Australia/New Zealand Loan House
In a highly competitive market, Westpac Banking Corp showed consistency and leadership across a wide range of transactions, spanning leveraged, corporate and project financings.
The bank led 32 deals during IFR’s review period. Twelve were on a sole basis with a combined value of more than A$1.48bn (US$1.1bn). A number of these lead roles were in the sub-investment grade segment for leveraged buyouts or smaller companies, adding to the challenge.
“We played in a lot of different spaces this year. We’ve always focused on deals that require a more complex solution and we don’t chase deals for the sake of volume,” said Russell Sinclair, head of loan syndications and acquisition finance. “We spend time on transactions where we think we can add value for the client and these are deals which are harder to pull together and require more effort to syndicate.”
Highlights include a A$230m underwritten deal for Australian Hospital Partners’ takeover of Pulse Health and three private hospitals. The loan, which was syndicated to five other lenders, was the company’s first syndicated financing since it was taken over by China’s Luye Medical Group in 2015.
Westpac also led a A$170m leveraged buyout loan for Quadrant Private Equity’s takeover of three companies in the tourism sector. The bank put together a flexible financing structure that allowed Quadrant to combine the three acquisitions, and syndicated the loan to five other lenders.
“In the leverage space, the smaller mid-market deals where you are not dealing with global sponsors do not attract the same pool of liquidity and you have to really understand the credit story, so they can be a bit harder from the underwriting perspective,” said Neville Grace, a director in the loan markets group.
In the infrastructure sector, Westpac showed its credentials as a leading project finance house as an underwriter of the A$1.7bn loan to develop the second phase of the WestConnex project, one of the largest greenfield financings in Australia this year. The project is the first toll road in Australia where lenders had to assume some traffic risk since high-profile bankrupticies in Brisbane and Sydney.
The bank was also part of a large lead group of banks that provided the mammoth A$12.65bn financing to back Industry Funds Management and AustralianSuper’s acquisition of a controlling 50.4% interest in New South Wales energy distributor AusGrid.
After a subdued first half, refinancing activity in Australia began to pick up later in the review period. Among the largest was a A$2.4bn multi-tranche refinancing for Australian telecommunications firm TPG Telecom, led by Westpac and two others. The loan extended existing debt as well as raised new money to fund a planned roll-out of a new mobile phone networks in Australia and Singapore.
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