Bond House: HSBC
Whole new world
As deal volume ticked up again in the Asian bond market, one bank jumped to the head of the league table as it led a number of outstanding transactions across the region. For its ability to show a whole new world of bonds to a diverse set of clients with unique needs, HSBC is IFR Asia’s Bond House of the Year.
HSBC took a bite out of the competition, growing its market share for Asia ex-Japan G3 bonds to 8.2% during the awards period from 7.2% a year ago. It finished clear of the second-placed bank by 160bp.
“This has just been a fabulous year for us,” said Sean Henderson, co-head of DCM for APAC at HSBC. “We’ve got the largest market lead in the G3 business since 2019.
“It’s really a significant gain for us, leaping ahead from last year.”
HSBC’s lead was supported by its work on jumbo trades in the region, including sovereign borrowings from Indonesia, the Philippines, China and Hong Kong, two US$3bn transactions from Hong Kong’s MTR Corporation and a US$2bn March trade for LG Energy Solution, as well as debut trades for India’s Tata Capital and Affin Bank from Malaysia.
Most notably, HSBC helped MTR move from a senior trade in March to two tranches of subordinated hybrid notes in June, meeting not only investors’ appetite for higher-yielding products, but also the issuer’s need for a new product that will manage its credit metrics as it funds its heavy capex programme.
Many transactions that HSBC worked on demonstrated unique structures and tweaks to allow issuers to seize market opportunities. Thailand’s PTT Global Chemical sold its first US dollar corporate hybrid bond, which HSBC helped pair with a tender offer to optimise pricing.
Insurers also looked to HSBC’s expertise to sell capital bonds. South Korea’s Hanwha Life Insurance was able to print a US$1bn Tier 2 that surpassed expectations to make it the largest US dollar transaction from a South Korean insurer to date.
Multicurrency transactions were increasingly popular, as issuers took advantage of attractive pricing, particularly in offshore renminbi bonds and Australian dollars. HSBC helped names like Airport Authority Hong Kong dip into US dollars and local currency at the same time, creating price tension between different tranches while diversifying their investor base. AAHK in January raised US$6.95bn-equivalent in US dollars, Hong Kong dollars and offshore renminbi.
“For multicurrency deals we were the only bank that had the platform to execute all the different types of currencies,” said Daniel Kim, APAC co-head of DCM. “Clients needed a lead bank to coordinate across all the currencies in the deal.”
In the euro market, HSBC brought covered bonds for Korea Housing Finance Corp and KB Kookmin, with respective social and sustainable labels, as well as a sustainable issue for Australia’s NBN.
HSBC’s prowess reached across issuer ratings as the bank also brought forward some trickier deals for high-yield borrowers. It was one of the global coordinators on Fosun International’s tap of its US dollar bonds that helped open that market in early January, and the following month it brought the first offshore deal from a Chinese property company in two years, helping Greentown China Holdings print a US$350m issue accompanied by a tender offer. An unrated deal for Hong Kong’s CSI Properties in June followed a similar playbook, helping bondholders to exit if they wanted to and allowing new investors to come in.
It was also sole global coordinator for Philippine oil refiner Petron’s unrated US$475m perpetual non-call three bond sold at 7.35% as part of a tender and exchange offer that allowed it to address an upcoming call on a perpetual note.
The success of these trades, and many others, relied on deft execution from a team that found open windows in a year riddled with geopolitical volatility and shifting Treasury rates. When Asian issuers spotted a period of stability, they were able to benefit from record tight spreads.
“We’ve taken good advantage of how strong the market has been for most of the year,” said Carla Goudge, head of debt syndicate for Asia Pacific.
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