Hong Kong Equity Issue

Few banks around the world can claim such consistent domestic dominance as ANZ, which once again topped the bond league tables on both sides of the Tasman Sea amid a slowdown of overall Antipodean supply after a record-breaking 2017. “The key development in 2018 has been the rates cycle. This has impacted on foreign demand, notably out of Japan, and made the long end particularly challenging, though it has been contained by an expanding Australian investor base,” said ANZ’s global head of syndication, Paul White. ANZ responded well to the shifting buyside dynamics to retain its now traditional position at the head of the Australian dollar bond table with 80 trades, excluding self-led issues, during the review period for a 13.3% share of the A$103.8bn (US$75bn) market. It is not just the number and size of the trades executed but the breadth of the coverage that makes ANZ the go-to house across the range of Australian dollar issuance. In the semi-government arena ANZ helped smash Australia’s Green bond record across all sectors when New South Wales Treasury Corp raised a whopping A$1.8bn from its first such offering, a 10-year print in November 2018. Underlining its green credentials, ANZ was a lead on International Finance Corp’s A$300m March 2023 five-year Social Kangaroo bond, the inaugural social issue in the Kangaroo market from an SSA, and a A$125m three-year Sustainability bond from Victoria-based mutual Bank Australia. In the corporate segment ANZ took more than a dozen Triple B and Single A offshore and onshore names to the Australian dollar market. But arguably the most innovative transaction was the relatively modest A$150m debut 8.25% five-year non-call three sale from Virgin Australia, rated just B3/B– (Moody’s/S&P), which pushed the country’s developing high-yield bond market further down the credit curve. ANZ continued to lead in the senior and subordinated, local and Kangaroo FIG universe where it was the number one house for Australian issuers and the first choice for Canadian, Middle Eastern, Korean, Japanese and Chinese bank supply. Despite continuing to steer clear of the large non-conforming RMBS market, ANZ remained active in securitisation as it won a place on 10 tickets during the review period, encompassing bank and non-bank prime residential mortgage, auto and agricultural equipment-backed issues. Across the ditch ANZ headed the New Zealand table for an astonishing 12th successive year having a market share of over 34% on all domestic and Kauri bond business. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

UBS used its strong local franchise and full-service equities offering to full effect in 2018, raising more for its Australian clients than any of its peers. UBS topped the Australia/New Zealand equity and equity-linked league table for IFR’s review period. The Swiss bank raised a total of A$8.38bn (US$6.08bn) for its clients through 30 transactions with a market share of more than 25%, way ahead of 14% for its closest competitor, according to Refinitiv data. “In terms of the quality of the issues we have done as well as the sizes, there are no other banks in the market that could come close,” said Andrew Stevens, co-head of equity capital markets at UBS. Indeed, UBS led the four biggest merger and acquisition-driven equity raisings, the big theme in Australia equity capital markets in 2018, during the awards period. Highlights included the two-time fundraisings of a combined A$6.7bn for Transurban Group, in which UBS was one of the three leads for the share sales. The Australian toll-road operator raised A$1.9bn from an entitlement offer in December 2017 and completed an A$4.2bn entitlement offer and A$600m placement in August to fund an acquisition of a controlling stake in a Sydney toll road. The bank also worked on Australian gas and oil producer Woodside Petroleum’s A$2.5bn entitlement offer to fund the purchase of ExxonMobil’s stake in the Scarborough gas field. In demonstrating its execution capabilities, UBS has shown it can help its clients overcome market turbulence with its insights in timing, structuring the transaction and observing the broader environment. The fact that the bank is the largest equities broker in the country also provides support to the ECM operation. “The strengths of our franchise from advisory to ECM to equities show that we can really excel. A more volatile market is actually where we have been standing out,” Stevens said. The A$2.9bn rights issue from engineering service WorleyParsons fully demonstrated UBS’s ability to underwrite major financings even in a bad market. The deal launched just three days before October 25, the day the benchmark ASX 200 index hit a one-year low as investors turned cautious amid a global market sell-off. The Australian IPO market had another very quiet year, with many proposed listings pulled or postponed, but UBS still had a hand in the three biggest IPOs during the review period. The bank led Australian refinery and fuel supply network Viva Energy’s A$2.65bn float, Australia’s biggest IPO in four years, the A$744m listing of US coking coal miner Coronado Global Resources and the A$264m IPO of Australian wealth management platform Netwealth. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

Australia and New Zealand Banking Group outperformed competitors in its home market in 2018 with leading roles in the biggest leveraged buyouts and infrastructure financings of the year. The bank topped the league table with more than 50 syndicated deals in Australia and New Zealand during IFR’s review period, underwriting over A$17bn (US$12.3bn). “Event-driven financing activity is a key focus for ANZ and our ability to leverage our long standing client relationships across both issuers and investors meant we could deliver large-scale timely solutions,” said Christina Tonkin, head of loans & specialised finance, institutional at ANZ. The A$1.475bn financing for Beach Energy’s purchase of Lattice Energy in late 2017 was a particular highlight, showcasing ANZ’s ability to underwrite a transformational acquisition financing before bringing in 14 other banks. ANZ was also involved in the US$1.364bn senior loan to back Adaro Energy and EMR Capital’s US$2.25bn purchase of the Kestrel coal mine as part of Rio Tinto’s divestment of its Australian coal assets. That deal was syndicated to seven banks. It was also part of the arranger group for the A$911m-equivalent refinancing for Spotless Group and the A$400m refinancing for Downer EDI after Downer EDI acquired a majority stake in Spotless. Nine banks joined the Downer EDI deal while 10 participated in the Spotless deal. On the infrastructure front, the A$3.5bn financing for a A$6bn tunnels-and-stations package for the mega A$11bn Melbourne Metro Tunnel project, which includes the construction of a nine-kilometre tunnel and five underground stations, was a headliner. ANZ was an active MLAB on the coveted government-owned project financing, which attracted 16 incoming lenders. ANZ was also part of a large group of banks that provided a A$1.1bn bridge loan and A$4bn refinancing to support Transurban Group and its partners on the purchase of 51% of WestConnex, another high-profile privatisation, in September. The A$4bn deal will replace the A$1.1bn bridge and existing debt for the M4 West and M4 East motorways, and provide the remaining construction costs for M4 East. During a slower year for the Australian property market, ANZ snagged sole MLAB and underwriter roles on marquee deals, including the A$880m refinancing for Brookfield Place in Perth, the largest sole underwritten deal in the first three quarters of 2018, the A$542.3m amend and extend for Schwartz Family and a A$405m refinancing for SB&G Hotel Group’s Watermark hotel portfolio. The bank was also a lead on the A$1.102bn deal for Brookfield’s Wynard Place development and an arranger for corporate deals such as the Scentre Group refinancing, which was increased to A$900m from A$500m after 11 banks joined, Vocus Group’s A$1.417bn-equivalent facility and Fortescue Metals’ US$1.4bn loan, used to redeem part of a bond. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

With Chinese growth slowing, US interest rates rising, and trade tensions adding to a volatile backdrop, Bank of China showcased its ability to raise funds for Chinese issuers in challenging market conditions. BOC kept its lead over its rivals in cross-border financings, helping both Chinese and international clients diversify their funding sources. It also added to its domestic market credentials with an enviable slate of Panda bonds – a key capability at a time when onshore renminbi bonds are poised to enter global indices. BOC topped the underwriting table for G3 bonds from China with a 6.6% market share during IFR’s review period, according to Refinitiv data. In the renminbi market, it put enormous efforts into the internationalisation of the currency, opening new funding channels for overseas companies. It led the Republic of the Philippines’ Rmb1.46bn Panda bond in March, an exceptionally tight debut that won enthusiastic participation from international investors and was the first sovereign Panda bond from South-East Asia. BOC helped the Export-Import Bank of China to print a Rmb2bn Green financial bond, the first time global investors had been able to participate in a market-driven bookbuild of onshore Green bonds from a financial issuer. In the corporate sector, it also helped Hong Kong’s Sun Hung Kai Properties print a Rmb1.2bn debut Panda bond under the Bond Connect link in November. In the offshore arena, BOC led by example, with agenda-setting deals in its own name. In April it sold a US$3.2bn-equivalent four-currency Silk Road bond to support projects under China’s Belt and Road Initiative, and followed up a month later with China’s first Sustainability bond from its Hong Kong branch, issued alongside US$1bn of Green bonds from its London branch. BOC took that a step further in November to bring President Xi Jinping’s latest grand project – the “Greater Bay Area” of Guangdong, Hong Kong and Macau – to the attention of the capital markets with a US$1.83bn-equivalent deal split between US dollars, offshore renminbi, Macau pataca and Hong Kong dollars, to fund loans in the newly designated region. BOC played a key role in China’s US$3bn three-part sovereign deal in October, which drew strong demand and priced tightly despite a global market sell-off during bookbuilding. BOC was a mainstay in mega-sized Chinese corporate bonds, including ChemChina’s US$6.4bn-equivalent six-tranche dual-currency offering in March – the largest Reg S-only offering from Asia’s corporate sector. Its international expertise went beyond the dollar and euro markets. In March, BOC helped China Eastern Airlines become the first Chinese corporate issuer in Tokyo’s Pro-bond market with a credit-enhanced deal that introduced a new concept to many Japanese investors. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

Morgan Stanley stood out in 2018 for its ability to deliver equity capital to China’s technology sector, staying ahead of regulatory changes and doing more than its rivals to develop the market. Tech listings were the overriding theme for the year, and Morgan Stanley dominated the sector, working on 20 tech or biotech IPOs during IFR’s review period. It was especially impressive in bringing tech companies to Hong Kong, doing more than its fair share to promote the city as a genuine alternative to the US market. Morgan Stanley sponsored Hong Kong’s first two IPOs involving dual-class shares and three of the first four from early-stage biotech companies. It also played a key role in Asia’s biggest ever block trade, proving that Hong Kong can support even the biggest of capital raisings. Morgan Stanley responded quickly when Hong Kong’s stock exchange unveiled its biggest revamp of listing rules in a decade, allowing dual-class share companies and pre-revenue biotech companies to float in the city. It was one of the sponsors for the landmark HK$42.6bn (US$5.4bn) Hong Kong IPO of Chinese smartphone maker Xiaomi, the first listing in the city with weighted voting rights, and followed up as a sponsor on the HK$33.1bn Hong Kong IPO of Chinese online services provider Meituan Dianping, the second deal of the kind. In both cases, the bank convinced investors to look beyond the companies’ steep losses and bet on their future – an unusual concept in Asia, where most IPOs are marketed on a simple price/earnings multiple. Meituan, which runs a range of online businesses from food delivery to ticketing services, posted a huge loss of Rmb19bn (US$2.8bn) in 2017, while Xiaomi had burned through Rmb7bn in the first quarter of 2018, including one-off items. Morgan Stanley also secured sponsor roles on three listings from pre-revenue biotech companies, throwing its weight behind Hong Kong’s plans to become a fundraising hub for the promising sector. Notably, the bank was one of the sponsors on the successful HK$3.8bn float of anti-cancer drug developer Innovent Biologics, which helped revive investors’ confidence in the sector after a few disappointing listings. Outside Hong Kong, Morgan Stanley arranged 11 China-to-US IPOs during IFR’s review period, including the floats of electric vehicle maker Nio, used-car marketplace Uxin and video-streaming site Bilibili. Morgan Stanley also played a leading role in follow-on offerings for Chinese issuers, using its strong distribution capabilities. The bank single-handedly arranged the HK$7.82bn top-up placement of Chinese property developer Sunac China in December 2017, and, as one of the three joint bookrunners, helped South Africa’s Naspers sell a block of shares in Chinese internet giant Tencent Holdings in a record HK$76.95bn overnight trade. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

In a year when restrictions on capital outflows and geopolitical tensions made event-driven financings from China few and far between, China Citic Bank stood out from its peers with bold underwrites on two high-profile outbound M&A loans totalling over US$7bn. Citic Bank was sole underwriter on a US$3.5bn loan in October for Chinese miner Tianqi Lithium’s US$4.1bn acquisition of a 24% stake in SQM, the world’s No. 2 lithium producer. Four other lenders joined the facility, demonstrating Citic Bank’s ability to both lead and syndicate complex event-driven financings. It followed close on the heels of a €3.07bn (US$3.57bn) facility for Chinese auto firm Zhejiang Geely Holding Group in July. Citic Bank jointly underwrote the loan with BNP Paribas to support Geely’s purchase of an 8.2% stake in Swedish truckmaker Volvo. “We focus on providing financing solutions for M&A deals to clients. That is the key driver of our corporate banking strategy,” said Dong Yi, deputy general manager of China Citic Bank’s M&A finance department in Beijing. “It has proven to be a successful business strategy for us.” As well as beating heavyweight rivals to the mandates, Citic Bank needed to manage its risk, ensuring that loans were well structured and priced to clear the market. The Geely financing was particularly challenging, as news that its chairman had built a US$9bn stake in German automaker Daimler added to concerns that the company was being too aggressive in offshore acquisitions. However, seamless collaboration between Citic Bank’s teams in its Beijing headquarters and Hong Kong subsidiary Citic Bank International ensured smooth execution, with 14 other lenders joining the syndicate. Citic Bank first made waves in the international loan markets with its audacious US$30bn sole underwrite for China National Chemical Corp’s SFr43bn (US$43.45bn) takeover of Swiss seeds and pesticides producer Syngenta. That loan eventually ended up as a US$12.7bn recourse bridge loan a few months later, and Citic Bank was back in action as one of the key MLABs in March 2018, when ChemChina wrapped up a US$5.5bn takeout. Its success with ChemChina helped Citic Bank nab the mandates on other event-driven financings. “Our outstanding business capabilities and excellent service quality won credibility and trust from clients and partners,” said Raymond Wong, general manager of structured finance at Citic Bank International in Hong Kong. “We have been able to compete with international and domestic banking giants to win the mandates on a number of remarkable M&A financing deals.” Citic Bank’s other deals included a top-line role on the HK$29bn (US$3.69bn) five-year dividend recapitalisation and amendment and extension deal for Chinese shoe retailer Belle International Holdings in September. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

The Republic of the Philippines shook up China’s Panda bond market in March with an exceptionally tight debut that won enthusiastic participation from international investors. The Rmb1.46bn (US$210m) offering from the Baa2/BBB/BBB rated sovereign was the first sovereign Panda bond issuance from an Association of Southeast Asian Nations country. The three-year notes priced on March 20 in China’s interbank market at 5.0%, the low end of 5.0%–5.6% indicative guidance and only about 35bp over local benchmark China Development Bank, rated A1/A+ (Moody’s/S&P). Final pricing offered no premium at all over the Rmb10bn three-year issue of Central Huijin, a unit of sovereign wealth fund China Investment Corp, also priced at 5% a week earlier. Of the other sovereign Panda bond issuers so far, only South Korea (Aa2/AA/AA–), rated five to six notches higher than the Philippines, has priced at a tighter spread over CDB. Other sovereign issuers paid a premium of 60bp–103bp over CDB’s curve. The timing of the transaction was not particularly fortunate, with heightened volatility in the market prompting the leads to go out with conservative price guidance. But the Bond Connect link, which gives international investors direct access to China’s domestic market from Hong Kong, helped the deal by allowing overseas buyers to join, with especially strong support from sovereign wealth funds and Philippine banks. The issuer, no stranger to the international market, was confident about demand after a roadshow in Singapore, Hong Kong and Beijing, but the momentum of the bookbuilding far exceeded bookrunners’ expectations. In the end, the order book reached Rmb9.2bn, or 6.3 times the issue size, the biggest book and largest oversubscription for any of sovereign Panda bond to date and the tightest pricing among comparable sovereign issuers. Moreover, the deal garnered the highest international investor participation in China’s interbank market with offshore investors taking a numerically auspicious 88% of the notes in the end. The final allocation to Chinese onshore investors was just over 10%. Onshore bids made up half of the total order book, but most of them lost out to offshore accounts on price. The issue marked a significant demonstration of support by the Philippines for renminbi internationalisation and paved the way for other sovereign and commercial institutions in ASEAN to tap China’s onshore market. The deal also helped the Philippines to diversify the country’s financing using a natural hedge for Belt and Road infrastructure projects and, more importantly, to drum up mainland Chinese interest, which could be crucial in attracting infrastructure financing and expertise in future. The Philippines and the notes have AAA ratings from China Lianhe Credit. Bank of China was lead underwriter on the offering. Standard Chartered Bank (China) was joint lead underwriter. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

HSBC stood out among competitors with a book of business that ranged from leveraged loans for dividend recapitalisations to green financings for first-time borrowers. HSBC played a key role in arranging and underwriting the HK$29bn (US$3.69bn) five-year dividend recap and amendment and extension exercise for Belle International Holdings in September, despite not being part of the original acquisition facility in 2017. The new recap and A&E exercise was well-received with 15 other lenders joining in syndication. The bank led several borrowings in the property sector, including a sole underwrite of a HK$6.6bn three-year non-recourse acquisition term loan in February for Glory United Development, a former subsidiary of Henderson Land Development, as well as a sole mandate on the US$800m-equivalent three-year loan in July for Chinese property developer Greentown China Holdings, which attracted 17 other lenders. HSBC was also sole coordinator and bookrunner on a US$350m loan for Bank of Communications Macau branch in May, which was a repeat mandate for the bank following a HK$5bn-equivalent three-year term loan for BoCom International Holdings, a Hong Kong-listed subsidiary of Bank of Communications. HSBC was one of four MLABs on the latter loan, which drew in 20 other banks. “HSBC was the clear market leader in terms of bringing innovative and complex transactions to market that were well received by investors and, in many cases, oversubscribed and upsized,” said Phil Lipton, head of loan syndications for Asia-Pacific. In green loans, which are gaining traction with borrowers, HSBC was a frontrunner, taking the initiative to help create the Green Loan Principles and helping companies meet their environmental impact and sustainability targets. The bank was the sole MLAB and green structuring adviser for a HK$1.72bn three-year debut term loan for Hong Kong-listed Beijing Jingneng Clean Energy, which is the largest gas-fired power provider in Beijing. This borrowing too was quite popular with 17 banks joining despite the fact that the loan was changed into a pure Hong Kong dollar facility during syndication from a dual-currency structure at the time of launch. In addition to the debut loans for BoCom Macau and BJCE, HSBC also brought other new borrowers to the market, jointly leading the increased US$800m three-year bullet loan for CNCB (Hong Kong) Investment, a unit of China Citic Bank. HSBC was one four MLABs on the deal, which was widely syndicated with 20 banks joining. Another widely syndicated borrowing was a HK$4bn three-year refinancing in July for Citic Capital Holdings, an investment management and advisory unit of Hong Kong-listed Chinese state-owned conglomerate Citic. HSBC was one of six leads on the transaction, which drew in 21 banks in general syndication. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

In a domestic debt market roiled by rising yields and a high-profile default, AK Capital stood out with fresh ideas, including a market-leading smart city bond, and for helping restore confidence in non-bank financial institutions. AK Capital’s signature deal of the year was a Rs20bn (US$282m) 10-year bond offering by Andhra Pradesh Capital Region Development Authority for the greenfield development of the capital Amaravati, which has an estimated project cost of Rs510bn and is due to be completed by 2023-24. The so-called “smart city” bond issue was 1.53 times subscribed within an hour on the electronic platform. After assessing the cashflows from various projects, AK Capital suggested an optimal long-term structure with a five-year moratorium on principal payments. The bonds had an unconditional and irrevocable guarantee from the government of Andhra Pradesh, a trustee-administered escrow and payment mechanism, and adequate liquidity in the form of a debt service reserve account for six months, which helped earn ratings of AA– (structured obligation) from Brickwork Ratings and Acuite, and A+ (SO) from Crisil. Investors, including a few large domestic mutual funds, took comfort from the visible construction work at Amaravati, the state guarantee, additional funding from the World Bank and an attractive yield of 10.32%. Other urban bodies, such as Pune Metropolitan Regional Development Authority, quickly followed. AK Capital stood out with its efforts to expand the rupee bond market beyond the top tier of Indian issuers. It brought 23 low-rated and unrated issuers to the debt capital market during IFR’s review period, helping them raise a total of Rs52.3bn. India Shelter, Sadhbhav Infrastructure Projects, Piramal Realty and Future Supply Chain Solution were among the issuers to have successfully raised bonds. After the default of IL&FS caused panic and froze funding for non-banking financial companies, AK Capital helped HDFC’s Gruh Finance raise Rs11.5bn from commercial paper at 8.50%–8.55%, reopening the short-term debt market for good-quality NBFCs. It also assisted companies with public bond issues, under the new fast-track process. It was a lead manager for 11 public issues, including a rare visit from Tata Capital, after nearly a decade’s absence. It also adapted quickly to the use of the electronic bidding platform after the Indian regulator made it mandatory for issues of Rs2bn or more, participating in 48 issues, totalling over Rs292bn. AK Capital also won the role of sole adviser for India’s first debt exchange-traded fund, which is designed to help state-owned companies meet their capital expenditure and funding requirements by leveraging their aggregate strength, while deepening the corporate bond market. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

Citigroup cemented its leadership in the Indian equity capital market in 2018 with an unrivalled book of business despite challenging market conditions. After a blockbuster 2017, concerns over the falling rupee and regulatory restrictions over mutual fund investments in mid-cap companies turned investors – especially foreigners – wary on Indian equities early in 2018. A liquidity crisis at consumer and housing finance companies in the second half also rattled markets. Against this backdrop, Citigroup used its deep industry knowledge and broad client coverage to guide transactions through the turbulence. On the IPO front, Citigroup had a hand in some of the leading issues of the year, including the Rs28bn (US$396m) float of HDFC AMC – one of the best performing IPOs of the year – and the offerings of L&T IDPL, ICICI Securities, Varroc Engineering, TCNS Clothing and Aavas Financiers. The Rs17bn IPO of housing finance company Aavas in September was especially challenging. The float coincided with a sharp sell-off in Indian non-bank finance companies, following the default of Infrastructure Leasing & Financial Services, and the IPO was priced at a premium of around 33% to other listed housing finance companies on a price-to-book valuation. Although the IPO was only 97% subscribed, Citigroup ensured that the deal held together by keeping institutional investors engaged, both in the bookbuild and anchor tranches. L&T IDPL’s IndInfravit Trust, meanwhile, was the country’s first infrastructure investment trust to list through a private placement, bringing in Rs32bn, in an alternative to the underperforming public markets. Having managed six out of the eight block trades launched in the awards period, Citigroup continued to maintain its lead in the overnight block business with tight pricing and bold commitments. Three of the six deals, in Mahanagar Gas, L&T Finance Holdings and Hexaware, were done on a sole book basis. The biggest block of the year in India was Tata Sons’ Rs90bn sell-down in its flagship Tata Consultancy Services. Citigroup, one of the two bookrunners, helped build momentum by garnering early demand from local and foreign institutional investors. Tata Sons eventually increased the deal by 11% on the back of solid demand. The Rs35bn qualified institutional placement of Idea Cellular also demonstrated Citigroup’s ability to help its clients navigate difficult times. Intense competition had hit the earnings of all Indian telecom companies, but Idea Cellular was keen to raise capital before its planned merger with the Vodafone group. It had contemplated a rights offer, before taking Citigroup’s advice of an institutional placement. Idea went on to raise Rs35bn after a strong response allowed it to exercise an upsize option in full. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

Despite currency volatility, looming elections, and a challenging macroeconomic environment, Standard Chartered never missed a beat in Indonesia in 2018, leading the biggest and most challenging transactions of the year. StanChart introduced first-time borrowers to the international loan market, closed well-distributed deals and won repeat business from frequent borrowers. “Indonesia has been the bright spot for the South-East Asian loan market in 2018,” said Amit Lakhwani, head of loan syndicate and distribution, Asia at StanChart. “We executed some of the marquee deals completed during the year and led deals across a wide variety of sectors and industries.” The acquisition financing for Indonesia’s Adaro Energy and Australian private equity firm EMR Capital’s purchase of the Kestrel coal mine in Queensland was an example of StanChart’s ability to support a key Indonesian client with a complex financing package. StanChart – acting as joint mandated lead arranger, bookrunner, original lender and hedging bank – underwrote an all-encompassing financing comprising term acquisition financing, bridge-to-bond funding and a mezzanine piece. Although some of the financing pieces fell away as the acquisition progressed, 14 lenders ended up participating in the US$1.69bn senior loan, quashing any concerns that the coal sector would struggle to attract finance on environmental grounds. StanChart also brought debut borrowers to the market. It was one of three MLABs on Indonesian developer Agung Podomoro Land’s maiden syndicated loan. The company, which frequently taps bilateral loans and bonds, signed a Rp1.3trn (US$90m) two-year facility in September, with three other lenders joining, demonstrating StanChart’s ability to structure and syndicate local-currency transactions. The bank was also busy in the telecom sector – a testing industry for many lenders given the intense competition between local players. Telecom tower operator Solusi Tunas Pratama’s US$587m-equivalent loan, Centratama Telekomunikasi’s debut US$195m facility and Tiphone Mobile Indonesia’s US$181m-equivalent three-year revolver all drew strong responses from the market. StanChart also played key roles for financial sector borrowers. It was one of the original MLABs on Indonesia Eximbank’s largest offshore loan, helping the borrower close a US$1.15bn triple-tranche financing in July. That followed a joint lead role on a US$126.5m new-money loan for heavy-equipment dealer Chandra Sakti Utama Leasing in April. The bank’s ability to win repeat business showed in its lead roles in STP’s US$587m loan, Transmedia’s US$300m refinancing in April, Delta Merlin Dunia Textile’s US$215m five-year loan signed in July, car rental company CSM Corporatama’s US$156m facility in May and Delta Dunia Tekstil’s US$150m loan in January. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .

Jasa Marga opened an alternative source of funding for Indonesian issuers with the first offshore rupiah bond, creating a new asset class for global investors and a new way of channelling funds into Asian infrastructure. The toll-road operator’s Rp4trn (US$276m) three-year Komodo – named after the giant Komodo lizard native to Indonesia – drew orders of Rp15trn, demonstrating the market’s huge potential and allowing it to price at 7.5%, which was 37.5bp inside initial guidance. The December 2017 issue gave global asset managers a way to take exposure to the country’s infrastructure story, while also allowing Jasa Marga to manage its currency risk, following a concerted effort by Bank Indonesia to encourage companies to avoid taking excessive foreign currency risk in their borrowings. As a result, the instrument is likely to be crucial to financing President Joko Widodo’s infrastructure ambitions and attracting foreign capital without adding unnecessary currency risk for the country’s infrastructure developers. The issue paid a slight premium over onshore bonds from other state-owned issuers, while investors were able to earn a pick-up over the Indonesian sovereign’s offshore bonds if they swapped to dollars. All the same, the pricing and size were unexpectedly good for an issuer that had never sold offshore bonds in any currency before. Jasa Marga also absorbed the withholding tax for offshore investors, making the offering more attractive for them than venturing into the onshore corporate bond market. Notably, the issue came at a time when Dim Sum and Masala bond issuance volumes were in the doldrums, making it far from obvious that foreign investors would be receptive to an offshore rupiah offering, while the split Baa3/BB+ (Moody’s/S&P) rating meant that the deal was less straightforward than a typical investment-grade transaction. Offering the bonds under 144A/Reg S format brought them to a broad audience, including US investors traditionally keen on Indonesian credits. The chunky issue size addressed investor concerns about liquidity, while also beating the typical onshore corporate deal. Indonesian investors bought 15% of Jasa Marga’s bonds, 40% went to the rest of Asia, 26% to the US and 19% to European investors. By investor type, fund managers bought 84%, and banks, public institutions and private banks took a combined 16%. Deutsche Bank, HSBC, Mandiri Securities and Standard Chartered were joint bookrunners. The slump in emerging market currencies in 2018 meant that the Komodo market did not quite live up to the potential shown in the first issue, but a well-received follow-up transaction from engineering and infrastructure company Wijaya Karya the next month proved that Jasa Marga had awakened international investor interest. There is a pipeline of issuers looking to follow when conditions improve. To see the digital version of this review, please click here . To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com .