Asia-Pacific Structured Equity House: Credit Suisse

IFR Awards 2018
4 min read
Fiona Lau

International equity-linked issuance from Asia more than doubled in 2018, and Credit Suisse used its experience and relationships to do more deals in more countries than any other bank.

The bank was a regular feature in the offshore Chinese market, moving quickly to seize a window early in the year, and it also helped issuers in Australia, South Korea and Vietnam raise funds during IFR’s review period.

Credit Suisse impressed with a broad range of public deals, covering high-grade and high-yield credits and a mix of structures, from zero coupons and dual-currency benchmarks to CB/stock placement combos, equity swaps and liability management.

It is clear the bank values structured equity – both public and private – as a core part of its Asian offering, and has lost none of its focus under Aaron Oh, who took over as head of structured equity origination for Asia-Pacific following the retirement of Jim McDonnell in 2017.

It was quick to spot market trends in 2018, completing three out of the five CBs from the Chinese property sector in January as debt-laden developers seized a chance to capitalise on surging stock prices.

The bank raised HK$2.79bn (US$358m) for Cifi Holdings Group and HK$1.99bn for Powerlong Real Estate. A tenor of 363 days for both deals allowed the issuers to move quickly, as bonds with maturities under one year do not need to be registered with China’s National Development and Reform Commission.

Credit Suisse also completed a HK$18bn convertible bond issue for long-term client China Evergrande Group, the largest offshore equity-linked deal in Asia-Pacific ex-Japan since 2001 and the largest ever from the Chinese real estate sector.

Chinese property developers were the biggest source of new convertible bonds in the year, with five deals raising a combined US$5.2bn, but investors were soon looking for alternatives as stock prices weakened.

The US$610m dual-currency CB of South Korean chemicals maker LG Chem was the highlight of the year. A rare sole mandate for a deal of its size in Asia’s competitive equity-linked market, the transaction was the first US dollar and euro dual-currency offering from a South Korean issuer.

It gave the issuer a neat way to monetise treasury shares it had acquired from its purchase of LG Life Sciences the previous year, while the currency mix suited its global funding needs and maximised investors’ appetite for the deal – as they had two currencies and different conversion premiums to choose from.

Credit Suisse also brought innovation to Vietnam, a market that drew increasing attention from international investors in 2018. The bank, again as sole bookrunner, helped Vietnamese property company No Va Land Investment Group raise US$310m from a top-up share placement and convertible bond issue – the first concurrent CB offering and equity placement in Vietnam. At US$160m, the CB portion was also the largest debut issuance from the country.

The bank has dominated Vietnam’s equity-linked sector since it brought Vingroup, the country’s biggest developer, to the market in 2009, working on all six equity-linked offerings from Vingroup since then.

During IFR’s awards period, Credit Suisse, as a joint bookrunner, helped Vingroup subsidiary Vinpearl, a resort developer, raise US$325m in June from the sale of an exchangeable bond issue with Vingroup as underlying. Vinpearl reopened the deal and raised an additional US$125m in October – this time with Credit Suisse as sole bookrunner – to bring it to a total size of US$450m, the biggest deal of its kind in a frontier market.

In Australia, Credit Suisse was one of the two banks that led the €230m seven-year CB issue for Cromwell Property Group, the largest CB offering in the country since 2011, and sole buyback agent on a €93m repurchase of outstanding CBs.

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Asia-Pacific Structured Equity House: Credit Suisse