Credit Suisse distinguished itself from its peers in 2017 with a collection of leading roles on challenging deals, including event-driven financings and debut borrowers across Asia.
The Swiss bank focused on situations where it could add value – and make money – using its balance sheet judiciously to support key clients. Credit Suisse does not chase every deal, but its strategy paid off handsomely in a year when cash-rich Asian institutions were crying out for higher-yielding assets.
“We have focused on playing to our strengths in delivering bespoke, structured solutions to address the strategic, often complex, financing needs of our clients,” said Ashish Sharma, head of Asia Pacific loan syndication.
“Being able to tap new pockets of liquidity and diversified investor classes has been an important factor in our ability to secure some of the most notable sole mandates and debut financings in the region this year.”
With deal volumes down in every major loan market in Asia, abundant liquidity among market participants led to increased competition and significant pricing compression.
While others struggled to meet revenue targets, Credit Suisse seized the opportunity to bring new borrowers and higher-margin deals to an asset-hungry market. It did not shy away from risk, but used its balance sheet where needed and worked hard to recycle its capital to support more clients.
Credit Suisse’s unique divisional structure allows the Asia Pacific management team to take risk decisions quickly and efficiently, boosting its ability to compete on event-driven situations. The Asia Pacific financing group, set up under Carsten Stoehr in 2016, also sits across the institutional and private banking operations, allowing Credit Suisse to allocate capital to maximum effect.
The bank’s ability to finance Asia’s frontier markets stood out during IFR’s review period. It kicked off the year by pre-funding a US$200m five-year loan for the Independent State of Papua New Guinea in November 2016, increasing it to US$310m by March after attracting a handful of banks and institutional investors.
Credit Suisse followed PNG’s debut financing with a US$650m one-year facility for the Islamic Republic of Pakistan in June, followed by another US$205m one-year deal at the end of September – the sovereign’s largest commercial loan, and Credit Suisse’s seventh consecutive mandate from the government since the beginning of 2014.
Credit Suisse also was sole lead on inaugural loans for Pakistan’s Water and Power Development Authority, which closed a US$350m facility with a partial guarantee from a World Bank unit in July, and a US$446m-equivalent 364-day loan for Huarong Investment Stock Corp, a unit of state-owned China Huarong Asset Management.
The Huarong financing showcased Credit Suisse’s distribution capabilities and attracted 13 lenders in syndication, despite direct competition from at least one other Huarong group entity that was in the market at the same time. Similarly, Credit Suisse was sole bookrunner on a US$315m three-year facility for Gluon Xima International, a subsidiary of Chinese developer Greenland Holding Group, which drew eight lenders even as another affiliate of the borrower was raising US$250m-equivalent through another, bigger arranger group.
In event-driven financings, the highlight was a US$1.91bn loan for a consortium led by Indonesia’s Star Energy Group Holdings, which agreed to purchase a geothermal energy portfolio from Chevron in December 2016. Credit Suisse acted as the financial adviser to the consortium and helped put together a complex financing comprising a US$660m loan for Star Energy’s equity contribution and a US$1.25bn borrowing at the target level – both of which sold successfully in syndication.
Other event-driven highlights included a US$3.5bn three-year loan in May for Alibaba unit Ant Financial’s proposed acquisition of US money-transfer company MoneyGram International. The bank also led a US$394.3m loan for one of the founders of Indian analytics company Mu Sigma in October.
The Swiss lender had an impressive run in sponsor-backed financings too, playing instrumental roles in the leveraged buyouts of Hong Kong fixed-line telephone company Hutchison Global Communications – the HK$7.137bn (US$914m) five-year loan drew 29 banks – and Australia’s Icon Cancer Care – the A$460m (US$370m) five-year senior LBO loan attracted 18 lenders.
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