HNA: Acquisition of 3% of Deutsche

Mongolia is set to return to the US dollar bond market this week, after reaching a US$5.5bn funding agreement with the International Monetary Fund on February 19. The following day, the country announced an exchange of state-owned Development Bank of Mongolia’s 5.75% March 21 2017 bonds, which carry a state guarantee, into sovereign paper. Price guidance on the new seven-year sovereign notes indicated a minimum yield of 8.75%, far less than the 10.875% Mongolia offered on a US$500m five-year sovereign bond in March 2016. The exchange offer...

A clampdown on private share placements sent a shockwave through China’s equity market last week, threatening follow-on offerings worth at least Rmb32bn (US$4.65bn). In less than a week after the China Securities Regulatory Commission announced the new rules on February 17, at least 23 companies said they had either scrapped or decided to overhaul private share-placement plans. “We have called an urgent meeting and examined all placement transactions in our pipeline, based on the new rules, to find out which deals need to be adjusted,” said...

Hong Kong’s securities regulator last Wednesday halted trading in GME Group shares just hours after its debut, intensifying a crackdown on IPOs that fail to attract a broad investor base. The Securities and Futures Commission ordered the suspension of the GEM-listed underground construction services company after its stock price soared more than 500% during the morning session. The suspension reflects the commission’s view that there may not have been an open market in the company’s shares, according to a GME announcement. The regulator’s...

HSBC Holdings plans to issue about US$30bn of loss-absorbing debt this year, in line with the US$31bn sold in 2016. This would result in a more than doubling in TLAC servicing costs to US$900m from US$400m last year, finance director Iain Mackay said last week after the release of HSBC’s 2016 results. Mackay said the numbers were in line with previous guidance, but reflected the cost of issuing bail-in-able debt designed to address the problem of too-big-to-fail banks. HSBC has said it expects to issue between US$60bn and US$80bn of...

Longfor Properties last week printed the first Green paper from a developer in China’s interbank bond market, joining a fast-growing pack of issuers even as uncertainties remain over the market’s long-term prospects. China’s Green bond market has expanded rapidly since the government gave its blessing to the asset class in late 2015 to address mounting pollution. New China offerings accounted for one third of global Green issuance in the past year, according to data from rating agency China Chengxin. The issuer base is rapidly diversifying...

Australian gas and electricity utility Alinta Energy has begun premarketing a A$2bn (US$1.5bn) IPO, less than three months after pulling an earlier try due to market turbulence after the US elections. With the runway now clear, Alinta has embarked on investor education and is slated to hit the ASX boards in mid-April. It is the country’s largest IPO in the pipeline for 2017, and market participants are expecting a strong response. “There won’t be much volatility in the business; it will be a pretty safe bet,” said one Sydney-based fund manager...

An Indian state has tried a new structure to rebalance the debt of its struggling power distribution companies, setting a new template for other regions to follow as they seek a lasting solution to the financial troubles of electricity boards. Uttar Pradesh Power (UPPCL) raised Rs65.1bn (US$970m) from state government-guaranteed rupee bonds, using an account at the Reserve Bank of India as a backstop to provide investors more security than previous prints. UPPCL is the holding company for the state’s five power distribution companies, known...

Overwhelming demand for the A$12.777bn (US$9.85bn) loan backing the acquisition of Australian energy distributor AusGrid has raised expectations for secondary market activity. Asian lenders were scaled back significantly on AusGrid’s jumbo financing as the 15 mandated lead arrangers and bookrunners held on to more than 75% of the loan, despite large commitments from banks joining in syndication. Bank of China, for example, ended up with A$787m, less than half of the A$2bn it committed to the loan, while Norinchukin Bank was allocated close to...

Commerzbank reopened the Singapore dollar market for overseas lenders last week with a Tier 2 issue that attracted a diverse pool of investors. The bank sold S$500m (US$353m) of 10-year non-call five Tier 2 notes at par to yield 4.875%, well inside initial guidance of 5.25%. It is the first overseas issuer to visit the Singapore dollar market since October, as well as the first German issuer to sell T2 bonds in the currency. The last T2 offering from an overseas bank in Singapore was back in May 2016, when French bank BPCE met with a subdued...

The Australian Office of Financial Management smashed numerous records last Wednesday with a giant fundraising that showed the Commonwealth government has no problems plugging the country’s budget deficit. The syndicated sale of new November 2.75% 21 2028 Treasury bonds raised A$11.0bn (US$8.47bn), eclipsing the previous biggest A$9.3bn print of 2.00% December 21 2021s on January 18, after attracting a record A$20.9bn order book. The resounding response put in perspective talk of reduced investor appetite as a result of sovereign downgrade...

United Overseas Bank last week became the first Asian issuer to sell covered bonds in two currencies simultaneously, as it returned to the market after its debut last year. On Wednesday, a €500m (US$528m) five-year tranche priced at 99.498 with a 0.125% coupon to yield 10bp over mid-swaps. Pricing had tightened from initial guidance of mid-swaps plus 14bp area. That put it between the secondary levels of its earlier euro covered bonds due 2021 and DBS’s 2024 covered bonds, priced at mid-swaps plus 15bp, indicating that it had priced at fair...

Indian state-owned companies will have just under six months to launch their IPOs once plans are agreed, under a new government guideline designed to end perennial privatisation delays. The Department of Investment and Public Asset Management (Dipam) said last week that a state-owned enterprise (SOE) should launch its IPO within 165 days of the relevant federal ministry’s decision to sell the shares. The sudden urgency is welcome news for the capital markets, as no SOE has completed an IPO since the Rs1.3bn (US$19m) listing of National Building...