REG S: Budget cuts crimp Reg's client entertainment

Anil Ambani’s Reliance Communications has been saved from a potential financing crunch with a surprise US$1.1bn loan from a group of Chinese state-owned banks. RComm will use the new funds to repay a US$1.2bn convertible bond due for redemption on March 1, putting an end to fears of a potentially devastating default. The loan has raised eyebrows as a rare instance of Chinese support for one of India’s biggest business groups. China Development Bank, Export-Import Bank of China, Industrial and Commercial Bank of China and other lenders...

Source: Reuters/Daniel Munoz An office worker leaves the Commonwealth Bank of Australia building in central Sydney . Last week’s record-breaking deal from Commonwealth Bank of Australia may have confirmed the enormous potential of Australia’s fledgling covered bond market, but it also repriced the wider financial sector. CBA made a dramatic entrance in the local covered bond market with a generously priced A$3.5bn (US$3.61bn) dual-tranche, jumbo five-year offering on January 17. CBA’s initial guidance of 180bp–190bp over mid-swaps was 20bp–30bp...

Source: Reuters/John Javellana A man on a trishaw cycles past a sign showing gasoline prices of Petron products in Metro . Oil refiner Petron Corp last week added to its free float through a Ps7.6bn (US$174m) block trade. However, the bookrunners’ struggle to complete the deal showed the scale of the challenge facing companies looking to raise capital in the Philippines’ illiquid equity market. On January 17, Petron Corp Employees’ Retirement Plan sold 695.3m shares in Petron, equivalent to a 7.4% stake and one of the largest blocks ever from...

Source: Reuters/Beawiharta Beawiharta A Pertamina worker walks near gas pipelines at Cimalaya Onshore Receiving Facility near . Indonesia’s elevation to investment grade by two rating agencies within a month could trigger a rush to issue bonds as borrowers head to global markets to take advantage of lower funding costs. Sovereign, quasi-sovereign and local currency government bonds should be the big winners, although the impact from Indonesia’s entry into global benchmark indices will be limited because of a small weighting and already low...

A brace of bond sales from low investment-grade Chinese credits has raised hopes that Asia’s first high-yield new issue of the year may be on the horizon but bankers cautioned that the risk-on mindset was unlikely to translate into demand for deals further down the credit curve. Department store operator Lifestyle Holdings, rated Baa3/BBB– (Moody’s/Fitch), raised US$300m. This deal followed a debut bond from property developer Nan Fung Holdings, rated Baa3/BBB–/BBB (Moody’s/S&P/Fitch) on January 13, hinting that investors are regaining their...

Source: Reuters/Vivek Prakash A man is reflected in a Temasek Holdings logo at their offices in. Temasek Holdings took another step to reduce its controlling stake in Thai telco Shin Corp with a Bt8.08bn (US$254m) block trade on January 18. It sold 200m shares, equivalent to a 6.2% stake, at Bt40.40 each, the bottom of the Bt40.40–Bt41.60 guidance and a 7.13% discount to the pre-deal spot. The transaction cut the stake of Temasek subsidiary Cedar Holdings in Shin Corp to 38% from 44.2%, and will also increase the company’s free float to 20.4%...

Longjiang Bank is looking to lead the next wave of overseas listings from China’s financial sector. The commercial lender, based in Heilongjiang Province, is eyeing a US$500m listing in the second half of this year. If Longjiang succeeds, it will be the first city commercial bank to float overseas, testing Hong Kong’s appeal as a listing venue for China’s smaller lenders. Longjiang’s decision to target overseas investors will lift spirits in Asia’s equity capital markets, introducing a potentially huge new sector to the international arena....

Source: Reuters/Siu Chiu AIA Executive Director and Group CEO Mark Tucker attends a news conference in Hong . Asian loan markets are hoping for a big boost from AIA Group’s proposed acquisition of ING’s insurance operations in the region with a rare loan tap from an insurance entity. AIA Group is expected to fund the acquisition partially with a loan and banks are keen to participate in any funding of the acquisition, which, if successful, would be Asia’s biggest insurance sector M&A transaction. Last week, the Hong Kong-listed insurer was...

There has been a rise in Asia of first-time issuers turning to the bond market to raise funds, as the eurozone crisis has forced European banks to pull back on loans in the region. Generally, the pullback has led to shrinking liquidity, wider loan spreads and more prudent lending policies, driving more Asian borrowers into the capital market. “The withdrawal of European banks has driven up loan spreads. US and Asian banks have taken up some of the slack, but they cannot totally replace the gap the European banks have left,” said Arthur Lau,...

China’s securities markets are set for an extensive overhaul, if a government-endorsed local daily is to be believed, to counter criticism about the country’s IPO pricing system. Among the new measures expected to be introduced is the Dutch auction pricing system, which has already prompted an intense debate. Securities Times, one of major four Chinese Government-backed securities dailies and which the China Securities Regulatory Commission often uses as a propaganda tool, reported on January 16 that PRC regulators would introduce a set of...

Jonathan Rogers, IFR Asia Senior Credit Analyst What do we think of when we think of Vietnam? Inescapably, of course, the war – which has shaped the country’s mindset in ways most will struggle to understand. Perhaps the literary-minded will recall Graham Greene’s 1950s novel the Quiet American and its proposition that Vietnam would thrive not under colonialism or communism but under a “Third Force” based on a combination of local traditions. Greene didn’t mention the bilking of foreign investors as one of those traditions. But overseas...

The Hong Kong Monetary Authority has made some critical changes to its offshore renminbi market regulations to maintain its dominance and face up to rising competition from financial centre hubs like London, Singapore and Dubai. On January 17, the HKMA expanded the limit for renminbi net open positions to 20% from 10% and the list of eligible assets under its liquidity requirements. “This (the HKMA move) will, in turn, translate into better market liquidity since it gives AIs (financial institutions) more room to lend CNH liquidity when there...