Reg S: Schaden puts LTRO funds to good use

Intense squabbling among banks over who should gain most credit for this week’s US$6bn equity selldown in AIA added drama to an already market-defining transaction. It was the largest selldown in Asia this year and the second-largest block trade in Asia ever. The much-publicised deal, launched on the morning of March 5, saw AIG offload AIA shares in an effort to repay its debt to the US Department of the Treasury. The Treasury bailed out AIG during the financial crisis to the tune of US$182bn. In term sheets sent to investors, Deutsche Bank and...

Source: Reuters/Vivek Prakash A woman walks past the OCBC Bank building in Singapore Asia is on course for a year of record bond issues in US dollars as a result of a combination of pre-funding rush, costly loan markets and the region’s growing importance. The current record stands at US$83.4bn set in 2010. However, in the first two months of the year, Asia ex-Japan has already printed US$30bn in new dollar bonds, or 39% of the 2011 total of US$76.2bn. Despite the solid supply, the strong oversubscription rates of the latest deals suggests...

Source: Reuters/Crack Palinggi The logo of Indonesia’s No. 5 coal miner PT Berau Coal Energy is pictured during a news conference in Jakarta Indonesia’s Berau Coal turned heads last week, attracting US$9.5bn in orders for its US$500m five-year bond offering. However, this does not mean Asian high yield is ready for a comeback just yet. Although the deal came on the heels of strong demand for another Indonesian issue from power utility Cikarang Listrindo last month, high-yield deals in Asia are a rarity this year, despite the fact that...

Source: Reuters/Daniel Munoz An office worker leaves the Commonwealth Bank of Australia building in central Sydney Commonwealth Bank of Australia defied critics who questioned if an issuer could sell covered and senior bonds simultaneously. It attracted a combined book heard to be around US$8.6bn for last Monday’s US$4bn five-year covered and three-year senior bonds. Syndicate bankers were initially sceptical as to how the dual-tranche offering would be received and raised concerns about the dangers of overlapping investors. “This is...

Tata Communications will rely heavily on the Tata Group allure to attract banks to a U$2bn acquisition loan. The unit of Tata Group is seeking the loan to make a potential bid for the UK’s Cable & Wireless Worldwide, in what will be the biggest-ever facility for the Indian telco. Mumbai-listed TCL’s bid for C&W Worldwide, as well as the proposed loan, has prompted mixed views. A handful of banks, including ANZ, HSBC, RBS, Standard Chartered and State Bank of India, are expected to form the arranger group on the loan, which is likely to be a...

Source: Reuters/Jason Lee Guo Shuqing, chairman of China Securities Regulatory Commission After years of behind-the-scenes manoeuvring, China is finally taking decisive steps to establish a domestic high-yield bond market. The first high-yield deal is expected to hit the tape before June – possibly much sooner – with small and medium enterprises from several cities and sectors likely to feature among the initial batch of issuers. The China Securities Regulatory Commission held closed door meetings on March 1–2 with the PRC’s big securities...

The success of Emirates NBD’s debut Dim Sum bond last week shows the promise of the Middle East as a market for the renminbi-denominated securities. However, the lack of local investor participation also points to the hurdles that lie ahead. Emirates NBD priced at 4.875% a three-year bond of Rmb750m (US$119m) in the first foray of a Gulf credit into the Dim Sum market. The deal had plenty of takers, drawing a solid order book of over Rmb4.3bn from more than 95 accounts and pricing finished at the low end of the 4.875%–5.00% range. Hong Kong and...

Source: Reuters/Steven Shi Chairman and Chief Executive of Alibaba Group Jack Ma delivers a speech at the 8th Netrepreneur Summit in Hangzhou Chinese e-commerce company Alibaba Group is paying among the juiciest returns in Asia to woo lenders and expand the arranger group on its US$3bn loan. The facility is meant to fund the privatisation of its Hong Kong-listed unit. The company sent out invitations to around 10 lenders last week with all-in pricing as rich as north of 600bp over Libor, making it the second transaction in the market yielding...

Heavy-duty trucks and equipment manufacturer Caterpillar is working on its third offshore renminbi bond. It has hired Citigroup and Goldman Sachs as joint bookrunners and joint lead managers to arrange a series of offshore renminbi (CNH) fixed-income investor meetings in Hong Kong starting March 8. A benchmark offshore renminbi-denominated Reg S senior unsecured issue may follow. Caterpillar is also the only foreign borrower to have returned to the Dim Sum bond market, apart from a handful of domestic issuers, such as Hong Kong’s Hopewell...

Shinhan Bank has priced at 2.5% a Rmb625m (US$99m) one-year Dim Sum bond, which marks the first time a Korean commercial bank is tapping the offshore renminbi bond market in Hong Kong. Policy banks, such as Korea Development Bank and Export-Import Bank of Korea, have previously tapped the Dim Sum bond market. Settlement will be on March 14. ANZ was the sole bookrunner on the deal and Shinhan Asia was the joint lead manager. The deal from the A1/A/A rated issuer arrived at a level pretty much in line with its like-rated Chinese bank counterparts...

Chris Yencken and Chris Tonkin, former co-heads of project finance at ANZ, have joined Capital Advisory Services. The pair have been made partners of the boutique advisory firm, which is opening an office in Melbourne. Yencken was previously head of energy and utilities and Tonkin was head of natural resources at ANZ’s project and structured finance group. Rod Cameron, previously CFO of independent power producer NRG Asia Pacific and power developer Energy Developments, established Capital Advisory Services in Brisbane. “Now, with Chris Yencken...

Three banks have joined a US$108m three-year term loan for Masan Group in general syndication and two other banks are processing the credit. Mandated lead arrangers and bookrunners JP Morgan and Standard Chartered prefunded the bullet loan in August 2011 and launched it into syndication in early November. As there is a strong possibility of the loan being refinanced with a bond one year after signing, the all-in returns are considered more attractive. The loan offers a margin of 350bp over Libor and, based on the potential remaining life of...