Citigroup’s forte is the selective use of its massive balance sheet and a sharp focus on syndicating risk, and those attributes stood it in good stead in Asia’s loan markets in 2018 as volatile financial market conditions led to fewer plain vanilla opportunities and added pressure to generate returns.
“Citi’s strength is evident in the depth and breadth of deals it closed, as well as thought leadership demonstrated in bespoke structured financing advisory – for example, bridge-to-bond, liability management and loan/bond/equity combo solutions for borrowers’ evolving needs,” said Benjamin Ng, Citigroup’s head of debt syndicate, loans and acquisition finance in Asia.
The bank started the review period well, wrapping up a US$4.1bn leveraged financing supporting the acquisition of GLP, Asia’s biggest warehouse operator. Citigroup acted as equal underwriter and joint M&A adviser with one other bank, navigating structural challenges for the financing and the unique nature of the business.
The loan, which made possible one of the largest leveraged buyouts from Asia, closed in December 2017 with 13 other lenders, representing a good mix of US, Asian and European banks.
Another event-driven financing that stood out was a NT$90bn (US$2.91bn) five-year term loan in April backing Advanced Semiconductor Engineering’s planned merger with peer Siliconware Precision Industries. Citigroup was coordinator on a facility that attracted 37 other banks and is Taiwan’s biggest and most widely syndicated acquisition financing ever.
Citigroup was also instrumental in a US$2.85bn 18-month bridge loan backing state-owned Indonesian miner Inalum’s purchase of a controlling stake in Freeport-McMoran’s local unit, before helping place a US$4bn offshore bond that cancelled out the loan.
In Malaysia, Citigroup acted as sole coordinator and underwriter on a US$310m acquisition loan in March for Top Glove’s acquisition of Aspion, the world’s largest surgical glove maker. The loan was split into conventional and murabaha structures, helping Top Glove maintain its mix of conventional and Islamic debt.
In May, Citigroup was one of two physical bookrunners on the first sterling-denominated Term Loan B for an Australian LBO – a £301m seven-year covenant-lite facility to finance private equity giant Carlyle Group’s purchase of Accolade Wines, the fifth-largest wine producer in the world.
India proved a fertile hunting ground for Citigroup despite intense competition and pricing compression. The US bank picked its spots well in the country, bagging lead roles on unusual opportunities such as the repricing and conversion of a US$250m brownfield project loan from 2016 for Fiat India Automobiles into a corporate financing. The exercise marked a rare amendment of an external commercial borrowing under Indian regulations.
Citigroup also distinguished itself as one of the three key banks among 20 lenders on a US$2.275bn acquisition financing in November for Aditya Birla’s US-based aluminium producer Novelis. The bank dodged the pitfalls of India’s troubled financial sector, but was still an active player as one of the nine leads on a US$750m five-year loan for Housing Development Finance Corp, which closed in November with 12 other participants.
In August, Citigroup helped Charoen Pokphand Indonesia, the country’s largest poultry feed maker, to complete a US$630m-equivalent liability management, repricing and extension exercise for loans signed in 2014 and 2015.
Citigroup also showed its abilities in the aviation sector with a US$1.27bn secured loan in July for New York-listed Fly Leasing’s purchase of aircraft from Malaysian budget airline AirAsia. Citigroup was one of four original mandated lead arrangers and bookrunners on the borrowing, which attracted 14 other lenders. The bank was also involved in other popular aircraft leasing deals for BOC Aviation, Australia’s Macquarie AirFinance and SMBC Aviation Capital.
Citigroup also sparkled in domestic markets with a Tk29.3bn (US$353m) dual-tranche loan in January for Banglalink Digital Communications, the largest local currency syndicated financing in Bangladesh.
Debut borrowers in Citigroup’s roster included the likes of China’s online games and internet media provider NetEase and Indonesian state-owned electricity utility Perusahaan Listrik Negara, with both attracting strong responses from lenders.
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