use a mixture of debt, hybrid

The bonds also had other rarely seen

issuer.

Hong Kong tycoon Richard Li holds a

sovereign wealth fund GIC. If Li ceases to

control FWD, the issuer can redeem the bonds at 101% of face value or increase the

The issuer can also redeem the bonds at 101% of face value if it holds an IPO.

UBS and JP Morgan were bookrunners.Proceeds from the bond issue will be used

CHONG HING BANK PLANS AT1 ISSUE

CHONG HING BANK

BOC International, CCB International, Chong Hing Bank, HSBC and Yue Xiu Securities are global coordinators as well as lead managers and bookrunners with ABC International on the Reg S issue.


EMERGING MARKETS ASIA-PACIFIC

High 8%s - >US$2.5bn -/-/B- JLM/Dragon -

MS+45 area,

MS+30/35

- €2bn Aa2/AA/AA- Citi/CA-CIB/HSBC/StCh Benelux 24%, Fr 11%, UK 11%, Ger 10%,

Switz 10%, RoEMEA 24%, Asia 10%. CB/

OI 46%, AM/FM 37%, Bks 10%, Ins 6%,

PB/Other 1%.

8.2% area,

7.7%

- US$3.3bn B1/-/BB- BOCI /HSBC/JPM/Yuzhou/Barc/

Guotai Junan/Haitong

Asia 81%, Eur 18%, US O/S 1%. AM/FM

81%, Bks/Sec 10%, PB 8%, Corp/Ins 1%.

4.8% area - - -/-/BBB+ Central/Zhongtai/BoC/CICC/

StCh/BOCOMI/Wing Lung Bank

/CMBCHK/Industrial/CNCBI/

Everbright HK/ABCI/Silk Road/

Haitong /Huatai /BEA/CSI

-

7.125% area,

7%

- - Unrated DBS/UBS/CMBI/Guotai Junan/

Orient/BOCOMI

-

MS+high 300s - ~US$1.1bn B2/-/BB- 1ADB/ABC/ENBD/HSBC/JPM ME 65%, UK 22%, Eur 6%, Asia 7%. FM

50%, Bks 44%, PB 4%, Other 2%.

Low 6%s,

5.875%/6%,

5.75%

- US$1.8bn, 138acs - GCs HSBC/JPM, JBs ABC/Citi/

ENBD/1ADB/NBK/StCh

MENA 51%, Asia 22%, Eur 14%, UK 12%,

US OS/Other 1%. FM 37%, Bks 30%, PB

26%, Corp/Sec 4%, Ins/PF 3%.

MS+115 area,

MS+95 area,

MS+80/85

- >€14.5bn combined A1/-/A+ GCs/a GS/SG, JBs/p BNPP/MS/

Samba

UK 36%, Ger 16%, Switz 13%, It 5%,

RoEur 18%, US 6%, Asia 5%, MENA 1%.

AM 58%, Gov/CB 16%, Ins/PF 12%, Bks

9%, HF 5%, Other 1%.

MS+170 area,

MS+155 area,

MS+140/145

- >€14.5bn combined A1/-/A+ GCs/a GS/SG, JBs/p BNPP/MS/

Samba

Ger 29%, UK 20%, It 11%, Switz 5%, Fr

4%, RoEur 10%, Asia 11%, US 10%. AM

57%, Ins/PF 26%, HF 8%, Bks 5%, Gov/

CB 4%, Other 1%.

6.65% area,

6.5% (+/-5),

6.45%

0-18 ~US$6.75bn, >200acs B1/-/BB BNPP/Citi/HSBC UK 39%, US 27%, Eur 18%, Turkey 12%,

Other 4%.

6.5% area,

6.25%

- - Unrated Haitong/Central China Int Cap -

high 9% area,

9.5% (+/-12.5),

9.375%

- - B2//B Citi/CS/JPM/Santan -

8.625% area - US$3.6bn -/-/BB- GS/Heungkong/CS/BAML/JPM Asia 95%, EMEA 5%. FM 60%, PB/Corp

39%, Bks/Ins 1%.

14% area - - B3/B- Barc/BOCI /CCBI /CLSA /CMBI/CS/

DB/Haitong /Heungkong/Natx

-

6% area,

5.75%

- - Unrated UBS/JPM -

MS+178 area - - A- WBC -

15% YTP - - Unrated Guotai Junan/CLSA/CNCBI/CCBI/

China Investment/Morgan Fuel

-


Chong Hing Bank’s common equity Tier 1

INDONESIA

PLN PLANS 144A/REG S OFFERING

PERUSAHAAN LISTRIK NEGARA

ANZ, BNP Paribas, Citigroup, HSBC, Mandiri Securities and Standard Chartered are bookrunners and lead managers.

SOUTH KOREA

KDB MAKES GREEN EURO DEBUT

KOREA DEVELOPMENT BANK

30 border meeting between the leaders of North and South Korea and the US, which

though nothing of substance was agreed.

level with the South Korean sovereign.

France 11%, the UK 11%, Germany 10%,

investors in offshore bonds from South Korean quasi-sovereigns. Asset managers

Citigroup, Credit Agricole, HSBC and Standard Chartered were bookrunners.

The Green euro offering follows KDB’s

Sustainable bond framework.

from South Korean issuers this year, following a Green and Sustainable US dollar bond offering by the sovereign in June, a

and a Sustainable Additional Tier 1 and Tier


Air India plans jumbo bond sale INDIA Financing revives efforts to privatise national carrier

The Indian government is counting on a jumbo

Rs220bn (US$3.2bn) bond sale to revive efforts

to privatise debt-ridden national carrier AIR INDIA

after a first botched attempt last year.

AIR INDIA ASSET HOLDINGS LTD, a government-

owned special purpose vehicle formed last

year to take over Rs295bn of the airline’s

Rs575bn debt, in addition to various assets and

subsidiaries, is set to name underwriters for the

proposed bond issue on Monday, according to a

source close to the plans.

Around 16 arrangers put in bids last

Wednesday to manage the sale.

The SPV is planning to raise Rs70bn from

three-year government-serviced bonds on July

15. A sale of Rs150bn of 10-year government-

guaranteed bonds would follow by the end of

the month.

The proceeds will be used to further

streamline Air India’s debt structure and make it

fit for a share sale later this year.

In May 2018, the government offered a 76%

stake in the airline but failed to attract a single

bidder, causing great embarrassment at the

time for the administration of Prime Minister

Narendra Modi. AIAHL was formed afterwards to

start cleaning up the company’s debt burden.

The government confirmed in its budget

statement on Friday that it will now “re-initiate the

process of strategic disinvestment of Air India”.

The company is expected to report a loss of

more than Rs76bn for the year to March 2019,

up from a loss of Rs53.37bn loss a year earlier,

according to Reuters, despite receiving Rs39.75bn

of government funds in the last fiscal year.

According to local media reports, Air India

does not have enough funds to pay employee

salaries beyond October.

Much is riding on the success of the AIAHL

bond issue. “The removal of the huge chunk of

debt improves the attractiveness of the airline,”

said a partner from an accounting firm.

However, Air India’s previous attempt at issuing

a large government-supported bond offering was

not a success. In March, it sent an RFP to raise up

to Rs70bn from bonds backed by a government

guarantee at tenors of up to 15 years, but the

issue did not materialise because investors were

not comfortable with the structure.

“There was a clause in the issue that if the

ownership changes, the government guarantee

will cease to exist,” said a DCM banker. That was

clearly a concern for investors, given that the

government wants to sell its stake.

“Hopefully there will be an unconditional

guarantee from the government of India” this

time, said a fund manager.

Investors are expected to be keen on the

bonds because of the government guarantee

and the pick-up over government securities.

GOVERNMENT WILL PAY“Investors do not have to worry about

repayment. If Air India Asset Holdings is not

able to sell the assets and subsidiaries, the

government will pay the coupon and principal to

the bondholders,” said another DCM banker.

Few investors participated the last time Air

India came to the market in December 2012,

when it raised Rs74bn from 19-year bonds

at 9.27%. That issue had an unconditional

government guarantee and was taken up by

Employees’ Provident Fund Organisation and

Life Insurance Corp of India, both of which are

controlled by the government.

The competitive environment for the airline

has improved after its debt-laden private sector

rival Jet Airways ceased operations in May.

“With Jet Airways shutting down, the

March quarter was good for Indian carriers as

competition reduced and fares went up,” said

Kinjal Shah, Icra’s vice-president of corporate

ratings.

Economic conditions are also more

favourable.

“Oil prices have come off recent highs and the

rupee is also stable,” said the accounting firm

partner.

SBI Capital Markets is the adviser on the bond

sale.

Krishna Merchant

VIETNAM

VIETNAMESE BANK EYES DOLLARS

VIETNAM PROSPERITY JOINT STOCK COMMERCIAL BANK has mandated BNP Paribas, JP Morgan and Standard Chartered as global coordinators and bookrunners to arrange investor

London from July 3.A Reg S offering of US dollar senior

unsecured debt securities may follow.

by Moody’s, in line with the issuer, and will be drawn under a US$1bn euro MTN

the Basel II regime last month, becoming

The last Vietnamese bank to sell US dollar bonds was Vietnam Joint Stock Commercial

TPBANK PLANS OFFSHORE TIER 2

TIEN PHONG COMMERCIAL JOINT STOCK BANK, rated B1 by Moody’s, has mandated MUFG as sole bookrunner to arrange investor meetings in

subordinated debt securities may follow.

Chi Minh stock exchange.

would result in a net loss for the bank that

Vietnamese banks need to meet Basel II

REGIONAL

HY BOOM SETS G3 ON RECORD PATH

resurgent high-yield market boosted activity.

US$335bn full-year total, according to

underwriters, just as last year, with

offshore bonds from Chinese local government funding vehicles, some of

at the end of June, gave the league table a

high-yield franchise.

doubled their deal volumes this year, to

league table.

Morgan Stanley was third in the league table

issuance conditions last year, when US rates

Asia high-yield was all but closed for eight months. That also encouraged some Asian

reach a broader range of investors.

to work in this region,” said Haitham

Bank.“As we saw in the second half of last year,

when the Reg S investor base switches off this can seriously limit market access for

Some Chinese local government funding

dollar bond market in future as the result of increasing regulatory restrictions,

many issuing several times. Zhenro

debut issuers wanting to come.”

EUROPE/AFRICA

SOUTH AFRICA

GOVERNMENT WEIGHS NEW SUPPORT MEASURES FOR ESKOM

ESKOM

for government bonds or ring-fencing it in a


EMERGING MARKETS EUROPE/AFRICA

ALL INTL EMERGING MARKETS BONDSBOOKRUNNERS: 1/1/2019–30/6/2019

Asia-Pacific


1 HSBC 172 17,588.26 8.8

2 Citigroup 92 10,381.60 5.2


4 Bank of China 111 8,948.64 4.5

5 Credit Suisse 67 7,565.27 3.8

6 UBS 76 6,961.47 3.5

7 JP Morgan 55 6,579.50 3.3

8 Mizuho 61 5,930.24 3.0

9 Haitong Securities 114 5,728.95 2.9

10 Citic 95 5,693.60 2.8

Total 458 199,799.61


Source: Refinitiv SDC code: L4



1 JP Morgan 119 28,429.81 7.7

2 Citigroup 153 27,999.04 7.6

3 HSBC 208 27,809.08 7.6


5 BNP Paribas 84 14,595.80 4.0

6 Goldman Sachs 53 13,220.54 3.6

7 Deutsche Bank 81 12,447.50 3.4

8 BAML 79 11,964.00 3.3


10 Morgan Stanley 64 11,186.72 3.0

Total 648 367,760.48



said.Discussions are at an early stage, and it is

cuts that have eroded growth in an already fragile economy.

said various scenarios including a debt transfer were being considered for resolving

a key criterion.Moody’s, the only major credit agency

that still classes South Africa at investment

debt might under certain circumstances be ratings-neutral for the sovereign. The agency declined to comment on Stuart’s remarks.

balance sheet to the government or into a

“A switch to South African government bonds will be looked at, but we have to

said.

government’s debt servicing costs would

agencies factor into their assessment of “contingent liabilities”.

For this reason Moody’s said in December,

sovereign of such a transfer could be neutral.

over a tenth of the government’s net debt - was state-guaranteed.

That suggests that, once debt-servicing

make investments and reward stakeholders.

if it cuts its carbon emissions quicker.

that could lead to job losses at coal mines.

cut costs and increase revenues.

markets research at Intellidex, said the

generation, transmission and distribution

dangerous thing.”

TUNISIA

SOVEREIGN LOOKS TO DEMONSTRATE ACCESS

TUNISIA will hit the road on Wednesday to market a euro-denominated seven-year offering, as the sovereign tries to wriggle

B+ by Fitch, and is on a negative outlook with both agencies.

of the key concerns of the rating agencies which is Tunisia’s access to external

matter. “On the back of this transaction

view of things.”

new bond issue would be worth a nominal €500m.

Moody’s analysts said in late June that a downgrade would be likely if there were delays in the availability of, or a marked increase in, the costs of external funding,

The country’s current account dynamics

to the rating agency, exacerbating external

reserve dynamics.“The negative outlook on Tunisia’s

macroeconomic reforms in recent quarters, external imbalances continued to widen in

buffers,” said Moody’s analysts.

high-yield sovereign issuers out of the

“We know there’s a lot of liquidity out

right investors and we have a high level of

according to Tradeweb.

suffering a “severe health crisis”.



Europe/Africa


1 JP Morgan 28 9,421.02 16.8

2 Citigroup 27 7,163.55 12.7

3 VTB Capital 7 3,987.71 7.1

4 BNP Paribas 11 3,950.11 7.0

5 Gazprombank 6 3,944.36 7.0



8 SG 9 2,010.57 3.6

9 HSBC 8 1,991.23 3.5

10 Deutsche Bank 6 1,757.12 3.1

Total 57 56,235.27



Citigroup is global coordinator and is joined as a lead manager by Natixis and Standard Chartered.

TURKEY

SOVEREIGN BURSTS THROUGH FUNDING TARGET

TURKEY

as the treasury demonstrated once again its ability to read markets.

continues to bemuse and, often, disturb investors, the sovereign’s funding team is

This year alone the treasury has had to navigate around a series of headlines on continued weak economic data, the

reserves, a mayoral election in Istanbul that

air defence system.All of these have at one time or another

destabilised the market for Turkish risk.Ahead of the latest transaction, some

system.

sanctions.That news, along with the buoyant tone

to return to the dollar market.

“It’s a great trade,” said the banker away. “Their funding needs are done so they can

saw a window and took as much as they

guys know how to manage the country’s

deals this year, including a sukuk, and a euro offering raising in total about

BNP Paribas, Citigroup and HSBC were the leads.

MIDDLE EAST

BAHRAIN

BBK OFFERS SPREAD OVER SOVEREIGN

BANK OF BAHRAIN AND KUWAIT sold a US$500m

Tuesday, offering investors a healthy

has moved above the sovereign.

Bahraini and Kuwaiti government entities.

thoughts of the high 300s.Books were over US$1.1bn, including

Fund managers took 50% of the notes and

banks and others.

in the market, but has since tracked the downward trajectory in the ratings of the

Moody’s analysts wrote on Monday that

risk. But the rating agency said that the

strong domestic franchise.The bonds traded down in the

Bank ABC, Emirates NBD Capital, First Abu Dhabi Bank, HSBC and JP Morgan were the leads.

KUWAIT

BURGAN BANK REAPS DIVIDENDS IN PRIMARY

Kuwait’s BURGAN BANK took care of an

Tier 1 on Wednesday, which arguably came

The lender had begun marketing the

Leads had looked at AT1s from Al Ahli

“We could have gone tighter but the issuer was keen to retain some international

Just over half of the bonds went to the


EMERGING MARKETS MIDDLE EAST


Middle East




2 HSBC 18 5,183.56 10.1

3 Citigroup 11 5,054.02 9.9

4 JP Morgan 6 3,950.88 7.7


6 Natl Comml Bk Saudi Arabia 3 3,586.97 7.0



9 BNP Paribas 7 2,967.22 5.8

10 Barclays 5 2,287.00 4.5

Total 49 51,291.81



lead. “Other Gulf names have had different reasons for issuing AT1s. Sharjah Islamic Bank sold one to grow their balance sheet, and Kuwait International Bank is a small bank looking to grow from a small base.”

HSBC and JP Morgan were global coordinators. They were also lead managers, along with Bank ABC, Citigroup, Emirates NBD Capital Limited, First Abu Dhabi Bank, NBK Capital and Standard Chartered.

WARBA BANK

an initial US$500m issuance this year.

the rest would be issued over the next few

The Islamic lender is looking to start a new asset management business this year

aimed at overseeing about US$500m in investments within the next three years, said Ghanem.

Ghanem said.

AMERICAS

ARGENTINA

PAMPA ENERGIA FOLLOWS YPF IN ARGENTINE BOND RESURGENCE

PAMPA ENERGIA hit the market on Tuesday with the second Argentina dollar bond in just over a week, further reviving crossborder issuance from a country that

markets.

President Mauricio Macri’s re-election

The deal came on the heels of oil

in over a year.

running mate, Miguel Pichetto.

less market-friendly candidate Alberto

were inching towards a win.

this window after the recent recovery in Argentine assets,” said Samuel Bevan, an investment manager of emerging markets

Leads on the deal, Citigroup, Credit Suisse, JP Morgan and Santander

“I think there’s a bit of new issue

own curve, maybe fair value would be mid

will be very close to fair value,” said a UK-

Fitch.

BRAZIL

USIMINAS EYES DOLLAR ISSUANCE

USINAS SIDERÚRGICAS

DE MINAS GERAIS has mandated banks ahead of

Leads BB Securities, Bradesco BBI, Goldman Sachs, and Itaú BBA will arrange investor

Proceeds from the transaction are

international and local lenders.

The funds were allocated toward the renovation and construction of two of the


Qatar offers crutch to Lebanon MIDDLE EAST Gulf emirate provides support to troubled Lebanon

QATAR has bought some Lebanese government

bonds as part of a planned US$500m investment

to support LEBANON’s struggling economy, a Qatari

government official said on June 30

Such an investment would be a boost for

heavily indebted Lebanon as it works on

long-delayed reforms to put its public finances

on a sustainable path and stave off financial

crisis.

Lebanese Finance Minister Ali Hassan Khalil

said Qatar’s position was serious and showed its

commitment to Lebanon’s financial stability.

“It will have a positive effect on the markets

and we are following up contacts with Qatari

officials for this purpose,” he said.

Two sources familiar with the secondary

market for Lebanese dollar-denominated debt

said there had been no sign of a major bond

purchase in recent days.

“Gauging from the market alone, you wouldn’t

have guessed anything happened,” a fund

manager in Dubai said. Another source familiar

with the market said “no volumes were seen”

after the news.

Tiny but wealthy Qatar said earlier this year

it would invest US$500m in dollar bonds

issued by the Lebanese government to help

support the economy, which has one of the

world’s highest public debt burdens and

stagnant growth.

Qatar has not disclosed the timing or size of

the bond purchases made, but any purchase large

enough to push down yields would be a boon as

Beirut grapples with debt equivalent to 150% of GDP.

“Qatar has always been committed to

strengthening its ties with the brotherly

Lebanese Republic. Hence it decided to invest

US$500m in the Lebanese economy, including

purchasing Lebanese government bonds,” a

government official said.

“Some of the bonds have been purchased. The

rest of investments are due as planned with the

Lebanese government.”

Moody’s said in June that Lebanon is at risk of

a debt rescheduling or steps that may constitute

a default on the back of slowing capital inflows

and weak deposit growth despite austerity

measures in its 2019 draft budget.

The US$500m Qatari investment pledge,

made last January, prompted its regional rival

Saudi Arabia to make a similar commitment just

days later to support Lebanon “all the way” to

safeguard its stability, though the kingdom has

not yet announced any bond purchases.

Saudi Arabia, the United Arab Emirates, Bahrain

and Egypt cut diplomatic, trade and transport

ties with Qatar in June 2017. They accuse Qatar of

supporting terrorism, which it denies.

Davide Barbuscia, Laila Bassam, Eric Knecht, Tom Perry

Gerais.

COLOMBIA

EPM TO REFINANCE OUTSTANDING DEBT WITH NEW DOLLAR BOND

EMPRESAS

PUBLICAS DE MEDELLIN

banks ahead of a roadshow for a new dollar bond.

The deal, led by HSBC, JP Morgan, and Scotiabank, is intended to fund liability

an intermediate maturity.Investor meetings will begin on Thursday

overruns and other factors that could

PERU

ERGON PERU READIES DOLLAR ISSUANCE

Peruvian solar energy and infrastructure ERGON PERU has mandated banks

Sumitomo Mitsui Banking Corporation

generation of energy from renewable resources.

electricity to homes using renewable energy sources to be used for illumination and information systems, such as radio and television.

REGIONAL

LATAM ISSUANCE STARTS TO RECOVER AFTER FIRST HALF DECLINE

Political risks, concerns over global growth and a diminishing need for hard currency

crossborder bonds.

International issuance volumes over that

Aside from broader worries about the

borrowers also had to contend with an

slowing issuance from a country that

Not only did the Mexican sovereign issue dollar bonds later than it normally does

clear of the bond market altogether.And while investors grew increasingly

electoral victory of Jair Bolsonaro, a buoyant local market was often more attractive than hard currency funding.

frequent issuers such as Argentina and

funding from the IMF - made for a slow start to the year.

have gone to the IMF,” said Shamaila Khan, director of emerging market debt at Alliance Bernstein.

January, usually one of the busiest

direction of US interest rates.That month, just 10 borrowers hit the

through 33 deals.

A dovish turn at the Federal Reserve and a

marking an 150% increase from the same

largest dollar deal.

More Mexican issuers hit the market that month, including the sovereign in

It also saw Telefonica del Peru target a rare local currency trade at foreigners, as well as dollar deals from Panama, Peru’s Consorcio Transmantaro, and Panamanian

“This year you’ve seen more issuance out of the smaller countries like Peru, Colombia, and Uruguay,” said a senior syndicate

smaller issuers like Colombia and the

Dovish central banks in the US and

half of the year, as borrowers look to take advantage of low rates and investors hunt for yield.

A favourable election outcome for Argentina’s President Mauricio Macri could also bring more issuers from that country following recent forays from energy

However, Khan says it is unlikely that the year will match last year’s volumes.

of years,” she said.


EMERGING MARKETS AMERICAS


Latin America


1 JP Morgan 22 6,935.83 13.8

2 BAML 20 5,405.12 10.8

3 Citigroup 17 4,216.86 8.4


5 Santander 16 3,187.29 6.4

6 BNP Paribas 9 2,383.39 4.7

7 HSBC 9 2,336.11 4.7

8 Scotiabank 11 2,201.92 4.4


10 Banco Bradesco 10 1,907.96 3.8

Total 62 50,182.99



INTERNATIONAL ISLAMIC FINANCE DEBTBOOKRUNNERS: 1/1/2019–30/6/2019



2 Kuwait Finance House 4 1,048.32 11.7

3 HSBC Holdings 5 880.42 9.8

4 Citigroup 2 786.67 8.8

5 Dubai Islamic Bank 4 781.65 8.7

6 Malayan Banking Bhd 2 483.33 5.4


=7 Bank Mandiri 1 400.00 4.5

9 Sharjah Islamic Bank 3 381.65 4.3

Total 9 8,948.62


Source: Refinitiv SDC code: J27

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FRONT STORY SYNDICATED LENDING

US disappoints with lowest 2Q in 7 years Just over US$1trn for the first half, down 33% year-o-year

Smallest first-half total since 2016

US syndicated lending turned in a lacklustre performance in the second quarter, amounting to the lowest second-quarter total in seven years and dashing expectations for a meaningful boost to

start to 2019.Nearly US$563bn of loans were arranged

in the second quarter, down roughly 35% from US$870bn for the same period last year, according to LPC. This marks the lowest second quarter since 2012 when US$400.5bn was booked in the April-to-June period.

has been relatively disappointing. There has

investors and arrangers would have liked to see,” said Ted Swimmer, head of corporate

Commercial Banking.

second quarters combined, syndicated loan volume was down 33% year over year

2016.At US$442bn, total issuance was low in

market’s swift rebound from late 2018 volatility fuelled expectations that renewed

from bankers and investors looking to lend would give way to a healthier pace of deals.

“After coming from a severely down market in December, a recovery in January and February, a fairly robust market in March, the expectation was that activity would improve,” said Art de Pena, managing director and head of loan syndicate and distribution for MUFG.

Persistent macroeconomic and geopolitical uncertainties, however, gathered steam, clouded visibility and ushered in renewed caution. The constant swirl of trade war rhetoric, tariff concerns and the as-yet-unknown impact on labour and materials costs combined with the

be ignored.

“The rhetoric around tariffs and knock-on effects on the economy put a damper on

expectations and raised scrutiny among credit managers,” de Pena said.

Despite widely available capital at low borrowing costs, the reality of sky-high valuations against a backdrop of economic and political uncertainties produced a sense of hesitancy among corporate borrowers and private equity sponsors to pull the trigger on transformative transactions.

THE NUMBERS

investment-grade-rated companies increased moderately to US$279.57bn in the second quarter from US$216.37bn in the previous three months, but was down

second quarter, with only US$57.19bn in

dominated issuance.

buyouts gave way to an emphasis on

companies, in particular the higher-quality

during the quarter, favouring repeat issuers and well-known borrowers that have performed through a cycle.

Private equity sponsors also continued to pursue growth opportunities via bolt-on acquisitions versus targeting new platforms.

Leveraged lending increased only marginally to US$188.68bn for the second

registered a 54% drop compared to the year-ago period.

repricing activity that took place in 2018 has

largely been absent this year. Still, new money leveraged volume of US$89.38bn for

lower compared to US$124.81bn for the same period last year.

“Q2 was disappointing in volume overall. The new money side of the market was the biggest disappointment,” de Pena said.

SECOND HALF

Despite two back-to-back quarters of thin volume, market participants remain optimistic for a busy second half, particularly if a trade deal is reached with China. A resolution on trade and tariffs

capital, one leveraged lender said.The unique combination of a strong

equity market paired with low interest rates is already creating a strong bid for credit and the second half is expected to produce an uptick in leveraged M&A.

“We expect a relatively big pick-up in M&A in the third and fourth quarters given the backlog,” Swimmer said.

dominating event-driven transactions.“There is very little corporate-to-corporate

M&A going on and we don’t expect that to change anytime soon,” Swimmer said of the middle market. “Sponsors are the most likely buyer and continue to own the leveraged M&A activity.”

On the investment-grade side, the US$38bn bridge loan backing US biopharmaceutical company ABBVIE’s US$63bn bid to diversify its product offering with the purchase of Botox-maker Allergan provided a hefty boost to the pipeline. Bankers are highly receptive to the deal, which has been a testament to the strength of the bank market and they hope heralds more to come.

“This is the most stability we have seen in the bank market in several years,” said Anish Shah, global head of investment

Stanley.Leela Parker Deo

“We expect a relatively big pick-up in M&A in the third and fourth quarters given the backlog”


LOANS Australia 66 China 66 Hong Kong 67 India 69 Indonesia 69 Belgium 70 Egypt 70 Netherlands 71 Spain 72

UAE 72 UK 72 United States 74 Mexico 75 Leveraged Loans 76 Restructuring 80


ASIA-PACIFIC

AUSTRALIA

CROMWELL PROPERTY SEEKS €225m

Real estate company CROMWELL PROPERTY

GROUP is seeking a €225m three-year loan.Coordinator Goldman Sachs has invited

lenders to submit indicative pricings.Funds are for general corporate purposes.

a unit of Cromwell Property, raised a A$233.935m 15-month senior loan. Credit

were the lenders on that transaction.As at December 31 2018, ASX-listed

Cromwell had a direct property investment portfolio in Australia valued at US$2.5bn and total assets under management of US$11.5bn across Australia, New Zealand and Europe.

CROSS RIVER RAIL LIMITED SELL-DOWN

Banks providing a A$2.3bn (US$1.62bn) loan for the Brisbane-based CROSS RIVER RAIL public-private partnership project are planning a limited sell-down.

Eleven banks provided the loan, which is expected to be launched soon. The lenders are BBVA, Credit Agricole CIB, Intesa Sanpaolo, KfW IPEX-Bank, MUFG, Norinchukin Bank, Societe Generale, Standard Chartered, Sumitomo Mitsui Banking Corp, Sumitomo Mitsui Trust Bank and HSBC.

A consortium comprising Australia-listed

and UGL, as well as independent fund

company Ghella, won the bid for the tunnel,

stations and development PPP of the Cross River Rail project in April.

The project also includes a rail, integration and systems package, which will be developed by a separate consortium, but not under a PPP framework.

The entire Cross River Rail project will cost A$5.4bn to develop and is expected to start operating in 2024. Once completed, the 10.2-kilometre railway line will run from

5.9-kilometre twin tunnel running under the Brisbane River and the central business district.

CHINA

CTRIP.COM INCREASES LOAN

CTRIP.COM INTERNATIONAL has increased a three-year term loan to US$2bn from €600m-equivalent (then US$675m-equivalent).

The loan was launched as a dual-currency loan available in US dollars and euros. During syndication, the Nasdaq-listed borrower asked all banks to lend only US dollars.

Mandated lead arrangers and bookrunners Bank of Communications Hong Kong branch, Bank of East Asia, China Construction Bank (Asia), HSBC and Korea Development Bank have brought in 14 banks, including Bank of China – which joined as an MLAB.

Lead arrangers are China Everbright Bank Shanghai branch, China Everbright Bank Hong Kong branch, Export-Import Bank of China, China Zheshang Bank, China Development Bank, China Minsheng Banking Corp, China Merchants Bank, Agricultural Bank of China, Industrial Bank, Chiyu Banking Corp, CMB Wing Lung Bank, Industrial & Commercial Bank of China and Shanghai Pudong Development Bank. Arranger is Chong Hing Bank and senior manager is ANZ.

pricing of 141.67bp based on an interest margin of 135bp over Libor.

WOLONG ELECTRIC DEBUTS €150m FINANCING

Shanghai-listed electric motor manufacturer WOLONG ELECTRIC GROUP has invited banks to join a debut €150m three-year term loan at three commitment levels.

Standard Chartered Bank is the mandated lead arranger and bookrunner of the deal, which pays an interest margin of 180bp over Euribor and has an average life of 2.75 years.

Banks have been asked to join as MLAs with tickets of €30m or more for top-level all-in pricing of 210bp based on an upfront fee of 82.5bp. Lead arrangers committing €20m–€29m receive all-in pricing of 205.1bp through a fee of 69bp, while arrangers with tickets of €10m–€19m earn an all-in of 200bp based on a 55bp fee.

capital purposes.Wolong Electric makes high and low-

voltage motors, lithium and lead-acid batteries, heavy equipment and transformers, and has factories in Asia, Europe and North America.

RIGHT LANE UNIT LAUNCHES US$135m LOAN

WELL FAITH MANAGEMENT, an entity that is 20%-owned by Right Lane, has launched a US$135m four-year term loan.

CMB Wing Lung Bank is the sole mandated lead arranger and bookrunner of the

240bp over Libor and has an average life of 3.75 years.

Banks have been invited to join as MLAs with tickets of US$40m or more for a top-level all-in pricing of 260bp based on an upfront fee of 75bp. Lead arrangers

GLOBAL LOANS BOOKRUNNERS – FULLY

SYNDICATED VOLUMEBOOKRUNNERS: 1/1/2019–30/6/2019


1 BAML 588 185,168.88 10.0

2 JP Morgan 559 183,417.49 9.9

3 Wells Fargo 444 115,464.11 6.2

4 Citigroup 342 113,965.38 6.2

5 MUFG 563 96,528.28 5.2

6 Mizuho 374 83,364.93 4.5

7 Barclays 215 56,038.55 3.0

8 BNP Paribas 179 52,971.92 2.9

9 RBC 166 51,454.47 2.8

10 HSBC 178 47,664.39 2.6

Total 3,933 1,852,057.07

Proportional credit

Source: Refinitiv SDC code: R1

GLOBAL LOANS BOOKRUNNERS – FULLY

SYNDICATED VOLUME (EX US)BOOKRUNNERS: 1/1/2019–30/6/2019


1 Mizuho 283 55,669.97 8.1

2 MUFG 412 39,464.23 5.7



5 BNP Paribas 104 25,138.66 3.7

6 BAML 56 24,023.15 3.5

7 HSBC 111 21,342.70 3.1

8 Scotiabank 77 20,879.65 3.0

9 TD Securities 66 20,568.78 3.0

10 RBC 69 19,368.06 2.8

Total 2,104 687,352.45

Proportional credit


ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY

SYNDICATED VOLUME (INCLUDING JAPAN)BOOKRUNNERS: 1/1/2019–30/6/2019


1 Mizuho 246 48,630.01 18.2

2 MUFG 384 33,166.16 12.4


4 Bank of China 126 17,544.37 6.6

5 HSBC 47 8,839.26 3.3

6 Bank of Communications 38 7,637.47 2.9


8 ANZ 36 6,915.34 2.6

9 Agricultural Bank of China 18 6,777.85 2.5

10 State Bank of India 3 4,972.04 1.9

Total 1,442 267,310.01

Proportional credit

Source: Refinitiv SDC code: S3a


LOANS ASIA-PACIFIC

committing US$25m–$35m earn an all-in pricing of 250bp through a fee of 37.5bp while arrangers with tickets of US$10m–$20m receive an all-in of 245bp based on an 18.75bp fee.

Right Lane, a wholly owned investment holding subsidiary of Chinese state-backed

providing a guarantee.

US$100m loan signed in February 2016 and for developing and expanding a commercial

CMB Wing Lung also led the 2016 loan

Bank of China (Asia) and Bank of Shanghai. The four-year deal was also guaranteed by Right Lane and was split between tranches of US$20m and US$80m.

equivalent three-year term loan from 11 banks. Top-level all-in pricing was 151.7bp or 146.7bp based on an interest margin of 130bp over Libor or 125bp over Euribor, respectively.

Other shareholders of Well Faith hold stakes of 10% or less in the borrower. John Zhao and Lin Tun, respectively chairman and managing director of Legend-sponsored

the directors of Well Faith.

based AEW Capital Management are also in the market for a US$390m-equivalent three-year onshore/offshore loan to back their

the onshore tranche and will be shared with lenders on the offshore portion through an inter-creditor agreement. The deal has a two-year extension option and pays an offshore margin of 230bp over Libor.

HONG KONG

GOSHAWK LAUNCHES US$500m BULLET

Dublin-based aircraft leasing company Goshawk Aviation has launched an

loan with a greenshoe option.Agricultural Bank of China Hong Kong branch

is the sole mandated lead arranger and China

Everbright Bank Hong Kong branch, Development Bank of Japan, OCBC Bank, Philippine National Bank and Societe Generale Hong Kong branch, which joined as senior lead arrangers before launch, and ABC will together pre-fund the US$500m amount. The deal will be increased beyond US$500m when banks join through the greenshoe option in syndication.

The deal, guaranteed by Goshawk Aviation, is split between Tranche A for DIONYSUS AVIATION and Tranche B for MAGUEY

DUTCH AVIATION. The interest margin is 160bp over Libor.

Banks have been invited to join as senior lead arrangers with commitments

of US$40m–$50m for top-level all-in pricing of 170bp based on an upfront fee of 50bp. Lead arrangers with tickets of US$30m–$39m earn all-in pricing of 168bp through a fee of 40bp while arrangers committing US$20m–$29m receive an all-in of 166bp based on a 30bp

Asia loans slide to seven-year low

ASIA-PACIFIC 2012 as trade war dents Q2 volumes

Syndicated lending in Asia-Pacific, excluding

Japan, fell by 22% to a seven-year low of

US$198.5bn in the first six months of 2019 as the

global economy reeled from the effects of the

ongoing trade war between the US and China.

Asian loans fell to US$92.0bn in the second

quarter, down 29% on the previous year and 14%

on the first three months of the year, according

to LPC data.

The number of deals continued to fall, with the

second quarter clocking up 234 loans, compared

with 355 in the previous quarter. The first-half

tally of 589 deals was 16% lower than 700 loans

closed in the first six months of 2018.

“The global economy continued to suffer from

the overhang of the trade war and uncertainty

gripped the financial markets,” said Mildred

Chua, head of syndicated finance at DBS Bank

in Singapore. “Lending activity in Asia took a

hit this year particularly due to the slowdown

in China and the lack of blockbuster acquisition

financings.”

The effects of the trade dispute between

the US and China were most evident in China,

where syndicated lending in the first half of 2019

plunged 26% to US$35.4bn, compared with

US$48.4bn a year earlier. Neighbouring Hong

Kong also suffered a 20% decline to US$55.8bn

this year against US$69.7bn raised in the first six

months of 2018.

However, the two geographies produced

significant activity from the real estate sector,

particularly from financial sponsors borrowing to

buy assets.

“Real estate financing is one of the areas

where deal flow has been encouraging during

the first half of this year, especially from financial

sponsors and asset managers who have been

very active acquiring assets,” said Amit Lakhwani,

head of loan syndicate and distribution for Asia-

Pacific at Standard Chartered.

“The sector is less reliant on exports or

impacted by tariffs and therefore has been

somewhat insulated from the negative sentiment

arising from concerns on the trade war.”

In May, a consortium comprising private equity

giant Blackstone Group, Hong Kong-based real

estate fund Gaw Capital Partners and Goldman

Sachs closed a HK$9.2bn (US$1.17bn) five-year

loan backing the leveraged buyout of a dozen

shopping malls from Hong Kong-listed Link Real

Estate Investment Trust.

It followed a Gaw Capital-led consortium’s

HK$13.8bn LBO loan in March to back a winning

bid for commercial properties of Link REIT in

Hong Kong.

Gaw Capital and Chinese PE firm Hengli

Group also raised HK$9.9bn through senior and

mezzanine loans for their acquisition of office

towers Cityplaza Three and Four in Hong Kong’s

Taikoo district.

DOWN DOWN UNDERAustralia and Singapore were among the other

major markets to post significant drops in loan

volumes. Australian volumes dipped 31% to

US$36.6bn in the first half, while Singapore

registered just US$14.3bn, plummeting 51% from

the previous year.

Australia generated several popular leveraged

financings, including a A$2.15bn (US$1.52bn)

senior loan supporting the buyout of Australian

hospital operator Healthscope and a A$660m

six-year unitranche loan backing US private

equity firm TPG Capital’s leveraged buyout of

Australian pet-store owner Greencross.

“It is positive to see strong investor demand

for different loan structures and across a variety

of sectors,” said Andrew Ashman, head of loan

syndicate for Asia-Pacific at Barclays.

“This year, we have seen a broadening of the

institutional investor base with new lenders from

Australia, Singapore and Hong Kong joining

Aussie dollar TLB [Term Loan B] loans for the first

time to gain exposure to Australian credit.”

Elsewhere, Vietnam stood out with a nearly

four-fold increase in lending to US$5.4bn in the

first six months of 2019, compared with US$1.1bn

in the same period a year earlier.

The pipeline in South-East Asia shows

promise, particularly with a jumbo S$8bn

(US$5.9bn) new money loan and amendment-

and-extension of existing debt for Singaporean

integrated resort Marina Bay Sands, which is

expected to close in the third quarter.

Prakash Chakravarti


fee. Sub-arrangers with tickets of US$10m–$19m are offered an all-in of 164bp through a 20bp fee.

Funds are for general corporate purposes.

guaranteed by Goshawk Aviation and led by

six other banks and offered top-level all-in pricing of 168.5bp based on the same margin of 160bp over Libor.

Later that year in November, Goshawk Aviation signed a US$1.14bn four-year revolving credit facility with 15 banks. The loan was mainly coordinated in Europe but some banks in Asia also joined. Citibank Europe is the facility agent.

company.

NINE DRAGONS SIGNS HK$3.9bn CLUB

NINE DRAGONS PAPER

(HOLDINGS)

three-year term loan for its US unit.Bank of China (Hong Kong) and Bank of

Communications Hong Kong branch were the lenders on the club facility. The two banks are considering syndicating the deal.

ND Paper US, a wholly owned subsidiary

borrower while the listed company and

guarantors.Ownership covenants require

chairwoman Cheung Yan and her family to own at least 51% of Nine Dragons Paper

over the recycled paper and cardboard producer.

Commercial Bank of China provided a Rmb523m (US$76.2m) one-year loan for Nine Dragons Worldwide (China)

subsidiary. The deal was guaranteed by Nine

interest rate of 4.3%.

US$168m seven-year loan to fund the expansion of a paper plant in Vietnam. Cheng Yang Paper Mill was the borrower

provided a guarantee.

BEIJING ENTERPRISES UNIT GOES GREEN

State-owned BEIJING ENTERPRISES CLEAN ENERGY

GROUP

three-year term loan, which will partially be

used to support payments for clean energy projects.

DBS Bank and Standard Chartered Bank are the mandated lead arrangers, bookrunners and underwriters of the deal, which offers

has a 2.85-year average life.Banks are being invited to join with

mandated lead arranger and bookrunner title and top-level all-in pricing of 192bp via

for the MLA title and an all-in of 185bp via a

for the lead arranger title and an all-in of 180bp via a 71.25bp fee.

Water Group, a majority shareholder in the borrower, is providing a letter of comfort.

Proceeds will also be used for general

Beijing Enterprises Clean Energy

loan from 10 banks in September 2017. That facility offered top-level all-in pricing of 202.6bp based on a margin of 170bp over

Clean Energy Group is a producer and distributor of renewable energy. Beijing Enterprises Group, which is owned by

TOTAL NUMBER AND VOLUME OF SIGNED SYNDICATED CREDITS BY COUNTRY1/1/2019–30/6/2019

No of Volume No of Volume No of Volume

Country issues US$(m) Country issues US$(m) Country issues US$(m)

United Arab Emirates 17 17,058.3

Saudi Arabia 5 5,865.4

South Africa 11 2,976.5

Israel 1 2,300.0

Kenya 1 1,249.2

Egypt 2 1,150.0

Ghana 4 1,085.0

Guinea 1 750.0

Angola 1 500.0

Burundi 1 400.0

Ivory Coast 3 396.5

Bahrain 1 374.0

Uganda 1 367.0

Nigeria 1 358.0

Oman 2 355.0

Mali 1 278.9

Liberia 2 87.2

Gabon 1 60.2

Africa/Middle East 56 35,611.2

Japan 966 114,061.5

Hong Kong 97 56,562.3

Australia 83 36,400.7

China 198 35,944.4

Taiwan 101 19,833.7

India 69 19,730.9

Singapore 39 15,094.4

Malaysia 10 10,600.9

Indonesia 15 5,805.2

Vietnam 10 5,413.3

Philippines 6 3,118.5

New Zealand 13 2,952.0

South Korea 5 2,370.2

Mauritius 2 935.0

Thailand 3 562.8

Uzbekistan 1 370.0

Bangladesh 3 181.2

Pakistan 3 146.4

Laos 1 116.5

Asia-Pacific 1,625 330,199.9

United States 1,857 1,159,136.1

Canada 262 115,280.9

Brazil 12 12,126.8

Mexico 21 11,556.6

Chile 2 2,671.0

Colombia 6 1,741.2

Argentina 8 1,107.0

Trinidad and Tobago 1 720.0

Peru 3 502.0

Uruguay 1 203.7

Honduras 2 150.0

Paraguay 1 130.0

Panama 1 109.6

Americas 2,177 1,305,434.9

France 84 55,309.7

Germany 65 54,412.2

United Kingdom 70 51,187.4

Spain 84 29,838.3

Switzerland 12 25,145.0

Netherlands 27 17,623.0

Luxembourg 9 15,624.1

Italy 38 14,962.8

Sweden 12 11,525.9

Turkey 12 8,720.9

Ireland 9 7,791.0

Norway 16 7,609.9

Finland 15 7,354.1

Belgium 15 6,543.8

Russian Federation 5 4,317.6

Denmark 3 3,387.4

Austria 3 3,312.7

Poland 3 2,298.8

Czech Republic 3 1,677.6

Greece 1 892.2

Portugal 1 832.2

Monaco 1 450.0

Georgia 1 257.8

Romania 1 235.1

Ukraine 1 176.1

Bulgaria 2 121.7

Hungary 1 56.0

Croatia 1 15.9

Europe 495 331,679.2

Total 4,353 2,002,925.2

Source: Refinitiv


LOANS ASIA-PACIFIC

Beijing’s municipal government, is the borrower and Beijing Enterprises Water Group’s ultimate parent.

SF MANDATES SIX FOR TAKE-OUT

Express delivery service SF HOLDING has

bridge facility that backed the purchase of the Greater China supply chain operations of Deutsche Post.

ANZ, Credit Agricole CIB, Credit Suisse, HSBC, MUFG and Standard Chartered are the mandated lead arrangers and bookrunners of the loan, which is expected to offer an

completed the Rmb5.5bn (US$800m)

Greater China supply chain operations. SF

the next 10 years for the trademark licence, customer referrals, employee training and other support services.

The target business is now branded as SF

in Shanghai.

largest private delivery courier company, SF Express.

LEGEND FINANCIAL FINALISES PRICING

LEGEND FINANCIAL LEASING (SHANGHAI), a unit of

(US$128m) three-year term loan.The mandated lead arranger and

bookrunner is Luso International Banking.The deal was initially a dual-currency

amortising loan.

and all-in pricing remain the same, but all-ins are now based on an average life of 2.625 years and lower arrangement fees, for which payment is tied to drawdown.

Banks are now invited to join as MLABs

a top-level all-in of 300bp based on an arrangement fee of 210bp. MLAs with

pricing of 280bp through a fee of 158bp,

$119m receive an all-in of 260bp based on a 105bp fee.

Previously, the draft invitation listed the arrangement fees as 240bp, 180bp and 120bp for the respective commitment levels.

take place through six semi-annual instalments after a six-month grace period:

5% (sixth, 12th, 18th, 24th and 30th months) and 75% (36th month).

and purchasing leasing assets.

continue to provide the letter of comfort.

INDIA

SIX JOIN BORL

BHARAT OMAN REFINERIES has signed a US$125m two-year term loan with six lenders joining in general syndication.

SMBC was the sole mandated lead arranger and bookrunner. Taipei Fubon Commercial bank joined the deal as an MLA, while AfrAsia Bank, Gunma Bank, Hyakugo Bank, Korea Development Bank and Taiwan Cooperative Bank Manila OBU came in as lead arrangers.

of 101.5bp based on an interest margin of 73bp over Libor and a remaining average life of 1.75 years.

foreign-currency facilities in compliance

The borrower last raised a US$125m three-year loan in December 2015, which closed as a club. The deal was mandated at below 130bp all-in pricing.

BORL, a unit of state-owned Bharat Petroleum Corp, owns and operates an oil

tonnes per annum in Bina, Madhya Pradesh

venture between BPCL and Oman Oil.

EXIM INDIA SIGNS DUAL-TRANCHER

State-owned EXPORT-IMPORT BANK OF INDIA has

with three lenders joining in syndication.MUFG and Sumitomo Mitsui Banking Corp are

the mandated lead arrangers and bookrunners of the term loan, which

a US$75m three-year portion.Bank of New York Mellon joined as an

arranger, while ING Bank and National Bank of Kuwait came in as participants.

Proceeds are for general banking and other purposes approved by the Reserve

guidelines.The borrower raised a US$120m 27-month

facility in December 2015, according to LPC

PFC SEALS US$300m LOAN

State-owned POWER FINANCE CORP has completed a US$300m three-year loan,

State Bank of India Hong Kong branch and MUFG were the lenders on the deal, PFC’s second foreign-currency borrowing in the second quarter of this year.

Last month, PFC raised US$1bn in Reg S bonds – the biggest overseas issuance from a

company.The borrower last signed a US$150m-

lead arrangers and bookrunners of the bullet facility, which has been equally pre-funded.

PFC is rated Baa3/BBB–/BBB–.

INDONESIA

CSUL LIFTS LOAN TO US$130m

CHANDRA SAKTI UTAMA LEASING has increased a three-year loan to US$130m from the

in general syndication.ANZ, Bank Mandiri, CIMB Bank, OCBC Bank

and Standard Chartered were the mandated lead arrangers and bookrunners of the

pricing of 230.77bp (offshore) and 250.77bp (onshore) based on interest margins of 200bp (offshore) and 220bp (onshore) over Libor, and a remaining average life of 1.625 years.

Lead arranger is Taiwan Cooperative Bank, while arrangers are Bank Rakyat Indonesia, Eastspring Investments, Korea Development Bank and RHB Bank.

Funds will be used for general corporate purposes.

a top-level all-in pricing of 301.9bp (offshore) and 336.9bp (onshore) through margins of 265bp (offshore) and 300bp (onshore) over Libor, respectively, and a remaining average life of 1.625 years.

privately owned PT Tiara Marga Trakindo. The parent is an authorised dealer of heavy

customers in the mining, construction, forestry, agricultural, energy and industrial sectors.

CT UNITS UP LOAN TO US$115m

MEGA

CENTRAL FINANCE and MEGA AUTO FINANCE,


conglomerate CT Corp, have increased a dual-currency secured term loan to US$115m-equivalent from a US$100m-equivalent target.

Standard Chartered, CTBC, Sumitomo Mitsui Trust Bank, Taishin International Bank and Tokyo Star Bank were the mandated lead arrangers and bookrunners of the transaction, which comprises a US$78m portion and a ¥4.02bn (US$37m) piece.

Lenders are Chang Hwa Commercial Bank, Taiwan Cooperative Bank, Shanghai Commercial & Savings Bank, Fuyo General Lease (Asia), Bank Rakyat Indonesia (Persero), Hokkoko Bank, Yuanta Commercial Bank and The Higo Bank.

The deal comprises a three-year Tranche A and a four-year Tranche B with respective average lives of 1.875 years and 2.375 years.

Banks were invited to lend US dollars or yen to Tranches A and B on a 50:50 basis. Tranche A offers interest margins of 225bp over Libor and 175bp over Tibor, while Tranche B offers margins of 250bp over Libor and 200bp over Tibor.

Top-level all-in pricing was 257bp (Tranche A) and 284bp (Tranche B) for US dollar lenders, and 207bp and 234bp for the respective tranches for yen lenders.

accounts receivable and is also secured by a pledge over transaction accounts.

CT Corp holds its majority stake in the borrowers through Mega Corpora, while Japanese conglomerate Marubeni owns 30% of Mega Central Finance and Mega Auto Finance.

Mega Auto Finance raised a US$79.8m three-year loan. The top level all-in pricing was 291.67bp based on a margin of 250bp over Libor and an average life of 1.8 years.

JAPAN

NRI RAISES BRIDGE

NOMURA RESEARCH INSTITUTE is raising a ¥100bn (US$923m) one-year bridge loan to back a planned ¥160bn share buyback.

MUFG is the sole lender of the bridge.

Monday launched a buyback offer at ¥1,570 per share, which ends on July 29. Nomura

watch.

INVINCIBLE REIT FUNDS WAR CHEST

INVINCIBLE INVESTMENT CORP signed a ¥27.4bn (US$253m) multi-tranche bullet term loan for real estate acquisitions.

The loan is split into six tranches with tenors ranging from one to six years and interest margins ranging from of 20bp to 70bp over one-month Tibor.

Mizuho Bank was the arranger, while Aeon Bank, Aozora Bank, Citigroup, Development Bank of Japan, MUFG, Nomura Trust & Banking, SMBC and Sumitomo Mitsui Trust Bank joined in syndication.

The borrower invests in hotels and residential properties.

SINGAPORE

GIC JV GETS €850m LOAN

A European joint venture between Singapore’s sovereign wealth fund GIC and US data centre operator EQUINIX is being backed with €850m of secured loans underwritten by Deutsche Bank and ING.

The joint venture will develop and operate xScale hyperscale data centres in Europe.

facility that will be used to fund the joint venture’s acquisition of a data centre in London and a data centre in Paris from Equinix and other development investments.

There is also a €610m delayed draw term loan facility that will be used to fund a portion of the planned development and construction costs for new xScale data centres in Amsterdam, Frankfurt and London and a €40m revolving credit facility that will be used to fund working capital needs and other general corporate purposes of the joint venture.

mandated lead arrangers and joint

The joint venture, which will be 80%

expected to close in the third quarter of 2019.

VIETNAM

NO VA LAND ENTERS GENERAL

NO VA LAND INVESTMENT GROUP, one of the leading property developers in Vietnam, has launched a US$150m three-year loan into

lenders in the senior phase.Credit Suisse is the original mandated lead

arranger and bookrunner, while Industrial and Commercial Bank of China, Taichung Commercial Bank, Taiwan Business Bank and Taiwan Cooperative Bank came in as joint MLABs. Vietcombank is the onshore facility agent, security agent and lender.

The deal, which has a US$100m greenshoe, pays an interest margin of 425bp over Libor and has an average life of 2.8 years.

MLAs with commitments of US$20m and above earn top-level all-in pricing of 460.71bp via a participation fee of 100bp, while lead arrangers coming in for US$15m–$19m receive all-in pricing of 457.17bp via a 90bp fee. Arrangers joining with US$10m–$14m receive all-in pricing of 450bp via a 70bp fee.

US$30m 30-month loan.

EUROPE/MIDDLEEAST/AFRICA

BELGIUM

COFINIMMO AMENDS RCF

COFINIMMO has amended and extended its existing revolving credit

to €400m.

extension options.

facility.KBC Bank coordinated the facility and

remains as facility agent.BNP Paribas Fortis

bookrunning mandated lead arrangers, while JP Morgan, HSBC France, Societe Generale and SMBC are mandated lead arrangers.

Barclays and ABN AMRO are lead arrangers.The RCF was originally put in place in

November 2015 for €300m.

portfolio spread over Belgium, France, the Netherlands and Germany. The portfolio is worth €4bn.

EGYPT

EGPC LAUNCHES US$400m LOAN

for EGYPTIAN GENERAL PETROLEUM CORP has been launched into general syndication.

First Abu Dhabi Bank is sole underwriter, mandated lead arranger, bookrunner and facility agent on the deal, which will be used

debt obligations.The facility is guaranteed by the Arab

Republic of Egypt acting through the Ministry of Finance. General syndication is expected to close in around two months.


LOANS EMEA

EGPC was last in the market in March, closing US$750m loan under the same structure, which matures in December 2023.

Mashreqbank acted as bookrunners and mandated lead arrangers on that deal and were joined by Arab Banking Corp and National Commercial Bank as mandated lead arrangers.

FINLAND

LOAN FOR METSO OUTOTEC MERGER

The combination of Finland’s METSO MINERALS and OUTOTEC is being backed with €1.55bn of backup and term loan facilities from Nordea.

Metso Outotec will be a process technology, equipment and services company in the minerals, metals and aggregates industries.

equipment and services unit will become a separately listed company called Neles.

The loan will support the combination and cover the possible amendment and consent processes related to Metso’s

the potential cash redemption of Metso’s shares up to €500m, as well as to provide backup liquidity to Metso, and Metso Outotec through a €500m revolving credit facility.

as Metso puts in place €600m of new RCFs, which will be transferred to Metso Outotec, and as the company secures consents on its existing debt.

Metso Outotec is expected to seek a credit rating once the merger is completed.

The combined company had pro rata sales of €3.9bn in 2018, and around €4.2bn including the recently announced acquisition of Canada’s McCloskey by Metso.

Ahead of the completion of the transaction Metso is also expected to agree a new €200m RCF to be used by Neles for general corporate purposes.

FRANCE

DASSAULT NETS €4.45bn FOR MEDIDATA

Modelling and simulation software company DASSAULT SYSTEMES has mandated banks on a €4.45bn loan to back its US$5.8bn all-cash acquisition of US-based digital life sciences company Medidata.

loan, a €1bn term loan and a €450m revolving credit facility, which may be increased to €750m as part of the syndication of the loans.

Credit Agricole CIB, Goldman Sachs, MUFG and Societe Generale

Credit Agricole is facility agent.

through laddered bond tranches.The acquisition will also be funded

through around €1.3bn of existing cash.Dassault is targeting a strong investment-

grade rating and net debt to Ebitda of around 1.0 times across the investment cycle.

€18m for the last quarter of 2019 and €55m for 2020, descending progressively from there.

Dassault has agreed to acquire Medidata for US$92.25 per share. The acquisition is expected to close, subject to US and European regulatory approvals and shareholders’ approval, in the fourth quarter of 2019.

Medidata provides digital platforms for clinical development and trials, commercial and real-world data. The company had revenues of US$636m in 2018.

NETHERLANDS

OLAM AGREES EUROPEAN RCF

Singapore-headquartered agri-business OLAM

INTERNATIONAL’s European subsidiary OLAM

HOLDINGS BV has signed a US$375m 364-day revolving credit facility.

loan and other bilateral loans of Olam and its subsidiaries.

KfW IPEX-Bank, Erste, Intesa Sanpaolo, ABC International Bank, DZ Bank, Bank of Baroda, SMBC, Wells Fargo, UniCredit Bank, Habib Bank and AKA Ausfuhrkredit-Gesellschaft are providing the facility.

revolving credit facility in July 2017 comprising a US$400m 364-day facility, a US$300m two-year facility and a US$300m three-year facility.

LOUIS DREYFUS SIGNS SAMURAI LOAN

Agricultural merchant LOUIS DREYFUS has increased its three-year Samurai loan to ¥34.3bn (US$316m) from the original ¥30bn target.

LDC’s Swiss unit Louis Dreyfus Suisse is the borrower, which was heavily oversubscribed.

Mizuho Bank, MUFG and SMBC were mandated lead arrangers and bookrunners.

The loan will renew and increase a ¥12.5bn three-year borrowing from March 2016 via its Swiss unit. MUFG was the MLA.

LDC is looking to diversify its funding sources.

Louis Dreyfus Co Asia is in the market with a US$500m three-year sustainable revolving credit facility, which pays an interest margin of 90bp over Libor.

US$750m North American revolving credit facility, linking pricing on one of the company’s credit lines to sustainability

NORWAY

STOLT-NIELSEN AGREES REFI

Shipping company STOLT-NIELSEN has agreed

funds to repay Nordic bond debt maturing in September 2019 and April 2020 while maintaining a minimum US$200m of liquidity.

Stolt Tankers has agreed a US$420m loan secured by 21 chemical tankers while Stolt-Nielsen has received commitments on a new US$200m US private placement secured by the company’s New Orleans terminal.

US$150m balloon repayment on a US$200m bridge loan arranged in 2016 to back the company’s acquisition of the chemical tanker operations of Jo Tankers.

POLAND

GRUPA LOTOS BAGS US$500m LOAN

Oil company GRUPA LOTOS has agreed around

EMEA LOANS BOOKRUNNERS – FULLY




2 BNP Paribas 84 21,900.97 7.8

3 BAML 41 20,108.76 7.1

4 Deutsche Bank 51 14,226.95 5.0

5 UniCredit 67 13,243.40 4.7

6 SG 65 12,845.30 4.6

7 JP Morgan 43 11,826.54 4.2

8 Citigroup 46 10,722.64 3.8

9 Natixis 52 9,572.09 3.4

10 HSBC 50 9,424.61 3.3

Total 349 282,241.60

Proportional credit



back its 10+ investment programme which

output to 10.5m tonnes annually by 2012.

US$400m term loan and an around US$100m working capital facility. The money is available in euros, US dollars and

A bank syndicate comprising ING, Pekao, PKO BP, SMBC, Intesa Sanpaolo, Caixabank, ICBC and Erste

signed in June 2008 via bookrunners Bank

Royal Bank of Scotland and Societe Generale.

That deal comprised a US$975m facility, a US$200m working capital facility, a US$425m facility guaranteed by SACE, and a US$150m contingency loan.

optimise the structure and the repayment

the 10+ Program, as well as the exemption established by the previous agreement collaterals on the assets of Grupa Lotos.

SPAIN

ELECNOR AMENDS LOAN

Project engineering company ELECNOR has amended its €400m syndicated loan to include an Ecuadorian subsidiary as an additional borrower and create a sub-tranche that will be available in US dollars.

The amendment will help Elecnor tackle new projects within the oil and gas industry in Ecuador.

been added as an additional borrower.

and a €200m revolving credit facility.The revolving credit facility has been split

into two sub-tranches including a US$75m facility that is available to Elecnor and Elecdor.

The other sub-tranche, with a limit of €134m, is available only to Elecnor.

The amended deal was agreed with the group of 14 banks participating in the loan comprising facility agent Banco Santander with Bankia, Caixabank, Abanca, Banco Sabadell, Kutxabank, BBVA, Barclays, Societe Generale, Unicaja, Credit Agricole CIB, Bankoa, Banco Marocaine and Banco Cooperativo.

The loan was originally arranged in July 2014 for €600m from a group of 19 Spanish and international banks.

four times in 2015, 2016, 2017 and 2018 extending the maturity, reducing the costs

SWEDEN

HEXPOL BACKS BUY WITH LOAN

Polymers group HEXPOL is backing its US$232m acquisition of US-based Preferred Compounding with a new credit facility.

cash and bank facilities.Preferred Compounding had sales of

around US$240m in 2018 with around 540

one in Mexico.

employees, mainly in Asia and the US.

SWITZERLAND

CEMBRA TAPS FOR CASHGATE BUY

Consumer credit provider CEMBRA MONEY BANK is backing its acquisition of personal credit

bridge loan and a term loan arranged by Deutsche Bank.

Cembra is acquiring Cashgate for

company’s balance sheet liabilities of around SFr1.4bn.

Cembra aims to repay the bridge loan within 24 months through a SFr150m AT1 bond and the placing of treasury shares, as well as a balanced mix of increased deposits, senior bonds and ABS, and the issuance of a SFr250m convertible bond with net share and cash settlement features.

The acquisition will see Cembra increase

auto leases and loans by around SFr1.4bn to a total of around SFr6.2bn.

The acquisition is expected to close in the third quarter.

UAE

ETIHAD RAIL TO SEEK US$2bn

ETIHAD RAIL, the developer and operator of the United Arab Emirates’ national rail network, is expected to approach banks for about

network.

its rail project in 2016, plans to have a network with 1,200km of track costing about US$11bn, running from the border with Saudi Arabia to Fujairah on the Gulf of Oman.

The new debt is most likely be a corporate

Etihad Rail is 70% owned by the Abu Dhabi government and 30% by the UAE federal government.

built to transport granulated sulphur. The broader project aims to offer freight and passenger services across the country.

Etihad Rail suspended tendering for phase two of its project in 2016, saying it was reviewing timing and delivery.

package, provided by a consortium of banks including First Abu Dhabi Bank, Abu Dhabi

EMIRATES NBD HITS GENERAL SYNDICATION

State-owned bank EMIRATES NBD has launched its bullet term loan into general syndication

Mizuho Bank is the original mandated lead arranger, bookrunner and coordinator of

and partially pre-funded on May 2.The deal was earlier launched into senior

US$200m greenshoe option. Korea Development Bank and State Bank of India joined as MLABs, while Taishin International Bank joined as an MLA in the senior phase.

The loan is split into a three-year tranche

margins of 80bp and 110bp over Libor, respectively. Only tranche B is being offered in general syndication.

Banks have been invited to join as lead arrangers committing US$20m or more for a top-level all-in pricing of 116bp based on an upfront fee of 30bp. Arrangers with tickets of US$10m–$19m earn an all-in of 115bp based on a fee of 25bp.

were 88.33bp and 123bp for tranches A and B, respectively.

owns 55.76% of Emirates NBD, which is rated A2/A+ (Moody’s/Fitch).

UK

SYNTHOMER TAPS FOR OMNOVA

Listed chemicals company SYNTHOMER has agreed £1.3bn-equivalent of loans to back its US$824m acquisition of US-based polymers company Omnova Solutions.

The acquisition will also be backed with an up to £204m fully underwritten rights issue.

The new debt facilities include a £200m bridge term loan A and a €520m bridge term loan B.


LOANS EMEA

Synthomer does not expect to utilise the bridge term loan A after receiving the proceeds of the rights issue.

though bond issues or other forms of

comprising a US$260m term loan and a €460m multicurrency revolving credit facility.

Barclays, Citigroup, HSBC and Banco Santander are mandated lead arrangers and

agent.Synthomer’s shareholders will be asked to

approve an increase to its borrowing limits

acquisition, repay existing Omnova debt and provide headroom for future borrowing.

Leverage at completion will be around 2.5 times with the company targeting leverage of below 2.0 times by the end of 2021.

The acquisition is expected to close in late 2019 or early 2020.

CBRE TAKES BRIDGE LOAN

CBRE is

bridge loan from JP Morgan.CBRE does not intend to use the bridge

loan, which has been put in place to satisfy certain funding conditions for the takeover,

from existing cash and its revolving credit facility.

Pricing is based on a ratings-based grid. For A/A2 the margin is 75b over Libor; for A-/A3 it is 87.5bp; for BBB+/Baa1 it is 100bp; for BBB/Baa2 it is 115bp; and for BBB/Baa3 it is 125bp.

There is a closing fee of £270,000.JP Morgan is lead arranger, bookrunner

and administrative agent on the bridge loan.

RCF in October 2017.CBRE will use the acquisition of Telford to

internationally expand its real estate development business Trammel Crow.The acquisition is expected to close in the third quarter.

ENERGEAN NETS US$600m BRIDGE

Mediterranean-focused oil and gas company ENERGEAN OIL & GAS is backing its US$750m

Sonia benchmark makes loan market debut UK National Express loan is first under pilot scheme operated by NatWest

UK transport group NATIONAL EXPRESS has

tapped NatWest for the first corporate loan

referencing the sterling overnight index average

(Sonia) in a significant step as the market

transitions away from Libor to alternative risk

free rates (RFR).

Sonia loans are currently limited to bilateral

facilities, as banks are not yet ready to move

away from the current forward-looking rate of

three month Libor, and many borrowers are in

the early stages of adopting the new benchmark.

“We can’t syndicate loans until banks are

ready - it will require operational adjustments

and changing loan functions. We’ve seen a lot

of movement in the last 9-12 months because

banks need to be able to do it,” a senior banker

said.

National Express’ loan is the first bilateral

Sonia-linked loan under a pilot scheme

operated by NatWest. It uses a methodology

already seen in the sterling floating rate note

issuance market, which applies Sonia using daily

compounding, with a five-day reset lag to give a

more transparent, data-led benchmark.

The loan market has until the end of 2021

to move away from Libor benchmarks, which

are widely used to benchmark interest rates for

syndicated loans, bonds and derivative products

as well as intercompany loans and other types of

commercial contracts.

Libor rates fell into disrepute after banks were

found to be manipulating the rates, and were

subsequently fined billions of dollars. Regulators

have been pushing to replace Libor with

substitute rates based on actual transactions

that are less open to market abuses.

The UK’s Financial Conduct Authority

recently called for banks to accelerate the

transition way from loan products that use Libor

as a reference rate.

Although loan market participants favour a

Libor-like forward-looking term rate, developing

an acceptable term rate methodology free

from speculative elements is proving difficult.

The backward-looking Sonia rate has stolen

a march, despite potential issues for liquidity

management and loan back office functions.

“Financial markets have already seen an

initial shift towards Sonia as a reference rate,

such as the bond amendment recently carried

out by ASSOCIATED BRITISH PORTS,” Bhavin Shah,

head of Libor transition for commercial banking

at NatWest, said.

Last month, UK port operator ABP became the

first bond issuer to switch to a Sonia-based coupon

from a Libor-based coupon on an existing bond.

The £65m floating rate note due 2022 switched to

compounded daily Sonia from June 26. NatWest

was solicitation agent on that transaction.

NatWest’s pilot scheme, which offers large

corporate customers bilateral Sonia-linked

loans, is expected to be launched into the wider

market in the second half of 2019, after lessons

learned from the project are incorporated.

COMPLICATIONSThe first syndicated Sonia-based loan could

take some time, as banks will need to agree

on a market-wide acceptable benchmark and

also implement the new processes required for

different interest rate calculations.

“It’s one thing to have a Sonia-linked bilateral

loan, but quite another to have a widely

syndicated multicurrency revolving credit facility

with a large group of international banks,” a

senior banker said.

While some large companies with more

sophisticated financing processes may be able

to adapt to compounded rates, many borrowers

could find it extremely difficult to move to a

backward-looking rate.

Borrowers are used to a pre-determined,

forward-looking floating rate payment structure

which allows them to predict their funding costs

in advance. They will also have to adapt their

systems to accommodate a backward-looking

rate, which could prove costly and time-

consuming.

For lenders, Libor rates compensate banks

for making funds available in the longer term.

Although a compounded rate can give a term

rate, it is still based on the overnight rate and

does not reflect the increased risk of lending for

longer.

As the pricing, documentation and

administration of syndicated loans also currently

rely on forward looking term rates, banks need

to make significant operational changes to make

the transition.

Different risk free rates are being developed

for different currencies and are at varying stages

of development, which adds to the complexity of

the situation.

But whatever emerges, both borrowers

and banks will have their part to play in the

transition.

“The development of the Sonia lending

market not only requires financial institutions

to develop their products accordingly, but also

requires corporates to be innovative in their

approach and embrace Sonia-related change,”

Simon Jenkins, senior director, corporate

coverage at NatWest, said.

Alasdair Reilly


Production (Edison E&P) with a US$600m bridge loan.

Energean is acquiring Edison E&P for an initial US$750m with a potential US$100m contingent consideration payable

expected in 2022.The initial consideration and working

capital of the enlarged group will be funded through the bridge loan and an up to US$265m equity placing. Morgan Stanley has provided a standby underwriting agreement for the equity raise.

The bridge loan is expected to be replaced in the second half of 2019 using a combination of Energean’s existing reserve based facility (RBL) and/or corporate debt.

Energean amended and extended its US$180m RBL in January 2018.

The RBL includes US$105m with the European Bank for Reconstruction and Development and the Black Sea Trade and Development Bank as lenders paying 490bp over Libor; and a US$75m facility with the

Romania paying 300bp over Libor.The company signed a US$1.275bn senior

Edison E&P’s portfolio of assets includes

other balanced-risk exploration opportunities.

Energean is listed in London and Tel Aviv

and the Adriatic.

SOVEREIGN HOUSING GOES UNSECURED

Social housing provider SOVEREIGN HOUSING

ASSOCIATION has agreed a £250m three-year unsecured revolving credit facility, the

facilities in the housing association sector.

security through a potentially uncertain political and economic period while

decide the best time to tap the debt capital markets to raise long-term funding.

The lenders were led by NatWest with Lloyds Bank, MUFG, National Australia Bank and SMBC also participating.

Centrus negotiated the terms of the deal on Sovereign’s behalf.

Sovereign has secured a diverse range of funding to provide the necessary investment funds and maintain appropriate liquidity. This includes a mix of bond and

Bank.The association had total undrawn loans

of £370m at the end of March. The new unsecured facility has added considerably to Sovereign’s liquidity headroom as it looks to support its development programme including more land-led developments and building 1,900 new homes a year.

Sovereign, which provides over 57,000 affordable homes across the south and south

rated A2 by Moody’s and A+ by S&P.

NORTH AMERICA

UNITED STATES

HEALTHEQUITY TAPS FOR MERGER

Non-bank health savings company HEALTHEQUITY is backing its merger with savings

US$1.91bn of loans arranged by Wells Fargo Bank.

Along with cash on hand the loans will be

senior unsecured credit facilities and a US$300m bridge loan to unsecured bonds.

The senior unsecured facilities comprise a

(RCF) and a US$1.41bn seven-year term loan.The RCF pays 225bp over Libor with a

37.5bp commitment fee on undrawn funds, while the term loan pays 300bp.

There is also an accordion facility of up to US$300m.

The 12-month bridge pays 450bp over one-month Libor, increasing by 50bp every three months after closing.

before it matures, the bridge loan rolls over into an eight-year extended term loan.

rapidly through strong, predictable future

The merger is expected to close by the end of the year.

MARRIOTT AMENDS US$4.5bn RCF

MARRIOTT

INTERNATIONAL has amended and extended its existing multicurrency revolving credit

US$4.5bn from US$4bn.

originally arranged in June 2016, has also been extended to June 28 2024 from June 10 2021.

100bp over Libor plus a facility fee of 15bp for Marriott’s current BBB/Baa2 credit rating, varying according.

For A-/A3 the margin is 78.5bp over Libor and the facility fee is 9bp; for BBB+/Baa1 it is 90bp and 10bp; for BBB/Baa2 it is 100bp and 15bp; for BBB-/Baa3 it is 107.5bp and 17.5bp; and for lower than BBB-/Baa3 or not rated it is 140bp and 22.5bp.

Bank of America Merrill Lynch, JP Morgan, Deutsche Bank and Wells Fargo are joint bookrunners, alongside Bank of Nova Scotia, Citigroup and US Bank as joint lead arrangers.

BAML is administrative agent while JP Morgan, Deutsche Bank and Wells Fargo are syndication agents.

Bank of Nova Scotia, Citigroup, US Bank, Fifth Third Bank, Goldman Sachs, HSBC, SunTrust Bank and ICBC are documentation agents.

Bank of New York Mellon, Capital One, PNC Bank, TD Bank, UniCredit and Bank of China are managing agents, while First Hawaiian Bank, Northern Trust Co, Banco Santander, Standard Chartered Bank, ANZ, Bank of Hawaii, ICICI Bank

AMERICAS LOANS BOOKRUNNERS – FULLY



1 JP Morgan 516 170,442.00 13.1

2 BAML 547 164,421.42 12.6

3 Wells Fargo 436 113,226.69 8.7

4 Citigroup 282 99,756.77 7.7

5 MUFG 154 57,733.45 4.4

6 RBC 157 49,001.28 3.8

7 Barclays 177 48,215.85 3.7

8 Scotiabank 127 35,096.46 2.7

9 BMO 201 34,147.91 2.6

10 TD Securities 124 33,116.98 2.5

Total 2,151 1,302,505.46

Proportional credit


US AND CANADA LOANS BOOKRUNNERS –

FULLY SYNDICATED VOLUMEBOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 508 168,450.80 13.2

2 BAML 542 163,423.79 12.8

3 Wells Fargo 436 113,226.69 8.8

4 Citigroup 267 96,797.80 7.6

5 MUFG 151 57,064.05 4.5

6 RBC 157 49,001.28 3.8

7 Barclays 177 48,215.85 3.8

8 BMO 201 34,147.91 2.7

9 Scotiabank 115 33,177.66 2.6

10 TD Securities 124 33,116.98 2.6

Total 2,098 1,280,210.44

Proportional credit



LOANS LATIN AMERICA

and Standard Bank of South Africa also participated.

HERSHEY WRAPS US$1.5bn REFI

Candy maker HERSHEY has signed a US$1.5bn

to mature in November 2020.

corporate purposes, includes an option to increase borrowings by an additional US$500m.

The loan pays a margin and facility fee based on ratings.

For AA/Aa2 the margin is 41bp over Libor and the facility fee is 4bp; for AA-/Aa3 it is 45bp and 4.5bp; for A+/A1 it is 57.5bp and 5bp; for A/A2 it is 68bp and 7bp; and for A-/A3 it is 79.5bp and 8bp.

Administrative agent Bank of America Merrill Lynch along with syndication agents JP Morgan, Citigroup and PNC Bank, and documentation agent Royal Bank of Canada were joint lead arrangers and joint book managers, each committing US$208m.

US Bank committing US$125m, Santander Bank committing US$105m, CIBC committing US$80m, Northern Trust committing US$65m, Bank of China committing US$60m and Banco Bradesco committing US$25m, also participated.

originally agreed in October 2011 for US$1.1bn with the option to increase borrowings by an additional US$400m.

November 2013 and extended with the option to increase the facility remaining in place.

The facility was subsequently extended out to November 2020 and increased to US$1.4bn.

facility in January 2018 via Citigroup, BAML

was for general corporate purposes and acquisitions.

CASTLETON COMMODITIES WRAPS REFI

Global commodity merchant CASTLETON

COMMODITIES INTERNATIONAL has closed credit

maturing borrowing base and revolving credit facility signed in July 2018.

corporate purposes and provide letters of credit for Castleton’s merchanting activities in multiple countries, includes a borrowing base facility and a US$375m unsecured RCF.

The borrowing base comprises a US$750m three-year tranche, a US$1.15bn two-year tranche and a US$500m 364-day

tranche. The borrowing base also includes a US$1bn accordion facility.

US$4bn in total commitments from a diverse group of 24 banks from 12

BNP Paribas was global coordinator and administrative agent for the borrowing base facility while Citigroup was administrative agent for the RCF.

BNP Paribas, Societe Generale, MUFG, ABN AMRO, Citigroup, Rabobank, Natixis and Credit Agricole CIB were joint lead arrangers and

ING and Standard Chartered Bank were senior managing agents.

Last year’s deal included a US$3.15bn borrowing base facility comprising a US$1.15bn three-year tranche and a US$2bn 364-day tranche. The facility includes a US$1bn accordion facility available to support future growth.

There was also a US$375m 364-day revolving credit facility.

PERFORMANCE FOOD LINES UP LOAN

Catering supplier PERFORMANCE FOOD GROUP is lining up US$2.06bn of loans to back its US$2bn acquisition of Reinhart Foodservice.

unsecured bridge loan, and up to US$600m of additional term loans and junior term loans raised under the company’s US$1.95bn asset-based revolving credit facility.

Credit Suisse and Wells Fargo are initially

PFG will issue new senior unsecured bonds and equity of US$300m-$400m, subject to market conditions.

The acquisition is valued at US$2bn, or around US$1.7bn net of an estimated tax

Reinhart is the second largest privately held foodservice distributor in the US with annual net sales of more than US$6bn. After the acquisition, PFG will be one of the largest distributors in the US with net sales of around US$30bn.

BUNGE WRAPS US$375m REFI

Global agribusiness and food company BUNGE

maturing in December.Mizuho Bank, MUFG and SMBC were

mandated lead arrangers and bookrunners of the deal.

The loan is split into a ¥30.7bn (US$285m) tranche and a US$90m tranche, which pay interest margins of around 80bp and 120bp

over yen and dollar Libor, respectively, unchanged from the previous deal.

The borrower’s debut loan in Japan was a

2014. SMBC was the MLA.

credit via subsidiary Bunge Ltd Finance Corp, which paid a margin of 125bp over Libor and a 12.5bp commitment fee based on the company’s BBB rating by S&P.

LATIN AMERICA

MEXICO

PEMEX ALLOCATES US$8bn LOAN

Oil producer PEMEX has allocated an US$8bn syndicated loan among 23 banks.

split into a US$2.5bn term loan and a US$5.5bn revolving credit facility.

Pricing is set at 235bp over Libor.Fitch cut Pemex’s credit rating a notch to

BB+ on June 6 after lowering its sovereign parent Mexico to BBB from BBB+. A similar move from Moody’s or S&P would trigger a clause in the new loan facility that increases the pricing to 300bp over Libor.

Lead bookrunners JP Morgan, HSBC and Mizuho underwrote the facility but after syndication the trio hold approximately US$333m apiece.

BBVA, BNP Paribas, MUFG and SMBC committed US$550m each as joint bookrunners, while Credit Agricole joined as a senior mandated lead arranger with a US$475m ticket.

Bank of America Merrill Lynch, Bank of China, Natixis and Santander lent US$375m each as MLAs.

Three banks – Barclays, Scotiabank and Societe Generale – are lead arrangers with US$250m tickets and Citibanamex committed US$230m as a lead arranger.

Goldman Sachs is the sole bank at arranger level and provided US$175m to the

Manager level saw the Industrial and Commercial Bank of China commit US$150m, Morgan Stanley came in with US$125m while Banorte and ING contributed US$100m as managers.

Chile’s Banco de Credito e Inversiones and DZ Bank round out the syndicate with US$50m participant tickets.

Lenders that joined the syndicate as bookrunners will pick up 100bp in fees, MLAs snare 85bp, lead arrangers get 70bp


while arrangers and managers pick up 62.5bp and 55bp in fees, respectively.

The state-owned oil producer, saddled with roughly US$106bn in debt, has been in talks with lenders for approximately six months

Pemex has a US$1.5bn revolving credit facility maturing in November this year that paid 185bp over Libor in November 2016

signed in January 2015.

AMERICA MOVIL PICKS BANKS

Telecommunications company AMERICA MOVIL

revolving credit facility maturing in August.Intesa Sanpaolo, BBVA, BNP Paribas,

Santander and Citigroup year loan.

America Movil, owned by Mexican billionaire Carlos Slim, is rated A3/A-/A-.

2014.

LEVERAGED LOANS

UNITED STATES

PRESS GANEY EYES US$1.25bn LOAN

PRESS GANEY

HOLDINGS is eyeing a potential US$1.25bn

Management and Leonard Green & Partners.

amortise at 1% per year with a bullet payment at the maturity of the loan.

US$453m in second-lien notes that will be privately placed and a US$250m revolving credit facility.

Barclays, Citigroup, Goldman Sachs, JP Morgan, BMO Capital Markets and Deutsche Bank are arranging the transaction.

A bank meeting is scheduled for Tuesday.SNAPAV has scheduled a bank meeting on

Wednesday to discuss a US$390m

UBS manufacturer and distributor of audio-video, networking, structured wiring and surveillance products.

INSURITY will tap the market on Tuesday with a US$570m credit facility backing the insurance data management and analysis

Jefferies and Bank of America Merrill Lynch lead the deal.

The acquisition funding comprises a

US$160m eight-year second-lien term loan.

101 soft call protection for six months.The second-lien tranche will be privately

placed.

LOPAREX TO LAUNCH US$600m DEAL

LOPAREX INTERNATIONAL, a global manufacturer

meeting on Wednesday to launch US$600m in funding for the company’s sale to Pamplona Capital Management.

Jefferies, Barclays and Nomura provided debt commitments and will act as bookrunners on the transaction.

year revolver, a US$390m seven-year

year second-lien term loan.Last month, Loparex began meeting with

lien loans ahead of launching the deal broadly.

Pamplona is acquiring the company from

agreed to invest in Loparex alongside members of the company’s leadership team.

Loparex following the transaction.Packaging materials company PREGIS is

Warburg Pincus.Credit Suisse is leading the transaction.

Barclays, Deutsche Bank, Morgan Stanley and UBS are arrangers.

A bank meeting will be held on Tuesday.

accompanied by a US$215m second-lien term loan that will be placed privately and a US$125m revolving credit facility.

come with a seven-year maturity and 101 soft call protection for six months.

WHATABURGER is tapping the loan market for a US$1.53bn debt

Capital Partners.

revolving credit facility.Morgan Stanley, UBS and Credit Suisse are

arranging the transaction.A lender presentation is scheduled for

Tuesday.ADVISOR GROUP has scheduled a bank

meeting on Thursday for a US$1.25bn Term Loan B.

UBS Advisor Group is a network of

NUVEI SEALS US$619m TL

Payment technology company NUVEI

TECHNOLOGIES CORP

US$619m Term Loan B that it will use to

soft call protection for 12 months.

per year.

comprises a US$225m second-lien term loan and a US$50m revolving credit facility.

The second-lien term loan is priced at

issue discount and 102, 101 hard call protection.

September 2025 and the second-lien loan is due in September 2026.

BMO Capital Markets, Antares and Capital One arranged the transaction.

term loan is rated B2/B- and the second-lien is rated Caa2/CCC.

Montreal-based Nuvei announced an all-cash offer to acquire SafeCharge shares for approximately US$889m.

S&P said in a June 14 report that initial pro forma leverage is estimated to be in the low-to-mid 8.0 times area.

Novacap and Canadian pension fund Caisse de depot et placement du Quebec are sponsors on the transaction.

Plastics packaging maker CONSOLIDATED

CONTAINER COMPANY

incremental term loan that will back its acquisition of Tri State Distribution.

The senior secured incremental term loan priced at 350bp over Libor, from guidance of

were unchanged.

is subject to 101 soft call protection for six months.

US LEVERAGED LOANS BOOKRUNNERS: 1/1/2019–30/6/2019


1 BAML 277 49,976.38 11.6

2 Wells Fargo 213 44,030.18 10.2

3 JP Morgan 251 42,646.61 9.9

4 Citigroup 111 22,086.08 5.1

5 Barclays 104 20,045.06 4.7

6 Goldman Sachs 98 16,902.59 3.9

7 Credit Suisse 84 15,797.77 3.7

8 Deutsche Bank 96 15,713.50 3.7

9 RBC 68 12,776.87 3.0

10 PNC Financial Services 92 12,592.66 2.9

Total 1,063 429,631.90

Excluding Project Finance.

Source: Refinitiv SDC code: P2


LOANS LEVERAGED LOANS

The seven-year loan will amortise at 1% per year, with a bullet payment at maturity.

Consolidated Container’s incremental term loan is split into either a free-and-clear basket that would be greater than US$130m

lien incremental ratio basket that is beyond the free-and-clear cap, but subject to the pro

exceeding 4.6 times.The most-favoured nation clause is set at

50bp with a 12 month sunset.Consolidated Container and the

incremental term loan are rated B+ by S&P and B2 by Moody’s.

Citigroup was lead-left on the transaction and Wells Fargo was a joint lead arranger. Barclays is administrative agent.

ELECTRONICS FOR IMAGING PRICES WIDE

Digital printing services company ELECTRONICS FOR IMAGING priced a US$875m Term Loan B wide to initial price guidance.

six months.

tranche at 475bp–500bp over Libor with

forced lead arrangers to take a hit on the

demand.

eight-year second-lien loan that was priced

and 102, 101 hard call protection.

This tranche was also revised from guidance

RBC KKR leads the second-lien term loan.

Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, Macquarie and Societe Generale are arrangers.

Proceeds will back the company’s

the second-lien term loan is rated Caa2/CCC+.S&P said in a June 17 report that its B–

than 10 times, integration risks from its cost-saving plan and the view that revenues are likely to decline during a downturn due to the company’s reliance on capital spending.

The ratings agency projects leverage will fall to the mid-to-high 7.0 times area by year-end 2020.

CVC, Ares target loans with billion dollar distressed funds

US Fund managers betting more leveraged loan borrowers will struggle to refinance

Global asset managers CVC Capital Partners

and Ares Management each raised more than a

billion dollars in June for respective distressed

investment funds, an indication that portfolio

managers are readying capital to pick up shaky

leveraged loans cheaply in the secondary market

when the economic cycle turns.

Fund managers wary of increasing corporate

debt levels are betting more leveraged loan

borrowers will struggle to refinance debt in

coming years as global growth slows and high

interest costs strain liquidity for companies

left with outstanding term loans trading at

distressed levels.

“Ratings downgrades are increasing in the US

and this impacts highly leveraged companies.

GSS II will enable us to take advantage of that

development and invest in the debt of some

of those distressed companies,” said Mark

DeNatale, global head of special situations at

CVC, which raised US$1.42bn in capital for its

Global Special Situations Fund II (GSS II) in June.

“Banks are continuing to reduce their risk

exposure by deleveraging and we see value

investing in distressed credit opportunities in the

US and Europe.”

Accommodative credit conditions in recent years

have enabled borrowers to tack on cheap debt

thanks to low interest rates and insatiable investor

appetite for floating-rate debt instruments.

But a dovish interest rate policy and

aggressive term loan language has investors

pushing back on leveraged loans and

underwriters are already feeling the pinch,

having offered a slew of transactions in June at

higher spreads over Libor and steeper discounts

to obtain sufficient investor demand.

“Having this uncertain backdrop provides

opportunities for distressed players,” a US credit

investor said. “And from a secondary perspective,

there is a chance to pick up yield and engage in

transactions that may have been mispriced.”

AHEAD OF THE GAME

CVC snared capital commitments for its second

special situations fund in just eight months. The

target capital raise was US$1bn, but demand

enabled CVC to pull in US$1.42bn, almost

double the size of the first distressed investment

vehicle, a US$726m fund raised in June 2016.

Ares, which manages US$125bn of assets

globally, roped in more than US$1bn in capital

commitments for its own special situations fund,

and could increase the size of the fund to as

much as US$2bn within the next 12 months.

“Whether it’s a year, or two years from now,

everybody expects a recession or some kind of

slowdown, so these distressed firms are getting

ready for that” said Lawrence Chu, a managing

director at Moelis & Company, an independent

investment bank and advisory services firm.

This sentiment is echoed by the majority of

lenders in the US, according to the 2019 Loan

Market Survey from FTI Consulting released in

June. Approximately 78% of respondents from

bank and non-bank lenders expect the number

of loans managed by their workout groups, a

department that handles a financial institution’s

troubled loans, to increase over the next year,

the survey found.

Energy companies, hampered by slumping

oil prices, and retail borrowers, adjusting to a

shift in consumer spending habits, are expected

to face the most duress. Fitch Ratings forecasts

a 10% default rate for energy credits in 2020

due to large-scale defaults effecting a US$45bn

universe of debt.

Retail makes up 29% of the ratings agency’s

outstanding Tier Two Loans of Concern, the

most of any sector, and includes luxury store

NEIMAN MARCUS and pet retailer PETSMART,

which both restructured their debt earlier this

year.

Despite the warning signs, private equity

shops are flush with dry powder and demand

for leveraged loans is expected to remain strong

through 2019, according to FTI Consulting.

Covenant-lite term loans, which made up

more than 75% of institutional loan volume

in 2018, are the debt instrument of choice for

corporate borrowers. The absence of financial

covenants strips away lender protections and

allows companies, and sponsors, more control in

deteriorating financial situations.

“With leveraged loan default activity so low,

it’s too soon to render judgment on covenant-lite

provisions on loan recoveries,” said Mark Laber,

a senior managing director at FTI and author of

its loan survey.

Projected default rates for institutional

leveraged term loans are expected to reach 2%

by the end of 2020, however, higher than the

forecast 1.5% for 2019, Fitch said in a June 27

report.

Aaron Weinman



NESTLE SKIN HEALTH LAUNCHES

NESTLE

SFr5.4bn-equivalent (US$5.5bn) jumbo

(US$2.53bn) US dollar-denominated seven-year

loan.

between 400bp-425bp over Libor/Euribor,

for six months.

is 99 while the euro-equivalent loan is guided at 99.5.

The debt also comprises a SFr945m dollar-equivalent second-lien term loan and a SFr405m euro-equivalent second-lien term loan. Both will be privately placed.

out with a SFr500m revolving credit facility.Deutsche Bank is the left bookrunner for

the euro tranches, while Credit Suisse is the left bookrunner for US dollar tranches.

Goldman Sachs, Barclays, Bank of America Merrill Lynch, RBC and Mizuho are the other bookrunners. Credit Agricole, Jefferies and UBS are MLAs.

The new buyout deal is expected to be welcomed by loan investors amid thin loan supply so far this year.

its skin health business to the consortium for SFr10.2bn (US$10.5bn). At more than US$10bn, it is one of the largest private equity-backed M&A deals in Europe. The

Nobel’s chemicals business by Carlyle and

from rival buyout funds and some industry players including a consortium of Advent

Partners. Carlyle had also been looking at the medical business.

of SFr2.805bn and adjusted Ebitda of SFr563m.

PRICING EMERGES ON HOUSE OF HR

Pricing has emerged on a €650m loan

HOUSE OF HR.A €550m, seven-year covenant-lite Term

Loan B is guided to pay 425bp over Euribor,

with 101 soft-call protection for six months.A €100m, 6.5-year revolving credit facility

JP Morgan and ING are bookrunners, alongside mandated lead arranger KBC.

Proceeds from the loan, alongside a €320m senior secured bond, will be used to

reduction and for general corporate purposes including acquisitions.

The issuer last tapped the loan market in 2017 when it agreed a €680m leveraged loan, comprising a €600m seven-year covenant-lite Term Loan B and an €80m 6.5-year revolving credit facility.

That term loan priced at 425bp over Euribor, while the RCF priced at 300bp over Euribor.

SOCOTEC OUTLINES PRICING

French technical and inspection services provider SOCOTEC has detailed price guidance on its dual-currency add-on loans.

A €150m Term Loan B is guided at 375bp

99.5-100, while a US$190m term loan is

The covenant-lite deal will mature in July 2024, the same as the existing Term Loan B.

BNP Paribas is global coordinator, bookrunner and agent. Deutsche Bank is bookrunner.

existing debt.Socotec secured a €75m add-on loan last

year to repay drawings from the company’s revolving credit facility.

TERREAL SHOPS €285m LOAN

TERREAL has launched a €285m Term Loan B

The seven-year loan is guided at 500bp-

Goldman Sachs is the sole physical bookrunner.

existing Term Loan B, partly repay accrued Class A1 bond interest and pay transaction related fees and expenses.

Pro forma for the transaction, Terreal will have senior net leverage of 3.4 times based on adjusted Ebitda of €75.5m for the 12 months ended March 2019.

structure and cladding and decoration.

AVS SEEKS €375m FINANCING

AVS GROUP has launched a €375m loan to back

The deal comprises a €300m seven-year Term Loan B and a €75m 6.5-year revolving credit facility.

The term loan is guided at 400bp-425bp

Goldman Sachs is sole global coordinator and joint bookrunner. UniCredit is joint bookrunner and also agent.

existing net debt.Fero was established in 2001 by the

ALBEA SEEKS €65m ADD-ON

French cosmetics packaging company ALBEA has launched a €65m add-on to fund an acquisition.

The fungible covenant-lite term loan will offer 325bp over Euribor, the same as the

existing term loan B.

EUROPEAN LEVERAGED LOANSBOOKRUNNERS: 1/1/2019–30/6/2019



1 JP Morgan 25 5,242.71 8.1


3 Goldman Sachs 24 4,751.12 7.3

4 BNP Paribas 26 4,319.30 6.6

5 Barclays 21 3,543.83 5.4

6 Deutsche Bank 24 3,305.30 5.1

7 Natixis 20 2,902.81 4.5

8 SG 14 2,507.28 3.9

9 HSBC 16 2,458.34 3.8

10 ING 20 2,146.37 3.3

Total 96 65,041.78

Excluding project finance. Western Europe only included.


EMEA SPONSORED LOAN BOOKRUNNERS BOOKRUNNERS: 1/1/2019–30/6/2019

Europe, Middle East, Africa




2 Deutsche Bank 24 3,330.25 9.0

3 JP Morgan 16 2,927.52 7.9

4 Goldman Sachs 16 2,244.50 6.1

5 Natixis 17 2,107.80 5.7

6 BNP Paribas 17 1,981.94 5.4

7 SG 11 1,625.36 4.4

8 Credit Suisse 9 1,440.04 3.9

9 ING 9 1,288.48 3.5

10 BAML 9 1,217.47 3.3

Total 61 36,876.29

Excluding project finance.




BNP Paribas is the sole physical bookrunner and admin agent. Credit Suisse is bookrunner.

The issue ratings are expected to be B2/B, while corporate family ratings are expected to be B2/B.

Albea secured a €385m term loan

Partners’ acquisition of the company in 2017.

acquire the packaging company from Sun

Capital but then opted to bid alone in a deal that valued the French company at about US$1.5bn.

Albea issued €150m of pay-if-you-can notes in February 2018 for the acquisition.

Albea, formerly known as Alcan Packaging Beauty, has grown strongly since its buyout by Sun in 2010, helped by a series of acquisitions such as that of Rexam Personal Care in 2012.

The group employs around 15,000 people with 40 manufacturing sites across Europe, North and South America, Africa, China and Asia.

JPJ CLOSES £175m ADD-ON

Online bingo operator JPJ GROUP, previously Jackpotjoy, has closed syndication of a euro-equivalent £175m (€196m) add-on term loan backing its around £490m acquisition of gaming software company Gamesys.

from the existing lender group.The new term loan is fungible with JPJ’s

existing €140m term loan, which matures in December 2024, and pays 425bp over

Existing lenders Macquarie and Nomura led the add-on loan, which priced at par.

JPJ will also use its existing debt facilities to fund the £250m cash consideration,

through the issuance of 33.7 million of new shares, representing around £240m or 31% of the enlarged group.

The acquisition represents an estimated multiple of 7.3 times adjusted Ebitda for Gamesys for the 12 months ending December 2018.

After the acquisition the merged company will be renamed Gamesys Group plc. The acquisition excludes Gamesys’s sports brands and games.

The acquisition, which comes four years after Gamesys sold Jackpotjoy and Starspins

the third quarter.

place in December 2017, comprises a €140m seven-year term loan, a £250m seven-year term loan and a £13.5m six-year revolving credit facility.

The euro term loan paid an initial margin of 425bp over Euribor with step-downs of 25bp to a minimum of 350bp based on a reduction of leverage and ratings.

The sterling term loan paid an initial 525bp over Libor with step-downs of 25bp to a minimum of 450bp based on a reduction of leverage and ratings.

Merlin buyout backed with £3.8bn of loans UK PE firms going to public market to hunt M&A targets

The £5.91bn acquisition of UK theme park and

attraction operator MERLIN ENTERTAINMENTS

by an investment vehicle of Lego’s founding

family and private equity firm Blackstone is

being backed by a loan financing arranged by

Bank of America Merrill Lynch and Deutsche Bank.

The £3.8bn-equivalent of loans include

a seven-year Term Loan B1, comprising a

euro-equivalent £562m tranche and a US

dollar-equivalent £925m tranche, paying an

initial 375bp over Euribor and 350bp over Libor,

respectively.

There is a seven-year Term Loan B2,

comprising a €770m tranche and a US$420m

tranche with the same pricing as the Term

Loan B1.

Pricing on the Term Loan B facilities has three

25bp step-downs for each 0.25 times reduction

in first lien net leverage below 4.9 times.

There is a one-year bridge loan comprising

two £392.5m-equivalent tranches in euros

and US dollars paying 650bp over Euribor and

562.5bp Libor, respectively. On maturity, any

outstanding bridge loan will term out into an

eight-year unsecured term loan.

A £400m 6.5-year multicurrency revolving

credit facility pays an initial 300bp over Libor

with a commitment fee of 30% of the applicable

margin on undrawn amounts. Pricing on the RCF

has four 25bp step-downs for each 0.25 times

reduction in first lien net leverage below 4.9

times.

There is also a US$172.5m seven-year

delayed draw term loan paying an initial 350bp

over Libor with a commitment fee of 50%

of the applicable margin on undrawn amounts.

The margin has the same ratchet as the Term

Loan B.

There is a 0% floor.

BAML and Deutsche Bank are initially

providing interim facilities on an equal basis, the

interim financing must be repaid 75 days after

the first drawdown. Deutsche Bank is interim

facility agent.

INVESTMENT NEEDEDMadame Tussauds owner Merlin, which listed in

2013, operates Legoland theme parks around

the world and Alton Towers Theme park in

Britain. Last month, activist investor ValueAct

Capital urged Merlin to take itself private given

the level of investment needed in the firm.

After the completion of the buyout, Kirkbi,

the private investment company of Lego’s Kirk

Kristiansen family, will own 50% of Merlin, while

Blackstone and Canadian pension fund CPPIB

will own the rest.

The consortium has offered Merlin

shareholders 455 pence per share, representing

a 15.2% premium to 395 pence closing price on

June 27.

The £3.81bn-equivalent debt financing

represents over 7 times of Merlin’s 2018

underlying Ebitda of £494m.

On Thursday, Moody’s said the company’s

Ba2 rating is at risk from an expected increase in

leverage from the buyout.

Merlin’s debt levels are around £1.3bn,

according to Moody’s. The ratings agency

expects the acquisition debt to increase Merlin’s

leverage “well above” the downgrade trigger of

5 times - from 3.9 times in 2018.

“Moody’s expects it to be difficult for the

company to achieve significant Ebitda growth in

2019 because of strong year-earlier comparables

and rising payroll expenses,” analysts wrote.

As a result, Moody’s expects the group

deleveraging pace to be lower and to only start in

2020.

This is the latest public-to-private deal after

British private equity firm TDR Capital

announced its £1.91bn acquisition of car

auctioneer BCA MARKETPLACE late last month.

TDR has secured £1.387bn financing to back the

offer.

Going to the public market to hunt for M&A

targets has become a theme for private equity

sponsors this year. These deals are expected to

be welcomed by loans investors who are eager

to invest in new names amid thin loan supply

this year.

Alasdair Reilly


The RCF paid an initial margin of 425bp over Libor/Euribor with step-downs of 50bp to a minimum of 325bp based on a reduction of leverage.

AREAS REVISES TERMS

Transport hub catering operator AREAS

WORLDWIDE has revised terms on a €1.325bn

An €200m-equivalent US dollar-denominated tranche has been removed and a €200m has been added to a €850m tranche to keep the seven-year Term Loan B

The €1.05bn term loan priced at 475bp over Euribor, 50bp higher than 425bp

Pricing guidance on the now removed US-dollar tranche had been increased to 500bp over Libor from 450bp-475bp, with a 0%

Apart from the term loans, the deal also includes a €125m 6.5-year revolving credit facility and a €150m seven-year acquisition and capex facility.

The deal includes 101 soft call protection for 12 months.

Corporate ratings are B1/B.BNP Paribas, Credit Agricole, Deutsche Bank

and Morgan Stanley are physical bookrunners, while Bank of America Merrill Lynch is passive bookrunner.

Proceeds will be used to fund the

submitted a binding offer for the purchase of Areas from France’s Elior Group in April.

Areas operates railway and motorway catering services in 13 countries throughout Europe, the US, Mexico and Chile, serving 340m customers a year in 1,900 restaurants and points of sale.

DRT SHOPS €60m ADD-ON

French plant-based ingredients producer DRT is in the market with a €60m incremental Term Loan B.

The margin will be the same as its existing €455m Term Loan B, which paid 475bp over Euribor and will mature in

BNP Paribas is leading the deal.Alongside €65m of factoring proceeds, the

incremental TLB will fund the €125m dividend recap on the back of a strong

by Ardian.Ardian agreed to buy a majority stake in Les

Derives Resiniques et Terpeniques in 2017, in a deal valuing the business at around €1bn.

DRT recorded a double digit growth in net sales and Ebitda in 2018 and it de-leveraged

to 4.9 times as end of April 2019 from 5.6 times at the closing of the acquisition by Ardian.

when it secured a €455m buyout Term Loan B which priced at 475bp over Euribor with

€100m RCF maturing in March 2024 that priced at 325bp over Euribor.

DRT’s core business is the development of gum rosin and turpentine extracted from pine resin. Materials made from these extractions include paint, rubber, adhesives and chewing gum.

IGM REVISES PRICING

IGM RESINS, a Dutch manufacturer of materials for coatings, inks and adhesives, has revised pricing on a €325m loan.

Pricing on a €260m Term Loan B and a

at 425bp over Euribor, the tight end of 425bp-450bp initial guidance, with a 0%

The Term Loan B that will reprice an existing facility and the new add-on loan

lien facility were issued at par. The TLB

launch.The maturity on both loans is June 2025,

unchanged from the existing TLB.Corporate ratings are expected to be B by

Goldman Sachs, Rabobank and ING were mandated lead arrangers and joint physical bookrunners on the transaction.

Capital Partners in May 2018.

IMAGINA SEEKS AMENDMENT

Spanish sports media group IMAGINA is requesting an amendment.

Deutsche Bank, Citi and Goldman Sachs are leading the amendment request.

the business, in June 2018 after a lengthy syndication period that saw the deal postponed and its capital structure revised.

That deal comprised a €380m seven-year Term Loan B, a €300m six-year amortising Term Loan A, a pre-placed €180m second-lien facility and a €60m revolving credit facility.

Final pricing on the Term Loan B was set

Term Loan A came at 400bp over Euribor at

The pre-placed €180m second-lien loan was priced at 750bp over Euribor.

Deutsche Bank, Citigroup and Goldman Sachs also led that deal which had initially launched with a €660m Term Loan B and a smaller €200m Term Loan A before Easter.

STARK ALLOCATES €300m TL

Lone Star’s Nordic building materials business STARK GROUP has allocated a €300m term loan B to fund the acquisition of German builders merchant Saint-Gobain Building Distribution Deutschland from French company Saint-Gobain.

The term loan priced at 425bp, the high end of 400bp-425bp initial guidance, with a

which includes 101 soft-call for six months, can be extended to seven years.

Credit Suisse led the loan, alongside Danske Bank, NatWest, Citigroup, Nykredit and JP Morgan.

Proceeds will also be used to partially repay FRNs and fund cash on balance sheet.

Stark won an auction process to acquire SGBDD for around €335m. Goldman Sachs led the sale of the unit, which had net sales of €2bn and €48m adjusted Ebitda in the 12 months to the end of April.

Saint-Gobain put SGBDD on the block in November as part of a plan to sell non-core businesses with total revenues of €3bn under a strategic overhaul overseen by new

Stark, with around 4,600 full-time employees, had total sales of around €2.2bn

Ebitda of €101m.

RESTRUCTURING

UNITED STATES

MONITRONICS CHARTS DIP LOAN

Security company MONITRONICS INTERNATIONAL obtained commitments for a US$245m debtor-in-possession loan after the company

Chapter 11 of the US Bankruptcy law.The US$245m super-priority loan will be

Bankruptcy Court for the Southern District

Encina Private Credit is administrative agent, swingline lender and letter of credit



revolving credit facility and a US$150m term loan.

Monitronics presently has about US$1.84bn in funded debt obligations. This comprises US$1.073bn in outstanding principal on a term loan facility, US$181.4m outstanding principal on a revolving credit facility and US$585m in bond debt. The rest includes roughly US$131,000 in outstanding interest on its revolving credit facility, US$15.5m in outstanding interest on its term loan and common stock.

cut approximately US$885m in debt. Monitronics said last Monday its plan was supported by 91% of the company’s term loan holders and roughly 81% of its bondholders.

About US$685m of pre-bankruptcy debt will be converted to equity, including up to US$585m in aggregate principal on the company’s bond and loan. Monitronics is also slated to receive US$177m from an equity rights offering and US$23m from parent company Ascent.


STEINHOFF CREDITORS EXTEND CVAS

Creditors to South African retailer STEINHOFF

INTERNATIONAL HOLDINGS have agreed to extend the long stop date of the company voluntary arrangements for its subsidiaries Steinhoff Europe (SEAG) and Steinhoff Financial

€9.6bn of debt, announced that creditors to

restructuring using the CVAs. SEAG has

As a consequence of extending the CVA long stop, the lock-up agreement relating to the debt restructuring has also been extended to the same date.

restructuring documents have also been agreed to accommodate the commencement of an internal reorganisation within SEAG before the restructuring closes. This reorganisation has to take place before the debt restructuring can complete.

Once this has been done, and a waiver has been put in place relating to certain tax issues in Australia, Steinhoff says the restructuring should close within 20 working days.

On June 19, the company launched proceedings against former CEO Markus Jooste and former CFO Ben La Grange in the

salary and bonus payments paid to them prior to 2017.

Steinhoff also said it received summons

against the retailer and others “for declaratory relief relating to currently

wrongful acts”.Steinhoff is undergoing a restructuring of

its debt following the discovery of accounting irregularities in December 2017 that triggered an 85% share price slide in the group.

IFA ROTORION AGREES PLAN

German distressed automotive supplier IFA

ROTORION has agreed a restructuring plan with its banks and holders of its €140m Schuldscheindarlehen.

The restructuring plan is guaranteed by restructuring loans from participating banks and SSD holders as well as a new line of credit providing the company with fresh liquidity.

The claims of the main creditors are protected by a comprehensive collateral package.

As part of the restructuring, former

transferred his company shares to SGP

management.The restructuring process is expected to be

completed at the end of March 2022.

securing more than €400m of orders so far this year.

Dentons represented a group of almost 40 national and international creditors holding the SSD.

The SSD was placed in September 2016

year tranches.

Postbank, LBBW and UniCredit Bank as coordinating bookrunners and mandated lead arrangers.

drive shafts for the auto industry. The company generated a turnover of around €700m in 2018.

For more information on the various advertising and sponsorship opportunities available within

IFR, email: [email protected]

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.

Make the most of your success stories

Reinforce your marketing message with reprints from IFR

[email protected]

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the-market news and comprehensive real-time and historical data help industry players stay

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LPC’s publications, end-of-day valuations, online news, analysis, and interactive databases are

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FRONT STORY CHINA

CRSC kicks off tech board IPO Railway group set for biggest listing yet on Shanghai board

CHINA RAILWAY SIGNAL AND COMMUNICATION conducted price consultation for a Rmb10.5bn (US$1.53bn) tech board IPO last Friday, the biggest listing so far on the new Shanghai board.

The company will announce the issue price this Monday, and books will open for a day on July 10.

CRSC, which is already listed in Hong Kong, has lowered the number of A-shares on offer from 2.2bn to 1.8bn, or up to 17% of its enlarged capital, while the fundraising target remained unchanged.

Of the shares on offer, 30% or 540m shares have been allocated to a strategic tranche for sponsor CICC, special asset management plans, and other strategic investors.

Under the tech board rules for IPOs in excess of Rmb5bn, the sponsor is required to buy at least 2% of the IPO shares and hold them through a subsidiary for two years, up to a cap of Rmb1bn.

Other early IPO applicants have agreed a relatively high fee to compensate sponsors for the additional risk, but CSRC has offered no special incentive.

paying an underwriting fee and sponsor fee equal to 1.5% of the fundraising size. Assuming the company raises Rmb10.5bn, the fee is Rmb157.5m.

Excluding the strategic tranche, about 80% and 20% of the remaining shares will be earmarked for institutional and retail

investors, respectively. Proceeds will be used for intelligent technology research, the construction of an intelligent technology manufacturing base in the city of Changsha, IT services, and to replenish working capital.

CICC is the sponsor of the deal and also joint bookrunner with Goldman Sachs Gao Hua Securities, Citic Securities, BOC International (China), Morgan Stanley Huaxin Securities and TF Securities.

MORE TO COME

In addition, six companies conducted price consultations last Friday for Shanghai tech board IPOs after their registrations were accepted by the China Securities Regulatory Commission at the start of the week.

They are ESPRESSIF SYSTEMS SHANGHAI (Rmb1.01bn or US$146m), ADVANCED MICRO-

FABRICATION EQUIPMENT (Rmb1bn), HARBIN

XINGUANG OPTIC-ELECTRONICS TECHNOLOGY (Rmb876m), XIAN BRIGHT LASER TECHNOLOGIES (Rmb700m), FUJIAN FORECAM OPTICS (Rmb651m) and ANJI MICROELECTRONICS TECHNOLOGY SHANGHAI (Rmb303m).

The companies will give pricing details on July 8 and open the books on July 10.

The six companies will wrap up their IPOs on July 12, when the other three tech board candidates – China Railway Signal and Communication (Rmb10.5bn), Ningbo Ronbaymat New Energy Technology (Rmb1.6bn) and Appotronics Corporation

(Rmb1bn) – will also complete their IPOs.In addition, eight companies are set to

conduct price consultations on Monday and Tuesday for Shanghai tech board IPOs totalling Rmb6.06bn.

They are ArcSoft Corporation (Rmb1.13bn), Micro-Tech (Nanjing) (Rmb894m), Western Superconducting Technologies (Rmb800m), Shanghai MicroPort Endovascular MedTech (Rmb651m), Guangzhou Fangbang Electronics (Rmb1.06bn), Beijing Tianyishangjia New Material (Rmb646m), Suzhou Harmontronics Automation Technology (Rmb468m), and Beijing Worldia Diamond Tools (Rmb407m),

pricing on July 9 and open the books on July 11 and the latter four will price on July 10 and open books on July 12.

(Rmb550m), Beijing Piesat Information Technology (Rmb567m) and Guangdong Jia Yuan Technology Shares (Rmb969m) have completed the registration process for their tech board IPOs.

As of July 5, 25 tech board listing candidates had completed IPO registrations with the CSRC. An additional six companies are still awaiting the completion of the registration process after passing listing hearings. These 31 companies are expected to start trading together.

The tech board’s listing committee has also scheduled two IPO hearings, one on July 11 for Eversec Technology (Rmb800m) and Beijing ABT Networks (Rmb298m) and another on July 15 for Shanghai Haohai Biological Technology (Rmb1.48bn) and Cnano Technology (Rmb870m). Last month, the tech board held 13 hearings for 31 candidates from June 5–28.Karen Tian, Fiona Lau

Game on for French national lottery IPO Stake likely to sell 50% of Francaise des Jeux

national lottery FRANCAISE DES JEUX

be realised this year, with the Agence des Participations de l’Etat (APE) mandating eight banks for a potential IPO in 2019.

For the institutional offer, BNP Paribas, Citigroup, Goldman Sachs and Societe Generale will be joint global coordinators and joint bookrunners with CA-CIB, HSBC and Natixis, with CIC as co-lead.

For the retail offer, CA-CIB and Natixis are joint global coordinators and joint bookrunners with BNP Paribas and Societe Generale, with CIC as co-lead.

The government has a 72% stake in Francaise des Jeux and is expected to sell around half of the company, with a potential deal size of around €1bn. A banker involved said that the state is expected to retain a position of around 25%.

Minority shareholders hold 13.8%, employees have 5% and the remaining 9.2% is held by a veterans group called Union des Blesses de la Face et de la Tete.

le Maire said in June that, providing market conditions are suitable, the IPO would take place before the end of the

year. Another banker involved suggested a September or October IPO.

The second banker said that the mandated banks are working on the premise that they need to “do the legwork and be ready to go when the timing is right”, while noting that means both market and political conditions.

French President Emmanuel Macron is attempting to sell a raft of stakes in assets including listed entities Aeroports de

Francaise des Jeux, cut its stake in ADP below 50% and allowed for dropping its stake below a 30% threshold in Engie passed into law in May.

Francaise des Jeux has been a pipeline holdover from at least as far back as 2008.Robert Venes


EQUITIES Australia 84 China 84 India 87 Indonesia 87 Singapore 88 Belgium 88 France 88 Germany 89

Ireland 89 Italy 90 Switzerland 90 UK 90 United States 91 Structured Equity 94

ASIA-PACIFIC

AUSTRALIA

LENDLEASE HIRES TWO BANKS FOR IPO

LENDLEASE GROUP has hired Citigroup and DBS to manage a real estate investment trust IPO of up to US$400m–$500m on the Singapore Exchange, people with knowledge of the transaction said.

More banks are likely to join the syndicate.

The REIT will contain retail assets and the IPO is being targeted for later this year.

Lendlease has retail properties in Singapore and Australia. In Singapore it owns the Parkway Parade, 313@Somerset and Jem retail malls.

CHINA

DOUYU MAY LAUNCH US IPO THIS WEEK

Tencent-backed game live-streaming platform DOUYU INTERNATIONAL HOLDINGS is considering launching its planned NYSE IPO as early as this week after putting the deal on hold in May, people with knowledge of the transaction have said.

deal with the SEC but the size may change.

launch has been made, said the people.DouYu put the deal on hold in early May

after US President Donald Trump threatened to impose higher tariffs on China, leading to global market sell-offs. There have been conciliatory moves between the US and China since, helping to soothe market sentiment.


WEEK IN NUMBERS

US$9.8bn BUDWEISER BREWING COMPANY

APAC, THE ASIA-PACIFIC BUSINESS OF ANHEUSER-BUSCH INBEV, IS LOOKING TO RAISE UP TO US$9.8bn IN WHAT COULD BE THE WORLD’S LARGEST IPO OF 2019. BUDWEISER IS LOOKING TO FLOAT ABOUT 15.4% OF ITS ENLARGED SHARE CAPITAL AT A PRE-SHOE VALUATION OF AROUND US$54bn-$64bn AND A POST-SHOE VALUATION OF AROUND US$55bn–$65bn. THE HONG KONG FLOAT IS UNUSUAL AS THERE IS NO CORNERSTONE TRANCHE

35% THE INDIAN GOVERNMENT HAS GIVEN

A FILLIP TO THE EQUITY CAPITAL MARKET BY PROPOSING TO INCREASE THE MINIMUM FREE FLOAT REQUIREMENT FOR ALL LISTED COMPANIES TO 35% FROM 25%

Eight THE LONG-AWAITED FLOAT OF FRENCH

STATE-OWNED NATIONAL LOTTERY FRANCAISE DES JEUX MAY FINALLY BE REALISED THIS YEAR, WITH THE AGENCE DES PARTICIPATIONS DE L’ETAT (APE) MANDATING EIGHT BANKS FOR A POTENTIAL IPO IN 2019. FRANCAISE DES JEUX HAS BEEN A PIPELINE HOLDOVER FROM AT LEAST AS FAR BACK AS 2008

159.2m TENCENT-BACKED LIVE-STREAMING

GAME PLATFORM DOUYU INTERNATIONAL HOLDINGS IS CONSIDERING LAUNCHING ITS PLANNED NYSE IPO AS EARLY AS NEXT WEEK AFTER PUTTING THE DEAL ON HOLD IN MAY. DOUYU NOW HAS 159.2 MILLION AVERAGE TOTAL MONTHLY ACTIVE USERS, UP 26% FROM 126.7 MILLION IN 2018, AND 6 MILLION PAYING SUBSCRIBERS, UP FROM 3.6 MILLION IN 2018

7% ENERGEAN OIL & GAS RAISED US$265m-

EQUIVALENT (£211m) ON THURSDAY AT A 7% PREMIUM TO THE PREVIOUS CLOSE TO PART-FINANCE THE INITIAL US$750m PAYMENT FOR ITS ACQUISITION OF EDISON EXPLORATION & PRODUCTION. PRICING OF 900p WAS A 7% PREMIUM TO THE 841p WEDNESDAY CLOSE, A 2.2% DISCOUNT TO THE VWAP UP TO BOOKS CLOSING AND A 2.9% DISCOUNT TO WHERE THE SHARES WERE TRADING WHEN PRICING WAS AGREED

TOTAL NUMBER AND VOLUME OF EQUITY AND EQUITY-RELATED ISSUES BY COUNTRY1/1/2019–30/6/2019

Volume No of Volume No of

Country US$(m) issues Country US$(m) issues

South Africa 957.4 12

Saudi Arabia 923.2 3

Israel 889.6 16

Nigeria 297.8 2

Egypt 101.5 2

Morocco 21.0 1

Malawi 20.4 1

Kuwait 9.2 1

Ivory Coast 6.9 1

Mauritius 6.3 1

Africa/Middle East 3,233.3 40

China 66,480.5 276

India 13,169.1 77

Japan 10,019.2 78

Australia 8,579.8 298

Hong Kong 4,299.9 63

South Korea 3,456.4 46

Singapore 3,118.9 22

Malaysia 2,013.8 77

Philippines 855.6 7

Taiwan 788.9 48

Thailand 686.6 9

Indonesia 590.9 21

New Zealand 410.3 6

Vietnam 325.5 3

Pakistan 83.4 2

Bangladesh 41.4 6

Macau 28.0 2

Nepal 14.1 2

Laos 7.8 1

Asia-Pacific 114,970.1 1,044

United States 106,801.5 404

Canada 8,373.2 182

Brazil 7,721.1 16

Argentina 1,150.0 1

Bermuda 663.3 4

Peru 327.1 2

Chile 69.3 1

Colombia 38.9 1

Americas 125,144.4 611

United Kingdom 21,608.4 173

Germany 7,868.0 22

Switzerland 4,938.8 11

Netherlands 4,854.0 14

Italy 4,052.5 15

France 3,501.1 18

Spain 3,378.1 14

Sweden 2,686.6 40

Norway 2,030.3 28

Russian Federation 1,684.4 5

Belgium 1,406.9 7

Guernsey 1,095.6 8

Denmark 1,083.6 6

Cyprus 480.9 4

Austria 455.1 3

Ireland 423.8 9

Iceland 419.6 2

Finland 284.8 6

Poland 170.7 6

Slovenia 122.9 1

Luxembourg 108.9 2

Jersey 97.8 7

Malta 55.3 1

Portugal 49.0 1

Bulgaria 26.6 3

Greece 14.3 1

Gibraltar 2.7 1

Isle of Man 0.2 1

Europe 62,900.9 409

Total 307,093.8 2,106

Source: Refinitiv

A spokesman for DouYu said the company “continues to work toward the objective of completing its IPO”.

DouYu last week updated its prospectus

total monthly active users (MAUs) reached

quarter of 2018. Paying users grew by 67% to 6m from 3.6m during the same period.

Net revenue increased by 123% to Rmb1.5bn (US$217m) in Q1 2019 from Rmb666.5m in Q1 2018. Adjusted net income was Rmb35.3m against a net loss of Rmb149.9m in Q1 2018.

Founded in 2013, DouYu, or “Fighting Fish”, is one of the leading live game-streaming/esports platforms in China. It was valued at around US$2.4bn when Tencent invested US$630.7m in the company in March 2018. Pre-IPO, Tencent owns a 40% stake through Nectarine Investment, a fully owned subsidiary.

Morgan Stanley, JP Morgan, Bank of America Merrill Lynch and CMB International are joint bookrunners.

EDVANTAGE HK$805m IPO BOOKS COVERED

Books of EDVANTAGE GROUP’s IPO of up to HK$805m (US$103m) are covered, a person with knowledge of the transaction has said.

The higher education provider is selling

HK$2.48–$3.22 range.The international tranche comprises

225m shares and the retail tranche 25m. There is greenshoe of 37.5m shares.

Cornerstone investor Ariana Capital has agreed to invest US$27m.

Pricing is scheduled on July 9.Edvantage operates two private higher

education institutions in China and one private vocational education institution in Australia. It mainly offers business programmes.

(US$25m) for the year ended August 31 2018, up 9.4% year-on-year. It earned about Rmb40m for the two months ended October 31 2018.

BNP Paribas is the sole sponsor.

CIMC VEHICLES PRICES IPO AT BOTTOM

Trailer maker CIMC VEHICLES has priced its IPO at the bottom of a HK$6.38–$8.08 range to raise HK$1.69bn (US$218m). The subsidiary of Shenzhen-listed China International


EQUITIES ASIA-PACIFIC

Four beat tech board targets CHINA New Shanghai bourse offers more flexibility on IPO pricing, deal sizes

Four companies priced IPOs on the Shanghai tech

board last week at a premium to average industry

valuations, underlining the appeal of the new

board’s market-based pricing to potential issuers.

YANTAI RAYTRON TECHNOLOGY, SUZHOU TZTEK

TECHNOLOGY, ZHEJIANG HANGKE TECHNOLOGY and

MONTAGE TECHNOLOGY – which was previously

listed in the US – are set to raise a combined

Rmb6.35bn (US$924m), exceeding their targets

in earlier filings.

After the first tech board issuer, Suzhou

HYC Technology, raised slightly less than its

target a week earlier, the four IPOs confirm that

companies have more flexibility on the size of

their capital raisings under the tech board’s

market-based pricing framework.

Yantai Raytron set the IPO price at Rmb20

per share to raise Rmb1.2bn, 166% more than its

original target of Rmb450m.

At the issue price, the 2018 price to earnings

multiple is 71.10, higher than the industry average

ratio of 30.58 but lower than the respective P/E

multiples of 139.66 and 113.75 of two Shenzhen-

listed comparable companies, Wuhan Guide

Infrared and Zhejiang Dali Technology.

The issuer plans to offer 60m A-shares or

13.5% of its enlarged capital. The company plans

to allocate 5% of the offer each to the sponsor

Citic Securities and a special asset management

plan for senior executives and core employees.

The rest of the offer will be sold to institutions

(80%) and retail (20%).

The company specialises in thermal imaging

technology, and will use the proceeds to upgrade

its production, develop more products and build

an R&D centre.

Suzhou TZTEK, which makes precision

measuring equipment and automated

manufacturing systems, priced its IPO at

Rmb25.50 to raise Rmb1.23bn, up from its

original target of Rmb1bn.

The issue price translates into a 2018 P/E of

52.26, higher than the industry average ratio of

31.26. Haitong Securities is the sponsor.

Both above companies wrapped up the IPOs

on July 4.

In a surprise twist, Galaxy Securities, which

bid for 6.4m TZTEK shares in the institutional

tranche, failed to subscribe for the shares on

time, earning China’s eighth-biggest brokerage a

six-month ban from investing in any A-share IPO.

Rechargeable battery manufacturer HangKe

Technology set the issue price at Rmb27.43 per

share to raise Rmb1.1bn, more than double its

initial target of Rmb547m. This translates to

a 2018 P/E of 38.4, higher than the industry

average of 31.3.

Sponsor Guosen Securities bought 4% of the

41m-share IPO.

HAPPY HOMECOMING

Chipmaker Montage will become the first

previously US-listed company to go public on the

Shanghai tech board after pricing a Rmb2.8bn

IPO at Rmb24.80 per share, again raising more

than the Rmb2.3bn originally planned. The

company plans to offer 113m A-shares, or not less

than 10% of its enlarged capital.

The price values Montage at 40.12 times 2018

earnings, higher than the industry average ratio

of 30.93 in the past month. Books will open for a

day on Monday.

Montage raised US$71m from a Nasdaq

IPO in October 2013, but delisted in November

2014 when a Chinese consortium acquired the

company for US$693m. Based on its Shanghai

IPO price, the company is now worth US$4.1bn.

Around 30% of the IPO, or 33.9m shares, has

been allocated to strategic investors. Sponsor

Citic Securities will buy 3% of the float or 3.4m

shares as a strategic investor, and four other

strategic investors, including a subsidiary of

Intel in Dalian city, will buy 30.5m shares. The

remaining 70% of the IPO will be bought by

institutional (80%) and retail (20%) investors.

Citic Securities was one of the investors in a

private financing round in May 2018. It owns a

5.65% stake in the company.

Montage will use the proceeds for research in

artificial intelligence and new-generation chips

and to upgrade its hardware.

Citic Securities is also joint bookrunner with

CICC, China Securities, Guotai Junan Securities,

and Zhongtai Securities.

The sponsor and bookrunner fee for the deal

will be 1.25% of the fundraising size, and each

bookrunner will get not less than Rmb1.8m as a

service fee.

The Shanghai Stock Exchange said on Friday

that trading would begin on the new board on July

22, without naming the first companies to list.

Karen Tian, Fiona Lau

GLOBAL BLOCK TRADES AND

ACCELERATED BOOKBUILDSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Goldman Sachs 50 11,856.41 17.0

2 Morgan Stanley 57 10,905.82 15.6

3 JP Morgan 51 7,053.02 10.1

4 Citigroup 43 5,400.88 7.7

5 BAML 23 4,212.74 6.0

6 Credit Suisse 36 3,963.75 5.7

7 UBS 25 3,775.80 5.4

8 Barclays 25 3,294.28 4.7

9 Wells Fargo 15 1,551.07 2.2

10 Deutsche Bank 12 1,311.55 1.9

Total 343 69,914.64

Global, including all domestic and international deals

Source: Refinitiv SDC code: C2a

Marine Containers sold 265m primary

translates to a 2019 P/E of seven.Books were covered multiple times with

demand from long-only institutions and hedge funds.

There is a greenshoe option of 15% of the base deal.

Two cornerstone investors have committed to purchase about US$85m of the deal: SAIC Motor Corporation (US$50m) and Shandong Linglong Tire (US$35m).

CIMC Vehicles manufactures semi-trailers and truck bodies. It will use the proceeds to develop new manufacturing or assembly plants in the US and Europe, for research and development, to repay the principal and interest on bank borrowings, and for working capital and general corporate purposes.

CIMC Group controls 63.3% of the company.

The shares are expected to be listed on July 11.

Haitong International is sole sponsor, joint global coordinator and lead manager with ICBC and Nomura.

MANPOWERGROUP LIKELY TO PRICE LOW

MANPOWERGROUP GREATER CHINA, a subsidiary of NYSE-listed ManpowerGroup, is likely to price a Hong Kong IPO of up to HK$630m (US$81m) at the bottom of the HK$9.90–$12.60 range, a person with knowledge of the transaction has said.

The employment agency is selling 50m shares, or 25% of the enlarged share capital. At the bottom of the range, the deal would bring in HK$495m.

The range translates to a 2019 P/E of 11.5–14.6 and a 2020 P/E of 9.2–11.7, as well as a market capitalisation of US$253m–$322m.

There is a 15% greenshoe.The shares will be listed on July 10.Huatai Financial is the sole sponsor.

PSBC EYES SHANGHAI IPO

Hong Kong-listed POSTAL SAVINGS BANK OF CHINA plans to offer 5.17bn A-shares in its Shanghai IPO, or 6% of the enlarged capital, according to a disclosure by the China Securities Regulatory Commission.

It is offering less than the 5.95bn A-shares approved by the China Banking and Insurance Regulatory Commission in June.

Based on its close of HK$4.66 on June 28, equivalent to Rmb4.10, the lender could raise Rmb21.2bn (US$3.1bn) from the listing.

It will use the proceeds to replenish capital.PSBC, the country’s biggest bank by

number of branches, raised HK$59.1bn (US$7.6bn) from a Hong Kong IPO in 2016.

It announced its Shanghai listing plan in 2017 and has been seeking shareholder and regulatory approval since then.

CICC and China Post Securities are the joint sponsors on the deal and joint bookrunners with UBS Securities and Citic Securities. UBS

on the IPO.

COMPANIES FILE FOR A-SHARE IPOs

Seventy-seven companies with a combined

to the China Securities Regulatory Commission for A-share IPOs in the last week of June, before the validity of their audited results expired.

The tally excludes companies that applied to the Shanghai tech board.

The CSRC released the draft prospectuses of the 77 applicants last Friday.

Shenzhen IPOs (Rmb4.2bn) and the remaining 37 for ChiNext IPOs (Rmb16.4bn).

Two companies, JIANGSU SWORD

AGROCHEMICAL (Rmb2.01bn) and POSTAL SAVINGS

BANK OF CHINA (Rmb2.12bn), plan to raise more than Rmb2bn from Shanghai IPOs, while nine target over Rmb1bn. They are

Kemai Chemical (Rmb1.42bn), Jiangsu Boqian New Materials Stock (Rmb1.16bn), Allied Machinery (Rmb1.05bn), Xinyaqiang Silicon Chemistry (Rmb1.2bn), Ningbo Deye Technology (Rmb1.02bn), Beidahuang KenFeng Seed (Rmb1.03bn), Beijing Zeho Waterfront Ecological Environment Treatment (Rmb1.45bn), Goodfarmer Foods Holding Group (Rmb1.06bn), and China National Gold Group Gold Jewellery (Rmb1.25bn).

The average size of the 37 proposed ChiNext deals is only Rmb443m. Only theme park operator Fantawild Holdings plans to raise more than Rmb1bn.

Citic Securities is the sponsor of eight of the IPOs, followed by Minsheng Securities on seven.

SUZHOU HYC TECH MISSES BILLION MARK

SUZHOU HYC TECHNOLOGY

price a Shanghai tech board IPO, has raised Rmb973m (US$142m) from the deal, slightly less than its original Rmb1.01bn target.

HYC sold 40.1m A-shares or 10% of its enlarged capital at Rmb24.26 apiece. Sponsor Huatai United Securities will buy 4.1% of the offer through the strategic tranche. The remaining shares are split 70–30 between institutional and retail investors.

Public funds, social security funds, pension funds, enterprise annuity funds and

A institutional investors and allocated 21.9m A-shares or 81% of the institutional tranche.

Class B institutional investors, composed

(QFII), and Class C institutional investors, composed of other funds such as private equity funds, were allotted 105,245 and 5m A-shares, or 0.4% and 18.6% of the institutional tranche, respectively.

For retail investors, the online tranche was 2,514 times subscribed when the offer closed on June 27.


ASIA-PACIFIC EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019


1 Morgan Stanley 54 8,301.84 10.2

2 Goldman Sachs 27 5,228.04 6.5

3 UBS 37 4,734.32 5.8

4 JP Morgan 26 4,179.54 5.2

5 Citic 24 3,683.46 4.5

6 Citigroup 36 3,574.98 4.4

7 CICC 30 3,286.90 4.1

8 Credit Suisse 30 2,665.46 3.3

9 Nomura 29 2,594.00 3.2

10 BAML 11 2,454.80 3.0

Total 940 81,011.3

Including all domestic and international deals and rights issues

Source: Refinitiv SDC code: C4a1

ASIA-PACIFIC EQUITIES (EX-JAPAN)BOOKRUNNERS: 1/1/2019–30/6/2019



2 Goldman Sachs 25 5,120.64 7.2

3 UBS 35 4,587.29 6.4

4 Citic 24 3,683.46 5.2

5 Citigroup 35 3,569.03 5.0

6 JP Morgan 25 3,382.43 4.7

7 CICC 30 3,286.90 4.6

8 Credit Suisse 28 2,387.54 3.3

9 HSBC 14 2,229.27 3.1

10 BAML 9 2,185.39 3.1

Total 865 71,340.41



ASIA-PACIFIC SECONDARY OFFERINGSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Morgan Stanley 38 7,250.64 12.5

2 Goldman Sachs 22 4,856.97 8.4

3 UBS 30 4,311.18 7.4

4 JP Morgan 23 4,059.07 7.0

5 Citigroup 25 2,976.38 5.1

6 BAML 9 2,378.36 4.1

7 Credit Suisse 21 2,157.59 3.7

8 HSBC 11 2,035.84 3.5

9 Nomura 15 1,912.42 3.3

10 Citic 9 1,372.87 2.4

Total 609 57,869.57

Including all domestic and international deals and rights issues Proportional credit


Following a lottery, 22,929 winning numbers were allocated 500 shares each. Each investor could have 1–15 numbers.

The listing date for the shares is not yet known.

FEIHE FILES AGAIN FOR HONG KONG IPO

Baby-formula maker CHINA FEIHE, which

listing application to the Stock Exchange of Hong Kong for an IPO of at least US$1bn.

It plans to list in Hong Kong in the fourth quarter, said people close to the deal.

China Merchants Securities, CCB International and JP Morgan are the sponsors.

in 2017 but the deal did not materialise.Feihe delisted from the New York Stock

Exchange in 2013, after chairman Leng Youbin, management and Morgan Stanley Private Equity Asia took the company private for about US$147m.

INDIA

TATA SPONGE LAUNCHES RIGHTS OFFER

TATA SPONGE IRON has opened a Rs16.5bn (US$239m) rights offer for subscription.

The company is selling 33m shares in a 15-for-7 ratio at Rs500 each. Tata Sponge shares closed at Rs540.25 last Tuesday.

Books will close on July 16. The funds raised from the rights offer will be used to reduce debt.

Axis Capital, Centrum Capital and SBI Capital are the lead managers.

INDIA HIRES BANKS FOR RITES STAKE SALE

Department of Investment and Public Asset Management has hired Elara, IDBI Capital

and SBI Capital for a 15% stake sale in engineering consultant RITES.

At current market prices the sale will total up to Rs8.9bn (US$129m).

ITI Capital, IDFC Securities, PNB Investment and Yes Securities also bid for

syndicate.

banks to quote a “drop dead fee”. This fee is payable by the government in case it calls off the transaction after hiring the banks.

Last year, the government sold a 12.6% stake through the company’s Rs4.7bn IPO at Rs185 a share. Rites shares closed down 1.51% at Rs300.90 on Friday on the National Stock exchange.

Elara Capital, IDBI Capital, IDFC and SBI Capital were the banks on the IPO.

STERLING & WILSON TO LAUNCH IPO

Solar engineering procurement and construction company STERLING AND WILSON plans to launch an IPO of up to Rs45bn (US$653m) in the next two weeks, according to people with knowledge of the transaction.

Controlling shareholders Shapoorji Pallonji & Company and founder and managing director Khurshed Daruvala will sell secondary shares. No primary shares will be offered.

In the nine months to December 31 the company recorded revenue of Rs61bn compared with Rs32bn in the same period

Rs1.7bn during the same period.Axis Capital, Credit Suisse, ICICI Securities,

Deutsche Bank, IIFL Holdings and SBI Capital are the joint global coordinators and bookrunners with IndusInd Bank and Yes Securities.

The company is part of the Shapoorji Pallonji Group which has interests in

construction, engineering, textiles and power.

S and W builds solar power plants in India, the Middle East, Africa, Australia and Europe.

INDONESIA

PLAZA INDONESIA PLANS LOCAL REIT IPO

PLAZA INDONESIA is planning a local real estate investment trust IPO of around US$140m as early as this year, people with knowledge of the transaction have said.

Plaza Indonesia is a subsidiary of the Indonesia Stock Exchange-listed Plaza Indonesia Realty and owns Plaza Indonesia Shopping Centre and Grand Hyatt Hotel Jakarta.

The REIT will comprise assets totalling US$700m. Around 20% of the trust will be sold to investors.

Citigroup is working on the transaction.

PHILIPPINES

AXELUM RESOURCES PLANS OCTOBER IPO

AXELUM RESOURCES, a maker of coconut-based products, plans an IPO of up to Ps7.7bn (US$151m) in October.

primary shares and 430m secondary shares would be offered at a maximum price of Ps6.81 each.

First Metro Investment is the issue manager.Proceeds will be used for future

acquisitions and new manufacturing facilities.

Axelum makes products such as coconut water, coconut milk, desiccated coconut and coconut oil for industrial and consumer use.


EQUITIES ASIA-PACIFIC

ASIA-PACIFIC IPOsBOOKRUNNERS: 1/1/2019–30/6/2019


1 Citic 15 2,310.59 10.0

2 CICC 22 2,065.90 8.9

3 China Merchants Secs 9 1,066.26 4.6


5 Haitong Securities 26 817.73 3.5

6 China Securities 11 733.28 3.2

7 Nomura 14 681.59 2.9

8 Citigroup 11 598.60 2.6

9 Guotai Junan Securities 13 519.11 2.2

10 Changjiang Securities 3 517.56 2.2

Total 331 23,141.77

Including all domestic and international deals Proportional credit


ASIA-PACIFIC IPOs (EXCLUDING JAPAN)BOOKRUNNERS: 1/1/2019–30/6/2019


1 Citic 15 2,310.59 10.7

2 CICC 22 2,065.90 9.6

3 China Merchants Secs 9 1,066.26 4.9

4 Haitong Securities 26 817.73 3.8


6 China Securities 11 733.28 3.4

7 Citigroup 11 598.60 2.8

8 Guotai Junan Securities 13 519.11 2.4

9 Changjiang Securities 3 517.56 2.4

10 Credit Suisse 9 507.87 2.4

Total 288 21,611.40

Including all domestic and international deals Proportional credit


ASIA-PACIFIC SECONDARY OFFERINGS

(EXCLUDING JAPAN)BOOKRUNNERS: 1/1/2019–30/6/2019


1 Morgan Stanley 28 5,825.34 11.7

2 Goldman Sachs 20 4,749.57 9.6

3 UBS 28 4,164.16 8.4

4 JP Morgan 22 3,261.96 6.6

5 Citigroup 24 2,970.43 6.0

6 BAML 7 2,108.95 4.2

7 HSBC 11 2,035.84 4.1

8 Credit Suisse 19 1,879.67 3.8

9 Citic 9 1,372.87 2.8

10 ICICI 5 1,288.90 2.6

Total 577 49,729.01

Including all domestic and international deals and rights issues Proportional credit

Source: Refinitiv SDC code: C04a5r

SINGAPORE

EQUITATIVA CONSIDERING SGX REIT

United Arab Emirates-based EQUITATIVA GROUP is planning to buy US$700m–$1bn of

in Asia and list them on Singapore Exchange, said Racha Alkhawaja, group

Alkhawaja said the assets would be located in China, Malaysia, Vietnam and Indonesia. According to Alkhawaja, the

but the Singapore Exchange is a preferred destination because of the liquidity it offers. She did not indicate the timing of the offer.

The group is also planning to buy US$300m–$500m of school properties in India and list them through a local REIT.

REIT to be listed in India.Alkhawaja was speaking at the WIBC

Capital Markets Summit in Singapore.Emirates REIT, which is listed on

Nasdaq Dubai, is part of the Equitativa Group.

EUROPE/MIDDLEEAST/AFRICA

BELGIUM

WATERLAND AND BALTISSE SELL 10% OF FAGRON

Waterland Private Equity and Baltisse, the

Balcaen, sold an aggregate 10% stake in pharmaceutical group FAGRON on Tuesday evening.

The two investment groups sold 7.18m shares at €16.20 each for a €116.4m return. The trade launched following a wall-crossing exercise and pricing was an 8.4% discount to the €17.69 close.

A book of approximately 70 lines had strong support from both existing investors and new long-only accounts, with demand coming from locals, Continental Europe and the US. The top 15 accounts took around 70% of the deal.

Waterland and Baltisse are left with a 20.2% position via their WPEF VI vehicle, which is subject to a 90-day lock-up.

Fagron shares opened at €16 on Wednesday and pushed up above pricing during the morning, but came off to close at €16.05. The shares were trading at €16.23 after 1pm on Friday.

Berenberg was bookrunner.

FRANCE

TRANSGENE COLLECTS €48.7m FOR CLINICAL STUDIES

Biopharmaceutical company TRANSGENE has reported an 84% take-up for its €48.7m

and reduce debt.In total, 20.8m new shares were offered

on a 1-for-3 basis at €2.34, a 15.83% discount to TERP of €2.78.

There were acceptances for 17.5m shares, with the balance dealt with through oversubscription of 6.28m shares.

Institut Merieux, which held a 56.74% stake pre-money, committed to subscribe pro rata and buy any unsubscribed shares to reach a total subscription rate of at least 75%. In addition to its pro rata subscription, it acquired 3.08m shares through oversubscription for a post-money position of 60.44%.

Dassault Belgique Aviation committed upfront to subscribe pro rata to its 4.72% position, and acquired 642,000 rights during

money position.Transgene will use the proceeds to

complete clinical studies for four products, begin new clinical studies and repay European Investment Bank loans and interest, as well as R&D costs.

Transgene shares closed at €2.40 last Wednesday, down 0.4% for the day. On Friday afternoon, the shares were trading around €2.435.

Bryan Garnier and Kempen were bookrunners.


EMEA EQUITIES BOOKRUNNERS: 1/1/2019–30/6/2019




2 JP Morgan 38 5,657.4 9.7


4 Citigroup 33 3,878.1 6.6


6 UBS 17 2,745.3 4.7

7 BAML 15 2,674.5 4.6

8 Barclays 19 2,431.0 4.2

9 Jefferies 20 1,471.7 2.5

10 Numis 14 1,168.2 2.0

Total 431 58,436.7


Source: Refinitiv SDC code: C4cr

EMEA COMMON STOCK ISSUER LEGAL ADVISERS1/1/2019–30/6/2019

No of Total Share

Legal adviser issues US$(m) (%)

1 Freshfields Bruckhaus 6 6,660.7 11.4

2 Allen & Overy 5 2,751.4 4.7

3 Kirkland & Ellis 2 2,654.4 4.6

4 Latham & Watkins 9 2,419.3 4.2

5 BianchiSchwald 1 1,526.1 2.6

=5 Niederer Kraft & Frey 1 1,526.1 2.6

7 Cooley 7 1,371.3 2.4

8 Cleary Gottlieb Steen & Hamilton 3 1,286.1 2.2

9 Davis Polk & Wardwell 2 913.4 1.6

10 Uria Menendez 1 868.5 1.5

Total 430 58,232.1


Source: Refinitiv SDC code: AX3

EMEA COMMON STOCK MANAGER LEGAL ADVISERS1/1/2019–30/6/2019

No of Total Share

Legal adviser issues US$(m) (%)

1 Allen & Overy 3 4,277.1 7.3

2 Latham & Watkins 6 3,836.1 6.6

3 Linklaters 5 2,848.8 4.9

4 Clifford Chance 3 2,078.7 3.6

5 White & Case 8 1,867.8 3.2

6 Lenz & Staehelin 1 1,526.1 2.6

7 Freshfields Bruckhaus 6 1,466.0 2.5

8 Cleary Gottlieb Steen & Hamilton 3 813.9 1.4

9 Ashurst 2 749.4 1.3

10 Homburger 2 675.0 1.2

Total 430 58,232.1


Source: Refinitiv SDC code: AX4

EMEA IPOs BOOKRUNNERS: 1/1/2019–30/6/2019



1 JP Morgan 10 1,259.24 9.2

2 Citigroup 8 1,125.38 8.2

3 Barclays 8 1,099.21 8.0




7 UBS 4 663.09 4.8

8 BNP Paribas 4 630.82 4.6

9 Numis 5 579.93 4.2

10 BAML 6 559.96 4.1

Total 53 13,700.66

Including all domestic and international deals

Source: Refinitiv SDC code: C7c

EMEA RIGHTS ISSUE UNDERWRITING BOOKRUNNERS: 1/1/2019–30/6/2019




2 JP Morgan 3 369.96 8.2

3 BNP Paribas 3 263.86 5.9

4 Belfius Bank 3 256.92 5.7

=4 ING 3 256.92 5.7

6 Baader Bank 2 233.98 5.2

7 KBC Group 2 196.26 4.4

8 DNB 6 185.76 4.1

9 CaixaBank 1 173.70 3.9


Total 37 4,497.37

Source: Refinitiv SDC code: C8fr

GERMANY

GLOBAL FASHION SHARES TUMBLE AFTER ‘CLUBBY’ FLOAT

Given the trouble in getting GLOBAL FASHION

GROUP

little surprise that the stock struggled on debut last Tuesday.

Having opened below pricing, the shares

pricing. Less than 250,000 units changed hands on the day, representing a tiny fraction of the 44m shares placed in the IPO. The stock had opened on Tuesday at €4.47. The stock was trading at €4.34 on Friday afternoon.

had been expected, with Kinnevik in for €60m as communicated when the deal was restructured on Wednesday, June 26, but with Rocket Internet taking €50m instead of the expected €40m.

New terms were issued on the Wednesday afternoon that also cut the deal size and pricing, yet it still took two days to generate a covered message on the base deal. It was little surprise to hear the book described as “pretty clubby” by one banker involved, though he said there was some incremental demand once the IPO was re-cut. Notably,

smaller than expected.Pre-money, Kinnevik had a 36.8% stake

and Rocket Internet a 20.4% position.

market capitalisation of €907m, rising to €937m on full exercise of the 15% primary

12%.

sales on consensus of 0.35 for 2020, versus Zalando at 1.8 and Asos at 0.9.

“Everyone is price sensitive and very careful about what they want to own,

especially after a few patchy aftermarket performances,” said the banker. “We’ve not seen many cancellations this year compared to last year. Deals are generally working, but at a price.”

A second banker involved said that some investors needed more time looking at the company as it operates in a number of different regions, with differing growth

each. Bookbuilding had initially been cut shorter than normal in the belief that investors had seen plenty of management.

The second banker said that investors had been asking for insider participation all

that was allocable. “They wanted Kinnevik and Rocket, the founding shareholders, alongside them in the book and in appropriate size.”

Berenberg, Goldman Sachs and Morgan Stanley were global coordinators, and bookrunners with HSBC. On the original structure of the IPO there was a fee pot of 3% split between base and incentive portions.

FAMILIES TRIM STAKE IN WACKER NEUSON

The Neunteufel and Wacker families cut their majority position in construction equipment maker WACKER NEUSON last Wednesday night for a return of €75m.

The sale was due to a desire to diversify assets and inheritance planning by some family members.

Books were covered by 7pm in Germany and the deal wrapped up an hour later. Pricing came at €20 per share, a 4.9% discount to the Wednesday close of €21.04. The trade represented approximately 43 days’ trading volume (based on the 90-day average).

A book of approximately 35 lines was dominated by German and Swiss long-only accounts, with support from UK, Scandinavian and Benelux money. The top

10 investors took approximately 70% of the deal, all of them long-only accounts.

Post-money, the Neunteufel and Wacker families retain a 58% stake and have committed to the company in the long term.

Wacker Neuson shares opened on Thursday at €20.28 and had pushed above the Wednesday close by 12pm in London, closing at €21.30. The stock was trading at €20.78 on Friday afternoon.

Bankhaus Lampe was bookrunner.

IRELAND

BOOKS OPEN ON €135m UNIPHAR LONDON AND DUBLIN FLOAT

UNIPHAR, which services pharmaceutical and medical device manufacturers, has set a price range of €1.10-€1.60 per share for its

Euronext Growth market of Euronext Dublin.

Proceeds will pay for the acquisition of Durbin, a pharmaceuticals supplier in the UK and US that supplies more than 160 countries. The balance will go towards near-term bolt-on acquisitions, reducing debt, funding additional capital expenditure and working capital, and costs related to the listing.

In addition to the €135m primary base deal there is potential secondary selling of €10m. The company will provide a €15m primary share greenshoe.

The price range represents estimated EV/Ebitda for 2019 of 7.5 to just above 9. There are no direct peers, but investors will most likely look at Clinigen and UDG Healthcare, which trade at 18.62 and 14.71, respectively.

As Uniphar is a healthcare services provider the deal is attracting plenty of generalists rather than healthcare

management is meeting investors in the UK and Dublin until books close on July 11.


EQUITIES EMEA

ALL FRENCH EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019


1 Citigroup 4 679.05 28.6

2 Barclays 2 576.99 24.3

3 Credit Agricole 3 296.22 12.5


5 SG 4 143.75 6.1


7 Leerink Partners 1 72.62 3.1

8 Natixis 4 57.24 2.4


10 Jefferies 1 33.24 1.4

Total 16 2,370.37


Source: Refinitiv SDC code: C4c2r

ALL GERMAN EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 7 1,511.23 19.3


3 Berenberg 6 818.09 10.5

4 BAML 2 746.86 9.5



7 UniCredit 4 507.29 6.5

8 BNP Paribas 2 397.08 5.1

9 SG 2 363.46 4.6


Total 21 7,822.75



ALL ITALIAN EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019


1 Citigroup 3 595.15 14.7

2 UBS 2 557.12 13.7

3 BAML 2 432.76 10.7

4 JP Morgan 1 378.41 9.3



7 Banca Akros 1 178.70 4.4

=7 Barclays 1 178.70 4.4

=7 HSBC 1 178.70 4.4

=7 UniCredit 1 178.70 4.4

Total 15 4,052.49



Uniphar generated revenues in 2018 of

of €46.3m on a pro forma basis, including Uniphar’s acquisition of Durbin and of Sisk Healthcare in August. Uniphar has more than 2,000 employees and supplies more than 200 multinational pharmaceutical and medical device manufacturers.

Davy and RBC Capital Markets are bookrunners, with Davy also nominated adviser and Euronext Growth adviser.

ITALY

AEDES FUNDRAISING BACKED BY EXISTING SHAREHOLDER

Real Estate Investment Trust AEDES is targeting €50m from a capital increase as part of its 2019-2024 business plan.

The business plan aims for a real estate gross asset value of €1.12bn and annual rental revenue of about €66m by 2024, with an average LTV of around 50% during the expansion.

The capital increase is expected to be carried out by November, with the board due to pass resolutions regarding the capital increase at a meeting in July.

Majority shareholder Augusto, which holds a 51.28% stake, has indicated that it intends to support the fundraising on a pro rata basis and will also provide up to €10m of shareholder loans.

Augusto, however, will not be a majority shareholder in the long term. Its owners have said that from December 3 and following completion of the capital increase they will sell either Augusto or the stake it holds in Aedes as well as another stake in an Italian REIT.

Aedes shares closed down 5.8% at €1.39 last Monday.

SWITZERLAND

FULL GREENSHOE EXERCISE FOR ALUFLEXPACK

The full 10% secondary greenshoe was exercised after the close on Wednesday for Swiss packaging group ALUFLEXPACK’s SIX IPO after just four days of trading.

Having priced at SFr21, the shares closed up 7.1% at SFr22.50 on debut on Friday, and had pushed up to SFr22.90 by Monday’s close. Shares then traded off a little to close at SFr22.535 on Tuesday and SFr22.51 on Wednesday.

On full exercise of the 730,000 secondary greenshoe, the total deal size rises to

46.4%. The base deal comprised only new shares, with shareholder selling limited to the greenshoe.

Montana Tech Components provided the shares for the ‘shoe and is locked up for two years on its remaining stake, though it plans to remain the majority shareholder in the long term.

SFr22.805.Berenberg was global coordinator, and

bookrunner with Zurcher Kantonalbank. Raiffeisen Centrobank was co-lead.

UK

ENERGEAN RAISES US$265m TO BACK EDISON E&P BUY

ENERGEAN OIL & GAS raised US$265m-equivalent

initial US$750m payment for its acquisition of Edison Exploration & Production, which has a portfolio of producing assets in Egypt, Italy, Algeria, the UK North Sea and Croatia.

The combination is expected to create one of the largest independent E&P companies

on the London and Tel Aviv stock exchanges. The initial US$750m will be adjusted for working capital, with an additional

from the Cassiopea development offshore Italy, which is expected in 2022.

Alongside the equity fundraising, the

US$600m committed bridge loan facility.Books opened Thursday morning

following an extensive wall-cross and were covered after an hour, with guidance of 880p-910p coming at 10am in London. Investors were told half an hour later that orders below 900p risked missing the trade. The deal wrapped up at 10:45am.

Pricing of 900p was a 7% premium to the 841p Wednesday close, a 2.2% discount to the VWAP up to books closing and a 3.2% discount to 930p where the shares were trading when the 900p guidance was communicated.

The top 20 accounts took more than three-quarters of a book of approximately 100 lines, with strong support from existing shareholders, many of which were wall-

and some zeroing of orders.Energean shares closed up 13.55% at 955p.Morgan Stanley was global coordinator, and

bookrunner with Stifel. Peel Hunt and RBC Capital Markets were co-lead managers. Rothschild advised.

UNITE RAISES £260m FOR LIBERTY BUY

UNITE GROUP raised £259.6m through an accelerated capital increase during trading hours on Wednesday, the proceeds of which will part-fund an acquisition.

JP Morgan and Numis were bookrunners.Unite, which manages and develops

student accommodation, is acquiring Liberty Living Group, a portfolio of purpose-built student accommodation, from Canada Pension Plan Investment Board, for £1.4bn.

Following a wall-cross in advance that provided enough indications of interest to


ALL NORDIC EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019


1 Carnegie 31 1,060.36 16.2


3 Nordea 8 449.38 6.9

4 SEB 8 436.52 6.7

5 DNB 16 423.55 6.5

6 Pareto 12 368.47 5.6

7 Arctic Securities 9 344.56 5.3

8 Sundal Collier 11 342.34 5.2

9 JP Morgan 3 333.09 5.1

10 Danske Bank 8 262.67 4.0

Total 81 6,545.60


Source: Refinitiv SDC code: C4c6

ALL SPANISH EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 3 357.38 17.5

2 Citigroup 5 300.17 14.7



5 BAML 1 214.73 10.5

6 BNP Paribas 1 173.70 8.5

=6 CaixaBank 1 173.70 8.5

8 UBS 1 78.21 3.8

9 Santander 1 64.46 3.2

10 HSBC 1 52.65 2.6

Total 11 2,043.16



ALL UK EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019



2 Goldman Sachs 13 2,806.00 15.6

3 Barclays 11 1,305.70 7.3

4 Numis 12 1,116.04 6.2

5 JP Morgan 9 1,098.32 6.1

6 UBS 7 1,026.00 5.7

7 Jefferies 8 822.43 4.6

8 Peel Hunt 13 690.50 3.8

9 BAML 5 621.01 3.5

10 Citigroup 6 562.62 3.1

Total 165 17,998.58



cover the entire capital increase, books opened on Wednesday for an offering of 26.53m new shares in Unite, representing approximately 9.98% of share capital. Pricing came at 985p, a 3.5% discount to the £10.21 level at which shares were trading when books closed.

The top 10 accounts took more than 55% of the deal from a book of more than 100 lines, with very strong support from existing shareholders. News of the acquisition came out in June, so a fundraising had been anticipated by the market, according to a banker involved.

Liberty Living purchase is being funded

facilities and cash resources, and CPPIB receiving approximately 72.6m new Unite shares.

The acquired portfolio was independently valued at £2.2bn on May 31.

Unite Group shares closed on Wednesday at £10.18, up 2.055%.

SYNTHOMER TO PART-FUND OMNOVA BUY WITH EQUITY

Speciality chemicals company SYNTHOMER is buying US peer Omnova Solutions and will part-fund the transaction with a rights issue.

Synthomer is buying Omnova at US$10.15 per share, which values the entire share capital at US$473m (approximately £375m), with an implied enterprise value of US$824m (£654m). The enterprise value is 9.9 times Omnova’s adjusted 12-month Ebitda to May 2019, before acquisition-related synergies, and 9.6 times Omnova’s full-year 2018 Ebitda.

Omnova manufactures speciality chemicals including polymers, dispersions and elastomers. The acquisition is expected to complete late this year or early 2020.

Synthomer is funding the purchase with a £204m rights issue, alongside bridge loans totalling approximately £666m.

The capital increase comprises up to 84.97m new Omnova shares on a 1-for-4 basis at 240p, a 30.4% discount to TERP based on the July 2 close of 371.2p. Shares rose 1.3% on Wednesday to close at 376p. On Friday afternoon, the shares were trading at around 387p.

Shareholder Kuala Lumpur Kepong has irrevocably committed to vote in favour of the transaction and to exercise the rights attached to its 19.7% shareholding for a 0.75% commission.

The rest is underwritten by a banking syndicate. Barclays is sponsor and global coordinator, and bookrunner with Canaccord Genuity, Citigroup and HSBC. Barclays is also corporate broker with Canaccord and

Valence.

A full schedule and prospectus is due later this month.

CEO LEADS SELL-DOWN IN FIRST DERIVATIVES

Chief executive Brian Conlon provided the bulk of shares in a 6% sell-down on Wednesday morning in business software and consultancy group FIRST DERIVATIVES.

Conlon sold 1.4m shares, representing 5.3% of share capital, at £30.60 per share, a 7.83% discount to Tuesday’s £33.20 close, having launched the trade with a target of selling at least 1.5m shares.

Though Conlon’s selling was slightly below the level expected at launch, the deal size rose as non-executive director Virginia Gambale also sold 7,163 shares and employees sold 200,000 shares after exercising share options at the same £30.60 pricing.

In total, the sell-down fetched £49.2m, of which approximately £42.8m went to Conlon.

He is subject to a six-month lock-up for his remaining 24.5% stake.

First Derivatives shares opened at £31.65, but fell to £30.40 by the close, down 8.4% for the day. The shares were trading around £29.25 on Friday afternoon.

Goodbody and Investec were bookrunners.

AMERICAS

UNITED STATES

IPO CALENDAR SET TO QUICKLY REPLENISH

A long list of US IPO aspirants are queued up to launch their roadshows as early as Monday to exploit what could be a fertile funding window before the late summer shutdown.

Aided by a US stock market that hit record highs in the past week, the IPO calendar is poised to restock quickly as investors remain eager for a repeat of the stunning outperformance of the new issue asset class

Marketing software company MEDALLIA, healthcare technology company Phreesia, biotechs Fulcrum Therapeutics, Genmab and Mirum Pharmaceuticals and wealth manager Assetmark are all among possible near-term launches, having all lobbed public

Stronger-than-expected US job numbers on Friday initially saw stocks pull back from their highs, but economists remain

interest rates later this month in response to

The backdrop of concern about the growth outlook, notwithstanding the strong jobs market, puts into stark relief the growth attributes of most IPO candidates, making new issues even more attractive for investors.

gains of more than 30%, well above even a soaring stock market and even after disappointing debuts from Uber and Lyft.

Some portfolio managers were also surprised by the stock market’s strength this year as the Fed suddenly pivoted to a dovish stance, making IPOs the quickest way to catch up fund underperformance against benchmarks.

A looming test is the soon-to-start second quarter earnings season, which is expected to show earnings per share growth of just 0.3% for constituents of the benchmark S&P 500, weighed down by falling earnings in the materials and IT sectors (though the new communications services sector including big tech names will show strong earnings growth).

A poor earnings season could complicate some deals that rely on strong comp valuations but may have bigger implications in secondary ECM, which has been overshadowed by the IPO market this year.

US IPO proceeds rose nearly 25% in the

year, even as overall ECM proceeds fell 11%, because of less follow-on activity.

PROSIGHT EYES JULY DEBUT

Putting it on track for a debut later this month, Goldman Sachs/TPG-backed speciality property and casualty insurer PROSIGHT GLOBAL

on June 28 for a US$100m NYSE IPO.The IPO has been in train for a little while

January 22 during the government shutdown, during which the review functions of the SEC were severely limited.

Founded in 2009 by executive chairman Joseph Beneducci with capital from GS Capital Partners and TPG (who both plan to sell some shares at the IPO), the company bought NYSE-listed NYMAGIC in 2009 and in 2011 purchased assets in the UK to build out its own Lloyd’s syndicate.

The company last year generated US$895.1m of gross written premiums with a combined ratio of 96.7% (in other words, it

return on equity of 14%.ProSight’s insurance covers the media and

entertainment, real estate, professional services, transportation, construction,


EQUITIES AMERICAS

consumer services and marine and energy segments, focusing on offering small and medium-sized customers liability, auto, primary workers comp, property and professional liability insurance.

Goldman Sachs, Barclays and Bank of America Merrill Lynchsyndicate.

CODIAK IPO GOES INTO HIBERNATION

CODIAK BIOSCIENCES, the latest IPO prospect from biotech incubator Flagship Pioneering, withdrew its US$86m IPO from SEC registration on Monday, citing “market conditions.”

The deal has been sitting in registration since April 29 with Jefferies, Evercore and William Blair as joint bookrunners.

Of course, market conditions have not been a problem for the 10 biotech IPOs that have raised a combined U$1.2bn of proceeds since the mandatory 15-day viewing period for Codiak’s IPO expired.

The poor track records of other Flagship-

decision to pull the plug on Codiak’s IPO. The most recent Flagship-backed deals from Axcella Health (-55%) and Kaleido Biosciences (-27%) are both broken IPOs.

Flagship-backed Moderna shares have tanked again to US$14.73 after spending a few weeks in April and May above the offer price. The stock has traded as low as US$13.52 after pricing the largest biotech IPO ever (US$605m) at US$23 in December.

The perception is that Flagship’s cost base for forming its subsidiaries is much lower than what institutional investors pay to participate in late-stage private rounds and subsequent IPOs, especially ones that lose money.

Codiak was formed four years ago when Flagship and Arch Venture Partners merged their research on the potential for exosomes as cancer therapeutics and diagnostics

Fidelity has so far put US$41.5m into Codiak for a 14.7% stake in the company.

That is the same amount that Arch has put into the company as the top shareholder with 28.4%. Flagship is the second largest shareholder with 19% on a much smaller US$28m investment.

Fidelity and other institutional investors that participated in a US$76.5m private round in November 2017 need Codiak to go

allocations and to set a public mark on their initial investments.

CONYERS PARK TRIES FOR ANOTHER SIMPLY GOOD SPAC

CONYERS PARK II ACQUISITION, a new SPAC run by Centerview Capital partners James Kilts and

capitalising on the impressive performance of the predecessor vehicle.

Shares of healthy snack maker Simply Good Foods have more than doubled since it was formed from the US$730m merger between Conyers Park Acquisition (I) and Atkins Nutritionals two years ago.

Joint leads Deutsche Bank and Goldman Sachs plan to market 40m units of Conyers Park II at US$10 each.

Each unit comprises one share of common stock and a quarter of a warrant to purchase another whole share at US$11.50 each.

The terms are more aggressive than the

Investors in that deal received a third of a warrant along with a share of common stock for US$10 apiece. Simply Good shares hit a high of US$25.08 last month.

The sponsor of Conyers Park II has agreed to purchase up to 7.5m warrants at US$1.50 each in a concurrent private placement. The private warrants are also exercisable at US$11.50 a share.

The sponsor has already purchased US$25m of founder shares that convert into a 20% equity stake following a successful acquisition.

As per usual, all of the proceeds will be held in escrow and returned to investors if an acquisition is not consummated within 24-months.

Kilts and West, also the sponsors of Conyers Park I, boasted extensive track records in the consumer space before they oversaw the formation of Simply Good Foods.

Kilts led Gillette’s revival in the early 2000s prior to its sale to household products conglomerate Procter & Gamble in 2005. West led Del Monte’s Big Heart Pet Brands unit prior to its sale to JM Smucker in 2015.

NGP RETURNS WITH SWITCHBACK SPAC

SWITCHBACK ENERGY ACQUISITION, a special purpose acquisition company sponsored by

US$300m IPO.

NGP since Vantage Energy completed its initial business combination in November.

Goldman Sachs and Credit Suisse are the joint bookrunners on a public offering of 30m units at US$10 each. The units are structured as one share of common stock paired with a third of a warrant exercisable at US$11.50 per full warrant.


US EQUITIESBOOKRUNNERS: 1/1/2019–30/6/2019


1 Goldman Sachs 91 14,513.36 16.1

2 Morgan Stanley 80 10,313.20 11.4

3 JP Morgan 93 9,723.67 10.8

4 BAML 70 8,960.47 9.9

5 Citigroup 61 7,398.92 8.2

6 Barclays 47 5,619.96 6.2

7 Credit Suisse 47 4,149.25 4.6

8 RBC 30 3,761.50 4.2

9 Wells Fargo 34 3,454.77 3.8

10 Deutsche Bank 19 2,550.22 2.8

Total 363 90,101.93


Source: Refinitiv SDC code: C3r

US IPOsBOOKRUNNERS: 1/1/2019–30/6/2019


1 Goldman Sachs 24 3,058.67 10.3

2 BAML 27 2,969.42 10.0


4 JP Morgan 26 2,588.82 8.7

5 Barclays 15 2,081.73 7.0

6 Citigroup 14 2,025.91 6.8

7 RBC 10 1,938.88 6.6

8 Credit Suisse 15 1,703.06 5.8


10 Allen & Co 4 1,156.97 3.9

Total 67 29,596.24


Source: Refinitiv SDC code: C6

US SECONDARY OFFERINGSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Goldman Sachs 67 11,454.69 18.9

2 Morgan Stanley 60 7,654.92 12.7

3 JP Morgan 67 7,134.86 11.8

4 BAML 43 5,991.05 9.9

5 Citigroup 47 5,373.01 8.9

6 Barclays 32 3,538.23 5.8

7 Wells Fargo 29 3,113.39 5.1

8 Credit Suisse 32 2,446.18 4.0

9 RBC 20 1,822.62 3.0

10 Cowen & Co 32 1,456.13 2.4

Total 296 60,505.70


Source: Refinitiv SDC code: C8ar

LATIN AMERICA EQUITY, EQUITY-RELATED BOOKRUNNERS: 1/1/2019–30/6/2019


1 Banco BTG Pactual 13 1,111.6 11.9


3 JP Morgan 5 888.3 9.5

4 Itau Unibanco 9 808.5 8.7

5 BAML 7 808.3 8.7


7 Banco Morgan Stanley 5 639.1 6.9

8 Banco Bradesco 6 597.6 6.4

9 UBS 3 588.7 6.3

10 Caixa Economica Federal 2 404.8 4.4

Total 21 9,306.3


Source: Refinitiv SDC code:C1f

NGP, an energy-focused private equity

US$8.9m in a private placement of up to 5.9m warrants (exercisable at US$11.50 each) at US$1.50 apiece.

The exercise price of the warrants will be adjusted by 115% should Switchback raise additional capital at prices below US$9.20 in the future.

Switchback is led by Scott McNeill, the

prior to its acquisition by Concho Resources in July last year, and other former RSP executives. Switchback Energy is targeting assets in energy E&P, storage and logistics

The new SPAC will have 24 months to consummate an initial business combination or investors will get their money back.

The deadline can be extended by another three months if Switchback has executed a

to conduct an initial business combination within the same 24-month period.

OAKTREE ACQUISITION CORP

US$175m IPO, although its parent company

Management has agreed to be acquired by

Credit Suisse and Deutsche Bank are the joint bookrunners for a public offering of 17.5m units at US$10 each.

The units consist of one share of common stock and a third of a full warrant that is exercisable at US$11.50. Oaktree has agreed to invest another US$6m in a concurrent private placement of up to 4m warrants at US$1.50 each.

The offering is an extension of Oaktree’s Value Equities Group, a strategy that was launched in 2012 and has US$535m of assets. The SPAC will be led by Patrick McCaney, the portfolio manager of the Value Equities group since its inception.

The SPAC will have 24 months to consummate a deal or investors will get their money back.

PERFORMANCE FLAGS US$300m-PLUS FOLLOW-ON

PERFORMANCE FOOD plans to raise US$300m-$400m of equity to help fund the accretive

US$2bn acquisition of Reinhart Foodservice, the second largest privately-held foodservice distributor in the US.

The stock sale forms part of a permanent

include borrowing on the company’s asset-based revolving credit facility and new senior unsecured notes.

Credit Suisse, and Wells Fargo provided committed

in the box seat to handle the equity offering.The equity component will help

Performance meet its goal of reducing leverage to less than four times net debt/adjusted Ebitda within 24 months of the acquisition.

Though up 24% year-to-date ahead of the

0.8% to US$39.70 in Monday’s session after the deal was announced.

The price paid equates to an EV/LTM Ebitda multiple of 10.6 times, falling to 8.1

forecast annual run-rate cost synergies.The purchase would grow Performance’s

earnings per share in the single digits in the

digits in the third year. It is also accretive to gross margins, management told analysts in a conference call.

Though Performance did not specify the timing of any stock offering, typically companies fund M&A once it is clear they have regulatory approvals close to hand.

Performance expects the purchase to close by the end of the year.

CEO Craig Holm said the acquisition, which adds US$6bn of sales, would expand Performance’s geographic reach into the upper Midwest and New England.

Asked about his level of comfort in the deal passing muster with anti-trust regulators, Holm said Performance was

Despite the Federal Trade Commission having stood in the way of the merger of rivals Sysco and US Foods in 2015, labour pressures are driving sector consolidation, analysts say.

KURA SUSHI USA FILES FOR NASDAQ IPO

Japan’s Kura Sushi is bringing its conveyor belt sushi concept to the Nasdaq stock market.

Its US subsidiary KURA SUSHI USA, a chain of 21 sushi bars located primarily in California

Wednesday with BMO Capital Markets and Stephens as the joint bookrunners.

The company was formed by Kura Japan

Irvine, California, where the US subsidiary has its headquarters, a year later.

Automation, including using a conveyor belt to deliver sushi to customers instead of servers, helps keep costs low.

Kura passes that savings off to its customers in the form of low prices. The average item on the Kura conveyor belt is less than US$3 apiece.

Customers can use a touch screen to order other items from Kura’s on-demand menu at prices between US$2.25-$6.90 apiece.

Customers that order 15 plates or more are rewarded with a tableside Bikkura-Pon rewards machine.

Kura Sushi USA had US$45m of sales in

Both operating income (-9.1%) and net

months of 2019 versus the same period last year. Comparable restaurant sales also slid to 4.9% from 9.5% over the same six month period.

Kura credits its recent declines to restaurant renovations that took place in 2016 and drove sales increases after they reopened and an unfavourable comparisons between H119 and H118.

Conveyor belt sushi remains popular but Kura Sushi needs to open new restaurants.

The typical Kura Sushi restaurant requires a US$1.5m cash buildout and the company plans on opening between six and seven new locations in 2020.

The company hopes to open new stores at

an opportunity for up to 290 restaurants operating in the US.

MEXICO

VISTA OIL & GAS FILES FOR NYSE LISTING

Mexico-based oil company VISTA OIL & GAS, which has interests in shale basins in


EQUITIES AMERICAS

ECM DEALS: WEEK ENDING 5/7/2019

Stock Country Date Amount Price Deal type Bookrunner(s)

Fagron Belgium 02/07/2019 €116.4m €16.20 Accelerated Bookbuild (Secondary) Belfius/Kepler Cheuvreux, Berenberg, Kempen

CIMC Vehicles China 03/07/2019 HK$1.7bn HK$6.38 IPO (Primary) Haitong International, ICBC, Nomura.

Wacker Neuson Germany 03/07/2019 €75m €20.00 Accelerated Bookbuild (Secondary) Bankhaus Lampe

Cembra Money Bank Switzerland 01/07/2019 SFr112.8m SFr94 Accelerated Bookbuild (Treasury) Deutsche Bank, Credit Suisse

Energean Oil & Gas UK 04/07/2019 £211m 900p Accelerated Bookbuild (Primary) Morgan Stanley, Stifel

First Derivatives UK 03/07/2019 £49.2m £30.60 Accelerated Bookbuild (Secondary) Goodbody

Unite Group UK 03/07/2019 £259.6m 985p Accelerated Bookbuild (Primary) JP Morgan, Numis

for a US$100m NYSE IPO.Vista was formed by US private equity

assets in Latin America before becoming the

Mexico.Citigroup and Credit Suisse, the

bookrunners on the original IPO, will return to lead a listing of American Depositary Shares on the NYSE alongside Vista’s listing on the Mexican Stock Exchange.

The company used US$650m from its IPO

combination with Argentine E&Ps Pelsa and APCO International in April last year.

That deal established Vista as Argentina’s sixth largest oil producer with average production of around 25,700 barrels of oil equivalent per day.

Vista is using the proceeds from its NYSE IPO to fund capital expenditures associated with planned increases in daily production to 29,900 barrels per day this year, and to 65,000 by 2022.

PERU

INTERCORP RETURNS FOR SHOT AT NYSE

Peru’s INTERCORP FINANCIAL SERVICES has revived plans for a NYSE listing after abandoning

The parent company of Interbank (a universal bank), Interseguro (insurance) and Inteligo (wealth management), Intercorp

US$450m.The offering of 9m shares is expected to

compared with a recent US dollar-equivalent

price on the Lima Stock Exchange of US$46.01.

Bank of America Merrill Lynch, JP Morgan and Itau BBA are bookrunners. Intercorp has been publicly traded in Peru since 2007.

A wholly owned subsidiary of Intercorp, controlled by the bank’s chairman Carlos Rodriguez Pastor Persivale, is named as the selling shareholder.

2014 before its withdrawal in August 2015.

STRUCTURED EQUITY

CHINA

RISEN ENERGY DOWNSIZES CB TARGET

ChiNext-listed RISEN ENERGY has cut the size of a proposed six-year convertible bond to Rmb2.71bn (US$393m) from Rmb2.9bn.

The plan still needs approval from Chinese regulators.

The solar energy equipment maker will use the proceeds to expand production of batteries and components, build a photovoltaic power station in Australia, and replenish working capital.

Essence Securities is the sponsor.

GERMANY

SGL TENDERS FOR 2020 CONVERTIBLE BONDS

SGL CARBON launched a bid on Monday to repurchase its €163m 2020 convertible

bonds, using the proceeds from its €250m high-yield bond issued in April.

The tender wrapped up on Wednesday afternoon having secured 87.8% of the bonds through dealer manager UniCredit.

The company repurchased bonds with a principal amount of €146.7m at 103.5% plus accrued interest. That leaves €20.3m of bonds outstanding, which can now be called as the clean-up threshold is 80%.

The bonds pay a 3.5% coupon.

offered 103.5 for the bonds, about a 50bp premium to trading levels as UniCredit traders saw the bid on June 28 at 102.8 and the ask at 103.3.

SGL issued a €250m straight bond in April that pays a coupon of 4.625%, with the repurchase of convertible bonds as the use of proceeds.

SWITZERLAND

CEMBRA WRAPS UP ABB AND CB FOR CASHGATE ACQUISITION

CEMBRA MONEY BANK raised SFr362.8m (US$365.5m) on Monday through a combined equity and equity-linked fundraising towards the acquisition of local

acquired loan book.The SFr277m (US$281m) acquisition was

unveiled on Monday morning, when the company said it would follow-up with an accelerated bookbuild of treasury shares, convertible bond and AT1 bond issue, though it did not give timing.

Pre-sounding on the SFr250m convertible during the afternoon meant it was 90% covered on indications at launch after the


GLOBAL CONVERTIBLE OFFERINGSBOOKRUNNERS: 1/1/2019–30/6/2019


1 Goldman Sachs 21 5,448.51 8.8

2 BAML 24 4,742.83 7.7

3 Citic 10 4,226.26 6.8

4 JP Morgan 26 3,855.17 6.2


6 Citigroup 19 3,277.67 5.3

7 Credit Suisse 16 2,958.48 4.8

8 China Securities 8 2,549.43 4.1

9 Bank of China 4 2,442.73 3.9

10 China Intl Capital 3 2,220.11 3.6

Total 194 61,903.24

Including exchangeables and domestic offerings.

Source: Refinitiv SDC code: C9

ALL INTERNATIONAL ASIAN CONVERTIBLESBOOKRUNNERS: 1/1/2019–30/6/2019


1 Credit Suisse 8 1,380.73 18.4

2 JP Morgan 6 1,128.56 15.0

3 Goldman Sachs 4 1,068.75 14.2

4 BAML 4 714.16 9.5

5 Citigroup 6 608.77 8.1


7 UBS 4 403.71 5.4

8 HSBC 2 304.79 4.1

9 BNP Paribas 3 274.37 3.6

10 Sumitomo Mitsui Finl 2 237.20 3.2

Total 22 7,524.14

Including exchangeables.

Source: Refinitiv SDC code: M10

GLOBAL CONVERTIBLE OFFERINGS – EMEA BOOKRUNNERS: 1/1/2019–30/6/2019


1 JP Morgan 8 1,334.22 15.3

2 BNP Paribas 5 954.84 10.9

3 UBS 3 764.25 8.7

4 HSBC 4 759.45 8.7

5 Citigroup 2 739.78 8.5


7 BAML 2 555.35 6.3


9 SG 3 339.48 3.9

10 Natixis 2 282.68 3.2

Total 21 8,748.72


Source: Refinitiv SDC code: C09d

EQUITY-LINKED DEALS WEEK ENDING: 5/7/2019

Issuer Country Date Amount Greenshoe Tenor Coupon (%) Premium (%) Bookrunner(s)

Cembra Money Bank Switzerland 01/07/19 SFr250m – 7yr 0 30 Deutsche Bank, Credit Suisse

EXPLORE THE DCM PRICER APPFOR DEBT SYNDICATION ONTHOMSON REUTERS EIKON

TYPE DCM IN EIKON SEARCH TO LAUNCH THIS APP

DCM Pricer issuer name and currency Dynamic Yield Curve Engine (DYCE),


close, concurrent to the ABB, and the sale of 1.2m treasury shares was covered after half an hour.

The ABB priced at SFr94, a 2.9% discount to Monday’s close of SFr96.80, to give proceeds of SFr112.8m. Pricing was only just below the close of SFr94.15 on Friday June 28.

S&P put Cembra’s A- rating on negative

guided towards a 17% Tier 1 target and is keen to maintain its current rating. The credit discussion, which also referenced its several local bonds, was therefore fairly brief for a 60bp credit spread on the seven-year paper.

rates. The bonds do not pay a coupon and were offered at par to 103.6%. The premium guidance was 28%-30%. The focus was on maximising the premium so pricing came at 30% and 100.88%, to give a yield to maturity of minus one eighth.

The borrow assumption was 40bp, with plenty available currently at 25bp, which combined with the credit gave an implied volatility of 12%-20% on launch terms. Pricing was near the middle of that range and realised vol is 17 over 90 days and 19 over 200 days.

However the lack of equity sensitivity was an issue for some investors with the bond

this year’s level of SFr3.75.As for the acquisition it was pitched as a

major business lines of personal loans and car loans. On 2018 numbers the combination gives Cembra nearly 50% market share in personal loans in Switzerland.

Demand was balanced between hedge funds and outright investors. Outrights and

wall-crossed hedge funds together accounted for more than three-quarters of allocations.

Credit Suisse, Deutsche Bank and Zuercher Kantonalbank worked together on the ABB, with Credit Suisse and Deutsche leading the convertible.

A roadshow for the AT1 took place on Wednesday and the SFr150m issue was wrapped up on Thursday by Credit Suisse

acquisition with AT1 in Bond section).

ALL INTERNATIONAL ASIAN CONVERTIBLES

(EXCLUDING JAPAN) BOOKRUNNERS: 1/1/2019–30/6/2019


1 Credit Suisse 8 1,380.73 19.2

2 JP Morgan 6 1,128.56 15.7

3 Goldman Sachs 4 1,068.75 14.9

4 BAML 4 714.16 10.0

5 Citigroup 6 608.77 8.5


7 UBS 4 403.71 5.6

8 HSBC 2 304.79 4.2

9 BNP Paribas 3 274.37 3.8


Total 19 7,175.90


Source: Refinitiv SDC code: M11

GLOBAL CONVERTIBLE OFFERINGS – US BOOKRUNNERS: 1/1/2019–30/6/2019


1 BAML 17 3,444.58 19.9

2 Goldman Sachs 13 2,060.61 11.9

3 Morgan Stanley 11 1,856.66 10.7

4 Barclays 12 1,397.31 8.1

5 JP Morgan 12 1,392.39 8.0

6 Citigroup 10 1,185.24 6.8


8 HSBC 2 592.19 3.4

9 Wells Fargo 7 547.38 3.2

10 Jefferies 7 529.92 3.1

Total 44 17,350.86

Source: Refinitiv SDC code: C9a

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INTERNATIONAL FINANCING REVIEW INDEX

A2A 32

AbbVie 65

Abertis Infraestructuras 34

AB InBev 31

Accent 35

Advanced Micro-Fabrication Equipment 83

Advisor Group 76

Aedes 90

Aeroporti di Roma 34

Air India 58

Air India Asset Holdings Ltd 58

Albea 78

Aluflexpack 90

America Movil 76

Anji Microelectronics Tech Shanghai 83

ANZ Bank 21

AP Moller Maersk 31

ArcelorMittal 32

Areas Worldwide 80

Ares Capital Corp 31

Arkea Home Loans 40

Aroundtown 32

ASB 21

Asfinag 27

Associated British Ports 73

Atlantia 34

AT&T 31

AT&T SportsNet Pittsburgh 31

AT&T SportsNet Rocky Mountain 31

AT&T SportsNet Southwest 31

Auckland Council 30

Australian Business Securitisation Fund 47

AutoFlorence 1 45

Autonomous Region of Azores 26

Autostrade per l’Italia 34

AVS Group 78

Axelum Resources 87

Banco Monte di Paschi di Siena 6

Banco Santander 39

Bankia 37

Bank of America Merrill Lynch 15, 17

Bank of Bahrain and Kuwait 61

Bank of China 55

Bank of Communications 55

Bank of Ireland Group 36

Banque Federative du Credit Mutuel 36

BCA Marketplace 79

Beijing Enterprises Clean Energy Group 68

Belmont Green 42

Bharat Oman Refineries 69

BKW 35

BMW 35

BNP Paribas 13, 22, 39

BNZ 21

Bpifrance Financement 29

Bristol-Myers Squibb 30

Broadcom 31

Budweiser Brewing Company APAC 4

Bunge 75

Burgan Bank 61

Canadian Imperial Bank of Commerce 40

Canterbury Finance No.1 43

Cartesian Residential Mortgages 4 42

Castleton Commodities International 75

CA Technologies 31

CBRE 73

Celgene 30

Cembra Money Bank 38, 72, 94

Chandra Sakti Utama Leasing 69

China Construction Bank 55

China Feihe 87

China National Bluestar (Group) 56

China Railway Signal and Comm 83

Chong Hing Bank 57

CIFC European Funding CLO I 46

CIMC Vehicles 85

Citigroup 13, 15

CNP Assurances 36

Codiak BioSciences 92

Cofinimmo 70

Commerzbank 6, 17

Consolidated Container Company 76

Conyers Park II Acquisition 92

Co-operative Bank 43

CPPIB Capital 25

Cromwell Property Group 66

Cross River Rail 66

Ctrip.com International 66

CVS Health 30

Danaher 30

Dassault Systemes 71

Deutsche Bank 13

Deutsche Sparkassen Leasing 46

Dionysus Aviation 67

DouYu International Holdings 84

DRT 80

East Japan Railway 35

Edvantage Group 85

Egyptian General Petroleum Corp 70

Elecnor 72

Electronics for Imaging 77

Emirates NBD 72

Empresas Publicas de Medellin 63

Energean Oil & Gas 73, 90

Entergy Texas 31

Equinix 70

Equitativa Group 88

Ergon Peru 63

Eskom 59

Espressif Systems Shanghai 83

Etihad Rail 72

European Financial Stability Facility 25

European Investment Bank 29

Evercore 15

Export-Import Bank of India 69

ExteNet Systems 8

Fagron 88

Ferrovie dello Stato Italiane 33

Finance Ireland 43

Findomestic 45

Fineco Bank 7

First Derivatives 91

FIS 30

Fiserv 30

FlexiGroup 47

Ford Motor Credit 31

Francaise des Jeux 83

Fujian Forecam Optics 83

Funding Circle 45

Future Land Development Holdings 54

FWD Group 57

General Electric 30

GIC 70

Global Fashion Group 89

Goldman Sachs 15

Green Storm 2019 42

Grupa Lotos 71

Guangzhou Development District 55

Harbin Xinguang Optic-Electronics Tech 83

HealthEquity 74

Hershey 75

Hexpol 72

House of HR 78

Housing New Zealand 30

IBM 30

ICBC 55

IFA Rotorion 81

IGM Resins 80

iHeartMedia 12

Imagina 80

India 53

Insurity 76

Intelsat 40

Intercorp Financial Services 94

Invincible Investment Corp 70

Jefferies Financial Group 14

Jefferies Group 36

Jiangsu Sword Agrochemical 86

JPJ Group 79

JP Morgan 15

Kensington Mortgage Co 43

KfW 25, 29

Korea Development Bank 58

Kura Sushi USA 93

La Banque Postale 36

Lebanon 62

Legend Financial Leasing (Shanghai) 69

Lendlease Group 84

Lloyds Bank 45

Lloyds Bank Corporate Markets 37

Loparex International 76

Louis Dreyfus 71

Lower Saxony 29

Maguey Dutch Aviation 67

ManpowerGroup Greater China 86

Marks and Spencer 34

Marriott International 74

Medallia 91

Mega Auto Finance 69

Mega Central Finance 69

Mercedes-Benz Bank 44

Merck 32

Merlin Entertainment 42, 79

Metro 2019-1 47

Metro Finance 47

Metso Minerals 71

Monitronics International 80

Montage Technology 85

Morgan Stanley 15

Morgan Stanley Huaxin Securities 22

Morningstar 22

Motor Trade Finance 47

Municipality Finance 29

My Money Bank 44

National Express 73

Neiman Marcus 77

Nestle 78

NIBC Bank 36

Nine Dragons Paper (Holdings) 68

Nomura Research Institute 70

Nordea 20

No Va Land Investment Group 70

Nuvei Technologies Corp 76

Oaktree Acquisition Corp 93

Obvion 42

Olam Holdings BV 71

Olam International 71

OneSavings Bank 43

Outotec 71

Pampa Energia 62

Panasonic 32

Pemex 75

Pepper Group 47

Pepper SPARKZ Trust No.1 47

Performance Food Group 75, 93

Perusahaan Listrik Negara 58

PetSmart 77

Plaza Indonesia 87

Postal Savings Bank of China 86

Power Finance Corp 69

Pregis 76

Press Ganey Holdings 76

ProSight Global 91

Prudential plc 23

Qatar 62

Q Card Trust 47

RBC Capital Markets 15

Red Hat 30

Risen Energy 94

Rites 87

Root Sports Northwest 31

Santander 22

Santander Consumer Finance 38

SapphireOne 2019-1 44

Saudi Arabia 11

Saudi Aramco 10

Seazen Holdings 54

Securities and Futures Commission 22

SF Holding 69

SGL Carbon 94

Shandong Guohui Investment 54

Silk Road Number Five 43

Silver Arrow 10 44

SnapAV 76

Societe Generale 14

Societe Generale SFH 40

Socotec 78

Sovereign Housing Association 74

Stark Group 80

Steinhoff International Holdings 81

Sterling and Wilson 87

Stolt-Nielsen 71

Sumitomo 32

Suzhou HYC Technology 86

Suzhou TZTEK Technology 85

Switchback Energy Acquisition 92

Symantec 31

Synthomer 72, 91

Tahoe Group 54

Tata Sponge Iron 87

Terreal 78

Tianjin Airlines 21

Tianjin Binhai New Area C&I Group 56

Tien Phong Commercial Joint Stock Bank 59

Toronto-Dominion Bank 39

Transgene 88

Tunisia 60

Turkey 61

Ukrainian Railways 53

Unione di Banche Italiane 6

Uniphar 89

Unite Group 90

Usinas Siderúrgicas de Minas Gerais 62

Valiant Bank 40

Venn Partners 42

Vietnam Prosperity Joint Stock Comm 59

Vista Oil & Gas 93

Wacker Neuson 89

Warba Bank 62

Well Faith Management 66

Westlake Chemical 32

Westpac 21

Whataburger 76

Wizink Bank 46

Wizink Master Credit Cards 46

Wolong Electric Group 66

XiAn Bright Laser Technologies 83

Yantai Raytron Technology 85

Zhejiang HangKe Technology 85

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