Reg S: The team searches for the perfect deal in Korea

A surge of overseas investment in Asian government bonds is threatening the region’s financial stability, in an eerie echo of the build-up to the Asian financial crisis of 1997–98. Asian treasury bonds are emerging as major beneficiaries as global investors step up their search for higher returns. However, the flow of hot money is distorting yields and increasing Asia’s exposure to a devastating capital flight should those inflows suddenly reverse. The government bond markets of Thailand and Korea attracted foreign funds of US$809m and US$1.9bn...

A pedestrian walks past the company logo of Tudou located outside their headquarters in Shanghai. Two small US listings are about to show whether investors are again ready to embrace China’s internet sector after confidence evaporated last year. Online discount retailer Vipshop and internet advertising platform AdChina are bidding to reopen the US IPO market for Chinese issuers with the first deals from the country’s internet sector since August. The two IPO filings come as anticipation is building ahead of a US$2bn–$3bn US listing for Jingdong...

Source: Reuters/Chaiwat Subprasom A resident rows a boat out to buy food on a flooded street in Nonthaburi province. A heavy pipeline of overseas bond sales in Thailand, coupled with government flood-related borrowing, is in danger of crowding out local corporate issuers. “The government’s flood-related borrowing could squeeze liquidity,” said a debt capital markets banker. The result, according to bankers, is that local corporate issuers may end up having to pay more for their baht-denominated bonds. The effects are already being felt. Local...

Source: Reuters/Arnd Wiegmann The logo of Swiss bank Credit Suisse is seen at the company’s headquarters in Zurich. India’s corporate sector is pulling out all the stops to refinance the US$7bn in convertible bonds due for redemption this year. The latest to dodge a refinancing squeeze is JSW Steel, which has said it will replace its maturing CBs with an unusual equity-linked loan. A JSW announcement last week soothed fears of widespread defaults on foreign currency CB. This came as Fitch warned that almost 20% of the CBs due to mature this...

Source: Reuters/Darren Staples A shopper leaves a Tesco store in Loughborough, central England. The sale of a controlling stake in electronics retailer Hi-Mart is raising hopes of a return of leveraged buyouts in South Korea. The presence of several private-equity firms on the list of likely bidders comes as buyout firms are already circling a number of Australian auctions, providing a further boost for Asia’s LBO market. Hi-Mart’s half-a-dozen PE suitors, however, will have to contend with some of the biggest strategic names in the business,...

Source: Reuters/Vivek Prakash State Bank of India chairman O.P. Bhatt speaks during a news conference at the bank’s office in Mumbai. Saddled with a need to fund growth, Indian borrowers are preparing to return to the US dollar bond markets. And, with spreads on Indian bonds nearing their tightest levels over Treasuries for six months, the drought of new issues is about to become a deluge. More than a dozen Indian issuers are ready to print offshore bonds. Many had already awarded mandates in the past few months, but did not print the deals...

Source: Reuters/Sheng Li A resident walks past newly-built residential buildings under construction in Shenyang. Holders of US dollar bonds that China property companies issued are bracing for the release of February property sales data. There are growing fears that a severe contraction in sales will reverse a rally that has gathered pace since the start of the year. The data could upset those who saw the US$6bn-plus bond issues from Hong Kong property companies so far in 2012 as a prelude to the return of Chinese property companies to the bond...

Source: Reuters/Tim Chong Photo illustration of Singapore one dollar coin. Perpetual bonds are fast becoming the must-have accessory for Singapore’s yield-hungry savers. A willingness to take on additional risk in return for higher coupons is allowing a string of companies to raise funds without affecting their gearing ratios or diluting shareholders. Commodities firm Olam International kicked off the list of hopefuls on February 22, while Singapore Post and Genting also announced roadshows. “The market has heaps of money,” said a...

Mandated lead arranger and sole bookrunner Deutsche Bank has relaunched the loan for mainland-based industrial gas supplier Yingde Gases Group after revising the terms in a bid to smooth the deal. Under the new terms, the size of the amortising facility is now US$100m–$150m, compared to the original US$100m when the deal was first launched last September. The maturity has been cut to three years from four, with average life now at 2.5 years instead of 3.25. The deal’s margin has been reduced to 355bp over Libor from the original 375bp over...

The Highway Bureau of the Transport Department of Jiangsu Province sealed a 10-year term loan of Rmb8.72bn with seven banks. The Rmb8.72bn is part of a Rmb14.67bn syndicated loan the bureau sought in January to refinance its existing bilateral loans with 13 banks. Industrial & Commercial Bank of China is the mandated lead arranger on both facilities. It holds Rmb2.15bn of the term loan. Bank of Communications Jiangsu joined as a co-lead arranger on both facilities, holding Rmb2.7bn in the term loan. Bank of China (Rmb1.6bn), Shanghai Pudong...

Buyout firm TPG Capital has returned with a US$825m takeover offer for surf-wear company Billabong International. The offer that does not preclude the sale of its Nixon watch brand announced the week before last, as the sponsor canvasses financiers to provide the debt. Billabong said on February 20 that TPG’s non-binding and indicative offer of A$3 per share was subject to due diligence and finance, and conditional on a number of other matters. TPG has been speaking to a number of banks to provide the debt funding, including Mizuho Corporate...

Around six to seven bids have gone in for the 8.5-year loan of up to US$500m for Mangalore Refinery and Petrochemicals. The bidders include Indian and Japanese banks and one joint bid. Banks were invited to bid with commitments of at least US$50m. One bid came in for more than US$100m. The final response deadline was February 10. Last December, MRPL sent out requests for proposal for a US$250m loan with a US$250m greenshoe option. SBI Capital Markets is the adviser and arranger. A club deal is expected to firm up once pricing and terms are...