Standard Chartered increased its share of the Asian loan market and revamped its approach to distribution in 2013, winning leading roles on key deals and numerous sole mandates without overloading its balance sheet.
The bank managed all that alongside a wholesale change in personnel, underlining the strength of its regional franchise.
“The bank is now more focused on distribution in primary and secondary, bringing down hold levels and destroying the myth that we rely on balance sheet to do deals,” said Cristian Jonsson, a career debt capital markets banker, who took over as global head of loan syndications in early 2013.
“With the restructuring of the loans team, we took a giant leap without missing a step.”
Jonsson’s appointment, announced at the start of IFR’s review period in December 2012, marked the beginning of a shakeup that injected bond-market discipline into the bank’s loan business.
At least 10 experienced syndications bankers joined from rival institutions and a number of StanChart’s old guard departed in a matter of months, a revolutionary pace in the usually slow-moving loan market.
Despite the staff changes, StanChart’s Asian loan franchise continued to pump out deals and win key mandates. More impressively, it lost none of its appetite for underwriting, and managed to sell down its risk on every occasion – a skill it had struggled to demonstrate in the past.
The approach to distribution marks a change in mindset for a bank that had been happy to hold unsold loans on its books. While that approach worked in previous years, balance-sheet constraints and the emerging-market selloff in mid-2013 had underlined the need for a disciplined approach to risk.
StanChart distributed more than US$13bn of loans in the first nine months of 2013. The lender also used its ability to underwrite and distribute to gain market share. During the review period, StanChart was sole bookrunner on over a dozen deals, more than any of its peers, while it picked up mandates ahead of rivals on a handful of other multi-handed transactions.
The best example was a HK$3bn (US$387m) term loan for Hong Kong property company Shui On Centre, which StanChart prefunded in May, while convincing the borrower to do a syndicated financing rather than a club. The outcome, less than two months later, was a blowout response from 22 other lenders with StanChart holding just 10% of the debt.
Similarly, OUE Hospitality Trust’s S$630m (US$503m) multi-tranche loan raised more than S$500m from the market. It was the only sole underwritten loan for a real-estate investment trust to be syndicated, and StanChart’s 14th mandate from the OUE group.
A Rp3trn (US$260m) dual-currency financing for Indonesian telecom tower company Solusi Tunas Pratama underlined StanChart’s domestic currency credentials. The bank prefunded the deal with DBS Bank in March, but was alone in bringing in nine first-time lenders in syndication.
StanChart was involved in more high-profile acquisition and leveraged financings across the region than any of its peers, despite missing out on deals related to Alibaba Group and Focus.
The bank won key roles on the US$6bn bridge loan for Thai group CP All’s purchase of Siam Makro, the US$4bn term loan for Shuanghui International’s takeover of Smithfield Foods, the US$1.85bn bridge for Malaysia’s SapuraKencana and the US$750m term loan for CT Corp.
StanChart’s list of deals spanned a range of industries and covered the entire Asian region, even in traditionally quiet markets such, Malaysia, Thailand and the Philippines. The bank also brought several Chinese borrowers to the syndicated loan market for the first time and these included CIFI Holdings and Zhejiang New Century Hotel Management.
Even in India, which remained subdued for most of the review period, StanChart led several deals, including the first US term loan B from the country for Tata Chemicals. It was also joint bookrunner on the US$215m financing for Baring Private Equity Asia’s leveraged buyout of Hexaware Technologies.
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