Reg S: A weary Reg contemplates his future

China’s internet censors may have a dim view of Facebook, but that has not stopped it from being a model of sorts for the country’s securities regulator. At a regular training seminar last week, the China Securities and Regulatory Commission urged IPO bankers to learn from the risk disclosures in Facebook’s listing prospectus. The remarks underline China’s determination to transform its existing IPO system – where regulators decide if a company is fit to come to market – into a more disclosure-based model that trusts investors to judge the...

Source: Reuters/Brendan McDermid TD Ameritrade President and CEO Fred Tomczyk gives an interview on the trading floor following his company’s stock transfer to the New York Stock Exchange The cancellation of a US$138m Nasdaq IPO for China Auto Rental last week sent a clear sign that US investors have turned their backs on Chinese listings. “It’s the worst response for a US listing I have seen in my entire career,” said a banker on the transaction. “We knew, from the start, US investors had a negative view on China listings, but it turns out the...

Workers were reporting for duty as usual last week at Shandong Helon’s factory in the Chinese city of Weifang, apparently unconcerned about the company’s precarious financial situation. “How can it go bankrupt – isn’t it a government factory?” a Helon worker said in response to questions about whether he was aware of the company’s potential bankruptcy. “I’ve been paid on time every month,” said another. The workers’ faith in the local government mirrors the attitude of many investors in China’s burgeoning debt capital markets – and for good...

Source: Reuters/Stringer Malaysia To match Analysis MALAYSIA-FELDA Malaysia’s Felda Global Ventures has kicked off the process for its IPO of up to US$2bn, but only after abandoning a structure that had held up the deal since February. The state-owned plantation operator had originally planned for the listing vehicle to include some assets of Koperasi Permodalan Felda, a settlers’ co-operative, with the transfer of KPF’s shares in Felda Holdings to the listed entity and making Bumiputera farmers FGV’s largest shareholders with a stake of 37%....

For the second time in six months, Indonesia’s influential Bakrie family is facing a financing crunch. Lenders to a US$437m financing backed by shares in London-listed Bumi PLC served notice on April 20 after a covenant breach. The notice required the Bakrie Group to deposit cash of around US$100m with lenders before the end of last Friday to bring back the loan’s collateral coverage to 1.54 times. Failure to do so would constitute an event of default that could lead to lenders demanding prepayment of the entire facility. At close of business...

Source: Reuters/Erik de Castro Philippine President Aquino waves during a groundbreaking ceremony of the relocation site for tropical storm Washi survivors in Iligan Investors are again warming up to offshore local currency bonds – and the Republic of the Philippines has taken note. Even though bankers said a sovereign Global peso bond was not imminent, they admitted that modelling and pitching the security had started in earnest. A treasury official told IFR in mid-April that the country was aiming for a return to the international market with...

Source: Reuters/Bobby Yip Asian Development Bank President Haruhiko Kuroda speaks during the Asian Financial Forum in Hong Kong Asia’s local currency bond markets are enjoying explosive growth, with a broader range of issuers and maturities now a feature across the region, according to the Asian Development Bank. The ADB’s latest quarterly Asian bond monitor, released last week, is a timely reminder that the local markets remain an important corporate funding tool even as international bond sales are booming. Summarising the 110-page report...

Source: Reuters/Supri Supri A worker walks as tank trucks are being refuelled at the Pertamina refuelling depot in Jakarta Indonesia’s Pertamina sold a sizable US$2.5bn two-tranche deal on Thursday at a juicy new-issue premium relative to its outstanding debt. While some are wide-eyed at the sudden generosity, traders say it is the price borrowers have to pay in a crowded and uncertain market. At the final pricing level, the state-owned energy company offered a 20bp new-issue premium for both the 10-year and the 30-year bonds, taking Pertamina...

Credit trading in Asia was counterintuitive last week. The investment-grade market reacted to the Federal Reserve’s statement and Spain’s downgrade by softening, but the high-yield space, usually more tied to overall market trends, traded up. One senior analyst in Singapore simply described the trading momentum as “weird”. “The market was very firm ahead of the Fed and, then, weakened on the back of a dovish statement and ended the week shakier, which accelerated after Spain was downgraded,” he said. Probably more interesting was the sudden pop...

Source: Reuters/Edgar Su Second-placed McLaren Formula One driver Button drinks champagne with race winner Red Bull driver Vettel on the podium after the Singapore F1 Grand Prix at the Marina Bay street circuit in Singapore One of the biggest foreign listings expected in Asia this year, the US$2bn Singapore IPO of motor sports competition Formula One, last week added more banks. However, the market was quick to jump to conclusions as to why each was added. Goldman Sachs and UBS had already been named joint global co-ordinators, with Morgan...

Standard & Poor’s is highlighting the increasing risk of default among China property companies amid falling sales and in the face of a looming refinancing burden. In a research note last Tuesday, the ratings agency observed that the 30 China property developers it rated faced a combined refinancing burden this year of Rmb100bn (US$15.9bn). It added that this was the “tip of the iceberg in a sector with over 80,000 companies”. Underlying the gloomy sales outlook is China’s regulatory stance on the property market, which remains solidly...

The Bank of East Asia (China) will meet fixed income investors on Wednesday to explore an issuance of offshore reminbi-denominated senior bonds. It will hold a one-day roadshow in Hong Kong. Bank of East Asia, BNP Paribas and HSBC are joint leads on the deal. Bank of East Asia (China) was among the lucky 10 domestic banks to obtain approval from top Chinese economic planner National Development and Reform Commission this January to issue bonds in Hong Kong to raise a combined Rmb25bn (US$3.96bn). It is believed that BEA China has a Rmb1bn quota...