Loan House; China, Hong Kong and India Loan House: Standard Chartered

IFR Asia Awards 2021
8 min read
Apple Li, Evelynn Lin, Mirzaan Jamwal

Sharp focus

As the coronavirus pandemic continued to hang over the region, Standard Chartered set itself apart with its sharp focus, leadership and navigation of challenging market conditions. For winning several sole mandates, underwriting event-driven financings and well-distributed deals, the bank is IFR Asia’s Loan House of the Year, China, Hong Kong and India Loan House.

Standard Chartered began the year with a restructuring of its corporate finance business, absorbing the corporate finance team into the larger global credit markets business and creating three new groups with the aim of bringing all credit origination and distribution functions under one roof.

“At the start of 2021, we integrated our origination and distribution activities across corporate finance and financial markets into a single global credit markets vertical, allowing us to sharpen our delivery and offering of holistic solutions to our clients to meet their funding needs at a time when they have continued to tackle the challenges arising from the pandemic and the resultant volatility across markets,” said Cristian Jonsson, global head of financing risk, global credit markets at StanChart.

Financing risk, financing solutions, and leveraged and acquisition finance were the new verticals created.

The move paid dividends as StanChart secured a number of lead roles on leveraged buyout and event-driven financings across Asia Pacific.

For example, StanChart was sole bookrunner on a S$450m (US$339m) debut loan in April that formed part of a S$1bn debt package for the merger between Singlife and Aviva Singapore – the largest insurance M&A deal in Singapore. The borrowing closed with 16 other lenders joining in senior syndication.

StanChart also impressed with its lead roles in India, where LBO loans jumped to a record high as private equity firms shifted their focus to the country as a counter to a slowdown in China.

The bank won a top-tier position on the largest LBO loan out of India – a US$817.9m five-year financing backing PE giant Blackstone’s acquisition of IT outsourcing services provider Mphasis that closed in September with 34 lenders participating. The bank was one of two left leads with the largest underwrites on the borrowing, setting it apart from the rest of the 13-strong arranger group.

Similarly, StanChart was also among the four top-tier banks with larger commitments than the rest of the initial eight-bank underwriting group on a US$570m loan backing Baring Private Equity Asia’s LBO of the healthcare services division of Hinduja Global Solutions. The transaction closed in November, attracting 13 lenders in syndication.

In August, StanChart was one of six banks providing a bridge-to-bond financing of around US$1bn to support PE giant Carlyle Group’s LBO of Indian IT solutions provider Hexaware Technologies. The bank was also a joint bookrunner on a US$1.01bn bond priced in late October, marking the largest takeout of a bridge loan in a financial sponsor-related situation from India.

Other notable leveraged financings from India included a US$327m refinancing in July of an LBO loan for BPEA’s portfolio company Coforge (formerly NIIT Technologies). The deal closed with 10 banks joining and was a repeat mandate for StanChart.

In May, as one of six bookrunners, StanChart closed a US$355m five-year term loan for Blackstone’s buyout of Piramal Glass. The financing attracted 14 other lenders in syndication.

“We focused our origination efforts on identifying the sectors that were largely insulated from the impact of Covid-19 and structured distribution-led solutions across onshore as well as offshore, US dollar and Indian rupees,” said Amit Lakhwani, head of loan syndicate and distribution for Asia Pacific. “We were extremely active in the financial sponsor-led leveraged finance space, which was the big driver of market activity during the year.”

Event organiser

Undeterred by increasing competition from Chinese lenders willing to provide aggressive terms, StanChart maintained its focus as an active bookrunner in event-driven financings in China and Hong Kong, successfully underwriting and syndicating several landmark transactions.

In Hong Kong, StanChart was sole underwriter on a HK$5.29bn (US$681m) green loan backing the buyout of 1111 King’s Road by a Gaw Capital Partners-led consortium. The bank offered a pre-funding solution at a time when sentiment and outlook for the Hong Kong office property sector was uncertain, and closed the deal in May.

It was also lead-left on a HK$2bn debut loan backing the take-private of fashion retailer IT, despite the headwinds for the sector at the height of a fourth wave of infections in Hong Kong.

Other large acquisition financings included a HK$15.9bn 364-day bridge loan backing JD Property Group’s purchase of a controlling stake in Hong Kong-listed China Logistics Property Holdings in October, a HK$18bn 364-day bridge loan backing SF Holding’s proposed acquisition of a majority stake in Kerry Logistics Network in May and a A$2.23bn (US$1.66bn) loan for ESR Real Estate (Australia) for its acquisition of private equity giant Blackstone’s logistics portfolio.

StanChart’s ability to bag several sole mandates from borrowers across the region stood out even as deal flow remained unpredictable amid challenging market conditions and fierce competition among arrangers. Nearly two dozen sole mandates came in China and Hong Kong and more than a dozen deals came from debut borrowers.

“We were quick to pivot and refocus our origination and distribution efforts to respond to the changing market conditions witnessed during the year, navigating through shifting borrower funding requirements, emerging headwinds in certain sectors and the evolving regulatory landscape,” said Lakhwani.

The bank identified changes in appetite among lenders as China pursued a policy to achieve net-zero carbon emissions by 2060, and reintroduced credits from the solar energy sector to the market after a three-year hiatus. Deals included a US$246m-equivalent loan for Chint Solar, which attracted 18 lenders in syndication, and a US$200m facility for solar cell maker Tongwei Solar, which drew 16 other banks.

The syndication of a US$300m debut loan for online travel agency Tongcheng-Elong also showcased StanChart’s accurate market read as China’s domestic travel industry showed signs of recovery, despite the continuing challenges of the pandemic.

StanChart impressed with another sole mandate for Hong Kong-listed city gas distributor Zhongyu Gas Holdings. The US$565m three-year loan closed in November with 15 other lenders joining. Other debut transactions across a range of industries included a US$300m loan for Shanghai Lingang Overseas Development, a US$209m loan for Huayou Cobalt, and a US$150m loan for Huadong Medicine.

The bank was one of the two mandated lead arrangers and bookrunners of a US$1bn loan for Sany Heavy Industry, a manufacturer of high-end construction equipment, introducing 16 new banking relationships to the borrower, which returned after a nine-year absence in September.

A US$1.35bn green loan for India’s Adani Green Energy highlighted StanChart’s sustainable credentials. The bank was the only underwriter among the 12 leads on the deal, which also stood out for the participation of Bayfront Infrastructure Management and Hong Kong Mortgage Corp – the first time the two lenders had committed to an Indian renewable energy financing.

StanChart led many other financings across the region, including a US$6.5bn loan for Chinese e-commerce giant Alibaba Group Holding, a US$8.3bn facility for Tencent Holdings, a US$1.5bn dual-tranche borrowing for state-owned miner Mining Industry Indonesia and a US$800m two-part transaction for Vietnam Technological & Commercial Joint Stock Bank (Techcombank).

The varied list of financings across the region showed StanChart’s ability to read market conditions and distribute risk, making it stand out from the pack.

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